Value of Perfect Information

A short while ago our systems have just entered short term sell signals on the Dow Jones 10320, GBP/USD 14785 and Euro 12297.

Members have received emails and updates on all the action so far. At the open of activities on Sunday Globex action members were informed how prices could continue moving higher in this way in which we stated that TMS would stand aside during the Asian and European session. The U.S. session has begun and the prices have aligned nicely with our sell areas for the short term system sell signal triggers.

We would now expect a pullback to materialise soon but we would allow for price action to unfold for the next few days, as prices can reach higher elevated overextended levels in which case the TMS system may trigger another sell signal should prices move higher and if the criterion is met.

Currently the markets have halted at near entry levels in which recognition of overextended prices on LIGHT VOLUME is taking place. Either markets will simply correct from here or they will grind higher to produce more euphoria about a breakout of short term activities in which talks of back to the highs will start to surface. We don’t expect markets to breakout before a pullback is achieved.

Of course our members are kept posted with any technical developments on price action, as it occurs.

The above signals don’t need to pull through as this is the work for Monday in which the whole week is left to play, although we would expect them to!! Last week however we made over 600 points on short term signals and these signals were only triggered from last Wednesday onwards!

I am Ajit Singh, the writer of this article who started work with the financial markets from a very young age of 17 and this is our website: www.tradingmarketsignals.com – ‘TMS’.

If you like what you read and would like to gain insight on position trading style signals on five major markets. Or perhaps you want to add clarity to your short term trading with our signals which are fired via email and soon possibly by a live chat room platform, then this would be the best time to join us with our annual membership offer that unfortunately expires on TODAY 14th June 2010, in line with the U.S. stock market close on Monday.

http://tradingmarketsignals.com/#/flash-crash-price/4540799314

Until next time, remember:

Trading Market Signals
…the hub of unbiased technical analysis!

When you’re trading short term timeframes it’s important to have a check of what the long term timeframes are doing as somewhere along the line they interlink with one another providing critical levels and trading triggers.

We’ve been catching the short term moves with ease last week using our short term timeframes and with our TMS Strategy which has been catching some nice position signal moves using longer term timeframes.

Today we’ll look at the markets using daily/weekly charts to see what unbiased messages they are signalling. We start with the Dow Jones:

Dow Jones Industrial Average

Firstly we look at a Four Hour chart below just to signify the range that we’ve been in for nearly a month:

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As you can see the market has been ranging whilst producing some volatile moves but no clear cut direction on the long term context of things has been decided by the Dow Jones.

Below you can see a daily chart:

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The red intersecting channel shows where this range is actually coming from. The SIGNIFICANT thing to note is that the market is showing problems at the same area on both timeframes. Whilst the short term timeframe shows problems at current prices and upwards to 10330 the daily also shows problems in the same area with the red intersecting channel.

However the major recognition that needs to be absorbed is the 10400ish mark. The short term timeframe shows the area will produce problems as the channel widens. Look at the daily chart ‘dark maroon line’ which ALSO shows problems at the same area.

Both charts show differing timeframes, both have different unbiased technical analysis painted over them and uniquely both flag up the same area of concern using varying analysis.

So for the week ahead the 10400 mark may be too tall for the market to reach and if we do get to it then THIS is the mark that the market must KILL in order to see higher prices. If the market moves higher then this mark, then you have to admit the case for back to the highs or new highs for 2010 would come alive, just as we’ve been saying.

When the market hit 11200 we stuck our neck out at the time and labelled it as THE high in which we stated prices should start to decline from here. BUT many pundits, analysts, commentators and traders simply forget some basic elements. When tops and bottoms are formed prices RARELY, in fact hardly ever react straight from there to produce ultimate tops and bottoms. The tops and bottoms are formed; markets produce them as a ‘formation’. When these formations take place for tops and bottoms markets can go back to the highs/lows or reach near to the highs/lows or simply take them but only as part of the formation. So whilst the prices of 11200 is a high for 2010 you cannot say it is the HIGH as at this moment in time it is fair to say the price action is in a formation phase of this long term top in the making which means back to the highs or near the highs or new marginal highs cannot be ruled out.

In conclusion though the market may face a tough time even reaching 10400ish let alone taking it out and in which case the range may last longer before we have a chance to spurt higher. All eyes on this area as failure leads to more range bound activity whilst conquering it could take us back to the highs.

Crude Oil

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The chart above is a weekly chart, so it’s a longer term chart and it gives some real clarity! Oil must hold at or near its recent lows in order to avoid a deeper decline to $60 or $55 something which will only happen if the decline in stock markets deepens! Holding at these levels or even if a quick v-shape move occurs to $60 we feel that in 2010 for the price of Oil you simply cannot avoid talking about $90-$100! Sounds like lofty prices but it is easily achievable this year! However it’s not plain sailing at present as the lower blue line must be taken out in which TMS feels the price of Crude would head back to the 2010 highs and even higher.

Euro

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Again for the Euro we’ve used a weekly chart as the short term direction has been clear recently. However the green line shows how we could be in a bottom making phase, in which a lower low could occur but the formation of bottom making, could still stick. It’s important for the market to regain 126 as that would make the Euro overall bullish in which a sharp oversold move would take us back to the 135 level! The blue line has been hit frequently over the past three years and TMS feels we haven’t seen the last of it yet.

Of course the green support line must hold otherwise vacuum opens up, in which we would travel straight to 113 and if that folds then for sure you’ll see 1:1 to the dollar.

Sterling

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Once again we’ve used another weekly chart for the Sterling to view the situation at play. The Sterling has been trying to make some progress over the last few weeks as it tries to edge somewhat higher from around 14250 but ironically on the weekly chart it appears as nothing more than a dot as the Sterling clearly trades in range bound movements.

The United Kingdom is in a dire state and the nation holds uncertainty over its actual size of the deficit and the measures that will be used to tackle it not to forget its effectiveness or lack of it. On top of that inflation figures are flawed as governments have been known to gloss them up to paint a differing picture from the actual high inflation that the public suffers from. On top of that, we have a housing market, which is currently witnessing a ‘dead cat bounce’ in which the projected collapse of it, has simply not taken motion YET! This would start to batter the Sterling even more in which 1:1 will likely be seen at some stage over the next few years.

Fundamentals however can get one more emotional then technical’s and that is why we prefer to react to price. In which case the recent lows are holding and until they hold, 135 won’t come into play. Folding them would take us to the level directly! Holding that, doesn’t necessarily mean, that the Sterling is safe as the orange lines are giving two problems on the weekly chart. A declining orange line that must be overcome AND a range bound orange line that must be overcome! Until both cannot be conquered the longer term scenario will remain range bound to lower price action over the coming years.

