Month: September 2009

By Adam Hewison – You may have watched my earlier video on the gold cycles and how important they are in this particular market, at this particular time. Today’s action is indicative of the cycle that we were talking about in the video as it’s pushing gold prices down into a cyclic time window.

I wanted to follow up with this new short video to show you where I believe there should be some good levels to get into a long gold position. The energy fields we’ve discussed before in gold and other markets are still very much intact and are getting wound up for the big move we’ll see later this year.

There is no need to register to watch this video and you can watch it with our compliments.

Watch the New Video Here…

If you enjoy this follow-up, share it with your friends. I am sure they will find our point of view both different and at the same time educational. Please feel free to comment on the blog about your view on gold.

All the best,

Adam Hewison
President of INO.com
Co-creator of MarketClub.com

A Lesson in Drawing and Using Trendlines

The following article is adapted from a brand-new 50-page ebook from Elliott Wave International. Learn more about The Ultimate Technical Analysis Handbook, and download your free copy here.

By Jeffrey Kennedy

When I began my career as an analyst, I was lucky enough to have some time with a few old pros.

One in particular that I will always remember told me that a kid with a ruler could make a million dollars in the markets. He was talking about trendlines. I was sold.

I spent nearly three years drawing trendlines and all sorts of geometric shapes on price charts. And you know, that grizzled old trader was only half right.

Trendlines are one the most simple and dynamic tools an analyst can employ… but I have yet to make my million dollars, so he was wrong — or at least early — on that point.

Despite being extremely useful, trendlines are often overlooked. I guess it’s just human nature to discard the simple in favor of the complicated.

(Heaven knows, if they don’t understand it, it must work, right?)

In the chart above, I have drawn a trendline using two lows that occurred in early August and September of 2003.

As you can see, each time prices approached this line, they reversed course and advanced.

Sometimes, soybeans only fell to near this line before turning up.

Other times, prices broke through momentarily before resuming the larger uptrend.

What still amazes me is that two seemingly insignificant lows in 2002 pointed the direction of soybeans — and identified several potential buying opportunities — for the next six months!

Get more lessons like the one above in the free 50-page Ultimate Technical Analysis Handbook. Learn more and download your free copy here.

Jeffrey Kennedy is the Chief Commodity Analyst at Elliott Wave International (EWI). With more than 15 years of experience as a technical analyst, he writes and edits Futures Junctures, EWI’s premier commodity forecasting service.

By Adam Hewison – The dollar will hit a major low in Q4 of 2011. Watch this short video and see how I came up with this bold forecast.

The move is already underway and the lows are in place, however, it is not too late to get into this market and take advantage of what we believe will be a major move to the upside for the euro.

There is no need to register to watch this video and you can watch it with our compliments.

If you enjoy the video, which I am sure you will find eye-opening, please feel free to comment on the blog about your particular feelings regarding the US dollar.

Watch the New Video Here….

All the best,

Adam Hewison
President of INO.com
Co-creator of MarketClub.com

Source: ForexYard

The Dollar snaps a two week decline versus the EUR after disappointing U.S Home Sales data and ahead of the G20 meeting. The USD and JPY are benefiting from the recent surge in risk aversion ahead of the G20 meeting and a concern that the group’s leaders will pose stricter regulations on financial markets. The drop in Oil prices, which began Wednesday, only exacerbated yesterday as equity markets tumbled and the Dollar strengthened, putting pressure on the commodities market.

Economic News

USD – Dollar Rebounds on Return to Risk Aversion

The Dollar came roaring back yesterday against its rivals as poor housing data and falling equity markets sapped traders appetite for risk. Existing home sales numbers were released to an unspectacular reception with the numbers failing to reach their expected targets. Only 5.10M existing homes were sold as compared with economists forecasts of 5.36M. This sent traders running from higher-yielding currencies and into long Dollar positions.

Yesterday’s trading was notably volatile, with the EUR/USD climbing in early European trading hours to a daily high of 1.4789, only to end the day at 1.4650 from 1.4721. Driving the early appreciation for the EUR was a lower number of U.S. Unemployment Claims. These gains were later eroded after less than spectacular housing data was released. Against the Yen the Dollar was down as traders looked for the less risky currency. The pair closed at 90.82 from 91.30.

Looking ahead to today’s trading, we can expect further volatility of the Dollar. The Group of Twenty (G20) meets for a second day today. Comments made by the global heads of finance can move the market fast so traders should be aware of their impact. U.S. New Home Sales data is due at 2:00pm GMT time. If the New Home Sales is anything like the Existing Homes Sales data from yesterday, the EUR/USD could continue its decline for the second day in a row to finish the week near the 1.4550 mark.

