What My Trading System Says About Gold Right Now

Gold appears to be breaking out of a narrow trading range and could finally be ready to deliver gains to traders again. At least that’s what the chart and my 26-week rate of change (ROC) system are telling me right now.

Last week was the SPDR Gold Trust's (NYSE: GLD) narrowest weekly trading range in more than 18 months. The trading range is defined as the difference between the highest and lowest price seen in the week. Eventually, low volatility gives way to high volatility, and that happened this week when gold broke toward the upper limit of a three-month consolidation pattern.

GLD has traded mostly between about $148 and $158 a share for the past three months. The chart below shows that GLD should be expected to break out of this trading range and move higher.

In the middle of the chart, a flag pattern has been highlighted in blue. This pattern appears on many charts during large price moves, usually at the halfway point. The measured move based on this pattern pointed to a low of about $150, close to the actual bottom of the trading range. Because GLD has met its downside price objective, I believe the decline in gold has reached an end.

After breaking out of the trading range, the price target for the move is equal to the size of the trading range. In this case, a $10 price move is expected to follow, and that would bring the price of GLD to $168. That price is also the apex of the triangle pattern, which would be a price level expected to offer resistance.

In addition to price patterns offering a number of reasons to look for at least a small gain in GLD, relative strength (RS) analysis offers another argument for a bullishmove.

At the bottom of the chart, GLD’s performance relative to iShares Barclays 1-3 Year Treasury Bond (NYSE: SHY) is shown. This ratio shows whether gold or short-term Treasury notes are preferred by investors. Since GLD reached an all-time high last year, investors have generally preferred SHY to GLD. As GLD touched the lower edge of the trading range, the RS ratio formed a slight bullish divergence, and it has now broken the downtrend line. Previous trendline breaks have been associated with at least short-term gains in GLD.

It seems appropriate to use SHY as a benchmark for a RS analysis of gold. The metal is considered by many to be an alternative to cash, while SHY is a virtually risk-free alternative to cash. If SHY is outperforming GLD, traders should sell GLD and accept the risk-free rate of return from short-term Treasuries. When traders’ appetite for risk increases, or global uncertainty points to an increased demand for gold, the RS of GLD turns higher.

By following the RS analysis, we don’t need to know which factor is pushing traders to GLD. We just need to know we will own it as long as it’s going up, and we’ll sell when it stops going up.

That’s the essence of my 26-week ROC strategy. We want to be in the strongest ETFs in each asset class.

Carter's, Inc. (NYSE: CRI)

Carter's, Inc., together with its subsidiaries, designs, sources, and markets branded children's wear. The company provides products under the Carter's, Child of Mine, Just One You, Precious Firsts, OshKosh, and related brand names. Its Carter's brand baby products include bodysuits, pants, undershirts, towels, washcloths, receiving blankets, layette gowns, bibs, caps, booties, playclothes products, sleepwear products, bedding, outerwear, swimwear, shoes, socks, diaper bags, gift sets, toys, and hair accessories. The company sells its products in department stores, national chains, and specialty retailers, as well as through its Carter's and OshKosh retail stores; and online at carters.com and oshkoshbgosh.com. As of June 30, 2012, it operated 385 Carter's and 166 OshKosh outlet and brand retail stores in the United States; and 73 retail stores in Canada. The company was founded in 1865 and is headquartered in Atlanta, Georgia.

To review Carter's stock, please take a look at the 1-year chart of CRI (Carter's, Inc.) below with my added notations:

CRI embarked on a nice rally from August of last year until this April. Since then though, the stock has settled down into a Rectangle pattern over the last (3) months. A Rectangle pattern forms when a stock gets stuck bouncing between a horizontal support and resistance. For CRI, the Rectangle pattern has formed a $55 resistance (brown) and a $50 support (navy). You will notice that CRI's $50 support was also a resistance earlier this year.

The Tale of the Tape: CRI has formed a common Rectangle pattern. The possible long positions on CRI would be either on a pullback to $50, or on a break above $55. The ideal short opportunity would be on a break below $50.

The One Simple Rule Used By Every Successful Trader

If you learn one simple rule, you can easily eliminate crippling losses and begin booking consistent trading gains.

You can use this rule to separate yourself from the ranks of the unsuccessful traders and join the select few that are able to grow their accounts year after year.

But first, you need to find out what’s keeping you from making money in the stock market…

You probably think there are only two types of traders: those who make money and those who don’t. Traders who have a set of personal trading rules–and those who just throw money at random stocks in the hopes of hitting a big winner.

However, trading isn’t that cut-and-dry. In fact, there are plenty of smart, educated traders who can’t seem to make money in the markets.

A couple of weeks ago, I told you why you’re losing money in the stock market. I don’t mean the occasional losing streak, either. I’m talking about an issue many beginning traders face: the inability to consistently win and grow their trading account.

I told you that what you don’t know about the markets isn’t the problem. It’s not about a lack of knowledge or missing a market cue that could have saved you from your losses. And it’s not that you’re trading the wrong stocks. Or that you’re trading the right stocks at the wrong time (more)

Eurozone Retail Sales Sink 9th Month; 17th Month of Contraction in Italy; Margins Collapse in France; Germany Barely Above Contraction

globaleconomicanalysis.blogspot.com / By Mike “Mish” Shedlock / July 30, 2012

Eurozone retail sales continue to dive and not even Germany is immune. German manufacturing has been in contraction off-and-on, and retail sales are once again on the verge contraction as well.

Let’s take a look at some reports.

Italy Retail Sales Slump Extends to 17th Month

Markit reports Downturn in retail sales continues in July

READ MORE

Historic Drought Could Devastate This Stock by 37%

The Midwest is currently experiencing one of the worst droughts in over 50 years, and it could have a catastrophic effect on the food supply system. The U.S. Department of Agriculture expects food prices could rise 3% to 4% over the coming year. In particular, dairy products are estimated to go up as much as 4.5% from current levels. This is bad news for Dean Foods (NYSE: DF), the biggest dairy processor and distributor in the United States.

Dean Foods has already been affected by volatile commodity costs. During the past year and a half, the stock has see-sawed, between a low near $7 and a high above $17. Currently, shares are looking technically vulnerable, breaking an intermediate uptrend line and testing important support near $12.

DF hit a two-year high of $17.25 on July 3, and remained in an intermediate uptrend until the week of July 16, when that uptrend was broken on higher-than-average volume. The stock tumbled after investment firm Goldman Sachs (NYSE: GS) downgraded the company, citing how inclement weather could cause corn prices to rise, leading to inflated dairy prices because corn is a main source of cattle feed. Since then, shares have been on a steep, accelerated downtrend, falling over 15% in two weeks.

