US & Canada Archives - Page 124 of 172

September 21, 2012

Ray Dalio: Market Insights | CNBC

Ray Dalio, founder of Bridgewater Associates, the world’s largest hedge fund, discusses his biggest worry — social disruption due to mismanagement of the de-leveraging by governments — and other market insights.

[gigya name=”cnbcplayer” PLUGINSPAGE=”http://www.macromedia.com/go/getflashplayer” allowfullscreen=”true” allowscriptaccess=”always” bgcolor=”#000000″ height=”380″ width=”400″ quality=”best” wmode=”transparent” scale=”noscale” salign=”lt” src=”http://plus.cnbc.com/rssvideosearch/action/player/id/3000117516/code/cnbcplayershare” type=”application/x-shockwave-flash”]

Also PIMCO’s Mohammed El-Erian on the benefits and risks of ECB intervention in the eurozone debt crisis.

Colin Twiggs

Colin Twiggs is a former investment banker with almost 40 years of experience in financial markets. He co-founded Incredible Charts and writes the popular Trading Diary and Patient Investor newsletters.

Using a top-down approach, Colin identifies key macro trends in the global economy before evaluating selected opportunities using a combination of fundamental and technical analysis.

Focusing on interest rates and financial market liquidity as primary drivers of the economic cycle, he warned of the 2008/2009 and 2020 bear markets well ahead of actual events.
He founded PVT Capital (AFSL No. 546090) in May 2023, which offers investment strategy and advice to wholesale clients.

September 20, 2012

China, Japan and the world’s Agadir Crisis (1911) – Telegraph Blogs

By Ambrose Evans-Pritchard

The US has an impossible task maintaining “neutrality”, and Beijing knows it.

Washington guarantees Japan’s defence under its US nuclear umbrella. It uses military bases on Japanese soil as an unsinkable aircraft carrier. It works hand in glove with Tokyo in a tight military alliance.

The question is whether Washington is really willing to uphold the Japanese alliance as the going gets tougher. Will it let America to be led by the nose by Japanese nationalists into a clash that is not obviously – or immediately – in US national interest?

President Barack Obama faces the toughest diplomatic choice of any US leader since John Kennedy…….

via China, Japan and the world’s Agadir Crisis (1911) – Telegraph Blogs.

Colin Twiggs

Using a top-down approach, Colin identifies key macro trends in the global economy before evaluating selected opportunities using a combination of fundamental and technical analysis.

September 19, 2012

Forex Update

The Euro is testing resistance at $1.32 and its descending trendline. Upward breakout would warn the primary down-trend is ending. Recovery of 63-day Twiggs Momentum above zero indicates a primary up-trend. Breakout above the 2012 high of $1.35* would strengthen the signal, but only a higher trough of several weeks would confirm.

Euro/USD

* Target calculation: 1.275 + ( 1.275 – 1.20 ) = 1.35

Pound Sterling is correcting to support around €1.22 against the Euro. Breach of the rising trendline would warn the primary up-trend is ending, while retreat of 63-day Twiggs Momentum below zero would suggest a primary down-trend.

Pound Sterling/Euro

Canada’s Loonie is testing the new support level against the greenback at $1.02. Respect of support would confirm the primary up-trend indicated by long-term bullish divergence on 63-day Twiggs Momentum. Target for the advance is $1.08* but expect resistance at the 2011 highs of $1.06.

Canadian Loonie/Aussie Dollar

* Target calculation: 1.02 +( 1.02 – 0.96 ) = 1.08

The Aussie Dollar respected resistance at $1.06 against the greenback, retreating to test support at $1.04 on the daily chart. Respect of support is likely and follow-through above $1.05 would indicate another test of $1.06. The 63-day Twiggs Momentum trough above zero signals a primary up-trend. Breakout above $1.06 would confirm. Expect resistance at $1.075/$1.08, but target for an advance is $1.10*.

