EurAnalysis

Tripple or more I guess....

Yes sir. Depends which TF you look at.
Enjoy the weekend Swede.
Cheers
PT

Good you shorted the euro. You're already in the green. Euro right now at 1.3370 and falling.

Enjoy the weekend
Cheers
PT

Looking at the 5M. I also broke a trading rule today of not trading in a friday. Couldn't help shorting at the third tap of 1.3510 and closed it just before my broker went of line for 120 PIPS. Not sure if I should cry or laugh.

We also got a nice rejection pattern on H4->M15 and a weekly doji. Now lets see if we can get out of the rising channel next week.

Have a good weekend everyone.

PT -- I see you made it to 4. What took you so long, you have been here for at least 6 weeks.

Consumer credit drops for first time in 11 months





http://www.marketwatch.com/story/con...ths-2011-10-07

exactly thats what im worrying about too.. are we out yet or not?
we may not be, those last hour buying got me worried

You would think this was a good thing...everybody saying "I need to get my fiscal house in order"...but you know this is a bad thing.

Before an earthquake, birds start flying in strange patterns. The American consumer acting sensibly is a very strange pattern. Something is very wrong.

The Euro's like the ice on the pond during early spring. You can count on it cracking.

Seriously, without this unending supply of bad news backed by real problems, the Euro would be at 1.60. Most of the fundamentals are in the Euro's favor. The US loves printing, the EZ hates printing. The US has a very high trade deficit, the EZ has a much more reasonable trade deficit. US leaders stonewall each other, EZ leaders talk to each other. Public debt is higher in the US and lower in the EZ. The US is suffering from war, the EZ is suffering from peace.

The list goes on. But still, I am going to short the Euro. One nuclear bomb trumps a hundred conventional weapons.

I go play 18 holes of golf..... I haven't played much in the last year. I did manage a sorry 77 on a par 72 today, but that was below my norm.
Anyhow, there seems to be alot of shiznik been going on up in PT's house.

Since I am jonesing from the thread,

thought I would share a few thoughts( disclaimer:these are opinions, unheeded facts, and even cowpies!

1. Gold is in a bubble. Fact one- it is a commodity. Fact two- price will be whatever we agree to pay for it. Fact three short position was $1700, even as it spiked to $1900. I will go out on a limb and say good level for gold........around $800/ ounce. It has become a fiat currency made of metal. How may you say? How much gold is there available to buy? What would happen if all the sheeple in ETFs and certificates decided to take possesion of gold? Whole dump truck of poop hit fan!

Remember never trade more than what you can ride out and beat Mr. Margin Call.

2. Guys do not question if you can or should trade, just trade! whether demo, live mini or live standard ...trade ...you will learn from experience.
Take losses no more than 1-2% of account value.Save it to play for another day. Confidence took me 2-1/2 years to learn and losing $30,000+ in one day pretty much put me in a position to not love the idea of trading, but to love trading, good and bad! Remember, it's just money......Helicopter Ben can print more!


Remember never trade more than what you can ride out and beat Mr. Margin Call.


3.PT, Ummmm, my trade at .3513 was put in at 11:00 EDT today.....so some discrepancy of who stalking who!

4. Disclaimer on the gold crap above!!!! This is Euranalysis so that's all I got to say about that.

5. I do realize that Greece is still in trouble, and there are no other debt or sovreign issues in EZ!

6. Watch your charts, trade your sentiment and strategy... and pshaw to people from EURUSD thread that show up and post:
Sell at 1.11675 or buy at 1.6300. and then disappear!

7. Remember to tip your waitress and bartenders and leave PT a pat on the back and a voucher if able every once in awhile


Good night! There is another sleep-deprived week ahead!

I didn't see any buying in the last hour. I saw a rejection of 1.3407 and then a drop.

Edit: there is a long way to the lower trend channel though

Forex is an addition, just like any other. So be a smart addict, and figure out how to keep a steady stream of the good stuff coming for years into the future. The best plan is to start small and then get good. You can only crash and burn so many times before the real world will start to interfere with your drug of choice.

