Morning Call [7:34am ET] A shift towards a tightening monetary policy in China is quite probable, according to my associate known to you as the Shanghai Fly. Such a policy change may have wide impacts throughout global capital markets.
His reasons are as follows:
(1) Various official price indices have shown gains that are making the public nervous snippets like the following, which may shed some light into the current situation:
· "Producer prices may have climbed +5.1% in February, the biggest gain in 16 months, the Bloomberg News survey showed. "
· "Baoshan Iron & Steel Co., China’s biggest publicly traded steel-maker, increased prices for March delivery as much as +7.4 percent because of higher demand and raw material costs."
· "economists project the momentum to continue, sending the (inflation) rate to as high as +4.4 percent during the year, a separate survey showed last week."
(http://www.bloomberg.com/apps/news?pid=20601089&sid=asy.UZEegJD8)
(2) Inflation is one of the biggest concerns among many Chinese. In fact, when many people saw the near +30% growth in M2 for 2009, they mentally regarded it as the equivalent of potential hyperinflation. Due to inflation expectations being already pervasive, a rise in the CPI to +4 or 5 percent may cause runaway prices, making inflation hard to rein in. The central bank probably realizes that and will try to nip inflation in the bud.
(3) Low rates have arguably spurred further speculation in the property market, causing fears of a bubble and potential economic downturn if and when the property market busts. While housing has probably contributed greatly to the GDP numbers and to state and local coffers, there would be no point in killing the golden goose by creating over-large bubbles.
(4) January saw a 1.39 trillion yuan increase in new loans. Given the fact that the state mandate is for total new lending to be under 7.5 trillion yuan for the entire 2010, his interpretation is that companies have seen the writing on the wall and are busy borrowing as much as possible in anticipation of tighter money in the future.
(http://www.bloomberg.com/apps/news?pid=20601206&sid=aZoSwOizAyRE)
(5) High level officials including the Premier and the Governor of the central bank have repeatedly made careful remarks hinting at a normalization of monetary policy and the need to keep policies "flexible" and so on. He believes this is preparing the markets and the populace at large for potential rate hikes, so that when it happens the tightening does not cause an unnecessary panic.
In conclusion, my Shanghai-based associate believes that tightening by the Chinese central bank will happen sooner than later and may send potential shockwaves through the market. Though it is possible that the equity market will see a repeat of the 2006 episodes of stocks gapping down on news of interest rate hikes but later closing up at the end of the day and continuing the up-trend, that scenario, he believes, is unlikely to play out in the current environment where stocks are richly priced.
Randall Oliphant and Rob McEwen, the Chairmans of New Gold (NGD) and US Gold (UXG) respectively, two new additions to the Cara 100, gave very effective presentations at PDAC yesterday. I will summarize my notes after the convention is over.
http://www.pdac.ca/pdac/conv/index.html
The delegation in the huge China Inc trade show booth were in full attendance right at yesterday’s 10:00am open of the convention floor. In stark contrast, there was not a single person in the adjacent similar sized booth of a South American country, or in many of the other countries. The Chinese delegation here numbers in the hundreds and I can tell you their professionalism is outstanding. I give them a 10 out of 10 rating.
Interestingly I had the opportunity yesterday to meet the Minister of Mines of Afghanistan, so my curiosity led me to the booth, but I only saw representatives of Morocco there, so I passed. PDAC now is a world stage for probably 40 countries as well as most of the major equipment and service vendors, stock exchanges and maybe 2000 listed mining and metals companies. Unfortunately, four days is no longer enough time to cover everything I’d like to see.
Have a good day.
CTA Trading Desk Post-Close Report
All you need is a little help from your friends. Before today’s opening, rumors were floating that regulators were considering prohibiting short-selling in Citigroup (C +3.66%) and American International Group (AIG +10.5%, after a greater than +15% surge yesterday), causing knee-jerk buying across the entire financial sector (XLF +1.05%). After the initial upward surge, the major market indexes seesawed back and forth for the rest of the session as volume picked up with high-tech favorites Broadcom (BRCM +3.73%), Google (GOOG +2.90%), Research in Motion (RIMM +2.03%), and Amazon (AMZN +1.31%) attracting widespread buying interest.
