Goldman Sachs prepared its latest recommendations for their clients. June 26, 2013
Key Takeaways:
Clients should use the recent downdraft to build toward their strategic allocation to equities.
While we think that interest rates will gradually rise over the next several years and lead to low Investment Grade Fixed Income returns, a repeat of 1994 is highly unlikely.
We recommend tactically underweighting Investment Grade Fixed Income in favor of the following areas where the risk-return opportunities are much more attractive:
– High Yield Bonds
– US Bank loans
– Emerging Market Local Debt
– Euro Stoxx 50 (currency hedged) – US Bank Equities
but the final decision in which it will invest your money depends only on you :)
good luck in the coming week,
I decided to publish one of my trades on Friday the pair EUR/USD, and describe the main reasons that I did.
One of my most important rules is that they never leave open positions over the weekend. Because many things can happen during those two days.
Therefore, before the close of the markets I closed the much greater part of the transaction, leaving a small amount.
Some details of the transaction.
To all my transactions I using MetaTrader platform.
Trade was opened about 3 pm Frankfurt time. Factors that contributed to the short position was a few. The first one is approaching the important short-term resistance, S&P500 also could not break through the last peaks and began correction and other important I expected a weaker Chicago PMI index reading since last reading was very high.
The reality was brutal and the Chicago PMI index showed a 51.6 point decline in the expected 55.5 points. S&P500 with the EUR/USD began to lose.
These factors contributed to the fact that I opened a short position.
If you have more questions, feel free to put them in the comments or send me a direct email.
chart 1, one of my transaction
I always use a sliding stop loss and at the moment moved him to the level of 3036
JPMorgan's bullish analyst Tom Lee just cranked up his S&P500 forecast:
This has been a better bull market than we expected, particularly in 2013. But this is conforming to history the average gain in the fifth year of a bull market is 19% (implies 1,719). The S&P 500 closed on 5/16 at 1,650, above our original target of 1,580, thus we are raising our YE target to 1,715, based on a 14.7x P/E on our 2014E EPS of $117. We realize investors are apprehensive about making fresh money purchases, but we see the risk/reward as particularly attractive in Technology, Healthcare, and Financials.
Unfortunately, the EUR / USD situation does not look so clearly. A few posts ago I wrote about the arguments talking about the strength of the dollar and now it seems that the whole five wave trend has not yet been fully drawn.
As shown on the chart should now test the levels of 3300-3400. I know it sounds crazy because I recommend the entry of smaller face value, and with a stop loss at 3050.
I repeat, I am not as confident in this analysis completely. Tomorrow is an important macro data that should show better results than expected. We also have the statement Mr. Jack Lew from U.S. Department of the Treasury.
chart 1, EUR/USD, H1, 2013-06-24
best regards,
oscarjp
The information contained in this publication is not intended as an offer or solicitation for the purchase or sale of any financial instrument. Any opinion offered herein reflects oscarjp-chrimatistikos current judgment and may change without notice. Users acknowledge and agree to the fact that, by its very nature, any investment in shares, stock options and similar and assimilated products is characterised by a certain degree of uncertainty and that, consequently, any investment of this nature involves risks for which the user is solely responsible and liable.
Some of you surely have seen a few posts below on concerns to the development of the correction SP500 futures. At the moment we are at the end of the correction and now you can probably expect an upward movement.
This is shown in the graph drawn resistance (pink rectangle, orange rectangle, fibo and waves).
The only obstacle to failure of the analysis is to generate by investors a second wave X or "tapering flag".
In the case of the flag should not have to see new lows. Only the a correction may take longer time. At the moment, I recommend a long position at 1555 levelswith a stop loss points at 1540 points.
Chart 1, SP500 futures, H4, 2013-06-24
best regards,
oscarjp
The information contained in this publication is not intended as an offer or solicitation for the purchase or sale of any financial instrument. Any opinion offered herein reflects oscarjp-chrimatistikos current judgment and may change without notice. Users acknowledge and agree to the fact that, by its very nature, any investment in shares, stock options and similar and assimilated products is characterised by a certain degree of uncertainty and that, consequently, any investment of this nature involves risks for which the user is solely responsible and liable.
Sudden reaction of the market interest rate on Bernanke's announcement confirms the view that markets are highly dependent on cheap money. Certainly, the Fed, seeing the reaction of the markets will work very slowly, but when many investors based their strategies on a low rate, they will want to stay ahead of reality than wait for the official central bank movements. Hence the cycle, even if mild, can be discounted heavily in the coming months. But the direction seems clear - yield up stronger dollar.
