Knowledge is Power

Yeah I watched the video, I understand why. I actaully got in before the spike and sold it high.

Thanks Bruce!

http://benbittrolff.blogspot.com/200...-favs-may.html


Bruce

http://www.bloomberg.com/apps/news?p...LaU&refer=home


Bruce

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


Bruce

This is not today's Wrap Up...I will add it here when it is published. This one is still interesting to read as it calls the Bear or Bull Market. Today's drop does not help the Bulls.

The Wrap Up for Monday June 2, 2008 PLEASE READ ME !!!

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

02 Jun 2008 21:45 GMT

BULLET: YEN SUMMARY: Opened at Y104.82 and Y162.78 after and.

YEN SUMMARY: Opened at Y104.82 and Y162.78 after Y104.66/105.53 and
Y162.72/164.20 overnight ranges.
-- Yen was in demand as US and European stocks traded with a heavy tone
amid fresh banking worries and that tone continued in early US trading
as stocks opened on a soft note and extended losses. Dollar eased to
Y104.61 in early trade before bids at Y104.60 allowed a slight bounce
but stops below were soon flushed for trade at Y104.55. A slight rebound
on US data allowed fresh downside momentum to build as US stocks resumed
losses and dollar traded to Y104.30 ahead of midday. Ratings news
rattled stocks further, dollar skidding to Y104.02 before steadying
around Y104.25. Euro-yen meantime slipped steadily to Y162.30 through
the morning, holding near there through midday and seeing losses to near
Y162.00 in reaction to the ratings news. Later trade saw the dollar
regain some poise, recovering to Y104.40 with euro still near Y162.25.

Provided by: Market News International

http://www.financialsense.com/editor...2008/0602.html

The Markets
Last week, treasury yields hit their highest levels of the year. This can mean one of two things. Either the economy is recovering, and the bond market is predicting an up-tick in demand-pull inflation. That’s bullish. Alternatively, the economy is not recovering and the bond market is predicting an up-tick in cost-push inflation – the bearish stagflation scenario.
Watch this carefully – along with the chess match currently underway between the U.S. Federal Reserve and the European Central Bank. At stake is the relative value of the dollar to the euro together with the fate of oil and commodity prices, which are tied to the dollar.
At this point, the Federal Reserve is likely done with cutting rates and the only question is when (and if) it will raise them. The currency markets understand this and have been bidding up the dollar relatively to the euro. As for the Fed, perhaps it has finally figured out that cutting rates is merely debasing the dollar, driving up the “oil tax” on American consumers and businesses, and having a net contractionary rather than expansionary effect.
Across the pond, the ECB goes back and forth between wanting to cut rates (to rescue Italy and Spain) or to raise rates (to cater to the German obsession with inflation). However, with the dollar firming because the U.S. Fed is done cutting, a falling euro puts into play an ECB rate hike. This is because a falling euro will contribute to inflation concerns and raising rates will prevent the euro from falling.
Of course, this all seems like a “damned if you cut, damned if you don’t cut” for both the Fed and the ECB,. This is why I think we are closer to a world of stagflation in which interest rate policy is ineffective than a Keynesian world where central bankers can solve one problem such as recession without exacerbating the other problem of inflation.
And by the way, the relevance of this seemingly arcane discussion to your trading should be obvious. The trends for the bond, currency, and stock markets will all ultimately be determined by monetary policy and its effect on interest rates and the dollar and euro and oil prices.

Bruce

SPOT TECHNICAL SIGNIFICANCE RECOMMENDATION POSITION

106.75(M)Feb 22 Daily Range Low Flat On A Failure FLAT at 104.56

open02/06/08time 21:06 targetstop106.45(M)TL Fm 123.67 Jul 07 Take Profit, Buy Break 105.85(M)

Spike High May 29 Sell Failure/Buy Breakout105.50(M)Hrly Trend & Range Rsst Sell A Failure 104.4923:00 GMT MON 02 JUN 103.90(M)Daily Low May 28 Buy Bounce/Sell Break 103.50(M)Daily High May 26 Cover On A Bounce 103.10(M)May 23 Low Buy A Bounce 102.75(M)May 22 Swing Low Take Profit


Strategy:[email protected] The price collapsed from 105.50/55 late in Asia to test 104.05 overnight and then settled around 104.50. The price action leaves the daily studies rolling over at marginally overbought levels, with the stochastic poised for a bearish cross and the hourlies mid range. Our bias is with the studies and we look to sell a topside failure. (ams) 22:58 GMT
end

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


Bruce

The following information is Mind Boggling...Comments Anyone ?

http://benbittrolff.blogspot.com/200...lse-alarm.html

The scary Fed charts are making the rounds on various blogs now.

