Monthly Archives: November 2015

Review of November 23-27, when the chances of the Fed raising rates rise. Forecast for the week November 30 – December 4

Last week, stock indices showed mixed trends. US Dow Jones and the NASDAQ finished it virtually unchanged (down -0,09 YM and 0% for the NQ). Published macroeconomic data (GDP revision upwards to 2.1% increase in orders for durable goods above forecasts of 3.0 vs. 1.5%) shows a fairly stable state of the US economy and convince the market that the Fed decides to increase rates in December 2015. The German DAX 30 (FDAX) finished the week higher by 1.69%. The reason is the same – waiting expansion of quantitative easing in the European Central Bank‘s meeting on 3 December. At the same time, the publication in the Reuters confirmed that the regulator is ready to go to the most unconventional measures that could encourage lending and reduce the threat of deflation. HIS Hong Kong came under pressure, losing for the week 3.48%.

Growth showed cryptocurrency. Bitcoin added 7.96%, while Bitcoin has appreciated by 11.85%. Gold (XAU / USD) has conducted most of the week in a fairly narrow range, but on Friday showed a fairly sharp decline in which updated the recent low (1052.74). At the end of the week its loss amounted to 1.91%. Silver (XAG / USD) and closed with a decline of 0.4%. Brent crude oil finished the week higher by 0.9%. Earlier this week, the energy carrier peaked from November 11 (46.47), but later resumed its decline.

Chart of the week:

Gold chart

Gold chart

The economic data of the last week:

  • Monday. Germany: November PMI index in the manufacturing industry 52.6 – 52.0 above forecast
  • Tuesday . Germany: November, the index of economic expectations IFO 104.7 – 103.5 above forecast
  • Wednesday. US: October, orders for durable goods 3.0% vs. 1.5%
  • Thursday. Australia: Q3 private capital expenditure -9.2% vs. -4.4% in the previous period
  • Friday. China in October, changing industry profits -4.6% vs. -0.1% in September

Forecast for the week November 30 – December 4

Stock market

The first week of December traditionally brings reports on business activity (ISM) in the industrial sector and the services the US. But undoubtedly, the most important will be the data on employment in the non-farm payrolls. Strong figures will be an additional confirmation that the Fed will be decided in December to raise rates (according to the positions of futures rate, the probability of such an outcome is estimated at 77.5%). Against this background, the US indices may show a decline. But it is unlikely to be sustained fall since the recent positive statistics from the US market perceives it as a confirmation of the stability of the economy. Thus, the fall can be seen as an opportunity to enter into a long position at an attractive price. But even before the release of a key report will perform Janet Yellen to Congress (December 3, 17:00 GMT). In anticipation of the December Fed meeting market will very closely follow the tone of the head of the regulator.

It is possible that in the speech will be given any signals of further Fed action. If the expectations that further tightening of monetary policy will be happening very slowly, justified, benchmarks can provide a pretext for further growth. Dow Jones (YM) after a level of 17900 can target the growth in the region 18250. Nasdaq (NQ), to continue to grow to new highs is required to overcome the resistance at 4730.00. China‘s stock market on Friday again showed a fall. In part, he reacted to the information on the investigations against some of the largest brokers of the country, in part it was caused by weak statistics. Profits of industrial enterprises in the country in October fell by 4.6%. Next week will be published data on the index of business activity in the industrial sector of China (PMI Caixin). In the last 2 months showed a recovery rate, however, he is still held below the watershed of 50 that separates growth zone by zone recession. If the figures come out below the level of 48.3 recorded in September, HSI may continue to decline in the area of level ​​21090.

Commodity and raw market

Quotes of Brent crude oil has not been able to gain a foothold above the resistance level of 46.40. Basically, the negative impact on the black gold continue to have concerns gain imbalance of supply and demand on the world market. But the coming week for the oil can be very interesting. December 4 will be the next OPEC summit. One of the key questions that the market wants to get an answer: what are the quotas? Until recently, some members of the cartel, especially Saudi Arabia, persistently said that they are ready at any price to fight for market share.

