The Brazilian real hits all time low as it’s the worst emerging market currency this year

Hard times in Brazil

The market seems to love the idea of opening up while hating the idea of not closing at all.
USD/BRL hit a record today at 5.50. The Brazilian real is now down 26.7% on the year with hardly a bounce off the bottom.
Hard times in Brazil
What’s even worse is that the Brazilian bovespa is one among the world’s worst performing equity markets — possibly the worst. In BRL terms it’s down 31% and in USD terms it’s down 49.3%.
The latest leg down in the currency comes on increasing bets of rate cuts and proposed amendments to the constitution to allow the central bank to buy government and corporate bonds.

5 Major Trading Pitfalls

2dl87puPitfall #1. Betting the farm. Let’s be realistic. Not every trade is going to be a winner. Here is a simple rule for you to remember. Never commit more than 10% to any one position. When I was trading in the pits in Chicago I heard for the first time about the “RIOTRADE”. Simply put, you take a huge position in the market. If it works out, you are a hero. If you lose, you leave home and head for Brazil. Again, NEVER BET THE FARM ON ANY POSITION.

Pitfall #2. Planting too few seeds. This one goes hand in hand with the first pitfall. The key here is diversification and following several markets. Ken watches 30 markets and looks for profit opportunities in each one as they occur. PLANT MORE SEEDS AND YOU CAN ENJOY MORE WINNERS.

Pitfall #3. Jumping the gun. Patience, patience, patience. This is perhaps one of the toughest things for traders to remember, particularly after they have taken some good money out of the market. JUMPING INTO A MARKET BEFORE ALL INDICATORS ARE POSITIVE CAN CAUSE UNNECESSARY LOSSES.

Pitfall #4. The hope trap. This is one of those pitfalls that goes completely against human nature and it is the biggest account killer. What I am talking about is hanging onto a losing position in the desperate hope that it will turn around. A SIMPLE SOLUTION IS TO ALWAYS PLACE A STOP ON EVERY MARKET POSITION AND DO NOT CANCEL IT! Continue reading »

2009 Country Stock Market Performance

Below we highlight the year-to-date percentage change (local currency) for the major equity indices of 82 countries.  So far this year, 71 of the 82 countries are in positive territory, and the average change of all countries is 33.27%.  With a gain of 20.76%, the S&P 500 is 13 percentage points below the average, yet it’s the second best G-7 performer behind Canada so far in 2009.

The BRIC countries (Brazil, Russia, India, China) have been standouts this year.  Russia is up the most out of all countries with a gain of 126.71%.  Brazil, China, and India are all up more than 70%.  Along with Russia, the Ukraine, Argentina, and Peru are up more than 100% year to date.

Eleven countries are down so far in 2009.  Ghana is down the most at -48.26%, followed by Puerto Rico (-40.56%), Bermuda (-38.36%), and Costa Rica (-35.37%).
2009 country stock market

UK And US Among Top 5 Weekly Sovereign Deriskers

The week’s biggest (sovereign) CDS movers have been released, and we have some new entrants in the most endangered species list. While by now nobody will be surprised that the UK is a consistent top 2 player (coming in this week with $319 million in net notional derisking, this making it the 8th week or so the country has made the top 3), only behind Italy and its $452 million in net notional, and just in front of last week’s #1 Brazil, the presence of the United States at #4 should be a little unsettling. It has been months since the US appeared in the top 5. And just like in the long gold case, the same types of existential questions once again arise when the interest in US CDS picks up: who gets to pay off your contracts in the case of an event of default? Elsewhere, the presence of Korea and Turkey (or Australia) in the top 10 should not come as too surprising. On the other end, short covering was violent in CDS of Spain, Hungary and Portugal – Europe’s newest lepers. Is the CDS community concerned the EU can actually pull out a rabbit out of the hat that actually works for once? Hardly. The top 10 reriskers also saw the inclusion of France and long-forgotten insolvent Greece.

5 Major Trading Pitfalls you must avoid at all costs!

5pitfallsPitfall #1. Betting the farm. Let’s be realistic. Not every trade is going to be a winner. Here is a simple rule for you to remember. Never commit more than 10% to any one position. When I was trading in the pits in Chicago I heard for the first time about the “RIOTRADE”. Simply put, you take a huge position in the market. If it works out, you are a hero. If you lose, you leave home and head for Brazil. Again, NEVER BET THE FARM ON ANY POSITION.

Pitfall #2. Planting too few seeds. This one goes hand in hand with the first pitfall. The key here is diversification and following several markets. Ken watches 30 markets and looks for profit opportunities in each one as they occur. PLANT MORE SEEDS AND YOU CAN ENJOY MORE WINNERS.

Pitfall #3. Jumping the gun. Patience, patience, patience. This is perhaps one of the toughest things for traders to remember, particularly after they have taken some good money out of the market. JUMPING INTO A MARKET BEFORE ALL INDICATORS ARE POSITIVE CAN CAUSE UNNECESSARY LOSSES. Continue reading »

Marc Faber Video Interview From Copenhagen

Marc Faber mentions Brazil as an interesting emerging market in this video interview.This interview simply reinforces my determination.
Don’t miss to watch :Just listen carefully at 4:28….Enjoy !!

Bad NEWS Continues For BRAZIL

BRAZIL2Brazil’s economic growth continues to disappoint.

After data in December showed Brazil’s economy shrank in the third quarter of last year for the first time since 2009, the central bank’s IBC-Br index, a monthly proxy for gross domestic product, showed economic activity fell 0.3 per cent in November from a month earlier.

The market had been expecting an increase of 0.1 per cent for November.

The surprise contraction comes just two days after the central bank voted unanimously to raise its benchmark Selic rates by a larger-than-expected 50 basis points to 10.5 per cent.

The aggressive move is aimed at tackling the country’s high inflation, which hit 5.91 per cent last year. Continue reading »