After China's central bank has consistently refused to support the banking sector situation began to take the form of panic (effectively multiplying the effect of rising yields in the U.S.). As a result, short-term rates market brushed against 13%, even though the official lending rate is only 6.15%. Such a situation could quickly turn into an avalanche of insolvency, effectively resulting in what the Chinese authorities want to avoid, or hard landing. As a result, PBOC had no choice and to intervene, resulting in interbank rates fell by more than 3 percentage points, exerting a positive influence on the markets in Asia.
Markets have slowly forget about the European crisis, and although on the present moment there are no red flags around Greece is not entirely peaceful. The IMF said that Greece will stop paying aid from next month if the European side does not find the missing 3-4 billion rescue program. The missing amount is not the only problem the Greeks - European central banks refused to roll over Greek debt and hence there is a gap in funding. The European side probably will find a solution for this problem, but in Greek politics, it is not quite easy. The coalition we have more and more power after the ruling party wanted to close the public television, which caused numerous protests. At the moment it does not seem to Greece was to be back in the spotlight of the markets, but a change of sentiment towards EUR/USD factor may be an additional argument against the common currency.
Analyzing the events of the past few days, it would seem that the time came strong dollar. Today also I will try to show the current technical analysis of the EUR/USD
Successful transactions in the coming week.
best regards,
oscarjp
The information contained in this publication is not intended as an offer or solicitation for the purchase or sale of any financial instrument. Any opinion offered herein reflects oscarjp-chrimatistikos current judgment and may change without notice. Users acknowledge and agree to the fact that, by its very nature, any investment in shares, stock options and similar and assimilated products is characterised by a certain degree of uncertainty and that, consequently, any investment of this nature involves risks for which the user is solely responsible and liable.
“People are talking way too much about the Federal Reserve and not enough about China,” he said. “We’ve been saying that the U.S. is the safest place to invest, while China is a crash waiting to happen.”
With 45 minutes left to go, only one thing matters: what does Goldman think (the other issue of whether Jan Hatzius shared a meal with Bill Dudley at the Pound and Pence will remain unknown until the next batch of Dudley daily "minutes" are released in a few months). So for all those scrambling for an edge in a centrally-planned world, here it is, via Goldman's Francesco Garzarelli : "Turning to today’s FOMC announcement and press conference, our US Economics team expect Chairman Bernanke to stick to the same message on ‘tapering’ of bond purchases used in previous pronouncements on the matter, but also emphasize that reducing the expansion of the balance sheet does not imply that the Fed is anywhere close to hiking rates. We think this is broadly what bondholders are also expecting to hear."
who is William C. Dudley:
http://www.newyorkfed.org/aboutthefed/orgchart/dudley.html
Following the release of Bill Dudley's daily schedules from the beginning of 2009, through September 30, 2010, there have been some amusing, if not very surprising, disclosures. Among them: Dudley's penchant to meet with Jamie Dimon, Vik Pandit and, of course, former boss Lloyd Blankfein. Other meetings include Sullivan and Cromwell chairman, and the banking cartel's personal chief attorney H. Rodgin Cohen. Those are to be expected: after all Dudley has to conduct the New York Fed policy exactly in accordance with Wall Street's expectations, and per Wall Street's recommendations. What is a little more surprising is that on February 9, 2009, Bill Dudley hosted a lunch roundtable with hedge fund SAC Capital... Perhaps now Dudley knows almost as much about the chances of various Phase II/III drugs to make it to market as ole' Stevie himself. Additionally, on May 14 Dudley invited Ken Griffin and Adam Cooper from Citadel into his office at about 2:00 pm. One wonders just what the quid pro quo between the New York Fed and Citadel may have been, over and above of the traditional dark pool securities purchasing relationship between the two entities of course. Where it gets a little confusing is why Dudley had to have two informal meetings with the man who singlehandedly determines US fiscal and monetary policy: Goldman's Jan Hatzius, first on March 11, and then, less than a month later, on April 6, both times as the Pound and Pence. And where it gets downright bizarre, is trying to explain why Bill Dudley on June 11, 2009, had to bring over one still unknown Brian Sack, now pervasively known as the head of the Fed's Open Market Operations Committee, to not only walk over to Goldman Sachs for a meet and greet (as opposed to Goldman coming over to the NY Fed), but specifically "introducing Brian Sack to the Goldman FX Committee" between 4:00 and 4:30 PM on that day. Just which of Brian's myriad functions is the one that requires the participation of Goldman's FX team? Last time we checked, purchasing bonds and MBS in POMO operations had little if any impact on Goldman's FX trading flow...