Aussie Dollar/USD

* Target calculation: 1.06 + ( 1.06 – 1.02 ) = 1.10

The Aussie Dollar is testing resistance at ¥83.50 against the Japanese Yen. Recovery of 63-Day Twiggs Momentum above zero indicates a primary up-trend. Breakout would signal an advance to ¥88*. Reversal below ¥79.50 is unlikely but would re-test primary support at ¥74.

Aussie Dollar/Japanese Yen

* Target calculation: 84 + ( 84 – 80 ) = 88

A few readers objected to my view that the RBA should intervene to prevent further appreciation of the Australian Dollar. One reason cited is that the RBA is not strong enough to stand up to global capital markets and would eventually be forced to capitulate. I disagree. If you are printing your own money you can take on all-comers. The SNB demonstrated this by preventing depreciation of the euro against the Swiss Franc, pegging the rate at 1.20 CHF for the last year.

Euro/Swiss Franc

The second argument was that “the market knows best” and any interference would cause more problems than it solves. My answer to that is that capital markets are subject to huge ebbs and flows, some determined by trade fluctuations but primarily caused by speculative flows and deliberate strategies by other central banks. If the RBA fails to act, local industry exposed to international competition may be irreparably damaged by loss of international markets and being under-cut in local markets by cheap imports. When the tide eventually turns, and the dollar weakens, it would be difficult to restore those industries if key capital equipment and skilled jobs have been lost.

The US is a perfect example: China and Japan hold more than $2 trillion in US treasury investments which helped to suppress appreciation of their currencies against the greenback, maintaining a trade advantage which cost the US millions of manufacturing jobs. It will be difficult to restore those industries lost even if the imbalance is corrected.

Colin Twiggs

Using a top-down approach, Colin identifies key macro trends in the global economy before evaluating selected opportunities using a combination of fundamental and technical analysis.

September 19, 2012

Canada’s Budget-Cut Veteran Has Warning for U.S. – Real Time Economics – WSJ

By Paul Vieira

Speaking at an event sponsored by the American Enterprise Institute, a conservative-leaning think tank, [former Canadian Prime Minister Paul Martin] said whoever wins November’s election must address the U.S.’s burgeoning deficit the very next day because the economy is at risk of reaching a “tipping point.”

…….Mr. Martin does have pedigree on the subject. He was Canada’s finance minister in the mid-1990s when the-then Liberal government made deep spending cuts that tamed a spiraling deficit and restored market confidence in [the] country. By fiscal 1998, Canada had returned to a budget surplus — its first in nearly three decades.

via Canada’s Budget-Cut Veteran Has Warning for U.S. – Real Time Economics – WSJ.

Colin Twiggs

Using a top-down approach, Colin identifies key macro trends in the global economy before evaluating selected opportunities using a combination of fundamental and technical analysis.

September 19, 2012

For Superfast Stock Traders, a Way to Jump Ahead in Line – WSJ.com

By SCOTT PATTERSON and JENNY STRASBURG

Haim Bodek was a Wall Street insider at Goldman Sachs and UBS before launching his own [high-frequency] trading firm.

Mr. Bodek approached the Securities and Exchange Commission last year alleging that stock exchanges, in a race for more revenue, had worked with rapid-fire trading firms to give them an unfair edge over everyday investors.

He became convinced exchanges were providing such an edge after he says he was offered one himself when he ran a high-speed trading firm—a way to place orders that can be filled ahead of others placed earlier. The key: a kind of order called “Hide Not Slide”………

via For Superfast Stock Traders, a Way to Jump Ahead in Line – WSJ.com.

Colin Twiggs

Using a top-down approach, Colin identifies key macro trends in the global economy before evaluating selected opportunities using a combination of fundamental and technical analysis.

