Friday, May 31, 2013

New BoE Chief Carney Will Devalue Sterling, Pimco Warns

Mark Carney will try to devalue the pound by as much as 15pc after he takes over as Bank of England Governor in July in a last ditch attempt to cement the UK recovery, Pimco, the world’s largest bond house, has warned.
[Ed. Note: If you go back in time far enough, way way way back, a Pound Sterling was an actual troy pound of sterling silver, meaning 12 troy ounces of sterling silver. Since a troy ounce of sterling costs £12.52 today, that puts the price of a troy pound of sterling silver at over £150 Pound Sterling. When, exactly, do we decide that it doesn't require a genius-level IQ to conclude that the pound sterling will be further devalued? £200? £300? £500? At what point do we simply recognize that they're willing to devalue this thing? In other news, the sun will most likely rise tomorrow morning.]
by Philip Aldrick, Economics Editor

Growth in Britain is going to remain “challenged” for the next three to five years as the Government continues to shrink the public sector and cut the budget deficit.
As banks and households also grapple with their excessive debts, “that leaves one policy tool outstanding, which is basically the currency”, Pimco managing director and sterling bond head Mike Amey said.
George Osborne has pinned his hopes for the economy on Mr Carney, Canada’s central bank boss until the end of the week, living up to his reputation as a monetary “activist” to help ease the transition to an export-focused economy less dependant on consumer spending.
Although economists reckon there is little more central banks can do, Mr Carney has insisted policy is not “maxed out”.
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Updated Resistance Levels For AAPL

Apple has certainly stopped the bleeding, but it has a lot of work to do if it wants to regain its leader states. The truth is it may never as many leaders never to come close to former glory but I expect Apple to give it a go. And the first step in that is finding a bottom and then overcoming the many points of resistance that lay in it’s path.
$480 is the first real test with the $500 level being a big level.
As far as the general markets go I felt going into this week could be an opportunity to buy on weakness, but with a gap up as severe as we’ve seen it really has me concerned that we’re not going to form some sort of short term top. I’m not chasing stocks here and will either wait for a pullback or more strength and then a pullback. We would need to see new highs on the Nasdaq and Dow to give me some confidence that this move is going to continue. Where we’re at now reeks of a tired market that needs more time to consolidate.Please share this article

GDX Gold Miners Chart & 6 Shots of Must-Know News

The gold miners, as tracked by the Market Vectors Gold Mines ETF (GDX: 28.50 +1.28 +4.70%), are down again today. BOOOOOO!  Ah, it’s a process, which is what people say when it’s hard to predict where things will go next. Here’s a chart and some news for this trading Tuesday …
gdx bearish

(Updated chart)
And here’s some news that may help gold miners move one way or another …
  1. Commercial participants in the gold market, also known as “smart money”, are the most bullish on gold in nearly five years. READ.
  2. Gold ETF selling in 2013 so far is at about 450 metric tons, equal to mine output from all of Africa & South America. READ.
  3. Gold exploration has dropped close to 55% year over year. READ. Now THAT’S going to crimp future supply, eh?
  4. Giant, low-grade gold projects –  huge, undeveloped ore-bodies, which contain a significant proportion of the world’s unmined gold — are falling out of favor in a hurry.  READ. That’s news for companies including (ABX: 19.82 +0.87 +4.59%), (XRA: 0.729 +0.014 +1.96%), (NG: 2.39 +0.10 +4.37%) and (PVG: 8.22 +0.56 +7.31%), and not in a good way.
  5. Gold short positions have hit a new record. Short sellers in the futures market extended their position for the sixth consecutive week last week pushing the overall short position to a record 14.6 million oz. READ.
  6. Hecla’s CEO is forecasting a further decline in silver prices in the second quarter. Spot silver prices have fallen about 16 percent to $23.65 since March 28. Sorry, dudes.  READ.
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Autodesk, Inc. (NASDAQ: ADSK)

Autodesk, Inc. operates as a design software and services company worldwide. Its Platform Solutions and Emerging Business segment offers AutoCAD software, a computer-aided design (CAD) application for professional design, drafting, detailing, and visualization in construction, manufacturing, civil engineering, and process plant design fields; and AutoCAD LT, a professional drafting and detailing software. The company's Architecture, Engineering and Construction segment offers Autodesk Revit products, which provide model-based design and documentation systems; AutoCAD Civil 3D products that offer a surveying, design, analysis, and documentation solution. Its Manufacturing segment provides AutoCAD Mechanical software to accelerate the mechanical design process; Autodesk Inventor, which offers a set of tools for 3D mechanical design, simulation, analysis, tooling, visualization, and documentation; and Autodesk Moldflow that facilitates manufacturers to design plastic parts and injection molds, and study the injection molding process. The company's Media and Entertainment segment offers animation products that provide tools for digital sculpting, modeling, animation, effects, rendering, and compositing; and creative finishing products, which offer editing, finishing, and visual effects design and color grading solutions.
Autodesk's stock is forming a head and shoulders (H&S) pattern. Please take a look at the 1-year chart of ADSK (Autodesk, Inc) below with my added notations:
1-year chart of ADSK (Autodesk, Inc) Over the last (5) months ADSK has created a very important support level at $36 (red), which was a key level of resistance prior (navy). The $36 support is also the “neckline” for ADSK's H&S pattern. Above the neckline you will notice the H&S pattern itself (blue). Confirmation of the H&S would occur if the stock were to break below its $36 support. If ADSK does break that level, the stock should move lower from there.
The Tale of the Tape: ADSK seems to have formed a head & shoulders pattern. Although a trader could go long at $36 expecting a bounce, the stock's pattern implies an eventual breakdown. If that happens, a short trade should be entered on a break of the $36 level.
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Housing 101: Renting vs. Buying a home

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Why This Summer May See Huge Upside For Gold & Silver

