AUD

[>Apocalypto<]

Re: AUD is a short

double top on 30 min chart, 8090

any INTELLIGENT thoughts?

Money tree

Well done on the HD

I have no idea about Forex but all I can say is whatever way your trading is working then great keep it up and dont bother arguing cuz why argure if your living the fruits of your labour!

But only thing really made me laugh was when you posted I am 100% right on all my direction posts! Then couple posts down you said o I made a mistake lol that kind of screws your credibility!

Making such wild calls as Forex wipes the floor with shares is a good one how can you say that right now I think this bull market would have made alot of share traders a lot my more in the last four years then FOREX. But most likely I bet I am wrong cuz it all comes down to the trader!

I know for a fact some very smart traders have made a killing off the ASX in the last 4 years, I am talking retirement stuff! Lots of zeros.

Happy trading Brother

 

[ducati916]

Re: AUD is a short

This is an arrogant and condescending assumption.

I scored a "high distinction" in my Securities Institute Economics exam. So Im well aware of what drives these markets, which is why I have been able to make so many great calls. Im not sure what qualifies a "doorman" as an expert, perhaps you could enlighten us?

If you dont understand forex then leave it for those who do. This forum is to teach people about forex, and we dont need clowns whining "ooh its too hard"

Do us all a favour and research my past posts on forex eh?

success is the best revenge

Obviously you haven't got a clue my friend, the evidence resides within your own post viz.

eur gbp nzd et al are irrelevant.
relationship between AUD & USD in question.

As previously detailed, due to arbitrage, other currencies on a relative basis are very important. That you are either unaware, or perversely ignorant simply highlights how little you understand.

Based on the above, I think I can probably pass on researching any further nonsense from you.

jog on
d998

 

[It's Snake Pliskin]

Re: AUD is a short

Duc,

Would you care to list the inherent difficulties for me please?

Snake

Duc,
When you are done cutting Money tree up maybe you could answer the question.

 

[money tree]

Re: AUD is a short

Its ok snake, he is a little busy opening doors for people.

Wasnt there an old cliche about taking advice from busboys/doormen/shoeshine boys?

 

[It's Snake Pliskin]

Re: AUD is a short

Its ok snake, he is a little busy opening doors for people.

Wasnt there an old cliche about taking advice from busboys/doormen/shoeshine boys?

Moneytree,
I was interested to see what the clown had to say. Clearly he is a clown. Etablished on his own behalf. Sorting the real from the bogus.
Happy trading

 

[>Apocalypto<]

Re: AUD is a short

Its ok snake, he is a little busy opening doors for people.

Wasnt there an old cliche about taking advice from busboys/doormen/shoeshine boys?

ha ha ha

Yeh there is and it's do the opposite!

But I think this getting way to harsh!

 

[money tree]

Re: AUD is a short

As previously detailed, due to arbitrage, other currencies on a relative basis are very important. That you are either unaware, or perversely ignorant simply highlights how little you understand.

Golly gosh, all technical analysts are perversely ignorant? We CHOOSE to ignore the NOISE of the market. Ignorance is bliss

You CANNOT as a trader, reasonably be expected to absorb and analyse ALL data past, present & future while also abiding by the laws of technical analysis. Regardless of whether its equities or FX or commodities et al. Either you have a mechanical system or a discretionary one. I use mechanical rules for entries & exits, however I sometimes predict where the market will move based on my knowledge of economics.

PRICE ACTION IS GOD

It appears it is YOU who is perversely ignorant.

People need to simplify their trading analysis and just look at the price action, it will make much more sense than trying to think too much.....

https://www.aussiestockforums.com/forums/showthread.php?p=137068#post137068

Regards,
Frank Dilernia

Crikey, Frank said something that I can understand without a decryption device

 

[wayneL]

Re: AUD is a short

AUD just blew through 81c on stinking US housing numbers.

 

[CanOz]

Re: AUD is a short

AUD just blew through 81c on stinking US housing numbers.

Just sitting on the high now, waiting......

 

[money tree]

Re: AUD is a short

guppy on cnbc this morn said 82 top or at worst 82.5

will reload there

 

[doctorj]

Re: AUD is a short

I guess it depends on your time from. Kahuna1 is someone who's commentary I've come to like. Whilst I don't agree with all of it, he makes a lot of good points in this post.

this market .... 2 weeks ago we were all having kittens and the daily moves looked like a child playing with a crayon ..... and from the depths or depression, oh no its the end of the world we go to the other extreme.

Obviously the lows and supports are not even a question and yep they held. Now its the top and the 5950 level took them a few times to get through but here we are going for the all time high. Just amazing.

Little surprised about this till I looked and my pet BHP with the buyback going off and super funds scrambling to buy the stock they sold into the buyback certainly a large factor. Telstra back near its high as though it didn't have one political party announce they would fund fibre to the node Internet out of the future fund and it was good for it ?

