Watching this area still remember 1243 is the bottom range of my target. 1.618 target on the fib is 1260 which I think will happen especially with the usual holiday manipulation.
Volume is light and most traders and funds are done training for the year.
Tuesday, December 14, 2010
Monday, December 13, 2010
Europe and US similarities
The United States' financial situation is as dire as that of many European countries, yet the US Government's actions contrast sharply with the austerity measures of European governments. In the last few weeks, the Federal Reserve boosted its quantitative easing program by $600 billion and Chairman Bernanke said that he was willing to increase bond purchases even further. In addition, the White House proposed an extension of the Bush tax cuts and unemployment benefits, and a reduction in payroll taxes. Although US politicians continue to ignore the US fiscal situation, the bond market, as seen by the recent declines in bond prices, may be reacting negatively toward the free-spending ways of the Government.
This country's deficit problem is widely known. In fact, during the press conference announcing the bi-partisan agreement for extending the Bush tax cuts, Obama questioned, "...how are we going to pay for all that at a time when we've got both short-term deficit problems, medium-term deficit problems, and long-term deficit problems? Now, that's going to be a big debate." Despite acknowledging the problem, Obama and the GOP decided to move forward with the proposal. This policy decision, made in the face of mounting deficits, is similar to policy mistakes made by many European countries which, prior to their debt crises, chose not to address deficit issues. However, politicians can only ignore deficits for as long as the bond market ignores deficits. Time may be running out.
Chairman Bernanke's objective in pursuing quantitative easing is to keep interest rates low based on his view that low interest rates are necessary for stimulating the economy, especially the housing sector. However, with Treasury bond prices falling, bond vigilantes are proving to be a force greater than the Federal Reserve, exacerbating the very problems that Bernanke is trying to fix.
Although financial markets are penalizing European countries with excessive budget deficits and US politicians are speaking candidly about the US deficit problem, the US continues to take actions that make the deficit worse. Despite the ECB and IMF supporting peripheral European countries' bond prices, interest rates have continued to rise and thus pressure the entire region's economy. Additionally, in order for countries to obtain the required bailout funding they are being forced to slash spending and raise taxes. While the US government still has complete access to market funding, the bond market will ultimately force the US to replace its current stimulative measures with austerity measures similar to those being introduced in Europe.
This country's deficit problem is widely known. In fact, during the press conference announcing the bi-partisan agreement for extending the Bush tax cuts, Obama questioned, "...how are we going to pay for all that at a time when we've got both short-term deficit problems, medium-term deficit problems, and long-term deficit problems? Now, that's going to be a big debate." Despite acknowledging the problem, Obama and the GOP decided to move forward with the proposal. This policy decision, made in the face of mounting deficits, is similar to policy mistakes made by many European countries which, prior to their debt crises, chose not to address deficit issues. However, politicians can only ignore deficits for as long as the bond market ignores deficits. Time may be running out.
Chairman Bernanke's objective in pursuing quantitative easing is to keep interest rates low based on his view that low interest rates are necessary for stimulating the economy, especially the housing sector. However, with Treasury bond prices falling, bond vigilantes are proving to be a force greater than the Federal Reserve, exacerbating the very problems that Bernanke is trying to fix.
Although financial markets are penalizing European countries with excessive budget deficits and US politicians are speaking candidly about the US deficit problem, the US continues to take actions that make the deficit worse. Despite the ECB and IMF supporting peripheral European countries' bond prices, interest rates have continued to rise and thus pressure the entire region's economy. Additionally, in order for countries to obtain the required bailout funding they are being forced to slash spending and raise taxes. While the US government still has complete access to market funding, the bond market will ultimately force the US to replace its current stimulative measures with austerity measures similar to those being introduced in Europe.
Wednesday, December 8, 2010
Areas to watch
I am back but this cold weather has gotten me sick. Rrrggg hate this time of year I am always sick.
Anyways current upside target range in the market is 1243- 1286. I will assume any trade in the upper area of this level will trigger some sizeable selling. Also it should be noted that we have small divergences setting up and these area I would take profits if you are long.
Gold has taken a slight pullback but I think it still goes higher. Anyone seen silver, that's what you call a lagging play!!
Anyways current upside target range in the market is 1243- 1286. I will assume any trade in the upper area of this level will trigger some sizeable selling. Also it should be noted that we have small divergences setting up and these area I would take profits if you are long.
Gold has taken a slight pullback but I think it still goes higher. Anyone seen silver, that's what you call a lagging play!!
Thursday, December 2, 2010
Still away but!!! Bingo
Bingo Bingo Bingo on those areas to watch as we bounced hard off them. That's how it goes, you got to use support points and buy and sell at resistance. 9 out of 10 time it will yield a nice play.
Still traveling be back soon
Still traveling be back soon
Monday, November 29, 2010
BINGO AGAIN!!
Bingo Again on that call of 1174. Low of the day and it provided a low risk by for over 10 S&P POINTS!!!!
Now that we have tested the two areas the bulls must now prove their worth and take it higher.
Now that we have tested the two areas the bulls must now prove their worth and take it higher.
1174
Ok note where is today's low so far. The 1174 mentioned last week on the blog. It is not nothing special that I noted the 1179 area where we made a massive bounce last week and next the 1174 area. Now this area is highly significant for the bulls and must hold it on a closing basis.
I will be traveling for the rest of the week so the blog will be dark. Any areas I think are important I will update.
I will be traveling for the rest of the week so the blog will be dark. Any areas I think are important I will update.
Wednesday, November 24, 2010
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