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Trading strategy: standing aside
The break above 1.3180 was short as the euro was unable to sustain gains and declined to as low as 1.3083 where it found support – formed by last week’s bottom around 1.3080 and also the rising trend line connecting the higher lows since August. Cable was also dragged lower, following EURUSD, but the commodity currencies were good performers, along with the Swiss franc which remains a safe haven currency and trades around record levels against both USD and EUR. My expectation for the euro to hold above 1.3180 was wrong and I rather wait for a notable confirmation, not just a simple intra-day breakout, before considering any bullish scenarios. Speaking of current conditions – resistance is again formed at 1.3180/00, followed by the 1.3250 region, higher. On the daily charts we have a pin bar formed yesterday – suggesting further weakness. Current exchange rate is 1.3127 @08:35 GMT
Support: 1.3070/00, 1.3000/30, 1.2970 and 1.2900
Resistance: 1.3180, 1.3250/75, 1.3300/30 and 1.3400
Market sentiment: long term – mixed, medium term – bullish, short term – bearish, intraday – slightly bullish
EURUSD 1hr chart 12-29-2010
EURUSD daily chart 12-29-2010
AUDUSD daily chart 12-29-2010
EURCHF 4hrs chart 12-29-2010
XAUUSD daily chart 12-29-2010
U.S. home foreclosures jumped in the third quarter and banks' efforts to keep borrowers in their homes dropped as the housing market continues to struggle, U.S. bank regulators said on Wednesday.
The regulators said one reason for the increase in foreclosures is that banks have "exhausted" options for keeping many delinquent borrowers in their homes through programs such as loan modifications.
Newly initiated foreclosures increased to 382,000 in the third quarter, a 31.2 percent jump over the previous quarter and a 3.7 percent rise from a year ago, the Office of the Comptroller of the Currency and the Office of Thrift Supervision said in their quarterly mortgage report.
The number of foreclosures in process increased to 1.2 million, a 4.5 percent increase from the second quarter and a 10.1 percent increase from a year ago, according to the regulators.
The report, which covers 33 million loans serviced by national banks and federally regulated thrifts, also shows a sharp drop in the amount of loan modifications processed through the Home Affordable Modification Program (HAMP), the Obama administration's leading foreclosure prevention effort. HAMP loan modifications fell by almost 46 percent in the third quarter, according to the report. Regulators noted, however, that loan modifications done by servicers outside of HAMP increased by 10 percent in the the third quarter.
Overall home retention actions taken by banks to keep borrowers in their homes dropped by 17 percent compared to the second quarter.
There's the still-massive number of foreclosures, which will keep pressure on prices.
The percent of mortgages past due is still climbing...
The number of bank-owned houses is still climbing (more future inventory)
When you count "shadow inventory", the imbalance looks even worse
THE BOTTOM LINE: House prices probably have another 20% to fall