CTA Trading Desk Morning Report
[7:00am ET] Good morning.
Following up the bullishness of Asia-Pacific markets earlier, what started out in Europe this morning as an impressive day for equities has turned sour. Early on the big miners were looking brilliant green, but suddenly the picture changed, pulled down by the banks, which had been weak from the opening bell.
Headlines today are heralding the new commodities bull, full of talk of the strong Euro. But, those headlines are several hours old, almost a lifetime ago in the market’s new normal.
So, once again we have a difficult market to sort out. I could be wrong, here, but as I see it, the weak banks are tied to doubts that the European Financial Stability Facility has truly been shored up.
http://www.efsf.europa.eu/about/index.htm
A look at this morning’s chart of the Euro shows more sellers than buyers from the opening bell in Europe.
I still feel – nobody knows for sure – that once the EFSF matters have been settled, rates will rise there, the Euro will rally, commodities prices will pop, and equity markets will continue higher, led by Energy, Basic Materials and Industrials/Transports.
Anyway, it’s a feeling I have.
Enjoy your day.
Here are the 7:00am ET snapshots of the latest equity market trading results for Europe, and futures prices plus 5-minute charts of the futures for S&P 500, 30-year US Treasury Bond, US Dollar index, Gold and Crude Oil.
| Symbol | Name | Last Trade | Change | Related Info |
|---|---|---|---|---|
| ^ATX | ATX | 2,922.77 |
 10.17 (0.35%) |
Components, Chart, More |
| ^BFX | BEL-20 | 2,661.67 |
3.82 (0.14%) |
Components, Chart, More |
| ^FCHI | CAC 40 | 4,004.45 |
 8.23 (0.21%) |
Components, Chart, More |
| ^GDAXI | DAX | 7,136.96 |
6.49 (0.09%) |
Components, Chart, More |
| ^AEX | AEX General | 362.72 |
1.01 (0.28%) |
Components, Chart, More |
| ^OSEAX | OSE All Share | 489.24 |
1.81 (0.37%) |
Components, Chart, More |
| ^SMSI | Madrid General | N/A | 0.00 (0.00%) | Chart, More |
| ^OMXSPI | Stockholm General | 373.60 |
1.78 (0.47%) |
Components, Chart, More |
| ^SSMI | Swiss Market | 6,607.56 |
27.37 (0.41%) |
Chart, More |
| ^FTSE | FTSE 100 | 6,030.81 |
25.62 (0.42%) |
Components, Chart, More |
http://finviz.com/futures.ashx
http://finviz.com/fut_chart.ashx?p=m5&t=ES
http://finviz.com/fut_chart.ashx?p=m5&t=ZB
http://finviz.com/fut_chart.ashx?p=m5&t=DX
http://finviz.com/fut_chart.ashx?p=m5&t=GC
http://finviz.com/fut_chart.ashx?p=m5&t=SI
http://finviz.com/fut_chart.ashx?p=m5&t=CL
The team will check in during the day, reporting in the Discourse when there is a new entry.
Enjoy your day.
Cara on Trends & Cycles
Vad's Catch of the Day
Kaimu's Sound Money
CTA Trading Desk Mid-Day Report
CTA Trading Desk Post-Close Report
Good evening. Patrick here.
For the first time in recent memory Bulls were unable pull a rabbit out of their hats; no kick saves, last minute Houdini acts, no rallies, no nothing, just a relic from the past – a good old fashioned wire to wire sell off (S&P-1.32%).
The measured move projections mentioned here often zeroed in on S&P 1290-1300 (high thus for 1296), and the market respected those levels. Traders used the blowout numbers from Apple (AAPL-0.54%) to sell into strength. an antiquated risk management technique from a bygone era. After briefly catapulting over 355 last evening, Apple sold off closing towards session lows at 338.82.
So you have to ask yourself: Can the news get any better for this cultural icon? Or more importantly: If traders sold into this blockbuster report, what good news (stock split, special dividend?) could possibly be a catalyst for higher prices in the near term?
Sure, Steve Jobs could get a clean bill of health and come back stronger than ever (and we certainly hope that is the case for his friends and families sake – the man is a genius and has forever transformed our lives). But Apple has plenty of products and momentum near-term to operate quite well with Tim Cooke at the helm. Mr. Jobs long-term vision is what will be sorely missed, impacting business decisions affecting the bottom line several years down the line.
No doubt analysts will be defending the stock in the days ahead, but snapping yesterday’s low of 326 could elicit aggressive selling by investors and funds looking to lock in gains given Mr. Jobs health concerns. It’s a great, great company but maybe the trade is overcrowded; analysts have been tripping over one another to raise targets for many months, very few courageous (stupid?) enough to rate it as a hold or a sell. http://finance.yahoo.com/q/ao?s=AAPL+Analyst+Opinion
Breaking beneath 300 will be a sign the times they are a changing.
This is under the “Don’t think – Trade” line of reasoning; if it cannot go up on good news it isn’t going up, so trade accordingly no matter how much you love their products. Getting back on the bull ride is always just a click a way when price action demands you reenter the position.
