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My New System

February 28th, 2007 by admin

I made my first trade today using a very simple system and profited 30 pips. This simple system really is a product of becoming very familiar with the intraday movement of the GBP/USD.

This morning with no economic releases, the GBP pushed downward below Friday’s low, 1.9457 but couldn’t push any lower than 1.9438. This failure to follow through usually indicates a possible trading opportunity. Timing is very important though. The push downward first occured at 5:15 am EST. I would never take a reverse here. In fact, I wouldn’t take a reverse until after a good portion of the US session is complete. My thinking is that if in this case there just aren’t enough sellers to push the pair lower. The intraday sellers in recognizing this fact will close their positions either taking profit or a small loss. I don’t like to trade greedy and in my experience, taking 30 pips from the GBP/USD is optimal. In my trade today, this proved correct, I got in at 1.9463, out at 1.9493, and the pair hit a high of 1.9495. Below is a chart of the movement this morning. In an attempt to possibly spur some discussion, I’ll post a video later.

This is just one way that I look for trading opportunities. I’m not looking at any of the traditional indicators, just the previous session low and the candlesticks for the current session. I’d say that I’m pretty close to trading naked (no lagging indicators.) I’m also of the school of keeping it as simple as possible.

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Analysis: Anti-wind groups cry foul

February 28th, 2007 by admin

WASHINGTON, Jan. 31 (UPI) — The American Wind Energy Association recently predicted large increases in wind-power capacity in its 2007 outlook, but industry buzz doesn’t faze the many staunch wind opponents.

Groups like National Wind Watch, Stop Ill Wind, War Against Wind, We Oppose Wind Farms, Industrial Wind Energy Opposition and many others in the United States and internationally are trying to get their message out about the negative aspects and effects of wind energy.

Critics argue that wind is unreliable. A brochure distributed by National Wind Watch says wind turbines are inefficient and will not be able to replace any significant amount of conventional energy. Another common argument is the visual impact and noise pollution.

“Almost everyone came into it the same way. It sounds like a good alternative but then someone gets involved when projects are proposed near them and they learn there are a lot of negative impacts that aren’t mentioned,” said Eric Rosenbloom, president of National Wind Watch. “It’s almost always a surprise how big they are.”

Rosenbloom said in Vermont and New York lots of deforestation occurs including loss of wildlife habitat, fragmentation, drainage and water issues, and none of it is well documented.

“It’s a big construction project involving several acres cleared for each turbine,” Rosenbloom said, “That’s weighed against what you get out of it, and that’s so little it’s hardly worth it.”

In Vermont and about 11 other states, small local groups began forming as wind farms were proposed. The goal of groups like NWW is to have a central library of resources to get new groups up to speed and to network. Many states have umbrella groups, like Save Western New York and We Oppose Wind Farms.

“We have private discussion lists which are really helpful because energy business insiders, wind experts and engineers all answer questions,” Rosenbloom said.

The groups prepare flyers and encourage the public to attend permit hearings that the proposals must go through before approval. They also raise money to hire lawyers to fight decisions and talk to legislators and utilities to sway general opinion.

“I would say in places like New York, where towns are passing ordinances limiting the amount of wind development that can happen the groups are effective. The public opinion statewide, in New York particularly, may be in favor of wind, but not at a local level,” Rosenbloom said.

Of the 4,038 billion kilowatt hours of electricity generated in 2005, 14.6 were produced from wind power, according to data from the Energy Information Administration. The wind power capacity was increased by 27 percent in 2006 and is expected to increase an additional 26 percent in 2007 by the AWEA. The AWEA says those statistics prove wind is now a mainstream option for new power generation.

Recent accidents in China and Scotland have led to safety studies. There is also research being done currently about possible health effects of living in close proximity to a wind turbine. But some say they’re not opposed to wind, but the practices of the wind industry. Richard Bolton, president of the Environmental Compliance Alliance in New York, said noise especially isn’t being adequately studied by wind-turbine developers.

“They’re paying consultants to get the answers they want. New anecdotal evidence shows the sound can be heard over long distances and residents are also affected by shadow flickers from the blades,” Bolton said.

