Knowledge is Power

Copy and Paste From USD/JPY thread.

Today 7:40am
Warren Forex http://www.forexfactory.com/images/s...ser_online.gif
Warrenforex
Member Since Sep 2006
Posts: 934


http://www.forexfactory.com/images/icons/icon14.gif Thank You For Your Question !!!
Quote:
Originally Posted by pipo77 http://www.forexfactory.com/images/buttons/viewpost.gif
thank god ,it was a good week ...what about the rest of you guys ...
wishing you all the pips in the market...

Mr.Warren...any ideas for the next week ?? your tips are very useful all the time ..many thanx in advance...


First off with respect my self chosed mandate is to assist FX traders to improve their trading. I do not tell in advance what will happen since things can change in a second on new news released just as happened with the release of the UK VERY HIGH Retail Sales number.

I can assist you if you would like to come by my home thread on Forex Factory called "Knowledge Is Power" I post there during FX trading hours and there is a great amount of minute by minute information. This includes fundamental and technical information as well. There are many other members of Forex Factory that also post there and offer valuable knowledge.

The best way to help is to teach through a Demo Account so your trading can improve without financial risk while you continue to learn and improve.

To start the process in an organized way, I opened a Demo Account recently and with $100,000 US Dollars placed in it for me by the Currency House whose Demo Platform I am using, I started trading the account June 9, 2008

While you might not match my results which in 11 days to June 20, 2008 reached a Net Profit Level of $12,640.40 US Dollars on 126 FX trades done between June 9, 2008 and June 20, 2008. All of my closed FX trades which includes EUR/USD long and USD/JPY short were winning trades. I still have 4 open positions at a drawdown of $2,190.94 US Dollars.

The Net Equity in my Demo Account is $110,449.71 US Dollars.

I just generated a report off of my Demo Account and I will shortly post the PDF file of my 126 Winning FX trades in a row on "Knowledge Is Power" thread and if you are interested you can go there and examine what I did to achieve $12,640.64 US Dollars in Demo Net Profits in 11 days.

Some other posters have opened Demo Accounts and posted their opening balances there.

I am starting on Monday June 23, 2008 to try to see if I can assist those trading their Demo Account to reach a Net Profit Level of 10% a month.

You are welcome to join the class that hopefully will graduate in six months or less to the EXCLUSIVE "5% Club"

Have A Great Weekend and hope to see you soon.


Bruce
Last edited by Warren Forex, Today 7:43am Reason: To Correct Spelling Error !

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http://www.forexfactory.com/images/s...n/post_new.gif Today 10:50am

Warrenforex
Member Since Sep 2006
Posts: 936


http://www.forexfactory.com/images/icons/icon14.gif Great Work ! Could You Post That On Knowledge Is Power Please !!!
Quote:
Originally Posted by Jerry http://www.forexfactory.com/images/buttons/viewpost.gif
Tere all, my YEN analyze for next week, pls your coments!!

Your charts are excellent. I am sure that you are aware of the following fact only as it relates to the Currency Pair, USD/JPY.

The Yen is a Carry Trade Currency so the strength or weakness of the Dow and other currencies such as the Euro affect your charts. That means in a flash your charts are outdated short term. As an example of that was last week when the UK Retail Sales number came out at 4:30 AM EST. Within 15 minutes the USD/JPY rose 50 PIPS ! Why ? The GBP/USD got stronger on the amazing Retail Sales Number ! That sent EUR/USD down and the EUR/JPY got stronger as Yen was sold to borrow it and British Pounds were purchased. Of course that was reversed as related to the USD/JPY going towards 108.00 again but it was not a real move longer term since it was a one time event based on the STRONG UK Retail Sales ! (A Fundamental Fact) That was not in the charts just before it happened.

Then on Friday when The Dow came down 220 Points mainly because of two facts. Oil going back up along with Gold BUT the MAIN Fact known overnight was the New Ratings for Ambac and MBIA by Moody's.

That means as a FACT that there is at least Five Hundred Billion More in losses to come for the Banks and Brokerage Firms. Another Fundamental Fact that is was NOT in the charts when USD/JPY was testing 108.00 again.

The ONLY way to be a consistent WINNER in Forex is to trade using the Formula, FTP ! Fundamentals + Technicals + Perception

Probably 75% of ALL FX Traders out there including the largest trade mainly using the Technicals ! Is It Any Wonder that 95% of All FX Traders lose in this business of ours ?

Have A Great Weekend and come visit at "Knowledge Is Power" We can use your charting skills which are part of successful Forex trading. We need to know the best entry points and exit points. We need to know where the BIG BOYS and GIRLS are going to play the STOPS on the losing traders as they become convinced that USD/JPY is going to 109.00 just because the charts say so. History Repeats BUT the Charts do not because of New Fundamental Facts such as the FED on Tuesday, June 24, 2008, 2:15 PM will NOT raise the FED Discount Rate from 2.0% to 2.25%.

Two weeks ago the FED head faked the market on their Inflation stand.

Now INSANITY is always possible and they could RAISE on Tuesday.

Be Ready For Anything BUT be aware fundamentally that it will cause the Dow to collapse and send USD/JPY down to 104.00 AFTER the Immediate Misguided Excitement is OVER concerning a US STRONG DOLLAR !

Good Weekend To You !!!


Bruce
FTP FX TRADER

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Hindenburg Omens: I am Bear, Hear Me Roar
Posted: 20 Jun 2008 09:08 AM CDT
http://bp1.blogger.com/_FiNhXIv5StE/...w/s320/SPX.png http://bp1.blogger.com/_FiNhXIv5StE/...o/s320/SDS.pngI am BEAR, hear me ROAR.

Since the S&P hit 1440 and broke DOWN and OUT of the Bear Wedge, things have gotten ugly quickly for the Bulltards. Losing the 1332 area will result in another round of selling…

The Three Hindeburg Omens Since June definitely aren’t going a good sign for the Bulltards. A cluster of seven omens actually preceded the plunge to ‘lock limit down’ at 1255 where Ben ‘Helicopter’ Bernanke stepped in with his first surprise, emergency 50 basis point rate cut.

The Hindenburg Omens would have got you out of equities way back in November when I posted 5th Hindenburg Omen in this Cluster. Those of you with quick trigger fingers could have escaped your long positions when the first three omens printed consecutively on Wednesday, Thursday and Friday in October in Hindenburg Omen.

If you’re thinking WTF is a Hindenburg Omen? Click here.

For a while there the Bulltards grew complacent as they had great faith in their Great Savior Ben ‘Helicopter’ Bernanke. No longer.

Using the ProsShares Ultra Short S&P 500 (SDS, candle) to represent the inverse of the S&P 500 and plotting the price action against the volatility (VIX, grey area) the positive correlation between the two becomes crystal clear. As VIX falls, the market rises. Conversely, extremely high VIX readings in excess of 30 tend to set bottoms (in the case of SDS, tops). A reading of less than 20 on the VIX now, probably represents extreme complacency for this time of environment. I would therefore expect and look for general equity weakness.