from King World News
Today a legend in the business spoke with King World News about the continued massive demand for physical gold and silver, and why this may be a huge summer for both gold and silver. Keith Barron, who consults with major companies around the world and is responsible for one of the largest gold discoveries in the last quarter century, also spoke about what is causing this rally in the metals and what he expects going forward. Below is what Barron had to say in this tremendous interview.
Barron: “The two-day plunge in the US dollar has been the catalyst for the move higher in both gold and silver. The gold market and the silver market have been very oversold in the last month or so. Over time the US dollar will just continue to lose purchasing power.
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Why Is The Smart Money Suddenly Getting Out Of Stocks And Real Estate? / By Michael / May 30th, 2013
If wonderful times are ahead for U.S. financial markets, then why is so much of the smart money heading for the exits?  Does it make sense for insiders to be getting out of stocks and real estate if prices are just going to continue to go up?  The Dow is up about 17 percent so far this year, and it just keeps setting new record high after new record high.  U.S. home prices have risen about 11 percent from a year ago, and some analysts are projecting that we are on the verge of a brand new housing boom.  Why would the smart money want to leave the party when it is just getting started?  Well, of course the truth is that the “smart money” is regarded as being smart because they usually make better decisions than other people do.  And right now the smart money is screaming that it is time to get out of the markets.  For example, the SentimenTrader Smart/Dumb Money Index is now the lowest that it has been in more than two years.  The smart money is busy selling even as the dumb money is busy buying.  So precisely what does the smart money expect to happen?  Are they anticipating a market “correction” or something bigger than that?
Those are very good questions.  Unfortunately, the smart money rarely divulges their secrets, so we can only watch what they do.  And right now a lot of insiders are making some very interesting moves.
For example, George Soros has been dumping almost all of his financial stocks.  The following is from a recent article by Becket Adams
Everyone’s favorite billionaire investor is back in the spotlight, and this time he has a few people wondering what he’s up to.
George Soros has dumped his position with several major banks including JPMorgan Chase, Capitol One, SunTrust, and Morgan Stanley. He has reduced his exposure to Citigroup and decreased his stake in AIG by two-thirds.
In fact, Soros’ financial stock holdings are down by roughly 80 percent, a massive drop from his position just three months ago, according to SNL Financial.
So exactly what is going on?
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Thursday, May 30, 2013

This Sector is Setting Up to Take a Dive in the Next Month

In trending markets, investors and traders alike have a tendency to forget how quickly corrections and other countertrend moves can appear out of seemingly nowhere, and how sharp these moves can be. Case in point: the utilities sector, , as evidenced by the Utilities Select Sector SPDR (NYSE: XLU), which rose 18.6% from the start of the year through April 30, followed by a swift down move in the past four weeks.

As the broader U.S. stock market rallied in 2013, fueled by global central bank monetary policy posturing and improving economic data, investors in search of income piled money into dividend-paying stocks and sectors, such as the utilities.

All of this changed rather quickly in early May, when investors began fretting over a potential backing off of quantitative easing, resulting in bond prices falling and yields rising. They began quickly moving out of dividend-paying stocks such as utilities in preparation for a higher-yield environment.

On the chart of the 10-year U.S. Treasury note, the sharp rise in yields starting in early May is visible. Yields rose almost 40 basis points and are now just over 2% and near the year's highs from March.
Treasurys Chart
On the multi-year chart of XLU, it appears to be in good shape to reach higher prices over time, but given its year-to-date gains, is likely somewhat overbought in the medium term. The recent correction puts XLU a little more than 6% off its late April highs and right back into the uptrending channel (blue parallel lines) that dates back to the 2009 lows.

The sharp correction is yet another example of a chart gone vertical that ultimately gives way to the law of gravity -- what goes up must come down. Note how XLU topped just as it peeked out of the longer-standing channel.
XLU Weekly Chart
The daily chart below gives us more clarity on the near-term support and resistance zones that swing traders should focus on.

First, note that last week's 3.7% drop took XLU below its 50-day simple moving average for the first time since the start of 2013, when the rally that began in November kicked into high gear.

The recent sell-off also resulted in XLU closing last week right at the August 2012 highs, which acted as resistance until late March. By definition, previous resistance levels should act as first meaningful support, and thus, the $38.50 area should be watched for a bounce.

Given the sharp drop from the high-momentum top in late April, the odds now favor further selling after a potential initial bounce attempt. As markets often take the path of maximum frustration for investors, a bounce from last Friday's closing levels may just be enough to confuse the crowd. Therefore, a bounce into previous mini support (now potential resistance) near $39.50 could offer traders looking to short XLU a defined level to trade against.  

The 50% and 61.8% Fibonacci retracement areas of the November 2012 to April 2013 uptrend stand out as potential downside targets.
XLU Daily Chart
Recommended Trade Setup:
-- Short XLU between $39.50 and $40.30
-- Set stop-loss at $41
-- Set initial target at $37.65 for a potential 5%-7% gain in 4-8 weeks
-- Set secondary target at $36.85 for a potential 7%-9% gain in 4-8 weeks
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Dunkin Brands Group Inc (NASDAQ: DNKN)

Dunkin Brands Group, Inc., together with its subsidiaries, owns, operates, and franchises quick service restaurants under the Dunkin Donuts and Baskin-Robbins brands worldwide. The company operates in four segments, including Dunkin' Donuts U.S., Dunkin' Donuts International, Baskin-Robbins International, and Baskin-Robbins U.S. Its restaurants offer coffee, donuts, bagels, ice cream, frozen beverages, baked goods, and related products. As of March 30, 2013, the company had approximately 10,500 Dunkin Donuts restaurants in 38 states and the District of Columbia, and 31 other countries; and approximately 7,000 Baskin-Robbins restaurants in 44 states and the District of Columbia, and 45 other countries. It also leases restaurant properties. Dunkin Brands Group, Inc. is headquartered in Canton, Massachusetts.
To review Dunkin’s stock, please take a look at the 1-year chart of DNKN (Dunkin Brands Group, Inc.) below with my added notations:
1-year chart of DNKN (Dunkin Brands Group, Inc.) DNKN has been working its way slowly higher since bottoming at $28 in August. In January and April the stock hit $40 as resistance (blue), which was also a 52-week high resistance. After the stock finally pushed above that resistance in May, DNKN has already tested the $40 level as support once, and it appears to be pulling back down to it again.
The Tale of the Tape: DNKN broke out to a new 52-week high and now seems to be pulling back. A long trade could be made at $40 with a stop placed below that level. A break below $40 would negate the forecast for a continued move higher.
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S&P Dividend Yield Below 10-Yr Treasury Yield (1.93% vs. 2.19%); Looking for Value?

by Mike “Mish” Shedlock
MISH’S Global Economic Trend Analysis

In an email note today economist Steen Jakobsen notes the “S&P Dividend Yield is Below the 10-Yr Treasury Yield (1.93% vs. 2.19%)”
S&P Dividend Yield
[...] Steen asks “Why own stocks at lofty PE of 18 when you can get better yield and a free put option via fixed income’?
Curve Watchers Anonymous notes this chart of US treasury yields.
US Treasury Yields Over Time
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Why Mark Carney’s Canadian success story may be about to fall apart

No Bank of England governor has ever been installed in office with quite so much advance hype as Mark Carney. When he moves from running to the Bank of Canada to his new office in Threadneedle Street, expectations will be running high. Carney arrives with a reputation as a master of economic strategy, a man who can single-handedly steer an economy through the most treacherous of waters, and get a country growing again with a few deft strokes of monetary magic.

Certainly, George Osborne has invested his hopes in him. During Carney’s time as governor in Canada, the country was ‘acknowledged to have weathered the economic storm better than any other major western economy’, he said on announcing the appointment. Most of the financial commentators were happy to sing from the same hymn sheet. A brilliant technocrat, well worth the £874,000 a year the British taxpayer will pay him to run the economy, they chorused. No one has any doubt he is by far the best man for the job.

