EURUSD

As I post this comment the Dow is down 61 or so. Gold is UP nearing $800 again and Oil is UP pennies.

The 2 Year Bond Yield is now 2.37% down from last week. The 10 Year Bonds are Yielding 3.83% a spread of 146 Basis Points.

Money is being put into Bonds and going out of the Dow and going into Gold and some Oil as well as into the Yen.

There is uncertainty out there.

Now to NAHB at 1:00 PM

This is the National Association Of House Builders and it is an important number.

The markets are expecting 16 the same as last month. That was an all time LOW !

How will the markets and the Dow react if it comes in at 15 as 4Cast has called ?

Probably DOWN a Bunch !

What if it goes back to 18 ? The Dow goes UP 100 at least and the US Dollar Index goes up and EUR/USD goes down.

These are things you should be aware of. Those charts will change in an eye blink period.

Stay Tuned and have FUN !!!


Bruce

If the trend is going to turn up then watch for this to change:

the last 5 weeks the weekly high was made on a Tuesday/Tuesday/Monday/Monday/Monday.

are you short from 1.4761, right ?

Oil is dropping very fast and both EURUSD and GBPUSD are temporarily going up.. Watch out!

That's interesting.

Mike

Crude down -$0.30 looking to break low of the day.

But then NY markets are down so that doesn't corelate to EU down too.

That's for sure.

From WWW.JSMINESET.COM

This will affect the US Dollar PERIOD !!!

Posted On: Sunday, August 17, 2008, 9:07:00 PM EST
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In The News Today
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Author: Jim Sinclair
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Jim Sinclair’s Commentary
Take a look at how the Monday's WSJ sees Freddie and Fannie. Is this what strong currencies are made of? I am eager to see how financial TV spins this one.
The Endgame Nears For Fannie and Freddie
BY JONATHAN R. LAING
IT MAY BE CURTAINS SOON FOR THE MANAGEMENTS and shareholders of beleaguered housing giants Fannie Mae and Freddie Mac. It is growing increasingly likely that the Treasury will recapitalize Fannie and Freddie in the months ahead on the taxpayer's dime, availing itself of powers granted it under the new housing bill signed into law last month. Such a move almost certainly would wipe out existing holders of the agencies' common stock, with preferred shareholders and even holders of the two entities' $19 billion of subordinated debt also suffering losses. Barron's first raised the possibility of a government takeover of Fannie and Freddie in a March 10 cover story, "Is Fannie Mae Toast?"
Heaven knows, the two government-sponsored enterprises, or GSEs, both need resuscitation. Soaring mortgage delinquencies and foreclosures have led the companies to gush red ink for the past four quarters, and their managements concede the outlook is even grimmer well into next year. Shares of Fannie Mae (ticker: FNM) and Freddie Mac (FRE) have lost around 90% of their value in the past year, with Fannie now trading at $7.91, and Freddie at $5.88.
Similarly, the balance sheets of both companies have been destroyed. On a fair-value basis, in which the value of assets and liabilities is marked to immediate-liquidation value, Freddie would have had a negative net worth of $5.6 billion as of June 30, while Fannie's equity eroded to $12.5 billion from a fair value of $36 billion at the end of last year. That $12.5 billion isn't much of a cushion for a $2.8 trillion book of owned or guaranteed mortgage assets.
More…

Snippet:

The Bush administration feared the stock collapse would signal that the companies were heading for insolvency, and thus call into question the safety of their $5.2 trillion debt and guarantee obligations, despite the government's implicit guarantee of that paper. The impact of a failed GSE debt auction would be global and catastrophic, since foreigners, including many Asian central banks, owned $1.5 trillion in Fannie and Freddie paper.

From WWW.JSMINESET.COM

Jim Sinclair’s Commentary
They were valueless then, they are valueless now. Is this what a strong US dollar is made of? Watch out below. This is far from over.
"Worryingly, Lehman said that many of the British mortgage-related assets on its books had become virtually impossible to value. This is in marked contrast with its first quarter, when the assets had been fairly easy to value, according to Erin Callan, Lehman’s then chief financial officer."
Lehman Brothers in talks over sale of $40bn real estate assets
Suzy Jagger in New York
Lehman Brothers, the Wall Street investment bank, is understood to be in talks to sell its entire $40 billion (£21.5 billion) real estate portfolio in a move to stem losses incurred during one of the worst property slumps since the Great Depression.
The bank – whose stock has fallen 69 per cent since the credit crisis erupted just over a year ago – is believed to be prepared to take a $5 billion hit on the sale of the assets and securities.
Lehman is believed to have begun sale negotiations with firms such as Blackstone, the private equity group, and BlackRock, the fund manager.
However, it is thought that Lehman is optimistic about the price it might secure for the portfolio even though both residential and commercial real estate assets have collapsed in value. Some mortgage-backed securities – which are collateralised by residential real estate – are so untradeable, they are effectively worthless. Lehman Brothers in New York did not return calls last night.
It is thought that the bank, which is headed by Richard Fuld, is considering whether to hive off its real estate portfolio and float it in the event that it fails to sell the assets to buyers such as private equity or fund managers.
More…

Snippet from More:

Lehman Brothers announced plans in June to raise $6 billion by issuing new shares as it unveiled a larger-than-expected $2.8 billion loss for its second quarter. The results were dragged down by about $4 billion of writedowns on Lehman’s mortgage and private equity-related investments, and were well below the loss of $300 million to $1 billion that most analysts had predicted. They represented the first loss since Lehman went public in 1994 and compared with a $1.26 billion profit the year before.

