Friday, April 24, 2009
Gold Daily Technical Outlook
Written by Oil N' Gold | Fri Apr 24 09 06:48 ET
Comex Gold (GC)
Gold's break of 902.1 resistance suggests that fall from 967.8, as well as correction from 1007.7 has completed earlier than we thought at 865. At this point, further rally should be seen towards 967.8 resistance for confirmation. On the downside, however, below 879.50 will in turn argue that such correction from 1007. is still in progress for 801.50 cluster support before completion.
In the bigger picture, as mentioned before, we believe that medium term consolidation from 1033.9 has completed in form of expanding triangle at 681. Rise from there is tentatively treated as resumption of the long term up trend. Fall from 1007.7 is just correcting rise from 681 and should conclude above 801.5 cluster support (61.8% retracement of 681 to 1007.7 at 805.8 ). Above 967.8 will indicate that such correction has completed and should then bring retest of 1007.7/1033.9 resistance zone.
However, note that sustained break of 801.50 cluster support will dampen the above preferred view. This will suggest that rise from 681 is not resuming the long term up trend but is merely part of the consolidation from 1033.9. In other words, fall from 1007.7 is part of the consolidation too and could then target 681 low before completion.
Comex Gold (GC)
Gold's break of 902.1 resistance suggests that fall from 967.8, as well as correction from 1007.7 has completed earlier than we thought at 865. At this point, further rally should be seen towards 967.8 resistance for confirmation. On the downside, however, below 879.50 will in turn argue that such correction from 1007. is still in progress for 801.50 cluster support before completion.
In the bigger picture, as mentioned before, we believe that medium term consolidation from 1033.9 has completed in form of expanding triangle at 681. Rise from there is tentatively treated as resumption of the long term up trend. Fall from 1007.7 is just correcting rise from 681 and should conclude above 801.5 cluster support (61.8% retracement of 681 to 1007.7 at 805.8 ). Above 967.8 will indicate that such correction has completed and should then bring retest of 1007.7/1033.9 resistance zone.
However, note that sustained break of 801.50 cluster support will dampen the above preferred view. This will suggest that rise from 681 is not resuming the long term up trend but is merely part of the consolidation from 1033.9. In other words, fall from 1007.7 is part of the consolidation too and could then target 681 low before completion.
Crude Oil Daily Technical Outlook
Written by Oil N' Gold | Fri Apr 2
Nymex Crude Oil (CL)
Crude oil's recovery is still in progress and at this point, intraday bias remains on the upside as long as 47.70 minor support holds. Based on the corrective look of the price actions from 54.66, break of 51.37 resistance will suggest that such consolidation has completed and recent rally could be resumption. Break of 54.66 high will confirm the bullish case. However, below 47.7 will flip intraday bias back to the downside and suggest that fall from 54.66 is still in progress for 61.8% retracement of 33.55 to 54.66 at 41.66.
In the bigger picture, the bullish case looks shaky with daily MACD staying below signal line. But after all, with 41.66 fibo support intact, we're still mildly favoring the case that a medium term bottom is in place at 33.55. Break of 54.66 will confirm that rise from 33.55 is still in progress and should target 38.2% retracement of 147.27 to 33.55 at 76.99 next. On the downside, break of 41.66 fibo support will firstly suggest that rise from 33.55 has completed. Secondly it will also indicate that it's merely part of the three wave consolidation that started at 32.48 and such consolidation has possibly completed too. Focus will then turn back to 33.55 low.
Nymex Crude Oil (CL)
Crude oil's recovery is still in progress and at this point, intraday bias remains on the upside as long as 47.70 minor support holds. Based on the corrective look of the price actions from 54.66, break of 51.37 resistance will suggest that such consolidation has completed and recent rally could be resumption. Break of 54.66 high will confirm the bullish case. However, below 47.7 will flip intraday bias back to the downside and suggest that fall from 54.66 is still in progress for 61.8% retracement of 33.55 to 54.66 at 41.66.
In the bigger picture, the bullish case looks shaky with daily MACD staying below signal line. But after all, with 41.66 fibo support intact, we're still mildly favoring the case that a medium term bottom is in place at 33.55. Break of 54.66 will confirm that rise from 33.55 is still in progress and should target 38.2% retracement of 147.27 to 33.55 at 76.99 next. On the downside, break of 41.66 fibo support will firstly suggest that rise from 33.55 has completed. Secondly it will also indicate that it's merely part of the three wave consolidation that started at 32.48 and such consolidation has possibly completed too. Focus will then turn back to 33.55 low.
TA Bank of America : Sell Asian Stocks as Foreign Inflows Mount
(Bloomberg) -- Investors should sell Asian equities because foreign buying has exceeded a threshold that previously triggered market declines, according to Bank of America Corp.’s “Asia Flow Trading Rule.” Overseas investors bought $6.8 billion of Asian stocks in the past five weeks, equal to 1 percent of total market capitalization, Michael Hartnett, Jacky Tang and Daniel Casali, strategists at the bank’s Merrill Lynch & Co. unit, wrote in a note dated yesterday.
Investors should sell when inflows over a four-week period surpass 0.6 percent of market capitalization, they said. Markets declined within three weeks on the past four occasions the sell signal was triggered, the analysts wrote.The MSCI Asia Pacific Index gained 11 percent in the five weeks through yesterday, compared with the Standard & Poor’s 500 Index’s 8.6 percent advance. India’s Sensitive Index rallied 24 percent in that period. Still, “any market corrections will likely be mild” as global fund managers are “underweight” equities relative to other asset classes, the report said. Investors who missed out the current rally are “waiting for market pullbacks to buy on dips,” it said.
Investors should sell when inflows over a four-week period surpass 0.6 percent of market capitalization, they said. Markets declined within three weeks on the past four occasions the sell signal was triggered, the analysts wrote.The MSCI Asia Pacific Index gained 11 percent in the five weeks through yesterday, compared with the Standard & Poor’s 500 Index’s 8.6 percent advance. India’s Sensitive Index rallied 24 percent in that period. Still, “any market corrections will likely be mild” as global fund managers are “underweight” equities relative to other asset classes, the report said. Investors who missed out the current rally are “waiting for market pullbacks to buy on dips,” it said.
Pound Weakens After Moody’s Says U.K. Finances ‘Deteriorating’
(Bloomberg) -- The pound fell against the dollar and the yen after Moody’s Investors Service said the nation’s finances are “deteriorating rapidly” and the government is taking “risks.” The yen rose to a three-week high against the dollar as Asian stocks fell and U.S. equity futures headed lower. The euro extended this week’s advance against the dollar on speculation German business confidence rebounded, adding to signs the worst of Europe’s economic slump may be over. The dollar weakened against the yen before a U.S. government report that economists say will show durable goods orders declined for the fifth time in six months.
“It’s a veiled threat from Moody’s,” said Sean Callow, senior currency strategist at Westpac Banking Corp. in Sydney. “Given that we are still above where we were 24 hours ago you would hardly be shocked if the pound headed back to the low 1.45s against the dollar.”The pound fell to $1.4678 as of 7:37 a.m. in London from $1.4722 in New York yesterday. The British currency weakened to 142.09 yen from 144.21, and dropped to 89.75 pence per euro from 89.29 pence. The euro declined to 127.57 yen from 128.77 yesterday, and traded at $1.3178 from $1.3144. The yen climbed to 96.82 per dollar after reaching 96.71, the strongest since March 30, from 97.96 yesterday.
The Nikkei 225 Stock Average fell 1.6 percent and futures on the Standard & Poor’s 500 Index dropped 0.4 percent.The U.K. government’s balance sheet is worsening due to weakening tax revenues and the impact of its bank bailouts, Moody’s said in a report yesterday.
The U.K. economy shrank more than economists forecast in the first quarter in the biggest contraction since Margaret Thatcher came to power n 1979. Gross domestic product fell 1.9 percent from the final three months of 2008 as manufacturing and business services posted record declines, the Office for National Statistics said today in London. Economists predicted 1.5 percent, the median of 29 forecasts in a Bloomberg News survey showed. GDP declined 1.6 percent in the previous quarter.
Credit Rating
Moody’s and Standard & Poor’s are reviewing the U.K.’s AAA sovereign credit rating after the government said the nation’s debt will reach 1.4 trillion pounds ($2.05 trillion) over the next five years, the London-based Daily Telegraph reported today. Moody’s analyst Arnaud Mares said Treasury projections are “a cause for concern,” while an S&P spokesman said it was looking at details of the budget and had no comment at this time, the newspaper said.
“The article is weighing on the pound, particularly against the euro,” analysts led by David Woo, London-based head of currency strategy at Barclays Capital, wrote in a research note today. “The credit ratings fear is an idiosyncratic risk for sterling.”
S&P cut Ireland’s credit rating to AA+ from AAA last month as the global financial turmoil fueled borrowing costs and swelled the budget deficit. The agency lowered the ratings of Spain, Portugal and Greece in January. Moody’s placed Ireland’s Aaa-rated government bonds on review for a possible downgrade on April 17, citing the “severe economic adjustment taking place” in the nation.
German Confidence
The euro reversed earlier losses against the dollar before a German report that may show business confidence climbed to 82.3 in April from a 26-year low of 82.1 in March, according to a Bloomberg New survey of economists. The Ifo institute will release the survey in Munich today.The 16-nation currency gained yesterday after Credit Suisse Group AG said it returned to profit and an index showed European services and factory industries shrank in April at the slowest pace in six months.
Dollar Index
The Dollar Index headed for its first weekly decline since April 3 before the Commerce Department’s report on U.S. durable goods and on concern that Chrysler LLC and General Motors will file for bankruptcy.Orders for U.S. durable goods fell 1.5 percent in March, after a 3.4 percent increase in February, according to a Bloomberg News survey of economists. The report will be released in Washington today.The U.S. Treasury is preparing a bankruptcy filing for Chrysler only as a matter of “due diligence,” Michigan Senator Debbie Stabenow said in an interview yesterday.The Dollar Index, used by the ICE to track the greenback against the euro, yen, pound, Canadian dollar, Swiss franc and Swedish krona, fell to 85.101 today from 85.517 yesterday and 85.981 on April 17.
‘Shun Risk’
Japan’s currency headed for a second weekly advance versus Australia’s dollar on concern U.S. banks will unveil additional loan losses, spurring investors to pare holdings of higher- yielding assets.The yen rose against 15 of the 16 most-active currencies this week on speculation the U.S. government will direct banks judged short of capital to say how they will raise extra funds. U.S. lenders may need another $1 trillion in capital to cushion losses, KBW Inc. analysts said yesterday. The estimate is based on KBW’s own “stress test” of the strength of top U.S. lenders, wrote analysts led by Frederick Cannon, based in San Francisco.
Australia’s dollar fell 1.3 percent to 69.14 yen, and New Zealand’s dollar declined 0.9 percent to 54.55 yen. The U.S. government is scheduled to release the results of its so-called stress tests on May 4.
Indonesian Rupiah Set for Weekly Decline on Political Concern
(Bloomberg) -- Indonesia’s rupiah headed for a weekly loss as President Susilo Bambang Yudhoyono’s bid for re- election suffered a setback after a partner ended coalition talks and nominated a rival.Golkar party, the nation’s oldest, yesterday named Vice President Jusuf Kalla as its candidate for the July presidential elections after breaking off talks with Yudhoyono’s Democrat party a day earlier. The rupiah was on course for this year’s best monthly performance on optimism gains in the April 9 parliamentary elections would allow Yudhoyono to tackle an economic slowdown.
The rupiah dropped 1 percent this week to 10,828 per dollar as of 12:18 p.m. in Jakarta, according to data compiled by Bloomberg. The currency rose 0.9 percent today. It is the only gainer this year among Asia’s 10 most-traded currencies excluding the yen, advancing 0.6 percent.The withdrawal of support by his deputy may deny Yudhoyono a win in the July 8 elections, forcing a run off in September, according to pre-election surveys. Yudhoyono’s prospects were boosted by this month’s legislative polls, in which his party won most seats, according to preliminary results.
Running Mate
Some 51.5 percent of respondents said they would vote for Yudhoyono if Kalla was his running mate, according to a survey in February. Yudhoyono may lose about a quarter of those votes without Kalla’s support, according to the survey, carried out by the University of Indonesia, the Indonesian Institute of Sciences and two other organizations.
The rupiah also fell this week as foreign investors sold $72 million more Indonesian shares than they bought, according to stock exchange data. Non-deliverable forwards contracts signal traders are betting the rupiah may drop 0.7 percent to 10,910 over the next month, compared with expectations for a spot rate of 10,775 last week. Forwards are agreements in which assets are bought and sold at current prices for delivery at a future specified time and date.
“It’s a veiled threat from Moody’s,” said Sean Callow, senior currency strategist at Westpac Banking Corp. in Sydney. “Given that we are still above where we were 24 hours ago you would hardly be shocked if the pound headed back to the low 1.45s against the dollar.”The pound fell to $1.4678 as of 7:37 a.m. in London from $1.4722 in New York yesterday. The British currency weakened to 142.09 yen from 144.21, and dropped to 89.75 pence per euro from 89.29 pence. The euro declined to 127.57 yen from 128.77 yesterday, and traded at $1.3178 from $1.3144. The yen climbed to 96.82 per dollar after reaching 96.71, the strongest since March 30, from 97.96 yesterday.
The Nikkei 225 Stock Average fell 1.6 percent and futures on the Standard & Poor’s 500 Index dropped 0.4 percent.The U.K. government’s balance sheet is worsening due to weakening tax revenues and the impact of its bank bailouts, Moody’s said in a report yesterday.
The U.K. economy shrank more than economists forecast in the first quarter in the biggest contraction since Margaret Thatcher came to power n 1979. Gross domestic product fell 1.9 percent from the final three months of 2008 as manufacturing and business services posted record declines, the Office for National Statistics said today in London. Economists predicted 1.5 percent, the median of 29 forecasts in a Bloomberg News survey showed. GDP declined 1.6 percent in the previous quarter.
Credit Rating
Moody’s and Standard & Poor’s are reviewing the U.K.’s AAA sovereign credit rating after the government said the nation’s debt will reach 1.4 trillion pounds ($2.05 trillion) over the next five years, the London-based Daily Telegraph reported today. Moody’s analyst Arnaud Mares said Treasury projections are “a cause for concern,” while an S&P spokesman said it was looking at details of the budget and had no comment at this time, the newspaper said.
“The article is weighing on the pound, particularly against the euro,” analysts led by David Woo, London-based head of currency strategy at Barclays Capital, wrote in a research note today. “The credit ratings fear is an idiosyncratic risk for sterling.”
S&P cut Ireland’s credit rating to AA+ from AAA last month as the global financial turmoil fueled borrowing costs and swelled the budget deficit. The agency lowered the ratings of Spain, Portugal and Greece in January. Moody’s placed Ireland’s Aaa-rated government bonds on review for a possible downgrade on April 17, citing the “severe economic adjustment taking place” in the nation.
German Confidence
The euro reversed earlier losses against the dollar before a German report that may show business confidence climbed to 82.3 in April from a 26-year low of 82.1 in March, according to a Bloomberg New survey of economists. The Ifo institute will release the survey in Munich today.The 16-nation currency gained yesterday after Credit Suisse Group AG said it returned to profit and an index showed European services and factory industries shrank in April at the slowest pace in six months.
Dollar Index
The Dollar Index headed for its first weekly decline since April 3 before the Commerce Department’s report on U.S. durable goods and on concern that Chrysler LLC and General Motors will file for bankruptcy.Orders for U.S. durable goods fell 1.5 percent in March, after a 3.4 percent increase in February, according to a Bloomberg News survey of economists. The report will be released in Washington today.The U.S. Treasury is preparing a bankruptcy filing for Chrysler only as a matter of “due diligence,” Michigan Senator Debbie Stabenow said in an interview yesterday.The Dollar Index, used by the ICE to track the greenback against the euro, yen, pound, Canadian dollar, Swiss franc and Swedish krona, fell to 85.101 today from 85.517 yesterday and 85.981 on April 17.
‘Shun Risk’
Japan’s currency headed for a second weekly advance versus Australia’s dollar on concern U.S. banks will unveil additional loan losses, spurring investors to pare holdings of higher- yielding assets.The yen rose against 15 of the 16 most-active currencies this week on speculation the U.S. government will direct banks judged short of capital to say how they will raise extra funds. U.S. lenders may need another $1 trillion in capital to cushion losses, KBW Inc. analysts said yesterday. The estimate is based on KBW’s own “stress test” of the strength of top U.S. lenders, wrote analysts led by Frederick Cannon, based in San Francisco.
Australia’s dollar fell 1.3 percent to 69.14 yen, and New Zealand’s dollar declined 0.9 percent to 54.55 yen. The U.S. government is scheduled to release the results of its so-called stress tests on May 4.
Indonesian Rupiah Set for Weekly Decline on Political Concern
(Bloomberg) -- Indonesia’s rupiah headed for a weekly loss as President Susilo Bambang Yudhoyono’s bid for re- election suffered a setback after a partner ended coalition talks and nominated a rival.Golkar party, the nation’s oldest, yesterday named Vice President Jusuf Kalla as its candidate for the July presidential elections after breaking off talks with Yudhoyono’s Democrat party a day earlier. The rupiah was on course for this year’s best monthly performance on optimism gains in the April 9 parliamentary elections would allow Yudhoyono to tackle an economic slowdown.
The rupiah dropped 1 percent this week to 10,828 per dollar as of 12:18 p.m. in Jakarta, according to data compiled by Bloomberg. The currency rose 0.9 percent today. It is the only gainer this year among Asia’s 10 most-traded currencies excluding the yen, advancing 0.6 percent.The withdrawal of support by his deputy may deny Yudhoyono a win in the July 8 elections, forcing a run off in September, according to pre-election surveys. Yudhoyono’s prospects were boosted by this month’s legislative polls, in which his party won most seats, according to preliminary results.
Running Mate
Some 51.5 percent of respondents said they would vote for Yudhoyono if Kalla was his running mate, according to a survey in February. Yudhoyono may lose about a quarter of those votes without Kalla’s support, according to the survey, carried out by the University of Indonesia, the Indonesian Institute of Sciences and two other organizations.
The rupiah also fell this week as foreign investors sold $72 million more Indonesian shares than they bought, according to stock exchange data. Non-deliverable forwards contracts signal traders are betting the rupiah may drop 0.7 percent to 10,910 over the next month, compared with expectations for a spot rate of 10,775 last week. Forwards are agreements in which assets are bought and sold at current prices for delivery at a future specified time and date.
