For investors: silver is more profitable than gold

Market Leader informed

Experts suppose that next year the upward tendency at the markets of precious metals will continue.

The price growth will concern both jewelry and industrial metals. In particular, silver may gain in value up to 17%, reaching $30 per troy ounce. This year’s consumer demand has already reached its all-time record, making up 210 million ounces, which is 5% more than last year’s volume. In 2010 jewelers bought 10% more silver while the industry increased its consumption of the precious metal by 18% as compared to 2009.

According to the forecasts made by Masterforex-V analysts, investing in silver may turn out to be more profitable than investing in gold, shares and US treasury bonds. Since the beginning of 2010 the price on silver has gained 46%, reaching the record level of $25 per troy ounce (last seen in 1980) while gold has increased in value by 24%. So we can see that currently silver has more potential to bring profit.

“Silver has always been quite popular with investors around the world”, chief economist at MigBank Howard Friend says. Sometimes silver can yield more than gold.

The expert in precious metals from MigBank reports that next year the volume of investments in silver may exceed the volume of investments in gold, shares and US treasuries. The average price of silver is expected to reach $28. Masterforex-V Academy experts say that gold will probably exceed $30.

At this point silver is in quite a unique position, which may help silver continue its growth in 2011. It is confirmed by the fact that the value of silver (as well as the value of gold) remains positive.

If to consider the situation in terms of average prices, last year a troy ounce of silver cost $14.70 while this year it is $19.94. For 2011 experts predict $28.

The Euro: Long-Term Forecast (Part II)

Market Leader informed

Part II

 I have always been against excessive complication of technical analysis methods.Having tested the majority of existing technical instruments, from the simplest to most refined, I have come to a conclusion over the long years of work that simpler methods most of the time perform better. So, here’s my advice:strive for simplicity.

John J.Murphy

The Euro: Long-Term Forecast (Part I)

Market Leader informed

Part I

A brief background

The Euro (symbol: EUR) is the official currency for 16 Eurozone countries (Austria, Belgium, Germany, Greece, Ireland, Spain, Italy, Cyprus, Luxemburg, Malta, the Netherlands, Portugal, Slovakia, Slovenia, Finland, France). This currency is also by other 9 states, including 7 in Europe. So, the Euro is the single currency for over 320 million Europeans. In December 2006 there was 610 bn. Euros of cash in circulation, the highest figure among currencies in terms of the largest total value of cash in circulation worldwide, even ahead of the US dollar.

Important events for the single European country.

In 1971 US President Richard Nixon ‘suspended’ dollar-for-gold exchange and carried out a few rounds of devaluation: the gold ounce rose to $38 in 1971 and to $42.22 in 1973. The dollar-for-gold exchange was not resumed and, in 1976, the Jamaican Currency System was created to officially cancel the dollar-to-gold peg and maintain the dollar, nevertheless, as the global reserve currency with a floating exchange ratio.

As of 30 September 2006, there was $971,922,146,480 worth of banknotes and coins including $790,556,011,806 in open circulation (i.e. $150 per each person on the planet). Banknotes worth $100, $20 and $10 were most widespread.

ECU (₠) – the currency unit used in the European currency system of the EEC and EU in1979-1998. ECU derives from European Currency Unitand the name of French coins, écu. The symbol, ₠, involves a styled representation of the EU acronym from French Communauté européenne. ECU was exchanged for the Euro at a 1:1 ratio on 1 January 1999.

Google Knows How to Make Money in Stock Markets?

Market Leader informed

American and German scientists made a curious discovery. It turns out that stock market players can get a helping hand in carrying out effective analysis of the current situation... from the world's most popular search engine, Google, or, to be more specific, its statistics for the frequency of inquiries about the names of companies involved.

 

Scientists prove their conclusions by behavior of a major stock market index – S&P500 which includes top five hundred US businesses. According to the research, if this index falls, there is an invariable increase in the number of Internet user inquiries about such a notion as subprime. It involves special, substandard mortgages for people who have certain ‘trouble’ with loans they have already taken out. Interest rates for such loans are a few times higher than the basis rate. Another example that demonstrates the existence of certain interrelations between stock markets and Google – bankruptcy of Lehman Brothers which also affected the index. This was coupled with an increased number of inquiries involving both the bank’s name and the financial crisis overall.

