New Positions

Short eur/cad at 1.3697 stops at 1.3900
Short usd/chf at 1.1583 stops at 1.1685

Patience

Now I need patience to just wait for my set ups.

No new positions

The usd/cad got stopped out...I really dont like intraday trading too much...I need to stick to primary strategy.

Trade update usdcad

USD/CAD looks great for a short intraday here. Not really my thing to trade intraday. There isn't much going on now....

I'm taking a small position usd/cad at 0 .9544 stop loss at 0.9566 take profit at 0.9492

Mexican Peso

Its funny....I picked up my brother from the airport today At dinner he told me something very interesting. On his trip back from Mexico when he as at the Mexican airport he bought a bottle of water with USD. Well, instead of giving him change in pesos like every other place and time I have been in mexico, the shop gave him change in USD. What does that tell you about the dollar?

Where is our currency heading? Where are the policies to improve the dollar value globally? Can anyone foresee the problems we are setting ourselves up for? I have some of my own thoughts but I'll save them for later on as you get to know me better.

gbp/cad my feelings

Follow the rules!!!!!!!!!!!!!!!!

Should I have kept my discipline I would have another 100 pips in the bag...Currently gbp/cad is trading at 1.9658 bid. OI....

Closed gbp/cad

closed gbp/cad at 1.9741 for +71 pips....

My thoughts on the current forex market direction

The Aud/usd is the strongest pair on the board. My feeling is to buy, buy, buy...I am waiting for my proper set up to place a swing trade....I did make a entry earlier today which I scalped out of. I am not much of a scalper these days but when I see a great opp I take it.

Eur/usd is strong like bull, as always I am waiting for MY set up to trade this.

My feelings are a bit mixed on USD now...My gut is telling me that we are still approaching a market bottom in USD. The market is showing that it has not. I could not see our FED letting things get this bad with the USD but then again who knows. I try to trade what I see and not what I know.

Once again today I sit hear watching some positions I have on for a client account. They are all in the green. One part of me says TAKE PROFIT but my rules keep me straight and I will let them run.

Again and Again I find it so weird that people like to take profits so quickly when trading. If it weren't for discipline and self control I would still be having this problem too...At times it does come up and bite me in the ass like a dog with a mailman.

I recall traders who project negative energy often say "when I dont take the profits it stops me out and when I do it runs, I just can't win." At that point I try to hang up the phone or end the conversation as I dont need that negative energy in my life.

Losing thoughts bring on losing actions. What you wish for you often get. Every trade I make I beleive is a winner. If I lose money on a trade I still win by sticking to my plan. I know you heard this rhetoric many times but it is the truth and to end this as corny as possible.

THE TRUTH and YOUR RULES will set you FREE.

No no positions

Closed gbp/chf

Closed Short gbp/chf 2.3941 stops 2.3936 for +5

I wasn't enjoying this trade and didn't feel it.

Not much to say today

I need some time to read over recent comments from the US fed governors. I'm not hearing anything too interesting so far. I still hold my current positions and initiate no new ones at this time. I beleive the USD could be finding some support at the current levels against most of the majors with the exception of USD CAD.

Upcoming Trade Opportunities

Waiting for daily chart close in:

NZD/USD Short 0.7483

AUD/USD SHORT 0.8810


USD/CAD WAITING FOR CONFIRMATION OF REVERSAL TO UPSIDE....NEED TO SEE CLOSE ABOVE 0.9840 OR A CLOSE BENEATH LOWS AT 0.9620


CONSIDERING SHORT IN AUD/JPY MOMENTUM PLAY....HMMMM...CONFIDENCE OF THIS TRADE IS LOW AND I'LL SKIP THE ENTRY AT 101.40

NZD/JPY LOOKS GREAT SHORT HERE BUT NOT GOING TO TAKE THIS ONE EITHER 85.51

New positions

Short gbp/cad 1.9810 stops 2.0120

Short gbp/chf 2.3941 stops 2.4130

eur/cad

eur/cad has a set up short now....I will wait for a retrace to sell this one short.

Market Update Aud/usd nzd/usd

It looks like the aud/usd may be setting up for a entry of the next 4 -6 days...Time will tell.
Nzd/usd has the same set up.

Bush warns of WWIII over Iran

Message comes as Russia expresses skepticism over Tehran's ambitions

Reuters

Updated: 5:34 a.m. ET Oct 18, 2007

WASHINGTON - President Bush warned on Wednesday a nuclear-armed Iran could lead to World War III as he tried to shore up international opposition to Tehran amid Russian skepticism over its nuclear ambitions.