Pre-Crisis Levels:
VIX < 15. Farm animal stupid levels of complacency and risk taking. The VIX actually dropped into the single digits as easy credit and 'liquidity' fueled the greatest and dumbest credit and real estate bubble to date...

Crisis Levels:
VIX < 20. Crazy, irrational complacency as the largest credit and real estate bubbles ever implode. Bulltards are contentl, massively long and leveraged to the tits. Equities are likely to absolutely shit...

VIX > 30. Crazy, irrational fear. Equities likely to bottom short term… although VIX can and has spiked much further in the past when the ‘wheels finally came off’.

With the Fed Funds Rate now at 2.00% and oil mocking Bernanke from the lofty heights of $139.89 the Fed is starting to look impotent. The Fed balance sheet is rapidly being depleted and now consists of mostly (54%) of ‘toxic junk that nobody else wants’. In the Fed’s Balance Sheets Shares by Facility the rapid and CONTINUED deterioration of the financial system is clearly obvious.

In March I warned the Fed is Almost out of Ammo: “The Fed has almost run out of ammo. Much like George Soros on Black Wednesday, when he ‘broke the Bank of England’, global capitalists are damn near close to breaking the Fed. 60% has been committed and it doesn’t seem to be working. Another push and things could unravle quickly...”

Just because things look scary now, doesn’t mean they can’t get worse… Scary Fed Charts: JUNE, ‘Just’ 1% of GDP Now.
http://feeds.feedburner.com/~r/TheFi...a/~4/316258714
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Good job

I'll announe my system very soon!!!

I Look Forward To Working With You And Others To Make This Thread One Of The Most Useful Ones To Forex Traders On Forex Factory !!!


Bruce

http://www.marketwatch.com/News/Stor...vkeWoC5Qok4LEQ

Snippet:

Five reasons the Fed won't raise interest rates

Borrowing costs, yield curve, housing all likely to hold policy makers back


NEW YORK (MarketWatch) -- Surging commodity prices and strident warnings from Federal Reserve officials about inflation have some in the market betting that the central bank will increase interest rates as early as this fall, according to closely watched federal funds futures contracts.


Yet, five other indicators flatly contradict that outlook, suggesting that the central bank will instead opt to keep borrowing at currently low levels to prevent the ailing U.S. economy from experiencing even more pain.
Analysts point to at least five reasons the Fed won't rush to raise rates: 1) lending rates show the credit crunch continues; 2) the banking system is still fragile; 3) rates hikes in election years are rare; 4) the economy, especially housing, still poses a threat; and 5) flattening the yield curve could pressure bank profits.
Falling home prices and continuing bank losses, along with market rates for short-term loans, are likely to hold back the Fed. That's despite the message telegraphed by the bond market's favorite interest-rate indicator: fed funds futures, which are used to determine market odds of a move in interest rates by the Federal Reserve.
"Talk about the Fed tightening is a joke," said William Chepolis, who helps manage $9 billion in fixed income at DWS Scudder. "They can't do that to the economy. There is still more pain out there" in financial markets.
The debate puts more pressure on the Federal Open Market Committee to be as clear as it can to the public about where they see risks when it next meets on Tuesday and Wednesday.
As it stands, the futures market is saying the FOMC will probably raise rates as early as August, reflecting the market's belief that inflation will be enemy number-one for the Fed through the balance of the year.
Fed funds futures show traders see a 48% chance of a quarter-of-a-percentage point rate increase to 2.25% in August, compared to less than one-in-ten odds at the beginning of the month. The November futures contract also indicates a 67% chance that the target overnight borrowing rate between banks will increase to 2.75% by that month, up from an 11% chance in the same period as a string of Fed officials highlighted concern about accelerating prices.
Fed Chairman Ben Bernanke said himself the FOMC "will strongly resist an erosion of longer-term inflation expectations."
It didn't help that crude oil prices kept reaching new records. Economists from J.P. Morgan Chase and Barclays Capital, meanwhile, altered their forecasts in the last week, saying they anticipate a hike by September as the Fed wants to maintain its fight against inflation.
Libor, mortgage rates stay high
But for all the worry about inflation, the Fed also knows the economy is still in the grips of a credit crunch. For a start, average consumers haven't necessarily seen the benefit of the Fed's reduction in its target overnight rate for banks to 2% from 5.25% in September.
That's because the London interbank offered rate, the corresponding rate more commonly used as a benchmark for everything from mortgage loans to rate futures, has stayed elevated.
http://www.marketwatch.com/News/Stor...ec55&Track=201

Three-month Libor is now 2.80%, or 0.96 percentage points above the effective market rate that generally tracks the Fed's target. That spread, a measure of banks' willingness to lend, is actually higher than it was in December when signs of credit risk were more widespread as a lengthening line of banks have announced multi-billion dollar writedowns. The gap was very narrow, at about 0.06 point, until August and credit crisis really took off.
As long as the Libor rate is so much above fed funds, the U.S. central bank is unlikely to tighten, said William O'Donnell, U.S. government bond strategist at UBS Securities.
"There are still credit issues out there and Libor is an unsecured rate," he said. "Banks don't want to lend to each other when it's unsecured. Risks to growth are very high. Very clearly, the Fed is trapped in a vice."
The central bank tried this week to temper those expectations for a rate hike. Reports in the Washington Post, Wall Street Journal and Financial Times have cited sources close to the Fed indicating the market may have been overzealous in pricing in higher rates.
Auction demand
The continued vulnerability of the banking system has also shown up in financial institutions' demand for special Fed lending programs, initiated by policy makers last year to alleviate the credit crunch.
The Fed received bids for 1.19 times the $75 billion auctioned earlier this week through its Term Auction Facility, the first such vehicle created in December. That ratio of bidders is up from the previous TAF auction on May 19, 2008.

So if inflation continues to rise we can not raise interest rates because it is an election year? Boy does this country have problems or what.

More:



"Good participation in TAF auctions continues to suggest the banking system remains fragile, a rate hike could undo the healing the Fed's alternative funding vehicles has done for the very vulnerable banking industry," said Roseanne Briggen, Treasury analyst at Informa Global Markets.
Similarly, the so-called bid-to-cover for the Term Securities Lending Facility auction last week was the highest since mid-April.
Analysts for Goldman Sachs Group Inc. Goldman Sachs Group, Inc
Last: 183.77-3.16-1.69%



