Personally, I can't recall even the approximate date of the last correction. This train hasn't encountered a single valley on its climb to/from the last summit.
1333, Did I say that? - LOL, I meant 1633..... Perhaps this oversight reveals my disorientation.
NSA - It's real, three times the size of Pentagon operations and hopefully less costly but of course a priority over education and all other social programs combined.
I think a program like this is to a large degree, overlooking the value of boots on the ground potential of street cameras. A company like NUAN (Not necessarily NUAN) could provide software capable of detecting threats in real time, such as a backpack or box left unattended in public areas. Smart defect detection software by now has already been developed for manufacturing purposes, I would think (I know the idea is an old one), and could be massaged for this purpose. This needs to be done, assuming it hasn't already.
Of course BAH has a hand in these NSA programs, this should be old news to anyone paying attention.
PM's - Okay, so when if ever do the commercial shorts (Producers, forthwith referred to as rat bastards) get net long their own product and stop betting against their investors?
COCO - Is it true Leon Pannetta is on the board? That's quite a feather in the cap, this SEC investigation could be about clearing the air so the doubts can be relegated to the past?
The right move is to get long COCO and SPX, I'm too chickens**t for that this morning. I'm content to simply watch as my positions sink. I can buy at any time, it's too easy, just press the button and watch as your new position sinks, been there done that hundreds of times.
The Valley - Yea, though I walk through the valley of the shadow of death, I will fear no evil: For thou art with me; Thy rod and thy staff, they comfort me.
CECO/COCO - Goose and Gander - This issue of for-profits villainization needs to be quickly addressed by the establishment so as to avoid the spotlight being turned on the vanilla non-profits, whose administrations prefer to avoid scrutinization altogether.
honestly, the popular trades are what...long bonds, us is slow growth so look overseas, long dividend paying stocks right? i want to be in other places.
The 6-month SLV chart just sucks -- a downward staircase without any rallies. It didn't even rally after the April crash but just kept going lower in that staircase. Apparently, the crowd of investors and managed money (in COT reports) were correct to reduce their net long positions to a minimum and even go net short periodically, while the producers were total suckers in gradually reducing their hedges so far.
I think they're the ones who provide special intercom voice training for airline employees and public transit announcers? You know, those voices over the announcement system that you can't understand b/c they're muffled, like they wrapped a thick handkerchief around the microphone?
Those voices obviously have received intensive training.
"Have not these dirt bags been net short PM's, while laying the blame of large short positions on the likes of JPM and GS, etc.?"
Common, CP -- the producers MUST be short the commodity so as to hedge their revenue stream. The fact that they have recently reduced their net short positions in gold almost down to 0 is a VERY impressive sign, suggesting that they feel no need to hedge their future revenue at this price, implying that they expect the gold price to move only up from here...
They played us (me) well, while telling us to buy. Apparently their hedges were insufficient, judging by their PPS performance, or something else such as they're poised for upside even if PM prices remain stagnant?
Attempting to assess the situation from an objective perspective.
and then read somewhere a brief explanation of notation: H against a firm's name means the "house", C means clients. In the next column, "I" means "issued" (i.e., sent to someone) and "S" means received.
If you look at JP Morgan, the firm itself delivered A LOT of the physical gold they owned to other firms in February, just before the crash, and then in April (maybe in the first two weeks, before the crash). Then, their clients started to catch up to this trend, and during the first 1/3 of June, their clients have delivered almost as much gold to the counterparties as JP Morgan had delivered during the whole month of February!
This report gets updated daily -- as of June 7, the JP Morgan clients have delivered on 6027 contracts.
Here is my question: shouldn't gold deliveries happen only at futures expiration days? Thanks...
"during the first 1/3 of June, their clients have delivered almost as much gold to the counterparties"
I'm unclear on who these counterparties are, you probably have a better grasp.
"shouldn't gold deliveries happen only at futures expiration days?"
Are physical deliveries necessarily precisely timed with futures expiration, or isn't there some reasonable lag time due to logistics involved, etc. assuming the material is actually physically transferred from seller to buyer within some contractual period of time? I'm uncertain of how the paper game works obviously not of much assistance.
One thing is clear from this report -- JP Morgan is THE SOLE culprit of the gold collapse in 2013. Why? Because the volume of gold traded on COMEX dwarfs all other price discovery places, including the GLD ETF. In February, JP Morgan delivered gold on 7000 contracts = 700000 oz = 1 billion dollars! So COMEX is responsible for the gold collapse. Now, on COMEX the only firm selling gold was JP Morgan -- all others were buying. So it's interesting how the media tries to come up with economic explanations for the downturn in gold, but they ignore the fact that it is not a broad-based downturn, and in fact, it was created only by JP Morgan and its clients!
No wonder gold had an 8 stdev collapse in mid-April -- such events happen once in million years under the assumption that they are a result of a random confluence of independent decisions by all market participants. Thus, the mid-April crash is much better explained by a unilateral decision of some participant, such as JP Morgan selling a LOT of gold overnight.
JP Morgan probably had its reasons to sell gold. I suspect it might be the fact that Bundesbank demanded repatriation of its gold, and Fed had leased/sold its gold a long time ago through JPM, and thus it had to ask JPM to collapse the gold price so that the Fed could buy it back cheap. In any case, it seems that JPM has already ran out of gold to sell (it made almost 0 net deliveries in June so far and ZH had reported that their eligible gold had dropped to 0). Once JPM clients stop selling gold, there would be no sellers left and gold will zoom back up. In fact, JPM clients may have already finished selling gold futures and are just making deliveries so far on the contracts they have previously shorted.
Absolutely, JPM is always the villain, not producers screwing their investors over. JJ, WTFDIK! Where is JPM accounted for in the COT, large trader? Looks like commercials have a larger presence than large traders.
Not sure how Bundesbank's repatriation should cause POG to collapse, seems like if anything it should be the other way around considering the event represents demand?
Anyway. maybe you can do better than asking about the COMEX on the sister site, how about Harvey's site (I haven't been there in a long while), he reports on the COT and COMEX daily?
LTON - mentioned this one when it was in the mid 2's putting in a ascending triangle. that was another one with multiple ascending triangle patterns stacked on top of each other. No real pullback in that sucker for the past 19 months. I'm expecting a similar move out of FMD over the next year. True story.
This is one of the major reasons I remain bullish. The reading this month was 84.5. We're not even close to the prior expansionary periods over the past 30 years. People have only begun to accept that we're not going to 666 again. And that's just on the fringe. There are still PLENTY of people saying this is all Fed supported and when the stimulus goes away we will be right back down to the duldrums. We need to eviscerate all of those people before we can begin to talk about a meaningful top in the markets. Markets and stock prices are ALWAYS primarily about sentiment because that makes up what people are willing to pay for things.
Just my opinion and things can obviously change...
