US Dollar on the Brink of a Trend Defining Plunge Ahead of 2Q GDP
Fundamental Outlook for US Dollar: Bearish
- Fundamentals support a recovery in US and global growth, but how does risk appetite factor in?
- Bernanke sees signs of stabilization, calls focus on the deficit
- Do technicals call for a dollar collapse or recovery?
It was a tenuous week; but the dollar was able to ultimately hold its own through the close. However, just because momentum behind the earnings-driven rally in risk appetite has stalled does not mean that the world’s most liquid currency has avoided a collapse all together. Sentiment winds have died down; but they can easily jostle the safe-haven dollar should another economic catalyst surface. This makes for an uncertain future when combined with the fundamental influence that the 2Q GDP report will have on the currency. Now, not only do traders have to interpret the data, they will also have to judge whether it has a greater impact on risk appetite or growth considerations for the beleaguered dollar.
Looking ahead to next week, the most immediate threat to the greenback’s stability is the intensity and direction of risk appetite. While this currency is deeply mired in speculation surrounding the economy’s leading or lagging growth potential, interest rate expectations, and deficit projections among other influences; risk appetite has proven itself to be insuperable. With the Federal Reserve vowing to keep the benchmark lending rate at levels that insure a carry status when conditions do turn around and politicians ensuring the economy will struggle with record levels of debt for years to come, there seems little doubt that the dollar will maintain its position on the opposite of risk appetite. But, considering the stalled progress most of the dollar and yen crosses saw last week; is there a strong shift in sentiment in the works? With EURUSD and GBPUSD just off of key levels of resistance, the pressure is growing. However, the primary source of momentum this past week – the second quarter earnings season – is already on the decline. If left up to the markets alone, equities have already forged new highs for the year; but commodities, fixed income and risk-sensitive currency pairs have not pushed to comparable levels. Oddly enough, one of the most likely catalysts for risk going forward also happens to be the most attention grabbing indicator on the US docket: GDP.
According to economists forecasts, the world’s largest economy contracted at a 1.5 percent on an annualized pace through the second quarter. This would be a marked improvement from the 5.5 percent and 6.3 percent rate of the recession through the first quarter of 2009 and fourth quarter 2008 respectively. This would certainly confirm policy officials expectations for a return to positive growth by the end of this year or beginning of the next; but through the near-term it is still a call for speculation to rank the economy’s performance against that of its major counterparts. China recently reported a sharp advance to a 7.9 percent pace of expansion while the UK printed a record 5.6 percent contraction. And, then there are still those economies that have yet to report their numbers. Japan suffered a record-breaking 14.2 percent slump through the first quarter, but is expected to snap back according to BoJ and Cabinet officials. The Euro Zone awaits it August 13th release, but the Bundesbank has already stated Germany saw only a ‘slight contraction’ through the second quarter. This will increasingly become a consideration of nuance.
The other facet of the US 2Q GDP release is that it will be accepted as a gauge of global growth. This further complicates the issue. Should the reading be good, the influence on risk appetite could outweigh the implications for US returns and actually drag the dollar down; and vice versa. Another important consideration is the timing of this release. Due Friday, speculators may decide to move the dollar before the data crosses the wires. If this is the case, the GDP report could factor into long-term projections but not short-term volatility.
Euro Threatened with Mounting Deflation Risk, US Bond Auction
Fundamental Forecast for Euro: Bearish
- German Producer Prices Fall Most in Over Two Decades
- Euro Zone, German PMI Results Top Expectations, Stay in Below 50
- Sentiment Points to Continued Euro Gains Against the US Dollar
The Euro looks vulnerable in the week ahead as headline inflation figures point to the increasing likelihood of deflation while a the US Treasury holds a record-setting bond auction that stands to boost the Dollar at the expense of the single currency. Germany’s Consumer Price Index is set to show the annual pace of inflation turned negative for the first time in 23 years in July after holding at a standstill in the previous two months. The broader Euro Zone measure of consumer prices has already turned negative, shedding -0.1% in June and likely to slip another -0.4% in July. If expectations of falling prices become entrenched, the currency bloc could be facing a long-term period of stagnation as consumers and businesses are encouraged to wait for the best possible bargain and perpetually delay spending and investment.
For their part, the European Central Bank has seemingly struggled to formulate an effective policy response to the deflationary threat thus far. Jean-Claude Trichet and company have focused on banks as the vehicle through which to make money cheaper and put a floor under falling prices, promising unlimited lending to the region’s financial institutions including an unprecedented 442 billion euro in 12-month bank loans. The ECB will also implement a 60 billion bond-buying scheme. To the central bank’s credit, borrowing costs have indeed moved lower: although the ECB publicly maintains target interest rates at 1%, it has allowed the average cost of overnight lending (referred to as EONIA) to drift far below that. Indeed, borrowing in Euros has been consistently cheaper than doing so in British Pounds since late June, even though the Bank of England’s stated interest rates are substantially lower at 0.5%. However, the lower cost of credit between banks has not translated into lending, and so has offered little stimulus to the overall economy. Indeed, loans to Euro Zone businesses and households grew just 1.8% in May, the lowest since records began in 1991. Banks may be choosing to hang on to cash as a buffer against $1.1 trillion in as yet unrealized losses linked to the subprime mess, according to the IMF, as well as the fallout from looming defaults and/or devaluations among the EU’s newly-minted central European members. In any case, the door is open for traders to punish the Euro as the ECB’s inability to ensure that looser monetary conditions translate beyond the interbank market make deflation all but certain.
An unprecedented bond auction in the United States may also weigh on the single currency. The US Treasury’s announced last week that it will sell a record $115 billion in bonds next week in a bid to help finance the rapidly growing public deficit, pushing 10-year notes to register the largest daily loss in nearly seven weeks and sending yields to the highest level in a month. We have argued for some time that the US Dollar will benefit as the government floods the market with new debt: Treasury prices will head sharply lower, putting tremendous upward pressure on the long-term interest rates. This will make USD-denominated assets attractive to yield-seeking investors, driving demand for the greenback. Because the Euro is the second-most traded currency after the greenback, it often serves as the de-facto anti-Dollar, with short term studies showing a hefty -85.8% correlation between average indexes of the two units’ values. This means that any meaningful turn in sentiment in favor of the US Dollar will weigh heavily on the Euro, not just in the pairing against the greenback but across the board.
Japanese Yen Looks for the Next Engine for Risk Appetite
Fundamental Forecast for Japanese Yen: Neutral
- Earnings season draws to a close; but where does that leave risk appetite?
- Japan’s trade balance improves as both imports and exports plunge
- Yen crosses don’t offer a clear cut technical outlook
Direction from the Japanese yen is often the product of risk appetite; and the fundamental outlook for next week doesn’t suggest this essential correlation will break any time soon. However, this connection may actually complicate the future for speculators rather than make it more straightforward. The primary source of what has essentially been a market-wide advance in risk appetite these past two weeks seems to have petered out. Earnings releases are in decline and there are very few individual releases on the docket that can initiate a global shift in sentiment on its own. Among other potential catalysts – like growth speculation – there are many contingencies and shades of gray that could make the yen a very difficult currency to trade going forward.
First and foremost, the market will have to reconcile its predilection for earnings data. Ever since Goldman Sachs reported record profits through the second quarter (a strong sign considering it is a financial firm, struggling with a global recession and it had just repaid a rescue loan from the US government), market participants have been putting their sidelined funds back into the capital markets to make a competitive return. However, through the end of this past week, we have seen upside surprises diminish and the notoriety of those companies names attached to the earnings reports recede. Looking back on the week four Fed ‘Stress Tested’ banks report losses and many more blue chips missed forecasts. Looking ahead, there are very few major reports due; but more importantly, there are far fewer days when a group of notable earnings releases will be reported at the same time (and therefore can generate enough influence to catalyze risk appetite. One of the last opportunities for a earnings related swell is on Thursday when ExxonMobile, MetLife, Walt Disney, Dow Chemical, Travelers and Colgate are scheduled to release.
If we are to see the market move away from earnings, where should we expected the market’s drive to come from? Sentiment can be a catalyst of its own. Left to their own devices, speculators are capable of reviving and breaking major trends. Equities across the world were able to capitalize the rise in optimism over the past two weeks and record new highs for the year. If the market decides that this has turned the tides for yields and investment flows, the rest of the markets may look to play catch up and in turn leverage risk appetite in the process. There may also some fundamental factors choosing a rise or fall in sentiment. There are many growth-related indicators on the docket to feed the outlook for the world’s recovery; but it is Friday’s US GDP figure that will truly establish the progress of the global economy. The consensus calls for a significant moderation of the nation’s contraction. However, whether we receive a positive or negative surprise (or no surprise at all), that is a long time to wait when market conditions seem to require an immediate resolution.
