Forex Automoney

In what some might see as an “early Christmas gift”, jobless claims fell more than expected to 452,000, beating analyst expectations of 470,000.  This is a positive sign that the US economy is recovering…. but it’s not out of the woods yet.  In any event, the news bolsters the economic trends that we’ve seen recently in the markets.

So as we move into year end, I want to extend warm holiday wishes to all of our subscribers and wish you health and happiness during the holiday season!

I’m also going to take this opportunity to tell you about some of the exciting things we’re going to be doing in the new year!

Starting next year, we will be introducing new Expert Advisors (EA) for our members.  For those of you who are not familiar with Expert Advisors, they are basically automated trading systems that allow you to take advantage of opportunities in the forex market.  These have been developed for us by some of the top trading minds in the business, so be on the lookout for their arrival!

Also, I have a series of interviews lined up with some of the leading experts in the forex market who are going to be sharing their unique insights and views with us!

And lastly, we will be announcing our “end of the year” blowout promotion next week as a thank you to all of our subscribers!  If you’re not registered for the blog yet, you can do so now by entering your email address at the top right corner of the website.

As we move closer to the New Year,  it is now more important than ever to understand the forex market as the global economy moves forward.   Those who take the time to learn about this market will be better positioned to take advantage of the numerous opportunities that present themselves daily.

So make a New Year’s resolution to yourself to learn about the currency market!

Happy Holidays to all!

Tags: blog, currenc, currency, currency market, economic, economy, forex, forex market, holiday, Il, mike conlon, news, time, trading, trend

written by admin

British policy makers voted unanimously to keep their quantitative easing plans in place, signaling that the UK economy may not be rebounding as fast as they would like.  This could lead to a longer period of low interest rates as the UK attempts to fight off deflation.  As a result, the British pound (GBP) is near a two-month low against the US dollar (USD), trading just under 1.60 at 1.594.

In the meantime, it appears as though traders may have left early for the holidays as volume seems light.  The US dollar is taking a brief pause today, down against every currency but GBP.   This comes on the heels of the 5.1% rally the dollar has been on since year end.  So this is a welcome pause.

Also, the US dollar has been on a tear against the Japanese yen (JPY) as the rising yields in the US are discouraging US dollar carry trades in favor of yen carries.

Let’s take a look at the yearly chart of (USD/JPY): (click chart to enlarge)

As you can see, this pair has bounced off its low near 85 and has been on a steady climb higher.  I identified this move at the beginning of the month in this article from Dec. 2nd.  What I wanted to show in today’s chart was how you can use Fibonacci retracement levels to see where to get in and out of trades.

Today’s pause occurs right at the 38.2% retracement level.  If you were looking to scale out of the position or sell some this could be a good place to do so.  At these levels there will typically be pockets of resistance.  If the trend continues higher, then we expect to reach the next level at 50% at a price of 93.68.  Should the pair pull back, then we would expect to see some support at 89.8, the 23.6% level.

So as you can see, knowing where these Fib levels are can really impact your trading, helping to show you where “hidden” support and resistance may be.  This is important because it can help you know where to place your stop and limit orders which will help you manage your trades.

I expect that we’ll see continued dollar strength through year-end and into the new year, so I’m going to be buying on pull backs of this pair.

To learn more about how Fibonacci levels and other tools of technical analysis can help your trading, be sure to check out our currency trading courses!

Tags: blog, course, currenc, currency, currency trading, dollar, dow, economy, forex, forextrading, fx, fxedu, gbp, Il, interest, interest rate, interest rates, Japan, jpy, market, Mike Conlon, pair, technical, time, trade, trader, trades, trend, USD, Yen

written by admin

Historically, the month of December has been the best performing month for stocks.  Much of this can be attributed to “window-dressing”, the practice of fund mangers pushing up stock prices to make their portfolio performance look better for year end.  This is where the nickname “Santa Claus Rally” comes from; that the cheery rotund man in red is bringing you a Christmas gift in the form of higher returns!

Today marks the highest level for the equity markets in all of 2009– despite the earlier downward revisions to GDP that we mentioned earlier.  Also to note that gold and oil are down, and the US dollar (USD)is seeing some strength against all major currencies except the Canadian dollar (CAD) which is showing strength over the last three days due to improved economic conditions and the possibility of near-term rate hikes.

I often mention the correlations between the different markets so its important to note where other markets are trading with regard to the forex market.  Again we are seeing a dollar up, stock market up scenario that is a continuation of the condition that I spoke about yesterday– that the anti-dollar sentiment may be fading from the markets.

