Minutes FOMC & interesting informations (very important(!))

hello,

One of the interesting and often ignored by the market information is a change in property prices in Chinese cities. In October, the price dynamics in the primary market amounted to 12.4% y/y, while in the secondary market 16.4% (!), In both cases establishing records. It must be added that such a high price increase can not be explained by the base effect (it is even negative), which only underlines how unhealthy situation on the property market, which is responsible for about 15% of China's GDP (!). It is worth mentioning that one of the statements the party plenum was to accelerate the implementation of the property tax, which can lead to the bursting of the "bubble", and even a hard landing of the Chinese economy (in extreme circumstances of exceptional to the global recession). Therefore, the joy of the markets after the announcement of reforms, including setting up further the possibility of borrowing by local governments (officially, unofficially for a long time because they do) and loosening the one-child policy, it seems strongly myopic.

Night weakening of the dollar was caused statement of Ben Bernanke, who stated that:

◦ Fed is obliged to maintain a highly accommodative monetary policy as long as you need it.
◦ Interest rates may still remain around zero, even after the QE is completed. Perhaps even after the unemployment rate falls below 6.5%.
◦ The rate of decrease QE is not strictly defined. Everything will depend on the Fed's views on the economic situation in the U.S..

Very dovish comments ...

Economic data:

Core CPI in U.S. m/m actual: 0.1%; expect: 0.1%; previous: 0.1%

CPI in U.S. y/y actual: 1.0%; expect: 1.0%; previous: 1.2%

The ECB said today a very strong voice that can consider -0.1% rate of deposit if you need further loosening! <more info>

Bullard (FED) on Bloomberg TV: cutting QE3 "on the table" already at the next meeting:
◦ The economy looks much better than in recent years
◦ The only question is whether the growth rate as the last is maintainable in the long term
◦ to reduce the chance of QE3 next month (!)
◦ You can not compare the current situation in the markets for bubbles from the 90's and 2000

◦ Europe will come completely out of the recession in 2014
◦ I see a chance to grow more than 3% in the U.S. next year
◦ Lower limit of the inflation rate of 1.5% is justified
◦ Data for October very good
◦ I am not sure whether the Fed will reduce QE3 in December
◦ The increase in the stock markets are quite strong this year :)

Bloomberg: 5% of respondents expected to cut QE3 in December!

Reuters: Fed QE3 in March will reduce by $ 10 billion

Minutes FOMC: <more info>

Many members said that if the the data will be very good, QE will be limited in the coming months, some members pointed out that markets need to prepare for it in speeches.

Was a discussion about whether to enter the statement to say that the shutdown could mean problems for the recovery, but decided not to in order not to increase the problem.

Inflation consistently below 2% would be detrimental to the recovery in the U.S.

The Committee considered various options to strengthen forward guidance - but on a theoretical level - Lowering the deposit rate, the additional terms of the unemployment rate reached 6.5%, the lower limit for inflation etc.;

comments are welcome (always)

regards,
oscarjp

insider trading - where is the line of propriety ? part 3

hello,

"The Wall Street Journal", analyzing forecasts for U.S. companies from the public market, observed 1468 cases since 2005 in which the company published a so-called. growth forecasts, announcing that their results will be better than previously expected, and later within 120 days decreased the same forecast. According the informations from SEC (Securities and Exchange Commission is U.S.) show that in 755 of these cases the CEO or board members of these companies sell shares between increasing and lowering of forecasts, ie, favorable to the sale.

In 2389 insiders who sold shares between changes in forecasts, about 74 percent would get less money for them if they waited for the transaction to lower forecasts. Stock prices lost by an average of 10.8 percent between the date of sale and the date of publication lowering forecasts.

According to the SEC, unfortunately there is have no methods, on the basis of these data difficult to determine if the seller knew before the transaction of upcoming bad information :)

regards,

oscarjp

my targets for all

hello,

For a long time I wondered whether to publish the following entry. The reasons were many but I do not want to make them. Below I present charts of the most liquid Indexes on the world, inter alia: SP500, DAX, FTSE100. The main objective of all these charts show, was to raise awareness my reader that the trend is known to all Indexes and we should prepare to the correction.

The graphs showed possible according to my analysis of the levels where the market may start correction. Of course, it is impossible that all the markets began to fall just as I showed. Most important is the SP500 and DAX Index the others Indexes are correlated with these both. In the table at the bottom, also presented the percentage Indexes still need to achieve your targets.

