Month: January 2014

Article by Investazor.com

The German data was posted today in line with the expectations. The German CPI rose with 0.4%. ECB’s Weidman said today in his speech that German economic upswing is continuing this year and next.

The price of futures German DAX30 has crossed above the rejection line of a Rising Wedge and plunged back under it pretty fast. The corrective move was signaled, on the 60 minutes chart, by the 24 periods RSI which went overbought.

If the price will fall under the current support level, 9700 (which is also a round number), we expect for the down move to continue all the way to the next important support at 9612. The fall could also be confirmed by a drop in the RSI under the 62 level (which is a good support).  A breakout above the 9772 high will invalidate this setup, and the upside target will be 9800.

Trigger Price: 9700     Take Profit: 9612      Stop Loss: 9742

The post DAX30 Trade Setup – Bulls could take the Lead appeared first on investazor.com.

By Jeff Clark, Senior Precious Metals Analyst, Casey Research – Contrarians’ Wildest Dream Coming True

As most readers know, Doug Casey’s most notable characteristic as an investor is his highly successful contrarian nature. It’s how he bagged some of his biggest wins—not just doubles and triples, but 10- and 20-fold returns.

There’s only one way to realize these kinds of gains: You must buy when the asset is out of favor. Buying an investment that has already run up is at best chasing momentum and at worst a portfolio wrecker.

So, what’s the greatest contrarian investment today? Consider this pictorial data…

At the end of 2013, the sector with the highest level of pessimism, as measured by SentimenTrader, was the gold industry. It actually registered “zero” in mid-December.

Meanwhile, price-to-earnings ratios of the 15 largest gold producers are at their lowest level in 14 years, and less than half what they were when the bull market got under way in 2001.

The ratio of gold to the S&P 500 Index is currently at 0.66, its lowest level since the market meltdown of 2008.

The next chart, from our friend Frank Holmes at US Global Investors, measures gold’s 60-day percent change in standard deviation terms. It shows the metal’s actual gain or loss in relation to its average price change—and it’s never been this low.

Another chart from US Global Investors demonstrates that last year’s decline in the Philadelphia Gold and Silver Index (XAU) was the greatest on record, and further, that consecutive annual declines are rare. The XAU is one of the two most-watched gold stock indices in the world, and in 30 years it’s never had a losing streak of more than three years.

Also, JPMorgan noted last week that speculative positions in gold (defined as net longs minus shorts) dropped to record lows at the end of 2013.

(Source: Zero Hedge)

Finally, the XAU/gold ratio is at its lowest point in history, and the HUI/gold ratio—the other major gold stock index—shows that gold stocks are now cheaper than they’ve been since the beginning of this secular bull cycle in 2001.

Of course, just because something is cheap today doesn’t mean it will soar tomorrow. But given gold’s historical role as money, butted up against monetary recklessness today, the outcome seems all but certain.

As Casey Editor Kevin Brekke recently put it: “We are in this sector because of our belief that monetary and fiscal excesses have consequences. The only variable is the timing. We may not know where we’re going in the short term, but the long term is inevitable.”

And right now, some of the most successful resource speculators and investment pros are seeing the early hallmarks of a turnaround in the gold sector—which makes this the best time to invest in the yellow metal as well as top-quality, undervalued gold mining stocks.

New to the gold market? Don’t despair: the FREE 2014 Gold Investor’s Guide, a Casey Research special report, gives you all the basics on precious metals investing. Click here to get it now.

By George Leong, B. Comm.

Here we are in just the third week of 2014 and the media is all over the stalling in the stock market, saying that perhaps we are at the end of the bull stock market that is now in its fifth year.

I’m hearing about the low level of the S&P 500 Volatility Index (VIX), also known as a measure of fear in the stock market. Yes, it’s low and perhaps the stock market is too relaxed, but that doesn’t always imply that we are headed for a stock market correction.

