Blog Roundup

Ron Sen on Dollar , Yen and inflation.

The last time the US economy weakened, the Fed had the luxury of slashing rates from 6.5% to 1%. This time it won't be so fortunate. At the beginning of the last easing cycle the Japanese 2-year was around 0.5% and the Japanese 10-year was below 2%, and both were falling. This time, both are rising. Will foreign investors accept a Fed Funds rate of 1% if the Japanese 2-year is above 1% and the Japanese 10-year is around 3%? In that scenario, money would likely pour out of dollars and into yen, weakening the dollar relative to the yen and severely hindering Japan's ability to sell goods to us. Of course, the Japanese could cut rates to be in synch with us (like the US did with Great Britain in the 1920s to help keep the UK on the gold standard), but they've been fighting rate hikes for so long that if they're ready to proceed with them now, they must really fear that inflation is a concern. So again this would present global central banks with the choice of inflation if they keep rates too low, and deflation if they keep rates too high.

Trader-X explains his way of looking at candlesticks.

I love candlesticks. At one time, I thought they were the holy grail. Almost ten years ago, I spent a lot of time studying Nison's books and videos and became an "expert". Now I know they are not the holy grail, but they are still an important part of my trading and I would never trade without them.

While on the topic of candlestick, Trade Ideas introduced 12 Major Japanese Candlestick Patterns recognition alert a few weeks back. I don't use TI. Nor do I use candlesticks in my trading.

Bill Cara has his take on various markets:
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I believe the equity markets are at a crossroads now that remind me in a way of 1999. The issues have been resolved: Does that great equity bear attack now or is it going to be impeded for a time by a mountain of paper money being printed by central bankersÂ… To cut to the chafe, I think the equity markets are not yet ready to go bearish. I see (i) certain ones like Japan and the U.K. basing solidly, (ii) the U.S. markets going through a rolling bear with signs of accumulation on the dips, and (iii) hesitancy on the part of the commodities-sensitive markets like Canada, Brazil and Australia, but none with clear bear signals being given. If equity markets don't go bearish then - given that markets never flat-line - I think they are going higher, just like Dec-99.

At BlogginWallstreet there is a bad news for Madd Money fans. Non-Lightening Round Picks No Better Than Index