Tea Time Nova....

[YNWA]

Spot FX EUR/USD into the 127 territory....time to give us an update on the Earl Gray report man....the low down 'n dirty stuff...big reporting week ahead....is the depressed price of Thanksgiving Turkeys going to put pressure on the Turkish Lira??

[_nova]

Hiya YNWA. I got suckerpunched by that blerrie Citi announcement when the USD Index sommer drops a big number. Was short the EUR. VERY Recommended Tea Leaves: http://www.financialsense.com/fsu/editorials/russo/2008/1121.html There is a very real risk, supported by top grade technical analysis, that the USD Index will drop back to the lower 70's over the next 12 months (The Index is a pretty good directional indicator for the markets) and that's bearish for the USD and bullish for the markets. Both Elliot wave and Fibonacci analysis shows the USD Index is almost at a crucial turning point. The USD Index is now 86.63 and could still touch 90.02 the 0.382 fibo but then it's most likely path is straight down. This definitely supports the case for an extended bear market rally into next year. I suspect, from the Index's current behaviour, that the turning point is near

[YNWA]

...thanks my mate....two sugars, milk..... & a dozen cream 'n fresh strawberry erb scones for ya!

[_nova]

Mucho gracias Amigo. Ja I must say, I've been staring at the USD Index for some time now and was quite glad when I found this tech analysis by Joe Russo as it backed up my suspicions. While I'm a perma bear I'm also not stoopid and know when to back off. I think many other bears are also reading them bones and skoffling the tea leaves for mighty insights. Bottom line is that the chart patterns and oscillators favour a much weaker USD. On the monthly chart the RSI is overbought at 71.2 (It's only been over 70 on 4 occasions since 1996 with this being the 5th). The Stochastics are also overbought at 83.2 and the nova swing system is starting to scream for a pivot. Soon I think, very soon, we will have a moerse rally. But it being a monthly chart, it could still take another couple weeks but I reckon a sustained rally before end December.

[_nova]

Simon? What does Steve Barrow think? We going to see a steadily declining USD from here on? What's his tea leaves say?

[YNWA]

....here we go into the mid 128's......FTSE futures gone wild & BIL jumped on the futures from 110-113 to 155-165 in a blink

[_nova]

You know YNWA? I'm not going to rush into any hasty decisions yet. Patience be the name of the game. The monthly USD Index is forming a spinning top which can only confirm month-end and the daily is sideways and ranging 84 to 89 so the Index is not yet resolving itself into a direction. This swinging = volatility. The Index went from 88.7 to 85 between Fri and yesterday and on today's session it's bounced back up to 86.1 While the two session drop was clearly reflected in the market rallies, the current session's bounce has yet to filter through. The rule of thumb is that currency markets move faster than othersBut then, it could always reverse. However, there's some serious US data coming out at 15h30 with Q3 GDP expected -0.5% and 16h00 the S&P/Case-Schiller Home Price Index for Sep. At 17h00 King Henry holds a news conference re the Citi bailout. I think all of this is priced in but if GDP or the HPI come in worse then there's going to be a rush for the exits. And that's not yet discounting Mr Paulson maybe saying something he shouldn't, again. Don't know what DAX and FTSE futures look like (I'd guess they will open flat or slightly up) but US futures are directionless to slightly negative. From the USD Index and a flat US futures I'd say chartist and John have a high probability gap close coming today. OMO