Daniel Mankani "DynamicTrader – Trend Trading Dynamics" Trading for a living, systematically profiting from longer term trends.


The Loonie has broken to the downside and Yen is capped around 83.45.

The Loonie has broken to the downside and The dollar  is capped against the Yen at around 83.45, And whereas it looks like the bounce levels for CHF at 0.91 figure and EUR at 1.3245 appears near conclusion. Am not sure, if these breaks and  if it does, there is more upside for the currencies and more downside for the dollar, against the CHF and the EURO. {Targets CHF 89.60 / EURO 1.3455 levels}

This break above 1.3245/0.9100 {below} is required to provide confirmation that the US stock market rally is extending, and targets Dow 14000/1450 SP. In such a scenario, the currencies also extend and the recent weakness in the JPY can see it take out 83.50.

About 83.50 on the  JPY puts 85.50 into target, a key resistant level, whose break is required to provide evidence that the move for the USD towards 92-94 YEN is indeed underway. The JPY is the only trend at the moment that looks extremely healthy and with the most potential,  The bottom right, as expected, now for the larger big move, we have been waiting for will present itself in the coming weeks.

Only, If the bounce concludes, for the EURO and CHF and there is a reversal, JPY trend trade could be in danger as we shall see a lower stock market and cash moving back into safe havens, which the YEN has lately demonstrated a few times, as it inverse relationships to US stocks takes hold.

In the longer term, been parked in the dollar will look better than stocks, which are now over extended and there has been some substantial damage done for the bears, none are to be seen, the VIX has been crying out aloud.

Stocks may be poised to go crazy to the upside and it could be relatively fast and furious, with 14000 within weeks, and the SP 1450 in sight. Good levels to position to jump in on the turn around.

Never forget the short squeeze of the late nineties, The Nasdag went from 1000 to 5000 in a relative short period of time. Yes!, the Nasdaq gained close to 500% in a relative short period of time. 15 months {Oct 1998 to March 2000 bust). We could see a repeat here.

The stock bulls are pushing it once more again, very soon some juicy steaks will be on the table.


Short the Loonie, proxy to US Stock Markets

The loonie has been extremely resilient in the emergence of the US Dollar, which is gaining ground lately against most of the Majors, with the loonie been the most defiant, seems when the turnaround comes, the Loonie will provide confirmation of a stock market peak.  last USDCAD:0.9931, Key levels are 0.9950 close above signals, short term low in place, a sustained move above 1.0050 puts in on track for 1.0275 and potentially higher levels,  a move below 0.9975 (close below) questions this bias.


The New Trends

The New Trends - 1st Quarter 2012.

Lets analyze what are we witnessing thus far.

1. In the previous quarter, consumer spending was still bid based on availability of cheap deals and deal based sites were the master of the day, it seems the deals sites in the current interim have now started to bleed, with lack of availability of any new loss making deals, which didn't go well with merchants and with reluctance of merchants and retailers to go down this path, the deals have not only dried up, as they realize the very little value additions by deals based websites to their business.  Case in point, low numbers of groupon and various other deal sites.

The consumer is more cautious and will not pay for anything that he doesn't need and involves in extensive research in an event he needs anything, be it a product or service. A tight market in general, with uncertain conditions, inability to determine tomorrow. Therefore save for a rainy day, mentality presets.

2. Volume has never been so bad in the markets, bearish bets have declined to almost a five year low, with the Vix breaking down below 15 yesterday, the same remains with retail sales figures across most markets, yet somehow government reports differ, on the dry bulk market, shipping is in a very bad shape.

The above two factors are sufficient to suggest that growth is missing in this stock market rally and till that is fixed, it hard to see how else will the situation turn around.


Realty Investments – What’s in Store for 2012?

Real Estate Investments Report 2012
For those that are still looking for a bottom in real estate prices, here are a few things to consider.

1) In recent years, for most countries Real Estate construction has been a major factor of their GDP, this in turn has seen excesses build up everywhere, in Asia this is the most evident, except India/China, where the first home buyers market demand still remains, elsewhere there are huge tracks of buildings just sitting idle.

2) High land values of the past years have seen projects that come onto tap, have to be prized higher than the past as such, the sellers are quoting rates which do not justify to the buyers and the buyers are looking for deals, which have yet to materialize, hence a market where very little trading happens become evident.

What happens next?

This quite market scenario is bearish, investors who continue to remain long within their portfolio will either have to make a choice, to continue holding up rates, similar to a trader who chases a buy with a lowered out of market bid, or a seller who wants to sell, but the prices he wants are always above the market.

In general a quite market, with a bearish bias.

As the dollar comes back, most export oriented economies will take the route of devaluation and rightly so, fiscal indiscipline will be paid by lowering its cost, it has always been this way, in dollar terms most of assets priced today will become relatively cheaper and a situation such as that after the 1995 real estate peak, Asia could witness lower prices in real estate and a stronger dollar, a double whammy for foreign investors.

Prime Land values will hold up.

Land values within city centers will continue to be an institutional play and as a hedge against the hyper inflationary scenario. Here again, it all depends on the level of ongoing creative destruction, since the political parties may continue with their populace preferred policies and scarcity and availability of cheap prime land is a thing of the past, we could witness a margin squeeze as developers chose to build affordable housing instead of luxury.


Dollar emerges above 80.12 Finally

The dollar Index is making a come back. The trend against the JPY has been the strongest and there has hardly been any let back, look for continued upside bias and buy any dips, upon clearing 85.50, monthly charts turn up and this has been something what we have been waiting all along. A 3yr run upto 125 YEN could be in the making.  (working on a few long trades, will be regular once again!)

Filed under: Financials Comments Off