EUR – Pound Crumbles on Currency Comments

The Pound took a thrashing during yesterday’s trading as comments by the Bank of England sank the British currency. A report surfaced that Bank of England (BOE) Governor Mervyn King stated a weaker Pound could be beneficial to the U.K. economic recovery. It is assumed the BOE prefers a weak Pound. The weaker currency could help boost British exports, making them relatively cheaper than their foreign counterparts.

Traders immediately began bidding the Pound lower, sinking the GBP/USD to 1.5947 from 1.6353, for a single day decline of 2.5%. The EUR also rose 2% on the Pound as the EUR/GBP ended at 0.9816 from 0.9004, and the GBP/AUD fell to 1.8467 from 1.8803.

If the BOE does prefer the Pound to depreciate, this could create an opportunity for those traders who feel the British currency is not properly valued. Perhaps the BOE sees the possibility for further weakening of the Pound. Will the bank take future action to help artificially deflate the nation’s currency?

JPY – Yen Rises on Negative U.S. News

As the rally of riskier currencies puts on the breaks, demand for the Yen is increasing. Yesterday’s news of lower U.S. housing data helped slow the rally for riskier assets, thereby boosting the Yen. This trend continues to go unabated, with the USD/JPY rising alongside riskier assets, and falling when risk sentiment diminishes. This was the case yesterday as the USD/JPY fell to 90.82 from 91.30

Traders should be watching today’s data releases from the U.S. for today’s direction of the Yen. If the negative news will continue further into the day, we could have another pullback of some of the higher yielding currencies. If so the USD/JPY could be looking to drop below the 90.00 support line.

Crude Oil – Economic Data Lowers Demand for Crude

The price of Crude Oil was significantly lower yesterday as poor U.S. housing data and a strong Dollar weighed on the commodities market. Traders took the information as a pullback to economic growth and a sustained economic recovery, thereby reducing demand for the commodity. Oil fell below a significant support line of $66 and finished the day down at $65.85 from $68.36.

Yesterday’s 3.6% drop in price was the second day in a row for a pullback in Crude prices. The valuation seems to be taking hints from reported economic data. If this is the case, traders will be wise to follow today’s U.S. Core Durable Goods Orders and New Home Sales numbers. We could see Crude Oil trading at $65 by the end of today.

Technical News

EUR/USD

The daily chart is showing mixed signals with its RSI fluctuating at the neutral territory. However, the 4-hour Chart’s RSI is already floating in the oversold territory indicating that a bullish correction might take place in the nearest future. When the upwards breach occurs, going long with tight stops appears to be preferable strategy.

GBP/USD

It appears that after yesterday’s sharp downward movement, several signals point to a correction today. The 4-hour Slow Stochastic shows a fresh bullish cross, as does the daily MACD; with the price hovering in the over-sold territory on the 2-hour, 4-hour, and daily RSI.

USD/JPY

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

USD/CHF

It appears as if a fresh bearish cross has formed on the hourly MACD. A bearish cross is also impending on the 4-hour Slow Stochastic, with the RSI hovering near the overbought territory.

The Wild Card – USD/SEK

It appears as if a fresh bearish cross has formed on the hourly MACD, suggesting to forex traders that an opportunity is approaching. The RSI on the 2-hour and 4-hour charts are sitting in an overbought territory. Combined with a fresh bearish cross on the 4-hour Slow Stochastic, it is evident that a downward movement is impending. Going short on this pair today may be advised.

Forex Market Analysis provided by Forex Yard.

© 2006 by FxYard Ltd

Disclaimer: Trading Foreign Exchange carries a high level of risk and may not be suitable for all investors. There is a possibility that you could sustain a loss of all of your investment and therefore you should not invest money that you cannot afford to lose. You should be aware of all the risks associated with Foreign Exchange trading.

