Entries Tagged as 'trading'

What does the new frontier of negative interest rates in the global arena mean for investors?

What does the new frontier of negative interest rates in the global arena mean for investors?

What does the new frontier of negative interest rates in the global arena mean for investors?

 

Cindy Yeap / The Edge Malaysia discusses “What does the new frontier of negative interest rates in the global arena mean for investors?”

“For RHB Research Institute executive chairman and chief economist Lim Chee Sing, NIRP “can only be seen as a temporary expedient to hold up financial markets”, albeit one that has little room to push for more economic growth in this relatively mature stage of the growth cycle.

“That means rising investment premiums and heightened market volatility will likely be the order of the day in the days ahead. Portfolio investors may have no choice but to build some degree of defensiveness into their portfolios to balance out the risks. This implies rising appetite for high-yield stocks,” Lim says.

“Even dividend stocks have caveats in the days ahead, largely due to their rich valuations vis-à-vis tougher conditions to grow at the same rate as before. For example, sin stocks might have to contend with higher taxes; the fees for telecommunications spectrum refarming have yet to be revealed; and consumer stocks have to contend with the possibility of a further tightening of consumer spending. Then, there is the higher labour cost.

“The focus should be on stocks with an improved business model, reasonable earnings visibility, strong cash flow, a dividend policy and, thus, sustainable dividend payments. Of course, one cannot ignore valuations but rich valuation stocks are still susceptible to a selldown should the global economy take a turn for the worse,” Lim adds.

“Gerald Ambrose, CEO of Aberdeen Islamic Asset Management Sdn Bhd, too, noted expensive valuations after a good run in recent years.

“We are keeping a close eye on notable high-yield companies, like the cellular phone companies, the brewers, tobacco companies and the REITs (real estate investment trusts). We’re currently about halfway though the 4Q2015 results season and to be honest, a lot of the better-managed companies have been able to find efficiencies to enable dividend payout to remain high. However, after outperforming for over a year, a lot of the high dividend yield companies are hardly cheap,” he says.”

BOTTOM LINE: Focus your strategy on yield and gold. Gold is an alternative when interest rates are negative adjusted for taxes and inflation.

Mover Mike Hit 2,000,000

After an incredible June, Mover Mike hit 2,000,000 page views. I have been blogging since 2004 and it is nice to see that more people are finding this blog. Sometimes, I have considered quitting, thinking why bother, no one reads me. However, conservative fiscally, Libertarian socially, this blog joins many others who don’t like the path the U.S. is on.

No longer can we discuss things rationally and heatedly.  Now it seems the play book says to ignore the message, savage the messenger. We are seeing that currently with Trump and we read that Hillary hasn’t answered the press questions in two weeks. AND…more and more people are considering leaving the country.

Mexico”sends” their unemployed to the U.S.. How long will 93,000,000 unemployed and under employed wait to move south? How long will the drought stricken  in the south west wait to move? What happens when the U.S. becomes like Greece and can’t feed the 43,000,000 on EBT?

Stay tuned, dear reader. I hope to cover it and provide some answers. Thanks for reading Mover Mike

Emerging Markets

Emerging markets

Emerging markets

Wikipedia defines emerging markets as “The four largest emerging and developing economies by either nominal or PPP-adjusted GDP are the BRIC countries (Brazil, Russia, India and China). The next five largest markets are South Korea, Mexico,Indonesia, Turkey, and Saudi Arabia...”

Martin Armstrong warns, “The emerging markets have issued debt in dollars which is a currency they cannot print and do not control. This hard-currency debt has tripled in the last decade and is split between $3.1 trillion in bank loans and $2.6 trillion in bonds. This will ripple through the banks causing massive new losses just as the Cyprus banks held Greek debt. This time, it will be the debt of all emerging markets. We are looking at a drastic scale of the biggest cross-border lending sprees of the past two centuries.

