Month: December 2010

By Forex Signs, Inc.

The pair CADJPY is maintaining its bullish trend from yesterday as price has breached yesterday’s 82.745 resistance level. As of this writing price is testing immediate resistance level 83.015. A bullish bias is seen in the medium term, especially if price is able to make a clear break above the resistance level targeting 83.089 area. SMA (14) for mid term suggests a bullish trend as the trend line is seen on an upward movement. RSI (14) for the mid term shows price is in neutral territory, and a bullish momentum can be sustained.

Canadian Housing Figures Expected To Boost The Loonie

The Canadian dollar is expected to rise against the US dollar as the Housing Starts is expected to increase to 174K for November. This indicator fell more than economists expected in October, which only reported 168K in September. The Bank of Canada earlier said that housing will be a hindrance in economic growth next year after several stimulus measures for homeowners resulted to no gain.

Meanwhile, the US will continue the Bush-era income tax cuts to reduce pressure on the Fed’s $600B bond-purchase program to spur US economic growth. With this measure, the US hopes to raise GDP by next year by half a percentage point to 3.1%. After announcing the agreement, US stocks mad a rally sending the S&P 500 index to highest level since the financial crisis in 2008.

Rising German Industrial Orders May Spur the Euro

For the upcoming European session a strong German Industrial Production is expected to boost the Euro against the Swiss Franc, as market consensus stands at 1.1%, after November’s report posted a fall of 0.8%. This economic indicator has more impact than the factory orders released last Tuesday. Though factory orders have only risen 1.6%, it was still a welcome development for the Euro as it tries to regain its footing following the massive sell-off last November due to the Irish bailout. Investors are now looking at the possibility of a rebound by the Euro after the European Union is now looking to find a permanent solution to the crisis the region has suffered. The Euro finance ministers though have not discussed those measures, as they believed the funds the EU has put up is sufficient enough for them to stem the sovereign debt crisis.

About the Author

Forex Signs, Inc., Founded in 2006 in Wall Street, New York City, FSI relentlessly strives to be the premier Forex brokerage company in the industry by providing exclusive and unmatched trading and investment related services while constantly developing innovative solutions that cater to the vast requirements of both individual and institutional market participants.

The euro has been trading slightly higher against the US dollar in the forex markets today after reversing early declines. The EUR/USD, which fell by approximately 110 pips yesterday, opened the day at the 1.3227 exchange rate and fell behind early this morning to touch an intraday low point of 1.3180.

The common currency has made a comeback in the American trading session to currently trade at the 1.3262 level, according to currency data from Oanda near the end of the US trading session. The advance brings the euro’s gain against the dollar on the day to approximately 35 pips.

EUR/USD Daily Chart – The pair has resistance above near the 1.3300 exchange rate while possible support lies below in the form of the 200-day moving average (white line) at 1.3120.

About the Author

FxNewsEurope.com – Euro Forex News

The US dollar has been on the rise against the Indian rupee for a third straight day in the forex markets on Wednesday, according to currency data in afternoon of the US session.

The USD/INR currency pair opened the day near the 45.67 exchange rate level and advanced to it’s highest level since November 30th at an intraday high of 46.00. The pair has dipped from the high and is currently trading near the 45.92 level. This is the third consecutive day of gains for the dollar versus the rupee and the USD/INR has climbed from below 45.00 earlier in the week to reach 46.00.

The dollar was on the defensive against the rupee last week after streaking higher for three straight weeks. The American currency had declined to a 26-month low at 44.03 on November 5th before rebounding as high as 46.29 on November 26th.

USD/INR – The pair is currently trading just below the 46.00 exchange rate level and right at the technically significant 200-day moving average (white line), according to data from Oanda.

About the Author

FxNewsIndia.com – Indian Rupee Forex News

By Jared Levy, Editor, Smart Investing Daily, TaipanPublishingGroup.com

Back on Oct. 1, when the S&P 500 was at 1,136, I gave you four reasons why I thought stocks were still cheap. Today, even with the index almost 90 points (8%) higher, I still believe you should be buying certain U.S. equities. If you have been reading Smart Investing Daily regularly, you know that Sara, our guests and I try to offer you real, practical, actionable advice that makes sense.

