Money Flow Trading Method along with Risk Management

http://www.marketwatch.com/story/the...teid=rss&rss=1


The Dow’s biggest surge came under this president


Gain on Coolidge’s watch topped the jumps during Obama, Clinton eras

An earlier version of this report linked the second-largest Dow drop to the wrong president.

The sun rises behind the White House.
As President Trump settles into his new job, analysts are reflecting on how the Dow industrials surged and slumped under his 44 predecessors.
Who oversaw the biggest gain for blue-chip stocks?
MarketWatch and others have written about stocks generally faring better when there’s a Democrat in the White House, but the crown goes to a Republican, Calvin Coolidge.
Bespoke Investment Group has created the chart below showing the Dow Jones Industrial Average’s DJIA, -0.14% rise of 252% on Coolidge’s watch.

Coolidge took office in August 1923 after President Warren Harding’s sudden death and served until March 1929, when Herbert Hoover was sworn in.
The Vermont native occupied the White House during the exuberant Roaring Twenties. “Silent Cal” later acknowledged that he bore some responsibility for the Great Depression that began in late 1929, just a few months after he left the White House.
Read: Here’s an apolitical reason Trump won’t deliver Obama-sized stock gains
And see: How stocks perform in a new president’s first 100 days

Five other presidents saw triple-digit percentage gains for the Dow during their terms: Democrats Bill Clinton (227%), Franklin Roosevelt (197%) and Barack Obama (148%), along with Republicans Ronald Reagan (135%) and Dwight Eisenhower (120%).
What about the biggest slumps?
Coolidge’s successor Hoover, a Republican, experienced the largest-ever Dow drop (-83%), according to Bespoke’s data.
The second- and third-biggest falls also occurred under Republicans, with George W. Bush seeing a tumble of 22% and Richard Nixon, a 16.5% decline.
This story was first published on Jan. 23, 2017.

http://www.marketwatch.com/story/thi...teid=rss&rss=1


Why jitters over Trumps presidency may be overblown


Although Wall Street appears largely upbeat about President Donald Trumps pro-growth rhetoric, the euphoria that burst forth in the wake of his election has waned amid mounting uncertainty over his ability to deliver on his policy promises.
But at least one analyst believes the recent jitters over the Trump presidency are overdone.
The new pessimism in the market is unjustified and in some instances reflects misunderstanding or partial understanding of the complex political process underway, said David Woo, a strategist at Bank of America Merrill Lynch.

The strategist identified two main concerns that are hobbling stocks: U.S.-China trade tensions and the inability of the new administration to move quickly on fiscal reforms.

The new pessimism in the market is unjustified and in some instances reflects misunderstanding or partial understanding of the complex political process underway.

David Woo, Bank of America Merrill Lynch

On potential trade friction with China, Woo believes short-term risk has eased in the past few days as Trump has indicated that he will attempt to negotiate with Chinese authorities before adopting a hard-line stance, he said.

Woo believes that Trump and the Republican Party may take a more pragmatic approach in repealing Obamacare, President Barack Obamas key health-care legislation, than previously expected as they are aware that they dont have sufficient support in Senate to replace it once it is repealed, he said. Republican caution in tackling the issue could reduce the risk of jeopardizing an even more important political prize: fiscal reforms.

Read: Trump vows massive cuts in taxes and regulations

Tax reforms have been the centerpiece of Trumps vision to turbocharge the U.S. economy, but questions over how quickly the new administration can deliver corporate-friendly tax laws continues to cast a shadow over the new administration.

Still, the fact that the debt-ceiling extension expires on March 15 is likely to push Congress to act sooner rather than later on tax reforms, Woo said.

We suspect raising the debt ceiling before the fiscal reforms would be difficult politically and that Congress will likely be highly motivated to pass the fiscal reforms and raise the debt ceiling at the same time, said Woo, predicting that the fiscal reform bill could be passed into law as early as June or July.

Meanwhile, the U.S. dollar and bond yields are poised for more gains in the near term based on historical trends as well as the sustained U.S. economic growth.

