USDCHF’s upward movement extended to as high as 0.9274. Support is at 0.9139, as long as this level holds, uptrend could be expected to continue and next target would be at 0.9300-0.9350 area. However, a breakdown below 0.9139 will indicate that a cycle top has been formed at 0.9274 level on 4-hour chart, and the rise from 0.8922 has completed, then deeper decline towards 0.8922 previous low could be seen.
Stocks made some modest gains today, spurred on by encouraging jobs numbers from the private sector. 201,000 jobs were added from February to March, according to the ADP Employment Report.
By Jared Levy, Editor, Smart Investing Daily, taipanpublishinggroup.com
Maybe I am a fan of Charlie’s because of his role in the movie Wall Street, which motivated my career in finance. Perhaps it’s the fact that I have enjoyed his films and his comedy.
I have to admit that Mr. Sheen has been accused of (and is guilty of) actions that I do not approve of or condone, but what I have found interesting is undeniable about the man — he speaks his truth! (As irrational as it may seem or offensive as it may be.)
Oddly, the words of Charlie Sheen have more sincerity than the majority of politicians, and corporate and world leaders. And SOME kind of truth is what this world needs right now.
The lack of straightforward, raw truth we’re seeing in government and the corporate world right now might be one of the reasons the stock market is behaving the way it is, and I don’t want you to get caught up in the “bull” without being informed.
The recent rally in the stock market has been dubbed the “nothing matters rally” because the market has seemed to get a boost from nothing. In reality things have gotten seemingly worse (housing, sentiment) but none of the news has fazed the market. The headlines can be extremely confusing and even misleading, and the average retail trader has to be experiencing a bit of bewilderment; I know I am.
In fact, the stock market just had its best week in months, shrugging off record highs for oil, elevated food and energy prices, a dead housing market, astronomically high U.S. unemployment, flat wage growth and spotty earnings expansion for the majority of the stocks in the S&P 500.
That’s in addition to a terrible disaster that is crippling an indebted country and many companies that produce goods there. And by the way, revolution is further destabilizing the Middle East…
To be fair, there are many companies that may flourish in this environment. You see, with global prices (inflation) on the rise (food, metals, etc.), there are companies that will benefit. We have seen the results of these in companies like Potash (POT:NYSE), Mosaic (MOS:NYSE), Caterpillar (CAT:NYSE), Deere & Company (DE:NYSE) and others. Smart Investing Daily has had many of these companies on our radar.
(Investing doesn’t have to be complicated. Sign up for Smart Investing Daily and let me and my fellow editor Sara Nunnally simplify the stock market for you with our easy-to-understand investment articles.)
Other sectors that are seeing support are connected to global technology growth, economization (the cloud) along with wireless communications and infrastructure (transport, electricity and telecom). Global growth and development has created demand for computers, smartphones, hardware and much more, fueling profits for companies like Apple (AAPL:NASDAQ), Google (GOOG:NASDAQ), Skyworks Solutions (SWKS:NASDAQ), and Qualcomm (QCOM:NASDAQ).
The potential problem is that much of the demand is coming from fast-growing “bubbles” in China and other developing nations such as India and Brazil.
But like we experienced here in 2008, what goes up too quickly, can end badly. But no one seems to be bringing this up…
Commodity prices, on average, are through the roof, many back at early 2008 levels, and the greenback is still in the toilet. The DXY, which is a popular index that measures the U.S. dollar against other currencies, is also back at early 2008 lows. Not good for us here in the States.
Where is all this inflation coming from?
Several reputable data sources have noted the extreme inflation readings in China. Yesterday MarketWatch noted how inflation in China is spreading across the world affecting prices and perhaps more importantly outsourcing in the country now and for years to come.
To put it simply, we all know that many companies make many of the products that you and I use on a daily basis in China. This is because it has cost so little to manufacture goods there because of cheap labor and materials.
Change is coming my friends; China is no longer the cheapest place to manufacture, which means all those manufacturing cost increases are getting passed back to you and me, leading to even more expensive goods and services — like we need that.