No chance we are going to raise rates ? Even when the RBA tells up we are leaning that way ? .... and even more amusing is my long held belief the Ozzie over the next couple of years goes up up up and breaks the 1990 is highs of 90 cents and there isn't a thing we can do. So lets raise rates today and drop them in 9 months and 87 cent ozzie ?

Not to be a downer, certainly it was clear we were going to break the 5925-50 resistance on the third attempt on the ASX 200. Next level is the all time high 6,052 ish but personally sceptical of the quality of this rally .... yes I love BHP longer term and some of the other exporters but remain concerned about the currency as the balancing factor in the equation. So with the Ozzie at 81 cents not seen since 1996 ... and the high then 82 cents
or the high in 1990 when we had " the recession we had to have" from Mr keating and it hit 84 cents .... it remains a concern to me at least on the exporting side longer term.

The big cash-flows of the export expansion boom are yet to hit and not till 2008 do we see the larger ones come on line and from then its a steady flow which will hit our current account. After hitting a negative 50 billion per annum and it all added to our foreign debt as we balance our external accounts I suspect in 2010-11 us to have a balanced account and from there it to turn into the black and us pay off our debt.

Of course this depends on two things and one view in some ways contradicts the other.

Commodity prices remain firm as time goes on, China and its expansion is the large factor in this accounting for 66% of the estimated expansion in demand for iron ore out to 2011.
This expansion in demand globally means it will need the Iron ore export market to grow by 60% by then as a percentage of what Australia exports right now its 100% growth.
Every other commodity is tied into this in one shape or another and clearly China with 10.7% growth right now and much higher internal numbers like retail sales up 18% ect ect ... I have very few qualms about it keeping going and even if it moderates as already expected to 8% growth the picture will remain 100% unchanged. I am frankly not even sure they can slow it to 8% so the projected demand numbers worked on that assumption are in fact if anything too low.

Iron ore is the key along with China. Certainly some metals may and I mean may come off as supply comes on line but with the demands on the export market which is only less than 50% of the global supply in most cases .... its needing to keep up with a growth rate of 15% per annum which certainly looks set for the next 4 years if not the next 10 years.

Having looked at various estimates from economists over the weekend, we have at one end the totally bizarre ones from Abare which is the government forecaster who has been the worst caller ever, and its still going for the prize. ABARE basically estimates across the board a 30% fall in commodity prices out to 2011-12. Just amazing and idiotic on the main.
Most market economists all sitting one way as well but the 15-20% range for the same time period seems to be the call. Me I do see some falls with ones which have flown on very tight supply and as some more supply comes on line yes they will come back but overall I am not even sure they are even going to come off. At worst as a basket I suspect only slightly.

Thing for me its just like China. The bears are talking and have already factored Chinese growth slowing to 8% by 2008 , and even using these numbers the global steel production is estimated to go up a whopping 21% by 2011. Thats the planet as a whole !! Lets just say they are correct about China and it does slow somewhat .... the outlook for steel is based already on these numbers. I remain less than convinced it even happens but its an aside.

A 21% growth in production and conversely the growth in various other demand for metals is supposed to remain at half those rates according to various papers I read. Uniformly they agree on iron ore and steel .... just ask yourself what its used for and what will it be used for ? With 100 million new Chinese cars on the road ... I always thought they each had 40lbs of copper wiring in them, new construction wont they need copper wiring ? To make the steels I thought the ingredients were Iron ore, coking coal, zinc, Nickel and various other speciality metals like molly. So when I see say iron ore demand going up by 21% and copper projected demand going up by 6% or Nickel by 10% it just makes me wonder. wonder what the new cars will run on because certainly the oil demand numbers don't seem to reflect it.

Basically the basket is all tied together. Whilst copper not used in steel manufacture or oil, its the end products that will be using it.

Everyone agrees Iron ore demand will go this way, and remain firm yet when I look at projections for demand even in products used directly in steel manufacture like coking coal or nickel they seem shall we say interesting. Coking coal with new PCI ... pulverized coal injection methods into the blast furnace will require less of the product than before but still the overall numbers do not add up at all. One cannot make steel without coking coal, its impossible frankly.

So with all this in mind I cant see the prices going backwards too far. That's in USD.

Went though our own cash-flows and projects coming on line with this before ..... a few posts ago. For Australia a lot depends on the LNG projects post 2011 coming on line how black our surplus looks out there. When does Browse from WPL or Sunrise WPL or Scarbourough Exxon/BHP or Gorgon Chevron/Exxon/Shell finally become producers ?
The shameful record of the operators all foreign controlled mind you is absurd.
Gorgon the largest development projects with enough oil equivalent was discovered in 1981 and was planned to come on line in 2003 ... that was the scheduled date in 1999. So 8years later Chevron is now talking 2017 .... 14 years later yet only 9 years has passed.
In the last 4 years the price on LNG has tripled ... and a new record just set at US$11- MBTU was set weeks ago.

