Safe-Haven Appeal Rising as Traders Flee Risk

By ForexYard

A short series of data released yesterday painted a weaker picture for the global economy’s growth. Weekly unemployment claims in the US saw a worse than forecast rise, hitting 408,000 for the past week. A housing report showed growing sluggishness in mortgage lending growth and the Philly Fed Manufacturing Index dropped from last month’s reading. British retail sales came in below forecasts and Canada’s Leading Index appears to have dropped since July’s reading. So far this news has helped drive the USD, JPY and CHF higher as traders flee risk.

Economic News

USD – US Dollar Gains from Risk-Off Trading

The US dollar was seen trading moderately higher yesterday as traders began to reevaluate the recent dip in stock values. The EUR/USD was seen meeting resistance near 1.4500 yesterday and flopping towards 1.4400 in late trading. The greenback saw similar movements against most other currency pairs as well.

A short series of data released yesterday painted a weaker picture for the US economy’s growth. Weekly unemployment claims saw a worse than forecast rise, hitting 408,000 for the past week. A housing report showed growing sluggishness in mortgage lending growth and the Philly Fed Manufacturing Index dropped from last month’s reading. So far this news has helped drive the USD higher as traders flee risk.

With a relatively lighter news day expected Friday, dollar traders should be anticipating some mild currency movements brought about by average end-of-week liquidity. The economic calendar will be lacking in specific focus with several reports coming from Canada, Great Britain, Japan and the euro zone. The US economy is less in focus, though the safe haven appeal of the greenback is likely to be a point of commentary as this week comes to an end.

EUR – EUR Tracks Declining Stocks

The euro was seen trading lower yesterday in light of data releases suggesting stagnation in Germany. The lackluster performance of global stocks also drove many regional investors away from the EUR despite the relative potential is has for making gains should more investment flee the United States.

While growth variances between the US and Europe came into view this past week, the higher yielding assets like the GBP and EUR appeared positioned to lose as traders turned away from risk. The growth in risk aversion may have many investors choosing to store their value in lower yielding currencies, like the USD and JPY as the week comes to a close, though investments in US Treasuries contradict the idea behind the recent ratings downgrade by S&P, which is now rumored to be under investigation by the US Department of Justice for the role it played in the mortgage crisis of 2007/08.

As for Friday, the euro looks to be anticipating an evaluation of its recent downturn against the other major currencies with mild bias further leaning to the downside. The euro zone will be publishing few economic events on today’s calendar, though. Traders should try and follow the significant publications emanating from Canada and Great Britain economies today as a mild string of significant reports are expected from both.

JPY – JPY Seen in Ascent as Traders Seek Store of Value

The Japanese yen (JPY) was seen trading higher versus most other currencies this week after news began to shift many traders back into safe-haven assets. The yen has been a top performer these past several months considering many traders bank on the Japanese carry trade during times of intense risk appetite and move towards the JPY in times of risk aversion, making it an appealing currency in these recent times of ominous debt talks.

The JPY was in a position to make solid gains yesterday after debt auctions in Italy moved many investors away from the euro zone and into safer assets. Moves toward riskier currencies halted as pessimism took hold and drove much of yesterday’s trading liquidity towards traditional stores of value. As such, traders appear to be anticipating an uptick in the JPY prior to this week’s close.

Oil – Oil Price Plummets to $81.50 a Barrel

Crude Oil prices sunk rapidly yesterday, reaching near $81.50 in late trading. Growth differentials between the Atlantic states have risen into view this week while manufacturing output and service data revealed growing weakness in Europe. This has so far led several large investors and analysts to consider a shift away from the EUR and other risky assets in exchange for the safety of the USD and JPY, despite the inherent weakness growing in the American economy due to the recent ratings downgrade.

As investors sought safety, the value of crude oil, which has been seen holding steady through most of the week, suddenly began falling towards $81.50 a barrel. A boom in dollar values due to this week’s risk sensitive environment has helped many investors move hesitantly into assets like gold and silver, with crude oil also appearing to get touched by this sentiment. Oil prices appear to have reached the decision point alluded to all week, with a strong bearish sentiment taking hold.

Technical News

EUR/USD

Despite the increased volatility the EUR/USD continues to trade in a defined range between 1.4400 and 1.4050. Falling monthly stochastics suggest any approaches to the 1.4400-1.4500 levels may be sold into. Initial resistance comes in at last week’s high of 1.4400 followed by the falling resistance line from the May high at 1.4450. A close above 1.4700 would signal an end to the range trading environment. To the downside support is found at 1.4050 followed by the 200-day moving average at 1.3945 and the rising trend line from June 2010 at 1.3875.

