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

  • #25,521
  • Sep 12, 2007 10:51am Sep 12, 2007 10:51am
Quoting mktjong
If I may try based on this scenario, maybe Markam can correct me later. If oil price is up will cause JPY down which is cheaper for equity investor to borrow yen and buy stocks.

Be careful on speculating based upon the effect of oil prices on the Japanese market. The US market has pretty much ignored oil prices because speculators have kept the price of gasoline down. When we start seeing disruptions in the gasoline distribution system, you will see gas prices jump a dollar almost overnight. This will crash the US stock market and GJ.

Also keep in mind that the weakening dollar is offsetting a lot of the oil price increases we are seeing for the rest of the world. If oil prices are up 5%, but the dollar is down 10%, that is a price decrease for most of the world.
  • #25,522
  • Sep 12, 2007 10:56am Sep 12, 2007 10:56am
Quoting markam
At the point of worldwide economic collapse. Even if the US goes into a depression and oil consumption drops, China will just use what we don't.
I'm not sure. I'd say the current energy requirements are due to booming economies. China is highly dependent on the west for their production. If the whole thing blows up, I can see stocks/DOW and crude all taking a big tumble. There will be no need for so much energy until the next boom.

In the UK we have not noticed a great increase in gas/petrol prices lately due to the appreciating value of the GBP in comparison to the USD (as crude is priced in USD). Now if the GBP was to fall considerably, then inflation goes up and so do interest rates, thus keeping the GBP high. So far that has worked well here.
  • #25,523
  • Sep 12, 2007 11:05am Sep 12, 2007 11:05am
Quoting Zoran
I'm not sure. I'd say the current energy requirements are due to booming economies. China is highly dependent on the west for their production. If the whole thing blows up, I can see stocks/DOW and crude all taking a big tumble. There will be no need for so much energy until the next boom.

In the UK we have not noticed a great increase in gas/petrol prices lately due to the appreciating value of the GBP in comparison to the USD (as crude is priced in USD). Now if the GBP was to fall considerably, then inflation goes up and so do interest rates, thus keeping the GBP high. So far that has worked well here.
China is the second largest car market in the world, and purchases have been increasing 20-40%/year. There were 5.9 million new car owners in 2005. The will be 8.5 million new car owners in 2007. These cars will be driven, regardless of what happens to the Chinese economy.

It is almost impossible to reduce gasoline usage over the short-term. In a booming economy, China's oil usage will probably increase 10-15%/year. In a massive depression it might only increase 2-4%/year.

Oil usage will not drop until there is literally no oil left to buy.
  • #25,524
  • Sep 12, 2007 11:06am Sep 12, 2007 11:06am
I posted my DOW key-reversal point yesterday - around 13,689. I'm not sure of the timing but it may be soon. Time analysis is not a strong point of mine.
  • #25,525
  • Sep 12, 2007 11:06am Sep 12, 2007 11:06am
Quoting markam
Be careful on speculating based upon the effect of oil prices on the Japanese market. The US market has pretty much ignored oil prices because speculators have kept the price of gasoline down. When we start seeing disruptions in the gasoline distribution system, you will see gas prices jump a dollar almost overnight. This will crash the US stock market and GJ.

Also keep in mind that the weakening dollar is offsetting a lot of the oil price increases we are seeing for the rest of the world. If oil prices are up 5%, but the dollar is down 10%, that is a price decrease for most of the world.

yah yah ..I recalled several years ago when oil price was high and about to hit $40 or $60 per barrel. I think it was also the time when US was about to hand over to Iraq government. Stock was taking a big plunge.
Heard stocks movement are much speculated by big boys as they desire .. don't know.
  • #25,526
  • Sep 12, 2007 11:11am Sep 12, 2007 11:11am
Quoting Zoran
I posted my DOW key-reversal point yesterday - around 13,689. I'm not sure of the timing but it may be soon. Time analysis is not a strong point of mine.
I think that 13400 should be the dow ceiling unless the feds cut the rate by .5% next week. Even if that happens, I think the adverse effects on the dollar will prevent the market from really rising.
  • #25,527
  • Sep 12, 2007 11:14am Sep 12, 2007 11:14am
Can't help but agree with most of what Markam says. Watching the Dow rise in the current economic climate kind of matches an anology of passengers dancing to the music of the orchestra on the Titanic in denial of the holes below the waterline that are causing the ship to sink!

