Watching Paint Dry – Continuing Consolidation?

Interest Rate and Trichet Watch

As the Dollar Index slides to fresh lows, the Pound and the Euro have been painting a sideways market ahead of the BoE and ECB announcements tomorrow. Jean Claud Trichet will have his press conference as the US releases Weekly Jobless Claims, and then the Non Farm Payroll on Friday.

It is being hypothesized that the FOMC will allow the Treasury purchase programs to expire in September, and the $1.23 Trillion of mortgage backed securities and other programs may be left to expire at the end of the year – so reports Bloomberg’s Steve Mathews, quoting Laurence Meyer of Macroeconomic Advisers.

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Japan’s Complaint Shelved - UN Show Uselessness Again 

Last week’s G20 cooperation fell apart at the United Nations on Sunday as not even a worthless declaration of outrage was made as North Korea brazenly gives the world the one finger salute - with their other finger on “the button”. When will real leadership emerge?

Overgrown Adolescents Playing With Weapons

Can we just put a “Dunce Cap” in these these guys and make them sit in the corner quietly in a comfortable room at Versailles - before we choke on the sand we have our heads buried in… Oh… maybe that’s not sand after all…

Currencies Unfazed to Financial or Military Warfare

Nothing much seems to jolt the market these days - I guess the difference between economic and military warfare is becoming marginalized as Trillions of fiat currency floods the earth - Where’s Noah?

Technical Analysis: Japanese Yen - Gives Ground

Interesting Chart Patterns At Support - Resistance

USD-YEN - Monthly Chart April 5, 2009

Triangle Pattern on MOnthly Chart Above Faces Decision Time as Price Approaches Strong Support - Resistance level of 102 - Meanwhile on the Tewo Hour Chart …

 USD-YEN - Two Hour Chart  April 5, 2009 23:00

 Inverse Head and Shoulder Faces Monthly Resistance at the 102.00 Level

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By Jerry Furst - Sr Analyst “1st on Forex”

at Investors Education Network.com

Mid Week Review

As we await Interest Rates from the ECB and the UK.

The fools on the hill continue to entertain us with their multi-trillion dollar show…

The Cast of Characters:

The President, The Fed Chairman, the Treasury Secretary, the Prime Minister of the UK, and Jimmy Rodgers!

So far this week has shown…

An amazing Soap opera of intrigue as the President of the United States suggested that it might be a good time to start buying into the stock market for “the long term”.

Tuesday Fed Chairman Ben Bernanke took the hot seat for Senate testimony and amongst some of the things he said was….

“There was Failure of oversight….”

Looming Commercial Real Estate Crisis

AIG’s Financial Product Division was separate from their New York State Insurance company…. (However they both seem to be on the same ship….)

Rewarding the Three major credit agencies, despite their lack of any credible ratings - seemed to be ok with the Fed chairman

Bernanke Dodged the question

When asked, “Should banks, using taxpayer money to bail them out, charge those same taxpayers in excess of 20% interest on credit cards?” He bailed out of an answer…

When the question of Nationalization came up - his answer was that he did not think it would be necessary - but was prepared…(that means to me- it will and basically has already happened)

A pointed question of “Do you think there are any “outer limits” as to how much money you are prepared and able to provide to bail out banks - received a vague ” there is a limit…  (just how many trillion$ is still To Be Determined)

Meanwhile - over at the White House….

UK Prime Minster Brown was not treated to formal flags and podiums… but a strange oval office press conference was had…

Key points :

The G20 meeting next month in London “must clean up the banking system” and the Prim Minister mentioned that the possibility of a “Global New Deal” is quite possible in the next few months….

Does that imply that all citizens of the earth will become equally miserable?

“The Challenges are Global”

“We need a Green Recovery”

“Regulatory System Needs Global Reform”

US Treasury Secretary Timmy Gee…

Was being lobbed soft balls in his testimony -  the most important thing I heard was that the Senate leader notified the panel that the Treasury Secretary was prepared to go behind closed doors and answer questions (away from the television cameras)  Thanks for your public service guys…  

Meanwhile - Commodity Jimmy Rodgers Over in Singapore…

Interviewed live on MSNBC Wednesday Evening by Larry Kudlow

He said he was “Mind Boggled” at how the US government is imploding and being run by…. well let’s just say he did not have nice things to say about the Treasury Secretary or Fed Chairman….

Highlights and Quotes by the ex-patriot….

• - Mainly watching the markets….
• - Supply of Commodities is declining
• - Fundamentals for Commodities “Getting Better”
• - He will be exiting the US Dollar sometime in 2009 or 2010
• - In the last 2 months “the only market I’ve bought has been China”

So there you have a mid week run down - as the world awaits the Bank of England and the ECB to lower rates on Thursday - the limplications may not have any effect as we get closer to the April Fools gathering of the G20.

 But you must admit - living in this time- let alone trading through this time is as Visa would say… “priceless”…..

 Stay Tuned… It just might get more interesting as the Governments are coming to the rescue of us all!  Makes me feel quite comfortable…

 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. 

Lots of Scheduled News on the Calendar

Interest Rates Around the Globe Expected To Drop

Australia, Canada, The UK, and the Euro Zone are scheduled and expected to lower interest rates this week. The question is, are the moves already baked into the charts?

Non-Farm Payroll - Unemployment Data Due Friday

Employment data may come in at historically horrendous levels. Wednesday data from ADP and Challenger, and Thursday from Monster.com will lead up to Friday’s Non-Farm Payroll report. Wrapping up the week is the US consumer credit report at 15:00 Friday.

