Archive for 2010

The Gold Bulls Are Vindicated

Courtesy of madhedgefundtrader

For the faithful who have crossed the desert and suffered the slings and arrows of critics and the ridicule of non believers, gold’s move today to an all time high of $1,286 delivers the greatest of all vindications. All it took was some comments by Ben Bernanke about quantitative easing triggering dollar weakness, and it was off to the races.

It didn’t hurt that the Indian wedding season, the largest annual purchaser of gold, is just beginning. Actually, it wasn’t much of a desert, maybe more of a Zen rock garden, as the barbarous relic sold off for only six weeks, down to $1,155, before it resumed its recent ascent. The Chinese buying I predicted put a floor under the price much higher than traders anticipated, frustrating hoards of buyers lower down (click here for “China’s Insatiable Appetite for Gold” at http://www.madhedgefundtrader.com/august-30-2010-3.html ).

So now the question arises of what to do with your bounteous profits, and how much risk does the yellow metal present here? I get asked this question a dozen times a day, by some who have been long since the current move started more than a decade ago at $260, and others who stood on the sidelines and watched in awe as it went to the moon, kicking themselves all the way. Is it too late to get in?

They call the yellow metal the barbarous relic for a reason. Let’s face it. We’ve had a great run. Gold is one of the top performing assets of 2010 by a long shot, soaring 16% YTD to its peak today, when most other asset classes sucked. Investors did even better in the futures, leveraged ETF’s like the (UGL), and gold mining shares or their out of the money calls.

If you are the world’s greatest day trader, and think you can grab something here on the short side, then go ahead and knock yourself out. But you will be going against the long term trend. Obama has not suddenly turned into a paragon of fiscal rectitude, and Ben Bernanke still has the keys to the printing presses. The Fed has yet to even admit its role in the credit bubble of the last decade. Fiat paper currencies are still running a frenzied race to the bottom. Politicians of both parties see the only way to win elections…
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Swing trading virtual portfolio – week of September 20th, 2010

This post is for live trades 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. 

Please feel free to participate in the discussion and ask any questions you might have about this virtual portfolio, by clicking on the "comments" link right below.

To learn more about the swing trading virtual portfolio (strategy, performance, FAQ, etc.), please click here

 

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Bill Buckler Discusses The Last Price Standing Of “True Money”, Answers The Only Question Relevant To Gold Bugs

Courtesy of Tyler Durden

Bill Buckler, publisher of The Privateer Report, has released one of the most scathing critiques of paper money we have read to date: “Before it can be exchanged, wealth must be created. Wealth cannot be created out of thin air. By definition, an economic good is “scarce”. If it were not, there would be no such thing as economics or exchange. Neither would be necessary because no effort or choice in the face of alternatives would be required in order to provide the GOODS which further our lives. Before we can talk about money and the VITAL role it performs, we must stress this point. Money is NOT wealth, it is the means by which wealth is exchanged amongst those who produce it. Paper money is not suited to this function.” So what is the only rational investment in times in which money’s role is so often confused by pretty much everyone? “Ninety-seven percent of all existing Treasury debt has been created since August 15, 1971! Ninety-three percent of it has been created since Mr Volcker “saved” the paper Dollar in late 1979! Please note that the gain in Treasuries and the loss in the US Dollar almost exactly cancel out. Please note also that even the biggest gain in these paper markets fades into insignificance against Gold’s rise.”And here is the answer all the “gold bugs” have been waiting for: “The paper money “price” of Gold will last as long as the attempt to make paper money “work” lasts. In the end, Gold will no longer have a “price” because it has reverted to its role as MONEY. Whenever and wherever that happens, that nation can return to the production of wealth – rather than “money.”

Buckler’s brilliant observations on the inevitable death of fiat, and gold’s ascent to the status of “last price standing”, need no commentary.

