The past two days of solid USD strength have created a couple of concerns on a purely short-term technical level, as well with extremely light trading volume all week and the G20 meeting wrapping up here tomorrow – let’s just say..I’ve had better.
With a number of mixed signals across asset classes, the SP 500 pushed to its highs, gold / silver taken directly to the doghouse and the Yen rolling over ( or not) – it’s just as well to clear the deck, clear one’s head, regroup and read up over the weekend. Interestingly my heart hasn’t really been “in it” here this week – and as a result my trading has suffered. I took my first small weekly loss in months, and will chalk it up as yet another lesson learned. You can’t turn your back on this thing for a second – short of having your pocket picked and or face blown off. I know this….you know this.
Looking ahead – we will get whatever “news” out of the completion of the G20 meetings, and prepare for another week out on the battlefield. At risk of sounding like a broken record – I still have little belief that any “USD rally” will be anything more than a blip – but of course stranger things have happened.
Thankfully my short-term technical system has again done it’s job in keeping me nimble and not tied to any particular trade / concept. We’ve considered this a near term “top” – so regardless of what further upside may be seen – I will be stepping lightly in following days.
The USD has formed a “swing high” here as of this early morning / last night – and would be projected to fall over coming days. I’ve been on about this since early this week, and now see further confirmation that indeed – we should make the turn here and expect a lower dollar.
This being said – a number of trade opportunities are now available including long NZD/USD, AUD/USD, EUR/USD as well short USD/CAD and USD/CHF to name a few (a few that I am currently holding).
If you’ve been reading here at all over the past few months you’ll already know that I generally “buy around the horn” with smaller orders throughout a given few days – in order to catch the largest part of the move right at the start. (please research previous articles – this strategy is in there).
This has been a touch tricky here as of late with some real volatility out there – and currencies moving wildly….although as of this morning, I would be far more confident in putting some money to work.
For you equities guys – this “should” translate into higher stock prices (as unreal as this sounds) and for those still struggling with gold and silver (as am I) – likely as good a day for you to catch up on some yard work / house cleaning / snow shovelling etc…as I don’t expect a single things to budge.
…..Hope you all have a good day out there today.
The Group of Twenty Finance Ministers and Central Bank Governors (also known as the G-20, G20, and Group of Twenty) is a group of finance ministers and central bank governors from 20 major economies.
The G7 (also known as the G-7) is an international finance group consisting of the finance ministers from seven industrialized nations: the US, UK, France, Germany, Italy, Canada, and Japan.
The G7 has already met this week – and hopes to present a unified message to the smaller contributing countries of the G20 set to meet here on Friday and Saturday – ie………..”let’s not pull another Chavez (Venezuelan Pres. who just devalued their currency by 32% last week… and practically overnight) and leave us to do the devaluing on our own”.
Japan is clearly in the doghouse (as seen kicking ass in the current currency war) and it will be more than interesting to see what comes out of it all. At this point the currency war is really heating up – and the markets are more or less at a stand still…frozen like a deer in the headlights.
Frankly – standing clear of it is about the best advice I can give – as volatility is up and direction is unclear.
The USD weakness is right on track as suggested – but thus far, the waters are choppy to say the least. Unfortunately for tonight and likely tomorrow – no trade may very well be the best trade.
2% on the day – beer money for sure….as well the following cartoon:
For an additional 8:51 minutes of your time I truly believe you will enjoy this excellent video explanation of the Federal Reserve. In particular the part siting the “owners” of the Federal Reserve, as well the little bit on every man,woman ,child and baby “owing” the Federal Reserve.
(If you are receiving this via email – please click the title and visit the blog directly)
Seriously I couldn’t resist.
With respect to the large storms pounding the Eastern U.S, as well it being the weekend – just one more little video to really get you thinking. You are at home – the T.V sucks, and I can’t imagine you’d dig this one up on your own so enjoy…or not.
Your thoughts / opinions / views are always wanted and deeply respected so fell free to comment on this…if you can help yourself from “not”. I for one appreciate the straight forward exchange between these two lovable creatures – regardless of the content. Take it for what it is…….a cartoon no less.
