Month: March 2014

By MoneyMorning.com.au

It’s been a busy morning, at the World War D conference. By 10am, Marc Faber had wrapped with his ideas and we were onto the next presenter.

Jim Rickards, author of Currency Wars, entered the stage to an excited crowd.

Rickards is always great to watch. He presented last year to a select group of Port Phillip Publishing readers. He is always generous sharing his experience and ideas with investors.

To kick start his 40 minute slot, he started talking about when he worked with the US government to create financial disaster scenarios in 2009. Currency Wars is dedicated to his ‘financial war games’.

As he explained, at the time, the government had no idea just how serious the financial threats were to the US economy. 

You see, government officials understood what could happen with things like guns and bombs. But with today’s integrated market, the destruction caused by financial warfare is so much bigger than they understand.
It’s not just a metaphor according to Rickards. It’s a very real threat to big economies. However right now, America is most at risk.

One thing, Rickards said was that because of the financial warfare risks, it’s vital for fundamental investors not to ignore global macro events.

More than ever, he said, these events can affect your portfolio.

He used the current problems with Ukraine and Russia as an example.

Rickards suggested that America sending troops into Ukraine isn’t an option. And that’s not because Russia has big bombs, because the US has big bombs too. Simply put, Russia could crush the US’s financial markets. And while any financial warfare would hurt Russia, it would hurt America’s economy much more.

That’s what Rickards meant by financial warfare…

How would they do it?

If America really wanted to hurt Russia, they could start with seizing Vladimir Putin’s American assets. The next step could be to push Russia out of the dollar standard – like America did with Iran a few years ago.

But the problem is, the destruction from Russia could be so much worse.

The first step, Rickards estimates, could be something as simple as refusing to pay debt. If Russia refused to pay dollar-denominated debt, that would drive up interest rates in the US. This would have major flow through effects in the US economy.

Already the housing market in the US is precarious. Large interest rate swings could cause it to collapse. And the housing stock, dependant on easy and cheap credit, would topple.

But Rickards says it could be much more sinister than that.

This is a day and age of technology warfare. And the financial warfare wouldn’t be as simple as just not paying a few debts.

Russia could bring down the financial markets in the US with a bunch of hackers. Rickards says that although the US could also attack the Russian market with hackers, who do you think has more to lose?

The Russian market shutting down would hurt some investors…however the US market closing down would be catastrophic for the American economy.

Another topic Rickards touched on was the ‘liquidity trap’.

He says that central bankers are printing money as much as they can to keep the system afloat. The problem is, while the money supply may be increasing, the velocity of money is falling.

Why is the velocity of money relevant? Well, as Rickards explained to the raptured audience, people aren’t spending their money. He said they are more interested in staying at home and keeping what few dollars they have.

In order to get the velocity of money going, the central bankers have to work out how to get people to leave their house to spend it. As yet, US Federal Reserve chairman Janet Yellen or her predecessor hasn’t solved this problem.

A bigger concern to investors though, Rickards reckons is the deflation and inflation tug of war.

He knows that the central bankers have only planned for inflation to win. You know why?

Because deflation isn’t good for governments.

Rickards explained it this way:

Imagine prices go down 10%, but your wage stays the same. Even though you’re not making any more money, your purchasing power actually increases.

‘The problem is, the government can’t tax purchases anymore. So they don’t benefit,’ said Rickards.

However, Rickards added that the other problem with deflation is that it makes the debts too large to pay back. When this happens, people would rather default on their debts. With a debt laden banking system, the central bankers know this simply isn’t an option.

Which means Yellen, who is hell bent on inflation driving policies will keep printing money. As Rickards said, ‘It’s the wrong medicine to begin with, but she will administer it until the patient dies.’

Rickards finished up with possible ideas on what a return to sound money could look like. But his vital message for the audience was this: Pay attention to the global macro events. They will affect your portfolio.

And watch out for those nasty central bankers.

Shae Smith+
Contributing Editor, Money Morning

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By MoneyMorning.com.au

By MoneyMorning.com.au

In the gilded ballroom of Hyatt’s Savoy ballroom, World War D‘s opening speaker Dr Mark Faber delivered a blunt message: the old world order is over.

