InvestMacro Forex News

By MoneyMorning.com.au

Ramped up production and ample supply have weighed on natural gas prices over the past year, pressuring natural gas stocks.

But news out of Asia this week delivered support for a long-term bull market for natural gas.

The International Energy Agency (IEA) reported Tuesday that worldwide demand for the fossil fuel is expected to increase some 17% over the next five years, thanks in a big way to China.

Despite recent signs of a slowing economy in the Asian nation, Chinese consumption of natural gas is expected to double during the period, according to the IEA. China’s demand for the fuel is forecast to grow 13% a year through 2017.

“Asia will by far be the fastest-growing region, driven primarily by China, which will emerge as the third largest gas user by 2013,” the IEA wrote. “There are no doubts that China will become a major importer of gas. The question for external suppliers is how much pipeline gas and LNG China will need in five or 10 years.”

North American natural gas companies are poised to benefit the most from the surge in Asian demand for the fuel. The region is positioning itself to become a major net exporter of liquefied natural gas (LNG) over the next five years as new projects come on line, the IEA said. The agency added that Asian LNG producers, such as Malaysia and Indonesia, stand to become net importers as local demand balloons and output wanes.

China won’t be alone in increasing demand. The IEA estimates U.S. natural gas consumption will increase 13% by 2017, and European natural gas demand will grow by 7.9%.

By 2017, the agency says, low natural gas prices should lead to gas generating almost as much electricity as coal in the United States.

“The continued boom in unconventional gas in the U.S. may even herald the end of the hundred-year dominance of coal in U.S. power generation. In 2005, when the first shale well was fractured, coal produced almost three times as much power in the U.S. as gas. By 2017, the race will be almost even,” the IEA reported.

Natural Gas is a Great Buying Opportunity

Money Morning (USA) Global Energy Strategist Dr. Kent Moors said a few weeks back that low natural gas prices offer a great buying opportunity for beaten down stocks that will rise as demand soars.

In fact, Moors said it was inevitable natural gas prices would climb.

“The rise in demand for everything from electricity to petrochemical feeder stock, LNG exports, and even usage in vehicle fuels will start driving that price up over the next two years,” said Moors.

Moors said investors need to look past near-term performance so they don’t miss out on long-term profit potential. In reality, investors can now hop aboard depressed natural gas stocks while they are still cheap.

Diane Alter
Contributing Writer, Money Morning

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

From the Archives…

How Bad Monetary Policy Will End the Welfare State
2012-06-01 – Dan Denning

The Setting Sun of the Japanese Economy
2012-05-31 – Greg Canavan

The US Dollar – The “Strongest of the Weak”
2012-05-30 – Kris Sayce

Europe’s Energy Resource Puzzle
2012-05-29 – Kris Sayce

The Market Has Crashed, But This Graphite Stock Has More Than Doubled
2012-05-28 – Dr. Alex Cowie

Natural Gas Stock Prices Ready to Surge on Demand From Asia

By Central Bank News

Bank of Canada keeps key rate steady at 1 percent

Canada’s central bank maintained its key overnight rate at 1 percent, balancing a weakening global economy against continued expansion in the domestic economy. The Bank of Canada added that it may still tighten monetary policy to keep inflation close to its 2 percent target if the domestic economy continues to expand.

 “The timing and degree of any such withdrawal (of monetary policy stimulus) will be weighed carefully against domestic and global economic developments,” the bank said in a statement. “The outlook for global economic growth has weakened in recent weeks. Some of the risks around the European crisis are materializing and risks remain skewed to the downside. This is leading to a sharp deterioration in global financial conditions.”

The Bank of Canada’s next decision on rates is on July 17.

By Central Bank News

Australian central bank cuts rates a further 25 basis points

"Europe's economic and financial prospects have again been clouded by weakening growth, heightened political uncertainty and concerns about fiscal sustainability and the strength of some banks," the bank said in a statement from its governor, Glenn Stevens. He added that domestic growth was modest and the outlook for inflation made it possible to ease monetary policy.

By Taro Hideyoshi

I wrote earlier article about the strategy traders who trade the strategies. From my point of view, I believe that if traders stick with trading strategies which have been properly back-tested, they can make more money than trading any other way. Making more money is not the only reason that strategy trading is a good method in trading. There are other benefits as well.

