Pre-Crime Becomes the Authoritarian Reality

Pre-Crime Becomes the Authoritarian Reality

By Robert Folsom

The 2002 sci-fi movie Minority Report had a memorable plot: In the not-too distant future, the government has the ability to foresee acts of crime. In turn, law enforcement efforts have shifted from investigation to prevention.

If you saw the movie you probably recall that, because the cops know who the criminals will be, they arrest and convict perpetrators before they commit their crimes.

Great idea for a storyline — and for a crime-free world, if it could be so.

Yet think with me for a moment about a “what if” scenario.

Instead of omniscient foreknowledge, let’s suppose you could have the next closest thing: A system of “pre-crime” prevention that was 99.99% accurate — a tiny fraction short of perfect.

Would you want to live in that world? Or, if you were given the power to incorporate this near-perfect (.01 margin) system in society, would you do it?

Let’s take “what if” a step further. If you (or anyone) did impose the 99.99% pre-crime system on society, we can make credible estimates of what the .01 margin of error would include.

As we’ll see in a moment, a pre-crime predictive model in today’s world would seek to thwart terrorism. Governments would deploy it in transportation hubs around the globe. Millions of people would be screened each day.

If one person in every million is a terrorist, here is what our 99.99% model will do: Catch the one real terrorist in that million — and, also, arrest and convict 99 other INNOCENT individuals for that same crime.

Oops. Well, that’s .01 percent for you. Sucks to be one of them. Check my math if it’ll make you feel better.

This exercise reveals a counter-intuitive truth. But the math is simple. And it’s not exactly a stunning insight on my part. Any professional working on a big-data predictive model understands this problem. It’s known as the false positive paradox. That same professional also would be aware that to attain a 99.99% reliable forecasting model is as farfetched as the foresight depicted in Minority Report.

Not that any of this has deterred the Department of Homeland Security, which today is developing what it calls the “Predictive Screening Project.” According to its website, the program

aims to derive observable behaviors that precede a suicide bombing attack and develop extraction algorithms to identify and alert personnel to indicators of suicide bombing behavior. The potential operational benefit is the increased ability to interdict Improvised Explosives Device (IED) threats further from the checkpoint with fewer resources.”

So if Homeland Security is not deterred by the false positives, the question becomes: Why not?

For starters, they know just how far law enforcement has already gone in recent years, in the shift from investigation to prevention — which is to say, a pre-crime mindset is already in place…

… As are pre-crime practices by law enforcement. The NYPD’s stop and frisk policy I described in the May 8 Social Mood Watch is all about prevention, as Police Commissioner Raymond Kelly has said repeatedly. To be clear, cops on the street don’t arrest (much less convict) every individual they stop and frisk. But the NYPD does accept an extraordinarily high number of false positives in order to apprehend a comparatively low number of lawbreakers.

Would Homeland Security’s big-data model be any different?

This pre-crime orientation is the perfect field of battle for the authoritarian and anti-authoritarian trends now unfolding in a time of negative social mood.

Other examples of the shift toward “pre-crime,” you ask? There are so many that in coming weeks I’ll be writing from a literal list (next up: The Supremes on Strip Search). Stay tuned.

Alan Hall’s landmark Authoritarianism article from the April 2010 Socionomist is still available online, and you can follow this link to read it absolutely free.

Andrea Dibben contributed research.

 

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Jeremy Grantham’s Top 5 Dividend Stocks

By The Sizemore Letter

If you don’t know who Jeremy Grantham is, you should.  In fact, once you finish reading this article, you should drop whatever else you are doing, go to his website, and read his latest quarterly letter.  Make it a habit to read every quarterly letter as they come out; you’ll be a better investor for it.  (While you’re at it, make it a habit to read his colleague James Montier’s work as well; Montier’s writing on behavioral investing  is some of the most insightful I’ve ever seen.)

Grantham is the chief investment strategist of Grantham Mayo Van Otterloo (GMO), an investments firm with more than $100 billion under management.  He’s also one of those rare managers who is not afraid to be a voice in the wilderness.  Virtually alone among large money managers, Grantham steadfastly refused to get caught up in the 1990s tech bubble.  His principled stand lost him nearly half his assets under management due to client defections, but those that stuck with him did well in the bear market that followed.

A decade later, he voiced concerns again about bubbles forming in the real estate and financial sectors…and we all know how those turned out.

But lest anyone accuse him of being  a “perma bear,” Grantham was pounding his fist on the table immediately after the 2008 meltdown telling investors to buy when everyone else was too terrified to move.  

