Monday, December 26, 2011

Happy New Year from Invest2Success


This is my last stock pick for 2011 and it’s a bullish call on VF Corporation. The DJIA, SP500, and Nasdaq indicies all look like the Santa Claus Rally is underway now. For how long this rally will last is hard to say with all of the economic uncertainty globally currently, but I think on selective case by case basis some stocks will do very well in 2012 and possibly beyond. The VF stock chart is in a very nice uptrend, and the fundamentals of strong quarterly earnings surprises are showing in the chart making VF a very nice low-risk high-reward buy-long position this week.

On October 28 Zacks Investment Research reported that VF Corporation carried its momentum into the third quarter and knocked it out of the park once again. The company delivered its 8th consecutive positive earnings surprise on 16% organic revenue growth.

Management raised its guidance for the remainder of 2011, and earnings estimates have been soaring, sending the stock to a Zacks #2 Rank (Buy).

The company also hiked its dividend by 14%, marking its 39th straight year of higher dividend payments.

Third Quarter Results

VF Corporation reported its third quarter results on October 24. It was another excellent quarter for the company. Earnings per share came in at $2.87, crushing the Zacks Consensus Estimate by 32 cents. It was a stellar 29% increase over the same quarter in 2010.

Revenues rose 23% to $2.750 billion, ahead of the Zacks Consensus Estimate of $2.620 billion. Revenue was boosted in part by the Timberland acquisition. However, organic revenue growth was still a remarkable 16%.

Each segment achieved strong revenue growth in the quarter. Its largest division, Outdoor & Action Sports, saw organic revenue growth of 22% driven by strong gains in its The North Face and Vans brands.

The gross margin did contract a bit in the quarter from 46.5% to 45.3% of sales, but this was somewhat offset by the leveraging of its fixed expenses.

These factors led to a 21% increase in operating income over the same quarter in 2010.

Raised Guidance

Following another strong quarter, management raised its guidance for the remainder of 2011. The company now expects earnings of $8.15 per share on revenue growth of 22-23%, up from prior guidance of $7.50 per share.

This prompted analysts to revise their estimates for both 2011 and 2012 significantly higher, sending the stock to a Zacks #2 Rank (Buy).

Analysts expect the strong business momentum to continue for at least the next couple of years. Based on consensus estimates, analysts project 27% earnings growth this year and 15% growth next year.

As you can see in the company's Price & Consensus chart, consensus estimates have been soaring over the last several months as the company has delivered 8 consecutive positive earnings surprises:

Raised Dividend

In addition to strong earnings growth, VF Corporation pays a dividend that yields a solid 2.1%. The company announced in its third quarter release that it was increasing its quarterly dividend by 14%.

This marks the 39th consecutive year of higher dividend payments.

The Bottom Line

With earnings momentum accelerating and strong growth and income characteristics, VF Corporation still offers plenty of upside potential.

Buy VF Corporation – Ticker VFC

Buy Entry: 122.99 to 129.13

Stop-Loss: 113.21

Take Profit Areas: 142.89 to 149.09, 154.71 to 161.63, 169.25 to 176.51

Company Profile

V.F. Corporation designs and manufactures, or sources from independent contractors various apparel and footwear products primarily in the United States and Europe. The company offers apparel, footwear, outdoor gear, skateboard-inspired and surf-inspired footwear, backpacks, luggage, handbags and accessories, outdoor apparel, travel accessories, and women’s active wear primarily under the Vans, The North Face, JanSport, Eastpak, Kipling, Napapijri, Reef, Eagle Creek, and lucy brands; and denim and casual bottoms, and tops principally under Wrangler, Lee, Riders, Rustler, and Timber Creek by Wrangler brands. Its products also include occupational, athletic, and licensed apparel primarily under the Red Kap, Bulwark, Majestic, MLB, NFL, and Harley-Davidson brands; men’s fashion sportswear, denim bottoms, sleepwear, underwear, as well as handbags, luggage, backpacks, and accessories principally under the Nautica and Kipling brands; and denim and casual bottoms, sportswear, accessories, men’s apparel and footwear, and women’s sportswear primarily under the 7 For All Mankind, John Varvatos, Splendid, and Ella Moss brands. The company sells its products to specialty stores, department stores, national chains, and mass merchants primarily through its sales force, independent sales agents, and distributors. V.F. Corporation was founded in 1899 and is based in Greensboro, North Carolina.