In the one month following new presidential inaugurations, rates have a strong tendency to rise, the dollar to go higher, even if the stock market moves sideways to slightly lower, as the new elected government springs into action, said the strategist.


Recent economic data have continued to surprise to the upside. The number of people being laid off fell to 234,000 in the week ended Jan. 14, more than a 40-year low, while industrial production climbed 0.8% in December, the strongest increase since November 2014.


The latest batch of robust indicators could well pressure the Federal Reserve to raise interest rates as early as March, pushing the number of Fed hikes to four from the forecast-average 2.5 this year, said Woo. The combination of a healthier economy on top of rising interest rates will be dollar-positive and pave the way for the greenback to test higher.

The 10-year U.S. Treasury yield TMUBMUSD10Y, +0.62% which surged above 2% immediately following Trumps upset victory, has come off its postelection high to trade at 2.39% from around 2.60% mid-December. Bond yields move inversely to prices. The buck, measured by the ICE dollar index DXY, +0.34% , is up 2.4% since Nov. 8, but has retreated somewhat. The dollar has advanced on hope of economic growth and higher rates, which are attractive to investors. Yields have climbed for similar reasons.

In the stock market, skittishness was the theme of the day, with the S&P 500 index SPX, -0.27% down 6 points, or 0.3%, to close at 2,265 and the Dow Jones Industrial Average DJIA, -0.14% off 27 points, or 0.1%, to 19,799.

Good day

Hope everyone is doing well.

Here is the chart so long for visual.

Good Day Everyone

Last night I replied and posted this answer on another thread and I have copied and will paste it here now. Then I will review where the markets are this morning. Thanks for your posts this morning , KeepCalmfx.

Here is the FACTUAL take on this issue. I only state facts 100% accurate and not because I say so. The charts are moved by either fundamental facts such as the decision in London tomorrow about what the Parliament needs to do concerning Brexit. Whatever the decision GBP/USD will move and probably EUR/USD as well.

However the 100% accurate fact is the Money Flow. When we have Risk Off money flows in one direction for safety whether in USD/JPY or USD/CHF or 2 Year US Bonds and 5 Year US Bonds or 10 Year US Bonds or 30 Year US Bonds.


When we have Risk On the reverse takes place.


A move of 100 to 300 PIPS is not uncommon anymore.

Brexit and US Elections are two of those examples.

Charts are only an X Ray of the moment. That is how it works so whomever want to use the information please go ahead.

Our Thread confirms these facts everyday. President Donald John Trump wants a weaker US Dollar so that is what we can expect. Tonight it is below 100.000

5 Minute Chart on US Dollar Index

http://finviz.com/futures_charts.ashx?t=DX&p=m5

Have a great trading day. Time for bed.


Benjaminis

IMPORTANT NEWS TO READ AND UNDERSTAND AND WATCH HOW IT AFFECTS MARKETS.

