USDCHF stayed in a trading range between 0.8275 and 0.8550 for several weeks. The price action in the range is treated as consolidation of longer term downtrend from 0.9774 (Feb 11 high). Further fall to test 0.9275 would likely be seen after a minor consolidation, a breakdown below this level will signal resumption of the downtrend.
Hello traders everywhere! Adam Hewison here, co-founder of MarketClub with your market update for Monday, the 11th of July.
You can watch the video free here
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Last week, the standout story was the disastrous jobs report. As this week unfolds, we are faced with more problems such as the debt ceiling and the total lack of cooperation between the Democrats and the Republicans. It seems as though both parties are firmly entrenched in their own party lines and are failing to see just what it’s doing to the country.
We have talked about this before, and the fact that the politicians both in Europe and here in the United States really don’t want to face the truth has created the current mess over the last 20-30 years. It is always same old story of “kick the can down the road” and let somebody else take care of it.
Well, it’s showtime or should I say it’s a showdown now! We need to get serious about getting this right in this country. I believe that we got into this together and now we should get out of it together.
Now let’s see how we can protect and make your money grow. Stay Updated here!
S&P 500: +75. The resistance level we discussed all last week was enough to turn this market back down. The symmetry of the S&P is striking and should not be ignored as we could be making a right shoulder of a much larger head and shoulders formation. However, it should not be ignored that the Trade Triangles remain in a positive mode. Look for support to come into this market around the 1300 level.
Silver: +90. Silver reversed course and hit the top of the Donchian trading channel and also moved out of an overbought territory. Our Trade Triangle technology is longer-term trend positive. Intermediate term traders should now be long this market. We still believe that silver is building in major energy base to go higher.
Gold: +65. Like silver, gold is at the top of its Donchian trading channel and this was enough to bring pressure on this market. We continue to believe that gold is building a long term energy field to go much higher later in the year. Long-term trends with the Trade Triangles are positive, while intermediate term trends are neutral.
Crude Oil: -80. Profit-taking and liquidation in the crude oil market is making this market pullback into what could be a very interesting area. A 61.8% Fibonacci retracement brings crude oil to $93.30 for the August contract. We expect that this level should offer sufficient support for this market. Overall the Trade Triangles continue to reflect a negative trend.
The Dollar Index: +70. This index rallied just enough to trigger our intermediate term Trade Triangles, which in turn put us in the neutral camp for this market. The longer term trend for the dollar index is still negative based on our Trade Triangle technology. Resistance remains between 76.35 and support at 74.00.
Reuters/Jefferies CRB Commodity Index: -80. This index is back to the midpoint of the Donchian trade channel and has just moved out of an overbought situation. We expect that we will see more backing and filling in this market before it starts to move higher. Look for support at 335 and again at 330. Resistance starts at 345 up to 347.
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As always, we rely on our market proven Trade Triangle technology for catching the big moves!
Following last week’s article on the Canadian housing sector asking, “Is it Time to Buy a House in Canada?” traders were subjected to yet more data which offers a nudge to answer in the affirmative. Today’s report on housing starts by the Canada Mortgage and Housing Corporation (CMHC) revealed far more Canadians are beginning to build homes than was assumed.
Forecasts for this report were in fact anticipating a growth of approximately 182,000 homes, year-on-year, but the results showed that 197,000 homes began construction, beating even last month’s release of 194,000 new homes. The CAD is still in decline from larger growth concerns affecting all currencies globally, but capital investments do appear to have become more favorable as the Canadian housing sector sees a significant boost from recent data.
The French National Institute of Statistics and Economic Studies (INSEE) released its monthly report on the country’s industrial production figures this morning. The data was expected to show modest growth of around half a percent.
The surprise release of 2.0% growth from the French economy was met with furrowed brows, however, as analysts are attempting to find a way to place such optimistic news with the region’s dominating sentiment of risk aversion. The EUR has not seen much bullishness as a result of this data, but the figure does give some investors a reason to hold out hope for further growth.
