Tuesday, October 9, 2012

The Largest Economy In The World Is Imploding Right In Front Of Our Eyes

A devastating economic depression is rapidly spreading across the largest economy in the world.  Unemployment is skyrocketing, money is being pulled out of the banks at an astounding rate, bad debts are everywhere and economic activity is slowing down month after month.  So who am I talking about?  Not the United States - the economy that I am talking about has a GDP that is more than two trillion dollars larger.  It is not China either - the economy that I am talking about is more than twice the size of China.  You have probably guessed it by now - the largest economy in the world is the EU economy.  Things in Europe continue to get even worse.  Greece and Spain are already experiencing full-blown economic depressions that continue to deepen, and Italy and France are headed down the exact same path that Greece and Spain have gone.  Headlines about violent protests and economic despair dominate European newspapers day after day after day.  European leaders hold summit meeting after summit meeting, but all of the "solutions" that get announced never seem to fix anything.  In fact, the largest economy on the planet continues to implode right in front of our eyes, and the economic shockwave from this implosion is going to be felt to the four corners of the earth.

On Friday, newspapers all over Europe declared that Greece is about to run out of money (again).

The Greek government says that without more aid they will completely run out of cash by the end of November.

Of course the rest of Europe is going to continue to pour money into Greece because they know that if they don't the financial markets will panic.  (more)

This Buy Signal Delivers an Average 42% Gain in Six Months

Natural gas is one of history's greatest bear markets. Prices have fallen 93% since peaking in December 2000. The companies that produce natural gas have suffered along with the commodity. They should do well if gas prices rise, but there is no way to tell when that market turn will come. Eventually, the price of natural gas will probably stop falling, but it's dangerous to call bottoms in any market.

A supply glut of natural gas was behind the bear market. At the same time, demand for oil and gasoline has led to higher prices in those markets. In 1999, crude oil traded for less than $12 a barrel, and now it is almost $90. Gasoline futures have gone from $1.03 a gallon to $2.80.

Diesel fuel has risen along with gasoline, with the retail price for diesel fuel over $4 a gallon. That is pinching profits of trucking companies and some have turned to natural gas for a solution.

 Trucks can be retrofitted to run on natural gas and companies can save money with this fuel. The problem is that trucks have difficulty refueling on long trips due, and the solution to that problem may come from the efforts of companies like TravelCenters of America (NYSE: TA), which operates more than 240 travel centers offering fuel, food and other necessities along the highway. The company is continually expanding and seems to have enough cash on its balance sheets to continue growing.  (more)

Commodities fall on slower China growth forecast

Prices for a wide range of commodities fell Monday after a new forecast of slower growth in China ramped up worries about the global economy.

The World Bank's lowered expectation for China was one of three issues that prompted investors to sell riskier assets on a day when volumes were light because of the Columbus Day holiday.

The bank revised its economic growth forecast for China to 7.7 percent from 8.2 percent, which was issued in May. It said there is a risk of a more pronounced slowdown in China than currently expected, citing weak global demand. The bank also cut its forecast for developing Asia-Pacific economies to 7.2 percent from its May forecast of 7.6 percent.

China, which is the world's second largest economy, imports large quantities of raw materials, from copper and other industrial metals to oil and agricultural products. Slower growth means demand likely will fall for commodities.  (more)

Chart of the Day - Tractor Supply Company (TSCO)

The "Chart of the Day" is Tractor Supply Company (TSCO), which showed up on Friday's Barchart "All-Time High" list. Tractor Supply on Friday posted a new all-time high of $103.74 and closed +3.07%. TrendSpotter has been long since July 27 at $91.94. In recent news on the stock, RBC Capital on Aug 7 initiated coverage on Tractor Supply with an Outperform and a target of $105. JPMorgan on July 26 upgraded Tractor Supply to Overweight from Neutral and raised its target to $100 from $90 on valuation and improving fundamentals. Tractor Supply Company, with a market cap of $7 billion, is a specialty retailer which supplies the daily farming and maintenance needs of its target customers: hobby, part-time and full-time farmers and ranchers, as well as rural customers, contractors and tradesmen.


