February 14, 2012
By Stewart Thompson
Saudi Arabia’s top power brokers recently claimed they would not allow oil to trade over $100. Click here now to view the oil price trading above $100 this morning.
The power brokers have already failed. How big their failure will become remains to be seen, but things don’t look good for the oil bears.
When any major market might be about to embark on a strong rally or decline there are both bullish and bearish factors in play. The market’s direction is ultimately determined by liquidity flows.
Click here now to view the seasonal trend for the oil price at this time of year. At seasonalcharts.com you can view similar charts for all the major commodity markets.
The bottom line is that oil could rise strongly because of a new MACD buy signal, a large head and shoulders pattern, tension between Iran and Israel/America, and because it seasonally tends to do so about now.
An oil price shock to the upside could cause major problems for the stock market at a time when the European financial crisis is still strongly on the “liquidity flow minds” of institutional investors.
Click this stock market liquidity flows chart from sentimentrader.com. The picture painted by the liquidity flows on this chart is truly frightening.
You can see that the commercial group of traders are piling on short positions by aggressively shorting the Dow, the Nasdaq, and the Russell indexes.
My concern is not that they are shorting the broad stock market, but that they are shorting with this kind of size in such a short period of time. The current short position of the commercial traders is now larger than at any point in the last ten years.
Do they know that something very bad is coming your way? Are they simply shorting to profit from an over-extended stock market rally that has seen the Dow rally about 2500 points without any kind of serious correction?
October 18, 2011
Beacon Equity Research
By Dominique de Kevelioc de Bailleul
Outpacing former U.S. Comptroller General (1998-2008), David Walker, the indefatigable Peter Schiff has markedly stepped up his appearances, interviews and overall visibility of the past year with his dire message to investors: prepare for an “abrupt” dollar collapse.
Though a thorn in the side of Wall Street’s behemoth banking cartel, broker-dealers and the financial media that serves them, Euro Pacific Capital’s CEO Schiff strips away the tired rhetoric, massaged sentiment building, shameless hype, obfuscation and outright rumor spreading of CNBC’s broadcast, all characteristic of an old guard desperately clinging to power though its control of a highly sophisticated media-driven propaganda campaign deployed to hide the foreshadowing symptoms of a coming economic collapse.(1)
Speaking with SeekingAlpha’s contributing writer, Garrett Baldwin, Schiff deploys his own version of the truth, which he sees as an endgame for dollar hegemony manifesting in future sharp declines in U.S. Treasuries.
“I do believe that it [the decline in U.S. Treasuries] will be very abrupt,” said Schiff. “I think when the dollar collapses, it will happen very rapidly. When the bond bubble bursts, the air is going to come gushing out. It’s not going to give a lot of people time to reverse their position.”
And like the Nasdaq and housing bubbles, both pricked into collapse, the U.S. sovereign debt bubble, too, has “a lot of pins” out there grasped by powerful invisible hands; and “it’s [Treasury market] going to find one eventually.”
Peter, the son of famed tax protestor Irwin A. Schiff, has demonstrated that his message to investors can be trusted as pure, no less than uber-American patriot U.S. Congressman Ron Paul’s plea to revamp the global monetary system and phase out the Federal Reserve during his presidential 2012 bid.
While unabashedly speaking truth to power about the dollar’s ultimate worthlessness void of its artificial props, Schiff offers real solutions to what former U.S. Comptroller Walker has metaphorically stated is a “burning platform”—not in the sense of how best to put out the fire (though Schiff tried in his bid for U.S. Senator for his home state of Connecticut), but how investors can profit from an inevitable Roman Empire-like decline.
Schiff’s decade-long message to investors who seek protection from the coming colossal collapse, which he originally saw coming as far back as 2000, is to own gold. His advice back then rewarded investors with a 700%+ return in nominal terms and much more in real terms when compared with the contrasted performance of more widely-held assets, such as real estate and the S&P500. The S&P still trades below its 2000 level while home prices continue to fall.
When the subject of gold’s breathtaking drop in late 2008 and early 2009 was broached, Schiff defended his record, talking about the performance of the gold price within a larger context of the overall bull market in the metal since its $255 price tag low of 1999.
“In 2008, gold prices went down, but they’re double what they were now – then,” Schiff explained. “So people still made money on precious metals. And of course if they bought precious metals, years earlier, had they bought them in 2002, 2003, 2004, even though 2008 was a down year – or at least the second half was. They’ve more than recouped that.”
