Month: January 2013

Source: ForexYard

Increased confidence in the euro-zone economic recovery, largely due to a strengthened banking sector, helped keep the euro within reach of its recent 11-month high against the US dollar yesterday. Meanwhile, a better than expected US Core Durable Goods Orders figure helped the USD/JPY come within reach of a 2 ½ year high during afternoon trading. Today, the main piece of economic news is likely to be the US CB Consumer Confidence figure, set to be released at 15:00 GMT. A better than expected figure could lead to risk taking in the marketplace, which would boost the euro further.

Economic News

USD – Dollar Maintains Upward Movement vs. Yen

After taking minor losses against the Japanese yen during the first half of the day, the US dollar received a boost following a better than expected Core Durable Goods Orders figure. The USD/JPY gained more than 20 pips after the news was released, eventually reaching 91.08, just below a recent 2 ½ year high of 91.24. Against the Swiss franc, the greenback saw relatively little movement throughout the day. The USD/CHF fell close to 30 pips during early morning trading, before recouping virtually all of its losses later in the day. The pair was trading at 0.9285 by the end of the European session.

Today, all eyes will likely be on the US CB Consumer Confidence figure, set to be released at 15:00 GMT. Following worse than expected consumer confidence data last month, investors shifted their funds to safe-haven assets, which boosted currencies like the US dollar and Japanese yen. If today’s news comes in below the forecasted 64.5, the dollar could see bullish movement against several of its main rivals, including the Swiss franc, British pound and euro.

EUR – Confidence in EU Economic Recovery Keeps Euro Bullish

The EUR/USD gained close to 50 pips to trade as high as 1.3476 during European trading yesterday, just below an 11-month high, as a strengthened EU banking sector combined with positive US economic news led to risk taking in the marketplace. The EUR/GBP saw bullish movement throughout the day, as signs of weak economic growth in England weighed down on the pound. The pair advanced close to 30 pips during the European session to eventually trade as high as 0.8563.

While US consumer confidence data is likely to have the biggest impact on the euro today, traders will not want to forget to pay attention to several potentially significant euro-zone economic indicators in the coming days. An Italian debt auction, German retail sales data and manufacturing figures out of both Spain and Italy, all have the potential to boost the euro further if they show additional growth in the euro-zone economic recovery.

Gold – Gold Takes Additional Losses amid Positive Global Economic News

Gold prices decreased further when markets opened for the week yesterday, as confidence in the global economic recovery encouraged investors to shift their funds to riskier assets. The precious metal fell close to $10 an ounce during European trading, eventually reaching as low as $1651.64, before bouncing back to $1658 after a disappointing US Pending Home Sales figure.

Turning to today, gold traders will want to pay attention to consumer confidence data out of the US. A worse than expected figure may cause investors to shift their funds back to safe-haven assets, which could help gold recover some of yesterday’s losses during the afternoon session.

Crude Oil – Oil Prices Tumble Following US Home Sales Figure

After gaining more than a $1 a barrel during mid-day trading yesterday to trade as high as $96.78, crude oil prices tumbled following a disappointing US Pending Home Sales figure. Worse than expected US news typically leads to speculations that American demand for oil will go down, which typically leads to a drop in prices. By the beginning of the afternoon session, prices had stabilized just above the $95.50 level.

Today, oil prices could decrease further if the US Consumer Confidence figure comes in below the forecasted 64.5. Worse than expected data is likely to result in concerns about the pace of the global economic recovery, which could turn higher-yielding assets, like oil, bearish as a result.

Technical News

EUR/USD

A bearish cross is close to forming on the weekly chart’s Slow Stochastic, indicating that a downward correction could occur in the near future. This theory is supported by the Williams Percent Range on the same chart, which is currently in overbought territory. Opening short positions may be the best option for this pair.

GBP/USD

The Williams Percent Range on the weekly chart has fallen in into oversold territory, signaling that an upward correction could occur in the near future. This theory is supported by the Relative Strength Index on the daily chart, which is currently just below 30. Opening long positions may be the best choice for traders.

