GBPUSD remains in uptrend from 1.5854 (Nov 12, 2013 low), the price action from 1.6593 could be treated as consolidation of the uptrend. Key support is at 1.6337, as long as this level holds, the uptrend could be expected to resume, and another rise towards 1.7000 is still possible. On the downside, a breakdown below 1.6337 support will indicate that the upward movement from 1.5854 had completed at 1.6593 already, then the following downward move could bring price back to 1.6100 zone.
More than once we’ve explained that it’s important to make predictions when investing.
If you don’t make predictions you’re flying blind with your investments.
You need to predict what you think will happen to a share price…to a sector…to an entire economy.
So folks who say that making predictions about the future is pointless are fools. What would they suggest investors try to predict? The past?
No, you’ve got to predict. And regardless of whether you get the prediction right or wrong, it at least means that you’ve weighed up all the possibilities about what could happen next.
So, what will happen next?
We’ll get to what happens next in a moment.
But when it comes to predictions there aren’t many with a better record of getting them right than our old pal Dan Denning.
In 2007 he told readers of his investment advisory service to sell US stocks just before the market hit the record high and then collapsed. It was a prescient move.
At the end of 2012 he told readers of The Denning Report that the market would likely shift from bonds to stocks in order to benefit from falling interest rates and higher dividend yields. That was pretty much the start of the rally that took stocks to multi-year highs in 2013.
Now Dan is back with his predictions for 2014. You shouldn’t miss his take on where stocks are going next. Go here for more.
As for our view, nothing much has changed.
Our bet remains that Aussie and global stocks have barely started what could be a multi-year (perhaps even a multi-decade) stock rally.
The fact that the Aussie market has lagged many other markets only confirms our belief that the Aussie market has plenty of ground to make up over other national stock markets. That’s why we’re betting on the Aussie market having a standout year in 2014.
But that doesn’t mean it will be risk-free returns. Stories such as this from Bloomberg News suggest we’re still in for a volatile time:
‘The Federal Reserve will stick to its plan for a gradual reduction in bond purchases, economists said after a government report showed that U.S. employment rose at the slowest pace in three years in December.
‘The Fed will reduce purchases by $10 billion at each of the next six meetings this year before ending the program in October, according to the median forecasts of 42 economists in a Bloomberg survey.‘
Suppose the Federal Reserve does cut back its current bond-buying program to zero; it still means the Fed will buy a heck of a lot of bonds between now and October. Let’s do some rough maths. The Fed doesn’t meet on a regular monthly schedule like the Reserve Bank of Australia. The Federal Open Markets Committee (the body that sets the Fed’s interest rate target) meets eight times per year, at roughly six week intervals.
If the Federal Reserve began cutting back its spending each month, here’s how it would pan out:
January – buys US$75 billion – cuts program for February to US$65 billion
February – buys US$65 billion – FOMC doesn’t meet
March – buys US$65 billion – cuts program for April to US$55 billion
April – buys US$55 billion – cuts program for May to US$45 billion
May – buys US$45 billion – FOMC doesn’t meet
June – buys US$45 billion – cuts program for July to US$35 billion
July – buys US$35 billion – cuts program for August to US$25 billion
August – buys US$25 billion – FOMC doesn’t meet
September – buys US$25 billion – cuts program for October to US$15 billion
October – buys US$15 billion – cuts program for November to zero
The cumulative amount of bonds the Fed will buy between now and October would be US$450 billion.
Once again, that’s US$450 billion. Put another way, that a hair’s breadth short of half a trillion dollars. Perhaps you see now why we laugh at the notion that the Fed is somehow cutting the markets adrift.
And remember, this assumes that the Fed follows the expected plan and cuts by US$10 billion at every single meeting. In our view there’s a better than even chance that the Fed doesn’t cut at all some months, just to show the market that it’s ready to step back in and support if necessary.
We’ll put it another way to make our point.
Do you remember TARP (Trouble Asset Relief Program) back in 2008? It was the big scheme put in place by former US president George W Bush and his Treasury Secretary Hank Paulson.
At the time, the size of the program stunned everyone. Paulson announced the US Treasury would authorise up to US$700 billion-worth of asset purchases. As it turns out, the program ‘only’ spent US$431 billion.
In other words, over the next 10 months the US Federal Reserve will spend more than the entirety of TARP with its bond buying program. So let’s put an end to the idea that the Fed is somehow pulling back on supporting the financial markets.
Remember the name we gave the latest Fed bond-buying program? That’s right, we called it ‘QE Infinity’. We gave it that name because we have no doubt the Fed will keep buying assets and propping up the market. The Fed has made that clear in all its statements.
As have the other central banks such as the European Central Bank (ECB) whose president, Mario Draghi, said the ECB would do ‘whatever it takes‘ to support the markets.
This all goes to support our view that, despite plenty of bumps along the way, stocks will keep rising this year. Even if the Federal Reserve cuts its current program to zero, be in no doubt that another program will emerge if markets get withdrawal symptoms.
So, that’s our prediction for the year. As we mentioned at the top of this letter, it’s important to make predictions. By making a prediction for the year ahead you can judge where you believe the market is heading and how confident you are of your prediction.
We’re certain we’re right. That’s why we recommend buying stocks to potentially benefit from a rising market. But we’re also aware that there are still many problems facing world economies. If things pan out worse than we expect and central banks aren’t quick enough to prop up falling markets then you could see stock prices fall.
Cheers,
Kris+
Special Report: Three Predictions for 2014
Gold’s main fundamental relationship over the past 10 years has broken down.
