News From Wall Street
« Previous EntriesMassachusetts 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 »
Recovery vs Unemployment
By Marek W. Stupka | November 22, 2009
U.S. unemployment has not hit 10% since 1983. The highest American unemployment rate on record, 10.8%, was reached in late 1982 and lingered in the calendars till January 1983. On November 6, 2009, the U.S. unemployment posted a shocking double-digit number again : 10,2% !!
Hilary Kramer, chief investment strategist at A& G Capital Research said that: “As long as the consumer is 70% of the gross domestic product, then we can’t recover with so many unemployed and underemployed.”
But let’s face it, how real are threats of the unemployment ghosts influencing the already booming recovery? There is no doubt - unemployment is here to stay. That, of course, doesn’t mean the U.S. as well as the global economy is not recovering.
Personally, I don’t expect the employment situation to get better until at least the start of next year. Some companies may even wait until next year to begin hiring people to help their bottom line through the end of the fourth quarter. Moreover, unemployment is a lagging indicator. It is absolutely normal and even typical for unemployment to continue to inch up for several months after the DJIA and the S&P 500 trough. In other words, history shows that the unemployment rate only starts to fall 6 to 7 months after the Dow Jones Industrial Average crosses from below an important psychological level - in our case it is the 10,000 mark. It was reached in the early November 2009, so don’t expect the NFP showing positive numbers until June-July 2010.
OK, what should a savvy investor do these days? What is the best fundamental data to follow? Well, let’s be honest, the absolute worst thing an investor can do is try to time the market according to unemployment numbers! If you do this, you will miss the train and settle your long-term trades too late..
And so, investors shouldn’t put too much weight on the unemployment numbers. These numbers won’t improve soon, as employers will first try to replace their lost workforce with technology and then hire temporary workers before hiring employees full-time.
Right now, the Nr.1 fundamental story of the Fall 2009 is the CONSUMER CONFIDENCE. Yes, we all know that the GDP figures are on the rise again. That, my friend, is already history. Now, when it comes to fundamentals, the absolute superior thing you should focus on is confidence of the U.S. buyers. I strongly advise to watch the indicators like CB Consumer Confidence and Personal Spending to determine how soon the markets will recover.
P.S. Note that there is no doubt in my mind about the global recovery being already underway. The only thing we need to find out in the days to come is how fast the recovery process is going to blossom. This, my fellow traders, is the beginning of many investment opportunities, this is the dawn of big money being made at the FOREX front, too…
Topics: Miscellanous, News From Wall Street | 3 Comments »
A Year After the Lehman Collapse
By Marek W. Stupka | September 7, 2009
On September 15, 2008, the world witnessed collapse of one of the world’s oldest and most respected investment banks, the Lehman Brothers. It led to a global financial meltdown that has seriously damaged the global economy.
Since September 2008, traders have witnessed how the most severe financial crisis in 60 years plundered the wealth and the glamor of the planet’s richest nations. Stock markets were down 40%, major banks all over the globe were surviving only on government support, and the world had entered a sharp decline phase of the global macro cycle, with rising unemployment and a collapse of house prices.
However, with all this bad news on the table, it is equally necessary to stress that every recession - including the one we are witnessing today - has to come to an end. That’s simply the way macro-economy cycles work. Without the decline, there would be no growth. In other words, no market appreciation can go on forever, there always must be a downphase and bottom happening somewhere, sometime…
Well, this cycle’s “somewhere and sometime” has certainly been planet Earth, September 2008 - March 2009.
As we enter Autumn 2009, there are clear signs evident in all developed countries (mostly , however, on the Old Continent) that he worst of the financial crisis seems to have passed. The first glimmers of economic recovery are visible in Germany and France. The European Central Bank has – in the eyes of many finance officials – emerged from its first big institutional stress test with its credibility enhanced. And there is a growing conviction that European policymakers, for so long divided about the virtues and vices of the free market and state intervention, are converging on a new balanced consensus…
Topics: News From Wall Street | No Comments »
Bernanke Sees Recession Ending !!
By Marek W. Stupka | August 22, 2009
FED chief Ben Bernanke told a gathering of economists and central bankers at a speech in Jackson Hole on Friday that the world is emerging from recession and showing better prospects for growth the rest of the year.