Figuring the Financial Market Out Is NOT Impossible

We often forget what is behind the financial market’s proverbial curtain. Behind all the numbers, algorithms, earnings, charts, forecasts and analysis is one thing that makes it all come together and offers rationale for all these seemingly random numbers and patterns: the human mind.

What separates the greatest traders and investors in the world from the average investor is that they understand the way the human mind works, especially when a bunch of minds (people) are gathered in a crowd. Crowds of people, with similar intentions or motivations often behave in ways that may be contrary to their normal personalities and decision-making processes.

You don’t need a Ph.D. in psychology or a mathematical mind like the great John Nash to get an idea of the current “crowd” mentality. A few clicks of the mouse, a bit of television and the ability to really listen is all it takes. Now, I’m not saying that if you listen to anyone offering advice on the financial markets that following their guidance will make you successful, because that certainly is not the case.

There Are Four Gauges You Need to Follow

Adages — Get to know the financial market’s beliefs; axioms like “Santa Claus Rally” and the “January Effect” may seem like cryptic old wives’ tales, but there is not only reasoning behind them, but often blind faith. Believe it or not, statistics show that both of these upcoming bullish events have proven to be at least somewhat true and if the financial market has an overall positive tone, that should only accentuate these beliefs. Check out the Stock Trader’s Almanac to learn more.

Tone — This gauge is a bit more difficult to get, because of the ever present noise. I find the financial market’s tone by listening to the most well respected and widely followed analysts like Abby Joseph Cohen of Goldman Sachs and Warren Buffett of Berkshire Hathaway for example, both of whom have tremendous influence over the financial marketplace.

Right now, both believe that equities are set to move higher and have offered bullish commentary overall. I also read major publications like The Wall Street Journal and watch networks like CNBC to get an “average tone” of the experts offering their commentary. My peers here at Taipan are also a well-diversified resource for viable information.

The mass media’s commentary seems to be moderately bullish still. Of course, the “doom and gloom” bears will always be there. Listen to their points as well and weigh all arguments. Logic, for most of us, wins in the end. From what I have gathered, the overall data is mixed, but generally points to recovery and higher equity prices.

Tone can also come from financial market reactions to events. Take last Friday’s abysmal jobs number, which I thought was sure to send the markets plummeting. Instead, the Nasdaq, S&P 500 and the Dow all finished slightly higher. This tells me the bulls are in control at the moment and are willing to shrug off what many consider to be a major, albeit lagging, indicator.

(By the way, investing doesn’t have to be complicated. Sign up for Smart Investing Daily and let me and my fellow editor Sara Nunnally simplify the market with our easy-to-understand articles.)

Technicals — On the way up or down, you must pay at least some attention to the charts. Not because some random lines on the screen tell us exactly what will happen, but rather they can be the “street signs” alerting you to speed up or slow down or that there is a dangerous curve ahead. It’s not about the lines themselves, but that enough people believe in those lines and numbers that they often become a self-fulfilling prophecy.

Many of our research services here at Taipan are focused on mastering and profiting from these technical patterns. Don’t ignore them; find a reputable source and listen to them.

Overall Fundamentals and Past Sentiment About Them — At the end of the day, companies should be making money and increasing the amount of money that they make. Don’t dismiss fundamentals on a high-flying stock. Easy come, easy go, and if a company is losing more and more money and their stock has not yet responded, a correction may be coming.

This holds true for the overall market as well. If you want to go long the broad market with an ETF like SPDR S&P 500 (SPY:NYSE), do a quick value checkup, especially right before and right after earnings season. The price/earnings ratio is simply the price of the index (SPX shown below) divided by the overall earnings of the companies in that index. Since 1900, the average P/E ratio for the S&P 500 index has ranged from 4.78 in December 1920 to 44.20 in December 1999, with an average right around 15-16. Right now, that number is slightly elevated (just above 20), but this is typical when growth is expected.

