Ichimoku Analysis

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Introduction to Ichimoku

Since Ichimoku has recently caught a lot of attention in the Trader’s circle, I thought I’ll take some time to explain everyone about Ichimoku.

Few important points:
Please note in advance that some of the concepts and interpretations you find here on this page will be quite unique and might contradict with the usual Ichimoku concepts you have learned on the other web sites or read in the books.

I’ve a couple of reasons to look at Ichimoku differently, first that no system in world is perfect and we should try improving it by keeping the innovation alive. Secondly, I’ve been privileged to have worked with some of the most advanced Ichimoku experts who happen to be Japanese themselves. All these factors have encouraged me to think out of the box.

So please bear with me if you find some of the concepts defined below as different and / or unique and try giving it a chance.

Bit of History:
The Ichimoku Cloud was originally called the ‘Ichimoku Kinko Hyo.’ Where Ichimoku means ‘one glance, ‘Kinko ‘balance’ and Hyo ‘chart.’ Thus the full translation could best be described as ‘one glance balanced chart.’ Originally developed by Goichi Hosada pre WWII, a newspaper journalist (published in 1969) who wanted to develop an Uber-indicator that could provide the trader with various levels of support/resistance, entry/exit points, direction of the trend, and strength of the signal.

Ichimoku Components:
Essentially made up of SIX major components, the Ichimoku offers a rich view of whats happening in the market. Following are the key components:

1. The Tenkan Sen: (“Conversion Line”): is a nine-period moving average

2. The Kijun Sen: (“Base Line”): is a twenty six-period moving average

Now let’s take a look at the most important component, the Ichimoku “cloud”, which represents current and historical price action. It behaves in much the same way as simple support and resistance by creating formative barriers. The last two components of the Ichimoku application are:

3. Senkou Span A: The sum of the Tenkan Sen and the Kijun Sen divided by two. The calculation is then plotted 26 time periods ahead of the current price action.

4. Senkou Span B: The sum of the highest high and the lowest low divided by two. This calculation is taken over the past 44 time periods and is plotted 22 periods ahead.

Now the most important two components of Ichimoku:
5. Kumo cloud: The cloud is formed by using the Senkou Span A and Senkou Span B. Kumo offers a number of interesting features, such as:

5.1. Support/resistance levels: Firstly, if today’s candle is above the Cloud, the trend is for higher prices. The top of the Cloud is the first level of support and the bottom is the second level of support. From experience, I have seen that these really do often work, but one has to give them a little leeway. Normally, I would also wait until the end of the day to see whether the closing price is below the Cloud, before even beginning to consider whether the trend has reversed. The opposite is the case when candles are below the Cloud, with this becoming the area of resistance. Very often the market seems to move through the first support/resistance level and fails somewhere in the middle of the Cloud. When this happens we watch the shape of the daily candlesticks to see if they give a reversal signal.

5.2. Cloud thickness: The thickness of the Cloud is important. The thicker the Cloud, the less likely it is that prices will manage a sustained break through it. The thinner the Cloud, and a break through has a much better chance. So, Cloud is Cloud regardless of whether Span A or Span B is on top; the thickness is what matters.

5.3. Crossover points: Many experts believe that this has no significance, my experience tells me that its the other way around. The Kumo (borders) crossover shows the Major Shift in Trends.

5.4. Trend reversals: Thin sections in the Cloud give us an idea of when the market is likely to change trend. Look ahead and see when, and at what price, it gets very thin. Similarly, if the Cloud is getting fatter and fatter, the chance of a reversal in trend lessens looking out into the future. It gives dates (I’d say three or four days around the central

6. Chikou Span: If you visit Youtube and search for Ichimoku, you will find a Video explaining how this system works. Good explanation in my opinion, however one major problem there. The guy explains all the above components and tells you that he has not drawn Chikou Span on this chart since its of no value at all. Its actually quite contradictory as this particular happens to be one of the most important element as it (in combination with Kumo cloud) basically helps us to determine the strenght of signals. Here is what it does:

Chikou Span is used in combination with today’s candlestick:

• • if Chikou Span is trading above the candlestick of 26 days ago, then today’s market is said to be in a bullish long term phase; conversely,
• • if Chikou Span is trading below the candlestick of 26 days ago, then today’s market is in a long term bearish phase.
• • Same idea for Chikou Span itself and the Clouds: above the Cloud of 26 days ago, then today is bullish – and vice versa.