In this article, we will talk about a few obvious benefits of strategy trading.

Let’s begin with the most important one. The most important benefits of strategy trading is it will allow you to sleep well at night when you have a confidence by knowing that your trading strategy has been back-tested and is proven to be successful. No matter what happens in the market during the day or night, you will have a string belief that your strategy will gain you profits eventually.

The other one of the benefits, you are able to choose a market and a trading strategy that is appropriate to your personality. The basic idea of choosing a strategy is to select a market and a trading strategy that you feel most comfort when trading.

For example, traders who want to stay in market all the time will choose different strategies than day traders. If you are a trend follower, then you will choose a different type of strategy than traders who trade the swings.

Another advantage for strategy trading is you always know your financial situation. If you stick with the strategy’s rules, the rules will tell you how to manage your money and how to size your trading positions.

Strategy Traders will always know the maximum equity drawdown associated with their strategies from the results of historical tests. Hence, they are able to determine the capital requirements and prepare enough capital to maneuver through the eventual drawdown. There will be no financial surprises such as your broker give you an unexpected call for additional margins.

I have been providing you reasons why the strategy trading is the most viable way to make money in the markets in this article. And included type of skills and knowledge that are necessary
to be a successful strategy trader in earlier article. I hope they will give you enough motivations and can convince you to turn to strategy trading.

So, what are you waiting for? Let’s go on to the nuts and bolts of finding your viable trading strategies.

About the Author

Taro is an experience trader who trades in stocks, futures, forex. He strongly focuses on technical analysis, trading systems and money management.

If you would like to find more articles on MetaStock Tutorials, MetaStock Formulas, Trading Systems and Money Management. Please go to MetaStock Trading System.

You would also find the list of recommended books for trading & investing at The Investing Books.

Patience Can Be Rewarding

By Elliott Wave International

Copy the tiger when stalking and capturing a “pounce-ready” trade.

Tigers know the prey they covet is elusive: they show great patience and care when stalking the target.

I came across this description of the tiger’s technique:

“When hunting, this cat…may take twenty minutes to creep over ground which would be covered in under one minute at a normal walk…the tiger will sometimes pause…move closer and so lessen that critical attack distance…before finally raising its body and charging.

“…they wait until a victim comes close and spring up…This ambush method of hunting uses less energy and has a greater chance of success.”

You must “ambush” high confidence trades. Long-time professional trader and teacher Dick Diamond says patience is vital before the ambush.

I talked to Diamond about his famous 80/20 trade, which he means literally — he says it has at least an 80 percent chance of success. It’s the only trade set-up Diamond will take.

————

Q: Could you tell me about the 80/20 trade?

Diamond: The 80/20 trade is based on indicators that create a specific trading set-up. A trader must act on this set-up immediately. You must wait, and then pounce like a cat when the opportunity presents itself. Then you set stops. In shorter time frames, like trading from a five minute chart, the 80/20 set up may come along a few times a day. If you’re trading a longer time frame, like off of a 120 minute or 240 minute chart, the 80/20 will come along less frequently, but when it does, the opportunity will be bigger. The 80/20 trade can be especially rewarding for position traders. Sometimes the indicators reveal what I call 90/10 or even 95/5 trades.

Q: What emotional factors do students need to work on the most?

Diamond: Traders must be calm and confident. You can’t be a Nervous Nellie and succeed at trading. Calmness comes from learning the proper trading techniques.

Q: What’s different about trading today vs. when you started out in the 1960s?

Diamond: When I started trading, execution took up to five minutes — now it takes less than a second. Time is money, so computers provide a great advantage to today’s trader compared to pre-computer days. At the same time, while computers allow the trader to see multiple indicators on the screen, one must avoid indicator overload. One must learn to narrow down the number of indicators.

Get instant access to our FREE report from Veteran Trader Dick Diamond In this 12-page report, you will learn practical tips and tricks from veteran trader Dick Diamond. He and his assistant, Roberto Hernandez, share many of their time-tested techniques with you, with excerpts from interviews and course materials designed to accelerate your trading progress. Download your FREE 12-page report today >>

By The Sizemore Letter

For all the talk of dividend investing in recent years, it’s easy to lose sight of the fact that the average U.S. stock, as measured by the S&P 500, still yields a paltry 1.9%.