Bush was speaking a day after Russian President Vladimir Putin, who has resisted Western pressure to toughen his stance over Iran’s nuclear program, made clear on a visit to Tehran that Russia would not accept any military action against Iran.

At a White House news conference, Bush expressed hope Putin would brief him on his talks in Tehran and said he would ask him to clarify recent remarks on Iran’s nuclear activities.

Putin said last week that Russia, which is building Iran’s first atomic power plant, would “proceed from the position” that Tehran had no plans to develop nuclear weapons but he shared international concerns that its nuclear programs “should be as transparent as possible.”

“The thing I’m interested in is whether or not he continues to harbor the same concerns that I do,” Bush said. “When we were in Australia (in September), he reconfirmed to me that he recognizes it’s not in the world’s interest for Iran to have the capacity to make a nuclear weapon.”

Bush, who has insisted he wants a diplomatic solution to the Iranian issue, is pushing for a third round of U.N. sanctions against Iran.

Russia, a veto-holding member of the Security Council, backed two sets of limited U.N. sanctions against Iran but has resisted any tough new measures.

Stepping up his rhetoric, Bush said a nuclear-armed Iran would pose a “dangerous threat to world peace.”

“We’ve got a leader in Iran who has announced that he wants to destroy Israel,” he said. “So I’ve told people that, if you’re interested in avoiding World War III, it seems like you ought to be interested in preventing them from having the knowledge necessary to make a nuclear weapon.”

Putin's 'special message'
Iran rejects accusations it is seeking to develop a nuclear bomb, saying it wants nuclear technology for peaceful civilian purposes such as power generation, and has refused to heed U.N. Security Council demands to halt sensitive uranium enrichment.

Chief Iranian nuclear negotiator Ali Larijani was quoted by Iran’s official IRNA news agency on Wednesday as saying that Putin had delivered a “special message” on its atomic program and other issues. No other details were given.

Putin’s visit on Tuesday was watched closely because of Moscow’s possible leverage in the Islamic Republic’s nuclear standoff with the West. It was the first time a Kremlin chief went to Iran since Josef Stalin in 1943.

Asked about Putin’s “special message,” U.S. State Department spokesman Tom Casey said he was not aware of any deal or offer put forward by Moscow to Tehran over the nuclear program.

On Russian opposition to Caspian Sea states being used to launch attacks against Iran, Casey reiterated that Bush kept all his options on the table but that the United States was committed to the diplomatic path with Tehran.

Copyright 2007 Reuters. Click for restrictions.

Market News update not by me but I like it

How linked are the markets? US equity markets declined yesterday after the Citigroup earnings announcement heightened concerns that the subprime mess is not gone yet and oil over $86. Immediately, bonds rally and the currency markets avert from risk by selling yen carry. Today, more of the same after Nomura announced it took a hit (Y145.6 bn loss ($1.24 bn) because of subprime and is exiting the US RMBS market. Here’s my point: the Nikkei drops, but the yen rallies? To show how disjointed this logic is, since when does oil at $87 help a nation that imports 98% of the black stuff? The US dollar index is up .18 at 78.27. Lot’s o’ chatter from the Japanese and Europeans over the weak US dollar, Japanese yen, and Chinese yuan as we lead up to Friday’s G8 meeting. GBP, Euro, and US overnight and 3mth Libor fixings showed little change.

If you are trading volatility in the Hang Seng, you are livin’ large as that index continues to be the Molotov cocktail of equity indices. It dropped almost 2% today and risking 2.44% yesterday. S&P 500 is down 7.4 pts in pre-opening trading. The generic Itraxx crossover index on Bloomberg (ITRXEX57) is up 8 at 285. The CRB index is at 338.29, corn is at 360.50, and wheat is at 819.20. Oil a big mover as it’s up $1.35 to $87.50 as some are predicting $90 by the end of the week. Nat. gas is at $7.52 and home heating oil is at $2.3284. Metals are mixed with gold down $3 at $756.15, silver is at $13.645, and copper is at $8,150.

Bank O’ Canada Overshadowed by TIC: Left interest rates on hold at 4.5% as expected as they did the two handed economist routine with expressing concerns over a slowing US economy while stating that the Canadian economy is operating above its production potential. Again, they mention that the Canadian dollar is trading above where the Bank of Canada’s models projected it. The shocker is the massive drop in the US net long term capital flows. They were expected to be up $60 billion and came in at a negative $69.3 billion. This is the clearest example of money running home from the US during the credit crisis in August. What may be more shocking is the lack of market reaction to the news. Bonds are about unchanged, the US dollar is not much lower, and equities are about unchanged as well. IP and CU came out as expected.