But in the end we finished the week in the media reported that they were still dissatisfied with the current level of prices. Just like most oil-producing regions, they would like to stabilize around 60 – 80 dollars per barrel. This gives some hope that the OPEC countries still decide to even a slight reduction quotas. In this case, Brent crude oil can demonstrate growth with the return of quotations in the range of 47.00 – 54.00, where they were from late August until 11 November. And growth can only be accelerated when the US Energy Information Agency lock reduction of commercial stocks and another decline in oil production in the country. In favor of the decline in production continues to witness the fall of the number of operating drilling rigs. The index reached a value of 555, which is 64.69% lower than a year earlier.

Currency market

This week the Central Bank will publish three once a decision on monetary policy: The Reserve Bank of Australia, Bank of Canada and European Central Bank. First, it will make the RBA (December 1). Recall that at the last meeting of the Australian regulator did not reduce the rate. Moreover, in November, he overestimated the better prospects for the country’s economy. Provided that the RBA will keep its fairly optimistic and continue to pause in rate cuts, it will give an additional reason to talk about regarding the aggressive attitude of the regulator. Against this background, AUD / USD can gain additional momentum for the resumption of growth. The primary objective will be the level 0.7280 with a further target at 0.7360 in the case of a breakthrough.

Warning: Profitability in the past does not mean profitability in the future. Any projections are for information only and does not guarantee a result.

COPPER FUTURES: break below 2.0000 opens the way down further

Copper is still feeling the pressure of the heart. Still, one of the key factors that have a negative impact are expectations the US Federal Reserve rate hike in December 2016. The probability of such an outcome, according to the positions of futures rate is 73.6%. In addition, the market is still laid low demand for industrial metals (particularly from China, which accounts for about 45% of world consumption). Recent data on the supply and demand of copper, published November 20 also signaled that in the reporting period (August 2015), recorded net supply of the metal. All of this does not add optimism.

Quotes of the metal fell to a minimum of 6.5 years. At the level of 2.0000 is the psychological support level, which has already once kept falling. If it is overcome, the sale of copper can only be accelerated, leading to a further drop in prices of the metal in the area of 1.9270 level. In addition, and in the afternoon, and in the intraday price charts are kept below the 50-interval moving average, which also favors the fall.

copper futures chart

Copper futures chart

Trading analytics

COPPER FUTURES (HG) – sell copperEntry price: 2,0000. Goal: 1,9270. Stop loss: 2,0629.

Warning: Profitability in the past does not mean profitability in the future. Any projections are for information only and does not guarantee a result.

GOLD TRADING: can return to the level of 1116.80

Recently, gold remained under pressure amid an aggressive attitude against the US Federal Reserve monetary policy. The market is quite active pawned at increasing rates are already at the December meeting. However, published 13 November retail sales data and a report on the producer price index put this belief into question. If more and data on the consumer price index on November 17 will reflect a decrease of price pressure, the dollar may be under short-term pressure, which makes it denominated assets, including gold, higher. Among other things, gold grows amid increasing geopolitical risks following the terrorist attacks in Paris. Do not forget about the report from the WGC (World Gold Council), which reflected that by the end of the 3rd quarter of this metal is fixed “net demand“.

In the area of 1101.37 level is quite strong resistance. If American reports disappoint, the probability of breakdown at this level will increase. In this case, again, can be activated the “bulls“, which will lead to faster growth and a return to the level of 1116.80.

gold trading chart
Gold chart
 Trading analytics
GOLD (XAU/USD)    –    buy gold   –   Entry price: 1101,37. Goal: 1116,80. Stop loss: 1087,04.
Warning: Profitability in the past does not mean profitability in the future. Any projections are for information only and does not guarantee a result.

