Game Plan…Keep a 3% trailing stop on JJC or the Copper futures contract. Nice price action continues and quality relative strength continues in Copper compared to Gold and Silver.
On a day that was supposed to be as quiet as they get, the now traditional spike in FX vol that we have been observing for the past two months (even as the VIX has plunged to year lows) is back like clockwork. As the chart below shows, the EURUSD is now well over 100 pips higher on the day, and is back to early December levels. The reason, according to some, is that the various global banks, mostly French and US, who have been buying the billions in EURs sold by assorted central banking cartels in the past few months, starting with the BIS and going down, are engaged in some good old fashioned window dressing. There was a time when window dressing applied to stocks. With that now completely priced in, it is time to move on to FX, and shortly thereafter, gold. And speaking of the latter, with the yellow metal at $1,417, and just dollars away from the all time high, it would not be too surprising to see the best performing asset class tracked by Reuters to close the year at an all time high.
Below is the answer to the quiz of yesterday. See quiz chart (here) or scroll down to the next chart below this post.
CLICK ON CHART TO ENLARGE
TIPS gapped higher, breaking the top of its rising channel, looks to have made a “Double Top” and now has traded back down to the bottom of its rising channel. TIPs are impacted by both rates and inflation. Is this decline overdone? Long-Term rates are pressing up against 17-YEAR RESISTANCE right now (see post here) Per the long bond, it has paid to be a bond buyer up against this resistance. Going to be different this time?
Below is the answer to the quiz of yesterday. See quiz chart (here) or scroll down to the next chart below this post.
CLICK ON CHART TO ENLARGE
TIPS gapped higher, breaking the top of its rising channel, looks to have made a “Double Top” and now has traded back down to the bottom of its rising channel. TIPs are impacted by both rates and inflation. Is this decline overdone? Long-Term rates are pressing up against 17-YEAR RESISTANCE right now (see post here) Per the long bond, it has paid to be a bond buyer up against this resistance. Going to be different this time?
There are a lot of angry people out there. I see it every day in my writing. All you have to do is look at the comments at a site like Zero Hedge to realize that fact. To some extent you saw this in the last election. Those who vote (less than half the population) sent a message and as a result there has been a significant change in the political landscape.
But what do the voters get for sending the message? A slap in the face. A few weeks later we get a monster tax break for high end earners, a roll over of the tax treatment for hedge fund mangers (just obscene), another $120 billion “stimulus” that won’t do a damn thing but add to the debt and an extension of unemployment payment for yet another year (now three years!)
If you pay bills (who doesn’t) you know that all banks, credit card companies, utilities, insurance companies and all the others are just nickel and diming us to death. Every month I am nicked for some damn thing or the other. I think the FinReg rules that were supposed to protect the average Jane or Joe actually just codified what the bastards could charge. As a result we get hit with new fees, charges and higher costs.
The very frustrating part of all this is that there is not a thing you can do about it. Go write you congressperson, you’re lucky to get a form response. Get on the phone to your CC provider and bitch over a $25 late charge on a $15 balance? Good luck.
I have been doing something for the past few months that might send a message. If I continued for the next hundred years it would not make a dent. If a hundred thousand did as I am doing it would be noticed but still wouldn’t mean a thing. But if the number got into the millions it would start to make a difference.
I have been sending 1 cent more than what is due on every bill that I get. Citi sends a CC balance of $134.82? I send them $134.83.
I have a small sample of about 30 bills that I have been doing this with. Well more than…
While hardly news to regular readers, most of whom have ridden the 80%+ wave in silver in 2010, the following video from Future Money Trends explains some of the key basics about why silver, which is unique in the precious metals basket in that it is also an industrial metal (and has thus sparked much debate over whether or not it, like gold, is “money“), and provides some perspectives on why silver just may one day be more valuable than gold. Some facts: while there are 10 ounces of silver, for every ounce of gold mined, the most of it is not “free flowing” and is locked up in industrial uses; for every $1 in SLV investors still pile $7 in GLD; above ground silver has declined from 10 billion ounces in 1950 to 5-700 million ounces in 2010 (compared to an increase in above ground gold from 1 billion to 7 billion ounces); the gold to silver ratio is at 50x while the average long-term is 15x, industrial demand for silver is up 18% in 2010; and much more. Of course, there is no reason why one has to pick one or the other. Historically both have been tiered stores of value, with the Roman empire going so far as to succumb its silver currency when the going got tough. The simple fact is since global deleveraging will likely continue and since the US government will need to print trillions, most of it monetized by the Fed, the ongoing currency dilution will continue to result in increasing P prices: pretty simple. The only downside case to gold and silver holdings would involve massive asset liquidations a la September 2008, which also would mean that the Fed has lost control, that the US dollar is no longer the reserve currency, and that after the smoke settles, non-fiat currencies will rise again. And that includes both gold and silver.
