USDJPY breaks below the lower line of the price channel on 4-hour chart, suggesting that a cycle top has been formed on 4-hour chart. Deeper decline would likely be seen and next target would be at 87.50 area. However, the fall from 89.67 would possibly be consolidation of the uptrend from 82.11, as long as 86.82 key support holds, the uptrend could be expected to resume, and another rise towards 95.00 is still possible.
If you trade with Elliott wave analysis, your trading decisions are all about the difference between where the market is vs. where it will be. According to Jeffrey Kennedy, editor of our Elliott Wave Junctures service, risk management skills are vital to being a successful technical trader.
Here’s what Jeff had to say in a recent interview:
Risk management is all about consistency. It is all about longevity. It is like going back to the story about the tortoise and the hare. You want slow or small consistent profits…
Being an analyst and trader involves two totally separate skill sets. As an analyst, you are a master of observation. You are focusing on what could happen. As a trader, your primary focus is on what is happening. Regardless of whether you think the market’s about to top, if the trend is up, as a trader, you’ve got to play it. Divergence is a great example of what I am referring to.
As an analyst, if I am looking at a momentum tool, and
I see divergence, well, that is suggestive of market weakness.
As a trader I have to focus on what is happening,
not what could happen.
If I see the daily trend is up, I have to buy the market. How do I resign myself to the fact that I have divergence, which means a decrease in momentum, a possible weakness, and a possible trend change? I have to focus on what is happening as a trader and the trend is up. How do I reconcile that?
This is where risk management comes into play. For example, you are allowed to play the buy side to the tune of $100,000. If you are seeing divergence begin to enter the market, you may say to yourself, “I have to trade the trend, and the trend is up, but because of this divergence, I am not going to go all in.” … [and] you have to have a very tight stop on the position.
… That is how risk management comes into play, and how
you focus on what is happening and reconcile what is happening
as a trader. But you also have to take into consideration
what could happen when you are wearing your analytical hat
and see that potential for divergence because there are
markets I have seen where the divergence continues for six
months. Analysts trade what could happen, whereas
traders trade what is happening.
Effective risk management is indispensable to successful trading. Ultimately it doesn’t matter how accurately you spot divergence or label your waves if you risk too much on your trades.
 | Get 6 FREE Trading Lessons from Jeffrey Kennedy Jeffrey Kennedy shares his 20 years of wisdom in analysis This report includes 6 different lessons that you can apply to your charts immediately. Learn how to spot and act on trading opportunities in the markets you follow. |
This article was syndicated by Elliott Wave International and was originally published under the headline Risk Management for Technical Traders [Interview Excerpt]. EWI is the world’s largest market forecasting firm. Its staff of full-time analysts led by Chartered Market Technician Robert Prechter provides 24-hour-a-day market analysis to institutional and private investors around the world.
Reputations can take decades to build…and only minutes to throw away. I thought of this last week when I read that American Express (NYSE:$AXP) was gutting its travel services, laying off more than 5,000 employees—or roughly 9 percent of its workforce—most of whom worked in travel.
Remember, Amex is the card for the global elite—executives and high-net worth consumers. There is a certain cachet to pulling an Amex card out of your wallet—particularly a Centurion Card (also known as “the Black Card”). In the company’s own words, Amex targets “super-affluent high net worth individuals on a continual quest for the best and most exclusive. They own companies and frequently travel; they define success.”
High-end travel services were part of what gave Amex its prestige. So pulling back on the perks that give Amex its aura of exclusivity might seem risky. Though as Amex CEO Kenneth Chenault noted in the post-earnings conference call, the economics of corporate travel are changing.
In a time of threadbare budgets and global austerity, full-service travel agency may seem a bit frivolous. And cost-conscious businesses are finding ways to reduce travel costs, both by traveling less (Skype conference call anyone?) and by using lower-frill airlines and hotels. I have no hard data on this, and I don’t know if it is even tracked. But I’ve observed on recent flights that Business Class has been noticeably devoid of suit-wearing gentlemen in their 40s and 50s—what we might think of as “the business crowd.” There are a lot more grey flannel suits in Coach Class these days. Again, no hard data here; just an observation.
So Amex’s decision to scale back its travel services may simply be an acknowledgement of changing times. But Amex has made some other moves recently that would seem to be chipping away at its high-end image. For example, the company partnered with Wal-Mart (NYSE:$WMT)—yes, Wal-Mart, in launching a reloadable pre-paid card targeted at lower-income consumers who often have no access to the traditional banking system.
Now, I have nothing against Wal-Mart. It’s a fantastic company. I own shares for myself and clients, and I myself have saved thousands of dollars over the years buying my sundries there. But I can’t escape the thought that Amex is going slumming.