Even the Vanguard Dividend Appreciation ETF (NYSE: $VIG), a core long-term holding in my ETF portfolios—barely yields 2%, and this is a dividend-focused product.   

In a world where the 10-year Treasury note yields an almost laughable 1.5%, the dividends onU.S.stocks might seem downright rich in comparison.  But for an investor looking to fund their retirement through portfolio income, they still don’t pay the bills. 
Not surprisingly, many investors have gravitated to higher-yielding European stocks.  The dividend yield on large-cap European stocks is more than double that of their U.S. counterparts; as a case in point, the Vanguard MSCI Europe ETF (NYSE:$VGK) yields 4.3%, compared to the 1.9% offered by the SPDR S&P 500 ETF (NYSE:$SPY).

The PowerShares International Dividend Achievers ETF (NYSE: $PID), which like VIG, focuses on dividend growth rather than high current yield, also pays out significantly more than its U.S. counterpart, at 3.1% vs. 2.0%.

Still, those higher yields have offered little protection to investors who have seen their “safe” dividend paying stocks lose 20% of their value in a matter of weeks.   I see a lot of value inEuropeat current prices, and I believe the ongoing sovereign debt crisis has created opportunities for those of us willing to take the risk of a little short-term volatility.  But given that the months ahead promise to be a rocky road, it’s important that investors understand a few things about European dividend stocks.

Here are a handful of points to keep in mind.

1. When looking at the dividend history, remember to take into account the effects of currency moves.  As a case in point, consider the Anglo-Dutch consumer products giant Unilever (NYSE: $UL).  Unilever has raised its dividend for over 25 consecutive years.  But if you look at the company’s dividend history on, say, Yahoo Finance, you’ll see that the dividend paid by the U.S.-traded ADR appears to shrink in some years.  This is due to changes in currency exchange rates.  So, when doing your research, look for the dividend history in the reporting currency and take the posted dividend history of ADRs with a grain of salt. 
2. European firms tend to make two payments per year.  For U.S. investors accustomed to regular quarterly payouts, the European tradition can be confusing and send conflicting signals.  There is generally a larger “final” dividend declared and paid after the fiscal year has finished and a smaller “interim” dividend roughly six months later.  Again, using Unilever as an example, you can see that this was the company’s policy prior to 2010. (Starting in 2010, Unilever adopted a policy more in line with American norms of paying a regular quarterly dividend; see the company’s statement for more info.)
3. Rather than keep the dollar amount of the dividend stable, European firms have historically sought to maintain a stable payout ratio.  This means that the cash payout to investors can vary wildly based on the company’s performance in any given year.  While this makes sense from the company’s perspective and allows for more financial flexibility, it can be frustrating for investors who depend on the dividend to meet their current income needs.  As capital markets become more global and investors more vocal, European companies are slowly adopting the  practice of paying more regular dividends. 

One final point to consider when investing inEuropeis the maturity of the markets. Europeis a developed continent with an aging population.  With little need to invest for  growth in their home markets, European companies are, by and large, mature cash cows that throw off a lot of cash. 

In The Future for Investors, Jeremy Siegel pointed out that slow-growth companies (or even negative growth) companies can make fantastic investments, and he used tobacco giant Altria (NYSE:$MO) as an example.  By Professor Siegel’s calculations, Altria was the most profitable investment of the past century, despite the fact that tobacco has been a dying business since at least the 1970s.    With no need to invest in a non-existent future and being restricted from advertising, Altria had little else to do with its cash than to pay dividends. 

Though I would stop short of comparing the entire European stock market to Big Tobacco, the lessons are much the same.  A slow-growth, high-dividend portfolio can produce spectacular returns over time.

I’ve recommended PID as a “fishing pond” for solid European dividend stocks, and I would reiterate that recommendation today.  Consider buying the ETF or, if you’re up for the challenge of researching individual stocks, use the ETF’s underlying holdings as a screened list of high-quality dividend payers from which to choose. 

