Zen Slap

By: Erik Swarts | Mon, Oct 8, 2012
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Don't look now, but after last weeks dramatic divergence in the Aussie and the SPX - everyone suddenly became an expert on the Australian economy and their important currency to foreign exchange markets.

Markets have a way of lulling ones concerns to complacency - and then slapping them in a sudden moment of clarity. Generally speaking - its a good idea to take notice.

 

2011 SPX vs 2011-2012 FXA
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2011 SPX
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2012 FXA
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2011 SPX
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Anatomy of a Top
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2011-2012 FXA
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2011 SPX
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Although the analog has recently strengthened its correlation proportions to the model, it would be a bit presumptuous to expect the middle of the move to unfurl with like distribution. As I have noted before, these models often replicate most acutely at pivots. Like a rock lobbed into a pond, the geometry will replicate with great congruency at the point of entry and dissipate as you move further away from the epicenter of disturbance.

With that said - and as mentioned in previous notes, I do have an initial target of ~ 84 for FXA.

As always - Stay Frosty.

 


 

Erik Swarts

Author: Erik Swarts

Erik Swarts
Market Anthropology

Although I am an active trader, I have always taken a broad perspective when approaching the markets. I respect the Big Picture and attempt to place each piece of information within its appropriate context and timeframe. I have found that without this approach, there is very little understanding of ones expectations in the market and an endless potential for risk.

I am not a stock picker - but trade the broader market itself in varying timeframes. I want to know which way the prevailing wind is blowing, where the doldrums can be expected and where the shoals will likely rise. I will not claim to know which vessel is the fastest or most comfortable for passage - but I can read the charts and know the risks.

I am not a salesperson for the market and its many wares. I observe it, contextualize its moving parts - both visible and discrete - and interpret.

I practice Market Anthropology - Welcome to my notes.

Erik Swarts is not a registered investment advisor. Under no circumstances should any content be used or interpreted as a recommendation for any investment, trade or approach to the markets. Trading and investing can be hazardous to your wealth. Any investment decisions must in all cases be made by the reader or by his or her registered investment advisor. This is strictly for educational and informational purposes only. All opinions expressed by Mr. Swarts are subject to change without notice, and the reader should always obtain current information and perform their own due diligence before making any investment or trading decision.

Copyright © 2011-2014 Erik Swarts

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TRUE MONEY SUPPLY

Source: The Contrarian Take http://blogs.forbes.com/michaelpollaro/
austrian-money-supply/