While the S&P (SPX +0.45%) just missed matching the January high near 1150, the transports (TRAN +0.62%) made a new high and has now doubled off last year’s low. Gold (GLD -1.08%) had a particularly tough day dropping 24 dollars from an early morning peak, a potentially troubling sign for precious metal Bulls because US dollar (DXY -0.20%) weakness should have prompted strength in silver and gold. Crude oil (USO +0.88%) was extremely volatile today, initially soaring +2% on a bullish inventory report only to turn tail and relinquishing the entire gain by midday before recovering modestly into the close.
The path of maximum frustration for most traders would be a continuation of the narrow, choppy trading range through option expiry a week from Friday. Remember Mr. Market wants to leave the station with as few passengers aboard as possible, so wearing us out would be a wickedly devious way to take off without most of us along for the ride. Also experience tells us that the initial surge out of a trading range is often a head fake, so plan trading tactics accordingly; a quick reversal back into the congestion area would indicate prices will traverse back to the other extreme boundary at a minimum.
Same support (1125 to 1130) and resistance levels (1150, 1170, and 1228) remain in force.
Have a great evening.
Comments
Cara 100 Ratings Changes
Good morning.
BCR - Morgan Joseph Initiates Coverage with a Hold.
VALE - Downgraded to Neutral @ UBS
Chinese Inflation
I met with a Chinese colleague recently and he told me that he paid twice as much for a new laptop in China than it would have cost here in the U.S. The irony of this is that the laptop is made in China.
They are awash in money. Is this a big surprise?
china tightening
To follow up your thoughts on tightening - the last couple times China hinted at doing that, the US equity market took a tumble. So if that's imminent, and the market ends up being surprised by that, we're likely to see some excitement when they announce.
So by "wide impacts throughout the capital markets" - that means in all likelihood a brisk move down in equity prices.
What do we think that means for currencies? Would this be favorable to the dollar, the euro, or what? Certainly it sounds unfortunate for the Loonie and the aussie buck - my thinking is, China tightening means less spending on commodities, which come from Canada and Australia.
Slight dollar positive, perhaps?
Cara 100 Update
BUCY - The stock is up sharply ahead of the open after getting added to the Conviction Buy list at Government Sachs.
CVX - Bank of America/Merrill downgrades Dow component Chevron, now Neutral from Buy with a $90 target after the oil company’s meeting with Wall Street analysts yesterday offered “little new” news.
UNG anyone?
UNG is really looking oversold to me. With XOM/XTO merger and a few smaller tuck in deals like Energen's last July in the Fuhrman-Mascho, I'm thinking Natty Gas is close to some type of a bottom. I realize that Nat Gas can easily go back to $3, but when you look at the charts over a 5 year period, its about as low as its ever been. There's also been a decoupling from oil. I know that there's no Oil:NatGas ratio like there is w/ Gold:SIlver, but the divergence is noticeable and I'm not sure the macro trend isn't about to flip the other way (at one point in the last 5 years, Nat Gas was HIGHER than Oil). UNG under $8, may be worth a nibble and the start of a long term hold if you buy the trend change.
put/call ratio
Usually watch the put/call ratio along with VIX for clues to where the market may go. Came across the following and FWIW, it makes sense to me.
Last night's Market Edge: The CBOE equity put/call ratio dropped to 0.43 today, the lowest in more than a year. The last time we saw that ratio below 0.5 was on January 11 when the S&P 500 was at 1146.98. We know what happened after that. The broader market index churned for several sessions before topping out at 1150 on January 19. (A similar pattern can also been seen in both mid-October and mid-September.) Today's 0.43 reading could be sending us the same signal, that is, a pullback could be coming soon.
Re: UNG anyone?
UNG suffers from time decay and the fact that you're trading against rooms full of well capitalized computers, ie RenTech and Centaurus energy. FCG (owns the NG companies) has done much better and i imagine will continue to do so.
any "equity" fund with time decay should be avoided at all cost.
Cara 100 Update
DOW - estimates reduced at Morgan Stanley. DOW estimates were cut through 2012. Company will be affected by higher propylene prices and the Styron divestiture. Overweight rating and $43 price target.
VALE - estimates, target increased at Government Sachs. Shares of VALE now seen reaching $44. Estimates also boosted, because of higher iron ore prices. Buy rating.
Re: UNG anyone?