183.77, -3.16, -1.7%) said Tuesday that U.S. banks may need to raise as much as $65 billion in new capital this year, adding that garnering that amount will be harder and more expensive in coming months.
Lehman Brothers Holdings Inc.
Lehman Brothers Holdings Inc
and Goldman announced quarterly results this week that had deteriorated from the year-ago period.
Election time
The fact that it's an election year could also hold the Fed back from raising rates in the three months leading to Super Tuesday, say analysts. While the Federal Reserve is designed to function independently of the White House or Congress, Fed policy makers may be concerned their actions could affect the outcome.
The central bank hasn't raised its benchmark interest rate in the summer or fall leading up to a presidential election since 1988.
"The Fed hasn't changed direction into a presidential campaign," said David Ader, head of U.S. government bond strategy at RBS Greenwich Capital, one of 20 primary U.S. government securities dealers that, like UBS, trade with the Fed.
"Particularly when the economy is weak, we'd err on the side of the Fed being on hold or easing."
Still the economy
Continuing problems in the economy, including the highest unemployment rate in more than three years and a housing industry that's in its own depression, make it tough for the Fed to raise rates.
Housing starts fell 3.3% to a seasonally adjusted annual rate of 975,000 in May, the lowest level since March 1991, the Commerce Department said Tuesday. Over the past year, housing starts are down 32.1%, lessening demand for building materials and supplies including furniture, flooring and paint.
"Housing is still going to be quite bad and exert a drag on economic activity through early next year," said Dana Saporta, an economist at primary dealer Dresdner Kleinwort. "While the risk is the Fed will tighten, we don't think now is the most likely scenario given the fragility of the economy."
More homeowners headed toward foreclosure in the first three months of 2008 than have since 1979, the Mortgage Bankers Association reported last week.
Yield curve
Conflicting messages about inflation and growth have given whiplash to the bond market. Last week, the fed funds futures showed a rate increase by August was almost certain as crude oil prices kept reaching new records.
http://www.marketwatch.com/News/Stor...ec55&Track=202

When it looks likely the Fed will begin increasing interest rates, the yield gap between 2- and 10-year Treasurys (UST10Y: U.S. Treasury 10 Year

Last: 4.17-0.04-0.93%
8:05pm 06/20/2008http://i.mktw.net/images/loading-chart.gif


<IMG class=pixelTracking height=1 width=1 border=0>UST10Y 4.17, -0.04, -0.9%) tends to narrow because shorter-term debt, more sensitive to changing monetary policy expectations, becomes less attractive if the yield rises. That dynamic flattens the so-called yield curve that charts the gap between the securities. It makes it harder for banks to make money in one of their most basic businesses: borrowing at short-term rates and lending longer-term for higher returns.
At 2.92%, two-year notes (UST2YR: U.S. Treasury 2 Year

Last: 2.89-0.05-1.80%
8:05pm 06/20/2008http://i.mktw.net/images/loading-chart.gif
Delayed quote data




<IMG class=pixelTracking height=1 width=1 border=0>UST2YR 2.89, -0.05, -1.8%) yield 1.28 percentage points less than 10-year debt, down from just over 2% in March when fears about Bear Stearns Cos. going bankrupt sent investors clamoring for the safety of short-term Treasury debt.
"Banks like a steep yield curve and hiking rates flattens the curve," Ader said. "I'm not saying the Fed's only goal here is to do that but flattening is not beneficial to the beleaguered banking sector." http://i.mktw.net/mw3/News/greendot.gif
Deborah Levine is a MarketWatch reporter, based in New York.




More Personal Finance Daily







Bruce

Dr. Housing Bubble - How I learned to Love SoCal

Saturday, June 21, 2008 11:04 AM


From:
"Dr. Housing Bubble Blog" <[email protected]>
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Predicting the Housing Future: Los Angeles and Orange Counties. Using the Case-Shiller Index to Find a Bottom.
Posted: 21 Jun 2008 02:03 AM CDT
Predicting future prices is a dangerous game. Trying to predict peak prices during a mania is like predicting the future behavior of an insane person. By definition their nature is not predictable and thus trying to determine what they’ll do tomorrow may be a fruitless exercise. Yet now that we are slowly moving to historical rubrics to give credit out, we are quickly realizing how insane this bubble got. The straitjacket has been put back on the market and it turns out that someone left the door open on the credit asylum for too long. Time to gather the lunatics back in.
This week the weather has been perfect in Southern California. Across many areas we are in the 90s and all the beautiful people are out on the streets. Many are out walking simply because they cannot afford to fill up their gas tank but hey, that is the silver lining. In the end, many folks need to get out there and walk so they can lose some weight. And if you notice that people are not looking as beautiful as they once did in Southern California you can blame it on the credit crunch. Elective cosmetic surgery is down so expect to see more natural looking folks running around minus the fixed nose and other synthetic implants. In a way, we are metaphorically returning to a natural state of things. The time for artificial products will need to be put on the shelf for sometime.
California was the epitome of this housing bubble. We had the largest excess and now we are seeing the biggest bust. I would call it spending like a drunken sailor but I really haven’t met too many drunken sailors in my lifetime. How about we try coining a new term with a California twist. Whenever you see someone spending like a maniac blowing cash beyond their means, we can label it “Spending like Laura Richardson” or SLLR. So if you have a friend with a leased Lexus and Hummer and a mortgage that will make Ed McMahon look frugal, you can tell them, “hey Bob. You are spending too much. Why don’t you stop spending like Laura Richardson?” This of course would be a massive insult with a California twist that only a foreclosure specialist can produce. You can watch as they begin to cry with your below the belt insult. After all, if people are willing to elect such a financially irresponsible person, we might as well get something for our tax dollars. A phrase is all we can afford at the moment.
Before you feel bad for six-figure politicians, this article is going to attempt to look at the future of Southern California housing. The reason that we can start making educated guesses now is that the party has come to a screeching halt. We now have a static peak that we can work off from and apply some financial logic to what will happen over the next few years. I wrote an article aptly titled Nostradamus in the House. Looking at 4 Potential Scenarios for Southern California Housing on August 4th, 2007. Of course this was a few days before the massive credit crisis that was supposedly over many months ago. In the article I also have a swipe at WaMu which at the time was trading at $37 a share (today it closed at $6.38). Essentially, we are now at the worst case scenario from that chart. So we will now revise it for the next year.
1 - Looking at the Case-Shiller Index Past Los Angeles Bubble
The Case-Shiller Index uses the MSA (metropolitan statistical area) to track housing prices. The Los Angeles component of the index combines Los Angeles and Orange County. Given that these two counties have more than 13 million people, it is a good representation of the housing insanity that is going on in Southern California.
Some people may not know that Southern California had a previous bubble in the late 80s to early 90s. At this time our national economy was in a recession and the economy was once again a main focus for politicians. On this constructed chart, I used the previous peak (June 1990) and bottom (March 1996) and superimposed the new peak (September 2006) to give a better idea of how much more further we have to go to reach a bottom:
http://www.doctorhousingbubble.com/w...hiller-big.png
*Click to enlarge for a clearer image
The data in the most recent iteration of the Case-Shiller index goes until March of 2008. The startling thing you will notice is it took over 6 years from peak to trough in the last downturn with an overall decline of 27 percent. Now, we are only 1 year and 6 months from our peak and the market is already down 24 percent! And we have yet to see $500 billion in pay option ARMs to recast with 60 percent here in the state. California it would appear was Spending Like Laura Richardson (SLLR).
As the market is being slapped around like a mortgage piñata, people are scrambling to gather the little bit of real money that was locked inside. The reality has become that people equate credit with money. To a certain extent it is. But now many that have had their credit lines shut down and lost all their equity are realizing that credit is not as good as cold hard cash. There is a reason people say cash is king.
Now back to the chart it would be hard to conjure up any reason why we are nearing a bottom. The California economy is in such shambles, that we are getting cockamamie ideas that only serve as a good laugh. For example, some proposals include letting out inmates early onto the streets where there is very little employment. Guess what will ensue if that happens? Also, the Governor is throwing around a lottery idea which is the absolute stupidest thing one can propose. Yes, we are broke therefore let us exploit the most primal part of our humanity and take money away from those that do not understand basic statistics. Good job amigo! The fiscal year starts in July and it looks like we are going to have a bunch of arse grapping and posturing before we get any budget through. Ironically the budget is following the trajectory of our old governor Gray Davis.
Can prices go down for 6 years like the previous burst? Absolutely. The economy is in much worse shape and the types of mortgages floating out there would make Enron seem like a walk in the park.
2 - Income is Stagnant and Credit is Closing Shop

