Vinayak

US PPI - Thursday The PPI has is a leading indicator of inflation and it impacts company's profits positively when it rises. It is understood that a rising PPI increases costs to consumers, but the rising PPI benefits stocks and the currency; in this case the S&P 500, Dow Jones and the US dollar. Euro zone Core CPI - Friday This is the Core CPI we are talking about and so food and energy sectors are not included. Higher CPI means that one Euro buys less goods. The ECB may then decide to raise the interest rates. US Core CPI - Friday The exact same effect of the Euro zone CPI but this time the Fed will decide whether to increase or decrease interest rates based on the outcome.

Nikkei Will Soar; Yen Will Fall Against The US Dollar The Nikkei is being driven by the effects of the devaluation of the Yen. The Nikkei rose 275 points or about 2.5% on the last Monday in February 2013. In the first week of March it actually hit a 4.5 year high by reaching the 11968 level. There are a couple of reasons why the Japanese index is soaring. Firstly, Japanese exports are now cheaper. Secondly, Yen based stocks are gaining due to inflation. Developed economies such as the United States and those in the Euro zone have increased their demand for Japanese exports due to the lower prices and so profits for these Japanese firms rise. Read the rest right here: http://www.traderslaboratory.com/forums/forex-trading-laboratory/474-usdjpy-discussions-3.html#post176375

Nikkei Will Soar; Yen Will Fall Against The US Dollar The Nikkei is being driven by the effects of the devaluation of the Yen. The Nikkei rose 275 points or about 2.5% on the last Monday in February 2013. In the first week of March it actually hit a 4.5 year high by reaching the 11968 level. There are a couple of reasons why the Japanese index is soaring. Firstly, Japanese exports are now cheaper. Secondly, Yen based stocks are gaining due to inflation. Developed economies such as the United States and those in the Euro zone have increased their demand for Japanese exports due to the lower prices and so profits for these Japanese firms rise. I agree I did post an article here about the Yen appreciating against the dollar, but the market is so erratic that it has forced me to consider another view. It was a view that I had already approved of since so many Wall Street analysts seemed to think so. Nonetheless, I did raise a lot of valid points in that USD/JPY article. Although,FX Street might turn out to be right they did not highlight the right reasons why. And I'll give you those reasons now. I do get a lot of stuff right too. Why has the Yen been volatile? The BOJ Rate was unchanged and even the Asset Purchase of 76 Trillion Yen stayed the same last Thursday. It was stressed that "aggressive monetary easing" will be pursued by the BOJ, but this still did not change the decline in the Yen that followed. I've changed my opinion about the trajectory of the Yen, but why do a lot of speculators not share the same view. The USD/JPY slid because investors are fed up with the lack of action on the part of the BOJ. Another reason is that although it is true that investors are well aware of Kuroda's intentions, he is not confirmed yet. Moreover, the Kuroda factor has already been discounted for by traders. Kuroda not being confirmed yet with two weeks to go until he takes office means that there is a risk for investors and this will be a near term issue for Abe's plans to weaken the country's currency. Nonetheless, as confirmation day edges closer you will see the USD/JPY surge upwards and a lot of speculators trading the currency pair. Conclusion: Nikkei has tremendous room for growth The Nikkei has a long way to go to get to its pre-2008 level. The good news is that the Japanese index has rallied only half the way while a lot of global indexes have hit the pre-recession levels or are just about to. The Nikkei is fully expected to make those gains necessary to hit pre-2008 levels. The April Rate decision is what traders are looking forward to as it will be a platform for Kuroda and his camp to leave a sign of things to come when they do take over. Kuroda wants to turnaround the sluggish Japanese economy quickly.

