Feb 22, 2010

Daily Markets - Financial News And Opinions

Daily Markets - Financial News And Opinions

Price Of Gold Now Dictated By The Euro, Rather Than The US Dollar

Posted: 22 Feb 2010 03:50 AM PST

The U.S. dollar rose, commodity prices dropped and stocks fell last Friday after the Federal Reserve unexpectedly lifted an emergency lending rate for the first time since the financial crisis.

The dollar hit an eight-month high against a currency basket, while gold prices rose as investors bought the metal to hedge against paper currencies and debt default risks in Europe. Gold futures ended on Friday with a weekly gain of 3.1% at $1,122.10 an ounce.

Gold’s Retreat

Gold had … [visit site to read more]

Forex Trading Review For 22/02/2010

Posted: 22 Feb 2010 03:01 AM PST

USD Dollar (USD)

The Dollar has finished lower versus most majors after comments from Fed officials who said the change in the lending rate doesn\’t signal any change in the outlook for the economy or for monetary policy. CPI came out weaker with 0.2% versus 0.3% forecast, disappointing investors. NASDAQ and Dow Jones gained by 0.1% and 0.09% respectively as the Dollar weakened, finishing the week with their fourth straight gain. Crude Oil gained by 1.2% closing at 80.14$ a barrel. Gold … [visit site to read more]

Will Last Week’s Pop In The US Stock Market Last?

Posted: 22 Feb 2010 02:01 AM PST

This week we touch a bit on the subject of inflation because the Producer Price Index (PPI) for two of the past three months has been alarmingly high, and sooner or later that will put pressure on corporate profits or consumer pocketbooks. There is always an ugly side to inflation if the Fed allows it to get out of control.

Round one in the Fed’s inflation fight was last week’s increase in the Discount Rate, which is the rate that banks must pay to borrow from the Fed. One small step for … [visit site to read more]

Stock Picks For Monday: Proctor And Gamble, Fifth Third Bancorp, GSI Commerce

Posted: 22 Feb 2010 01:53 AM PST

GSI Commerce Inc. (NYSE:GSI)

This is another interesting play. GSI formed a bottom reversal pattern in early February and subsequently tested $26.12 breakout point and failed to find support on 13,26D MA. During the long black candlestick sell down, the volume was relatively lower and high volume on 17 Feb signified that potentially buyers have come in to support the stock. Now it is just on a rebound trend and i would look at it to test $26 again for breakout.

Proctor and Gamble … [visit site to read more]

Forex Trading: Eur/Usd Trading Below 100 Hour M/A

Posted: 22 Feb 2010 01:13 AM PST

Rumors earlier in the session of good sellers of Eur/Usd around 1.3625-30 level (notably the BIS) have pushed the pair below 1.3600. It closed the last hour of trading below its 100 hour M/A of 1.3621 which confirms a bearish sentiment in the near term. The pairs next support level lies at 1.3573 which is the 38.2% Fibo of move up from 1.3444. More solid supprot lies at 1.3524, the 61.8% Fibo. If we do move back to upside the pair should be hard pressed to get much momentum through that 100 … [visit site to read more]

How Currency Manipulation Creates Jobs In America

Posted: 22 Feb 2010 01:01 AM PST

WSJ - President Obama and other administration officials argue that the Chinese currency is undervalued. That makes Chinese exports artificially cheap in terms of other foreign currencies, contributing to the U.S.’s large trade deficit with China and, they say, depriving Americans of jobs. Treasury Secretary Timothy Geithner said during his Senate confirmation hearings in early 2009 that Mr. Obama believed China was manipulating its currency.
Don Boudreaux responds here and … [visit site to read more]

Video: MBA: Mortgage Delinquencies Fall In 4Q Of 2009

Posted: 22 Feb 2010 01:00 AM PST

The Mortgage Bankers Association said deliquencies declined in the last quarter of 4Q. … [visit site to read more]

Hayek Vs. Keynes Rap Song

Posted: 22 Feb 2010 12:14 AM PST

A friend of mine sent me the following link called Fear the Boom and Bust:

It’s an amusing but instructive video of the dichotomy between the philosophies of Keynes and Hayek, of the Austrian school of economics. It also starkly highlights the philosophical divide between policymakers and investors.

Policy paralysis
The Keynes vs. Hayek debate is illustrative of the investor dilemma of the inflation/deflation call. If the two schools “have been going back and forth for a century” and the … [visit site to read more]

Are You Disliking Microsoft Stock For The Wrong Reasons?

Posted: 22 Feb 2010 12:01 AM PST

I had a fellow investor tell me one day that they would never buy shares in Microsoft (NASDAQ:MSFT) as their software is so widely pirated. I’m not a big fan of Microsoft stock but I’ve heard that reason given before and it is just silly- let me tell you how it works.

