Fast Money

I believe Peter miss out rebutting one critical point, if China could devalue their currency and yet maintain their competitiveness in terms of products, it goes to show how productive and efficient they are as compared to US. This is not exactly stealing jobs, but the fact that the Americans cannot compete against the rest of the world even with a weakening currency now goes to show how bad a shape their economy is in now.

Is the Dollar Dying a Slow Death?

Referring to an article on Channelnewsasia, I have a few differing views from the 2 writers. First they mentioned about "investors around the world decided the good old greenback was a safe haven in a time of great uncertainty. The dollar was resurrected, reversing years of slow decline". It was a false impression that was created by decoupling from the dollar. The main reason why the dollar had a strong rally then was due to most financial instruments/transactions were being done in USD. During the period of 2008, many investors/hedge funds/mutual funds/investment banks all mainly had their losses in US. In order to cover their losses, they had to purchase the greenback even when it was rising. The appreciation also caused many fx traders to lose their positions and covered. It was more of decoupling, a phenomenon that is most likely being seen because of the way the financial markets worked and not because dollar is a safe haven. People ended up believing that there is a correlation between the stock markets and the dollar which is a very dangerous assumption just based on one occurence which they have witnessed last year.

Now as funds moved towards the BRIC nations and Arabic countries talking about moving away from the dollar for oil transactions, the dollar begun its demise just as predicted. And given the monetary policies pursued by Bernanke and fiscal policies by Obama, it is sad to say not even Peter Schiff could do anything even if he gets into the Senate. I am absolutely positive that the current high prices for gold is fundamentals and not driven by speculation as shown by India's and China's interest in storing gold in their central banks, a move away from the dollar. It is inevitable that the reserve currency status will be eventually taken away. I do hope we would eventually move back to a sound monetary system, as legal counterfeiting doesn't do anyone good besides the government and their friends.

For more Austrian Economics on sound money, refer to ludwig von mises for his literature and also videos on Peter Schiff on europac.net

GBPUSD 20091103

Monitor the situation as the consolidation comes to the crucial point. The likelihood of this consolidation breaking out on the top is higher than below from the looks of it. Could possibly look at targets of around 1.655. Might attempt to put in a half mini for this with stop loss below the 100 sma and also below the 38.2% fibbo at 20 pips below 1.63

Phoney GDP

read http://globaleconomicanalysis.blogspot.com/2009/10/market-cheers-over-ugly-gdp-report.html and get more details of how distorted these figures really are

The same example is valid for companies making up their numbers by offering kickbacks to customers, then subsequently registering prepaid revenue as revenue. This is exactly how the US government has distorted the figures recently with their cash for clunkers, and tax credit of 8k for new home owners (defined as one who hasnt buy a home in 3 years). That also means someone who has a home for 4 years and then buy a new home now, he would be eligible for it. Shifting necessary expenses from other areas, distorting the free market with kickbacks, creating malinvemtments and carrying forward future expenses to current inflating the figures.

If you are a new investor to the current market conditions, it definitely is a time where you have to be extremely careful, aware of the hype and news the media create, the false pictures the govt paint to you, and how your financial advisor might want to induce you into making an investment. Times are tough, but the tough will survive.

EURUSD NY TIME

Right now it is midway through the JPY session and I am currently up 50 pips. Still looking for further upside to 1.49. Hopefully it reaches there and I can release my trade before end of the week and month. Then it would really reach a nice figure which is about 8% returns and 1k in profits.
Another trade idea. EURUSD Long at 1.48 after a breakout of the trendline, with both declining trendline as support and fibbo lvl 50 as 2nd lvl support. Hopefully this carry through.
Looking at price targets which is 1.49 slightly below the 23.6% retracement lvl. and a second lvl target at 1.5050. SL is probably 1.475 slightly below the 50% retracement lvl. and below the dipping trendline.

USDCHF 20091028

Its about time for me to start a more disciplined approach to trading. And the only way I can think of is to start a blog to keep track of my trades and how well I performed each trade individually and look back at my mistakes if there were any, where i did well and where I can work on better for my next trade.

So here is how this works. I see this as a good entry point based on my charts consisting of basic moving averages, strong uptrend line for 1 hour charts and support reconfirming itself twice at 10245. I decided to long this pair at 1.0253 with an initial target price at 1.03. My stop loss is somewhere below the 50% retracement at 25. SL is pretty tight at 28 pips and TP is about 50 pips away at 1.0295. near to the 68% retracement of the major downtrend for the daily charts. As it has already broken out of the daily downtrend. I am pretty sure this reversal is a longer uptrend move at least for the intermediate term. It is worth a try as there is minimum loss and pretty much a higher move behind this pattern, especially after testing 1.0247 3 times in 3 diff candles for the 4h chart

Might look to play it thru to the 100% retracement lvl if the pattern is right eventually. for now this is what it looks like


Well the end result didn't go the way I want. markets turn, USD rally came to an end. Prudent management cut the loss to a bare 29 pips. Still cannot believe after retesting the support 4 times it still broke. Well, I cannot control the market. I can control My own profit and loss

Pure insanity

I think the markets are malfunctioning due to too much intervention and interferences by the central banks and government. Such interferences causes the free market to malfunction, act in a manner which it wouldn't have if subject to free market conditions.

I can foresee a significant dip in US equity markets coming soon. Tomorrow marks the 80th anniversary of the Great Depression Black Tuesday. Apparently mainstream economists, who follow the Keynesian school of thought are still HOPING the stimulus package would help bring the dead economy back to life. What is happening in the equity markets is the result of cheap money driving up another bubble, just like what happened in 2000 where the tech bubble busted, and low rates follow, driving up housing prices. The entire history is just repeating itself and central bankers have not learnt from previous mistakes from the previous bubble created. Making money cheaper and cheaper doesn't improve your standard of living.

10 reasons why this is not a recovery

1. unemployment figures are not improving and more people are even dropping out of the workforce due to giving up totally on finding work.

2. Consumers have stopped spending and lost confidence in the business recovery.

3. Business can only improve their bottomline through cost cutting measures and not through increasing coverage or business development.

4. Advertisements on television has dropped significantly with more program airtime.

5. Companies have spent less on R&D and focused on cost cutting measures, such as part time employment, reducing headcount, selling off assets to cover for losses. This includes countries such as UK, selling their railway, airport and state land.

6. Shipping has overcapacity until ships are parked offshore

7. Airlines have excess capacity and have reduced their frequency of flights and have sent some of their airplanes to desserts in US to park idle.

8. Luxury goods chains have seen significant cutback in spending, e.g. branded handbags, swiss watches

9. Holidays have dipped and people are more interested in finding out how to protect themselves in this recession than spending money to travel

10. last of all, many people are still finding it hard to even get promotion, move on to other openings as openings are few and limited, mainly temporary or contract, with rolling option. Even Citi is paying peanuts for their staff.

This looks more like a depression than a recession. For now, I am just thankful I still have my job