Verizon (NYSE:VZ) announced that its board has authorized the corporation to repurchase up to 100M shares of its common stock. The board also determined that no additional shares may be acquired under a previously approved program to repurchase up to 100M shares. Under the previous program, which was due to end February 28, approval remained to purchase approximately 60M shares. The authorization to repurchase shares terminates when the aggregate number of shares repurchased reaches 100M or at the close of business on February 28, 2014, whichever is earlier.
Wells Fargo Plans to Withdraw Funds from Hedge Fund
Wells Fargo & Co. (WFC) is just higher after Bloomberg reports the bank is planning to withdraw money from its hedge-fund firm, Overland Advisors, which is seeking new investors. Wells is responding to US limitations on bank risk taking. The bank will withdraw $150 million every quarter until the first half of 2014, the report said. Wells Fargo shares are up 0.24%, or $0.08, to $32.80.
US Weekly Jobless Claims fall more than expected
By CountingPips.com
U.S. weekly jobless claims decreased by more than expected in the week that ended on January 29th, according to a release by the U.S. Labor Department today. New jobless claims fell by 42,000 workers to a total of 415,000 unemployed workers and surpassed market forecasts that were expecting jobless claims to fall to 420,000 workers following the previous week’s 457,000 revised number of claims.
The 4-week moving average of newly unemployed workers rose by 1,000 workers from the previous week to a total of 430,500 workers.
Meanwhile, workers seeking continuing claims for unemployment benefits for the week ending January 22nd also fell for the week. Continuing claims decreased by 84,000 workers to a total of 3,925,000 unemployed workers. The four week moving average of continuing claims dropped by 50,500 workers to a total of 3,929,500.
US Dollar at Multi Year Support Trendline in Forex. My Analysis on USD, Gold Stocks, S&P 500
By Chris Vermeulen, TheGoldAndOilGuy.com
As most sophisticated investors and traders are aware, the U.S. Federal government has run up significant deficits and the long term debt burden is becoming a drain on Gross Domestic Product. That being said, most economists are discussing the possibility of a major decline in the value of the U.S. Dollar going forward as inflationary monetary policy begins to strangle growth. While that view point may prove right over the long haul, in the short run most traders are not likely expecting the U.S. Dollar to rally.
The U.S. Dollar is expected to reach a multi-year cycle low in the near future. From the cyclical low, I expect the U.S. Dollar to regain a strong footing and work higher against the crowd. This is not to say that the U.S. Dollar will not eventually decline, but financial markets do not work that easily. Shorting the U.S. Dollar is a crowded trade and Mr. Market punishes crowded trades quite often by pushing prices the opposite of what the heard is expecting. Should the U.S. Dollar find a strong underlying bid, precious metals and domestic equities would feel the brunt force of such a move. While it remains to be seen if the U.S. Dollar rallies, if it does it will catch many traders and economists by surprise and the unwinding of the short dollar trade could unleash a wave of buying that we have not seen for quite some time.
Let’s take a look inside the market…
Major Index Price Action Over The Past 12 Trading Sessions – Bearish
Below is a table showing the main indexes used for tracking the market. The interesting thing about this data is that the indexes which typically lead the market have been deteriorating for the past 12 days and no one has noticed.
In short, the Nasdaq, Russell and Dow Transport indexes typically lead the market
Every radio station and business channel covers the Dow and SP500 indexes therefor the general public hears the market performance based on the those indexes. The problem here is that the Dow only consists of 30 stocks and the SP500 only holds the top 500 companies which is not a full view of the overall market because there are thousands of stocks listed on the exchanges.
The analysis below can be taken two ways depending which boat you are in… which I will explain in just a minute. The way I see things is a bit of both, I’m not really in or boat or the other… rather I have one foot in each because I have seen the market do things which support both sides (manipulation and measured technical moves) during my 14 years trading.
