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We were talking about EURUSD and other currencies, about banks, about bitcoins, and "the guys who are moving the price (speeches) and so on. But we did not talk so much about GOLD ... so - it is something to read during the weekend - two articles.
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Gold’s Drop to 34-Month Low Extends on Fed
Gold dropped to a 34-month low in New York and headed for the worst quarterly slump on record following the Federal Reserve’s comments on tapering stimulus.
Gold futures slid 25 percent this quarter, heading for the biggest loss since at least 1975, with London prices set for the largest fall since at least 1920. Fed Chairman Ben S. Bernanke said June 19 that the Fed may slow its bond-buying program this year. U.S. data may show today that consumer sentiment improved and business activity expanded, economists said.
“ETF holders are still selling and no one wants to be in gold,” Marc Ground, a commodity strategist at Standard Bank Plc in Johannesburg, said today by phone. “We did see physical buying come in a bit and if that continues it will provide some support.”
Gold for August delivery fell 0.8 percent to $1,201.40 an ounce by 7:39 a.m. on the Comex in New York, after reaching $1,179.40, the lowest since Aug. 2, 2010. Futures trading volume was 64 percent above average in the past 100 days for this time of day, according to data compiled by Bloomberg. Gold for immediate delivery in London added 0.1 percent to $1,202.42.
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Why I Don't Own Gold
While my recent articles may give the impression that I am a perma-bear when it comes to gold, that isn't the case. I turned bullish on gold back in the early 2000's after reading a headline that central banks were ending their gold liquidations. That event pretty much signaled the end of the gold bear market that had been in place since the late 1970s. While working as a portfolio manager I had precious metals as a holding in my portfolios. I was bullish on gold for all the right reasons, and the price action was supportive of my decision. I am now bearish on gold because the bulls are bullish for all the wrong reasons, and the price action is supporting my position. In my opinion, gold is being supported by pillars of sand, and the tide is coming in.
Pillar #1: Printing money causes inflation.
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Pillar #2: The US dollar isn't going to collapse and go to zero as many gold bulls claim.
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Pillar #3: The debt will force the US government to print money.
just the next one sorry ... does anyone thinking about Cyprus? It was a lot of talking about Cyprus in past ... so it is the news for today :
Cyprus Industrial Output Falls Further In April
Cyprus' industrial production decreased further in April, data released by the statistical office showed Friday.
Industrial production declined 5.9 percent on an annual basis in April, after falling 17.9 percent in March and 16 percent in February.
Mining and quarrying production plunged 36.8 percent annually, and manufacturing production dropped 4.4 percent. There was an 8.2 percent fall in electricity supply during the month.
In the January-April period, industrial production decreased 11.9 percent from the corresponding period of 2012.
Separately, the agency said Cyprus' producer price index decreased 1.9 percent on an annual basis in May, after gaining 0.7 percent in April. Output prices in the domestic market dropped 2 percent, and those in the overseas market edged down 0.3 percent.
And the last one for weenend sorry :) - did you see those my trades on this post? So, it was news event about :
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U.S. Consumer Sentiment Fell Much Less Than Previously Estimated In June :
Consumer sentiment in the U.S. deteriorated by much less than previously estimated in the month of June, according to a report released by Thomson Reuters and the University of Michigan on Friday.
The report showed that the consumer index for June was upwardly revised to 84.1 from the preliminary reading of 82.7. Economists had been expecting the index to be upwardly revised to 83.0.
Surveys of Consumers chief economist, Richard Curtin said, "Consumers now believe the recovery has achieved an upward momentum that will not be easily reversed."
"To be sure, few consumers expect the economy to post robust gains or think the unemployment rate will drastically shrink during the year ahead," he added. "Nonetheless, consumers anticipate continued slow economic progress."
