Greed is Good?

July 27, 2005 20057 5:42 pm | In Trading | 1 Comment

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Missed writing about the market at the beginning of the week. Nevertheless, I'll start from mid-week. My trades are predominantly based on the USD, so I'll only be writing about the GBP/USD and the EUR/USD pairs. I tend to use a mix of fundamentals and technicals in my trades (rojak =P)!

Mid-week USD outlook: Bullish

A further tightening of the US monetary policy is expected. Greenspan's clear announcement last week that the tightening rate will continue (i.e. increasing interest rates thus giving the USD a firm tone, reinforcing the USD's yield advantage), underpinned by waves of bullish data this month (e.g. today's Durable Goods data was stronger than expected) has made traders to be in favour of the USD.

Also news that IBM is planning to repatriate about USD$9B usd in foreign earnings, taking advantage of the temporary repatriation incentive from the American Jobs Creation Act is holding the USD up.

Today's US Federal Reserve's Beige Book is expected to paint a rosy picture of economic conditions across the country, and to cement expectations of further interest rate hikes to come. Watch out for this Friday's Real GDP figures though!

Now to the currency pairs, outlook for this mid-week onwards:

GBP/USD - Bearish!

Recent terrorist attacks, expectation of an interest rate cut in August, slowdowns in UK spending, stagnating housing market prices, cooling in the labour market and contracting manufacturing sector - things don't look too good for the mighty British economy!

Analysts have expected the rate to go under 1.70 in Auguest if this conditions continue. Technicals seem to suggest the same sentiment as well.

EUR/USD - Neutral

The pair was fighting it out at the 1.20 level yesterday and even with a strong German IFO business sentiment survey (which suggested that the worst may be over for the EU economy) which causes a sharp hike for a moment resulted in a drop down again to the 1.20 zone. Also somewhat in an odd way, the ECB reported a substantial forex reserves decline of EUR$1.2B without any explanations - huh? Could be the summer effect, traders get a bit disoriented during this harsh period =)

Hard to pinpoint any direction from technicals/fundamentals, so I'll have to say it's neutral.

On the Ringgit issue, read this well-written article: Link

Finally to end on a funny note, with the Yellow/White/Pink/Purple bands you see around to promote something, check the Greed Band out! Yes - like Gordon Gecko said "Greed is Good"!

DISCLAIMER: All this are only boringest's views/opinions and do not qualify as investment advice/recommendations. It is not a production of my employer, and is unaffiliated with any FX broker/dealer. The information on this site is provided for discussion purposes only, and are not investing recommendations. Under no circumstances does this information represent a recommendation for FX trading.

Opera!

July 23, 2005 20057 12:56 am | In Tech | Comments Off

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Been looking at the stats of my websites and I've been wondering why so few use Opera as their browser of choice!

This is honestly the best browser that's available on the planet right out of the box!

Why?

1. Speed - Time is money, so why not choose a browser that'll save you time!

Here are some comparisons made on the same computer with no tweaks made on both browsers:

A Javascript test from 24fun:

Opera: 5.77 seconds

Firefox: 9.95 seconds

~1.7x faster than Firefox on the same computer!

Next, Opera has a smart rendering system (a combination of deliberate FOUC rendering) which gives higher priority to the loading of text and hence readable content will appear faster. See the next set of pictures to see how big the difference is:

15ms on Opera vs 5782ms on Firefox! 384.5 x faster!

You can test your browser here.

2. Mouse Gestures - the feature that convinced me that Opera's the one for me. This feature has been available on Opera browsers since 2001 in version 5 and furthermore it's configurable! What this does is it allows you to 'draw' an imaginary diagram on the screen using the mouse while holding down the right mouse button and it activates a command:

Frequently used Mouse Gestures by me:

• If you do an L on the screen, it'll close the tab.
• Move it to the right & it'll go forward/fast forward (e.g. in Google Search result you can just move your mouse instead of scrolling down and then press next)
• Move it to the left & it'll go back to the previous page
• Move it downwards on a link and it opens on a new tab
• Move it downwards & then upwards again, and it opens the same content on a new tab
• Move it upwards & then downwards again, and it reloads the page.

So effectively this means you'll never need buttons anymore (you can remove/add them very easily in Opera) and you can surf Full-Screen!

*I understand that this feature is available on Firefox which some programmer has copied but only through an extension which means you have to go search for it and then download to your computer and there's no guarantee that it'll not cause bugs/problems.

3. Configurable Bookmarks - what this means is that you can give a nickname to the bookmark group.

E.g. You have multiple email accounts on Yahoo, GMail, Hotmail, etc and you group them under 'Emails' in your Bookmarks. Give them a nickname, say 'Email'.