GBP/USD

Last week’s declines found support near the previously broken trend line from the April high and the pair looks to move higher. Resistance comes in at 1.6475; a level sterling has failed to breach three times. A move above here and the technical picture would likely turn bullish with further resistance at 1.6550 and 1.6745. The 200-day moving average at 1.6090 could keep any declines in check with further support at 1.6000 and 1.5935.

USD/JPY

The yen has made two attempts to break through the all-time low that was set in mid-March near 76.25. Rising stochastics on the daily and weekly charts point to potential gains in the pair but short term momentum studies look to have more room to fall before the pressure is relieved. Therefore, a break of 76.25 is favored. After this level there is a lack of support on the monthly chart. To the upside initial resistance is found at last week’s high of 78.50 followed by the post intervention high of 80.20.

USD/CHF

In an amazing run the USD/CHF has gone from a complete free-fall to trade above its 20-day moving average, a level the pair has not seen since early July. After gapping above its initial resistance at 0.7800 the pair could run into resistance at 0.8080 which is also near the 38% retracement from the February high, followed by the trend line that falls off of the February high at 0.8200. This may provide traders better reentry levels into the long term downtrend of the pair. A further resistance level is found out at 0.8550.

The Wild Card

NZD/USD

After a sharp pullback in the value of the pair the NZD/USD broke below the trend line running from the March and July lows. As many times occurs after a trend line is breached the pair made a move higher only to find resistance at the old trend line. Forex traders should note that an increase in risk sentiment and the NZD/USD will be one of the first assets to rise. However, bias remains to the downside. The previous trend line will serve as initial resistance at 0.8340 followed by the August 1st high of 0.8840. Support is found at 0.7960. The 0.7750 level could be targeted as the support level coincides with the 61% Fibonacci retracement level.

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.

USD/JPY Looking Heavy At Key Support

USD/JPY is at present situated above the 2011 lows and feeling just like there might be an extension of the major down trend; this is dependent on a continued break of 76.00 transpiring.

Forex traders will nonetheless be suspicious of intervention at these kind of levels and that should be thought about in any analysis. A combination of the Fe100 expansion shown on the included chart when combined with the key round number 75.00 offers a prospective target if a breakout through the recent range, towards the downside, will come to be.

Further Forex News and Forex Analysis 

 

yen dollar

 

Gradual Recovery and Growth of Chinese Textile Industry, 2010-2011

By China Research and Intelligence

www.shcri.com – China is the world leading country for the textile production and export. With over years’ development, Chinese textile industry has been equipped with superior competition advantages – the most complete industry chain and the highest processing and OEM level in the world. Moreover, those developed industry clusters have intensified their risk-resistance capacity, guaranteeing the stable development of this industry.

Since 2009, Chinese government has implemented a series of macroeconomic policies, which has also encouraged the development of Chinese textile industry. Since 2009, Chinese textile industry is also under gradual recovery. In recent years, Chinese textile industry makes vigorous efforts to accelerate the adjustment of the industrial structure and the transformation of the development mode, enhancing the internal development motivation of this industry. Despite the global depressed economy and market, Chinese textile industry manages to grow steadily.

In the previous eleven months of 2009, the main business revenue and aggregate profits of Chinese textile industry totaled CNY 2.01 trillion and CNY 77.72 billion, growing by 10.32% YOY and 17.75% YOY respectively.

With the acceleration in the marketization process of Chinese textile industry, the market is playing an increasingly important fundamental role in the resource allocation. This is favorable for the improvement in the enterprise organizational structure and the industrial layout, leading to the concentration in large enterprises, coastal areas and industry clusters. East China is still the major area for Chinese textile industry. Over 80% textile enterprises above the designated scale concentrate in Jiangsu, Zhejiang, Guangdong, Shanghai and Shandong with 73% employees, 82% sales output value, 88% export delivery value and over 90% foreign investments and capitals from Hong Kong, Macau and Taiwan. Small and medium private enterprises dominate the county and town markets while industry clusters and specialized towns with certain characteristics are under development.

