SGMarkets - Bonds, CFD, Forex, Futures, Options, Stocks and Warrants

IPO - Do not forget their potential

2009-08-29T03:55:00.001-07:00

Instead of participating in the open market, i am going to put some of my funds into new IPO applications. Seems that the heat isn't boiling yet....chances should be high.

Outlier

2009-08-22T21:31:00.001-07:00

http://en.wikipedia.org/wiki/Outlier

In statistics, an outlier is an observation that is numerically distant from the rest of the data.

A very interesting concept that puts our existing civilisation in jeopardy of heading the wrong way. Alot of times, the result is a indirect consequence of many factors which we couldn't think of.

Citigroup - Breakout with Huge Volume

2009-08-06T09:21:00.001-07:00

Have never seen such high volume for a long long time. Just bought some at $3.75.

2 SGX Shares Hit An All-Time High!

2009-08-03T08:52:00.001-07:00

Jardine C&C and Wilmar. I am rather impressed by their recent run and wonder if they are the juiciest short candidates for the upcoming correction.

Dividend Yield - An Important Consideration When Buying Shares At This Juncture

2009-08-02T02:54:00.001-07:00

Very often the market has gone up to a level whereby investors will start asking these questions.

"Is it too late to buy?"

"This share has already gone up so much, should i buy now?"

"When will the market correct?"

So what should you do? Should you stay out and watch? The answer is very simple. All you need is some simple reasonings to convince you that investing in the midst of a rally can be calculated risk afterall.

Step 1: Evaluate the Fundamentals of the Economy

We all know the economy is bad but always bear in mind the stock market is a leading indicator of the economy. Be sensitive to the figures pertaining to job losses. Never be behind the indicator....if you find yourself buying shares after the economy has recovered from its worst patch, its recommended you buy on a retracement in the markets and not immediate.

Step 2: Consider Dividend Yield in Your Stock Selection Process

The definition of being stuck in a share is that one is reluctant to sell it should the price falls below his/hers entry price. In this scenario, its only logical of a long-term investor to hold on to his portfolio.

Dividends will help alot if one is ever stuck. Anything above 7% at this juncture is still considered very attractive. Of course this is based on the current market price but of all is the best projection one can have in this uncertain world.

There are also some companies which might not be dishing out dividends now but often in good times they are generous in their dividend payouts. Be mindful of these companies too as they are potential long term investments also.

Take for example Citigroup. In good times, their dividend payout can be up to US$2 a year. At the current price of US$3+, do your own calculation if its worth a long term position. Bear in mind the restriction of dividends by the US Government for the next 4-5 years.

Step 3: Establish an Entry Price Using Technical Analysis

I am not going to teach you charting here in this article but Fibonacci's and Trend Lines work really well in establishing support and resistances for me. I hate buying at resistances and selling at supports.

Step 4: Though its Long Term, Its Good to Set a Cut-Loss

Not Technically, but be sensitive to the news and policy changes surrounding your investment. No company is too big to fail in my opinion.

I hope these helps and onwards, i hope to write more for this blog and share my investment ideas with you all.

Ever Heard of Paul Desmarais Sr. ?

2009-08-02T02:33:00.001-07:00

I doubt you ever had. His investment holding company has outperformed Berkshire's return over time.

----------------------

Source: Bloomberg

Desmarais, 82, started out with a backwoods Ontario bus
line in 1951. Now, he and his family control Power Corporation
of Canada, a holding company headquartered in an unmarked,
eight-story building on Montreal's leafy Victoria Square. Paul
Sr.'s sons, Paul Jr., 54, and Andre, 52, are co-chief executive
officers. Together, the brothers govern a labyrinthine business
empire that extends from Denver to Geneva to Hong Kong, with
seats on 38 related corporate boards.

Power Corp. owns 66 percent of Power Financial Corp., a web
of North American insurance and asset management companies with
2008 revenue of C$36.5 billion ($32.7 billion). In 2007, the
Desmarais bought Putnam Investments, a once mighty, Boston-based
mutual fund company that had been wounded by a trading scandal
and weak fund performance.
The $3.9 billion deal closed two months before the Standard
& Poor's 500 Index peaked in October 2007. Power Financial's
biggest challenge is to make good on plans to renovate Putnam
into a flagship for U.S. expansion, after the mutual fund
manager's assets were almost halved by the 2008 plunge in global
markets.
In Europe, the Desmarais have been partners with Albert
Frere, one of Belgium's richest men, for almost two decades.
Together, they hold stakes in Total SA, Europe's third-biggest
oil and gas company, based in Courbevoie, France; Paris-based
Lafarge SA, the world's biggest cement maker; and Paris-based
GDF Suez SA, the world's second-biggest utility. Paul Desmarais
Jr. is a director of all three.