Another point of contention is transmission. Bolton said that though the energy demand is higher on the East Coast, wind turbines are more effective in the Midwest.

“It is an issue, but I think that since the energy is being used on the East Coast, rather than shift all the perceived burden of hosting wind projects onto someone else it should be closer to where it’s being used,” said Thomas Gray, deputy executive director of AWEA. “It’s all a matter of how you look at it; transmission to a remote location with 10 percent greater production could be outweighed by cost of transmission.”

Gray said that while wind turbines in the Midwest are often more productive, it’s not the same in every case.

“In Vermont, for example, where there’s lots of pushback, I think there’s something to some of it, but a lot of what’s being circulated isn’t the most informed,” Gray said.

The AWEA said the potential impact of opposition groups is recognized, and both sides should seek the truth.

“Reliability is an issue; it’s not the energy resource that will be the best at all times. It’s lower than other types of generation at certain times of the year, but we need wind energy to reduce emissions,” Gray said.

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Turning an Old Idea Into a New Business

February 28th, 2007 by admin

Exchange-traded fund investors got three more ways to play the currency markets earlier this month.

On Feb. 13, the CurrencyShares Japanese Yen Trust (FXY) was issued for trading. Then on Feb. 20, the PowerShares DB US Dollar Index Bullish Fund (UUP ) and the PowerShares DB US Dollar Index Bearish Fund (UDN) launched.

The CurrencyShares Japanese Yen Trust is managed by Rydex Investments, and it rounds out Rydex’s portfolio of currency ETFs including the CurrencyShares Euro Trust (FXE) , the CurrencyShares Australian Dollar Trust (FXA) , the CurrencyShares British Pound Sterling Trust (FXB) , the CurrencyShares Canadian Dollar Trust (FXC) , CurrencyShares Mexican Peso Trust (FXM) , the CurrencyShares Swedish Krona (FXS) and the CurrencyShares Swiss Franc (FXF) . The funds measure the value of the foreign currencies in U.S. dollars.

When a foreign currency strengthens, it takes more U.S. dollars to buy one unit of that currency. So if you believe that the U.S. dollar will weaken against one these currencies, buying the ETF for that currency gives you protection from a fall in the value of the U.S. dollar. Of course, if the dollar gains in value, these ETFs are designed to fall.

If you have the notion that the U.S. dollar is going to rise in value, but are unsure as to which foreign currency to bet against, then take a look at the PowerShares DB US Dollar Index Bullish Fund (UUP) offered by Deutsche Bank and PowerShares Capital Management. This ETF holds a basket of the six currencies that make up the dollar index: euro, Japanese yen, British pound, Canadian dollar, Swedish krona and Swiss franc.

In the last few days, the dollar has weakened, so investors were better off holding the PowerShares DB US Dollar Index Bearish Fund (UDN) that goes up when the dollar sinks. Chalk that up to currency traders agreeing with former Fed Chairman Alan Greenspan’s comments on excessive U.S. debt and the potential for a U.S. recession by year-end.

Two sector ETFs also debuted earlier this month: the First Trust Nasdaq-100 Ex-Technology Sector Index Fund (QQXT) and the First Trust Nasdaq Clean Edge U.S. Liquid Series Index Fund (QCLN) .

The Nasdaq Clean Edge U.S. Liquid Series Index Fund tracks 45 clean energy stocks with a sector breakdown of 43.9% semiconductors, 19.6% alternative energy, 13.2% electrical components and equipment, 7.8% electronics, 4.3% manufacturing and 3.9% machine tools.

The fund’s largest holdings include MEMC Electronics (WFR) , Linear Technology (LLTC) and Suntech Power (STP) . Al Gore winning an Oscar for An Inconvenient Truth is a sign that a global focus on clean energy improves the outlook for these types of stocks.

