British Pound is known to be a stable currency. Great Britain is a strong economy. But, Great Britain was finding it difficult to stay within the tight exchange rate band set by the European Monetary Union (EMU) in the early’90s. One person who made history with options was George Soros who is famously known as the man who broke the Bank of England.

George Soros had this intuition that the Bank of England would be forced to devalue British Pound. So he bought call options on German Marks and put options on British Pound. He made a bet of $10 Billion by leveraging all the assets in his hedge fund.

Bank of England had made a number of public statements regarding its intention of staying within the EMU. However, within a few days of the speculative attack on the British Pound, Bank of England was brought to its knees as it was …

Do you know how to read Point and figure charts? Point and figure trading in many ways is similar to the support and resistance breakout trading on bar or candlestick charts. The main difference is the look and functionality of the price charts themselves!

Bar charts and candlestick charts show the high low open and close price for a given period. Point and figure charts represent price in a radically different manner from the more familiar bar and candlestick charts. Many forex charting platforms provide the option of point and figure charts.

Point and figure charts do not show any timeframe. This may confuse you in the beginning. Point and figure charts are a pure price action play because these charts generally exclude all other elements like time, volume and open/close other than price. Point and figure trading is based exclusively on price action.

Point and figure charts represent clear evidence of such …

September 15th, 2008, a day that will live in infamy. Famous words, much the same, made in 1941 by our President Franklin D. Roosevelt. As the one year anniversary of the Lehman Brothers collapse approaches, I find myself looking at the economic picture and wondering if we really dodged a bullet or if we traded in our single shot rifle pointed at our head for an semi automatic? Did we really just blow up the asteroid, on a crash collision with Earth, or just shatter it into a million more deadly pieces? Our government, Treasury and Federal Reserve all claim we have averted disaster, apparently the recession is over. I would be thrilled to believe this, I truly would, but let us look at the facts.

As I look over my notes and calculations I find some interesting issues and facts popping up. For instance, would it surprise any of you …

After a large run up in Q1 of this year Agriculture related commodities pulled significantly. Its not uncommon for futures to take a dive after such a large run up. However, a few short months later agriculture commodities are at it again. Check out the chart of DBA: Right side of this chart is quite compelling has buying interest has shown up in recent weeks. With talk increasing about inflation and what the FOMC will do to combat it will certainly bring attention, once again to agriculture related commodities. Speaking of inflation and FOMC the dollar has been on a tear as of late. Ben Bernanke has recently been taking a stand regarding the stance the FOMC is taking. This certainly helps the dampen the fear that the market will continue to have an oversupply of dollars. The next ...

Financials continue to feel max pain as major banks continue to be hammered by selling. The exotic forms of investment continue to haunt those firms who were careless and did not handle risk properly. Selling has spread throughout the rest of the market as Crude Oil prices race higher. We are also seeing Grains and Agriculture futures point higher as well. These markets have and continue to signal higher inflation. The markets haven’t quite seen a peak in fear, a washout of the markets is highly likely. Along the lines of a washout will more than likely be proceeded by crude oil entering in superspike mode. The market is in chaos mode and can not be trusted. Financials might continue their trend but the short trade has become so obvious a sharp covering rally could wipe you clean. So few stocks are working ...

The Fed reversal started late in the day, although futures suggest a higher open. The Dow flashed a (bearish) gravestone doji on higher volume, with the 200-day MA lurking overhead to act as resistance. A push back to the 50-day MA looks the most favored response to relieve overbought conditions, but any close higher today would make a strong case for a 200-day MA breakout. Why? The current set-up looks picture perfect from a bear’s perspective, so if it didn’t play to expectation you would have to be worried (from the bear side).

The Nasdaq 100 has inched its way to the 200-day MA. The gap created at 1,850 looks a logical downside target, but it wouldn’t take much buying to push …