Few rigid ideas:
If you do some homework and join some of the active forums on web, you will find few rigid ideas / concepts people have formed, I tend to disagree (based on personal experiences) with the following in particular:

1. Ichimoku can only work on Daily Charts: Lets put it this way, Ichimoku doesn’t know itself whether the Parameters you’ve provided are daily numbers or a shorter timeframe. Since the price moves in waves and follow certain patterns there is no reason why Ichimoku cant help you in shorter timeframes

2. 9/26/52 are the only settings that work with Ichimoku: Of course not  don’t take my word, but try starting with the Default settings first and then try different combinations based on the Timeframe of your choice. You’ll find that one combination will work as the best in one timeframe while not so great in the other. So my personal advise is to try out as many settings and timeframes as possible

3. Ichimoku does not work on Forex: In combination with the above points, people also claim that the Ichimoku does not work well in the Forex market as it was originally designed for Japanese market which works 26 days in a month unlike the forex market which works on a 24 hours model. I would say that it works as great on forex as it works on any other market, the reason is that it actually works on Price and not on the market itself. Any financial product which follows the price movement could be used with Ichimoku (just like any other indicator)

4. Ichimoku works well during the Trending market. Quite contradictory to the basic idea behind Ichimoku and especially its Kumo cloud, it actually helps you to detect the Trends and their strengths

5. Ichimoku should not be combined with other Indicators. OK, and why is that ?  Over the years, I’ve combined Ichimoku with several other indicators and have always found that it only adds a bit of extra help. So try it with other indicators and see what suits you most.

What Next:
Guys, the idea behind starting this thread is to get each other’s feedback on this great tool. Unlike other Ichimoku forums, I’ll welcome all the new ideas and innovations and I’m sure we’ll learn a lot from each other.

PS: I’ll be posting live trading charts in the past explaining the current trades … so just hang in around …

Look forward to hear more …

Forex: Euro losing support against Greenback

EUR/USD – We at Stock360 remain very bearish on the pair and view the latest rally as merely corrective in nature, with the market attempting to seek out a fresh lower top below 1.4175 ahead of the next drop back through 1.3750 and towards our measured move head & shoulders objective by 1.3250 over the coming weeks.

There is a solid confluence in the 1.4010-1.4040 area, with falling trend-line support off of the 2009 highs, the 61.8% fibonacci retrace off of the 1.4175-1.3750 move and the 50% fibonacci retrace off of the 1.4340-1.3750 move all converging in this area.  As such, we view any rallies above 1.4000 as formidable sell opportunities and should be used to build on any existing short positions.

Ultimately only back above 1.4175 gives reason for concern.

Strategy: SIDELINED FOR NOW; PLAN TO SELL

News: Assets freez of Landsbanki lifted

It has now been confirmed that the freezing of the assets of Landsbanki in London is to be lifted on Monday June 15th. This is in the announcement on the website of the English FSA. There says that the freezing is lifted because of the Icesave so-called Icesave contract which the Icelandic government made with the English and Dutch governments.

In the announcement also says that following the successful result after the discussions with the Icelandic government and the plans of the Icelandic government to respect their duties towards the English balance owners is the freezing to be lifted on June 15th. A suggestion regarding that has been set for the English parliament on June 10th and was approved.

It also says that all of the funds of Landsbanki are now  open.

Forex: USD gains support against AUD, NZD and CHF

AUD/USD – Gains appear to be stalling out shy of the 2009 highs by 0.8265, and by the 78.6% fib retrace off of the 0.8265-0.7825 move, with a lower top sought out at 0.8240 ahead of a fresh drop back below 0.7825 over the coming days. A potential 1-2-3 topping pattern or double top scenario could be playing out as well, with a break below 0.8060 to accelerate declines back towards the neckline at 0.7825, below which opens a more significant depreciation back towards 0.7400 over the coming weeks.

