Knowledge is Power

May 30, 2008 8:43 AM


Strong Resistance at 106.00 and 106.10 and before that 105.80 so that seems like the Danger Point if Above It !!! Good Shorting Opportunity keeping in mind;

(1) Dow Open At 9:30 AM Futures UP 44
(2) Oil and Gold NOW UP !!!
(3) Two Year US Bonds at 2.62% Yield (Backing Off High) Recent Days

To Come Final Michigan FED with Consensus at 59.5 (4Cast Calls 59)

A 59 Will be Negative for Dow and Positive for USD/JPY

Stay Tuned...

Where is everyone this morning ? The Early Bird Does Get The Worm !!!


Bruce

http://quotes.ino.com/chart/?s=NYBOT_DX&v=s


Bruce

I'm here following along, but only with moderate interest today. I am sick, caught a nasty cold, fever, the whole nine yards. I won't be trading today as I'm heavily medicated... lol.

I don't feel you should trade unless you are bringing your A game, and I am definitely not today.

As a side note, I held the trades last night until the stop loss was hit, so the demo's produced +21 pips and the live trade +18.

Ron.

How can it be bad for DOW but we good for UJ..?

It looks like we are going to retest the high which I have at 105.87 Stochastics: Daily heading towards the ceiling, 4hr at the ceiling, 1 hour heading towards the ceiling.

Should mean that we will go up at least to the high, maybe a little more, then another downturn.

The unsettling part is, there is still room for upward movement, so I'm hesitant to say that 105.87 won't be breached.

Let's see what happens...

Ron.

9:45 US Chicago Purchasing Manager May Exp: 48.5 Prior: 48.3
10:00 US U. of Michigan Confidence May Final Exp: 59.5 Prior: 59.5
10:00 US NAPM-Milwaukee May Exp: 47 Prior: 48
11:45 US "Greenspan Speaks in Montreal on Policy, Economy, Markets"
12:30 US Boston Fed's Rosengren Speaks on Economic Outlook
30 - May CA Canadian Finance Ministry to Hold Press Conference in Montreal


Bruce

P.S. By Way of teaching. The funds that left US Bonds (2 and 10 Year) in Billions that were parked in CASH have started returning this morning as it goes into Oil and Gold and the Dow and other places. That is very important to know and understand. I did spot that yesterday and that is why Gold and Oil went down as the Commodities were sold the CASH stayed out of Bonds as they were sold as well. Maybe One Trillion In Cash was parked in someone's mattress as Art Cashin just said on CNBC.

Unfortunately it was NOT my Mattress just yet. I am working on it !!!

Actually my wealthy millionaire Friend would take much of his NEW profits and buy Gold with it and hide it on his property.

That was three years ago when Gold was lower. He was a excellent Commodity trader and he helped me learn about the psychology of trading.

The market opens in 15 minutes with new data in 30 minutes.

Be Alert !!!


Bruce

If Chicago PMI comes out bad im shorting.

106.00 is REAL STRONG Resistance and Then 106.10

Just Look at a Daily and Monthly Chart or post one here. First Test is 105.90 BUT I am not sure we get there. Especially if Data is Bad BUT if Good or better than Consensus TEST will come.

However then at 9:55 AM is Chicago PMI which is a preview of ISM next week. A Number below Consensus will be BAD. Below 50 is Contraction in the Economy.

2 Years holding at 2.62% Charts are only able to go so far. The NEW data will decide the direction. The Charts show you where the masses are staking things out.

The DATA is KEY !!!

Please Remember That. Technicals are for Entry or Exit !!!

DC Bonta only calls for a SHORT at 106.00 and hold for 105.50

His Trade DOES NOT GO ON UNLESS it Touches or nears 106.00

Patience and Safety !!! Less Trades BUT Less Risk !!!

Bruce

Dow Futures were UP 44 so You should watch PRE OPEN if it moves UP or DOWN !!!


Good FX Trading Today...