Head And Shoulders Now Forms On S&P 500 With Rising Wedge Break
By Corey Rosenbloom on April 24, 2009
That’s a lot to say in one headline! In addition to a (so far) confirmed downside break of the bearish rising wedge on the S&P 500 (^GSPC: 851.92 +8.37 +0.99%), an ominous Head and Shoulders pattern has now formed on the 60 minute structure. Let’s take a look at this new development.If there ever was a confluence sell signal, this is it. Does it guarantee price will go down? No, but let’s look at what just happened. On Monday, we saw a strong momentum move down off the upper trendline of the bearish rising wedge which I had been discussing previously. Not only did we gap down off that level, but we officially broke out of the rising channel at that time. That was an intermediate-term sell signal (to play for a price expansion move down).
Price has risen to re-test the lower trend channel (which offered an even better short-sell signal, as price often re-tests the breakout point before plunging lower) and today we are seeing a continuation of the inflection down off that level (at roughly 860).That alone is a powerful signal with a low risk (stop either above 870 or 880, depending on your risk tolerance) and high profit target (a test of the 750 level or perhaps as low as the 666 March low, though that would be an aggressive target).On top of the bearish wedge breakdown, a possible Head and Shoulders (reversal) pattern has formed on the most recent price swings. Look closely to see the left shoulder, head, and right shoulder in pure form. The Right Shoulder formed on the re-test of the rising lower trendline.
The neckline now rests at around 830, and a break of that level would set-up a price projection move down to the 780 level (the projection is taken from the Head to the Neckline - roughly 45 points - and then subtracted from the neckline at 830).Adding to the fray, we have a lengthy negative momentum divergence that has set-in (also known as the “Three Push” reversal pattern). In addition, a Cradle Sell trade just formed on the hourlies (note the 20 EMA crossing under the 50 EMA).If bulls (buyers) manage to invalidate these ominous chart patterns - which is a possibility - it would go directly against the odds and historical significance of these patterns.
That’s a lot to say in one headline! In addition to a (so far) confirmed downside break of the bearish rising wedge on the S&P 500 (^GSPC: 851.92 +8.37 +0.99%), an ominous Head and Shoulders pattern has now formed on the 60 minute structure. Let’s take a look at this new development.If there ever was a confluence sell signal, this is it. Does it guarantee price will go down? No, but let’s look at what just happened. On Monday, we saw a strong momentum move down off the upper trendline of the bearish rising wedge which I had been discussing previously. Not only did we gap down off that level, but we officially broke out of the rising channel at that time. That was an intermediate-term sell signal (to play for a price expansion move down).
Price has risen to re-test the lower trend channel (which offered an even better short-sell signal, as price often re-tests the breakout point before plunging lower) and today we are seeing a continuation of the inflection down off that level (at roughly 860).That alone is a powerful signal with a low risk (stop either above 870 or 880, depending on your risk tolerance) and high profit target (a test of the 750 level or perhaps as low as the 666 March low, though that would be an aggressive target).On top of the bearish wedge breakdown, a possible Head and Shoulders (reversal) pattern has formed on the most recent price swings. Look closely to see the left shoulder, head, and right shoulder in pure form. The Right Shoulder formed on the re-test of the rising lower trendline.
The neckline now rests at around 830, and a break of that level would set-up a price projection move down to the 780 level (the projection is taken from the Head to the Neckline - roughly 45 points - and then subtracted from the neckline at 830).Adding to the fray, we have a lengthy negative momentum divergence that has set-in (also known as the “Three Push” reversal pattern). In addition, a Cradle Sell trade just formed on the hourlies (note the 20 EMA crossing under the 50 EMA).If bulls (buyers) manage to invalidate these ominous chart patterns - which is a possibility - it would go directly against the odds and historical significance of these patterns.
Daily Technical Analysis Forex/DJIA/Gold
Daily Forex Technicals | Written by FXtechtrade
EUR/USD
Today's support: - 3092, 1.3061 and 1.3050(main), where correction is possible. Break would give 1.3016, where correction also may be. Then follows 1.2982. Break of the latter would result in 1.2957. If a strong impulse, we would see 1.2936. Continuation will give 1.2915.
Today's resistance: - 1.3170 and 1.3210 (main). Break would give 1.3234, where a correction is possible. Then goes 1.3262. Break of the latter would result in 1.3297. If a strong impulse, we'd see 1.3316. Continuation will give 1.3340.
USD/JPY
Today's support: - 97.20(main). Break would bring 96.86, where correction is possible. Then 96.65, where a correction may also happen. Break of the latter will give 96.21. If a strong impulse, we would see 95.86. Continuation would give 95.43.
Today's resistance: - 98.70, 99.22, 99.48 and 99.94(main), where a correction may happen. Break would bring 100.24, where also a correction may be. Then 100.51. If a strong impulse, we would see 100.82. Continuation will give 101.14.
DOW JONES INDEX
Today's support: - 7860.80, 7848.20, 7817.72 and 7796.30(main), where a delay and correction may happen. Break of the latter will give 7782.19, where correction also can be. Then follows 7768.11. Be there a strong impulse, we would see 7734.38. Continuation will bring 7716.10 and 7995.00.
Today's resistance: - 7798.64(main), where a delay and correction may happen. Break would bring 8032.50, where a correction may happen. Then follows 8048.36, where a delay and correction could also be. Be there a strong impulse, we'd see 8071.77. Continuation would bring 8097.38
Daily Forex Fundamentals | Written by TheLFB-Forex.com
Majors Decline On Light Volume
Overall, the market moved again on light momentum in the Asian session. Things are expected to pick up as the market is heading towards the London open, following the template set over the last period of trading. So far, it seems that the direction of trading was dollar long, but this could change very easily as the market is struggling to pick up momentum.
The Euro (Eur/Usd) was able to move decisively higher for the first time in the last period. The pair rose 130 pips on Thursday, helped by positive U.S. futures during the European and the U.S. sessions. However, the euro ran into the 1.3150 resistance area in the Asian session, an area that might need stronger volume to be break.
The Pound (Gbp/Usd) saw strong momentum on Thursday, which helped the pair break above the 20 and the 100-day moving averages. However, the pound declined 60 pips in the Asian session, breaking again below the 20-day moving average.
The Aussie (Aud/Usd) rose 80-pips on Thursday, helped by the gains seen during the European session. However, the aussie saw some downside action in the late U.S. and in the Asian sessions, as the pair failed two tests at the 0.7150 resistance area, forming a double-top pattern.
The Cad (Usd/Cad) declined 140 pips, after the pair broke under the 1.2325 support area helped by better than expected retail sales. Additionally, the cad might have received an additional boost from the crude's market, as oil broke above the $49 resistance area. In the Asian session, the cad rose 30 pips.
The Swissy (Usd/Chf) moved strongly on Thursday, as the forthcoming SNB Chairman was speaking about the latest developments in the Swiss economy. Helped by the declines seen in the past days, the swissy broke under the 50-day moving average.
The Yen (Usd/Yen) continues to hold above the 97.75 area, which acted as a support over the last four days of trading. Additionally, the 50-day moving average can be found around the same area, providing additional weight to the support line. On Thursday, the yen formed a doji-star, while it declined 30 pips tonight, in the Asian session
Daily Forex Technicals | Written by India Forex
Gold: Gold firmed up yesterday taking the 100 Day EMA support as investors considered the yellow metal as a safe heaven. The charts are reaching the overbought region with 38.2% retracement resistance at $920. Above that could push Gold higher to $935. (Gold: $909.00)
Dollar index: Dollar Index pulled back from close to 87 levels and continues to witness further sideways trading. However, as long as 84.51 support holds, a resumption of rally may be witnessed. Break above 86.88 can take the index to 88 levels. Bullish.
Daily Forex Technicals | Written by Mizuho Corporate Bank
EURUSD
Comment: Slow work, but getting there. Bouncing from the bottom of a large 'flag' formation, through the thinnest point of the Ichimoku 'cloud' and the 9-day moving average. A weekly close above 1.3185 would form a small 'bullish engulfing' candle on the weekly chart and might add to current bullish momentum.Strategy: Attempt longs at 1.3175; stop below 1.2950. Add to longs on a sustained break above 1.3200 for 1.3400 short term and 1.3600 further out.Direction of Trade: →↗
Support Resistance
1.3113 " 1.3190/1.3200
1.309 1.3335
1.3045 1.3395*
1.3000* 1.3515
1.295 1.3585
GBPUSD
Comment: Bouncing from the top of the Ichimoku 'cloud', closing above the 26-day moving average, in what can be seen as a 'bullish engulfing' candle. Bullish momentum might increase if we hold above 1.4600 today though really a weekly close above 1.5000 is essential for a decent rally to really get going.Strategy: Buy at 1.4665; stop below 1.4380. Short term target 1.4850, eventually 1.5000.
Direction of Trade: →↗
Support Resistance
1.4637 " 1.4687
1.46 1.4708
1.45 1.478
1.444 1.4855
1.4397* 1.496
USDJPY
Comment: Dropping by more than expected, breaking below the 50% retracement level and the 9 and 26-day moving averages. This has forced us to adjust our view and now see April's high at 101.45 as an interim top so that prices are likely to hold below here for another couple of months or so. The next step should be a bout of generalised US dollar weakness so that dollar/Yen drops towards 93.50.
Strategy: Attempt shorts on a bounce to 98.00; stop above 99.00. Add to shorts on a break below 96.50 for 95.75 short term, probably 93.50 further out.
Direction of Trade: →
Support Resistance
97.10 " 98.15
96.9 98.92/99.00*
96.50* 99.5
95.95 99.69/99.77
95.65* 100
EUR/USD
Today's support: - 3092, 1.3061 and 1.3050(main), where correction is possible. Break would give 1.3016, where correction also may be. Then follows 1.2982. Break of the latter would result in 1.2957. If a strong impulse, we would see 1.2936. Continuation will give 1.2915.
Today's resistance: - 1.3170 and 1.3210 (main). Break would give 1.3234, where a correction is possible. Then goes 1.3262. Break of the latter would result in 1.3297. If a strong impulse, we'd see 1.3316. Continuation will give 1.3340.
USD/JPY
Today's support: - 97.20(main). Break would bring 96.86, where correction is possible. Then 96.65, where a correction may also happen. Break of the latter will give 96.21. If a strong impulse, we would see 95.86. Continuation would give 95.43.
Today's resistance: - 98.70, 99.22, 99.48 and 99.94(main), where a correction may happen. Break would bring 100.24, where also a correction may be. Then 100.51. If a strong impulse, we would see 100.82. Continuation will give 101.14.
DOW JONES INDEX
Today's support: - 7860.80, 7848.20, 7817.72 and 7796.30(main), where a delay and correction may happen. Break of the latter will give 7782.19, where correction also can be. Then follows 7768.11. Be there a strong impulse, we would see 7734.38. Continuation will bring 7716.10 and 7995.00.
Today's resistance: - 7798.64(main), where a delay and correction may happen. Break would bring 8032.50, where a correction may happen. Then follows 8048.36, where a delay and correction could also be. Be there a strong impulse, we'd see 8071.77. Continuation would bring 8097.38
Daily Forex Fundamentals | Written by TheLFB-Forex.com
Majors Decline On Light Volume
Overall, the market moved again on light momentum in the Asian session. Things are expected to pick up as the market is heading towards the London open, following the template set over the last period of trading. So far, it seems that the direction of trading was dollar long, but this could change very easily as the market is struggling to pick up momentum.
The Euro (Eur/Usd) was able to move decisively higher for the first time in the last period. The pair rose 130 pips on Thursday, helped by positive U.S. futures during the European and the U.S. sessions. However, the euro ran into the 1.3150 resistance area in the Asian session, an area that might need stronger volume to be break.
The Pound (Gbp/Usd) saw strong momentum on Thursday, which helped the pair break above the 20 and the 100-day moving averages. However, the pound declined 60 pips in the Asian session, breaking again below the 20-day moving average.
The Aussie (Aud/Usd) rose 80-pips on Thursday, helped by the gains seen during the European session. However, the aussie saw some downside action in the late U.S. and in the Asian sessions, as the pair failed two tests at the 0.7150 resistance area, forming a double-top pattern.
The Cad (Usd/Cad) declined 140 pips, after the pair broke under the 1.2325 support area helped by better than expected retail sales. Additionally, the cad might have received an additional boost from the crude's market, as oil broke above the $49 resistance area. In the Asian session, the cad rose 30 pips.
The Swissy (Usd/Chf) moved strongly on Thursday, as the forthcoming SNB Chairman was speaking about the latest developments in the Swiss economy. Helped by the declines seen in the past days, the swissy broke under the 50-day moving average.
The Yen (Usd/Yen) continues to hold above the 97.75 area, which acted as a support over the last four days of trading. Additionally, the 50-day moving average can be found around the same area, providing additional weight to the support line. On Thursday, the yen formed a doji-star, while it declined 30 pips tonight, in the Asian session
Daily Forex Technicals | Written by India Forex
Gold: Gold firmed up yesterday taking the 100 Day EMA support as investors considered the yellow metal as a safe heaven. The charts are reaching the overbought region with 38.2% retracement resistance at $920. Above that could push Gold higher to $935. (Gold: $909.00)
Dollar index: Dollar Index pulled back from close to 87 levels and continues to witness further sideways trading. However, as long as 84.51 support holds, a resumption of rally may be witnessed. Break above 86.88 can take the index to 88 levels. Bullish.
Daily Forex Technicals | Written by Mizuho Corporate Bank
EURUSD
Comment: Slow work, but getting there. Bouncing from the bottom of a large 'flag' formation, through the thinnest point of the Ichimoku 'cloud' and the 9-day moving average. A weekly close above 1.3185 would form a small 'bullish engulfing' candle on the weekly chart and might add to current bullish momentum.Strategy: Attempt longs at 1.3175; stop below 1.2950. Add to longs on a sustained break above 1.3200 for 1.3400 short term and 1.3600 further out.Direction of Trade: →↗
Support Resistance
1.3113 " 1.3190/1.3200
1.309 1.3335
1.3045 1.3395*
1.3000* 1.3515
1.295 1.3585
GBPUSD
Comment: Bouncing from the top of the Ichimoku 'cloud', closing above the 26-day moving average, in what can be seen as a 'bullish engulfing' candle. Bullish momentum might increase if we hold above 1.4600 today though really a weekly close above 1.5000 is essential for a decent rally to really get going.Strategy: Buy at 1.4665; stop below 1.4380. Short term target 1.4850, eventually 1.5000.
Direction of Trade: →↗
Support Resistance
1.4637 " 1.4687
1.46 1.4708
1.45 1.478
1.444 1.4855
1.4397* 1.496
USDJPY
Comment: Dropping by more than expected, breaking below the 50% retracement level and the 9 and 26-day moving averages. This has forced us to adjust our view and now see April's high at 101.45 as an interim top so that prices are likely to hold below here for another couple of months or so. The next step should be a bout of generalised US dollar weakness so that dollar/Yen drops towards 93.50.
Strategy: Attempt shorts on a bounce to 98.00; stop above 99.00. Add to shorts on a break below 96.50 for 95.75 short term, probably 93.50 further out.
Direction of Trade: →
Support Resistance
97.10 " 98.15
96.9 98.92/99.00*
96.50* 99.5
95.95 99.69/99.77
95.65* 100
Thursday, April 23, 2009
IHSG Kembali Mendapatkan Sentimen Negatif
Market Review
IHSG mengalami transaksi saham yang tidak berjalan sempurna pada hari Kamis, dimana transaksi saham sempat terhenti di awal perdagangan (transaksi berlebihan PT. Trimegah Sekuritas) dan akhirnya terhenti pada pukul 14.26.51 WIB, karena adanya gangguan di sistem perdagangan JAKS BEI. Masih berlanjutnya tekanan penjualan di sejumlah saham grup Bakrie akibat sentimen negatif paska pecahnya koalisi partai Golkar dan Demokrat pada hari Rabu, yang berimbas negatif ke saham lainnya di sektor property, trade dan basic industry, meski saham di sektor industry dan plantation menguat tipis, sempat menjatuhkan IHSG ke level terendah 1,585.92. IHSG ditutup melemah 22.53 (-1.39%) di level 1,592.70, dengan nilai transaksi sebesar Rp 2.286 triliun. Investor asing mencatat net selling sebesar Rp 139.563 miliar, lebih tinggi dibandingkan net selling sebesar Rp 15.46 miliar pada hari Rabu (22/04).
Indeks saham MSCI Asia-Pacific menguat untuk pertama kali dalam 3 sesi terakhir berkat spekulasi merger & akuisisi di industri beverage Australia, serta rekomendasi “Buy untuk saham Toyota Motor oleh Goldman Sachs. Dampak penurunan Wall Street hari Rabu, dapat dibatasi oleh lebih baik dari perkiraan lapkeu Apple Corp AS, berperan angkat regional.
IHSG Outlook
Potensi penurunan IHSG masih dapat berlanjut pada hari ini, setelah BEI mengalami gangguan sistem perdagangan yang diawali oleh order yang berlebihan dari Trimegah Securities (order saham BLTA) dan masih berlanjutnya sentimen negatif di saham grup Bakrie setelah koalisi Partai Golkar-Demokrat disinyalir dapat mengganggu jalannya pemerintahan dan kinerja grup Bakrie. Tetapi potensi kenaikan saham komoditi pertambangan dan perkebunan (kenaikan harga minyak, emas cpo, timah dan nikel) dapat membatasi koreksi penurunan IHSG. Kondisi teknikal yang overbought & technical rejection, diikuti lemahnya sentimen di pasar Wall Street sejak awal pekan paska rilisan earnings sejumlah perbankan AS (BOA, BNY Mellon, Morgan Stanley), ikut membebani kinerja IHSG yang kami perkirakan berada dalam range 1,550-1.700 pekan ini.
Stock Picks:
* INDY
* SMCB
Technical Analysis:
IHSG diperkirakan masih berpotensi melanjutkan penurunan pada hari ini, karena kondisi teknikal yang overbought (indikator ADX & MACD terkoreksi turun, stochastic crossing down dari overbought), pola candle three black crows dalam pola uptrend channel (1,675) untuk mencoba ke support support line di 1,569/1,541 (support line di pola rising wedge) yang dapat memutarbalikkan trend jangka pendek yang saat ini bullish menjadi netral. IHSG juga mendapatkan momentum bearish dari penutupan di bawah 5-day MA (1,625)/10-day MA (1,593) dan 200-day MA (1,620) yang akan menjadi resistansi di pekan depan. Trend jangka pendek terancam berubah, meski MACD berada dalam teritorial bullish. Sementara trend jangka menengah masih bearish, selama berada di bawah 1,744 (38.2% fibo retracement) yang mendukng analisa wave koreksi IV dalam sub koreksi abc dalam wave impulse 3 selama ditutup harian diatas 1,543 fibo.
