EurAnalysis

Yen gapping against commodity currencies!

thanks Medici,

Hello.

Good week for everybody, and i´m gonna start adding another sell.
Second sell, sl behind the high of the last candle.

Health for all.

http://3.bp.blogspot.com/-O890CznAjN...gap-logome.jpg

My Ava FX platform shows 7:50 PM EST.

Stay Tuned... Good Trading...

Previous 1.2 and now forecast 0.6 We shall see in 35 minutes.

Pretty Bad - Not Much Reaction

0.3 instead of 0.6 and previous was 1.2

On Edit at 8:07 PM

http://www.telegraph.co.uk/finance/c...-sentence.html

Snippet:

Five years into the Long Slump it almost seems as if we are back to square one.
http://i.telegraph.co.uk/multimedia/...B_2292252b.jpgSome date the crisis to August 9 2007, the day it became clear that Europe’s banks were up to their necks in US housing debt. The ECB flooded markets with €95bn of liquidity. It seemed a lot of money then. The term “trillion” was still banned by the Telegraph style book in those innocent days. We have since learned to swing with the modern dance music from central banks. Photo: Reuters







http://i.telegraph.co.uk/multimedia/...c_1805020j.jpg
By Ambrose Evans-Pritchard, International business editor


5:30PM BST 12 Aug 2012

China is sufficiently alarmed by the flint hardness of its "soft-landing" to talk up trillions of fresh stimulus. The European Central Bank is preparing to print “whatever it takes”to save Spain and Italy. Markets are pricing in an 80pc chance of yet more printing by the US Federal Reserve in September or soon after.

There is no doubt that the three superpowers acting in concert can launch a mini-cycle of growth early next year - assuming they deliver on their rhetoric - but the twin headwinds of debt-leveraging and excess manufacturing plant across the globe cannot easily be conjured away.


The world remains in barely contained slump. Industrial output is still below earlier peaks in Germany (-2), US (-3), Canada (-8) France (-9), Sweden (-10), Britain (-11), Belgium (-12), Japan (-15), Hungary (-15) Italy (-17), Spain (-22), Greece (-27), according to St Louis Fed data. By that gauge this is proving more intractable than the Great Depression.


Some date the crisis to August 9 2007, the day it became clear that Europe’s banks were up to their necks in US housing debt. The ECB flooded markets with €95bn of liquidity. It seemed a lot of money then. The term “trillion” was still banned by the Telegraph style book in those innocent days. We have since learned to swing with the modern dance music from central banks.


For me, the defining moment was twelve days later when yields on 3-month US Treasury bills to crashed from 3.76pc to 2.55pc in just two hours. At first we thought it was a mistake, a screen glitch. Nothing like this had happened before, not during the crashes of 1929 or 1987, or after the Twin Towers attack on 9/11.

CONCLUSION:

So this is where we are in the summer of 2012. The imbalances are slowly correcting. Wage inflation has eroded Asia’s competitiveness. China’s current account surplus has dropped from 10pc of GDP in 2007 to around 2.5pc this year.

Yet Europe refused to adjust. Germany is still running a surplus of 5.2pc, down from 7.4pc in 2007. The North has refused to offset the demand squeeze in Club Med. Indeed, Germany legislated its own internal squeeze through a balanced budget law and imposed this curse on the rest of Euroland. The effect is to trap Euroland in chronic slump, at least until the victims rebel and take matters into their own hands.

As for our debt mountain, we have barely begun the great purge. Michala Marcussen from Societe Generale says the healthy level is around 200pc of GDP for advanced economies. If so, we have 100 points to cut.

This cannot be achieved by austerity alone because economic contraction would tip us all into a Grecian vortex. Such a cure is self-defeating.

Much of the debt will have to be written off. Whether this done by inflation (1945-1952) or default (1930-1934) will be the great political battle of this decade. Pick your side. Pick your history.

August 11, 2012 in 'The Commodity Wire'





'The Commodity Wire' by Al Abaroa'The Commodity Wire' by Al Abaroa





Market Perspective: I hope everyone’s been enjoying the Olympics. I’ve found the past two weeks of competition to be very exciting and want to extend a proud congratulations to all of the athletes. I have to admit that the television coverage has been very extensive and I’ve gotten drawn into some competitions that I didn’t even realize were (or why they are) Olympic events.