But is Carney really everything he is cracked up to be? Or is it that no one really knows very much about the Canadian economy — and certainly not enough to question how well it has performed since Carney was installed in 2008? Just as he is packing his bags, there are worrying signs that the Canadian economy is coming off the rails. Increasingly it looks as if he is getting out before it crashes. (more)

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MoCS: Little-Known Indicator Helps Traders Stay Ahead of the Market

The Momentum of Comparative Strength (MoCS) indicator transforms relative strength (RS) into a momentum tool and helps traders identify changes in the trend of RS. This indicator was created by Christopher Hendrix, CMT, and introduced in an article in the November 2006 issue of SFO Magazine.

MoCS replaces price with RS in the standard Moving Average Convergence/Divergence (MACD) formula. MACD is one of the most popular technical indicators. It calculates the momentum of the price by taking the difference between a short-term and long-term moving average (MA) of the closing prices. Changes in the direction of momentum often precede price trend changes.
The formula for MoCS is:

MoCS = [12-period EMA of (Tradable/Market Index)] – [26-period EMA (Tradable/Market Index)]

-- EMA is an exponential moving average
-- Tradable is the closing price of the stock, ETF, mutual fund or derivative being traded
-- Market Index is the closing price of a broad market index, like the S&P 500 index (it could be the Barclays Capital Aggregate Bond Index if you are trading bond ETFs or the CRB Index for a group of futures-based ETFs)

The values shown are the default values for MACD and work well in MoCS calculations. However, simple moving averages could be used instead of EMAs and individual traders can use any time period they choose. This indicator can be used with daily, weekly, monthly or intraday charts.
Both MACD and MoCS can also be applied with the addition of a signal line, usually a 9-period EMA of the indicator, to generate trading signals. When MoCS crosses above the signal line, a buy signal is given. Sell signals are given when the MoCS indicator falls below the signal line.

How Traders Use It
Traders can use MoCS as a fully defined trading system or as one input in deciding whether to buy or sell. The indicator is shown below on a daily chart of iShares Russell 2000 Index (NYSE: IWM). The histogram in the middle of the chart uses the formula shown above with the S&P 500 used as the market index. In the bottom of the chart, the 9-day signal line (dark red line) is applied to the MoCS.
Momentum of Comparative Strength (MoCS)
Back-testing covering more than five years starting in 2007 shows that this indicator can be profitable on both long and short trades when used as a histogram or with a signal line on IWM.

MoCS can also be used to confirm RS signals. RS is often shown as a percentile value ranging from 1 to 100. Traders can buy when RS crosses above 80 and sell when RS falls back under 80. They could also add MoCS as a confirming indicator and only take buy signals when MoCS is positive, a strategy that could help avoid losing trades.

Why It Matters To Traders
By combining momentum and relative strength, MoCS relies on two time-tested and reliable concepts. MoCS offers very clear and testable trading signals.

An advantage of MoCS over other RS methods is that it can easily be applied to any security and adapted to whatever market a trader prefers. Traditional RS measures are applied to the broad stock market while MoCS can be calculated with bond or commodity indexes. It requires less data than traditional RS ranking systems and is simpler to calculate than traditional RS measures.
MoCS also incorporates momentum, which could be an advantage over RS. Many traders find that price-based momentum indicators turn before changes in the price trend occur. RS has a tendency to lag price movements and MoCS can provide signals before RS changes direction.

For example, this indicator can help traders avoid stocks that suffer big drops on earnings misses since momentum often slows in these stocks ahead of the earnings announcement. The chart of (NASDAQ: PCLN) below offers an example.
MoCS shows the value of applying indicator analysis to RS. A similar approach, substituting RS for price, can be taken with any indicator formula and traders seeking an edge may find this to be a profitable way to stay ahead of the market. 
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We’re ‘Hyper-Bullish’ About This Stock: CHK

A few months ago, we told you to buy Chesapeake Energy (NYSE: CHK) for exposure to the natural gas market.

If we were bullish then, we’re hyper-bullish now.

Since Chesapeake’s Founder and CEO, Aubrey McClendon, resigned, the case for buying the company has only gotten stronger.

Reasons include:
* Better leadership
* A stronger cash position
* Insider buying
* Analyst upgrades
* And higher natural gas prices I’ll start with the leadership change…

Chesapeake is among the top five largest players in the natural gas space, and it also has significant oil operations. But it was severely undermined by McClendon’s risk-taking and questionable behavior.  (more)

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Mortgage rates surge as Fed tapering fears mount: MBA

Worries the Federal Reserve may begin to slow its stimulus efforts sent U.S. mortgage rates last week to their highest level in a year, drying up demand for home refinancings, data from an industry group showed on Wednesday.

The Mortgage Bankers Association said interest rates on fixed 30-year mortgage rates surged 12 basis points to average 3.90 percent in the week ended May 24. It was the highest level since May of last year and the biggest jump in 14 months.

The rise sent the seasonally adjusted index of mortgage application activity down 8.8 percent as refinancing applications tumbled 12.3 percent. It was the biggest drop in refinance applications this year as demand fell to the lowest level since December.

The refinance share of total mortgage activity decreased to 71 percent of applications from 74 percent the week before.

Still, the gauge of loan requests for home purchases, a leading indicator of home sales, rose 2.6 percent, suggesting potential homeowners may have sought to lock in a still-low rate.

Fed chairman Ben Bernanke said last week the Fed could scale back the pace of its bond purchases at one of the "next few meetings" if the economic recovery looked set to maintain forward momentum.

The comments sowed concerns among investors that the Fed's ultra-loose policy could end sooner than expected.

Encouraging economic data last week also contributed to that view as home sales rose and durable goods orders improved.

"Rates rose in response to stronger economic data and an increasing chance that the Fed may soon begin to taper their asset purchases," Mike Fratantoni, MBA's vice president of research and economics, said in a statement.

The Fed is currently buying $85 billion a month in bonds and mortgage-backed securities as it seeks to keep borrowing rates low.

The low rates have helped the housing market, luring in buyers off the sidelines. The recovery in housing has been gaining traction since last year and data on Tuesday showed home prices saw their biggest annual increase in nearly seven years in March.

Rates had already been on the rise before Bernanke's comments and have gained 31 basis points since the start of the month.

The survey covers over 75 percent of U.S. retail residential mortgage applications, according to MBA.
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Wednesday, May 29, 2013

Bull Run In Bonds Looks To Be Over

The Mar-April rally couldn’t muster new highs and added another lower high in place which continues to affirm that TLT has topped. I expect a small counter-trend rally up to $119 before this rolls over and get’s really bearish. The head/shoulder pattern on the weekly chart below paints a very bearish picture.


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Largest Gains for Home Prices in 7 Years, Forget Bubble Talk for Now

The fact that the housing market is improving is no longer up for debate. The argument now is over the character of the recovery, and whether the influence of home speculators is a danger.

