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Archive for March, 2008

293homealone121107.jpgWell, maybe while you were getting ready for bed. The Federal Reserve Bank decided to make an emergency move this evening and cut the bank lending rate to 3.25 percent from the 3.50 percent it was at earlier. This move made by the Fed was meant to “try” and create some stability in the financial markets. Also, at the same time, Bear Stearns (BSC) is being bought out by JP Morgan (JPM) at a steal of a price. This last minute buyout and the move by the Fed (who also approved this buy out by guaranteeing the deal with $30 billion) had an immediate effect on the overseas market and crushed the dollar. The EUR/USD hit a high of 1.5905 and the YEN hit 12 year low against the dollar at 95.74. Gold also was trading (at time of posting) around 1,026 an ounce. (I guess there goes the gold teeth I was considering!)

One way to help you against the falling value of your dollar is to hedge against it with the other currencies like going long the Euro or even long the Yen. Any trading against the dollar seems to be the most logical move. When asked what should be done about the financial crisis in the US, Federal Reserve chairman Ben Bernanke said “I don’t know!” No wonder the dollar is crashing and the basic carry trade is dead.

Well, hedge your bet for now or wait and see if the fed moves some more on Tuesday with another cut of 75 basis point. Bernankes strategy seems to be trying to keep the economy supported and worry about inflation later. We may see on the EUR/USD 1.6000 before Tuesday if the market sees even more weakness. Also, the USD/JPY may see an even lower level below 95.00 as weakness in the dollar continues. Tomorrow is a new day.

~ G

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shaysworthy1.jpgUSD/JPY-PARITY open up “new chapter”, USD/CHF, closing in on Parity

*** Fed announcement, w/ Bear Stearns, opening up Earnings next week, risk aversion pushing yen higher.

EUR/USD-finding no resistance, “where is the strong dollar policy”

½ pt/ ¾

Commodity etf’s—dbs, gld, dba, dbc.

CPI #’s (Probablly lower, off 2 for 1 sales, and saving $6.57)

http://forex.investools.com/commentary/audio.fx 

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Euro Gone Wild

Not to be mistaken or associated with the all-too well know similar title with “wild” in its heading (guys, you all know what that is all about from those late night infomercials), the euro has now hit the target on an ascending triangle formation (as seen in the below chart.) It has run and mad a 700 pip move and what a move it EUR/USD Ascending triangle formationwas!!!

Now that it has made the predicted move I am starting to see a possible pull-back down to a support level. I am not sure if it will pull back to 1.4900 or 1.5000 if it does. Currently, anything trading against the dollar seems to be the best bet to trade and may be the case for a while to come. It is hard to see this because I think the Fed and the administration wants the dollar to stay down. I like to think there is a method to their madness but for now, trading against the dollar may be the best thing for the time being.

~ G

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ME Ok, so I failed to introduce myself and I apologize. Gmantrading is my alias, Edward Goettig is my name. No, I wasn’t a former FBI agent, (but played one often as a kid!) Trading currencies is one of my passions in life that I can enjoy and have fun and have been with the Investools for the last 4 years. Another passion of mine is technical analysis and that is why I went and attained my CMT (Certified Market Technician) designation from the MTA. So, instead of a focus on fundamentals like a CFA may be, I focus on the technicals as a CMT.

I started my career in the banking industry about 14 years ago. Before becoming a PHD-level coach for Investools, I spent several years on the trading desk for First Security Bank, NA. I also handled the bank’s solvency through the Federal Reserve Bank by actively managing a large account. My background includes experience in currencies, bonds, equities, options and futures. My trading style is more of a short term approach of things, I don’t know if it is because of my attention span or just that I feel more comfortable with the quick short move and action of the trade. Either way, that is what I do and trade. I trade mostly the majors and some crosses but stick with those items that work best for me.

That is a little about me and as a coach, I could go on and on and on. But, alas, I won’t!

~ G

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shaysworthy1.jpg How upset I am at the Fed and the bull crap that they pull because it messes with my technical analysis. I saw this one coming after such desperate news yesterday.

Commodities up a little and GLD and SLV follow suit. Watch for the bull trap

EUR/USD rallies then collapses on news that ECB and SNB need some greenbacks from FED – Dealing with their problems in other ways

Keep risk and emotions in check and write down in a journal some of what you are seeing and feeling that the market is giving you so that you will more likely remember this feeling in the price action in the future.

Short term effects likely not long term gains.

