Tag Archives: gold

uvol

Weekly charts and analysis 18 Nov 2012: Staple charts

The earlier weekly charts were posted here: Point and figure long term updates

But before we begin the analysis on our staple charts, here is an interesting chart on the proxy for the great american bull run: Apple.

This is a purge. Am not sure there is candle like that on Apple in the last 1 year. It comes outside the bollinger which makes the case very strong for a reversal. This is the first time I have become neutral to bullish on Apple though I would like to see confirmation as it fights into the lower bollinger.


On the weekly, Apple closes inside the lower bollinger of 25,2 after a strong dip on friday.

You need to be a subscriber with Captial3x Trading portfolio or Combined Indicator member to read on….. Subs have access to all the market analysis (Copper,BDI, Gold, US treasury, EU bond markets) and FX setups which also feature our FX portfolio. You also have access to Trade Room of Capital3x.

Summary: Personally I really thought Friday move in ES did provide some reasons to see light at the end of the tunnel. But the chart on VIXVXO has thrown a new perspective and is suggesting extreme caution on risk markets.

Important Links at Capital3x

  1. The Trade Copier
  2. The Nov Live Trade Sheet
  3. The Live Trade Room
  4. The Charts corner
  5. Trade Copier
  6. C3X Performance FX portfolio
  7. The Bond auction schedule can be found here: Bond schedule
  8. The speaker schedule can be found here: Speaker schedule

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yen

Weekly charts and analysis: Point and Figure Long term updates

That time of the week where we get down to begin preparing for tmrw trading. Time to look at the point and figure charts for currency futures and SPX and Gold.

Point and Figure charts (Long Term)

The US dollar is now aiming at 86 on a medium term projection after the triple breakout at 26 Oct 2012.

The EU index has a bearish price objective of 121. The double bottom breakdown on 02 Nov 2012 is leading it down. Given how far the target is, I expect retracements no farther than 128.5 on the index which will correspond to 1.2995 on the EURUSD.

You need to be a subscriber with Captial3x Trading portfolio or Combined Indicator member to read on….. Subs have access to all the market analysis (Copper,BDI, Gold, US treasury, EU bond markets) and FX setups which also feature our FX portfolio. You also have access to Trade Room of Capital3x.

Summary: The point and figure charts as seen above have had a key reversal moment for most currencies between 20Oct and 2 Nov 2012. We have seen how they have led on their way post those breakdowns and reversal as the case may have been respectively. Remember these are long term charts and exactly what Falcon daily (Captial3x bond indicators) is doing for EURUSD and EURJPY

Important Links at Capital3x

  1. The Trade Copier
  2. The Nov Live Trade Sheet
  3. The Live Trade Room
  4. The Charts corner
  5. Trade Copier
  6. C3X Performance FX portfolio
  7. The Bond auction schedule can be found here: Bond schedule
  8. The speaker schedule can be found here: Speaker schedule

Capital3x provides the ever reliant intermarket signals for its subscribers. They are absolutely free to our subscribers. TRADING MEMBERSHIP SUBSCRIPTION

The Indicator links are provided here:

1. Falconfx EUR/USD
2. Falconfx EUR/JPY
3. Falconfx USD/CAD
4. Gladiator ES

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    Charts and analysis (EU,GU, ES,Bunds, Dollar Index)

    You need to be a subscriber with Captial3x Trading portfolio or Combined Indicator member to read on….. Subs have access to all the market analysis (Copper,BDI, Gold, US treasury, EU bond markets) and FX setups which also feature our FX portfolio. You also have access to Trade Room of Capital3x.

    You need to be a subscriber with Captial3x Trading portfolio or Combined Indicator member to read on….. Subs have access to all the market analysis (Copper,BDI, Gold, US treasury, EU bond markets) and FX setups which also feature our FX portfolio. You also have access to Trade Room of Capital3x.