British Pound May Find Support On Improving Housing Market
Fundamental Outlook for British Pound: Neutral
- U.K. GDP contracted by 5.6% annually, which was the most since records began in 1955
- U.K. Retail Sales rose more than expected by 1.2%, Led by a 4.7% increase in textiles
- BoE voted 9-0 to keep rates and QE measures unchanged
The British pound ended a week of choppy price action heading lower as the 2Q GDP preliminary reading showed a deeper than expected contraction of 0.8% against expectations of 0.3%. Economic growth on the year dropped by a 5.6% which was the most since record keeping began in 1955. The growth figures raise concerns that the BoE would need to add to their quantitative easing efforts in order to ensure an economic recovery. The release of the MPC’s minutes from the July meeting showed that after considering additional measures the committee unanimously voted to stand pat but would review their alternatives again in August when they release their quarterly inflation report. A 1.2% increase in retail sales spurred hope that domestic consumption would start to improve as non-food sales rose 1.6% pointing to an increase in discretionary spending. However, elevated unemployment levels and the service sector declining by 1.0% in the second quarter will make future growth challenging.
Although the drop in growth is alarming, the improving outlook for the global economy which was evident in the massive rally in equities during the week could keep the MPC on hold. Bank of England Deputy Governor Charles Bean said this week that the economy may have stopped shrinking which could signal the potential for an improvement in the central bank’s growth estimates when they release their latest report on August 12. The growth numbers and the corresponding inflation outlook will determine the future course of action.
The economic calendar this week will give us further insight into the U.K. housing market and prevailing credit conditions. The Nationwide Building Society is expected to show that house prices rose 0.2% in July as thawing credit markets are underlining demand. Indeed, mortgage approvals are forecasted to rise to 47,000 from 43,400 in June which would be the highest since April, 2008 but still far below the ten year average of 97,000. The BoE lending report mortgage lending was showing sign of improving but that credit for consumers and businesses remains a challenge. The GBP/USD has been trading at the top of its recent range of 1.6000-1.6700 which could leave it susceptible to a move lower. However, we have seen solid near-term support from the 20-Day SMA at 1.6371, which is starting to converge with the 50-Day SMA at 1.6260- a level that has held since March.
Written by John Kicklighter, Ilya Spivak, John Rivera and David Song, Currency Analysts
Article Source - Forex Trading Weekly Forecast - 07.27.09
Saturday, July 25, 2009
Forex Trading Weekly Forecast - 07.27.09
US Dollar Supported as Stocks Surge with Treasury Sales to Boost Yields (Euro Open)
The US Dollar remained supported despite a sharp rally across Asian stock exchanges, diverging from risk trends on news the Treasury will sell a record $115 billion in bonds next week, boosting interest rate expectations and driving yield-seeking interest in the greenback. Germany’s IFO Survey and UK Gross Domestic Product data headline the calendar in European hours.
Key Overnight Developments
• US Dollar Supported as Stocks Surge with Treasury Sales to Boost Yields
• Euro, British Pound Consolidate at Familiar Levels in Overnight Trading
Critical Levels
The Euro traded sideways in Asian hours, oscillating in a narrow 30-pip range below 1.4170. The British Pound tried higher to test above 1.65 but prices retreated late into the session, yielding an effectively flat result ahead of the opening bell in Europe.
Asia Session Highlights
With no major market-moving data on the economic calendar, forex market consolidated near familiar levels in overnight trading hours. Interestingly, prices seemed to look past a sharp rally on Asian stock exchanges, a dynamic that over recent months has meant losses for the safety-linked US Dollar. A similar divergence was on display in New York hours, with the currencies shying away from breaking key levels even as risk appetite continued swell. The greenback may be seeing support as traders react to the US Treasury’s announcement that they will sell a record $115 billion in bonds next week. Treasuries declined as the news crossed the wires, with 10-year notes posting the largest daily loss in nearly seven weeks, sending yields to the highest level in a month. We have argued for some time that the US Dollar will benefit as the government issues debt to finance the rapidly growing public deficit: Treasury prices will head sharply lower as the market is flooded with new supply, putting tremendous upward pressure on the long-term interest rates. This will make USD-denominated assets attractive to yield-seeking investors, driving demand for the greenback.
Euro Session: What to Expect
Germany’s IFO Survey of business sentiment is expected to rise for the seventh consecutive month in July, pointing to continued improvement in firms’ 6-month economic outlook. Still, the reading is expected at 90.1, a print below the 100 “boom-bust” threshold, suggesting conditions are still deteriorating but at a slower pace. The Euro Zone Purchasing Manager Index is set follow a similar a similar trajectory, printing at 43.5 in July to show that the manufacturing sector shrank for the 14th consecutive month, albeit at the slowest rate since the metric hit a record low in February. Some recovery is to be expected as an array of fiscal packages from governments across the currency bloc filter into the broad economy, but the big question in the Euro area as well as most anywhere at this stage is whether growth is sustainable after stimulus cash dries up. As it stands, the latest economic forecast from the International Monetary Fund (IMF) reveals that the Euro Zone will stand apart from other industrialized economies in seeing economic growth continue to contract in 2010, pointing to a comparatively slower return to higher interest rates that will keep the Euro on the defensive against most major currencies.
In the UK, Gross Domestic Product is set to shrink -0.3% in the second quarter, a far smaller decline than the -2.4% lost in the three months through March and the smallest drop in a year. London-based think tank NIESR has forecast the moderation, saying “the U.K. economy is now stagnating rather than continuing to contract at a sharp pace.” Minutes from the last meeting of the Bank of England echoed the optimistic outlook, with policymakers saying risks to GDP have probably diminished and speculating that the economy may shrink less than was previously expected. Not everyone is as sanguine, however: the British Chamber of Commerce urged the BOE to add 25 billion pounds to their asset-buying scheme, saying a recovery is “not guaranteed”, a sentiment that has been echoed by the Shadow Monetary Policy Committee (a group of independent economists that meet at the London-based Institute of Economic Affairs). This makes today’s report critical to shaping the market’s expectations of future of monetary policy: traders will likely be less sensitive to a print in line with or better than what is expected, as this would only reinforce themes that have already been priced into the exchange rage; conversely, a disappointing outcome could weigh heavily on sterling as traders readjust their exposure to reflect a likely expansion of quantitative easing.
Written by Ilya Spivak, Currency Analyst
Article Source - US Dollar Supported as Stocks Surge with Treasury Sales to Boost Yields (Euro Open)
Futures Trading
Many small investors lost their lifetime saving in the stock market crash of 2008. The first choice for many investors was and is the stock market. After getting their fingers burnt during the recent stock market crash, many small investors are looking for new avenues. Investors have many choices for investing their money today.
What about futures trading? Many individual investors make a living day trading futures. However, futures trading is not for you if you are among those who take a look at their mutual funds portfolios only once a year and wonder about the returns. Risk and uncertainty goes hand and hand in money making opportunities. No gain without pain.
NetPicks Futures Trading Signals
If you want to take on futures trading, you will have to get out of the buy and hold investment mentality. What it means that those who can embrace the inherent volatility of the world and the markets and use it as a wealth building tool are more successful at futures trading. Those who can’t shake off the preconceived notions and discover to make money as the market rise and fall are not successful at futures trading.
Futures trading had begun in the United States in the mid 18th century. Most of the early futures contracts were related to agriculture or commodities. But futures trading didn’t have global significance until the 1980 when companies and governments embraced futures trading as financial management tools for hedging. You must know that futures trading belongs to the 21st century.
Great changes have taken place during the last many decades. Today individual investors trading futures are on a level playing filed with professional traders and institutional investors. Futures trading is the favorite pastime of the hedge fund managers. Technological advances especially the internet has transformed the futures trading landscape. Now as an individual investor you can easily compete with the hedge fund managers in futures trading.
NetPicks Futures Trading Signals
Futures trading is in fact a zero sum game. If you are long, your counter party will be short and vice versa. Now most futures contracts are electronically traded with online order entry and execution. E-mini products have been created specifically to appeal to the individual investors and are now standard among exchange offerings. The most popular E-mini futures contracts are the E-mini S&P futures and the E-mini Nasdaq futures.
There was an uptrend in the stock markets that lasted many decades. There were some minor downtrends but the overall trend had been upwards for many decades. The chances for sustainable trend that last for decades like that happened in the stock markets during the 1980s and 1990s are less likely. Good services and basic materials will probably undergo major price swings, up and down during the next two to three decades. The volatility of the markets is only going to increase.
Trading is not investing. Trading is not gambling. Trading is in fact speculating. The today’s world calls for a more active and even speculative investor. Speculation means you invest in anticipation of making a profit from the market movements. The past investors could afford the luxury of buying and holding stocks and mutual funds for the long term (this is what Warren Buffet did in building his fortune. He would buy blue chip stocks that had gone out of favor but were inherently sound and held them for decades) but not now. The new world calls for a trader and futures trading offer one of the best opportunities to make money by trading in volatile times.
