EurAnalysis

Hehe, no. I expected this from my DOW chart I posted Sunday. There's still much room on the downside for this correction...

However, its interesting to see the reaction right now to the EUR/USD. Not the stop I expected. My thought that we'd test 1.3130 look to be about right. High of 1.3128 so far.

Ireland may be allowed to delay payment on bank-bailout IOUs

ECB balance sheet tops EUR 3 trln for the first time

Greece warns there will be no bailout if bond swap fails

Dutch FinMin: Uncertain if Dutch coalition parties will accept austerity cuts

With these kinds of headlines, who the hell wants to go long risk???

It’s not the banks that are the problem. It’s the distressed-debt hedge funds which are not afraid to drag things out and try to prevail in court that could force the Greek’s to invoke the CACs

This is a Achilles heel of the bond swap.

You forgot:

Euro-Zone Central Bank System Massively Imbalanced


http://www.spiegel.de/international/...818966,00.html

support becomes resistance. Let's see if it holds.

Damn.. I'm losing my touch. Thanks to you, no damage done

Ok, I wanted to answer as simly as possible and ended up writing an essay once again.

It is a dangerous game. When US or markets strenghten, USD weakens, bringing our pair up. The important part here is consequence of things here and right now I see it this way:

US
US is getting "stronger" because:
a) investors are simply looking away and are concerned about Europe
b) Short term effect of QE1 and QE2 strenghtens the markets, but weakens USD
Yet there are very important factors to consider in long term - debt mountain, rising unemployment, consumer confidence down, QE1, QE2 all pointing towards weaker USD.

So in long term, I wouldnt buy USD for sure. But there are some issues to consider this year:
US presidential elections, resulting in conflict in Iran, and QE3. These are linked closely together and I think these are main issues weakening USD in short term (lets say months) in 2012. So, the short term weakness of USD brings our pair up and once short term effect vanishes, investors look back into EU and start buing USD.

So, these are my main concerns right now. I am shorting Europe because she deserves it and I trust american presidential team will strike Iran and put QE3 in place so we can have some corrections to go short again.

EDIT: Ok, I hope it is all right now.

T

Schwartz's was just sold to a group including Celine Dion for just under 10 Million Dollars by Hy the former owner and once my boss back in 1962, 50 years ago when I was a junior studing accounting. Where has the 50 years gone ?

PipTrapper you have a open ended invitation if you ever come to Montreal. Take care...

Over the last month or so since I've started reading this thread, I've learned an enormous amount from the fine participants that contribute on a regular basis. I've tried to provide some feedback and comments to help others as well.

One thing I have noticed that seems to be VERY consistant are the daily support/resistance levels coupled with the DM (demi) lines. From the chart below it's pretty obvious why I took that short at 1.3150 (which was one point above DM2 at 1.3149). We had a pullback from the 1.3133 level to the DM2 line and then it faltered. It's next attempt made a lower high and posted a doji candle. That's where I shorted. Having 1.3125 as a target certainly seemed appropriate as this was the daily S2 line.

I planned the trade, traded the plan (and left 10 points on the table ), but it was a nice trade.

When it failed to hit DM1, it would have been nice to go long and have a target of just above the S2 line (for every move down or up, you can be guaranteed to a correction).

The 1.3130 pullback I mentioned was near the lows of the early session, so again another logical place to pullback to.

These support/resistance and DM levels are are key to trading. The reason (IMHO) is because of all the automated trading programs that are out there. Most trading on the Canadian and US equity markets have been done by computer trading, not humans. So I think it's even more prelevent with Forex trading where any Joe can write his own EA and set it in motion.

Pay attention to these levels and watch for pullback and turn arounds to them.

I welcome your comments as I'm still a newbie here and will probably always be one as there's always something new to learn.

Cheers!

Exactly, was posting my explanation on why I picked 1.3130 as pull back area when you posted this.

http://www.actionforex.com/action-in...0120306160863/

Snippet:

Risk aversion dominates the market today as global equities extend this week's slide. Investors are getting nervous as the Greek PSI debt swap deadline approaches. There have been rumors that Greece could extend the March 8 deadline to improve participation, but that was denied. EU Economic and Monetary Affairs Commissioner Rehn expressed his confidence that the PSI deal would be successfully concluded. But markets are clearly not comforted by the words. 12 of the creditors steering committee agreed to join in the debt swap deal so far, those declared should be holding around 20% of the bonds. It should be noted that Greece must achieve 66% participation to avoid disorderly default this month; above 75% to avoid activating CAC which could be deemed as default by ISDA.

Other news from European are not positive. Rehn urged Spanish prime minister Rajoy to define a medium term budget strategy and present the 2012 budget to the commission asap after Rajoy broke the agreement with EU and revised up the deficit target last week. Also, there are talks that Portugal would eventually require a second bailout even though it's on track with its austerity measures as the country is dragged deeper into recession by the austerities. And, there are talks that should Portugal require a second bailout, there could be a Greece-style bone restructuring.