Market Movers of the Day

Asia-Pacific

Australian HIA New Home Sales rise 11.4% MoM

Japanese All industry Activity index rise 0.5% less than expected

Europe

German IFO Business Climate at 91.3 versus 92.1 expected

German IFO expectations at 95.7 higher than expected

Americas

US Initial Jobless claims at 530K better than the 546K expected

US continuing Jobless claims at 6138K

US Existing Home Sales fall -2.7% MoM the first time since March

G-20 Talks

The Overall Sentiment

Sentiment was strongly negative with investors worries over a recovery in the US and worldwide pulling stocks into red territory. In the Tokyo session Japanese all industry activity index disappointed with a 0.5% rise. However it was risk aversion and profit taking that set the tone with equities coming under strong selling pressure and the Yen on the gaining strength against its’ peers. In the London session equities continued to move south with German IFO business climate surprising for the worst with a reading 91.3 and in strong reaction to fears economic growth will surprise for the down side. In the FX arena it was the sterling which drew most attention with comment from BoE governor Marvin King outlining he is comfortable with a weaker pound as it is positive for the countries’ exports. FX players punished the sterling in response to the news with a strong selloff pushing the currency to as low as 1.6$ against the dollar and closer to 0.92 against the Euro. As the New York session was opened investors attention shifted to initial jobless claims and Existing home sales. While initial Jobless claims surprised slightly for the better it was the Existing Homs sales figure which disappointed, falling the first time since March with a fall of -2.7% MoM. The combination of the Fed’s statement a day before that it will gradually reduce purchases of mortgage debt and the weak home sales squeezed stock prices and push US equities to a negative close with S&P falling -0.95% and the Dow lower by -0.42%.The Dollar after several negative sessions edged higher for the second day trading close to 1.46 against the Euro and close to 1.1 versus the Canadian Lonnie in a typical risk aversion play. Commodities moved to cheaper levels in tandem to a stronger dollar with Gold under 1000$ settling around 990$ and Oil trading under 65$.

The Day Ahead

In the Tokyo session sentiment could be affected by the publication of the BoJ minuets, stating the central bank is content with the credit status of Japanese corporations while tight credit conditions for small businesses which posse a substantial portion of the country’s economy remain a concern .Negative sentiment coming from the US data published a day before might also weigh on sentiment with investors potentially moving to safe haven securities. In the London session concerns over US growth is also expected to weigh with investors eyes carried once against on data coming from the US. Moving to the New York session which is again at the spotlight with the highly important durable goods data, Consumer sentiment and new home sales which will shed more light on consumption and will paint more of a complete picture of US real estate with the new home sales coming a day after the negative existing home sales which loomed a day before. Overall sentiment will be exceptionally sensitive to the data coming from the US with stocks possibly advancing prior to the data rebounding from the sharp selloff that hammered equities.

Technical Analysis

GBP/USD

After trading in a long sideways trend in the range of 1.6-1.7 the pair it seems has broken the 1.6 mark. Although the stochastic indicators suggest the pair is a bit on the oversold side which could cause for a slight rebound, unless the pair will settle above the 1.65 level the pair will still be in a down trend moving towards the next significant support the 1.58 level. A rise of above the 1.65 would move the pair again to a sideways trend and might postpone the bearish momentum but would not entirely exclude another attempt to break downwards. A break of the 1.58 level downwards could spark strong selling momentum.

Market Analysis provided by eToro

Disclaimer: Trading in the Foreign Exchange market might carry potential rewards, but also potential risks. You must be aware of the risks and are willing to accept them in order to trade in the foreign exchange market. Don’t trade with money you can’t afford to lose.

© 2009 eToro Blog.

By CountingPips.com

U.S. Existing Homes sales decreased unexpectedly after rising for four months in a row according to the monthly report produced by the National Association of Realtors. The NAR report showed that existing-home sales including single family homes, co-ops and townhouses declined by 2.7 percent in August to a seasonally adjusted annual rate of 5.10 million units. The August data follows a robust 7.2 percent gain in July which put existing home sales at four straight monthly gains for the first time since June 2004 and marked the largest monthly rise in ten years.

The sales decline surprised economic forecasts that were predicting an approximate increase of 2.1 percent to a 5.35 million unit sales pace. On an annual basis, August’s existing-homes sales are 3.4 percent higher than the August 2008 sales pace while the national median price registered $177,700 in August which is 12.5 percent below the August 2008 level.

NAR chief economist Lawrence Yun commented on the housing market saying, “Home sales retrenched from a very strong improvement in July but continue to be much higher than before the stimulus. The first-time buyer tax credit is having the intended impact of bringing buyers into the market, allowing them to take advantage of very favorable affordability conditions.”

The Midwest region led the sales decline in August with a 6.6 percent decrease while the South existing home sales fell by 3.1 percent and the West saw a 2.7 percent sales decline.  The Northeast existing home sales fell by 2.2 percent for the month.

Weekly U.S. jobless claims were out today and declined in the week that ended on September 19th according to the U.S. Labor Department. New claims fell by 21,000 to a 530,000 total.  The 4-week moving average decreased by 11,000 to 553,500 workers.  This week’s data was better than a forecasted 550,000 new claims that was expected.

