CTA Trading Desk Morning Report
[7:00am ET] Good morning.
Since the markets are again roiled over the Euro Zone Debt Crisis, this interactive graphic [thanks Mark H] can help focus our discussion today and over the weekend.
http://graphics.thomsonreuters.com/F/09/EUROZONE_REPORT2.html
From the phone calls and e-mails I have received this week from investment professionals, it is obvious that (i) some of the participants in the blog are managing far more capital than me, which makes me proud of the power of this community, and (ii) these people are increasingly concerned that Humungous Bank & Broker (HB&B) have pushed the politicians and central banks to the edge of a 2008-type crash in their demands that public money be given to bail them out of their insolvency predicament.
It seems there is no end to the nonsense being perpetrated on capital markets today, and that JP Morgan’s Jamie Dimon is centrally involved, demanding a resolution that keeps HB&B in control of the world’s financial system and its money flows. Control the money and you have the absolute power to control the world.
As I see it, though they have different objectives and probably use different tactics, Dimon and friends operate just like the mob families. Predator and prey.
The good news is that most people now see through the curtain. Many were stunned when I first pointed out in this blog how insidious the Goldman Sachs family had become after infiltrating so many central banks and key government positions in the world. They were less surprised when I next pointed to the “Paulson Folly” as Henry Paulson, at the time the Goldman Sachs family head and acknowledged chief of the HB&B organization, was parachuted into the White House to save the US Treasury and ended up robbing it blind for the benefit of his friends. Turn the page now to Paulson successor Dimon.
Finally, the American people are becoming restless. They appear to be saying, enough is enough.
I think this war over the control of money (and the people) is going to get ugly. Mitt Romney who was the founder of the Wall Street acquisitor powerhouse Bain Capital, now appears to be the latest Obama-type puppet being prepared for the world stage as the instrument of HB&B power. Bain Capital btw was the company that bid to acquire the entire National Hockey League. Control is their M.O. and so Romney appears to fit right in as Dimon’s boy.
I’m surprised they haven’t reached into Canada’s Brookfield/Brascan organization because that too would be a good fit.
In the market this morning, the futures appear to be extremely volatile again, but perhaps on the rise. How long this bullish wavelet continues is dependent on the tide and the moon I suppose, and maybe the continued weakness in the Dollar and Yen that crept in overnight.
In Europe this morning, the Banks are in the green – Dimon must be getting what he wants – while the Miners and Oilers are a tad weaker except for the Goldminers, which are presently green, which happens when the Bankers are allowed to print more money, and the Consumers are a bit mixed but taking on a brighter shade of green as the minutes tick by.
Tomorrow morning, in the very early hours I’ll be on my way to the airport heading to Whistler. With a 7:00am ET departure, I will not be allowed to blog from the tarmac, unfortunately. Also, I decided not to do a WIR this weekend for anybody except the conference attendees, and depending on my state of alertness at 4:00am PT (7:00am ET) on Monday, I may not return to the blog until later that day.
But, I know that with the help of so many others there will be lots of discussion here, so have at it.
Have a good 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 | 1,981.10 |
 10.80 (0.54%) |
Components, Chart, More |
| ^BFX | BEL-20 | 2,140.83 |
 1.23 (0.06%) |
Components, Chart, More |
| ^FCHI | CAC 40 | 3,002.45 |
6.83 (0.23%) |
Components, Chart, More |
| ^GDAXI | DAX | 5,576.29 |
2.13 (0.04%) |
Components, Chart, More |
| ^AEX | AEX General | 279.89 |
1.58 (0.57%) |
Components, Chart, More |
| ^OSEAX | OSE All Share | 395.62 |
0.80 (0.20%) |
Components, Chart, More |
| ^OMXSPI | Stockholm General | 285.00 |
2.54 (0.90%) |
Components, Chart, More |
| ^SSMI | Swiss Market | 5,576.98 |
25.33 (0.46%) |
Components, Chart, More |
| ^FTSE | FTSE 100 | 5,194.19 |
23.44 (0.45%) |
Components, Chart, More |
| FPXAA.PR | PX Index | 939.00 |
4.60 (0.49%) |
Chart, More |
| ESI500000000.MA | IGBM | 864.12 |
8.45 (0.99%) |
Components, Chart, More |
| MICEXINDEXCF.ME | MICEX Index | 1,389.91 |
12.04 (0.87%) |
Chart, More |
| GD.AT | Athex Composite Share Price Index | 799.41 |
10.53 (1.30%) |
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
Comments
Econoday Today
RSI Summary as of EOD 2011-09-28
Nokia to axe 3,500 jobs and close factory
Nokia will axe 3,500 jobs and close a manufacturing plant in Romania, as the Finnish handset maker continued its evolution to cope with the growing impact of smartphones on its markets.
Nokia, the world’s largest maker of mobile phones by volume, said the closure of the factory in Cluj would result in 2,200 job losses, with a further 1,300 to be axed at its Location and Commerce division, which includes Navteq, the digital mapping group.
Manufacturing operations at Nokia’s Cluj factory, which makes low-end feature phones rather than smartphones, will be moved to Asia where feature phones are predominantly used.
FULL STORY:
http://on.ft.com/qWD5p7
Germany approves EFSF plan
I guess there wasn't much fight in this dog.
http://on.wsj.com/oel3Lc
To Save Banks, Spain, Italy, France Extend Short-Selling ban
good luck fellas. I can imagine another swan dive before things improve.
http://www.forbes.com/sites/afontevecchia/2011/09/...
German vote fails to lift banks in convincing manner
Note the attached yahoo list of Euro banks I watch and see their miniature graphs circled. The sugar high has been lost and the likes of Deutsche Bank are but 1% higher, this after DBK.DE lost near 4% yesterday. Not exactly promising for the US session.
