EurAnalysis

Look at this Dwan guy, fully focused, emotionless face, giving no clues with his body language, just silent.
I played poker before I discovered trading (still play it) and it's really amazing how much they are related, pure mind game, needs full concentration. Very similar to trading.

http://theeconomiccollapseblog.com/a...ll-over-europe

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The European debt crisis has just gone to an entirely new level. Just when it seemed like things may be stabilizing somewhat, we get news of huge financial bombs being dropped all over Europe. Very shortly after U.S. financial markets closed on Friday, S&P announced credit downgrades for nine European nations. This included both France and Austria losing their cherished AAA credit ratings. When the credit rating of a country gets slashed, that is a signal to investors that they should start demanding higher interest rates when they invest in the debt of that nation. Over the past year it has become significantly more expensive for many European nations to borrow money, and these new credit downgrades certainly are certainly not going to help matters.

Quite a few financially troubled nations in Europe are very dependent on the ability to borrow huge piles of cheap money, and as debt becomes more expensive that is going to push many of them over the edge. Yesterday I wrote about 22 signs that we are on the verge of a devastating global recession, and unfortunately that list just got a whole lot longer.

Over the past several months we have seen quite a few credit downgrades all over Europe, but we have never seen anything quite like what S&P just did. Standard & Poor’s unleashed a barrage of credit downgrades on Friday....

Let's Go For It !!!

http://www.bing.com/images/search?q=...DFFBDC&first=0

http://www.johnmauldin.com/images/up.../mwo011412.pdf

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By John Mauldin | January 14, 2012

One of the interesting things about being in Hong Kong is that I get to see the weekend edition of the

Financial Times 12 hours early. And the headlines were not all that pleasant. As I promised last week, we will cast our eyes to Europe and ponder what is in store for Europe for the year and the next five years. And what do we read on page 2? The “ECB raps revisions to draft a fiscal pact.” Seems they feel there are too many loopholes, which will make the document meaningless … somewhat like the treaty they have now. And we further learn that “Greek default threat grows as talks falter.” Seems there is a lack of agreement on how much of a haircut the investors ought to take, and the Greeks don’t want to guarantee any future debt, just in case they need to default some more in the future. But they do want the €15 billion they need to keep the debt machine running for a few more months.

And on page 1, in big type, we are surprised (but not very) by the headline, “France and Austria face debt blow.” Seems those sharp-eyed accountants over at S&P have decided to downgrade French debt from AAA. Which of course leads to another headline on page 2, suggesting “Firepower of bail-out fund cast into doubt.” The currency markets were shocked – shocked I tell you – that S&P would do such a thing and promptly took back the euro rally and cast the euro down to recent cycle lows. Who knew, other than the entire free world not watching reality TV, that S&P was planning to do such a thing? And we read elsewhere that the European Commission is dismayed that S&P would do something so clearly not right, at least according to the way they keep their own books.

Even here in amazing Hong Kong, with the growth of China driving a wave of prosperity, eyes are fixed on Europe. How will they deal with the crisis?

We read that US exports to Europe were down 7% last quarter, and Europe has not yet really entered into recession, which is almost guaranteed this year. And if US exports are down, then so are Asian
and Latin American exports. Global growth appears to be threatened.

http://www.caseyresearch.com/gsd/sit...ina%20Gold.jpg

http://www.caseyresearch.com/cdd/rise-praetorian-class

A Definitive Interesting Read For Those Interested.

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The Rise of the Praetorian Class

By Pete Kofod

Much attention has been paid to the “disappearing middle class” and the “vanishing American Dream.” While the observations are largely accurate, they are also misleading. The traditional three-tier model of the upper, middle and lower class broadly categorizes people according to income and net worth. One significant problem with this model is that membership in any particular class is very much in the eye of the beholder. One man’s “scraping by” is another man’s “opulent living.” This subjective and arbitrary grouping and boundary assessment inevitably gives rise to the simmering class warfare that is starting to rear its ugly head in many Western countries. Such categorization is therefore meaningless at best, if not outright deceptive as it conflates a variety of economic actors.
The chief fallacy of this model rests in the fact that it focuses on how much those actors are compensated, as opposed to how and why they are compensated. A far better perspective is perhaps gained using two classes, the Political Class and the Economic Class, with a third class emerging.

The Butcher, the Baker, the Candlestick Maker – The Economic Class
The Economic Class, at least in the United States, has historically been the numerically dominant group, although in recent decades its dominance has noticeably waned. The economic class would traditionally be called the Private Sector, but even that term has become misleading for reasons we will delve into later in this article.