http://www.zerohedge.com/news/2017-0...ops+to+zero%29

In a blow to Theresa May's ambitions to implement a "clean Brexit", on Tuesday morning UK’s Supreme Court ruled the UK Prime Minister can’t start the Brexit process without approval from Parliament, a decision that could potentially complicate her path toward a clear break from the European Union. Eight justices voted against the government and three voted in favor of it, in a decision that was widely expected.
http://www.zerohedge.com/sites/defau...0may%202_0.jpg
The case had been brought by a group of British citizens opposed to Brexit with the help of some of the U.K.’s top constitutional lawyers. Spearheading the legal challenge were British businesswoman Gina Miller and hairdresser Deir Dos Santos. Grahame Pigney, a France-based expatriate who used crowdfunding from more than 4,000 people to pay for lawyers, joined the suit as a co-party
The government responded that the ruling wouldn’t affect May’s plans to trigger talks to leave the EU by the end of March and the opposition Labour Party said after the judgment it wouldn’t seek to stop Brexit from happening. But Labour said it would try to amend any bill introduced by Mrs. May to kick off the Brexit process, possibly influencing how the U.K.’s new relationship with the EU will look.
According to the WSJ, while a majority of lawmakers voted to stay in the EU, many have said they won’t seek to block Article 50, which formally starts Britain’s exit from the EU, given the popular vote, in which 52% voted to leave. “The British people voted to leave the EU, and the government will deliver on their verdict—triggering Article 50, as planned, by the end of March,” a U.K. government spokesman said. “Today’s ruling does nothing to change that.”
Lord David Neuberger said any change in the law to put Brexit into effect must be made by an act of Parliament. “To proceed otherwise would be a breach of settled constitutional principles stretching back many centuries,” he said. He said the Supreme Court justices were ruling on the process of legally bringing the result into effect, and that the ruling had nothing to do with whether the U.K. should exit from the EU or the timetable.
While the outcome was not surprising, the case has been one of the most politically charged in decades. After the High Court ruled against the government in November, pro-Brexit activists called the decision an attempt to overturn the will of Britons who chose to break away from the bloc in a June referendum. The Daily Mail newspaper said the three High Court judges who ruled on the case were “enemies of the people.” But the landscape has shifted since then.
As previously reported, in December, Mrs. May won lawmakers’ backing to trigger the start of Brexit by the end of March after promising to give Parliament, the majority of whom backed staying in the EU, an opportunity to scrutinize her plan first.
Mrs. May has outlined a plan for a definitive break from the EU, saying she intends to take the country out of the EU’s single market for goods and services. Leaving the single market will create uncertainties for U.K. businesses that rely on trade with Europe, particularly financial markets, auto makers and aerospace.

Asked in an interview with a German newspaper this month whether the U.K. was seeking to become a tax haven with low levels of corporate tax, U.K. Treasury Chief Philip Hammond said the U.K. could change its economic model if it isn’t granted access to trade in the EU after it leaves the bloc.

Jeremy Corbyn, Labour leader, said in a statement after the ruling that Labour “will not frustrate” the process for trigger the U.K.’s exit.

“However, Labour will seek to amend the Article 50 bill to prevent the Conservatives using Brexit to turn Britain into a bargain basement tax haven off the coast of Europe,” Mr. Corbyn said. “Labour will seek to build in the principles of full, tariff-free access to the single market and maintenance of workers’ rights and social and environmental protections.” He added that the party would demand that the U.K. government lays out a plan for negotiations so parliamentarians could hold it to account.

Kelvin Hopkins, a Labour member of Parliament, urged his party not to seek to complicate the process of leaving.

“My colleagues in the House of Commons need to realize that if we are seen to frustrate the will of the British people, by opposing or delaying Brexit we could find ourselves in a position where we will never see a Labour government again,” Mr. Hopkins said in a statement.
Over four days of hearings before the Supreme Court last month, the government said it had the right to trigger Brexit because of the so-called royal prerogative, in which executive authority is given to ministers so they can govern on the monarch’s behalf.
The market's reaction has been subdued, with the resulting modest decline in sterling - the opposite of what would be expected from the adverse ruling - suggesting that the court's decision had been fully priced in by the market. In fact, as HSBC predicted ahead of the decision, "if ruling states that Parliamentary approval will be needed to start the Brexit process it will be “mildly negative” for the pound." as the government is prepared for this and “should be able to table a short and simple Parliamentary Bill in the coming days” meaning Article 50 could still be triggered before the end of March.
Sure enough, GBPUSD is now modestly lower following the announcement.
http://www.zerohedge.com/sites/defau...PUSD%202_0.jpg
And indeed, as Reuters writes, Theresa May's plans to start the process of Britain leaving the European Union by the end of March are unlikely to be hindered or slowed by Tuesday's Supreme Court ruling the government must seek parliamentary approval. In the ruling, judges on Britain's top judicial body upheld an earlier High Court decision that lawmakers had to give their assent before May can invoke Article 50 of the Lisbon Treaty which formally starts two-years of divorce talks.
However, the legal defeat, while an inconvenience and embarrassment for the government, is not expected to delay its Brexit timetable or, as some investors and pro-EU supporters hope, make it possible to stop Britain leaving the bloc. Part of this is because the opposition is divided.

