Wednesday, October 24, 2012

People Are Getting Scared And Liquidating & Germany’s Gold

from KingWorldNews:

With global markets trading in the red, including gold and silver, today acclaimed money manager Stephen Leeb spoke with King World News about the action in the metals, and the Germans looking to audit and repatriate some of their gold: “Desperation leads to desperate measures, and yes, could entities be hiding gold or not having what they say they have? Absolutely.” Leeb also said, “… somebody is holding (the price of) gold back.”
Here is what Leeb had to say: “People are getting scared. I guess there’s some liquidation of virtually everything on the basis of these fears. Gold, though down, is certainly down less than virtually every other asset. Even silver, which is extremely volatile both on the upside and downside, is down about 1%, which is a lot less than the market.”
Stephen Leeb continues @

Briggs & Stratton Corporation (NYSE: BGG)

Briggs & Stratton Corporation designs, manufactures, markets, and services air cooled gasoline engines for outdoor power equipment worldwide. It operates in two segments, Engines and Power Products. The Engines segment offers aluminum alloy gasoline engines for lawn and garden equipment applications, including walk-behind lawn mowers, riding lawn mowers, garden tillers, and snow throwers, as well as engines primarily to original equipment manufacturers for use in industrial, construction, agricultural, and other consumer applications that include generators, pumps, and pressure washers. It also manufactures and sells replacement engines, and service parts to sales and service distributors. The Power Products segment offers portable and standby generators, pressure washers, snow throwers, and lawn and garden powered equipment. This segment sells its products through various channels of retail distribution, including consumer home centers, warehouse clubs, mass merchants, and independent dealers under brands such as Briggs & Stratton, Snapper, Simplicity, Ferris, Snapper Pro, Murray, and Victa, as well as other brands consisting of Craftsman, John Deere, GE, and Troy-Bilt.

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

1-year chart of BGG (Briggs & Stratton, Inc.)

BGG had been trading mostly sideways from March through August. However, during that period of time the stock created a key resistance level at $18.50 (navy). That resistance level was a 52-week high breakout when the stock broke above it in September. That breakout was a signal that the stock should be moving higher, which the stock did do. Now that BGG is pulling back, the old $18.5 resistance should provide support for the stock, which it has already done once this month.

The other thing to notice about BGG is the downtrending resistance (red) that the stock has created over the last month. Soon the stock will have to break through that resistance if the stock is to continue it's 52-week breakout move higher.

On This Date In 1929, The Black Thursday Selling Has Begun

Last week, the misty eyed reminiscences were recalling the 25th anniversary of Black Monday. Today, we look even further back. 83 years back to be precise to this date in hallowed antiquity, when in 1929 the selling had officially begun, with what would ultimately culminate as the Great Crash. Cue Art Cashin: "on this Thursday morning, the market opened nervous but relatively steady. Within the first half hour, prices began to fade and the tape began to run late. By noon the tape was nearly an hour and-a-half late in reporting transactions in a market that had opened only two hours before. To speed the reporting digits were deleted and so "Radio" which had opened at 68 3/4 now showed on the tape at 8 3/4. But prices were moving so fast that the price was not 58 3/4 but 48 3/4 on its way to 48 1/4 before it would bottom in the afternoon at 44 1/2. To avoid confusion the Exchange published flash prices of selected securities on the slower moving bond tape." By early afternoon the cascade of prices caused an emergency meeting at the offices of J.P. Morgan across the street from the Exchange...."

From Art Cashin of UBS Financial Services
On this day in 1929, Wall Street brokers headed for work more than a little confused. The action the day before had made them a bit uneasy. Several weeks earlier, the Dow had made one more record high - the latest of a series in a super bull market that had lasted years and caught the attention of a fascinated public. Then the market began to sputter-but-so what. The Great Bull had rolled and rested before only to roar and rise again. But the prior day's trading had raised the anxiety level. So, on this Thursday morning, the market opened nervous but relatively steady.  (more)

Did Today Hint at Long Term Direction for the Grains?

