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My Two Cents

Posted by Aadil on August 14, 2010 at 8:22pm
By Nicholas Santiago on August 13th, 2010 3:20pm Eastern Time Sometimes on Fridays I just have a feeling that I need to vent my thoughts to our viewers. Today I met someone that just told me they have not paid there mortgage in 18 months. The woman who was dressed very well volunteered her opinion while I was talking to the local grocer about how his local fruit market business was doing. She later said that she could afford the mortgage on the home which was built in 2005, however, she doubts that she could ever sell the house for what she paid and would just rather live comfortably in the house until the bank gives here a thirty day notice that she must leave. Ironically enough the woman says she works for a bank and doubts that they will ask her to leave anytime soon. She also said when she bought that home she was flipping houses and condos and this is the last property that she has that has not been repossessed yet. So she must know how the system works. She then said anyone that is underwater on their home should just not pay the mortgage and live out the free time that the bank gives them. I said to her nicely, “isn't this stealing or doing something deceptive”? She said that the banks were giving here no doc loans anytime she asked for them and that some properties she closed on in less that three weeks when times were good. She then said to me was that practice by the bank not deceptive. I shook my head and wished her luck and went on my way with my bag of broccoli and cabbage. While I was getting into my car I could not help but think about what is really going on in America. The whole system is broken and it cannot be fixed. This woman feels that the banks mislead her and the large major banks now know that they can hold the country hostage for their shameful lending practices. Please realize that these banks don't even have to lend money any longer to make money. They can simply borrow money from the Federal Reserve Bank at zero – quarter percent(basically free) and buy U.S. Treasuries and maintain their credit card business to make money. Let us not forget about their proprietary trading desks that they have as well. Meanwhile, they no longer have to show these so called default loans on their books due to the changes in the FASB(Financial Accounting Standards Board) accounting standards. These bad loans must no longer be marked down as a liability and categorized as an asset. What a racket. Recently my wife who has been on the prowl for a new home with all the fixings has noticed that the foreclosed homes on the market are now priced much higher than they were last year. This must be because the banks are showing these homes as assets and not liabilities. Therefore, if the bank lists a house at $500,000 even though the most recent comparable sale in the same neighborhood is $250,000 then they can show it as an asset on the books. Again, what a racket! Before I end this rant I just want to say I have no sympathy for the woman who is living in her house and not paying her mortgage. I also have no sympathy for people who took money out of their home and used it as an ATM machine and are now broke. You participated in the nations demise. As for the banks you should have all failed and went into bankruptcy. The courts could have then sold off the good pieces and let the rest of the institution fail. As for bailouts this party is over. The past forty years have been built on inflationary practices and bailouts. We are now living in a nation of entitlements and it keeps getting worse. Wake up America. That is my two cents.
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eurusd and dollar index

Posted by dentist 007 on August 14, 2010 at 2:01pm
a bit of trawling around box sizes to try and find the price action.action not clear on the hilo plot,so went to close data50 pip box size by 3 reversaldaily dataprice has made a strong upthrust and had no follow thru.a high pole in p/f terms price has now retraced 50 %,this is a critcal level in p/f terms.that makes the action difficult to call.so lots of short term volatility...imho

dollar index...daily..now at res.so it coincides with the eurusd chart price action

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Intraday Market Thought from Ashraf Laidi - http://www.ashraflaidi.com/forex-news/

Posted by Aadil on August 13, 2010 at 2:29pm
US RETAIL JUL SALES +0.4% as gains were concentrated in Autos and rising gasoline prices, but when exluding autos/gas/building materials, we get a 0.1% decline, which is the first since April. Equities will likely hover in and out of positive territory until the preliminary (14:55 GMT) release of Univ of Michigan consumer sentiment exp 70 from 66.5. EURUSD faces STerm resistance at 1.2830s, while AUDUSD capped at 0.9010, while EURJPY sees little upside above 110.30s. The PREFERRED SCENARIO for EUR in todays trading would be a robust consumer sentiment reading (above 71-72), which will likely improved risk appetite and especially EUR on the back of those Ezone GDP figures. Nonetheless, the technical break in this weeks equity indices has been significant that the bulls are unlikely to put up a fight. The bearish signal on S&P500 would be confirmed on a weekly close below the 55-week MA of 1,093. (Due to server issues, NOT ALL IMTS are being emailed)
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David Rosenberg interview 26 minutes