Resistance: 1685.95/1656.62/1627.29/1609.99. PP 1597.96
Support : 1580.66/1568.63/1539.30/1509.97
(Perkiraan Range 1,560-1,620)
Regional Outlook
Pasar regional Asia diperkirakan mengalami kesulitan untuk menguat pada hari ini, meski Apple Corp AS, Credit Suisse Swiss kemarin tercatat lebih baik dari perkiraan analis, dimana sebelumnya hasil yang mengecewakan dari Morgan Stanley, Boeing hari Rabu, setelah melemahkan Wall Street. Laju kenaikan terbatas berkat sentimen negatif dari ekonomi: Jobless Claims AS meningkat menjadi 640,000 di pekan lalu, IMF merevisi pertumbuhan ekonomi global diturunkan menjadi minus -1.3% di tahun 2009, Existing Home Sales AS tercatat -3% di bulan Maret.
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IHSG mengalami transaksi saham yang tidak berjalan sempurna pada hari Kamis, dimana transaksi saham sempat terhenti di awal perdagangan (transaksi berlebihan PT. Trimegah Sekuritas) dan akhirnya terhenti pada pukul 14.26.51 WIB, karena adanya gangguan di sistem perdagangan JAKS BEI. Masih berlanjutnya tekanan penjualan di sejumlah saham grup Bakrie akibat sentimen negatif paska pecahnya koalisi partai Golkar dan Demokrat pada hari Rabu, yang berimbas negatif ke saham lainnya di sektor property, trade dan basic industry, meski saham di sektor industry dan plantation menguat tipis, sempat menjatuhkan IHSG ke level terendah 1,585.92. IHSG ditutup melemah 22.53 (-1.39%) di level 1,592.70, dengan nilai transaksi sebesar Rp 2.286 triliun. Investor asing mencatat net selling sebesar Rp 139.563 miliar, lebih tinggi dibandingkan net selling sebesar Rp 15.46 miliar pada hari Rabu (22/04).
Indeks saham MSCI Asia-Pacific menguat untuk pertama kali dalam 3 sesi terakhir berkat spekulasi merger & akuisisi di industri beverage Australia, serta rekomendasi “Buy untuk saham Toyota Motor oleh Goldman Sachs. Dampak penurunan Wall Street hari Rabu, dapat dibatasi oleh lebih baik dari perkiraan lapkeu Apple Corp AS, berperan angkat regional.
IHSG Outlook
Potensi penurunan IHSG masih dapat berlanjut pada hari ini, setelah BEI mengalami gangguan sistem perdagangan yang diawali oleh order yang berlebihan dari Trimegah Securities (order saham BLTA) dan masih berlanjutnya sentimen negatif di saham grup Bakrie setelah koalisi Partai Golkar-Demokrat disinyalir dapat mengganggu jalannya pemerintahan dan kinerja grup Bakrie. Tetapi potensi kenaikan saham komoditi pertambangan dan perkebunan (kenaikan harga minyak, emas cpo, timah dan nikel) dapat membatasi koreksi penurunan IHSG. Kondisi teknikal yang overbought & technical rejection, diikuti lemahnya sentimen di pasar Wall Street sejak awal pekan paska rilisan earnings sejumlah perbankan AS (BOA, BNY Mellon, Morgan Stanley), ikut membebani kinerja IHSG yang kami perkirakan berada dalam range 1,550-1.700 pekan ini.
Stock Picks:
* INDY
* SMCB
Technical Analysis:
IHSG diperkirakan masih berpotensi melanjutkan penurunan pada hari ini, karena kondisi teknikal yang overbought (indikator ADX & MACD terkoreksi turun, stochastic crossing down dari overbought), pola candle three black crows dalam pola uptrend channel (1,675) untuk mencoba ke support support line di 1,569/1,541 (support line di pola rising wedge) yang dapat memutarbalikkan trend jangka pendek yang saat ini bullish menjadi netral. IHSG juga mendapatkan momentum bearish dari penutupan di bawah 5-day MA (1,625)/10-day MA (1,593) dan 200-day MA (1,620) yang akan menjadi resistansi di pekan depan. Trend jangka pendek terancam berubah, meski MACD berada dalam teritorial bullish. Sementara trend jangka menengah masih bearish, selama berada di bawah 1,744 (38.2% fibo retracement) yang mendukng analisa wave koreksi IV dalam sub koreksi abc dalam wave impulse 3 selama ditutup harian diatas 1,543 fibo.
Resistance: 1685.95/1656.62/1627.29/1609.99. PP 1597.96
Support : 1580.66/1568.63/1539.30/1509.97
(Perkiraan Range 1,560-1,620)
Regional Outlook
Pasar regional Asia diperkirakan mengalami kesulitan untuk menguat pada hari ini, meski Apple Corp AS, Credit Suisse Swiss kemarin tercatat lebih baik dari perkiraan analis, dimana sebelumnya hasil yang mengecewakan dari Morgan Stanley, Boeing hari Rabu, setelah melemahkan Wall Street. Laju kenaikan terbatas berkat sentimen negatif dari ekonomi: Jobless Claims AS meningkat menjadi 640,000 di pekan lalu, IMF merevisi pertumbuhan ekonomi global diturunkan menjadi minus -1.3% di tahun 2009, Existing Home Sales AS tercatat -3% di bulan Maret.
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Barclays Says: Oil May Drop on Double Top
(Bloomberg) -- Oil may drop toward $42 a barrel after prices formed a “double top” pattern, technical analysts at Barclays Capital said. A double-top is a W-shaped formation with two similar high- points. A drop below the lowest point between the two peaks can be a signal to sell, according to analysts who use charts to forecast prices.
Oil “completed a month-long double top formation” on April 20, Barclays analysts led by Chief European Technical Strategist Phil Roberts said in a report. The contract for June settlement in New York closed at $48.51. That’s under the low reached between March 26, this year’s high, and April 3, oil’s subsequent peak.“Our downside bias remains,” Barclays’s analysts said. “Bounces should be seen as an opportunity to go short. Bigger picture, the double-top targets a move toward $42.”
Crude futures on the New York Mercantile Exchange last traded at $48.88 a barrel as of 10:59 a.m. in London. On March 26, the June contract reached $56.10, the highest this year, and rose again to $55.85 on April 4.In addition, on April 20 prices closed below a support level formed by a three-month trend-line. This line will now act as a resistance level, impeding rallies above $52.27, according to Barclays.
Oil “completed a month-long double top formation” on April 20, Barclays analysts led by Chief European Technical Strategist Phil Roberts said in a report. The contract for June settlement in New York closed at $48.51. That’s under the low reached between March 26, this year’s high, and April 3, oil’s subsequent peak.“Our downside bias remains,” Barclays’s analysts said. “Bounces should be seen as an opportunity to go short. Bigger picture, the double-top targets a move toward $42.”
Crude futures on the New York Mercantile Exchange last traded at $48.88 a barrel as of 10:59 a.m. in London. On March 26, the June contract reached $56.10, the highest this year, and rose again to $55.85 on April 4.In addition, on April 20 prices closed below a support level formed by a three-month trend-line. This line will now act as a resistance level, impeding rallies above $52.27, according to Barclays.
StanChart Predicts:Copper to Extend Rally
(Bloomberg) -- Copper may rise to more than $5,000 a ton by the end of next month, a level not seen since October, as the metal retraces some of the drop from 2008’s record, Standard Chartered Bank said, citing trading patterns.After a so-called consolidation, the contract may climb to $5,156 a ton within a month, a 38.2 percent retracement of the fall from the 2008 high, London-based David Barclay, the bank’s commodity strategist, wrote in a report yesterday. The 50-week momentum indicator was still “turning higher,” Barclay wrote.
Copper for delivery in three months on the London Metal Exchange has advanced 43 percent this year, and traded at $4,394.75 at 9:46 a.m. Singapore time. The metal, used in pipes and wires, reached a record $8,940 a ton July 2.“The weekly chart still shows a basing pattern forming, with the 61.8 percent retracement of the fall from the $8,940 peak attracting at $6,601,” Barclay wrote, referring to a percentage that’s part of the Fibonacci sequence.
Fibonacci analysis is based on the theory that prices rise or fall by certain percentages after reaching a high or low. A break of a so-called level of resistance indicates that a price may move to the next level, while a failure indicates a trend may stall. Sell orders may be clustered at resistance levels.After reaching $5,156 a ton, copper may target $5,878, Barclay wrote, citing a basing pattern, which on charts resembles a series of trades in a narrow range. Once a share or asset’s price breaches the top of a range, a rally may follow.
Copper for delivery in three months on the London Metal Exchange has advanced 43 percent this year, and traded at $4,394.75 at 9:46 a.m. Singapore time. The metal, used in pipes and wires, reached a record $8,940 a ton July 2.“The weekly chart still shows a basing pattern forming, with the 61.8 percent retracement of the fall from the $8,940 peak attracting at $6,601,” Barclay wrote, referring to a percentage that’s part of the Fibonacci sequence.
Fibonacci analysis is based on the theory that prices rise or fall by certain percentages after reaching a high or low. A break of a so-called level of resistance indicates that a price may move to the next level, while a failure indicates a trend may stall. Sell orders may be clustered at resistance levels.After reaching $5,156 a ton, copper may target $5,878, Barclay wrote, citing a basing pattern, which on charts resembles a series of trades in a narrow range. Once a share or asset’s price breaches the top of a range, a rally may follow.
Daily Technical Analysis Forex/DJIA/Gold
Daily Forex Technicals | Written by Mizuho Corporate Bank |
EUro
Comment: Trying to base and bounce from the bottom of a large 'flag' formation, but could do a lot better if momentum were to turn bullish. Expect another cautious push higher today. Strategy: Attempt small longs at 1.3025; stop below 1.2850. Add to longs on a sustained break above 1.3050 and again above 1.3100 for 1.3400 short term.Direction of Trade: →↗
Support Resistance
1.2980 " 1.3038
1.2885* 1.3078
1.2855 1.3095
1.2825 1.314
1.2765 1.3185
GBPUSD
Comment: Bouncing from the top of the Ichimoku 'cloud' and note that the 26-day moving average has moved up sharply to 1.4590. Bullish momentum might increase if we hold above 1.4500 today.
Strategy: Attempt longs at 1.4555; stop below 1.4350. Short term target 1.4700 then 1.4850. Direction of Trade: →↗
Support Resistance
1.4500 " 1.4687
1.4467/1.4443 1.4708
1.4397* 1.478
1.4275 1.4855
1.424 1.496
USDJPY
Comment: Still holding just above the 50% retracement level, between the 9 and 26-day moving averages. Allow for yet more of the same today with chart levels not holding well, so that an initial dip to a new recent low is reversed later in the day.
Strategy: Attempt longs at 98.00; stop well below 97.50. First target 99.00/99.50Direction of Trade: →
Support Resistance
97.73 " 98.5
97.66/97.50* 98.92/99.00
97.25 99.5
97.1 99.69/99.77
96.5 100
Daily Forex Technicals | Written by ecPulse.com
EURO
The Euro versus the Dollar pair declined to form a double bottom at 1.2885 before rebounding back to the pivotal resistance level for the intraday trend at 1.3000 where it was able to breach this level as it was supported by the bullish technical pattern with a neckline at 1.3000 (as seen in the secondary image). This pattern is targeting the 1.3110 level which could be seen as a retest for the level before reversing back to the downside to continue the short term trend targeting 1.2770 and 1.2500 respectively. The decline remains as far as 1.3110 is intact.The trading range for today is among the key support at 1.2770 and the key resistance at 1.3380.The general trend is to the downside as far as 1.4710 remains intact with targets at 1.2120
Support: 1.3000, 1.2955, 1.2885, 1.2845, 1.2800
Resistance: 1.3110, 1.3180, 1.3215, 1.3260, 1.3295
Recommendation: According to our analysis, sell the pair below 1.3110 with targets at 1.3000 and stop loss with four-hour closing above 1.3200
GBP
The GBP/USD pair was able to breach the key support at 1.4480 yet the gradual decline failed to pass the 1.4400 level as it rebounded once again to the upside to return near 1.4480. On the four hour charts, a clear close below 1.4480 wasn't witnessed where we expect the pair to continue the incline towards levels among 1.4575 – 1.4590. We still hold our outlook to the downside however, targeting 1.4340 and 1.4240 as far as 1.4590 remains intact.The trading range for today is among the key support at 1.4240 and the key resistance at 1.5280. The general trend is to the downside as far as 1.5270 remains intact with targets at 1.3440.
Support: 1.4480, 1.4400, 1.4340, 1.4310, 1.4270
Resistance: 1.4575, 1.4590, 1.4655, 1.4705, 1.4745
Recommendation: According to our analysis, sell the pair below 1.4480 with targets at 1.4340 and stop loss with four hour closing above 1.4590
JPY
The Dollar versus Japanese Yen continued to decline as it reached our suggested targets around 97.40 where it still has more room to decline yet needs to correct to the upside to escape the oversold areas as seen on momentum indicators before reversing to the downside in an attempt to reach the key support for the descending channel at 96.65. This decline remains as far as 98.70 is intact.The trading range for today is among the keys support at 96.10 and the key resistance at 101.45.
The general trend remains to the downside as far as 102.60 remains intact with targets at 84.95 and 82.60
Support: 97.40, 96.90, 96.65, 96.10, 95.70
Resistance: 98.15, 98.70, 99.40, 99.70, 100.75
Recommendation: According to our analysis, sell the pair below 98.15 with targets at 96.65 and stop loss with four-hour closing above 98.70
CHF
The Dollar versus the Swissy declined yesterday to reach levels below the support as seen in the above image where it is currently attempting to confirm the breach of the neckline for the bearish technical pattern at 1.645 with targets at 1.1535. We expect the pair to incline after reaching the target to return to the short term upside trend which requires the breach of 1.1840 after breaching the 76.4% at 1.1725.The trading range for today is among the key support at 1.1335 and the key resistance at 1.1900. The general trend is to the upside as far as 1.0570 remains intact with targets at 1.2245
Support: 1.1620, 1.1535, 1.1500, 1.1460, 1.1405
Resistance: 1.1645, 1.1725, 1.1840, 1.1900, 1.1965
Recommendation: According to our analysis, sell the pair below 1.1645 with targets at 1.1535 and stop loss with four hour closing above 1.1725
Daily Forex Technicals | Written by India Forex
Gold: Gold is pressing against the $895 levels (21 Daily EMA). The daily charts are also correcting towards the overbought region. Upside could be restricted around $903 cluster resistance where shorts for intraday $10 could be considered. (Gold: $891.00)
Dollar index :DX is seen consolidating below the 87.20 strong resistance. The bias for DX remains bullish above the 82.30-key support. The chart is overbought and some retracement could be expected upto 86.03 (minor support) before a rally. Bullish.
Daily Forex Technicals | Written by FXtechtrade
DOW JONES INDEX
Today's support: - 7848.20, 7817.72 and 7796.30(main), where a delay and correction may happen. Break of the latter will give 7782.19, where correction also can be. Then follows 7768.11. Be there a strong impulse, we would see 7734.38. Continuation will bring 7716.10 and 7995.00.
Today's resistance: - 7920.08, 7967.90 and 7798.64(main), where a delay and correction may happen. Break would bring 8032.50, where a correction may happen. Then follows 8048.36, where a delay and correction could also be. Be there a strong impulse, we'd see 8071.77. Continuation would
EUro
Comment: Trying to base and bounce from the bottom of a large 'flag' formation, but could do a lot better if momentum were to turn bullish. Expect another cautious push higher today. Strategy: Attempt small longs at 1.3025; stop below 1.2850. Add to longs on a sustained break above 1.3050 and again above 1.3100 for 1.3400 short term.Direction of Trade: →↗
Support Resistance
1.2980 " 1.3038
1.2885* 1.3078
1.2855 1.3095
1.2825 1.314
1.2765 1.3185
GBPUSD
Comment: Bouncing from the top of the Ichimoku 'cloud' and note that the 26-day moving average has moved up sharply to 1.4590. Bullish momentum might increase if we hold above 1.4500 today.
Strategy: Attempt longs at 1.4555; stop below 1.4350. Short term target 1.4700 then 1.4850. Direction of Trade: →↗
Support Resistance
1.4500 " 1.4687
1.4467/1.4443 1.4708
1.4397* 1.478
1.4275 1.4855
1.424 1.496
USDJPY
Comment: Still holding just above the 50% retracement level, between the 9 and 26-day moving averages. Allow for yet more of the same today with chart levels not holding well, so that an initial dip to a new recent low is reversed later in the day.
Strategy: Attempt longs at 98.00; stop well below 97.50. First target 99.00/99.50Direction of Trade: →
Support Resistance
97.73 " 98.5
97.66/97.50* 98.92/99.00
97.25 99.5
97.1 99.69/99.77
96.5 100
Daily Forex Technicals | Written by ecPulse.com
EURO
The Euro versus the Dollar pair declined to form a double bottom at 1.2885 before rebounding back to the pivotal resistance level for the intraday trend at 1.3000 where it was able to breach this level as it was supported by the bullish technical pattern with a neckline at 1.3000 (as seen in the secondary image). This pattern is targeting the 1.3110 level which could be seen as a retest for the level before reversing back to the downside to continue the short term trend targeting 1.2770 and 1.2500 respectively. The decline remains as far as 1.3110 is intact.The trading range for today is among the key support at 1.2770 and the key resistance at 1.3380.The general trend is to the downside as far as 1.4710 remains intact with targets at 1.2120
Support: 1.3000, 1.2955, 1.2885, 1.2845, 1.2800
Resistance: 1.3110, 1.3180, 1.3215, 1.3260, 1.3295
Recommendation: According to our analysis, sell the pair below 1.3110 with targets at 1.3000 and stop loss with four-hour closing above 1.3200
GBP
The GBP/USD pair was able to breach the key support at 1.4480 yet the gradual decline failed to pass the 1.4400 level as it rebounded once again to the upside to return near 1.4480. On the four hour charts, a clear close below 1.4480 wasn't witnessed where we expect the pair to continue the incline towards levels among 1.4575 – 1.4590. We still hold our outlook to the downside however, targeting 1.4340 and 1.4240 as far as 1.4590 remains intact.The trading range for today is among the key support at 1.4240 and the key resistance at 1.5280. The general trend is to the downside as far as 1.5270 remains intact with targets at 1.3440.