"We will not block Article 50," Jeremy Corbyn, leader of the main opposition Labour Party which campaigned against Brexit, said last week. "All Labour MPs (members of parliament) will be asked to vote in that direction next week, or whenever the vote comes up." Not all Corbyn's colleagues may go along, but May can get the votes she needs for overall passage.

However, what the decision could do is give an opportunity for Labour and other lawmakers who oppose a "hard Brexit" - an agreement with the EU that puts immigration curbs above access to the single market - to have a greater influence on what the final deal should look like.
The greatest potential threat to May comes from parliament's unelected upper chamber, the House of Lords, where many peers remained strongly opposed to Brexit and do not have voters to worry about. If the Lords were to vote against approving the triggering of Article 50, the Brexit timetable could be severely delayed.
However, the government is confident the bill will pass through the Lords because there would be a constitutional crisis if unelected peers were to thwart the will of the people expressed both through the referendum and from their representatives in the Commons.

Morning Thoughts - Daily

The decision in Britain came and for the moment no major effects from it.

http://finviz.com/news.ashx

We will see later on if the markets will continue as they are now with mild Risk Off.


Benjaminis

http://seekingalpha.com/article/4038...nvestors-today


Summary
The gold price is intricately linked to bonds and currency.


There is currently a massive short on the 5 and 10 year US Treasuries.


An unwind will have major consequences on gold.


Much gets said about gold (NYSEARCA:GLD) recently, but if I were to be brutally harsh, I would say that 99% of the material I have come across talks about gold in context with Trump, the U.S. dollar, the economy, the gold futures market, geopolitical uncertainty or a combination of the formerly stated points. Now this is not to say that this material isn't useful. If anything, I always glean an insight or two every time I read an article on gold.

Now, I am lucky enough to have a fairly large audience who read my insights on a regular basis, who are probably used to having me harp on about the directionality of gold using gold futures positioning, rates and options. This article has something to do with rates, but it is not real rates only, which I have written about extensively here and here, but rather about longer dated Treasuries.

As without further ado, here is the chart you need to have a look at:
https://staticseekingalpha.a.ssl.fas...6221361115.png

This chart illustrates the net positioning (longs minus shorts) of two of the most widely traded long-term Treasury futures. In this case, they are the 10 year Treasuries and the 5 year Treasuries. I have added up the net positioning in both the futures contracts to provide some scope.

This chart goes back five years and we see that the speculators, in this case hedge funds and CTAs are massively short Treasuries. So a natural question to ask is: How does it look on a longer time frame? To asnwer that question, I have this:
https://staticseekingalpha.a.ssl.fas...8079362903.png

The traders haven't been THIS short Treasuries in 20+ years! This is your black swan folks - a four sigma event as pointed out by Deutsche Bank.

So how does this tie in with gold and why is this development the most important recent development in gold? The answer is multivariate and in the most concise of terms, this chart is important because mean reversion would dictate lower yields, which in turn should benefit gold tremendously.

Now, for the more detailed explanation for those who care:
The price of gold is driven by the U.S. dollar (intuitive correct) and real rates (nominal minus inflation). When nominal rates move quickly higher in the absence of inflation, gold gets sold. Why? Because gold is a store of value and if you earn more interest than what inflation takes away by keeping your money in a bank, gold becomes less attractive to hold. Vice versa, if inflation is high and your dollar, or pound, or rupee loses its value faster than the amount of risk free return you can earn, gold becomes a natural asset to own to prevent loss of your purchasing power. For this reason, countries such as India and China have had a long history with purchasing the yellow metal because these cultures are intimately aware of the ravages of inflation.