Review of November 9-13, when macroeconomic reports raise doubts. Forecast for the week of 16 – 20 November

Equity markets finished the week “in the red“. Dow Jones fell 3.84%. NASDAQ lost 4.58%. On the one hand, the pressure on the benchmarks have expectations soon began to tighten monetary policy the US Federal Reserve. But on the other hand, the indices are not too optimistic and perceive negative statistics from the United States (as, in particular, happened on Friday after the release of weaker-than-expected retail sales data). The German DAX 30 (FDAX) also ended the week lower at 3.19%, including under the influence of a further signs of a slowdown in the German economy (GDP grew by 0.3% in the 3rd quarter against growth of 0.4% in the second) . Under the pressure and turned Hong Kong HIS, who lost for the week 2.65%. A number of negative data on the Chinese economy (fall in price pressures, slower than expected growth in industrial production, the decline in lending to 476.6 billion vs. 1.14 trillion) have had on the benchmark pressure.

In commodity markets the majority of assets remained largely under pressure amid fears of lower demand from China. Copper (HG) fell by 3.57%, Platinum (PL) lost 8.57%, reaching the lowest level in 7 years (859.9), Palladium (PA) has fallen by 12.82%. Gold (XAU / USD) updated the July low (1074.08), but could not continue to fall. Losses amounted to 0.56%. Silver (XAG / USD) and closed with a decline of 3.45%. Brent crude oil finished the week down 6.77%, noting at least at the level of 44.14. Pressure for oil also provide evidence of growing imbalance of supply and demand on the world market.

Chart of the week:

platinum price chart
Platinum price chart

The economic data of the last week:

  • Monday. Germany: September, the trade balance 19.4 billion euros against forecast 20.0 billion
  • Tuesday . China: October, CPI + 1,3% compared to 1.6% in September. PPI fell 5.9%
  • Wednesday. China in October, industrial production + 5.6% vs. 5.8%
  • Friday. US October retail sales 0.1% – below the forecast of 0.3%
Forecast for the week of 16 – 20 November
Stock market
This week attention should be paid to several events. First, is the data on the consumer price index in the United States. After last week’s report on the producer price index reflected the decline in price pressures, this release is of particular importance. Even slight signs of easing price pressures at the consumer level may be enough to convince the market that the Fed may again postpone the start of tightening, although at this point in time, the probability of a rate hike in December is estimated at 69.8% (according to the positions of futures bet).
From the point of view of the further actions the Fed may be of interest Minutes of the October meeting of the Federal Reserve, published Nov. 18. Most likely, nothing new, he will not bring, and will only further confirmation of the Fed’s aggressive attitude. However, even the slightest hint that a rate hike may be delayed, may be enough to start a fairly active buying of US indexes. Dow Jones (YM) can return to the level of 17516, Nasdaq (NQ) is able to rise to the level of 4600.00.
Commodity and raw market
Quotes of Brent crude oil escaped beyond the range of 47.00 – 54.00, breaking its lower bound. Technically, this opens the way for black gold in the area of the lows marked in August of this year (42.20). Of course, in many ways it contributes to this negative outlook IEA information that net supply of crude oil rose to 1.58 million barrels a matter of fact, as well as data on the growth of commercial stocks in the United States. However, the fall is unlikely to be sustained. In the United States may soon begin a significant reduction in production volumes.

Firstly, these conclusions are pushing data from Baker Hughes, which showed a significant reduction in the number of operating drilling rigs (drop compared to last year amounted to 63.6%). Second, the US Department of Energy fixes the decline in production in the major provinces of States. Also, the market will follow the EIA data on commercial stocks in the United States. If the index is still starts decline from historic highs, oil can get a positive boost.

Against this background, the black gold may start to return to the district level 47.00. In addition, the hope of all the commodity market can be associated with the actions of the People’s Bank of China. Recently there were rumors that the regulator may decide on further rate cuts. If the rumors become facts, could increase expectations of growth in energy demand, which will lead to an acceleration of inflation.

Warning: Profitability in the past does not mean profitability in the future. Any projections are for information only and does not guarantee a result.