It’s a rude awakening to gold holders. However, understanding this break in the trend is imperative for figuring out gold’s next move – up or down.
Today we’ll take an in-depth look at what’s going on. Avoid this gold update at your own peril!
‘Most gold bugs won’t see it coming‘ says my colleague Greg Guenthner, editor of the aptly named Rude Awakening.
‘Unfortunately for them‘ he continues, ‘many of these gold bugs will keep holding – trying to ‘hope’ the losses away – all the way to the bottom.‘
Although he didn’t specifically come out and say it, I know Mr. Guenther was referencing what I believe is the #1 fact that gold investors must know. That is, you can’t trust the most commonly-listed fundamentals for gold.
Luckily we’ve got a graphic to sum up what I’m talking about.
You see, the seemingly unbreakable 10-year, fundamental relationship between gold and the M2 money supply is done-for. Now that we’ve given the long-term chart some time to shake-out, it’s clear that this is a game-changer.
Point being: the money supply is still rocketing higher, interest rates are abysmally low, the Fed is continuing to pile nearly $1 trillion per year into bond purchases and yet gold prices are floundering.
Gold, from a fundamental standpoint, is now on its own. We can’t count on any semblance of a relationship with the money supply. Frankly we can’t even count on supply and demand data in the physical space – even that’s been a crapshoot lately. In a moment I’ll tell you what gold we CAN count on, but first…
If you didn’t pick up on this trend early in 2011 or 2012, then 2013 was a staunch reminder that the good old days of gold fundamentals are gone. In regard to the chart above, the relationship between the money supply and gold, for now, is dead. You can’t say it any other way.
That’s the great part about analysing the charts. You don’t need to get into the nitty gritty of quantitative easing (QE)…where the money is flowing…or what the new Fed Chairman Janet Yellen is thinking. Instead you can just look at the aftermath. From the chart above you can see that there’s a clear disconnect between a gold bug’s fundamental argument and what’s really happening – a costly disconnect for traders.
In the meantime, if you’re wondering what IS following the money supply higher, the answer is simple: stocks.
Over the past five years The Dow, S&P and Nasdaq have continued a steady move higher. Over the past 24 months these broad-based stock barometers have moved in near lock-step fashion with the Fed’s increased balance sheet.
Indeed, as the Fed continued to utilise its QE policies it was stocks, not gold, that have gained.
Back to our metal discussion, gold is on its own now.
On that note allow me to be clear: Just because gold decoupled from its fundamental relationship doesn’t mean it’s automatically headed lower. No, this does NOT guarantee gold’s demise. Rather, it’s an important factor you MUST consider when investing in gold or gold shares.
You can’t just look at the skyrocketing money supply and assume gold is headed higher.
Same goes with some of the other fundamentals we’ve followed in these pages. Sure, you can tally the physical gold buying world-over, the easy money policies in the US , check your favourite ‘overbought/oversold’ indicators or even look at the US dollar index as an inverse indicator – but over the past 12-24 months none of them would have done us a lick of good.
The single factor that we can count on going forward is simple price action. Until we can latch on to the next meaningful fundamental trend, we’ll have to keep a keen eye on price targets, support and resistance.
The most recent level of important support is the $1,200-level. For gold to make a leap higher we’ll have to see continued support above this level. If gold breaks to the downside – no matter what happens in the fundamentals – we could be in for a rocky road.
To steal a term from Mr. Guenthner above, in the short-term we won’t be able to ‘hope’ the losses away. Keep an eye on prices and beware of latching on to fundamentals – it could prove to be our best advice for the coming year.
Matt Insley
Contributing Editor, Money Morning
Ed Note: The above article was originally published in Daily Resource Hunter.
By Chris Vermuelen – The Gold and Oil Guy
2013 was one of the worst years for gold in a generation and the strangest part of it is that this loss came during a time in what should have been a banner year for gold.
When the Fed launched its QE1 and QE2 programs, gold posted huge gains but with QE3, we only had a brief rally in late 2012, it’s been all downhill for there.
The price of gold over the last year highlights just how much Europe has become a powerful driver behind gold vs. the US which has historically been the main mover. When the European debt crisis started a few years ago, people fearing a financial meltdown in Europe put a lot of their money into gold as it was the save haven of choice.
However, with financial and political risk in Europe subsiding, we have seen money leave gold and move into other markets, hence the big outflows from gold ETF’s.
Other factors that have dragged on gold over the last year include falling jewelry demand, the loss of its role as an inflation hedge with deflation becoming more of a concern in some areas, also tax increases on gold imports in India, and the supposedly improving economy in the US. All these contributed to the selling of gold.
Gold and gold stocks crashed last year in the summer. They have since been going through a stage one base. This suggests that 2014 will mark the start of a new bull market for gold, gold mining stocks and commodities. The commodity sector as a hole should be your focus in the coming months if you want to be able to invest in something for longer than a few days or weeks and make a huge amount of money be sure to check out my gold newsletter.
Gold market traders and manipulators like some of the commercial banks/brokerage firms have been verbally slamming gold, and it turns out many are not as negative as lead us to believe…
Goldman Sachs we all know are the biggest hypocrites. While advising clients to sell gold in the second quarter of 2013, they bought a stunning 3.7 million shares of the GLD. And when Venezuela needed to raise cash and sell its gold, guess who jumped in to handle the transaction? Yup, GS! So while they tell everyone to sell gold, they are accumulating as much as they can without being obvious.
There is a lot more reasons and fundamentals to be bullish on commodities and gold, but that is not the point of this technical based report.
