Euro short part 2

hello,

on my last post which I recommended buying short. [link below]

Euro Short !!!; 13rd August 2013

after my analysis, market generated an additional wave that reached a new high in the currently correction. This wave had form three movements A-B-C (red rectangle on the chart). Which means the weakness of the Euro and probably currently  shaped wedge bullish, which is its end should be at the level of 3475.

Risk to this scenario is, of course, the war in Syria. Americans gave to the public that they have plenty of evidence to the fact that the Syrian regime used chemical weapons. Among other things, they have to be a satellite image. This evidence is to be a response to the Russian argument that we do not know which side used a weapon. The U.S. has not only the support of the UK. Definitely for action declared by France. And in Israel, there was a concern that Assad could use chemical weapons against the citizens of this country, although it is possible that the regime decides to take such a step was in response to an attack. For Israel, the answer is clear, however desirable - the Syrian regime is supported by Tehran, so it would be a warning sign for the new Iranian president. Finally, the overwhelming response flowed from the Arab League. The representatives agreed that chemical weapons was obviously used and the countries of the West should answer that.

EUR/USD H4, 28-08-2013

regards,

oscarjp

The information contained in this publication is not intended as an offer or solicitation for the purchase or sale of any financial instrument. Any opinion offered herein reflects oscarjp-chrimatistikos current judgment and may change without notice. Users acknowledge and agree to the fact that, by its very nature, any investment in shares, stock options and similar and assimilated products is characterised by a certain degree of uncertainty and that, consequently, any investment of this nature involves risks for which the user is solely responsible and liable.

Structure of the Bank of England

just like in a post below I put the structure of the Bank of England:

structure of BoE

regards,
oscarjp

Structure of the Federal Reserve System

The Federal Reserve System is composed of five parts:

1. The presidentially appointed Board of Governors (or Federal Reserve Board), an independent federal government agency located in Washington, D.C.
2. The Federal Open Market Committee (FOMC), composed of the seven members of the Federal Reserve Board and five of the twelve Federal Reserve Bank presidents, which oversees open market operations, the principal tool of U.S. monetary policy.
3. Twelve regional Federal Reserve Banks located in major cities throughout the nation, which divide the nation into twelve Federal Reserve districts. The Federal Reserve Banks act as fiscal agents for the U.S. Treasury, and each has its own nine-member board of directors.

4. Numerous other private U.S. member banks, which own required amounts of non-transferable stock in their regional Federal Reserve Banks.

5. Various advisory councils.

Outline

Whole

• The nation's central bank,
• A regional structure with 12 districts,

Board of Governors

• Seven members serving staggered 14-year terms
  

Federal Reserve Banks

• 12 regional banks with 25 branches,
  
• Each independently incorporated with a nine member board of directors, with six of them elected by the member banks while the remaining three are designated by the Board of Governors.

The current members of the Board of Governors are as follows:

List of Federal Reserve Banks

source: wikipedia; federalreserve


regards,
oscarjp

Bullard and former Fed's Kohn about QE

James Bullard, in an interview with CNBC said today that there is no rush to cut QE3.

Fed should carefully consider the decision. Fed Head of St. Luis added that QE3 has improved conditions in global financial markets, but the impact on the real economy is not clear.

Fed's Bullard also urges no rate increase with inflation below 1.5%

Donald Kohn, former vice chairman of the Board of Governors of the Federal Reserve, said the Fed's exit from unconventional policies is "more difficult this time around" and stressed that communication is "critical" to obtaining the desired effects of unwinding the easy-money policy.

"The decision about when to exit will be more difficult this time around: it follows a long period of disappointing economic performance, making it hard to have confidence that adequate expansion can be sustained without unusual policies," Kohn wrote as part of the Brookings Institution publication, "Think Tank 20: The G-20 and Central Banks in the New World of Unconventional Monetary Policy."

regards,
oscarjp

Why the dollar is so weak?

hello traders,

A large number of members of the Committee spoke out recently and their views are well known. Prevailing view that if good data continue to the meeting, reducing QE should be. Minutes can possibly made more specific this view by answering the following questions:

       * whether they were members (except Esther George, who voted against the long loose policy), who in July would reduce?

