April in Figures

April in Figures

April in Figures

April 29, 2017

In April, ten-year sovereign debt yields fell a little more sharply in the United States than other economies, but the dollar was mixed, falling against the euro, sterling, and Swiss franc but not the yen. The dollar advanced solidly against commodity-sensitive currencies, and West Texas Intermediate crude oil slipped back below the $50 per barrel threshold.

Comex gold, which had appreciated 8.5% during the first quarter of 2017, climbed by a further 1.5% on balance during April. 1Q17 had been a very good period for equities with the notable exception of Japan’s market. Most stock markets continued to rise in April, and this time the Nikkei participated. An exception in April was a 1.6% drop in the Toronto Stock Exchange, which was hit after U.S. President Trump imposed tariffs of up to 24% on a slew of Canadian imports.

10-Yr Yield 03/31/17 04/28/17 Chg vs End-1Q
U.S. 2.39% 2.28% -11 Basis Points
Germany 0.32% 0.31% -1
Japan 0.06% 0.00% -6
U.K. 1.14% 1.08% -6
Canada 1.62% 1.54% -8
Switzerland -0.15% -0.17% -2
3-month rates 03/31/17 04/28/17 Chg v End-Mar
U.S. 1.15% 1.17% +2 Basis Points
Euroland -0.36% -0.36% 0
Japan +0.01% +0.01% 0
U.K. 0.34% 0.32% -2
Swiss -0.73% -0.73% 0
FX 03/31/17 04/28/17 Pct Chg in $
EUR/USD 1.0666 1.0895 -2.1%
USD/JPY 111.32 111.49 +0.2%
USD/CHF 1.0019 0.9946 -0.7%
GBP/USD 1.2532 1.2951 -3.2%
AUD/USD 0.7641 0.7488 +2.0%
NZD/USD 0.7014 0.6866 +2.2%
USD/CAD 1.3300 1.3653 +2.7%
USD/CNY 6.8872 6.8835 +0.1%
Equities 03/31/17 04/28/17 Chg vs End-1Q
S&P 500 2365 2384 +0.8%
Nasdaq 5912 6048 +2.3%
Djia 20663 20941 +1.3%
Dax  12313 12438 +1.0%
Nikkei 18909 19197 +1.5%
Ftse 7323 7204% -1.6%
Canada TSE 15581 15586 0.0%
Swiss SMI 8659 8813 +1.8%
Commodities 03/31/17 04/28/17 Chg v End-Mar
Oil, $ per barrel 50.60 49.33 -2.6%
Gold, $ per ounce 1247.30 1266.1 +1.5%

Copyright Larry Greenberg 2017.  All rights reserved.  No secondary distribution without express permission.

Tags: commodities, foreign exchange, sovereign debt yields, stocks




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Sizeable Stock Market Gains- Trend Following

Sizeable Stock Market Gains- Trend Following

New Highs…Confidence …all of the above on the stock market. Trend followers should buy new highs. High can go higher. The complete opposite of trying to buy the low and be smart. Buying new highs or all time highs takes a different mindset. However, it probably best to take emotions out of the trade and systematize your trading. This is exactly how I trade. Method…no emotion…I am very skeptical of this old age bull market…however I know I do not know the future.

Yesterday, the market spent most of the session in slightly positive territory, doing a good job of holding on to the gains of the last two days. Selling in the last half hour erased those small gains and the major averages closed about unchanged. One day is meaningless…rather noise.Leading stocks were a bit higher on the session with the leaders index gaining .14% on extremely low volume. The index closed in the upper half of its trading range, a good sign. What is a major Red Flag is the complete lack of breadth in this market. We have just a handful of stocks accounting for all the gains in the index. Amazon…Facebook …etc…It reminds me of the Nifty stocks in the 1973 crash. This stocks could not go down. They were the retirement of stock market investors at that time. Pension funds loved them as well as the mutual funds at that time…Then BOOM!

Anything can happen….What I found very interesting was looking at the ProShares Short VIX Short-Term Futures ETF. This is trend following!

Thursday’s Biggest Winners and Losers in the S&P 500

Thursday’s Biggest Winners and Losers in the S&P 500

Source: Thinkstock

April 27, 2017: The S&P 500 closed higher on the day, up 0.06% and 1.44 points to 2,388.88. Separately the DJIA closed up 0.04% on the day at 20,982.90, up approximately 7.81 points.