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Click the VF Corp stock chart below for a larger view.

Monday, December 19, 2011

Merry Christmas from Invest2Success


All of us at Invest2Success wish you and yours a very Merry Christmas.

This Monday I've got a buy recommendation on Cabot Oil and Gas. Technically and fundamentally Cabot looks like a nice low-risk high-reward currently. After reviewing the global stock indicies, the markets look like they could possibly have a Santa Claus rally here. Long-term I'm still a bear for the broad market, but I'm thinking the September October lows might be retested at some point, and if they do, I can see another bear market upside rally taking place after that. I would then be a buyer for a quick upside pop, but probably not a long-term holder. So far, the markets seem to be staying in the sell-off trading range they been in since September October. There's still plenty of uncertainty out there which the markets are currently showing. Nothing wrong with just holding cash. Its a good trade and investment especially in uncertain times like now.

Zacks Investment Research is maintaining an Outperform recommendation on shares of Cabot Oil & Gas, reflecting its impressive exposure to the high-return Marcellus and Eagle Ford Shale plays, as well as its above-average production growth. Furthermore, the capital infusion of over $200 million bodes well for Cabot, which will help it to bolster its natural gas operations. Buoyed by the growth momentum from the company s drilling efforts, particularly in its North region, Cabot recently reported robust third-quarter results. A relatively low risk profile and longer reserve lives are other positives in the Cabot story. Considering these factors, Zack's believes Cabot is well positioned going forward and consider it an attractive investment.

Company Profile

Cabot Oil & Gas Corporation operates as an independent oil and gas company in the United States. The company engages in the development, exploitation, exploration, production, and marketing of natural gas, crude oil, and natural gas liquids. It holds reserves in north region comprising Appalachian and Rocky Mountains areas; and south region consisting of Anadarko basin with Texas and Louisiana areas. The company also transports, stores, gathers, and purchases natural gas for resale. As of December 31, 2010, it had proved reserves of approximately 2,761 billion cubic feet of natural gas equivalents. The company was founded in 1989 and is headquartered in Houston, Texas.

Buy Long Cabot Oil and Gas - Ticker COG

Buy Entry: 71.70 to 75.76

Stop-Loss: 65.47

Take Profit Areas: 89.94 to 92.62, 94.76 to 97.62, 109.51 to 112.78, 137.48 to 141.56, 158.46 to 162.74

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Click the Cabot Oil and Gas stock chart below for a larger view.

Friday, December 16, 2011

Long-Term Markets Forecast Outlook


It’s that time of year again and I’m not talking about the holiday season… What I am talking about is another major market correction which has been starting to unfold over the past couple weeks.

I have a much different outlook on the markets than everyone else and likely you as well. However, before you stop reading what I have to say hear me out. My outlook and opinion is based strictly on price, volume, inter-market analysis, and crowd behavior and you should put some thought as to what I am saying into your current positions.

My fundamental thinking is also a contrarian one. I feel that gold and silver have risen because of obvious reasons being printing of money but also fears that fiat currenecies will become obsolete in the next 5 years.

The problem with that thinking is that most or all the bad news has come out with Europe and we know there are still major issues to resolve but the end of the world did not happen. Looking forward 5 years countries will have stopped acting like teenagers spending more money they they have on their credit cards and start creating budgets which they will abide by.

What does this mean? It means the global economy as a whole will be stronger than ever before. We may have a few bumps along the way but I feel countries and individuals will be better than ever 5 years from now

Two weeks ago I sent my big picture outlook to my subscribers, followers, and financial websites warning of a major pullback.

Since my warning we have seen the financial markets fall:

SP500 down 2.6%
Crude Oil down 4.4%
Gold down 9.6%
and Silver down 12.2%

If you applied any leverage to these then you could double or triple these returns through the use of leveraged exchange traded funds. The amount of followers cashing in on these pullbacks has been very exciting to hear. The exciting part about trading is the fact that moves like this happen all the time so if you missed this one, don’t worry because there is another opportunity just around the corner.