Forbes - S&P 500 At 1850 By Year's End? :
This week, the U.S. Department of Commerce’s Bureau of Economic Analysis reported its revised estimate of corporate profits for the first calendar quarter of 2013. The number — $1.75 trillion – as well as the numbers from the past couple quarters are roughly 30% higher than the figures in the 2006 and 2007 timeframe. One would find a similar relationship narrowing the scope to the earning of just the Standard & Poor’s 500.
Recall that the U.S. equity market peaked in the fourth calendar quarter of 2007. At that time, the S&P 500 peaked at about 1575. The Dow Jones Industrial Average was just above 14,000.
If Standard & Poor’s earnings forecast is correct and Professor Siegel’s more conservative premise is reasonable, the current market action will likely be one of the many “normal” market corrections and we’ll see the equities meaningfully higher at year’s end. SPY, IVV, DIA, QQQQ would be attractive at current levels.
Forbes - A Top-Notch Tool For Market Timing :
The debate over whether it is possible to time the stock market has been going on for years and will likely continue into the foreseeable future. One of the difficulties in assessing the merits of market timing is that some of the analysis that goes into the determination is subjective rather than objective. This can make the testing of a methodology quite difficult.Another key factor is the time frame that one is trying to predict. In other words, are you looking three months out? Six months? Years? Of course, the most difficult are the short-term forecasts as to whether the stock market is going to be up or down the next week.Occasionally, you can make these with some degree of confidence but often only just after significant turning points when a top or bottom has been determined technically.One of the key tools that I use to determine the intermediate- or long-term outlook is the weekly, as well as the daily, Advance/Decline lines. I have written about their application extensively in the past (One Indicator Stock Traders Must Follow), and they play an important role in my daily and weekly analysis.Tracking whether the NYSE Advance/Decline is moving with prices or diverging from them has been a valuable tool in determining bull and bear markets. Trying to determine whether a correction will last several weeks or several months is more difficult.One indicator that I have found often to be very useful in identifying the end of market corrections is the McClellan oscillator developed by Sherman and Marian McClellan in 1969. Their son Tom McCellan has continued their analysis of the markets and is an excellent technician, who covers a wide range of markets. I have had the pleasure of knowing this “pure technical family” for many years and they provide a wealth of data, including daily readings of the market internals on their site.
This chart of the NYSE Composite covers the period from January 2003 through June 2003. The McClellan oscillator (OSC) is plotted below the bar chart, and the dashed black line notes the zero line, while the dashed red line is drawn at -150.
Multiple positive or negative divergences often provide the strongest signals, and this is a classic example. The McClellan oscillator (OSC) had an initial low at -234 on January 27 (point 1) as the NYSE Composite closed below its daily starc- band.
The OSC rebounded to -67 over the following seven days before it again turned lower. At the February 13 market lows, the OSC was at -175 (point 2) so the first positive divergence was formed.
Just something to read before market open :
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3 Things Traders Should Know About the Dollar Outlook :
#1 – The Fed will most likely taper in September. Despite all of the attempts by FOMC voters this week to downplay the significance of Bernanke’s comments by saying that the decision to taper will be based on data, Fed President Stein was quite clear that September could be the month when changes are made. Stein said, the Fed should “be clear that in making a decision in, say, September, it will give primary weight to the largest stock of news that has accumulated since the inception of the program and will not be unduly influenced by whatever data releases arrive in the few weeks before the meeting.” This specific comment about September sparked speculation that it will be only 2 more months before the Fed starts to taper, which we agree is likely because the central bank will not want to suddenly reduce stimulus right before the holidays. While we have already seen the dollar trade higher on liquidation of dollar funded carry trades and re-pricing of FOMC expectations, there’s scope for further gains on next week’s economic reports.
#2 – The Sustainability of Dollar Gains Hinge on Next Week’s Data. A number of U.S. economic reports are scheduled for release next week including manufacturing and non-manufacturing ISM and the ever important non-farm payrolls report. A minor slowdown in job growth is expected to be offset by a drop in the unemployment rate. The closer the unemployment rate gets to the 7% mark mentioned by Bernanke and Stein, the greater the likelihood of a reduction in stimulus in September instead of December. As long as there aren’t any major disappointments in U.S. data, we expect the dollar to extends its gains in the coming week.
