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EurAnalysis Kindergarten 24 replies

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  • #5,241
  • Oct 26, 2011 5:51am Oct 26, 2011 5:51am
Quoting Pipsforall
When does the euro decouple from the S&P so that it can be fairly valued, this risk on in the market correlation has completely overvalued it given the current deteriorating economic conditions in Europe v. the US and the fact that the ECB will be lowering interest rates in the future. I think the Euro really wants to go down, but the stock markets want their year end rally so that the fund managers can all get their big bonus checks, and that's keep the Euro up. All my opinion.
You are correct but it is not a direct correlation to the value of the Euro.
It is more a correlation to the USD
Because the USD is being used as a safe haven, when risk is on, money flows from US fixed income into risk assets. If USD falls, then obviously EUR/USD will rise.
As for your question of de-coupling from SP500 is concerned, I believe it already has to a certain degree. The reluctance of the Euro to fall in the last few days is more related to European financial sector selling off USD based assets in order to provide themselves with Euro liquidity. Also big money is pretty much on the side awaiting news from the Euro leaders.
Those who say it cannot be done should not interrupt those who are doing it
  • #5,242
  • Oct 26, 2011 5:52am Oct 26, 2011 5:52am
Quoting PipTrapper
From what I understand through CNBC TV, the banks are being given till mid 2013 to recap themselves from the private sector.
Remember our yesterdays discussion and counting? If they have time only untill 2013, it means (if we assume 100% greek bond haircut and cca 0,5% of total assets held in derivatives) banks will need to spend whole their income just to recapitalize. Yesterday, we were talking about net income. If bonuses are not paid and nor are dividends, it gives em more power but still I see only one way how to meet this limits. Because they cant fire employees, as they already did that, they will be forced to sell assets. Poor investors.

T.
"I know one thing, that I know nothing." Sokrates
  • #5,243
  • Oct 26, 2011 5:52am Oct 26, 2011 5:52am
About gold discussion - I think it is most correlated with US QE fears. Or, It acts more like safe haven when USD is supposed to be weak, and more like a commodity, when USD seems to have upward potential. When gold was making higher highs, some people in the market were fearing another QE. Then US downgrade, and other USD negative news. But when Bernanke was not talking about QE for some time, upward pressure on gold started disappearing. Finally, when he said Operation Twist only, it dropped like a stone, as "QE bubble" broke. Now we are going down, but breaking above 1700 means, that the market is pricing in QE as quite probable... again.

If we get another "no QE decision", then yet another USD rally is about to come. If we get QE, then explanation is not necessary, just buy gold, as 1600-1700 range won't hold.

I am still not considering QE as probable. I hope, that market is pricing it too early, and that it will play to my advantage soon.

This would be be both EURUSD negative and gold crushing. But never underestimate gold bulls. They only wait to put their hands on more yellow metal. Physical, or in forex. No matter. They were accumulating it in the past, are doing it now and won't stop doing it.

Gold: "It is a bubble, but I am going to buy it" - Soross
EUR: "It is a bubble, and I am going to sell it" - ME
  • #5,244
  • Oct 26, 2011 5:58am Oct 26, 2011 5:58am
Quoting Blobik
Gold: "It is a bubble, but I am going to buy it" - Soross
EUR: "It is a bubble, and I am going to sell it" - ME
Those who say it cannot be done should not interrupt those who are doing it
  • #5,245
  • Oct 26, 2011 6:00am Oct 26, 2011 6:00am
Quoting Tom_D_Trader
Remember our yesterdays discussion and counting? If they have time only untill 2013, it means (if we assume 100% greek bond haircut and cca 0,5% of total assets held in derivatives) banks will need to spend whole their income just to recapitalize. Yesterday, we were talking about net income. If bonuses are not paid and nor are dividends, it gives em more power but still I see only one way how to meet this limits. Because they cant fire employees, as they already did that, they will be forced to sell assets. Poor investors.