Microsoft widely subsidizes licensing for high schools, universities and colleges. They also provide university bookstores with deeply discounted licenses for their products to sell to students. This puts the product front and … [visit site to read more]

Three ETFs To Watch This Week: XLI, OIH, EWZ

Posted: 22 Feb 2010 12:00 AM PST

Markets trended upwards last week as investors were encouraged by lower than expected CPI numbers which led some to believe that the Fed will hold off on raising rates for the time being. Although earnings season is winding down, there are several key companies that will be reporting this week including Target, FirstSolar, and Home Depot. Below is a look at three ETFs that could be on the move this week amidst earnings reports, data releases, and continued weakness in the euro zone:
1. … [visit site to read more]

The Fed’s Discount Rate Increase: The Context

Posted: 21 Feb 2010 11:01 PM PST

To understand last Thursday’s increase in the Fed’s discount rate, one must review its context in recent history. The Fed’s first policy action during the mounting financial crisis in the fall of 2007 was a half percentage point reduction in its discount rate from 6.25 percent to 5.75 percent. While this action surprised most observers who had grown accustomed to focusing only on the Fed’s target Federal Funds rate, it made sense because the discount window and the discount rate were the … [visit site to read more]

The New Age Of Natural Gas

Posted: 21 Feb 2010 10:01 PM PST

A new technique being used to drill through a type of rock known as shale has led to a surge in domestic natural gas production over the last three years and enabled the United States to overtake Russia recently as the world’s No. 1 producer of natural gas.

As a result, we are seeing a remarkable turnabout in energy geopolitics: as U.S. natural gas reserves have soared thanks to advanced drilling methods, Russia’s goal of establishing a world gas cartel patterned on OPEC has … [visit site to read more]

How Many Times Will The SPY Repeat The Same Pattern Intraday?

Posted: 21 Feb 2010 09:01 PM PST

Maybe you’re asking the same question as I am:  “How many times will the SPY repeat the same script/pattern?”

What pattern is that, you ask?  Take a look at my prior post:

“Three Days in a Row Yields SPY Pattern Profit… or Peril.”

And… it happened again today (February 19, 2010).

The general script is as follows:

Morning Weakness
Morning Rally into 20/50 EMA confluence
Break Through EMA confluence
SHARP rally higher into new highs of session
5-wave Fractal into … [visit site to read more]

If You Can’t Wait For A Diamond ETF, Here Are Indirect Ways To Get Diamond Exposure

Posted: 21 Feb 2010 08:01 PM PST

Diamonds are a girl’s best friend, but can they make the grade with investors? As developing nations see their middle classes grow in ranks, a diamond exchange traded fund (ETF) may be an appealing idea. For now, here are two ways to get your diamond exposure.

The diamond market is very volatile. Since global diamond production is declining and prospects of finding new mines are slim, this may lead to a solid reason that a diamond ETF may be just what the gem market needs. If you can’t wait … [visit site to read more]

Rydex Market Timers: Making Bearish Bets

Posted: 21 Feb 2010 07:52 PM PST

Figure 1 is a daily chart of the S&P500. The indicator in the lower panel measures the ratio of the amount of assets in the Rydex bullish and leveraged funds relative to those funds that are bearish and leveraged.

Figure 1. S&P500/ daily/ Rydex Bullish and Leveraged v. Bearish and Leveraged

The current value of the indicator stands at 0.80. Of note, this appears to be an isolated bearish bet as the assets in the Rydex Money Market Fund are decreasing not increasing. Typically, as a … [visit site to read more]

Set To Move In The Wrong Direction

Posted: 21 Feb 2010 06:47 PM PST

I’ve been surprised by the extent to which crime has remained subdued. In Financial Armageddon, I argued that deteriorating economic circumstances and aggressive cutbacks by state and local governments would not only encourage criminals to engage in more bad behavior, but would also lead to an increase in illegal activity among formerly law-abiding but now desperate citizens. So far, at least, that has not been the case. A report in Time magazine, “What’s Behind America’s Falling Crime Rate,” … [visit site to read more]

Singapore Stock Market Update For Friday 19 February

Posted: 18 Feb 2010 06:02 PM PST

Morning Highlights
The STI opens flat at 2772.03.
Genting Singapore saw its lowest close yesterday since August 28,  plunging 6.9% dod to $0.950. This is the third consecutive day the stock has fallen, taking its losses in the last three days to 12%. Though there is a buy opportunity based on the setups formed, we suggest to trade with small risk if it triggers.

To Buy Genting Singapore at 0.94, Stop Loss at 0.895 and Take Profit at 0.985 (Small Risk) – Triggered

News Updates

The … [visit site to read more]
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