Outside Reversal

This week I've learned that without indicators I can perform better in my trades. Anyone heard about Outside Reversal technique. It's way better than RSI, stoch, MA or other indicators.

Outside Reversal occured when the price puts in lower low and close above the previous day's close (same for higher high and then a lower low close below previous day's close.

Five Banks Bid for AIG Assets

Another batch of the riskiest mortgage-backed securities once owned by the American International Group are being auctioned off this week, according to two people familiar with the matter, a sale that would bring the insurance giant’s 2008 meltdown once step closer to a resolution.

The Federal Reserve Bank of New York took control of the assets after A.I.G. was bailed out in 2008. They are being auctioned to a group of bidders that includes Credit Suisse[CS  27.35    -0.12  (-0.44%)   ], Barclays Capital, Morgan Stanley [MS  20.26    -0.25 (-1.22%)   ], Goldman Sachs [GS  115.98    -1.41 (-1.2%)   ] and Royal Bank of Scotland [RBS-LN 29.36    0.48  (+1.66%)   ], according to the people, who spoke on the condition of anonymity because the auction is private. Bids are due on Wednesday, and a winner will likely be identified by Friday, the people said.

A New York Fed spokesman declined to comment. BlackRock, the asset manager whose BlackRock Solutions unit is leading the sale, also declined to comment.

The auction will be the second major sale of the year of assets held by the New York Fed in a vehicle known as Maiden Lane II, which absorbed A.I.G.’s soured residential mortgage-backed securities after the 2008 bailout. Last month, Credit Suisse won an auction for bonds from the vehicle with a face value of around $7 billion, which it promptly sold to clients including hedge funds and other banks.

The success of that auction led to another bid by one of the five firms for more Maiden Lane II assets, and signaled that the market for residential mortgage-backed securities, the bête noires of the financial crisis, has improved since last year. The New York Fed conducted a sale of some of the Maiden Lane II bonds last June, but had to halt the sale when it created turmoil in the bond market.

The bonds being sold in this auction have a face value of roughly $6 billion, about half the amount remaining in Maiden Lane II, according to the people. The auction was earlier reported by The Wall Street Journal.

Greek Premier Seeks Bailout Consensus Amid Political Quarrels

Greek Prime Minister Lucas Papademos is set to negotiate with leaders of the political parties supporting his caretaker government after Athens missed another deadline to secure a second aid package.

Papademos will see the chiefs in Athens today after delaying the meeting for a second time in as many days while Greek officials and international creditors haggle over the terms. Late last night, he held an unscheduled meeting with the so-called troika, comprising the European Commission, the European Central Bank and theInternational Monetary Fund, to put the final touches on terms required for a 130 billion-euro ($172 billion) rescue package.

Yesterday’s delay was yet another hitch in completing a package that’s been on the table since July. The government is struggling to arrange financing to avert a collapse of the economy, risking a new round of contagion in the euro area. With the country facing a 14.5 billion-euro bond payment on March 20, German Chancellor Angela Merkel warned this week that “time is running out” to reach an accord.

The tussling in Athens threatens to hold up a critical element of the second financing package: a debt swap that will slice 100 billion euros off more than 200 billion euros of privately-held debt. The rescue blueprint includes a loss of more than 70 percent for bondholders in the voluntary debt exchange as well as loans that will probably exceed the 130 billion euros now on the table.

Greek Bonds

The ECB is prepared to swap its holdings of Greek government bondsto contribute to a reduction of the country’s debt burden, Dow Jones reported yesterday, citing unidentified people briefed on the talks. The agreement could reduce Greece’s debt by as much as 11 billion euros, Dow Jones said.

A formal offer for the debt swap must be made by Feb. 13 to allow all procedures to be completed before the March 20 bond comes due. Parliament may be called to vote on the terms of the writedown on Feb. 12, state-runs Athens News Agency reported yesterday, without saying how it got the information.