Short term it’s a different ball game all together, the dynamics are different, the targets are different, the expectations are different, as you’re not bothered about long term price objectives in day to day trading although overall any trader should respect long term price action, and it’s always good to recap long term action regularly as some critical levels interrelate within timeframes.

GOLD

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Whilst analysts, traders and commentators across the globe are looking at long term projections for gold we thought we’d look at the short term scenario at play and for this insight we’ve used the four hour chart which is supreme at depicting short term movements in Gold.

First of all you don’t have to be a rocket scientist to understand that Gold has a short term issue with 1250! For us at TMS it is plain and simple, if we get a four hour close above this mark then we would be very surprised, if momentum, doesn’t carry the price to 1300 – direct move!

However it is also not hard to see why the recent attempt on 1250 failed as the purple line shows it’s alignment with this level. The blue line provided very short term support but the green line is the short term four hour trend holder. If this line is taken out with a four hour close then we would feel gold would travel straight to 1200 and lower for a corrective phase OR a deepened pullback in which the euphoria would start to be questioned by the media but the contrarian would be ready to BUY BUY and BUY some more for the longer term activities.

I am Ajit Singh, the writer of this article who started work with the financial markets from a very young age of 17, even though it wasn’t legal and WE are www.tradingmarketsignals.com – ‘TMS’.

If you like what you read and would like to gain insight on position trading style signals on five major markets. Or perhaps you want to add clarity to your short term trading with our signals which are fired via email and soon possibly by a live chat room platform, then this would be the best time to join us with our annual membership offer that unfortunately expires on 14th June 2010, in line with the U.S. stock market close on Monday.

http://tradingmarketsignals.com/#/flash-crash-price/4540799314

Until next time, remember:

Trading Market Signals
…the hub of unbiased technical analysis!

I think we are at a substantial support area on the euro.  Economist such as Robert Prechter and Jim Rogers agree.  My reasons are purely technical as this long term chart is fairly obvious.  A bounce to $1.25 would seem completely reasonable to me.  In the grand scheme of things, that is not very much.

The last time the euro was at 1.25 was on May 24, and the $SPX was around 1090 which is where we are today.  A bounce in the euro here could push the $SPX back upwards towards 1140.

I did say towards 1140, but I doubt we get there.  I took long positions last week in FAS, JJG, and TNA which are doing well.  I practice safe trading rules, which means they are all protected with stops.  My profits are locked in, and we have already reached my first target, yet the euro has yet to break out above 1.21.  I see two targets ahead.  1109 which is the first gap fill, and 1130 which would be the descending resistance line since this sell off began in late March.

As we pass through 1090 and 1109 I will tighten my stops, and expect to be out if not completely short by 1130.

We obtained 647 points in a few days trading. Read this two part article below:

PART1 9^th June 2010

This article will present to you how members gained today with tradingmarketsignals.com in which four signals on the Dow Jones, Eur/usd, Gbp/usd and Crude Oil were provided. THE TOTAL WAS 230 POINTS! Read on…

Tradingmarketsignals.com is evolving in a big way and with it we’re looking to introduce further new areas such as a live trading room.  The current method of email signals is producing phenomenal success for current members. We’re getting phenomenal feedback from traders who actually want signals AND want to learn to trade for themselves. Therefore another new section will consist of pure unbiased charts which members will have access to new charts every single day and with it the charts will show clearly where too pounce on Long or Short entries.

Thousands and thousands reading our articles in which we have demonstrated the way we view the markets with such precision but with also such ease. Many of you have taken advantage from what you’ve read and now have come on board in which you’re enhancing your basket of success further. But for those of you who are wandering what all the fuss is about well we have the following charts and TMS system signals that went out today in which hours later traders had the weeks work done even though we’ve got more to gain from the rest of the week as today it’s only Wednesday!

Dow Signal – A quick 50 pointer today!

This chart was provided preciously in which we stated the market must decide which channel it is sitting in the wider red channel or the channel that is made with the faint pink line. Also not that after the action has taken place the chart on the right has the pink line place higher as although the market did not ‘stay’ in this channel it is now finding resistance to it!

You also need to note the 10000 level which is the pivot level for the past few weeks. As you can see the market is clearly hovering above it and under with no clear break in mind.

So what did we do today with the Dow Jones?

Well we sent out this signal via email:

TMS system is firing an additional long on the Dow Jones should we get a 15 minute candle close above 10000. 

Please note we had already taken a ride up with a buy signal at 9858. But the following chart shows what the quick signal above was all about and how it produced a gain of 50 points in just 30 minutes and why was it time to get out before the quick turnaround later in the day:

So we got a close above 10000 at 10008 with a 15 minute candle and members went long at 10008. The danger kicked in as the indicator at the bottom flagged the turn so 30 minutes an easy 50 points was made!

GBP.USD Signal – A quick 60 pointer!

This was the signal sent via email to members:

TMS system is firing another long at 14538 for the GBP which should be exited for a quick move at a max of 100 points. Original signal is still long from way below!

Of course the system fired the signal as we got an hourly close above the green resistance line at 14538. Four Hours later the trade produced a quick 60 points as the indicator at the bottom issued a danger flag; EUR.USD Signal – A quick 30 pointer!

The following TMS system signal was emailed to members:

If the Euro closes above 12020 on the hourly candles the TMS system is to fire another long signal and again this signal will be for a quick move, please exit in line with your satisfaction of the gains and your risk appetite. 50 to 100 points would be nice.

Again the trade triggered as we got an hourly close above 12020 at 12038 which was the long signal. Soon after the move was rapidly exhausted and our indicator along the bottom gave the red flag to get out in which 30 points was gained.

Crude Oil Signal – A quick 90 Pointer!

The following signal was emailed to members today:
 

TMS system will be long on Crude Oil should we get a 30 minute candle close above $7350.

However TMS system may prompt a short after this long signal should price reach near the levels of $75. In which case you should look to take quick gains should the long signal be triggered and wait for more news on the short signal...
 

You just won’t get much more clarity then this anywhere! The long was triggered at $74 and the red flag with the indicator was given at $75 not to forget that the signal email also stated a $75 warning. A nice quick and easy 90 points! Not bad at all...

230 points in one day with a few hours vision all presented by tradingmarketsignals.com!

T.M.S - We deal with the markets by winning!

