Recap USD Positive - 301006

SG 311006 1500H

Before the recap of yesterday fundamental, I would like to wish "Happy Halloween" to whoever celebrating them today. Also note that countries are having "Daylight Saving Time", so, be watchful on the time. Details below explain time changes & countries that use/don't use DST:
http://www.infoplease.com/spot/daylight1.html
http://webexhibits.org/daylightsaving/g.html

Based on the release yesterday (as below), it clearly shows that it is a USD positive, PCE was -0.3%. The amount is not that significant, as least GBP was moved from 1.9045 down to 1.9000. This is really great as i was hoping for this to happen. At last, a USD positive after last week USD weakening. Some trader still caught in the bull trend when the data was released. Luckily, i was not caught in the net.

USD Personal Spending m/m 0.1% (A) 0.2% (E) 0.1% (P)
Measures the total value of consumer purchases of goods and services over the past month. Consumer spending makes up two thirds of GDP and therefore a rising trend generally strengthens a country's currency.

USD PCE Price Index m/m -0.3% (A) 0.1% (E) 0.2% (P)
The Personal Consumption Expenditures (PCE) Price Index measures the rate of inflation experienced by consumers. Like CPI, it reflects the price change in consumer goods and services. PCE differs slightly from CPI in that it only measures goods and services targeted towards and consumed by individuals. Traders watch the PCE Price Index closely because it's the Federal Reserve's preferred consumer inflation indicator.

Today's data is not that great, however, it could still move the market with more than 10 pips. Market mover report are as follow:

07:00 GMT Germany ! Retail Sales (MoM)
07:00 GMT United Kingdom !! Nationwide Housing Prices (MoM)
10:00 GMT European Monetary Union !! Business Climate Indicator
15:00 GMT United States !! Chicago PMI
15:00 GMT United States !! Consumer Confidence

The real fireworks would be on the 031106 for NFP and 071106 for US Mid term Election. An interesting article: Global Cash Glut Fuels Investment Boom, Rate Concern shows more interesting stuff is going to happen when FED, BOC, BOJ, ECB hold meeting to discuss on tightening. OPEC is holding meeting too when the crude price drill down below.

FreedomRocks Evaluation

"The FR trading methodology is a brilliant and unorthodox way essentially of putting on a Hedge Strategy (Carry) Trade! The "Pip Allocator," a proprietary calculator, tells you exactly how many lots of each currency pair you should trade. And then the "Portfolio Manager," another proprietary calculator, tells you exactly where you should place your pending entry buy and sell orders to take profits when the market reaches a pre-determined position -- whether it goes up or down! Brilliant! You lock in those profits and then reset your position, and, in the meantime, the main trade hopefully will be making you additional money or at least be so closely hedged that you don't run the risk of losing money!

Intial stage can be a little fuzzy and hopelessly lost, but the truth is, it is really easy once you get the grasp of it, the written instructions and the video instructions are great, and best of all, once the trade is set, you are done! It is fully automated and you will be alerted by e-mail or text message to cell phone when profits have been taken. Until they are, there is nothing to do but hang out on the beach or do whatever else you want to do. You've got a life. You don't have to sit behind the computer 17 hours a day waiting for trading set-ups. You will be favorably impressed. "

All FR subscriber basically would say the same as above, due to the elements of MLM cum forex trading. Basically FR is not that bad. But, having to pay like U$100 per month, makes me think of whether it is worth it or not. Initially when i first tested it, it is pretty confusing, and i place on the demo account, first few weeks was pretty scary, after a while, it did show a profit, not that substantial. It is pretty short to have 15 days to test on a system. Personally, it did prompt me to consider subscribing to this system. Then, at the end of the day, I feel that learning to fish is better than paying for fish, looking at a long term prospect. Having this trading skills would enable me to trade in any market i wanted. Complete freedom.

