GU, GJ and EU Analysis Thread

Yesterday evening saw me dining with friends; a banker for one of the big ‘uns’ in France, his wife, a social service officer, a lady working in IT, and her husband, a manager for GE. As can be expected from such functions, the hours preceding the event were filled with blood, sweat and tears – well, for my wife as she set up camp in the kitchen. I, being made of English stock, spent much of my time being beaten away from the dishes being prepared, or dashing off in the car in order to hunt down that elusive ingredient.

So, off trundled les rosbif in search of baby artichokes – of a particular type, you see, as those grown in poor soil have no tenderness. It was whilst on this quest – for it surely turned out to be one – that I tuned into the radio and listened to a discussion concerning the latest statistics from Eurostat – that consumer prices here in EuroLand were 1.8 percent higher this month than at the same time last year, and were 0.2 percent higher than in August. Hmm, no surprise there. The next issue up for debate then involved one of my favourite targets: Madame Christine Lagarde. Covering her recent comments regarding hedge funds, the radio also cited her resolve to cut the French budget deficit by 40 billion Euros next year… this is contrary to some of her, and Sarko the barko’s, previous statements that there will be no cuts in social services, or tax increases, as France was in a strong position to weather the storm currently blowing over EuroLand. Well, much like how the summer has suddenly ended here, so, too, it seems, has French insouciance.

Later, whilst sitting at the wrong end of the dining table to have access to those artichokes – much to my private chagrin as I had worked hard to acquire them, and even harder when extracting the hearts after a session of cooking that saw tempers and steam rise in equal amounts as one fought to finish before the first knock on the door - the issue of finance was introduced to the participants of the evening. Not by me, I must add, but the social service officer, bemoaning the reduction in funds for cultural anthropological studies upon those that come to live in my part of the world.

Much like the entrée – a rather snapping quiche served very cold and accompanied with a splash of Meursault – my quick comment of there being a ratio of perhaps 1000 cows to each person, and that perhaps such studies were irrelevant to the local economy at present, was met with the not-to-unexpected reaction of being blutterbunged… well, not from all. The banker appeared to nod in agreement to my statement, whilst avoiding an immediate defence of his wife’s position by helping himself to more of the artichokes, and thus curtailing his ability to speak - as the eldest of the guests, he was afforded the honour of being seated closest to the kitchen, and therefore could decide what to pass down the table as it was served. Bastard. I, being the youngest, was placed at the bottom, and was responsible for accumulating the empty dishes in my area, which prevented there being space for much else. I near panicked at one stage as it appeared that my glass would have to be sacrificed for additional room – and it is a large table – but averted disaster by finishing the remainder of the quiche, and thus was able to remove the dish. Hey, if I was to forego some of the culinary presentations, I sure as hell was not going to forego feeling satiated come the end of the evening.

The conversation quickly descended into the realities on the ground, with the IT lady and her husband moving discussion into the rate of employment seen from two different professions. It’s looking grim… for those that want entry to the feast that is fulltime employment in France. With strong labour laws, and generous holiday entitlements, it is extremely costly for an employer to hire anybody, and so the recent trend the last year or so is to take on contract workers when needed - a trend that, ostensibly, is becoming increasingly permanent, albeit with a negative gradient as fewer and fewer contracts are being offered. This, I suggested, skews the real situation, but helps with the serving of official figures to the public. Turning to the banker – busily helping himself to another scoop of the Corsican veal dish, and by association, my lunch the following day - I asked what his thoughts were upon French GDP, CPI, PMI ? Whilst most present assumed a glaze not too indifferent to that seen on some of the hors d'œuvres, the banker’s response was, ‘Ah, we may have long holidays, but we are productive.’ I wish I had had a German guest at this point, as I’m sure they would have choked somewhat.

Productive, erm, with each serving of French growth forecasts, the dollop to be expected is reduced. And so it was with my dessert – an egg custardy-kind-of -thingy that each guest spooned out for themselves. To be fair to the banker, he took the least – probably stuffed with artichoke and veal – but still, I had to feign contentment at the quantities of other food that I had already consumed, and encourage my guests to eat their fill. Which they surely did, and which reminded me somewhat of how much France takes from the EU. Burp!