Schiff continued, “So, people have been able to profit, certainly from the advice to get out of the dollar. The dollar is quite a bit lower than it was when I first started telling people to get rid of it based on these forecasts. Even though it’s higher than it was a month ago, it’s much lower than it was years ago. And the dollar will continue to fall.”
To expound on Schiff’s strategy for survival of the mother of all currency crises he sees on the horizon, investors may want to refer to the lifelong work of Princeton Economics’ founder Martin Armstrong, a man whose study of market cycles may shed more light on the coming years’ volatility in the gold market.
Though Armstrong’s personal life is controversial, his brilliant work with market cycles led him to advise the Reagan White House on how best to handle the aftermath of the 1987 stock market crash—which developed into the infamous Working Group of Financial Markets, more popularly referred to today as the PPT (Plunge Protection Team). Twenty-three years later, the eccentric Armstrong strongly suggests that the volatility we now see in all markets across the globe will increase dramatically into the year 2016.
Speaking with King World News this past week, Armstrong said the volatility will be, frankly, frighteningly breathtaking.
“We’re going to increase volatility by 50% over the next two years, and then, going into the latter part of 2016 it will double again,” he told KWN’s Eric King. “It’s the way markets move.”
“Boil a pot of water. When it gets to the boiling point, you’ll see all of a sudden the water juts burst into bubbles,” Armstrong explained. “That’s the way the market is. And that final end is when you get that doubling effect. And when you see that, sometime it can be more than double, but when you see that, that’s the time when you are getting into the final top. So we haven’t seen anything like that yet.”
And to hammer home the point made by Messieurs Schiff and Armstrong, gold investors must focus on the endgame and not the extreme volatility in the gold market. To keep it simple, the old stead hand of financial markets, Dow Theory Letter’s Richard Russell, said about gold in a roundtable discussion with Financial Sense Newshour in 2003, “I think it’s a bull market [in gold]. The bull will always try to shake you out, go up with the least people as possible.” Russell suggested that investors should not look at the gold price anymore than they look at the market value of their houses on a day-to-day basis. Instead, the 87-year-old veteran of the markets said, “You buy and take a position in gold, and that’s it.”
(1) Today’s early-morning c update on CNBC featured a roundtable discussion session, including the establishment’s most sycophantic shill of television, Steve Liesman, a 20-year and enabling CNBC veteran Joe Kernen, another of Wall Street apologist guest, and the 34-year-old Andrew Sorkin. As Sorkin began to hit home the salient points behind the reasons for OWS’s growing uprising—now sprouting worldwide—Liesman, abruptly stepped on Sorkin and began the 3-man gang up operation on the young Gerald Loeb Award winner.
October 10, 2011
By: Greg Keller
Stocks rose sharply in the U.S. and Europe Monday after French and German leaders promised to strengthen European banks. The Dow Jones industrial average jumped 275 points, led by Bank of America. The euro rose against the dollar.
German Chancellor Angela Merkel and French President Nicolas Sarkozy said they would finalize a “comprehensive response” to the debt crisis by the end of the month, including a plan to make sure banks have adequate capital.
“The more we can put our arms around the problem with a little more detail, the better, and time frames usually help,” said Michael Sansoterra, a portfolio manager at Silvant Capital Management in Atlanta.
Bank of America stock (BAC) rose nearly 5%, the most of the 30 companies that make up the Dow index. JPMorgan Chase stock (JPM) rose 4.5%.
The Dow gained 468 points Tuesday through Thursday last week after Europe’s central bank moved to shore up the region’s lenders. It dipped 20 points Friday and is still down 1.7% for the year.
The Standard & Poor’s 500 index rose almost 3% Monday. The Nasdaq composite index rose 3.7%.
European stock markets rose and the euro strengthened against the dollar on the latest indication that European leaders were making progress on containing the region’s debt crisis. Germany’s DAX rose 3% and France’s CAC-40 rose 2%.
Investors were also relieved that troubled Franco-Belgian bank Dexia would be partially nationalized. Dexia needed rescue because owns large amounts of government bonds of indebted countries like Greece and Italy.
European banks have become more reluctant to lend to each other, putting overextended banks like Dexia in danger. That prompted the European Central Bank last week to offer unlimited one-year loans to the banks through 2013 to help give them access to credit.
Investors have been worried that a default by Greece could cause the value of Greek bonds held by those banks to plunge, hurting their balance sheets. U.S. banks could also be affected if Greece goes through a messy default, since they own Greek bonds and also have close ties to European banks.
Apple stock (AAPL) rose 4% to $384.71 after reporting that first-day orders for its new iPhone topped 1 million. The phone goes on sale Friday.