NetPicks Futures Trading Signals
However, trading futures contracts requires active participation. You will have to work at it or you will be out of the game very quickly if you want to change from a couch potato to a futures trader. You need to know the futures market intimately. You should know that trading futures contracts is a risky business. Developing a winning futures trading plan can help you achieve success!
Futures trading is done by most of the people like you and me who are interested in making money in the markets. Trading E-mini futures has become popular with many individual investors apart from professional traders and speculators who also trade other futures contracts. “Buy low and sell high”, is the basic premise in futures trading as it is in stock trading. You try to go long when the prices are low and go short when the prices are high.
You will like to know what is different in futures trading from stock trading. The fact that you can trade futures with leverage on either long or the short positions introduces an additional element of risk not present in the stock market. Leverage is a risky. Futures contracts are highly leveraged and marked to the market daily. Leverage is beautiful when it works in your favor. However, it is dangerous and has a dark side. You will only come to know about it when you are caught on the wrong side of the market with highly leveraged positions. There are many ways that individuals can use futures for trading and portfolio diversification. Futures industry is well regulated and has superior financial safeguards in place to ensure trading integrity.
NetPicks Futures Trading Signals
Another major difference that you need to know between futures trading and stock trading is that there is no uptick rule in futures trading. This means that you can easily enter into a position to capture a downward move in prices with no restriction unlike that in the stock market where you cannot short every stock. Thus, it is as easy to sell short as it is to buy long.
Even when you are not particularly good at it, how do you manage to survive at futures trading? The answer is simple. You should have the money first to open a margin account. Then you should have the ability to develop a trading plan that enables you to keep making money in the market long enough to capitalize your next big move. How do you become good at futures trading? By learning technical analysis!
So you won’t last long in the market if you don’t have a good trading plan. And you won’t be able to trade futures if you don’t have enough money. The chances are your money will quickly disappear if you start with a small trade size.
$5,000 is the minimum with which you can start trading futures. However, in my opinion you need to have at least $25,000 in your account in order to start trading futures. You must know this thing that only 5% of the futures traders succeed and 95% of the people trading futures lose money consistently.
NetPicks Futures Trading Signals
Make sure that you go into trading futures contracts with realistic expectations and you understand the risks involved when you start trading futures. You can take advantage of the managed futures accounts if you are not sure how to handle the risk involved in futures trading.
So in order to trade futures, you need money, patience, knowledge and technology to be successful. Without money you can’t open a position and without knowledge you won’t know when to enter and when to exit. Trading futures contracts is truly a hybrid that uses both fundamental and technical analysis. Only proceed ahead if you have these skills in abundance.
You need to know the futures contract specifications. There are seasonal tendencies in the markets that you need to be aware of. The fundamental side of futures trading involves getting to know the industry in which you are making trades. You should also know the important reports that usually affect the industry in which you are planning to trade futures contracts. You need to keep an eye on the release of those reports.
You should determine your trading style. Are you are scalper? Are you a day trader? Are you a swing trader or are you a position trader? You will need to develop your own trading style whether it is momentum trading, scalping, day trading or swing trading. Your personality will determine your trading style. Now, the technical side of futures trading tells you what the market will do in response to the fundamentals.
NetPicks Futures Trading Signals
As I have said before: Learn technical analysis. Understanding candlestick charts and candlestick patterns can be a good tool in your technical analysis arsenal. Don’t try to conquer every type of analysis at once. Instead, go step by step and focus on mastering one item at a time—maybe concentrating only on chart patterns such as the candlestick patterns for instance. Establish a trading plan for getting there, once you know your trading goals.
Options University Live Trading Event
Do you know about the coming Options University Live Trading Event? How would you like round trip tickets to Sunny Boca Raton, Florida? But You Must Act Right Now! There are only 8 seats open for Options University's 'Sold Out' Platinum Live Trading Event which starts next Tuesday, July 28th, in beautiful Boca Raton, FL... And we have a set of round-trip tickets "with your name on it" if you're able to make it down, but you must call by Monday, July 27th, or before they're all gone. (whichever comes first...remember, there are only 8 spots available, so if you're interested after reading the info below, I urge you to make a prompt decision.)
This promotion is being made available to a relatively large group of Options University students, so please review everything below and let us know right away if you're interested. First off, this is no 'ordinary' Live Trading Event, but rather a TOTAL OPTIONS TRADING EXPERIENCE that teaches the student ALL aspects of options trading, via LIVE, real-time trading...and the next one is NEXT WEEK! This program involves LIVE trading, op-portunity selection, and trade management alongside professional traders who are showing their every move... from pre-opening discussions to post market wrap-up, seeing what the pros see, cashing in over and over again while avoiding mistakes... And the best part is...
It's been SO SUCCESSFUL, a majority of current coaching students are UP double digits in the last six months while many "seasoned" traders have crashed and burned... The cost of entry is MUCH LOWER than any other program out there... even those of inferior quality. That is, if you can find anything else REMOTELY CLOSE to this program ...(Why waste your time and INCOME, when we have a better way...). At one of our last gatherings in San Francisco, several hands went up when asked if they had made significant money AT THE EVENT, and a few students had MADE THEIR ENTIRE ANNUAL FEE back while sitting in the days training session...
Here's What Else...During the Platinum Coaching Program, you will have PERSONAL ATTENTION from some of the most successful trading experts and traders on the planet... at their beck and call... even willing to put in after-hours 'bull sessions' if desired...You will discover how the pros select stocks and identify market opportunities... in a real-time LIVE TRADING ROOM environment (and how to best take advantage of them)... and EXACTLY HOW to put on the best options strategies... by watching trading platform experts demonstrate LIVE... answering your questions as they trade...
And WE do all of the work setting up the LIVE EVENT... All you have to do is show up... with a laptop, an open mind... and the readiness to BECOME A MORE CONFIDENT OPTIONS TRADER, with all the rewards typically associated with reaching 'expert status'(which could be huge). Why are we willing to pay for your airfare? (no more than $500) Because we're so confident in the LEVEL OF KNOWLEDGE and hands on EXPERIENCE you'll gain from this first event, that after you see the opportunities presented before you first-hand, while WATCHING AND LEARNING from the other students--many who are TRADING LIVE along with the instructors (and in many cases profiting beyond the tuition fees that they paid)--that you'll want to come back to our next Platinum event next quarter.
What will it cost you NOT to attend? This number is immeasurable. Especially when multiplied over years and years of not having this hands-on training. Here's what to do next...
1. READ the informational letter below from Ron Ianieri
originally sent out to our 2008 Live Mastery Students in late December.
2. Call our offices at 866-561-8227 and ask for Sarah
(Remember, there are only 8 seats remaining). We must limit our seating in order to assure the best learning environment for our students. This is 'first call, first served', so call today due to limited seating...Normally there is an application process to come to the Platinum Trading Event. But due to this short notice (it starts next Tuesday) there isn't enough time. If you're interested, please call 866-561-8227 and ask for Sarah.
From the desk of Ron Ianieri
RE: Re-Introducing the OU "Platinum Coaching Program"
Greetings,
Last year, I introduced my new Platinum Coaching Program, because several of my students have approached me about the idea of spending a few days trading 'live' with me in person at our offices in Boca Raton, Florida. I had been hesitant to do so because option trading is usually a longer term, position management type of trading, not day trading. Very infrequently do we enter and exit a trade in the same day. Most trades take weeks or months to play out. Having an additional day or two after putting on the position would be counter-productive because there would not be enough time to observe the position functioning.
After having several more people approach me on this subject,an idea struck me. What if instead of spending a three day period with me, you could spend several three day periods with me spaced over the course of a full year! Each of these three day periods would be full day events from pre-opening discussion to post-market wrap up. Now, this idea started to appeal to me! We would meet quarterly, for three days each time, with me and a select group of other 'experts' (John Person, David Elliott, Price Headley, Peter "the Shadow Trader" Resnichek to name a few) that I've hand-picked.
The result - We completely SOLD OUT in a matter of weeks. I even had to let a few 'extra' coaching students in, because the demand was so great. The program is very successful, as the majority of the current Platinum Trading Members are UP double digits in the last six months even with the current market conditions wreaking havoc on fund managers and professional traders alike! With this type of success among our Platinum Members, I've decided to allow a very limited number of additional students into the program for 2009. Only Eight (8) additional students to be exact. Before we get to the pricing, let me first tell you what you'll get...To add to the learning experience, I thought it would be a good idea to add all the services below to the Platinum Trading Program.
-3 months access to the OU Platinum Membership site and analytic tools ($291 Value)
-3 month access to ALL webinar classes, and all recorded archives including the Live Mastery Classes, Retire Rich, Trade the Position, etc.
-3 month access to Options University Strategist options advisory service.
-3 month access to OU Forex Trader Advisory service.