That bull ride looks to be over in cloud computing stocks as F5 Networks (FFIV-2.05%) didn’t meet lofty expectations, slightly missing analyst estimates according to Briefing.com
16:08 FFIV F5 Networks beats by $0.05, reports slight miss in revs; guides Q2 EPS in-line, revs below consensus (138.78 -3.00)
Reports Q1 (Dec) earnings of $0.88 per share, excluding non-recurring items, $0.05 better than the Thomson Reuters consensus of $0.83; revenues rose 40.6% year/year to $268.9 mln vs the $270.6 mln consensus. Company issues mixed guidance for Q2, sees EPS of $0.84-0.86, excluding non-recurring items, vs. $0.85 Thomson Reuters consensus; sees Q2 revs of $275-280 vs. $281.13 mln Thomson Reuters consensus. Q1 (Dec) GAAP gross margin 81.8% vs 81-82% prior guidance. "Product revenue was up nearly 44 percent from the first quarter of fiscal 2010, and service revenue grew more than 35 percent during the same period. On a regional basis, all geographies delivered sequential and year-over-year gains, led by Asia Pacific where revenue was up 11 percent from the prior quarter and 62 percent from the first quarter a year ago. Underpinning the continued strength in our service business, deferred revenue grew 10.9 percent to $287.8 million from the previous quarter."
And for that slight miss shares plunged another -23.5% after hours – can you say, “priced for perfection”? This is what happens when a stock goes from 65 to 140 dollars in six months – there is no room for error, no place to hide when news is less than stellar. One wise man said, “For every action there is an equal and opposite reaction”. As above, so below.
Tomorrow morning Freeport- McMoran (FCX-2.90%) reports earnings amid record high copper prices. If the company reports blow out earnings and doesn’t rally…
Support for the S&P: 1274 (minor), 1260, 1220-resistance remains 1290-1300 and 1332.
The trend is your friend until the end – stocks selling off on good news are a warning shot across the bow.
Have a great evening.
Comments
FT: Cargill agrees $24bn spin-off of Mosaic
For Mosaic, a phosphates and potash seller, a deal could lure bidders.
The most obvious candidate is BHP Billiton, which has made clear it still wants to expand in the potash market after its failed $39bn hostile takeover attempt of Potash Corporation of Saskatchewan. Jim Prokopanko, Mosaic chief executive, said: “The world is not going to need less food. We have a clear strategy to capitalise on this growth opportunity.”
FULL STORY:
http://bit.ly/gJZjV9
Cara 100 Ratings Changes For POMO Wednesday
Good morning.
6-8 Billion Dollar POMO Injection Today.
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7:00 - MBA Mortgage Index (+5%)
8:30 - Housing Starts/Building Permits
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AAPL - PT Lifted from $395 to $425 @ Oppenheimer. Outperform
AAPL - PT Lifted from $415 to $438 @ Kaufman Bros. Buy
CHRW - C.H. Robinson initiated with a Neutral at Sterne Agee. Target $76
GOOG - ISI Group Initiates with a Hold. Target $675
NE - Noble Corporation downgraded to Hold from Buy at Deutsche Bank citing the company's declining jackup exposure and construction risk. The firm dropped its target for shares to $40 from $43 and prefers Buy-rated Rowan Companies (RDC) and Ensco (ESV).
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"Police are looking for a man in Phoenix who robbed a bank and told the teller he wanted the money in twenties, forties and sixties. Authorities believe he could be one of President Obama's economic advisers." - Jay Leno
IBM and Apple leading the way
http://www.bloomberg.com/news/2011-01-19/ibm-earni...
IBM as well as Apple have surprised with stronger than expected earning's growth. A few more of these and investor confidence will build.
Re: IBM and Apple leading the way
Even the regional banks are performing well. The index (KRX) is charging for a test of the 2010 high at 60,56. KRX is up 23% since December 1 2010.
No position
Seeking Alpha wants to pay its bloggers
which is generating a fair bit of discussion on the net. This is an issue raised here, especially as it pertains to the idiots spewing out rubbish on the maintstream media. Some links to follow up on. One contributor to Seeking Alpha actually questions the benefit of doing this:
http://blogs.reuters.com/felix-salmon/2011/01/16/w...
Some people are under the impression that blogging would reward them, but it doesn't cough up the monetary benefits they would like:
http://www.chicagobusiness.com/article/20110115/IS...
As Ritholz remarks in his response to this affair, "People are often surprised to learn that I write for me". I know Bill has said likewise. It certainly has helped me put into place with some honesty a rough framework for a trading system. I recommend the reading here for those who are thinking about doing likewise themselves, as part of their trading development.
http://www.ritholtz.com/blog/2011/01/why-blog/
Some food for thought during the quiet part of the session.
Zimbabwe inflation 4.2% (12M to November)
http://www.voanews.com/zimbabwe/news/Price-Hikes-P...
UK 3,7% (December)
China 5,1% (November)
India 8,3% (November)
Cara 100 Update
AAPL - PT Lifted from $395 to $425 @ RBC. Outperform.