Over the past six months the US 10-year rates shot up from 1.4% to 2.6%. Inflation obviously hasn't moved as quickly. The resulting increase in real rates has been sharp and this has weighed heavily on gold. In that same time frame, the US dollar has continued to strengthen, also putting an anchor on gold prices.
Here is a look at how real rates are inversely correlated with gold. When real rates (rates adjusted for inflation) are moving higher, gold performs poorly and vice versa.
https://staticseekingalpha.a.ssl.fas...8353568068.png


Now with this context, lets revisit the chart showing the massive short in Treasuries. As many of you have seen recently, following the election, the trade has been to "Buy America". So investors have bought US dollars and US equities. But curiously, one of the ancillary trades that has emerged is front running the expected stimulus package which would naturally be financed by bonds. For this reason, bond prices started moving higher - the reflation trade. This trade has become so big recently, that everyone believes in it. And the Treasuries as a result have become shorted as a result, I doubt that there remain many people who would still want to short the Treasuries here.


This has left with a rather one sided outcome, which is that yields have to decline. Interestingly, the 10 year yields have already started declining recently along with the US dollar as some of the steam comes out of the "Buy America" trade. Usually the dollar and yields move inversely, but this has been one giant correlated trade post elections. As the USD is sold, the 10 years get bought and as the 10 years get bought, the yields fall. As the yields fall, the shorts on the treasuries get squeezed and as the shorts in treasuries get squeezed, yields fall further. When yields decline, real rates decline (because inflation has remained relatively constant in the past two months). When real rates decline, gold goes higher. For this reason, the short interest in the treasuries is THE chart to watch if you are interested in determining the price action in gold going forward.

Disclosure: I/we have no positions in any stocks mentioned, but may initiate a long position in GDX CALLS over the next 72 hours.
I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

COMMENTARY FROM BENJAMINIS: I repeat the most important part of this informative article.



This has left with a rather one sided outcome, which is that yields have to decline. Interestingly, the 10 year yields have already started declining recently along with the US dollar as some of the steam comes out of the "Buy America" trade. Usually the dollar and yields move inversely, but this has been one giant correlated trade post elections. As the USD is sold, the 10 years get bought and as the 10 years get bought, the yields fall. As the yields fall, the shorts on the treasuries get squeezed and as the shorts in treasuries get squeezed, yields fall further. When yields decline, real rates decline (because inflation has remained relatively constant in the past two months). When real rates decline, gold goes higher. For this reason, the short interest in the treasuries is THE chart to watch if you are interested in determining the price action in gold going forward.

Comments from Benjaminis: We should start following this chart as we look at our Trade Plan to go Long Gold 100 Ounces and Long Silver 5000 Ounces.

Time for my breakfast now and reading of the local newspapers. Have a great day.

This has left with a rather one sided outcome, which is that yields have to decline. Interestingly, the 10 year yields have already started declining recently along with the US dollar as some of the steam comes out of the "Buy America" trade. Usually the dollar and yields move inversely, but this has been one giant correlated trade post elections. As the USD is sold, the 10 years get bought and as the 10 years get bought, the yields fall. As the yields fall, the shorts on the treasuries get squeezed and as the shorts in treasuries get squeezed, yields fall further. When yields decline, real rates decline (because inflation has remained relatively constant in the past two months). When real rates decline, gold goes higher. For this reason, the short interest in the treasuries is THE chart to watch if you are interested in determining the price action in gold going forward.

From Post 1499 in order to complete the thoughts on my last post.

Now off for breakfast. Print out and keep these two articles for future reference.


Benjaminis

http://www.zerohedge.com/news/2017-0...ops+to+zero%29

Snippet:
The Dollar Index Is At A Crucial Level
http://www.zerohedge.com/sites/defau.../picture-5.jpg
by Tyler Durden
Jan 23, 2017 8:41 AM


The U.S. Dollar is testing the breakout point of its 20-month trading range.
On an Inauguration Day in which the overriding theme of the incoming Presidents speech was one of protectionism, it was fitting that the Chart Of The Day dealt with the U.S. Dollar protecting its own chart turf. Following the Dollars explosive rally from 2014 to 2015, it settled into a 20-month consolidation. In the case of the Dollar Index (DXY), this relatively tight range stretched from roughly 92.5 to 100.5. In the frenzied post-election action in the financial markets, the DXY was finally able to break out above the top of its range. And after a brief test of the 100.5 breakout area in early December, the DXY traded as high as 103.82.


