Looking Ahead: September 30 through October 4, 2013

Investors were cautious last week as they monitored the ongoing battles in Washington DC over the budget for the new fiscal year beginning October 1st and raising of the debt ceiling which needs to be done by October 17. Little attention was paid to economic data. The Reserve Bank of Australia, Bank of Japan and the European Central Bank meet this week. Policy changes are not expected. A slew of new economic data will be released including Japan’s important Tankan report as well as manufacturing, services and composite purchasing managers’ indexes for Eurozone members, the UK, U.S., Japan and India. However, focus will continue to be on the U.S. Congress and decisions about the budget and then the debt ceiling. The repercussions of these decisions will reverberate globally.

Looking Ahead: September 16 through September 20, 2013

Concerns about Syria were prominent during the week. As diplomatic efforts to resolve the problem began, fears receded and investor angst concerning possible Federal Reserve action kept investors on the sidelines as they waited for the FOMC announcement and the Fed chairman’s post meeting press conference. The UK continued to post better than expected economic data, this time on the labour market. China’s data showed the economy there beginning to stabilize. The FOMC finally will announce its decision concerning the reduction of Fed stimulus this week. Also on tap, the Reserve Bank of India under its new governor Raghuram Rajan will try to find ways to stimulate the Indian economy and bring about reforms that are desperately needed. The Bank of England releases minutes from its September monetary policy board meeting. They will be parsed carefully as bank watchers look for further clarification of the Bank’s forward guidance.

Looking Ahead: September 9 through September 13, 2013

The Reserve Bank of Australia, European Central Bank and the Banks of Canada, Japan and England refrained from changing their respective monetary policies. Economic data were mixed with August PMIs showing improvement for the most part. Investors continue to wait to see what the Federal Reserve’s next policy move will be. The upcoming week will feature the monthly plethora of data from China including August consumer and producer prices, industrial output, merchandise trade and retail sales. Both the UK and Australia report labour market data. But investors will also be monitoring the situation in Syria and of course FedSpeak for the last clues before the pre-FOMC meeting blackout period.

How to trade Quiet Summer Market

The market has been very quiet and less liquid the past month. Mainly this is due to summer inactivity when most fund managers go on holiday. Having said that, if you were a swing trader these past months it has been very difficult to trade. The most difficult thing is to sit there and wait for your trading opportunity. This may take a very long time. Patience I find is a killer for new traders. One way to to offset this is to go into the shorter times frames. What I have found is that the market ebbs and flows in many different directiions. If you were to give me a chart and tell me to guess what time frame it was in, it didn't really matter to me. What really matters is how the price action trends. I've seen 5 min charts trend so well that you could make a killing in the market. Same could be said about 15 min. charts or even 1 hour charts. The only other factor is the time. Price action on the 5 min charts are faster than 1 hour charts. I truly believe when we see things in clarity, this is when our trading excels. So don't just sit there on the 4 hour charts. Learn to read lower time frames and you will see greater success.

Looking Ahead: August 26 through August 30, 2013

Equities mostly declined last week as investors worried about what would be said in the FOMC minutes. Mostly favorable economic data in the industrial countries helped to neutralize the impact of the minutes. Growth in both Germany and the UK picked up in the second quarter — certainly good news. Further, flash PMI readings tended to substantiate growth going forward and not just for Germany and the UK. China’s PMI surprised in edged over the breakeven point with a reading of 50.1 indicating that manufacturing is stabilizing — certainly good news to supplier countries. The last week of summer is already here! As always, the last week of the month is a busy one with new economic data from Europe and the usual slew of releases from Japan. Investors will shift their attention to FedSpeak as they gear up for the FOMC September meeting.

Looking Ahead: August 19 through August 23, 2013

Investors continue to be obsessed with the Federal Reserve’s next move and in the process could be ignoring mitigating information that could delay any cut back in stimulus. Most equity indexes advanced on the week except those in the U.S. The last two weeks of August are typically slow with light trading. Data releases in Europe are typically deferred during this time as well. Investors will wait for September before making any dramatic moves, ceteris paribus.

Is this the bottom of Gold August 2013?