Bernanke, whose term as FED Chairman is about to end soon, with clear purpose to advertise own re-election added to the market-boosting statement a comprehensive monologue defending FED’s policies before and during the world’s worst financial crisis since the Great Depression, and did not fall short of emphasizing that a sweet great portion of how we got out of the pit can be attributed to him and him alone…
I certainly agree that Mr. Bernanke played his role as the FED’s boss in the battle against recession, mostly in terms of early accepting the tightening monetary policy. However, we should not forget that it was the same Bernanke and the same FED that failed to deploy supervising mechanisms over the financial and the housing markets that caused this recession to blossom in the first place…
In any case, all major instruments of the Financial Market jumped Friday as Bernanke’s speech and word that more homes were selling sent traders into the weekend optimistic about an economy recovery. Equity indexes posted their biggest gains early in the session after the National Association of Realtors said existing home sales soared 7.2% last month. EURUSD regained its bullish momentum short after, too.
On the fundamental front, I recommend traders focus on the consumer confidence, a very important indicator closely watched by the markets. It is a generally known fact that this recession is only to be ended by growing purchasing capability of an average consumer. The consumer confidence reading is due next Tuesday, right after the NY opening bell. Economists expect a reading of 48 for August, up from July’s 46.6. However, any surprise on the downside can spoil what Mr. Bernanke’s said so purposefully in his extensively cheerful speech…
Topics: News From Wall Street | 3 Comments »
Safe Haven No Longer Necessary ??
By Marek W. Stupka | August 10, 2009
After the Friday’s USD advance following the release of stronger-than-expected US unemployment data, some investors are beginning to believe that the greenback’s status as safe haven is beginning to dissolve…
Some analysts have had their say that due to encouraging actions from governments not to let another major institution to fall, the need for the US dollar to play the safe haven role has substantially diminished. They are arguing that buying of dollars is returning to economic issues rather than fear.
As for my view, I believe that more rational reasons to a currency exchange rate growth start to take over along with rising expectations that the central bank (respective to the country currency of which this applies to) might exit from its low interest rate policy sooner than expected. Among these reasons definitely are the yield differentials (responsible for the so-called “carry trades”), and the general fundamental strength based on macro indicators.
This exactly is being the case now with the US dollar, and the FED. As we are beginning to see global investors expecting the Federal Reserve to slowly abandon its tightening policy, chances are getting higher for the negative correlation between improving risk sentiment and a weaker dollar to break down. Note, however, that this is the case only during the expanding phase of the macroeconomy cycle (which, I believe, we are just entering). As soon as any consequent major event occurs that causes the markets to question its potential for growth, investors will always have a need to return to the safe haven principle and correlation.”
Topics: News From Wall Street | 2 Comments »
Markets End Month With Flying Colors !!
By Marek W. Stupka | August 1, 2009
The U.S. economy shrank at a slower than expected pace in QII, a sign that the worst recession since the Great Depression is slowly bottoming out. Gross domestic product contracted at a less-than-projected 1% annual rate after shrinking 6.4% in QI. Markets ended the month with solid gains..
Even though this reading was made for the US, it is not just America that is affected. The pace of the global economy contraction finally slowed. Company profits from IBM to Samsung signal the slump is losing steam as governments efforts to revive lending and stimulus packages (such as President Barack Obama’s stimulus plan) gain traction.
At the same time, however, the US GDP report showed that consumer spending, which accounts for 70 percent of the economy, shrank more than twice (down to -1.5% against -0.5% expected) versus the forecast. In other words, US and world corporations might finally be making more money than they were in the end of 2008, but it is not because they would produce more - it is because they save more!! Saving, at this point of the global economy cycle, many times equals job cutting. Thus, the real spending power of an American consumer (still perceived as the universal pillar and measure of growth) remains locked in the recession agony from past months, and it will take 3-6 months for it to recover. As for my personal prophecy, unemployment will step aboard the recovery train as the very least in line, resulting in a 6-9 months period for the Non-farm Payrolls to show distinctly positive numbers again.
World Markets Poised for an Upturn…
In any case, long-term technical picture of the world’s major financial markets like stocks and commodities is now strongly favoring bulls over bears. Take a look at 1W charts for the Dow Jones Industrial Average (DJIA) and NYMEX October Crude Oil Contract (CLV9) below. Both are posting evident bullish signals stemming from the long-term Convergence Scenario as well as from the Ichimoku Kinko Hyo analysis.