Posted by L Levin on August 13, 2010 at 2:16pm

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http://online.wsj.com/public/page/0_0_WP_3001.html?currentPlayingLocation=52&currentlyPlayingCollection=News&currentlyPlayingVideoId={156FFDD8-BB91-4C48-BF9C-91397BE10A0D}
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Intraday Market Thought from Ashraf Laidi - http://www.ashraflaidi.com/forex-news/

Posted by Aadil on August 13, 2010 at 11:03am
THE CURRENT BOUNCE IN SENTIMENT following strong Q2 GDP figures in Eurozone (1.7% q/q) and Germany (2.2%) has weighed on USD and JPY but both currencies are now off their lows as markets remain cautious ahead of US Jul retail sales and consumer sentiment. S&P500 yesterday closed below its 55-day MA after closing below its 100 and 200 MAs on Wed & Tues respectively. EURUSD faces resistance at $1.2930s, while GBPUSD and GBPJPY remain well in their downtrend, facing and $1.5560 and 133.20s. FTSE-100 lost 70 pts from earlier gains. Dow-30 futures +17 pts.
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Typical Aftershock Action So Far (NYSE:CLF) (NYSE:FCX) (NYSE:SCCO)

Posted by Aadil on August 13, 2010 at 3:36am
By Nicholas Santiago on August 12th, 2010 3:34pm Eastern Time Yesterday was a nasty sell day anyway you slice it or dice. The severe point decline in the major indexes yesterday did cause a lot of technical damage on the daily charts. Whenever the Dow Jones Industrial Average closes lower by more than 2.00 percent it is common to see a flat to slightly positive or negative session on the next trading day. We call this the “day after effect”. Therefore, if we see today's close on the Dow Jones Industrial Average finish positive or negative by 20.0 – 30.0 points this would the typical day after a large point move. This is essentially a pause or consolidation day. Today the leading commodity stocks are holding up well after declining sharply. Commodity stocks such as Cliffs Natural Resources Inc (NYSE:CLF), Freeport McMoRan Inc (NYSE:FCX), and Southern Copper Corp (NYSE:SCCO) are holding up very well trading slightly higher on the day. The action in these stocks is keeping the market form declining sharply lower. Should these stocks begin to sell off today these market indexes could decline very quickly. There are a couple of key things to watch today as the market closes in on the final forty minutes of the trading session. The first is to see if the market declines sharply into the close. Should this happen then that would be a sign of further weakness to come. The second is to see the pattern that is being formed on the charts ahead of tomorrow. This could tell us what is in the cards in the near term. In any case after a decline of yesterday's magnitude please be very cautious unless you are and experienced trader. This market is not for the average investor.
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Intraday Market Thought from Ashraf Laidi - http://www.ashraflaidi.com/forex-news/

Posted by Aadil on August 12, 2010 at 5:08pm
YEN EXTENDS PULLBACK as markets stabilize, while CHF takes over from the Japanese currency, reminding us the Swiss safehaven is here to stay. The latest comments from Japanese officials about excessive yen moves have not been sufficiently potent as markets widely believed intervention will not be carried out. Thus, any temporary selloff in JPY and USD sees more conviction buying in CHF. Hence, despite the 70-ptrally in EURUSD, EURCHF has deepened its losses by 150 pts after breaking below the 1.36 trend line support. AUDJPY, EURJPY and GBPY faces resistance at 77, 110.90 and 134.20, while downside remains intact. EURUSD bottomed at the 100-day MA for today but will be crucial for the pair to close the week above its June trendline support of $1.2770 to avoid immediate damage below $1.2580.
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Possible USD_JPY Falling Wedge

