The natural gas market cooled down as the natural gas ETF United States Natural Gas (UNG) plunged by 12.5% since the beginning of the month. The oil market also loosened up as crude oil prices tumbled down by 11% during…
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The post Has the Weakness in the Oil Market Fueled the Decline of UNG? appeared first on FX FOREX.
At the end of QE3, stocks continued higher on the reported GDP growth and the S&P 500 tagged the underside of the 2,000 index target.
Let’s update our levels and note the top trending stocks so far in today’s post-Fed session:
After a logical sell-off from a knee-jerk reaction to yesterday’s “End of QE3″ announcement (see yesterday’s post), stocks traded higher and broke sharply higher on a Bull Flag pattern earlier this morning.
The result was a short-squeezed impulse toward the 2,000 index target, at which point the S&P 500 turned lower and traded into the 1,990 support confluence.
For now, we’re monitoring the neutral zone between 1,990 and 2,000 with a breakout above 2,000 setting the stage for a future rally to new all-time highs… or a move under 1,990 targeting the 1,980 or even 1,975 downside targets.
Sector Breadth (after the Fed) revealed another bullish picture:
The Defensive Sectors took the lead today with Energy – yesterday’s leader – becoming today’s laggard.
Still, we see relative strength across the board with almost all sectors reporting more than 70% of stocks positive.
We have potential bullish trend continuation plays in the following stocks:
Bristol-Myers SQUIBB (BMY), AmeriSourceBergen (ABC), MasterCard (MA), and the big-winner Visa (V).
Potential downtrending candidates exist in stocks showing relative weakness today:
Avon Products (AVP), Intel (INTC), Ball Corp (BLL), and Trip Advisor (TRIP).
Corey Rosenbloom, CMT
Afraid to Trade.com
Follow Corey on Twitter: http://ift.tt/178Lhrq
The post Fed Aftermath Market Update and Stock Scan for October 30 appeared first on FX FOREX.
Major commodities including gold, silver and crude oil resumed their downward trend, while the U.S. gained some of its losses back from earlier this month. This week the main events will revolve around the before last FOMC meeting for the…
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The post Financial Market Forecast for October 27-31 appeared first on FX FOREX.
The recent weakness in the U.S. equities lead the news cycle as its also coincided with selloffs of U.S. dollar and recovery of precious metals. This week, several key reports will be released including: U.S. CPI, U.S. new home sales,…
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The post Financial Market Forecast for October 20-24 appeared first on FX FOREX.
Volatility, the critical ingredient investors need to trade, started to gradually creep back into financial markets late in the third quarter. That prompted idle traders worldwide to take positions once again. But is that market volatility sustainable as 2015 inches near? It depends on three market-moving factors: interest rate divergence, geopolitical events, and global growth expectations.
The U.S. Federal Reserve and the Bank of England (BoE) are the two major central banks currently sharing the lead on expected interest rate hikes. Not too long ago it was the Old Lady alone that had investors guessing as to when a rate hike would be announced. But Governor Mark Carney has turned dovish recently, influenced by global economic weakness, low inflation in the U.K., and the eurozone’s abysmal economy.
The Fed continues to confound the market as to when it will make its move. Chair Janet Yellen let it slip at her debut press conference a few months back rates could be raised six months after the end of the Fed’s bond-buying program. With the Fed’s current round of quantitative easing (QE) ending this month, the tightening cycle could begin as early as the spring of 2015. However, some Fed members have issued statements that the central bank needs to be patient and raise rates only when necessary while others are urging the central bank to start the rate hike cycle.
European, Japanese Central Banks Equally Challenged
Meanwhile, the European Central Bank (ECB) and the Bank of Japan (BoJ) are wading into unknown territory. The ECB is fighting a deflationary environment as growth proves elusive in the eurozone. If there’s to be a eurozone QE program, European leaders must agree on its necessity and that is no easy feat. Especially when the eurozone’s economic powerhouse, Germany, continues to push an austerity agenda that counters the much-needed stimulus.
The BoJ was a strong supporter of Abenomics in 2013 but this year was a different story as the central bank remained in the sidelines. An increase in stimulus is expected from the BoJ to counteract the effects of the sales tax hike Tokyo introduced last April.
In general, interest rate divergence from major economies will boost the demand for currencies from high-yielding nations. Stimulus and weaker currencies will aid the recovery of lagging economies in Europe and Japan. This of course can only happen if both camps stick to their individual policies and geopolitical or emerging market demand does not disrupt expectations as they have done in the past.
A World in Turmoil
The list of geopolitical risks continues to grow and some of the events will have a greater impact on the market than others.
