A Race For The Bottom – Who Cares Who Wins

There will be no discussion of the “potencial outcomes and implications” of the U.S elections results here….short of this. Obama wins hands down, and the entire planet breathes a huge sigh of relief  that the U.S didn’t revert back to the previous policies/leadership that put them in this position in the first place. Trust me, political views aside (myself being Canadian and now living in Mexico – go figure) global financial markets are not interested in ” upsetting the apple cart” of continued money printing and easing – now being adopted worldwide.

Nothing will change regardless of the outcome – as the wheels are now set in motion for the endless printing of dollars ( and Euro…and Yen etc..) as the global  “race for the bottom”  – begins to pick up speed.

At risk of sounding like a broken record – as the value of the U.S dollar continues to fall – gold/silver ( and the commodity related currencies ) stand to be the largest benefactors – as money gets cheaper……..and “things” become more expensive.

Last I looked  – I believe its called inflation.

Watch for real time trading here  – via the twitter feed on the right hand column. I expect the week to be “profitable”….. to say the least.


3 Responses

  1. DojiTrader November 4, 2012 / 7:27 am

    Hi Forex Kong,

    Looking at the graphs over the weekend, on the dailies the $SPX ‘kissed’ the 50dma with a red candle last Fri, bearish IMHO. How will the PMs fare coming week? I can’t decide if last Fri’s action was an exhaustion move, or the start of a new downtrend. Exhaustion candles normally follow down days, we haven’t had that here in the PMs (sideways to up, bear flag), so that would argue for more downside to come – and while silver hit the 50%fib, gold had not (50% at $1665). The CRB fell cleanly through support which was resistance up to 21st Aug, then a huge bearish engulving 17 Sept as a harbinger of a new downtrend – and it fell through the 200dma. RSI not even oversold. USD of course big upswing kissing 200dma, resting on 50dma. AUD and NZD look more neutral. Anyway, will have to lighten up as the drop was more than expected in the PMs and not convinced it will be up next week. Your think this is it, because….?

    • Forex Kong November 4, 2012 / 1:58 pm

      It just looks like a general “wash out/capitulation” type event to me in equities and the metals.

      The $CRB (commodities index for those newcomers) looks to have found a nice area of support on a weekly chart, and just looks like a great buying opportunity to me. Keep in mind (or at least by my standards) the SP 500 and U.S stocks in general represent the highest level of “risk” in global markets as one can track….and are notoriously “untrustworthy” (lets see….flash crash 1000 point “ooops”….Naz malfunctions…FB I.P.O…and the list goes on) – I see the SP 500 as my “ultimate risk barometer”….and am rarely suprised when it “fleeces the masses”.

      Currencies aside from the EUR barely budged – as my entire range of trades where still well in the green from entry the day prior so….I didn’t really feel the “big dollar move” at all.

      Nailing this stuff down to the absolute hour (or even day for that matter) is extremely difficult – and one needs to have confidence in their longer term outlook, as markets will certainly do all they can to take money from the weaker hands.

      • DojiTrader November 5, 2012 / 7:58 am

        Hi Forex_Gong,

        But the CRB (I look at the $CCI of stockcharts) weekly looks not so good if the fib retracemetn from June 2010 to May 2011 is taken into account (e..g 0% at 690-odd, 100% at ~448), the recent run-up hit the 38.2% at 597, week before last it fell through 50% FIB at ~570 (can’t read it on the graph) and now price at 557 sits in between 50 & 61.8%. Although, interestingly, the downtrend line from May 2011 to Aug 2012 was intersected in Aug, I would not be surprised if prices go down to meet it again from the top, at that 61.8% fib, at roughly 540. I guess a fall from 557 to 540 is not too dramatic. Price is also below 40wma (200dma).

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