Archive for the ‘Important Announcements’ Category

Overbought and Oversold

Friday, December 7th, 2012

Often, when we check the market analysis for the day, the term overbought and oversold is included in the analysis. But what does it really mean and how will you discern which is which? How will it affect the market movement?

By definition, Overbought refers to a situation wherein the demand for the currency pairs exceeds what is expected of it, resulting to a very significant movement, which can no longer be supported by the fundamentals. It is a sudden upward movement of the currency that surpasses its acceptable level. On the other hand, Oversold means that the price had a drastic fall and its level is beyond what is expected. It is usually an effect by the market overreaction or panic selling.

Now that we have provided its definition, how can we know if a currency is overbought or oversold? In technical analysis, there are is a type of technical indicator which detects whether a pair is overbought or oversold. They are called Oscillators.

Oscillators are technical indicators which measures the momentum through the use of its price compared to its historical price within a given time period. The most famous indicators of this kind are the RSI (Relative Strength Index) and Stochastic. The indicators, after inserted to a chart, will displaythe market movement within a scale of 0-100. In the case of Stochastic, if the indicator goes beyond the value of 80 then the pair is overbought. Meanwhile, if it goes below 80 then the market is considered to be oversold. But in the RSI, the overbought value is 70 and the oversold value is 30.

What happens if it does push through those values? The longer the indicator exceeds those values, the higher the chance of a reversal. But please take into account that a pair may sustain an overbought or oversold status for a long time especially on a strong trend. So it must only assist your main trading strategy by signaling when a reversal might occur.

Stephen Stevenson

Fiscal Cliff: The Valley of Debt

Tuesday, November 27th, 2012

One of the key points in the recently concluded election was about how the “would be president” then would tackle the ominous fiscal cliff. But many, especially non Americans, are still unfamiliar with the term.

The term “Fiscal cliff” was an expression that was used throughout the history especially on budget talks. According to research, the earliest reference to the term was traced back in 1957, when it was used in a New York Times article about home ownership.

At present, the term denotes the effect of a number of laws in the United States which may lead to spending cuts and tax increases. The whooping $7 trillion in spending cuts and tax increases was scheduled to take place at the beginning of this incoming year, 2013, which is approximately 35 days from now. The buzz word first entered the scene during a speech by Federal Reserve Chairman Ben Bernanke to the House committee on Financial Services last February 29,2012.

Under current law, on January 1st, 2013, there is going to be a massive fiscal cliff of large spending cuts and tax increases. I hope that Congress will look at that and figure out ways to achieve the same long run fiscal improvement without having it all happen at – at one date.

The laws involved are the Bush tax cuts and the Budget Control Act of 2011. The Bush tax cuts or Tax Relief, Unemployment Insurance Reauthorization, and Job Creation Act of 2010 is an act centered on the two-year extension of the Economic Growth and Tax Relief Reconciliation Act of 2011 provisions which was intended to delay the return of tax rates similar to the Clinton administration. It was passed by the United States Congress back in December 16,2010 and was signed as law by President Barack Obama a day after. It is scheduled to expire at the start of 2013 which would result to tax increases.

Meanwhile, the Budget Control Act of 2011 is a federal statute and was signed as a law by President Barack Obama on August 2,2011 which mainly focuses on debt ceiling and deficit reduction. It is also scheduled to expire almost the same time as the Bush tax cuts and would result to spending cuts.

The two effects would lead to a reduction in the budget deficit in 2013. The abrupt deficit would then lead then to an increased recession on the same year which would greatly damage its present economic recovery.

Stephen Stevenson

A History of the Brittle Cease Fire for Israel

Thursday, November 22nd, 2012

After eight days of unrest, both Israel and the Palestinian group Hamas had finally agreed to call upon a cease-fire. The move was initiated by the Egypt’s new Islamist government and supported by the United States.

The conflict which had just been recently reignited by Israel’s “Operation Pillar of Defense,” resulting to numerous civilians casualties for both sides. Four years after the Gaza War back in the winter of 2008-2009. The ideal – rooted conflict can be traced way back in 1988 when the founding charter of Hamas declared for a Jihad – Holy War.

Hamas

Is an acronym for Harakat al-Muqawamah al- ‘Islamiyyah which can be literally translated as “Islamic Resistance Movement.” It is a militant fundamentalist Islamic organization who currently occupies the West Bank and Gaza. Originally, it is an alternative group of Palestinian Liberation Organization (PLO) which is founded by Sheikh Ahmed Yassin aimed in establishing a network of charities, schools and clinics in the region. But certain ideologies and circumstances had urged it to engage into several bloody conflicts with Israel.

A year after the declaration of Jihad, its founder was convicted by an Israel court for giving orders to its members to kidnap and kill two Israeli soldiers which gained him a 9 year sentence in jail. He died 7 years later from an airstrike by Israel. According to reports, the group has been targeting Israelis with suicide bombing which now tolled to 500 individuals since 1993.

The group is viewed differently depending on the audience. Israel, United States, UK, and other western countries treats it as a terrorist group. Meanwhile, Arab and Muslim nations has a different perspective regarding them. They considers them as a victim of Israeli aggression.

