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USDJPY’s bounce from 86.26 extends to as high as 87.71. Further rally to 88.00-88.50 area to reach the next cycle top on 4-hour chart is still possible. Resistance is at the upper boundary of the falling price channel, now at 88.60, as long as the channel resistance holds, the price action from 86.96 is treated as consolidation of downtrend from 94.98 (May 5 high), and another fall towards 84.82 (2009 low) is still possible, only a clear break above the channel resistance could indicate that the fall from 94.98 is complete.

Daily Forex Forecast

AT&T Incorporated, the largest telecommunications company in the US, or T in the New York Stock Exchange topped the market’s earnings estimate due to the increased demand in iPhones. Thanks to its exclusive contract to sell the iPhone, the company was able to sell 3.2 million units of the phone and gained a net 496,000 contract subscribers. As a result, the company’s EPS upped the market’s $0.57 forecast with $0.61. Now, will AT&T be able to sustain its market share with the newly rolled out iPhone G4?

The company’s surprise upside in its second quarter earnings caused its stock to gap up. I’m even more bullish in the stock now since it also broke free from a double bottom pattern. Moreover, it was able to move above the 50-day and 200-day moving averages as well. An RSI of more than 50 likewise indicates that its upward momentum is gaining speed. Given yesterday’s price action, the stock could aim for its previous high just above $26.25. But if it weakens, the bottom of the gap or the neckline should still keep it afloat.

More on LaidTrades.com …

The shares of United Parcel Service, the world’s largest package delivery company, or simply UPS in the New York Stock Exchange reversed for the better following yesterday’s price action. As you can see from the chart, the stock has gapped up and in the process also broke out from an inverted head and shoulders formation. At the same time, it likewise cut through both the resistances at the 50-day and 200-day moving averages. At present, the the stock is sitting just above 63.00 support. It could range for a while between this level and 65.00 before moving higher. A break above 65.00 could send it up all the way to 69.00 or at its previous high just above 70.00. On the flip side, a move below the neckline could pull its price back to the bottom of the gap.

What caused the UPS’ rise was the company’s better-than-expected second quarter earnings. During the 2nd leg of this year, the company reported a 71% jump in its earnings from a year earlier. Revenue likewise rose by 13% during the period. What contributed to this upside were the 7% increase in its US domestic package business, 23% expansion in international packages, and 10 leap in its supply chain and freight operations. And as the global markets stabilize, the global trade business would only get better which would in turn be beneficial for the company.

More on LaidTrades.com …

EURUSD remains in uptrend from 1.1876 and the fall from 1.3028 is treated as consolidation of uptrend. Support is now at 1.2732, as long as this level holds, another rise to 1.3200-1.3300 is still possible next week, and a break above 1.3028 will signal resumption of uptrend. However, below 1.2732 will suggest that lengthier consolidation of uptrend is underway, then pullback toward the uptrend line from 1.1876 to 1.2150 is expected.

For long term analysis, EURUSD formed a cycle bottom at 1.1876 level on weekly chart. Bounce towards 1.4000 is expected in next several months.

Weekly Forex Forecast

The Number One Reason You Should Learn How to Short

By Justice Litle, Editorial Director, Taipan Publishing Group

There are many good reasons to learn how to go short. One of the best ones is maintaining objectivity.

The vast majority of investors will never short a stock (or an index, a commodity or a currency for that matter). A modest contingent will experiment with options and inverse ETFs. But very few will ever take the time and effort to truly explore the “dark side” of financial markets.

That’s a shame, because the dark side has much to recommend it. Not from a perma-bear standpoint, mind you, but an opportunistic one.

From your humble editor’s point of view, the best stance is a flexible stance. Or perhaps think of it like tennis. The ability to go long is like having a good forehand; the ability to go short is like having a good backhand. Can you imagine a tennis player with no backhand? He would be vulnerable in half the positions on the court.

Having the ability to go long or short expands your horizons greatly. It increases the number of opportunities you can take advantage of, which in turn increases your odds of long-run success.

Comparing the Risks

“But shorting [stocks] can be incredibly tough,” some will argue. As if long-side investing is all that much different?

“When you go short your potential risk is unlimited,” the conventional wisdom warns. What an asinine statement! (Technically true, but still asinine. Technically the sun might not come up tomorrow.)