Over at CalculatedRisk they are being interpreted as a “false alarm” in Non-Borrow Reserves and the Fed’s Balance Sheet.

Over at MarketTicker they are being interpreted as evidence that “the system as a whole is insolvent” in Tall Tale Tuesday.

While I’m not sure (yet) that “the whole system is insolvent”, I definitely do NOT think this is a “false alarm”.

CalculatedRisk: Non-Borrow Reserves and the Fed’s Balance Sheet: ““This graph, from the St. Louis Federal Reserve, shows the non-borrowed reserves of financial institutions. Looks like some serious cliff diving, but with a little research, we discover this graph is misleading.

The explanation is pretty simple. The Federal Reserve decided to classify the TAF and the primary dealer credit facility as borrowed reserves (see this table). If we back out these collateralized borrowings, you get the total reserves, and that has been very steady. False alarm.”

My Comment: First, lets start with “total reserves have been steady” if you exclude the Term Auction Facility (TAF). This, as I understand it, should not be done. This facility was specifically designed for depository institutions to replenish reserves:

Term Auction Facility (TAF): “Under the term auction facility (TAF), the Federal Reserve will auction term funds to depository institutions. All depository institutions that are eligible to borrow under the primary credit program will be eligible to participate in TAF auctions. All advances must be fully collateralized. Each TAF auction will be for a fixed amount, with the rate determined by the auction process (subject to a minimum bid rate). Bids will be submitted by phone through local Reserve Banks.”TAF FAQ

The TAF is currently at $100 billion and that has been drawn (Chart: TERMAUC). Bernanke raised the TAF limit to $150 billion on May 2nd. (Fed Officials Warn About Inflation, Say Markets Still Unsettled) Obviously there is a need for this liquidity. The chart measures exactly what it should: Non-Borrowed Reserves. The TAF is so large now, that Non-Borrowed Reserves are deeply negative.

What does this mean? Is “the system as a whole insolvent”? I would say POSSIBLY. We don’t know for sure YET and it may take years before we find out.

The Federal Reserve requires collateral from those borrowing through the TAF. We need to first understand the collateral, and margin rules on that collateral to determine how risky the TAF facility is.

Collateral FAQ
The Discount and PSR Margins Table

A good chunk of what can be used of collateral is low risk and transparent. For example, US Treasuries and Fully Guaranteed Agencies, Government Sponsored Enterprises, International Agencies, Brady Bonds, Foreign Governments, and Foreign Government Agencies are all liquid, can be valued and are transparent in the sense that you know what it is you’re holding.

BUT, then things get sketchy and they get really sketchy really quickly.

Municipal Bonds are mostly good collateral. I say mostly, because municipal defaults are generally very low. HOWEVER, the last 5 years of revenues and the projections of all future revenues are based on an illusion. That illusion was of perpetually rising real estate prices and therefore perpetually rising property tax income. Furthermore, the churn in real estate, the sheer volume of sales, also generated a large, non-reoccurring revenue stream from one time transaction taxes. Municipal expenditures rose with these income increases and future projections, on which bonds were floated, extrapolated this income stream into infinity. Some municipals are already under severe stress as their tax bases collapse. (See Tax Assessors Nightmare of at Mish’s for an in depth analysis of the pending tax implosion.)

Corporate Bonds Rated AAA are generally fine. On average only 23.3% of all bonds rated AAA were downgraded to AA over a 5-year horizon. This means that the collateral pool will gradually shrink as AAA corporate bonds slowly get downgraded as economic fundamentals deteriorate. Basically as AAA rated bond that gets downgraded won’t be eligible at the TAF any longer. So when the 28 day period expires, the bond is swapped back by the Fed. Default is almost impossible in such a short time frame.

BUT, that assumes that AAA today is as solid and reliable as AAA used to be years ago. Even sudden implosions, such as that of Bear Stearns, don’t tend to be a problem because the ratings of such firms generally aren’t high enough. Bear Stearns had been rated A+ before it imploded and therefore Bear Stearns debt wouldn’t have been eligible as collateral. The ratings agencies don't exactly inspire much confidence in their skills.

