Drop in JPY/USD (29-10-2009 JPY)

After the two mid-term examinations, I finally got some time to do some analysis. Below is a brief analysis for JPY. We can see that after touching the upper line of the down-trend, the rate is going down again. Norway has lifted its Benchmark Rate to 1.5%, becoming the first European central bank to raise the rate after the crisis. It is likely that the other European countries would eventually follow. As there is still no obvious signs for US economy to be recovering nor inflation increases, the rate in the US may not follow what the others are doing.

USD is likely to be weaker in the future, and the other currencies would be likely to advance. Would it be a good time to short JPY/USD?

Important news from Bloomberg (26-10-2009)

Nelson Says Senate to Extend, Reduce Homebuyer Credit (Update1)

By Ryan J. Donmoyer and Dawn Kopecki

Oct. 26 (Bloomberg) -- Senate leaders are negotiating to extend and gradually reduce an $8,000 tax credit for first-time homebuyers through 2010, Senator Bill Nelson of Florida said.

“We should be able to extend that later this week,” Nelson, a Democrat, told reporters traveling today with President Barack Obama on Air Force One to a speech in Jacksonville, Florida.

Senate Majority Leader Harry Reid of Nevada and Senate Finance Committee Chairman Max Baucus of Montana, both Democrats, may seek to add the homebuyers extension to legislation extending unemployment benefits that may be debated as early as this week, according to Regan Lachapelle, an aide to Reid.

Lawmakers are under pressure from real estate agents, mortgage brokers, and homebuilders to extend the $8,000 credit before it expires Nov. 30.

Baucus and Reid made a proposal last week to Senate Republicans that would extend the homebuyer credit through 2010, Lachapelle said. First-time homebuyers who close before April 1 would get the full $8,000, and the credit’s value would be reduced by $2,000 in each successive quarter until expiring at the end of the year.

The proposal was intended to counter one by Senate Banking Committee Chairman Christopher Dodd, a Connecticut Democrat, and Senator Johnny Isakson, a Georgia Republican and former realtor, to extend the full $8,000 credit through next June, and to expand it to all couples earning $300,000 or less. The Baucus- Reid proposal would continue limiting the benefit to first-time homebuyers, Lachapelle said.

Business Tax Break

Baucus and Reid also proposed an extension of a business tax break that allows companies with losses in 2008 and 2009 to amend tax returns for any of the previous four years to get a refund of taxes paid. Without the benefit, companies would have to wait years to apply those losses against future profits.

A version of the benefit was included in last February’s economic stimulus bill, though it was limited to companies with receipts under $15 million. A lobbying effort by business groups, including the Washington-based National Association of Manufacturers, to extend the benefit to all companies failed at the time; the Obama administration has since proposed a broader benefit in its budget.

The terms for extending the homebuyer tax credit are still being negotiated, Lachapelle said.

To contact the reporters on this story: Ryan J. Donmoyer in Washington at rdonmoyer@bloomberg.netDawn Kopecki in Washington at dkopecki@bloomberg.com

A big obstacle (22-10-2009 HSI Analysis)

After touching the 50%-line, HSI dropped a bit. However, it was still inside the uptrend channel. If tomorrow HSI could breakthrough the 50%-line (around 22490), it would be expected to rise greatly to as high as 24000 in the few months. If HSI drops tomorrow, there would be a supporting uptrend line at 21750.

Limited drop of USD against EUR (18-10-2009 Currencies)

After speculation that the Federal Reserve would trail central banks in raising interest rates, USD has dropped to 14-month low against Euro. By using fibonacci projections, there is a great barrier of 50%-line at 1.5058. Together with the block by the uptrend line, I believe the crazy rise would have a pause at around 1.5050. It would be a good idea to short Euro when it reaches this level.

Put now? (16-10-2009 HSI analysis)

Led by the report from JP Morgan Chase & Co., HSI today had a great rise till as much as 22,250.35 at the opening. Unfortunately it could not keep the momentum and dropped till 21,971.48. After doing a analysis on HSI using fibonacci projection in last five years, I have found the 50%-point at 22,393.88. I believe tomorrow (16-10-2009) would have a rise in the opening led by the better-than-estimated earnings by Goldman and better-than-estimated losses by Citigroup.

Gold? Gamble?

Let me draw an analysis on Gold which I believe many people have seen on television or reports by analysts. Including the fibonacci retracements, price of Gold would probably rise greatly till its 168.1%: 1,248.67.

People often say that trading is like gambling, so the following advice is made: Gamble it.

Let's Get Started

Let's start the first post in this blog. I have briefly done some analysis regarding the Hang Seng Index (HSI). The previous high is at 21,929,79. This is a large barrier for HSI. By the technical analysis, HSI should be fluctuating in the rising triangle. Once it breaks through it, it will be rising straightly upwards. However, what we have to be concerned of is the gap of 248.46 on 6/10/2009. It would lead to a significant drop if the gap is to be re-filled.

Until now, there is still no strong evidence to show whether the market is going up or down. I believe it is better for us to lock the previous profits and keep waiting for a while.