While my negative view on stocks and precious metals will rub the gold and silver bugs the wrong way, I just want to point out what is unfolding so everyone sees both sides of the trade. I also would like to mention that this analysis can, and likely will change on a weekly basis as the financial markets and global economy evolves over time. The point I am trying to get across is that I am not a “Gloom and Doom” kind of guy and I don’t always favor the down side. Rather, I am a technical trader simply providing my analysis and odds for what to expect next.

Let’s take a look at some charts and dig right in.

Dollar Index Daily Chart:


SP500 Futures Index Daily Chart:


Silver Futures Daily Chart:


Gold Futures Daily Chart:


Crude Oil Futures Daily Chart:



Click here for a profitable gold and silver trading method.

Thursday, December 15, 2011

Angela Merkel Torpedoes the Euro


The Euro hit my year end target yesterday after a two cent plunge sent it down to the $1.29 handle. You can thank German Chancellor, Angela Merkel, who in the strongest possible terms, said there was no way she would consent to an increase in the size of the European bailout package.

It didn’t help that in the Federal Reserve comments today they basically ran up the white flag and admitted that there is nothing left for them to do but keep interest rates at “exceptionally low levels” for the foreseeable future. They see moderate growth last pegged at 3%, which means they are about 1% higher than reality. We are left to wait until January 25 for the all-powerful government agency to take longer term measures to help the economy, such are targeting unemployment rates.

I have been happily trading in an out of the Euro from the short side since April, catching almost all of the move down from $1.50, except for the last three cents. There was clearly a lot of new shorts initiated today as the euro broke multi month support levels. To say this is a crowded trade would be a vast understatement, as these new positions are being added to existing ones that are at all-time highs. A recent survey revealed that 67% of all hedge funds are currently running short positions in the Euro.

This is a crummy place to get involved, as the beleaguered European currency is now severely oversold on a short term basis. I want to wait for a four cent rally against Uncle Buck to jump back in the game again. I would be surprised if we plumbed new lows from here, but then this has been a surprising year. Wait until Q1, 2012 before we see a $1.25 print.

It would be easy to sit back and be complacent, believing that this is not our problem. But it is. A recession that Europe’s new austerity is certain to bring, will likely chip 0.5% to 1.0% off of US GDP growth in 2012. Since we are likely growing at a modest 2% rate now, we don’t have a lot to give away. Looking at an American economy that is facing death by a thousand cuts, this is one giant slash.


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Wednesday, December 14, 2011

The Euro Crisis and The UK Recovery


The euro crisis isn’t just affecting economic growth and the real estate industry in the U.K., but may also unleash another credit and mortgage crunch. If you are looking to purchase your first buy to let UK property or to expand an existing portfolio, and or have impaired credit, review best buy to let mortgages with the buy to let centre to achieve the best returns on your real estate investment and thus allowing you to be in the best position to build your portfolio in the future.

Spencer Dale, the Bank of England’s chief economist and member of its rate-setting Monetary Policy Committee, pointed to the signs recently. U.K. banks haven’t been able to issue unsecured term debt for most of the second half of this year. That wasn’t a major problem for U.K. banks since they’ve done most of their funding. [They were] pre-funded for most of this year by the time those markets effectively closed.

Still, this may explain why the BOE opened Sterling 30-day credit lines for banks last week—an action unseen from the bank since the 2008 financial crisis. Indeed, Dale said that although there hasn’t been “significant” worsening of credit conditions for households and companies, the U.K. needs funding markets to re-open:

And unless they do relatively quickly, I think there’s a real risk that credit conditions in our economy could tighten further.

So, with the possibility of another credit crunch and a flat-lining economy, the BOE faces a dilemma: should it pump significantly more cash into the economy via quantitative easing to open the credit markets—and risk fanning inflation—or wait and see?

Until we get a better sense of underlying inflation pressures I think there will be a nervousness in terms of the extent to which one should keep on stimulating the economy, Dale said.

Inflation has come down to 4.8 percent, but it’s still more than double the BOE’s 2 percent target and has been above target for 52 of the past 60 months. The BOE is watching to see how quickly inflation slows before considering more stimulus because, as Dale said, the inflation dynamics are uncertain. Such a delay may push the consideration of more QE to after March of next year.