Bruce

P.S. Dow Futures Still UP 44 High in USD/JPY is 105.75

It will take NEWS to MOVE it OVER or Dow up 75 or so...

Please Keep In Mind That USD/JPY going down means the YEN gets stronger.

This is a Currency Pair NOT a Future Contact.

USD/JPY Spot Forex is now 105.64 Bid BUT the June Futures Contact It is now 94.73 Bid

The DIFFERENCE is the Spread on the Futures Contract though only a small one as June soon expires and we go to the next month.

Is that clear ?


Bruce

http://www.moneyandmarkets.com/Issue...erEntryId=1836


If you do not understand please POST your questions. This knowledge will give you a EDGE over most FX traders. Especially the NON Professional ones who do not have this type of research or even want to understand it.

Bruce

P.S. Chicago PMI in 4 Minutes is out.

49.1

30 May 2008 13:45 GMT

BULLET: US DATA: May Chicago PM index 49.1, vs 48.3. Prices..

US DATA: May Chicago PM index 49.1, vs 48.3. Prices paid a high 87.5.
Employment 41.2, new orders 56.1, inventories 42.2, production 51.5.

Provided by: Market News International




Bruce

Revised Michigan Sentiment
59.8

why are we dropping.

The Week Ahead updated 5-9 June 2008 - Forex.com

A Fed rate hike? Not so fast
The greenback picked itself up off the mat, dusted itself off and rallied back from the brink, aided by a surge in US interest rates. Over the course of this past week, US 10 year yields rose 30 points at their highest, before finishing out up 20 bps just above the key 4.00% level. 2 year yields rose over 30 bps, but finished out similarly up about 20 bps and just above the 2.60% level. The proximate cause for the jump in rates was a widely expected upward revision to 1Q US GDP (from +0.6% to 0.9%) and a stronger than expected April durable goods report. The better data came on the heels of several weeks of heightened anti-inflation rhetoric from Fed officials, which was compounded with additional inflation warnings this week from the Fed’s Stern and Fisher, which coalesced into increased prospects for a Fed rate hike. A rate hike?

Seems to me we’ve been here before. Several weeks ago when speculation first swirled that the Fed would react to higher inflation by raising rates, I suggested that the market was pricing in a US recovery before we even went through the downturn. Let’s not forget that 1Q GDP is backward looking and that durable goods is a notoriously volatile data series. Instead, let’s remember that the US is in the midst of a serious downturn where the greatest pain, from the broad consumer-led sector, has yet to fully materialize. Let’s also remember that nearly every other US data report in recent weeks has pointed to further deterioration in the key weak spots of the consumer economy. House prices continue to fall (faster than expected); employment conditions continue to weaken (continuing claims rose to 3.1 mio); energy prices continue to rise (gasoline pump prices hit $4/gallon) and credit conditions remain tight (mortgage rates rose sharply). True, financial market and credit conditions have stabilized in recent weeks and the smell of fear has lifted somewhat. But a blanket of gloom still hangs over markets, and risk aversion seems to be waiting in the wings for an encore rather than exiting the stage completely. About the best that can be said about the US economic outlook is that the deterioration is not accelerating, yet.

The jump higher in US rates is also suspect due to its timing. The bond sell-off/yield surge came suspiciously close to month-end, when market liquidity tends to evaporate and bad things happen to otherwise good positions. I would note that the bond selling/yields rising came to a rather abrupt end on Thursday afternoon after comments from Nobel laureate and Harvard economist Martin Feldstein, who is also the head of the NBER (National Bureau of Economic Research, the designator of recessions, suggested that virtually all current data are pointing lower and that it would be a mistake for the Fed to hike rates now. Yields fell back down, but managed to hold on to the bulk of recent gains. Still, with the fundamental US outlook as precarious as it is, the risk is for further yield declines, especially at the start of a new month. Traders should be alert to Treasury yields dropping back below 2.60% (2 year) and 4.00% (10 year), as a sign that markets are yet again pricing out premature rate hike expectations.