The S&P/Case-Shiller house-price index of 20 big metropolitan areas rose a seasonally adjusted 1.1% in March from February, the largest monthly gain since April 2006, and was up 10.9% from a year earlier. Existing-home sales have been higher than year-earlier levels for 22 straight months. They recently reached their highest monthly level since government home-buyer tax incentives expired in November 2009.
Home prices are being flattered by a strong-supply-demand mismatch. New-house construction plunged far below normal levels in the deep housing bust, as pent-up demand for single-family dwellings built up amid record-low mortgage rates, foreclosure-plagued markets and weak labor conditions. Builders in some markets report being able almost to name their price on newly constructed houses. (more)

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Surge In Consumer Confidence To 2008 Levels Sends 10 Year Yield To 2013 Highs

The last two months has seen ‘hope’ rise by its fastest rate in 18 months as this ‘survey’ of sentiment (as opposed to hard economic data) joins the UMich survey at pre-crisis levels of happiness. Of course one can cherry-pick the exuberant and dysphoric but we thought it interesting that the plans to buy a home, a car, or a TV within the next six months fell.

The reaction, equity prices and Treasury bond yields spike with the latter breaking 2013 highs to 13 months highs.
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Japanese Bond Rout Continues; BoJ Vows to Curb Bond Turbulence; Curbing Turbulence is Theoretically Easy

10-Year Japanese Government Bond Yield

5-Year Japanese Government Bond Yield

Since March 4, the 5-year yield has gone from 0.1% to 0.43%. Although a mere .33 percentage points, the move represents a 330% percent rise in in yield.
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French Consumer Confidence Plunges To Financial-Crisis Low / By Wolf Richter / May 28, 2013 AT 11:39AM
The confidence of consumers in France is catching up with the economic situation in their country, where the state sector, which dominates the land with 56% of the economic activity, has been hobbled by budget woes, and where the private sector, which is struggling with an inscrutable labor code and slack demand, is suffocating under a pile of old and new taxes.Rien ne va plus, it seems.
Yet there were some welcome distractions for everyone: the bloody riots in central Paris this weekend offered up the illusion, at least on TV, that the primary problem, the one that would ultimately kill the Republic of France, was the recent passage of a law allowing same-sex marriages under the “Marriage for All” act, one of the planks in President Fran├žois Hollande’s campaign platform. Alas, the vast majority of French people have more pressing problems than trying to get in the way of lovers wanting to walk down the aisle.
The household confidence index by national statistical agency INSEE plummeted 4 points in May, to 79, its all-time low of July 2009 during the worst of the financial crisis. Back in the day, consumer confidence spent a year and a half climbing out of that hole to reach 93 in January 2010, only to zigzag back down in a series of sharp declines followed by sharp increases, with lower lows followed by lower highs, a classic descent to consumer-mood perdition.
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Housing 101: How To Figure Out Mortgage Payments

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Chart of the Day - Nxstage Medicine (NXTM)

The Chart of the Day is Nxstage Medicine (NXTM) with both a Trend Spotter buy signal and 96% technical buy signals.  The Relative Strength Index of 79.94% was earned by having 18 new highs and a gain of 27.72% in the last month.  The stock was discovered on the New High List.

The company is a medical device company that develops, manufactures and markets systems for the treatment of end-stage renal disease, or ESRD, and acute kidney failure.

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from KingWorldNews:
“There is the world that’s manipulating gold and the world that is buying gold. And in the world that’s manipulating gold all we have to do is look at the beginning of the week when Fed Chairman Bernanke came out and talked about whether or not they were going to keep interest rates low, or (have) more quantitative easing, and (then) we saw the reaction on the Street (Wall Street).
Following that gold spiked and then of course pulled back a bit, but for no reason at all because as you are looking at the real market conditions, there is no (economic) recovery, period. What have they dumped in, Eric? Some $17 trillion since the panic of 2008 hit, between quantitative easing and pumping money into the system.
Gerald Celente Audio Interview @
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Tuesday, May 28, 2013

Ben Bernanke’s Latest Casualty: The Pension Plan

from Zero Hedge

With every passing day, the destructive consequences of Ben Bernanke’s ruinous monetary policy on the broader economy become more and more apparent.
Nowhere is this more evident than the observation of a record high stock market – benefiting just a tiny portion of the population – correlating directly with the record number of Americans on food stamps – the wealth effect “trickle down”, or lack thereof, for everyone else (not to mention an economic growth rate four years after the “end of the recessionthat is the worst recovery in recorded history).
Less hyperbolically, this can be seen empirically in the anti-correlation between the US economy and corporate profits. Through his “central” scheming, Bernanke has turned the discounting paradigm on its face, leading to a world in which the market no longer “discounts” or anticipates any information or fundamentals, but merely cares about how big the next latest and greatest liquidity hit will be, and in which there is an inverse correlation between profitability and general economic well-being.
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Greece Considering Labor Camp for Those Who Can’t Pay Their Taxes

from Economic Policy Journal
A friend emails:
I read this in a local Belgian newspaper:
in Dutch:
English via Google Translate:
Apparently the Greek government is planning to use an old army base as a forced labor camp for those unable to pay their taxes.
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This Moving Average Strategy Beats Buy and Hold by Nearly 3-to-1

Moving averages (MAs) are one of the most popular trading tools. Their popularity may be due to their simplicity. Before there were calculators or computers, a 10-day simple moving average could be found by adding up the last 10 closing prices and moving the decimal point one space to the left. I've talked to old floor traders who told me that was the reason the 10-day moving average become popular.
Now, MAs of any length are easy to calculate and widely used. We also have variations of the simple calculation. Rather than just adding up numbers and dividing by the total number, there are at least four other possible ways to find a moving average:
1. Exponential Moving Average: Assigns a greater weight to the more recent market action in an effort to be more responsive to changes in the trend.
2. Weighted Moving Average: Allows users to decide which data should be overweighted and allows for the weighting values to be changed.
3. Triangular Moving Average: Weights the middle of the data more heavily.
4. Adaptive Moving Average: Uses smoothing factors to adjust the number of days used in the calculations to current market conditions.
Each method has its proponents and each of the four methods adds a level of complexity to what was originally a simple indicator. Complexity, at least in my mind, is only OK if it adds value. Visually, it looks like the different moving averages move in the same general direction.
The chart below is a weekly chart of the SPDR S&P 500 ETF (NYSE: SPY) with the prices hidden so all we see are the moving averages. This eliminates the clutter on the chart and makes it possible to see that the moving averages rise and fall at the same time.
SPY Moving Averages Chart
The adaptive moving average, the thin red line, stands out as consistently lagging the simple MA, shown as the thick blue line. At the bottom in 2009, the exponential MA, the brown line, was the last to signal a buy. That signal came after SPY had gained more than 35%. The other MAs signaled a buy after a gain of 25%. Large delays at bottoms are one of the most significant drawbacks of trading with a moving average. The other significant drawback is that there are a large number of small trades in a sideways market.
Based on the visual comparison, we can say that the averages are all close to each other. More detailed quantitative testing of the various MAs is required to develop a stronger opinion as to which one is best. The results are summarized in the table below. All results are for a 26-week MA and the system is always in the market, long when the price is above the MA and short when the price is below the MA.
Moving Averages Table 1
Each MA delivered a low number of winning trades and none beat the market. Digging deeper, we learn that the performance problems are due to large losses on the short side.
Looking at the results for a long-only MA system, moving to cash when the price falls below the MA, we see much better performance.
Moving Averages Table 2
Although the number of winning trades is still low, the adaptive MA beats buy and hold by a significant amount, nearly 3-to-1. This indicator will not call the top of the market. In fact, because it is calculated with historical data, it is impossible for any MA to signal at the exact top or bottom.
At the time of this writing, SPY is well above its adaptive MA, and based on this indicator alone, a bull market would be intact as long as SPY remains above $141.36. Of course, the precise value of the MA changes daily, and will likely be higher when the next bear market does begin.
SPY Adaptive Moving Average Chart
There is no way to fully eliminate the problems associated with moving averages. But in my experience, the best way to use them is to apply an adaptive MA as a long-only signal. No matter what type of MA is used, when the prices are below the MA, the chances of profitable buys are low. Personally, I'd consider selling any stock or ETF when the price moves below the 26-week moving average.
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Precious Metals & Miners Start Bottoming Process