In China, the Desmarais own 4.3 percent of Hong Kong-based
Citic Pacific Ltd., a steel, mining and real estate development
company with a market value of $7.2 billion as of July 13. Andre
Desmarais joined the board in 1997. His father first ventured
into China in the 1970s.

Those who bet on Power Corp. in the 15 years from 1993 to
2008 earned slightly more than investors in Omaha, Nebraska-
based Berkshire Hathaway, according to data compiled by
Bloomberg. Power Corp.'s average annual return in the period,
including reinvested dividends, was 14.5 percent. Berkshire,
which pays no dividend, returned an average of 14.1 percent. The
comparison is in local currencies.

The Desmarais also run a $1.6 billion, Paris-based private
equity firm called Sagard Private Equity Partners. Investors
include companies managed by the Frere family; Bernard Arnault,
CEO of luxury goods giant LVMH Moet Hennessy Louis Vuitton SA;
and Laurent Dassault of the French aviation family, who's on
Power Corp.'s board.

Testing New Integration With Blogo

2009-08-02T02:28:00.001-07:00

Hi all, I have just installed Blogo on my Mac and testing the integration with it.

SGX Does 3 Billion Shares !

2009-05-05T05:50:00.001-07:00

What a fantastic day for the Singapore market. The Straits Times Index closed up 45.64 at 2074.35. The amazing thing is the volume done...seems that we are back at the pre crisis level. I am apprehensive i must say.

Will US Decouple from the Rest of the World?

2008-04-03T06:02:00.001-07:00

In recent times you will find that the co-relation between the US market and the rest of the world is getting really wacky. Believe it or not, this possibility is really low. Of course this is my personal opinion. This New World of ours is too connected and markets accessibility is too high for me to buy this theory. However, a logical outcome of this whole idea is the lesser reliance of US as a leading indicator for global market movements.

Is this the beginning of a shift of dynasty?

A Slap in the Face for Recent Lehman Investors

2008-03-30T19:48:00.000-07:00

Source: Money CNN

"Lehman Brothers is accusing a Japanese trading company of perpetrating a massive fraud and plans to sue it for hundreds of millions of dollars, officials at the U.S. investment bank said Sunday.

Lehman is seeking to recoup US$350 million (euro221.58 million) in outstanding loans, which it provided to a unit of LTT Bio-Pharma, according to company officials who spoke condition of anonymity, citing the sensitivity of the case."

Please click above source link for entire article

It's really a slap in the face for recent lehman brothers supporters. After what was a vote of confidence by the markets after reporting good results, on comes a freight train carrying a bunch of useless loan agreements overunning everything.

Might see them testing $35 tonight if this news hit the market full steam.

Bear Sterns's Chairman Dumped Every Share After JP Morgan's New Deal

2008-03-28T03:56:00.000-07:00

How amazing, so much for JP Morgan quadrapling their deal to US$10/share, you have their chairman dumping every single share.

Source: Money CNN

"Just a day after JPMorgan Chase quintupled its bid for Bear Stearns, James Cayne, the chairman of the troubled investment bank, dumped his entire stake in the firm, selling more than $60 million worth of company stock he owned.

Cayne sold over 5.61 million shares of company stock Tuesday at $10.82 a share, according to a company filing with the Securities and Exchange Commission on Thursday.

The filing also revealed that his spouse sold an additional 45,669 shares, worth close to $500,000."

China QDII Fund Goes Kaboooom!

2008-03-26T22:57:00.000-07:00

So much for the hype of China's QDII fund being the next big thing to the world of equity. It seems that most of us are unaware of the liquidation clause that protects 50% of the initial invest. Please read news summary below:

"Minsheng Bank's (600016) QDII fund has been forced to liquidate after its NAV fell more than 50%. Minsheng sold 100 mn shs for the QDII fund at Rmb1/share in Oct 2007. Under the agreement, the fund was to be liquidated when its assets fell below 50% of their initial value or rose more than 18%."

Singapore Scamster Gets Slapped with 5 Months Jail Term

2008-03-24T21:23:00.001-07:00

Source: ChannelNewsAsia Forum

March 24, 2008
Unlicensed fund manager jailed five months
By Khushwant Singh

TRAINING firm Zone Financial was set up to teach people how to trade in future contracts and indices. But it also acted as a fund manager between May 2004 and August 2006, collecting nearly $4 million from 32 people.

Its managing director, Kelvin Han How Yong, 28, was on Monday jailed five months after pleading guilty to allowing the firm to engage in fund management without a capital markets services licence from the Monetary Authority of Singapore (MAS).