We are all bums on the street, but not all of us have bottles.

I rarely post my analysis here and I owe piptrapper for doing so on my thread, so it is only fair that i do so here.

I have one gann fans chart, and one simple chart.
On the gann one, for those unfamiliar with them, just gauge them as support/resistance. Mid-angles are the 50% gann angle. Above means bullish fluctuation, below means bearish fluctuation.

The other one ichimoku with other basic knowledge.

All i can see is accumulation now, so i might take a break from trading on the early days next week, wait till price accumulates enough charge to release momentum.

PipTrader

The below is dedicated to your fine style in approaching trading and life:

You will not make money long term until you know enough about your personality to find a trading style that is compatible. You need to be able to follow your rules comfortably, allowing you to enter and exit trades with minimal or no uncertainty or anxiety. Once you have mastered a method of trading, if you feel stress while trading, then either you haven't yet found your style or yourself.

For me this is the key and core of successful trading. I am working on it. And I wish all my mates (you all know who you are) to be able to grasp it.

mla

Buma,

Thanks for posting your gann fans chart. I would appreciate regular updates on this if you feel up to it. I am sure it will be of great help to me and other members of this thread.

Thanks again & Cheers,
PT

mla,

Thanks for your comments.

I am sure that they will be an inspiration for many who read them. They certainly are for me.

Cheers
PT

Will we see the Euro depreciate more in the coming weeks?

We just need more bad news or less hope from the EZ. The way things have been going lately, I am sure we will be seeing more of it.

Greece will most likely not get bailed out under the current arrangements, but rather go through some form of (attempted) controlled default. I am not sure how they can control it as when panic hits the markets, nobody can hold the floodgates closed. Such a situation will be very euro negative. Liquidity or not, there will still be fear of bank failures because no matter how much liquidity the ECB makes available, if a bank has to write down bad debt, they can no longer use it as collateral to borrow from the ECB. Those banks will have to be re-capitalized by the governments thereby putting those governments in more debt and most likely causing the rating agencies to downgrade them further. It's a downward spiral that is just itching to happen.

Furthermore, even if we do not see negative news from the EZ, we will almost certainly not see much positive. Therefore there will still be a certain level of risk aversion in the euro area. This will prevent the euro from gaining much value even in the event of equity and commodity market appreciation due to any possible improvement in the other developed world economies.

I will be very closely monitoring the yields of EZ government bonds from here forward and paying close attention the CDS (Credit Default Swap). I suspect now that Italy and Spain have been downgraded and that Portugal and Belgium have been put on negative outlook and review, it will not be long before one of the dominoes falls over and starts a chain reaction.

All this talk by politicians may be buying some time as it feeds the desperate hopes of current stake holders, but it is certainly not attracting new ones. Therefore it is a negative sum game. All they (the politicians) are managing to do is to control the meltdown. However, no matter how much they try to control it, it is still just that, a meltdown, and there are no viable solutions to the underlying problems in sight. There are only brakes which are not 100% effective and they never will be until the EZ hits bottom and everybody is done licking their wounds.

Once the dust settles and all stake holders have taken their losses, then and only then will we start to see a decent credible recovery in the EZ. Till then, any perceived recovery has no solid legs to stand on.

That's how I see it.

Cheers
PT

I surely and happily will, my good friend

Excellent fundamental analysis of the problem, PT (as always).

I just got an idea - maybe we shall look for some other possibilities of the EZ prolonging this hope period? Its not like I am no longer bearish - but, as they say, expect the unexpected, and Greek default - orderly or not - is expected. Right now I am trying to think, what would be the unexpected option.

So, trying to find things that may slow down our "doom the Euro" plan, I came up with a thought - can sth similar to Operation Twist get introduced in Europe, for example Italy? (I really could not find any single thing, that would help Greece, but PIIS may still fight, and keep trying their best). After all, this is a way of lowering costs of debt without printing money and affecting balance sheets, am I thinking correct?