Strategy: PLAN TO SELL AUD

NZD/USD – The market appears to have carved out an interim top by 0.6600 with the latest rebound out from 0.6155 classed as corrective. These gains have now stalled out by the 61.8% fib retrace off of the 0.6600-0.6155 move and a lower top is now sought out by 0.6470 ahead of the next downside extension to be confirmed on a break back below 0.6155. Ultimately, only a break back above 0.6600 negates bearish outlook.

Strategy: PLAN TO SELL NZD

USD/CHF – Setbacks have stalled out by 1.0700, which also coincides with previous resistance now turned support, and a fresh higher low is now sought out, to be confirmed on a break back above 1.0990 over the coming sessions. The formation on the 8-hourly chart has taken the shape of a potential inverse head & shoulders pattern that ultimately projects upside back towards the 1.1400 area over the coming weeks. Only back under 1.0650 delays.

Strategy: PLAN TO BUY USD

 

Forex: GBPUSD Cable losing support against Greenback

The latest rallies above 1.6600 are not seen sustainable and a double top scenario could play out on the daily chart with a break below neckline support at 1.5800 to open a measured move objective back to the 1.5000 area over the coming weeks. The bearish reversal day on Friday helps to confirm our negative outlook and hopes for a major double top. Only back above 1.6665 concerns.

Strategy: SIDELINED FOR NOW; PLAN TO SELL GBP

Forex: EURUSD time for Greeback gains

The latest rebound has stalled out by the 61.8% fib retracement off of the 1.4340-1.3805 move and former support turned resistance in the 1.4100 area, and a fresh lower top could now be in place ahead of the next drop through 1.3800. A closer look at an 8-hourly chart, shows the formation of a major head & shoulders top, that if triggered, would ultimately project a more significant decline back towards a measured move objective by 1.3250 over the coming weeks. Only back above Wednesday’s high at 1.4145 delays.

Strategy: SIDELINED FOR NOW; PLAN TO SELL EURO  

Market Watch: Caution advised

Even the optimists are showing some caution.

The Dow Jones industrial average tacked on a modest 32 points Thursday after being up as much as 139 points earlier.

The Dow rose 31.90, or 0.4 per cent, to 8,770.92. The S&P 500 rose 5.74, or 0.6 per cent, to 944.89, while the Nasdaq Composite index rose 9.29, or 0.5 per cent, to 1,862.37.

Investors welcomed a drop in jobless claims, growth in retail sales and better-than-expected demand at a government debt auction. But traders also seemed mindful of how far the market has come in its three-month rally.

The stock market has at times run low on fresh evidence of economic recovery that could push the rally further. The data out on Thursday helped but weren’t enough to keep the pace of buying strong.

The Labor Department reported that the number of newly laid-off Americans filing for jobless benefits fell last week by 24,000 to 601,000, better than the forecast of economists polled by Thomson Reuters. However the number of unemployed continuing to file for claims rose to 6.8 million, the highest on records dating to 1967.

Meanwhile the Commerce Department said retail sales rose 0.5 per cent in May, ending two months of declines and marking the largest increase since January. Investors watch those numbers clos.spxely since consumer spending accounts for more than two-thirds of economic activity.

Stocks rose to their highest levels in afternoon trading when the Treasury Department said an auction for 30-year Treasury bonds attracted strong demand. That allowed investors to set aside some of their recent worries about higher interest rates. Stocks lost ground Wednesday following a relatively weak auction for 10-year notes.

Forex: High NZ Dollar hurting Exporters

The latest ANZ Commodities prices index shows the recent strength of the New Zealand dollar means our exporters have been unable to enjoy a 6.5 per cent increase in world commodity prices during May.

 

 

It is the third month in a row world commodity prices have increased, but when converted into New Zealand dollars, prices are down 1.5 per cent.

The price of wool recorded the largest increase in May, lifting 9.1 per cent from the month before.

But this rise comes as wool prices rebound from a 23-year low in the series last month. Beef prices recorded the next largest increase, lifting 6.1 per cent in the month.