Disclosures: Sizemore Capital is long MO, PID, UL, and VIG

By TraderVox.com

Tradervox (Dublin) – The Australian dollar has strengthened against the US dollar after the Reserve Bank of Australian decided to lower interest rate. The advance was limited as the cut on overnight lending rate was lower than the market was expecting. The RBA decreased the interest rate by 0.25 to reach 3.5 percent, but the market was expecting a 0.5 percent decline.

The central bank had earlier made a 0.25 cut from 4.0 percent to 3.75. Analysts have said that the continued crisis in Europe might force the RBA to make further decisions on the interest rate. The New Zealand currency has held its yesterday’s gains as Asian stocks rose increasing the demand for riskier assets. According to a currency strategist, Roy Teo, of ABN Amro Private Bank in Singapore, the RBA did not meet the high expectation of the market in their rate decision but it has still caused so changes in the market and investors need to be positioned for short-covering.

The Australian dollar might bring some risk appetite in the market but only for a short time before the market start focusing on the Greece election to be held on June 17. The crisis in Italy and Spain is also expected to escalate but the market is waiting for the outcome at the G8 meeting. The Australian dollar has climbed by 0.6 percent against the greenback to exchange at 97.84 US cents. The Australian dollar had slid to eight-month low of 95.82 during trading last week.

The New Zealand dollar was high against the US dollar by 0.3 percent today to trade at 75.84 US cents. The kiwi increased as Asian stocks rose; the MSCI Asia Pacific Index of stock increased by 1.4 percent after it had declined for the last four trading days. Analysts are expecting this advance to be momentary and the Asia Pacific currencies might go back to their losing streak.

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

By TraderVox.com

Tradervox (Dublin) – There has been mixed signs in the US economic recovery and American companies are wary of this. However, hiring in the US may have increased in May after it gained the least in six months last month. According to economists keeping track of the US economy, this is a show of progress in the labor market which is good for the economy and the US dollar. A report to be released today is set to show that payrolls increased by 150,000 workers according to the market expectation after it gained by 115,000 in April.

However, analysts are claiming that there need to be a larger job and wage gain to spur a consumer spending and hiring that is needed to accelerate economic growth. But there is an impediment to this; the raging euro crisis and the slowing economic growth in emerging markets such as China and Brazil may lead American companies to limit the number of workers as they wait for evidence of growth in the US economy. Assurances from the government and the Federal Reserve may be needed to ensure that large American companies have confidence in the economy.

The Labor Department report is also expected to show that the private sector injected 164,000 jobs in the market in May after an increase of 130,000 was registered in April. If the report confirms these predictions, the total payrolls would bring a monthly average of 190,600 for the first five months of 2012 which is an increase from the 176,200 average monthly payrolls for the first five months of 2011. This might give American companies some confidence in the US economy.  The unemployment rate is expected to drop to 8.1 percent according to most analysts in the market. This is a new three-year low and will spur the dollar to finish the week and start a new month on a high against most major peers.

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

Video courtesy of ForexCT – A leading Australian forex broker, liscensed by the Australian Securities & Investments Commission, offers the MetaTrader4 and PROfit Platform to retail traders. Other services include Segregated Accounts, Trading workshops, Tutorials, and Commodities trading.

Source: ForexYard

The euro saw significant gains against the US dollar throughout yesterday’s trading session, as investors continue to digest last week’s disappointing Non-Farm Payrolls data. The EUR/USD moved up more than 100 pips over the course of the day, and was able to come within reach of the 1.2500 level. Turning to today, traders will want to pay attention to the US ISM Non-Manufacturing PMI. The PMI is considered an accurate gauge of economic health. Should the end result come in below expectations, it may lead to speculations that the Fed will soon initiate a new round of quantitative easing, which could weigh on the greenback.

Economic News

USD – Dollar Extends Bearish Movement

The US dollar extended its downward momentum throughout yesterday’s trading session, as weak unemployment data released last week has led to fears that the US economic recovery is losing momentum. Against the Japanese yen, the dollar briefly dropped below the psychologically significant 80.00 level during the morning session. The greenback was able to stage a slight upward correction later in the day and eventually stabilized around 78.20. The AUD/USD was up almost 100 pips during the European session yesterday, reaching as high as 0.9745, before moving downward and stabilizing around 0.9725.

