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EurAnalysis Kindergarten 24 replies

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  • #4,581
  • Oct 22, 2011 7:07am Oct 22, 2011 7:07am
http://www.financialsense.com/contri...ee-time-frames
  • #4,582
  • Edited 7:12am Oct 22, 2011 7:10am | Edited 7:12am
http://www.321gold.com/editorials/sf...rtt102111.html

http://www.321gold.com/editorials/sf..._sentiment.gif

Gold Super Highway Chart

http://www.321gold.com/editorials/sf...2111/super.gif
  • #4,583
  • Oct 22, 2011 7:23am Oct 22, 2011 7:23am
This was published today in the Finantial Times.

http://www.cnbc.com/id/44996949
Observation is the path to discovery.
  • #4,584
  • Oct 22, 2011 7:58am Oct 22, 2011 7:58am
Quoting Alorente
This was published today in the Finantial Times.

http://www.cnbc.com/id/44996949
The real problem is becoming very clear. Once they write down the loans there is massive losses to be written off by the banks. That has serious side effects such as actual losses to be taken. Then there is the CDS (Credit Default Swaps) Think AIG again and the domino effect. If they do nothing there will be a 100% default.

Bottom line there is only one solution to the problem. By November 4, 2011 at the G-20 in Cannes, France the Emperor's will all be Stark Naked. Then we can shift out focus to the Super Duper Committee of 12 in the USA that must by agreement cut or have forced cut's one year before the next USA elections the first Tuesday in November 2012.

There should be many great opportunities to earn nice profits trading forex if you understand what is really going to happen and how to benefit from it.

Nice to see your posts here.
  • #4,585
  • Oct 22, 2011 7:59am Oct 22, 2011 7:59am
Quoting Alorente
This was published today in the Finantial Times.

http://www.cnbc.com/id/44996949
Yes, I saw that this morning. The money to recapitalize the banks can only come from monitization of the haircut, and haircuts to come. Thus far they have managed to monitize this in USD thanks to Ben the Benevolent. However at some point, the check is going to be paid, and with stagnant growth, you simply can't get away from a EUR rate cut this month. Leading economic indicators around the world are negative.

Yes there was positive economic news such as the Philly manufacturing index, but if you are looking for recessions, true positive and negative, consider the 12 month history of the index.

Oct 10: 1.2
Nov 10: 18.1
Dec 10: 20.8
Jan 11: 19.3
Feb 11: 35.9
Mar 11: 43.4
Apr 11: 18.5
May 11: 3.9
June 11: -7.7
July 11: 3.2
Aug 11: -30.7
Sep 11: -17.5
Oct 11: 8.7

Now, this is a diffusion index of general business activity, read the disclaimer:

Diffusion incides represent the percentage of respondents indicating an increase minus the percentage of responsidents indicating a decrease.

So they ask you, how are things going? Better or worse. They don't use a number system, just yes or no. So things for one person could be huge great, and for another maybe a bit down, and those responses wash out.

Now, lets correlate this index to the ECRI weekly economic indicators. It peaked guess when? April 2011. Look at the chart and you be the judge. It his -10.1 last week.

So where are we heading?
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  • #4,586
  • Oct 22, 2011 8:16am Oct 22, 2011 8:16am
http://www.forbes.com/sites/nathanva...on-settlement/

Snippet:


A federal judge ruled on Wednesday that the approval process for Bank of America’s $8.5 billion mortgage put-back settlement should be moved to federal court, making it more vulnerable to attack from investors and public officials.

William Pauley, a federal judge in Manhattan, said the case must be heard in federal court because it “implicates core federal interests in the integrity of nationally chartered banks and the vitality of the national securities markets.”

Bank of America in late June struck the $8.5 billion deal with 22 big institutions like BlackRock that had invested in Countrywide’s mortgage-backed securities and claimed that Bank of America had to make good on allegedly breached representations and warranties Countrywide made in connection with the quality of the underlying mortgage loans. Bank of New York Mellon, serving as the trustee for many of these deals, moved to get a New York state judge to rule it was acting reasonably in entering into the settlement on behalf of mortgage-bond investors.

But other investors in a relatively small number of these mortgage bonds sought more money by organizing as Walnut Place and intervened in the settlement. It is these investors that removed the case to federal court and for now have won a big battle by convincing Pauley it should remain there. The decision is a setback for Kathy Patrick and her big group of investors who hope to extend the Bank of America settlement to other big banks that underwrote soured mortgage-backed securities.
  • #4,587
  • Oct 22, 2011 8:27am Oct 22, 2011 8:27am
Weidmann says repeatedly expanding EFSF won't resolve crisis

Bundesbank president Jens Weidmann said in a newspaper interview released on Saturday that repeatedly expanding the euro zone rescue fund won't resolve the euro zone crisis.

