Posted: 30 Mar 2009 10:00 AM PDT
It was another slow week for dividend increases, as few well knows companies raised their dividends. There was some surprising news from American Express (AXP), one of the largest holdings of billionaire Warren Buffet. The provider of charge and credit payment card products surprised Wall Street by maintaining its current dividend of $0.18/share. This was contrary to recent moves by Wells Fargo (WFC), JP Morgan Chase (JPM) and US Bancorp (USB) to cut their dividends … [visit site to read more]
USD/JPY Moves Above 200 Hour Moving Average
Posted: 30 Mar 2009 09:18 AM PDT
The USD/JPY has been largely non -trending. The flatness of the 200 hour MA is a testament to that fact. The moving average has been between 97.04 and 97.23 since March 23rd.
The price moved back above the 200 hour moving average in the last hour (currently at the 97.04 level). This has led to some buying interest in the pair, that saw the price move up to 97.43. Still down on the day, the move higher has nevertheless covered 61.8% of the days range. A break above the high … [visit site to read more]
Why Bond ETFs Didn’t Buy The Market Rally
Posted: 30 Mar 2009 09:00 AM PDT
As Treasury Secretary Timothy Geithner’s plan to rescue the financial system sent the market and exchange traded funds (ETFs) soaring, the bond market hardly flinched. Why?
Corporate debt is still priced for a disaster and investment-grade non-financial U.S. corporate bonds rallied in January but now have stalled, with spreads about four percentage points above Treasuries. To top it all off, U.S. senior bank-bond spreads remain at their widest levels since the demise of Lehman … [visit site to read more]
CEOs Of GM, Peugeot Lose Their Jobs As A Result Of Auto Industry’s Great Global Glut”
Posted: 30 Mar 2009 08:18 AM PDT
The Obama administration will give General Motors Corp. (GM) enough aid to restructure over the next two months - requiring Chief Executive Officer G. Richard Wagoner Jr. to resign as one of the conditions - and has told Chrysler LLC it must complete a deal with Italian automaker Fiat SpA, media reports stated yesterday (Sunday).
The administration is supposed to detail its plan for automaker aid today (Monday), Bloomberg News said yesterday.
Indeed, yesterday was a tough day for … [visit site to read more]
USD/CHF Index: The Downside Prevails.
Posted: 30 Mar 2009 08:10 AM PDT
Update on supports and resistances. … [visit site to read more]
USD/JPY Index: Under Pressure.
Posted: 30 Mar 2009 08:10 AM PDT
Update on supports and resistances. … [visit site to read more]
Cocoa Futures Driving Traders Cuckoo
Posted: 30 Mar 2009 08:00 AM PDT
Fundamentals
Cocoa futures have been trading in a tight range since bouncing back from mid-month lows. The market bounced after the last FOMC meeting and the resulting lower US Dollar, but whether or not Cocoa will be able to build upon this upswing in prices is still up in the air. Traders have had to weigh diminishing demand and better growing weather for the upcoming crop year versus a smaller crop size and poor bean quality. The chocolate industry has finally been forced to deal … [visit site to read more]
Daily Forex Commentary: Euro And British Pound Weaken Against The US Dollar
Posted: 30 Mar 2009 08:00 AM PDT
Euro
The euro fell vis-à-vis the U.S. dollar today (Monday) as the single currency tested bids around the US$ 1.3160 level and was capped around the US$ 1.3285 level. Traders will pay close attention to the Group of Twenty meeting in London on 2 April amid widespread doubt as to how much officials can realistically expect to accomplish this week. One key theme being watched closely is any indication that Europe will not give in to the Obama administration’s putative calls for more … [visit site to read more]
EUR/USD’s Descent: 1.3000 Level Could Prove Critical
Posted: 30 Mar 2009 07:46 AM PDT
The EUR/USD has taken a turn for the worst in a hurry. The currency pair has returned almost all of its gains from the major rally in reaction to America’s quantitative easing. Germany’s Prelim CPI coming in lower than expected triggered Friday’s selloff. Furthermore, the ECB cautioned the economy may not be as stable as previously thought. Therefore, the use of quantitative easing and lower interest rates is back on the table. Hence, the EU could be wading in the same pool of … [visit site to read more]
Forex Trading: Rapid Decline In GBP/USD
Posted: 30 Mar 2009 07:36 AM PDT
The Cable has been in a rapid decline since falling through our 2nd tier uptrend as investors rush towards the Dollar for safety. The GBP/USD is finding near-term stability on our medium-term downtrend line in an effort to avoid retesting the key 1.40 level.
