Month: September 2011

Sept. 23 (Bloomberg) — David McAlvany, chief executive officer of McAlvany Financial Group, talks about the outlook for commodities and the price of gold. He speaks with Owen Thomas on Bloomberg Television’s “Countdown.”

Video courtesy of ForexCT – A leading Australian forex broker, liscensed by the Australian Securities & Investments Commission, offers the MetaTrader4 and PROfit Platform to retail traders. Other services include Segregated Accounts, Trading workshops, Tutorials, and Commodities trading.

Video courtesy of ForexCT – A leading Australian forex broker, liscensed by the Australian Securities & Investments Commission, offers the MetaTrader4 and PROfit Platform to retail traders. Other services include Segregated Accounts, Trading workshops, Tutorials, and Commodities trading.

By ForexYard

The U.S. dollar gained further against the euro and other major currencies Thursday as a sharp extended retreat for U.S. equities and weak data out of both China and the euro zone spurred investors to dump risky assets.

Economic News

USD – Dollar Recovery Continues

The dollar rallied broadly on Thursday as mounting concerns about the global economy pushed investors to embrace safety while shunning riskier assets, with the euro tumbling to an eight-month low. By yesterday’s close, the dollar rose against the EUR, pushing the oft-traded currency pair to 1.3440. The dollar experienced similar behavior against the GBP and closed at 1.5350.
The U.S. Federal Reserve said Wednesday it will shift its portfolio toward longer-term debt to bolster the economy, and investors’ unwound leveraged positions funded in dollars in response. The Fed’s program was intended to put more downward pressure on long-term interest rates. One important dollar-positive by-product of the Fed’s program is higher short-term rates. The Fed’s not increasing the money supply supported the dollar.
As for today, the calendar is lacking any major economic data releases for today’s trading. As such, traders will want to follow the movements of the major equity indices as the dollar has recently been trading in an inverse relationship to equities. Weakness in stocks could propel the EUR/USD to its next support line which rests at 1.3200.

EUR – EUR Falls to 8 Month Low

The euro fell to a fresh eight month low against the dollar on Thursday a day after the Federal Reserve pointed to significant downside risks for the U.S. economy and stopped short of bold monetary easing. By yesterday’s close, the EUR fell against the USD, pushing the oft-traded currency pair to 1.3440. The EUR experienced similar behavior against the JPY and closed at 103.00. The 16 nation currency did see some bullishness as well as it gained over 30 points against the GBP and closed at 0.8770.
Analysts questioned whether the move the Fed did make — shifting its portfolio toward longer-term debt would bolster the economy and unwound leveraged positions funded in dollars in response.
Investors may look for the unusual price volatility to continue in the EUR/USD as the pair attempts to stabilize and find new support and resistance lines. Large price jumps such as these are not common place and present terrific opportunities to take advantage of the price swings for large profitable gains.

JPY – Yen Gains against Most Major Currency Counterparts

The Yen experienced a bullish trading session yesterday, as it appreciated against most of its major currency pairs. The JPY extended gains versus the EUR during yesterday trading session and closed at 103.00. The Japanese yen also saw bullishness against the USD as it jumped around 50 pips and closed at 76.30.
The JPY’s trends will be affected by the rallies of its primary currency pairs today. It seems that the USD and EUR are expected to continue a volatile trading session today, especially against the Japanese currency. Traders should keep a close look on the news coming from the U.S. and Europe as these economies will be the deciding factors in the JPY’s movement today. It is also advisable for traders to follow any unexpected comments coming from key Japanese governmental figures, as this is also likely to lead to further JPY volatility.

Crude Oil – Crude Oil Sinks below $80 a Barrel

Crude oil prices fell more than 4% to 79.80 on Thursday as equity markets in Europe and Asia tumbled after the US Federal Reserve said the economic outlook remained grim, which overshadowed an unexpectedly steep drop in crude supplies in the world’s top oil consumer.
Oil prices had risen in earlier trade after government data showed US crude inventories last week dropped 7.3 million barrels, the biggest one-week drop since December, suggesting supplies were tighter than expected.
But the market turned bearish after the Fed said it would extend the maturity of its treasury holdings but didn’t unveil more aggressive measures to boost a US economy it said faces “significant downside risks”.