Overall the market had a relatively flat day, after having an incredible start to the week. In the past few days, broad markets peaked again and hit new all-time highs. In Thursday’s session, oil & gas stocks were hit harder than the rest. There was also some weakness among airline stocks after a couple reported earnings. Investment banks and major banks also saw their shares drop in the session.

The saving grace on Thursday was the tech sector and utilities that helped to stem the bleeding and force a flat day. Also, there were a few big winners in the healthcare and services sectors that helped pull markets up as well.

Crude oil was negative on Wednesday and last trading down about 0.8% at $49.23.

Gold was only slightly higher on the day up 0.1% closing at $1265.20.

The S&P 500 stock posting the largest daily percentage loss ahead of the close Thursday was F5 Networks, Inc. (NASDAQ: FFIV) which traded down nearly 8% at $126.79. The stock’s 52-week range is $99.29 to $149.50. Volume was 3.6 million versus the daily average of 737,000 shares.

The stock posting the largest daily percentage gain in the S&P 500 ahead of the close Thursday was Intuit Inc. (NASDAQ: INTU) which jumped about 8.5% to $125.62. The stock’s 52-week range is $99.20 to $128.45. Volume was roughly 4.6 million which is above the daily average of around 1.8 million shares.

Realistic Forex Income Goals for Trading

Realistic Forex Income Goals for Trading

Forex Income

Setting realistic trading revenue goals is a tough question to answer because there are so many factors. Each Trader is different, and the reality is that most traders lose money. The reason is that trading is tough and it takes real effort and discipline to be successful.

It is also impossible to find out what the best independent traders make because only a few people share that information and those that do, may or may not be telling the truth.

We will start by looking at some independent forex trader salary public data available on the internet:

Salary.Com says:
How much does a Foreign Exchange Trader III make? The median annual Foreign Exchange Trader III salary is $166,461, as of March 31, 2017, with a range usually between $130,000-$194,728. However, this can vary widely depending on a variety of factors. Our team of Certified Compensation Professionals has analyzed survey data collected from thousands of HR departments at companies of all sizes and industries to present this range of annual salaries for people with the job title Foreign Exchange Trader III in the United States.

This professional forex trader income makes, not the retail traders who work from home.

How much can you make Trading the Forex Market?

There is no Limit on how much you can make! You can make millions of dollars. Anything is possible which is why so many people try to learn how to trade.

WAIT! Forex Income Is Challenging:

Before you get crazy here and start throwing loads of cash into a trading account.  I need to tell you that, only a few people get rich trading retail forex, it is difficult, and you must be a master of trading and discipline to make a significant amount of money.

We could play the scenario’s all day long which is the reason a lot of people get into Forex Trading in the First Place. They see the possibilities of millions of dollars as what is possible and next thing you know they have lost several thousand dollars trading because they trade without knowing what they are doing and lack of discipline.

Realistic Trading Income Calculations:

So let’s calculate realistic numbers regarding profit potential.

The first thing you have to realize is that the use of leverage in trading is an excellent way to maximize gains and risk can be managed fairly well, if you have the discipline. That is the problem though is most people do not have the discipline.

But for the sake of this article, I am going to assume you have the trading discipline and have the ability to follow a forex trading income; risk management plan.

The great thing is you do not have to risk much to make a substantial profit. Let me give you an example.

You have an account of 10k, and you want to earn 2.5% per month with a goal of 30% account growth per year.
Now you decide that you are only going to risk 1% of that account per trade.
At 1% risk of 10k that is $100 USD, and therefore you are only risking 1% at any given time, and you could potentially earn the 30% growth by never risking more than $100 at one time.

Now there are many more numbers that must be calculated such as what is your win rate, what is the risk to reward ratio. So the scenarios could go on and on forever.

You could, in fact, raise your risk to 2.5% or $250 and hit your goal with a single trade and meet our monthly goal by using a risk/reward ratio of 1:1.

Forex Income Compared to Real Estate Income

Compare that with something real estate where someone might have to risk a great deal more to achieve the 2.5% gain. For example, you could spend 100k or more purchasing a house, and in trading, you can earn 2.5% with a much smaller investment by opening an account for as little as 1000.

You could potentially make 2.5% on one trade verses a lot more upfront money and time involved in real estate investment.

