FX Trading - Ship of Fools

What rates do you use in your calculations in place of the risk-free rate of return? T-bills for short-term and bonds for long-term right? I wonder if the guys at Standard & Poors still adhere to that practice, seeing as how they've just put the mighty US of A on negative watch. Why should we care anyway? They were the same guys who told everyone US mortgage debt was pristine, just before all hell broke loose. 

It saddens me to think we even pay attention to all these clowns; the politicians who threaten to bankrupt a government with no thought for their citizens, and those snake-oil salesmen playing with just the first few letters of the alphabet. Oh, let's not leave out the whole European circus - I think i'll install the fabulous 'bull filter' so I can focus on actual news and rid the wires of meaningless official talk. And to think yesterday you had the US and Europe commenting on each other's wonderful economies instead of minding their own business....the nerve of some people...

So why the USD strength? It's that whole safe-haven thing which still boggles my mind, if you've read my earlier posts. I don't know about you, but when the world threatens to fall apart I'd rather buy gold. Of course, gold will still take a hit when the going gets tough 'cos people still need to liquidate profits from somewhere, right? Hell, let's all do cash. 

But if you think about it, when funds lose faith in the US they might just decide to go to....the emerging markets! Asia, anyone?

Ok, let's ignore all this nonsense and get back to business. GBPUSD is nicely within it's well-worn range, so I won't bother with the charts again. Nothing to do at this moment. EURUSD is threatening to head lower but you just know the buyers are all lined up, so we'll need the speculators to turn all net long before the terrible squeeze. Rallies should present selling opportunities. USDJPY is near it's trendline support so we'll look to buy on a higher close. 

For now we'll go take a refresher course in critical thinking and cleanse our brain of all the nonsense clogging it up.

Peace