The Canadian dollar has been in a broad trading range against the US dollar for all of 2010. The Loonie, has traded between par and 1.08, during the past year, as a combination of global currency flows, and strong economic data, has kept the Canadian dollar pegged. Continue reading
The EUR/GBP cross has been under pressure for a number of weeks, as sovereign debt issues continue to place pressure on peripheral bonds, such as Portugal, Spain and Ireland. Last week, both Fitch and Moody’s downgraded Portugal, and Hungry was downgraded by Moody’s at the end of the week. Continue reading
Although the RBA kept interest rates unchanged in their most recent meeting, yields on the Australian government bonds continue to move higher. Recent economic data has shown that the economy is still growing at a robust pace, and Australia’s largest trading partners are also growing rapidly. Continue reading
The issues related to solvency within the Euro-zone are continuing to stay in the headlines and remind investors that each of the countries within the periphery are under pressure. It will only be a matter of time, until a rating agency comments on the core, such as France, and then the real action in the Euro will unfold.
Today, The European Central Bank warned Ireland that proposed legislation revamping the country’s financial system could threaten some of the ECB’s operations. The central bank chastised Dublin for its handling of two banks at the heart of Ireland’s crisis, Anglo Irish Bank Corp. and Irish Nationwide Building Society. Continue reading
The pound has been consolidating during the past 6-months as investor are trying to get a handle on the direction of the UK economy. The UK central bank, the BOE, although more in line with the US FOMC, has decided not the throw the kitchen sink at an economy that is struggling to regain its footing.
The new government was elected on budget restraint, and the BOE believe that mortgaging the future is not worth the benefits given today’s fiscal requirements.
Employment and Retail sales have given investors a mixed picture, but the uncertainty is creating a heavy pound that could break to lower levels. Continue reading
The equity markets are breaking out and it’s time to catch the upward momentum of a break out. Options strategies are excellent investment vehicles to lever your view into making robust returns. The Russell 2000 index is leading the charge higher, and the big cap equity indexes are likely to follow after the law makers approve a stimulus package that will increase GDP projections for 2011 higher.
The QQQQ is breaking out on a weekly trend line, with a powerful head and shoulders pattern behind the market which will add momentum to the upside. A break out to the upside on a close above 54.85 will be which is equivalent to 2,236 on the Nasdaq 100.
Asset : Nasdaq 100 Fut
The trade : Binary Call Option
Expiry: End of day
When : On a daily close of 2236
Crude oil prices are again moving in on the 90 range, after testing 87 late in last week’s trading. The market should continue to grind higher, and the upside should benefit after the Chinese central bank decided not to increase interest rates this past weekend.
A binary option trade that looks attractive is a trade on BP (British Petroleum), which benefits from higher oil and gas prices.
BP p.l.c. (BP) is an international oil and gas company. The Company operates in more than 80 countries, providing its customers with fuel for transportation, energy for heat and light, retail services and petrochemicals products. The Company operates two segments: Exploration and Production, and Refining and Marketing. Exploration and Production’s activities cover three key areas. Upstream activities include oil and natural gas exploration, field development and production. Midstream activities include pipeline, transportation and processing activities related to its upstream activities. Marketing and trading activities include the marketing and trading of natural gas, including liquefied natural gas (LNG), together with power and natural gas liquids (NGLs). Refining and Marketing’s activities include the supply and trading, refining, manufacturing, marketing and transportation of crude oil, petroleum and petrochemicals products and related services.
BP’s Book Value Yield relative to the Standard and Poor’s Industrial Book Yield is bullish for BP. A high relative yield suggests BP is more reasonably priced than the broad market. Book Value Yield compares the per-share value of a company’s net assets with its current stock price. The same is done in aggregate for the overall market and the two values are compared to gauge its relative valuation.
The relative performance of stocks versus bonds is currently a favorable influence for BP. When the total return of stocks has been trending higher than the total return from bonds, it has historically had favorable implications for the general stock market and for BP stock in particular. When bonds have been outperforming stocks, it has been an unfavorable influence on BP.
This chart displays the history of Price/Earnings for BP for both Trailing Four Quarters (TFQ) and Forward Four Quarters (FFQ), allowing for comparison of how Price/Earnings projections compare to actual reports over time. Therefore, a lower P/E represents a more favorable price given the level of earnings.
Technically, BP is poised to breakout above the 200-day moving average and horizontal resistance.
Asset : BP
The trade : Binary Call Option
Expiry time : End of Day
When : On a daily close above 44.50
Crude oil prices have broken through $90 dollars a barrel for the first time since falling through $90 in mid-2008. Oil prices are rising due to increased demand and increased liquidity from the US Federal Reserve. Additionally, cold weather in the US east coast and Europe are supplying increased demand for heating oil which is driving prices higher.
In the US, both the 6-10 day forecast and 8-14 day forecast by the National Weather Service are well below the average temperature for this time of year. On the east coast of the United States the main heating fuel is Heating Oil, compared to the middle of the country and the west coast which use natural gas as the main source of heating fuels. In Europe, the majority of heating comes in the form of gasoil, which is similar in make up to heating oil, and is derived from crude oil.
Historically, the Gold to crude oil ratio, is also relatively wide, given the range over the past 18 months. When Crude oil made highs of $147 and a low of $32 the ratio moved dramatically, but more recently the ratio, has ranged between .10 and .06. With the recent move higher in Gold prices, the ratio has moved higher in favor of gold, but crude oil is likely going to catch up, making the ratio contract.
Crude, technically has broken out, and finding a solid resistance level to initiate a trade is more art than science. Any move above 90.50 over the next day should be a signal to move into crude, looking for petroleum prices to move higher.
Additionally, the 10 day moving average has recently crossed above the 20 day moving average which should add momentum to the upward bias for crude oil.
Asset : WTI Crude
The Trade : Binary Call Option
Expiry : Daily
When : On a break of 90.50
Special Note : Look to take profit at 92.00 if your broker allows this.
Gold prices closed near an all time high on Friday, moving higher to 1414, and it is poised to move higher. Gold prices against the Euro have already made a new all time high, at 1064, and given the issues that are being faced in the Euro-zone, the Yellow metal is likely to continue higher. Continue reading
The rally in the dollar has be a surprise especially when you consider that one of the objective of the FOMC bond purchasing program is to weaken the US dollar. It seems that the issues on the European continent have overshadowed everything. Since reaching a low of 80.29 in late October, the USD/JPY has rallied approximately 4 big figures. There are a few reason for investors to be skeptical of the dollar rally. Continue reading