EURO in boilling pot

It is pretty surprised to see this, French hostility to euro begins to gather pace. Wow.... with the EURO strengthening, french growth slumped to halt in the 3rd quarter due to incipient crisis in the car industry: Peugeot Citroen laying off 10,000 worker. Trichet during this year did claimed that ECB going to increase interest rate, with this on mind, Euro countries is going to suffer the consequent of having a stronger currency. Good or bad? Guess either way, it is still bad as higher interest rate would meant stronger currency, loan would increase which indirectly affect the company's borrowing fund. Because of this, company would have to take drastic measure to cut costs, which lead to laying off of workers. Eventually bad for everyone, except investors and importer.

Few more days to 2007. Slovenia will become the 13th eurozone member on 1 January 2007. Something interesting: German EU presidency lumbered with massive to-do list

Quake aftermath

Finally, internet is much better now after some synchronized and internet traffic adjustment from Service Provider in Singapore: Asia back online after quakes but access patchy. Pretty interesting to know about this, Jobless claims inched up last week. Guess USD is not strengthening any sooner.

I am not trading this week as the volatility is not high, i consider them as pretty dangerous week. Some Crude Oil news: Nigerian oilfield sieges end, Shell resumes output.

EARTHQUAKE, internet disrupted

Christmas 2006 is a wonderful and rewarding for this year. I had the most Christmas presents and warm greeting from friends as well.... How nice indeed.. However, today, Taiwan earthquake has caused internet access in Asia being disrupted. Wow, I'm having problem with connectivity as well. Starhub, Singnet, Pacific internet all having disruption, therefore not trading today. :(

Blue Ocean Strategy

When i first browse through the shelves of books at the bookstore and come across this "Blue Ocean Strategy", my initial impression was this, wow, Harvard Business School Press is expanding its horizon to the Deep Blue Seas - Marine Biology. It was pretty amazed that it has nothing to do with Marine Biology or any aquaculture, it's all about Business Strategy...

According to Blue Ocean Strategy book, market universe composed of 2 sorts of oceans: Red Oceans and Blue Oceans. Red Oceans represent all industries in existence today, can be known as the market space. Its industry bountaries are defined, accepted and competitive rules of the game are known. Once companies try to outperform their rivals to grab greater share of existing demand, products become commodities and cutthroat competition turns the red ocean bloody.

Blue Oceans denote all the industries not in existence today, it is an unknown market space. It is defined by untapped market space, demand creation and opportunity for highly profitable growth. Some blue oceans are created well beyond existing industry boundaries, most are created within red oceans by expanding existing boundaries. What is best about blue ocean is that competition is irrelevant because rules of the game are waiting to be set.

I found that most young adult have the urge to buy a particular product, most of the reasons are personal gratification, boost self image and egoistic behaviour. Blue oceans work well in this context due to the current mindset. However, i don't think blue oceans will not work well in the longer term, due to the fact that it is not the basic necessity, unless society's needs has indirectly turning this blue ocean into red ocean.

Futures Market Recap

Dollar Moves Higher on Positive Data
Extracted by John Lee

U.S. 10-year Treasury notes fell today, after reports showed that U.S. personal spending and consumer confidence beat analyst expectations. Traders pared gains from yesterday's run-up before the 3-day weekend. Bonds have been trading back and forth on conflicting economic reports and announcements coming from the U.S. The weaker the report is, the more bonds move higher; bonds initially shot up in June when the Fed began a rate-pause to deal with a slowing economy with moderating inflation. Bonds had begun to pull back from 11-month highs when yesterday's Philly Fed came in much weaker than expected, sending bonds higher. As the year nears its end, investors are still undecided on the future of the U.S. economy and bond prices. Data and reports continue to send mixed signals.

The dollar moved to 8-week highs against the yen, and moved moderately higher against the euro, after two key economic reports showed positive results in the U.S. The dollar had fallen to 20-month lows against the euro before rallying on a string of positive economic data reports. The global currency market has been dominated by inflationary and rate-hike news. Europe has the best position right now on the global market, with its economy growing much faster than both the U.S. and Japan. The yen and dollar will face a tough 2007 unless more positive economic data starts to show up.

Crude oil futures fell 0.4% to close at $62.41, despite attacks on Nigerian oil-producing facilities. Warm weather in the U.S. continues to drive prices lower, as energy demands decrease along with warm weather. Crude is down 25% from its highs, which has prompted OPEC to call for a reduction cut which nears 2 million barrels a day. Despite the warnings, the price of crude continues to fall on warm weather and ample supplies. Natural gas fell to 9-week lows on warm weather and large supplies. Gold rose fractionally today as investors brace for increased demand. Weakness in the dollar and rising oil prices usually send gold higher, but there was not enough action in those markets to spark a major move in the metal. Gold is used as a hedge against rising oil and inflation; gold is down nearly 20% from its May highs, but still rests well above levels from last year. Copper continued to fall today on high supplies and weakening manufacturing in the U.S. Wheat rose the most in a month today, extending its recent mega-rally, on speculation that crop damage will limit global supplies. Corn futures rose to a 3-week high on speculations that ethanol production will double in the coming years, obviously creating more demand for corn.