‘The US reached a peak in prosperity and influence in the world in the 1950s or 1960s,’ said Faber. But since the 70s the superpower has been locked into a cycle of bubbles, busts and growing debt.

Debt, and the way it has manipulated the global economy, was the main theme of Faber’s address.

‘There are some people who claim to be economists who will tell you debts do not matter,’ Faber told the packed ballroom.

But the real story is different….

Faber explained the flaw at the heart of expansionary monetary policy (such as QE). ‘When you drop dollar bills into the economy…it won’t lift all prices and assets equally at the same time,’ he said. In the 60s and 70s, extra money flowing through the economy inflated wages; in the early 2000s, money printing inflated commodities. But, Faber points out, this price and asset growth is never equal.

In other words, money printing creates more bubbles. Some assets go up, they overshoot, collapse and cause significant damage which necessitates, in the view of the US Federal Reserve, more money printing. It is a vicious cycle we’ve seen since the 70s: each time there was an economic problem, the Fed printed money and created more distortions.

Bernanke’s tenure saw this trend continue, and when it came to assessing the former Fed chairman, Faber didn’t mince his words.

 ’He’s been a disaster,‘ Faber said drily. Faber pointed out that not only did Bernanke not notice the subprime disaster, he actually helped create it. ‘Under his tenure at the Federal Reserve and under his intellectual influence when working for Mr Greenspan they created the gigantic housing bubble,‘ he said.

At the heart of this expansion in debt, and cycle of bubbles and busts is the reliance of the US economy on consumption. For the last century, policy makers have encouraged consumption on all levels of society including government, and discouraged savings.

But according to Faber, consumption doesn’t create a strong economy. ‘Wealth doesn’t come from consumerism, it comes from capital spending,‘ he said.

And the problem for the US economy is that while debt has continued to rise, capital investment hasn’t. In fact, it’s been falling sharply for a long time.

‘If we have growing debts, there’s a difference in quality of those debts,‘ he said.  Japan, South Korea and Taiwan used their debts to invest in factories, plants…investments that generated wealth. According to Faber however, the US has just acquired debt to fuel consumption. ‘Where’s the future income?‘ he asked.

Faber used this as an opportunity to strike a note of caution for Australia, warning the room that one day Australia’s indebted housing sector won’t be able to borrow much more. It will then enter a period of contraction or very slow growth.

That was his warning to Australia: then came the opportunity.

‘We live in a new word. We live in a world where the balance of power has shifted to emerging countries,’ said Faber.

He was of course, talking about China. While China’s growth story is well known, Faber gave the audience an important geopolitical sub story.

China’s massive growth triggered massive commodity export booms in emerging economies. China’s real success was exporting the products it produced back to emerging economies. This has created a significant shift in the global economy: exports from China to emerging countries are higher than exports to the US or Europe.

‘This is the new world, where the old world is largely bypassed,’ said Faber.  While most of the media debates whether the US will grow, Faber argues it will have no impact on the world, as China has a much greater influence now than the US.

Faber is no bull on China however, and warned he would be very careful about investing there. Faber sees conditions at the present time as much worse than many people realise. There are also geopolitical concerns that are often left unexamined.

Take oil. Oil consumption in China – most of which comes from the Middle East – will rise. ‘The Middle East in my opinion will go up in flames at some point, that will be an unpleasant event,‘ predicted Faber in his typically apocalyptic but still understated way.

For Australia, he sees opportunities in the huge numbers of Chinese tourists travelling abroad, but he believes Australia has made a huge mistake by tolerating US bases on its continent. ‘China will not sit by and let themselves be bossed around by the US,‘ he said.

His final message reiterated the failure of the US Federal Reserve. Corporate profits had been boosted by artificially low interest rates; wealth inequality is on the rise; and to compound it all, he says the Fed won’t raise interest rates anytime soon.

Punctuated by flashes of humour and dire warnings, it was a sober message that the attentive audience lapped up.

Callum Denness
Roving Reporter for Money Morning Australia at World War D

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By MoneyMorning.com.au

USDCAD remains in downtrend from 1.1278, the rise from 1.1000 would possibly be consolidation of the downtrend. Key resistance is at 1.1100, as long as this level holds, the downtrend could be expected to resume, and next target would be at 1.0950 area. On the upside, a break above 1.1100 resistance will indicate that the downtrend from 1.1278 had completed at 1.1000 already, then the following upward movement could bring price to 1.1500 zone.