Crude oil prices decline. Is it investors’ pessimism or big-scale players’ games?

Market Leader informed

Yesterday, on Nov 17^th 2010, at NYMEX the price on Light Sweet Crude Oil (the December futures contract) declined down to $80.44 per barrel while at ICE (InterContinental Exchange Futures) Brent Crude Oil lost in value as well. Its price fell down to $83.28 per barrel.

Mass media instantly reacted with a lot of explanations, including investors’ fears that hydrocarbonic fuels might become unclaimed in the future.

According to the Department of studying Masterforex-V trading system , such version is the least probable one if consider the economic growth in Asian states, first of all in China, which makes their demand for oil and gas constantly grow.

On the Weekly chart of the Light Sweet Crude Oil (CL) futures the price is “in the hands” of the price bar with the biggest volume cluster in 1.5 years. We can see a downward rebound from the high of the bar.

New Zealand accelerates its pace of economic growth

Market Leader informed

The New Zealand institute of economic research has recently come to a conclusion that the country’s economy will be developing faster than expected.

Such a conclusion was made basing on the growth of exports and consumer spending. The specialists suppose that next financial year, which is to start on April 1^st 2011, the New Zealand economy will show a 3.1% increase against the predicted 2.8%.

The NZD currency rate keeps growing against USD.

Experts of the Department of studying Masterforex-V trading system suppose that after coming out of the MF sloping channel and breaking through the defensive MF pivot, NZDUSD will start developing a wave of the senior timeframe against the entire bearish wave (0.7972-0.7630) of level Н8-H12. After it is finished there will be the “moment of truth” for the situation, which will indicate the direction of the further movement of NZDUSD.

S&P500: end of bearish wave

Market Leader informed

S&P500 futures has terminated its bearish wave.

The “smart money” still indicates bullish sentiments while watching the uptrend. According to the Department of studying Masterofrex-V trading system, in order to make a full-grown retracement the price needs to go for the “Moment of Truth” and form a FZR*. However it should be kept in mind that any retracement can turn into a trend of the same wave level as the retracement wave itself.

The defensive MF Sloping Channel and MF pivot (1184.93) will indicate the end of the bullish movement and probably a trend reversal.

Speaking about BoE policies

Market Leader informed

According to yesterday’s statistics on GB, the amount of the unemployment claims in October decreased unexpectedly against all the analytic forecasts.

The Bank of England’s policies aimed at priming of economy haven’t been changed. Most MPC* members suppose there is no need to further stimulate the economy.

In the meantime at Forex the British Pound currency rate shows a decline.

If on its way up the price fails to get over the MF pivot and the downward MF SC*, it will start shaping downward wave c (C ), indicating weakness of the British currency.

Otherwise GBPUSD will start the formation of an upward wave, either wave A of the senior timeframe or wave B against the previous bearish movement.

Forthcoming news (GMT):

09:00     EU - Current Account Balance

09:30     GB - Retail Sales, Public Sector Net Borrowing, Major Banks Mortgage Approvals, M4 Money Supply

11:00     GB - CBI Industrial Order Expectations

13:30     US - Jobless claims

15:00     US - Philadelphia Fed Manufacturing Index, Leading Indicators

Romania under crisis: how serious is it for EU and its currency?

Market Leader informed

Prerevolutionary situation in Romania.

That is what mass media around the world are writing about. What is it? Just another “sensation”? Or maybe there is a crisis in one more EU state? Masterforex-V Academy experts suppose that in order to answer the question it is necessary to define the notions, and the answer will become obvious for everyone.