“A large portion of this emerging market debt was taken out at real interest rates of 1% on the implicit assumption that the Fed would continue to flood the world with liquidity for years to come. This has made the emerging markets vast borrowers dollars so in a trading position they are “short dollars”. This is the greatest short-position on a currency on the boards and when the dollar RISES, they will face the margin call from Hell itself. This will set off another banking crisis for bankers always buy the high and sell the low. They have NEVER learned even once from any economic crisis.”

Read more at Coming Emerging Market Debt Meltdown

 

Crude Oil Slides to Multi Year Lows and What to Expect

Looking back to 2007 (seven years ago) we have seen the price of crude oil perform incredible price swings. No matter the time frame in which we observe price when an extreme price spike takes place due to news/event, statistics show that half if not all the event driven price spike will eventually be negated in the future.

The perfect example of this is the rubber band affect. If you pull an elastic band in one direction, eventually when it breaks or it’s released, the band will retrace back to the norm and then go in the opposite direction. You can see this on the chart from 2008 high of nearly $150 to the 2009 low of $40. Price then lost is momentum and has been somewhat range bound from 2011 – 2014 right in the middle at $95 per barrel.

Observing the price chart of oil below there are many technical indicators and patterns at play. The first important pattern to identify is the series of higher lows shown with the green trend line sloping upwards.

A rising trend line that has multiple pivot lows (bounces up the trend line) the price of oil creates what I call a perfect storm for waterfall type selloff. This is exactly what we have seen over the past 3 months.

Each time one of the pivot lows are breached, the stop loss orders are triggered for investors. This causes a flood of sell orders forcing price lower to fall below the next pivot low etc… This may look and sound easy to trade, but keep in mind this is a monthly chart, and short term traders are not trading this long term time frame. Only investors would be focusing on a move that would take months to a year to unfold.

The second key indicator to look at is the 61.8% Fibonacci retracement level. This level typically acts as a support level for a small bounce usually. Because the 61.8% level is also in alignment with a previous consolidation, and a pivot low, both which have been highlighted on the chart, I suspect a bounce around the $65 level should take place.

The final potential bottom could take place near the 2009 low. It is a long way away but anything is possible and what we think is most unlikely to happen is exactly what the market does sometimes.

crudeoil

 

Crude Oil Conclusion:

In short, I think what crude oil is doing is healthy and needed for several reasons. If I let my bias/option shine through, I feel the big oil and gas companies have been taking advantage of us with their ridiculously high gas prices over the last seven years.

The multi-billion dollar, cash rich corporations need a little wakeup call. And the hair cut in their share price should be great for investors. This allows them to build or re-enter new positions at a better price with a higher dividend yield.

I will be watching the hourly and daily charts for a bottoming/bounce formation in the next week. But any bounce could be short lived as sellers appear to be aggressive still.

Receive my personal trade alerts via email and SMS text alerts at www.TheGoldAndOilGuy.com with a 50% Black Friday Offer Today

Chris Vermeulen

Sincerely,

Chris Vermeulen
Founder of Technical Traders Ltd. – Partnership Program

The Big, Bold and Ugly

Since July of 2014 the big cap stocks have continued to make new highs as investors dump more and more money into the stock market. Overall bullishness on the stock market is now at extremely high levels which typically happen before a major stock market correction and sometimes start a full blown bear market.

While the average investor continues to become more and more bullish, the market breadth/health has been rapidly deteriorating. Unless you are market savvy you would not know how weak the market actually is and this always leads to strong losses and drawdowns for the uninformed investor.

What we know and most do not about this rising market, is that the big cap stocks in the SP500 index appear to be holding the overall market up and masking the weakness. So as investors become more bullish at these lofty levels putting more money into generic funds that push the SP500 higher, we see strong selling and unwinding of the more leveraged position like small cap stocks.

Over the past couple years the SP500 has formed a series of bullish corrections and running corrections. But the current formation is that of a bearish mega phone pattern and these typically point to lower prices.

SP500 BIG CAP STOCKS:

spy1

 

THE BOLD STOCKS:

I have always liked to follow the NYSE index because its a basket of 1900 stocks with 1500 of them being U.S companies. Its breadth/strength makes it a much better indicator of the market performance than the more narrow indexes with less stocks.

