2007-10-31

Fed rate, paper, gold and rest...

Fiuuuuuuuuuuuuuuuu!!!!!!!!!!!
Did you hear the falling money?

Ok, recap for today - Halloween

FED fund rate is cut with 0.25% as expected. FED discount rate is not cut.

EUR/USD was mixed, first down to ~1.44.27, later up to ~1.45.03. Currently rate is stabilized to 1.44.80

Gold futures was traded on $ 800, "normal" gold is $ 793+

Bought some PWE

Bought some small PWE @ 31.50

Ron Paul on The Tonight Show with Jay Leno 10-30-07

http://www.youtube.com/watch?v=I1EFHgUXZaU
Here is the link.

2007-10-30

1.444444444444444

Every time you think EUR/USD hit the top, you see you are wrong...

2007-10-29

EUR/USD - 1 mo candle


Mind the gap

EUR/USD gap has been filled.
Profit was 100 EUR, but better than loss of 100 EUR...
Whoever checked my weekly report and enter in same way - congrats.

EUR/USD view for week OCT/29/2007

I. Important news from the week:

1. Gold stands high - 785 USD, crude oil is 90+ USD

2. HUI is still 400+.

3. USD continue down to sinkhole, but lose momentum. Yet, EUR/USD open~1.44.10

4. FED will have meeting next week on 31th OCT. Market already calculated a 0.25% rate cut - more for this later


II. As I wrote before:

FED blew it!!! They totally destroyed the dollar in long term. I think they will inflate now, and stock market will go higher and higher, but only in nominal terms.
GOT GOLD :-)
For first-time readers, and those who do not know, the wedges are reversal patterns. This wedge is bullish for USD index, no matter what people say for US economy, debt bubble etc. I am sure that at the end of the year, the USD will be lower, but wedge suggest we will have one bounce before that.
Unfortunately, we had proof that our beloved wedge, is wedge no more.
It was transformed in parallel bearish channel.
Now, even if we see USD up, it will be not an uptrend, but just a correction.



III. The parallel uptrend (old wedge):

USD index weekly chart:
The wedge is transformed into a parallel channel. Not much change since last week. Still believe it must move up now (USD up, EUR down) We may expect now a rally in USD up to 79+. If the resistance is broken, rally will continue to ~81.

EUR/USD 4 days chart:

Same situation as week ago. It must go down, but we will see.

EUR/USD 4 hours chart:
Here is "speculative" chart. We are on the top of the channel now we will go down.

EUR/USD 5 min chart:
Chart is not shown, but as I predicted we have open the week with a gap. The gap is between 1.43.90 (close) and 1.44.10 (open). Price for sure will go down and will fill the gap. We are take this short EUR/USD trade already.



IV. Summary:

Generally USD will rise now, EUR to fall, but play carefully.

It is very important what Helicopter Ben and friends (FED) will decide:
o If they kept the rate unchanged, USD will raise a lot - 50-100 pips or more.
o If they cut just 0.25%, USD may raise, or may fall, but in any case will be small move.
o Some believe FED will cut another half percent. In such case USD will totaly fall with 50 pips or more.
o Some, even suggest FED will cut half percen + half percent on discount rate. This will be total disaster for USD.
We will write about this soon, when we do a research and see what others think about it.

Happy week and trade!!!


V. Carry trade with AUD/JPY:(As usual) Will not be updated this time, probably tomorrow.

EUR/USD - upps

EUR/USD - upps, we open with the gap :)

2007-10-28

Can I do a buy and just sit on it for the next year?

Recently posted from me in one forum, I changed some sentences to be more clear:

Quote:
Can I do a buy (EUR/USD) and just sit on it for the next year?
Yes you generally can. However, on most brokers, you play/trade on margin.

I trust you know what marging is - You use 1000 USD, but you dont have them, you garanty them with 100 USD. Then If you lose more tham 100 $, the broker automaticly close (sell/buy) your possition, because you lost your "garantia" money. Send me a message if you do not understand what I mean, and I will explain.

