Posts by "dodger"

Dow has been paring earlier gains quite a bit and euro coming off the boil with it,nasdaq now gone negative,oil heading lower,last two hours on wall street as always very important,but we could be looking at a negative close.If Tokyo and sydney follow that lead we could see euro heading down for another test of support in early asia.

Euro came a long way very quickly,it was supported by some positive fundamentals happening in europe at same time as negative data came out in the states,also fair to say it was oversold and once the move was underway a lot of shorts had to be covered rapidly which amplified the upward move.However as we well know,rapid upward movements even more than rapid down moves have a tendency to fall back often as rapidly as they have risen,the problems that caused euro to decline are still out there!Should another threat of a downgrade or light demand manifest at a sovereign auction or industrial unrest of which theres plenty planned,or more obvious signs of a slowing china or any number of still unsolved problems raise an ugly head.Like a needle bursting a balloon there is now much more potential distance in a downside fall even with the bolingers now widened than there was before!

Gone short GBP/USD again,it looks over bought and although just went on a little run looks tired for now.

OK,the yuan has been allowed a bit of flexibility,it went up then down as did the dow because suddenly the american bluechips who either manufacture in china or distribute chinese goods presumed rising costs!Actually those costs are being seen increasing in rising wages after a contagion of labour unrest in the pearl river delta manufacturing heartland started reminding me of the english midlands in the seventies "everybody out!"for a 25% payrise,and most of them seem to have got it too,well great for them,but inflation is now surging in china which may have a lot to do with the new found desire for yuan flexibility.CHINA HAS PROBLEMS,inflation,labour unrest spreading,property bubbles in places that would put spain to shame,old "model" low end manufacturers either going bust or moving to vietnam"thats actually how they made money inthe first place!"Now the world apparently wants china to change its ecconomy,but look if south korea was apparently today denied "developed status "where does that put most of china or even the big cities??So why did I put this in euro forum,because the euro is a proxy of risk and right now the worlds reliance on china is a risk,and china is no longer looking like it did a few years back! That conduit road luxury development in hong kong who sold out"off plan" mostly to mainland chinese and 70% have cancelled ,is a big red shooting star on the hong kong property market and I would say the chinese ecconomy,well things did need to cool down!

New "buzz"used by Nassim "black swan"Taleb and then theme followed by Naoto Kan last night is we are about to enter an "age of austerity",or as George Soros more rightly called it act 2 of a depression.Rebound in euro is a reaction to an "oversold" in risk from last few weeks,however could break 1.2150 with a positive wall street run but doubt if there is the "cojones" to carry that through to the weekend.Think wait till later till US afternoon to short euro unless US retail sales are diabolical which could be a game changer.