But that's not all... In fact the very first official presentation of Bill Dudley of his market manipulation henchman occurred on April 16, 2009 to none other than Fed Expert Network head Larry Meyer of Macroeconomic Advisors, the same man whose on screen "intelligence" was obliterated by David Einhorn recently, and whose only value added it appears is to sell FOMC inside data to such high paying clients as Pimco, a peculiar artifact that was detailed by Zero Hedge long before 99% of America had even heard of expert network, and the fact that they peddle primarily in inside information.
And just in case anyone wonders if Larry Meyer is worth his monthly retainer in FOMC data, fear not: below are just his meetings with Bill Dudley:
April 16, 2009: telephone call with Larry Meyer (with Brian Sack in tow);
July 31, 2009: telephone call with Larry Meyer
March 3, 2010: telephone call with Larry Meyer
June 30, 2010: telephone call with Larry Meyer
Not bad access for a consultant. Only Lloyd Blankfein had Dudley's ear 5 times according to the official record.
And speaking of those with a hotline to Mr. Dudley, it appears it is not only consultant friendly. Below we summarize the meeting between Mr. Dudley and one Jon Hilsenrath:
February 5, 2009: meeting with Jon Hilsenrath, WSJ, and Nik Deogun, deputy managing director. Great to establish the groundwork early on, eh.
April 8, 2009: meeting with Jon Hilsenrath, WSJ
October 22, 2009: telephone call with Jon Hilsenrath
December 4, 2009: background call with Jon Hilsenrath
March 31, 2010: background meeting with Jon Hilsenrath
May 12, 2010: Hilsenrath chat
June 11, 2010: Phone interview with Jon Hilsenrath
So next time you question Jon's "articles" on the Fed, think twice: chances are he just may have a deeper throat at the Fed than you...
And one last, and modestly disturbing thing... While the AIG near-collapse necessitated nearly daily meetings with with every single Wall Street banker, and often times scrambling far and wide to prevent a systemic collapse, Mr. Dudley's schedule around the time of the flash crash in May 2010, both before and after, had the following curious schedule on May 7th, the "day after" - 9:00 - 10:00 AM : FSB plenary teleconference re: situation in financial markets... followed promptly by a "Disclosure Discussion", which lasted from 10:30 am until 4:30 pm... We are rather curious about just what transpires during these "Disclosure Discussions" - after al the only other time Dudley had one was on May 12, a week after the flash crash between 2:00 and 2:30 pm... promptly followed by one of the abovementioned Hilsenrath chats.
Why do we bring up Hilsenrath's editorial control by the New York Fed? For this reason:
Today, appeared on the market forecast from Deutsche Bank showing 1.2600 on EUR/USD pair to the end of the third quarter of 2013.
regards,
oscarjp
The information contained in this publication is not intended as an offer or solicitation for the purchase or sale of any financial instrument. Any opinion offered herein reflects oscarjp-chrimatistikos current judgment and may change without notice. Users acknowledge and agree to the fact that, by its very nature, any investment in shares, stock options and similar and assimilated products is characterised by a certain degree of uncertainty and that, consequently, any investment of this nature involves risks for which the user is solely responsible and liable.
Before the present statement of my transactions, I just wanted to add that they are not only doing what my transactions during those days. I am a trader and every day make transactions primarily in the currency markets. Unfortunately, due to lack of time in two weeks my statement published only those that are directly related posts appearing on my blog.
Summary of trades
1. I am still bullish on the gold market. At the moment, we are witnessing many negative informations on gold. On the market there is information about a decline to a minimum of $ 1,000. I believe that the market will bounce up.
2. I'm still not closed position, also in the SP500. The post, written a few days ago showed the possible scenarios for this index. So I still think that the correction is not over yet.
3. unfortunately my trade on EUR/USD has been unsuccessful. At the beginning of the generated profit unfortunately decided not to lower the stop loss and consequently received the loss.
Here is the four scenarios for the SP500 Index for the next day. To be honest today's rise in the index was not expected by me.
Observing the current quotation of Index looks like it will never want to go back. He defeated today is very important resistances don't stop even for a moment. Just like yesterday when fell without stopping.
However, I will present a few of my suggestions that I think are likely to be realized.
as always, comments are welcome.