From the Mid-September Issue of the must read Privateer Report

THE LAST PRICE STANDING

Just under eleven months from now, on August 15, 2011, there will be an anniversary that will get little if any coverage in the global financial media. August 15, 2011 will mark 40 years since the momentous decision taken by the Nixon administration to cut the last tie between Gold and the global reserve currency, the US Dollar. We have no idea what the…
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Weekly Review And Upcoming Weekly Events Calendar

Courtesy of Tyler Durden

Via Goldman Sachs

Week in Review

Japan intervenes Prime minister Naoto Kan successfully survived a party leadership challenge this week, which was greeted by the markets with additional Yen strength. In response, the government intervened to weaken the Yen, the first time the government has done so since 2004. $/JPY moved sharply from close to 83.00 before the intervention to above 85.00 for much of the rest of the week. As Thomas Stolper wrote in this week’s FX Views, in the event this “big-splash” intervention was successful because positioning was stretched and because the Yen is significantly overvalued against USD. That said, over the next 6 months the impact of QE2 in the US, persistent Japanese trade surpluses, and markets wanting to test the authorities’ resolve could result in marginal new lows below 79. In this case, more intervention is likely. The political environment is not supportive of Japan continuously intervening to defend specific levels as in the past.
 
Central bank meetings In India, the RBI hiked policy rates, and subsequent commentary from the central bank’s deputy later in the week signaled continued concern over inflation. The central bank of Chile also hiked as expected, while the Reserve Bank of New Zealand stayed on hold, also as expected, citing disruptions to economic activity from the earthquake earlier this month. The Swiss National Bank also kept policy on hold, but issued a very dovish statement that revised the inflation forecast down sharply, warning of possible negative inflation in early 2011, and pointed to slowing growth in 2011 as a result of the CHF appreciation.
 
EUR/$ up
In the markets, EUR/$ rose about 3% last week. This rise came amid renewed focus on the Euro zone periphery, with Irish CDS making new highs and the ECB reportedly buying small amounts of Irish debt. Rumors that Ireland will soon seek an IMF program and EFSF support were denied by the IMF, which does not envision Ireland needing financial assistance. More important in our view, the outlook for Spain continues to improve slowly, as Erik Nielsen has noted, with growth in Q3 not pointing to substantial weakness and banks scaling back slightly their dependence on ECB liquidity. The SPX strengthened about 1.5% for the week, while the VIX was flat.
 
Week Ahead

 
FOMC
While we think the FOMC is likely to commence QE2 – another round of asset purchases…
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NEW LONG-TERM BUY SIGNAL

NEW LONG-TERM BUY SIGNAL

Courtesy of Carl Swenlin at Decision Point

Today another long-term buy signal was generated when the S&P 500 Index 50-EMA crossed up through the 200-EMA. Normally, we have high confidence in these signals, but, unfortunately, the long-term model has generated four, count ‘em, four “long-term” signals in less than three months. On the chart below the red arrows mark the sell signals and the green arrows the buy signals. Prices have entered a trading range and, as you can see, they move just far enough in one direction to trigger a signal, then they reverse and go just far enough in the opposite direction to trigger the reverse signal.

Chart

This is not typical of how the model usually works, but any mechanical model will eventually run into rough patches where peculiar price movement defeats them. This is one of those times, and as long as the 50-EMA keeps making these shallow cuts back and forth, our confidence in the signals will not be robust.

The chart below shows a three-year time frame, and the first two signals (sell in January 2008; buy in August 2009) are what we would classify as normal. Note that the 50/200-EMA cuts are relatively steep and are quickly confirmed by price movement.

Chart

Our long-term signals are used primarily to identify the long-term trend of the market so as to have a context within which to make decisions in the intermediate-term time frame. Nevertheless, we expect the model to have a profitable record over time, and it does. See our Timer Digest rankings rankings through the link on this page or on the website.

Bottom Line: The question now is how much faith do we put in this new buy signal. Since it is a buy signal, I would say that it gives the bulls a slight advantage, but my confidence will really blossom when prices break through the overhead resistance at about 1130 that has stopped progress three times since June. 





BP and Government Representatives Still Keeping Scientists and Reporters Away from Areas Impacted by Oil

Courtesy of George Washington

As shown by the following videos, BP and government representatives are still keeping scientists and reporters away from areas impacted by oil.