So far today, forex traders have witnessed several reports from the world’s major economies that seem to be leaning in favor of higher risk appetite. That this sentiment has not materialized is not surprising—considering last week’s ominous jobs report from the American economy—only worth noting for the day’s update.
Australia’s housing sector and Japan’s household confidence both experienced declines, but the major news from France and Canada pointed to significant growth in industrial production and housing starts, respectively. The currencies from both the euro zone and Canada experienced a decline today, however, in spite of recent news. Forex traders appear to be favoring risk aversion as growth outlook concerns took a hit last week and debt contagion spreading to Italy begins to affect the euro zone.
The Banco Central Do Brasil announced measures to discourage dollar shorting in order to cap a persistent rally of its currency, the Real. The Bank will require that banks with short US dollar positions hold 60% of the value of short positions greater than $1 billion in non-interest bearing deposits at the central bank. The Banco Central do Brasil had previously required banks to hold 60% of the value of short positions greater than $3 billion on deposit. The Brazilian Real has appreciated 20% against the US dollar over the past two years.
With the U.S. recovery again in doubt, it’s more important than ever to watch the bond market here.
Friday’s jobs report was a great banana peel on which Mr. Market slipped.
Via The Wall Street Journal:
The U.S. economy barely added jobs for the second month in a row in June and the unemployment rate rose to the highest level this year, dashing hopes the economic recovery is getting back on track and putting pressure on policymakers to react.
Nonfarm payrolls rose 18,000 last month, far less than expected, as small gains in the private sector were just enough to outweigh continued government job losses, the Labor Department said Friday.
The day before the report, employment numbers from ADP, a private data source, suggested that nonfarm payrolls would be strong. That turned out to be a massive head fake.
Our long-run thesis has been, and continues to be, that the stimulus-led recovery is more or less false. Speculative assets have been driven up on the “sugar high” of false hopes and currency debasement.
Meanwhile, China and Europe are slowing down too — and red-hot emerging markets like Brazil are showing signs of overheating. (The Economist magazine recently created an “overheating index” in which Brazil, India and Hong Kong were in the extreme danger zone.)
What does all of this mean?
First: For a brief shining moment, there was hope that even if the rest of the world was slowing down, the U.S. was gaining ground again. That hope was dashed by Friday’s news.
Second: Deflation, not inflation, is still a legitimate fear, and that means U.S. Treasury bonds could still march higher — with interest rates falling correspondingly lower.
As you likely know, there are many observers just anxiously waiting for the U.S. Treasury bond market to collapse. They may have to wait a good while longer yet.
Along with gold, U.S. Treasury bonds are one of the last remaining “safe haven” asset classes on the planet. That means that money floods into bonds when investors get scared. And when the price of bonds goes up, long-term interest rates go down.
Rising bonds (and falling interest rates) are a harbinger of deflation. When investors buy government bonds at nosebleed prices, they are expressing the view that other assets are not attractive enough, or too risky to mess with.
A willingness to lock in low yields (which is what expensive bonds offer) further telegraphs the opinion that the economy will stay weak. (If strength was expected, interest rates would be expected to rise, and bond prices to fall.)
All of this suggests that U.S. Treasuries are a bellwether here. If USTs keep going up, that is bad news for the economy and the stock market. In Japan, the value of the Nikkei index fell by 75%, even as the price of 10-year notes rose until yields hit 1%.
If the U.S. 10-year note saw yields fall to 1% (from their current perch above 3%), the S&P and Dow would surely fall below their March 2009 lows. That would be a nightmare for bulls.
More important, however, is the question of whether or not the U.S. economic recovery is stalling (and what investors on the whole believe).
Putting aside risks of the debt ceiling fight, bonds could keep rising if the economy keeps sputtering. If the recovery meme picks up again, however, long bonds could fall back into decline.
This makes IEF and TLT, the exchange-traded funds for 10-year notes and 30-year bonds respectively, a pair of instruments worth monitoring.
Written by Justice Litle for Taipan Publishing Group. Additional valuable content can be syndicated via our News RSS feed. Republish without charge. Required: Author attribution, links back to original content orwww.taipanpublishinggroup.com.