Precious metals and their related mining stocks continue to underperform the broad market. This year's heavy volume breakdown below key support has many investors and trader's spooked creating to a steady stream of selling pressure for gold and silver bullion and mining stocks.
While the technical charts are telling me prices are trying to bottom we must be willing to wait for price to provide low risk entry points before getting involved. Precious metals are like any other investment in respect to trading and investing in them. There are times when you should be long, times to be in cash and times to be short (benefit from falling prices). Right now and for the last twelve months when looking at precious metals cash has been king.
Since 2011 when gold and silver started to correct the best position has been to move to cash or to sell/write options until the next trend resumes. This is something I have been doing with my trading partner who focuses solely on Options Trading who closed three winning positions last week for big gains.
In 2008 we had a similar breakdown in price washing the market clean of investors who were long precious metals. If you compare the last two breakdowns they look very similar. If price holds true then we will see higher prices unfold at the end of 2013.
The key here is for the price to move and hold above the major resistance line. A breakout would trigger a rally in gold to $2600 - $3500 per ounce. With that being said gold and silver may be starting a bear market. Depending what the price does when the major resistance zone is touched, my outlook may change from bullish to bearish. Remember, no one can predict the market with 100% accuracy and each day, week and month that passes changes the outlook going forward.
The chart below is on I drew up on May 3rd.  I was going to get a fresh chart and put my analysis on it but to be honest my price forecast/analysis has been spot on thus far and there is no need to update.

Gold Daily Technical Chart Showing Bottoming Process:

Major technical damage has been done to the chart of gold. Gold is trying to put in a bottom but still needs more time. I feel gold will make a new low in the coming month then bottom as drawn on the chart below.

Silver Daily Technical Chart Showing Bottoming Process:

Silver is in a similar as gold. The major difference between gold and silver is that silver dropped 10% early one morning this month which had very light volume. The fact that silver hit my $20 per ounce level and it was on light volume has me thinking silver has now bottomed.
But, silver may flounder at these prices or near the recent lows until its big sister (gold) puts in a bottom.

Gold Mining Stocks Monthly Investing Zone Chart:

Gold mining stocks broke down a couple months ago and continue to sell off on strong volume. If precious metals continue to move lower then mining stocks will continue their journey lower.
This updated chart which I originally drew in February warning of a breakdown below the green support trend lines would signal a collapse in stock prices, which is exactly what has/is taking place. While I do not try to pick bottoms (catch falling knives) I do like to watch for them so I am prepared for new positions when the time and chart turn bullish or provide a low risk probing entry point.
While I focus more on analysis, forecasts and ETF trading another one of my trading partners who focuses on Trading Stocks and 3x Leveraged ETF's has been cleaning up with gold miners.

Gold, Silver and Mining Stocks Conclusion:

Precious metals continue to be trending down and while they look to be trying to bottom it is important to remember that some of the biggest percent moves take place in the last 10% of a trend. So we may be close to a bottom on the time scale but there could be sharply lower prices yet.
The time will come when another major signal forms and when it does we will be getting involved. The exciting this is that it could be just around the corner.
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Peter Lynch Would Love This 'Boring' Stock (Which Could Reward Traders With 18% Returns)

In his investment classic, One Up On Wall Street, Peter Lynch expounds on how he seeks out boring stocks with dull names for superior returns. "A company that does boring things is almost as good as a company that has a boring name, and both together is terrific." His reasoning: The lack of glamour repels momentum chasers, so the acute trader can buy at a discount.
Insurance provider Chubb Corporation (NYSE: CB) seems to fit Lynch's bill. It offers property and casualty insurance to individuals and businesses throughout the Americas and Asia -- not nearly as exciting as something like cloud computing. Chubb also passes one more Lynch criteria: It has excellent fundamentals.
Recently, the company reported a 30% increase in first-quarter profit, due to increased rates in the U.S. Chubb also announced record quarterly earnings of $2.14 per share, well ahead of the $1.74 per share analysts expected.According to Chubb 's Chairman, President and CEO, John Finnegan, "higher rates, strong underlying underwriting performance and low catastrophe losses" all contributed to the solid results.
The insurer -- which targets affluent individuals with enough disposable income to buy and insure luxury items like yachts -- saw first-quarter 2013 policy sales increase 4% from the year-ago period to $3.1 billion.
Over the remainder of the 2013 year, management anticipates strong renewal rate increases across business units will drive further growth.
To combat low interest rates -- which have negatively weighed on the company's investment portfolio -- Chubb will also likely increase premiums.
From a technical perspective, the stock is strong.
Forming a major uptrend line off the August 2011 $53.54 low, shares have risen 68% in less than two years.
In early 2013, the stock began an accelerated uptrend which is still intact.
Between mid-February and early March, the shares encountered resistance around $86, but were able to break through. The $86 range now acts as support.
For much of the spring, the stock has attempted to break round number resistance at $90. This round number is an important level psychological resistance and represents an all-time high level for the stock.
If shares can definitively break $90 resistance, they will bullishly complete a small ascending triangle, marked by the intersection of the accelerated uptrend line and $90 resistance.
According to the measuring principle for a triangle, calculated by adding the height of the pattern to the breakout level, the stock should then reach a minimum target of $106.38 ($90-$73.62=$16.38; $16.38+$90=$106.38). At current levels, this target represents an 18% return.
The bullish technical outlook is supported by strong fundamentals.
For the upcoming second quarter, scheduled to be reported on July 22, analysts expect increased rates will help push revenue up 3% to $3.2 billion from $3.1 billion in the comparable year-earlier period.
For the full 2013 year, analysts project revenue will rise 3.2% to $12.3 billion from $11.9 billion last year.
The earnings outlook is similar.Due to increased premiums, analysts estimate second-quarter earnings will rise 19% to $1.63 per share from $1.37 per share in the comparable year-ago quarter.
For the full 2013 year, analysts suspect continued underwriting strength will cause earnings to surge about 36% to $7.12 from $5.23 last year.
In addition to an upbeat fundamental outlook, Chubb currently offers a forward annual dividend yield of about 2%, or $1.76 per share. This dividend is likely to rise in the future. Chubb is a Dividend Aristocrat; the company has rewarded shareholders with 31 consecutive years of annual dividend increases.
Risks to consider: In its most recent first quarter, Chubb reported that low interest rates caused the company's net investment income to fall 8% to $351 million. If interest rates continue to stay low, Chubb's investment income could continue to falter. However, to offset the low interest rate environment, management has stated it will push to raise premiums. Doing so should ensure Chubb's growth.
Recommended Trade Setup:
-- Buy CB at $90.19, above $90 round-number resistance
-- Set stop-loss at $85.89, slightly below current support at $86
-- Set initial price target at $106.38 for a potential 18% gain by the end of 2013
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Nikkei Was A Shot Across The Bow