WEAR ABC news documented yesterday that federal agents are preventing reporters from digging in the sand to look for oil:

YouTube Video

Award-winning investigative reporter Dahr Jamail says in a new interview that a federal agent confiscated Gulf oil samples:

YouTube Video

Representatives of the oil spill commission are harassing independent scientists who are finding contamination in the Gulf, and questioning whether they have permits to even take samples:

Scientists’ samples have been confiscated by the police and – according to someone calling in to NPR’s Science Friday show and claiming to be an adjunct professor at Texas A & M – by homeland security:

YouTube Video

And see this and this.





China-Japan Tensions Escalate, As China Breaks Off High Level Contacts, Japanese Flag Burned In Protest

Courtesy of Tyler Durden

On the anniversary of the 1931 Japanese invasion of China, tensions between the world’s second and third largest economies are escalating. The Associated Press reports that late Sunday, China broke off high-level government contacts with Japan “over the extended detention of a fishing boat captain arrested near disputed islands. The rare move pushed already tense relations to a new low, and showed China’s willingness to play hardball with its Asian rival on issues of territorial integrity.” The latest straw on the camel’s back was the detention of a Chinese fishing boat and its captain, after it hit two Japanese Coast Guard boats in the East China Sea, a territory claimed by both countries, as previously reported by Zero Hedge.Furthermore, ” the captain’s detention for further questioning — pending a decision about whether to press charges — has inflamed ever-present anti-Japanese sentiment in China.” China reaction has been swift and merciless, proving just great the ego of the now second largest economy, and largest holder of US debt, has become: “Beijing has suspended ministerial and provincial-level contacts, halted talks on aviation issues and postponed a meeting to discuss coal.” Also, attached pictures of Japanese flag burning can not instill much confidence in Sino-Japanese relations stabilizing any time soon.

More from AP:

“If Japan acts willfully, making mistake after mistake, China will take strong countermeasures, and all the consequences will be borne by the Japanese side,” Chinese Foreign Ministry spokesman Ma Zhaoxu said in a statement.

Takeshi Matsunaga, a spokesman for Japan’s Foreign Ministry, said the reported measures were unilateral.

“We ask China to respond calmly so as not to escalate the problem further,” he said.

The move raises questions about cooperation between China and Japan at international forums such as this week’s summit in New York on United Nations goals to fight poverty, which Chinese Premier Wen Jiabao and Japanese Prime Minister Naoto Kan are attending.

It also throws into doubt whether China’s President Hu Jintao will attend the annual summit of Asia-Pacific Economic Cooperation forum leaders to be held in Yokohama, Japan, in November. Leaders of the two countries were also due to attend a G-20 summit in Seoul the same month.

This is the lowest bilateral relations have fallen to since they were strained under former Prime Minister Junichiro Koizumi, whose repeated visits to a


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Presenting Capital-Based Macroeconomics, An Overview Of The Austrian School And The Business Cycle

Courtesy of Tyler Durden

The recent surge in the prominence of Austrian economics is no surprise: with Hayek’s Road to Serfdom recently becoming Amazon’s most popular book, it is more than evident that more and more Americans are, if not converting away from Keynesianism (because it truly is far more a religion, and a flawed one at that, than an economic theory – after all any ‘theory’ that has been disproved as many times as John M. Keynes’ mutated Frankenstein monster would have long been set to rest on the trash heap of failed social inventions) then certainly looking at far more plausible alternatives. Of which the Austrian school of economics is certainly one. For all those who are still confused about the far more rational and sensible approach of Austrian theory and Capital-based macroeconomics, the attached 50 minute presentation by Robert Garrison is a must watch.

And for those who wish to read more, courtesy of Mises, here is a detailed explanatory primer on Austrian Business Cycle Theory.

Austrian Business Cycle Theory: A Brief Explanation

Mises Daily: Monday, May 07, 2001 by Dan Mahoney

The media’s favorite phony solution to the economic downturn is for the Fed to drop interest rates lower and lower until the economy registers an upturn. What is wrong with this approach? Printing money—which is what reducing interest rates below the market rate amounts to—is an artificial means of recovering from the very real effects of an artificial boom. This point, however, is completely lost on most commentators, because they haven’t the slightest understanding of the Austrian theory of the business cycle.