For all the uncertainty about inflation, growth and even QE, or maybe because of it, one thing is clear: the euro crisis may not only erode U.K. growth but could once again plunge its banks and the wider economy into another credit crisis—2008 all over again, without the U.S. subprime mortgages.

Click here to review more financial news resources.

Tuesday, December 13, 2011

UK Home Price Forecast Cut


The outlook for Britain’s housing market has become more gloomy in recent months as economic growth falters and unemployment rises, according to Centre for Economics and Business Research, which lowered its price-growth forecasts.

Home values will rise 1.6 percent in 2012 after falling 1 percent this year, the London-based group said in an e-mailed statement today. The CEBR, which previously forecast that prices would increase 2.4 percent next year, cut its annual projections through 2015.

U.K. home sellers cut asking prices by the most in a year in November as the escalation of the euro-area debt crisis deterred buyers. While faltering growth and weakening consumer confidence will curb demand, prices will rise 15 percent through 2016 as values are supported by a shortage of homes for sale, according to the CEBR. With the lower UK real estate prices, you can now get the best mortgage deals available in today's market.

“The U.K. has a housing shortage,” CEBR Chief Executive Officer Douglas McWilliams said in the statement. “Both the shortage of supply and the growth in mortgage availability will push up house prices, but only slowly.”

Bank of England policy maker David Miles said this week that the housing market is undergoing an “extraordinary period of adjustment” as transactions decline and mortgage lending drops. Miles said that the ways in which home ownership is financed is changing as banks tighten loan conditions. Many of the changes “will be permanent,” he said, citing plans such as shared ownership, or so-called equity loans.

Cameron Plan

U.K. Prime Minister David Cameron said on Nov. 21 that his government will underwrite mortgages for as many as 100,000 new homes, introduce a 400 million-pound ($630 million) fund to reactivate stalled developments and release land for residential use. While the plan may boost values by as much as 2 percent in the first year of operation, its impact after three years will be “broadly neutral,” the CEBR said.

Property prices will climb 2.2 percent in 2013, 2.6 percent in 2014 and 3.2 percent in 2015, the CEBR said. That compares with August forecasts of 3.4 percent, 3.6 percent and 4 percent respectively. The group also sees values rising 4.3 percent in 2016, it said today.

Lombard Street Research said Nov. 22 risks to U.K. values “have shifted to the downside” because of the euro crisis, and that prices may decline for the next few quarters.

“A sharp reversal of prices is not likely, not least because of constraints on the supply-side; but the chance of rising prices by the end of 2012 has become slim,” they said.

U.K. consumer confidence fell to a record low in October as the unemployment outlook worsened and yields of Europe’s most indebted nations rose, heightening concern about the region’s ability to solve the debt turmoil. Data last week showed that the number of unemployed Britons rose to 2.62 million in the third quarter, the most since 1994.

“House building is forecast to grow only slowly over the next four years and consequently, with population growth and falling household size there is likely to be an increasing shortage of accommodation,” the CEBR said today. “This is likely to support rents and property values.”

Click here to review more financial news resources.

Monday, December 12, 2011

Brown-Forman Alcohol Santa Claus Rally


After reviewing the DJIA, SP500, and Nasdaq indicies, it very possibly looks like a Santa Claus rally could happen this week. I'm still skeptical on a longer-term upside rebound in the markets but short-term its looking more doable currently. If taking any new positions long or short as always use stop-loss in case the market goes against your position.

According to Zacks Investment Research, Brown-Forman Corp. (BF.B) reported a record fiscal 2012 second-quarter result, as it is first time in the company’s history that it crossed the $1 billion sales mark.

The company’s reported earnings of $1.09 per share came in line with Zacks Consensus Estimate and grew 3.8% from the year-ago earnings of $1.05.The robust increase in quarterly earnings was primarily driven by strong top-line growth and volume gains.

During the quarter earnings per share grew 8% after excluding the net effect of Hopland-based wine business.

Quarterly Details

Brown-Forman's net sales recorded a growth of 11.9% to $1,013.7 million from $905.7 million in the prior-year quarter. The growth was primarily attributable to solid performance in Germany, Turkey, France, the U.K., Russia, Canada, Australia and Brazil, which was more than offset by declines in Poland and Spain. Total Revenue beat the Zacks Consensus Estimate of $966 million.