Continuing claims declined by 123,000 to 6,138,000 for the week ending on September 12th.  The 4-week moving average fell by 1,250 workers to a total of 6,187,250 workers unemployed.

US Dollar is stronger in Forex Trading as Stocks, Oil and Gold fall.

The U.S. dollar has traded higher today against the other major currencies in the spot forex market.  The dollar has gained versus the euro, British pound, Japanese yen, Australian dollar, Canadian dollar, Swiss franc and New Zealand dollar according to currency data by Oanda at 3:52 pm EDT.

The US stock markets declined today with the Dow falling by approximately 41 points, the Nasdaq decreasing almost 24 points and the S&P 500 down by 10 points.  Oil fell by almost $3 to $66.04 while gold lost $15.50 to fall under the $1000 per ounce level at $997.50.

USD/CAD Hourly Chart – The US Dollar advancing today versus the Canadian Dollar for the second day in a row and touched above the 1.0900 threshold for the first time in 10 days.

By Adam Hewison – I’m not going to say a lot about this new video, but I recommend that you watch it. It’s an eye-opener.

Watch the Forex Long-Term EUR/USD Video Here…

There is no need to register for this video and of course you can watch it with my compliments.
Enjoy the video and please give us your feedback on this blog.

All the best,
Adam Hewison
President, INO.com
Co-creator, MarketClub

By Fast Brokers – The Cable has capsized beneath previous September lows on heavy sell-side volume.  BoE Governor King didn’t take long to return to his dovish stance.  Today Governor King confirmed our suspicions that the BoE is supportive of a weak Pound in order to make its service and manufacturing goods more attractive to international demand.  Therefore, it seems the BoE will continue to take actions necessary to keep the Pound weak in order to boost demand for its goods and services while buoying Britain’s employment market.  King’s comments are rocking the Pound once again, sending the GBP/USD tumbling while shooting the EUR/GBP closer to par.  Our near-term outlook on the GBP/USD has been justified, and the GBP/USD is on the brink of sacrificing some important technical supports.  The Cable is quickly approaching July 2008 lows and the highly psychological 1.60 level.  Though 1.60 should ideally serve as a heft psychological cushion, the Cable’s uptrend lines are wearing thin.  Therefore, the GBP/USD only has a few more strings to pull before registering even more significant losses than we’ve witnessed thus far.  However, before we get ahead of ourselves, investors should key in on our 1st-3rd uptrend lines along with 1.60.

Meanwhile, U.S. and EU economic data releases certainly aren’t helping the GBP/USD’s uptrend.  The S&P futures are taking a hit today after Existing Home Sales registered a surprising deterioration.  Additionally, Germany’s Ifo Business Climate came in shy of analyst expectations, joining Wednesday’s negatively mixed EU PMI releases.  Looking to commodities, crude has crashed below our 1st tier uptrend line and gold has darted beneath $1000/oz.  While the S&P futures, gold, and the EUR/USD have some more uptrend lines to salvage the near-term uptrend, the overall downtrend of the Dollar is facing a considerable challenge.  Therefore, investors should eye important technical supports in all of the Cable’s correlations.  Though Britain won’t be releasing any more econ data this week, we will receive a wave of important numbers from the U.S.  If U.S. data disappoints and the S&P’s 1st tier uptrend line fails, the GBP/USD’s downturn may exacerbate.  On the other hand, positive U.S. econ data could help break the Cable’s fall and help the currency pair stabilize.  Additionally, investors shouldn’t overlook the encouraging decline in today’s weekly Unemployment Claims release.  We maintain our negative outlook on the GBP/USD trend-wise, though 1.60 and July 2008 lows should serve as reliable immediate-term supports should they be tested.

Present Price: 1.6082

Resistances: 1.6091, 1.6117, 1.6139, 1.6158, 1.6181, 1.6203

Supports: 1.6049, 1.6030, 1.6008, 1.5978, 1.5951, 1.5921

Psychological: 1.60

Market Commentary provided by Fast Brokers.

Disclaimer: FastBrokers’ market commentary is provided for information purposes only and under no circumstances should be regardedneither as an investment advice nor as a solicitation or an offer to sell/buy any financial product. FastBrokers assumes no responsibility or liability from gains or losses incurred by the information herein contained.

Risk Disclosure: There is a substantial risk of loss in trading futures and foreign exchange. Please carefully review all risk disclosure documents before opening an account as these financial instruments are not appropriate for all investors.