So, as you see, you do not work with your own money, but you "borrow" from the broker. Now lets explain what carry trade is (at least in forex meaning):

Every country has a central bank, and the central bank deside what the interest rate will be. There are lot of speculative/alternative stories about FED, ECB and so on. Just forget about them for the moment.

So lets assume you want to play EUR/USD:

EUR - EU(rope) - ECB(bank) - interest rate = 4.00%
USD - USA - FED - interest rate = 4.75% (used to be 5.25% before)

So lets say you selling USD and buy EUR. This means EUR/USD long. For simpliciy, lets assume exchange rate is 1.40. So:

Selling 1400 USD (interest rate 4.75)
Buying 1000 EUR (interest rate 4.00)

Every night, at 24:00, your broker
debit 1400 x 4.75 = 66.50 / 365 USD, and
credit 1000 x 4.00 = 40.00 / 365 EUR

Same calculation can be done in different way:
1000 * (4.75 - 4.00) = 7.50 / 365 EUR DEBIT - this is debit of 0.02 EUR/day.

However, you do not want to open just 1000 EUR. You want to open 100,000.00 EUR or more. Then these 2 cents became 20 EUR every day.

So you see this is not practical...

p.s. if you sell EUR, and buy USD, then you will get money every day. However the USD will be losing value faster than money you receive meanwhile.

p.s.s. Interest rate in Japan is 0.50 %. What many people do, is go long on AUD/JPY, and receive this carry trade interes (6.50% - 0.50% = 6%). For 1000 AUD/JPY this means - 60 AUD profit every day (~50 EUR). However, if yen raise unexpectedly, the loss on AUD/JPY possition may wipe all profits you made.

p.s.s.s. These are not a trading advices :-)

2007-10-26

Dollar weekly close

Even I think dollar must go up, we had EUR/USD weekly close on 1.43.91.
This is same as todays high.
I think Monday we will open with gap to 1.44+

Similar to Gold and EUR, Dow Jones, closed also higher, at todays high level.

Same for Oil and HUI.

Gold! weekly close

Gold @ $783 weekly close.
I love gold, krugerrand, napoleons etc... :)

CAD

Parity no more,
but...

USD / CAD = 0.96 :)

EUR/USD - down now or never

After soaring again to new all time high - 1.43.70,
EUR/USD approaching the resistance point:
EUR/USD 3 day chart - is on the top of the new parallel channel
EUR/USD 4h chart - here it is forming a wedge. A bearish wedge...

Today EU data was actualy negative for EU. I do not see why EUR is up. We will see US data this afternoon.

One thing for sure - if you are long - sell it, before is too late :)

So set-up is ready, south - now or never :-)

Uncle Jay Explains the News


RSS feed from YouTube http://www.youtube.com/rss/user/UncleJayExplains/videos.rss

2007-10-25

Mises

Today when I commented about inflation, someone called me "purist-miseian", well thank you :)

Hardware

This is important hardware,
if you want to invest on US stock exchange.

Trade a news spike


How to speculative trade a spike:

[1] The news comes out.
EUR/USD = 1.43.05

[2] The price spikes. Whoever is long take profit.
EUR/USD = 1.43.20

[3] The price fall to pre-news price. This is where you must enter.
EUR/USD = 1.43.10

[4] The price spikes again, usually make new high.
EUR/USD = 1.43.44

[5] The price fall and stabilize itself. This is where you sell.
EUR/USD = 1.43.30


This is not a trading advice :-)

In fact this is highly speculative,
and you need to do it only if is in same direction with general trend


p.s. For those who are new in forex,
I forgot to mention that this is not what just happen today,
but spikes almost always (95%+) have these five phases.