Imagine that XYZ is a dog of a stock with poor earnings quality, a richly valued multiple, a bearish chart, and heavy insider selling – in other words, an ideal short candidate. Is it likely to imagine a stock like this tripling in less than a week? In this age of accounting shenanigans, a sudden drop to zero seems far more probable. Yet nobody goes around saying, “Long-side investing is dangerous because the stock could be a zero.”

And who are these hypothetical people trading without risk points? If I go short at $50 with a risk point at $55 in case I’m wrong, why would it matter if the stock goes to $200? I cut my losses back at $55, remember?

Short-side players are usually very diligent in their use of risk points: “If the position goes against me by X, I am out.” Long side investors, ironically, are much more willing to ride a stock into the dirt.

Yet the short side is consistently portrayed as more risky? Ironic, that.

If I Had a Hammer

There are times when making money on the bearish side of the market is like shooting fish in a barrel. At other times, one will hardly wish to be short stocks at all.

It’s just the same as the long side: Sometimes the money comes flying in through the window. Other times the window is nailed shut. A key task, then, is getting a handle on what type of market environment one is in.

The trouble with only going long is encapsulated in that old saying: “To a man with a hammer, everything looks like a nail.” If bullishness is the auto-default option, then everything looks like a reason to buy.

Learning to go short adds another tool to the toolbox. That doesn’t mean one has to be bearish all the time. It merely enables the option of taking a proactive bearish stance when market conditions call for it.

(Want more investment advice like this? Sign up for Taipan Daily to receive my investment commentary.)

Maintaining Objectivity

And so now we get round to the top reason for learning how to go short: It helps you maintain objectivity. If you can go both ways with ease, you will be less susceptible to unchecked emotions, confirmation bias or wishful thinking.

A low-to-no-growth economic environment – one that will likely be with us for years – means increased volatility as the average investor struggles. It also means stock valuations can be compressed for months, quarters, or even years at a time.

The way to deal with this is by assessing general conditions. When price to earnings multiples are expanding like an accordion – thus creating visible strength that shows up on the charts – it makes sense to participate in the bullish upside of the market. But when P/E multiples are contracting as investor capital flees – again showing up via bearish primary trends – it make mores sense to “go with the flow,” focusing on potential short candidates setting up for decline.

Publisher’s Note: If you want to learn more investment strategies like this, be sure to join us at the Taipan Publishing Group Global Opportunities Summit. Justice will be joining a distinguished team of global financial experts, including all of the Taipan editors and analysts, to show you how you can arm yourself with today’s most sophisticated wealth-protecting and wealth-building “weapons.” You’ll find out how to emerge victorious… instead of becoming the next casualty. And you’ll have a great time doing it.

The summit is September 23-25 at the luxurious Venetian hotel on the Las Vegas Strip, and we’re extending a special invitation just to you. But please hurry. Space is extremely limited… and spots are already filling up fast. Learn all the details here.

Don’t forget to follow us on Facebook and Twitter for the latest in financial market news, investment commentary and exclusive special promotions.

About the Author:

Justice Litle is the Editorial Director of Taipan Publishing Group, Editor of Justice Litle’s Macro Trader and Managing Editor to the free investing and trading e-letter Taipan Daily. Justice began his career by pursuing a Ph.D. in literature and philosophy at Oxford University in England, and continued his education at Pulacki University in Olomouc, Czech Republic, and Macquarie University in Sydney, Australia.

By Adam Hewison – The battle between the bulls and the bears continues in the
S&P 500 with neither side able to gain the upper hand. This
choppy trading action will eventually lead to a large move
one way or the other. The bulls are betting that we are
headed higher and the bears are betting that the economy is
going to tank.

In my latest video, I share with you some of the key technical
points that are still in play and where the market needs to go
in order to break out of the current logjam that it’s in.

As always our videos are free to watch and there is no need
for registration.

Please let us know your thoughts.

Watch the Video Now…

All the best,
Adam Hewison
President of INO.com
Co-founder of MarketClub

By Russell Glaser – It looks like markets are gearing up for a move higher. Most risky assets jumped yesterday despite negative news. The S&P 500 is testing the big round number of 1100, the EUR/USD is approaching a key Fibonacci retracement level, and crude oil is pushing towards the $80 level. Today’s stress tests release is the key event. Wisdom says that it’s not how what the news says; it’s how the market reacts to the news.

