Fundamentals Rule!

Nice site he has. Good read.

Back to business. EurUsd is just Booooooooring at the moment. With so little data for the USD and holidays taking their annual grasp of the market its drifting either way. I'm still expecting the a test of the 1.29 level soon, not sure if any of the technicals are pointing this way.

Oil...after all the drama last week is still holding around the 58-59$ level until we get some data or information to nudge it one way. I'm looking for it to drift higher today, firstly as traders position themselves for tomorrow (EIA crude oil inventories) and secondly I think more traders are coming on board that oil is cheap at these levels. Buy the further out contracts for some level of safety because...

...With the holidays, markets are liable to be pushed around a bit outside of main market hours. Who knows...stop hunting may just be fun.

I had a look.. great site..

right up there with moneytalk, abobtrader and pipcrawler

lol, you flatter me putting me on par with abobtrader and pipcrawler


The EurUSD continues its climb today. I'm just cautious at the moment, I'm not sure this move has any real legs on it or if a few banks are just pushing around in low volume trading as we roll up to the Thanksgiving.

FOr commoditiy traders remember the NYMEX is closed tom and fri so moves today may not be entirely rational as traders may close out positions. I'm expecting a rise to the 61$ level on two things;

1. EIA data
2. Shorts closing positions (I'm always more comfortable being long on commodities while markets closed rather than being short....for 'system shock' reasons.


Anyway just beware the low volatility...

Well the unemployment claims are rising...321,000 this week, a three week high as far as I can ascertain. Admittedly the claims are still within trend and even though the figure in the overall scale of the employment market and historical data is small I'm still focused on the labout market to point to the recession. Again I'll say it...WATCH the labour market!

The recent revision of GDP by USD only aided dollar weakness this week.If bernake et al have been trying to keep a relatively strong dollar the move to 1.295 + must be slightly embarrassing for them.

The good news is I'm nearly decided to close a portion of my longs if we hit the 1.3 mark (which I think we will. I'd be hoping this week but it may be longer).

Oil is throwing me around a bit lately. I'm close to giving up trying to forecast the EIA data. It's caught me a few times now so from now on I'll just sit and watch the data on wes and only enter when the market has decided what way to go. I'm still holding longs on 2009 contracts, its the immediate term (ie weekly price moves) that flummox me.

I'm in two minds whether to open longs on 2007 contracts. I fear I may be over exposing myself to one commodity if I do. I don't know if I'd be able to resist the trade if I could buy them at the low 65$ mark.....what is the saying?... Resistance is futile! Bah humbug.

Gold is in play again. When trading resumes I'm expecting a drop then it will rise again. I open a short yesterday at 630$ but I'll be watching it closing and only taking a modest profit. I'm targeting 625-620$ ish before it'll break decisively through the 635 mark.

Even thought we're all slogging hard over here I'd like to wish a Happy thanksgiving to all in the USA!

Well, I've closed out some of my longs to now give me a 'free trade'. So happy days.

Now i can get into another market. My guess is gold will be part of it, I'm looking at long term here definitaly over a year anyway. And dare I say it Oil.....


Corn looks good to short but I know nothing about this market....So no.


Might end up shorting the Euro/Yen. I still see weakness in the yen so I'll just bide my time for the moment and tape my fingers up...

Hmm I'm in two minds what to do. On the one hand I believe the EuroUsd has more to go in the longer term, but I think in the shorter term we'll see a correction. Do i close my positions and take profit or sit back until early next year? It seems we've finaly caught up and smacked the dollar strenght that was seen before the beginning of the month. No doubt Mr. Bernake felt compelled to come out yest and trot out the strong dollar line. the minnions just were'nt having the same effect. Oh well, it seems the market didn't believe him anyway.

A word of caution in any case. If the Fed, as they say, are so focused on inflation (Core inflation) that they are willing to sacrafice growth then we may see no cuts until mid/late next year. If this is the case then when they do come expect them fast and hard.


My 2009 oil longs doing very nicely indeed. Got off to a great start with them. Gold. Hmm. Dare I say it but 800$ next year. I'm now in for the dec 2007 contract. I picked dec as its normal for gold to recieve a mild boost from dealers before xmas so anything to aid my position.

In the meantime EIA inventories out today. *Shudders*

They've been causing me nothing but problems the last few weeks what with they're ''we're so full to capacity we're gonna burst!!'' reports. Cold weather on the way folks, if the inventories show a decline (analysts expecting a mild increase in levels) then could we see 62$-63$ oil????

*Sighs*

Where to from here?

Back to Euro/yen..I've begun opening small positions short on this trade. Immediate term I'm not expecting it to come down, in fact with the weight of carry trades its more likely to rise. If it goes above 155 I'll close these positions. Anything under that and with continued signs of recovery in Japan and I'll open more. I'm looking at over a year for this trade to pay off.

