Auslanco - GBP/JPY and GBP/USD (newstrade)

I posted this storm surge measurement from a buoy near the oil production area. I haven't heard anything yet regarding the condition of the production wells/pumps/pipelines/etc., but I wouldn't be surprised to hear that they have been damaged badly.

http://farm2.static.flickr.com/1004/...69dc096e50.jpg

Citigroup Raises Yen Forecasts as Subprime to Hurt Carry Trades

By Stanley White
Aug. 20 (Bloomberg) -- Citigroup Inc. raised its year-end forecasts for the yen by 15 percent as financial market turmoil sparked by losses on U.S. subprime mortgages will reduce appetite for carry trades.
The yen gained against the 16 most-active currencies last week and rose the most against the dollar in more than five months as delinquencies on mortgages to U.S. homeowners with poor credit made banks reluctant to lend. A credit crisis and a sell- off in global equities prompted a reversal of bets on higher- yielding and riskier assets made with borrowed yen, known as carry trades.
``Developments last week have changed our view,'' Masafumi Yamamoto, currency economist at Nikko Citigroup Ltd. in Tokyo and a former Bank of Japan currency trader, said in an interview today. ``We expect more negative news related to the subprime issue. For the time being, the yen carry trade isn't an attractive strategy.''
Japan's currency will rise 8.9 percent against the dollar to 105 at year-end, the world's third-biggest currency trader said, compared with a previous forecast of 121. Against the euro, the yen will gain 5.7 percent to 146 at the end of December, from an earlier forecast of 169, Citigroup said in a report dated Aug. 17.
The yen traded at 114.39 against the dollar at 1:15 p.m. in Tokyo from 114.36 late in New York on Aug. 17, when it rose to a one-year high of 111.61. Against the euro, it was at 154.33 from 154.10 at the end of last week and from 149.27, the strongest since November 2006.
Commodity Currencies
Commodity prices may no longer support many of the higher- yielding currencies that benefited from the carry trade, according to Yamamoto.
The Reuters/Jefferies CRB Commodity Price index has fallen 6.3 percent since reaching the highest in almost a year on July 20, due to speculation global financial market losses will slow economic growth and cut demand for raw materials.
New Zealand, Australia and Brazil have the worst-performing currencies against the yen since commodity prices started falling. The three countries rely on materials exports and have benchmark interest rates at least 6 percentage points higher than Japan's 0.5 percent rate, the lowest in the industrialized world.
``Subprime is also negatively affecting emerging-market currencies and commodities,'' Yamamoto said. ``This is like a double punch for the carry trade.''
Asian Currencies
Citigroup also cut forecasts for the Malaysian ringgit, Philippine peso, Singapore dollar, Thai baht and Vietnam dong by year-end on concern the U.S. economy will slow from subprime losses, easing demand for the region's exports.
The bank made the changes in a report published Aug. 17. Citigroup's Hong Kong-based Adrienne Lui confirmed the changes in a telephone interview.
The ringgit will rise to 3.48 per dollar by year-end from a previous forecast of 3.40. The Philippine peso will strengthen to 44.50, from an old estimate of 44 and the Singapore dollar will increase to S$1.5050 from S$1.4850.
Securities companies and banks that report quarterly results around November are likely to say subprime fallout diluted their earnings, Yamamoto said. Investors may also apply in November to withdraw their money from hedge funds that haven't already suspended redemptions, according to Yamamoto.
Sentinel Management Group Inc., a cash-management firm, applied for bankruptcy three days after it froze client withdrawals on Aug. 14 due to credit market turmoil. Goldman Sachs Group Inc., the second-biggest hedge fund manager, joined investors on Aug. 13 to pump $3 billion into one of its funds that declined 28 percent in the past month.
U.S. Economy
The U.S. economy will start to slow from the first quarter of next year as rising mortgage delinquencies worsen a housing slump, making investors more sensitive to risk, according to Yamamoto.
The Federal Reserve said ``tighter credit conditions and increased uncertainty have the potential to restrain economic growth'' after unexpectedly lowering the discount rate it charges banks by 0.5 percentage point to 5.75 percent on Aug. 17.
Interest-rate futures show traders see a 100 percent chance the Fed will lower its benchmark lending rate of 5.25 percent by at least 0.25 percentage point when it meets Sept. 18, up from 8 percent odds a month ago.
``Financial results may worsen due to problems in the credit market,'' Yamamoto said, confirming a report published today. ``The U.S. economy should slow due to an adjustment in the housing market. These developments would create a negative environment for carry trades.''

bad news just keeps on coming - might be good news if you are on the correct side

229 turned into support? hmm

I told you that bad news was just going to keep coming in. The stock market rising and GJ going up can only go up because of speculators greed outweighing their fear. A steady drip of bad news will quickly send the speculators back to the exits.

I noticed the same thing, It was a strong resistance and now a very sound support!!! Are we ready for a take off?

A very nice quote from Walter Bagehot, written in the 19th century and quite appropriate for us.

I have zero doubts, we will reach 231.50, it's all about patience and not panicking everytime the market goes against you 50-100 pips

awesome quote markam

the 4hr strength is about to cross over 50. does this mean we may finally be headed up?

The dow has not been able to top its high of earlier. I wouldn't plan on long at least until after the market closes.

This is not to indicate that I plan on long. Worst case I will hedge until the collapse.

30 minutes until dow closes. Let's see if it can hold the gains.

what next Karmo? Will it go down from there? Thanks...

agreed. that 229.55 resistance is very strong. 4hr candles have tried to break that numerous times but has been unsuccessful. would need a solid break and candle opening above 229.55 to have a long. I dont see that happening with the dow open. After the dow closes anything can happen though, could bounce right off that resistance and head back down. lets see what happens

Which is why i have a buy limit at 229.80. Hopefully it won't be a false break out once it reaches this point.

at least 5 times today over 13,200, with complete failure to go past 13,220. I would say bad news at least for the stock market bulls. Lets see what happens in the last 30 minutes.

looks like its trying for another push...up to 13238, lets see if it can hold.

it is like watching a boxing match.

looks like its trying for another push...up to 13240, lets see if it can hold.

DOW just barely touched 13245 which I was waiting for since yesterday