Global Trading Blog
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Dear Subscribers:The bullish reversal from the lows in the market that we saw yesterday extends into more gains today after a round of bullish macro data. The ADP Non Farm Employment & ISM Non Manufacturing PMI beat expectations. However they still show bearish charts which show that the economy isn't strong. The S&P 500 is still under the short term downtrend that has been acting as resistance. Momentum is also trending downward. Look for a breakout over these trendlines for a new phase of the rally to occur. Overall things look bullish technically and the market has just pulled back ... -
Dear Subscribers:Today we had a very macro intesive day but data was in general better than expected.CB Consumer confidence and Richmond Manufactoring Index beated estimates by a wide margin. The S&P Home Price index continues to edge up, this month reaching a positive reading year to date. Home prices have increased this year and thus the housing bottom looks more solid month by month.As noted above, the CB Consumer index posted a much better than expected reading and edged upwards substantially. Overall the economy has been improving a bit and the odds of a recession have been lowered this year. ... -
This week all the important macro releases came out with readings that were worst than expected. Since early February, macro data has been missing expectations and we saw the effect earlier this year with a very weak GDP growth for the first quarter of only 1.9%From then on things haven´t improved and Macro misses have continued. Leading indicators such as the ECRI Weekly Index or the CB Leading (rate of change) have turned negative. ECRI co-founder Laksman Achuthan states that the recession has probably started but isn't evident at the moment. Watch interview here. If we just take a look at ... -
Dear Subscribers:Markets open slightly weaker today around the globe concerned on a large trade deficit posted by China of $31.5 billion. Emerging markets, commodities, silver and gold stocks are hit the most by this announcement.Last week we had a positive bullish reversal on most major markets. While the price action was bullish, volume was lacking.We are still observing some technical deterioration and momentum starting to wane which are risks that need to be considered.Bullish setups should be taken but with more caution and lowering the position size.A breakout of the S&P 500 to new highs with good volume would remove this ... -
Dear Subscribers:In an almost copy-paste FOMC Statement from previous months, where the FED sees still a weak recovery and high risks due the situation in Europe, low rates until at least late 2014 were assured for the market.This was interpreted by most market participants as a form of QE 2.5. The market reverses its losses and the EUR/USD which was down for the day spikes higher and challenges its 50 day moving average.Breaching this resistance will probably accelerate the short covering rally that is occuring in this currency pair. The S&P 500 is overbought but has been consolidating in a very ... -
Dear Subscribers:We got the powerful bounce from deep oversold conditions that I highlighted last week. When the market monitor has 85%-90% of its assets in an oversold condition there is a lot of "powder" for an upside explotion. A catalyst, a "match" is what it is needed to light the fire and propel the markets higher from extreme pessimism.The catalyst came this week with positive black friday sales, progress in the European ESFS bailout fund and yesterday the coordinated central bank intervention.The catalysts have been coupled with positive US macro data that continues to beat expectations and suggest that 4th ... -
Dear Subscribers:GLD is forming a Cup & Handle pattern that has bullish implications.It has once again succesfully tested and bounced from its 150 day moving average.The pattern has a break out point at 175.50. This trade is still supported by loose monetary policy by the main central banks of the world.Today we saw how central banks intervened to add liquidity and lower lending costs for European banks in US Dollars.If a new QE is launched by the FED or the European Central Bank, GLD will a have a powerful tailwind to keep on rising. Best regards, ... -
Markets fell hard on Wednesday to mark the sixth day of consecutive losses for the S&P 500. The continued sell off experienced by the markets made the current pre thanksgiving week one of the worst performing in history. The Euro crisis and the political deadlock of the "super committee" are the culprits of the current sell off according to the headlines.I attribute the selling to a macro problem. There is an ongoing deleveraging process in developed western economies that started in 2007. Abscent of new monetary and fiscal stimulus ( QE2 ended this June and the US & European governments ... -
Dear Subscribers:Risk off trade started in Asia with banks and brokers leading the downside.In Europe trading is mixed with some indexes are positive and others negative. However most of them are higher than during the beginning of the Euro session as yields of the bonds from Italy and Spain drop.There is still no agreement, but there is serious talk about implementing a Quantitative Easing program by European Central Bank. This program would monetize the debt of the PIIGS countries and lower their yields and allow them to finance their spending by weakening the Euro. This liquidity injection would be bullish for ... -
