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FED Balance Sheet Hits $ 4 Trillion With No Shrinkage Plans – Dec 20

December 20, 2013

Dec 11 -Gold 2014 Target  Break of $ 1000 for $ 800.

Inter–action with my Blog Subscribers……

6:20 AM  sir shall go long gbp at 1.6350??
6:40 AM  GBP @ 1.6350 = I see another 10-20 pip dip………….
7:06 AM  GOLD @ $ 1194 = Sell around $ 1194-96. Stops $ 1999……..
 7:07 AM  EURO @ 1.3635 = May struggle & may hold below 1.3655………
 7:08 AM  104.42 = No change in view may have seen the top until NYK…………
7:09 AM  GBP @ 1.6342 = Fall could extend if holds below 1.6360……….
 7:13 AM GOLD @ $ 1195 = Could inch up by another $ 2-3 before easing……….
 8:48 AM  Ok, hope no one went short GOld as I warned another $ 3 jump @ $ 1195……..
8:49 AM  GOLD @ $ 1198 = Try to pick top around $ 1198-01. Levels to watch is $ 1205……………..
9:31 AM  GBP @ 1.6348 = to test 1.6390-00……….Buy around 1.6240……
9:32 AM  Ok buy around 1.6335-40. Stops 1.6310……..
10:16 AM  sir shall short euro at 1.3645??
 10:25 AM  sir gbp looking weeker despite good data.. view same!!
10:30 AM  Best strategy in trading is that whenever you are uncomfortable with a position, square it………….
Do not take an opinion, because it is another persons view………….
You could be reight……
10:52 AM  EURO @ 1.3662 = I am expecting current rally to exhaust around 1.3670-80…
12:20 PM  Holding gold sell ok sir around 98 n sl 05
 1:22 PM  GOLD @ $ 1192 = Ok book your profit around $ 1190-92 before data.
1:25 PM  GBP @ 1.6348 = Sqaure Cable position around 1.6350 with small profit………..
1:26 PM  Suggest closing all open positions taken on my recomendation………..
1:31 PM  Buy USD Sell Gold………..
1:34 PM  GOLD @ $ 1193 = Sell around $ 1193-95……….
1:38 PM  sir stops for euro and gbp??
 1:39 PM  what have you done ?
1:47 PM  sir shorted euro at 1.3655??
 1:52 PM  I am still expecting Euro to hold below 1.3680, but there is strong support around 1.3610-15 that needs to breajk for 1.3585-90. If you want to plya safe then place Stops around 1.3660-65…………….
1:59 PM  GOLD @ $ 1194 = I see risk for sharp up move towards $ 1205-10 levels, if fails to break $ 1185-87 levels. I would suggest buying on dip instead of selling Gold……….
2:02 PM  and sir what abt aud??
 2:02 PM  D E A D
 2:05 PM Will wait for ur final call on gold?   THanks
 2:22 PM  sir shall short gbp here!!
 2:24 PM  GBP is only a buy on dip. I would not sell until close to 1.64…………..
3:01 PM  EURO 1.3677 – I would prefer selling Euro around 1.3677-83. Stops 1.3720…………..
3:06 PM  Ok pals, end of tought, but another fine week…….
Have a nice weekend………………………….

DAILY COMMENTARY

After FED tapering that was necessary, as the size of its balance sheet surpassed $ 4 Trillion mark that grew from $ 871 in 2007 to $ 4 Trillion until Dec 16, 2013 is a hint that how much mending of economy has taken place by window dressing that has caused imbalance in the financial system.
What is more worrisome factor is that there is no plan or strategy to reduce the size of the balance sheet, neither it was ever questioned seriously by the US Senate Banking Committee that often inter-acts with the FED chairman in regular basis. Shrinking of FED balance sheet could be more difficult task than mending of economy, which may never be possible because as there is revenue generation plan to counter monster financial storm.
Coming back to market reaction after FED’s Wednesday move, Global Stock Market and US Dollar were the immediate beneficiaries. While Currencies, Gold and US Bond Market took the blow. So far impact on the emerging market could not be seen, as effect of liquidity squeeze will gradually filter into the financial system, as thew size of taper increases on monthly basis.
It is interesting to note the odd market behaviour and at time do not comply with the economic moves. US jobs data is a good example that despite unexpectedly strong numbers USD unexpectedly weakened. Previously we saw ECB rate cut having no impact on the European currency. Emerging Markets can be taken as a best case example, because despite most of the economies enjoying surplus, as compared to developed economies laden with high debt, trade imbalance, balance of payment problem, average foreign exchange reserves have been surviving through printing of notes considered economic evil and yet there is plenty of disparity, as emerging market economy is faced with risk of meltdown and investment flow is shifting to comparatively weak developed economies.
I think overall, as we approach year end, market will remain directionless. There could be some odd behaviour in the financial market moves due to year end demand and window dressing that will lead to choppy market conditions and more importantly thin market condition will add more confusion due to holiday season, hence uncertainty will prevail in the global financial market. So watch out for the sharp scary both way moves.
GMT 3:21 – GOLD @ $ 1195 = Top around $ 1200 should hold below or else $ 1205-10 could be challenged and any break could delay fall. I am expecting another down move to test $ 1183-85 zones. Clear break will encourage for test of $ 1172, with next $ 1135 levels as my next target.
GMT 3:32 – EURO @ 1.3644 = I see strong support around 1.3610-20, needs to make a clear break for test 1.3580-85 zones. However, prior to fall Euro may bounce back to visit 1.3660-70 zones, but should hold for another dip.
GMT 3:38 – GBP @ 1.6368 = Cable may hang around for a moment and as long as support level 1.6340-50 holds. There is a minor risk to get close to 1.6390-00 levels before easing. However, a move below support level will encourage for a test of 1.6270-80 zone. On the up break of 1.6410 would threaten to challenge 1.6445.
GMT 3:43 – JPY @ 104.40 = As long as 104.80-90 holds, risk of some gains for Japanese currency looks a possibility, requires to break 104.03 for a test of 103.85-90 zones. Or else 105.20.
GMT 3:46 – AUD @  0.8875 = Should around 0.8830-40 levels for a gradual up move needs to move beyond 0.8890-00 for test of 0.8915-20 zones or else 0.8810.

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More Later…………………..

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