Japan’s Nikkei dropped 7% on Wednesday night that was then followed by another significant fall.  In the end it was a 2,000 point rout that was a “shot across the bow” for world markets.  However on a weekly chart it was barely a blimp, the Nikkei has rallied 7,000 points in just 5 months and it highlights how far world markets have moved in such a short period.  For the S&P though, the move lower already began on Wednesday with Bernanke’s testimony to congress.  That day was marked by push into all-time highs that was followed by a reversal of over 1%.
Wednesday’s reversal came on Day 25 of a Cycle that was already up a massive 150 points.  The entire Investor Cycle has added a stunning 330 points and this 4th Daily Cycle has been the biggest gainer of the 4 Daily Cycles.  To have the 4th Daily Cycle as the best performing just illustrates the parabolic like behavior of this Investor Cycle.
So after 3 declining sessions we now have our first closing Daily Swing High, along with a close below the 10dma.  The drop hasn’t been severe, but because the rise was so steep this drop has broken below the Daily Cycle trend-line.  Normally when these conditions are present at this stage of a Daily Cycle it’s pretty good odds that the Cycle as topped.  In addition we see the oscillators have turned lower, so therefore it’s my expectation that the Cycle has topped and we should spend the next 12 days moving to a DCL.

We know that markets can remain elevated for extended periods of time and this has clearly been one of those times.  Newsletter positioning is again at the highest levels of this bull market.  We know it’s not a timing tool, but it does line up well with the Daily and Investor Cycles being very deep in their respective Cycles.

Yes another record was set this month with margin debt up into all-time highs.  Investors now have $384 billion in margin debt and have exceeded the record set in 2007.  The growth in margin debt has been very steep of late and this additional liquidity is just one reason that explains why the Dow index has gone 101 trading days without a three-day decline.  That streak is a record; it’s the longest streak in history!
Forget the talking heads telling you this is all a normal bull market rally because it’s not.  With a near parabolic rise over 6 months, I can assure you that we are very close to a significant multi-month decline.  The Investor Cycle is now extremely stretched and overbought, so it’s well overdue to begin its long decline back to an ICL.  The Cycle was extended by a full Daily Cycle which is why we’re seeing a top in week 27, a point where most Cycles have already completed.
If the Daily Cycle has topped, then this is also evident on the weekly chart as the slower oscillators have begun to turn lower.   They’re not flashing a sell signal just yet, but a week of weakness will be enough to confirm that the Investor Cycle has likely topped.  I know it feels almost impossible to call a top in the equity markets, but after a 27 week surge of 330 points there just comes a point where every run must come to an end.
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Dutch Defined Benefit Pension Plans, Second Largest in Europe, Face Forced Cuts

Things are getting rather interesting in the Netherlands as low interest rates have increased pension deficit liabilities. Unlike the US and other parts of Europe where deficits are ignored, Dutch law requires 105% funding and the plans fell from 152% funded in 2007 to 102% funded today.
This has forced pension plans to cut benefits by as much as 7% for some trades. As might be expected, this has given rise to a 50 Plus Party, which won election to the Dutch parliament for the first time last year on promises to defend the interests of pensioners.
Please consider Yawning deficits force Dutch pension funds to cut payouts.
 A combination of record low rates, sluggish economic growth and lives that last far longer than anyone imagined even a decade ago have resulted in yawning deficits. At the end of 2012, the funds were €30bn short of what is needed to cover promised benefits.
For the Dutch, the cutbacks are the first ever in a nation which has the second largest “defined benefit” system in Europe. But defined benefit provision, under which pensioners are guaranteed a portion of their salary for as long as they live, is unraveling under the pressure of the financial crisis and ensuing recession.
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Monday, May 27, 2013

What 9 Company Hedge Books Are Revealing about the Natural Gas Market

You can see it clear as day in their hedging strategies...

Natural gas producers are increasingly bearish on prices for their sector.

The numbers tell the tale.  Canadian gas producers surveyed for the Oil and Gas Investments Bulletin hedged AECO-sold production at $5.27 in 2011. Hedge prices have dropped steadily for gas sold since—to $4.27 in 2012, and to $3.29 for currently-hedged production in 2013.

Why the falling hedge price?  Because it made sense – Natural gas prices fell steadily from the beginning of 2010 through to early 2012. Faced with two years of declines, producers looked to stave off further price risk by forward-selling (hedging) their output.

So what has happened since the second quarter of 2012?

Gas prices have been rising. The monthly average AECO (the Canadian benchmark price out of Edmonton AB) price is up 110% over the last year. NYMEX gas has gained 95%.  (more)

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Under $7 Stock May be Traders' Ticket to 50%-Plus Profits

When it comes to finding stocks capable of solid short-term trading profits, investors often seek out potential positive catalysts to score quick gains. For example, I recently discussed an upcoming event that might give a quick boost to medical device maker Given Imaging (NASDAQ: GIVN).

But it's not just the appearance of positive catalysts that can boost a stock. Sometimes it's the removal of negative catalysts that can do the trick. And a notable technology firm that is deeply out of favor may soon make a comeback now that a key overhang on the stock is set to fade away.

Super-Charged Technology

Engineers often tinker with old technologies to see if they can glean new capabilities and uses from them. A key area of interest has been capacitors, which were first designed back in 1754. These devices are used to regulate the flow of energy, whether between various forms of current (alternate or direct), in a power source, or to stabilize the flow of voltage. Capacitors are also used to store energy, as they can quickly release lots of juice when needed (unlike batteries, which can store a lot more energy but release that energy more slowly).