The euro touched an eight-week high against the dollar today, reaching $1.3287. European stocks advanced, with the Stoxx Europe 600 Index up 0.3 percent after two days of losses. U.S. index futures and Asian shares also rose.

‘Constructive’ Negotiations

Papademos met last night for “constructive” talks with Charles Dallara, managing director of the International Institute of Finance, which has negotiated the terms of the swap, and Deutsche Bank AG ChairmanJosef Ackermann, according to an IIF statement.

Creditors are prepared to accept an average coupon of as low as 3.6 percent on new 30-year bonds in the exchange, said a person familiar with the talks, who declined to be identified because a final deal hasn’t been struck yet.

While the prime minister and party chiefs have agreed to make further cuts this year equal to 1.5 percent of gross domestic product, they have yet to close gaps over measures demanded by creditors for the rescue. Unions, which struck yesterday, have derided the conditions as “blackmail.”

“There is a path here for Greece, there is a way out for Greece, if it wants to take it but there’s no denying this will be tough,” Grant Lewis, an economist at Daiwa Capital Europe Ltd. inLondon, said in a radio interview with Bloomberg’s Ken Prewitt yesterday. “You are talking about multi-year austerity packages against a backdrop of an economy that’s shrinking very rapidly.”

Final Draft

A Greek official said yesterday the government and international creditors were close to a final draft of an agreement on budget and structural measures needed to extend the financial lifeline. Another official said earlier yesterday talks were focused on how to make up for a 550 million-euro shortfall in new austerity measures for this year.

At stake is whether Greece wins the bailout, secures a debt write-off with private creditors and remains in the euro region. Failure and the country’s bankruptcy, means even greater sacrifice, Finance Minister Evangelos Venizelos has warned.

With elections due as early as April, Greek political leaders are arguing over demands such as ensuring the viability of pension funds and reducing wage- and non-wage costs to boost competitiveness.

Second Bailout

Efforts to win a second bailout from the troika have hung in the balance over the past five days as lenders demand officials sign up to measures ranging from a cut in the minimum wage, lower pensions and immediate layoffs for as many as 15,000 state employees.

Merkel said the impact of a Greek exit from the euro would be “incalculable,” and restated her determination to keep Greece in the single currency region.

“I don’t want Greece to leave the euro and therefore the question doesn’t arise,” Merkel said. “I won’t take part in any effort to push Greece out of the euro. It would have incalculable consequences.”

Even so, Merkel said that there is “no way around” Greece carrying out reforms. Greece is in a “very complicated situation”, she said.

Greek Recession

The troika argues that lower wage costs and pension cuts are among reforms necessary to boost competitiveness in the country. Those opposed say the cuts would deepen the country’s recession, now in its fifth year.

Antonis Samaras, the head of the second-biggest party, New Democracy, has indicated he will oppose measures that will deepen the country’s downturn. George Karatzaferis, the head ofLaos, one of the three supporting Papademos, said he would seek assurances that the measures would lead the country out of the crisis.

Guarantees from Greek leaders such as Samaras, who is ahead in opinion polls, are key to securing the funds. International lenders want assurances that whoever wins the next election will stick to pledges made now to receive financing.

Samaras’s party has 31 percent support from voters, according to a Public Issue poll, compared with 8 percent for the socialist Pasok party, which is the biggest party in the current parliament. The survey of 1,002 Greeks showed a growing number of Greeks wanting elections immediately and waning support both for Papademos and the parties that back him.

Nissan Quarterly Profit Up on Brisk Sales, Keeps Forecasts

Nissan Motor posted a 3.6 percent rise in quarterly operating profit on Wednesday on the back of brisk car sales worldwide and kept its full-year forecasts unchanged at the highest level among Japan's top automakers.

Japan's No.2 automaker earned an operating profit of 118.1 billion yen ($1.54 billion) in the October-December quarter, slightly below the average estimate of 122.6 billion yen from 10 analysts polled by Reuters.

