Month: December 2013

By Moe Zulfiqar for Daily Gains Letter

A friend of mine recently asked if he should invest in Bitcoin. He was astonished with its growth; he said, “I can’t believe it. You could get one Bitcoin for $100.00 not too long ago, and now that looks cheap!”

He asked if there will be growth in the digital currency in the long run, and if he will be able to make money for his portfolio. My response was simple: “I don’t know.” He didn’t like my answer at first, but when I explained further, his perspective toward Bitcoin changed.

You see, I am a big believer in investing in what I know. For example, I like to look at companies whose business I understand—I understand how they make sales and generate their profits. When it comes to foreign exchange, I look at currencies of countries that I know I can learn more about and the data sources are reliable.

But when it comes to Bitcoin, I am still uncertain about how it is priced. With stocks, you can get a general idea about where the stock prices might be headed. You can look at analysts’ expectations and the like. With Bitcoin, it isn’t mainstream just yet. There are some analysts who are saying the digital currency will skyrocket, while on the other side, there are those who are saying it will die as quickly as it became famous. At the very core, there’s too much noise.

On top of this, there’s too much volatility in Bitcoin’s value. I was watching a live chart of Bitcoin prices compared to the U.S. dollar not too long ago, and in a matter of minutes, the digital currency’s value increased roughly $30.00, then declined, then came back up to its original value, and then it declined even more. This can be problematic, because it pretty much turns an investor’s portfolio into a roller coaster ride. Investors might see massive gains one minute, but huge losses the next. Simply put, gains and losses are very uncertain.

When it comes to investing for the long run, instead of just getting caught up in the noise, and running for “what’s hot” in the market, investors should do their own due diligence. The idea behind long-term investing is to have a portfolio that grows over time with minimized risks. By investing in securities like Bitcoin, this is certainly not achieved.

I believe the digital currency is currently in the price discovery mode. This is when the prices of a certain asset are evaluated through the marketplace. In this phase, there are wild fluctuations, because not a lot is known about the asset.

Will Bitcoin ever be recognized as a stable currency without a central authority?

This may become the case sometime in the future, but for now, there’s scrutiny around it. For instance, the central bank of China has banned third-party payment companies from doing business in Bitcoin. (Source: Spaven, E., “China Bans Payment Companies from Working With Bitcoin Exchanges, Sources Claim,” CoinDesk, December 16, 2013.)

Similarly, the European Banking Authority (EBA) has said that “Currently, no specific regulatory protections exist in the EU that would protect consumers from financial losses if a platform that exchanges or holds virtual currencies fails or goes out of business.” (Source: Jones, h., “EU banking watchdog warns of risks from Bitcoin,” Reuters, December 13, 2103)

A portfolio that is well-diversified can go a long way. When it comes to Bitcoin, investors should wait and see how this all turns out. Getting involved in the digital currency now could drastically hurt their portfolio, and this can eventually set them back on their goals.

Bottom line: invest in what you know.

Original Link: http://www.dailygainsletter.com/us-dollar/bitcoin-the-next-hot-trade-or-a-scam/2250/

By George Leong for Daily Gains Letter

This year, Christmas will bring joy to many investors with the stock market now nailing gains in excess of 30% for the NASDAQ and Russell 2000. Even if you are a more conservative investor buying DOW and S&P 500 stocks, your wallet still got bigger.

What has surprised me this year has not been the advance as much as the ability of the stock market to avoid a sizable stock market correction. The S&P 500 retrenched about 6.5% in May and June after the Federal Reserve first uttered the word “taper.” Yet the downcast mood didn’t last that long, as traders quickly entered the market and bought on the weakness. This has largely been the pattern this year, where any sign of weakness was followed by buying.

Chart courtesy of www.StockCharts.com

Now I’m not a pessimist, but I do believe in market adjustments along the way. At the beginning of the year, I predicted the stock market would move higher, but not at the rate and size we saw. Maybe a 15% upside, but definitely not 30% plus.

Record after record, the stock market appears to be looking to higher ground. I remain bullish at this time, especially if consumers decide to up their spending. Yet there’s still the lack of revenue growth in corporate America that hopefully could correct itself as we move into 2014.