I can tell you as someone who has gotten mortgages at the peak, things are radically different now. All my investment properties are financed the old school way with 30-year fixed mortgage even though many brokers and lenders tried to convince me otherwise. Many of those folks are no longer working. Trying to get a loan in 2008 is a world away from a getting a loan in 2003, 2004, or even 2005. The market has dried up. Getting a loan in today’s market requires good credit, solid DTI ratios, and basically if you want a good rate it will have to be a primary residence. So now, income apparently matters. And as it turns out, we have a crew of people that were living in an economy were income didn’t matter. Welcome to a quick reality check.
Here are some basic statistics for the Los Angeles and Orange County markets:
Los Angeles County:
Median Household income (2004 census): $43,518

Orange County:
Median Household income (2004 census): $58,605
Now I know many of you are going to cherry pick tiny enclaves in Newport Beach and Beverly Hills but you need to remember that the Case-Shiller data looks at the entire metro area. As much as you would like to siphon off 80 percent of the population and only examine 20 percent of the prime areas, this is not how the data is compiled. The above figures show us how out of whack prices have gotten here in Southern California. Let us look at the current median price in both areas:
May 2008 Data
Los Angeles County Median Home Price: $422,000
Orange County Median Home Price: $485,000
Compare that to the previous peaks of $550,000 for Los Angeles and $645,000 for Orange County. Given the current income we have the following ratios:
Home to Yearly Income ratio
Los Angeles: 9.69
Orange: 8.27
Let us compare this to data from 2000 to highlight how much of a correction we will need to come back in line with historical ratios:
Los Angeles County Household income 1999: $46,452
Orange County Household income 1999: $57,706
June 2000
Los Angeles County Median Price: $203,000
Orange C

seems so intersting and useful thread , i think am going to stick here for a while , thanx Mr.bruce for the rich information

http://www.financialsense.com/fsu/ed...2008/0620.html

The analyst and economist, Mr. Jim Willie pulls no punches. He puts it all on the table. I love reading whatever he puts out. It makes for great awareness as few explain things as he does.

Here are a few snippets from his editorial just posted on WWW.FINANCIALSENSE.COM

Snippets:

Despite the technical rebound of the USDollar since March, the gold correction refuses to go below 860. Another successful retest occurred in the last couple weeks. The stochastix cyclical index has begun to turn upward from oversold levels. The magic new level is 940 for gold to surpass. Fundamentals support the gold price. Mine output continues to struggle. My ongoing point of gold supply inelasticity bears repeating. Higher gold price has not resulted in higher gold mine output. Thus, the gold price should continue higher. The silver chart is nearly identical. The prevailing story driving the gold price correction in the last few weeks has been that the USFed will actually raise its official FedFunds rate before the end of the year. The Euro Central Bank has wrested leadership and bank power prestige from the hack Americans, who seem hellbent on the destructive cycle of inflation, bust, liquidity provision, corrupt with bond fraud, paper over, consolidate with raids. The bluffs by the EuroCB to hike rates are being taken seriously. But not here! The Europeans cannot hike rates when the southern bloc is awash with housing liquidation and price declines, and assured recession. The Europeans cannot hike rates when the German economy has suffered five consecutive down months in industrial production, and when ZEW economic expectation measures are heading down. The big German banks are due for more bond and credit market losses, just like the American banks, but on a smaller scale.
Neither the USFed nor the EuroCB will hike rates this year. Yet another massive marketing scheme (aka propaganda) has taken place. The gullibility of the US investment community has become laughable. They are always ready to swallow the next myth, chapter and verse. When the bond market and currency market realize no official rate hikes will come, the USDollar will head lower. Price inflation must be permitted, even in wages, an all important distinction. Gold will rise in US$ terms. Gold will rise in euro terms. Then lest one forget, the Summer Olympics in China are sure to produce some surprises. Such a grand political stage is not to be unexploited. Gold might like the hubbub. My preference is to watch the magnificent athletes more than to pay attention to sideline developments. However, with trade conflict on the rise between the US and China, and bank power being fought for, my ears will be trained for stress fractures. Gold will respond.
Congratulations to the Boston Celtics, NBA basketball champions! Boston rules in sports!


