10.6 EDSEL

[dispell]

Good morning everyone!
Hope ya'll had a good weekend!
Here's wishing all of u guys a great trading week ahead!

[nanningbob]

In my customary spirit of 'if I can do it guys, then so can you', here are my trades since starting live 10.6 trend trading since the start of the last week in November.

usdhkdm30.png

Thanks, Bob.

Good show Ole Chap! Is that the proper way the English would say it??

[nanningbob]

OK this could get interesting

http://www.zerohedge.com/news/2014-01-1 ... st-default

...borrowers are facing rising pressures for loan repayments in an environment of overcapacity and unprofitable investments. Unable to generate cash to service their loans, they have to turn to the shadow-banking sector for credit and avoid default. The result is an explosive growth of the size of the shadow-banking sector (now conservatively estimated to account for 20-30 percent of GDP).

Understandably, the PBOC does not look upon the shadow banking sector favorably. Since shadow-banking sector gets its short-term liquidity mainly through interbanking loans, the PBOC thought that it could put a painful squeeze on this sector through reducing liquidity. Apparently, the PBOC underestimated the effects of its measure. Largely because Chinese borrowers tend to cross-guarantee each other’s debt, squeezing even a relatively small number of borrowers could produce a cascade of default. The reaction in the credit market was thus almost instant and frightening. Borrowers facing imminent default are willing to borrow at any rate while banks with money are unwilling to loan it out no matter how attractive the terms are.

Should this situation continue, China’s real economy would suffer a nasty shock. Chain default would produce a paralyzing effect on economic activities even though there is no run on the banks. Clearly, this is not a prospect the CCP’s top leadership relishes.

[Nidolap]

celebrating my wifes birthday on tuesday in Lisbon, so no trading for me next week , make plenty of pips guys, and bob get rid of that cold, looking forward to resuming my studies on my return

Welcome to the most beautiful European city, hope you enjoy your stay.

If you need some information pm me, I'll be glad to help.

[fx800]

The two currencies that stand out this am are NZD and JPY.

I had a sell on H1.

[fx800]

The two currencies that stand out this am are NZD and JPY.

I had a sell on H1.

Not a lot of momentum, closed at BE.

Bank holiday in the US today, not a lot of news. May be a quiet day today.

[nanningbob]

OK guys, DO NOT BE CAUGHT WITH AUD OR NZD buys. The cracks are showing up big time in the Chinese economy. Recent news story. 2nd one on this subject seen today. That means the JPY will rise and possibly all the depreciation of the last year may go down the drain. Just a heads up. If the govt. back stops the problem again. It only kicks the can down the road for another day.

http://www.forbes.com/sites/gordonchang ... anuary-31/

Observers make the logical argument that “to have a market meltdown, you have to have a market” and China does not have one. Instead, Beijing technocrats dictate outcomes.

That’s correct, but that is also why China is now heading to catastrophic failure. Because Chinese leaders have the power to prevent corrections, they do so. Because they do so, the underlying imbalances become larger. Because the underlying imbalances become larger, the inevitable corrections are severe. Downturns, which Beijing hates, are essential, allowing adjustments to be made while they are still relatively minor. The last year-on-year contraction in China’s gross domestic product, according to the official National Bureau of Statistics, occurred in 1976, the year Mao Zedong died.

Why will China’s next correction be historic in its severity? Because Chinese leaders will prevent adjustments until they no longer have the ability to do so. When they no longer have that ability, their system will simply fail. Then, there will be nothing they can do to prevent the freefall.

[HannesJoubert]

I think I posted earlier, I dislike the NZD, you know what? I still do.....

[dispell]

OK guys, DO NOT BE CAUGHT WITH AUD OR NZD buys. The cracks are showing up big time in the Chinese economy. Recent news story. 2nd one on this subject seen today. That means the JPY will rise and possibly all the depreciation of the last year may go down the drain. Just a heads up. If the govt. back stops the problem again. It only kicks the can down the road for another day.

http://www.forbes.com/sites/gordonchang ... anuary-31/

Observers make the logical argument that “to have a market meltdown, you have to have a market” and China does not have one. Instead, Beijing technocrats dictate outcomes.

That’s correct, but that is also why China is now heading to catastrophic failure. Because Chinese leaders have the power to prevent corrections, they do so. Because they do so, the underlying imbalances become larger. Because the underlying imbalances become larger, the inevitable corrections are severe. Downturns, which Beijing hates, are essential, allowing adjustments to be made while they are still relatively minor. The last year-on-year contraction in China’s gross domestic product, according to the official National Bureau of Statistics, occurred in 1976, the year Mao Zedong died.

Why will China’s next correction be historic in its severity? Because Chinese leaders will prevent adjustments until they no longer have the ability to do so. When they no longer have that ability, their system will simply fail. Then, there will be nothing they can do to prevent the freefall.

So does this mean that i should avoid aud & nzd pairings these few days till the 31st?
and then we should set up for aud & nzd sells?

[nanningbob]

OK guys, DO NOT BE CAUGHT WITH AUD OR NZD buys. The cracks are showing up big time in the Chinese economy. Recent news story. 2nd one on this subject seen today. That means the JPY will rise and possibly all the depreciation of the last year may go down the drain. Just a heads up. If the govt. back stops the problem again. It only kicks the can down the road for another day.

http://www.forbes.com/sites/gordonchang ... anuary-31/

Observers make the logical argument that “to have a market meltdown, you have to have a market” and China does not have one. Instead, Beijing technocrats dictate outcomes.

That’s correct, but that is also why China is now heading to catastrophic failure. Because Chinese leaders have the power to prevent corrections, they do so. Because they do so, the underlying imbalances become larger. Because the underlying imbalances become larger, the inevitable corrections are severe. Downturns, which Beijing hates, are essential, allowing adjustments to be made while they are still relatively minor. The last year-on-year contraction in China’s gross domestic product, according to the official National Bureau of Statistics, occurred in 1976, the year Mao Zedong died.

Why will China’s next correction be historic in its severity? Because Chinese leaders will prevent adjustments until they no longer have the ability to do so. When they no longer have that ability, their system will simply fail. Then, there will be nothing they can do to prevent the freefall.

So does this mean that i should avoid aud & nzd pairings these few days till the 31st?
and then we should set up for aud & nzd sells?

NO look for sell opportunities. The CSS is showing downward movement on the aud and the nzd. My warning is especially for people like me who CT trade once in a while. If China covers the upcoming losses or partially covers them so it is not so severe things will be ok. But if they dont it will be a doozy. Remember Chinese bank had 3 credit squeezes in their banking system this last year. A 4th one is on the horizon. There comes a time when they cant cover it and they will go through a USA 2008 or a JPY meltdown of 30 years ago.