My guess is we get the following: 7 to 12% pullback on back of Fed slowly dwindling bond purchases. Everyone freaks out. Then we gradually grind higher. Fed support goes away, housing market is on fire, unemployment rate trends down to 5%, market tops at 1,998 for a triple off the March 2009 lows.
gives actual stockpile info. The most recent report shows that on 6/10, JPM parted with 2/3 of its eligible gold (217K oz), and its total holdings dropped to 550K oz. As the chart on the ZH article showed, 550K oz is a HUGE drop from what JPM used to have. I wonder what the updated report (to come out later on today) will show about the activity on 6/11. At the rate of 217K oz, JPM will be out of its gold in a couple of days, and then what will it give to those who will keep asking it to deliver on the shorts it had? Is this the historic moment the gold bugs have been waiting for?
I am still wondering where the delivery notices on COMEX are coming from and why they seem to be getting generated daily...
550k oz out of a total of 171,300 tonnes of gold mined in human history, 50mm ozs mined per year. How much longer till JPM runs out of powder, before I reach 400yrs old?
The miscalculated the time required for JPM to start buying gold in the open market in order to meet all of its delivery notices: at yesterday's rate, it is 1.5 DAYS, not months. In fact, if the 6208 delivery notices (each for 100 oz) shown for June at
are those that have not been settled yet, then they ALREADY amount to more gold than what JPM currently has, which is 550K oz. This is getting fun, folks!
By Michael Kitchen LOS ANGELES (MarketWatch) -- Traders at a number of major global banks have been manipulating spot foreign-exchange rates for at least a decade, altering the values of trillions of dollars worth of investments, Bloomberg News reported Tuesday, citing five unnamed dealers. The scheme involves the WM/Reuters Closing Spot Rates, which are used to provide daily benchmarks to value portfolios. However, market participants have been front-running client orders to rig the rates by pushing through trades before and during a 60-second window when the rates are set. British regulators are considering a probe into allegations of this practice, the report said.
Rinse and repeat, a token fine that shareholders will pay, the stock will double, and nobody of importance goes to jail for white collar crimes for bilking hundreds of millions and disrupting global commerce.
and then, when the small speculators have caught up and started following it in reducing their positions (starting mid-April, the small speculators have reduced their massively long aggregate gold position to a net short position, which has NEVER happened before!), JPM itself quitely joined the gold producers and MASSIVELY buying gold futures from small speculators and went net long, first time in recent history, over the 1-month period between early May and early June, as the article below shows:
http://winteractionables.com/?p=3308#more-3308
Who do you think will be shown wrong: the market maker shark or the small fish?
I have less bias than you think, 2nd_ave. As I posted earlier today, the 6-month SLV chart totally sucks, so I think in the short term gold has to drop a lot to follow SLV's lead. Maybe we have another leg down in gold/silver, which will allow JPM to go long in a REAL BIG way.
I think one of the big surprises this year is the market goes up on Fed tapering as investors start to realize that rates are rising because the economy is getting better. We may not get the pullback on this people are looking for.
Looks like a good entry here, I'd written off the idea a couple years ago when SHLD became involved, whatever happened to that, are you aware of any connections?
Yes, SHLD did buy OSH in 1996 then spun it off, but what did they do to good old OSH?:
"Sears to Pay $308 Million For Hardware Store Chain By PETER TRUELL
Sears, Roebuck & Company agreed yesterday to buy the Orchard Supply Hardware Stores Corporation for $308 million as part of a rapid national expansion of its chain of hardware stores. Orchard, based in San Jose, Calif., has 61 hardware stores, all in California. Sears has 115 hardware stores in 14 markets east of the Mississippi, but none in California. The company has said it may have as many as 500 hardware stores nationwide by the end of the century. August 16, 1996, Friday "
So they bought it for $308m and they spun it off in Jan 2012 at $28/share is $168m at 6m shares:
"Orchard, which started as a purchasing cooperative in San Jose, Calif. in 1931, runs 87 hardware stores in California. It started trading Tuesday on the Nasdaq market under the ticker symbol "OSH."
Shares of Orchard rose $3 to $28 after they started trading.
Today's news: InPlay: Orchard Supply Hardware: Bruce Berkowitz' Fairholme Capital Management disclosed liquidated stake in amended 13G filing; down from 604,094 shares held on 3/31 Briefing.com -7.26%
I see Jesse is tweeting about the rig count. Talked with MOG yesterday and everyone is a seller right now. Especially a mid tier/global E&P guy like TLM.
2nd - As of right now, all I think that has happened for the past 5 weeks is digestion of gains. We have more or less traded sideways during this period. I'm talking my book of course, but it's based on what I'm seeing / reading / hearing.
The one area that is growing faster than the rest of the economy is the student loan / debt / higher education sector. I don't think this trend is anywhere near stopping. Default rates on government issued student loan debt is triple that of the private sector. Yields on ABS in the student loan market are significantly higher than most other assets so anyone looking for yield will be looking at this area. With default rates of 5% or less this market will continue to get interest from investors. I'm talking my book of course but I think there is substantial opportunity in this area.
Still no higher high so no sign of a bottom. I do see positive MACD divergence so that's a start. However, I don't see big spikes in volume on up moves yet. Kind of looks like it needs to make some sort of whoosh bottom and then have big spikes in volume with either a double bottom or a higher high on the weekly chart. Those are the patterns that have higher probability. It's not perfect but it's a start. Take a look at the SPWR chart...classic example:
Look at those big spikes in volume after the double bottom. And look at the OBV go through the roof. Another thing I like to see is a cross above RSI(14) of 50 on the weekly chart. That usually signals a trend change. All of this supports the fundamental story / catalysts I like to look for. If those are there then it's a deadly positive combo.
Look at the chart for FMD: http://stockcharts.com/h-sc/ui?s=FMD&p=W&b=5&g=0&id=p29327363426
Has all of those parameters, no? Looks a lot like the early stages of the LTON run: http://stockcharts.com/h-sc/ui?s=LTON&p=W&b=5&g=0&id=p28505024185
I think it was expansion of the AMD partnership they signed last year. It could have been anything though cuz from what I've found memory prices have been skyrocketing the past 6 months so it was just a matter of time.
Nikkei futures are at 13,400. Remember back in January when they were at 11,000 and people were saying it ran too fast? Now traders are pointing to the recent pullback as reason for worry about global markets. Hmmm...
"Zerohedge is a China basher with Russian backing, an arm of RTV and who knows what else. May as well be contractors for GS, which is a possibility."
Folks, you are not thinking straight. The fact that they have an agenda in no way diminishes the quality of information they dig out. The COMEX delivery notices report I found through them is an REALLY interesting site, and the fact that someone with a bias provided that link in no way diminishes the importance of that link.
David, you do not want to trust people who have an agenda. Even if they don't mean to, they will always look for data points to support their agenda instead of looking for information with an open mind.
I see this in spades in my 2 gold bug friends. They constantly look for data to support their high conviction in gold, ignoring the more obvious opportunities, and have pretty much missed the huge run in stocks since 2009.
To be fair, we can safely say we're not making any new observations concerning Zerohedge. I'm confident David fully recognizes the potential for conflicts of interest.