Last week I switched to USD/JPY 'cause I "expect" dollar weakness and thought GBP strength might negate U/J weakness and cause G/J to range (like last Wednesday) but am quite amazed how the $ is holding up ....bizarre! Just can't bring myself round to going long on anything $ so hanging on to my U/J short. Common sense has to sink in to the Dow traders sometime???? I hope.

Anyway....good luck !!
  • #25,528
  • Sep 12, 2007 11:15am Sep 12, 2007 11:15am
Quoting markam
China is the second largest car market in the world, and purchases have been increasing 20-40%/year. There were 5.9 million new car owners in 2005. The will be 8.5 million new car owners in 2007. These cars will be driven, regardless of what happens to the Chinese economy.

It is almost impossible to reduce gasoline usage over the short-term. In a booming economy, China's oil usage will probably increase 10-15%/year. In a massive depression it might only increase 2-4%/year.

Oil usage will not drop until there is literally no oil left to buy.
When they start losing jobs because production has decreased due to failing western economies, demand should fall considerably I think (crude back to $50) - but you are correct, not in the short term. That's just my opinion.
  • #25,529
  • Sep 12, 2007 11:16am Sep 12, 2007 11:16am
232.08 is a good resistance level
Trade what you see, not what you think.
  • #25,530
  • Sep 12, 2007 11:22am Sep 12, 2007 11:22am
when DOW was going up earlier, GJ was not moving much

now DOW is going down a bit, and GJ is right there behind it.. falling nicely
Trade what you see, not what you think.
  • #25,531
  • Sep 12, 2007 11:24am Sep 12, 2007 11:24am
Quoting karmostaji
232.08 is a good resistance level

You are da man
5min qqe (30) has crossed down too.
  • #25,532
  • Sep 12, 2007 11:25am Sep 12, 2007 11:25am
Quoting mktjong
You are da man
we will all be 'da man' once it breaks the annoying 231.40-70 area and never comes back
Trade what you see, not what you think.
  • #25,533
  • Sep 12, 2007 11:29am Sep 12, 2007 11:29am
An hourly close below 231.30 will get the bears out of their caves
Trade what you see, not what you think.
  • #25,534
  • Sep 12, 2007 11:31am Sep 12, 2007 11:31am
15m candle closed below 50ema

GU is kinda stuck, UJ is falling
Trade what you see, not what you think.
  • #25,535
  • Sep 12, 2007 11:34am Sep 12, 2007 11:34am
Just had a bounce of the 30 minute 50 ema
  • #25,536
  • Sep 12, 2007 11:34am Sep 12, 2007 11:34am
Quoting karmostaji
15m candle closed below 50ema

GU is kinda stuck, UJ is falling
hi bro
don't be ver happy
beast is still in range mood
  • #25,537
  • Sep 12, 2007 11:38am Sep 12, 2007 11:38am
Quoting karmostaji
An hourly close below 231.30 will get the bears out of their caves
If it can't. I would suggest that we better close it with small pips if possible. It is a bit scary when I look at the treasuries data which is quite strong .. it is very unlikely I would or could tank 100 pips
  • #25,538
  • Sep 12, 2007 11:38am Sep 12, 2007 11:38am
Quoting Navigator
Can't help but agree with most of what Markam says. Watching the Dow rise in the current economic climate kind of matches an anology of passengers dancing to the music of the orchestra on the Titanic in denial of the holes below the waterline that are causing the ship to sink!
I was an investor for a few years and all I would do is read the news to make sure the sentiment was going in the right direction. I would take it out when I thought there was trouble ahead. That tended to work well as price generally fell considerably below my exit point but would always return (to my frustration). I always wondered why people would re-enter under such circumstances.

But as a trader I can see that the news more often reacts to the markets rather than the other way around.
  • #25,539
  • Sep 12, 2007 11:38am Sep 12, 2007 11:38am
Quoting shahroodi
hi bro
don't be ver happy
beast is still in range mood
as long as I grab green pips, it can be in whatever mode it wishes
Trade what you see, not what you think.
  • #25,540
  • Sep 12, 2007 11:41am Sep 12, 2007 11:41am
Quoting mktjong
If it can't. I would suggest that we better close it with small pips if possible. It is a bit scary when I look at the treasuries data which is quite strong .. it is very unlikely I would or could tank 100 pips
DOW is our friend tonight, just be patient
Trade what you see, not what you think.
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