Han would persuade participants at his training sessions to invest in a fund - called the Kelvin's Fund - for periods ranging from a few weeks to six months.

Between May 2004 and August 2006, he raised about $4 million from 32 investors as personal loans to him.

The money was used to trade in futures contracts and indices and he promised his clients returns of one to five per cent per month, depending on the amount they put in.

By the time he resigned as managing director in August 2006, he had lost about $718,000.

Read the full story in Tuesday's edition of The Straits Times.

Gold Rush "OUT"

2008-03-20T02:36:00.000-07:00

via Money CNN (Source)

Gold prices tumbled Wednesday, as the dollar regained strength, to sink nearly $100 below its record high set Monday - leaving some traders wondering if this is the beginning of the end for gold's impressive run.

COMEX gold for April delivery fell $59 to settle at $945.30 an ounce Wednesday. Gold had set an intraday record of $1033.90 Monday.

Amazing it is, look at the way the market profit takes on whatever makes them money based on TREND. $59 drop in a day, i wonder how many stop orders have they triggered and how many margin calls have they caused.

Gold might undergo short-term weakness due to this massive correction. Be vigiliant.

Yen Trading @ Critical Levels

2008-03-14T19:28:00.000-07:00

Please take note. Low 90s for USD/JPY spells trouble for Carry Traders.

Sell Crude Oil at US$120 ?

2008-03-12T04:51:00.000-07:00

Many of us are baffled by the sudden rise in recent oil prices. When $100 oil was breached more than a month back, the world ridiculed the way it was orchestrated. 1 contract at $100 it came down back to the low $90s. Those people who laughed at $100 dollar oil being a fad should have their curve wiped off their face by now.

Now with oil touching $110, $120 seems like a near term possibility. The question is: Can the price of $120 dollar crude oil sustain ?

Natural laws of numbers pertaining to financial instruments often create natural resistances and support. A share which tests $0.885 often marks a move to $1.00 and successfully breaking above $1.05 often marks a test for $1.20. Nothing has been proven to such a pattern but often enough i noticed these. If a trade is out of the jurisdiction of fundamentals and technicals, what forms the basis? Numbers.

As such, i believe $120 is a possible resistance for the price of crude oil and with a 30% gain from its price of $90, i believe its a worthy short-term hold for SHORTS.

A Good Read ......

2008-03-12T00:26:00.000-07:00

The announcement which moved the markets yesterday constitute pumping in a further 200 billion USD of liquidity in the US banking system. I recommend all to take a look at the article below.

via Forbes (Source)

Excerpts from the report:

"The new program lets the brokerages borrow for 28 days, but more significantly, it allows the brokerages to offload a broader array of mortgage paper, which has been the bane of their existence since the credit crisis began last fall. If they can get those mortgages off their balance sheets, even if for just a short while, they will have more flexibility to make new loans.

Significantly for the Fed, the new program (which it is inelegantly calling its "term securities lending facility") is designed to be "reserve neutral," meaning it won't increase the nation's money supply to the point where it sparks inflation."

Writing Again?

2008-03-09T08:54:00.000-07:00

After a long hiatus, i have decided i am going to put some effort back into writing this trading blog. Maybe it will be days before my next post comes but rest assure it will be back. Thanks.

I am back!

2006-11-12T00:29:00.000-08:00

Hi everyone,

I am back and in my duration i will be covering more of Singapore Equity since i am looking at them on a daily basis. Wow Wow Wee!

Outlook for the Week (26 June - 30 June 2006)

2006-06-25T15:44:00.000-07:00

It is a new week ahead and i guess i should update the blog with my sentiments on how the market is going to react in the coming week. Well, the market ended on a positive note overall for the week, showing signs of recovery admist the otherwise poorly performed statistical week. Has the markets bottomed out? It will depend on Mr Bernanke and Mr Fukui =)

Expect further selling prior to FOMC which is on Wednesday and Thursday. July 4th is coming and Thursday (after the FOMC announcement) will be a good point to position for the pre-holiday rally (exit on Monday).

Ok, i am off to bed.....still owe u guys my research on Japan's Impact on the 2006 Global Financial Markets.

Article was amended on 29 June 2006 2.50P.M

Japan Caused the Huge Sell-Off?

2006-06-22T23:06:00.000-07:00

New thoughts to share, after speaking to some friends yesterday about the markets. I believe the global fears stems from the huge sell-off in US. But what interests me is this information about cashing out on leveraged CHEAP MONEY that originates from Japan.

Look at the charts, look at the reversals in 2003 and i will share my findings in my next post. Kinda did some research.

Dow Jones Monthly Chart.

FTSE100 Monthly Chart

Nikkei Monthly Chart

S&P500 Monthly Chart

Vote for SGMarkets!