Suffice it to say, this is a guy who has had a good grasp on the market conditions of the past several years.  He’s someone you ought to listen to.

With that said, let’s take a look at Mr. Grantham’s top five stock holdings as of his firm’s SEC filings, as reported by GuruFocus.

Stock

Ticker

Current Price

Dividend Yield

Microsoft

MSFT

$30.21

2.7%

Johnson & Johnson

JNJ

$69.03

3.6%

Philip Morris International

PM

$88.99

3.4%

Pfizer

PFE

$23.60

3.8%

Coca-Cola

KO

$76.91

2.7%

 As a demanding value investor, it is not at all surprising to see that all five of Grantham’s top holdings pay dividends far in excess of the market average of approximately 2%. 

It’s also not at all surprising to see that his holdings are serial dividend growers.  After all, for long-term investors, the dividend today is far less important than the dividend 5 years from now.

Coca-Cola ($KO) is the second-largest holding of my favorite ETF, the Vanguard Dividend Appreciation ETF ($VIG), and Microsoft ($MSFT) and Philip Morris International  ($PM) will likely be holdings as well once they meet the time requirements. (In order to be included in the ETF’s underlying index, a stock must have a minimum of ten consecutive years of dividend increases.  Microsoft started paying a dividend in 2003, and Philip Morris International was spun off from parent Altria less than four years ago.)

The real king of dividend growers is Johnson & Johnson ($JNJ), however.   This iconic maker of Band-Aids, Tylenol, Listerine, and too many other health and pharmaceutical products to list has raised its dividend for an astonishing 49 consecutive years. 

The last year in which Johnson & Johnson failed to raise its dividend, John F. Kennedy was the President of the United States.  Stop and think about that for a minute. 

The only stock in Grantham’s top five that has cut its dividend in recent years is Big Pharma giant Pfizer ($PFE), which has been hard hit by the patent expirations and competitive forces that have affected its rivals. 

Big Pharma has done quite nicely in 2012, however, and Pfizer currently trades near its 52-week highs. 

There are no guarantees that owning a basket of Mr. Grantham’s largest stock holdings will beat the market, of course.  There are plenty of years in which his portfolios underperform the market by a wide margin, particularly “risk on” years in which investors throw risk tolerance to the wind.

Still, if you are looking for a portfolio of solid dividend payers for steady, consistent returns, Mr. Grantham’s stocks are worth a good look.

Disclosures: Sizemore Capital is long MSFT, JNJ and VIG.  Sizemore Capital recently sold its holdings of PM.

Related posts:

Midweek Market Outlook

By TraderVox.com

Tradervox.com (Dublin) – The dollar has declined against major currencies as weak US data continued to be published during the first few days of the week. Today, US building permits and the UK MPC Meeting minutes are the main reports awaiting the market.

However, the Fed Chairman Ben Bernanke continues with his testimony before a Senate Banking Committee in Washington. This will be a closely monitored event as investors and analysts look for any indication on future possible measures to stimulate the US economy. Still staying in the US, the market will be given the US building Permits report, which is expected to show a decline of 0.2M from the 0.76M registered previously. However, some good news will be in the Housing Starts report which is expected to show a rise of 0.3 M. Another eagerly awaited report will be the US Beige Book which is used by the FOMC to make interest rate decisions. The US crude oil inventories will be another report that will affect the market today. The report is expected to show a figure of negative 4.7M which is similar to last month’s figure.

Investors and analysts will also be looking at Canada where some reports are expected to catch the markets’ attention. First, the Bank of Canada monetary policy report will be released; this is expected to provide insights on the banks stand on inflation and monetary policy. After this, the BOC press conference will be another important event for the market participants.

There will also be an eye on Great Britain where the Claimant Count Change report will be released. There is an expectation of reduction in this figure to 7,400 from 8,100 registered last month. The eagerly awaited monetary policy committee meeting minutes are expected to show how economic conditions influenced on BOE’s interest rate decisions. Remaining in Great Britain, the Unemployment Rate data will be released where a figure of 8.2 percent is expected; this is the same as the last three months. Finally, the average earnings Index is expected to remain at 1.4 percent.

Disclaimer
Tradervox.com is not giving advice nor is qualified or licensed to provide financial advice. You must seek guidance from your personal advisors before acting on this information. While we try to ensure that all of the information provided on this website is kept up-to-date and accurate we accept no responsibility for any use made of the information provided. Opinions expressed at Tradervox.com are those of the individual authors and do not necessarily represent the opinion of Tradervox.com or its management. 

