Playing the I fund

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Does anyone see some sort of rebound in EFA as an oversold trade, after such impressive downward moves in the markets. Especially now that the U.S. indices appear to be rebounding, and oil appears to be dropping on news that the U.S. has offered to join Europe diplomatically (with significant conditions, of course) provided that IRAN renounces nuclear weapons development?
 
Show-me said:
The question is becoming how far will it go down?:sick:
Click to expand...

As long as I keep hanging tough... and breaking even after a loss... there really is no reason for me to pull out because it seems you pull out one day then the next day the action is positive. That's enough to drive someone insane trying to "time & tame" this monster. So I simply stay put unless I hit my target price to pull out.

Today's action is a perfect example, if it holds, because Japan should react positively to US markets. WE should have that .25 back back the end of the week and possibly a few more pennies.
 
The European Central Bank is expected to raise interest rates on June 8, one week from today. The question is: by how much. What does it mean for us??

1. With higher rates, money flow into U.S treasuries will lessen as it goes into European bonds instead. Bad for the F fund.

2. The increase should tend to push the dollar down. Potentially good for the I fund, BUT, interest rate increases cause drops in stock prices. The question is: how much of a rate increase is already priced into European stocks. If all of it is, a short term spike in the Euro may give us an opportunity.

We have a week to talk about this: Is there a short term opportunity that is reasonably predictable and possibly playable??
 
Pilgrim said:
The European Central Bank is expected to raise interest rates on June 8, one week from today. The question is: by how much. What does it mean for us??

1. With higher rates, money flow into U.S treasuries will lessen as it goes into European bonds instead. Bad for the F fund.

2. The increase should tend to push the dollar down. Potentially good for the I fund, BUT, interest rate increases cause drops in stock prices. The question is: how much of a rate increase is already priced into European stocks. If all of it is, a short term spike in the Euro may give us an opportunity.

We have a week to talk about this: Is there a short term opportunity that is reasonably predictable and possibly playable??
Click to expand...


As I understand, the dollar will keep dropping this year in relation to other currencies. It is difficult to predict the short-term moves in the markets in relation to the currency fluctuations. Opposing views exist, so there is risk involved. Recent economic news point to a slow down. A slow down in the U.S. economy. If signs of inflation remain contained, the FED might not raise rates come June 26; but then again, the FED must check a dramatic drop in the dollar which might produce a desperate outflow of money from U.S. assets, thereby affecting our standard of living. A raise in rates by the FED makes investing in the dollar more enticing. Always striking a balance...

As you noted, a raise in interest rates by the ECB might give us a short-term opportunity in the I fund. We also have to be aware of seasonality factors during the summer months. Also, there are technical analysts whose stock market indicators point to a short-term bounce in equities for a few days (when the markets would again be overbought), and then, a retest of last week lows would occur. I am inclined to take most of the funds today from the I fund, into the G fund in order to preserve capital. Other opportunities will arise down the line. Only an opinion...
 
Pilgrim said:
The European Central Bank is expected to raise interest rates on June 8, one week from today. The question is: by how much. What does it mean for us??

1. With higher rates, money flow into U.S treasuries will lessen as it goes into European bonds instead. Bad for the F fund.

2. The increase should tend to push the dollar down. Potentially good for the I fund, BUT, interest rate increases cause drops in stock prices. The question is: how much of a rate increase is already priced into European stocks. If all of it is, a short term spike in the Euro may give us an opportunity.

We have a week to talk about this: Is there a short term opportunity that is reasonably predictable and possibly playable??
Click to expand...


As I understand, the dollar will keep dropping this year in relation to other currencies. It is difficult to predict the short-term moves in the markets in relation to the currency fluctuations. Opposing views exist, so there is risk involved. Recent economic news point to a slow down. A slow down in the U.S. economy. If signs of inflation remain contained, the FED might not raise rates come June 26; but then again, the FED must check a dramatic drop in the dollar which might produce a desperate outflow of money from U.S. assets, thereby affecting our standard of living. A raise in rates by the FED makes investing in the dollar more enticing. Always striking a balance...

