Press review - page 469

[Sergey Golubev]

U.S. Stock Market's 2017 Opening Round Will Test The Trump Rally (based on the article)

When good news is actually bad news

"Stock rises based on feel-good optimism have a history of hitting a factual air pocket, and dropping suddenly and precipitously. This market may not feel like a bubble, but the characteristics of the run-up fit."

All-time high stocks offer proof

"This market’s fragility is shown by the number and behavior of stocks now trading in or near all-time high (ATH) territory. Too many of the hundreds of ATH stocks have risen on mediocre volume, had trouble establishing a higher trading range and/or simply been dragged up by a mega-group reaction."

The bottom line

"New year, new thoughts. In the stock market, what seems powerful and assured, like the past 7+ weeks’ run-up, could suddenly begin to feel tired and temporary. Add in a 5-10% slide and investors’ convictions could be undermined, bringing back the question tinged with concern."

S&P 500 Daily chart:

 

NASDAQ Daily chart:

[Sergey Golubev]

U.S. Bank Stocks Have Bubble Trouble (based on the article)

"Banks are back. Of all the post-election stock stories, “Buy banks!” is the most popular."

JP Morgan Chase
 

"The largest U.S. bank's stock performance looks like that of a smaller growth company with positive news. The fast rise and the large distances from the 50-day (orange) and 200-day (blue) moving averages are typical "stretch" measures that can act as a drag on a further rise for the time being. Often, such a stock needs to establish a new foundation by backing and filling before it can resume an uptrend."

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JP Morgan Chase: possible daily correction; weekly overbought 

As we see from the chart below, the daily price is on bullish market condition located within the following narrow support/resistance levels:

• 87.38 resistance located on he border of the daily bullish trend to be resumed, and
• 84.19 support located on the border between the daily correction to be started. 

Weekly price is located far above 200 period SMA in the primary bullish area of chart with 87.38 resistace level to be broken for the bullish trend to be continuing. But Stochastics indicator is estimating the overbought condition, and if the price breaks 77.28 support to below on weekly close bar so we may see the correction to be started for at least half a year in 2017 for example.

[Sergey Golubev]

USD/CAD Technical Analysis: At Strong Support For 2017 (based on the article)

• "The last week of 2016 trading has brought about USD weakness. As we come into the Macro Opening Range of 2017, traders will do well to keep an eye on a breakout above the 50% retracement of the 2016 range. The market tested the key 50% Fibo in mid-November but failed to close above it, and we’ve seen a similar occurrence in late December."
• "However, a close above the 50% Fibo (1.3575) in the first weeks of 2017 could usher in another strong move higher like we’ve seen in the first trading month of the year in USD/CAD in the prior couple of year."
• "In addition to watching the 50% retracement as resistance and validation of trend continuation, the most important component on the USD/CAD chart remains the strong bounce off of multiple levels of support all near 1.31/3075. This price zone combined the 200-day moving average at 1.3087, the 61.8% Fibonacci retracement of the August – November price range, the Ichimoku cloud base, and the combination of the Modified Schiff Pitchfork / Trendline support drawn off key pivots of the May, June, and August. The bounce came as the market digested the Federal Reserve’s actual hike and added a more hawkish Dot Plot."

[Sergey Golubev]

Key Levels To Watch In The U.S. Dollar (based on the article)

"The chart below shows the former trading range between 92 and 100 in the U.S. Dollar Index. The dollar's break to the upside creates a bullish signal as long as the Dollar Index stays above the 100 support level. A strong break below the 100 level would be necessary to negate the bullish signal. A pullback or re-test of the 100 support level is certainly possible and wouldn't negate the bullish signal provided the Dollar Index doesn't break below the support."

"The long-term U.S. Dollar Index chart shows the former trading range and recent breakout. As long as the Dollar Index holds above the key 100 support, there is very little resistance overhead all the way up to 120, which marked the highs in 2001 and 2002. Due to its history and psychological significance, the 120 level may act like a magnet for the U.S. Dollar Index over the next couple of years."