Ok here are my thoughts/opinions/forecasts…
Idea #1: Dow and SP500 indexes which 99% of the public use to gauge the market are moving higher on light volume. I feel because these indexes hold the stocks which everyone knows and is comfortable buying that this is the reason why they keep going up while the rest of the market silently erodes. It’s the simple thought that big money is moving out of leveraged positions (small cap stocks, transports, technology) in anticipation of a market correction, and the Average Joe continue to buy into brand name stocks boosting the Dow and SP500 thinking things are peachy..
Idea #2: We all know there is market manipulation, the question is how much of the price action is manipulation and how much is real supply and demand? No one will ever really know and that’s just part of the market and trading we have to deal with as traders. But I know there are traders out there blaming the Feds, POMO, and PPT for pushing the market up month after month. So the question is if these invisible forces manipulating the top 30-500 stock prices by buying them up which naturally boosts the Dow and SP500 indexes to keep everyone bullish on the market?
My thinking is that it’s a bit of both and that a correction is just around the corner.
Gold Miner Stocks Underperform Gold – Not a good sign
Gold stocks today (Wednesday) underperformed the price of gold and are also forming a bearish chart pattern. If this plays out then we can expect another sizable pullback in both gold stocks and the price of gold because this index typically leads the gold.
US Dollar Multi Year Support Trendline
The US Dollar is trading down at a key support level and if we get a bounce and possibly even a rally then we could see a sizable correction in stocks and commodities across the board. As we all know everyone is shorting the dollar, buying gold and buying food commodities…. So it makes sense that all these crowded plays are about to see a major shift. Now this is just my contrarian point of view and those of you who follow my work know I’m not bias in my trading. I just take the market one day or week at a time and play the setups. But you must step back and look at the larger picture and at least give it some thought…
Concluding Thoughts:
In short, the major indexes are moving higher on light volume which is not a strong sign, and other key indexes are pointing to lower prices. The question everyone wants to know is how low will this correction be? The answer to that is that you must play the trend as you never know if a trend will last 2 days or a year. I take the market one day at a time continually analyzing price action.
If you would like to get my detailed reports and daily videos covering my analysis please join my newsletter at: www.TheGoldAndOilGuy.com
Chris Vermeulen
Forex Daily Market Commentary
By GCI Forex Research
Fundamental Outlook at 0800 GMT (EDT + 0400)
USD
With much of Asia on holiday, the FX price action was relatively subdued. The dollar did strengthen marginally on signs of escalation in Egypt which coincided with a general stalling of the risk rally. EURUSD traded 1.3771-1.3817, USDJPY 81.49-81.76. A better ADP print also helped the dollar’s cause earlier, but market participants are wary about extrapolating from this reading to Friday’s official non-farm payrolls report.
ADP private payrolls for January were +187k (cons. +140k). Our US economists still forecast a below-consensus gain in Friday’s jobs report. Fed Chairman Bernanke is due to speak on “The Economic Outlook and Macroeconomic Policies.” We think he will have to depart significantly from the latest FOMC statement to really affect the dollar but his comments on inflation will be interesting as he recently said the risk of deflation has “receded considerably,” while the FOMC noted only that “measures of underlying inflation have been trending downward”.
EUR
Today’s ECB policy decision is expected to be a non-event and the focus again falls on President Trichet’s subsequent press conference. Hawkish overtones are expected given the latest Eurozone CPI print for January came in at +2.4% y/y, which is well above the ECB’s target of “below, but close to 2%”. Our European economists do not expect a policy rate hike until Q4.
S&P downgraded Ireland one notch to A-, keeping the rating on watch negative. However, both Moody’s and Fitch rate the sovereign one notch lower still.
European Council President Van Rompuy said the EU is planning to announce a comprehensive solution to the sovereign debt crisis by March 25 – the scheduled date of the second of two upcoming EU Summits.
GBP
MPC members Charles Bean and Andrew Sentance offered different views on prospective monetary policy. Sentance sounded hawkish as usual, suggesting that the weak Q4 GDP report released last week should not be considered too significant and is likely no more than a fluctuation.