The first scenario represents the end of the correction and the start of a new upward trend. According to me the least probable scenario. While the other three can be very interesting.
chart 1. Scenario 1
in the second scenario presented the classic zigzag (ABC) - X - and ended Triangle
chart 2. Scenario 2
chart 3. Scenario 3
while the third scenario was presented very rarely seen scenario namely in the form of wave B is Triangle - X - plus wave A is Irregular. Very interesting for me.
and finally the last scenario created by me today is very similar to previous scenario but showing X - double three (flat + zigzag)
chart 4. Scenario 4
which scenario to be realized, I do not know. But I think that all scenarios have one point of significance in which everything can be explained. But I already write about it some other time.
regards,
oscarjp
The information contained in this publication is not intended as an offer or solicitation for the purchase or sale of any financial instrument. Any opinion offered herein reflects oscarjp-chrimatistikos current judgment and may change without notice. Users acknowledge and agree to the fact that, by its very nature, any investment in shares, stock options and similar and assimilated products is characterised by a certain degree of uncertainty and that, consequently, any investment of this nature involves risks for which the user is solely responsible and liable.
to make sure, regarding my below analysis of EUR/USD, the similar situation we will find on GBP/USD.
should write about that in recent months the correlation between currency pairs is high.
chart D1, GBP/USD
chart D1, GBP/USD
regards, oscarjp
The information contained in this publication is not intended as an offer or solicitation for the purchase or sale of any financial instrument. Any opinion offered herein reflects oscarjp-chrimatistikos current judgment and may change without notice. Users acknowledge and agree to the fact that, by its very nature, any investment in shares, stock options and similar and assimilated products is characterised by a certain degree of uncertainty and that, consequently, any investment of this nature involves risks for which the user is solely responsible and liable.
already, the beginning of the week should be very interesting to chart the EUR / USD.
there are also some important signals saying that in the next few days should see the strengthening of the dollar.
Introduce only two arguments, if you want to know the latest additional signal, please write me a private message or send email.
first signal: below please find my technical analysis where showed important levels of support.
Now after the statements in the past week by the most important representatives of the largest financial institutions whose decisions have a major impact on the financial market, We watched the final appreciation of the euro against the major currencies of the world.
It was a corrective wave (C) B of major correction which began on
1st
February . At the moment I expect the dollar to strengthen to 2680 level (first stage).
chart 1, technical analysis of EUR/USD
second signal: increase of volume on Friday, while a very small price spread !!!
daily chart 2, high volume
I hope that my insights will be very useful for you. If you would like to receive the analysis of other markets on which I am not writing on my blog. Please sent email to me.
Summarizing:
now I recommend short position, but the durable defeating 3320-3350 levels I will change numeracy of waves.
oscarjp
The information contained in this publication is not intended as an offer or solicitation for the purchase or sale of any financial instrument. Any opinion offered herein reflects oscarjp-chrimatistikos current judgment and may change without notice. Users acknowledge and agree to the fact that, by its very nature, any investment in shares, stock options and similar and assimilated products is characterised by a certain degree of uncertainty and that, consequently, any investment of this nature involves risks for which the user is solely responsible and liable.
As I wrote in a post from May 27, the GBP / USD forecasted adjustment to 5378. As a result, I have booked a profit with 350 pips in 5 business days. At the moment, I recommend observations of the pound with the possibility of a short position.
Someone could ask, why I recommend only observation ?
because the EUR / USD after the publication of 3rd June ISM Manufacturing PMI definitely hereinbelow expectations by market were overcome significant resistance, which may mean that the strengthening of the euro is not over. This may affect the course on a pair GBP / USD.
chart 1, recommendation from 27th May
chart 2, now, only observation
chart 3, additional confirmation ?
but if you take a risk and buy a short position, remember that the market may again in the coming hours or days to test the level of 5378. So, SL is best to set above this level.
Approximately every two weeks I will place my list of transactions that showed on the blog. Along with a short comments about current situation and SL level.
Summary of trades
1. Regarding transaction on the GOLD I recommend raising the SL in order to ensure the minimum profit, for example to 1365, it means 20 $ profit.
2. Correction on the SP500 futures it's not ending yet, so I expect to continue of down trend in the nearest days but according my money management system I change the SL to 1650 points = 23 points profit guaranteed.
3. On the GBP/USD I made a two transactions where the first transaction has been drawn by SL (I did not expect that the market will test their lows) but the second transaction bring me 172 pips of profit at this moment. Now I'll be watching how the situation develops.
If you have any questions or would like to order a special analysis of the market, please leave a trace in your comment.
Next summary for about 2 - 3 weeks. Archived statement will be able to be found in the "Summary" on the right.
