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newdigital, 2015.03.15 07:24
Gold forecast for the week of March 16, 2015, Technical Analysis
The gold markets
as you can see fell during the course of the week, testing the $1150
level. Because of this, we feel that the market will more than likely
continue to drop a bit this week, as the real support is closer to the
$1140 region. Ultimately, we will have to see what happens at the $1140
level, so for long-term traders this is a market that’s probably best
left alone until we either get a supportive candle there, or break down
below that level on a weekly close.
newdigital, 2015.03.15 07:27
EUR/USD forecast for the week of March 16, 2015, Technical Analysis
The EUR/USD pair broke
down during the course of the week slicing through the 1.05 level at
the end of the Friday session. Because of this, looks like the market is
ready to continue going much lower, and a break down below the bottom
of the range should send this market looking for the parity level given
enough time. Ultimately, if we rally at this point in time it should
just simply be thought of as value in the US dollar as it is the favored
currency by Forex traders around the world.
Introduction to Bonds (Part I)
1. Principal: This is the face value of the bond; the amount that
the first bond buyer initially loaned to the company or government
issuing the bond. This is also known as the par value.
2. Coupon Payment: This is the numeric amount of interest
payments that are scheduled to the bondholder. For instance, if a bond
pays an investor $3,000 twice per year, the coupon amount is $3,000.
3. Yield: The yield is the sum of coupon payments in a year
divided by the amount paid for the year. For instance, if a bond buyer
pays $100,000 for a bond, and the bond issues 2 coupon payments of
$3,000 per year, the yield is 6% (2*3,000/100,000). This is also known
as the bond equivalent year, or the annualized yield.
4. Maturity Date: The maturity date is the date that coupon
payments will end, and the original principal will be repaid. For
instance, if a bond with a principal of $100,000 and bi-annual coupon
payments of $3,000 has a maturity date of January 1, 2040, that means
the bond will no longer issue coupon payments, and will give the
bondholder the $100,000 that was initially borrowed, on January 1 of
5. Call Date: If a bond has a call date(s), that means the
government or corporation issuing the bond has the option of paying back
the principal and ending coupon payments on the call date --- which is
scheduled before the maturity date specified. For instance, if a bond
with a maturity date of January 1, 2040 has a call date of January 1,
2027, that means the bond issuer can pay back the principal in 2027 and
no longer make any have payment obligations related to the bond.
Now that we understand the basic jargon, we are one step closer to
incorporating bonds into our income investment strategy, which we'll
continue to focus on in this series.
Introduction to Bonds (Part II)
Step Coupon Bonds: These are bonds whose coupon rates increase
over the duration of the bond. Often these bonds start by yielding below
what similar bonds do, but end up with a higher than average yield. It
should be noted that many step coupon bonds are callable, and have a
call schedule that mirrors the step coupon rate schedule. In other
words, instead of paying the higher interest rate when it may be due,
the bond issuer has the right to call the bond (return the par value to
Putable Bonds: These bonds allow the bond holder to redeem them
at face value pre-defined intervals. Putable bonds are basically the
inverse of callable bonds. Bondholders typically pay a premium for
putable bonds, which is another way of saying that the coupon rate on
putable bonds is lower because of the buyer is essentially paying for a
put option on the bond in addition to the bond itself.
Tax Status: Various bonds have different tax implications. For
instance, many government bonds around the world allow interest-income
to be tax-free, while corporate bonds are often taxed as ordinary income
is (it should be noted that tax rules are subject to the jurisdiction
one is in, as well as their own personal situation). When comparing
bonds, understanding the tax implications can provide a complete picture
on the yield that the bond will actually provide.
Survivor's Option. Survivors option bonds are those that, in the
event the bondholder passes away, allows the beneficiary to inherit the
bond with the option of redeeming it at par value. Bonds with a
survivor's option often have many conditions -- i.e. how jointly held
bonds are handled if one bondholder passes away, proof of death and
inheritance rights that must be provided, time limits on providing this
proof, limits the amount of the survivor's option --- and thus it is
paramount for bondholders with survivor's options to read the fine
print. Survivor's options are usually of interest to large estates that
are handled by professional executors.