Anyhow .... they will happen either way .... eventually and are all very long term projects with an average of 25 years of reserves on them.

Continued in next post...

 

[doctorj]

Re: AUD is a short

...continued from previous

The one thing and release valve I have felt for a long time has been the currency. Right now I read the paper and all they talk about is interest rates and that's why the ozzie was here. Two weeks ago at 78 cents not a single person interviewed was of the view it went up and all talking it being at or near the peak. Still the same.

I disagree and will spell it out .... and have been for some time on this thread. Our current account deficit which has been running at minus 50 billion per annum will correct by 2011 as long as commodity prices remain roughly where we are. The expansion projects already nearly completed and coming on line at a furious pace in 2008 and beyond will take care of this. Even last week BHP announced another expansion in its iron ore capacity, its well aware of the demand outlook and its a race to keep up with things. Whilst ignored and yawned at by most a 25 million ton capacity increase is around 1.7% addition to our total export side for the nation. That's including everything ..... in one stroke up goes the export side 1.7% and it already looks bloody rosy unless you are from ABARE and predict oil will be US$48 in 2012 or Zinc and Nickle will halve in price and virtually every other commodity will be a blanket 30% lower in 4 years.

Just ask yourself if demand goes up by 60% on the export side which by the way global commodity prices are set off, would you call a 30% fall in prices ? Remeber whilst gloabl steel production is only going up 21% the export side to supply it needs to expand at 3 times the rate. Personally its the most idiotic thing I have ever seen in my life. I am NOT suggesting we see massive further advances from levels right now, we I suspect have seen the bulk of the rises already with prices here and now .... but I cannot see what ABARE is calling and doubt even the market economists calls of 15-20%. Honestly think its like jumping in front of a freight train going 160 km an hour and going stop !!

Now here is the contradiction, unlike virtually all forecasters I see something else happening with the currency as we go forward. Being a naughty old FX boy from the 1980's and having an economics's degree I am well aware of the dogma taught in universities about forecasting future prices. In the case of FX whilst I spent 12 hours in the office and then doing it part time I was forced to parrot this view if I wanted to pass. It if anything was worse with the masters course this was drummed in parrot like even harder. The forward rate is where everyone expects the currency to be in the future. Its why one virtually without exception will never see an analyst calling higher prices because he bases his view off one thing which has nothing to do with the other.

In the case of any commodity its usually a 3 year average or for my mates at ABARE with their US$50- 2010 oil call its a 5 or 7 year average. Since oil futures are US$67- for 2010 delivery hence we see the idiotic call being 34% below where the actual forward market is trading. It may go there but calling copper at 84 cents verses a spot of US$3- right now and even a forward well above this ... you get the idea.

Some economist not like this but the lazy ones are and rarely will one ever see the price estimation being higher than the current price rather than lower. Its just not done.
Apologies to the very few decent forecasting economist's ... but there are few around.

With the currency same thing. Always and I mean always its lower than the current spot price when taken as a group with the exception of the really lazy ones who use 5 year or 7 year averages like ABARE. The reason is a very simple one. Australia having a net foreign debt for 35 odd years has needed to attract foreign capital to the country and as such has needed to have an interest rate higher than the US to attract it. As such our rates being higher than the US... the interest rate differential has always with a few short lived exceptions ... has meant one could buy AUD at a discount forward against the US.
As such economists either traditional or lazy ones where we sit now will always call the exchange rate looking forward lower. Right now the interest rate differential is 2% so our rates are 2% higher than the USD and as such we can buy Ozzie at a 2% discount looking forward for each and every year. Just roughly if the spot rate is 80 cents the one year exchange rate would be 160 points lower at 7840 the two year at 7680 and so on.

This obviously has zero to do with anything. I am sure some will talk about cash and carry or some such stuff but it only becomes really attractive at higher differentials and sometimes as we saw the differential at 5% or MORE since float even that didn't stop the slide.

So here we are with a seemingly low differential on historic standards since float. Its certainly been lower but the average I suspect is somewhat higher.

My view on the currency based on commodity exports and projects coming on line has exports by volume out to 2011 growing by 31%. Not much can topple this. As such demands to attract capital which are at a rate of 50 billion per annum will fall to near zero by then. On a pure cash-flow basis the costs incurred in AUD and income mainly in USD also a factor. Not one hope in hell the ozzie goes down UNLESS China stops and commodity prices moderate by 30% in the next 4 years. Do you really see this happening ? ABARE does ....

