EurAnalysis

I will not be surprised to see ..( 2975 .. 2890) today

thx. i could be wrong. ill eat it if i am. ive certainly been wrong before. but based on the who wins the pres and who becomes the next fed chairman and how the market perceives upcoming fed policy, we could see some serious changes in the market by year end. under romney, i see stronger dollar w weaker euro & lower bond prices. under obama, more/ongoing easing

right now, 10/30 are at 10y+ highs. 8 days til elections

another view...(2986...2878)...GDP later!?

How would a potential poor GDP play out in relation to the yen pairs. For example with a strong GDP reading, I would think the dollar would rally vs the yen and also the euro. But then, would the euro also rally against the yen as a result?

Awaiting on a break below 103.1 on Eur/jpy anyways as that would validate the H&S

i see move like this in the chart for euro$

this scenario is perfect .. GDP greater than 2.3% .(.if not). GDP less than 2%.. and can go up ... IMHO

The Dow Futures are now down 100 so we have Risk Off. Money is going into USD/JPY and the US Dollar as Risk On assets are sold. Then the US Dollars are parked into the 2 Year, 5 Year, 10 Year and 30 Year US Bonds.

The GDP report in 2 hours and 5 minutes might change perceptions OR add to Risk Off this morning. As EUR/USD goes down so does the charts.

It is quite simple if you follow Risk On and Risk Off and WATCH where the money flow is going.

This is a Friday as well.

Have a good trading day.

http://www.merkfunds.com/merk-perspe...-10-25-insight

On growth, economic data, including the unemployment report, have clearly come in better than expected since the most recent FOMC meeting. FOMC practice dictates that progress in economic growth is acknowledged in the statement. Instead, the assessment of the economic environment is verbatim. Had the FOMC given credit to the improved reality, the market might have priced in earlier tightening. The FOMC chose to ignore reality, possibly afraid of an unwanted reaction in the bond market.

On inflation, the FOMC correctly points out that inflation has recently picked up “somewhat.” However, it may be misleading to blame the increase on higher energy prices, and then claim that “longer-term inflation expectations have remained stable.” Not so, suggests an important inflation indicator monitored by the Fed and economists alike: 5-year forward, 5-year inflation expectations broke out when the Fed announced “QE3”, its third round of quantitative easing where the emphasis shifted from a focus on inflation to a focus on employment. This gauge of inflation measures the market’s expectation of annualized inflation over a five year period starting five years out, ignoring the near term as it may be influenced by short-term factors:
http://www.merkfunds.com/images/2012...ctations-2.jpg

The chart shows that we have broken out of a 2 standard deviation band and that the breakout occurred at the time of the QE3 announcement. In our assessment, the market disagrees with the FOMC’s assertion that longer-term inflation expectations have remained stable. At best, the FOMC ignores this development because they also look at different metrics (keep in mind that the Fed’s quantitative easing programs manipulate the very rates we are trying to gauge here) or has a different notion of what it considers longer-term stable inflation expectations. At worst, however, the FOMC is afraid of admitting to the market that QE3 is perceived as inflationary.

In our assessment, inflation expectations have clearly become elevated. Ignoring reality by ignoring growth and inflation may not be helpful to the long-term credibility of the Fed. Fed credibility is important, as monetary policy becomes much more expensive when words alone don’t move markets anymore.

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i expect bounce from 2895/6 back to 2960

The way the markets are right now, my thoughts are...

Anything at or above say 1.8% will be risk asset bullish except for the Euro. Therefore USD/JPY bullish, EUR/JPY neutral and EUR/USD bearish.

Below 1.5% will be risk averse and see USD/JPY neutral to bearish, EUR/JPY very bearish and EUR/USD bearish to very bearish.

ADD: Never mind... EUR/JPY has just pierced the H/S neckline. All we need now is a close below. Once closed below, we might get a pullback up to retest the neckline as resistance. Regardless, the target to complete H/S formation is 101.6 area

E/J H4:

And i am waiting for a bounce in xau from 1700 to 1720, imo it has more chances than eu

wrong expectation, failed

well the first target was not even any surprise ... and was quite fast

The first target has been successfully achieved.

Good US GDP data might spur it up before Friday sell-off. Expect a bounce from 1.2890.