The real "gem" of this is the live trading events. By spacing them out, students can observe the real affect of time on positions; unlike a simple, single event. Furthermore, I am bringing in other expert instructors just to make sure you get the personal attention I want you to have in this service.....the personal attention you deserve! These will be experts in the areas of real-time stock selection, identifying market opportunities, and they will be showing you in a 'live' trading environment how they find stocks to trade,then we'll be showing you how to put on the best options strategies!
Did I fail to mention that we will only be taking [8], I repeat only [8] new coaching students for 2009? That is correct! Last year, we accepted 50 students into Platinum, and so I've decided to only allow [8] more students in this year for 2009. Each live event will be limited to around 35 - 50 students! This means that the student/teacher ratio will be very good. Try to beat that!
Note, that this is typically by APPLICATION ONLY. But Not this time! Simply dial 866-561-8227 and ask for Sarah.
Added to this, the instructors will be available after the event into the evening hours to have "bull sessions" where you will be able to discuss what you did right and what you did wrong that day. I am going to do everything I can to assure that your personal interaction time in this service is second to none! As you know, I am not a marketer, I am a trader. I am personally writing this letter to you so that you know that this is NOT a ploy. This program is on an experimental basis! I am truly excited about being able to offer this service now! If it turns out that in the future I have the time to do this again, the prices will be MUCH higher again. We've already raised them significantly, but since many of my coaching students have made back their tuition many times over, I need to raise the tuition this year to limit our group size to only the most serious traders. Here's what you're looking at: For The July 2009 Platinum Coaching Event, You Only Pay $2,500(which includes airfare, no more than $500)
If you're one of the first 8 to call you will be invited to come to the next Platinum Live Trading event on July 28th, 2009 (Next Tuesday) in Boca Raton, Fl. You will also get all bonuses and Platinum member benefits listed above, PLUS for those lucky traders that are fast enough to respond to this unique offer Options University will cover the cost of your round-trip airfare to and from the event, (no more than $500). We look forward to seeing you there!
Trade Smart. Not Often.
Brett Fogle, President
The Options University
Friday, July 24, 2009
Dollar Trading To Be Dominated By Bernanke and Geithner Testimony
The USD is set for another volatile action-packed trading day as this weeks' trading comes to a close. The Dollar saw sharp moves against the EUR, GBP and JPY yesterday. This type of behavior is set to continue today as vital economic news is set to come out of the U.S. The economic events that are set to lead the forex market are the publication of U.S. Revised UoM Consumer Sentiment at 13:55 GMT, Federal Reserve Chairman Ben Bernanke's Testimony and Treasury Secretary Timothy Geithner's speech on U.S. economic recovery both at 14:30 GMT.
USD - Dollar Rallies vs. Yen on Economic Recovery Hopes
The U.S. Existing Home sales notched a 3rd monthly rise in June, and prices hit their highest since October. This fueled hopes the housing sector is finally on the mend, and many analysts hope this will help propel a broader economic recovery. According to analysts, the data suggests that the U.S housing sector is beginning to stabilize. This is a necessary component for a more meaningful U.S. recovery, and hence a stronger USD in the long term.
The U.S. Dollar soared against the Japanese Yen yesterday, due to the U.S. housing data. The USD rose 1.2% to as high as 95.30 vs. the JPY on Thursday. However, the pair finished trading at the 94.63 level. Against the EUR, the Dollar traded near a 7 week low at $1.4292, the weakest level since June 3. The pair finished trading much lower at the 1.4162 level. This was despite the greenback falling in early trading as the U.S. stock-index futures advanced on speculation that the worst of the recession may be over, prompting investors to purchase higher-yielding assets.
A number of analysts cautioned that the rally in risk sentiment on Thursday could be short-lived, as sentiment remains fragile and markets are probably quite near to seeing risk aversion returning to the forefront. This will be clearer to forex traders today, as 3 vital economic events are set to take pace in the U.S. These include the Revised UoM Consumer Sentiment at 13:55 GMT, Federal Reserve Chairman Ben Bernanke's testimony at 14:30 GMT and Treasury Secretary Timothy Geithner's speech on the economy also at 14:30 GMT.
EUR - EUR Hits 7 Week High Against the U.S Dollar
The European currency made gains against the U.S Dollar in early trading after data on U.S. jobless claims in the latest week came broadly in line with expectations. However, this was short lived, as the U.S. housing data was very optimistic, resulting in the pair closing far lower at the 1.4162 level. The EUR also fell against the GBP to the 0.8589 level as confidence returned to the British currency. However, the EUR/JPY pair was unchanged as demand for the safe-haven JPY fell yesterday.
The British Pound traded near the highest level this month against the USD, as advances in retail sales and mortgage approvals prompted speculation the recession in Britain is abating. In turn, this leads economists to the conclusion leading to speculation that the Bank of England (BOE) will increase its Interest Rate. The Bank of England reduced the main Interest Rate to a record low 0.5% in March. The Sterling also gained for a 2nd day against the EUR and the Yen as a government report showed Retail Sales increased last month at 4 times the pace forecast by economists.
There is much data coming out of Britain and the Euro-Zone today that is expected to determine the GBP and EUR crosses, as this week's trading comes to a close. From Britain, the Prelim GDP and Index of services figures are set to be published at 08:30 GMT. From the Euro-Zone, the German Ifo Business Climate and Flash Manufacturing PMI are set to be released at 08:00 GMT. Forex traders are also advised to follow U.S. economic news too, as the market is set to be very volatile throughout the day.
JPY - Yen Loses Ground Amid Economic Recovery Hopes
The Japanese currency fell against the U.S Dollar and the GBP on Thursday, paring losses made the previous day. The JPY hit its lowest level in more than 2 weeks against the Dollar on Thursday, and a 3 week low against the EUR as traders in Asia sold Yen in anticipation of outflows from Japanese investors. The Yen also dropped versus the Swedish Krona and Norwegian Krone yesterday as Japanese financial companies prepared to raise at least 700 billion Yen ($7.42 billion) for funds that will be invested globally.
Much of The Japanese currency's decline came about after the Finance Ministry said the contraction in the nation's exports slowed to 35.7% in June from a year earlier. Japan's trade data however provided hard evidence that the global economy is now on the mend, analysts stated. As the risk sentiment improves on the back of receding wariness about the prospects of the global economy, the Yen may weaken further against higher-yielding currencies.
Crude Oil - Crude Oil Eyes $67 a Barrel
The Crude Oil prices rose above $66 a barrel Thursday, ending at the highest level in 3 weeks at the $66.88 level. This came about as U.S. home sales data lifted stock markets and raised hopes for an economic recovery. Oil advanced 2.7% after the National Association of Realtors said home resales increased in June for a 3rd consecutive month.
Crude has risen in 6 of the recent 7 trading sessions. The rally came even after U.S petroleum data continued to show weak demand and rising inventories. Crude Oil and other commodities have tracked equity markets in recent months as analysts seek signs of a better economic outlook after the downturn cut world energy demand for the first time in a quarter of a century.
Article Source - Dollar Trading To Be Dominated By Bernanke and Geithner Testimony
S&P Futures
S&P futures contracts are based on the S&P 500 stock index and traded on the Chicago Mercantile Exchange (CME).The S&P 500 index is a market valued weighted index of 500 large capitalized stocks traded on the New York Stock Exchange (NYSE), Nasdaq National Market Executive System (NASDAQ) and American Stock Exchange (AMEX). S&P Futures are the most popularly traded stock index futures contract.
The S&P index was introduced in 1957. S&P 500 stock index is currently the investment industry’s standard for measuring portfolio performance. Majority of the portfolio managers measure their performance relative to the S&P 500 index. It has become the benchmark for the financial industry. The S&P 500 is made up of 400 industrial companies, 40 financial companies, 40 utilities and 20 transportation companies. S&P 500 index offers a fairly diversified view of the US economy.
The original S&P 500 futures contracts were valued at $500 times the index in the beginning. As the stock market began to surge higher in those days, the index more than doubled in three years. The value of the S&P futures contract neared $500,000. A 10 point change on the S&P 500 index was worth $5,000 with the index approaching the 1000 level.
NetPicks E-Mini S&P Futures
Margin requirements for the S&P futures contract trading were very high. Many traders were ruled out of the futures market with the margin requirements for that sized contract. CME introduced an S&P futures contract that was worth $250 times the value of the index in 1997. The value of the contract was halved in order to make the S&P futures contract more accessible to traders. Now, a move of a full point is worth $250 only. Suppose the S&P 500 index value is at 1350. The value of the S&P futures contract will be ($250) (1350) = $337,500.
Earlier in that same year CME introduced another mini S&P futures contract. This news mini contract became highly popular with individual traders instantly and was a hit with the investing public. E-mini S&P futures contract is worth only $50 times the S&P 500 index and the value of this new E-mini S&P futures contract brought the initial margin requirements down to around $4,000 at that time.