Wow! Ouch! Batten the hatches on the Left Coast !!!
The $4.8 state billion budget cut by Gov. Schwartzeneggar in educational funding this year has hit hard, cutting 20 thousand jobs among teachers and other school employees. Many wealthier communities in California have begun initiatives to solicit private funding to aid the schools, even a separate tax levy proposed in Alameda County outside San Francisco. Home values in California are already down by 29%, from March 2008 versus last year March. That translates from median value $582k last March to $414k this March, a median average drop of $168k per home. Conditions are worse with bigger losses in Monterey, Riverside, Sacramento, High Desert, and Santa Barbara. Rick Sharga of RealtyTrac said, “California still has not hit bottom. We have a lot of California homes that are in early stages of default that may not be salvageable, because either there is no market or financing available, or both.”
The national housing inventory problem grows worse, not better. Pollyanna analysts continue to miss the direction toward more bloated, as prices are threatened continually. The inventory for existing homes was high in March, at 9.9 months supply, and went to 11.2 months in April, a record covering 23 years. In California, the existing home inventory is at least two months greater supply than the national figure. On the existing home side, foreclosures relentlessly flood the market, aggravating supply, serving as the most significant factor weighing down housing price. In fact, fully 40% of all sales in California come from bank & lender foreclosures. And the condominium picture is worse, as pressure comes from rising condo fees. The median national housing price has fallen to $202.3k, down 8% from a year ago. Sales activity has fallen for eight of the last nine months. A key data point is seen in the West, where sales activity rose by 6.4% but where prices fell the largest amount. Prices fell in 43 states, with California and Nevada registering the biggest declines. An opportunity for price stability might come out West where prices came down hard to encourage buyers, but it is early to conclude stability. The foreclosure process still drives the process out West. My belief is that the foreclosure process generally will continue to pressure inventory for another year at least, and push prices down further. Lending institutions are dumping their inventory, lowering price, and achieving some sales. Just because price has fallen, and sales activity has risen, does not mean that price will stabilize. Lending institutions are not seeing any reduction in their inventory, the key point! They incur costs from insurance, property tax, and maintenance, plus legal fees. They bribe homeowners to leave quietly without damage to the property, as in sabotage. Banks even call the cost ‘Anger Escrow’ in their financial reporting. So time to hold properties on the books costs money, an inducement to cut price for distressed or auction sales.
The Standard & Poor Case Shiller composite index provides broad aggregate price data, but two months old. Its index of 20 metropolitan areas showed prices of existing homes fell 2.2% in March, accelerating to worse than a scary 20% annualized decline. The venerable serial bubble engineer Greenspan estimates that house prices will decline by another 10% from February levels, and perhaps 5% worse than that if the USEconomy remains weak. He expects a peak to trough total decline of 25%. Economist Paul Krugman uses a different reasonable measure, a ratio of home prices to rental rates, to arrive at a 25% overall home price decline in the overall correction. Goldman Sachs keeps its simple, stating home prices will fall 15% without a recession, and 30% with a recession. Yale Univeristy professor Robert Shiller expects a shocking 50% home price decline in the formerly hot property zones, like California, Las Vegas, south Florida, and parts of Arizona. My forecast is for a national housing price decline to the levels seen in 1990, plainly put, a double housing recession since no housing recession was permitted in 2000-2002.
In year 2005, a very intriguing sequence of events occurred. California state contractors were not properly paid in cash and instantly redeemable checks issued by the state. The state was actually in severe arrears on payments and at risk of losing contractor work. So California issued state coupons, like IOU on pieces of paper. It is unclear to what extent state employees received such coupons. Of itself, this is not so important. What struck legal and political scholars was how the state coupons were used. THEY WERE REDEEMABLE AS CASH, AS IN LEGAL TENDER, AT SUPERMARKETS AND UTILITY FIRMS. The coupons were essentially cash in restricted usage. They were a bizarre form of money created by the State of California, inflation to be sure, but money printed illegally outside the realm of the federal USGovt. Only the USGovt has the privilege of inflating the money supply and destroying the currency! The problem resolved itself in the ensuing months. Fast forward to today. Gov Schwartzeneggar announced a 10% budget cut a few months ago, with additional budget cuts in progress. California is under great distress. Its economy is probably in a mild depression, much like Michigan and Ohio. The Governor recently announced the inability to float a state bond to cover ongoing expenses to run the state. So they resorted to floating some emergency measure bonds, using state lottery income as collateral. Gambling income is the only reliable income stream to the state, WOW! Watch for future attempts to print money via the back door, if desperation runs thick. Look for challenges to the federal privilege to print money. The implications could actually work toward strain in the union, as in USA. That is not my forecast, but one should expect strains to individual states to become acute. Some will want to print money. Imagine a California Dollar with a golden bear on it. Oh yes, the Governator declared a state of drought, which forced an emergency order of resource sharing for water, and some conservation measures. The state has enough problems, let alone drought. What is next, locusts? How about rising salinity levels in irrigated water?
If California is forced to inflate with state coupon devices, or receive massive federal emergency funds, or faces widespread defaults and bond failures, conditions might arise for broad movement into gold as refuge. Vallejo already declared bankruptcy at the town level. The process is degenerating.

Bruce

http://www.journalinquirer.com/artic...1262083314.txt

Snippet:

Joe's oily deception; and cover-up at MHS




By Chris Powell

Published: Saturday, June 21, 2008 5:43 PM EDT
For mistaking symptoms for causes, it would be hard to outdo Connecticut U.S. Sen. Joseph I. Lieberman and Maine Sen. Susan Collins with their proposal to prohibit pension funds and government agencies from investing in commodities. Such investment, the senators claim, constitutes speculation and is largely responsible for the recent surge in commodity prices and general price inflation.

Of course there is always speculation in all markets, but Lieberman and Collins fail to ask the crucial question in regard to their own issue: Why the surge in commodities now?

Lieberman and Collins failed to ask a similar question in regard to the explosion of housing prices over the last decade, where speculation far exceeded anything in commodities lately, speculation in which so many of the senators' own constituents engaged, some of them even showing up on television programs like "Flip This House." That speculation drove home ownership beyond the reach of many other constituents of the senators, but these constituents had not yet made it to the middle class and so were expendable.

But if the crucial question is to be asked, it might first reveal, as with housing, that prices were rising dramatically long before pension funds got interested in the commodities markets generally and the oil market particularly. Indeed, prices for commodities for which there are no futures markets at all, no ready vehicles for institutional fund investment or speculation, have been soaring too.




No, what is being manifested in the commodity markets is to a great extent the flight from the U.S. dollar, which is devaluing from vast overissuance and deficits incurred to finance imperial war and expensive social programs, and from government interest rates that are set far below even the official rate of inflation, which underreports inflation by 300 percent or more. In the last two years alone the dollar has depreciated by 15 percent against the index of world currencies. And since the creation of the Federal Reserve system in 1913, the dollar has depreciated by about 95 percent, which suggests that currency devaluation is actually government policy.

While everyone is agitated about what seems to be the dramatically rising price of oil, in terms of the European currency, the euro, and gold, the once and possibly future world currency, the price of oil has been nearly constant in recent years.

That is, commodities are not soaring; the dollar is plunging.

So in seeking to prohibit pension funds from investing in commodities, in necessities, in real goods, Lieberman and Collins would punish not just supposed speculators but also ordinary working people, whose pension fund investments in commodities may be the only practical way for them to protect themselves against dollar devaluation. The senators are also seeking to protect themselves against any doubt that the United States can afford its empire and can afford to bestow on the public a largesse that nobody pays for.

As it turns out, the sharp rise in prices and the accelerating decline in their standard of living are exactly how Americans are paying for the deceptive politics of Lieberman and Collins.



Bruce

That is it for work. Nice and Sunny Out here in Montreal. I am going to visit Crescent Street in Downtown Montreal. Enjoy your Saturday and I will be back tomorrow to get ready for the start of trading, Sunday at 5:15 PM.

A Big Exciting Week is coming up especially Tuesday, June 24, 2008 at 2:15 in the afternoon.

Raise, Hold or Hold with BS Statement ?

We shall see. It will be exciting to witness !!!

Rate hikes UJ will unwind, but if rates are kept the same what will happen? Nothing..

Ranges hold and the chop continues

Currency traders are certainly having their patience tested as most major pairs continue to bounce around in relatively well-worn ranges. The outlook for a break of recent ranges is pretty weak at the moment, given the ongoing data battle between high inflation readings and slowing growth indicators. And those data jousts are taking place in virtually every G-10 economy as the rise in inflation pressures and the slowdown in economic growth are global phenomena. I think traders should continue to approach the market from a range-trading perspective, and only go with a break-out if there is significant ‘new’ news out.

Scanning the horizon for potential catalysts that might lead to a break-out, my primary focus is on oil prices at the moment, and they too are rangebound between $130/140/bbl. The inverse correlation between oil prices and the USD (oil down/USD up and vice versa) remains intact and depending who you ask, it’s either oil driving the USD or the USD driving oil. Demand destruction, the market’s euphemism for reduced demand due to higher prices, is taking place, with China the latest player to address soaring energy prices by reducing fuel subsidies, effectively raising prices by about 18%. But for every indication of reduced demand, there seems to be an offsetting supply (Nigerian rebel attacks) or other sort of disruption (Israel reportedly rehearsing for a strike on Iran) that sees oil prices hold firm. Still, the laws of supply and demand remain in effect and reduced demand is more likely to permeate prices at some stage than not.