Turning to today, traders will want to keep an eye on the US ISM Non-Manufacturing PMI, set to be released at 14:00 GMT. Analysts are predicting that the figure will come in around 53.6, which if true, would represent industry expansion and could help the dollar recover some of its recent losses. That being said, should the figure come in below expectations, it may cause investors to further doubt the USD’s status as a safe-haven currency and could result in additional downward movement for the greenback.

EUR – Euro Stages Upward Correction

The euro was able to move up vs. its main currency rivals throughout the day yesterday, but analysts were quick to warn that any gains may be short lived ahead of potentially significant euro-zone news set to be released later in the week. In addition to the more than 100 pip gain against the US dollar, the euro also advanced more than 50 pips against the GBP and 95 pips against the CAD. By the end of the European session, the EUR/GBP was trading around the 0.8115 level, while the EUR/CAD was at 1.2990.

Taking a look at the rest of the week, euro traders will want to pay close attention to the euro-zone Minimum Bid Rate on Wednesday followed by a Spanish bond auction on Thursday. Some analysts are predicting that the European Central Bank may cut interest rates when they meet on Wednesday. If true, it could cause the euro to come under renewed pressure. Furthermore, investors will be carefully monitoring the Spanish bond auction for clues as to the state of that country’s debt issues. Unless the auction goes smoothly, the euro could see downward movement towards the end of the week.

Gold – Gold Sees Gains amid Concerns Regarding Economic Recovery

Gold was able to largely hold onto its gains from last week during trading yesterday, as investors concerned with the pace of the global economic recovery continued to shift their funds to the precious metal. Investors are now treating gold as a safe-haven following disappointing employment data out of the US last week which resulted in the greenback tumbling. After reaching as high as $1628 an ounce yesterday morning, gold saw slight downward movement and spent most of the afternoon trading at the $1610 level.

Turning to today, traders will want to monitor what direction the USD takes. With investors concerned that the Fed is getting ready to initiate a new round of quantitative easing to stimulate growth in the US, any disappointing American news could lead to dollar losses, which could benefit gold’s status as a safe-haven and lead to additional gains for the precious metal.

Crude Oil – Crude Oil Sees Upward Movement

After weeks of steadily declines, the price of crude oil saw some upward movement during European trading yesterday. Analysts attributed the bullish movement to dollar weakness following last week’s worse than expected Non-Farm Payrolls figure. After dropping as low as $81.17 a barrel during early morning trading, the price of oil steadily increased, and eventually reached as high as $83.70.

Turning to today, oil traders will want to pay attention to the US ISM Non-Manufacturing PMI, set to be released at 14:00. Should the figure come in below expectations, the USD could come under renewed pressure which may result in oil extending its bullish movement. Typically, the price of oil increases when the dollar is weak, as the commodity becomes cheaper for international buyers.

Technical News

EUR/USD

The Williams Percent Range on the weekly chart is in the oversold zone, indicating that this pair could see upward movement in the coming days. This theory is supported by the Slow Stochastic on the same chart, which has formed a bullish cross. Going long may be the wise choice for this pair.

GBP/USD

In a sign that this pair could see an upward correction in the near future, the Relative Strength Index on the daily chart has dropped into oversold territory. Furthermore, the Williams Percent Range on the weekly chart is currently at the -90 level. Opening long positions may be a good idea for this pair.

USD/JPY

While the Williams Percent Range on the weekly chart is pointing to a possible upward correction in the coming days, most other long term technical indicators are in neutral territory. Traders may want to take a wait and see approach for this pair, as a clearer picture may present itself shortly.

USD/CHF

The Relative Strength Index on the weekly chart is approaching the overbought zone, indicating that this pair could see a downward correction in the near future. Additionally, the Slow Stochastic on the same chart appears to be forming a bearish cross. Traders will want to monitor these two indicators, as they may point to an impending downward correction.

The Wild Card

CHF/JPY

The daily chart’s Slow Stochastic has formed a bullish cross, indicating that upward movement could occur in the near future. Furthermore, the Relative Strength Index on the same chart has dropped into oversold territory. This may be an excellent time for forex traders to open long positions, as an upward correction could be forthcoming.

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.