Taking a quick look at the CB index which is a basket of commodities, it looks as though a breakout above its down trend line will trigger a new bull market in the commodity sector. While this has not yet happened it looks s though it may happen in the next few months.
On stock market that recently broke out of a Stage 1 basing pattern (new bull market) is the Toronto Stock Exchange. This index is heavily weighted with commodity based stocks. I talk about this more in my new long-term algorithmic trading newsletter.
In this report I want to show you some interesting charts that are pointing to a new gold bull market cycle which looks to be starting.
The chart below of the gold miner’s bullish percent index is often misread by many traders and trade off its information incorrectly. Many for example think this index is based on stocks trading above a moving average which is no correct.
How a bullish percent index is calculated is based on Point & Figure buy and sell signals with each individual stock within the sector and in our case the gold minders ETF GDX.
Gold prices peaked in 20111 at $1923 an ounce when the gold mining stocks index was above 80%. Why is this important? Because gold stocks typically lead the price of gold in both directions, tops and bottoms.
As of today we have the reverse situation with the bullish percent index at 13% and showing bullish divergence from that of gold stocks. This is an early signal that the new gold bull market cycle is turning up and it should not be overlooked.
Also we see the 5th and final Elliott wave pattern forming and we could once again whiteness another multi year rally in the price of gold.
Gold stocks have not yet broken out to start a rally as you can see in the chart below. But the important thing to note is that the daily chart has formed a mini Stage 1 Basing patterns and could breakout this week to kick start a multi month/year rally.
If you have been following me for a while, you know I don’t try to be a hero and pick tops or bottoms. We all know that strategy is a losing one over the long run.
Since 2011 I have been a very dormant gold trader. Why? Because the price and technical indicators topped out and confirmed a massive consolidation or bear market was in motion.
With gold, gold stocks and precious metals about to start a new bull market, it is time to get back to trading gold and gold stocks.
You can get my daily gold, silver and gold stock analysis every morning with my gold newsletter and save 50% on your membership by joining today!
Get My Gold & Gold Stock Trading Alerts And Save 50% Today! http://www.thegoldandoilguy.com/signup.php
Chris Vermeulen
Article by Investazor.com
The Euro has just past through a ruff week, after it hit a new low for this year, managed to recover and close the week with some modest gain. The single currency tried to keep itself higher in the beginning of the week after the good German economic data, but was hit pretty hard by Mario Draghi, at the press conference, right after the ECB announced that it will keep the interest rate unchanged at 0.25%.
The European Central Bank’s president said that the bank will keep a close look over the money markets to prevent other damage to the Euro and that it will fight the falling inflation, but said nothing about the means of actions. All this triggered a fall for the EURUSD to a new low for the week, and year, under 1.3550.
On the last day of the week, the balance changed once more. The weak Non-Farm Payrolls (74K vs. 196K exp.) weakened the dollar, even though the Unemployment Rate fell 0.3% to 6.7%. The overall data showed that the unemployment rate dropped even though there were not that many jobs added, resulting that the population participation was poor in calculating the rate.
Latest EURUSD Post on Fundamental: Our Outlook for the First Non-Farm Payrolls in 2014
Let us see what are the main events and publications from the Euro Area that could have an impact over this currency pair:
Euro Zone Industrial Production – Tuesday (10:00 GMT). In December it fell 1.1% from another 0.2% drop in November, even though it was expected a raise of 0.4%. Last week German Industrial Production rose 1.9% after a 1.2% drop and the French Industrial Production rose 1.3%. If Monday’s Italian Industrial Production will be published at least in line with the expectations of a 0.6% rise, then the probability for the Euro Area I. Production to gain 1.6 percent or more would be quite high, and the Euro could gain on the short run.
Euro Zone Trade Balance – Wednesday (10:00 GMT). The Euro Area Trade Balance had a pretty interesting evolution. In October met the analysts expectations, as well as in November when it got to 14.3B. In December was lower than estimates, but still rose to 14.5. This month it is expected to be released 16.7B. Even though it is not a high impact indicator, a big difference of the next publication from the expected number could trigger some volatility for the Euro.
ECB Monthly Bulletin – Thursday (09:00 GMT). In December’s Bulleting the ECB stated that it will closely keep an eye on the money markets so that the rates will not affect the Euro Area Economy. They will continue to provide liquidity and maintain their forward guidance. Mario Draghi enhaced these points after the Minimum Bid Release, at the press conference. This month’s Bulletin is expected to state the position of the ECB regarding current inflation and the lack of it.
Euro Area CPI/Core CPI – Thursday (10:00 GMT). The inflation rate of the Euro Area it is a key factor for the economic recovery. The ECB is closely following the evolution of the price stability and their main interest is to bring it close to their target. This month’s CPI is expected to be 0.8%, while the Core CPI to raise to 0.9% on y/y basis.
German Constitutional Court Ruling – Friday. The German Federal Constitutional Court is due to announce a ruling regarding the constitutionality of the ECB’s Outright Monetary Transactions policy (OMT), in Karlsruhe.
Even though we posted some important factors from the Euro Area, that could move the EURUSD currency pair, it is necessarily to look also over the USA’s economic releases. Because as we saw last week these can also have a big, or even bigger, impact on the price evolution of the pair.
Next week are programmed to be released for US economy:
Monday: Federal Budget Balance – expected to raise with 44.3B;
Tuesday: Core Retail Sales – Exp. 0.4% with a previous growth of 0.4% (Retail Sales Exp. +0.2%); Import Prices – Exp. +0.3% ; Business Inventories – Exp. 0.4%; FOMC members Fisher and Plosser are expected to talk.
