EurAnalysis

Hi OvaForty,

Here's a slightly different perspective which places the target at 1.1750 area.
Of course on a monthly, 1.1750 could mean anywhere between 1.1650 and 1.1850
I've been tracking this puppy since June 2011 when I opened my 1.4647 short

E/U Monthly

Absolutely! heading back there right now actually! What a glorious weekend!

Good video, certainly seems like our very solid downtrend is set to continue without much to stop it short of a massive combined intervention. Kathy Lien knows her stuff for sure.

I remember the fateful day in May 2011. Trichet disappointed the markets in choosing NOT to continue the ECB rate hikes. The 1.4911 was a number I had on my radar as a MASSIVE level to either open the door to 1.6 or as a prime reversal point.

Unfortunately I made an all time blunder. Leveraged Heavily short at 1.4911 targeting 1.2... Got scared and CLOSED out for a loss at 1.4934(at the ask...almost the VERY TOP)....

Wow I have come a long way as a trader since then.... lol... If we learn from our mistakes then that was a PHD class lesson right there.

http://www.actionforex.com/action-in...0120721170485/

Some late developments in Eurozone should be noted. Spain said on Friday that the GDP will contract -0.5% in 2013, a sharp downward revision from prior projection of 0.2% growth. 2012 projection was revised slightly up from -1.7% to -1.5%. Nonetheless, the data means Spain will remain in recession at least till the end of 2013. Also, Valencia, Spain's most indebted region, sought help under the EUR 18b program passed on Thursday. The act reflected the facto Spain's regions are suffering from liquidity shortage in markets and more are expected to come.

The negative news overshadowed the fact that Eurozone finance ministers approved the terms of the EUR 100b bailout for Spanish banks. Spanish 10 year yield closed at 7.267% and broke above June's high. It should be noted again that 7% is seen by markets as an unsustainable level that eventually led to national bailout of Greece, Ireland and Portugal. So situation in Spain is getting more dangerous now. Another negative news was that ECB said on Friday that it would reject Greek government bonds as collateral for its lending operations. And ECB said it would revisit the eligibility of Greek bonds only after Troika conclude their reviews on Greece's progress in austerities and reforms.

Another development to note is that even since ECB cut the benchmark interest rates to historical low of 0.75% and deposit rate to 0.00% on July 5, Euribor continued to dive. The three month bank-to-bank lending rate dropped to a new record low of 0.451% on Friday. That's the first time it dropped below 3 months dollar Libor since 2008, which fixed at 0.451% on Friday. That's based on market expectation that more rate cut could be seen from ECB ahead. Indeed, ECB Executive Board Member Coeure said that negative rates is an option.

http://www.actionforex.com/images/st...20120721w1.gif

In US, Fed Chairman Bernanke's semi annual testimony was another disappointment. Bernanke noted that the US economy has continued to recover but "activity appears to have decelerated somewhat during the first half of this year". Also, he said that fall in unemployment rate would likely be "frustratingly slow". He described that recent data had a "generally disappointing tone" and warned that the so-called fiscal cliff could push US back into a "shallow recession" early next year. He urged the Congress to "work to address the nation’s fiscal challenges in a way that takes into account both the need for long-run sustainability and the fragility of the recovery". Meanwhile, Bernanke also warned that possibility of worsening in Europe "remains a significant risk to the outlook".

He pledged that Fed is "prepared to take further action as appropriate to promote a stronger economic recovery," but fell short of hinting on additional what and when additional stimulus would be implemented.
BoE minutes for the July 4-5 meeting revealed that the MPC voted unanimously to keep rates unchanged at 0.5%. However, the vote for expanding the asset purchase program by GBP 50b was not unanimous but by 7-2. Spencer Dale and Ben Broadbent preferred to keep the size unchanged. Nonetheless, policy members felt that the case for additional stimulus was "compelling and stronger than at the previous meeting" as there were "increasing signs that the threat of a disorderly resolution of the financial tensions in the euro area was affecting growth at home". The minutes noted that inflation has moderated faster than projected in May's quarterly inflation report due to "reduction in global energy prices". And "all members of the Committee judged that further economic stimulus was required in order to meet the inflation target in the medium term."