I would like to thank the person who introduce me to FR, in which she has her website at http://www.forex4aliving.blogspot.com/. If you are looking for FR ways and tryout, you can always look her up. Everyone thinks differently, this makes us unique in many ways. If this is your path to wealth, by all means go ahead. I still prefer running with bulls and bears, more fun; or maybe catching falling knives at other times. :D

Recap on 271006

Monday 301006 0730AM

A short recap for last Friday event:

9:30am CHF Leading Index m/m 2.00 (A) 2.25 (E) 2.32 (P)
Definition: Measures overall economic activity through a qualitative business survey about developments in the recent past, the current situation and expectations for the next three to six months. Survey questions relate to production, orders and stocks of finished goods. The Swiss Institute for Business Cycle Research (KOF) publishes this indicator monthly.

12:30pm USD GDP Annualized q/q 1.6% (A) 2.0% (E) 2.6% (P)
Definition: Gross Domestic Product (GDP) measures the total value of all goods and services produced by the economy. A rising trend has a positive effect on the nation's currency. GDP is the broadest measure of economic activity and considered to be the primary gauge of an economy's health. To foreign investors, a strong economy is viewed favorably because it spurs investment opportunities in the domestic stock and bond markets. A strong economy also persuades the central bank to raise interest rates in an attempt to control growth. All of this activity will increase demand for the nation's currency.

12:30pm USD GDP Deflator Annualized q/q 1.8% (A) 2.9% (E) 3.3% (P)
Definition: The Gross Domestic Product (GDP) Deflator measures the annualized quarterly implied rate of inflation for all economic activity. The deflator is used to calculate the difference between nominal and real GDP. The Federal Reserve takes special note of this indicator because it is the economy's broadest measure of inflation.
* Note Definition is for those Non-forex fundamental background.

In short, even though the personal consumption was a solid 3.1%, US GDP was soft. This lower GDP deflator and PCE reading eventually caused USD to weaken even further. After some comments by US Treasury Sec Paulson, USD did gain some ground, but, not enough to move the market as much as the GDP did on the USD.

Today's event:
13:30 GMT United States !!! Personal Income (MoM)
13:30 GMT United States !!! Personal Spending

The weird thing that really puzzle me is Paulson, Greenspan, and Fed all commenting on pretty normal for US to have all those weak number due to inflation and USD will strengthen eventually. Is this a reality in what they are saying or just a hoax to confuse investors? Another weird stuff is US did send troop to Saudi with classified purpose. I think i just forget about all this news, and just concentrate of what investors are practically telling me in my technical analysis.

I will be covering a special edition commentary on my experience at FreedomRocks tomorrow, due to my last day of evaluation. :D

Recap of 261006

SG 271006 1130am
There is nothing great about yesterday German Consumer Confidence as there is not much significant in the variance (Actual 9.2, Expected 9.5). The top market mover for yesterday was

USD Durable Goods Orders m/m 7.8% (A) 1.5% (E) -0.5% (P)
USD Core Durable Goods Orders m/m 0.1% (A) 1.0% (E) -2.0% (P)
USD Unemployment Claims 308K (A) 305K (E) 299K (P)
USD New Home Sales m/m 5.3% (A) -0.1% (E) 4.1% (P)
(A) Actual (E) Expected (P) Previous

Even though the Durable Goods Orders has increase significantly, this figure was expected due to the large Boeing order. With the Unemployment Claims increased from 299K to 308K, FED stance on the FOMC and the OPEC decision to reduce production in December, this eventually weaken the USD across currency board. The recent release of the FXCM Speculative Sentiment Index also in favour of a stronger Euro versus weaken USD.

Today major market mover are as follow:
09:30 GMT Switzerland ! KOF Swiss Leading Indicator
10:00 GMT United Kingdom !! CBI Distributive Trades Survey-Expected
10:00 GMT United Kingdom !! CBI Distributive Trades Survey-Realized
12:30 GMT United States !!! Core PCE (QoQ)
12:30 GMT United States !!! GDP Annualized
12:30 GMT United States !!! Personal Consumption

Will USD further weaken against other currency this year? Based upon 2005 historical charts, USD was at its strongest during the last quarter of the year. Will history repeat itself this time? Only time is the determining factor for all this, as we see 2006 coming to an end (2 more months to go).