       * or anyone else outside of Bullard fears a fall in inflation? (recall that it was at his request in July, the Committee added a sentence of low inflation)

       * whether there was a discussion about the program would be limited? (so far in this topic talked very little)

There is a risk that the minutes did not bring much new. This does not mean that the market is not going to happen. In recent times we observe a conflicting trends. On one hand, the equity markets are losing, and bond yields are rising - a signal that the market is expecting a reduction of QE. On the other hand, loses U.S. dollars, as if the Fed had simply more loosen policy.

comments are always welcome :)


trade save,
oscarjp

CNBC about the bloopers of Goldman Sachs

As reported in today on CNBC: Goldman trading glitch could cost more than $100 million

Goldman Sachs experienced a trading glitch Tuesday that resulted in a large number of erroneous single stock and ETF options trades. Many of the trades may wind up being erased but the error could still cost the firm upwards of $100 million, according to a person familiar with the situation.

"The exchanges are working to resolve the issue," a Goldman spokesman said in a statement. "Neither the risk nor the potential loss is material to the financial condition of the firm."

The trades involved NYSE Euronext, CBOE and Nasdaq OMX, according to reports.

A CBOE spokesperson said erroneous trades were being adjusted and busted up until 7pm CT Tuesday.

NYSE officials sent a notice to traders that they "anticipate that most of the impacted trades will be busted," the Wall Street Journal reported.

A person familiar with the situation said the losses for Goldman could be in the millions, or even upwards of $100 million, depending on how many trades were busted.

The botched trades occurred when Goldman's internal computer system that helps to determine where to price options mistakenly ended up sending orders at errant prices. Goldman is a market maker in the options market.

Earlier, the Financial Times reported that the NYSE was reviewing transactions in symbols beginning with "H" to "L" for the first 17 minutes of trading on NYSE's Amex platform, which includes options on equities such as JPMorgan and Kellogg. They also reported that other options exchanges, including CBOE and Nasdaq OMX, temporarily stopped accepting quotes from NYSE Amex in early morning trading and that the glitch could cost as much as $100 million.

Link

regards,

oscarjp

Institutional Strategies

Credit Agricole

The EUR has been well supported of late, mainly on the back of both rising growth expectations and well supported medium- and long term rates. In our view there is scope EUR/USD to trend back to 1.36 and above over the coming few weeks.

The ECB’s forward guidance is unlikely to cap medium- and long term rates should incoming growth data continue to improve. This is especially true as according to the German Bundesbank forward guidance does not mean a change to the central bank’s policy stance. It will neither prevent them from raising rates should inflation pressure increase.

Elsewhere, investors’ expectations for the Fed to taper QE as soon as in September have been rising considerably of late. In our view such a scenario is increasingly priced in. This in turn suggests that there is little scope for US yields to rise considerably further, at least in the short-term. In our view investors’ focus is more likely to shift to Fed rate expectations, which are unlikely to increase anytime soon.

In terms of data this week’s focus will be on German GDP and business activity data as well as the release of the FOMC minutes from the July meeting.

regards,

oscarjp


The information contained in this publication is not intended as an offer or solicitation for the purchase or sale of any financial instrument. Any opinion offered herein reflects oscarjp-chrimatistikos current judgment and may change without notice. Users acknowledge and agree to the fact that, by its very nature, any investment in shares, stock options and similar and assimilated products is characterised by a certain degree of uncertainty and that, consequently, any investment of this nature involves risks for which the user is solely responsible and liable.

signal of weakness, conclusion

hello,

In front of us a very interesting week. Minutes of the Federal Reserve and the annual meeting of central bankers in Jackson Hole. This time, however, they will be even more under the influence of the "scandal" voiced by Russia Today last week.