Image Source: www.multpl.com

Buy Cautiously Up Until Mid-January

If the S&P 500 can get above 1,227 and close there, I believe there will be a short-term continuation of the rally that we have been experiencing into the new year. The gauges are still pointing slightly bullish, although the speed limit has been dramatically reduced. We will have to wait until January when the next earnings season kicks off to see if Santa brought gifts or coal to the marketplace.

About the Author

Jared Levy is Co-Editor of Smart Investing Daily, a free e-letter dedicated to guiding investors through the world of finance in order to make smart investing decisions. His passion is teaching the public how to successfully trade and invest while keeping risk low.

Jared has spent the past 15 years of his career in the finance and options industry, working as a retail money manager, a floor specialist for Fortune 1000 companies, and most recently a senior derivatives strategist. He was one of the Philadelphia Stock Exchange’s youngest-ever members to become a market maker on three major U.S. exchanges.

He has been featured in several industry publications and won an Emmy for his daily video “Trader Cast.” Jared serves as a CNBC Fast Money contributor and has appeared on Bloomberg, Fox Business, CNN Radio, Wall Street Journal radio and is regularly quoted by Reuters, The Wall Street Journal and Yahoo! Finance, among other publications.

There’s no question about it, 2010 has been pretty difficult for most traders in the crude oil market. This year has produced no discernible, lasting trends in this market. The trends it has produced have lasted little more than just 3 or 4 weeks at best.

So what’s ahead for this market?

In today’s short video (below) we examine the fact that crude oil briefly traded over $90 a barrel before falling back. So what made the crude oil market reverse course and fall back? Was it selling, was it profit taking, a technical point, or something else?We are examining crude oil in detail using a tool that we think is very appropriate for this type of market at the moment.

We have not discussed this technical indicator in any of our previous videos and I think when you see how it works and how you can use it your own trading, you will be pretty impressed.

We still look at our “Trade Triangles” of course, but “Trade Triangles” tend to work best with markets that eventually get into big trends and that’s really where you make your money.

If you have a few minutes and you’d like to learn about this new/old technical indicator that has generally been overlooked by many traders, you will find this video very interesting. This 30 year old indicator has proven to be very effective in this year’s crude oil market so you don’t want to miss this video.

All the best,
Adam Hewison
President of INO.com
Co-founder of MarketClub

To see more of Adam’s Videos click here or sign up for Adam’s Free 10-part Professional Trading Course.

We visited the Innovation Lab in Aarhus, Denmark, an atypical workplace whose international customers range from Sony Ericsson to Samsung to Mars.  The innovation lab is one of many consulting organisations trying to help companies become more innovative.

For more on innovation, see this edition of the Woodward Report.

Legal information

Written by FastBrokers House – Most interest has been on USD/JPY and we have seen the pair grind its way higher amid some quite large turnover. The weak machinery orders and prospects of rising US rates kept the pair well bid and the North Korean military drills provided the momentum to break through heavy offers at 83.70 and trigger stops above 83.80. Ranges: 83.47/94, EUR/JPY 110.54/111.05

EUR/USD rallied initially after a failure to break below some hourly support at 1.3240 but with offers aplenty above 1.3300, any rally was likely to be short-lived. The break higher in USD/JPY was the catalyst for stops below 1.3240 to get triggered but momentum to test more support at 1.3200 was lacking. Ranges: 1.3215/80

AUD/USD has traded along dollar lines for the last few sessions, weing led by USD/JPY. Some modest buying in early trade saw the pair to its session highs at .9855 but long-liquidation ahead of an expected Chinese rate rise was always likely to cap rallies. Ranges: .9780/.9855

Cable has also traded with a heavy tone after solid offers around 1.5800 gave bulls their fill over the last few sessions. EUR/GBP has had an unusually quiet session. Ranges: Cable 1.5709/64, EUR/GBP .8405/27

Market Commentary provided by FastBrokers.

Disclaimer: FastBrokers’ market commentary is provided for information purposes only and under no circumstances should be regarded neither as an investment advice nor as a solicitation or an offer to sell/buy any financial product. FastBrokers assumes no responsibility or liability from gains or losses incurred by the information herein contained.