Further down the list we hit Asset Backed Securities, Commercial Mortgage Backed Securities, Mortgage Backed Securities, and Collateralized Mortgage Obligations. THIS is where the wheels come off…

First, OBJECTIVELY valuing these instruments is damn near impossible. That is WHY these markets have seized up. Second, they are not transparent. To figure out and hunt down the underlying assets in these derivatives of derivatives is also damn near impossible. Even worse is the fact that both AAA rated and NON-AAA are eligible when we already know that even AAA ratings in these instruments are deeply FLAWED and UNRELIABLE. Unlike corporate bonds, these instruments can suddenly collapse without warning. Therefore, the Fed really is taking a big risk on these.

Furthermore, the ‘haircut’ on all this collateral is ridiculously LOW. Most are only 1% - 3%. The lendable value of the worse of these is still 70% and that is only when there is NO MARKET PRICE AVAILABLE. I can tell you this, when there is no market price, there is also no way in hell the instrument is worth 70 cents on the dollar. No price and you can generously assume you’re not going to get more than 50 cents on the dollar and I say that would be a best case scenario.

“A more interesting chart was present by Dr. Janet Yellen this morning showing the Fed's balance sheet.

This graph shows that about half the Fed's U.S. Treasuries have been committed to fight the liquidity crisis.”

My Comment: Interesting indeed. Frightening as well. The Fed has basically traded in high quality instruments, US treasuries, for low quality instruments that the market doesn’t want at all or is pricing at levels deemed unacceptable by those market participants still denying reality. The Fed has committed half of its $800 billion balance sheet to battle the RESIDENTIAL real estate bubble implosion. The COMMERCIAL real estate bubble implosion has yet to get well underway. Revolving credit, such as credit card debt has yet to implode as well. Job losses have yet to accelerate. The recession has yet to gather steam.

I’ve said it before, The Fed Is Almost Out Of Ammo, Citigroup and UBS Too.

Total Borrowings of Depository Institutions (Chart: BORROW) are fast approaching $150 billion. This does not include the effect of the $50 billion increase in the TAF limit to $150 billion.

This has already pushed Non-Borrowed Reserves (Chart: BOGNONBR) to a NEGATIVE $100 billion. This is likely just to get worse as the balance sheets of financial institutions continue to deteriorate.

The balance sheets of almost all financial institutions, whether they be depository institutions or prime brokers WILL DETERIORATE further. They have to. The vast majority of their balance sheets are now in the Level 2 or Level 3 asset buckets. As I said in Bulltrap: ABCP, and Level 3 Bombs, I can’t imagine that these assets are currently being undervalued or even conservatively valued.

Today 8:59pm
Warren Forex http://www.forexfactory.com/images/s...ser_online.gif
Warrenforex
Member Since Sep 2006
Posts: 530


http://www.forexfactory.com/images/icons/icon14.gif The Purpose Of This Post !!!
Dear Fellow Posters

It can get overdone seeing such negative information that I am about to post. However as long as the facts are true and I challenge anyone to say why they are not.

Then if you have your head in the sand or refuse to accept the reality and not plan ahead then in the end you will be with the masses who for whatever reason are ignorant of the seriousness of the situation in the USA now and by obvious conclusion, in certain other countries. Use this information to plan ahead and be aware of the real truth.

That is why I keep bringing these articles to MY attention.

If there are changes for the better I will of course adjust my thinking.

Here is the article I just got in my email and I have carefully read every word.

Have a great evening and a good morning !!!

http://www.investorsinsight.com/blog...an-season.aspx

http://stats.adclickz.net/banners/Ev...0x250_kiwi.gif
Posted Jun 02 2008, 05:30 PM
by John Mauldin


http://s9.addthis.com/button1-bm.gif
Regular readers of Outside the Box will be familiar with Michael Lewitt's thoughtful commentary. Today, he reminds us that much of the turmoil we are in could have been avoided with proper regulatory structures and then does a very poignant analysis of various sectors of the economy. I agree with him that we have not seen the worst and that we will continue to see this mild recession/slow recovery for longer than we should without true structural reform.
On a side note, I will be on CNBC Tuesday morning at around 10:00 or 10:30 with Mark Haines and Erin Burnett, talking about commodity prices and regulation.
So without further ado, let's jump into today's Outside the Box.
John Mauldin, Editor
Outside the Box
The HCM Market Letter

by Michael E. Lewitt
June 1, 2008

The Hollow Men
We are the hollow men
We are the stuffed men
Leaning together
Headpiece filled with straw. Alas!
Our dried voices, when
We whisper together
Are quiet and meaningless
As wind in dry grass
Or rats' feet over broken glass
In our dry cellar
Shape without form, shade without colour,
Paralysed force, gesture without motion;
Those who have crossed
With direct eyes, to death's other Kingdom
Remember us - if at all - not as lost
Violent souls, but only
As the hollow men
The stuffed men.
T.S. Eliot (1925)

