Comex Gold To Test Resistance, Decline

Comex gold futures ended higher on Friday, underpinned by expectations that the nominee to lead the Federal Reserve Janet Yellen would continue easy monetary policy in that role. US regulatory filings for the third quarter showing that prominent Hedge fund Paulson & Co maintained its stake in SPDR Gold Trust, the world’s biggest gold-backed exchange-traded fund, also supported prices, after a surprisingly strong US labour-market reading re-ignited fears that the Federal Reserve would soon curtail bond purchases.

Outflows from the SPDR fund have amounted to more than 450 tonnes this year, driving its holdings to the lowest level since early 2009 at 865.71 tonnes. Gold prices have declined for much of 2013 amid fears the Fed would curtail its monthly bond purchases, removing a long-running source of support from the gold market.

Comex gold futures are moving in a narrow range. Charts are showing predominantly a bearish dominance.

As mentioned in the previous update, a fall below $1,315, is hinting that it might not rise as expected but could drift . The cyclical moves in the daily chart indicate that price could recover a little while staying above $1,275. The upside resistances are at $1,300 and could even extend till $1,315. Ideally this recovery should not exceed $1,315-20 in order to keep the price under the influence of bears for a later decline through $1,250. Unexpected recovery past $1,320 might hint at the possibility of strengthening further towards $1,355.

The wave counts need to be reviewed once again. A failed fifth wave move at $1,800 resulted in a corrective decline to $1,181 in the form of wave “A”. A possible wave “B” is in progress with targets near $1,420 or even higher to $1,485. This means a wave “C” is expected to follow through which could target $1,150 or even lower.

Alternatively, from the peak of $1,920 a corrective decline in the form of “A-B-C” is already over at $1,181 and a new impulse has begun. Confirmation of such an impulse will be seen at $1,535.

With the present move failing near $1,435-40, we will go with wave “B” ending at $1,433 and a possible Wave “C” underway with targets near $1,145-50 or even lower to $1,100.

RSI is in the neutral zone now indicating that it is neither oversold nor overbought. The averages in MACD have gone below the zero line of the indicator hinting at bearishness to be intact. Only a cross-over above the zero line could hint at bullishness again.

Therefore, look for gold futures to test the resistances and then decline .

Supports are at $1,275, 1,245 and 1,185. Resistances are at $1,300, 1,320 and 1,355.

How Do I Make Money Investing In Start-ups ? By Zack Miller

I wish investing in a startup was as easy as “buy low, sell high“, but it's a bit more complex.

Angel investors must consider a variety of factors when they put their capital to work in an early stage company like,

• startup valuation: Figuring out how much a startup is worth is as much an art as it is a science.
• choosing the right founders: Team plays a critical role in a startup's success. Investors want to invest in successful founders.
• portfolio management: What's the right number of startups to hold in a portfolio? (Hint: Kauffman Foundation research says at least 6)
• taxes: You gotta pay Uncle Sam at some point, right?
• lots more… 

With all this in mind, a startup investor has to juggle lots of things at once — but ultimately, it's all about the money.

How do I make money investing in startups?

As OurCrowd and other equity crowdfunding startups democratize early stage investing, we get asked a lot about how investors make money in startups.

Basically, there are 3 ways a startup investor can make money:

1. startup sells to another company: Large companies typically turn to startups to provide a shot of ingenuity with a side of technology for their existing businesses. So, at least in Israel, we see around 100 companies get bought every year by larger multinationals. For an investor in a startup, this is frequently the quickest way to make money on your original investment. When a startup gets bought out, an investor may receive cash or new stock (or a combination of the 2) from the acquiring company. So, how much an investor would see back on a merger or acquisition of this kind depends on his prorata share of the startup and the valuation the company was being acquired at.
2. startup goes public: This happens less frequently than startup M&A because the qualifications to publicly float stock are typically higher and only more mature startups fulfill them. Of course in a world of global stock markets, investors in Israeli startups may see their investments IPO on the Tel Aviv Stock Exchange (TASE), the London Stock Exchange (AIM), or in the U.S. on the New York Stock Exchange (NYSE) or NASDAQ.
3. startup gets big, pays dividends: Some companies decide not to get bought or IPO. Their founders have a vision of running large, standalone businesses. If they get there, they typically have lots of cash on their books and are generating more $$ every day. To repay investors, they can pay out part of their cash flow in the form of ongoing dividends or if the cash buildup on their balance sheet is large enough, they may decide to dividend out a chunk of that cash in a 1-time, special dividend. Conduit, a well-known Israeli internet technology company, decided to take this approach and paid back something like $300M to its investors.
4. sell a share to someone else: Investors in startups typically have the ability to sell their shares to another buyer for a profit…if they can find one. Unlike many stocks that trade on stock markets, most markets for selling shares in startups are really illiquid. Most likely, if you were to check Sharespost or SecondMarket, the 2 leading markets for shares in private companies, you won't find an active market in shares of a specific startup (unless it's super hot and big — like Facebook was before it IPO'd). When investors ask me, I tell them they have to feel comfortable owning shares in their startup for a long time.

