Monthly Archives: June, 2012
Futures Dictionary Series: At The Market
At The Market Have you ever heard of the term at the market? To some, it might conjure up the image of traversing at a wet market. But far from it, at the market is one of many jargons in trading. In this fourth installment of Futures Dictionary Series, we are going to explain the term at the market. At the market is a type of futures trading orders. It is an order to buy or sell a futures contract at the best available price. A futures broker will immediately execute the order at the price that is currently available, no matter what the price may be. This practice is similar to a market order in the securities markets. At the market orders are used when traders want their orders to be processed and are willing to risk getting a different price. This is because in futures market, at the [...]
Gold and Oil Markets Report – 25 June 2012
Last week, the outcome of US Federal Open Market Committee (FOMC) meeting drove the commodity markets downward after policymakers announced the swap of short-term credit to long-term debt with USD267 billion. Further contraction in Eurozone and China put the bears into global markets in tandem with worsening debt crisis. The Moody’s agency downgraded the credit ratings of 15 financial institutions after Thursday market closed which sank Asia equities on Friday. Crude Oil WTI crude prices reached 77.56 low last week on general market weakness of demands from major economies. Market broke below 80.00 benchmarks in past 12-months record citing demands contracting from China’s manufacturing. This week, we expect the market to be resisted at 82.50 resistances while the bears may travel southward to test 75.00 regions. In our opinion, bargain hunting will emerge at 75.00 levels due to past major supports over last 2 years. In summary, picking short entry [...]
The US FOMC Meeting Lowers Growth Outlook
A guest post written by DAR Wong Currency Market Observations – 25 June 2012 Fundamental Outlook The Federal Open Market Committee meeting extends its credit swap of USD267 billion in short-term securities to longer-term debt through the end of 2012. Federal Reserve (FED) officials downgrade the forecast to 1.9 percent range from earlier outlook of above 2.4 percent in April. Moody’s agency cut the rating’s of 15 financial institutions on last Thursday, including giants like Bank of America, Goldman Sachs and JPMorgan etc for their risk exposure to financial stability. The US existing home sales dropped 1.5 percent to 4.55 million annual rate in May. Another separate report on jobless claims decreased by 2,000 to 387,000 in the week ended June 16, showing struggling job markets. The index of US leading economic indicators for May increased 0.3 percent after a 0.1 percent drop in April, propelled by ump in building [...]
Futures Dictionary Series: Actuals
Actuals Last week, we brought to you the term “CMSR“. In this third installment, we’ll explain another term called actuals. Heard of it? Now, Actuals are physical commodities such as crude palm oil, soybean and gold. Also called cash commodity or physicals, the term actuals is mostly used in the US. Actuals are traded in the physical market and futures market. In the futures market, actuals are used as underlying commodities for futures contracts. Trading in actuals generally results in the delivery of the physical commodity to the buyer when the contract expires. But most futures and option traders usually close their positions before the contract expiration date to avoid physical delivery taking place. Trading actuals in the physical market involves two parties that enter into a private agreement to buy and sell a physical commodity for cash or another commodity. In this case, the physical commodity will be delivered [...]
UK Plunges In Economic Deterioration
A guest post written by DAR Wong Currency Market Observations – 18 June 2012 Fundamental Outlook Both US and UK economy deteriorate by economic expansion cooling down in industrial production, consumer demands and exports. Yen rises unfavorably as safe haven that has deterred Japan’s recovery amid the Euro debt crisis. Investors remain cautious while waiting for the outcome of Greek election that will decide the fate of euro. The US retail sales for May shed 0.2 percent from April and reversed down this previous gain. Jobless claims unexpectedly climbed by 6,000 to 386,000 in the week ended June 9 showing contracting job markets in weakness. Another separate report on consumer prices slid 0.3 percent in May, undermined by recent falling oil prices while the core prices, excluding food and energies, rose 0.2 percent from April. The US industrial production decreased 0.1 percent in May after a revised 1 percent gain [...]