As I mentioned, shares are currently hovering near support at $12. The rising 50-week moving average, which represents additional support, intersects nearby at around $11.64. However, if that level is breached, the next meaningful support level is near $11. Once below $11, shares could easily drop to support in the $7 range, as we saw happen in December 2010 and August 2011.

RSI -- which is an overbought/oversold indicator -- is below the key 50 juncture. This is a bearish sign. In addition, the RSI intermediate uptrend line has broken, supporting the bearish interpretation of the underlying price chart.

MACD -- a buy/sell indicator -- is flashing a "sell" signal, as marked by the black line crossing below the red line on the chart above. The MACD histogram is in negative territory.

The bearish technical outlook is supported by weak fundamentals.

On Aug. 8, the company will report second-quarter results. Analysts project revenue for the quarter will decrease 2.4% to $3.2 billion, from $3.3 billion in the comparable year-ago period. For the full 2012 year, revenue is expected to drop 0.2% to $13 billion, from $13.06 billion a year earlier.

The earnings outlook is more optimistic. Due to an aggressive restructuring program in which the company is undertaking organizational changes to reduce operating costs and improve gross margins, net income is projected to rise. Analysts expect earnings per share will increase to 31 cents in the upcoming second quarter, from 18 cents in the year-ago period. For the full 2012 year, analysts expect earnings will be $1.16 versus 77 cents in 2011. However, by 2013, earnings growth is estimated to decelerate, rising only 13%.

Given my bearish outlook, I plan to short Dean Foods if it falls to $11.53. I will set my stop-loss at $13.96, just above current resistance, marked by the intersection of the falling 200-day moving average. My target is $7.23, near the two-year low hit in December 2010, for a potential profit of 37%. The risk/reward ratio is approximately 1.8:1.

Risks to consider: A sudden shift in weather conditions could alleviate the drought situation. In that case, corn prices could reverse and dairy input costs could fall.

Chart of the Day - Discover Financial Services (DFS)

The "Chart of the Day" is Discover Financial Services (DFS), which showed up on Friday's Barchart "All-Time High" list. Discover on Friday posted a new all-time high of $36.61 and closed up +2.48%. TrendSpotter has been long since June 29 at $34.58. In recent news on the stock, Discover on June 19 reported Q2 EPS of $1.00 that was in line with the analyst consensus. Discover Financial Services, with a market cap of $18 billion, operates the Discover Card with more than fifty million cardmembers, the Discover Network with millions of merchant and cash access locations, and the Goldfish credit card business in the United Kingdom. Discover Financial Services also operates the pulse ATM/debit network.

Amazon.com Inc. (NasdaqGS: AMZN)

Amazon.com, Inc. (AMZN) released its quarterly earnings yesterday after the bell. Although the price of AMZN is higher than the preferred range of most of our readers, the chart analysis of AMZN can still be very educational for traders.

Amazon.com, Inc. operates as an online retailer in North America and internationally. It operates retail Websites, such as amazon.com and amazon.ca. The company serves consumers through its retail Websites and focuses on selection, price, and convenience. It also offers programs that enable sellers to sell their products on company's websites, and their own branded Websites. In addition, the company serves developers and enterprises through Amazon Web Services, which provides access to technology infrastructure that developers can use to enable virtually various type of business. Further, it manufactures and sells the Kindle e-reader. Additionally, the company provides fulfillment services; miscellaneous marketing and promotional agreements, such as online advertising; and co-branded credit cards. Amazon.com, Inc. was founded in 1994 and is headquartered in Seattle, Washington.

To review Amazon's stock, please take a look at the 1-year chart of AMZN (Amazon.com, Inc.) below with my added notations:

MZN has created a couple of short-term price levels over the last (3) months. First, AMZN has formed a clear resistance level at $230 (navy). In addition, the stock has also been forming an uptrending support level (blue). These two levels combined have AMZN stuck within a common chart pattern known as an Ascending Triangle that will eventually have to break one way or another. Will their earnings report give AMZN the push it needs to break higher, or lower?

The Tale of the Tape: AMZN is currently stuck between its uptrending support and the $230 resistance. A long trade could be made on a break above $230. On the other side, you could enter a short trade on AMZN if the stock breaks below the uptrending support level.

This Week's Market Outlook: Be Prepared for a Short-term Reversal

Traders were relieved when the head of the European Central Bank (ECB) proclaimed, "The ECB is ready to do whatever it takes to preserve the euro." Stocks and the euro jumped on the news. Rallies based on hopes of monetary easing can be volatile but profitable for traders. They are also usually short-lived unless actions follow words.

S&P 500 Rises on Hope

Earning disappointments were in the news as market leaders like Apple (NASDAQ: AAPL), Starbucks (NASDAQ: SBUX) and Facebook (NASDAQ: FB) missed analysts' estimates. While these stocks dropped, the broad market rallied. SPDR S&P 500 (NYSE: SPY) gained 1.62% on the week, and Vanguard MSCI Europe ETF (NYSE: VGK) was up 3.29%. The rally from Tuesday's lows was even more impressive as SPY closed the week 4.25% above the low and VGK was 8.1% higher.

Bears can point to a number of reasons that the market should fall -- bad earnings, slow revenue growth, possible inflationary pressures as a result of central bank easing. The fundamentals certainly still point to weakness, but the market action is the most important information that traders act upon, and the market was up. The question traders now face is whether the gains will continue. (more)

Canadian home prices to tumble 25%: report

TORONTO - If the Canadian real estate market continues to cool, house prices could see substantial declines next year and could fall by as much as 25 per cent over the long term, according to an economics report released Wednesday.

Though some economists have suggested that a tepid slowdown so far in the market suggests it is headed for a "soft landing," Capital Economics economist David Madani said he continues to believe that a more drastic drop is on its way.

"We think a housing correction over the longer-term is inevitable and still stand by our earlier view of house prices declining by 25 per cent," he said in the report.

Canada's real estate market is showing signs of cooling off following a post-recession boom sparked by a move to ultra-low interest rates. Both national home sales and the average home price were down year-over-year last month, indicators that the national market could be slowing. (more)

STOCK CRASH ALERT: Strange Indicator Spells Doom

“The charts look terrible,” eccentric technician Arch Crawford told GoldSeek Radio host Chris Waltzec on Tuesday.

But the unusual methods of planetary alignments and astronomical technical readings which Crawford utilizes to make his predictions should not be scoffed as the work of a lunatic. His successful 25-plus-year track record and large subscriber base speak for themselves.

