Thursday, April 30, 2015

USD Weakness Validated & Confirmed

 
The USD session price recovery back @95.10 basis point have been the result of the lowest Jobless claims #'s after registering a low @94.39 which is now considered to be the low for the closing month of April. A corrective move for the USD which is  in line with our market overall outlook. The ISM figures for Friday's closing would be carried over towards the month of May's trading activity.Furthermore, provided some relief across the board for the rest of the currency pairs which also have pared the price difference from yesterday's move. This should now validate & confirm the technical "Dark Cloud" formation and uncertainty which we have previously mentioned from the end of the 1st quarter review. Link: Recall: End of 1st Quarter Review 

The technical's emphasized not merely an engulfing bar for the USD  Index but more of a "Piercing Line" which composes the past three week's of April's trading activity. The limited upswing with the USD would be short-lived on a daily basis as the direction of the price swings would still be on both directions due to the volatility and the Tug of War between major players in the market.

Monday, April 27, 2015

Reaping the Rewards on CABLE!

Congratulations! Again, now that your're ahead stay ahead and you are more than welcome! Timing ahead of the move is equally important for either an entry or an exit. Watch CABLE real well. Especially for those of you who has been keeping your  long positions with us on the 1.4789 and 1.4885 levels. Cheers to all and don;t break the champagne bottle yet :)

It is indeed an honor to be trading with you all!
Sir Alexander 

CCY Corner: #GBPUSD Divergence, Sentiments & Momentum

The near term weakness in the USD after softening reports on the US economy have finally given long remaining short-sellers on the Pound to cover positions. As Cable prices have started to recover from its lower levels, speculative sentiments contrary to price and volume have lagged behind when last week's volume slightly measured above its moving average volumes of transaction.

Speculative sentiments have fallen to negative territory while prices have recovered simply based from the Hawkish BoE minutes directing a favorable reaction for Cable prices to move to its current levels @1.5180 which also serves as the initial point of daily price resistance on the Asian session before another push higher can take place.

Meanwhile, a visible divergence have occurred when prices reached its lowest level @1.4565. Momentum and volumes relatively were lower and an unconvincing gradual buildup of prices from short-covering have supported the recent move on the Pound. Asian trading opening were mildly soft across the board and have remained within the day's range. However, a further increase in market would continue to prevail for Cable, as prices would still swing higher with some session pullbacks to come with it. For as long as the US Dollar would continue it's corrective move; the tech perspective on GBPUSD would be a continued V formation that would signify a positive tone moving forward, especially if no considerable change in direction with its corresponding EURGBP Cross rate would be made. This divergence would affect the EURUSD and the AUDUSD more effectedly as the US Dollar declines. 

Reference Trade in Effect

GBPUSD as of April 15, 2015 

GBPUSD_EURGBP DIVERGENT TREND
A Cipher3 Applied Analysis & a Combination of a Counter-trade Strategy 


Friday, April 24, 2015

GOLD LACKLUSTER TRADING


Not the Currency of Last Resort as it used to be! (until when?)

The precious metal is indeed losing its luster with current prices @1175.46. A re-test of the low @1130.10 is underway with no sign of fresh buyers at this levels.

During earlier times, when we hear Russia is in the market buying gold, a bunch of chaos and a buying frenzy can be seen among traders. Apparently, those days are likewise gone. Even if news of Russia piling up gold reserves including other central banks would encourage some market activity to push prices higher. For now, we can safely say that stocks weighs heavier in value, especially when positive earnings are still coming out from market reports. Foreign currency value on gold are depressed with the effects of a stronger US Dollar. As long as the USD corrective move would not go below its more important benchmark for the 2nd quarter; this maybe too early to make a price call.as negative effects on gold would weigh bearish until a solid consolidation can be made at a reasonable base price 

Tuesday, April 21, 2015

Riding a Bull Market Trend Extension on N225

Until such time primary central banks changes their stance on interest rates and inflation depending on certain market conditions; market thrusts on equities now focused on Asia and Europe will remain on an extended run. 

Two of the major indices in Asia just to name a few are in focus from the time we have made a market call last February 2015. Although, the Dow Jones, SP500 and the NASDAQ has had a roller coaster ride, the N225 and the HSI along with its European counterparts are now enjoying a good run for the money. The build up of public funds from main-street investors alike have furled the rally extension after the Dow Jones; as earning season kicks in not to mention the milder correction on the US Dollar. The ladder-like climb of the N225 reflected on this chart still shows the trend well intact contrary to the struggle and the Tug of War between major players where it creates a market squeeze among retail investors forcing them to capitulate on major corrective triple digit declines in a daily market move. And with the US Dollar still finding its range break, the Dow's ability to move outside of its similar range would be muted; while Asia would enjoy this primary rally. Constraints in China is keeping it close to slowdown not directly related to the Japanese Stock index 

Reference to: N225 Continues Strength: Justifies Market Call

Related: How to Prepare Riding a Tity to moverend in the Making

The Big Picture: Futures or ETFs - CME Group


An Excellent Source of Information Sharing- CME Group
The CME infographic guide that will help you make the decision on whether Equity Index Futures or ETFs are right for you. Check it out! 