What only few traders realize is the fact that the major stock, commodity, and currency markets are correlated. Of course, there are technical differences to trading stock or commodity instruments of the Financial Markets (with commodity futures, for instance, you would have to pay margin and brokerage fees, only trade in the time window your chosen commodity exchange is open, follow a different set of fundamentals, etc.) but the most important thing it takes to trade these markets is..? You guessed it right! It is the technical analysis and the sophisticated trading strategies and systems we use when trading FX. In other words, you can trade stock indexes and commodity futures like DJIA and crude oil contracts in the same way as you trade FOREX. What’s even more interesting is that you can use past price action of one instrument to predict the future development of another. For more info please refer to the 1-on-1 FOREX Training materials…
If you would like to get unlimited access to all of the 1-on-1 Training’s resources, including the 3 back-tested trading systems we have used at Gepard Investments, Inc. for over 3 years now to generate consistent profits, simply click here and you will be taken to a comprehensive description site on how the course works. Feel free to send me an email before you apply!
Topics: News From Wall Street | No Comments »
Corporate Harvest Drives the Recovery !!
By Marek W. Stupka | July 16, 2009
Across the boards of the major financial instruments we see clear evidence of stabilization and bottoming out. The latest recovery driver? QII financial harvest of the biggest American corporations and banks..
Positive surprises on the earnings front are already boosting markets. Here are some examples: Intel reported results that surpassed expectations and also gave a forecast for current-quarter revenue that beat analysts’ estimates. Its stock surged 7.4 percent to $18.08 in extended trade. Jump in profit from Goldman Sachs forced the major stock indexes to climb already earlier more than 2 percent in anticipation of strong bank results. CSX Corp’s and Johnson & Johnson results also surpassed expectations.
JPMorgan reported record revenues in the second quarter as well as soaring investment banking fees drove profits in spite of swelling loan losses. The bank’s earnings beat analysts’ most bullish expectations, jumping 36 per cent and producing net income of $2.7bn, or 28 cents a share. Revenues climbed by 41 per cent in the quarter to a record $27.7bn.
Positive news like the above serve as catalysts of market sentiment and we are beginning to see investors’ risk appetite to slowly unleash again. Therefore, in the light of the above, we at Gepard Investments, Inc. prefer trading along with the euro bulls at the moment. This renewed euro-strength sentiment is also backed by the 1d and 4h EURUSD analysis which I am about to publish in my next technical post.
Topics: News From Wall Street | No Comments »
As Foretold, Dollar Continues to Shrink !!
By Marek W. Stupka | May 30, 2009
In a couple of my recent blog posts I have discussed the EUR-bullish outlook for the market (old posts can be found in the Archives of this blog). Those who took my advice to heart are now several hundred pips richer. Good old buck just did it again - shrink, I mean...
Another set of record-breaking price levels for the Euro paired against its major rival, the US dollar. The pair has just reached and significantly crossed the psychological resistance 1.4000. Interested in the fundamentals that triggered the aggressive dollar selling? Want to know what the catalyst was?
US GDP was revised up to -5.7% in Q1 from -6.1%, leaving the past two quarters as the worst in 50 years. The revisions reflect a change in gross private investment to -49.3% from -51.8%, a shift in exports to -28.7% from -30.0%, and a rise in the inventory change to -$91.4B from -$103.7B. Meanwhile, personal consumption was revised down to 1.5% from 2.2% due to a contraction in demand for nondurable goods and slower services growth.
These catalysts forced the greenback to fall to levels above the psychological Resistance 1.4000. Note, however, that many trade position stops are placed at this rather significant price level of the referential EURUSD currency pair. Therefore, do not expect the market to substantially cross above this line easily. Candles and bars might get a little shaky this week..
The bullish technical scenario in the 1W chart proved to work as smoothly as it was foretold in my earlier posts. In the 1W chart above [ click on the picture to get a bigger chart ] we can see that my EUR-bullish forecast was successful - AGAIN !! - and the price has just reached the 76,4% fibble at 1.4180.
Note, however, that at this point the long-term indicators for this pair are heavily overbought. This simple technical setup suggests a shaky movement on the north side of the indicator equilibrium in the days and weeks to come. The outlook is only powered by the fact that in this case the technical perspective agrees with the fundamental picture above.
In other words - I’d be a little more careful trading the pair long this time - the referential currency pair has just hit its long-term Resistance and will need more momentum to really break above it in a substantial way…
And, as usual, be advised that what is being presented to you here is a very simplified technical analysis, and you are under no circumstances advised to understand it as a trade signal or recommendation. To actually deploy a trade, you should have it backed by a full-scope technical examination, that we at Gepard Investments, Inc. like to call the Trading System, following a clearly defined Trading Plan.
Now, in order to master and deploy a working, back-tested GEPARD trading system (either short-, or mid-, or long-term) you need the access codes to enter the community of GEPARD traders. Feel free to send me an email if you have any questions about joining our community and participating in the 1-on-1 Training.