Technical News

EUR/USD

The EUR/USD has gone increasingly bearish in the past 2 days, and currently stands at the 1.3490 level. The daily chart’s Slow Stochastic supports this currency cross to fall further today. However, the 8-hour chart’s Stochastic Slow signals that a bullish reversal will take place today. Entering the pair when the signs are clearer seems to be the wise choice today.

GBP/USD

The price of this pair appears to be floating in the over-sold territory on the daily chart’s RSI indicating an upward correction may be imminent. The upward direction on the 8-hour chart’s Momentum oscillator also supports this notion. When the upwards breach occurs, going long with tight stops appears to be preferable strategy.

USD/JPY

The pair has been range-trading for a while now, with no specific direction. The Daily chart’s Slow Stochastic providing us with mixed signals. All oscillators on the 4 hour chart do not provide a clear direction as well. Waiting for a clearer sign on the hourlies might be a good strategy today.

USD/CHF

The pair has recorded much bullish behavior in the past several days. However, the technical data indicates that this trend may reverse anytime soon. For example, the daily chart’s Stochastic Slow signals that a bearish reversal is imminent. . Going short with tight stops might be a wise choice.

The Wild Card

Crude Oil

Crude oil prices are once again dropping, and it is currently traded around $80.40 per barrel. And now, the 8-hour chart’s RSI is giving bullish signals, indicating that crude oil prices might go up. This might give forex traders a great opportunity to enter a very popular trend.

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.

EURUSD broke below 1.3499 support and reached as low as 1.3386. Further decline would likely be seen in next several days, and next target would be at 1.3200 area. Resistance is at 1.3600, only break above this level could indicate that a cycle bottom has been formed at 1.3386 on 4-hour chart, and lengthier consolidation of downtrend from 1.4548 is underway, then further rally could be seen to 1.3800 zone.

Daily Forex Forecast

EWI’s Jeffrey Kennedy shows you how your psychological strengths and weaknesses determine your ability to “live long and prosper” in fast-moving markets

By Elliott Wave International

Do your decisions rely on data, or do you go with your gut?

Think about your most recent auto purchase. Was it based on meticulous consumer research or did you go with a model that “felt right”?

How about the last time you had to assemble something? Did you read the manual first or just figure it out as you went?

What about your most recent successful stock market trade?

Consistent trading success demands independent thinking and emotional discipline.

Jeffrey Kennedy, our Chief Commodity Analyst and highly-respected tutorial instructor, says:

I just cannot stress enough how you have to manage your emotions whenever you’re on [a] position.

Field dependence can sabotage you unknowingly when you’re trading, because you’ll see a trade signal, the trade will be there, but “it just won’t feel right.”

[It’s] one of those things that can sabotage us if we’re not aware of it, or, more importantly, [don’t] have a well-defined methodology and the discipline to follow it.

In footage from his trading course in Las Vegas, he goes on to discuss the psychological profile that makes “the best trader:”

Learn more about managing your emotions, developing your trading methodology, and the importance of discipline in your trading decisions in The Best of Trader’s Classroom, a FREE 45-page eBook from Elliott Wave International. Since 1999, Jeffrey Kennedy has produced dozens of Trader’s Classroom lessons exclusively for his subscribers. Now you can get “the best of the best” in these 14 lessons that offer the most critical information every trader should know. Find out why traders fail, the three phases of a trader’s education, and how to make yourself a better trader with lessons on the Wave Principle, bar patterns, Fibonacci sequences, and more! Don’t miss your chance to improve your trading.

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Written by Steven Orlowski, Editor, Safe Haven Investor, taipanpublishinggroup.com

Back in the late 1990s, right before I joined Giant Mutual Fund Company (GMFC), I worked for a large brokerage firm.

It was the tail end of the “good old days.”