That’s the only trade you would have to make that month in order gain what you would be averaging in Real Estate to be considered extremely profitable. The conclusion is simple: Forex has such an incredible potential, that it can easily surpass Real Estate even with minimal risk measures in place.

I cannot think of many investments that yield anywhere near 100% ROI a year. Let’s take a look and see how hard it would be to make this with minimal to moderate risk management. It comes out to 6% a month compounding. Now that, my friend, is more than doable in this market. If you are confident in your profitability as a trader and willing to risk, say 3% of your account on each trade, then with an RR of 1:2 you could easily achieve this percentage with one trade in a month

Forex is an excellent investment IF you take it slow and focus on the long term.

What is the average forex trader salary?

I would like to compare Forex Vs Average and above average careers.

Now, looking at the average income per capita (person) in the U.S. The average Income per capita in 2015 was $58,714 via Wikipedia.

Let us imagine that you would like to make at least $50,000 a year trading. After all, you’re doing this for the money, so you want to make as much as possible.

Once again using minimal-moderate risk, we said you could accumulate 8% a month.

Assuming that you increase your lot sizes with your account each month, instead of weekly or daily for risk management purposes. You would need to have a $40,000 account to make $53,265.56 a year at 8% a month.

Now let’s say you minimized your expenses and worked a job, so you were able to build your trading account. How long would it take you to make 1 million off of a $10,000 account at 10% ROI a month? In 4 years you would have $970,000. Divide that by 4, and you get $242,500. Which means that you made $242,500 annually. That is if you did not pull any out, instead let your account build at 10% ROI each month.

What if you wanted to wait until five years and then start pulling out all of your profits. In 5 years you would have $3,044,816. Now you can feel free to pull out all of the profits each month, that would mean you would make $304,481 a month! Just imagine that. If you build up your 10k account for five years, you will be making $3,653,779 a year after that if you pull out all of your earnings. So we see that it is much better to build up your account until you feel you NEED to take the money out. I mean, can you imagine making that kind of an income five years from now every month. I am not even talking about something that is unachievable. 10% a month is possible in Forex by finding a great trading system, having proper discipline, finding a trading mentor, and keeping yourself in check every day, and perfecting your craft each and every day by educating yourself.

In fact, 10% per month can be accomplished with only a few high-quality trades each month; many traders get caught up in quantity instead of the quality of trades. We have a forex trading income calculator on this site to help you do your calculations.

I would challenge you to find another career in the world that will have you earning that kind of money in 5 years. I mean, honestly, those numbers are mind blowing, Remember though don’t get caught up in the figures. Trading isn’t easy but can be done, if you follow a plan.

I say this simply to reinforce how profitable the Forex market can be if you work hard, and have long-term goals in mind.

You really can make Great Income in Forex 

In conclusion, if we can maintain a realistic view of Forex then we have a greater chance of setting reasonable goals and maintaining a profitable trading strategy that brings us a steady Forex income over time.

“Nothing can stop the man with the right mental attitude from achieving his goal; nothing on earth can help the man with the wrong mental attitude. -Thomas Jefferson

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Casey Stubbs is the founder of Winners Edge Trading, which is one of the most widely read forex sites on the web.
Winners Edge Trading has trained thousands of people to trade the Forex markets.

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The French election: Still anyone’s game

The French election: Still anyone’s game

Even though Macron’s lead in the first round of the French elections has buoyed markets, traders are buying USD currency pairs. Prior to the initial round of the elections, 69% of FXTM’s traders were selling the Euro with an Average Weighted Price of 1.06466.

They also noticed long exposure on USD pairs before and after the elections, which is a sign that traders were seeking a safe haven position — despite Macron’s popularity. The reason for this could be that, although Macron has the lead, traders are not discounting the fact that he is a relative neophyte on the political scene and would be France’s youngest ever President.

As the international community recovers from the shock of the Brexit vote and President Donald Trump taking the reins in the Oval Office, pundits have been cautious about taking a stance from the polls in the French election. This time, however, the polls were on the mark. Emmanuel Macron and Marine Le Pen are going to battle it out for the podium. Macron’s promise to lower corporate taxes and his intention to stay within the European Union, has given the Euro a boost; global stock markets have also rallied, with European bank shares rising to their highest levels since December 2015. Another indicator that the markets believe Macron is good for the Presidency is the Volatility Index, which plummeted after the news that Macron is a contender.