I rarely trade this piece of junk, in that the fundamentals rarely align to offer me the kind of moves I look for. In this case though – as the USD looks to have made its “counter trend rally” over the past few days, coupled with some additional fundamental factors, I will be exploring several “long EUR” trade ideas through Monday and possibly Tuesday before seeking entry.
I generally stay away from the EUR as fundamentally it is a complete mess. As well the EUR has external forces pushing and pulling at it (as it is the second most widely held currency on Earth) that often effect its movement with little or no fundamental reasoning. It’s hard to call it a safe haven, it’s not commodity related, and its current economic position has it sitting in the junk pile so – what’s a guy to do?
I consider it a trade – and nothing more.
What might be interesting to some of you (looking to improve your short term trading skills as well your fundamental analysis) would be to watch the EUR this week against a number of different currencies, and observe a few things you likely won’t expect to see.
I won’t give it away now but….as the EUR may rise against the USD in value – perhaps it may fall against a few others. Can you spot them? Can you tell me “why”?
It’s great to be back in the saddle again – and I look forward to another profitable week trading with you.
I’ve inserted the following video for some light weekend viewing, and strongly encourage anyone receiving blog posts via email – to quickly skip over to the blog to watch it directly. The situation outlined in the video below is not for the faint of heart.
Regardless of how extreme this may be……does it really sound that far fetched?
Don’t kid yourself – there is a war going on. I’m not talking about some little skirmish over an Island, or a dispute between two neighboring nations over Immigration – I’m talking about a major, high level tactical war being fought right in front of your very eyes – only by way of dollars and cents…..with no guns required.
The Pentagon has run its simulations with top advisors from the financial and economic community (not high-ranking Generals and Majors) with the task of “flushing out potential attacks” and “plotting counter moves” with all the other good stuff one would imagine being included in a full scale Hollywood blockbuster. The guns have been replaced with financial instruments, the good guys and the bad guys are now your own government officials and central bankers – and the entire thing plays out in a digital war zone littered with crashed financial institutions, broken down bank accounts, highly manipulated markets and human casualties (financially speaking) in numbers I care not consider.
This is a currency war people – and it does not end well for those unwilling to accept it, and in turn prepare for it.
This headline just out of Venezuela: Venezuela devalued its currency for the fifth time in nine years as ailing President Hugo Chavez seeks to narrow a widening fiscal gap and reduce a shortage of dollars in the economy. The government will weaken the exchange rate by 33 percent to 6.3 bolivars per dollar, Finance Minister Jorge Giordani told reporters today in Caracas.
So……you just woke up and gold is up 33% – and your local loaf of bread just went through the roof. You don’t think this is what’s going on planet wide? How about the Yen recently? Have you checked the current value of the Pound?
Don’t be surprised to find a similar situation in the U.S – a lot sooner than most care to believe.
No country is willing to sit idle and allow the U.S to continue on its rampage of “easing” and continued flooding of U.S dollars without at least a fight. Unfortunately for many, the Chinese are about “10 moves ahead” with a war plan so complex and intricate it will make your head spin. (A lot more on that later).
In times of war you need to be a soldier – you need to navigate the trenches, and you need to protect yourself and your family.
At best – take interest in what’s going on in the currency world as this is the battle ground….this is where the fight will be lost or won.
With the recent purchase of a new Ipad 5 and subsequent purchase of the popular game “angry birds” (I bought the outer space version) it’s fair to say that my trading has suffered as a result . Now , with consideration of “going pro” it’s unlikely I will be able to commit the hours necessary, as well focus on trading so – angry birds it is.
Hardly…….but a real hoot all the same.
Market wise it appears that once again we are offered new opportunities to short USD on it’s rise over the past few days. I see absolutely no fundamental change here whatsoever, and as boring / repetitive as it may seem – I will again look to load short USD against a miriad of the majors.
Zooming out a touch, gold is still flat as a pancake and of particular interest the “TLT” 20 years treasury bond fund sits at a precarious position. A falling dollar as well falling bond prices can most certainly suggest money flowing into stocks (as we’ve been seeing) but is also reflective of higher interest rates, and in turn – pressure on borrowing and tougher times ahead for corporations.
When corporations suffer……stocks sell hard.Watch the bonds, watch the dollar and in series – stocks are the last to go.
Im back at it here full time as always everyone. Let the games begin!