Press review - page 49

[Sergey Golubev]

Trading the News: Canada Consumer Price Index (based on Canadian Dollar Risks Further Losses Amid Threat for Deflation article)

A further slowdown in Canada’s Consumer Price Index may highlight a bearish outlook for the Canadian dollar as it heightens the threat for deflation.

What’s Expected:

Time of release: 11/22/2013 13:30 GMT, 8:30 EST
Primary Pair Impact: USDCAD
Expected: 0.8%
Previous: 1.1%
Forecast: 0.6% to 1.0%

Why Is This Event Important:

It seems as though BoC Governor Stephen Poloz no longer sees a need for higher interest rates in light of the slowing recovery, and the central bank may adopt a more dovish tone for monetary policy as growth and inflation remains subdued.

How To Trade This Event Risk

Bearish CAD Trade: Canada Inflation Slows to 0.8% or Lower

• Need green, five-minute candle after the report to consider long USDCAD entry
• If the market reaction favors a short Canadian dollar trade, establish long with two position
• Set stop at the near-by swing low/reasonable distance from cost; use at least 1:1 risk-to-reward
• Move stop to entry on remaining position once initial target is hit, set reasonable limit

Bullish CAD Trade: Inflation Tops Market Forecast

• Need red, five-minute candle following the release to look at a short USDCAD trade
• Carry out the same setup as the bullish CAD trade, just in the opposite direction

CPI data out of Canada showed September price growth at 1.1%, beating estimates of a 1.0% print. The USD/CAD pair weakened heading into the weekly close as pressure mounted on the greenback due to speculation of a delayed Fed taper- a result of the two week long US Government shutdown. The year over year print this time around is estimated to be a dismal 0.8% due to impacts from the shutdown in addition to a decline in fuel prices across the board. Sustained lower crude prices will continue to put pressure on inflation levels and may prompt dovish intervention by the Bank of Canada as the Federal Reserve looks to step back asset purchases over the next few months. Disappointing CPI prints moving forward do not bode well for CAD strength, especially in the context of a BoC that just removed pledges to raise rates in the future.

[Sergey Golubev]

Algorithmic Trading System (based on When To Trade? My Algorithmic Trading System Shows You article)

Pre Algorithmic Trading System Analysis: This week has been a little wild as stocks pulled back due to headline news. The two big drops which took place on heavy volume sent market participants into an emotional state liquidating their long positions on fear of a collapse. Even though the stock market shows no sign of the trend reversing down, traders are jumpy and quick to lock in gains with any negative new.

Logical Market Analysis Combined with Automated Algorithmic Trading System

Reviewing the charts for high volume resistance levels, previous pivot highs and lows, and a close eye on the Barchart momentum index like we just did in this report is only the tip of the iceberg when it comes to complete market analysis.

There are many other things one should analyze for precision market timing of the broad market. The stock market has several different forces at play which move price and using a type of analysis which I call INNER-Market Analysis allows us to capture all the market moving forces within one indicator. This February when my book is published on INNER-Market Analysis and algorithmic trading systems all this information will be available if you would like to learn more.

Some other areas of the market which must be analyzed are trends, active cycles, volatility, volume flows, and market sentiment to name a few.

What is an algorithmic trading system?

A trading algorithm is nothing more than a bunch of rules which you create (your trading strategy) converted into a computer language so a financial charting platform can run your trading strategy automatically. Everything is done for you including the trading. The only thing the system creator needs to do is monitor the algorithmic trading system for technical issues and possible tweaks here and there.

Conclusion About Using an Algorithmic Trading System:

Trading or investing for that matter is no easy task. And I know firsthand that even if one has a proven winning strategy it’s almost impossible follow the rules and catch every trade setup generated. I do not know how many times I see perfect setups about to unfold and then miss them because I was reviewing other charts, sending an email, going to the washroom or grabbing a bite to eat.

[Sergey Golubev]

Breakout with Ichimoku (based on Take Advantage of False Breakouts at Great Prices with Ichimoku article)

Talking Points:

• What is a False Breakout?
• How Ichimoku Can Help You Recognize a False Breakout
• Trading Opportunity in EURUSD with Ichimoku on Recent Move

There are few things more frustrating to traders than false breakouts. Especially if your bread and butter as a trader is catching trends at the earliest stage possible. However, much like whipsaws on protective stops, false breakouts are often seen as a necessary evil.

What is a False Breakout?

A false breakout takes place when price appears to be making a renewed move in the direction of the trend only to be retraced. A trend trader who is looking for prices to eventually move higher but wants confirmation of a price thrust in the direction of the trend is especially prey to false breakouts. This is because a break of resistance like a trendline that is pierced by price without follow through is ground zero to a false breakout.

How Ichimoku Helps You Recognize a False Breakout

Like many pains of trading such as stops getting hit at an unfortunate price, false breakouts cannot be avoided. However, they can be minimized as well as become a nice trading signal upon their failure. The reason I like looking to false breakouts as a trading opportunities is that they can often have a sharp reversal in the direction of the prior move with a good risk to reward ratio.