Provided by ForexCycle.com

By CentralBankNews.info
    Seventeen central banks took policy decisions last week, with Hungary wrapping up its easing cycle, Zambia raising its rate, and the Philippines and Nigeria raising reserve requirements, underlining the shift toward tightening in global monetary policy.
    The transition from five years of ultra-easy global monetary policy is spearheaded by the U.S. Federal Reserve which began unwinding its asset purchases in January. This has helped trigger 11 rate rises so far this year, including those by central banks in Turkey, South Africa, India, Ghana and Zambia in an effort to protect their currencies and retain foreign investment
      While there is still a lingering debate over what Fed Chair Janet Yellen really meant to signal on March 19, other central banks and financial markets have taken her words – and those of other members of the Federal Open Market Committee – to heart and expect the Fed to raise rates earlier than expected.
    In their statements last week the Bank of Israel noted that “the interest rate path expected by FOMC members increased compared with the previous meeting,” the South African Reserve Bank (SARB) said “financial markets now believe that the first interest rate increases may occur earlier in 2015 than previously expected,” and the Central Bank of Trinidad and Tobago said the Fed gave guidance that “policy interest rates could increase even faster than initially anticipated.”

    The shift in the direction of global capital away from emerging and frontier markets to advanced economies has gone through several bouts of volatility since May last year and central banks are eager to avoid fanning the flames and cause any sudden shift in risk sentiment.
    But as William Dudley, president of the New York Fed, said last week, emerging markets are much better positioned than in the past “to weather those times in the cycle when the external environment turns from welcoming to wary” due to a raft of reforms and changes, including more coherent monetary policy frameworks, the absence of fixed exchange rates, larger foreign exchange reserves, moderate debt and stronger banking systems.
    South Africa, Nigeria and the Philippines’ central banks illustrate Dudley’s point. Most emerging market central banks are keenly aware of the challenges they are facing from the well-publicized shift in Fed policy and are responding in a disciplined and predictable manner.
    Last week SARB said it remains in a tightening cycle but added that this doesn’t mean rates have to be changed at every meeting. SARB maintained its rate after raising it by 50 basis points in January in response to capital outflows and a plunge in the rand.
    The recent improvement in global sentiment towards emerging markets had boosted the rand and thus improved the inflationary outlook, giving the central bank breathing space as it seeks to solve the dilemma of sluggish growth and inflationary pressures.
    Like SARB, the Central Bank of Nigeria (CBN) also maintained its policy rate, but tightened policy by raising the cash reserve requirement on private sector deposits – in January it had raised the CRR on public sector deposits – saying the need to safeguard stability “required firm and bold measures.”
    “Thus, prudent monetary stance would also facilitate better reserve and exchange rate management in an environment where Fed tapering increases pressure on emerging economies’ financial markets,” CBN said, showing a steady hand amid a challenging international and domestic environment.
    Bangko Sentral ng Pilipinas (BSP) also kept its policy rate steady but raised the reserve requirement to curb liquidity in a move that was signaled by the central bank’s governor last week after he said an early and gradual adjustment of monetary policy rather than discreet movements would be less disruptive to businesses.
    The Philippine central bank added that it would “consider further adjustments in its policy tools to safeguard price and financial stability” and “buoyant domestic growth prospects allow some scope for a measured adjustment in the BSP’s policy instruments amid the ongoing normalization of monetary policy overseas.”
    The annexation of Crimea by Russia from Ukraine added a new dimension to the global risk spectrum, but the National Bank of Georgia responded in a calm and measured manner.
    The central bank of Georgia – on the eastern border of the Black Sea in the Caucasus region – said it still believed that monetary stimulus should be withdrawn but put off any rate rise, citing the potential threat from geopolitical factors and uncertainty that could undermine investors’ mood, demand for its exports and remittances from workers abroad.
   