As you noted, a raise in interest rates by the ECB might give us a short-term opportunity in the I fund. We also have to be aware of seasonality factors during the summer months. Also, there are technical analysts whose stock market indicators point to a short-term bounce in equities for a few days (when the markets would again be overbought), and then, a retest of last week lows would occur. I am inclined to take most of the funds today from the I fund, into the G fund in order to preserve capital. Other opportunities will arise down the line. Only an opinion...
 
Trichet will go .25%

Increased bank lending implies ECB needs to raise rates further.

.50% rate hike will further destabilize the financial markets at this point.

Rates are still too low. Watch ECB; consecutive rate hikes likely.
 
Since I am new playing the I fund, I will appreciate your insight and experience. Assuming that the European Central Bank (ECB) raises interest rates on June 8, since there is no guaranty that this will occur with complete certainty, is it better to position oneself before June 8 or is it wiser to wait for the increase? Or maybe it is better to take partial positions and wait for the decision to go full throttle?
 
Pilgrim said:
The European Central Bank is expected to raise interest rates on June 8, one week from today. The question is: by how much. What does it mean for us??

1. With higher rates, money flow into U.S treasuries will lessen as it goes into European bonds instead. Bad for the F fund.

2. The increase should tend to push the dollar down. Potentially good for the I fund, BUT, interest rate increases cause drops in stock prices. The question is: how much of a rate increase is already priced into European stocks. If all of it is, a short term spike in the Euro may give us an opportunity.

We have a week to talk about this: Is there a short term opportunity that is reasonably predictable and possibly playable??
Click to expand...


Good questions and comments. I'll try to respond by explaining my outlook and why I am taking certain actions given this particular set of choices. It appears that you are taking a trading approach in terms of trying to time a move based on what you percieve the ECB is going to do reference their approach to monetary policy. Why do you think the ECB is moving in this direction regarding rates? Here's an interesting link that might help support your reasoning. Hedge funds and bond speculators have pretty much hijacked the equity markets throughout the world and are using them as collateral to back their bets against the Central Bankers of the world in terms of trying to predict the direction of interest rates. These bets are starting to go awry BIGTIME. This is starting to strain liquidity throughout the world. Be careful trying to time this event. It's now the CB's move. Good luck.


ECB warns of hedge funds risk to stability


https://registration.ft.com/registr...s/s/a6da85b2-f19b-11da-940b-0000779e2340.html
 
roguewave said:
Good questions and comments. I'll try to respond by explaining my outlook and why I am taking certain actions given this particular set of choices. It appears that you are taking a trading approach in terms of trying to time a move based on what you percieve the ECB is going to do reference their approach to monetary policy. Why do you think the ECB is moving in this direction regarding rates? Here's an interesting link that might help support your reasoning. Hedge funds and bond speculators have pretty much hijacked the equity markets throughout the world and are using them as collateral to back their bets against the Central Bankers of the world in terms of trying to predict the direction of interest rates. These bets are starting to go awry BIGTIME. This is starting to strain liquidity throughout the world. Be careful trying to time this event. It's now the CB's move. Good luck.


ECB warns of hedge funds risk to stability


https://registration.ft.com/registration/barrier?referer=http://www.usagold.com/business/cpm/cpmforum/&location=http%3A//news.ft.com/cms/s/a6da85b2-f19b-11da-940b-0000779e2340.html
Click to expand...

