The Week That Was: Nov 3 - 7 

Last Tuesday’s Historic US election of Barack Obama was followed by disappointing reaction from the markets, with ADP employment numbers confirming contraction on Wednesday. Thursday  got started with a monster 1.5% surprise interest rate cut by the Bank of England, and Friday closed the week with Non Farm Payrolls painting a bleak picture, and then to close out the week we had Consumer Credit jumping 6.9 Billion in September.

The Week Ahead Nov 10-14

This week gives us a breather in scheduled news until Thursday when International Trade numbers coe out with the Weekly Jobless Claims. Friday has import - Export prices, with Retail Sales at 8:30, followed by Consumer Sentiment and Business Inventories at 10:00pm. The equity markets may be tested as AIG and GM will be trying the patience of the media.

Currencies Look Paused For a Break Out

A look at the majors on a Daily or 4 Hour chart shows some triangle and consolidation patterns. Submitted for your approval Note the charts below.  

The Aussie - US Dollar looks Like Consolidation

The Euro Testing Support

US Dollar Approaching Resistance versus Swiiss Franc

Pound Sterling Approaches Support of Descending Triangle and has a Trend Channel to follow.

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Pre Non Farm Payroll Numbers Disapointed early Wednesday as

Interest rate Cuts of 50bps are expected from the BOE and ECB Thursday. No shock to the  charts are expected - but expect the unexpected.

November 5th, 2008 - Nothing but Down

Above - The Major Indexes and the VIX-Volatility Index 5 Minute Charts

Above - USD-JPY 4 Hour Chart breaking Support (click to enlarge)

Finally - the Election of 2008 is Over! - Now What?

Thankfully John McCain allowed Americans to get an early nights sleep Tuesday by conceding defeat - before California and the West coast was even finished voting.

 For me, John McCain and Barack Obama both never resonated beyond mediocre sound bites. IMO – Despite McCain’s pleas for others to help him fight, It looked as if the maverick was relieved to give up. Only in the last few days was Sarah Palin allowed to regain her dignity and throw a few punches for him.  

 The Big Picture - Click to Enlarge

US President Elect Obama makes his acceptance speech Tuesday night

Calls for the lowering of expectations are coming from the four corners of the left.

Now that the media has put the public in a state of mass psychosis, the public will be in need of a “rattle ya jewelry”, John Lennon type statement from the President elect. Reality sank in fast Wednesday as the financial markets gave BO the cold shoulder as the weight of the world began it’s descent.  

Leadership Needed Now for US All – Starting with You!

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The Dollar - Gives and Takes

Jumbo Jets and Jobs Anyone?

Costa Rican Telemarketing @ the Beach?

Joke of the Day: What do you get when you put some laid off Airline workers, cellphone makers, and wall street types together at the unemployment line talking about pensions and vacations? Send me your punch line. (I’m thinking Quentin Tarantino for some reason)

Technically Speaking - More Patterns I See

The Canadian Dollar Setting Up Again?

(Click to Enlarge Chart)

USD-CAD Symmetrical Triangle

appears to be setting up on the 60 minute chart as of 1:30am October 31. Fibonacci levels coincide with the potential price pattern targets at 1.2540 for the upside and 1.700 for the downside support level.

Look back at my previous posts from October 21 - 26 for a text book example of a triangle pattern completing quite nicely.

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Jerry Furst  is an active trader, educator, and Founder of Investors Education Network (IEN), He is a Mentor and Trading Coach to Select Clients  Click Here for a Free Self Evaluation Survey.  

If You Can’t Say Anything Good - Keep Your Mouth Shut!

Last week I was invited to the Federal Reserve in Miami for Dinner and a Seminar, The Filet was excellent! The subject matter made me uneasy as I came to realize that there is a bit of a disconnect between the realities on the ground and the knee jerk reactions taking place in Washington. 

I would like to report that the end is near for our economic troubles - however I think I will just let the Fed and the Treasury do what it does - they have some good ideas and they do seem to be taking action - although it all seems to be symptom based and observational in nature -  versus leadership based, and proactive. I was vocal about the need to address the root of the problems - Like getting people into real mfg jobs creating and installing solar panels and hydrogen-electric-propane vehicles… getting us off the oil and utility companies nipple, etc….

Retroacttive Tax Deductions - Stimulus Plan II

One suggestion I made at the Fed meeting was an idea to return the tax deduction for using credit - retroactively - for all those people teased into spending to keep the worlds economy humming? I heard Ben Bernanke today mention that he was in favor  of a second stimulus package.

Another Idea: Recall All Dollars - Before They Start The Printing!