Market Watch: Australian share market hits 7 month high

Banking and insurance stocks have led the Australian market to its third straight day of gains.

The finance sector index climbed 1 per cent, while retail and media stocks were the drag on higher gains with a 1 per cent fall.

The All Ordinaries finished 0.4 per cent higher at 4,062, and the ASX 200 was up by the same amount.

CBA raises rates

The financial stock dominating the news was the Commonwealth Bank, after it surprised analysts and its customers by putting its variable mortgage rates up by 0.1 of a percentage point – the bank’s first rate rise in almost a year.

The Prime Minister and Treasurer both slammed the move as a profit gouge, and banking analysts said it was an attempt to counter slim interest margins and increasing bad debts.

But the market did not seem to mind, with CBA shares climbing 1 per cent to close at $37.80.

Market news

 

While the mining sector was generally flat, Oz Minerals surged more than 17 per cent higher when its shares resumed trade today, after yesterday’s better than expected $1.7 billion Minmetals deal.

Although the $1.05 close is still a long way from the company’s share price highs of just under $2.00 in the midst of the mining boom, when it had just formed from Oxiana and Zinifex.

However, investors were surprisingly unimpressed with news that CSL is likely to be the first company to produce a commercial swine flu vaccine.

It already has contracts in place with the Australian and US Governments to supply swine flu related products – contracts which are expected to be worth about $300 million next financial year – but the company’s shares finished 0.3 per cent lower.

World markets

It was a mixed day on the region’s major share markets.

• Japan’s Nikkei had a strong day, finishing 1.5 per cent higher at 10,136 – the first time that it has closed above 10,000 since October last year
• Hong Kong’s Hang Seng was 0.5 per cent up at 18,890
• But the Shanghai composite index closed almost 2 per cent lower at 2,744 despite further signs that Chinese industrial output is recovering
• Singapore’s market was also 0.3 per cent down

European markets are mixed in very early trade and the US Dow Jones futures index is flat.

West Texas crude oil was worth US$72.10 a barrel at 6:20pm (AEST), and Tapis is higher at US$73.75.

Spot gold is quite steady at just under US$952.26 an ounce.

The Australian dollar has continued trading in a range between 81 and 82 US cents today.

At 6:23pm it was fetching:

• 81.41 US cents
• 79.75 Japanese yen
• 57.85 euro cents
• 49.31 British pence
• 1.2689 New Zealand dollars

Market Watch: Jump in Swiss Exports, a Signal for Recession Bottoming

The Swiss trade surplus widened to 2.6 billion Swiss franc from 161 million francs in March. Exports rising 8.3% which was the highest since April 2006 and a 0.3% decline in imports led to the increase.

The rise in demand for Swiss goods is a positive sign for the Swiss and global economy. The export driven country had been crippled by the drop in global demand. Therefore, the pick up in demand demonstrates that we may be seeing a bottoming in the global recession which could signal that demand may be sustainable.

On a similar note the German unemployment unexpectedly improved to 8.2% from 8.3% as the economy only lost 1,000 jobs. Economist had been calling for a loss of 64,000 in the month of May.

Commodities: Oil’s recent rally

During a recent discussion with a friend, I emphasised that people often make it too complicated for them when they start doing Technical Analysis. This is one particular example where a simple strategy such as crossover of two moving averages (Exponential in this case) can give you amazing profits.

If you recall Stock360 had identified this bullish trend of Oil somewhere in March when the 20EMA crossed over 50EMA, one of the most simplest and perhaps the oldest Technical Analysis method. Oil has touched its 6 months high of 62.26 recently and our profit margin has been around 38% since we entered.

However, what you also need to learn is a good Exit Strategy as quite often people reach to the same price levels if they wait for the reverse crossover such as EMA50 crossing over EMA20 and they lose a big chunk of profit.

Forex: Aussie Dollar / US Dollar, potential reversal

Despite the new high in the AUDUSD, nothing has changed regarding the long term bearish implications (5 wave decline from 2008 high indicates additional bearish potential and the corrective rally from .6000 confirms as much).