According to the Adjustment and Revitalization Plan of Textile Industry released by China’s State Council on Apr. 24th, 2009, there are eight adjustment and revitalization tasks for Chinese textile industry in 2009-2011: stabilize the domestic and foreign markets; improve the independent innovation capacity; speed up the technical reconstruction; eliminate the outdated production capacity; optimize the regional layout; perfect the public service system; accelerate the construction of independent brands; enhance the competence of enterprises. The Plan places great significance on building China into a strong textile country and helping the textile industry to live through the financial crisis. Specially, it will encourage the structure adjustment and industrial upgrading of Chinese textile industry.
To get more details, please go to
http://www.shcri.com/reportdetail.asp?id=381
http://www.shcri.com/reportdetail.asp?id=319

Contacts:
www.shcri.com
Tel: 86-21-6150-9706
About the Author

China Research and Intelligence

Benefit Greatly by Trading Live in Share market

Article by Ruhi

At the beginning of a typical day, an Indian trader or Investor is expected to go through all those small and major events that will or can have an impact on the stock market of India, primarily National Stock Exchange (NSE) and Bombay Stock Exchange (BSE), when these stock exchanges open for trading. in addition, the trader and/or investor will also carefully listen and take heed of the relevant opinions of technical analysts appearing on various radio and TV channels and of the tips provided by their favourite financial advisors via the online channels, over phone, or via SMSs. From all this, we can easily infer how important the live share market.
As for any average individual, in most of the cases he/she is not expected to start investing as a source of earning. This holds in spite of the fact that share market live investment is one of the safest ways of consistent earning, no matter how the financial climate is. Generally, investments are planned on the basis of the anticipations regarding the economic highs & lows, with several strategies present that minimize the associated risks.

For investing successfully, you need to keep a close tab on the movements in Indian and other required countries’ stock markets. Live charts enable you to be in the know of almost all the hot share market news and give you a decent idea on whether you should think of investing in the share markets or not. Live charts of the stock movements can easily be watched both on websites and television. Apart from that, you can carry out activities such as:

– Track as well as analyze the live stock graphs listed in the Indian stock exchanges as much possible. It is recommended to note the opening price of top 3 stocks. Additionally, check the opening of stock exchanges, where green is meant for indicating positive opening and red is for signifying negative opening.
– If share market gets a negative opening and if this market starts to work against the brokerage recommendations, then you are required to ignore those very stocks.

These are just few of the basic methods for ensuring profit booking. However, success is also a function of various other factors including festival occasions, disaster news and political news. Again with experience, you will eventually be in a position to analyze market in a better manner that would further result in better profit booking.

In the present day, the best way of trading or investing is doing it online. Thanks to emergence of internet and various feat achieved in the field of mobile communications, investors and traders are not provided with comprehensive real-time information, again resulting in taking sound investment decisions.

About the Author

share market live

Still Buying and Holding Stocks? Read This…

Over the past few weeks, we’ve been giving you strategies to deal with a turbulent market. But that doesn’t mean investors aren’t still buying and holding stocks for the long term.

If you’re one of these investors, then this article is for you, from a guy who knows the stakes…

Derek Simon is a longtime market observer and an expert on investment statistics and analysis. His work has appeared in Forbes, as well as on Motley Fool, Investopedia and a variety of other business and sports gambling websites and magazines, including CBS Sports and ESPN.com.

The real winners in the buy-and-hold market are numbers guys… not the “all in” hopefuls who pin their financial futures on a single stock.

Derek shows you what to watch out for with three simple rules for the stock market.

To prove his point, Derek tells you the tragic story of a biotech juggernaut that lost $3.7 billion in value in a single day that had nothing to do with the volatility of the stock market.

This is a must-read for investors still buying and holding stocks…

How to Avoid Sinking in the Stock Market

Two weeks ago, a funny thing happened on Wall Street, yet no one laughed — at least no one who held shares in Dendreon Corporation (DNDN:NASDAQ).

That’s because, on Aug. 4, the Seattle-based drugmaker saw its share price disintegrate quicker than the plot of a Michael Bay movie. On that Thursday, Dendreon went from $35.84 to $11.69 by market close — a whopping 67.4% decline.

This equity meltdown (in excess of $3.7 billion) was triggered when Dendreon officials announced, in an after-hours earnings conference, that the company was withdrawing its earlier optimistic sales forecast for Provenge, a drug designed to treat prostate cancer.

“For the remainder of 2011, the launch trajectory will reflect a more gradual adoption of Provenge as physicians gain confidence in this positive reimbursement landscape,” said Dendreon President and CEO Dr. Mitchell Gold in a statement.

That’s not what was funny — although the phrase “positive reimbursement landscape,” referring to the decision last month by Medicare and Medicaid to pay for the drug, did bring a smile to my face.

What was funny was the way Wall Street “experts” responded to the Dendreon price plunge.

