Candlesticks, Bamboo Sticks

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Originally uploaded by iiiink.

Currency trading using candlestick charts is similar to observing a bamboo thicket.
But without the serenity. A 30-minute candlestick chart sometimes gives a pattern like the picture. When it does, the market is consolidating quietly. But when the momentum shifts, one must act accordingly. King Kong may have entered your quiet grove.

Fine Line

Icy Bridge
Originally uploaded by WisDoc.

Sometimes trading currency reminds me of this icy bridge. You can see your way ahead for a few feet and it is treacherous, but beyond that it gets mysterious. As Paul McCartney says in his recent song, Fine Line: There is a fine line/ Between recklessness and courage/ It's about time/ You understood which road to take/ It's a fine line/ And your decision makes a difference/ Get it wrong and you'll be making a big mistake//

Meat Slicer

Meat Slicer
Originally uploaded by enuwy.

My year in England spanned fall 1975 to fall 1976. I enjoyed the local traditions, and one especially was the costume of the butcher. I'm glad to see that some things never change. This photo was uploaded to the web today. Trading currency markets is a lot like being a butcher. You take the raw meat and put it in little packages for your customers. It is a traditional occupation with no end in sight. Some people find it exciting?

PIMCO Manages over $463 billion in Assets

Bill Gross, managing director of PIMCO, widely regarded as the country's leading fixed income authority, may be worth a listen when he publishes his outlook.

FRB: Speech, Greenspan--Budget policy--December 2, 2005

Well worth reading and studying. Alan Greenspan is having a farewell party in London this weekend at the G-7 meeting. The text is at www.federalreserve.gov

Economy growing but at uneven pace: Beige Book - Banks - Financial - Industrial, Diversified - Retail - Financial Services - Industrial Products & Ser

Just in case you thought the Beige Book was something to ignore. Perhaps beige is not your favorite color? The Fed does not wave red flags. That would alarm the high-strung financial community too much. Most of what they say is very neutral. The beige flag is about all you will get--thank goodness.

PIMCO Bonds - IO December 2005

I learned today that William H. Gross, Managing Director of PIMCO (Pacific Investment Management Company) is known as a Bond Guru.

He has just published at www.picmo.com his investment outlook for the next year. One could do worse as far as prophesies go. It is only 4 pages. Well worth a look.

Raghee Horner's Book, ForeX Trading for Maximum Profit

EC_ProductDetail

Bush Names Bernanke to Replace Greenspan

U.S. stocks logged their biggest one-day gain in six months as Bernanke's nomination laid to rest market uncertainty over who would by Greenspan's replacement. Bond prices ended lower on worries a Bernanke Fed could take an easier line on inflation, despite his assurances on Monday that he would steer the central bank along Greenspan's course.

As if these yahoos know why the market went up or down today. So much pretended knowingness.

Great New Picture of the Author

Larry Williams calls The Zurich Axioms "The best book I have had the joy to read on speculation."

The Zurich Axioms Article at Michael Covel Blog

Larry Williams in his book, Trade Stocks & Commodities with the Insiders--Secrets of the COT Report, mentions that Max Gunther's 1985 book The Zurich Axioms is "The best book I have had the joy to read on speculation." A fingernail version is available on this blog. Check it out.

But he paid it all back with interest on Monday!

On Monday, October 10, Phillip Bennett, CEO of Refco the futures broker, was placed on leave of absence at the Board's request. It was announced that an internal review found that he had failed to disclose owing the company around $430 million. Refco stock had closed around $28 on Friday. It closed on Monday less than $16. Refco said it must restate earnings back to 2002 and delay filing its next quarterly report, originally scheduled for next week.
Bennett was said to have repaid the $430 million with interest Monday.

On Tuesday, October 11, a story about Mr. Bennett and Refco appeared in the Financial Times and many other places. On the same day,

Federman & Sherwood Announces That a Securities Class Action Lawsuit Was Filed Against Refco, Inc.
On October 11, 2005, the class action lawsuit was filed in the United States District Court for the Southern District of New York against Refco, Inc. (NYSE : RFX) . The complaint alleges violations of federal securities laws, Sections 10(b) and 20(a) of the Securities Exchange Act of 1934 and Rule 10b-5, including allegations of issuing a series of material misrepresentations to the market which had the effect of artificially inflating the market price. The class period is from August 11, 2005 through October 7, 2005.

Plaintiff seeks to recover damages on behalf of the Class. If you are a member of the Class as described above, you may move the Court no later than Monday, December 12, 2005, to serve as a lead plaintiff for the Class. However, in order to do so, you must meet certain legal requirements pursuant to the Private Securities Litigation Reform Act of 1995.

