Month: June 2012

By TraderVox.com

Tradervox (Dublin) – The euro advanced against most major peers after governments in the region agreed to offer bailout loan to Spain. Spain is the third largest economy in the region and it has encountered its greatest debt crisis since the monetary union was established. It 10-year bond yield has been high touching 6.5 percent in April only 0.5 percent less than the 7 percent reached by Greece, Ireland, and Portugal before they requested for bailout. Spain has been looking for support in recapitalizing some of its banks that have experienced debt crisis.

After European governments agreed to support Spain, the euro rose to two-weeks high against the dollar, decreasing the demand for safe haven currencies leading to dollar and yen weakening. Spain requested for $126 billion in aid to help its banking system making it the fourth country in the euro area to ask for such international bailout. According to Imre Speizer, investors have been wondering what will happen to Spain looking for any sign on how long it will drag; however, the decision by EU governments is an indication that they are committed to solving problems in the region which is encouraging for the euro. Speizer, who is a Currency Strategist in Auckland, added that Spanish bailout is bullish for the euro since it shows lawmakers’ willingness to act.

The 17-nation bloc currency increased by most in two weeks reaching $1.2671, the highest since May 23 before retreating 0.9 percent to $1.2631. It climbed 1.1 percent against the yen to trade at 100.59. The US dollar had added 0.2 percent against the yen to exchange at 79.64 yen. With these positive reports from euro area, analysts are saying that the euro might climb to $1.2786 as Spain concerns ease. This will boost risk appetite in the market hence we are bound to see some movement in commodity related currencies.

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Source: ForexYard

The euro fell against several of its main currency rivals on Friday, following another Spanish credit rating downgrade and the news that the country will require a bailout to help its ailing banking sector. After falling over 130 pips during the first part of the day, reaching as low as 1.2434, the EUR/USD was able to stage a slight upward correction to finish out the week at 1.2514. This week, news out of Spain, particularly with regards to the size and scope of the bailout package it needs, has the potential to create heavy market volatility. Additionally, traders can anticipate significant euro movement as investors digest the latest news out of Greece, which is scheduled to hold elections next Sunday.

Economic News

USD – Dollar Benefits from Spanish Credit Downgrade

The US dollar saw upward movement on Friday, as investors shifted their funds to the safe-haven currency following another Spanish credit rating downgrade earlier in the week. The GBP/USD fell over 100 pips during Asian trading, reaching as low as 1.5402 during early morning trading before correcting itself to finish out the week at 1.5472. Against the AUD, the dollar was able to start the day off by gaining close to 90 pips. That being said, the aussie was able to climb back during the European session, eventually recouping all of its earlier losses. The AUD/USD closed the week at 0.9914.

Turning to this week, dollar traders will want to pay attention to several potentially significant economic indicators. On Wednesday, the Retail Sales, Core Retail Sales and PPI figures could cause the USD to fall vs. the JPY if the figures come in below their forecasted levels. Later in the week, the Unemployment Claims and Core CPI figures, followed by the Prelim UoM Consumer Sentiment may lead to market volatility if they do not come in as expected. Should any of the figures disappoint, it could lead to further worries regarding the US economic recovery and whether the Fed is planning to initiate a new round of quantitative easing.

EUR – New Spanish Bailout May Lead to Further EUR Losses

The euro saw a mixed session on Friday, as news that Spain’s credit rating was downgraded caused investors to shift their funds away from the common-currency. Against the JPY, the euro fell as low as 98.51 during the overnight session before staging a slight correction to close the week at 99.46. Against the AUD, the euro fell over 100 pips, reaching as low as 1.2582. The EUR/AUD ended up finishing out the week at 1.2617.

This week, euro traders will want to continue monitoring any developments out of Spain, specifically in reference to the bailout package it needs. Any indication that the banking troubles the country is currently facing are bigger than originally thought could lead to heavy euro losses. Additionally, with Greece getting ready to hold a much anticipated election next Sunday, traders can anticipate news out of the country to generate market volatility. Any signs that anti-austerity political parties could emerge victorious may lead to additional losses for the common-currency.

Gold – Gold Finishes the Week below $1600

Gold saw downward movement throughout Friday’s trading session, following gains made by the US dollar due to concerns about Spanish debt. Typically, the price of gold moves down when the USD is strong, as the precious metal becomes more expensive for international buyers. Gold dropped as low as $1544.44 an ounce before staging a slight upward correction to finish out the week at $1593.13.