Financial markets the past two weeks have been choppy, with risk going on and off again. Much of the movements have been tied to recent economic data releases. Yesterday’s economic data was mixed across the board, divided between the two continents. European industrial orders and British retail sales were stronger, along with U.S. housing data and strong earnings from U.S. corporations which helped to increase trader’s risk appetite. But higher U.S. weekly employment claims, and a warning from Ben Bernanke on the U.S. economy, countered this positive attitude.

But yesterday’s trading struck a chord: despite the negative outlook for the U.S., risky assets were trading higher. This shows a convergence and a red flag; when risky assets rise in spite of negative news, a shift is occurring in the markets.

Despite the uncertain outlook the Fed has regarding the U.S. economy, the S&P 500 was up 2.25% yesterday. The index made a close above the recent downward sloping trend line, indicating a potential reversal of the bearish trend to a bullish trend. Now the index has the big round number of 1100 in its sights.

Forex Market Analysis provided by Forex Yard.

© 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.

Source: ForexYard

The Euro managed to erase most of its weekly losses against the Dollar yesterday, as investors expect bank test results to show that the Euro-Zone’s condition is stabile. The market waits to hear that the Euro-Zone’s debt crisis is not a threat to the region’s stability. Will the Euro strengthen following the test results?

Economic News

USD – Bernanke’s Testimony to Weaken the Dollar

The Dollar slid against most of the major currencies during yesterday’s trading. The Dollar lost about 180 pips against the Euro today as the EUR/USD reached above the 1.2900 level once again. The Dollar also saw a 150 pips drop against the Pound.

The Dollar’s bearish trend came as a result of Fed’s Chairman Bernanke’s testimony before the House Financial Services Committee. Bernanke stated that there is an unusually uncertain outlook for growth, yet he added that the Fed’s near zero interest rates are already very simulative. He also added that if the recovery seems to be faltering, the Fed will consider different alternatives, such as lowering borrowing costs. It seems that investors expected the Fed Chairman to have a more proactive approach, as several economic data that were published during the last month have shown that the U.S. economic recovery isn’t progressing as well as expected.

In addition, while Bernanke has delivered his speech, the Department of Labor has released the weekly Unemployment Claims data. The report showed that jobless claims in the U.S. have increased by 37,000 to 464,000, beating expectations for merely 449,000 claims. The combination of Bernanke’s speech along with the poor employment data has weakened the Dollar against most of its major counterparts.

As for today, traders are advised to follow U.S. equity markets as they have a large correlation with Dollar’s trading. Traders should also follow the European Bank Stress Test Results, which will be released tomorrow. The results might have a significant impact on thee major currencies, and traders should be prepared.

EUR – The Euro Soars Following Positive Economic Data from the Euro-Zone

The Euro strengthened against all the major currencies during yesterday’s trading session. The Euro gained about 180 pips against the Dollar, about 100 pips vs. the Pound, and about 250 pips against the Yen.

The Euro’s strengthened against its major rivals as several positive economic reports were published. The German Flash Manufacturing Purchasing Managers’ Index rose to 61.2 in July, from 58.4 on June. It is a survey of about 600 purchasing managers, who are asked to rate their level of business conditions. In addition, the European Industrial New Orders rose by 3.8% during May, beating expectations for a 0.1% drop. The report also showed that compared to the same month last year, industrial sales rose by 22.7%. The Euro-Zone’s economic condition is considered to be somewhat fragile due to the high debts of several European nations. As a result, the batch of positive data has a significant affect on the Euro. Investors are looking for reasons to believe that the Euro-Zone is recovering and such positive reports are all they can ask for.

Looking ahead to today, many interesting publications are expected from the Euro-Zone. First of all will be the German Business Climate report. This is a survey of about 7,000 businesses, who are asked to rate their current business conditions and expectations for the next 6 months. The survey is expected to remain at its high level above 101. In addition, the Euro-Zone’s Bank Stress Test Results are due today. The results are expected to reveal the European banks’ stability, and whether the capital reserves are sufficient. Positive report will further support the Euro, however if the results won’t be as satisfying as expected, the Euro might erase yesterday’s profits.

JPY – Yen Drops On All Fronts

The Yen fell against mot of its major rivals during yesterday’s trading session. The Yen dropped about 100 pips against the Dollar, and about 250 pips against the Euro. The Yen also slid 200 pips against the British Pound.