And so the end of the evening arrived, and with it, my chance to check on what was left. Much like the young elsewhere in Europe, I was able to find scraps here and there that would keep me going until the next day, but nothing of substance that would enable me to not have to worry too much about what I could put on the table the next day.

And no, I did not get an artichoke. Pff…

zones of interest




Red

Wow... It's like reading a month's worth of Daily Mail editorials in one go.

I'm on childcare duties this weekend, thus I will not have a chance to respond to the many thoughts expressed in your post.

Good luck.

LOL... cruel Sir, cruel. Would not want to be thought of in such a light. Actually, abhor the European rags, but am guilty of hitting the online editions of the FT, Le Monde, Spiegel etc. Always hard these days not to be quickly pigeon-holed as partisan to a particular editorial, as opposed to one’s own evaluation.

If I say I read Noam Chomsky, some may take the easy option and, unwilling, or unable to say much more, label me an intellectual anarchist. If I say I read Friedrich Hayek, others opt to label me a supporter of neoliberal, fascist dictatorship. It’s hard these days to avoid being dismissed into packaged camps of thought… I guess a kind of social affliction that suppresses individual thought in favour of majority collectivism based on few-word headlines and short-sentence summations of broader considerations that are often incorrectly cited, and quoted out of context. But as you probably realize, a lot of people today choose to follow the direction prescribed by that which they are most exposed to.

Anyway, enjoy your duties… are they old enough to read Bill Watterson (Calvin and Hobbes), or the lessons as presented by Norman Thelwell (Pony Cavalcade)? I find a lot of the answers to life can be found there.

PS. Sorry if my submissions bore people, but I find it fun, and hopefully they add variety to this thread.

PPS. As Calvin said; ‘These are interesting times. We don't trust the government, we don't trust the legal system, we don't trust the media, and we don't trust each other! We've undermined all authority, and with it, the basis for replacing it! It's like a six-year-old's dream come true!’

hahah....45Condor. To some perhaps hardline Guardian readers, whatever line you take and whoever you read, you opinions would always come across as Daily Mail stuff. But Le Monde is pretty lefty stuff, hey Der Spiegel is often quite sharp, I found it getting better than The Economist these days, which seems to have gradually drifted downhills. Good for you and keep up your editorials

Agree on your point about being dismissed into packaged camps of thought. Someone on this thread has even dared to hint that I may be a Guardian reader! In all seriousness, though, with the explosion of internet and digital news sources in the past decades, there is quite an unhealthy tendency for people to only follow parts of the digital media that reinforces their view of the world, rather than anything than may pose a challenge to their thought process.

In answer to your question, the said child only joined this world a few days ago, meaning the only thing he is currently old enough to do is deprive me of sleep.

Good luck

Absolutely agree with that. The explosion of media sources is frustrating, and makes it difficult to find objective opinion. Let’s face it, most media has, in some way, shape or form, editorial propensity that is dependant upon owner, and targeted audience. It seems these days that it is not the audience listening, and making independent assessment of, the chosen media – although some are quite happy to do so – but the inverse, whereby the media assess what the audience would like, and adjust editorial content accordingly… I would argue, in most cases, based on two issues; political persuasion and fiscal return. Yeah, this observation could be broken down into so many levels of argument that only a dissertation would do the submission justice… stuff that – I produced one dissertation in my lifetime, and I ain’t doing another unless someone gives me a salary commensurate with the hours required to produce such a tome.

You’re spot on with reinforcement of view, and more people should take more references before formulating an opinion. I, admittedly, do have persuasions, but do try to look at releases of numbers, and comments upon, from several sources. This, I feel, helps me to find official discrepancies and to unfurl the convoluted language in press release etcetera. Yes, I may be somewhat acerbic with some of my submissions, but I am ageing, and so should be allowed to become grumpy. We are all guilty of identifying with something. If we did not, we would be truly independent, and I have found that in such circumstance, the truly independent are either sectioned or shot.

As for opinion, many argue that there is no right or wrong, only that which people agree with, and that which they do not, and as such, one can choose to emancipate themselves from all responsibilities as defined by the society that they are contained within. Scary, and no, I was never a hippy, man.

