Forex Robot: Global Markets Changing

Having trouble viewing this email?
Click here
http://campaign.r20.constantcontact.com/render?llr=d7egsfcab&v=0018iMS5L3VR6N0_ig1Neau38JGBAZtli2EtYxGGDskg5szWUmoNNKtUppTiIt4OBYuwkeuc1yjmH84nitLnQmyITrK7rLU_BqQiZOhnAH2iqzdTYRhLGxVr7cOxPCy5df4YNBqDDxwOys%3D

TheLFB Automated Trading Newsletter
~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~

Client Note: US Session Review

March 24, 2011
~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~

Quick Links

View Latest ATP Video [http://r20.rs6.net/tn.jsp?llr=d7egsfcab&et=1104942235648&s=4796&e=001p5hURBZCqW2LGLFOKt1OlwQtm4d16m12O0-9KHItFNjjAY1_CnDQAyIE00B1LVPDk8XTBUDRSNneOEPqKsEZaQ1mnYXXEbtTdddMvN2tjMyf3Bv0To_B2skfZgoJlghFOHseEMPayBMkyVNeDrUnhA==]
Newsletter Archive [http://r20.rs6.net/tn.jsp?llr=d7egsfcab&et=1104942235648&s=4796&e=001p5hURBZCqW0F4fwbojYIGenUFavQEuirxOcvfakxyl1wtzjuATbHZPQxqmQyYf64sK5oEtBZE81b7r9pjMg9c6HKVt3jNkl_W1LKSQ_F351VUGJFuibDDUcznuRjh_H0KcWNz5mdsIDBefM6QFAmxw==]
Follow us on Twitter [http://r20.rs6.net/tn.jsp?llr=d7egsfcab&et=1104942235648&s=4796&e=001p5hURBZCqW2Boz8NftAxuTlElT-XxJUBaEh6W7Ks7habAP4CJpJ8ogbTOG14kFsExKynvX8K3p1w--LgJ9I1OI-Gnj58PZUqtVtBUpnJgDfvDgb8e4eYvg==]
Contact Us [http://r20.rs6.net/tn.jsp?llr=d7egsfcab&et=1104942235648&s=4796&e=001p5hURBZCqW2xHBUcnIGg1Q-9k0cA_nI22YJxMZO5_0Ck2BjeD-YR9Wew4Z2mMBaK5ovHJrzErJVGy93VrxjIDg1sQcMTT3If60Qtl2PfTONTrRJfMNlMKffZsDWje9ch7XTwkIqXCoPz_OurYem96t59JcNEZ1AL]
~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~

Dear Trader,
Welcome to TheLFB daily client note. Follow along with the trade team as they review
global markets, headlines, trade divergence, momentum, and currency impact over
the 24 hour trading session.
Content and analysis provided by TheLFB trade desk. Remember to look for email signals
and alerts on global market price action swings.
Sincerely,
TheLFB Trade Team
~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~

Equity And Interest Rates
Equity Market Swing Point
The three main global equity markets moved higher in trade on Thursday, retracing
part of the losses seen in reaction to the Japanese earthquake and tsunami. It must
be said however that most sustainable equity price action, especially in S&P 500
trade, is coming via the front-end futures market, that sees swings and repositioning
completed ahead of the Wall Street cash open. The Japanese Nikkei and German DAX
futures charts are covered with price gaps, in reaction to the ever-changing momentum
in S&P front end futures trade.
The Japanese Nikkei near-term charts have just turned bullish with a break above
9000, which will act as a solid area of support as traders position themselves
from upwards test of 9480, and 9620. Upside areas of note will be 9990, the 20-day
simple moving average, and 10300, the 50-day simple moving average. Holding above
9350 on a weekly chart will add further confirmation to the fact that 9000 will
be hard to break as support. There will be no signals on the Japanese Nikkei until
clarification comes on the rebuilding process after the tragic consequences of the
recent earthquake.
The German DAX traded at 6950 ahead of the Wall Street open on Thursday, and now
battles the 20 and 100-day simple moving average areas around 7000. The near-term
trend is long, sentiment has turned bullish, and a solid area of support at 6750
looks to be in place. There have been few signals or alerts on German DAX trade
over the course of the last three months, due mainly to the fact that most price
action and sustainable movement is coming from price gaps at the open of each futures
market day. There are very few European sessions that are able to break the ranges
set in futures trade ahead of the cash market open.
S&P 500 futures trade has seen the front month contracts push up to test 1300, which
is a major resistance area that houses the 50-day simple moving average. There is
now a defined trading channel that has 1260 as support and 1305 as resistance, which
have contained price action since Mar 09 11. A weekly close above 1305 could draw
in tests of 1315, and possibly 1325, if global news headlines stay contained. However,
next week's economic calendar is very busy with potential price moving action. A
weekly close below 1289 will draw in a test of 1277 if sentiment changes and profit-taking
hits from the recent bounce off support. It is unlikely that any new signals or
alerts will be issued on S&P 500 trade until early next week.
~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~