Netflix stock (NFLX) rose 3.7% after the company abandoned its widely panned decision to separate its DVD-by-mail and Internet streaming services. Subscribers will still be able to use both services under one account and one password.
Yahoo stock (YHOO) jumped 2.6% to $15.87 following reports that founder Jerry Yang may organize a buyout of the company with private equity investors.
Oil and gas driller Nabors Industries jumped 11%, the most of any company in the S&P, after oil rose above $85 a barrel. It hit a 12-month low of $75 a barrel last week.
Alcoa will become the first major U.S. company to report third-quarter results after the closing bell Tuesday. The aluminum maker’s stock was up 3.5% to $10.05.
Bond trading is closed for the Columbus Day holiday.
February 17th, 2011
By: David Goodboy
The Germans are coming to take over the New York Stock Exchange. In a move that would have been unimaginable even two years ago, the German Deutsche Bourse will be merging with the New York Stock Exchange (NYSE) to create the world’s largest stock exchange on earth. The annual trading volume will exceed $20 trillion creating a true monster in the financial space. That is if all the regulatory, cultural and financial hurdles can be successfully crossed. Talk of monopoly issues, the wisdom in permitting foreign control of an American institution, and even debates over the name of the new exchange are poised to hamper this so-called merger of equals.
This $10.3 billion transaction will swap each NYSE Euronext share for 0.47 shares of the newly formed exchange. Existing shareholders in the Deutsche Bourse will receive a one to one exchange rate with their shares. It’s critical to note that the Deutsche Bourse will control 60% of the newly formed exchange board of director seats. This seems to me to throw off the concept of a merger of equals. In addition, although it appears that the German deal is in the bag, rumors are swirling about that the Chicago Mercantile Exchange or even the Nasdaq may be making counter offers for the mighty New York institution.
How will this expected merger affect individual traders and investors? First, its not expected to close any time soon, therefore there will likely be no changes for at least six months. That time frames is generous, assuming there is no legal action or other snags that get in the way. Once the merger is complete, it should benefit individual investors by providing greater choice, products and efficiency. The greater efficiency should result in lowering of costs across the board for everyone. I applaud this merger and welcome the change with open arms.
December 13th, 2010
By: Dawn Kawamoto
Congressional members scored big during the steep downturn in the market, posting a 16% gain collectively between 2008 to 2009, according to a study issued Wednesday by the Center for Responsive Politics.
By comparison, the Nasdaq fell 8.4% during that same two-year period.
Not only did this group’s investment portfolio perform well, but any notion of the humble public servant can now be laid the rest. Virtually half of Congressional members are millionaires, compared to 1% for society at large in America, notes a post in the Center’s OpenSecrets blog.
And among this group, eight members of Congress are mega-millionaires, with portfolios above $100 million. Rep. Darrell Issa (R-Calif.) holds the largest treasure chest, estimated in excess of $300 million. Trailing close behind is Rep. Jane Harman, (D-Calif.) with her portfolio averaging $293,454,761. Rounding out the top three is Sen. John Kerry, (D-Mass.), with $238,812,296.
Shelia Krumholz, the Center’s executive director, had this to say about the findings:
Few federal lawmakers must grapple with the financial ills — unemployment, loss of housing, wiped out savings — that have befallen millions of Americans.
Congressional representatives on balance rank among the wealthiest of wealthy Americans and boast financial portfolios that are all but unattainable for most of their constituents.
Last year, the median wealth of a House of Representative was $765,010 — up from $645,503 the previous year, the report noted. And the median wealth for senators jumped up to nearly $2.38 million last year, from $2.27 million a year earlier.
Sources of Wealth
The top industries that are bringing the bacon home for Congressional members leads off with the real estate industry, which accounted for a collective maximum value of $898.3 million last year. Next up is the live entertainment and recreational industry, which represented $255 million in Congressional members’ portfolios. Electronics manufacturing, securities and investments, and the computers and Internet industry contributed to the top ranks.
Adding some sugar to the mix are the campaign contributions by players in these respective industries. Microsoft (MSFT), a member of the computer and Internet industry, plunked down $21 million in campaign contributions between 1989 and 2010. Morgan Stanley (MS) coughed up $19.8 million, while JPMorgan (JPM) dished up $20.3 million in the period. The largest contributed by far was AT&T (T), with $45.6 million
September 1, 2010
by Abby Schultz
Stocks surged the first trading day of September after a report showed U.S. manufacturing has surprising strength, and after news of strength in the global economy. The markets also shrugged off news of a decline in auto sales.