AAPL - PT Lifted from $405 to $430 @ Wedbush. Outperform
AAPL - PT Lifted from $400 to $420 @ Stifel Nicolaus. Buy
AAPL - PT Lifted from $450 to $550 @ Ticonderoga. Buy
BA - PT Lifted from $86 to $88 @ Wedbush. Outperform
IBM - PT Lifted from $170 to $177 @ Stifel Nicolaus. Buy
IBM - PT Lifted from $165 to $175 @ Collins Stewart. Buy
LLTC - Linear Technology downgraded to Neutral from Positive at Susquehanna citing lack of catalysts and valuation. Price target is $34.
MCD - Dow member McDonald’s is added to US Focus List at Credit Suisse. Its price target on the Outperform rated stock is $87.
MSFT - PT Lowered from $40 to $37 @ Stifel Nicolaus. Buy
End of Rare Earth Mania
As Vad pointed out about 3 weeks ago, look where these stocks will be in a month. I grabbed 5% short of CHGS over the weekend as I was informed previously that this is one of the pretenders to the rare earth sector.
You certainly don't need to call the top. Just taking a slice off the middle as it falls back from a lower high is enough. I shorted it on anticipation of gap closure. Although I am too impatient to hold it that long, the idea was correct and 5% is enough to drop it.
Actually, one of the first questions I was asked of John Lee upon joining his group (I remained only 1 month for positive reasons) was what would you do if you only had a sub-$25k account and couldn't daytrade it? Then he went and upped the ante by asking "what would you do if you could only make one trade a day?"
I realise now that the one trade friday should have been putting more chips down on SLW, not spreading myself out with short ideas. Still long @ 31.69. If I'd used more capital I could be partialling out and taking profit right now.
I only stayed with John one month cause he knuckled out in my mind what I needed to do this year. I realised I didn't need subscriptions anymore - I needed to flesh out a trading plan, which is 2011 in a nutshell for me.
Moody on Portugal
(PO) Moody's comments that Portugal sovereign rating actions would not be determined by 2011 GDP growth outlook
- Portugal needs a sustainable funding rate
- Moody's will not comment on whether Portugal should request a bailout but will be considered in its review of the country; Up to Portugal to decde for itself on the aid issue
CGR Holes Report
January 19, 2011
Claude Resources Inc. (TSX-CRJ; NYSE Amex-CGR) (“Claude”) is pleased to announce step-out and infill drill intercepts from its 2010 exploration program at the 13,900 hectare Amisk Gold Project in northeastern Saskatchewan, Canada. The Amisk Gold Project.
What I really liked was the 3D model of what they believe is in the ground. Looks to be at depths of 4,000 feet in places. Also I have read some of claude's resources are close to Rubicon Minerals Corporation digs.
3D:
http://www.clauderesources.com/videos/video.html
Home:
http://www.clauderesources.com/
Gold charts show we have once again climbed to where the shorting free fall stopped on Jan 4 around 1375, hope they forget to take it down before the open today.
http://www.goldprice.org/live-gold-price.html
Re: End of Rare Earth Mania
Les,
just keep in mind that manias often develop in waves. There are weak ones that whittle and die quickly, one day or week wonders. Then there are those that seem to be over, then turn around and make another wave. Don't get caught in secondary surge being short - such complacency is not unlike premature shorting into strong uptrend, can be an account killer.
New high is a stop for short trade, no second-guessing, no ifs and buts. If it's a rinse - oh well, hunt for another entry. Can always re-enter, can never re-exit.
Re: End of Rare Earth Mania
yeh always good advice and admittedly ML or MS's China growth play posted yesterday - which included rare earth - had me looking over my shoulder and happy to cover.
----------------------------------------
Mosaic is on the market and not happy this morning:
http://finance.yahoo.com/news/Cargill-to-spin-off-...
Cara 100 Update (Final)
MRK - rated new Outperform at Wells Fargo. Company has a solid pipeline and a shallow patent cliff.
PFE - rated new Outperform at Wells Fargo. The company's pipeline is at an inflection point and management is returning cash to shareholders.
(GE) Germany govt advisor:
(GE) Germany govt advisor: Greece is unable to fully repay its debt - Handelsblatt
BCON
Added another 20k baz - I like the story - could be one to set back for the long haul.
sold SLW + 1.43 @ 33.15
profit taking in the market this morning. TCK selling off hard. waiting and watching the SPY.
edit. some issues with coal production this Q with TCK. Hard sell off for such an issue. JMO. watching here
Re: BCON
yes, its a long haul... no need to hurry. sounds crazy, but $ 1.50 could be possible a year out... this area was a draw years ago.. need to see about NASDAQ req. on $ 1.00 minimum, as rev/split could always happen ( re: astm ) .. still watching ' cpst '.. if pulls back to $ 1, will make decision.. they ( cpst ) can go in many directions with the turbines... best to you, Earl....
Austrialian state cuts coal estimates due to flood
SAN FRANCISCO (MarketWatch) -- The government of Queensland, Australia, has cut its coking-coal production forecast 10.5% due to the floods assailing the state. Production is seen at 177 millon tons for the 12 months to June, analysts at Commerzbank said in a note to clients Wednesday. Prices are likely to rise further and put upward pressure on steel prices "as higher raw-material costs on the back of robust demand can be passed on to end consumers at the moment," they added. Queensland accounts for 90% of Australia's coking coal production. Prices were being quoted around $350 a ton, compared to an average of $280 a ton in the previous week.
