Tuesday, November 17, 2009
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.
Monday, November 9, 2009
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
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
Monday, November 2, 2009
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
Friday, October 30, 2009
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.
Thursday, October 29, 2009
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.
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
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
Monday, October 26, 2009
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
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
Sunday, June 21, 2009
Land investment
A friend who just sought my advice today on land investing in US. Hawaii islands. My first instinctive analysis is that it is a bad investment. There were too many risks involved in this investment I had to rule it a bad 1.
1. Foreign exchange risk:
a. USD has a larger probability of decline with the Obama administration increasing the money supply, excessive printing and liquidity in the market. By printing to repay ever increasing deficit and mismanagement of the states, companies and excessive risk taking by the companies in US, it makes investment in US risky, both in terms of politically and economically.
2. Potential Risk of losing your capital:
a. Note when they say guaranteed returns, it doesn’t mean guaranteed capital. It just means they will pay you at least 12% on 9.6kUSD for 2.5 years, which means 1.15kUSD after 1 year, 1.15k USD after 2years, and 575USD after 2.5 years. And no mention of capital being returned unless they get the sales required.
b. Your entry is before the approval of plans, which also means there could be a few contingent situations which might occur.
i. Plan is not approved. It is getting increasingly difficult to enter US as a foreign company because of the lack of respect for contracts. Citing GM as an example where bond holders are being forced to become equity owners and not being able to claim their stake on the GM assets. The government could choose to let fail or force people into situations which they are unwilling to. What happens to your investment amount if plan is not approved.
ii. The builder for the land development goes into bankruptcy while in the midst of developing. Where does your money end up with?
iii. Does your investment returns rely on the sales of the properties? If it does, then who are the end buyers? Who are they targeting given the current situation in the US economy? How are these people going to pay? And how are you getting your money? In a lump sum or in stacked amounts periodically?
c. When they mention that the leftover properties would be taken by Redhill, they did not mention the price they would be taken at. Given it is “underwritten” by Redhill, the likely situation it will come at a cost, and should be at a discount to what is being offered to the market of 300k. Would that mean lower profitability and possibility of losing some parts of your capital due to the low application rate for the properties?
3. Business risk
a. Is there saturation of the resort industry in Hawaii? If it is so lucrative, why isn’t there private equity investment and instead looking for retail clients to invest?
b. According to a report by the Hawaii govt, http://hawaii.gov/dbedt/info/visitor-stats/visitor-research/2007-annual-research.pdf , the growth in 2004 (8%), 2005 (9.6%). 2006 (4.9%). Given most of the economies have been improving or has already been hitting new highs in 2006, there should be more growth in 2006 as compared to the other years. But looking at the statistics shows otherwise.
c. Note that most of the visitors go to O’ahu and not the main Hawaii island for holiday. 4.8m out of a 7.49m air travels were to O’ahu and not the place you investing in. And the names of those resorts which they list in the ppt are mainly located at the Northwest of the islands, meaning on O’ahu area. And not the south east which is the area you investing in.
d. Look at the market which they are attracting in the same report. 2007, 66% of the visitors’ expenditure are from their own citizens. Would they still be able to spend so lavishly with 9.6% unemployment, with underemployment by working lesser hours, salaries cut, inability to refinance their loan which they had drawn out their equity? Their discretionary spending would be severely dampened with more stringent credit facilities and worries about their own retirement especially with their 401k which is their retirement account for most of them being wiped out with this stock market crash.
e. Note the sales of the properties are to the local people. And who determines market price 700k. It doesn’t mean a unit of resort was on sale there for 700k means it is worth 700k. When a person sells a unit, it is just a supply of one. When a developer sells a property, there are more units, and the estimated price could also be overpriced.
f. http://www.zillow.com/local-info/CA-Hawaiian-Gardens-home-value/r_21778/ look at the overpriced properties during the peak from 2001 to 2007. There is a possibility that property development would be dampened by market demand for such properties for the following reasons:
i. What is the main business in Hawaii islands? Answer is tourism. And who is the visiting majority? Americans. What is the possibility of such a trend coming back to live in 30 months time such that you can reap returns at end of 30 months?
1. Foreign exchange risk:
a. USD has a larger probability of decline with the Obama administration increasing the money supply, excessive printing and liquidity in the market. By printing to repay ever increasing deficit and mismanagement of the states, companies and excessive risk taking by the companies in US, it makes investment in US risky, both in terms of politically and economically.
2. Potential Risk of losing your capital:
a. Note when they say guaranteed returns, it doesn’t mean guaranteed capital. It just means they will pay you at least 12% on 9.6kUSD for 2.5 years, which means 1.15kUSD after 1 year, 1.15k USD after 2years, and 575USD after 2.5 years. And no mention of capital being returned unless they get the sales required.
b. Your entry is before the approval of plans, which also means there could be a few contingent situations which might occur.
i. Plan is not approved. It is getting increasingly difficult to enter US as a foreign company because of the lack of respect for contracts. Citing GM as an example where bond holders are being forced to become equity owners and not being able to claim their stake on the GM assets. The government could choose to let fail or force people into situations which they are unwilling to. What happens to your investment amount if plan is not approved.
ii. The builder for the land development goes into bankruptcy while in the midst of developing. Where does your money end up with?
iii. Does your investment returns rely on the sales of the properties? If it does, then who are the end buyers? Who are they targeting given the current situation in the US economy? How are these people going to pay? And how are you getting your money? In a lump sum or in stacked amounts periodically?
c. When they mention that the leftover properties would be taken by Redhill, they did not mention the price they would be taken at. Given it is “underwritten” by Redhill, the likely situation it will come at a cost, and should be at a discount to what is being offered to the market of 300k. Would that mean lower profitability and possibility of losing some parts of your capital due to the low application rate for the properties?