Short-term outlook for the USD
The rise in US rates is the main story behind the recovery in the USD this past week. As FX traders, we have all been forced to become oil and stock traders in recent months, and now it looks like we need become interest rate traders. As I outlined above, the fundamental basis for US rates to rise is highly dubious and we may be witnessing only a short-term rebound in the USD. I remain of the view that we are operating in a broad range environment (EUR/USD 1.53-58, USD/JPY 100-106) as central banks have moved to the sidelines to monitor incoming economic developments. Within the confines of those ranges, though, EUR/USD has dropped out of the upper third and has the potential to see all the way back to the lower end. The drop through the 1.5620/50 support zone is the immediate resistance area that keeps the focus for the EUR lower. The trigger to a push to the lower end of the range is likely on a sustained break of key daily trendline support off the lows from early February, which is now at 1.5500. That trend line was briefly broken on Friday, but we look set to close comfortably above it, keeping it intact on a daily closing basis. Market flows saw real money types selling EUR and buying USD in earnest for the first time this year and the talk was that few were positioned long USD in any significant way. But I am also mindful that the same institutional types were in buying EUR/USD with abandon just two weeks ago above the 1.5750 level. Such is the nature of ranges. EUR/USD strength above 1.5650 is liable to leave few unscathed, but until then I have to favor selling EUR/USD on strength.

USD/JPY is even more highly linked to US rates and seems poised to go which ever direction Treasury yields move. The linkage to stocks seems in abeyance for the moment, but stocks have also been reasonably stable, so I can’t take stock market developments off the radar just yet. USD/JPY is finishing out the week near recent highs around 105.50/80 and I would tend to favor the range top holding. There is also prominent daily trendline resistance at 106.50/60, which is drawn off the highs dating back to July 2007, and that will be the test of whether the USD is truly breaking higher. Key Ichimoku supports are below at 104.20/30, and a drop below there would confirm that the move higher has ended and target weakness back to 102.30/50 initially.

[Emphasis added]

http://www.jsmineset.com/


Bruce

This as well. Please Read Me !!!

http://www.goldensextant.com/

Have A Great Weekend. More Postings On Sunday.

http://www.financialsense.com/Market/wrapup.htm


Please Read Me. This Is A Excellent Piece On The Dow and Whether We Are In A Bull Or Bear Market. Trading USD/JPY as I do it is essential to be aware of this issue.


Bruce

http://www.forexfactory.com/attachme...3&d=1212233779


Bruce

http://www.actionforex.com/action-in...2008060147841/


Four central banks are scheduled to meet this week, including ECB, BoE, RBA and RBNZ. All are expected to leave rates unchanged. Though, markets will pay special attention to RBA's statement on hints of further rate hike, as well as ECB press conference as usual. A number of important economic data will also be released from the US, including ISM Indices and Non-Farm Payroll which are closely watched for sign that the worst in the US economy is over and solidify the Fed hike speculations.
Inflation data from US saw both headline and core PCE unchanged at 3.2% yoy and 2.1% yoy respectively. Personal income rose 0.2% versus consensus of 0.1%. New Home sales posted a surprise 3.3% gain in Apr from downwardly revised 509k to 526k. S&P/Case-Shiller Composite-20 house price index dropped -14.4% yoy in Mar, biggest fall on record. Durable goods orders dropped for the fourth consecutive months in Apr by -0.5% but was above expectation of -1.5%. More importantly, ex-transport orders unexpectedly rose strongly by 2.5%, comparing to expectation of -0.5%.Conference Board Consumer Confidence dropped more than expected from revised 62.8 to 57.2 in May, the lowest reading in more than 15 years since 1992. Preliminary Q1 GDP results revised up to 0.9% annualized growth, inline with expectation. GDP price index was unchanged at 2.6% while personal consumption is unchanged at 1.0%. Though, PCE core was revised down to 2.1% qoq. Jobless claim is slightly above expectation at 372k.


Bruce