Article provided by TraderVox.com
Tradervox.com is a Forex News Portal that provides real-time news and analysis relating to the Currency Markets.
News and analysis are produced throughout the day by our in-house staff.
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Central Bank News Link List – July 18, 2012

By Central Bank News

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

Gold “Saddled with Uncertainty” Over QE, Bernanke Tells Lawmakers to “Deal with Fiscal Issues”

London Gold Market Report
from Ben Traynor
BullionVault
Wednesday 18 July 2012, 07:30 EDT

WHOLESALE MARKET gold prices ticked lower Wednesday morning in London, dropping below $1580 an ounce, while stock markets and commodities were broadly flat and US Treasuries gained, as markets continued to digest yesterday’s testimony to Congress by Federal Reserve chairman Ben Bernanke.

Like gold, silver prices also eased, falling as low as $27.04 an ounce in Wednesday morning’s London trading.

A day earlier, gold prices fell 1% in an hour on Tuesday after Bernanke began his testimony. Although the Fed chairman said monetary policy is “still on a loosening cycle”, there was no clear mention of a third round of asset purchases, known as quantitative easing.

“The bull camp in gold wanted to see more quantitative easing,” says a note from CME Group.

“[But] seeing the US economy hold together might keep broad based risk-off deflationary selling interest from resurfacing in the near term.”

“We suspect that the short-term outlook for the precious group will be somewhat lower from here,” adds INTL FCStone analyst Ed Meir.

“While easing may be expected, investors are still saddled with the uncertainty of not knowing exactly when such an order will be given.”

“Monetary policy is kind of at its end right now,” Bernanke told US lawmakers yesterday.
“What will be needed to make it more effective is that fiscal issues need to be dealt with.”

The Fed chairman said that the so-called “fiscal cliff” – the combination of tax hikes and spending cuts currently due to come into effect at the start of 2013 – risks “negative effects likely to result from public uncertainty about how these matters will be resolved”.

“The recent downshift in economic data,” says a note from Swiss refiner MKS, “may suggest that there will be steady pressure on the Fed to provide additional monetary accommodation.”

Bernanke also said that in 2008 the New York Fed “informed all the relevant authorities” in the US and UK about suspicions it had that the interbank interest rate Libor was being manipulated. Bank of England governor Mervyn King however told UK lawmakers Tuesday that he first heard about alleged wrongdoing two weeks ago.

Bernanke is due to give further testimony to Congress today when he appears before the House Financial Services Committee. This will be the last chance Ron Paul has to quiz the Fed chairman, with the Texas Congressman due to retire from Congress in December.

Here in London, the Bank of England’s Monetary Policy Committee voted seven-to-two in favor of the decision to increase quantitative easing by £50 billion to £375 billion, minutes from this month’s MPC meeting published Wednesday show.

The minutes also show the MPC discussed cutting the Bank’s main policy interest rate below its historic low of 0.5%, where it has been since March 2009. MPC members, the minutes say, will review this idea once the impact of the new Funding for Lending scheme – valued at around £80 billion – has had time to be assessed.

UK unemployment meantime fell to a nine month low of 8.1% in the three months to May, according to the International Labour Organization figure published Wednesday.

“Unemployment has been limited in recent months by an increase in people working part-time, more people becoming self-employed and restrained earnings growth,” says Howard Archer, economist at consultancy IHS Global Insight.

“The big question is can the labor market remain resilient given the economy’s ongoing weakness.”
Over in China, the Shanghai Gold Exchange has drawn up a draft proposal that would see precious metals trading expanded to include the country’s interbank market, Dow Jones Newswires reports.

The move would enable banks to trade gold and silver contracts over-the-counter through market makers rather than through exchange pricing on the SGE.

“A market-maker system and more new products in gold will help increase liquidity, which is badly needed in China’s gold market these days,” says an unnamed head of precious metals trading quoted by Dow Jones.

China has overtaken India in recent months as the world’s largest source of gold bullion demand.
In the UK, CME Group has said it plans to offer a clearing service for OTC silver bullion forward contracts traded in London.

The gold mining industry meantime is failing to make sufficient new discoveries of gold to keep pace with production, consultancy Metal Economics Group reports.

“The amount of gold available for production in the near term is likely far less than has been found [in recent years],” says MEG, citing factors such as political instability, declining ore grades and rising costs.

Ben Traynor
BullionVault

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.

(c) BullionVault 2011

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.