#3 – President Obama Looking to Replace Bernanke. Finally talk of a replacement for Bernanke could gain momentum in the coming weeks. According to the Wall Street Journal, Obama already has a short list of candidates that most likely includes Janet Yellen, Tim Geithner and Larry Summers. The role of Fed Chairman is a very important one as this person’s background, experience and monetary policy bias will play a role in how he or she handles the recovery and future crises. If Bernanke settles on a candidate that the market is less familiar with, the uncertainty could add pressure on equities and currencies.
Just something about ECN and STP - The Truth about Currenex Brokers :
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What is an ECN?
ECN is a term often used when referring to Currenex. ECN stands for Electronic Communication Network and it eliminates the function of a third party in the execution of orders. Without the intercession of a third party, market participants of any size can interact directly for Bid and Offer prices posted by other market participants. This leads to greater transparency and narrower spreads. ARCHIPELAGO, purchased by the NYSE in 2006, and ISLAND are two well known ECNs.
What is an ESP?
ESP™ means Executable Streaming Prices and is offered through the Currenex system. Currenex connects to multiple sources of liquidity, primarily banks, who offer "pools of liquidity". This expansiveness from the multiple pools of liquidity, available through Currenex’s ESP, provides better price discovery and narrower spreads for traders.
The prices that are offered via Currenex are executed directly within these various pools of liquidity. Whereas in the past, a trader would be required to obtain a Prime Brokerage relationship with one or more of the major liquidity providers which required a very high threshold and associated high expenses.
Not all Currenex Brokers are the same.
It is important to remember that a broker’s Currenex offering is only as good as the liquidity sources that are linked to the platform. The quantity and quality of liquidity sources can lead to dramatic differences in price spreads. For instance, a broker offering 1-2 banks versus a broker offering 8-10 banks will have a dramatic difference in pricing and liquidity.
What is STP?
STP, or Straight Through Processing, is a term commonly used among Forex brokers.Many Forex brokers state they use "interbank pricing" but act as a counter party to their customers’ trades. They take the other side of the trade, going against the client’s best interest, and make money on a client’s losing trade.
Conversely, a true STP setup passes the order in an automated way to all liquidity sources. With a true STP broker, there is not the possibility of any adversarial relationship between the broker and client as the broker only generates revenue in the form of a commission per trade rather than the dealing desk model of capturing client losses.
Just next educational article about ECN and so on - Market Makers Vs. Electronic Communications Networks
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The foreign exchange market (forex or FX) is an unregulated global market in which trading does not occur on an exchange and does not have a physical address of doing business. Unlike equities, which are traded through exchanges worldwide, such as the New York Stock Exchange or the London Stock Exchange, foreign exchange transactions take place over-the-counter (OTC) between agreeable buyers and sellers from all over the world. This network of market participants is not centralized, therefore, the exchange rate of any currency pair at any one time can vary from one broker to another.
How Market Makers Work
Market makers "make" or set both the bid and the ask prices on their systems and display them publicly on their quote screens. They stand prepared to make transactions at these prices with their customers, who range from banks to retail forex traders. In doing this, market makers provide some liquidity to the market. As counterparties to each forex transaction in terms of pricing, market makers must take the opposite side of your trade. In other words, whenever you sell, they must buy from you, and vice versa.
The exchange rates that market makers set, are based on their own best interests. On paper, the way they generate profits for the company through their market-making activities, is with the spread that is charged to their customers. The spread is the difference between the bid and the ask price, and is often fixed by each market maker. Usually, spreads are kept fairly reasonable as a result of the stiff competition between numerous market makers. As counterparties, many of them will then try to hedge, or cover, your order by passing it on to someone else. There are also times in which market makers may decide to hold your order and trade against you.