Amex should tread carefully here. What separates Amex from the Visa (NYSE:$V) and MasterCard (NYSE:$MA) cards used by the lumpenproletariat masses is the image of exclusivity. Amex doesn’t sell financial services; you can get those from any bank down the street. No, Amex sells image.
And Wal-Mart prepaid cards might not quite be the best way to sell that image. Just sayin.’
Amex can never compete with MasterCard and Visa in the mass market, but it doesn’t need to. The company has roughly an 8% market share based on cards in circulation, according to Card Hub. Yet it has 23.8% of market share by purchase volume, barely 3% below MasterCard. There are a lot fewer Amex users, but collectively they spend a lot more than the average credit card user.
Unlike MasterCard and Visa—which are payment networks and not banks—Amex is an actual financial institution with all of the assorted risks this entails. Not surprisingly, Amex trades at a substantial discount to its payment network rivals—a forward P/E of 12 vs. 19 and 20 for Visa and MasterCard, respectively. But given the higher credit quality of its borrowers, it trades at a premium to mass-market card issuers like Capital One (NYSE:$COF), which trades for just 8 times expected earnings.
Based on the numbers, Amex is probably priced “about right,” neither expensive nor cheap. But I am not a buyer at current prices. Amex seems like a company struggling to find its way in a changing market. A marketer of exclusivity has no business offering prepaid card at Wal-Mart.
Disclosures: Sizemore Capital is long WMT.
The post Is Amex Going Slumming? appeared first on Sizemore Insights.
Source: ForexYard
Following several days of losses, the JPY turned bullish during Asian trading last night, after comments from the Japanese economy minister created doubts about how aggressive any future monetary easing from the Bank of Japan will be. The EUR/JPY fell 160 pips, eventually trading as low as 118.27, while the USD/JPY lost 97 pips to reach as low as 88.61.
Comments from Fed Chairman Bernanke yesterday, in which he discussed how fragile the US economic recovery is, boosted demand for gold which led to an increase in prices. The precious metal advanced close to $10 an ounce during Asian trading to reach as high as $1676.47.
Main News for Today
US Retail Sales/Core Retail Sales- 13:30 GMT
• Both indicators are forecasted to come at 0.2%
• If either comes in above their forecasted levels, the dollar could see upward movement during afternoon trading
US PPI- 13:30 GMT
• Forecasted to come in at -0.1% which, if true, would represent a significant increase over last month’s -0.8%
• A better than expected figure could lead to gains for USD and crude oil
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.
CountingPips.com Email Newsletter January 15, 2013
Gold and silver traded higher yesterday while the miners lagged. This is not a bullish sign for the metals. The trend remains down and we need a clean break…
The EUR/USD is consolidating near its current highs, that is natural after such explosive growth. The bulls are not able to overcome the 34th figure so far, but also there from the down side, the pair’s movement is limited by the support at 1.3336.
Non-commercial large futures traders, including hedge funds and large speculators, registered a US dollar short position total of $6.96 billion…
Have our wishes been answered? Scientists have found an oil field which contains 200 times more hydrocarbons than there is water on the whole…
By JW Jones
One of the newest option products to appear in our universe as an options trader is the option series designed to trade the volatility index (VIX). The VIX is a measurement of the implied volatility of the S&P 500 index….
By OilPrice.com
We are in the midst of an amazing energy boom, but by sweeping the idea of peak oil under the rug we are ignoring a significant fact: the relationship between hydrocarbon reserves and flow rates are not the same as they used to be—reserves have increased but flow rates are not as high or sustainable….
By Elliott Wave International
The momentum relationship most often seen in waves 3 and 5 is divergence. Bullish divergence forms when prices make a new low while an accompanying indicator does not. Conversely, bearish divergence occurs when prices register a new high while an accompanying indicator does not. Bullish and bearish divergences are common to waves A and C, just as they are waves 3 and 5.…
See more News, Analysis & Featured Articles at CountingPips Forex News
Last week we saw some profiktaking, but the underlying tone i still positiv, says Jyske Bank Senior Strategist Ib Fredslund Madsen in this weeks edition of ‘The Week Ahead’.
Video courtesy of en.jyskebank.tv
By Chris Vermeulen, TheGoldAndOilGuy.com
Good Morning,
Yesterday’s trading session played out exactly as posted in the morning chart update. Today will be a different story from the looks of it as the dollar index looks to be putting in a bottom and that has the SP500 down 0.40% this morning. It may trigger our first entry point to let long stocks today.
Dollar Index:
SP500 Futures:
Natural gas has been holding up well the past two sessions and looks as though it is forming a cup and handle pattern at the $3.40 level. The first upside target would be $3.50 then $3.60.
Crude oil has been trading sideways/higher the past week but the on balance volume clearly shows sellers are unloading contracts at the $94 level. Yesterday I talked about how crude oil was walking a fine line up its support trend line and once that breaks look out! Price is holding up but be aware it could drop fast and hard any day here.
