Friday, September 14, 2007

British Pound, the Yen and the Bank of England

I would like to bring to your attention the chart of the British Pound. (chart below). Long term up trend still intact but today's action is disconcerting to say the least. This is what (today's action) happens when central bankers lie. Just when some might think the ghost of Paul Volker is alive via Mervyn King at the Bank of England and his refusal to bail out commercial banks today he does an about face and bails out Nortern Rock . Unbelievable, makes me think that prudence and risk management are not only obsolete but they an impediment to success today. The less you know, the less you fear and ergo the better you do, until you don't but then its not their money they're gambling with, right?

The chart of the Pound (above) shows the gap down today thru short term up trend after forming a lower high. Not good.



The chart above of the Yen paints a very bullish picture. The Yen carry trade, borrow in yen and convert to finance other investments Aussie dollar, U.S. stock, CDO's, etc. This is THE prop under this market and as the Yen goes(up), opposite shall go the markets(down). Good trading to you all.

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