Monday, April 23, 2012

Eric Sprott : China big Buyer of Gold and Silver

GoldSeek Radio's Chris Waltzek talks to ERIC SPROTT - April 17, 2012 . Eric Sprott, Chairman of Sprott Asset Management, and Chris Waltzek of GoldSeek Radio, talk about the outlook for Precious metals . They comment on how increasing interventions by central banks, from zero interest rates to money printing and bond buying have completely distorted the financial markets.

Paper money has NOT been around for 'hundreds of years'. Paper money after the American Civil War could be traded in for gold or silver. That ended for gold in the 1930's and for silver in the early 1960's. Paper currency that has an intrinsic value, 1 dollar silver certificate meant you could exchange it for silver coins. Holding the paper money was like holding the physical metal. Fiat money has no intrinsic value. It is paper!

MAKE SURE YOU GET PHYSICAL SILVER IN YOUR OWN POSSESSION. Don't Buy SLV, or Futures or Pooled Accounts or any other BS paper silver product .Remember anything on paper is worth the paper it is written on. Go Long Stay long the bull market have even started yet

Turk - The Most Important & Extraordinary Chart for 2012

With continued volatility in global stock and commodities markets, today King World News interviewed James Turk out of Europe. Turk exclusively sent KWN what he calls "the most important and extraordinary chart for 2012."

But first, here is what Turk had to say about the action in gold and silver, and what investors should expect going forward:

"The spring is already coiled, Eric, but it is being wound tighter and tighter by this relentless testing of support. For more than a month, gold and silver have been confined to a very narrow trading range.

... The precious metals bend a little with these bouts of selling pressure being put on them. But they come right back, which is why I describe them like a spring being wound up. So when this spring starts to unwind, which it will, look out above.  (more)

Russia Could Completely Run Out of This Rare Metal by 2014

I like to consider myself a contrarian [1] investor. Zigging when others are zagging is usually the surest way to find underpriced stocks and avoid overheated ones that are due for a pullback.

But this time, the crowd just might be right.

As it turns out, analysts and investors have been singing the same tune -- at least when it comes to the outlook for a certain rare metal.

Let me explain...

Back in January, I made a bullish call on platinum in my Scarcity & Real Wealth [2] advisory and pointed out a few reasons why it was likely to bounce in 2012. At the time, the metal was trading for $1,360 an ounce -- today, it sells for about $1,600 an ounce.

Meanwhile, the ETFS Physical Platinum Fund (NYSE: PPLT [3]) has already climbed about 15% for the year.

So far, so good.

As a close sibling, palladium shares many of the same traits and uses, most notably as a key component in automobile catalytic converters. The main difference is that palladium has historically been favored in gasoline engines, whereas platinum is more common in diesel.

But diesel makers are increasingly turning to palladium because it's cheaper.

Global carmakers are widely expected to roll out 80 million vehicles this year. Those cars and trucks will leave the assembly lines with 6.24 million ounces of palladium -- 6% more than what was consumed last year and a new record high, according to Barclays Bank,.

Where will the metal come from?

Russia's main mining giant is more concerned with nickel production (which accounts for 90% of sales). And South African producers have been plagued by energy shortages and labor disputes. The country's output is expected to be the thinnest in years.

This will likely be the sixth consecutive year of falling global mine production.

To cover the shortfall, palladium suppliers have been dipping into secondary, above-ground sources, namely a strategic stockpile in Russia. But this key source is running dry and may almost be depleted.

With more cars on the road and fewer supplies coming out of key mines, market forecasters are bracing for a palladium shortage of 215,000 ounces this year. And thanks to the introduction of commodities-backed exchange-traded funds (ETFs), it's pretty easy to gauge the investment community's appetite for specific metals.

Russia shipped just 500,000 ounces of palladium ingots and powder to Switzerland (one of Europe's two main storage hubs) in 2010, the lowest amount in 15 years. Barclays says Russian shipments will plunge to just 300,000 ounces this year and may be exhausted altogether by 2014.

Right now, people are clearly hungry for palladium.

This deficit [4] is a big reason why ETF investors from New York to Zurich are suddenly hoarding the metal.

There are 58.9 metric tons of palladium stockpiled in ETF bank vaults, according to Bloomberg. This total represents a healthy 14% increase in palladium fund holdings since the start of the year -- the strongest quarterly increase since 2010.

Palladium prices on the London Metals Exchange have been essentially flat, but fund assets have been rising sharply, thanks to new inflows from shareholders -- cresting at $1.23 billion last week.

It's no coincidence that 11 top metals analysts are forecasting palladium to surge to $850 an ounce by the end of 2012.

This implies a 33% increase from current levels near $640, which easily bests the price appreciation [5] outlook for silver (13%) and gold (15%).

Action to Take --> In 2001, the last time we saw a major supply shortage, panicked buyers went on a binge that pushed palladium spot [6] prices to a record $1,100 per ounce.