From the seemingly unending military dispute between Ukraine and Russia, the Islamic State’s barbaric rampage in the Mideast, the plight of pro-democracy protestors in Hong Kong, and Catalonia’s desire to separate from Spain, to the alarming spread of the Ebola virus, there’s no shortage of event-risks for investors to bear in mind.
In terms of political upheaval within the Group of Seven, the U.K. general election next May is the most relevant to volatility as Prime Minister David Cameron’s government faces an uncertain outcome. Midterm elections in the U.S. and a general election in Canada next year are unlikely to be as stirring.
Global Growth Expectations Muted
The International Monetary Fund, the World Bank, and the Organization for Economic Cooperation and Development have all cut their growth forecasts for 2014 and 2015. Here divergence among recovering economies is clear as the U.S. and the U.K. lead the developed world with Europe and Japan at a standstill. Emerging markets continue to struggle trapped between diminishing foreign direct investment that is diverted to safe-haven assets as major central banks keep the markets on edge, and unfolding geopolitical events diminish appetites for riskier investments.
Stunted global economic growth has also reduced the demand for commodities. Base and precious metals prices have fallen as supply overshoots demand. Crude oil prices in particular have been hit hard by a sluggish Chinese economy. It remains to be seen if the Organization of the Petroleum Exporting Countries’ supply constraints will drive up the price yet again, especially after the U.S. has increased its productions due to technological advances.
The post 3 Things Driving Financial Market Volatility in 2015 appeared first on FX FOREX.
In the video below, Mike Bellafiore is interviewed before Friday’s open by Benzinga- #PreMarket Prep Show. Mike discusses:
1) Market levels that may signal the end of the market’s uptrend
2) His favorite trade: The Trend Trend Changing Fundamentals Trade
3) What and how to trade when the volatility rises
*no relevant positions
SMB Capital – Trading Education
The post An Interview with Mike Bellafiore: His Favorite Trade, Trading Volatility, and Key Market Levels appeared first on FX FOREX.
At the halfway point today, we’re balancing the odds of another bullish reversal off support against the possibility of a continuation of the persistent selling pressure we’ve seen lately.
We’ll start with our chart of the S&P 500 for clues:
For additional commentary, see this morning’s update on “Planning Another Possible Intraday Reversal from Positive Divergences.”
The main idea is that we may see another repeat performance of what we saw October 8th when price touched a new low against “triple” positive market internal divergences.
There’s no guarantee price will once again rally higher but do focus on this potential bullish outcome.
The market would be an outright, aggressive short-sale under 1,900 again.
Sector Breadth reveals a Balanced Bullish perspective:
Sector Strength today concentrates in Financials and Utilities which sends a mixed (yet balanced) perspective.
We see no sector deviating from others except for Energy which is today’s weakest performer.
Aggressive traders may look for a reversal and to play bullish stocks into the close:
Southern Co (SO), Wisconsin Energy (WEC), Ameren Corp (AEE), and Apt Inv (AIV).
Otherwise, bearish candidates include the following downtrending intraday stocks:
AutoNation (AN), Noble Energy (NBL), QEP Resources (QEP) and Ebay.
Follow along with members of the Daily Commentary and Idealized Trades summaries for real-time updates and additional trade planning.
Corey Rosenbloom, CMT
Afraid to Trade.com
Follow Corey on Twitter: http://twitter.com/afraidtotrade
Corey’s book The Complete Trading Course (Wiley Finance) is now available along with the newly released Profiting from the Life Cycle of a Stock Trend presentation (also from Wiley).
The post New Lows into Support Market Update and Stock Scan Oct 13 appeared first on FX FOREX.
The recovery in the USD took a turn as its fell against leading currencies. The huge selloffs also led to a rally for precious metals prices. The minutes of the last FOMC meeting along with the revised down IMF economic…
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The post Financial Market Forecast for October 13 -17 appeared first on FX FOREX.
Price continues its range between key boundary levels, making for relatively low volatility session into support.
Let’s start with our S&P 500 Chart then highlight the top trending stocks of the day:
Sellers ruled the immediate open this morning but buyers rushed to support the market and prevent a further sell-off by holding price up at the 1,950 index level.
The result is a short-term range pattern that continues as drawn, within the context of the broader Fibonacci Retracement Levels (see prior update).
We’re waiting for another “Repeat Pattern in the S&P 500″ or else a failure of this pattern which would likely set in motion a steep sell-off in shares.
Sector Breadth sends a bit of a conflicting signal with today’s sell-swing:
One would assume sector strength would develop in the Defensive Sectors like Staples, Health Care, and Utilities but clearly this is not the case today.