As we’re locking the doors to our annual membership on Monday June 14th 2010 this is why you should join! 647 Points in two days!!!!! ......that’s not including buying at the lows for all markets all week!

Part 2 - 10th & 11th June 2010

In our previous article we showed you precisely how we dealt with the markets on Wednesday and quickly turned over 230 points! Well Thursday(Entry)/Friday(Exit) was NO DIFFERENT - We turned 417 POINTS! No doubt should the systems address potential for Friday then we will be in the markets again robbing points!

In addition to Wednesday, Thursday & Friday we bought the dips in all markets as we informed members last week’s declines won’t stick and 10000+ Dow and Euro 120+ will be back this week and here you have it! Members also made gains from our daily commentary notes!

Our current members are simply in a sublime state of happiness!  Perhaps you want to start learning how to trade professionally? Perhaps you need to admit that you’re simply no good alone as so far your journey hasn’t provided you with the correct approach and information? Maybe you need to build your confidence and can’t pull the entry and exit triggers? Whatever your agenda I will personally make sure our team holds your hand so that we can make you obtain one prime aim from trading: CONSISTENCY!

Here are yesterday’s signals that went out to members:
Dow Jones – 50 points

TMS is still long from 9858 on the Dow Jones.

However for the short term trade TMS system is firing a short signal on the Dow at 10125. This signal is for a quick gain and a 100 point move would be nice.
Kind Regards

TMS
 
Crude Oil – 236 points 
TMS system is now short on Crude Oil at $7612. We will be looking for a quick move down as the rise is signalling to be stretched.
Kind Regards
TMS
GBP/USD – 131 points
TMS system is now short the GBP/USD @ 14666.
This along with the Dow and Crude are short term signals and do not cancel out previous position signals.
The last part of the signal above was mentioned as we’ve been long the GBP.USD from 14260!!!
At virtually $19 per month the annual subscription is ending on Monday 14th June 2010. New members will only be able to come on board at a monthly rate of $74 per month. The doors will close to the public for this new intake once 200 members have joined. 
We leave you with the following Dow Jones Chart:

As you can see we nailed the recent decline with the light blue line pattern shown. All the orange circles represent where the significant resistance is and it is this simple: if we can take the orange circle/upper red channel line out then we will go back to the highs of 2010!
For now though the market doesn’t need to go to that level and certainly doesn’t need to test it to start a decline from here! Remember 10200? You probably don’t but here it is: The yellow circles show you the previous problems we’ve had with it and whilst everyone may anticipate a further rise to the orange area we can simply fail at this current yellow circle/ blue resistance lines!
The green line is the pivot of this channel and it sits at roughly 10000. Should we pullback from here then the pivot line coupled with the dark red circles may be an area where the market finds support and twice this line has provided support and twice it has provided resistance so clearly we have some reactions as can be seen by the dark red circles!
If you like what you read and fed up of trading the wrong way then you can join us now but please remember the ANNUAL MEMBERSHIP expires on MONDAY after which new members will only be able to join on a month to month basis:
http://tradingmarketsignals.com/#/flash-crash-price/4540799314
It’s the best time to join Tradingmarketsignals.com and at the best rate as the annual membership of $225 ends on 14th Junes 2010 after which new members can obtain monthly membership at $74 per month.
We obtained 647 points in a couple of days.
Until next time, remember:
Trading Market Signals

 ...the hub of unbiased technical analysis!
PS. Do you want to ask us any questions? Email: info@tradingmarketsignals.com
 

US Dollar Index – Daily Chart

The past two months the dollar as been in rally mode. The last 14 days we have seen a large bullish pennant form and this pattern typically marks the half way point for the current tend. The measured move for the USD is pointing to 93 over the next few months.

Gold Futures Prices – Daily Chart

Gold as we all know is seen as the major safe haven and the price per ounce has been steadily climbing. Friday we saw the major indexes sell down very hard but both the dollar and gold posted some solid gains. Gold does looks as though it needs some time to digest the recent move higher and this could take a week or two before anything exciting happens but I am on the lookout for low risk setups.

VIX – Volatility Index – 60 Minute Chart

This index measures the fear in the market. When fear is high and everyone is selling their positions we see the VIX jump in price. Over the past month we can see a possible Head & Shoulders pattern forming. If this pattern unfolds like it should then we will see the price of equities bottom in the coming week with the VIX dropping below the blue neckline. The old saying is “When the VIX is High is time to Buy, when the VIX is low its time to Go”.

Put Call Ratio – 60 Minute Chart

In short, when the put/call ration is over 1.00 then there are more traders/investors buying Put Options than Call Options. Put options are when people are buying leverage to take advantage of lower prices. My thought/opinion about this is when more people are trading with leverage anticipating lower prices, I figure they have sold all their long positions and are now using leverage to profit from lower prices. Well if the majority of individuals have sold everything then in reality there should not be much left to be sold… So I feel this correction which started in April is almost finished.

NYSE Advance/Decline Line – 60 Minute Chart

This is one of my favorite charts to look at. While there are several indicators, market internals and technical analysis needed to clearly determine if the market is currently overbought or oversold, this chart is one that can help give you a good idea if you should be looking to buy, short or just stay in cash for the time being.

SP500 Futures Prices- 2 Hour Chart

The SP500 has been up and down like a yoyo with some very dramatic moves. Up 2+% day down 2+% the next… very sharp and powerful moves can be both every profitable or costly if not traded correctly. Last week we caught a nice 2% gain in less than 24 hours which was an exciting trade. It looked at though the market was about to breakout to the upside and possibly reach the 1150 level but early Friday morning there were rumors about some Euro bank having serious problems and that was just enough to cause a domino effect sending the market lower throughout the entire session closing on a very strong negative note for the day/week.

That being said the market internals are indicating that equities are oversold at these current prices and a bounce is due any time. With the panic selling on the NYSE Friday reaching 119 sell orders for every 1 buy order I think we will see some follow through next week with lower prices, then a rebound once investors finish selling everything they own at which point we will be looking to get involved again.

Weekly Trading Conclusion:

In short, money continues to flow into the safe havens (Gold & US Dollar). The major indices are showing extreme panic selling and look ready to in the next few days. There is a possibility that the market could break down and start another major leg lower which is a big concern to me. I will be glued to the market internals and support levels for the major commodities and equity sectors in hopes to catch the bottom or to avoid another melt down.

If you would like to receive my Daily Pre-Market Videos and Trading Alerts please checkout my website at: www.FuturesTradingSignals.com.