Bean on the other hand seemed in no hurry to hike the policy rate, noting that the current policy setting is “sensible” given that the recovery is “fragile”. He also forecast that inflation will “come back down towards the target” in the absence of further external shocks.
Construction PMI came in well above consensus at 53.7 for January, suggesting that activity has bounced back following the adverse weather in December. The more important Services PMI is due today.
TECHNICAL OUTLOOK
EURCHF 1.3069 resistance.
EURUSD BULLISH Climb through 1.3888/1.3948 resistance zone would expose 1.4086. Initial support lies at 1.3690.
USDJPY BEARISH Momentum is negative; scope for 80.93 and 80.54 next. Resistance at 82.15.
GBPUSD BULLISH Move above 1.6299 key high would open up the way towards 1.6379. Support lies at 1.6128.
USDCHF BEARISH Focus is on 0.9301; break of the level would leave little support till 0.9018. Initial resistance is at 0.9482.
AUDUSD BULLISH Recovery found resistance at 1.0149 Fibonacci level; break of this would expose 1.0256. Support lies at 0.9964.
USDCAD BEARISH Expect losses to target 0.9838/20 support area. Near term resistance at 0.9916.
EURCHF BULLISH Rise above 1.3002 exposes 1.3069. Support at 1.2873.
EURGBP BULLISH Break of 0.8619 would expose 0.8672/91 resistance zone. Initial support lies at 0.8510.
EURJPY BULLISH Need to break through 114.01 to confirm the bull trend and aim for 114.94 ahead of 115.68. Support lies at 111.28.
Forex Daily Market Commentary provided by GCI Financial Ltd.
GCI Financial Ltd (”GCI”) is a regulated securities and commodities trading firm, specializing in online Foreign Exchange (”Forex”) brokerage. GCI executes billions of dollars per month in foreign exchange transactions alone. In addition to Forex, GCI is a primary market maker in Contracts for Difference (”CFDs”) on shares, indices and futures, and offers one of the fastest growing online CFD trading services. GCI has over 10,000 clients worldwide, including individual traders, institutions, and money managers. GCI provides an advanced, secure, and comprehensive online trading system. Client funds are insured and held in a separate customer account. In addition, GCI Financial Ltd maintains Net Capital in excess of minimum regulatory requirements.
DISCLAIMER: GCI’s Daily Market Commentary is provided for informational purposes only. The information contained in these reports is gathered from reputable news sources and is not intended to be U.S.ed as investment advice. GCI assumes no responsibility or liability from gains or losses incurred by the information herein contained.
GBP/USD- Technical Update
By Anton Eljwizat
A bullish movement in GBP/USD has pushed a number of technical indicators into the over-bought territory. As I will demonstrate below, the GBP/USD may very well be heading for a reversal, as a bearish cross has taken place on the Slow Stochastic. In addition, the Relative Strength Index (RSI) indicates that the price of this cross currently floats in the overbought territory, signaling downward pressure. Forex traders can take advantage of this impending movement by having their Entry Orders in place to capture this reversal. Don’t forget your Stops and Limits!
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.
Forex Market Wavering amid Egypt Protests
Source: ForexYard
Yesterday’s flare-up in Egypt between forces supporting president Mubarak and those calling for his ouster has apparently added to a rising atmosphere of uncertainty in the region which has pulled some investors away from their recent risk-taking.
Economic News
USD – USD Consolidating ahead of Friday’s Non-Farm Payrolls
Despite the sinking value of the US dollar versus most of its primary currency counterparts, the greenback did undergo a modest correction in yesterday’s afternoon trading sessions. Following the publication of positive employment change in the American private sector over the previous month, as shown by Wednesday’s ADP employment change estimate, the US dollar retraced approximately 100 points against the euro, and 50 points versus the British pound.
The EUR/USD has been surging over the past several trading days, hitting a recent high of 1.3860 before paring its gains and currently resting steadily at 1.3810. The USD/JPY has likewise been in decline but underwent a modest spike following the publication of yesterday’s ADP figures. The pair is currently trading at 81.61.