Bloomberg Businessweek is one of the few magazines I still get in print. There’s always something interesting in the back pages, like the May 23-29, 2011, issue. Page 65 tries to figure out why Red Bull is such a rocket ship of a brand.
(I might be a bit partial, though… In my younger years, I had a part-time job driving around Charlotte, N.C., handing the energy drink out for free. I even talked my way into the Charlotte Motor Speedway during time trials with a full cooler of Red Bull.)
But every once in a while, a “front page” story hits that really grabs my attention.
This latest issue did just that. The cover said, “No Apologies: The ingenious plan that’s helping the owner of Deepwater Horizon stick it to BP — and walk away unscathed.”
Now, this is right up my alley. I love writing about the crude oil industry. Supply and demand, geopolitics, the environment, gas prices, the Gold-Oil ratio… There’s always something to uncover, and it’s always relevant.
Particularly when it comes to investments.
Here’s the gist of the story in Bloomberg. Transocean, Inc. (RIG:NYSE) was the owner of Deepwater Horizon, the oil rig that was the site of the huge disaster in the Gulf of Mexico last April. Eleven men lost their lives in an explosion that sent 5 million barrels of crude oil into the water.
Transocean has denied any wrongdoing and pinned all the blame on BP plc (BP:NYSE).
Transocean did compensate some of the victims’ families, though. Nine of the people killed worked for Transocean. But as far as paying for any of the clean up? Forget it…
Transocean hasn’t shelled out a dime.
In the meantime, BP has paid out $17 billion so far, and you can bet there’s more to come. BP wants Transocean to share some of the costs. The courts are starting to get involved, and here’s where the twist of the story comes in…
Transocean tried to get the courts to limit the amount of damages it would have to pay out to a mere $27 million if it was found even partially responsible for the blowout.
Want to know when they filed this paperwork? In mid-May 2010, only three weeks after the Deepwater Horizon explosion. Thousands of gallons of crude oil were still spilling out into the Gulf, and Transocean was already trying to cover its butt.
At the same time, Transocean, logged a $270 million “accounting gain” from the insurance on the Deepwater Horizon… 10 times the amount it was willing to pay in death and personal injury claims.
In all fairness, Transocean is not that big a company compared to BP. Transocean’s market cap is $19.82 billion (as of Friday). BP’s market cap is $139.59 billion. “Sharing” the costs wouldn’t exactly be fair if the cleanup would bankrupt Transocean.
So while Transocean does have a responsibility to its shareholders, what about its responsibility for its own actions?
(Don’t forget to sign up for Smart Investing Daily and let me and fellow editor Jared Levy simplify the market for you with our easy-to-understand articles.)
Transocean is hiding behind an indemnity clause in its contract with BP. It says that BP:
…shall assume full responsibility for and shall protect, release, defend, indemnify, and hold contractor harmless from and against any loss, damage expense, claim, fine, penalty, demand or liability for pollution or contamination, including control and removal thereof, arising out of or connected with operations under this contract.
Whew! That’s a whole lot of b.s. to say, “If anything happens, it’s not our fault.”
Unfortunately, this behavior is par for the course when it comes to oil companies — though we’re used to seeing this more from the big buys like Exxon Mobil and BP. It’s just a small consolation that for the disaster in the Gulf of Mexico last year, BP voluntarily waived a $75 million liability cap under the Oil Pollution Act of 1990.
But even this act brings up some serious questions… $75 million is a drop in the bucket compared to Big Oil’s coffers. These guys make tens of billions each quarter in profits. Oil is still at $95 a barrel.
Back in 1990, crude oil was less than $20 a barrel! Of course a cap at $75 million makes sense with oil at $20 a barrel. At $100? Not so much.
The standards we hold these big companies to are weak, and it’s allowed greed and laziness to creep into the industry. It’s deplorable when we see U.S. companies gouging our military for more than $61 million during a time of war.
But that’s what Halliburton did. It overcharged the government by 138%. An audit found that Halliburton charged the U.S. $2.38 for a gallon of gas when the true cost should have been around $1.