2006-06-18T04:12:00.000-07:00

Dear fellow readers,

Thanks!

-SGMarkets

Outlook for the Week (19 June - 23 June 2006)

2006-06-17T23:57:00.000-07:00

Been watching the world cup more than the markets recently and i am pretty sure i am not the only one. Just like the markets, the World Cup was filled with big wins, upsets and revivals.

Expect the market to continue its bullishnes during the earlier part of the week and a sell-off (most likely on Friday) to mark the preparation for the next FOMC meeting which begins next Wednesday. How will the second half of 2006 move from here? Well, we will know next week. June triple witching ended with a flat performance from the markets and this strengthened my belief that the bullish trend will continue on Monday. So LONG with caution. According to statistics, the week after June Triple Witching ended with Dow Jones down 14 of the last 16 occurences. Shorting on Thursday looks definitely YUMMY =)

The Big Gold Drop & I Don't Fulfill KOSPI Margin Requirements

2006-06-12T13:58:00.000-07:00

It is 5am now in Singapore. Just finished watching one of the World Cup match broadcasted "LIVE" today, between Italy and Ghana. The match finished with a scoreline of 2-0 in Italy's favour.

I believe most did not notice. Admist the happenings in Germany, the Dow Jones and Gold prices were tanking like loose cannons. Dow Jones closed 99 points down while gold is down $35 (one of the biggest drop in a day). I did mention before gold is on a temporary downtrend and here we are having a $35 drop within a day. Its now trading at $568. London loco gold (the real gold we save in) is still trading above $600. What a day. It got me thinking if the price reflected on my real-time quotes software was correct. Afterall there is a 30 dollar difference between the spot and futures price which is quite a huge disparity. Take a look at the 30 minute chart and decide for yourself.

5 minutes ago, i checked Interactive Brokers (http://www.interactivebrokers.com) for the overnight margin required for a KOSPI contract. Guess how much it was? 13,000 USD ......... yes, no doubt about that. i think i have to stop dreaming about KOSPI for a while. Shall stick to the margin-friendly GBP and EURO. An exciting opening for Asia i believe in 3 hours.

Bulls in Shining Armor Saves the Day in Planet Stock

2006-06-09T02:55:00.000-07:00

Imagine the following scenario. Its a black gloomy day on the roads of Planet Stocks and the renegade bears are running and ramaging through the streets. For days, the bears have been taking out their arch-rival, the bulls. It was chaos everywhere on the planet. This was when many of the less courageous bears decide to take to the streets, after monitoring the big bears for days.

Then suddenly, you see a horde of bulls in shining armor (cause the market is "cheap" now) running against the direction of the bears. Well physchologically, some of the more experienced bears turned back and ran ahead of the bulls, some of the bears went head-on hoping they have sufficient comrades who will flatten their counter-nemesis. But to their surprise, these bulls seem to fight well in their new shiny armor and they are united for sure (well at least for today).

This story was so apt for the behaviour of the US markets yesterday and the Asian markets today. Down Jones did a 177 point u-turned, Nikkei did a much more impressive 300+ point u-turn and needless to say the other asian markets which look up to Nikkei as a leading indicator.

Mock trade for S&P500 June was activated during the massive selling in the US markets @ 1245.00. The fact is the S&P rallied back up to the 1258 level thereafter but physchologically understanding myself, i would have cutloss @ 1240.00 having seeing the market drop further to 1235.00. I am just one of the bulls in shining armor who ran back upon fighting with the bears. Hahaha.

What You Know and What You Don't Know About Gold

2006-06-08T01:37:00.001-07:00

Take a look at the daily charts of Gold. If you are a strong believer that the USD and Gold, depsite unpegging from each other, still enjoys a healthy inverse relationship then you will be surprised. Gold seems to be on a temporary downtrend while the US Dollar Index is trading within a range. I admit i do not have the experience to tell if this trend will prolong over the months of years but one thing is for sure, such radical movements in gold price is definitely not rational. On the long run, i expect gold to rise again for the fact that to mend the U.S trade and current account deficits, the USD has to weaken and thus making U.S exports more viable for the global community.

So what triggered such a huge selloff in gold within the months? Read the following and decide if that might be the cause. No one will know except the market mover himself =)

The Gold Lease or Gold Libor Rates
-------------------------------------

From: http://www.aci.net/kalliste/gold3.htm

Gold bears interest. Positive interest. Many people do not know this. They are used to the notion of storing their gold with some bank or warehouse, and paying for storage cost. They then view the storage and insurance cost as a negative interest rate. But this has little to do with the way gold is priced or traded in the wholesale market.