In terms of price levels, I am watching the $130/bbl level with great interest. It is both a key Ichimoku level (Kijun line is at 130.32 currently, and price is below the Tenkan line at 135.35, suggesting a downside shift is taking place) and round number psychological support. A break below that level is likely to see a sharp drop to the Ichimoku cloud, currently at the $121-122/bbl level, but rising to about $125 by the end of next week. The $140/bbl level is the upside trigger. A break lower in oil prices will in turn lend strength to the USD and pressure EUR, GBP and other key currencies.

Carry trade meltdown increasingly likely
Another potential spark to break us out of recent ranges is a fresh wave of carry trade liquidations (selling of long JPY-cross positions, like EUR/JPY or GBP/JPY). Recent stock market declines have so far been characterized by relatively low levels of volatility, which have allowed carry trades to resist sharp set-backs. But this week’s declines have seen the VIX index perk back up, though it’s still below the 25 level. Newly unsettled financial markets are just beginning to rumble, and I expect volatility to intensify as renewed doubts over financial and consumer cyclical shares increase. Ratings downgrades spanning the spectrum of businesses continue to keep the outlook sensitive, and I think it’s only a matter of time before risk aversion rears its head again and investors run for cover. Interest rate hikes by key central banks, Mexico today and the ECB expected on July 3, all in the name of fighting inflation, are undermining growth outlooks further, leading to a negative cycle of stagflation in many economies. As a proxy for carry trade weakness, I’m looking at 166.70/80 in EUR/JPY and the 106.50 level in USD/JPY as likely trigger points to major JPY-cross selling.

FOMC rate decision due next week
The main event next week is the Federal Open Market Committee meeting on interest rates and accompanying press statement. The two day meeting runs from June 24-25 with the press statement released at 14:15ET on Wednesday, June 25. The idea that the Fed will leave interest rates unchanged has been fully embraced by the market, with all 96 Bloomberg estimates looking for a steady 2.00% result and the futures market pricing in a slim 2% chance that the Fed hikes 25 basis points. As such, the focus falls squarely on the press statement.
We look for the Fed to make some minor tweaks to the economic and inflation assessment while their take on financial market stress and deep housing contraction will be unchanged. Bernanke’s speech two weeks ago at the Boston Fed will likely prove prescient in what we can expect. The characterization of economic activity will likely be upgraded to something that notes lower risks of a substantial downturn, echoing Bernanke’s comments. On household spending we expect the Fed to point out that the fiscal stimulus has thus far led to a tangible pickup in consumer spending -- the latest retail sales report showed this loud and clear.
That said, the most pertinent part of the communiqué will undoubtedly be how the Fed’s assessment on inflation and risk bias changes. We look for the committee to note an uncomfortable increase in inflation expectations and a more pronounced risk of rising inflation on the back of higher food and energy prices. They might even go as far as to change their symmetric risk assessment (risks balanced between growth and inflation) to focus more on inflation. Indeed, Bernanke noted how the FOMC “will strongly resist an erosion of longer-term inflation expectations” and thus it is quite possible that the Fed will harp on this further. In our view, however, the FOMC is likely to leave the risk assessment balanced towards both growth and inflation. Given the continued deterioration in housing, stressed financial markets, a weakening labor market and the unknown about how post-stimulus consumer spending will hold up, we believe the Fed will be prudent and will not shift their overall bias.
In terms of what this means for the USD pairs, we would expect to see a USD bullish reaction to the initial headlines as the market is likely to focus on the hawkish inflation characterization and bid the buck up. However, anything short of the FOMC changing their bias towards inflation or suggesting that current rates are now “accommodative” is likely to see initial knee-jerk gains in the USD dissipate, potentially presenting a short-term trading opportunity.

However be ready for anything. One historical or almost historical fact based on previous FED announcements. In most cases (90%) the reaction 24 hours after the initial reaction is usually in the opposite direction. Maybe a bit of Buy The Rumor, Sell The News !

Home Now...Good Night ! Great Information posted. Thanks !

http://www.actionforex.com/action-in...2008062150390/

Snippet:

The Week Ahead
FOMC meeting will take center stage this week. Fed is widely expected to be on hold at 2.00% and focus will be on the accompanying statement on Fed's view on risk of inflation and the status of economic slowdown. Markets will base on the statement to reprice the chance of the next move from Fed. Other important data from US include Conference Board Consumer Confidence, House price index, new and existing. home sales, durable goods orders, May PCE and Q1 GDP finalized
In Eurozone, main focus will be on Germany IFO and Gfk, Eurozone PMIs. House price indices from UK will be featured with Q1 GDP. From Swiss, KOF leading indicator will be watched. From Japan, main focus will be on May National CPI, retail sales and unemployment rate. From Canada, May PPI will be released.
While Fed speculations remains the major factor in the overall forex markets, another critical factor will be on carry trades. So far, the Japanese yen reacted little to recent weakness in the stock markets. The broad based weakness in yen is driven by expectation on widening rate gap, especially in EUR/JPY. However, note that firstly, upside momentum in yen crosses is seen diminishing generally. Secondly, some weakness is already seen in USD/JPY, AUD/JPY and NZD/JPY. Thirdly, EUR/JPY and GBP/JPY are both near to important resistance levels. Traders should be alert of any signal of broad based rebound in the yen, which could be triggered by carry trade unwinding if the global stock markets dive further this week.
Suggested Readings:

1. Economic Calendar Summary 6/22 - 6/27
2. Week Ahead In US Financial Markets (June 23-27 2008)
3. The Week Ahead Canada and U.S.: FOMC Rate Decision, PCE Deflator
4. The Week Ahead Europe and UK: German Ifo, European PMI
5. The Week Ahead Japan & Australia: Japanese CPI, Employment
6. Weekly Focus: Financial Strains Continue
7. Economic Outlook: The Fed's Concern Over Inflation (?)
8. EUR/USD: Are European Businesses As Optimistic As Trichet? Probably Not
9. AUDUSD: Expect a Blow-off Top
10. Australian & New Zealand Weekly

GBP/USD Weekly Outlook

Cable's rally from 1.9408 extended further to as high as 1.9791 last week. Initial bias remains on the upside this week. Further break of 1.9800 resistance will indicate that corrective fall from 1.9852 has completed with three waves down to 1.9408. This will be consistent with the broader view that rise from 1.9363 represents another rising leg of the consolidation pattern that started at 1.9337. In such case, stronger rally should be seen towards 2.0391 resistance. On the downside, below 1.9660 minor support turn intraday outlook neutral first.
In the bigger picture, down trend from 2.1161 have made a low at 1.9337. The corrective nature of the rise from 1.9337 to 2.0391 and fall from 2.0391 to 1.9363 suggests that price actions from 1.9337 are developing into sideway consolidation to whole fall from 2.1161. Though, the structure and length of this consolidation could either be in form of a three wave sideway consolidation or in form of five wave triangle pattern. But in either case, another rise is still expected to test 2.0391 resistance. Nevertheless upside of such consolidation should still be limited by 61.8% retracement of 2.1161 to 1.9337 at 2.0464. On the downside, sustained break of 1.9337/63 support zone will indicate that decline from 2.1161 has resumed.
In the longer term picture, prior break of medium term rising channel at least indicate that rise from 1.8090 has already completed at 2.1161, so is the medium term up trend from 1.7047 probably. Hence, sustained break of 2.1161 is needed to confirm the whole up trend has resumed. Otherwise, another fall is still expected towards 61.8% retracement of 1.7047 to 2.1161 at 1.8619 after finishing the current consolidation from 1.9337.
Also, while cable is still staying above 55 months EMA (now at 1.8799) as well as the long term trend line support (now at 1.8808) there is no indication of the completion of up trend from 1.3680 (01 low) yet. However, bearish divergence in monthly MACD and RSI suggests that 2.1161 is at least a medium term top and more downside is in favor in medium term even if the long term up trend will resume eventually.


