U.S stocks hit record highs on Bernanke comments; Dow rises 1.11%

U.S. stocks closed at record highs on Thursday after Federal Reserve Chairman Ben Bernanke said late Wednesday that stimulus tools will remain in place for the foreseeable future.

Stimulus programs such as the Fed's monthly USD85 billion bond-buying program push up stocks by keeping interest rates low.

At the close of U.S. trading, the Dow Jones Industrial Average finished up 1.11% at a record-high 15,460.92, the S&P 500 index ended up 1.36% at a record-high 1,675.02, while the Nasdaq Composite index rose 1.63% to 3,578.30, its best showing since 2000.

Fed Chairman Ben Bernanke said Wednesday evening that economic data suggest that the U.S. economy still requires highly accommodative monetary policies.

Bernanke made his comments just hours after the release of the minutes from the Fed's June monetary policy meeting, which revealed other U.S. central bankers felt likewise.

Data released Thursday dampened expectations for an imminent end to monetary stimulus programs as well, which sent stock prices rising further.

The number of individuals filing for initial jobless claims in the U.S. hit a two-month high last week, rising by 16,000 to 360,000, according to the Labor Department, defying expectations for a drop of 4,000 to 340,000.

A separate report showed that U.S. import prices fell 0.2% on a yearly basis in June, above expectations for a 0.1% decline, while exports prices rose 0.2% year-over-year, undershooting expectations for a 0.4% rise.

Fed language and soft jobs numbers sent stocks soaring by sparking fresh speculation that the U.S. central bank will continue pumping liquidity into the economy via asset purchases, a recipe for climbing stock prices.

Leading Dow Jones Industrial Average performers included Intel, up 3.18%, Microsoft, up 2.94%, and Walt Disney, up 2.65%.

The Dow Jones Industrial Average's worst performers included IBM, up 0.24%, Johnson & Johnson, up 0.53%, and Exxon, up 0.55%.

European indices, meanwhile, finished higher.

After the close of European trade, the EURO STOXX 50 rose 0.81%, France's CAC 40 rose 0.74%, while Germany's DAX 30 finished up 1.14%. Meanwhile, in the U.K. the FTSE 100 finished up 0.59%.

On Friday, the U.S. is to release the weekly government report on initial jobless claims, a leading economic indicator, as well as official data on import prices.

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Forex - Dollar falls as Fed says stimulus to stay in place for now

The dollar fell against most major currencies on Thursday after Federal Reserve Chairman Ben Bernanke said stimulus programs will stay in place for the foreseeable future.

Stimulus programs such as the Fed's monthly USD85 billion bond-buying program weaken the dollar to spur recovery.

In U.S. trading on Thursday, EUR/USD was up 0.95% at 1.3104.

Fed Chairman Ben Bernanke said Wednesday evening that economic data suggest that the U.S. economy still requires highly accommodative monetary policies.

Bernanke made his comments just hours after the release of the minutes from the Fed's June monetary policy meeting, which revealed other U.S. central bankers felt likewise.

Fed language sent the dollar plunging, as many investors were expecting more of a timeline as to when the Fed would begin tapering stimulus programs that weaken the dollar by keeping interest rates low so the economy will strengthen.

Data released Thursday dampened expectations for an imminent end to monetary stimulus programs as well.

The number of individuals filing for initial jobless claims in the U.S. hit a two-month high last week, rising by 16,000 to 360,000, according to the Labor Department, defying expectations for a drop of 4,000 to 340,000.

A separate report showed that U.S. import prices fell 0.2% on a yearly basis in June, above expectations for a 0.1% decline, while exports prices rose 0.2% year-over-year, undershooting expectations for a 0.4% rise.

Meanwhile in Europe, the European Central Bank said in its monthly bulletin interest rates will remain at currently low levels or even lower for an extended period of time, though the news came as little surprise to many traders, who chose instead to focus on the U.S.

The greenback was down against the pound, with GBP/USD trading up 1.21% at 1.5196.

The dollar was down against the yen, with USD/JPY down 0.94% at 98.75, and down against the Swiss franc, with USD/CHF trading down 1.33% at 0.9458.

Earlier Thursday, the Bank of Japan left monetary policy unchanged on Thursday in a widely anticipated decision.