Risk Disclosure: There is a substantial risk of loss in trading futures and foreign exchange. Please carefully review all risk disclosure documents before opening an account as these financial instruments are not appropriate for all investors.

By Greg Holden – The sudden spike above $90 a barrel in Crude Oil on Monday has many investors paying close attention to today’s release of Crude Oil Inventories from the United States.

As the winter season begins to pound the American northeast, with colder than expected temperatures and fresh snowfall in New York, the supply side of the heating fuel equation has come under question, lifting oil and natural gas prices higher in trading.

If inventories grow in today’s publication we could see the price of Light, Sweet Crude settle back towards $87 a barrel in today’s American trading session. If inventories decline, on the other hand, speculators could take this as a hint that the supply side is more limited than forecast and begin to lift the price of oil higher.

Forex Market Analysis provided by ForexYard.

© 2006 by FxYard Ltd

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

By GCI Forex Research

Fundamental Outlook at 0800 GMT (EDT + 0400)

USD

The dollar strengthened further during the Asia session, supported by US Treasury yields that continue to climb sharply. The trigger for the move was the news that US President Obama and the Republican leadership have reached a tentative agreement on a new tax deal. EURUSD traded 1.3206-1.3316, USDJPY 83.24-84.02. Under the plan, the Bush-era tax cuts are to be extended for another two years. Middle-income earners are also to enjoy tax cuts, and Federal unemployment benefits are to be extended for a further 13 months. Newswires cited a Moody’s analyst saying that although they do not see a change in the US ratings outlook in the next year or two, there are long-term concerns on the outlook that the tax proposal does not address. Fitch, on the other hand, said the tax moves show the “broad political agreement needed for fiscal consolidation”.
Our team notes that, if passed in its current form, this tax proposal could add as much as 0.5% to our already above-consensus growth outlook of 2.7% (calendar average) for 2011. It would also likely boost their budget deficit estimates for both fiscal years 2011 and 2012, by $230 bn and $145 bn, respectively.
EUR

Ireland’s Budget 2011 was passed by parliamentary vote. In line with expectations, a ?6 bn fiscal adjustment is targeted for next year. This of course is just another step in what is likely to be a lengthy process of fiscal consolidation extending out to 2014 or 2015.
German Finance Minister Schaeuble remains ready to defend the euro and is confident Portugal will do what is necessary. He also said a Eurobond is not possible without fundamental EU changes. An key advisor to the German government said Eurobonds would be inappropriate. Instead he favours a joint European fiscal policy.
EU Commissioner Rehn said new, more rigorous bank stress tests will start in February. Methodology and scope are under discussion and a liquidity assessment could be included.
JPY

Japan’s Economy Minister Kaieda said it would be desirable for the BoJ to remove its self-imposed limit on the stock of JGBs the Bank can hold. Sticking to the government’s existing line, he said FX markets are basically decided by markets, but that the government needs to take steps if the yen rises excessively.
GBP

Manufacturing production beat consensus at 0.6% m/m versus 0.3% in October, which supported sterling despite a below expectations industrial production print. The November BRC retail sales survey was also less positive but the data should have minimal impact on the upcoming BoE meeting, where we expect no change in policy.
CAD

The BoC kept the policy rate unchanged as expected. The tone of the statement was dovish, unsurprising given disappointing Q3 GDP, as H2 2010 activity appears weaker versus the October Monetary Policy Report projections. Officials said weak net exports continue to drag on growth and the combination of disappointing productivity performance and CAD strength could keep downward pressure on net exports. The inflation picture was unchanged and the statement again noted any policy stimulus reduction, “would need to be carefully considered”.