Monday, April 20, 2015

Typical Bull Trap & Market Squeeze

DOW JONES as of April 20, 2015
The Dow's recovery back above the 18000 after the triple digit decline was interpreted by some analysts as a technical reaction. Again, the Bank of China's RRR reduction have provided the equalizer. A true example of a roller coaster ride on both sides of the trade  and where traders again were squeeze out from a typical bull trap.

The Dow's trading range is still within the 18288 high and 17500 low well within its consolidation as defined using the Donchian Channel as reflected on the chart below. The upswing was done with less volume which simply mean that an equal # of short-covering was traded and reacted on the recent overseas announcement from the Bank of China. 

The next few trading days would define the next true direction relatively for the week. And watch for the price action of the US Dollar with the DXY currently re-testing the 98.10 initial resistance. Any price above this level will remain net positive for another price recovery or even yet a continuing trend direction for the US Dollar.

Sunday, April 19, 2015

Coming from Behind - China's RRR Move

China's move on reducing the Reserve Requirement Ratio for Banks right after regulating stocks trading have been interpreted as a real sign of the government addressing a foreseeable single digit economic growth for China. This would free up much liquidity for banks to lend to stimulate the economy which came from behind the two previous rate cuts made last year.

The announcement made have calmed expectations and nervous investors of a probable opening decline across Asia due to the US stocks moving triple digit last Friday. China and Japan have eased as of this writing and will be waiting for the next two trading session for the day towards the US market. Although, some US analyst have seen this move by China as a desperation to combat a high probability of a slowdown for the year. 

The timing could not have gone better as China's main move in pursuing and strengthening its stance on the Asia Infrastructure Investment Bank (AIIB) will be their main flagship growth in the financial sector. As the Chinese Yuan becomes part of a basket of currencies to be traded and likewise acceptable worldwide  The Chinese Yuan or better know as the Renminbi indirect challenge to the US Dollar. Its timing in setting the AIIB group of nations have been welcomed by most counties in Asia and Europe that have shown interest and have joined either as co-founding members of the bank's mandate which is in close proximity with the likes of the Asian Development Bank, World Bank, and the International Monetary Fund.

With that said, the viability of the bank's goal is noble which defines specific areas of responsibilities that would provide the necessary funds and assistance to build continuous growth for a developing country. However, with global rates at their lowest including most major  foreign exchange rates weakness, have been seen as a timely executed plan favoring a China led-consortium. With Global trade imbalance and surrounding geopolitical issues there should be a drive to create a new global equilibrium levels that would favor most member countries in this crucial times.

Your Opinion is Highly Appreciated on AIIB

 Survey Question is:

Is the timing of China led - AIIB right for Europe and other Asian countries? Why?

Thanks!

Not Just Forex: DOW Reacts...

From China Regulation & what to expect
Other than the fairly mix and negative reports surrounding the market; the significant report that came from China allowing short-sell in the Chinese markets have driven a triple digit decline for the DOW JONES on the last trading day of the week ending April 17, 2015. This is no different from any sudden blow-up in trading volume where prices spikes higher due to the overwhelming volume of transactions from traders and investors. 
This would allow regulators of the exchanges to either increase additional margins on depository requirements. In this case such actions where deemed to be negative effects in the market. This also followed the overall decline seen in the global stocks that had investors cloud the markets with uncertainty, which included the prolonged Greece crisis that added to the sell-off.
       Not Just Forex: DOW Reacts...

Is Hedging an Asian Stock Portfolio Equally important knowing the US DOW declines Triple Digits?