So stories like Transocean and BP don’t surprise me anymore. The crude oil industry is ruthless, and Sandy Franks and I thought a spade deserved to be called a spade.
That’s why we wrote Barbarians of Oil.
We are so addicted to crude oil that we let oil companies get away with murder… literally. Our economy is so fused with crude that we are held hostage by tight oil supplies and $100 price tags. Crude oil imports account for one-third of our total deficit, and we’re on the verge of default.
We want to show you how desperate the situation is getting.
This issue has gone way past the “pain at the pump.” We’re at a major tipping point when it comes to our energy resources, and everyone — not just governments, but regular folks like you and me — could get caught on the wrong side of the line.
But we also want you to know about new energy resources. Technology today holds so much promise. This is not just an environmental cause, though the spills and hazards of getting oil from ever more difficult places is a huge concern. This is an economic cause, and a survival cause. Our economy can’t grow with oil prices over $100 a barrel. We can’t fight endless wars over oil resources — it’s just not feasible.
We have to come up with other solutions… They are out there, and we’ve already made great strides in bringing these solutions into the mainstream. There’s going to be another wave of investment in these industries as oil prices climb and the geopolitical climate gets even more dangerous.
Editor’s Note: Barbarians of Oil is on shelves now, and one of the best ways to get inside Big Oil’s head is to understand the facts in this book. Knowing how these guys tick is important. You must protect yourself from their greed.
Pick up a copy of Sara and Sandy’s latest book and save 35% off the cover price by visiting this link.
Article brought to you by Taipan Publishing Group. Additional valuable content can be syndicated via our News RSS feed. Republish without charge. Required: Author attribution, links back to original content or www.taipanpublishinggroup.com.
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By Early to Rise
Ever since writing The Biker’s Guide to Business, I get one question more than any other: “Dwain, what the heck do biking and business have in common?”
To me the answer is obvious in that bikers and entrepreneurs are a similarly bold lot. We’re independent, strong willed, adventurous, and intolerant of fences. We go for it by harnessing our passion in order to excel.
Both biking and entrepreneurship have inherent risk attached to them. But riding a motorcycle scared is a fast ticket to the hospital – and you darn sure can’t run a company scared. Those who know this, the champions, get that it’s not about overcoming fear. Instead, it’s about understanding and embracing reasonable and controllable risk.
As an entrepreneur, it is not a question of if you’re going to face hard times and challenges, it’s a question of when. This article is about how to prepare yourself for the inevitable – five ways to tap into your “inner biker” that will get you through whatever obstacles come your way.
1. Yield
When faced with a business problem, our first inclination is to push harder… to fight back. In my experience, that’s the wrong reaction. The first thing you have to do is fully understand why you’re in that position.
You need to find a way to clear your head of the background noise, including all the advice coming at you from well-intentioned friends and colleagues. You have to take the time to get off the merry-go-round that is business. That may mean finding a quiet place to just sit and think. It may mean hiking, riding a bike or a motorcycle, going boating, or gardening. Whatever works for you.
It is easy to blame a problem on a recent decision. But use this time to dig deeper. Was the problem based on a bad decision made earlier? Did you take your eye off your company’s core values? Did you move away from what got you passionate about your business in the first place?
2. Focus
Once you have figured out the source of your problem, it’s time to get back in the game. And you must have total focus. You are either all in or you’re not. There is no half-steppin’ in business.
You must focus on more than just your business goals. You must focus on what you want out of life. Reason being that, in the beginning, your main business goal is simply to survive, often pushing your life goals aside. Over time, you grow and prosper, and your life and business come together to form one long road trip with many exits along the way.
The key is to figure out which exits are the right ones for you to take in order to achieve success. Don’t make the mistake of chasing one opportunity after another, simply because they look good. Just because you have a clear and open road doesn’t mean it’s the right one.
California girl accidentally discovers $6 billion “Internet Goldmine”
Southern California native Valerie Johnson was simply shopping for pajamas online one day. And then… strictly by chance… she stumbled upon a rather unusual website. Most people have never heard of it. Not even most seasoned online entrepreneurs. But Valerie found it. And it changed her life forever.