Well, the engineers at Maxwell Technologies (NASDAQ: MXWL) seemingly struck gold by developing "ultracapacitors," which pack far more energy and can provide a quick jolt of juice in short bursts. Bus makers, for example, are starting to use Maxwell's devices to provide acceleration power, reducing the need for oversized engines that will rarely need to operate at full loads.  (more)

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Banking insider: The Japanese have lost control of their bond market

On May 24, a financial analyst and former head trader at the Royal Bank of Scotland spoke on the Hagmann and Hagmann Report regarding the current state of the global economy. Known in the public sphere under the pseudonym of 'V', and labeling himself the Guerrilla Economist, this high level insider stated that the Japanese have completely lost control over their bond market, and the threat for a collapse of the Nikkei equities market is very likely.
V: I basically just got this hot off the press, and hot from the board rooms over here. The Japanese, and this is official... I'm going out on a limb saying this, and you can take it for all it's worth... the Japanese have lost control of their bond market.

Doug Hagmann: V, for financial neophytes like me, what does that mean?

V: What that simply means is... see the stock market has been rising in Japan, as well as over here because of bond prices. Were in a very unique environment where, if the bond market goes bust, you're going to see the Nikkei go bust with it, as well as real estate.  (more)

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3 Factors Keeping Oil Above $90 a Barrel

The gushing oil well at Spindletop Dome in Beaumont, Texas, is one of the most iconic images in the history of oil. When the well hit paydirt, oil spewed 150 feet into the air at a staggering rate of 100,000 barrels per day.

We've come a long way since that Spindletop gusher 112 years ago, and today's industry faces greater challenges finding new sources that can be sold at a reasonable rate of return.

On a recent conference call, Core Laboratories (NYSE: CLB  ) CEO David Demshur stated that outside some of the best spots in the U.S., oil producers in the U.S. will slow down exploration if oil prices are to remain below $90 for a sustained amount of time. Let's look at a few factors that might give some credence to Demshur's claim.

1. Higher resource costs. According to Cheaspeake Energy (NYSE: CHK  ) , the average shale well in the U.S. is drilled to 7,800 feet vertically plus several thousand feet horizontally and is injected with more than 5 million gallons of water, sand, and chemicals to fracture the tight pores where the oil is hidden. All of this effort is for an average initial production rate of about 450 barrels per day. (more)

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Bank Corruption - Coast to Coast Am - May 25 2013

Host John B. Wells interviews Karen Hudes.

About this show: Joining John B. Wells, former World Bank attorney and whistleblower Karen Hudes talked about how she uncovered corruption in the World Bank. 

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Freescale Semiconductor Ltd (NYSE: FSL)

Freescale Semiconductor, Ltd. provides embedded processing solutions for automotive, networking, industrial, and consumer markets worldwide. The company's embedded processor products comprise microcontrollers, such as ultra low power, low end 8-bit products to higher performance 16-bit, and 32-bit products with on-board flash memory, which provide the digital logic or intelligence for electronic applications; single-and multi-core microprocessors; and applications processors with embedded memory, and special purpose hardware and software for multimedia applications. It also offers wireless connectivity products for low power wireless communications functionality; communications processors that perform tasks related to control and management of digital data, and network interfaces; and radio frequency devices, such as power transistors, amplifiers, receivers, and tuners. In addition, the company provides analog and mixed-signal products, such as power management devices, system-based chips, battery and motor control devices, CAN/LIN network transceivers, and radar and signal conditioners; sensors comprising pressure, inertial, magnetic, proximity, and gyroscopic sensors, which act as an interface between an embedded system and external environment; and cellular products.
To review Madden's stock, please take a look at the 1-year chart of FSL (Freescale Semiconductor, Ltd.) below with my added notations:
1-year chart of FSL (Freescale Semiconductor, Ltd.) After hitting $16 as resistance (maroon) twice back in February and March, FSL fell all the way down to $12. Since that time though, the stock has worked its way back up and broken through its $16 resistance, which was also a new 52-week high. A pull back to that $16 level could provide a nice long entry on the stock.
The Tale of the Tape: FSL broke out to a new 52-week high and now seems to be pulling back. A long trade could be made at $16 with a stop placed below that level. A break below $16 would negate the forecast for a continued move higher.
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US Weekly Economic Calendar

time (et) report period Actual CONSENSUS
  Memorial Day
None scheduled
TUESDAY, may 28
9 am Case-Shiller home prices March   -- 9.3% (y-o-y)
10 am Consumer confidence May   72.3 68.1
  None scheduled  
8:30 am Weekly jobless claims 5/25
342,000 340,000
8:30 am GDP revision 1Q   2.5% 2.5%
10 am Pending home sales April   -- 1.5%
8:30 am Personal income April   0.2% 0.2%
8:30 am Consumer spending April   0.0% 0.2%
9:45 am Chicago PMI May   49.9 49.0
9:55 am Consumer sentiment May   83.7 83.7
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Saturday, May 25, 2013

Banking insider: Deutsche Bank in danger zone and will go belly up

On May 14, a financial analyst and former head trader at the Royal Bank of Scotland spoke on the Hagmann and Hagmann Report regarding the current state of the global economy. Known in the public sphere under the pseudonym of 'V', and labeling himself the Guerrilla Economist, this high level insider stated that not only is the entire economic system hanging on the precipice, much worse than in 2007, but that one of the largest banks in the Euro Zone, Deutsche Bank, is far gone into the danger zone and will very soon go belly up.
V: Deutsche Bank. Big bank. Biggest bank in Germany, and one of the biggest banks in the Euro Zone... they're going to go belly up. Watch it. Watch it, I said it, it's going to happen.
They are in such a danger zone, they don't know what to do. Deutsche Bank's derivative debt is greater than the global economy. That is one bank. $72 trillion in derivative exposure. The entire global economy, all the countries in the world is only $66 trillion GDP. - V, Hagmann and Hagmann Report, May 14
This high level financial insider, who works closely with alternative media personality Steve Quayle, has a growing track record of accurate predictions and assessments going back to 2012. In January of this year, V reported that Japan would begin the primary currency war now taking place around the world, that would eventually be the lynchpin to the global financial collapse to come. Additionally, the Guerrilla Economist months in advance predicted the Dow would climb to over 15000, and that precious metals like gold and silver would be forced down to help push the dollar to be the primary and final safe haven for global investors. (more)

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Here's What Warren Buffett Has Been Buying and Selling

Every quarter, many money managers have to disclose what they've bought and sold, via "13F" filings. Their latest moves can shine a bright light on smart stock picks.

Today, let's look at investing giant Warren Buffett. His Berkshire Hathaway (NYSE: BRK-B  ) company has increased its per-share book value by an annual average of 19.7% between 1965 and 2012, leaving the S&P 500 in the dust with its 9.4%. Clearly, the guy knows a thing or two about investing. With that in mind, let's take a look at his company's recent investment activity, noting that he heads a large corporation, and not a hedge fund or mutual fund. While he owns many businesses in their entirety, from Dairy Queen to GEICO to Fruit of the Loom, he also has tens of billions of dollars invested in the stock of other companies.

