Where Can We Go From Here?

There's a few theories regarding the $ weakness last week. Interest rate expectations, thin trading, automatic stops , however the question is? It's sort of a the automatic stops obtained triggered, but what was it that pushed against the Euro in the first place? For my money it's the diverging interest rate expectations. Without doubt the absence of traders allowed Europe to push the Euro greater, but may not NY jump on the bandwagon? There's just no data indiing the Fed will do anything but hold, particularly as they see core CPI moderating while home is remaining feeble, while the anticipation anyplace is to get the ECB to hike the rate, given that they see inflation staying above their desired degree.

If you have a look at a chart-the $ weakness really began in the London sesssion the afternoon after the previous core CPI reading, that affirmed the Fed's outlook in the November moments (for the time being) concerning the direction of their core CPI. Later that day, it obtained confirmed in NY.

Talking of home, there is serious debate regarding where the floor is really gonna be (and to what degree GDP is going to be affected), but there is a few things to know about:

The baby boomers are aging out of the home market and there is less of a people to buy new home. Housing is already owned by almost 70 percent of the US population. Housing retailers such as Lowes and Home Depot are not doing well. Inventories remain rather high. At these price levels, the affordability remains out of reach for a lot of the fewer buyers in the market. Any way you look the foreseeable future that there are less buyers offered and a lack of any indiors revealing a base.

There's lots of variables existing for arguing either way for your $: Fed rate cuts and ECB rate increases for $ weakness. NY could jump on the bandwagon and proceed with European traders; The ECB doesn't want the Euro moving higher, traders accepting profits and also the $ is high risk levels for $ power. . .definately not an enviorment.

Subsequently we had this German commerce minister saying German businesses were happy with the Euro rise-why would not they be? Considering all the wealth in London, NY and China-I'm convinced the market for luxury BMW's and MB's will not dry up if the Euro appreciates a bit...

I will tell you a funny coincidence though-some of these automatic stop levels matched in which I had some orders to buy the Euro. I reserved 2/3 of my profit because of Friday afternoon, so that I have 1/3 of my Euro long position. Maybe the same thing will happen in general...

Truthfully, if you're still Euro lengthy, I'd consider further diminishing the position. I want to see for hints in the open, then see how it trades in London determine if NY seems to be moving with the European traders. No forecast either way really, but once I've had a major gain (and price is at a level not seen for quite a very long time) I would rather take profit, then sit back and observe. I felt certain about leadership a couple of days I feel like that I don't. I'd like to try and assess market sentiment prior to taking another position. If you have a notion, more power to you.

The US data is sort of mild until GDP that's forecasted between 1.5 and 1.9. As there's no powerful data available to change overall opinion, that does portend to a further $ weakness. . .we'll see. The following chart lists the IFR estimate and is from ISR, followed by the number, consensus and consensus range.

DATE EST RELEASE PER IFR EST LAST MIED RANGE ]lt;? xml:namespace prefix = o ns = urn:schemas-microsoft-com:office:office /gt;lt;ogt;lt;/ogt;

28Nov lt;? Xml:namespace prefix = st1 ns = prefix:schemas-microsoft-com:office:smarttags /gt;lt;st1:time Minute=30 Hour=8gt;08:30lt;/st1:timegt; Durable Goods%m/m Oct -5.1 8.3 -5.1 -6.3 -3.0lt;ogt;lt;/ogt;

28Nov lt;st1:time Minute=30 Hour=8gt;08:30lt;/st1:timegt; ex Shipping%m/m Oct 0.1 0.5 0.1 -0.3 0.8lt;ogt;lt;/ogt;

28Nov lt;st1:time Minute=0 Hour=10gt;10:00lt;/st1:timegt; Cons Confidence Idx Nov 105.0 105.4 105.8 105.0 110.0lt;ogt;lt;/ogt;

28Nov lt;st1:time Minute=0 Hour=10gt;10:00lt;/st1:timegt; Existing Home Sales k,AR Oct 6140Â 6180Â 6140Â 6000 6250lt;ogt;lt;/ogt;

29Nov lt;st1:time Minute=30 Hour=8gt;08:30lt;/st1:timegt; GDP%,AR pQ3 1.5 1.6 1.8 1.5 1.9lt;ogt;lt;/ogt;

29Nov lt;st1:time Minute=30 Hour=8gt;08:30lt;/st1:timegt; Chain Wgt Pr Idx%,AR pQ3 1.8 1.8 1.8 1.8 1.8lt;ogt;lt;/ogt;

29Nov lt;st1:time Minute=0 Hour=10gt;10:00lt;/st1:timegt; New Home Sales k,AR Oct 1050Â 1075Â 1050Â 1000 1070lt;ogt;lt;/ogt;

30Nov lt;st1:time Minute=30 Hour=8gt;08:30lt;/st1:timegt; Initial Claims k 11/25 315Â 321Â 314Â 310 330lt;ogt;lt;/ogt;

30Nov lt;st1:time Minute=30 Hour=8gt;08:30lt;/st1:timegt; Cont Claims k 11/18 2455Â 2454Â 2428Â 2400 2455lt;ogt;lt;/ogt;

30Nov lt;st1:time Minute=30 Hour=8gt;08:30lt;/st1:timegt; Personal Income%m/m Oct 0.4 0.5 0.5 0.4 0.5lt;ogt;lt;/ogt;

30Nov lt;st1:time Minute=30 Hour=8gt;08:30lt;/st1:timegt; Consumption%m/m Oct 0.1 0.1 0.2 -0.1 0.2lt;ogt;lt;/ogt;

30Nov lt;st1:time Minute=30 Hour=8gt;08:30lt;/st1:timegt; Core PCE Deflator%y/y Oct 2.3 2.4 2.3 2.2 2.3lt;ogt;lt;/ogt;

30Nov lt;st1:time Minute=0 Hour=10gt;10:00lt;/st1:timegt; lt;st1:Citygt;lt;st1lacegt;Chicagolt;/st1lacegt;lt;/st1:Citygt; PMI Idx Nov 54.0 53.5 54.5 53.0 56.0lt;ogt;lt;/ogt;

01Dec lt;st1:time Minute=0 Hour=10gt;10:00lt;/st1:timegt; Construction Spendi%m/m Oct -0.5 -0.3 -0.3 -0.5 0.0lt;ogt;lt;/ogt;

01Dec lt;st1:time Minute=0 Hour=10gt;10:00lt;/st1:timegt; ISM Index Idx Nov 52.5 51.2 52.1 51.0 54.0lt;ogt;lt;/ogt;

01Dec lt;st1:time Minute=45 Hour=15gt;15:45lt;/st1:timegt; Domestic Vehicle Sl m,AR Nov 12.5 12.3 12.5 12.3 12.8lt;ogt;lt;/ogt;

01Dec lt;st1:time Minute=45 Hour=15gt;15:45lt;/st1:timegt; Car Sales m,AR Nov 5.3 5.0 5.3 5.2 5.3lt;ogt;lt;/ogt;

01Dec lt;st1:time Minute=45 Hour=15gt;15:45lt;/st1:timegt; Truck Sales Light m,AR Nov 7.2 7.3 7.4 7.1 7.5lt;ogt;lt;/ogt;