    Through the first 13 weeks of this year, rates have been raised 11 times, or 9 percent of this year’s 125 policy decisions by the 90 central banks followed by Central Bank News, down from 10 percent at the end of February.
    But the Global Monetary Policy Rate (GMPR) – the average policy rate – rose to 5.56 percent this week from 5.53 percent at the end of January, helped by Zambia’s 175 basis-point rate rise.
    Rates have been cut 15 times so far this year, or 12 percent of this year’s policy decisions, down from 14 percent at the end of February, as central banks still seek to shore up growth while inflationary pressures worldwide are kept at bay from sluggish global demand.
     

• Israel holds rate, changes depend on CPI, growth, shekel
• Hungary cuts rate for 20th time but signals pause
• Armenia holds rate, inflation seen falling further
• Nigeria holds rate, raises CRR to 15%, bold moves needed
• Morocco maintains rate, cuts reserve ratio by 200 bps
• Georgia holds rate on geopolitical risk, but sees tightening
• Rwanda holds rate to sustain credit to private sector
• Philippines holds rate, raises RR, to mull further tightening
• Norway holds rate, repeats on hold until summer 2015
• Taiwan holds rate on moderate growth, mild CPI outlook
• South Africa holds rate, but remains in tightening cycle
• Czech holds rate, confirms will intervene to cap FX rate
• Romania maintains rate after 6 cuts on subdued inflation
• Zambia raises rate 175 bps to 12% in 2nd hike in row
• Trinidad holds rate, sees rising inflationary pressure

GOLD: Outlook for GOLD continues to point lower closing lower for a second week in a row the past week. Having broken the 1,300.00 level, the risk is for more decline to occur towards the 1,280.00 level followed by the 1,250.00 level. Further down, support comes in at the 1,200.00 level. Its weekly RSI bearish and pointing lower supporting this view. On the upside, immediate resistance resides at the 1,300.00 level where a violation if seen will aim at the 1,317 level. A breach will aim at the 1,342.30 level followed by the 1,367.40 level. Further out, resistance resides at the 1,388.95 level, its Mat 17 2014 high followed by the 1,400.00 level, its psycho level. All in all, GOLD remains biased to the downside in the medium term but faces recovery risks.

Article by www.fxtechstrategy.com

Learning the tricks of foreign exchange can be a lengthy and complicated process. Therefore, a lot of traders have been using forex training tools. Choosing the correct forex training program allows you to participate in foreign exchange markets which were previously just accessible to expert traders. Here are some things you should consider while choosing a forex training program.

Choosing the Correct Forex Training Program

A good forex education program needs to introduce a novice trader to almost every aspect of the foreign exchange market. Ideally, a training program should have different levels, from beginner to advanced classes. It should also cover fundamental analysis, technical analysis, trader’s psychology, risk management and other aspects of foreign exchange trading.

These days, you can choose from free and paid forex training programs. However, free programs take you on a very long learning curve. Therefore, you need to compare features of different programs to weigh all the pros and cons before choosing a specific forex education program. Here is an overview of some key aspects.

Different Levels According to Needs

A forex education program should always have many different levels to accommodate various needs and skills. In simple terms, the program should have different levels, from beginner to intermediate and advanced.

Higher levels should be accompanied by a comprehensive level of learning. This way, a trader who already had enough exposure to foreign exchange trading will be able to skip beginner classes, and jump on to intermediate or advanced level.

Beginner foreign exchange trading classes should cover basic concepts regarding the foreign exchange market. Intermediate classes should introduce many different concepts and dig deeper into complexities of foreign exchange trading.

On the other hand, advanced classes should go further and cover many different concepts. The purpose of these levels should be to provide a student with vast knowledge base to move from easier to difficult trading concepts. This allows a student to prepare himself for what comes next after the program.

 Technical Analysis

With technical analysis, the trader can make certain decisions based on chart patterns and price movements. Similarly, fundamental analysis can help the student appraise volatile economic conditions affecting the market. Risk and money management are also very important since the foreign exchange market can fluctuate at unexpected times. This may cause financial losses.

A foreign exchange program should always introduce concepts which make you aware of your trading psychology. This will help you avoid irrational decisions. When you have proper knowledge of such concepts, you are able to apply them correctly in real life trading situations. It can increase your chances of success.