So in any event, be wary of the “rosy” picture of the markets that is being painted for you going into year-end.  While its OK to attend the party, be wary of the hangover that inevitably occurs once the New Year comes around.

Do you have an interest in the forex market?  If not– you should!  Check out a free, real-time practice account to see what all the excitement is about by clicking here!

Do you have an interest in forex but are afraid to get started because you don’t where to begin?  Check out our courses to learn how to get started!

Tags: account, cad, course, currenc, currencies, dollar, dow, economic, forex, forex market, free, fx, fxedu, gold, Il, interest, Mike Conlon, oil, practice, practice account, rate, sentiment, ssi, stock, stocks, time, trading, USD

written by admin

Revisions in the GDP reports of both the US and the UK are the “news” of the day.  In the UK, it was reported that 3rd quarter GDP contracted at .2% vs .3%, but missing analyst expectations of .1%.  This means that their economy had contracted less then previously thought.  As a result, the British pound (GBP) fell against the US dollar, falling briefly below the 1.60 mark for the first time in the last 3 months.  Also, there was a UK report that the housing market will not rebound as quickly as had been hoped.

Meanwhile in the US, 3rd quarter GDP was revised down to a gain of 2.2% from the previously reported 2.8%.  Meaning the US economy did not grow as rapidly as we had been led to believe.

So what is the takeaway from all of this?

1) That advanced GDP figures are not to be taken as “law” as they are rarely on target.

2)  That these revisions appear to be non-events as the currencies of each respective country haven’t moved much as a result.

So why do these revisions occur?  Well, not to be a conspiracy theorist, but governments have the ability to be the biggest “manipulators” out there.  Between putting forth bogus numbers, revisions, and data manipulations, a government can and often will interfere with their currency.

So should this be seen as a bad thing?  Actually not, it should be viewed as a good thing!  As long as you know which side of the trade to be on!  There’s an old investing adage out there that says, “Don’t fight the Fed”.  Truer words could not be spoken in regards to the forex market.

When a government body attempts to manipulate a currency, it is best to ask yourself what it is that they are trying to accomplish?  One of the first questions you should ask is “Cui bono” or “who benefits”.  This is one of the most basic investigating techniques to attempting to figure out what may happen in  the future.  And let’s face it– we’re all junior Private Investigators when it comes to trying to figure out what’s going to happen next.

So when you see data come out or numbers that are revised, take them at face value but with a grain of salt.   But then ask yourself what is the end goal.  This will help your trades become more clear to you, and hopefully get you onto the “right”side of the trade more often than not.

To learn more about how to read economic figures and how they apply to a currency, be sure to check out our currency trading courses!

Tags: British, course, currenc, currencies, currency, currency trading, data, dollar, dow, economic, economy, fed, forex, forex market, fx, fxedu, gbp, housing market, Il, invest, IRA, Mike Conlon, news, pound, ssi, technique, time, trade, trades

written by admin

I’ve written a lot about about the “tale of two trades” and how anti-dollar sentiment has been driving both the stock and commodities markets, but it appears as though this may be changing.  Both the stock market and the US dollar Index are on pace to finish the last two months in positive territory, the first time this has happened since before the financial crisis of 2008.

This is due in part to the risk taking/ risk aversion correlation trades that have been taking place since that time.  So it used to be US dollar (USD) down, everything else up; or dollar up everything else down.  But this correlation seems to be unraveling, and today is a perfect example of this.

The stock market and oil are trading higher today, as is the US dollar index.  Gold is lower today.

So what is all of this telling us?  Its telling us that we can have an economic environment where both stocks and the dollar can go up in tandem.  Since the aggressive measures the Fed took to stave off the Great Depression 2.0, companies have had an opportunity to get back into decent financial shape and now are able to produce “real” earnings if the economy is growing.

There is a good possibility that the Fed will raise interest rates some time next year, but I see this as more of a problem for gold and the housing market.  Because the stock market has not been trading based on the fundamentals, I don’t expect to see a major sell-off if the Fed begins to raise rates.  Part of this is because the rates right now are absurdly low, so even a few hikes would bring them back to historically “normal” levels.  The other part is that if rates need to move higher, that means that we are growing the economy, which is the goal.

This Wednesday, the consumer confidence survey will come out which will be a good gauge of where people think the economy is.  That’s the only real news for the US market in this shortened, holiday week.