[Sergey Golubev]

Key Levels To Watch In Euro (based on the article)

"The euro, which trades inversely with the U.S. dollar, is also showing signs of a nascent breakdown from its two year-old trading range. 1.05 is the key support level to watch - if this level is broken convincingly, further downside may be ahead for the euro along with more upside for the U.S. dollar. If the euro breaks back above this level, the bearish signal would be negated."

"The longer-term euro chart shows the former trading range and breakdown in a larger context. If the euro stays below the 1.05 support level, it may try to gun for the long-term price target and support level at .8500 - the 2001 and 2002 lows. Any weakness in the euro would help to support the U.S. dollar." 

[Sergey Golubev]

Forum on trading, automated trading systems and testing trading strategies

LEVERAGE a Hidden key of Success!!!

Waseem Raza, 2017.01.02 17:46

According to FXCM Inc. and Gain Capital Holdings Inc 68% peoples loose because of high leverage but after research you will see actual figure is vary around 90% peoples loose in Forex. 

Bloomberg Market says: 

"Twenty million individual investors, some making bets of just a few hundred dollars, globally trade $400 billion a day, estimates Javier Paz, an industry analyst at Aite Group LLC, a Boston-based financial research firm.

The great lure of forex trading has less to do with the movement of the currencies themselves and more to do with leverage. Using leverage of 50:1, an investor can amp up a $100 wager so it can pack the punch of a $5,000 bet. That means traders can double their investment on a 2 percent currency move in their favor."

 If leverage is basic foundation of success and main part of money management then what is correct leverage 

• 1:1 
• 1:50 

A lowest leverage shows 5% return system and if no leverage then it means less then 3% return rate on capital if it makes sense then need debate on it and need expert's comments on it. 

For reading purpose old Bloomberg Article  

Forum on trading, automated trading systems and testing trading strategies

Press review

Sergey Golubev, 2016.12.26 10:34

True Leverage (based on the article)

What is Leverage in Forex?

Leverage is your total maximum possible borrowing ratio.

What is Margin in Forex?

Margin is the minimum cash deposit required by the broker to cover any open trades. It is sometimes expressed as a percentage.

What is Position Size in Forex?

"Position size" is the quantity of what is being traded.

Risk of Margin Call

A "margin call" is when your broker tells you that you do not have sufficient funds in your account to cover all your liabilities.

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Leverage in forex = Purchase Power/Capital Invested = $100,000/$1,000 = 100

[Sergey Golubev]

USD/CNH Intra-Day Fundamentals: Caixin Manufacturing PMI and 90 pips range price movement

2017-01-02 01:45 GMT | [CNY - Caixin Manufacturing PMI]

• past data is 50.9
• forecast data is 50.9
• actual data is 51.9 according to the latest press release

if actual > forecast (or previous one) = good for currency (for CNY in our case)

[CNY - Caixin Manufacturing PMI] = Level of a diffusion index based on surveyed purchasing managers in the manufacturing industry.

==========

From official report:

• "The seasonally adjusted Purchasing Managers’ Index™ (PMI™) – a composite indicator designed to provide a single-figure snapshot of operating conditions in the manufacturing economy – picked up from 50.9 in November to 51.9 at the end of 2016. Although modest overall, the latest reading pointed to the fastest rate of improvement in the health of the sector since January 2013."

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USD/CNH M5: 90 pips price movement by Caixin Manufacturing PMI news event

 

[Sergey Golubev]

Intra-Day Fundamentals - EUR/USD, GBP/USD and S&P 500: ISM Manufacturing PMI

2017-01-03 15:00 GMT | [USD - ISM Manufacturing PMI]

• past data is 53.2
• forecast data is 53.7
• actual data is 54.7 according to the latest press release

if actual > forecast (or previous one) = good for currency (for USD in our case)

[USD - ISM Manufacturing PMI] = Level of a diffusion index based on surveyed purchasing managers in the manufacturing industry.