Wednesday: PPI m/m – Exp. +0.5% (Core PPI m/m – Exp. +0.1%); Beige Book;
Thursday: CPI m/m – Exp. +0.3% (Core CPI m/m – Exp. +0.1%); Unemployment Claims – Exp. 327K (lower than the previous week’s 330K); TIC Long-Term Purchases – Exp. 42.3B (from 35.4B last month); Philly Fed Manufacturing Index – Exp. 8.8 (from 7.0 in December);
Friday: Building Permits – Exp. 1.01M; Industrial Production – Exp. 0.4% (from 1.1% in December); Prelim UoM Consumer Sentiment – Exp. 83.4 (up from 82.5 last month).
As you can see there are some important publications scheduled next week for the United States, if the numbers will surprise in one way or another EURUSD could get to know an increase in the volatility and fast directional changes.
Chart: EURUSD – Daily
Daily Support: 1.3400, 1.2700;
Daily Resistance: 1.3800, 1.4000;
On the daily chart the EURUSD continued to draw higher highs and higher lows inside the up channel. This is a clear signal that the uptrend is still in place, at least as long as no lower lows will be touched. On medium term the price has moved in a range limited by the 1.3800 resistance area and the 1.3400 support area.
Chart: EURUSD – H1
H1 Support: 1.3653, 1.3610, 1.3560;
H1 Resistance: 1.3675, 1.3730, 1.3800;
On the H1 (60 min.) chart we can observe that the last week’s price action hit several times the 1.3560 support but is couldn’t get through. On the upper side the price couldn’t break 1.3674 not even after the NFP publication which has disappointed. The two big rising candles from Friday could signal that bulls are in power and might get the price higher.
If we stick to the technicals I would say that a break through the Key H1 Resistance (1.3675) could trigger a rally to the next important level, 1.3730. On the other hand a drop under the Local Support (1.3653) can open the door for another drop of the Euro to 1.3610 support.
Latest EURUSD post on Technical Analysis: EURUSD & GBPUSD Overview, Volume is Picking Up after NYE
In my opinion EURUSD has a good probability to continue the sideways move noted on the daily chart, between 1.3400 and 1.3800 with no big surprises for the week ahead. In what concerns the lower time frame I believe that for the moment bulls are in power. Some good economic data from the Euro Area combined with some in line or under expectations readings from the USA could be the motive for buying the single currency at least in the first part of the week.
The post EUR/USD Forecast For January 13-17 appeared first on investazor.com.
Weekend Update
January 10, 2014
— VIX made a very deep 84.5%retracement of the rally from its Primary Wave [5] low on December 26. Preliminary evidence of a reversal may come with a breakout above its January 2 high at 14.59. Confirmation of a change in trend lies at 16.26 to 16.75.
SPX no longer making new highs.
— SPX made four probes at a new high this week, but failed to overcome daily Cycle resistance between 1843.00 and 1845.00. The Orthodox Broadening Top, otherwise known as a “Megaphone” pattern, is still the key formation at this juncture. A decline from this peak through the bottom trendline of the Broadening Top completes the formation and sets up the initial downside target.
(ZeroHedge) Late last night the music may have just skipped a major beat after Goldman released a Friday evening note that is perhaps the most bearish thing to come out of Goldman’s chief strategist David Kostin in over a year, (and who incidentally just repeated what we said most recently a week ago in “Stocks Are More Expensive Now Than At Their 2007 Peak“). To wit:
S&P 500 valuation is lofty by almost any measure, both for the aggregate market (15.9x) as well as the median stock (16.8x). We believe S&P 500 trades close to fair value and the forward
path will depend on profit growth rather than P/E expansion.
NDX closes the week at its trendline.
— NDX closed the week at the upper trendline of its Ending Diagonal formation without making a new high this week. The 4.8 year rally may now be finished. Initial confirmation of that would come with a decline beneath the trendline followed by a further decline below the Cycle Top line at 3465.74.
(ZeroHedge) …David Stockman, author The Gret Deformation, notes Wall Street’s institutionalized fiddle of GAAP earnings made P/E multiples appear far lower than they
actually are, and thereby helps perpetuate the myth that the market is “cheap.”
The Euro declines, bounces from weekly supports.
.
— The Euro declined to its weekly Intermediate-term support at 136.03, then bounced in a near-50% retracement. It may be done or nearly so with the retracement and appears ready to resume its decline this week. Final support is at 133.07 and 130.90, beneath which the Euro decline may accelerate.
(BBCNews) The President of the European Central Bank, Mario Draghi, has urged MEPs and EU governments to set up a “true banking union”.
Giving evidence to the Economic and Monetary Affairs Committee on 16 December 2013, he said he welcomed the agreement reached last week to set up common rules on a “resolution fund”. This means that each EU member state will build up a fund to help banks in trouble.
The Yen continues testing its Head & Shoulders neckline.
–The Yen has tested the Head & Shoulders neckline at 96.00 for a second week. The breakdown to a new low and the inability to rally above the neckline suggests a continuation of a Primary Wave [5] in a very strong decline that may last through mid-February.
The US Dollar closed beneath mid-Cycle resistance.
— After USD closed above its weekly mid-Cycle support/resistance at 80.98 it pulled back to its weekly Short-term support at 80.64. The Cycle Model suggests the next phase of the rally lasting through late January that may bring the USD above its inverted Head & shoulders pattern shown in the chart. Surprised Dollar bears may help make this rally a memorable one.
