Friday, August 25, 2017

USD/JPY has posted slight losses in the Friday session

USD/JPY has posted slight losses in the Friday session. In North American trade, the pair is trading at 109.26, down 0.26% on the day. On the release front, Tokyo Core CPI improved to 04%, edging above the estimate of 0.3%. In the US, durable goods reports were mixed. Core Durable Goods Orders improved to 0.5%, edging above the estimate of 0.4%. However, Durable Goods Orders declined 6.8%, weaker than the estimate of -6.0%. At the Jackson Hole meeting of central bankers, Janet Yellen has concluded her speech and the yen has responded with slight gains.
Federal Reserve Chair Yellen spoke at the Jackson Hole Symposium earlier in the day. Yellen did not take advantage of an ideal opportunity to address US monetary policy, choosing instead to discuss financial reforms, saying that measures put in place in 2007 and 2009 had been effective, adding that future reforms should remain modest. Her comments seemed aimed at a domestic audience, as her message to exercise caution comes at a time when President Trump is looking into wide-ranging reforms in the  industry. The pro-business Trump has complained that the financial sector is over-regulated and has said that he wants to ease current regulations.

Thursday, August 24, 2017

Gold is on track to outperform stocks

Gold is on track to outperform stocks for the first time since 2011, highlighting the uncertainty that has accompanied this year’s stock market gains.
While a season of strong corporate earnings has powered stocks to record highs, investors are increasingly focusing on a cluster of issues that threaten to derail those rallies.
Many are worried about coming negotiations to raise the U.S. debt ceiling, an event that has roiled markets in previous years. A failure to raise the U.S. debt limit in a “timely manner” would prompt areview of the country’s credit rating, which now stands at the highest possible level, Fitch Ratings said Wednesday.
Others are nervous over a monthslong run of uneven U.S. economic data, which some are concerned could eventually drag down corporate earnings. Recent reports have shown some metrics, such as employment, holding strong while manufacturing falters and auto demand posts steep declines.
A stock market rally that hasn’t had a significant pullback in 19 months has amplified concerns that any correction could be swift and sharp, especially with valuations for many sectors near historic highs.
The worries have boosted prices for gold, a favorite destination for nervous investors who believe the metal will hold its value better than other assets when markets turn rocky.
Gold for August delivery is up 12.1% this year to $1,288.90 a troy ounce, while the S&P has risen 9.2%. Other indicators of investor anxiety, such as the Japanese yen, Swiss franc and CBOE Volatility Index have also risen in recent weeks.

Wednesday, August 23, 2017

Gold prices edged higher Wednesday

Gold prices edged higher Wednesday, lifted by a weaker dollar.
Gold for December delivery was recently up 0.2% at $1,293.60 a troy ounce on the Comex division of the New York Mercantile Exchange.
The WSJ Dollar Index, which tracks the U.S. currency against 16 others, was recently down 0.2% to 86.07. A falling dollar tends to buoy gold, which is denominated in the U.S. currency and becomes less expensive to foreign investors when the dollar declines.
At the same time, many investors are waiting for Federal Reserve Chairwoman Janet Yellen's speech at the central bank's annual economic symposium at Jackson Hole, Wyo. on Friday, analysts at Kitco Metals said.
Signs that the central bank may be rethinking its plans for a third rate increase this year would likely lift gold, which struggles to compete with yield-bearing investments when borrowing costs rise.
In base metals, copper for September delivery was recently down 0.5% at $2.9730 a pound.