Ichimoku is a technical trading system that helps you catch moves in the direction of the trend on the time frame that you’re trading. Ichimoku is often seen as a difficult system to learn due to the 5 components that are displayed on the chart to explain a trading opportunity but each line serves a purpose and when you understand each purpose, you begin to get a feel for the value that Ichimoku can bring to your technical trading strategy.

• Ichimoku Trade: Sell EURUSD If Price Breaks Below 1.3415 Showing a False Breakout Occurred
• Stop: 1.3550 (Technical Invalidation Point on the Chart)
• Limit: 1.3295 (Monthly Low)
  

If this is your first reading of the Ichimoku report, here is a recap of the traditional rules for a sell trade:

• Price is below the Kumo Cloud (That will be our entry trigger)
• The trigger line (black) is below the base line (light blue) or is crossing below
• Lagging line is below price action from 26 periods ago (bright green line)
• Kumo ahead of price is bearish and falling (red cloud = bearish Kumo)
  

If the breakout turns out to be legitimate and 1.3550 is taken out, then the next target would be in the neighborhood of 1.3630 /3650 range.

[Sergey Golubev]

GOLD - Technical Analysis for the next week (based on Gold at 4-Month Lows- November Close in Focus Amid Thin Holiday Trade article)

Fundamental Forecast for Gold: Neutral

• Gold Gets a Reprieve before 6/28 Close
• Price & Time: Key Couple of Days For Gold

Gold plummeted more than 3.5% this week with the precious metal trading at $1244 ahead of the New York close on Friday. The decline marks the largest weekly loss in two months and comes on the heels of the FOMC minutes from the October 30th meeting where the committee showed a willingness to begin tapering in the “coming months” if US economic data continued to improve. The remarks saw taper expectations moved back up with investors now looking to December as a viable timeframe. Strength in the greenback further exacerbated the move with the Dow Jones FXCM Dollar Index (Ticker: USDDOLLAR) closing the week just off 2-month highs. But with the November close and a shortened week ahead, can the sell-off be sustained?

From a technical standpoint, gold invalidated last week’s bullish outlook early in the week with the break & subsequent close below $1268 and while the technical damage now keeps our broader bias weighted to the downside, we will remain neutral into the close of the month. Bearish invalidation has now been brought down to $1294 with only a break above shifting our focus higher. Short-side support targets are eyed at $1233/34, $1209 and $1179/81. Note that daily RSI has made a slight rebound off the 30-thresholds and risks a near-term relief rally early next week. We will continue to sell into rallies and a break below $1233 with RSI conviction puts subsequent support targets into focus. Interim resistance stands at $1250 backed by $1268 and $1294. Note that the November opening range made a clear break early in the month and we should expect prices to close the month not too far off these lows.

[Sergey Golubev]

U.S. stocks analysis (based on U.S. stocks extend gains on jobless data; Dow up 0.34% article)

U.S. stocks extended Thursday's gains into Friday after investors continued to applaud strong weekly jobless claims data.

Sentiments continued to build that the U.S. economy is improving though the Federal Reserve will keep stimulating the economy with stock-boosting bond purchases in the coming months to be sure recovery can stand on its own.

At the close of U.S. trading, the Dow Jones Industrial Average finished up 0.34%, the S&P 500 index rose 0.50%, while the Nasdaq Composite index rose 0.57%.

Leading Dow Jones Industrial Average performers included Boeing, up 2.29%, The Travelers Companies, up 1.45%, and Wal-Mart Stores, up 1.24%.

The Dow Jones Industrial Average's worst performers included Intel, down 5.45%, IBM, down 1.56%, and Home Depot, down 0.82%.

European indices, meanwhile, finished largely higher.

After the close of European trade, the EURO STOXX 50 rose 0.35%, France's CAC 40 rose 0.58%, while Germany's DAX 30 rose 0.25%. Meanwhile, in the U.K. the FTSE 100 finished down 0.11%.

[Sergey Golubev]

Bitcoin

Maverick British billionaire Sir Richard Branson informed the world that his commercial space flight company Virgin Galactic is now accepting the digital currency Bitcoin. He tweeted that now travelers can pay in Bitcoin to buy a ticket into space.

Though he is not new to digital currencies as he has invested heavily before, this decision is quite significant. Branson also informed that a “future astronaut,” a female flight attendant from Hawaii, has already purchased her space travel ticket using Bitcoins.

What is Virgin Galactic?

Virgin Galactic should not be confused with Virgin Atlantic which is an airline services provider from Sir Richard Branson; rather, it is a company within Richard Branson’s Virgin Group which plans to provide suborbital spaceflights to space tourists, suborbital launches for space science missions, and orbital launches of small satellites.