 

Aussie Up on Bernanke Testimony as Kiwi Drops on Whole Milk Prices

By TraderVox.com

Tradervox.com (Dublin) – The Australian dollar increased to its highest level in two weeks after Federal Reserve Chairman Ben S. Bernanke indicated that the central bank is prepared to take measures to stimulate the US economy, raising speculation the Fed will add stimulus. The Aussie also continued with its three-day advance against the greenback after the Nation’s leading economic indicator jumped to the highest level last seen in August. However, the New Zealand dollar halted its two day advance after report from Fonterra Cooperative Group Ltd indicated that the prices of whole milk dropped in a second straight auction.

According to Mike Jones, a Currency Strategist in Wellington at Bank of New Zealand, the continued speculation about the third round of quantitative easing has sparked a demand for the Australian and New Zealand dollar even though for the short term. These speculations, which were sparked by Bernanke’s comment as he responded to questions from the Senate Banking Committee, have led to riskier asset demand. Bernanke is expected to continue with his testimony today where more information about stimulus measures might be revealed.

According to a report released by the Westpac Banking Corp and Melbourne Institute today, the Australian leading economic index rose to the highest level in almost a year. The index, which measures future economic growth, showed an advance of 0.8 percent in May to record a reading of 282.5 points. The statement from Bill Evans, who is the Chief Economist at WBC indicated that growth in the second half of the 2012 and that of 2013 will have a improving tempo. He also stated that the monetary authority might keep the current policies for few months following the strong growth registered in the first quarter.

After the publishing of the statement, the Australian dollar rose to $1.0326, which is the strongest it has been since July 5. It had climbed by 0.7 percent yesterday to trade at $1.0316.

On the other South Pacific country, bad news from Fonterra Cooperative Group Ltd led to a decline in the demand for the New Zealand dollar. The kiwi slid against the greenback by 0.2 percent to trade at 79.67 US cents.

Disclaimer
Tradervox.com is not giving advice nor is qualified or licensed to provide financial advice. You must seek guidance from your personal advisors before acting on this information. While we try to ensure that all of the information provided on this website is kept up-to-date and accurate we accept no responsibility for any use made of the information provided. Opinions expressed at Tradervox.com are those of the individual authors and do not necessarily represent the opinion of Tradervox.com or its management. 

Article provided by TraderVox.com
Tradervox.com is a Forex News Portal that provides real-time news and analysis relating to the Currency Markets.
News and analysis are produced throughout the day by our in-house staff.
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Delayed Ruling in Germany may Weaken Effects of ECB Measures

By TraderVox.com

Tradervox.com (Dublin) – Germany’s Federal Constitutional Court in Karlsruhe is set to rule of bids to stop Germany from participating in the permanent bailout fund in eight weeks according to an email statement released yesterday. Investors and analysts have indicated that this might have a detrimental effect on the region despite the efforts by the ECB to lower interest rates. The European Stability Mechanism, which is the permanent bailout fund for the euro zone has been the center of debate and some countries other than Germany have expressed their discontentment with the decision which was made by the EU Summit.

According to the Government Spokesman Steffen Seibert, the Federal Constitutional Court held comprehensive hearing on the matter and will need some time to make a decision. However, Finance Minister Wolfgang Schaeuble had warned against a long delay in making a decision saying that it could lead to worsening of the debt crisis in the region. But Germany’s Chancellor Angela Merkel has reiterated that Germany will not agree with joint debt suggestions proposed by French President Francoise Hollande. In an Interview on Monday, Merkel did not give any grounds for her demands for centralized control over the euro members. However, she said that efforts to bring on solidarity without supervision will not succeed.

The euro has remained down against major currencies as the situation in euro zone continues to take more victims. Investors have continued to seek safe haven currencies hence reducing Germans two-year bond yields to a record of negative 0.052 percent. The decision by the FCC has come a day before the German lawmakers return to Berlin to vote of disbursement of loans to Spain amounting to 100 billion Euros. Efforts to bailout Spanish banks and the sovereign took a new turn after Spanish Prime Minister announced 65 billion euros in tax increases and welfare cuts to help shield the country. Angela Merkel has said that the loans will not be given without condition hence there is expectations of delays in the disbursement and utilization of such loans.

Disclaimer
Tradervox.com is not giving advice nor is qualified or licensed to provide financial advice. You must seek guidance from your personal advisors before acting on this information. While we try to ensure that all of the information provided on this website is kept up-to-date and accurate we accept no responsibility for any use made of the information provided. Opinions expressed at Tradervox.com are those of the individual authors and do not necessarily represent the opinion of Tradervox.com or its management. 