TECHNICAL OUTLOOK
USDJPY targets 84.41.
EURUSD BEARISH Recovery pressured 1.3448; but overall focus is on downside with initial support defined at 1.3193 ahead of 1.2969.
USDJPY BULLISH Following the sudden recovery yesterday, the pair now targets 84.41. Support at 83.46 intraday low.
GBPUSD BEARISH Expect downside momentum to target 1.5656 with scope for 1.5485 next. Resistance at 1.5823.
USDCHF NEUTRAL Initial support at 0.9726. Resistance at 0.9951.
AUDUSD NEUTRAL 0.9965 and 0.9739 mark the key near-term directional triggers.
USDCAD BEARISH Break through the 0.9978/31 support zone would open up the way towards 0.9820. Resistance at 1.0190.
EURCHF BEARISH Remains heavy below 1.3229 breakout low keeping our focus on downside; expect losses to target 1.2933 and 1.2766 next.
EURGBP BEARISH Momentum is negative; eyes 0.8390 ahead of 0.8335. Upside capped at 0.8528.
EURJPY BEARISH Look for a break below 108.35 and 107.73 to trigger another bearish run towards 105.44 key low. Near-term resistance at 111.98.

Forex Daily Market Commentary provided by GCI Financial Ltd.

GCI Financial Ltd (”GCI”) is a regulated securities and commodities trading firm, specializing in online Foreign Exchange (”Forex”) brokerage. GCI executes billions of dollars per month in foreign exchange transactions alone. In addition to Forex, GCI is a primary market maker in Contracts for Difference (”CFDs”) on shares, indices and futures, and offers one of the fastest growing online CFD trading services. GCI has over 10,000 clients worldwide, including individual traders, institutions, and money managers. GCI provides an advanced, secure, and comprehensive online trading system. Client funds are insured and held in a separate customer account. In addition, GCI Financial Ltd maintains Net Capital in excess of minimum regulatory requirements.

DISCLAIMER: GCI’s Daily Market Commentary is provided for informational purposes only. The information contained in these reports is gathered from reputable news sources and is not intended to be U.S.ed as investment advice. GCI assumes no responsibility or liability from gains or losses incurred by the information herein contained.

By Michael Rosenhall

The Concept of Options Trading

To better understand the concept of options trading and how it functions, one should have a pretty good idea as to how stock trading functions in general.  Options trading is just one of many types of stock market trading activities that many investors prefer over the purchase and sale of bonds, mutual funds and stocks.  What traders need to remember is that options have characteristics that are extremely different from those of stocks.

The key difference between options and stocks has to do with ownership in the company that has issued those shares of stocks.  Purchasing shares of stocks provides you with a small piece of ownership in that company.  Conversely, options are merely contracts that have nothing to do with ownership in that they provide you with the ability to purchase or sell shares of stock by a specific date in the future and at a specific price.

The What, How and Why of Options Trading

Options are classified as either “calls” or “puts.”  The difference between both of these is as follows:

– With a call option, you have the right (but are under no obligation) to purchase shares of stock before the option expires at its current “strike” price.  In so many words, you purchase a call option.

– When you purchase a put option, you have the right (but are under no obligation) to sell those shares of stocks before the option expires at the current “strike” price.

When companies or individuals sell options, they are basically creating a financial instrument or security that had not existed prior to the sale.  We refer to this as “writing” an option.  When you create a call option, you may at some point in time be under obligation to sell those shares before the option expires at the current strike price.

General Option Trading Strategies

The different types of stock trading strategies where options are concerned are similar to how shares of stocks are purchased, sold or traded.  There are basically three different strategies that investors employ – bearish, bullish and neutral (non-directional) and these are based around the specific types of movements in the stock market.  Here is how they differ:

Bearish strategy – this particular strategy is employed by the investor who is expecting the underlying price of that stock to start declining.  In order to devise the best bearish strategy, you have to assess how low you feel that stock price is going to go and the time frame involved in its decline.

Bullish strategy – the opposite holds true with this strategy.  It is based on the expected increase in the underlying price of the stock in question.  Again, you must be able to assess how high the price will go and in what amount of time that will occur.

Neutral (non-directional) strategy – when the investor does not know which direction the price of the stock will go, they employ a neutral strategy that is not based on whether the stock increases or decreases in value.  Instead, the strategies are based on the assumed or expected stock price’s volatility factor.