Traders are also concerned with the lack of buying so far in January, which, if it ends in the red, could suggest a down year for stocks based on historical tendencies—albeit, I doubt that.

We are seeing some stalling on the charts, as the new approach to investing this year appears to be one of prudence and not bidding the stock market higher until we see evidence of a healthier economy, stronger jobs creation, and earnings/revenue growth from corporate America.

I’m not surprised by this shift, given the massive stock market gains in 2013.

The impact of the Federal Reserve and its proposed tapering timeline appears to be less of a factor this year, as it is expected that the tapering will continue. The uncertainty surrounding tapering that drove the erratic trading of 2013 is gone; traders are now discounting in the tapering. (See “Stock Market’s Dependence on Easy Money Weakening?”)

My view is that as long as the withdrawal of the bond buying is slow and the economy delivers stronger and steady growth, market participants won’t be that upset.

A slight rise in long-term rates and the 10-year bond yield is not going to hurt the stock market that much, either.

In fact, I like a return to normalcy in the stock market, where gains are determined by the progress of the economy and earnings, and not merely driven by what the Fed does.

On the chart, the S&P 500 shows a clear breakout at the top multiyear resistance level. Now, the breakout may be false due to the lack of active participation as shown by the declining volume, but so far, it has held up pretty well, contrary to the overbought condition.

Some are arguing that the stock market is vulnerable, as it’s in its fifth year of the bull market and interest rates are heading higher around the corner.

Yet take a look at the two charts below. Note the long, extended bull market runs in the previous decades in spite of much higher interest rates that were at times in the double-digits, as shown by the green line in the first chart below.

            Chart courtesy of www.StockCharts.com

Stocks steadily rose from 1980 to 2000 before the technology meltdown in early 2000—that’s a 20-year rising stock market. Of course, we will face stock market corrections along the way, but the overall direction could continue to be higher.

            Chart courtesy of www.StockCharts.com

And this may be the case at this juncture. We could be in the midst of another extended bull market that could easily last in excess of five years. In fact, this could be the new norm.

In this case, until we see a reversal, investors should be in equities, riding the wave higher. If you want more of a risk-managed strategy, play the continued bull market via the use of bullish call options on the S&P 500, Dow Jones, and NASDAQ.

This article Could This Bull Market Last a Decade—Or Longer? was originally posted at Profit Confidential

GOLD Daily

Gold has turned bearish at the start of September, after the break through the rising trend line of a corrective channel. We knew at the time that it was an important signal for a change in trend, which means that bearish price action is back in play which also accelerated at the end of December, so we assume that price is moving down in larger wave 5) heading through 1180 June low. With that said, we think that current bounce is most likely just another corrective rally in the middle of a bearish trend. Resistance is seen around 1250/1270 from where new sell-off could occur.

Gold Daily Elliott Wave Analysis

GOLD 4h

Gold has reached a new swing high around 1254 in this week from where we can see some bearish price action. At the moment a decline from 1254 is definitely still not enough strong and big to confirm end of a three wave (a)-(b)-(c) corrective rally. But further weakness today and tomorrow, back to 1216 wave (b) zone will suggests that new sell-off on gold is in progress.

GOLD 4h Elliott Wave Analysis

Written by www.ew-forecast.com

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AUDUSD: Bearish, Deeper Weakness Triggered

AUDUSD: With a third day of downside pressure seeing AUDUSD breaking through its key support at the 0.8822 level, further weakness is envisaged. Support lies at 0.8750 level, its psycho level where bulls may come in. However, if that level fails to hold, expect further decline to occur towards the 0.8700 level, its psycho level and subsequently the 0.8650 level. Its daily RSI is bearish and pointing lower supporting this view. On the upside, resistance resides at the 0.8915 level, its Jan 16’2014 high followed by the 0.9000 level, its big psycho level with a cut through here paving the way for a run at the 0.9050 level. Further out, upside objective comes in at the 0.9166 level, its Dec 10 2013 high. All in all, the pair remains biased to the downside on further weakness.

