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EurAnalysis Kindergarten 24 replies

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EurAnalysis

  • #8,901
  • Nov 10, 2011 11:16am Nov 10, 2011 11:16am
At 5:25pm Greek local time, Zeus showed his frustration with the Greeks and gave them a little shake with a Magnitude 5.2 earthquake
It's nothing serious... just a little nudge to say "Hey you, smarten up"
Those who say it cannot be done should not interrupt those who are doing it
  • #8,902
  • Nov 10, 2011 11:23am Nov 10, 2011 11:23am
Quoting PipTrapper
On the H4 chart right now the 200sma is just above 1.3690 at 1.3699
I pay no notice to the smaller MAs in the big time frames.
Besides, one of the main reasons for the price to go up there is unfinished business with the 200sma line on the H4. It broke it but never re-tested it. Historically it is always retested at some point.

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Yes, I understand. You wait for a pullback to the 200SMA (now is the supposed polarity). I attached the hourly chart with 800SMA (same as 200SMA on the H4) and 40SMA. Now the 40SMA holds the price. I would feel better to short from 1.37200-1.37900. If you see the other side, price is under the 200SMA with 65 pips one place, I would expect the same here. But now I am unsure so I will miss it I think. What is your target?
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  • #8,903
  • Nov 10, 2011 11:43am Nov 10, 2011 11:43am
Quoting w1nner
Yes, I understand. You wait for a pullback to the 200SMA (now is the supposed polarity). I attached the hourly chart with 800SMA (same as 200SMA on the H4) and 40SMA. Now the 40SMA holds the price. I would feel better to short from 1.37200-1.37900. If you see the other side, price is under the 200SMA with 65 pips one place, I would expect the same here. But now I am unsure so I will miss it I think. What is your target?
The 40 sma will only hold the price if it was going down right away. However, we are entering a range of accumulation and consolidation, so the 40sma will be crossed up and down. I am taking a sell at the top of the range. If price makes it to 1.3720 area, that is where I will take the short. I put the 1.3690 limit order because I do not want to sit at the computer all the time. For me in the long run, there is not much difference between 1.3690 and 1.3720 (30 pips) so I will be okay if I enter a bit early. If I am at the computer and it goes to 1.3720 and it has already hit my limit order, On PA confirmation I will take another short and ride them both to the bottom of the range, take profit on the 1.3690 trade and let the 1.3720 ride.
Those who say it cannot be done should not interrupt those who are doing it
  • #8,904
  • Nov 10, 2011 12:17pm Nov 10, 2011 12:17pm
Quoting PipTrapper
The 40 sma will only hold the price if it was going down right away. However, we are entering a range of accumulation and consolidation, so the 40sma will be crossed up and down. I am taking a sell at the top of the range. If price makes it to 1.3720 area, that is where I will take the short. I put the 1.3690 limit order because I do not want to sit at the computer all the time. For me in the long run, there is not much difference between 1.3690 and 1.3720 (30 pips) so I will be okay if I enter a bit early. If I am at the computer and it goes...
How do you think, will we get that level as fast as tomorrow I think she will be lazy and it would take her maybe until Tuesday...
  • #8,905
  • Nov 10, 2011 12:27pm Nov 10, 2011 12:27pm
Quoting Blobik
How do you think, will we get that level as fast as tomorrow I think she will be lazy and it would take her maybe until Tuesday...
Hard to say at this point. Maybe even overnight if Asia dumps some USDs
Those who say it cannot be done should not interrupt those who are doing it
  • #8,906
  • Nov 10, 2011 12:31pm Nov 10, 2011 12:31pm
I just returned home, and nice... we did see a pullback as expected.
I only know the ECB is buying bonds "undefinitely", so I need to do more research in order to make this call a valid one.