There may not be a repeat of that, but there are sound reasons why palladium remains a good long-term bet. The metal exhibits many of the characteristics that I pound on the table in my Scarcity & Real Wealth [2] advisory -- it's a scarce (and dwindling) resource with growing global demand and real tangible wealth. In a world of crooked politicians, paper money and ballooning government debt, it's essential that investors own investments exactly like this one.

First Trust Global Platinum (Nasdaq: PLTM [7])
is an ETF that offers undiluted exposure to platinum and palladium producers. The fund enjoyed a nice 8.3% bounce in the first quarter, but I think there are more gains in store for shareholders through the remainder of 2012.

Traders may want to make financials their go-to sector if we see a more meaningful correction

U.S. stocks had a wonderful start to 2012, and currently the S&P 500 is still up around 10% for the year. In Europe, however, things look much different. The Euro Stoxx 50 was up 12.5% at its best this year, and now is in the red, down 1.4% for the year.
While there are somewhat different dynamics at work in Europe, I would like to point out the historical spread between the S&P 500 and the Euro Stoxx 50 indexes.
 SPX vs Euro Stoxx Chart
Click to Enlarge

The middle of the chart shows that the spread is at historic highs, which either means the Euro Stoxx 50 has to rise in relation to the S&P 500, or the S&P 500 has to fall and catch up with the Euro Stoxx 50.
At the bottom of the chart, also note the historic correlation of the two indices is always positive. There certainly is the off-chance that “this time it’s different,” but as traders we must focus on the higher probability setups and that means giving a mean-reversion trade such as this the benefit of the doubt.
SPX Chart
Click to Enlarge

On April 10, the S&P 500 held the uptrend dating back to the Oct. 4 low, and over the past few days continued retesting that very uptrend. The 50-day simple moving average has been useless as support and resistance, as I always point out to subscribers. Yet from a broader perspective, if the S&P 500 were to break below the macro uptrend, then 1,340 and 1,300 should be the next viable downside targets.
SPX 60-Minute Chart
Click to Enlarge

If we look at this a little closer on the S&P 500 15-day 60-minute chart, note that we have retraced 61.8% of the move from 1,422 down to the recent lows at 1,357. In addition, we are now seeing a bear flag formation that also has a first target at 1,340.
SOX Chart
Click to Enlarge

The semiconductor complex as measured by the Philadelphia Semiconductor Index (SOX) put in a lower high, and by so doing, failed to confirm the higher high that the S&P 500 has given us.
Of course, individual stocks such as Intel (NASDAQ:INTC) have done great this year, in line with the S&P 500 making new highs. Either way, a confirmation by the SOX would be one checked box that would make me feel more at ease if I were net long stocks at this juncture.
XLF Chart
Click to Enlarge

That brings us to the financials, which were the best-performing sector in the first quarter. Even after some profit-taking in individual names following their first-quarter earnings announcements, on the whole they remain healthy looking. Yet the sector is very much disliked even after having been on the bench for the better part of the past four years. If and when we get a more meaningful price correction  in U.S.equities this year, the financials remain my preferred go-to sector at such time. 
While the bears had a real chance to make a statement yesterday, they again gave in to the bulls who bought into the market during the last hour. Nevertheless, the above charts of the S&P 500 show that we are very close to potentially seeing 1,340. Should yesterday’s lows or thereabouts hold, we still have a shot at revisiting 1,420 and possibly above, but the bulls have to fight hard.

Chart of the Day - Chubb Corp (CB)

The "Chart of the Day" is Chubb Corp (CB), which showed up on Thursday's Barchart "All-Time High" list. Chubb on Thursday posted a new all-time high of $72.46 and closed up 2.15%. TrendSpotter has been Long since April 2 at $69.80. Chubb on Thursday reported Q1 EPS of $1.70, well above the market consensus of $1.52. Chubb on Feb 23 increased its quarterly dividend by 5.1% to 41 cents per share from 31 cents. Chubb Corp, with a market cap of $19 billion, is a leading provider of property and casualty insurance.


The 10 Best Interview Questions to Ask

When your interviewer wraps up your job interview by asking if you have any questions, you might think that he or she is finished assessing you, but that's not quite the case. Interviewers draw conclusions about you based on the questions you ask--or don't ask. You don't want to give the impression that you're not very interested in the job, or that you're only concerned about the compensation. Instead, ask about the work, company, and team. Here are 10 great questions for your interviewer:

1. What are the biggest challenges the person in this position will face?

This question shows that you don't have blinders on in the excitement about a new job; you recognize that every job has difficult elements and that you're being thoughtful about what it will take to succeed in the position.

2. Can you describe a typical day or week in the position?

This question shows that you're thinking beyond the interview and that you're visualizing what it will be like to do the work itself. This is different from many candidates, who appear to be focused solely on getting the job offer without thinking about what will come after that.

3. What would a successful first year in the position look like?

Asking this shows that you're thinking in the same terms that a manager does--about what the position needs to contribute to the team or company to be worthwhile. You'll also sound like someone who isn't seeking to simply do the bare minimum, but rather to truly achieve in the role. (more)