We’re also going to be getting both the UK and New Zealand’s GDP figures.  If these numbers come in less than expected, then we should see dollar strength on the flight to safety trade.

Also remember that volume is usually decreased during the holidays so we can see some increased volatility.

To learn more about how to take advantage of potential US dollar strength, be sure to check out our forex trading courses! 

Tags: commodities, course, dollar, dow, economic, economy, fed, forex, forex trading, fundamental, Il, index, interest, interest rate, interest rates, lot, lower, market, mike conlon, news, oil, short, ssi, stock, stocks, time, trade, trades, USD

written by admin \\ tags: Aggressive Measures, Commodities, Confidence Survey, Consumer Confidence, Correlation, Earnings, Economic Environment, Financial Crisis, Financial Shape, Gauge, Great Depression, Housing Market, Interest Rates, Last Two Months, Real News, Risk Aversion, Sentiment, Stock Market, Tandem, Us Dollar Index

Bill Gross, whom you’ve probably seen on CNBC or the like of PIMCO is known on the street as the “bond king“.  He is undoubtedly one of the most astute bond investors on the planet.  So you could consider him the EF Hutton of bond investing– when he talks, people listen”!

So I’m a little surprised that when it was reported that he increased his dollar holdings to its highest levels since the pre-Lehman Bros collapse last year, it wasn’t deemed more news-worthy.   This is significant because what this tells the market is that Gross is anticipating an increase in interest rates, as he moves out of bond holdings and into cash.

Remember that when bond yields go up, prices go down.  I have hinted around about the different reasons why the US dollar can strengthen this year without Fed rate increases.  Should the Fed move rates sooner than later then that could be the dollar “double whammy”!

However, to take advantage of potential dollar strength, you need to take action in the forex market to realize gains.

If you are unfamiliar with forex trading, make this a New Years resolution to remember.  Check out currency trading courses and find out why the forex market is the fastest growing market in the world.

Tags: bill gross, course, currenc, currency, currency trading, dollar, dow, fed, forex, forex market, fx, fxedu, Il, interest, interest rates, invest, investor, Mike Conlon, news, nfa, rate

written by admin \\ tags: Bill Gross, Bond Holdings, Bond Investors, Bond Yields, Cnbc, Collapse, Currency Trading, Different Reasons, Dollar Strength, Double Whammy, Ef Hutton, Fed Move, Fed Rate Increases, Forex Market, Interest Interest, Interest Rates, Lehman Bros, Mike Conlon, New Years Resolution, Nfa

The Japanese Central voted to keep their interest rate at .1%, attempting to encourage economic recovery.  Japan has been battling deflation for MANY years, but it has picked up recently as the most recent CPI (consumer price index) declined 2.2% in October, marking the eighth straight month of declines.

The also issued a statement that they do not “tolerate” deflation, but issued no plans as to what they actually intend to do about it.  Mostly hollow words if you ask me.

So this morning we’re seeing some Yen (JPY) weakness, as its down across the board, most notable against the Canadian dollar (CAD) at -1.07%.  CAD is strong due to a rebound in oil prices which is trading above 74.

Also, I’m seeing a bit of British pound (GBP) strength this AM as UK mortgage approvals rose.  This means the banks are starting to lend more and hopefully that will help stabilize their housing market.

Euro is a mixed bag this AM, trading flat against USD so far.  News out of Greece is that they are going to reform their notoriously lax tax policy to try to raise revenue to get their debt under control.   In Germany, Business confidence reached its highest levels since July 2008.

The Swiss franc (CHF) has advanced past 1.50 Euro, as the Swiss National Bank (SNB) allowed the currency to appreciate.  Back in March, the bank intervened in its currency to keep it from appreciating and undermining economic recovery.

Lastly, today is “quadruple witching“– where both futures and options positions expire.  So this could lead to some volatility today… though I suspect it won’t be bad as traders have been paring back positions for the holidays and year end.

none

written by admin \\ tags: British Pound, Business Confidence, Canadian Dollar, Chf, Consumer Price Index, Cpi, Declines, Deflation, Economic Recovery, Futures And Options, Germany Business, Housing Market, Mortgage Approvals, Oil Prices, Options Positions, Rebound, Swiss Franc, Swiss National Bank, Uk Mortgage, Volatility

Overnight, world stock markets sold off as once again as Greece had their debt downgraded by S&P.  As a result, EUR/USD is down 1.27% as mounting fears of debt default or a material change in the composition of the Euro is putting pressure on the region.  The Euro is near a 3-month low at 1.435.