Hewlett-Packard (HPQ) is in the midst of a turnaround that CEO Meg Whitman has talked about extensively. I know that HPQ has been winning the war against its long-time rival Dell (DELL), and I did find HP to be undervalued, but let's take a look at the tech giant's liquidity. When a firm has strong liquidity ratios, it portrays to an investor that it has the cash reserves to fund growth in the future. For a PC maker like HP that is looking to shift successfully to mobile, this is absolutely essential. But the liquidity numbers that I came across for HP are not very encouraging. Keep in mind, however, that this is just one of the many ways to analyze a stock. A lot of the metrics that I have here for your convenience is paid material on other sites. For instance, stock research website YCharts requires you to be a Gold or Pro Platinum subscriber to get figures like the ones highlighted in this article that go back so many years. I've always wanted to ensure that investors got some value out of my articles and I hope this post accomplishes that to the fullest. Read the rest of the article here: Hewlett-Packard: Liquidity Analysis Paints A Bearish Picture

HP and the PC's slow demise “We are committed to this business,” Whitman said. “We are going to compete on differentiation, whether that is form factors, increased focus on mobility, a multi-OS strategy, multi-chip strategy, frankly relevant to various industries, we’ve got great response to our ElitePad 900 that can be customized by industry and then services.” Even though, I think Whitman is great, I can't help but feel as if HP has missed the tablet/smartphone/mobile device train. It's a big question mark if HP can catch up. I doubt if HP can compete with the likes of Apple (AAPL) and Google (GOOG) in mobile/cloud services. This brings me to some Gartner Research data that I wish to share here: Gartner Says Worldwide PC Shipments in Fourth Quarter of 2011 Declined 1.4 Percent; Year-End Shipments Increased 0.5 Percent Gartner Says Declining Worldwide PC Shipments in Fourth Quarter of 2012 Signal Structural Shift of PC Market Really need to thank the folks at Gartner Research for this snapshot of what the future will be like and this will greatly influence what we discuss here on this "Tech Picks from the Valley Trader" thread.

HP: Revenue/Margin Levels are declining Personal Systems revenue decreased 8% year over year (YOY) with a 2.7% operating margin. Commercial revenue was down 4%, and Consumer revenue went down 13%. Total units declined 5% with Desktops units rising 10% and Notebooks units falling 14%. Printing revenue slid 5% YOY with a very healthy operating margin of 16.1%. Total hardware units fell 11% YOY. Additionally, Commercial hardware units declined 6% year over year. Also, Consumer hardware units are falling with being 13% less than they were this time last year. Enterprise Group revenue declined 4% YOY and it had a 15.5% operating margin. Networking revenue rose 4%, Industry Standard Servers revenue slid 3%, Business Critical Systems revenue fell as much as 24%. Then Storage revenue fell 13% and Technology Services revenue was the only one that reported a measly decline of 1% YOY. Enterprise Services revenue declined 7% YOY with a 1.3% operating margin. Application and Business Services revenue also fell 9% YOY. Even Software revenue has been falling and it was a negative growth of 2% YOY with a 17.0% operating margin. It was offset by Support revenue increasing 11% but then again license revenue fell 16% and furthermore, services revenue declined 8% YOY. The only positive was that HP Financial Services revenue grew 1% YOY as a 1% upsurge in net portfolio assets was set off by a 25% decline in financing volume. This line of business had a 10.6% operating margin which is an encouraging sign for the large cap tech stock. I used the HP website as my source for this giant post.

Anybody sold EUR/USD on the NFP announcement? It’s up again and and closed above 1.2980 - a near term support level for me. Actually I made some profits shorting EUR after the NFP release. It was a pretty wild week indeed.

Strategy: Trading Off the Daily Chart Before digging deeper, I'd like to share where I got this strategy from: "Trading Off the Daily Chart" strategy can be found on Forex Strategies Revealed website. I've used it in the complicated world of Forex trading and its been pretty effective. The author makes it look like a simple strategy to follow, but it does make use of advanced trading techniques. It is actually, all about riding the trend. 15 minute charts and shorter time frame ones are nice to have, but they don't tell the whole story. A lot of Forex traders myself included are high frequency traders and the near term works best especially when you have a day job to go to. This is where analyzing a daily chart and placing a few well placed trades here and there will be better than looking to chase pips. This is one of the strategies I use to achieve my goal of making money consistently in different time frames. I have been able to make money in short bursts and also in positions that expire in an hour. In Forex, this is not such an easy task to accomplish. How it works It is all about identifying the primary trend or the long term trend at the start. This takes time and some education (which can be found on Trader's Laboratory). You'll then have to determine continuation signals I usually do this with a tool that pinpoints supports/resistance. Additionally, Moving Average Convergence Divergence (MACD) indicators come in handy. The good thing about this strategy is that it offers reliable long term signals while providing Forex traders with entry points.

