Ignoring fundamentals: paranoia or conspiracy?

[psytrader]

Originally Posted by phreak

Euro has been going North for quite a while completely disregarding positive dollar data for some mysterious reasons. Strangely, market still waits before buying Euro till strong US data is actually released just to completely ignore it and buy Euro one more time. Why wait? If fundamentals don't matter anymore, why care about news releases? It goes beyond any common sense and looks like mass mental disorder when traders simply buy Euro following some crazy idea rather than objective reality. What's going on? I personally don't remember cases when much higher than expected payrolls and interest rate increase caused dollar to lose value. Or we are dealing with some unprecedented conspiracy that is able to influence huge worldwide forex market? Any answers?

Actually,

fundamentals do matter. Perhaps you should coorelate the recent rise in oil prices above $60. This is a very key level and has been touted on bloomberg for some time.

Consequently, this weeks rise in the dollar highly coorelates to the slight fall in oil and inflation reports form both sides of the Atlantic ocean. Inclusively the US treasury demand has been higher as seen in the recent fall in Yield on a 30 year and 10 year daily chart.

If these fundamentals persist into next week we are looking at another test of 1.20 on eurodollar. If treasury demand lets up and we have a slight hick-up in oil or gold then we are probably looking at 1.23 for the short term.

Open your eyes,..open your ears,..and put your finger on the pulse of the market.
Watch the indices. (bonds,oil,gold)They tell the story before it unfolds.

Regards

PSY

[fat pirate]

hi guys,

Explaning the dollar long correlated with the oil price is just funny thing for me.The last run of the euro versus dollar 1.3600 was in the same time that the last run up of oil.
At that time analysts explaned it buy us defecit.
Today the us deficit is worsening and what about the dollar?
Hey guys stop to be credulous.
Big players just need you as contreparts.
And desinformation is their main tool.

Happy trading guys

[psytrader]

Originally Posted by fat pirate

hi guys,

Explaning the dollar long correlated with the oil price is just funny thing for me.The last run of the euro versus dollar 1.3600 was in the same time that the last run up of oil.
At that time analysts explaned it buy us defecit.
Today the us deficit is worsening and what about the dollar?
Hey guys stop to be credulous.
Big players just need you as contreparts.
And desinformation is their main tool.

Happy trading guys

First, if you are paranoid that "big players" are here to take your money,...then perhaps you should not trade forex and take a vacation instead. I find it hard to believe that anyone could be a winner with that attitude.

Second, the market keys on different information at different times based on what is MOST relevant. Oil at $40 is no big deal,...oil at $65 is a BIG deal because that is a level at which it starts to have an unballanced effect on inflation.

Third, the deficit is a bigger deal when the dollar is weaker because a $30 billion deficit causes more exposure to inflation at 1.36 than 1.23 eurodollars. Thirteen cents per $ more exposure to be exact.

US inflation numbers were, by all accounts ignored this week. Why? because the predominant reason for the poor inflation number was the price of oil and oil fell slightly after the release based on seasonal expectations for slowing demand. Thus, creating a sentiment of "the worst is over for now".

Is the worst over? Are we just in the eye of the storm? If I had those answers I would have already placed next months trades.

What I do know for next week is that cash flow will be mostly decided by the bond demand (still a little room to give) and oil price sensitivity.

(for all of the people who love to discredit analysis ipso post facto,..please be advised that I said "mostly decided by" not "completely",.."definately",..or "Bet the family farm on it".)

As of this hour, Oil is back at $65 and bond prices are down in the US ($negative),...but US bonds are not down as much as Germany and the UK today($positive cash flow). That is, the DAX and FTSE were up today so capital flows out of bonds and into equities to make this happen.

Forex is about the cash flow created by everything else.

50/50,...roll with the trend,...$ bull till 5pm.

Monday,....its a whole new week. Anything can happen.

Cheers

PSY

[fat pirate]

Originally Posted by psytrader

First, if you are paranoid that "big players" are here to take your money,...then perhaps you should not trade forex and take a vacation instead. I find it hard to believe that anyone could be a winner with that attitude.

Second, the market keys on different information at different times based on what is MOST relevant. Oil at $40 is no big deal,...oil at $65 is a BIG deal because that is a level at which it starts to have an unballanced effect on inflation.

Third, the deficit is a bigger deal when the dollar is weaker because a $30 billion deficit causes more exposure to inflation at 1.36 than 1.23 eurodollars. Thirteen cents per $ more exposure to be exact.

US inflation numbers were, by all accounts ignored this week. Why?
because the predominant reason for the poor inflation number was the price of oil and oil fell slightly after the release based on seasonal expectations for slowing demand. Thus, creating a sentiment of "the worst is over for now".

Is the worst over? Are we just in the eye of the storm? If I had those answers I would have already placed next months trades.

What I do know for next week is that cash flow will be mostly decided by the bond demand (still a little room to give) and oil price sensitivity.