During the quarter, Brown-Forman's gross profit grew 9.4% from the prior-year quarter to $501.9 million primarily driven by increased volumes. However, gross margin contracted 120 basis points (bps) year over year to 49.5% due to increased input and excise costs.

During the quarter, the company made huge advertising expenses in order to support several brand innovation launches. Advertising expenses increased 14.1% year over year to $106.7 million. Selling, general and administrative expenses surged 10.5% year over year to $146.8 million due to increased salary and related expenses. Conversely, Brown-Forman's operating profit grew 4.8% from the prior-year quarter to $246.3 million, while operating margin contracted 160 basis points to 24.3% from the prior-year period.

Balance Sheet & Cash Flow

Brown-Forman ended the quarter with cash and cash equivalents of $380.1 million and long-term debt of $504.2 million.

During the first six months of fiscal 2012, Brown-Forman generated $155.5 million of cash from operations and deployed $92.4 million for dividend payout, and $18.8 million on capital expenditures. On November 30, 2011, Brown-Forman’s $250 million share repurchase program expired. During the program period, the company repurchased a total of 3.4 million shares for $234 million, at an average price of $69.39 per share.

Dividend

During the quarter, Brown-Forman paid a regular quarterly cash dividend of 35 cents a share on Class A and Class B common stock, an increase of 9.4% over the prior dividend. This is the company’s 28th consecutive year of dividend growth.

Guidance and Zacks Consensus

Moving forward, Brown-Forman expects strong improvement in customer trends in the remaining period of fiscal 2012. However, it also anticipates that the stronger U.S. dollar value may have an adverse impact on its bottom-line. Accordingly, the company has lowered its upper end of earnings guidance. Currently, Brown-Forman expects fiscal 2012 earnings in the range of $3.45 to $3.70 per share instead of $3.45 to $3.85. Currently, the Zacks Consensus Estimate stood at $3.63 per share.

Buy Long Brown-Forman - Ticker BF.B - Short-Term Momentum Trade

Buy Entry: 77.45 - 81.50

Stop-Loss: 73.31

Take Profit Areas: 82.65 - 83.09, 87.47 - 87.91

Company Profile

Brown-Forman Corporation engages in manufacturing, bottling, importing, exporting, and marketing alcoholic beverages. The company offers its products primarily under the brand names of Jack Daniel’s, Gentleman Jack, Southern Comfort, Finlandia, Antiguo Tequila, Canadian Mist, Chambord, Don Eduardo, Early Times, el Jimador, Herradura, Korbel California, New Mix Ready-to-Drinks, Old Forester, Pepe Lopez Tequilas, Sonoma-Cutrer, Tuaca, and Woodford Reserve. It sells its products to wholesale distributors and state governments. The company markets its products primarily in the United States, Australia, the United Kingdom, Mexico, Poland, Germany, France, Canada, Japan, Spain, Turkey, South Africa, Russia, Italy, and China. Brown-Forman Corporation was founded in 1870 and is based in Louisville, Kentucky.

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Click the Brown-Forman stock chart below for a larger view.

Thursday, December 08, 2011

Accelerating Your Forex Trading Profits


What if it were IMPOSSIBLE TO LOSE once your Forex trade hits a precise goal?

This unusual "trick" reveals how in Video #3 of the new Forex Profit Accelerator training series, called:

* "How To Trade Forex 'For F.R.E.E'"

Click Here to Watch It:

BIG NEWS <-- Forex Profit Accelerator RELEASE DATE . . .

35+ year trading expert Bill Poulos just announced that he's going to be releasing his step-by-step trading program - the Forex Profit Accelerator - which includes his brand new custom, intelligent Trade Alert Software, on:

* THURSDAY, December 15th, at 1pm Eastern (New York time).

Be sure to watch all of the Video for more details.

This is going to be exciting!

After you watch video #3 please post a comment if you like what you see.

All 3 of Bill's training videos will only be available online for a short time, so if you're trying to figure out safe, predictable, and fast way to add on Forex as a potential income stream (in 5 minutes or less per day), please make sure you watch them before they come offline.

Wednesday, December 07, 2011

Gold Trading System Reviewed


That’s a pretty bold statement.