With the S&P futures $250,000 contract, the rising stock market put the initial margin at $15,000. This was keeping the S&P futures contract out of the reach of many individual speculators even with a margin requirement of only about 6 percent of the contract’s value. By introducing the E-mini CME put the S&P 500 Index within the capabilities of many individual accounts. E-mini S&P futures contract in fact revolutionized trading. Today many individual traders make a living by day trading E-mini S&P futures.
Another important decision that the CME officials took was giving traders direct access to the market without going through an order handler. Now trading orders could take place entirely on a trade matching computer with no human intervention. This was the real innovation that allowed small orders of this new E-mini market trade entirely on an electronic platform and not in the traditional open-outcry pits.
E-mini S&P futures contracts would no longer be limited to after-hours trading or to supplement the primary pit contract. As the allowable number of contracts was increased over time, electronic trading became the mainstream market for the E-mini S&P futures contracts.
The radical move caught the wave of online trading and day trading that was revolutionizing the stock market at the same time. CME also decided it might as well keep the market open almost 24 hours a day as long as trading was all computer-based.
S&P futures contracts are another example of how 24 hours a day trading enables traders to respond to economic news releases in pre-market and after-market sessions. Regular trading hours for S&P futures contracts are from 8:30 A.M to 3:15 PM. S&P futures contracts are valued in ticks worth 0.1 index points or $25.
NetPicks E-Mini S&P Futures
The evening session continues on the Globex until 8:15 AM overnight. It starts at 3:30 PM (15 minutes after the close at 3.15 PM). Individual S&P futures contract holders are limited to no more than 20,000 net long or short contracts at any one time.
A procedure is set in place to halt trading if the index experiences major declines or increases beyond certain limits. Circuit breakers are triggered if these price limits are crossed. The limits are set on quarterly basis. A price limit is how far an S&P futures contract can rise or fall in a single trading session.
Collar Rule:
What the collar rule does is limit the chance of huge gains or losses as a result of futures trading. The collar rule limits the traders from piling buy or sell orders in an attempt to exaggerate the gains or losses of the market. It addresses price swings related to program trades that move the Dow Jones Industrial Average (DJIA) more than 2% by requiring index arbitrage orders, or orders that bet on the spread between the futures and the cash of stock indexes to be stabilizing.
It’s time to learn how an S&P futures contract ticks once you have mastered futures basics such as the performance bond margins, the mark to market requirements and the account specifics. Especially during slow seasons in the stock market such as summer, fall and around the winter holidays, overnight or pre-market trading can be thin and dangerous.
CME’s most actively traded contracts are S&P futures including the E-minis and Eurodollar futures. There are hundreds of futures contracts that trade on the federally regulated futures exchanges in the United States. Each of these exchanges trade futures contract that are somewhat unique to it.
E-mini S&P Futures Contracts:
Because of high intraday price volatility and major price swings on a daily basis, E-mini S&P futures contracts (ES) are the favorites of the day traders. Because they enable you to trade the market’s trend with only one fifth of the requirement, E-mini S&P futures contracts (ES) are among the most popular stock index futures contract.
The value of the E-mini S&P futures contract is $50 times the value of the S&P 500 stock index. One tick on E-min S&P futures contract is equal to 0.25 of the index point or $12.50. The E-mini S&P futures contract can be very volatile and can move even more aggressively during times of extreme market volatility.
E-mini S&P futures contract are quarterly like all futures contracts. The monthly identifiers for the E-mini S&P futures contracts are H for March, M for June, U for September and Z for December. The E-mini S&P futures contract trade almost 24 hours per day. However, there is a 30 minute maintenance break in trading from 4:30 to 5:00 PM daily.
NetPicks E-Mini S&P Futures
In case you lose at the end of the day you are likely to pay in a big way. If you are a new E-mini trader you be careful as traders are expected to pay for the difference between the margins for the entry and exit points. The day trading margin is less than the margin to hold an overnight position in S&P 500 E-mini Futures contract. The margin requirements for E-minis are much less than the normal contract.
Like all futures contracts, S&P futures contracts including E-minis are settled daily. The values of all positions are marked to the market each day after the official close based on the settlement price. At the end of the trading day they are assigned a final value price. Cash will either come into your account or leave your account based on the change in the settlement price from day to day as long as your positions remain open. In other words, based on how well your positions fared in that day’s trading session, your account is then either debited or credited.
It is this mechanism that brings integrity to the marketplace. As losses are not allowed to accumulate without some response being required, this system gives futures trading a rock-solid reputation for creditworthiness.
Leverage:
Leverage can produce large profits in relation to the amount of your initial margin if you speculate in futures and the market moves in your favor. However, you also could lose your initial margin if the market moves against your position. The effect of price changes is magnified because futures markets are highly leveraged. You typically pay the price in full with stocks (without leverage) or on margin (50 percent leverage).
Suppose you buy one E-mini S&P 500 index futures contract when the index is trading at 1000 and you have decided to put $10,000 into your futures account. Your initial margin requirement for that one contract is $3,500.
You could realize a profit of $2,500 (50 points × $50) if the index increases 5 percent, to 1050 from 1000. Conversely, a 50-point decline would produce a $2,500 loss. Each one-point change in the index represents a $50 gain or loss because the value of the futures contract is $50 times the index. The $2,500 increase represents a 25% return on your initial investment of $10,000. It is a 71% return on your initial margin deposit of $3,500.
An increase or decrease of only 5 percent in the index could result in a substantial gain or loss in your account in either case. That’s the power of leverage. Similarly a decline would eat up 25% of your original $10,000. It is 71% of your initial margin.
Indeed, leverage is the key distinctive aspect of futures trading as compared with stock trading. It makes your money work harder and produces more in a shorter period of time when everything’s going your way, than if you paid for everything in full, up front. In such a situation leverage can be a beautiful thing.
Now suppose you buy an E-mini S&P 500 contract worth $50,000 by using $5,000 in your account. However, the contract’s value drops to $45,000 as the prices fall by 10 percent instead of going up. This is the dark side to leverage. Your $5,000 is completely gone. Leverage is the one ingredient that can produce either horror stories or happy endings. You’ll be obligated to put up even more money if the market keeps moving against you unless you get out of the position with an offsetting sale when your maintenance margin level is violated. It is extremely important that you fully understand the power of leverage and how to manage it well to get the happy ending.
NetPicks E-Mini S&P Futures
OU Forex Trader Re-Opens
OU Forex Trader went live again today at noon! Only 200 new traders will be allowed this time. Time is short, so I'll get right to the point...In case you haven't heard...Yes, the doors of what some traders are already calling the "perfect" trading service have opened again... but just for a short time.
Only 200 new traders will be allowed in, and then the doors will be "slammed shut" again.(And currently 120,000 traders are on the waiting list). Here's where to go at 12 noon Eastern time today:
OU Forex Trader
OU Forex Trader is led by "Forex Joe" Atkins, and his (proven) track record so far is absolutely startling.In fact, Forex Joe produced...
* 858 pips in March 2009, the kickoff month for the service (every trade made nice gains).
* A 7 for 7 no-loss streak in June 2009, for another 718 pips.
If you recall, Forex Joe used his sports betting background to'crack the code' of the Forex market, exploiting a certain flaw for frequent gains...And It's Obviously Working!Trading results like the ones mentioned above have already caused a flood of happy subscriber testimonials like these:
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"I'm proud to say in my practice account I've done 214 trades with 1,900 positive pips! I keep pushing the button.
Thanks for all your coaching and sharing your vast knowledge with us. Your team is doing a great job and meeting all challenges in a timely manner."
Richard B.
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"I have been more than happy with the service that Forex Joe provides from the basic education, principles, the physiology of trading, and money management.
Beyond this service, the membership site is constantly being improved and the forum and the membership site has a wealth of training material at your finger tips which you can review to refresh the lesson on the webinars.
My trading is improving everyday as I absorb the training from the webinars. The interaction during the question time and the exchange of information is second to none I have experienced before."
Lionel Watson
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And this one just in:
"I've just joined 1 week ago and I am blown away by all this!
I have been trading FX for about 6 months now and I am finding this so very helpful that I am up 85 pips on the GBP/USD so far this week and am as we speak in the trade that is in the PManager and looking good so far.
With proper money management and a clear outlook, I am excited for what the future holds for the few people that continue to learn new strategies.
Thanks Joe - this is great."
Andrew Finlayson
Broken Hill
Australia
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Joe I had to send you a note to simply say I have the utmost respect for your mastery of the Forex markets. I have been trading your Alerts and in July all your Potential trades and I am totally blown away by your pinpoint accuracy.
I would love to see how you figured all this out. WOW Keep up the great work. I am digging in to learn all this.
God Bless
Bill Tainter
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And the best part is...