The forward price of gold--the price agreed now for gold to be purchased or sold at some time in the future--is a function of the gold spot price, and the interest rates representing alternative uses of resources over the forward time period. So before we discuss gold forward prices, we should discuss gold and dollar interest rates.

This brings us to the gold lease rate, or the gold interest rate paid on gold deposits. Another term that is used is gold libor, by analogy with the London Interbank Offered Rate for eurocurrencies traded in London. Despite the apparent literal connotation of each of these labels, "gold libor rates" and "gold lease rates" are alternative descriptions that refer to the bid-asked gold interest rates paid on gold. The bid rate (deposit rate, borrowing rate) is the gold interest rate paid for borrowing gold (that is, on gold deposits), while the asked or offered rate is the gold interest rate quoted for lending gold. The expressions "bid-asked gold lease rates" or "bid-asked gold libor rates" are thus interchangeable.

If the gold borrowing rate is 2 percent per annum, for example, then 100 ozs of gold borrowed for 360 days must be repaid as 102 ozs of gold. (Gold interest rates, like most money market rates, are nearly always quoted on the basis of a 360-day year.) In the early 1980s gold deposits rarely yielded over 1 percent, but in recent years have rarely yielded less than 1 percent.

Because of large central bank gold holdings, gold loans are one of the cheapest financing sources for the gold mining industry. A mining company borrows gold and sells it on the spot market to obtain funds for gold production. The interest installments on the gold loan are payable in gold. And when the loan matures, the principal (and any final interest due) is repaid directly from mine production.

Central banks are the major lenders of gold. They accounted for around 75 percent of the gold on loan, estimated at around 2,750 tonnes, at the end of 1996. Central banks in recent years have been under pressure to earn a return on their gold holdings, and therefore lend to, for example, gold dealers who have mismatched books between gold deposits and gold loans. (The practice of central bank gold lending first became newsworthy in 1990, when the investment banking firm Drexel, Burnham, Lambert went bankrupt while owing borrowed gold to the Central Bank of Portugal.)

The gold lending (or borrowing) rate, then, is one of the components that determine the gold forward price. Let's see how this works.

June 8th - The Day Asia Stock Markets Crashed and Euro Did A Fakie

2006-06-08T00:50:00.000-07:00

Currency Pair: EUR/USD JUN 2006
Channel High: 1.2797
Channel Low: 1.2783
Channel Width: 14
Profit Target: 1.2818
Ecnomic Indicator: None
Time of Release: N.A
Volume @ Time of Release: N.A
Profit Given: NO

Setup Checklist:
Breakout of Channel before Time of Release: NO
Volume Breakout of Channel before Time of Release: YES
Economic Indicator Votality Measure: 0

Today Asian stock markets went for a round of solid selling with nikkei and hang seng clocking a 468 and 388 drop respectively. So how did the EURO fare? Weak. Seems like it prefers to test the bottom support than re-test the upper resistances.

According to the stock almanac, today is a bearish day for both Dow Jones Industrial Average and S&P 500. Remember, i have a buy LIMIT @ 1245.00 =) I wonder who will win....the statisticians win or the technical analyst? We shall see.

Anyway back to the daily EURO trade. Today the EURO channel trading system was faced with a cut loss of 16 pips. The breakout at 2p.m was just too weak. After triggering the upper channel, the market u-turned and headed south, hitting a low of 1.2754 in slightly more than an hour. At 7p.m, Bank of England is going to announce their interest rates (forecast 4.5%, prior 4.5%) and at 7.45, the ECB is going to announce theirs too (forecast 2.75%, prior 2.5%). And hey hey! Bernanke is talking tomorrow at 11p.m Singapore time! Prepare for action =)

June 7th - Overslept the Euro Channel

2006-06-07T12:15:00.000-07:00

Currency Pair: EUR/USD JUN 2006
Channel High: 1.2841
Channel Low: 1.2831
Channel Width: 10
Profit Target: 1.2811
Ecnomic Indicator: None
Time of Release: N.A
Volume @ Time of Release: N.A
Profit Given: YES

Setup Checklist:
Breakout of Channel before Time of Release: NO
Volume Breakout of Channel before Time of Release: YES
Economic Indicator Votality Measure: 0

OIIE!!!!!!!!!!!!!!!!!!!!!!!!!

2006-06-07T00:49:00.000-07:00

Lookout for it...............

Second Wave of Selling?

2006-06-06T15:01:00.000-07:00

I guess so if you expect bad news for companies on 28-29 June 2006. Mock buy 1 S&P June @ 1245.00 =)

NEW YORK (XFN-ASIA) - Stocks dropped for the second straight session Tuesday, with the Dow Jones industrial average falling to its worst close since March 9. Global markets also sold off as inflation fears worsened.

