EURUSD stays within a downward price channel

EURUSD stays within a downward price channel on 4-hour chart and remains in downtrend from 1.3711, the price action from 1.3018 could be treated as consolidation of the downtrend. Resistance is at the upper line of the channel, as long as the channel resistance holds, the downtrend could be expected to resume, and another fall to 1.2900 area is still possible. Key resistance is now at 1.3160, a break above this level will indicate that a cycle bottom has been formed at 1.3018, and the downward movement from 1.3711 has completed, then the following upward move could bring price back towards 1.4000.


Daily Forex Analysis

Central Bank News Link List – Feb. 28, 2013: Hungary PM seen picking his “right hand” to head central bank


Here’s today’s Central Bank News link list, click through if you missed the previous link list. The list comprises news about central banks that is not covered by Central Bank News. The list is updated during the day with the latest developments so readers don’t miss any important news.

Dominican Republic holds rate steady, inflation on target

By     The Central Bank of the Dominican Republic (CBDR) kept its Monetary Policy Reference (MPR) rate steady at 5.0 percent as inflation is forecast to be within the bank’s target this year and next and economic growth is also in line with expectations.
    The CBDR, which cut its rate by 175 basis points in 2012 but also left the rate unchanged last month, said the domestic economy expanded by 3.9 percent last year, higher than the average in Latin America and liquidity in international financial markets was good, which could help the flow of capital to emerging economies. In 2011 the Dominican Republic’s economy grew by 4.5 percent.
    “Credit to the private sector in the national currency continues to show a recovery and projections suggest that by the end of the year the funding would grow faster than nominal GDP,” the central bank said, adding that higher credit would allow faster recovery in consumption and private investment.
    Inflation in the Dominican Republic rose to by a monthly 1.26 percent in January to an annual rate of 4.76 percent, up from December’s 3.9 percent, due to the impact of tax reform, the bank said.
    The CBDR targets inflation of 5.0 percent, plus/minus one percentage point in 2013 and 4.5 percent, plus/minus one percentage point, in 2014.

Commonwealth REIT: Sometimes You Take the Gifts the Market Gives You

By The Sizemore Letter

Sometimes, you take the gifts the market gives you.

This is how I felt when I saw shares of Commonwealth REIT (NYSE:$CWH) jump by over 50% on February 26.

When I first purchased shares of Commonwealth for my Dividend Growth Portfolio, it was a stock that had been left for dead.  Wall Street hated management, earnings had been disappointing for months, and the stock had lost nearly half its value over the previous two years.

But the REIT was cheap, trading at barely half its book value, and the share price looked to have finally stabilized.  It seemed a decent contrarian bet for the next 2-5 years.  The value of the underlying properties limited my downside risk, and I could continue to collect the dividend indefinitely. There was always the possibility that the dividend would be cut—and in fact it was late in 2012.  But even at the reduced yield, Commonwealth paid a better dividend than most of the alternatives.

All told, Commonwealth seemed like a very reasonable investment.  No matter how incompetent management could be, it would be hard to lose with a portfolio of high-quality properties selling for well below their book value.

Or so I thought…

You can never put it past management to do precisely the wrong thing at the wrong time.  Rather than buy low and sell high, public companies have a bad tendency to do the opposite.  They buy back their shares when prices are high and issue new shares when prices are low—a destruction of shareholder wealth that should be unforgivable.

On Monday, Commonwealth announced plans to massively dilute shareholders with a new offering of 30 million shares.  Not only was this a dilution of nearly 40%, but the shares were being offered at a 43% discount to book value.

While I was pondering selling, two large shareholders, Corvex Management and Related Fund Management, came to my rescue by suing the company for breach of fiduciary duty and offered to buy the company for $27 per share. Corvex and Related claimed that an independent assessment of Commonwealth’s properties put the value of the REIT at $40 per share.

Maybe Commonwealth is worth that, and maybe it isn’t.  But in a situation like this, it generally doesn’t make sense to find out.  At time of writing, Commonwealth is trading for a little less than $24 per share.  If the Corvex and Related offer at $27 was approved, investors would be looking at 12-13% gains in a very short period of time.

But what if it isn’t approved?

Deals can fall through for any number of reasons.  And in this case, a failure would mean that we are back to where we started on Monday—looking at 40% share dilution.