UNG is not a vehicle for a long term hold. There is price erosion inherient in the ETF. SI02 a frequent contributor here has written extensively about this. Here is one of his articles.
http://shockedinvestor.blogspot.com/2009/09/ung-ro....
There is many other ways to play NAT gas long term. Depending on your situation. MLPs or royalty trusts give a large dividend and will go up with Nat Gas.They just will not have that huge pop. Grym mentioned ETP. Look at SJT. For equity CHK is known as a "pure play" on Nat gas. For spec plays I have been trading in and out of UPL and WMB.
Bob
Re: UNG anyone?
Mcgro2, You type faster than me. :)
froth deteector?
Another good day for AIG. It's +12.5% to 37, up 9 points in two days. Is this because AIG is getting ready to pay back the billions they owe? Anyone here done the math on how much they owe, and how much in assets they are selling?
FWIW my uneducated guess tells me its just a massive short squeeze that's been months in the building.
re/UNG
........a synthetic stock play on UNG would be to sell the apr 8 puts {where you have to buy the stock below that price} and use the money received to buy theapr 9 call........gets you in a miniscule cost but account has to be approved for "naked" puts..........the account that I opened jan09 w/100,000 peaked in early jan 10 at 146,000 pulled back to 137 and is at 149 now w/about 2m of time premium/decay left thru option fri next week. I only mention this because account is set up to sell cash secured puts and if i get stock i turn right around and sell the fairly close in call. I try to only do options where there is a least a 2% monthly return on strike price.... IT DOES REQUIRES SOME PATIENCE (AT LEAST A FEW WEEKS TIME HORIZON} but as i have discovered i am the worlds worst/most emotional day trader so it seems to be a great compromise. for instance the HL 5s puts have been a great sale for months.........already did some of next months (apr 5s)... a good % of stock come right off the Cara site {thanks bill} comments ie, HBAN, FEED, KGC, NGD, ALTH, etc
UNG Anyone?
Thanks for the replies. I don't quite follow the decay theory now. I understand that the article you cite above points to the use of futures/swaps and how that hurts UNG in a declining forward price environment...but would not the opposite be true in a rising environment? I don't think September 2009 and March 2010 are quite analogous and the price of UNG was quite higher in September 2009 when that article suggests going short UNG. UNG does not use leverage, so there is no inherent decay aside from the expense of managing the fund.
I also appreciate the MLP & divvy rich recommendations, but I tend to avoid those for the same reason I avoid Canroys - they never quite work out the way you expect and the divvy ends up just providing a downside cushion. Maybe if you just reinvest the divvy over a long time, it can be quite profitable, but I don't have that kind of cash to commit. A
As far as trading against the quants...isn't that just the reality of being in the market today?
Re: froth deteector?
"FWIW my uneducated guess tells me its just a massive short squeeze that's been months in the building."
With over 30 mil shares short (23% of the float), that would be my guess too
Re: UNG Anyone?
take a look at the largest holders of UNG and more important, WHY they own it. Jane Street capital, DE Shaw, SIG and Wolverine are VERY smart shops with hundreds of computer scientists working at each. my guess is that they use UNG as a hedging vehicle against other large derivative positions. All four shops are known to use as much as 10 percent of capital buying extreme out of the money puts as insurance. my guess is that these shops were very short UNG through most of 2008-2009 and the fact that they own it now is probably just evidence of slowly covering these positions and accumulating NG, but predominately in the derivatives markets.
long term i think NG looks good, but not via UNG and definitely not playing against these guys.
financial reform
Boy, just a month ago JPM and GS were dogs, and now look at them. I guess nobody is worried about financial reform anymore. In fact, XLF is close to a 52 week high. What a difference a month makes.
SOKF, NEWN
Added a little more SOKF today at $4.22. I really like the growth prospects here and it looks like it's trading at a really cheap valuation compared to earnings. They earned $0.17/share last quarter, which is a run rate of $0.68. Earnings grew over 80% last quarter. The stock is trading at 6.2 times that run rate and at 4.5 times conservative estimate of $0.91/share next year (using 33% growth rate).
NEWN - I'm looking to buy some here. Again, this is a lithium ion battery maker. They bought two companies that will help reduce their cost structure and make sales to new overseas markets. They have reiterated guidance of at least $1.23/share in earnings this year. Stock is trading at 6.5 times that guidance.