NASDAQ FUTURES: market awaits speech by Fed

US stock markets expect the Fed speech by Janet Yellen. She has recently emphasized that the question of raising rates in December, still remains relevant and thus gave a positive assessment of the economy. Now they have received confirmation from the labor market data, which turned out shockingly powerful (271 thousand at the end of October).

NASDAQ-100 index feels support in 4610, which he successfully tested the strength of 4 times in the last three days. If the contracts can consolidate above the resistance of 4652, it may attempt to restart growth.

nasdaq-100 chart
Nasdaq-100 chart
Trading analytics
NASDAQ (NQ) – buy nasdaq – Entry price: 4652. Goal: 4713. Stop loss: 4610.
Warning: Profitability in the past does not mean profitability in the future. Any projections are for information only and does not guarantee a result.

SILVER TRADING: the rising dollar is putting pressure on the metal

Silver remains under pressure. At this stage, one of the key points which puts pressure on the precious metals are waiting to tighten monetary policy the US Federal Reserve. Such assumptions are only intensified after data on US labor market proved to be significantly more than expected. Moreover, the average hourly wage increased by 0.4%, which provokes the strengthening of expectations of price pressure. All of this means that the Fed has no reason to postpone a large number of the rate increase. All this provokes the strengthening of the US dollar, which makes assets denominated in it less.

In the area of 14.142 price level formed a strong enough support. Provided that the level is overcome, could increase sales that trigger the acceleration of the fall. On the intraday charts quotes were fixed below the 50-interval moving average, which also allows you to wait for the fall in the short term.

silver trading chart
Silver chart
Trading analytics
SILVER (XAG/USD) – sell silver – Entry price: 14,142. Goal: 13,635. Stop loss: 14,540.
Warning: Profitability in the past does not mean profitability in the future. Any projections are for information only and does not guarantee a result.

Overview on November 2 – November 6: prospects brighten. Forecast for the week on November 9 – November 13

Last week, the market has found a lot of reasons to worry. The main conclusion that can be drawn from the last five days – the Fed rate increase to be, and perhaps as early as December. Aggressive comments Janet Yellen and strong data on non-farm payrolls only increased these expectations. But US benchmarks all this was seen as evidence of sufficient strength of the economy and only slowed growth at the end of the week. Dow Jones rose by 1.38%. NASDAQ rose by 1.23%. The German DAX 30 (FDAX) finished the week higher by 1.75%, driven in part by the weakness of the euro. Japanese Nikkei (NKD) added 3.12% against the statement of the head of the national regulator that the Central Bank is doing everything necessary to fight deflation and will continue to play a part in encouraging Japanese firms to increased investment.

Precious metals finished the week with losses. Gold reached a three-month low (1085.44), losing 4.71%. Silver is also closed with a decline of 5.17%. A strong report on the US labor market boosted expectations of an early Fed rate hike. Brent crude oil finished the week down by 3.58%. Including this has happened against the background of strengthening the dollar, which makes assets denominated in it less.

Chart of the week:

eur usd chart
EUR/USD

The economic data of the last week:

  • Wednesday. US: October, the index of business activity in the services sector (ISM) 59,1 against the forecast of 56.5
  • Thursday. The Bank of England did not make any changes in monetary policy. The forecast for inflation: below 1% in the second half of 2016
  • Friday. US: October, the number of new jobs created is with agricultural sector 271,000 – higher than the forecast 180,000

 

Forecast for the week on November 9 – November 13
Stock market
This week the US calendar does not indulge markets a large number of relevant reports. Only on Friday will be published data on retail sales. Statistics on the labor market (NFP) published encouraging. The number of new jobs exceeded forecasts (271,000 against expectations of 180,000). Moreover, the notes and the growth of hourly wages (0.4% vs. + 0.2%), which allows you to wait for inflation at this level. Published data can be called another confirmation in favor of a rate hike in the US Fed is already December meeting. Such expectations can be a deterrent to US stock indices. Against the backdrop of a lack of catalysts benchmarks may develop a downward correction. Dow Jones (YM) can return to the level of 17516, Nasdaq (NQ) is able to be reduced to the level of 4600.00. And just not strong enough retail sales may briefly return to buying interest in the area of ​​these levels.