“There have been five-year periods along the way when Crawford’s timing was at or near the top,” according to Forbes Newsletter Watch, 2002.

The prestigious Hulbert Financial Digest ranked Arch Crawford’s Crawford Perspectives no. 1 for Stock Market Timing for the period October 1 2007 through October 31, 2009. In addition, his researching into correlating market action with astronomical cycles and sun activity, Crawford has achieved fame for ranking at the top of his peers for the years 1987, 1994 and 2008. He ranked no. 2 for 2002.

Aside from a ‘normal’ year during 1994, Crawford has achieved the best of the best during years of severe market turmoil and vicious declines, suggesting that maybe stock investors should pay very close attention to his latest call. (more)

An Absolutely Stunning Development In The Silver Market

kingworldnews.com / July 28, 2012

Today King World News is reporting on an absolutely stunning development, this time in the silver market. Acclaimed commodity trader Dan Norcini told KWN that in the silver market, “… the hedge fund outright short position is the largest position that I’ve got on my records going back to the beginning of 2007. We’re talking about a five and a half year period.”

Norcini also noted there would be a huge move in silver, “if they (hedge funds shorts) get caught on the wrong side of that market … because all of those shorts are going to head to the exits at the same time.”

The acclaimed trader also discussed hegde fund problems in the gold market, but first, Bill Haynes, President of CMI Gold & Silver, had this to say about QE: “Eric, it’s guaranteed, it’s just a question of when. Probably within a few weeks. Subastian Mallaby, a contributing editor to the Financial Times and a member of the Council on Foreign Relations, in Wednesday’s Financial Times, chided Bernanke and the Fed for not showing some audacity, some aggressiveness in attacking the problem of an economy that will not get going.”

READ MORE

Hathaway – We Are About To See $100+ Up Days In Gold

from KingWorldNews:

Today four-decade veteran John Hathaway shocked King World News by predicting that we are about to start seeing $100+ up-days in gold. The prolific manager of the Tocqueville Gold Fund also stated that the Fed is close to acting and they are most likely going to do something, “… on a very big scale.” He warned, “… there is nothing worse than having an activist Fed which is ineffectual. That would just destroy confidence.”

Here is what Hathaway had to say: “Hilsenranth, who everybody knows by now is basically a mouthpiece for the Fed, he went quite extensively into what the Fed is thinking about doing, including a round of quantitative easing, putting nominal interest rates to negative levels, and possibly cutting the interest rate on free reserves.”

John Hathaway continues @ KingWorldNews.com

U.S. Drought Disaster Depression Agricultural Commodities Crops Report

by: Richard Mills, The Market Oracle:

Because of the worst drought since 1988 the U.S. Department of Agriculture declared a federal disaster area in almost one-third of all the counties in the United States – more than 1,300 counties covering 29 states, the largest disaster declaration ever made by the USDA. Only in the 1930s and 1950s has a drought covered more land.

The United States Drought Monitor shows 88 percent of corn, and 87 percent of soybean crops are in drought-stricken regions. The map above shows the counties affected.

“We just had a crop report today, which indicated a significant reduction in corn production as well as bean production, lower forecast for wheat, soybean, soybean oil, soybean meal, and corn, lower forecast for milk, beef, pork, broilers, and turkey. And it’s obvious that weather is having an impact on the estimates of crops. Despite the fact that we have more acreage planted this year, we still are looking at significant reductions, and despite the fact that we may even with the corn estimates, as they have been reduced, would still have the third largest crop of corn in our history, nearly 13 billion bushels, and a very large soybean crop. We need to be cognizant of the fact that drought and weather conditions have really impacted and affected producers around the country.” Agriculture Secretary Tom Vilsack

Read More @ TheMarketOracle.co.uk

Challenging the Deflation Godfather, Robert Prechter Interview Jul 12 2012

US Weekly Economic Calendar

time (et)	report	period	Actual	forecast	previous
MONDAY, JULY 30
	None scheduled
TUESDAY, JULY 31
8:30 am	Personal income	June		0.4%`	0.2%
8:30 am	Consumer spending	June		0.1%	0.0%
8:30 am	Core PCE price index	June		0.2%	0.1%
8:30 am	Employment cost index	June		0.5%	0.4%
9 am	Case-Shiller home prices	May		--	1.3% nsa
9:45 am	Chicago PMI	July		52.0%	52.9%
10 am	Consumer confidence index	July		61.5	62.0
WEDNESDAY, AUG. 1
8:15 am	ADP employment	July		--	176,000
8:58 am	Markit PMI	July		--	52.5
10 am	ISM	July		50.5%	49.7%
10 am	Construction spending	June		0.4%	0.9%
2:15 pm	FOMC announcement
TBA	Motor vehicle sales	July		14.0 mln	14.1 mln
THURSDAY, aug. 2
8:30 am	Weekly jobless claims	7-28		370,000	350,000
10 am	Factory orders	June		0.3%	0.7%
FRIDAY, aug. 3
8:30 am	Nonfarm payrolls	July		110,000	80,000
8:30 am	Unemployment rate	July		8.2%	8.2%
10 am	ISM nonmanufacturing	July		52.9%	52.1%

Peter Schiff – Gold Just Broke Out & Is Now Off To The Races

kingworldnews.com / July 26, 2012

Today Peter Schiff told King World News that “Gold has now broken out of a channel. There was a very nice trendline and we just broke out of that today.” He also said, “Now that we have broken out of that channel, there is a lot of room to the upside.”

Schiff discussed the Fed, mining shares, and key levels in the gold market, but first, here is what he had to say about today’s comments out of Europe by Draghi: “Draghi is just saying he’s going to print as many euros as he has to. That’s what people are interpreting here is him saying, ‘We are not going to let countries default. We’re going to keep countries on board, which means we are going to acquiesce to the pressure to print money.’”

Peter Schiff continues:

“This is music to the ears of the people who control the markets, the people that control the lion’s share of all of the money and that make all of the decisions. That’s what drives the market in the short-run. You’ve got a lot of leveraged players that key off of everything central planners say.

But the Dow is already off its highs. The euro, the main currency in focus, is back over 1.22….

READ MORE

One of the scarcest resources in the world

sovereignman.com / By Simon Black /

Trakai, Lithuania

We’ve spoken before about the importance of a second passport. It is, in short, one of the best insurance policies you can have.

If you only have one passport, you become trapped by a single government– a government that has the power to tax you into the poorhouse, steal your assets, send your children into combat against their will, and much more.