Some videos

Some must see videos :-)
Peter Schiff on the financial sector, Dec.2006:
http://www.youtube.com/watch?v=6XtQoZAqjc8

Jim Rogers on the US dollar:
http://www.bloomberg.com/avp/avp.asxx?clip=mms://media2.bloomberg.com/cache/vZl3xuDhR3QY.asf

Good article on minning stocks

Good article, with a must see chart inside
http://www.safehaven.com/article-8689.htm

2007-10-24

Russian food producers to freeze (food) prices

Because of Presidential elections, some nations inflate :-) , other do this:

Russian food producers to freeze (food) prices

If I would be Russian, I would worry tooooooo much now.

2007-10-22

We did not start the fire

History lesson here:
http://yeli.us/Flash/Fire.html

The Shadow of The Black Monday

All exchanges today are reporting loses.
Yes I agree, Dow is 24 points higher.

All stocks from my US stock portfolio are down today,
even I own only mining stocks and Canadian trusts :-)

Yen raise

GBP/JPY:

EUR/JPY:

AUD/JPY:

Yen index:

America's Forgotten War Against the Central Banks

I will not say this is a must read, because you'll find it too long. But is interesting anyway:

America's Forgotten War Against the Central Banks by Mike Hewitt

Beggining of the week

We begin the week with a gap. EUR/USD is on record high - 1.43.30. Gap must be filled :)

2007-10-21

EUR/USD view for week OCT/22/2007

I. Important news from the week:

1. Gold stands high.

2. HUI is 400+.

3. USD continue down to sinkhole, but lose momentum. Yet, EUR/USD hit ~1.43.20

4. Black Monday Anniversary - some video to remember it here

Kids looking at dollar sinkhole



II. As I wrote before:

FED blew it!!! They totally destroyed the dollar in long term. I think they will inflate now, and stock market will go higher and higher, but only in nominal terms.
GOT GOLD :-)
For first-time readers, and those who do not know, the wedges are reversal patterns. This wedge is bullish for USD index, no matter what people say for US economy, debt bubble etc. I am sure that at the end of the year, the USD will be lower, but wedge suggest we will have one bounce before that.
Unfortunately, we had proof that our beloved wedge, is wedge no more.
It was transformed in parallel bearish channel.
Now, even if we see USD up, it will be not an uptrend, but just a correction.



III. The parallel uptrend (old wedge):

USD index weekly chart:
The wedge is transformed into a parallel channel. Then the price bounced back from the parallel channel support. Then price went to the resistance (formal support) - brown line and bounced back down.

We do NOT have double top (bottom), because second bottom is lower than first one.

However, now, we can see the price is back on the support. This is very important, since on EUR/USD situation is not like this. We may expect now a rally in USD up to 79+. If the resistance is broken, rally will continue to ~81.

EUR/USD 4 days chart:
On EUR/USD we see similar things, but the second high is not on the resistance, but lower. This happened before, so it may happen now too.

We also have bearish divergence on RSI, not shown on the chart, but is there. However we do not see the same divergence on USD index.

EUR/USD 4 hours chart:
Here is "speculative" chart. Mixed signals. Better wait and see what will happen...



IV. Summary:

Generally USD will rise now, EUR to fall, but play carefully.

Happy week and trade!!!


V. Carry trade with AUD/JPY:(As usual) Will not be updated this time, probably tomorrow.

Opportunity Knocks

Opportunity Knocks by Joseph Russo:
http://www.safehaven.com/article-8669.htm

Wow, this guy is more bearish than Peter Schiff...

Sorry BOOLS, Market On The Cliff

Interesting prospective from Boris:
Sorry BOOLS, Market On The Cliff

Market system


Market system, explained by Milton Fridmon using a pencil...

2007-10-18

IMF says dollar ‘overvalued’

A mess article, but probably is interesting.

IMF says dollar ‘overvalued’

By Chris Giles in London

Published: October 17 2007 14:00 Last updated: October 17 2007 14:00


Currency traders were given a green light to continue selling the US dollar on Wednesday, as the International Monetary Fund said the greenback “remains overvalued” and rejected claims the euro had risen too far.