There are some other less common ways early stage investors get paid back. Sometimes investor will use convertible loans (like OurCrowd did when it funded Israeli flight technology company for the Operating Room, Surgical Theater) to fund deals. These are loans that can convert into equity at a later date.

Regardless, investors should pay close attention to how a startup is valued, who owns the equity and importantly, who owns rights to determine whether a startup can be sold. Inexperienced angel investors aren't always aware of these types of terms that can have a big impact on future investment returns. Fortunately, at OurCrowd, we negotiate these rights for our investors from the start.

What To Do When Things Don't Go Your Way

Data for the week 09-Nov-13 to 15-Nov-13

Exp.:	Expected or Anticipated value calculated from the recent survey conducted.
Prior:	Represents the last actual for each indicator. In case there is a revision to the last actual, the prior column reflects the prior figure as revised.
Exp. change today:	Exp. - Prior
Avg. change of last 1 year:	Average Change in Actual data calculated for last 1 year.
Expected impact on price:	This indicator shows the effect of the anticipation of data on the prices of related country’s major indices. We have categorized it as below: Very Good Good Neutral Bad Very Bad
Actual:	Refers to the actual/latest figures after its release.

Data for the week 09-Nov-13 to 15-Nov-13

Date	Time (IST)	Country	Data	Exp.	Prior	Exp. chg today	Avg. chg of last 1 year	Exp. Impact on Price
09-Nov-2013	02-00 AM	United States	Fed's Bernanke Speech
09-Nov-2013	07-00 AM	China	Consumer Price Index (YoY)	3.3%	3.1%	0.20%	0.43	Neutral
09-Nov-2013	07-00 AM	China	Producer Price Index (YoY)	-1.4%	-1.3%	-0.10%	0.61	Neutral
09-Nov-2013	11-00 AM	China	Industrial Production (YoY)	10.0%	10.2%	-0.20%	0.67	Neutral
09-Nov-2013	11-00 AM	China	Retail Sales (YoY)	13.4%	13.3%	0.10%	0.78	Neutral
11- 15 Nov-2013	-	India	Imports YoY		-18.10%		7.12
11-15 Nov-2013	-	India	Exports YoY		11.20%		4.12
12-Nov-2013	03-00 PM	United Kingdom	Consumer Price Index (MoM)	0.3%	0.4%	-0.10%	0.45	Neutral
12-Nov-2013	05-30 PM	India	Industrial Production YoY	3.5%	0.6%	2.90%	2.08	Good
13-Nov-2013	03-00 PM	United Kingdom	ILO Unemployment Rate (3M)	7.6%	7.7%	-0.10%	0.07	Bad
13-Nov-2013	03-30 PM	European Monetary Union	Industrial Production w.d.a. (YoY)	0.00%	-2.1%	2.10%	0.59	Neutral
13-Nov-2013	04-00 PM	United Kingdom	Bank of England Quarterly Inflation Report
13-Nov-2013	08-30 PM	United States	U.S. Congressional Budget Talks Resume
14-Nov-2013	05-30 AM	United States	Fed's Bernanke Speech
14-Nov-2013	03-30 PM	European Monetary Union	Gross Domestic Product s.a. (QoQ)	0.1%	0.3%	-0.20%	0.24	Neutral
14-Nov-2013	07-00 PM	United States	Trade Balance	$-39.0B	$-38.8B	-0.20$	3.21	Neutral
14-Nov-2013	07-30 PM	European Monetary Union	Euro-Area Finance Ministers Meet in Brussels
14-Nov-2013	09-00 PM	United States	EIA Natural Gas Storage change		35B		24.64
14-Nov-2013	09-30 PM	United States	EIA Crude Oil Stocks change		1.577M		3.45
15-Nov-2013	12-00 PM	India	WPI Inflation	6.9%	6.46%	0.44%	0.38	Good
15-Nov-2013	13-30 PM	European Monetary Union	EU Finance Ministers Meet in Brussels
15-Nov-2013	15-30 PM	European Monetary Union	Consumer Price Index (MoM)	-0.1%	0.5%	-0.60%	0.65	Neutral
15-Nov-2013	07-45 PM	United States	Industrial Production (MoM)	0.2%	0.6%	-0.40%	0.97
15-Nov-2013	08-00 PM	European Monetary Union	EU, U.S. NegotiatTrade Talks in Brussels