Meanwhile, the impact of the Funding for Lending Scheme and other policy initiatives might "alter the committee's assessment" of the effectiveness of further rate cut and would be reviewed. That is, rate cut is back on the radar in MPC's mind.

Damn straight.. I got my PHD at the beginning of the 07/08 crisis. Haven't messed up since. My dad was right when he said "A university education is essential, but the school of hard knocks is where you get your real education"

Technical Highlights
S&P 500 jumped to 1380.39 last week but failed to sustain gain. While near term bias remains on the upside, it seems that investors hesitate to push the index further towards 1400 psychological level. Nonetheless,, as long as 1325.41 holds, further rally will remain in favor. And as usual, should stocks rally, Aussie would be benefited most.

http://www.actionforex.com/images/st...20120721w1.gif

Dollar index's strong rebound of Friday argues that recent rally might be resuming. Initial bias is mildly on the upside this week and break of 83.83 resistance should send dollar index to 61.8% projection of 78.60 to 83.54 from 81.18 at 84.23. Technically, we're favoring some resistance on dollar and EUR/USD approaches 1.2132 projection level and USD/CHF approaches 0.9916. However, this levels look vulnerable considering over all development in the markets. Should dollar index breaks 83.83, EUR/USD should at least breach 1.2 psychological level ahead.

http://www.actionforex.com/images/st...20120721w1.gif

schadenfreude.j/k apart but seriously i can feel that pain.market can make one humble,appreciated

all of u got ur Phd's,damn it i am still in my nursery.i have fallen so many time sometime feel like rather than learning to walk i may go crippled becos of multiple bone fracture.

Psychological Challenges of Speculative Trading

An Extract from the book of “Beat the Odds in Forex Trading” by Igor Toshchakov, published by Wiley

A successful trader’s career mainly depends on his or her psychological stability in stressful situations, which are common in the process of trading. Theoretical knowledge can be acquired by reading professional literature; practical skills and experience are acquired in the process of actual trading. The most difficult process is adjusting psychological stress, because in real life it is impossible to completely eliminate the stress factor influencing human activity. Underestimating the stress factor could play a mean trick on trader and even completely block their abilities to make reasonable decisions in real trading situations. The psychological stress of those trading in the FOREX (and any other) market is extremely high. Traders must work under permanent psychological pressure, making decisions in highly unpredictable and uncertain market situations.

Each trader goes through mistakes, failures, and losses in his or her own way, in accord with his or her personality and temper. Some might blame their failure on market’s “wrong behaviour”, which didn’t comply with the trader’s brilliant forecast and caused the failure of the magnificently planned speculative combination. Others blame themselves and their own inabilities to make right decisions in situations, which afterwards seem to be simple. It is an interesting fact that, in hindsight, traders usually find the decision that should have been made at the lost critical moment and can reasonably prove their point of view. Why can they find the right decision so easily and quickly in hindsight? Was the trader unable to do so at the right moment? I don’t think it can be simply explained by looking at yesterday’s situation from today’s point of view. I do not think it can be explained by the fact that classical technical analysis at allows for multiple explanations of almost any market situation. It is always possible to find an appropriate basic explanation for any market shift after the event takes place. In the heat of the moment, however, the trader was influence by stress, and that stress caused the error. This is proven by the fact that most novice traders show exceptionally good (and even phenomenal) results trading dummy accounts but can’t even come near those result when trading with real money.

Being permanently under stress, a trader can often make insufficiently considered, impulsive, and therefore, wrong decisions that result in losses or premature liquidation of profitable position, that is, in lost profit. Sometimes, after a few successive failures with various trades, traders become fearful of the market. They are in as state of psychological stupor, and even a simple market situation may cause panic. They cannot overcome their emotions or soberly evaluate the current situation, and they are unable to make any decision – reasonable or otherwise. In many cases when the market situation shifts against the trader’s position, they can only passively watch the growth of their losses, because they are unable to make any decision at all. Often, after the market stabilizes and traders have the opportunity to calmly analyse daily diagrams of currency fluctuations, they come to the conclusion that the main cause of failure was not the lack of knowledge or training but their own emotions. However, the situation cannot be reversed. Time has passed, money has been lost, even everything should be begun again.