I find it interesting because my strategy does not require a 50% drawdown. I am posting it to continue the Money Management and Risk Management Strategy.

One of my favorite traders of all time is Paul Tudor Jones. In a business that destroys most money manager within three years he has survived for more than thirty trading on nothing more than his wits and an iron-clad risk discipline.


In an interview with Jack Schwager a long time ago Mr. Jones offered a very simple formula for success that we should all adopt. Ha said that traders can consider themselves successful if their drawdowns are no more than one half of their valley to peak gains. Put simply that means if your account has increased by 1000 points over say a course of 3 months then you cannot give more than 500 points back to the market if you want to maintain long term success.


I love the simplicity of this idea because it eliminates a massive amount of unnecessary math and provides a realistic business plan for trading the markets. It also creates a proper set of expectations. Want to make 100%? Then be prepared to lose at least 50% of your capital. Think about that for a second. This is a formula for success - not failure - and yet it shows that even under the best of circumstances we must be willing to lose half of our money if we want a chance to double it.



This rule of thumb is particularly important to FX traders who regularly use high levels of leverage because it helps explain why most traders fail miserably. If you ask traders what's the maximum percentage of capital they are willing to lose most will answer no more than 20%. Yet the reality is that if you are trading on 10 times leverage and are shooting for 10% cash on cash return (which at 10:1 lever factor translates to 100% gain or a doubling of your account) then you should be happy to lose only 50% of you stake. Of course no one is happy to lose 50% yet everyone wants to double their money and therein lies the problem for anyone who trades speculative instruments.


The answer to how much do you want to make depends on how much are you willing to lose. If you don't have a realistic assessment of risk before you put your capital in play you will never succeed in trading.(

cool chart. might want to think about throwing a higher TF correction in there, somewhere

http://news.goldseek.com/GoldenJackass/1326306021.php

The January report will only be published on January 18, 2012. This report deals with short term strength in US Dollar.

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Good US Dollar Index Chart Attached In Article.

The USDollar is due for some extreme shocks. Some might not think so, given the Euro depression in sentiment and the rattling of big European banks. Word has come that in late February and late March, some important adjustment events are due to kick in, enough to knock over the tables in the temple. Conjecture is wide open and ripe for imagination. For the USDollar to continue its catbird post in global trade is inconceivable. The elite controllers will do their best to keep the USDollar in its dominant post. But the rest of the world, especially on its Eastern locales, is working in the other direction. As a sage contact told me last week, "There is a clear swing in power to the East, not to return Westward in our lifetime." The primary victim of that pendulum swing, a powerful Paradigm Shift, is the USDollar. The consequent beneficiary will be Gold, and its squire Silver. A complete list of forecasts will not be given here, since too dangerous and ugly. The world financial system will not survive in its current form. A collapse is due probably by late 2012, or early 2013 after the US presidential elections, another controlled event subject to outsourcing.

http://stockcharts.com/h-sc/ui?s=%24USD

You mean like mabey one off this long term up trend line and weekly demand zone in this multi year wedge consolidation. The eurocrats are all over the wires jawboning this weekend and I'm sure they will have plenty of hot air to blow up everyones skirt all week.

Remember too that the US$ ain't no prize either in this ugly dog contest with Benny and the boys tossing out sacks of cash and all thie market needs is a little hopium and up she goes. Trade well.




Or how about throwing the down channel in there...... Looks like she could be at the end for right now... Nice spinning top candle this week on the close too.



Make your own decision but keep an open mind.

Excellent chart PK! the historical support yet to be violated, price retested the zone twice, USD Bank holidays has the possibility to move up this pair again to 1.278x zone or higher ? ... next week demands more careful watch to the pair.

yes...ur chart is excellent

Perfect Match and Sweet Couple

http://www.prudentbear.com/index.php...w?art_id=10621

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And there was, of course, today’s news of imminent European sovereign debt downgrades from Standard & Poor’s. After the markets' close, Standard & Poor’s confirmed that France and Austria lost their “AAA” ratings. Italy, Spain and Portugal each saw their sovereign ratings cut two notches. Germany retained its “AAA,” although the rapidly depleting ranks of “AAA” does not bode well for the ratings (or size) of the European Financial Stability Facility (EFSF).

The Fed’s aggressive monetary policy actions back in 2007 and early-’08 failed to improve underlying U.S. mortgage and financial sector debt. I have argued that the Fed’s moves, and resulting added market distortions and excesses, likely only augmented systemic fragilities. While the markets have been focused on extraordinary measures from the ECB, S&P’s downgrades provide a reminder that the deterioration in European debt fundamentals runs unabated. Despite extraordinary ECB liquidity measures, the European debt crisis is not yet under control - let alone on course for resolution.