Re: financial reform
That's humanity for you. Bread and circuses and then you can do whatever you want behind the scenes. Financial Reform won't turn into a movement until a huge percentage of the population is uncomfortable, and even then it's not very glamorous or comprehensible to most of the population. You can explain the Voelker Rule 'til you're blue in the face to most of America and they'll just ask what time Lost comes on.
Re: financial reform
The deal is pretty transparent. There will only be financial reform if Health Care does not pass. Congress does not pass some BS health reform, then financial reform will be revisited. Obama wants healthcare and financial regulation is his only leverage to get that done.
Bob
Shakeouts Galore
They're testing long's mettle...that is, if you think the market is ultimately going to break through 1,150 then these shakeouts are testing the will of longs.
Re: UNG Anyone?
I traded UNG in the past (along with UGA) and found them not to be worth the tax hassle of having to deal with a K-1...
KC
PDAC report
Definitely the most interesting story I came across today was Rainy River Resources. Huge potential. Could grow the gold resource to 10 million oz. Will spend $20 million on exploration this year. Only happened to see them at the close of the trade show at noon when I came across our old friend Ray Threlkeld, formerly President at Western Goldfields (pre-merger with New Gold). Ray is on the New Gold board, and his former partner Randall Oliphant is the New Gold Chairman. Randall and Ray tried to buy the Rainy River company for Western Goldfields and were thwarted, so when Ray departed to look for his own deal rather than go into the New Gold, he hooked up with Rainy River, a Vancouver-based company but now setting up in Toronto with Ray who is President and CEO. I like this a lot.
The stock (TSX.V:RR) was trading at about C$2.00 at the end of Oct and $2.69 at the end of Nov. With the story out here at PDAC, the stock hit C$5.20, presently C$5.06. Short-term, I have no opinion on the price, but, after we look over the detailed geological data, the RR will likely join our focus list with a long-term view to building positions. As a veteran of the mining wars said to me last evening, there are a lot of accountants and M&A specialists in this industry, pumping up share prices, but in the end it comes down to one basic factor -- the rock.
Speaking of this, our old friend Guyana Gold (TSX:GUY) has the rock, and their share price moved from a low of C$0.61 in Oct-2008 to a high of C$8.34 in Dec-2009. The price has dropped off a bit here to C$6.59, but will eventually trade much higher.
I also ran into Crystallex (KRY). There is a glimmer of hope.
I'll enjoy a few hospitality suites this afternoon, and then call it a year. Best PDAC ever, this one was, although you need to be organized to ensure you get to meet the people who may be important to you. From my list of 53, I knocked off probably 48 plus about a dozen more. Sixty mining-related companies plus a few trade show equipment exhibitors I was able to meet. That could not possibly be done anywhere else as some of these people came here from the most remote places on earth just for this meeting.
I have very strong views that the global economy will stabilize in 2010 and begin to grow at a rapid rate starting in 2011. Natural resources will be a big play for wealth managers. You really should not miss PDAC.
Re: PDAC report
Bill
Thanks for the PDACs updates. Was wondering whether you or anyone else attending the event has talked to Argonaut Gold (AR.TO)? This is a new company led by former management of Meridian Gold. They recently raised a nice chunk of capital and bought out Castle Gold (which has a new operating mine in Mexico and a project in Guatemala). Market cap is fairly small at $175 CAD. Seems that they could be succesful at raising more capital (based on management experience) to expand existing assets and/or make further acquisitions. They at least seem to have the right 'jockeys' to make something happen down the road.
Re: UNG anyone?
Nebish,
Your right UNG does look oversold and I had the same reasoning as you..Macro trend is certainly up at some point. So in July of 2009 when gas was at about $3.25 I bought some UNG for my 401K as a long term hold, I mean $3.25! you can't lose on that right? Retirement is 15 years away. The price per share was $13.58 I was actually very excited about this investment at the time. Feeling that I had really secured something that would reap nice long term profits. Today gas is about $4.25?. The stock is trading close to $8.00 so I am down about 40% from my purchase price in less then a year with the actual commodity higher. Frankly I was just plain stupid to buy that stock, as they say I didn't do my homework. Lessons learned. Please do not buy UNG for anything but a day or swing trade.