Every time the US Dow Jones Industrial Average (DJIA) declines equivalent to or more than 1.26% considered to a triple digit decline, would definitely be another blow for Asian stock markets by the time it opens. 
Under these circumstances; what can main-street investors in Asia do to take pre-cautionary measures and strategies knowing that the day markets open that a huge decline would be expected? As we know that Asian stocks do mimic or does follow the major US markets. And by having access to both primary and secondary markets should be made available for investors to at least be able to arbitrary hedge and/or be advice by their respective fund managers as to how their portfolio investments could be protected whenever such movements are made while their respective markets are closed.
      Access to primary Markets for Asian Main-Street Investors

Friday, April 17, 2015

CCY & Index Corner: DXY EUR GBP DOW

UPDATEQuestioning a Market Squeeze Part 2
Dow’s recovery above 18000; with a registered high @18288.63 dated the 2nd of March serves as the initial price cap and would allow Dow bulls the need to retest this trend. But a word of caution, a failed new high would drive profit-taking and a much wider decline can occur as this is also part of the market squeeze described herein. 
The overlying difficulty would not be made without a valid support of volumes for the US Dollar and the DOW would be a negative signal especially with fundamental uncertain surrounding the markets. On the contrary, the DXY has now gone beyond its initial support @98.10/40 which signaled a bearish momentum build-up in the near term. 

       CCY & Index Corner: DXY EUR GBP DOW

Thursday, April 16, 2015

Market Squeeze Disrupts 2nd Quarter Entry for Stocks and USD

Directional Price movement is back!.

The behavior of the Dow's recent corrective move can be attributed to a market squeeze on prices and clearing out some over-weighted positions entering the 2nd phase of trading activity in the market. Which also led to the recent decline and now a corresponding decline from the USD is weighing in the market..While stocks have regained its posture on a resumption of its bull run.

This is also on top of the recent comments from the IMF positive reading on the European markets and a contrary outlook for the US economy; which also serves as the main catalyst for the price recovery of the Euro and Cable. Aside from traders and investors reaction by forcing a short-covering position that is current taking place. There really should be a clear adjustment both in rates and prices moving forward towards the 2nd quarter; as the US has to maintain a competitive stand with its trading partners to boost its economy in a more sustainable manner.

The mere sense of having earnings season upbeat initial  of reactions have proven to support the current upswing giving stock prices the leverage of price from a declining US Dollar. The cyclical pattern of price change and quarterly directional movement between the Dow and the USD is now in play. Understanding this behavior and the psychology behind the th stock market prices contrary move is now justified as well.

CCY Corner: EURO v. DXY Identify Gartley

Although such patterns can be identified well after the fact; with a keen eye. The Gartley pattern on the EURUSD chart on the way higher is on its way for a price recovery. A similar pattern for the DXY has also been made. Can you identify it without the formation? However, these formations do take some time to form. The timely reflection on the DXY was made ahead of the major currency pairs. And sometimes we do ask the question...which comes first, the chicken or the egg?
On the fundamental stand point, the initial move came from the IMF statements likewise provided the necessary catalyst to support a considerable lift for the European majors which included CABLE.




Thursday, April 9, 2015

HANG SENG INDEX aligned with NIKKEI 225

The Hang Seng Index HSI in Hong kong have made headway for a rally fueled by the List Stock companies from the China mainland. The opening & bridging China stocks with Hong Kong exchange listed companies by a link-quota have been maximized by mainland investors leading the buying frenzy since the break away price gap have been narrowed down. The shift of investors sentiments have grown stronger for the past few days. This rally came from behind that took everyone by surprise. Keep an eye on both Asia and European Indices as market investors shifts and allocates the strength of the USD for hedging currency rates through the ETFs market.


Wednesday, April 8, 2015

N225 Continues Strength: Justifies Market Call

Focus on Asia Market

With the Bank of Japan staying on the course of its monetary policy, the renewed strength of the N225 have been a steady climb contrary to its short-lived daily market correction from it recent high @19746.20 dated the 25th of March until the 1st of April 2015. This simply means that the next continuing leg higher was in the making. Thus, seeing a new found high currently @19845.53 to this writing, have made it clear that the next leg is well in place from the previous call made last Feb. 20, 2015 (Market Insight: Dow Indices ETFs).

N225 Continues Strength: Justifies Market Call

Sunday, April 5, 2015

End of 1st Quarter Review: DOW & USD

Dark Clouds Over Market & Investors 
The disappointing jobs data have dented the market’s ability to continue its upward trajectory. As a tentative weakness on the economy’s growth have fueled uncertainty on the FED’s timing increasing rates. Although, the eventuality of pursuing rate increase still remains intact only to be perceive as to when the appropriate time would be made. 
The opening month of January 2015 reflected the correction on the Dow which led a continuing rally for February. While March shows a similar price pattern for consolidation.
The roller coaster ride in the stock market’s direction reflects the presence of volatility that exists in the market. While investors have taken some initiatives to unwind positions at the end of the quarter’s trading activities especially under these uncertain circumstances coming out from the recent reports. 
Correlating the Jobs data with the strength of the USD and lower Oil prices added to the negative tone as lower activity was focused on the affected manufacturing and retail leisure hiring with weather related reasons for the slower growth in new employment as a major factor. 
       End of 1st Quarter Review