The Dow lost more than 110 points in midday trading before narrowing its loss later in the session. The index dropped nearly 200 points Monday after Federal Reserve Chairman Ben Bernanke spooked Wall Street by saying that the central bank will remain vigilant in fighting inflation.

Investors have been hoping the Fed would stop increasing short-term interest rates after 16 hikes; the nation's benchmark rate now stands at 5 percent. However, Bernanke's comments in recent weeks have repeatedly shaken investors and sent stocks tumbling.

"Bernanke came in with this reputation as a great communicator," said John Caldwell, chief investment strategist for McDonald Financial Group, part of Cleveland-based KeyCorp. "Most of us would choose to go back to the general confusion (former Fed Chairman Alan) Greenspan created."

The Dow fell 46.58, or 0.42 percent, to 11,002.14. The index tumbled 199.15 points, or 1.77 percent, during Monday's session.

Broader stock indicators were also lower. The Standard & Poor's 500 index fell 1.44, or 0.11 percent, to 1,263.85, and the Nasdaq composite fell 6.84, or 0.32 percent, to 2,162.78.

Declining issues led advancers by more than 2 to 1 on the New York Stock Exchange.

Stocks in most Asian markets fell hard Tuesday, with Tokyo's Nikkei 225 index down 1.81 percent, while India's benchmark index fell 2.51 percent. The major European indexes also dropped, with Ireland's benchmark index down 4.89 percent and Austria's benchmark falling 4.75 percent.

Bonds rose, with the yield on the 10-year Treasury note falling to 5.01 percent from 5.02 percent late Monday. The U.S. dollar was mixed against other major currencies, while gold prices were lower.

Crude oil futures were down slightly. A barrel of light crude settled at $72.50, down 10 cents, in trading on the New York Mercantile Exchange.

Wall Street's decline comes as investors fret about Bernanke's communication skills. For instance, CNBC reported on May 1 that Bernanke believed investors had misinterpreted his recent congressional remarks as an indication the Fed was nearly done raising rates. Stocks -- which had been up for most of that day -- slumped immediately and Bernanke later said he regretted the remark.

"(S)eeds of confusion continue to be sown by this new Fed, and there is no doubt a risk that we will see a policy misstep at the end of June," wrote David A. Rosenberg, Merrill Lynch's North American economist, in a note to clients Tuesday.

The fear among investors is that an over-vigilant Fed will raise rates too far, cooling the economy to the point of recession. Bernanke's communication stumbles have only served to make the market more nervous.

Investors have plenty of other worries, too, including sky-high commodity prices and turbulence in foreign markets.

"You have all these factors going on," said Ralph Acampora, managing director of technical research Knight Capital Group. "What Bernanke said the other day is the pin that hit the balloon."

Some of the stocks that have seen the biggest run-up over the past three years look especially vulnerable now. One of the sectors hit hardest Tuesday was homebuilding, where a group of stocks fell following a downgrade by Wachovia Securities. D.R. Horton Inc., the nation's largest homebuilder by units, fell $1.40, or 5.6 percent, to $23.41; KB Home fell $3.28, or 6.7 percent, to $45.82 and Pulte Homes Inc. fell $1.64, or 5.5 percent, to $28.11 after the downgrade.

Other homebuilders continued to slide as investors remained nervous about the once-hot stocks. Toll Brothers Inc. fell $1.03, or 3.7 percent, to $26.55 and Hovnanian Enterprises Inc. fell 96 cents, or 3.1 percent, to $29.75.

In other company news, IBM Corp. rose 70 cents to $79.76 after the technology company said it would triple its investments in India to $6 billion over the next three years. Chairman and Chief Executive Sam Palmisano said the investment will be used to build service delivery centers in Bangalore, India's technology hub, and create telecommunications research and innovation center for IBM's telecom clients around the world.

Hewlett-Packard Co. fell 69 cents to $30.90 after the company revised its full-year outlook upward, thanks to a favorable tax settlement with the U.S. government. The revised forecast still fell short of analysts' expectations.

Preliminary consolidated volume on the New York Stock Exchange came to 2.75 billion shares, up from 2.36 billion on Monday.

The Russell 2000 index of smaller companies fell 2.96, or 0.41 percent, to 710.96.

In other overseas markets, Britain's FTSE 100 fell 1.60 percent, Germany's DAX index dropped 2.11 percent, and France's CAC-40 lost 2.40 percent.