Nice reversal today. Let's see if it can put in a higher low and use the 50 DMA as support. Still think we're digesting the move in interest rates and concern about Fed removal of stimulus. And I still think far too many people think the markets are supported by the Fed and when they remove stimulus the markets will tank. I'm taking the other side of the trade on that.
It was exactly the opposite on the other end. Fed kept the market's afloat longer then they would on their own, I suspect they do the same now. They aren't going to simply pull stimulus. They will do it gradually, largely by talking, much like removing training wheels. Some parts of the market will do well, some won't.
Big Dave said it isn't so much the rates themselves, but the delta (how fast it's done).
Yeah. I guess my point is when everyone is focusing on how rising rates are killing the market and the fed is supporting everything then it tells me that not enough people are bullish and believe in the market. I agree with Birinyi's take that there are several phases to a bull market and the last two are when people first accept we're not going back down the rabbit hole and then people start really believing in the market. I think we're just entering the acceptance phase. Doesn't mean we can't get corrections but longer term I don't see how we're at a top sentiment wise.
Short NRF - CRE REIT, Looks like insiders have bailed and May 9th was ex-div, might be a good trade. I'm still trying to understand why CRE would be attractive since internet commerce seems to growing more rapidly, would like to hear the case for CRE.
i have noticed just in my surrounding 2 square mile area there has been 1 hotel built (Marriott) and two 15ish story office buildings being built in the past year. Probably means nothing but that's a helluva lot more building than I've seen in this area in a while.
If you are going to build or sell bonds, you better get with it, right? Same for buying homes, starting businesses, etc. Rates will rise. Lower is better.
One thing I'm trying to comprehend (I have an extensive list) is, if BX has bought 24,000 homes then what are they planning on doing with the 20,000 veterans they plan on hiring? I've also read where they've bought quite a bit of warehouse space, wonder how that might fit in with the plan? The article tried to make the case that returns on assets would likely be thin going forward so my thought is emphasis on financing at low rates is key.
"David, you do not want to trust people who have an agenda. Even if they don't mean to, they will always look for data points to support their agenda instead of looking for information with an open mind."
That's very true, BB. I do often find myself looking for data points that support my views, but knowing that, I try hard to find well-written articles that try to argue the opposite point of view.
"david - just curious but if its supposedly rigged then why not either: (a) play the game by "their" rules"
Well, now I am on "their" side of the game, since now both myself and JPM are long gold. The reason the recent decline in gold/miners did so much damage to my account is that I took on way too much risk, using up my full margin and then call options. If I had not been doing that and was simply buying GLD/GDX with whatever extra money I was getting from work every 6 months (in the form of employee stock purchase, for example), I would have been much better off. I have greatly misjudged the possible length and depth of this pullback in gold. But then, who could have predicted in 2011 that instead of a regular pullback in a long-term bull market we will make many ALL TIME LOW readings in various indicators?
Terrorist attacks - Can we conclude the Boston attack slipped right through NSA's screening algo? I'd like some kind of post-mortem on that since I'm paying one hell of a lot to keep this secret organization fat and happy.
Anyway, you guys had my top call when I bought some PMT and NLY, so you can't say you didn't read about it here on DT well in advance! ;)
I had a beautiful plan of trading my VXX calls -- I sold them just at the right time at the start of the bounce last week, and was ready to buy them back when VXX dropped below 19. But then I decided to put that money into GDX calls instead. GDX could have waited for another few weeks -- it is not going anywhere in the meantime. But the market is obviously going down...
David, I still believe we are working off the excesses due to the ETF-ization of commodities due to GLD and the likes. No way GLD market cap should have got up to SPY's.
The thing I think you have to remember is that everyone who owns GLD wants to sell it. If you wanted gold for armageddon, you'd take physical. If you wanted leverage, you'd go with the miners, especially now.
In my opinion, everything above $1,300 was ETF driven and same with silver and everything above around $20. Gold miners didn't need $1,800 gold to develop mines and you could argue that that run caused too many mines to get approved which is going to drive the price uneconomically low on the downside over the next few years. $1,300, maybe even $1,000 is probably where the price needs to go to get mine development and market demand in synch.
I really question how much control the fed has over rates. It has been a deflationary economy, so make sense that rates are extremely low (like Japan). Now that rates are rising, I think both the bond market and the Fed are recognizing that the deflation is ending and that is why rates are rising, not because the fed has said they will taper.
Kind of a effect-cause instead of a cause-effect thing.
Would be interesting to see a chart comparing how dividend paying stocks have done in this correction compared to non-dividend payors. From my high-level perusal of the market, sure seems like the high-yields are bearing the brunt of this reversal.
One of the most important keys to success in the market is identifying major trends, getting on the right ones and off the bad ones.
So, in the late 90's, we had tech / US large cap good, everything else bad. In early 2000's, we had value type stocks good, tech bad. In the mid-2000's, commodities, were key. Since the March 2009 low, it seems we have had yield stocks good, commodities bad.
Going forward, I think the trend will certainly be bonds bad, but not sure what the good will be. I'm thinking US industrial stocks, but it could be European stocks as well as they have lower expectations.
BB - I think Europe is a very good starting point. I also think certain sectors in the credit areas / housing related areas in the US will do very well as people are still worried about the next crash. Investor and consumer sentiment is still nowhere near where it is prior to peaks and as a result, certain credit markets are still a long ways away from getting back to where they used to be. Companies taking advantage of those markets will do quite well. You know my take on the student credit market. It is no doubt on the mend.
HEre's a good take from James Paulsen (from WFC): http://online.barrons.com/article/SB50001424052748704895304578497000663563068.html?mod=BOL_hpp_highlight_top#articleTabs_article%3D3
"However, should inflation remain moderate, the odds favor a very long economic recovery and eventually a much higher stock market. Why is it likely to be a long recovery? Because confidence was so thoroughly and utterly destroyed in the 2008 crisis! Recessions are primarily caused by overconfidence.
It is excessive confidence which causes private economic players, investors and policy officials to do dumb things which lead to the next recession. When people get comfortable and then confident, they overuse credit cards, buy the second lake home, blow through their savings, and overinvest in risky stock market assets. Likewise confident businesses overstaff, over-inventory and overbuild to take advantage of the profitable future they are sure is coming. Finally, only when policy officials are more worried about over-heating than under-heating do they tighten enough to produce a recession. Today, despite being in the fourth year of this recovery, the attitudes of the players reflect a young recovery. The economy is currently being run by a bunch of "church mice" hunkered down and fully prepared for the Armageddon everyone tells them is coming. Households have reduced debt service burdens to record lows while fully restoring their net worths. Everyone is highly liquid, nobody is overpaying for houses and they certainly are not over-invested in the stock market. Businesses have considerable dry powder and lean staffs despite surging profits. Finally, the Fed is still employing full throttle crisis-like policies and tightening seems a long way off.