In recent weeks, however, we have seen it pull back to where it is once again presently testing the 100.5 breakout level.
http://68.media.tumblr.com/6857a93e3...sq14jh_500.jpg

Many folks, including ourselves, have surmised that the 20-month trading range was likely just a digestion of the 2014-2015 rally and would put the Dollar into position to launch its next leg higher. For that theory to be correct, holding this breakout area may be crucial. Should the DXY indeed be successful at holding this level, a longer-term, more significant up-leg is certainly in play.

Of course, if the DXY fails to hold its breakout level, then a false breakout is the focus. And the downside potential following a false breakout could be considerable. Either way, a lot could be riding on this test right here in the Dollar.
http://www.zerohedge.com/sites/defau...UMPWEEK1_0.jpg
Additionally, over the years, we have learned to judge each security and asset on its own merits. That is, the practice of inter-market, derivative analysis, or directing ones investment in an asset based on the movement of another is vastly overrated. That said, if there is one asset that wields more influence over the behavior of others, it is likely the Dollar. Therefore, if one can correctly analyze the path of the Dollar, they have a decent shot at getting other assets right.

And that reality makes this current test that much more consequential.

Comments from Benjaminis:

5 Minute Chart on US Dollar Index

http://finviz.com/futures_charts.ashx?t=DX&p=m5

I am back at my work now in my home / office. I have 2 open Positions on US 30 now. My DRAW DOWN at this second is $717.00 US Dollars. I do nothing other than keep my positions on.

My 2 Limit Outs are just over $1000 US in profits. My balance is now $62,714.04 US Dollars with the Draw Down.

I started trading this account on December 20, 2016 so Saturday will be 49 days. My new goal is PLUS $65,000 US so Net would be 30% or 15 % for two months of trading Forex on my Demo Account in real time.

Now to catch up on the markets.

Will someone look at the chart that was suggested this morning so we can have it available each day as we look at starting to Trade Gold and Silver.

Thank You.



Benjaminis

Hello dttsomh

You could try to share your thoughts here from time to time and if you are able to direct traffic here it would be good since the more that participate here the better we can help each other.


Thanks


Benjaminis

I am posting here an excellent chart of USD/JPY !!!

http://www.forexfactory.com/attachme...9&d=1485273445

Europe is closed in 14 minutes however for myself I use Noon as not everyone goes home at 11:30 AM sharp in Forex while the Equity Markets stop for sure at 11:30 AM

Where is everyone ?


Benjaminis

From Post 1462

Here are our ONLY 4 Trade Plans until March 31, 2017.



Quoting mbleska
Screenshot1.png;2149784 Hi, I took a picture of trades I did last week and I added my comments about the possible problems (as mentioned in post 1420). I have learnt here that it is important to read news about what is going on in the world and try to make sense out of it (even though it takes a lot of time), then one is able to come up with a plan. The other thing is to stick to that plan and not being afraid of a loss. {image}

Actually mbleska , for the moment until you are able YOU do not have to take one minute of your time to come up with a plan.

We have until March 31, 2017 , 4 TRADE PLANS.
(1) Short US 30 - 100 units - STOP LOSS - $1000 US Dollars - Risk Reward at least 1 to 1 maybe as high as 1 to 3. Lower stops once you have minimum profit.

(2) Short USD/JPY - 100 units - STOP LOSS - $1000 US Dollars - Risk Reward at least 1 to 1 and LOWER STOPS to always lock in minimum profit of $250 US Dollars.

(3) LONG Gold - 100 Ounces - STOP LOSS - $1000 US Dollars - Risk Reward at least 1 to 1 and as High as 1 to 3.

(4) Long Silver - 5000 Ounces - STOP LOSS - S1000 US Dollars - Risk Reward at least 1 to 1 and as High as 1 to 3.

THAT IS IT !!! Just have the DISCIPLINE to do it !!!

AS FOR FEAR OF LOSS , FIRST LEARN ON YOUR $50,000 US Dollars FXCM UK Demo Account. Unless you are really really good now STOP trading Real Funds.