June 6th - Trading the EURO Channel

2006-06-06T01:17:00.000-07:00

Currency Pair: EUR/USD JUN 2006
Channel High: 1.2915
Channel Low: 1.2896
Channel Width: 19
Profit Target: 1.2936
Ecnomic Indicator: None
Time of Release: N.A
Volume @ Time of Release: N.A
Profit Given: YES

Setup Checklist:
Breakout of Channel before Time of Release: NO
Volume Breakout of Channel before Time of Release: YES
Economic Indicator Votality Measure: 0

Today is the second day after the markets got Bernanked. Trading during asian hours was cautious, thin and non-volatile.

The EURO channel was formed nicely prior to the opening of European trading hours. EURO prior to the breakout was traded thinly pending several european data released at 3.50p.m to 4p.m. Many people do not bother to know about the intricate workings of the complicated forex network that links nations and connects continents. The following has been my observations (excluding days that emcompasses the wait for high volatility economic indicators):

1) European dealers tend to come in to deal for the day at around 3-3.40p.m
2) U.K dealers tend to come in to deal for the day at around 4-4.40p.m
3) U.S dealers tend to come in to deal for the day at around 10-10.40p.m
4) Asians ... don't bother. They aren't big volume players in the FOREX/FOREX Futures market during the Asian timing.

Today, as the breakout occurred before 3p.m, the recommended profit should be 20pips. With several low volatility economic data slated for release, you can choose to do a trailing stop to ride your position. But as i have observed, when the EURO dealers come in after 3, your position gets stuck in this 50-50 game. Risk it or blow it? Blow it at 20pips i reckoned.

As you can see from the chart, the market gapped down thereafter and continued a gentle downtrend till the closure of the market. Trade with caution during these timings. These periods of risk exposure might best be your friend and yet your FOE. It all depends on how you utilize them. If i have choice of my best friend, i would choose Bernanke =)

European Economic Data Outlook 6-June-2006

2006-06-05T21:39:00.000-07:00

From XFN-Asia

EURO ZONE

The purchasing managers index for the services sector is expected to continue to edge higher in May, matching the small gain recorded in the manufacturing PMI. The services PMI is expected to edge up to 58.5 from a 5-1/2 year high of 58.3 in April. A further gain in the services PMI will strengthen the case for the European Central Bank to raise interest rates on Thursday. Credit Suisse economists said services PMI data have indicated much stronger growth rates than shown by the official GDP numbers, and if this strength is sustained in May, this would point to solid second quarter growth. However, HSBC economists said the services PMI is probably very close to its peak.

GERMANY

Germany's services PMI is expected to edge higher, in line with other positive survey data, and is seen rising to 57.6 in May from 57.3 in April.

FRANCE

The French services PMI is projected to firm slightly, in line with the general euro zone trend. The indicator is expected to edge up to 59.6 in May from 59.4 in April.

ITALY

Italy may be left out of the continuing advance in euro zone PMI readings, with its services PMI figure expected to slip to 59.4 in May from 59.6 in April. This would match a similar downturn in the country's manufacturing PMI, economists said.

UK

The British Retail Consortium's latest retail sales monitor is expected to show like-for-like retail sales rose by 2.5 pct in May from the same month a year earlier and after a 6.8 pct jump in April.

April's sharp gains were largely because Easter fell in the month, and though sales are expected to have slowed in May, the trend "has clearly improved and is consistent with reasonable growth on the high street," HSBC analysts said.services PMI is projected to firm slightly, in line with the general euro zone trend. The indicator is expected to edge up to 59.6 in May from 59.4 in April.

The Day Bernanke Moved the Markets @ 2.20am

2006-06-05T11:51:00.000-07:00

I am sure the market got the idea that the Fed chairman is unhappy over the economic data recently pointing to a slowdown in inflation because AFX broadcasted the news 4 TIMES! Once @ 2.21am, the second @ 2.24am, the third @ 2.41am and the fourth @ 2.47am! The Euro plummeted 50pips since the announcment of the statement by B. Bernanke and the stock market reacted with a decent sell-off. Who needs real hikes when the voice of one man is able to send jitters through the markets? Correction? Rebound? Its the same man.

WASHINGTON (XFN-ASIA) - Even though the once barreling U.S. economy is now slowing down, Federal Reserve Chairman Ben Bernanke on Monday called recentincreases in inflation unwelcome and pledged to make sure surging energy prices don't make things worse.

In deciding the Federal Reserve's next rate move in late June, Bernanke said the inflation outlook "will receive particular scrutiny." Fed policy-makers "will be vigilant" to ensure that the recent pattern of higher readings in core inflation, which excludes food and energy prices, "is not sustained," he said in remarks prepared for an international monetary conference here.

On Wall Street, the Dow Jones industrials slid 160 points as Bernanke's fresh warnings on inflation rattled investors.

Bernanke offered his most extensive assessment of current economic conditions and the challenges facing Fed policy-makers.