Top 10 stocks for 2011
Since publishers are giving us their lists, why don't we put together a list of our own? Care to add one or several? Somebody could compile the list and keep it current for the next few days. Thx.
Market Drop imminent
Interesting article on imminent drop in zero hedge, who as you know has been very bearish and wrong these past months. However, this guy does has some high credentials and called the 2009 market turn. The only stock I've really liked is SPIL and it has'nt spilled yet for me, ha. Good luck all.
http://www.zerohedge.com/article/tom-demark-11-dro...
Re: FT: Cargill agrees $24bn spin-off of Mosaic
To the CEO of Mosaic who is eager to demonstrate such hubris I reply " And the world is awash with fertilizer ".
Re: FT: Cargill agrees $24bn spin-off of Mosaic
Quite.
stepping
into the snake pit... cga
SPY loss of support
had me suspicious and standing back as normal support levels were quickly breached. Some hints were being dropped to me by other market participants as well. ToddinFL noted loss of support in muni bonds this morn. Vad was noting the success of short trades on Friday or Monday (I forget which). How far this falls back is anyone's guess.
edit: just noted Bill's remarks in the morning report. cool. thanks.
Bank of Canada Monetary Policy Report
10:30:29
(CA) Bank of Canada Monetary Policy Report: Sees Q4 GDP at 2.3% v 2.6% prior forecast; Q1 2011 GDP 2.5% from 2.6% prior forecast
- Guides Q1 core CPI 1.4%, Q2 CPI 1.6%, Q3 1.7%
- Strong CAD has hurt the competitiveness of Canada
- Inflation risks are balanced
- Guides 2011 GDP at 3.3% from 2.3% prior forecast
- Calls current stimulus in place 'considerable' and exceptional
- Canadian household debt expected to stay near its all time highs; spending expected to slow
- Current forecasts assume that BOC will withdraw some stimulus during the period to 2012
- Recent mortgage rules designed to move household spending in a better direction
- BoC' Carney: Assumptions for the USD/CAD at parity do not imply a currency forecast, but an assumption for sake of other forecasts; calls deficit in the current account 'significant'
Re: Market Drop imminent
Tom DeMark is someone to give serious consideration to. His work has great in fluence
Re: Market Drop imminent
Thanks for posting.
The market will drop, it cannot levitate forever ignoring laws of physics.
The question is when. I would prefer today and definitively before the options expiry.
Looks like my venture into puts on USO and JJC yesterday will be fruitful. The DBA is so-so, but goes in the right direction.
Re: (GE) Germany govt advisor:
This is pointless unless they intend to apply a haircut to the debt they are planning to retire. JMO.
Re: Market Drop imminent
There will be serious movement when the USD finally breaks out (up or down) of the pennant shown in the enclosed chart. The bears have the control for now with the USD below MA200, MA50 and support of 79.
Re: Market Drop imminent
Tom Demark's tech analysis is moot because he fails to account for gov't intervention in the form of POMO. When POMO music stops, which will come in the form of NO MORE CONFIDENCE in the USD, the S&P 500 will drop more than 10%, way more. But the intervention music PLAYS ON for now.
Wikipedia the words 'Banana Trade' and learn some history. The Fed is messin' with the Banana Trade and leading to the largest banana inflation you will have ever seen, my friend.
Stay thirsty.
Re: Top 10 stocks for 2011
Hello Bill , I TAKE YOUR CHALLENGE I have had very good returns with Fortuna Silver Mines FVITF its trading at $4.30 . I believe it will pass $6.00. Its a reasonably low priced stock retuning a healthy percentage gain. I have owned since $2.00,plus bought and sold on occasion . Bob
Re: Market Drop imminent
You seem to be saying it is different this time. I don't believe it is different, just the same old bait and switch by the govt. and banksters. We've had two major crashes in the last 11 years primarily due to the FED and I expect another one down the road. They are just kicking the pending crash down the road. It may be 2012-2014 before we get one, but it will come. All I'm saying is current market volume and price action says it is time to be defensive.
Re: Top 10 stocks for 2011
Hi All - How about one of my favorites - BEXP. They just keep drilling and completing with multiple frac stimulations production wells of 2,000 to 3,500 barrels/day. Currently Brigham has 7 drill rigs and two frac crews working around the clock in the Bakken play. Happy Trading
Re: Market Drop imminent
jimddavis -
"You seem to be saying it is different this time."
Nope. It's the same throughout history with fiat currencies and runaway debt going back to the Romans. How is it different except that tech analysis won't work with Fed intervention via POMO. I agree, however, that it is time to be defensive as volatility is on the march. The song remains the same.
Cheers.
Re: BCON
Hi Baz,
I still own 5k ASTM, no CPST - I added a column on my spreadsheet to include 3yr/1wk market sentiment; sums the two ratings. Later I can back-test it to see how I did. I’m using it as a cull list. Were talking basic development – I’ll add things that people may suggest. http://tinyurl.com/4ezrsod
Regarding BCON - Popular Mechanics has a top 10 new technologies http://www.popularmechanics.com/technol ...