Introduction - The Mean Season

While many economic pundits are trying to predict the end of the American recession that began last summer, HCM regrets to inform everybody that the United States' economy is entering hurricane season. And we don't call it The Mean Season down here in Florida for nothing. The economic headwinds that have been buffeting the United States for the past several months are only increasing in velocity despite the Herculean efforts of the powers-that-be to bolster the system against collapse. At this point, the domestic economic picture can only be described as ominous. Energy prices have risen from dangerously high to prohibitively high. Housing prices are continuing to drop at alarming rates in many sections of the country. Banks remain reluctant to lend either to individuals or corporations for virtually any type of transaction. And our political and business elites remain a prosper of Hollow Men who continue to whistle past the graveyard as their limousines chauffeur them home each night to their gated mansions.
HCM harps on this leadership void because policy failures led us into our current difficulties. Inadequate financial regulation allowed unfettered securitization and leverage to push the system to the brink of collapse. A complete failure to fashion a responsible energy policy has led to skyrocketing gasoline prices. The damage inflicted on investors, consumers and businesses by these failures were avoidable. Instead, the political and financial elite placed their own short-term interests ahead of the long-term interests of everybody else, and the results are plain to see: burgeoning inflation, choked credit markets, and a deteriorating physical, moral and cultural climate. The only way to improve things is to identify what ails us and then initiate systemic reform. But systems cannot change unless the individuals who manage and participate in them are willing to change. HCM's past two newsletters ("How to Fix It," April 1, 2008 and "Why We Must Fix It," May 1, 2008) were attempts to engage our readers in the type of debate that must occur as we enter a Presidential election at this crucial and uncertain time in history. In this issue, HCM focuses to a greater extent than in our last two issues on the economic headwinds that are frankly alarming us.
The U.S. Economy

An array of American industries is beginning to experience deep distress. Three in particular are about to experience a wave of restructurings or defaults that will drive a stake through the heart of the American economy: airlines, automobiles and retailers.
The Airline Industry - Unfriendly Skies
Having tried to merge in virtually every permutation available and failed, the airlines are now left with no choice but to cut capacity and pray for oil prices to fall. American Airlines, generally considered the best managed and healthiest U.S. airline, announced on May 21, 2008 that it will cut its capacity by 12 percent and reduce its workforce by a commensurate amount due to high oil prices (which account for 40 percent of its cost structure).1 Delta and Northwest, which had the dubious distinction of filing for bankruptcy on the same day, have announced that they will merge (although in the airline industry there is a huge distance between the cup and the lip, so whether this deal is ultimately consummated remains to be seen). United and USAir have been flirting with each other but seem unlikely to mate despite titters that they may try to hook up again. The bottom line is that airlines, which are marginal businesses in the best of times, are unsustainable businesses with oil at current levels. The industry was partially nationalized after 9-11. The current oil spike should finish the job.
The Automobile Industry - One Big Pothole
The automobile industry continues to be weighed down by the albatrosses of outmoded products, unionized workforces, crippling legacy costs, higher raw material costs and the unavoidable conclusion that the world has passed them by. It is both startling and depressing to hear American automakers just now coming to the conclusion that they are still manufacturing too many gas-guzzling trucks and SUVs and too few hybrid and diesel passenger vehicles. Few industries have seen such profound failures of vision and leadership. Ford announced in late May that it no longer expects to be profitable in 2009 and expects to produce 120,000 to 150,000 fewer trucks and SUVs in the third quarter of 2008 than a year earlier, and 60,000 to 100,000 fewer in the fourth quarter of this year than last year. Job losses and plant closings are sure to follow unless current facilities can be converted to manufacture more fuel efficient vehicles. Ford is generally considered the healthiest of the Big Three.
Now General Motors, whose stock (see Graph 1 below) has hit a multi-decade low, is preparing a new restructuring plan in order to reduce costs and preserve cash. The reference to "preserving cash" should raise alarm-bells in the minds of investors in General Motor's debt and equity securities. HCM has long maintained in this publication and elsewhere that General Motors will ultimately have to restructure its balance sheet (probably through a bankruptcy filing). We take no pleasure in noting that the evidence is mounting that General Motor's woes appear to be accelerating. The ongoing soap opera at General Motor's largest parts supplier, Delphi Corp.,2 is also placing additional financial stress on the company since General Motors has continuing financial obligations to the parts maker, which it spun off several years ago. Investors should not for one minute try to convince themselves that General Motors is too big to fail. It is not a financial institution like Bear Stearns whose bankruptcy would call into doubt the viability of the financial system. General Motors is just a stumbling industrial giant that has outlived its usefulness and failed to adapt to the times. Investors should avoid General Motors' securities even if it means taking losses at current prices.


