Category Archives: Stock market

Market update

The bullish sentiment is extreme at the moment. Take a look at S&P 500, which is above 2,000, trading at 2,007,71. Up +0,50%. Nasdaq is up +0,45%, trading at 4,582,90. DJIA is up +0,40%, trading at 17,137,36.

nasdaq logo

Europe is in a red territory today. Dax is down -0,17%, trading at 9,730,38. CAC 40 is down -0,38%, trading at 4,469,61. FTSE 100 is down -0,97%, trading at 6,788,70, and Stoxx 50 is down -0,46%, trading at 3,260,30.

Many are bullish on gold, but keep in mind that gold is still in a bearish territory, despite the higher lows in the chart since the end of last year. I watch gold every day, and I`m looking for 1,250 – 1,270 area. In the same time, I`m looking for 1,000. It can drop down below 1,000 too.

Crude oil (brent) is trading at 100,25, down -0,57%. Silver is down below 20,00, trading at 19,23, but this precious metal is trading up today +0,39%. Another precious metal that is following silver is the copper, which is up 0,88%, trading at 319,75.

It`s interesting to watch the dollar right now. The U.S dollar index which hit another 13-month high overnight are making big moves. I follow the U.S dollar daily, because the dollar can threat the gold. Maybe the dollar is the safe heaven, and not the gold? That`s why it is important to follow those two combined.

One of the main reasons why the dollar is moving so fast now, is all the action in the EU. What happens in EU will affect the pair EUR/USD. I think that Mario Draghi will be very important for the daytraders in the future.

Disclaimer: The views expressed in this article are those of the author and may not reflect those of Shiny bull. The author has made every effort to ensure accuracy of information provided; however, neither Shiny bull nor the author can guarantee such accuracy. This article is strictly for informational purposes only. It is not a solicitation to make any exchange in precious metal products, commodities, securities or other financial instruments. Shiny bull and the author of this article do not accept culpability for losses and/ or damages arising from the use of this publication.

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Longest bull market in 85 years!

The stock market were on fire yesterday, beginning the 3rd quarter with the bulls clearly in charge. New all time highs came in yesterday, as the DOW came within two points of the highly watched 17,000 mark.

Bull

The DOW closed the session at 16956,07, and that`s up +129 points, which is a new all time high. The S&P500 was rallying higher for the fist five hours yesterday, but after breaking through previous all-time high, the S&P 500 ended the session up +13 points. Nasdaq traded up +1,55%.

The Bank for International Settlements has declared that stock markets are in a «euphoric» state. The Swiss-based financial institution that acts as a counterpart to national central banks has urged central banks globally to begin tightening interest-rate policies now while economies are growing rather than wait for another recession, when it will be too late.

The interest-rate can`t go lower than zero, basically, and if another financial crisis should hit the economy, the central banks will be without weapons to boost the economy again, BIS said. U.S interest-rate were high at about 5,3% when last recession started in 2007, which means they were better prepared than now.

What makes people scared is the longest bull market we have seen in 85 years now. The U.S market has gone more than two years without a correction, or a 10 percent drop, and that makes people nervous about stocks these days. But we have not seen so much QE either.

Some investors say the markets are unprepared. «low-for-long» interest rate can come to an end, U.S unemployment falling and the Fed`s asset purchase «tapering» ending in the fourth quarter is a combination of complacency and illiquidity could turn a snowball into an avalanche.

We will see a lot of important news this week. Later today we have ADP Employment Change coming in. Economists estimate private companies added 205,000 payrolls in June. Other various labor market indicators such as initial jobless claims and the regional manufacturing surveys suggest another trend-like month for payroll growth, said BofA Merril Lynch economists.

Factory Orders: Economists estimate the trade deficit shrunk to $45 billion in May from $47,2 billion the month prior. The ISM import index fell back below the ne export orders index, which intimates that the deficit came back down in the month, note Wells Fargo`s John Silva.

In addition; Fed Chair Yellen speaks today at 11:00 a.m EST. Everyone is listening when Janet Yellen speaks. Listen very close to every word she say. Last time she said that the market is not in a bubble. I look forward to listen to her later today.