This article gives a brief overview of the theory, which provides an explanation of the recurrent periods of prosperity and recession that seem to plague capitalist societies. As Salerno (1996) has argued, the Austrian business cycle theory is in many ways the quintessence of Austrian economics, as it integrates so many ideas that are unique to that school of thought, such as capital structure, monetary theory, economic calculation, and entrepreneurship. As such, it would be impossible to adequately explain so rich a theory in a short note. (See Rothbard [1983] for greater details.) However, an attempt will be made here to indicate how those relevant ideas come together in a unified framework.

Man is confronted with a world of physical scarcity. That is, not all…
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Preserve and Protect: The Jaws Of Death

Courtesy of Gordon T. Long of Tipping Points

Preserve and Protect: The Jaws Of Death

The United States is facing both a structural and demand problem – it is not the cyclical recessionary business cycle or the fallout of a credit supply crisis which the Washington spin would have you believe.

It is my opinion that the Washington political machine is being forced to take this position, because it simply does not know what to do about the real dilemma associated with the implications of the massive structural debt and deficits facing the US.  This is a politically dangerous predicament because the reality is we are on the cusp of an imminent and significant collapse in the standard of living for most Americans.

The politicos’ proven tool of stimulus spending, which has been the silver bullet solution for decades to everything that has even hinted of being a problem, is clearly no longer working. Monetary and Fiscal policy are presently no match for the collapse of the Shadow Banking System. A $2.1 Trillion YTD drop in Shadow Banking Liabilities has become an insurmountable problem for the Federal Reserve without a further and dramatic increase in Quantitative Easing. The fallout from this action will be an intractable problem which we will face for the next five to eight years, resulting in the ‘Jaws of Death’ for the American public.

The ‘Jaws of Death’ is the crushing squeeze of a shrinking gap between incomes and a rising burden of the real cost of debt burdens. Many may say there is nothing new in this, but I would respectfully disagree. There is a widespread misperception of what is actually evolving that stops voters from forcing politicians to address America’s substantial underlying dilemma.  It also stops investors from positioning themselves correctly.

Any solutions of real substance are presently considered political suicide. It is wiser to wait for a crisis event to unfold. As White House Chief of Staff and a primary Obama political strategist, Rahm Emanuel has said on numerous occasions: “You never want a serious crisis to go to waste”. It doesn’t take much intelligence to understand this also implies looking for a crisis as a political shield, for example from an almost insurmountable political problem such as a generational reduction in the US standard of living.

Before I delve into misperceptions of…
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Eric King Interviews Eric Sprott, Art Cashin

Courtesy of Tyler Durden

A couple of insightful interviews, brought to you by King World News. In the first one Art Cashin goes off on a astrological tangent, discussing how the autumnal equinox may or may not impact the critical 1,130 resistance level. According to the cocktail napkins things may get heated… or not. In other words prepare for a market that may surge… or plunge. Elsewhere, Eric King discusses the drop in the NAV premium on the PHYS (quite relevant in light of the recent second follow on offering for the physical gold ETF), gold common stocks, and the imminent rush for M&A in gold small and mid cap companies. Indeed, all that borbadment about cash on the sidelines in other sectors leading to a renaissance in acquisitions is more than relevant for the gold sector: look for some material moves higher as expectations of consolidation in the precious metal space spread like wildfire through the market.

Cashin interview link.

Sprott interview link.

 





 
 
 

Phil's Favorites

Overpriced tech IPOs sell grand visions but aren't worth their valuations

 

Overpriced tech IPOs sell grand visions but aren't worth their valuations

rblfmr / Shutterstock.com

Courtesy of John Colley, Warwick Business School, University of Warwick

The year of the tech IPO is 2019. Uber went public on May 10 with a US$82.4 billion valuation. Fellow ride-sharing app Lyft floated in March with a U$24 billion valuation and Pinterest had a US$10 billion IPO in April...



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Zero Hedge

Futures Slides As Trade Tensions Escalate

Courtesy of ZeroHedge. View original post here.

S&P futures were lower on Wednesday as investors sought safety in bonds, the Japanese yen and Swiss franc in muted trade amid renewed worries over the U.S.-China spat after reports Washington is considering cutting off the flow of American technology to as many as five Chinese companies including Hangzhou Hikvision Digital Technology, the world's largest supplier of video surveillance products, expanding the US crackdown on China beyond Huawei to include world leaders in video surveillance. The dollar and 10Y yield were unchanged ahead of today's FOMC Minutes.