Another problem that causes severe and even catastrophic consequences is the trader’s wilful thinking. In this case, treaders are sure that their forecast of market trends is solely correct. They feel the market cannot and should not give any surprises. They do not consider other options that could be helpful or they think of other options in a vague and uncertain form. Sometimes, traders consider a market shift against their positions. They acquire new contracts at a lower price in the hope that the market situation will come back, and all the positions will become highly profitable. Afterwards, as the situation worsens, they will be able to come out of the market without serious losses. Being sire they are right, traders lose the ability to critically evaluate the condition of the market and accordingly their own position in the market. In this case, they consider only those basic and technical features that justify their wishful thinking, and they discard the contradicting features. This wishful thinking costs them dearly and can lead to psychological frustration. The market’s “wrong behaviour” not only deprives traders of a certain amount of money and often ruins their trading account, but also undermines their self-esteem and their hopes of being a winner in the trading battle.

After such a loss, traders blame themselves, repeatedly going through the details of the unsuccessful trade. They blame the market for the “wrong behaviour” or themselves for errors in what then seems an absolutely clear situation. Sometimes, the trader-market relationship takes the form of a vendetta. Traders consider the market as their personal enemy, treat it in an unfriendly way (even with hate) and dream of immediate revenge. Doing so, they miss the fact ht at they are essentially blaming nature for changing sunny weather to rain. It is very important to be prepared beforehand for this change. Traders should always have close at hand one or few options in case of sudden change of the situation/weather, so that their foresight assures their good time or good profit.

The third main psychological problem is trader uncertainty, especially when traders are inexperienced in abilities and skills – specifically about each market position they hold. Immediately after each position is opened and a money contract is bought, treaders start questioning their choices. This is revealed most vividly in the case of a moderately active market at the moment of fluctuations close to the opening price of the position. Any moment (even insignificant) against their position causes traders to have an irresistible desire to sell the recently acquired contract to limit losses, until it is too late and the market does not shift too far away from their position opening price. On the other hand, an insignificant market shift in the desirable direction causes the same desire to eliminate the position, until it provides for any (even tiny) profit and before this profit does not turn into losses.

Sacred and trouble traders rush and race about. They open and liquidate their positions too often, and experience many small losses and gains. Within a short period of time, they turn intermittently into bulls or bears. As a result, they suffer losses on a dealer’s spread and/or commissions when there were no significant market changes, and all the market fluctuations were no more than just regular market “noise”. Such losses are typical for beginners and individual traders with small investment capital or little experience and insufficiently psychological preparation.

Not uncommon are cases of traders’ impulsive decisions on trading, without any plans or serious preliminary market analysis. The position is opened under an impulsive, invalid emotional reaction. Often, it can be explained by traders’ fear of losing a brilliant opportunity to earn money they think is being offered by the market at that moment. I have witnessed these attempts to jump onto the last carriage of a departing train, and such attempts have ruined a lot of traders. Many traders cannot calmly watch any kind of market movements. Some of my students have confirmed this reality. If they have no positions at the moment of more or less significant market movement, they consider it as a lost opportunity to gain profit. This can inflict a serious shock to them.

When they have no position, they seem unable to realize that each market movement can be considered both ways, and the opposite situation can quite possibly develop. Statistics show that, at each market movement, the chances to lose are much higher than to profit. How does it happen that reasonable people (who in everyday life, without any emotion, can watch a bank casher counting other people’s money) consider the fact of market movement as a threat to their own pockets? Why is other people’s money in the hands of a bank cashier not considered as a lost profit, whereas capital shift on the market and the corresponding quote fluctuations are causes of negative emotions? I think the answer is in the illusory simplicity of business itself, which is considered by many people as a good and simple opportunity to earn a lot of easy money. Similar notions are widely spread among novice currency traders. The soon traders abandon such ideas, the sooner they become professionally efficient traders.

The most difficult problem for every trader (regardless of their experiences) is to learn as quickly as possible how to recover quickly from losses, which are inevitable in this business. At the same time, they must learn to handle shocks and psychological damage inflicted by the losses, because there situations could negatively influence their future work.

The losses themselves and the fear of losing, both of which permanently torture traders, negatively influence their ability to make reasonable decisions in a complicated situation. These factors also undermine traders’ ability to follow their own rules about trade strategies and systems.