“I am not surprised by the strength of retail sales, because i knew that 30% of consumers are responsible for retail sales, and these 30% did much better because of the performance of capital markets. I don’t think it is indicative of anything going forward. I don’t think the economy is going to get any better. If you look at our fiscal and monetary policy, we went two trillion in the hole last year. Two trillion… to produce this… and unemployment went up to 9.8%! We’ve spent two trillion we’re printing money we’re going bananas. Our balance sheet, we’ve got $2.6 trillion on there, and what;s on there government securities, and MBS.”
…”If interest rates go up a point Bernanke’s bankrupt. Everything he’s bought is underwater. All the MBS are underwater, the whole country is underwater.”
Landlords better start figuring it out pretty quick because they already have occupancy problems, rent problems and everything else right now. I don’t think the CRE problems are fixed by any means. That’s why we are going to close hundreds of community banks going forward, we are going to close hundreds more. Those CRE debts are coming due and they will not be able to be rolled over. We’ve got lots of problems still coming up in the banking system, and the problems in the real estate issue is here for a long time.
I’ve covered this topic left and right, since 2007 after warning that GGP was insolvent and bound to crash. I got into a tit for tat with the CFO who called my research “garbage”. A year after that comment,
We are officially on vacation, but had originally expected Friday to be an exchange holiday. Why? Oh, just because the Nymex had always been able to place greed on the back burner for at least one final day at the end of each trading year, in a sort of sacrificial immolation of that most valuable of all commodities – time. It seems a strangely appropriate summation of 2010 that the exchange’s final act for the year has been the cruel and spiteful denial of a day off, a move from the sacrifice of time to human sacrifice – at long last. And that was 2010.
Where 2008 had seen the almost accidental move of investors from stocks to commodities, 2010 saw the almost willful, wide awake version of that. In 2008, investors woke up and noticed, “Wow, we aren’t buying Exxon or Chevron any more to get long in oil; we are actually buying oil.” In 2010, investors just bought oil, knowing that that buying would push prices higher. It seems likely to continue in 2011.
As we end the year, prices have sold off on their penultimate day of trading, on profit-taking and because prices were overbought and in resistance. This week’s DOE report showed a smaller drawdown in crude oil stocks than had been expected, and that was slightly bearish. But, traders and investors will be going home … another day later than in any previous year … armed with a supportive weekly unemployment report. This week’s report showed the fewest number of workers filing unemployment insurance claims in the last two-and-a-half years, Dow Jones noted. Even though the numbers no longer mean what they say they mean, we are still comparing apples to apples, albeit (or all-be-they) like comparing Red Delicious to Crab Apples at this stage.
Fewer people looking for jobs could be construed as positive news and is being seen that way in the context of the latest employment report. We will get a bigger and more comprehensive look almost right away at December as a month. But, in another glaring example of zeitgeist – or a sign of the time we live in – people who have stopped looking for work are no longer listed as unemployed. They have given up and therefore must be…
I could not help noticing that China’s imports from Japan fell 16.2pc in December. Imports from Taiwan fell 6.2pc. The strong yen strikes again: Honda decides to build a high-performance hybrid Acura in Ohio – instead of its home nation of Japan. The firm’s continued shift in p...
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In an effort to reach the angry mob, CNBC's Rick Santelli goes all Sesame Street on the numbers behind the US Debt Ceiling Rise. Focusing for two minutes on what this practically means for every man, woman, child, and politician, the shouting Chicagoan points out that when the US breaches this new limit then the world's entire population will be on the hook for $2,346 each (and $52,409 per US person).
The Weekly Leading Index (WLI) growth indicator of the Economic Cycle Research Institute (ECRI) posted -6.5 in its latest reading, data through January 20. The latest public data point is a reduced contraction from last week's -7.6 (a slight downward revision from -7.5). This is the highest level (i.e., least negative) since early September. However, the underlying WLI declined fractionally from an adjusted 123.3 to 122.8 (see the third chart below).
Early last December Lakshman Achuthan, the Co-founder of ECRI, spoke with Tom Keene on Bloomberg Television's Surveillance Midday. You can watch the video on the ECRI website here, with bold heading Recession Update. The eight-minute video is well worth watching in its...