T.
No dividends and no bonuses means poor stock performance.
If that is the way it finally comes out tonight, I expect further equity losses in the euro financial sector.

Yes, poor investors.
Those who say it cannot be done should not interrupt those who are doing it
  • #5,246
  • Oct 26, 2011 6:06am Oct 26, 2011 6:06am
More about that gold.

I already suggested, that if you are interested in gold, you surely should read World gold councils researches. Informations in there are priceless.

http://www.gold.org/investment/research/

There was one thing which really caught my attention there. 60% of world gold demand comes from jewelry sector. 25% of demand from jewelry sector comes from India. That means 15% of world demand comes from India, where gold is bought mainly on weddings and religious festivals. And weddings mainly happen during autumn and winter and so are some of those festivals.

Anyone from India here? Would like to know your opinion.

T.
"I know one thing, that I know nothing." Sokrates
  • #5,247
  • Oct 26, 2011 6:09am Oct 26, 2011 6:09am
Quoting PipTrapper
You are correct but it is not a direct correlation to the value of the Euro.
It is more a correlation to the USD
Because the USD is being used as a safe haven, when risk is on, money flows from US fixed income into risk assets. If USD falls, then obviously EUR/USD will rise.
As for your question of de-coupling from SP500 is concerned, I believe it already has to a certain degree. The reluctance of the Euro to fall in the last few days is more related to European financial sector selling off USD based assets in order to provide themselves with...
I agree, and I think the primary reason is raising euros by european banks which has given the US markets a false risk on rally not based on earnings but the mistaken fact that the euro is rising because people want to take risk, would also answer why the rally has been on such low, low volume.
Yay! Pips for everyone!
  • #5,248
  • Oct 26, 2011 6:09am Oct 26, 2011 6:09am
Quote
MUMBAI (MarketWatch) — U.S. stock futures pointed to a higher open Wednesday, lifted by hopes that a much-awaited summit of euro-zone leaders will present a convincing plan to come to grips with the region’s debt crisis.

WOW!!!!!!!!!! - Is any body here convinced they will present a convincing plan?
I don't care which way the market is going as long as it's going my way
  • #5,249
  • Oct 26, 2011 6:15am Oct 26, 2011 6:15am
Quoting Tom_D_Trader
More about that gold.

I already suggested, that if you are interested in gold, you surely should read World gold councils researches. Informations in there are priceless.

http://www.gold.org/investment/research/

There was one thing which really caught my attention there. 60% of world gold demand comes from jewelry sector. 25% of demand from jewelry sector comes from India. That means 15% of world demand comes from India, where gold is bought mainly on weddings and religious festivals. And weddings mainly happen during autumn and winter...

I am from India and in India. Here, the demand never decreases but only increases, whatever may be the gold price then. Peek season is now i.e. from October till December and March till May.
  • #5,250
  • Oct 26, 2011 6:16am Oct 26, 2011 6:16am
Greece's current debt is approx €355 Billion which is approx 170% of GDP
50% haircut means that the bedt falls to approx €178 Billion (85% of GDP)
However, Greece may have to recap it's own banks.
The Greek financial sector holds 18% (€64 Billion) of Greek debt
Now add that back to the remaining Greek debt
€178 Bln + €64 Bln = €242 Billion = 116% of GDP

The above figures were taken from the internet via Google searches.
As such they may slightly differ from official numbers but they are close enough.
Those who say it cannot be done should not interrupt those who are doing it
  • #5,251
  • Oct 26, 2011 6:18am Oct 26, 2011 6:18am
whadya know.. 30+ pip m5 spike..
Have I got something on my face, SOLDIER?
  • #5,252
  • Oct 26, 2011 6:18am Oct 26, 2011 6:18am
Quoting Tom_D_Trader
More about that gold.