While this index remains in a bull market, it only looks as though it’s a few months away from a possible reversal and confirmation of a new bear market.

nyse

 

THE UGLY:

If you have ever read Stan Weinstein’s book then you know he followed GM share price closely. He believed that what GM did, the stock market would follow, to some extent. GM was/is an early leader of the US economy and stock prices in general.

The chart below paints a clear picture of the Stage 1 Accumulation in 2011- 2012, and also of the Stage 3 Distribution phase in 2013 – 2014. GM shares have traded down literally from the first week of the year and have now broken below critical support. Things could get interesting…

GM1

 

MY TRADING CONCLUSION:

In short, I remain bullish on the stock market with both my short term and investing outlook but I am very cautious and have closed out several large positions recently. Cash is king and I plan to protect, rather than invest my nest egg when risk is higher than normal.

Short term trading where trades only last 3-10 days is the way to go at this stage of the game. Some recent winning ETF trades with my ETF newsletter www.TheGoldAndOilGuy.com have been in SCO, a quick bounce trade in UCO, REM, and our current trade as of last week EEM.

The majority of my investment capital is traded with my automated trading system. It trades the S&P500 index directly in my brokerage account catching these 3-10 day swings in the market saving me time while reducing my emotional attachment to the market.

Chris Vermeulen

Sincerely,

Chris Vermeulen
Founder of Technical Traders Ltd. – Partnership Program

Alibaba VS. Amazon – Which One You Should Buy

Now Playing

Alibaba VS. Amazon – Which One You Should Buy

Adam Hewison – MarketClub

Hello traders and MarketClub members everywhere! Today, I will be looking at Tesla (NASDAQ:TSLA), who just announced their earnings and future growth prospects and Alibaba (NYSE:BABA), who just made new highs yesterday, since going public in its recent IPO offering. I will also be delving into Amazon (NASDAQ:AMZN) and analyzing if the love affair is over.


Flight To Quality

Today’s DJIA is down over 300 points. Dropping oil prices, slowing economies around the world, stock markets falling, and Ebola have caused investors to flee to the safety of treasuries. This is what a panic looks like and is not sustainable, IMO.

Flight to quality - daily

Flight to quality – daily

Flight to quality - weekly

Flight to quality – weekly


Ominous Looking Chart

Ominous DAX

How to Use CQG Q Trader

Trading with CQG Q

CQG Q

 

Have you ever watched poker on television? You always see the player that is the biggest risk takers win the big pot, and then walk away with the tournament championship. You decide that you can do that also. You play some hands, lose a bunch of money and do not understand what happened. Poker is not an easy game to play it involves several different levels of knowledge that you do not see on television. Some of the unseen information is experience accumulated by the players to help them make decisions to help them win the tournament. It takes a lot of time to figure out a strategy to win.

Building strategies is the key to developing a profitable method to trade the markets. It takes time and lots of information. It also takes the use of some gut instincts, and knowledge of the market place. Using the CQG Q Trader is a great way to build a profitable market strategy.

  • Exchanges

CQG is connected to multiple exchanges across the world, giving the trader an opportunity to trade on a variety of different exchanges. You will also have access to trading information that can help you see trends that are happening in the marketplace and adjust your strategy accordingly.

  • Features

CQG has outstanding tools that help you get key information on the market with the push of a button. Some of the features include price ladders, the ability to trade from charts, smart orders, routing, application, quote displays, studies, and charts. CQG features give you the chance to test different strategies by using back test trading systems.

  • Order entry

Trading can be very difficult that is why it is very important to get information immediately. CQG’s interfaces have several options that help you make decisions quickly, which is important during the trading day. The options that are available to use are the DOM Trader, Enhanced Quote Spreadsheet, Order desk, Order Ticket, SnapTrader, and Spreadsheet Trader.