Contradicting Rodrigo Rato, the outgoing IMF managing director, who last week said “right now the dollar is undervalued”, the fund’s staff conclude the dollar is still too high. The multilateral lender also forecast slower growth in 2008 at 4.75 per cent, compared with 5.2 per cent expected this year.

The IMF’s new stance on the dollar will counter the arguments to the contrary made by France and some other eurozone members at this weekend’s meetings of the Group of Seven leading economies and the IMF’s governing body. They have been urging a change in language to temper the fall in the dollar, which dropped by more than 4 per cent against the euro in September alone.

The IMF, however, has little sympathy for struggling eurozone exporters hit by the currency’s rise. It says that even after its recent rise, the euro “continues to trade in a range broadly consistent with medium-term fundamentals”.

Apart from the dollar, the IMF’s economists also think sterling is overvalued, while the Japanese yen and the Chinese renmimbi remain too cheap compared with other currencies.

In some of its strongest language to date, the fund’s officials call on China to let its currency appreciate. Repeating its demand for “greater flexibility” of China’s managed currency, the IMF added that such action was in China’s best interests.

“Further upward flexibility of the renminbi, along with measures to reform the exchange rate regime and boost consumption, would also contribute to a necessary rebalancing of demand and to an orderly unwinding of global imbalances,” the World Economic Outlook argued.

Even with slower growth forecast for the US and a weaker dollar, the IMF sees little improvement in the world’s huge trade imbalances, embodied in the US trade deficit and corresponding surpluses in Asia and in oil exporters.

The Fund thinks that the US current account deficit will remain close to 1.5 per cent of world output until 2012, raising the likelihood of a disorderly plunge in the dollar and protectionism growing over the next few years.

Copyright The Financial Times Limited 2007
EUR/USD 4 day chartBasicaly we are going to the top.
We hoped EUR *not* to pass the previous high, but it hapened, so we *DO NOT HAVE* double top. Once price go to upper boundary, we may expect price to go down, at least to a parallel line (not shown) from last (upper) low.
EUR/USD 4h chartHere you are a 4 hours chart. Two possibilities:
Scenario 1. We may have parallel channel. In such case price must raise to ~ 1.43.50. This is not impossible. Then - down to 1.43.10 consolidate, later to 1.41.90,
Scenario 2. We may have a wedge (brown line). In such case, we already hit the high today 1.43.09. This means now - down to 1.41.90, then - up again, but lower high, and then break down from the wedge to about 1.40

2007-10-16

AUD/JPY better go up now.

AUD/JPY better to go up, else carry trade will unwind, and idiots will receive margin calls, then they will begin liquidate their portfolios. And becuse the can't sell the junk, they will sell Gold and Energy stocks. This may affect the dollar, which may go up.

P.S. Additionaly we may have double top forming...

2007-10-15

Gold denominated in EUR

Today I had a discussion if I really make profit buying Gold,
because USD go down every day.
Here you are the chat of Gold in EUR.

We are not in Mar.2006 peak, but slowly and surely going there.

You always can use stockcharts.com to see where we are:
http://stockcharts.com/h-sc/ui?s=$GOLD:$XEU&p=W&b=3&g=0&id=p23697395972
but in this way you can not see the price itself.

USO (Crude Oil) analysis

USO is proxy for Crude Oil Price, this means that if crude go up 5%, USO will go 5% up.
Same for downside.

If you are familiar with GLD, is same idea.

However, unlike GLD which is around 75 USD now (Gold @ 750), here price is totally different as a digits.

There are one more ETF that tracks crude, its code - OIL, but the volume there is low.


USO 3mo chart:The rectangle is defenetly broken (not quite seen on the chart)
USO 1 year chart:Upper channel... We may see down to 55 USD per share - good time to buy.

Oil price

Oil futures price hits new recod:
86 USD
(Oil futures is different from Oil price "now", but just wait 2-3 days)

USO is ETF proxy for Oil price:

Gold hits new 28 year peak

Gold hits new 28 year peak
1 oz gold = 760 USD

Black Monday Anniversary


Black Monday Anniversary :-)
This time they are ready and will avoid it by ... inflating!

