Archive for May, 2010

Where White Man Went Wrong

Where White Man Went Wrong

Courtesy of Joshua M. Brown, The Reformed Broker

 





Greek Police Fire Teargas At Anti-Israel Protestors

Courtesy of Tyler Durden

Greece siding with Turkey – the end is nigh. Reuters reports: “Greek police fired teargas on Monday at demonstrators protesting outside the Israeli embassy in Athens over Israel’s storming of a Gaza-bound aid flotilla and the killing of pro-Palestinian activists. “Dozens of protesters tried to break a police cordon, and police responded with teargas,” said a Reuters witness. About 2,500 protesters rallied outside the embassy, police said, chanting “Hands off Gaza”.





Memorial Day Musings

It's been a pretty quiet weekend and our futures are up about a quarter point as the EU session daws to a close.

The DAX gave up half it's gains into the close and the CAC never could get going while the FTSE is closed today.  Asia was pretty flat, except the Shanghai, which fell 2.4% steeply into the close.  Our futures were up about half a point but gave up half of that in what is, of course, thin to non-existent trading.  12 of Spain’s 45 banks are in merger talks as they scramble to become too big to fail and Trichet made some nice noises this morning

In the best commentary yet on the global situation, the 6 month-old "Best Party," which is headed by a comedian, won the Reykjavik elections, after campaigning with the catch slogan "Whatever Works."  The Best Party promises to get a polar bear for the zoo and preaches the benefits of "anarcho-surrealism."  While the Best Party's critics implored its team of comedians, actors and musicians to end their campaign, soon to be-mayor Jon Gnarr insisted he would follow through to the end. It was the best way to expose the "ridiculous" state of traditional politics, he said.  Gnarr also promised free towels, to lobby for a Disney Iceland, getting Parliament drug-free by 2020 and to cut down on the number of Santas at Christmas.  Heck, sounds good to me!

Political cartoon

I love this video from Barry Ritholts' site:  "The Surprising Truth About What Motivates Us

Another good catch from Barry is Alan Abelson's Barron's article that notes that insiders have been outnumbering buying during May at a rate of 77:1, a worsening situation we've been tracking all year in Ilene's "Insider Zone."  Insiders aren't supposed to sell based on specific events they know about but they can be a good indicator of long-term economic problems that are currently being sugar-coated, even in their own outlooks. 

One of the big ones I'm seeing and have been talking about for some time is margin pressures, brought about by persistently high commodity and labor prices in the face of slowing consumer spending.  Deflation rears its ugly head this weekend as Wal-Mart is slashing prices pushing the cost
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“A Brutal Ambush At Sea” – The Spin Begins

Courtesy of Tyler Durden

From ynetnews.com

Ron Ben Yishai recounts bloody clash aboard Gaza-bound vessel: The lacking crowd-dispersal means, the brutal violence of ‘peace activists,’ and the attempt to bring down an IDF helicopter

Ron Ben-Yishai

Our Navy commandoes fell right into the hands of the Gaza mission members. A few minutes before the takeover attempt aboard the Marmara got underway, the operation commander was told that 20 people were waiting on the deck where a helicopter was to deploy the first team of the elite Flotilla 13 unit. The original plan was to disembark on the top deck, and from there rush to the vessel’s bridge and order the Marmara’s captain to stop.

Officials estimated that passengers will show slight resistance, and possibly minor violence; for that reason, the operation’s commander decided to bring the helicopter directly above the top deck. The first rope that soldiers used in order to descend down to the ship was wrested away by activists, most of them Turks, and tied to an antenna with the hopes of bringing the chopper down. However, Flotilla 13 fighters decided to carry on.

Navy commandoes slid down to the vessel one by one, yet then the unexpected occurred: The passengers that awaited them on the deck pulled out bats, clubs, and slingshots with glass marbles, assaulting each soldier as he disembarked. The fighters were nabbed one by one and were beaten up badly, yet they attempted to fight back.

However, to their misfortune, they were only equipped with paintball rifles used to disperse minor protests, such as the ones held in Bilin. The paintballs obviously made no impression on the activists, who kept on beating the troops up and even attempted to wrest away their weapons.