I did not take into account any incoming economic data in the coming days. This is a purely technical analysis.

chart 1. fSP500 Index

chart 2. fFTSE100 Index

chart 3. fCAC40 Index

chart 4. fDAX30 Index

chart 5. fWIG20 Index

chart 6. fDJIA Index

table 1. Rate of return for medium and high targets

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.

12. Summary of the trades (November 1st, 2013 - November 15th, 2013)

hello,

In the past two weeks I have focused much attention on the forex market and specifically on EUR/USD but not only, special request my readers I have published an analysis of pair USD/PLN where I decided to invest a small trade. The trade was closed on Friday evening before the end of the week, realizing a profit.

Summary of trades

Below you will find links refer to my earlier posts with my recommendations.

trade 1

trade 2 and 3

Regrading EUR/USD market, last days showed strengthening of the euro against the U.S. dollar. It is worth noting that on Thursday and Friday, especially on Friday, 8th November at the daily chart, it is clear a very large volume of futures contracts. I marked it in red on the chart 1 and 2. It seems like a big commitment of any investment bank or hedge fund. Thus, levels of 3355 will be very difficult to overcome. But do not think that's impossible.

chart 1. EUR/USD D1, 2013-11-17

chart 2. EUR/USD H1, 2013-11-17

Regarding my recommendation, namely, stop loss was set at the level of 3570. In the case of re-testing 3300 levels will be gradually lowered the stop loss and the next level is 3500.

If while reading my posts you have any questions or would like to share your opinion, you are cordially invited to write comments

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.

United Kingdom in the spotlight

hello again,

Two days ago we show inflation data from several European economies including the UK. CPI inflation in the UK in October was 2.2%, against expectations of 2.5%. If the downward trend is maintained, the Bank of England will be in a very comfortable situation. Data from the British economy recently significantly pierced expectations and further declining inflationary pressures.

Publications from the UK in recent times positively surprised after the period in which it was seen chilling moods, the British economy is behaving in this respect similar to the U.S.. Industrial PMI, which we show last week was 56 points. and is still at the highest level of 2.5 years. Even earlier, the reading service PMI pointed to 62.5 points. that is, the most in the past 16 years.

This is very positive news for the British economy because the services in this country are responsible for 3/4 of the gross domestic product. If we look at the employment sub-index was 56.2, and he also was the best of 16 years. This entry in the fourth quarter suggests that the readings from the UK again can start positively surprise. Moreover, this set of data means that the improvement in the labor market at the end of the year should be strong and cautious assumptions BoE to decline in the unemployment rate are becoming less relevant. The BoE forecast a three quarter unemployment rate of 7.9% + / - 0.1 points. percent. However, in the last three months of unemployment was 7.7%. MPC forecast that the unemployment rate falls below 7% until mid-2016. (against a decline in unemployment below 7% BoE will not lower interest rates).

Current projections of the Bank of England to this day even before the publication of the new.

The inflation projection:

chart 1. CPI inflation projection

Unemployment rate:

chart 2. Unemployment projection

chart 3. Cumulative probability of unemployment

BoE report:

◦ Unemployment may fall below 7% in 3Q 2015.!
◦ The risk of weak GDP growth increases, the risk of persistent high unemployment falls
◦ Inflation in 1q 2015 has come down below 2%
◦ 4q GDP growth in 2013 is projected at 0.9%
◦ unemployment has fallen in recent months, stronger than expected


Carney (BOE):

◦ Increase fastest in 6 years
◦ growth based on consumption and the real estate market, investment and exports remain weak
◦ Inflation can bounce slightly in the coming months, but in the long term will remain permanently low
◦ bank forecasts are conservative
◦ The 7% unemployment rate will not lead to an automatic increase in interest (something like FED)


New projections BoE from 2013-11-13

The inflation projection:

chart 4. new CPI inflation projection

Unemployment rate:

chart 5. actualized unemployment projection

chart 6. new cumulative probability of unemployment

BoE projections have been revised in line with expectations. The unemployment rate is expected to fall below the earlier 7%. In the August report, MPC assumed decline in the unemployment rate below the target in 2016, the new projection unemployment is likely to reach the target level in the 3k 2015. This implies that the central bank of England may raise interest rates sooner than previously had founded, and this implies the growth of quotations of the British pound.

