EUR Dec futures at 1.3726 right now, with 1.4 call at 0.073. The fact that EURO didn't budge at all when DOW dropped > 2% impressed me. Do you think the recent 600 points drop have fully discounted the Euro debt woe ? What is the next stop: 1.42 or 1.31 ?
Do you remember the Fed day, QEII, the news, what people were saying. It was only 7 trading days ago, and 7 trading days ago from the top. Now do you remember what you were thinking back then? Could you summarize your thinking and forecasting at the time? Were you bearish the dollar? It would be useful to review the climate back then, and what was going on in your mind in that climate.
only 7 days ? it seems like a long time ago :-} The QEII has been fully discounted by the move from 1.27 to 1.42 even before 11/3. Now do you remember what you were thinking back then? Could you summarize your thinking and forecasting at the time? Were you bearish the dollar? It would be useful to review the climate back then, and what was going on in your mind in that climate. [/QUOTE] I thought people would use the 11/3 announcement as an perfect time to take profit and expected an easy 200 points drop. But a 600 points drop are without doubt due to the Euro debt crisis resurfacing. The question is what to expect going forward. Discounted events do not count. Market is always forward looking. but looking for what ? I guess that is what I am asking.
my impression is that both gold/crude and fx get direction from stock market for the past few months,
Stock markets are much smaller than debt markets, debts markets are much smaller than currencies markets. Stock markets are targets for peasants class, debt market are for elites class, currencies market are for master class. For most people, they only go into debt market in very limited times for their entire life, mortgages and car loans. But it could be daily occurrence for business. Debts market are good for defensive control, currency are good for offensive control, therefore, Currency predictions are useless, unless you are a insider. Gold price goes opposite with bond yield, and it could be forward looking index for stock price. It is just my personal humble opinions, purely for entertainment purpose. I could be very wrong.
Interest rates, not bond yields. Yield curve can invert with short-term rates rising and long term falling.
Interest rate is a concept that applies to money. In bonds it is the coupon at issuance, and yield afterward.
The 1st time I heard about the size of fx market was when I read the 2nd Market wizards 15 years ago and thought the same way as you do, which is, the bigger the market, the bigger the impact. Sizewise, fx > bond > stock. Also a book called intermarket analysis by John Murphy talked about the same thing. However based on my personal trading experience and observation, I found this is no not the case. With 100:1 margin for fx and 20:1 margin for commodities and bond while Margin for stock in most countries are only 4:1 to 1:1. the real size of fx and bond market are not that big as they sound. As of the impact, I believe psychologywise, stock market are far larger than either bond or fx. The reason is two fold, one is that people own stocks/mutual fund, they don't directly own bonds or foreign currenies such as Euro, Yen, T-bond or corporate bond, (bond mutal fund yes), so the stock market affects people's wealth this way, the other reason is that stock market affects companies which in turn affects people's jobs and livehood. Just my 2 cents.
I went short at 1.3480 I think the EURO is going to test 1.3400 and either bounce off of it or break through. Profit Target 1.3435 Stop Loss 1.3501