Moneymunch Team

The Moneymunch team is a group of financial analysts and traders who provide a range of financial services, including market analysis, research reports, and trading guidance. With their expertise and knowledge, the team helps investors and traders make informed decisions in the financial markets. Trust the Moneymunch team to provide reliable and effective financial advice to help you achieve your financial goals.

The Financial Waves Monthly Update: Nifty, Gold, Bank Nifty…

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Following is an overview of “The Financial Waves Monthly Update” which is a 18-page report and has 12 different charts giving not only Indian but Global outlook using techniques like Elliott wave, Time Cycles, Fibonacci Projections, Channels, Sensex in Gold (real money), PE ratio, PB ratio, etc.

nifty wave

In September we saw strong pullback in Indian markets from lower levels and prices rallied by almost 3000 points on Sensex and 1000 points on Nifty. However, after approaching the multi-year resistance line which has been ending the up move since more than 5 years worked this time as well and prices finally closed the month within the body of the previous month. If we ignore the closing and consider only highs and lows, we can see a higher high and higher low formation. A move above … will be a strong positive sign. Sensex in Gold – real money gives correct picture of why the majority of stocks are at new lows!
In current research we have showed Bank Nifty relative chart along with Nifty which shows that why Banking sector as a whole should ……… for months to come. …….that will be starting probably post mid 2014 …
Sensex PE ratio / PB ratioa tool many believe to be a fundamental measure but for us it provides more of technical perspective and helps to understand how markets have been trending along with it.
On currency front, when everyone was panicking we have mentioned 70 levels as very important as it is 1.618 * wave i and we can clearly see prices stopped its uptrend near this level and formed an inside monthly bar. This indicates there is halt in the …..
International precious metals, both Gold and Silver has formed a monthly inside bar and should also continue to move sideways for digesting the multi-month down move. This time we are showing Silver long term chart and why this metal should also underperform along with Gold. The euphoria has slowly subsided in previous metals along with Indian currency as well.
US markets have not been doing much and all the negative news about US Government shutdown has not impacted their markets at all. In fact S&P500 closed positive by more than half a percent when the concerns were looming about US default a probability if they fail to raise the debt ceiling. It seems US stock market is not too concerned about what economists believe about Government shutdown and debt, after all for us markets are supreme and news is just a technical indicator.
This time our stock pick from Indian markets is Capital Goods heavy weight L&T and we should have ….. value of this stock in future. Overall, September had lot of emotional flux for both bulls and bears trading Indian markets and was relatively muted for other assets most of which formed an inside bar – DJIA, Gold, Silver!
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Fed’s Fisher says taper decision is fuelling uncertainty

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taper-decisionIf Richard Fisher, head of the Dallas Fed, is sure of anything, it’s that when it comes to monetary policy, uncertainty matters.

That was an argument Mr Fisher says he raised last month when his colleagues at the US central bank met to decide whether to pull back the Fed’s stimulus program.

In a speech on Thursday, Mr Fisher explained that the Fed’s decision not to taper could lead people to question their understanding of the rules:

The recent decision of the Federal Open Market Committee (FOMC) to maintain the pace of its large-scale asset purchases in the face of a generally improving labor market outlook and a widespread perception within financial markets, right or wrong, that the Fed had telegraphed a dialing back of the rate of purchases may have increased uncertainty about the future path of monetary policy. That was one argument raised against the decision not to taper. I know, because I made the argument, and I was not alone.

While the Fed’s decision confused the markets last month, Mr Fisher said that bigger surprises – which he calls Black Swans – can create paradigm shifts in the markets and lead to crises. He lists events such as the Great Depression and the 2006 housing market collapse as examples and, worryingly, says that a default on US debt would be in that league:

If the U.S. government defaults on its debt later this month, we’ll have a third example. The unthinkable will have become real, and the “full faith and credit” of the United States will be a mirage rather than accepted fact.

Mr Fisher does not have a vote on the Fed’s Open Market Committee this year.

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Typical Symptoms of Ego-Tizing Trading

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  • ego-trading

Not placing in stoploss. The ego dose not plan to be proven wrong.