Regards,
Earl
Re: Market Drop imminent
Another thing is the POMO intervention is a common knowledge. Common knowledge is not tradeable IMHO. The huge stock gains August-November 10 were in part due to frontloading of the QE2. The gains Nov to now is in part dumb money jumping on the bandwagon. Yes, it can last a bit longer as it is difficult to predict social behaviors precisely, but in max couple of mounts there will be a payback. Furthermore, if oil spikes like 2008 (due to excess liquidity and speculation), we will have a major financial crash again.
Do you have a link to that "banana trade"? Can't find it on wiki. Thanks!
Re: Market Drop imminent
"Tech analysis won't work with FED intervention", I question that Dr. Strangelove, because I don't see the FED controlling the long bond and commodity markets for very well. Thanks for your insight. This CARA website is one of few decent and civilized blogs.
Re: Top 10 stocks for 2011
Okay, Bill, here's two for the show ...
CRESY. South American agro play with 1.2 million acres of prime time cropland mostly in Brazil and Argentina with HQ in Argentina as well as a slew of shopping centers in Argentina. It's heavily levered as a real estate company but produces soft commodities. Sam Zell and his REITs only wish they had it so good.
SQM. Chilian producer of organic fertilizer, iodine for tech and medical applications, and the purest lithium on the planet for batteries. Exports across the globe with POT as its major shareholder makes it a prime time takeover target in 2011. With the exception of earthquakes, Chile is the most stable sovereign in South America with huge navy and nat resources and new pro-capitalists president (owns airline).
Of course, buy with local currencies on the Santiago and Buenos Aires Stock Exchanges to hedge the USD mess.
Loannetter...did you get moved to Texas yet?
Houston and Dallas housing permits are some of the strongest in the US.
http://www.reedconstructiondata.com/construction-f...
Re: BCON
thanks earl. A more direct link to BCON's technology was buried in the pages:
http://www.popularmechanics.com/science/energy/eff...
long 1k today.
Re: Top 10 stocks for 2011
It's a low priced stock, but I believe RAS will be one of the top gainers in 2011. They recently announced a dividend for the first time in over 2 years, are trading at 0.30 times book value, and are in the sweet spot in real estate (apartment rentals, which should do well while housing continues to flounder for the next year or two).
Re: Market Drop imminent
jimddavis -
"I question that Dr. Strangelove, because I don't see the FED controlling the long bond and commodity markets for very well."
Under Clinton, public debt was moved to short term duration which Bernanke can hold to zero forever and thereby foolishly attempt to save the nation from default as he buys up the long bond without a MARKET. Go to GATA.org to learn about Fed manipulation of commodity markets through gold and silver supression via bullion banks.
Tech analysis gets skewed by Ben's scullduggery in the short and medium term.
...
also, thank you for the research, Earl... lots being pieced together today, vs. yesterday.. seems to be give and take. couple more days like this, and something has to give.
Re: Market Drop imminent
One could argue that the POMO injections are just creating the ILLUSION that things are going up, but as long as the accounts are measured in dollars, it sure does look that way to anyone looking at their account balance or profit.
I expect it will mean those dollars are worth less, long term, but I see almost zero possibility that the Fed will ever be able to remove the stimulus within the next 20 years, ie as long as the baby boomers are alive, because whenever its withdrawn, the music stops, and I think everything collapses at that point, which IS, LOL the reason I don't expect to live to see it removed.
Re: Market Drop imminent
jack black -
"Do you have a link to that 'banana trade'? Can't find it on wiki. Thanks!"
The banana trade is often used as an example of how trade wars emerge in economics school. It simplistically goes that if you intervene in either the supply or demand of the banana market, you will suffer unimaginable UNINTENDED CONSEQUENCES. It is often referred to The Rule of Unintended Consequences and is the economic version of Murphy's Law. The banana trade is a key trade in Central America and formerly in the West Indies and the trade is, in fact, so important to some small nations like Costa Rica that it has produced the terms 'banana republic' and 'going bananas' in our daily lexicon to give you only a few examples. As an aside, I'm going to Costa Rica in June to witness the banana trade first hand! Hooray for me.
Here's how it goes wrong: http://en.wikipedia.org/wiki/Banana_Wars
Here's how it gets started: http://en.wikipedia.org/wiki/United_Fruit_Company
Cheers.
Re: BCON
Thank you Les - the more I read the more I like. I started with another company very simular out of Austin Texas ACPW ACTIVE PWR INC but when Baz mentioned this one I took a close look and jumped with both feet LOL - take care,
Earl
silver
Silver is looking less happy than gold now. Not a healthy sign in my book.
Re: BCON
Thanks to both Earl and Les , thats a very interesting invention . Thats the kind of innovation we need. Also long 1k , I want to watch this . Bob .
Re: silver
davefairtex -
"Silver is looking less happy than gold now. Not a healthy sign in my book."