If you wish to discuss this action, participate in this suit, or have any questions or concerns regarding this notice, or preservation of your rights, please contact: William B. Federman FEDERMAN & SHERWOOD 120 N. Robinson, Suite 2720 Oklahoma City, OK 73102 (405) 235-1560/FAX: (405) 239-2112 Email to: wfederman@aol.com - http://www.federmanlaw.com

SOURCE Federman & Sherwood William B. Federman of Federman & Sherwood, +1-405-235-1560, or fax, +1-405-239-2112, or wfederman@aol.com http://www.prnewswire.com

That's pretty quick, William Federman of Oklahoma City! The stock closed Tuesday at less than $14.



Warning Issued to Past and Current Shareholders of Refco, Inc. by the Law Firm of Lerach Coughlin Stoia Geller Rudman & Robbins LLP
On October 11, 2005, the law firm of Lerach Coughlin Stoia Geller Rudman & Robbins LLP ("Lerach Coughlin") (http :) (http :) filed a complaint on behalf of all those who purchased the common stock of Refco, Inc. ("Refco" or the "Company") (NYSE :) (NYSE : RFX) . The complaint alleges a series of false and misleading statements associated with the company's accounting practices and follows a lengthy investigation by Lerach Coughlin. Since Lerach Coughlin filed a complaint, The Law of Firm of Schatz & Nobel has issued a press release claiming to offer "information" about joining the suit. Be advised that this firm has not even filed a complaint. Rather, the press release appears to be an advertisement designed to solicit clients so that the firm can participate in this case.

You too are very quick on the draw, Lerach!

On Tuesday, the New York-based Refco said it had voluntarily contacted the Securities and Exchange Commission, the U.S. Commodity Futures Trading Commission, the New York Stock Exchange and other regulators, and was co-operating with their inquiries.

On Wednesday, October 12, Phillip Bennett was arrested by federal prosecutors and charged with securities fraud in U.S. District Court in Manhattan a day after Refco announced that a $430-million-US debt to the company owed by a firm controlled by the ousted chairman and chief executive was hidden through secret transfers to an unnamed customer account.

Securities Fraud Class Action Against Refco, Inc. is Filed by Scott+Scott, LLC
Scott+Scott, LLC (http :) represents investors in a securities class action filed today in the United States District Court for the Southern District of New York against Refco, Inc. ("Refco") (NYSE :) (NYSE : RFX) and certain of its officers and directors. Refco securities purchasers between August 11, 2005 and October 10, 2005, inclusive (the "Class Period") are putative class members. Refco provides execution and clearing services for exchange-traded derivatives, and brokerage services in the fixed income and foreign exchange markets in the United States, Bermuda and the United Kingdom. Refco went public via an initial public offering in August 2005.



Wechsler Harwood LLP Files Securities Class Action Suit Against Refco, Inc. -- RFX
Wechsler Harwood LLP today announced that it has filed a Federal Securities fraud class action suit on behalf of all other persons or entities who purchased or otherwise acquired Refco, Inc. ("Refco" or the "Company") (NYSE :) (NYSE :RFX) common stock pursuant or traceable to the Company's Initial Public Offering ("IPO") on August 11, 2005, and on behalf of all other persons or entities who purchased or otherwise acquired Refco common stock between August 11, 2005 and October 10, 2005, both dates inclusive (the "Class Period").

The action entitled, FrontPoint Financial Services Fund, LP. v. Refco, Inc., et al., Case No. 05-Civ-8663 (DC)(RHM), is pending in the United States District Court for the Southern District of New York seeks to pursue remedies under both the Securities Act of 1933 (the "Securities Act") and the Securities Exchange Act of 1934 (the "Exchange Act") and names as defendants, the Company, certain of its senior officers and directors, as well as its commercial/investment bankers/underwriters involved with the Company's IPO. A copy of the complaint can be obtained from the Court or can be viewed on Wechsler Harwood web site at: www.whesq.com.



Pomerantz Haudek Block Grossman & Gross LLP Commences Securities Class Action Against Refco, Inc. -- RFX
The Pomerantz Firm (www.pomerantzlaw.com) has filed a class action complaint in the United States District Court, Southern District of New York, against Refco, Inc. ("Refco" or the "Company") (NYSE :) has filed a class action complaint in the United States District Court, Southern District of New York, against Refco, Inc. ("Refco" or the "Company") (NYSE :) (NYSE :RFX) , two of its officers, certain underwriters and the Company's outside auditor. The class action was filed on behalf of public investors who purchased the common stock of Refco during the period of August 11, 2005 and October 7, 2005, inclusive (the "Class Period"). It includes those investors who purchased the common stock of Refco pursuant and/or traceable to the Company's initial public offering on August 11, 2005 ("IPO").