Another Idea I blurted out (befoe they took the microphone away from me) was to recall all US paper currency and replace them with new certificates - this would have an immediate effect of temporarily flushing/wiping out the underground - unreported economy. Might as well create some new certificates as long as they are going to have to start printing a whole lot of them soon!

Technical Analysis - Dollar - Canadian Poised for a Triangle Break?

The US Dollar - Canadian - 4 Hour Chart shows a nice example of a Triangle pattern with a very strong supportive trend line and a well defined resistance line on top. The Fibonacci Retracements and Extensions are lining up with the Triangle Pattern’s potential projected price targets. 

Jerry Furst  is an active trader, educator, and Founder of Investors Education Network (IEN), He is a Mentor and Trading Coach to Select Clients  Click Here for a Free Self Evaluation Survey.

Search for a Bottom Continues

Back on September 28 I stated that,  “Chicken little was “buying Puts on SKY”" - I believe that the trade is probably profitable - As the search for a bottom continues…

With an unscheduled interest rate cut by the US - coordinated with the other Central Banks not helping calm or give confidence to the markets - Could ths be the capitulation - or just a stop along the way?

Tipping Point and the Chinese

Rick Santelli on CNBC is saying that we are at the “tipping point” and he was seen waving the white flag for the credit markets.  As Rick was speaking -  I was just reminded of the old “Tip Jar” joke sign that says “Tipping is Not a City in China”, and wonder what the Chinese are thinking - and doing…  Let alone the free worlds other friends that are flush with Dollars …

Earlier This Morning Developments from the UK

UK Bank Bailouts and Mergers are continuing and the UK Prime Minister Brown is calling on G7 and G20 nations to come together to strategize. I think they passed a $500 Billion Pound Sterling  bailout plan. 

Personal Note and No Webinar This Monday

The “1st on Forex” blog and weekly webinar will be on hold this coming Monday and I will return Due to my focus on trading, personal, and family issues I have not been able to keep this blog updated as often as I wish lately. But Stay Tuned… and Subscribe with the subscription box on the left panel here. 

I am travelling now to Orlando for a conference and will return next Tuesday - So in the mean time - trade safe.  I’m going to Disney World…!

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Jerry Furst  is an active trader, educator, and Founder of Investors Education Network (IEN), He is a Mentor and Trading Coach to Select Clients  Click Here for a Free Self Evaluation Survey.

Oil and the Dollar

12:30am (eastern US time) - consolidation seen on almost all majors since the NY close. Extremely tight range.  Dollar is ”assumed” to be under pressure, and I suspect that to be the primary cause of the historic spike in Oil yesterday.

Assumptions with the market can often be wrong - especially in the short term. What you expect to happen may be right - but the market may take the long road getting there.

Hedge Funds may be next major issue as redemption’s are reported to be increasing.

Do you think Paulson and Bernanke have addressed the Hedge Fund Issue within their $700 Billion request?  Bernanke and Paulson are scheduled to be addressing the Senate Banking Commitee Tuesday and Wednesday. Get your popcorn out, this should be good as Barney Frank gets ready to grill. It’s hard to feel sorry for them - they should have seen this coming - alot of people should have seen this mess coming…

All the Central Bankers and the IMF know full well the implications of the hedge funds, and the G-X meetings communiques would almost always have a standard mention addressing hedge funds as a potential “issue”. I sure hope they have a handle on it.

Safe Trading - or standing on the sidelines

This Did Not Have To Happen - Questions that Need Answers

• All the Kings Horses…. 
• Nobody Trusts the Numbers 
• Creative Destruction  
• Margin Calls In Front of Redemptions 
• Gold’s Biggest One Day Percentage Gain Ever!  
• Is There a Leader in the House? Senate? Corner Office?  
• “They’ve lost faith in the Financials” – Art Cashin 
• Senator Shelby: We are going to have to have some hearings early next year 
• One Solution: “World Wide Interest Rate Cut” - - James Cramer  
• Resolution Trust - All Over Again  
• Fear in Solid Control  
• China Daily – World Needs New Currency  
• Lack of Regulation in Credit Default Market  
• Fiduciary Duty – Lack of Oversight  
• Too Big To Fail?  What About Bank of America  - Using Depositors Money !!
• Who’s Next?  

