Today's stock market

[Tulpen]

Plunge.....plunge....blub....blub.

Gold and oil plunged as well.

I expect a chain reaction in Asia and Europe and after that margin pressure selling.

Oil in the high $80 under these conditions is unreal, I expect a huge plunge.

And I would advice you not to buy gold, it will plunge together with stocks, hard!

[Mega]

Re: Today's stock market

Long term i expect it to rocket same with oil...........but YES a MEGA CRASH is on the Cards (Mosty in Cash-£/Euro's)
Mike

[GRG55]

Re: Today's stock market

Plunge.....plunge....blub....blub.

Gold and oil plunged as well.

I expect a chain reaction in Asia and Europe and after that margin pressure selling.

Oil in the high $80 under these conditions is unreal, I expect a huge plunge.

And I would advice you not to buy gold, it will plunge together with stocks, hard!

So what are you holding that won't plunge? US $?

[Tulpen]

Re: Today's stock market

So what are you holding that won't plunge? US $?

I am 100% short on oil.

I am counting on oil to plunge, and it is already started..

At this stage even the idiots are realizing that the US is heading into a recession and clearly the reaction in the oil market was to lower the price of oil. But just a bit.

Oil in the high $80s with a world recession coming is unreal, but it has not yet sunken in for the speculators.

I think that speculators of peak oil will be in for a shock in the next few weeks.

[GRG55]

Re: Today's stock market

I am 100% short on oil.

I am counting on oil to plunge.

So what are you doing with the other side of the short oil trade, or is your short in the form of puts?

[Tulpen]

Re: Today's stock market

So what are you doing with the other side of the short oil trade, or is your short in the form of puts?

A combination of shorting USO and going long DCR.

By the way I expect the dollar to rise against the Yen and the Euro.

[Andreuccio]

Re: Today's stock market

By the way I expect the dollar to rise against the Yen and the Euro.

I'm curious. Why do you expect it to rise?

[Tulpen]

Re: Today's stock market

I'm curious. Why do you expect it to rise?

The dollar dropped a lot in the last few months.

The interest rate differential will cause the US to recover from a recession much sooner than Europe which has refused to lower interest rates. The ECB is going to be caught being behind the curve and this will impact the currency.

The euro/dollar is already down from the Feb 2 high in the 1.49 region and is currently trading at 1.4635.

[zenith191]

Re: Today's stock market

Also the synthetic short in the USD will unwind as everyone scrambles to pay off debt.

[santafe2]

Re: Today's stock market

The dollar dropped a lot in the last few months.

The interest rate differential will cause the US to recover from a recession much sooner than Europe which has refused to lower interest rates. The ECB is going to be caught being behind the curve and this will impact the currency.

The euro/dollar is already down from the Feb 2 high in the 1.49 region and is currently trading at 1.4635.

I agree with this post. It's likely the US$ is putting in a bottom at ~75 while the Euro which is still testing the top of its range, will weaken over the rest of the year. Sometime in the next few weeks/months the ECB will begin lowering key rates. When they do, it will put downward pressure on the Euro.

I don't agree with the previous post that stated the Yen will be weak against the US$. It has been in fact moved up over 10% from the bottom and should continue to move up as the Yen carry trade unwinds and the Japanese raise interest rates, (no sign of that yet).

If one considers that the Euro comprises over 57% of the trade weighted value of the US$ and the British Pound and Canadian dollar another 21%, Yen strength will not matter so much in the overall valuation of the US$. All 3 of these currencies are currently over valued with regard to the US$.

[GRG55]

Re: Today's stock market

I agree with this post. It's likely the US$ is putting in a bottom at ~75 while the Euro which is still testing the top of its range, will weaken over the rest of the year. Sometime in the next few weeks/months the ECB will begin lowering key rates. When they do, it will put downward pressure on the Euro.

I don't agree with the previous post that stated the Yen will be weak against the US$. It has been in fact moved up over 10% from the bottom and should continue to move up as the Yen carry trade unwinds and the Japanese raise interest rates, (no sign of that yet).

If one considers that the Euro comprises over 57% of the trade weighted value of the US$ and the British Pound and Canadian dollar another 21%, Yen strength will not matter so much in the overall valuation of the US$. All 3 of these currencies are currently over valued with regard to the US$.

For just over a year I have been equally biased towards the Yen and Swissie. However, the potential fall in the Euro/US$ exchange will drag CHF with it, leaving the Yen as one of the very few currencies left to hide in (other than US$ in the short term). Of course there's still "Gold, gold. You're making me old..."

[santafe2]

Re: Today's stock market

For just over a year I have been equally biased towards the Yen and Swissie. However, the potential fall in the Euro/US$ exchange will drag CHF with it, leaving the Yen as one of the very few currencies left to hide in (other than US$ in the short term). Of course there's still "Gold, gold. You're making me old..."

To my mind, this is a difficult time to make money in currencies unless one is not a US citizen and is willing to move their local currency, (Euro, BP, maybe CDN), into the US$. For a Euro zone investor, the lowly US$ should be an excellent investment over the next year.

The Yen should continue to move up but it pays nothing for your time and the Swiss Franc is likely close to the end of a seven year upward cycle. As you say, there is gold. I suspect there is enough inflation in the world economic system to keep it moving up with respect to all major currencies for a few more years.

[Tulpen]

Re: Today's stock market

To my mind, this is a difficult time to make money in currencies unless one is not a US citizen and is willing to move their local currency, (Euro, BP, maybe CDN), into the US$. For a Euro zone investor, the lowly US$ should be an excellent investment over the next year.

As a US citizen you would get the same effect if you were to short the Euro, BP etc.

[santafe2]

Re: Today's stock market

As a US citizen you would get the same effect if you were to short the Euro, BP etc.

This is a fair point but the issue with being short is that you can't open an interest earning account. Ideally one will find their local currency overvalued with respect to another first-world currency that is paying a reasonable dividend. This makes the holding period much more rewarding. Currencies tend to have fairly long cycles and the ability to earn 4-5% during the holding period makes the overall investment much more worthwhile.

For example, a Euro investor in the US$ will have the advantage of interest income over the US investor short the Euro. One could leverage the Euro short to off-set this issue but now I think we're talking about a game for professionals or gamblers.