Lack of sleep. Ah, enjoy. Not sure of what liquid was dispensed upon you in the last day or so, but I guess like you, I, too, was up at a ridiculous hour this morning as I braved the downpour of rain and chased down the wife’s horse in a dark, muddy field, prior to the wife departing with the horse for a day of endurance competition. The balance of power in this relationship does not seem right. I have a day off but have to get up early, run blind in a large, muddy field whilst it poured down, and then watch as the wife – still seated warmly in the vehicle – smiles and drives off.

Right, enough rambling.

My wife has two horses and a pony for our two young daughters (2 and 4) but blow me backwards if I am going to start chasing her horses round a muddy field. I made it quite clear from the start that it was her hobby, mine is golf, and she is responsible for all the maintenance. As you know they require some serious maintenance and I ain't one for poo picking! Now onto some trading analysis of mine.

EU: Boy is this thing over extended and surely a correction is on the cards. Currently the net dollar-short positions is at the highest levels since the summer of 2008 – the time when the Euro began collapsing and the only reason why EU has recently rallied is because of $ weakness with the threat of QE2.

Now I shorted this at 1.3670 on Thursday and managed to close 1/3 of the position for a small profit at 1.3586 making the other 2/3 free trades which eventually hit their SL (1.3705) on Friday morning. I did make some 20-30 pip profit on some intraday longs once it broke through, but I still feel that this pair is way overdue for some proper correction. This pair hasn't even come close to the 50ema on the h4 timeframe since the upsurge!

Therefore the next area I am looking at for a swing short is around the 1.38 mark with my SL at 1.3839 + spread + 5 pips (weekly start-Feb high), which I think is safer than the 1.3816 (weekly mid-March high), but it all depends on Sunday opening. I am hoping that we get a novice gap up into this weekly supply area, which for me would confirm that this pair will be going down for some correction.

How far?

My 1st target based on the h4 timeframe, which I mainly use for my swing trades, will be ~1.3725 to ensure that I get a small profit and make the other 2 runners free trades. It then needs to break the resistance at 1.3710. My next target for runner 2 will be 1.3590 and as always keep a technical trailing stop for my last runner.

Let's see what happens in 7 hours time. I wish you a succesful trading week.

This board is getting more interesting, with all the horse chasing tales and some diner party chatter. 45Condor seems like a perfectly obliging husband... Right, I do prefer someone else groom the horse perfectly well so I just mount and set off. That does put me off long-distance horse trekking sometimes as I will have to do all the serious maintenance, but, still, it's great fun.

On to trading, the first two weeks of October are quite important. Many eyes and minds are set on the time around 8 October, including some of the very big boys. Markets are overstretched indeed and a decent correction is overdue. Cable is the weakest in dollar pairs.

Yes, EU could be argued to being marked up by big money that knows a correction is coming. I have a mixed mental bag of thoughts that I would like to put down into print, and may do so at a later date.

I am interested in what happens in Ireland in the next week or so, and Portugal – their yield prices are sky high.

I would like to know why the ECB is buying crap like there is no tomorrow – perhaps there may not be if they do not – and how China and Norway have been involved in some pretty heavy buying of European bonds. I suspect that now, many realize that there is not enough money to bail out Ireland, and then the rest of the PIGS, and what we are seeing is perhaps the ECB protecting the Euro and its central members. Stuff others, let’s now not bail small members out – the Greek ruse failed – and instead protect the EU project. Let us, instead, increase the value of the Euro, forget that this harms the export market for Ireland, and tell them not to ask for help, but instead raise taxes. Let’s also enforce tough conditions in Basel III that force banks to increase capital – I guess the German and French banks can take greatest advantage of this at present, although I question if the measures are stringent enough (http://www.forexfactory.com/showpost...&postcount=563) - and therefore try to minimise impact as the real figures for bad debt in the PIGS is slowly released… it is quite clear that nobody was fooled by the recent stress tests – damn.

How this will play with Germany is guesswork at present, as a cheap Euro is good for exports. If the Euro maintains its gains, German may falter, and if she does, so, too, does France. However, I expect that there is some sophisticated juggling going on at present as the EU and ECB prepare for a stage in their evolution.

I’ve said it many times: 01.01.11 is an ominous date for possible declaration of a Euro currency V2.