Bernanke, “I’m Not Indifferent!: Overnight, we had the chairman of the Federal Reserve give a speech entitled, “The Recent Financial Turmoil and its Economic and Policy Consequences.” After providing a history lesson on panics, he did get to some interesting tidbits during the Q&A. He said that he cannot deny that there is some inflationary impact from a weaker dollar and that no central banker can be indifferent to the home country’s currency. What a relief! I didn’t think anything got past that sweater vest.

Another Angle to the Iraq Mess: Turkey moved closer to opening a new front in the Iraq war Monday, with the government asking parliament to approve a cross-border offensive against Kurdish rebels AP reports. Turkish PM Erdogan said that he expects it to pass and that the vote would happen today. Iraq announced that it plans to sell 6 million barrels of Kirkuk crude that is sent through its northern province. The possible disruption of that flow due to an invasion has sent crude oil surging this week. Iraqi PM Nouri al-Maliki is attempting to hold emergency talks with Turkish leaders today to avoid the crisis.

This comes as the US House of Representatives decides to hold a vote on designating the killing of Armenians during the last years of the Ottoman Empire as a genocide. Tony Fratto, a White House spokesman, said President Bush would not intervene in any vote on the genocide resolution in Congress, although the administration has tried to persuade lawmakers to reject it. (AP) “There should be no question of the president’s views on this issue and the damage that this resolution could do to U.S. foreign policy interests,” Fratto said Monday aboard Air Force One. Fascinating how a complex situation can increase its complexity parabolically once it begins to go the dark side.

Andrew Busch

Stocks Dip on Bernanke's Sobering Words

Stocks Dip on Bernanke's Sobering Words

y Madlen Read, AP Business Writer

Wall Street Retreat After Bernanke Comments Revive Worries About Economy, Earnings NEW YORK (AP) -- Wall Street extended its retreat Tuesday after Federal Reserve Chairman Ben Bernanke said the night before that the slumping housing market remains a "significant drag" on the economy.Bernanke's comments during a speech at the New York Economic Club revived concerns that a recovery from the summer's credit crisis might take longer than expected -- a sobering thought for investors, who are sifting through mixed third-quarter earnings and watching energy costs rise.

The stock market had its biggest drop in more than five weeks Monday after a consortium of banks led by Citigroup Inc., which reported a steep profit decline that day, announced plans to set up a fund to help bail out the credit markets.

On Tuesday, Wells Fargo & Co. shares fell more than 3 percent after the bank said its third-quarter earnings increased by a bit less than analysts anticipated, and that it boosted loan loss reserves in anticipation of further problems in consumer credit. KeyCorp shares also fell more than 3 percent after the Midwest regional bank posted a 33 percent drop in third-quarter profit.

In early trading, the Dow Jones industrial average fell 47.15, or 0.34 percent, to 13,937.65.

Broader indicators also fell. The Standard & Poor's 500 index slipped 6.96, or 0.45 percent, to 1,541.75, and the Nasdaq composite index dipped 14.29, or 0.51 percent, to 2,765.76.

Treasury bond prices rose, pushing down the yield on the 10-year Treasury note to 4.67 percent from 4.68 percent at Monday's close. Prices and yields move in opposite directions.

Bernanke said in his speech that the deepening housing slump probably will be a drag on economic growth. Still, he again pledged to "act as needed" to help financial markets that were sent reeling this summer.

He did say that inflation remains in check. That could be a key factor for policymakers when deciding whether to cut interest rates at their Oct. 30-31 meeting.

But while core inflation -- which excludes volatile food and energy prices -- is mild, oil prices are pushing further into record territory.

Despite expectations of higher inventories in the weekly U.S. supply report released on Wednesday, a barrel of light, sweet crude rose 51 cents to $86.64 on the New York Mercantile Exchange, on fears Turkey will pursue Kurdish rebels into Iraq and disrupt oil supplies in the region.

Investors will get some more economic data on Tuesday with the National Association of Home Builders/Wells Fargo housing market index for October scheduled to be released at 1 p.m. EDT. The report is expected to show a decline from September.

Overseas, Japan's Nikkei stock average closed down 1.27 percent. Britain's FTSE 100 fell 0.42 percent, Germany's DAX index fell 0.36 percent, and France's CAC-40 fell 0.87 percent.

Am I right about the market turning point?

Many of the usd pairs reversed today....We will see over the next week if this is truly a new trend...Major trend lines have broken down. We wait to see how the new trend evolves. I'll announce key levels later today or tomorrow.

End of Week profits for last week

Last I closed out with +41 pips....