There are two main types of market makers: retail and institutional. Institutional market makers can be banks or other large corporations that usually offer a bid/ask quote to other banks, institutions, ECNs or even retail market makers. Retail market makers are usually companies dedicated to offering retail forex trading services to individual traders.
Pros:
Cons:
How ECNs Work
ECNs pass on prices from multiple market participants, such as banks and market makers, as well as other traders connected to the ECN, and display the best bid/ask quotes on their trading platforms based on these prices. ECN-type brokers also serve as counterparties to forex transactions, but they operate on a settlement, rather than pricing basis. Unlike fixed spreads, which are offered by some market makers, spreads of currency pairs vary on ECNs, depending on the pair's trading activities. During very active trading periods, you can sometimes get no ECN spread at all, particularly in very liquid currency pairs such as the majors (EUR/USD, USD/JPY, GBP/USD and USD/CHF) and some currency crosses.
Electronic networks make money by charging customers a fixed commission for each transaction. Authentic ECNs do not play any role in making or setting prices, therefore, the risks of price manipulation are reduced for retail traders. (For more insight, see Direct Access Trading Systems.)
Just like with market makers, there are also two main types of ECNs: retail and institutional. Institutional ECNs relay the best bid/ask from many institutional market makers such as banks, to other banks and institutions such as hedge funds or large corporations. Retail ECNs, on the other hand, offer quotes from a few banks and other traders on the ECN to the retail trader.
Pros:
Cons:
The Bottom Line
The type of broker that you use can significantly impact your trading performance. If a broker does not execute your trades in a timely fashion at the price you want, what could have been a good trading opportunity can quickly turn into an unexpected loss; therefore, it is important that you carefully weigh the pros and cons of each broker before deciding which one to trade through.
Just about the following news event which we had at 23:50 GMT yesterday or 01:50 MQ time today :
2013-06-30 23:50 GMT | [JPY - Tankan Large Manufacturing Index]
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BoJ Tankan: Large Manufacturers Index +4 In Q2 :
An index measuring business sentiment in Japan surged in the second quarter of 2012, the Bank of Japan revealed on Monday in its quarterly Tankan business survey.
The large manufacturers index came in with a score of 4, beating forecasts for a 3 and up from -8 in the first quarter. The outlook score was 10, also beating expectations for a 7 and up from -1 in the previous three months.
The large non-manufacturers index was at 12, surpassing expectations for 11 and up from 6 in Q1. The outlook score was 12 versus forecasts for 14 and up from 9 in the three months prior.
Large all-industry capex is now seen at 5.5 percent, well above forecasts for 2.9 percent after falling 2.0 percent in the previous quarter.
UK Manufacturing PMI At 2-Year High :
7/1/2013 4:41 AM ETAn indicator of manufacturing sector performance in the UK rose to its highest level in more than two years in June, a survey by Markit Economics and Chartered Institute of Purchasing & Supply, or CIPS, revealed Monday.
The seasonally adjusted Markit/CIPS purchasing manager's index rose to 25-month high of 52.5 in June from an upwardly revised reading of 51.5 in May. The index has now remained above 50 for three successive months.
Incoming new orders rose for the fourth consecutive month in June, while production also picked up. Nevertheless, manufacturing employment remained broadly unchanged.
Price pressures were subdued. Input costs declined for the third straight month in June while the average factory gate prices recorded its first decline in three-and-a-half years.
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Forum
Market Condition Evaluation based on standard indicators in Metatrader 5
newdigital, 2013.07.01 10:45
Just about this news event for GBP which was at 08:28 GMT (or at 10:28 MQ time) - 2013-07-01 08:30 GMT | [GBP - Manufacturing PMI] :
past data was 51.3
forecasting was 51.5
actual data 52.5 according to the latest release
We are using same formula which we used for some other news event : if actual > forecast = good for currency (for GBP in our case).
+58 pips :
MetaTrader Trading Platform Screenshots
GBPUSD, M5, 2013.07.01
MetaQuotes Software Corp., MetaTrader 5, Demo
58 pips