Support: 1.4480, 1.4400, 1.4340, 1.4310, 1.4270
Resistance: 1.4575, 1.4590, 1.4655, 1.4705, 1.4745
Recommendation: According to our analysis, sell the pair below 1.4480 with targets at 1.4340 and stop loss with four hour closing above 1.4590
JPY
The Dollar versus Japanese Yen continued to decline as it reached our suggested targets around 97.40 where it still has more room to decline yet needs to correct to the upside to escape the oversold areas as seen on momentum indicators before reversing to the downside in an attempt to reach the key support for the descending channel at 96.65. This decline remains as far as 98.70 is intact.The trading range for today is among the keys support at 96.10 and the key resistance at 101.45.
The general trend remains to the downside as far as 102.60 remains intact with targets at 84.95 and 82.60
Support: 97.40, 96.90, 96.65, 96.10, 95.70
Resistance: 98.15, 98.70, 99.40, 99.70, 100.75
Recommendation: According to our analysis, sell the pair below 98.15 with targets at 96.65 and stop loss with four-hour closing above 98.70
CHF
The Dollar versus the Swissy declined yesterday to reach levels below the support as seen in the above image where it is currently attempting to confirm the breach of the neckline for the bearish technical pattern at 1.645 with targets at 1.1535. We expect the pair to incline after reaching the target to return to the short term upside trend which requires the breach of 1.1840 after breaching the 76.4% at 1.1725.The trading range for today is among the key support at 1.1335 and the key resistance at 1.1900. The general trend is to the upside as far as 1.0570 remains intact with targets at 1.2245
Support: 1.1620, 1.1535, 1.1500, 1.1460, 1.1405
Resistance: 1.1645, 1.1725, 1.1840, 1.1900, 1.1965
Recommendation: According to our analysis, sell the pair below 1.1645 with targets at 1.1535 and stop loss with four hour closing above 1.1725
Daily Forex Technicals | Written by India Forex
Gold: Gold is pressing against the $895 levels (21 Daily EMA). The daily charts are also correcting towards the overbought region. Upside could be restricted around $903 cluster resistance where shorts for intraday $10 could be considered. (Gold: $891.00)
Dollar index :DX is seen consolidating below the 87.20 strong resistance. The bias for DX remains bullish above the 82.30-key support. The chart is overbought and some retracement could be expected upto 86.03 (minor support) before a rally. Bullish.
Daily Forex Technicals | Written by FXtechtrade
DOW JONES INDEX
Today's support: - 7848.20, 7817.72 and 7796.30(main), where a delay and correction may happen. Break of the latter will give 7782.19, where correction also can be. Then follows 7768.11. Be there a strong impulse, we would see 7734.38. Continuation will bring 7716.10 and 7995.00.
Today's resistance: - 7920.08, 7967.90 and 7798.64(main), where a delay and correction may happen. Break would bring 8032.50, where a correction may happen. Then follows 8048.36, where a delay and correction could also be. Be there a strong impulse, we'd see 8071.77. Continuation would
Wednesday, April 22, 2009
IHSG Masih Berpotensi Terkoreksi
Market Review
IHSG kembali terkoreksi pada hari Rabu, meski sempat mencapai level tertinggi sejak 6 Oktober 2008 di level 1,674.92 di sesi pertama perdagangan. Tetapi aksi penjualan di sejumlah bursa saham Asia di sesi siang dan laporan politik partai Golkar memutuskan untuk tidak berkoalisi dengan Partai Demokrat, menimbulkan spekulasi kondisi tersebut akan mengancam kinerja bisnis perusahaan grup Bakrie yang saat ini masih menjabat sebagai Menko Kesra, menyebabkan sejumlah saham dari grup Bakrie, bahkan sebagian sempat mengalami auto reject bawah (BNBR, BTEL, DEWA, BUMI, ELTY). IHSG ditutup melemah 13.617 poin (-0.84%) di level 1,615.23. Imbas trend penurunan harga komoditi dan pelemahan rupiah (Rp 10,850/USD), telah memicu aksi profit-taking. Investor asing mencatat net selling sebesar Rp 15.46 miliar, lebih rendah dibandingkan net selling Rp 461.05 miliar hari Selasa (21/04).
Komentar positif Treasury AS Geithner yang masih membuka ruang memberikan bantuan finansial ke sektor finansial AS, gagal mengangkat indeks MSCI Asia-Pacific (-0.2%), berkat lembaga pemeringkat S&P downgrade saham Takefuji, Promise, Acom, Sanyo Jepang dan IMF merevisi kembali perkiraan kerugian finansial menjadi $ 2.7 triliun dari $ 2.2 triliun.
IHSG Outlook
Peluang penurunan IHSG pada hari Kamis semakin meningkat dari isu negatif pecahnya koalisi Golkar-Demokrat yang memberikan sentimen negatif kepada saham grup bakrie yang telah menopang kinerja IHSG dalam beberapa hari terakhir, diikuti trend penurunan harga komoditi saat ini (minyak, emas, timah, nikel) dan pelemahan rupiah terhadap dolar setelah sempat menguat ke level tertinggi 10,600 di pekan lalu, dapat memicu aksi profit-taking di saham komoditas dan finansial. Musim earnings (finansial) di AS awal pekan ini juga memberikan sentimen negaif berimbas negatif kepada saham regional Asia. Meski laju penurunan IHSG dapat dibatasi oleh solidnya laporan keuangan saham unggulan baru-baru ini dan perkiraan data inflasi April masih terkendali dan BI dapat menurunkan suku bunga di awal bulan Mei menjadi 7.25%.
Stock Picks:
* ADRO
* ARTI
Technical Analysis:
Sesuai dengan perkiraan hari Rabu, IHSG akhirnya terkoreksi untuk hari kedua, setelah mendapatkan signal bearish reversal dari pola candle shooting star, penutupan dibawah 5-day MA (1,632) dan 200-day MA (1,624), kegagalan ditutup diatas upper channel 1,672 kendati telah mencapai 1,674.9 (false break), tingginya volume dalam 2 hari penurunan, diikuti kondisi yang overbought di indikator teknikal MACD, stochastic dan ADX. Kondisi tersebut seharusnya membatasi potensi kenaikan IHSG dan berpeluang terkoreksi turun lebih lanjut pada akhir pekan ini. Trend jangka pendek yang bullish terancam berbalik arah jika IHSG ditutup dibawah 1,581 (10-day MA) dan 1,529 (uptrend line), dapat mendukung selesainya wave 3 impulse dan berpotensi membuat koreksi abc dalam koreksi wave IV. Sementara penutupan diatas 1,624 dapat menggagalkan skenario tersebut.
Resistance: 1794.69/1730.23/1677.31/1645.08. PP 1633.54
Support : 1612.85/1580.62/1536.85/1472.39/1440.16
Regional Outlook
Setelah Treasury Geithner hari Selasa memberikan pandangan kepada sektor finansial yang positif untuk Wall Street. Pada hari Rabu, earnings emiten di AS, terlihat kembali mengecewakan terutama di sektor finansial. Morgan Stanley catat kerugian lebih dari perkiraan di Q1 209 (mengikuti jejak BOA & bank of New York Mellon), laba Boeing tidak capai target, meski laba McDonalds, AT&T dan Altria tercatat diatas perkiraan pasar. Fundamental (S&P 500 perkirakan earnings -37% di Q1), sentimen (kerugian finansial, kondisi ekonomi Inggris memburuk) dan teknikal (bearish divergence) membebani kinerja indeks regional.
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IHSG kembali terkoreksi pada hari Rabu, meski sempat mencapai level tertinggi sejak 6 Oktober 2008 di level 1,674.92 di sesi pertama perdagangan. Tetapi aksi penjualan di sejumlah bursa saham Asia di sesi siang dan laporan politik partai Golkar memutuskan untuk tidak berkoalisi dengan Partai Demokrat, menimbulkan spekulasi kondisi tersebut akan mengancam kinerja bisnis perusahaan grup Bakrie yang saat ini masih menjabat sebagai Menko Kesra, menyebabkan sejumlah saham dari grup Bakrie, bahkan sebagian sempat mengalami auto reject bawah (BNBR, BTEL, DEWA, BUMI, ELTY). IHSG ditutup melemah 13.617 poin (-0.84%) di level 1,615.23. Imbas trend penurunan harga komoditi dan pelemahan rupiah (Rp 10,850/USD), telah memicu aksi profit-taking. Investor asing mencatat net selling sebesar Rp 15.46 miliar, lebih rendah dibandingkan net selling Rp 461.05 miliar hari Selasa (21/04).
Komentar positif Treasury AS Geithner yang masih membuka ruang memberikan bantuan finansial ke sektor finansial AS, gagal mengangkat indeks MSCI Asia-Pacific (-0.2%), berkat lembaga pemeringkat S&P downgrade saham Takefuji, Promise, Acom, Sanyo Jepang dan IMF merevisi kembali perkiraan kerugian finansial menjadi $ 2.7 triliun dari $ 2.2 triliun.
IHSG Outlook
Peluang penurunan IHSG pada hari Kamis semakin meningkat dari isu negatif pecahnya koalisi Golkar-Demokrat yang memberikan sentimen negatif kepada saham grup bakrie yang telah menopang kinerja IHSG dalam beberapa hari terakhir, diikuti trend penurunan harga komoditi saat ini (minyak, emas, timah, nikel) dan pelemahan rupiah terhadap dolar setelah sempat menguat ke level tertinggi 10,600 di pekan lalu, dapat memicu aksi profit-taking di saham komoditas dan finansial. Musim earnings (finansial) di AS awal pekan ini juga memberikan sentimen negaif berimbas negatif kepada saham regional Asia. Meski laju penurunan IHSG dapat dibatasi oleh solidnya laporan keuangan saham unggulan baru-baru ini dan perkiraan data inflasi April masih terkendali dan BI dapat menurunkan suku bunga di awal bulan Mei menjadi 7.25%.
Stock Picks:
* ADRO
* ARTI
Technical Analysis:
Sesuai dengan perkiraan hari Rabu, IHSG akhirnya terkoreksi untuk hari kedua, setelah mendapatkan signal bearish reversal dari pola candle shooting star, penutupan dibawah 5-day MA (1,632) dan 200-day MA (1,624), kegagalan ditutup diatas upper channel 1,672 kendati telah mencapai 1,674.9 (false break), tingginya volume dalam 2 hari penurunan, diikuti kondisi yang overbought di indikator teknikal MACD, stochastic dan ADX. Kondisi tersebut seharusnya membatasi potensi kenaikan IHSG dan berpeluang terkoreksi turun lebih lanjut pada akhir pekan ini. Trend jangka pendek yang bullish terancam berbalik arah jika IHSG ditutup dibawah 1,581 (10-day MA) dan 1,529 (uptrend line), dapat mendukung selesainya wave 3 impulse dan berpotensi membuat koreksi abc dalam koreksi wave IV. Sementara penutupan diatas 1,624 dapat menggagalkan skenario tersebut.
Resistance: 1794.69/1730.23/1677.31/1645.08. PP 1633.54
Support : 1612.85/1580.62/1536.85/1472.39/1440.16
Regional Outlook
Setelah Treasury Geithner hari Selasa memberikan pandangan kepada sektor finansial yang positif untuk Wall Street. Pada hari Rabu, earnings emiten di AS, terlihat kembali mengecewakan terutama di sektor finansial. Morgan Stanley catat kerugian lebih dari perkiraan di Q1 209 (mengikuti jejak BOA & bank of New York Mellon), laba Boeing tidak capai target, meski laba McDonalds, AT&T dan Altria tercatat diatas perkiraan pasar. Fundamental (S&P 500 perkirakan earnings -37% di Q1), sentimen (kerugian finansial, kondisi ekonomi Inggris memburuk) dan teknikal (bearish divergence) membebani kinerja indeks regional.
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www.universalbroker.co.id
Yen, Dollar Rise on Concern Stress Tests May Show More Losses
(Bloomberg) -- The yen and the dollar rose on speculation stress tests on the largest U.S. banks will show additional loan losses, boosting demand for the two currencies as a refuge from the global financial crisis.The yen also advanced after a government report showed Japan unexpectedly posted a trade surplus in March, reviving the allure of the Japanese currency as a shelter from the worldwide recession. Australia’s dollar weakened against the greenback and the yen after a report showed the inflation rate fell to an 18- month low, giving policy makers more room to cut interest rates.
The yen climbed to 126.83 per euro as of 1:36 p.m. in Tokyo from 127.81 in New York yesterday, when it reached 126.09, the highest level since March 16. Japan’s currency advanced to 98.16 against the dollar from 98.73.The dollar rose to $1.2921 against the euro from $1.2948 in New York yesterday. It touched $1.2889 on April 20, the strongest since March 16. The U.S. currency advanced to $1.4611 versus the British pound from $1.4673.Australia’s dollar declined to 70.31 U.S. cents from 71.14 cents in New York yesterday, and dropped to 69.01 yen from 70.24 yen. New Zealand’s dollar fell to 55.49 cents from 56.40 cents, and weakened to 54.47 yen from 55.66 yen.
Stress Tests
The yen rose versus all 16 most-active currencies after a regulatory official said the U.S. government’s stress tests on the 19 largest U.S. banks are increasingly focusing on the quality of loans the lenders made after finding wide variations in underwriting standards. The remark provides insight into the April 24 release of the regulator’s methodology for the tests. The person also said the tests don’t amount to solvency judgments, noting that estimates of each bank’s losses over the coming two years won’t necessarily equal the amount of new capital it needs to raise.The Federal Reserve plans to release results of “stress tests” on banks on May 4. The tests are being used to determine whether the companies have enough capital to cover losses over the next two years should the recession worsen.Worldwide losses tied to loans and securitized assets may reach $4.1 trillion by the end of 2010 as the recession and the credit crisis exact a higher toll on financial institutions, the International Monetary Fund said yesterday.
‘Positive Influence’
The dollar typically strengthens in times of financial turmoil as investors take refuge in the greenback as the world’s reserve currency. The yen also gains as Japan’s trade surplus makes the currency attractive as it means the nation does not have to rely on overseas lenders.The Dollar Index, used by the ICE to track the greenback against the euro, yen, pound, Canadian dollar, Swiss franc and Swedish krona, was little changed at 86.581.Japan’s currency also advanced after the Ministry of Finance said custom-cleared exports declined 45.6 percent in March from a year earlier, following a record drop of 49.4 percent in February. Japan’s gross domestic product may have contracted at an annual 10.9 percent pace in the first quarter, economists surveyed by Bloomberg predict, after shrinking at a 12.1 percent pace in the previous three months, the steepest drop since 1974.
Australian Inflation
Australia’s dollar fell toward a three-week low versus the dollar and the yen after the Bureau of Statistics said today annual inflation slowed, backing the case for the Reserve Bank of Australia to cut interest rates. The consumer price index in Australia rose 2.5 percent in the first quarter from a year earlier, after gaining 3.7 percent in the fourth quarter, the Bureau of Statistics said in Sydney today.
ECB Discord
The euro traded near the lowest level in more than a month against the dollar and yen on lingering concern disagreement is deepening among European Central Bank policy makers on measures needed to combat the recession in the region. ECB member and Belgian central bank Governor Guy Quaden will speak at a press conference today. ECB President Jean- Claude Trichet said in Tokyo on April 18 he wouldn’t exclude another “very measured” rate cut, though a zero interest-rate policy wouldn’t be appropriate for the bank.Council members George Provopoulos from Greece and Athanasios Orphanides of Cyprus indicated they may support cutting the target rate to less than 1 percent and buying debt to pump money into the economy. The ECB’s next meeting is May 7.The index of investor and analyst expectations turned positive for the first time in almost two years, the ZEW Center for European Economic Research said yesterday. The ZEW index rose to 13, the highest level since June 2007, from minus 3.5 in March.
Indonesia’s Rupiah Advances
Indonesia’s rupiah rose, snapping two days of losses, on speculation investors will buy emerging- market assets after U.S. Treasury Secretary Timothy Geithner said most U.S. banks have enough capital. The rupiah is the best performer this month among Asia’s 10 most-traded currencies as overseas investors have added holdings of the nation’s stocks and bonds. The currency traded near a four-month high as the Jakarta Composite Index of shares rose for the seventh time in eight days.The rupiah rose 0.3 percent to 10,840 per dollar as of 10:28 a.m. in Jakarta, according to data compiled by Bloomberg. The currency reached 10,660 on April 16, the highest level since Dec. 18. It traded between 10,670 and 10,930 today.
The MSCI-Asia Pacific Index of shares advanced 0.2 percent today, with the Jakarta Composite Index of shares gaining 2.1 percent, after Geithner told lawmakers “the vast majority of banks have more capital than they need.”Foreign investors bought $179.8 million more Indonesian equities than they sold this month, according to stock exchange data. Overseas holdings of government bonds rose to 83.15 trillion rupiah ($7.7 billion) as of April 17, from 80.11 trillion rupiah on April 3, according to the Ministry of Finance.Non-deliverable forwards contracts signal traders are betting the rupiah will drop 0.8 percent to 10,923 over the next month, compared with expectations for a spot rate of 10,905 yesterday. Forwards are agreements in which assets are bought and sold at current prices for delivery at a future specified time and date.
The yen climbed to 126.83 per euro as of 1:36 p.m. in Tokyo from 127.81 in New York yesterday, when it reached 126.09, the highest level since March 16. Japan’s currency advanced to 98.16 against the dollar from 98.73.The dollar rose to $1.2921 against the euro from $1.2948 in New York yesterday. It touched $1.2889 on April 20, the strongest since March 16. The U.S. currency advanced to $1.4611 versus the British pound from $1.4673.Australia’s dollar declined to 70.31 U.S. cents from 71.14 cents in New York yesterday, and dropped to 69.01 yen from 70.24 yen. New Zealand’s dollar fell to 55.49 cents from 56.40 cents, and weakened to 54.47 yen from 55.66 yen.
Stress Tests
The yen rose versus all 16 most-active currencies after a regulatory official said the U.S. government’s stress tests on the 19 largest U.S. banks are increasingly focusing on the quality of loans the lenders made after finding wide variations in underwriting standards. The remark provides insight into the April 24 release of the regulator’s methodology for the tests. The person also said the tests don’t amount to solvency judgments, noting that estimates of each bank’s losses over the coming two years won’t necessarily equal the amount of new capital it needs to raise.The Federal Reserve plans to release results of “stress tests” on banks on May 4. The tests are being used to determine whether the companies have enough capital to cover losses over the next two years should the recession worsen.Worldwide losses tied to loans and securitized assets may reach $4.1 trillion by the end of 2010 as the recession and the credit crisis exact a higher toll on financial institutions, the International Monetary Fund said yesterday.
