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September 30, 2011

Building Bargains: Why REITs Look Attractive

Filed under: Investing — Tags: , , , , — admin @ 11:58 pm

Sell on Friday and go away

Filed under: Forex Strategies — Tags: , , — admin @ 4:42 pm

We are heading out early today after suggesting a new market adage…

“Sell on Friday and go away
Don’t buy again til next Tuesday”

Wishing you all a none too terrible month/quarter end and hoping that your Octobers not be red.

We leave you with the commisioner for EU policy –

GBPUSD’s rise extended further to 1.5715

Filed under: Forex News — Tags: , , , , — admin @ 3:09 am

GBPUSD’s rise from 1.5327 extended further to as high as 1.5715. Support is at 1.5500, as long as this level holds, uptrend could be expected to continue and the target would be at 1.5800 area. However, a breakdown below 1.5500 will indicate that a cycle top has been formed at 1.5715 on 4-hour chart and the rise from 1.5327 has completed, then the following downward move could bring price back to test 1.5327 previous low support.


Forex Technical Analysis

Euro Recovering Ahead of German Vote; Markets Under Pressure After Another Sell-Off

Filed under: Technical Analysis — Tags: , , , , , , , , , , — admin @ 3:05 am

Quote of the day: “Nothing great was ever created by waiting around for someone to tell you it’s all going to be okay or for perfect information to drop from the sky” ~ Jonathan Fields Good morning. The markets pulled back yesterday in risk-off trade but the euro is currently recovering ahead of German lawmakers vote on Read More

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Article Source | Post tags: AUDNZD, AUDUSD, Australian Dollar, bailouts, breakout trading, British Pound, Euro, EURUSD, GBPUSD, Germany, Greece, New Zealand Dollar

Daily Forex Fundamentals – September 29, 2011

Filed under: Currency Charts — Tags: , , , , — admin @ 1:28 am

What’s on the Economic Horizon

U.S. Pending Home Sales on tap
U.K. Nationwide house price index due today
Japan scheduled to release CPI, manufacturing PMI, unemployment rate, and preliminary industrial production

U.S. Dollar (USD)

Was risk aversion back in fashion yesterday, or were the currency bulls simply out to see the new Kindle Fire tablet? Whatever the reason, the Greenback once again gained across the board, which sent EUR/USD 47 pips Read more…

Euro (EUR)

Just another bad day in the office for the euro, huh? It lost ground against its major counterparts again as euro zone showed very little progress in solving their debt crisis. EUR/USD dropped from a high of 1.3691 to a low of Read more…

British Pound (GBP)

After three whole straight days of gains, the pound faltered in yesterday’s trading session as risk aversion managed to make its way back to the foreign exchange market. As usual, the heightened case of Read more…

Japanese Yen (JPY)

“Alright, who turned off risk aversion yesterday?!” The BOJ peeps are probably back on the edge of their seats after the yen strengthened against its counterparts yesterday. USD/JPY ended up Read more…

Canadian Dollar (CAD)

The Loonie bid sayonara to its recent gains yesterday as USD/CAD climbed from its 1.0204 open price to close at 1.0326. It turns out the Loonie’s rebound the other day was merely a Read more…

Australian Dollar (AUD)

Nope, not today Aussie bulls. Despite the strong HIA new home sales data from Australia, AUD/USD was pushed down by risk aversion in markets yesterday. AUD/USD fell from an intraday high of Read more…

New Zealand Dollar (NZD)

Poor, battered Kiwi! The Kiwi turned out to be one of the biggest losers in the last 24 hours as risk aversion managed to rear its ugly head again. NZD/USD, which started out the day strongly at Read more…

Swiss Franc (CHF)

Up and down the Swissy went, where it ended up… Well, I know! USD/CHF experienced a wild roller coaster ride yesterday as risk aversion hit the markets again. The pair rose slightly throughout the morning Asian session, then fell during Read more…

Bonnie and Clyde, peanut butter and jelly, Justin Bieber and his hair. Some things just go well together.

In forex trading, you get better odds at securing pips when your fundamental analysis is complemented by technical analysis.

Head on to Big Pippin’s Daily Chart Art for some pip-locking technical setups!

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USD/JPY To Break-Out?