...



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Kimble Charting Solutions

Emerging Markets About To Submerge If 3-Year Support Breaks?

Courtesy of Chris Kimble.

Are Emerging Markets about to “Submerge” and head a good deal lower? What they do at (3) will go a long way in answering this question!

Emerging Markets ETF (EEM) has been lagging the broad market for the past 15-months. They hit their 50% retracement level of the last year’s highs and lows and falling resistance at (2) recently. The weakness of last has EEM trading below its 200-MA line.

EEM has spent the majority of the past 3-years inside of rising channel (1), which reflects that this trend remains up. The weakness of late has it testing the bo...



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Insider Scoop

Amgen To Buy Danish Collaborator Nuevolution For $167M

Courtesy of Benzinga.

Amgen, Inc. (NASDAQ: AMGN) took a logical step forward in buying a preclinical biotech it has been collaborating with since 2016. 

What Happened

Amgen announced Wednesday an agreement to buy Copenhagen-based Nuevolution for $167 million.

Th...



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Chart School

Weekly Market Recap May 18, 2019

Courtesy of Blain.

China – U.S. trade talk continued to dominate the week.   A heavy selloff Monday was followed by 3 up days, with Friday moderately down.

On Monday, Chinese officials announced retaliatory tariffs against the U.S., hitting $60 billion in annual exports to China with new or expanded duties that could reach 25%.

Then on Wednesday:

The Trump administration plans to delay a decision on instituting new tariffs on car and auto part imports for up to six months, according to media reports.

...

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Digital Currencies

Cryptocurrencies are finally going mainstream - the battle is on to bring them under global control

 

Cryptocurrencies are finally going mainstream – the battle is on to bring them under global control

The high seas are getting lower. dianemeise

Courtesy of Iwa Salami, University of East London

The 21st-century revolutionaries who have dominated cryptocurrencies are having to move over. Mainstream financial institutions are adopting these assets and the blockchain technology that enables them, in what ...



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Biotech

DNA as you've never seen it before, thanks to a new nanotechnology imaging method

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

 

DNA as you've never seen it before, thanks to a new nanotechnology imaging method

A map of DNA with the double helix colored blue, the landmarks in green, and the start points for copying the molecule in red. David Gilbert/Kyle Klein, CC BY-ND

Courtesy of David M. Gilbert, Florida State University

...



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ValueWalk

More Examples Of "Typical Tesla "wise-guy scamminess"

By Jacob Wolinsky. Originally published at ValueWalk.

Stanphyl Capital’s letter to investors for the month of March 2019.

rawpixel / Pixabay

Friends and Fellow Investors:

For March 2019 the fund was up approximately 5.5% net of all fees and expenses. By way of comparison, the S&P 500 was up approximately 1.9% while the Russell 2000 was down approximately 2.1%. Year-to-date 2019 the fund is up approximately 12.8% while the S&P 500 is up approximately 13.6% and the ...



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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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Mapping The Market

It's Not Capitalism, it's Crony Capitalism

A good start from :

It's Not Capitalism, it's Crony Capitalism

Excerpt:

The threat to America is this: we have abandoned our core philosophy. Our first principle of this nation as a meritocracy, a free-market economy, where competition drives economic decision-making. In its place, we have allowed a malignancy to fester, a virulent pus-filled bastardized form of economics so corrosive in nature, so dangerously pestilent, that it presents an extinction-level threat to America – both the actual nation and the “idea” of America.

This all-encompassing mutant corruption saps men’s souls, crushes opportunities, and destroys economic mobility. Its a Smash & Grab system of ill-gotten re...



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OpTrader

Swing trading portfolio - week of September 11th, 2017

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

 

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. 

Please feel free to participate in the discussion and ask any questions you might have about this virtual portfolio, by clicking on the "comments" link right below.

To learn more about the swing trading virtual portfolio (strategy, performance, FAQ, etc.), please click here ...



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Promotions

Free eBook - "My Top Strategies for 2017"

 

 

Here's a free ebook for you to check out! 

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.

Some other great content in this free eBook includes:

 

·       How 2017 Will Affect Oil, the US Dollar and the European Union

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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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