The term “revolutionary situation” was introduced by Vladimir Lenin in 1915 for defining specific conditions which may cause revolution in a certain country. It implies 3 criteria describing “the sharp intensification of needs and activity” of the masses when the common people don’t want and the elite cannot live as earlier any more. The revolutionary situation may grow into a revolution (as in Kyrgyzstan in 2010) or end up with major reforms (for example, revolutionary situation in Russia in 1859-61 ended up in the abolition of serfdom).

Very often political scientists abuse the term. That is why they replaced it with another one… “prerevolutionary situation”, not distinguishing between the really dangerous situations with revolutionary preconditions and the situations where there are no such preconditions (as it was in 2008 in Ireland - no social unrest etc.)

There is no revolutionary situation even in Greece as the second component is missing, i.e. the authorities can handle the disorder while the police and army do not take the side of the demonstrators.

Unfortunately there is a revolutionary situation in Romania, Masterforex-V Academy experts say. The situation in Romania is much worse than in Greece as in Romania the police joined the people in the protests against the president, government and parliament. The current unrest in Romania can be compared to the “revolutionary situation” in Romania in 1989, when the communist regime of Chaushesku was literary wiped out of the political arena.

History of Crises: The First Global Energy Crisis of 1973-1974

Market Leader informed

“The meek shall inherit the earth…But not its mineral rights” Paul Getty

1973 saw the first and severest energy crisis brought about by OPEC countries who reduced oil production. The economic crisis that started in the US in late 1973 significantly surpassed the global economic crisis of 1957-1958 in terms of the number of affected countries, duration, severity and devastation and, in certain aspects, was similar to that of 1929-1933. Besides, over 10 million people were shifted to part-time or laid off by companies. Real income of population fell everywhere. However, the 1973 Oil Crisis boosted oil exports to the West from the Soviet Union and heralded the independence of the USSR and, later, Russia from the oil pipeline and oil dollars.

Confrontation, or Origins of the Energy Crisis

Developed countries’ dependence on oil imports from third world countries who owned 90% of proven oil reserves of the capitalist world was quickly growing after the Second World War. The liquid fuel turned into a major source of energy given the number of technological advantages it had over coal and the policies of the International Petroleum Cartel which used low oil prices to oust coal from the energy consumption balance and didn’t encourage its exploration in developed countries. A serious inconsistency between the balance of reserves and consumption of primary energy carriers in the world occurred in the 1950-60s. There was a spike in the imports of cheap energy resources, primarily oil, from developing nations, and production growth for own energy resources slowed down and, in a number of cases, stopped altogether.

Dominated by US oil monopolies, the International Petroleum Cartel remained prevalent in the world’s oil industry by early 1970s. The Cartel was responsible for about 50% of petroleum production of all capitalist countries in 1972; it controlled 85-90% oil exports from developing countries. The Cartel generated its huge profits from the difference between monopoly-driven low prices that oil was purchased at from developing exporter countries and relatively high petroleum product prices in importing countries.

Herman Van Rompuy: European Union will not survive if…

Market Leader informed

Herman Van Rompuy, European Commission president, said in a speech in Brussels before the euro zone finance ministers meeting that the European Union will not be able to survive if it fails to overcome the crisis that is currently plaguing the area.

“We all have to work together in order to survive with the euro zone, because if we don't survive with the euro zone we will not survive with the European Union…” he said in his speech. “But I'm very confident we will overcome this…” he added.

6 month ago only Greece was the focus of concerns and got over $100B from numerous international financial institutions to solve its debt problem. But last Monday it was Ireland that asked the EU for help. Yet Romania (another member of the EU) is currently facing a major economic and political crisis, which is rapidly turning into a “revolutionary situation”.

Moreover, mass media around the world say that Portugal and Spain experience huge budget deficit as well.

What is going on with the EUR currency rate against the background of the growing concerns about the EU and its problems?

EUR keeps losing its ground, experts from the Department of studying Masterforex-V TS say, for both technical and fundamental reasons:

·         The full-grown downward FZR is broken through (tech reason)

·         Investors keep rapidly taking their profits from EUR deals and change EUR for trading other currencies (fundamental reason).

EURUSD has already completed bullish wave A of Weekly level (1.1864–1.4281).