Market Update: The Euro for the BULLS or BEARS?

In December 2009 the Euro was at lofty levels of 151 – 6 months later we’re virtually at 121. What does this mean for where the price may head right now in June? Absolutely NOTHING!

For us at Trading Market Signals the path seems clear – the unbiased technical approach shows this illustrated in simplistic form:

As you can see we’re currently whipping in a range bound environment and whilst the direction too many may not seem crystal clear, one thing is screaming out loudly to us from the chart above – A BIG MOVE is on the cards. You may think we’re done with the action for 2010 in term of the Euro but for us the fun is just about to kick in.

We have some short term trigger lines which can be seen in orange. It also displays how the bears are selling into this line – But you have to think in unbiased fashion and ask yourself; is it now the time to buy against the line?

Buy at the trigger lines and gain control in Bull Land and we’ll surely head higher towards 130 to 135 with ease.

Sell at the trigger lines and if the Bulls decide to kill this dry then surely 113 will come alive with ease.

Strike it with us at Trading Market Signals.

Market Update: Dow Jones Industrial Average

The market is trying to form a base even after Friday’s and Tuesday declines. The question is do we get a new low for 2010 before the rally commences. Should this occur then the decline will not be expected to come across in vicious fashion as the red channel line should support the market.

Many market associates are likely calling for the top to be already in place and that is why we have to re-evaluate this scenario. At trading market signals it seems likely to us that prices will remain range bound whilst moving in upward fashion. At this moment in time it’s hard to see the current range of 2010 being expanded by much and therefore any new low would although be scary for many, it would represent a terrific buy in our opinion. 10258 – 10352 is the area that will continue to cause the market problems and for any further upside to be considered the resistance range would need to be destroyed. Holding 10000 will technically show up as an inverse head and shoulders. Further support marks are sitting at 9900 and 9800, whilst any new low touches of the red line should provide further support.

At trading market signals the technical picture changes just as the scenarios on the road change whilst a driver is driving a car. A driver must adjust to various scenarios and a trader must also remain technically unbiased so that optimum results can be achieved. In fairness the price on the side will always simply be a number. Don’t get emotionally attached as to what the value will be as the primary and sole aim should be to trade the markets. If you want to trade and learn the best way to strike the markets then come and join us. The Dow Jones hitting 9000 or 11,000 has no significant bearing on being able to obtain gains from the market as if the trend changes, so do we.

At TMS we’re not a forum based website; fortunately this is not a place for idol gossip. Trading market signals will provide you with the unbiased direction you’re trading requires. TMS will be closing its doors to retail members later this year. Institutional traders have become a major part of our membership and we’re looking forward to making them our focus.

Retail traders can join at the special rate below which is not available via our website;

http://tradingmarketsignals.com/#/flash-crash-price/4540799314

Obtain technical analysis commentary like no other with critical market charts and TMS signals that netted 15377 points in 2009 on the five major markets we follow: Dow Jones, GBP.USD, EUR.USD, Crude Oil and FTSE100.

Until next time, remember:

Trading Market Signals
…the hub of unbiased technical analysis!

It has been an interesting week in the market as stocks and commodities push to extreme support levels. Below I have posted some charts showing where the market is currently trading at and what I think is likely to unfold.

Gold Futures – 4 Hour Candle Stick Chart

The price of Gold is testing a key support level. I figure we will see gold try to stabilize over the next week or so as it digests the recent drop in value then start to head back up.

US Dollar Index – 60 Minute Candle Stick Chart

The US Dollar and gold have been moving together the past few weeks as more countries pop up on the radar for serious financial issues. This is helping to boost both the US Dollar and gold as investors around the world starting buying what seems to be safety. The dollar has had a sizable pullback and is now testing a key support level.

This could be the start of a possible Head & Shoulders pattern forming which means the dollar rally could be nearing maturity in the next couple weeks.

Crude Oil Futures – Daily Trading Chart

Oil has been under serious selling pressure because of the rising USD. It has now dropped to a key support level and is starting to look very interesting. If the US Dollar bounces in the next week or two it will keep downward pressure on oil. I think this bottom is going to be a process not a one day event.

SP500 – Daily Trading Chart

Stocks have been under dropping like flies the past few weeks and shorting the SP500 last week at 1170 has played out very nicely for members. The broad market is giving me mixed signals and when I am unsure of a trade I stand on the sidelines. It’s always better to sit in cash and watch things stabilize than it is to watch your hard earned money evaporate. We could see a wave of panic selling in the stock indexes testing the previous lows so be cautious.

Mid-Week Stock & Commodity Trading Report Conclusion:

In short, I feel gold and the dollar will bounce in the coming days from their support levels. This will keep pressure on oil & the SP500 holding them down near support. Once the US Dollar forms a possible right shoulder we will most likely see them pop and rally.

We are still 7 trading days away from a cycle low on the broad market making this scenario very likely to play out. At the moment I am getting a lot of mixed signals and during times like this I prefer to stay in cash because volatility will rise and it is easy to get shaken out of trades.

If you would like to get my Real-Time Trading Signals & Setups checkout my services at www.TheTechnicalTraders.com.

The massive 200-pip jump in EURCHF in less than 10 minutes (13:00-13:10 BST) is the work of no other than the Swiss National Bank intervening to sell its own currency. But the 80-90 pip jump in EURUSD must also be the work of European banks intervening on behalf of the ECB to boost the ailing euro. The events of the last 2 weeks imply that coordinated central bank intervention is possible. If it took 2 days for the ECB’s to make an about turn on bond-purchases and for Berlin to institute a ban on naked shorts, then the prospects for intervention are very plausible. If neither the IMF/EU/ECB plan nor the Berlin announcement succeeded in alleviating selling on the single currency, coordinated central bank intervention must be utilized to at least slowdown the pace of the decline. While this is unlikely to reverse the slide in the euro, it will help resurrect a 2-way market in the currency and slow down the damage.

Euro Longs to Remain Naked

Unless the German ban on naked CDS shorts is instituted on a European or global level, its effectiveness will come up short. Unlike equity markets, credit default swaps are traded privately, and not on exchanges. And the fact that the bulk of these markets are in NY, the German ban will do little to prevent shorts from trading outside German shores. Also, according to the Deposit Trust & Clearing Corp (CDS clearing agency), outstanding CDS on most Eurozone sovereign debt does makes up less than 10% of the entire CDS market, estimated at $11 trillion. Chancellor Merkel’s unilateral ban is an ad-hoc measure that partly aims at containing her declining popularity following her Party’s defeat at last week’s regional election. Unless similar measures are adopted by the France, UK and US, these will prove to be no more than desperate politicians waging a losing war against speculators.