Who knows... I dont expect today any up or down moves, cause its Friday))) may be just dance between today's high@low

Why You’re Not Making Money Trading

http://cdn1.ltttmstatic.com/wp-conte.../einstein2.jpgDoes it seem relatively easy to get the direction of the market right yet difficult to make money trading it? Today’s lesson is the result of not only my decade plus of live account trading experience, but also the numerous emails I get each day from traders asking me things like “why am I not making money trading?”. The answer is never extremely simple, but it’s often the result of errors in trading psychology that are really pretty easy to fix if you’re willing to be honest with yourself and put forth some effort to change.

Some traders jump into the market with little to no training behind them and start trading real money right away and then wonder why they aren’t making any money. In this case it’s obvious.

But, what about traders who have been at it for years, and still cannot seem to push their accounts above breakeven? In this case, the issues are deeper and need more thought and effort to solve.

Reason #1 – You’re insane.


Literally, you might be insane in regards to how you trade. According to Einstein’s definition of insanity; doing the same thing over and over and expecting different results…you might be an insane trader.

Using the same confusing trading system over and over and trying to “make it work” is something that most traders do at some point in their careers. Some traders even get stuck in a very long cycle of trying to make an ineffective or overly-complicated trading method work. I am not by any means saying that the particular trading method you are using is the main reason you are not making money in the markets, because you all know that I talk extensively about the large role played by trader psychology and money management.

But, if you are using a ton of indicators, a mechanical robot trading system, or some other overly-complicated method, you should probably consider a change because these approaches will have a negative effect on your trading mindset and (or) lose effectiveness as market conditions change. A trading method like price action , has no negative effect on your trading psychology and will not become less effective over time.

Traders tend to get stuck in routines of doing the same ineffective things over and over while constantly hoping that they will “somehow” start making money in the markets. Unfortunately, that’s not how it works. You have to put some time, effort and energy into trading if you want to become profitable. This means, getting up off your butt and making a trading plan, even if you don’t know exactly how to make one, just try. Sit down at your computer or get out a notebook and start writing down everything you think you should include in your trading plan.

This trading plan is something you can refine and tweak later on, it doesn’t have to be the “perfect” trading plan right out of the gate, they never are.

The point I am trying to get across to you is that you need to TAKE ACTION if you are not making any money trading. You sure as hell aren’t going to just “magically” start trading successfully just because you want it to happen. Just wanting to be a successful trader is not enough, but sadly many traders seem to think it is, or they behave as if it is enough.


Reason #2 – You’re addicted to the “Dark Side”

http://cdn1.ltttmstatic.com/wp-conte...s/darkside.jpgUs men know all too well about how some women like “bad boys”…as humans we tend to enter into self-defeating addictions for ourselves simply because they feel good in the moment, even if logically, emotionally, and even financially they are very bad for us. As traders we are guilty of this too, we get stuck in a cycle of bad habits because they tend to reinforce themselves into our psyche.
There’s a good chance that you’re not making money in the markets mainly because you have bad trading habits. Long-term consistent trading success is really only possible if you develop and maintain the proper habits as a trader.

Essentially, this means the difference between traders versus gamblers.

Gamblers tend to have no real trading plan; they are what I call “machine gunners” because they will trade for any reason (over-trading), constantly chasing after that next “big winner” after having hit a few in the past as a result of getting lucky. Traders know they don’t need to rely on luck, because they trust in their edge and they understand they need to be consistent and disciplined and let their trading edge play out over a series of trades. Trading in this consistent and disciplined manner might not be as exciting in the moment as being a machine-gun trader, but I can assure you over the long-term it’s a lot more exciting because it means profitable trading and calm nerves.

Gambling traders get stuck in a cycle of bad trading habits because they will probably hit a few nice winners here and there just out of pure luck. These winners work to reinforce their bad habits, and they begin to think that what they are doing is working for them, even though they are losing overall. The gambling mentality is that the “next big one” is “just around the corner”, whether it’s at the slot machine, the roulette wheel, or trading the markets, it’s a mentality that you have to eliminate if you want to be a calm, confident, and successful trader. Note: I am not equating trading to gambling, but I AM saying that if you don’t take a balanced and logical approach to trading, you can essentially end up gambling your money in the markets.

