Thursday, July 8, 2010

Totalinvestor Special Situation Trade

The Direxion Daily Financial Bull Shares seeks daily investment results, before fees and expenses, of 300% of the price performance of the Russell 1000® Financial Services Index (more info here).
Yesterday the financials had a strong day and this stock was up 12.4%.
The charts are telling us that there is a positive divergence between the stock price vs the RSI and MACD. Another plus is the stock broke through the previous recent lows around $20 on good volume.
One big negative is the 200 and 50 day moving averages have crossed and both trending down suggesting the primary trend is still down, so this is a short term trade for now with significant risk. ***Not investment advice***

McAlvany Weekly Commentary, July 7, 2010

The Importance of Turkey: An Interview with Kamran Bokhari

About the Guest:

Kamran Bokhari is STRATFOR’s Regional Director of Middle East and South Asia Analysis. Mr. Bokhari has published numerous analytical, scholarly, and theoretical articles related to geopolitics of the Islamic world. Bokhari is also the author of a forthcoming book on radical/militant Islamist political thought, entitled “Voices of Jihad: New Writings on Radical Islam’.

To read one of his latest articles Click Here

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Bubble, Bubble, Oil in Trouble

Oil prices rose Wednesday after six straight days of trading declines. Prices closed at $74.07 a barrel, up $2.10, or close to 3%, for the day. Still, prices remain down about 9% for 2010 and about 15% from their high-water mark of $86.15 a barrel, set in early May, just after BP's (BP: 33.19, +1.28, +4.01%) catastrophic oil spill in the Gulf of Mexico. That's a worrisome indicator for the pace and health of the global economic recovery.

Because crude prices reflect changes in energy demand, they're a good bellwether for growth, but a host of factors, from the spill and offshore drilling moratorium in the Gulf to a slowdown in China, have left oil prices without a clear direction. Energy experts say that as long as crude prices keep bobbing up and down like the tar balls washing toward Louisiana beaches, investors can expect few answers and a bit more pessimism. (more)

Buy Precious Metals and Rice as `Refuge,' Sell Bonds, Jim Rogers Advises

Investors should sell bonds and buy commodities like silver and rice as a “refuge” as the world economy may continue having problems, Jim Rogers, chairman of Rogers Holdings said.

“Bonds are not a good place to invest in,” Rogers said at a conference in Kuala Lumpur today. “You should own commodities because that’s your only refuge” whether it’s silver or rice, said Rogers, who predicted the start of the global commodities rally in 1999.

Gold has gained 8.3 percent this year, leading advances in precious metals, as investors seek haven assets to protect their wealth amid concern the global economic recovery will falter. Still, commodities overall capped their worst quarter in more than a year on investors’ concern that slower growth from China to the U.S. will sap demand. (more)

The Dollar Test

Last month technical analyst Chris Kimble gave us an interesting look at the Dollar in a rising channel. Today he gives us an update.

Chris comments: Just a short of a month ago, I suggested that the Dollar could "cool off" from its steep rise, on account of the strong overhead resistance.

In the past month, the Dollar has declined almost 4% and the oversold Euro has rallied.

Now the Dollar finds itself on a support line that dates back to December of 2009. This support line is the first big "test of strength" for the Dollar in the past 90 days.

As usual, the impact of what the Dollar does here, will have a sizeable ripple effect on many asset classes.

Why Google is not feeling lucky

( -- Perhaps it's time for Google to be evil.

Shares of the Internet advertising giant had fallen for 13 consecutive trading sessions before finally rallying Wednesday. During that unlucky stretch, Google's stock plunged (coincidentally?) 13%, erasing about $20.8 billion in market value.

The stock rose more than 3% Wednesday along with the broader market. That was despite a price target cut by J.P. Morgan analyst Imran Khan.

