Thursday, December 27, 2007

I'm Back........

Sorry I haven't updated in a while but things have been quite hectic in my life. The holiday's and some pretty crazy trading markets have kept me on my toes.

OK so rather then focus on the past I am going to hit you with a few random thoughts.

1. I just read about a tracking service for your laptop. It seems there is a site which allows you to download software into your laptop and in the event that it is lost or stolen the company will work with law enforcement to track down your property. It is sort of like LoJack for your Laptop. It seems you report your laptop stolen to the company and they activate the software which engages when your computer is logged onto. Then the company, Absolute Software Company, contacts local police and retrieve your computer. The system only works if your computer is used but all in all I thought it was a pretty interesting concept.

2. Giant's/Pat's game this weekend. I am not sure what all the fuss is about. Clearly the Pat's are a better team and I do believe that any team can win on any given Sunday (in this case Saturday), but unfortunately neither team has much to play for (other then an undefeated season) and I think it would be wiser to rest a few of the injured players and attempt to win a playoff game. I am and have been a Giant's fan for many years. Truthfully I would really enjoy seeing them win this weekend, probably slightly more then a playoff win, BUT ony if the Pat's played all of their front line players. I am not sure that will happen if the game gats out of hand either way.

Now a little about the Economy. It is WEAK. Very Weak. Look for the Fed to continue cutting rates in the first Quarter of 08. This seems like the play for the next 6 months. I also look for the U.K., Europe (to a lesser degree). Australia and New Zealand to follow suit in the first half of next year.

Good Luck and good Forex Trading.


Thursday, December 06, 2007

Get ready, rates are coming lower

I think the trend is pretty clear now, rates are coming lower. Not only here in the States but globally as well. This week,Bank of Canada and the BOE both lower rates 25bp (expectations were for no change) and the RBA came out with very dovish comments. Next week the Fed meets and the question is not if they are going to cut but by how much 25bp or 50bp (I think 25bp). A Recession seems to be on everyone's mind and if that occurs then the Global economy has to slow. I think the Fed is very aware of this and is doing all it can to prevent a total collapse of the economy. I am not looking for a recession but I do expect a considerably slower economy in 2008. 1.5-2.0% growth would not surprise me. I also think that the Fed would be ok with this as long as there was no recession. With this slowdown I think that the Dollar will do better. I am currently positioned long (see previous posts) and will continue to hold that position for the near term at least.

Good Luck and Good Forex Trading.

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Saturday, December 01, 2007

Is the Dollar turning.

For regular reader's of the column know, I have been trying to find a bottom of the dollar move for quite some time. This actually goes against one of my trading rules (Trade with the trend), but for once I am trying to anticipate what the market will do rather then react when it does. Good strategy ?.....time will tell. Also for anyone who is budgeted in dollars, yet their P/L is in a foreign currency (like me), I think it is a good idea to lock it now. This has been a long run for the dollar and although it can go further, lock in now and in a month reasses.

As for my positions I have on the following.

Short Euro/Usd
Long Usd/Krw
Long Usd/Twd

I cut all of my Latam exposure Friday morning as the overall "pain" of being long dollars overnight caused me to exit them. I will look to trade the Brazil from the long side next week.

One other thing to consider, in the latest edition of the ECONOMIST comes this story on dollar weakness (you have to love the picture). It seems that everone is extremly down on the dollar. I do not get it. Do you really think the rest of the world will be totally uneffected by the continuing Sub-Prime situation? Also, although there are further write downs on the way, it seems to me they are totally expected. As such, at least here in the States it should be buisness as usual.

Rates are coming lower here. 25bp is totally built in for the Dec 11 meeting with 50bp a very plausible reality. Look for this curve to steepen over time. Currently it is way to flat.

Good Luck and Good Forex Trading.

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