‘Positive Influence’
The dollar typically strengthens in times of financial turmoil as investors take refuge in the greenback as the world’s reserve currency. The yen also gains as Japan’s trade surplus makes the currency attractive as it means the nation does not have to rely on overseas lenders.The Dollar Index, used by the ICE to track the greenback against the euro, yen, pound, Canadian dollar, Swiss franc and Swedish krona, was little changed at 86.581.Japan’s currency also advanced after the Ministry of Finance said custom-cleared exports declined 45.6 percent in March from a year earlier, following a record drop of 49.4 percent in February. Japan’s gross domestic product may have contracted at an annual 10.9 percent pace in the first quarter, economists surveyed by Bloomberg predict, after shrinking at a 12.1 percent pace in the previous three months, the steepest drop since 1974.
Australian Inflation
Australia’s dollar fell toward a three-week low versus the dollar and the yen after the Bureau of Statistics said today annual inflation slowed, backing the case for the Reserve Bank of Australia to cut interest rates. The consumer price index in Australia rose 2.5 percent in the first quarter from a year earlier, after gaining 3.7 percent in the fourth quarter, the Bureau of Statistics said in Sydney today.
ECB Discord
The euro traded near the lowest level in more than a month against the dollar and yen on lingering concern disagreement is deepening among European Central Bank policy makers on measures needed to combat the recession in the region. ECB member and Belgian central bank Governor Guy Quaden will speak at a press conference today. ECB President Jean- Claude Trichet said in Tokyo on April 18 he wouldn’t exclude another “very measured” rate cut, though a zero interest-rate policy wouldn’t be appropriate for the bank.Council members George Provopoulos from Greece and Athanasios Orphanides of Cyprus indicated they may support cutting the target rate to less than 1 percent and buying debt to pump money into the economy. The ECB’s next meeting is May 7.The index of investor and analyst expectations turned positive for the first time in almost two years, the ZEW Center for European Economic Research said yesterday. The ZEW index rose to 13, the highest level since June 2007, from minus 3.5 in March.
Indonesia’s Rupiah Advances
Indonesia’s rupiah rose, snapping two days of losses, on speculation investors will buy emerging- market assets after U.S. Treasury Secretary Timothy Geithner said most U.S. banks have enough capital. The rupiah is the best performer this month among Asia’s 10 most-traded currencies as overseas investors have added holdings of the nation’s stocks and bonds. The currency traded near a four-month high as the Jakarta Composite Index of shares rose for the seventh time in eight days.The rupiah rose 0.3 percent to 10,840 per dollar as of 10:28 a.m. in Jakarta, according to data compiled by Bloomberg. The currency reached 10,660 on April 16, the highest level since Dec. 18. It traded between 10,670 and 10,930 today.
The MSCI-Asia Pacific Index of shares advanced 0.2 percent today, with the Jakarta Composite Index of shares gaining 2.1 percent, after Geithner told lawmakers “the vast majority of banks have more capital than they need.”Foreign investors bought $179.8 million more Indonesian equities than they sold this month, according to stock exchange data. Overseas holdings of government bonds rose to 83.15 trillion rupiah ($7.7 billion) as of April 17, from 80.11 trillion rupiah on April 3, according to the Ministry of Finance.Non-deliverable forwards contracts signal traders are betting the rupiah will drop 0.8 percent to 10,923 over the next month, compared with expectations for a spot rate of 10,905 yesterday. Forwards are agreements in which assets are bought and sold at current prices for delivery at a future specified time and date.
Gold and Silver Suffer Technical Deterioration
By: Clive_Maund
Both gold and silver have suffered technical deterioration over the past week with the result that they are now close to aborting the short to medium-term bullish scenario that was set out in the last update. Meanwhile, large Precious Metals shares are on the point of breaking down from their shallow uptrends in force from December - January after further losses this past week. As we can see on its 6-month gold has not broken down below key support - yet, and it may even be at a buy spot right now, however, there are two external factors suggesting that the risk of it breaking down has increased significantly. One is that silver has broken below its mid-March hammer low, which is a bearish development, and the other is that the dollar looks like it may be completing a minor base area.Returning to consideration of the gold chart we can see that last week's fall has not as yet resulted in it breaking below its early April low or below the 200-day moving average or below the support level shown. This confluence of supporting factors means that this is a very important zone, so if gold breaks below it, it could plunge way below the support of the downtrend channel shown. Traders may therefore want to set stops accordingly.
The dollar has held up remarkably well considering the magnitude of the mid-March plunge, which is still thought to have longer-term bearish implications. However, it has refused to break down from the major uptrend in force from last July and has instead formed what looks like a minor base area over the past few weeks above the important trendline so that it now looks ready to break above the line of resistance at 86 on the index to commence another significant upleg.
Traders should watch out for such as a breakout as it would be expected to "kick the ball downhill " as regards gold and silver which would be expected to drop sharply as a result. Note, however, that overall the dollar chart looks very bearish with a strongly converging Rising Wedge pattern evident on the chart. This implies that even if the dollar rises back up to, or at least towards, the top line of this converging channel, it is likely to be its last gasp, to be followed by severe decline. If this scenario plays out then we have clear guidelines.Upon the dollar breaking higher and rising towards the upper trendline gold and silver are likely to go into steep decline, and large gold and silver stocks, already buckling beneath the overhanging supply that we examined in yesterday's Marketwatch article on the site, are likely to get hammered. But an approach by the dollar to the upper trendline would be expected to throw up a major buying opportunity across the Precious Metals sector, as the Rising Wedge in the dollar index chart suggests that it will roll over and go into ragged retreat, although it would be wise to wait for the index to fail beneath this trendline just in case it breaks above it.
Both gold and silver have suffered technical deterioration over the past week with the result that they are now close to aborting the short to medium-term bullish scenario that was set out in the last update. Meanwhile, large Precious Metals shares are on the point of breaking down from their shallow uptrends in force from December - January after further losses this past week. As we can see on its 6-month gold has not broken down below key support - yet, and it may even be at a buy spot right now, however, there are two external factors suggesting that the risk of it breaking down has increased significantly. One is that silver has broken below its mid-March hammer low, which is a bearish development, and the other is that the dollar looks like it may be completing a minor base area.Returning to consideration of the gold chart we can see that last week's fall has not as yet resulted in it breaking below its early April low or below the 200-day moving average or below the support level shown. This confluence of supporting factors means that this is a very important zone, so if gold breaks below it, it could plunge way below the support of the downtrend channel shown. Traders may therefore want to set stops accordingly.
The dollar has held up remarkably well considering the magnitude of the mid-March plunge, which is still thought to have longer-term bearish implications. However, it has refused to break down from the major uptrend in force from last July and has instead formed what looks like a minor base area over the past few weeks above the important trendline so that it now looks ready to break above the line of resistance at 86 on the index to commence another significant upleg.
Traders should watch out for such as a breakout as it would be expected to "kick the ball downhill " as regards gold and silver which would be expected to drop sharply as a result. Note, however, that overall the dollar chart looks very bearish with a strongly converging Rising Wedge pattern evident on the chart. This implies that even if the dollar rises back up to, or at least towards, the top line of this converging channel, it is likely to be its last gasp, to be followed by severe decline. If this scenario plays out then we have clear guidelines.Upon the dollar breaking higher and rising towards the upper trendline gold and silver are likely to go into steep decline, and large gold and silver stocks, already buckling beneath the overhanging supply that we examined in yesterday's Marketwatch article on the site, are likely to get hammered. But an approach by the dollar to the upper trendline would be expected to throw up a major buying opportunity across the Precious Metals sector, as the Rising Wedge in the dollar index chart suggests that it will roll over and go into ragged retreat, although it would be wise to wait for the index to fail beneath this trendline just in case it breaks above it.
Stock Market Counter Trend Rally Ending Within Bear Market
By: Andre_Gratian
Current Position of the Market
SPX: Long-term trend - Down! The very-long-term cycles have taken over and if they make their lows when expected, the bear market which started in October 2007 should continue until 2012-2014. This would imply that much lower prices lie ahead.
SPX: Intermediate trend - The index has started a counter-trend rally of a corrective nature. The "A" part of that correction could have come to an end this past Friday.Analysis of the short-term trend is done on a daily basis with the help of hourly charts. It is an important adjunct to the analysis of daily and weekly charts which determines the course of longer market trends.Daily market analysis of the short term trend is reserved for subscribers. If you would like to sign up for a FREE 4-week trial period of daily comments, please let me know at ajg@cybertrails.com .
Overview:
I am becoming more and more convinced that since the May 6th 667 low, we are in a corrective rally -- probably of an A-B-C nature -- and it looks as if the "A" wave came to an end this past Friday. This is based on the position of the indicators vs. price that we will examine on the charts later on. This is our first "real" bear market rally (probably intermediate wave 4) since the beginning of the downtrend from October 2007, and it gives every indication of lasting a few more weeks. The total bear market will last so long that future analysts may argue whether it was one long bear market, or two consecutive ones. Whatever it will be called in retrospect, we are approximately one third of the way through the whole process.If this is correct, the entire decline could take the form of a giant zig-zag, the first one ending toward the end of this year or early next, followed by a very large corrective wave lasting over a year, and then the second "bear market" starting in 2011. It's better to have a scenario in mind than none at all and, based on Cycles and Elliott Wave, this is at least a plausible one. It will be interesting to see if it turns out to be correct.
Looking beyond the stock market and the economy, we have entered an accelerated period of universal cleansing which comes periodically as a necessity for man's natural evolution. The human race cannot move forward without getting rid of many of the beliefs that shaped the past, and this process normally takes place gradually and smoothly. But when we fall too far behind by trying to hang on to the old ways carried to excess, at some point Nature says "Enough, time to move on!" This is what human history teaches us repeatedly, and those who cannot, or will not, grasp this self-evident concept are the ones who suffer the most during the transition period. Nature seeks balanced progress. Mankind has a tendency to resist it! Balance is what the stock market seeks as well but seldom finds, and this is why it is always in a state of flux --short, intermediate and long term. Some of the best indicators are those that show when investors feel the market is overbought or oversold, in any time frame, and starts to lose momentum.
What's ahead?
Chart Pattern and Momentum
Momentum is the key word! When loss of momentum occurs, more and more investors are realizing that an index (stock, commodity...) has gone too far in one direction or the other -- in any time frame. More and more of them stop buying or selling while those who have a contrary opinion do the opposite. This creates deceleration in the price which is most visible in oscillators, and this is how we are warned that a reversal is about to take place.
But one can also see this coming just by looking at the price chart. On the weekly chart of the SPX which follows, I have drawn the channel which best represents the current phase of the total bear market. Now, look at the congestion level which exists between 850 and 950. A battle was fought there between the investors who felt the market had gone far enough and those who thought it would go farther. The latter won, and the market dropped some more. But as we went below 740, there was less trading. The index bounced back quickly because investors began to feel that it was oversold, and prices were at a bargain. Note also that price did not go all the way to the bottom of the channel, but started reversing before it got there, another sign of deceleration!
As for the oscillators, they failed to go anywhere close to their lows as the price went lower and created glaring positive divergence which announced a turn in the market.Now, let's say that the market begins to decline: do you see any sign of divergence in the indicators? Nope! So the odds strongly favor that if we do pull back (which is very probable because the overbought/oversold indicator is extremely overbought), it will simply be a correction in an uptrend and not the end of it. This is why I have labeled this as wave "A".We can see better why we should have a correction at this point on the daily chart. There is negative divergence in all the indicators, and several cycles are bottoming directly ahead of us. We are also at resistance caused by a former high and a parallel to the channel lines.
There are other reasons that we will discuss later, but let's move on to the hourly chart for shorter-term analysis.The price has been decelerating since 3/26, but it has also continued to move up from 3/30 in a wedge formation. The wedge now appears to have 5 complete waves, and the entire move from 667 is probably a corrective a-b-c pattern which is the first leg of the intermediate wave 4 discussed earlier. The fact that the middle (momentum) oscillator still does not show negative divergence offers the very unlikely possibility that we may have one more high before beginning a decline and breaking out of the wedge. But since negative divergence is present in the other two -- and particularly well-accented in the lower (A/D) oscillator -- this strongly favors Friday as a short-term top.We don't know yet, exactly how much of a correction we are going to have, but it should be to a level below the bottom of the black channel, at a minimum. 784 would be a good target followed by 770 if the decline continues.
Cycles
The Armstrong cycle was obviously a top, and since it was slated to come between the 16th and the 19th, the 17th fits right in!The other cycles lying directly ahead are clearly shown on the chart. The only ones that are not are those which constitute a cluster forming about 5/1.
Projections:
I had a long-standing projection to 860 for this rally, but as strength continued to be apparent and the pattern appeared incomplete, this is what I wrote to my subscribers on Friday morning in my Morning Comment:
Current Position of the Market
SPX: Long-term trend - Down! The very-long-term cycles have taken over and if they make their lows when expected, the bear market which started in October 2007 should continue until 2012-2014. This would imply that much lower prices lie ahead.
SPX: Intermediate trend - The index has started a counter-trend rally of a corrective nature. The "A" part of that correction could have come to an end this past Friday.Analysis of the short-term trend is done on a daily basis with the help of hourly charts. It is an important adjunct to the analysis of daily and weekly charts which determines the course of longer market trends.Daily market analysis of the short term trend is reserved for subscribers. If you would like to sign up for a FREE 4-week trial period of daily comments, please let me know at ajg@cybertrails.com .
Overview:
I am becoming more and more convinced that since the May 6th 667 low, we are in a corrective rally -- probably of an A-B-C nature -- and it looks as if the "A" wave came to an end this past Friday. This is based on the position of the indicators vs. price that we will examine on the charts later on. This is our first "real" bear market rally (probably intermediate wave 4) since the beginning of the downtrend from October 2007, and it gives every indication of lasting a few more weeks. The total bear market will last so long that future analysts may argue whether it was one long bear market, or two consecutive ones. Whatever it will be called in retrospect, we are approximately one third of the way through the whole process.If this is correct, the entire decline could take the form of a giant zig-zag, the first one ending toward the end of this year or early next, followed by a very large corrective wave lasting over a year, and then the second "bear market" starting in 2011. It's better to have a scenario in mind than none at all and, based on Cycles and Elliott Wave, this is at least a plausible one. It will be interesting to see if it turns out to be correct.
Looking beyond the stock market and the economy, we have entered an accelerated period of universal cleansing which comes periodically as a necessity for man's natural evolution. The human race cannot move forward without getting rid of many of the beliefs that shaped the past, and this process normally takes place gradually and smoothly. But when we fall too far behind by trying to hang on to the old ways carried to excess, at some point Nature says "Enough, time to move on!" This is what human history teaches us repeatedly, and those who cannot, or will not, grasp this self-evident concept are the ones who suffer the most during the transition period. Nature seeks balanced progress. Mankind has a tendency to resist it! Balance is what the stock market seeks as well but seldom finds, and this is why it is always in a state of flux --short, intermediate and long term. Some of the best indicators are those that show when investors feel the market is overbought or oversold, in any time frame, and starts to lose momentum.
What's ahead?
Chart Pattern and Momentum
Momentum is the key word! When loss of momentum occurs, more and more investors are realizing that an index (stock, commodity...) has gone too far in one direction or the other -- in any time frame. More and more of them stop buying or selling while those who have a contrary opinion do the opposite. This creates deceleration in the price which is most visible in oscillators, and this is how we are warned that a reversal is about to take place.
But one can also see this coming just by looking at the price chart. On the weekly chart of the SPX which follows, I have drawn the channel which best represents the current phase of the total bear market. Now, look at the congestion level which exists between 850 and 950. A battle was fought there between the investors who felt the market had gone far enough and those who thought it would go farther. The latter won, and the market dropped some more. But as we went below 740, there was less trading. The index bounced back quickly because investors began to feel that it was oversold, and prices were at a bargain. Note also that price did not go all the way to the bottom of the channel, but started reversing before it got there, another sign of deceleration!
As for the oscillators, they failed to go anywhere close to their lows as the price went lower and created glaring positive divergence which announced a turn in the market.Now, let's say that the market begins to decline: do you see any sign of divergence in the indicators? Nope! So the odds strongly favor that if we do pull back (which is very probable because the overbought/oversold indicator is extremely overbought), it will simply be a correction in an uptrend and not the end of it. This is why I have labeled this as wave "A".We can see better why we should have a correction at this point on the daily chart. There is negative divergence in all the indicators, and several cycles are bottoming directly ahead of us. We are also at resistance caused by a former high and a parallel to the channel lines.
There are other reasons that we will discuss later, but let's move on to the hourly chart for shorter-term analysis.The price has been decelerating since 3/26, but it has also continued to move up from 3/30 in a wedge formation. The wedge now appears to have 5 complete waves, and the entire move from 667 is probably a corrective a-b-c pattern which is the first leg of the intermediate wave 4 discussed earlier. The fact that the middle (momentum) oscillator still does not show negative divergence offers the very unlikely possibility that we may have one more high before beginning a decline and breaking out of the wedge. But since negative divergence is present in the other two -- and particularly well-accented in the lower (A/D) oscillator -- this strongly favors Friday as a short-term top.We don't know yet, exactly how much of a correction we are going to have, but it should be to a level below the bottom of the black channel, at a minimum. 784 would be a good target followed by 770 if the decline continues.
Cycles
The Armstrong cycle was obviously a top, and since it was slated to come between the 16th and the 19th, the 17th fits right in!The other cycles lying directly ahead are clearly shown on the chart. The only ones that are not are those which constitute a cluster forming about 5/1.
Projections:
I had a long-standing projection to 860 for this rally, but as strength continued to be apparent and the pattern appeared incomplete, this is what I wrote to my subscribers on Friday morning in my Morning Comment:
Daily Technical Analysis Forex/DJIA/Gold
Daily Forex Technicals | Written by FXtechtrade
EUR/USD
Today's support: - 1.2870(main), where correction is possible. Break would give 1.2855, where correction also may be. Then follows 1.2824. Break of the latter would result in 1.2783. If a strong impulse, we would see 1.2758. Continuation will give 1.2729 and 1.2701.Today's resistance: - 1.2966 and 1.2994(main). Break would give 1.3028, where a correction is possible. Then goes 1.3061. Break of the latter would result in 1.3098. If a strong impulse, we'd see 1.3118. Continuation will give 1.3143.