Today… thanks largely to the $6 billion “Internet Goldmine” Valerie discovered… she can work from home, call her own shots, and live life completely on her own terms. What’s more, her online business brought in close to $2 million in recession-slammed 2009!
Here’s Valerie’s story… PLUS a way for YOU to master the exact same website that helped Valerie become a seven-figure online entrepreneur.
3. Sweat the Small Stuff
Any businessperson can tell you where they are today, and most can paint a rosy picture of where they want to be. But only the winners can also describe the in-between.
When you’re on a motorcycle, that’s the part of the ride that fills your senses with sights and smells. BUT it is also extremely dangerous if you fail to pay attention to where you’re going. Getting to your destination safely depends on your ability to watch out for the potholes between here and there.
In business, it’s also about watching out for little things that can get in your way. Successful entrepreneurs know that when navigating the in-between, there should be few if any “Aha!” moments. They take the time to map out their road to success. And they pay particular attention to the small stuff, the little things they deal with on a day-to-day basis.
4. Plan Ahead
Entrepreneurs hate to plan. We’ve all been through at least one 2- or 3-day strategic planning session that produced a “detailed plan” – only to have it end up on the shelf in a month or two.
But we have to do it. And the process doesn’t have to be painful. It doesn’t have to take days or weeks. And it doesn’t have to result in a huge binder of information sitting there collecting dust.
Instead of trying to plan for months or even years down the road, you need to focus on your immediate strategy – The Tactical Plan. Begin by setting a one-year goal for your company. Then identify the day-to-day, week-to-week, and monthly tactics to get you there.
5. Sharpen Your Skills
In business, you are here but need to be there. And in order to get there, your business has to grow. The only way that this will happen is for you – and your employees – to grow along with it.
There are many ways to promote advanced business skills throughout your company. Consider the fundamental areas of:
Remember that achieving excellence in anything requires passion – and passion can thrive only in an environment where things are accomplished. When you’ve figured out what it is that drives you, everything else will begin to fall into place. Any and all obstacles you face along the way will be merely learning opportunities on your way to your goal.
Just keep the rubber side down… and enjoy the ride.
[Ed. Note: To learn more about Dwain and his detailed plan on answering “THE QUESTION,” “THE TACTICAL PLAN,” and other steps in building your business – follow him at www.DwainDeVille.com , www.BikersGuidetoBusiness.com, BusinessBiker@Twitter, or see his videos at YouTube.com. Dwain is a business coach to top CEOs, and is the accomplished author of The Biker’s Guide to Business (available through Amazon.com or your local book retailer).]
This article appears courtesy of Early To Rise, a free newsletter dedicated to creating wealth and success through inspiration and practical, proven advice. For a complimentary subscription, visit http://www.earlytorise.com.
By China Research and Intelligence
www.shcri.com – Trust refers to the economic behavior that the trustee accepts clients’ commission to manage or deal with property and economic affairs according to the clients’ intention defined in the agreements or contracts and works in the interests of beneficiaries. Trust investment company is a kind of financial institution managing finances for others as a trustee.
According to the latest market research “Research Report on Chinese Trust Industry, 2010-2011”, in 2004, the scale of trust assets in China was only CNY 149.80 billion. In 2009, the scale rose by over 30% YOY, reaching 1,897.40 billion. With the accelerated increase in the scale of trust assets in China, its proportion in GDP is also enlarging. In 2004, the scale of trust assets only accounted for 1.1% of the GDP. In 2009, it rose to 5.7%. This suggests that Chinese trust industry enjoyed faster development than GDP in the past few years.
In 2006, Chinese trust industry earned the profit of CNY 3.90 billion. It acquired over twofold growth to reach 12.20 billion in 2009, and the profit per capita exceeded CNY 2 million. Furthermore, the proportion of commission charge of the industry in the total business revenue exceeded 50% for the first time. “Research Report on Chinese Trust Industry, 2010-2011” indicates that the profit source and revenue structure of trust companies become more proper, the trust business is enhanced progressively and the sustainable profit-making mode tends to be mature and stable. Besides some short-term investment, the long-term shareholding investment of trust companies in some financial institutions also plays an increasingly important role, generating good and stable returns for trust companies.
