richrdinbellingham

http://my.opera.com/richardinbellingham/blog/do-eev-and-fxp-have-more-to-run

15 Comments

    • Independence Day: Decoupling Gold and Silver from the Dollar [view article]
      It is indeed Independence Day as gold has decoupled from all currencies and is moving higher.

      Gold has arisen as the defacto world's currency replacing the US Dollar, $USD, DX, and the Euro, FXE.

      And gold has arisen as the measure and means of garnering and accumulating wealth: fiat wealth of currencies, such as the Euro, FXE, stocks, such as the Russell 2000, IWM, the US Stocks, VTI, the world stocks, EFA, and the emerging markets, EEM.

      A physical shortage of gold at coin dealers and jewlers is causing gold, GLD, and $GOLD, to move higher.

      The US Dollar, DX and $USD, is moving lower.       Aug 28 12:17 PM
    • Double Short ProShares ETFs [view article]
      When reading the report, I ask "do EEV and FXP have more to run?

      EEV is up 7.6% and FXP is up 2.1% from 7/15/2008 (but from the charts, it sure looks like a lot more); and SKF is down 35.0% from the beginning of the US Dollar, $USD, Rally when those invested via the yen carry trade sold oil and commodities and went long the financial sector and US based consumer and housing stocks.

      The well springs of liquidity have been turned off for traditional investing long the markets as Peak Currencies turned the EUR/JPY down on July 25, 2008 and Peak Dollar turned the USD/JPY down on August 15, 2008.

      The chart of EEV shows that disinvestment began to come out the emerging markets on May 19, 2008, when the TAF, TSLF and PDCF rally ended, and then again on June 23, 2008 as those with access to the 0.5% Bank of Japan loans sold out of the BRICS, EEB, to take profits and repay their loans.

      Then on July 25, 2008, an Elliott Wave 3 Down commenced in the EUR/JPY, this blasted EEV much higher.

      Note that 80 was the middle of an Elliot Wave 3 mid point rest for EEV; and now we had Elliott Wave 5 completion with the abandoned baby candlestick.

      The weekly chart of EEV shows a gravestone doji on falling volume; with 50% gain from May 19, 2008.

      The weekly chart of EEM shows a fall to suppor at the edge of a head and shoulders pattern.

      The weekly chart of FXP shows a gravestone doji as well; with 50% gain from May 19, 2008.

      It was lack of liquidity coming from failed TAF, TSLF, and PDCF that started both 50% higher.

      So we have completion of current activity for EEV; the question is what is next?

      Part of the answer comes from knowing what the Euro, FXE, will be doing; the weekly chart of the Euro, FXE, shows it has fallen to support at 148.

      Eventually there is more disinvestment coming out of the emerging markets, EEM, and China, FXI as the yen carry trade EUR/JPY, FXE:FXY, continues to unwind on risk aversion to inflation, lack of growth, and debt at banks.

      The weekly chart of EUR/JPY, FXE:FXY, shows that the yen carry trade invigorate investment in the BRICS, EEB, and the emerging markets EEM, up until May 19th.

      And there is still plent of stored up yen carry trades left in EEB, that is for sure; it's just a matter of "when is it coming out?"

      The fall in the weekly chart of EUR/JPY, FXE:FXY, explains the tremendous disinvestment that has come out of the commodity stocks such as the metal and manufacturing stocks, XME, and the gold mining stocks, that is the HUI Indexed precious metal mining stocks, GDX.

      Since July 15, 2008, the US has been the destination of interest rate differential investing as those with access to Bank of Japan funds went long went long the financial sector, IYF, Russell 2000 value, IWN, Housing, XHB, Nasdaq, QQQQ, and Consumer, IYC, stocks.

      I fully expect the USD/JPY to fall this next week and the destruction of the US Dollar, $USD, to commence as well as a run on the US Treasury Bonds, TLT, to recommence: the Dollar Rally stocks will fall greatly rewarding those who are short the financial sector via SKF and short the Dollar by investing in gold, $GOLD.

      I recommend that one be invested 2/3 in gold at BullionVault and GoldMoney; and 1/3 in SKF in a trust account and not a brokerage account.       Aug 24 04:04 PM
    • Why Gold Is the New Currency [view article]
      Despite gold's recent sell off, an investment demand for gold is abiding.

      We are approacing PeaK Dollar.

      Then gold will arise as the global currency and the means of preserving wealth.       Aug 07 02:10 AM
    • Why Gold Is the New Currency [view article]
      Despite gold's recent sell off, an investment demand for gold is abiding.

      We are approacing PeaK Dollar.

      Then gold will arise as the global currency and the means of preserving wealth.       Aug 07 02:10 AM
    • Financials & Oil Continue to Diverge [view article]
      There has been a rotation: the yen carry traders sold oil, and this prompted a sell off in the energy shares. They bought housing, financial, consumer services, retail, real estate, private equity, preferred and mortgage REITS. Yet this "rally of the dogs" will soon be over. In the linked article, I remark that oil is volatile now for me to trade, I recommend that one day-by-day, dollar cost average invest in gold; the gold to oil ratio is turning around -- gold is now becoming more valueable than oil. Jul 23 09:56 AM
    • Financials: How - And When - We Reached the Bottom [view article]
      The author is leading the lemings of the cliff of financial disaster; I hope the information information in the linked article serves as "cliff notes" preserving the wealth of all who take the time to read it. Jul 23 09:34 AM
    • Market Likely to Continue to Head Lower [view article]
      Housing and Financials as well as India and Retail rallied strongly as part of the Freddie Mac And Fannie Mae Rescue Rally which came via a rotation of the yen carry traders selling oil to take profits. Yet this "rally of the dogs" will soon be over. In the linked article I recommend that one short sell or better yet day-by-day, dollar cost average invest in gold. Jul 23 09:27 AM
    • Financial Sector's Best Week in Years [view article]
      The five day Freddie and Fannie Rescue Rally leaders are financial, IYF, 24%, home construction, ITB, 24%, India, 20%, and Retail 11%.

