Operators' intentions read by 
For the new week EURO made a good upward gap opening and with swings it is holding near high and not cut the low so for.GBP also recovered but not like EURO.AUD has made a good recovery and also the crosses of AUD and YEN.What it explains to us? Is the credit crisis over or the bailout program is implemented for the market to gain confidence.? Who are now the buyers who made the rise in EURO and GBP,is it price discovery act of market based on demand and supply.?
Can the institutions make money without markets? Are the banks now got the mind set to trust other banks after week end rest? Is the panicness subsided because of cooling time given during week end? Can the traders enter into the market aiming some profit.? “Because it is only one day recovery and may be a pull back and after commiting positions they may drop - what is the guarentee that they will not drop ?” questions ringering in the minds of many traders.Traders may take time to change the mind set but the market changes the mood quickly - hence giving surprise all the time.
There were views in the market that all the institutions were liquidating positions to stay in cash and most of the carry trades have been squared off.Then what can be the new trading strategy to earn and to stay in the makret? Stock markets across the world are rising and there is expectations that US stocks could also continue the sentiment of turn around in other markets.Can we see the normal market in coming days.?
Time alone can give answers to these questions. To me market continues to gives trading opportunities and there may be some good time and bad time but the market cannot eleminate the traders fully.
Both buy and sell and sell and buy swing trade potencies continue to prevail in the market .Only position traders and currency conversion traders need more long term trends.It is human, when we see new low or new high first time the surprise or panic comes in, but when we see around the levels during the day or in following days the habituation takes place and the trading ideas emerge.Hence the exchanges often give cooling time when the markets drop or rise very big or beyond usual.
The confidence will come in and the normalcy will also be seen soon.More than the action by the regulators and authorities,the confidence of the market participants play a vital role in regulating the markets.
Regards
Dr.Sivaraman
There is lack of confidence and trust, so banks are not lending to each other. Therefore, USD LIBOR has risen to the current levels. Once LIBOR moves down to “normal” levels, I would assume that confidence has returned temporarily. When subprime mess blew up last Aug (’07) USD LIBOR had shot up too, and once it returned to “normal” levels, fear was again replaced by greed! Is USD LIBOR a leading indicator again?
Dear Su25
Nothing works in this world without confidence and trust.When there is rise of 300+ pips in EURO and GBP it shows there is some amount of confidence ,probably total confidence is still lacking.The follow up rise tomorrow if happens then there could be more assurance of confidence building in the market.When LIBOR is high and it indicates lack of confidence,then how the lending happens at high interest rate - when there is no confidence that the pricipal might be defaulted.It is just as you mentioned demand and supply mismatch.There is also another element namely artificial demand and artificial supply that can also act in the market from time to time..That is normally referred as exploitation.
I am some how not convinced that the markets are related because I have seen in my experience every time 2 different markets are related some time and later the commentators relate another 2 markets.So the lead is with in each market and not outside of each market used by the market players.
Regards
Dr.Sivaraman
Regards
Dr.Sivaraman
dear dr,
so do u think we will hit 1.69 again?
Dear jilli
I am not expecting any adverse downward move in the near future.
Regards
Dr.Sivaraman
AIG borrowed around $ 85 billion @ 3mL+8.5%. I am not sure whether they borrowed another $ 39 billion last week.
In answer to your question - companies like AIG and others who are desperate for funds to survive will borrow at these high interest rates. AIG will liquidate assets ASAP to repay this high interest loan. AIG sale of assets may comprise of their subsidiary in a SE Asian country, and perhaps investments in stocks worldwide. From AIG’s point of view, although the stock markets have dropped, they have to sell (perhaps make nominal profits - assuming they invested when markets were lower than current levels) to repay the loan.
Stock markets have probably risen because some companies are buying back their stocks, and maybe partially due to temporary return of trust!! However, a move of 300 pips in Eur/Usd is hardly an indication of return of confidence, if viewed in the context of its fall by 1600 pips over 3 weeks indicating increased lack of trust.
In today’s globalisation era, markets are interrelated and dynamic - and factors governing their interrelationships are also dynamic. Presently liquidity, stock markets, and interest rates are dominant factors in this relationship. Maybe in the next few weeks US twin deficit issue (as a result of the bailout plans) may become a dominant factor in this relationship. Fctors which become dominant will determine what becomes the focus, thereby inducing the market to act/react acordingly.
BTW, I use technicals to trade currencies. I use my above understading of markets to take longer term views on creating option structures to reduce interest costs and hedge currency exposures.
Dear Doc,
Can you please give the Times of GAP TIME in GMT (+1 UK) for each session , thanks in advance.