Playing the I fund

[ebbnflow]

One of the reasons I moved to the F Fund for Monday was because of the yen losing ground to the dollar two weeks in a row (-1.1% last week). I want to err on the side of caution and at the same time be in good position to capitalize by Wednesday when I'm back in the I Fund.

 

[airlift]

I believe that you are playing this correctly. The I-fund in itself is quite volatile, and also requires dealing with currency issues, which only adds to the complexity. Have you, or anyone else reading this, been able to measure the impact of China's actions last Friday? As you may have noted, the European markets started Friday on a positive note at 3:00 AM EST, but went negative when the news came out that China was requiring Foreign Banks to increase their reserves if they wanted to lend money. It appears that the Chinese took this measure in order to curb speculation? Apparently Europe was hit the hardest. If there are any other currency issues of importance that I might not have noticed, I would like to hear someone explain the potential impact on the dollar in more detail...Maybe the dollar will keep rising on the expecation that the FED's increase on June 29 will strengthen the dollar, but maybe it will start dropping once the FED takes action? (Food for thought) Hope to read any other views on this matter.

One of the reasons I moved to the F Fund for Monday was because of the yen losing ground to the dollar two weeks in a row (-1.1% last week). I want to err on the side of caution and at the same time be in good position to capitalize by Wednesday when I'm back in the I Fund.

 

[robo]

Bullish indicators on the dollar.

Support about 83.00. Rally could head up to around 87.00 to 88.00.

 

[airlift]

Can anyone expand on the dollar possibilities going forward? Robo, I use StockCharts.com. Does anyone else use other charting service? Indeed, my chart shows what appears to be a double bottom support at around 83.50, with upward resistance at around 88.00. This could happen in theory, but unless some crisis should occur and act as a catalyst to have the dollar as a safe-haven currency, it would not seem likely. The summer is usually a slow season, and the U.S. is facing a lower trend for the dollar. I see however, that the dollar is overbought from a Stochastic indicator point of view. It does not mean that it can't rise further, but don't you think that with other international currencies raising their own interest rates, it would be a stretch to expect the dollar to rise around 2.4% from 85.97, where it is today?

Bullish indicators on the dollar.

Support about 83.00. Rally could head up to around 87.00 to 88.00.

 

[JOVARN]

http://www.iht.com/articles/2006/06/18/bloomberg/sxpesek.php
Regardless of how things turn out for Fukui, this scandal is the last thing the Japanese economy needed. Let's hope it doesn't interfere with bringing this long-awaited revival to the next level.
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http://news.yahoo.com/s/nm/20060616/bs_nm/markets_japan_stocks_dc_12

Still, Kobata added the Nikkei's upside may be limited due to concern about possible rate hikes in Japan.

A Reuters survey showed on Friday that Japanese financial markets still expect the BOJ to end its zero-rate policy as early as July despite a recent sell-off in Tokyo stocks.

The Nikkei share average was up 381.13 points at 14,851.89 as of 0458 GMT. The capital-weighted TOPIX index (^TOPX - news) was up 2.93 percent at 1,529.56.

Hiroaki Kuramochi, managing director at Bear Stearns (Japan) Ltd., said there would be some political uncertainty in Japan ahead of September when Prime Minister Junichiro Koizumi is expected to step down.

Some investors are also wary of Japan's financial system after high-profile fund manager Yoshiaki Murakami was arrested on suspicion of insider trading and Bank of Japan Governor Toshihiko Fukui has come under fire for his involvement in the fund.

"Some domestic worries have not been completely erased," he said.
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http://go.reuters.com/newsArticle.j...pe=businessNews&storyID=12550633&pageNumber=1

UPSIDE LIMITED

Hiroaki Kuramochi, managing director at Bear Stearns (Japan) Ltd., said there would be some political uncertainty in Japan ahead of September when Prime Minister Junichiro Koizumi is expected to step down.

Some investors are also concerned about Japan's financial system after high-profile fund manager Yoshiaki Murakami was arrested on suspicion of insider trading and Bank of Japan Governor Toshihiko Fukui came under fire for his involvement in the fund.

Analysts said a possible rise in Japanese interest rates is also a concern as a Reuters survey showed on Friday that Japanese financial markets still expect the BOJ to end its zero-rate policy as early as July despite the recent slide in stocks.