The BoJ also upgraded its assessment of the economy, saying it is starting to moderately recover.

The dollar was down against its cousins in Canada, Australia and New Zealand, with USD/CAD down 0.84% at 1.0378, AUD/USD up 0.07% at 0.9180 and NZD/USD trading up 0.04% at 0.7839.

The dollar index, which tracks the performance of the greenback versus a basket of six other major currencies, was down 1.62% at 82.84.

On Friday, the U.S.  will release official data on producer price inflation as well as preliminary data from the Thomson Reuters/University of Michigan on consumer sentiment.

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FOREX HOLLY GRAIL RULES

One important thing that each new trader must know before entering this highly profitable customers are that every day life is not perfect. In forex world always know one fact and that’s: You’ll have a Losing Trade.

Every forex trader does. The key to being a consistent, predictable, reliable trader should be to, by the end during the day, add up more wins than losses. And, when you’re in a losing trade, certainly then don’t keep losing money (by lowering your stop loss for instance) only to Prove that you are right.

Remember, people have been trading the markets for the hundred and sixty years. The smart traders know there’s destined to be another trade. Cut your loses short and compound those winning positions.

And so the Holly Grail rules in order to stay alive with this game are You shouldn’t Trade the Forex Without  Placing of a Stop Loss Order and Never change it value by any reason.

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THE ADVANTAGES OF INDEPENDENT TRADER

Trader should trade alone first before he or she decides to trade with other people. This allows the individual to develop his own philosophy and his own understanding about himself and the market. However, that not everybody can trade alone because it requires a set of beliefs and values to be part of the trader’s character. Not all people are created with the same set of characteristics.

There are people who do not have faith in their abilities and in their capacity to learn to trade successfully. I know of individuals who need constant reassurance before they take any step towards their goals. In similar circumstances, trading in a group may be the only option available for some people to give them the push they need: otherwise, they may never start.

Not everyone can operate under the solitude of the journey. For example, there are people who need social contact more than others. Individuals who are social by nature and those who solve problems by talking to other people, may have difficulty undertaking a solitary endeavour. An independent trader are free to make their own decisions without having to find a way to explain the rationale of your decisions to anybody else. The time and effort can be focussed on what the market is doing and how to react to it, instead of worrying about the psychological and emotional dynamics of a trading group.

An independent trader also responsible and accountable for their own success or failure. They cannot shift the blame to anybody else. It could be disappointing to some knowing that they cannot blame anyone else if they fail. For others, it is very empowering to know that they, and they alone, are in charge of their own destiny. No one can blame you for their failures. No time is wasted on justifying your actions or feeling guilty about the impact of your trading blunders on someone else’s financial situation.

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WILL FOREX CURRENCY TRADING MAKE YOU RICH?

Many people are turning to Forex currency trading in an attempt to become financially independent and improve our life style. The markets certainly offer an excellent opportunity to meet and exceed this goals. In order to do this one must become educated in all aspect of the currency markets. For the most part there are two distinctive ways to gain this knowledge. One way is to be self taught and learn to trade the Forex markets by gaining trading experience while finding out what works and what not.

Forex trading required to obtain this knowledge. Taking an online currency training program is defiantly going to be less expensive that learning to trade by trial and error. The majority of the trader today entering the markets follow a different approach and receive there education by the way of a Forex trading course through online seminar or free forum. These offer many advantages over attempting to learning to trade for yourself. The first being the time factor and being able to get up to speed where you can actually make money trading the Forex markets.

There are many great systems offered today online that have been significantly improved over the years. My personal favorites are the community mentoring programs through forex forum that allow you to have one-on-one training with a professional Forex trader. The great thing about these types of courses that you usually leave the course with more money than you had before you signed up for the course. This happens because part of the instruction in one-on-one real time trading sessions where the student is allowed to trade with their own money while being instructed by the professional trader.

Just make sure that when you take the first step and start trading you are ready for it by taking time to learn. Which every approach you take to learn Forex currency trading you can be sure that there is a pot of gold at the end of the rainbow if you ever figure out he currency markets. They are not as difficult as some people make them out to be. After all, a currency can only go one of two ways, which makes the possibility of picking a winning trade fifty percent. If you can just take that percentage up a few points you are well on your way to winning big in the markets and reaching your goal of becoming financially independent.