As always we shall see.
An Impending 2008 magnitude bailout
"these people are increasingly concerned that Humungous Bank & Broker (HB&B) have pushed the politicians and central banks to the edge of a 2008-type crash in their demands that public money be given to bail them out of their insolvency predicament."
Bill,
I agree that a bailout of such magnitude is being set up. I can almost hear the folks at HB&B question whether the insolvency of their banks will reduce or eliminate their glutenous bonuses and being reassured that it doesn't have to happen that way if another bailout can be manipulated.
The difference is that in 2008 the public was naive and unprepared to act. Today it is common knowledge that the 2008 bailouts were blatant theft and that the politicians who voted for the bailouts betrayed the people they were elected to represent.
In 2008 people thought that their representatives would reject the bailouts because of the public's overwhelming opposition. In 2008 we were surprised that the bailouts were passed over our objections. Since 2008 the public has openly expressed its disapproval of the fact that the crooks have government protection.
Now in 2011 there is too much discontent with the last bailout and anger at all who were involved in it. The market may think Germany's approval of the EFSF plan is a good thing. The German people certainly do not. The Greek people are also angry as they lose their incomes, jobs, and homes to the greedy bankers. The "democratic" governments were only barely able to restraining the public's anger over the 2008 bailouts. I am filled with trepidation as the 2011-2012 bailouts approach. As economic nationalism grows can right wing ultra nationalism in Europe be far behind?
Did you say...
tide or moon? ;-)
Cara 100 Ratings Changes For Thursday
Good morning.
08:30 Initial(391K)/Continuing(3729K)Claims
08:30 GDP - Third Estimate (1.3%)
08:30 GDP Deflator - Third Estimate (2.5%)
10:00 Pending Home Sales
------
PAYX - PT Lowered from $34 to $30 @ RBC. Sector Perform
PDS - Precision Drilling upgraded to Buy from Hold at Desjardins .
------
"It is a terrible situation when the Government, to insure the National Wealth, must go in debt and submit to ruinous interest charges, at the hands of men, who control the fictitious value of gold. Interest is the invention of Satan."
THOMAS EDISON
Trend in Hard Assets
What do you see in these weekly charts? Other than copper taking a swan dive.
Copper
http://finviz.com/futures_charts.ashx?t=HG&p=w1
Silver
http://finviz.com/futures_charts.ashx?t=SI&p=w1
Gold
http://finviz.com/futures_charts.ashx?t=GC&p=w1
Re: Trend in Hard Assets
Something that "rhymes" with rather than completely repeats the 2nd half of 2008 (at least so far)?
Gold
Patience.... below 1450 is when you want to jump on the train again for the explosive wave up.
Whistler Weather
Conference-goers should prepare for cool temperatures and the possibility of rain.
Hot off the press...here's the latest official weather forecast for Whistler from Environment Canada.
http://www.weatheroffice.gc.ca/city/pages/bc-86_me...
They are calling for cooler than normal. Highs around 52 and Lows 36-42.
Hopefully, their forecast of it being dry Fri aftn. through Sun aftn. is correct. But, the mountains may be obscured at times by clouds and I see a chance of light rain Fri aftn through Sat evening. Rain is likely Sun ngt into Monday.
SVM
4ever, thanks for the link yesterday about the SVM mine tour...http://www.caseyresearch.com/cdd/peering-silvercorp
Seems to me that the SVM shareprice is relatively firm in light of the sector downdraft. Does anyone suspect a surge in price once the KPMG audit results are announced in a few weeks?
Quad pronged bull approach
Germany votes yes, GDP up, Claims down, end of month/qtr. lets see how far they take prices shall we?
Fake Innovation but Real Cronyism
From Charles Payne
With the clock ticking the Administration has approved two more solar projects, and that should make Nancy Pelosi and Harry Reid very happy.
Tonopah Solar is a subsidiary of Solar Reserve, whose investment partner is PCG where the number two man happens to be Nancy Pelosi's brother in law. The $737,000,000 loan guarantee will help the Nevada project, which developers say will create 600 construction jobs and 45 permanent jobs.
Mesquite Solar will build a solar farm that generates 150 megawatts of power that will supply energy to 31,000 homes all for only $337.0 million and monthly electric bills. The project will create 300 construction jobs but as few as seven permanent jobs.
"If we want to be a player in the global clean energy race, we must continue to invest in innovative technologies that enable commercial-scale deployment of clean, renewable power like solar." -Energy Secretary Steven Chu
Chu bragged about the phony "investment" and its 52 permanent jobs that will cost $20,653,846 each. This is mindboggling stuff, think of all the real jobs that could be created in the private sector if entrepreneurs had access to this kind of cash.
Re: SVM
I can't forecast the reaction to what should be major news. But, I do see on the daily chart that in the last 2 weeks price has risen back up to what was support (in mid-June and throughout August) and is now resistance around $8. And, if price can get above the August resistance of $9.25-9.50 then it is likely to go much higher.
Re: SVM
Prodisc, in my experience the market is wonderfully consistent in ignoring whatever I might suspect or expect. In fact I am quite convinced it doesn't even know I exist. Which is fine by me. I don't seek its affirmation. Only if X ... then Y ....
Chris
FD: currently long SVM
Re: Whistler Weather
Excellent , Thanks . Tremendous 11
Cara 100 Update (Final)
JNPR - numbers lowered at Goldman. Shares of JNPR now seen reaching $22. Estimates also cut, as the company could face increased competition from Cisco. Neutral rating.
