Let's Go Met's

They need a Win today ! Hard as they try they still have a chance !!

The Biltmore Who's Who....

So today I came home and found a letter from the Biltmore Who's Who informing me that "You were recently chosen as a potential candidate to represent the professional and buisness community" and then went on to say "We are please to notify you that your candidacy was formally approved". At first I was quite impressed with myself. Being a trader there is one thing I have and that is an ample ego and this, being a member of a Who's Who list would put the icing on the cake. But my dreams of stardom were dashed when I did a little research and realized that the Biltmore list was not all it was cracked up to be. There was this Post on a website from a home maker who was also chosen to be a member and this "answer" to a question posted on the Web about the group. Neither one paints a very pretty picture of the group.

So for now it is back to my daily grind of getting up at 5.00am to "battle" the markets. No Fame, no Fortune, but a pretty good challenge and alot of fun (almost) everyday. To tell you the truth it is the only way I want it.....at least until I hit Lotto!

A few Day's at the Cape.....and some advice from my Son.

I spent the first few days of this week up in Cape Cod. A little down time from the office. The area (my first time there) was very enjoyable. I relaxed, rode a bike, sat by the ocean and enjoyed some good food. All in all a very good break. Upon my return to work I saw the results of the Fed action. Stocks well up, the dollar well off and Interest Rate futures making new highs. Having missed the initial move I basically spent the rest of the week gaining some perspective. I didn't trade much or in any real size. To be honest I wasn't really trying.

So the week ends and I am sitting at dinner last night with my kid's when the subject of my day comes up.

Son #2 "So Dad, how was your day today"?
Me "Fine Son, nothing special, but ok"
Son #2 "So Dad, What did you do"?
Me "Well actually not much, I kind of just sat around the office today doing very little. I wasn't really motivated to do anything today".
Son #2 "Dad, that is not good. You are always telling me about trying your best, working hard and taking advantage of every single day, yet today you did very little. That is not very good, it is like you wasted your day".

Now I didn't exactly waste my day, and I did accomplish a few things at the office but I clearly could have (and should have) done a bit more. There were opportunities while I was trading (not just yesterday but over the past few weeks) where if I would have been even slightly more proactive I would be looking at much better Profit numbers. Things are ok, but as traders you are paid to take appropriate risk and for the past few weeks I have definitely erred on the side of caution. Last night's conversation was a bit of a wake up call. If this all ended tomorrow, could I say I gave it my all and took advantage of all (or at least most) of the opportunities presented. I am not so sure I could answer yes.

OK, so on to the subject of today's "Quote of the day". While in Cape Cod I stopped in a Bar for a bite to eat and had the absolutely best beer of my life. Now this is saying alot as I have been known to have a few Ice Cold ones along my way in life. It was a pint (I rarely drink pints....I perfer a bottle) of a "Fall Beer" as it was described. Pumpkin something or other. EXCELLENT! It came with Cinnamon around the rim of the glass. Wow I can still taste it. Unfortunately I have no idea of the real name and probable will never come across it again (probably better that way as it can never live up to my initial billing) but those two pints were two of the best ever. The "quote of the day" came from the wall of the bar. As I was drinking my beer I realized that Old Ben was so right!


Good Luck and Good Forex Trading....Later

So I was Half Right....

So the Fed surprised me and cut the Fed Funds and Discount rate's 50bp. Stocks certainly liked this news rallying large over the next two day, but as I write this U.S dollar interest Rate futures have come under tremendous pressure. Stocks continue to hold in there, while the dollar is getting body slammed. It looks to me that EM should come under some pressure as the afternoon rolls on. I have cut all of my short dollar positions and am currently

Short Euro/Usd at 1.4084
Long Usd/Mxn at 10.9700

No large positions rather just trying to "catch a small falling knife".

Good Luck and Good Forex Trading.

Greenspan.......

Alan Greenspan is coming out with a new book on Monday. As such he has been hitting the talk circut. This week he said he feels that Big Ben is doing a fine job and according to this
Story in today's USA Today he sees double digit interest rates in our future. I have not read the book yet but plan to and will let you know my thoughts.

Having Greenspan constantly in the news must weigh on Bernanke. It is a hard job being Fed Chairman and coming in to replace Mr Greenspan. I also think that Ben Bernanke took on at a difficult time and has done a pretty good job to date (although seeing how these next few months play out could be a defining moment).

I continue to look for 25bp on Tuesday and another cut (50bp) in the discount rate.

Good Luck and Good Forex Trading.

Some thoughts on the Fed....

Tuesday is the big day. The market seems split between 25 and 50 bp but it is my feeling that 25 is what is expected but 50 is what is hoped for. But what would 50bp do other then leave the Fed out to dry. Why ? Well the main problem as I see it is the Libor rates by cutting Fed Funds it does nothing to lower those rates, rather it leaves the market vunerable to inflation pressures (see oil and food prices) and the the Fed really has a problem. So what should they do? Well thank you for asking.....it seems to me that the Fed should cut the funds rate 25bp and the Discount rate 50bp and extend the duration at the discount window to 3 mth maturity. This would have an imidiate impact in the libor rates (come crashing off) as who would borrow at Libor when you could take term money at a much lower rate.

I am sure I am missing something somewhere but this seems to be the only solution for a fix. The Fed does have a problem. Clearly slowing growth (how slow is yet to be determined) a potential inflation issue (some might argue that there is already an inflation issue) and a liquidity situation that shows little signs of letting up.

Any thoughts.....Let me know.


Good Luck and Good Forex Trading.

Waiting on the Fed...