Commonwealth has become a coin-flip investment with very unappealing odds.  Heads, you win a little.  Tails, you might lose 40% or more.

This isn’t investing; it’s gambling.  And with terrible, risk-seeking odds.

I took the gift the market gave me.  I sold Commonwealth in all client portfolios, and if you currently own it I would advise you to do the same.

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The post Commonwealth REIT: Sometimes You Take the Gifts the Market Gives You appeared first on Sizemore Insights.

Trinidad & Tobago keeps rate steady on contained inflation

By     The central bank of Trinidad and Tobago held its benchmark repo rate steady at 2.75 percent, saying its current accommodative policy stance was appropriate in light of contained inflationary pressures and the expectation that economic activity will improve in 2013.
    The Central Bank of Trinidad & Tobago, which cut its rate by 25 basis points in 2012, said headline inflation rose by 7.3 percent in January, slightly above December’s 7.2 percent with food inflation up an annual 13.8 percent from 12.7 percent due to faster price increases for most food and vegetables.
    The core inflation rate eased to a 2.2 percent rate in January from December’s 3.1 percent.
    Private sector credit slowed down unexpectedly towards the end of 2012 after a slow but steady rise earlier in the year with the growth rate down to 2.1 percent in December from 3.8 percent in November and a 0.8 percent fall in business lending following a 2.6 percent rise in November.
    “With underlying inflationary pressures still well contained and continuing expectation for a turnaround in economic activity in 2013, the Bank views its present accommodative monetary stance as appropriate,” the central bank said.
    Last month the governor of the central bank said he was cautiously optimistic for 2013 and forecast economic growth of 2.5 percent.

    Trinidad & Tobago’s Gross Domestic Product contracted by an annual 1.79 percent in the second quarter of 2012, wider than the 0.49 percent contraction in the first quarter.

How to Trade POMO Manipulation

By Chris Vermeulen,

This week I talked about how the uptrend is to be the focus of trading positions until a down trend is actually confirmed via price and volume action. The SP500 was very close to reversing down this week but with the POMO’s (permanent open market operations) scheduled largest injection of money for February of over $5 billion dollars sent stocks soaring jamming stocks back up into its uptrend.

Take a look at the normal daily injections and then look at Feb 27th’s….



SP500 Futures 10 Minute Chart Zoomed Back 48 Hours…



SP500 Trend – Green, Orange, Red candles indicate trend direction



Short Term Trading Conclusion:

Following the bigger underlying trend of the market along with the big money will keep you on the right side of the market more times than not.  My trading strategy which is now programmed into my trading system clearly tells me the current market trend, entry signals, profit taking, stop adjustments and exit prices.

Creating a proven trading strategy which works in all market conditions and having it programmed to do 95% of the analysis for you keep my trading emotions in check, saves me time and money and keeps things simple which is the key for long term success. So keep your eye on the POMO’s injection schedule each month for days to focus on long day trades or entry points for swing trades.

Receive Free Weekly Reports, Trading Tips and my Book:

Chris Vermeulen


[Video] Socionomics Made Easy

[Video] Socionomics Made Easy

If you understand socionomics, you may also know it can be a challenge to explain to others. In his presentation from the 2012 Social Mood Conference, Robert Prechter provides a simple and wonderfully effective explanation of the vital role social mood plays in human behavior.

On April 13, 2013 some of today’s brightest names in the worlds of finance and research will convene for the 2013 Social Mood Conference. Among them are Todd Harrison from Minyanville, Jon Clifton from Gallup, Michelle Baddeley from Cambridge University, Tobias Preis from Warwick Business School, and Mark Buchanan from Bloomberg View. And that’s just a partial list of the impressive speakers gathered together by the Socionomics Institute. Join Robert Prechter — pioneer of socionomics and the study of social mood — and other groundbreaking presenters for a conference that will put you on the cutting edge of socionomics research!

Register now >>

If you would like to receive the free socionomics content each week, sign up here.

Central Bank News Link List – Feb. 28, 2013: Japan nominates Kuroda as new central bank chief


Here’s today’s Central Bank News link list, click through if you missed the previous link list. The list comprises news about central banks that is not covered by Central Bank News. The list is updated during the day with the latest developments so readers don’t miss any important news.