Re: SVM
I've attached a perf chart from 9-13-2011 comparing HL, SLW, SVM and SLV.
To me, the relative strength of SVM during the "silver price crash" is pretty significant.
Re: Fake Innovation but Real Cronyism
It would be simpler and cheaper to give individual homeowners at least 5 x 100W solar panel, a power grid friendly invertor, 25 gallons of white rubberized roof paint (or white shingles) to cover the roof and they could probably throw in a solar water heater. It would reduce the cooling energy required, generate "free" energy, feed the grid when your not home (lower your bill)and reduce the ambient temperature in your neighbourhood. It would cost max $15,000 - $20,000 per household (@31,000 homes = $620M) would created real long term employment (producing and installing/maintaining units). It would help reduce homeowners bills, the money would actually be for the people and not the corrupt conflict of interest filled companies that rise due to these types of subsidies. Folks say solar energy is expensive, it is when the governments keep giving it a bad name. If folks are willing to change and consume less; solar is a very possible solution. We ran our home on 3 x 80W panels and about $20 gas per week to run our generator for our weekly laundry and $1800 in propane per year for heating, cooking and our fridge. We had a flat screen TV, computer internet, lights and most of what normal people need.
Re: Whistler Weather
you don't need a weatherman to tell you which way the wind is blowing in Whistler
Re: Whistler Weather
I'm a bit south of Whistler but the predominant winds will be from the southwest.
It's in the mountains but it's early fall and you will be in beautiful British Columbia, so expect rain and bring an umbrella. Probably not too heavy this time of year, but the PNW is a maritime climate and those southwest winds come right off a nice warm Pacific loaded with moisture. When that moisture hits the mountains (where you will be) it leaves it there. In the winter it leaves it as snow, which is what makes Whistler...well...Whistler!
For Vad it will be like a weekend getaway. For everyone else, get out and enjoy BC, make plans to stay awhile. To the west is a temperate rain forest and just to the east is the Okanagan where it is drier.
Same old same old
watching the divergences in DB US listing and DBK.DE. Americans a tad over-enthusiastic in their celebrations, while DBK.DE has dt'd intraday.
US listing 3% higher than their European counterpart and coming back to earth.
All the while FCX fails to attract a bid, and SLW, UXG and other solid companies follow the copper miner down.
Leaders leading - AAPL, HAL, LULU, AMZN etc.
Germany wasn't a resolution and the double bounces that were evident in the miners hourly charts are broken.
Of course that can, and probably will, change at any time as this market is apparently run by psychopaths.
FD: short DB
Definition of Success
We have structural not cyclical weakness in the economy. Companies can prosper in a low rate environment by engineering their balance sheets, laying off workers, and the market 'sees' this by trading in the range.
Conversely, the social consequences, married (under 30) with kids and a high school education = 30 percent poverty rate. The American Dream has vanished for many, such that marriage and children are luxury items.
Meanwhile our 'elite' focus on how big a fence we can build, how low we can cut taxes, and whether more people need guns and fewer need reproductive rights.
Man, we are really in a fix, and there's no reason to believe that the best govt money can buy has a clue on fixing this. At least most of you aren't Red Sox fans...like me.
CEOs more pessimistic about economy
Fewer large companies plan to hire more workers in near future
http://bit.ly/qbjszN
61.8 FIB
I am seeing a number of the gold developer stocks I keep an eye on hit almost perfectly on their 61.8% retrace from their highs for this cycle. Getting a list together which I will share. XG, ATC.V, and UXG have hit almost perfectly.
How many people are bullish here?
This is rhetoric question, BTW.
Some of the fear indicators are approaching that march 2009! We may have a bear market all right but I'm seeing way too much fear right now! Note that SP is respecting it's support from August so far.
BTW, I was stopped out yesterday but reloaded today on GDXJ and eying energy and healthcare.
Re: Fake Innovation but Real Cronyism
I take it you don't like facts, but do like pollution.
What do the Koch Bros. approve of as an energy source?
Ciao, Z.
2008 Crash in the Miners vs 2011 "crash"
I am looking back at the charts of the goldmining companies I follow and during 2008 the majority fell in price between 60% (majors) up to 95% (juniors). In retrospect it turned out the price declines were entirely forced liquidation and it was a once in a generation buying opportunity (which apparently Kaimu took good advantage of).
I don't think that we will be so lucky to get lower prices like that again but the approach I am personally taking is highlight my top picks which are KGC, JAG, and SVM and accumulate on weakness averaging in over a period of months. One of Jim Rogers' best lessons was during a period of forced liquidation you want to buy things where the fundamentals are not impaired and are selling at low prices just due to the market climate. I believe the miners definitely fit this bill.
JAG and SVM I am accumulating outright to just own and hold the stock. For KGC I want to accumulate a large call option position out 12-24 months depending if the 2014 LEAPS come out in time.
The most exciting part is if you look at the rebound the miners had after the 2008 crash - most increased 100%+ in a very short period of time.
Re: How many people are bullish here?
Not me. Watching support levels closely. Some shorts and puts in POT.
Selling GDXJ and GDX. Buying some SVM. Wrote calls on many energy positions.
Some SPY puts.
Waiting for QE3.
Re: Fake Innovation but Real Cronyism
I think NO is really saying that local, decentralized solar power would be more efficient (no voltage loss or need for greater transmission) and would employ more people, which it would.
It would also be a more efficient use of subsidies as they would be spread over more people and also decentralized.
He cites a big problem, which is the lobbying and granting of huge subsidies to power conglomerates wanting to centrlaize generation and meter power, when everyone could be a generation source and we could save probably billions of $$$ on building power transmission lines.
