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Help Me Establish The GbpUsd After Dinner Club 40 replies

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  • #1,661
  • Jul 17, 2013 8:04am Jul 17, 2013 8:04am
Quoting PipTrapper
The text of Benny's opening statement for his semi-annual testimony in front of the congressional financial services committee will be published at this site in 10 minutes (8:30 New York) (13:30 London) http://www.federalreserve.gov/newsev...3testimony.htm
Here's the statement... No more dovish than last time. http://www.federalreserve.gov/newsev...e20130717a.htm

Basically US economic indicators are improving according to the Fed's forecasts and if they keep up the pace, QE will be reduced (tapered) slowly between now and mid 2014. If economic indicators do not manage to meet the forecasts, then the tapering process will take longer. Obviously if things take a turn for the worse, then the Fed will increase monetary accommodation for a short period to help boost the economy until targets are reached.

In a nutshell, it's all up to the data. Therefore, theoretically we are back to normal where the USD will rise and fall based on actual economic data versus expectations.

My feeling it that a gradual recovery is already priced in at this point in time, so I will not be looking for any appreciation or depreciation of the USD going forward save and except when economic data releases exceed or miss expectations respectively.

Now let's see what he has to say during his testimony
Those who say it cannot be done should not interrupt those who are doing it
  • #1,662
  • Jul 17, 2013 8:06am Jul 17, 2013 8:06am
when the waves are doing what I think, we may see an ending diagonal here, with a new high. Maybe I am wrong, than we have a failed or missed wave 5, which is common in such spikes





we will see
  • #1,663
  • Jul 17, 2013 8:09am Jul 17, 2013 8:09am
Quoting PipTrapper
{quote} Here's the statement... No more dovish than last time. http://www.federalreserve.gov/newsev...e20130717a.htm Basically US economic indicators are improving according to the Fed's forecasts and if they keep up the pace, QE will be reduced (tapered) slowly between now and mid 2014. If economic indicators do not manage to meet the forecasts, then the tapering process will take longer. Obviously if things take a turn for the worse, then the Fed will increase monetary accommodation for a short period to help boost...

Thanks for your summary.........


So in other words: the tapering may never be fulfilled, because when we lok at many economic data around the globe, economies are supposed to go to the south :-(
  • #1,664
  • Jul 17, 2013 8:11am Jul 17, 2013 8:11am
on 5 min TF it looks rather a normal impulse than an ending diagonal

now in wave 5 of 3 of 5?





Quoting infinitus
when the waves are doing what I think, we may see an ending diagonal here, with a new high. Maybe I am wrong, than we have a failed or missed wave 5, which is common in such spikes we will see
  • #1,665
  • Jul 17, 2013 8:14am Jul 17, 2013 8:14am
Quoting infinitus
{quote} Thanks for your summary......... So in other words: the tapering may never be fulfilled, because when we lok at many economic data around the globe, economies are supposed to go to the south :-(
Well not "never", but it may take longer than they currently forecast.
Look at it this way... Unless the US ends up heading for a deflationary economy similar to what Japan has been experiencing for far too many years now, the tapering process will happen. The only question is when will it start and when will it end. At this point in time the forward guidance from the Fed is that it will start soon and end by mid 2014... as long as currently projected economic targets are met (Yes the already revised down ones).

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Those who say it cannot be done should not interrupt those who are doing it
  • #1,666
  • Jul 17, 2013 8:19am Jul 17, 2013 8:19am
Quoting PipTrapper
{quote} Well not "never", but it may take longer than they currently forecast. Look at it this way... Unless the US ends up heading for a deflationary economy similar to what Japan has been experiencing for far too many years now, the tapering process will happen.....
The inflation debate is one which frustrates me to no end. If inflation was measured by the same formula they used 30 years ago it would be much, much, MUCH higher. And why they think that stripping out food + energy is more indicative of "real' inflation is beyond me.

Trust me, 95% of the population feels inflation at the pump and the grocery check out line more so than anywhere else. And on, and on, and on. I can already feel my blood pressure spiking.

Just look at yesterday's CPI. .5% monthly increase with gas + food.
  • #1,667
  • Jul 17, 2013 8:20am Jul 17, 2013 8:20am
Quoting PipTrapper
{quote} Well not "never", but it may take longer than they currently forecast. Look at it this way... Unless the US ends up heading for a deflationary economy similar to what Japan has been experiencing for far too many years now, the tapering process will happen. The only question is when will it start and when will it end. At this point in time the forward guidance from the Fed is that it will start soon and end by mid 2014... as long as currently projected economic targets are met (Yes the already revised down ones). {image}

OK, understand. And nice joke :-)


BUT: what about the balance sheet. Tapering does not mean unwind, it means stopping the buying. So what wil the FED do with this bubbly balance sheet? Keep it forever?
  • #1,668
  • Jul 17, 2013 8:21am Jul 17, 2013 8:21am
Quoting BoringIsGood
{quote} The inflation debate is one which frustrates me to no end. If inflation was measured by the same formula they used 30 years ago it would be much, much, MUCH higher. And why they think that stripping out food + energy is more indicative of "real' inflation is beyond me. Trust me, 95% of the population feels inflation at the pump and the grocery check out line more so than anywhere else. And on, and on, and on. I can already feel my blood pressure spiking.

Nearly same here in Germany
  • #1,669
  • Jul 17, 2013 8:22am Jul 17, 2013 8:22am
Quoting BoringIsGood
{quote} The inflation debate is one which frustrates me to no end. If inflation was measured by the same formula they used 30 years ago it would be much, much, MUCH higher. And why they think that stripping out food + energy is more indicative of "real' inflation is beyond me. Trust me, 95% of the population feels inflation at the pump and the grocery check out line more so than anywhere else. And on, and on, and on. I can already feel my blood pressure spiking.
Easy there BIG. I hear you. However, that's the way it is. First save the stock markets by supplying sophisticated rescue boats and then throw the surviving consumers a cheap life saver ring made in China. It gets to me too, but there's not much we can do about it.