Draghi strikes again. Watch this thread for details.

I've been pretty bullish on the S&P 500 and this was met with some criticism here on Seeking Alpha. Anyway, it's not just the S&P that has me excited, but also the German DAX (DAX). As of late, speculators have been switching their focus from Europe to the U.S. with an occasional glance at what is happening in the third largest economy on the planet. Germany leading growth in the eurozone Germany is the three hundred pound gorilla in the eurozone. While it is true that GDP dropped in Germany, the thing that eurozone investors will find encouraging is the positive statements coming out of the Bundesbank. The Bundesbank and German ministers have estimated that Germany will grow over 0.5% in the first quarter of 2013. Read the rest of the article here: DAX Will Reflect German Economic Power In The EU - Seeking Alpha

I have been investigating some large cap tech stocks and I am going to discuss those that offer a good return on investment for a value investor. My analysis here is based on the ratios in the financial statements of the Hewlett-Packard Company (HPQ) over the last 5 years. The HP earnings report came out less than two weeks ago in what was a big week for large cap tech earnings releases with an earnings report announcement from Dell Inc. (DELL) as well. These are the two long time darlings of the PC business and they went at it for as long as 12 years. Sadly, they both caught up late to the wave of the future - tablets and smart phones. And this has affected bottom lines. Nonetheless, HP has won the battle for now with Meg Whitman coming out on top during the earnings call as opposed to the lackluster performance by Dell management during their earnings call. Read the rest of article here: Hewlett-Packard Company: Ratio Analysis - Seeking Alpha

Draghi has been influential for quite some time now, but I guess any central bank head will have that type of influence on the country's currency. The chart above is from this time last year. Big day tomorrow. That's all I will say for now.

There is an overall weak sentiment about the pound and tomorrow is going to be a big day with the UK bank rate announcement. Nonetheless, there isn't going to be a change and the rate will stay at 0.50% and even the Asset Purchase Facility (APF) will stay the same at 375B. Any changes will obviously affect the trajectory of the GBP and the FTSE 100.

Guys sorry I wasn't able to get back to all of your'll. I will do so in due course. I've been having a busy week trading. Just wanted to drop a line here to watch out for the Euro Minimum Bid Rate announcement at 12:45PM GMT on Thursday and then of course the press conference that immediately follows where Mario Draghi will be speaking. I will have more on this thread as the event draws closer. So long for now.

Great to hear! I look forward to discussing more XOM right here.

Hewlett-Packard could just be a Value Play My large cap tech stock analysis continues this week with Hewlett-Packard (HPQ). I did bring it up in the post right above this one on this thread. Let's go into a bit more detail here. Source: DailyFinance The recent earnings call was definitely a positive for HPQ especially when you compare with its long time rival Dell (DELL) that totally missed the boat when it comes to the next generation of devices: tablets and smart phones. HP has introduced its ElitePad 900 that keeps the company operating within its core competency. There will also be an Android-based tablet launched in April 2013, which is going to offer a better price to the Google Nexus 7. In addition, HP's numbers were good as its revenues and earnings beat analyst expectations as opposed to Dell that saw declining earnings over the year. There has been a down trend in the book value and even the tangible book value. But this does not have to be all bad; it could simply indicate that the stock is undervalued. P.S.- I must make a mental note and even one on my iPhone to talk more about small-cap tech stocks here as well. After all, I am the Valley Trader.

No problem at all. I welcome all comments. I love to hear what people think about my posts.