Gold Price Forecast: Is Gold Moving Towards $817.50?
The Hidden Pivot methodology shows the current 3 leg pattern (A-B,
B-C, C-D) in play. The first leg started in September 2012 which
marked point A, and reached point B in June 2013. The second leg, a
bounce, was a very shortlived move from June 2013 (point B) till August
2013 (point C).
Since August 2013, gold is fulfilling a third and final leg of
a Hidden Pivot pattern. That third leg points to a final target of
In this methodology, one of the key things is that the midpoint of
the third leg (which is called “p”) is being confirmed by providing
exact stopping power by means of a bounce PRECISELY at point “p”. That
is the case for the current pattern, becasue gold has bounced several
times at the 1151.60 price point on the monthly chart. So far, it
confirms the validity of the pattern at play.
However, gold has not breached that price level “p” yet, providing a
chance that it will never break below it. In case 1151.60 is not being
breached on the monthly chart, it would decrease meaningfully the odds of achieving the final target of the pattern.
The key take-away for now is that traders and investors with a short
to mid-term investment horizon should carefully watch the 1151.60 USD
price level. It truly is a critical price level. In case gold would
stay above 1151.60 on a monthly basis, gold can be traded from the long side. However, if there would be a break below 1151.60 on the monthly chart, then the short trade is the right one until target D is reached.Rick Ackerman details his view on gold’s big picture, based on his Hidden Pivot methodology, in this video:
newdigital, 2015.03.18 20:34
The most important thing to realize is that when a full blown bear
market starts virtually all stocks and commodities drop including gold,
silver and oil. Knowing that, investors must be aware that when the
stock market starts its bear market the fear will rise and investors
will inevitably sell their holdings and this means we could see gold and
oil continue to fall much further from these levels before a true
bottom is in place.
Is this time different than the 2008/09 bear market? Yes, this time
we have possible wars starting, oil pipelines overseas being cut off,
counties and currencies failing and even negative bond yields in some
parts of the world – it’s a mess to say the least. There are a lot of
things unfolding, most seem to be negative for the economy.
The currency problems and possible war breakout will be bullish for
gold and oil. So if a bear market starts in equities, and a war or
currency fails gold and oil should rally while stocks fall.
But if we don’t have those sever crisis’ then if gold and oil break
below their critical support level which is the red line on the charts
and a bear market in stocks start you do not want to be long stocks or
Something Interesting in Financial Video April 2014
newdigital, 2014.03.31 14:16
Have you considered automated trading?
newdigital, 2015.03.21 14:13
Nikkei forecast for the week of March 23, 2015, Technical Analysis
The Nikkei as you
can see had a very positive week, closing above the ¥19,500 level. With
that being the case, we can pull back from here we think that there
will be plenty of value to be found, and we of course would be buyers.
We still believe that the Nikkei goes to the ¥20,000 level given enough
time, so obviously we don’t have any interest in selling. The Bank of
Japan continues to offer liquidity, which of course will be supportive
of the market. We believe the ¥20,000 will eventually give way to the
buyers and offer a longer-term buy-and-hold scenario as well.
newdigital, 2015.03.21 14:17
DAX forecast for the week of March 23, 2015, Technical Analysis
The DAX went back
and forth during the course of the week, ultimately showing a bit of
exhaustion. We don’t necessarily have a negative candle though, so
really at this point time we believe that a pullback is probably going
to be in the cards. We also recognize it as potential value, as the
market most certainly is bullish overall. However, we are overbought so
we look at pullbacks as potential buying opportunities. We have no
scenario in which we are comfortable selling the DAX as it has been so
newdigital, 2015.03.21 14:20
NASDAQ forecast for the week of March 23, 2015, Technical Analysis
The NASDAQ as you can
see broke higher during the course of the week, making fresh, new
highs. We got above the 5000 level finally, which of course is a very
bullish sign. With this, we believe that pullbacks continue to offer
value, and that the market should continue to go much, much higher. We
think that the 5000 level should offer a bit of support going forward,
and most certainly the 4800 level well. Selling isn’t even a thought at
this point in time as the uptrend is so well entrenched.