Reports today:
08:15 a.m EST ADP Non-Farm Employment Change
10:00 a.m EST Factory Orders m/m
10:30 a.m EST Crude Oil Inventories
11:00 a.m EST Fed Chair Yellen Speaks

Disclaimer: The views expressed in this article are those of the author and may not reflect those of Shiny bull. The author has made every effort to ensure accuracy of information provided; however, neither Shiny bull nor the author can guarantee such accuracy. This article is strictly for informational purposes only. It is not a solicitation to make any exchange in precious metal products, commodities, securities or other financial instruments. Shiny bull and the author of this article do not accept culpability for losses and/ or damages arising from the use of this publication.

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How to identify the trend in the market

Do you know where we are in the stock market right now? Is it cheap or is it expensive? We are near the all time high. What is the next? A stock market crash? A correction, or a consolidation? Where do we find answers to all those questions?

Indu

As an investor you need to read the map. You need to identify facts and not make any assumptions or any forecast. You can`t belive or “feel like” in the stock market. That`s why traders trade what they see, not what they think.

It is dangerous if investors and traders begin to assume. Predicting the market is a difficult, if not impossible, game. Reading the markets is an empirical science. Investors and traders with success in the markets requires serious study and analysis that is fraught with success and failures.

Failure is painful and should be looked upon as learning experiences. Technical analysis is an art form and the eye grows keener with practice. Success is the trading market is a great thing, but don`t get to smug about it. Study both successes and failures with an eye to the future.

It`s a great thing to identify the primary trend and then catch the big moves. Two thing drives the market: the fact and the psychology. The market tends to go much longer than expected (what we see right now) and much deeper as expected.

You have to understand that the markets are influenced by emotions and prone to over-react both up and down. Therefore; you have to concentrate on identification and following: identify the trend and then follow the trend and the trend is in place until proved otherwise.

This is when the trend will end, it is proved otherwise.

I will do it as easy as possible and show you a basic method of how you can identify the trend. This can be a good starting point for you to develop analysis guidelines that you are comfortable with and understand.

The first step to identify the primary trend is to identify the individual trend of the Dow Jones Industrial average (DJIA) and Dow Jones Transportation Average (DJTA), individually. Use peak and trough analysis in order to ascertain the identity of the trend.

An Uptrend is defined by prices that form a series of rising peaks and rising troughs. In the chart you will then see higher highs and higher lows.

A Downtrend is defined by prices that form a series of declining peaks and declining troughs. In the chart you will then see lower highs and lower lows.

Once the trend has been identified, it is assumed valid until proved otherwise. A downtrend is considered valid until a higher low forms, and the ensuing advance off of the higher low surpasses the previous reaction high.

Below is a chart of the Dow Jones Transportation Average. I printed out the chart yesterday june 26, 2014. As you can see, in 2012 there was a consolidation period, and in 2013, and so far in 2014, it is all in an uptrend, but where is the top? Where is the peak?

Tran

After a peak, a series of lower lows and lower highs will be formed to make a downtrend. In the downtrend we will then see a bounce back and have a secondary rally. After a downtrend, you have to look for high volume days, like high volume washout days. High volume days signal that a possible change is looming. Alone, a high volume washout day is not a buy signal, but rather an indication to monitor price action a little closer.

If you see a higher low later on, it is too early to call it a change in the trend. The change of a trend is not confirmed until the previous reaction high is surpassed. It need to cross the trend line to call it a change in the trend.
An uptrend is considered in place until a lower low forms and the ensuing decline exceeds the previous low. You can see the uptrend in the Dow Jones Industrial average chart below. You can see a series of higher highs, and higher lows.

Bears jumping in on the top can sit on top for a long time with more all-time-highs to come, but professional traders and fund managers do this to make an insurance for their portfolio, because it is impossible to predict a new change in the trend.

Indu

All you have to do is to catch the big moves. To do this, use weekly charts to establish reaction highs and lows. But weekly charts may not portray the details you need. One possible solution is to apply a short moving average to the price plot. A 5-day moving average could be applied to smooth the price series and still allow for the details.

What I am talking about is not a science. It is just ment to offer insights and guidelines from which to begin careful study of the market movements and price action. Look at the charts, read the map and catch the big moves.