Re: 2008 Crash in the Miners vs 2011 "crash"
I think you are right. There are some securities that fell to the March 09 levels. ECA is one of them.
Re: Fake Innovation but Real Cronyism
Having just driven from Phoenix to Moab Utah, it's all blistering hot empty desert and there are powerlines coming thru from dams on the Colorado. Fertile ground for solar farms no?
Re: Fake Innovation but Real Cronyism
Remember, national electrical code factors in 2% voltage drop, so there is loss in both actual power and in the need to build out more transmission lines, which is the key shortage right now. The BPA says that those lines are overloaded and that limitation is the key factor, like here in the PNW, that keeps some of the wind turbines we have in eastern Washington and Oregon off-line. The interstate inter tie is severely overloaded, which is leading to power outages and blackouts when the breakers trip.
I fly all around the country and one thing I notice, especially when flying into any city in the southwest, is how much empty roof space we could be using, how many people could be installing solar panels on those homes and how little additional build out would be needed to generate that power.
The back feed of power would also be decentralized eliminating the need to spend taxpayer money (BPA) to benefit private power co's.
The only reason we don't see more is because the meters would run backwards and those in power want to sell something they can meter.
I'm always curious how we see the benefit of "the Cloud" in computing and how much we hate the Microsoft business model (constant upgrades and paying for the latest version...aka parking lot business model) but we don't see it with electricity or auto fuel.
I think *everyone* should try to become a power source and everyone should make money selling it back to those who can't or to industry that lacks the space to generate their own. Call it social equity.
This is what I mean by saying fear
Attached $CPC chart. The closer analogy is mid November 2008 and late June 2010.
Vix chart looks similar BTW.
Re: Gold
I guess breaking the MA150 on a closing basis would unleash a decent amount of stop losses.
Re: Gold
while $GOLD has a slight problem there, GLD is holding fine and looks like buying opportunity.
Re: Gold
Yes, as long as 150 holds (trend channel support + MA200). Chart attached
Re: Fake Innovation but Real Cronyism
Right on, Craig!
The promise of solar power dimmed by "...centralize and meter...", despite the inherent inefficiencies.
The paradox of capitalism.
Exacerbated by a political system captured by money.
At some point these systems have to be saved from themselves.
Ciao, Z.
Today's UBS report on Gold
For much of yesterday, precious metals went into consolidation mode though with a downside bias, until late in the New York session and early Asian period when gold dropped to a low of $1583 and silver hit $29.06 as stops were triggered amid thin liquidity… Physical demand was once again decent yesterday, albeit at the lower end of recent days' volumes. Indian demand was above average, China was again visible, and a splattering of demand was seen elsewhere in Asia. European coin demand also featured again. There is little doubt that persistent physical demand along with quality medium- to long-term oriented buying are gold's pillars of support right now.
My advice: don’t let the recently depressed price get you down. This is a buying opportunity. I expect to see $1900 gold as a Christmas present.
Re: How many people are bullish here?
"Range-ish" 1100-1120 on the downside, 1200-1220 on the upside. RSI7 'should' work okay in this environment with sector rotation, etc.
Google to finance residential solar power
They finance, the company installs, the resident pays monthly, often less than the grid. GOOG good corp citizen at a profit. Position in GOOG
http://solar.energy-business-review.com/news/googl...
Re: Gold
The support should hold. Too many people are long dollar and it should fall: http://www.dailyfx.com/forex/technical/ssi/table/2...
Re: Fake Innovation but Real Cronyism
I wonder how much oil would be priced at if we didn't subsidize lower prices by maintaining power for various puppet dictators via aircraft carrier and other military/industrial/intelligence interventions?
If gas was at a true market price (I dunno what that might be, but lets say $10/gallon;it is over $5 in Ontario, now) how much government subsidy would be required to change consumption and power generation habits?
The cries from 'the greens' to institute the cap and trade scam will marginalize or destroy any viability of people living in Northern climates where heat is required to live. This ultimate derivative mechanism has very little to do with pollution anymore; the polluters will simply purchase the right to destroy the environment and pass these costs to us, while the banksters set up their casino to trade that which has been extracted from the population.
The efforts of various 'foundations' do nothing but keep most confused and divided, so the 'something for nothing' lords will remain in power. Individuals can get off the grid (or move to that direction) but I am certain that property taxes would soon rise for those that were able to achieve a sustainable existence.
Once again, we need to strike the root of all these problems. Please do not plead for those who will enslave our children with our debt obligations to 'help' in any way. They must be delegitimized for their crimes of deception.
Peace,
pulse
SVM insider purchases
3 SVM filing insiders bought stock at prices ranging from 6.60 - 8.50 during the period of Sep 9 - Sep 19. In addition, the company itself bought back another 750,00 shares, average price around $6.70 from Sep 14 - Sep 19.
Myles Gao, President & COO SVM - 2,990
Meng Tang, CFO SVM - 12,200
Jacob Austin, Special Advisor to CEO - 5,000
Re: Gold
As I see it, it is not about the USD, but about the EUR. I am pretty sure a lower EUR is good for Merkel & Co as well. USDI consists of almost 60% EUR, so a lower EUR gives a higher USD. In 2008, USA was the driving factor in the crisis. This time it is the EU and therefore the solution has to come from Europe, not Mr Bernanke's printing press.
Lower USD means higher EUR. Anyone feel like buying EUR? Some Mediterranean bonds perhaps?
EUR/USD=1 would be at least half the "required solution" for the old continent. If it gets there is written in the stars. It is not a prediction. All I know is that I know nothing.
Re: Gold
Jack -
The one thing that gives me pause are the carry trades that may still need to be unwound, as well as all the debt denominated in USD that may need to be liquidated. The carry trades in the commodity currencies built up over quite a while, and if China has a difficult time and/or there are more problems in europe, this may force people into buying dollars in order to unwind their positions.