Investors panicked on Friday after Britain’s Current Account plummeted and Final GDP came in a basis point below analyst expectations. The Current Account numbers were the largest cause for concern. Not only did the Current … [visit site to read more]
Challenges & Opportunities For Hotels
Posted: 30 Mar 2009 07:27 AM PDT
The hotel industry posted its best week of 2009 last week, with revenue per available room, or RevPAR, down “only” 12.3% versus the year-ago period. Looking behind the numbers, however, we find signs that could lead to more difficult challenges ahead for companies such as Marriott International (MAR), Starwood Hotels & Resorts (HOT) and Intercontinental Hotels Group (IHG).
According to data released last Thursday from Smith Travel Research, the RevPAR decline of 12.3% during … [visit site to read more]
USD/GBP Index: Capped By A Negative Trend Line.
Posted: 30 Mar 2009 07:10 AM PDT
Update on supports and resistances. … [visit site to read more]
Posted: 30 Mar 2009 07:10 AM PDT
Update on supports and resistances. … [visit site to read more]
USD/AUD Index: The Downside Prevails.
Posted: 30 Mar 2009 07:10 AM PDT
Update on supports and resistances. … [visit site to read more]
USD/CAD Index: The Downside Prevails.
Posted: 30 Mar 2009 07:10 AM PDT
Update on supports and resistances. … [visit site to read more]
Outlook For Gold Will Likely Rely On The Resilience Of U.S. Stocks
Posted: 30 Mar 2009 07:01 AM PDT
Gold is contracting sharply after Friday’s consolidation. The precious metal is exhibiting a negative correlation with the Dollar. The positive correlation with U.S. equities is a bit odd and raises a red flag. These types of correlations remind us of late 2008 when commodities and equities joined together in large declines across the board, signaling deflation. Therefore, such movements show investor confidence is withering and bulls should be wary. Gold’s fundamental defenses … [visit site to read more]
Is Today’s Oil And ETF Lag Tomorrow’s Aftershock?
Posted: 30 Mar 2009 06:21 AM PDT
Oil production could be cut by as much as 8 million barrels per day within the next five years, and that could be priming consumers and exchange traded funds (ETFs) with a jolt when the economy recovers.
Jad Mouawad for The New York Times reports that the global recession has forced many companies to cancel plans, slash investments and delay drilling in many corners of the Earth.
The danger lies ahead in how production ca be handled once demand picks up. Producers would find it … [visit site to read more]
GBP/USD Bounces In The Short-Term Though The Longer Term Outlook Is Bearish
Posted: 30 Mar 2009 06:10 AM PDT
The GBPUSD last week closed one day above the 100 day MA for the first time since August 2008, but that was the extent of the break. As a result, the rest of the week was to the downside with 3 straight days of lower prices.
Today the price has continued the move to the downside, with the price reaching a low of 1.4110. Since the low, however, the price has moved back up above intraday resistance at the 100 bar MA on the 5 minute chart. The current moving average support … [visit site to read more]
EUR/USD Continues Downward Move; Key Support Eyed
Posted: 30 Mar 2009 06:04 AM PDT
The EURUSD has continued its move down today. The weaker US/global stock market, the GM/auto bankruptcy threat, has the market worried about the negatives in the economy rather than the potential positives due to lower interest rates and fiscal stimulus packages. This has led to a flight back into the US dollar.
From a technical perspective, the price on Friday tested the 38.2% retracement level of the move up from the march 4th low of 1.2456 to the high of 1.3738 on March … [visit site to read more]
India Stock Market: Sensex Down 480.35 Points Monday On Global Cues
Posted: 30 Mar 2009 05:40 AM PDT
Sensex (^BSESN) fell 480.35 points or 4.8% to 9568.14.
Nifty (^NSEI) dropped 130.50 points or 4.2% to 2978.15.
Mid Cap index fell 1.5%. Small Cap fell 1.2%.