Black Monday: Can It Happen Again?

Black Monday: Can It Happen Again?
From BARRON'S
By andrew Bary

http://tauke-saham.blogspot.com/2007/10/black-monday-can-it-happen-again.html

Canadian chocolate bar

One chocolate bar shows it all.
Ever wonder why such chocolate bars are in this color? And not red or blue instead?

EUR/USD view for week OCT/15/2007

Because basically last week nothing happened on EUR/USD front, this week I will keep the analysis KISS - Keep It Simple Stupid. If you are first time reader, I'm encouraging you to read previous EUR/USD view for week OCT/08/2007, since most of general "things" are discussed there.

I. Important news from the week:

1. Gold stands high.

2. HUI is 400+.

3. US Stockmarket new high, records on Dow, S&P500.




II. As I wrote before:

FED blew it!!! They totally destroyed the dollar in long term. I think they will inflate now, and stock market will go higher and higher, but only in nominal terms.
GOT GOLD :-)


As you can see, back in 1992, USD was down once 78.43, well, we had similar reading, I can not say how the recent low was, but was close to 78.43.
No comment here.
For first-time readers, and those who do not know, the wedges are reversal patterns. This wedge is bullish for USD index, no matter what people say for US economy, debt bubble etc. I am sure that at the end of the year, the USD will be lower, but wedge suggest we will have one bounce before that.
Unfortunately, last week we had proof that our beloved wedge, is wedge no more.
It was transformed in parallel bearish channel.
Now, even if we see USD up, it will be not an uptrend, but just a correction.



III. The parallel uptrend (old wedge):

USD index weekly chart:
The wedge is transformed into a parallel channel. Then the price bounced back. Then price went to brown line and bounced back down - this is shown well on 1 hour chart on EUR/USD. We could have double top, but is still early to trade it.

EUR/USD 4 days chart:
Same situation here.

EUR/USD 1 day chart:
Here you may see those double top forming, but is still early. Also I said "forming", we do not know if this is double top or not.

EUR/USD 4 hours chart:
Here is "speculative" chart. Mess is full and we can not decide what will happen. Downside is 1.40.50 - support, then 1.40.00 - very strong support. Upside - 1.42.20/30.

I personally am bullish on EUR, even is a bubble. But bubbles must be exploited :-)



IV. Summary:

Generally EUR will rise now, USD to fall, but play carefully.

Happy week and trade!!!


V. Carry trade with AUD/JPY:

Will not be updated this time, probably tomorrow.

2007-10-11

CDE

CDE almost $4

Everything is interconnected

Just posted this in one blog, may be I will write a long article for it, but it will be in Bulgarian:
Everything is interconnected

US inflating currency to get higher stockmarket, because president vote coming soon.

Chinese inflating, because they want to export in USA, so their stockmarket go up.

Japanese, instead of simple inflation, keep rate low - 0.50%, because they want to export too in both USA and EU.

Funds borrowing money from the Japanese, and investing in USA, Australia and New Zeland (carry trade). This makes US and other stockmarket to rise even more.

EU has no choice, but to inflate too. Why? Because there are no way for EU to export anywhere, because EU products get too expensive.

And where gold fitting?
Actually nowhere.
If there is a country with gold standard, their currency will raise and raise, and they will only import, but not export. This is bad for the country in general.

Conclusion for regular people like you and me is - inflation comming.
GOT GOLD ?

EUR Bubble - 30m and 16h

Bubble or not, we need to take advantage of EUR/USD.
As we can see on 30min chart, there is a perfect uptrend channel now. We will try to buy at the (near) bottom, and to sell at the (near) top.

What confusing me, is that GBP/USD is down 80 pips, but EUR/USD is 80 pips up. There is something wrong with this.

If we look at todays news, I do not think they are not negative for the dollar. Nor EURozone news are positive. What we have is "normal" situation in USA, and lack of grow in EU.