While confidence is finally beginning to improve, its recovery is still in its infancy and it will likely take several years before confidence reaches the level of cockiness required to produce the excesses which will bring the next recession. In the meantime, while managing the short-term ebbs and flows of the stock market, do not forget the likelihood we are still early in this bull market."
Considering that LIBOR was massaged, and now we discover that other banking rates have been massaged, I have to wonder if most charts I look at aren't also massaged, especially the ones that look particularly bearish and bullish?
Awfully, gun shy myself.
ReplyDeleteHow about maybe the broad rally comes to an end once gold bugs completely capitulate and move their capital into other sectors?
Delete1333, Did I say that? - LOL, I meant 1633..... Perhaps this oversight reveals my disorientation.
ReplyDeleteNSA - It's real, three times the size of Pentagon operations and hopefully less costly but of course a priority over education and all other social programs combined.
I think a program like this is to a large degree, overlooking the value of boots on the ground potential of street cameras. A company like NUAN (Not necessarily NUAN) could provide software capable of detecting threats in real time, such as a backpack or box left unattended in public areas. Smart defect detection software by now has already been developed for manufacturing purposes, I would think (I know the idea is an old one), and could be massaged for this purpose. This needs to be done, assuming it hasn't already.
Of course BAH has a hand in these NSA programs, this should be old news to anyone paying attention.
PM's - Okay, so when if ever do the commercial shorts (Producers, forthwith referred to as rat bastards) get net long their own product and stop betting against their investors?
ReplyDeleteCECO....Oh no COCO. Say it isn't so.
ReplyDeleteSEC investigates COCO - There, now we've spilled the beans.
DeleteI tend to interpret this as an opportunity.
DeleteFor COCO or CECO?
DeleteAll of the above, most likely. I kinda think the manufacturing skills should receive positive exposure, like welding for instance.
DeleteCOCO - Is it true Leon Pannetta is on the board? That's quite a feather in the cap, this SEC investigation could be about clearing the air so the doubts can be relegated to the past?
DeleteNBG- What happened there?
ReplyDeleteIt's bankrupt isn't it? I bet Germany repossess the assets?
DeleteUGA - Back over the 50SMA
ReplyDeleteREIT's still getting smashed, LOL
TBT - Hmm, maybe it's for real?
Glad I put that 1/2 position on yesterday on TBT.
DeleteThat evaporated quickly. Lesson learned.
DeleteTOG - We have what appears to be rising rates while PM's are falling, so how does the TOG work, is it simultaneous long PM's and short T's?
ReplyDeleteThat's the play.
DeleteCOCO- OK, you first bird boy.
ReplyDeleteThat was a quick 5%.
DeleteThe right move is to get long COCO and SPX, I'm too chickens**t for that this morning. I'm content to simply watch as my positions sink. I can buy at any time, it's too easy, just press the button and watch as your new position sinks, been there done that hundreds of times.
Delete:)
DeleteAUMN is green to flat so far, bless it's heart.
ReplyDeleteWatch your symbols, guys. You don't want to be opening CECO rather than COCO or vice versa.
ReplyDeleteInter-symbol interference causes envelope delay distortion.
DeleteThe Valley - Yea, though I walk through the valley of the shadow of death, I will fear no evil: For thou art with me; Thy rod and thy staff, they comfort me.
ReplyDeletePulled the 2.97 bid from CECO in the nick of time. Gonna get it a little cheaper.
ReplyDeletePartial fill @ 2.94
DeleteMy simpleton guess is eurotrash banks are raising capital again, in order to meet the inevitable increased capital requirements regulations.
ReplyDeleteSomething's rotten in the state of Denmark.....
Who's borrowing from who and isn't it against all intuition the borrower should get to call the shots?
Meanwhile Wall Street's shake and bake chicken stand continues selling seashells by the seashore.
CECO/COCO - Goose and Gander - This issue of for-profits villainization needs to be quickly addressed by the establishment so as to avoid the spotlight being turned on the vanilla non-profits, whose administrations prefer to avoid scrutinization altogether.
ReplyDeleteUGA - Red, we're getting "The Full Pinocchio" today!
ReplyDeletechscp picked up at 32.87. Ex divi 6/13
ReplyDeletejeez what an opening reversal. bears have to be sick to their stomachs. Unfortunately, I think it only gets worse for them.
ReplyDeleteadded a little more FMD today at $1.16. still think this is one of the better ones out there for the longer term.
You keep doing that and I'm gonna have to..... ;)
DeleteOff CECO @ 3.02
ReplyDeleteWho's buying EEM / EWZ here? both about as oversold as it gets.
ReplyDeleteThought about it. Not yet.
DeletePIE in your face?
DeleteLooks like a hammer so far, get out your six blade knives and slice this baby up!
Deletehonestly, the popular trades are what...long bonds, us is slow growth so look overseas, long dividend paying stocks right? i want to be in other places.
DeleteAmazing how much stuff is beat down all around, meanwhile SPX remains handily above 1600.
DeleteYRCW bull flag going to break to upside, or will $16 gap up close first? Successful retest of lower trend line of 45* channel today.
PIE needs to recover $19.08 quickly, else I think we have more time to plan our entry.
DeleteGerman constitutional court is meeting to discuss constitutionality of the ECB bond-buying program...
ReplyDeleteThis kind of reminds me of the FED's announcement following the SPX 666 crash.
DeleteFlip the chart upside down on the meltdown in 2008. this meltup looks similar. we still haven't seen the blowoff top phase.
ReplyDeleteTXT - Considering this one's been green most of the day, I figured there must be news. The BELL division received orders:
ReplyDelete"•Bell, Boeing to get order for 99 more V-22 Ospreys"
The 6-month SLV chart just sucks -- a downward staircase without any rallies. It didn't even rally after the April crash but just kept going lower in that staircase. Apparently, the crowd of investors and managed money (in COT reports) were correct to reduce their net long positions to a minimum and even go net short periodically, while the producers were total suckers in gradually reducing their hedges so far.
ReplyDeleteI'm kind of upset with producers, they say one thing while doing another.
DeleteWhat are you talking about, CP?
DeleteHave not these dirt bags been net short PM's, while laying the blame of large short positions on the likes of JPM and GS, etc.?
DeleteBV- No idea what they do, but the chart is impressive for further upside.
ReplyDeletefirst thing that came up on the google search was Bacterial Vaginosis.....maybe thats a bad sign. LOL
DeleteBV certainly is nothing to clap about.
DeleteYour killing me....lol
DeleteI think they're the ones who provide special intercom voice training for airline employees and public transit announcers? You know, those voices over the announcement system that you can't understand b/c they're muffled, like they wrapped a thick handkerchief around the microphone?
DeleteThose voices obviously have received intensive training.
That is Bizaare
Deletepicked up the rest of CHSCP position in the moldy cash port @32.51
ReplyDelete"Have not these dirt bags been net short PM's, while laying the blame of large short positions on the likes of JPM and GS, etc.?"