Maybe I’m not alone out there, because volume on the NYSE has consistently fallen off over the past two weeks. Friday’s volume was the lowest since July 6th, which was a holiday shortened week of trading. Although the S&P 500 futures eked out a gain for the week, it appeared to be a struggle. The range for the week was a mere 16.5 points and had a final closing print of 1402.50 (now only 17.25 points from the 2012 high). There wasn’t much in the way of market moving economic data last week and the indecisive price action was enough to press the S&P Volatility Index (VIX) below 15.00 (14.74 settlement). In last week’s wire I penned, “The VIX is also teetering on territory that it rarely settles into. The index closed at 15.64 on Friday.


While past performance is not necessarily indicative of future results, the 15.00 level has been a fairly consistent line in the sand for the VIX over time. It has spent only a handful of weeks below the level since mid-2007. I will be watching the indicator closely for price action at the 15.00 level as a potential clue to market direction.”

This indicator continues to be at the top of my radar list as it has consistently carried an inverse correlation to its equity counterpart. There will be ample amounts of economic data coming out this week as we will get readings on Retail Sales, PPI, CPI, Industrial Production and a recent favorite of mine, the Philly Fed Survey. The survey has recently been a fairly reliable forecaster of the ISM Manufacturing data that is released a few weeks later. Analyst’s consensus estimates are for positive improvements over the previous month’s data in each one of these reports. The following quandary remains in place; will poor economic readings boost confidence in another round of quantitative easing and therefore support the “risk asset” markets or will improving economic data stave off the Fed and lend to upward price action anyway? Perhaps some other catalyst will come about to make the decision for us. For now, the market seems content that tail risk is about as outlandish as an Olympic basketball team scoring 156 points in a game. Stay tuned…


Technicals: Crude futures traded higher this past week as it followed up on the previous Friday’s 4.5% surge. However, the rally was stopped in its tracks at a basket of resistance near $95.00. December futures were unable to mark a close over the downward sloping 100 day moving average after attempting to break above it for the last four straight sessions. Other technical resistance residing in this neighborhood include: the 50% retracement of the $27.00 per barrel drop that occurred from March 23rd through June 28th ($94.57) and the 61.8% retracement of the more impulsive section of the collapse that occurred from May 1st through June 28th ($96.52). In my opinion, this impulsive section of the drop is indicative of a 3rd wave as suggested by Elliott Wave theory and the rebound since June 28th would be labeled as corrective. If this analysis is interpreted correctly, it would imply that a 5th wave lower is to be expected. While past performance is not necessarily indicative of future results, momentum indicators such as the MACD Histogram and the RSI are both providing bearish divergences which are commonplace near the end of trends. As with the earlier discussed S&P 500, volatility is waning over the past two weeks.


Implied Volatility on Crude Oil options fell to 27% as of Friday’s trading. While this is not the lowest reading posted over the past 6 years, it is in the 15th percentile and provides further evidence that “risk asset” holders may be too content. If futures start to break lower this week, be on the lookout for a Kingsview Financial Options Pro Report with trade illustrations on how to trade the downside in this market. If you are not a subscriber and would like a free copy of this report, give us a call and one of our Kingsview Financial team members will oblige your request or feel free to email me.


Comments or Questions? Please email [font=Times New Roman][email protected][/font]

Hey Everybody,

It's been a while since I've posted. I decided to take the last month off entirely from trading and do a little traveling. Flew out to Oregon to visit some family and friends, after that we spent a few weeks out in California! We had a blast!

Looks like I didn't miss much action... Most currencies have been range bound with the exception of the AUD cross pairs so I didn't miss much.

Anyways, it's back in the saddle for me.

Hope everyone has been enjoying their summer and I also hope you all had many green pips!

Welcome back

Thanks Rekon.

How have you been lately?

http://networkedblogs.com/zsVcQ

Snippet:

What is the second half of 2012 going to bring? Are things going to get even worse than they are right now? Unfortunately, that appears more likely with each passing day. I will admit that I am extremely concerned about the second half of 2012. Historically, a financial crisis is much more likely to begin in the fall than during any other season of the year. Just think about it. The stock market crash of 1929 happened in the fall. “Black Monday” happened on October 19th, 1987. The financial crisis of 2008 started in the fall. There just seems to be something about the fall that brings out the worst in the financial markets. But of course there is not a stock market crash every year. So are there specific reasons why we should be extremely concerned about what is coming this year? Yes, there are. The ingredients for a “perfect storm” are slowly coming together, and in the months ahead we could very well see the next wave of the economic collapse strike. Sadly, we have never even come close to recovering from the last recession, and this next crisis might end up being even more painful than the last one.