This week, gold traders will want to pay attention to a batch of US indicators and how they affect the dollar. Any bullish movement the greenback has against riskier currencies like the euro and Australian dollar could cause gold to extend its downward trend.

Crude Oil – Demand Worries Causes Oil to Turn Bearish

The price of oil fell on Friday, following an increase in investor concerns regarding global demand for the commodity. Additionally, following last Thursday’s speech from Fed Chairman Bernanke the US dollar strengthened, making the cost of crude more expensive for international buyers. Oil finished out the week at $84.10 a barrel.

Turning to this week, events in the euro-zone may influence the direction oil takes. Should investors continue to shift their funds to safe-haven assets as a result of economic and political worries out of Spain and Greece, oil could extend its bearish trend. At the same time, any indications that pro-austerity political parties in Greece may emerge victorious in the upcoming election could result in risk taking in the marketplace. Oil could recoup some of its recent losses in such a case.

Technical News

EUR/USD

Technical indicators on the weekly chart show that this pair is currently range trading, meaning that no defined long-term trend can be predicted at this time. That being said, the daily chart’s Williams Percent Range has crossed over into overbought territory. Traders may want to open short positions, as downward movement could be seen in the near future.

GBP/USD

A bullish cross has formed on the weekly chart’s Slow Stochastic, indicating that this pair could see upward movement in the coming days. In addition, the Bollinger Bands on the daily chart are beginning to narrow, meaning that a price shift could occur in the near future. Opening long positions may be the wise choice.

USD/JPY

While a bullish cross appears to be forming on the weekly chart’s Slow Stochastic, most other long-term indicators show that this pair is in neutral territory. Traders may want to take a wait and see approach, as a clearer trend is likely to present itself in the near future.

USD/CHF

Technical indicators are providing mixed signals for this pair. While the Williams Percent Range on the daily chart is in oversold territory, the weekly chart’s Slow Stochastic has formed a bearish cross. Traders will want to use a wait and see strategy for this pair.

The Wild Card

GBP/AUD

A bullish cross on the daily chart’s Slow Stochastic indicates an upward correction may occur in the near future. This theory is supported by the Williams Percent Range on the same chart, which is currently just above the -90 level. This may be a good time for forex traders to open long positions ahead of possible bullish movement.

Forex Market Analysis provided by ForexYard.

© 2006 by FxYard Ltd

Disclaimer: Trading Foreign Exchange carries a high level of risk and may not be suitable for all investors. There is a possibility that you could sustain a loss of all of your investment and therefore you should not invest money that you cannot afford to lose. You should be aware of all the risks associated with Foreign Exchange trading.

Article by Investment U

The JOBS Act could be a goldmine for investors who have been locked out of the secretive world of private placements.

“Overall, new businesses account for almost every new job created in America. For start-ups and small businesses, this bill is a game changer. Because of this bill, start-ups and small businesses will have access to a bigger pool of investors.”

– President Barack Obama on the JOBS Act, March 27

Titles of popular legislation are invariably misleading. Take for example “The Corporate and Auditing Accountability and Responsibility Act of 2001.” Known as Sarbanes-Oxley, the law has proven to be onerous for publicly-traded companies, leading to many companies going private, and IPOs drying up in the United States.

In response, Congress recently passed and the President signed (on March 27) the “Jumpstart Our Business Start-ups” Act, or the JOBS Act. I don’t know if it will create any jobs, but it could be a goldmine for investors who have previously been locked out of the secretive world of “private placements,” also known as “founders stocks” offered to company insiders and wealthy “accredited” millionaires.

I’ve invested in dozens of “private placements” over the years. These are investments in the early stages of a start-up company that may be years away from going public. Like tax shelters, they are speculative, and most of the time, I’ve lost money. But in a few cases, I’ve made out spectacularly well, making 20 or 30 times my money (what Peter Lynch calls a “ten-bagger”).

The JOBS Act allows small investors to get a piece of the action previously restricted to wealthy investors. Under the new “crowdfunding” rules, private companies can even advertise online to potential investors. Private firms can avoid onerous regulations and registration requirements of the Securities & Exchange Commission until the number of shareholders reaches 2,000 (the previous limit was 500).  And individual investors can invest up to $10,000 without proving they are “accredited” high net worth investors.

