Interest rates must be raised. Allow me to make this simple:
-Banks are losing $, they need to recover some of it.
-Republicans...
It will be raised. I know.
Oh Really ?? ** To those interested, read the last part of this post for a possible insight in this "prophet of doom" sudden change of mood......**
Not ALL banks have the exposure you are implying. In addition, the Asia exposure is now one year old, prior to the Russian debacle, no major loss was expected.
I wonder, (as in 1994), if rates were to be raised, would there be a number of larger losses due to miscalculations in derivatives bets, given that interest rates are expected to go lower.
Republicans have been in control of Congress, and current events do not necessarily (and automatically) mean that they will increase their control in government.
I am beginning to read a little "wishful thinking" between the lines. Please keep giving your reasonings, it will assist me in "understanding" you.
Please, read some of what Mr. Steve Briese, Editor of a newsletter called "Trends in Futures" has to say: (see "Dollar Index" section)
Trends in Futures:
Cedar Falls, Iowa 50613 September 10, 1998 Vol. 8, No. 34 Editor: Steve Briese
(By the way, this is also for your education):
British Pound: Although the late August rally put the trend in doubt, the rise was stalled by major resistance at the April top. Weekly technical indicators turned bullish on the advance. The MACD histogram is now above its zero reference line, indicating an upturn in the weekly trend.
Although the likely direction of the next trend-ing move is no clearer than a week ago, price action has provided a technical support point to watch. If the August rally is the prelude to a breakout, the current correction should not exceed a Fibonacci 62% retracement of this move. Thus, a fall below 1.64 would signal a complete retracement of the rally and a retest of the lower boundary
of this year's trading range. Since the Pound has failed four prior attempts at a breakout over the last 18 months, a breakdown here would likely lead to completion of a major top.
Deutschemark: The market is approaching a test of major resistance at the November 1997 high. A confirmed breakout would signal completion of a major bottom. Technical analysts look for chart
structure to provide a base for subsequent trending moves. The bottoming action over the last year has created technical boundaries, which have gained wide recognition. A breakout through one of these
boundaries will attract substantial trader interest.
This is already apparent, since open interest has risen to a five year high. Weekly technical indicators suggest a likely upside breakout. MACD placed a bullish diver-gence at the August 1997 bottom and confirmed the subsequent rising price troughs. The MACD histogram is now trending upward, above both it signal and zero reference lines. The bullish outlook is confirmed by weekly stochastics, which are in an uptrending mode.
One caveat is the seasonal pattern. Traders will want to watch price action going into the week of September 21 - a traditional turning point period for currencies. This time frame can produce either
a trend reversal or an acceleration.
*****************pay particular attention to:************************
Dollar Index: This is the market to watch, due to its impact on dollar denominated commodities. A wedge top has been completed, creating a measured target of 94.65. This chart pattern was confirmed by other technical indicators. The market is threatening this year's low, set in January at 97.05. The weakening dollar has had a buoyant effect on physical commodity markets - they have managed to keep from sinking further. As you know, I expect major cycle bottoms in many of the physical commodity markets this fall. The minor bounce in commodities thus far is attributable to the lower dollar exchange rate.
Depressed agricultural prices place additional pressure on the U.S. government to join the world-wide currency devaluation competition. Continued stock market weakness will likely induce the Fed's aid by lowering interest rates. These things generally are overdone, causing a lasting effect on market trends. A sustained dollar decline is a very credible possibility.
Technically, weekly indicators have not reached oversold levels. Although a technical bounce off 97.00 is possible, I do not expect this level to hold for long. Traders who were able to get aboard this
move early, based on my August 20 analysis, will not want to let an early profit turn into a losing trade by overstaying a price rebound. That said though, you also will want to stay aboard for as much of this developing bear move as possible.
Treasury Bonds: Prices continue to rise in response to stock market weakness. The rally, however, is being powered by shortcovering - not a bullish sign. The upward potential for this market is unknown, but should not be underestimated given the worldwide equity meltdown.
Technical indicators are overbought, but the lack of momentum shown by the weekly MACD is a warning sign this rally does not have the support of sound underlying fundamentals. I expect the eventual top to develop slowly, however. This should provide us ample opportunity to locate a low-risk short entry for the eventual reversal.
Stock Indexes: The major indexes are displaying typical bear market patterns - extended down-legs punctuated by sharp and short-lived corrective bounces. This developing bear has not reached
the recognition stage, however, creating a continuing high crash risk.
Grains & Oilseeds: We are entering the early stages of harvest in some areas. Unseasonably hot temperatures have reduced the perceived risk of an early frost. Weakness in the U.S. dollar has
allowed these contracts to stabilize, but they remain susceptible to final harvest plunges into important cycle lows due in the September to November time-frame. Shorts have accumulated substantial profits, which should be protected. However, it is a little too early to begin thinking about the long side. I expect we will have ample opportunities once major bottoms are confirmed.
----------------------------- ** ------------------------------
All information has been obtained from sources believed to be reliable, but accuracy and completeness are not guaranteed. Statements and recommendations are subject to the limitations
inherent in market analysis and may be changed without notice. No claim is made that future recommendations will be as profitable as past performance or that they will not result in losses.
Those using this information are responsible for their own actions c 1998 by Financial Communications Company, Inc., 2302 W. 1st St., Suite 217, Cedar Falls, IA 50613-9985.
You can subscribe to Trends in Futures at:
Customer service: TrendsInFutures@futuresmag.com 1-800-635-3931 Editorial feedback: Briese@ibm.net
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I have posted this and a prior post of mine with info from the Economist, partly because of this comment:
I'm trying to share knowledge with all of you. But you don't want to listen. You mock and scoff because most of the people on these threads (SI, Yahoo, RagingBull, etc...) are Young, Arrogant, Foolish and Stubborn.
You don't respect older people and you're rude. Typical generation "x". Everything you young people have ever known are good times. All of you more than likely began investing in the late 80's or early-mid 90's AFTER you started making good money from your high tech computer job. How many of you were serious investors in the 70's? How many of you even know how to read charts? How many of you actually use tools? How many of you understand the relevance of domestic/global news and use this to help form decisions?
And you know what ?..... I think you are selling snake oil:
You want proof:
This you wrote on Aug 17, 1998
Fred: 84.625 is a GREAT price.
#reply-5513055
more:
LU SET FOR 3:1 SPLIT BEFORE THEY BUY (???) THIS FALL. I KNOW, MY FRIEND WORKS THERE (for 32 years)... August 14, 1998.
#reply-5498978
All of a sudden the tune changes (Sept 3 1998)
Whatever the case, monies need to flow out of the winners now to help stabalize things. Everyone will soon have cash to play with again, but at the sacrafice of Europe and the US. Who will be the next winner(s) after all this washes out? Hard to say. But I'll tell you what, brother, I feel Europe and China are the next 2 forces to be reckoned with....
I wouldn't be surprised to see 5k in 2 yrs.
#reply-5666056
This in the "To Yahoo or not to ?!" Thread
And another thing: INTREST RATES WILL BE RAISED SLIGHTLY. When it is announced (in the next few weeks), you will understand what I've been trying to explain.
#reply-5716527
in the same post we find the answer to the real nature of your posts:
You think my PHD didn't help me!? I've made 14 points off LU in the last 2 weeks (strict profit, ZERO losses). I day trade for a living. How about you?
As I said..... you sell snake oil.....
We are all waiting to your "learned" thesis......
Z.
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