At this point, you really should look to realize some profits, especially on your big winners, prior to the year-end tax season. To counter some of the gains, I suggest you also divest some of your dogs in your portfolio. Look, we all make mistakes; investing is not foolproof, and mistakes are inevitable. However, it’s an opportune time to dump losers, as the stock market advance has helped to drive up the price of even the poor companies.

In addition to liquidating some positions and getting set for 2014, I also suggest you look at hedging against a possible stock market correction via the use of put options. This investment strategy is used by pros and retail investors.

The employment of a put option strategy is easily done by buying put options for a stock or a group of stocks on the situation you may be weighted in a particular sector.

If you are heavily weighted in technology and small-cap stocks, you can buy put options on the NASDAQ and Russell 2000. In blue chips or large-caps, look at buying puts on the DOW and S&P 500.

Alternatively, you can also buy bearish ETFs on just about any index or sector, both domestically and for international stock markets.

Achieving success in the stock market is not about gambling, but about careful thinking and pursuing proper risk management strategies.

Source: http://www.dailygainsletter.com/stock-market/two-key-steps-to-stock-market-success-in-2014/2256/

By HY Markets Forex Blog

WTI crude traded close to its highest price in a week, following the Federal Reserve’s announcement to reduce its monthly purchases and the drop in U.S crude stockpiles.

Futures were trading slightly flat after U.S crude inventories declined by 2.94 million barrels  to 372.3 million barrels in the week ended Dec 13, dropping for a third week, reports from the Energy Information Administration confirmed.  The Federal Reserve (Fed) announced it will begin to reduce its $85 billion monthly bond purchases to $75 billion, starting next year January, Fed Chairman Ben S. Bernanke said.

“The Fed has given an endorsement to the growth that’s coming through with this decision,” Chief strategist at CMC Markets Michael McCarthy said. “From a technical point of view, West Texas is bumping up against resistance,” he added.

West Texas Intermediate for January delivery came in at $97.71 per barrel on the New York Mercantile Exchange at the time of writing. While the European benchmark for February settlement declined 0.2% to $109.41 per barrel on the ICE Futures Europe exchange. Brent crude was at a premium of $11.42 to WTI for the same month.

WTI Crude – Federal Reserve Tapering

On Wednesday, the Federal Reserve (Fed) concluded its two-day meeting with an announcement to begin scaling-back on the central bank’s monthly asset purchases by reducing it by $10 billion.

The Federal Reserve’s purchases will be divided into $35 billion in mortgage bonds and $40 billion in Treasuries starting from January next year, the Fed Chairman confirmed.

The unemployment rate dropped to 7% in November, dropping to the lowest level in five years. According to the International Energy Agency, the US; the largest oil consumer in the world, is expected to account for nearly 21% of global demand this year.

WTI Crude – Fuel Supplies

A report from EIA showed that crude stockpiles in Oklahoma dropped by 600,000 barrels to 40.6 million in the week ended December 13.

Gasoline inventories added 1.34 million barrels; lower than analysts’ forecast of a 1.5 million rise, a report from the Energy Department Statistical arm confirmed.

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The post WTI Crude Close to One-Week High; Fed to Begin Tapering appeared first on | HY Markets Official blog.

Article provided by HY Markets Forex Blog

By HY Markets Forex Blog

The price of Gold dropped to the lowest level in almost two weeks, following the Federal Reserve’s (Fed) announcement to begin the tapering of its monthly bond purchases as the world’s largest economy is improving so as the U.S jobs market.

Bullion futures prices dropped 1.12%, trading at $1.221.90 an ounce at the time of writing. Gold futures for February delivery fell 1.3% to $1,219.40 on the Comex. Silver futures declined 3.61% to touch $19.335 an ounce.

The Federal Reserve (Fed) concluded its two-day meeting by announcing to begin tapering its $85 billion monthly asset purchases to $75 billion.

Holdings in the world’s largest gold-backed exchange-traded fund, SPDR Gold Trust, came in at 812.62 tones on Wednesday, marking its lowest level since January 2009.

The US dollar index, which measures the strength of the US dollar against a basket of six major currencies, edged 0.62% higher at 80.603 points.