      Everything that is debt, has debt, and is consumer based has rallied strongly over the last five days; and thus is totally unsustainable.

      In the linked article, I preseent a number of factors suggesting an immediate downturn; and present short selling suggestions as well as present a case for investing in gold.       Jul 23 09:17 AM
    • Wachovia's Rally & Oil's Decline: Rotation from Energy to Financials? [view article]
      Great observation, there indeed has been a rotation as the yen carry traders sold oil, and this prompted a sell off in the energy shares. They bought housing, financial, consumer services, retail, real estate, private equity, preferred and mortgage REITS.

      Yet this "rally of the dogs" will soon be over.

      I recommend that one day-by-day, dollar cost average invest in gold as per the linked article.       Jul 23 09:02 AM
    • Financials Are Having a Dead Cat Bounce [view article]
      I agree Freddie and Fannie and the 17 other financial organizations that were placed on the "unavailable to short sell list" should be allowed to fail; and that no Fed intervention be made.

      Washington Mutual was up 6% on Tuesday. It a long list of other short sellers is available on the linked article. Yet I make a case for investing in gold as well.       Jul 23 08:56 AM
    • Is Gold a Good Investment During the Credit Crunch? [view article]
      I'm the Resourceful Bear, and I say: "Interest rate inflation, producer price inflation, and consumer product price inflation is on the way and that is a gold thriller, and a stock and bond killer". Jul 16 10:08 PM
    • 4 Exceptional Stocks Defying the Downturn [view article]
      Some say this investment is too profitable to fall in price ... Yet the lollipop hanging man candlestick and rising price on falling volume in the weekly chart of this small cap US based industrial electrical equipment manufacturer relates its all over. Jul 16 10:00 PM
    • Fannie and Freddie: When the GSEs Go, So Goes the Dollar [view article]
      Trading in Freddie and Fannie today show they are toast; they are now history.

      As the reality of insolvency sets in, and the bond market place sees Freddie Mac's, FRE, and Fannie Mae's, FNM, stock value going more towards zero; and as it senses that these two are going to be nationalized in some way, with real estate debt transferred over to the US taxpayer, then four things will happen:

      First, the debt sectors will will sell off heavily in the stock market; these sectors will lead the stock market lower:
      Mortgage REIT, REM
      Investment Banking, KCE,
      Banks, KBE,
      Real Estate, IYR,
      REITS, RWR,
      Health Care REITS, HCN, and LTC

      Second, there will be run on US Treaury bonds. The bond market place independent of Federal Reserve action will declare a defacto intreest rate hike on US government bonds. The interest rate on the 30 year US Treasury, $TYX, and the 10 year US Treasury, $TNX, will rise. The Treasuries will sell off as seen in the Treasury ETF, TLT, and the zero coupon mutual bond fund BTTRX, falling lower.

      Third, There will be a run on the US Dollar, $USD: The dollar will quickly and awesomely loose value: it will rapidly fall through 72.

      Fourth, the investment demand for gold, $GOLD, will increase.
      Gold will continue its outbreak which was documented in the chart of gold by Alf Field in his article Elliott Wave Gold Update 20, where gold broke out on June 25, 2008 from $870.

      The investment demand for gold will grow, and be seen in the ratio of gold relative to oil, GLD:USO, and gold relative to stock, GLD:VTI, increasing.

      As I am posting these comments, I am watching the Kitco.com chart of gold zoom higher. Gold is rising from $930 to $940, which I believe is in response to four things: Poole's comments, the Dodd Frank bill working its way through Congress, a bearish stock market, and alarm over Bernanke statements that greater regulatory powers are needed to insulate the economy.

      All I can say is: "Got Gold?"       Jul 10 01:37 PM
    • Adelante Real Estate ETFs Marked for Liquidation [view article]
      Yes how appropriate, we have an example of the Liquidation Thesis: the mortgage backed securities debt is seen wiping out real estate investment capital; and those who trade in that capital are now having to close up shop.
      Jun 30 11:23 AM
    • Friday Outlook: Commodities, Emerging Markets [view article]
      The daily chart of EUR/JPY, FXE:FXY, the barometer of the yen carry trade, shows that the yen carry trade is unwinding. The weekly chart of FXE:FXY shows that the yen carry trade has topped out.

      Crown Forex writes "As for the Yen being the star in the forex market, risk aversion and investors risk appetite was able to help the yen gain against majors in the markets as investors were unwinding their carry trades taking the USD/JPY pair down to the 106.20s as the dollar continues to lose ground. Against the Euro, the yen gained from a record low at 169.45 to continue dragging the pair down to the current support level at 167.12 while the GBP/JPY is currently at 211.10s".

      Risk aversion has come to the traditionally yen-carry-trade favored BRICs as your charts show: there is significant disinvestment from Brazil, EWZ, Russia, RSX, India, INP, and China, FXI.

      And risk aversion will rise significantly as corporate profits turn down; investors who sell stocks will be looking to the financial safehaven of gold.

      And a higher yen means a lower US dollar; in as much as gold trades inversely of the dollar; gold will be going up.

      Your chart of DBB is helpful; and the comment "still a mess but trying" is totally appropriate as gold is performing better and more reliably than the industrial metals.

      Your posting is most timely and helpful.       Jun 30 10:57 AM
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