If feels like choppiness until the feds final cut which is more and more likely to be 75 basis points.

http://forex.investools.com/commentary/audio.fx 

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The Federal Reserve moved today to add liquidity to the markets by announcing a series of actions with other central banks to help improve liquidity and lending for the markets. The Fed are taking this coordinated action without cutting interest rates due in part of rising inflation. US markets showed instant gratification in pre-market trading. and the Dollar rose in strength. The EUR/USD reversed an earlier move 150 pip run up right after the announcement. The USD/JPY ran up 120 pips after the announcements. With all this good news, the bulls may be back for the dollar.

This coordinated effort with the other central banks is being excepted very well with the ECB because it falls in line with what they are trying to achieve. Time will tell if it is a good move for the US markets and other markets around the world.

~G

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 * Contributed  by Investools coach Shay Aslett

crystal-ball.jpg Happy New Year! (Well, it’s only 20% gone – we still have 80% of the year) In this article, I’m going to predict your future and forecast exactly what kind of results you’re going to get in the next 12 months. Sylvia Browne, step aside… I’m pretty good at this.

What if I could take out my crystal ball and predict with 99% precision exactly what kind of results you will achieve with your trading & investing by year’s end?

Well, no problem, I can do that.

I would claim that I have some kind of “gift” for this, but to be honest, you and I don’t need to be psychic to make predictions like these.

There are two things you can always count on: (1) Nature’s laws of cause and effect, and (2) human nature.

On that basis, here are my 20 currency trading & investing predictions for the New Year:

shaysworthy1.jpg I PREDICT that if you can reach into your pocket on any day this year and pull out a card or piece of paper with all you’re currency trading & investing goals written on it in vivid detail, the odds are 95 to 1 in favor of you achieving every one of those goals before the year is out.

I PREDICT that if you focus your thoughts, on your goals and how you are going to achieve them, all day long, you will reach your goals so fast this year, it will make your head spin. “What you focus on expands”.

I PREDICT that if you focus your thoughts on investing woes and trading problems and if you think about what you don’t want, all day long, your problems will get worse than ever this year.

I PREDICT that if you made a new year’s resolution, but you didn’t turn it into a specific, written goal with a deadline and a strong reason why you must achieve it, you will freely abandon it the moment the going gets tough.

I PREDICT that if you can tell me all the reasons why achieving your currency trading & investing goals are important to you, you will be motivated from within to stick with it when the going gets tough.

I PREDICT that at times, the going is going to get tough.

I PREDICT that if you can tell me today what your life purpose is and what is your lifelong vision for your currency trading & investing, you will still be as motivated and driven at the end of the year as you were at the beginning.

I PREDICT that if you don’t have long term goals and a “big picture” vision for your life that you will lose your New Year’s enthusiasm and motivation in a matter of months or even weeks.

I PREDICT that the way you see yourself in your mind’s eye today will be an exact reflection of what you see in the P n’ L column at the end of the year.

I PREDICT that if you have a setback that seems to get in the way of you reaching your currency trading & investing goals and you tell yourself  “this is just temporary; this too shall pass,” then it will pass and it won’t set you back.

I PREDICT that if you believe the way you’re trading today, is out of your control and you feel helpless or powerless to change, you won’t even make much of an effort this year.

I PREDICT that if you accept complete responsibility for the way you are trading today and you believe that you have the power to change, that you will take action and keep taking action, even through the tough times.

I PREDICT that if you’re unhappy with your trading and investing and you say, “it’s not my fault” or you blame it on “the market”, central bankers or news, then your currency trading will look pretty much the same at the end of this year as it did on New Year’s day.

I PREDICT that the more you have patience, a long term perspective and the ability to postpone immediate gratification, the more likely you are to be a success one year from now.

I PREDICT that the more you seek the, “perfect trade”, “hot tip” or “the perfect trading product,” the more likely you are to be a failure one year from now.

I PREDICT that you will be tempted by many, high risk, quick-profits this year.

I PREDICT that if you hang out with losers and negative currency traders this year, you will become just like them.

I PREDICT that if you hang out with winners and positive currency traders this year, you will become just like them.

I PREDICT that you will run into more negative currency traders and losers this year than positive traders and winners.

I PREDICT that if you recruit just one currency trading & investing partner that stands behind you and the trading changes you want to make this year, you will double your chances for success. If you surround yourself with numerous trading & investing partners, you will become virtually unstoppable.

So how does your currency trading & investing future look for the year ahead?

Based on my “predictions,” if it doesn’t look as bright as you’d like it to be, then don’t worry, because a prediction is not predestination.

You can’t do anything to change the past, but by changing your thoughts, attitudes and actions in the present moment, the future is yours to create.

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