But that’s exactly what Mike Ser and Andy Man are saying.

If you start a 90-day trial of their Part-Time Gold Trader and it doesn’t make you money in the next 90 days, just say the word and you’ll get 100% of your membership dues refunded to you.

You will get the full program for three months (the training, the coaching, the trades themselves) for FREE if you decide it’s not right for you.

PLUS if you start your trial in the next 24 hours, you can lock in an easy, four-payment plan.

You have to act fast. Click here to jump on this now.

If you’re on the fence, just consider what this means.

You’ve got THREE FULL MONTHS to make them PROVE TO YOU that they can make you a better, more successful trader.

Just paper trade his service… the worst case scenario if you decide it’s not for you is that you got three months of coaching, mentoring and training AND you got to trade alongside a self-made millionaire trader for free.

You don’t have to take their word that their strategies will work for you. You’re able to see the reality for yourself.

Take a 90-day risk-free trial and trade alongside Andy for yourself. Just to be safe, I recommend starting with paper trading. That way you can…

Prove to yourself that his trades are still making money in this market.

Prove to yourself that you can actually do what he’s doing. You can see how easy it is to follow his specific buy and sell instructions, and see how simple and effective his risk management strategies are.

Prove to yourself that his systems and strategies really do make you a more successful trader.

Let them prove that they can coach, mentor and transform you into an expert trend follower. Andy’s trend following success has been remarkable. Go ahead and do what he does and see how much better of a trader you become BEFORE making your final decision about the joining the service.

Click here to get all the details on your 90-day trial.

Let Mike and Andy turn you into an expert gold and silver trader.

Mike says Andy has completely demystified the drivers of volatility in gold and silver, and that’s why he is able to cash in on trends that seem to turn on a dime. They want to prove it to you in your trial period.

They’ll show you the EIGHT trend-triggers Andy uses to know when gold or silver is about to break out of a trading range, or change trend direction.

Some trigger short term uptrends, some trigger short term downtrends. Armed with this information, your confidence in trading gold and silver will skyrocket because you won’t be surprised when the market jumps or drops.

Let them hold your hand and show you how to use leverage intelligently without taking on excessive risk. Every trader knows leverage is a double-edged sword. It offers huge rewards, but can have huge risks. Andy seems to be managing his risk remarkably well, why not see if you can do the same with his guidance?

In short, get all of Andy’s trading secrets during your 90-day trial period.

Click here to get all the details on your 90-day trial.

I think this is as simple and straightforward a decision as you’ll ever get as a trader. Get mentored by and trade alongside a trader who became a millionaire starting from scratch in today’s market.

AND do it for 90 days before making a decision on whether or not this is the right service for you. Remember, if at any time during those 90 days you decide it’s not for you, you can just say the word and they’ll give you a 100% refund of every penny you invested to try it.

If you are at all interested, just go ahead and pull the trigger.

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Click here to review more gold and precious metals resources.

Monday, December 05, 2011

Market Mastery Profitable Stock Picking


I don't have a low-risk high-reward stock pick long or short this week as I just don't see the potential risk for reward great enough. I'm still looking for the major indicies to re-test the September October lows. I would consider investing in mortgages with bad credit than take any new positions in the stock market right now. In the meantime I have some free stock trading videos for you to review here that can you can potentially profit from.

As you probably know, there are over 7,000 stocks to choose from on just the U.S. exchanges alone.

But what you might NOT know is that about 97% of these stocks are PURE POISON for your portfolio, meaning that the odds are stacked AGAINST you before you even place a trade.

Recently, one of the most respected trading experts in our community discovered a way to automatically FILTER OUT the 'poison' stocks and leave you with:

* The Top 3% that offer the most profit potential every time you trade.

These are the safest, most predictable stocks that give you the best odds, and if you're NOT trading stocks in the Top 3%, you could be unknowingly KILLING your portfolio.

This trading expert recorded a series of brand new training videos that reveal his discovery, and show you how to filter out the poison stocks yourself.

The first video is ready to watch here:

After you watch it, please leave a comment below the video and let the community know what you think.

I think we're on to something big here.

With this discovery, you have the potential to BEAT the S&P500 by 5,420% or MORE. I know, it sounds weird, but it'll make sense after you watch the video.