  • Order type

CQG offers the some of the order types that other trading platforms offer, such as market, limit, stop, and stop limit. CQG also offers types of orders. Examples of these orders are; DOM-triggered setup, Iceberg, Trailing stop, bracket, study-following orders, Funari, and algorithmic. All of the other types have opted for the length of time that you want your order to last. The period of time can include the whole day, or you can give the order a time to begin and end during that trading day.

  • Pricing

CQG is a well-priced trading platform, which allows you to place an unlimited amount of trade during the month for one flat fee. You can pay twenty-five hundred dollars a month, this helps to maintain your order structure and it gives you the flexibility that CQG allows you to have as a trader. The first option may be too much money to invest in the software, but there is a lower cost option. For less than six-hundred dollars, you can get some of the analysis to help you with your trading day. CQG Q trader offers you many of the features the full scale CQG offers for only $40 per month.

  • Platform

CQG has three different types of trading platforms for you to choose from to work with. CQG Integrated Client allows you to trade on a professional level with such features such as market data, analytics, and order routing. CQG Q Trader gives you powerful tools that allow you to monitor and trade in the market place. CQG Trader is a great option if you do not want to use all the technical tools that some people use.

  • Partners

CQG’s gateway services give you the opportunity to connect with several electronic exchanges. Some of the forty exchanges that are available through CQG are Bell Potter, Citi, Dorman Trading, Crossland LLC, J.P. Morgan, Rosenthal Collins Group, LLC, Vision, Financial Markets, and several other exchanges, giving you plenty of choices. CQG is looking to expand the list of their exchanges, if you have any recommendations they will add that exchange to their list.

By using CQG Q Trader you can build a profitable security strategy with a minimal amount of risk. The best part about trading securities is that you have all the information given to you, and you do not have to depend on luck like you do with poker.

Disclaimer – Trading Futures, Options on Futures, and retail off-exchange foreign currency transactions involves substantial risk of loss and is not suitable for all investors. Past performance is not indicative of future results. You should carefully consider whether trading is suitable for you in light of your circumstances, knowledge, and financial resources. You may lose all or more of your initial investment. Opinions, market data, and recommendations are subject to change at any time.
About the author: Ilan Levy-Mayer is the VP of Cannon Trading Co, Inc. and CEO of LEVEX Capital Management. He has developed many different systems and has the experience from the design stage, execution stage, technology aspects; assisting clients evaluate systems and much more.

Leading Sectors Breaking Down – Internet & Social Stocks

In July I showed talked about the Russell 2K index and how it was underperforming the broad market. I went on to explain what it likely meant was in store for the US stock market this fall. The outlook was negative, just in case you were wondering.

This week I want to talk about two different sectors that have often lead the broad market in rallies and corrections over the years. These sectors have underperformed the broad market much like that of small cap stocks, and this does not bode well for investors going into fall.

In the analysis below I use Bollinger bands and trendlines. Using only these tools keeps the charts clean and easy to understand. In short, once a trenline has been broken that is the first early warning that a trend may be coming to an end. The second is the break of a Bollinger band.

A combination of these can be taken as a trend reversal and likely the start of a multi week or month correction. This will depend on the chart time frame you are reviewing though. I use a similar method to identify trends with my automated futures trading system.

 

INTERNET INDEX FUND ANALYSIS

fdn-chart

 

SOCIAL MEDIA INDEX FUND ANALYSIS

Futures Trading System

If you are wondering what exactly these two charts are pointing to… let me share my outlook.

Because we have seen the support trend lines broken to the downside this month, and the fact that price has pushed more than 2 standard deviations from its norm, the odds favor more downside is to come.

From years of experience trading price patterns and breakouts I know that when price breaks to the downs side and triggers fear among its investors it is typically your best time to sell short so you can profit from the falling prices. Fear is the most powerful force in the stock market and it must be traded much differently than when prices are rising.

Although I feel the broad market is still within its uptrend, these two underperforming sectors may just continue to sell lower. Obviously once the broad market rolls over, these sectors should fall even faster to the downside but until then, they could chop around and grind their way down.

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Chris Vermeulen

Sincerely,

Chris Vermeulen
Founder of Technical Traders Ltd. – Partnership Program

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