Re: UNG anyone?
SquarePeg,
Are you still holding this ETF? If so I would sell into any strength. I would like to give an example just to illustrate what a bad "investment" these etf's are. I am not rubbing your face in a bad trade at all. I do bad trades on a daily basis. Anyway if you bought SJT a Nat Gas royalty company at the absolute peak of last July you would of paid $14.62. Today it is trading at 22.00. That is a 50% return not including the .05 of dividends that is paid out on a monthly basis. Somebody is making some serious coin on these etf's. It is just not the people who buy them.
Bob
Re: PDAC report
"I have very strong views that the global economy will stabilize in 2010 and begin to grow at a rapid rate starting in 2011. Natural resources will be a big play for wealth managers. You really should not miss PDAC."
I would really be interested in your reasons for this belief, Bill.
Regulation of Retail Forex
Greetings all -
I am hoping that Bill will find this posting unobjectionable, and apologize if he finds it so.
Below you'll find a letter I've sent to the CFTC regarding regulation that aims to limit retail forex transactions to 10-to-1 leverage. As you will see in the draft below, it is, I feel, an onerous burden to put upon independent traders at the expense, yet again, of institutional players. Yes, there are issues about capital requirements in the regulation that are not unsound, but the thrust of it is that it makes it difficult for small traders to participate in this important market.
If you have the interest, or the time, and would be willing to send your comments to the CFTC, it can be done as follows:
email: secretary@cftc.gov
Include: "Regulation of Retail Forex" in the subject header.
Fax: (202) 418–5521
Mail:
David Stawick
Secretary, Commodity Futures Trading
Commission, 1155 21st Street, NW.,
Washington, DC 20581
Web Federal eRulemaking Portal:
http:// www.regulations.gov/search/index.jsp.
Follow the instructions for submitting comments. But par for the (government) course, I have yet to get this url to work properly....
The letter:
To whom it may concern:
I'm prompted to comment on the proposed regulation of retail forex, because, try that I may, I can find no compelling reason to enact any such regulation.
If your thesis is that it could curb excessive speculation, I can assure you that as a retail forex client, I well know that you could put every single retail forex trader on the planet on the same side of a currency trade and it wouldn't do a thing to counteract the dealings at the institutional level, let alone an irate (or determined) central bank. Let me say that I learned first hand many years ago that is unwise to try to trade against the Bank of Japan, the Bank of England, or most especially our beloved Fed.
If it is your concern for the "naive"retail forex customer (and I'm sure that there are many) that is uppermost in your mind, let me remind you that we all sign documents of disclosure on risk, and that to trade such an account at all implies that one is an adult, and can therefore live with the consequences of their actions, come what may.
Finally, the reduction of leverage to 10-to-1 where professional trades are carried out in $100,000 lots can only mean one thing: more money of mine being held by my brokers in order for me to trade as I do now, for no good reason at all. I don't see how that benefits anyone, except the brokers. In fact, such a regulation will likely drive traders to overseas accounts which will not be party to such encumbrances, siphoning money out of our economy and into someone else's; and surely, we can all agree, that we should want that money circulating within our own economy.
I feel that I speak for many traders when I say that I hope that you will reconsider adopting this regulation that is likely not to do what your propose, and will put independent traders at a disadvantage to larger institutional interests, yet again.
Re: UNG anyone?
Over the same period FCG is up about 56%. Other energy ETF's (XOP, XLE) did not due nearly as well.
Re: UNG anyone?
bobbyo,
Yes sell into strength. Just curious if it were you, what would be your sell signal? crossed above 50MA? RSI (7) over 70? or perhaps just up for 3 days..which I believe you have to go back to November 09 to get :o)
Re: Regulation of Retail Forex
aiki,
I don't trade Forex for a lot of reasons, but out of curiosity... margin for equities is normally 1:2, 1:4; some prop shops offer 1:10 for intraday trading while institute very strict risk control - mine for instance accepts no margin whatsoever for overnight holds. There are also various tools limiting your (and broker's) risk, like limiting max position size or cutting you off when max loss for the day is reached. All these measures are in place because margin involves broker's risk of loaning you money.
Why is 1:10 not enough for Forex, and 1:100 is needed? (this is not a rhetoric question, maybe there is some key difference that not being a Forex trader I am not aware about).