Were also reduced expectations for CPI inflation to be in the quarters lower than previously assumed. Mark Carney sees the greatest threat to the growth of UK GDP.

The Bank of England inflation report said in part that he was too pessimistic relative to the economy, especially the labor market. Pointing to a fairly significant probability of reducing the unemployment rate to 7% next year, given the market's suggestion that theoretically, it is possible to increase interest rates in 2014.

The market has already priced it anyway - the market is currently discounting almost three interest rate increase by the end of 2015, what's interesting is, in principle, has not changed. Projection, along with better data prevented only reduce speculation about increases to a lot of lower inflation (as of yesterday, inflation is 2.2%, the market expected 2.5%).

Does this mean that the Bank of England agrees with the expectations of the market? Not necessarily. President Carney insisted yesterday that the achievement of the unemployment rate of 7% does not necessarily mean increases. Therefore, a further increase in FRA rates, at least to a significant degree, it does not seem justified at this moment.

regards,
oscarjp

EUR/USD & USD/PLN current technical analysis - short update

hello,

In reference to the post from yesterday <EUR/USD & USD/PLN current technical analysis> regarding USD/PLN I decided to replace the "stop los"s to "take profit" by lowering it to levels capable of producing a profit. Such a decision was taken to later in the week to quietly observe the market and possibly lower the take profit increase profits - chart 1

chart 1. USD/PLN M30, 2013-11-13

However, in relation to the EUR/USD, the market reached the level indicated by me. But not without temporary nerve namely the market decided to test the levels of 1.3400  before they reach the 1.3470. At present, trade was closed and I would not expect further strengthening of the euro against the U.S. dollar - chart 2

chart 2. EUR/USD H1, 2013-11-13

In addition, I would like to point out that the SP500 futures are currently at historic high, and this is the last straight before 7 - 9 percent correction. In the next few days I will present a current technical analysis of fSP500 with the possibility to start the correction according my opinion.

trade safe,

oscarjp.chrimatistikos

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.

insider trading - where is the line of propriety ? part 2

As a continuation of the cycle about illegal activities in the financial markets by investment banks and hedge funds, to present information that appeared today on Bloomberg. The most important of these:

Credit Suisse, JPMorgan Chase and other investment banks are considering limiting the ability of their traders to chat electronically with other banks amid a series of investigations of potential manipulation of the foreign exchange market.

No decisions have yet been made, but the banks are considering prohibiting traders from participating in group chats with employees of several rival banks at the same time.

If the restrictions are put into effect, traders are expected to still be able to speak to clients via chat or individual traders at another bank, just not in a group session featuring several banks at once :)

Barclays and Citigroup are also among the banks said to be considering limits.

Regulators in Britain, the United States, Switzerland and Hong Kong have all announced inquiries into possible manipulation of currency trading by traders in London and elsewhere in recent months.

The use of chat rooms by traders at multiple banks are among the areas being scrutinized by regulators in the foreign exchange investigations, in particular a group of traders nicknamed "the Cartel" and "the Bandits Club."

About a dozen traders have been placed on leave pending the outcomes of the currency trading investigations and the vast majority of the largest banks involved in the foreign exchange market have disclosed that they have been contacted by regulators, including Deutsche Bank, Royal Bank of Scotland, HSBC and Goldman Sachs.

None of the traders have been accused of wrongdoing and the investigations are at an early stage.

A lawsuit also was filed by a Massachusetts retirement system late last month in the United States against seven major banks, accusing them of manipulating foreign currency benchmarks.

Several of the banks have been reviewing the use of so-called mult-idealer chats for some time, in part because of concerns raised during a long-running investigation into the manipulation of the London interbank offered rate, or Libor, a global benchmark interest rate.

Barclays, R.B.S., Swiss bank UBS, the Dutch lender Rabobank and British financial firm ICAP have paid more than $3 billion in the Libor scandal in total. (only)

regards,
oscarjp

EUR/USD & USD/PLN current technical analysis

hello,

EUR/USD

With reference to my recommendation from 27th October <link> and continuing my recommendation from 30th October <link> I think they have not time to close the trades, I still have a short positions. As an update, I decided to refresh my technical analysis - chart 1.

chart 1. EUR/USD M30, 2013-11-12

At present, we observe a fairly extensive correction with the 3470-3480 target level. I assume it will be a classic correction of A-B-C. At least for the moment, as indicated waves.