In an interview with Bild am Sonntag released ahead of publication, Weidmann also warned against giving the European Financial Stability Facility (EFSF) a banking license. He said that would be a fatal path to take if states were able to switch on the printing presses...
Those who say it cannot be done should not interrupt those who are doing it
  • #4,588
  • Oct 22, 2011 9:10am Oct 22, 2011 9:10am
Hey Everyone

Fellow trader from Australia, just joined but have been following forum for a while and its nice to finally join you guys and share some output.

For next weeks outlook I definitely see a bullish sign.

As I've just become a member I don't seem to be able to post any of my charts (please let me know if I could).

I will be making purely short to medium term notes as fluctuations as trading a long term position is much harder to deal with for most without risky large % of capital when setting SL.

Basically to me it seems that from 4H charts a triangle has been broken upwards. This is further seen when we go to 1H charts where triangular resistance was broken at 1.3830 and then it became a support when it was touched again but could not break through as such continuing its uptrend to current position. Furthermore you can use 3/4 October as symmetry to continue its upwards trend.

When looking at daily charts the previous 5-6 days can be identified as the 4th retraction wave in Elliot's Theory, with second wave occurring on the 7th October. This 4th wave has just been broken highlighted by the triangular pattern previously stated and first resistance is seen on weekly chart at around, 1.4280-1.4300. This resistance area is also assisted by a medium moving average 20. I see this area as the 1-2 week target with many heavy resistance factors stated and also the end of the 5th wave, thus ending the entire upward trend.

If this resistance is broken then we're looking at 1.4500 range in a month or so with heavy resistance from 2 upper trendlines.

Furthermore you use Using the 3/4 October as symmetry

So in conclusion depending on your trading outlook, long or short term opportunities to buy may be easy or hard to find depending on your trading style as in your risk to return level (how much SL your willing to set). With the structure I have going looking at 5:1 in the short run I'm definitely looking to buy long when a short term opportunity presents itself on Monday.

Also really sorry if this post seems really vague and unclear, I really don't know/have the option yet to post graphs to make this explanation a lot clearer. Looking forward to posting with you guys a lot more in the future.

Thanks and good luck for the week!
  • #4,589
  • Oct 22, 2011 9:35am Oct 22, 2011 9:35am
Quoting walb99
keep an eye on italian 10-y bond yields
What are you looking for ? As the Yield goes up the bonds are being sold. Where do you see a danger area or do you see it in another way. Where will the funds go after the bonds are sold ? Thanks for your post.
  • #4,590
  • Oct 22, 2011 10:30am Oct 22, 2011 10:30am
Quoting Onitay
Hey Everyone

Fellow trader from Australia, just joined but have been following forum for a while and its nice to finally join you guys and share some output.

For next weeks outlook I definitely see a bullish sign.

As I've just become a member I don't seem to be able to post any of my charts (please let me know if I could).

I will be making purely short to medium term notes as fluctuations as trading a long term position is much harder to deal with for most without risky large % of capital when setting SL.

Basically to me it seems...
Welcome to the thread
If there was easy money lying around,no one would be forcing it into your
  • #4,591
  • Oct 22, 2011 10:56am Oct 22, 2011 10:56am
1. Knoholy, as I got confused by the article predicting upward move towards 1.40-41, are you sharing this view? Just curious on sentiment

2. I am certain, that EUR will be foced to test the 1.30 resistance in the future. But when it happens, it is hard to say. Important thing to consider, is that We may be doing sort of spike that will take us even higher, before collapsing over 1000 pips back to 1.30. I just looked at 2000 pip spike in December 2008 that was completely erased in January 2009, and then the uptrend continued and reached far higher. Maybe dumping truckloads of USDs will have similar effect on downtrend, stopping it until we start again from beginning? Historical performance is not necessary good indicator of future results, buuut... What do you guys think about that crazy scenario?

3. Speaking of USD, what do we know about the backdoor QE program? Maybe someone knows how to get a clue, how much of USDs available to ECB and European banks have already been injected into the market and converted into different assets? (Is this information somehow available?) And, more importantly - how much remain there, to cause further USD declines when dumped...?
  • #4,592
  • Edited 11:22am Oct 22, 2011 11:01am | Edited 11:22am
Quoting AaronWard
The USD is depreciating precisely because people believe that the problem in Europe may be solved.
Which people? It doesn't matter what people in general think. It doesn't even matter what retail fx traders think - that's why those long/short position charts published by Oanda and SaxoBank are considered contrarian indicators. Retail fx traders, as a whole, are usually wrong.