USD/JPY
Today's support: - 97.90 and 97.62(main). Break would bring 97.44, where correction is possible. Then 97.20, where a correction may also happen. Break of the latter will give 96.86. If a strong impulse, we would see 96.65. Continuation would give 96.33.Today's resistance: - 98.70, 99.22, 99.48 and 99.94(main), where a correction may happen. Break would bring 100.24, where also a correction may be. Then 100.51. If a strong impulse, we would see 100.82. Continuation will give 101.14.
DOW JONES INDEX
Today's support: - 7874.50, 7848.20, 7817.72 and 7796.30(main), where a delay and correction may happen. Break of the latter will give 7782.19, where correction also can be. Then follows 7768.11. Be there a strong impulse, we would see 7734.38. Continuation will bring 7716.10 and 7995.00.Today's resistance: - 7798.64(main), where a delay and correction may happen. Break would bring 8032.50, where a correction may happen. Then follows 8048.36, where a delay and correction could also be. Be there a strong impulse, we'd see 8071.77. Continuation would bring 8097.38.
Daily Forex Technicals | Written by Easy Forex
Euro 1.2930
Initial support at 1.2833 (March 16 low) followed by 1.2732 (Mar 12 low). Initial resistance is now located at 1.3074 (April 20 high) at followed by 1.3198 (Apr 17 high)
Yen 98.50
Initial support is located at 97.66 (Apr 17 high) followed by 97.23 (Mar 31 low). Initial resistance is now at 99.76 (Apr 17 high) followed by 100.43 (Apr 14 high).
Pound 1.4660
Initial support at 1.4450 (Apr 2 low) followed by 1.4241 (Mar 31 low). Initial resistance is now at 1.4817 (Apr 20 high) followed by 1.4942 (Apr 17 high).
Australian Dollar 0.7075
Initial support at 0.6857 (Apr 1) followed by the 0.6771 (Mar 30 low). Initial resistance is now at 0.7249 (Apr 20 low) followed by 0.7327 (Apr 13 high).
Gold 882
Initial support at 864 (Apr 17 low) followed by 852 (Jan 23 low). Initial resistance is now at 895 (Apr 21 high) followed by 909 (Apr 3 high).
EUR/USD
Today's support: - 1.2870(main), where correction is possible. Break would give 1.2855, where correction also may be. Then follows 1.2824. Break of the latter would result in 1.2783. If a strong impulse, we would see 1.2758. Continuation will give 1.2729 and 1.2701.Today's resistance: - 1.2966 and 1.2994(main). Break would give 1.3028, where a correction is possible. Then goes 1.3061. Break of the latter would result in 1.3098. If a strong impulse, we'd see 1.3118. Continuation will give 1.3143.
USD/JPY
Today's support: - 97.90 and 97.62(main). Break would bring 97.44, where correction is possible. Then 97.20, where a correction may also happen. Break of the latter will give 96.86. If a strong impulse, we would see 96.65. Continuation would give 96.33.Today's resistance: - 98.70, 99.22, 99.48 and 99.94(main), where a correction may happen. Break would bring 100.24, where also a correction may be. Then 100.51. If a strong impulse, we would see 100.82. Continuation will give 101.14.
DOW JONES INDEX
Today's support: - 7874.50, 7848.20, 7817.72 and 7796.30(main), where a delay and correction may happen. Break of the latter will give 7782.19, where correction also can be. Then follows 7768.11. Be there a strong impulse, we would see 7734.38. Continuation will bring 7716.10 and 7995.00.Today's resistance: - 7798.64(main), where a delay and correction may happen. Break would bring 8032.50, where a correction may happen. Then follows 8048.36, where a delay and correction could also be. Be there a strong impulse, we'd see 8071.77. Continuation would bring 8097.38.
Daily Forex Technicals | Written by Easy Forex
Euro 1.2930
Initial support at 1.2833 (March 16 low) followed by 1.2732 (Mar 12 low). Initial resistance is now located at 1.3074 (April 20 high) at followed by 1.3198 (Apr 17 high)
Yen 98.50
Initial support is located at 97.66 (Apr 17 high) followed by 97.23 (Mar 31 low). Initial resistance is now at 99.76 (Apr 17 high) followed by 100.43 (Apr 14 high).
Pound 1.4660
Initial support at 1.4450 (Apr 2 low) followed by 1.4241 (Mar 31 low). Initial resistance is now at 1.4817 (Apr 20 high) followed by 1.4942 (Apr 17 high).
Australian Dollar 0.7075
Initial support at 0.6857 (Apr 1) followed by the 0.6771 (Mar 30 low). Initial resistance is now at 0.7249 (Apr 20 low) followed by 0.7327 (Apr 13 high).
Gold 882
Initial support at 864 (Apr 17 low) followed by 852 (Jan 23 low). Initial resistance is now at 895 (Apr 21 high) followed by 909 (Apr 3 high).
Three Stages of Stocks Bear Market Rally
By: Q1_Publishing
In just six weeks the S&P 500 has climbed about 30% and the broader, small-cap focused Russell 2000 has soared 40%. It’s the steepest rally in more than 70 years. The bulls are off and running.Despite it all, very few people believe this rally can last. And it’s because there are still so very few people getting in on this rally, odds are it won’t end very soon.By this point, most commentators have declared this a bear market rally. The New York Times, Forbes, Bloomberg, and most every major media outlet have gotten on board.
Some of the world’s leading investors agree. In early March we looked at Steven Leuthold’s bold prediction:“These comparisons people make with the Great Depression are totally out of touch with reality, and pretty stupid…We’ve been in much worse, much more panicked and more scary situations in the U.S.”A pretty bold statement considering the Dow fell below 7,000 and was headed lower. But it’s not just Leuthold. Hedge fund manager, philanthropist, philosopher, billionaire George Soros has been quite vocal about his suspicions in the sustainability of this rally. Soros said:“It’s a bear-market rally because we have not yet turned the economy around. This isn’t a financial crisis like all the other financial crises that we have experienced in our lifetime.”If you go out more than a few months, all signs point to Soros being spot on. There are just too many problems to work through and an unwillingness to accept the inevitable solutions.Despite it all though, it’s looking much more likely we’ll see more upside in the short-term than the start of a downturn.Why? Because we haven’t run through all of the phases of a bear market rally.
Three Stages of a Bear Market Rally
Bear market rallies are unique events. They come when they’re least expected. That can last a few days, weeks, or months. There’s no telling exactly when they will end. But if you pay attention to the life-cycle of past market movements, you can get a good idea of when this one is going to end. That’s why I closely watch the Three Stages of a Bear Market Rally:
Stage 1: “It’s all over”
The first stage of a bear market rally starts when the markets react to bad news as if it was good news. Whether it’s because bad news isn’t as good as bad as expected or it’s one of those “Green Shoots” which provide a glimmer of light perceived to be the end of the tunnel.This happens when everyone thinks it will never turn around. It’s when many investors throw in the towel and proclaim “it’s all over.” We hit that point in early March. Since then the markets have been so beat up in such a short period of time that any bit of good news can get things rolling higher again.
Stage 2: Popular Declaration of Bear Market Rally
This is the stage where most commentators admit we’re in a bear market rally. The upswing has just been too strong and has lasted so much longer than initially anticipated by most, it’s obvious to everyone.There are no fundamental drivers and the fundamentals matter very little in this stage. Dividend yields, P/E’s, growth, and forward estimates aren’t focused on very much. The prevailing “thesis” (i.e. stimulus spending will be great news for infrastructures stocks) is much more important than the underlying fundamental situation – a.k.a. reality.Most everyone goes on to warn this is a bear market rally and advise against buying too much of anything now. It’s also a time when we hear things like “this is a trader’s market.” Which any market should be a traders market, given the wide number of strategies which work in bull, bear, and flat markets.
Stage 3 – “All clear! Get in before it’s too late.”
This is the final stage. It’s when the bear market has been forgotten by most. Stocks move up, but the big upswings have disappeared.This is when the very real risk of “panic buying” sets in. This is a result of the big money fearing 1) it has missed all the chances to buy low, 2) their performance will suffer, and 3) customers will take their money elsewhere.To make up for lost time, they buy very aggressively. Many of them think short-term and want to deliver the numbers to keep pace with the competition in the money management industry. This is an extremely profitable stage for those who went against the grain and bought during the earlier stages of the rally. You’ll also see a general decline in the VIX. It currently sits at below 34 – well below its recent range of 50 to 90.
Yet when the big money runs out of cash to buy shares, watch out, the end of a bear market rally is near.
What to do Now
It looks like we’re in Stage 2. There are just too many non-believers out there right now, too much money on the sidelines yet to come back into the market, and there has been no build up of false confidence which precedes most market declines.
Just think of what happened last fall. After a sharp downturn, the markets rallied sharply after the presidential election. The so-called Obama rally was a boon for stocks which were looked at as leading benefactors of the new administration’s agenda.Don’t get me wrong, there are still a lot of problems. Commercial real estate debt, deflation (and the debasing of currencies to prevent it), rising unemployment, and increasing and changing regulation to consistently change the rules and keep entrepreneurs and investors from tackling new opportunities, will all be a drag on the economy, at every stage of a recovery.
But, as the markets have shown, a bear market rally is not something to bet against. As a result, I recommend searching out three types of opportunities.One being the safe ways to play a market rally which go up with the markets, but don’t go down nearly as fast (e.g. a covered call writing ETF). Another one being the sectors which have fallen out of favor during this downturn. The final being speculative stocks which have been so beaten down there’s only one way to go - up.The old Wall Street saying is a rising tide lifts all boats is true. But when the tide is rising this fast, the most beaten up boats which were steadily sinking (think banks, homebuilders, commercial real estate, etc.) have been rising the fastest.
Good investing,
Andrew Mickey
Chief Investment Strategist, Q1 Publishing
In just six weeks the S&P 500 has climbed about 30% and the broader, small-cap focused Russell 2000 has soared 40%. It’s the steepest rally in more than 70 years. The bulls are off and running.Despite it all, very few people believe this rally can last. And it’s because there are still so very few people getting in on this rally, odds are it won’t end very soon.By this point, most commentators have declared this a bear market rally. The New York Times, Forbes, Bloomberg, and most every major media outlet have gotten on board.
Some of the world’s leading investors agree. In early March we looked at Steven Leuthold’s bold prediction:“These comparisons people make with the Great Depression are totally out of touch with reality, and pretty stupid…We’ve been in much worse, much more panicked and more scary situations in the U.S.”A pretty bold statement considering the Dow fell below 7,000 and was headed lower. But it’s not just Leuthold. Hedge fund manager, philanthropist, philosopher, billionaire George Soros has been quite vocal about his suspicions in the sustainability of this rally. Soros said:“It’s a bear-market rally because we have not yet turned the economy around. This isn’t a financial crisis like all the other financial crises that we have experienced in our lifetime.”If you go out more than a few months, all signs point to Soros being spot on. There are just too many problems to work through and an unwillingness to accept the inevitable solutions.Despite it all though, it’s looking much more likely we’ll see more upside in the short-term than the start of a downturn.Why? Because we haven’t run through all of the phases of a bear market rally.
Three Stages of a Bear Market Rally
Bear market rallies are unique events. They come when they’re least expected. That can last a few days, weeks, or months. There’s no telling exactly when they will end. But if you pay attention to the life-cycle of past market movements, you can get a good idea of when this one is going to end. That’s why I closely watch the Three Stages of a Bear Market Rally:
Stage 1: “It’s all over”
The first stage of a bear market rally starts when the markets react to bad news as if it was good news. Whether it’s because bad news isn’t as good as bad as expected or it’s one of those “Green Shoots” which provide a glimmer of light perceived to be the end of the tunnel.This happens when everyone thinks it will never turn around. It’s when many investors throw in the towel and proclaim “it’s all over.” We hit that point in early March. Since then the markets have been so beat up in such a short period of time that any bit of good news can get things rolling higher again.
Stage 2: Popular Declaration of Bear Market Rally
This is the stage where most commentators admit we’re in a bear market rally. The upswing has just been too strong and has lasted so much longer than initially anticipated by most, it’s obvious to everyone.There are no fundamental drivers and the fundamentals matter very little in this stage. Dividend yields, P/E’s, growth, and forward estimates aren’t focused on very much. The prevailing “thesis” (i.e. stimulus spending will be great news for infrastructures stocks) is much more important than the underlying fundamental situation – a.k.a. reality.Most everyone goes on to warn this is a bear market rally and advise against buying too much of anything now. It’s also a time when we hear things like “this is a trader’s market.” Which any market should be a traders market, given the wide number of strategies which work in bull, bear, and flat markets.
Stage 3 – “All clear! Get in before it’s too late.”
This is the final stage. It’s when the bear market has been forgotten by most. Stocks move up, but the big upswings have disappeared.This is when the very real risk of “panic buying” sets in. This is a result of the big money fearing 1) it has missed all the chances to buy low, 2) their performance will suffer, and 3) customers will take their money elsewhere.To make up for lost time, they buy very aggressively. Many of them think short-term and want to deliver the numbers to keep pace with the competition in the money management industry. This is an extremely profitable stage for those who went against the grain and bought during the earlier stages of the rally. You’ll also see a general decline in the VIX. It currently sits at below 34 – well below its recent range of 50 to 90.
Yet when the big money runs out of cash to buy shares, watch out, the end of a bear market rally is near.
What to do Now
It looks like we’re in Stage 2. There are just too many non-believers out there right now, too much money on the sidelines yet to come back into the market, and there has been no build up of false confidence which precedes most market declines.
Just think of what happened last fall. After a sharp downturn, the markets rallied sharply after the presidential election. The so-called Obama rally was a boon for stocks which were looked at as leading benefactors of the new administration’s agenda.Don’t get me wrong, there are still a lot of problems. Commercial real estate debt, deflation (and the debasing of currencies to prevent it), rising unemployment, and increasing and changing regulation to consistently change the rules and keep entrepreneurs and investors from tackling new opportunities, will all be a drag on the economy, at every stage of a recovery.
But, as the markets have shown, a bear market rally is not something to bet against. As a result, I recommend searching out three types of opportunities.One being the safe ways to play a market rally which go up with the markets, but don’t go down nearly as fast (e.g. a covered call writing ETF). Another one being the sectors which have fallen out of favor during this downturn. The final being speculative stocks which have been so beaten down there’s only one way to go - up.The old Wall Street saying is a rising tide lifts all boats is true. But when the tide is rising this fast, the most beaten up boats which were steadily sinking (think banks, homebuilders, commercial real estate, etc.) have been rising the fastest.
Good investing,
Andrew Mickey
Chief Investment Strategist, Q1 Publishing
U.S. Housing Market Heading for a Bigger Crash, Another $4 Trillion of Asset Price Deflation
By: Mike_Whitney
Due to the lifting of the foreclosure moratorium at the end of March, the downward slide in housing is gaining speed. The moratorium was initiated in January to give Obama's anti-foreclosure program---which is a combination of mortgage modifications and refinancing---a chance to succeed. The goal of the plan was to keep up to 9 million struggling homeowners in their homes, but it's clear now that the program will fall well-short of its objective.
In March, housing prices accelerated on the downside indicating bigger adjustments dead-ahead. Trend-lines are steeper now than ever before--nearly perpendicular. Housing prices are not falling, they're crashing and crashing hard. Now that the foreclosure moratorium has ended, Notices of Default (NOD) have spiked to an all-time high. These Notices will turn into foreclosures in 4 to 5 months time creating another cascade of foreclosures. Market analysts predict there will be 5 MILLION MORE FORECLOSURES BETWEEN NOW AND 2011. It's a disaster bigger than Katrina. Soaring unemployment and rising foreclosures ensure that hundreds of banks and financial institutions will be forced into bankruptcy. 40 percent of delinquent homeowners have already vacated their homes. There's nothing Obama can do to make them stay. Worse still, only 30 percent of foreclosures have been relisted for sale suggesting more hanky-panky at the banks. Where have the houses gone? Have they simply vanished?
600,000 "DISAPPEARED HOMES?"
Here's a excerpt from the SF Gate explaining the mystery:
"Lenders nationwide are sitting on hundreds of thousands of foreclosed homes that they have not resold or listed for sale, according to numerous data sources. And foreclosures, which banks unload at fire-sale prices, are a major factor driving home values down."We believe there are in the neighborhood of 600,000 properties nationwide that banks have repossessed but not put on the market," said Rick Sharga, vice president of RealtyTrac, which compiles nationwide statistics on foreclosures. "California probably represents 80,000 of those homes. It could be disastrous if the banks suddenly flooded the market with those distressed properties. You'd have further depreciation and carnage."
In a recent study, RealtyTrac compared its database of bank-repossessed homes to MLS listings of for-sale homes in four states, including California. It found a significant disparity - only 30 percent of the foreclosures were listed for sale in the Multiple Listing Service. The remainder is known in the industry as "shadow inventory." ("Banks aren't Selling Many Foreclosed Homes" SF Gate).If regulators were deployed to the banks that are keeping foreclosed homes off the market, they would probably find that the banks are actually servicing the mortgages on a monthly basis to conceal the extent of their losses. They'd also find that the banks are trying to keep housing prices artificially high to avoid heftier losses that would put them out of business. One thing is certain, 600,000 "disappeared" homes means that housing prices have a lot farther to fall and that an even larger segment of the banking system is underwater.
Here is more on the story from Mr. Mortgage "California Foreclosures About to Soar...Again"
"Are you ready to see the future? Ten’s of thousands of foreclosures are only 1-5 months away from hitting that will take total foreclosure counts back to all-time highs. This will flood an already beaten-bloody real estate market with even more supply just in time for the Spring/Summer home selling season...Foreclosure start (NOD) and Trustee Sale (NTS) notices are going out at levels not seen since mid 2008. Once an NTS goes out, the property is taken to the courthouse and auctioned within 21-45 days....The bottom line is that there is a massive wave of actual foreclosures that will hit beginning in April that can’t be stopped without a national moratorium."
JP Morgan Chase, Wells Fargo and Fannie Mae have all stepped up their foreclosure activity in recent weeks. Delinquencies have skyrocketed foreshadowing more price-slashing into the foreseeable future. According to the Wall Street Journal:"Ronald Temple, co-director of research at Lazard Asset Management, expects home prices to fall 22% to 27% from their January levels. More than 2.1 million homes will be lost this year because borrowers can't meet their loan payments, up from about 1.7 million in 2008." (Ruth Simon, "The housing crisis is about to take center stage once again" Wall Street Journal)
Another 20 percent carved off the aggregate value of US housing means another $4 trillion loss to homeowners. That means smaller retirement savings, less discretionary spending, and lower living standards. The next leg down in housing will be excruciating; every sector will feel the pain. Obama's $75 billion mortgage rescue plan is a mere pittance; it won't reduce the principle on mortgages and it won't stop the bleeding. Policymakers have decided they've done enough and are refusing to help. They don't see the tsunami looming in front of them plain as day. The housing market is going under and it's going to drag a good part of the broader economy along with it. Stocks, too.
