Dow 2006

[ajaskey]

Bullish retrace from July bottom

The slope of the move from the July bottom (peach line) exceeds the slope of the May-July move down. Very bullish.

 

[kriesau]

Senior US banker flags imminent ‘stagflation’ risks
The TimesSeptember 16, 2006
From Gary Duncan in Singapore

THE US economy is in danger of “stagflation” as its severe housing market downturn undermines growth while inflation remains on the rise, one of America’s most senior bankers gave warning yesterday. William Rhodes, chairman and chief executive of Citibank and senior vice-chairman of Citigroup, the US banking group, said that he was increasingly fearful of the threat posed to American prospects by the abrupt cooling of the US housing market. Mr Rhodes, speaking in Singapore as a spokesman for the International Institute of Finance, the lobby group for the world’s leading private financial institutions, said that with US house prices already stagnating, he and colleagues expected worse to come.

In comments that echoed warnings earlier this week from the International Monetary Fund, the Citibank chief cautioned against the combination of sliding growth with recent signs of persistent and rising inflation. “The inflationary figures we have seen over the last month or two are important and at least in my opinion have been somewhat ignored,” he said. “Given the scenario I am talking about, flagging inflation and slow growth, we could get into the ‘ s’ word — stagflation of a sort.”

Ahead of talks between finance ministers and central bank governors from the Group of Seven leading economies today, Mr Rhodes added that he was also anxious that, if these threats to the US economy were to become reality, they could prove the trigger for market turbulence, including a much-feared sudden correction to global economic imbalances. Economists fear that such a correction of the imbalances shown by the vast US current account deficit could send the dollar, shares and bonds plunging and trigger an American and world recession. But Mr Rhodes said he believed that little or no progress had been made by the IMF to find measures to counter the risks posed by the imbalances: “I think a lot of the issues that we are talking about were optimistically talked about at the IMF and World Bank meetings in April: that this would be, if not resolved, progress would be made. The fact is that no progress has been made at all since the last meetings. [And] not much is expected here.”

The Citigroup executive argued that the G7 and the IMF’s ruling policy committee, chaired by Gordon Brown, the Chancellor, needed to take urgent decisions to hasten action this weekend. Worries over the US outlook and global imbalances are set to be key in the G7 meeting today, as well as debate on how to breathe life into stalled world trade talks.

 

[kriesau]

Hello Mate,
This is the october contract mate
The actual Price I have bought at is 11610 oct 19th expiry my stop @ 11810 First and then 11910

happy trading rav

Those are long stops !

 

[rav700]

Hi Guys,

Just some information regarding my stops....
With regards to the stop....I like to set and forget ... As I think that we are right at the top right now....but there seems to be a lot bullishness on the boards which I am trying to study and had unsettled me slightly ......

Thanks for all your comments guys....I am bearsish because of my seasonal studies.

Thanks

Happy Trading...
( Seems like I might have to reconsider my postion before midnight tommorow.... I really appreciate your comments)

 

[rav700]

Rav this is a really really daft question and I feel a right *&?# for asking ... but why not the Dec contract ? spread is about 2pts more and you get more time to be right.

Hook Shot

Thanks hook shot..............I understand where you are coming from and have been questioning
myself regarding this and might have to reconsider......

hmmmm

 

[TopIQ]

DOW recent top is at 11709, if it fails to reach that it's putting in a Double Top and is a good short.
RSI is making a lower high and the market makers will want the price to be as high as possible before they go short, so watch for closes at the top of the range which look bullish but price falls through their low and doesn't look back. That happened in may '06 to the FTSE100.

 

[Pat494]

Rav
Your chart re your post 1968 shows the past position very clearly. The longer term general trend has been UP with nice regular dips ( retracements ). In hindsight one could have had a long on the farthest out future that your broker/SB will allow eg. end of the year AND if you are going to be a bit cleverer, then catch the retracements with a slightly shorter but seperate instrument eg December future.
Easy to fall between the "two stools" though if one is not paying attention. Or get distracted by others offering alternative advice.
As for this comfy system continuing indefinately - obviously not. And when is it going to change ?
Now that is THE QUESTION !!

 

[Hook Shot]

Big Big Week - looking forward to it BIGTIME!
Rav - no worries what do I know anyway.
Pat494 - I like your style ..... playing the front month off against the back months. Will have to investigate. Thanks for Idea!

With so much anticipation ....... it's just like the market to put in a small range week at highs - to teach us a lesson! Mentally I'm preparing for Dow 12k cos shorting is still too easy right now.

All the BEST

Hook Shot

 

[rav700]

I have to be honest,
I am going to pull out of the trade at 11:00 today when IG opens....
The Main Reason for this is as follows:
1.I am in doubt......
2.The overall picture seems to be 11700
3.I did not take fed into consideration...
a) Increase the intrest rates then------100% Fall--But their is only a 5% chance of this .
b) Keep the intrest rates on hold------100% Rise--Their is a 94.5% chance of this
c) Cut the intrest rates-----100% Rise--Their 0.5% chance of this....

