INFOGRAPHIC: History of US money

Starting from 1775 when colonialists created their own continental currency, a infographic shared by Ghergich.

by Ghergich.

What is option ?

Dead Cat Bounce Pattern

Dead Cat Bounce Pattern is an event-based pattern, usually occurring after a large decrease in price caused by a news event. After the event-driven price decline, the price will :bounce" a small amount, before resuming its down trend. The larger the decline due to the news event, the larger the Bounce.
Success Rate: 90%, a very reliable pattern.

Duration: 92% are over in 4 days. Th average Bounce has reversed in 2 days.
Volume: Volume during the Decline event can be expected to be massive depending on the severity of the news event. Heavy Volume will continue during the Bounce.

Risks: Quick action is the key to controlling risk with this pattern, since most of these patterns have finished bouncing to the upside after 2 days.

Trading the Pattern: Traders may choose to play a quick bullish bounce immediately after the news event, or they may choose to go short directly after the Bounce. 

The average Bounce gain is 19% of the decline from the news event.

Copper Sentiment Agrees With Technicals

Sentiment for copper prices appears mixed to negative. The worst prospects for demand may be in China, where copper imports have a large effect on worldwide prices. Currently, the majority of China's copper pipe manufacturers now believe prices for their feedstock will decline further. At the same time, Chinese authorities have indicated very recently that they may crack down on the ability of businesses to import the metal as a way of providing collateral for business loans. Halting that practice may result in more copper being released from bonded warehouses where it sits unused, and that is likely to drive price down.

Our technical analysis continues to agree with that downward forecast, although we may see price rise for a few weeks even in the face of immediately bearish sentiment before the decline sets in again.

In our projection into 2015-2016, we still believe the 1.78 area is a likely long-term downward target, although the path from here to there will have some zigzags along the way. The monthly chart for our long-term projection can be found at our website.

Nearer-term price targets also remain unchanged, but it is helpful to see how price is behaving with respect to the downward channel on the weekly chart below. Clearly price recognized the resistance we identified as being just overhead at the end of May, and it has fallen away from that area. Major stepping-stone support levels to watch through the remainder of the year include 2.67, 2.52, and 2.34.

The daily chart shows price as retracing part of the recent wave 'i'. We believe the retrace can go a bit higher, and the area from 3.1220 to 3.1500 represents a good place to watch for the downward trend to resume. We have drawn a speculative path on the daily chart below.

It is important to keep in mind that price can accelerate downward at this point. It is safer now to sell from minor highs rather than to try catch upward moves.

It's Never Different This Time - 1987 or 2014?

While the price analogs of the last few year's exuberance in US equity markets are enough to worry all but the most systemically bullish "believer"; we suspect the following article from the LA Times In the Spring of 1987 will raise a few hairs on the back of the neck of perpetually optimistic extrapolator..

It's never different this time..

"One of the largest bullish factors is burgeoning worldwide liquidity, thanks to expansive monetary policies by central banks. That has helped fuel a surge of foreign investing that could propel US stocks higher, regardless of what happens to the American economy, some analysts say...

Low interest rates also help stocks by making Treasury securities, certificates of deposit and other interest-paying investments less attractive. The sluggish economy, meanwhile, keeps the Federal Reserve from driving up interest rates and prevents inflation from overheating...

Also, the sluggish economy--by keeping manufacturing rates low--discourages money from flowing out of financial assets into such investments as factories and machinery."

     - LA Times, March 8, 1987; a few months before the October 1987 crash

Read that again!!

Never different.

"Notable Improvement" in Fundamental Outlook of Aluminium- Merrill Lynch

Bank of America Merrill Lynch said during Thursday that the global aluminium market had seen “Notable Improvement” in its fundamental outlook. The BofA said that the improvement in market balance has perhaps been remarkable for aluminium that was set to be falling into deficit in world ex-China after many years of structural surpluses.

The remarkable improvement is due to the production cuts by ex-China with US, Russia and Europe, which resulted in curtailments at many aluminium smelters. But, The Bank also underlined a fact that China was lagging behind other global aluminium producers. They added that switching focused slightly, the Chinese aluminium industry, which had seen some of the most quick production growth in recent years, had stood somewhat apart from developments in world ex-China.

 

The bank also noted that any output losses could be offset by investing for new, more efficient plant capacity and could keep the better supply in the Chinese aluminium market. Another factor that benefited the market is the warehouse issues on the LME. BofA Merrill Lynch said there would be a gradual improvement as the queues at the warehouse had reduced the incentives for the light metal consumers to tap shares.

 

It said that the forthcoming changes in the LME rules and regulations had made a subtle change in the market. The other factor is the Indonesian ban on raw material export which also includes bauxite. Bauxite is the primary raw material for making aluminium. But, the bank expects any impact on the global aluminium market would be limited.

 

BofA Merrill Lynch forecasted an average price of $1,720/mt in Q3, rising to average $1,900/mt in Q4 of 2014.Three-months aluminium was trading at $1886.50 per metric tonnes on LME during Thursday.

Ncdex launches crude contract with fixed rupee rate

The National Commodity and Derivative Exchange has launched International Brent Crude Oil and Light Sweet Crude Oil futures contracts which will be free of currency fluctuation.

The exchange rate of the currency will be locked in at the launch date of the contract and it will be applicable for the entire tenure of the contract. The final settlement price, anchored to crude contracts of the Intercontinental Exchange (of US), will be based on the currency exchange rate fixed at the contract launch.

The intention matching contract attempts to integrate international price discovery markets with the Indian futures market and eliminate currency distortion to provide a simple and perfect hedge option to domestic companies and value chain participants.

Since contract prices will move in tandem with international prices, the final settlement price will be simple and transparent, said Ncdex in a press statement on Friday.

Samir Shah, Managing Director, Ncdex, said the contract is ideal for small consumers and hedgers who cannot hedge in the Indian commodity market on account of the huge movement in NDF (non-deliverable forward) markets in the evening, which does not reflect the true picture of underlying.

“This unique contract would help oil companies hedge their price risk without distortions created by currency fluctuations. We are, therefore, expecting healthy participation from physical market players,” he said.