Likewise, all those euro banks who receive dollars from the US money market funds will need to get dollars to pay back those funds - who aren't so excited about rolling that debt.
Re: Today's UBS report on Gold
Bill
Any prognostication on the price of Silver by Christmas would be much appreciated.
This is 100% distribution - Sell into the news event
good luck
Re: Gold
ballena,
"This time it is the EU and therefore the solution has to come from Europe, not Mr Bernanke's printing press."
Perhaps. According to the GAO audit the Fed has already given "... over $16 trillion to US and foreign banks and businesses."
We don't know who is doing what or how much these days.
Grym
Re: Google to finance residential solar power
Mom just signed up to get a residential solar power system. She pays around $50 per month for the next 20 years (fixed). She owns the system at the end of the period. They fix anything that breaks. It theoretically (not installed yet) generates enough power to zero her bill. Her old electric bill is about $50 per month. No money down. I think the implied interest rate is 6%. She can pay it off at any point.
Have a great time in Whistler
As a relative newbie on this site and having prior commitments I cannot make the Whistler conference. What I may miss the most is the observations during this period of "Blood running in the streets".
I wish for a very productive and prosperous time. May you all enjoy and take the time to whistle a happy tune.
Sincerely,
Jimymac
Ross Beaty - Chairman of Pan American Silver with Puplava
transcript excerpt:
PAAS - 4 countries, Peru, Bolivia, Mexico and Argentina. No political problems.
24M oz last year produced. same target this year. 1 billion oz reserves. $500M in cash, $600M in working capital, $1M a day in FCF, no hedges, Argentina has fabulous deposit that Pan American is in process of receiving permission to start (difficulties laid in environmental concerns) - has capacity to double production from 20 to 40 million oz. by 2015. Could take 6 months to get govt. permission. feasibility study is done, mining equipment is purchased - company is ready to go on this project.
http://www.netcastdaily.com/broadcast/fsn2011-0929...
Sweeeeet.
Easy Money - DB/DBK.DE divergence play intraday
Americans selling sizzle with little steak as DB opened 3% higher (approx. 8%) than DBK.DE. AS DBK.DE did a dt and closed about 3.5% I knew there was a divergence play in the NYSE listing for a second day running. Suggested that market was going to sell off too.
Still keeping it light. Sold off some SLV risk today. Waiting for some direction from the market, politicians, the man on the moon, anyone...
Remorse, Revenge or Renege?
From Mish @
http://globaleconomicanalysis.blogspot.com/
China Loan Shark Market Crashes; Scores of Chinese Business Owners Unable to Pay Black Market Loans Commit Suicide or Disappear
According to national new paper Economics Information (part of state media Xinhua), on 9/22, Hu Fulin, owner of the biggest eyeglass manufacture of the city of Wenzhou disappeared, leaving behind 2 billion RMB debt.
On 9/25, 3 more business owners in Wenzhou disappeared (owners of copper, steel and shoe manufacture).
On 9/27, owner of "Zhengdeli", a shoe manufacture jumped off of a 22 story building and killed himself.
Since April this year 29 private business owners have disappeared, all of them had over 100 million RMB businesses. 11 of the 29 owned shoe manufacturing businesses.
An analyst from China Investment (China's Sovereign investment fund) pointed out that it's because they are squeezed by a rapid increase of component and labor costs. A rising RMB is also a reason why many export oriented companies are hit. In August, Zhou Dewen, President of Wenzhou Small-Medium Business Development Association said the profit margin of Small-Medium businesses in Wenzhou has dropped to under 5% and absent of policy changes, 40% of businesses in Wenzhou will go out of business by next Spring Festival (late Jan 2012)
---------
I guess things can always be worse somewhere.
Grym
GG
Goldcorp is at the bottom of its channel. I'd like to play the bounce but already got burned when SLV fell through the floor.
5 Year chart
http://i51.tinypic.com/2ahxxt1.png
1 minute chart
http://i56.tinypic.com/2dlvh1d.png
Re: Remorse, Revenge or Renege?
I understand it completely. The Chinese gamble like crazy. I've seen it here in the U.S. where a Chinese gambler will put his entire restaurant at risk for the roll of a pair of dice. It does happen! Some restaurants that I know have changed ownership several times.
FCX - Lower Highs & Lower Lows
The trend continues down. Still seasick from all the up & down volatility in large cap stocks with penny stock behavior.
And now for something completely unrelated:
I think solar power is great, but don't want my govt to give out this kind of dough to support it:
http://www.businessweek.com/news/2011-09-28/solarr...
Let me guess, it's like the Solydra deal or somebody's lover/brother/in-law either works for this outfit or is an owner.
Ron Sen, here's your best govt money at work.
Re: Remorse, Revenge or Renege?
"The Pacific Asia Travel Association (PATA) predicts the gambling destination of Macau will host a record 27 million visitors this year."
http://www.yogonet.com/english/2011/07/20/macau-ex...
Macau is an offshore financial centre, a tax haven, and a free port with no foreign exchange control regimes. Its closest neighbour is Hong Kong and mainland China (Shenzhen, Guangzhou etc are just around the corner). Macau has a solid place in the 21st century. I wonder why they are building a 50km direct link between Hong Kong and Macau... Once the connection is completed Macau could quickly grow to have more annual visitors than Las Vegas (about 37 million visitors in 2010).
Re: How many people are bullish here?
Sometimes there are pretty good directional clues in the Inv. Intel graph.
Re: How many people are bullish here?
Jack - It's a great question. My guess is not nearly enough and that this will fuel a big rally.