USD/JPY

The Relative Strength Index on the weekly chart is currently overbought territory, indicating that a downward correction could occur in the near future. Furthermore, the Slow Stochastic on the same chart has formed a bearish cross. Opening short positions may be the best choice for traders.

USD/CHF

Most long-term technical indicators show this pair trading in neutral territory, meaning a definitive trend is difficult to predict at this time. Traders may want to take a wait and see approach for this pair, as a clearer picture is likely to present itself in the near future.

The Wild Card

Platinum

The MACD/OsMA on the daily chart has formed a bearish cross, indicating that a downward correction could occur in the near future. This theory is supported by the Williams Percent Range on the same chart, which is currently in overbought territory. Opening short positions may be the smart choice for forex traders today.

Forex Market Analysis provided by ForexYard.

© 2006 by FxYard Ltd

Disclaimer: Trading Foreign Exchange carries a high level of risk and may not be suitable for all investors. There is a possibility that you could sustain a loss of all of your investment and therefore you should not invest money that you cannot afford to lose. You should be aware of all the risks associated with Foreign Exchange trading.

Source: ForexYard

Hey Everyone,

Below are some market trends for today.

Good luck!

-Dan

Gold- May see upward movement today
Support- 1651.45
Resistance- 1671.31

Silver- May see upward movement today
Support- 30.22
Resistance- 31.74

Crude Oil- May see downward movement today
Support- 95.85
Resistance-98.17

Dax 30- May see upward movement today
Support- 7744.91
Resistance- 7900.00

EUR/USD May see downward movement today
Support- 1.3355
Resistance- 1. 3478

Read more forex news on our forex blog

Forex Market Analysis provided by ForexYard.

© 2006 by FxYard Ltd

Disclaimer: Trading Foreign Exchange carries a high level of risk and may not be suitable for all investors. There is a possibility that you could sustain a loss of all of your investment and therefore you should not invest money that you cannot afford to lose. You should be aware of all the risks associated with Foreign Exchange trading.

Source: ForexYard

An increase in Australian business confidence led to investor risk taking during overnight trading, which boosted higher-yielding assets. The AUD/USD gained close to 40 pips to reach as high as 1.0454, while the price of crude oil advanced close to $0.50 a barrel to trade as high as $96.93, a more than four-month high.

The USD/JPY gained more than 50 pips during the first part of the Asian session before peaking at 91.00, just below a recent 2 ½ year high. The pair saw a minor downward correction later in the night, and is currently trading at 90.65.

Main News for Today

US CB Consumer Confidence- 15:00 GMT
• Today’s figure is forecasted to come in at 64.8, slightly below last month’s 65.1
• A worse than expected figure may lead to risk aversion in the marketplace, which would boost safe-haven currencies like the USD and JPY

Read more forex news on our forex blog

Forex Market Analysis provided by ForexYard.

© 2006 by FxYard Ltd

Disclaimer: Trading Foreign Exchange carries a high level of risk and may not be suitable for all investors. There is a possibility that you could sustain a loss of all of your investment and therefore you should not invest money that you cannot afford to lose. You should be aware of all the risks associated with Foreign Exchange trading.

By MoneyMorning.com.au

Watch out!

Silver is finally looking ready for action.

And this is as much to do with what my mate and regular Money Morning editor, Kris Sayce, now calls ‘The Doc’s war against the China Bears’.

In case you missed it, I’ve kicked off the year by saying the China bears are about to get smoked.

But sounding my China-Bull ‘battle-cry’ doesn’t just mean that industrial metals are on the menu.

Because a resurgent Chinese economy is also good for precious metals, including a long-time favourite of mine: silver.

Really it comes down to just two things. Firstly, China recently became a net importer of silver.

Secondly, as I’ll now show you, silver is much, much rarer than anyone thinks…

Which Precious Metal is Actually Rarer – Silver or Gold?

