Dentalfloss
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needs to hold above 5080 area now.ie the highest downtrend lline
tick data
4 pts box by reversal
tick data
4 pts box by reversal
Wallstreet1928 Analysis & live calls on FTSE,DAX,S&P...aimed to help New traders
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wallstreet1928
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thank you my friend
wallstreet1928
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Da.DesiTrader
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Guys, what do you think about USD/CHF. I am looking to long around 1025
wallstreet1928
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i am short ftse 5103 ..stop loss 5128
target 5053
target 5053
Thank you
Hi WS,
Great thread, very educational for newbies like myself. Please keep it going.
Cheers
Hi WS,
Great thread, very educational for newbies like myself. Please keep it going.
Cheers
WS can you explain the rationale behind taking this position, please.
Interesting Article on Euro
Why 23 October could be a bad day for the euro By MoneyWeek Editor John Stepek Oct 06, 2009
Comments (0) Print this article
Latvia must set a budget by 23 October
The Irish voted for the Lisbon Treaty with a hearty 'yes' on Friday.
They didn't have a lot of choice. Or at least, they felt they didn't. Ireland is in a deep hole right now. Apart from pretty-much bankrupt countries like Iceland, Ireland is the developed economy which has suffered the worst in the financial crisis. And the last thing the Irish felt like doing was embracing wholesale change, which might make things even worse.
Of course, things are going to be painful for Ireland either way. No one can wave a magic wand and make the recession go away. But at least the EU can breathe a sigh of relief at wiping out another threat to the European project.
The real threat to Europe lies elsewhere...
How Latvia ended up in such a mess
Few countries are having a tougher time in this recession than Ireland. Latvia is one of them.
The Latvian economy shrunk by 18.2% in the 12 months to June. In other words, the country's economy is now nearly a fifth smaller than it was just a year ago. That's a lot to lose.
How did it end up in this mess? Latvia is a member of the EU, but has its own currency, the lat, which is pegged to the euro. Basically, the country fell victim to the "euro convergence" trade during the good times. This was the assumption by investors that most countries in eastern Europe would end up joining the euro, so therefore you could treat their obscure and previously somewhat dubious currencies as basically being just as good as euros.
This led to lots of foreign-owned banks piling into these countries – in Latvia's case, it was Swedish banks – offering cheap finance denominated in euros, or Swiss francs. Loose money led to property and other asset bubbles. Then when the easy money days vanished, so did the prosperity. And just like in Ireland, when you ripped the property bubble away, what you were left with was an uncompetitive economy with too-high wages and too much reliance on an over-inflated property sector.
Meanwhile, with foreigners unwilling to lend any more money to the country, Latvia has already had to turn to the International Monetary Fund (IMF) for a bail-out. It is currently being propped up with loans from the IMF and the EU.
Latvia has to devalue the hard way
Normally, what would happen in such circumstances is that a country's currency would collapse – like Iceland's for example. But Latvia is defending its currency peg because it has its heart set on euro membership. That means that it has to devalue the hard way – wages and prices have to fall to make the country more competitive. On top of this, to secure further tranches of lending from the IMF, the country is having to meet tough austerity measures to show that it's serious about repaying its debts.
But as Ambrose Evans-Pritchard has regularly pointed out in The Telegraph, this route out of a crisis is painful. And it's not the sort of thing that populations put up with for long.
--------------------------------------------------------------------------------
Special FREE report from MoneyWeek magazine: When will house prices bottom out - and how will you know?
Why UK property prices are going to fall 50%
When it will be time to get back in and buy up half price property
--------------------------------------------------------------------------------
Already, Latvia's governing coalition is falling out over the austerity measures. Last month, the government failed to push through a property tax raise which was a key aspect of the EU and IMF bailout conditions. Then at the weekend, the government announced it would make budget cuts of 225m lats, rather than the 275m expected. The IMF has asked for a total of 500m in cuts.
If it doesn't meet these conditions, and the IMF decides to pull the plug, then Latvia can't continue to defend its currency peg, and it will basically go bust. And if the IMF ever felt over a barrel because of the risk to the wider global economy, it certainly doesn't any more.
As Lars Christensen of Danske Bank tells Evans-Pritchard: "They [Latvia] don't seem to understand that the IMF and EU are willing to walk away now that the global economy has improved and spill-over risks have been reduced." The Swedish press yesterday were reporting that Swedish finance minister Anders Borg had been holding secret talks with Sweden's big banks, Swedbank and SEB, to "prepare them for the fallout," says Izabella Kaminska on FT Alphaville. Borg has already warned Latvia that "lenders' patience is wearing thin".