 Several Features

These days, you can choose from many different forex training programs. Some of the most common ones include in-class training with fellow students, one-on-one sessions with instructors and online live training. A lot of people have started choosing online training programs because of more convenience, affordable prices and several features.

Price

Before you choose an appropriate training program, you should also consider price. The training program should not break your bank. You need to choose something which is affordable, and offers a higher return on investment.

Learning forex trading is an ongoing process. Due to this, both seasoned and new traders are encouraged to learn more and keep studying. A trader needs to stay up to date with new developments in the forex world. An appropriate training program can offer great help.

About the Author

Miles Wiseman is a blogger and a writer who takes particular interest in finance and insurance. He writes about all the interesting things related to forex such as exchange rates, currency conversion, etc.

USDCHF: Maintains Recovery Tone But With Caution.

USDCHF: While USDCHF may have closed higher for a second week in a row, it ended the week with a rejection candle on the daily chart suggesting price exhaustion has set in. Except it recaptures the 0.8898 level, it faces the risk of a corrective weakness in the new week. In such a case, support lies at the 0.8786 level where a break will set the stage for a run at the 0.8698 level. If it violates this level it will resume its medium term downtrend presently on hold. Further down, support comes in at the 0.8650 level and then the 0.8600 level. On the other hand, the pair will have to break and hold above the 0.8786 level to create scope for additional strength towards the 0.8829 level where a break will pave the way for a run at the 0.8900 level. Above here if seen will aim at the 0.8950 level and subsequently the 0.9000 level. All in all, the pair remains biased to the downside in the medium term though recovering.

Article by www.fxtechstrategy.com

Article By RoboForex.com

Weekly Analysis, March 31^st – April 4^th 2014

GBP USD, “Great Britain Pound vs US Dollar”

GBPUSD, Time Frame Weekly. Tenkan-Sen and Kijun-Sen are still influenced by “Golden Cross” (1). Ichimoku Cloud is going up (2), Chinkou Lagging Span is above the chart, and the price is above the lines. Short‑term forecast: we can expect support from Tenkan-Sen, and growth of the price towards M Senkou Span B and M Kumo’s upper border.

GBP USD, Time Frame Daily. Tenkan-Sen and Kijun-Sen intersected above Kumo Cloud and formed “Dead Cross”. Ichimoku Cloud is going up (2), Chinkou Lagging Span is on the chart, and the price is on Kijun-Sen. Short‑term forecast: we can expect support from Senkou Span A – W Tenkan-Sen, and growth of the price.

XAU USD, “Gold vs US Dollar”

XAU USD, Time Frame Weekly. Tenkan-Sen and Kijun-Sen formed “Golden Cross” (1) below Kumo Cloud; Senkou Span B is directed downwards. Ichimoku Cloud is going down (2), Chinkou Lagging Span is on the chart, and the price is between Tenkan-Sen and Kijun-Sen. Short-term forecast: we can expect support from Kijun-Sen and resistance from Senkou Span A.

XAUUSD, Time Frame Daily. Tenkan-Sen and Kijun-Sen formed “Dead Cross” (1) above Kumo Cloud; Tenkan-Sen, Kijun-Sen, and Senkou Span A are directed downwards. Ichimoku Cloud is going up (2), Chinkou Lagging Span crossed white candlestick and right now is below the chart, and the price is near Kumo’s upper border. Short‑term forecast: we can expect support from Senkou Span A, resistance from Tenkan-Sen, and attempts of the price to stay inside Kumo.

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.

Weekend Update | www.thepracticalinvestor.com

March 28, 2014

— VIX made a new Master Cycle low on Wednesday, but still managed to close at weekly Long-term support at 14.50.  This is the prelude to a probable run to the top of the chart that may occur over the next several weeks.  Despite the constant late-day VIX selling for the past month, it has managed to maintain a higher base since the beginning of the year..

SPX eased down to the Wedge trendline.

SPX has been stair-stepping down to close within 10 points of its year-end value at 1848.36.  It is barely hanging on to a gain for the first quarter, while the Dow is down 265 points from its year-end.  There is a good probability that SPX may finally come off the ledge that is the upper trendline of the Bearish Wedge.  In the process it may also break two important Cyclical supports at 1840.00 and 1829.00.