My current feeling is that the market is looking like it is ready for a major reversal in the usd pairs and some of the minors. I am going to sit out of new entries until the market shows me a proper entry during a market condition I am comfortable in.

Position Update

Sorry for the lack of posts recently...I have been under the weather and not trading much. I was stopped out of the eur/gbp position. I have not initiated any new positions.

Lots of should have, could have, would have the past 3 days. usd/cad short...oh yeah.... eur/jpy long oh yeah....

The great thing is there is always another day, another week another month....

Watching for entry on 4hr chart

Watching for HD entry short eur/usd It wont show up for at least 4 hours (midnight EST)...


Just put on short eur/gbp 0.6919 stop 0.6950

Position Update

I closed all my positions today. Not the smartest move. I am suffering from a bad head cold and I may regret my decisions to exit today.

Closed chf/jpy at 98.68 for -72 pips
Closed usd/jpy at 117.20 for +53
Closed usd/cad at0.9887 for +27

Net of +8 pips....

usd/cad trade pissed me off. I was up around +120 on this one and....USD/JPYwas up over 100 also.

I think both of these continue back and that I need to re-enter.

Market Update

Maintaining positions in short usd/cad (having a pullback now, not so happy but is normal)

long usd/jpy finally moving in my favor. Moving stops to 116.00.

still long eur/chf no new actions.

European Updates and Position updates

Rumors that ECB wants to lower eur to increase exports.

My usd/cad trade is moving very nicely in my favor. It was up over 100 pips earlier.

eur/chf finally went positvie and so did usd/jpy

I don't like the pace t he usd/jpy is trading at. l believe should be moving much higher. I want to exit but I will stick to my current plan and stay long.

NFP Update

Wow...NFP came in way above my thoughts. Anyone want to bet that next month it gets revised? Its also "interesting" how last months got revised....I dont beleive any of the numbers but I love the volatility.

eur/usd My thoughts

WE are at a break or bounce point in the euro....WE are at the top of the 4 hr channel....If I were to gamble I would go short here. This isn't my set up so I wont trade it. Currently eur/usd trades at 1.4137

Maintaining Open Positions and NFP update

No new open swing trades...

I think NFP expectations are way out of line. What research shows me this? None, just my guy again. If the numbers are increased to more than 40K then I will surprised.

North Korea

North Korea pledged to detail its nuclear programs and disable all activities at its main reactor complex by year’s end, then signed a wide-ranging reconciliation pact with South Korea Thursday promising to finally seek a peace treaty to replace the 1953 cease-fire that ended the Korean War.

EUR/USD Gut Feeling

My gut is telling me that we will see big follow thru with eur/usd shorts during the Asian session tonight. I am not taking any positions on my gut but it will be interesting to see.

Other than that my head is all messed up today and I can't put a finger on why. I had a huge day in terms of business and trading. The business news was great and made me feel emotional almost like I did on my first series of winning trades as a beginner. The trading gains just don't get me gonig anymore. The only time I get excited trading is when I get lucky. I am only in times of getting lucky when I break my rules so its not a good thing.

Time to listen to some aerosmith and wait for my call later with Dubai. I need a break tonight.

New Positions

Long usd/jpy at 116.74 stops at 114.20

Forex Majors are moving

Currently I am maintaining my two open positions. Seems that the majors gbp/usd, usd/chf, eur/usd, aud/usd are selling off indicating usd strength. We will find out over the next couple of days if we break key support levels.

I believe usd/cad is still in a down trend and continue with my short position and outlook. The gbp/jpy trade I researched is up around 250 pips now. I have no regrets about not entering that trade because the entry parameters did not meet my criteria, but researching a new trade is a exciting.

Forex Update in usd/jpy

USD/JPY approaching momentum buy levels discussed earlier this week. 116.60-75 level.

Forex Position Update

Exit aud/ust at .8912 for +48

Exit eur/usd at 1.4175 for +16 ( think there may be more room on this move up)

New positions

Long aud/usd at .88645 stop .8770

Long Eur/usd 1.4153 stop at 1.4111 (hidden divergence 4hr)

Forex Trade Set Up USD/JPY

I have been researching a old set up I used to use. Basically it is a triangle pattern. If you have been watching gbp/jpy you would have seen that the entry level which I researched but didn't take was very successful. That set up is NOT in my arsenal at this time but I am considering adding it after I research the trade more.

Currently I am seeing the same set up in usd/jpy. I am waiting to see a daily bar close in the 117.75-90 area.

