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  • S&P 500 | Online Stockmarket Trading Update
    three major indexes from Germany France and the UK all in multi week falling channel formations The bears remain firmly in control and a lot is riding on the outcome of the EU summit where the leaders are attempting to formulate a 10 year road map for the eurozone Some of the issues include common banking supervision deposit insurance and a criteria based and phased move toward joint debt issuance and also the EU imposition of upper limits on annual budgets and debt levels for the 17 eurozone nations The German Chancellor Angela Merkel has stated Germany s opposition to the issuance of joint euro area bonds as a way of lowering Spanish borrowing costs saying sovereign governments must be held accountable Across the eurozone the financials have led the declines as Spanish bond yields surged above 7 again and the German unemployment rate rose more than forecast climbing in June for the fourth month this year As the EU summit in Brussels progresses there has been some optimism though that the leaders were making progress in their discussions over the possibility of integrating budgets and banking systems Expectations for the EU summit have been low as previous gatherings have failed to produce any significant breakthroughs however the German Finance Minister Wolfgang Schaeuble has reportedly said that Germany could agree to shared liability on debt if eurozone countries agree to give up sovereignty over their budgets marking a softening in Germany s stance on the issue And just hours ago the EU leaders reported that they will make EUR120 billion available for a eurozone growth plan Asian stocks markets remained under selling pressure this week as any gains quickly eroded as traders awaited the outcome of the EU summit meeting The Chinese market has given back all its gains for the year due to concerns over a slowing economy The Chinese market has plunged 7 4 in June the second worst performance for the Asian region as lower than estimated industrial output and retail sales data has outweighed the Chinese central bank s first interest rate cut since 2008 The Chinese economy has grown at its slowest pace in almost three years in the first quarter This poor performance of the Chinese market is weighing on the ASX particularly the mining stocks The Australian market has traded sideways again this week and is tentatively holding around the key 4000 level Sentiment has been mixed driven by news from the eurozone and hopes of central bank easing Major market sectors have been tentatively holding on to the support levels of last week In our market the defensive sectors continue to outperform with Telstra Real Estate REITs and health care stocks holding ground as investors seek out stocks that can deliver consistent yield in this low rate environment The materials and energy sectors continue to underperform and have broken another key support level on the back of lower commodity prices The industrials sector has broken down but banks are tentatively looking to find some support as investors turn to dividend yield Providing some support this week have been News Corp which has confirmed it will split its core businesses in a move to unlock value and the retail sector which received a boost when David Jones announced it has received an unsolicited bid On the S P ASX 200 the 4120 level will now be a crucial resistance level and the 4080 level is again a pivotal level for next week We have not seen capitulation by the bulls as yet which could come about if the current weekly support levels are breached at 3985 in which case we could see the 3950 and then the 3850 levels tested Investors should have protection in place for their capital and could look to reduce their risk by using options and warrants strategies With the sustained selling we have endured over the past few weeks we remained cautious but we are also looking to pick up value stocks that pay consistently high dividend yields when they reach our buy levels and will turn to growth stocks if we see a change to Risk On sentiment with some action from the EU Leaders summit Remain attuned to the news from overseas particularly from the EU leaders summit China and the US as the US markets test their 50 day moving average resistance levels Monitor the performance of Italy Spain China and the US dollar for a guide to the future direction of commodities and equities prices It is a busy week for the US next week with the July 4th holiday and the latest non farms employment report due out Friday and then there will be a reaction to the outcome s of the EU summit The S P ASX 200 index is currently trading at 4034 and is testing breakeven levels for the year Key levels for the index next week will be 3930 and 4130 with 4080 the key short term pivot level By Michael Hevern DMX Trading Desk For Buy and Sell recommendations on ASX listed companies register for a free trial of MDS Financial Research This report was prepared by Michael Hevern It represents the views and opinions of the author It is not intended for use by any third party without the approval of Michael Hevern While this report is based on information from sources which are considered reliable its accuracy and completeness cannot be guaranteed Any opinions expressed reflect my judgment at this date and are subject to change Contracting Hevern Pty Ltd is a Corporate Authorised Representative No 408868 of D2MX Pty Limited ABN 98 113 959 596 AFSL No 297950 D2MX and Michael Hevern has been appointed as an Authorised Representative of Contracting Hevern Pty Ltd Opinions conclusions and other information expressed in this report are not given or endorsed by D2MX unless otherwise indicated The information contained in this Report is General Advice only as the information or advice given does not take into account your particular objectives financial situation or needs Disclaimer Using leverage to invest can be a two edged sword as it can magnify your returns when the stock price rises but will in turn magnify the losses if the trade does not perform as expected Tags ASX News Commodities David Jones eu summit eurozone markets market wrap Newscorp S P 500 Stock Market Analysis US markets Posted in Stock Market Analysis No Comments Weekly Market Wrap Traders Sell On The News Friday June 22nd 2012 Well investors had an eventful week as promised and next week European Union leaders will likely keep traders on edge as they meet for a summit on 28 29 June The week started off on a positive note as the pro bailout New Democracy party came in first in Sunday s Greek national election and they have now sworn in a new coalition parliament Trader sentiment was also boosted by the news out of the G20 meeting where European officials pledged to take all necessary policy measures to defend the euro currency union as world leaders endorsed a road map for tighter integration to cut borrowing costs and prevent further damage to the global economy However German Chancellor Angela Merkel declined to commit to direct sovereign debt purchases through the eurozone bailout fund highlighting that there is still work to do to get consensus on this initiative The next critical meeting is the summit of European Union leaders in Brussels on 28 29 June US stock markets traded to one month highs this week having recovered 6 from the recent lows However they sold down sharply overnight in a delayed reaction to the Fed The markets were at key levels testing the 50 retracement levels from the May sell off The Federal Reserve has now committed to extending its Operation Twist program to replace short term bonds with longer term debt by US267 billion through to the end of 2012 however traders were disappointed because they had speculated on a more aggressive QE3 approach It is worth reflecting that the previous stimulus measures by the Fed including two rounds of quantitative easing through asset purchases known as QE1 and QE2 helped the S P 500 double from its bear market low in 2009 while US Treasury yields reached the lowest on record amid demand for safety away from the eurozone debt crisis European stock markets gained over the past couple of weeks but are now running into 50 day resistance levels The Greek market has been the standout up around 25 from its recent lows as a new coalition government has been sworn in ending the political limbo that began at the failed election on May 6th German Chancellor Angela Merkel is still reluctant to allow the use of Europe s dual bailout funds the European Financial Stability Facility EFSF and the European Stability Mechanism ESM to buy debt of countries like Italy and Spain and provide liquidity in the eurozone financial system In commodities crude oil has plunged to an eight month low as US inventories hit 22 year highs Gold prices pulled back this week as the US dollar rose in the absence of a QE3 announcement The CRB commodities index closed at its lowest level since 2010 and mining and energy stocks across the globe remain under pressure near term Asian stock markets have generally taken their cue from Europe this week and sold off heavily yesterday on the back of Chinese manufacturing data declining for an eleventh month out of the past twelve HSBC preliminary data shows that Chinese manufacturing is set to contract in June matching the streak during the global financial crisis GFC signaling that the Chinese government stimulus has yet to reverse the domestic economic slowdown The Chinese stock markets fell below a key level overnight dragging the benchmark index to the lowest level in 3 months after a report showed Chinese manufacturing shrank for an eighth consecutive month in June Traders are concerned that the growth slowdown is deepening in China and the sovereign debt issues are impacting corporate earnings going forward Selling was broad based but the miners and energy stocks suffered the brunt of the selling The Japanese market remains around 1 month highs The Australian market has traded sideways again this week and is again trying to hold around the key 4000 level Sentiment has remained cautious driven by news from the eurozone and hopes of central bank easing Major market defensive sectors have been tentatively holding on to the support levels of last week In our market the defensive sectors continue to outperform with Telstra Realestate REITs and health care stocks holding ground as investors seek out stocks that can deliver consistent yield in this low rate environment The materials and energy sectors continue to underperform on the back of lower commodity prices but banks are tentatively looking to find some support as investors turn to dividend yield On the S P ASX 200 the 4000 level will now be a crucial support level and the 4080 level is again pivotal for next week We have not seen capitulation by the bulls as yet which could come about if the current