My own view of the world is the currency keeps going up and whilst I totally disagree with the prices in USD falling for commodities and especially with India basically charging a royalty on iron ore exports to protect domestic reserves this now appears even less likely as time goes on.

As such all the cash-flows are heading one way, and whilst the current short term focus is on an interest rate rise, the RBA is going to have problems from the opposite direction I suspect within 12 months. How the hell to stop the currency going up ? Commodity prices if they don't fall which I don't think is a very big call given Chinese demand for steel will account for 66% of the projected rises is worked out already on the Chinese economy at 8% in 2008 and 7% 2009 .... with the Olympics I am not even sure of this.

For me 90 cents is the first stop. I suspect late 2008 we are there.
I suspect the release valve as per normal will be the currency and a $1- exchange rate post 2010 is not out of the question and even a 1970's sort of $1.10.

So right now every economist I am sure when asked calls for lower commodity prices, a lower ozzie and higher interest rates for Australia.

Me thinking this out ... short term agree on rates but as the currency goes higher we will in effect be just like China but in reverse. China exporting very cheap products for the last 10 years and likely the next 10 has in effect being exporting deflation. Us as a large importer of finished goods with a rising currency will be importing deflation.

So the next few months the focus will be on rates going up, but in the meantime the fact is with the currency 5% higher than a few months ago price pressures are heading the other direction at 100 miles an hour. As time goes on .... just like China's thirst for Iron ore and everything associated directly and indirectly with it .... up will creep the ozzie.

Having worked the time-lines the big year is not 2007 but 2008 with a lot of the larger commodity exports coming fully on line then.

Its a one way street I feel.

As such another big call is that the interest rate differential we have been forced to pay over US rates will disappear by 2010 as the RBA is forced into a war against the currency rises eroding export income and the deflationary effect of every single import becoming even cheaper. Your car price will fall 15% if the ozzie is at 90 cents, our exporters will cry blue murder. Certainly the pegging of commodity producers at low P/E's because the view USD prices will moderate will turn out correct but for all the wrong reasons. USD commodity prices remain here but the AUD going up deadens the impact. Suppose the analysts 15% fall in AUD prices are correct but for totally the wrong reasons.

Anyhow ..... a few big calls

AUD at 90 cents late 2008

AUD possibly $1- and beyond 2011

AUD interest rates lowered below USD rates and the 30 plus year interest rate differential disappears by 2010.

We import deflation and ultra low overall inflation for the foreseeable future.

Not sure what to do with all this ... importers making massive profits as the currency creeps up and they do not pass it on ... or slowly. Large exporters already pegged at low P/E's on the view commodity prices fall so no real change there they have already been priced all be for the wrong reasons ......

Enuf rambling from me ...

good luck .... just a very long held view of things ... AUD higher ... AUD rates eventually very very much lower .... and stronger for longer on the commodity side.

Not sure what that does to asset prices but its not another boom despite lower rates.

 

[wayneL]

Re: AUD is a short

...continued from previous

A lot of good points there Doc.

I would not be surprised if we see parity, at least briefly, sometime in 2008.
fwiw

 

[CanOz]

Re: AUD is a short

Having a go at basic analysis on these waves....Can someone comment please?

 

[doctorj]

Re: AUD is a short

A lot of good points there Doc.

I would not be surprised if we see parity, at least briefly, sometime in 2008.
fwiw

Without doubt an excellent post - most of which I'm still fully absorbing.

The question is, aside from forex, how is this tradeable? Go long aussie retailers (DJS, HVN, WES) and be weary of exporters?

 

[>Apocalypto<]

Re: AUD is a short

guppy on cnbc this morn said 82 top or at worst 82.5

will reload there

Don't listen to guppy Money tree.

Listen to what you can see on the chart!

Mate I will tell u Tom Schoulen from YTE mag made a call with E wave that Brent crude would go to 80$ a while ago I was all excited but I did not enter cuz chart said no and guess what it went to under 60!

I never trust no one but myself!

 

[theasxgorilla]

Re: AUD is a short

The question is, aside from forex, how is this tradeable? Go long aussie retailers (DJS, HVN, WES) and be weary of exporters?

If the Aussie market weathers this little storm and goes on to make new highs, and starts to again outperform other markets I'd expect inflows of foreign investment. Any funds invested in an appreciating sharemarket will be supercharged through AUD appreciation. Contrast this with the US, for example, where your asset price gains are erroded by a falling USD.

 

[nizar]

Re: AUD is a short

AUD/USD making new highs by the hour

 

[nizar]

Re: AUD is a short

AUD/USD making new highs by the hour

17 year highs

 

[>Apocalypto<]

Re: AUD is a short

17 year highs

O its great!

Opened a long this morning. Also my first ever FX trade.