The Yen tumbled yesterday on speculations that the Japanese leadership is looking to weaken the national currency in order to stimulus economic growth. The Japanese press is reporting that the government will pressure the Bank of Japan to take more steps to support the economy. The Japanese economy relies greatly on its exporting, and a weaker Yen will support Japanese exporters. In addition, the current instability in Japanese politics is damaging the Yen’s safe-haven image, and as a result the currency seems less appealing in times of uncertainty.

As for today, traders are advised to follow the major publications from the U.S. and the Euro-Zone, as they tend to have a large impact on the Yen. Special attention should be given to the Euro-Zone’s Bank Stress Test Results, which appears to be the news even which will have the largest affect ion the market today.

Crude Oil – Crude Oil Reached Above $79 a Barrel

Crude oil rose over $79 a barrel for the first time in nearly 11 weeks. Crude oil began yesterday’s trading session around $76.40 a barrel, and gained about 300 pips in a single day, to peak at the $79.40 price.

Crude oil rallied yesterday following notifications that EBay Inc. and Caterpillar Inc. saw higher earnings than expected during the last quarter. In addition, several positive economic reports were published from the Euro-Zone yesterday, suggesting that energy demand in Europe will recover soon. Another support for crude oil prices was the Dollar’s bearish trend against most of the major currencies. Crude oil is traded in Dollars, and thus when the greenback weakens, oil prices tend to rise as a result.

As for today, traders are advised to follow equity markets in the U.S. as they tend to be highly correlated with crude oil trading. In addition, traders should take notice of the Euro-Zone’s Bank Stress Test Results. The results are expected to reveal the region’s banks stability in light of the high debts of several European nations. This report might impact global trading, and traders should be prepared.

Technical News

EUR/USD

The pair has recorded much bullish behavior yesterday. However, the technical data indicates that this trend may reverse anytime soon. For example, the 4-hour chart’s Stochastic Slow signals that a bearish reversal is imminent. . Going short with tight stops might be a wise choice.

GBP/USD

The daily chart is showing mixed signals with its RSI fluctuating at the neutral territory. However, there is a bearish cross forming on the 4-hour chart’s Slow Stochastic indicating a bearish correction might take place in the nearest future. When the downward breach occurs, going short with tight stops appears to be preferable strategy.

USD/JPY

The pair has been range-trading for a while now, with no specific direction. The Daily chart’s Slow Stochastic providing us with mixed signals. All oscillators on the 4 hour chart do not provide a clear direction as well. Waiting for a clearer sign on the hourlies might be a good strategy today.

USD/CHF

The cross has been dropping for the past several days now, as it now stands at the 1.0430 level. However, the 4-hour Chart’s RSI is already floating in the oversold territory indicating that a bullish correction might take place in the nearest future. Going long with tight stops may turn out to be the right choice today.

The Wild Card

Crude Oil

Crude Oil prices rose significantly yesterday and peaked at $79.20 per barrel. However, there is a bearish cross on the 4-hour chart’s Slow Stochastic suggesting that a recent upwards trend is loosing steam and a bearish correction is impending. This might be a good opportunity for forex traders to enter the trend at a very early stage.

Forex Market Analysis provided by Forex Yard.

© 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.

By eToro – Stronger than expected EMU PMI lead the Euro higher against the dollar, retaking the 1.29 briefly before settling at 1.2890. The Euro is likely to continue to grind higher retesting the 1.3000 level.

Click here to read the full daily Review

Forex Market Analysis provided by eToro

Disclaimer: Trading in the Foreign Exchange market might carry potential rewards, but also potential risks. You must be aware of the risks and are willing to accept them in order to trade in the foreign exchange market. Don’t trade with money you can’t afford to lose.

Video: The Real-Time Power of Elliott Wave Analysis

Mainstream financial analysts always look for ways to explain market action through news stories and events. Conventional wisdom states that news and inter-market correlations cause market booms and busts, but such explanations rely on selective presentation of the data. In this video, Elliott Wave International’s Asian-Pacific Financial Forecast Editor Mark Galasiewski shows you how Elliott wave analysis was able to predict Hong Kong’s late ’90s mania and its aftermath in real time — without looking at the news or the market’s “fundamentals.”

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About the Publisher, Elliott Wave International
Founded in 1979 by Robert R. Prechter Jr., Elliott Wave International (EWI) is the world’s largest market forecasting firm. Its staff of full-time analysts provides 24-hour-a-day market analysis to institutional and private investors around the world.