weekly support levels are breached at 3980 in which case we could see the 3950 and then the 3850 levels tested The S P ASX 200 index is currently trading at 4049 and is testing breakeven levels for the year Key levels for the index next week will be 3930 and 4160 with 4080 the key short term pivot level Tonight traders will be reacting to Goldman Sachs recommendations to clients to build on their short positions in the broad S P 500 index on expectations of further economic weakness Also Moody s Investors Service has announced further downgrades of the credit ratings of 15 lenders and securities firms with exposure to the global capital markets Investors should have protection in place for their capital and could look to reduce their risk by using options and warrants strategies With the sustained selling we have endured over the past few weeks we are looking to pick up value stocks that pay consistently high dividend yields when they reach our buy levels Remain attuned to the news from overseas particularly from the eurozone the EU leader summit now that China is facing another month of contracting manufacturing activity and the US as the US markets back off their 3 week highs Monitor the performances of Spain Italy China and the US dollar for a guide to the future direction of commodities and equities prices Contact me at D2MX Trading on 1300 610 024 and I can help you trade using a number of strategies that will give you the tools to navigate this market and help you boost your returns on investment For Buy and Sell recommendations on ASX listed companies register for a free trial of MDS Financial Research By Michael Hevern DM2X Trading Desk This report was prepared by Michael Hevern It represents the views and opinions of the author It is not intended for use by any third party without the approval of Michael Hevern While this report is based on information from sources which are considered reliable its accuracy and completeness cannot be guaranteed Any opinions expressed reflect my judgment at this date and are subject to change Contracting Hevern Pty Ltd is a Corporate Authorised Representative No 408868 of D2MX Pty Limited ABN 98 113 959 596 AFSL No 297950 D2MX and Michael Hevern has been appointed as an Authorised Representative of Contracting Hevern Pty Ltd Opinions conclusions and other information expressed in this report are not given or endorsed by D2MX unless otherwise indicated The information contained in this Report is General Advice only as the information or advice given does not take into account your particular objectives financial situation or needs Disclaimer Using leverage to invest can be a two edged sword as it can magnify your returns when the stock price rises but will in turn magnify the losses if the trade does not perform as expected Tags ASX News commodities prices eurozone debt G20 greek elections S P 500 Stock Market Analysis Weekly Market Wrap Posted in Stock Market Analysis No Comments Market Overbought You Bet It Is Friday February 17th 2012 The current US market conditions are showing a very overbought scenario though last night s big rally would seem to contradict this idea While overbought can be monitored by looking at charting indicators such as RSI Stochastic or Money Flow Index there are other measures of overbought to consider In the US a company called Investors Intelligence collects survey data on bullish and bearish views on the market In the chart below you can see that this survey has reached a highly bullish outlook Highs of this magnitude are often followed by declines in the S P 500 plotted below These drops do not occur immediately but 1 month out the market underperforms and returns become negative 3 months out Sometimes it is not wise to listen to what people are saying but better to watch what they are doing with their money There are futures contracts and options available on all of the major indices Monitoring the positioning of traders in these instruments can also give an insight into market sentiment Currently the long positioning in the Nasdaq futures are at their highest level ever In the options market there are two different ways to measure sentiment One measure the Put Call ratio shows how many puts bets the market will go down are being bought relative to how many calls bets the market will go up are being bought Right now levels that have been reached coincide with declines in the S P 500 The second method is to consider the premium that is being paid to buy put options as protection The higher the premium is the more fear that exists in the market When options are cheaper then investors are relaxed and do not believe the market will decline Unfortunately as history shows periods of cheap options shown by a low reading on the Volatility Index VIX are often followed by declines in the S P 500 None of these indicators on their own suggest a market decline but a combination of indicators like the current setup certainly shows the risks lie in a move to the downside The timing of a drop however is much harder to predict as overbought conditions can last for a very long time By Jeff Cartridge Education Manager Tags bullish market market analysis Nasdaq overbought market S P 500 US Market VIX volatility index Posted in ASX Trading News Stock Market Analysis Trading Strategies No Comments How Understanding Volatility Can Improve Your Trading Friday November 11th 2011 The markets have certainly been volatile lately This is a comment that you may hear on a regular basis and it is often used to describe a share or market when it falls sharply but what does it really mean And more importantly how can we use an understanding of volatility to improve our trading Volatility is the fluctuation in share price as measured over a period of time If one share moves in a range of 20 cents in a week and another share moves in a range of 1 00 in a week this would be considered a more volatile share Note that this says nothing about the direction of the movement just the range of movement This is one way to measure volatility and there are many other ways to measure it as well The average true range ATR is a measure of how volatile a share is on a daily basis The true range is the movement from the high of the day to the low of the day including any gaps that may occur The average true range is the true range averaged out over a number of time periods In Computershare shown in the chart below the ATR 10 varies from a low of 10 cents to a high of more than 30 cents A spike in the ATR has occurred recently following the announcement that Computershare has gained approval to take over a US based share registry Looking closely at the chart you will see that when the volatility spikes it can be a sign that the share is about to reverse direction as it did in May and August this year but the reversal was slower coming in January Statistically speaking the range can be defined by the standard deviation which is the range required to contain a certain percentage of price movement 99 of price movement is contained within 2 standard deviations of the current price so only in very rare cases will the price move beyond 2 standard deviations Bollinger Bands display two bands that are 2 standard deviations from the current price as shown on the chart below When the bands tighten up the volatility is low and when the bands widen out volatility has increased As you can see in the chart below volatility has increased sharply following the announcement From a trading perspective when the share price breaks outside the band then expect a reversal as can be seen in August September and October and again recently While these measures can easily be applied to an individual share there is a more sophisticated way to look at volatility which is more informative than a simple mathematical calculation The volatility index known more widely as the VIX measures the premium that is being paid to purchase options on the S P 500 index To correctly price options it is necessary to take into account the volatility of the underlying market If option prices spike then it is a sign of an increase in volatility in the market In Market Analyser the volatility index is accessed by the code VIX and the underlying index is the S P 500 INX Both of these can be displayed on the same chart using the Overlay security function The VIX is shown in pink on the chart overlayed on the S P 500 Volatility has certainly been higher during the last 4 months than in the few months preceding it based on the VIX Note the turning points in the index often coincide with the turning points in the VIX Once the index reaches an extreme a reversal is imminent High readings in the VIX correspond with points where the market turns higher and low readings in the VIX can signal sharp drops Using these tools you can measure whether the market is volatile right now and also use this knowledge to assist in identifying turning points in the share or market you are following By Jeff Cartridge Education Manager Test this strategy for yourself Download a free trial of the Market Analyser software here Computershare was recommended as a buy by MDS Research Team at the start of November You too can get advantage of our buy and sell recommendations on ASX listed companies by registering for a free trial of MDS Financial Research Tags bollinger bands charting Market Analyser S P 500 Trading Strategies VIX volatility Posted in Trading Strategies No Comments Stock Market Analysis Markets Plunge On Greek Default Concerns Tuesday October 4th 2011 US stock markets have begun the final quarter of the year with yet anonther selling spree European stock markets closed sharply lower again overnight with the banks again among the worst decliners as Greek authorities announced that the country cannot meet its deficit reduction targets this year raising concerns that a default could come sooner rather than later Asian stock markets end sharply lower yesterday due to rising concerns over the euro zone debt crisis and global economic growth while concerns that Chinese non performing loans may rise sparked a selloff in Hong Kong shares Commodities prices traded sharply lower as Gold prices rose to US1 650 and while crude oil closed down around US76 The SPI Futures is trading around the key pivot level of 3850 ending down 1 2 or 46 points at 3 842 The key levels for our index today are 3800 to 3950 Aussie stocks are expected to sell down again today following on from the negative leads from the US and Europe Commodities sold off again overnight which will add to the pressure on our miners The RBA is expected to leave rates on hold at 4 75 See below for ASX listed companies in the news today Economics News Today RBA Interest Rate Decision United States Markets US stock markets have begun the final quarter of the year with yet anonther selling spree This latest bout of selling was triggered by news that a Greek default