And for the few remaining Luddites, the Nasdaq-100 Ex-Technology Sector Index Fund purports to follow all the members of the Nasdaq 100 that are not classified as technology stocks. On top of the 13.7% retail and 10.4% media concentrations, the fund actually does hold high-tech industries, including 10.4% internet, 9.0% biotechnology, 8.7% pharmaceuticals and 7.8% telecommunications.

Holdings such as Level 3 Communications (LVLT) , EchoStar (DISH) and Garmin (GRMN) seem pretty high-tech to me. Microsoft (MSFT) was correctly excluded, but another software company, Electronic Arts (ERTS) , remains in the basket. Some investment concepts I just don’t get.

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Executive 'must examine use of road tolling'

February 28th, 2007 by admin

ENVIRONMENTALISTS today urged Scotland’s political leaders to explore the use of congestion charging to tackle Scotland’s transport problems.

Friends of the Earth said Scotland now needs to look at introducing road-user or congestion charging.

Duncan McLaren, Friends of the Earth’s chief executive, said: “Building new roads and bridges is not the answer. They will simply lead to more traffic and more congestion. We need a package of measures to get people out of their cars and on to safe, convenient and affordable alternatives. This means greater investment in public transport, safer streets for cycling and walking, better land-use planning, and a fair system of road-user or congestion charging.”

An Executive study concluded last year that road tolling was unlikely to be introduced in the near future.

Researchers said that a previous “no” vote on congestion charging in Edinburgh and the time and money that would be required to develop a workable national congestion charging scheme suggested that such schemes are only a distant possibility.

Mr McLaren said: “Those parties who opposed the congestion scheme proposed for Edinburgh said the scheme was not the right one.

“Well, now is the time for those parties to get out of the policy slow lane and set out what the right scheme would be - not just for Edinburgh, but for other locations suffering from congestion and pollution.”

The call follows proposals from the Liberal Democrats to cut motoring taxes in Scotland to speed up the introduction of pay-as-you drive road charging north of the Border if the scheme is delayed in England.

The move would involve an attempt to wrest control of vehicle tax - which could be abolished - and fuel duty - which might be reduced - from Westminster.

It follows Tavish Scott, the Scottish Executive’s Lib Dem transport minister, criticising the “glacial” progress of road charging and calling for faster progress in Scotland.

Mr Scott was yesterday reported as saying he expected a consensus in favour of such a tax switch among MSPs after the May election. He said charging should leave drivers no worse off - by having improved public transport alternatives in urban areas, and cheaper motoring in the countryside.

However, the tax move was ridiculed yesterday, with observers suggesting it could trigger hordes of English motorists crossing the Border to refuel.

The Scottish Executive said it backed a UK-wide charging scheme - which is expected to be proposed for the middle of the next decade - but has no plans to go it alone.

Drivers would be charged depending on the type of roads they used, congestion levels and the time of day, with an expected consequent cut in motoring taxes. The plans are at an early stage, with the government seeking pilot projects in English cities such as Manchester or Birmingham.

The Executive’s national transport strategy includes consideration of a pilot study in a “medium-size urban area” to see how road charging might work in Scotland.

However, Mr Scott downplayed the likelihood of such an experiment when he launched the strategy in December. He said: “Our judgment is a UK scheme is what is most likely to happen.”

Plans to charge motorists 2 a day to drive into Edinburgh were emphatically defeated in a referendum in 2005. PM TO E-MAIL A MILLION ROAD TOLL OPPONENTS

TONY Blair is to send an e-mail to the million-plus people who signed an online petition against road pricing, telling them it is “surely part of the answer”.

Mr Blair admitted he did not expect to win over critics of road pricing immediately, but said that the petition - on the 10 Downing Street website - had provoked a useful debate.

The strength of feeling against road charging plans reached such levels that, at one point, it crashed the PM’s internet site. The petition calls the policy “sinister and wrong” and warns the charge would be unfair to those living away from their families and poorer people.

Douglas Alexander, the Transport Secretary, has accused its organisers of spreading “myths” and pledged to press ahead with plans to pilot the scheme.

Peter Roberts, 46, an account manager from Telford who started the petition, said he was “staggered” by the response and called for a meeting with government officials.