Nissan reports under Japanese accounting standards, with earnings from China included in operating income. Net profit rose 3.2 percent to 82.67 billion yen.

Among Japan's three leading automakers, Nissan was fastest to recover from both the earthquake last March and flooding in Thailand that disrupted supply chains, swiftly sourcing parts from its global network. The popularity of new models such as the Rogue and Juke crossovers also helped.

For the year to March 31, Nissan kept its operating profit forecast at 510 billion yen, below the consensus forecast of 547 billion yen in a poll of 25 analysts by Thomson Reuters I/B/E/S. It kept its net profit forecast at 290 billion yen.

Japanese market leader Toyota [TM  79.61    1.90  (+2.44%)   ] has forecast annual net profit of 200 billion yen and third-ranked Honda Motor [HMC  36.14   0.28  (+0.78%)   ] has predicted profit of 215 billion yen.

Both report under U.S. accounting rules, with earnings from China included in net income.

Nokia to Cut 4,000 Jobs, Shift Phone Production to Asia

Nokia Oyj, the world’s largest maker of mobile phones, will cut about 4,000 jobs in its factories in Hungary, Mexico and Finland to speed up the delivery of devices and get closer to suppliers.

Device assembly is expected to be transferred to factories in Asia, where the majority of component suppliers are based, Nokia said in a statement. The Salo, Finland plant, established in 1979, makes smartphones for European markets.

Chief Executive Officer Stephen Elop unveiled his strategy for the company a year ago this week with the announcement Nokia would manufacture handsets running Microsoft Corp.’s Windows Phone software. The Salo plant was spared from the first rounds of job cuts and outsourcing deals, which hit engineers working on Nokia Symbian smartphone software that was being ramped down in favor of Windows Phone.

The company’s smartphone sales declined 25 percent to 77.3 million units last year as customers shunned the Symbian line. Nokia, based in Espoo, Finland, introduced its Lumia handsets running Windows Phone six weeks before the end of the year and said on Jan. 26 that it had sold “well over 1 million” of the devices “to date.”

Nokia also makes smartphones in Beijing and South Korea, and said Dec. 1 it will start making the Lumia 710 at its plant in Manaus, Brazil. The first shipments of Lumia handsets were made at a Compal Communications Inc. (8078) factory in Taiwan.

Nokia has nine handset factories including one under construction in Hanoi, according to its website. Last month it sold a shuttered Romanian plant to De’Longhi SpA, an Italian maker of kitchen equipment, saying the low end phones made at the plant were better produced closer to suppliers and large markets.

The Salo factory, as well as the plants in Komarom, Hungary and Reynosa, Mexico, were placed under review and could be shifted from assembly and packaging, Nokia said Sept. 29.

Yuan: US Sees Some Yuan Flexibility, Wants More - CNBC

China is starting to let its yuan currency rise more rapidly to curb inflation but needs to move even more swiftly toward a market-driven exchange rate, U.S. Treasury Secretary Timothy Geithner said on Tuesday.

Speaking ahead of top-level talks with Chinese officials in Washington next week, Geithner also said Beijing should stop favoring its giant state-owned enterprises by keeping their borrowing costs low and warned it may face a protectionist backlash if it does not do so.

Geithner and Secretary of State Hillary Clinton co-chair two days of talks next Monday and Tuesday with China's Vice Premier Wang Qishan and State Councilor Dai Bingguo.

The once-a-year Strategic and Economic Dialogue covers various economic and diplomatic issues but currency tensions are always on the agenda. U.S. manufacturers complain China's managed yuan gives its producers an unfair trade advantage.

Geithner said the yuan [CNY= 6.4955 -0.001 (-0.02%) ] has risen about five percent against the dollar since last June when Beijing loosened a peg on its value and suggested that China's knowledge that it must let it rise more to fight inflation was to U.S. advantage.

"Fundamental forces are now operating in an overwhelming direction of encouraging China to to let the exchange rate move more rapidly in response to market forces," he told the U.S.-China Business Council. "If they don't do there is greater risk that inflation accelerates."