Dear Subscribers: Markets continue to display high volatility due to the events that are ocurring in Europe. The Greek Prime Minister called for a public referendum on Monday to see if the country accepted the terms imposed by the EU in order for Greece to receive the bailout funds, get a haircut of 50% on its debt and remain in the Euro zone. The referendum could cancel all the hard work done by European politicians to contain the debt contagion and bailout Greece if they choose to reject the conditions imposed by the EU. This uncertainty caused a sharp sell off early this ... -
Dear Subscribers: Markets begun this week overbought after the extended rally in October. As I highlighted on Monday, this made it highly probable that we would face some sort of consolidation or correction this week. 90% of the assets I track in the market monitor were overbought. European politics made this correction a lot worse with the announcement of Greek Referendum that would approve the conditions set by the EU to Greece in order to receive bailout funds and give their debt a 50% haircut.If the Greeks refuse and enter default, rejecting the conditions set by the EU, European banks would face ... -
Dear Subscribers: News from Europe and Macro data worst than expected try to spoil the "bulls" party. The expected and definite plan to "bailout Europe" that was supposed to be released tomorrow has been postponed until next Sunday. It appears that an agreement is basically done between the European leaders but some details need to be ironed out and this is taking longer than expected. This puts some downward pressure on the markets that dislike uncertainty. It is also being rumored that the Europeans will start their own "Quantitative Easing" program in order to "finance" the huge debt problems the PIIGS countries are facing. ... -
Dear Subscribers: Extreme volatility and fear continues in the markets world wide. The S&P 500 yesterday dropped to test the August lows which held as support. Today we continue with a weak bounce on most US Indexes but the gains are volatile with some stocks bouncing a lot and others dropping. Emerging markets remain very weak and continue to sell off. Something that stands out today is the strong sell off in precious metals such as platinum, gold and silver. Gold drops over 5% and looses 9% in the week. Things are more extreme for silver which drops 15% and looses 24% in the ... -
Dear Subscribers: Yesterday the FED announces a new monetary intervention denominated by the market as "operation twist". Instead of printing more dollars to monetize treasuries or mortgage backed securities the FED will purchase 400 Billion of longer term treasuries and sell the same amount of short term securities in order to lower long term interest rates and lift shorter term rates. This intends to lower the cost of mortgages which are linked to longer term treasuries in an effort to revive the depressed housing market. An increased activity in the housing market would increase employment by hiring workers and boost economic activity. The ... -
Dear Subscribers: Markets are relatively flat and volatile today awaiting for the FOMC statement regarding monetary policy in the US. The market expects the FED to "do something" this time like monetizing more treasuries, changing the duration of the assets purchased or cut the interest rate in bank reserves in order to stimulate lending to business and consumers and thus reactivate economic growth. Today also the Central Bank of the UK announced that it will probably start their own QE2 program in October. I think we are about to enter a period of massive QE by all major central banks since developed economies ... -
Dear Subscribers: Yesterday the markets begun the week with a lot weakness with the S&P 500 futures openining 15 points down and with the market falling about 2% before rallying in the afternoon and recovering most of the losses. Today we see a continuation of the rally that started yesterday in the afternoon making the S&P 500 hit the previous highs at 1220 from the end of August. Also at these level the 50 day moving average is trading so I expect some resistance at these levels, especially with the FOMC meeting tomorrow. Traders are expecting a new round of monetary ... -
Dear Subscribers: Fear takes control of the market once again due to negative news pouring out of Europe. Rumors that Greece is entering default this weekend and that Germany is readying a plan to shield and save its banks from this scenario puts the market on a major "risk off" trade today. Also one of the memembers of the Europe Central Bank, Stark, quits because he doesn't agree with the PIIGS countries bond purchases that this institution has been conducting. In a day with extreme risk aversion, everything is selling off today except the dollar index and treasuries. Even gold and ... -