Next week (Sept 18) we have a Fed meeting and after the Dismal employment report most of the market is expecting a cut in rates. I guess the question is how big of a cut 25 or 50 bp. I have been expecting a 25bp cut. It seems to go along with the current Fed's plodding approach to the market. It also gives them latitude. Remember although we have had a steady slowing (based on the economic numbers) in the states, except for the employment report, the numbers have not been terrible.

This morning coming to work I read a few large banks predictions on the Fed Funds rate and surprisingly (to me) there were a few calling for 50bp. Maybe I am missing the boat here but I think it might be to soon to make such a drastic move. I think you need to keep a few bullets in your gun and bny doing 25bp now it allows you that opportunity.


Good Luck and Good Forex Trading......

Japan's Prime Minister Abe resigns

Here is the story. I didn't here any talk of this prior, but it seems to of had very little impact so far.

And the Euro keeps on Grinding higher.

It seems to be only a matter of time before we see a 1.4000 handle on the Euro. We have broken to new highs. I will stay long for now and cut just above 1.4000 as I think the market will gun for this level. obviously this chart is of the future and is inverted.

Recession Proof.

I am not saying we are in for a recession but whether we are headed for one or not Mcdonalds should continue to be a buy. Remember during good times and bad .....You have to eat!

Emerging Markets remain bullet proof

It is amazing to me how well Emerging Markets have held up. I have not been brave enough to hold a position in the region for any sustainable amount of time and therefore I have only been buying tops and selling bottoms. I remain relativly neutral in terms of position taking now as I have no strong conviction. But it does seem to me that one of my over riding theories, that of positive carry, has a large impact on the ability of certian EM currencies to with stand the meltdown (Try,Brl to name two).

The Euro looks almost certain to test 1.4000 in the next week of so.


Good Luck and Good Forex Trading.

Interesting thought.....

What would you attempt if you knew you would not fail ?

Now, the Fed has to Cut....

So after a very disappointing Employment number yesterday the market is fully pricing in and expecting the Fed to respond on Sept 18 with a 25bp cut in interest rates. This is something I have been expecting for about a month but I am wondering if the Fed might be a little to late on this one. Yesterday's number was a shock to most, certainly me, the slowdown in employment is dramatic....or is it. A little hindsight research shows that non-farm payrolls have averaged about 44k per month over the last three months, not a very pretty picture. My question is should the Fed have been aware of this and moved sooner. I am a firm believer that perception is reality. As such a small cut at the beginning of this "crisis" might have been enough to lessen the blow we are currently dealing with. Sure a slowdown would still have occurred but possible not to this extent. There are already many many stories in the papers about job cuts at the big investment houses in the credit sector. Same for most of the big banks. I am convinced that the Fed is going to cut on Sept 18 (I was before the announcement and more convinced now)but what purpose will it serve. Will Banks begin to loan money again, will the yield curve (o/n-12mths) suddenly steepen out, I am not sure of that. I think it will give more opportunity for people to run for the exit and cover positions. There is more bad news ahead, most of the mortgages from Home Loan bankruptcies a few weeks ago have not hit the streets yet (at a steep discount) as such more losses are on the horizon. I am not a total doom and gloom guy as the more and more I read it seems there are to many on the band wagon (a sign of a near...but not to near...term end) but I think things get worse before they get better.

So what does that mean for traders. Well the selloff in the Euro that I was expecting never really materialized. The after cut rally certainly has. I would stay long if you already are and look for an area to buy if you are not. 1.3600 ish for an optomistic entry level. Target is +1.4000.

Look out for Mexican interest rates. Inflation numbers yesterday were basically as expected. If markets were "normal" they would have already raised rates. Under these circumstances I think the SHOULD hold off. Comments from Ortiz this week concerned about inflation have me on guard. He might throw the market a curve ball which would hurt everyone alot.

One last thought on the U.S. interest rate market before I leave you. A friend of mine at a large European bank told me yesterday "When traders are selling 10year Mexican swaps to raise dollars (as it is cheaper then paying o/r) there is something seriously wrong with the market.

Interesting huh?!?

Good Luck and Good Forex Trading

Europe (and the UK) keeps rates on hold.

Here is a good story with all the Headlines with all the highlights from the ECB news conference.

Also alot of locals buying Usd Zar on the open but it has drifted lower as EM assests seem to be back in play (at least for now).


Good Luck and good Forex trading

Doing as little as possible

I see no reason to take unnecssary risk. Short term dollar rates are very bid and as such it seems that the Fed will have to react at some point. An inverted curve, such that we have now, is in my opinion a remedy for an economy to come to a grinding halt. As I said yesterday, the Euro should trade heavy until the Fed cuts. Then I look for it to make new highs. I am currently small short.

From the stratagist that I talk to it seems they are looking at a short Gbp position as a favorite. I havent really looked at it so I do not have an opinion right now.

Good Luck and Good Forex trading.

Back from Summer Vacation

Today begins the final push for most traders. The last Quarter of the year after completeing summer vacations. The markets feel to me to be very similar to January. Alot of Fake enthusuasim. So far this morning I have witnessed alot of range trading and I expect more as the week progresses. Will the Fed cut rates? I am not sure as there are alot of numbers out before their next meeting. If Inflation is on the low side and weaker numbers come out.... then maybe. But if not think it will be difficult for them to cut, unless of a full market breakdown.

I am basically trading very short term (not my style at all) with smaller positions. I am trying to stay short Euro (long usd) until (if) the Fed cut's and then I will reverse. I am also looking for an area to short Gbp. I will let you know when I deciede. Otherwise I am pretty much out of the market (long small UsdClp in case of a blowup as it is cheap to carry).

Good Luck and Good Forex Trading.