The main factors that have a positive effect on my analysis are:

1. Troika visitors in Greece, still can not come to agreement on the budget for next year. According to Troika budget hole next year will be nearly 3 billion euros, and government officials talk about 500 mln. At stake is the payment of the next tranche of aid of € 1 billion. The situation in Greece is already quite taut and the two parties can not reach a compromise. It is no wonder Greek politicians as the economy of the country and is already in ruins and the public mood is bad. Hence the lack of willingness to further cuts. Greece still has to achieve primary budget surplus, and right now the main problem is the interest regarding a gigantic debt.

2. Despite the very good data from the U.S. on Friday, markets do not hurry when making conclusion. Conclusion relating QE, it seems there is a chance for considerable volatility in recent months of the year. S&P500 or DAX30 all the time looking for highs. All that is needed for such a move is another similar report from the U.S. labor market - this time for November (it will be announced before the December meeting of the Fed). However, at the moment the market does not take into account the cutting QE in December. And that means potentially big changes, of course, down for the stock markets and gold, and further strengthening of the dollar.

3. The situation in Europe also needs a loose monetary policy, including to quite a weird combination of dangerously low inflation, record high unemployment, a strong euro and weak foreign trade statistics. Two months ago, Mario Draghi said in fact that the market valued interest rate increases while the ECB is to ensure that monetary policy will remain unchanged or will be even looser. Markets ignored his words, so the President of the ECB decided to punish them (in practice, the reduction of the reference rate from 0.5% to 0.25% is almost irrelevant - the biggest banks still lend much cheaper). To market a very clear message - the end the bullish euro.

4. And the last most important point. This Thursday Janet Yellen awaits the first major test as the new head of the Fed. Then start the hearing before the Senate Banking Committee. Yellen will have to answer both questions about the Fed's current policies and trends suggest that the Fed will adopt under her controls. This will be the most important speech Yellen in career as the central banker. The eyes of the world will be facing in the direction of the U.S. Senate, and every word Yellen may affect the market. The market will be waiting for the most questions about QE3, and Janet Yellen has long presented an ultra-dovish views. That Yellen was sworn she needs a few votes from the Republican camp. Democrats certainly will support it, the more that before a large group of people from the party blocked the nomination of Larry Summers. The final swearing Yellen should be a formality.

USD/PLN

Specifically at the request of one of my readers, I put the technical analysis of the USD/PLN - chart 2

chart 2. USD/PLN W1, 2013-11-12

Currently, I believe that we are in the implementation of the last fifth wave strengthening of the Polish zloty. I set a stop loss close to recent highs at 3.1550 level - chart 3.

In the near future we should not test the 3.11 - 3.10 level which will allow us to lower the stop loss and continue to quietly observe the behavior of the market.

chart 3. USD/PLN Trade H4, 2013-11-12

If there are any new questions or would like to know more details about the last recommendations and technical analysis. Please don't be shy and feel free to write. Sure I'll answer all your questions.


trade safe,
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.

insider trading - where is the line of propriety ?

article come from Bloomberg

Goldman Sachs Group Inc., JPMorgan Chase & Co. and Bank of America Corp. are among Wall Street firms still catering to SAC Capital Advisors LP after the hedge fund agreed to plead guilty to insider trading charges.

The banks, which also include Morgan Stanley, continue to provide trading and prime-brokerage services to SAC, said people briefed on the matter, who requested anonymity when discussing specific clients. The hedge-fund firm, run by billionaire Steven A. Cohen, agreed yesterday to pay $1.8 billion -- a record penalty for insider trading -- to settle allegations it illicitly reaped hundreds of millions of dollars since 1999.

“The presumption is that if JPMorgan should resign the business, then someone else would do it,” said Roy Smith, a finance professor at New York University’s Stern School of Business and a former Goldman Sachs partner. “These people all say we serve our clients, so if our clients get into trouble, we serve them as long as we can.”

Banks are weighing the potential damage to their reputations and finances if they continue dealing with Stamford, Connecticut-based SAC, one of Wall Street’s largest trading clients. While SAC agreed to stop managing money for outsiders, it may continue investing Cohen’s personal fortune of about $9 billion.

Choosing Carefully

JPMorgan, the largest U.S. lender, said last month it chose to reduce risk by stepping away from certain clients, including 500 foreign banks, and individuals who may be linked to money- laundering. The company, led by Chief Executive Officer Jamie Dimon, 57, is negotiating a $13 billion settlement to end investigations into its mortgage bond-sales.

