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Pounded - UK PM Cuts Cable


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#1 Douglas

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Posted 23 September 2022 - 09:00 AM

I know you guys are singularly focused on the plunging US market, but a bigger mess is brewing just across the pond from you.  This morning the UK's new government took out a rather large gun and shot their currency right between the eyes.  For some unexplained self-immolation reason, they cut the Cable. 

 

The plot below using an fxtop.com graph shows a rather simplistic, but very scary price projection for the Pound down to the 80 US cent range.  That would be great if you're a yank tourist bellying up to the bar in a UK pub buying good English ale at a bargain price, but not so good if you're English and all your energy and most other imports are priced in dollars.  This will cause inflation on steroids, a.k.a. a currency crisis.  This is a big deal, and just when I thought that I would be eating crow yet again for one of my crash window calls, the UK PM goes out and literally hatches a big black swan egg right on the floor of Parliament.  Maybe I'm over-reacting, but that previous low on the plot below was in the mid-1980's almost 40 years ago.   If they don't try to clean up this mess this weekend, Monday that feathered ebony emissary of evil might just spread its wings over a lot more than just Cable.

 

Vq1PIRx.png

 

Regards,

Douglas

 



#2 K Wave

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Posted 23 September 2022 - 09:58 AM

Uncle Buck is a beast on the world stage right now...

 

Looking pre-explosive against Swiss here too.

One by one, they are succumbing to the Tsunami

 

sw.png

 

 


The strength of Government lies in the people's ignorance, and the Government knows this, and will therefore always oppose true enlightenment. - Leo Tolstoy

 

 


#3 Douglas

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Posted 23 September 2022 - 12:59 PM

Just in case, the following is my understanding of the US market trading halt circuit breakers currently in place:

 

A trading circuit breaker, which halts trading across all markets, can be triggered at three circuit breaker thresholds that measure a decrease against the prior day’s closing price of the S&P 500 Index – Level 1 a drop of 7% (about 2100 DOW points), Level 2 a drop of 13% (roughly 3900 DOW points), and finally Level 3 a drop of 20% (about 6000 DOW points).

 

A Level 1 and Level 2 breach halts trading for a minimum of 15 minutes. A Level 3 breach halts trading for the remainder of the trading day.  Note Level 1 and 2 halts can only be triggered once per day each, so a drop to -7% which causes a 15 minute halt, then a rally and then a further drop to -7% would not trigger an additional halt in trading, only if it exceeded -13% would an additional halt take place.

 

Of course, I do realize that since I noted the above, the DOW will probably close unchanged today, that is if the Powell Put is still in place.

 

Regards,

Douglas