Some combination of better made cars, and less Americans able to pay new car prices has conspired to push up the average age of U.S. vehicles to a new record high. Reflecting this sea change, one of the best investment g...
Shares of battered tech company Research in Motion (NASDAQ: RIMM) are seeing much strength during Friday's trading session.
Fairfax Financial Holdings released a 13G filing with the SEC this morning, in which they disclosed a 5.12% stake in Research in Motion.
Currently, shares of Research in motion are up over 4% at $16.85. Over the last year, Research in Motion is down over 72%.
Research In Motion Limited is a designer, manufacturer and marketer of wireless solutions for the worldwide mobile communications market. RIM provides platforms and solutions for access to information, including e-mail, voice, instant messaging, short message service.
Top 5 RisersStockRatingAnalysisASBCBUYMany analysts are expecting higher than previously expected long term growth from Associated Bancorp, and its near-term earnings outlook is also improving.CZZSTRONGBUYThe recent earnings history for Cosan Ltd shows significant improvement while projected valuation continues to rise.STLDBUYProjected value continues to rise for Steel Dynamics while long term increases in earnings growth are also becoming more widely expected.PSESTRONGBUYAn increasingly attractive expected long term growth rate and a significantly higher projected valuation from just a fe...
Major markets and major index ETFs corrected slightly today after the stock market’s euphoric party yesterday
Major markets suffered a slight hangover today, as the S&P 500 dropped .57%, the Dow Jones Industrial Average dropped .18%, the NASDAQ dropped .46% and the Russell 2000 Index dropped .34%, after yesterday’s crazy Fed and Tech Sector induced Wall Street Party. The NASDAQ, in particular, partied very hard, so hard in fact that the NASDAQ reached its 11 year record high.
The major market index ETFs were hungover too as the SPDR S&P 500 ETF lowered .51%, the SPDR Dow Jones Industrial ...
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This post is for all our live virtual trade ideas and daily comments. Please click on "comments" below to follow our live discussion. All of our current trades are listed in the spreadsheet below, with entry price (1/2 in and All in), and exit prices (1/3 out, 2/3 out, and All out).
We also indicate our stop, which is most of the time the "5 day moving average". All trades, unless indicated, are front-month ATM options.
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Here is the virtual portfolio weekend update. Basically a recap of the positions and some notes about the trades. As usual, I'll post the previous week's P&L for comparison. Not the greatest of week in general!
AA Money
Only transaction last week as we bought back the AA Feb 9 puts on Tuesday for close to a 70% profit. The idea is to sell another set of put as soon as we get a chance.
Previous week P&L - $400.00
We lost some ground this week, but we'll keep on selling premium!
FAS Money
We also lost some ground in this virtual portfolio, but we have sold plenty of premium for the coming week. A little correction would go a long way to help! On Wednesday we sold the FAS Feb 72 puts (already good for 50%), on Thursday we added the Jan4 78 calls and on Friday we had to roll the Jan 78 puts to the Jan 80 puts. We were hoping for these ones to expire worthless on Friday, but a late stick killed that hope.
Previous week P&L - $4372.00...
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Here's the latest Stock World Weekly. We discuss the Fed's next move, and it's new policy for more QE-cating. Brief review of Sabrient's trade ideas for 2012 (already doing well) and a few new buy-writes from Phil and Pharmboy. Enjoy! (Feedback appreciated - give some life to the comment section below.)
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Finding new and exciting Biotech companies that target novel mechanisms is like trying to find a needle in a haystack. Sure there are many companies working on cutting edge science, but investing in those companies to reap the rewards of their work is a very dangerous game. More often than not, companies fail because the mechanism does not pan out, the compound(s) do not have pharmacokinetics (get into the body or last very long in the body), or an adverse event happens that knocks years off a development timeline. In addition, the stock can be manipulated by market makers so investors don't know which way is up. I approach investing in biotechs as a long term prospect. I continue to like our current portfolio of biotech companies (join in chat for many of those plays), and we continually add/subtract shares and sell/buy options on ...
Philip R. Davis is a founder Phil's Stock World, a stock and options trading site that teaches the art of options trading to newcomers and devises advanced strategies for expert traders...
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Philip R. Davis is a founder Phil's Stock World, a stock and options trading site that teaches the art of options trading to newcomers and devises advanced strategies for expert traders...
Ilene is editor and affiliate program
coordinator for PSW. She manages the Favorites backup site
(