Alan's Finance Blog

Merry Christmas and a Happy and Prosperous 2010!

Seasons Greetings everyone! I’ve been really busy with Christmas shopping and holiday preparations lately so I haven’t had much time to tend to this blog, but I’d like to nonetheless take a few minutes to wish you all of you a heartfelt

Merry Christmas!!! And a Happy and Prosperous New Year!!!

Sincerely,

Alan

http://alansfinanceblog.com

Further Downgrade in Greece Triggered Credit Concerns, Investors Sheltered under USD

Broad-based rally in USD pared commodity gains made Wednesday. The dollar surged to 1.434, the highest level in 3 months, as S&P downgrades Greece’s credit rating for the second time this year.

Commodities pulled back as strength in the dollar reduced demand. WTI crude oil price retreated to 72.6 after surging to as high as 73.55. Comex gold also dropped to 1136 from 1142.5. Commodity currencies also tumbled. The Australian dollar plunged to 0.887, the lowest level in more than 2 months, while the New Zealand dollar slipped for the 3rd day to 0.71.

After placing Greece’s long-term rating on Credit Watch for a week, S&P eventually decided to downgrade it to BBB+ from A-. According to the agency, ‘the downgrade reflects our opinion that the measures the Greek authorities have recently announced to reduce the high fiscal deficit are unlikely, on their own, to lead to a sustainable reduction in the public debt burden’. The downgrade also made S&P’s rating consistent with that of Fitch which downgraded Greece to BBB+ on December 8. However, they may not be the end of the story. Greece remains in S&P’s Credit Watch, suggesting further downgrade is possible.

Risk aversion increased and shifted from higher-yield assets for USD, Japanese and bonds. Stock market also declined. In Asia, the MSCI Asia Pacific Index lost -0.9% as driven by financial companies. Concerning individual indices, China’s Shanghai Composite Index lost -2.3% while Japan’s Nikkei stock average lost -0.1%.

In Europe, all benchmark indices opened lower. In UK, the FTSE 100 Index slid -1% while both of Germany’s DAX and France’s CAC 40 fell around -0.8%.

On the macro data front, UK’s retail sales surprisingly dropped -0.3% mom in November, following a +0.6% increase a month ago. This was the first monthly decline in 6 months and suggested economic recovery in the country remained choppy.

Later today, Canada will report November’s CPI which probably rose +0.3% and +0.8% on monthly and yearly respectively. Over +5% increase in gasoline price in November, as well as potential increase in auto sales price, should have pushed price levels in the nation.

In the US, initial jobless claims probably declined to 466K from 474K in the previous week. Moreover, leading indicators are anticipated to have risen +0.7% in November after an increase of +0.3% a month ago.

Source: oil n gold

Get Your Free Report: How to Use Bar Patterns to Spot Trade Setups

Greetings reader,

Our friends at Elliott Wave International, the world’s largest market forecasting firm, have just updated their free report, How to Use Bar Patterns to Spot Trade Setups. With thousands of downloads, “Bar Patterns” has always been a huge hit with traders. But now it’s been packed with even more ways you can use common bar patterns to spot high-probability trading opportunities: 30 charts across 15 pages!

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Warmest regards,

Alan

What Could Lift the Dollar?

The most recent employment data in the U.S. came in significantly better than what was expected. And the financial markets reacted in a different way this time. Interest rates went screaming higher, the stock market surged, gold fell and the dollar shot up.

In a normal environment a stronger dollar following better U.S. economic data sounds perfectly reasonable, but in the current “risk-centric” environment good news has been bad news for the dollar. That’s because it has emboldened risk appetite, which has translated into investors selling dollars in exchange for higher yielding/higher risk currencies.

This time the improving data gave investors the idea that the Fed could begin reversing its zero interest rate policy sooner. That got the dollar moving higher. And that got the wheels turning for a bounce in the weak dollar trend.

The dollar has continued to show strength following that turn in sentiment, but the prospects of a sooner move on rates has now been dismissed. The knee-jerk reaction in the markets that priced in an earlier hike in rates was subsequently fully reversed.