Just like anything else in life, the more you do something the better at it you become, and the more likely you are to continue doing it. This is true for both positive and negative things. In trading, the more you continue trading with poor habits, the more likely you are to fall deeper into a cycle of self-defeating trading. This means, you do things like trade way too much, risk way too much per trade, trading without a plan, etc. The more you do these things the more likely you are to continue doing them. Eventually, you need to make a conscious decision to change your bad trading habits, or you are just going to continue losing money.

Reason #3 – You’re trying too hard

Trading is one of the few professions where trying too hard and putting in increasing amounts of time and energy can work against you. You need to realize this sooner rather than later and develop a trading plan that takes this fact into account. Forget about all the bullshit news reports, indicators, and analyzing the charts all night when you should be sleeping. Instead, why not just take a simple and logical approach and try trading in an end of day manner ?

Once you learn your strategy and master it, there’s no sense in sitting in front of your computer all night trying to force a trade. Either there’s a trade that meets your trading edge specifications, or there’s not, it really is as simple as that. When you trade in an end of day manner, you simply analyze the daily charts once or twice a day when it’s convenient for you. I still to this day take probably 80% of my trades off the daily charts, and the rest are off the 4 hour. I am not sitting at my computer all day searching for a trade. I quickly check the markets two or three times a day for maybe 10 to 15 minutes each time, and if I don’t see a trade I get on with my life…but I don’t sit there and try to manifest a signal just because I “want” to trade. You have to reach the point where you really don’t care if you go 3 or 4 days or even a week or two without entering one trade, then you will begin to see what trading like a sniper is all about.


Ironically, you could be having a hard time making money in the markets because you feel like you “need” to make money in the markets. Don’t confuse this with being a passionate trader, because they really are two different things. Someone who feels a “need” to make money in the markets is probably putting too much pressure on themselves because they are risking money they really can’t afford to lose or because they feel like trading is their only way to be happy. You have to eliminate these emotions if you want to make money as a trader.

Feeling a “need’ or pressure to make money in the markets is something that puts many traders behind right from the start. The more attached you get to each trade you take the less likely you are to make money. To make money as a trader, you have to cultivate a mindset that is carefree yet cautious as you trade. You should not be too worried about any one trade, but you should not be so worry-free that you risk more money than you are OK with losing per trade.


http://www.learntotradethemarket.com...J7vhJ4TMGXwtMW

http://www.actionforex.com/action-in...0121026177174/

Daily Report: Dollar and Yen Higher on Risk Aversion, US GDP Watched

Disappointing earnings reports from Apple and China Unicom sent Asian stocks sharply lower today and risk aversion lifted dollar and yen. Improvement in deflation reading also helped provide some support to the Japanese yen for recovery. The yen would likely be torn between expectation of BoJ easing next week and a bit of risk aversion and must go nowhere today. Meanwhile, we'd possibly see other major currencies weaken against dollar mildly today before Q3 GDP data from US, which might rock the markets.

Released from Japan, national CPI dropped -0.1% yoy in September, staying in deflation while Tokyo CPI dropped -0.4% yoy. Though, both are better than expectation of -0.2% yoy and -0.5% yoy respectively. After all, as Japan remains in deflation, the expectation for BoJ to expand monetary stimulus next week in its October 30 meeting is higher. There are still much to be done to achieve the 1% inflation target. And if it happens, it will be the second time BoJ expand stimulus in two months.

In US, there were some rumors that Fitch is going to downgrade its rating on US debts. Fitch declined to comment but just referred enquiries to its July statement on US ratings. There it said that US' credit rating is unlikely to change before late 2013. The rating agency will need to wait to asses the deficit-reduction plans following this year's election. Meanwhile, July's statement also noted that US's AAA rating is underpinned by diversified and productive economy and financial flexibility from the dollar’s status as the reserve currency.

In Eurozone, Santander, Spain's biggest bank, urged the government to seek an international bailout. Chief executive Alfredo Saenz said that "a situation in which the Treasury funding is being helped by contingency credit lines offered by any international body will produce a fall in the sovereign debt risk premium and, as a consequence, a fall in banks' risk premium". Markets have so far been very quiet regarding Spain this week and we'd need to wait under November to have some developments.