Where to look for private placements?

One way is to invest directly. We’re holding a 3-hour session at FreedomFest, July 11-14 at Bally’s in Las Vegas on “Special Situations in Private Placements,” where specialists Lou Petrossi, Ralph Williams, and Ron Holland, among others, will spell out the spectacular opportunities and risks associated with private equity investments, and some specific deals now available.

What’s FreedomFest all about? Everything! Watch this 3- minute video:

The Oxford Club (Alex Green, Karim Rahemtulla, Marc Lichtenfeld, Steve McDonald) is hosting a one-day conference at FreedomFest.  I’ll be there, along with Senator Rand Paul, Steve Moore, Judge Andrew Napolitano, Steve Forbes, John Mackey, Rick Rule, and Keith Fitz-Gerald (as Keith says, “FreedomFest is the conference even speakers like to attend”).

To see what all the excitement is all about, go to www.freedomfest.com/oxfordclub, or give Tami Holland a call toll-free 1-866-266-5101.

Vegas is a good place to attend an intensive workshop on private placement because investing $10 grand in a private equity deal is not unlike a roll of dice.

A more conservative approach is to invest in a publicly-traded private equity fund on Wall Street. I’ve provided one such fund for Investment U Plus subscribers today. It’s a venture capital fund that invests in over 100 private companies and often takes equity positions in expectation they will be bought out or go public. Plus, it pays a 9% annual dividend to boot.

You have your choice. Be a speculative hare or a conservative tortoise. Take a gamble and win big in an individual private placement…or buy a private equity fund on Wall Street and make steady long-term dividends and capital gains.

I recommend both. Buy today’s Investment U Plus pick and come to FreedomFest! It’s a potential win-win.

Good Investing, AEIOU,

Mark Skousen

Article by Investment U

Article by Investment U

Motif Investing allows people to buy investment ideas and themes, including the most "liked" brands on Facebook (Nasdaq: FB), which rose 20% over the past year.

I don’t get to say it often, but the investing herd was spot on last month.

From Main St. to Wall Street, the resounding majority of people everywhere said they weren’t going to invest a dime in the Facebook (Nasdaq: FB) IPO.

And it’s a good thing most people didn’t.

Because after hitting a high of $45 on May 18th, shares have fallen as much as 42%.

Yet even though buying into Facebook’s IPO would’ve been a huge mistake by today’s standards, the darling of social media just may have a use for investors after all.

Turning Facebook “Likes” into Profits

I’ve had a Facebook page for a year and a half now.

And, yes, I comment and click “like” on things I find interesting or funny. But don’t give me a hard time about it.

Online news provider, VentureBeat, reports 845 million users give out 2.7 billion “likes” and comments every day.

It’s an incredible amount of information.

And a new online trading service that just launched Monday has figured out a way to profit from this mountain of data.

It’s called Motif Investing.

But it’s not exactly just another E*Trade or Scottrade.

Investing in the Power of an Idea

Motif Investing allows people to buy into investment ideas and themes (hence the name “motif”).

They do this by packaging ideas into collections of 20 to 30 stocks and selling them to investors for $9.95, or about the same price as a single-stock trade on E*Trade.

For example, Motif’s “Faceboook” portfolio represents the top 20 most “liked” Facebook brands. In 2011, the number of “likes” for these companies nearly doubled. Who knows, maybe it’s not really related that much, but Motif’s “Lots of Likes” motif is up 20% over the past year.

There are also 50 other motifs to choose from. And that number is sure to grow.

Some of my favorites include how to play the rise in income inequality, preparing for the housing recovery in the U.S., and cashing in on soaring internet usage on mobile phones.

Motif gets even better too. It allows you to personally customize each of the portfolios to fit your investment needs or preferences.

So if there’s a stock you don’t like, you don’t have to pray some mutual fund or ETF manger will eventually get rid of it. At any time, you can sell a stock for a one-time processing fee of $4.95. You can also change the weighting of any stock in the portfolios as well.

These are pretty revolutionary features for the online brokerage industry if you think about it. Can you imagine actually having full control over a mutual fund or ETF? You can become your own Peter Lynch…

Forbes says, “What’s compelling is it actually mimics what many of the best macro hedge fund managers do.”

It’s true. Motif just puts the power in the hands of individual investor.

All of these features has attracted some pretty powerful people to the service too.

