vsa with Malcolm

Quite a few all time records getting and looking like getting broken, we are in a highly unusual market environment currently...

Maybe this might have something to do with it?

Source: http://www.minyanville.com/businessm...598/from/yahoo

The FDIC closed three more community banks last Friday. The total number of failures for 2010 is now up to 132 on the way to my predicted range of 150 to 200 for 2010. There are the five failures so far in the fourth quarter. The FDIC Deposit Insurance fund has now been drained by $3.0 billion in the second half of the year to date, which brings the DIF deficit to $18.3 billion. The FDIC has already burned through the assessments for 2010. The assessments for 2011 and 2012 have been pre-paid at $15.33 billion per year.
During “The Great Credit Crunch” the FDIC only closed 25 banks during all of 2008. In 2009 the FDIC picked up the pace with 140 bank failures with a peak of 50 in the third quarter of 2009. So far in 2010 the FDIC closed 41 banks in the first quarter, another 45 in the second quarter, 41 for the third quarter, and five for the fourth quarter. The total for “The Great Credit Crunch” is up to 297 continuing its path to my predicted 500 to 800 by the end of 2012 into 2013.

The three failed banks last Friday (15th Oct) were private banks with extreme overexposures to construction & development (C&D) and commercial real estate (CRE) loans. C&D exposures were 366%, 849% and 1,109% versus the 100% regulatory guideline. The CRE exposures were 1,186%, 1,824%, and 2,097% versus the 300% of risk-based capital regulatory guideline. These banks had CRE loan pipelines that were 100%, 96%, and 96% funded versus a healthy pipeline of 60%. The FDIC List of Problem Banks remains 829.

Here are some statistics from the FDIC for the Second Quarter 2010: We ended the second quarter with 7,893 FDIC-insured financial institutions, of which 1306 are publicly-traded:

•1,172 of all community banks (14.8%) are overexposed to C&D loans.
•1,432 or 18.1% are overexposed to nonfarm / nonresidential real estate loans.
•2,504 or 31.7% are thus overexposed to CRE loans.
•1,317 or 16.7% have a real estate loan pipeline that’s 100% funded.
•2,622 or 33.2% have a pipeline that’s between 80% and 100% funded.
•3,939 of 49.9% of all banks have a pipeline that’s 80% or more funded. So half the community banks in America remain overleveraged to CRE and the possible losses remain about $1.5 trillion.

We Need to Stop Ben Bernanke’s Madness

The Federal Reserve will take new action called quantitative easing II (QE2) to boost the economy because inflation is too low and unemployment is coming down too slowly.

The US is lucky to have an inflation rate of just 1%. What the Fed is doing is fueling commodity speculation, which leads to inflation, when Main Street, USA, struggles with reduced incomes and a higher cost of living. The Fed is helping Wall Street get record bonuses while not helping the foreclosure mess on Main Street. Let me reiterate my opinion that the federal funds rate should never be taken below 3%; when it is, bubbles are created, which filters down to problems on Main Street.

The foreclosure mess is hurting bank stocks and will slow an already depressed housing market. Way back in March 2007 I stated that you cannot have a bull market for stocks with a bear market in financials. Housing stocks peaked in July 2005, community banks peaked at the end of 2006, and regional banks peaked in March 2007. The Dow peaked above 14K in October 2007.

With 50 state attorneys general investigating the mortgage servicing industry and foreclosure procedures the foreclosure mess will be with us most likely through 2012. Keep in mind that most of the mortgages involved in the foreclosure issues are sliced and diced into mortgage-backed securities, and as investors see performance deteriorate, they'll look for Wall Street to buy them back. What a tangled web this phase of “The Great Credit Crunch” will be. Fannie and Freddie may line up to sell mortgage securities back to Wall Street.

Does not bode well, so much for the "green shoots"

Thanks Malcolm! I thought it was, but wasn't too sure. I know you like to look at stocks and you did mention in the past that looking at Caterpillar is a good indicator for manufacturing in general.

I didn't know you also looked at ETFs. Do you use these for longer-term investments or just to guage the markets?