Gold – Federal Reserve Tapering 

On Wednesday, the Federal Reserve (Fed) concluded its two-day meeting with an announcement to begin scaling-back on the central bank’s monthly asset purchases by reducing it by $10 billion.

“Reflecting cumulative progress and an improved outlook for the job market, the committee decided today to modestly reduce the monthly pace at which it is adding to the longer-term securities on its balance sheet,” Fed Chairman Ben S. Bernanke said on Wednesday.

The Federal Reserve’s purchases will be divided into $35 billion in mortgage bonds and $40 billion in Treasuries starting from January next year, the Fed Chairman confirmed.

Gold – US Data

The Department of Commerce confirmed the annual housing rate started from a 22.7% high to 1.091 million in November, compared to analysts’ forecast of a 954.000 unit pace. While in October, it rose to 889,000.

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The post Gold Swings to Two-Week Low on Fed-Tapering Announcement appeared first on | HY Markets Official blog.

Article provided by HY Markets Forex Blog

Article By RoboForex.com

Analysis for December 19^th, 2013

EUR/USD

It looks like Eurodollar is reversing. In the near term, local correction may continue. Later, price is expected to continue falling down towards level of 50%.

As we can see at H1 chart, current short-term correction may reach level of 38.2%. If pair rebounds from this level, price will start new descending movement. According to analysis of temporary fibo-zones, lower targets may be reached by the end of the week.

USD/CHF

Franc started fast ascending movement. Most likely, in the future pair will continue growing up. Closest target for bulls is correctional level of 50%.

At H1 chart we can see, that current ascending movement may yet continue. However, during the day pair may start slight correction, which is unlikely to be more than 38.2%. If price rebounds from this level, I’ll consider opening buy orders.

RoboForex Analytical Department

Article By RoboForex.com

Attention!
Forecasts presented in this section only reflect the author’s private opinion and should not be considered as guidance for trading. RoboForex LP bears no responsibility for trading results based on trading recommendations described in these analytical reviews.

By WallStreetDaily.com

Get fit – or get fatter!

That will certainly be the most common decision made by Americans as the calendar flips into 2014, whether it’s a conscious one or not. Because the stats don’t lie…

Currently, two-thirds of adults (and nearly one in three children) are overweight or obese, according to the U.S. Surgeon General.

No wonder “losing weight” is the most popular New Year’s resolution year in and year out.

Always the opportunist, I find myself wondering if this is a tradable phenomenon. So I decided to dig into the numbers to find out.

Let’s just say that the results were more shocking than the number of people who actually keep their New Year’s resolutions.

‘Tis the Season

The sudden urge to slim down each New Year definitely boosts sales for leading weight-loss companies, NutriSystem, Inc. (NTRI) and Weight Watchers International, Inc. (WTW).

Their first-quarter sales have improved sequentially over the past six years – by an average of 60.2% and 25.1%, respectively.

Now, plenty of companies witness such severe seasonality – particularly in the retail sector. And as investors come to expect it over time, this shouldn’t be an exploitable phenomenon.

Well, that’s where the shock comes in…

Another Market Myth Gets Busted

Over the last decade, both NutriSystem and Weight Watchers averaged gains in the first three months of the year. And February and March represent particularly positive months, meaning the strong sales results coincide with strong stock returns.

(Consider this the latest proof that efficient market hypothesis is total bunk.)

Now, what about the inconsistent performance during the middle of the year? Well, it’s hardly coincidental…

After all, 36% of Americans give up on their New Year’s resolutions within one month, 54% cry uncle within six months, and only a pathetic 8% keep their resolutions all year, according to research out of the University of Scranton.

Essentially, as more customers bail – forcing the companies to adjust sales guidance – investors head for the exits, too.

Like clockwork, though, investors return near the end of the year in anticipation of a new crop of weight-loss resolutions.

Again, this stock market seasonality shouldn’t exist. But it does, making now an attractive time to consider entering a position.

Careful, though! Only one of these stocks represents a solid investment.

Choose Wisely

All signs point to NutriSystem being the best bet.

It averages positive returns 66% of the time in the first quarter of the year, compared to 43% for Weight Watchers.

February is historically the best month for the stock, with positive returns an impressive 90% of the time over the last decade.

A quick glance at the fundamentals seals the deal.