The Dow Jones Industrial Average rose more than 240 points. All 30 Dow components were higher, led by Caterpillar [CAT 68.0601 2.9001 (+4.45%)], Bank of America [BAC 13.05 0.59 (+4.74%)], and General Electric [GE 15.01 0.53 (+3.66%)].
The CBOE Volatility Index, widely considered the best gauge of fear in the market, fell more than 6 percent, below 25.
The mood in the market was brighter Wednesday after a glum August, and a day after the Dow eked out a 5 point gain. In a piece of good news, the Institute for Supply Management’s monthly manufacturing index for August came in at 56.3, much better than the expected drop to 52.5 for August. The July reading was 55.5.
Stocks were already higher before the manufacturing report following news of a rebound in Chinese manufacturing. The Chinese data, coupled with positive economic reports out of Australia, India and Germany, confirmed “global demand remains intact,” said Quincy Krosby, market strategist at Prudential Financial.
The market also likely gained support from a first-of-the-month influx of buying, which is typical, Krosby said. The key, she added, will be if Wednesday’s gains are driven by strong volume, unlike what has been seen throughout the summer when volume picked up on the downside and decreased on the upside.
August auto sales at Ford[F 11.624 0.339 (+3%)] fell 7.1 percent year-over-year, more than the 4.1 percent decline expected. Earlier Wednesday, General Motors reported its August sales fell 7 percent year-over-year, the automaker reported Wednesday morning. Analysts expected a drop-off, given that August 2009 saw accelerated sales from the “cash for clunkers” program.
Apple [AAPL 250.8741 7.7741 (+3.2%)] has scheduled a media event at 1 p.m. where it is expected to unveil the newest versions of the iPod, and possibly new features for Apple TV. The Financial Times reports that Sony [SNE 28.84 0.85 (+3.04%)], meanwhile, will launch a new music and video download service designed to challenge Apple, as it holds its own media event in Berlin.
Elsewhere among technology stocks, Amazon.com [AMZN 130.48 5.65 (+4.53%)] is reportedly entering the business of delivering TV over the Internet, according to a report in The Wall Street Journal.
In other news, shares of Burger King Holdings [BKC 18.865 2.415 (+14.68%)] spiked after news the fast-food chain is considering a possible sale and has been holding talks with potential buyers, according to reports.
Many retailers surged Wednesday after news that state sales-tax holidays and back-to-school buying boosted sales. The report by SpendingPulse, an information service by MasterCard Advisors, was less optimistic about the future, noting consumers remain cautious.
Shares of Saks [SKS 7.41 -0.49 (-6.2%)], however, were lower a day after the luxury retailer rose more than 14 percent on unconfirmed takoever talk. Meanwhile, JP Morgan downgraded Saks to “neutral.”
Meanwhile, Caterpillar is surging after news it is expanding manufacturing capacity in Brazil. Leading the industrial sector Wednesday is Cummins [CMI 79.80 5.39 (+7.24%)], which is up more than 7 percent. An official with General Electric [GE 15.015 0.535 (+3.69%)], meanwhile, said the conglomerate could spend as much as $30 billion on acquisitions within two to three years. Shares of GE, the parent company of CNBC, were up more than 3 percent.
Among financial stocks, up more than 3 percent as a group, Bank of America rose more than 4 percent after a federal judge approved a settlement with the Securities and Exchange Commission. The SEC was concerned with bonuses paid to Merrill Lynch employees before BofA’s purchase of the investment bank in January 2009.
In earnings news, shares of Heinz [HNZ 46.16 -0.08 (-0.17%)] were slightly lower following news the maker of ketchup and Ore-Ida French fries earned more than expected thanks to strong sales in emerging markets. Heinz is expecting to reports earnings of 75 cents a share, better than the 73 cents forecasted by analysts polled by Thomson Reuters.
On the economic front, construction spending, meanwhile, slumped 1.0 percent in July to $805.2 billion, the lowest level in 10 years, the Commerce Department reported. Figures for June were revised to an 0.8 percent fall, instead of the 0.1 percent gain previously reported.
Earlier Wednesday, the Mortgage Bankers Association reported applications for home purchassing and refinancing rose last week amid the lowest interest rates since 1990.
A report from ADP and Macroeconomic Advisors showed the private sector lost 10,000 jobs from July to August largely due to a drop of 40,000 jobs in the goods-producing sector. The news was offset somewhat by a separate report from Challenger, Gray & Christmas showing that planned layoffs hit a 10-year low in the month.
