Do EEV And FXP Have More To Run?
Sunday, 24. August 2008, 19:43:32
The Proshares Double Short ETFs report from the article Double Short ProShares ETFs by Bespoke Investment Group in Seeking Alpha website reports that EEV is up 7.6% and FXP is up 2.1% from 7/15/2008 (but from the charts, it sure looks like a lot more); and SKF is down 35.0% from the beginning of the US Dollar, $USD, Rally when those invested via the yen carry trade sold oil and commodities and went long the financial sector and US based consumer and housing stocks.
The well springs of liquidity have been turned off for traditional investing long the markets as Peak Currencies turned the EUR/JPY down on July 25, 2008 and Peak Dollar turned the USD/JPY down on August 15, 2008.
The chart of EEV shows that disinvestment began to come out the emerging markets on May 19, 2008, when the TAF, TSLF and PDCF rally ended, and then again on June 23, 2008 as those with access to the 0.5% Bank of Japan loans sold out of the BRICS, EEB, to take profits and repay their loans.
Then on July 25, 2008, an Elliott Wave 3 Down commenced in the EUR/JPY, this blasted EEV much higher.
Note that 80 was the middle of an Elliot Wave 3 mid point rest for EEV; and now we had Elliott Wave 5 completion with the abandoned baby candlestick.
The weekly chart of EEV shows a gravestone doji on falling volume; with 50% gain from May 19, 2008.
The weekly chart of EEM shows a fall to suppor at the edge of a head and shoulders pattern.
The weekly chart of FXP shows a gravestone doji as well; with 50% gain from May 19, 2008.
It was lack of liquidity coming from failed TAF, TSLF, and PDCF that started both 50% higher.
So we have completion of current activity for EEV; the question is what is next?
Part of the answer comes from knowing what the Euro, FXE, will be doing; the weekly chart of the Euro, FXE, shows it has fallen to support at 148.
Eventually there is more disinvestment coming out of the emerging markets, EEM, and China, FXI as the yen carry trade EUR/JPY, FXE:FXY, continues to unwind on risk aversion to inflation, lack of growth, and debt at banks.
The weekly chart of EUR/JPY, FXE:FXY, shows that the yen carry trade invigorate investment in the BRICS, EEB, and the emerging markets EEM, up until May 19th.
And there is still plent of stored up yen carry trades left in EEB, that is for sure; it's just a matter of "when is it coming out?"
The fall in the weekly chart of EUR/JPY, FXE:FXY, explains the tremendous disinvestment that has come out of the commodity stocks such as the metal and manufacturing stocks, XME, and the gold mining stocks, that is the HUI Indexed precious metal mining stocks, GDX.
Since July 15, 2008, the US has been the destination of interest rate differential investing as those with access to Bank of Japan funds went long went long the financial sector, IYF, Russell 2000 value, IWN, Housing, XHB, Nasdaq, QQQQ, and Consumer, IYC, stocks.
I fully expect the USD/JPY to fall this next week and the destruction of the US Dollar, $USD, to commence as well as a run on the US Treasury Bonds, TLT, to recommence: the Dollar Rally stocks will fall greatly rewarding those who are short the financial sector via SKF and short the Dollar by investing in gold, $GOLD.
I recommend that one be invested 2/3 in gold at BullionVault and GoldMoney; and 1/3 in SKF in a trust account and not a brokerage account.
The well springs of liquidity have been turned off for traditional investing long the markets as Peak Currencies turned the EUR/JPY down on July 25, 2008 and Peak Dollar turned the USD/JPY down on August 15, 2008.
The chart of EEV shows that disinvestment began to come out the emerging markets on May 19, 2008, when the TAF, TSLF and PDCF rally ended, and then again on June 23, 2008 as those with access to the 0.5% Bank of Japan loans sold out of the BRICS, EEB, to take profits and repay their loans.
Then on July 25, 2008, an Elliott Wave 3 Down commenced in the EUR/JPY, this blasted EEV much higher.
Note that 80 was the middle of an Elliot Wave 3 mid point rest for EEV; and now we had Elliott Wave 5 completion with the abandoned baby candlestick.
The weekly chart of EEV shows a gravestone doji on falling volume; with 50% gain from May 19, 2008.
The weekly chart of EEM shows a fall to suppor at the edge of a head and shoulders pattern.
The weekly chart of FXP shows a gravestone doji as well; with 50% gain from May 19, 2008.
It was lack of liquidity coming from failed TAF, TSLF, and PDCF that started both 50% higher.
So we have completion of current activity for EEV; the question is what is next?
Part of the answer comes from knowing what the Euro, FXE, will be doing; the weekly chart of the Euro, FXE, shows it has fallen to support at 148.
Eventually there is more disinvestment coming out of the emerging markets, EEM, and China, FXI as the yen carry trade EUR/JPY, FXE:FXY, continues to unwind on risk aversion to inflation, lack of growth, and debt at banks.
The weekly chart of EUR/JPY, FXE:FXY, shows that the yen carry trade invigorate investment in the BRICS, EEB, and the emerging markets EEM, up until May 19th.
And there is still plent of stored up yen carry trades left in EEB, that is for sure; it's just a matter of "when is it coming out?"
The fall in the weekly chart of EUR/JPY, FXE:FXY, explains the tremendous disinvestment that has come out of the commodity stocks such as the metal and manufacturing stocks, XME, and the gold mining stocks, that is the HUI Indexed precious metal mining stocks, GDX.
Since July 15, 2008, the US has been the destination of interest rate differential investing as those with access to Bank of Japan funds went long went long the financial sector, IYF, Russell 2000 value, IWN, Housing, XHB, Nasdaq, QQQQ, and Consumer, IYC, stocks.
I fully expect the USD/JPY to fall this next week and the destruction of the US Dollar, $USD, to commence as well as a run on the US Treasury Bonds, TLT, to recommence: the Dollar Rally stocks will fall greatly rewarding those who are short the financial sector via SKF and short the Dollar by investing in gold, $GOLD.
I recommend that one be invested 2/3 in gold at BullionVault and GoldMoney; and 1/3 in SKF in a trust account and not a brokerage account.
WIDGETIZE