But even though Google (GOOG, Fortune 500) broke its losing streak, the recent rough patch is just the latest in what's been an awful year for the stock. Google's down nearly 30% in 2010, worse than the drops experienced by top rivals Microsoft (MSFT, Fortune 500) and Yahoo (YHOO, Fortune 500). (more)

Soybeans Jump Most in Eight Months, Corn Rises as Rain May Cut U.S. Yields

Soybean futures jumped the most in eight months and corn closed at the highest price since January on speculation that heavy rain will reduce yields in the U.S., the world’s biggest grower and exporter of the crops.

In the Midwest, some fields got more than 10 inches (25 centimeters) of rain since June 7, or three times the normal amount, data from the Midwest Regional Climate Center show. The U.S. Department of Agriculture reduced its condition ratings for corn and soybeans for two straight weeks.

“The crops are now getting smaller,” said Don Roose, the president of U.S. Commodities Inc. in West Des Moines, Iowa. “There has been too much rain.”

Soybean futures for November delivery rose 32.5 cents, or 3.6 percent, to $9.325 a bushel on the Chicago Board of Trade, the biggest gain since Oct. 12. Earlier, the most-active contract reached $9.3575, the highest level since June 23. (more)

Tesla Stock Recoils From Post-IPO Price Surge

What goes up must come down -- it's cliche that seems to be especially true in the dreary stock market of 2010. But even so, the rise and fall of electric car maker Tesla (TSLA) in the wake of its high-profile IPO seems to have been especially accelerated.

Tesla debuted on the public market last week, raising $226 million in an initial public offering priced at $17 a share. That $17 price had been lifted at the last minute from the original range of $14 to $16 a share, thanks to heavy demand among institutional investors for shares in the high-end electric car manufacturer.

Once Tesla shares hit the markets on June 29, they kept rising, surging 40% to $23.89 in a matter of hours. By midday Thursday, Tesla had reached $30.42 -- 79% above its offering price. Stories appeared in the media calling the stock a "game changer" and noting its ability to "electrify the IPO market." (more)

Anatomy of a Slipstream Trade

By Murray Dawes
--I'm a very sceptical person by nature.

--In relation to the markets I don't really listen to the constant stream of commentary from all those "experts". I have grown accustomed over the years to journalists wheeling out the bulls on the days when the market is up and then dragging out the bears when the market goes down. If the media was a human being you would have to conclude that they were suffering from multiple personality disorder and would have them committed.

--There is zero accountability across the whole spectrum of the financial markets; from the brokers to the reporting of news. They will all happily scream their views to all who will listen but there is no one looking back on their past performance and pointing out whether they would actually make money consistently over time. And I assure you that the great bulk of them get it wrong more often than not. (more)

Inflation or Deflation

Many economists are worried about inflation. But others say they're looking the wrong way.

By Heidi N. Moore, contributor

The national knowledge is creeping in that the good times of the stimulus may soon be over. The United States is running an 11% deficit and our gross debt is 83% of our GDP and may rise to 100% in as little as three to five years.

So when we saw a recent note about the "Keynesian endgame" from Scott Minerd, the chief investment officer of Guggenheim Partners, we decided to pay attention:

"At its core, the Keynesian theory says governments should be called on to prime the economic pump as needed. This works as long as the government has the ability to borrow money. But what happens when a government can no longer borrow money?" (more)

The Death Cross: What it is and how to trade it

click here to watch the video

Bank stocks ignite big rally

( -- Stocks surged Wednesday, with the Dow jumping as much as 283 points, as investors came back after the recent bloodletting, spurred on by State Street's improved earnings forecast.

A stronger euro helped propel commodity shares, cooling some worries about the European debt crisis.

The Dow Jones industrial average (INDU) gained 275 points, or 2.8%, its biggest one-day point and percentage gain since June 10.

The S&P 500 (SPX) gained 32 points, or 3.1% for its biggest one-day point and percentage gain since May 27. The Nasdaq (COMP) composite gained 65 points, or 3.1%, its biggest one-day point and percentage gain since May 10. (more)