Here’s one dollar bear’s view…”Central banks around the world are increasingly diversifying their currency reserves away from the US Dollar. Even as overall holdings soar to a record $11.4 trillion, the US Dollar accounted for 61.44% (down from well over 65% at the peak of the crisis in 2008). With China outspokenly concerned at the US Dollar’s future status, we suspect this will only become more ‘diversified’.”
Gold bounces from a new Cup with Handle formation.
— Gold bounced from its new Cup with Handle formation at 1181.40 and appears to have closed at Short-term resistance at 1248.50. Indications are that gold may turn back down early next week. A bearish Cup with Handle formation may be triggered beneath the Lip at 1181.40, so be prepared for that probability. There are simply too many goldbugs who have called for a bottom to be a valid one. See below.
(ZeroHedge) It’s been one of the worst years for gold in a generation. A flood of outflows from gold ETFs, endless tax increases on gold imports in India, and the mirage (albeit a convincing one in the eyes of many) of a supposedly improving economy in the US have all contributed to the constant hammering gold took in 2013. Perhaps worse has been the onslaught of negative press our favorite metal has suffered. It’s felt overwhelming at times and has pushed even some die-hard goldbugs to question their beliefs… not a bad thing, by the way.
Treasuries retest the Broadening Wedge.
— USB bounced from its 32.25-year trendline, testing both the trading channel trendline (blue) and it Broadening Wedge trendline (red). The Broadening Wedge suggests a probable 20% loss beneath this resistance level. More importantly, the loss of a long term uptrend is in jeopardy, should it decline beneath 127.35.
(WSJ) Treasury bond prices rallied Friday as a disappointing employment report diluted concerns that the Federal Reserve could wind down its bond purchases at a faster pace in coming months.
The world’s largest economy added 74,000 jobs last month, the smallest gain in three years and sharply below 200,000 forecast by economists. The report stood in contrast with releases earlier this week that had showed employment gathering speed.
Crude challenges its Head & Shoulders neckline.
— Crude challenged the neckline of its Head & Shoulders formation this week. It may have more of a bounce next week, but we now have confirmation that a downtrend may already be in place. Upside movement, should it appear, may be inhibited by the weekly Short-term resistance at 95.63 and mid-cycle resistance at 96.26.
(Reuters) – A fire on a crude oil tanker on a Canadian National Railway Co train that derailed this week in New Brunswick was extinguished by Friday afternoon and CN said blazes on cars carrying liquid petroleum gas (LPG) would be put out shortly.
China approaches its Cycle Bottom.
–The Shanghai Index is approaching its Weekly Cycle Bottom support at 1972.13. this may set up a bounce next week back to the Model resistance cluster at 2140.93. Once the bounce is complete, it has a high probability of making some new lows. The duration of this decline may not be finished until late February to mid-March..
(ZeroHedge) Overnight China reported disappointing export data, missing expectations of +5%. The government explained this on the basis that they were losing their competitive edge since the Yuan has strengthened to 20 year highs but perhaps most telling is that fact that, as the FT reports, China became the world’s biggest trader in goods for the first time last year – overtaking the US for all of 2013.
The India Nifty caught between support and resistance.
— The India Nifty declined to Intermediate-term support, then bounced to Short-term resistance at 6176.74 this week. The decline may continue through mid-February. This decline may be deflationary to an extreme, since equities have become thoroughly saturated with liquidity from India’s central bank and simply cannot absorb any more. Indian investors are leveraged to the hilt. The potential for a panic decline to the weekly Cycle bottom (4756.17) is very high.
The Bank Index reaches its weekly Cycle Top.
— BKX has reached its weekly Cycle Top resistance at 71.14 this week. The 50% Fibonacci retracement of its 2007 to 2009 decline is at 69.46 and it is due for a weekly Cycle turn. The resumption of the secular bear market may be most spectacular in BKX.
(ZeroHedge) In a memo to employees today, Bank of America has made some ‘improvements’ to its recommendations for analysts and associates working hours…
*BOFA ANNOUNCES IMPROVEMENT IN WORKING CONDITIONS FOR JUNIORS
*BOFA SAYS JUNIOR BANKERS SHOULD TAKE 4 WEEKEND DAYS OFF A MONTH
(ZeroHedge) We are sure there is a joke in here somewhere but it is no laughing matter. Following a request for copies of 8 documents of correspondence between Ireland’s (former) finance minister and the nations’ largest bank executives, the Irish minstry of finance has been forced to admit that it cannot find two out of the eight. The documents, previously 100% redacted, raises questions as to whether other documents have gone ‘missing’. As RTE reports, the Department of Finance said it had carried out a widespread search for the documents and it was not clear why the original versions could not be located. Those darn leprechauns… We are sure, however, it has nothing to do with the Irish banks “picking bailout numbers out of their arses.”
(NYTimes) In his second-floor office above a hair salon in north Seattle, Ryan Kunkel is seated on a couch placing $1,000 bricks of cash — dozens of them — in a rumpled brown paper bag. When he finishes, he stashes the money in the trunk of his BMW and sets off on an adrenalized drive downtown, darting through traffic and nervously checking to see if anyone is following him.
Despite the air of criminality, there is nothing illicit in what Mr. Kunkel is doing. He co-owns five medical marijuana dispensaries, and on this day he is heading to the Washington State Department of Revenue to commit the ultimate in law-abiding acts: paying taxes. After about 25 minutes at the agency, Mr. Kunkel emerges with a receipt for $51,321.