Today will likely be less significant for the US dollar than many traders expect, regardless of the heavy news day ahead. The reason is because it is the day before Friday’s Non-Farm Payroll data for the month of January. Typically around this time of the month, the greenback consolidates its value near a breaking point prior to Friday’s publication. Traders should expect to see the USD holding steady near its current price values until Friday’s release.
EUR – Egyptian Turmoil Weighing on Risk Appetite, Weakening EUR
The euro has been gaining only modestly over the last several trading days as Middle East turmoil puts risk appetite in the region on unstable ground. The 17-nation common currency has undergone a gradual ascent versus the US dollar as investors have moved away from safe-havens and into the higher-yielding assets of European and Pacific currencies.
Against the dollar, the EUR has moved up from the low of 1.2873 touched on January 10 to as high as 1.3860 yesterday. However, yesterday’s flare-up in Egypt between forces supporting president Mubarak and those calling for his ouster added to a rising atmosphere of uncertainty in the region which pulled some investors away from their recent risk-taking.
With the European Central Bank (ECB) announcing its latest decision on short-term interest rates today, there is a good chance that the EUR will receive additional volatility than is commonly experienced. The continued unrest across the Middle East also adds to the tug-of-war between market optimists and market pessimists. The direction of the euro is unclear for today, but traders should expect wide swings in value as global events play out and affect risk appetite.
JPY – Japanese Yen Mixed as Markets Balance Optimism and Uncertainty
The Japanese yen experienced mixed results against most of its main currency rivals yesterday. The uncertainty across the Middle East and the recent atmosphere of market optimism in the economies of North America and the Pacific has created a strange mixture between increased risk appetite and regional uncertainty.
The yen has responded by weakening against most of its rivals, but strengthening against traditional safe-havens like the US dollar and Swiss franc. With no news expected out of the Japanese economy this week, the yen looks to be continuing to respond to the valuations of the other major currencies. Middle East turmoil will no doubt continue to factor into region-specific risk taking, but optimistic employment figures from the US could offset any shifts in investment portfolios in regards to risk.
Crude Oil – Middle East Unrest Driving Oil Prices Higher
The price of Crude Oil continues to climb following this week’s earlier spike above $90 a barrel. The unrest across the Middle East has many speculators anticipating a decline in output, and thus supply, over the next several weeks. Prices have begun to soar as a result. The decline in US dollar values has only added to the bullishness in Crude Oil prices.
The shifting atmosphere in Egypt and its Arab neighbors has caused a stir among analysts who just prior to the outbreak of unrest were deciding on whether or not the global economy had finally entered a serious recovery. Any revolutionary changes in the political map of the Middle East could greatly impact oil output, pricing, and agreements, carrying over a significant effect on the price of oil. Traders should continue to eye the events in Egypt to gauge whether or not there will be a severe disruption in oil outflows.
Technical News
EUR/USD
The recent sharp climb in value for this pair has pushed the daily chart’s Relative Strength Index (RSI) into the over-bought territory, suggesting strong downward pressure. An impending bearish cross on the weekly Stochastic (slow) supports this notion. Going short in the near future appears to be a preferable strategy for the remainder of the week.
GBP/USD
The price of this pair appears to have breached the upper border on the daily chart’s Bollinger Bands indicating a strong price break-out. The imminent bearish cross on the daily and weekly charts’ Stochastic (slow) oscillator suggests that this movement may be short-lived. Traders may want to enter short positions with tight stops on this pair to capture potentially lucrative downward corrections.
USD/JPY
There appears to be a fresh bullish cross on the daily chart’s Stochastic (slow) for this pair, highlighting mounting upward pressure. A recent breakthrough on the lower border of the daily chart’s Bollinger Bands supports this notion. Going long may turn out to be the best decision over the next few days.
USD/CHF
As this pair bounces against its record low price near 0.9300, it appears to be meeting significant support. This support level has pushed the pair temporarily back above 0.9400 and indicators seem to suggest that it will continue to move bullish as the day progresses. Holding onto your long positions appears wise today.