Posted by Geofract on August 12, 2010 at 7:52am

Possibly a falling wedge, which is a bullish reversal pattern. It's worth waiting for a break out, then pull back before getting me thinks, and that would be nice confirmation too :)Some H4 macd div too if you like that kind of thing. 85 big level on the weekly.
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Intraday Market Thought from Ashraf Laidi - http://www.ashraflaidi.com/forex-news/

Posted by Aadil on August 11, 2010 at 11:40pm
WHAT A DIFFRENCE 24-Hrs MAKES. Recapping why the stocks are down and both USD and JPY are up; MORE CHINESE DATA DISAPPOINTMENT sent Asian & European equities lower after a brief reprieve to risk appetite in late Tuesday US following the Feds announcement to buy more treasuries. US dollar was fired up as commodity currencies extend sell-off on concerns with a slowing China. Jul Indus production slowed to 13.4% y/y from 13.7%, retail sales slowed to 17.9% y/y from 18.3%, CPI rose to 3.3% from 2.9% mainly on floods impact. Combining the Feds prolonged downgrade of the US economy with further signs of a slowing China weighed significantly on the risk trade to the benefit of the safe haven USD & JPY (especially JPY). *** This is particularly the case when stocks undergo a sharp decline from 3-month highs. This is another case of unwinding of the carry trade.*** FOUR CHARTS IN ONE*** http://chart.ly/s8qbhr
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There Are Only So Many Sunny Days (NYSE:SPY) (NYSE:DIA) (NYSE:IWM) (NASDAQ:QQQQ)

Posted by Aadil on August 11, 2010 at 5:54pm
By Nicholas Santiago on August 11th, 2010 10:39am Eastern Time There is great song by the rock band Matchbox 20 called, “How Far We've Come”. When you think about it, it is pretty amazing how far the world has come on the back of inflation. The popular economist John Maynard Keynes was one of the first to come up with this inflation style of economics. If you look at the past 100 years in the United States the country has emerged as an economic power house on the back of inflation. I remember when my parents bought there first home in 1979 for $30,000 and selling for nearly $200,000 in 1988. They thought they were geniuses. However, the next home they purchased was unfortunately much higher and they later realized that in just a few short years their new house was worth less than they paid. Why did this happen to them? It is simple. It was a short term deflationary period. Since the Jimmy Carter administration the U.S. economy has been inflating higher into 2007. Now the new era of deflation has begun. The bailouts over the past 30 years have now caught up with the economy. Please realize that in the 1980's the U.S. economy survived the savings and loan crisis, and the junk bonds scandals. The economy also had a stock market crash in 1987 and a housing market bubble in 1988. By 1997 the Long Term Capital crisis emerged and the economy was bailed out successfully once again. In 1999 the tech bubble burst and many can argue that technology has never recovered from that high. In 2007 the greatest housing and credit bubble popped. Here we are today watching our government trying to bail out the large banks and countless homeowners that are now in negative equity. What is next on the horizon? Can the government continue to inflate its way out of problems and crisis? We are now in the deflation era. Even the Federal Reserve Bank now admits that deflation is a problem. Last year they would not even mention the “D” word. These days deflation has become a household name. In the United States we can really only look at the recent past and see Japan as a nation that has been fighting deflation for the past 20 years with very little success. Is this how it will be for the United States? There only seems to be one true cure for deflation and that is failure. However, rarely are large global corporations allowed to fail. Hence the term, “to big to fail”. Since we know the U.S. government and the Federal Reserve Bank will continue to follow the Keynesian philosophy by trying to inflate their way out of the problem. When will they throw in the towel should this method fail? That remains to be seen. Many people are now losing faith in the government. The government truly believes that they can spend their way out of anything by simply borrowing and spending. Remember the common man tried that during the mid 2000's and look at the position that he is in. Is it any different with a large nation? When does the spending end? Who is going to lend the U.S. money anymore? Is every country in the same shape as Greece? Unfortunately only time will tell when these questions can be answered. One thing is certain in these uncertain times and that is going forward these markets will be very choppy and for traders. They will not be for the mom and pop trader that buys stocks for the long haul. Stay tuned as the global soap opera is just getting started.
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