Gold and silver traded higher yesterday while the miners lagged. This is not a bullish sign for the metals. The trend remains down and we need a clean break before getting long.
Bonds continue to their march higher as expected and this type of price action points to lower stock prices. This morning stocks are set to gap sharply lower confirming money is rolling back into the safe haven (bonds) for protection from falling share prices.
Be sure to follow my trades at www.TheGoldAndOilGuy.com and my free watchlist: https://stockcharts.com/public/1992897
Chris Vermeulen
The Dollar Recovers Lost Ground
EURUSD
The EUR/USD is consolidating near its current highs, that is natural after such explosive growth. The bulls are not able to overcome the 34th figure so far, but also there from the down side, the pair’s movement is limited by the support at 1.3336. As a result of the single currency increase, the RSI on the 4-hour chart entered the overbought zone, and it starts moving out of it due to the consolidation. The sentiment is still bullish, but it is wise not to rule out the correction towards the 33rd figure where buyers are likely to activate. The increase above the 34th figure would allow the to test last year’s high near 1.3480.
GBPUSD
Yesterday, the situation was not in favor of the bulls in the GBP/USD pair. The British pound also came under pressure together with the U.S. dollar as well, due to sales in the cross rate with the euro. As a result, there on the way to the level of 1.6160, the GBP/USD was at the mercy of bears, that caused a drop in the exchange rate to 1.6031. Here was an increase in demand for the pound, and it manged to recover to 1.6093. The pair remains under pressure, but if the bulls manage to defend the support near 1.6030 — 1.6000, the resistance at 1.6170 will be under threat once again, and in case of its breakthrough, the pound will resume its growth towards the 63rd figure.
USDCHF
Active buying of the EUR/CHF continued yesterday too, that allowed the USD/CHF pair recover lost ground. Thus, having found the support at 0.9119, the USD/CHF started increasing until it reached the resistance at 0.9262. This time, there on the 4-hour chart the pair left the oversold zone and it could resume the decrease. But the increase above the 92nd figure would slightly improve the prospects for the dollar, and this time, bears need to return the pair below this level again to be able to break below the support at the 91st figure. The growth and ability of the dollar to consolidate above 0.9300 would significantly weaken the bearish pressure on the pair.
USDJPY
The sales of the yen contributed to the USD/JPY pair’s increase, up to the level of 89.64. Here, the pair bull faced a decent resistance, which at this stage could not constrain their onslaught. This provoked the players to take profits, causing the dollar to drop to the support level at 88.62. The Dollar/Yen pair’s state of being overbought involves the development of a downward correction, but it’s difficult to determine its scope, given that the previous attempt from 88.40 didn’t receive its development. The pair felt the support so far, from which the bulls will try to resume the dollar’s increase, but if this support doesn’t stand, then the rate will drop to 88th figure.
London Gold Market Report
from Ben Traynor
BullionVault
Tuesday 15 January 2013, 08:00 EST
SPOT MARKET prices for gold bullion rose to a two-week high above $1680 an ounce Tuesday morning in London, before dipping back to just below that level before lunchtime, while stocks and commodities were slightly down on the day and the US Dollar ticked higher, with US policymakers continuing to disagree on fiscal matters.
“Gold is still expected to stay above the $1625 January low,” says Commerzbank senior technical analyst Axel Rudolph, “but looks to be short-term range bound.”
“As long as the environment of negative real interest rates persists, gold will remain on the shopping list of investors,” adds a note from refiner Heraeus.
Germany’s central bank meantime plans to repatriate some of its gold bullion held at the Fedral Reserve Bank of New York and all of its gold vaulted in Paris, according to a report from German newspaper Handelsblatt.
Like gold, silver touched a two-week high this morning, hitting $31.39 an ounce, before it too eased lower.
The US economy “is not out of the woods” according to Federal Reserve chairman Ben Bernanke, speaking at a question and answer session at the University of Michigan Monday.
“I want to be clear that while we’ve made progress, there’s still quite a ways to go before we’ll be satisfied…we are approaching a number of other critical watersheds.”
Bernanke noted that politicians are yet to agree a deal that would remove automatic spending cuts that were postponed to the start of March as part of the fiscal cliff deal, nor is there agreement on raising the $16.4 trillion debt ceiling.”
“It’s very, very important that Congress takes the necessary action to raise the debt ceiling to avoid a situation where our government doesn’t pay its bills,” Bernanke said.
“Congress should act as soon as possible,” says a letter dated yesterday from Treasury secretary Timothy Geithner to Republican House of Representatives speaker John Boehner, “to extend normal borrowing authority in order to avoid the risk of default and any interruption in payments.”