I have become personally acquainted with hundreds of traders and have watched their activities. I have taught many students, and have had my own experience as a trader at various steps of my career in the currency market. Therefore, I have come to the conclusion that the main causes of trader failures in speculative operations in the FOREX marker are without a doubt those associated with psychological trauma – the inability to control their own emotions and to find an adequate way to fight stress.

My research was turning up articles on it. Today one of the most respected investors in Canada has this to say.

http://kingworldnews.com/kingworldne...ing_About.html

Sprott - The Frightening Black Swan Nobody Is Talking About








Sprott stunned KWN by speaking about his greatest fear: “My biggest black swan, Eric, is that I think I’ll be right one day. My worry is that one day they just shut everything down.” They say, ‘You know what, we just can’t keep this up anymore, the whole Ponzi (scheme), we just can’t do it and we shut it down.’ All of the markets freeze, and the stocks that you are short are never allowed to go where they were.



They might cease gold trading, in the normal sense, or maybe they will even outlaw gold trading. But that’s my biggest worry. Because everything else, everything that one would theorize and watch, in practical terms, all (of it) argues for gold and silver to win the day. So just stay the course.”



The written portion above is just a small part of this extraordinary interview with billionaire Eric Sprott. Sprott covers global markets, gold, silver, his greatest fear, what investors should be doing right now, what to expect next, the mining shares and much more. The KWN Eric Sprott interview will be available Sunday and you can listen to it by CLICKING HERE.



The interviews with MEP Nigel Farage, Peter Schiff, John Embry, Egon von Greyerz and Bill Fleckenstein are available now. Also, be sure to listen to this week’s line-up of other KWN interviews which include Jean-Marie Eveillard (oversees $50 billion), Michael Pento, Gerald Celente by CLICKING HERE.



2012 by King World News. All Rights Reserved. This material may not be published, broadcast, rewritten, or redistributed. However, linking directly to the blog page is permitted and encouraged.

Quit Being a Drama Queen

Posted: 20 Jul 2012 07:08 PM PDT
I struggle to cope with drama queens. You know the types – they always have something that’s going wrong, someone that’s making their life a misery or some kind of outrageous situation that’s causing them untold anxiety, the like of which I’ve clearly never experienced. They have the uncanny ability to grab any given minor misdemeanor and whip it up into such a hoopla you know you’ll be hearing about it for the next 4 months.

These types of people make me kinda crazy.
The funny thing is that while they genuinely feel that they have a valid reason to be stressed/upset/annoyed, in reality all they are doing is shifting the blame for their crappy lives onto random unlucky people or events without stopping to think that perhaps they themselves might have some small part to play.
http://www.roguetraderette.com/wp-co...2/07/drama.jpg
Drama queens make terrible traders. In fact most people make naturally terrible traders (find out why here, here and here) but people with a penchant to blame all their problems on external stuff are the most doomed of all.

When we blame someone or something else for the crap in our lives, what we are actually doing is forfeiting any power that we may have to fix things because we’re basically saying that we’re not responsible and don’t have anything to do with it.

But we do. It’s easy to cram three donuts into our mouths at breakfast, then blame our ‘big bones’ or hereditary fat genes for our tree trunk thighs.

It’s easy to blame our financial advisor for losing our retirement funds whilst happily ignoring the fact that we were greedy enough and foolish enough to put all our savings into a scheme we didn’t understand.

Traders are quick to revel in the glory of a profitable trade, then turn around and blame external influences for their losses. This is a slippery slope, my friends, and the end result looks a lot like a failed, frustrated trader spouting rubbish like, “The market is rigged!” and “HFT have ruined the markets!”

If you want to trade, the responsibility is all yours. You can’t blame the market when it takes your cash – it’s YOU, and nothing else.

If you can’t accept your part in the circumstances of your life, you’ll never understand why you can’t make a go of trading. It’s not until you start looking at you, and the role you play in your results that you have any real chance at success.
***

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The Great Demise: EUR at Two-Year Low
Justin Burkhardt | July 19, 2012

Strength is fading. Parity is visible. Reform is the only option. European markets are tumbling and the euro has slipped to record lows against several major currencies. The market is in reaction mode responding Spain and Greece in the headlines.

Investors have cast their doubts that the debt-ridden nation of Spain can avoid another full-blown bailout after Valencia, the third largest city in Spain, called out for aid from Madrid. Spain continues to march towards its fiscal demise, while Greece stands perched at the edge of its own fiscal cliff – Which country will be the first domino?