Russian TV news has issued on the German gold in the vaults of the Fed. Germany store there a half of its reserves and under the influence of the Bundesbank recommendation of the Supreme Court decided last year to move them to Frankfurt. And here began the problems. Fed said to Germany that such an operation would take for safety reasons almost a decade. In response, the Germans demanded an audit. Finally, the Fed sold the German delegation showing the unmarked gold.

The case is suspect for several reasons. Firstly, it gives a basis for speculation that the Fed does not have as much gold as he declares. If so, the consequences of the reliability of the most important markets of the institutions, which is based on the modern financial system, would be disastrous. Reference is made to the recent example of Goldman Sachs, who sold investors certificates on gold, which did not have. If they will do the Fed (conspiracy theory holds that the gold was sold or stolen long ago), the belief in the stability of the financial system could be eventually lost.

Surprising but also "timing" reminder of this problem. The case was already publicly publicized several times this year, but only Russian TV clip made ​​a sensation on the world. The same reaction: the weakening of the dollar, the decline of trading the S & P 500, rising gold prices - also raises many questions. If the market actually scared of this story, immediate reaction would be everywhere. Meanwhile, stock market on Thursday, losing by the day, gold rocketed up at 17.30 and EURUSD woke up only at 19.00 Warsaw time. The case has been going on for almost a year, but the Fed - after such a buzz - you will not be able to afford to continue ignorance. The pressure to explain the problem, and the meeting in Jackson Hole, where you will also be guests from Europe, only turns up the atmosphere.

When it comes to data undoubtedly play a key role preliminary PMI for the euro area and China. In the first case we have another two months for positive surprises. The third one month confirmed investors in anticipation of recovery in Europe. Data from China will be no less important to the slowdown that threatens the prosperity of the entire world economy. Details will be announced on Thursday. In the U.S., data on home sales (Wednesday and Friday), a preliminary PMI and weekly data from the labor market (Thursday). It's not much, but investors will still be focused on the Fed. Remind that last week publications from the labor market was very strong, further increasing the chances of reducing QE.

best regards,

oscarjp

signal of weakness, more info soon



chart, fWIG20 15th Aug 2013

Euro Short !!!

hello Traders,

On the scenarios presented on 23 July we reached an important resistance according the fourth scenario.

EUR/USD possible scenarios; 23rd July

EUR/USD Daily; 13rd Aug 2013

At the present time we got to the point "C" in the wave correction "X". The chart below you can see that the A-B-C correction is over and now we should see the strengthening of the dollar.

EUR/USD H4; 13rd Aug 2013

I expect that it is possible to test the levels of 1.33 - 1.3330 where I will surely buy dollars. Of course it is possible to re-attack to new heights therefore I set a stop loss at 1.3420.

The main factors that will support the dollar will reduce QE later this year. Although this is only a psychological reason. We also read a lot about a slowdown in China's economy which may also strengthen the dollar.

Number of applications for unemployment benefits in the U.S. last week rose by 5 thousand. to the level of 333 thousand. They are not weak data, on the contrary, are amazing. The weekly data we have a lot of variation and the very large decline in the previous week, the market expected a rebound to 336 thousand. (and often the adjustments are much higher return). Meanwhile, the average of four weeks, which eliminates noise amounted to 335.5 thousand. and this is the level of Unquoted from November 2007, when the labor market was just beginning to deteriorate. We are also getting closer to the levels of 300-320 thousand., Which are characterized by a strong labor market. Simultaneously with this level of scale employment applications should definitely exceeded 200 thousand. per month, which shows that the latter, weaker in this respect, the report does not indicate a slowdown in the labor market. We treat data as an additional argument for the restriction of QE in September. The market at the moment but it ignores the phenomenon - the dollar consistently losing to other currencies.