OU Forex Trader Is A "Done For You", Real-Time Service! All trades can be sent directly to your computer desktop or even as a SMS text message on your mobile phone or other device. Almost all you have to do is "push the button" (as Forex Joe says often) and make your trades. So I'd advise you to get ready for your chance to be part of something truly special... And have your Internet browser parked right here at noon Eastern today:
OU Forex Trader
Forex Joe's proven track record is almost uncanny. But I guess it should not be surprising, since Forex Joe seems to have 'cracked the code' to the Forex market. Skeptical? I was too, until I witnessed his trading results myself. Remember, when the doors of OU Forex Trader open at noon today, only 200 traders will be allowed in. And this email just went out to over 120,000 other traders. Don't miss this unique chance to get on the "Gravy Train" known as the Forex! Here's where to be at 12 noon Eastern:
OU Forex Trader
Bret Fogle
President
OU Forex Trader
Thursday, July 23, 2009
Ivy Bot Video
Ivy Bot is about to be released in the next few days. You must have guessed by its name. This forex robot has been designed by graduates of the Ivy League Universities. They claim that it is a very sophisticated automated forex trading system built through extensive research, testing and development. 5 more days until the Forex Markets change forever...5 Days until the most anticipated Forex Robot goes live Introducing the most Profitable Forex Robot to date The only Forex Robot you will ever use again. The Forex Robot that will dominate the market.
Ivy Bot Video
The Forex marketplace has exploded and record profits are being made to those with the right tools. Do yourself a favor and pay very close attention, because I am about to introduce the most powerful Forex Trading System that has ever been created. I’ve been trading Forex for quite some time now and trust me when I say… “I was blown away by what I saw.” I have met a group of guys who have made millions of dollars while the world markets were crashing. I saw something that I never thought I would have ever seen before. It’s absolutely incredible. Here is a short video introducing them and their creation:
Ivy Bot Video
Probabily like most of the traders out there, you must be sick of looking for a way to generate massive and consistent profits with Forex, wasting countless amount of time (and money..) with useless systems or robots not sophisticated enough to return high profits with little risk on REAL live accounts. But stress no more, because I can promise you that Ivy Bot is going to be the very last Forex EA you ever need to try. I am well aware of how many times you might have been let down before and that's why I want you to check this "super-robot" in action with your own eyes in just the next five days.
Ivy Bot Video
This automatic Forex Trading Robot outperforms anything else out in the market by a long shot. It was built by a group of Ivy League friends who made a killing in the market over the past 10 years. Their strategy has been a secret for years, but due to their tremendous success they have agreed to release it to the public. ...and they have the proof to back it up. Make sure you scroll down below the video and take a look for yourself at the shocking amount of profit and an official beta testers PDF Report:
Ivy Bot Video
After a lot of effort, hundreds of emails, and some inside connections, I got my hands on a copy of this amazing new Forex Robot for Beta testing. Let me tell you, it was not easy. I decided to test it myself, to see if what I had heard, was true. Well after months of testing, I finally concluded that nothing comes close to this. 54 winning trades in a row! I could not believe it, everything these guys had told me came true! There are a few very good forex robots in the market now. There is no harm in testing them on your demo account first. Always remember, each robot has been optimized in a different way and hence is different from other robots. Success in forex trading or for that matter trading in general depends on developing two or more independent trading systems that have a consistent winning record.
Ivy Bot Video
You must develop a system that uses two three sub systems. There is nothing wrong in using two or more robots in your system. Trading with these robots is automated so you are only going to set the system once. But as I have said before, first test it on your demo account. Take care of everything on your demo account testing before you incorporate it in your live system. In my opinion, Ivy Bot will be unique. I am myself an Ivy League student and I believe in some of the most intelligent minds in the world graduate from those universities. So in the case of Ivy Bot, their true genius is revealed in how they design their Forex systems. Rather than one system for all markets, they have a separate Forex Trading Robot for each Currency pair! The group currently runs four separate systems on four separate pairs, something unseen in any other Forex Trading system on the market. It makes sense doesn’t it? Rather than one system running on four pairs, have four systems running on four pairs!
Ivy Bot Video
Also these guys are smart enough to realize that even their superior trading system will sometime need tweaks to maximize its performance as the markets change. Rumor has it that they are going to give their members access to a life-time of updates. This means you will never find yourself again with an outdated system that doesn't work! To be honest, it’s no wonder people are so excited. This is a Forex Robot that has been kept secret for years now. It has accumulated loads of money, and has been used by some of the largest and most profitable trading firms in the world. Luckily for you and some other fortunate people, it is being released to the public for a limited time only.
Ivy Bot Video
In just 5 days from now at 9:00 AM EST IVYBOT goes Live. I don't know how many copies they are going to sell or how long this deal will be available, but I certainly would not wait around to find out.Again you can find out more info here: Make sure you get on the waiting list for this one. From what I have heard they will be doing a series of live webinars with the creators discussing the functionality, performance, etc. Below the video you can enter your name and email...once again the link is:
Ivy Bot Video
This is what the Fapturbo team says about the Ivy Bot: "Some graduates from Ivy league colleges seem to have worked behind closed curtains on a new forex robot.. now we didnt want you to believe all the hype just yet as we consider yourself smarter and alot wiser than the average forex newbie after so many forex robots have hit the market in such a short time trying to mimic fapturbo and the recent fapturbo evolution successes." Your guess is right. Competition between these two robots is on and let's see who emerges the winner!
Global Stock Rally Dominates USD Trading
Witnessing a steady decline during yesterday's trading sessions, the USD became weakened as traders unwound their Dollar buy positions in exchange for riskier assets, such as stocks. The global stock market rally seen yesterday may have been one of the leading causes of the Dollar's depreciation. With recent market optimism, traders may continue to see a small downward trend in the U.S. Dollar, as its positions are unwound in exchange for higher yielding assets.
USD - Dollar Outlook Remains Weak
The USD continued its decline against the EUR, as well as other risk sensitive currencies on Wednesday. However, the overall direction of the market was subdued due to unsteady equity markets. While the Dollar sentiment is bearish, the EUR seems unable to really take off. On Wednesday, the Dollar index was at 78.745, down from 78.920 on Tuesday
Strong performances from the stock markets continue to put downward pressure on the Dollar, as investors move to riskier higher yielding assets. Furthermore, the Dollar outlook suffers from concerns over U.S monetary policy. With growing uncertainty about the framework of the monetary and fiscal policies, particularly in light of the proposed health care reform, the outlook on the Dollar looks very weak despite the Fed's and Treasury's assurances.
Looking ahead to today, several important news releases are expected from the U.S, including the Unemployment Claims at 12:30 GMT and the Existing Home Sales at 14:00 GMT. These indicators are very important since they are leading indicators of economic health and tend to create great market volatility.
EUR - EUR Rises on Weaker Dollar
The EUR experienced a moderate rise against the Dollar and Yen yesterday. Late Wednesday, the EUR was at $1.4211 from $1.4197 late Tuesday and at ¥132.96 from ¥133.01. The Pound depreciated 0.3% to 153.92 Yen, and traded at 86.41 pence versus the EUR. The British Pound also appreciated slightly versus the Dollar, trading at $1.6463 from $1.6436.
The Pound's drop against the EUR came after the National Institute of Economic and Social Research stated that home values will resume their decline. The institute also predicted Gross Domestic Product (GDP) will shrink by 0.4% in the second quarter, slightly worse the 0.3% expected by economists. Also putting downward pressure on the Pound were losses in equities throughout the trading day.
While no major news releases are expected from the Euro-Zone today, traders should follow the release of British Retail Sales that is due at 8:30 GMT. As this is a leading indicator of economic activity, it is likely to cause great volatility for the GBP pairs.
Yen - Yen Benefits from Stock Market Losses
The Yen gained for a fourth day against the Dollar, and for a second day against the EUR yesterday following a larger than expected second-quarter loss by Morgan Stanley, as well as a statement by Wells Fargo & Co. stating that bad loans jumped. The Yen traded at 132.87 per EUR from 133.18 and at 93.56 versus the Dollar from 93.68 yesterday.
With reports from CIT Group Inc. and American Express Co., risk aversion today will likely stay prominent as the expectation is for weak earnings announcements. As the Yen is highly sensitive to moves in the equity markets, any negative earnings reports will revive risk aversion among investors and push them toward the safety of the Japanese currency. The Yen may also rise today ahead of the U.S Unemployment Claims report which is expected to show an increase in claims.
Crude Oil - Oil Prices Slide on Disappointing Inventories Report
Crude Oil for September delivery settled down 21 cents, or 0.3%, at $65.40 a barrel Wednesday, snapping a five-day rally following the release of slightly worse than expected U.S Oil inventories. However, losses were limited due to a weak Dollar and equity gains.
With inventories remaining high and OPEC members not sticking to quotas, there is still too much supply and not enough demand. While rising equity markets and a weak Dollar continue to push Oil prices up, the fundamentals are still weak and do not supports another rally to the $70 price level. Furthermore, any negative news from the stock market, or signs of a faltering economic recovery might send Oil back to the $60 level.