may be just around the corner The Dow Jones Index closed near its lows for the year In the broader market the S P 500 stock index slumped over 2 and closed at its lows for 2011 while the tech heavy Nasdaq Composite plunged 2 5 All 10 of the S P index sectors sold off led by the financials and energy sectors but most other sectors were down over 2 Better than expected US ISM manufacturing data for September and construction spending for August did little to help sentiment as the three major indices are now down almost 20 from their 2011 highs below which is considered bear market teritory The selling was triggered as Greece announced that it would miss its deficit targets this year Those targets were considered a prerequisite to qualify for their next round of the bailout rescue package All ten company groups that make up the S P index traded generally sharply lower Industrials were down 2 8 Materials were down 2 8 the Energy sector was down 3 4 the Financials sector was down 4 5 Consumer Staples were down 2 9 while the Technology sector was down 2 3 The Dow Jones closed down 2 4 or 258 points at 10 655 the S P 500 index closed down 2 9 or 32 points at 1 099 the Nasdaq ended down 3 3 or 80 points at 2 2335 and the smaller cap Russell 2000 was down 4 3 European Markets European stock markets closed sharply lower again overnight with the banks again among the worst decliners as Greek authorities announced that the country cannot meet its deficit reduction targets this year raising concerns that a default could come sooner rather than later The Stoxx Europe 600 ended down 1 1 year to date the index is now down 18 9 European finance ministers met in Luxembourg overnight to discuss the Greek reform which is considered a prerequisite for Greece to avoid a near term default Banks led the decliners as BNP Paribas fell 4 6 and Soc Gen slid 5 2 in France and in Germany the Commerzbank slumped 7 3 and ING Groep sank 5 2 In London the FTSE 100 closed down just above 5070 while in Germany the DAX slumped 2 3 This was despite the UK PMI manufacturing showing a surprising recovery in September but the eurozone PMI data was weak hitting a 25 month low of 48 5 The FTSE 100 index finished down 1 0 or 53 points 5 075 the German DAX was down 2 3 or 125 points at 5 367 while in France the CAC was down 1 9 or 55 points at 2 927 Asian Markets Asian stock markets ended sharply lower yesterday due to rising concerns over the euro zone debt crisis and global economic growth while concerns that Chinese non performing loans may rise sparked a selloff in Hong Kong shares In Japan the Nikkei Stock Index fell 1 8 as exporters sold down heavily despite the BoJ tankan survey showing Japanese business sentiment turned positive in the third quarter as companies restored supply chains hit by the March natural distastes In Hong Kong the Hang Seng Index shed 4 4 to end at 28 month lows Chinese banks led the downturn due to concerns over non performing loans In China the SSE Composite closed down 0 3 or 6 points at 2 359 while in Hong Kong the Hang Seng Index was down 4 4 or 770 points at 16 822 and in Japan the Nikkei 225 Index was up 1 0 or 86 points at 8701 The South Korean KOSPI closed flat for the session while the Indian market was down 1 8 Commodities The Dollar Index was higher at 79 59 on a lower Euro while the Australian Dollar last traded lower at 95 26 Commodities prices were sharply lower For the session the benchmark crude NYMEX for December delivery was down 3 1 or US2 44 to settle at US76 69 Copper prices are finding a support level as Copper for December delivery was down 0 2 or 0 5 cents at US3 0955 December gold was up 1 9 or US30 00 at US1 650 40 ASX News Today ABY Copper miner Aditya Birla has been fined by a Queensland court for having too much water at its Mt Gordon mine in the Mt Isa region ANZ Australia s largest class action was back in court on Monday in what lawyers describe as a major step in the case against ANZ bank fees AQA Aquila Resources has entered into a 12 month 250 million corporate facility agreement with the National Australia and the Commonwealth banks for the provision of corporate cash advance facilities totalling 250 million CSL CSL the pharmaceutical company says it has addressed the majority of manufacturing flaws highlighted by the US Food and Drug Administration FDA and remaining concerns are currently being resolved ELD Elders has started offloading its struggling forestry business blaming weak woodfibre demand and poor prices FMG Fortescue Metals Group has had its highest level of quarterly shipments in the three months since June LEI Workers have been sent home from Brisbane s Airport Link tunnel project after construction was stopped as a mark of respect to an employee who died following an on site accident NAB National Bank insists it remains focussed on growing its UK business after Moody s downgraded the ratings on NAB s Clydesdale Bank due to speculation it would be sold off NEC Northern Energy say a financing package for the first stage of the Wiggins Island coal export terminal in Queensland has been completed project participant Northern Energy Corporation says NUF Nufarm the agricultural chemicals supplier is well placed to grow its operating profit in fiscal 2012 as it continues to diversify its product portfolio away from the weedkiller glyphosate NWS The Australian Council of Superannuation Investors ACSI calls on member superannuation funds invested in News Corporation to recommend against the re election of a number of executive directors in the upcoming annual meeting PDN Paladin Energy which owns the producing Langer Heinrich uranium mine in Namibia has completed a 68 2 million placement of shares with institutional and accredited investors at 1 20 share or an 8 4 discount QAN Qantas faced delays at airports around the country over the weekend as Qantas baggage handlers and ground staff walked off the job for an hour RIO The Foreign Investment Review Board FIRB has approved a plan by Rio Tinto and Japan s Mitsubishi to mop up the shares in coal miner Coal Allied Industries that they don t already own SDL Sundance Resources has accepted an improved takeover bid by the Chinese Hanlong Mining valuing the iron ore explorer at 1 65 billion according to people familiar with the deal WES Wesfarmers announced it will sell its Premier Coal business to Chinese owned Yancoal Australia for 296 8 million Local Corporate Reporting Range Resources RRS Full year 2011 Results Gryphon Minerals GRY Full year 2011 Results Sundance Resources SDL Full year 2011 Results Ex dividend Date DJS David Jones Limited PMV Premier Investments WBA Webster Ltd Market Summary ASX to open lower US UK Europe lower Commodities Stock Index down 3 3 Gold Stocks Index down 1 4 Oil Stocks Index down 3 7 US ADRs Broadly Lower BHP down 3 0 RIO down 4 0 AWC down 3 2 ANZ down 3 4 NAB down 3 8 NEM up 0 5 JHX down 5 3 NWS down 2 5 By Michael Hevern Head of Research For Buy and Sell recommendations on ASX listed companies register for a FREE trial of MDS Financial Research Tags ASX News eurozone debt FTSE S P 500 spi futures Stock Market Analysis US markets Posted in Stock Market Analysis No Comments Weekly Market Wrap European Banks Spark Global Market Selloff Again Friday August 19th 2011 What a difference a day makes Up until last night the bulls appeared to be in control although the buying pressure had subsided from last week s monumental run Investors are still coming to terms with the downgrade of the U S credit rating from AAA to AA and rumours persist that other AAA rated European economies may be subject to downgrades A number of European countries namely France Spain Italy and Belgium all introduced some short selling bans to try to stem the recent selling pressure The crisis is far from over in Europe and obviously the selling ban has not worked with European banks down around 10 overnight Note that last time there was a selling ban markets fell another 20 Investors continue to be concerned over the euro zone sovereign debt crisis and were disappointed by the comments coming out of the meeting of European leaders Germany and France failed to alleviate investor concerns about the economic state of the region at the meeting The euro zone economic council said that it would help strengthen national fiscal solvency but Germany and France opposed the issuance of euro zone bonds which had been hoped for prior to the meeting The market volatility is likely to continue as investors battle against the machines using algorithmic trading programs algo trading Algo trading has become dominant since the US removed the up tick rule back in 2008 and until the regulators reinstate the rule the markets will be subject to free fall which has happened regularly over the past week The key US markets are now down over 15 from their April peaks and are perilously close to the flash crash of last week Note that last time we had conditions like this the market collapsed 40 before finding a floor Commodities prices have been volatile this week and are generally finishing lower with the exception of gold which is at record levels above US1 824 per ounce Crude oil is pulling back to the US80 level and copper prices are below the US4 00 per pound level again The yield on the benchmark 10 year Treasury note briefly dipped below 2 for the first time in nearly 60 years US Markets US stock markets were crushed overnight as investors fear a recession and following on from the steep losses in European and Asian markets Sentiment was also dampened as US investment banks lowered their global growth estimates investors are reassessing their expectations for stock prices going forward The Dow Jones Index fell below 11 000 while the S P 500 and tech heavy Nasdaq slumped 4 5 After eking out modest gains earlier this week the US markets have been slammed and look set to test the lows of last week near term Overnight no sector was spared but investors dumped energy and materials stocks as commodities prices plunged and the financials joined their Euro counterparts in the rout Sentiment has been hurt by poor economic news regarding manufacturing figures and some downgrades to global growth into 2012 from investment banks This has undermined the tech stock projections and once again the financials have been lagging the market That changed overnight though when the financials led the falls Overnight the Dow Jones closed sharply down 3 7 at 10 990 the S P 500 index closed down 4 5 at 1 140 the Nasdaq ended down 4 5 at 2 380 and the smaller cap Russell 2000 was down 5 9 Look for US markets to test recent lows in the coming days European Markets European stock markets held on to recent gains earlier this week but last night investors rushed for the exits dumping banking mining and energy shares due to fears over the euro zone debt crisis and fears of a possible double dip recession as global growth falters The rout on European markets extended after the disappointing US economic data and global growth downgrades from some investment banks Bank stocks were decimated after a Wall Street Journal article reported that US regulators are stepping up their surveillance of European banks due to worries that they could face funding difficulties Overnight the Stoxx Europe 600 index slumped 4 8 and European losses were spread across all countries and all market sectors though banks felt the brunt of the falls with most down over 10 in the session In London the FTSE 100 index was down 4 5 at 5 092 the German DAX was down 5 8 at 5 602 while in France the CAC was down 5 5 at 3 076 European stock markets are expected to remain weak until they get some action that addresses the region s debt crisis situation and investors come to terms with the slowing economic growth as evidenced in the German GDP figures which came in below expectations Asian Markets Asian stock markets have continued to be weak and many markets are either at their March lows or look set to test these levels near term as the worries about the global economic outlook continue to weigh on sentiment In Japan the Nikkei Stock Index has again fallen below 9 000 and is at its lowest finish since mid March as

