Archive for January, 2010
Massachusetts Changes Things !!
By Marek W. Stupka | January 21, 2010
This week’s stunning victory by a conservative Republican Scott Brown (elected to the U.S. senate) in the genetically liberal climes of Massachusetts will very likely have a far greater long-term impact on the financial markets than what we may realize today.
Republican Scott Brown won a tough Senate race to succeed the deceased liberal Edward Kennedy, giving Republicans 41 votes in the chamber consisting of 100 members, and depriving Democrats of a “super majority” needed to pass the proposed pieces of legislation. The Republican win means Obama’s plans for healthcare (mainly passing the long-debated healthcare bill), climate change, financial regulatory reform and fighting unemployment could suffer from the new power structure in the Senate.
The stock market is set to reflect the impact of the Democrats’ Debacle in Massachusetts. The Dow is now down more than a 200 points after rising to its peak levels since the recession begun.
However, true meaning of the new Senate lineup is only about to impact the financial world in the coming weeks and months. Apart from initial enthusiasm on Wall Street, caused by the fact that the healthcare sector is likely to record higher profits after Mr. Brown’s victory, the new Senate power structure also means that all consequent Obama’s regulatory reforms will meet strong resistance coming from the opposite political camp.
This will most likely affect Obama’s plans for another targeted governmental financial injections coming on top of the $787 billion stimulus package he signed in February 2009, especially the so much discussed $155 billiion job bill, which is now, after having passed in the House of Representatives, expected to leave the Senate in a new, “republicanized” version.
As many of us following the market fundamentals are very well aware of, the still lingering fears among global investors of another market meltdown were being downplayed till now by pointing to the fact that whenever the US government smells the markets are about to deteriorate again, Obama simply provides for a new bailout money, and the danger just disappears… Well, after Brown’s victory, things are not as pink-’n-bright for Wall Street as they seemed just days ago! Get ready for an inevitable market correction. TO ALL MY STUDENTS: In the FOREX market, get ready to use the ALEXANDER Trading System! We will be able to make juicy profits on the new technical trend that is just developing !! (I’ll publish another post with the technical analysis of the majors anytime soon).
Topics: News From Wall Street | 2 Comments »
EURUSD and DJIA Decoupled Significantly !!
By Marek W. Stupka | January 9, 2010
Today I want to start with citation of my August’09 forecast (which I confirmed in my September technical post): “EURUSD rising as far as to the important psychological resistance of 1.5000 after crossing the all-year resistance 1.4337 is my preferred outlook for this instrument…”
Now in the 1D chart above [ click on the chart to get a bigger picture ], one can see EURUSD price development with start in April 2009 and end today, the 9th of January 2010. Note that the most frequently traded FOREX pair traded just as I have prophesied already back in August 2009, t.m. in a long-term ascending channel (red), from October onwards capped by long-term ascending trend line (brown). Also note that it wasn’t until December 2009 till the pair: A. met the predicted 1.5000 psychological Resistance, B. broke below the bottom of the ascending channel, C. descended to the Ichimoku Kumo Cloud and below (more about Ichimoku Kinko Hyo, channel and trendline breakouts in the 1-on-1 Training Course), and started to post a reversing price pattern since that time…
In reference to my very last article posted on this blog, I do not want to go deeper into why I predict the EURUSD to mostly trade sideways in a broad range of 1.3000 and 1.5000 in 2010, and thus generate excellent trading opportunities for the CANAAL (short-term) and the CONFIRMATOR (mid-term) Trading Systems, both proprietary to Gepard Investments, Inc. What I want to focus on, however, is the rather substantial correlation decoupling between the benchmark Foreign Exchange instrument and the benchmark equity index instrument…
Note that the chart you see above [ again, feel free to click on the picture to get a bigger chart ] is rendered over the very same time period as the EURUSD chart in the beginning of my today’s post. This chart, however, is for the Dow Jones Industrial Average (if you tried to plot charts for both the S&P100 and S&P500, you end with pretty much the same price curve).
One interesting thing to recognize when comparing both charts is that, starting from December 2009, EURUSD has been significantly decoupling from the DJIA and the S&P. The correlation between the two, based mostly on the investor pattern generally known as “Flight to Safety” or “Flight to Quality” and representing pouring money into the greenback’s safe haven whenever investors smell a risk-aversive behavior in equities, has now been considerably weakened. One good reason for this is that neither USA nor Europe - or China (and China in particular, since it is now the investing party in a great sweet portion of the US national debt, while -unluckily for Uncle Sam- it now perceives America as its most treasured investment) - would want a weak-greenback scenario again. Weak dollar, implied predominantly by the irresponsible actions of the US Government and the FED in-between 2004 and 2008, has been one of the primary reasons why we have experienced the 2008-2009 Great Recession in the first place …
Topics: FOREX Trading Analysis | 2 Comments »
Happy New Year 2010, Traderland !!
By Marek W. Stupka | January 3, 2010
Another year’s over! When we turn back to analyze it, there’s a simple question to be answered: “How was 2009, really?” By the global trading community, 2009 is perceived as one of the worst years ever. Hey, but not by smart investors able to profit on trading even when conditions suddenly change!! .. we at GI boast to belong to ones ..
Perfectly in accord with that widely spread habit of returning during the NYE holiday to the old year performance in order to summarize and make conclusions, I attempted to make the same effort and went through all my 2009 blog posts, mostly the technical ones (please note that on this blog, I only publish simplified, long-term market analysis and make predictions as far as my most favored future development of the selected currency majors, EURUSD in particular. In no way, however, these should be mistakenly perceived as being the sophisticated, comprehensive technical research pieces we produce at Gepard Investments, Inc. - these are only available to my students after they apply for my 1-on-1 FOREX Training Program).
I encourage you to go through my last year’s posts by visiting the Archives of this page. If you read carefully, and compare the actual predictions with the market reality, you will find out the same thing I did.
In fact, even for me, this was an encouraging fact to discover:
In 2009, none of my long-term technical market prophecies on this blog failed to come true!! In fact, those investors that took my advice to heart in the past year were able to make hundreds of pips and thus generate profit of hundreds to hundreds of thousands dollars, depending on how much money they trade with. SO HERE GOES MY LATE CHRISTMAS AND NEW YEAR’S WISH > Cheers to smart investing in accordance with the finest trading strategies ever invented! Cheers to the Gepard Trading Style!! May the year 2010 be even more fruitful for us than 2009 !!!
Topics: Miscellanous | No Comments »