A second passport provides options. And the more options you have, the more freedom you have.

With a second passport, you’ll find that you can bank in more places, do business in more places, travel to more places… and that’s just the beginning.

In a real crisis situation, a second passport may be the only ticket out. We can cross our fingers and hope this doesn’t happen, or we can take steps to have this vital insurance policy should the need arise.

Now, some people are really lucky. They happen to be descended from Irish, Italian, Polish, etc. These countries have a ‘citizenship by ancestry’ option to anyone who can prove ancestry.

Others have to work a bit harder for it. They have to move to places like Brazil, Chile, Uruguay, or Singapore and eventually become naturalized after a period of several years.

In Brazil, for example, it can happen in as little as one year. In Singapore, as little as 2-3 years. And in Chile, typically 5 years.

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Ten Reasons Why Fracking is Doomed

Proponents of natural gas fracturing and oil drilling are delirious with joy over the ability to recover shale gas, which has brought down world gas prices and made the US a major player again. Likewise, North Dakota wells are set to produce up to 800,000 barrels of oil a day soon. (Although, since the world uses roughly 89 million barrels a day, and the US uses a fifth of that, and demand in Asia will likely spike in coming years, the ND addition is just not that much).

Fracking is dangerous to ground water purity, and both oil and gas, as hydrocarbons, contribute to global climate change, which is a dire threat to human well-being in coming decades and centuries.
But oil and gas triumphalists have another thing coming. It is that the cost of generating electricity by wind and solar is falling rapidly. However hard they try to suppress government funding and tax breaks for renewables, Big Oil and Big Gas are doomed to lose, and in only about 4 years. At that point where it is just cheaper to generate electricity with renewables, no one is going to invest in hydrocarbons. Even with a price advantage it will take decades for renewables to displace hydrocarbons (the electricity grid, transportation, batteries, all have to be redone). But it isn’t a matter of “if.” It is a matter of when. All the anti-climate-warming propaganda and pro-hydrocarbon advertising is intended to slow this process; even Big Oil and Big Gas are not so stupid as not to see the writing on the wall. But if their delaying tactics can make them billions in the meantime, they have every reason to go for it, especially if they are moral cretins who don’t care about the health of the planet. (more)

The New Economic Collapse Video: It makes uncomfortable but urgent viewing

When Casey Research Chief Technology Investment Analyst Alex Daley met former Reagan Budget Director David Stockman to talk about the economy and where he sees it leading taxpayers investors and savers in the near future, he got some very intriguing insights from a man who served right at the heart of the US federal government.

True, some if it makes for uncomfortable watching, but the message is critical if you want to keep your assets safe in what David calls calls "the great unwind."

Watch the video and secure your money.

Who is really pulling the strings in our politicized economy, and what should individual savers do immediately to make sure they have the best protection for their assets when the consequences unfold?

Still Think That Money Market Fund Is “Cash”?

When investors decide to close out their riskier positions and move into “cash”, they don’t actually go to the bank and get a stack of twenties. Most just sell their stocks and let their broker sweep the proceeds into a money market fund which, they assume, is the same thing as cash because it holds high-quality short-term commercial paper that almost never defaults.

That pleasant assumption breaks down as soon as you look at a typical money market fund’s holdings and see that it owns, among other disturbing things, a lot of European bank debt.

But at least you can get your money out with a mouse click, right?

Well, maybe not. Apparently the Fed, cognizant of the potential weakness of the money fund system, is considering withdrawal limits: (more)

The Location Of All Of The World's Gold [Infographic]

7 Companies with Ten Straight Years of Revenue Growth

Consistency is hard to find these days. Corporate profits as a whole are fairly strong, but due to macroeconomic and worldwide sovereign debt burdens, there is a continual sense of malaise in the markets. Even some stalwarts like Johnson and Johnson and Procter and Gamble have been rather unimpressive for long term investors in the past few years, with their sideways revenue performance due to product recalls or divestitures.

The good thing about investing for the long term in shareholder friendly companies that pay dividends is that it really doesn’t take much top line growth to get solid returns on your investment. For some, investing is thought of almost purely as “grow grow grow!”, which is key for certain businesses, but not all of them. For companies that pay dividends (or less enthusiastically, perform share buybacks), it’s all about “total shareholder returns!” as far as investors are concerned.

Total shareholder returns come from a combination of core growth and returning cash to shareholders in one way or another. If a company achieves, say, 2% actual volume growth and 2% pricing growth on that volume to keep up with inflation, then they’re looking at approximately 4% core revenue growth. If their profit margins stay static, that implies net income growth also at 4% or so. Then if they have net share repurchases of 2% of market cap per year, total EPS could grow by 6% or more per year. If the company is paying a 4% dividend yield, and the dividends are reinvested, then the investor could be looking at 10% annual returns over the long haul. (more)

Rain Makes Grain - Maybe

When was the last time you heard, Rain Makes Grain? If you heard it, most likely it was in jest or someone said it because they needed rain. With one of the weather models predicting August could be wetter than average, maybe by the end of the month, it can become a recovery chorus. The trouble is, August isn’t a wet month. What some call wetter than average may not be near enough.

I think there is one safe prediction for the summer crops of 2012, and I have hesitated making any formal prediction. I am waiting for the first Country and Western song about the plight of the US farmer and the drought of 2012.

The northern Midwest has received some rain and if a normal summer prevails for August, there will be some very good crops in the upper Midwest. But for the majority of the corn and soybean crops in the US, it will be up to genetics, management, prayer and rain dances.

In Kansas City, during the early hours of Thursday morning, it rained about four tenths of an inch. I woke up and opened the window. It sounded so nice that I decided to keep the window open but since the thermometer said it was still 84 degrees, I also kept the air conditioner on. By morning the pavement was completely dry and the grass felt like light dew. After days and days of 100 plus degrees, about all that can be said of a half inch or even an inch of rain; it sure sounds nice. Also, with high 90’s predicted for the coming week and then back to over 100, I can’t wait until harvest to see actual yields. I don’t want to make it appear I repeat myself, but I still feel estimating yields is a study in futility and waste of time. (more)

Where is the QE3 Premium for Oil?

Despite more and more actions that make the initiation of Quantitative Easing 2 by the Federal Reserve more likely, the exchange traded fund for oil, United States Oil (NYSE: USO), is off in trading for the week. Even more paradoxical is the 43.25% short float for United States Oil.

