Monday, November 22, 2010

CFTC Weekly Options Update: Specs Momentum Trade Unwinding As Flatter Curve Is Sought After Shape

Chris Martenson And Ted Butler Discuss The End Of Silver Price Manipulation

Chris Martenson who recently launched a fascinating series of interviews and podcasts with a variety of the most interesting pundits in the world, chats with Ted Butler, discussing such germane items as why silver has such a compelling value story, the coming silver supply crunch, the argument behind the allegations of silver price manipulation, drivers behind the recent price action in silver, why price volatility will increase and the expected outcome of the CFTC’s investigation and why Ted thinks it will be "a bombshell for the silver market."

Interview with Ted Butler: The End of Silver Price Manipulation

2010 has been an exceptional year for silver. The price has increased over 50% to-date, and the CFTC (the US commodity regulatory body) issued a statement last month admitting that the market price of silver may have been (and still may be) fraudulently manipulated. An investigation is underway. (more)

Reuters: Five Global Investment Themes for This Week

Following are five big themes likely to dominate thinking of investors and traders in the coming week:

1. Peripheral euro zone issuers remain vulnerable to a further sell-off as Ireland keeps financial markets guessing over whether and when it will seal an aid deal with the European Union and IMF. While some sort of assistance is widely expected, the crisis is unlikely to be over. Fellow weakling Portugal is already bearing the brunt of fallout from Ireland's problems and its borrowing costs have jumped in recent weeks with some bond market vigilantes seeing it as the euro zone's next weakest link.

Among pointers to the next phase of the crisis, Ireland holds a by-election, which some of Dublin's critics partly blame for its game of brinkmanship with the European Union, on Thursday, November 25, and the Portuguese government is scheduled to pass the 2011 budget the following day.

2. The latest euro zone sovereign debt crisis, triggered by Ireland's shaky banking sector, is threatening to halt the normalization in euro zone money markets where banks have been weaning themselves off the European Central Bank's support measures. (more)

Top 25 Large-Cap Stocks With Bullish Options Sentiment

The following is a list of large cap stocks with a large number of open call option positions relative to put option positions (i.e. bullish options sentiment). To create this list, we started with the 150 largest listed companies, and narrowed down the list by only focusing on the large-cap stocks with the lowest Put/Call ratios...

Options traders seem to think these corporate giants have some near-term upside. What do you think? Full analysis below. Options data is sourced from Schaeffer's.

The list has been sorted by the Put/Call ratio.

1. Nippon Telegraph & Telephone Corp. (NTT): Telecom Services Industry. Market cap of $61.0B. Call open interest at 7,235 contracts versus put open interest at 368 contracts (Put/Call ratio at 0.05). Short float at 0.03%, which implies a short ratio of 1.93 days. The stock has gained 9.87% over the last year.

2. Alcon Inc. (ACL): Medical Instruments & Supplies Industry. Market cap of $49.86B. Call open interest at 160,252 contracts versus put open interest at 54,778 contracts (Put/Call ratio at 0.34). Short float at 2.04%, which implies a short ratio of 1.93 days. The stock has gained 13.73% over the last year.

3. Mitsubishi UFJ Financial Group, Inc. (MTU): Banking Industry. Market cap of $69.93B. Call open interest at 2,691 contracts versus put open interest at 988 contracts (Put/Call ratio at 0.37). Short float at 0.03%, which implies a short ratio of 1.54 days. The stock has lost -7.65% over the last year. (more)

Banks, The U.S. Consumer, And Why U.S. Long Bond Yields Are Heading Higher

In the past, consumer confidence was boosted when banks eased their lending standards for consumer loans and especially credit cards. As yet the easier lending standards have failed to lift consumer confidence, though. (more)

Natural Gas Market Update

Since the bullish gap breakout September of last year, natural gas rallied off its lows of $2.409 targeting and completing a 50% retracement from the selloff of $9.60 to make a high of $6.108 January of 2010. As this high was made, natural gas slowly moved lower and formed a channel that it’s been within for the year of 2010. In October natural gas made a low of $3.255 before finding support and pushing higher. This low came within testing the lows of May of 2009 at $3.155. By holding and pushing higher the market has put in a low that is trying to create a potential inverted head and shoulders formation. The past three weeks has been a consolidation of that push higher and this has created a bull flag as the December contract goes into expiration on November 24. Market bulls will want to see a continuation of that push off the lows with short covering going into expiration to try and test and break out of the downward channel or as January becomes front month the difference in price puts it above the channel to gap and go higher. Upside resistance to be met up to the June highs of $5.196 and then January highs of $6.108. Getting above and holding $6.108 gives the bulls an inverted h/s target of $9.807 (6.108-2.409=3.699, 3.699+6.108=9.807). This also retraces 100% of the move from $9.600 August 2008 to $2.409 September 2009. (more)

Technically Precious with Merv

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Time-Lapse Video Of Food Stamp Participation Rates During The "New Normal"

With everyone chanting the praises of the "better than abysmal" economy, we decided to post a time lapse video (since cartoons are all that stand an even remote chance of attracting some attention) prepared by John Lohman, of just how the New Normal has been progressing, both since the starts of the great depression in December 2007, and more importantly, since the beginning of the "end" of the recession. The result may surprise you. As John points out: food stamps - the only thing keeping 43 million Americans from going postal." Hopefully the end of extended unemployment benefits coming December 1 won't be that first one additional straw on the camel's back that leads to a full blown fracture.

US Economic Calendar for the Week

DateTime (ET)StatisticForActualBriefing ForecastMarket ExpectsPriorRevised From
Nov 238:30 AMGDP - Second EstimateQ3-2.5%2.4%2.0%-
Nov 238:30 AMGDP Deflator - Second EstimateQ3-2.3%2.3%2.3%-
Nov 2310:00 AMExisting Home SalesOct-4.20M4.42M4.53M-
Nov 232:00 PMMinutes of FOMC MeetingNov 3-----
Nov 247:00 AMMBA Mortgage Applications11/19-NANA-14.4%-
Nov 248:30 AMPersonal IncomeOct-0.6%0.4%-0.1%-
Nov 248:30 AMPersonal SpendingOct-0.7%0.5%0.2%-
Nov 248:30 AMPCE Prices - CoreOct-0.0%0.1%0.0%-
Nov 248:30 AMDurable OrdersOct--1.5%-0.3%3.3%-
Nov 248:30 AMDurable Orders -ex transportationOct-0.4%0.4%-0.8%-
Nov 248:30 AMInitial Claims11/20-440K442K440K-
Nov 248:30 AMContinuing Claims11/13-4275K4280K4295K-
Nov 249:55 AMMichigan Sentiment - FinalNov-70.069.469.3-
Nov 2410:00 AMNew Home SalesOct-315K312K307-
Nov 2410:00 AMFHFA Home Price Index (q/q)Q3-NANA0.9%-
Nov 2410:30 AMCrude Inventories11/20-NANA-7.29M-
Nov 242:00 PMMinutes of FOMC MeetingNov 3-----