Very mixed markets today with corn and wheat closing lower and soybeans higher.  Soybeans ending the day up 7 cents doesn't look like much at face value, however a 25 cent rally off the lows is pretty impressive especially after violating support levels early.  Outside markets were also very heavy today coming from uncertainty over elections and an overall lack of confidence.  Crude oil at one point was down $3.00 a barrel but had taken back $1.20 by the close.  Equity and metals markets were also sharply lower.

The overall commodity liquidation today had the grains on the defensive early.  A half hour into the pit open it looked like corn and soybeans were going to break key support levels and turn the charts negative.  Both bounced back from support and soybeans posted the highest close since October 1st.  Better cash bids for soybeans sparked the rally and rumors of China buying fed it.
Overall corn is still in limbo here trading below resistance and above support.  Pricection in corn and what seems negative, but strength in soybeans seems to be preventing a sharp break like we saw in many other commodity markets.  Soybeans do look good on a chart and have potential for a breakout to the upside but this could prove to be a difficult task with fund liquidation everywhere.

With high volatility in a market, option strategies may be a good tool for hedgers and specs alike.
December Corn Daily chart:

November Soybeans Daily chart:  (more)

Chart of the Day - Agrium (AGU)

The "Chart of the Day" is Agrium (AGU), which showed up on Monday's Barchart "52-Week High" list. Agrium on Monday posted a new 4-year high of $108.13 and closed +3.39%. TrendSpotter has been long since Sep 6 at $100.61. The stock rallied on Monday on the company's announcement that it is doubling its dividend to 50 cents per quarter. Agrium, with a market cap of $16 billion, is a leading global producer and marketer of fertilizer and a major retail supplier of agricultural products and services in both North America and Argentina.


Obama Slashes Four Hours Off Definition of “Full-Time” Employment / By Mike “Mish” Shedlock 

The BLS Glossary defines full-time workers as “Persons who work 35 hours or more per week”.
For monthly reporting, the BLS defines part-time as “those who worked 1 to 34 hours during the survey reference week”. With that wording, I am not precisely sure where 34.1 or 34.5 hours fit.
Interestingly, the Obamacare mandate says Anyone Who Works 30-Hour Week Is Now ‘Full-Time’
 A little-known section in the Obamacare health reform law defines “full-time” work as averaging only 30 hours per week, a definition that will affect some employers who utilize part-time workers to trim the cost of complying with the Obamacare rule that says businesses with 50 or more workers must provide health insurance or pay a fine.
“The term ‘full-time employee’ means, with respect to any month, an employee who is employed on average at least 30 hours of service per week,” section 1513 of the law reads. (Scroll down to section 4, paragraph A.)
If an employer has 50 or more “full-time employees” and does not offer health insurance, it must pay a penalty per employee for each month it does not offer coverage.

Bank Of Canada Fires Shot Across Bow, Says "Withdrawal Of Stimulus Will Likely Be Required"

With the entire world engaged in global coordinated easing, slashing, burning, and overall lowering rates and printing money by the wheelbarrow, the Bank of Canada just fired a shot across the bow. Here is the kicker: "Reflecting all of these factors, the Bank has decided to maintain the target for the overnight rate at 1 per cent. Over time, some modest withdrawal of monetary policy stimulus will likely be required." Surely they must be punished for this blasphemy in the holy church of Saint John Maynard and the apostles of collapsing fiat.
The Loonie is happy:

Goldman is not. From GS' Andrew Tilton.
Keeping and strengthening the tightening bias, a hawkish surprise

The Bank of Canada today kept the target for the overnight rate unchanged, as was widely expected. Instead, the main focus today was on the language of the statement following Governor Carney’s speech last week at which he omitted mention of the BoC’s tightening bias. In the event, the tightening bias was strengthened, while the growth forecast was kept essentially unchanged. Overall, relative to the speech by Governor Carney last week, this represents a big surprise and suggests that concern over imbalances in the household sector may have grown. (more)