However, looking at tomorrows news, as I see expectations, I believe they will be negative for EUR. We will see.
Now, 16 hours chart - if the price do not break old high, we will have... Yes, *double top*. Once again, we will see.

EURO Bubble

(-: EURO Bubble, now in store near you :-)

An article from Boris

Nice article from Boris:
...
It is obvious that this market only goes up if/when $ goes down.
...
I am amazed at the citizenry of USA that either does not
understand and/or does not care what is going on.
...
http://borisc.blogspot.com/2007/10/subsidizing-gates-buffet-bloomberg.html

AUD/JPY update

AUD/JPY daily chart. Soon we can do long.
(post is from yesterday)

EUR 5min

Speculative chart from yesterday. Unfortunately for you, I unabled to post it yesterday :(

2007-10-10

Dow, S&P500 with new records

New *records*:
Dow hit over 14,150,
S&P500 - over 1550,
(very good for me that I sold my SDS position)

Our beloved HUI hits 400.

Dollar inflation = good for stockmarket :-) , who cares for the proletariat? Oh, I have forgotten - there is no proletariat in US, they are very prosperous people with 2-3 houses each.

This is the Sopitalism - This year Dow - 16,000, next - 25,000 :-)

2007-10-07

EUR/USD view for week OCT/08/2007

I. Important news from the week:

1. Gold stands high.

2. USD bounce a bit.


II. As I wrote before:
FED blew it!!! They totally destroyed the dollar in long term. I think they will inflate now, and stock market will go higher and higher, but only in nominal terms.
GOT GOLD :-)

As you can see, back in 1992, USD was down once 78.43, well, we had similar reading, I can not say how the recent low was, but was close to 78.43.
Well congratulations. Last week, we were in uncharted waters, then we had a bounce so we are now back in "normal" levels. We will see for how long...

For first-time readers, and those who do not know, the wedges are reversal patterns. This wedge is bullish for USD index, no matter what people say for US economy, debt bubble etc. I am sure that at the end of the year, the USD will be lower, but wedge suggest we will have one bounce before that.
Unfortunately, last week we had proof that our beloved wedge, is wedge no more.
It was transformed in parallel bearish channel.
Now, even if we see USD up, it will be not an uptrend, but just a correction.

III. The "wedge":

The wedge? What wedge? Did you see a wedge? I don't see a wedge? :-)

There is no wedge. Not anymore. What we have is downtrend from 2006 year.

USD index weekly chart:
The wedge is transformed into a parallel channel. Then the price bounced back. I believe the price will go up to the pink line, which is old wedge support. A test will occur, and if the resistance hold (I think it will), we will have future drop. In case, the resistance not hold, we will have a rally to upper wedge line - around 81. Brown line is added, but I think is not so significant (you will see why in next charts)

EUR index weekly chart:
Don't panic :-) Here I did an un-ortodoxal thing, I flip the chart. Here we see same lines, with same colors. Brown line "pointing" totally different "place". Pink line looks much more significant, also the price is on the line.

USD index / EUR index ratio weekly chart:
Similar to others, here you are USD index / EUR index ratio. Brown line again is "pointing" "wrong".

EUR/USD 4 days chart:
Here the price is exact on the pink line. We may expect EUR to go up.


IV. Summary:

EUR will rise now, USD to fall.
We may have some future bounce to 1.40, but no more.

Happy week and trade!!!
V. Carry trade with AUD/JPY:

Will not be updated this time, probably tomorrow.

2007-10-05

EUR and USD index

I will discuss this on my weekly view, but let you have some "preview" :-)
USD index:We may see several trendlines, which project different pullbacks.
"Correct" line is brown one. Why? See EUR chart bellow...

EUR index:EUR index looks similar, but we may "draw" only the brown line. All other are incorrect.
Peter Schiff on declining dollar:
http://www.safehaven.com/article-8553.htm

2007-10-02

More charts

EUR/USD 30 min chartOne think for sure - still unclear
EUR/USD 1 day chartAs I wrote before, we have falling to old wedge (some call it test).