BSE 500 was down 4%. Sensex losers: 28
Of 13 BSE Sectoral indices 11 plunged.
Advancers: 904, Decliners: 1471, Unchanged: 98
Sensex Day’s Range: 9902.35- 9520.96
Nifty Day’s Range: 3110.20- 2962.40
52-Week Range: 17735.70- 7697.39
52-week % change: -46.05
Sensex fell sharply Monday, its biggest … [visit site to read more]
US Dollar Rebounds As Euro And British Pound Fall Further
Posted: 30 Mar 2009 05:10 AM PDT
Overnight Asia/Europe
USD firms overnight, stops drive a lot of trade
US rejects GM and Chrysler deal, equities fade
Traders continue to trade fear ahead of G-20
Today’s Economic Reports
All times EASTERN (-5 GMT)
NONE
Looking Ahead to Tuesday
All times Eastern (-5 GMT)
9:00am USD S&P/CS Composite-20 HPI y/y
9:45am USD Chicago PMI
10:00am USD CB Consumer Confidence
Summary
The USD firmed up overnight as follow-on selling found stops in the … [visit site to read more]
Alarming News: Bank Losses Are Spreading!
Posted: 30 Mar 2009 04:58 AM PDT
For the first time in history, U.S. banks have suffered large, ominous losses in a giant sector that, until now, they thought was solid: bets on interest rates.
In a moment, I’ll explain what this means for your savings and your stocks.
But first, here’s the alarming news: According to the fourth quarter report just released this past Friday by the Comptroller of the Currency (OCC), commercial banks lost a record $3.4 billion in interest rate derivatives, or more than seven times … [visit site to read more]
Stimulus Coupled With Strong Stock Market Performance Creates Bullish Outlook
Posted: 30 Mar 2009 04:35 AM PDT
Is it “Bull Market 2009?”
The answer to that question depends on whether you believe the three-week surge we’ve just been through is the start of a prolonged advance for U.S. stocks, or was just the kind of “dead-cat bounce” fake-out move that temporarily interrupts a protracted bear-market decline.
It’s not an easy call to make, although all the stimulus, bailout and fix-up-plan money flowing into the U.S. financial system certainly makes a strong case for at least a near-term … [visit site to read more]
This Week’s G20 Meeting Could Lead To Strength In The Gold Market
Posted: 30 Mar 2009 04:30 AM PDT
Gold and silver succumbed to profit taking (gold down 3.2% and silver down 2.5%) last week as risk appetite returned to markets with the tentative recovery in equity markets continuing.
Gold’s performance was lackluster, despite increasingly bullish news with regard to growing acceptance that the international monetary system must be reformed and the strong probability that gold will again play a more significant part in the international monetary system. A UN panel, the Chinese, … [visit site to read more]
Oil Markets: Financial Markets’ Havoc And Quarter-End Flows To Dictate Direction
Posted: 30 Mar 2009 04:00 AM PDT
Oil prices cannot be spared this nasty opening in Europe when every asset classes are down and safe haven currencies being bid (CHF, JPY). Both Brent and WTI are hovering just above 5$50 and the picture does not look healthy. 10 day avergae is broken and next test would be the 20 day moving average. Weekend did not provide any major news SFOT can identify that is oil specific and he shall leave it to the financial markets’ havoc and quarter end flows to dictate direction. However, he … [visit site to read more]
Why The Mining Sector Doesn’t Need Banks
Posted: 30 Mar 2009 03:27 AM PDT
In the magical world of FinanceLand, it seems evil Dr. Doom has landed on the capital (Stall Street), and with a zap from his freezing ray-gun, has permeated the landscape with a thick layer of frost.
The effect: Traditional sources of financing - indeed, virtually every type of credit - have been placed in an Ice Age-like deep freeze. Facing a major crisis of confidence, banks underwent a 180-degree turn: Whereas they were previously almost force-feeding us loans, banks are now … [visit site to read more]
Futures Outlook For Monday: S&P, Mini Dow Jones, Crude Oil, Spot Gold
Posted: 30 Mar 2009 02:29 AM PDT
S&P 500 June Contract
S&P has come sharply lower through level of support with 793.72 holding currently. This pullback should not be unexpected given the recent action of the market. At 789.60 it would only have retraced 25% of the move higher, so this is not the start of another bear run. It is currently only a correction to the short term uptrend and can actually go lower and not interfere with buying opportunities.