Topics: FOREX Trading Analysis, News From Wall Street | 2 Comments »
Banking Sector - Signs of Revival ??
By Marek W. Stupka | May 9, 2009
Apart from the fact that equity markets have been surprising all investment sceptics lately by posting higher than expected levels, there are some good news coming from the US banking sector as well that add another spark to the “bottoming-out-of-recession-is-already-happening” camp. And, as we all know, US banks is where it all began…
The Obama administration has given assurances US banks will be allowed to raise less than the $74.6bn in equity mandated by stress tests if earnings over the next six months will be higher than regulators’ forecasts. This agreement means some banks may not have to raise as much equity through share issues and asset sales as the market is expecting. It could also increase the incentive for banks to book profits in the next two quarters.
Banks will have about a month from now to announce their capital-raising plans, and 6 full months to put them to work.
This is a great, great news for all players in the banking industry (currently under the so called “Stress Test”), since if their operating profits will be greater than the government’s stress-case forecast for the second and third quarter, they would receive credit for the difference. This, in turn, would reduce their need to raise fresh equity from other sources.
As we are aware of positive news like the above (and not just one or two pieces of them..) blowing fresh breeze into the sails of the Capital Markets and serving as catalysts of market sentiment, we are beginning to see how the so called “risk appetite” of many investors slowly starts to unleash. Therefore, in the light of the above, we at Gepard Investments, Inc. prefer trading along with the euro bulls at the moment. This renewed euro-strength sentiment is also backed by the 1d EURUSD Ichimoku analysis which shows the price distinctly leaving the uncertainty of the Kumo cloud, and moving high into the bull territory.
Topics: News From Wall Street | No Comments »
Profiting on FOREX While Wall Street Slumps !!
By Marek W. Stupka | February 28, 2009
Friday has been another hectic day on Wall Street. Even before trading started, two major fundamental stories had influenced traders’ sentiment in a major way. First one was the partial nationalization of the Citigroup which - to put it mildly - left many people feeling quite uncomfortable and second one was the revised US GDP for the last quarter of 2008.
The original estimate for contraction of the Gross Domestic Product growth in the USA in the last 3 months of 2008 was 3.8%. This has now been pulled down to 6.2%. Such abrupt revision represents the sharpest decline in GDP since 1982. In all this terrible piece of news there is, fortunately, one ray of hope: if we scrutinize the details of the report we find that the GDP revision was caused partially by a drop in inventories which implies that there will be less need for cuts in inventories and production this year. In any case, however, this is still a very negative set of data.
At about the same time, the US Government agreed to become the biggest single shareholder in Citigroup, in the latest attempt to save the ailing financial group and to shore up the country’s banking system. The partial nationalization will give the government a stake of up to 36% in the troubled group, trying to recover a fading giant that once used to be among the world’s largest financial institutions.
Later on in the afternoon, a new melancholy has been imparted into the Wall Street blues during an announcement that General Electric, once the US biggest company, is slashing its dividends for the first time since 1938.
These worrying reports came out after weeks of fundamental data strings falling almost entirely in the negative territory. Wall Street had no other choice but to get out of positions in the troubled equities which implied the S&P to close below 735 - the lowest level this index has posted since December 1996. DJIA closed near to 7,000 which is also below the levels from November 2008.
Now, let’s move from the unpredictable world of equity trading to the fairly recognizable universe of FOREX trading. If we look at Friday’s price action in all FOREX majors we see nothing else but a series of predictable price patterns. EURUSD has been posting moves within a distinct channel (or rather trannel, as we like to call it here at GI), creating a perfect playground for applying the Sherlock Market Personality rules. GBPUSD acted very much in the same fashion, only moving a lot more, as usual. USDJPY has been topping on its extensive gains, preparing ground for the Alexander Market Personality. Etc. We have seen no dramatic volatility or brutal price moves into the long-uncharted territories as was the case with shares all over the world.
If you wonder how to recognize various market personalities and profit from this recognition using my propritary CONFIRMATOR (mid-term) Trading System, or you you want to know more about The CANAAL (short-term) or The PERSONALIZED ICHIMOKU Trading systems, you are welcome to drop me an email with your questions. N.B. Note that answers to your specific trade setups might be limited and you might be recommended to apply for the 1-on-1 Training prior to getting my full attention…
Topics: News From Wall Street | 2 Comments »
Citi Bank, Merrill Lynch, and the Inauguration!