Eur/usd... Can't see it sustaining its pace for the near future. Longer term higher. For once I've taken my profit on my trades and I'll sit and wait for it to drop possibly to the 1.30 mark before entering long again.

Gold: The dollars drop is aiding in golds rise. Its taking aim at 650$ and next mark after that is 700$. We're seeing strong rises with only mild retraces. If you can stand a long term trade, this one is good to go.

Oil: Are we seeing a rally or set for another drop to the 59$ mark. Cold weather hitting the states will focus minds as will continued chatter on OPEC's Dec cut talk. If this market stabilises I expect to see more buying by speculators starting a rally. I'm trying to find a case before where OPEC cut production and price didn't increase (admittedly I'm looking over a 3 month timeframe). On the other hand a few OPEC members have hinted at a 60$ WTI floor level. Are we gonna see another retest in spite of EIA data yesterday? Even if it does start dropping, as I've said before, I'm still not comfortable shorting this commodidity.

Well dare I say it but the remainder of the day is all about technicals and positioning for the rest of the week

We've no data for dollar today so look to tomorrow for direction. Profit taking on the Eurusd rally today, I'l be looking to buy back in today/later in the week for longer term again. Oil shoved around a bit this morn. Expect a concerted effort to spark the by now traditional drop to the low 60's, given we're at the top of the 'range' of the last month. Concern over EIA inventory levels due on wes and the cold spell could put a stop to any bear market rather quickly.

Gold: It rose on the back of a weakening dollar among other things. Even if the dollar strenghtens I'm expecting gold to hold in or around this level before pushing higher so I'm gonna just keep my positions open on this one.

Being a FED member these days is akin to chewing your own foot off. Somewhat. And when you chew your own foot you end up looking even more ridiculous then the guys at the EIA, god bless their merry calculators. Allow me to explain.

We've had a series of FED speakers harping on about inflation, inflation, inflation. With all their rhetoric they managed to keep the dollar propped up for a while, pulled a mask over its illness. In the end when the mask slipped and the dollar went diving for cover to 1.31 Eur, Mr Big Man (Bernanke from here on in) strolled out and gave much the same speech he'd instructed his minnions to give. The dollar bombed it to 1.33 Eur. Has the market lost faith in the FED to control inflation and keep the economy on an even keel? Or is the market knee jerk reacting?

The problem now for the FEDo boys lies down the road. With all the emphasis on inflation and the economy slowing they've removed much of their leeway to adjust rates to give growth a boost. Unless we see inflation under their target I'm ruling out rate cuts. These things take time and in trading patience means money. Only on the drop of inflation will I price in a rate cut. Now with oil prices behaving badly for the FED this leads me nicely onto my next rant..

It seems we've the blind leading the blind. Those nice folk over at the EIA are pulling the same stoke, issuing statements and comments in an attempt to stop the inevitable. Their paymasters don't like high oil prices. (Thats us developed nations. you and me. and your friends.). Pressure is all over the EIA to crop up some new statement about 'not seeing oil past 70$ a barrell before year end' Whoever said anything about year end? Personally I was envisionaging selling all my lovely oil barrells some time in the spring. These attempts to panic the market may work in the short term, but just like the dollar mask, someone, somewhere (superman?) will spot the inevitable.

But the good news for both the FED and the EIA is that at least they get to turn to their paymasters and say 'look boss, we said this! we're trying our utmost to keep the dollar/oil/your socks up'

The bad news is by doing so they're literally chewing their own foot off. When the economy slows bernake et al will be blamed.Find another job boys. And if the market looses faith in FED statements, an examination of the numbers by the masses will lead to horrendus results when all those brilliant folks realise thier country is hopelessly in debt and will go deeper unless action is taken NOW.


Similarily with the EIA although at least these guys are faceless (can anyone picture an EIA face? Its like some computer churning out statements) and will likely retain their jobs.

Rant finished.

just a quick note on Trinchets press conference today. Dunno if any of you guys saw it but he mentioned oil so ofter I had to recheck my TV to make sure I was'nt watching an EIA press conference.

Basically he re-affirmed that monetary policy remains 'accomodative'....meaning more rises highly likely. BUT before we all go off and start screaming at our bank managers for higher saving rates he made it clear to my mind that oil remains of the primary risks to inflation. No wonder the EIA has been out and about town lately talking down the price of oil. If you see oil rising start long on the Eur. For now we're safe, maybe in 2/3 years we may see our housing prices start to soften up a bit (something he also alluded to).

Overall I got the impression that the next rate hike will be in the intermediate term rather than shorter term (so next spring??).