I found this article quite useful. The ECB is warning of a possible crisis as a consequence of Hedge fund activity threatening global financial stability. This danger might be similar to (or worse than) the Long Term Capital Fund crisis of some years ago, and I envision that the best place to be if that were to happen would be the G fund. However, do you agree that today's economic numbers are positive short-term and that these are more favorable to the I fund short-term than other funds?
 
roguewave said:
Good questions and comments. I'll try to respond by explaining my outlook and why I am taking certain actions given this particular set of choices. It appears that you are taking a trading approach in terms of trying to time a move based on what you percieve the ECB is going to do reference their approach to monetary policy. Why do you think the ECB is moving in this direction regarding rates? Here's an interesting link that might help support your reasoning. Hedge funds and bond speculators have pretty much hijacked the equity markets throughout the world and are using them as collateral to back their bets against the Central Bankers of the world in terms of trying to predict the direction of interest rates. These bets are starting to go awry BIGTIME. This is starting to strain liquidity throughout the world. Be careful trying to time this event. It's now the CB's move. Good luck.


ECB warns of hedge funds risk to stability


https://registration.ft.com/registration/barrier?referer=http://www.usagold.com/business/cpm/cpmforum/&location=http%3A//news.ft.com/cms/s/a6da85b2-f19b-11da-940b-0000779e2340.html
Click to expand...

How does one read this? Subscribe? Sign up for a free 15 day trial?? Would you copy and paste this into a word file that we all could see?

Thanks,

Pilgrim
 
Japan Up big.
Most of Asia up big.

London Up a bit.
Most of Europe Up a bit, or up big.

Dollar plunges again in the last half-hour- adding the "compounding exchange rate" factor.

Could this be another "more than 1% gain" day for the "I" fund? ? ?

Looking that way already :D
 
U.S. DOLLAR ANALYSTS COMMENTS:


Michael Woolfolk, economist at the Bank of New York
Friday, June 2, 2006
AFX News - "While the report certainly does not argue for a Fed rate hike in June, the market is left split 50/50 awaiting the release of the May CPI report on June 14."


Richard Dekaser, chief economist at National City Corp.
Friday, June 2, 2006
BBC News - "This latest report (non-farm payrolls) takes pressure off the Fed to hike rate in June."


Ken Landon, senior currency strategist at JP Morgan.
Friday, June 2, 2006
Reuters - "Initially, this (non-farm payroll) is dollar-negative. I think this really cements the case that they (Fed policy-makers) will wait for more data and maybe wait until August."


Greg Anderson, senior currency strategist at ABN AMRO.
Friday, June 2, 2006
Reuters - "The FX market response is what you would expect from such a weaker number: lower dollar across the board."


Ron Simpson, director of currency analysis at Action Economics.
Friday, June 2, 2006
Reuters - "The market will now pay close attention to fed fund futures. Looking at Treasury yields, they are considerably lower. The market will move to quickly thinking the Fed will stand pat in June, which will put downward pressure on the dollar."


Michael Metz, chief investment strategist at Oppenheimer Holdings.
Friday, June 2, 2006
Reuters - "It was a bit of a surprise to see such a drop, and at the same time, only a minimal increase in salaries. It indicates the economy is losing momentum and if things continue like this, it builds the case for a pause by the Fed at the next FOMC meeting."


Jay H. Bryson, global economist at Wachovia Corporation.
Friday, June 2, 2006
Wachovia Corporation - "The dollar has pared some of its gains due to a batch of softer-than-expected U.S. economic data. Initial jobless claims rose a bit more than expected last week, pending home sales in April fell to their lowest level in over two years, and the ISM index of manufacturing activity dropped more than expected in May."


Boris Schlossberg, senior currency strategist at FXCM.
Friday, June 2, 2006
FXCM - "In short NFP remains key. A weak number will put pressure on the Fed to pause in June as talk of 'overshooting' will fill the airwaves. Given the fact that this economic news will be released into the start of the mid term election season in the United States, the pressure on the Fed will not only be economic but political as well. In contrast a strong payroll number will provide the FOMC with a carte blanche to follow the most appropriate monetary path."