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SMART FOREX TRADER ALWAYS GET EDUCATED

Training is essential, there are numerous online Forex courses. In truth, with all the information 

needed to trade forex, it would be silly to initiate trading without first getting educated to some degree.

Your brokers also incorporate free charts with live streaming information normally for free,

 in hope that when the customer starts trading for real they will upgrade the account with them.

If used properly the demo accounts are also a good educating tool, mistakes can be expensive in Trading, 

a wiped out demo account can be a bit of an embarrassment but less painful in the pocket if the account

 being used only contains virtual money.

Trade a Demo account properly with the right education and a novice trader should see their 

account get bigger and bigger which will give them the confidence to start trading for real.

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Greenback comeback in the European session

The massive sell off of the US dollar during the Asian session was met with some skepticism in the European one.

The dollar is partially recovering, with most currency pairs returning to less exaggerated levels. Perhaps Bernanke was dovish, but not extremely dovish.

• EUR/USD, which already crossed the 1.32 line, is down to 1.3034. All in all, it gained over 150 pips since Bernanke began answering questions, but this is way off the 300+ gains. Will it break below 1.30?
• GBP/USD, which met resistance at 1.52 is now down to 1.5070, still a safe distance from the all-important 1.50 line.
• USD/JPY, which made a relatively more limited move down to 98.50 or so, is back above 99.
• AUD/USD, which received a mixed employment report (more on that later), couldn’t conquer the 93 level and is at 0.9227, below the temporary double top.
• The Canadian dollar is standing out: it managed to hold on to its gains. USD/CAD is at 1.0370.

Bernanke did have bearish words: he said that accommodative monetary policy is here to stay, that the unemployment rate overstates the health of the US economy and that the Fed is missing on both its targets.

However, the move higher came on low liquidity, thus making the moves exaggerated. It’s also important to remember that Bernanke said similar things in the past, and that tapering of QE still means monetary expansion – an accommodative, loose, monetary policy.

An important indicator for jobs will be released today. See how to trade the US jobless claims with EUR/USD.

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Dollar scenarios after the FOMC meeting minutes, Bernanke

The greenback declined against most of its peers. Last night, after a very quiet European trading session, the dollar started to weaken strongly. The dollar index tumbled after Bernanke said the US economy still needs stimulus because the inflation and the unemployment rate are below target.

These words can affect the dollar in the longer term, so today we are going to have a very choppy day. What we see now is that the 20 days dollar strengthening period is over by now.

Technically the EURUSD could make a correction today and get back to test the 1.3000 level, but afterwards it could recover again, I bet on the bullish trend until end of this month.

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Bernanke Burnout: hundreds of pips move across the board

The fallout from Bernanke’s dovish commentscontinue. Major levels are being breached with some pairs moving hundreds of pips.

EUR/USD is challenging 1.32, GBP/USD is close to 1.52 and USD/JPY is around 98.50 — updates coming

• EUR/USD is already over 300 pips higher since Bernanke opened his mouth: from around 1.2880 to 1.3192 at the time of writing. Resistance is at 1.32 followed by 1.3250. Support at 1.3160, followed by 1.31.
• GBP/USD is over 250 pips since the comments were made. It traded in the mid 1.49s, and it is now just under 1.52. This line, 1.52, serves as resistance. Support is at 1.5144.
• AUD/USD was temporarily blocked by a double top, but it broke above it and is trading at 0.9264. The next significant level is 0.9344. Support is at 0.9233.
• USD/JPY is trading at 98.60, after falling even lower beforehand. The pair was trading over 100.40 earlier in the day. Moves here are quite violent. The really big support line is at 95.
• USD/CAD dropped as low as 1.0375. It traded above 1.05 beforehand. Support is at 1.0360, followed by 1.03.

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European stocks sharply higher on Fed optimism; Dax jumps 1.48%

European stocks were sharply higher on Thursday, as dovish comments by Federal Reserve Chairman Ben Bernanke on Wednesday sent global stocks broadly higher. 

During European morning trade, the EURO STOXX 50 rallied 1.18%, France’s CAC 40 gained 1.06%, while Germany’s DAX 30 jumped 1.48%. 

Global stocks gained ground after Bernanke said the Fed will continue to maintain accommodative monetary policy for the foreseeable future, citing low levels of inflation and the high unemployment rate.