The following are 17 reasons to be extremely concerned about the second half of 2012….

#1 Historical Trends
A recent IMF research paper by Luc Laeven and Fabián Valencia showed that a banking crisis is far more likely to start in September than in any other month. The following chart is from their report….
http://theeconomiccollapseblog.com/w...th-440x302.jpg

#6 Spain
The Spanish financial system is basically a total nightmare at this point. Moody’s recently downgraded Spanish debt to one level above junk status, and earlier this week Moody’s downgraded the credit ratings of 28 major Spanish banks.
According to CNBC, Spain’s short-term borrowing costs are now about three times higher than they were just one month ago….

Spain’s short-term borrowing costs nearly tripled at auction on Tuesday, underlining the country’s precarious finances as it struggles against recession and juggles with a debt crisis among its newly downgraded banks.
The yield paid on a 3-month bill was 2.362 percent, up from just 0.846 percent a month ago. For six-month paper, it leapt to 3.237 percent from 1.737 percent in May.

Needless to say, this is very, very bad news.

#7 Italy
The situation in Italy continues to deteriorate and many analysts believe that it could be one of the next dominoes to fall. The following is from a recent Businessweek article….

The euro zone’s third-biggest economy is seen as the next domino at risk of toppling after the European Union’s June 9 deal to lend Spain $125 billion in bank bailout funds. Yields on Italy’s 10-year government bonds reached 6.2 percent on June 13, up from just 4.8 percent in March. By pushing up Italy’s borrowing costs out of fear of default, investors are making a default more likely.

A recent Fortune article detailed some of the economic fundamentals that have so many economists deeply concerned about the Italian economy right now….

The main glaring risk threats that could propel Italy down the path to become Europe’s next domino is the size of country’s outstanding debt (at €1.9 trillion or 120% of GDP); the mountain of debt it has to roll over in the next 12 months (nearly €400 billion); and the market’s cracking credibility around Prime Minister Mario Monti’s ability to reduce the country’s fiscal footprint and spur growth.

Further, fear around Italy’s creditworthiness, which has recently been expressed by near cycle highs in sovereign CDS spreads and government yields on the 10-year bond, follow some rather glaring negative fundamentals over recent quarters and years: declining GDP over the last three consecutive quarters; a rising unemployment rate (especially among its youth); deterioration in labor market competitiveness; and increased competition for export goods to its key trading partners.

#17 The U.S. Election
It is being reported that Barack Obama is putting together an army of “thousands of lawyers” to deal with any disputes that arise over voting procedures or results. It certainly looks like this upcoming election is going to be extremely close, and there is the potential that we could end up facing another Bush v. Gore scenario where the fate of the presidency is determined in court. This campaign season is likely to be exceptionally nasty, and I fear what may happen if there is not a decisive winner on election day. The possibility of significant civil unrest is certainly there.

We definitely live in “interesting” times.

Personally, I am deeply concerned about the September, October, November time frame.

The other day, Joe Biden delivered a speech in which he made the following statement….

“It’s A Depression For Millions And Millions Of Americans”
And what Biden said was right for once. Millions of Americans are out of work right now and millions of Americans have fallen out of the middle class in recent years. If you have lost everything, it does feel like you are living through a depression.
When people lose everything, they tend to get desperate. And desperate people do desperate things – especially when they are angry.

A whole host of recent opinion polls have shown that anger and frustration in the United States are rising to unprecedented levels. The ingredients are certainly there for an explosion. Someone just needs to come along and light the fuse. We truly do live in frightening times.

Let us hope for the best, but let us also prepare for the worst.
http://theeconomiccollapseblog.com/w...kr-440x330.jpg
The Economic Collapse

Sadly, most Americans do not even realize how we got into this mess. The following is from a recent article by Professor Steven Yates….