    Original URL path: http://blog.traderdealer.com.au/tag/sp-500/ (2013-02-02)
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  • Markets Boosted By Central Bank Stimulus | Online Stockmarket Trading Update
    week around US92 again as prices rebounded strongly overnight on the back of geopolitical tensions in the Middle East The gold price reached 11 month highs and is again trading around the US1 800 level as traders price in the global quantitative easing Copper remains near 4 month highs The Australian market has broken the 4450 level as we predicted last week and is looking to push towards the 4500 level given the coordinated global central bank action designed to boost economic activity worldwide The Australian market has edged higher closing at the highest level since August 2011 as traders bet that the Reserve Bank of Australia will follow this week s interest rate cut with another reduction in November This would bring the cash rate to 3 which would be a 50 year low and the lowest since back at the height of the GFC In our market the growth sensitive and defensive sectors have supported the market this week as investors took their cue from the central banks and continued going long this market The financials and materials sectors have resumed their upward path The financial and info tech sectors held around 12 month highs The materials industrials and energy sectors eased initially but have rebounded towards the end of the week as trader optimism over the central bank stimulus reasserted itself Protection is extremely cheap at the moment and investors should have protection in place for their capital and could look to put their money to work while reducing their risk by using options and warrants strategies Remain attuned to the news from overseas particularly from the eurozone China Japan and the US Monitor the performance of Italian and Spanish borrowing costs China Japan tensions and the US dollar for a guide to the future direction of commodities and equities prices The S P ASX 200 index is currently trading at 4480 and is looking to close the week at 15 month highs Key levels for the index next week will be 4400 and 4520 with 4450 the key short term pivot level Traders are buying on the back of the global central bank stimulus in anticipation that it will be enough to boost global growth Contact me at D2MX Trading on 1300 610 024 and I can help you trade using a number of strategies that will give you the tools to navigate this market and help you improve your returns on investment Michael Hevern Investment Adviser D2MX Advisory This report was prepared by Michael Hevern It represents the views and opinions of the author It is not intended for use by any third party without the approval of Michael Hevern While this report is based on information from sources which are considered reliable its accuracy and completeness cannot be guaranteed Any opinions expressed reflect my judgment at this date and are subject to change Contracting Hevern Pty Ltd is a Corporate Authorised Representative No 408868 of D2MX Pty Limited ABN 98 113 959 596 AFSL

    Original URL path: http://blog.traderdealer.com.au/2012/10/05/weekly-market-wrap-markets-boosted-by-central-bank-stimulus/ (2013-02-02)
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  • Asx Market Analysis | Online Stockmarket Trading Update
    been dented this week by the resurfacing of the debt crisis in the eurozone triggered by changing leadership in France and Greece Markets across the globe particularly in the eurozone and Asia are now trading below their 200 day moving averages and their 50 day moving averages have turned down which is a sign of prospective market weakness going forward The US markets continue to outperform holding above their 200 day moving averages but have shown some weakness in the last few days US stock markets began the week on sour note after sellers stepped in across the board due to the disappointing Non Farms Payroll Employment Report and as crude oil broke below the US100 level A Department of Labor report showed the US economy added fewer jobs than expected last month as non farm payrolls rose by 115 000 in April well below the anticipated increase of 168 000 In the US traders are looking for another catalyst for their markets as the earnings season comes to an end 441 of the S P 500 companies have reported results so far and of those 67 percent exceeded estimates according to Thomson Reuters data down from over 80 percent at the beginning of earnings season Newscorp was a standout reporting bumper 3Q earnings with EPS growth up 58 and operating income growing 23 on the pcp However the week has ended with some disappointing news from a number of bellwether companies such as Cisco Systems the networking equipment makers plunging 11 after giving a downbeat outlook for the next quarter and warning that big customers were exercising caution with technology spending Priceline com shares fell 5 3 after the online travel booker reported 1Q earnings that exceeded forecasts but provided a cautious outlook for the second quarter After market overnight JP Morgan shares have plunged 6 2 after announcing a US2 billion loss tied to synthetic credit securities which were supposed to reduce risk in hedging their book Eurozone markets have had a terrible week with the Spanish market leading the declines across the region plunging to its lowest level in over eight years Yields on Spanish government bonds again jumped above 6 as the country s fourth largest bank Bankia SA was effectively nationalised The fallout from the weekend elections in Greece and France has cast a shadow over the eurozone markets as traders sold off due to concerns that the new leaders will step back from the restrictive austerity measures imposed as a result of the eurozone bailout earlier this year France the second biggest EU economy has elected Francois Hollande who defeated Nicolas Sarkozy to become the first socialist president in 17 years Hollande has pledged to push for less austerity and more growth in the region Meanwhile in Greece voters supported the anti bailout parties throwing doubt on whether the two main parties can put together a government strong enough to implement spending cuts to ensure the flow of bailout funds Traders face a period

    Original URL path: http://blog.traderdealer.com.au/tag/asx-market-analysis/ (2013-02-02)
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  • Quantitative Easing | Online Stockmarket Trading Update
    Market Analysis No Comments Weekly Market Wrap Traders Sell the Fed Delays the ECB Falls Short of Assurances Friday August 3rd 2012 Traders began the week happy with the assurances from the European Central Bank that it would do whatever it takes to preserve the euro However as the week progressed traders chose caution and actually hit the sell button in disappointment over the inactivity by the US Federal Reserve and the ECB in relation to further easing The selling has been broad based in the past couple of sessions with the European markets looking to break their eight week streak of consecutive gains Overnight US stock markets fell for a fourth day on the back of disappointing global manufacturing data and news that the ECB and the Fed will delay any additional monetary easing until at least September The three benchmark indexes fell around 1 The S P 500 has slid 1 5 in the past week and is setting up for its first decline in four weeks Falls were broad based with the energy materials and the financial sectors leading the way down US economic news continues to disappoint with PMI manufacturing data weaker as orders placed with US factories unexpectedly declining in June We also saw the biggest decline in bookings for non durable goods in over three years confirming there is less demand for business equipment and goods US consumer confidence also dropped last week to the lowest level in two months due to mounting concern over the state of the economy while consumer spending stagnated Just to add a further dampener to investor confidence there was a mini flash crash yesterday that will cost market maker Knight Capital trading losses of over US440 million An initial review of the problems by the NYSE exchange revealed that nine of the Dow Jones Industrial Average companies lost almost US1 trillion in combined market value these firms included Alcoa Amex BofA and AT T European stock markets have backed off four month highs in recent sessions as the ECB failed to take immediate action and corporate earnings disappointed The Stoxx Europe 600 index declined 1 3 on the prospect of slowing global growth Overnight the European Central Bank ECB President Mario Draghi failed to live up to his reassurances that the ECB would do whatever it takes to support the euro saying that the ECB is working on the issue but will not take immediate steps to support the economy The cost of funding in Spain has again shot up to 7 16 and in Italy it s again approaching 6 4 These high levels are unsustainable in the medium term and the Spanish and Italian markets plunged around 5 on the news Traders initiated a global sell off in a case of sell on the news as ECB President Draghi signaled the ECB intends to join forces with governments to buy bonds in sufficient quantities to ease the eurozone debt crisis while conceding that the German Bundesbank

    Original URL path: http://blog.traderdealer.com.au/tag/quantitative-easing/ (2013-02-02)
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  • RBA | Online Stockmarket Trading Update
