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Cable Update (GBPUSD)

  • #279,241
  • May 16, 2011 7:34am May 16, 2011 7:34am
Quoting _BBKing_
I'm leaving my sell stop at 1.6163. Maybe New York will show us the way.
Gone to a better place
  • #279,242
  • May 16, 2011 7:37am May 16, 2011 7:37am
Quoting smikester
I'm leaving my sell stop at 1.6163. Maybe New York will show us the way.
I am confident Cable is going south, either NY or tomorrow
  • #279,243
  • May 16, 2011 7:42am May 16, 2011 7:42am
Slow markets before US news. Watching 15min 200ema with interest for another possible short which is sitting on resistance zone and daily 61.8 retrace at 6235-45
  • #279,244
  • May 16, 2011 7:44am May 16, 2011 7:44am
Quoting Phil Warran
I am confident Cable is going south, either NY or tomorrow
I think most everyone does share this view. 5900-5940 will be on next. However the deal is that maybe before the downside expands, we will do some retrace up to 6320 for instance.
  • #279,245
  • May 16, 2011 7:46am May 16, 2011 7:46am
The moment couldn't be better to consult Mr. Druckenmiller, who almost never gives interviews but is willing to speak up now because he thinks that fears about using the debt-limit as a bargaining chip for spending cuts are overblown—and misunderstand the bond market. "The Treasury borrowing committee letter speaks about catastrophic financial crises, comparing it to Fannie and Freddie. That's not what we're talking about here," he says.

He contemplates the possibilities for bond investors if a drawn-out negotiation in Washington creates a short-term problem in servicing the debt but ultimately reduces spending:

"Here are your two options: piece of paper number one—let's just call it a 10-year Treasury. So I own this piece of paper. I get an income stream obviously over 10 years . . . and one of my interest payments is going to be delayed, I don't know, six days, eight days, 15 days, but I know I'm going to get it. There's not a doubt in my mind that it's not going to pay, but it's going to be delayed. But in exchange for that, let's suppose I know I'm going to get massive cuts in entitlements and the government is going to get their house in order so my payments seven, eight, nine, 10 years out are much more assured," he says.

Then there's "piece of paper number two," he says, under a scenario in which the debt limit is quickly raised to avoid any possible disruption in payments. "I don't have to wait six, eight, or 10 days for one of my many payments over 10 years. I get it on time. But we're going to continue to pile up trillions of dollars of debt and I may have a Greek situation on my hands in six or seven years. Now as an owner, which piece of paper do I want to own? To me it's a no-brainer. It's piece of paper number one."

…Mr. Druckenmiller says that markets know the difference between a default in which a country will not repay its debts and a technical default, in which investors may have to wait a short period for a particular interest payment. Under the second scenario, he doubts that investors such as the Chinese government would sell their Treasury debt and take losses on the way out—"because I'll guarantee you people like me will buy it immediately."

Now suppose, Mr. Druckenmiller adds, that he's wrong. If the market implodes on day two of the technical default, Mr. Obama and Congress would be motivated to finally come to agreement. But he doesn't expect such market chaos. "My guess is that the bond market would rally as long as it believed the ultimate outcome was going to be genuine entitlement reform—that we wouldn't even have to find out about a meltdown because it wouldn't happen. And I have some history on my side here."

…Mr. Druckenmiller had already recognized that the government had embarked on a long-term march to financial ruin. So he publicly opposed the hysterical warnings from financial eminences, similar to those we hear today. He recalls that then-Secretary of the Treasury Robert Rubin warned that if the political stand-off forced the government to delay a debt payment, the Treasury bond market would be impaired for 20 years.

"Excuse me? Russia had a real default and two or three years later they had all-time low interest rates," says Mr. Druckenmiller. In the future, he says, "People aren't going to wonder whether 20 years ago we delayed an interest payment for six days. They're going to wonder whether we got our house in order."

…Mr. Druckenmiller is puzzled that so many financial commentators see the possible failure to raise the debt ceiling as more serious than the possibility that the government will accumulate too much debt. "I'm just flabbergasted that we're getting all this commentary about catastrophic consequences, including from the chairman of the Federal Reserve, about this situation but none of these guys bothered to write letters or whatever about the real situation which is we're piling up trillions of dollars of debt."

He's particularly puzzled that Mr. Geithner and others keep arguing that spending shouldn't be cut, and yet the White House has ruled out reform of future entitlement liabilities—the one spending category Mr. Druckenmiller says you can cut without any near-term impact on the economy.

…Some have argued that since investors are still willing to lend to the Treasury at very low rates, the government's financial future can't really be that bad. "Complete nonsense," Mr. Druckenmiller responds. "It's not a free market. It's not a clean market." The Federal Reserve is doing much of the buying of Treasury bonds lately through its "quantitative easing" (QE) program, he points out. "The market isn't saying anything about the future. It's saying there's a phony buyer of $19 billion of Treasurys a week."

Warming to the topic, he asks, "When do you generally get action from governments? When their bond market blows up." But that isn't happening now, he says, because the Fed is "aiding and abetting" the politicians' "reckless behavior."