I thought usd will be stronger when oil price drop !!!

How do you suggest this will affect the dollar? So far it's been ranging since this news piece was out, with a bias of USD strengthening. I assume your posting this news piece is to forecast that USD will weaken, but no sign of that happening yet.

Like I said everyone -- do you not see it clearly? This week will be dollar profit taking. Regardless of any poor data released from the EU. Please please please give me one good reason to start a NEW short from this level? Can't you guys see that someone is a buyer in the 1.4690-00 range?

Stop trying to fight the weekly trend. Asia already gave us the answer.

This has nothing to do with how much you spend on groceries, alcohol and lap dances.

All quality investments to be sure – but that's another thread.

During the big dollar run thats been underway I’ve noticed a lot of people posting about losing their accounts after one or two days of trading.

This is often the result of poor money management.

I’m not going to delve too deeply into this subject but I do encourage you to read the article Money Management located on the home page of babypips.com.

A quick example below.

You’ve found the Holy Grail and you’re ready to begin rolling in the green.

The SINGLE most important facet to being in this environment long term is how you manage your cash on a per trade basis.

When you start trading real capital never risk more than 1% on each trade.

Let’s say you just deposited 5k in your trading account.

1% of 5K is $50.

Your system has a 50 PIP stop.

Each PIP should be worth $1.

If you’re trading more than 5% or more on each trade your days are numbered.

It is Monday. How are you determining the weekly trend already?

Oh and Crude is now down $1.20

Now Short, later we'll buy near 1.4650

http://4.bp.blogspot.com/_nmIuQsC9b-...erver++EUR.png

ok bro you made your call, now lets see if it pans out as you expect, it seems your the only one who "see's it clearly" so if it does go long you can say 'i told you so' but for now, stop trying to persuade everyone into your line of thought.

I would go with much stricter rules than this, I would call any moment that you have over 2-3% of account risk a very serious risk.

The best thing with calculating risk based on current risk is that you can pyramide when you have managed to zero your previous risk, ie, moved the sl to a level where your minimum profit is > 0

Money management is the MOST important thing in trading.

There are many factors on determining the current weekly trend. A few hints: Asian's start to the week, along with their moves the past two weeks; last weeks overall trend, including technicals/fundementals; overall market sentiment, etc. List goes on, but when I piece all together I see us touching 1.4850-4920 range by the end of the week.

Since the topic at hand is the race to the bottom the person who I most trust to be correct in his analysis is Jim Sinclair of WWW.JSMINESET.COM

Here is his take on it and now we shall see what happens. All posters here now have seen both sides of view. You decide for yourself which view is closer to yours and trade FX accordingly.

I am going to wait for the News at 1:00 PM in case it moves the markets. We are ranging at the moment.

Here is the Jim Sinclair piece !!!

Posted On: Sunday, August 17, 2008, 8:58:00 PM EST
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Considering The Perma-Weak Euro Concept
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Author: Jim Sinclair
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Dear Friends,
Before you sign on to the concept of the perma-weak euro (Pritchard-Telegraph), consider the following:

1. The foundation of the entire present problem is a credit lock up based primarily on the US manufacture of noxious paper - OTC derivatives.
2. Only UBS can be considered a major OTC derivative manufacturer that nears the copious level of US greed driven money manic sociopath purveyors of that Ebola of the financial world.
3. Assumptions that Euroland has problems as serious and threatening as the US (Pritchard-Telegraph article) is presently an arm wave, not a solid demonstrated fact.
4. Now we know what the statement made by Chairman Bernanke meant when he referenced the possibility of non-US entities having access to the Fed Begging Bowl loan window. The European Central Bank is precluded from Bear Stearns type bailouts.
5. That would suggest the US Fed might bail out major European financial entities that are major grantors of OTC derivatives, thereby monetizing world bankruptcies.
6. The load on the US dollar is becoming terminal. As of today’s Barron’s article, this load will sink it.
7. Markets, thanks to the combination of hedge funds and black boxes, possess an unprecedented vengeance that is convincing investors to panic.
8. Media works to reinforce viewpoints that sustain the marketing of all sorts of paper. When have you heard that OTC derivative factories caused this planetary killer meltdown?
9. Media has worked hard to convince you that the dollar is king, commodities are junk, energy has only one way to go (down) and that the ECB is going to lower rates every month until they hit minus 1%.

Conclusion:
Either argument carries us on a clear path to $1200 and then $1650. A weak euro takes some more time while a strong euro is as close to immediate as markets can be.
It is no forgone conclusion that the euro is going to win the race of currencies to the bottom, as Pritchard indicates.
Pritchard-Telegraph disdain for the management of the ECB is clear. He fails to grant to them that they have a history of seeing what the result of today’s monetary push forward actions have resulted in - the Weimar Republic.
With a strong euro, gold is going to $1650 now. With a weak euro and the US Fed bailing out Euroland’s financial entities, gold will move to even higher prices.
This move will occur by the 2nd week of January, 2011.
Gold will be center stage trading at or above $1650.
The US dollar will be below .62. Right now a break below .72 we can call the major panic number.
I do not buy the entire Pritchard case, but you had to hear it to know both are gold positive, one immediate while the other takes longer and gold goes higher.
Respectfully,
Jim