Timing & trends
Todd Market Forecast for Wednesday December 11, 2013
Available Mon- Friday after 6:00 P.M. Eastern, 3:00 Pacific.
DOW – 130 on 2050 net declines
NASDAQ COMP – 57 on 1350 net declines
SHORT TERM TREND Bullish
INTERMEDIATE TERM TREND Bullish
STOCKS: If it weren’t for the strong seasonal period, I would be very unhappy about the market action. Investors got all giddy about the mediocre employment report on Friday and pushed the Dow up 200.
All of this has now been given back and breadth has given even more back. There seems to be increasing concern about a taper announcement next Wednesday from the Fed.
There may be short term help on the way. Check out the chart.
GOLD: Gold gave back $9.
CHART
: The Composite Gauge registered a 15 on Wednesday (arrow). When this happens, there tends to be at least short term strength.
TORONTO EXCHANGE: Toronto lost a hefty 191.
S&P\TSX Venture Comp: The Venture Comp was down by 7.
BONDS: Bonds lost ground.
THE REST: The dollar moved to another low. Silver and crude oil were down. Copper managed a rally.
BOTTOM LINE:
Our intermediate term systems are on a buy signal.
System 7 We are long the SSO from 97.92. If there are more declines than advances on Thursday at 3:45 Eastern, sell at the close.
System 8 We are in cash. Stay there on Thursday.
NEWS AND FUNDAMENTALS:
There were no important news releases on Wednesday. On Thursday we get jobless claims and retail sales.
We’re on a sell for bonds as of November 20.
We’re on a sell for the dollar and a buy for the euro as of November 13.
We’re moving back to a buy for gold as of today December 10.
We’re moving back to a buy for silver as of today December 10.
We’re on a buy for crude oil as of December 6.
We’re on a buy for copper as of November 21.
We’re on a sell for the Toronto Stock Exchange as of December 5.
We are on a sell for the S&P\TSX Venture Comp. as of November 20.
We are long term bullish for all major world markets, including those of the U.S., Britain, Canada, Germany, France and Japan.
INDICATOR PARAMETERS
Monetary conditions (+2 means the Fed is actively dropping rates; +1 means a bias toward easing. 0 means neutral, -1 means a bias toward tightening, -2 means actively raising rates). RSI (30 or below is oversold, 80 or above is overbought). McClellan Oscillator ( minus 100 is oversold. Plus 100 is overbought). Composite Gauge (5 or below is negative, 13 or above is positive). Composite Gauge five day m.a. (8.0 or below is overbought. 13.0 or above is oversold). CBOE Put Call Ratio ( Below .80 is a negative. Above 1.00 is a positive). Volatility Index, VIX (low teens bearish, high twenties bullish), VIX % single day change. + 5 or greater bullish. -5 or less, bearish. VIX % change 5 day m.a. +3.0 or above bullish, -3.0 or below, bearish. Advances minus declines three day m.a.( +500 is bearish. – 500 is bullish). Supply Demand 5 day m.a. (.45 or below is a positive. .80 or above is a negative).
No guarantees are made. Traders can and do lose money. The publisher may take positions in recommended securities.
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“The Bank of Montreal says it is raising its fixed and variable home mortgage rates by 0.1 percentage points, effective Tuesday.” (CBC News) They are looking at the risingbond yields and besides they have not raised rates for the last 4 months (poor diddums) even though the Canadian Bank rate has not been raised for the last 39 months AND the CPI has plunged to 0.7%/yr.
It is not inflation that is a concern; risk is the concern even thoughmost mortgages are insured against default thanks to you dear taxpayer via CMHC. Your taxpaying largess has resulted in your housing cost doubling in the last decade. You have financed the greatest bubble on earth and you have subsidized the Banks via government social welfare for profit seeking global corporations who want to keep their shareholders happy.
Is it time to freak? Probably not, but it’s always a good time to plan. When the spread between the BoC and the 5 year retail mortgage rate widened from April 2007 to Dec 2008, the TSX Real Estate Index rolled over and plunged into the pit of gloom.
Before you sign up for that big mortgage, make sure your household income does not have a shorter amortization than the loan. See myAffordability Page and do an analysis of your real estate holdings to see if they can handle more expense and less income. (Yield Calculator)
RISING RATES MEAN
- The cost of everything financed goes up in the private sector as well as at the provincial and municipal level.