The petition appears on a section of Downing Street’s website designed to allow anyone to address and deliver a petition directly to Mr Blair.

Related topics

- http://news.scotsman.com/topics.cfm?tid=477
http://news.scotsman.com/topics.cfm?tid=477
- http://news.scotsman.com/topics.cfm?tid=235
http://news.scotsman.com/topics.cfm?tid=235
- http://news.scotsman.com/topics.cfm?tid=974
http://news.scotsman.com/topics.cfm?tid=974

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Treasury Yields Move Higher

February 28th, 2007 by admin

If you’ve been in the investing world for a while, you’ve probably heard about — and dabbled with — writing covered call options on stocks.

When you write a covered call against a stock you own, you sell the right to purchase your shares for a specified strike price at or before a specified future date. You collect a premium — the price of the option — for giving up this right.

And why? The main reason is to generate some current income. Those returns can be juicy — 2% to 3% per month or more when things work out just right.

My point here isn’t to give a full course on covered call writing; there are plenty of resources out there.

Instead, here’s my issue. Covered call writing on individual stocks can be tricky. Getting good returns means using more volatile stocks, since option premiums are tied to volatility.

This is where a lot of investors run into trouble. Moreover, most of us just don’t have the time or bandwidth, or don’t want to put much risk capital into play this way. That’s where covered call funds come in.

Covered call writing can be one of those areas where professional help and diversification make a lot of sense. Yet, somewhat to my surprise, only a few funds specialize in covered call strategies, and most toil in relative obscurity to the individual investor. So I want to help show the way.

Before going further, here’s the main drawing card: Most of these funds pay a steady 8%-10% return, usually as a quarterly dividend. In today’s environment of 4.5% money market yields and 5%-6% bond returns, that’s not bad.

Most covered call funds are so-called closed-end funds, which sell a fixed number of shares that trade on an open market.

http://www.thestreet.com/video/personalfinance/10341478.html for the video version of this story from Jennifer Openshaw.

For this strategy, closed-end funds work best, because the fund manager can fully deploy assets and not worry about redemptions. And investors don’t have to worry about sales charges, though they might pay a small premium to the fund’s net asset value.

Here’s a look at some of the choices:

- Index covered call closed-end funds

Funds sell covered calls not against stocks but against the S&P 500 index. The result is good income with downside risk matching overall market risk. The S&P 500 Covered Call Fund (BEP) is the largest player.

- Stock covered call closed-end funds

These funds sell calls against individual securities owned in the portfolio. These securities can cover the market or target specific sectors, and some blend in international stocks. The portfolio percentage put into play with covered calls may vary as well. These pay somewhat more than index covered call funds.

The biggest players include Madison Claymore Covered Call Fund (MCN) , First Trust Fiduciary Asset Management Covered Call Fund (FFA) and the ING Global Equity and Premium Opportunity Fund (IGD) , which adds an international flavor.

- Open-ended funds

As ordinary mutual funds, in the face of competition, seek higher returns, covered call writing is coming back into vogue. Last summer’s launch of the Van Kampen Equity Premium Income Fund (VEPAX) may be one of the purer plays in this space, but the 5.75% upfront load gives me pause.

I believe closed-end funds are worth a look, especially for a portion of a well-diversified portfolio. During my research, I was particularly drawn to the Madison Claymore Covered Call Fund, which offered by far the most consumer-friendly online information and a very helpful toll-free information line.

As I investigated Madison Claymore, it dawned on me that if funds aren’t quite your thing, you could even play a little “follow the leader” and mimic some of their strategies and holdings.

Madison Claymore gives an up-to-date list of its top 10 holdings. You could buy Biogen Idec (BIIB) for $49.50 and write a month-out covered $50 call for $1.65 — an implied 4% monthly return — or do a similar move for Best Buy (BBY) or eBay (EBAY) . You’d take on the risk of owning the individual stock, but at least you’d have the comfort of knowing the pros are doing something similar.

However you decide to approach it, enhancing current portfolio income with covered calls is a relatively low-risk strategy if done carefully. Covered call funds are a good way to get started.

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