The Wild Card
USD/ZAR
This exotic pair has recent spiked upward enough to push many indicators into over-bought territory. The daily chart’s RSI floats high above the 70 line, suggesting strong downward pressure. The daily and weekly charts’ Stochastic (slow) also reveals impending bearish crosses. The pair also looks to be approaching a significant resistance level at 7.2000. Forex traders have a great opportunity to catch the downward swing of this pair as it appears to be preparing for a rapid correction.
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.
The US dollar advanced on Wednesday as Egypt situation worsens
The US dollar advanced against the euro and Japanese Yen as the Egypt political crisis took a more intense turn on Wednesday. Investors took fresh positions in the US dollar perceiving it to be the safe haven currency on the crisis.
The dollar index DXY which measure the US dollar’s performance versus its major six counterpart currencies gained to 77.127 as compared to 76.008 on Late Tuesday. The Euro declined to 1.3805 against the greenback as compared to $1.3835 on Tuesday’s late trading session. The single currency reached its highest since November to 1.3862 in earlier trading sessions.
The greenback also advanced against the Japanese Yen to 81.58 as compared to 81.40 on late Tuesday.
On the latest news on Egyptian situation the president Hosni Mubarak disclosed that he intends to leave the office in September and is not looking forward for re-election. Director of currency research Kathy Lien from GFT commented, “This attempt to ease the unrest fell on deaf ears as protesters call for Mubarak to step down now and not seven months later, the continued rioting indicates that the problems in Egypt are not behind us, causing some investors to pare back their risk trades.”
The British Pound advanced to 1.6183 against the US dollar on Wednesday’s North American trading session as compared to $1.6148 on Tuesday. The reason behind the gain of Pound Sterling was the increased purchasing managers’ index depicting more construction activity for the month of January as compared to December.
The Australian dollar declined to 1.0086 versus the US dollar as compared to $1.0129 on Tuesday. The recent threat of Cyclone Yasi on shores of North Queensland has ceased all the key ports for base metal mining operations resulting in depreciation of Australian currency.
About the Author
Daily forex trading news written by Rehan from DailyForexTrade.com
Options Trading, Silver Butterfly and Seasonality
By J.W. Jones, optionstradingsignals.com
One of the notes that I keep stuck to my computer reads “remember seasonality”. For those just now becoming familiar with options, you may assume I am reminding myself not to forget deer season or the opening of the season for striper fishing. While these are important dates for many of us to remember, I am reminding myself that there are distinct periods within the options expiration cycle where certain trades work better and give a competitive advantage to the trader who recognizes and takes advantage of this seasonal pattern.
As a quick review, remember that option cycles historically have been established with monthly expiration cycles. For the knowledgeable option trader, different time periods within this monthly cycle are known to have distinct characteristics. The primary reason for these different characteristics is the “non linear” decay of time premium.
This “non linear” behavior simply means that the decay of time premium accelerates as expiration approaches; for us visual thinkers, envision a snowball rolling downhill. The recent arrival of weekly options has opened a whole new concept of seasonality for traders using those vehicles, but that is a discussion for a future time.
The butterfly is one of the option constructions most affected by seasonality. The last two weeks of the monthly option cycle is even called “butterfly season” by many option traders. The classic behavior of butterflies is that they are only slightly impacted by changes in the price of the underlying early in the cycle and exhibit increasing response to price change late in the option cycle. This peculiar functional characteristic has frustrated many traders who have tried to employ butterflies early in the options cycle and have routinely seen the correctly predicted price action result in minimal or no profit in the position.
For those of you unfamiliar with this construction, let’s look at an example. First and foremost, we need to be aware of our position in the cycle. February options expire Friday, February18, this is 17 days from today. That is close enough to the mid point of the cycle to be open season for butterflies.
The essential structure of a butterfly is to establish a spread in either calls or puts that has the structure +1/-2/+1. The spread uses options which all expire in the same month. A variant of the classic butterfly, the iron butterfly, uses both puts and calls but this metallic beast will need to be the subject of another post.