By Marek W. Stupka | January 17, 2009
It’s been a busy week for stock traders. Citigroup as well as Merrill Lynch, which just merged with Bank of America, reported huge losses for the last quarter of 2008. FED agreed to inject billions of dollars in these banks to save them from catastrophy…
Merrill Lynch – owned by Bank of America – suffered a $21.5bn operating loss as the value of mortgage-backed assets plunged in the past three months of 2008. Bank of America which finalised an $18.8bn takeover of Merrill two weeks ago received a $20bn capital infusion and a backstop on $118bn of troubled assets. BoA told the US Government in December that it would not be able to close the deal without help.
The biggest US commercial bank reported a $2.4bn loss in a quarter Merrill’s disastrous performance. Its shares fell nearly 14 per cent.
Citigroup deepened the depth of problems in the US banking sector by reporting an $8.3bn net loss, its fifth consecutive quarter in the red. The troubled financial group suffered nearly $28bn in writedowns and loan loss provisions in 4Q of 2008.
Citi’s loss for the year 2008 was more than $18bn. The company came up with a Government backed plan, also called “good bank-bad bank”. The plan is to isolate some $800bn worth of unwanted assets and businesses into a separate unit called Citi Holdings. This unit will be fully backed by the Government. Citi’s key businesses of commercial, investment and retail banking will be housed in a unit called Citicorp managing about $1.1 bn. By doing this, the bank returned to its original name from about 10 years ago to cover its healthy assets and continue in its daily business.
According to Wall Street stock traders, last week’s only highlight for them was the prospect fo the inauguration of Mr. Obama who will become the first US Afro-American president. With Mr. Obama taking the office, many expect the system to perform better, at least in the mid- to long-term.
See why it pays choosing your traded instrument wisely? If you are a stock trader and last week you have experienced another one of those fierce setbacks, I strongly recommend you to quit the unpredictable world of stock trading and join our FX trading community. You are warmly welcome to apply for the 1-on-1 FOREX Training, described by many as one of the best educational interfaces on trading on the net, and learn how to trade this predictable, fascinating market with consistent profits.
Topics: News From Wall Street | No Comments »
Detroit Gets the Government Money !!
By Marek W. Stupka | December 31, 2008
US car makers were finally able to take the long expected sigh of relief. Their shares skyrocketed following news that the U.S. government agreed to bolster GMAC, the former financing arm of General Motors, with a nice, round 6 billion dollar aid …
Late on Monday, the U.S. Treasury Department offered funds from the TARP (Troubled Asset Relief Program) to GMAC, the financing firm of General Motors that is still 40% owned by the auto making company.
The Treasury commited itself to buy a $5.0 billion stake in GMAC and will give GM up to $1.0 billion to invest in the financial firm.
This step was taken following a very emotional discussion in both US Government and Senate, and is supposed to facilitate auto financing for consumers and mute fears of insolvency for a company that has struggled under the global economic slowdown.
Topics: News From Wall Street | No Comments »
FED’s Rate Slash Causes the Dollar to Fall !!
By Marek W. Stupka | December 18, 2008
The dollar’s fall against the euro so far this week has been the largest and steepest since the inception of the single currency in 1999. Greenback came under renewed selling pressure after the Federal Reserve decided on Tuesday to slash US interest rates to zero.
Consequently, the dollar declined to a 13-year low against the Japanese yen and a 10-week low against the European single currency. And so, it seems that the greenback strength and safe haven status which has been the case in the currency markets since this Summer is now nothing but history.
The Fed decision drove short-term interest rate differentials between the US and the eurozone back to the highs of earlier this year. This simply means that interest rates in Europe are substantially higher than those in the US again.
As we are well aware of from the past decisions of major central banks, interest rate cuts as dramatic as the one we’ve seen on Tuesday have not only immediate impact on the markets, but also serve as catalysts of market sentiment in the days and weeks to come. Therefore, in the light of the above, we at Gepard Investments, Inc. prefer trading along with the euro bulls at the moment. This renewed euro-strength sentiment is also backed by the 1d EURUSD Ichimoku analysis which shows the price distinctly leaving the uncertainity of the Kumo cloud, and moving high into the bull territory.
Topics: News From Wall Street | 2 Comments »
FED & Treasury Join Forces in Boosting Loans !!
By Marek W. Stupka | November 25, 2008
US government officials have found a new way to stimulate credit markets without having to spend much of the $700 billion money set aside in the bailout plan. They came up with two new programs aimed at boosting lending to consumers and small businesses and supporting the market for mortgage-backed securities.