At the moment the price is shaping correctional wave B. There is a possibility of going for wave C. If the price comes out of the MF sloping channel and breaks through the defensive MF pivot, the correctional wave B will be canceled, which will lead to an increase in the wave level of the movement.

EURUSD and 6ECONT (its futures) continue lowering

Market Leader informed

Yesterday the common European currency updated another local low at 1.3445, showing that the bearish sentiments are still strong enough.

This week’s focus of interest will be the Federal Reserve Chairman Bernanke’s speech. Most analysts expect that Mr. Bernanke will try to justify the FOMC decision to loosen the monetary policy. Probably investors didn’t initially like such actions of the Fed Res, dooming them to failure.

The following news blocks may cause a serious reaction at the markets: at 09.30GMT (GB), including CPI, Retail Price Index and DCLG HPI, and at 13.30GMT (US), including PPI.

The Department of Market Volume Analysis, Masterforex-V Academy, has defined for today, Nov 17^th:

The mid-term trend of EURUSD is downward

The short-term trend of 6ECONT:

At this point the main reference points at the market are 1.3475, which is the level of yesterday’s volume clusters (3.700 lots), and 1.3522. A breakout of one of the levels with settlement above/below it will help to make further trading decisions.

Oil: Market Overview

Market Leader informed

WTI futures at New York Mercantile Exchange, NYMEX, met its movement targets.

Then the price broke protective bullish pivot MF3 (85.36) within 5-th (А(с)) Wave. Currently there are conditions for formation of a В(с) wave that can be followed by a new impulse wave.

Support levels:

84.20 = 50% А(с)
83.15 = 61.8% А(с)
81.90 = 76.4% А(С)
80.55 = protective bullish pivot MF2 from А(с) wave
79.74 = protective bullish pivot for the entire wave structure starting at a point of reference at 70.68

What are S&P500 movement perspectives?

What are S&P500 movement perspectives?

At the end of the last week S&P500 futures reached a new high of the year, however it failed to move further up waiting for the G20 summit decisions.

 

Read more »

Euro is under pressure

Market Leader informed

EURUSD met the beginning of the current trading week with a price decline.

The reason is the same that provoked the downtrend started on Nov 4^th – the bond sales. Moreover, the current situation around EUR is being affected by the Irish crisis. Germany urges Ireland to accept the financial aid for the EU. Today Brussels is hosting a summit, at which the EU finance ministers will be having talks with the Irish government.

Currently at Forex the EUR currency rate is developing a bearish wave of level D1. It will become the reference point for calculating the downward movement objectives.

There is an upward M30 wave. It hasn’t come out of the MF sloping channel yet, so it is too early to consider it a correction against the entire D1 wave.

Today’s news releases:

10:00     EU - ZEW economic expectations index

13:30     USA - PPI

14:00     USA - Net Long-term TIC Flows

14:15     USA - Industrial Production, Capacity Utilization

15:00     USA - NAHB Housing Market Index

6ECONT and EURUSD: downward dynamics

Market Leader informed

Yesterday the common European currency continued following the bearish tendency, updating the low and reaching 1.3560.  

The movement was rather flattish than trend-like as the retracement down to 1.3560 testifies to this.

The market sentiments concerning EUR are slightly negative, which may be caused by the announcement made by the Portuguese Ministry of Finance saying that the country will probably need the EU’s financial aid in the short-term perspective.  The second focus of interest remains Ireland. Even though last week the Irish authorities rejected the offered financial aid, their Portuguese colleagues called Ireland selfish and reminded that in such situations the well-being of all the EU members should be taken into account.

Today’s important economic data will be released at 9.30GMT (GB) and 10.00GMT (EU), including a range of consumer indexes. During the American session the production indexes, which are to be released at 13.30GMT, may influence the market as well.

Price, Time and Volume: Origins and Outcomes

Market Leader informed

I would like to say a couple of words dedicated to the first anniversary of the FUTURES TRADE AND STOCK EXCHANGE Faculty abouthow we came to trade on the basis of stock market volumes and what it all eventually resulted in.