High Yielder, Highest Loser Down Under

It is NOT the euro that is the biggest loser since Tuesday’s close, but the Aussie, followed by the Kiwi and the Swedish Krone. The Aussie falls victim to its own success of higher yields, which are especially under scrutiny after the RBA hinted at a pause in its tightening cycle two weeks ago. We warned in our May 11th piece “Endangered Aussie Carry” that the latest sell-off in global equities has begun to unwind one of the few remaining carry trades in the non-emerging market FX space; AUDUSD and AUDJPY drop 3.8% and 5.4% respectively.

The technical significance of last night’s break below 0.8580 implies further selling of another 5% from current levels. The 0.8580 low was held in Sep-Oct 2009 as well as in Feb 2010. Last night’s failure implies a decline to as low as 0.80 and 0.78, especially if no close above 0.86 is attained this week.

Gold vs. other Commodities

Gold is finally responding to a broad sell-off in commodities. This was not the case on May 6 when the 9% intraday plunge in equities saw gold shrug off selling in copper, crude and natgas. The latest 24-hours are seeing less resiliency in gold, as the risk of deteriorating equities could force some managers into selling their winners (accumulated gold gains) to meet their widening gains. If the aforementioned suspicions of coordinated euro buying by the central banks are confirmed, traders could begin unwinding of their GOLD/EUR shorts, thereby, exacerbating the recent selling in GOLD against other currencies. Gold drops 3% against EUR from its €1,010 record high. Further pullback towards €960s could call up $1,165-70, followed by $1,120.

Are the markets manipulated ? Are they ?

You have been repeatedly told by those that clearly don’t immerse themselves in trading on a regular basis that they are not manipulated instead the movements are a function of some ordered theory that implies certainty of outcome when all one can do in reality is to conclude towards a probability of outcome that are usually little better than 60/40, well on the 6th everyone got the answer that they should imprint into their memories that the markets REALLY ARE manipulated. If your going to learn one lesson from 2010 then let that be the lesson learned. Contemplate on it, let it sink in, let it skew how you interpret price action and maybe you too can join in on future market manipulations!

Stock market volatility soars, the Flash Bounce follows the Flash Crash, the manipulated markets are not giving investors and traders time to react as the dark pools of capital continue to rake in huge profits by circumventing official exchanges such as the NYSE which if my memory is correct ALREADY HAS CIRCUIT BREAKERS that should have STOPPED the CRASH in its track so why didn’t it ?

Obviously, because far more trading of shares and their derivatives is taking place between the Dark Pools of capital OFF of the exchanges, which is ideal for a manipulators paradise. It will be interesting to see how high this months Goldman Sachs profits will leap after the 1st quarter having generated $25 million of profit EVERY DAY!

So, yes the markets are manipulated, though that is nothing new as all human activity involves manipulation of our environment to one degree or another where any mechanisms put into place to limit human manipulation are soon circumvented, we are a species of manipulators, we live in highly manipulated cities that are completely distant from the environment of the natural world, so don’t waste time going look for reasons of why the flash crash happened or crying about it, instead look for the finger prints for future market manipulation’s that show their hand ONLY in the price charts! Not anywhere else! (more on the flash crash here – 09 May 2010 – Don’t Blink Or You Will Miss The Stock Market Crash!)

Therefore this third bi-monthly in-depth analysis of the stock market for 2010, posted on Sunday 16th May (ensure you are subscribed to my ALWAYS FREE newsletter to get these and my weekly updates in your email in box) will again attempt to do the near ‘impossible’ by concluding towards a forecast trend projection for the stock market for the next 2 months, a tough task when considering today’s volatile flash crashing market environment, where it has become even difficult to project what the market will do in the next hour let alone 2 months forward!

UK Election Politicking is Over

The electorate has had their vote and settled upon a ConDem coalition government that will probably go up in smoke within 12 months under the weight of public anger at the cuts and tax rises that are about to hit the populous (not forgetting soaring inflation!).

Now it is time for the markets to vote, and they have sent sterling and UK stocks sharply lower. Though this should work to the advantage of UK investors in the mega caps as a weak sterling means the UK’s big export based corporations should see their share prices outperform. The only question remains is to what extent will the ConDem government seek to bleed the corporate’s much as the Australian Government’s tax on resources is bleeding the mega miners.

British Pound Following the Euro Lower

Sterling at £/$1.45 remains firmly on track to achieve its forecast sub £/$1.40 low (26 Dec 2009 – British Pound GBP Forecast 2010 Targets Drop to Below £/$1.40) now probably within the next 2 weeks, the specific support target lies at £/$ 1.37. I will seek to update sterling and as part of my in-depth update for the U.S. Dollar bull market later this month.

1. That sterling is targeting immediate support at £/$1.57 which implies it may temporarily bounce from there back through £/$1.60 before the eventual break.

2. That a break below £/$1.57 would target a trend to below £/$1.40. On a longer term view, the chart is indicative of trading range between £/$1.57 and £/$1.37, on anticipation of the eventual break of £/$1.57. On average this implies a 10% sterling deprecation against the trend of the preceding 6 months or so.

German Euro Gravy Train is Over

Germany has benefited hugely at the expense of other Eurozone countries over the past decade as it’s highly competitive industry had a captured euro-zone market to export to that the other countries could not devalue against. German exports were further boosted by a weak euro that enabled global exports to be maintained, however all of these small eurozone countries are now risk imploding and are lining up for a German and French handouts, the only sustainable answer to which is for the Eurozone to split into two as I speculated upon early in the week – (11 May 2010 – E.U. $1 Trillion Bailout, Detonates Nuclear Option of Printing Money to Monetize PIGS Debt).

Financing albeit shrinking annual PIGS deficits over the next few years will still mean that ALL of these countries debt burdens will be HIGHER in 3 years time, i.e. Greece’s debt burden is expected to rise from 120% of GDP to as high as 150% of GDP. How is that a solution for the debt crisis? How will that prevent eventual debt default ? Answer – It won’t!

The ONLY solution is for the Eurozone economies to GET their economic houses in order which means cut the deficits and total debt as a % of GDP which can only be achieved through economic growth which means public sector spending cuts and reform of economies to generate economic growth that means LESS E.U. and national regulation as touched up on in the article Solving Britain’s Economic Crisis Through Micro Business Capital Investments and Credit (31st Mar 2010). However when a country has a debt burden of 120%+ of GDP at interest rates of 5% or higher the inevitable result is still debt default.