Reports today:
09:55 a.m EST Revised UoM Consumer Sentiment
09:55 a.m EST Revised UoM Inflation Expectations

Disclaimer: The views expressed in this article are those of the author and may not reflect those of Shiny bull. The author has made every effort to ensure accuracy of information provided; however, neither Shiny bull nor the author can guarantee such accuracy. This article is strictly for informational purposes only. It is not a solicitation to make any exchange in precious metal products, commodities, securities or other financial instruments. Shiny bull and the author of this article do not accept culpability for losses and/ or damages arising from the use of this publication.

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Black Gold is up on Iraqi war

Brent traded at its highest level since September as militants in Iraq seized more territory and President Barrack Obama warned that the crises may spill over into other countries. Fighters from the Islamic State in Iraq and the Levant took control of Iraq`s border crossing with Jordan and Syria.

Black gold

Iraq pumped 3,3 million barrels a day last month. Saudi Arabia is the largest producer in the 12-member Organization of Petroleum Exporting Countries. U.S Secretary of State John Kerry arrived in Baghdad to try to get political leaders to set aside sectarian divisions and confront the growing threat.

John Kerry will spend the day meeting with Prime Minister Nouri al-Maliki, as well as ministers and party leaders. But why do the U.S and John Kerry spend so much time and money on this case? Kerry said at a press conference that they want a government in Baghdad «that is prepared to represent all of the people of Iraq, that is prepared to be inclusive and share power».

The U.S didn`t invade Iraq to stop and evil tyrant and spread democracy. There were no weapons of mass destructions, and all of the terrorists that had been in Afghanistan fled to Pakistan. Not Iraq. The U.S went to Iraq for oil.

Back then, the U.S oil production was falling, but now it is rising. From 1970 to 2008, oil production fell from 9,6 million barrels per day to just 5 million barrels per day. Michael Simmons cast doubt on the actual size of Saudi Arabia`s reserves in his book from 2005, so it was not only the U.S either. M. King Hubbard`s «Peak oil» theory and breakneck emerging market growth, explain even more what happened in Iraq.

Vice President Dick Cheney had previously been the CEO of Halliburton, and made about $40 billion from the Iraq war. All this makes it hard to belive that the U.S was not in Iraq for the oil. But, did the U.S get all the oil? Nope.

Iraq is the second largest producer in OPEC and the country`s oil production hit 3,25 million barrels per day last year. A level not seen since before 1990, but the U.S oil imports from Iraq are actually down.

The U.S imported 725,000 barrels per day from Iraq in 1999, but now it is only 340,000 barrels a day. So, if Iraq is producing more oil than it has in decades, where is all the oil going? The oil is going to China.

China`s crude imports from Iraq increased by 31% year-over-year to about 600,000 barrels per day in the first four months of 2014, and that`s twice as much as the U.S import from Iraq. Up from almost nothing a decade ago.

Iraq`s oil production is expected to reach 8 million barrels by 2035, and that`s not all: they forecast that 80% of Iraqi production would go to China. Some investors say that Baghdad to Beijing is the new Silk Road of the global oil trade.

China National Petroleum Corp (CNPC) has invested $4 billion in the Iraqi oil industry. They produced 299 million barrels from the country last year. Almost one-third of its overseas output. PetroChina and Sinopec have invested billions of dollars in Iraq as well, acquiring stakes in some of the country`s largest oil fields. So, why do the U.S and John Kerry spend so much time and money to try to stabilize Iraq?
The U.S came uninvited and the American people don`t want to be there, nor do the Iraqi people want the American people to be there. The U.S has sacrificed much so far; 4,500 dead American soldiers and about 120,000 dead Iraqi civilians. About $800 billion in upfront costs, with additional $1 trillion in military pensions, disability payments and debt service. Is it worth it?

Saddam could have stopped the mess in Iraq, but he is dead. The U.S killed him. Now, the Sunnis, the Shiite, and the Kurds can do it all alone. There is nothing America can do to bring two warring Islamic factions together or redeem its credibility. If someone should spend time and money on this mess, it should be China.