ReplyDeleteCommon, CP -- the producers MUST be short the commodity so as to hedge their revenue stream. The fact that they have recently reduced their net short positions in gold almost down to 0 is a VERY impressive sign, suggesting that they feel no need to hedge their future revenue at this price, implying that they expect the gold price to move only up from here...
They played us (me) well, while telling us to buy. Apparently their hedges were insufficient, judging by their PPS performance, or something else such as they're poised for upside even if PM prices remain stagnant?
DeleteAttempting to assess the situation from an objective perspective.
Does anyone understand how COMEX gold deliveries work? I came across this report
ReplyDeletehttp://www.cmegroup.com/delivery_reports/MetalsIssuesAndStopsYTDReport.pdf
and then read somewhere a brief explanation of notation: H against a firm's name means the "house", C means clients. In the next column, "I" means "issued" (i.e., sent to someone) and "S" means received.
If you look at JP Morgan, the firm itself delivered A LOT of the physical gold they owned to other firms in February, just before the crash, and then in April (maybe in the first two weeks, before the crash). Then, their clients started to catch up to this trend, and during the first 1/3 of June, their clients have delivered almost as much gold to the counterparties as JP Morgan had delivered during the whole month of February!
This report gets updated daily -- as of June 7, the JP Morgan clients have delivered on 6027 contracts.
Here is my question: shouldn't gold deliveries happen only at futures expiration days? Thanks...
"during the first 1/3 of June, their clients have delivered almost as much gold to the counterparties"
DeleteI'm unclear on who these counterparties are, you probably have a better grasp.
"shouldn't gold deliveries happen only at futures expiration days?"
Are physical deliveries necessarily precisely timed with futures expiration, or isn't there some reasonable lag time due to logistics involved, etc. assuming the material is actually physically transferred from seller to buyer within some contractual period of time? I'm uncertain of how the paper game works obviously not of much assistance.
One thing is clear from this report -- JP Morgan is THE SOLE culprit of the gold collapse in 2013. Why? Because the volume of gold traded on COMEX dwarfs all other price discovery places, including the GLD ETF. In February, JP Morgan delivered gold on 7000 contracts = 700000 oz = 1 billion dollars! So COMEX is responsible for the gold collapse. Now, on COMEX the only firm selling gold was JP Morgan -- all others were buying. So it's interesting how the media tries to come up with economic explanations for the downturn in gold, but they ignore the fact that it is not a broad-based downturn, and in fact, it was created only by JP Morgan and its clients!
DeleteNo wonder gold had an 8 stdev collapse in mid-April -- such events happen once in million years under the assumption that they are a result of a random confluence of independent decisions by all market participants. Thus, the mid-April crash is much better explained by a unilateral decision of some participant, such as JP Morgan selling a LOT of gold overnight.
JP Morgan probably had its reasons to sell gold. I suspect it might be the fact that Bundesbank demanded repatriation of its gold, and Fed had leased/sold its gold a long time ago through JPM, and thus it had to ask JPM to collapse the gold price so that the Fed could buy it back cheap. In any case, it seems that JPM has already ran out of gold to sell (it made almost 0 net deliveries in June so far and ZH had reported that their eligible gold had dropped to 0). Once JPM clients stop selling gold, there would be no sellers left and gold will zoom back up. In fact, JPM clients may have already finished selling gold futures and are just making deliveries so far on the contracts they have previously shorted.
If you folks don't know how COMEX gold deliveries work, can someone please post this question on the "sister" site?
DeleteAbsolutely, JPM is always the villain, not producers screwing their investors over. JJ, WTFDIK! Where is JPM accounted for in the COT, large trader? Looks like commercials have a larger presence than large traders.
DeleteNot sure how Bundesbank's repatriation should cause POG to collapse, seems like if anything it should be the other way around considering the event represents demand?
Anyway. maybe you can do better than asking about the COMEX on the sister site, how about Harvey's site (I haven't been there in a long while), he reports on the COT and COMEX daily?
DeleteYRCW - Looks like there was somewhat of a washout around the $18.50 area, actually dipped to $17.50
ReplyDelete$17.90 Seems to have become the current area of interest with something between there and $19.31 as potential long opportunity?
yeah man looks awesome. f*ckin a.
DeleteLTON - mentioned this one when it was in the mid 2's putting in a ascending triangle. that was another one with multiple ascending triangle patterns stacked on top of each other. No real pullback in that sucker for the past 19 months. I'm expecting a similar move out of FMD over the next year. True story.
ReplyDeleteOk back to selling furniture...
This is one of the major reasons I remain bullish. The reading this month was 84.5. We're not even close to the prior expansionary periods over the past 30 years. People have only begun to accept that we're not going to 666 again. And that's just on the fringe. There are still PLENTY of people saying this is all Fed supported and when the stimulus goes away we will be right back down to the duldrums. We need to eviscerate all of those people before we can begin to talk about a meaningful top in the markets. Markets and stock prices are ALWAYS primarily about sentiment because that makes up what people are willing to pay for things.
ReplyDeleteJust my opinion and things can obviously change...
http://fncdn.marcwaringventur.netdna-cdn.com/wp-content/uploads/2013/05/university-of-michigan-consumer-sentiment.png
My guess is we get the following:
Delete7 to 12% pullback on back of Fed slowly dwindling bond purchases. Everyone freaks out. Then we gradually grind higher. Fed support goes away, housing market is on fire, unemployment rate trends down to 5%, market tops at 1,998 for a triple off the March 2009 lows.
Gold returns to mid triple digits.
Right, all we have to do is be patient while waiting for the washout low. Not sure how low low is though.
DeleteI'll be looking to get back into EGLE on a trade below $3.74 and then a reversal above it. The weekly chart is set up for a perfect entry here.
ReplyDeleteI found some answers to my COMEX-related questions here:
ReplyDeletehttp://www.zerohedge.com/news/2013-06-05/jpmorgan-parts-another-21000-ounces-gold-holdings-drop-new-record-low
The report
http://www.cmegroup.com/delivery_reports/MetalsIssuesAndStopsYTDReport.pdf
describes delivery "notices", while the page
http://www.cmegroup.com/trading/energy/files/Gold_Stocks.xls
gives actual stockpile info. The most recent report shows that on 6/10, JPM parted with 2/3 of its eligible gold (217K oz), and its total holdings dropped to 550K oz. As the chart on the ZH article showed, 550K oz is a HUGE drop from what JPM used to have. I wonder what the updated report (to come out later on today) will show about the activity on 6/11. At the rate of 217K oz, JPM will be out of its gold in a couple of days, and then what will it give to those who will keep asking it to deliver on the shorts it had? Is this the historic moment the gold bugs have been waiting for?
I am still wondering where the delivery notices on COMEX are coming from and why they seem to be getting generated daily...
550k oz out of a total of 171,300 tonnes of gold mined in human history, 50mm ozs mined per year. How much longer till JPM runs out of powder, before I reach 400yrs old?