Due to the lifting of the foreclosure moratorium at the end of March, the downward slide in housing is gaining speed. The moratorium was initiated in January to give Obama's anti-foreclosure program---which is a combination of mortgage modifications and refinancing---a chance to succeed. The goal of the plan was to keep up to 9 million struggling homeowners in their homes, but it's clear now that the program will fall well-short of its objective.
In March, housing prices accelerated on the downside indicating bigger adjustments dead-ahead. Trend-lines are steeper now than ever before--nearly perpendicular. Housing prices are not falling, they're crashing and crashing hard. Now that the foreclosure moratorium has ended, Notices of Default (NOD) have spiked to an all-time high. These Notices will turn into foreclosures in 4 to 5 months time creating another cascade of foreclosures. Market analysts predict there will be 5 MILLION MORE FORECLOSURES BETWEEN NOW AND 2011. It's a disaster bigger than Katrina. Soaring unemployment and rising foreclosures ensure that hundreds of banks and financial institutions will be forced into bankruptcy. 40 percent of delinquent homeowners have already vacated their homes. There's nothing Obama can do to make them stay. Worse still, only 30 percent of foreclosures have been relisted for sale suggesting more hanky-panky at the banks. Where have the houses gone? Have they simply vanished?
600,000 "DISAPPEARED HOMES?"
Here's a excerpt from the SF Gate explaining the mystery:
"Lenders nationwide are sitting on hundreds of thousands of foreclosed homes that they have not resold or listed for sale, according to numerous data sources. And foreclosures, which banks unload at fire-sale prices, are a major factor driving home values down."We believe there are in the neighborhood of 600,000 properties nationwide that banks have repossessed but not put on the market," said Rick Sharga, vice president of RealtyTrac, which compiles nationwide statistics on foreclosures. "California probably represents 80,000 of those homes. It could be disastrous if the banks suddenly flooded the market with those distressed properties. You'd have further depreciation and carnage."
In a recent study, RealtyTrac compared its database of bank-repossessed homes to MLS listings of for-sale homes in four states, including California. It found a significant disparity - only 30 percent of the foreclosures were listed for sale in the Multiple Listing Service. The remainder is known in the industry as "shadow inventory." ("Banks aren't Selling Many Foreclosed Homes" SF Gate).If regulators were deployed to the banks that are keeping foreclosed homes off the market, they would probably find that the banks are actually servicing the mortgages on a monthly basis to conceal the extent of their losses. They'd also find that the banks are trying to keep housing prices artificially high to avoid heftier losses that would put them out of business. One thing is certain, 600,000 "disappeared" homes means that housing prices have a lot farther to fall and that an even larger segment of the banking system is underwater.
Here is more on the story from Mr. Mortgage "California Foreclosures About to Soar...Again"
"Are you ready to see the future? Ten’s of thousands of foreclosures are only 1-5 months away from hitting that will take total foreclosure counts back to all-time highs. This will flood an already beaten-bloody real estate market with even more supply just in time for the Spring/Summer home selling season...Foreclosure start (NOD) and Trustee Sale (NTS) notices are going out at levels not seen since mid 2008. Once an NTS goes out, the property is taken to the courthouse and auctioned within 21-45 days....The bottom line is that there is a massive wave of actual foreclosures that will hit beginning in April that can’t be stopped without a national moratorium."
JP Morgan Chase, Wells Fargo and Fannie Mae have all stepped up their foreclosure activity in recent weeks. Delinquencies have skyrocketed foreshadowing more price-slashing into the foreseeable future. According to the Wall Street Journal:"Ronald Temple, co-director of research at Lazard Asset Management, expects home prices to fall 22% to 27% from their January levels. More than 2.1 million homes will be lost this year because borrowers can't meet their loan payments, up from about 1.7 million in 2008." (Ruth Simon, "The housing crisis is about to take center stage once again" Wall Street Journal)
Another 20 percent carved off the aggregate value of US housing means another $4 trillion loss to homeowners. That means smaller retirement savings, less discretionary spending, and lower living standards. The next leg down in housing will be excruciating; every sector will feel the pain. Obama's $75 billion mortgage rescue plan is a mere pittance; it won't reduce the principle on mortgages and it won't stop the bleeding. Policymakers have decided they've done enough and are refusing to help. They don't see the tsunami looming in front of them plain as day. The housing market is going under and it's going to drag a good part of the broader economy along with it. Stocks, too.
Hong Kong’s Stock Market Is About To Skyrocket
By DailyWealth on April 22, 2009
Ben Bernanke has cut short-term interest rates in the U.S. to essentially zero… the lowest rate we’ve ever seen. He’s doing this, of course, to “juice” the economy - to give it a jumpstart. He doesn’t know (or care, actually) that this action will inadvertently (but undoubtedly) cause one particular stock market to go absolutely nuts.This stock market I’m talking about is Hong Kong. Today, we have the ultimate recipe for stocks in Hong Kong to skyrocket. The Fed has cut interest rates to essentially zero (causing Hong Kong rates to be next to zero in its unique money system). And yet Hong Kong stocks are incredibly cheap. They bottomed a month ago at a single-digit price-to-earnings (P/E) ratio.
We’ve seen this before:
In 1992-1993, the Hang Seng Index (^HSI: 15236.41 -49.48 -0.32%) shot from 5,500 to 12,000. At that time, the Fed had cut interest rates below the rate of inflation. So “real” interest rates were below zero.The Fed did it again from 2003-2005. And in that time, the Hang Seng Index jumped nearly 7,000 points, from a low of 8,600 to 15,500. (It continued to rise… peaking over 30,000 in 2007. That’s four times your money from 2003 to 2007.). And it’s happening again, right now… The Fed has cut interest rates to zero, and the uptrend in Hong Kong has arrived. It’s time to get in.
While Ben Bernanke is trying to help the U.S., he’s unwittingly creating havoc on the other side of the globe…Hong Kong is quite an incredible place… With no natural resources, the standard of living has gone from subsistence wages to one of the highest in the world in just a few decades.
I believe two things contributed to Hong Kong’s boom… 1) Hong Kong has been for decades one of the “freest” markets in the world, allowing entrepreneurs to succeed or fail. And 2) Hong Kong has had a stable currency, thanks to its unique currency system. For the last 25 years, the Hong Kong dollar has been worth about US$7.80, give or take a few pennies.
Hong Kong’s unique currency system is called a currency board. A country that has a true currency board has one U.S. dollar in the bank for every dollar of its own currency that it prints. How does it keep the exchange rate equal? Through interest rates…Interest rates in Hong Kong dollars are always higher than in the U.S. Depositors are willing to “take the risk” on the Hong Kong dollar for the slightly higher yield.As a result, Bernanke essentially controls interest rates in Hong Kong. Whether Hong Kong is in a boom or a bust, he doesn’t care. So Bernanke could be raising or cutting interest rates at precisely the wrong time in Hong Kong’s business cycle.
Therefore, Hong Kong’s stock market is subject to wild booms and busts, based on what the U.S. Fed is doing with interest rates.As I said, today we have the ultimate recipe for stocks to skyrocket in Hong Kong. Interest rates are next to zero. And Hong Kong stocks are cheap, hitting single-digit P/E ratios a month ago.I have two nearly guaranteed “rules” for making money in Hong Kong…First is the “Hong Kong Can’t Help It Rule.” That’s when the U.S. Fed cuts interest rates below the “market” rate. This means “real” interest rates are below zero. When this happens, buy Hong Kong… It can’t help it. It soars.The second rule is the “20/10 Rule.” In short, you want to be a buyer of stocks in Hong Kong when the P/E ratio falls below 10. And you want to be a seller when the ratio rises above 20.Hong Kong stocks often soar by hundreds of percent after they fall below a P/E of 10. And often they lose half their value soon after they rise above a P/E of 20.
Right now is an extraordinary moment… both rules are in play… AND we have an uptrend in Hong Kong stocks that started last month.You should consider buying Hong Kong shares now… Triple-digit gains are possible… and you can limit your downside risk by using a trailing stop. Those are my kind of odds!
Ben Bernanke has cut short-term interest rates in the U.S. to essentially zero… the lowest rate we’ve ever seen. He’s doing this, of course, to “juice” the economy - to give it a jumpstart. He doesn’t know (or care, actually) that this action will inadvertently (but undoubtedly) cause one particular stock market to go absolutely nuts.This stock market I’m talking about is Hong Kong. Today, we have the ultimate recipe for stocks in Hong Kong to skyrocket. The Fed has cut interest rates to essentially zero (causing Hong Kong rates to be next to zero in its unique money system). And yet Hong Kong stocks are incredibly cheap. They bottomed a month ago at a single-digit price-to-earnings (P/E) ratio.
We’ve seen this before:
In 1992-1993, the Hang Seng Index (^HSI: 15236.41 -49.48 -0.32%) shot from 5,500 to 12,000. At that time, the Fed had cut interest rates below the rate of inflation. So “real” interest rates were below zero.The Fed did it again from 2003-2005. And in that time, the Hang Seng Index jumped nearly 7,000 points, from a low of 8,600 to 15,500. (It continued to rise… peaking over 30,000 in 2007. That’s four times your money from 2003 to 2007.). And it’s happening again, right now… The Fed has cut interest rates to zero, and the uptrend in Hong Kong has arrived. It’s time to get in.
While Ben Bernanke is trying to help the U.S., he’s unwittingly creating havoc on the other side of the globe…Hong Kong is quite an incredible place… With no natural resources, the standard of living has gone from subsistence wages to one of the highest in the world in just a few decades.
I believe two things contributed to Hong Kong’s boom… 1) Hong Kong has been for decades one of the “freest” markets in the world, allowing entrepreneurs to succeed or fail. And 2) Hong Kong has had a stable currency, thanks to its unique currency system. For the last 25 years, the Hong Kong dollar has been worth about US$7.80, give or take a few pennies.
Hong Kong’s unique currency system is called a currency board. A country that has a true currency board has one U.S. dollar in the bank for every dollar of its own currency that it prints. How does it keep the exchange rate equal? Through interest rates…Interest rates in Hong Kong dollars are always higher than in the U.S. Depositors are willing to “take the risk” on the Hong Kong dollar for the slightly higher yield.As a result, Bernanke essentially controls interest rates in Hong Kong. Whether Hong Kong is in a boom or a bust, he doesn’t care. So Bernanke could be raising or cutting interest rates at precisely the wrong time in Hong Kong’s business cycle.
Therefore, Hong Kong’s stock market is subject to wild booms and busts, based on what the U.S. Fed is doing with interest rates.As I said, today we have the ultimate recipe for stocks to skyrocket in Hong Kong. Interest rates are next to zero. And Hong Kong stocks are cheap, hitting single-digit P/E ratios a month ago.I have two nearly guaranteed “rules” for making money in Hong Kong…First is the “Hong Kong Can’t Help It Rule.” That’s when the U.S. Fed cuts interest rates below the “market” rate. This means “real” interest rates are below zero. When this happens, buy Hong Kong… It can’t help it. It soars.The second rule is the “20/10 Rule.” In short, you want to be a buyer of stocks in Hong Kong when the P/E ratio falls below 10. And you want to be a seller when the ratio rises above 20.Hong Kong stocks often soar by hundreds of percent after they fall below a P/E of 10. And often they lose half their value soon after they rise above a P/E of 20.
Right now is an extraordinary moment… both rules are in play… AND we have an uptrend in Hong Kong stocks that started last month.You should consider buying Hong Kong shares now… Triple-digit gains are possible… and you can limit your downside risk by using a trailing stop. Those are my kind of odds!
Who Does The US Owe Most To?
By Dirk Van Dijk on April 22, 2009
Recently, the monthly data on who the major holders of treasury debt are was released. Overall, $3.162 Trillion of Treasury debt was held overseas at the end of February 2009, up 37.5% from a year before ($2.226.1 Trillion).The largest holder and the largest increase in absolute terms is China, which holds $744.2 billion — a 52.4% increase from $486.9 billion in February of 2008. Japan is the next largest at $661.9 billion, but up only 13.5% from a year ago.
Next is a group that probably hides who the true holders are, the Caribbean Banking Centers. The collectively hold $189.1 billion of Treasury debt, and are up a stunning 82.0% from a year ago. They are followed by the Oil Exporters, at almost the same level, $181.7 billion, but who surprisingly had a much smaller increase, up just 24.0%.Perhaps most striking about the list are some of the countries towards the bottom of the list. For example, Canada holds only $10.9 billion of our debt, down 51.1% from a year ago. This is less than one third the amount of our debt that Mexico owns ($37.9 billion). Thailand owns more ($39.7 billion) than twice the amount that is held by Israel, France, Italy, Sweden, the Netherlands and Belgium. Brazil holds more ($130.8 B) than those major European countries combined.
This data seems to be more evidence that the world’s economic center of gravity is shifting from what we have long termed the “developed” counties (roughly speaking the OECD, but not exactly, since both Mexico and Turkey are members of the OECD) to what we used to think of as the “third world.”
Clearly the developing world has taken a big economic hit with the current worldwide slowdown, but they may come out the other side of this in better shape than most people recognize. While many people point to China as America’s new bankers, clearly they are not alone, and far-off exotic locals are becoming increasingly important to the government in financing our debt, not just the traditional non-US financial centers like London, Geneva and Frankfort.
Recently, the monthly data on who the major holders of treasury debt are was released. Overall, $3.162 Trillion of Treasury debt was held overseas at the end of February 2009, up 37.5% from a year before ($2.226.1 Trillion).The largest holder and the largest increase in absolute terms is China, which holds $744.2 billion — a 52.4% increase from $486.9 billion in February of 2008. Japan is the next largest at $661.9 billion, but up only 13.5% from a year ago.
Next is a group that probably hides who the true holders are, the Caribbean Banking Centers. The collectively hold $189.1 billion of Treasury debt, and are up a stunning 82.0% from a year ago. They are followed by the Oil Exporters, at almost the same level, $181.7 billion, but who surprisingly had a much smaller increase, up just 24.0%.Perhaps most striking about the list are some of the countries towards the bottom of the list. For example, Canada holds only $10.9 billion of our debt, down 51.1% from a year ago. This is less than one third the amount of our debt that Mexico owns ($37.9 billion). Thailand owns more ($39.7 billion) than twice the amount that is held by Israel, France, Italy, Sweden, the Netherlands and Belgium. Brazil holds more ($130.8 B) than those major European countries combined.
This data seems to be more evidence that the world’s economic center of gravity is shifting from what we have long termed the “developed” counties (roughly speaking the OECD, but not exactly, since both Mexico and Turkey are members of the OECD) to what we used to think of as the “third world.”
Clearly the developing world has taken a big economic hit with the current worldwide slowdown, but they may come out the other side of this in better shape than most people recognize. While many people point to China as America’s new bankers, clearly they are not alone, and far-off exotic locals are becoming increasingly important to the government in financing our debt, not just the traditional non-US financial centers like London, Geneva and Frankfort.
Tuesday, April 21, 2009
Has The Stock Market Rally Run Its Course?
I highlighted the short-term overbought nature of the stock market in my “Words from the Wise” review two days ago, saying:
“From a technical perspective, a primary bear market still exists as long as the major indices remain below the January highs and the 200-day moving averages. Many of the rally’s leaders (indices and sectors) seem to be running into major resistance at these levels and look susceptible to retrace at least a portion of the gains since the March low. Further evidence of a short-term top in the making comes from a chart showing the percentage of S&P 500 stocks [90%] trading above their 50-day moving averages.”Not surprisingly, investors’ lingering worries about the financial sector resurfaced yesterday, pulling the S&P 500 Index (^GSPC: 832.39 0.00 0.00%) down by 4.3% and the Dow Jones Industrial Average by 3.6% - the worst losses since early March and in all likelihood a Lowry’s 90% down-day.
While the short-term movements play themselves out, it is important to remember that the longer-term charts have not yet signalled a secular uptrend. Using monthly data, the graph below shows the multi-year trend of the S&P 500 Index (green line) together with a simple 12-month rate of change (or momentum) indicator (red line). Although monthly indicators are of little help when it comes to market timing, they do come in handy for defining the primary trend. An ROC line below zero depicts bear trends as experienced in 1990, 1994, 2000 to 2003, and again since December 2007. Having said that, the level of the indicator is grossly oversold, as confirmed by the RSI indicator (blue line).The stock market will tell its own story over the next few days, but it is crucial that the lows of March 9 hold in order for base formation development to remain intact. Should these levels - 677 for the S&P 500 and 6,547 for the Dow Jones - be breached, it’s “Katie, bar the door” (quoting from Richard Russell).
“From a technical perspective, a primary bear market still exists as long as the major indices remain below the January highs and the 200-day moving averages. Many of the rally’s leaders (indices and sectors) seem to be running into major resistance at these levels and look susceptible to retrace at least a portion of the gains since the March low. Further evidence of a short-term top in the making comes from a chart showing the percentage of S&P 500 stocks [90%] trading above their 50-day moving averages.”Not surprisingly, investors’ lingering worries about the financial sector resurfaced yesterday, pulling the S&P 500 Index (^GSPC: 832.39 0.00 0.00%) down by 4.3% and the Dow Jones Industrial Average by 3.6% - the worst losses since early March and in all likelihood a Lowry’s 90% down-day.
While the short-term movements play themselves out, it is important to remember that the longer-term charts have not yet signalled a secular uptrend. Using monthly data, the graph below shows the multi-year trend of the S&P 500 Index (green line) together with a simple 12-month rate of change (or momentum) indicator (red line). Although monthly indicators are of little help when it comes to market timing, they do come in handy for defining the primary trend. An ROC line below zero depicts bear trends as experienced in 1990, 1994, 2000 to 2003, and again since December 2007. Having said that, the level of the indicator is grossly oversold, as confirmed by the RSI indicator (blue line).The stock market will tell its own story over the next few days, but it is crucial that the lows of March 9 hold in order for base formation development to remain intact. Should these levels - 677 for the S&P 500 and 6,547 for the Dow Jones - be breached, it’s “Katie, bar the door” (quoting from Richard Russell).
Monday, April 20, 2009
Gold Elliott Wave Analysis
Written by TheLFB-Forex.com
Chart trend: Short
Main price points: 909, 865, 840
Looking for: Lower wave v of blue wave III)
Gold is trading lower in perfect fashion after the break-out through the blue support line, discussed this week. The black wave v of an extended wave III) now looks to be on the way with the next target at 865 dollars per ounce. If the break-out appears in this area then we may even see deeper prices, somewhere around the 161.8% Fibonacci extension of black wave iv. The critical resistance area remains the same, at the 909 level, so long as the market trades above the lows of the black wave iii.