On the data front, New Zealand trade deficit cam in narrower than expected at NZD -791m in September. German Gfk consumer sentiment for November improved to 6.3. Import price dropped -0.7% mom in September. Swiss KOC leading indicator will be released too. Meanwhile, US Q3 GDP will be the main feature today and is expected to show 1.8% annualized growth.

EUR/JPY Daily Outlook


Daily Pivots: (S1) 103.39; (P) 103.90; (R1) 104.36; More
Intraday bias in EUR/JPY remains neutral for the moment and the consolidation from 104.58 is still in progress. Deeper decline cannot be ruled out. But after all, near term outlook will stay bullish as long as 100.14 support holds and we'd expect another rally ahead. Above 104.58 should target 111.43 key resistance.

In the bigger picture, we're favoring the case that whole down trend from 169.96 (3008) has completed at 94.11 already, on bullish convergence condition in weekly MACD. Focus is now on 111.43 key resistance level. Break will confirm this bullish case and bring further medium term rise to 123.31 and above (38.2% retracement of 169.96 to 94.11 at 123.08). And, we'd favor this bullish scenario as long as 100.14 support holds. Though, considering that EUR/JPY can't take out 55 weeks EMA decisively yet, break of 100.14 will favor another low below 94.11 instead.

http://www.actionforex.com/images/st...20121026a1.gif

very very well said bro

Okay my 1.73568 cents on the political situation.

Everyone is of the thought that all the political bluster and posturing in US election will see a big change in USD strength and monetary policy.

Although, there will be a change as economy dictates, whichever flatulating butthead sits in the White House will not change present situation in short to mid term, or long term.

However present policy may or may not change with change of leadership, because when/if a new administration takes office, they may find that their posturing in campaigning, although red meat for the base, is not a complete possibility due to the circumstance of reality based on information that they presently do not have access.

The founding fathers designed the government of the US to be able to change, but that change would be a slow arduous process to maintain stability of the government and confidence of it's people that the government will not tread on their freedoms without the people having a say so in the measure of its success.

Now, before anyone jumps my carcass for expressing an opinion, let me add further, change comes from policy directives of our head of state, but most cannot be implemented without the cooperation of the Legislative body(Senate and House of Representatives). After a bill is voted on by Congress, it then has to be signed by the President to become a law, if he vetoes, then it goes back to Congress for change, or Congress can override Presidential veto with a 2/3 majority vote in both Houses of Congress.This makes change slow if you have ever seen how long a major policy change takes to become law, and longer yet to be implemented ( Just look at the Affordable Care Act for example). Many of the policy changes do not take effect until well after the President has left office and a new President has been sworn in.

Here comes the kicker, so when these changes in law take place, there is the matter of constitutionality, in which the Supreme Court may strike down all or part of a law and throw it back to the Congress to either make a new law or amend the one that the court had ruled on.

I am only going through this for those who do not completely understand how the US government functions.

Understanding the process of change, one can come to the conclusion that any change will be slow in real terms, and may only result in minor changes with each change of administration.

Now, perception is an entirely different animal. If there are major political affiliation changes, the market may perceive these changes as positive or negative and will react accordingly. Most often the market makes these decisions based on the global economies and global policy decisions, and many small parts of these global issues create ripples of knee-jerk reactions in the global markets.

I have seen a lot of comments and statements, in this thread, about what effects the election will have on value of USD vs. world currencies and it is more complicated than politics.

The bottom line is that market perception decides if political change is good or not, and let me state, she is a very fickle gal and can change her mind the moment things don't go her way.

USD strength and monetary policy is a reaction to the market decisions, and change in monetary policy should not be confused with political policy change, because any US monetary policy change will be made in the best interest of the US and its markets and economy with only a secondary concern about the global market, while political policy is only based upon power and control over the countries wealth and resources in the mindset of enriching oneself in the process.

I could have just written the first section and last section, since it is an opinion, but I felt it required explanation for reasoning. Anyhow, my lunatic ravings are done.

I am :
short E/U from 1.3125 and 1.3014
short A/U from 1.0375 and 1.0350
short G/U from 1.6137
N/U short was closed for +25 pips from .8192 @.8177 ( tweezer bottom on 5m)LMAO!

Have a great day! Have a great trading day!