Reports today:
09:45 a.m EST Flash Manufacturing PMI
10:00 a.m EST Existing Home Sales

Disclaimer: The views expressed in this article are those of the author and may not reflect those of Shiny bull. The author has made every effort to ensure accuracy of information provided; however, neither Shiny bull nor the author can guarantee such accuracy. This article is strictly for informational purposes only. It is not a solicitation to make any exchange in precious metal products, commodities, securities or other financial instruments. Shiny bull and the author of this article do not accept culpability for losses and/ or damages arising from the use of this publication.

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Gold rally

 

Gold and Silver bulls were on the run yesterday as the precious metals rallied after the FOMC meeting, and this run-up was the best in a very long time. Gold hit the key psychological resistance at $1,300.

Gold

Investors are buying this precious metals as a safe-heaven amid risk aversion in the market place, a slumping dollar and strong technical buying. Buy stop orders were triggered at technical levels to accelerate the advance in gold and silver prices.

Spot gold was last quoted up $40,20, trading at $1,318, and July Comex silver is up one dollar to $20,84 an ounce. The civil war in Iraq remains a major factor and continues to prompt risk aversion among traders and investors, and in turn safe-heaven buying in gold.

Crude oil prices are rallying on worries about Iraqi crude oil exports being reduced and investors are worried that the violence in Iraq could spread to other Arab nations. Fed Chair Janet Yellen`s comments at her press conference rallied stock, bond and the precious metals markets. In addition; she said that the interest rates are not going to be raised any time soon.

But what can we expect in the future? Well, I like to take a look at Japan, because they know how to print money. Despite the significantly bigger hammer it`s using to attempt to create inflation, growth and inflation have remained muted.

Look at the inflation in Japan. It remains low, year after year after year. Nothing is happening. That`s strange because they have printed so much money. This is probably what we will se in the U.S too. Low inflation and worst of all; deflation.

ECB is on the way to print money too. It looks like this will be a deflationary world. What a trend QE is! So, what will happen if the Chinese real estate prices start to collapse? And slowing in Germany and further slowing in the real estate recovery in the U.S?

The stock market will simply continue to edge up if none of these events come to pass, because right now, there`s nowhere else for investors to go. One of the things Fed Chair Janet Yellen said after the press conference was that the stock market is at a good valuation and is not a «bubble».

Many people were listening and bought stocks with both hands. CNBC and other News channels say that Yellen has given a «green light» for stock traders to buy. Remember; we are five years into a bull market, and they are talking about «green light»?

I have seen the same things going on many times. Again and again. When we are at the top, like we are now, everyone is bullish and tell you to jump aboard and buy stocks. I my opinion, we are now at the top on the trend from 2000 and 2007, and that`s pretty scary. People tend to do the same thing; they buy on tops and get smashed on bottoms. I just want to warn you; be cautious.

This is the nature. It reminds me of the Word Cup Champion in Soccer from 2010; Spain. The winners are out of the World Cup 2014, as they goes from the top to the bottom. Many of the players hail from Real Madrid and Barcelona, which is two of the soccer`s richest clubs. Most of the players in Spain earn more in a year than a Spanish worker earns in 40 years. You couldn`t belive that when you saw they lose 2-0 against Chile. They are simply not hungry enough. The European championship from 2008 also saw a humiliation 5-1 loss to Holland earlier this week. Six year on the top is now over.

I`m watching the markets very closely right now. As you may know, bull markets come to an end, and so do bull market rallies. When the last buyer is in the game, it is over and the correction or a big bear market comes. But how can we know when that day is coming? What is the sign we should look for? I will talk about that next week. In the meantime; many soccer players are now working hard to get the GOLD!

 

Disclaimer: The views expressed in this article are those of the author and may not reflect those of Shiny bull. The author has made every effort to ensure accuracy of information provided; however, neither Shiny bull nor the author can guarantee such accuracy. This article is strictly for informational purposes only. It is not a solicitation to make any exchange in precious metal products, commodities, securities or other financial instruments. Shiny bull and the author of this article do not accept culpability for losses and/ or damages arising from the use of this publication.