Below 793 would see short term selling pressure with 789.60 … [visit site to read more]
India Stock Market: Strength In NIFTY But Still In Rectangle
Posted: 30 Mar 2009 02:00 AM PDT
India’s Nifty Index (^NSEI) (as well as the $BSE Bombay Sensex Index (^BSESN)) showed great strength in its recent price swing from 2,500 to 3,100 over the last two weeks. Let’s look at the Nifty Daily Chart to see its current consolidation structure and note key points to watch.
Click for full image.
I’m sidestepping the Elliott Wave Count this week due to the complex corrective structure forming. It seems easier to refer to the recent price action as a multi-wave complex … [visit site to read more]
From Crony Capitalism To Geopolitical Mercantilism?
Posted: 30 Mar 2009 01:47 AM PDT
Recently there have been many calls for bondholders and shareholders of troubled financials to bear the brunt of the crisis. As an example, John Hussman recently wrote:
Make no mistake - we are selling off our future and the future of our children to prevent the bondholders of U.S. financial corporations from taking losses. We are using public funds to protect the bondholders of some of the most mismanaged companies in the history of capitalism, instead of allowing them to take losses … [visit site to read more]
Futures Outlook For Monday: FTSE, DAX, Eurostoxx
Posted: 30 Mar 2009 01:40 AM PDT
FTSE June Contract
Ftse looks under pressure and this morning if the support fails at 3822, sellers will reappear, leading this lower for 3777 to 3756. At these lower levels, look for profit taking to appear. Buyers would also enter the market giving FTSE a short term lift, seeing a bounce, back to good level of 3822.
However, if 3756 fails to hold, it would make buyers nervous and fresh selling would appear forcing buyers to reverse and go lower with 3722 then look to entice. Once more … [visit site to read more]
Interest Rate Plot Thickens: Deflation Vs Inflation As Seen On The TIPS Chart
Posted: 30 Mar 2009 01:29 AM PDT
While there were many important stories that broke this week, the one which found me briefly holding my breath was the failed auction of £1.75 billion in U.K. government 40-year bonds on Wednesday followed by the weak demand for $34 billion of 5-year U.S. Treasury notes later in the day. While Thursday’s successful auction of $24 billion of 7-year U.S. Treasury notes has temporarily put the government debt auction issue on the back burner, the interest rate plot is clearly thickening - … [visit site to read more]
Did 5 Waves Down Complete On The Shanghai Composite Index?
Posted: 30 Mar 2009 01:00 AM PDT
Can we count out a full five-wave structure on China’s Shanghai Index? Let’s take a close look at the index which has shown strength recently and may be on pace to etch out fresh 2009 highs.
I’ve started the chart at the October peak (which corresponds with the US S&P 500 (^GSPC)) and noted a quick fractal 5-wave decline which then gave way to an ABC Wave 2 correction that began 2008.
Price then experienced its primary 3rd wave down well in advance of the S&P 500 … [visit site to read more]
Video: IMF Changes Lending Practicrs
Posted: 30 Mar 2009 06:00 AM PDT
The International Monetary Fund revamps its lending practices in the face of the global economic crisis. … [visit site to read more]
Futures Outlook: German Bund June Contract
Posted: 30 Mar 2009 01:00 AM PDT
German Bund June Contract
Bunds traded above their 50% retracement line to 123.72. However gains could not be maintained, and sellers won the day, pushing this down to 122.94.
Profit taking was seen to here, and although you have seen a small bounce, the lower close suggests that the sellers are not satisfied and want to push lower.
122.94 is the line of defence today. If a break is posted below here selling pressure will prevail, leaving 122.76 then targeted. Sellers will cover at … [visit site to read more]
Posted: 29 Mar 2009 09:50 PM PDT
Lyxor is the ETF provider arm of investment bank Societe Generale. In this interview with DailyMarkets.com, Joseph Ho, Managing Director & Head Of ETF Sales & Marketing In Asia, sheds some light on ETF liquidity, the role of market makers in ETF trading, and tells us what’s Lyxor’s most popular ETF. … [visit site to read more]
British Pound, Euro Feel Pressure As Recession Deepens
Posted: 29 Mar 2009 09:03 PM PDT
Pressure could be on the Euro this week as recently released economic numbers are still indicating a deepening and widening recession in the Euro Zone economy. The recent weakness is just further proof that sitting on your hands doesn’t work when it comes to stimulating an economy. Investors are still voicing their disgust at the pace at which the European Central Bank has acted toward providing stimulus to the economy whether through interest rate cuts or economic stimulus.