Some also discount the enormity of the situation. In a research note published last year, Euromonitor noted that “China will overtake the USA to become the largest world economy in 2017 and there will be more emerging economies in the top ten economies by 2020 and beyond.”
In a letter to subscribers last week in WaveStrength Options Weekly, I noted that something has to give. The only catalyst I see for the stock market’s boom is essentially material and food price inflation driven by the largest developing nations. Remember that earnings season starts April 11; I don’t think the market can shrug off financial results.
For now, you can’t fight the tape, so stay long but keep your stop-losses extremely tight. I would hang on to those longer-term insurance puts that you may have and perhaps begin to take profits on your long positions here.
I just wish that the mainstream media would tell the full story (dare I say truth), unedited and unpolished to investors around the world. Things don’t seem to make sense at the moment.
Editor’s Note: Expose the $50 Billion Shadow Syndicate! At this moment, a ruthless government conspiracy is cannibalizing American jobs… crushing hopes for an economic recovery… and setting up the single greatest profit opportunity of the last 83 years. Act now, and you could be $97,500 richer.
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About the Author
Jared Levy is Editor of WaveStrength Options Weekly, our options trading research service and 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.
The CEO of Starbucks (SBUX) announced that the scale of the coffee chain will help it withstand the financial impact of the Japan natural disaster, which has forced the company to shut more than 10 percent of its locations there. The company has 17,000 locations in more than 50 countries, and profits doubled during its last fiscal year, which ended October 3, and surpassed $940 million.
Credit Suisse has revised down its U.S. GDP forecasts for the first half of 2011. The firm now expects 2.5% real GDP growth in Q1, down from its previous forecast of 3.5%. Its Q2 forecast was also revised down to 3.3% from 3.7%. However, the firm’s 2011 second half forecasts remain unaltered at 3.8% and 4.0% for Q3 and Q4, respectively. Credit Suisse expects full year 2011 growth of 3.4% on a year-over-year basis and 3% on an annual average basis. This is down from its previous estimate of 3.8% and 3.3%, respectively. The firm sees 4.0% real GDP growth in 2012. Credit Suisse issued a statement saying: The first quarter’s forecast revision is mostly due to current quarter accounting. The monthly building blocks that add up to GDP have consistently printed below expectations this quarter, defying the much rosier readings from other parallel evidence on the economy (such as the ISM surveys). The list of GDP “source data” disappointments includes home sales, housing starts, capital goods shipments, non-residential construction, federal spending, and a sharp increase in the trade deficit. Most importantly, the GDP’s largest building block – consumer spending – is slowing sharply on a sequential basis, on track for less than 2% growth in Q1, compared to 4% growth in Q4. Our revision to second quarter growth is partly a consequence of higher oil prices and the negative effect on real income growth. Consumer confidence gauges also fell sharply in March, presumably due to higher gasoline prices. Another reason for our Q2 downgrade is housing, particularly the 22% plunge in February housing starts. Falling starts will impact future readings on construction outlays and the associated GDP component – residential investment.
By CountingPips.com
The latest U.S. employment data released today showed that private employers added more than 200,000 workers for a second straight month in March as small businesses continued to lead hiring. The ADP National Employment Report showed that private companies hired 201,000 workers in the month of March following a revised increase of 208,000 jobs gained in February. The original February report had shown a rise of 217,000 workers.
This latest data just missed the market forecasts as forecasters and economists were expecting the jobs report to come in with a gain of approximately 210,000 jobs 
for the month.
The advance in private March jobs pushed the streak of service-sector gains to fifteen consecutive months of increases and the goods-producing sector to the fifth straight month of gains.
The service sector saw an increase by 164,000 workers in March and the goods-producing sector registered a gain of 37,000 workers. Manufacturing jobs rose for a sixth straight month by 37,000 workers while the construction sector declined by 5,000 workers. The financial sector saw a gain of 4,000 for the month.
Small businesses or companies with less than 50 workers led the way in employment creation as small business payrolls rose by 102,000 workers for the month. Large businesses or companies with more than 500 workers added 17,000 workers for March while medium-size businesses increased by 82,000 workers.