It should have been clear that the country—indeed, Western civilization itself—was on the wrong trajectory as governments and central banks, working in tandem, severed ties between their currencies and precious metals, allowing massive credit expansion to run rampant and the national debt to skyrocket—making, e.g., the pseudo-prosperity of the roaring 1990s possible. Nixon had “closed the gold window” on August 15, 1971; our national debt was around $400 billion. Slightly over ten years later, the debt crossed the $1 trillion threshold. Ten years after that, it reached $6 trillion. When George W. Bush left office having been the biggest spending Republican in U.S. history, it had risen to over $11 trillion.

Today, under the watch of the catastrophic Obama presidency, by the time this reaches print the national debt might have surmounted $16 trillion with no end in sight.

The United States has accumulated the greatest mountain of debt in the history of the world and it will totally crush us at some point.

Unfortunately, the vast majority of Americans are living paycheck to paycheck and are totally unprepared for the economic chaos that is coming.

One study found that 64 percent of all Americans have less than $1000 in the bank.

Can you believe that?

Even though we could be on the verge of another global food crisis, most Americans do not have enough food in their homes to last a single month.

Even though the U.S. economy is on the verge of another recession, most Americans are still running out and buying toys that they don’t need and paying for them with credit cards that they should not be using.

If you want to see where we are headed, just look at Greece and Spain.
They are going through economic hell, and we will be joining them soon enough.
Get ready while you can.

#theeconomiccollapse


http://a6.sphotos.ak.fbcdn.net/hphot...74154079_n.jpg

http://www.sprott.com/markets-at-a-g...blem,-part-ii/

A Great Read From Sprott...

Snippet:

It’s clear that governments are preparing for more. A key component to erasing government debt through inflation is extending the duration (maturity) of one’s outstanding bonds. In a normal bond market, negative real interest rates make it difficult to roll over short-term debt at low borrowing rates (although financial repression and captive financial institutions certainly help to keep rates lower than they normally would be). Due to this tendency for short-term rates to rise with inflation, however, it is in the best interests of highly-indebted countries to issue the majority of their bonds at the long end of the yield curve. As Figure 4 shows, the US Treasury is proactively planning to increase the maturity of its outstanding debt (green line) in order to maximize its benefit from inflation erosion. In other words, they are capitalizing on the current flight to safety to set the stage for further financial repression down the road.

The same is true for the U.K., which benefits from one of the longest weighted-average maturity of debt in the developed world. For Eurozone countries to do away with their current debt overhang they will either have to default (the least preferred option for political reasons) or use the good old combination of steady inflation and financial repression (feared by the Germans and the ECB central planners).

FIGURE 4: U.S. TREASURY WEIGHTED AVERAGE MATURITY OF MARKETABLE DEBThttp://www.sprott.com/media/183873/w...ity-debt-E.gif
Source: U.S. Treasury Office of Debt Management, Fiscal Year 2012 Q1 Report
Conclusion

On both sides of the Atlantic, the largest contributors to the current crisis are excessive debt and spending. We are now at a point where additional government stimulus measures will have negligible, if not detrimental effects on the economy and long-term growth. Debt has to be reduced, not increased by more deficits. Central planners have demonstrated that they don’t have the discipline to implement the Keynesian model of surplus in good times in order to finance deficits in bad times. We have now reached the limit of indebtedness and need to muddle through a painful but necessary deleveraging.

The politically favoured option of financial repression and negative real interest rates has important implications. Negative real interest rates are basically a thinly disguised tax on savers and a subsidy to profligate borrowers. By definition, taxes distort incentives and, as discussed earlier, discourage savings. Also, financial institutions, which are traditionally supposed to funnel savings towards productive investments, are restrained from doing so because a large share of their balance sheets is encumbered by government securities. The same is true for pension funds, which instead of holding corporate paper or shares, now hold an ever growing share of public debt. Pensioners, who are also savers, get hurt in the process.

The current misconception that our economic salvation lies with more stimulus is both treacherous and self-defeating. As long as we continue down this path, the “solution” will continue to be the problem. There is no miracle cure to our current woes and recent proposals by central planners risk worsening the economic outlook for decades to come.

http://www.bloomberg.com/news/2012-0...-gdp-data.html

Snippet:

The dollar advanced against most of its 16 major counterparts on signs Europe’s debt crisis is weighing on economies across the globe, boosting demand for the relative safety of the U.S. currency.