June 16, 2010
By Cindy Perman
Stocks rallied Tuesday as the euro gained against the dollar after a number of successful European debt auctions eased investor concerns about the euro zone’s solvency crisis. Techs and industrials led the advance.
The Dow Jones Industrial Average gained 213.88, or 2.1 percent, to close at 10,404.77. All 30 components were higher, led by Microsoft [MSFT 26.41 -0.1725 (-0.65%) ], American Express [AXP 41.5327 -0.0573 (-0.14%) ] and Boeing [BA 66.82 -0.66 (-0.98%) ].
The S&P 500 rose 2.4 percent to trade above its 200-day moving average of 1,108.26 for the first time since May. The tech-heavy Nasdaq gained 2.8 percent. And the CBOE volatility index, widely considered the best gauge of fear in the market, was near 25 at the closing bell.
The euro rose against the dollar as strong demand for government debt from several European countries offset worries about the debt crisis after Moody’s downgraded Greece’s credit rating to junk status on Monday.
“Most of the downtrend in the euro is done,” said Michael Cohn, chief investment strategist at Global Arena Investment Management. “We’ll probably have one more downdraft for the euro by August to around $1.15, but that’s it.”
June 10, 2010
By Stephen Bernard and Tim Paradis
NEW YORK (AP) — Stocks are surging after reports on the U.S. job market and Chinese exports lifted anxiety about the global economic recovery.
The government says total unemployment claims dropped last week by the largest amount in almost a year.
China says exports rose 48.5 percent in May, while imports jumped 48.3 percent. The increases are easing fears that debt problems in Europe will halt a global recovery.
Energy stocks are higher after sliding Wednesday on concerns that BP would slash its dividend because of fallout from the Gulf of Mexico oil spill.
At midday, the Dow Jones industrials are up 203 at 10,102. The Standard & Poor’s 500 index is up 22 at 1,078, while the Nasdaq composite index is up 40 at 2,199.
THIS IS A BREAKING NEWS UPDATE. Check back soon for further information. AP’s earlier story is below.
NEW YORK (AP) — Stocks surged Thursday after reports on the U.S. job market and Chinese exports lifted some of investors’ anxiety about the global economic recovery.
The Dow Jones industrial average rose about 230 points in late morning trading. The Dow and the Standard & Poor’s 500 index climbed about 2.3 percent, while the technology-dominated Nasdaq composite index rose about 2 percent.
Falling Treasury prices pushed interest rates higher after demand for safety investments eased.
June 8, 2010
By Stephen Bernard and Tim Paradis
NEW YORK — Stocks fell to their lowest level in seven months Monday after traders couldn’t shake fears that Europe’s economic problems will derail a global recovery.
The Dow Jones industrial average fell 115 points, or 1.2 percent, to its lowest close since November. The Dow lost 323 Friday after the government’s May jobs report fell short of expectations.
Broader indexes logged steeper percentage drops Monday. The technology-focused Nasdaq composite index fell 2 percent.
Monday’s drop was a smaller-scale repeat of Friday as traders again dumped stocks in the final hour. That signals traders would rather sell than be hit by surprises, especially because Europe’s business day begins before trading opens in the U.S. Some traders say the slide has been overdone but that the market isn’t likely to find much stability until there is a better sense about how Europe’s economies will hold up under heavy cost-cutting.
With only a sprinkling of economic and corporate news to go on, traders again tracked the moves of the euro. The 16-nation currency hit another four-year low and hurt European markets. The euro fell as low as $1.1878 before rising to $1.1915. A drop in the currency is seen as a sign of flagging confidence in Europe’s ability to rein in its debt without falling back into recession.
June 4, 2010
By Cindy Perman
Stocks tumbled Friday after a report showed fewer jobs were added to nonfarm payrolls than expected last month and most of those were temporary census workers.
The Dow Jones Industrial Average was down more than 180 points, or 1.8 percent, in late-morning trading. The S&P 500 and Nasdaq shed more than 1.5 percent.
The selloff was so severe that decliners outpaced advancers more than 12 to 1 on the New York Stock Exchange.
Industrials, financials and consumer discretionary were the biggest decliners.
US employers added 431,000 jobs to nonfarm payrolls in May, but 411,000 of those were temporary census workers. The private sector added just 41,000 jobs: Manufacturing, temporary help and mining added jobs, while construction declined. That number was also well short of the more than 500,000 economists had expected. The unemployment rate, however, fell to 9.7 percent from 9.9 percent in April.