Under a plan announced today, the Fed will issue as much as $800 billion in one-year loans to holders of new, top-rated, asset-backed securities in an effort to boost consumer lending. The idea is to provide banks with more liquidity so that they can make the so much wanted auto loans and student loans and issue credit cards. In addition, the Treasury lead by its Secretary H. Paulson will use $20 billion from the $700 billion pool in the Troubled Asset Relief Program (TARP) to guarantee the loans.
Click here to read the full text of comments on the TARP program made by Mr. Paulson today.
It seems that the US Government is doing everything in its powers to support the super thin investor confidence found everywhere in the world these days (e.g. the CitiGroup bailout). The only concern about these activities that is still lingering in the traders’ squawboxes is that the government officials in fact use other huge loans to cover up for the gigantic ones that has gotten the world into this mess. FED’s answer? There is now other way, at least not in the short term…
Well, if you’re desperate about getting beyond the toxic equity or bond markets and find something worth investing in these profoundly turbulent times, I definitely invite you to the world of FOREX trading. The currency markets have shown great amount of bulletproofness during the so much talked about “Shoctober 2008″ and truly make for a perfect alternative when it comes to capitalizing on your money in the weeks and months to come.
To give you the proof that what I am saying is substantial, please download my Trade Journal in order to see our latest trading progress here at Gepard Investments, Inc. Once you, like thousands of other traders worldwide, make up your mind about capitalizing on your own money in the FOREX markets feel free to email me with your application to join my 1-on-1 FOREX Training, the Internet’s most comprehensive course on how to trade currencies with consistent profits.
Topics: News From Wall Street | No Comments »
FED’s Merciless Interest Rate Cut
By Marek W. Stupka | October 30, 2008
On Wednesday, the US Federal Reserve slashed interest rates 50 bp bringing them down to 1.0%. The rate cut is intended to ease the pain of an economy that has “slowed markedly”, and has brought interest rates to the level only achieved before once - amid the 2003 deflation scare.
The Federal Reserve Chairman Ben Bernanke and his colleagues voted unanimously to cut their target for short-term interest rates to 1%. This level is supposed to offset the recent sharp tightening of credit conditions that threatens to plunge a weakening US economy into a recession.
US stocks immediately responded to the Fed’s move in a down-swing price action, but then moved higher. Investors also seem to be encouraged by reports that the US authorities might soon announce a new mortgage guarantee program to help restructuring home loans.
In parallel, there have been important things happening in the FOREX backyard, too. Japanese yen strengthened against greenback on expectations of a government bailout, reaching 98.00, the highest level since 1995. Apart from this move, the US dollar is now again widely perceived as “safe haven”, mostly due to liquidity concerns of the big hedge funds (most hedge funds are denominated in USD). These two trends generated A. Rebirth of the so called “carry trade” - if you don’t know the meaning, just search this site for the term, B. Excellent trading opportunities with any of the major currency pairs that includes the USD.
In these dramatic pre-elecion times, every trader needs to be aware of the true scope of trading opportunities out there. However, with every trading opportunity there is a certain level of risk involved. As the FOREX market has proven over the last weeks of turmoil it posts relatively low risk levels compared to other instruments. Now more than ever we see traders chosing currencies to be their playground (instead of risky equities or bonds).
If you have just found yourself in the lines above you are welcome to join my FOREX 1-on-1 Training no matter what the size of your planned investment is. Over the years of providing this unique training environment I have worked with professional traders as well as small individual investors. Some of my trainees even wrote “housewife” when asked what they do for a living. So the number of the students is high, but so is the comprehensiveness and benefit of the course. Feel free to apply today by sending a simple email explaining your trading experience, and your investment goals.
Topics: News From Wall Street | 2 Comments »
USA As a Giant Credit Card?
By Marek W. Stupka | September 30, 2008
If you look at the thinkflow and actions (some fortunately stopped from being taken) of the current American Government you swiftly get the impression that every mess the country finds itself in can simply be erased by just another ton of borrowed money. The American economy can always be handled as the most gigantic credit card in the world. Or, can’t it?
Unfortunately, no economy can afford to keep this attitude forever, and ever, end ever…, without having to face the music some day. There definitely are limits to the philosophy of extending the nation’s debt and calling it good for the system. Yesterday’s rejection of the Bush/Paulson bailout plan by the U.S. House, and the consequent fall in the stock markets, was a clear indication of this simple truth.
If you think about it, there are three pretty straightforward reasons to the current state of the US economy. They are: 1. The borrow-the-buck-and-don’t-think-about-tomorrow philosophy of a typical American consumer, and government for that matter; over the past few years promoted, sustained, and taken to even higher levels, by the US mortgage banks and their agents, 2. The war in Iraq which turned out to be as bizarre as it is money-consuming, 3. The current downslope of the global economy cycle.