 

The German DAX 30 (DAX) has a chance to continue to grow. A key factor in support for the benchmark may remain idle imminent change of quantitative easing European Central Bank. Recall that at the end of October meeting, the head of the regulator noted that the economy needs additional stimulus. Also, Mario Draghi has hinted at the possibility of transforming the European QE program in December. Next week will be published the final data on the rate of economic growth in Germany in the 3rd quarter 2015. Also, come reports on consumer price index and trade balance. The weak figures will provoke strengthening expectations of further stimulus from the European regulator. The first reaction may be a short-term decline in the area FDAX 10600.0 level where it can be interesting for shopping.

 

Commodity and raw market
Quotes of Brent crude oil continued to hold within the range of 47.00 – 54.00. And while the movement in the area of ​​the upper border of its tightly constrained by the mark of 50 dollars per barrel. Black Gold is still at the crossroads of conflicting factors. On the one hand, it concerns reducing energy demand from China and the euro zone. However, signs of decline in drilling in the US in the near future could lead to lower output. So next week the market will monitor the statistics of China (the consumer price index, data on industrial production and retail sales), as well as the traditional report on the number of operating rigs from Baker Hughes.

 

Signs of stabilization of the economy of China and the reduction in drilling in the United States can provide support for Brent crude oil. In addition, November 10 released an updated short-term forecast of the energy market. It is expected that the surplus supply on the world market in October can be reduced to 1.25 million barrels per day to 0.89 million. This clear signs reduce the imbalance. And this release may be one of the main catalysts for the black gold. If expectations are met, Brent crude may try to overcome resistance at 50.00 with the immediate goal at the level of 50.80 dollars per barrel.

 

Warning: Profitability in the past does not mean profitability in the future. Any projections are for information only and does not guarantee a result.

Review for November 4: the labor market will solve everything. Forecast for Friday, November 5

At the end of the day in the spotlight were the two currency pairs: GBP / USD and USD / JPY. First come under pressure not only due to the fact that to become aggressive MPC members did not join the new one, but also because the overall tone of the speech Mark Carney sounded more restrained than in the previous meeting. As a result, GBP / USD lost more than 150 points, ending trading at around 1.5210. USD / JPY was supported by growing hopes for an early tightening of monetary policy of the United States – the first time a couple from 24 August touched 122.00 mark.

Stock indices in general, showed a positive trend, with more than others glad the Japanese Nikkei (+ 1,1%), received good support from falling yen. Gold continues to fall, slip into the area month low of 1104.39 dollars per ounce and Brent lost a whole day near the 48.40 dollars per barrel.

Chart of the day:

