Category: Your Money

Central bank gold buying at 40-year high

This is something that should perk up the ears of gold bugs out there: Central Banks purchased 148.4 tons in July-September, the largest since 2002. This is a huge reversal since the days when Central Banks sold gold all the way down to $300. Could this be a huge contrarian call that gold has peaked?

What caught my eye in this FT.com article is that China overtook India to become the largest consumer of gold jewelry in the third quarter. Chinese jewelry consumption rose 13% from a year earlier to 138.6 tons, while buying from India – traditionally the world’s top consumer – fell 26%.

It looks like the world’s most steadfast gold bugs are actually shying away from the yellow metal. Has gold become all that it can be?

Here are some Indian Gold ETFs you can places your bets on: GOLDBEES, KOTAKGOLD, RELGOLD.

Sunder’s List

Off to the races!

You can always be right if you say Yes and No at the same time: Which Morgan Stanley Should We Listen To?

For the technical analysis out there: the importance of Volume What the market’s light volume tells us Mark Hulbert

Hayward 5000 anyone? Anheuser-Busch Stays Classy With Bud Light Platinum

This time its different. I promise! Buyers and developers face some harsh home truths

Reminds me of when “CDO Managers” were being paid this kind of dough: The $200,000-a-Year Mine Worker

More technical analysis goodness: S&P Forms Potentially Super-Bullish Triangle Pattern

Are we set for a ‘Santa Claus’ rally? Related: Does India love Christmas?

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Santa Claus loves India (too)

The last couple of months are usually good for Indian markets. On an average, they have been up 2% in November and 6% in December. However, it looks like most of the gains are given up in January (down 5%, on average). With the Nifty down nearly 5% so far this month, it has a lot of catching up to do for the rest of November to get to the average.

Average Performance Month
-5% Jan
-1% Feb
2% Mar
1% Apr
-1% May
-1% Jun
4% Jul
2% Aug
3% Sept
-2% Oct
2% Nov
6% Dec

Light up the Christmas tree boys!

Technical Analysis of the Financial Markets: Ch 4

This is a review of the fourth chapter of John J. Murphy’s Technical Analysis of the Financial Markets.

What is a trend?

A trend is simply the direction of the market. Markets don’t move in straight lines, they zigzags through different levels forming peaks and troughs. The direction of these peaks and troughs constitutes a market trend.

imageAn uptrend is a series of successively higher peaks and troughs.

A downtrend is a series of successively lower peaks and troughs.image

A trendless/horizontal trend is a series of horizontal peaks and troughs.

Based on the trend, the trader could go long an uptrend, go short a downtrend and most importantly, do nothing in a trendless market.

Support and Resistance

The troughs are called supports. It is a level under the imagemarket where buying interest is sufficiently strong to overcome selling pressure. It is in this area that the decline is halted and and prices turn back up.

Resistance is the opposite of support; it is a level over the market where selling pressure overcomes buying pressure and prices decline.

In an uptrend, resistance levels represent pauses in price appreciation and are usually penetrated at some point. In a downtrend, support levels check the decline temporarily. For an uptrend to continue, each successive low (support) must be higher than the last one. Each rally high (resistance) should be higher than the previous one. If the corrective dip in an uptrend comes all the way down to the previous low (support), then a trend reversal might be in the offing.

imageThe longer the time (and higher the volume) that prices trade in a support or resistance area, the more significant the area becomes.

Whenever the support or resistance level is penetrated by a significant amount (3%), they reverse their roles and become opposites.

 

Up Next: Trendlines!

 

 

 

 

 

Sunder’s List

Breakfast reading

Faster than you can say contagion! Eurozone bonds hit by mass sell-off

The only 20th century companies in his portfolio are IBM, Kraft, and Walmart: Buffett: Aged Companies ‘r’ Us

Long term technical analysis of Walmart: Wal-Mart has Built a Massive Decade-long Base

US postal service  going bankrupt?  USPS Weighs Hiring Restructuring Advisers

Lets raid the piggy bank: EU’s Rehn Backs German Eurobond Proposal

BlackRock chairman/CEO says liquidity is vanishing in Europe: CNBC

Now even your mom knows what the Euro crisis is about: Euro Crisis Breaks Through the ‘Mum Barrier’

For the masochistic: The west is in danger of frittering away its freedom

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