September 19, 2012

How to keep markets safe in the era of high-speed trading | Chicago Fed

By Carol Clark

With the chance of an order passing though controls at so many levels, how can things go wrong? One possibility Chicago Fed researchers found is that most of the trading firms interviewed that build their own trading systems apply fewer pre-trade checks to some trading strategies than others. Trading firms explained that they do this in order to reduce latency.

Another area of concern is that some firms do not have stringent processes for the development, testing, and deployment of code used in their trading algorithms. For example, a few trading firms interviewed said they deploy new trading strategies quickly by tweaking old code and placing it into production in a matter of minutes. In fact, one firm interviewed had two incidents of out-of-control algorithms. To address the first occurrence, the firm added additional pre-trade risk checks. The second out-of-control algorithm was caused by a software bug that was introduced as a result of someone fixing the error code that caused the first situation.

The study also found that erroneous orders may not be stopped by some clearing BDs/FCMs because they are relying solely on risk controls set by the exchange. As noted earlier, however, risk controls at the exchange may be structured in such a way that they do not stop all erroneous orders.

via Chicago Fed Letter (PDF)

BD = broker-dealer

FCM = futures commission merchant

Colin Twiggs

Using a top-down approach, Colin identifies key macro trends in the global economy before evaluating selected opportunities using a combination of fundamental and technical analysis.

September 18, 2012

Job Creators in Chief | Global Macro Monitor

By Global Macro Monitor

Let us begin by saying we don’t like the title of this post and believe it is misleading.

The President cannot, in our opinion, directly create permanent jobs in the private sector. Of course, he can hire federal workers and/or direct taxpayer funds to, say, defense or infrastructure projects, which creates, though temporary, a derived demand for labor. More important, however, is the administration’s policies that incentivize private sector hiring through creating an environment that empowers businesses and entrepreneurs and gives them confidence to expand capacity.

….In the short term, however, quantitative easing and negative real interest rates can generate asset bubbles, which can affect the real economy and hiring. But the experience of the collapse of two major bubbles in just a little over a decade illustrates there is always pay back and the monetary induced artificial boom will eventually turn to bust.

via Global Macro Monitor | Monitoring the Global Economy.

Colin Twiggs

Using a top-down approach, Colin identifies key macro trends in the global economy before evaluating selected opportunities using a combination of fundamental and technical analysis.

September 18, 2012

“This is No Way to Run a Government!” – Gates | The Fiscal Times

By JOSH BOAK

Nothing has stumped Gates [former Secretary of Defense and CIA director Bob Gates — who served eight of the last nine presidents], who oversaw the $700 billion military budget until last year, quite like the country’s current Congressional gridlock and the government’s ineffective efforts to stop runaway deficit spending.

“We’ve lost the ability to execute even the most basic functions of government,” he said.

via “This is No Way to Run a Government!” – Gates | The Fiscal Times.

Colin Twiggs

Using a top-down approach, Colin identifies key macro trends in the global economy before evaluating selected opportunities using a combination of fundamental and technical analysis.

September 18, 2012

Canada: TSX60 wedge

The TSX 60 is headed for the upper channel of its broadening wedge at 725 on the daily chart. Bearish divergence on 21-day Twiggs Money Flow warns of medium-term selling pressure. Retreat below 700 would warn of a swing to the lower wedge border.

TSX 60 Index

* Target calculation: 700 + ( 700 – 640 ) = 760

Colin Twiggs

Using a top-down approach, Colin identifies key macro trends in the global economy before evaluating selected opportunities using a combination of fundamental and technical analysis.

September 18, 2012

S&P 500 hesitates

The S&P 500 hesitated at its upper trend channel. Follow-through below 1460 would indicate a test of the lower channel and support at 1400. Bearish divergence on 21-day Twiggs Money Flow continues to warn of a correction.

S&P 500 Index

* Target calculation: 1420 + ( 1420 – 1280 ) = 1560

Colin Twiggs

Using a top-down approach, Colin identifies key macro trends in the global economy before evaluating selected opportunities using a combination of fundamental and technical analysis.