DeleteZH had caught onto this amazing gold withdrawal from JPM yesterday too:
Deletehttp://www.zerohedge.com/news/2013-06-11/jpm-vault-gold-drops-284-overnight-slides-fresh-record-low-withdrawals-accelerate
The miscalculated the time required for JPM to start buying gold in the open market in order to meet all of its delivery notices: at yesterday's rate, it is 1.5 DAYS, not months. In fact, if the 6208 delivery notices (each for 100 oz) shown for June at
http://www.cmegroup.com/delivery_reports/MetalsIssuesAndStopsYTDReport.pdf
are those that have not been settled yet, then they ALREADY amount to more gold than what JPM currently has, which is 550K oz. This is getting fun, folks!
Guess which part of consumer credit continued to expand last month...
ReplyDeleteAll signs point to FMD...
http://www.bloomberg.com/news/2013-06-07/consumer-credit-in-u-s-climbed-in-april-on-non-revolving-loans.html
DMND - Going back to test $21 resistance maybe? IH&S target? I guess today's interest related to Murdoch's DOLE investment?
ReplyDeletehttp://www.marketwatch.com/story/dealers-rigged-forex-spot-benchmarks-report-2013-06-11?link=MW_home_latest_news
ReplyDeleteBy Michael Kitchen LOS ANGELES (MarketWatch) -- Traders at a number of major global banks have been manipulating spot foreign-exchange rates for at least a decade, altering the values of trillions of dollars worth of investments, Bloomberg News reported Tuesday, citing five unnamed dealers. The scheme involves the WM/Reuters Closing Spot Rates, which are used to provide daily benchmarks to value portfolios. However, market participants have been front-running client orders to rig the rates by pushing through trades before and during a 60-second window when the rates are set. British regulators are considering a probe into allegations of this practice, the report said.
Bankers and house traders don't work for their gains, bro. They just find ways to steal.
Deleteyou see the bullshit that went down with FSLR? Not sure how GS doesn't get stopped for this stuff...
DeleteTo be honest, I see bullshit everywhere I look, whether or not it's there. That's what it's come to.
DeleteRinse and repeat, a token fine that shareholders will pay, the stock will double, and nobody of importance goes to jail for white collar crimes for bilking hundreds of millions and disrupting global commerce.
DeleteFMD- I heard something relating to this today on the radio. I'll see if I can find it.
ReplyDeleteBlack Wednesday. I just like the sound of it.
ReplyDeleteBlack as in not in the red right?
DeleteI think we're both guilty of 'directional bias,' bro.
DeleteI think I was able to piece together the gold story!
ReplyDeleteAs the delivery report shows, JPM went massively short gold futures in Feb - April:
http://www.cmegroup.com/delivery_reports/MetalsIssuesAndStopsYTDReport.pdf
and then, when the small speculators have caught up and started following it in reducing their positions (starting mid-April, the small speculators have reduced their massively long aggregate gold position to a net short position, which has NEVER happened before!), JPM itself quitely joined the gold producers and MASSIVELY buying gold futures from small speculators and went net long, first time in recent history, over the 1-month period between early May and early June, as the article below shows:
http://winteractionables.com/?p=3308#more-3308
Who do you think will be shown wrong: the market maker shark or the small fish?
And David makes tof and me look like pawns in the competition for 'directional bias!'
DeleteI have less bias than you think, 2nd_ave. As I posted earlier today, the 6-month SLV chart totally sucks, so I think in the short term gold has to drop a lot to follow SLV's lead. Maybe we have another leg down in gold/silver, which will allow JPM to go long in a REAL BIG way.
Delete"I see bullshit everywhere I look"
ReplyDeleteObviously you don't work for the SEC, no hopes of that ever happening in a million years.
SEC stands for Sleep, eat, and collect a paycheck.
DeleteI mean sleep at work, eat at your desk, and collect a paycheck.
DeleteMaybe it's sleep on the job, eat well, and collect a paycheck.
DeleteBasically, collect a paycheck whatever you do, or don't do.
DeleteWhatever you do, don't step on the wrong toes or you'll find yourself in line seeking employment counseling.
DeleteI think one of the big surprises this year is the market goes up on Fed tapering as investors start to realize that rates are rising because the economy is getting better. We may not get the pullback on this people are looking for.
ReplyDeleteZeroHedge - waste of cheap internet disk drives
Zerohedge is a China basher with Russian backing, an arm of RTV and who knows what else. May as well be contractors for GS, which is a possibility.
DeleteSerious directional bias here too...straight to Santa Cruz baby!
ReplyDeleteFor every mile of road there's two miles of ditch!
DeleteI'll make it CP. One way or another!! Getting home is always another story ;)
DeleteOSH...Almost there. Just wipe out another 15% and nothing ever happened.
ReplyDeleteLooks like a good entry here, I'd written off the idea a couple years ago when SHLD became involved, whatever happened to that, are you aware of any connections?
DeleteYes, SHLD did buy OSH in 1996 then spun it off, but what did they do to good old OSH?:
Delete"Sears to Pay $308 Million For Hardware Store Chain
By PETER TRUELL
Sears, Roebuck & Company agreed yesterday to buy the Orchard Supply Hardware Stores Corporation for $308 million as part of a rapid national expansion of its chain of hardware stores. Orchard, based in San Jose, Calif., has 61 hardware stores, all in California. Sears has 115 hardware stores in 14 markets east of the Mississippi, but none in California. The company has said it may have as many as 500 hardware stores nationwide by the end of the century.
August 16, 1996, Friday "
So they bought it for $308m and they spun it off in Jan 2012 at $28/share is $168m at 6m shares:
"Orchard, which started as a purchasing cooperative in San Jose, Calif. in 1931, runs 87 hardware stores in California. It started trading Tuesday on the Nasdaq market under the ticker symbol "OSH."
Shares of Orchard rose $3 to $28 after they started trading.
Today's news: InPlay: Orchard Supply Hardware: Bruce Berkowitz' Fairholme Capital Management disclosed liquidated stake in amended 13G filing; down from 604,094 shares held on 3/31 Briefing.com -7.26%
DeleteI see Jesse is tweeting about the rig count. Talked with MOG yesterday and everyone is a seller right now. Especially a mid tier/global E&P guy like TLM.
ReplyDeleteJapan is getting lucky, was beginning to think they might have to restart their reactors.
DeleteIt's Turkey, turkey.
ReplyDeletehow's biz? when are you going on vacation?
DeleteTaking this whole upcoming weekend off. Biz, busy, but better. I'll give you a buzz soon...
DeleteBTW guys, JB's daughter has set the bar pretty high. Graduation from UC in 2 years. That helps the Barry family average of 6!
holy sh*t. that's no joke. what is she doing now?
Delete2nd - As of right now, all I think that has happened for the past 5 weeks is digestion of gains. We have more or less traded sideways during this period. I'm talking my book of course, but it's based on what I'm seeing / reading / hearing.
ReplyDeleteThe one area that is growing faster than the rest of the economy is the student loan / debt / higher education sector. I don't think this trend is anywhere near stopping. Default rates on government issued student loan debt is triple that of the private sector. Yields on ABS in the student loan market are significantly higher than most other assets so anyone looking for yield will be looking at this area. With default rates of 5% or less this market will continue to get interest from investors. I'm talking my book of course but I think there is substantial opportunity in this area.