So, the next time you wanna open up your emails, you don't have to manually open them up 1 by 1, but just type in 'Email' in your address bar and voila! - all the websites that are within the group will open up in separate tabs!

4. Embeded Mail and RSS program - no need to download additional programs/extensions, once you see an orange XML/RSS button, just click on it, a textbox will appear to confirm if you want to subscribe to the feed and there you go once you press Yes.

The email program is also integrated and it fully supports IMAP, POP, etc.
5. Tiny program - space efficient! Only 5.2MB total when installed and it includes an integrated RSS/Email reader! (+Bittorrent for the latest version)

6. Undo - ever experienced accidentaly closing a window, but want it back on again? You can undo this just by pressing Ctrl-Z and the previously visited website opens in a new tab. A history for the session is also available, so let's say you have visited 100 pages and you wanna go back to page 1 you visited an hour ago, you still can by clicking the 'Trashcan' icon.

7. Page-Zoom - this allows you to zoom the whole page - not just the text and the graphics are smoothed while zooming which makes it great for pictures which are too small to be seen.

For advanced users:

8. UserJS - what this does is that you can customise the use of Javascript on a website to customise to your needs e.g. removing the Google Image frame when loading a picture, highlighting the words that you searched for in Google in the destination webpage, add Google Suggest to your address bar or even to allow the use of Greasemonkey scripts from Firefox!

9. UserCSS - some websites are still designed for IE so it'll appear different in Firefox/Opera which can make it unreadable sometimes. This allows you to change the website according to what you like everytime you visit the page.

10. Ultimate Customising options - almost everything can be changed on Opera, from adding new panels to adding new buttons - it all can be done on Opera!

So are you convinced yet? Why not try it out yourself and decide for yourself:

Unpegging the Ringgit

July 22, 2005 20057 3:32 pm | In Thoughts | Comments Off

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Source: China Revaluation

A lot has happen in the past 24 hours - China revaluates the yuan and announcing plans to move into a basket of currencies, bombings again in London, largest fall in US jobless claims and Malaysia follows suit with China by unpegging the Ringgit!

Wow! So what does this mean to us plain folks?

While others are worried about their reduced Adsense earnings, the Bank Negara stepping in to prevent a rapid appreciation, this is what I gather after reading the reports. Of course, there's no right or wrong to this, since we can't see the future:

1. Oil prices will go down - Why? China is one of the largest importer of oil, so naturally when the yuan strengthens, China exports get more expensive and ppl think this will slow down the economy. This should happen in the medium term as things will go back to its previous state considering China's rapid economy growth. However, there's a countering argument since oil is priced in US dollars, crude oil will be realtively cheaper for Chinese importers. Thus, they'll buy more now and drive oil prices up.

2. +1 to China diplomatic relations - By revaluing the yuan, this gives a clear signal that China's a cooperative trade partner and shows a growing maturity of the Chinese economy.

3. Malaysia made the right choice in unpegging the Ringgit - With total exports of about $123.5 billion and $26.25 billion in that to China (~21%) makes our economy quite reliant on China. If we have stayed on the 1USD = RM3.8 peg, we would have make huge losses in trade, while unpegging it and making sure that it stays within a certain trading band comparable to China makes perfect sense to me.

4. Expect Chinese corporations to venture out of China now - with reports of China trying to gain favour to get approval for deals such as Unocal (an American oil company), this might eventually be true.

As I speak/write, the USD is rising against the major currencies - GBP, EUR, JPY.

Most analyst expects China's trading bands to widen soon. I personally do not think so, since everyone's been speculating the yuan revaluation since 2002, and it has only happened now. Although there are signs of Chinese economy overheating, I believe the Chinese goverment would like to sit-and-observe the situation of the current revaluation first before anything else happens.

The 14 Fallacies

July 21, 2005 20057 11:11 pm | In Finanducation | Comments Off

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We're often tricked by the news/fundamentals when trading FX. Thus, I have tried to note down the 14 major fallacies that we meet everyday. This is from Jack Schwager's "A Complete Guide to the Futures Markets".

1. Viewing Fundamentals in a Vacuum
2. Viewing Old Information as New
3. One Year Comparisons
4. Using Fundamentals for Timing
5. Lack of Perspective
6. Ignoring Relevant Time Considerations
7. Assuming that Price Cannot Decline Significantly Below the Cost of Production
8. Improper Inferences
9. Comparing Nominal Price Levels
10. Ignoring Expectations
11. Ignoring Seasonal Considerations
12. Expecting Prices to Conform to Target Levels in World Trade Agreements
13. Drawing Conclusions on the Basis of Insufficient Data
14. Confusing the Concepts of Demand & Consumption