Big Week – and Volatility Ahead – CIT Chapter 11?

by Jerry Furst – Sr Analyst  - Investors Education Network.com  

Last Week the  VIX closed over 30 spiking to an intraday high of over 31 on Friday with the DOW dropping 250 points and the S&P 500 dropping over 30 points and the S&P 500 breaking trend line support.

Looking at chart patterns is often called an art and a science. Eventually technical traders will build up a photographic memory of patterns and quickly recognize similarities.  I present to you an example.

The Daily charts of the Euro and the Weekly chart of the VIX  (S&P 500 Volatility Index) may give technical traders time to pause over the next two images I show.  

Chart Pattern Similarities - Euro and Vix - Sr Analyst - Jerry Furst - IEN - Click to Enlarge

Image 1 Above – On the Left – EURO – Daily Chart of March 18, 2009

The Past May Help Us Determine The FutureSimilar Patterns  - Note the Triangle – Failing Head and Shoulders and Trend Line Break which is practically identical to the current Weekly chart of the VIX as of October 30, 2009 – on the Right

Euro-USD Daily - October 30, 2009 - Shows Failed Head and Shoulder Pattern

Image 2 – Euro-USD Daily - October 30, 2009 – Shows the Failed Head and Shoulder completed – extending above and Beyond the Head and Shoulder Pattern. If this pattern is to be repeated on the VIX – Look Out Below!

Lots of News Scheduled as VIX Picks Up

Currency traders may want to consider shifting to tactics and strategies that work best in high volatility markets. Correlations between the equity markets and Forex may fluctuate if fundamentals get in the way.

Last weeks move up in the VIX and triple digit losses on the DOW are looming large over an extended equity market. (Click here to register and tune  into my webinar  on FX Street at 12 Noon Eastern (GMT -5)

Wow – What a Week Ahead Coming Up!

Monday: – Watch the Asian Markets into the US Open. us Data Includes Home Sales  - ISM and Construction Spending.

Tuesday: GBP: PMI , and US Consumer Confidence

Wednesday: – FOMC announcement - leading into Fridays NFP Employment Report

Thursday: BOE and ECB Central Bank Announcements – watch for signs of policy change statements. US Weekly Jobless claims and Fed Balance Sheet data. (click here to register and tune into my webinar on FX Street starting at 1:30pm Eastern (GMT -5)

Friday: NFP-Non Farm Payroll – US Trade and Consumer Credit Data

Traders Be Aware This Sunday – CIT Chapter 11?

CIT Group is reportedly ready to file a “prepackaged bankruptcy plan”. Sources indicate this may occur as early as this Sunday Nov 1. If Chapter 11 is filed – it would qualify as the 5^th largest bankruptcy filing ever ($71 Billion in Assets) in the US.

CNBC’s David Faber broke the news on Friday afternoon Oct 30, and he speculated that preferred shareholders are likely to be “wiped out”. These “preferred Shareholders include the US Taxpayer that had injected $2.3 Billion.

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Jerry Furst  is an active trader, educator, and Founder of Investors Education Network (IEN), He is a Mentor and Trading Coach to Select Clients  Click Here for a Free Self Evaluation Survey.

Watching Paint Dry – Continuing Consolidation?

Interest Rate and Trichet Watch

As the Dollar Index slides to fresh lows, the Pound and the Euro have been painting a sideways market ahead of the BoE and ECB announcements tomorrow. Jean Claud Trichet will have his press conference as the US releases Weekly Jobless Claims, and then the Non Farm Payroll on Friday.

It is being hypothesized that the FOMC will allow the Treasury purchase programs to expire in September, and the $1.23 Trillion of mortgage backed securities and other programs may be left to expire at the end of the year – so reports Bloomberg’s Steve Mathews, quoting Laurence Meyer of Macroeconomic Advisers.

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Jerry Furst  is an active trader, educator, and Founder of Investors Education Network (IEN), He is a Mentor and Trading Coach to Select Clients  Click Here for a Free Self Evaluation Survey.

Lots of Scheduled News on the Calendar

Interest Rates Around the Globe Expected To Drop

Australia, Canada, The UK, and the Euro Zone are scheduled and expected to lower interest rates this week. The question is, are the moves already baked into the charts?

Non-Farm Payroll - Unemployment Data Due Friday

Employment data may come in at historically horrendous levels. Wednesday data from ADP and Challenger, and Thursday from Monster.com will lead up to Friday’s Non-Farm Payroll report. Wrapping up the week is the US consumer credit report at 15:00 Friday.

European Union? No Help for Eastern Europe. The Euro continues to slide against the US Dollar as witnessed by the chart below. Note the post from Febrauary 27th.

EUR-USD - 60 Min chart - Beautiful Triangle Pattern continues to play out.

Summarized Economic Calendar and Weekly Webinar

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Jerry Furst  is an active trader, educator, and Founder of Investors Education Network (IEN), He is a Mentor and Trading Coach to Select Clients  Click Here for a Free Self Evaluation Survey.

By Jerry Furst- Sr Analyst “1st on Forex”
www.Investors-Education-Network.com

Charts are showing some nice trends and patterns but seem to be stalled since the afternoon of the New York session.

EUR-GBP 4 Hour Chart (click to enlarge)

The Euro-Pound is showing a nice Head and Shoulder pattern with a strong supporting trend-neck line. The Neckline was broken early in Thursday’s New York session but then paused.

Dual Head and Shoulder Pattern on Euro

EUR-USD 2 Hour Chart - (click to enlarge)

Shows a great example of a fractal pattern with two Head and Shoulder Patterns. Notice some of the
identical features - despite the different size of the patterns.