Also, I am not sure I understand the logic behind "more money of mine being held by my brokers in order for me to trade as I do now, for no good reason at all". After all, margin is broker's loan to you for the time of your trade.
Re: Regulation of Retail Forex
There are two ways to trade FX. One is spot, one is futures. There are no margin issue with futures, contracts are contracts, basic futures margin requirements, all fine. Spot is different. There are actually two ways to do it as well...
standard account and mini.
The standard account trades in lot sizes of 100,000 of the currency in question. As of now, I can trade 4 lots, say, (which by the way, I hold for fairly short time frames, and never overnight) with about $4000 in the account to support that trade. I would never trade my entire account that way, nor would I have only $4000 as a balance, as it... a) isn't enough and b) wouldn't be prudent - just an example here...
With this regulation enacted, I would have to have $40,000 on hold with my broker to trade that same tier size. Day trading is usually 4 to 1, yes? Imagine if it went to 1-to-1, you would either have to put up more money, or reduce your size, instead of trading 1000 shares, you'd only be able to trade 100.
Mini lots (1/10th size) are possible, but I don't trade them, although they may be a potential solution. If it gets enacted, I'll just trade FX futures, but I feel they trade a bit differently, although some might say better, because you trade in an open market as opposed to against your own broker itself in spot which has it own problems.
This is probably more about stopping fly by night FX dealers that have 400/500 to 1 margin, which I agree is far too much, and puts one in a better position of being wiped out by the very margin that one was seeking to exploit. Perhaps a discussion of leverage among the tribe here would be instructive, because as we all know, leverage can be constructive or destructive and must be handled carefully.
Avid reader of you posts! Thanks as always.
RSI7
RSI7 on SPY is quite high...it reached 86 at one point today. Could be due for a pullback.
Re: froth deteector?
AIG- 'nother one sold too soon. Can't remember if it was a kangaroo tail reversal or Triple RSI buy. Around Feb 8.
ohwell
Re: Regulation of Retail Forex
Thank you, understood... although I would still think 1:10 is a more appropriate margin for a vast majority of traders. Granted, there are always exceptions that know what they are doing, but I hear of way too many severely under-capitalized traders with 2K accounts and huge margin, hoping to conquer the financial world. 1:100 for the most is just asking for troubles, let alone 1:500(!)
So, spot is still a trading against your broker instead of open market, eh? That was one of the major things that put me off years ago about Forex - bucket shop, pure and simple, outlawed in equities many decades ago but for some reason alive and well in Forex... and masses grateful for "commissions-free trading", lol
Laggards
in looking at some big caps' price performance between the January high and now, I noticed that a couple that haven't reached their old highs despite the market reaching its old highs:
1.) DOW
2.) KO
Look at the last 5 days' performance of these two as well:
DOW: http://www.google.com/finance?q=NYSE:DOW
KO: http://www.google.com/finance?q=NYSE%3Ako
Precious (metals) take a beating today despite weak dollar
I don't like it. I assumed that dollar would slide eventually and it would be positive for PM. The second part doesn't work today. I exited 50% of my PM allocations. Looking for exit strategy for the remaining 50%.
SDS
buy stop above 3PM price, 32.44. Good for day.
Do your own homework.
DOW
Short at $29.07. Again it looks like it's a laggard, having underperformed the market since the beginning of the year.
Re: UNG anyone?
simple graphic comparison of NG futures and UNG. Where's the beef...?
Re: PDAC report
Bill said: "I have very strong views that the global economy will stabilize in 2010 and begin to grow at a rapid rate starting in 2011"
Interesting you should say that. The MHFT suggests possible stabilising (even potential reversal?) of unemployment, which he implies that the market, being unaware of, will (if he is right) react positively to:
http://www.madhedgefundtrader.com/Today_s_Diary_En...
We shall see, but he sounds almost bullish.
Colin Twiggs recently remarked something similar:
"Having survived the global financial crisis, are we on the road to recovery or are we like the proverbial twin-engined airplane: when one engine cuts, the second will carry you to the scene of the crash. The GFC itself is far from over. It has merely transformed from a banking crisis to a sovereign debt crisis. Transferring massive losses from the banking sector to the public balance sheet re-capitalized the banks, but created a more serious problem with excessive public sector borrowing. Many national leaders continue to ignore the basic rule: you can't borrow your way out of a financial crisis."