As predicted, the markets reacted favorably to Macron’s lead. Le Pen is trailing by 2.3%, but this, by no means, discounts her as a contender. If she does well in the new round of polls leading up to the election on 7 May, it could precipitate a fresh round of market jitters. Le Pen wants to renegotiate the terms of France’s membership in the EU. Her agenda is to change the Union into a loose cooperative of countries, to eliminate the border-free area, and to reduce the reach of the EU budget rules. She would also call a Referendum on EU membership at the end of her first six months as President and does not rule out a “Frexit.” This makes currency traders nervous.

Some similarities can be drawn from the US elections, where final polls showed Clinton had a 2% lead, although Trump eventually won with a 3% lead. In France, the polls showed that Macron would win the first round with a 1.5% lead (an average of the polling organizations) and he won by 2.3%. These margins are by no means landslides and the scales could easily tip in Le Pen’s favor.

Regardless of how the French people vote on May 7, the outcome will surely play out in the markets. Results from the first round clearly indicate that a Macron Presidency augurs better for the French and European economies and political landscape. If Le Pen gets the nod, then her economic and political agendas are likely to set the Euro on a course of volatility.

A Frexit could set the scene for a weakened European Union. Euroscepticism is growing on the continent and since most European countries allow for referendums in their constitutions, other exits cannot be ruled out. We cannot forget that, after the Brexit vote the foreign ministers of Germany, Italy, Belgium, France, Holland and Luxembourg issued a joint statement declaring that they recognized a discontent with the functioning of the EU. The exit agenda is by no means over, all of the citizens of Europe will be witnessing significant changes in the next five years; it will be an interesting journey.

World Out Of Whack: 5 Head Scratchers

World Out Of Whack: 5 Head Scratchers

Market dislocations occur when financial markets, operating under stressful conditions, experience large widespread asset mispricing.

Welcome to this week’s edition of “World Out Of Whack” where every Wednesday we take time out of our day to laugh, poke fun at and present to you absurdity in global financial markets in all its glorious insanity.

While we enjoy a good laugh, the truth is that the first step to protecting ourselves from losses is to protect ourselves from ignorance. Think of the “World Out Of Whack” as your double thick armour plated side impact protection system in a financial world littered with drunk drivers.

Selfishly we also know that the biggest (and often the fastest) returns come from asymmetric market moves. But, in order to identify these moves we must first identify where they live.

Occasionally we find opportunities where we can buy (or sell) assets for mere cents on the dollar – because, after all, we are capitalists.

In this week’s edition of the WOW: 5 head scratchers

Today we’re going to blast through a few shards of information that have bloodied my windshield recently… but first some context.

The world is a web, interconnected at multiple levels but in it’s entirety it is one giant capital flow chart. This is why looking at events, trends and prices from multiple angles and with historical context is critical. It means that in order to understand global capital flows and the world at large investors needs to be generalists. Specialisation renders one towards narrow focus by necessity. There is nothing wrong with narrow focus when you need it so long as it can be brought into focus through a broad understanding.

Let’s therefore look at a number of topics.

1: Saudi Arabia Got WHAT??

In what I dearly wish was a delayed April fools joke the United Nations just elected Saudi Arabia to the Woman’s Rights Commission. No isht!

A quick reminder: this is the only country in the world which actually bans women from driving cars while implementing Sharia Law, which – for those among you who haven’t read the intricacies of – permits, among other heinous things, honour killings. Way to go UN!

Question: does this make the UN complicit in crimes against humanity committed by Saudi Arabia’s government? Oh, wait…

Why do I even mention this?

Davos men, the UN, the kleptocrats in Brussels, Washington, and sundry such creatures who muddy the halls of power are slowly losing their grip. This step – electing the fox in to guard the hen house – is a candid, dare I say it, balsy admittance to what we already knew. That they value money more than morals.

Why it’s important is because, in their desperate desire for riches, they just dealt another blow to the establishment’s credibility. Credibility rests on trust, and trust is easily destroyed. What these podium donuts have just done is provided additional kerosene to the anti-establishment fire, which – if they’ve not looked outside their windows – is smouldering around them.

When alternatives for governance are sought, as they are now, it doesn’t require a genius to understand that views and beliefs are translated into how capital gets allocated.