 

Near term, RSI divergence along with a mature wave structure at multiple degrees of trend (3 waves up from .6000, 5 waves up from .6245 and 5 waves up from .6950) suggests that a turn is imminent.

Forex: Euro / USD updates

The current EURUSD rally has become stretched and due for at least a pullback and maybe, just maybe, a reversal. Wave structure favors a reversal sooner rather than later.

 

 

The fractal nature of freely traded markets is on full display. That is, the form of the declines from 1.6000 and 1.4723 and their subsequent rallies are the same. The rally from 1.2886 is in 5 waves and wave 5 has hit and slightly exceeded the 1-3 line today. Evidence favors a turn. Of course, until there is evidence of one, going short is akin to playing Russian roulette. A drop beneath 1.3900 would signal a reversal opportunity.

Market Watch: Sensex climbs 17% in a day

India’s stock exchange closed down for the day Monday after the benchmark index surged 17% following the election victory of the ruling Congress party.

 

The result, which saw the Congress-led United Progressive Alliance win 261 of the 543 seats in India’s parliament, gives the ruling party a clearer mandate to open the economy up to greater foreign investment. The bloc led by Congress’s closet rival, the nationalist BJP Party, won 159 seats.

The Sensex index climbed 1,306 points, to 14,272.

Stocks such as the diversified manufacturing group Reliance Industries and ICICI Bank were among the top performers. India-related stocks listed on the London Stock Exchange also climbed, with copper miner Vedanta and the real estate investment company Hirco posting big gains.
Congress is still short of an overall majority, but is in a much stronger position than over the past five years when it led a shaky coalition. The election dealt a blow to leftist parties, with the ruling communist party swept from power by an alliance between the Trinamul Congress and Congress.

News: Indian Election results a bullish signal for Sensex

There is reason for rejoice as industry experts are unanimous in their opinion that a stable and growth-oriented government at the Centre  promises a lot of development and stability in the country. Hailing the thumping victory by Congress-led UPA, industry chamber Ficci said that it was a step in the right direction to put India on a growth trajectory.

“After two decades, we have Congress-led government at the Centre as well as in the state. Congress as has been seen in the past is almost synonymous with progress but this time around the government can be more aggressive sans the detractors. With Dr Manmohan Singh’s image that commands respect spearheading the government, we can now expect that the Congress-led government in Rajasthan also will be able to bring about a lot of industrial development to the state,” said B K Subbaiah, COO, Mahindra World City.

Considering that the 8.5% average economic growth during the UPA regime took India to the being the second fastest expanding economy after China that was far more that the 6% GDP during the NDA tenure of 1998-2004 brings more hope in the recession-hit economy. Keeping that in mind industry experts anticipate that now many long-standing policies that may have been delayed due to the Left opposition may get a fresh lease of life with FDI in insurance and retail gaining momentum.

News: Norway economy set to contract

Norway’s economy is set to shrink by 1.9% this year but more state spending will help to stimulate growth, the country’s government has said. Norway’s oil wealth will allow the government to implement the country’s most expansive national budget in 30 years, it explained. The country is a major exporter of oil and has used oil revenues to protect itself against the global downturn.

Other European countries have forecast much bigger economic contractions.

“We have acted quickly and strongly,” said finance minister Kristin Halvorsen.

Despite the increase in spending, the government still expects to have a surplus of 237bn kroner ($36bn; £24bn) this year. This money will go into the country’s Government Pension Fund, the world’s second-largest sovereign wealth fund.

Market Watch: FTSE Rally crosses 1000 points

The FTSE 100 took its rally to more than 1,000 points, or 30%, this week, a feat achieved in a little under two months. Who’d have thought we’re in the middle of a recession?

The blue chip index traded above 4,500 for the first time since early January and remains within reasonable striking distance of a seven-month high. It hit 4,675 on 6 January, but its previous best was 4,745 in early October.

It’s certainly a far cry from the five-year low of 3,460 recorded on 9 March. Back then, many traders feared a test of 2003 lows at 3,287. Instead, buyers have flooded back, largely due to resurgent banks and miners.