    1. The July Live Trade Sheet
    2. The July Live Trade Room
    3. The Charts corner
    4. C3X Performance FX portfolio
    5. The Bond auction schedule can be found here: Bond schedule
    6. The speaker schedule can be found here: Speaker schedule
    vix

    Forex analysis and Macro internals

    We look at friday close and some further analysis and charts to see where do we head from here. It is almost as if markets are going round and round and coming back to square one. But market internals have changed and without further adieu we get straight to the point. We will cover the following:

    1. US ISM charts
    2. Copper
    3. Gold
    4. Gold to UST2 yield
    5. High yield assets ratio to TLT ratios and comparison to SPX
    6. Volatility Indices
    7. Australian Indice and the SPX
    8. Yen and US treasury 2 year yield
    and more…

    US manufacturing continued to expand in February but at a slower pace. The ISM index for manufacturing declined to 52.4 from 54.1 in January, well below expectations. The decline surprises given that regional surveys from the New York Fed, the Philly Fed, Richmond Fed, Kansas City Fed and the Chicago PMI all increased and are now clearly above the level of the ISM index when converted into the ISM scale (chart).
    As regards the details, the biggest contribution to the decline results from a drop in the probably hard to gauge “supplier deliveries” component which fell 4.6 to 49.0. A reading below 50 indicates faster deliveries which is taken as a negative sign, indicating slower business. New orders declined 2.7 to a still healthy 54.9. Employment (-1.1 to 54.3) and production (-0.4 to 55.3) were down slightly but likewise remained clearly above the 50 expansion mark.

    All forex, Gold, US treasury, Equity charts, Intermarket analysis are provided below.
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    I hope you have had a good weekend and ready to go next week.

    C3X

    copper

    There it does it again

    One look at yesterday markets and you wonder if there is anyone left who can short this market. No chance. But new charts and analysis suggest that there is more to this than that meets the eye.

    Without wasting time lets get into it.

    Todays coverage include:
    1. US 2Y and yen
    2. High yield asset spread to US treasury
    3. Copper
    4. Emerging Market Yields
    5. Gold
    6. Gold to yield spread

    and more….
    We begin our analysis by going around the markets as we look at China, India and SPX which seem to be diverging.

    The emerging market continue to want to retreat at the first sign of trouble but given the global liquidity is still flush with new cash we may see another wave of buying asian indices which will spur the asian currencies like AUD.

    Without further adieu then step in for the rest of the charts and analysis especially on yen and spread analysis.

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    gold to 3m

    Gold and yields

    Gold has dropped like a rock and just when it was touching a key resistance at 1800 a clearance of which could have seen 20-30 pip rise on short covering. But were there ratios and charts which could have predicted the fall? Take a look.

    We were done with our longs much before the fall but of course we were not able to have any shorts.

    Please read the earlier post today: Right here and right now

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    Paulson says: “Buy Gold now”

    Well Paulson is down 50% on his advantage fund but that does not deter him from providing advise. His latest advise: “Buy Gold as inflation creeps up”. We tend to agree with him though this time.

    Bloomberg

    old traders are getting more bullish after billionaire hedge-fund manager John Paulson told investors it’s time to buy the metal as protection against inflation caused by government spending.

    Twelve of 22 surveyed by Bloomberg expect prices to gain next week and five were neutral. Paulson & Co. is already the biggest investor in the SPDR Gold Trust, the largest exchange- traded product backed by bullion, with a stake valued at $2.9 billion, a Securities and Exchange Commission filing Feb. 14 showed. Investors have 2,389.7 metric tons in ETPs, within 0.2 percent of the record reached in December and more than all but four central banks, according to data compiled by Bloomberg.

    Speculators in U.S. gold futures are now their most bullish since September after the Bank of England and Bank of Japan said they will buy more assets and the Federal Reserve said it was considering purchasing more bonds. Central banks are also expanding their bullion reserves, adding 439.7 tons last year, the most in almost five decades. They may buy a similar amount in 2012, the London-based World Gold Council said yesterday.

    “The appalling state of fiscal finances of most industrial nations does lead to concerns about the possibility of inflation,” said Mark O’Byrne, executive director of Dublin- based GoldCore Ltd., a brokerage that sells everything from quarter-ounce British Sovereigns to 400-ounce bars. “Gold is a crucial diversification given the various risks out there.”

    C3X

    es

    Updated analysis: German, France GDP and FX charts

    There are many kinds of traders: Trends traders, Reversal traders, Swing traders, Scalp traders. And there are the smart traders who are looking to make pips rather than money. It makes the world of difference on how you classify yourself in terms of trading psychology.

    This market has continued to sway stops on both sides. The ATR range on yen pairs ….

    AUD/JPY breakout at 83 was well caught by us but we had stop outs given the swings on this pair but overall are up over 150 pips on the pair. But a clear of 84 yesterday now clears the path for over 200 pips gain from here before reversal kicks in if at all.