 

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Rolls Royce up 6% on buybacks

 

All the commodities are up today. Silver up +0,92%, Gold +0,76%, Copper +0,23% and Oil (brent) is up +0,31%. Nikkei is also up today, as it advanced +1,62%. ASX 200 is up +1,59%. Europe is in a green territory too. Stoxx 50 is up +1,11%, FTSE 100 is up +0,83%, CAC 40 +0,89% and DAX is up +0,78% to 10,008,17 points right now (13:14:00 CET).

rolls_royce_2-wallpaper-1920x1080

(Picture: Rolls Royce)

The crude oil price have never been so high this year and that`s because the conflict that is going on in Iraq right now. The Iraqi government forces battling Sunni militants for control of the country`s biggest refinery. The rally in Asia and the rest of the global stock market is because of the FOMC meeting yesterday.

The stocks rallied after the U.S Federral Reserve signaled that rising inflation won`t trigger an interest rate rise any time soon. investors liked it and sent the European bourses up sharply today. Asian equities posted strong gains, and S&P 500 rose to another record high yesterday.

The Fed Chair Janet Yellen slashed its 2014 growth forecast but expressed confidence that the economy will continue to recover steadily in the coming years, which could warrant a slightly more aggressive pace of interest rate hikes when they start.

That probably won`t be until the middle of next year, and Fed Char Janet Yellen dismissed the resent rise in inflation to its highest in over a year as «noise». Some people were speculating that the Fed would have to come up with a more hawkish commentary and obviously they have been disappointed.

But there were one loser yesterday after FOMC meeting yesterday; the dollar, which fell against major and emerging market currencies, in tandem with U.S Treasury yields, hitting a five-year low against sterling.

A big winner in the European stock market among the blue-chips was Rolls Roys RR.L. An auto car maker for the luxus market. The stock rose 6% after it announced a one billion pound ($1,69 billion) share buyback.

 

Reports today:

08:30 a.m EST Unemployment Claims

10:00 a.m EST Philly Fed Manufacturing Index

 

Disclaimer: The views expressed in this article are those of the author and may not reflect those of Shiny bull. The author has made every effort to ensure accuracy of information provided; however, neither Shiny bull nor the author can guarantee such accuracy. This article is strictly for informational purposes only. It is not a solicitation to make any exchange in precious metal products, commodities, securities or other financial instruments. Shiny bull and the author of this article do not accept culpability for losses and/ or damages arising from the use of this publication.

 

 

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All eyes on FED today

 

European stocks advanced today as investors awaited a Federal Reserve monetary-policy decision. The Stoxx 50 Index was up 0,21 percent earlier today. DAX is up 0,15 percent. Gold is trading at $1,271,40. Silver at $19,73. Crude oil (brent) $113,55.

The dollar held firm today after a surprisingly high reading for U.S inflation raised expectations that Federal Reserve Chair Janet Yellen could strike a more hawkish tone on the monetary policy outlook. U.S futures are all up today.

Fed

The Fed is expected to chop another $10 billion from its monthly bond purchases at a meeting on Tuesday and Wednesday. Many investors will be focused on whether officials tip their hand on longer-term plans for interest rates.

Fed Vice Chair Stanley Fischer will release updated projections for the economy and for when they think rates should finally rise from near zero. The policy-making Federal Open Committee (FOMC) started its meeting Tuesday at 10 a.m Eastern, and they discuss how to raise rates when the times comes.

Fed Chair Janet Yellen will talk about employment and inflation. More than 200,000 jobs were added in each of the last four months. Inflation rate is still below the Fed`s two percent target, which is their goal.

Unemployment is now 6,3 percent which is impressive. March expectations was 5,6 – 5,9 percent. They could nudge up their 2014 inflation forecasts from about 1,5 percent and cutting their GDP forecast.

Reports today:

08:30 a.m EST Current Account

10:30 a.m EST Crude Oil Inventories

02:00 a.m EST FOMC Economic Projections

02:00 a.m EST FOMC Statement

02:00 a.m EST Federal Funds Rate

02:30 a.m EST FOMC Press Conference

 

Disclaimer: The views expressed in this article are those of the author and may not reflect those of Shiny bull. The author has made every effort to ensure accuracy of information provided; however, neither Shiny bull nor the author can guarantee such accuracy. This article is strictly for informational purposes only. It is not a solicitation to make any exchange in precious metal products, commodities, securities or other financial instruments. Shiny bull and the author of this article do not accept culpability for losses and/ or damages arising from the use of this publication.

 

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