It looks like the financial reform bill's UNINTENDED CONSEQUENCE to restrict position limits in the commodities through the CFTC mandate with a vote coming tomorrow (?) will have the effect of moving these markets offshore. At least that's what Armstrong thinks in his latest commentary. Ye olde story of too little gov't regulatory action too late. I know that JPMorgan is setting up vaults and bullion ETFs in far flung places like Singapore. This equals a future of 'paper' thin trading on the Comex and greater volatility. It may even make it easier to manipulate the metals in NY or certainly in .... Singapore. Hmmmm.
Silver ratio is moving toward the mean with bullion in tow. All is well until it's not.
Lightening here.
TCK via RBC
CP/WTE: Teck Issues 2011 Coal Guidance; Q1/11 Coal Production Expected to be Impacted by Several Issues
Trading Indicator : none
Posted by Walter Spracklin on Wednesday, January 19 2011, 1:34 PM ET
Teck Resources reported on several issues that the company expects to affect its coal sales during the first quarter of 2011.
1. Weather: Teck stated that weather conditions in southeast British Columbia, which started in December, are expected to negatively impact production capacity in Q1/11. Weather is also causing delays in re-commissioning of the coal dryer at the Greenhills Mine and shipping of wet coal.
2. CP Rail movements impacted by avalanche conditions: CP issued notice of force majeure on January 17th since avalanche conditions in and around the Rogers Pass areas (southeast B.C.) are impacting rail movement.
3. Westshore mechanical failure: As we’ve reported previously (see our Westshore Sparc issued on January 13: WTE: Gearbox Failure at One of the Berths May Impact Operations up to 2 Weeks; Overall Impact Minimal), Westshore Terminals announced a gearbox failure on one of the Berths at the terminal which is expected by the company to reduce its coal handling capacity at the port for about two weeks.
As a result, Teck expects first quarter coal sales in the range of 5.0 to 5.5MMt, compared to 5.25MMt in Q1/10. Planned sales for calendar 2011 are in the range of 24.5 to 25.5MMt. This guidance is based on no production interruption from labour issues, and a reasonably prompt resumption of normal levels of rail service.
Implication: minor impact to CP and as expected for WTE.
According to our Mining team, Teck had not previously given explicit guidance for 2011, but slides in its investor presentations showing its 5-year production forecast by mine suggested a previous 2011 production expectation of 26 million tonnes.
Therefore, the overall impact in terms of coal volumes appears to be relatively minor for now.
Re: Top 10 stocks for 2011
SLW has got to be up there in the top 10. Fundamentally and technically it is very strong and sitting on a proverbial gold mine of wealth.
I speak my own small book. I will follow this both intraday and in an hourly time frame to (try to) profit from its volatility.
SPY previous moving average support here
"aggressive punters, place your long bets here". I'm still watching. See how it is looking tomorrow.
Re: Market Drop imminent
Dr. Strangelove,
Every year, especially early, there are a bunch of predictions. The ones we hear the most about are the ones (or parts thereof) which at some later date look good. Most are forgotten and come back to us as, "I can't recall who said it, but..."
What always amazes me is the magazines and newsletters keep predicting and people keep subscribing.
We often hear people debunking the idea that, "It's different this time." I am inclined to think it is different every time — there are simply too many variables and whenever something happens more than once people react and the reaction MAKES it different.
POMO is big time different — but I'd only be guessing to say what the longer term effect will be — or how long it will take.
Market Drop imminent
Market drop imminent title looks like it's changing to market dropped. Ha, I'm a bit of a technical analyst and I see major index trendline breaks shaping up on all timeframes of weekly, daily and hourly charts.
Miners getting whacked!
Ouch! UXG trading 6.88 as I type.
Miners first off the dance floor?
Re: Market Drop imminent
Major trendline breaks? Dow is down 25 points, NDX 30.. let's keep thing in perspective, it's not even a solid pullback yet.
Re: Bank of Canada Monetary Policy Report
At the risk of taking this item off on a tangent, the Canadian dollar above par with the USD seems to have been a catalyst for more attention to Canadian markets by US companies. As the Cdn$ strengthened over recent years, the fear was about reducing our exports to the US. Now, it's about companies like Target coming in and taking business away from some Canadian retailers. I for one will be looking at getting out of the likes of Shoppers Drug Mart and other consumer goods companies.
Market Drop imminnent
Yes Vad, I'm keeping this drop in perspective. However, if you look at various technical metrics such as breath today, it is awful. Naz, had 81% declines and only 17% up. When the soldiers are in retreat, the Generals won't be far behind. Sometime, this buy the dip will turn to sell the blip, but we are not there yet.
Re: Miners getting whacked!
It's a buying opp for many. depends on every trader's timeline i guess?
I am moving some of my FDIC insured stash slowly into miners on dips. No rush. I too believe in the Fed.
Re: Miners getting whacked!
picked some up myself...
Re: Market Drop imminnent
Well, if we are not there yet, then there is no major trendline break yet...
See, I can't help but wonder how many people have been hurt by non-stop string of "imminent reversal" predictions, thoroughly explained and looking so brilliant in theory. How many "unprecedented insider selling" warnings have we seen over last say 6 month? How many Hindenburg Omens were heralded? Anyone taking this stuff seriously and following it with actual positions would have been bankrupted many times over already. Breadth is awful? Sure it is. But haven't we seen quite a few other indicators turning bearish in a course of those same 6 months, only to see market pausing and continuing higher? Why is this one and this time different?