Gavin Friend, currency strategist at Commerzbank.
Friday, June 2, 2006
Reuters - "If we do get a poor payrolls number we could easily see the dollar get to $1.29 (per euro) and then test one-year lows as we start next week. The market is jumping on any signs of economic slowdown and selling the dollar."


Maury Harris, chief U.S. economist at UBS.
Friday, June 2, 2006
MarketWatch - "The recent uptrend in claims suggests that employment growth has started to slow."


Joseph LaVorgna, economist at Deutsche Bank.
Friday, June 2, 2006
MarketWatch - "We should not overreact to the payroll report, at least in terms of what it means for the Fed. There is a lot of data between now and the end of June."


John Kyriakopoulos, currency strategist at National Australia Bank.
Friday, June 2, 2006
Ninemsn - "The Fed is still in play, which will support the U.S. dollar ahead of tonight's key payrolls report for May."


Ashraf Laidi, currency strategist at MG Financial Group.
Friday, June 2, 2006
MG Financial Group - "The dollar received a triple shot of life from an unexpectedly strong Chicago PMI survey, an announcement from Washington stating a conditional willingness to open dialogue with Iran and a hawkish release of the May 10 FOMC minutes indicating the Fed’s preoccupation with a falling dollar."


Mitsuru Sahara, forex manager at Bank of Tokyo-Mitsubishi UFJ.
Friday, June 2, 2006
Reuters - "Right now, the market's view on the Fed's policy is divided. In such a circumstance, the market is easily swayed by a column by an influential writer."


Tim Fox, currency strategist at Dresdner Kleinwort Wasserstein.
Friday, June 2, 2006
Reuters - "After the minutes and a slew of U.S. data, we have had a lot of volatility in the past 48 hours. The risks for the dollar are to the downside from the employment data."


Ashley Davies, strategist at UBS.
Friday, June 2, 2006
AFX News - "As this week's FOMC minutes made clear, the Fed outlook is very data dependent as the Fed manages rising inflation pressures against the potential that domestic demand adjusts lower. Hence non-farm payrolls today is key to US dollar direction."


David Mozina, New York based currency strategist at Lehman Brothers.
Friday, June 2, 2006
AAP - "Following the weak data (in the US) it did take the heat out of the (Federal Open Market Committee) minutes that had a positive impact yesterday. Following the ISM data we had some pretty soft numbers in the vehicle sales, we saw the (US) dollar weaken but over the 24 hour session the damage looks to be modest."


Kazuyuki Kato, dealer at Mizuho Trust & Bank.
Friday, June 2, 2006
AFX News - "The market now lacks convincing long-term trading leads, so any single economic indicator can move the market either way. And if today's nonfarm payroll data is strong enough to convince the market of another rate hike at the FOMC meeting in June, the dollar could move up. If the data is disappointing, the dollar may ease, but its downside will be limited thanks to its yield advantage over Japanese interest rates."


John Peters, senior economist at Commonwealth Bank.
Friday, June 2, 2006
AFX News - "The earnings data will be watched closely for signs of further acceleration, which would add to the case for a further Federal Reserve hike in June."


Tristan Hanson, strategist at London-based stock broker Cazenove.
Friday, June 2, 2006
Reuters - "What will be quite important today is the wage inflation number because that will certainly be one thing the Fed will be paying a lot of attention to in terms of the outlook for interest rates. If we do see wage inflation accelerating materially then I think the interest rate markets won't take that well."



More U.S. DOLLAR ANALYSTS COMMENTS


http://www.fxstreet.com/nou/continguts/senseframesnoticiasanalyst.asp?pv_divisa=USD
 
Rod said:
WE should have that .25 back back the end of the week and possibly a few more pennies.
Click to expand...

Gained the .25 back PLUS .17 on top of that.:cool:

See what I mean???:D
 
"C" =14.09
"S" = 17.47
"I" = 19.71

Congrats to "I" investors, this weeks big "comeback kid", and "S", for the friday-to-friday first place finish....
 
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