3. Business risk
a. Is there saturation of the resort industry in Hawaii? If it is so lucrative, why isn’t there private equity investment and instead looking for retail clients to invest?
b. According to a report by the Hawaii govt, http://hawaii.gov/dbedt/info/visitor-stats/visitor-research/2007-annual-research.pdf , the growth in 2004 (8%), 2005 (9.6%). 2006 (4.9%). Given most of the economies have been improving or has already been hitting new highs in 2006, there should be more growth in 2006 as compared to the other years. But looking at the statistics shows otherwise.
c. Note that most of the visitors go to O’ahu and not the main Hawaii island for holiday. 4.8m out of a 7.49m air travels were to O’ahu and not the place you investing in. And the names of those resorts which they list in the ppt are mainly located at the Northwest of the islands, meaning on O’ahu area. And not the south east which is the area you investing in.
d. Look at the market which they are attracting in the same report. 2007, 66% of the visitors’ expenditure are from their own citizens. Would they still be able to spend so lavishly with 9.6% unemployment, with underemployment by working lesser hours, salaries cut, inability to refinance their loan which they had drawn out their equity? Their discretionary spending would be severely dampened with more stringent credit facilities and worries about their own retirement especially with their 401k which is their retirement account for most of them being wiped out with this stock market crash.
e. Note the sales of the properties are to the local people. And who determines market price 700k. It doesn’t mean a unit of resort was on sale there for 700k means it is worth 700k. When a person sells a unit, it is just a supply of one. When a developer sells a property, there are more units, and the estimated price could also be overpriced.
f. http://www.zillow.com/local-info/CA-Hawaiian-Gardens-home-value/r_21778/ look at the overpriced properties during the peak from 2001 to 2007. There is a possibility that property development would be dampened by market demand for such properties for the following reasons:
i. What is the main business in Hawaii islands? Answer is tourism. And who is the visiting majority? Americans. What is the possibility of such a trend coming back to live in 30 months time such that you can reap returns at end of 30 months?
Tuesday, March 31, 2009
Keynes vs Adam Smith
Seriously what have we been learning in school? Why has the free market ideology been played down so heavily that Keynes has been adopted as the main school of thought today in most economies? I believe Keynes shifts the power from the free markets to the government which is exactly why it is popular among the politicians and economists working for the government. A free market supporter would be a lonely voice. Unfortunately that's probably the best solution to the economic crisis right now.
Look at this picture from southpark. This is all the Fed has been doing. And the idea is that they have adopted a "headless chicken" approach. What Obama and Tim Geithner has done is just a temporary prolonging of the pain. They have taken a short term view (4 years), in line with the elections. What they have done is to delay this pain and hope it will be pushed back to another president. It is the most ironic to see the "world's freest market" to be so socialized, so regulated, so controlled, so monitored. We can only HOPE that a miracle can happen but it is unlikely when you get Obama throwing kerosene in an attempt to put out the fire.
Look at this picture from southpark. This is all the Fed has been doing. And the idea is that they have adopted a "headless chicken" approach. What Obama and Tim Geithner has done is just a temporary prolonging of the pain. They have taken a short term view (4 years), in line with the elections. What they have done is to delay this pain and hope it will be pushed back to another president. It is the most ironic to see the "world's freest market" to be so socialized, so regulated, so controlled, so monitored. We can only HOPE that a miracle can happen but it is unlikely when you get Obama throwing kerosene in an attempt to put out the fire.
Dumb Presenter on Fox business News
Seriously, I bet Jim Rogers puked blood after talking to her and felt that he lost 5 years of his life.
Monday, February 2, 2009
Inching towards target
My target of 1k. I am slowly inching towards it. SO many possible trades. but learning to cherry pick isnt as easy as it seems. There is a lot more to learn. But definitely not from lousy brokers. having a lousy broker makes me consider more whenever I enter a trade. This form of training has to be repeated again and again in order to be part of the mind process whenever decision is made for entry. I suppose having city is good for now. I will move once I gather enough funds. So far so good.
Friday, January 23, 2009
usdchf
this chart is at 920pm. I am waiting the confirmation turnaround. wondering how much more can it spike. Based on the projections it should move about 60-70 pips upwards. if this level holds. This is the trigger chart on the 15 mins. I am just attempting to analyze whether I can do this good enough. Its friday and after the london mid session. I am not gonan risk any money on this trade. As there has been too many long positions over the week. It is likely that people will be profit taking in the noon session.
Thursday, January 22, 2009
EURJPY
sadly it didn't pull back like I wished for. I think the confirmation pattern doesn't suit me. I need to be more aggressive towards this "trading career". I am running drier as the day goes by. Sometimes you got to be willing to die in order to survive. I am in this position. Maybe the thought of missing the whole 100 pips took a toll on me. Discipline has failed me time again and again. Wondering if I should take the advice of surviving the odds, or risking to trade the obvious.
Plan the trade and trade the plan
Time to put what I have learned to more use and record all my trades. Time to be a sniper and not a mg gunner and hope my bullets kill the target. Here is the setup. I am still waiting for the price price action to enter.
Still waiting for the pullback to the 70 region after which if 70 is tested I will set a sell stop at 50 and hope it carries thru with a stop loss 10 pips above the resistance level.
Still waiting for the pullback to the 70 region after which if 70 is tested I will set a sell stop at 50 and hope it carries thru with a stop loss 10 pips above the resistance level.
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