Article by www.fxtechstrategy.com

By CentralBankNews.info
    Serbia’s central bank held its policy rate steady at 9.50 percent, repeating that it expects inflation to return to the bank’s tolerance range in the coming period and the bank is “determined to gear monetary policy at stabilizing inflation at that level on a long-term basis.”
    “Though inflationary pressures and expectations have both lessened significantly, the Executive Board accentuated the need for a cautious monetary policy considering the risks emanating from movements in international financial markets, and in particular the Fed’s decision on tapering the quantitative easing program,” the Bank of Serbia said.
    On Tuesday, the central bank issued a statement saying a weakening of the dinar currency over the last three days did not indicate any “durable disturbances in the FX market” but rather an expected response by the currency to a seasonally higher demand for foreign exchange by local companies and the Fed’s decision to start reducing its asset purchases from January.
    Last year the Serbian central bank cut its rate by 175 basis points as inflation slowed from 12.8 percent in January to a year-low of 1.6 percent in November. In December inflation rose to 2.2 percent but remains below the central bank’s tolerance range of 2.5-5.5 percent around a 4.0 percent midpoint.
    The central bank said on Monday that the current undershooting is largely due to a 2.5 percent decline in food prices in 2013, shown by the fact that core inflation – which excludes food, energy, alcohol and cigarettes – was 4.2 percent in December. The main contributor to inflation last year was administered prices, which rose 10.4 percent.
    Inflation is expected to rise moderately in coming months toward the bank’s target, driven by higher administered prices and a one-off impact of a rise in value-added-tax on some goods in January. Lower food production costs and weak demand will continue to have a disinflationary effect.
    In today’s statement, the central bank said a consistent implementation of fiscal measures, together with the weak inflationary pressure, will help increase the country’s resilience to external risks and aid the economic recovery.
    Serbia’s dinar currency was resilient to pressure on emerging market currencies in the middle of 2013 after global investors started to withdraw funds in anticipation of the U.S. Federal Reserve’s reduction in its asset purchases on improving growth prospects. Nevertheless, the central bank often expressed its concern over the consequences of a sudden capital outflow and was cautious in cutting rates.
    The dinar appreciated by 2.5 percent to the U.S. dollar in 2013, ending the year at 83.0 to the dollar, up from 85.13 at the end of 2012. But in the first few days of January, the dinar fell, triggering the central bank’s statement on Tuesday. Today the dinar was trading around 84.90, down 2.2 percent.
    The central bank also repeated yesterday that it would intervene, both on the sale and purchase side of the foreign exchange markets when necessary to mitigate excessive volatility and ensure stability.
    Serbia’s economy has been improving in recent months following two years of recession with Gross Domestic Product expanding by 1.4 percent in the third quarter from the second quarter for annual growth of 3.70 percent.
    The central bank forecasts growth of 1.5 percent this year and growth of 2 percent in 2013.

     http://ift.tt/1iP0FNb

By Mitchell Clark, B. Comm.

Looking for volatility? Stick with 3D (three-dimensional) printer stocks. While most continue to exude upward price momentum, valuations are off the charts and the action can only be described as “gut-wrenching.”

Stratasys Ltd. (SSYS) is a company we looked at back in November. Based out of Eden Prairie, Minnesota, Stratasys is one of the leading manufacturers of 3D printers. (See “In Spite of Hype, New Tech Sector Not a Fad.”)

The company’s share price is up six-fold since October of 2011, but it recently experienced its first blip in expectations. The stock dropped $15.00 a share, or about 11.5%, after reporting a 2014 earnings outlook slightly below existing consensus.

Still, this is very much a growth story, and it’s likely the company will continue to be a hot commodity on the stock market. Revenues for 2014 are expected to grow by a minimum of 25% organically.

