myWealth.com

Riding the Euro/Dollar Rollercoaster, For Now

haha, funny...and you're probably right.


On Feb 19 09:40 AM Steve in Greensboro wrote:

> "...This will probably coincide with better sentiment hitting the
> market as the U.S. government gets its head out of its butt and does
> something finally with the banks and stimulus package...."
>
> The U.S. government extracting its head (before the 2010 elections)
> will also coincide will hell freezing over.

Riding the Euro/Dollar Rollercoaster, For Now

Yeah, the yen is losing its luster quickly. Gold has broken out of a downtrend recently and it won't be long before it takes out new all time highs. This may also eventually catch up to the dollar and act as "ankle weights" around it. The dollar index is one to watch...appears to be double topping right now..but too early to say for sure.

Meanwhile USD/JPY is rallying hard.

Thanks for the comments.


On Feb 19 06:45 AM morph366 wrote:

> The Japanese yen is falling out of the safe haven matrix - during
> Tuesday's sell-off we had the unusual spectacle of a rising dollar,
> buoyant gold and a flight to long term Treasuries. In the longer
> term, being long all three asset classes is an unsustainable play
> but in the short term it captures the fact that many, especially
> in Asia and the Middle East are seeking out what they consider to
> be the best places to hide out while the seismic rumblings continue.

Don't Expect the Dollar to Repeat Its 2008 Performance

I agree. I wasn't referring to it being a "reserve currency" of the world either. Just that they were forming their own currency much like the euro zone has done and yet it's not the world's reserve currency either ...but yet does have its own currency for the region and that's what these guys say they are forming by late 2009 and another report mentions the start of 2010. Either way, I think they'll miss either target but still might make it happen as soon as they can.


On Jan 04 11:26 PM jepittman wrote:

> Those suggesting a new currency from the middle east as a serious
> competitor to the US Dollar as a reserve currency are IMO not being
> realistic. The quantity of funds necessary for a reserve currency
> would dwarf the small economies of the middle east. The US Dollar
> will not be seriously threatened as the world's primary reserve currency
> for many years, despite the ridicule heaped on it by the gold community.
>
>
> I respect gold as a hedge commodity and own it. Gold investors please
> keep in mind I am commenting on a new middle east currency as a viable
> global reserve currency, not being critical of gold as an investment.

Stocks, Bonds, Commodities and Currencies: My Predictions for 2009

Glad you enjoyed the commentary, guys. Was glad I was able to clarify my points as well.

I thank all of you for reading my posts. I appreciate that. Visit my website if you get a chance sometime too.

Looking forward to many more articles on Seeking Alpha. I love this site.

Stocks, Bonds, Commodities and Currencies: My Predictions for 2009

Historically, stocks start to recover when unemployment is at its highest. Why? The lead time that stocks have over the actual economic cycle.

Stocks, Bonds, Commodities and Currencies: My Predictions for 2009

Things are always still bad economically while stocks start to recover. This is due to markets anticipating recoveries about 3-6 months in advance of the trough in the economic cycle.

They want to grab up value before it becomes obvious to everyone. Some think that stocks rise as the economy rises, but that's not how it happens. The rise in stocks precedes the rise of the economy (in anticipation of a recovery).

Here's a good example of this: images.google.com/imgr...

See the stock market move in red and the economic move (cycle) in green.

So what I'm talking about is the stock cycle that leads the economic cycle.

Hope that helps in clarifying. This is why there will still be bad news surfacing yet stocks eventually rallying. That always leaves people scratching their heads. However. once they see how the market cycles coincide with economic cycles, it solves the mystery.

Stocks, Bonds, Commodities and Currencies: My Predictions for 2009

It wasn't by chance. It was by macro analysis. Looking at the whole pie and not just one piece.

Stocks, Bonds, Commodities and Currencies: My Predictions for 2009

Great analysis is never by chance.

Recessions Are Perfect for Currency Investing

Now that the Fed has lowered the U.S. rate to even lower than Japan's rate....expect the greenback to lose its luster and to become a "carry trade" funding currency for the euro, aussie, etc. in EUR/USD, AUD/USD, etc.

Recessions Are Perfect for Currency Investing

Keep in mind that the currencies that went up when stocks went down...are likely to be the ones that go down once stocks head back upward. So people that think this is all hindsight aren't seeing that both sides are true. If investors think the yen will continue to rise with a rising stock market...they are kidding themselves. The yen heads lower when "times are good and stocks flourish"...and so has the dollar much of the time. Hope this helps.


On Dec 08 11:41 AM LonelyTrader wrote:

> Now is not the time to long the USD, or the yen, unless you are trading
> intraday. Too many uncertainties at this point. Look to crosses related
> to commodities (like CAD, NZD and AUD) and hold through the cycles
> -- but don't look too closely at the price each day or you'll end
> up with ulcers. It isn't for the faint of heart.
>
> Equities are gonna be choppy -- market is currently running out of
> sellers, as it was last week, so shorts who aren't nimble will almost
> certainly get crushed. Likewise, buyers who get greedy will get crushed.
> This is a depreciatory situation for both the USD and yen. I suspect
> other currencies will grind higher as money moves out of these two.

>
>
> There is nothing easy about trading currencies. Hyman hits some good
> general points. But it's the specifics that kill ya. Too many to
> mention here. Agree that this article should have been written earlier...by
> more than a year, perhaps, when EVERYONE and their Auntie was publishing
> stuff just like this.
>
> I suspect that 90% of those who follow this guy's advice in the last
> paragraph will have wiped out their currency accounts by this time
> next year. Unless they have very deep pockets or trade in sizes so
> miniscule as to be not worth the effort. In short, his timing is
> waaaaay off. Risk in these two bets is too high at the moment.

Recessions Are Perfect for Currency Investing

The recession will likely end soon since the average recession lasts 8-12 months and we're already at the 12 month mark (here in the U.S.). Since the sell offs were so much faster in this recession, it's likely that in the coming weeks to months...the worst will finally be behind us. IF that's the case, then stocks will begin to flourish again and the dollar and yen (which flourished in the stock downturn) will likely fall against most all other major currencies.


On Dec 06 07:01 AM Debt Junkie Scum wrote:

> I don't see GBP as a higher yielding currency, we in the UK are headng
> to ZIRP. The Euro will likely follow. USD strength looks likely
> to continue as the depression intensifies.
>

Recessions Are Perfect for Currency Investing

Stocks appear to be rallying lately on "bad news days" which is bullish and the "first signs of life" that we've seen in a while.

Therefore, the party for the yen may be almost over. If so, when stocks for sure reverse to the upside (and that may be in the beginning stages now), then that could be a great time to look to reverse those positions ...as investors come out of the "risk adverse" (defensive plays) and back into stocks and higher yielding currencies.


On Dec 03 09:13 PM Paulo wrote:

> There is good research out there showing that in recessions (over
> the past few decades) you long the American dollar and short the
> Canadian (and Australian) dollar.
> True again this time.
> But maybe knowing when to reverse that position will be different
> this time.

Recessions Are Perfect for Currency Investing

Remember, though...the inverse is true too. As stocks start to recover, the yen will likely tank very hard. As it does, if were short the yen, it could speed up the recovery of your stock portfolio. So it works both ways.


On Dec 03 11:00 AM Calgary wrote:

> This would have been much more useful if you'd published it last
> October.
>
> Here's another idea for an article: If stocks are about to crash,
> just sell them in advance. Then, while everyone else is “crying the
> blues”, you'll be holding up just fine.
>