According to the company sources from Virgin Galactic the company hopes to offer orbital human spaceflights as well. Currently, Virgin Galactic’s spacecraft is launched from a large airplane, giving the spacecraft more initial speed and altitude than if it were launched from the ground.

[Sergey Golubev]

Weekly outlook: November 25 - 29 (based on investing.com article by today)

Monday, November 25

• Switzerland is to release data on the employment level during the previous quarter, a leading economic indicator.
• The U.S. is to release private sector data on pending home sales, a leading indicator of economic health.

Tuesday, November 26

• The Bank of Japan is to publish the minutes of its latest policy meeting, which contain valuable insights into economic conditions from the bank’s perspective.
• Bank of England Governor Mark Carney and several BoE policymakers are to testify on the outlook for inflation and economic growth before parliament’s Treasury Committee.
• The U.S. is to produce data on building permits, a leading indicator of future construction activity as well as a report on housing starts. The nation is also to release private sector data on consumer confidence and house price inflation.
• Later Tuesday, New Zealand is to publish data on the trade balance, the difference in value between imports and exports.
  

Wednesday, October 27

• Australia is to release data on completed construction work, an important gauge of activity in the sector.
• In the euro zone, Germany is to release the Gfk report on consumer climate.
• The U.K. is to release revised data on third quarter economic growth, as well as preliminary data on business investment.
• The U.S. is to release data on durable goods orders, a leading indicator of production, as well as a report on manufacturing activity in the Chicago region and revised data on consumer sentiment. The Labor Department is to release the weekly report on initial jobless claims one day ahead of schedule due to Thursday’s Thanksgiving holiday.
  

Thursday, November 28

• Japan is to produce official data on retail sales, the government measure of consumer spending, which accounts for the majority of overall economic activity.
• New Zealand is to release private sector data on business confidence and a separate report on building consents, while Australia is to produce data on private capital expenditure.
• Switzerland is to release data on third quarter gross domestic product, the broadest indicator of economic activity and the leading measure of the economy’s health.
• In the euro zone, Germany is to release preliminary data on consumer inflation, in addition to data on the change in the number of people unemployed.
• The BoE is to publish its twice yearly financial stability report. BoE Governor Mark Carney is to hold a press conference about the report.
• Canada is to release data on the current account and a separate report on raw materials price inflation.
• Markets in the U.S. will be closed for the Thanksgiving holiday.
  

Friday, November 29

• Japan is to release a series of data, including reports on household spending, inflation, and industrial production.
• Australia is to produce data on private sector credit.
• Switzerland is to publish its KOF economic barometer.
• The U.K. is to release data on net lending to individuals and mortgage approvals.
• The euro zone is to release preliminary data on consumer inflation and a separate report on the unemployment rate across the currency bloc. Germany is to release data on retail sales.
• Canada is to round up the week with the monthly report on GDP growth.

[Sergey Golubev]

GOLD TECHNICAL ANALYSIS (based on dailyfx article)

Prices recoiled from resistance at a falling trend line set from late October. A break below support at 1249.18, the 61.8% Fibonacci expansion, has exposed the 76.4% level at 1222.60. A reversal back above 1249.18 aims for the trend line (now at 1265.38), followed by the 50% Fib at 1270.67.

[Sergey Golubev]

News Trading (based on How to Approach News Trading article)

“The most successful cases can be seen when traders are well aware of which types of data will be moving the market during the respective trading session” said Haris Constantinou, currency analyst at TeleTrade. “This can be done using the economic calendars that are made freely available by forex trading brokers.” Traders need to be watching the market movements as these releases are unveiled to see if the general reactions match the direction of the data. The next step in trading these events comes with identifying which currency pairs will be most heavily affected by the released data. Generally, data out of the US will have a large effect on the US Dollar, European data will have a large impact on the direction of the Euro, and so on.

[Sergey Golubev]

2013-11-25 23:50 GMT (or 00:50 MQ MT5 time) | [JPY - Monetary Policy Meeting Minutes]

• past data is n/a
  
• forecast data is n/a
• actual data is n/a according to the latest press release

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Yen strengthens after BoJ minutes

The yen strengthened in Asian trade Tuesday despite three of the nine Bank of Japan board members seeing a greater downside risk to the economy than the majority view of balanced risk, according to the minutes of the Oct. 31 policy meeting released earlier in the day.

USD/JPY traded at 101.49, down 0.19%, in a range of 101.34 - 101.73 after the minutes.
.
Bank of Japan board member Takehiro Sato said downside risks to weaker prices is somewhat higher than the upside, while colleague Takahide Kiuchi repeated his call for greater price target flexibly. Sayuri Shirai said attention needs to be paid to downside risks to economic activity and prices.

The Bank of Japan is aiming for sustained annual inflation at 2% by 2015 through an aggressive easing policy that is supposed to work in combination with government economic reforms.

At the meeting, the Bank of Japan board, by a unanimous vote, kept the bank's policy target unchanged as expected.