By Fast Brokers – Broad-based strength in the Dollar and U.S. equities is dragging and the EUR/USD is consolidating below September highs in reaction.  We recognize technically significant pullbacks in crude and the Cable, indicating a more debilitating downturn may be approaching.  Meanwhile, the S&P futures are sinking below our 2nd tier uptrend line, and are looking to test our important 1st tier uptrend line.  The Euro continues to flex a relative strength despite Germany’s Ifo Business Climate coming in shy of analyst expectations.  Today’s business climate release combines with negatively mixed EU PMI data on Wednesday.  Additionally, U.S. Existing Home Sales registered a surprising decline this morning.  In all, we are witnessing a slowdown in broad economic indicators around the globe.  It seems the global economic recovery has hit a speed bump.  The retraction is taking a bite out of investor sentiment today.  Now the question becomes whether this is a minor speed bump on the path to recovery, or the beginning of a double dip recession as some analysts have been predicting.  While we wouldn’t rule out the latter, it is clearly too early to call.  We also wouldn’t give up on the EUR/USD’s near-term uptrend since the currency pair has several uptrend lines to fall back on.  For the time being, investors should keep an eye on the S&P futures as a true barometer.  Any significant technical deterioration in the S&P would likely drag the EUR/USD lower with it.  Conversely, resilience of the S&P futures at our 1st tier uptrend line would hold the ship together.  Meanwhile, the Euro should continue to exercise its relative strength as long as the Fed stands pat and the BoE exhibits such a potent dovish behavior monetarily.  Regardless, investors should certainly monitor the situation closely.

Technically speaking, the EUR/USD has one more tough area of resistance before taking another large leg up.  8/21/08 highs and the 8/12/08-8/13/08 consolidation represent a zone of strong technical resistance, especially since they revolve around the highly psychological 1.50 level.  That being said, the EUR/USD may have limited room to the topside for the immediate-term.  However, an eclipse of these levels on a boost in volume could ignite another impressive rally in the currency pair.  As for the downside, the EUR/USD has multiple uptrend lines serving as technical cushions along with weekly lows and the psychological 1.45 level.  Therefore, the EUR/USD has several lines of defense to the downside.  Though the uptrend is intact, we are initiating a neutral outlook on the EUR/USD as we monitor the behavior of the Dollar and U.S. equities.

Present Price: 1.4719

Resistances: 1.4724, 1.4725, 1.4780, 1.4798, 1.4822, 1.4841

Supports: 1.4703, 1.4678, 1.4656, 1.4634, 1.4611

Psychological: 1.45, 1.50

Market Commentary provided by Fast Brokers.

Disclaimer: FastBrokers’ market commentary is provided for information purposes only and under no circumstances should be regardedneither as an investment advice nor as a solicitation or an offer to sell/buy any financial product. FastBrokers assumes no responsibility or liability from gains or losses incurred by the information herein contained.

Risk Disclosure: There is a substantial risk of loss in trading futures and foreign exchange. Please carefully review all risk disclosure documents before opening an account as these financial instruments are not appropriate for all investors.

Today more and more investors are warming to the fact that psychology moves markets and therefore fundamental analysis, which fails to properly measure mass investor psychology, must be flawed.

Who can blame them? After all, fundamental analysis — based on past company earnings, rating agency projections and the like — proved to be of little value during the bust.

There is a better way.

Many investors who monitor investor sentiment readings, study Elliott wave patterns and employ other powerful technical indicators were — at very least — able to position themselves to survive the recent decline. Still others were able to turn crisis into opportunity and profit from the volatility.

How’d they do it?

Technical analysis.

You see, technical indicators remove the cloudy, bias-driven assumptions from your analysis and focus on the one thing that moves markets: investor psychology.

Past performance is not indicative of future results — and that’s where fundamental analysis goes wrong. It fails to factor in the psychology that not only moves markets up and down but also leads analysts to extrapolate the current or past trend into the future. That’s why fundamental analysts almost always miss major tops and bottoms.

Our friends over at Elliott Wave International employ the largest team of technical analysts in the world. They recognize that optimism peaks before market tops and pessimism troughs before market bottoms. They use powerful and sometimes unconventional tools to help identify psychological extremes that signal high-probability turning points.

EWI’s brand-new 50-page eBook, The Ultimate Technical Analysis Handbook, will show you the various methods of technical analysis they use every day and teach you how to use these powerful tools for yourself.

If you’re a technician, this eBook is perfect for you. If you’re a fundamentals follower, it’s more important than ever that you give technical analysis a closer look. Even if you never completely abandoned your fundamental indicators, you WILL benefit from drawing on these valuable technical tools.

Learn more about this free eBook, and download your copy here.

Warmest regards,

CountingPips.com