Over the course of Quantitative Easing 2 from its introduction in August 2010 to its cessation in June 2011, United States Oil soared from the low 30s to the high 40s. Quantitative Easing 2 consisted of the Federal Reserve expanding its balance sheet to purchase about $700 billion in US Treasury Bonds.

As a result of this massive creation of Greenbacks without the corresponding economic growth in the United States, traders dumped US Dollars (NYSE: UUP) and bought hard assets such as oil, gold (NYSE: GLD) and silver (NYSE: SLV). As SPDR Gold Shares, the exchange traded fund for gold rose to being the second the most valuable exchange traded fund in terms of market capitalization behind that of only the SPDR S&P 500 Index (NYSE: SPY) with the UUP falling from around $26 to about $20.

The denouement of Quantitative Easing 2 was a downgrade of the credit rating of the United States Government in August 2011, the only time in history.

Testimony this week by Secretary of the Treasury Tim Geinthner combined with a front page article in The Wall Street Journal detailing the dissatisfaction of members of the Federal Reserve have the Dow Jones Industrial Average soaring as more economic stimulus measures, such as Quantitative Easing 3, are expected from the Federal Reserve. But for the last week of market action, USO is down 1.42%.

While it is trading above its 20-day and 50-day moving average, it is 9.42% lower than its 200-day moving average. In addition, volume today has been very weak, less than half its average. The last month of market action witnessed a double digit jump for USO of 11.42% with a very bullish candlestick pattern chart of long and engulfing bodies. Much of that can be attributed to increasing tensions in Iran, however.

Gold Bullion and silver have been basically flat for the last week and month of trading. Fundamental economic demand for oil appears to be topping as traders preparing for Quantitative Easing 3. The world’s largest importer of oil, China, reported economic growth for the second quarter of 2012 that is about 25% lower than its previous average. Europe is in a recession. South Korea just reported its lowest growth rate since 2009. India and Brazil, also big users of crude, are experiencing lower economic growth, too.

With the short float so high, it appears that traders are expecting the USO to trend lower, also.

46.5 Million Americans, Record 22.3 Million US Households, On Foodstamps; 8,753,935 On Disability

zerohedge.com / by Tyler Durden on 07/27/2012 11:26

America’s transition into a welfare state continues, as May saw a new all time high number of American households, 22.3 million to be exact, enter technical poverty and collect foodstamps. At the individual level, 46.5 million Americans lived off foodstamps, a 222,157 increase in the month, or nearly three times the number of people who found jobs in June according to the BLS. Next month this too will be a record, as it is currently just 17,367 before the previous all time high set in December of 2011. The good news, and we use the term loosely, is that the average benefit per household rose from all time lows of $275.82 to $276.76. Surely, the bottom is in and just like housing, there is on blue skies ahead.

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Major Sell Signal Triggered

For some time now we have been warning about the danger to portfolios given the deteriorating fundamental, economic and technical backdrop in the markets. Our warnings, for the most part, have been ignored as individuals continue to chase stocks in hopes that "this time will be different", and somehow, stocks will continue to ramp higher even though all three support legs are weakening. Currently, it is the imminent arrival of the next round of Quantitative Easing (QE) that keeps "hope" elevated but further Central Bank intervention is unlikely in the near term leaving the markets at risk of a further correction. The technical and fundamental setup is currently a negatively trending market. It is very likely that, in the current environment, we will retest the May lows, if not ultimately set new lows, in August. Those lows will likely coincide with further weakness in the economy which should be the perfect setup for the Fed to launch a third round of Quantitative Easing. (more)

The System Here And There Is Totally Broken

by Jim Sinclair

My Dear Extended Family,

How anyone can put any money in a securities/commodities clearinghouse is beyond me. You risk your financial life to win trading then end up with practically nothing whatsoever.

The system is totally broken. Governments are busted. The securities insurance programs are wildly over extended by the fact that their capitalization cannot guarantee what they are supposed to be guaranteeing

QE invents money out of thin air, and because of that is the only central bank tool and will have to run at full speed to infinity. How the Fed and Treasury utilize QE is totally up to them. They could buy MS or PFG bonds if they wanted to.

Right now in a busted clearinghouse you have no financial relief from anyone because of bankruptcy laws. If you think any industry organization of government regulator is going to give you a cent you are really stupid. You have to assume that if it was not for funds that have to trade commodities, the commodities market volume would be finished. The commodity market of the future has to be guaranteed by the US Treasury and Fed like they guaranteed OTC derivatives, or it will not exist.

You want to see an explosion watch when the clearinghouses in grains implode. Clearinghouse risk exists in shares as well as commodities, so how the hell can you sit back so comfortably, trusting the typical sociopath Wall Streeter to put your money ahead of his/hers?

Those of you with your fancy special tax treatment retirement accounts are sitting ducks dependent on your clearing house broker and/or the will of the government.

Gold is the only asset on the planet without a liability attached to it. Gold is going to and through $3500 without any question in my mind.

9 tries to break $1525 have now failed. The manipulators are put of aces. The proof was a recent email from gold’s father of $1100 calling me a fool three days in a row.

If you own gold in futures or ETFs (they own their gold in paper) take delivery or end up with absolutely nothing whatsoever.

Regards,
Jim

Gold Weekly MACD at Crossroads – For First Time in Four Years!

Owens-Illinois, Inc. (NYSE: OI)

Owens-Illinois, Inc., through its subsidiaries, manufactures and sells glass container products primarily in Europe, North America, South America, and the Asia Pacific. The company produces glass containers for beer, ready-to-drink low alcohol refreshers, spirits, wine, food, tea, juice, and pharmaceuticals, as well as for soft drinks and other non-alcoholic beverages, including returnable/refillable glass containers. It serves brewers, wine vintners, distillers, and food producers. The company sells its products directly to customers under annual or multi-year supply agreements, as well as through distributors. Owens-Illinois, Inc. was founded in 1903 and is headquartered in Perrysburg, Ohio.

To review Owen's stock, please take a look at the 1-year chart of OI (Owens-Illinois, Inc.) below with my added notations:

OI seems to have topped out at $25 from February through April. Since then, the stock has sold off down into a small Rectangle pattern over the last (2) months. A Rectangle pattern forms when a stock gets stuck bouncing between a horizontal support and resistance. For OI, the Rectangle pattern has formed a clear $20 resistance (navy) and an $18 support (red). You will notice that OI's $18 support goes as far back as December.

The Tale of the Tape: OI has formed a small Rectangle pattern. The possible long positions on OI would be either on a pullback to $18, or on a break above $20. The ideal short opportunity would be on a break below $18, but a short could also be placed on a rally up to $20.

