Yellen Refuses To Discuss Economy or Policy-Stocks Rally Oct. 31, 2014
No News Is Good News, Better Than “You Just Have to Lie”
I have to admit I was a little surprised that Janet Yellen didn’t tout how good the US economy is doing in her speech yesterday. However when I think about it, creating more USD strength when they have been doing their best to beat it down for the last several years would be more counter productive to what they have been doing. Eventually if they ever do start raising interest rates the USD will get stronger no matter what they do or say, rising the question again. Can they really raise rates? I have my doubts but you never know.
Yesterday I mentioned the documentary called Inside Job in our live training session and since many members haven’t seen it I decided to upload it to youtube so you can see it here. Its still downloading so hopefully its done when I finish this up. If not I will load it when its finished. I bring this up mainly because too many people dont know the true beginnings of the financial mess the world is in and it wouldn’t surprise me as things progress that this will be removed after I post it. The other is I almost fell out of my chair yesterday when I saw this headline on Zero Hedge. I didn’t even need to read the article but did today just to confirm he really said it.
Alan Greenspan: QE Failed To Help The Economy, The Unwind Will Be Painful, “Buy Gold”
Im thinking “you have got to be kidding me”, well I was a lot more angry that that but you get the picture. Once you see the video you will understand why as it shows that he was the main culprit in creating the crisis’s. Yes crisis’s, not just the 2008 mess but every one since the 1987 crash even though that one started due to thoughts of regulators coming after illegal activities of Wall Street. Good old Greenspan made sure their fears were abated and all was well. Carry on boys Greenspan has your back. Stocks recovered and the start of Wall Street bailouts commenced. Bubbles were created and popped along the way. Wall Street got more corrupt and rich and were still bailed out when things went bad. Nobody went to jail or lost everything they had except the low end investors and people on main street. With the one exception of the Savings and Loan crisis. A couple thousand people went to jail but most kept their ill gotten gains.
So back to Greenspan and a couple other quotes from the article. The one that got me most was the buy gold one since he has been on the “gold is a relic” train with Bernanke for as long as I can remember. What changed his mind ?
He also said, “I don’t think it’s possible” for the Fed to end its easy-money policies in a trouble-free manner.
“Mr. Greenspan said gold is a good place to put money these days given its value as a currency outside of the policies conducted by governments.”
This just goes to show that the Fed bis nothing close to independent and monetary policy is run by Wall Street and corrupt politicians. When the people do finally lose their rag over all this stuff. Heads may just roll, literally. On to the charts.
As I expected we didnt get the risk aversion move started yet and from the looks of things the risk appetite scenario has potential to last longer than I was thinking as well. Thats not to say the EUR/USD will get stronger because Europe is still a ticking time bomb but we probably wont see the dramatic drops for awhile until we start getting more data. At this point there isnt much reason to be bias on a direction for this pair even though we could say we have two clean pushes down. The issue is it has already moved over 200 pips and is showing a bottoming formation leaving doubt they will be making a third push today. I do see it as a slightly higher probability but will need to see them push down during Asia and test the 1.2625 level during London with a clear set up. If they manage to push low enough I will also be open for the long at 1.2556 while cautious of them hitting stops below yesterdays lows before a pullback.
GBP/USD Bottoming at 1.5969
The GBP/USD is showing the same signs of bottoming as the EU along with the potential intraday push to the upside yesterday so I will be slightly bias for another intraday push upwards while still cautious. There is good potential for them to hold the range created yesterday since this is the last day of the month. Unless of course the clearing of the month end books drives them to close the inefficient move on Wednesday. The best level for a long is down at 1.5969 but the Asian lows will be valid if they hold around 1.5986 this morning and they push it up to widen the Asian range. Otherwise I am open for the short at 1.6026 but will need a good set up and entry because they could still run stops to yesterdays highs before a push down. If they do test higher I do prefer to be long waiting for the break with my stop at break even.
EUR/JPY Risk Off, Risk On
The EUR/JPY is tightly correlated to risk right now since the BOJ has been quiet for the last several weeks but could change if they decide to get vocal on the strength of the Yen again. This pair is reaching the levels that they started to talk of the strong Yen hurting consumers so I will be keeping an eye on them in the near future. As we can see when European stocks and US futures were hurting yesterday the EJ was dropping, then as we approached the NY open it turned and as US stocks rose so did the EJ. Those that took this pair long during the live training room did well with a 90 pip run to the upside. Good job guys.
If equities rise again today this pair should follow as long as the BOJ don’t do something drastic at their policy meeting today. I don’t necessarily have a bias on direction but the rejection does add more probability to a long. Having said that I will be open for the short at the highs considering its the end of the month and they usually don’t stick their neck out to make pushes at this time. The bast level for a long is at the current Asian lows but since they haven’t set up there yet this morning they could push lower to 137.45 during London. The best short will be at 138.02 but I will want to see them hold it lower during Asia and test early on at the beginning of the London session with a clean set up.
Forex News Today
The calendar is slow during the London session but picks up during NY today. The BOJ rate decision will be a non event but the Press Conference has potential to run the Yen crosses if they mention any changes. Of which there has been some scuddle butt going around implying they will so if I’m in a trade I will want to have the stop at break even and take profit out of proximity. There is also German Retail Sales expected to drop below zero on the more important monthly data. If it misses to the downside we could see Euro weakness but will need to be a large miss to create a sustained move. later they release Euro Zone CPI data. Expected to rise slightly there is potential for it to drop below zero being so close at the moment. If its just a disappointment and close to zero they will weaken the Euro as deflation fears kick in but a drop below and we should see a sustained move.
The US has all medium impact events in the form of Personal Spending, Core PCE, Chicago PMI and Michigan Consumer Sentiment. I have my doubts any of these will do much barring a big miss. The ones I see that have the most potential are Chicago PMI and Personal Spending. If either of these deviate big in either direction it should have an impact on the USD. If they miss in opposite directions they will most likely offset each other.
Inside Job the Documentary
Here is the video of Inside Job guys. For those who haven’t seen it I’m sure its going to make your blood boil. Make sure to pass this to everyone you know so they may be enlightened to what the elite bankers have been up to for decades.
Have a great weekend all
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