Monday, August 21, 2017

EUR/USD has edged higher in the Monday session

EUR/USD has edged higher in the Monday session. Currently the pair is trading at 1.1815, up 0.45% on the day. On the release front, it’s a very quiet start to week, so we’re unlikely to see any significant movement from the pair on Monday. There are no US releases, and the sole euro zone event is the Deutsche Bundesbank monthly bulletin. On Tuesday, Germany releases ZEW Economic Sentiment, which is expected to slow to 15.3 points.
The euro took a dip on Thursday, following a terrorist attack in Barcelona, which killed 13 and wounded dozens. EUR/USD dropped below the 1.17 line and touched 3-week lows. However, the euro has quickly recovered, and is trading at 1.18. Barring any geopolitical crises, such as another terrorist attack, we can expect a few slow days until the Jackson Hole summit on Wednesday. Both the ECB and Federal Reserve find themselves pursuing a less accommodative monetary policy, and the markets will be listening closely to Janet Yellen and Mario Draghi. Will Yellen hint at a December rate hike? Will Draghi provide clues regarding the windup of the ECB’s asset-purchases program? Any comments in this vein could be seized upon by the markets and trigger strong movement by the euro. This was the case in June, when Draghi spoke at a central bankers meeting in Portugal, and his upbeat comments about the euro zone economy sent the euro soaring.

Friday, August 18, 2017

Gold prices fall

Gold prices fall into negative territory on reports that President Donald Trump's chief strategist Steve Bannon has left the White House. Gold for December delivery was recently down 0.1% at 1,291.40 after earlier hitting its highest level since November at $1,306.90. The Barcelona terror attack and uncertainty about the Trump administration's fiscal agenda had been supporting prices. Some say the long-term backdrop for gold is still positive even after the Bannon news. "I wouldn't read too much into that," said Bill O'Neill, co-founder of LOGIC Advisors. "There's still a myriad of potential events that can happen down the line that should prove bullish for gold,"

Tuesday, June 20, 2017

Trading traps in the stock markets Supply and Demand

The next and most important point is that often times right above or below these new highs and lows are supply and demand levels which act as repellants to those new buyers or sellers.  If you look closely inside those larger time frame candles you will discover those pockets of buy and sell orders just waiting to get filled. This saying references the notion that when the market looks very good, this is usually when it blows up.  This is not limited to going long; shorts also find huge reversals to the upside just when the market looks as though it’s ready to fall off  and head down. You will see this time and again as the markets are full of traps that the unsuspecting new trader is prone to falling prey to. The cycles will be more stable on longer term charts, but knowing the cycle can assist you in your trading.  If you see price approaching a supply or demand level but the cycle is not indicating a top or bottom, the level may have a higher probability of breaking.  But if the cycle top or bottom is near, the levels are more likely to hold.

Monday, May 22, 2017

VIX Trading

The VIX is related to the S&P 500 if the 500 drops sharply the Vix futures tends to go up. Most of the time the same is true if the S&P 500 is going up the VIX futures tend to go down.  This is not always the case but more often then not this holds true. VIX futures have been offered on the CBOE Futures Exchange since 2004. Since the Chicago Board. Options Exchange (CBOE) introduced futures and, subsequently, options on its Volatility Index, or VIX. At a quoted price of $12.1, one VIX futures contract is worth $12,100. Settlement. CBOE VIX futures are cash-settled and so, unlike futures on commodities. The VIX futures are very different from other index futures in that there prices are determined by a cost of carry but rather the market anticipation of the thirty day overall implied volatility of the SPX options will be at the VIX futures expiration. Many time traders will see the VIX futures trading above the VIX index other times it will be below.
 
  This can be an indication of the market's fear or complacency about the overall market action in the months ahead. Traders need to be aware if they trade the VIX futures that it does not always move in the same direction as the VIX index. Yhe VIX fitures will move close to the S&P 500 futures cash index. VIX is traded on the CBOE futures exchange and one point is worth one thousand dollars and the mini tick is worth .05 or fifty dollars. Vix futures are related to the S&P 500 because of the vix index itself is based on the SPX option prices.

  They are also used to value options on the vix index even though those are cash settled. The VIX futures and VIX are settled on the same day. The Wednesday that is thirty days prior to the third Friday of the calendar month. One thing is for sure a trader needs to learn how to trade this type of index or he will quickly wipe out their trading account. At most brokerages you have to apply to trade this type of index. This type of futures trading is very speculative and is not for all investors. Traders need to learn how to do this type of trading