    AUD/JPY

    EUR/JPY Charts

    VIX Charts

    While Last afternoon reversal on ES pulled VIX from that 21 upper bollinger band. The fact that previous high was gone is sign of some more gains on risk trades.
    [/s2If]
    EUR/GBP

    USD/JPY

    ES Charts

    More charts later.

    Macro Analysis

    The German economy suffered a slight dip at the end of 2011: compared with the previous quarter, the gross domestic product (GDP) decreased by 0.2% in the fourth quarter of 2011 after adjustment for price, seasonal and calendar variations. As further reported by the Federal Statistical Office (Destatis), the German economy grew by 3.0% (in calendar-adjusted terms: 3.1%) over the entire year of 2011. This is in line with the first calculation of January this year. The december numbers were above expectation of -0.3%.

    France grows in december

    In 2011 Q4, French gross domestic product (GDP) in volume* increased by +0.2% after +0.3% the previous quarter. Over the year, GDP increased by 1.7% (after +1.4% in 2010).
    Households’ consumption expenditure slightly decelerated by the end of the year (+0.2% after +0.3%), while gross fixed capital formation (GFCF) accelerated (+0.9% after +0.2%). Overall, total domestic demand (excluding inventory changes) drove GDP on for 0.3 point of growth after 0.2 in Q3. Exports grew at the same pace as the last summer (+1.2%), while imports dropped (–1.2% after +0.7%). Hence foreign trade balance contributed positively to GDP growth in Q4 (+0.7 point after +0.1 point the previous quarter). This contribution is overcompensated by changes in inventories contributing for –0.8 point to GDP growth after being neutral in Q3.

    Consumption slowed down

    Households’ consumption expenditure rose by 0.2% in Q4 after +0.3%. Energy expenditure fell (–3.6% after +5.7%) due to mild weather conditions this fall. Expenditure in food products went on decreasing though less markedly (–0.1% after –0.8%). Besides, car purchases renewed with growth in Q4. Expenditures in services slowed down all together, with the exception of accomodation and food services which held steady after a drop in the summer. Over 2011, households’ consumption expenditure slowed down (+0.3% after +1.3%) and contributed for +0.1 point to GDP growth.

    Exports rose, imports fell
    Exports went on growing in Q4 (+1.2%), mostly driven by transport equipment sales (+7.9% after +3.6%). Meanwhile, imports fell (–1.2% after +0.7%), weighed down by almost all goods. Consequently, foreign trade balance improved and contributed for +0.7 point to GDP growth (after +0.1 point). Over 2011, exports and imports grew at the same pace (+5.0%). Hence, the contribution of the foreign trade balance to GDP growth is almost neutral: –0.1 point after +0.1 point in 2010.

    Changes in inventories weighed down GDP growth this quarter

    In Q4, changes in inventories accounted for –0.8 point of GDP growth, half of this contribution being imputable to transport equipments (–0.4 point). But given the growth rate carried over at the beginning of the year, they contributed for +0.9 point to the annual GDP growth (after +0.5 point in 2010).
    Revisions

    GDP growth in 2011 Q3 is still estimated at 0.3% Revisions with respect to the previous publications are small. They are mainly due to the update of seasonal and working day adjustment.

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    german turnaround

    Market Technicals get stronger with macro supporting

    This market has been overbought since mid January 2012 and it has shown very little signs of slowing down leave alone reversal. The action post Ben speech yesterday was another breakout and this time unless its fake in which case we will know in the next 48 hours, this train is picking up speed. While we were not along in fading this market in feb but we have quickly reversed positions with strong evidence (laid below) of a new wave of risk buying if we get through key levels and days (feb 9 is imp day)

    We look at bond markets, FX markets and Gold to analyse key trends as they stand in the first half of Feb.

    Bunds charts

    Lots more on FX, ES, S&P500, Gold charts for registered members
    ES Charts

    EUR/USD Charts

    EUR/GBP Charts

    USD/JPY Charts

    AUD/JPY Charts

    Gold Charts

    USD/CAD Daily Charts

    More charts and commentary to be added. Stay clued.\

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    Two of three macro news in the last 15 days has aided and given new impetus to the bulls as it has torn and shred down traders who have been trying to short this market.

