Archive for January, 2008
Carry Trade Softens With DJIA!
By Marek W. Stupka | January 24, 2008
The stunning collapse in global equity markets I mentioned in the “What’s Hot?” section trigerred carry trade liquidation of just about 300 bp…
[ Click on the chart to see bigger picture ] However, as you can see on the 1d chart for the GBPJPY above, the price movement itself was far from a fierce, or unusual, development in the carry trade markets. Impact of the Wall Street meltdown was rather muted…
Notice that this is one of the reasons to trade FOREX and abandon trading risky stocks and stock indexes. The thing is that with stocks you simply never now what happens the next day. There are fierce price collapses like this one. There are market gaps that no one will ever fill. [ click here to see FX advantages ].
On the other hand, spot FOREX, along with certain commodity futures and options, represent the financial market instruments on the opposite side of the unexpected risk scale. Want the conslusion? It is rather obvious: WE ARE IN THE RIGHT MARKET!!
Topics: FOREX Trading Analysis | No Comments »
US FED Emergency Rate Cut!
By Marek W. Stupka | January 24, 2008
FED Chairman, Ted Bernanke, made a desperate attempt to save the melting equity markets, and came up with a 75bp emergency rate cut…
As I wrote in my previous article, the global equity markets found themselves amidst the ugliest price slip since 9/11. Traders came to realize it right after the Monday holiday!
Now, the US FED was forced to consider an intermeeting rate cut to save the situation. And that’s exactly what Mr. Bernanke & co. did - they decreased the official central bank interest rate for 75 bp.
This simple but quite effective action helped to keep EURUSD under the 1.4700 resistance. Congratulations, Mr. Bernanke! You planned your intervention well.
However, next week has in store for the trading community several events and reports that might erase Mr. Bernanke’s intervening efforts. First of all, analysts worldwide expect the ECB (European Central Bank) to maintain a staunchly hawkish tone in the coming days. Second, the FED fund futures are already pricing in another round of rate cuts. And third, but not last, the economy calendar for the week to come shows the US house sector data that are expected to print anything but stellar numbers…
On the other hand, the risk-aversive mood of investors worldwide that I have mentioned in my previous article, and that is the driving force of the carry trade markets, can lead EURUSD lower as well. And so - get ready for a volatile trading week!
Anyway, the FX markets due to their instant “business hours” as well as their lower sensitivity to the major stock market turbulences constantly generate trading opportunities that all of my 1-on-1 Training participants can easily identify and cash in. You too can participate in the 1-on-1 Training no matter where you live or what you do - and LEARN HOW to trade FOREX with consistent profits!
Topics: News From Wall Street | No Comments »
Stock Indexes Plunge!!
By Marek W. Stupka | January 23, 2008
On Monday, stock markets worldwide have seen the 4-th ugliest drop ever. There has been no such a severe slide in the stock prices since 9/11 …
This week’s Monday has been titled “black” in the stock business. The German DAX plunged 7%, Hong Kong’s Hang Seng felt 5%, and Dow futures dropped more than 5.4% !!!
Reasons for such a meltdown are obvious - the underlying story was written months ago when we witnessed the unfamous liquidity crunch in the US subprime credit sector. This Monday’s stock collapse is merely a reflection of this phenomenon, propeled by the labor force cuts made by managements of many large US banks, as well as by the weak NAR housing sector numbers…
Note, however, that impact of the stock market plunge on the FX markets was quite muted. The most affected was the carry trade basket. On Monday and Tuesday, we have witnessed carry trade liquidation translated in just a we-have-seen-it-before price action (e.g. EURJPY felt not much more than 300 points). Comparing to 1383 points tsunami in the Hong Kong index, FOREX price movements are a mere sea breeze….
Topics: News From Wall Street | No Comments »
Aussie Continues to Rise!
By Marek W. Stupka | January 13, 2008
The Australian dollar continues in its generally bullish trend established in the beginning of 2007. The underlying fundamentals keep showing stellar nrs…
But wait, there’s more to this trend-confirming opportunity! Not only the fundamentals speak in favor of trading the AUDUSD long. The pair’s technical picture says the same thing !!
In the trading week to come, I will defnitely include Aussie - and the most traded currency pairs it is comprised in - in my new Chart Planner update…
N.B. Chart Planners, along with specific Trade Signals, are delivered straight to inboxes of my 1-on-1 Students. In this way, they can follow where I am in my planning, see my charts, and even profit from my systems and apply the individual trade setups I have.
You too can participate in my 1-on-1 Training and LEARN HOW to trade FOREX with consistent profits (yes, you’ll be getting the Chart Planners and Trade Signals too).
Topics: Uncategorized | No Comments »
FED and ECB Rate Decisions
By Marek W. Stupka | January 11, 2008
In few weeks, the two world’s most important central banks are about to make their interest rate decisions. Speeches of both CB chiefs hold clues…
Yesterday, the two most important policy makers in the world gave their speaches, indicating possible development in their financial policies. While Jean-Claude Trichet, president of the ECB, remained clearly hawkish throughout the whole presentation, Ted Bernanke, president of the US FED, formed his speech in a distinctly dovish tone…
General mood and specific formulations presented in speaches of both CB presidents give the investors clear signs of whether the two most influential men in the investment business are about to increase, decrease, or leave unchanged, their CB interest rate levels in the next commitee meetings…
Judging by the above, and also by the fundamental analysis of the two respective economies, there are very high chances for the ECB to hike rates. At the same time, the US FED is almost certainly going to decrease its current interest rate level. Some analysts predict the rate cut to be as high as 0.75%. If this is to happen, it will only be the second cut of this scope in the past 15 years !!
And truly, the market flexibly responded to the news above. Just watch the 1h chart for the referential currency pair EUR/USD. Since the anticipated interest rate decision of any major central bank very likely is the second most infuential fundamental report in this business (NFP is the first), this piece of information is going to have impact on the related FOREX pairs in the next days/weeks as well…
Topics: News From Wall Street | No Comments »
GBPJPY Near to LT Support!
By Marek W. Stupka | January 9, 2008
After the anticipated rise in the carry trade most traded currency pair, the price felt to lower levels. The pair is now touching the green Support line…
[ Click on the chart to see bigger picture ] Observe the 1W chart for GBPJPY above. The green, long-term line forms an important Support for the pair’s next price action.
For the reason above, I advise to stay on the sidelines till the technical patterns clear up here. Note, however, that the 1 week chart above is profoundly long-term. Therefore, next week migt store some short-term trading opportunities perfectly OK for us to be taken.
The last couple of trades I took on this pair turned out to be winners and winners only [ click here to view my trade journal ]. Due to its inherit dynamics, the pair has the best profit potential out of all the FX currency pairs there are!
NOTE TO MY 1-ON-1 STUDENTS: Watch this pair as well as other carry and major pairs, in the days to come. I will do my utmost to produce another trade signal in the course of the coming week. As usual, the signal will be delivered exclusively to the inboxes of my students soon enough to analyze it and trade it.
Topics: FOREX Trading Analysis | No Comments »