Now you’ll sometimes hear that if you took all the gold bullion in the world, and melted it into a single cube, this would measure just 23 metres on each side. To use a timely illustration, it means that all of the world’s gold would fit on two tennis courts.

That shows you very nicely just how rare gold actually is. A big part of why gold is so valuable is due to this level of scarcity.

So…how does silver stack up in these terms?

The answer is surprising. Because the world’s silver bullion would fit in a cube measuring just 17.9 metres on each side. In other words the silver cube would be significantly smaller than the gold cube.

And I’m being generous here, using the largest estimate of the total investible silver bullion I would trust. According to CPM Group, the total global inventory for silver bullion is 1.9 billion ounces. This includes 711moz in futures exchanges, 38moz government stocks, 941moz in coin form and the rest in inferred & unreported private holdings.

Many analysts are less generous, and most work on the basis of just one billion ounces of silver. That would equate to a cube just 14.4 metres on each side!

But I’ll stick to the CPM figure for now. You don’t need to cherry pick to show just how rare silver bullion really is.

Here’s a representation of that 17.9 metres cube for you (using the 1.9 billion ounces of silver number), stacked up against the world’s gold cube.

‘Global gold cube’ Vs ‘Global silver cube’ – SILVER IS MUCH RARER

As you can clearly see – there’s not much silver kicking around.

So here’s a thought: When there is clearly far less silver bullion in circulation than gold… then why is silver 53 times cheaper than gold?

I admit this is comparing apples and oranges to a degree. They are different markets and have different fundamentals.

But the core reason for the different price is that gold is primarily an investors metal, be it punter, hedge fund or central bank – they are buying for its investment qualities.

Whereas silver has long been an industrial metal, with a few investors making up a portion of purchases.

But this is changing.

As recently as 2007, investment demand was just 5% of the market.

By 2012 investment demand was 30% of the market.

And this is where China comes in.

Chinese precious metals demand has exploded recently.

All the press focus on the gold side of the story, as China’s hunger for gold means it’s now the main player in the market. That’s what happens when an economy grows in size five-fold in a decade, and gold ownership becomes legal (and encouraged) along the way!

But the silver story is just as bullish.

The Chinese Passion for Silver and Gold

The key point here is that China has only recently switched from being a silver exporter, to a silver IMPORTER.

In 2012, the tide quietly turned in earnest. The silver stopped flowing from Chinese ports to Hong Kong, and started flowing from Hong Kong ports to China.

You can see how clear this trend of Chinese silver imports is in this chart I provided recently.

Investors often wish that someone would ring a bell to signal the turning point in a market. Well this is just about as close as you’ll get. Whenever China’s hunger for any particular commodity has forced them to import the commodity, it has been a watershed moment.

Although Chinese gold imports have soared to record levels recently, China actually became a significant net importer of gold (5 tonnes/month) as far back as 2007.

And since then the gold price has climbed from $600/oz, to $1650/oz. China is still there now, buying all the dips with their ears pinned back.

Today silver is looking at a similar transformative event in its market as China is now a net importer here too. What’s great for investors today is that this has only just happened, which means you have time to act.

So it’s no coincidence that silver’s technical chart is looking interesting again.

Over the last six months it has bounced off the 200-week moving average, to find support around the 50-week average more recently.

This is very bullish, and the last time we saw this pattern was back in 2010. And it was the prelude to the mother of all silver rallies, which saw the silver price more than double in just nine months.

Australian Dollar Silver Brewing for its Next Monster Rally?

I can’t tell you when exactly silver’s next move will begin. It could be a month, it could be six months. It doesn’t really matter. Silver is an investment to hold for many years – so waiting half a year for the move is immaterial. All that matters is buying it cheaply, before the rally happens.

But here’s something to think about. Chinese silver demand was a big factor in that nine month rally that saw silver more than double. So with China now making a clear move into the silver market today, we could well see more of the same.

With such a small amount of silver bullion available today, it really won’t take much Chinese demand to make a big difference to the silver price!