    the end of the week as trader optimism over the central bank stimulus reasserted itself Protection is extremely cheap at the moment and investors should have protection in place for their capital and could look to put their money to work while reducing their risk by using options and warrants strategies Remain attuned to the news from overseas particularly from the eurozone China Japan and the US Monitor the performance of Italian and Spanish borrowing costs China Japan tensions and the US dollar for a guide to the future direction of commodities and equities prices The S P ASX 200 index is currently trading at 4480 and is looking to close the week at 15 month highs Key levels for the index next week will be 4400 and 4520 with 4450 the key short term pivot level Traders are buying on the back of the global central bank stimulus in anticipation that it will be enough to boost global growth Contact me at D2MX Trading on 1300 610 024 and I can help you trade using a number of strategies that will give you the tools to navigate this market and help you improve your returns on investment Michael Hevern Investment Adviser D2MX Advisory This report was prepared by Michael Hevern It represents the views and opinions of the author It is not intended for use by any third party without the approval of Michael Hevern While this report is based on information from sources which are considered reliable its accuracy and completeness cannot be guaranteed Any opinions expressed reflect my judgment at this date and are subject to change Contracting Hevern Pty Ltd is a Corporate Authorised Representative No 408868 of D2MX Pty Limited ABN 98 113 959 596 AFSL No 297950 D2MX and Michael Hevern has been appointed as an Authorised Representative of Contracting Hevern Pty Ltd Opinions conclusions and other information expressed in this report are not given or endorsed by D2MX unless otherwise indicated The information contained in this Report is General Advice only as the information or advice given does not take into account your particular objectives financial situation or needs Disclaimer Using leverage to invest can be a two edged sword as it can magnify your returns when the stock price rises but will in turn magnify the losses if the trade does not perform as expected Tags asx market analysis Commodity prices European Markets quantitative easing RBA US markets Weekly Market Wrap Posted in Morning Wrap Stock Market Analysis No Comments Weekly Market Wrap Investors Left Looking for More Friday July 6th 2012 Markets started the week on a positive note after leaders at the EU summit promised to act to address the eurozone debt crisis As the week progressed the focus shifted to the European Central Bank ECB as investors waited for interest rate cuts to complement the measures taken by EU leaders to shore up banks and bring down borrowing costs for Spain and Italy and looked for news that there will be additional monetary stimulus The next question is whether the ESM EFSF will have enough capital to fund the promises made at the summit US traders had a shortened week and returned from the Independence Day holiday in a sombre mood US stock markets declined overnight ending their biggest 3 session rally for the year Traders were disappointed by the European efforts to address the worsening eurozone debt crisis and they showed caution ahead of the US monthly employment report And there are reasons for this caution If we look back at the last US monthly jobs report US stocks sold off sharply down 10 erasing all of the 2012 gains Now the S P500 has rallied 7 from its recent lows due to speculation that there would be a coordinated global central bank action The action that traders need to see is QE3 quantitative easing in the US and LTRO2 longer term refinancing operation in the EU and the interest rate cuts which are already factored into the markets The Federal Reserve is concerned that growth is still not strong enough to reduce unemployment European stock markets ended lower overnight as traders had already factored in the ECB move on interest rates however the Stoxx Europe 600 index is still on track for its fifth week of gains The ECB lowered its benchmark lending rate to 0 75 as expected and the Bank of England kept its key rate unchanged but increased stimulus measures by boosting the size of its bond buying program by another 50 billion pounds Meanwhile the Chinese central bank has lowered interest rates for the second time in a month This coordinated global central bank action heightened concerns that the global recession is deepening The ECB President Mario Draghi warned that risks to the economic outlook remain tilted to the downside Traders expressed disappointment that the ECB stopped short of signaling additional stimulus on top of rate cuts as the flagging eurozone economic growth needs more of a jump start LTRO2 The debt markets in Spain and Italy saw borrowing costs spike higher overnight Across the region the financials led the declines but energy stocks also sold off on the back of lower crude oil prices Miners and auto stocks provided some support Asian stocks markets have found some support this week after the EU summit but as the week progressed profit takers have stepped in The Chinese market continues to underperform due to concerns about their weakening economy while the Hong Kong market ended higher after a choppy trading session The selling in China came after reports of dismal growth in June lending figures for the top four banks Overnight the Chinese central bank lowered interest rates for the second time in a month in a reaction to its slowing economy In commodities crude oil prices have bounced 11 in the past week and are now above US86 as inventories backed off their 22 year highs Gold prices also jumped after the EU summit and are up above US1 600 again In this week s Analysts Eye we investigate the interrelationship between crude oil and the equities markets and how you can use this relationship to forecast equities prices The Australian market has drifted higher this week and is tentatively holding around the key resistance 4180 level Sentiment has been mixed driven by news from the eurozone and hopes of central bank easing Major market sectors have been tentatively holding on to the support levels of last week As expected the RBA left interest rates on hold this week saying as a result of the sequence of earlier decisions there has been a material easing in monetary policy over the past six months and the Board has judged that with inflation expected to be consistent with the target and growth close to trend but with a more subdued international outlook than was the case a few months ago the stance of monetary policy remained appropriate In our market the defensive sectors continue to outperform with Telstra Real Estate REITs and health care stocks holding ground as investors seek out stocks that can deliver consistent yield in this low rate environment The materials and energy sectors saw some buying early in the week but continue to underperform The industrials sector is trying to hold on to support while banks have found support as investors turn to dividend yield David Jones is facing questions over the unsolicited bid it has received last week On the S P ASX 200 the 4120 level has been broken and the index is looking to close at a 5 week high The 4200 level is the next crucial resistance level and 4120 is a pivotal level for next week The next few sessions will determine whether we slip back into the trading range which has prevailed for the past two months Investors should have protection in place for their capital and could look to reduce their risk by using options and warrants strategies The ASX market has bounced 4 from its recent lows and is susceptible to some profit taking at these levels Look to pick up value stocks that pay consistently high dividend yields when they reach your buy levels Remain attuned to the news from overseas particularly from the eurozone China and the US as the US releases its monthly non farms employment report tonight Monitor the performance of Italian and Spanish borrowing costs China and the US dollar for a guide to the future direction of commodities and equities prices The S P ASX 200 index is currently trading at 4150 and is testing breakeven levels for the year Key levels for the index next week will be 4050 and 4200 with 4120 the key short term pivot level By Michael Hevern D2MX Trading Desk For Buy and Sell recommendations on ASX listed companies register for a free trial of MDS Financial Research This report was prepared by Michael Hevern It represents the views and opinions of the author It is not intended for use by any third party without the approval of Michael Hevern While this report is based on information from sources which are considered reliable its accuracy and completeness cannot be guaranteed Any opinions expressed reflect my judgment at this date and are subject to change Contracting Hevern Pty Ltd is a Corporate Authorised Representative No 408868 of D2MX Pty Limited ABN 98 113 959 596 AFSL No 297950 D2MX and Michael Hevern has been appointed as an Authorised Representative of Contracting Hevern Pty Ltd Opinions conclusions and other information expressed in this report are not given or endorsed by D2MX unless otherwise indicated The information contained in this Report is General Advice only as the information or advice given does not take into account your particular objectives financial situation or needs Disclaimer Using leverage to invest can be a two edged sword as it can magnify your returns when the stock price rises but will in turn magnify the losses if the trade does not perform as expected Tags ASX News Commodity prices eurozone debt crisis interest rates QE3 RBA S P ASX 200 US markets Weekly Market Wrap Posted in Stock Market Analysis No Comments Weekly Market Wrap Global Markets Melt Up As Greek Bailout Nears Completion Friday February 10th 2012 The Aussie market looks to be setting up for another assault on the 4300 level as the earnings season gets underway and the RBA surprises by leaving interest rates on hold The earnings season heated up this week with stocks like RIO BHP NAB Newscorp and Telstra posting results Of the 25 S P ASX 200 stocks that have already reported a quarter have beaten forecasts and around a half have reported in line This seems to be an underlying trend as analysts would have backed their expectations prior to the reporting season Most companies are forecasting a tough 2012 particularly in the first half of the year The bulls are winning the battle for control of the market as we progress into February and trading volumes continue to steadily improve February is a busy time for Aussie income investors with the reporting season and many stocks will be going ex dividend in the next month The US markets took the cue of the upbeat monthly unemployment reading now down to 8 3 and continued their melt up Additionally the reporting season surprises remain to the upside particularly