The people who matter are the people who are moving large sums of money around: the bankers and large fund managers. What are those people thinking/feeling and why? That is the real FA question that a trader needs to be asking repeatedly during the course of a trading day/week. The econ indicators that continually report across the front panel of FF may or may not pertain to this underlying question on a given day.

A big wild card is the Central Bankers. They can and do produce capital flows in order to move the exchange rates. When the CB's are intervening, what everybody else is doing/thinking/feeling is much less important or moot.

Simplistically, big money seeks yield or it seeks safe haven. This is the dualistic paradigm that USD pairs and JPY pairs fluctuate in. US treasurys yields are at record lows. Also, there's an oversupply of USD sitting around out there. So the USD gets sold to fund purchases of higher-yielding assets whenever the overall sentiment in the markets indicates that it is safe to seek yield.

re: the euro - I think the market has shown that it can live with the fact that the EMU is broken. It will not flee wholesale out of the euro so long as there is a viable plan to solve the EMU debt crisis. It will succumb to fear if such a plan fails to materialize, or if the plan that is produced is not credible. That is not to say that the euro won't slide. It can go up and down. As the Oanda chart shows, most retail traders think the euro will fall. Definitely plausible. But it is equally plausible that it will not.

If the EMU heads manage to contain the debt crisis. If they do so without cutting rates. If the Fed continues to jawbone further QE and actually implements it. If all these then there is no reason that e/u won't see 1.45 this year. It could push record highs in 2012. Who knows?

Personally, I would not bet against the euro in anything other than the near-term. But I don't have to commit to a bias - I just have to follow the market. If/When I see the euro selling off, I will go short and try to hold for a trending move. If e/u is a mess jumping around in a sideways range, I will enjoy scalping it.

Good luck to all e/u traders in the coming week.
"If The Fool persists in his Folly he will become wise." - William Blake
  • #4,593
  • Oct 22, 2011 11:10am Oct 22, 2011 11:10am
I thought I would ask this question during non trading hours.

I do not understand why when the US Stock market goes green the dollar does not become stronger as was the case on Friday, I would think the US market going green would strengthen the dollar, clearly I am missing the point and the way things work. I would appreciate a little clear education.
It's easy to be humbled but hard to be humble.
  • #4,594
  • Edited 11:33am Oct 22, 2011 11:19am | Edited 11:33am
Quoting Blobik
3. Speaking of USD, what do we know about the backdoor QE program? Maybe someone knows how to get a clue, how much of USDs available to ECB and European banks have already been injected into the market and converted into different assets? (Is this information somehow available?) And, more importantly - how much remain there, to cause further USD declines when dumped...?
This information is not made available publically in real-time, or, if it is, I can't find it.

But it could easily add up to $trillions - hundreds of billions of usd in a month or even during a single week.

http://www.bloomberg.com/news/2011-0...rs-secret.html

... it was $16 trillion in 2008.

http://sanders.senate.gov/newsroom/n...3-62060dcbb3c3

"The investigation also revealed that the Fed outsourced most of its emergency lending programs to private contractors, many of which also were recipients of extremely low-interest and then-secret loans."

"The Fed outsourced virtually all of the operations of their emergency lending programs to private contractors like JP Morgan Chase, Morgan Stanley, and Wells Fargo. The same firms also received trillions of dollars in Fed loans at near-zero interest rates. Altogether some two-thirds of the contracts that the Fed awarded to manage its emergency lending programs were no-bid contracts. Morgan Stanley was given the largest no-bid contract worth $108.4 million to help manage the Fed bailout of AIG."

...information on how much Fed lends to foreign entities may not be made public because the Fed contracts the actual lending operations out to private firms.
"If The Fool persists in his Folly he will become wise." - William Blake
  • #4,595
  • Oct 22, 2011 11:31am Oct 22, 2011 11:31am
News might be Important but what am learn that sometimes news can make us reluctant,confused or hurry to jump in the market which the prices is quite expensive

In Larger Monthly View EU still bearish Indeed,But once break the greenlines then story maybe different again,BUT break the greenlines doesnt mean we will starting going up as "everything can be happening" and this circle keep turning and repeat itself..what has taught us,dont over confidence in the market,dont brutaly bid or sell without have a proper set up,dont bet big position even everything looks good and confirmed..the market and life has taught us to trade wisely,independently and properly

Lets take a look the chart once again,personaly I dont think the daily double top will be hold and I'm looking 1.40/1.41 to be tested or break,but based on the current pattern the bullish outlook would only support till 1.4-1.41 max