I already suggested, that if you are interested in gold, you surely should read World gold councils researches. Informations in there are priceless.

http://www.gold.org/investment/research/

There was one thing which really caught my attention there. 60% of world gold demand comes from jewelry sector. 25% of demand from jewelry sector comes from India. That means 15% of world demand comes from India, where gold is bought mainly on weddings and religious festivals. And weddings mainly happen during autumn and...
Yes, Sir. You are absolutely right.
  • #5,253
  • Oct 26, 2011 6:19am Oct 26, 2011 6:19am
Quoting bumapatria
whadya know.. 30+ pip m5 spike..
Germany approved changes to EFSF
Those who say it cannot be done should not interrupt those who are doing it
  • #5,254
  • Oct 26, 2011 6:20am Oct 26, 2011 6:20am
Quoting PipTrapper
Germany approved changes to EFSF
Yep, but anyone who read the press for the last 24 hours knew that was a no-brainer.
Yay! Pips for everyone!
  • #5,255
  • Oct 26, 2011 6:22am Oct 26, 2011 6:22am
my gold short was stopped out, now my buy is in profit.

but its really strange PA today...

zigzag zigzag BANG.... accumulation.... BANG.

on euro usd its a volume spike same as in gold.either meaning uptrend begins or its a spike meant to be counter traded.

i traded the gold spike, maybe will look to counter soon.

any thoughts of going bull on dollar YET? to me no not yet. 4000 is still the wait for me on any swing trades
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Have I got something on my face, SOLDIER?
  • #5,256
  • Oct 26, 2011 6:24am Oct 26, 2011 6:24am
Careful with shorts. Probably a better entry for a retest of the break out for a short term long until the markets come to their senses.

Futures are rallying risk on for the NY open as are european stock indexes.

Next supply zone on daily is 1.3995-1.4150, 61.8 Fib 1.4013. Touching 200 ema and approaching 200 sma

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I don't care which way the market is going as long as it's going my way
  • #5,257
  • Oct 26, 2011 6:26am Oct 26, 2011 6:26am
who remember my post?
  • #5,258
  • Oct 26, 2011 6:28am Oct 26, 2011 6:28am
Quoting Pipsforall
Yep, but anyone who read the press for the last 24 hours knew that was a no-brainer.
yep... but the market is full of trigger happy fund managers who have to place their client's money in the markets but cannot do it while fundamental factors are not in favor of such a move.
However, now that the Bundestag has approved the EFSF changes, it gives these fund managers a "CYA" certificate to blow their client's hard earned money on a lost cause without recourse.

Client: Why did you throw away my money
Fund Manager: Don't blame me. The bundestag said it was okay.

Those who say it cannot be done should not interrupt those who are doing it
  • #5,259
  • Oct 26, 2011 6:31am Oct 26, 2011 6:31am
Quoting PipTrapper
yep... but the market is full of trigger happy fund managers who have to place their client's money in the markets but cannot do it while fundamental factors are not in favor of such a move.
However, now that the Bundestag has approved the EFSF changes, it gives these fund managers a "CYA" certificate to blow their client's hard earned money on a lost cause without recourse.

Client: Why did you throw away my money
Fund Manager: Don't blame me. The bundestag said it was okay.

PT, and his political jokes lol.... i am imagining a nice political cartoon
Have I got something on my face, SOLDIER?
  • #5,260
  • Oct 26, 2011 6:32am Oct 26, 2011 6:32am
Quoting PipTrapper
yep... but the market is full of trigger happy fund managers who have to place their client's money in the markets but cannot do it while fundamental factors are not in favor of such a move.
However, now that the Bundestag has approved the EFSF changes, it gives these fund managers a "CYA" certificate to blow their client's hard earned money on a lost cause without recourse.

Client: Why did you throw away my money
Fund Manager: Don't blame me. The bundestag said it was okay.




Germany’s Bundestag lower house of parliament approves motion to strengthen euro rescue fund EFSF via leverage
I don't care which way the market is going as long as it's going my way
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