This is about learning good habits and getting confidence then you will trade much more effectively with your own funds and I strongly suggest a Minimum Trading Account of $10,000 US Dollars and then you can NEVER have on more than 20% of your capital or no more than 2 positions of 100 units at any one time.


Benjaminis

http://www.rasmussenreports.com/publ..._establishment

Snippet:
Tuesday, January 24, 2017

President Trump in his inaugural address charged the Washington, D.C. establishment with long profiting at the expense of the average American, and voters strongly agree.

Seventy-two percent (72%) of Likely U.S. Voters agree with this statement in Trump’s speech: “For too long, a small group in our nation’s capital has reaped the rewards of government while the people have borne the cost.” A new Rasmussen Reports national telephone and online survey finds that just 17% disagree, while 11% are not sure. (To see survey question wording, click here.)


(Want a free daily e-mail update? If it's in the news, it's in our polls). Rasmussen Reports updates are also available on Twitter or Facebook.
The survey of 1,000 Likely Voters was conducted on January 22, 2017 by Rasmussen Reports. The margin of sampling error is +/- 3 percentage points with a 95% level of confidence. Field work for all Rasmussen Reports surveys is conducted by Pulse Opinion Research, LLC. See methodology.


Benjaminis

http://www.focus-economics.com/regions/euro-area

Snippet:
Economic Snapshot for the Euro Area
December 21, 2016
Economic recovery continues in eventful 2016 but more political hurdles loom
Despite a year defined by a migrant crisis, populist movements, Brexit and the election of Donald Trump, the Eurozone’s tepid economic recovery continued in 2016. The third estimate for Q3 GDP confirmed that the economy grew a steady 0.3% quarter-on-quarter, which followed Q2’s 0.3% expansion and Q1’s 0.5% increase. The Eurozone’s growth story has remained consistent throughout the year, driven by a strengthening domestic economy while the external sector has been lackluster. Improvements in the labor market, low inflation and ultra-easy monetary policies have boosted growth at home, but investment has yet to fully take off.

Data for the final quarter of the year point to continued gains in the domestic economy. In November, economic sentiment inched up, despite the heightened risk environment, and the composite PMI rested at the highest level in one year in December. Moreover, the unemployment rate fell in October. Leading indicators have yet to show any obvious sign of contagion from 2016’s political shocks and FocusEconomics panelists see growth inching up to 0.4% in Q4.

Snippet:
Heading into 2017, economic prospects remain encouraging. The recent depreciation of the euro should bode well for the region’s exports. In Italy, steps taken to clean up the banking sector could help solve some of the structural issues in one of the Euro area’s weakest economies and the extension of the European Central Bank’s quantitative easing program ensures that monetary conditions will remain supportive. Yet, 2017 is unlikely to be a year dominated solely by economic events.

A crowded election cycle within the Eurozone combined with unknown policy directions in key trading partners means that political developments will likely rule the narrative going forward. France and Germany, the region’s largest economies and two countries that have been targets of violent attacks in 2016, will hold elections and Eurosceptic candidates are likely to make inroads. In Germany, forming a coalition government is expected to be more difficult, while far-right candidate Marine Le Pen is seen as making it to the second round of the presidential vote in France. Italy is likely to see an early vote, which could take place in 2017, after the resignation of Matteo Renzi this month and the Netherlands will also hold elections.

Outside of the Eurozone, a lack of policy guidance from key trading partners, the United Kingdom and the United States, convolutes the outlook. The UK has yet to give a clear direction on the tone or shape of Brexit negotiations and the new trade agreement will dictate economic implications for the Eurozone. In the U.S., the implications of Donald Trump’s election are hard to decipher, as Trump flip-flopped on many issues. Any enacted protectionist measures could hurt the Euro area’s growth, though stronger activity in the U.S. could also support the Eurozone’s exports. Despite the number of looming unknowns, our panelists see growth in the Eurozone remaining broadly steady at the start of next year and project a 0.4% expansion in Q1 2017 over the previous quarter.