Dr Alex Cowie
Editor, Diggers & Drillers

From the Port Phillip Publishing Library

Special Report: The Big Money Secret of Ironstone Mountain

Daily Reckoning: Shale the Conquering Hero!

Money Morning: China’s Economy: Enter or Exit the Dragon?

Pursuit of Happiness: How Social Media Can Wreck Your Life

Diggers and Drillers:
How You Can Use a Bottomed-Out Silver Price to Quadruple Your Returns

By MoneyMorning.com.au

It’s war by other means. With the Bank of Japan now buying government bonds and targeting an inflation rate of 2%, a global race to the bottom is on again.

Along with the Fed’s commitment to ‘quantitative easing’ and the ECB’s promise to buy dodgy Mediterranean economies’ bonds, Japan’s latest move has sparked new fears of a currency war.

Like any other war, this one won’t end well, either.

In fact, this same scenario played out in the 1930s, and the chances of another nasty outcome are quite high.

However, the mathematical reality is that the world’s major currencies can’t all be catastrophically weak against each other. It’s impossible.

But the winner may surprise you. Because as this skirmish unfolds, it is the U.S. Dollar that will likely maintain its value against desperate contenders like the yen, the euro and the pound.

At the moment, those are the currencies that look distinctly unlikely to hold their own against the greater realities.

Here’s why, starting with the yen.

Breaking Down the Currency Wars

The truth is Japan’s stated goal of reaching inflation of 2% doesn’t look all that ambitious until you realize that the Bank of Japan’s forecast for inflation to March 2013 is only 0.4%, and its forecast to March 2014 is only 0.9%.

That’s why the Bank of Japan has committed to a massive bond purchase scheme of about $1.2 trillion by January 2014, plus another $150 billion per month after that.

Believe it or not, that’s nearly twice the size of Ben Bernanke’s stimulus program for the United States, and Japan’s economy is only one-third the size of the U.S. economy.

Add in a spending ‘stimulus’ program of more than $100 billion to Japan’s already ludicrous levels of debt, and it becomes obvious that trashing the yen is a likely result of these policies.

Like the Charge of the Light Brigade immortalized by Tennyson, these policies will look glorious initially but will eventually produce disaster, as they come up against the Russian guns at the end of the Valley of Death.

Admittedly, the Tokyo market is already up more than 10% since the election last month, and has further to go. But I wouldn’t make any long-term bets on that market, or the yen.

Like the Bank of Japan, the Bank of England is also committed to monetary stimulus. The current Bank of Canada governor Mark Carney joins the Bank of England in July, but he has already indicated that he likes the stimulus program and would consider expanding it.

And like Japan, in relation to the size of the economy and the government deficit, Britain’s stimulus bond-buying program is also bigger than the Fed’s.

Compared to the other players, the European Central Bank is the most prudent; it has representatives of the German Bundesbank at various key points in its hierarchy, and its President Mario Draghi is himself monetarily cautious.

However, several of its member countries need the ECB to buy their bonds in order to avoid running out of money altogether. Moreover, one of its big players, France, has installed a crazed tax scheme for high earners that is causing a mass exodus, and is bound to bring economic trouble in coming months.

Draghi has promised to buy bonds of dodgy Eurozone governments when needed, and it seems certain that it will be needed at several points in the next year.

Then of course there’s the risk the euro might break up altogether. You can guess what that would do the value of the euro.

The U.S. follies you already know about. The most worrisome feature is the $1 trillion budget deficit and the $500 billion balance of payments deficit, neither of which will be sustainable for much longer.

But compared with the rest of the world, the dollar actually doesn’t look too bad. That’s why the dollar looks likely to hold its own against the other major currencies. It’s the best of a bad lot.

Other Currency War Winners

Of course, all of this printed money can only go in three directions. It can push up prices worldwide in a repeat of the 1970s, where by the end of the decade no country was safe from inflation. Or it could go into gold, which is still a strong buy even at current levels.

