Ayman Khlifat'Blog

Check the chart below
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Over the last few years, a quiet revolution has been reshaping the energy business in the U.S. The success of 'shale gas' -- natural gas trapped within dense sedimentary rock formations or shale formations -- has transformed domestic energy supply, with a potentially inexpensive and abundant new source of fuel for the world's largest energy consumer.

With the advent of hydraulic fracturing (or fracking) -- a method used to extract natural gas by blasting underground rock formations with a mixture of water, sand and chemicals - shale gas production is now booming in the U.S. Coupled with sophisticated horizontal drilling equipment that can drill and extract gas from shale formations, the new technology is being hailed as a breakthrough in U.S. energy supplies, playing a key role in boosting domestic natural gas reserves.

As a result, once faced with a looming deficit, natural gas is now available in abundance. In fact, natural gas inventories in underground storage hit an all-time high of 3.929 trillion cubic feet (Tcf) in 2012. The oversupply of natural gas pushed down prices to a 10-year low of $1.82 per million Btu (MMBtu) during late April 2012.

However, things have started to look up in recent times. This year, cold winter weather across most parts of the country boosted natural gas demand for space heating by residential/commercial consumers. This, coupled with flat production volumes, meant that the inventory overhang has now gone, thereby driving commodity prices to $4.38 per MMBtu - the highest since Sep 2011.

This, in turn, is expected to buoy natural gas producers. With the financial incentive to produce the commodity and the subsequent improvement in the companies' ability to generate positive earnings surprises, the stocks are likely to move higher.

But as the weather continues to turn milder and temperatures reach higher-than-normal levels, natural gas demand may suffer in the near future on account of above-average builds, thereby pulling down prices again.


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The US dollar is finishing the week firmly for two reasons :

The first is positive developments for the dollar, though we are skeptical of how quick the Fed tapers off its purchases given the subdued price pressures and slow gains in non-farm payrolls. Bernanke's testimony will be important.  The second is a deterioration of the macro-fundamentals in Europe and the dollar-bloc, with no major objection to continued yen weakness. Interest rate developments generally are consistent with price action.

The EURUSD looks to have made a double top, which was probably a counter trend correction, and is breaking out to the downside.

When counter trend corrections are over, it will normally lead to a big move back with the main trend, so odds are that if the EURUSD continues lower it could be a big move.

The EURUSD looks to be a great Chart to Watch right now, as a big down move may just be starting to unfold.

i will focus on 2 targets this week ( 1.2850 and 1.2770 ) .. see the chart below .
















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The dollar exploded higher against its major counterparts during the last week, finally pushing USD/JPY through the significant psychological resistance at 100.00. Once through 100.00, it was a quick trip higher as bulls managed to grab all the stops that had been accumulating over that key figure.

USDJPY has traded as high as 101.97 on Friday – up over 300 pips from Wednesday , Going forward, it’s hard to see much of a case for USDJPY falling back below 100.00 as the threat of the Fed tapering the US QE program looms. That tapering will certainly boost the dollar against other major currencies, and the Yen looks set to remain weak as the BOJ continues on its inflationary path .

Even major bouts of risk-off sentiment, usually a hallmark of Yen strength, should still leave the Yen well supported going forward as traders will likely continue to pile into the US Dollar on hopes of greater interest rates to come.

How all of this is affecting the other Yen crosses is very interesting. AUD/JPY, for example, the poster child for risk-on sentiment has failed to make new highs, and is in fact still trading near 400 pips below its recent high of 105, despite the USD/JPY move and despite a strong week from equities. It is possible that the Yen pairs may once again be diverging from themselves and may provide good hedging opportunities going forward. It is also possible that this underperformance from AUD/JPY and NZD/JPY are warning signs that the recent move higher in equities is unsustainable and we are due for a correction. If we do indeed see some sort of correction going forward keep a careful eye on USD/JPY and that 100.00 figure.

More update next the coming week

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The economic calendar is quiet in European session hours and through the end of the trading week. This puts the spotlight on a meeting of G7 finance ministers and central bank governors set to begin today and carry into the weekend. Trades will look for commentary about the so-called “currency war” after central banks in New Zealand and Australia seemingly jumped into the fray this week. The debate between countries promoting fiscal austerity and those in favor of pro-growth policies as the way to correct global imbalances and spur recovery is likewise set to continue.

On balance, officials are unlikely to issue much besides vague admonishments against competitive devaluation given the increasingly widespread drive toward monetary stimulus across the globe. Meanwhile, policymakers’ taste for deficit reduction seems to be on the wane, pointing to the likelihood of a relatively accommodative tone to official rhetoric. Taken together, this seems supportive for risk appetite, which seems to open the door for continued Yen weakness as capital pours into carry trades financed in terms of the perennially low-yielding currency.


My Recommendations
keep shorting AUDUSD below 1.0100 targeting 0.9960 stop above 1.0160
Keep shorting EURUSD below 1.3080 targeting 1.2960 and 1.2920 stop above 1.3120 .
Good Luck

Ayman Khlifat on Twitter 
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Follow @aymankkhlifat

Follow @aymankkhlifat

The Gann method has been based on the principle that the market goes on and on through patterns or cycles. Traders then have to remember that market movements repeat itself over a given period of time. They also have to understand how psychology is used especially with the concept of price. Traders today may not have the difficulty of creating their charts manually as there are various programs that they can use for that purpose. What is important is that they are able to make use of this technological innovation to succeed in their trading. People may also have the choice today to just hire the services of money managers who actually employ the Gann method in order for them to make more out of their money.

Modern day traders can simply work whenever it is convenient for them. All they need today is a good computer and fast internet connection. They may learn about the various techniques like the Gann techniques from the software programs that are readily available today. However, although trading can be very convenient, traders still have to apply discipline and consistency if they would like to earn profit from their chosen trading technique to use

Most traders who continue to gain more success in their trading follow a simple formula. They make use of the best trading method like the Gann trading technique which they apply and use with discipline. All those who can follow this may find financial rewards easier to attain at any given trading situation. This may sound very easy but it is quite difficult to do especially when it comes to disciplined trading. Most often people are affected by their emotions which in turn can affect the way they render decisions even on money matters.

Market crashes may be repeated just like during Gann's time so those who simply ignore that prices move in terms of cycles and patterns may lose more especially when they think that prices may go up and up forever. Building financial wealth through the Gann Method is possible only for those who can really trade with discipline and for those who have a keen foresight about future market trends based on patterns, cycles or market movements that are bound to be repeated over a definite period of time. Traders can analyze and predict possible market trends with accuracy. There are also other techniques that can be used together with this strategy, what matters most is that traders can hold the reins of their emotions when they are in the trading arena.

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