A quick recap of some numbers out of China this weekend:
- Factory production climbed 10.1 percent in November from a year earlier – 10.1%!
- Retail sales growth accelerated to 14.9 percent – 14.9%!
- The consumer price index rose 2 percent from a year earlier.
- Fixed asset investment excluding rural households in the first 11 months of the year rose 20.7 percent.
- Output of rolled steel rose 16.5 percent in November from a year earlier. (That’s a lot of steel).
- Growth is on track to rebound sharply above 8 percent this quarter.
Wasn’t it just a couple of months ago that the headlines (well….at least those out of the U.S) where riddled with talk of “China’s fall” “China’s Hard Landing” or “The Chinese Economy Derailed” – I think not. The growth engine is chugging right along, and I see absolutely nothing but “sunshine and rainbows” ahead for the Chinese economy.
China is now Australia’s largest export market, with trade worth at least $115 billion a year so continued growth in China should bode well for both Australia and neighboring New Zealand as well commodity rich Canada moving forward.
Companies supplying construction and mining machinery (such as Caterpillar Inc) should also look to do well.
The continued theme of “staying long the commodity currencies” should prove to be a strong strategy in the months ahead.
I’m looking at AUD/USD to kick off things this week, and silver. The lead up to FOMC should be bullish.
Sounds right on the money Kreks!
Pot Stock Watch,
You talked about leading and lagging indicators. Is one of your premise that forex technical analysis signals (e.g. AUY/USD and AUY/JPY) have a good probability of being leading indicators?
It’s nothing new in a broad sense – as risk related currencies such as the AUD are always benifactors of “risk on” activity in general.
What “is” a leading indicator is 100% pure price action – as opposed to some kind of boxed “oscillator” built on moving averages and “lagging” data.
There is no substitution for pure price action in dictating market direction as my charts contain no other boxed / prefab oscillator other than an RSI for the smaller time frames.
Hope it helps!
China Trade data didn’t verify,data is easy MoM due to Oct holiday. Aussie longs are levels not seen since 1993, everyone and their dog is playing the QE Fed this week which was already telegraphed by the WSJ. BTW you have a fan that pointed you out at Ibank coin Fly’s spot fwiw.
Sounds good tradingnymph – with all things considered, I just can’t find a single reason to be anything but long risk here.
I see the dollar rolling over hard here in coming days – and Bernanke money hitting the market just can’t be denied. I don’t like a guy with that many chips sitting across the table from me, and have learned not to push my luck. It all does line up quite “telegraph” here at this point – no doubt. As long as Im on the right side – telegrpah away!
I love the guys over at Ibank and have been avid reader for sometime now. It’s great to hear that anyone from “over there” is also reading here – yourself included!
I hope to get your input here – don’t be a stranger.
Too many on the same side of boat on the risk on trade…normally that means the boat sinks.
I continue to “trade what I see” – until proven otherwise – and will let the markets show me it´s next move.
I will need to see Bernanke’s 85 Billion per month rendered completely and totally ineffective in supporting risk ( which I also believe will happen as subsequent “QE´s” have less and less impact) before I’ll even consider looking short.
As it stands…..this thing is gonna blast higher pronto – and the buck is gonna tank hard – Bernanke style.
Every Algo Program is set up in the same manner, If QE is only source of catalyst, it could get really ugly, really fast. In 2009/2011 we had not just Bernanke, but cordinated moves from the other key central banks.Now, it looks like BoE is tapped out for now (Merv was talking about waiting until late 2013 to even start to see their QE effect), ECB can’t engage OMT until Spain asks, and Spain won’t ask cuz it will mess with bond yields (so imho its a stalemate), BoJ will add stimulus next week imho, so Yen will sell off/if we go risk off then USD is the place to be. China Govt talks about stimulus, but not talking real money.Fed just one part…will be interesting week.
plus Cad got their Nexen boost, but buzzard is open now and Iran behaving…Oil should continue to pull off if that QE is not all that and a bag of chips…85 B may not be enough for a global that is in recession.
In my view – the central banks (now as co ordinated as ever) have already made their choice – to simply print til inflation eventually breaks the back of the average joe – as the can kicking continues. As you’ve outlined – EVENTUALLY it wont work, but I don’t expect that anytime soon – perhaps trading in a range / flat through 2013, and then tanking sometime in 2014.
I have no concern for the algos / rip job in the U.S equities markets, as currencies move in a much broader/slower/ manner – much like turning the wheel of a large ship – the turns can take months (pull the reversal in USD/JPY and note the multi month consolidation – based simply in the fact that the U.S will be forced to raise rates before Japan (if they ever do)).
Again – I trade what I see – and save the “prophecies” for the Maya.
F/X can swing fast and hard, imho Equities (all) are just the tail of the big dog of F/X/bonds/commodities. Trend followers work, until it doesn’t…I would rather understand it, that is the fun part of all of this. USD/JPY move is not all based on that imho, a lot more moving pieces…
The swings are most definitely fast and hard if you are maxed out on leverage, trading ridiculously small time frames – I don’t trade that way as it is a recipe for novice account liquidation.
A difference of opinions most certainly is what “makes a market” as many have different views as to “why” things move in the manner they do. I don’t care so much for the debate, as we all see things differently – more importantly that I/we make money.
Opinions are suggestive of “emotions” – and again – I’ve got no real interest in that…..at least as it pertains to trading.