The third possible destination for all of this funny money is into currencies of smaller developed markets and emerging markets.

I’m not talking about the BRICs, all of whom have had too much hot money pour into them and have made many of the same mistakes as the big boys.

These include several Asian currencies, notably the Singapore and Taiwan dollars, and the Korean won, which have been carefully managed. In fact, the Korean currency dropped so far against the dollar in 2008-09 that it is still by no means overvalued.

In Latin America, Chile and Colombia have established funds to hold down their currencies, which have zoomed up in the past year. Australia and Canada have both been carefully run as well compared with their larger brethren, and so their currencies should be generally strong.

And in Europe, the Swiss are desperately trying to hold the Swiss Franc down to 1.20 against the euro, while the Swedish and Norwegian crowns and the Polish zloty also have shown signs of outperforming the majors.

Even still, given how it matches up against the major currencies of the world, the U.S. dollar has what it takes to end up on top.

But the truth is if you’re wise, you’ll avoid the lot and go for gold and emerging markets.

Martin Hutchinson
Contributing Editor, Money Morning

Publisher’s Note: This article originally appeared in Money Morning (USA)

From the Archives…

Why the News Could Get Worse for Apple Shareholders
25-01-2013 – Kris Sayce

How to Play the EU Referendum for Profit
24-01-2013 – Kris Sayce

Here’s Why I’m Proudly Bullish About China’s Economy
23-01-2013 – Dr. Alex Cowie

How to Find Stocks for Troubled Times: Keep Scalable Businesses in Mind
22-01-2013 – Nick Hubble

Why It’s Still Not time to Buy the Japanese Stock Market
21-01-2013 – Murray Dawes

By www.CentralBankNews.info     Colombia’s central bank cut its benchmark intervention rate by a further 25 basis points to 4.0 percent, as expected, with the economy still growing below its potential and no upward pressure on inflation.
    Banco de la Republic Colombia also said it would expand its purchase of foreign exchange to keep down the peso by a monthly $500 million to a minimum total of $3 billion between February and May, with daily purchases of not less than $30 million.
    The central bank, which has now cut rates by five times since July for a total reduction of 125 basis points, did not give any hints about its next move, but said it would depend on new information.
    Data from the fourth quarter of 2012 suggests that household spending will grow slightly slower than in the third quarter due to uncertainty over investments, especially civilian works and construction.
     “In short, the Colombian economy is growing below its potential, observed and projected inflation falling below the target of 3%, and no looming upward pressure on it in the near future,” the central bank said in a statement.

   Colombia’s economy expanding steadily in the first half of last year but a delay in mining and energy investments hit growth in the third quarter when the Gross Domestic Product contracted by 0.7 percent, cutting the annual growth rate to 2.1 percent from 4.9 percent in the second quarter.
    Growth among Colombia’s trading partners has been in line with expectations but external demand is expected to remain weak and similar to 2012. Colombia’s economy is forecast to grow 2.5-4.5 percent in 2013, with 4.0 percent the more likely figure, the bank said.
   Colombia’s inflation rate fell by more than expected to a new low for the year of 2.44 percent in December from November’s 2.77 percent.

    “Both the average core inflation, as inflation expectations were further reduced and are below the long-term target (3%),” the central bank added.

    www.CentralBankNews.info


   

By Elliott Wave International

The following is a sample from Elliott Wave International’s new 40-page report, The State of the Global Markets — 2013 Edition: The Most Important Investment Report You’ll Read This Year. This article was originally published in the October 2012 issue of The Elliott Wave Financial Forecast.

When government gets into the act of speculation, the top is usually way past having occurred. Government is the ultimate crowd, every decision being made by committee. It is always acting on the last trend, the one that is already over. (For example, the Federal government passed securities laws to prevent the 1929 crash…in 1934.)