Kyle Bass Vindication Imminent? Largest Japanese Pension Fund Begins To Sell JGBs

zerohedge.com,

Sayonara internal funding. In what we suspect will become a major issue (and warned of in April), Bloomberg reports that Japan’s public pension fund, the world’s largest, said it has been selling domestic government bonds as the number of people eligible for retirement payments increases. "Payouts are getting bigger than insurance revenue, so we need to sell Japanese government bonds to raise cash." It would appear the Ponzi has reached it's Tipping Point. Japan’s population is aging, and baby boomers born in the wake of World War II are beginning to reach 65 and eligible for pensions. That’s putting GPIF under pressure to sell JGBs so it can cover the increase in payouts. The fund needs to raise about 8.87 trillion yen this fiscal year. GPIF is historically one of the biggest buyers of Japanese debt and held 71.9 trillion yen, or 63 percent of its assets, in domestic bonds as of March.

Norcini – If This Happens It Will Devastate The Gold Shorts

kingworldnews.com / July 26, 2012

Today acclaimed commodity trader Dan Norcini told King World News, “Once you had the 50 day moving average in gold violated to the upside, then you had a much larger wave of short covering which began to occur.” Norcini also said, “The momentum crowd, that was waiting for $1,600 to be breached, then took over and the move has continued to feed on itself.”

Norcini also discussed a key level which “… is where you will really see the shorts panic.” But first, here is what he had to say about the recent action in gold: “The move in gold we have been seeing was precipitated by an article which indicated the Fed was going to move in August, instead of September. Some of the shorts began to cover yesterday, and as they began driving the prices higher they tripped some key technical levels.”

Dan Norcini continues:

“Once you had the 50 day moving average in gold violated to the upside, then you had a much larger wave of short covering which began to occur. You have to keep in mind that the hedge fund community has not only been liquidating longs, but they have also been adding fresh shorts.

The hedge funds had been anticipating gold would break lower, but they’ve been stymied by central bank buying coming out of the Far East. The momentum crowd, that was waiting for $1,600 to be breached, then took over and the move has continued to feed on itself….

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How To Position Yourself For A 10 Year Pattern Breakout

As mentioned last Friday just before things took a dive on the weekend, a look at the major market indices did not look promising. If we take an even longer term look and examine the monthly charts we can see that The S&P 500 as well as the Dow Jones have been approaching multi-decade rising channel resistance lines. Further, they also appear to be forming bearish rising wedge patterns.

Monthly Long Term Chart Analysis & Thoughts:

As many of my longer term subscribers can attest to, I always preach that technical analysis is one part art and one part science: you can never be completely certain on what the outcome of a pattern is going to be. However, we can use historical analysis to make better investments. The great American Novelist Mark Twain probably said it best in that “history does not repeat itself, but it rhymes”. Regarding a rising wedge pattern, we know that roughly two-thirds of the time they will break to the downside. This also means that one-third of the time they break to the upside.

In accomplishing our goal of capital growth we must do a number of things. We must make returns on our investments, we must protect our investments, and we must limit our losses. While all three aspects work in tandem with each other, there are times when focus must be allocated to one specific approach.

Regarding the current technical setup, I’m not so focused on the 67% chance that these wedges will break to the downside, but more so the impact of each outcome on the average Joe’s portfolio and mom and pop businesses. The S&P 500 and the Dow are approaching long term resistance lines that have been in place for decades. If we do break to the downside, which I suspect we will, there could be a very significant sell off with consequences that no one can predict at this point though I mention some things in the chart above. Alternatively, there is significant overhead resistance in the various indices, and I don’t believe an upside break would be too monumental.

That being said, I always like to keep an open outlook and wait for the right opportunity. I’m trying to think of scenarios that would prelude further upside action and I really am not coming up with much. As evidenced by the completion of the recent 5 wave uptrend on the S&P that coincided nicely with the various quantitative easing policies, Ben Bernanke and the fed have had less and less impact. I truly can’t see many fiscal developments that would prompt any significant bullish action.

The only scenario I really think that could pump up equities is a series of positive earnings announcements. A lot of expectations, earnings numbers, guidance, etc… have been revised downwards over the last couple of quarters, so there is the opportunity for some positive surprises that could lead to some bullish price action. In absence of such a scenario, I really can’t think of much else that would prompt a run up.

Look at these charts of positive and negative earnings surprises… and the dates and remember what happened following this negative data….

Positive Earnings Surprise

Earnings Positive Surprises

Negative Earnings Surprise

That being said, I am recommending two courses of action. For those steadfast bulls, lock in some profits and/or buy some protection. Missing out on some of the upside is a lot better than losing some of the gains you have fought so hard for over the past couple of years. For the more aggressive traders and investors, start following my updates a little more regularly as I foresee many shorting opportunities coming up in the future. As many of you know, sell-offs are often quick and abrupt, and timing is extremely important when playing the downside.

Further, trading could get very volatile in the near future. Historically, and even more so looking forward as August and September have been very costly for the average investor. Our focus will be in taking the highest probability trades that offer the best risk to reward scenarios. There will be times when we miss trades, and times when they’re not timed perfectly.

Chart of the Day - Edwards Lifesciences (EW)

The "Chart of the Day" is Edwards Lifesciences (EW), which showed up on Wednesday's Barchart "All-Time High" list. Edwards on Wednesday posted a new all-time high of $106.94 and closed +6.50%. TrendSpotter took a profit on a long trade on Monday but then turned long again on Wednesday's close of $105.06. In recent news on the stock, Edwards reported Q2 EPS ex-items of 67 cents, higher than the consensus of 65 cents. Edwards Lifesciences, with a market cap of $11 billion, is a leader in advanced cardiovascular disease treatments, is the number-one heart valve company in the world and the global leader in acute hemodynamic monitoring.

Breaking News:House Votes Overwhelmingly to Audit the Fed!

This shows we are wining and the Federal Reserve Bank is on its way being abolished. It may not be soon, but it will come thanks to the tireless efforts of Congressmen Ron Paul. Persistence and perseverance always payed off for Ron Paul even though through the years he stood alone.

WASHINGTON, July 24 – Congressman Ron Paul today applauded the passage by the House of Representatives of H.R. 459, the Federal Reserve Transparency Act. The bill, which calls for a full audit of the Federal Reserve System– including its lending facilities and critical monetary policy operations– passed overwhelmingly by a bipartisan vote of 327-98.