Ex-Merrill Lynch boss Sallie Krawcheck is backing the company. There are former Microsoft (Nasdaq: MSFT) executives on board.  The longest serving chairman of the SEC, Arthur Levitt Jr., is also backing Motif to name a few.

I can’t say whether or not Motif represents the next era of investing. But I do like where it’s going. And I think, as more investors catch on, Motif could have a significant impact on the future of the online brokerage industry.

Good Investing,

Mike Kapsch

Article by Investment U

Article by Investment U

Forget about emotions. Stop trying to time the market. Stick to following a proven investment strategy.

I know stocks aren’t exactly a fun asset class to be in right now.

Since April, the S&P has dropped 9%. And you can sense the roller coaster ride isn’t going to end soon either.

What’s worse, investors like you and I have been dealing with the same old issues for a few years.

The Eurozone is still a mess. The possibility of it disbanding heats up and cools off almost every other day.

Meanwhile, the U.S. economy merely keeps sputtering along. And as the U.S. government attempts to spend its way to prosperity, the next recession feels like it’s just around the corner.

These days, there’s even more to worry about too. China’s economy is slowing. New and expensive wars could begin in Iran and North Korea. There’s also no telling whether or not the U.S. housing market has found a bottom.

Everything mixed together is the perfect recipe for volatility in the stock market.

But I don’t care how bad things seem, nobody knows where stocks will be 12 months from now or even tomorrow.

And just as things could get worse, they could get much better as well.

For example, from October 2007 to March 2009, who could’ve predicted stock prices would plummet over 50%?

By the same token, did anybody foresee stocks turning around in 2009 and soaring up around 80% today?

No.

That’s why it’s so important to forget about our emotions and trying to time the markets altogether. And instead, stick to following a proven strategy when approaching our stock investments.

It’s All About The Plan

Today, there are two common mistakes novice investors make that really burns them when the markets go sour.

First, they don’t know how much money to put into any given stock. And second, they don’t know how to protect their profits – exit strategies are of utmost importance.

So, here are two very important elements of any successful investing strategy:

• Never put more much more than 4% of your total portfolio into any single stock purchase. For example, if you have $50,000 set aside to invest in stocks, limit the amount of money you put into any stock to $2,000. You may not see it now but you’ll appreciate this when that high-flyer turns out to be the next Enron.
• Next, always protect yourself with a trailing stop around 25%. This will automatically sell your shares whenever one of your stocks pulls back 25% from its closing high. By doing this, you’ll instantly limit your losses on any stock to 1% of your total portfolio.

With just these two principles in place, you can maximize your earnings by letting your profits run. And you can minimize the risk you take on by not overexposing yourself to any one investment.

Because, no matter how uncertain things seem, there are still plenty of opportunities to profit out there.

Already this year, Investment U Plus subscribers have had the opportunity to cash in on 40 different stocks that could’ve returned single and double digit gains as high as 34%, 57%, and 60%.

Marc Lichtenfeld even recommended a pharmaceutical company at the beginning of the year that has jumped as high as 105%.

At our sister organization under Oxford Financial Publishing, The Oxford Club – also directed by IU Chairman Alexander Green – members are averaging gains of 35% across 22 open positions. In fact, Alex has been ranked by The Hulbert Financial Digest – the industry’s top watchdog – as high as 3rd in the nation overall for his stock selections. And currently his Oxford Club portfolio ranks 5th for performance based on their 10-year, risk-adjusted return.

Risk isn’t always rewarded. But with the right strategy, you can cut your losses off at the knees and keep ride your winning positions to massive windfalls in the future. And that’s advice that you can take to the bank for the rest of your life.

Good Investing,

Mike Kapsch

Article by Investment U

Article by Investment U

While Mexico’s challenges make headlines, its strengths are making money for investors.

I have noticed that many people go to great lengths to travel the world but inexplicably ignore sites in their own backyard. Take me for example. I have lived in Colorado for about 12 years and have yet to visit the Grand Canyon.

And while I have visited more than 30 countries around the globe, I have not even been to Mexico. When in San Diego with my family on multiple occasions, I took a pass being a bit spooked by all the headlines on border drug and gang violence.

This type of thinking is unfortunately keeping many investors away from Mexico – a big mistake.

As I have highlighted at Oxford Club investment summits over the past year, while Mexico’s challenges make headlines, its strengths are making money for investors.

