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  • Pivotfarm Daily News Harvest 26th July 2010

    Markets in a Flash

    • Asian equity markets made gains over night. The Nikkei 225 closed up 0.77% while the Hang Seng closed up 0.12%.
    • European equity markets are flat today and are fluctuating between gains and losses. The Stress test results of Friday do not seem to have brought much direction to the markets.
    • Commodities are mixed and Oil has fallen 0.84% today. Natural gas is also down on news of gas production in China.
    • The GBP is strong today and has made gains against most other major currencies. GBP/USD is close to breaking out above its 5 month highs from April.
    • The EUR/USD is trading around its 2 month highs and is pushing against resistance on the upside due to the European stress test results.
    • US equity futures are very slightly down indicating a lower open at 0930ET.

    News Focus

    BP’s CEO is set to step down

    Tony Hayward, CEO of BP Plc, is expected to resign from his position within the next few hours. After his departure is announced he is expected to remain at the firm for two months while work on sealing the leak in the Gulf of Mexico continues. He is expected to leave the company with a payoff of just over $1.55m (£1m) and a pension worth just over $15.5m (£10m). The man who is currently head of BP’s oil spill response unit, Mr Robert Dudley, is expected to replace Tony Hayward after his departure. Mr Dudley would be the first American to take charge at Bp and would be faced with the job of rebuilding the oil company’s battered reputation.

    Coming up Today

    1000ET – New Home Sales

    Previous                        300 K                 Consensus                    310 K

    Consensus Range          280 K to 350 K

    Last month’s figures released for the month of May showed new home sales fall to their lowest level since 1963. The figure of 300,000 was nearly a 33% drop from April’s new home sales figure of 446,000. The figure released today is expected to show a small rise this month to 310,000. Anything above this consensus figure is good news for the economy and will be warmly welcomed by the markets. If this month’s figure is below 300,000 it will put bearish forces on the markets as it will show that consumers are not spending as much.

    Disclosure: no positions
    Jul 26 8:42 AM | Link | Comment!
  • The Week Ahead for the USD and US Markets

    The USD started the past week strongly, making good headway against most of its counterparts. However it dropped sharply on Thursday, from 83.3 to 82.6 according to US Dollar Index. The depreciation was mainly caused by Bernanke’s comments and a slew of European data showing signs of a recovery.

    The stock market ended the week strong S&P 500 and Dow Jones Indexes rose 3.2% and 3.5% respectively. The star of the week was the NASDAQ Composite making a steep incline up 4.2%.

    The increases are attributable to better better-than-expected second quarter earnings reports and better than expected European data.

    In comparison with the several bullish data releases reported in Euro Zone, recent US releases haven’t been quite as bullish for the USD and this trend is expected to continue next week. The week ahead will prove to be busy, especially on Friday. The GDP, Consumer Confidence and other important indicators will be released. Any each of them can have a significant impact on the US stock and currency markets.


    Monday, 26 July


    Today the New Home Sales is going to release following last week’s Existing Home Sales data. The New Home Sales peaked= at 504K in April. However, the figure for May decreased dramatically to only 300K, whose forecast was 446K. Now the expectation for June is adjusted to a lower level at 317K. Taking last week’s Existing Home Sales data (0.19M more than forecast) into account, the New Home Sales is likely to rise.

    Tuesday, 27 July


    At 10:00 am, the Conference Board Inc. will report its Consumer Confidence for July. This is an important report and a leading indicator of consumer spending (a major driver for overall economic activity). The forecast for this month has already been modified downwards to 51.5.


    Wednesday, 28 July


    The Census Bureau will release the Core Durable Goods Orders at 8:30 am. This release measures the total value of new purchase orders placed with manufacturers for durable goods. Expectations are for the release to come in at 0.6%

    Thursday, 29 July

    Jobless Claims is released by the Department of Labor on Thursday. The impact of this indicator fluctuates from week to week, with recent stress test results and other good data from the Euro zone traders will be paying attention and looking for some kind of confirmation from the jobs market.

    Friday, 30 July

    At 8:30 am GDP figures for the 2nd quarter will be released, GDP measures annualized change in the inflation-adjusted value of all goods and services produced by the economy and offers a broad measure of economic health. This is the earliest release for the 2ndquarter and thus tends to have the most impact on the markets. GDP growth for the 1stquarter’s third estimate was 2.7% in an annual basis, after being revised down from the previous estimate 3.0% and the initial estimate of 3.2%, which means an increase in imports and decrease in exports. Investors will judge the markets based on these data. At the same time, GDP price index, which can measure the level of inflation, grew annualized 1.1% from the previous estimate.

    At 9.55 am Consumer Sentiment for July 2010 will be announced, Consumer sentiment reflects the consumer attitudes to the economy. It is directly related to the consumer spending power. The consumer sentiment index released in the mid-July plunged, down to 66.5.

    Key words for the week: New Home Sales, Consumer Confidence, Durable Goods Orders, Petroleum Status Report, Jobless Claims, GDP, Employment Cost Index, Consumer Sentiment

    Disclosure: no positions
    Jul 25 2:31 PM | Link | Comment!
  • Pivotfarm Daily News Harvest 23rd July 2010

    Markets in a Flash

    • Asian markets closed higher across the board overnight following the strong performance yesterday in the US.
    • European equity markets are tentatively up this morning on strong European data. Real direction seams to be dampened as markets wait for the stress test results.
    • Energy commodities are controlled by the bears today, while commodities in the agriculture, metals and livestock sectors are pushing higher.
    • The GBP is strong today and has made gains against most other major currencies on the back of the better than expected UK GDP results. GBP/USD is approaching its 3 month high.
    • The EUR/USD is testing its 1.2970 resistance at its 2 month highs as the EUR is bolstered by strong economic data.
    • US equity futures are showing moderate gains suggesting a small rise at the opening bell.

    News Focus

    UK GDP figures better than expected

    Preliminary GDP figures released today for the second quarter of 2010 show that the economy has grown nearly twice as fast as economists had expected. The statistics released by the office for national statistics show that Gross Domestic Production has grown by 1.1% in the second quarter, this is nearly twice the rate that consensus expected of 0.6%. This Q2 result follows the 0.3% expansion in Q1 and is the largest growth rate seen since Q1 of 2006. The strong growth has been fuelled by the services sector and the construction sector.

    German Business Sentiment

    The IFO business climate index which surveys 7000 business executives has reported a 3 year high. The 106.2 reported for July is higher than last month’s figure of 101.8 and is a huge improvement over the consensus expectation that the index would fall.

    Coming up Today

    EU Bank Stress Test Results

    When these results are released later today it is expected that 10 out of the 91 banks tested are going to fail. The stress test results are expected to be release by the Committee of European banking Supervisors after European markets close at 1200ET.

    The results of these tests are going to be crucial to the economic outlook in Europe and therefore affect the World. This means that these results will have a large effect on the markets, if fewer banks fail and their balance sheets are stronger than thought this should be bullish for the markets as it sets up the economy for a stronger recovery.

    Disclosure: no positions
    Tags: stress tests
    Jul 23 8:16 AM | Link | Comment!
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