What is now underpinning dollar strength is a shift in market focus toward some of the headwinds facing the global economic environment. That’s swinging the risk appetite pendulum back toward safety, which is positive for the dollar.

So what can keep this momentum going in the dollar?

Answer: Growing risks to the global economy.

Let’s take a look at some of the specific catalysts that could fuel more demand for dollars …

Catalyst #1: Rising Prospects of a Sovereign Debt Crisis

First it was Dubai that stoked fear in the financial markets over the Thanksgiving Day holiday. Now, Greece has been called on the carpet over concerns that the nation will struggle to meet debt commitments. Fitch downgraded Greece to just three notches above the lowest investment grade status.

Debt problems in a global crisis have the ability to be contagious. And that can destroy investor confidence in the capital markets of such countries, and in the global economy. And when confidence wanes, capital flees. That’s a recipe for falling dominoes.

First it was Dubai that rattled the markets. Now Greece’s debt has investors worried.

Catalyst #2: Problems for the Euro

The recent downgrade in Greece turns the market focus back to the problems that exist in the Eurozone, and that’s putting downward pressure on the euro … which means upward pressure on the dollar.

The European Union’s growth and stability pact limits all member countries to a budget deficit of 3 percent of GDP. But Greece is running a budget deficit of 12.7 percent of GDP, over four times the limit.

In fact, on average, the 16 member states of the single currency are running a budget deficit more than twice the 3 percent limit!

So the uneven performance in Europe will likely call into question the viability of the euro currency again. Another bout of speculation of a break-up of the euro is hugely dollar positive.

Catalyst #3: Growing Uncertainty Surrounding Economic Recovery

Now that sovereign debt problems are surfacing, investors are getting concerned about the sustainability of this recovery. After all, the unprecedented global fiscal and monetary response was an experiment. The outcome is unknown. And the underlying problems related to the crisis still exist: Bad debt, reduced wealth and tight credit to name a few.

Moreover, when you answer a liquidity crisis with more liquidity, you’re bound to create more bubbles. While ground zero for the credit crisis was the U.S. housing market, new bubbles in real estate are developing in the areas that were relative outperformers in the downturn (such as China, India and Canada).

In Shanghai, housing prices were up 40 percent in October from the same period a year earlier. And in a story about the Canadian housing market this week, Bloomberg quoted a real estate agent as saying, “Where else in the world do you have agents lining up overnight to buy a condominium?”

To someone here in the U.S., that sounds familiar.

Catalyst #4: Protectionism

We’ve already seen evidence of restrictions on global trade and capital flows. Considering protectionism was a key accomplice in fueling the Great Depression, this activity represents a major threat to global economic recovery.

After the lessons from the Great Depression, the leaders from the top 20 countries of the world vowed to avoid protectionist activity. But actions from the G-20 countries are speaking louder than words. New trade restrictions have been erected by most of them since the pledge was made.

Trade restrictions could derail global economic recovery.

Perhaps the biggest factor in the protectionism threat is China’s currency policy. Even after recent tour stops in China by U.S. President Obama and European Central Bank President Jean-Claude Trichet to lobby for a stronger yuan, the Chinese have remained steadfast on keeping their currency weak. As this issue with China’s currency gains in intensity, expect protectionist acts to rise in retaliation. And expect collateral economic and political damage.

Bottom line: If sovereign debt problems and the prospects of a double dip grow, you can expect investors to pull in the reins on risk. And this time, they might not be as eager to turn the risk appetite switch back on. That could give the buck a strong lift … a lift that might last longer and rise further than many expect.

Regards,

Bryan Rich

What’s REALLY Behind the Record Rise, Bull or Bubble?

By Nico Isaac

When prices in a financial market go from Sea Level to Outer Space in a relatively brief time, two scenarios are at work — and they both start with the letters “B-U.”

When a precious metal goes from being a popular long-term investment of buy-and-holders to the quick, get-away “vehicle” of day-traders, two scenarios are at work — and they both start with letters “B-U.”

And when the majority of mainstream pundits see a “new paradigm” in which prices continue to rise indefinitely, two scenarios are at work – and, you guessed it, they both start with the letters “B-U.”