— The Elliott Wave Theorist, 1991

In November 1999, The Elliott Wave Financial Forecast demonstrated the usefulness of this socionomic precept when the Glass-Steagall Act — the post-1929 crash statute the U.S. government adopted to “purportedly protect” the financial industry from itself — was effectively repealed. Citing the government’s role as “the ultimate bag holder,” EWFF stated, “The U.S. government may have just provided one of its greatest-ever demonstrations of this principle.” That was four months after the all-time high in the Real-Money Dow (Dow/gold), and two months before the all-time high in Dow/PPI. Both indexes have been in a bear market ever since.

On Sept. 1, 2012, the U.S. Federal Reserve upped the ante in the latest test of our “ultimate crowd” theory when it introduced QE3, an “open ended” $40-billion-a-month mortgage-buying program. The U.S. central bank further stated that it intends to keep the Fed Funds rate at effectively zero for the next three years. In time, the Fed’s herculean effort to stimulate the financial markets and the economy, with the sanction of government, will illuminate the authorities’ role as the last believer in the old trend even more brilliantly than Congress’ passage and repeal of Glass-Steagall, at the beginning and end respectively, of a Supercycle-degree bull market. To understand how social mood’s long-term positive trend influenced the Fed’s actions, we need to travel back to the central bank’s creation, which occurred in the wake of a major downside reversal in mood.

The Federal Reserve was established (not at all coincidently near a major bottom in 1914) at least partially as a response to the Panic of 1907. In an effort to prevent financial panic from ever happening again (pipe dream #1), the Fed was mandated to restrain the “undue use” of credit in the “speculative carrying of or trading in securities, real estate or commodities.” (Sound like a familiar mix?) When runaway financial speculation burst forth in the late 1920s, the Fed rose to the challenge, or at least tried to. In “The Stock Market Boom and Crash of 1929,” economist Eugene White wrote, “The Federal Reserve had always been concerned about excessive credit for speculation. Its founders hoped the new central bank’s discounting activities would channel credit away from ‘speculative’ and towards ‘productive’ activities. Although there was general agreement on this issue, the stock market boom created a severe split over policy.” According to economist Murray Rothbard, Herbert Hoover and Federal Reserve Board Governor Roy Young “wanted to deny bank credit to the stock market.” In August 1929, within days of the Dow’s ultimate peak, the Fed acted, raising the discount rate to 6%.

As our opening quote from the Theorist notes, government moves by consensus only, so it did not make structural changes deemed capable of preventing another crash until 1934, two years after social mood ended its negative trend and the stock market bottomed. In a bid to strengthen the government’s capacity to curtail “overtrading,” the Securities Act of 1934 also gave the Fed power over brokerage firms’ margin requirements. In the early stages of the bull market, the Fed did not wait long to use its authority. In April 1936, it raised the initial margin requirement on NYSE shares from a range of 25 to 45%, to 55%. Considering that the unemployment rate at the time was 15% — nearly double its current level — this act represents an exceptionally conservative stance. Stocks retreated for a time, only to race back to new highs three months later. The Fed responded by “doubling reserve requirements (against deposits) from August 1936 to May 1937,” right up to and briefly past the March 1937 Cycle wave I stock peak. Economists Christina and David Romer state that the Fed was “motivated by fear of speculation and inflation.”

The all-important upper line of the Supercycle-degree trend channel that dates back to that 1937 peak is shown on the chart on the next page (download the full report for access to the charts). After the next touchpoint, the Cycle wave III peak in February 1966, a speculative binge accompanied the Dow’s double top in 1968-1969. The Fed felt compelled to act again in June 1968 by raising margin requirements to 80%, once again “to curb speculation.” The Fed also pushed the discount rate to 6% in April 1969. In 1970, then-Fed Chairman William McChesney Martin famously stated that his job was “to take the punch bowl away when the party is getting good.”

By 1974, with the DJIA touching the bottom channel line, the Fed acknowledged the bearish trend of Cycle wave IV by reducing NYSE margin requirements for stock purchases to 50%, where they remain today.