However, the IMF and EU shouldn't get too complacent. If Latvia goes, we could see other countries in the region abandon their pegs and devalue too. And as the Asian crisis showed us all in the Nineties, when one domino topples, you can never be quite sure where the chain reaction will actually end. The IMF reckons that of all the banks in the world, Europe's are the ones sitting on the biggest pile of undisclosed toxic debts. A crisis in Eastern Europe could be just the thing to bring that weakness to light.
Why 23 October could be a bad day for the euro
The Latvian government has to submit its budget proposal for 2010 to Parliament by 23 October. If it doesn't come up with a suitably austere package, then we'll soon find out whether Latvian devaluation will end up being a storm in a teacup, or the start of something much bigger.
What does that mean for investors? Well, as my colleague David Stevenson pointed out yesterday (How to profit from a rebound in the dollar), everyone is rather gloomy about prospects for the dollar right now. At the same time, investors seem somewhat complacent about prospects for the euro, particularly in light of the Irish 'yes' vote. It's another reason to believe the dollar is overdue a bounce while the euro is overvalued - and a crisis in Latvia could be just the catalyst.
Then of course, there's the threat to the wider global economy. The Federal Reserve always said that the subprime crisis was a small, easily-contained problem. They were wrong about that. Those who think Latvia's problems will be easily contained could be just as badly wrong.
That's another reason to be cautious about prospects for stock markets. As we've said for a while now, investors should be very picky when choosing stocks. We've favoured big blue-chip defensive plays for a while now, but I've just been reading about an interesting stock-picking method based on looking at research and development spending. I don't have space to go into it in detail right now, but I'll have more from the chap behind the method, Dr Mike Tubbs, later this week – keep an eye out for it.
Why 23 October could be a bad day for the euro By MoneyWeek Editor John Stepek Oct 06, 2009
Comments (0) Print this article
Latvia must set a budget by 23 October
The Irish voted for the Lisbon Treaty with a hearty 'yes' on Friday.
They didn't have a lot of choice. Or at least, they felt they didn't. Ireland is in a deep hole right now. Apart from pretty-much bankrupt countries like Iceland, Ireland is the developed economy which has suffered the worst in the financial crisis. And the last thing the Irish felt like doing was embracing wholesale change, which might make things even worse.
Of course, things are going to be painful for Ireland either way. No one can wave a magic wand and make the recession go away. But at least the EU can breathe a sigh of relief at wiping out another threat to the European project.
The real threat to Europe lies elsewhere...
How Latvia ended up in such a mess
Few countries are having a tougher time in this recession than Ireland. Latvia is one of them.
The Latvian economy shrunk by 18.2% in the 12 months to June. In other words, the country's economy is now nearly a fifth smaller than it was just a year ago. That's a lot to lose.
How did it end up in this mess? Latvia is a member of the EU, but has its own currency, the lat, which is pegged to the euro. Basically, the country fell victim to the "euro convergence" trade during the good times. This was the assumption by investors that most countries in eastern Europe would end up joining the euro, so therefore you could treat their obscure and previously somewhat dubious currencies as basically being just as good as euros.
This led to lots of foreign-owned banks piling into these countries – in Latvia's case, it was Swedish banks – offering cheap finance denominated in euros, or Swiss francs. Loose money led to property and other asset bubbles. Then when the easy money days vanished, so did the prosperity. And just like in Ireland, when you ripped the property bubble away, what you were left with was an uncompetitive economy with too-high wages and too much reliance on an over-inflated property sector.
Meanwhile, with foreigners unwilling to lend any more money to the country, Latvia has already had to turn to the International Monetary Fund (IMF) for a bail-out. It is currently being propped up with loans from the IMF and the EU.
Latvia has to devalue the hard way
Normally, what would happen in such circumstances is that a country's currency would collapse – like Iceland's for example. But Latvia is defending its currency peg because it has its heart set on euro membership. That means that it has to devalue the hard way – wages and prices have to fall to make the country more competitive. On top of this, to secure further tranches of lending from the IMF, the country is having to meet tough austerity measures to show that it's serious about repaying its debts.
But as Ambrose Evans-Pritchard has regularly pointed out in The Telegraph, this route out of a crisis is painful. And it's not the sort of thing that populations put up with for long.
--------------------------------------------------------------------------------
Special FREE report from MoneyWeek magazine: When will house prices bottom out - and how will you know?
Why UK property prices are going to fall 50%
When it will be time to get back in and buy up half price property
--------------------------------------------------------------------------------
Already, Latvia's governing coalition is falling out over the austerity measures. Last month, the government failed to push through a property tax raise which was a key aspect of the EU and IMF bailout conditions. Then at the weekend, the government announced it would make budget cuts of 225m lats, rather than the 275m expected. The IMF has asked for a total of 500m in cuts.