The bank sector has rallied 40% in the last month alone, while mining has added an impressive 29%. Barclays is up an incredible 175% over three months, Royal Bank of Scotland 87% and HSBC 20%, although the “world’s local bank” has almost doubled since the start of March.

Among the miners, Kazakhmys has surged 148% since the beginning of February, Xstrata by 55% and Rio Tinto 60%. Investors are betting that a global economic recovery, whenever it comes, will bring with it a serious boost to demand.

A wave of more positive economic data has also swelled the ranks of the green shoots evangelists. Recent reports on UK construction, services and manufacturing all reveal conditions have improved over the past few months, raising hopes the worst is over.

Declines in house prices seem to be moderating, while confidence within the business community and among consumers is on the rise.

Although unemployment is set to keep on rising this year and next, the job of equity markets is to anticipate economic recoveries, which they tend to do by a couple of quarters.

Whether there’s much left in this rally is anyone’s guess. Markets don’t generally move up in a straight line, so it’s reasonable to expect selling at some point, but it’s the extent of any decline that’s difficult to predict.

However we remain cautious as the FTSE 100 failed to hold above the 200-day moving average through to Thursday’s close. He says the index will meet resistance at January’s high of 4,675, should the rally continue.

What’s certain is that everyone wants to be there when the recovery begins, not stuck on the sidelines missing out on another 1,000 points.

Market Watch: NASDAQ touched its 200 days Moving Average

Same as FTSE 100, NASDAQ last night did the same things, had a strong trend in early hours, touched the 200 days moving average and the retreats back to South Pole.

Tonight will be an important night to make a call for all NASDAQ lovers …

Market Watch: FTSE100 touched its 200 days Moving Average

As we mentioned in our previous articles that the 200 days moving average might become a Make or Break situation for FTSE’s recent Bullish (or sometimes some people refer it as Bear Rally) uptrend and that is exactly what happened yesterday. The FTSE opened with a strong trend and there were early gains on the FTSE100 Cash Market before the market actually opened on London Stock Exchange.

We witnessed a very strong trend in the earlier hours and the Index topped at 4519 before it started sliding down. It closed at 4382 which was lower than its previous day’s close.

The 200 days moving average was at 4450 which we clearly crossed during the early morning hours of trading. What happens is now is quite important to determine whether the current trend is sustainable or if this could be our first Resistence Point where we need to come back at some later stages.

Friday’s Trading will be very important to all the Traders around the world …

Market Watch: Whats next for FTSE after April’s gains

These types of rallies are not unusual when markets move lower, for example in April last year the FTSE also rallied strongly, by 385 points, before falling rapidly lower in the early summer between May and July.

The FTSE opened April at 3,922.90 and has managed to break through a number of different resistance levels one after the other, along with the Dow Jones and S&P500.
However, there is significant oscillator divergence forming on all 3 indices at these levels, and this can indicate that the market may be near or getting near to its near term highs.

I still remain to be convinced of the validity of this rally and we are still well below this years highs.

However, as I mentioned in a previous article, a break of the long term 200 day moving average would cause me to reassess the overall view.

The stock markets performance is completely at odds with the dismal economic and company data, and even though you can argue that equity markets are forward looking I think this rally can be compared to a runner, jumping the starting pistol.

Even highly respected fund manager Anthony Bolton claimed in a TV interview this week that he believes that the next bull market has begun.

Let’s try and have some perspective – since mid 2007 the FTSE has dropped peak to trough 3,294 points. Since March we have recovered 23.6% from the lows to around 4,240. I think it needs a bigger move than this to convince of a turnaround in sentiment.

However, since we posted the lows of 3,460 in March, the FTSE has been trading in a steady upward trend whose support line is currently at 4,003.
Yesterday we broke above the 4200 pull back resistance line that I referred to earlier this week.

However, looming large above that is the 200 day moving average line which, over the last 30 years, has marked the turning point of most changes in bull or bear moves.

This line currently dissects the price axis around 4,400 so there is potential for further upside to suck in all the “come late to the party” bulls.