And Mexico’s strength is that that it has emerged as a major manufacturing and industrial power.

Mexican Exports Hitting Record Highs

U.S. industrial production is still at pre-2007 levels while Mexico got back to this level in early 2011. 80% of Mexico’s exports are manufactured goods and trade now represents 60% of GDP – a figure that has more than tripled since 1980. Mexican exports hit a record high in April of this year.

My view is that Mexico is on the way to replacing China as the premier global manufacturing platform for selling into North and South American markets.

China’s huge advantage in labor costs is evaporating. In 2000, Mexico’s manufacturing wages were 240% higher than in China. Now they are only 12% higher and given all the logistical issues and transportation costs that come with shipping parts to China and then bringing the final product back you can easily see Mexico’s advantage.

Mexico’s competitive edge is supercharged by a weak peso policy that has pushed the peso down an incredible 1,500% against the dollar since 1987 (though the peso is beginning to trend upward).

This is why American, European, Japanese, South Korean and, yes, even China are falling over each other to invest in Mexican production facilities. One example is the recent opening of Italian tire maker Pirelli’s first ever plant in Mexico. This ties in with Mexican auto production which was up 20% in April year-over-year.

Mexico’s Geographical Edge

Always keep in mind Mexico’s geographical edge next to two huge markets and as a Pacific Rim country, ready access to Asia-Pacific markets.

Let’s take a moment and look at the big picture. While U.S. debt is approaching 90% of GDP, Mexico is at 27%. America’s budget deficit is 8.6% of GDP while Mexico is at 2.5%. In addition, inflation in Mexico is at a manageable 4.4% and, unlike Brazil, has no restrictions on capital inflows.

Mexico is open for business worldwide. Get a piece of the action but remember that picking the right stock for a country on an upward trend is not an afterthought – it is the most important part. One of my favorite picks – Grupo Simec (NYSE: SIM) – is up 13.7% so far this year while emerging markets as a whole are down 6.2%.

Simec provides the finished steel that goes into manufacnuring plants being built hand over fist by global companies taking advantage of Mexico’s edge. In 2011 sales were up 19%, operating income was up 123% while Simec posted in the first quarter of 2012 a 24% increase in net sales and a 145% jump in operating earnings. Sales within Mexico were up 33% as the company exports about half of its production.

The stock is still trading below book value, at merely 65% of sales and at only 6.4 times trailing earnings.

And there’s more where that came from. In today’s Investment U Plus, I share another undervalued Mexican industrial company that is poised for incredible growth. It’s currently trading at just 75% of its book value and just 6.6 times trailing earnings.

Good Investing

Carl Delfeld

Editor’s Note: To find out Carl’s exclusive Investment U Plus pick for today along with our experts’ recommendations with each daily issue for pennies a day, click here.

Article by Investment U

By Central Bank News
Here’s today’s Central Bank News link list, click through if you missed the previous central bank news link list.  Remember, if you want to submit links for inclusion in the daily link list, just email them through to us or post them in the comments section below.

Source: ForexYard

The euro moved up over 150 pips against the USD and 140 pips against the JPY during overnight trading, following news that a $125 billion bailout was secured by Spain to help its ailing banking sector. Crude oil also advanced more than $2 a barrel, reaching as high as $86.60. That being said, crude has already started reversing its gains and is currently trading around $85.80.

Main News for the Week

Tuesday

• UK Manufacturing Production

Wednesday

• US Core Retail Sales
• US Retail Sales
• US PPI

Thursday

• US Core CPI
• US Unemployment Claims

Friday

• US Prelim UoM Consumer Sentiment

Read more forex news on our forex blog

Forex Market Analysis provided by ForexYard.

© 2006 by FxYard Ltd

Disclaimer: Trading Foreign Exchange carries a high level of risk and may not be suitable for all investors. There is a possibility that you could sustain a loss of all of your investment and therefore you should not invest money that you cannot afford to lose. You should be aware of all the risks associated with Foreign Exchange trading.

By Central Bank News

USDCHF breaks below 0.9500 key support and reaches as low as 0.9478, suggesting that the uptrend from 0.9043 has completed at 0.9769 already. The pair is now in downtrend, further decline could be expected over the next several days, and next target would be at 0.9300 area. Resistance is located at the downward trend line on 4-hour chart, as long as the trend line resistance holds, downtrend will continue.

Forex Signals