“I am very pleased that the House passed my Audit the Fed legislation today,” Congressman Paul stated. “It has been a long, hard fight, but Congress finally is getting serious about exercising its oversight responsibility over the Federal Reserve. Auditing the Fed is a common sense issue supported by the overwhelming majority of the American people. The Fed’s trillions of dollars worth of asset purchases and its ongoing support of foreign central banks cannot be allowed to continue without Congressional oversight. Today’s passage of H.R. 459 is a good first step towards full Fed transparency, and I hope that the Senate will consider the bill before the end of the year.”

The stories behind 10 of the greatest trades of all time

Sometimes it seems like the investment community operates on the assumption that the world started in 1929 – or at least that the financial booms, busts and speculators preceding the 1920s are irrelevant to the modern investor. We think this is misguided. Just consider that this common worldview ignores an age where speculators lived in sprawling mansions on Fifth Avenue (as opposed to apartments in the same place measuring about 1/100th the size)! We imagine that there’s a lot to learn from looking at the past 300 years as opposed to the past 80. With this in mind; here we present what we believe to be the best trades of all time:

The 10 Greatest Trades of All Time?

Nick Barisheff – Gold’s Going to $10,000 Per Ounce

from FinancialSurvivalNet

Nick Barisheff of Bullion Management Group Inc. is calling for gold to rise exponentially within the next five year time period. He’s convinced that unlimited and excessive money printing by the world’s central banks guarantee it. He’s even got a book coming out later this year to back up his hypothesis. He believes a mix of gold, silver, and platinum as well as geographical diversity will protect you from the numerous economic uncertainties and governmental threats that are lurking. Nick’s made it his life’s work to help people protect their precious metals holdings from over zealous bureaucrats and other criminal types. How safe is your metal?

Click Here to Listen to the Audio
(Direct Download HERE)

If you didn't catch the bottom in natural gas, you have a second chance

We saw a nice little 60% move in Natural Gas prices over the last three months. But was that it or are we still going higher?

It looks to me like they put in a pretty solid base that took 6 months to form. So the setup is there. We have a clear neckline around $2.75 that’s now been broken. The month-long consolidation around those levels has allowed the 200-day moving average to flatten out and the rising 50-day to catch up to higher prices.

Here is a daily bar chart showing the $3.60 target:

We achieved this target by taking the distance of the Head to the Neckline (2.75-1.90 = 0.85) and adding it to the breakout/neckline level (2.75+0.85 = 3.60). For Risk Management purposes, I would be watching this 2.75-2.80 level where the neckline meets the 200-day moving average. I would not want to be in NatGas if prices are trading below that. Anything above it is a go.

We’ve been on the Natural Gas bandwagon for most of this year and it continues to be one of the few trending assets out there. We see it as a lot easier to buy dips in trending assets (and short downtrending assets) rather than get whipsawed around in a rangebound market (i.e. S&Ps).

McAlvany Weekly Commentary

China Grabbing-Up World’s Oil & Gold

Posted on 25 July 2012.

A Look At This Week’s Show:
-China is buying and betting on higher oil
-Food inflation fears feed political change
-Gold’s long term up trend intact

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The Real Unemployment Numbers

100 Million Poor People In America And 39 Other Facts About Poverty That Will Blow Your Mind

from The Economic Collapse Blog:

Every single day more Americans fall into poverty. This should deeply alarm you no matter what political party you belong to and no matter what your personal economic philosophy is. Right now, approximately 100 million Americans are either “poor” or “near poor”. For a lot of people “poverty” can be a nebulous concept, so let’s define it. The poverty level as defined by the federal government in 2010 was $11,139 for an individual and $22,314 for a family of four. Could you take care of a family of four on less than $2000 a month? Millions upon millions of families are experiencing a tremendous amount of pain in this economy, and no matter what “solutions” we think are correct, the reality is that we all should have compassion on them. Sadly, things are about to get even worse. The next major economic downturn is rapidly approaching, and when it hits the statistics posted below are going to look even more horrendous.

Read More @ TheEconomicCollpaseBlog.com

This chart shows a 66% chance stocks could fall 3,000 points

CLICK ON CHART TO ENLARGE

Currently the Dow and S&P 500 are very near multi-decade rising channel lines and look to be forming bearish rising wedges.

Forecasting and chart analysis is an art, not a science. Even though rising wedges break to the downside roughly two-thirds of the time, I, nor anyone knows for sure, which direction investors will break these wedge patterns or how far it could fall! Keep in mind this pattern breaks to the upside one-third of the time too!

In my humble opinion the key to this situation is this- its not the odds of the market breaking to the downside that is important....it's the impact to portfolios if it does!

Keep this in mind....both the Dow and S&P 500 are nearing long-term channel/resistance lines, that have been in place for decades. If the wedges should happen to break to the downside, the bottom of these rising channels is a large percentage away!

A very easy strategy with this pattern at hand is.... protect capital (in case a breakdown would take place) and then follow an upside breakout if that is the eventual outcome.

Missing some upside action is a ton better than losing capital!

Richard Russell: Bear Market to Last Another 15 Years to 2027

from KingWorldNews:

Today the Godfather of newsletter writers, Richard Russell, shocked King World News with this remarkable and extremely dire prediction: “The primary bear market — the leveraging and inflation and lying and cheating and shenanigans lasted from 1945 to 2007, about 62 years. My guess is that it will require maybe one-third of that time or roughly 20 years to clean out the economic stupidity and nonsense of those 62 years. That could take this bear market out to the year 2027.”

“Twenty years would be a long time for a bear market, even a secular bear market. Therefore, you should know that I do not expect the market to head straight down for 20 long years. Actually, in the coming 20 years I expect to see a number of short cyclical bull and bear markets (much like the 1956 to 1974 period), and I expect to see many periods of boring trading ranges — all occurring within the overall pattern of a secular bear market.

Richard Russell continues @ KingWorldNews.com

Investor Sentiment: 3 Basic Tenets to a Market Top

by Guy Lerner, The Tech­ni­cal Take

When it comes to mar­ket sen­ti­ment there are 3 basic tenets that sug­gest to me that the cur­rent mar­ket dynam­ics will lead to a mar­ket top as opposed to a launch­ing pad for the next bull mar­ket. First, investor sen­ti­ment at the recent lows (7 weeks ago) was not extreme. There­fore, the sub­se­quent rally was expected to be weak as the “rub­ber­band was not stretched to tight”. Sec­ond, when con­sid­er­ing the price cycle, which is the path prices take from low to high and back to low again, every sell sig­nal should be fol­lowed by a buy sig­nal. Our mod­els have had their sell sig­nal (April 20, 2012), but we have not had a proper buy sig­nal yet. Third, con­sec­u­tive sell sig­nals (with­out inter­ven­ing buy sig­nals) are a sign of a mar­ket top. This obser­va­tion is con­sis­tent on both a daily and weekly time frames, and it is con­sis­tent with the kind of price action we are cur­rently seeing.