Just my opinion of what (technically) could happen today.
The UK CPI number can be that news

Pbh
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  • #8,907
  • Nov 10, 2011 12:45pm Nov 10, 2011 12:45pm
Quoting Pbh
I just returned home, and nice... we did see a pullback as expected.
I only know the ECB is buying bonds "undefinitely", so I need to do more research in order to make this call a valid one.

Just my opinion of what (technically) could happen today.
The UK CPI number can be that news

Pbh
Just by the ECB buying toxic bonds, that should be enough to cause a bearish event when they will have no choice but to print more Euros to keep buying them.
Those who say it cannot be done should not interrupt those who are doing it
  • #8,908
  • Nov 10, 2011 12:56pm Nov 10, 2011 12:56pm
Note that USA, Canada and France will have bank holidays tomorrow.
The markets will still be open though.
Expect low volume.
What happened the last time we had a US bank holiday with low volume?
That's right, the Euro shot up.
Let's see if we get a repeat.

ADD:
Canada: Rememberance Day
USA: Veteran's Day
France: Armistice Day

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Those who say it cannot be done should not interrupt those who are doing it
  • #8,909
  • Nov 10, 2011 12:57pm Nov 10, 2011 12:57pm
Doesn't ECB have the power to push it higher if they want? One side I want to earn money in either way, on the other side I would like to see a growing economy not a crisis. If it will be a crisis like in 2008 it will be much harder.
  • #8,910
  • Nov 10, 2011 1:01pm Nov 10, 2011 1:01pm
Quoting PipTrapper
Hard to say at this point. Maybe even overnight if Asia dumps some USDs
Not sure, if they can drop USDs much faster then EUR drops.
  • #8,911
  • Nov 10, 2011 1:08pm Nov 10, 2011 1:08pm
Quoting w1nner
Doesn't ECB have the power to push it higher if they want? One side I want to earn money in either way, on the other side I would like to see a growing economy not a crisis. If it will be a crisis like in 2008 it will be much harder.
Now correct me if I'm wrong but if the ECB were to be buying up euros they would effectively be reducing the money supply in the economy right? Less euros in the system.. But by buying up Italian bonds theyre effectively increasing the money supply and since the ECB cant simply print more and more euros because its against european law and would ultimately end up in huge inflation their method of buying bonds is the only method of QE they really have? As well as that they haven't got the funds to keep the euro bouyed and Italian bonds under control so they must do one or the other which I feel is the buying of bonds! Maybe PT could give his opinion on the matter?
  • #8,912
  • Nov 10, 2011 1:09pm Nov 10, 2011 1:09pm
Quoting PipTrapper
Note that USA, Canada and France will have bank holidays tomorrow.
The markets will still be open though.
Expect low volume.
What happened the last time we had a US bank holiday with low volume?
That's right, the Euro shot up.
Let's see if we get a repeat.
.

Why should it shoot up?? Easy... ECB buying toxic (PT's adjective) bonds.
Low volume?? That's even better.
So you can bet your life and say we'll touch at least 1.3800? doubtful.. I'm not done with my fundamental analysis yet.

RodMca strategy might rock it tomorrow
  • #8,913
  • Nov 10, 2011 1:12pm Nov 10, 2011 1:12pm
Quoting Pbh
Why should it shoot up?? Easy... ECB buying toxic (PT's adjective) bonds.
Low volume?? That's even better.
So you can bet your life and say we'll touch at least 1.3800? doubtful.. I'm not done with my fundamental analysis yet.

RodMca strategy might rock it tomorrow
RodMcA scalping master haha!