European Union? No Help for Eastern Europe. The Euro continues to slide against the US Dollar as witnessed by the chart below. Note the post from Febrauary 27th.

EUR-USD - 60 Min chart - Beautiful Triangle Pattern continues to play out.

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 By Jerry Furst- Sr. Analyst “1st on Forex” www.Investors-Education-Network.com

 The Bizarre Gets More Momentum

- Are you no longer impressed with Jaw Dropping Jobless Claims?

- Tired of Hearing about Housing and Mortgage Issues?

-  Not Interested in Nationalization of Banks Around the Globe?

-  Do you find Zero Percent Interest Rates - UN Interesting?

-  When 1,000 pages of legislation with Trillions of Dollars for ”Couch Warming”….. I mean “Stimulus Initiatives” becomes so boring that the largest spending bill in the history of mankind gets passed without even being read and “Cram Down” becomes part of everyday business jargon….Well Inquiring minds might like to know who’s been cheating on their taxes in Swiss Bank Accounts…

 The New Transparency - Hiding of Assets Overseas Comes to and End?

As the Global Financial Markets Continue with the Negative Feedback Loop. - We needed more signs that things are changing - Now the Rich and Famous may be getting nervous as Swiss Bank Giant UBS has come to an agreement to disclose clients in the United States that opened bogus business entities to avoid paying US Taxes.   

Slap on the Wrist for UBS ?

Word of an agreement between UBS and the IRS came quickly Wednesday, with a mere $780 million dollar fine. Come on guys, not even a couple of Billion? These days a few hundred million is government chump change.

Just an Honest Mistake? - Who’s Really on the UBS List?

According to the Associated Press, Devlin Barrett’s article goes on to state that the IRS is calling on tax cheats to turn themselves in. My question is will they make the entire list public, and what about all the other tax cheats, like the Treasury Secretary - Perhaps Tim has an account over there?  I guess all they will need to do is say they made and honest mistake.

Euro Head and Shoulder - Trend Line Break In Play

EUR-USD Daily Chart  - (Click Chart to Enlarge)

Last Week I pointed out this Head and Shoulder pattern on the Euro that was poised to break the neckline. I received comments that his was not a Head and Shoulders, to which I reply - It’s a strong Support Line no matter what you say… And it is now broken. Where it goes from here, Who knows - the fundamentalists will point the blame on Eastern European Banks, or some other scapegoat if it continues down… If the Euro strengthens, It won’t be because of Trichet.

Pound Sterling Consolidating against the Dollar

GBP-USD  4 Hour Chart  - (Click Chart to Enlarge)

The Pound is Poised for something as this chart shows it has gone sideways

long enough.

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Good Time To  Work On Your Trading and Business Plan

Dec 9, 2008 - Pause Before The Storm?

“Show and Tell” on Chart Patterns

Lot’s of Chart Patterns are Currently Forming on the Currencies - A brief discussion and then a look at some good examples of Triangle Patterns all setting up at the same time on different time frames.  

Furst -  let me give you my “two Ameros” on chart patterns. I consider them all to be “consolidation patterns” and have no bias that - for example,  an “ascending triangle”  is a “bullish pattern” - to me,  it could go in any direction. What I look for is the strength of a well formed pattern.

Is it well formed? 

If I can show people a chart and everyone quickly recognizes a Head and Shoulder Pattern, that’s a strong signal. If there is lot’s of debate - then it’s weak.  Chart Pattern recognition gets fun when you see a pattern forming at the right edge, but not yet completed. Aggressive traders can take a position that the pattern will first form - and then if it does, prepare for the potential price targets.

Don’t Get Bogged Down In Statistics

I debate the statistics some apply to chart patterns. For example: Maybe someone tested 1085 head and shoulder patterns and determined that  83.7% have a probability of completion in a certain circumstance.  So what! The 16.3% chance is just another “50-50″ coin flip if you are only looking at statistics. Well - let’s just say that I can disprove anything with statistics..

US Dollar - Canadian - Dec 9, 2008 - 4 Hour Chart

USD-CADVery Strong Triangle Pattern forming on the Dollar - Loonie. Note the multiple areas where the upward trend Channel has held - and the Resistance forming a classic Triple Top. (click to enlarge)

Euro - US Dollar Daily Chart - Dec 9, 2008

EUR-USD: No Shortage of Chart Patterns Here as we have a pretty good triangle pattern, with a consolidation zone inside. Note the Upward Trend Channel that will be brought into focus on a 30 Min chart Below

EUR-USD: 30 Minute Chart of EUR-USD Shows the Upward Trend Channel and Resistance Levels  (Click to enlarge)

US Dollar - Swiss

USD-CHF: 2 Hour Chart Dec 9, 2008 - Nice Triangle to complement the Euro-USD Pattern (Click to enlarge)

Aussie - US Dollar - Dec 9, 2008 4 Hour Chart

AUD-USD - 4 Hour Chart - Yet Another Triangle! - (Click to enlarge)

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What Now!

Last week I went fundamental - and with good reason. There was more news than I could keep up with - scheduled or otherwise. This week I will stick to the charts - unless if we get some major fundamental issue - like Charlie Gasparino deciding to drive some poor equity into the ground. Bottom line - be ready for anything in this enviornment!

Euro in The Box - Nice Consolidation Zone

Dollar Swiss Continues in Uptrending Channel

Usually the USD-CHF is a Mirror Image of the USD-CHF, however the status quo seems to be in question as the continued Dollar strength against the Swiss is not dargging the Euro down - for now…

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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.

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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