The greenback maintained four days of gains against the euro before reports tomorrow forecast to show gross domestic product grew at a slower pace in Germany and contracted in France. Data today showed Japan’s economy expanded less than analysts estimated as exports and consumer spending weakened.

“Japan’s GDP highlighted the fragility of the global economic situation,” said Jonathan Cavenagh, a strategist atWestpac Banking Corp. (WBC) in Singapore. “Tomorrow’s GDP from theeuro zone and the key European economies is likely to highlight a similar situation. The risks are that you see a little bit of U.S. dollar outperformance.”

The dollar traded at $1.2288 per euro as of 10:55 a.m. inTokyo from $1.2289 in New York after advancing 0.9 percent in the previous four days. The greenback bought 78.29 yen from 78.28 last week. The euro was little changed at 96.21 yen.

The euro area economy probably shrank 0.2 percent in the second quarter from the previous three months, according to the median estimate of analysts surveyed by Bloomberg before tomorrow’s data. France contracted by 0.1 percent, while German growth slowed to 0.2 percent, separate polls showed.

The pace of economic growth in Japan cooled to an annualized 1.4 percent in the second quarter from a revised 5.5 percent in the first three months of the year, the Cabinet Office said in Tokyo today. The median estimate of 24 economists surveyed by Bloomberg was for a 2.3 percent gain.

The dollar has risen 7 percent in the past year, according to Bloomberg Correlation-Weighted Indexes, the second-best performance among the 10 currencies tracked by the gauge. The yen rose 2.9 percent and the euro lost 8.9 percent.

The U.S. currency tends to strengthen during periods of financial stress because it is the world’s reserve currency.

I vote for inflation. But there is no political battle, just a lot of rhetoric. When push comes to shove the central banks will always print.

I've been good... 100P, post some of your vacation pictures

I prefer not to post pics of my family on the internet, nothing personal. I don't even use Facebook! Except for business...

I'll go through the pics later on and see if we have any without anybody in them.

PT,

You still doing your morning Analysis? I hope so...

Good morning and happy Monday to all.

I hope you all enjoyed the weekend, and I hope today (being a Monday) will not be the usual boring grind we have seen in most Mondays before this.

There has been no change on the fundamental front since last week. As a result, the markets are still in a coma exhibiting the occasional violent twitch only to go right back to the same positions as before. Overnight in early session trade, Japans released it's m/m GDP figures which were somewhat of a disappointment, but in reality they were within the range... so no big news there, other than a slight overall weakening in the annualized number which was pretty much expected. The m/m GDP figure tends to jump from +1.x to -1.x, so unless we start to see a consistent trend in one direction over a period of a few months, I really don't see it as newsworthy. So, let's move on. Nothing to see here.

At this point we have a slightly heightened expectation in the markets that the ECB will in fact engage in purchases of short dated bond (< 3 Yrs) should Spain and/or Italy request aid from the EFSF. As I mentioned last week, I don't expect either of them to apply for aid if such aid comes with additional conditions for austerity programs. In fact Rajoy has already stated that Spain will not apply for aid until they see what those conditions are and Monti has outright rejected the idea of applying for aid citing that Italy is on strong footing and can go it on its own. Draghi stated in his last press conference that the ECB may engage in bond buying if they apply for aid, so the message is clear. No aid application, no bond buying.

Of course that didn't stop Barclays Bank from making speculative statements. According to a recent article, Barclays is stating that Spain will make an aid request before September. I have no clue what that is based on other than pure speculation leading to verbal diarrhea, but I suppose it goes to show you that when they have nothing intelligent to say, they puke up last night's dinner.

So where do we stand? The answer is simple. This is (for now) a day trader's wet dream. I expect moves to be erratic but within technical ranges. Other than that, in my opinion, we're going nowhere.

Looking at the H4 chart, price is slowly approaching the rising channel support line which was almost reached on Friday but was stopped by the 100 period sma. In fact the range since Thursday has been between the H4 100 period sma on the low end and a confluence on the high end of the 200sma, 100ema, 55ema and 55sma. In a directionless market, it is quite typical for price to bounce off moving average lines as technical traders take advantage of the bounces off these lines. As such, that is what I see happening today unless we get some news which drives it either way (most likely down to test the the rising channel support).

Best of luck today and remember; It's Monday... usually quite boring.

EUR/USD H4

Nope. I gave that up right after you disappeared

Welcome back 100pips