 

[JOVARN]

These reports like plagiarism to me I wonder how much of it is true. It appears that a word or two has changed but the message is almost identical.
Make you wonder if we/I should even be concerned with the text of these articles.
Just doesn’t seem right to make changes in the TSP based on a sound bit and then all the talking/writing heads spin the same bite.

Hard to see the forest through the trees

 

[JOVARN]

guess I should use spell check more often

 

[robo]

Can anyone expand on the dollar possibilities going forward? Robo, I use StockCharts.com. Does anyone else use other charting service? Indeed, my chart shows what appears to be a double bottom support at around 83.50, with upward resistance at around 88.00. This could happen in theory, but unless some crisis should occur and act as a catalyst to have the dollar as a safe-haven currency, it would not seem likely. The summer is usually a slow season, and the U.S. is facing a lower trend for the dollar. I see however, that the dollar is overbought from a Stochastic indicator point of view. It does not mean that it can't rise further, but don't you think that with other international currencies raising their own interest rates, it would be a stretch to expect the dollar to rise around 2.4% from 85.97, where it is today?

I wish I knew. The TA's I follow use charts and Market Instincts the same way you are. Does it make them more accurate than you? NO. Some TA's are in cash, some are short, some are long the market. They all have very convincing charts and opinions on why or why not the dollar and the market will go up or down..

Now, you can put up your money at Profunds for a Rising US dollar or a Falling US dollar. I wish I knew which fund to Buy, but I don't. The TA's I follow short-term say Up. However, NO ONE, NO ONE, NO ONE KNOWS FOR SURE. Good Luck on whatever you do. I will tell you this, If the US markets rally so will the I Fund, or down goes the US down goes International. However, your concern on the dollar direction is very valid. It can help or give you the double wammy!!! I have no opinion on the dollar personal only that of the professionals I pay, and current postion is Bullish. ( Could change tomorrow.)

Boy, it sure would be nice If I could find one that could get it right all the time. You get my point. Your opinion is as good as anyone elses, but they charge for it.. I leave it to guys like Henry to explain to me what you are asking, and just when I think I understand. Well, you know what Happens. Mr. Dollar Market kicks my butt again. Having Professionals advise me takes some of the emotion out of investing and more time for beer and pizza!!!

Remember when gold hit 720.00 a ounce. Traders run things up and down for reasons that are beyond me. That includes the dollar my friend!!!

Dr. Volkmar G. Hable agrees with you and thinks the dollar is headed down. Read his report in the weekly talk section.



Take care!

Good Investing/ Trading

http://www.profunds.com/profiles/BondBenchmarked.asp

 

[airlift]

I want to thank you all for your good response to my concerns. We seem to be at an oversold level even if only for the short-term. The uncertainty is not over yet, so I believe the most conservative way to go is to be diversified; and once you see the direction of the markets we may want to shift a greater percentage to the S and/or I-funds if it's to the upside, or to the G-fund if otherwise. in order to take advantage of the higher gains, or lesser loss if the direction should be down. It's important, however, to keep this site well posted because someone here might be able to see or be aware of something of importance that was missed by others! In my case, I will use some funds to buy the I-fund and S-funds, because I believe this is mostly profit taking, and thus a buying opportunity in an oversold market. Perhaps buying some tomorrow and some more if it falls further. I ask tolerance in my spelling and grammar. My best wishes for good trading to you also. To all, keep an eye of the international scene, with all the problems and challenges!

 

[Robo5555]

Thanks for all the great views and words. I'm starting to feel bullish again.

 

[nnuut]

Japan/Asia is becoming a real drag again. Now Japan and North Korea are at it about Nuc missle testing. Never should have let those Knuckle Heads have Nucs.

TOKYO (Kyodo)--Prime Minister Junichiro Koizumi warned North Korea on Monday that Japan will respond with ''stern'' actions if Pyongyang launches a ballistic missile and urged the North to abandon its nuclear arms program to become a responsible member of the international community.
http://www.nni.nikkei.co.jp/

 

[Robo5555]

U.S. stock futures were pointing to a bright start to the week, with the dollar on the rise and the telecommunications industry back in the spotlight after Nokia and Siemens agreed to merge their equipment arms.

 

[Robo5555]

Dow Jones futures were recently up 37 points, S&P 500 futures rose 4.2 points, and Nasdaq 100 futures improved 6 points.