How arbitrage funds work.

The last five years have seen many events that sparked market volatility — RBI actions, domestic and global factors, FII flows, tensions in Syria, liquidity infusion through Quantitative Easing (QE) and talk of tapering QE, to name a few. This volatility has terrified investors in most asset classes.

In such a scenario did you know there are funds that have returned 13 per cent on an average during the past three years?

Hedged against risk

Arbitrage funds are a category of mutual funds that invest in hedged equity positions.

The underlying mechanism of these funds is to capture the difference in prices of the same equity share listed on two exchanges and/or on the derivative segment. The fund manager takes inverse positions in different exchanges for the same share/scrip.

This ensures risk-less profits for the fund as the position is hedged.

In a simplistic example, suppose a share is quoting at Rs 100 on NSE and at Rs 110 on BSE. The fund manager simply buys shares on NSE and sells them on BSE leading to a profit of Rs 10 without any risk.

The same mechanism works when the fund manager hedges through the use of derivatives. He buys physical shares on one exchange and sells derivatives/futures on another and vice versa.

It’s a well known fact that at the end of a futures contract, the price of the futures and the underlying shares match each other. So, if there is a profitable spread between futures and spot prices, fund managers exploit the opportunity for quick gains.

The returns of arbitrage funds carry low risk. As the portfolio of the fund is hedged at all times, whichever direction the market takes, you make a profit on at least one part of the portfolio — either on your buy or sell position.

For instance, if you have bought shares of company A on BSE at Rs 100 and sold its futures at Rs 110, your profit is fixed at Rs 10. If the price of company A on BSE grows to Rs 130 and consecutively to Rs 140 in the futures, you will have mark-to-market Rs 30 profit on BSE and mark-to-market loss of Rs 30 on futures.

Tax advantage

The advantages of arbitrage funds don’t end here. As these funds invest mostly in equity, they enjoy tax status of equity investments.

So, if you are invested for more than one year in the fund, you will not pay any capital gains tax on the profits you make. So, whenever markets swing wildly, arbitrage funds can be the silver lining for your portfolio.

Technical Analysis - MCX Copper, NG, Zinc, Nickel And Crude Oil.

COPPER (RS 457)

MCX copper futures contract has retained its Rs 440-460 sideways move for the fifth consecutive week. A breakout on either side of this range will decide the next leg of move. However, last week’s price movement lends high probability for the contract to break above Rs 460 and move to Rs 470. Failure to do so can keep the contract range-bound between Rs 440 and Rs 460 for some more time.

However, the medium-term outlook is bearish. Key resistance is at Rs 470 which needs to be broken to turn the outlook positive. The contract can fall to Rs 410 and Rs 390 in the medium-term.

CRUDE OIL (RS 5,993)

The weakening of the rupee beyond 62 against the dollar saw the MCX crude oil contract ending its nine-week losing streak. Technically, the price has risen back above the significant 200-day moving average support. There is high probability for a corrective rally now. As such fresh short positions can be avoided at the moment. Immediate resistance is at Rs 6,100. A break above this level can take the price higher to Rs 6,300-6,400 initially and even to Rs 6,600 in the short-term. Support lies in the Rs 5,900-5,880 region.

The medium-term outlook will remain bearish unless the contract breaks above Rs 6,600. The price can decline to Rs 5,500-5,400 in the medium-term.