Also I have to admit to my mistakes
* Was to hasty to get into the trade-did not want to miss out
*Did not let my T.A Crossovers take place because I wanted to get in at the highest point
*Did not take into consideration the fed statement .....
( I seem to have got a lot of things wrong)
I should stick to cable and the ftse...... :cheesy:

Once again thanks Pat494,hookshot and kriesau for your advise.......
Take care
Happy Trading

 

[kriesau]

Thirst for cash that threatens a crash
Sunday Telegraph 17/9/06

The crash in May of exotic currencies and stock markets across the world already seems no more than a bad dream, a momentary disturbance to the Goldilocks bliss now assumed to be the normal state.....
The spreads between low-grade and blue chip bonds in the US and Europe have been compressed to razor-thin levels – again – while the Chicago VIX index, which measures risk appetite, has halved from 24 in June to just 13, a near-record level of complacency......

Philip Poole, an economist at HSBC, said the Fed's July pause in interest rate rises had dispelled fears of a global monetary squeeze. Crucially, Japan is also coming off the boil, pointing to a slower pace of rate rises from the current 0.25pc. He said: "The market focus has switched away from inflation, but people are still expecting a soft landing in the US. We think they are failing to price in substantial risk to the global economy." Even so, Mr Poole said, there will be no repeat of the 1997-1998 Asian crash because most emerging markets now have floating currencies (though not China), acting as a safety pressure valve.

David Bloom, global head of currency strategy at HSBC, said: "It is the US that we are worried about as the housing market turns down. The US needs nearly one trillion dollars of foreign money each year just to stand still. If people around the rest of the world start keeping their money at home for any reason, the dollar will face a serious decline and we think it will kick in later this year. The risk has moved from the outskirts to the heart of the system, and it's now pressing on the very aorta of capitalism."

 

[rav700]

Hello Fellow traders
I think the market will be playing in the 40 point range till the the fed statment on wednesday....
I guess after a weekend of analysis and all you comments...I guess there is only one way for the dow that is up up and only up

 

[ammo]

spus bounced off resistance.dow went thru res and came back,stayin in a channel

 

[easytimes]

Seems that way, most appeared to have gone long on the pre announcement hoping to bag a couple of hundred points. They won't raise rates that's for sure - political reasons above all else.

 

[ukhero]

I think the DOW's had its fill, it's looking a tad tired. The market has anticipated that the FOMC will be a 'Hold,' and if so, I doubt ther'll be little movement here after. If they rise it, well, grab yer shorts and I'm not talking Y-fronts.

Good trading

UK

 

[Hook Shot]

Risk reward is.......... you where Hero... whether it ends this week or whenever ..... we are long in the tooth as they say.

Hook Shot

 

[Hook Shot]

Addendum - think that's how you spell it ??!!

I think we should be looking at index or stock PUT options over the near term with implied vol so low it's worth investigating. Catching the intermediate top is one thing but what if we get a shock !!! Oil resurgence and potentially higher rates are lurking and very few have tuned in. With most people camped at one end the risk is the 20% beat the 80% again (to use a Pareto analogy).

Happy Hook Shot

 

[kriesau]

I think the DOW's had its fill, it's looking a tad tired. The market has anticipated that the FOMC will be a 'Hold,' and if so, I doubt ther'll be little movement here after. If they rise it, well, grab yer shorts and I'm not talking Y-fronts. Good trading
UK

I agree. The Dow has tried and failed to breach 11600 over the past two sessions and if we're to get further upside then the Dow has to convincingly break through resistance at 11600 and power up to 11700 by the end of this week. The 200+ pt rally that we've seen over the past week and a half has largely been stimulated by the falling price of oil but this won't last. I think that we are on the cusp of a downside reversal and the catalyst could be the FOMC on Wednesday. It's unlikely that they will raise the interest rate (and if they did the market would tank) and this expectation has already been factored in by the market. However, as UK has already pointed out, the expected continued rate hold is therefore hardly likely to be a catalyst to move the market much higher. There could be a last gasp just above 11700 to set a new year high but I don't think there is a highly probability of this happening. If it does then it could provide some good short entry positions.

The housing market is slowing down rapidly (be interesting to see the August Housing Starts figure on Tuesday) and this will impact consumer spending. The trade deficit has just hit a record high and we are starting to see significant losses and lay offs being projected and reported by the big 3 auto makers. A downside move would look to bounce off support at 11450 and beyond that we could be looking to test 11000 again. As always the big question is when and where the market will turn but I am now starting to look for good short entry points.

 

[ammo]

The slope of the move from the July bottom (peach line) exceeds the slope of the May-July move down. Very bullish.

andy, you are watching the google charts ,do you see pull back to 340

 

[Pat494]

What a flat day yesterday. I never got in at all !
I can recommend having a look at JillyB's journal. She posts at about 2.20 pm and has an 80%+ success rate !
And for today ? Opening down probably and drifting again ?? In my very 'umble opinion

 

[easytimes]

There was a good entry today though on 11485ish for the Fed announcement rally. Oil dropped in preparation for possible surge up tomorrow.