Dear Subscribers: Yesterday the market could withstand the dismal CB Consumer Confidence report because it was mostly discounted. The day ends with gains across the board after the FOMC minutes revealed that many members were in favor of a new QE in August. This raises the odds that QE3 or some of monetary stimulus will be announced in September in order to "aid" the economic recovery. Yesterday's optimism carries on today with most indexes rallying. Macro data comes in line or better than expected and the S&P 500 is up 1.14% in these moments. Our trade in ALXN remains strong, gaining over ... -
Dear Subscribers: The day begins with lots of volatility in the markets with the speculation of a possible yet improbable announcement of QE3 from Ben Bernanke in the Jackson Hole conference. The macro data released today is once again, dissapointing. Preliminary GDP has a reading of only 1% while revised UOM Consumer Sentiment is also under expectations with a reading of 55.7. Over 90% of macro data has been dissapointing during the last months. At 10:00 AM Bernanke ratified that there will be no more QE3 for the moment but the FED will consider further measures in September's FOMC meeting. He once again ... -
Dear Subscribers: Tomorrow FED president, Ben Bernanke, is going to deliver a speech at 10:00 AM at the Jackson Hole conference. Many expect that he announces a new monetary stimulus due to the weakness in economic growth, housing sector and the downdraft in stocks. Macro data continues to dissapoint, today with the Unemployment Claims coming out with a reading of 417K over the 403K that were expected. The truth is that there is really no reason for the FED to engage in further monetary stimulus other than to "finance" the US fiscal deficit by devaluing the dollar. There is a big difference today ... -
Dear Subscribers: Markets say good bye to the second round of "Quantitative Easing" with a rally that continues this week's bull run. The Nasdaq, Dow Jones Industrials and S&P 500 all have gains of roughly 1% and reach their 50 day Moving average which should offer resistance. Today's rally was boosted with a much better than expected "Chicago PMI". This is the first reading regarding industrial production, in quite a while, that comes better than forecasted. The market had been hit with 6 consecutive down weeks and 90% of economic data has been worst than expected. A better reading on an important data ... -
Dear Subscribers:A new blog I wrote for www.moneynews.com regarding higher interest rates with the end of QE 2 in just a couple of days.You can read the blog by clicking here.Best Regards, Victor Riesco -
Dear Subscribers: Yesterday the FED mantained interest rates near 0% and confirmed that at the end of June, Quantitative Easing part 2 would end. Let's remember what "QE" is all about. The FED "prints" dollars to buy treasuries in open market operations. With this the FED attempts to keep interest rates very low being a buyer of an average of 7 Billion in treasuries a day. This attempts to create some inflation and by adding liquidity to the market so credit is cheap and consumers and business borrow and spend. With QE the FED also "finances" the mammoth fiscal deficits the ... -
Dear Subscribers: Yesterday we had a strong gains in all markets around the world. There was strong breadth that we hadn't seen in an upday for quite some time. Of the Market Monitor, all assets except one (China with the FXI ETF), ended the day positive. The Up Volume/Down volume ratio was 10 to 1. A lot of buyers emerged to defend the support zone created by the 200 day Moving Average and March lows in the S&P 500. Up Volume/Down Volume Ratios: It helped the market that we only had one macro data point yesterday, Existing Home Sales, and that it ... -
You can read the original article in this link: Pullback Offers Great Chance for Quick ProfitWhen I wrote my mid-March blog, markets had corrected about 5 percent from their highs and investors were running scared due to a plethora of bad news — but especially because Japan had suffered a major natural disaster.At that moment, markets had become short-term oversold and I advised: "don’t fall prey to the fear and use these sell-offs as opportunities to buy quality stocks that are undervalued." From then onward, the market rallied until the beginning of May.This time, the downdraft in stocks has been caused ... -
Billionaire Jim Rogers gives his opinion on US Debt and Interest Rates.Rogers Expects:- Higher Interest Rates going Forward- Countries Buying less or no US Debt- US Debt Crisis will cause global unrest- QE3 will happen One of my favorite "Position Trades" going forward is "long TBT".With the end of QE2 at the end of the month, the treasury market will lose the FED as a buyer that has purchased 36% of all the debt emitted since QE1 started in March 2009.With a projected fiscal deficit of 1.5 Trillion this year, by the laws of supply and demand, leaving everything else constant, ... -
This is an in depth analysis of the effects of Quantitative Easing in the economy and asset markets plus what will happen once the FED stops using this monetary tool in June 30th, 2011. This article was published in Gurufocus.com and received great ratings and was selected as "Editor's Pick". Read the article here: The Effects of Quantitative Easing
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I’M VICTOR RIESCO
I’m a financial analyst and professional investor from Santiago, Chile. I’m the owner of Global Trader, a brokerage and trading .
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