"With the economy now evidently in a period of transition, monetary policy must be conducted with great care and with close attention to the evolution of the economic outlook," Bernanke said. He stressed anew that future rate decisions will rely heavily on what economic barometers say about inflation and business activity.

So far this year, inflation at the consumer level has been elevated in large part by rising energy prices, Bernanke said.

As measured by the Consumer Price Index, "core" inflation -- which excludes food and energy prices -- rose at an annual rate of 3.2 percent over the last three months and 2.8 percent over the past six months. "These are unwelcome developments," he said.

Fed policy-makers pay close attention to "core" inflation figures to get a better sense of how prices of lots of other goods and services are behaving. As these core measures have marched higher, economists have worried that surging energy prices are feeding into higher price tags for more and more items.

Oil prices, which hit a record high of more than $75 a barrel, are hovering around $73 a barrel. Gasoline prices have climbed, topping $3 a gallon in some areas.

To combat inflation, Fed policy-makers have boosted interest rates 16 times since June 2004. The Fed, which meets next on 28-29, has said that coming rate decisions will rely heavily on how barometers on economic activity and inflation look.

Some economists believe the Fed will raise rates again at that time to blunt inflation. Others, however, think the Fed will leave rates alone, taking a pause in its two-year rate-raising campaign to assess economic conditions.

The economy, which grew at a brisk 5.3 percent pace in the opening quarter of this year, is slowing to a more moderate pace, Bernanke said. Higher energy prices are playing a role by making some consumers more cautious in their spending. Another factor is a cooling housing market, he said.

"The anticipated moderation of economic growth seems now to be under way," he declared.

Private economists believe economic growth in the April-to-June quarter will probably clock in around a 2.5 percent pace or slightly better.

Although consumers, who account for two-thirds of all economic activity, are showing signs of moderating their buying appetite, businesses on the other hand are spending and investing at a robust clip, Bernanke noted.

He also pointed out that the slower job creation seen in recent months and an edging up in filings for unemployment benefits also are "consistent with the softening in the pace of overall economic activity that seems to be under way."

Employers added just 75,000 jobs in May, the fewest in seven months. Job gains for March and April turned out to be lower than previously thought.

June 5th - Trading the Euro (European Holidays)

2006-06-05T03:12:00.000-07:00

Currency Pair: EUR/USD JUN 2006
Channel High: 1.2962
Channel Low: 1.2941
Channel Width: 21
Profit Target: 1.2983
Ecnomic Indicator: None
Time of Release: N.A
Volume @ Time of Release: N.A
Profit Given: YES

Setup Checklist:
Breakout of Channel before Time of Release: NO
Volume Breakout of Channel before Time of Release: YES
Economic Indicator Votality Measure: 0

Another painful lesson learnt from the FOREX FUTURES market today. Traded both behind and ahead of my system. System gave entry @ 63 but decided not to go in. When the market reversed, i entered @ 49 instead of the bottom channel. Market thereafter faced strong resistance @ 46,rebounded and rallied. Got cut loss @ 77. Slippage of 5 points because of IB's problem with covering STOPS. Took a long position @ 77 and i was kinda reminded of what happened before when i flipped my positions. I often end up with double losses. Exited with $6.50 profits. Thereafter, the market rallied to 1.2992. What a day....

June 2nd - Channel Trading the Non-farm Payrolls

2006-06-04T10:00:00.000-07:00

Currency Pair: EUR/USD JUN 2006
Channel High: 1.2842
Channel Low: 1.2809
Channel Width: 33
Profit Target: 1.2908
Ecnomic Indicator: Non-Farm Payrolls
Time of Release: 8.30PM SGP / 12.30 GMT
Volume @ Time of Release: > 18,000
Profit Given: YES

Setup Checklist:
Breakout of Channel before Time of Release: NO
Volume Breakout of Channel before Time of Release: YES
Economic Indicator Votality Measure: 3

Personal Note: The U.S. Non-Farm Payrolls is one of the few mind-baffling economic indicators which very often upset forecasts. Economists had predicted the figures to stand at 175,000 but the data release shocked the markets. There were only 75,000 new jobs created in the month of May, the lowest in 2006. Is this a sign that companies are playing defensive prior to the direction of the FED or are they hurt by the 16 consecutive hikes on the Fed Rate. So will the Feds continue with further rate hikes or will they pause upon signs from economic data? The fact is B. Bernanke did mention that the committee's decision will be based upon the economic data presented prior to the FOMC meeting on 28 June 2006 and the market has been moving within the range of 1.2716 and 1.2988 since. There will not be any high volatility indicators in the coming week and i expect the EUR JUNE 2006 to retreat back to the 1.2800 region.

CNN Article: Read It Now