Since a picture is worth “a thousand words”, let’s look at an example of a butterfly structure before we discuss some of the nuances of which the trader must be aware. Now, don’t go out and put this on, it should be used only as an example and not a trade recommendation or financial advice! This trade is to demonstrate the butterfly structure and to lead us to some functional considerations. The trade is that of a put butterfly in SLV.
As you can see the position is slightly bearish, with maximum profit occurring at expiration at the SLV price of 26. For those who are bullish or even neutral, a similar trade could be constructed to reflect that viewpoint. An important point is to notice the difference in the solid blue line, the expiration P&L graph, and the intermediate time frames indicated by the broken lines. As is readily apparent, the sensitivity of the position to price movement is much less at points in time prior to expiration.
A key point to remember when trading butterflies is that maximum profit is ALWAYS when the price of the underlying, in this case SLV, is at the short strike at expiration. By remembering this fundamental characteristic, an option trader can center the butterfly on his projected price target in order to maximize profit.
Another fundamental characteristic of the butterfly construction is that this structure usually works best in an implied volatility environment that is in the upper half of its historic range. What is the reason for this characteristic? The options we sell short in the center of the butterfly represent a major profit engine for the structure. If these options are somewhat “rich”, as indicated by the calculated level of implied volatility, they provide a substantial boost as the time premium we are short decays into expiration.
How does the butterfly under discussion fit into the volatility consideration? Below is the volatility chart for SLV. The brown line is the volatility actually demonstrated in the market recently, and the blue line is the implied volatility calculated from actual option trades. As you can see, we are currently in the mid range of volatility for this underlying. This is a good place to be for an options trade, and provides an additional “tailwind” for the trade together with our current position in the time of the option expiration cycle.
Successful option traders understand the limitations and advantages of the vehicles available to them. The butterfly can deliver outstanding risk/reward scenarios, and the probability of its success is enhanced by understanding the nuances of its use.
Get My Trade Ideas Here: http://www.optionstradingsignals.com/profitable-options-solutions.php
J.W. Jones
Forex Update: ADP Employment rises by 187K jobs. US Dollar mixed in Trading.
By CountingPips.com
The US dollar has mixed against the other major currencies in the forex markets as US jobs data released today showed a better-than-expected result in January. The dollar has gained ground on the day versus the euro, Japanese yen, Swiss franc, Australian dollar and the New Zealand dollar while trading lower against the Canadian dollar and the British pound sterling.
The US stock markets, meanwhile, have been slightly lower in morning trading after yesterday’s sharp rise with the Dow Jones industrial average lower by almost 10 points 
while the NASDAQ and S&P 500 have decreased by roughly 0.5 points and 3.5 points, respectively.
In commodities, oil has edged up slightly by $0.63 to the $91.40 level while gold futures have decreased by $2.20 to trade at the $1,337.40 level at time of writing.
Today’s ADP private employment report showed that private companies hired a total of 187,000 workers in the month of January. This data follows a downwardly revised gain of 247,000 workers in December after the original report had shown a rise of 297,000 workers.
Market forecasters and economists were expecting the jobs report to come in with a gain of approximately 140,000 jobs for the month. The advance in private January jobs continues a streak of 12 straight months of job increases for the ADP report.
The service sector saw an increase of 166,000 workers in January and the goods-producing sector registered a gain of 21,000 workers. Manufacturing jobs rose by 19,000 workers while the construction sector declined by 1,000 workers. The financial sector rose by 3,000 workers in January.
Large businesses added 11,000 workers for January while medium-size businesses hired 79,000 workers. Small businesses or companies with less than 50 workers also saw employment payrolls climb by 97,000 workers for the month.
The market-moving US nonfarm government payroll report is scheduled to be released on Friday at 13:30 GMT. Last month, the government report showed 103,000 workers were added to payrolls and the unemployment rate was at 9.4 percent. Early forecasts are looking for the payrolls report to increase by 135,000 workers.