in technology and industrials sectors The tech heavy Nasdaq has held onto its gains which leaves the index at the highest level since 2001 while the Dow Jones and the S P 500 indices are at their highest levels since mid 2008 European markets are also continuing to melt up with the European Stoxx 600 index holding at 6 month highs The London FTSE is outperforming as it approaches 2 year highs while the German market is at 6 month highs The focus in the eurozone has been on the Greek bailout negotiations where overnight there was progress with Greek political leaders reaching an agreement on key austerity measures Also the European Central Bank announced that collateral rules will be relaxed for institutions trying to access cheap money from the ECB Elsewhere a number of central banks have met with the ECB keeping key rates unchanged as expected while the Bank of England said it would increase its asset purchase program by an additional GBP50 billion designed to combat a weak near term growth outlook Asian markets have held on to recent gains China has again been in focus as Chinese CPI figures surprised to the upside up at 4 5 above the expected 4 which could mean the government will postpone any monetary easing near term This report comes close on the heels of last week s report that showed Chinese manufacturing activity figures were better than expected with the PMI at 50 5 in January The Chinese market is at 2 month highs The Aussie market is building for a sharp move as it has been bouncing between its 50 and 200 day moving averages MAs for the past month On the S P ASX 200 the 4180 level is the key pivot support level and as long as this holds the market looks to be setting up for an assault on the 4320 level near term The reporting season so far has not produced many surprises with results pretty much in line and forecasts of a tough 2012 The surprise news from the RBA to leave interest rates on hold is a vote of confidence for the Aussie economy near term This week we again found support around the 4200 level and we are now trading above the 13 day moving average which sits around 4230 Many of the S P ASX sectors are testing their 150 day moving averages near term The Energy sector has broken through as crude oil prices hold around the US100 level We are seeing a rotation out of the defensive sectors such as Utilities Consumer Staples and Health Care while Consumer Discretionary continues to underperform The Materials and Financials sectors are consolidating near term The dividend season is underway so you can look to boost your yields through options strategies The MDS Financial Advisory Services team can help with these trades Call me on 1300 610 024 for further information Investors should also be looking to utilise options strategies to protect their positions as options are a relatively cheap form of insurance given the falling volatility of late Keep an eye on the Aussie reporting season and remain attuned to the news from overseas particularly from the eurozone Greece and China in relation to easing policies and the US with their earnings season Monitor the performance of the US dollar for a guide to the future direction of commodities and equities prices The S P ASX 200 index is currently trading at 4277 and is holding above the key medium term pivot support level around 4180 Key levels for the index next week will be 4180 and 4320 with 4250 the key pivot level By Michael Hevern MDS Trading Desk For daily Buy and Sell recommendations on ASX listed companies register for a free trial of MDS Financial Research Tags ASX earnings season eurozone markets RBA S P ASX 200 US markets Weekly Market Wrap Posted in Stock Market Analysis No Comments Stock Market Analysis Australia s GDP Growth Rate Slows Thursday December 2nd 2010 There are two key reports out yesterday that indicate the strength of the Aussie economy GDP and its trading partner China PMI Australian GDP The Australian Bureau of Statistics ABS show that GDP growth over the third quarter 3Q10 came in at 0 2 percent and the June quarter was revised to 1 1 percent We expected the 3Q10 GDP growth to fall with net exports providing a bigger drag than expected Economic growth in Australia has fallen sharply with the economy expanding by 2 7 percent in the 12 months to September versus economist forecasts of 3 4 percent before yesterday A slump in net exports was the main drag on the economy costing 0 4 percentage points from the quarterly figure Chinese PMI Also in the news was the PMI data showing that Chinese factories ramped up production in November for a 21st consecutive month through increasing output and growth in export orders but they still face pressure from rising input costs The Official Chinese data showed the purchasing managers index PMI jumped to a 7 month high of 55 2 in November up from 54 7 the previous month Inflation continues to be a problem for the Chinese economy and that data will do little to ease concerns of investors over another rate hike in China before the end of the year The government has already increased bank reserve requirements five times this year as well as restricting bank lending in an attempt to dampen inflation The Australian Economy The Australian economy remains heavily reliant on the commodities sectors with the demand for Australian resources from China and India remaining strong which is underpinning growth in the Australian economy through the mining sector Elsewhere the agricultural sector was the biggest contributor to GDP growth in the quarter growing by 21 5 percent and adding 0 4 percentage points to the GDP figure Household spending held up The Reserve Bank RBA should be happy with the recent strong employment figures and how this data confirms the job growth and the commodities boom remains robust and that consumers are continuing to save probably because they want to be prepared for any further rate hikes in the coming months With the RBA raising rates last month to 4 75 before the Christmas spending spree they have given themselves more room to leave rates on hold for the first quarter next year China will be a focus in traders minds going into the end of the year particularly if there is another rate hike in China as that will impact the Chinese demand for our commodities near term The Trade The Australian dollar has fallen since the release of the GDP data and is now trading around US95 7 cents from around US96 1 cents This has a dampening effect on the mood of investors near term particularly with overseas market struggling as they are Investors need to be cautious at this time either by taking profits honouring stop loses and or protecting their portfolios through the use of options as discussed in our recent article on Hedging Your Portfolio By Michael Hevern Head of Research Tags ASB Aussie Dollar Australian economy Australian GDP Chinese PMI RBA Stock Market Analysis Posted in Stock Market Analysis No Comments Analyst s Eye Commodities Rising Friday November 5th 2010 Commodities continue to underpin the performance of the Australian equities market and they surged overnight due to weakness in the US dollar owing to the Fed s commitment to QE2 In the Trader Dealer daily blog we review the CRB index in our market report to keep investors appraised of current market movements The CRB Index CRB is a measure that provides the investor with a snapshot of the performance of a basket of commodities and at the moment it is breaking to levels not seen since mid 2008 Investors need to understand the composition of this index and how it influences equitiy prices in the broader market The Thomson Reuters Jefferies CRB Index TR J CRB The CRB Index is the Thomson Reuters Jefferies CRB Index TR J CRB and it s a commodity price index The index was first calculated by the Commodity Research Bureau Inc in 1957 and was composed of an index comprised of 28 commodities but Thomson Reuters Jefferies has managed the index and its components since 1961 The TR J CRB was originally designed to provide dynamic representation of broad trends in overall commodity prices The components and formula of the index composition have been periodically adjusted to reflect changes in market structure and activity so that the dynamic representation remains relevant Since 1957 there have been 10 revisions to index components Investors need to be aware of the breakdown of the commodities within the index in order to understand its potential influence on the equities market CRB Index Sector Weightings The CRB Index is designed to provide a broad representation of overall commodity prices The breakdown by sector weightings is outlined below The petroleum products market makes up 33 percent of the overall weighting because of their importance to global trade CRB Index Four Tiered Approach The Reuters Jefferies CRB Index uses a four tiered approach to allocating the basket of commodities within the index It is currently made up of 19 commodities as quoted on the NYMEX CBOT LME CME and COMEX exchanges The 19 commodities are sorted into 4 groups each with different weightings including Group I includes only petroleum products but always makes up 33 of the total weightings Group II Liquid assets includes seven commodities which are highly liquid Group III Highly liquid assets comprised of four liquid commodities Group IV Diverse commodities includes commodities that may provide valuable diversification Group I includes only petroleum based products based on their importance to global trade and makes up 33 of the total weightings In the other groups all commodities are equally weighted within Groups II 6 each III 5 each and IV 1 each Further drilling into the Groups Group I WTI Crude Oil 23 Heating Oil 5 and Unleaded Gas 5 Group II Natural Gas Corn Soybeans Live Cattle Gold Aluminum and Copper 6 each Group III Sugar Cotton Cocoa and Coffee 5 each Group IV Nickel Wheat Lean Hogs Orange Juice and Silver 5 each Current Commodities Market In the past couple of weeks base metals and soft commodities have been trading higher on expectations of tightening fundamentals and the lower US dollar In the base metals Copper prices have rallied to a fresh 27 month peak around US3 90 lb due to dwindling Chinese stockpiles Gold recently hit another record trading above US1 380 an ounce and is still trading close to all time highs Crude Oil prices have been underperforming other commodities in the past year but Crude Oil is now also trading close to year to date highs as China is importing at record levels Soft commodities are also trading at multi year highs with Corn trading around 24 month highs Wheat trading around 25 month highs and Soybean Oil trading around 27 month highs With all these commodities trading near record levels we can turn to the CRB Index to confirm the momentum of the underlying move in commodities as seen in the chart below This picture on commodities is very promising for the