Just as well I have no college tomorrow might get to finally make a decent amount of pips this week!
  • #8,914
  • Nov 10, 2011 1:18pm Nov 10, 2011 1:18pm
http://globaleconomicanalysis.blogsp...nd+Analysis%29

The answer to the question "How Does Europe Recapitalize Banks Without Raising any Capital?" should now be perfectly clear ...
  • #8,915
  • Nov 10, 2011 1:21pm Nov 10, 2011 1:21pm
Quoting RodMca
Now correct me if I'm wrong but if the ECB were to be buying up euros they would effectively be reducing the money supply in the economy right? Less euros in the system.. But by buying up Italian bonds theyre effectively increasing the money supply and since the ECB cant simply print more and more euros because its against european law and would ultimately end up in huge inflation their method of buying bonds is the only method of QE they really have? As well as that they haven't got the funds to keep the euro bouyed and Italian bonds under control...
You are correct. Buying up Spanish & Italian bonds in the bond market without selling other sovereign bonds they may have on their balance sheet (sanitizing) amounts to quantitative easing as it (as you said) increases the money supply in circulation.
The bond buying program that was in place while Trichet was president did in fact also sell other bonds that they had on their balance sheet. However, now due to liquidity requirement reasons, I doubt they are sanitizing. Unfortunately there is no way to verify until the weekly report is released on Monday. Last week's bond buying ended in a net €59 Billion imbalance of extra Euros in circulation (They bought €59 billion more than they sold). Therefore, I assume this time will be no different.

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Those who say it cannot be done should not interrupt those who are doing it
  • #8,916
  • Nov 10, 2011 1:23pm Nov 10, 2011 1:23pm
Quoting PipTrapper
Canada: Rememberance Day
USA: Veteran's Day
France: Armistice Day
Poland: Independence Day
World: Freaky-Friday Day

  • #8,917
  • Nov 10, 2011 1:25pm Nov 10, 2011 1:25pm
Quoting Pbh
http://globaleconomicanalysis.blogsp...nd+Analysis%29

The answer to the question "How Does Europe Recapitalize Banks Without Raising any Capital?" should now be perfectly clear ...
My question is how does Greece`continue to function when analysts say their debt:GDP ratio will be over 200%? If Greece leaves the euro it will be the european version of Zimbabwe and like PT said during the week I'll be the first to go long on the German deutsche mark and the greek drachma pairing! And if Greece doesnt leave the whole system will crumble seeing as just the european banking system needs one trillion! (from the article above) thats just the banks taken care of how will Spain/ Italy etc afford borrowing at 7% and if the ECB isnt here this time next year theres no leaving the bond market! Exciting times ahead
  • #8,918
  • Nov 10, 2011 1:28pm Nov 10, 2011 1:28pm
Quoting PipTrapper
You are correct. Buying up Spanish & Italian bonds in the bond market without selling other sovereign bonds they may have on their balance sheet (sanitizing) amounts to quantitative easing as it (as you said) increases the money supply in circulation.
The bond buying program that was in place while Trichet was president did in fact also sell other bonds that they had on their balance sheet. However, now due to liquidity requirement reasons, I doubt they are sanitizing. Unfortunately there is no way to verify until the weekly report is released...
So a short over the weekend may be the best plan of action seeing as the ECB more than likely added a few more billion to that 59 billion already there and look what we saw last Monday major selling.. Maybe we'll get a retrace tomorrow and put in a sell on friday just before the close?
  • #8,919
  • Nov 10, 2011 1:29pm Nov 10, 2011 1:29pm
Quoting Pbh
http://globaleconomicanalysis.blogsp...nd+Analysis%29

The answer to the question "How Does Europe Recapitalize Banks Without Raising any Capital?" should now be perfectly clear ...

You forgot to post the song...
Inserted Video
Those who say it cannot be done should not interrupt those who are doing it
  • #8,920
  • Nov 10, 2011 1:35pm Nov 10, 2011 1:35pm
ECB Said to Start 40 Billion-Euro Covered Bond Purchases

The program is part of policy makers’ efforts to stablize the financial system as Greece teeters on the brink of default and Italian bond yields soar to records. The ECB has also purchased bonds of the euro region’s most-indebted governments and provided banks with unlimited funding at its basic interest rate, currently 1.25 percent.

http://www.businessweek.com/news/201...purchases.html

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