The letter adds that the Treasury expects its extraordinary measures designed to keep the US from hitting the debt limit will be exhausted “between mid-February and early March”.
“The full faith and credit of the United States is not a bargaining chip,” President Obama told a press conference yesterday.
“[The Republicans] will not collect a ransom in exchange for not crashing the American economy.”
“The American people,” responded Boehner after the press conference, “do not support raising the debt ceiling without reducing government spending at the same time.”
“We likely will see more protracted bickering in the weeks ahead,” says Ed Meir, metals analyst at INTL FCStone.
“This means that the gold market may go through a repeat of what we saw in December, namely, varying ‘mood swings’ that will result in directionless trading.”
Here in the UK meantime, consumer price inflation held steady at 2.7% last month, according to official data published Tuesday.
German consumer price inflation was also unchanged in December, at 2.1%, figures published this morning show.
On the currency markets, the Euro rose to a 13-month high against the Swiss Franc Tuesday.
Over in Vietnam, owners of gold bars are finding it difficult to sell their bullion, local news site Tuoi Tre reports, since the central bank restricted the number of firms licensed to deal in gold under new rules that came into effect last week.
“Many customers still bring their gold bars to sell at our company,” says Le Phat Vinh, director at SJC Can Tho, which now has to direct them to other firms as it no longer has a license.
“Many banks have yet to offer the gold bullion trading service, despite obtaining the licenses,” Vinh added.
Vietnamese press last week reported a narrowing in the gap between local gold prices and those quoted on international markets, citing prices from the central bank-controlled Saigon Jewelry Co, which became the state brand for gold bars last year and is the country’s largest producer.
Platinum is more expensive than gold again for the first time since March last year, after the price touched $1700 an ounce this morning after the world’s biggest producer Anglo American Platinum (AmPlats) said it plans to close two mines in South Africa and sell a third.
The move that see 14,000 jobs cut, out of a total of 60,000 AmPlats workers. The move is not a “reprisal” for last year’s industrial action, said AmPlats chief executive Chris Griffith, referring to strikes that affected several major platinum producers in South Africa.
“[AmPlats] will not be the last company to cut output,” says John Meyer, partner at brokerage SP Angel in London.
“We would expect platinum miners to pull back by 25-30%, which is going to have a severe impact on prices.”
Gold value calculator | Buy gold online at live prices
Editor of Gold News, the analysis and investment research site from world-leading gold ownership service BullionVault, Ben Traynor was formerly editor of the Fleet Street Letter, the UK’s longest-running investment letter. A Cambridge economics graduate, he is a professional writer and editor with a specialist interest in monetary economics. Ben writes and presents BullionVault’s weekly gold market summary on YouTube and can be found on Google+
(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.
The British pound is believed to weaken opposite the Euro today as inflation in the UK is
estimated to have remained at a relatively high level in December, suggesting
that the squeeze on household incomes continue to be painfully tough. Meanwhile,
signs of stabilization continue to buoy the Euro after ratings agency Standard
& Poor’s raised its outlook on both Luxembourg and Finland earlier.
The UK Office for National Statistics is awaited to report that steep rises in energy
bills kept inflation high in December. Economists project that the Consumer Price
Index remained at 2.7 percent for the third month in a row, after a series of
energy companies pushed up prices at the end of the year. Five large energy
companies introduced price rises in December, hitting some 25 Million
households. Price pressures are said to have been partially offset by lower
fuel and food costs, but analysts say that inflation is likely to rise in the
coming months as poor harvests around the world due to extreme weather are apt
to lift food prices anew.
Rising inflation threatens to deflate the government’s recovery hopes by eroding
consumers’ disposable incomes. Recent data from the ONS revealed that average
earnings rose by just 1.3 percent in October, failing to keep up with elevated
price pressures. The government is gambling on an improvement in spending to
lift the economy this year. It estimates that household consumption should
account for 0.5 percent of the forecast 1.2 percent growth, but recent updates
from retailers suggest that spending was fairly underwhelming in the Christmas
period, solidifying views that the economy shrunk again in the fourth quarter.
In fact, NIESR has already forecast that GDP contracted by 0.3 percent in the
December quarter. In related matters, BOE Governor Mervyn King is due to
testify before the Parliament’s Treasury Select Committee in London today.
Should he express a downbeat tone on the economy, the Pound is apt to decline
on views that the central bank is still considering expanding monetary stimulus
in the coming months.
Meanwhile, the S&P upgraded its outlook on the top-grade credit rating of Luxembourg
and Finland from negative to stable, suggesting that the threat of a downgrade
has eased. The agency cited strong financial and political frameworks in both
nations as reasons to retain their prized credit ratings. On optimism that the
Euro Zone has made considerable progress in its crisis-fighting measures, the
single currency is apt to rise today, warranting a long position for the
EUR/GBP.
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