In 1984, a Fed study “cast significant doubt on the need to retain high initial margins to prevent excessive fluctuations of stock prices.” When the Great Asset Mania finally pushed the Dow through the top of its Supercycle-degree channel line in 1996, Fed-mandated margin hikes were taken completely off the table. In December 1996, after the Dow made its first decisive break through the top of the channel, then-chairman Alan Greenspan issued his famous “irrational exuberance” comment, citing “unduly escalated asset values.” Yet, unlike his predecessors, he did nothing to change margin requirements. A margin debt explosion in early 2000 “prompted some policymakers to debate the idea of changing margin requirements to stem possible speculative excess,” but a Federal Reserve paper issued the day after the S&P’s March 23, 2000 peak (“Margin Requirements as a Policy Tool”) quashed the idea: “The bulk of the research indicates that changes in requirements do not have a significant permanent effect.” Ultimately, though, the Fed stayed true to its historical pattern of raising the cost of credit near the end of upside extremes along the trendline, hiking the discount rate to 6% in May 2000.

In 2006, with the Dow once again pushing to new highs above the top of the trendchannel and the real estate mania at peak pitch, the Fed raised the discount rate one notch higher, to 6.25%. In a critical change, however, it did not wait for the Dow to reverse course before easing again. In the first stage of a bear-market prevention effort that continues to this day, the Fed reduced the discount rate to 5.75% in August 2007, two months ahead of the Dow’s October peak.

Various government-sanctioned financial bailouts also coincided with the developing stock market reversal. The almost instantaneous impulse to “do something” represented a historic departure from previous behavior. EWFF’s November and December 2007 issues noted that government bailouts generally “appear successful because they tend to come at lows,” and added that the 2007 bailouts were “too close to the market’s peak” to work. The word “appear” is actually the key to that forecast, because it is a reference to the actual cause of the market’s reversal: a change in the direction of social mood. This change is far more powerful than any action the Fed might take to induce a desired market outcome. What matters is not the specific action that the Fed may take, but the fact that it feels compelled to act by virtue of the social pressures under which it operates.

In the case at hand, the Fed’s long-standing objectives have been reversed. Instead of exercising its original mandate to restrict excessive speculation, the Fed is doing everything in its power to keep buyers’ animal spirits alive, even as the Dow is at its 75-year upper trendline.

The open-ended nature of the promise to provide quantitative easing indefinitely and the stated objective of creating a wealth effect in the form of higher stock prices are unprecedented. “Fed Aims to Drive up Stocks,” says a September 14 Washington Post headline.

Here’s the basic plan in Bernanke’s own words: “If people feel that their financial situation is better because their 401(K) looks better, they’re more willing to go out and spend, and that’s going to provide the demand.” Never mind the foolishness of the demand-theory of economic growth.

Just as The Elliott Wave Theorist theorized in 1991, the Fed is getting into the act of speculation with the top long past. It will pay a steep price for goosing the old trend near its end and for fighting the new trend as it begins.

The Elliott Wave Financial Forecast and Robert Prechter’s Elliott Wave Theorist are Elliott Wave International’s two flagship investment publications. For more from EWI, the world’s largest financial forecasting firm, download the new 40-page report, The State of the Global Markets – 2013 Edition: The Most Important Investment Report You’ll Read This Year. Follow this link to download the full report now – for free.

By Chris Vermeulen – TheGoldAndOilGuy.com

Crude oil has been trading ways for the past year between the 2011 high and low. The trading range through 2012 has been contracting with a series of lower highs and higher lows. This pennant formation because it is taking place after an uptrend is a bullish pattern with $110 and possibly even $140+ per barrel in the next 6-18 months.

If you look at the weekly investing chart of crude oil the key support and resistance levels area clearly marked. A breakout of the white pennant will trigger a move to the next support or resistance level. And judging from the positive economic numbers not only form the USA but globally the odds are increased for the $110+ price target to be reached sooner than later.