An experienced Wall Street stock trader said that “…what markets really need right now is the atmosphere of decisiveness.” It is not the money. Pumping the borrowed cash into the economy’s pipes would be like giving an aspirin to a patient who’s got a developed cancer. Wall Street simply needs leadership, somebody in the presidential chair who would announce the war against indebtness and (at least pretend that he) know(s) what he’s doing. This is the only prescription to cure the illness and get in the prosperity zone again…
However, Mr. Bush’s political capital seems to be spent to the very last penny, and the country is on the edge of the next presidential elections. So the emotional race of the two candidates only adds fuel to the indecisiveness and uncertainty that has possessed America in the past weeks.
I GET FEEDBACK FROM STOCK TRADERS AROUND THE WORLD, SOME REALLY TERRIFIED AND EMOTIONALLY AS WELL AS FINANCIALLY EXHAUSTED. PLENTY DECIDE TO WAIT TILL THE ELECTIONS, OTHERS QUIT TRADING FOR GOOD.
HOWEVER, NOTE THAT FOREX TRADING HAS NOT EXPERIENCED ANY PLUMMETING LIKE WE’VE SEEN IN THE STOCK MARKETS LATELY. OBSERVE THE CHART ABOVE! CAN YOU SEE HOW THE CURRENCY MARKETS RESPONDED TO THE EVENTS OF THE PAST WEEKS? NO SUDDEN AND CHAOTIC VOLATILITY, JUST A SERIES OF TRADABLE TECHNICAL PATTERNS. AND THUS, MY ANSWER TO STOCK TRADERS IS ALWAYS THE SAME AS IT HAS BEEN FOR YEARS:
“QUIT THE UNPREDICTABLE AND CHAOTIC JUNGLE OF STOCK (AND BOND) TRADING, AND SWITCH TO TRADING CURRENCIES. TRADE FOREX AND YOU CAN EVEN CAPITALIZE ON SITUATIONS LIKE THE ONE WE SEE TODAY…”
Topics: News From Wall Street | 3 Comments »
Currencies - One of the Safest Markets Today !!
By Marek W. Stupka | September 19, 2008
This week, fear has dominated the global stock markets. Black Monday and Terrible Tuesday tragedies described in my last post were followed by even deeper financial crisis, despite billion-dollar injections of major central banks. Newspapers around the world published picture of a Wall Street trader pressing a cellphone to his ear and crying in despair…
Stocks of several US, EU and Asian financial institutions felt to record lows, domino-effected by tragedies of the Lehman Brothers, AIG (mercifully helped by the US Government), Goldman Sachs and the like. Major stock indexes experienced chaotic volatility, pledging many traders’ accounts.
HOWEVER, THE LATEST DEVELOPMENT IN THE FOREX MARKETS BROUGHT NOTHING ELSE BUT A SERIES OF PREDICTABLE TECHNICAL PATTERNS!
The 4h EURUSD chart above shows a “classy” descending channel breakout followed by a triangle formation that is close to perfection! This exemplary and easily tradable triangle has been formed this very week, t.m. in the same period of time when stock and bond markets posted unpredictable, chaotic, and aggressive moves, causing that guy from the magazine photo to cry a river full of bitter tears…
Moreover, the 1d EURUSD chart has posted a beautiful correction towards the first Fibonacci level, so often seen in any non-turbulent market. And it’s not just the EURUSD. Check out the AUDUSD, for instance!
This article was written to prove how safe is the market we operate in. Want the reasoning? Simple. Our market is not influenced by the outcomes of specific companies or banks, rather by the outcomes of the world’s most prosperous countries. These are mostly scheduled in the economy calendars, leaving as small room for unexpected surprises as possible. In addition, world’s biggest economies are very hard to file for bankruptcy!
Apart from the above, FOREX has other advantages as well. Today, I want to challenge you to switch to trading currencies, whatever other market you trade (except maybe T-Bills, commodity futures, and some selected options). FOREX simply is one of the SAFEST MARKETS to trade! If you want to learn FOREX trading 1-on-1, write me an email and we will work things out for you whatever mess you’re in…
Topics: FOREX Trading Analysis, News From Wall Street | 2 Comments »
Wall Street Turmoil - Impact on the FX Market!
By Marek W. Stupka | September 16, 2008
Today, the global Financial Markets have experienced a turmoil that some describe as the beginning of a collapse comparing to the Asian Financial crisis of 1997/98, the Savings and Loans crisis of the 1980’s and 1990’s, and some say even the Great Depression. Richard Quest of CNN reported from London that stock traders in the city have already found a name for today’s market behaviour - “The Terrible Tuesday”.