Back then, wholesalers would regularly visit branch offices of brokerage firms to convince brokers to sell their products — usually mutual funds.

They’d come armed with the legal essentials… prospectuses and brochures. But the way they really tried to convince us was by handing out free stuff like T-shirts, golf balls and umbrellas. And the kicker: They’d take the office out for dinner and drinks.

This behavior is largely outlawed today, but back then it sure made wholesaling look like a great job.

One such visitor brought with him a book, an unusual item to hand out. This was a rarity especially because the book wasn’t written by the wholesaler nor was it published by his employer.

The book was The Pig and the Python by David Cork. The thesis of the book made a lasting impression on me.

The idea was simple.

The baby-boomer generation was like the body of a pig swallowed whole by a python. The snake represented a timeline for the journey of baby boomers from birth to death.

The generation was so large that, like a pig in a python, it created a large bulge in the python. It was a proxy for the economy and everything the boomers would need, want or innovate through their lifespan.

The book referenced specific instances of influence such as how in the 1950s the baby boomers’ large population was a boon to the diaper and baby food industries… In the ’60s and ’70s the baby boomers altered the trajectory of college education… In the ’70s and ’80s the housing markets were affected.

And let’s not forget the stock market.

The baby-boomer generation spans the post-World War II period from 1946 to 1964. The stock market had a “boom” in the aftermath of WWII. But starting in 1966 it fell into a slump that lasted 16 years.

During this period an investor in domestic large-cap stocks, the Dow 30 or the S&P 500, suffered through many significant up-and-down gyrations but made no lasting money.

By 1982 the indexes were at the same levels they started at in 1966.

But by 1980 the first baby boomers were entering their peak earning years. A boomer born in 1950 turned 30 in 1980.

A mix of factors kicked off what became known as the “Great Bull Market,” the period from 1982 to 2000. The baby boomers were socking away money in IRAs and 401(k)s and investing in the stock market through mutual funds in a way never before seen.

The stock market in the United States returned nearly 17% per year during this period — it lulled a generation of investors into a trap known as “buy and hold.”

I’ve held on to The Pig and the Python, and although I haven’t read it through since 1998 I keep it around as a reminder of what’s to come: Those boomers who in 1980 were entering their peak earning years are now retiring.

And what do most investors do when they get older and close to retirement? They sell their stocks.

By 2000 the eldest baby boomers were in their early 50s and planning for retirement. They made adjustments to their portfolios.

In March of 2000 we saw the end of the Great Bull Market. The S&P 500 peaked at an intraday high of 1,553.11 and then crashed, losing more than 50% of its value by its October 2002 low.

Of course this was not entirely due to the boomers. Tech stock valuations were ridiculous at the time. But the boomers certainly played a part.

Our government did its best to reinflate that stock market bubble and succeeded in creating a bigger and more devastating bubble — real estate.

By October 2007 the S&P 500 peaked intraday at 1,576.09 and then crashed once again, falling almost 60% to the intraday low of 666.79 on March 9, 2009.

The stock market has recovered much of its losses, but many commentators are now calling for another crash.

Some say a crash that could bring the Dow as low as 3,000. That would be a loss of 75% from today.

I won’t make such a prediction, but a quick glance at the S&P 500 chart below suggests another 40% or greater decline is within the realm of possibility.

I know boomers have been pulling money from the stock market… They are my clients and they are worried.

Many haven’t regained losses sustained 10 years ago. The second collapse did nothing to improve confidence. Another would destroy it.

Meanwhile, GMFC and its competitors continue to tell investors, “Hang in there. The market always goes up over time.”

Do you want to know a secret?

GMFC bases part of its profit projections on how the S&P performs each year. That means if the S&P is higher, the company makes more money.

And, by the way, your friendly financial adviser at GMFC gets a bigger bonus thanks to higher profitability.

Not only is he not allowed to tell you the market is going to crash… he’s paid not to.

Did you ever wonder why the asset allocation models GMFC and its competitors use are always overweighted to domestic large-cap stocks even though foreign markets and especially emerging markets have outperformed domestic stocks for more than a decade?

