• Home
  • /
  • Blog
  • /
  • Markets In Transition..Continues – Part III

Markets In Transition..Continues – Part III

Picture of Wall Street fatcatI’m not sure what the BofA analyst is saying regarding China’s FX reserve numbers.  They reported a drop of $99.5 billion and that ‘kicked the can’ down the road for the US dollar for the time being.   There was a major shift of capital back into treasuries and out of equities and some commodities.  However, it would appear that while the Chinese Central Bank is attempting to pass the hot potato back to the dollar by defending the Yuan.  At the same time though with so many moving parts it is difficult to tell how severe the burns are.  The chain from the Yuan to the U.S. dollar and back can get tossed between several markets and sectors before it ends up back at the central banks.

Without a doubt, we are seeing some very high stakes being played out on an international monetary scale.  It would seem that to shift out of U.S. dollar positions has taken precedence and is more important than extending the stability of the global economy’s leader or number two is bound and determined to push itself into the number one position.   How that then transcends from one market to the next should always lead back to the currencies of the two major players, the U.S. and China.  At the moment, the pecking order remains fairly in line with the chart from last week, although I would lean more towards the top three being the U.S., China, and the EU.

Back to the markets responses to the China FX reserve number. While we wait for the interested parties to figure out how to prop up their economies without upsetting the proverbial “apple cart” there are more opportunities to trade than this mere human can keep track of — it has become essential to have a solid ‘auto-trader’ that performs for the better part – flawlessly.  Without it, I remain committed to the discussion of trading without emotions and operating with a tested and trusted signal generator. And without a less than expected number from China, the equity markets, of course, continued on their current trajectory with sudden and in some cases “Sid Vicious” turns.  It remains to be seen as to whether China will be able to reel in the mass exodus of reserve currencies.  At the moment the harder they attempt to prop up the yuan through the front door, by selling U.S. dollar reserves that are leaving out the back door and being moved back into the U.S. markets hand over fist!  The illusion remains that the U.S. has the best promise of a return.  The game remains afoot.


Tags

Algorithmic Trading, China, Chinese Yuan, day trading, Markets in Transition, S&P 500, U.S. Dollar, United States


You may also like

Leave a Reply

Your email address will not be published. Required fields are marked

{"email":"Email address invalid","url":"Website address invalid","required":"Required field missing"}

Commodity Futures Trading Commission: Futures and Options trading has large potential rewards, but also large potential risk. You must be aware of the risks and be willing to accept them in order to invest in the futures and options markets. Don't trade with money you can't afford to lose. This is neither a solicitation nor an offer to Buy/Sell futures or options. No representation is being made that any account will or is likely to achieve profits or losses similar to those discussed on this web site. The past performance of any trading system or methodology is not necessarily indicative of future results.

CFTC RULE 4.41 - HYPOTHETICAL OR SIMULATED PERFORMANCE RESULTS HAVE CERTAIN LIMITATIONS. UNLIKE AN ACTUAL PERFORMANCE RECORD, SIMULATED RESULTS DO NOT REPRESENT ACTUAL TRADING. ALSO, SINCE THE TRADES HAVE NOT BEEN EXECUTED, THE RESULTS MAY HAVE UNDER-OR-OVER COMPENSATED FOR THE IMPACT, IF ANY, OF CERTAIN MARKET FACTORS, SUCH AS LACK OF LIQUIDITY. SIMULATED TRADING PROGRAMS IN GENERAL ARE ALSO SUBJECT TO THE FACT THAT THEY ARE DESIGNED WITH THE BENEFIT OF HINDSIGHT. NO REPRESENTATION IS BEING MADE THAT ANY ACCOUNT WILL OR IS LIKELY TO ACHIEVE PROFIT OR LOSSES SIMILAR TO THOSE SHOWN.

Content on this site is for educational and entertainment purposes only. Nothing on this site should be viewed as trading advice.