One soldier who came to the aid of a comrade was captured by the rioters and sustained severe blows. The commandoes were equipped with handguns but were told they should only use them in the face of life-threatening situations. When they came down from the chopper, they kept on shouting to each other “don’t shoot, don’t shoot,” even though they sustained numerous blows.
 
‘I saw the tip of a rifle’

The Navy commandoes were prepared to mostly encounter political activists seeking to hold a protest, rather than trained street fighters. The soldiers were told they were to verbally convince activists who offer resistance…
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PCE SHOWS CONTINUING DEFLATION

PCE SHOWS CONTINUING DEFLATION

Courtesy of The Pragmatic Capitalist

From the always informative David Rosenberg:

“For those who have ongoing problem with how the government treats the consumer price index, there is a metric that is tried, tested and true, which is the market-based core PCE price index (the core excludes food and energy).  This metric was released yesterday and it eked a 0.3% QoQ annualized increase (basically flat) which was a record low for this particular data series.  The YoY trend, depicted below, slowed to an 11-year low of 1.2% in Q1 from 1.7% in Q4 and 2.1% a year ago.  The disinflation trend is unmistakable and augurs for income-based investment strategies.”

def PCE SHOWS CONTINUING DEFLATION

Source: Gluskin Sheff 


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ECB Conducts Third Sterilization Procedure, To Withdraw Another €35 Billion In Liquidity

Courtesy of Tyler Durden

The ECB just can’t make up its mind these days. First it launches a preemptive form of QE, then its directors write lengthy essays against those (cough, Germany, cough) who say its policies are flawed and inflationary, and now after flooding the market with cash, it continues to rush to take the extra liquidity out of the market. As announced earlier on its website, the ECB will withdraw another €35 billion in liquidity in the form of a one-week variable-rate tender capped at 1%, to be conducted on June 1 at 11:30 am. This is the same as the amount of government bonds purchased by the bank in the prior week, thus undoing all temporary QE benefits in the span of 7 days. This is the third and so far largest “sterilization” tender conducted in the past three weeks: the first and second were for €16.5 and €26.5, respectively.

From the ECB:

As announced by the Governing Council on 10 May 2010, the ECB will conduct specific operations in order to re-absorb the liquidity injected through the Securities Markets Programme. In this regard, the ECB will carry out a quick tender on 01 June at 11.30 in order to collect one-week fixed-term deposits with settlement day on 02 June. A variable rate tender with a maximum bid rate of 1.00% will be applied and the ECB intends to absorb an amount of EUR 35 billion. The latter corresponds to the size of the Securities Markets Programme, taking into account transactions with settlement at or before Friday 28 May. The benchmark allotment amount in MROs takes into account the liquidity effect of non standard measures, assuming an unchanged size of the Securities Markets Programme and full sterilisation of this amount via the above mentioned liquidity-absorbing operation. Fixed term deposits held with the Eurosystem are eligible as collateral for the Eurosystem’s credit operations. The ECB intends to carry out another liquidity-absorbing operation next week.

The problem is the ECB has no clue what is being percevied as more favorable by the market – the injection of liquidity or the withdrawal. With a 168 hour full cycle from QE to fixed-term tenders, the market basically knows the fully discount any short-term liquidity activity by the schizophrenic bank, which is demonstrating the kind of indecisivness that our own…
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We Face Extraordinary Danger and Extraordinary Opportunity

We Face Extraordinary Danger and Extraordinary Opportunity

Courtesy of John Nyaradi’s Wall Street Sector Selector 

Black Cat Looking at Goldfish in Bowl

As I look across the global landscape today, I see extraordinary danger and extraordinary opportunity. 

Danger comes from the deteriorating economic environment at home and abroad and extraordinary opportunity comes from the enormous volatility and opportunities to “short” the market followed by a once in a generation opportunity to “buy dollars for dimes” once a bottom to this market has been reached.