(Bloomberg)  U.S. stocks climbed after a two-day slide, as consumer shares rebounded amid data showing household purchases rose the most in three months. Biotechnology shares extended losses, weighing on the Nasdaq Composite Index.

The Standard & Poor’s 500 Index (SPX) added 0.5 percent to 1,857.62 at 4 p.m. in New York, trimming its loss for the week to 0.5 percent. The Dow Jones Industrial Average rose 58.83 points, or 0.4 percent, to 16,323.06 today. The Nasdaq Composite increased 0.1 percent to 4,155.759, completing the week with a 2.8 percent drop.

NDX declines to its Ending Diagonal trendline.

NDX declined beneath three major weekly supports and closed at its Ending Diagonal trendline.  It is already at a loss for the first quarter and a further decline may put last year’s entire gain of 35.9% in jeopardy.  The Cycle Top is no longer support, so there is a good probability of a fast decline once the trendline is broken.  This support must be broken to begin the change in trend.

(ZeroHedge)  Yesterday’s late bounce and this morning’s opening follow-through were heralded by many talking-heads this morning as the end of the sell-off and a great buying opportunity. Well, on the bright side, those stocks are now at least 3% cheaper having plunged from the opening highs – even as the broader indices hold in. The Momos, also considered to have seen the worst, are re-collapsing…

The Nasdaq and Russell are now red YTD once again

The Euro consolidates lower.

The Euro attempted to rally above its Ending Diagonal but failed, ending with a small loss.  It still must decline beneath its Cyclical supports to gain downside momentum.  The lower trendline of the Ending Diagonal is important, since a decline beneath it may imply a further decline to the July low.

(CNBC) – The euro fell to three-week low against the dollar on Friday, with investors wary given strong rhetoric from European Central Bank officials about its recent strength and awaiting German inflation data that could undermine it further.

Slightly soft Spanish inflation numbers led to a drop in the euro in early trade in London, with more sellers likely to line up if German inflation data, due at 1300 GMT, highlights subdued price pressures in Europe’s largest economy, traders said.

EuroStoxx resolves inside candle to the upside.

The EuroStoxx 50 index had an upside breakout this week, after a week of indecision.  This breakout appears to be an extension and may challenge its ultimate resistance at the weekly Cycle Top at 3224.02.

(Reuters) – European stocks rallied on Friday, with Milan’s benchmark index hitting a near three-year high, lifted by mounting expectations that the European Central Bank may ease policy next week to support the region’s fragile economic recovery.

Speculation that China could step in to stimulate its economy also helped lift sentiment, boosting shares of metal and mining stocks, with Anglo American up 1.5 percent and Glencore Xstrata up 2 percent.

The FTSEurofirst 300 index of top European shares ended 0.8 percent higher, at 1,332.29 points, while Milan’s FTSE MIB index surged 1.5 percent, hitting a level not seen since May 2011.

The Yen loses Short-term support, stops at Intermediate-term support.

The Yen declined beneath its short-term support at 97.81, but found Intermediate-term support at 97.09.  There is an opportunity for the Yen to rally, should this support hold.  The dollar/yen carry trade is dependent upon a declining Yen.  Despite a strong USDJPY ramp on Friday morning, there was no follow-through, raising questions of sustainability.

(Bloomberg)  Japan’s encouragement of yen depreciation to boost the economy threatens to backfire by making the country dependent on foreign investors for funding.

That’s the very same economic weakness that prompted Morgan Stanley to describe emerging-market currencies from South Africa’s rand to Turkey’s lira last year as the “fragile five.” While the yen is still regarded by investors as a safer bet than any of those developing currencies, the prospect of 33 years of current-account surpluses coming to an end may dent its appeal as a haven, according to Brown Brothers Harriman & Co.

The Nikkei is is testing Short-term resistance.

The Nikkei rallied away from its Head & Shoulders formation, but stalled at weekly Short-term resistance.  Should it resume its decline beneath the neckline, the Nikkei may drop below its weekly mid-Cycle support at 11893.85.  The Cycles Model projects a decline into early April.

(Bloomberg)  Japan’s Topix index rose for a fifth day, capping its biggest weekly advance in four months, as consumer lenders and airlines led gains.