Regards,
Tony
Anthony M. Cherniawski
The Practical Investor, LLC
P.O. Box 129, Holt, MI 48842
www.thepracticalinvestor.com
Office: (517) 699.1554
Fax: (517) 699.1558
Disclaimer: Nothing in this email should be construed as a personal recommendation to buy, hold or sell short any security. The Practical Investor, LLC (TPI) may provide a status report of certain indexes or their proxies using a proprietary model. At no time shall a reader be justified in inferring that personal investment advice is intended. Investing carries certain risks of losses and leveraged products and futures may be especially volatile. Information provided by TPI is expressed in good faith, but is not guaranteed. A perfect market service does not exist. Long-term success in the market demands recognition that error and uncertainty are a part of any effort to assess the probable outcome of any given investment. Please consult your financial advisor to explain all risks before making any investment decision. It is not possible to invest in any index.
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Article by Investazor.com
Scalping in trending market or in range?
In old technical analysis theories, like Dow Theory, there are recognized only the up trends and the down trends and the sideways moves were considered just lines, or a smaller move in a bigger trend. In the new theories there are considered to be 3 types of trends: Uptrend and Down Trend (they make the trending market) and the Sideways Trend (range, sideways move, etc).
For a scalper to find the answer for this question it is better to look in himself and in his trading system. As long as the market moves the scalper makes money on the very short term run. He depends on his emotions. If a trader is set to trade in trending markets then he will feel uncomfortable in a range and he will lose money, it goes also the other way around.
It is very important to understand in what kind of trend the price is and trade accordingly. It is pretty hard to find a system that will have the same probability of success in both trending market and range. So a scalper could have even two systems, but he should always know when to change between them.
Do Brokers hate Scalpers?
This is a tricky question because you will find a lot of answers on the internet like:
– Brokers hate scalpers because this kind of trading present low risk and they usually make money, so it is bad for business.
– Brokers do not hate scalpers because they do a lot of trades and pay the spread.
Actually the truth is somewhere in the middle. First of all a scalper should closely look for their broker (you can review our article on how to choose a correct broker). If the brokerage house is trustworthy then it will not have any problem with the clients that makes money. If a trader is unlucky and trade with a scammer (unfortunately there are a lot of these nowadays especially in the derivatives markets and CFDs) then he might have some problems if he makes money from scalping, because the broker could mess with the quotations or the data feed or even the trading software.
One real problem that could appear from scalper for a broker is actually overloading the servers. Because scalpers are making tens of trades per hour and hundreds per day it might occur an overloading of the server. If a broker knows that he has such a problem in his infrastructure then it might put the scalper on a blacklist and sometimes mess with his style of trading.
If you would like to scalp be sure that you will find a trustworthy broker that also has good servers to sustain your type of trading.
Getting rich or enriching the Broker?
This is a pretty good question. Nowadays the beauty of trading is also made by the systems that are fast and allows a trader to scalp, but mostly is made by the low costs. The spreads have dropped hard from several years ago. A trader could have now spreads under 1 pip (for the most traded pairs like EURUSD, GBPUSD, USDJPY).
For a scalper to succeed with his system he would need small spreads and commissions, this way the market can easily cover his costs and assure him a smooth way to profits. Even if he pays a small spread and/or small commissions because he makes a lot of trades he will pay a lot to the broker. In this case it is a win/win situation.
A scalper should thank the broker because he has small spreads and can apply his system while a broker should thank a scalper because he is trading more than other and pays him the fees.
Manual or Automatic scalping?
This question triggers other questions like: Do you know programming or know a friend that knows programming? Automatic scalping or signaling a trade is a very good tool that a scalper could use.
I am not quite a fan of automatic trading, but I accept the fact that it would be easier to program a system which gives you signals or administrates your trading positions. It all depends on your capacity to keep a good focus and respect your scalping system in time. Automatic trading could be a solution if you have a good system and the possibility to program it.
If you did that or want to do it you should know that it isn’t enough to program it and leave it to work. You will always need to tweak and fine tune it since the market is in a continuous change. A human will observe the changes and adjust his trading system while a robot cannot do this all by itself and needs interventions.
Conclusions
Let’s wrap up what it is written in this article. Scalping is just another trading system with some specific characteristics. It is unique because of the fact that scalpers are trading on very short time intervals and are making hundreds of trades per day. This way of trading can be done by novice and advanced traders as long as they understand the risk that it is implied while scalping.
For a scalper to survive and make money with his way of trading he will have to find a good trading system which implies not only a trading strategy (based on fundamental and/or technical analysis) but also on money management and emotions management (this way he will get rid of the emotional pressures). If he will manage to check this on his list he will have a high probability in becoming consistent in his winnings.
As for the question whether a scalper can make money in both trending and sideways markets, the answer is clearly yes, but he will just have to correctly determine in which kind of market is he in. Continuing with the position of the Broker in what concerns the scalper, you saw that there are some factors which influence whether a broker is with or against a scalper even though, in normal conditions they should find themselves in a win/win situation.
As for the last questions, I believe that it is pretty subjective. As I said before, I would prefer to just push myself the buttons to trade but I agree with the fact that Expert Advisors could ease the work of a trader.
The post Top 7 Questions a Scalper Should Know The Answer, Part II appeared first on investazor.com.
The global media is abuzz with the headline technology permeating out of CES, formerly the Consumer Electronics Show, in Las Vegas this week.
And two buzz phrases are dominating everything from Bloomberg News to The Age.
‘Wearable Tech’ and ‘The Internet of Things’
Firstly, these two terms are horrible. Obviously a ‘marketing specialist’ has been paid big bucks somewhere to look at all these new technologies and say… ‘Hmmm looks like the internet is in a lot of things these days. I know let’s call it all ‘The Internet of Things’.’