Gold and Oil Markets Report – 18 June 2012
Last week, crude oil prices were generally weak due to melting economy in US and European regions. However, the speculation on stimulus packages to be injected in coming week after Greek election might put the bulls back into the market for increasing oil demands. Gold prices stay above 1600.00 benchmarks but has been moving small range. Last Friday, OPEC meeting decided to keep output quota unchanged in preparation of European’s embargo on Iran starting from July 1. Crude Oil WTI Crude prices have immediate support lying at 81.00 levels now while selling pressures come down from 85.00 resistances. This week, it is crucial to monitor if there is any stimulus to be injected in European regions for lifting the trend higher. Breaking the R1 – 85.00 will still face challenge in higher resistance at R2 – 87.50 levels. However, beware of the trend turning weaker due to panic selling triggered [...]
Futures Dictionary Series: Capital Market Services Representatives (CMSR)
As promised in our blog last week, today’s term is “Capital Market Services Representatives (CMSR)”. Capital Market Services Representatives (CMSR) Capital Market Services Representatives (CMSR) is a reference to licensed dealers within the industry who are involved in the solicitation and facilitation of trading. It is the proper name for dealers, dealing desk personnel or futures broker representative (FBR). In the US, a CMSR is known as Associated Person (AP). To become a licensed CMSR, the interested party must first enroll for an examination run by the Securities Commission Malaysia (SC). Upon passing this exam, the individual is not certified to execute any trading transaction until his/her application for the Capital Markets Services Representative’s License (CMSRL) is approved by the SC. Take note that the CMSRL only entitles an individual to carry on any one or more regulated activities on behalf of his principal. Typically, the best way to proceed [...]
Gold and Oil Markets Report – 11 June 2012
Crude oil prices dipped in mid week after US was downgraded by S&P rating agency to AA+ grades. Manufacturing demands from global major economies has been contracting and China began to cut interest rates by 0.25 percentage point on Friday. Gold prices plunged from USD1640.00/oz – USD1555.00/oz levels and poised to close at 1591.00 regions for the weekend. Crude Oil WTI Crude prices were soft throughout the week but pared losses on Friday on hope of Spain being bailout. The market closed at 84.30 on Friday. We remain our view of continual technical correction which will move sideways from recent low regions at 81.00 – 88.00 resistances in coming week. Immediate support lies at 82.00 areas which will probably lift the trend higher this week due to technical recovery. Abandon your long-view if any further negative fundamental news drives into market meltdown again! Gold Gold prices has formed a flag-pattern [...]
S&P Downgrades US Rating From AAA Grade
A guest post written by DAR Wong Currency Market Observations – 11 June 2012 Fundamental Outlook The S&P rating agency downgrades US financial ranking from AAA to AA+ due to its resilient national debt. Both European Central Bank (ECB) and Bank of England (BOE) held its benchmark rates unchanged in last week’s meeting. China reduces 0.25 percentage points off its lending and deposit rates for the first time since 2008. The US factory orders dropped 0.6 percent in April against positive forecast, after a revised 2.1 percent decrease in March. The Institute for Supply Management’s index services unexpectedly rose to 53.7 in May from April’s 53.5. The initial jobless claims in US Labor Department fell by 12,000 to 377,000 in the week ended June 2 from a revised 389,000. Jobs and consumer demands are still on contraction with enlarging national debts. On August 5, S&P rating agency lowered US raking [...]
Futures Dictionary Series: Approved Delivery Facility
Introducing a brand new series in our blog, Futures Dictionary where we will explain futures trading terms every Wednesday. For a starter, today’s term is “Approved Delivery Facility”. Approved Delivery Facility Also known as Delivery Points, Approved Delivery Facility is a facility authorized by futures exchange where the delivery of commodities takes place upon the expiration of a futures contract. Banks, storehouses, grain elevators and livestock exchanges are generally the approved delivery facilities. In Malaysia, ports such as Port Kelang and Pasir Gudang are listed as the delivery points for Crude Palm Oil and Crude Palm Kernel Oil. This is typical for futures contracts with physical commodities as the underlying such as crude palm oil, corn, wheat and sugar where the contracts specify physical delivery as the settlement type. For example, let’s say Ali sells one Crude Palm Oil Futures (FCPO) contract to Bala on the tender period (1st to [...]