Over the next five years I believe we will see more bankruptcies, both individual and sovereign, than we’ve seen in our history and we’ll also see more millionaires and billionaires created than ever before.

As individuals we will each make one of two choices.  We can assume the “deer in the headlights” posture and stash our money under the mattress, or we can educate ourselves, take prudently managed risk and work to take advantage of the enormous opportunities that will present themselves. 

Looking at My Screens 

This week we saw enormous volatility in every asset class as global forces washed over the markets of the world and investors/traders tried to position themselves on the only side of the market that counts, “the right side.” 

The downtrend that started in April is still firmly in place, notwithstanding Thursday’s rally from oversold levels and we remain in the “Red Flag Flying” mode expecting lower prices ahead. 

Taking a look at the chart of the S&P 500 we see:

chart courtesy of StockCharts.com 

In the chart above, we can see that the S&P remains just below its 200 Day Moving Average which will provide significant resistance while the MACD remains on a sell signal but momentum is turning up.  Above the blue 50 Day Moving Average is rolling over and the 200 Day red line is flattening which is also a bearish indicator. 

So for the time being, at least, we remain in a bearish configuration, expecting lower prices ahead. 

By the way, if you share our view and expectations of lower prices, this week’s mega rally on Thursday presented some extraordinary buying opportunities on the “short” side with relatively low risk at the moment.  I’ll be describing these in detail to my subscribers in our Position/Stop Loss Update this weekend. 

Members note that this week’s Position/Stop Loss Update will be sent on Monday afternoon due…
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We Face Extraordinary Danger and Extraordinary Opportunity

We Face Extraordinary Danger and Extraordinary Opportunity

Courtesy of John Nyaradi’s Wall Street Sector Selector 

Black Cat Looking at Goldfish in Bowl

As I look across the global landscape today, I see extraordinary danger and extraordinary opportunity. 

Danger comes from the deteriorating economic environment at home and abroad and extraordinary opportunity comes from the enormous volatility and opportunities to “short” the market followed by a once in a generation opportunity to “buy dollars for dimes” once a bottom to this market has been reached.

Over the next five years I believe we will see more bankruptcies, both individual and sovereign, than we’ve seen in our history and we’ll also see more millionaires and billionaires created than ever before.

As individuals we will each make one of two choices.  We can assume the “deer in the headlights” posture and stash our money under the mattress, or we can educate ourselves, take prudently managed risk and work to take advantage of the enormous opportunities that will present themselves. 

Looking at My Screens 

This week we saw enormous volatility in every asset class as global forces washed over the markets of the world and investors/traders tried to position themselves on the only side of the market that counts, “the right side.” 

The downtrend that started in April is still firmly in place, notwithstanding Thursday’s rally from oversold levels and we remain in the “Red Flag Flying” mode expecting lower prices ahead. 

Taking a look at the chart of the S&P 500 we see:

chart courtesy of StockCharts.com 

In the chart above, we can see that the S&P remains just below its 200 Day Moving Average which will provide significant resistance while the MACD remains on a sell signal but momentum is turning up.  Above the blue 50 Day Moving Average is rolling over and the 200 Day red line is flattening which is also a bearish indicator. 

So for the time being, at least, we remain in a bearish configuration, expecting lower prices ahead. 

By the way, if you share our view and expectations of lower prices, this week’s mega rally on Thursday presented some extraordinary buying opportunities on the “short” side with relatively low risk at the moment.  I’ll be describing these in detail to my subscribers in our Position/Stop Loss Update this weekend. 

Members note that this week’s Position/Stop Loss Update will be sent on Monday afternoon due to markets being…
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This Bear Market Is Nowhere Near A “Buying Opportunity,” Says Rosenberg

This Bear Market Is Nowhere Near A "Buying Opportunity," Says Rosenberg

Courtesy of Henry Blodget at Clusterstock

Some not-so-fun facts from David Rosenberg of Gluskin Sheff:

We went back to the history books and found that at fundamental lows in the S&P 500, whether they be in real bear markets or in severe corrections in a bull market, the index bottoms when it gets 13% below the 50-day moving average and 24% below the 200-day moving average.  As of Friday’s close, we are talking about a market that is barely below the 50-day m.a. now and 5% below the 200- day moving averages. 