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Jerry Furst is an active trader, educator, and Founder of Investors Education Network (IEN), He is a Mentor and Trading Coach to Select Clients

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Economic Calendar Full of Data and News

This week has lots of potential for momentum trading as Interest Rates for the UK, Euro Zone, and Australia will be watched closely. 

The employment situation will be highlighted with ADP  and other reporting agencies leading up to Friday’s Non Farm Payroll.

Lot’s of other data coming out as well - so don’t get caught by surprise - mark your calendar and trade accordingly! 

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Jerry Furst  is an active trader, educator, and Founder of Investors Education Network (IEN), He is a Mentor and Trading Coach to Select Clients  Click Here for a Free Self Evaluation Survey.

Mid Week Report

by Jerry Furst Sr. Analyst

Investors Education Network.com  

  On Monday the NBER (National Bureau of Economic Research) “determined that the decline in economic activity met the standard for a recession” and that it started in December of 2007. I find it audacious that pundits on TV now make statements like “We all knew it was a recession” - When in fact the media was trying it’s best to keep the rose colored glasses on. Back on Jan 22 my blog post was titled, “Recession in Play – Depression on the Way?”

  Also on Monday – Ben Bernanke warned that, “it’s certainly feasible” to cut rates further – thus giving the other central bankers a heads up to act accordingly. The Thanksgiving Day stock market shoppers were treated to a deep discount as the DOW plunged 679 points or -7.7%! 

 Tuesday – The markets took a breather – there was not much news and it appeared as if people were waiting for Wednesday’s data. The US “Big 3” automakers were reported to have their CEO’s driving to Washington,  and the UAW is under pressure to renegotiate it’s 2007 concessions.

 Wednesday – The EU reported poor retail sales and the UK and EU both posted dismal numbers for Services PMI – dropping the Euro around 100 pips and the Pound over 200 pips before the NY session.

 The US then got in the game and posted horrible Non-Mfg ISM numbers and the ADP jobless claims came in at -250,000 where expectations were for -200,000. The Feds Beige Book came in negative as well.

 As of this writing New Zealand is expected to cut rates from 6.5 to 5% at 3pm Eastern time.

 Thursday – Interest Rate and Trichet Watch

Which leads us to the home stretch – as the UK is expected to cut rates from 3 to 2% and the Euro Zone is expected to drop rates from 3.25% to 2.75%. These are big and historic drops in size and in the rate itself. Jean Claude Trichet is scheduled to have his press conference at 8:30 am EDT in which he usually gives some clarity as to where he sees things are – and what the ECB may or may not do in the near term.

 Friday – All eyes are waiting on the Non-Farm payroll report – but will the unemployment rate really be a surprise? Will their be revisions?

 Stay Tuned… 

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Jerry Furst  is an active trader, educator, and Founder of Investors Education Network (IEN), He is a Mentor and Trading Coach to Select Clients  Click Here for a Free Self Evaluation Survey.

To see my Jan 22 – Blog Post “Recession in Play – Depression on the Way? “

http://blogs.fxstreet.com/1stonforex/2008/01/22/recession-in-play-depression-on-the-way/

Lots of Scheduled News on the Calendar

Beginning of the Week - Retail sales will be the focus as anecdotal reports of the Holiday season kicking off with last weeks Black Friday and the Thanksgiving holiday weekend. They call it “Black Friday” because many retailers traditionally get profitable and into the “Black” with the surge of holiday sales. This season the term may take on a different meaning…

Interst Rates Around the Globe Expected To Drop

Mid Week - Australia, New Zealand, The UK, and the Euro Zone all are expected to slash interest rates this week - There may be some surprises to the upside and downside as some of the expectations are for very large cuts.  The uncertainty could play out on the charts with some temporary volatility - so be sure to trade accordingly!

Leading Up To Non- Farm Payroll Friday

End of the Week - Employment data in the US will be trickling in Wednesday from ADP and Challenger, and Thursday from Monster.com - leading up to Friday’s Non-Farm Payroll report.  Wrapping up the week is the US consumer credit report at 15:00 Friday.

For more scheduled news events … Check out my consolidated event calendar and join my webinar

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Jerry Furst  is an active trader, educator, and Founder of Investors Education Network (IEN), He is a Mentor and Trading Coach to Select Clients  Click Here for a Free Self Evaluation Survey.

Investors Education Network

Pre Non Farm Payroll Numbers Disapointed early Wednesday as

Interest rate Cuts of 50bps are expected from the BOE and ECB Thursday. No shock to the  charts are expected - but expect the unexpected.

November 5th, 2008 - Nothing but Down

Above - The Major Indexes and the VIX-Volatility Index 5 Minute Charts

Above - USD-JPY 4 Hour Chart breaking Support (click to enlarge)

Finally - the Election of 2008 is Over! - Now What?

Thankfully John McCain allowed Americans to get an early nights sleep Tuesday by conceding defeat - before California and the West coast was even finished voting.

 For me, John McCain and Barack Obama both never resonated beyond mediocre sound bites. IMO – Despite McCain’s pleas for others to help him fight, It looked as if the maverick was relieved to give up. Only in the last few days was Sarah Palin allowed to regain her dignity and throw a few punches for him.  

 The Big Picture - Click to Enlarge

US President Elect Obama makes his acceptance speech Tuesday night

Calls for the lowering of expectations are coming from the four corners of the left.

Now that the media has put the public in a state of mass psychosis, the public will be in need of a “rattle ya jewelry”, John Lennon type statement from the President elect. Reality sank in fast Wednesday as the financial markets gave BO the cold shoulder as the weight of the world began it’s descent.  

Leadership Needed Now for US All – Starting with You!

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Jerry Furst  is an active trader, educator, and Founder of Investors Education Network (IEN), He is a Mentor and Trading Coach to Select Clients  Click Here for a Free Self Evaluation Survey.