Economic News
U.S. personal spending increases the most since July.
Durable good orders rose in November, but business equipment demand slowed.

Back to serious business

Extracted will delete off after i make up the Tuesday and Wednesday summary and entries:

1. Thursday, December 21st, 2006 (4:30 am New York Time) UK
We have two important reports coming out of the UK. We have GDP & Current Account coming out. Both are capable of moving GBP/USD by 30 to 50 pips. What happens if they conflict? The whipsaw massacre happens. Then you say, why not wait for both of them, and only trade if they don't conflict? Well...imagine one of these reports gets released 2 seconds faster than the other, and the first one already moved the market by 30-40 pips, and you see that the 2nd one doesn't conflict, and you enter at the top or bottom of the maxed out move...no good. GDP is a little bit bigger caliber report, but a very steady one with minimal deviations. Current account is a bit smaller caliber, but the deviations can be crazy. What I will do is look for a shock on the GDP number, a shock so strong, that it will make the current account look irrelevant. So GDP is expected to come out at 0.7%. If it comes out at 0.9% or higher, I may possibly go long on GBP/USD. If it comes out at 0.5% or less, I may possibly go short on GBP/USD. But the chances of such deviations are slim to none.

2. Thursday, December 21st, 2006 (8:30 am New York Time) USA
We have 4 different reports coming out. Another freaking waste of golden opportunities by slamming all these reports into release all at the same time. We have core retail sales coming out of Canada, which can move USD/CAD by as much as 50 pips or more. We have Canadian GDP coming out, which can also move USD/CAD by as much as 50 pips or more. We also have U.S. GDP coming out, which can move GBP/USD by 50 pips or more. We also have quarterly PCE coming out, which is important, but usually very steady, with very few deviations and surprises. I am going to have to ignore the golden Canadian reports, because of potential unpleasant conflict. I will focus on U.S. GDP, which is expected at 2.2%. If it comes out at 2.4% or higher, I may possibly go short on GBP/USD. If it comes out at 2.0% or lower, I may possibly go long on GBP/USD. PCE Core is expected at 2.2%, if it conflicts by at least 0.2%, I will exit my positions immediately.

3. Thursday, December 21st, 2006 (12:00 pm New York Time) USA
We have Philly Fed Index coming out of the U.S. It's expected that the number will come out at 4.0. If the number comes out at 15 or higher, I may possibly go short on GBP/USD. If the number comes out at -5 or more negative, I may possibly go long on GBP/USD. If my triggers are hit, I expect GBP/USD to move by at least 25 to 35 pips...

Euro rate hike 2007

I wasn't surprise when i saw this article, FOREX-Buoyant euro scores lifetime high vs yen which indicate that German business sentiment firmed expectations for further euro zone rate hikes. ECB Trichet even testify that rate hike in early 2007. Sounded very strong and positive to me. U.S. Treasuries up slightly. The dollar is down against the euro after yesterday's upbeat survey of German business sentiment firmed expectations for an interest-rate hike from the European Central Bank. Stocks rally on Thai turnaround, euro strong.

On the other side of the globe, Home loan demand slumps as refinancing plunges. Ouch, this is going to hurt the USD. Guess, we won't be seeing USD strengthening any sooner due to the ECB interest rate hike in 2007. It would be pretty interesting to wait for the Blair resignation which is due next year too. If USD do not regain strength during Blair resignation, only miracle could strengthen USD then.

Other interesting news
Sweden's Ericsson AB is buying Redback Networks for $2.1 billion in cash, while steelmaker Arcelor Mittal is acquiring Mexico's Sicartsa for $1.44 billion.

Oil prices are nearing $64 a barrel ahead of data that experts expect to show a fall in U.S. crude stocks after dense fog disrupted imports.

Life goes on....

Wow, I do missed 1 week of interesting entries for last week. The best i can do is to continue with a general summary of today's event

Turbulence overseas isn't helping the mood. A steep drop in Thai stocks has pulled Asian markets lower and is bringing back uncomfortable memories of the 1997 meltdown in the region. Singapore share prices closed sharply lower as investors, unnerved by the stockmarket slump in Thailand, elected to take profits following the main index's recent record-breaking run, dealers said. The SET composite index in Thailand tumbled as much as 15 pct at one point in reaction to capital controls imposed by the Bank of Thailand, aimed at curbing speculation in the baht.

U.S. Treasuries are up as investors expect the numbers to show a cooling housing market and benign inflation pressures. The dollar is steady against the yen. Tokyo shares close lower as investors locked in recent gains after the BOJ decided to keep the overnight call rate target unchanged at 0.25 pct, a move that had been widely expected by the market, dealers said.