Lastly,I must admitted talk is easy..I know the rules but I've always forget the rules..Until now I still cant kill totally the emotion,the greed and others human sickness as well..In the end..I'm still human being,
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If there was easy money lying around,no one would be forcing it into your
  • #4,596
  • Oct 22, 2011 11:37am Oct 22, 2011 11:37am
http://finance.yahoo.com/news/US-mis....html?x=0&.v=1
  • #4,597
  • Oct 22, 2011 11:55am Oct 22, 2011 11:55am
Quoting Blobik
1. Knoholy, as I got confused by the article predicting upward move towards 1.40-41, are you sharing this view? Just curious on sentiment

2. I am certain, that EUR will be foced to test the 1.30 resistance in the future. But when it happens, it is hard to say. Important thing to consider, is that We may be doing sort of spike that will take us even higher, before collapsing over 1000 pips back to 1.30. I just looked at 2000 pip spike in December 2008 that was completely erased in January 2009, and then the uptrend continued and reached...
Blobik

Jim Willie puts out a subscription newsletter that I subscribe to. Last Sunday he called for EUR/USD to rise and explained why. He is also covering the fundamentals and the technicals however his view was that short term EUR/USD would rise to 1.4100 to fill the gap. I posted it since it went against the flow. It turned out he was correct. He helps me balance my bias when some develops. Long term I am certain EUR/USD will retest 1.3100 however there are so many cross currents at work short term nothing is certain. As PipTrapper and others have pointed out the flow of funds is what moves the markets. We have the Yen being too strong for exporter's do INTERVENTION is at hand. Then the FED wants a cheaper US Dollar and the Markets to go up so Janet Yellin on Friday gives a boost to the markets and down goes the US Dollar Index as they sell the Risk On US Bonds and Go into the markets. Gold and the USD/JPY which is a funding currency.

These are some of the issues we need to be aware of in coming days and months.
  • #4,598
  • Oct 22, 2011 11:59am Oct 22, 2011 11:59am
Quoting knoholygrail
Blobik

Jim Willie puts out a subscription newsletter that I subscribe to. Last Sunday he called for EUR/USD to rise and explained why. He is also covering the fundamentals and the technicals however his view was that short term EUR/USD would rise to 1.4100 to fill the gap. I posted it since it went against the flow. It turned out he was correct. He helps me balance my bias when some develops. Long term I am certain EUR/USD will retest 1.3100 however there are so many cross currents at work short term nothing is certain. As PipTrapper and others...
Long USDJPY might be a good idea In near term with stop 75.50 below now and am hope this is not decending
Attached Image (click to enlarge)
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If there was easy money lying around,no one would be forcing it into your
  • #4,599
  • Oct 22, 2011 12:06pm Oct 22, 2011 12:06pm
Quoting fxrising
I thought I would ask this question during non trading hours.

I do not understand why when the US Stock market goes green the dollar does not become stronger as was the case on Friday, I would think the US market going green would strengthen the dollar, clearly I am missing the point and the way things work. I would appreciate a little clear education.
When the Dow and other markets go down usually that means that investor's see the risks coming back so they exit the markets and sell their positions collecting their respective currencies. Then they buy the US Dollar and with those US Dollars they put it into short term US Bonds or Treasuries whether 2 Year or 5 Year or 10 Year. They get almost no Yield however they think their money is safe.

When RISK comes back on because the Masses think the ECB and the FED have solved all the problems positions reverse and they sell the US Bonds and the Yields go up as the US Bonds go down. The US Dollars are then sold to buy other currencies which then are used to buy other asset classes. This explanation is a little simplistic however it makes the point I think. There are also other currents at play such as the buying the Yen as well for a safe haven and at other times selling the Yen in other to buy higher Yielding asset classes.

Then there is INTERVENTION at times by the various central banks to confuse things more however bottom line RISK ON - Markets UP and US Dollar DOWN !!! (With Exceptions at Times)
  • #4,600
  • Oct 22, 2011 12:12pm Oct 22, 2011 12:12pm
Quoting FXMindset
Long USDJPY might be a good idea In near term with stop 75.50 below now and am hope this is not decending
Was thinking the same. On Friday the USD dumping was driven on QE fears. "Normal" USD dumping due to flow to risk assets does not cause the USDJPY to go down. And even if we get more risk-off, it should now have moderate impact on USDJPY, due to Japanese intervention fears. Infact either risk-on or risk-off should not cause powerfull movements... Unless we get a powerfull breakout. So there are some good fundamental points backing up your simple yet brilliant technical analysis

And, I think it may be a descending triange, but it should touch the higher line first. In the long-long term the USD is intended to be brought down to promote US exports. And since in US they are not afraid of using printing press when necessary, and fear inflation less...
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