URA - Looks like backtest of trend line.
ReplyDeleteStill no higher high so no sign of a bottom. I do see positive MACD divergence so that's a start. However, I don't see big spikes in volume on up moves yet. Kind of looks like it needs to make some sort of whoosh bottom and then have big spikes in volume with either a double bottom or a higher high on the weekly chart. Those are the patterns that have higher probability. It's not perfect but it's a start. Take a look at the SPWR chart...classic example:
Deletehttp://stockcharts.com/h-sc/ui?s=SPWR&p=W&b=5&g=0&id=p14991083180
Look at those big spikes in volume after the double bottom. And look at the OBV go through the roof. Another thing I like to see is a cross above RSI(14) of 50 on the weekly chart. That usually signals a trend change. All of this supports the fundamental story / catalysts I like to look for. If those are there then it's a deadly positive combo.
Look at the chart for FMD:
http://stockcharts.com/h-sc/ui?s=FMD&p=W&b=5&g=0&id=p29327363426
Has all of those parameters, no? Looks a lot like the early stages of the LTON run:
http://stockcharts.com/h-sc/ui?s=LTON&p=W&b=5&g=0&id=p28505024185
by the way this is part of why I like DRAM as a highly speculative stock:
Deletehttp://stockcharts.com/h-sc/ui?s=DRAM&p=W&b=5&g=0&id=p08806322794
I only have like 2.5% of my $$ in it so not really a ton of conviction but the chart is exactly what you want to see in my opinion.
DRAM... What was the catalyst the other day?
DeleteI think it was expansion of the AMD partnership they signed last year. It could have been anything though cuz from what I've found memory prices have been skyrocketing the past 6 months so it was just a matter of time.
DeleteRobot remains long from 1633
ReplyDeleteNikkei futures are at 13,400. Remember back in January when they were at 11,000 and people were saying it ran too fast? Now traders are pointing to the recent pullback as reason for worry about global markets. Hmmm...
ReplyDeleteYep, I also remember not so long ago INTC was trading under $20
Delete"Zerohedge is a China basher with Russian backing, an arm of RTV and who knows what else. May as well be contractors for GS, which is a possibility."
ReplyDeleteFolks, you are not thinking straight. The fact that they have an agenda in no way diminishes the quality of information they dig out. The COMEX delivery notices report I found through them is an REALLY interesting site, and the fact that someone with a bias provided that link in no way diminishes the importance of that link.
david - just curious but if its supposedly rigged then why not either:
Delete(a) play the game by "their" rules
or
(b) play a different game (i.e., not commodities)?
David, you do not want to trust people who have an agenda. Even if they don't mean to, they will always look for data points to support their agenda instead of looking for information with an open mind.
DeleteI see this in spades in my 2 gold bug friends. They constantly look for data to support their high conviction in gold, ignoring the more obvious opportunities, and have pretty much missed the huge run in stocks since 2009.
To be fair, we can safely say we're not making any new observations concerning Zerohedge. I'm confident David fully recognizes the potential for conflicts of interest.
DeleteCooper Tire (CTB) taken out for a 40% premium.
ReplyDeleteWas the cheapest of the auto suppliers I was following, but still a good industry to invest. Auto sales projected over 16 million this year.
Oh, now you say something about how cheap it was? ;)
DeleteARR goes ex-div
ReplyDeleteTXT - For some reason this one always seems to trade in the red on market up days, and vice-versa.
ReplyDeleteMUX - back-tested 50SMA
ReplyDeleteHave your kids had their professional business cards made? Seems like a worthy idea to me.
ReplyDeletehttp://www.vistaprint.com/category/business-cards.aspx
DeleteNLY - Come on people, please sell, sell, sell..... Now trading near 2008 level when MBS's fell off the cliff.
ReplyDeleteAverage dividend over last 60 quarters is $.44175 or $26.505 a share.
Nice reversal today. Let's see if it can put in a higher low and use the 50 DMA as support. Still think we're digesting the move in interest rates and concern about Fed removal of stimulus. And I still think far too many people think the markets are supported by the Fed and when they remove stimulus the markets will tank. I'm taking the other side of the trade on that.
ReplyDeleteIt was exactly the opposite on the other end. Fed kept the market's afloat longer then they would on their own, I suspect they do the same now. They aren't going to simply pull stimulus. They will do it gradually, largely by talking, much like removing training wheels. Some parts of the market will do well, some won't.
DeleteBig Dave said it isn't so much the rates themselves, but the delta (how fast it's done).
Short NRF
Yeah. I guess my point is when everyone is focusing on how rising rates are killing the market and the fed is supporting everything then it tells me that not enough people are bullish and believe in the market. I agree with Birinyi's take that there are several phases to a bull market and the last two are when people first accept we're not going back down the rabbit hole and then people start really believing in the market. I think we're just entering the acceptance phase. Doesn't mean we can't get corrections but longer term I don't see how we're at a top sentiment wise.
DeleteShort NRF - CRE REIT, Looks like insiders have bailed and May 9th was ex-div, might be a good trade. I'm still trying to understand why CRE would be attractive since internet commerce seems to growing more rapidly, would like to hear the case for CRE.
Deletei have noticed just in my surrounding 2 square mile area there has been 1 hotel built (Marriott) and two 15ish story office buildings being built in the past year. Probably means nothing but that's a helluva lot more building than I've seen in this area in a while.
DeleteIf you are going to build or sell bonds, you better get with it, right? Same for buying homes, starting businesses, etc. Rates will rise. Lower is better.
DeleteOne thing I'm trying to comprehend (I have an extensive list) is, if BX has bought 24,000 homes then what are they planning on doing with the 20,000 veterans they plan on hiring? I've also read where they've bought quite a bit of warehouse space, wonder how that might fit in with the plan? The article tried to make the case that returns on assets would likely be thin going forward so my thought is emphasis on financing at low rates is key.
Delete"2 square mile area there has been 1 hotel built (Marriott) and two 15ish story office buildings being built"
DeleteCertainly someone has an angle, wonder if it's as simple as CRE taking off or if it's a more sinister plan like setting shareholders up for failure?
GNRC - Potential Derecho storm forming in Ohio Vally may impact east coast, will GNRC be in play?
ReplyDelete"David, you do not want to trust people who have an agenda. Even if they don't mean to, they will always look for data points to support their agenda instead of looking for information with an open mind."
ReplyDeleteThat's very true, BB. I do often find myself looking for data points that support my views, but knowing that, I try hard to find well-written articles that try to argue the opposite point of view.