Consumer-finance and leasing company Orix Corp. added 4.3 percent. Japan Airlines Co. climbed a second day for the biggest advance among air-transport shares. A Topix (TPX) gauge tracking brokerages rose 2.4 percent after dropping the most among the broader measure’s 33 industry groups yesterday. Yahoo Japan Corp. plunged 6.4 percent after agreeing to buy parent SoftBank Corp.’s broadband-service provider eAccess Ltd. for 324 billion yen ($3.2 billion). SoftBank slid 1.5 percent.

The Topix increased 0.8 percent to 1,186.52 at the close in Tokyo, after falling as much as 0.7 percent. The gauge’s five-day winning streak is the longest since October. The measure capped a 3.5 percent gain this week, its biggest such gain since the period ended Nov. 15. The Nikkei 225 Stock Average rose 0.5 percent today to 14,696.03.

U.S. Dollar challenges the Triangle trendline.

The Dollar eked out a small gain as it challenged the lower trendline of its massive Triangle formation.    While breaking above the trendline the dollar may also emerge above Intermediate-term resistance at 80.4.  What appears to be a temporary reversal may become a real problem for the Dollar bears.

(Investing.com) – Solid personal spending data in the U.S. sent the dollar firming against most major currencies on Friday, though profit taking cooled the greenback’s gains. In U.S. trading on Friday, EUR/USD was up 0.07% at 1.3751.

The Commerce Department reported earlier Friday that U.S. personal spending rose 0.3% in February, in line with expectations, Personal spending in January was revised down to a 0.2% gain from a previously estimated 0.4% increase.

A separate report showed that the core U.S. personal consumption expenditures price index remained unchanged at 0.1% last month, in line with expectations.

Elsewhere the revised Thomson Reuters/University of Michigan consumer sentiment index ticked up to 80.0 in March from 79.9 the previous month. Analysts had expected the index to rise to 80.5 this month.

Treasuries have a week of indecision.

Treasuries made a small gain above Long-term support at 132.32.  The Cycle high made on March 3 remains intact.  Should the March 3 high remain, we may see a surprise collapse in bonds over the next two weeks.

(ZeroHedge)  The short-end of the Treasury curve continues to reprice higher in yield (3Y +2bps) as the term structure bear-flattens with 30Y yields rallying further after the aggressive 7Y auction. 30Y yields just broke below 3.5% (-4.5bps) – the lowest level intraday since early July 2013. 2s10s are now at 2.21% – near 10-month lows – and 5s30s has plunged to 1.80% – its flattest since September 2009.

Gold extends its decline.

Gold extended its decline to challenge weekly Intermediate-term support at 1278.18.  A further breakdown may challenge the Lip of a Cup with Handle formation in the next week or so.  The potential consequences appear to be severe.

(Forbes)  Gold prices are $100 off their price peak from two weeks ago, and gold-market analysts said they’re going to watch technical charts to see how the yellow metal behaves next week and whether or not the slip in prices spurs physical demand.

June gold futures fell Friday, settling at $1,293.80 an ounce on the Comex division of the New York Mercantile Exchange, down 3.2% on the week. May silver rose Friday, settling at $19.790 an ounce, down 2.6% on the week.

Crude extends its rally.

Crude broke above Long-term resistance at 100.28 to complete a 65.7% retracement of its initial decline from its March 3 high.  This action may be setting up crude for a hard reversal next week.  A subsequent decline may lead to the Head & Shoulders formation at the base of this rally, which may be overshadowed by the Cup with Handle formation with an even deeper target.

(Reuters) – Brent crude oil rose for a fourth straight session on Friday, notching its first weekly gain since February, on promising U.S. economic data and concern that possible Western sanctions on Russia’s energy sector could disrupt global supplies.

The United States and NATO have voiced alarm over what they say are thousands of Russian troops massed near its western border with Ukraine. Russian President Vladimir Putin has reserved the right to send troops into Ukraine, home to a large population of Russian-speakers in the east.  U.S. crude oil rose for its third session on data showing consumer spending increased in February, lifted by an increase in services consumption, news that also buoyed the U.S. equities markets for most of the session. However, a dip in consumer sentiment this month offered confirmation that economic growth slowed in the first quarter.