"I think technical default would be horrible," he says from the 24th floor of his midtown Manhattan office, "but I don't think it's going to be the end of the world. It's not going to be catastrophic. What's going to be catastrophic is if we don't solve the real problem," meaning Washington's spending addiction.


With last week’s Treasury auctions settling Monday (today), the game is afoot.
  • #279,246
  • May 16, 2011 7:51am May 16, 2011 7:51am
and I want GU to go up to 1.6280-1.63 and then short the next 300 pips from the 1200 down move

so I'm up to 1.6280

news will tell anyway if we go up or down ....for a while
  • #279,247
  • May 16, 2011 7:52am May 16, 2011 7:52am
Quote
and I want GU to go up to 1.6280-1.63 and then short the next 300 pips from the 1200 down move

that's a very healthy idea actually!
  • #279,248
  • May 16, 2011 7:53am May 16, 2011 7:53am
Quoting ruffryders
that's a very healthy idea actually!
we;'ll see what the news bring us
  • #279,249
  • May 16, 2011 7:59am May 16, 2011 7:59am
Quoting josef
I have a long entry at 1.6175.

GU will go up... it will!
Closed with + 30 pips
  • #279,250
  • May 16, 2011 8:08am May 16, 2011 8:08am
Quoting redbeben
and I want GU to go up to 1.6280-1.63 and then short the next 300 pips from the 1200 down move

so I'm up to 1.6280

news will tell anyway if we go up or down ....for a while

so now to 1.6280 than 1.59x level and than 1 month steady up to 1.67x?
  • #279,251
  • May 16, 2011 8:09am May 16, 2011 8:09am
http://www.foxnews.com/world/2011/05...est=latestnews

Tuesday is the day for the visit hopefully a non-event for sure, but still need to be on the watch.
  • #279,252
  • May 16, 2011 8:11am May 16, 2011 8:11am
Quote
so now to 1.6280 than 1.59x level and than 1 month steady up to 1.67x?

Not rock solid. GU has seasonality factor kicking in, in Apr-May it kinda tends to
top out and then decline for a while, so @ 59 test of the quarter pivot, and depending on PA there we wil see.
  • #279,253
  • May 16, 2011 8:19am May 16, 2011 8:19am
Quoting sphinx8
so now to 1.6280 than 1.59x level and than 1 month steady up to 1.67x?
1.6280 is for sure
I cannot guarantee any 1.59 level as that one should be the last stop down for now
first 1.65-66 and later down again
  • #279,254
  • May 16, 2011 8:21am May 16, 2011 8:21am
Quoting w4rrenminded
* valid d0wntrendline ( red )
* br0ken uptrendline ( yellow )
* passing Ema 20 + Ema 50 , testing Ema 100 ( seems b0unced )
* tested Dec 12th - April 28th 23.6% fib0 ret & rejected ( magenta ). n0w sitting 0n 38.2%
* { might be t00 early } b0th Pitchf0rk ( aqua ) & fib0 ret April 28th - May 13th ( yellow )

my flash silly c0nclusi0n
* lil upm0ve is reas0nable en0ugh in 0rder t0 test > yell0w trendline -and 0r- 23.6% yell0w fib0 -and 0r- Ema 50
70ish f0r n0w, c0uld be m0re by latest US news, pipping smart f0lks
spirit 0f pipping
  • #279,255
  • May 16, 2011 8:25am May 16, 2011 8:25am
Quoting redbeben
1.6280 is for sure
I cannot guarantee any 1.59 level as that one should be the last stop down for now
first 1.65-66 and later down again
hello REd, good to see you. thanks for your posts

sorry for my stupidness, I need to get the order right (not entry order)

now we are on the way to 1.628xx after that? drop to X ? and after to 1.65?
correct?

or you mean 1.628 to 1.65 and than drop?
  • #279,256
  • May 16, 2011 8:57am May 16, 2011 8:57am
Quoting sphinx8
hello REd, good to see you. thanks for your posts

sorry for my stupidness, I need to get the order right (not entry order)

now we are on the way to 1.628xx after that? drop to X ? and after to 1.65?
correct?

or you mean 1.628 to 1.65 and than drop?
hi there

1.628 as for now
then a drop but not lower than 1.59
then move up to 1.65-66
  • #279,257
  • May 16, 2011 8:58am May 16, 2011 8:58am
i foresee it will go down to 1.54
  • #279,258
  • May 16, 2011 9:02am May 16, 2011 9:02am
Quote
redbeben

very clean thinking, I actually second your thoughts, however @ 59 depending on PA we could either slide lower or retest recent highs, just kinda depends on how PA will handle that area.
  • #279,259
  • May 16, 2011 9:08am May 16, 2011 9:08am
Quoting ruffryders
very clean thinking, I actually second your thoughts, however @ 59 depending on PA we could either slide lower or retest recent highs, just kinda depends on how PA will handle that area.
ruffryder for life
  • #279,260
  • May 16, 2011 9:21am May 16, 2011 9:21am
Don't know how it's gonna end but i'm long @ 1.6223 with tp 2 1.6323.
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