Also, UK retail sales “unexpectedly” fell in November.  This has sent the British pound to a 2-month low vs. the US dollar.  As of 9AM EST, GBP/USD is -1.44% to 1.61.

As I mentioned yesterday,  the Fed really doesn’t need to do anything about interest rates to see dollar strength.  As long as there are potential economic problems somewhere in the world, the flight to safety trade will cause investors to return to the US dollar.  The forces of supply and demand then take over and the dollar rises as demand goes up.

In addition, the Aussie is also down 1.56% vs. USD, again high-lighting  the risk aversion trade.  And even though I’m in love with the Aussie and want to move there because of the way they run their economy LOL, I am a trader at heart and I do what the market tells me– rather than what I think should happen.

So, if the problems in the Euro zone aren’t dealt with soon, we will continue to see US dollar strength.  This means no Aussie trades for me, even though I’d love to have the carry interest.

One last thing I want to mention.  A lot of investors ask me, ” well if the dollar strengthens, isn’t that good for me?  I hold US dollars in my bank account.”

Well, the answer is two-fold.

1) yes it can be helpful as it increases your purchasing power for foreign goods and services.  But it does nothing to help you domestic purchasing power– unless of course merchants pass those savings along to the consumer, (which they won’t do unless they have to).

2) You won’t actually see monetary gains unless you trade dollars against other currencies.  This involves the forex market.  Many investors are afraid of this market and they shouldn’t be– as there are tremendous gains to be made.

To learn more about how you can get involved with this market, please check out our currency trading courses!

none

written by admin \\ tags: Amp, Aussie, British Pound, Composition, Currencies, Debt Default, Dollar Strength, Economic Problems, Euro Zone, Fears, Forex Market, Gbp Usd, Interest Rates, Material Change, Monetary Gains, Purchasing Power, Risk Aversion, Supply And Demand, Uk Retail Sales, World Stock Markets

As I mentioned, things can get dicey around the Fed rate decision.  Today is no different.  Here is a 5-minute chart of EUR/USD:

Looks like the US dollar is strengthening against the Euro even though the Fed is keeping policy “unchanged”.  Right now this pair is hovering around 1.451.  It will be interesting to see if it can hold 1.45, an area of psychological support.  If that level is breached, the next stop could be at 1.438.  Stay tuned!

To follow these developments in real-time, click here for a free practice trading account!

none

written by admin \\ tags: Fed Rate, Psychological Support, Real Time, Volatility

The Fed decision on interest rates is due out at 2:15 EST today.  The minutes leading up to and surrounding the decision are usually volatile and currency spreads can widen if there’s uncertainty.  So if you do trade around that time, be cautious!

Now no one is expecting the Fed to raise interest rates, but all ears will be on the semantics of the meeting, that is, will they change their language.  The Fed’s dovish stance on rates has persisted as the US dollar has fallen against almost all major currencies this year.

The zero-interest rate policy (ZIRP) that they have adopted has been in effect for just over 1 year.  Will they tip their hand or provide statements of a more hawkish nature?  The PPI numbers came out yesterday and showed a larger than expected degree of inflation, which some see as a sign that Bernanke et al will have to raise rates sooner than later.

In the meantime, the US dollar has picked up some short-term support and has been gaining ground against other currencies, particularly the Euro.  But will that mark a trend reversal?  Or is it just a brief pause?

As of late, the currency market correlations that we speak of often have started to break down.  There are now actually days where both the dollar and the stock market can both be in positive territory.  This tells me that we may be seeing a shift in the market response to risk-taking and that a rate hike may not be absolutely necessary for the US dollar to strengthen.

Remember, the forex market is a comparison market; that is, as a currency you don’t have to be the best, just be better than the rest!

So let’s see what Bernanke does today, but my feeling is it won’t be much.  Weakness coming out of the Euro Zone in addition to Australia’s may be enough to see the dollar strengthen.  Should he take a more hawkish stance, then expect the dollar to take off!

I’ll be following this event live and will hopefully have some charts to see what, if anything, takes place.

And of course you can follow this event on your own, by signing up for a free, live practice account here!

none

written by admin \\ tags: All Ears, Australia, Better Than The Rest, Correlations, Currencies, Currency Market, Dovish, Euro Zone, Forex Market, Inflation, Interest Rate Policy, Interest Rates, Market Response, Ppi Numbers, Rate Hike, Semantics, Stock Market, Trend Reversal, Uncertainty, Zero Interest