gbp usd chart
GBP / USD chart
Economic data of the previous day:
  • The Bank of England voted the previous level of rates 8-1 and the predicted inflation below 1% in the second half of 2016
  • Facebook has reached a historical high of 104.13 in response to the positive financial statements: EPS $ 0,57 vs. $ 0.52
  • There are rumors that Apple will release iPhone before the traditional September 7
Forecast for Friday, November 5
Stock market
The center of attention is the recent speech by Janet Yellen, which has generated streams of demand for the US dollar, and led investors to believe that the tightening will take place in December. Nevertheless, the market has yet to see how strong the US economy, and whether it is ready for such a strike, as the rate increase. We have to admit that the latest data on business activity in the service sector is really paint a beautiful picture: the index not only fell in line with expectations, but reached, celebrated for the last 10 years, only once.
Meanwhile, the employment component also pleased – in August 2005, we have seen such levels only in July 2015 and today. Note that if the level of employment increased by 223 thousand. At this time, under the influence of aggressive comments by the Fed the market has revised its expectations for the Non-Farm Payrolls on the increase, so it is likely that even when matching the forecasts of the primary market reaction will be disappointment in the data Closeouts with the relevant US dollar and rising stock markets. We have already noted the likelihood of traffic Dow Jones (YM), NASDAQ (NQ) and S & P (ES) to the nearest resistance levels at 18000, 4765 and 2120, respectively.
Commodity and raw market
The world’s largest oil exporter, Saudi Arabia, yesterday raised its prices for December volumes for their Asian customers and 30 cents, although it was expected that the increase will amount to only 25 cents. This could be perceived as a positive sign, if not simultaneous price decline for US buyers.
Brent at what is happening not responded locked in narrow ranges and observing the dynamics of the US dollar.. It would not reduce the amount of US production, denominated in US dollars the price of energy is significantly dependent on the quotation USD. If today’s labor market report will confirm the strength of the US economy, it can only strengthen the dollar and, consequently, to put pressure on quotations of Brent, which barely held near 48.00 dollars per barrel. When a break-down, the asset could once again return to the level of 46.80.
Pay attention to the behavior of Bitcoin (BTC). On Wednesday, he grew more than 20%, touching a historic high 459.21, but on Thursday turned around and suffered a rather impressive losses. It’s all just a few influences. First, the stock market crash in China has made an impressive contribution to his – investors prefer to be able to manage their funds without the threat of currency controls.
Daily trading volumes cryptocurrency increased 2-3 times the normal levels observed another 3 weeks ago. What is important, not only increases the value of Bitcoin, but interest in its use if the volume of transactions will continue to increase at the same rate, it can have a huge impact on the market of digital currencies. Current correction after an impressive growth can offer interesting entry point long positions with the immediate goal at around 420 near highs reached a year ago.
Warning: Profitability in the past does not mean profitability in the future. Any projections are for information only and does not guarantee a result.

DAX TRADING: European Central Bank once again gives cause for growth

Shares of German companies are trying to return to growth after the European Central Bank announced that it can consider expanding monetary stimulus package, as the eurozone economy again began to slow down and generate deflationary threat. During a speech on November 4 Mario Draghi made it clear that at the meeting in December, the Governing Board of the European Central Bank to consider the issue.

Macroeconomic statistics coming recently from the region, wore not very positive. The index of business optimism in Germany and Francerange near the border to the recession level of 50%, the consumer price index in Spainagain in negative territory. In Germany, it is also a step away from deflationary levels.

Futures DAX 30 are in a steady upward trend, but in the last few days were corrected after rapid growth. At the relatively low price levels may be of interest to search for long positions.

dax index chart
Dax index chart

 Trading analytics

DAX 30 (FDAX) – buy dax – Entry price: 10875. Goal: 11095. Stop loss: 10745.
Warning: Profitability in the past does not mean profitability in the future. Any projections are for information only and does not guarantee a result.

NASDAQ TRADING: Index tries to return to growth

Futures on USstock indexes are trying to return to growth after the decline on Friday, October 30th. Investors expect statistics on key macroeconomic indicators, which by tradition will be published in the first working week of the month.

On Monday (November 2) is planned to yield data on indices PMI (15.00 GMT). This report can be a cause for growth with all hands. Continued economic slowdown will be a signal for the Fednot to hurry with rate increase and the acceleration will be positive macroeconomic signals. The only negative could be a very weak reading index (less than 48%), but this turn of events less likely.

Stock index futures NASDAQ-100 found support in the area of 4625.00 and ready to check the strength of the 50-hour moving average (area 4656.00). If they are able to gain a foothold above, will signal the intention to continue the upward trend.

nasdaq stock chart
Nasdaq stock chart
Trading analytics
NASDAQ-100 (NQ)   –   buy nasdaq   –    Entry price: 4656,25. Goal: 4710,00. Stop loss: 4625,31.
Warning: Profitability in the past does not mean profitability in the future. Any projections are for information only and does not guarantee a result.