Inflation Spur

In the past, Beijing has resisted U.S. pressure on the yuan, arguing that too fast a rise in its currency could upset economic stability. Geithner suggested China needs to reassess that policy.

"There are risks in gradualism, not just risks in moving, and China has to figure out how to balance those risks," he said.

China's central bank guided the yuan up by 0.9 percent against the dollar in April compared with 0.4 percent in March, accelerating its appreciation as the dollar fell to three-year lows against a basket of currencies.

The U.S. Treasury was scheduled to issue a semi-annual report on April 15 on the currency practices of U.S. trade partners that, in theory, could have labeled China a foreign exchange manipulator.

It has been delayed indefinitely and it is likely the Obama administration will opt for continued verbal persuasion but avoid harsher actions such as saying that China deliberately keeps the yuan undervalued to gain a trade edge.

"Our judgment is that it would be better for the world, more fair for us and I think in China's interest to let the exchange rate appreciate more rapidly than they've been doing," Geithner said. "Hopefully they'll make that same judgment and feel more confident now as they see inflation accelerating."

Geithner took aim at China's practice of fostering so-called "national champions" among its industrial sector — essentially state-owned companies that compete globally.

By controlling bank deposit and loan rates, China effectively channels low-cost loans to state-owned enterprises, known as SOEs, and gives them an advantage over both domestic and private firms.

"The financial distortions that give preferential advantages to SOEs add to trade tension and to calls for protection among China's trade partners," Geithner said.

U.S. Undersecretary of State Robert Hormats also blasted China for pumping up the ability of state-owned companies to a receptive audience at the U.S. Chamber of Commerce, a frequent critic of Chinese currency and trade practices.

He said 41 Chinese state-owned enterprises made the 2010 list of the 500 biggest companies in the world, and three made the top 100.

"It's imperative that our companies have a level playing field on which to compete, not just in China but around the world," Hormats said. He added the United States would press in both bilateral and multilateral forums for rules establishing a "competitively neutral environment" for state-owned enterprises in China.

Bin Laden Compound Likely to Reveal Al Qaeda Contributors - CNBC

Computers taken from Osama Bin Laden's Pakistan compound could reveal a motherlode of information on Al Qaeda donors and has probably already dealt a serious blow to Al Qaeda fund raising, according to a Middle East law expert.

George State University College of Law professor Jack Williams said new data, potentially in hard drives and other materials taken by the U.S. special forces, could reveal a new list of Al Qaeda contributors. Williams also works for Mesirow Financial as a senior managing director and company practice leader in investigative services.

"In many prior situations, where we have captured and/or captured and killed a high level target, particularly those who have been in place for a little while, we found computers with that type of information, and we've been able to glean a lot about the financial structure, flow of funds an the mechanisms by which Al Qaeda and groups raised funds to finance their activity," he said.

Williams said there have been at least four jihadi fatwas issued since the death of Bin Laden. While none were major, one was a fund raising plea. Fatwas are religious decrees issued by a cleric.

"I think there are going to be some companies that are concerned, not necessarily with their names showing up but with the names of their agents or vendors, suppliers or customers, on that Al Qaeda list," said Williams.

"The folks whose names are in those computers as substantial contributors to Al Qaeda causes — they nonetheless will pull back into the shadows to at least assure they don't cause any new undo attention that might be drawn to them. It will have an affect on their donor rate," said Williams.

Williams said Bin Laden was not the biggest contributor but his image was an important selling point, used around the world in places where Al Qaeda is active. "He was certainly the image around which the Al Qaeda mother ship surrounded itself. He was in a fund raising capacity both an emissary and an image," he said.

Whether pictures of Bin Laden, after he was killed, would be useful to Al Qaeda is unclear, but Williams expects the U.S. government to ultimately release them. The question authorities are grappling with is "will disclosing these pictures put more American lives at risk."