Oil has slipped below $62 a barrel as mild U.S. weather cuts demand for heating fuel.

It's the best of times and the worst of times for two transatlantic stock-exchange mergers. Euronext shareholders have approved the company's sale to NYSE Group, but the London Stock Exchange keeps spurning Nasdaq as it touts its bullish profit outlook.

Heed Oracle: The software maker reported disappointing sales late yesterday, and now stock futures are pointing to a down day.

Morgan Stanley shares have edged up after the investment bank posted higher-than-expected quarterly results and announced plans to spin off its Discover credit-card business.

Delta Air Lines has rejected US Airways' $8.4 billion bid and filed a plan to emerge from bankruptcy as an independent company.

Missing In Action

After 1 week of MIA (missing in action) in the forex battlefield, gosh, glad to be back to the same routine again - analysis and monitoring of the fx market. Boy, i do missed fx market a lot. Will continue plan, learn, unlearn and relearn.

TASS is having this session "Downloading Data from Internet FOC" by Ivan Koh on the 28/12/06. Guess I am planning to attending this as a refresher regarding Metastock format, function, and other interesting stuff - adjusting Prices for Bonus, Dividend and Right Issues. Nothing to do with forex, but, aiming to grasp the methodology behind the operating of the software. :D Will start gather, collect and prepare a long lists of questions starting this week.

Pretty scary to know that the world suddenly evolved dramatically in the business world. China for once is making all the right move in the forex world. Google too by acquire "YouTube". Historical cost is no longer valid indicator and can't be used for budget and prediction. However, Activity based costing more like a replacement of this historical cost in many ways. I used to study the psychology of the people in the business world, it seems that i have lost touch of business people mindset as they are moving in a constant fast pace, evolving and changing ideas in a split second. No longer the predictable business people, a few years back. It seems that this predictable honest business people are going to wipe out pretty soon. :(

A New Year, 2007 is just around the corner, so, intend to set out for early target, and plan to achieve them as a trader perspective. How time really fly. Still kicking on the battlefield, but one thing i am really glad is that i'm officially 1 year plus as a part-time trader, and i never thought of giving up that dream as a full time trader. Hoping that dream will be sooner. Cross my fingers and will pray and meditate on this real hard.

Current motto: "We have one life, live it the forex way".

Bonds

Interesting stuff- Bonds: Anything To Get Excited About?

USD Strengthening

Short explanation of USD Strengthening

USD regained ground against most currency due to Tuesday stronger than expected non manufacturing ISM data. The ISM data reflected improving conditions in the services sector and reinforce FED view of economic downturn is limited to housing and manufacturing sectors. Part of the USD strengthen also due to GBP economic data revealing an unexpected decline in both manufacturing and industrial output. Industrial output of down 0.8%, saw its steepest decline since August 2005. Because of GBP strong correlation with Euro, this bad data also sent EURO trading on lower ground. GBP Data as below:

GBP Industrial Production m/m -0.8% (A) 0.0% (F) 0.2% (P)
GBP Manufacturing Production m/m -0.4% (A) 0.0% (F) 0.0% (P)

Today, we have very interesting fundamental for both Euro and GBP. During ECB announcement today, I would like to see a 25 bp rate hike to 3.50% on its interest rate. However, the effect will be limited as Non-Farm payroll is tomorrow. YAHOO!!!!! I enjoyed last month NFP, trill and excitement.

Baby come crushing down

It was good to be back after the weekends. Market continue to where it is, GBP and EURO come crushing down. I just read an article by Ed Ponsi, pretty surprise that someone has actually catch the strong trend of EURO and GBP on the up move, in a matter of months. Wow.... He classified this as "Deep Sea Fishing". Guess, I am still a bad fisherman after all, catching only a few small fishes even with tons of hardwork. Nothing comes easy after all in this world.... :( The only deep sea fishing that i have are some institutional aquaculture, i.e. buying GBP notes and keeping behind my pillow since beginning of the year. Real happy about that appreciation. :D If only i have the patience to hold on an electronic account for that longer time frame. Just like, having an aquaculture farm, buying all the small fishes, waiting like few months for the fishes to grow big, before it can be harvested or for the fishes to change sex (seabrass). :D

2 more days for non-farm payroll... have to research and read more before the actual day itself. Most institution normally during this few days have a vary different views, some said that it will turn up, others said that it will turn down. Which is which? At least, my great friend, Zeus is right after all. Always follow the gold pot, now at 636. :D

Down come Baby...

Today was incredible.... GBPUSD was charging on a very strong uptrend, moving higher and higher... When it reached 1.9850, then, bam, downtrend is where it goes.... Of course there are fundamental behind it that support this...

One of my office computer broke down, not much research had been done ever since..... Will try to make up all the wasted time...