Bruce

http://www.forexfactory.com/images/s...n/post_new.gif Today 5:55am
Warren Forex http://www.forexfactory.com/images/s...ser_online.gif
Warrenforex
Member Since Sep 2006
Posts: 949


http://www.forexfactory.com/images/icons/icon14.gif Your Post Confirms My Strategy !
Quote:
Originally Posted by forexpert310 http://www.forexfactory.com/images/buttons/viewpost.gif
Yup, every system works some time, you have to trade the times it is working, and this sense comes from experience.

I use a method that I did not invent or discover as a system. It just came naturally to me. The one definite is that it works. It works in part because of the same point that you made in your post about technical trading.

Your point being that if it does not work try to find out why it did not work.

With that as background I trade using FTP !

I will look for the Video Link on the explanation and post it here after on edit.

FTP is Fundamentals + Technicals + Perception

I look for why the fundamentals are changing without changing but more IMPORTANT short term the PERCEPTION is changing. When Perception changes back to REALITY you have your EDGE if you are aware that the PERCEPTION is wrong due to the Fundamentals which in the end always drive the market.

Link: From My Home Thread "Knowledge Is Power"

If you have not viewed the video posted on this thread called "FTP" please do so after reading this post. FUNDAMENTALS get you into your position ahead of most others. Then you use TECHNICALS to get the BEST entry into that currency and also know where everyone sees, Support, Resistance and Pivot Points.

Then we get to PERCEPTION as I just explained above as did Jack Crooks confirm. GUESS WHAT ? Just like in the FTP video of a little less than 7 minutes shows, when the PERCEPTION becomes commonplace, that is when it will be ready to reverse as it just might do at or shortly over the next few days since ONE, there will be surprise by the NON ACTION of the G8 and following that on Monday and Tuesday coming, there is IMPORTANT US Data on the housing market including the much watched and accepted NAHB index coming out on Monday at 1:00 PM

I will do another post on how to take advantage of this knowledge to make money using my method of trading FX which works.

Here is the Link to the FTP video.

http://broadcast.ino.com/education/t...eboard_6/?blog

PLEASE WATCH IT !!! Thank You !!!

Note: I watched the video myself again and looking at it very carefully from a technical point of view what is being said is that the fundamentals are being confirmed by the breakout. Now knowing the breakout is backed by fundamentals is surely helpful. So the key is knowing if it is a real breakout or a false one. The video talks about fundamentals being supply and demand and other factors as scarcity. On the downside with Perception and Fundamentals seen by all as the Perception is being returned to reality such as the next FED announcement where it seems no raise is coming yet two weeks ago the FED convinced the markets that the chance of a raise was growing. I would appreciate some discussion on my observations since I trade more from the fundamental side. I find the breakout comment very interesting from a technical view which is not my stronger suit !!!



Bruce
Last edited by Warren Forex, Today 6:14am Reason: To Add Link: Added Comments !!!

What The Oil Price does in the next 6 months will have a major influence on the markets.

Here is a good information piece as food for thought. Enjoy !!!

http://www.moneyandmarkets.com/Issue...erEntryId=1900


China raises gas prices: Is this the end of the oil boom?
by Sean Brodrick 06-22-08