But like many enterprises in high-growth mode, Stratasys is investing heavily in its business, hiring new sales people and spending on marketing. Combined with higher costs for research and development, total operating expenses this year are expected to rise considerably. The Street sold the position on the day of the announcement, exacerbated by the company’s extremely high valuation.

Almost twice as large as Stratasys is Rock Hill, South Carolina-based 3D Systems Corporation (DDD). This company has been on a tear, up by more than 100% on the stock market since this time last year.

The Street expects 3D Systems to grow its sales by 45% this year and another 30% next year. Earnings aren’t forecast to grow as quickly as sales for the same reason as Stratasys: these companies are investing heavily in future operations.

The ExOne Company (XONE) is a position I’ve looked at several times before in these pages. After a major price retrenchment in September of last year, the stock’s been fighting higher, slowly coming closer to its all-time record high.

This company is expected to become profitable this year on a 68% gain in sales over 2012. 2014 total sales are currently expected to grow another 51%, with a Wall Street median price target of $72.00 per share.

In terms of extreme investor enthusiasm, the valuation prize goes to one company—voxeljet AG (VJET), which is a German 3D printer manufacturer that listed on the NYSE last October. Selling 6.5 million shares at $13.00 each, the stock opened around $23.00, and then proceeded to hit $70.00 before retrenching to $35.00.

Its stock price currently sits just above $40.00. Total sales this fiscal year are expected to grow by more than 50% to approximately $24.5 million. With a market capitalization of more than $400 million on the expectation of break-even earnings results, this valuation is extreme.

But in hot markets, extreme valuations are nothing new. The marketplace always wants to own the fastest-growing companies, and price momentum feeds off of itself.

When interest rates are low and liquidity is strong, momentum trades can pay off nicely. The stock market and how you’re positioned is all relative. Being profitable is most important.

3D printer stocks are likely to continue their price momentum this year, and they will be one of the top speculative sectors for the next several years.

This article Top Stocks for Speculative Investors in 2014 was originally posted at Profit Confidential

By Michael Lombardi, MBA

I see more negativity towards gold bullion these days than ever before. And the more pessimism I hear and see, the more bullish I get on the precious metal.

After a bull market in gold bullion that lasted 12 straight years, 2013 was the correction year for gold bullion. It was the year that “separated the men from boys,” the investors from the speculators, when it came to gold bullion.

Consumer demand for gold coins continues to accelerate, and central banks around the world continue to be net buyers of the precious metal. Even small countries are getting in on the action. In 2013, Turkey imported 150% more gold bullion than it did in 2012! Turkey imported 302.3 tons of gold bullion in 2013, compared to 120.78 tons in 2012. (Source: Hurriyet Daily, January 3, 2014.)

The mainstream argument against gold bullion is that since there’s economic growth now, you don’t really need the precious metal…there’s no “crisis,” uncertainty, or inflation to send gold bullion prices higher. I don’t buy this argument for a New York minute.

The global economy is in a very fragile state. Major economic hubs are facing issues. China, India, Australia, the eurozone, and the U.S. economy show bleak economic performance. Just look at how bad the U.S. December jobs numbers were. (See “Pathetic December Jobs Numbers Proof 2014 to Be Challenging Year.”)

The third-biggest economy in the world, Japan, after years of money printing, reported an account deficit of 592 billion yen in November 2013—the country’s imports were more than its exports, as imports were up 230% over the same period a year ago. (Source: Ministry of Finance Japan, January 13, 2014.)

Through money printing and the lowering of the value of the yen, the Japanese central bank wanted to increase the country’s exports. It backfired…just like I believe artificially low interest rates and trillions of dollars in new money created here in the U.S. will backfire.

Many small world countries are in trouble. In Denmark, consumer debt has increased to 321% of the disposable income. This means that for every dollar earned, Danish consumers owe $3.21. In Sweden, debt compared to disposable income is around 180%—for every dollar earned, Swedish consumers owe $1.80. (Source: Bloomberg, January 14, 2014.) And Canada’s consumer debt level is at a record high.