Bruce
Last edited by Warren Forex, Today 9:01pm Reason: To Add Snippet Of The Article:

http://www.forexfactory.com/images/misc/progress.gif

Candlestick Forecast for 3 June 2008

Based on Daily Candlestick on 2 June (Monday)
[Note: Sunday bar is ignored, save that the opening data is taken as Monday opening data]


USDCHF
- Incomplete Dark Cloud Cover: Bearish in nature but need confirmation


PREVIOUS 1st DAY CANDLESTICK SIGNAL
-- - Bullish Golden Cross: Buy Signal

PREVIOUS 2nd DAY CANDLESTICK SIGNAL
-- White Inside Out: Break out, Buy Signal


USDJPY
- Incomplete Dark Cloud Cover: Bearish in nature but need confirmation

PREVIOUS 1st DAY CANDLESTICK SIGNAL
- Black Star Reversal: Could be market top. Wait for confirmation and check Stochastics for confirmation.
- Incomplete Dark Cloud Cover: Sell on confirmation
- Thrusting Line confirmation: Overbought

PREVIOUS 2nd DAY CANDLESTICK SIGNAL
-- Thrusting Line confirmation: Overbought
-- Bullish Trending Lines take over: Bullish Continuation


EURUSD
Black Bearish Candel

PREVIOUS 1st DAY CANDLESTICK SIGNAL
- Bullish Harami Line: Look for Reversal.

PREVIOUS 2nd DAY CANDLESTICK SIGNAL
-- Engulshing Bearish Line continuation
-- Sell Signal (Reversal of previous bullish trend)


GBPUSD
Sell Signal

PREVIOUS 1st DAY CANDLESTICK SIGNAL
- Confluence Sign: The forecast signal (trade recommendation) will be issued from the outcome of this process.

PREVIOUS 2nd DAY CANDLESTICK SIGNAL
-- Neutral Body Reversal: Neutral Signal – wait for next signal.


GBPJPY
- Bearish Hangman Confirmation: Sell Signal

PREVIOUS 1st DAY CANDLESTICK SIGNAL
- Thrusting Line confirmation: Overbought
- Stochastic Oscillator signal is Overbought

PREVIOUS 2nd DAY CANDLESTICK SIGNAL
-- Thrusting Line confirmation: Overbought
-- Bullish Trending Lines take over: Bullish Continuation

07:05 USD/JPY: Struggles to Extend Losses Sub 104.00

London, June 03. Risk Aversion remains at the fore this morning, following Standard & Poor's downgrading of Lehman, Merrill and Morgan Stanley, along with the fallout from the Bradford and Bingley situation. According to WSJ - Lehman Brothers is set to report its first quarterly loss since going public and is considering raising an estimated USD 4bln to help shore up its balance sheet. Stock markets have certainly taken a hit - DJIA closed down 134 last night and the Nikkei lost 230pts in Overnight trading. Dow futures are already under the cosh to post losses of 30pts so far. USD/JPY is struggling to fill bids in the 104.00-103.95 area at present however, having easily removed its 104.11 Asian range base. Stops at 103.90 the focus. - ThomsonReuters.com.

T R A N S L A T I O N
美元兑日元：风险厌恶情绪继续受到关注


标准普尔下调雷曼兄弟，美林及摩根斯坦利评级，以及有关Bradford及Bingley的不利消息传出后，风险厌恶情绪再次受到市场关注。根据《华尔街 日报》的消息，雷曼兄弟可能录得首个季度亏损，该公司正考虑筹集40亿美元以平衡资产负债表。股市明显受到这些不利消息的打压，道指昨晚收盘下跌了134 点，日经指数亚市跌至了230点，道指期货目前下跌了30点。但美元/日元目前得到104.00-103.95区域买盘支持，止损位于103.90。


