Archive for March, 2008
Mr. Banker’s Cutting Spree!
By Marek W. Stupka | March 15, 2008
In the upcoming FED meeting, Mr. Bernanke is about to cut interest rates for 0.75%. This magnificent move will bring down US interest rates to 2.25% !!
The US dollar recorded extended losses this week, mostly due to the prevailing Euro-bullish sentiment of investors, and also due to the fact that the market is already pricing in the 0.75% interest rate cut anticipated to be made by Mr. Bernanke & Co.
The US Federal Reserve Chairman has already gained a reputation for being mostly focused on fighting the danger of excessively increased inflation. Thus, his answer to the current state of the US economy, and the financial markets, is of course applying the only tool from his macroeconomy toolbox he thinks will help him achieve this goal - decrease FED’s interest rates…
This “smart” move has indeed been used many times in history to stimulate the economy credit-wise, and combat inflationary threats. However, there’s a flip side to the coin too. Once Mr. Banker goes down with the main interest rates for that much, the investment environment will be muted and discouraged alltogether, making the US economy - and the financial markets - a perfect adept for recession!!
Many analysts agree that Bernanke is fighting US recession using the very weapons that caused it to start declining in the first place. My opinion is exactly the same. Mr. Bernanke, let me make a conclusion here and now! Your macro policy seems to be theoretically OK, but - just look at the charts and face the truth - it has every atribute of a profound failure…
Note, that we at GI do not like trading the news. In other words, we prefer sophisticated technical trading strategies to predicting where the market will go judging solely by the economic results - visit Gepard Investments, Inc. website for more information.
Topics: News From Wall Street | No Comments »
$ Might Have Found Support!
By Marek W. Stupka | March 10, 2008
In the last weeks, there have been strong moves happening in the currency markets. The mostly affected currency pair is undoubtly the EURUSD …
[ Click on the chart to see bigger picture ] Note that the pair is at its all-time high. However, if we take a closer look at the long-term, 1W chart, we can see that the price has just reached ceiling of a distinct technical S/R tunnel (green).
Moreover, the technical indicators and S/R levels rendered on the 1D chart show us that there might be a perfect opportunity for the pair to let off steam, consolidate, and even make a temporary correction at this ultra-high price level…
Please be aware that WE DO NOT RECOMMEND TRADING AGAINST THE TREND at Gepard Investments, Inc. It means, that the above does not constitute any mid- to long-term trading opportunity. There might be, however, some short-term trading opportunities for this pair in the days to come. Note that they MUST BE analyzed using the technical tools of the CONFIRMATOR Trading System…
I will produce another trading signal this week, preferably for the EURUSD or any of the majors or carry trade crosses. Besides the EURUSD, the so-called “small”, or “commodity” dollars might have some pleasant surprises in store for us, since they are very much influenced by price action in the commodity markets which have been skyrocketing over the last couple of weeks. I will do my best to include charts for them to my periodically updated PDF Chart Planner too. Let’s make use of the trading opportunities laying ahead of us! Let’s make another string of consistent profits - review my recent trading results to see the details [ click here to view my trade journal ].
Topics: FOREX Trading Analysis | No Comments »
FED Injection to Save the $?
By Marek W. Stupka | March 10, 2008
Last week, the US dollar recorded another all-time high. Interestingly though, it was not the drop in the NFP that influenced last price action …
The US Federal Reserve made it clear many times that it is very worried about the current state of the US economy and the financial markets. The Friday’s payroll numbers tell us that the US economy is already in a recession and it is just a matter of time before the retail sector starts turning negative as well…
This negative outlook of the US economy seems to have one implication and one implication only - in two weeks, FED will have no choice but to cut interest rates for 75bp which will bring interest rates down to as low as 2.25 percent. Moreover, many analysts agree that the following NFP reports will only worsen in the months to come.
With gas prices skyrocketing, labor market going down the river, and consumer confidence wretchedly positioned at record lows, the biggest event risk of the US economy today - the Retail Sales - will be forced to turn the very opposite to stellar numbers any time soon. Once the train starts heading south, it might get difficult to stop…
However, we must not forget what has been the true reason the train actually made its first move. Undoubtly, it’s been the ever-increasing American indebtness caused predominantly by the country’s vast military expenses. This might, as many of us are hoping, change radically with the appearance of a new American president. Therefore, the presidential elections in November will very likely mean a signifiacant change for the fate of the US economy. After having thoroughly analyzed several long-term economy outlooks for the USA, written by the finest ecnomists and analysts worldwide, I honestly see no real long-term economy crisis or recession for the “Land of the free”. Most of the papers I read count with stabilisation, and even improvement, of the American economy near the end of 2008. These long-term analysis are in harmony with my own technical outlook for the USD.
Note, that we at GI are not fundamental traders. This means that our trading positions are triggered by sophisticated technical systems. We only consider fundamentals to be generators of market moves, but we never try to determine in which direction the market is going to move judged solely by the economic reports. If you - like many other successful traders from around the world - would like to adopt the back-tested GI trading strategies, please visit Gepard Investments, Inc. website for more information.
Topics: News From Wall Street | No Comments »