JANUARY - MARCH 2015

TRADER MAGAZINE

ELLIOT WAVEIN PRACTICE

EMU ANDEUROZONEPOLITICS war on the

RubleUS USES OIL AS DIPLOMATIC AND ECONOMIC WEAPON. TRILLIONS OF DOLLARS IN OIL DERIVATIVES ARE AT RISK.

USDTHROUGH

2 0 1 5

M O V I N G AV E R A G E B O UN C E SSTRATEGY

SELF-LIMITING B E L I E F S

PROFITS HOW TO LET RUN

FXCONTENTs

COMMODITY CURRENCIES

Effects of a Lower Oil Price on theFX Market

24

How to profit from Moving

Average bounces

4507 EDITOR’S NOTE

ASK THE COACH12 How to Let Profits Run?

CURRENCY WATCH15 US Dollar through 2015: Long-term Trend Remains Higher, and the Ruble will remain in rubble

MACROEONOMICS19 Eurozone: Will Greece be in EMU at the end of 2015?

TRADING PSYCHOLOGY40 Four Self-Limiting Beliefs thatSabotage Your Trading Performances

TECHNICAL ANALYSIS28 Elliott Wave Analysis: Putting the Theory into Practice

MONETARY POLICIES

49 Unfitting policies will not save the Euro-area or Japan in 2015

72 Federal Overnight Reserve Repurchase Repo and Fed Funds Implications for 2015

58 New G20 Banking Rules or “The Day Money Died”

INDUSTRY WATCH

36 Interview with Peter Rosenstreich, Head of Market Strategy at Swissquote

TRADING STRATEGY

53 When to trade against the fundamentals

67 Get prepared to beat your previous trading achievements

BOOK REVIEW62 TraderMind by Steve Ward

TECHNICAL REPORTS 76 Majors: EUR/GBP, EUR/USD EUR/JPY, USD/JPY

80 Trends and Targets: Majors, Emerging and Asian Markets

80 Featured Pairs: USD/CAD, GBP/JPY, USD/ZAR, USD/MYR

88 CONFERENCES & SEMINARS

INTERNATIONAL DATA84 FX Spot Monitor85 Central Bank Rates86 Economic Data - FX Poll87 Markets View

89 ECONOMIC CALENDAR

MOVING AVERAGES

31WAR ON THE RUBLEUS uses oil as diplomatic and economic weapon. Trillions of dollars in oil derivatives are at risk.

FX TRADER MAGAZINE January - March 2015 3

Cover image source FreakingNews.com

FX TRADER MAGAZINE January - March 2015 31

WAR ON THE RUBLEUS uses crude oil as diplomatic and economic weapon.

Trillions of dollars in oil derivatives are at risk.

The ruble has dropped by ne a r ly 5 0 % against the dollar since last January

The unanticipated drop in the price of oil was an act of geopolitical warfare

$3.9 trillion of banks’ derivatives speculation is on the price of commodities, including oil

by Ellen Brown

FXMACRO ECONOMICS

The Russian Ruble was 2014’s biggest loser plunging nearly 50 percent. An additional 17 percent drop is predicted under the pressure of sliding oil prices and U.S. and European economic sanctions against Russia.

32 FX TRADER MAGAZINE January - March 2015

MACRO ECONOMICSFX

On December 11th, Senator Elizabeth Warren charged Citigroup with “holding government funding hostage to ram through its government bailout p r o v i s i o n . ” At issue was a section in the omnibus budget bill repealing the Lincoln A m e n d m e n t to the Dodd-Frank Act, which protected depositor funds by requiring the largest banks to push out a portion of their derivatives business into non-F D I C - i n s u r e d subsidiaries.

Warren and R epresentative Maxine Waters came close to killing the spending bill because of this provision. But the tide turned, according to Waters, when not only Jamie Dimon, CEO of JPMorgan Chase, but President Obama himself lobbied lawmakers to vote for the

bill. It was not only a notable about-face for the president but represented an apparent shift in position for the banks.

Before Jamie Dimon intervened, it had been reported that the bailout provision was not a big deal for the banks and that they were not lobbying heavily for it, because it covered only a small portion of their

derivatives. As explained inTime:

The best argument for not freaking out about the repeal of the Lincoln

Amendment is that it wasn’t nearly as strong as its drafters intended it to be. . . . [W]hile the Lincoln A m e n d m e n t was intended to lasso all risky instruments, by the time all was said and done, it really only applied to about 5% of the derivatives activity of banks like Bank of America, C i t i g r o u p , JPMorgan Chase, and Wells Fargo, according to a 2012 Fitch report.

Quibbling over a mere 5% of the derivatives business sounds like much ado about nothing, but Jamie Dimon and the president evidently didn’t think so. Why?

Originally the Lincoln Amendment only applied to about 5% of the derivatives

activity of top tier US banks

The sudden dramatic collapse in the price of oil appears to be an act of geopolitical warfare against Russia. The result could be trillions of dollars in oil derivative losses; and depositors and taxpayers could be liable, following repeal of key portions of the Dodd-Frank Act signed into law on December 16th.