EURO II ?

This, first of a series of money printing debt monetization bailouts puts the Euro firmly on a trend towards high inflation as are all fiat currencies, i.e. the fundamentals of the Euro block composed of many small weak economies that cannot devalue internally against highly competitive strong economies will still remain. The only possible solution is for a Euro II, i.e. split the Euro into two currency blocks one for the weak that suffer higher inflation and interest rates and the more competitive countries as part of the Euro II block (could just be Germany on its own?) which would act as a safety valve in times of economic crisis that demands internal currency devaluations.

The Euro Bailout is to pile more debt on top of existing debt which amounts to just being temporary sticking plaster that will eventually give way to the inevitable. At the end of the day countries such as Greece, Portugal and Spain and maybe several others will default on their debts, they have no choice, NONE ! With debt at 150% of GDP the interest payments cannot be serviced even at artificially low interest rates of 4%-5% let alone any repayments entertained. which means the bailout is effectively dumping Greek and other PIGS debt onto German and French tax payers. The strategy appears to be for Germany and France to buy some time to erect a firewall between themselves, their banks and future euro-zone debt defaulters.

A big step in creating such a firewall would be for the Euro to split into two with Germany and France and maybe a few others in Euro II, which would allow all the other bankrupting euro-zone states to competitively devalue, print money and set more appropriate interest rates as they attempt to INFLATE their economies and off course default in a more orderly manner with less fallout to the core Eurozone members.

In the meantime Greeks continue to riot, perhaps given their long history and having given genesis to many of the academic institutions that are now trying to force their economic theory of what should be done, Greeks are fully aware that the likes of the IMF and E.U. are totally clueless when it comes to doing the right thing, which is evident in the fact that countries such as the United States, Germany, France and Britain have done the EXACT opposite to that which the IMF says they should have done!

Dangerous Democracy

Another factor that seems to have escaped the mainstream press is that hated governments with hated austerity policies tend to get thrown out of power and replaced with more financially inept governments that offer to take the pain away. Which suggests that if there isn’t a Euro II sooner rather than later then the Greeks and other PIGS may vote in governments that force the European Union’s hand by unilaterally exiting the Euro and defaulting on their debts as there exists a greater preference to swim in the warm inflationary waters of the Meditarian than freeze to death in an icy deflationary imploding economy as Germany requires them to do as a consequence of the Eurozone bailout.

The bottom line is that the ECB has chosen to sacrifice the Euro by joining the rest of the central bankers money printing club, the ultimate consequences of which is inflationary and not deflationary as illustrated by the 100 page Inflation Mega-Trend Ebook (FREE Download NOW)

Implications for Stock Markets – The markets have voted with a big thumbs down to the bailout which is evidenced by the Euro closing at just 123.30 instead of 130 where it had rallied to on the announcement, it clearly has a lot further lower to go. Bailouts sap life out of the private sector that are the engines for economic growth as the cost of the bailouts are dumped onto tax payers of the more competitive countries, this will undoubtedly eventually impact on the corporations of the eurozone which is discounted in the present, against this is balanced the depreciation in the euro therefore benefits those corporations that export to outside the euro-zone. A eurozone in slow motion collapse is not good for bullish stock market sentiment but there are stocks and sectors that will benefit from their dollar earnings boost.

Stock Market Trend Against Forecast and Expectations

A quick recap of the two in depth analysis of the year to date and the most recent short-term update:

02 Feb 2010 – Stocks Stealth Bull Market Trend Forecast For 2010 - The Inflation Mega-Trend Ebook Page 82 (DIRECT Download)

Dow 10,067 – Stocks Multi-year Bull Market that bottomed in March 2009 will trend Sideways during first half of 2010 attempting to break higher. The second half will see a strong rally to above 12,000 targeting 12,500 during late 2010.

DOW Stock Market Forecast 2010

23 Mar 2010 – Stocks Stealth Bull Market Trend Forecast Into May 2010

Dow (DJIA) March to May Stock Market Trend Forecast Conclusion – Therefore my specific conclusion is for a continuation of the uptrend into early to mid May, achieving the 12,000 target during this time period, also allowing for a correction during April.

Weekly Newsletter Update – 02 May 2010 – Greece Debt Crisis Storm Cripples Stock Market Rally Resulting Stock Price Churn

The stock market ended the week weak at 11,008, barely clinging on to its uptrend as of February 2010. The SELL trigger is less than 40 points away at 10,970. The trend is choppy and volatile that looks likely to continue.

My trend expectations by the 23rd of March 2009 had converged towards a strong bull run into early to Mid May 2010 to target 12,000 before a significant correction took place i.e. an acceleration of the trend off of the early Feb low that had lifted the Dow to 10,830 after it cleared the 50% axis at 10,333. The trend continued to a high of 11,258 by early April before stalling.

The market was hit by a series of debt crisis shock waves out of Europe which had the effect of eroding the time left for the rally to be achieved all the way into early May 2009 when my quick update (02 May 2010 – Greece Debt Crisis Storm Cripples Stock Market Rally Resulting Stock Price Churn) concluded that the market had just about run out of time and was hanging on to the uptrend by its finger nails within a few points of the SELL TRIGGER at 10,970, the rally to that point had not triggered any of the sell triggers mentioned during the bull run from late February 2010 to the 2nd of May.

The sell signal was triggered on 4th May with the break below 10,970, followed by the Second Sell Trigger on the 5th of May on break below 10,830 which targeted 10,750 and then 10,550 and then along came Mr Flash Crash on Thursday the 6th which I covered in last weeks update (09 May 2010 – Don’t Blink Or You Will Miss The Stock Market Crash!), which placed the Dow in a trading range of 10,300 to 10,600 pending a short-term breakout, that resulted in a recovery high to 10,920, with last Fridays close leaving the Dow at 10,620.

The Dow is clearly showing relative weakness against trend expectations, which reinforces expectations of the Dow entering into a trading range rather then any serious attempt at breaking higher in the immediate future.