“I took my Dendreon model to the woodshed by cutting my peak Provenge sales estimates by more than 50 percent,” ISI Group analyst Mark Schoenebaum said in a research note reported by Reuters.

Baird Equity Research analyst Christopher Raymond was even more aggressive, as he cut his rating on DNDN to “neutral” from “outperform” and “slashed his price target to $20 from $56.”

Man, I can’t wait for these guys to weigh in on the 1929 stock market crash or, perhaps in a month or two, the ’87 crash.

I mean, seriously, what good are any of these amended forecasts after the damage has already been done? It’s like cranking up the warning sirens after the tornado has already leveled the town.

Dendreon opened at $12.73 on Thursday, down $23.11 from Wednesday’s close, so absolutely nobody benefited from the analysts’ revised projections.

But the laughs kept coming…

In a related Bloomberg piece, the aforementioned Raymond said that “We still believe in Provenge long term, but shorter-term, prefer to watch the real trajectory on the sidelines.”

Huh? You just cut your price target by 64%, from $56 to $20, Mr. Raymond. If that represents belief in Provenge long term, I shudder to think what would have happened had you lost faith in the drug altogether. Can a stock target be negative?

And what exactly does watching the “real trajectory on the sidelines” entail?

Can investors expect a thumbs-up from Baird once the “positive reimbursement landscape” Dendreon’s CEO is waiting for materializes? Or is the plan to wait for DNDN to start trading in the mid-$30 range again before the “buy” signal is given?

Look, I’m not trying to be snarky, nor is it my intention to poke fun at Raymond or other financial analysts and pundits. The point here is that, far too often, the talking heads on Wall Street are a day late and many dollars short in regard to their forecasts.

Were there signs that Dendreon was in trouble even before its day of infamy? Absolutely. And, in fact, the company provides some great examples of what to avoid — or at least consider avoiding — when investing in the stock market:

  • Be wary of companies that rely on (or are heavily banking on) the success of a single, unproven revenue stream.

For almost 23 months — from June 1, 2007, to April 13, 2009 — Dendreon’s highest closing price never topped $10.

All that changed, however, when the company told us Provenge passed a “512-patient, multi-center, randomized, double-blind, placebo-controlled IMPACT (IMmunotherapy for Prostate AdenoCarcinoma Treatment) study” with flying colors.

From May of ’09 until the implosion two weeks ago, Dendreon always traded above $19 per share, despite the fact that the company was bleeding money. From FY 2008 to FY 2010, Dendreon’s losses increased sixfold — while the stock rose in value by 460%.

  • Let a stock’s past be a guide to its future.

Yeah, I know, this seems obvious, but remember: We live in a culture that believes historical perspective implies only a (faint) recollection of what happened within the last day or two.

The truth is Dendreon proved to be a very volatile company ever since it went public in 2000.

In fact, from 2001 until Aug. 12 of this year, DNDN posted one-day losses of 18% or greater nine times, or nearly once a year. During that same time period, Microsoft (MSFT:NASDAQ), an obviously more established company with a positive income stream, had no such poor trading days (an 11.7% drop on Jan. 22, 2009, marked MSFT’s worst single-day performance).

Incidentally, most of Dendreon’s equity slides coincided with bad news (real or perceived) about Provenge (see point one).

  • Beware of a stock that responds to a significant spike in volume by recording a lower intraday low than the day before.

This often indicates selling pressure, especially when it is repeated — as was the case with Dendreon for nearly two months prior to its Aug. 4 collapse.

 

Dendreon’s volume shot up by 30% or more on consecutive trading days 12 times from June 6 to Aug. 3 — and 10 (83%) times, the low was less than it was the previous day.

What’s more, on the Wednesday before the big sell-off, DNDN volume (4.5 million shares) reached its highest level since July 1 (5.4 million shares) and the stock dipped to $33.65, its lowest price in over four months.

Given that DNDN closed at $35.84 that day, an observant investor could have sold his/her holdings and avoided all the pain that was to follow.

Of course, it goes without saying — although I will anyway — that the bullet points above are not harbingers of doom and empty wallets in every instance.

Investing in biotech stocks like Dendreon is, has been, and always will be risky. Understanding that risk is crucial.

Sometimes market conditions warrant a more aggressive investment approach; sometimes they do not. Sometimes it pays to employ a buy-and-hold strategy, while sometimes it’s best to simply sit on the sidelines… and watch trajectories.

Written by Derek Simon 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 or www.taipanpublishinggroup.com.