Message — keep your powder dry.

[Note: The chart below from stockcharts.com suggests that Dave has transposed the current numbers: We're about 5% below the 50-day and basically even with the 200-day...]

S&P 500 May 31 2010

Image: Stockcharts.com stockcharts.com

See Also: 

JPMorgan: Here’s Three Signs That We’ve Hit The Market Bottom


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Israeli Defense Forces Release Video Of Violence Aboard Turkish Ship

Courtesy of Tyler Durden

The Israel Defense Forces (IDF) – Naval Forces has released a recording, and their summarized version of events that transpired in real-time on board the assaulted Turkish ship early this morning. Obviously, this is just one side of the story – we would certainly appreciate Wikileaks’ or some other independent arbiter’s perspective on how the other side was interpreting the situation as it was developing, and resulting in over 16 casualties so far. One wonders how many Israeli soldiers were killed during the clash? Warning: video is graphic.

Here is the official statement from the IDF NF on the tragic events from last night:

Early this morning, IDF Naval Forces boarded six ships attempting to break the maritime closure of the Gaza Strip. This happened after numerous warnings from Israel and the Israeli Navy that were issued prior to the action. The Israel Navy requested the ships to redirect toward Ashdod where they would be able to unload their aid supplies which would then be transferred over land after undergoing security inspections.

During the boarding of the ships, the demonstrators onboard attacked the IDF Naval personnel with live fire and light weaponry including knives and clubs. Additionally one of the weapons used was grabbed from an IDF soldier. The demonstrators had clearly prepared their weapons in advance for this specific purpose.

As a result of this life-threatening and violent activity, naval forces employed riot dispersal means, as well as live fire.

According to initial reports, these events resulted in the deaths of nine demonstrators and seven naval personnel were injured, some from gunfire and some from various other weapons. Two of the soldiers are moderately wounded and the remainder sustained light injuries. All of the injured, Israelis and foreigners have been evacuated by helicopter to hospitals in Israel.

Reports from IDF forces on the scene are that it seems as if part of the participants onboard the ships were planning to lynch the forces.

The interception of the flotilla followed numerous warnings given to the organizers of the flotilla before leaving their ports as well as while sailing towards the Gaza Strip. In these warnings, it was made clear to the organizers that they could dock in the Ashdod sea port and unload the equipment they are carrying in order to deliver it to the Gaza Strip


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Phil's Favorites

China's worldwide investment project is a push for more economic and political power

 

China's worldwide investment project is a push for more economic and political power

Courtesy of Amitrajeet A. Batabyal, Rochester Institute of Technology

Inspired by the ancient Silk Road, China is investing in a massive set of international development projects that are raising concerns about how the country is expanding its power around the world.

Initially announced in 2013 by Chinese President Xi Jinping, the so-called “Belt and Road Initiative” has China planning to invest in e...



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Zero Hedge

Brexit-Bounce Fades As Short-Interest-Slump Signals Crash Concerns

Courtesy of ZeroHedge View original post here.

Surprise!! After Q3's "use it or lose it" spending spree sent US macro data soaring unilaterally, October has begun with a collapse...

Source: Bloomberg

A trade deal (or not)? Brexit deal (or not)? Turkey peace deal (or not)? But retail sales s...



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Kimble Charting Solutions

Bank Index Breakout? Stock Market Bulls Sure Hope So

Courtesy of Chris Kimble

One of the most important sectors of the stock market is the banking industry and bank stocks.

When the banks are healthy, the economy is likely doing well. And when bank stocks are participating in a market rally, then it bodes well for the broader stock market.

In today’s chart, we look at the Bank Index (BKX).

As you can see, the banks have been in a falling channel for the past 20 months. As well, the banks have been lagging the broader market during this time as well – see the Ratio in the bottom half of the chart above.

That said, th...



