Friday January 20, 2006 - 11:31:41 GMT
Share This Story
Black Swan Capital - www.blackswantrading.com
“Marriage has many pains, but celibacy has no pleasures.”
Liquidity lives! It’s tough these days to distinguish the Nasdaq Composite from the Gold futures. Notice how they are moving together of late:
It suggests the “reflation trade” is back because the Fed is close to done. Bank Credit Analyst summed it up recently in a piece titled, “Reflation Returns”:
“Last year, these markets generally churned, held back by the strong dollar, hawkish Fed and unprecedented rise in energy prices. The outlook is brightening because the Fed is nearly finished tightening, energy prices have leveled off and the dollar has started to weaken. Stronger currencies abroad will reduce the need for higher overseas interest rates, and could see a return of the foreign exchange intervention-induced liquidity boom in Asia, given the recent strength of the yen, Korean won, etc. Consequently, reflation trades should once again be the leaders.”
Reflation evidence was apparent based on yesterday’s Nasdaq price action as an Abandoned Baby Japanese candlestick pattern on was traced. This is often a strong bullish indicator (very much like an island reversal pattern):
For now, the US dollar is holding its own…but if “reflation” rears its juicy head that could change things for the buck quite quickly.
Take care and enjoy your weekend.
Black Swan Capital
Forex Trading News
Daily Forex Market News
Forex news reports can be found on the forex research
headlines page below. Here you will find real-time forex market news reports
provided by respected contributors of currency trading information. Daily forex
market news, weekly forex research and monthly forex news features can be found
Real-time forex market news reports and features providing
other currency trading information can be accessed by clicking on any of the
headlines below. At the top of the forex blog page you will find the latest
forex trading information. Scroll down the page if you are looking for less
recent currency trading information. Scroll to the bottom of fx blog headlines
and click on the link for past reports on forex. Currency world news reports
from previous years can be found on the left sidebar under "FX Archives."