The European Central Bank’s have announced that they are suspending the eligibility of Greek bonds as collateral.

After a brief respite, Spain’s borrowing costs have once again breached the unsustainable level of 7 percent; and there are not signs of relief any time soon. Meanwhile, the country’s credit rating is being pushed further into “junk territory” as Egan-Jones aggressively downgraded Spain for the sixth time since mid-April. Egan-Jones’s newly adjusted rate is a double-C-plus which is a downgrade from a triple-C-plus. According to Egan-Jones, Spain’s probability of default in the next year is 35%.

The ECB’s decision to suspend Greek bond eligibility resulted from the upcoming expiration of a Greek bond swap that was launched earlier this year. Greek sovereign bonds "will become, for the time-being, ineligible for use as collateral in euro-system monetary policy operations," said the ECB. This decision may not be permanent, as the ECB has stated that they will reassess bond eligibility once experts have reviewed Greece’s progress in meeting the conditions set within their bailout program.

These events have set fire to the streets and investors are quickly fleeing the scene.

The euro plummeted to record lows against the Australian, Canadian and New Zealand dollar; and is falling fast against the U.S. dollar reaching a low of $1.2143 this morning.

This move should not come as a surprise to any of my readers. I have been short on the EUR.USD since its consolidation back in May of 2012 at $1.31 and have projected that the first leg of this decline would send it to the $1.19 region.

http://img-ak.verticalresponse.com/m...57.39%20PM.gif

True to a point. An objective understanding of things and their flaws however is an excellent exercise in the use of ones skills of discrimination.

Thats where we get to the market. Its understanding takes lots of hard work but there is a "holy grail" out there that may be gleaned, through insight. That however is very difficult, calls for a good degree of intuition, patience and lots of late nights. Like learning how to ride a bike.

In the meantime, one can understand the frustration of many who trade as that is a long, slow exercise dependant on many "eureka" moments. So lets not be too hard on fellow traders making an extremely difficult journey. It is a very solitary road and we are all human.

Giving birth to the post Cold War world of globalised and free moving capital was never going to be easy. Europe was a coddled frontline child of a particular confrontation in an otherwise austere world (and I include the US in this group to the extent of social democratic infrastructure) ripe with opportunity. Is anyone surprised that it is having to endure an adjustment that brings it in line with the rest of this world.

This will be a very difficutl process but if anything, I expect the markets to emerge from this leaner and meaner. Of course those used to a more predictable time will either relearn their skills or fall by the wayside.

Another drunken story:

Deeper into the darkness or not, it is not for us to decide. It is for the mankind. I will be watching him closely, to find the breakpoint. For that purpuse, I will be using momentum.

T

heloo all my fren.......im back......hehehhee

Good watch

A very good friend of mine and great trader sent me this link

Excellent historical summation of how we got to this point.

Here's a show more focused on Greece and what's at stake for the future of the EuroZone.

Enjoy

Monetary Insanity: ECB Considers Negative Interest Rates, Looking for Clues From Denmark; Anteaters and Hurricanes




The ECB is now pondering monetary insanity: ECB's Coeure says negative bank deposit rate an option

Cutting the deposit rate the European Central Bank offers lenders in the euro zone below zero is an option, ECB Executive Board Member Benoit Coeure said on Friday.

Speaking in Mexico, Coeure said the bank needed to take the rate down 25 basis points to zero to match its cut in the reference rate.

He said policymakers would need to consider whether it could take the deposit rate below zero, which would mean the central bank would start charging banks for the privilege of parking spare cash in the ECB.

"It's still possible," Coeure told students at an event in Mexico City. "It's true that we are hitting a psychological limit at zero. And it's unclear whether markets can function at negative interest rates. Some of them can."

"Some of them apparently can't. So before making the next step, which would be moving the deposit facility to a negative yield, we'll reflect about it," he added.