==========

From official report:

"The December PMI® registered 54.7 percent, an increase of 1.5 percentage points from the November reading of 53.2 percent. The New Orders Index registered 60.2 percent, an increase of 7.2 percentage points from the November reading of 53 percent. The Production Index registered 60.3 percent, 4.3 percentage points higher than the November reading of 56 percent. The Employment Index registered 53.1 percent, an increase of 0.8 percentage point from the November reading of 52.3 percent. Inventories of raw materials registered 47 percent, a decrease of 2 percentage points from the November reading of 49 percent. The Prices Index registered 65.5 percent in December, an increase of 11 percentage points from the November reading of 54.5 percent, indicating higher raw materials prices for the 10th consecutive month. The PMI®, New Orders, Production and Employment Indexes all registered new highs for the year 2016, and the forward-looking comments from the panel are largely positive."

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EUR/USD M5: 75 pips range price movement by ISM Manufacturing PMI news events

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GBP/USD M5: 50 pips range price movement by ISM Manufacturing PMI news events

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S&P 500: range pips price movement by ISM Manufacturing PMI news events

[Sergey Golubev]

USD/JPY Intra-Day Fundamentals: Nikkei Japan Manufacturing PMI and 51 pips range price movement

2017-01-04 00:30 GMT | [JPY - Manufacturing PMI]

• past data is 51.9
• forecast data is 51.9
• actual data is 52.4 according to the latest press release

if actual > forecast (or previous one) = good for currency (for JPY in our case)

[JPY - Manufacturing PMI] = Level of a diffusion index based on surveyed purchasing managers in the manufacturing industry.

==========

From official report:

• "The headline Nikkei Japan Manufacturing Purchasing Managers’ IndexTM (PMI)TM is a composite single-figure indicator of manufacturing performance. It is derived from indicators for new orders, output, employment, suppliers’ delivery times and stocks of purchases. Any figure greater than 50.0 indicates overall improvement of sector operating conditions."
• "The headline PMI posted 52.4 in December, up from 51.3 in November, signalling a sharper improvement in manufacturing conditions in Japan. In fact, the latest reading was the highest since December last year and contributed to the strongest quarterly average since Q4 2015. The higher figure reflected increases in output, new orders and employment."

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USD/JPY M5: 51 pips price movement by Nikkei Japan Manufacturing PMI news event

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Nikkei 225 Index: pips range price movement by Nikkei Japan Manufacturing PMI news event

[Sergey Golubev]

CRUDE OIL Short-Term Technical Analysis: intra-day ranging bullish or the secondary correction (adapted from the article)

H4 price is located above 200 SMA with near and above 100 period SMA (100 SMA) on the border between the primary bullish and the secondary correction:

• the price was bounced from 58.47 resistance level to below with 55.42 support level to be testiing for the secondary correction to be started.
• "The oil market may have provided the first legitimate head fake in markets for 2017. At the beginning of Tuesday’s trading session, the first official trading day in 2017, as many markets were observing New Year's Day on Monday, Oil began trading to 18-month highs by trading above $55 a barrel. The initial move higher had credibility as OPEC’s deal compliance seemed to be coming to fruition on initial reports of firm’s production after the official start of the production cuts agreed to in Vienna in late November."
• "Shortly after midmorning trade, oil had completely reversed earlier gains and eventually closed nearly 3% lower on the day. The aggressive reversal aligned with the volatility pattern we mentioned in the late December article the discussed in developing rising wedge pattern that can either be in ending diagonal preceding sharp losses or a leading diagonal that would favor aggressive gains. Either way, volatility could be a mainstay in the energy market in January 2017."
• "Should the price continue to hold above this level on a closing basis, we will favor a move toward the top of the channel near $59/60 per barrel.Should a reversal develop in the price of Crude Oil, we would be on the watch for the price to break down through the rising support levels mentioned above at $49/45. Only a break below this zone would take us from Bullish to Neutral. Until then, we will favor eventual upside heading into 2017. Regardless, we will expect further volatility in this key market."

• If H4 price breaks 58.47 resistance level to above on close bar so the bullish trend will be resumed.
  
• If price breaks 55.42 support to below on close H4 bar so the secondary correction within the primary bullish market condition will be started.
  
• If not so the price will be ranging within the levels.

Resistance	Support
58.47	55.42
N/A	54.75