- Unless private and government sector earnings increase, then real incomes continue eroding and less spending occurs on other stuff outside the cost of shelter.
- Less spending means less productive activity which for a global corporation is no big deal, they can move production to low wage, blind oversight environments or they can simply increase their yield on demand with or without government sanction.
Ed Note: More from Canadian Housing Price Chart:
Euro Deflation
Negative Interest Rates?
This chart mashup shows the Euro Zone experiencing sudden price deflation since 2012 along with negative momentum in loan creation to the non-financial sector. Business, Industry AND Labour have no pricing power and as a result, balance sheet repair (reducing debt, increasing assets) is de rigueur in Euroland.
….read more HERE
(Reuters) – Household net worth hit a record high in the third quarter as home prices marched up and the value of stocks and mutual funds surged, a hopeful sign for the economic recovery.
The Federal Reserve said on Monday household wealth increased $1.9 trillion to $77.3 trillion in the third quarter, the highest level since records started in 1945. It was the ninth straight quarter of increases.
Though the surge in net worth was encouraging, economists cautioned against reading too much into the rise as it would have benefited only the portion of the population with access to equities and those who owned homes.
“From a consumption perspective, it is actually going to be limited to folks who hold equities that are feeling the biggest share of the increase in net worth,” said Jacob Oubina, senior economist at RBC Capital Markets in New York. “Americans still have a long way to go to get to full financial health.”
In my last post I talked about how my trading evolved over time and how I ended up being a full time “quant geek” running and trading my own automated trading system. This section I talk about why you nneed to be removed from the equation for maximum success.
Simple automatic investing that actually makes money is something almost everyone wants. And it is the reason algorithmic trading systems are becoming more popular and more services are making it easier for individuals to build their own simple automatic trading systems.
In Part I and Part II of this series about how I got started in systems trading and how I built a simple automatic trading system for trading my own capital and to eventually share it with fellow traders we have covered several topics. Understanding how and why a system is trading is important for its users as it provides comfort in knowing the system complies with your line of thinking and market logic.
Through my simple automatic trading system and order execution you can free yourself from the painful grind of staring at a computer screen and struggling with yourself to follow your rules and execute trades according to plan. Do not get me wrong, the creator of the automatic trading system must always be monitoring things, maintain and updating the code when required. But users using the simple automatic trading strategy provided by a firm can simply setup their trading account, link it with the automated trading system and walk away without ever having to learn or do anything else.
How My Simple Automatic Trading System Works
Keeping things short and to the point, my system is based around the S&P 500 index. You can opt to trade either the 3x leveraged ETFs (UPRO & SPXU) or trade the original automated trading strategy using the ES mini futures contract.
Both trade virtually the same but can vary at times. Because ETF’s have the tendency to fluctuate a little more than the underlying index it can lead to an extra trade or missed opportunity from time to time. The real difference is in the performance. The ETF’s use 3x leverage while the futures contract uses 10x leverage. You definitely get a better bang for your buck with futures.
Why Automatic Trading and Why Trade the S&P 500 Index?
Automatic trading may sound risky and crazy and it can be depending on how active the system is, the creator, the programmers experience and what platform the system is run on (server, charting program etc..) but in reality it’s just a set of trading rules which you create, test, approve and trade via computer.
If you have common sense, a solid logical strategy, and a top notch programmer you should eventually be able to create your own profitable automatic investing system. Also if you trade more than one investment then you know how easy it is miss a trade because you were watching another chart or responding to emails or living life… Well automated trading systems make it so you do not miss another trade again.
The S&P 500 index I think carries the least amount of volatility and is diversified with the top 500 global corporations. Also it is the most liquid investing vehicle available for the stock market which keeps slippage to a minimum for optimum order fills.
Simple Automatic Trading – It Takes Money to Make Money – Ante Up!
We all know the saying “It Takes Money To Make Money” and it could not be more true. Unfortunately most traders fall victim to all the false advertising in this industry thinking they can make $87,523 in one trade with only $5,000 etc…
There are several things an individual must have in place to make money in the market and a properly funded trading account with enough money to manage positions is one of the most important things needed. But again most people are trading with accounts of $500 – $10,000 in size which is not enough to make any real money. Sure it’s fun trading and dabble with a little money, but do not expect make much.