Wall Street has truly been shaken at its very roots. Lehman Brothers, the world’s third largest securities firm, filed for bankruptcy due to a drain on capital and liquidity. Stocks of AIG, the biggest insurance giant in the US, fell under $4.00! Goldman Sachs Q3 earnings sank 70%!
As a result, the primary risk asset, the benchmark Dow Jones Industrial Average, surged over 500 points to close below 11,000 for the first time since July 17th. The S&P Volatility Index (VIX) tumbled more than 30 percent for the first time since the March. The yield on the two-year Treasury note fell an unbelievable 51 basis points on the the Federal Reserve interest rate cuts expectations; and even the crude dropped to $92 per barrel (this move, however, was predictable - see my previous post).
NOW, WHAT WAS THE INFLUENCE OF ALL THIS ON THE FOREX MARKETS? Here’s the thing you have to remember. As a rule, Wall Street turmoils only have MUTED immediate effect on currencies. This is one of the GREAT ADVANTAGES AND BEAUTIES of trading FX. You don’t have to be afraid of sudden price spikes caused by unexpected fundamental events like the ones you see above. These news ALWAYS hit the stock & bond markets first.
In contrast to the obvious crisis and unexpected volatility in Wall Street, today’s currency trading has not been much different from just another smooth trading day. In fact, the major fundamental story of the FX day - the scheduled FED interest rate decision - came in line with expectations and caused only a few, price-limited, technically predictable, and easily tradable moves.
See why it pays choosing your traded instrument wisely? If you are a stock trader and today you have experienced another one of those fierce setbacks, I strongly recommend you to quit the unpredictable world of stock trading and join our FX trading community. You are warmly welcome to apply for the 1-on-1 FOREX Training, described by many as one of the best educational interfaces on trading on the net, and learn how to trade this predictable, fascinating market with consistent profits.
Topics: News From Wall Street | 2 Comments »
Euro Sabotaged By Two Jean-Claudes!
By Marek W. Stupka | September 4, 2008
The ECB President Jean-Claude Trichet’s lack of commitment towards future monetary policy caused the single European currency to lose 200 b.p. against its major counterpart, the US dollar. During the press conference, given 45 minutes after the ECB announced that it leaves the central bank’s interest rates unchanged at 4.25%, Mr. Eurobanker’s “no bias” comments left investors wondering about the future fate of the Euro Zone economics as well as the next ECB decision.
Moreover, at about the same time, another Jean-Claude (chairman of the Euro Zone finance ministers Jean-Claude Juncker) announced that the Euro Zone economic growth will slow to between 1.0-1.3 percent this year from 2.6 percent in 2007.
Juncker also revealed that in the first half of 2009 the economy could slow down even more. The addition that there is a chance of a pickup in growth in the second half of next year somewhat failed to sound optimistic, as it seems.
Today, both Jean-Claudes seemed to willingly undermine their own currency. However, the price action they caused in the currency markets was a blessing for all active traders, my trading team including - generating another straight set of profits…
Topics: News From Wall Street | 4 Comments »
Is This the Recovery of the US Economy?
By Marek W. Stupka | August 30, 2008
The American dollar recovered from its temporary losses after a government report showed that the U.S. economy expanded faster than expected. The Commerce Department in Washington announced that in the second quarter of 2008 the American GDP increased at the annual pace of 3.3 percentage points which truly is a surprisingly positive news when compared with the original estimate of 1.9 percent.
The U.S. economy has been stimulated by two major macroeconomy injections: 1. Better exchange rate of the U.S. dollar against its major trading partners and 2. Surge in continental exports (in fact, over the last 30 years this contributed the most to American growth). As a result, the Q2 2008 U.S. trade deficit shrank to $376.6 billion and added 3.1 percentage points to the GDP growth, which is the highest number since 1980.
Yet, boldly claiming that the U.S. economy is on the rise again would be preliminary, if not unwise. There are other important elements of a country’s economic health. Take this figure, for example: the total number of unemployed active people in the USA stands now at more than 3.4 million - the highest number since November 2003. Or take the impact of crude oil prices: as they edge higher concerns over the U.S. financial system increase, with talk of substantial job losses at Lehman Brothers. Moreover, a story in The Wall Street Journal suggested that Jefferson County, Alabama, is facing what could be the largest ever municipal bankruptcy. In addition, the global economic slowdown outside the United States is also likely to weigh on the American growth in the weeks and months to come…
Topics: News From Wall Street | 4 Comments »
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