China unleashes cautious giant onto world's financial markets (Forex Reserves)

China unleashes cautious giant onto world's financial markets

3 days ago

BEIJING (AFP) — There was no champagne, no music, and just a few young women in traditional dresses.

The low-key ceremony that marked the launch of China Investment Corp. this weekend could reflect the cautious manner in which Beijing intends to unleash the largest fund in history onto the world's financial markets.

The much-anticipated corporation will be in charge of 200 billion dollars -- nearly one-sixth the nation's enormous forex reserves -- but it will not flaunt its wealth, observers said.

"They're going to be passive investors. They're going to take minority shares. And the most important thing is going to be safety," said Chen Xingdong, Beijing-based chief economist at BNP Paribas.

China Investment Corp. is tasked with diversifying and maximising returns on part of the country's huge forex reserves, topping 1.3 trillion dollars and growing by the second.

It is estimated that about 70 percent of this enormous amount is placed in US dollar assets, including Treasury bonds that are as low-yield as they are safe.

To do better than this, the company, headed by respected former vice finance minister Lou Jiwei, will not have to invest in a flamboyant manner.

Even so, the modesty that attended the inauguration of the company on Saturday could suggest a deliberate strategy to soothe concerns abroad.

The emergence of a 200-billion-dollar juggernaut has already set alarm bells ringing over the potential impact on world financial markets.

But exactly how the company is eventually perceived by the outside world will largely depend on the attitude management adopts, economists argue.

The worst thing China could do would be to sweep into, say, the world energy markets and make a series of high-profile acquisitions of oil companies or gas fields.

"If they do not end up controlling foreign companies, there wouldn't be many political issues," said Sun Mingchun, a Hong Kong-based economist with Lehman Brothers.

"It's a good idea to be low-profile and stress the business side of investment rather than the political side and let the outside world feel it is a business decision, not a political one."

If the company has indeed decided against the bull-in-a-china-shop approach, it may have got off to an uncharacteristic start.

In May, long before it had even been officially established, it invested three billion dollars in US private equity group Blackstone, triggering questions about just how aggressive this newcomer was going to be.

Analyst now said the Blackstone deal is not likely to be typical of the kind of investments the company will make.

The 10 percent exposure in the Blackstone deal is fairly risky, and analysts expect the company to prefer smaller-risk, one- or two-percent ownership in listed companies.

Even so, behind the intentionally cautious attitude, there is little doubt among observers that this is a creature with the power to rock world markets.

"The company will be a formidable force on the global financial market. The fund will be the largest of its kind in the world," said He Fan, an economist with the Chinese Academy of Social Sciences, a Beijing-based think tank.

The emergence of China Investment Corp., he said, was part of a tectonic inter-continental, inter-generational shift in the world economy.

The nations of the west are now becoming ageing societies, and have to sell out of some of the assets they have accumulated in the past.

This is where China is taking over, buying up assets for when it itself becomes an greying society, which, based on current demographic trends, will be in the not too distant future.

"It's a win-win situation. If the issues is politicised, China may run into some troubles over this type of transactions, but economically it benefits both sides of the deal," said He.

Algorithmic Trading in Forex

Electronic trading is growing in the FX market, and algorithmic trading is becoming much more common. There is much confusion about the technique. According to financial consultancy Celent estimates, by 2008 up to 25% of all trades by volume will be executed using algorithm, up from about 18% in 2005.

gbp/jpy recommendation

Well my critical area to go long gbp/jpy was a success. It was not my trade set up, so I did not take the trade. I am thinking a lot lately about creating a strategy to trade pairs like the gbp/jpy. It just doesn't fit well in my primary model or my secondary model. The monster of a pair moves wild beat yet every beast can domesticated.

New Positions

chf/jpy long 99.030 stop at 97.750

usd/cad Short 0.9914 stop at 1.0026

Crap

One of my sub-advisor's is in a bad open draw down. It has been bothering me for weeks. Unfortunately one of the clients whom I have a personal relationships with liquidated his positions today. Part of me is relieved because the client is no longer sitting in pain but the other part is upset b/c of the upside opportunity I lose out on.

Fundamental market update by FX Consultant

After last month Fed's .5% surprising cut. The interest rate outlook uncertainty has caused volatility in the treasury market and currency market as well. This week awaited ISM and PMI figures are important to realize how far the impact of the crises in EU and UK can be. We wait also for the US labor report which is expected to negatively further for the second month after the recent weak consuming and business which have followed the sub-prime problem.

Last week US housing sales data have continued the decline in a faster pace than expected especially the new housing sales effecting negatively in the current market confidence which has started to be built after the Fed's cut to show that the risk still exists and the worse of the housing data is still ahead