“Patience Thin” for Gold Investors on Worst Price-Drop in 9 Months, ETF Liquidation

London Gold Market Report
from Adrian Ash
Thurs 28 Feb, 08:05 EST

The PRICE of gold slipped again below $1600 per ounce on Thursday – a level first reached on the way up in July 2011 – to head for its worst one-month drop since May as world stock markets rose.

Broad commodity markets were little changed, while silver bullion crept back above $29 per ounce.

Down 4.5% in Dollar terms since the end of January at $1590 per ounce, gold for Euro investors was headed for a 1.8% monthly drop at €1212.50.

The Sterling price of investment gold was 0.9% lower at £1049.

“Patience with gold seems to be wearing thin amongst many investors,” says a note from BNP Paribas, “as illustrated by the low positioning in Comex gold futures and outflows from ETF [trust fund] holdings.”

Exchange-traded trust funds backed by gold – a new vehicle for cash-price exposure when launched a decade ago – have seen their assets shrink by a record 100 tonnes this month to hit a 5-month low of 2,508 tonnes according to Bloomberg.

“We have seen a massive reshuffling [in precious metals investment] in the past two months,” says Commerzbank’s daily note, pointing to the sharp rise in platinum and palladium ETF holdings so far in 2013.

“The gold price is unlikely to make any significant gains for as long as outflows from the gold ETFs continue. Nonetheless, we do not believe the current weakness in the price of gold to be sustainable.”

Turning bearish on gold late in 2012, however, Credit Suisse analysts today write that “For the gold price to perform better than we expect, there needs to be not just an end to liquidation…but a return to net buying by exchange-traded fund investors.

“It is notable, we think, that the liquidation has been spread across funds listed in the USA, London and Zurich.”

European stock markets meantime rose Thursday morning, after the S&P500 index in New York closed last night above 1500 points – a level reached in Jan. 2000 and July 2007, but with near-50% drops in between.

The Euro currency gained and then lost half-a-cent at $1.3100, but Italian bond yields eased back despite there being no progress in Rome building a new government after this week’s national elections.

“Inconclusive result is credit negative,” said the Moody’s rating agency yesterday, as anti-austerity comic Beppe Grille – winner of the popular vote, and speaking only to the BBC rather than Italian media – spurned the idea of dealing with either Democratic Party chief Pier Luigi Bersani or former prime minister Silvio Berlusconi.

“Italy cannot but follow the European path,” said Italian president Giorgio Napolitano this morning on a visit to Berlin, “taking on its responsibilities and making its share of sacrifices.”

Napolitano set a date of 15th March for “possible consultations” on a coalition solution to begin.

Noting how Pope Benedict has addressed “ethical concerns” about economics during his 8 years in the role, “Catholic Social Doctrine makes absolutely clear,” said European Central Bank president Mario Draghi yesterday, “that subsidiarity has to be paired with support.

“What binds these together is trust…Trust that each will put its own house in order – even if it is politically difficult.”

Pope Benedict was today set to be airlifted from the Vatican to the popes’ summer residence, where he will relinquish the Papal seal and retire as a monk.

Data revisions meantime showed Spain’s economy shrinking faster than first reported at the end of 2012, down by 1.9% in the final 3 months.

Spain’s inflation rate held at 2.8% this month, new data said. Across the 17-nation Eurozone however, consumer prices actually fell 1.0% in Jan. from Dec. according to the Eurostat agency.

Germany’s unemployment level fell this month to 6.9%.

“[In Spain] more than fifty percent of young people cannot currently find jobs,” said Draghi on Wednesday.

“But our answer – both to those who want [the ECB] to do less and to those who want us to do more – is the same: we will preserve price stability. This is our mandate.”

Spain’s giant Bankia group today reported a record €19 billion loss for 2012, when it also received €18bn in aid according to the BBC.

Speaking to the US House Financial Services Committee meantime, Fed chairman Ben Bernanke repeated his comments from Tuesday about the benefits of quantitative easing. But he also spoke at length about potential “exit strategies” from the policy.

Adrian Ash

Gold price chart, no delay   |   Buy gold online

Adrian Ash is head of research at BullionVault, the secure, low-cost gold and silver market for private investors online, where you can buy gold and silver in Zurich, Switzerland for just 0.5% commission.

(c) BullionVault 2013

Please Note: This article is to inform your thinking, not lead it. Only you can decide the best place for your money, and any decision you make will put your money at risk. Information or data included here may have already been overtaken by events – and must be verified elsewhere – should you choose to act on it.