08:46 USD/JPY: Stops at 103.80 Eyed
London, June 03. Bids in the 103.95 area have just been filled, with mild stops at 103.90 also tripped. More sizeable stops are eyed at 103.80 (90 day M/A) and these remain the near term target. Talk of bids from Asian sovereign accounts in the vicinity, which may go some way to limiting the downside. The mild recovery on Dow futures should also help to limit further near term weakness - now back in the black after staging a 30pt slide in early London. Very good size 104.00 expiries will also play their part as delta hedging confines in to the New York cut. EUR/JPY has been lent support from the EUR/USD up leg through 1.5600 - the cross trading back at 162.20, after testing support at 161.80 early on (contains sizeable stops). ThomsonReuters.com

T R A N S L A T I O N
美元兑日元：更多止损位于103.80


美元/日元刚刚消化103.95买盘，引发了103.90下方止损。更多止损位于103.80，将成为短期下行目标。传言附近有亚洲主权账户买盘，可能限 制下行。道指期货温和回升应该也会在短期限制进一步走软，该指数现已翻红。104.00有大型期权到期，可能也会限制汇价走势。欧元/日元为欧元/美元突 破1.5600助了一臂之力。

Yen Outlook

10:29 GMT June 3rd USD/JPY and JPY crosses traded heavy in early Asia, weighed down by a plunge in the Nikkei after the TSE open. Stocks steadied however and most pairs bounced, before fresh weakness ahead of the London open. The 230pt negative close on the Nikkei guided the pair in through its 104.11 Asian base to test 104.00 on the London open, but bids at this level staved off initial assaults, before eventually crumbling. Dow futures traded in to the red and the near 30pt loss was the catalyst for the USD/JPY break to 103.89 with risk aversion still clearly apparent, following Standard & Poor's downgrading of Lehman, Merrill and Morgan Stanley, along with the fallout from the Bradford and Bingley situation. GBP/JPY and EUR/JPY sales were key drivers of the headline again today, but the failure of EUR/JPY to trip sizeable stops at 161.80 aided the subsequent recoveries. Dow Futures have since moved back in to the black and this also helping USD/JPY"s return to the 104.30-40 area. To note are decent size 104.00 option expiries for the 10am New York cut, which could help to confine on any setback. -Thomsonreuters.com.

美元兑日元：与股指期货一道回升

道指期货自早先的下跌30点转为上涨15点，推动美元/日元反弹至104.40附近。汇价初次下滑未能引发103.80止损，但该位明显仍是市场关注焦 点。今晚在104.00有大型期权到期，应该会帮助限制走势。期权方面，投机者有稳固的协议价为102.00-102.50的三个月期期权买盘意向。

Action Insight Daily Report

More Technical Analysis Reports Here
RBA on Hold, Bernanke Watched

The Japanese yen and Swiss Franc edges further higher today as risk aversion is back to be the theme of the markets. Markets are concerned that risks of a credit crunch are rekindling after news that S&P lowered its debt rating on three of the biggest securities firms in US and that Lehman Brothers may need to raise $4b of extra capital. Weakness of the US stock markets carried on to the Asian markets today and continues to support the yen and swissy.
Dollar, on the other hand, is a touch softer against Euro and steady against Sterling and Aussie so far. Focus turns to today's speech from Bernanke on hints of Fed's next move. Futures are pricing 98% probability that Fed will be unchanged in June. However, recent hawkish turns in Fedspeaks prompted speculation that that next move will more likely be a hike. Dec fed funds futures are pricing in around 60% odds that Fed will hike by 25bps. Though, markets will still look into today's speech, ISM services and more importantly Non-farm payroll report later this week. This expectation will remain an important factor in dollar's moves.
RBA left rates unchanged at 7.25% as widely expected. The accompanying statement provided little new to the markets. Though, Aussie was weight down mildly by the downbeat assessment for the economy in near term.
Released in early US session, Swiss CPI accelerated sharply higher from 2.3% yoy to 2.9% yoy in May, fastest pace in 15 years. Eurozone Q1 GDP and PPI will be released later in the European session, so is UK PMI construction. In the US session, focus is mainly on Bernanke's speech and Apr factory orders.

http://www.actionforex.com/action-in...2008060348064/


Bruce

[FONT='Trebuchet Ms', sans-serif]Published: Jun. 03 2008, 06:00 GMT[/font]


http://www.saxobank.com/?id=582&Lan=...=5&PubTypeID=1


JPY blasts stronger on renewed bank woes. USD holds up relatively well, but needs follow up move stronger to keep rally hopes alive.

USDCAD pulls back to parity. AUD remains resilient after RBA, strong data.