Ask yourself this.. If Davos Man is increasingly shown to be the morally bankrupt sociopath he is, then at what point does faith in Davos Man’s institutions and obligations (sovereign debt, I’m looking at you) get called into question?

2: Risk Party… I Mean Parity

In case you wondered what it was…

“Risk parity (or risk premia parity) is an approach to investment portfolio management which focuses on allocation of risk, usually defined as volatility, rather than allocation of capital.”

Simplistically risk parity funds buy assets based on their implied volatility. If company X’s volatility drops, then the models allocate more capital towards company X. By buying more of company X this has the effect of causing volatility to decline further. You get the picture. I’ve written about this before when talking about a bubble in dumb money.

Imagine buying companies not based on their balance sheets, income statements, or any of that boring stuff but purely on how volatile their share prices have been. Imagine… These risk parity funds are completely price insensitive. They don’t even know what they’re buying and will just as happily buy company X if it’s trading at 200x earnings… so long as volatility is low.

Now, I would be remiss in mentioning that artificially low interest rates (thanks central banks) have had the effect of suppressing volatility in markets. These ETFs, coupled with sustained idiotic central bank policies, have created truly epic distortions in the markets.

And, just to prove that stupidity can last for quite some time, below is an updated chart on where things stand with this fun game.

3: Circling Back to the Saudis

I don’t know about you but I find that when I need to understand something a little better it’s often best to let the idea ruminate a little while before revisiting it. This allows it to mulch around in your brain, squeeze out the flatulent useless bits, and present you with what is usually be a better grasp on what really matters.

Sticking with this process, let’s revisit the first topic of this week’s WOW.

Curious minds should be asking the question: why on earth is the UN treating the Saudis like a cross between Mother Theresa and Ghandi?

Call me cynical but I reckon it’s usually always about the money. So the fact that grand master Mohammad Bin Salman Al Saud has decided to list a sliver (5%) of Saudi Aramco may well have a little to do with this.

We know there are problems in the Kingdom. Serious problems.

And no, I’m not referring to the fact their poor citizens are governed by a bunch of psychopaths with medieval beliefs who would still be living in caves if it weren’t for the black stuff under their sandals.

I’m talking about financial concerns around its now infamous decision in November 2014 to abandon its role as the global swing producer and ramp up production (even as global supplies were increasing and prices were collapsing).

Take a look at this:

Now take a look at this:

This is what a pegged currency looks like (Saudi riyal vs. USD).

I’ll let you put two and two together…..

Done?

Ok

So you’re in a cash crunch, running the biggest budget deficits ever, you have to hold your currency peg which means dipping into your foreign exchange reserves, and you’re fighting a wall of supply from Iran (a topic for another day but you can go listen to my conversations on Iran here and here). What do you do?

You do what anyone would do. You sell stuff.

The “Kingdom” had their first ever bond sale last year and now they’re flogging Aramco to the world. The problem with all of these things is that you’re needing to interact with the rest of the world a tad more and that still requires “legitimacy”. A “credible” seat at the UN should help, no?

I wonder how much they paid the bankers for that seat at the UN?

We’ll probably get some insight when we see where Aramco’s shares get listed, and by whom.

4: The Wisdom of Age

Just in case we think we can fathom what the future holds.

How much of what Emma witnessed in her 117 years on this ball of dirt could she have seen coming in her life?

The answer is not likely many things. But… identifying just one of the completely asymmetric changes that took place would have definitely been very, very well worthwhile for Emma. Imagine having had the ability and foresight to have invested in just one of the items Sprezza lists in its early phase… and hung on.

Identifying the trends could have been done but I dare say hanging on is likely the hardest thing for us humans to do.

5: And Lastly But by No Means Least

Did you see the massive rally in the euro?

I’ve a great number of thoughts on this which I share with Insider members this week, including what I think is a wonderful setup. I’d encourage you to join us.

After all, there are just a few days left in April, which means you can gain access to membership at the inaugural price… before the price goes up.

Until next time, have a good week.

– Chris

The biggest mistake investors make is to believe that what happened in the recent past is likely to persist. They assume that something that was a good investment in the recent past is still a good investment. Typically, high past returns simply imply that an asset has become more expensive and is a poorer, not better, investment.” — Ray Dalio, Founder, Bridgewater Associates