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Insider Scoop

Citigroup Appoints New Head Of Asia Pacific Business

Courtesy of Benzinga

American multinational financial services corporation Citigroup Inc. (NYSE: C) has appointed Peter Babej as the new chief executive officer of its Asia Pacific region, a memo sent to staff by Citi global CEO Mike Corbat shows. Babej previously served as the bank’s global head of financial institutions group.

He joined Citi in 2010 to co-head the company’s financial institutions...



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The Technical Traders

Market Trend Change Triggered Today

Courtesy of Technical Traders

CLICK HERE TO GET REAL TIME TRADE ALERTS!

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Chart School

Review of Andrew CardWell RSI with Wyckoff price waves

Courtesy of Read the Ticker

RSI measures relative strength of price action of a set period versus prior set periods. It helps review the price swings or waves, the power of each price thrust into new ground, or lack of it. Price thrust like many things relies on energy, and energy is not a constant, it has a birth, a life and a death and relative strength helps us see that cycle. 

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Chart in video

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Digital Currencies

Zuck Delays Libra Launch Date Due To Issues "Sensitive To Society"

Courtesy of ZeroHedge View original post here.

Authored by William Suberg via CoinTelegraph.com,

Facebook is taking a much more careful approach to Libra than its previous projects, CEO Mark Zuckerberg has confirmed. 

“Obviously we want to move forward at some point soon [and] not have this take many years to roll out,” he said. “But ...



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Lee's Free Thinking

Look Out Bears! Fed New QE Now Up to $165 Billion

Courtesy of Lee Adler

I have been warning for months that the Fed would need new QE to counter the impact of massive waves of Treasury supply. I thought that that would come later, rather than sooner. Sorry folks, wrong about that. The NY Fed announced another round of new TOMO (Temporary Open Market Operations) today.

In addition to the $75 billion in overnight repos that the Fed issued and has been rolling over since Tuesday, next week the Fed will issue another $90 billion. They’ll come in the form of three $30 billion, 14 day repos to be offered next week.

That brings the new Fed QE to a total of $165 billion. Even in the worst days of the financial crisis, I can’t remember the Fed ballooning its balance sheet by $165 bi...



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Biotech

The Big Pharma Takeover of Medical Cannabis

Reminder: We are available to chat with Members, comments are found below each post.

 

The Big Pharma Takeover of Medical Cannabis

Courtesy of  , Visual Capitalist

The Big Pharma Takeover of Medical Cannabis

As evidence of cannabis’ many benefits mounts, so does the interest from the global pharmaceutical industry, known as Big Pharma. The entrance of such behemoths will radically transform the cannabis industry—once heavily stigmatized, it is now a potentially game-changing source of growth for countless co...



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Mapping The Market

How IPOs Are Priced

Via Jean Luc 

Funny but probably true:

...

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Members' Corner

Despacito - How to Make Money the Old-Fashioned Way - SLOWLY!

Are you ready to retire?  

For most people, the purpose of investing is to build up enough wealth to allow you to retire.  In general, that's usually enough money to reliably generate a year's worth of your average income, each year into your retirement so that that, plus you Social Security, should be enough to pay your bills without having to draw down on your principle.

Unfortunately, as the last decade has shown us, we can't count on bonds to pay us more than 3% and the average return from the stock market over the past 20 years has been erratic - to say the least - with 4 negative years (2000, 2001, 2002 and 2008) and 14 positives, though mostly in the 10% range on the positives.  A string of losses like we had from 2000-02 could easily wipe out a decades worth of gains.

Still, the stock market has been better over the last 10 (7%) an...



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Promotions

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Phil has a chapter in a newly-released eBook that we think you’ll enjoy.

In My Top Strategies for 2017, Phil's chapter is Secret Santa’s Inflation Hedges for 2017.

This chapter isn’t about risk or leverage. Phil present a few smart, practical ideas you can use as a hedge against inflation as well as hedging strategies designed to assist you in staying ahead of the markets.

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About Phil:

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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Ilene is editor and affiliate program coordinator for PSW. She manages the site market shadows, archives, more. Contact Ilene to learn about our affiliate and content sharing programs.

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