Btw, how do we rank PIIS as a problems for Eurozone ? I mean, for sure Greece was, is and will be the main actor of this tragedy, but what about the others - who is the second greatest problem, and who the third? And, what can PIIS do to make their situation better?

Bears looking for positive aspects - it may sound strange, but I prefer to have some analysis on possible threats for bearish movement, since the reasons for it are quite well known. 'Greece won't default' sounds like 'water is dry' or 'white is black' to me.

So, any ideas ?

Blobik,

You are absolutely correct. We should expect the unexpected. Some form of Greek default is expected.

Unfortunately, the only thing that is unexpected now is the survival of the EZ as we know it today. If it does manage to survive as we know it today (with all 17 members still in as independent sovereign nations), then really nothing has changed. The debt will not disappear and the banks will still be at risk and they will still expect the governments to bail them out.

As far as something similar to operation twist for Italy or Spain or any other member with a high default risk, that does not solve any debt problems nor does it directly reduce the debt to GDP ratio.

In the US, the FED can print as many $$$ as they want so they are holding a very significant amount of government bonds on their balance sheet. Therefore they were free and able to sell short term bonds and buy long term bonds in such amounts as to make a significant impact on the yield curve. This was done to flatten out the difference in yields between the low yield short term and the higher yield long term in order to create an incentive for the banks to actually lend out the money in their reserves instead of parking it at the FED for a good rate. This was economic stimulus.

The ECB is not in the business of printing Euros. The liquidity that exists is what exists and that's it. It they did any kind of quantitative easing (printing Euros), it would only be as a last resort measure when all other options are exhausted and even then they will come under tremendous fire from the Bundestag and some other northern European governments.

For economic stimulus, the ECB can play with the rates. They didn't lower them at the last meeting because they are still concerned about inflation. Europe is not officially in a recession yet and in the ECB's opinion, triggering a rate drop now, while it is already historically low, is not within their mandate. Their mandate is price stability. A rate drop now may increase inflation and since Europe is still quite scared of the prospects of hyper-inflation, they are very averse to rate drops while inflation is above target.

Anyway, as such, in Europe government bonds are not mostly held by the ECB but rather by private institutions (banks, insurance companies, etc.). The ECB, according to treaty, is not allowed to purchase government bonds on the primary market because doing so would expand the ECB's balance sheet which would amount to quantitative easing. Therefore it is the private lenders who bid for the bonds. Therein lies the problem.

In the US, if the US government were to face a default because they didn't have enough money to pay out a bond that is maturing, they just ask the FED to buy a bond from them equal in value to the maturing bond. Voila.. Instant money out of nowhere. Europe cannot do that, so if a government in the EZ cannot pay a maturing bond, they are screwed. ipso facto.

So, the unexpected move out of all this is for the ECB to purchase government bonds directly from Italy or Spain rather than buying them up on the secondary markets like they have been doing lately. However, because the ECB has to in turn sell other bonds that they may be holding in order to not create quantitative easing, they would effectively be selling off good debt to buy bad debt (This is not something any bank should be doing if it is to survive). The only reason they are buying up Italian and Spanish bonds on the secondary markets is because they are buying them at a discount and they eventually sell them to the EFSF or the ESM at full price once those mechanisms are in place. The EFSF and ESM are funded by the governments and not the ECB. In other words, the ECB will profit from this and the taxpayers will incur more debt. Therefore, the problem worsens as the governments get deeper into their debt crisis.

So, the only way out of this is for the taxpayers to stop paying for their government's bank bailouts and allow the banks to take a loss just like any other business is supposed to do. That is what capitalism is supposed to be. If a country cannot pay its maturing bonds, then the bond holders should pay the price of the loss and not the tax payers of all of the EZ member states. After all, it is the bond holders who are being paid interest to take the risk, not the taxpayers.

In conclusion I am sorry to say that the unexpected is far worse than the expected.