The recent … [visit site to read more]
An International Reserve Super Currency?
Posted: 29 Mar 2009 08:58 PM PDT
Bretton Woods the Third
March 24 (Bloomberg) - China’s call for a new international reserve currency may signal its concern at the dollar’s weakness and ambitions for a leadership role at next week’s Group of 20 summit, economists said.
Central bank Governor Zhou Xiaochuan yesterday urged the International Monetary Fund to create a “super-sovereign reserve currency.” The dollar weakened after the Federal Reserve said it would buy Treasuries and the U.S. government outlined plans to buy … [visit site to read more]
The Week Ahead: What Does The Financial Sector Say?
Posted: 29 Mar 2009 08:50 PM PDT
lthough March brought us pain off the bat, March ended up turning around for the better, eating away at the global market’s losses and pushing higher off of what I have named the, “Profitability Rally.” Many have said we’ve hit bottom, or that a bottom is in place. With the vigor of this rally we have on our hands, I happen to believe this statement to be true, with the simple addition of saying that 666 will most likely be tested before summer arrives. It could be this week, it … [visit site to read more]
Goldman Sachs Has Outperformed Both The XLF And S&P 500 Since November
Posted: 29 Mar 2009 08:47 PM PDT
Goldman Sachs (GS) has been on many traders’ radars because it has shown relative strength over the Financial Sector ETF (XLF) and the broader S&P 500 (^GSPC) since its November lows.
Let’s take a look at GS on the weekly chart (using two possible Elliott Wave Counts) and then at the Daily Chart, where we see a rising trend channel and its respective relative strength lines.
Goldman Sachs (GS) Weekly:
Let’s start with the two possible Elliott Wave counts.
The … [visit site to read more]
Playing It Safe In This Environment
Posted: 29 Mar 2009 07:45 PM PDT
This weekend, I have had the luxury of time review more than the usual share of national and international economic news and commentary. Experts range from those predicting the demise of capitalism to the beginning of a new super-bull market and many somewhere in between, provided intellectual fodder for the brain.
As a result, I have determined that no one knows what the hell to do, unless you want to roll the dice and hope for luck. In this environment, my advice is to play it safe … [visit site to read more]
Telling The Market Direction: Now’s The Time To Be Prudent
Posted: 29 Mar 2009 07:40 PM PDT
Fence-sitters aren’t wishy-washy or cowardly, they’re merely being prudent. I say this in response to a thought provoking and welcomed comment yesterday.
“Methinks you may be ahead of yourself Guru. Just about a month ago you said ‘I must confess I allowed myself to become victim of a most common problem. I let my native optimism overtake discipline.’
You also had a chart of a huge double top of the S&P (^GSPC) with an additional 50% retracment to 450’s.
Not many fundamentals … [visit site to read more]
Posted: 29 Mar 2009 07:39 PM PDT
In a week furthering the upward trend in equities, there were a few standout ETFs moving more than 20% for the week. For you momentum investors out there, these may be worth checking out.
TAN (TAN) - Claymore/MAC Global Solar Energy - Up 32%
The solar sector jumped on positive news on multiple fronts, from further endorsements from the administration to Chinese subsidies.
FAS (FAS) - Direxion Financial Bull 3X Shares - Up 27%
This ETF’s a routine mention here (”Recovery … [visit site to read more]
Mastercard And Visa Will Outperform The Credit Card Industry In The Long Run
Posted: 29 Mar 2009 07:30 PM PDT
Visa and MasterCard are two companies that I believe will outperform the credit card industry in the long run. Don’t be fooled; the next two quarters still pose risk for a their stock prices as the economy continues to contract and consumers spend less money. However, that could present a more attractive buy-in point. … [visit site to read more]
Posted: 29 Mar 2009 06:47 PM PDT
Is what we are experiencing with the economy the beginning of the 'Economic Armageddon’ that Stephen Roach forecast for the U.S. in November 2004? This is what he said (and I paraphrase):
America’s record trade deficit means the dollar will keep falling, interest rates will rise further and U.S. consumers, in debt up to their eyeballs, will get pounded with no better than a 10% chance of avoiding economic Armageddon.