Global Commodities
The New Global Reserve
Global precious metal markets have found the energy to bounce off recent tests of
support, which came in reaction to a realignment of risk after social, economic,
and physical challenges that hit the global markets. Further to recent client notes
that highlighted that global reserves look to be building a move away from the US
dollar and towards a precious metal-based system, it would seem that the global
market is more than willing to buy any dip in precious metal trade.
Gold bullion dropped on Mar 15 11 to test support at the 50 and 100-day simple moving
average area around 1380, then consolidated for two periods of trade before moving
higher to test resistance at the 20-day simple moving average around 1420 on Mar
21 11. The last two sessions of trade have managed to push gold bullion up to test
$1440 an ounce for front month futures contracts. The gold trend is bullish, momentum
is strong to the long side, and gold bullion has once again proven to be one of
the most reliable investment-grade asset classes that any investor has seen over
the course of the last decade. For those not already long gold bullion now may
not be the right time to open a position; instead patience should be exercised as
the next test of support is monitored, and then bought. Signals will be issued to
clients whenever gold drops down to test 1420, which is the 20-day simple moving
average area.
Front month silver bullion futures contracts have staged a dramatic move higher
from a test of support at the 20-day moving average around 34.00 on March 17. Unlike
gold, the move lower in silver was not dramatic, and was quickly bought in very
strong fashion. A five-day period of trade has seen silver move up to test 38.00,
which has created a very bullish trend, and a very strong momentum read to the long
side. Now may not be the time to instigate a new long positions in silver, and signals
and alerts will be issued after the next test of support is in place so that those
who missed the long-silver move will have a charts to participate.
Global tensions, and supply and demand questions, have seen dramatic moves higher
in crude oil prices over the course of the last five days. West Texas intermediate,
the most liquid of futures contracts in the oil market, saw a move up to test $107
a barrel in trade on Thursday. It is very unusual to see price gaps in WTI futures
trade, but three of the last four trading sessions have seen dramatic moves higher
in very short periods of time. Near-term upside technical price points of note will
be 109.10, and 111.90, which look to be areas that traders could push WTI price
up to test. Any downward movement looks to be very well supported at the 101.50
area, which is the 20-day simple moving average price point. At that time traders
will be looking closely at the reaction in global market trade. It is unlikely that
any signals or alerts will be issued On WTI until early next week.
Attention has been focused recently on the US dollars ability to maintain its global
reserve status, and the global markets tolerance for US administrations manipulation
of the greenback. There are probably many stories to tell in regard to the reasons
for the dollar's decline, with most layman very unlikely to ever have access to
the truth behind manipulative moves that have been in place for longer than many
would realize. The net sum gain of whatever needed to be achieved by those in control
over the course of the last three years can be seen in the global market that is
more interconnected than at any time before, a more reliant upon soundbite headlines
to move asset prices than historical research and analysis.
~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~

Currency Review
Dollar Index Inflection Point
Global traded markets are starting to see a move towards the historical norm where
the US Dollar, still the global reserve currency, moves inversely to precious metal,
commodity, and equity market direction. As discussed in the global video charting
on Wednesday, signals are coming that the previous 12-month inverted correlations
that ran around 90% are showing themselves again, after a six-month sabbatical following
the implementation of the Federal Reserve's quantitative easing programs.

The amount of social, economic, and physical changes happening in the globalized
traded market have disrupted regular market correlations, and now may be a time
that traders and investors will start to see a free flowing period of trade, unimpeded
by the need to constantly hedge currency manipulation. The inverse correlation over
the last six months between precious metals and the dollar has been matched only
by the US dollar/euro inverse correlation.

The driver of Usd valuations has been changing on a day-to-day basis, and dominated
by whatever may be happening at the Federal Reserve Bank of New York, which has
been in control of liquidating massive amounts of US debt, that recently have been
overshadowed by unfolding global events. Equity, bond, and interest rate markets
have absorbed a period where historical trading patterns and links were forsaken
as the Federal Reserve took control of the globally traded market while setting
the tone for Permanent Open Market Operations that bought back Treasury notes from
primary dealers and forced cash into the equity arena.