Article provided by TraderVox.com
Tradervox.com is a Forex News Portal that provides real-time news and analysis relating to the Currency Markets.
News and analysis are produced throughout the day by our in-house staff.
Follow us on twitter: www.twitter.com/tradervox

Can the US Building Permits Give a Boost to the S&P 500?

Source: ForexYard

printprofile

At FOREXYARD, we believe in keeping our clients prepared for potentially significant news events. As such, traders will want to carefully monitor the US Building Permits, scheduled to be released today at 12:30 GMT. As can be seen in the chart below, following the release of a higher than forecasted Building Permits figure in April, the S&P 500 saw significant gains.

s&p 500

Don’t miss out on another opportunity to capitalize on market volatility!

Today’s news is forecasted to come in at 0.76M. Should the end result exceed the forecasted level, investor confidence in the US economic recovery could receive a boost, which may result in additional gains for indices like the S&P 500. This is an excellent opportunity for forex traders to take advantage of potentially significant news, so don’t miss out!

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.

Real-Forex Daily review- 18.07.2012

Daily Market Analysis provided by Real-Forex

Tracking the EUR/USD pair

Date: 17.07.2012   Time: 16:50  Rate: 1.2224
Daily chart
The price has checked again the 1.2290 price level, but at this point could not close a candle above this level, so at this point this level can be used as a resistance level. Breaking of the 1.2290 price level will probably lead the price to a Fibonacci correction in size of between a third and two thirds of the last downtrend which started at the 1.2692 price level. On the other hand, continuation of the downtrend will lead the price at first stage to the “One in, one out” pattern target on the 1.2122 price level (red broken lines).
You can see the chart below:

4 Hour chart
Date: 17.07.2012   Time: 17:03  Rate: 1.2234
The price breached the 1.2290 but came back right after. Now the price is in the middle of the range between the 1.2167 and the 1.2290 price levels. Breaching of the 1.2290 resistance level will indicate that the price will continue at first stage to the 1.2340 price level, which is a 38.2% Fibonacci correction of the downtrend marked in red broken line. On the other hand, breaking of the 1.2167 price level will sign the continuation of the downtrend.
You can see the chart below:

GBP/USD
Date: 17.07.2012   Time: 17:15  Rate: 1.5611
4 Hour chart
The price has reached the “One in, one out” pattern by touching the 1.5670 price level. Breaching of this level again will indicate that the price will continue towards the closest resistance on the 1.5716 price level. On the other hand, descend of the price under the 1.5517 price level will create descending price structure, that will probably lead the price back to the last low on the 1.5400 price level at first stage.
You can see the chart below:

AUD/USD
Date: 17.07.2012   Time: 17:22  Rate: 1.0293
4 Hour chart
The price has breached the 1.0251 price level and reached the “One in, one out” pattern target on the 1.0300 price level. The price is moving in an ascending price structure while the continuation of the uptrend will lead the price towards the last peak on the 1.0326 price level. On the other hand, breaking of the 1.0202 price level will probably create a descending price structure which will lead the price towards the last low on the 1.0123 price level.
You can see the chart below:

Important announcements for today:
09.30 (GMT+1) GBP – Claimant Count Change
09.30 (GMT+1) GBP – MPC Meeting Minutes
13.30 (GMT+1) USD – Building Permits
15.00 (GMT+1) USD – Fed Chairman Bernanke Testifies
15.30 (GMT+1) CAD – BOC Monetary Policy Report
16.15 (GMT+1) CAD – BOC Press Conferance

 

Daily Market Analysis provided by Real-Forex

Real-Forex offers institutional-level FX trading conditions, for private and corporate investors. We strive to provide our clients with superior technology and exemplary customer service through our live 24/5 online support and with one of the most advanced yet easy-to-use ECN platform on the market: the Real Stream FX platform.

 

 

USD Receives Boost Following Bernanke Speech

Source: ForexYard

The US dollar saw significant gains during the afternoon session yesterday, following a speech from Fed Chairman Bernanke which resulted in investors shifting their funds back to the greenback. Turning to today, dollar traders can anticipate another volatile day, as a batch of US news is scheduled to be released. Attention should be given to the Building Permits figure, set to be released at 12:30 GMT, followed by the second part of Bernanke’s testimony at 14:00 GMT. Any signs that the Fed will hold off on a new round of quantitative easing for the time being may help boost the greenback in afternoon trading.