China stocks fail at  Intermediate-term resistance.

The Shanghai Index challenge both Short-term resistance at 2057.22 and Intermediate-term resistance at 2075.88 before dropping beneath both this week.  The brief bounce called for by the Cycles Model is now complete.  It may now resume the decline beneath the neckline.  The ensuing decline may be swift and deep.  There is no support beneath its Cycle Bottom at 1936.40.

(ZeroHedge)  Over the past month, we have explained in detail not only how the Chinese credit collapse and massive carry unwind will look like in theory, but shown various instances how, in practice, the world’s greatest debt bubble is starting to burst, resulting not only in the first ever corporate default, but also in the bursting of the associated biggest ever housing bubble. One thing we have not commented on was how actual trade pathways – far more critical to offshore counterparts than merely credit tremors within the mainland – would be impacted once the nascent liquidity crisis spread.

Today, we find the answer courtesy of the WSJ which reports that for the first time in the current Chinese liquidity crunch, Chinese importers, for now just those of soybeans and rubber but soon most other products, “are backing out of deals, adding to a wide range of evidence showing rising financial stress in the world’s second-biggest economy.”

The Banking Index reverses from its Cycle Top.  

BKX reversed from its weekly Cycle Top this week at 73.97 and fell to its trading channel trendline.  It has yet to break the lower trendline of its Orthodox Broadening formation with bearish consequences.  The Cycles Model suggests a new low may be seen by mid-April, which heightens the probability of a flash crash.

(ZeroHedge)  Curious what the real, and not pre-spun for public consumption, sentiment on the ground is in a China (where the housing bubble has already popped and the severe contraction in credit is forcing the ultra wealthy to luxury real estate in places like Hong Kong) from the perspective of the common man? The photo below, which shows hundreds of people rushing today to withdraw money from branches of two small Chinese banks after rumors spread about solvency at one of them, are sufficiently informative about just how jittery ordinary Chinese have become in recent days, and reflect the growing anxiety among investors as regulators signal greater tolerance for credit defaults.

(NYTimes)   After the Cold War ended in the early 1990s, Viennese banks pushed aggressively into the newly open markets of Eastern Europe, as if rebuilding the old Hapsburg Empire one A.T.M. at a time.

The banks of Vienna were not the only Western lenders seeking to stake out the former Soviet bloc, of course. But the Austrians, for reasons of geography and history, bet big on Eastern Europe and Russia.  Now, as regional tensions with Russia rise, Austrian banks risk being caught in the financial and geopolitical crossfire.

(Reuters) – St Petersburg-based Bank Rossiya is to cease all foreign currency operations and work only with the Russian rouble in response to U.S. sanctions imposed last week, it said in a statement on Friday.

Bank Rossiya is Russia’s 15th-largest bank by assets, and the only Russian company that has so far been included on the list of individuals and entities sanctioned over Russia’s annexation of Crimea, because of its close links to businessmen seen as personal allies of Russian President Vladimir Putin.

U.S. officials said that the bank would be “frozen out of the dollar”.

(ZeroHedge)  While we are sure the governments and their IMF handlers will find a way around such annoyances as the rule of law, the Greek Supreme Court just ruled that the seizure of bank deposits due to debts to the state without previous notice was against the Constitution. We humbly suggest the Ukrainian courts be rapidly brought to a decision on the same ruling, before IMF hands start dipping into pockets.

Have a great week!

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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USDCHF: While USDCHF may have closed higher for a second week in a row, it ended the week with a rejection candle on the daily chart suggesting price exhaustion has set in. Except it recaptures the 0.8898 level, it faces the risk of a corrective weakness in the new week. In such a case, support lies at the 0.8786 level where a break will set the stage for a run at the 0.8698 level. If it violates this level it will resume its medium term downtrend presently on hold. Further down, support comes in at the 0.8650 level and then the 0.8600 level. On the other hand, the pair will have to break and hold above the 0.8786 level to create scope for additional strength towards the 0.8829 level where a break will pave the way for a run at the 0.8900 level. Above here if seen will aim at the 0.8950 level and subsequently the 0.9000 level. All in all, the pair remains biased to the downside in the medium term though recovering.

Article by www.fxtechstrategy.com