EUR/USD Mid-Day Outlook

Daily Pivots: (S1) 1.3171; (P) 1.3206 (R1) 1.3252; More....
EUR/USD's fall from 1.3486 resumed after brief and weak recovery and reaches as low as 1.3120 so far in early US session. The break of near term channel support argues that whole rebound from 1.2625 has finished with three waves up to 1.3486 already. Intraday bias is back on the downside for 1.2974 support for confirmation. Also, noted that EUR/USD is still maintaining the pattern of lower highs, lower lows since 1.4939. Below 1.2974 will also suggest that fall from 1.4939 is resuming for another flow below 1.2625. On the upside, above 1.3241 minor resistances will turn bias neutral first.
In the bigger picture, price actions from 1.6039 (2008 high) are treated as a long term consolidation pattern and there is no clear indication of completion yet. That is, price actions could remain corrective and relatively unpredictable. Current development suggest that the falling leg from 1.4939 is not finished yet and break of 1.2625 should pave the way to 1.1875 low.

http://www.actionforex.com/images/st...20120306b1.gif

Lolz...Cute

I have no link however it comes from David Stockman interviewed by see below.

It Is A Must Read And Clearly TRUE !!!

http://staticapp.icpsc.com/icp/loadi...fb4/image/jpeg



DAVID STOCKMAN, THE FORMER WHITE HOUSE BUDGET DIRECTOR WAS INTERVIEWED BY BERNARD CONDON...

A MUST READ!

Stockman suggests you'd be a fool to hold anything but cash now, and maybe a few bars of gold.

He thinks the Federal Reserve's efforts to ease the pain from the collapse of our "national leveraged buyout" - his term for decades of reckless, debt-fueled spending by government, families and companies - is pumping stock and bond markets to dangerous heights.

A FEW EXCERPTS FROM THE INTERVIEW...

Condon: What will 10-year Treasurys yield in a year or five years?

Stockman: I have no guess, but I do know where it is now (a yield of about 2 percent) is totally artificial. It's the result of massive purchases by not only the Fed but all of the other central banks of the world.

Condon: What's wrong with that?

Stockman: It doesn't come out of savings. It's made up money. It's printing press money. When the Fed buys $5 billion worth of bonds this morning, which it's doing periodically, it simply deposits $5 billion in the bank accounts of the eight dealers they buy the bonds from.

Condon: And what are the consequences of that?

Stockman: The consequences are horrendous. If you could make the world rich by having all the central banks print unlimited money, then we have been making a mistake for the last several thousand years of human history.

Condon: How does it end?

Stockman: At some point confidence is lost, and people don't want to own the (Treasury) paper. I mean why in the world, when the inflation rate has been 2.5 percent for the last 15 years, would you want to own a five-year note today at 80 basis points (0.8 percent)?

If the central banks ever stop buying, or actually begin to reduce their totally bloated, abnormal, freakishly large balance sheets, all of these speculators are going to sell their bonds in a heartbeat.

That's what happened in Greece.

Here's the heart of the matter.

The Fed is a patsy.

It is a pathetic dependent of the big Wall Street banks, traders and hedge funds.

Everything (it does) is designed to keep this rickety structure from unwinding. If you had a (former Fed Chairman) Paul Volcker running the Fed today 7/8- utterly fearless and independent and willing to scare the hell out of the market any day of the week - you wouldn't have half, you wouldn't have 95 percent, of the speculative positions today.

Condon: You sound as if we're facing a financial crisis like the one that followed the collapse of Lehman Brothers in 2008.

Stockman: Oh, far worse than Lehman. When the real margin call in the great beyond arrives, the carnage will be unimaginable.

Condon: How do investors protect themselves? What about the stock market?

Stockman: I wouldn't touch the stock market with a 100-foot pole. It's a dangerous place. It's not safe for men, women or children.

Condon: Do you own any shares?

Stockman: No.



Condon: Are you in short-term Treasurys?

Stockman: I'm just in short-term, yeah. Call it cash. I have some gold. I'm not going to take any risk.

Condon: Municipal bonds?

Stockman: No.

Condon: No munis, no stocks. Wow. You're not making any money.

Condon: Give me your prescription to fix the economy.

Stockman: We have to eat our broccoli for a good period of time. And that means our taxes are going to go up on everybody, not just the rich.

It means that we have to stop subsidizing debt by getting a sane set of people back in charge of the Fed, getting interest rates back to some kind of level that reflects the risk of holding debt over time.

Thanks go To Frank for the email and Chart.

AS MAY OF YOU KNOW I HAVE BEEN A STRONG PROPONENT OF SHORT BOND/T-NOTE FUTURES.

AS MANY OF YOU ALSO KNOW I HAVE BEEN UNSUCCESSFUL SO FAR REGARDING THIS RECOMMENDATION AS TREASURIES HAVE BEEN LOCKED INTO A SMALL TRADING RANGE SINCE NOVEMBER OF 2011.

http://staticapp.icpsc.com/icp/loadi...aa5/image/jpeg


SOME OF YOU MIGHT ASK -

SO FRANK...WHEN DO YOU THING INTEREST RATES WILL FINALLY START UP AND TREASURIES WILL BREAKOUT TO THE DOWNSIDE?