Last week, the Dow industrials rose 1.1 percent while the Nasdaq Composite and the S&P 500 slipped. Friday's trading session ended with modest losses for the benchmark indexes, with volume heavy because of quadruple witching, or the simultaneous expiration of options, index options, futures contracts and single-stock futures.

Overseas markets were split Monday, with Tokyo's Nikkei 225, the Hong Kong's Hang Seng and the Seoul Kospi down on a combination of China tightening lending requirements and a North Korean missile test.

But European markets were mostly higher after the Nokia-Siemens deal, with Siemens rallying 8 percent and Nokia, the world's leading mobile phone maker, rising over 4 percent.

 

[fabijo]

Looks like the I fund is -.337% today. Much better than -4%

 

[sugarandspice]

About -.06 cents?

 

[Birchtree]

With the ECB raising rates there is little sign of a break for companies that export to the U.S. They already have seen the dollar fall 8% against the euro this year, causing the value of their U.S. revenues to fall, while their euro costs stay high. Any rise in euro interest rates could strengthen the currency further as it attracts investors lured by the higher returns. Yet eurozone companies are proving better able to absorb the currency shock than just two years ago, when the euro reached similar levels. No one in euro land however is complaining primarily because of globalization and a healthier economic backdrop. Now the dollar has been hovering around 1.30 to the euro and sits graphically in a head and shoulders pattern - what's next.

The European companies have expanded their cost bases and export markets into Asia and elsewhere in recent years. As a result the dollar-euro exchange rate has become less critical to the 12-nation euro currency bloc than the trade-weighted index, which charts the euro's progress against a basket of global currencies. While the euro is up about 8% against the dollar this year, the euro's trade-weighted index is up only 3%. Seems like a good long term secular play when the hedge funds finally depart the scene.

 

[Fivetears]

The NIKKEI Marketeers are at it again -174.69 (-1.18%) as I type.

 

[Fivetears]

Australia AORD is down under too; -46.600 (-0.96%)

 

[JOVARN]

Oil prices fall to $69 on Iran ‘positive N-signal’Published: Tuesday, 20 June, 2006, 10:05 AM Doha Time

LONDON: Oil fell almost a dollar to $69 a barrel yesterday after major oil exporter Iran said there was a positive atmosphere in the dispute over its atomic work, easing concern about threats to oil supply.

http://www.gulf-times.com/site/topi...o=92974&version=1&template_id=48&parent_id=28
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"The IMF (economic) services think that a sharper depreciation of the value of the dollar ... could be necessary to bring the US current account deficit to a sustainable level," he said. afxbrussels@afxnews.com vm/jlw
http://www.iii.co.uk/news/?type=afxnews&articleid=5683055&subject=economic&action=article

 

[airlift]

This is not easy. Of course, nobody told me it would be. If you want to increase the value of your TSP account, you should be ready to learn and to assume some degree of risk. This is nothing new. We all know that. Even the G-fund has some risk, especially with so many financial difficulties and geopolitical issues.

I still believe that a reasonable portfolio to consider is what Tom Crowley is doing. I have no personal interests in what he is doing, and I don't even know him, but I do have a great respect for his opinion and the efforts he is making. All of this is a combination of art and science..., including measuring the amount of greed and fear that market participants have at different times.

Although I am keeping some reserves in the G-fund, in case the markets fall further, as of yesterday, I have transfered a significant percentage of my account to the S and I funds, taking on a greater risk than what Tom is taking. There are no guarantees, of course; but, what I have learned from people who know much more than I do (including Rev Shark, who writes in this website), is that at some nearby point the markets should come back and that the TSP portfolio will benefit significantly. That's why I am keeping some dry powder ready.

Excuse my rambling away, but this is the first time I do an interfund transfer to the I-fund, and I wanted to share my experience with you. Most of the analysts I follow agree that we are very close to a low (if we have not already been there). So, aside from some unforseen financial surprise or geopolitical event, we might go up from here because the markets are very oversold. My own technical analysis reflects all of this. Some anxiety and cold sweat? Of course! But I believe we should do well from this general area and that we will be rewarded handsomely in the second half.

The housing start numbers just came out at 8:30 (they are stronger than expected), and they could impact the markets and the FED in ways which I don't know how this will play out.

My best wishes and Good luck to all!