I’m still in the 1.38 region as the top of this rally – based on charts submitted earlier. Bbakker… a fellow sufferer of equestrian encroachment upon one’s lifestyle. And thank you for the vouch. Oshawa – you sound as though you live on an estate, and have the stable hands to assist… nice. Only joking. Your comments upon dates is interesting, as, too, is the news for this Thursday, and perhaps coinciding nicely for a failure over in Ireland to resolve its issues in the earlier part of this week.

Right, back to throwing the bones for mystical insight.

Too much good stuff said for me to comment specifically on any of it.

Weird things will happen in the market this month. Speculative and leveraged shorts who thought resistance would hold in late September are going to be trying to get out on any shallow dips which should fuel small amounts of USD selling early in the month.

As far as I am concerned, current prices all have QE2 baked in, as pointed out by others shorts have not been piling in, if there is no QE2 announcement then expect a strong correction. But there is another possibility to squeeze USD shorts:

The USD interest rate. If Treasuries have indeed bottomed and rates are about to go up, expect the USD to strengthen chronically against the likes of EUR, CAD, JPY, GBP and CHF with their extremely low target rates.

My long term view on the USDX (weekly chart) essentially centers around the 80 level. If we bounce, approach the 80 level and fail/break lower before testing it, then expect much much lowers in the USD over the coming year. Otherwise this is just a corrective move, and the next wave up in DX is coming.

So only a little patience is required, and the market should tip its hand.

http://www.telegraph.co.uk/finance/c...epression.html

...well done for picking up on the general feeling, IMF. Pff...

Off on safari come Saturday for a couple of weeks, but may have to batter the brains one more time beforehand. Sorry folks, but I just can't hold back from comment upon supposed rescue for the populace via zero interest rate policies, quantitative easing, IMF interference and so on.

Still long twice on Cable, and still have in the cross hair the 1.5950 region.

So, the IMF state that more money is required in order to stabilize the global finance sector, highlighting banks as the Achilles heel of economic recovery. Really. Hey, Dominique Strauss-Kahn, you’re right on the money there, chum. If anyone can be bothered, the following link will either have you nodding in agreement, or despondency.

http://www.spiegel.de/international/...721158,00.html

To quote Dominique Strauss-Kahn: ‘You have to imagine the IMF as a doctor.’ Mate, I’ve seen the butchery over the years as patients come to your theatre, and I’m telling you now, I don’t trust you to return me back to full health. By me, I mean as an individual, and not some other benchmark of success. What, what’s that, I need a dose of your expensive medicine? Forget it, I’d prefer to flush the toxins out of my body using simple, transparent water, rather than your big business, federation-endorsed concoction of opaque synthesis. And given my profession, I know what I’m talking about.

As much as I’d like to take a literary punch at the banks here, unfortunately, with the systems of governance in place globally, I think the IMF has failed in its duty to also implicate national governance, but hey, ain’t the IMF just an acronym for Internalization of Money Forever? Or was it Indefinite Manipulation of Finance, or In-the-club Mercenary Front? I can never get it right.

It may be fair to say that what we are about to witness is yet another rape of the taxpayer, and there is nothing we can do about it. What riles me most is that we see the surviving banks back at profits approaching levels not seen since it all fell through – at a global cost of some $23 trillion – and that now back in profit, they are reluctant to give back any of their profits… does not this reinforce the many comments concerning how they still have many troubles that the public cannot see, and that they see many troubles to come? I mean, they are reputed to be some of the sharpest knives in the drawer. Does it not also suggest that having fed a frenzy of ‘wealth-creation’ that raised the cost of living ridiculously, and then having this bite them in the arse, it is a case of once bitten, twice shy?

And then we have all these high-cost assignations for the political and financial elite… discussing how best to get their stories synchronized prior to giving their alibi to the public. We have had calls to spend more of the wealth saved during the good times, to prepare for austerity packages that will affect our lives, and then now, being told that the money men may want more of what we have, and will – hopefully – earn in the future. Come on!!! When will this madness stop? It is obvious that lies have been told about true liabilities, and that more are likely to come. The public gave you what you said was enough, and that should be it. Why not start pumping some of the money taken back in – oh, that’s right, that borrowed at low rates, you stick in government coffers for a much more rewarding interest rate that the taxpayer does not have the same access to, but which gets you out of the mire that the taxpayer is left to sink in.