Filed under: Business — Tags: , — admin @ 12:27 am

Over the past few weeks, the USD/JPY pair has been trading in a fairly tight range for the safe haven currencies.  A bottom had been put in near 76 after the Bank of Japan intervened in the currency the last time the Yen saw that level vs. USD.

So there were many questions as to whether or not the Yen would be deemed a more “desirable” safe-haven as the risk aversion due to the Euro debt crisis picked up.   Surprisingly, the markets didn’t really favor one over the other to this point, and the BOJ resolve to weakne the Yen was not re-tested.

Thus a range was created between 76-77 for USD/JPY and it had been trading there ever since.  But now, with the vote for the EFSF having passed in Germany (they were seen as the biggest potential obstacle) the market may move back toward risk taking which should encourage US Dollar buying vs. the Yen.   With clear support established at 76, a confirmed breakout above 77 means that we could be at 79 in no time.

Google Analytics adds free real-time website tracking

Filed under: Business — Tags: , , , , , , — admin @ 12:19 am

Madoff payments to victims delayed

Filed under: Business — Tags: , , , — admin @ 12:19 am

September 29, 2011

4 Scenarios to Spark a Rally

Filed under: Investing — Tags: , , — admin @ 11:58 pm

China Squeeze

Filed under: Forex Strategies — Tags: , — admin @ 4:42 pm

Europe and all things European have been holding the world’s attention to an extent that it’s all too easy to forget that life goes on elsewhere. One of the corollaries of the European shock has been a general global deleveraging rolling right through to the emerging markets.

TMM had some pretty dark things to say at the start of the year about emerging markets and particularly China. As trades go, this has worked – The Hang Seng and Hang Seng China Enterprises index has dropped gradually throughout the year and has really been hammered since August in particular. As noted by the esteemed commodities analysts at the US ex-investment bank, copper is very closely correlated to China fixed asset investment, which appears to have become public enemy number 1 of the People’s Bank of China’s latest tightening campaign. It dropped off heavily and has taken copper with it. See below the bonds of Evergrande, a property developer, and copper and China fixed asset investment. All jokes aside, the China real estate bond market really is copper with a coupon.

Much of what seems to have kicked off this panic is not anything particularly new to TMM: China has an unbalanced economy, is too dependent upon fixed asset investment and its banks end up short puts on a lot of bad investments. So far so good – China property, banks and basic materials have been a great short.

But here is where TMM find themselves out of line with the market thinking. First, you haven’t thought anything through until you consider the government and likely policy responses, given the command economy context. In TMM’s opinion watching the banking sector explode into a flaming wreck is not something the government will sit by and watch idly and the last time we heard of Wenzhou SME’s blowing up, credit loosening was not far behind. Similarly, some will point to high levels of inflation, but breaking China inflation down into food, non food and housing (see chart below; white line – food, orange line – non food, yellow line – rents), a big part of non-food makes it pretty clear that food is beginning to turn for its own reasons, while house prices and rents really are falling out of bed. Given what global financial conditions have been doing (and reading some chemical company transcripts), we are inclined to think that the global situation has gotten bad enough for the PBOC hawks to stay hooded when the local banks scream for looser credit.

In summary: the worst may be yet to come, but probably not in the next 6 months.

On valuation, China’s banks are about as beat up as they ever have been historically as you can see below:

On a back-to-basics corporate finance level they are looking cheap, assuming that most of the book value isn’t a complete write off. Now, bears may scream “BUT IT IS, INNIT?”, to which TMM would agree, – but then again we would also note that the government has demonstrated prior ability to take on pools of toxic loans, throw them in an AMC and forget about it for quite some time (lessons for the Europeans?). Being super short on the assumption that the banks will have to issue equity that will allow you to cover may not work. Given these numbers, if we see a combination of loans bought by Huarong and Cinda and a stimulus, we could see a squeeze that could rip this stuff 30-40% higher.

Which gets us to positioning data and, suffice it to say, the market has got itself very net short in copper per the COT data and the short sale turnover / total turnover picture in HK below is looking pretty extreme too.

And on that point, TMM are covering and running. When shorting Chalco and Anhui Conch looks more like a T8 Typhoon day in Hong Kong (see below), we’ll be back.

In the meantime, we’d rather sit out the next move down and not risk the squeeze and instead start thinking about what the next white elephant nation building/wealth expropriating capex binge China will come up with next. Rail? Soooo 2008! TMM are looking at stuff like this instead.

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