Sure thing, sometime in the future market will reverse and drop. But let's remember that there are many people reading what we type here, and let's be a bit more responsible with our calls. I am really wary of any post sounding overly confident about author's predictions. We haven't seen too many experts being right about too many things over last few years, right? No one knows the future - let's be careful with strong opinions and strong sounding words like "major break, imminent drop" and so on.
Re: Market Drop imminnent
I hear you VAD and respect your opinion and comments. As a technical analyst, I look at price and trend, inter-market relationships, investor sentiment, volatility, breath and seasonality. In my opinion, those metrics are making a strong case a short term correction of at least 5 percent is coming soon. As a note, I've been somewhat bullish for the past 9 months and just now turning bearish.
Re: Market Drop imminnent
Vad, I agree with those sentiments. Astute traders watch closely the price & volume action of the market & pay less attention to the chatter.
What's the old adage that is sometimes attributed to Benjamin Franklin ?
"Believe none of what you hear and half of what you see."
Re: Market Drop imminent?
LOL! Vad VS Chicken Little! Is the sky falling?
Geez, we have one 'down' day with waves of selling on low volume being absorbed one after another by buyers and it's already the end of the world?
We're *supposed* to have down days! That's what makes for buying opportunities in a trending market. ONE DAY does NOT a trend make.
I have no idea what breath has to do with it, or breadth either, but as long as I can still fog a mirror I'm good with breath.
Now if we get a few days like this and the buyers stop absorbing the sellers goods and the moving averages cross over on the indices and we actually reverse the uptrend and start a down trend, then all the hand wringing, mind reading, fortune telling, tarot card sessions, predictions and chicken gut stirring can then begin to foretell when the selling stops and the buying begins again. I can hardly wait to tune that out! In the meantime we're above the 10 day MA on all indices!
AAMOF, we haven't even made a slight curve in the 10 DMA!
So far however, we touched the 10 day MA on the daily S&P chart and closed above it at 1280.
The Q's touched the 10 day (OMG!!!) and closed above it.
The DJIA didn't even get to the 10 day MA and it closed down a whopping 12.64 pts. But somehow the sky is falling and the big one is coming?
If you are a day trader (or shorter) with a holding period that lasts in between the heartbeats of a mouse, then maybe there is a point. Anyone that is a trend trader, a swing trader or that can draw an up or down arrow on a daily chart is not going to be persuaded by a day like today and let's be very clear....
NOBODY KNOWS WHAT IS GOING TO HAPPEN IN THE FUTURE. NOBODY! It is impossible, so it would be much better for everyone to simply stop making predictions and develop a trading plan that factors in whatever can happen, up, down or sideways.
The trend is still up. Until that changes then the trend is your friend.
So far this is a *potential* buying opportunity. It *MAY* turn into a shorting opportunity, but there is no way to know that from today.
We are still above short term support and we are still above longer term support. So far it isn't the sky, it's an acorn.
Vad makes an excellent point....or two. It's probably a good idea to listen to him. I suspect Patrick will also have something interesting to write for the closing report.
Change In The Weather?
http://tinyurl.com/4bdfvmx
I have no clue, but I'm protecting my YTD gains (4% in the buy-and-hold half on a 3-day trade in FSELX last week).
Nothing complicated about my decision:
(a) I opened INTC/CSCO in the trading half January 11 at an average of 21/20.88 with the intention of holding the stocks in place of cash. I opted to close the positions at an average of 20.95/20.77 after hours (within the first 5 minutes of close). Psychologically, all I'm looking at right now is 'missed opportunity' (ie, the post-earnings spike in INTC)- I'm not willing to take a loss on the positions.
(b) I could wait until later this week for confirmation of a trend reversal, but INTC/CSCO might easily drop another 2-3%, more or less wiping out the gains in the other half of the portfolio. The odds of a significant pullback rose markedly today, IMO. Looking at the price drops in stocks like AA/AXP/BAC/CSCO/GE, I can sense caution replacing complacency.
(c) Unlike FSELX, I am able to reopen INTC/CSCO at any time. If the rally resumes tomorrow, I can probably find intraday reentry points.
100% cash. At least, until tomorrow.
See the Post-close Report
In the commentary at the top of the page.
.....
Hi, Earl.. from conversations with Tobyt, I know he was in ' acpw ' around $ 1.00 last year... don't know if he is still there- we haven't talked about it. He's out of town now, but maybe he can answer when he gets back. Good company.
TLT: descending triangle
While we're all waiting for the equity market to tip over, I can't help but notice that TLT has made its fourth lower high a few weeks back, and currently appears to be in a descending triangle pattern with the most recent low at 90. About a month ago without any ceremony the 50 dma crossed the 200 DMA heading down. I think they call that a "death cross", right?
Anyhow, bonds are probably too boring for folks here, but if you're looking for a market that isn't looking so healthy, perhaps look at bonds?