MAJOR HEADLINES – PREVIOUS SESSION

1. Australia Q1 Current Account Balance out at -19.5B vs. -20.5B expected
2. Australia Apr. Building Approvals out at 5.2% YoY vs. -3.3% expected
3. Australia RBA left the Cash Target rate unchanged at 7.25% as expected

THEMES TO WATCH – UPCOMING SESSION


Key Risk Events (All times in GMT)

1. Norway May PMI (0700)
2. EuroZone Apr. PPI (0900)
3. EuroZone Q1 GDP (0900)
4. Major Central Bank Heads Bernanke, Trichet, Shirakawa to speak in Barcelona (1300)
5. US Apr. Factory Orders (1400)
6. US Weekly ABC Consumer Confidence (2100)
7. UK May Nationwide Consumer Confidence (2301)
8. Australia May AiG Performance of Service Industries (2330)

Market Comments
Risk aversion bit deeper yesterday with a very strong recovery in world bond markets and a sharp sell-off in equities to start the week, the higher than expected ISM and ISM prices paid notwithstanding. The FX market responded with an impressive performance from the JPY and CHF, with the former finally strengthening sharply across the board after weakening against most currencies for the last 3 weeks or so. It appears we may finally have our pivot point on the risk appetite front - stay tuned. The trigger for this move to risk aversion was the UK's Bradford and Bingley's woes that surfaced yesterday, and this news was followed with news that S&P was slashing its ratings for three of the major US investment banks on fears of further write-offs. Still, it seems the market was ripe for a catalyst anyway, as news of this nature has failed previously to trigger the kinds of moves we saw yesterday.
The USD managed to survive the shift to a risk averse market quite well so far and that remains the key: as worries about global growth become manifest, we would prefer to see USD and especially JPY strength and for the growth/commodity currencies and the EUR to suffer the most. That scenario fits best with the overall view that we will see a continued unwinding in risk appetite and a recoupling of the major economies. To support this view in the short term, we'd like to see EURUSD remain below its 21-day and 55-day moving averages, and to see a follow up move lower through 1.5460.
USDCAD managed to pull all the way back above parity yesterday and the 200-day moving average. A follow up move higher will put it firmly back in the old range. If we see this development, we may soon finally be able to talk up the prospects of a real uptrend starting if the pair is able to keep the momentum up and work its way through the next layers of resistance (see chart below). Also, have a look at CADJPY as a potential downside play if risk aversion deepens.
Australia's RBA left rates unchanged at 7.25% as expected, and gave little reason to increase the belief that they may raise rates later this year, as has recently been priced into the forward expectations, though 2-year rates have fallen rather sharply over the last 3 days in Australia. The RBA said that it thought growth would moderate, that household credit is weakening significantly, and that inflation will decline over time if demand slows even if inflation is "relatively high" in the short term. It's more than a bit surprising to see AUD remaining as strong as it has been with increasing signs of risk aversion in the market. The better than expected current account balance and building approvals data overnight offered some support.
Chart - USDCAD
USDCAD managed to claw its way back to parity yesterday, which also coincides with the 200-day moving average. If the pair is able to rally above this key resistance level, then we may soon be able to talk about a real up-trend underway after months of range bound torpor for the pair. The next big levels are the descending line of consolidation coming in around 1.0280 at present, followed by the ultimate resistance at the 1.0380 high from January.

Warrenforex
Member Since Sep 2006
Posts: 549


http://www.forexfactory.com/images/icons/icon14.gif These Are DC Bonta Levels !!!
Tuesday June 3rd, 2008

Posted Monday, June 2nd, 2008 by DC Bonta
Trade Set Ups

EUR/USD Long 1.5550-60 P/T 1.5600 1.5639
USD/CHF Short 1.0400-20 P/T 1.0340 1.0300
GBP/USD Short 1.9674 P/T 1.9614 1.9570
USD/JPY Short 104.62-80 P/T 104.02 103.21

This gentleman only suggests trades in one direction. He is quite good and uses technical indicators incorporating resistance and support. I listen to his daily video each morning.

The RESISTANCE and Pivots for USD/JPY are at 104.80 and 104.71 EXACTLY where it stopped overnight. I am waiting for USD/JPY to get a little higher before shorting it. Please keep in mind that Bernake Yaks at 9:00 AM EST.

Do you think a Short of GBP/USD at 1.9674 is a good trade ?