Enter: the recent Gold Rush of 2009, when ALL of the above conditions apply. Everyone from hedge funds to housewives now hustle to hitch their asset wagon to the rising gold star. Which begs this question: Which of the possible two scenarios are at work: B-U-ll
— Or B-U-bble?

Here’s the difference: A genuine bull market is driven by a self-sustaining internal dynamic that’s reflected by a host of technical indicators. A Bubble, on the other hand, is the result of untenable psychology that could shift at any moment and bring prices plummeting down.

For long-term forecasts and more in-depth, historical analysis for precious metals, download Prechter’s FREE 40-page eBook on Gold and Silver.

It goes without saying into which category the mainstream experts put Gold: namely, a new bull market that has years, if not decades more to soar. “Gold Will Hit $2,000 an ounce,” reads an October 8 Market Watch. And — “Gold Has More Upside… The metal’s bull run is just getting started,” adds a same day Barron’s.

I found hundreds of news items which agree about the long-term potential for gold’s uptrend. But not a single one could tell me why the rally would continue, other than because the experts say so.
To know whether a diamond is real, it must cut glass. And, to know whether the bull market in gold is real, it must encompass at least one of these FOUR traits:

1. A surge in demand that outpaces supply
2. A falling stock market, which raises the “safe haven” appeal of precious metals.
3. A real (not imagined) threat of inflation
4. An increase in value relative to major foreign currencies

Right now, the Gold market can NOT check off a single one of these items. Case in point:

Supply: Demand for gold from jewelry makers – which comprises 60%-70% of the market – has plummeted to its lowest level in 20 years.

“Safe haven” appeal: From its March 2009 bottom, the U.S. stock market has soared 50% right alongside rallying gold prices.

Inflation: As the October 2009 Elliott Wave Financial Forecast (EWFF) notes: An increase in money supply is only inflationary if it is used to RAISE the total amount of credit. This is NOT happening, as both bank credit and consumer credit levels are contracting for the first time since World War II.

A gold rally in other currencies: Again, the October 2009 EWFF presents the following close-up of Spot Gold prices VERSUS Gold denominated in foreign currencies such as the Canadian dollar, the Australian dollar, the euro, franc, pound, and yen since 2007.

The major non-confirmation between these two markets is clear, as is the overlying message: IF demand for gold truly outweighed supply, then its value as measured in other currencies would increase.

The rise in gold is primarily the result of speculation and a falling U.S. dollar. These are exactly the “untenable” forces that contribute to a Bubble, not a genuine Bull market. The difference is only a matter of time.
For long-term forecasts and more in-depth, historical analysis for precious metals, download Prechter’s FREE 40-page eBook on Gold and Silver.

Please Help The Families Of Five Slain Police Officers

Take a good look at these faces folks as they are genuine heroes who dedicated their lives to serve and protect us all. Sergeant Mark Renninger and Officers Ronald Owens, Tina Griswold, and Greg Richards were all loyal and dedicated servants of the public good at the Lakewood Police Department but sadly their lives were needlessly and brutally snuffed out by a cold-blooded and savage coward. I pray that justice is done upon him swiftly and with fitting measure to the crime he committed. For what it’s worth I offer my sincere condolences to the families of these fine officers.

A good friend of mine and member of the law enforcement community who also happens to be a member of a forum I run has started a awareness campaign asking good citizens such as yourself to kindly support the families of the slain police officers. So I ask you dear reader to read his message below and consider making a donation to support these families.

– quote –

As some of you may know I am in law enforcement and it really pains and saddens me to have to write about this. Our community has just suffered one of the biggest tragedies my state has ever endured. Four Lakewood, WA police officers where shot and killed at a coffee shop right before their shift began earlier this week. And just three weeks before that a Seattle police officer was shot and killed. This is five families lives that have been shattered and each police officer had children. These families need our help and support. If any of you can donate even the smallest amount it will go a long way to help these families. The funeral ceremonies for the four officers will be on the 8th of December.