The financial markets are a numbers game in almost every way, shape and form. If you truly understand how the market moves, probabilities and percentages then you know the more money you have the more likely you are to succeed with a winning strategy. Even if one is given a winning strategy but their account is underfunded and they do not understand position sizing, that individual will eventually lose money. There are fixed fees with trading and just to overcome them with profits requires more capital than $10,000 in most cases.
The general rule is to trade with a minimum of $35,000 which is just enough for you to trade a position size that can generate gains while allowing you to scale in and out of the market at key turning points.
Knowing how much money is required to trade and manage my ETF and futures automatic trading system is important and I will show you some conservative numbers of what to expect each month on average.
How to Make $1,000 to $2400 Each Month with Simple Automatic Trading
Since inception in March 2007 when I started running my automated trading of the ES mini futures system it has returned an average of $2400 a month. This is trading only a $35,000 account and never trading more than $15,000 per trade (3 emini contracts). The results have been truly amazing!
Money buys you time – and time translates to the freedom
to pursue happiness and personal growth, the freedom to
help others, and do whatever you want.
Simply put, I offer a simple automatic trading solution that has your best interest in mind. Making as much money as possible through algorithmic trading while also controlling downside risk. The most exciting part is that it’s automatically traded within your brokerage account using our simple automatic trading system.
PUT SOME OF YOUR INVESTMENT CAPITAL TO WORK WITH OUR SIMPLE AUTOMATIC TRADING SERVICE & SEE WHAT AUTOMATED TRADING CAN DO FOR YOU.
Click to Learn More About My Simple Automatic Trading
Chris Vermeulen
WHOLESALE LONDON gold tumbled more than $20 per ounce in quiet trade Thursday morning, falling with world stock markets after the week’s “three-day rally [in gold] prompted some profit-taking” according to one dealing desk.
“The fact that India,” said investor, fund manager and best-selling author Jim Rogers to BullionVault overnight, “which has been the largest buyer, has reduced its buying a lot is one of the main factors that’s causing gold prices to go down.”
Currently blocking imports with high duties and strict re-export rules, “[India] can probably tolerate $30 billion worth of import of gold,” said C.Rangarajan, chief of the Indian prime minister’s Economic Advisory Council, to an economics conference in Delhi today.
“As inflation comes down and as financial assets become more attractive, perhaps part of the demand for gold can come down too.”
Indian gold imports have totaled nearer $50 billion over the last 12 months, and are blamed by the Economic Times today for “inflating India’s current account deficit to a historic high of 4.8% of GDP in 2012-13.”
Noting plans to “mobilize” existing consumer gold holdings, “If the Indian politicians somehow get their people to sell gold, whoo!” said Jim Rogers to BullionVault.
“Who knows how low gold could go?”
Adding that he’s hedged a portion of his personal gold holdings against further price falls, but not his silver position, Rogers says the US budget deal means “the government is under no constraint. Central banks can [also] print as much as they want.
“With all this staggering amount of currency debasement, gold has got to be a good place to be down the road once we get through this correction.”
This week’s US budget deal will meantime “add pressure on gold and silver,” reckons a note from Standard Bank’s commodity team in London.
Although “tiny, miniscule” according to some commentators, the deal between Republican and Democrat politicians to avert a repeat of the debt-ceiling shutdown early next year now means “another hurdle to economic growth in the US has been removed,” writes analyst Walter de Wet, “and this increases the probability that the US Fed may start to reduce their asset purchases this month.”
So “from a tactical perspective,” Standard Bank’s de Wet concludes, “we still believe that gold should be sold into rallies.”
Right now, says Jim Rogers, “I’m not buying either gold or silver…but if I had to buy one today, I’d buy silver because it certainly has gone down more than gold.
“So on a historic priced-basis if nothing else, I’d rather own silver.”
If the two precious metals do fall sharply from here, he added, “I hope I’m smart enough to buy more.”
Adrian Ash
Gold price chart, no delay | Buy gold online
Adrian Ash is head of research at BullionVault, the secure, low-cost gold and silver market for private investors online, where you can fully allocated bullion already vaulted in your choice of London, New York, Singapore, Toronto or Zurich for just 0.5% commission.
(c) BullionVault 2013
Please Note: This article is to inform your thinking, not lead it. Only you can decide the best place for your money, and any decision you make will put your money at risk. Information or data included here may have already been overtaken by events – and must be verified elsewhere – should you choose to act on it.
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