We've managed to kick the can down the road?
AIG can be a tough bull to ride Davef, but it's fun to learn momo!
Re: Regulation of Retail Forex
"commissions-free trading", lol..."
LOL, indeed. They take the spread first, then stop hunt like crazy....The ultimate market makers bucket shop dream! In fact, I sometimes think that trading spot has made my stock trading (a bit) easier.
There are ways to mitigate FX dealer nonsense, but it is still a challenge at times. Most "reputable" FX dealers, btw, only allow 100 to 1. Any more is nuts and unnecessary in any event.
Re: PDAC report
Les,
If the numbers show job gains they will either: 1. Ignore job quality and include such as Census takers temp jobs, or 2. Be an entirely government fabrication.
Fro ST traders it makes little difference, but for the condition of the country it would be just one more fairy tale.
Re: Regulation of Retail Forex
In classic bucket shops of the past they also kicked out a customer who had the audacity to win regularly, and I heard reports about similar incidents at the beginning of Forex era. Is it still happening, to your knowledge?
Thanks for the information, been quite a while since I looked into Forex, good to refresh the awareness of the other corners of the market.
RSI Screener, GE
BSI - I bookmarked that RSI screener you posted a link to...did you see the list from yesterday? Overbought stocks outnumbers oversold ones 688 to 14. pretty crazy, huh? I wonder how long it can stay overbought for.
GE:
I sold my GE Mar $15 calls at the close for $1.53 that I bought last week for $1.28.
EDIT:
Here is the screen:
http://rsi-trader.blogspot.com/
Re: Regulation of Retail Forex
I cannot say with absolute certainty, but there was a time a while ago, when it seemed as though my stops were not being executed with, shall we say, alacrity. They would just sit there going unexecuted till my winning trade was reduced substantially, or sometimes reversed in its entirety. It happened only for a short time, but it drove me crazy and cost me money. It has not happened since, but I don't doubt that it happens all the time. Not that I'm a pessimist, or anything.
Just market makers with an extra license to kill. (Apologies to any Caraistas that are or have been market makers).
;)
Lot of Washington folk keeping the pressure on
Monsanto this week, with Friday slated to have meetings from representatives on all sides.. Options doing a good job of keeping the lid on, along with Goldman slightly lowering 2011 estimates.. The step downs have, so far, been pretty controlled... will be very anxious to see the short ratio's in about a week.. Perhaps it will see the $ 69.00's.. if so, I will start to add more. If the global economies are beginning to stabalize, this would seem to present some good opportunities for the longer term Ag. trades..
Interesting presentation at Credit Suisse
... http://www.monsanto.com/pdf/investors/2010/03_10_1...
It's all in the Arithmetic...
Interesting set of lectures by a Boulder, Col., Prof.
http://www.youtube.com/watch?v=F-QA2rkpBSY (part 1/8)
It's good to be reminded of the math behind our trading pursuits. Video, 4, e.g., explains the insurmountable challenges facing the coal industry and video 5 tackles oil.
C-300
ALOHA !!
Bill ... what is this bit about Canadian politician John McKay and his Bill C-300 which seems to be an attempt to re-write mining investment and funding without consulting the mining industry? As I understand the legislation, a mining company can be accused of environmental or social violations without any evidence whereby this could shut down many avenues of funding for the company as well as ensnare precious capital into endless legal quagmires. Let me just say, even without this C-300 Bill passing, I still see TSX listed companies like Northern Dynasty(NDM) who have spent six years and $130Mil just on environmental/social studies. How does this effect TSX listed mining and energy companies "country risk"?
Here are some data points regarding the Bill:
The official title of the bill is the “Corporate Accountability of Mining, Oil and Gas Corporations in Developing Countries Act”. Key aspects of the bill are:
* The Minister of Foreign Affairs and Minister of International Trade are to develop guidelines that articulate corporate accountability standards for mining, oil or gas activities. These are to incorporate the IFC’s policy and performance standards on Social & Environmental Sustainability, the Voluntary Principles on Security and Human Rights; “human rights provisions that ensure corporations operate in a manner that is consistent with international human rights standards”
* The Ministers shall receive written complaints regarding Canadian companies engaged in mining, oil or gas activities. These complaints are to identify which provision of the guidelines has been breached.