If it doesn't meet these conditions, and the IMF decides to pull the plug, then Latvia can't continue to defend its currency peg, and it will basically go bust. And if the IMF ever felt over a barrel because of the risk to the wider global economy, it certainly doesn't any more.
As Lars Christensen of Danske Bank tells Evans-Pritchard: "They [Latvia] don't seem to understand that the IMF and EU are willing to walk away now that the global economy has improved and spill-over risks have been reduced." The Swedish press yesterday were reporting that Swedish finance minister Anders Borg had been holding secret talks with Sweden's big banks, Swedbank and SEB, to "prepare them for the fallout," says Izabella Kaminska on FT Alphaville. Borg has already warned Latvia that "lenders' patience is wearing thin".
However, the IMF and EU shouldn't get too complacent. If Latvia goes, we could see other countries in the region abandon their pegs and devalue too. And as the Asian crisis showed us all in the Nineties, when one domino topples, you can never be quite sure where the chain reaction will actually end. The IMF reckons that of all the banks in the world, Europe's are the ones sitting on the biggest pile of undisclosed toxic debts. A crisis in Eastern Europe could be just the thing to bring that weakness to light.
Why 23 October could be a bad day for the euro
The Latvian government has to submit its budget proposal for 2010 to Parliament by 23 October. If it doesn't come up with a suitably austere package, then we'll soon find out whether Latvian devaluation will end up being a storm in a teacup, or the start of something much bigger.
What does that mean for investors? Well, as my colleague David Stevenson pointed out yesterday (How to profit from a rebound in the dollar), everyone is rather gloomy about prospects for the dollar right now. At the same time, investors seem somewhat complacent about prospects for the euro, particularly in light of the Irish 'yes' vote. It's another reason to believe the dollar is overdue a bounce while the euro is overvalued - and a crisis in Latvia could be just the catalyst.
Then of course, there's the threat to the wider global economy. The Federal Reserve always said that the subprime crisis was a small, easily-contained problem. They were wrong about that. Those who think Latvia's problems will be easily contained could be just as badly wrong.
That's another reason to be cautious about prospects for stock markets. As we've said for a while now, investors should be very picky when choosing stocks. We've favoured big blue-chip defensive plays for a while now, but I've just been reading about an interesting stock-picking method based on looking at research and development spending. I don't have space to go into it in detail right now, but I'll have more from the chap behind the method, Dr Mike Tubbs, later this week – keep an eye out for it.
I wonder whether we will see the DOW, GAP fill to yesterdays close. It seems to happen mopre often than not when weve had a big rise in the futures during European time. Might be worth trading with a tight stop, just prior to the open of the US. I see on the PaddyPower web site that 63 and 87% of the open spread positions are short the FTSE and DAX respectively. Do you join the herd or take the contrary view?
Da.DesiTrader
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These are just the positions that Paddy customers have? right?
any other brokers provide this? and most importantly does IG provide this?
Yes what their customers have on at the time. I dont know whats its worth but its another bit of info to put into the pot. Im short the DAX from 5594 (not a great entry), with a tight SL of 10 points. Seeing what the US does on the open.
Dentalfloss
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what was the reason for the miners ticking up today...???
Ho Hum!
Da.DesiTrader
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Your SL is too tight if you ask me. Why dont you forward test indicator a bit (either demo or eyeballing)?
above 50% majority direction with a stop loss of 25. See how many times its profitable.
Just eyeball or demo pls. Let us know, how it goes. Different combinations could be useful. eg, above 50 to 60% in short direction, while price reaching a major support area, then a long there would mean you'll actually jump with the bounce for shortcovering and vice versa.
Major stops chasing, is another angle.
I never knew this was available, as I am restricted to IG only
wallstreet1928
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position closed break even
could have taken 10 points but must always follow my method
that really was a strong upward draft
wallstreet1928
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thank you very much my friend
wallstreet1928
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keep an eye on this chaps
Dollar index
Even though the article in today’s U.K. Independent about secret meetings between Gulf States, China, Russia and Brazil to establish non-dollar denominated oil contracts lacks validity, it should remind the market about the long standing desire of many non Anglo-Saxon nations to reduce their dependence on the dollar.
Dollar index
Even though the article in today’s U.K. Independent about secret meetings between Gulf States, China, Russia and Brazil to establish non-dollar denominated oil contracts lacks validity, it should remind the market about the long standing desire of many non Anglo-Saxon nations to reduce their dependence on the dollar.
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