Crude Oil Price Chart – Weekly Investing

Crude Oil Price Chart – Daily short term Analysis & Target

If we zoom into the daily chart and analyze price and volume you will notice the $100 per barrel level is potentially only 2-3 days way… But keep in mind whole numbers (decade & Century Numbers) naturally act as support and resistance levels. So when the $100 century price is reached there will be a wave of sellers with fat thumbs who will slam the price back down to the $96 and possibly back down to the $92 level before oil continues higher.

Utility Stocks – XLU – Weekly Investing Chart

The utility sector has done well and continues to look very bullish for 2013. This high dividend paying sector is liked by many and the price action speaks for its self… Keep in mind you can view my actual watchlist of stock and ETFs I trade in real-time with my analysis free: https://stockcharts.com/public/1992897

Energy Sector Weekly Investing Chart

Energy stocks which can be followed using the XLE exchange traded fund (ETF) typically leads the price of oil. Looking at energy stocks we can see that they are outperforming the price of crude oil and on the verge of breaking out of a large Cup & Handle pattern. If so then $90 is the next stop but prices may go much higher in the long run.

Energy Stocks and Crude Oil Conclusion:

In short, crude oil is stuck in a large trading range much like gold and silver which I just wrote about here: http://www.thegoldandoilguy.com/articles/precious-metals-miners-making-waves-and-new-trends/

Once a breakout takes place on either the white or yellow lines on the first crude oil weekly chart we should see oil, energy and utility stocks start making some big moves. Depending on the direction of the breakout (Up or Down) it must be played in that direction to generate substantial profits obviously.

Get my daily analysis, updates and trade alerts here: www.TheGoldAndOilGuy.com

Chris Vermeulen

By The Sizemore Letter

Listen to Charles Sizemore discuss Japan, interest rates, and how investing can be a little like a bad divorce with Peggy Tuck and Dave Dyer on Straight Talk Money.

If you cannot view the embedded media player, please follow this link.

SUBSCRIBE to Sizemore Insights via e-mail today.

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By www.CentralBankNews.info     Israel’s central bank kept its policy rate steady at 1.75 percent, saying inflationary expectations for the  year ahead are slightly below the bank’s midpoint range and indicators are pointing to a slight improvement in the expectations for economic activity.
    The Bank of Israel (BOI), which cut rates by 100 basis points in 2012, said that for the first time in a long while investment houses consider the risks to the global economy to have decreased, with the risk of a worsening of Europe’s debt crises down, uncertainty about the U.S. fiscal cliff receding and data from the United States and China continuing to be positive.
    In contrast, data from Europe show that economic activity still hasn’t reached a turning point and the recession continues, the BOI said.
    Israel’s inflation rate rose by more than forecast to 1.6 percent in December from November’s 1.4 percent but the central bank said it was in line with the seasonal path and inflation forecasts for the next 12 months based on market expectations eased to 1.5 percent. Market expectations for the central bank’s policy rate one year from now is for 1.6 percent.
   “The decision to keep the interest rate for February 2013 unchanged at 1.75 percent is consistent with the Bank of Israel’s interest rate policy, which is intended to entrench the inflation rate within the price stability target of 1-3 percent a year over the next twelve months, and to support growth while maintaining financial stability,” the BOI said in a statement.
    Economic activity is Israel have stabilized, the BOI said, and indicators “signal a slightly improvement in expectations for growth over the coming 12 months,” with improvement seen in manufacturing, retail and services.
    The bank’s research department assesses Gross Domestic Product growth of around 3 percent with the rate of increase in home prices continuing to rise. The first impact of the loan limitations that went into effect at the start of November are expected to be seen in the beginning of January, the BOI said.
    The BOI’s assessment of the economy is slightly more upbeat than in December when it said it expected fourth quarter growth to decline from the third quarter and cut its growth forecast for 2013 to 2.8 percent from 3 percent.
    The latest GDP data are from the third quarter, showing annual growth of 3.0 percent, down from 3.1 percent in the second quarter.

    www.CentralBankNews.info