When we put this alto­gether, it is dif­fi­cult to see sub­stan­tially higher prices with­out investors becom­ing more bear­ish. The best way to see increas­ing bear­ish­ness is to have lower prices. Lower prices will cer­tainly bring the Fed­eral Reserve into action. As a vari­ant to these obser­va­tions, I think the Fed­eral Reserve has been lay­ing the ground work over the past cou­ple of months based upon the unem­ploy­ment sit­u­a­tion, and this may prompt action prior to a stock mar­ket fall. In fact, the only thing that can cir­cum­vent the price cycle is QE3. The ques­tion becomes: will we get Fed inter­ven­tion before equity prices fall or after.

The “Dumb Money” indi­ca­tor (see fig­ure 1) looks for extremes in the data from 4 dif­fer­ent groups of investors who his­tor­i­cally have been wrong on the mar­ket: 1) Investors Intel­li­gence; 2) Mar­ket­Vane; 3) Amer­i­can Asso­ci­a­tion of Indi­vid­ual Investors; and 4) the put call ratio. This indi­ca­tor is neutral.

Fig­ure 1. “Dumb Money”/ weekly

Fig­ure 2 is a weekly chart of the SP500 with the Insid­er­Score “entire mar­ket” value in the lower panel. From the Insid­er­Score weekly report: “Market-wide insider sen­ti­ment was Neu­tral last week as insider trad­ing activ­ity hit a sea­sonal low-point. In fact, the num­ber of unique non-10b5-1 plan buy­ers and sell­ers was the second-lowest in our 445-week (dat­ing back to Jan­u­ary 1, 2004) track­ing period, bested only by the third week of April this year. Activ­ity will begin to pick-up late this week/early next week and trans­ac­tional vol­ume will increase sig­nif­i­cantly as insid­ers at the first-round of earn­ings reporters are free to buy/sell again. “

Fig­ure 2. Insid­er­Score “Entire Mar­ket” value/ weekly

Fig­ure 3 is a weekly chart of the SP500. The indi­ca­tor in the lower panel mea­sures all the assets in the Rydex bull­ish ori­ented equity funds divided by the sum of assets in the bull­ish ori­ented equity funds plus the assets in the bear­ish ori­ented equity funds. When the indi­ca­tor is green, the value is low and there is fear in the mar­ket; this is where mar­ket bot­toms are forged. When the indi­ca­tor is red, there is com­pla­cency in the mar­ket. There are too many bulls and this is when mar­ket advances stall. Cur­rently, the value of the indi­ca­tor is 67.52%. Val­ues less than 50% are asso­ci­ated with mar­ket bot­toms. Val­ues greater than 58% are asso­ci­ated with mar­ket tops. It should be noted that the mar­ket topped out in 2011 with this indi­ca­tor between 70% and 71%.

Fig­ure 3. Rydex Total Bull v. Total Bear/ weekly

Fed Plans Dollar Devaluation, New Evidence; Why Now?

beaconequity.com / By Dominique de Kevelioc de Bailleul /

Zerohedge.com once in a while posts a bombshell. The latest, This Is The Government: Your Legal Right To Redeem Your Money Market Account Has Been Denied – The Sequel, proves once again that Trends JournalFounder Gerald Celente should top investors’ Google News alerts for his latest outlook and commentary.

“You don’t own your money unless you have it in your possession.
—Gerald Celente Nov. 2011 (following MF Global’s sudden bankruptcy, Oct. 31)

And to put some official sanction to an already corrupt banking system, the safest of safe assets, cash, will shockingly turn out to be not safe after all when the big reset nears. In fact, cash, too, will be confiscated through, maybe, another Obama Executive Order, more un-prosecuted fraud and consolidation to benefit JP Morgan, or just an old-fashion overnight currency devaluation, which is usual and customary—and is, presently, the odds on favorite after all attempts by the Fed to jury-rig the banking system fails.

As the following excerpts of the NY Fed proposal to Bernanke and Co. reveals, plans for coping with a banking crisis in the U.S. via some form of dollar devaluation are underway, including capital controls to stem a bank run—of course. Therefore, it’s necessary to make changes to Money Market Rule 2a-7.

Title: The Minimum Balance At Risk: A Proposal to Mitigate the Systemic Risks Posed by Money Market Funds

. . . This paper proposes another approach to mitigating the vulnerability of MMFs to runs by introducing a “minimum balance at risk” (MBR) that could provide a disincentive to run from a troubled money fund. The MBR would be a small fraction (for example, 5 percent) of each shareholder’s recent balances that could be redeemed only with a delay. The delay would ensure that redeeming investors remain partially invested in the fund long enough (we suggest 30 days) to share in any imminent portfolio losses or costs of their redemptions. However, as long as an investor’s balance exceeds her MBR, the rule would have no effect on her transactions, and no portion of any redemption would be delayed if her remaining shares exceed her minimum balance. [her? Politically-correct thieves.]

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EQT Corporation (NYSE: EQT)

EQT Corporation, together with its subsidiaries, operates as an integrated energy company in the United States. It operates in three segments: EQT Production, EQT Midstream, and Distribution. The EQT Production segment engages in the exploration, development, and production of natural gas, natural gas liquids, and crude oil in the Appalachian Basin. The EQT Midstream segment provides gathering, processing, transmission, and storage services to the independent third parties in the Appalachian Basin. This segment has approximately 10,450 miles of gathering lines. The Distribution segment distributes and sells natural gas to residential, commercial, and industrial customers in southwestern Pennsylvania, West Virginia, and eastern Kentucky. This segment serves approximately 276,500 customers consisting of 257,700 residential, and 18,800 commercial and industrial customers.

Please take a look at the 1-year chart of EQT (EQT Corporation) below with my added notations:

Over the last (5) months, EQT always seems to find support or resistance on or at the increments of $5. First, notice the $55 support (black) that, prior to last week, was previous resistance. Next, you can see the common level of $50 (blue) and the lower level of support at $45 (red). The nice thing about EQT is that it shows you how to trade it no matter what direction the market moves.

The Tale of the Tape: EQT finds the levels of $5 important. If the stock pulls back to the $55 support you could enter a long play. If it breaks below $55, you could enter a short play. In that case, you could then buy EQT if it comes down to $50. Etc., etc., etc!