Below are a few links to check out to read the whole story.

http://lpig.us/?zone=/unionactive/view_page.cfm&page=Lakewood20Officers20Slain20by20a20coward

http://police.cityoflakewood.us/index.php?option=com_content&view=article&id=77:city-of-lakewood-identifies-slain-police-officers&catid=2:hot-topics&Itemid=59

To make a donation please click on this link and then please click on the donation link. It will then bring you to a PayPal donation page.

http://lpig.us/index.cfm

http://www.seattle.gov/police/

If you have any questions please PM or email me.

Thank you for all your support.

– end quote –

You can get in touch with my law enforcement friend by visiting the following forum thread:

http://www.forexnirvana.com/f4/slain-police-officers-1279/

Once again please consider donating.

Thank you for your attention!

Sincerely,
Alan

Grab the forex system that stood up to the live market

I attended the High Velocity Market Master webinar yesterday and the
results, the strategy, and the simplicity of the system had me intrigued.

Not only were the results impressive, but I can’t get over the level of
support the HVMM guys provide. They truly seem to be dedicated to your
success which is vital in this business. They definitely had my attention
(and I’m sure they did yours)!

Often it’s the support not just the system that will make the difference
between mastering the market and dwindling your account. With all of the
guidance, and the training bootcamp they’re offering, I would bet you can
quickly be whipped into shape to hit the markets with everything you’ve
got!

Hear from their support team:
http://www.netpicks.com/cmd.php?af=1004071&u=http://www.highvelocitymarketmaster.com/blog/

Along with the dedicated, ONGOING HVMM Support, the package comes with
everything you need to transform your trading career…

*Lifetime High Velocity Market Master Indicator Suite that you’ll
immediately be applying to your charts. These indicators make the HVMM tick
and you’ll use the exact same suite of indicators across all markets and
timeframes for the ultimate in simplicity.

*5 Full Length In-Depth HVMM Training CD’s – that will play right in your
computer, so you can watch and learn The High Velocity Market Master
strategy step by step, at your own pace.

*HVMM Manual and Guide to Markets & Timeframes – these will let you see the
key trade set-ups in detail.

*FR(EE) 8-Week HVMM Training BootCamp! Starting the first week of January
2010 (Wednesday the 6th, that is) they’re hosting an 8-week intensive HVMM
Training BootCamp that’ll whip you into shape regardless of experience
level.

*PLUS access to the exclusive Owner’s Club where you’ll have admittance to
live training rooms, be able to see trade walk-throughs, get additional
video training, receive market condition reports, have access to all system
upgrades, and more!

The way I see it, this system will give you what you need to be up and
running in no time, plus help cut your trading time down significantly.
It’s about building your account by getting in, getting out, and getting
done.

You only have a small window of opportunity to grab the system. Providing a
high level of support means the guys over at the HVMM headquarters need to
limit the number of new subscribers to ensure they have the resources to
handle the initial batch (an intelligent decision, in my opinion). Also you
still have a chance to get the bonuses!

Get your HVMM + BONUSES before they’re gone:
http://www.netpicks.com/cmd.php?af=1004071&u=http://www.highvelocitymarketmaster.com/

Seize this chance to start living your trading transformation story.

Good Trading!

Drives your Forex risk to ZERO (webinar)

No matter how you trade Forex, you probably don’t want to
place another trade until you “sneak in” to this special
Forex Income Engine 2.0 students-only “Kickoff Webinar”…

Keep reading, because this is your ONE AND ONLY official
invite to a private webinar being held tomorrow, Thursday,
December 10th at 4pm Eastern by Bill Poulos, developer of
the Forex Income Engine 2.0 home study course that’s already
been snapped up by over 500 traders in just the past few
days.

He’s holding this webinar to kick things off for his new
Forex Income Engine 2.0 students, and he extended this
private invite to me so you can get an insider’s look at
what’s going on.