Headlines and Events - Getting Out Of Hand

The Market Carnage Continues…

It amazes me that even last week I heard some market analysts and pundits say that we were not in a recession! Long time readers of my blog know  that I called the portential for the worst time since the “Great Depression”  My Headline for Jan 22 was “Recession in Play - Depression on the Way?”

http://blogs.fxstreet.com/1stonforex/2008/01/22/recession-in-play-depression-on-the-way/

on January 24th I refrenced the Great Depression again

http://blogs.fxstreet.com/1stonforex/2008/01/24/bernanke-watches-futures-trader-watches-past-and-reminisces-of-the-shoe-shine-boy-cnbc-girls/

Gold was basically flat on Monday and I was pondering why - I called it Sunday Night - I hope some of you had come to the same conclusions.  I really find no joy in being right about things being so wrong - but the Rose Colored Windows are being shattered.

The Blame Game

Boiled Down It IS This: Regulatory oversight was and is missing. It looks like Political Cronies and underskilled Government Workers in the trenches over their head allowed the train to run off the tracks - this is beyond criminal as people are losing their jobs and life savings - around the globe!

Possible Turning Point Getting More Confirmation

The consensus in the Live FOMC Webinar was that Ben Bernanke would keep rates steady. This was in line with the pundits consensus. The Fed Funds Futures Rates Shot up indicating that there are expectations that rates will be on hold for the time being. I posted on the blog a while back that there is the possibility that the FED may not raise rates until after the election in November. So much for a “independent” Federal reserve an just doing what is right.

High and Low Water Mark Spike

Often a FOMC, GDP,  or NFP release will “spike the charts and create what I call “High and Low” water marks. The 1 minute chart above shows the high point at 1.5495 and the Low Mark at 1.5443- As of this typing the Euro was trading inside the range at 1.5457

Euro Still at Support

The Weekly Chart Above Shows the Euro Heading down after making a “Double Top” on July 15th. The 32 SMA is prepared and ready to hold support at approximately 1.5390 a Break below 1.5350 could signal the US Dollar is reclaiming it’s way back up.

Rate Increase is Needed Badly

The simpleton side of the debate screams that “you must be crazy to raise rates” with an economy like this. However,the person on the street has no access to the 2% rates that are reserved for the banks. No….. The dirty little secret is that Credit Card companies are charging 17% to regular clients - and heaven help you if you miss a payment - The rates can jump to 30% plus!

Mortgage Rates have nothing to do with Fed Rates - What would happen if…

The standard fixed rate mortgage today is approximately 7% - What would happen If…. the Fed raised a quarter point to 2.25%?  You would see the US Dollar rally - and the Black Crowes sitting on the fence that are waiting to buy houses - would fly off the fence and start to clear some of the inventory off the market in fear that rates would continue to go higher. So the Fed rate really has nothing to do with the trickle down effect that is needed to get things moving. Again - a rate increase will bring down the price of oil and help us all.

Australian Dollar Ready To Fall?

The Weekly Chart above shows the AUD-USD with the 50 SMA clearly holding support is ready to crack as rumors of the RBA needing to cut rates in the near future are getting louder.

Jerry Furst  is an active trader, educator, and Founder of Investors Education Network (IEN), He is a Mentor and Trading Coach to Select Clients  Click Here for a Free Self Evaluation Survey.

Brothers in Arms Face Down a Angry US Congress

Ben Bernanke and Hank Paulson were in the hot seat today, as Senators took turns asking probing questions that neither the FOMC chief or the Treasury Secretary could answer - at least without some matter of stuttering, or weakness in their voice. When the history books are written on the trying economic times that we are living through, there is a chance that pictures from today’s US congressional testimony may be used.

Forked Tongue Questioned

Paulson has demonstrated that he is getting much better at answering questions without saying anything of substance. Senator Ron Paul grilled Paulson on his “Strong Dollar Policy” and specifically asked about why he wants China to “Pull the Peg” if that would devalue the dollar even more! I wish I could tell you what the Treasury Secretaries  answer was to the Senators question! Of course we know the answer - He really wants a weak US Dollar as a way to lower the trade deficit. One of these days the government might figure out that by creating jobs and manufacturing goods within US borders might also bring down the deficit.

FOMC and others in Denial

Bernanke stated that he believes headline inflation will come down even if oil remains at current levels - as soon as the current data in the “pipeline” comes out in upcoming reports. Such revelations come on the same day that former US Senator Phil Gramm stated that Americans are  “whiners” and in a “Mental Recession”. Gramm was presidential hopeful John McCains economic advisor - until today’s gaff.

BOE - Hold Rates Steady

No Change in Policy - No Statement - No Change in Pound

30 Minute Pound Chart July 10 - 22:30 EDT - Going Sideways

Jerry Furst  is an active trader, educator, and Founder of Investors Education Network (IEN),He is available as a Mentor and Trading Coach to Select Clients Click Here for a Free Self Evaluation Survey.