Market Psychology – The Flash Crash sent shockwave’s through the market that will last infinitely longer than its 30 minute duration. Clearly the bulls were shocked that the value of their portfolios can out of the blue go up in smoke within a matter of minutes. The bears who had been betting and losing against the stocks bull market as a consequence of their Bear market rally mantra who’s end was always imminent were nearly equally as shocked, in that after all the expectations and losses to date when the sell off actually materialised they weren’t given any time to act on it to monetize on the drop! as it came and went within a blink of an eye, which I have to say I find pretty amusing

As mentioned earlier, bullish sentiment is also further eroded as a consequence of the Eurozone panic where investors are now having to contemplate the unthinkable i.e. a break-up of the Euro, which whilst it may be good for the long-term, is not so good for stock trends for the balance of 2010.

As things stand, market sentiment wise the upper hand is clearly with the bears who despite being wary of being wrong on calling the end of the bull market or bear market rally again, will clearly grow louder in their assertion that yes this time it really is it especially as the Dow revisits the Flash Crash low area.

Implications for stock trend – It implies that the bulls are less eager to buy and the bears are more eager to short. Which does not support an imminent run to new stock market highs, rather an assault on recent flash crash low as being highly probable.

ELLIOTT WAVE THEORY – The EWT pattern has concluded towards a 5th wave peak by early to Mid May as illustrated by the March 23rd 2010 Chart above. Which concludes in an EWT pattern that will seek to correct the whole bull market trend off of the March 2009 low i.e. the most significant correction to date. The normal EWT expectation is for an ABC pattern for a lower C low. Which on face value suggests a break of the 9,870 Flash Crash low, to complete the ABC pattern in advance of the resumption of the bull market trend higher.

TIME ANALYSIS – The current correction will seek to correct the preceding 14 month bull market. Previous corrections within the bull market corrected the preceding trend by approx 1/3rd i.e. the Jan to Feb 2010 and June to July 2009 corrections. This therefore suggest that the current correction could last over 4 months, taking the trend into Late September / Early October, which implies a prolonged period of stock price weakness.

Bear Market and the 1930′s Stock Price Chart Pattern – Every correction brings out these 1930 charts, is it this time ? After all it was not in January 2010 nor October 2009 before then nor August 2009 before. As ever the starting and end points are always moved to fit the price action. At the end of the day fitting past price charts onto the present ONLY works in hindsight and are totally worthless when it comes actually trying to determine and monetize on trends so plays no part in this analysis.

TREND ANALYSIS – The Dow started running out of steam at 11,200 as it entered the correction time window. The trend following that peak has been violently to the downside. This has made the trend extremely volatile which implies that one should continue to expect very large swings from day to day, as the Dow attempts to put in a bottom which at this point implies at the crash low of 9,870. The trend higher to 10,920 whilst strong, only sets the market up for a series of retests of the low.

INTERMARKETS – Whilst the Dow has marched to new highs for the bull market, China’s stock market became stuck in August 2009 and has since moved in a large sideways trading range for the past year between 3,400 and 2,500. The last close at 2696 puts the market near the low which is a sign of relative weakness and does not bode well for other major stock markets to push to new highs whilst China remains weak with a lot of resistance to overcome. Furthermore a break below 2,500 would deteriorate the picture still further, similar weak patterns are exhibiting in other asian markets. This therefore implies a trading range expectation for the Dow for probably longer than the next 2 months.

MARKET INTEREST RATES – The interbank LIBOR market is again showing signs of freezing up as investors dump Eurozone sovereign bonds for safer U.S. Bonds thus driving U.S. yields lower and currencies elsewhere lower. The banks are becoming wary of lending money to one another fearing the level of exposure amongst banks to the EURO!, this is just as occurred with subprime mortgage backed securities but on a much larger scale. This is the hidden story behind the Euro crisis as a Euro triggered interbank market freeze would be far worse than that which followed Lehman’s, which really could trigger a NEW BEAR MARKET. So it will be something that will eventually make it into the mainstream press if the interbank market does freeze again, its something no central bank including the U.S. Fed wants to happen.

This is going to directly feed into high stock market volatility that points to a trend towards the recent lows for stocks i.e. 9,870, probably sooner rather than later.

SUPPORT / RESISTANCE – Volatility has resulted in a wider range of support and resistance levels to keep focused on than has been the case for many months. Resistance lies at 10,920, 11,200 and then 11,260. Support is at 9800-9850. The wide range suggests that the Dow can be expected to continue to trade to both extremes of the immediate range of 10,920 and 9850 over the coming weeks. With the trend in the immediate future targeting the lower end of the range.

MOVING AVERAGES – The flash crash saw the Dow break the 200 day moving average, something that it has not done in nearly a year of the bull run. Furthermore the reactive bounce to 10,920 was more or less contained by the 50 day average. In the immediate future the 50 day acts as resistance and the 200 day acts as support. However I expect the 200 day to again easily give way and subsequently act as resistance which the Dow will need to overcome as it attempts to put in a bottom over the coming weeks.

PRICE TARGETS – Upside price targets resolve towards 11,260 and 11,900 to 12,000. Downside price targets resolve towards 9,800 to 9,850 and then 9,450.

MACD – The MACD is expected to hug the lower end of its range at -100 for the duration of the correction. Most recent activity suggests that Dow may be supported within the next few days for a weak trend higher over the coming weeks as MACD works out its oversold state in advance of another assault on the lows.

VOLATILITY – Market volatility as measured by the VIX spiked on Flash Crash day to 42. Current VIX at 31.24 remains elevated far beyond the sub 20 range of recent months, which is not supportive of an imminent stocks bull run. Usually a VIX of above 30 is supportive of downtrends, which implies immediate term stock market weakness, suggesting that the recent lows of 9872 / 10242 on the Dow are likely to be revisited. There’s also off course the risk of another 40+ volatility spike day so the key message is that of increased volatility following the steady bull run from the Feb lows into the late April peak.

VOLUME – Volume has remained WEAK throughout the rally, which has been one of the main reasons why so much commentary has been bearish during the past 12months. However it is perfectly inline with that of a stealth bull market and also implies that this rally has mostly not been bought into. Therefore I continue to expect heavier volume on the declines and lighter volume on the rallies.

SEASONAL TREND – Sell in May and Ago Away is here in force as elaborated in my March 23rd analysis. Weakness from a seasonal prospective could continue into September, with a possible low in early October followed by a sharp rally into December. Therefore the seasonal trend continues to match the actual chart trend. The Seasonal pattern is also virtually identical to Time Analysis.

PRESIDENT CYCLE YEAR 2- The impact of the 2nd year of the presidential cycle on the stock market is for a weak trend into September, and a rally in the fourth quarter into the end of the year for a small average gain for the year, which is starting to match the most probable outcome for the year.