Israel

a formidable ally of the United States in the middle east, Israel had age-long conflicts with its neighbors. Many Muslim countries and groups had outrageously deny its existence and called for its destruction. Hamas is one of them. The military power of Israel proved to be more capable than their foes which gained them territories in the Six-Day War.

Over time, some had yielded their advocate but conflicts still ravages on. Gaza War is one of those. It is a result of an offensive measure of Israel against Hamas over the disputed Gaza Strip, a strip of coastal land on the Mediterranean sea. It resulted to more than a thousand Palestinian and 13 Israeli soldiers dead.

Present Conflict

The present conflict was temporarily halted after a truce between the two sides has been agreed upon which took effect 14:00 EDT on Tuesday. According to reports, It stopped a supposedly Israeli ground

invasion which may lead to further casualties aside from 162 Gazans and 5 Israelis dead from bombing and rocket fires. Unfortunately 37 of the present casualties are children.

Stephen Stevenson

Up for the Presidency: Xi Jinping

Thursday, November 15th, 2012

The Chinese Community Party already released the voting result of who will dictate the leadership of China in the next five years. The country’s vice president Xi Jinping was chosen to take the presidency after Hu Jintao steps down from the office this March according to Xinhua.

Aside from being the Vice President, Xi Jinping is also currently the top-ranked member of the Central Secretariat of the Communist Party of China, Vice-Chairman of the Central Military Commission, President of the Central Party School and the 6th ranked member of the CPC Politiburo Standing Committee. He was the son of the communist veteran Xi Zhongxun and had experienced his part of struggle during the cultural revolution. He is a man known to have a tough stance on corruption and a frank openness about political and market reform.

The selection, which takes place every 5 years, was just recently deliberated with a list composing of highly recognized Chinese officials. Also in the same report, the other candidates who belong to the list are North Korean-trained economist Zhan Dejiang, financial guru Wang Qishan, minister of the party’s organization department Li Yuanchao, Tianjin’s party boss Zhang Gaoli, and the conservative Liu Yunshan.

But it seems that only those in the government are celebrating the transition of power. In an another article, the locals, most especially the young and educated, are infuriated because not even a touch of democracy is present in the voting. Only those in power are given the chance to select and appoint the leader, robbing the people of their say to the faith of their government in the next five years.

The recently concluded US election, wherein President Barack Obama was given his second term, also salted the wound of the Chinese. Democracy was proudly displayed on the event, giving a fair ground to the American citizens to choose on who will going steer the wheel for the next couple of years. In the same article, the Chinese people are also weary from shouts of reforms coming from the former upcoming candidates thus deepening the disappointment.

The incoming President Xi Jinping has a lot of tough challenges ahead and his character will be really put to test. The most pressing concern will most probably the real reforms in the system that the Chinese people are deliberately seeking. But achieving it won’t be a walk in the park because unrooting the habits, serving as a blockade for its achievements, is a messy process. Relationship with relatives and friends may be lamented in the process before the problem will be finally rooted out.

Stephen Stevenson

What Ifs for the 2012 Election

Wednesday, November 7th, 2012

As the two nominees still lay in deadlock on the on-going election, many are eagerly waiting for the results. According to the latest news, Obama is gaining advantage on winning the election but the key states results are yet to announced. Some polling states are still open and there may be some delays especially on the states where Sandy struck the most. For the meantime, I thinks better to contemplate on the “what ifs” of this election.

What if Romney wins?

An indeed a successful businessman, no one can doubt Mitt Romney’s capability as a businessman. He was donned with the business knowledge and skills from the prestigious Harvard University and has proven his worth in the corporate world through his Bain Capital.

But many are in doubt to whether he can put his business theories into reality. Moreover, certain individuals are also pessimistic in the application of his business theories into political arena. It seems that he has invested more effort in this campaign rather than in his experience on managing the state of Massachusetts, warding an impression of a less experienced political candidate than his competitor.

If in case he is elected, he have to deal with a congress, divided by difference in ideals unlike his business group, which may really give him a hard time. Also, being a less experience candidate may have its toll once he won the seat. Unlike Obama who already handled the rein in the past four years, Mitt Romney will start from the scratch in governing the most influential and most powerful country in the world. The health care programs of Obama will most probably terminated and the Bush cut tax for the wealthy may be made permanent according to some. He also must be prepared to face the issue about Iran’s nuclear material.

What if Obama wins?

Some of his supporters may have been waned off this past few years but most still have their faith on the first African-American president. Obama talks about the withdrawal of troops in Afghanistan and building educational program. But the plans may be hindered by the budget. After winning the election, the health care plans will probably push through and so are the pressing concern over Iran’s nuclear materials. Similar to Romney’s case. He has plenty of issues to handle if he would regain that White House seat of his.

Conclusion


In my opinion, I think its better if Obama wins. The experience and agenda are really two important factors to this election. But I hope that it won’t hurt much if the new kid in the block will be given the chance to steer the wheel.

Stephen Stevenson