After working for some time on popular platforms that provided detailed information we understood that having a host of data packed into a nice terminal wasn’t quite enough for successful trading and a lot of things either didn’t work in the form available to us or were useless.

In January 2008 we chanced upon information about Market Profile – or МР. We studied it and ultimately came to the conclusion that the MP theory was quite accurate in reflecting market sentiment though a model that it results in has a number of assumptions because of lack of primary information. But this didn’t prevent this ideology from developing at all as such analysis essentially involved medium-term nature of trading with minor inaccuracies changing the picture of the situation very little.

At the same time, our team members (within the Statistics and Money Management Department) of the future FTSE Faculty started more closely looking at terminals that offer data directly from trading floors and seeking ways to modernize the concept. Real volume data were disclosed at that time to a very limited degree, especially in the Post-Soviet area because of the policies of dealing centers that were doing their best to involve as many people as possible with the popular non-exchange terminal, MetaTrader. The very subject of opportunities offered by volumes was in part covered on Western and domestic forums by developers and users of different platforms and terminals.

This is what the price and volume chart looks like in a common terminal (bar chart):

S&P500 overview

Market Leader informed

On Friday S&P500 completed a bullish wave, which is expected to be followed by either an increase in the wave level or a trend reversal.

According to the experts from the Department of studying Masterforex-V trading system , in order to continue the uptrend the price will need to retrace and go further up for the “Moment of Truth” with breaking through the peak at 1224.01. In order to develop the bearish correction into a downtrend the price will need getting over the MF pivot at 1169.02, going for the “Moment of Truth” and forming a downward FZR*.

Resistance levels:

1368,60=76%MN+176.%а(С)D1+300.0%AD1

1344,94=123.6%W1+276.4%AD1+161.8%а(С)D1

1287.81=111.8%AW1+223.6%AD1+123.6%а(С)D1

1232.58=61.8%MN+188.2%AD1

 

Global economy to demand more crude oil

Market Leader informed

The Organization of the Petroleum Exporting Countries (OPEC) has recently released a statistic report, forecasting an increase in the demand for crude oil in 2010-2011. It is expected the in 2010 the growth will reach 1.6% (instead of 1.3% previously expected) while the global consumption volume will reach 85.78 million barrels a day. In 2011 the demand is expected to gain 1.4% more (versus previous 1.2%), up to 86.95 million barrels a day. One of the main reasons for the growth of the demand for crude oil is the increased-beyond-expectation consumption in the developed countries, first of all in the USA and Germany.

As for the demand for the Russian crude oil, in 2010 the OPEC expects the volume to reach 10.1 million barrels a day, which is roughly equal to the volumes produced in Russia.

There are a many different brands of oil, so any oil-producing country exports a few of them. In order to simplify the exports there are some standards of a certain oil brands introduced at the global market. For example, Great Britain produces and exports Brent oil, Norway - Statfjord, Iraq - Kirkuk, USA - Light Sweet, Russia - Urals and Siberian Light. There are countries that produce 2 types of crude oil – light and heavy. For example, in Iran these are Iran Light and Iran Heavy, in Russia - Siberian Light and Urals (the heavy one).

Some “premium” oil brands confuse. For example, the American “standard”, light oil of Western Texas, is both “light” and “sweet”, however it has nothing in common with either the degree of production difficulty or its taste. The attributes only underline that the sulfur content in the oil doesn’t exceed 0.5%. Therefore, such oil is of higher quality and consequently more expensive than Brent or Urals.

What is more confusing is that the OPEC has its own standards, the so-called “basket” of 7 brands, combined proportionally in terms of production volume. 6 of the brands are produced by the OPEC members, the other one – by Mexico. The basket is the guideline which is used by the OPEC to measure the market, determine price ranges or make statements about crude oil prices.

How heavily will Irish sovereign debt influence Euro currency?

Market Leader informed

According to numerous analysts, over the short run the EUR currency rate will be determined by the economies of such countries as Portugal, Spain and mainly Ireland.