A lot has happened since then. The U.S. Dollar index did keep … [visit site to read more]
The Current Bullish Behavior Doesn’t Mean We Are Now In A Bull Market
Posted: 29 Mar 2009 05:02 PM PDT
At the end of last week the market had made impressive progress through a strong zone of resistance, but it had become extremely overbought on a short-term basis. My conclusion was that we should at least get a short-term correction, since we are in a bear market. Instead, short-term indicators backed off while the market continued higher. This is bullish behavior - the kind of thing you will see time after time in a bull market. That does not mean we are now in a bull market, but it does imply … [visit site to read more]
USD/JPY - Weekly Forex Analysis For March 30 - April 3, 2009
Posted: 29 Mar 2009 05:01 PM PDT
USD/JPY (a daily chart of which is shown) recovered this past week from most of the drop that it experienced during the prior week.
The key resistance level to target on this recovery was 99.65, a re-test or break of which would have had significant bullish ramifications. Instead, price fell short, double-testing 98.85 towards the end of this past week before failing and retreating. This currency pair, however, can still be considered to be within the normal bounds of a new … [visit site to read more]
If You Follow The (Smart) Money, Gold Is Clearly The Smart Play
Posted: 29 Mar 2009 05:01 PM PDT
At 53 years of age, John A. Paulson manages about $30 billion in his hedge funds. Over 2007 and 2008, he pocketed $10 billion in profits after he correctly bet that the subprime-mortgage market would crash. His Credit Opportunities Fund earned nearly 500% gains in that year. In 2008, his fund returned 37% - in a year where the typical hedge fund lost 19%.
Since last September, Paulson earned nearly $420 million shorting the stocks of some U.K.-based bank stocks - specifically … [visit site to read more]
“Better Than Expected” US Economic Data Seems Dubious As Ever
Posted: 29 Mar 2009 05:01 PM PDT
This past week, traders and TV pundits thought they found the “proof” they had been looking for that the bottom was in: a slew of economic statistics that “beat” Wall Street’s consensus estimates.
Unfortunately for the bulls, as Barron’s columnist Alan Abelson reveals in the following excerpt from this week’s Up and Down Wall Street column, “In Dante’s Footsteps,” there’s a lot less there than meets the eye.
IT’S A COMFORT IN THIS wildly spinning world to find some things remain the … [visit site to read more]
US Stock Market: 2 Likely Scenarios For The Next 3-4 Weeks
Posted: 29 Mar 2009 05:01 PM PDT
This is the second week in a row that investor sentiment is neutral. While there is nothing unusual about this, there are two scenarios that will likely play out over the next 3 to 4 weeks.
In scenario #1, the market and current intermediate term price cycle will top out when there is extreme bullish sentiment (i.e., bear signal). To attract more bulls the equity markets will need to be trading meaningfully higher.
In scenario #2, the rally will likely churn along for the next four to six … [visit site to read more]
White House Mends Fences With Wall Street
Posted: 29 Mar 2009 05:01 PM PDT
President Barack Obama convened a “who’s who” of executives from the nation’s largest banks Friday to mend fences with Wall Street and drum up support for his plans to stabilize the financial system.
The meeting appeared to clear the air as bankers said afterward they knew their companies are vital to a potential economic recovery and they want to work with the government.
“The basic message is we’re all in this together,” John Stumpf, the Chief Executive Officer of Wells Fargo & … [visit site to read more]
ValueVision: Best Stock Under $1
Posted: 29 Mar 2009 05:01 PM PDT
ValueVision (VVTV) has been gaining some big momentum as it has shot up from its low stock price of $0.18 to $0.74 and up again after hours to $0.83.
I first began looking at VVTV because it was:
Trading at a huge discount to what I believed was its liquidation value based on Graham’s Net Net formula,
(No longer a net net due to its increase in off sheet obligations)
An easy to understand business,
Cash flow from operating activities was positive,
Short term … [visit site to read more]
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