Your comments are very important for me and always welcome :)

best regards,

oscarjp

The information contained in this publication is not intended as an offer or solicitation for the purchase or sale of any financial instrument. Any opinion offered herein reflects oscarjp-chrimatistikos current judgment and may change without notice. Users acknowledge and agree to the fact that, by its very nature, any investment in shares, stock options and similar and assimilated products is characterised by a certain degree of uncertainty and that, consequently, any investment of this nature involves risks for which the user is solely responsible and liable.

manipulation under the magnifying glass

In recent weeks, the commodity markets attracted a lot of attention a matter of trading commodities in physical form by the major investment banks. The U.S. regulator alleged fact that the institutions can manipulate prices such as energy and precious metals. The market speculation that the Fed forbid investment banks have raw materials in physical form, thereby repealing their decision decades ago, which allowed for such practices.

This means that these institutions will be able to deal only in derivatives related to commodity prices, such as futures contracts and options.

As a result, banks such as JP Morgan and Goldman Sachs significantly reduced their operational activities associated with the storage and trading of natural resources. On Monday, there is information about the intention to withdraw from the market as Morgan Stanley.

This issue is not the only case of suspicion of manipulation of commodity prices. Earlier this week, the U.S. regulator FERC (Federal Energy Regulatory Commission) called company BP to respond to the accusations associated with the manipulation of natural gas prices in Texas.

regards,

oscarjp

welcome back after my short vacation

Inflows into equity funds around the world have been presented as the driver of the next leg higher in this 'secular' bull market. As liquidity slooshes around the world there is nothing but hot money chasing what 'worked' not what will work... or, as investors have now been conditioned to do, BTFD. US asset gatherers' dissonance is high as they know the pillars of their 'just keep buying' thesis remain wobbly at best (and broken in all honesty) but flows (aside from the fact that retail appears to have just folded) are holding hope ransom for now. So what nation saw the largest relative equity fund inflows in the world?

unexpectedly Poland :)

Foreign investors apparently believe that the positive conclusion of the dispute over the liquidation of the Open Pension Funds ?

Pic. 1. 3-Month Flows into Equity

best regards,

oscarjp

after central banks

FED - FOMC

At yesterday's meeting of the FOMC added to the message, the following sentence:

"The Committee recognizes that inflation persistently below its 2 percent objective could pose risks to economic performance, but it anticipates that inflation will move back toward its objective over the medium term."

It would seem that this is a significant change in policy direction, and perhaps even withdrawal announcement limit of QE. Given that Fed sees the negative impact of inflation is too low, maybe you will want her to do? 

However, one should know the origin of this phrase.

In June, against the Communication voted not only the hawk George, but also influential James Bullard. He argued that in view of low inflation, Bernanke should not limit of QE. In Fed is the rule of consensus. Although members are cut off from communication, but it is assumed that more than one dissenter this is a "hit" to Mr Chairman. Added sentence is therefore nothing more than the price for voice Bullard, especially since the second part shows clearly that the majority of the Committee does not share his concern.

For the Fed and the markets will be key figures, and these are good for now. Economic growth accelerated in the second quarter to 1.7%, and could be even higher if not for a large increase in imports, which in part is temporary. What is even more important, the labor market seems to be getting stronger. ADP report showed an increase in employment in the private sector by 200 thousand. - most of this year. If so, the chances of reducing QE in September will grow.

EBC

A month ago, the ECB introduced a formulation that the Bank for an extended period of time (the famous "extender period") will not raise interest rates. This formulation was designed to stop the growth yield on debt in euros, which followed in the wake of such a movement in the United States. ECB head Mario Draghi not surprised this time. Changes in monetary policy, of course, it was not, the ECB president, during his conference also has not changed the rhetoric of the last occurrence. Overall, the message of EBC was dovish. An interesting fact is that the ECB may already be in the fall will introduce a record of its meetings in order to become more transparent.

BOE

Another highlight today was the second meeting of the Bank of England under the leadership of Mark Carney. BoE did not issue the "forward guidance" document that is talking about the future of monetary policy in the UK. Will be announced next week.

best regards,

oscarjp