(for all of the people who love to discredit analysis ipso post facto,..please be advised that I said "mostly decided by" not "completely",.."definately",..or "Bet the family farm on it".)

As of this hour, Oil is back at $65 and bond prices are down in the US ($negative),...but US bonds are not down as much as Germany and the UK today($positive cash flow). That is, the DAX and FTSE were up today so capital flows out of bonds and into equities to make this happen.

Forex is about the cash flow created by everything else.

50/50,...roll with the trend,...$ bull till 5pm.

Monday,....its a whole new week. Anything can happen.

Cheers

PSY

Hi psy

firtly: it is better to be paranoid than to think every thing is under control.
(just for your knowledge:big players are central banks, central banks are financed by private banks pool, private banks pool are managed by few familly from few generetions), analysts be paid by banks and all your information and datas as well .

secondly, Analysts today said 65$ for oil is a big deal for the sustainbility of economy but 1 year it was 40$ .Remember it was 20 $ in the 80's.

thirdly, trade balance deficit:the quote part from euro zone is small and getting smaller and smaller, even the part from yen zone is getting smaller and smaller. the increase of it is coming from yuan zone.hourra it's a peged zone.you see there is no random at this level.

Psy, sorry but there is no interest of what you say :
you just reapeted what you read in economic news papers.

[psytrader]

Originally Posted by fat pirate

Hi psy

firtly: it is better to be paranoid than to think every thing is under control.
(just for your knowledge:big players are central banks, central banks are financed by private banks pool, private banks pool are managed by few familly from few generetions), analysts be paid by banks and all your information and datas as well .

secondly, Analysts today said 65$ for oil is a big deal for the sustainbility of economy but 1 year it was 40$ .Remember it was 20 $ in the 80's.

thirdly, trade balance deficit:the quote part from euro zone is small and getting smaller and smaller, even the part from yen zone is getting smaller and smaller. the increase of it is coming from yuan zone.hourra it's a peged zone.you see there is no random at this level.

Psy, sorry but there is no interest of what you say :
you just reapeted what you read in economic news papers.

Great pirate,

First off, I appreciate your concern for my wellbeing,...but I am already aware of what a central bank is.

I would also appreciate some info on what economist is repeating my analysis word for word,....that would really save me a lot of time in the morning.

Im not asking you to find it pirate, as I am sure that you do not pay attention to their propoganda designed to steal your money.

Mabey, someone else can. I am always interested to hear another oppinion of the market.

I dont much care for oppinions of analysts. (those oppinions don't make me any money)

I wish you the very best of luck with the paranoia trading.

Regards

PSY

[TraderABC]

Originally Posted by phreak

Euro has been going North for quite a while completely disregarding positive dollar data for some mysterious reasons. Strangely, market still waits before buying Euro till strong US data is actually released just to completely ignore it and buy Euro one more time. Why wait? If fundamentals don't matter anymore, why care about news releases? It goes beyond any common sense and looks like mass mental disorder when traders simply buy Euro following some crazy idea rather than objective reality. What's going on? I personally don't remember cases when much higher than expected payrolls and interest rate increase caused dollar to lose value. Or we are dealing with some unprecedented conspiracy that is able to influence huge worldwide forex market? Any answers?

This is a problem with FunnyMentals. You have to be REALLY good and pay attention to every important single news in order to be able to make a right decision... Technicians say that the numbers reflect funnymentals so there is no point paying TOO much attention to funnymentals (hey you cant monitor everything). Plus if you believe that market is group psychology then you also need to know that groups are typically "dumb" and don't follow the smartest ways...


My 2 cents, Canadian.

[TraderABC]

Originally Posted by socrates

The escalating oil price is hurting the USD more than the positive data is helping it.

What about 1st April 2005 when Pound Positive News and Dollar negative came out? Pound just crashed!!!! I also remember someone who bought pound because its interest rates went up, and guess what, the guy barely made into pluses... What about all other situations when fundamental factors were disregarded???




(CIPS manufacturing index) In Great Britain for march was 52.0 (previous values were changed from 51.8 to 51.6). Oil price in NY rose by 2.40 dollars to 57.70 a barrel, a 21 year high. Non-farm payrolls in USA for was lower... Michigan sentiment index fell... US indexes have felt... But FTSE 100 (British stock exhchange index) has risen. What would you do??? Now see what market has done.

[Nonpiker]

I am not sure what Gilts were doing since I do not have that information readily available but take a look at the US 10 year around that time. Bond flows were clearly supporting the dollar. In addition, taking a look at headline numbers with out consideration for how the market is positioned is only looking at one aspect of the bigger picture.

I do not remember the day you are referencing in particular but if you look out how cable traded over the prior month you may get a better feel for why you may have not gotten the reaction you expected. The pair traded straight down from the highs of March which was nearly 7 big figures. That was really the first bounce off the lows. If you bottom scooped or where looking for bounce to lighten up your longs that was the first bit of strength you had to sell into. In addition, the same thing can be said for those looking to get short. I am sure the downward revision was of no help either.