Thursday, April 12, 2012

BUCKLE UP: Europe Will Collapse in May-June

from Gains Pains & Capital:

The following is an excerpt from a recent issue of Private Wealth Advisory. In it, I explain why exactly Europe will Collapse completely in the May-June period. The confluence of negative factors is unlike anything I’ve ever seen before.

Starting back in August, I began suggesting that we were approaching a Systemic Crisis/ Crash scenario in the markets.

The technical and fundamentals both supported this forecast, but I completely underestimated the degree to which the Central Banks and EU would attempt to prop up the market.

At that time, I thought it likely we’d see a Crash, which would then be met with another round of stimulus, which would push the economy temporarily into the green. It seemed the most logical outcome given that we were heading into an election year with a President whose ratings were at record lows.

Instead, the Federal Reserve, particularly those Fed Presidents from Financial Centers (Charles Evans of Chicago and Bill Dudley of New York) began a coordinated campaign of verbal intervention, hinting that more easing or QE was just around the corner.

Read More @

$8,250/oz. Silver and ONE BANK

The silver markets are rigged. Every day. Every trade. Every option. Every derivative. The silver markets have been rigged since the early 1970's when Alan Greenspan introduced computer market trading systems to the world beginning the long-term commodity market rigging operation.

Since that time there has not been a day when the silver markets have been "freely traded". Nobody, and I mean NOBODY, knows the true "Fair Market Value" of silver!

But like all price suppression schemes, the silver manipulation must come to an end and we are on the brink of that moment. The only remaining question should be "What is the true value of silver in terms of money?"

First a little background to set the stage.

Computer Commodity Trading

Beginning in the early 1970's, computers were introduced to control the order flow in financial markets. Order processing was drastically changed with the New York Stock Exchange's "designated order turnaround" system (DOT, and later SuperDOT) which routed orders electronically to the proper trading post to be executed manually, and the "opening automated reporting system" (OARS) which aided the specialist in determining the market clearing opening price (SOR; Smart Order Routing).

Today we have algorithmic trading, auto trading, algo trading, black-box trading, robo trading...and the list goes on. Algorithmic Trading is widely used by pension funds, mutual funds, and other buy side institutional traders, to divide large trades into several smaller trades in order to manage market impact, and risk. Sell side traders, such as market makers and hedge funds, claim to provide "liquidity to the market", generating and executing orders automatically. In "high frequency trading" (HFT) computers make the decision to initiate orders based on information that is received electronically, before human traders are even aware of the information. (more)

Natural Gas Drops Below $2 for First Time Since January 2002

The price of natural gas has dropped below $2 for the first time in more than a decade.

A mild winter and production boom have left the U.S. with more natural gas than Americans can consume. Storage facilities are quickly filling up. The glut has pushed down the futures price of gas 59 percent since it peaked at $4.85 last summer.

On Wednesday afternoon, the futures price passed a milestone. Gas fell to $1.991 per 1,000 cubic feet. The last time it went below $2 was Jan. 28, 2002, when it hit $1.91.

Cheaper gas has already lowered heating bills this winter, and air conditioning costs are expected to fall this summer because many utilities generate electricity with natural gas. Major American manufacturers — including chemical companies, fertilizer plants, aluminum and steelmakers — also should benefit as energy costs tumble.

"If you're a consumer, this is great news," independent petroleum analyst Stephen Schork said. "This could spark a real rebirth of American manufacturing."

Supplies of gas are high because improved drilling techniques have allowed companies to produce more from vast, gas-rich layers of underground rock. Homeowners also have been using less natural gas for heating, thanks to a mild winter..

Practically speaking, a one-day drop below $2 won't make much difference for consumers or the economy. But the ongoing slump in gas prices certainly will. Commodities traders also said that Wednesday's drop is an important indicator of how bloated the natural gas market has become. Natural gas supplies are 61 percent higher than the five-year average.

While consumers enjoy cheaper prices, producers will find it harder to turn a profit. Some have tried to slow production, but so far prices have continued to fall amid mild winter weather. Shares of natural gas producers Chesapeake, EQT Corp. and Energen Corp. dropped about 2 percent in afternoon trading.

Meanwhile, oil prices rose on positive signs for the economy and energy demand. The stock market is up. And aluminum maker Alcoa surprised Wall Street with a first-quarter profit, thanks to stronger sales to carmakers and other manufacturers. Alcoa is the first major company to announce earnings for the quarter.

Benchmark U.S. crude rose by $1.98 to $103 per barrel on Wednesday. Brent crude, which is used to price oil imported by U.S. refineries, increased by 48 cents to $120.36.

Retail gasoline prices fell by less than a penny to $3.915 per gallon, according to auto club AAA, Wright Express and Oil Price Information Service. Gasoline has dropped by about 2 cents over the past week, but it's still 64 cents higher than it was at the beginning of the year.

In other energy trading, heating oil rose by 2.07 cents to $3.1164 per gallon while gasoline futures climbed 4.33 cents to $3.2929 per gallon.