NutriSystem might be trading at a higher valuation than Weight Watchers, with a forward price-to-earnings ratio of 25.7 versus 11.2. But it’s deserved.

Analysts expect the company to boost sales and profits by 15% and 65%, respectively, next year. In comparison, Weight Watchers is expected to witness an 8.5% decline in sales and almost a 10% decline in profits in 2014.

Bottom line: Self-improvement goes hand in hand with the New Year. And profits can, too, now that you know how to cash in on Americans’ inability to commit.

Ahead of the tape,

Louis Basenese

The post The Scary Truth About New Year’s Resolutions… and How to Trade It appeared first on Wall Street Daily.

Article By WallStreetDaily.com

Original Article: The Scary Truth About New Year’s Resolutions… and How to Trade It

Article By RoboForex.com

Analysis for December 19^th, 2013

EUR/USD

H4 chart of EUR/USD shows descending correction, which started after Tower and Tweezers patterns. Three Line Break chart and Heiken Ashi candlesticks confirm bearish tendency.

H1 chart of EUR/USD shows bearish tendency, which is indicated by Tweezers pattern. Three Line Break chart confirms descending movement; Harami pattern and Heiken Ashi candlesticks indicate bullish pullback.

USD/JPY

H4 chart of USD/JPY shows bullish tendency within ascending trend. Three Line Break chart and Heiken Ashi candlesticks confirm ascending movement.

H1 chart of USD/JPY shows correction within ascending trend, which is indicated by Tweezers pattern. Three Line Break chart confirms current trend; Heiken Ashi candlesticks indicate that correction continues.

RoboForex Analytical Department

Article By RoboForex.com

Attention!
Forecasts presented in this section only reflect the author’s private opinion and should not be considered as guidance for trading. RoboForex LP bears no responsibility for trading results based on trading recommendations described in these analytical reviews.

EURUSD is facing the support of the lower line of the price channel on 4-hour chart. As long as the channel support holds, the uptrend from 1.3296 (Nov 7 low) could be expected to resume, and another rise to test 1.3832 (Oct 25 high) resistance is still possible. On the downside, a clear break below the channel support will indicate that the uptrend had completed at 1.3810 already, then the pair will find support around 1.3400.

Provided by ForexCycle.com

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By MoneyMorning.com.au

When you think of Google these days what comes to mind? For me I no longer think of them as my search engine. Nor do I think about them as the world’s best advertising company.

For me, Google these days is more about the future. By that I mean I get the feeling Google are starting to build not just the world’s biggest company, but also possibly the world’s biggest empire (cue Star Wars music).

In fact I’ve said before there’s every chance that Google (or Apple or Microsoft) one day could become a sovereign state. GoogZealand, or GooGreece perhaps. They’ve got the money to buy a country, and with the state of some global economies it might actually just make sense.

The more I look into it, the more I can’t help but think Google is setting up to become the world’s next superpower…in about 50 years time.

Take a second to think about that. Google, with the might and power of China or the US. Right now some of you will probably slam the keyboard in disgust and say, ‘What is this guy on. As if a private company could challenge government.’

And I hope one or more of you do think this is one of the craziest things you’ve heard of. That means I’m doing my job; at least it’s making you think.

The Beginning of the Takeover

Let me reel through a few of the projects Google has, been working on in recent times.

Google Search: The obvious one. To organize the world’s information and make it universally accessible and useful.

Google Chrome: The most used web browser in the world. Want to control the internet? Control how people look at it and how they get their information from it. Chrome is now becoming more than just a web browser. Chrome Cast is now taking Chrome onto your TVs.

Android Operating System: The world’s most used mobile operating system. This one came from their Moonshots division. Android was a project by the company Android. Then Google bought them. Now more mobiles devices in the world use Android than any other kind of operating system.

Project Loon: Balloon powered internet for everyone. Some people live in areas where they can’t get the internet. Well not anymore. By putting some balloons about 20km into the atmosphere Google will be able to provide high speed internet…to everyone.

Google Fiber: Internet 100X faster than today’s average broadband speeds. Google knows that to advance technology we need super fast internet. So instead of waiting for snail-paced Telco’s to do something about it, they did.