In one sense we can thank GMFC for not telling all of its investors to sell. If they had, the markets would have gone down a heck of a lot more than they did in 2000 and 2007. But on the flip side you’ll never be told when to get out.

This is what I call a “Generational Shift.”

The pig is nearing the end of the python. It’s almost completely digested.

It’s not over yet, thankfully for the boomers; however, the pig is changing shape. And as this process continues, we won’t know exactly what it’s going to look like until it happens.

What I know is that the future will be different than the past and in the pages of Safe Haven Investor I will do my best to let you know what the best moves are.

Until next time…

Publisher’s Note: Have you heard of Government Document RL34443? It’s a “one-letter law” that just triggered phase one of the retirement crisis. Thanks to this little-understood rule, 78 million baby boomers are likely headed toward a financial trap.

Discover what happens next as the past 37 years of deception comes to its wealth-annihilating climax in Safe Haven Investor’s latest special alert.

Article brought to you by Taipan Publishing Group. Additional valuable content can be syndicated via our News RSS feed.

By Harjeet

The global meltdown of 2008 hardly had any effect on India, while the entire world was reeling under the recession effect. It was India which presented itself as a shining example to other nations, on ways to come out of crises successfully and prosper simultaneously. This attitude has helped open up investment options for the people at home and also abroad. The government has also come up with better investment options for the NRIs as well. The investment trends guides in putting our hard earned money to profitable use.

Investment options in India: the best investment option right now, is in the real estate sector. While in 2009, it was the stock market, in terms of investment to reap rich dividends. The real estate sector is extremely profitable venture, as the profits of investors have almost doubled or have derived 100% profits in the residential segment. The commercial real estate sector is another lucrative option for investment as their prices have risen over the years only substantially and there is always the likelihood of steep increase in prices in this sector. Many banks have increased their deposit rates, for senior citizens up to 9%; this is one of the safest forms of investment in India. In spite of inflation, India has emerged as the topmost destination for investment.

Investment trends: The investment trends relates to investing wisely so as to attain a better state of financial security. Therefore, investment trends are more about investing safely such as in gold, which is on the rise and is invaluable. NSC (National Savings Certificate) and PPF (Public Provident Fund) are another form of safe and secure investment. Life Insurance offers another secure investment.

Investment options for NRIs: The investment options for NRIs are plenty, be it mutual funds, bank deposits, real estate or life insurance. It is seen how majority of the NRIs wishes to invest in India and they are also responsible for the FDIs through continuous transfer of cash flow, one of the vital fact in India’s growth. They do so through the money they send to their relatives, parents and dear ones for investment. The government has also been flexible in providing business opportunities to the NRIs through tax subsidies and hassle free legalities. The government also organizes a summit exclusively for the NRIs, exhibiting a wide range of business opportunities for the NRIs. NRIs can also invest in insurance policies without any limit to the policy cover and also they have the option of paying their premium in foreign currency. The real estate sector offers a sound investment option for the NRIs as there is not the need to seek permission from the RBI to invest in it. Also investing in gold is another potential option.

So, we see how a booming Indian economy has raised the economic standards in the whole world, which makes it the most prospective capital market to do business and prosper significantly.

About the Author

Harjeet is an Indian – born mass-market novelist, who covers the world internet related topics . He writes columns and articles for various websites and internet journals in the domain of Investing in India and Investment options.

Sept. 22 (Bloomberg) — Michael McGlone, senior director of commodity indexing at Standard & Poor’s, talks about metal and oil prices and their correlation to the performance of the S&P 500 Index. He speaks with Owen Thomas on Bloomberg Television’s “Countdown.”

Sept. 22 (Bloomberg) — Ajay Kapur, head of Asian equity strategy at Deutsche Bank AG, talks about Federal Reserve monetary policy, its impact on Asian equity markets and investment strategy. Kapur speaks with Rishaad Salamat on Bloomberg Television’s “On the Move Asia.” (Source: Bloomberg)