Chart trend: Short
Main price points: 909, 865, 840
Looking for: Lower wave v of blue wave III)
Gold is trading lower in perfect fashion after the break-out through the blue support line, discussed this week. The black wave v of an extended wave III) now looks to be on the way with the next target at 865 dollars per ounce. If the break-out appears in this area then we may even see deeper prices, somewhere around the 161.8% Fibonacci extension of black wave iv. The critical resistance area remains the same, at the 909 level, so long as the market trades above the lows of the black wave iii.
Daily Technical Analysis Forex/Gold/DJIA
Daily Forex Technicals | Written by India Forex
Rupee: Referring to our previous charts and updates we still maintain a bullish view on rupee aiming 48.80 levels. Dollar has slightly gone strong in the last couple of trading sessions which is looked more as a retracement. Only a break above 50.30 would change the view to neutral otherwise indicators are quite bullish. Bullish
Euro: Euro fell sharply due to poor economic expectations and bearish chart formations. The charts are looking quite oversold and retracements are expected to the tune of 1.3130 levels. Look for opportunities to go short around those levels or in turn go long around current levels for 70-80 pips. (Eur/Usd:1.2985). Bearish.
Pound: The pair broke the channel support at 1.4770 but is likely to take support from the 100 4-hourly and 21 Daily EMA at 1.4650-4690 levels. Incase the market is turning again from those levels we would look at buying for 100 pips. (Gbp/Usd: 1.4740). Neutral Yen: The Usd/Jpy pair is still stuck in the weekly triangle support at 98.32 and resistance at 101.70 levels. The pair is likely to break the consolidation soon. The direction of the break is likely to determine the direction of the pair for the next few sessions. (Usd/Jpy: 98.60).
Australian Dollar: Aussie has just broken the trend line support. It should ideally hold 0.7100 levels. Only a break below 0.7100 for 2 consecutive sessions would change the outlook neutral. (Aud/Usd: 0.7180).
Gold: Gold as expected plunged to the 200 Day EMA at $864 levels. Gold is holding below the daily and weekly trend lines and crucial moving averages. Strong break of $864 support can bring a fall upto $850. Sell at retracements around 880 to 890 levels. Short term Bearish (Gold: $887.00)
Dollar index : Dollar Index firmed up in the last few trading sessions mainly due to Euro weakness and is seen pressing the 86 – resistance levels once again. The bias for DX remains bullish above the 82-key support. Decisive break above 86.15 could march a rally upto 88 levels. Bullish.
Daily Forex Technicals | Written by FXtechtrade
EUR/USD
Today's support: - 1.3046(main), where correction is possible. Break would give 1.3003, where correction also may be. Then follows 1.2984. Break of the latter would result in 1.2960. If a strong impulse, we would see 1.2939. Continuation will give 1.2914 and 1.2881.
Today's resistance: - 1.3143 and 1.3164(main). Break would give 1.3386, where a correction is possible. Then goes 1.3228. Break of the latter would result in 1.3247. If a strong impulse, we'd see 1.3276. Continuation will give 1.3290 and 1.3316.
USD/JPY
Today's support: - 98.86, 98.55 and 98.10(main). Break would bring 97.90, where correction is possible. Then 97.62, where a correction may also happen. Break of the latter will give 97.44. If a strong impulse, we would see 97.20. Continuation would give 96.86 and 96.65.
Today's resistance: - 99.94(main), where a correction may happen. Break would bring 100.24, where also a correction may be. Then 100.51. If a strong impulse, we would see 100.82. Continuation will give 101.14.
DOW JONES INDEX
Today's support: - 8100.00, 8053.26 and 8011.30(main), where a delay and correction may happen. Break of the latter will give 7986.50, where correction also can be. Then follows 7966.14. Be there a strong impulse, we would see 7922.81. Continuation will bring 7897.44.
Today's resistance: - 8179.26 and 8201.20(main), where a delay and correction may happen. Break would bring 8224.60, where a correction may happen. Then follows 8251.87, where a delay and correction could also be. Be there a strong impulse, we'd see 8281.36. Continuation would bring 8302.50 and 8324.10.
Rupee: Referring to our previous charts and updates we still maintain a bullish view on rupee aiming 48.80 levels. Dollar has slightly gone strong in the last couple of trading sessions which is looked more as a retracement. Only a break above 50.30 would change the view to neutral otherwise indicators are quite bullish. Bullish
Euro: Euro fell sharply due to poor economic expectations and bearish chart formations. The charts are looking quite oversold and retracements are expected to the tune of 1.3130 levels. Look for opportunities to go short around those levels or in turn go long around current levels for 70-80 pips. (Eur/Usd:1.2985). Bearish.
Pound: The pair broke the channel support at 1.4770 but is likely to take support from the 100 4-hourly and 21 Daily EMA at 1.4650-4690 levels. Incase the market is turning again from those levels we would look at buying for 100 pips. (Gbp/Usd: 1.4740). Neutral Yen: The Usd/Jpy pair is still stuck in the weekly triangle support at 98.32 and resistance at 101.70 levels. The pair is likely to break the consolidation soon. The direction of the break is likely to determine the direction of the pair for the next few sessions. (Usd/Jpy: 98.60).
Australian Dollar: Aussie has just broken the trend line support. It should ideally hold 0.7100 levels. Only a break below 0.7100 for 2 consecutive sessions would change the outlook neutral. (Aud/Usd: 0.7180).
Gold: Gold as expected plunged to the 200 Day EMA at $864 levels. Gold is holding below the daily and weekly trend lines and crucial moving averages. Strong break of $864 support can bring a fall upto $850. Sell at retracements around 880 to 890 levels. Short term Bearish (Gold: $887.00)
Dollar index : Dollar Index firmed up in the last few trading sessions mainly due to Euro weakness and is seen pressing the 86 – resistance levels once again. The bias for DX remains bullish above the 82-key support. Decisive break above 86.15 could march a rally upto 88 levels. Bullish.
Daily Forex Technicals | Written by FXtechtrade
EUR/USD
Today's support: - 1.3046(main), where correction is possible. Break would give 1.3003, where correction also may be. Then follows 1.2984. Break of the latter would result in 1.2960. If a strong impulse, we would see 1.2939. Continuation will give 1.2914 and 1.2881.
Today's resistance: - 1.3143 and 1.3164(main). Break would give 1.3386, where a correction is possible. Then goes 1.3228. Break of the latter would result in 1.3247. If a strong impulse, we'd see 1.3276. Continuation will give 1.3290 and 1.3316.
USD/JPY
Today's support: - 98.86, 98.55 and 98.10(main). Break would bring 97.90, where correction is possible. Then 97.62, where a correction may also happen. Break of the latter will give 97.44. If a strong impulse, we would see 97.20. Continuation would give 96.86 and 96.65.
Today's resistance: - 99.94(main), where a correction may happen. Break would bring 100.24, where also a correction may be. Then 100.51. If a strong impulse, we would see 100.82. Continuation will give 101.14.
DOW JONES INDEX
Today's support: - 8100.00, 8053.26 and 8011.30(main), where a delay and correction may happen. Break of the latter will give 7986.50, where correction also can be. Then follows 7966.14. Be there a strong impulse, we would see 7922.81. Continuation will bring 7897.44.
Today's resistance: - 8179.26 and 8201.20(main), where a delay and correction may happen. Break would bring 8224.60, where a correction may happen. Then follows 8251.87, where a delay and correction could also be. Be there a strong impulse, we'd see 8281.36. Continuation would bring 8302.50 and 8324.10.
http://www.prlog.org/10119208-equity-commodity-news-oil-service-stocks-boosted.html
By Corey Rosenbloom on April 20, 2009
With many Elliott wave practitioners puzzled at the current wave count, here is a possible mainstream interpretation of the latest Elliott Wave Count on the NASDAQ (^IXIC: 1673.07 +2.63 +0.16%), which has had the most impressive run-up off the March 2009 lows.
As a caveat, keep in mind this is only one interpretation.
This count assumes that we are perhaps completing a 4th Wave retracement (specifically an ‘expanded flat’) that is fulfilling the corrective wave nature. This is a simple wave count, without involving “X” waves and other complex concepts in Elliott lingo.What’s surprising is the strength of the rally off the March lows, prompting some to call this a strong impulse wave. Whatever the case, it looks like the gas is running out of the current swing, as a dominant ‘wedge’ pattern is forming across all equity indexes. You can almost ‘feel’ the price running too far, too fast.There’s no guarantee price will fall here, and any bear who has tried to call a top so far has been embarrassed, so keep in mind that markets can run higher than people think they can (or go lower than they think they can) so don’t try to outsmart the market - take what it gives you and do the best you can with the data you have at the time.
With many Elliott wave practitioners puzzled at the current wave count, here is a possible mainstream interpretation of the latest Elliott Wave Count on the NASDAQ (^IXIC: 1673.07 +2.63 +0.16%), which has had the most impressive run-up off the March 2009 lows.
As a caveat, keep in mind this is only one interpretation.
This count assumes that we are perhaps completing a 4th Wave retracement (specifically an ‘expanded flat’) that is fulfilling the corrective wave nature. This is a simple wave count, without involving “X” waves and other complex concepts in Elliott lingo.What’s surprising is the strength of the rally off the March lows, prompting some to call this a strong impulse wave. Whatever the case, it looks like the gas is running out of the current swing, as a dominant ‘wedge’ pattern is forming across all equity indexes. You can almost ‘feel’ the price running too far, too fast.There’s no guarantee price will fall here, and any bear who has tried to call a top so far has been embarrassed, so keep in mind that markets can run higher than people think they can (or go lower than they think they can) so don’t try to outsmart the market - take what it gives you and do the best you can with the data you have at the time.
Hong Kong Stock Market’s Rally May Continue: Technical Analysis
(Bloomberg) -- Hong Kong stocks’ six-week rally may continue for the rest of the month with the benchmark Hang Seng Index likely piercing through a so-called resistance point at 16,000, according to UOB-Kay Hian Ltd. The Hang Seng added 0.1 percent to 15,601.27 at the close of trading today, bringing its gain for the week to 4.7 percent. The index has surged 37 percent from a four-month low reached on March 9 amid optimism government stimulus efforts, including China’s 4 trillion yuan ($585 billion) spending plan, will ease the economic slump.
“The Hang Seng index could break the 16,000-point level,” said Steven Leung, director of institutional sales at UOB-Kay Hian in Hong Kong. “The momentum is very strong.”The gauge is trading just below its 200-day moving average of 16,301.03, according to data compiled by Bloomberg. Moving averages show the mean value of a security’s price over a set period. They are generally used to measure momentum and define areas of possible support and resistance in technical analysis.“Investors are getting bullish,” Leung said. “They are buying on slight pullbacks.”
“The Hang Seng index could break the 16,000-point level,” said Steven Leung, director of institutional sales at UOB-Kay Hian in Hong Kong. “The momentum is very strong.”The gauge is trading just below its 200-day moving average of 16,301.03, according to data compiled by Bloomberg. Moving averages show the mean value of a security’s price over a set period. They are generally used to measure momentum and define areas of possible support and resistance in technical analysis.“Investors are getting bullish,” Leung said. “They are buying on slight pullbacks.”
Asian Stocks Correction Is ‘Long Overdue’: Technical Analysis
(Bloomberg) -- The MSCI AC Asia Pacific excluding Japan Index may lose as much as 16 percent in the next two to four weeks as a decline is “long overdue” after a seven-week rally, CIMB Research said. The measure may fall to its 50-day simple moving average of 278 within the next month, CIMB analysts Nigel Foo and Kong Seh Siang wrote in a report today. That’s a drop of 16 percent from today’s high.The MSCI regional index rose as much as 1.6 percent to 331.66 today, taking its gain from the year’s low on March 2 to 37 percent. The index’s relative strength index climbed to 72 yesterday and may be capped by its so-called upper trendline channel and its 200-day simple moving average of 327 points, the CIMB analysts also said.
The MSCI index “is long overdue for a correction,” the analysts said. “The daily RSI is overbought at 72 and the index is also facing major resistance.”Trendlines are used by technical analysts to determine momentum in a market. They are found by connecting the dots between a market’s highs and lows.The analysts are also predicting losses for U.S. stocks over the next two to six weeks, saying that the Dow Jones Industrial Average is poised to fall to as low as 7,110, based on a so-called Fibonacci chart. That’s a 12 percent retreat from yesterday’s close.The ratios used in Fibonacci analysis are based on the sequence identified by Italian mathematician Leonardo Fibonacci in the 13th century to predict support and resistance levels for prices.
A key support for the Dow Jones Industrial will be at 7,537, its 50-day simple moving average, the CIMB analysts also said.
The MSCI index “is long overdue for a correction,” the analysts said. “The daily RSI is overbought at 72 and the index is also facing major resistance.”Trendlines are used by technical analysts to determine momentum in a market. They are found by connecting the dots between a market’s highs and lows.The analysts are also predicting losses for U.S. stocks over the next two to six weeks, saying that the Dow Jones Industrial Average is poised to fall to as low as 7,110, based on a so-called Fibonacci chart. That’s a 12 percent retreat from yesterday’s close.The ratios used in Fibonacci analysis are based on the sequence identified by Italian mathematician Leonardo Fibonacci in the 13th century to predict support and resistance levels for prices.
A key support for the Dow Jones Industrial will be at 7,537, its 50-day simple moving average, the CIMB analysts also said.
Euro May Fall to 1-Month Low Against Dollar: Technical Analysis
(Bloomberg) -- The euro may weaken to a one-month low against the dollar should the 16-nation currency drop below so-called support at $1.3070, BNP Paribas SA said, citing trading patterns. Buying of the euro may emerge at $1.3070 as that level is on a descending trend line that connects the lows of March 30 and April 10 and 17, based on data compiled by Bloomberg. Support is a level where buy orders may be clustered.“The currency pair is attempting to break $1.3070,” Claude Mattern, a technical analyst at BNP Paribas in Paris, wrote in a research note today. “A fall below that level would argue for a return toward $1.2990.”
The euro fell to $1.3084 as of 9:16 a.m. in London from $1.3186 in New York yesterday. The currency earlier declined to $1.3068, the weakest level since March 18. The $1.2990 level represents the low reached on March 18, based on Bloomberg data.“The daily indicators are around their zero level, with a light bearish bias,” Mattern wrote, citing momentum charts.The moving average convergence/divergence chart shows a sell signal for the euro against the dollar, according to Bloomberg data. MACD charts can indicate whether a price shift is a change in trend or a short-term deviation by comparing moving average s based on nine-, 12- and 26-day periods. In technical analysis, investors and analysts study charts of trading patterns and prices to forecast changes in a security, commodity, currency or index. Support is where buy orders may be clustered.
The euro fell to $1.3084 as of 9:16 a.m. in London from $1.3186 in New York yesterday. The currency earlier declined to $1.3068, the weakest level since March 18. The $1.2990 level represents the low reached on March 18, based on Bloomberg data.“The daily indicators are around their zero level, with a light bearish bias,” Mattern wrote, citing momentum charts.The moving average convergence/divergence chart shows a sell signal for the euro against the dollar, according to Bloomberg data. MACD charts can indicate whether a price shift is a change in trend or a short-term deviation by comparing moving average s based on nine-, 12- and 26-day periods. In technical analysis, investors and analysts study charts of trading patterns and prices to forecast changes in a security, commodity, currency or index. Support is where buy orders may be clustered.
Oil to Trade in $48-$50 Range, Move to $60: Technical Analysis
(Bloomberg) -- Oil’s 3.7 percent fall last week signals crude may settle in the $48 to $50-a-barrel range before rising to as much as $60 a barrel by the end of the year, according to Global Investment House KSCC.“Oil is still above the 11-week moving average and it’s consolidating,” Raed Diab, a technical analyst at Global Investment House, said in a telephone interview April 16. “Fundamentals are playing a role and that’s why it’s trading in a tight range.”Crude stayed above the 11-week moving average of $48.75 last week, indicating investors may continue buying the commodity. The 11-week moving average represents a medium-term indicator of price levels and investor behavior.
The next level of resistance is $54.60 a barrel, near this year’s intraday high set at the end of March, Diab said. Breaking that resistance could mean oil investors may target prices as high as $59 or $60 a barrel, representing levels last reached Nov. 14, Diab said.Oil shed two-thirds of its value in five months last year as demand evaporated, leading the Organization of Petroleum Exporting Countries to cut supply to stem the price slide.Crude reached a high of $147.27 in intra-day trading on July 11 and fell as far as $32.40 on Dec. 19. Oil has recovered this year, reaching as high as $54.34 on March 26, before retreating to $50.33 April 20.
Prices at $59.51 a barrel would be a 23.6 percent recovery in the five-month slide in crude, reaching a threshold from the ratio between numbers in the Fibonacci sequence. The ratio, sometimes known as the golden mean, is used to find points of support or resistance as prices retrace rallies or declines between previous high and lows.“There is strong support at $47.30,” the analyst said. The next support levels are $43.60 a barrel and $42.50, he said, adding that he sees oil trading in a range between $48 and $50 a barrel.Support levels indicate prices below which investors bet a commodity or stock may not fall, while resistance indicates a level at which investors may sell a security or commodity.
The next level of resistance is $54.60 a barrel, near this year’s intraday high set at the end of March, Diab said. Breaking that resistance could mean oil investors may target prices as high as $59 or $60 a barrel, representing levels last reached Nov. 14, Diab said.Oil shed two-thirds of its value in five months last year as demand evaporated, leading the Organization of Petroleum Exporting Countries to cut supply to stem the price slide.Crude reached a high of $147.27 in intra-day trading on July 11 and fell as far as $32.40 on Dec. 19. Oil has recovered this year, reaching as high as $54.34 on March 26, before retreating to $50.33 April 20.
Prices at $59.51 a barrel would be a 23.6 percent recovery in the five-month slide in crude, reaching a threshold from the ratio between numbers in the Fibonacci sequence. The ratio, sometimes known as the golden mean, is used to find points of support or resistance as prices retrace rallies or declines between previous high and lows.“There is strong support at $47.30,” the analyst said. The next support levels are $43.60 a barrel and $42.50, he said, adding that he sees oil trading in a range between $48 and $50 a barrel.Support levels indicate prices below which investors bet a commodity or stock may not fall, while resistance indicates a level at which investors may sell a security or commodity.
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