NATURAL GAS (RS 227.1)

The MCX natural gas contract has taken support from near Rs 210 and has risen by 2.7 per cent last week. Immediate support lies in the region between Rs 220 and Rs 215. The contract can rise further to Rs 235-240 in the coming week. Significant resistance is at Rs 240 and a breach of this level will turn the outlook bullish. Failure to rise above Rs 240 could keep the contract in a sideways range between Rs 210 and Rs 240 in the short-term.

However, the medium-term outlook is bullish, and the contract can target Rs 270. Strong support is near Rs 200.

ZINC (RS 119.9)

The MCX zinc contract has risen by 5.6 per cent in the last few weeks after finding support near Rs 115. A rounding bottom pattern is visible on the daily candle chart. The immediate short-term outlook is positive with significant support in Rs 117-115 region. Resistance is at Rs 121 and a break above this level can take the price higher to Rs 125.2, which is a key resistance level.

A breakout on either side Rs 115-125 will decide the medium-term trend thereafter. However, failure to breach Rs 125.2 will have high probability to take the contract lower to Rs 104.

NICKEL (RS 882.8)

MCX nickel contract has failed to breach above Rs 900 decisively. The contract has closed lower by 2.8 per cent for the week. Technically, the 100-week moving average, currently near Rs 914, is restricting the upside. The short-term outlook will remain bearish, as long as the contract is below the Rs 900-915 resistance zone.

The price can decline to Rs 850-840 in the short-term. An eventual break below Rs 840 can take the contract lower to Rs 800.

For the medium-term, strong support is in the Rs 780-750 region. A fresh leg of up move from this support zone is possible. Target for the medium-term is in the range of Rs 950-1000 .

Higher demand to sustain long-term rally in lead.

Lead, one of the most widely used non-ferrous metals is mainly used in the manufacturing of lead-acid batteries. China is the world leader with about 43 per cent share in the total global refined lead production as well as consumption. India consumes about 5 per cent of the global refined lead consumption.

DEMAND TO rise IN 2014

The International Lead and Zinc Study Group (ILZSG) forecast the demand for the refined lead to increase this year and next. In its study released earlier this month, it expects the demand for 2013 to increase by 5 per cent and for 2014 by 4.6 per cent. The consumption in China, the world’s largest consumer is expected to go up by 7.4 per cent next year on account of the expansions in automotives and mobile phone systems.

In addition to the general increase in demand mentioned above, there are two important factors that could drive the lead price higher next year. Firstly, in Europe where the demand was in a decline in 2011 and 2012, ILZSG forecast the demand to rise by 1.3 per cent this year and 2.3 per cent in 2014.

Secondly, ILZSG expects the lead market to run into a deficit for the first time since 2009 with an estimated shortage of 23,000 tonnes in 2014. These two factors could be the major supports for the lead price to go higher next year.

TECHNICAL OUTLOOK

In this week’s dissector we see the outlook of the lead futures contract traded on the Multi Commodity Exchange (MCX). The MCX contract has closed for the week at Rs 135.4.

Long-term view: The MCX lead futures contract is in a strong uptrend since 2009. The price is in a steady uptrend since it bottomed near Rs 40 in December 2008. Strong support is at Rs 110 and at Rs 100 which might not be broken very easily.

The uptrend will remain intact as long as the contract trades above Rs 100. Intermediate fall to these supports at Rs 110 and Rs 100 will be a good buying opportunity. A rise from Rs 110-100 supports will have the potential to take the price higher towards Rs 160 in the long-term.

Medium-term view: The MCX lead futures contract is in a medium-term downtrend. The price fell about 19 per cent from its December high of Rs 155.4 to a low Rs 125.3 this month. The contract is currently witnessing a corrective rally of this medium-term downtrend. This corrective rally can extend further to test the important Fibonacci retracement resistances near Rs 140 and Rs 144.

There is a high probability of the contract halting its corrective rally in Rs 140-144 region. Thereafter, the price can decline targeting Rs 120 and Rs 115 which are the important medium-term support levels.

Short-term view: The short-term outlook is bullish. The MCX contract has found good support near Rs 125 and has risen about 8 per cent in the last few weeks. Key short-term supports to be watched are the 100-day moving average near Rs 131.5, trend support near Rs 127 and then the 200-day moving average at Rs 124. The downside could be limited while these supports hold. Immediate resistance is near Rs 136. But this resistance is vulnerable to get broken and the contract can rise to Rs 140 in the short-term.