It makes me shudder every time I hear the phrase.
Of course the trend itself, whatever you want to call it, is real. But it goes deeper than just ‘things’ being connected to the internet.
Not all things will need an internet connection. Some will operate within their own separate networks, isolated from the internet, and will ‘talk’ to other devices in the same proximity that share the necessary hardware.
So rather than the internet of things, this entire trend is better summarised as ‘immersive technology‘.
The immersive technology trend is all about communication between devices. It’s Machine to Machine communication (M2M). Devices talking to other devices automatically. When this happens it all comes together as relevant, useful information for us.
And this world of immersive technology has been in the making for years. In fact it goes as far back as 1988 when one company pioneered M2M, inadvertently launching world defining technology. This company is now also a leader in the immersive technology trend with the processors and sensors needed to reshape how we live.
The world is at the early stages of being able to appreciate the significant change immersive technology is going to have on everything.
You will look back ten years from now and wonder what life was like before immersive technology swept through the world. And at this point you’ll likely also realise it was a missed opportunity to make tremendous gains by investing in the companies that have driven this technology.
But that’s the future, and we sit here now in the present. There is tremendous opportunity available right now to take action on this world defining trend.
Let me go into a bit more detail to explain what I mean.
I use CES as an example because right now every second report from CES is about wearable tech. But why this is even a discussion point is the deeper reason. Look at it this way…
It’s human nature to want to create an environment that makes life better, easier and more enjoyable. The pursuit of a better living standard is what drives many people. That’s why we work hard, save, invest and try to build wealth. It’s for a reason, a purpose. It’s to make life better.
In this quest for a more fulfilling life we eventually come to rely on technology to make that happen. Now most people don’t go out and invent and create technology to do it themselves. They rely on others with the capabilities and resource to innovate and invent.
And when these new technologies come to market we get excited. It’s true. We all love new technologies that we can use to make our life better, more fun and more enjoyable. I’ve never heard anyone say, ‘Oh that telephone ruined my life,’ or, ‘Without this PC I’d be so much better at handwriting,’ or, ‘This microwave makes heating up my lasagne so inconvenient.’
Sometimes it takes a while for people to get excited, but eventually these new technologies become a way of life. Soon enough you struggle to remember what life was even like without them.
At heart we’re all technophiles; some people just don’t realise it yet.
Technology wriggles its way into your life whether you like it or not. This happened with the telephone, car, typewriter, personal computer, mobile phone and is now happening with immersive technologies.
Every one of these technologies was a solution to a problem. A solution to make life easier in some form or another.
This is the same trajectory immersive technology is taking. But sometimes it’s hard to see the real story through all the noise.
Right now there are at least three dozen new flashy smartwatches and lifestyle trackers to put on our wrists. The wrist seems to be the hot spot for tech right now. But in all reality this is just a way-point en route to the bigger picture. The real immersive technology trend is so huge it’s going to change your concept of what technology is capable of.
Smartwatches will come and go, as will lifestyle and fitness trackers. When you really look past the hype, the technology is brilliant but the form and execution, for now, isn’t all that life changing.
Where I’m heading with this is the sensors and processors located within current examples of wearable tech will impact your life more than the device itself.
And it’s going to take form in the shape of technology immersed not just in your environment but in your biological structure.
That’s right, I’m taking about immersive technology in the sense your biology, your physical world and your digital world immerse as one. Call it implanted technology if you will. This technology won’t exist on your head or your wrist. It will exist in your body, connected to your biology.
You won’t be wearing a watch that you can text with and you won’t be counting how many steps you take in a day. No, you’ll have tiny biosensors and processors that interact with a visual interface to let you know real-time how you’re really going in every sense of the word.
Through immense amounts of personal data you will have the hardware and software tools at your disposal to stay healthy and happy.
The thing is, you’ll never even notice these sensors are even working away. That’s what good technology does…it just happens.
The way this all works is actually pretty straight forward.
You have sensors and processors connected to you. These monitor everything from the air you breathe, to your circadian rhythm, temperature and heart rate. This data transmits to a miniature computer where it’s processed. And this useful information is instantaneously delivered to you to help you make better life choices.
So if you’re feeling a bit sad, tell-tale signs will indicate this. Subsequently your personal digital assistant will appear next to you as a holograph and chat with you for 15 minutes about happy things to turn your mood around.
This might sound ridiculous to many of you. I understand that. But this is the inevitable progression of technology. It’s the sum of an array of available and prototype technologies now coming together to create a more immersive world.
Consider this. At CES already in the last week Intel has put an entire PC into a case the size of an SD card. The MYO armband has sensors in it that detect the electrical impulses emanating from your muscles. Innovega are demonstrating working contact-lens-enabled, fully functional smartglasses. And Scanadu has finalised their hardware and are ready to release their tricorder in March.
Right now all these technologies are in separate pieces of hardware. It’s not terribly efficient, nor does it make life all that much easier.
But advance the technology a couple more years, reduce the size, increase the processing power and the capabilities…and you inevitably find this technology in your body, not on your body.
There will be kickback. People will initially struggle with the concept of having technology as a part of their biological self. But we will look back in ten years’ time and wonder how we ever managed without it all.
But as that point comes closer you can actually take steps to join this huge immersive technology trend now. There are some companies that are at the cutting edge of the immersive technology trend. They’re the ones that make the sensors and processors that will usher in this new era.
These companies are crucial to a world of immersive technology, and they stand at the very early stages of a worldwide shift in how we all live and exist in the world.