Google Calico: To tackle the challenge of ageing and associated diseases. This is Google trying to solve immortality. Plain and simple. This company, under Google’s umbrella, will seek to reverse or at least slow the ageing process.

Now the projects mentioned above are just a few of the things Google is working on. What you’ll notice is each takes on a very different industry. ‘Search’ is based on information and dissemination of information. Chrome takes on how we use and navigate the internet. Fiber and Loon are huge, successful, infrastructure projects. (Take note Mr. Turnbull…and your incompetent predecessor Conroy).
And Calico is taking on healthcare.

Now throw into the mix Google self driving cars (transport), Google+ (Social Networks), Google Shield (Cyber Security), and you start to see a lot of key portfolios that…let’s say a government would typically look after.

Probably won’t be long before there’s a Google Borders Without Barriers (Immigration), Googlympics (Sport) and who knows what else.

Where I’m heading with this is there’s one more project Google has just dove head first into. And that my friends, is Robotics.

It’s Not Like Terminator…It Is Terminator

You may have heard of a company, Boston Dynamics (BD). They’re responsible for making some of the worlds most advanced robots over the last couple of years. You can get intimate with the Boston Dynamics robots if you…Google…’BigDog’, ‘Atlas Robot’, ‘Cheetah Bot’ and ‘LS3′. (The Atlas Robot is the closest thing I’ve seen to a T-800)

What’s worthy to note is that for a significant period of time, Boston Dynamics has been part-funded by DARPA. That’s the American government’s highly secretive technology development division.

Well, not anymore. Google just bought Boston Dynamics. Google want in on Robots. And for good reason too.

You see our future will heavily rely on robots to do many of the day-to-day, menial tasks that we (humans) simply don’t want to do, or can’t do as well as a robot.

But for most people the term robot means exactly the kind of robots BD make. But there’s more to it than that.

Robots, by definition are, ‘a machine capable of carrying out a complex series of actions automatically, especially one programmable by a computer.‘ (I Google’d that definition by the way).

That means robots come in many shapes and sizes. It might be your self-driving car, your advanced 3D printer, your home surgical robot…even a robot pet. These are all real examples of robotics available now.

The Most Important Tech in a World of Technology

And like all complex machines, there’s a few key technologies that make them work at all. Without this technology any future robot will be useless.

At the very heart of all complex computers and robots are semiconductors and graphics processing units (GPUs) that help make the thing work. These tiny chips are the lifeblood of technology because without them information can’t be processed fast enough.

You think about how long it used to take you to download a whole webpage. Or even upload a photo back in the good old days of the early computers. Now think about how long it takes you to do those tasks now.

Now think about the most complex things you’ve ever done on a computer. It might be making a video, or playing a video game. The point is the only reason you can do so with such ease and speed now is the semiconductors, sensors and GPU’s that drive the beast.

Now picture the kinds of complex programming, and the kind of information, that’s needed to make a fully functional robot work…

While you’re thinking I’ll give you the answer; it’s a lot. Thousands times more than the processing speeds you’re used to at home. And that’s where the real opportunity lies when a company like Google decides it wants to get into Robotics.

Whether Google wants to take over the world with robots or not doesn’t really matter.

While most people will focus on the end result, it’s the sum of all the pieces that make the part. And that’s why the real opportunity is investing in the companies that make semi-conductors, GPU’s and hardware accelerators. Because without these technologies no robot is going to be able to process the data to even work properly.

In fact semi-conductors, GPU’s, sensors and microchips aren’t just vital to the future of robotics. They’re the key to any future with technology in it. Put it this way, when mankind evolved/created (whatever your beliefs) would you have invested in air if you had a chance?

It’s the same here. Technology needs semi-conductors, GPU’s, sensors and microchips. These tiny technologies are air to the machines and robots of the future.

These technologies are so important Kris Sayce and I have been working tirelessly on how to profit from it all. We’ve found what we consider to be the best companies set to capitalise on these amazing future technologies.

And that’s why we’ve got a big announcement to make this Friday.

You’re going to live through a time of enormous change. The things I’m writing about you’ll see happen with your own eyes. And we want to make sure when you see it, and experience it, you’ll also profit from it.

Sam Volkering,
Technology Analyst

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By MoneyMorning.com.au