....
http://kingworldnews.com/kingworldnews/Broadcast/E...
Quite a bounce last seconds...
Broken record to my S&P link.
http://bit.ly/nRVcdV
Re: Gold and the NEW Black Market Derivative
davefairtex -
You said:
"The one thing that gives me pause are the carry trades that may still need to be unwound, as well as all the debt denominated in USD that may need to be liquidated. The carry trades in the commodity currencies built up over quite a while, and if China has a difficult time and/or there are more problems in europe, this may force people into buying dollars in order to unwind their positions."
New renminbi black market derivative being set up by the Chinese should quell your fears that a gold liquidation is imminent.
"The PAGE market will be a 10 ounce 90 day contract and it will be in renminbi. This story is being spun to make people think that magically positions will now gravitate to China from COMEX and London because of the lack of title. This is just nonsense. This would then create a contango because PAGE will be traded in renminbi. You will then have currency risk.
Nonetheless, people making up these stories to justify buying gold are missing the real point of this contract in renminbi. In other words, what China is doing is flying an indirect way to trade its currency. You will be able to arbitrage the gold stripping out the renminbi. China and its central bank are NOT stupid. The people I met with in the central bank in Beijing were traders, not academics. They know PRECISELY what they are doing. This is opening the door to indirect currency trading. From their perspective, this will allow them to experiment with a free floating currency without it directly affecting the exchange rate. It is a clever black market derivative." - Martin Armstrong
http://www.martinarmstrong.org/files/Gold%2009-15-...
PAGE = the new Pan Asian Gold Exchange. Due to open in October.
Big money carry trade betwixt euro/USD/Yen is coming to an end and will find refuge in the blue chip equities with real assets and the next global reserve currency which has since 1450 migrated every 60-100+ years starting with Portugal> Spain> Netherlands> France> Britain> USA> China?!
Scale of this exhange is significant even before the big money abandons the fiat carry trade:
"This enables all of the customers of the Agricultural Bank of China who are approx 320 million retail customers and 2.7 million corporate customers, to buy and sell these contracts straight from their bank account in Renminbi (RMB is the Chinese currency of mainland China). This could impose a big draw down on the physical market. In fact, Andrew Maguire said 'To give a further idea of scale, if just 1% of their customers bought a single 10 ounce contract, that would equate to 1,000 tons of physical gold being drawn down....'" - Kirsty Hogg - Gold Wars
http://www.24hgold.com/english/contributor.aspx?ar...
Cheers.
Panic selling of junior miners. But if you don't have debt, why?
I believe that traders who would sell their junior miners at this point would be making a big mistake. I know that it's hard for anyone to keep up with the extreme volatility due to the forced selling from margin calls. However, in my case, I communicate regularly with these small companies who tell me that it is business as usual and I know they have cash in the bank to ensure that. Independently I also personally know many major league investors, including corporate insiders and mining people, who have been buying heavily this week. The manager of a huge Canadian mine called me today to get started buying. A world-class mining analyst I've known for 30 years was buying stock this week.
These people know the business. The worst hit of my positions had two of the biggest mining companies on their property this week investigating a possible acquisition. This month another major mining company made a $70 million investment in one of our holdings. If only they had waited a couple weeks, eh? One of Canada's biggest individual mining investors just closed a private placement in one of our company stocks for his personal account and the price dropped over 30% within a couple days. I know this business, and I know that forced selling like this is quickly followed by a rebound. The new money I received this week, I invested. I did that with the further confidence that all the major broker-dealers remain confident that the precious metal prices will rise soon. But the point I'd like to make is whether those who would be sellers have also decided to be day traders. If so, you'll have to stop watching CNBC. I turned on that channel for all of 20 seconds today. I'm not surprised that the words I heard before I shut it off were (as close to being accurate as I recall): "If you have been thinking gold is a storehouse of value (smirk), you've taken some gut-wrenching losses." This is what the regulators are permitting on TV today. Is it any wonder why the average person is making bad decisions?
Bull or Bear?
Easier to be a bull, and there are reasons to be, including Bill's inclination.
Added to tech holdings yesterday with tight 2% stop. Lost 5/6 this morning: I bought 2 back, one higher one lower, 2 got away, and one is hovering around stop price. Purchased UXG.TO for the first time at $4.25. Bought ECX.V yesterday at $.40 having sold half at $.70 and half at $.50 for a double. Can't lose them all. Still holding SVM.TO, may recoup losses from 2-3 months ago. GRR.V back in the range.
SWC and UMC
I am looking at a position in SWC and chip fab UMC, which yields 10% and looks about to break out of a base.
Want to add to CEF, SVM.
Re: Remorse, Revenge or Renege?
Grym,
Perhaps we should be watching for a rise in the price of shoes since most are imported from China. The high number of incidents within one sector ( shoe manufacturing ) does concern me because it could suggest a structural problem with financing within a sector that resulted in a need to go to loan sharks. If this is widespread then one might conclude that other sectors will crash if either 1) the money is called in by the sharks or 2) large numbers of owners suddenly depart with it. Your post provides yet another reason, IMO, to stay clear of investment in Chinese companies.
wall street hot shots drink champagne during protest
i think this sums it up, wall street big wigs drinking champagne on their balconies overlooking the unwashed masses protesting the crippling effects of their corrupt and incompetent practices.
it sickens me that a bunch of ass-hats in fine suits have the balls to sit while drinking fine wines as people who earn likely a fraction of them protest. these know-nothing who in general fail to beat their parent indexes seem to really think they deserve what they are getting....
http://wonkette.com/453955/heres-the-video-of-thos...
More wisdom from the talking heads....
