Category Archives: News

VIX falls Friday after volatile week

CBOE VIX fear index ends lower after three consecutive advances.
The CBOE VIX (NYSEARCA:VXX) declined on Friday, snapping a three-day winning streak, as U.S. stocks pared losses in the final hours of trade.

The Chicago Board Options Exchange (CBOE) Volatility Index closed down 12.8% on Friday but still showed strong gains for the week.

Trade wars, rising interest rates and tax cuts make for a volatile mix.

The EUR resumed rising against the USD

The euro resumed rising against the dollar regain the political risk of the week or around the Euro.

On Friday  The euro continued the increases against the US dollar following the previous session, beginning from a multi-week low, continued to rise above the 1.230 mark. Market demand for the euro is still growing, promoting the exchange rate rose, the exchange rate hit an intraday high of 1.233, almost recover the declines of last week. As of now, the euro against the dollar traded at a price of 1.2317.

Anxieties over a triggered global trade war sustained tendency to sell the dollar following U.S. President Trump declared a high tariff on imported steel and aluminum, which seen as one of the key factors pushing the euro higher against the U.S. dollar.

Meanwhile, the global stock market sell-off further supported the position of the euro as a financing currency, boosting the EUR/USD continuation of the previous day’s trading momentum. The day before, the euro rebounded sharply against the dollar at a low of 1.2155 and hit a hundred points.

The current exchange rate of The euro against the dollar remained at 1.2320 the first recovery from this week’s decline. It may now be time to retest the 1.2540 resistance above the downturn in the U.S. economy. Although the US consumer sentiment index reached 99.7 in February, surpassing the previous forecast of 99.5, the euro as a whole still maintained its upward trend.

In the meantime, the upcoming ECB meeting will be the next major risk event for the euro. Next Thursday (March 8) the European Central Bank will announce the March interest rate decision, most likely to delete QE flexibility related terms, but only slightly support the euro, as the European monetary policy tone will be partial to the overall pigeon.

If expected to be realized, the move by the European Central Bank will be comparable to the situation in early June last year, when the ECB discarded the interest rate flexibility policy and the euro did not respond immediately. However, at the end of June, the market started to price the ECB normalization Monetary Policy.

Also, Italy will hold a national election this Sunday, the political risk may drag on the European Central Bank’s interest rate decision, and the German Social Democrats and the German Chancellor Merkel led the CDU to establish a ruling coalition will also vote on the same day.

Concerns over the global trade war triggered a sustained propensity to sell the dollar after U.S. President Trump announced a high tariff on imported steel and aluminum, which seen as one of the key factors pushing the euro higher against the U.S. dollar.
technical analysis
The euro is currently under pressure at 1.2332 against the dollar, if stabilized below the level above, then the short-term resistance to see the 1.2390-1.24 range, and finally the previous test high of 1.2550 near the test.

On the other hand, if the exchange rate fell again, the recent support at 1.220-1.2195 below the range, once again broken under the concern 1.215 can efficiently support.

VIX fell again on Friday as calm continued to return to major U.S. markets.

Stocks continue to shrug off the recent swoon but still remain vastly overvalued compared to most historical measures.

Some analysts say that this is the third most overvalued market in history, just behind 1929 and 2000, while others say that some measures put it at the most overvalued of all time.

Markets typically recede from such lofty levels, sometimes dramatically and so long term returns could be substantially lower than investors have grown used to since the advent of free money and zero interest rates since the 2008 crisis.

The recent action in VIX ETNs has been impressive, to say the least, with XIV, the wildly popular inverse VIX ETF imploding after hours and losing more than 90% of its value in one day.

The decline was so outrageous that the Securities and Exchange Commission and Commodity Futures Trading Commission are reviewing the situation.

February 5th was D-Day for volatility based products when the Dow had its biggest single point drop in history and VIX skyrocketed. XIV was worth almost $2 billion before the crash and the after-hours decline made it impossible for investors to get out. SVXY, the ProShares inverse VIX product also took nearly a 90% dive but managed to stay open for business.

The last word: VIX continues to drop as volatility exits and calm returns to U.S. markets. For the time being, VIX Trader remains positioned in VXX credit spreads and will continue to trade VXX options and VIX ETNs as opportunities develop.

FCA Urges Investors Be Vigilant to fraudsters Soliciting Online Investments

The Financial Conduct Authority (“FCA”), the UK’s financial regulatory body, published a warning about risks of online investment fraud.

The FCA suggested investors be vigilant to scammers soliciting investments in binary options, contracts for difference (CFDs) and cryptocurrencies such as bitcoin.

The FCA warned that retails investors are targeted by fraudsters via social media venues such as Facebook, Instagram, WhatsApp, and Twitter, rather than by telephone, and are being lured to invest by promising high revenues and associating the opportunities to luxury items such as luxury cars and watches. Once someone invested, the prices distorted on their website, people are tied in with extreme pay-back requirements and sometimes customer accounts are closed arbitrarily as the fraudsters steal the funds.

The rise in these scams has affected the profile of the likely victims, too. Historically, the sector of people above 55s has been most at risk to investment fraud. Nevertheless, the FCA’s latest research has found that those aged under 25 were 13% more likely to trust an investment proposal they received via social media compared with 2% for the over 55s. Overall, around 20% of the respondents to the FCA’s research stated that online customer reviews and testimonies increased their trust in a company or opportunity.

The FCA has started a ScamSmart campaign that encourages individuals to check its dedicated website to estimate whether a company is authorized or to gather advice about whether an opportunity is likely to be fraudulent.

Binary options investments became a regulated investment on 3 January 2018, and the FCA has already published a list of 94 firms it believes are offering binary options trading to UK consumers without authorization.

The FCA’s main advice to consumers is:
Decline unsolicited investment offers whether made online, on social media or over the phone;
Check the FCA register before investing
check the FCA warning list of firms to avoid;
Obtain unbiased advice before investing.