After the reform of the trust industry in 2007, the position and market value of trust companies are gradually recognized by the society. Domestic and overseas strategic investors’ inclination to invest in trust companies is enhanced obviously. By the end of 2009, seven foreign-funded financial institutions and a group of domestic notable enterprises (e.g. COFCO, China Huaneng Group, CNPC, Bank of Communications and China Construction Bank) became shareholders of trust companies. In 2008, during the outbreak of the global financial crisis and the slump of the domestic capital market, such financial institutions as securities companies, fund companies and banks all suffered criticisms on their financial products. In comparison, trust companies were under stable operation with their products being widely favored.
With the return to main business and the implementation of new rules on trust, the bond function of Chinese trust companies connecting the industrial market, money market and capital market will be fully displayed. This will enable the trust industry to acquire better development prospects. The status of the trust industry in the national economy will be further raised.
In 2009, 49 trust companies in China issued 1,172 assembled trust products and the establishment scale was about CNY 131.26 billion. The total scale of Top 10 companies was CNY 71.01 billion, accounting for 55.3% of the total scale of all trust companies. This reflects the high concentration of the industry. However, the CR10 dropped by 12% compared with the 67.31% in 2008.
In 2009, M&A events occurred frequently in Chinese trust industry. Large institutions tried to be the first to carry out the M&A in the industry. In previous three quarters of 2010, the operating revenue of Chinese trust industry amounted to CNY 10.94 billion. Among that, the interest balance was CNY 1.53 billion, accounting for 14% of the total revenue; the trust business revenue came to CNY 5.83 billion, taking up 53.3% of the total; the investment revenue was CNY 3.12 billion, taking up 28.5% of the total revenue. The scale of trust assets was CNY 2,957 billion and the profit was CNY 7.60 billion.
Though Chinese trust industry only has a history of three decades, it has experienced six governmental regulations. The volume of trust companies in China has been reduced from over 1,000 in the peak period to over 50 in 2010. With the execution of the sixth rectification, the polarization in Chinese trust industry will become more prominent. Strong trust companies will become stronger while weak ones will be confronted with the risk of elimination.
With the implementation of new policies on trust in 2007, the competition situation among trust companies in China experienced great changes: some large competitive trust companies directly changed new license plates and began to operate multiple innovation businesses of high added-value; however, most local companies and some companies in the transitional period due to various problems were faced with declining market shares and even the risk of elimination. With the operation of cross-regional business and the expectation of policy permission for trust companies to establish cross-regional branches, the trend of “the strong get stronger and the weak get weaker” in the trust industry is likely to be intensified.
On the whole, the concentration ratio of Chinese trust industry will be further improved after the reorganization. With the incessant growth of the market demand, competitive enterprises will achieve explosive growth in their scale and business. By contrast, companies with weak capital strength will be forced to exit the market or merged by strong companies. This can be demonstrated by the frequent asset reorganization in Chinese trust industry in 2009-2010.
In the present financial system of China, trust company is the only financial institution that can span the monetary, capital and direct investment markets. Trust companies have complete investment channels and flexible institutions that commercial banks, securities companies and fund management companies do not possess. Judging from the future demand, Chinese trust industry has bright development prospects. However, the trust industry is after all on the threshold in China, so it is still faced with high risks.
Through “Research Report on Chinese Trust Industry, 2010-2011”, readers can acquire more information:
-Status quo of Chinese trust industry
-Economic and policy environment faced by Chinese trust industry
-Competition in Chinese trust industry
-Development of Chinese trust industry by region
-Analysis of major enterprises in Chinese trust industry
-Development of major trust products in China
-Factors affecting the development of Chinese trust industry
-Prediction on development of Chinese trust industry
-Prediction on investment opportunities in Chinese trust industry
To get more, please go to http://www.shcri.com/reportdetail.asp?id=489
www.shcri.com