Our two strongest sectors are the offensive or bullish Technology and Industrial stocks – not what you want to see if you are a market bear.
In fact, our worst sector today is the defensive Staples stocks – again, not a bear’s delight.
We can focus our attention on today’s big trending (bullish) stocks:
Keurig Green Mountain (GMCR), CF Industries, Ameren (AEE), and Coca-Cola (KO).
Alternately, we can focus on bearish downtrending candidates:
Cummins (CMI), Black and Decker (SWK), Mastercard (MA), and Ametek (AME)
Follow along with members of the Daily Commentary and Idealized Trades summaries for real-time updates and additional trade planning.
Corey Rosenbloom, CMT
Afraid to Trade.com
Follow Corey on Twitter: http://ift.tt/178Lhrq
Corey’s book The Complete Trading Course (Wiley Finance) is now available along with the newly released Profiting from the Life Cycle of a Stock Trend presentation (also from Wiley).
The post October 7 Stock Scanning and Market Update appeared first on FX FOREX.
Today’s session has been a reversal range session between clear boundaries.
Let’s start with our S&P 500 Chart and highlight the top trending stocks of the day:
Price rallied up into the key inflection (target) near 1,980 and turned sharply lower after the opening gap.
However, price found support as buyers rushed to support the market at the 1,960 pivot, creating a “neutral” zone between 1,960 and 1,980.
A clean breakthrough impulse above 1,980 continues our “Repeat Pattern” outcome, which you can learn more about from our morning update post.
At the moment, let’s continue our practice of market neutrality (range) or else a bearish breakdown bias under 1,960 (or breakout/higher timeframe trend continuity trigger above 1,980).
Sector Breadth confirms the Neutral Stance:
All sectors remain muted today with similar performance across the sectors (roughly 30% to 40% of stocks in each sector are positive).
However, the big leader of today is Energy, and not much can be gleaned from the pattern except for neutral money flow.
We can focus our attention on today’s trending (bullish) stocks:
Hewlett-Packard (HPQ), Expedia (EXPE), Netflix (NFLX), and Abbott Labs (ABT).
Alternately, we can focus on bearish downtrending candidates:
Micron Tech (MU), Kohl’s (KSS), Pitney Bowes (PBI), and Priceline (PCLN).
Follow along with members of the Daily Commentary and Idealized Trades summaries for real-time updates and additional trade planning.
Corey Rosenbloom, CMT
Afraid to Trade.com
Follow Corey on Twitter: http://ift.tt/178Lhrq
Corey’s book The Complete Trading Course (Wiley Finance) is now available along with the newly released Profiting from the Life Cycle of a Stock Trend presentation (also from Wiley).
The post October 6 Stock Scanning and Market Update appeared first on FX FOREX.
Following the better than expected NF payroll report, in which the USD rallied, while precious metals took a nose dive, this week the U.S JOLTS report will complete the NF payroll report; this report may offer another data point about…
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The post Financial Market Forecast for October 6-10 appeared first on FX FOREX.
Are you really prepared to trade? We ask some questions you should ask yourself as well, before diving into the big events of October, which is a very promising month, especially on the background of September’s turmoil. Welcome to a…
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The post Market Movers #18: Questions for every trader and a preview for October’s big events appeared first on FX FOREX.
The weakness in the bullion market and the recovery of US dollar continued last week. This week, we have a lot of news items that could push around the foreign exchange and commodities markets. In the U.S we have the…
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The post Financial Market Forecast for September 29- October 3 appeared first on FX FOREX.
The GBPUSD showed a strong reversal candle last week Friday. The bears were totally in control that day due to the massive wick on top of the candle and the candle close very near the low. Despite the reversal signal, price has not been able to break the low nor the high of that Friday daily candle: price has made four inside candles in a row (purple box in screenshot). What is next for the Cable: will the intermediate uptrend trump the longer-term downtrend or will it be the opposite?
We saw some great comments and analysis on Nathan’s NZDUSD contest question. Although no prizes are dealt out for this one, I am hoping to see the same participation: will the GBPUSD hit the top (blue) or the bottom (red) first? Please post your comments down below!
MY VIEW GU WEEKLY
The weekly chart shows a strong uptrend which is followed by a very impulsive fall (green arrow and red arrow on chart). A pinbar near the 50 Fibonacci level (blue arrow) could spell trouble for the bears but last week’s candle had a big wick on top of the candle (purple arrow). Conclusion: both sides seem to be struggling for control on the weekly chart.
MY VIEW GU DAILY
The daily chart is showing a different picture. The downtrend is visible and evident with clear lower lows and lower highs (red circles). The retracement rally however has posted a higher low (blue circle) in the mean time, which is indicating a wedge (red and blue lines). A wedge is always a sign of indecision.