Specifically, he’ll be yanking some of the best content
straight out of his Forex Income Engine 2.0 course and
revealing it live on the webinar to kick things off for his
new students, including:

* The 2 critical mistakes most Forex traders make, & how to
avoid them every time you trade…

* How to create an “infinite” reward/risk ratio when you
trade Forex, regardless of what pair or timeframe you
trade…

* Why most traders actually LOSE money when they try to
capture a market’s entire move, and how you can turn this
into your advantage when you know the exact part of a market
move you should be going after…

PLUS…

* Bill’s going to give away ANOTHER copy of his course to
one lucky trader ON THE HOUSE…

All you need to do to get a copy is SHOW UP, but you MUST be
present to win. The lucky trader will be chosen “live” and
arrangements for shipping the course will be made privately
with that person during the webinar.

(Plus, Bill has a few surprises you’ve NEVER seen before
that will be revealed on the webinar that you will NOT want
to miss.)

Register HERE:

http://myflexibleforex.com/y/?i=773362&u=2&l=f94

As of this writing, Bill says he only has about 415 copies
of his course left of the 955 copies he initially planned to
distribute.

That means they’ll probably sell out any day now.

To claim your virtual seat for this webinar, go ahead and
register here NOW:

http://www.myflexibleforex.com/y/?i=773362&u=2&l=f94

It’s a near certainty that this webinar WILL be filled to
its technical limit, so after you register, plan on showing
up early to make sure you get in, because…

-once the room fills up, you will be LOCKED OUT.

Again, it’s all happening TOMORROW, Thursday, December 10th,
at 4pm Eastern (New York time).

See you then.

Good Trading,
Alan

The Forex Income Engine 2.0 is LIVE

Dear trader,

(Be sure to read this short note because this
post gives you access to a proven Forex program
that ‘flip flops’ the approach most people take…

…& shows you how select groups of traders can
get in on the huge volatility in the Forex markets
RIGHT NOW that’s being created by the problems in
the other global markets)

Here’s what’s up…

In the past week, over 30,000 traders got exclusive access to
35+ trader Bill Poulos’s complimentary 3-part “Flexible Forex”
2.0 training videos…

-these videos revealed his recent Forex discovery that shows you
how to manage risk first when placing a trade, & THEN look for a
profit as quickly as possible (and as many times a day as
possible) all according to YOUR schedule.

So if you have ANY interest in discovering how to finally become
an INDEPENDENT MASTER trader in the Forex markets, where you
always know what to do, no matter what happens… keep reading &
GET READY…

http://www.flexiblefx.com/y/?i=773362&u=2&l=f92

———————————
A TURNING POINT IN FOREX TRADING?
———————————

Bill was planning on re-releasing his step-by-step course in
January to kick off the new year, but due to extreme interest
from the Forex trading community, he put all his other projects
on hold in order to release it this week.

Based on the early feedback he’s been receiving from those lucky
enough to see a preview copy, it looks like this may be a
turning point in Forex trading.

Why?

Because Bill does everything in his power to give you the “keys
to the kingdom” where you understand EXACTLY what to do when you
go to place a trade. There’s never any second guessing or
wondering.

CAUTION: This is NOT for “systems junkies”, or individuals who
like to let others make their trading decisions.

==> But it IS for traders who like to have FULL CONTROL of their
destiny in the markets.

——————
IT’S ALL ABOUT YOU
——————

Bill designed this new method with YOU & YOUR schedule in
mind. It’s all about giving you the flexibility you need in your
busy day to trade in as little as 20 minutes… or even all day
long if that’s what you have time for…

-but he’s only planning on releasing 955 courses in the next
week that show you how to find trade setups quickly, protect
your position with a sort of “risk shield”, & then look for
profit as fast as possible so you can move on to the next trade.

So if you want to…

* Triple your profit potential by simultaneously looking at the
short, intermediate, & longer-term trends & then automatically
using the dominant trend to virtually ensure your edge & give
you the best chance for a successful trade…

* Get started quickly & place your first trade with as little
as a $500 trading account when you use “mini lots”…

* Trade in as little as 20 minutes, or all day long, by
customizing your daily trading plan with the timeframes of your
choice to fit your changing schedule…

* Enjoy frequent & fast trades from start to finish by quickly
identifying only the highest-probability, lowest-risk trades…

* Practically “rub out” account-crippling losses by using simple
yet profoundly powerful risk management rules. It’s like having
a Forex “Risk Shield” so you’re protected at all times…

* Become an Independent Master Trader & stop relying on
so-called gurus, black box systems, or other gimmicks. Be
totally confident when you know what to do every time, no matter
what happens in the markets…

…then check out the open letter Bill wrote for you that
describes all the details:

http://www.flexiblefx.com/y/?i=773362&u=2&l=f92

I hope you’re as excited as I am about this.