* Unless they determine the complaint to be frivolous, the Minister receiving the complaint will investigate the complaint. The Ministers are to notify EDC and the CPP Investment Board where they determine that a corporation’s activities are inconsistent with the guidelines.
* The Export Development Act will be amended to state that EDC “shall not enter into, continue or renew a transaction related to mining, oil or gas activities … unless these activities are consistent with the guidelines …”
* The Department of Foreign Affairs and International Trade Act will be amended to state that “with the exception of ordinary consular services available to all Canadian citizens, no undertaking made through a program developed by the Minister in the exercise of his or her powers under this section shall promote or support mining, oil or gas activities, … that are inconsistent with the guidelines …”
* The Canada Pension Plan Investment Board Act will be amended to state “Every investment manager who invests the assets of the Board shall ensure that the assets are not invested in any corporations whose activities have been found by either Minister … to be inconsistent with the guidelines …”
I understand the President of PDAC addressed this issue at PDAC in no favorable terms. Holy Cow it seems "pensioners" in Canada are being tied down using restrictions on their pension funds. What else can't pension funds in Canada invest in?
Bill can you shed light on this C-300 issue and what Canadian mining companies are saying privately? Or is it of no interest to mining companies operating in foreign countries who are based in Canada? I do not follow Canadian politics too closely and you have pointed out some very suspect Canadian political interventions in the past ... Stelco comes to mind as one. What is going on with C-300 and should it be a "concern" when we look into Canadian resource companies? Any of the Canuks here up on this and other agendas of Hon John McKay?
I went to the website for John McKay and he seems to be hell bent on making everything in Canada and the World just a social or environmental issue. There is an article there that claims that the entire global financial meltdown could have been avoided if we limited investors based on social issues like the SubPrime. Does that mean John McKay wants to eventually eliminate Canadian investors choice to invest in Goldman Sachs and Bank America? Or how about shutting down the IMF? What was that whole Iraq War thing about that our Canadian allies did ... environmental or social? John?
It seems Canadian politicians copy American ones in terms of writing Bills full of flaws and based on the agendas of just a select interest group or groups. It all gets rather tiring keeping up with the vast array of political agendas in America and around the world ...
ANOTHER DAY ANOTHER BAZILLION DOLLARS
ALOHA!!
I recall the old saying when I was a kid ... "Another day ... another dollar!" Usually that was a description of blue collar work, but over at the US Treasury, where anything goes(and does)its "ANOTHER BAZILLION DOLLARS"!
Whats new? Well, not much ... same old ... we spend and debt more than we earn ... "We're always broke"!!! Maybe that should be the motto on the $1 FRN. Does the US FED charge the US Treasury a $39 overdraft fee every day?
The US Treasury on March 9th spent(outlays) $13.31BIL and deposited in "net" tax revenues only $1.21BIL USD. That was 11 times revenues(receipts) or 1100% leverage. More deficit spending in action. The "debt derivative" is alive and well!
I have to say that the losses that the US Taxpayers have taken on their 2009 1040s are killing any tax revenues the US Treasury is collecting right now. As I pointed out in a prior post a couple days ago total tax refund outlays are up 68% since 2007. Losses cannot be "fixed" for the average US Taxpayer, like they can for Bank America, but the US Treasury can plug its revenue hole by re-writing tax laws to phase out "loss carrybacks" and other loss deductions now allowed. I would not be surprised to see such a "loophole" closed hidden in some innocuous Bill that nobody in Congress reads because its 5000 pages long!
Batter Up
http://ronsen.blogspot.com/2010/03/batter-up.html
Fastball after fastball...?
Re: C-300
Without having done background research into the issue, I think you are reading too much into the bill.
First, it is a private member's bill by a member of the opposition; most of these are never passed.
Second, the bill seems intended to provide government oversight for the conduct of certain Canadian businesses who are in receipt of government funding for their activities in developing nations. Any corporation that wants an exemption from such scrutiny can simply not ask for support from the Canadian taxpayer.
Re: Batter Up
That's the reason why it makes sense to play the kangaroo tail reversal or capitulation trade. Too much risk and no "safe" trades under the RSI system for now. Still waiting for the big fat changeup to hit out of the park.