Australian economy because it is driven by commodities prices The CRB Index is breaking to levels not seen since mid 2008 and this will no doubt underpin a continued rise in the Australian equities market The RBA in deciding on this week s interest rate hike to a cash rate of 4 75 may also be considering this move in commodities prices as a precursor to inflation into 2011 Current Catalysts Near term the key drivers for commodities prices are the strength weakness of the US dollar the scope of the next round of quantitative easing in the US QE2 unemployment levels and Chinese demand which remains robust in the near term The Trade Continue to trade commodities and the miners to the long side until the US dollar finally finds support Copper has broken to new highs and is looking to continue higher Gold is looking to consolidate near term Crude Oil typically trades higher into the end of the year Monitor the catalysts the US dollar QE2 and China for leading indications of any change in sentiment By Michael Hevern Head of Research Tags Commodities commodities prices CRB Index RBA Sector Weightings Thomson Reuters Trader Dealer trading Posted in Trader Dealer News Trading Strategies 1 Comment Stock Market Analysis RBA Interest Rate Reprieve Wednesday October 27th 2010 Mortgage holders are breathing a sigh of relief after the Australian Bureau of Statistics ABS reported benign inflation figures reducing the urgency for another Reserve Bank rate hike The inflation data released by the ABS today has made the RBA s decision on interest rates even more difficult Prior to the release of today s inflation data interest rate futures traders were rating the possibility of a rate hike at the next RBA meeting due to be held on Melbourne Cup Day at around 60 percent The ABS reported September quarter inflation figures came in at 0 7 percent for the quarter and 2 8 percent for the year below economists expectations and below the 3 1 percent rise for the June quarter The Reserve Bank s preferred trimmed mean and weighted median measures of inflation came in at 0 6 and 0 5 percent for the three months to September virtually unchanged from the 0 5 percent result for both last quarter Interestingly the inflation drivers for the quarter came from increases in the price of utilities and charges with water and sewerage up 12 8 electricity up 6 and property rates and charges up 6 2 These increases were offset by significant falls in vegetable prices down 5 4 the cost of pharmaceuticals down 3 9 the cost of fuel down 3 7 and falls in the prices for audio visual and computing equipment down 2 7 At its last meeting the RBA surprised economists and investors by leaving the cash rate on hold at 4 5 percent The meeting minutes revealed the decision was finely balanced and that the RBA needed more information about price pressures in the economy The figure that the RBA uses for its interest rate decision is the underlying inflation which is now running between 2 3 and 2 5 per cent for the year to September in the middle of RBA s target band The underlying inflation reading is now the lowest in over five years and removes the urgency of another RBA rate hike The rising Aussie dollar has helped moderate inflation and it has gained around 13 percent in the September quarter against the US dollar This has resulted in lower prices for consumers and cheaper capital equipment for businesses However at next week s meeting the RBA still needs to consider Whether a rate hike in November would be more effective than waiting til December as much of the Christmas and business planned spending is allocated in the weeks before the RBA December meeting The likelihood of the strong Australian dollar holding near parity for an extended period If there are signs of excessive wage rises as the job market tightens The Trade Interest rate futures traders are now rating the possibility of a rate hike at the next RBA meeting at around 30 percent The next meeting is due to be held on Tuesday Melbourne Cup Day Retailers and mortgage holders will benefit if the RBA interest rate hike is delayed which will in turn help the Consumer Discretionary sector The Banking sector will be hurt as banks have said that the margins for their cost of money are already tight There are a number of external influences on the Aussie economy In the US GDP data is due out later this week and the US Federal FOMC meeting is scheduled for next week and investors have already factored in a new round of stimulus spending QE2 The big surprise in the CPI figures was the very subdued underlying inflation figures which came in at the middle of RBA s target band The underlying inflation reading is now the lowest in over five years and removes the urgency of another RBA rate hike However we expect that if the RBA is going to increase rates before Christmas then it will be more effective if done at the November meeting Tags Aussie Dollar inflation interest rates RBA reserve bank decision Posted in Stock Market Analysis 2 Comments Stock Market Analysis Weekly Market Wrap Friday October 8th 2010 Quantitative Easing and Jobs Markets have held on to their gains of September with central banks committing to further quantitative easing deemed necessary US investors have been cautious this week ahead of their monthly jobs report due out tonight The US dollar continues to plummet below 8 month lows which is pushing commodity prices to record highs Crude oil and copper prices have been pushed to 5 month highs and gold has reached record prices above the US1 360 level European markets drifted higher as investors chose to ignore sovereign debt issues Asian stock markets are trading mixed with the Bank of Japan BoJ surprising investors by pushing interest rates to virtually zero while Chinese markets have been closed most of the week for Golden Week holidays The Aussie market has been trading higher this week spurred on by higher commodities prices and a surprising jobs report Also the RBA surprised by holding rates at 4 5 percent US Markets US stocks rallied to 5 month highs early in the week but caution reigns ahead of the monthly jobs report There was early investor optimism ahead of some key earnings and jobs data later on in the week with the Dow component Alcoa kicking off the reporting season today after market and the non farm payrolls monthly jobs report due Friday Data also showed the US services sector expanded at a better than expected pace in September according to the Institute for Supply Management ISM The jobs report is considered to be key near term particularly for the private sector as this will determine how aggressive the Fed will need to be in its quantitative easing QE II Interestingly the trading volumes in the last quarter were down 25 percent Overnight the Dow closed down marginally 0 2 at 10 949 while in the broader market the S P 500 index was down 0 2 at 1 158 and the tech heavy Nasdaq ended up 0 1 at 2 384 European Markets European stocks drifted higher this week as investors chose to ignore sovereign debt concerns despite Irish debt being downgraded Investors are speculating that the central banks will work to take action to boost the faltering economic recovery as necessary given the surprise move from the BoJ Markets traded to new weekly highs with the UK outperforming again but the German market played catch up on the back of a report that showed German August factory orders had increased at almost four times the pace that economists had forecast led by demand for investment goods such as machinery The euro has soared to fresh 8 month highs above US1 40 which has prompted the European Commission to warn that the rising euro could jeopardise recovery in the EU bloc In the UK the Bank of England said it will maintain its emergency stimulus plan and left its interest rates unchanged at record levels Overnight in London the FTSE 100 index closed down 0 3 at 5 662 the German DAX was marginally up 0 1 at 6 276 while in France the CAC was up 0 2 at 3 770 Asian Markets Asian stock markets have been mixed this week The Bank of Japan boosted sentiment as it unexpectedly announced it will buy more bonds and cut its key overnight call interest rate to virtually zero saying its rates are to remain this low until prices begin to stabilise from deflationary pressures However Japanese exporters are still under pressure as the yen stubbornly remains around 15 years highs against the US dollar The Hong Kong market has drifted higher as the Chinese markets have been closed for most of the week for public holidays Overnight in China the SSE Composite closed at 2 656 while in Hong Kong the Hang Seng Index was flat at 22 884 and in Japan the Nikkei 225 Index was down 0 1 at 9 685 Commodities Base metals continued to trade higher on expectations of tightening fundamentals and a lower US dollar though we did see some profit taking overnight Copper climbed to fresh 5 month highs and gold again traded above all time highs Overnight the benchmark for crude NYMEX for September delivery was down 2 1 to settle at US81 49 and Copper prices were lower with Copper for September delivery down 2 2 at US3 6630 Gold prices are at record highs around the key US1 350 level with December gold down 0 8 at US1 335 20 ASX News The ASX market traded to new 5 month highs this week as the RBA surprisingly left interest rates on hold Yesterday jobs data also surprised with the September employment report showing the economy added 49 500 jobs which is well above the 20 000 increase forecast by economists The jobless rate remained at 5 1 as expected The other big story for the week was the Aussie dollar which came within a whisker of parity above US0 99 overnight its highest level since the currency was allowed to float freely in 1983 The IMF also sees the Australian economy outperforming next year The ASX 200 is still trading around 4700 Our View Markets continue to trade higher The US dollar will be key near term as it s been pushing commodities prices higher In our market the resources stocks have been supporting the recent up move and if they start to see some profit taking then we could see some weakness in the index Investors should take this opportunity to protect their portfolios The S P ASX200 is currently trading at 4685 and is near the top of its current trading range The key level on the ASX is still around 4 600 and the key levels for our index next week are 4750 and 4450 with pivot around 4600 The US non farm payrolls report tonight will be key for US markets near term By Michael Hevern Head of Research Tags Asian Markets ASX ASX News Commodities European Markets Quantitative Easing and Jobs RBA Stock Market Analysis Trader Dealer Trader Dealer News US Market wrap Weekly Market Wrap Posted in Stock Market Analysis Trader Dealer News No Comments Stock Market Analysis Markets Flat Ahead of Asian Holidays Wednesday September 22nd 2010 Stock Market Analysis Markets Flat Ahead of Asian Holidays U S stocks finished flat with gains led by IT while miners financials and consumer discretionary sectors all weighed on the indices European stock markets traded lower overnight Asian stock markets ended mostly higher Markets were quiet ahead of several regional holidays this week The ASX is set to trade lower with little leads from overseas markets The SPI Futures is just above the key resistance level of 4600 the ASX is set to open lower as the SPI Futures closed down marginally 0 2 or 8 pts at 4 640 The key levels for our index today are 4650 and 4550 M A activity continues to drive specific stocks The ASX is likely trade lower today however gold stocks will remain in focus with the precious metal prices reaching another record high Yesterday the RBAs meeting minutes signaled the RBA is ready to pull the trigger on a rate hike soon rather than later Note that we are nearing the end of the dividend paying period which has been supporting our market in the past month Options volatility is subdued at the moment which gives investors access to cheap protection so investors may consider taking this opportunity to protect their portfolios US Markets U S stocks finished flat However the Dow Jones managed to post a fifth straight gain after the Fed said it will be prepared to take additional measures to stimulate economic growth as they are becoming uneasy about the outlook for