    US employment picks up
    The US labor market has strengthened significantly in January. Nonfarm-payrolls increased by 243k and the unemployment rate continued its downward drift, falling to 8.3%. Increased hiring should support private consumption, creating upside risks to our forecast of 2% economic growth in 2012. At the same time, the hurdle for QE3 has increased.

    The previously published level for December was revised upward by 266k on the annual benchmark revision and other adjustments. The strong increase in January and the revisions have led to a much more encouraging picture of the labor market compared with the December report (chart) as hiring has clearly picked up. Job gains were broad-based across sectors with the usual exception of government employees (-14k).

    Manufacturing added 50k jobs, underlining the strength of the sector. Part of the explanation why the increase in January surprised on the upside is that the BLS has revised its seasonal adjustment factors to better reflect the strong seasonality in the hiring of couriers and messengers. As this has eliminated the previously reported 42k increase in December, there was also no pullback in January, in contrast with expectations.

    The unemployment rate which comes from a separate survey among households continued to surprise on the downside, slipping to 8.3% from 8.5%. Household employment increased by 847k in January, a massive rise even if about a quarter of the gain only reflects the updated population estimates. Thus, the unemployment rate is already drifting towards the lower end of the Fed’s forecast for the end of 2012 of 8.2% to 8.5%. Today’s report has therefore reduced the likelihood of further quantitative easing. However, with inflation under control and unemployment still elevated, the Fed may still feel under pressure to “do something” to fulfil its dual mandate of price stability and maximum employment. Moreover, given the very cautious view of the economy of the Fed in recent months, one excellent employment report will probably not be sufficient to convince the FOMC that the recovery has gained more speed.

    German Orders gain traction

    In December, German industrial companies received 1.7% more orders than in November. Against the backdrop of the steep drop in November and the figures released by the Mechanical Engineering Association, most economists had expected this countermovement. Orders increased sharply especially in the volatile sector of “other vehicles”.
    After adjustment for this category, the increase amounted to only 0.2%. Looking at the order intake by regions, the rebound in demand largely came from outside the euro zone: orders from the euro-zone countries dropped by 6% month on month. Prospects for industry improved slightly in the last few weeks. According to the Ifo business climate and the purchasing managers’ index, companies have been more upbeat of late. The uncertainty surrounding the sovereign debt crisis has eased after the ECB’s three-year tender. In January, a majority of the companies polled in the Ifo survey reported rising order intake for the first time. For this reason it is likely that official order data will also point upwards in the months ahead, signalling a year-on-year increase (chart). The trend change in orders should start to have a beneficial effect on production in spring at the latest. Following a decline in German GDP in the fourth quarter by about ¼% on the third quarter, we expect to see the economy returning to a small growth rate in the first quarter

    German Industrial production surprisingly weak/strong>
    In December, industrial production unexpectedly slumped by 2.9% on November. In manufacturing, the decline was only marginally less, at 2.7%, and production in the construction sector plunged by as much as 6.4%. The figures are surprising in several respects. Many had expected construction to show a large plus because of the mild weather conditions in December. Furthermore, production in manufacturing was disappointing after previously proving relatively robust: weak incoming orders had been indicating for some time that companies would have to further scale back production at some point (chart). What’s more, factory
    holidays were presumably longer than usual in December because of the timing of Christmas this year. In the fourth quarter, production tumbled by 2% on the third quarter. Consequently, GDP in the fourth quarter of 2011 is likely to have fallen at a slightly sharper rate than assumed by the German Federal Office of Statistics (-¼% quarter on quarter).

    Most sentiment indicators for Germany have turned upwards recently and industrial orders should point to the upside in the coming months. We therefore expect industrial production to stabilise by spring at the latest. The uncertainty emanating from the sovereign debt crisis has decreased significantly and the generally very good overall conditions for the German economy – such as low interest rates – should be able to have more of an effect again

    So all in all we are in an election year and markets are well aided by a jobless recovery with central banks around the world trying to target inflation, we are setting up for another move in risk assets even while overbought conditions stay. All we can advise is: Make hay while the sun shines cause we expect this party to end sooner than later probably in 12 months time. But till then it could be a disaster to be bear in this market. Having said that: NEVER SAY NEVER in the financial markets and we will update our subscribers on a daily basis with charts and analysis. No reversal or trend will be missed.

    C3X

    The Feb Portfolio is here