Bruce

http://www.forexfactory.com/images/misc/progress.gif

http://quotes.ino.com/chart/?s=NYBOT_DX&v=s&w=5&t=l&a=2


Bruce

From A Post In Another Thread A Few Minutes Ago !!!

Copy and Paste:

Today 10:19am
Warren Forex http://www.forexfactory.com/images/s...ser_online.gif
Warrenforex
Member Since Sep 2006
Posts: 553


http://www.forexfactory.com/images/icons/icon8.gif Some Of My Personal Observations For This Thread !!!
I have seen this movie before and I know how it ends. Here is the plotl line with the facts and the hot air that went with the facts.

My focus is on 5:00 AM and Bernake at 9:00 AM and the US Data due out on Friday.

RIGHT NOW WE HAVE INTERVENTION PERIOD...

Every time the US Dollar reaches a critical level they have no choice but to do something. So we start by Bernake talking up the US Dollar without raising rates which is not a good idea for the US Economy already in recession.

In the last two days there has been more terrible banking news including downgrades. The NFP is called for - 50,000 or so. The ECB and BOE meets on Thursday.

Gold was recovering and Oil was holding. The 2 Year Treasury dropped to 2.49% only 49 basis points over the FED Discount rate of 2.00%

Now let's look at where we are. The Dow is UP 43 or so BUT right after Bernake spoke it was down about 10. The 2 Year US Bonds (Treasuries) are now at 2.54% which means they are being sold again as the Yield goes up.

The USD/JPY was at a Low of 103.86 and is now 105.45 Bid. Gold is down as is Oil. Oil is down $1.76 and Gold down $14.30

All that MONEY is going INTO CASH again just like last week. The EUR/USD is at 154.25 and EUR/JPY has risen off it's Low at 161.815 to 162.61 so some of the Carry Trade is back on in Selling of Yen and Buying of Euro.

The HIGH in USD/JPY was 105.578 so far.

The FUNDAMENTALS have NOT CHANGED 1% BUT Bernake Spoke during a coordinated INTERVENTION by ALL CENTRAL BANKS !!!

Why ? The Answer all they have left is BS and BAD NEWS is around the corner.

I could be wrong since the market is always right but the Initial Reaction to Bernake was BAD for the Dow. That told me a lot. Now Technical Levels have changed on ALL the FX Currencies so Charts should be looked at again.

For MYSELF and PLEASE make your own chices as in the end only you are responsible for profits or losses. I am looking for JUST the RIGHT Moment To SHORT USD/JPY.

Look at the Dow now. It is ONLY UP 15 now.

What is the NEXT RESISTANCE on USD/JPY ?

This is my take on things at the moment !!!


Bruce

http://www.telegraph.co.uk/money/mai...-mostviewedbox

debt markets in the US and Europe have begun to flash warning signals yet again, raising fears that the global credit crisis could be entering another turbulent phase.
The cost of insuring against default on the bonds of Lehman Brothers, Merrill Lynch and other big banks and brokerages has surged over the last two weeks, threatening to reach the stress levels seen before the Bear Stearns debacle. Spreads on inter-bank Libor and Euribor rates in Europe are back near record levels.
Credit default swaps (CDS) on Lehman debt have risen from around 130 in late April to 247, while Merrill debt has spiked to 196. Most analysts had thought the coast was clear for such broker dealers after the US Federal Reserve invoked an emergency clause in March to let them borrow directly from its lending window.
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The financial crisis in full
More from Ambrose Evans-Pritchard But there are now concerns that the Fed itself may be exhausting its $800bn (£399bn) stock of assets. It has swapped almost $300bn of 10-year Treasuries for questionable mortgage debt, and provided Term Auction Credit of $130bn.
"The steep rise in swap spreads this week is ominous," said John Hussman, head of the Hussman Funds. "The deterioration is in stark contrast to what investors have come to hope since March."


Bruce

This number sometimes shakes up the market. It supposed to be bad but if it is not as bad as Consensus calls it, then it can confuse the issue for Friday's NFP at 8:30 AM expected to be Minus 50,000 or 50,000 Jobs lost. A Good or normal acceptable number is 150,000 or so.

There is Non Manufacturing ISM that was over 50 but could go either way. What will the Nikkei do today or tonight ? will Europe keep on going down. ECB and BOE meet on Thursday. Will EUR/USD go back over 155.00

Will EUR/JPY move back to 164.00 ?

All questions and events to be aware of. At the Moment USD/JPY trades at 105.08 Bid

Where is Support One ? Charts would be helpful.

Good Evening To ALL !!!


Bruce