Forex: Rates decision could boost Australian dollar

THE Aussie dollar could get a mild boost if the Reserve Bank of Australia (RBA) dishes out a no-change decision on interest rates this afternoon. The RBA holds its monthly board meeting today, with its decision on interest rates expected at 2.30pm (AEST). Most economists are expecting the cash rate to remain unchanged at a 49-year low of 3 per cent.

Experts forecast board members will take a wait-and-see approach as improved economic outlook and the flow through effects of the Federal Government’s stimulus packages becomes clearer. In a survey of 20 Australian economists, 19 said an improved economic outlook would most probably persuade the central bank to leave the cash rate at the current levels. In the minutes of its April board meeting, the RBA said “tentative signs of improvement” could be seen in some economic indicators for several countries, but it was “too early to judge how durable they would prove to be”.

The Aussie Dollar touched 74c key Resistence against the Greenback during last night’s aggressive trading in Forex Market.

News: British Telecoms [BT.A] to cut jobs

BRITISH telecoms operator BT will cut 10,000 jobs when it reveals its preliminary results next month, reports said.

BT will also make a £1.5 billion ($3 billion) writedown in its under-fire Global Services division and slash its dividend by about 60 percent, according to the UK’s Daily Telegraph’s website.

The job losses, which the report said will be in addition to the 10,000 job cuts BT made last year, are expected to be spread across the company’s 160,000-strong global workforce.

BT’s share price has plunged from 235 pence to 81 pence in just over a year, following a series of bad financial results.

The company warned in October that the previous management of Global Services, which supplies telecoms and IT services to multinational companies and government bodies, had overestimated the profitability of some of its biggest contracts.

BT’s results are likely to be among the worst since it was privatised in 1984, the Telegraph and the Sunday Times reported.

Its poor financial performance in the face of the global economic slowdown is compounded by the cost of trying to plug its huge pension deficit.

A BT spokesman said the reports of an additional 10,000 job cuts were “speculative numbers.”

“The company is focusing on cost reductions,” he added.

News: Toyota may post 7b US$ loss

TOYOTA, the world’s biggest automaker, is expected to suffer a second consecutive annual loss because of the global economic slump and a stronger yen, Japan’s Nikkei daily reports.

Toyota’s group operating loss may top ¥500 billion ($7 billion) for the current fiscal year which started April 1, the business daily said.

It would be the second straight operating loss, as the company has already warned that it expects an operating loss of ¥450 billion ($3 billion), its first ever, for the fiscal year to March 31.

Revenue for the current year is expected to fall to around ¥20 trillion ($282 billion), down from an estimated ¥21 trillion ($296 billion) for the year before, the Nikkei said.

Toyota group auto sales are now estimated at 6.5 million vehicles for the fiscal year just started – which, if confirmed, would be the first time they have fallen below seven million units, it said.

That forecast is mainly due to a delay in recovery of the US auto industry, with the Japanese and European auto markets also expected to remain stagnant, and the impact of a strong yen against the dollar and the euro.

A strong yen lowers the competitiveness of Japanese products overseas.

Toyota overtook General Motors last year to become the world’s top-selling automaker, but only because the US giant’s sales fell faster than its own.

The Japanese company has moved to lower production, cut jobs and appoint a new president from its founding family in response to the crisis, its biggest ever.

News: Arrow [ASX:AOE] buys gas asset for $400m

ARROW Energy has bolstered its coal seam gas reserves with a $400 million purchase of Beach Petroleum’s stake in Queensland’s Tipton West project.

The market had been expecting the announcement after Arrow last week said it would sell its 20 per cent stake in coal seam gas explorer Pure Energy to BG Group for $8.25 a share, allowing the British raider to take full control of the company.

BG had trumped the cash-and-scrip bid by Arrow for Pure by sweetening its bid from $8 a share to an all-conquering $8.25 offer.

Having missed out on Pure, Arrow was free to stitch up a deal to take control of the Tipton West venture by acquiring Beach’s 40 per cent stake.

Arrow was already the operator and largest stakeholder in Tipton West, holding 42 per cent. Shell will retain the remainder of the project.

Under the deal, Beach will receive $260 million in cash, $70 million in Arrow shares and up to $40 million cash for the booking of any gross 3P gas reserves.