Article Source - Global Stock Rally Dominates USD Trading
British Pound to Look Past Retail Sales, Home Loans Data to Trade on Risk Appetite (Euro Open)
The British Pound is likely to look past an upswing in Retail Sales and a continued rebound in Home Loans data to fall in with trends in risk appetite as another round of key earnings reports crosses the wires in European hours. Japan’s trade surplus expanded for the third month in June as imports continued to tumble.
Key Overnight Developments
• Japanese Trade Surplus Grows as Imports Continue to Tumble
• Euro, British Pound Little Changed Despite Overnight Stock Gains
Critical Levels
The Euro tested below 1.42 and rebounded as high as 1.4243 but stands little changed ahead of the opening bell in Europe. The British Pound followed a similar dynamic, oscillating around the 1.6470 level.
Asia Session Highlights
Japan’s Merchandise Trade Balance surplus expanded for the third consecutive month, rising to 508 billion yen in June from 298.2 billion in May. We argued the likelihood of such an outcome in our Japanese Yen weekly forecast, noting that the abysmal job market will surely continue to weigh on imports. Indeed, inbound shipments tumbled -41.9% from a year before while exports shed -35.7%. More of the same is likely in the months ahead as unemployment continues to push higher: a survey of economists conducted by Bloomberg suggests the jobless rate surpassed 5% in the second quarter and will approach the 6% mark by the second half of 2010 while minutes from the last meeting of the Bank of Japan revealed policymakers expect consumption to remain weak as “the employment and income situation [is] likely to become increasingly severe”.
Euro Session: What to Expect
UK Retail Sales are set to swing back into positive territory in June, growing at an annualized rate of 2.1% after shrinking -1.6% in the year to May, the most in 17 years. A rebound in retail spending seems to bolster expectations from NIESR, a closely watched London-based think thank, that forecast the economy probably shrank just -0.4% in the second quarter, the smallest drop in a year. NIESR has argued that “the U.K. economy is now stagnating rather than continuing to contract at a sharp pace.” Notably, the apparent signs of stabilization may not translate into meaningful gains for the British Pound. Retail sales figures have exhibited extraordinary volatility since the beginning of this year: annualized receipts grew 2.6% in January, dropped -1.5% in February, then gained 0.9% and 2.7% in the following two months before plunging again in May. This suggests traders will be wary of taking even a sharp improvement at face value, waiting for a discernable trend to be established. Cues from the labor market seem to point to subdued retail activity for the time being, with the jobless rate to approach 9% by the end of next year for the first time since 1994, trimming disposable incomes and weighing on spending.
Separately, BBA Loans for House Purchases will probably continue to rebound in June, extending a move higher that began after the metric set a record low in November 2008. The metric closely tracks the GfK measure of consumer confidence; indeed, indeed, 24-month rolling studies show the two are 96.6% correlated. Consumer confidence rose to a 14-month high in June, suggesting the BBA report will follow.
On balance, risk trends are likely to remain as the primary driver of forex price action. A number of notable earnings releases are on tap in European hours: ABB Ltd, the world’s largest maker of electricity grids, and Cie. de Saint-Gobain SA, Europe’s top supplier of construction materials, are set to report that profits fell by a staggering 42% and 83% respectively in the second quarter. Credit Suisse, Switzerland’s largest bank by market value, may help support shares in the Financials sector with expectations calling for the second consecutive quarter of profits driven by trading revenue.
Written by Ilya Spivak, Currency Analyst
Article Source - British Pound to Look Past Retail Sales, Home Loans Data to Trade on Risk Appetite (Euro Open)
EUR/USD Strategies on July 23, 2009
12:24 PM (GMT+7)
Enough for the rest. Time for fight again. Forex often make me feel tired and depressed and that was the time I have to stop for a while, but it is the way I have choosed andI will stay here because I love it. And here we go, I turn my computer and ready to make entry ( and i already did it).
EUR/USD - Time Frame 30 minutes
As you see EMA 5(blue), 20 (green) and 66 (red) already steady make bullish pattern, small barrier already formed by Parabolic SAR in 1.4224 -14218, and RSI steady above 50. Support already seen at 1.4194, next would be 1.4155 (previous day's low) Meanwhile upper side, I concern about 1.4258 ( previous day's hi) where at that point possibility price will more volatile. Nearest strong resistant seen at 1.4280 and if break I believe will trigger price move to 1.4310 and strong resistant that might hold bullish movement see at 1.4338. I already have one short ( sell) on EUR/USD and I've got at 1.4244, I set my Stop Lost at 1.4194 and my target at 1.4304. There is a fiew fundamental news on London session, I will ceck it and may be I will a change. Now I have to go, there is something I have do on the ground, I mean, outside world :lol:
I hope I could get back at london session, but now I trust my open to my Stop Lost and my Target Profit. Time's up... out of here
Update 21:34 PM (GMT +7)
It's so hard to follow EUR/USD movement recent days. I got my SL hit again, loss 50 pips. Ok, I have to start counting and getting start to trade with tight margin next days.I'm done, time to sleep. This is bad week. I need to rest for fiew days. I'll come back on monday
GBP/USD rises further to 1.6487, intra-day high
Wednesday, July 22, 2009
Greenback Rebounds from 6-Week Low
The U.S Dollar rose against most other major currencies Tuesday, as comments by Ben Bernanke eased concerns that policy-makers won't act decisively to head off inflation spawned by efforts to counter the credit crisis. The Federal Reserve Board chairman's testimony was favorable for the USD, as his assessment on the U.S. economy revived the greenback's safe-haven appeal.
USD - Dollar Rises on Increased Risk Aversion
The U.S. Dollar rebounded while U.S. stocks retreated yesterday after initial gains were overshadowed by cautious outlooks on the economy from corporate executives and Federal Reserve Board Chairman Ben Bernanke. As a result, the USD finished yesterday trading session 100 pips higher against the GBP at the1.6410 level. The greenback also saw bullishness against the EUR and closed at 1.4175.
U.S. government debt prices rose sharply on Bernanke's comments that an easy money policy would likely be needed for an extended period. Moreover, risk appetite had increased in the past few days after stronger-than-expected U.S. corporate earnings. The latest to report higher-than-expected quarterly results was manufacturer and Dow component Caterpillar Inc. yesterday.
Looking ahead to today, the most important economic indicator scheduled to be released from the U.S. is the Crude Oil Inventories report at 14:30 GMT. Traders will be paying close attention to today's announcement as it has the potential to boost the USD in the short-term. Traders are also advised to follow Federal Reserve Board Chairman Ben Bernanke's testimony at around 14:00 GMT. This testimony is very important as it is very likely to impact the Dollar's volatility. Traders are advised to watch closely, as this is likely to set the pace of the USD going into the rest of the week's trading.
EUR - EUR and GBP Erase Gaines on all Fronts
The EUR weakened against most of its major currency rivals yesterday on concerns CIT Group Inc. may file for bankruptcy, renewing demand for a refuge. By yesterday's close, the EUR fell against the JPY, pushing the oft-traded currency pair to 133.17. The EUR experienced similar behavior against the CHF and closed at 1.5160.
The British Pound also fell against the U.S Dollar as a report showed the U.K budget deficit climbed in June to the highest per month since records began in 1993, fueling concern the government will struggle to find buyers for its assets. The drop pushed the GBP down from near the highest level this month against the Dollar. The budget shortfall rose to 13 billion Pounds from 7.5 billion a year earlier. Gilts reversed earlier declines after Federal Reserve Board Chairman Ben S. Bernanke told Congress that policy makers will keep Interest Rates “exceptionally low.”
Today, there is plenty of economic news coming from the Euro-Zone that will determine the GBP and EUR levels by the end of today's trading. From the Euro-Zone, there are the European Industrial New Orders, and French Consumer Spending figures. From Britain, the most important news will be the MPC Meeting Minutes and CBI Industrial Order Expectations figures. All these news events will be important in helping set the strength of the GBP and EUR in this week's trading.
JPY - Yen Strengthens on Bernanke Testimony
Japan's currency rose against most of its major counterparts after Bernanke mentioned that at some point the Fed “will need to tighten monetary policy” to counter the emergence of an inflationary problem. The Yen also advanced from near a 2 week low against the U.S dollar on speculation Japanese exporters bought the currency after its 1.8% decline last week.
Traders today have very little fundamental news emanating from Japan as the only indicator being released is the trade balance report. Analysts forecast the figure to increase from its previous reading. This indicator typically generates small amounts of volatility. However, the USD and the GBP appear to be clutching the reins of today's market. Traders would be wise to note its future direction as it usually carries a heavy impact on the other currencies.
Crude Oil - Oil Stabilizes after Steady Appreciation
Crude Oil slid down slightly, to just above $65 a barrel, on Wednesday, after data showing an unexpected rise in U.S. crude stocks underscored worries about persistently weak demand from the world's top oil user. The U.S. crude oil stockpiles rose unexpectedly last week as domestic refining activity slumped, the American Petroleum Institute (API) said on Tuesday. However, firm equity markets and a weak Dollar could lend some support to Oil, analysts say.