"david - just curious but if its supposedly rigged then why not either:
ReplyDelete(a) play the game by "their" rules"
Well, now I am on "their" side of the game, since now both myself and JPM are long gold. The reason the recent decline in gold/miners did so much damage to my account is that I took on way too much risk, using up my full margin and then call options. If I had not been doing that and was simply buying GLD/GDX with whatever extra money I was getting from work every 6 months (in the form of employee stock purchase, for example), I would have been much better off. I have greatly misjudged the possible length and depth of this pullback in gold. But then, who could have predicted in 2011 that instead of a regular pullback in a long-term bull market we will make many ALL TIME LOW readings in various indicators?
I've been hoping BAC would retest it's all time low. It might still....
DeleteLast month the S&P closed at 1,630. It's still only down about 8 points this month after having been up for like 6 straight months.
ReplyDeleteLast night the R2000 was only down about 1.5%. It's not the end of the world...yet.
DeleteStill above the 50.
Hopefully DT(formally TT) is one place where notice of end of the world is posted, when it arrives. ;)
DeleteTerrorist attacks - Can we conclude the Boston attack slipped right through NSA's screening algo? I'd like some kind of post-mortem on that since I'm paying one hell of a lot to keep this secret organization fat and happy.
DeleteAnyway, you guys had my top call when I bought some PMT and NLY, so you can't say you didn't read about it here on DT well in advance! ;)
FMD and NLY, I meant, sold PMT some time ago and no plans on buying it back.
DeletePVH - Earnings in AH, looks like. Treasury Budget 14:00, watching $UTIL $481.4 level for directional cue.
ReplyDeleteBX - I could redraw some lines here and make a parallel channel as opposed to the previous megaphone formation, which is an improvement IMO.
ReplyDeleteI guess retail is selling today, trying to sidestep downside. So my plan still involves adding at some point but probably not today.
I just noticed that H&S on $UTIL daily chart has reached it's target, wonder who's going short here and who's covering?
I had a beautiful plan of trading my VXX calls -- I sold them just at the right time at the start of the bounce last week, and was ready to buy them back when VXX dropped below 19. But then I decided to put that money into GDX calls instead. GDX could have waited for another few weeks -- it is not going anywhere in the meantime. But the market is obviously going down...
ReplyDeleteDavid, I still believe we are working off the excesses due to the ETF-ization of commodities due to GLD and the likes. No way GLD market cap should have got up to SPY's.
DeleteThe thing I think you have to remember is that everyone who owns GLD wants to sell it. If you wanted gold for armageddon, you'd take physical. If you wanted leverage, you'd go with the miners, especially now.
In my opinion, everything above $1,300 was ETF driven and same with silver and everything above around $20. Gold miners didn't need $1,800 gold to develop mines and you could argue that that run caused too many mines to get approved which is going to drive the price uneconomically low on the downside over the next few years. $1,300, maybe even $1,000 is probably where the price needs to go to get mine development and market demand in synch.
I really question how much control the fed has over rates. It has been a deflationary economy, so make sense that rates are extremely low (like Japan). Now that rates are rising, I think both the bond market and the Fed are recognizing that the deflation is ending and that is why rates are rising, not because the fed has said they will taper.
ReplyDeleteKind of a effect-cause instead of a cause-effect thing.
I didn't know the FED had made the final decision to taper but was still considering it?
DeleteLooks like natty prices rise as E&P insiders sell? Same phenomenon as PM producers?
Would be interesting to see a chart comparing how dividend paying stocks have done in this correction compared to non-dividend payors. From my high-level perusal of the market, sure seems like the high-yields are bearing the brunt of this reversal.
ReplyDeleteYep.
Delete"seems like the high-yields are bearing the brunt"
DeleteThat's my observation as well, just as was forewarned. Supports the thesis of razor-thin margins going forward, doesn't it?
BB - here's a look at sectors:
Deletehttp://tickersense.typepad.com/ticker_sense/
This blog is published by Birinyi & Associates and its something I follow fairly regularly.
TBT off @70.10
ReplyDeleteURG Small starter position. (Urge Overkill)
ReplyDeletehttp://www.youtube.com/watch?v=tI7pRCTuI2M
One of the most important keys to success in the market is identifying major trends, getting on the right ones and off the bad ones.
ReplyDeleteSo, in the late 90's, we had tech / US large cap good, everything else bad. In early 2000's, we had value type stocks good, tech bad. In the mid-2000's, commodities, were key. Since the March 2009 low, it seems we have had yield stocks good, commodities bad.
Going forward, I think the trend will certainly be bonds bad, but not sure what the good will be. I'm thinking US industrial stocks, but it could be European stocks as well as they have lower expectations.
CAT H&S suggests ~$60, the sector on fire isn't gonna be infrastructure?
DeleteHopefully you guys don't cross bridges on your way to work, might look for alternate routes if you do?
BB - I think Europe is a very good starting point. I also think certain sectors in the credit areas / housing related areas in the US will do very well as people are still worried about the next crash. Investor and consumer sentiment is still nowhere near where it is prior to peaks and as a result, certain credit markets are still a long ways away from getting back to where they used to be. Companies taking advantage of those markets will do quite well. You know my take on the student credit market. It is no doubt on the mend.
DeleteHEre's a good take from James Paulsen (from WFC):
http://online.barrons.com/article/SB50001424052748704895304578497000663563068.html?mod=BOL_hpp_highlight_top#articleTabs_article%3D3
"However, should inflation remain moderate, the odds favor a very long economic recovery and eventually a much higher stock market. Why is it likely to be a long recovery? Because confidence was so thoroughly and utterly destroyed in the 2008 crisis! Recessions are primarily caused by overconfidence.
It is excessive confidence which causes private economic players, investors and policy officials to do dumb things which lead to the next recession. When people get comfortable and then confident, they overuse credit cards, buy the second lake home, blow through their savings, and overinvest in risky stock market assets. Likewise confident businesses overstaff, over-inventory and overbuild to take advantage of the profitable future they are sure is coming. Finally, only when policy officials are more worried about over-heating than under-heating do they tighten enough to produce a recession. Today, despite being in the fourth year of this recovery, the attitudes of the players reflect a young recovery. The economy is currently being run by a bunch of "church mice" hunkered down and fully prepared for the Armageddon everyone tells them is coming. Households have reduced debt service burdens to record lows while fully restoring their net worths. Everyone is highly liquid, nobody is overpaying for houses and they certainly are not over-invested in the stock market. Businesses have considerable dry powder and lean staffs despite surging profits. Finally, the Fed is still employing full throttle crisis-like policies and tightening seems a long way off.
While confidence is finally beginning to improve, its recovery is still in its infancy and it will likely take several years before confidence reaches the level of cockiness required to produce the excesses which will bring the next recession. In the meantime, while managing the short-term ebbs and flows of the stock market, do not forget the likelihood we are still early in this bull market."
Robot flipped short at 1622
ReplyDeleteConsidering that LIBOR was massaged, and now we discover that other banking rates have been massaged, I have to wonder if most charts I look at aren't also massaged, especially the ones that look particularly bearish and bullish?
ReplyDeletePIE - Volume 4.55x
ReplyDeleteBrandt has refreshed his observations on PM's and AAPL but I can't download the PDF, can you guys?
ReplyDelete