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Friday, December 02, 2011

Stocks Lower and Dollar Higher Continuing?


The US Dollar rose to multi month highs. This comes as we see sharp losses in the Dow Jones and the S&P 500. The Dow Jones Dollar Index broke through the psychologically significant resistance at 10,000. It is currently boasting its strongest 20 day appreciation since the height of the financial crisis in 2008.

Today will feature US Nonfarm Payrolls which is foreseeable event risk for the world’s largest economy. However, traders should be aware of any surprises out of the upcoming European finance ministers meetings. Euro Zone tensions hit a new high this last week as a surprising failed German bond auction caused sell-offs in Spanish and Italian bonds. Italy paid a very high and deeply concerning 7.81 percent for 2-year bonds in its most recent auction. This was up substantially from the 4.63 percent they saw last month. Another Euro zone problem came when Standard and Poor’s downgraded Belgium’s sovereign credit rating for the first time since 1997. This was enough to push the US Dollar to significant highs, but the focus on Europe ignores key fundamental risks in the US economy.

Looking back across the pond, US Treasury Bonds rallied last week. This came in despite of news that the so called Super Committee has failed to agree upon fresh budget cuts ahead of its deadline. The lack of action from the group further underlines the political tensions and the unwillingness to get along in the current government. This might end up being a growing credit risk for the US Treasury. Still, global investors continue to flock to the relative safety of Treasury debt. However, further credit downgrades or improvement in Euro zone fiscal crises might push traders away from US debt. This might put the dollar at risk.

The next moves in Europe and as well as which way the financial market goes will be critical to Forex price action. This will come as the Buck might continue to rise as investors rush in as a flight to safety. Right now, 10-year US Treasury yields trade near record lows. That means that prices are near record highs.

Coming up, US economic data will be important.

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Thursday, December 01, 2011

The Currency War Begins


I think you will admit that we are in the middle of one major crazy financial mess. The part that makes things really crazy is that it’s not just in the United States anymore but rather serious global problem which if not handled properly could change the way we live our lives going forward or possibly even spark some type of war, hopefully things don’t get that crazy… But I do know one thing. Fear is the most powerful force on the planet and people do some crazy things when they are backed into a corner.

Anyways, on a more positive tone… today China decided to help provide more liquidity for the financial system along with the central banks. This news triggered a monster rally in overnight trading making the market gap up sharply at the opening bell. This news did hit the US dollar index hard sending it sharply lower but the question remains “Will today’s news be a one week hiccup in the market?” If Euroland starts printing money it will likely send the dollar higher and stocks lower for 6- 12 months.

Just today I was joking with Kerry Lutz of the Financial Survivor Network about how each country should just give each other country a second chance. Wipe the dept clean and start over knowing this time around exactly how each country truly operates at a financial level allowing everyone to avoid a repeat of this BS. Some countries will get off way better than others because they would get so much dept wiped clean but isn’t it better than years of problems and possibly wars over food, gold, guns, oil and Canadian water? – EH

All joking aside, let’s take a look at the weekly long term charts . . . Dollar Index Showing Possible Massive Rally If Euro Starts Printing Money:

I’m sure my off the cuff options/thoughts will cause a stir but I am fine with that. Everyone I talk to is thinking the dollar is about to fall off a cliff while I think it’s very possible that it does just the opposite. Either way I will be looking to benefit from which ever move unfolds.


Weekly Gold Chart:


Weekly Silver Chart:


Weekly SP500 Chart:


Long Term Thoughts:

I would first like to say that tonight’s report is out of my norm. Generally I do not focus on the big picture negative stuff and I like to avoid it for a few reasons… One, it’s just downright depressing to talk and think about. And Second I don’t want to be labelled as one of those “The Sky Is Falling” kinds of guys.

So, that being said I think these charts above show a situation what is very possible to happen in the coming 6-12 months. Keep in mind that my focus is on short term time frames as it allows me to avoid and actually profit from major market moves while providing enough information for my followers to learn technical analysis and trade management. And the obvious idea of not looking too far into the future with a negative outlook…

With headline risk changing the market direction on a weekly basis, this negative outlook could easily change in a couple months. I will recap on the big picture as things unfold in January/February.

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