Everyone knows “Don’t fight the Fed.” Yet fighting the ECB has been a notably gainful exercise in the marketplace. The newfound 2012 bullish view holds that a now Fed-like Draghi ECB will be a much more formidable combatant. And with another huge round of ECB LTRO coming next month, and the Fed with an itchy trigger finger for QE3, the bullish analytical regime to begin 2012 is very much premised on the ongoing command of central banks over market forces.

My view holds that the ECB is on thin ice; the euro is on thin ice; and the European Credit system remains on thin ice. I doubt the ECB is capable of wresting control of the debt crisis from powerful market forces for any significant length of time. I appreciate that the markets have gravitated to a much more optimistic view, much to the benefit of global risk markets and overall sentiment. Yet this creates vulnerability to a return of risk aversion in the event that the marketplace begins to back away from bullish premises. My presumption is that the more sophisticated financial operators recognize ongoing system fragilities, but at the same time likely believe the LTRO facilities have bought some time. Speculators have grown comfortable with the game of using policymaker time purchases to pounce on those bearishly positioned. This dynamic incites “rip your face off” rallies, heightened market instability and, importantly, susceptibility to destabilizing market reversals and problematic air pockets.

The year 2011 proved a major setback for the view that policymakers had global debt crisis dynamics under control. Indeed, I would argue that the European sovereign debt crisis provided a historical inflection point with respect to the capacity for fiscal and monetary policy intervention to hold the downside of a Credit bust at bay. I expect circumstances in 2012 to confirm this dynamic of waning policy efficacy, but on a more global basis. Last year, markets witnessed how policy moves in Europe too often came with unintended consequences. The ECB’s LTRO facility has shifted sentiment back in favor of central bank policy power and effectiveness. But for how long?

I could envisage a scenario where euro weakness tightens the screws on the ECB. If capital flight has become a serious issue, ECB liquidity operations could become increasingly destabilizing. The markets are already anticipating the positive effects of LTRO part II scheduled for late-February. A faltering euro might have the Germans (in particular) questioning the merits of another open-ended liquidity facility. And there could be dissention as well in the ranks of the FOMC. Another round of MBS purchases in the face of buoyant risk markets, improving economic, labor and housing markets, and record low mortgage borrowing costs risks a decisive blow to already-depleted Federal Reserve credibility.

http://www.ekathimerini.com/4dcgi/_w...01/2012_422457

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Fund sees Zimbabwe-style inflation if Greece exits euro




http://sup.kathimerini.gr/kath/engs/...a_390_1812.jpg http://wwk.kathimerini.gr/kathnews/images/dot_clear.gif
A Greek exit from the euro zone would be worse than catastrophic and could provoke greater social unrest, Zimbabwe-style inflation and a military coup, said London-based hedge fund firm Toscafund.

In a stark note to clients, chief economist Savvas Savouri said introducing a new currency instantaneously in the wake of a euro exit would be impossible and the delay would lead to «a run on banks and evacuation of capital that would make what has already been seen as nothing by comparison».

"The word catastrophic would not do it justice enough,» said Savouri, who comes from a Greek Cypriot background.

"Those who imagine some post-euro-exit stability would be restored ... quite simply fail to understand the magnitude -- social, economic and political -- of such an eventuality."

What you want? I propose Krun .. and invite EurAnalysis team for a grand dinner?

Kiss first

Knoholygrail,

You have just got to slow down with the info flow......I have got to trade sometime. Just kidding my friend as I have truely enjoyed the sources you are posting. It seems from other sources Jim Rogers moving to China was a well thought out move by him......at least for now as he has said even China has their own troubles brewing. Just a side thought, but getting back to your source posting, thank you as they are most informative & enlightening.

For the most part I am a short term trader & that means most trades are closed by days end, but I have kept a short 2 lot trade on the EUR/USD since 010312 & did consider closing it on Friday, but decided to let it run since the downside pressure was so strong.....now it seems a wise decision was made.....at least for now anyway.

Thanks again for your info sharing, views & comments.

Many thanks for that. I thought I was looking at the bigger picture but see I was wrong. Guys like you are the best.

Like PT I believe that parity is a reasonable goal over the next couple of years, but it has fallen too far too fast for me to be comfortable for me to do anything other than scalp. I still short it when I scalp though.

BTW... statictially there is about a 90% chance that the years high or low (or close enough to not make a difference) is achieved in January. As things stand now, that would make the years high 1.3070.