Crude prices climbed 8.7% for the past week as investors bought futures on expectations of higher fuel demand. Optimism that the worst of the global recession is over followed gains in U.S. leading economic indicators and as financial service companies said earnings climbed.
Article Source - Greenback Rebounds from 6-Week Low
British Pound to Look Past Bank of England Minutes, Trade on Risk Sentiment (Euro Open)
The British Pound is likely to look past minutes from the July meeting of the Bank of England with traders unlikely to be treated to anything that has not already been priced into the exchange rate, leaving the currency to continue taking cues from risk sentiment. Germany’s IFO survey of business sentiment is also on tap.
Key Overnight Developments
• Australian Inflation Falls to the Lowest in a Decade
• Euro, British Pound Turn Lower in Asian Trading
Critical Levels
The Euro traded lower in the overnight session, losing as much as -0.4% against the US Dollar. The British Pound followed suit, testing as low as 1.6391 against the greenback.
Asia Session Highlights
Australia’s Consumer Price Index printed in line with expectations with the annual pace of inflation falling to 1.5% in the second quarter, the lowest in a decade. Continued downward pressure on consumer prices looks likely as tumbling wholesale costs filter into the final price of products. Australian Treasurer Wayne Swan said “inflation is expected to remain subdued over the near term as the effects of the global recession continue to impact on the domestic economy.” This bolsters the case for additional rate cuts from the Reserve Bank of Australia in the months ahead. Indeed, RBA Governor Glenn Stevens said as much even as the bank kept rates unchanged in July, noting that “the outlook for inflation allows some scope for further easing of monetary policy.”
Euro Session: What to Expect
Germany’s IFO Survey of business sentiment is expected to rise for the seventh consecutive month in July, pointing to continued improvement in firms’ 6-month economic outlook. Still, the reading is expected at 90.1, a print below the 100 “boom-bust” threshold, suggesting conditions are still deteriorating albeit at a slower pace. Some recovery is to be expected as the government’s 82 billion euro fiscal boost filters into the broad economy, but the big question in Germany as well as most anywhere at this stage is whether growth is sustainable after stimulus cash dries up. As it stands, the latest economic forecast from the International Monetary Fund (IMF) reveals that the Euro Zone will stand apart from other industrialized economies in seeing economic growth continue to contract in 2010, pointing to a comparatively slower return to higher interest rates that will keep the Euro on the defensive against most major currencies.
Minutes from the July meeting of the Bank of England are unlikely to prove particularly market-moving this time around, with traders unlikely to be treated to anything that has not already been priced into the exchange rate. The bank made no changes to benchmark interest rates or the quantitative easing program, saying they will “review the scale” of their unconventional easing measures in August as they release their quarterly inflation report. From here, next week’s GDP report is likely to be the key to the market’s expectations on the future direction of monetary policy. Initial cues are favorable: London-based think tank NIESR has reported the economy probably shrank just -0.4% in the second quarter, the slowest pace of decline in a year. Still, the British Chamber of Commerce has urged policymakers to expand their asset-buying scheme by 25 billion pounds, saying a recovery is “not guaranteed”, a sentiment that has been echoed by the Shadow Monetary Policy Committee (a group of independent economists that meet at the London-based Institute of Economic Affairs). On balance, British Pound price action is likely to continue taking its cues from risk appetite, with the sterling’s trade-weighted average value now 87.8% correlated with the MSCI World Stock Index.
Written by Ilya Spivak, Currency Analyst
Article Source - British Pound to Look Past Bank of England Minutes, Trade on Risk Sentiment (Euro Open)
Tuesday, July 21, 2009
CIT Bailout Adds to Risk Appetite, Safe-Havens in Decline
Yesterday's rally on Wall Street, which led to a devaluation of the major safe-haven currencies such as the USD, was led by a decision from CIT, a large financial firm, in favor of a $3 billion bankruptcy protection bailout. The resultant boost in confidence led stock markets into a strong rally, followed by a declaration from the Bank of Japan (BOJ) that their economy may no longer be getting worse. All of this optimism has helped to increase risk appetite and lower the appeal of safe-haven investments.
USD - Dollar Tumbles as Stock Markets Rally
The Dollar tumbled to its lowest level in over a month vs. the EUR, as Wall Street rallied on Monday. The rally was initiated by U.S. commercial finance company CIT board approving a $3 billion rescue package. The USD's subsequent devaluation and Wall Street's gains yesterday were also owed to increased risk appetite, as traders were taking into account continued optimism from the 2nd quarter, following last week's optimistic results from U.S. banks. Adding to optimism for the U.S. economy, U.S. housing data released yesterday points to stabilization of the U.S. housing sector.
The Dollar Index touched 78.799 on Monday, the lowest level since the 3rd of June. The USD tumbled against the JPY by over 70 pips to 93.92, as traders ditched the greenback for higher yielding assets. The GBP/USD jumped by 120 pips to 1.6518, as the GBP acted positively to the optimism in the banking sector. The EUR/USD closed nearly 60 pips higher at 1.4214, as the USD's safe-haven status is dissipating as signs of global economic recovery are in the making. It seems that as long as global equities rally, the USD will continue to slide vs. the major currencies.
Looking ahead to today, there are some crucial releases that are set to come out of both the U.S. and Canada. Canada is set to publish both the BOC (Bank of Canada) Rate Statement and Overnight Rate at 13:00 GMT. The results of these are set to determine the USD/CAD rate in the coming week. At 14:00 GMT, U.S. Federal Reserve Chairman Ben Bernanke will testify before the Financial Services Committee in Washington, DC. This is significant for future U.S. monetary policy. Surrounding this event, the forex market is likely to experience heavy volatility.
EUR - EUR Hits 6-Week High against USD
The EUR hit a 6-week high against the USD yesterday, as U.S. and global equities rallied. This was owed to optimistic U.S. and European data in the past week. Also, the U.S. largely led the rally, as U.S. financial firm CIT's bondholders agreed to $3 billion of emergency financing to prevent bankruptcy. The GBP also hit a 3-week high against the USD due to global banking industry expectations. The 2 things that helped the Pound gain yesterday was risk, as traders felt comfortable in diversifying their investments due to renewed optimism.
The EUR/USD cross hit as high as the 1.4250 level on Monday, before closing at 1.4210. This bullish pattern of the pair is much owed to the USD's safe-haven status declining as the global economic recovery kicks in. The GBP/USD closed at 1.6518, while the EUR/GBP cross finished lower by 30 pips at 0.8603. Much of the GBP's bullishness recently has been owed to rising energy prices and the recovery of the banking sector, as the British economy is very dependent on these 2 industries.
Today, we can expect economic news releases from both Europe and Britain. Switzerland is set to release her trade balance figures at 06:15 GMT. A high figure will be good for the CHF, as this would show a higher surplus of exported goods during the previous month. Britain is set to release public sector net borrowing figures at 08:30 GMT. A lower than forecasted 15.7 billion Pounds may help the GBP today, further adding to recent optimism in the British currency.
JPY - JPY Climbs on CIT Rescue Plan
The JPY climbed against a number of its currency pairs yesterday, as a result of the rescue plan by the shareholders of U.S. finance company CIT. This automatically helped spread the rise in equities from the U.S. to Japan. As a result, the JPY climbed against its major currency pairs. The JPY climbed against the USD by 70 pips to 93.92, as investors put their money in higher yielding assets. The Japanese currency also made gains vs. the EUR, to close 64 pips higher at 133.34.
The strength of the Japanese currency may be owed to the fact that the Japanese economy has bottomed out. Therefore, forex traders are willing to put more of their money in the Japanese currency, as the global economic situation improves. Additionally, as this occurs, investors are beginning to pour their money back into Japan. The result will therefore lead to a stronger Japanese currency for the foreseeable future. We may see the USD/JPY drop below 93.50 in today's trading.
Crude Oil - Crude Oil Hits a 2-Week High
The price of Crude Oil hit a 2-week high of $65.86 yesterday, before closing at about $65.30. Crude prices rose on Monday for a number of reasons. There was much optimism coming out of the U.S., spurred by the CIT rescue plan. In turn, the equity rally in America led traders to diversify their investments. Thus the USD declined, which helped boost the price of Crude Oil. The gains in commodities extended throughout the day.
There are some investors now that are talking of a price correction in Oil. However, if there is enough optimism to support the price of Crude, there is no reason that prices won't rise to over $66 per barrel of Crude in today's trading. This could come sooner rather than late, providing that the U.S. Dollar continues to plummet. In addition, optimism from U.S. Federal Reserve Chairman Ben Bernanke's speech may add to possible gains to Crude prices later in the day.
Article Source - CIT Bailout Adds to Risk Appetite, Safe-Havens in Decline