Pausing before putting on a trade. The ego wants reassurance before it begins.

Over-trading. The ego desires to prove itself big time.

Obtaining stuck in a trade. The ego has intertwined itself through a trade and is holding on for dear life. It are unable to cut out. The ego dose not want to be incorrect.
Putting to a losing trade. The ego digs its hole deeper in a massive effort to crawl out.

Grabbing a profit too soon. The ego wants a pat on the back

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EURUSD moved nicely higher yesterday after the ECB press

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eur-usd-analysisEURUSD went well higher yesterday just after the ECB press meeting that finally sent EURUSD out of the range. Therefore, we consider that Euro will maintain higher within current wave (v) towards 1.3680. When those levels are examined we need to be aware of a bearish reversal in minimum three legs. Depending on Elliott Wave Principle, after every five waves move correction takes place. But break of 1.3500 price level will suggest that in Euro there is already top in place.

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forex-eurusd

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Market overview: US unemployment claims below forecasts

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us-unemployment   The monthly unemployment report is likely to be a victim of the US government shutdown

  1330: Initial weekly US unemployment claims rose by 1,000 to 308,000 in the week ended on September 21st, versus the 315,000 expected by economists.

  1320: Vodafone’s CFO will step down from his role of nine years once the sale of its stake in Verizon Wireless completes. The stake, which is being sold for 80bn pounds, is expected to be sold by March 2014. The FTSE has risen 24 points to 6,461.50.

 1242: Overnight the Chicago Mercantile Exchange (CME) hiked its margin requirements for operators in the Dow Jones, SP 500 and Nasdaq E-Mini futures contracts by nine per cent. According to Zerohedge that may be a result of President Obama’s remarks to the effect that Wall Street has not yet recognized the seriousness of the current impasse on Capitol Hill.

1120: A little more colour on Aviva, in remarks to Sharecast Ronni Chopra – Head of Strategy at Trade next – pointed out that in the medium-term the stock might still be a potential take-over target. FTSE 100 up 17 to 6,454.

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Currency Strength and Central Bank and Gold?

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gold-investorsThe crucial story for gold investors is not the pure inflation rate of the dollar, but something much deeper. When you focus on gold, you should sharpen the focus of your lens on the dollar system. As history confirms, gold can both increase and decrease under inflationary circumstances. It is also the case when considering the opposite scenario, which is deflation. It all depends on how well the dollar system is performing (how well is both dollar as a currency and dollar understood as dollar denominated assets; bonds, stocks, derivatives, credits etc.).

The easiest way to look at the dollar is to compare it as a currency against all the other currencies. This, in fact, was the best way to assess the dollar from 2002-3, when it started to lose its value against other currencies and gold began its long and spectacular upward climb. This took place while a bubble formed in dollar denominated assets, especially real estate.

In 2008 there was a radical shift. Shortage of liquidity in the financial markets lead to massive selloffs of assets in all markets, with emerging markets being hit the most. That’s when the dollar got a gust of air in its sails, and increased significantly in value. Under current circumstances, the dollar – as a currency – does not appear to look that bad. Even when compared to other strong currencies, the dollar looks firm. The central bankers who print the British pound and the Japanese yen seem to be devaluation devotees, and the euro is still recoiling from the turmoil of numerous internal problems.

Therefore, when looking purely at the currency markets, the dollar does not appear as endangered as it may seem. However, as we hinted at the beginning, this is not the whole story. We have to assess not only the dollar against other currencies, but the entire dollar system, that is dollar denominated assets. The dollar may be a better investment than the British pound, but the big question is whether gold may be an even better investment than the dollar even when it outperforms the pound.

So how is the dollar system performing internally? One of many possible things to focus on is the interventionist policy of the government, especially the central bank. This can tell us how firmly the economy stands.

In recent years we witnessed tremendous expansion in the Fed’s activity. Since it all comes down to money creation (supplied for financial papers and bonds), this influence is rather negative for the whole dollar system. This means that from the economic point of view, the outlook for gold is quite favorable for the coming years.