Another typical interview on CNBC:
Re: FCX - Lower Highs & Lower Lows
4ever,
I would prefer no government subsidies on anything — let the market set prices.
Grym
Re: Panic selling of junior miners. But if you don't have ...
I find doing nothing the most difficult.
Grym
The Trials of Joe Groia
http://www.theglobeandmail.com/report-on-business/...
Re: Remorse, Revenge or Renege?
terryC,
Sometime before 1994 (When I stopped my WSJ subscription) it was reported the Chinese were making New Balance shoes. They continued using the name after New Balance had pulled out of China. I never heard the outcome of the attempt to stop them, but warned a client of mine who was thinking of beginning the manufacture of filters there.
I don't trust my own country where we can at least still have some chance at litigation, why would I trust a communist regime.
In my forty years in business twice I managed to settle with a customer who was delinquent in paying only by the threat of a lawsuit. Another one paid for my artwork (used without permission) rather than being forced by a court order to pull packaging out of Lowes and WalMart.
What chance would I have had if I were dealing with a foreign location?
Grym
Re: The Trials of Joe Groia
All,
Joe Groia is a more stand-up person than any -- and I truly mean any -- Prime Minister Canada has had in the past 20 or 30 years. I believe that to my core.
Reading about his situation, I feel we have entered the Twilight Zone or maybe the China Cultural Revolution here in 'Toronto The Good'.
The Canadian Mainstream Media had better be very careful how they handle this case.
Ugly day. Lipstick on pig close.
The close was no doubt end of month/quarter statement painting. They bought up etfs to mask the pig the last 45 min. but look at the rot underneath.
Recent leaders sucking wind...
PCLN - slices thru 200 day moving avg
BIDU down 11. sliced thru moving avg. 9 month lows
Wynn resorts down 10 major top in place breaks down below 200 day
Green Mountain -7.5 slices through moving avg
AMZN down 7 1/4
AAPL down 6.5 and kissed 50 day avg. If you see this break 200 day, u are too late.
CMG Chipotle broke 50 day
Tiffany down on double avg vol
I can go on but you get the point. Be on your toes. Individual equities are being distributed. Depending on your time frame, you may want to let prices continue to come down to you.
And of course what sector do you think was up, going into the end of month and and of qtr? Financials. criminals would look up to these captains of industry.
Packing up for the flight to Whistler
I am very appreciative of the fact that in the past four days, we received five sign-ups for the Cara Whistler Conference. That is terrific. Thank you.
The Westin tells me they have plenty of room at the inn. It is not too late to join us. Wine & Cheese in 22 hours!
No Cake to Throw Down?
http://tinyurl.com/64eqctc
It's always the 95% making the other 5% look bad.
Re: Packing up for the flight to Whistler
I really want to be there - just can't make it this weekend as I have several family requirements - bad timing for me :(
Bill, I hope you continue putting on your conferences; I will attend next year.
Best wishes to all heading to Whistler - I know the value will be much greater than the price of admission.
Thanks for all you do Bill - such a class act.
Post Close
Mixed blessings
Bank stocks were traded with mixed blessings as DB opened over 8% before dropping to about 3.5%, before short covering lifted it to 6.5% into EoD.
Perhaps Lex's FT team sums up the situation best in the following vid in that confusion remains but incremental steps are occurring towards possible resolution - not exactly raging bullish sentiment:
http://video.ft.com/v/1190420691001/Does-German-OK...
One could interpret this action as neutral or mildly bullish at best but all eyes should be on the leaders as PCLN fell 4%, CMG -1.86%, LULU -2.55%, AAPL closed -1.6%, AMZN -3.16% and GMCR fell 7% - Amazon's 'Fire' looks like it's about to melt the stock.
SLV - a 4 hour chart offers reasonable indication that "risk on" is about to return as silver tests 8MA resistance. Investor interest in shell-shocked miners like SLW would strengthen sentiment.
Similarly the 4 hour charts of SPY and QQQ are telling me what must happen shortly - either a decisive break lifts MACD through zero line resistance and break the negative trend or we are potentially faced with another down leg.
TLT shows the mirror image of the indexes. Trend support remains in this short-term time frame. A decisive equity move is required to break the trend in bonds.
The dollar dances a similar tune. Taking a breath and ready to inhale for the next leg up or on its last legs and ready to drop?
Friday is here and investor sentiment going into the weekend will be important to note. I think it was Jim Murphy forecasting a decline to 1050 for the S&P (please correct me if I'm wrong). We shall see soon enough if the market can buck this trend.
Puplava - Good to know the future headlines
http://www.financialsense.com/contributors/ryan-pu...
I am, like Puplava, thinking about future news that could trigger a rally out of this funk we're in. Some pertinent information includes the fact that:
There are still a few more votes that need to take place in other countries. There are six countries that still need to vote. The last to vote will be Slovakia, mid-October. Then, European countries will need to decide whether to leverage the EFSF or not. Again, this is a very touchy subject as we’ve seen fierce debate over the issue coming from Germany. More market pressure may be needed to justify the leverage.
That coincides with my my thinking and the map that I continue to use as a guide during this period, as follows:
http://www.mcoscillator.com/learning_center/weekly...
The Eurodollar net short position for commercial traders bottoms out in October. A successful October vote by the last EU member to support the EFSF fund would coincide nicely with the bottoming out of this COT chart.
As I posted yesterday, Asia currencies are selling off as dollar carry trades are unwound. Has that process ceased? There's not a chart yet suggesting this to be the case. Note also Puplava's concern for the leaders of this market that appear to be in distribution.
Will the German's continue to hiss and fit at talk of leveraging the EFSF fund to €2T, the sort of sum needed to rebuild the European banking system - that I can hazard a guess and say "yes".