Just 6 days back on Monday, the EUR/USD pair was making a technical bounce at a support line that signaled an uptrend. It seems to have hit the resistance, but I never expected it to go to as low as 1.3018. The one encouraging sign for bulls is that the exchange rate is well under the near term 30 day moving average. The 1.3500 level could be the long term resistance and this leaves me with a hunch that trading weekly calls on the EUR/USD makes a lot of sense.

It's been a while over here. I thought I'd use this thread to update on what has been happening with the US and Japanese indexes. As for the S&P, I am pretty bullish on it. S&P 500 Bullish Trend should Persist Read the rest of the analysis here: Analysis Of The S&P 500: Where Is It Headed? - Seeking Alpha The Nikkei to be bullish in the near term due to the weakening Yen The devaluation of the Yen as a result of the Japanese government deciding to print more of it is causing the stock market to soar. It's pretty simple economics really. When there is more Yen, these Yen stocks will trade far higher thereby sending the index higher. At the same time, developed countries with higher valued currencies like the US dollar or the Euro will find Japanese exports cheaper. This brings higher profits for Japanese companies as they are now selling more. Nonetheless, the Yen is very attractive and it is imperative to do quite a bit of analysis on the USD/JPY before arriving at an investment decision.

The Euro zone stock markets had a rally today; EURO STOXX (FEZ) went up 0.4%, London's FTSE 100 (BCYIF.PK) eased up 0.3% and France's CAC 40 also rose 0.4%. With the central bank comments and the stimulus program that is ongoing in the EU, one wonders how healthy this is going to be for the Euro. We all know how stimulus programs negatively affect currencies and send stock markets soaring. This is exactly what is happening in the Euro zone.

Interesting. Here is another relevant article that you might like to check out: DAX Will Reflect German Economic Power In The EU - Seeking Alpha

The DAX is up 0.86% today and its on a bullish trend after sliding as the week started. There was a shooting star formation that can be seen in the chart. The MarketWatch monthly chart of the DAX shows that the long term support line was touched a couple of weeks back. It turned out to be the neckline for the reversal that occurred. The current global economic stability and over performing US financial markets have propelled the DAX to the highs it hit a month back. Read the rest of the article: DAX Will Reflect German Economic Power In The EU - Seeking Alpha

Not much from Draghi this week. He is going to make some remarks in 40 minutes at the Katholische Akademie in Bayern. I could never say that right even if I tried a million times. I will keep you posted if there is anything big coming from him. It's money in the bank then!

S&P 500: Bull speed ahead! I am thinking of a monthly call option on the SPY and at the same time I want to be long on the SPXU. If you haven't heard of the SPXU, it basically works by tracking the daily performance of the S&P 500 and is three times the inverse (-3x) of the index. When doing an analysis of the S&P 500, it is plain to see that the fundamentals are great. The problem is that a lot of speculators feel that this BULL is old news. The real issue right now is the sequestration cuts that are scheduled for this Friday, March 1. It is hard to see the S&P growing at 2% or more if the spending cuts do take effect. Ben Bernanke in his comments to the Senate Banking Committee in Washington stressed the importance of continuing the stimulus (there were rumors that the stimulus program would be cut back) and also warned lawmakers not to go through with the spending cuts planned to take place on March 1. The good thing about Bernanke's recent remarks is that it gives bulls hope. It is quite well-known in the financial markets that stimulus programs drive stock markets higher as was seen with the FTSE 100 and the DAX last week after central banks in the Euro zone committed to generous stimulus programs. Technically Speaking The charts above paint two different pictures. Going by the 10-year chart in the top panel it can be seen how much the S&P 500 has gained with it reaching a 6-year high of 1531 just last week. But even with the drop in the chart on the sub panel, there is the fact that the index has soared for 8 successive Fridays with the previous Friday as well. This goes a long way in demonstrating investor's confidence.

In 2013, the S&P 500 has gained 6.3%. Furthermore, almost 75% of the companies in the S&P have beat corporate earnings estimates which is a very encouraging sign. What's more there is potential upside for the index when you consider that it is now trading 15 times below earnings and very much under the 60-year average of 16.4. Still, the bullish runs this year have made it appear that a bearish correction should persist.