Now of course this post might mark the cycle bottom in 20 year treasuries, but I'm just saying... :)
consumer metrics examined
After GDP prints have failed to track Consumer Metrics analysis, they attempted to figure out why. Current post provides an explanation:
"...the demographics of the consumers most likely to buy on-line were the same as those households most severely impacted by the recession. Unwittingly, some of the previously identified sampling biases in our data collection methodologies turned out to be much more significant than we might have suspected. Simply put, young and highly educated members of generations "X" and "Y" were particularly vulnerable to the hallmarks of this recession: entry level job losses and vanishing home equity."
http://www.consumerindexes.com
Thank God I didn't trade based on their information...ok, well maybe I did, at least for a while!
Consumer Metrics shows that the consumers they track are off -4.5% from January 2010. No recovery for them.
Re: Top 10 stocks for 2011
I'll talk my own book on a company I mentioned last summer when when 'Ivan' cut off wheat exports. It's a mini Cargill/Bunge headquartered in Canada, Viterra; VT.TO.
It was called Saskatchewan Wheat Pool back in olden days when they were primarily a rape seed crusher.
The management has evolved into a bunch of top notch businessmen and they have really cleaned it up over the past several years. The have and continue to make infill acquisitions and now have a more international footprint.
I've traded the stock from time to time on past Ag cycles but it may now be a legit investment vehicle. Time will tell but a turnaround in a hot sector will usually lever your returns. I would also recommend Bunge. Both have run but the quarter to quarter results out of the Ag sector are at best unpredictable. Viterra reported a 'C4' quarter and popped for better than 5% today. They and Bunge have been known to put up air balls from time to time so pullbacks can be violent as well but smoothed, earnings should be in secular uptrends for many more years.
The rate of increase in world population peaked long ago but the shift in diets to more protein is has only just begun. One need only look at the average size of our Nippon brothers over the last 60 years and multiply that by 30 when Chindia spends our dollars to drive up our food prices.
I monitor the price of rough rice. It is primarily a people food. If and when it goes parabolic in price, the demand/price for the other grains will do a moon shoot!
For those of us that sit on the three legged stool of energy, ag, and metals (OK, I'll throw in a carved and gilded barbaric metallic fourth leg), Viterra and Bunge will probably do quite well even if and when the demand for industrial 'stuff' peaks.
I guess I've always considered arable land to be the highest and noblest of assets. Without fecundent mother earth, none can survive and prosper.
Just an observation. I own both, FD.
Re: Top 10 stocks for 2011
Hi...my pick for the top 10 will be Husky energy (HSE-TSX, 26.27 C$). Hong Kong billionaire Li Ka-Shing controls about 70% of the company. Pays 1.2 dollars dividend which is about 4.6% yield. If oil does well this year then I expect Husky to follow suite. From a technical perspective it looks like the stock might have found a bottom late August 2010. However, despite large recent capital expenditures the company was not able to show for it in terms of production growth which caused investors to doubt the management and its vision for the company.
FD no position
Blog update
...to keep abreast of what I'm doing. The biggest move is cutting back PMV.V to 1/3. Twiggs' latest:
http://www.incrediblecharts.com/tradingdiary/2011-...
... leaves me cautious on gold and silver. $ down but bearish divergences in gold and silver, PMV.V offering a weak sell signal based on stochastics & SPY back to previous support suggests prudence. Even with new entries in GEO.V, TGB, BCON and a little extra LEX.TO I'm down to a 25% portfolio weighting.
Twiggs' warns of a potential loss of 28 support in silver, so that might convince me to short SLW, but the charts right now suggest I watch and wait.
My intraday trading continues to suck, so I want to put more time and effort into that. It's all about entries and exits. SLW is showing me what I am doing right in a larger time frame, but its not translating into better entries in the smaller 1/3 minute time frame.
FFIV incidently was the setup I was trading as it showed up on Vad's super duper scanner I've just set up. Nice chart, it's what I like to short but...
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For those who like a funky beat you might appreciate the talent of this dj, who I was enjoying in the background during market time yesterday:
http://www.youtube.com/watch?v=qciVXUHTN10
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Siberia just returned to Switzerland with a vengeance. Ugh it's cold.
Re: Blog update
Lower highs and lower lows in silver don't bode well. I'm still debating what to do.
Re: Market Drop imminent?
Craig,
"...mind reading, fortune telling, tarot card sessions, predictions and chicken gut stirring can then begin to foretell when the selling stops and the buying begins again. I can hardly wait to tune that out! In the meantime we're above the 10 day MA on all indices!"
As a swing trader whose watching to see if we get another shot at longer Treasuries, "tuning out" is something I'm trying to do.
After over 40 years investing (seldom short term equities) I still find the waiting to be difficult. My own beliefs of what will happen are my biggest danger and when I see someone here put them into words the temptation to act is strong. Emotions are OK in concerns about our county's direction, but suicidal in making investment decisions.
I have long since set aside market "predictions" from anyone, but those who match my thoughts can mean disaster unless a clear change is actually visible.
There are even more variables today than usual and far fewer rules to count on — making "it's different this time" seem more likely to me.
My view: I totally disapprove of the Fed, POMO, the suspension of FASB accounting, TARP, QE2, but don't think anyone (including Bernanke) can truly know what will come of it all.