Call me a dreamer if you will but this is happening. It’s happening now. Don’t get caught up in what the mass media regurgitates. It’s already a past-trend when you hear it on the news. Look deeper, look further, have a vision about what it all really means.
That’s what we do at Revolutionary Tech Investor. We look beyond and conceptualise the great ideas that will reshape our world. And we pick the companies that will take us there and make huge gains along the way.
Regards,
Sam Volkering +
Technology Analyst
Publisher’s Note: Over the past few weeks we’ve let you know about plans to launch a daily technology eletter. As we recently announced, we’re going ahead with that plan. Today I can announce the eletter will be called Tech Insider. Each day tech guru Sam Volkering will give you his insights on the latest technologies hitting the market and the innovations he sees happening in the future. It will be like no other free eletter service we’ve ever produced. We’re just putting the final touches to the behind-the-scenes infrastructure. In the next few weeks we’ll give you details on how to easily subscribe to Sam’s new free daily service.
By CentralBankNews.info
Following is an updated version of the 2014 calendar for meetings by central bank committees that decide monetary policy.
The table includes scheduled meetings for more than 25 of the world’s central banks. In the event that meetings by monetary policy committees take place over several days, the date listed below is for the final day when decisions are normally announced.
Work is underway to expand the number of central banks covered. You may replicate the table in part or in full only if you link to this page. The calendar can always be accessed at this link.
The calendar is updated regularly to reflect the latest information as some central banks only release tentative schedules at the beginning of the year and then finalize their calendar as the meeting nears.
Guest Article By dontlettheforexdriveyouupthewa
As soon as you enter into the forex markets you will probably be bombarded with information about indicators all claiming to do lots of wonderful things to help a trader become profitable.
I understand the first response for many traders is to try and find the easiest way to analyse the forex charts but do these indicators really help or are they just a distraction?
Placing indicators on our charts may help some traders and I have no problem at all with traders that use indicators as long as they do actually help but if you are honest with yourself, how many times has an indicator got you into a bad trade or stopped you entering a valid trade?
Indicators on the surface are attractive to many new traders because there seems to be an indicator for every specific situation, some indicate the current trend or momentum, some tell us when price is over bought or oversold, etc…. and so they seem to provide additional guidance, to add strength to a traders toolbox.
It’s very common to over complicate forex trading and trying to get too smart by adding indicators to analyse the markets is what can cause confusion and information overload. The lack of rules imposed on the forex means it is hard to know what we should and what we shouldn’t use to help us trade.
I myself started off trading with 2 exponential moving averages on my charts, thinking they would help me analyse the forex charts. The problem is you become quite reliant and attached to the indicators after a while and removing them is a hard decision. Thankfully, I did and haven’t looked back since.
I personally feel indicators are mainly used to mask the fact that some traders are unable to read the charts properly. Why use an indicator to determine what is exactly going on in the markets or when to enter or exit a trade, it just seems crazy!!
There are two main types of indicators, the first are known as “lagging” indicators, like for example moving averages. These present signals after the market has turned, meaning the market has already made the big move before you get the signal to enter the trade. So you basically miss the boat. So they are useful for when the markets are trending strongly but terrible when the market is range bound.
The other type are “leading” indicators, like for example RSI. They try to predict when price may turn around and so are designed to help traders to pick tops and bottoms. The problem being they can be very dangerous and misleading because they produce lots of false signals before the markets actually turns. So in a strongly trending market they will tend to show over bought or oversold signals constantly. The leading indicators are more designed for range trading.
So what we have are two types of indicators which each work for differing market conditions. The next step many traders take is to then mix the two different types of indicators up, thinking it will help them to trade both trending markets and ranging markets. Sounds pretty complicated already, right?
So, here’s an example of a chart filled with indicators and one below it with no indicators. Which looks clearer and easier to analyse the current market to you?
Therefore, indicators do have some merits but also have some pretty big drawbacks. I guess they are so popular because they seem to take the hard decision making away from the traders that are maybe not confident enough to trust their own analysis of the market.
The use of indicators can also instill a false safety net and allow traders to deflect blame if a trade fails. Granted there is no trading style that will produce 100% win rates but atleast with price action and clean charts we the traders are making the decisions to enter and exit trades and not the indicators.
So what’s the alternative, well I really believe using price action and simple horizontal support and resistance levels is all you really need. Learning how to read the charts using price action is not easy and takes a lot of time and studying to become competent.
If you do decide to make the leap and study how to learn how to become fluent in reading price action, indicators just fall to the side-lines and you’ll begin to see how indicators can actually be a distraction from what is really going on in the markets.
Keeping the charts free from indicators, produces charts that are clean, simple and much nicer to look at, plus they remove all the information that is just not needed. “Keep it simple” I say.
Why not try it yourself, strip back your charts to the bare basics. I know it will feel very strange and almost like you don’t know where to look for trades to begin with but in time the art of reading price action does make sense.
You’ll begin to see that the market copies what it has done in the past and price just moves from one level to the next.
The harsh reality is there is no quick fix to learning how to trade, adding indicators will never solve the old problem of trying to making money in the Forex. They may well help new traders at the beginning of their trading careers but in the long term I’ve found them not to be an essential tool required to trade the forex consistently.
I hope after reading this article it may encourage you to consider removing the indicators from your charts and try just using simple price action with support and resistance levels to trade from.
About the Author
If this article gets you wondering what price action is all about, check out the many free articles and videos and learn more about trading with price action at dontlettheforexdriveyouupthewall.com.