It's the golden rule of finance... "He who has the gold, makes the rules"
Those who say it cannot be done should not interrupt those who are doing it
  • #1,670
  • Jul 17, 2013 8:24am Jul 17, 2013 8:24am
Quoting infinitus
on 5 min TF it looks rather a normal impulse than an ending diagonal now in wave 5 of 3 of 5? {quote}
Just for fun.
Ending or leading?

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"You have to BE before you can DO, and DO before you can HAVE." Zig Ziglar
  • #1,671
  • Jul 17, 2013 8:24am Jul 17, 2013 8:24am
Quoting infinitus
{quote} OK, understand. And nice joke :-) BUT: what about the balance sheet. Tapering does not mean unwind, it means stopping the buying. So what wil the FED do with this bubbly balance sheet? Keep it forever?
According to Benny they will keep it, and worse yet, as it matures they will re-invest the proceeds... until further notice of course.
If they sell it into the market, the US government will go bankrupt.
Those who say it cannot be done should not interrupt those who are doing it
  • #1,672
  • Jul 17, 2013 8:30am Jul 17, 2013 8:30am
Quoting PipTrapper
{quote} Easy there BIG. I hear you. However, that's the way it is. First save the stock markets by supplying sophisticated rescue boats and then throw the surviving consumers a cheap life saver ring made in China. It gets to me too, but there's not much we can do about it. It's the golden rule of finance... "He who has the gold, makes the rules"
hehe, very true.

But the FED can only game the system for so long. I know it's easy to somewhat resign to the powers that be, but eventually, the market will win out. It always has. The only question is how much scorched earth gets left behind and when.

And I think that somewhere in the deep recesses of some dark room in the FED, they know that inflation is a looming specter. And they better find a way to spin choking off the bond purchases or they're gonna end up with a nasty bout of stagflation. But as we've spoken about before, that's a ways down the road.
  • #1,673
  • Jul 17, 2013 8:30am Jul 17, 2013 8:30am
AUD/USD looks like it is attempting a bottoming process.

Can somebody give me an EW count on higher time frames (H4 and above)?

I would like to start selling it again around 0.95/0.96 area

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Those who say it cannot be done should not interrupt those who are doing it
  • #1,674
  • Jul 17, 2013 8:33am Jul 17, 2013 8:33am
Quoting godim
{quote} Just for fun. Ending or leading? {image}

Sometimes easily to aswer:


some leading diagonals have a clear 5 wave impulses in wave 1,3 and 5 (but not all),

ending diagonals have all ABC moves.


Leading diagonals are in a wave 1 or A position. If it is a wave 1 LD right now, target would get very high
  • #1,675
  • Jul 17, 2013 8:36am Jul 17, 2013 8:36am
Quoting PipTrapper
AUD/USD looks like it is attempting a bottoming process. Can somebody give me an EW count on higher time frames (H4 and above)? I would like to start selling it again around 0.95/0.96 area {image}

for me it looks like:


ending diagonal at the end of the move down. Then followed by an ABC-flat 3-3-5, where we are now in wave 5 of the C-wave impulse

Correction may end soon here. But the ABC may only be the wave W of a complex WXY
  • #1,676
  • Jul 17, 2013 8:41am Jul 17, 2013 8:41am
Quoting BoringIsGood
{quote} ...And I think that somewhere in the deep recesses of some dark room in the FED, they know that inflation is a looming specter. And they better find a way to spin choking off the bond purchases or they're gonna end up with a nasty bout of stagflation...
Oh absolutely. I couldn't agree more. That's partially why I have no problems staying long USD. I'm very patient. I find it much easier (maybe coz I'm a bit lazy?) to wait 12 to 18 months for 50,000 pips in one shot than to work hard for a whole year and hope to capture 1,000 pips per week. Of course the only drawback is that I don't get to experience that instant gratification we all love so much.. but I cannot even begin to describe how good it feels to get it all at once
Those who say it cannot be done should not interrupt those who are doing it
  • #1,677
  • Jul 17, 2013 8:43am Jul 17, 2013 8:43am
Quoting PipTrapper
{quote} According to Benny they will keep it, and worse yet, as it matures they will re-invest the proceeds... until further notice of course. If they sell it into the market, the US government will go bankrupt.

How much increase in yields can the balance sheet bare?
  • #1,678
  • Jul 17, 2013 8:45am Jul 17, 2013 8:45am
Quoting infinitus
{quote} for me it looks like: ending diagonal at the end of the move down. Then followed by an ABC-flat 3-3-5, where we are now in wave 5 of the C-wave impulse Correction may end soon here. But the ABC may only be the wave W of a complex WXY
In which case, either way, you see current levels as the top?
Those who say it cannot be done should not interrupt those who are doing it
  • #1,679
  • Jul 17, 2013 8:45am Jul 17, 2013 8:45am
Quoting infinitus
{quote} How much increase in yields can the balance sheet bare?

Depends how much inflation it's offset by.
  • #1,680
  • Jul 17, 2013 8:46am Jul 17, 2013 8:46am
Quoting infinitus
{quote} How much increase in yields can the balance sheet bare?
2.5% to 2.6% max on the 10 year benchmark. At least that is what the ideal ceiling is.

ADD: The Fed is now pretty much an extension of the Federal Treasury, full of artificially suppressed public debt. In fact the Fed IS the bond market.
Those who say it cannot be done should not interrupt those who are doing it
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