Leisure reading - Crude Oil

Crude oil began futures trading on the NYMEX in 1983 and is the most heavily traded commodity.

Trading unit
Crude Oil Futures trade in units of 1,000 U.S. barrels (42,000 gallons). Options: One NYMEX Division light, sweet crude oil futures contract .

Trading Months
Crude Oil Futures trade 30 consecutive months plus long-dated futures initially listed 36, 48, 60, 72, and 84 months prior to delivery. Additionally, trading can be executed at an average differential to the previous day’s settlement prices for periods of two to 30 consecutive months in a single transaction. These calendar strips are executed during open outcry trading hours. Options: 12 consecutive months, plus three long-dated options at 18, 24, and 36 months out on a June/December cycle.

Price Quotation
Crude Oil Futures are quoted in dollars and cents per barrel.

Minimum Price Fluctuation
$0.01 (1¢) per barrel ($10 per contract).

Maximum Daily Price Fluctuation Futures
Initial limits of $3.00 per barrel are in place in all but the first two months and rise to $6.00 per barrel if the previous day's settlement price in any back month is at the $3.00 limit. In the event of a $7.50 per barrel move in either of the first two contract months, limits on all months become $7.50 per barrel from the limit in place in the direction of the move following a one-hour trading halt.
Options: No price limits.

Last Trading Day Crude Oil Futures
Trading terminates at the close of business on the third business day prior to the 25th calendar day of the month preceding the delivery month. If the 25th calendar day of the month is a non-business day, trading shall cease on the third business day prior to the last business day preceding the 25th calendar day. Options: Trading ends three business days before the underlying futures contract.

Delivery
F.O.B. seller's facility, Cushing, Oklahoma, at any pipeline or storage facility with pipeline access to TEPPCO, Cushing storage, or Equilon Pipeline Co., by in-tank transfer, in-line transfer, book-out, or inter-facility transfer (pumpover).

Delivery Period
All deliveries are rateable over the course of the month and must be initiated on or after the first calendar day and completed by the last calendar day of the delivery month.

Copied from http://www.wtrg.com/daily/crudeoilprice.html, with chart

Recap FOMC Minutes

SG 261006 1200H

It is a rather dissappointing to know that FED is not going to take any action strategy to battle the current economic situation, core price inflation in USD. For the third meeting in a row, the Federal Reserve left interest rates unchanged at 5.25 percent. This is definitely not what most traders around the world are looking forwards to.

Less hawkish tone of "Going forward the economy seems likely to expand at a moderate pace" and "possibility of a rate cut early next year" has results in a weaker USD and lower yields.

I missed all this action, as I can't get up at around 0215H Singapore time, due to exhaustion in work and study. :(

Not to worry, still some major fundamentals as follows to gear USD:

06:10 GMT Germany ! Gfk Consumer Confidence Survey
12:30 GMT United States !! Durable Goods Orders
14:00 GMT United States !! New Home Sales

How i wish that Speculative Sentiment Index (SSI) and Commitment of traders (COT) report are out everyday so that i can position myself well. :D

FOMC Minutes

Today 25/10/06 will be a great, as we have fundamentals as below:
08:00 GMT Germany !! IFO Business Climate
13:00 GMT Germany ! Consumer Price Index (MoM)
14:30 GMT United States ! Crude Oil Inventories
18:15 GMT United States !!! FOMC Policy Announcement
20:00 GMT New Zealand ! RBNZ Official Cash Rate

A short recap on the fundamental that happened:
New Zealand CPI came out slightly worse than expected, 0.7% vs 0.8% expected
Australian CPI came out better than expected, 3.9% vs 3.7% expected

Forex Trading Ideas

Week of Oct 23 is full of exotic trades mainly NZ, Australia and Japan. Due to busy schedule for this week, trade for this week are as follow:
Buy GBPUSD at 1.8740 SL 1.8730 TP 1.8900
Buy USDCAD at 1.1200 SL 1.1190 TP 1.1260