MY CHOICE: BREAK TO THE DOWNSIDE
There are, however, a few factors that make me favor the downside break of the wedge.
MY CONFIRMATION
I am placing importance on the bearish candle of the Wednesday’s daily candle. In my opinion that candle shows a decent chance of downtrend continuation but more confirmation is needed. In this case confirmation would be the trigger, which is the break of the support trend lines and bottoms. Hence when price is able to push through the support levels of the 4 hour chart (various blue lines), I think short trades look good. The main horizontal support level I am monitoring is the first bottom (dark blue circle) after the bearish impulse on the 4 hour chart (red arrow). Long trades do not look appealing to me unless price breaks above last week’s high (red circle here below). Please see this chart for an easier reference:
We saw great comments and analysis on the NZDUSD so we are hoping for the same performance from you this time around. Please drop in your great analysis down below! Thanks and wish you Happy Trading.
The post GBPUSD Bears and Bulls Wrestling For Control in Forex Market appeared first on FX FOREX.
Do the terms Contango and Backwardation sound Greek to you? Well, they do have an impact on oil prices and we’re here to explain. We then wrap up the Scottish referendum with its future implications and prepare for the important…
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The post Market Movers #17: Contango vs. Backwardation, Scottish reverberations and key US data appeared first on FX FOREX.
Right on schedule, price rallied up from a known support target level and we have yet another Trend Day in motion.
Start with this morning’s S&P 500 Support Bounce Rally post and let’s now take a look at our intraday update.
Let’s jump into today’s update with an update on the S&P 500:
Take a close look at the two recent S&P 500 updates so far from the week:
“Planning the Pullback in the US Stock Market”
“Support Range Bounce for the S&P 500″
With those in mind, we currently see the market rallying up – as was expected – from the 1,980 confluence target level as positive divergences further suggested higher odds for a rally.
How far may this rally continue? We’ll focus initial attention just shy of the 2,000 level and if price breaks through that target, we’ll extent upward resistance levels toward the 2,010 level again.
Sector Breadth confirms the bullish upswing:
Stealthily, the strongest sectors today are the defensive Staples and Health Care sectors (notice the weak performance from Energy and Utilities) while we see a strength cluster in the offensive group (Financials, Technology, etc).
So far, the message is mostly bullish but would be fully bullish were it not for the top performing Staples Sector today.
As I mentioned, not everything is bearish today – here are our bullish stock candidates for the session:
Chipotle (CMG), Hasbro (HAS), Biogen (BIIB), and Dupont (DD).
In addition to the bullish candidates, we have these bearish prospects:
Ensco (ESV), Chevron (CVX), FirstEnergy (FE), and Comerica (CMA).
Follow along with members of the Daily Commentary and Idealized Trades summaries for real-time updates and additional trade planning.
Corey Rosenbloom, CMT
Afraid to Trade.com
Follow Corey on Twitter: http://ift.tt/178Lhrq
Corey’s book The Complete Trading Course (Wiley Finance) is now available along with the newly released Profiting from the Life Cycle of a Stock Trend presentation (also from Wiley).
The post Bouncing Market Update and Trending Stock Scan for Sept 24 appeared first on FX FOREX.
Following the FOMC meeting the commodities markets took a beating as oil, gold and silver tumbled down. These losses coincided with the recovery of USD against leading currencies such as Euro and Yen and the rally of U.S equities. On…
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The post Financial Market Forecast for September 22-26 appeared first on FX FOREX.
China launched a gold exchange open to foreign players for the first time on Thursday, putting the world’s top bullion buyer on track to win a race to set the benchmark price in Asia.
The launch of the Shanghai Gold Exchange’s international bourse with yuan-denominated contracts is the first in a slew of bullion contracts expected in Asia, including Singapore and Hong Kong, before the end of the year as the region aims to have pricing power as the top consumer of the metal.
China’s efforts have the best chance of success, say market players, as it has a huge home market. With imports of over 1,000 tonnes of gold last year and local production of about 400 tonnes, China consumes over a third of global supply.
A successful take-up of the exchange could see gold priced and paid for in yuan rather than the U.S. dollar, challenging the traditional dominance of London and New York in trading.
The exchange’s launch is also a big boost for the free trade zone, where the bourse is located. Despite being touted as a test bed for financial reforms, the zone has struggled to show significant progress in its first year.
“The launch of the gold contracts will increase China’s influence and improve price discovery,” China central bank governor Zhou Xiaochuan said at a launch event in Shanghai.
via Reuters
The post China Launches Gold Exchange to Capture Asian Market appeared first on FX FOREX.