The comments came after the minutes of the central bank’s June policy meeting showed that Fed policymakers remain divided over when to begin tapering its USD85 billion-a-month asset purchase program.

Financial stocks were broadly higher, as French lenders BNP Paribas and Societe Generale jumped 1.60% and 2.29%, while Germany's Deutsche Bank surged 2.10%. 

Peripheral lenders added to gains, with Spanish banks BBVA and Banco Santander advancing 0.78% and 1.47% respectively, while Italy's Unicredit and Intesa Sanpaolo rallied 1.88% and 2.10%. 

In London, commodity-heavy FTSE 100 jumped 1%, boosted by sharp gains in mining stocks. 

Mining giants Rio Tinto and BHP Billiton surged 4.48% and 4.58% respectively, while Polymetal and Fresnillo soared 7.96% and 9.57%. 

Financial stocks were also broadly higher, as shares in HSBC Holdings climbed 0.79% and Lloyds Banking jumped 1.29%, while the Royal Bank of Scotland and Barclays rallied 1.16% and 1.48%. 

Elsewhere, EasyJet gained 0.60% as shareholders were preparing to vote, later in the day, on an order for 135 Airbus SAS jets valued at USD13 billion. 

Adding to gains, Hays Plc surged 2.68% after saying its fiscal fourth-quarter total net fees increased 3%. In addition, the U.K. recruiter forecast full-year operating profit at the top of the GBP112.3 million to GBP125.5 million range of market estimates. 

In the U.S., equity markets pointed to a sharply higher open. The Dow Jones Industrial Average futures pointed to a 0.91% gain, S&P 500 futures signaled a 0.98% jump, while the Nasdaq 100 futures indicated a 1.05% rally. 

Later in the day, the U.S. was to release the weekly report on initial jobless claims.

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Gold futures rally 3% after Bernanke backs stimulus

Gold futures rallied sharply to trade near a three-week high on Thursday, after Federal Reserve Chairman Ben Bernanke said that the central bank will maintain its easy monetary policy for the foreseeable future.

On the Comex division of the New York Mercantile Exchange, gold futures for August delivery traded at USD1,284.75 a troy ounce during European morning hours, up 3% on the day.

Comex gold prices rose by as much as 3.8% earlier in the session to hit a daily high of USD1,297.05 a troy ounce, the strongest level since June 24.

Gold futures were likely to find support at USD1,207.25 a troy ounce, the low from July 5 and resistance at USD1,347.45, the high from June 20.

The dollar tumbled against all the major currencies after Bernanke said the Fed will continue to maintain accommodative monetary policy for the foreseeable future, citing low levels of inflation and the high unemployment rate.

Bernanke said last month the bank could begin tapering its USD85 billion-a-month asset purchase program by the end of 2013 and wind it down completely by the middle of 2014 if the economy picks up as the central bank expects.

The comments came after the minutes of the central bank’s June policy meeting showed that Fed policymakers remain divided over when to begin tapering its USD85 billion-a-month asset purchase program.

Around half of Fed policymakers believe the bank should start to scale back bond purchases by the end of the year, while others believe the labor market still remains too weak.

The U.S. dollar came under broad selling pressure as expectations grew the Federal Reserve would keep its loose monetary policy in place.

The dollar index, which tracks the performance of the greenback against a basket of six other major currencies, was down 1.2% to trade at 83.20, the lowest level since June 25.

Dollar weakness usually benefits gold, as it boosts the metal's appeal as an alternative asset and makes dollar-priced commodities cheaper for holders of other currencies.

Gold prices are on track to post a loss of 23% on the year, the worst yearly decline since 1981, amid speculation the Fed will start to unwind its stimulus program by the year's end.

Moves in the gold price this year have largely tracked shifting expectations as to whether the U.S. central bank would end its bond-buying program sooner-than-expected.

Elsewhere on the Comex, silver for September delivery surged 4.3% to trade at USD19.98 a troy ounce, while copper for September delivery jumped 3% to trade at USD3.185 a pound.

The red metal found additional support amid growing expectations the People’s Bank of China will introduce fresh easing measures to boost growth following the release of dismal trade data on Wednesday.

China is the world’s largest copper consumer, accounting for almost 40% of world consumption last year.

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