The next quarter of trade is very likely to see the inverse Usd/Equity historical
links build back towards the 90-95% levels that recently dropped to lows not previously
seen. The reason will be the ending of the POMO operations, and the fact that risk
markets will have to find fair value themselves each day, rather than being drip-fed
by the Federal Reserve. Signals and alerts will be sent to clients as price action
unfolds, with updates sent via TheLFB daily newsletters, indicating which markets
are likely to be moving, and why.

The dollar index is trading around the 76.00 price point, in-line with recent client
note updates that have highlighted the importance of the global market holding the
greenback above a critical price point area. The breakdown of inverse correlations
between the dollar and global equity momentum has left the potential for a 5% drop
in dollar index valuations, just to get aligned with current price points on the
S&P 500. However, it would seem that global central bankers are unwilling to allow
the weak dollar policy being instigated by the Federal Reserve to lead to a drop
in dollar index values below 75.50.

Regional currencies are fighting the ravages of US dollar induced commodity inflation,
which is pressurizing exporting nations which are absorbing higher commodity costs
at the same time as absorbing a deterioration in US dollar values that are increasing
the cost of those buying overseas exports. It seems clear from the fact that moves
to form yearly highs on S&P 500 trade were not mirrored by the dollar index dropping
to the equivalent 72.50 price point that the global banking community is willing
to purchase the dollar in an effort to contain commodity inflation.

Over the course of the last 10 years it has been hard to find too many periods of
trade that do not have major currency pairs moving as one against the dollar. The
last six months of trade however, have revealed a time that has every major currency
reacting individually to economic outlooks, and sound-bite headlines. This really
has been a historical time in regard to separation in currency pair valuations as
the global market travels into uncharted waters in regard to quantitative easing,
interbank liquidity, and the impact of social unrest. There looks to be a very defined
channel on the dollar index that has 75.50 support and 77.50 resistance, and unless
a sustained break of either area is seen most currency pairs will continue to oscillate
in their own equivalent price channels.

In general, sustainable price movement looks only to be likely from the next currency
that has a central bank interest rate increase, as the market will be forced to
realign on the long side of that particular currency, whatever the global traded
market is doing at that time. Next week looks to be a pivotal time that will potentially
set fair value on currency pairs for the next quarter. Signals, alerts, and updates
will be sent to clients as currency markets evolve.
~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~

Disclaimer And Disclosure

Forex trading involves substantial risk of loss and is not suitable for everyone.
Each investor should assess his or her financial situation and risk tolerance before
proceeding.
Information, analysis and methodologies provided on The London Forex Broadsheet(TM)
are for informational purposes only and should not be used as a replacement for
research by an individual investor or licensed investment professional. Neither
The London Forex Broadsheet nor any of its affiliates shall be liable for any errors,
omissions or for any actions taken in response to information contained on www.TheLFB-Forex.com
[http://r20.rs6.net/tn.jsp?llr=d7egsfcab&et=1104942235648&s=4796&e=001p5hURBZCqW3V9e4EKFtCSCK3eLvxYPSVVm1EZAoDaclQl0-FMJQr4UQGpJUrLPJAZQoGTBgn_jmEjNVQvkK9VIXrlpff04ayUHkb4wOhdNGMH7QS1a81QQ==]
or any affiliated or other linked sites. All users agree that the information contained
in The London Forex Broadsheet shall not be re-distributed or reproduced except
with express written consent of LFB Services(TM), LLC.
Any non-affiliated services which users may access through the links on the web
site which may include brokerage firms shall be deemed independent of LFB Services,
LLC. The London Forex Broadsheet is not a registered brokerage firm and any links
provided to such companies are for your convenience only. The London Forex Broadsheet
shall not be liable for any damages or costs of any type incurred in conjunction
with your use of the services of any third party listed on the site.
The London Forex Broadsheet hereby makes no representations or warranties regarding
the accuracy of any information contained on www.TheLFB-Forex.com [http://r20.rs6.net/tn.jsp?llr=d7egsfcab&et=1104942235648&s=4796&e=001p5hURBZCqW3V9e4EKFtCSCK3eLvxYPSVVm1EZAoDaclQl0-FMJQr4UQGpJUrLPJAZQoGTBgn_jmEjNVQvkK9VIXrlpff04ayUHkb4wOhdNGMH7QS1a81QQ==]
or any affiliated or other linked sites.
This Risk Disclosure shall apply to all communications transmitted from The London
Forex Broadsheet.
© 2011 LFB Services, LLC. All Rights Reserved.