Good Trading,
Alan

p.s. I’ve seen this developer’s trading courses disappear in a
matter of days in the past, & it’s a near certainty it will
happen again… so IF YOU VALUE YOUR TIME, I really urge you to
check out his letter here, & then ask yourself how what he has
to say stacks up against how YOU currently trade:

http://www.flexiblefx.com/y/?i=773362&u=2&l=f92

p.p.s. On top of everything else, when you join Bill this week
as his student, he’s going to give you 8 weeks of COMPLIMENTARY
semi-private COACHING to make sure you “get it”. I’ve never seen
anyone do that before, and I’m not sure if we’ll ever see it
again, so be sure to check it out NOW:

http://www.flexiblefx.com/y/?i=773362&u=2&l=f92

Energy Prices May Slide Further After Consolidation

Slump in energy prices stabilizes in European session. WTI crude oil recovers to 74 after plunging to as low as 73.53 earlier in the day. Heating oil and RBOB gasoline also edge higher after falling for 4 days. However, as demand outlook remains dismal and official view on US’ economic development is far from optimistic, energy prices may weaken further in the near-term.

From recent comments by OPEC members, we are almost certain that the organization controlling the world’s 40% oil production will maintain output quota unchanged at the meeting on December 22. While the member countries said that they are satisfied with current oil price and do not believe adjustment in oil production is required, we notice that the overall compliance has deteriorated further. A survey showed that total production by OPEC – 11 (excluding Iraq) exceeded quota by an aggregate 1.66M bpd in November. In October, total production was 1.5M bpd above quota. While this is predictable as most countries try to benefit from the rally in oil price, investors should beware that the increase in production may pervert the fundamentals of energy market slowly. In fact, non-OPEC production growth has been improving. It’s expected that rise in non-OPEC supply will be enough to meet the rising oil demand next year. Therefore, the need for OPEC production growth will drop.

On the other hand, gold’s rebound after sliding to 1136.1 Monday suggests strong demand for the yellow metal. Gold has been treated as a good hedge against inflation and depreciation in USD. Central banks’ (including India, Sri Lanka and Mauritius) purchase from the IMF in November and reduced gold sales from European central banks confirmed this notion. However, the Bank of Korea does not agree with it. Lee Eung Baek, head of the Reserve Management Department, said that ‘there’s an illusion in gold…We follow the big trend. Gold isn’t the trend. Out of more than 200 nations, how many countries have bought bullion?’, indicating the central bank does not find gold investment attractive.

Undoubtedly, weakness in commodity prices has been driven by strong rebound in USD. The greenback’s strength has been driven by speculations of an earlier rate hike by the Fed and then by increase in risk aversion as the Fed Chairman Ben Bernanke stated that the US’ economy will face significant headwinds. USD rises against all major currencies except for Japanese yen which is also treated as ’safe-haven’.

Advance in Japanese yen today is also spurred by the new set of stimulus policy announced by the government. The new 7.2 trillion yen spending package includes 3.5 trillion yen for the region, 600B yen for employment and 800B yen for the environment.

At today’s BOC meeting, policymakers will most probably announce to keep its policy rate at 0.25%. Recovery has been seen in Canada since the last meeting. Unemployment rate surprisingly dropped to 8.5% with 79.1K increase in payrolls in November. However, GDP growth in 3Q09 missed market expectation. It’s unlikely that the central bank will deliver a more hawkish view before recovery proves to be self-sustainable. Therefore, we expected the BOC will reiterate that ‘conditional on the outlook for inflation, the target overnight rate can be expected to remain at its current level until the end of the second quarter of 2010 in order to achieve the inflation target’.