The market-moving US nonfarm government payroll report is scheduled to be released on Friday at 12:30 GMT. Early forecasts are looking for the payrolls report to increase by 216,000 workers and the unemployment rate to level at 8.9 percent.
Forex: US dollar on the defensive as Stocks rise
The US dollar has mostly lower against the other major currencies in the forex markets today. The dollar has lost ground on the day versus the euro, Swiss franc, Australian dollar, Canadian dollar, New Zealand dollar and the British pound sterling while gaining on the Japanese yen.
The US stock markets, meanwhile, have been on the rise in trading today with the Dow Jones industrial average increasing by over 90 points while the NASDAQ has been higher by over 15 points and the S&P 500 has increased by roughly 10 points at time of writing.
In commodities, oil has hovered around the $104.51 level while gold futures have increased to trading at the $1,423.40 level so far today.
By Adam Hewison
Here is a simple question for you: which would you rather buy right now,
gold or silver?
Gold has incredible amounts of emotional baggage attached to it, while
silver is in a different league – at least for the moment. This video
will show you two indicators that can help you capture either market
when and if the upward trend decides to resume.
With all of the world’s troubles, there are plenty of reasons why one
would think that both of these markets should be much higher. The
question is, why aren’t they? I think that the video you’re about to
watch will help answer some of those questions.
In today’s short educational trading video, I put together comparisons
between these two markets and why the obvious choice may not be the best
choice.
As always our videos are free to watch and there are no registration
requirements. All we ask is that you take the time to perhaps comment on
the blog about what you think of the video and also what you think of
gold and silver. Please feel free to Tweet or email your friends about
this video.
Every success in the markets, trading, and life.
Adam Hewison
President of INO.com
Co-founder of MarketClub
AOL (AOL) insiders say the integration with the Huffington Post is “messy”. A source says “For a while we only thought there was going to be one master brand. Huffington Post, and that would have all the AOL channels. That recently has morphed. They’re going to have two brands. Huffington Post, then you’re going to have the AOL brand. It’s fair for a company to change their mind, but before you start integrating the sales team, you should know why you’re integrating them and what ultimately they’re going to be selling.”
By Russell Glaser
The EUR/JPY is supported by improving fundamentals and positive technicals.
Looking first at the euro, recent euro strength can be explained via expectations of rising interest rates. ECB President Jean-Claude Trichet has made no secret of this and on Monday reiterated his commitment to increasing European interest rates. Rising inflation in the euro zone is consistently above the ECB target of 2% and Trichet appears determined not to let inflationary pressures get out of control. Expectations of the ECB raising the interest rate off of its 1.00% low have traders moving into the euro in search of higher yields.
The 17-nation currency is not without its faults. In the last meeting of Europe’s finance ministers, the group was unable to come to a decisive agreement to support the indebted peripheral nations with the new European Stability Mechanism. Yesterday S&P downgrading Greek sovereign debt as the rating agency expects a higher risk of a debt restructuring. However, the euro was little changed following the news. This sends a signal to traders; as the currency fails to react to negative news; underlying fundamentals have changed and the market is now focused on interest rate differentials
Turning to the yen, the Japanese currency is now trading at its weakest point since the G7 intervened in the FX markets. It appears traders have been positioned out of long yen positions by the unilateral intervention. Also improved risk sentiment is helping as traders unwind risk-off trades from the previous two weeks which supports a weaker yen.
Looking to the charts, the EUR/JPY appears to be reversing the long term trend. In mid-February the pair broke above the trend line off of the October 2009 high. The daily chart shows the long term moving averages have turned higher. Yesterday the pair broke out about above the previous resistance level on the weekly chart at 116.00. There is a lack of resistance levels on the chart until 119.60. Moving higher, the next resistance is found at 128.00 and 134.40. To the downside, support is found at 112.00 and the pre-intervention low at 106.80.
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.
Macroanalysts in Jyske Bank conclude that global recovery has a firmer footing in spite of several risks.
Analyst Peter Øemig elaborates on the analysis of the global economy.
Click here to read the analysis in its full length.
Video courtesy of en.jyskebank.tv