Milberg Weiss Announces the Filing of a Class Action Suit against Refco Inc. and Certain of Its Officers and Directors on Behalf of Investors
The law firm of Milberg Weiss Bershad & Schulman LLP announces that a class action lawsuit was filed today on behalf of purchasers of the securities of Refco Inc. ("Refco" or the "Company") (NYSE :) (NYSE : RFX) between August 11, 2005 and October 7, 2005, inclusive (the "Class Period"), including purchasers of the Company's shares pursuant or traceable to the Company's initial public offering (the "Offering") on August 11, 2005. The action seeks to pursue remedies under the Securities Act of 1933 ("Securities Act") and the Securities Exchange Act of 1934 (the "Exchange Act").

Shares dropped 28% on Thursday morning before trading was halted by the New York Stock Exchange.

According to a Bloomberg story today, to remain out of jail, Bennett was forced to pledge his Park Avenue apartment in Manhattan and his country horse farm in New Jersey, along with $55 million in a bond and cash.

FRB: Speech, Greenspan--Closing remarks--August 27, 2005

FRB: Speech, Greenspan--Closing remarks--August 27, 2005

FRB: Speech, Greenspan--Reflections on central banking--August 26, 2005

http://www.federalreserve.gov/BoardDocs/speeches/2005/20050826/default.htm

Thinking With Mergers and Acquisitions in terms of Foreign Exchange

FX Power Student center: "Mergers and Acquisitions

What are they?

� M&A Deals -> Average 1% Appreciation in Target's Currency

� Every $1 Billion Dollars -> 0.5% Positive Impact on Target's Currency

Mergers and acquisitions (M&A) involve the combining of two corporations or the acquisition of a part of a corporation by another corporation. Large cross border M&A activity of greater than US$500 million often has an impact on the Foreign Exchange market. A study done by the Bank for International Settlements (BIS) disclosed that large M&A deals cause the target corporation's domestic currency to appreciate 1%, on average, relative to that of the acquiring corporation. In fact, the report finds that in the period immediately after the deal is announced, there is generally a strong upward movement in the target corporation's domestic currency (relative to the acquirer's currency). Fifty days after the announcement, the target currency is then on average 1% stronger. Based upon this sample, every $1 billion deal has an approximately 0.5% positive impact on the target currency. The study also showed this impact to peak at around 5%.

How are they used in Foreign Exchange?

� All Cash Deal -> Most Significant Impact � All Stock Deal -> Minimal Impact

� Stock & Cash -> Impact Based Upon % of Cash

It is very important for traders to consider the specifics of the deal itself. For instance, deals comprised entirely of stock swaps rarely have an impact on the FX market because there is no foreign exchange transaction taking place. On the other hand, deals involving large cash transfers strongly affect the FX market. Deals involving a mixture of both elements require a more in depth assessment of the relative value of the cash portion of the transaction and whether or not it is significant enough to move the markets.

The following charts are examples of two deals done in 2003 and another in 2000. In each of the three examples, the target corporation's currency appreciated significantly against the acquirer's currency in the months following the announcement, which illustrates how M&A transactions move markets."

Earnings Estimate Revisions are the most powerful force impacting stock prices.

Go to the link and read this free report. The Zack's Rank--Harnessing the Power of Earnings Estimate Revisions.

Food for thought.

Katrina and the Price of Oil--The Dollar

Katrina may wreak considerable damage to the oil drilling rigs in the gulf. She may possibly damage the refining capacity in the area as well. This could temporarily jimmy the supply and demand for oil, causing an increase in the price of oil. This may be bearish for the dollar near term.

Or not. It's still a crapshoot.

Tom Buchanan's Trading Room

Looking into the future, which is always a crapshoot, but big and small business always have to do it, Goldman Sachs has raised its estimate of average oil prices for the next five years from $45 (its previous estimate set earlier this year) to $60 a barrel for West Texas Intermediate Crude. Compare this to Barclay's Capital which forecasts that WTI will remain above $50, Merrill Lynch forecasts $45 and Deutsche Bank estimates $38-40. Thus saith Friday's Financial Times.

It also says that while cash reserves have been accumulating in the oil industry, the rate of reinvestment has not yet picked up. The cost of development projects has doubled and is now in the tens of billions. With that much money on the line, the future forecasts have to be fairly accurate. Where is Nicky Engel when you need him?

What do it mean?

Bernanke Confirmed by Senate

Latest Business News and Financial Information | Reuters.com

FRB: Testimony, Greenspan--The economic outlook--June 9, 2005

FRB: Testimony, Greenspan--The economic outlook--June 9, 2005


We are all ears, O wise one. Your words move markets as usual. You calm our anxious hearts with the voice of reason. The dollar resumes its rise.