As we were talking about big money ratcheting up a 2008 style crisis to pressure politicians to fork out the money, it would appear logical that the market takes this to the next level and squeeze the EU players again to give them what they want.
The boundaries of this range are clear. See the above 4 hour charts.
With that in mind I am not yet tempted to load up the truck on explorers, despite the great prices we are seeing right now. I've seen what it is to be squeezed by margin and do not want to load up to find the market turning against me again. Instead I accumulate Jan calls in SLW/SLV, hold a little LEX.V and UXG.TO and await the market to reveal its next hand.
Canadian/ASX listed Anvil Mining bought in Chinese offer
SHARES in Congo-focused copper miner Anvil Mining soared more than 30 per cent today after it agreed to a $C1.33 billion ($1.31bn) cash offer from China's Minmetals Resources.
Anvil Mining shares were up 32.24 per cent to $7.67 in late trade today.
The offer by Minmetals Resources shows Chinese companies remain willing to invest in risky locations despite a recent fall in commodity prices.
Minmetals, the Hong Kong-listed unit of state-owned China Minmetals Group, said in a statement that shareholders holding 40.1 per cent of Anvil Mining's stock supported the $C8-a-share offer. These include trading house Trafigura Beheer, which is Anvil's biggest investor.
The Chinese resources company said the offer, which is pitched at a 39 per cent premium to Anvil's closing share price , has been recommended by Anvil's board and will open within three weeks.
http://www.theaustralian.com.au/business/mining-en...
UK Guardian live blogging Austrian EFSF debate
http://bit.ly/rbcyZJ
Briefly suspended amid mass heckling.
Morgan Stanley Seen as Risky as Italian Banks
http://bloom.bg/njO0dt
Very reliant on wholesale funding.
Another headline today
China 5-year CDS now at 200bp, 21bp wider on the day. Last at that level in March 2009.
Re: Canadian/ASX listed Anvil Mining bought in Chinese offer
Minmetals launches C$1.3bn bid for Canada’s Anvil
http://on.ft.com/qg5x5L
Search on Google if you don't have a subscription.
Pre Market
Today's headlines suggest being closer to the bottom than the top, but it's not clear we're there yet. As Ambrose writes of the German vote this morning:
...the package merely enacts the EU summit deal agreed in July, which empowers the EFSF to buy bonds pre-emptively and recapitalise banks. The landscape has changed radically since then as the global downturn plays havoc with debt trajectories.
http://www.telegraph.co.uk/finance/financialcrisis...
That's probably what's on investors mind as DBK.DE has bottomed out at 7.5% today. I guess restricting short selling helps make the trip faster.
Note today's headlines on the slump in investment banking fees in Q3 as well. These bankers can't have it both ways - scream that the world is ending and the investment deals will as a result dry up - this is normal and something to note in relation to the slump in investment deals following Lehman Bros. As I suggested, perhaps closer to a bottom than the top:
http://in.reuters.com/article/2011/09/30/ibanks-fe...
Buyers are helping to hold the London listed miners in consolidation, which illustrates the relative strength of this group compared to the financials.
I think there is some truth in what's been said here that people are waking up to the same trick that banksters pulled in 2008, fomenting a crisis to get what they want (taxpayer dollars) instead of folding their banks and exiting stage left, cap in hand.
Although pressure continues to be maintained on the likes of FCX, at a number of stages one sees the consolidation as buyers step back into snap up the real wealth.
As a margin account buyer, I will do what Patrick suggested and wait until I see the white's of their eyes before pulling the trigger.
edit: looks like pressure is being ratcheted up on the miners too. See attached.
Re: Puplava - Good to know the future headlines
I am very leery of a writer that can get something so wrong yet has such a strong platform to speak from. He was bullish on the banks just before the crash.
http://www.financialsense.com/contributors/ryan-pu...
Quote on Jul 21;
"So as summarized from earlier, we can see positive divergence warned of the potential for a reversal. The stocks were oversold near a major demand zone (support) that had supported prices at least two times in the last two years. Prices have rallied to break the downtrend in early July and have recently retested the lows as of Monday, successfully I might add."
I have attached the bkx chart I was looking at during the past year and in particular at that time.It was a very bearish chart.
ps If you click on any authors name you will get their history of articles, very usefull for back checking.
http://www.financialsense.com/contributors/ryan-j-...
Re: Pre Market
BHP Billiton is probably the one to watch as it is the most diversified (I think) out of all of the miners. Perhaps as good as holding a position in the Basic Materials fund (XLB) itself. It made a low of 1680p on Sep 23 with a nice bullish reversal candle. Not looking so bullish now though, but the market often likes to make us think we are wrong when we are in fact right.
Re: Puplava - Good to know the future headlines
I'm always leery of readers of such technical analysis that take as gospel the 'truth' of technical analysis and then turn around and said "he got it wrong". :)
Nothing personal tbar, TA is just an if-then scenario generator, the possibility of what might happen. As Puplava's articles show subsequently, he gets himself back into tune with the market's movement and generates more if-then scenarios using more TA, just the same as any other trader.
I may have come to the same conclusion had I been monitoring the same charts at the same time - and then saw that I was wrong just as quickly.
It's the same with what I post - follow it or don't. I know who I want to follow among the thousands of analysts putting their thoughts in the public domain. I'm not sure there were many predicting a crash of such magnitude at the time.
edit: lol I took a look at XLF and USB from the time period Puplava noted. Yes, it was a sucker punch from Wall St. I guess we all see something different. That's what makes a market. Doesn't diminish my respect for his thought process and scenario building. see attached.
cheers.