MY ANSWER IS SIMPLE -

THERE ARE NO GUARANTEES THAT THE MARKET WILL BREAKOUT DOWN OR UP FOR THAT MATTER.

AND OF COURSE -

TREASURIES COULD STAY IN THIS RANGE FOREVER...

Wall Street Must Know News:


Tuesday, March 6, 2012 7:46:32 AM
Romney, Santorum and co. battle it out for Super Tuesday. "It's the economy stupid," someone once said. Mitt Romney seems to agree and has been keeping it the focus of his campaign heading into the 10-state Super Tuesday extravaganza today. For Rick Santorum, "This country is more than just the economy," and he's been talking about Romney's perceived culpability for Obamacare. A key battleground is Ohio, where the top two rivals are roughly equal in the polls.
U.K. mulls revamp of Libor. U.K. regulators and major global banks are discussing an overhaul of the calculation and regulation of the Libor rate amidst numerous investigations into charges it has been manipulated. The inter-bank lending rate sets the benchmark for $350T of contracts across the globe.
The rich get richer. Income discrepancies seem to be growing again, as 93% of all salary gains during 2010 went to the top 1% of earners, a new study shows. Income share for the highest percentile reached a post-1929 peak of 23.5% in 2007, tumbled to 18.1% by 2009, but in 2010 bounced up to 19.7%. It's likely "this uneven recovery has continued in 2011 as the stock market has continued to recover."
GM, Peugeot to develop four cars together. GM (GM) and Peugeot (PEUGY.PK) will develop at least four cars together by 2016 as part of their alliance in which GM will pay €320M for a 7% stake in the French automaker. The partnership can end early under several circumstances, including if one of GM's competitors buys 10% or more of Peugeot stock. GM's purchase of Peugeot's shares is part of a rights issue in which the latter plans to sell €1B ($1.32B) of stock at a 42% discount.
Tornadoes could cost insurers up to $2B. Insurers can expect a claims bill of $1B-$2B from the wave of 150 tornadoes that swept fives states in the south and Midwest last week, risk-modeling firm Eqecat said yesterday.
Roche has "other options" if Illumina deal goes dark. "Roche (RHHBY.PK) and Illumina (ILMN) both stand to benefit from a rapid merger," Roche Chairman Franz Humer said at the company's annual meeting today. But in an acknowledgment that the acquisition efforts have not gone smoothly, Humer added, "we have other options should the transaction fail over price."
Companies feast on cheap debt. Companies sold $19.7B worth of bonds yesterday as they sought to exploit what feel like eternally low interest rates and heavy demand from investors looking to do something semi-useful with their cash. DirecTV (DTV) led the way by raising $4B, with UnitedHealth (UNH), Philips (PHG) and CenturyLink (CTL) also joining the party.
Jury fails to reach verdict in Stanford trial. After over 20 hours of deliberations, the jury in Allen Stanford's $7.1B Ponzi-scheme trial has been unable to reach a verdict. They'll go at it again today after the judge told them to keep deliberating. Stanford faces up to 20 years in prison.
Iran throws the West a bone. Iran has said it is willing to allow IAEA inspectors to visit its Parchin military complex, once. Frequent visits to the base, which is suspected of being involved in the country's nuclear-weapons drive, aren't apparently possible, because accessing it is "a time-consuming process," but a one-off future visit could be arranged. Iran's announcement follows yesterday's meeting between President Obama and Israeli Prime Minister Binyamin Netanyahu in which their differences over the use of force remained.
China to cap expansion of major industries. China is planning to limit growth in some of its largest industries, according to a work report Premiere Wen Jiabao recently delivered to the nation's legislature. The report lists four sectors in which capacity increases should be curbed: auto manufacturing, steel making, shipbuilding and cement production.
IMF upbeat on Portugal. Portugal should be able to return to bond markets next year, Abebe Aemro Selassie, the head of the IMF's aid mission to the country, has said. Private creditors aren't expected to face writedowns, although the path to financial health "will not be easy."
By Yigal Grayeff and the Market Currents team

Today's Markets:
In Asia, Japan -0.6% to 9638. Hong Kong -2.2% to 20806. China -1.4% to 2410. India flat at 17173.
In Europe, at midday, London -1.1%. Paris -1.7%. Frankfurt -1.6%.
Futures at 7:00: Dow -0.8%. S&P -0.9%. Nasdaq -0.9%. Crude -0.6% to $106.12. Gold -0.85% to $1689.40.

Tuesday's economic calendar:
7:45 ICSC Retail Store Sales
8:55 Redbook Chain Store Sales

... boring NY session!

Short @ 1.3119, TP 1.3096, SL trailing 10 points

Here's your link:

http://www.usatoday.com/money/econom...rks/53339644/1

PA is knocking again @ 1.3120 - 1.3080 area ... violating this demand area will open up the door of doom for E/U. Considering breaking this area we will be again hitting hard for 1.27xx.

Stopped out on trailing stop at -4 Grrr

You think you can survive in this business with such strategy?