http://images.moneyandmarkets.com/986/sean-brodrick.jpgLast Thursday, China roiled the oil market, announcing it would raise gas and diesel prices by about 46 cents per gallon in order to reduce demand. In a matter of minutes, oil prices skidded lower.
Before you knew it, America's TV news and finance channels were all over the story. They asked the burning question, "Will higher prices and lower demand in China kill this great bull market in oil?" And they presented a seemingly endless parade of oil bears and stock bulls who almost unanimously proclaimed that oil prices were about to crater.
I hope those experts can live with disappointment, because by Friday morning, investors were buying the pullback like crazy and the oil price was already recovering nicely.
Why?
Well for one thing, savvy oil investors know that this price hike is likely to actually increase demand!
Look: If you were told gas prices were going up 18%, wouldn't you run out and fill every gas tank you own to beat the price increase? And once prices jumped, wouldn't you expect more price hikes in the future — and look for opportunities to buy sooner rather than later?
I sure would — and I'll bet you dollars to donuts that millions of Chinese consumers will, too!
Plus, even if this modest price increase did cause some Chinese drivers to fill up less often, any reduction in demand would be dwarfed by the legions of new vehicles on Chinese assembly lines right now.
China will see AT LEAST 6.6 million new cars, trucks and vans hit their roads this year. And I'm not even counting scooters and motorcycles. Some estimates go as high as 10 million new vehicles hitting Chinese roads in 2008!
Last year, Chinese bought 5.5 million cars, minivans and SUVs plus 3 million commercial vehicles, up from just 1.6 million vehicles sold in 1997. This year alone, sales are expected to grow another 15% to 20%.
Plus, a huge percentage of China's oil demand comes from its massive manufacturing sector: Companies that make and sell trillions of dollars worth of Chinese products to the rest of the world.
Since energy represents only a small fraction of most of these companies' manufacturing costs, it's unlikely that marginally higher prices will reduce their thirst for fuel one iota.
In fact, the opposite is more likely the case. With The World Bank recently raising its forecast of Chinese GDP growth for 2008 to 9.8%, China's industrial sector is likely to consume more fuel than projected this year!
The fact is, this is a massive, global, long-term mega-trend driven by soaring global demand and shrinking global supplies. A modest fuel price increase in China or anywhere else isn't going to put more oil in the ground or make it cheaper to extract. Nor are higher Chinese fuel prices likely to reduce demand among the other 78% of the world's energy consumers.
Heck, it's not even clear that Thursday's fuel price hike will soften demand in China — especially with armies of tourists from around the world about to descend on that country for the Olympic Games!
http://images.moneyandmarkets.com/98...-brodrick2.jpg This isn't the first time I've predicted surging energy prices.
In January, for example, I recommended a portfolio of stocks and funds in my oil report, Running on Fumes.
Already, those stocks have gone ballistic, delivering rapid and robust gains to investors who followed my recommendations.
Bottom line: Every indicator I study is still telling me that oil, gasoline and natural gas are headed for the moon ... key energy stocks are about to leave the oil bears licking their wounds ... and that you have a historic opportunity to go for windfall profits in the months ahead.
Why? Because I count no fewer than nine global triggers that are now turning this energy crisis into a full-fledged energy PANIC ...
Energy Panic Trigger#1:
The Saudis couldn't solve this
crisis if they wanted to ...
and they do NOT want to!
Saudi Arabia is the biggest exporter of oil in the world, and it is the only OPEC producer with any significant spare production capacity. It's also the #2 supplier of U.S. imported oil.
Problem: It supplies mostly the heavy oil that, regardless of any production increases, will have little impact on the market that matters the most for U.S. consumers.
I'm talking about gasoline, which is refined mostly from light crude: And light crude supplies are not only tight; the premiums over heavy crude are soaring to their highest levels of all time.
Most important: The Saudis aren't motivated to pump enough oil to bring down prices even if they could! Why should they? They're making money hand over fist — hauling in huge, historic profits — with each new surge in oil prices!
Energy Panic Trigger#2:
The higher oil prices climb,
the more America imports!
Sure, we've seen gasoline demand drop a tiny bit as energy prices rise — and some say that the drop in demand will drive prices lower.
http://images.moneyandmarkets.com/98...s-more-oil.gifBut the facts say something very different:
Look: In 1990, oil was at $23 a barrel. Today, it's flirting with $140 — a 509% increase.
If the oil bears were right, you'd expect U.S. oil imports to have dropped dramatically — right? But U.S. oil imports are up a staggering 70% since 1990 — even as oil doubled to over $50 per barrel ... doubled again to over $100 per barrel ... and continues going ballistic right now!
Energy Panic Trigger #3:
Massive new oil demand from emerging
markets is now eclipsing U.S. demand!
Better brace yourself: Did you know that this year — 2008 — will be the first year that emerging markets will consume more oil than the U.S.?
It's true: I'm talking about countries like China, India, Russia, and parts of the Middle East. According to the International Energy Agency (IEA), those countries are expected to consume 20.67 million barrels a day this year — more than the United States will.
China is the giant mover and shaker in the energy markets, as its gasoline and diesel demand has soared. But now, India is poised to zoom past China as the world's fastest-growing car market, with sales of passenger cars in India increasing 12.17% to 1.5 million this past year!
Energy Panic Trigger #4:
Production is cratering in not one,
but TWO major oil-exporting countries!
Mexico is our #3 source of imported oil — 1.2 million barrels per day (bpd), or 12.6% of our imports — and the decline in production from its super-giant Cantarell oil field can only be described as catastrophic.
Even as global demand for oil continued to explode last year, Mexico's oil production fell 5.3% — and then fell faster in the first quarter of this year, by 7.8%.
And what's worse, Mexico's crude oil exports dropped even more sharply, down 12.5% to 1.49 million barrels per day in the first quarter!
Worst of all, Mexico's production crisis is deepening: In April, Mexico's oil output fell to a nine-year low of 2.8 million barrels a day, mostly because of a decline in the Cantarell field.
Think that's scary? Consider this: At current rates of decline, Mexico will become a net oil importer by 2016, and maybe sooner, according to Mexico's Energy Ministry!
And it's not just Mexico. Venezuela, another big supplier of U.S. imported oil, is hemorrhaging oil production due to the slipshod management by its deluded president, Hugo Chavez.
Result: The combined net oil exports from Venezuela and Mexico to the U.S. dropped by 414,000 bpd in just five months recently. That's an astounding annual decline rate of 32% a year!
Energy Panic Trigger #5:
Meteorologists' Red Alert:
Devastating hurricane season ahead
in the oil-rich Gulf of Mexico!
When La Niña is strong, hurricanes are also more powerful than normal. Well, batten down the hatches, because a strong La Niña is expected to last through the summer, delivering worse-than-average storm activity THIS season.
The Gulf of Mexico provides 20% of the natural gas and 30% of the oil produced in the U.S. Some of the oil and gas production knocked out by hurricanes Rita and Katrina in 2005 have never come back. While the industry has worked to harden its platforms and facilities in the Gulf, a monster hurricane could create huge spikes in oil and natural gas prices this summer and fall.
And while offshore platforms have been reinforced since hurricanes wreaked havoc in the Gulf of Mexico's "Energy Alley," all it would take is one bad storm in the wrong place to knock out the Louisiana Offshore Oil Port (LOOP) which supplies 13% of the nation's oil — not to mention the fleets of U.S. and Mexican rigs in the Gulf of Mexico.
Energy Panic Trigger #6:
The era of cheap, easily
recoverable oil is OVER!
Today, fully half of the world's oil production comes from less than 120 giant fields. But the majority of these fields are more than a half-century old and some are running on fumes: We're getting between 4% and 5% less oil out of the world's existing oilfields every year.
Quite simply, the Earth is running out of oil. Prior to the first exploration by man, estimated crude oil reserves on the planet totaled roughly one trillion barrels. Today, about one-third of that oil has been drilled, refined and consumed.
Worse: Even with today's high-tech drilling methods, only about 35% of the world's remaining oil reserves can be extracted from the ground — and it costs more to recover than ever before!
Energy Panic Trigger #7:
Peak Oil is dead ahead!
"Peak Oil" is a simple concept with complex — and potentially catastrophic — implications. It means that the world's oil production is not only peaking, but also that, regardless of how many new wells are drilled, total production will continue to decline.
It's important to understand that Peak Oil does NOT mean that oil prices have peaked. To the contrary: It means that production has peaked — while demand and prices continue to soar. And frankly, every statistic I study tells me that we are at, or very close to, Peak Oil right now.
http://images.moneyandmarkets.com/98...s-capacity.gifAccording to government data, the top five oil exporting countries — Saudi Arabia, Russia, Iran, United Arab Emirates and Norway — responsible for half of world net oil exports, are using more and more of their own oil. At the same time, their production is flat or falling, driving their exports into an accelerated decline.
Sure enough, according to the U.S. Department of Energy, the volume of petroleum products shipped by the world's top oil exporters fell 2.5% last year, despite a 57% increase in prices, and the same trend is holding this year.
In other words, it doesn't matter if we pay more — they just don't have more oil to give!
As for smaller exporters, as I told you, Mexico, the #3 source of imported crude for the U.S., will hit zero in net exports in just eight years. And Venezuela is leading most other oil exporters down the slippery slope of production cutbacks.
At the same time, Indonesia and Great Britain, both exporting oil as recently as two years ago, are now importing oil, competing with the U.S. for scarce energy resources.
THE BOTTOM LINE: If current trends continue, the top five oil exporters will approach zero net oil exports around 2031!



Bruce

Please sign in so I know who is here trading and who is not. The simplest thing for you to do is generate a report with your demo trading platform so I can see who I am talking and trading with.

To anyone even Thinking about duplicating any demo trades recommended, please do not do it. You can follow along but you are responsible for your own decisions on trading. Eventually you need to make decisions and not take other traders ideas even if they are good. You need to have your own 100% conviction to do your trade.

Good Trading Week All !!!

Have a look and any comments, questions are Welcome !!!

130 FX Trades since Account opened On June 9, 2008.

Locked in Profit $112,640.64 US Drawdown - $1,708.21 US

Winning Trades - 126 Open Trades - 4

Bruce