Unfortunately not... Here is another good read that paints a terrible picture. Even states that gold could reach $10,000 (Misprint in the article which states $100) -

http://www.minyanville.com/businessm.../2010/id/30855

Thanks for posting b

The thing is, we know the politicians are just figure heads, not saying I'm a crank conspiracy theorist, but you have to wonder at what the real agenda is, such diabolical mis-management of the economy is no accident in my opinion, interesting read...

EU M15
Top reversal, but no other signals yet, and big spike last night...

1H says up EU, but meh. Stop is a bit too wide for my liking now. The silly shake out type thing took care of weak longs for sure. Anyway, I'm gonna be in observe only mode today. Better not break my own rules!

4H looks bad though. A bit whipsawy. Could be a range.

From a vsa point of view can anyone explain the friday the 15/10 spike up to 1.1460 and the 2 day sell off down to 1.3700.

Most of the volume seems to be on the second leg down to 1.3700.
Does this mean they sold into the top and took profits from the previous few weeks up move.?
Did they continue selling for 2 days ?
Or did they start re accumulating on the move to 1.3700.

I feel understanding these 3 days could give an idea as to what may happen next.

If from vsa point of view you say it looks like they kept selling down to 1.3700 then would that suggest they are now building a short position?
The upmove did seem to be on low volume.
If it looks like they were buying into the final move to 1.3700 then it could indicate they are building a long position.

Taking into account they may know how much qe2 is estimate 500billion but also knowing it is likely to be introduced in smaller quantities over a period of time.

Or do you think they are distributing there positions awaiting confirmation on qe measures before they start building positions?
Maybe that explains the tightening range ?

Any help with the analysis is greatly appreciated.

Today no trading for me becouse i didnt see any good volume to trade,i just see third retrace from mini chanel EURUSD D1 and i think as i said last week we can check 1.3400-1.3000,we will see...



This is current situation :


Cheers

Petar

Looks like I was wrong. Lowish volume in European session, but high volume in US session now. Looks like stopping volume on 15m. Anyway, gonna be back tomorrow.

E/J forming a nice round top on the weekly so watch for a big drop here. It will be real nice to see a pullback so we can pack it on, but I will take it either way.

Jim

err ... folks

do u think we could get some vsa charts up for usdjpy ?

thanks

Well, Hindsight is aLWAYS 20/20 , if my memory serves me right ,
during what they are now calling the March Lows. When it looked
like the DOW was heading for DJ-1500(lol) and the unemployment
rate was going for 35%, Foreclosures was out -of-control, banks going
belly up every 15 minutes.

Every so-called MR conservative investors(no government invention) and
their mama was screaming and begging for the government to do
something..BOY, was i disgusted looking at the folks crying on T.V .lol

Yeah..JIM Cramer too--with his--"THEY KNOW NOTHING CHANT"



Its funny, how all of sudden DOW JONES is at 10,000 + , now we
can all forget how we almost peed in our pants..lol

its feels good when you don't get to experience the alternative.

Just saying....

petar do not take offence to this .... you do awesome but you are no vsa trader that is for sure. You have a lot to learn yet.

today was awesome on eu , gu and au , ES played right into my hands also

eu had no demand on 15 min at 3950 , fridays high .. could not get easier then right down to days range low...simple

Btw we have Cup and Handle on GU Daily and its volume pattern looks really good.

aud rates tonight..weakness already there

watch for ut etc right before rates .. this trade should yield 100 to 150 pip

gu done like dinner...

we may get a psike above the upper channel to shake out weak sellers but there is a no demand day today

seller on news
then up move to retest supply zone . also fridays high
then sell when sellers hit at 3950 under the prior price level that sellers hit

days range completed at 1.3860 , tp was set 3870 , 10 pip above days range ...

I like how neutral you are ))

I thought of today in the same way - no demand. first i though well germany and some other EU contries on holidays so volume is low but then if someone really wanted to drive pound higher, today would've been the day... and isnce there was no interst to the upside I guess only one other option remaining)