Celente - Exclusive Sneak Peek Of New Trends Journal & Gold

Today top trends forecaster Gerald Celente gave King World News readers and listeners an exclusive sneak peek of the Autumn Trends Journal. Celente is the founder of Trends Research, and the man many consider to be the top trends forecaster in the world. In his audio interview, Celente gave his forecasts for gold, silver, real estate, the global economy, and much more.

 But first, here is a small portion of what Celente had to say about the global economy and gold: “The global economy is crashing. This is unprecedented, Eric, what’s going on, the amount of cheap money they are printing. And it is totally against the charter for them to buy up these worthless bonds from all of these countries that are suffering, but they are doing it.”

 Gerald Celente continues: “They are buying up worthless bonds with money they don’t have. They are just inventing it (the money). Then you go over to China. China is in a terrible slump. The Chinese are dumping in trillions of yuan in stimulus, and the same thing is going on everywhere. (more)

Natural Gas Mystifies the Talking Heads

sovereign-investor.com / By Sean Hyman
Remember back in April when people on TV were saying that natural gas would remain at $1-$2 because we had such a glut of supply out there?
It sounds right … until you really think about it. The first question I asked myself when I heard that was, “what does it take for a natural gas company to break even?”
As it turns out, it costs them $3 to $9 to pull the gas out of the ground … with the average being around $5.
Well, these companies aren’t charities. They’re for-profit businesses. That’s why I knew they’d do everything in their power to get the price of natural gas up.

One of the Most Controversial Stocks is Now a 'Screaming Buy': NFLX

In 2010 and through the midway point of 2011, Netflix (NASDAQ: NFLX) was one of the best stocks to own. The shares surged an incredible 450% from January 2010 through their peak in July 2011.
I remember at one point during that time, my gardener asked me if he should buy Netflix shares. That was the first sign that the stock was in for some pain down the road, because in this game, when the "man on the street" is raving about a stock, you know it's time for the smart money to bank profits and head for the exits.
In Netflix's case, it was really painful, as a series of earnings disappointments, analyst downgrades, business model changes and the Qwikster debacle kept a flood of agony raining down upon the shares from the middle of 2011 until just about a week ago.
Slowing profits, programming misses, original content gambles and, of course, BIG competitive headwinds from the likes of Amazon.com (NASDAQ: AMZN), Apple (NASDAQ: AAPL) and even Coinstar's (NASDAQ: CSTR) Redbox DVD rental outlet, all could end up sinking NFLX in the years to come. Yet even if you agree with this thesis on principle, as I am inclined to do, there's no denying the incredibly bullish trading action in the shares of late.
NFLX Chart
During the past week, NFLX shares have surged nearly 20%. The big buying in the stock in just the past few trading sessions has sent it vaulting well beyond its 50-day moving average of $59.05. Still, the shares have a long way to go before coming close to their 200-day moving average at $83.50, but as the old adage says, a journey of thousand miles begins with a single step.  (more)

Turquoise Hill Resources Ltd. (NYSE: TRQ)

Turquoise Hill Resources Ltd., together with its subsidiaries, operates as a mineral exploration, development, and production company in central Asia and Australia. The company holds interest in Oyu Tolgoi, a copper-gold project located in the south Gobi region of Mongolia; metallurgical and thermal coal deposits in south Gobi region of Mongolia; and Kyzyl Gold Project located in northeastern Kazakhstan. It also owns four molybdenum, rhenium, copper, gold, zinc, silver, and uranium projects in Australia; and exploration programs focusing on porphyry-related copper-gold and epithermal gold-silver deposits in Indonesia, Mongolia, and the Philippines. The company was formerly known as Ivanhoe Mines Ltd. and changed its name to Turquoise Hill Resources Ltd. in August 2012. The company was founded in 1994 and is based in Vancouver, Canada.

Please review the 1 yr chart of TRQ (Turquoise Hill Resources, Ltd.) below with my added notations:

1 yr chart of TRQ (Turquoise Hill Resources, Ltd.)

TRQ has been trading sideways for the last (5) months. During that time the stock has been holding an important level of support at $8 (blue). No matter what the market has or has not done over the last several months, TRQ has not broken below $8, and the stock appears to be on it's way back down to that level.

For some insight into what could happen if TRQ breaks support, notice what the stock did when it broke it's previous $16 support (red) in March. A sign that the stock may have finally bottom from that sell-off would be a break above the $10 resistance (green).