Denmark introduced a negative interest rate this month and the ECB is watching closely how the move plays out.

http://globaleconomicanalysis.blogsp...considers.html
Read more at http://globaleconomicanalysis.blogsp...eSsrpYdG068.99

http://www.guardian.co.uk/business/2...my?INTCMP=SRCH


http://static.guim.co.uk/sys-images/...Cayman-008.jpgThe Cayman Islands: a favourite haven from the taxman for the global elite. Photograph: David Doubilet/National Geographic/Getty Images


A global super-rich elite has exploited gaps in cross-border tax rules to hide an extraordinary £13 trillion ($21tn) of wealth offshore – as much as the American and Japanese GDPs put together – according to research commissioned by the campaign group Tax Justice Network.

James Henry, former chief economist at consultancy McKinsey and an expert on tax havens, has compiled the most detailed estimates yet of the size of the offshore economy in a new report, The Price of Offshore Revisited, released exclusively to the Observer.

He shows that at least £13tn – perhaps up to £20tn – has leaked out of scores of countries into secretive jurisdictions such as Switzerland and the Cayman Islands with the help of private banks, which vie to attract the assets of so-called high net-worth individuals. Their wealth is, as Henry puts it, "protected by a highly paid, industrious bevy of professional enablers in the private banking, legal, accounting and investment industries taking advantage of the increasingly borderless, frictionless global economy". According to Henry's research, the top 10 private banks, which include UBS and Credit Suisse in Switzerland, as well as the US investment bank Goldman Sachs, managed more than £4tn in 2010, a sharp rise from £1.5tn five years earlier.

The detailed analysis in the report, compiled using data from a range of sources, including the Bank of International Settlements and the International Monetary Fund, suggests that for many developing countries the cumulative value of the capital that has flowed out of their economies since the 1970s would be more than enough to pay off their debts to the rest of the world.

Oil-rich states with an internationally mobile elite have been especially prone to watching their wealth disappear into offshore bank accounts instead of being invested at home, the research suggests. Once the returns on investing the hidden assets is included, almost £500bn has left Russia since the early 1990s when its economy was opened up. Saudi Arabia has seen £197bn flood out since the mid-1970s, and Nigeria £196bn.

"The problem here is that the assets of these countries are held by a small number of wealthy individuals while the debts are shouldered by the ordinary people of these countries through their governments," the report says.

The sheer size of the cash pile sitting out of reach of tax authorities is so great that it suggests standard measures of inequality radically underestimate the true gap between rich and poor. According to Henry's calculations, £6.3tn of assets is owned by only 92,000 people, or 0.001% of the world's population – a tiny class of the mega-rich who have more in common with each other than those at the bottom of the income scale in their own societies.

"These estimates reveal a staggering failure: inequality is much, much worse than official statistics show, but politicians are still relying on trickle-down to transfer wealth to poorer people," said John Christensen of the Tax Justice Network. "People on the street have no illusions about how unfair the situation has become."

TUC general secretary Brendan Barber said: "Countries around the world are under intense pressure to reduce their deficits and governments cannot afford to let so much wealth slip past into tax havens.

"Closing down the tax loopholes exploited by multinationals and the super-rich to avoid paying their fair share will reduce the deficit. This way the government can focus on stimulating the economy, rather than squeezing the life out of it with cuts and tax rises for the 99% of people who aren't rich enough to avoid paying their taxes."

Assuming the £13tn mountain of assets earned an average 3% a year for its owners, and governments were able to tax that income at 30%, it would generate a bumper £121bn in revenues – more than rich countries spend on aid to the developing world each year.

Groups such as UK Uncut have focused attention on the paltry tax bills of some highly wealthy individuals, such as Topshop owner Sir Philip Green, with campaigners at one recent protest shouting: "Where did all the money go? He took it off to Monaco!" Much of Green's retail empire is owned by his wife, Tina, who lives in the low-tax principality.

A spokeswoman for UK Uncut said: "People like Philip Green use public services – they need the streets to be cleaned, people need public transport to get to their shops – but they don't want to pay for it."

Leaders of G20 countries have repeatedly pledged to close down tax havens since the financial crisis of 2008, when the secrecy shrouding parts of the banking system was widely seen as exacerbating instability. But many countries still refuse to make details of individuals' financial worth available to the tax authorities in their home countries as a matter of course. Tax Justice Network would like to see this kind of exchange of information become standard practice, to prevent rich individuals playing off one jurisdiction against another.

"The very existence of the global offshore industry, and the tax-free status of the enormous sums invested by their wealthy clients, is predicated on secrecy," said Henry.

CurrencyMan: Now You Know Also...