The Scariest Chart For High Yield Bond Holders

from Zero Hedge :

We have been pointing to the ‘changes’ that are evident in the high yield credit market (bonds, credit derivatives, and ETFs) for a few weeks now. The fall in the high-yield bond advance-decline line (and up-in-quality rotation); the decompression of HY credit spreads; and the lack of share creation, discount to NAV, and underperformance of JNK/HYG; but these canaries-in-the-coalmine pale in comparison to the massively over-crowded nature of the high-yield credit protection bullish positioning among arguably levered market participants. As Morgan Stanley notes: “US High Yield Investors Are ‘Full Overweight’“. Remember large crowds and small doors are no fun.

Read More @

Highest Number of Oversold Stocks Since October (Bespoke)

Fol­low­ing today's sell-off in the equity mar­ket, there are now 226 stocks in the S&P 500 that are cur­rently in over­sold ter­ri­tory (more than one stan­dard devi­a­tion below 50-day mov­ing aver­age). On a per­cent­age basis, this works out to 45.2% of the stocks in the index. The last time there were more over­sold stocks in the S&P 500 was back on Octo­ber 4th.

Granted, the cur­rent sell-off hasn't been nearly as bad as the one we saw last Sep­tem­ber (yet), but because of the lack of volatil­ity in the mar­ket over the last sev­eral months, the trad­ing range for indi­vid­ual stocks became much nar­rower lead­ing up to the cur­rent sell-off. There­fore, it didn't take as big of a sell-off to move the mar­ket and indi­vid­ual stocks into over­sold levels.

To illus­trate this, let's use the S&P 500 as an exam­ple. The chart below shows the price of the S&P 500 along with its trad­ing range of one stan­dard devi­a­tion above and below its 50-day mov­ing aver­age (gray region). In the lower chart we show the size of the trad­ing range in per­cent­age points from top to bot­tom. Back in early Octo­ber, the mar­ket was sig­nif­i­cantly more volatile than it is today. As a result, the size of the S&P 500's trad­ing range was above 9% and com­ing down from as high as 12.5%. Today, after months of a rel­a­tively placid mar­ket envi­ron­ment, the size of the S&P 500's trad­ing range from top to bot­tom is 4.14%, or less than half of what it was then.

Act Fast Before Boeing Bounces Back Stock is oversold near term and likely to close a gap

Boeing (NYSE:BA) — The world’s second largest manufacturer of commercial jets and fourth largest military weapons maker had a spectacular 26% advance from its October lows. But since January, it has been consolidating within a narrow band between $71 and $76.

Despite analysts’ forecasts of significant earnings gains in 2012 and 2013, and a target of $86, the stock broke down from a gap at $73.30 to close yesterday at $70.60. The stochastic is telling us that the stock is oversold near term, and after five down days the stock, like the market, is due for a bounce.

On Monday, the company announced that Russiahad ordered four of its 787-8 Dreamliners. And after yesterday’s close, Alcoa (NYSE:AA) beat earnings estimates and said that it had unusually large orders from Boeing.

Traders are presented with an opportunity for a quick trade as the probability of closing the gap up to $73.30 is high.

Trade of the Day – Boeing (NYSE:BA)

McAlvany Weekly Commentary

A Look at This Week’s Show:
-Will huge corporate cash save the world?
-Are you in an economic conflict zone?
-Compliant geographical diversification strategy

Norcini – Take That Gold Shorts as Massive Bids Shock Market

King World News / April 11, 2012

Today legendary Jim Sinclair’s chartist, Dan Norcini, told King World News that fresh gold shorts suffered large losses in yesterday’s trading. Norcini said massive bids came into the market as gold crossed $1,640, volume spiked and the shorts were squeezed. Norcini stated the buying which came into the market was intense, and caught many market participants off guard. Here is how Norcini described the gold shorts getting mauled: “The move in gold seemingly came out of nowhere yesterday. Gold had been down earlier in the session when a huge bid came into gold at the $1,640 level and that took out the shorts at $1,645.”

Dan Norcini continues:

“Earlier in the trading session when gold stabilized near the $1,635 level and pushed back through $1,640, somebody came in, out of nowhere, with huge size on the bids and there was a massive surge in volume. This took the price from $1,640, all the way up to $1,660.

So gold moved $20 very quickly, in roughly 30 minutes. It was a sharp rise in gold. There was a little bit of hesitation there and then another surge came in and took gold to $1,665.

From a technical perspective, they pushed out a bunch of brand new, fresh short positions. You might recall that last week there was a lot of selling which took place in gold as it fell through support at $1,640….


Chart of the Day - Atlas Energy (ATLS)

The "Chart of the Day" is Atlas Energy (ATLS), which showed up on Tuesday's Barchart "52-Week High" list. Atlas Energy on Tuesday posted a new 4-year high of $37.19 and closed up 1.27%. TrendSpotter has been Long since Feb 27 at $26.94. In recent news on the stock, Atlas Energy on March 14 completed the distribution of Atlas Resource Partners to unitholders. Atlas Energy, with a market cap of $1.8 billion, owns and operates natural gas processing plants and natural gas gathering pipelines.