On the monetary side, we have too much new money printed, too much debt among consumers. Economically, we are entering a period of slow growth for world economies (which will likely result in more money printing). Fundamentally, we have consumers and central banks retching up their gold buying.

The stocks of senior gold producing companies with lost cost production and proven reserves are selling at bargain basement prices. I believe we will one day look back at 2013 and say, “Boy, were gold stocks ever a bargain back then.”

This article If Gold’s a Bad Investment, Why Is This Country Buying 150% More of It?  was originally posted at Profit Confidential

By HY Markets Forex Blog

WTI dropped on Thursday, declining from the gains seen in the previous session after the Energy Information Administration (EIA) reported the US stockpiles data. However, the European benchmark Brent crude was seen lower, after Iran finalized an agreement with the Western powers over its nuclear program.

The North American West Texas Intermediate (WTI) crude dropped 0.34% lower at $94.04 a barrel at the time of writing, while Brent edged 0.58% lower at $105.66 a barrel at the same time.

WTI – US Stockpiles

The US Energy Information Administration (EIA) released the stockpiles data on Wednesday, showing a drop of 7.66 million barrels to 350.2 million during the week ending January 10.

Distillate supplies, including heating oil and diesel, slid 1.02 million barrels, reports from the EIA confirmed. Analysts forecasted supplies would increase by 1.25 million.

Reports from the American Petroleum Institute revealed that US weekly crude stocks declined by 4.14 million.

WTI – Iran Deal

Over the weekend, Western powers including the US, China, Russia, France, Germany and the UK finalized a six-month deal with Iran, over the country’s nuclear program; which will be implemented from January 20. As part of the deal, the Persian nation will scale back its nuclear developments, while the US will ease economic sanctions.

“Iran will also continue to take steps throughout the six months to live up to its commitments, such as rendering the entire stockpile of its 20% enriched uranium unusable for further enrichment,” Secretary of State , John Kerry said.

Iran have only been producing approximately 1 million barrel a day, the lowest in nearly 30 years; due to the sanctions imposed on the country.

WTI – Libya

Libya’s production has risen to 650,000 barrels per day (bdp) from 210,000 barrels a day in December, after the country’s largest oil fields, El Sharara restarted and production reached 300,000 barrels per day. However, production in the country is still below July’s level of 1.2 million barrels.

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By HY Markets Forex Blog

Gold traded slightly high on Thursday, halting the two-day decline from the highest level in a month on speculation that the Federal Reserve (Fed) could continue to reduce its asset purchases at its next meeting on January 28-29.

Gold Futures rose 0.40% higher to $1,243.30 per ounce at the time of writing, while the silver futures gained 0.48% standing at $20.22 per ounce at the same time.

In December, the Federal Reserve (Fed) decided to reduce its monthly bond purchases to $75 billion from $85 billion. Market participants are focusing on the next Fed meeting scheduled for January 28-29 for more hints.

The US dollar index dropped 0.06% lower to 80.981 points at the time of writing.

Assets in the world’s largest gold-backed exchange-traded fund, SPDR Gold Trust, came in at 789.56 tones lower on Wednesday.

Gold – World Bank

The World Bank raised its global growth forecast on Tuesday, increasing its forecast to 3.2% this year, 3.4% by 2015 and 3.5% the year after.

The US gross domestic product (GDP) is forecasted to increase by 2.8%, while Japan and the eurozone will expand by 1.4% and 1.1% respectively.

Gold – US Data

The New York Manufacturing Index advanced 12.51 higher in January, rising above analysts forecast of 3.50 and compared to the previous reading of 2.22.

The US producer prices edged 0.4% higher on a month-to-month basis in December, rising from 0.1% recorded in the previous month.

The central bank’s Beige Book business survey, revealed the US economy continuous to grow at a moderate pace across most of the country.

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