Stock Market Conclusion

Despite the flash in the pan crash and prevailing Eurozone sovereign debt default gloom and doom, the bottom line is that this is still a stocks bull market with the Dow ONLY down less than 6% from its bull market peak. Therefore the sum of the above analysis concludes towards the stocks bull market under going its most significant and a highly volatile correction since its birth in March 2009 (15 Mar 2009 – Stealth Bull Market Follows Stocks Bear Market Bottom at Dow 6,470 ). This correction could last for several months and may extend all the way into early October, which suggests that the next 2 months are going to see an ABC correction to be followed by a sideways price action between the extremes of 10,900 to 9,800 and so despite continuing wild gyrations I would not be surprised if the Dow is little changed from its last closing price of 10,620 in 2 months time (16th July 2010). Expectations remain for the bull market to resume its trend towards a target of between 12k to 12.5k by late 2010 after the tumultuous trading period over the next few weeks. I have tried to illustrate a more precise Dow forecast projection in the below graph, reality will probably end up being far more volatile.

My next in-depth update will follow in about 2 months time with regular short weekly updates, so ensure your subscribed to my always free newsletter.

Risk to the Forecast – As indicated the support zone of 9,800 to 9850 should hold on repeated assaults, failure there would risk the Dow falling to just under 9,500 which would greatly weaken the scenario and prompt an in-depth update. The obvious trigger could be if European countries actually do start to default on their debts over the next 2 months which would result in a REAL stock market crash as we enter another Lehman’s style contagion event where governments are forced to bailout their respective banking sectors that can only result in an acceleration of the Inflation Mega-trend.

Gold and U.S. Dollar Inverse Trend Myth Busted

Do you hear the deafening silence amongst the U.S. Dollar doom merchants ? Remember when you were being repeatedly and relentlessly told that it was impossible for the U.S. Dollar and Gold to BOTH Rise together ?

It was either Gold will Soar, and the Dollar will Crash, or that the Dollar would rise and Gold would Crash, but never that Gold AND the Dollar would rise together.

Well that’s another market consensus myth well and truly busted, and there is little point now AFTER the fact, AFTER Gold and the Dollar have already risen to come to the realisation that okay Gold and the Dollar could rise together.

Gold is on track to achieve its forecast target of at least $1,333 this year (sooner rather than later), whilst it has traded to a new all time high in dollars, that’s nothing compared to the levels seen Gold soar to when priced in sterling and euro’s. My in depth analysis (02 Nov 2009 – Stocks, Dollar and Gold Bull Markets Inter-market Analysis ) concluded in strong bullish trends for Stocks (9,712), Gold ($1046) AND the U.S. Dollar (76.36), which prompted many emails and comments that my analysis must be wrong as there existed a strong consensus view that Gold, Stocks and the Dollar CANNOT Possibly ALL move in the same direction. Well more than 6 months on, that is another market consensus myth well and truly busted, with many now concluding AFTER THE FACT that perhaps Gold and the Dollar COULD both rise together after all, since which both Gold and the Dollar have appreciated markedly.

The US Dollar bull market has already achieved its long standing target of USD 84, and is on route towards resistance at 89 which I am sure will puzzle many americans reading this as they full well know of the huge amounts of debt that the U.S. Government is busy issuing to finance its own budget deficit, this is the advantage of having the worlds reserve currency and as a consequence of Countries such as the UK and Eurozone adopting panic measures to INFLATE their economies and DEVALUE their DEBT through competitive currency devaluations (See Inflation Mega-trend Ebook – FREE DOWNLOAD ). It increasingly looks like the U.S. Dollar far from crashing as many have iterated during its stealthy rise, may in fact just be getting warmed up for what is to come as the Euro targets PARITY to the Dollar Yes that’s right PARITY ! I will seek to update the U.S. Dollar bull market trend to cover the next 6 months within a week or so.

Your existing outside of the box analyst looking to pick-up cheap long-term investments during market panics.

By Nadeem Walayat

http://www.marketoracle.co.uk

The UK election politicking is over, Britain has a new ConDem government led by David Cameron of the Liberal Democrats and Nick Clegg of the Conservatives, or is the other way around, hard to tell these days.

The coalition government parties have publically locked themselves into a 5 year death embrace. They had no choice, as their honey moon period will soon evaporate as the government has no choice but to implement swinging spending cuts and mega-tax rises such as VAT to 20% to fill the 25% black hole between what the government spends and what it earns in revenue which will soon ensure that the ConDem government is destined to become the most hated government of the past 50 years!

The ConDem strategy is clearly to survive the painful years of 2010-2012 and then engineer an election boom into 2015. If the coalition disintegrates during the pain years then that would likely result in a Labour landslide victory.

The pressure is now completely off of Labour who succeeded in killing two birds with one stone (12 May 2010 – Gordon Brown Mission Accomplished, Labour General Election Plan a Magnificent Success). Labour are now FREE to go on the offensive and play mischief as their strategy is clearly to systematically rip the coalition government apart that I would be surprised if it does not disintegrate within a year. It is just not manifestly workable for a partnership between left wing and a right wing parties to survive.

Stock Market – The stock markets are flipping from one day to another from flash crash to flash bounce back to flash crash, it’s difficult enough to know what’s going to happen tomorrow let alone further out, still my Sunday’s newsletter will attempt to conclude towards a stock market forecast trend for the next 2 months.

Gold / Dollar

Gold and the dollar continued their bullish dance as a consequence of TREND.

British Pound

Ended the week weak at £/$1.45, still targeting a sub £/$1.40 low.

Euro Blood Bath

The Euro continued its slide right into the end of the week closing at 1.2358, down 10% in less than a month. My early week analysis (11 May 2010 – E.U. $1 Trillion Bailout, Detonates Nuclear Option of Printing Money to Monetize PIGS Debt) speculated that the most probable outcome is for the Euro splitting into two which basically means Germany would stand on its own.

EURO II ?

This, first of a series of money printing debt monetization bailouts puts the Euro firmly on a trend towards high inflation as are all fiat currencies, i.e. the fundamentals of the Euro block composed of many small weak economies that cannot devalue internally against highly competitive strong economies will still remain. The only possible solution is for a Euro II, i.e. split the Euro into two currency blocks one for the weak that suffer higher inflation and interest rates and the more competitive countries as part of the Euro II block (could just be Germany on its own?) which would act as a safety valve in times of economic crisis that demands internal currency devaluations.

Everyone’s dumping the Euro and European stocks, time for selective accumulation into Germany? Remember, Panic and Crisis breed opportunity!

By Nadeem Walayat