Investors’ concerns over Ireland’s economic situation have recently made EUR lose its ground a little bit. Over the last week EUR has declined by 5% against USD. The reason for the panic were rumors that in 2010 the budget deficit could make up 32% of the national GDP. Besides, EUR was pressed by the considerable spread between the Irish treasury bonds and other EU states’ securities. Over the last 3 months the difference between the German and Irish bonds has become 3 times as big.

What were the initial causes of it all?  Masterforex-V Academy defines the following ones:

·         The financial crisis of 2008 turned out to be a real test for the EU, especially for its peripheral countries like Greece, Spain, Portugal and Ireland. Ireland started experiencing serious economic problems a long time ago. According to the statistics, in 2009 the budget deficit was 14.3% of the GDP (even more than in Greece). At the same time the volume of the public debt exceeded the limit of the Stability and Growth Pact (SGP) only by 0.9%, making up 65.55% of the GDP.

·         At the same time in 2009 the GDP level declined 7.1%, however it didn’t undermined the authorities’ confidence in being able to overcome the crisis on their own. Besides, the stabilization of the economic situation around the world in late 2010 was inspiring. That is why in 2010 austerity measures and support of risky banks were chosen the main strategy of fighting the crisis.

 

What measures are planned to save the Irish economy from collapse?

Trading Platform MIG BANK MT4: Special Features and Advantages

Market Leader informed

Previous issues of the magazine dealt with Swiss broker MIG Bank, contests it holds, prizes it has won and many other things. But MIG BANK MT4 trading platform was purposefully ignored. Why? Because a full feature is required to describe MIG Bank’s trading platform in a separate issue of the magazine. This isn’t just words. Essentially, any serious broker is eager to add as many new options that make the trader’s work easier in their platform as possible. As a rule, such trading platforms are already very distant from the standard set of features in MT4. This is why a whole article should be dedicated to this issue to deal at least with major novelties.

One should also remember that, when choosing a broker, the trading platform, the overall user interface and the set of related services offered by the broker play an important or even decisive role for the trader.

What Special Features and Advantages are Available to MIG BANK MT4?

MIG BANK MT4 ensures popular, powerful and user-friendly access to the Forex and the precious metals market. This is a multi-language platform in 23 languages with numerous tables and indicator options, support of automatic trading, trailing stop orders and news from Dow Jones Newswires. The trading platform automatically updates through the net. It means it is constantly upgraded with latest trading instruments.

In addition, if you haven’t decided on a broker you can test the platform for free using a demo account for 90 days and try your hand at the Forex and the precious metals market before investing real money. The 90-day demo trading account gives you enough time and funds to hone your Forex trading skills before you start trading in the real trading account. You’ll be able to fill up your demo account with USD 5,000-5,000,000 and gain direct access to the global foreign exchange market free of any risks and commitments.

The Market in the Light of… Spectral Analysis

Market Leader informed

 Our magazine already covered the subject of spectral analysis in the Forex (Issues Nos. 7-9). Our readers showed an interest in this truly promising approach to technical analysis. Today we are speaking to Head of the Spectral Analysis Department for FOREX and Currency Indexes Vadim Zhunko.

ML: When did you develop your Trading System?

VZh: Hard to say off the top of my head. The trading system is under constant improvement. One can even say it isn’t one system. These are several systems that can be used both together and separately. I can also say that I have been treating market movements like signals in radio engineering ever since I started learning technical analysis. This happened in 2005.

ML: Please tell us more about your TS.

VZh:Let’s not speak about a specific TS. You can have a whole variety of them built in spectral analysis.

I’d rather tell you of the main approach to analysis. I proceed from two premises:

1. There is a limited number of currency pairs in the Forex. There are 176 currency symbols together with metals and special drawing rights in the world. They can generate only 30,800 pairs, i.e. the system is closed. All secrets of pair movement are hidden inside the system.

2. Any complex curve can be broken down into simple harmonic components. This approach is described as SPECTRAL ANALYSIS and is used in all fields of science and engineering. It would be stupid not to use it for market research.

ML:When was the Department opened?