Economic News

USD – Dollar Recoups Losses in Afternoon Trading

The USD saw broad gains against its higher-yielding currency rivals during the afternoon session yesterday, following a speech from Fed Chairman Bernanke in which he failed to mention a new round of quantitative easing to boost the American economic recovery. The GBP/USD fell close to 80 pips during the second half of the day before eventually finding support at around the 1.5550 level. Against the Swiss franc, the greenback spiked more than 70 pips to peak at the 0.9850 level.

Turning to today, several US news events have the potential to generate market volatility. First, the Building Permits at 12:30 GMT is expected to come in slightly below last month’s figure. Should the news come in below the forecasted 0.76M, investor confidence in the US economic recovery may decrease, which could lead to dollar losses during mid-day trading. At 14:00 GMT, the Fed Chairman is forecasted to deliver the second part of his testimony. If he once again declines to mention any new initiatives to boost the US economy, the dollar may extend yesterday’s gains during the evening session.

EUR – Euro Tumbles vs. Safe-Haven Currencies

The euro took significant losses against its safe-haven currency rivals yesterday, as negative German data reinforced investor fears that the euro-zone crisis is affecting the region’s biggest economy. The EUR/USD fell over 100 pips during European trading, eventually reaching as low as 1.2187 before staging a mild upward recovery. The pair eventually stabilized at the 1.2215 level. Against the Japanese yen, the euro tumbled to the 96.40 level, down 95 pips for the day.

Today, euro traders will want to pay attention to any announcements out of the euro-zone related to the ongoing crisis in the region. Any further negative news regarding the debt situations in Spain and Italy may result in the euro extending yesterday’s losses. Additionally, US news has the potential to impact the euro. Should any of the economic data signal improvements in the US economy, the euro may continue falling vs. its safe-haven currency rivals.

Gold – Gold Tumbles amid Risk Aversion

The price of gold fell by well over $20 an ounce throughout European session yesterday, as risk aversion returned to the market place amid poor German news. Gold fell as low as $1571.05 during the afternoon session, before staging a mild upward recovery and stabilizing at the $1578 level.

Turning to today, gold traders will want to pay attention to US news, specifically the second part of Fed Chairman Bernanke’s testimony at 14:00 GMT. Should the Fed Chairman once again refrain from outlining specific steps to boost the US economy, risk aversion in the marketplace may increase, which could result in gold falling further.

Crude Oil – Crude Oil Reverses Gains Following Bernanke Speech

After steadily increasing in value since late last week due to ongoing tensions with Iran, the price of crude oil turned bearish yesterday following a speech from Fed Chairman Bernanke. Investors shifted their funds to safe-haven assets after the Fed Chairman failed to mention a new round of quantitative easing to boost the US economic recovery. As a result, crude fell from $89.59 a barrel to $87.76 during the afternoon session.

Today, oil traders will want to pay attention to the US Crude Oil Inventories figure at 14:30 GMT. Last week, oil saw a significant boost after the US inventories figure showed a sharp increase in oil consumption. Should today’s news once again signal that oil demand is up in the world’s leading energy consuming country, crude could reverse yesterday’s losses.

Technical News

EUR/USD

The weekly chart’s Williams Percent Range has dropped into oversold territory, signaling that an upward correction could occur in the coming days. This theory is supported by the Slow Stochastic on the daily chart, which has formed a bullish cross. Going long may be the correct strategy for this pair.

GBP/USD

A bullish cross on the daily chart’s MACD/OsMA indicates that this pair may see upward movement in the near future. In addition, the Williams Percent Range on the weekly chart is currently angling downward, and may soon cross into oversold territory. Traders will want to keep an eye on this indicator, as it may signal possible bullish movement in the near future.

USD/JPY

Most long-term technical indicators show this pair trading in neutral territory, meaning that no defined trend can be predicted at this time. Traders may want to take a wait and see approach, as a clearer picture may present itself in the near future.

USD/CHF

The daily chart’s Relative Strength Index has crossed into overbought territory, indicating that this pair could see a downward correction in the near future. Furthermore, the weekly chart’s Williams Percent Range is currently at the -10 level. Traders may want to go short ahead of possible bearish movement.

The Wild Card

CHF/JPY

The Slow Stochastic on the daily chart has formed a bullish cross, indicating that an upward correction could occur in the near future. Furthermore, both the Williams Percent Range and the Relative Strength Index on the same chart have fallen into oversold territory. Going long may be a smart move for forex traders.

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.