SAC Capital was granted court approval in August to continue operating until the cases were resolved. Yesterday’s deal is contingent upon the approval of U.S. District Judge Laura Taylor Swain, who’s presiding over the criminal case, and U.S. District Judge Richard Sullivan, who’s overseeing the civil money-laundering case.

Goldman Sachs CEO Lloyd C. Blankfein told CNBC in September that regulators encouraged banks to maintain business relations with SAC because withdrawing that liquidity would “vaporize a firm.” Goldman Sachs gets more than half its revenue from trading.

‘Existential Decision’

“They’ve been indicted,” Blankfein, 59, said in the Sept. 18 interview. “They haven’t been convicted. We are a big liquidity provider, we’re a major prime broker. That would be quite an existential decision for them if all the liquidity providers withdrew liquidity on the basis of an indictment which they’re contesting.”

Spokesmen for Goldman Sachs, JPMorgan and Morgan Stanley, which are all based in New York, as well as Charlotte, North Carolina-based Bank of America declined to comment.

Cohen’s firm takes “responsibility for the handful of men who pleaded guilty and whose conduct gave rise to SAC’s liability,” Jonathan Gasthalter, a spokesman for SAC, said in an e-mailed statement. “The tiny fraction of wrongdoers does not represent the 3,000 honest men and women who have worked at the firm during the past 21 years.”

Gasthalter said SAC has never “encouraged, promoted or tolerated insider trading.”

‘Zero Tolerance’

In July, Manhattan U.S. Attorney Preet Bharara called SAC Capital “a veritable magnet for market cheaters.” The hedge- fund firm had “zero tolerance for low returns but seemingly tremendous tolerance for questionable conduct,” he said.

Cohen, 57, who wasn’t charged in the indictment, faces an administrative action filed by the U.S. Securities and Exchange Commission for allegedly failing to supervise the firm’s activities.

Prosecutors said he encouraged SAC employees to obtain trading information from corporate insiders while ignoring indications that it was illegal.

Yesterday’s agreement provides “no immunity from prosecution for any individual and does not restrict the government from charging any individual for any criminal offense,” the government wrote in the court filing.
A representative of SAC will plead guilty on its behalf in Manhattan federal court as early as Nov. 8, said a person familiar with the matter.

The criminal case is U.S. v. SAC Capital Advisors LP, 13- CR-00541, U.S. District Court for the Southern District of New York (Manhattan). The civil case is U.S. v. SAC Capital Advisors LP, 1:13-cv-5182, U.S. District Court, Southern District of New York (Manhattan).

regards,

oscarjp

Preliminary U.S. GDP up to 2.8% & Non-Farm Employment Change Up +204K

Hello,

Yesterday we met a great data from the U.S. Preliminary GDP for the third quarter was up 2.8%, while economists predicted growth of only 1.9%. The unemployment rate rose as expected from 7.2% to 7.3%.

U.S. GDP for the third quarter: 2.8% Consensus: 1.9% previously: 2.5%

Today, morning the decision by rating agency S&P the long-term rating was downgraded for France to AA from AA +. The rating outlook remains stable.

With such a good labor market data for October (+204 K) and considerable upward revisions in the previous two readings QE3 likely to be limited in December strongly increasing. If we add a very high readings ISM index and the Chicago PMI, unchanged from the September FOMC Statement and the assumption of reading the next payrolls above 180k it can be argued that the consensus market expectations for QE3 restrictions may soon move in March 2014 to December 2013 (!)

The data certainly favor the fact that a consensus could be moved to December. The only question is whether Ben Bernanke has the courage to decide to limit QE3. He is a man who, through his actions brought the market into a period of cheap money. The only question is whether the courage to take the first step towards a return to normality ...

Where did the increase of employment in the United States by as much as +204 thousand:
19 thousand. This increase of employment in factories

44 thousand. This increase of employment in the retail sector (retailers)

54 thousand. an increase of employment in the goods and services used in their free time (leisure industry)

95 thousand. This increase of employment in other sectors of the private

-8 Thousand. This decline of employment in the government sector

Today we have at the end of the European session speech Lockhart, a member of the Fed.
most significant themes:
- If employment growth continues, it should be limited QE3;
- Today's data encourage the reduction of QE3.


nice weekend,
oscarjp