    Original URL path: http://blog.traderdealer.com.au/tag/rba/ (2013-02-02)
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  • Weekly Market Wrap: Giddy Up! Markets Jump as ECB Unveils Bond-Buying Program | Online Stockmarket Trading Update
    Hong Kong market is at 5 week lows In commodities gold has rallied to a 4 month high cracking the US1 700 level as the US dollar extended its fall to new 2 month lows and Treasury yields touched the lowest in more than a week due to speculation the Federal Reserve will add to monetary stimulus Crude oil is backing off 3 month highs testing long term technical resistance as the futures settled around its 200 day moving average Copper has performed well in anticipation of further stimulus and is testing 4 month highs The Australian market is finding support around its 50 day moving average due to the prospect of coordinated global central bank action It has been a busy week with the RBA leaving rates on hold disappointing GDP and unemployment unexpectedly falling even as employers cut their payrolls The mining and mine services sector has been hard hit particularly those with exposure to the iron ore industry as the mid tier miners and even Fortescue start to lose out on margins if iron ore continues to slide below US90 tone In our market the defensive sectors have seen support as traders pushed Telstra Real Estate REITs and health care stocks higher this week The health care Real Estate REITs and info tech sectors are all making new yearly highs The utilities financials and energy sectors have seen some profit taking this week The financial sector remains at 12 month highs The industrials and materials sectors faced heavy selling earlier in the week but are attempting to find some support Investors should have protection in place for their capital and could look to reduce their risk by using options and warrants strategies Remain attuned to the news from overseas particularly from the eurozone China and the US Monitor the performance of Italian and Spanish borrowing costs China and the US dollar for a guide to the future direction of commodities and equities prices The S P ASX 200 index is currently trading at 4337 and is looking to close the week modestly higher Key levels for the index next week will be 4260 and 4400 with 4320 the key short term pivot level Traders have received the news they wanted from the ECB and are now hanging out for the US employment report tonight and the next Fed meeting on 12 September and news from Germany regarding a ruling on the ECM For trade ideas and recommendations sign up for a free trial of the D2MX Daily Trading Report which provides a daily serving of insightful market analysis from the D2MX Advisory team including Trade ideas and strategies Market scans to watch International market analysis and Highlights from the S P ASX 200 To request an obligation free trial call 1300 610 024 or email advisory d2mx com au Michael Hevern Investment Adviser D2MX Trading This report was prepared by Michael Hevern It represents the views and opinions of the author It is not intended for use

    Original URL path: http://blog.traderdealer.com.au/2012/09/07/weekly-market-wrap-giddy-up-markets-jump-as-ecb-unveils-bond-buying-program/ (2013-02-02)
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  • Commodities Markets | Online Stockmarket Trading Update
    Sachs Group cut its forecast for Chinese economic growth as reports due this weekend are expected to signal further slowing in the world s second largest economy The Chinese market is still languishing around 4 year lows and the Hong Kong market is at 5 week lows In commodities gold has rallied to a 4 month high cracking the US1 700 level as the US dollar extended its fall to new 2 month lows and Treasury yields touched the lowest in more than a week due to speculation the Federal Reserve will add to monetary stimulus Crude oil is backing off 3 month highs testing long term technical resistance as the futures settled around its 200 day moving average Copper has performed well in anticipation of further stimulus and is testing 4 month highs The Australian market is finding support around its 50 day moving average due to the prospect of coordinated global central bank action It has been a busy week with the RBA leaving rates on hold disappointing GDP and unemployment unexpectedly falling even as employers cut their payrolls The mining and mine services sector has been hard hit particularly those with exposure to the iron ore industry as the mid tier miners and even Fortescue start to lose out on margins if iron ore continues to slide below US90 tone In our market the defensive sectors have seen support as traders pushed Telstra Real Estate REITs and health care stocks higher this week The health care Real Estate REITs and info tech sectors are all making new yearly highs The utilities financials and energy sectors have seen some profit taking this week The financial sector remains at 12 month highs The industrials and materials sectors faced heavy selling earlier in the week but are attempting to find some support Investors should have protection in place for their capital and could look to reduce their risk by using options and warrants strategies Remain attuned to the news from overseas particularly from the eurozone China and the US Monitor the performance of Italian and Spanish borrowing costs China and the US dollar for a guide to the future direction of commodities and equities prices The S P ASX 200 index is currently trading at 4337 and is looking to close the week modestly higher Key levels for the index next week will be 4260 and 4400 with 4320 the key short term pivot level Traders have received the news they wanted from the ECB and are now hanging out for the US employment report tonight and the next Fed meeting on 12 September and news from Germany regarding a ruling on the ECM For trade ideas and recommendations sign up for a free trial of the D2MX Daily Trading Report which provides a daily serving of insightful market analysis from the D2MX Advisory team including Trade ideas and strategies Market scans to watch International market analysis and Highlights from the S P ASX 200 To request an obligation free

    Original URL path: http://blog.traderdealer.com.au/tag/commodities-markets/ (2013-02-02)
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  • European Central Bank | Online Stockmarket Trading Update
    sectors have seen some profit taking this week The financial sector remains at 12 month highs The industrials and materials sectors faced heavy selling earlier in the week but are attempting to find some support Investors should have protection in place for their capital and could look to reduce their risk by using options and warrants strategies Remain attuned to the news from overseas particularly from the eurozone China and the US Monitor the performance of Italian and Spanish borrowing costs China and the US dollar for a guide to the future direction of commodities and equities prices The S P ASX 200 index is currently trading at 4337 and is looking to close the week modestly higher Key levels for the index next week will be 4260 and 4400 with 4320 the key short term pivot level Traders have received the news they wanted from the ECB and are now hanging out for the US employment report tonight and the next Fed meeting on 12 September and news from Germany regarding a ruling on the ECM For trade ideas and recommendations sign up for a free trial of the D2MX Daily Trading Report which provides a daily serving of insightful market analysis from the D2MX Advisory team including Trade ideas and strategies Market scans to watch International market analysis and Highlights from the S P ASX 200 To request an obligation free trial call 1300 610 024 or email advisory d2mx com au Michael Hevern Investment Adviser D2MX Trading This report was prepared by Michael Hevern It represents the views and opinions of the author It is not intended for use by any third party without the approval of Michael Hevern While this report is based on information from sources which are considered reliable its accuracy and completeness cannot be guaranteed Any opinions expressed reflect my judgment at this date and are subject to change Contracting Hevern Pty Ltd is a Corporate Authorised Representative No 408868 of D2MX Pty Limited ABN 98 113 959 596 AFSL No 297950 D2MX and Michael Hevern has been appointed as an Authorised Representative of Contracting Hevern Pty Ltd Opinions conclusions and other information expressed in this report are not given or endorsed by D2MX unless otherwise indicated The information contained in this Report is General Advice only as the information or advice given does not take into account your particular objectives financial situation or needs Disclaimer Using leverage to invest can be a two edged sword as it can magnify your returns when the stock price rises but will in turn magnify the losses if the trade does not perform as expected Tags ASX ASX News commodities markets European Central Bank mario draghi US markets Weekly Wrap Posted in Stock Market Analysis No Comments EU Bailouts and German Naked Short Selling Bans Wednesday May 19th 2010 Sounds like déjà vu all over again Is Europe facing GFC Mark II The European Banks weathered the original GFC relatively well but they are now having

    Original URL path: http://blog.traderdealer.com.au/tag/european-central-bank/ (2013-02-02)
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