Those that saved in the good times are now thinking of what will keep their retirement happy, and so with near zero interest rates policies, are not about to spend. Those that did not save – I’m primarily thinking of the young here – fear for the bread on the table the next day, and so will not spend. A look at the S&P companies reveals that they are hoarding more dosh now than at any time since the early sixties – something over $1.5 trillion. One can infer from this that they are not spending. If anything, this money is due to efficiency measures – that’s layoffs and off-shoring to the layman. With the ever increasing layoffs in the West, house repossessions and slow social breakdown, how is that the indices are looking so healthy, and the banks so profitable? Well, it’s not because of the claims that low interest rates help to keep property prices slipping too much, banks going under at unprecedented speed – thanks Malcolm14 for keeping on top of that one – or to help exports.

With the spectre of QE2 around the corner – an easing of credit that many argue will not help, and which many do not want – it remains to be seen what, if any, difference this will make to the next few years. The cynical amongst us may question if there are ulterior motives to the current modus operandi. Should anyone be curious, the first round of QE saw something approaching $10 trillion of tax payers money put into the pockets of big business and banks via the QE programs that, helping them, enabled the tax payers who stumped up the first time, to be laid off from the very companies that they, probably unknowingly, gave money to in the first place. And now the elite are proposing that we do it all over again.

Stop, I want to get off.

That is capitalism for you! Can we do anything about it? There are already rumblings in Europe.. but what will striking do? Sure the voice of the people will be heard but they will still go ahead with their decisions behind closed doors. Maybe anarchy is just around the corner!

Each man for himself I am afraid, but at least we have the opportunity to make a difference for ourselves if we can crack the nature of the markets... an opportunity given to us because of capitalism and the free markets.

Have a great evening!

Yesterday FED's POMO got $5,190bln, straight into the markets. That's one of the tricks how you got those ultra-healthy indices.

Just curious, what profession are you in?

Well, happy to announce that the safari fund is intact, and TPs taken. Can now hit the Savannah without the worry.

http://www.forexfactory.com/showthre...21#post4028821

Profession - chemistry.

Final thought for the following few weeks, it is kindling in the back of one's mind: What if the US deliberately lowered the dollar to such a point that imported goods - China in particular - could no longer be affordable by a well educated population that is not too bothered with the rest of the world, and much prefers to purchase made in America. Could this lead to the rapid reduction of US debt to China, and with inflation, help that trade balance disintegrate?

Perhaps the Chinese see this, and why they are busy buying debt elsewhere.

Have a great few weeks, and hope we all see 1.64 in the not-too-distant future.

45Condor

My TPs were set to the 1.5950 level.

http://www.forexfactory.com/showpost...&postcount=589

Hi All,

Sorry for not posting much over the last 2 weeks...I have been less active scalping intraday and instead letting some medium term Long positions run there course...Im Scalping occasionally throughout the day but GU is proving hard work with its long periods of choppy sideway trading and sudden breaks.

I have posted a few charts showing my current veiws on GU....We are at last year daily range support (5916/ 1.6036) now acting as resistance. I expect us to spike through this area after forming a distribution around the 1.60 zone maybe to the top of the 4hr channel and form a higher daily high before retracing and exiting last years daily range....the daily and 4hr chart probably explains it better. If we can break above 1.6036 and hold next target is 1.6262 daily hig vol resistance.

Until the daily/ 4hr stops making higher highs or starts forming lower lows there no reason not to assume upside potential to 1.68 medium to long term.

I want to say thank you to Condor45 for keeping the interesting posts flowing in my absence...nice work mate

Stocky

support at 5815 seems to be holding for now...with the 15min forming a series of dojis it makes sense to think we may bounce of old hourly resistance now support 5815....especially with yesterdays thick bell profile looking tough to break through..... Im still a bit cautious of them single prints at the bottom of yesterdays profile.....not unreasonable to think we could spike down to there to take out weak longs before attempting resistance at 1.6015....I have taken a few 20pip scalps of 5915 and have a position running currently with a tight stop...should it get taken out I will be looking to re-enter long aroung 5830/50 where them single prints are located unless strong reversal signal are given.....Unlikely given we are going into london close.

Stocky

http://www.forexrainbow.com/files/4l...zzk3uvv1f0.gif