Tepid growth expected in 2017
Growth is seen slowing slightly in the Eurozone in 2017, after coming in at an expected 1.6% in 2016. A rise in inflation will reduced tailwinds to consumption, and investment growth is likely to slow amid heightened uncertainty. However, still easy monetary policy and improvements in the external sector will support only a slight slowdown to 1.5%. The 2017 forecast was raised 0.1 percentage points from last month’s publication. Looking ahead, GDP growth is seen stable at 1.5% in 2018.

Looking at the individual countries in the region, the majority of the economies saw better prospects for 2017 this month. 10 countries had their forecasts upgraded, including Greece, Portugal and Spain. Forecasts were kept the same for major players France, Germany and Italy, along with 6 other economies.
Luxembourg, Ireland and Malta are expected to be the best performing economies in the Eurozone in 2017, with growth rates of over 3.0%. On the flip side, Finland and Italy are expected to be the worst performers with growth rates of near 1.0%. Among the remaining major economies in the region, Spain will grow the fastest at 2.3%—continuing to outperform most of its Eurozone peers—and Germany will expand 1.4%. France is seen growing 1.2%.


See the full FocusEconomics Euro Area report
GERMANY | Merkel announces intention to run in 2017
The abrupt slowdown in the German economy in Q3 was confirmed by more complete data released by the Statistics Institute in November. Continued strong private consumption growth, which benefitted from record pension increases, strong wage growth and low inflation, was not enough to overcome the negative contribution to growth from net trade. Exports contracted in Q3, brought down by increased uncertainty in the international trading environment. Early data for Q4 paint a mixed picture with consumer confidence and retail sales trending downwards, while business confidence and industrial production stay robust and exports improve. In the political arena, Angela Merkel announced her intention to seek a fourth term as Chancellor in next year’s parliamentary election, which is expected to be closely fought in light of the rise of the far-right AfD party.



Benjaminis

I have internet conectivity problems at home
I cannot access my charts/accounts for the past hour.

I understand !!! That is fine. Last night I arranged, most likely to contract for the website developed along the lines of Forex Factory.

I will have a cost and definite answer by Friday. Just letting those that post here know that the plans are moving ahead.

Most sections will be FREE ACCESS and only the live hands on trading and research sections will need a User Name and Password and a subscription of $50 US with no contract needing to be signed.

That should make it much easier to teach and share and organize information.


Benjaminis

I shorted my Third Position SHORT US 30 and I shorted One position of 100 units of USD/JPY so I have 4 positions on now with Total Draw Down of $2563.12 US Dollars and I can wait for the US 30 to reverse.

I have 92.93% of margin available so no danger of Margin Call (SMILE)

Benjaminis

The broader U.S. stock market has traded in a narrow range for over a month, as investors wait for more details about President Donald Trump's political agenda, especially corporate tax cuts, deregulation and government spending. Equities had rallied sharply following the election on hopes that Trump's proposals would become law.


Dow since Nov. 8http://fm.cnbc.com/applications/cnbc...e_election.pngSource: FactSet
"Optimism needs to dissipate before we go up again," said Bruce Bittles chief investment strategist at Baird. He noted that short-term liquidity drops when optimism in the market remains high for a long time. "We need to replenish that."

Trump told U.S. automakers he will cut taxes and regulation, a day after saying he wanted to cut regulations by 75 percent, or "maybe more."
"I suspect that the inevitable difficulties to be encountered by the GOP in hammering out the details of a massive stimulus policy and newfound uncertainty surrounding the Fed as a consequence of a major shift in fiscal policy will precipitate a wave of more violent moves for equities that mirror some of the skittishness already exhibited by other asset classes," said Jeremy Klein, chief market analyst at FBN Securities.

In economic news, the IHS Markit Manufacturing PMI for January rose to 55.1, from 54.3 in December, lifted by a surge in new orders. Existing home sales fell 2.8 percent in December.

Overseas, European equities rose mostly, with the pan-European Stoxx 600 index advancing 0.25 percent. In the United Kingdom, the Supreme Court said that the government will need parliamentary approval to start Brexit negotiations with the EU.

Hi Benjamin

Gold & 10 Yr T Note?
On which time frame?
Should I add anythingelse?