The company's reportable stock portfolio totaled $85 billion in value as of March 31, 2013.  (more)

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Forget Prayer, It’s Lamb Slaughter Time: A Rational Man’s Response To All Time High Gold Shorts

from Zero Hedge:
Two days ago we suggested that “they better pray there is no short squeeze.” Today, following the just released latest CFTC Commitment of Traders data which showed that the Comex gold short position grew once again to a new all time high of 79,416 shorts, all prayers are now off. If we may be so bold as to we suggest, the time has come to upgrade to the sacrificial slaughtering of at least a lamb on the altar of Saint Ben, because even the tiniest hint of a forced cover will now result in the biggest rip your face off levered short squeeze seen in the history of the yellow metal. Maybe throw in an ink cartridge or two for good measure…
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ServiceNow Inc (NYSE: NOW)

ServiceNow, Inc. provides cloud-based services to automate enterprise information technology (IT) operations worldwide. Its services include a suite of applications built on its proprietary platform that automates workflow and integrates related business processes. The company's IT infrastructure library applications include Incident Management for restoring a failed service to an operational state; Problem Management for resolving service outages or issues affecting various users; Change Management that manages the proposal and approval process for changes to be made to the IT infrastructure; Release Management, which assigns, manages, and monitors the various tasks; Configuration Management Database, an inventory repository; Service Catalog; Knowledge Management for storing and displaying knowledge articles or documents; Service Portfolio Management; and Service Level Agreement Management to monitor and manage the progress by IT staff on assigned tasks. Its IT applications also include Project and Portfolio Management for tracking and managing projects; IT Cost Management to track staff work time, project-related expenses, and labor costs; IT Asset Management to track financial elements; IT Governance Risk and Compliance; Software Development Lifecycle Management; Discovery, which discovers and maps operational dependencies; and Runbook Automation to execute routine and repeatable projects.
To review ServiceNow's stock, please take a look at the 1-year chart of NOW (ServiceNow, Inc.) below with my added notations:
1-year chart of NOW (ServiceNow, Inc.) NOW has rallied from a bottom of $25 in January to a new 52-week high of $44 in April. Along the way, the stock has formed a nice trendline of support (blue). Always remember that any (2) points can start a trendline, but it's the 3rd test and beyond that confirm its importance. Obviously NOW's trendline is important to the stock since it has been tested on multiple occasions.
The Tale of the Tape: NOW has created a nice trendline of support over the last (5) months. A long position could be entered on a pullback to that trendline, which is approaching $38, with a stop placed below that level. A short position could be entered if NOW were to break the trend line support.
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Doug Casey’s Primer on Internationalization

As many of you may know, International Man has its roots in the book of the same name. It was first published in 1978 by best-selling author, speculator, and renowned world-traveler Doug Casey.

The original intent of that book was to give readers a general sense of the exciting and opportunity-rich world that lay outside of their national borders, with a review of over 100 countries, valuable "opportunity intelligence," and the resources that anyone could follow to realize these opportunities.

Even though the book is now clearly out of date, the need for information on internalization is more relevant than ever, as governments the world over become more desperate. The purpose of this website is to preserve the mission of that book and be the premier location for up-to-date, highly actionable, and practical information on the topic.

So why is internationalization prudent?

Doug Casey has said over and over that spreading your political risk beyond one single jurisdiction is the single most important thing he can recommend today.

Political risk is minimized when you don't depend absolutely on any one particular country. Having all your eggs in one basket only makes it easier for someone to grab them all. Being internationalized makes it much harder for any particular government to control you.

We will no doubt see the major underlying trend of increasing political risk (especially for Westerners) get worse as governments sink deeper into fiscal and moral bankruptcy.

It is only prudent and logical to assume that you will, somehow and someway, continue to be squeezed harder in the pocketbook and subjected to escalating arbitrary and burdensome regulations and restrictions. In short, expect more government and less freedom all around.

The window to protect yourself from these risks by diversifying internationally gets verifiably smaller with each passing week. There are many ways to internationalize that do not require you to leave your home country. It is not necessary (at least, at the moment) that you immediately leave and become an expat.

However, it is necessary that you develop the options to internationalize before the government closes the window of opportunity to do so. If history is any guide, it won't be open forever.
In that sense, it is much better to have developed and implemented many parts of your internationalization game plan a year early rather than a minute late.

There are four broad areas of internationalization:
  1. Savings: This covers how to setup offshore bank, brokerage, and financial accounts, foreign real estate and "bolt-holes" in case of trouble, moving and owning gold overseas, and structures like foreign trusts that help to legally reduce taxes. Placing your savings outside the immediate reach of your local government ensures that they cannot be trapped in the case of capital controls or outright seized at the drop of a hat, such as what happened when the government became sufficiently desperate in Cyprus.
  1. Yourself: Obtaining a second passport from another country and establishing legal residency in foreign countries.
  1. Income: The structuring of your cash flows to reduce dependence on any one source in any one jurisdiction. Establishing additional sources of revenue, international investment opportunities and trends, and setting up an offshore company.
  1. Digital Presence: This commonly includes your IP address (which can often pinpoint you to a precise physical address), email account, online file storage, and the components of personal/business websites.
Last, I will leave you with a primer on internationalization with Doug Casey.
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Why a Uranium Renaissance Looks Inevitable

from Casey Research

Casey Research’s Chief Energy Investment Strategist, Marin Katusa, whose portfolio profited nicely the last time the uranium bull broke loose a decade ago, recently interviewed a group of world-renowned energy experts to discuss the prospects for the sector that some considered doomed by the Fukushima disaster. Anti-nuclear power sentiment has by no means evaporated, but Katusa sees clear signals that the bulls are ready to run, not least of which is the recent attack on the Somair uranium mine in Niger.
Why? First, the 20-year Highly Enriched Uranium (HEU) Program agreement between the U.S. and Russia, aka “Megatons to Megawatts,” expires this year.
Second, the end of that program will allow Russia to sell its coveted uranium, which currently powers one of every 10 homes in the U.S., to the highest bidder. With 200 nuclear power plants under construction or on the drawing boards, China is likely to be first in line, with India and even oil-rich Saudi Arabia on its heels.
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Investment Education 101: Housing: Short sale basics

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How Supply in the Bond Market Is Inflating Stocks

Investors are stuck between a rock and a hard place. At the same time that bonds are offering historically low yields, stocks are trading for a healthy premium over their 60-year average. According to the most widely cited estimate, the current premium on the S&P 500 (SNPINDEX: ^GSPC  ) is upwards of 24%.

Given the sluggish economic recovery, what's causing asset prices to inflate?

The obvious, though incomplete, answer is that there's been an increase in demand for debt securities from the Federal Reserve. Since the fourth quarter of last year, the central bank has purchased $85 billion each month in long-term treasuries and agency mortgage-backed securities. The effect has been to hold long-term interest rates at their current low levels -- indeed, had you told someone 10 years ago that the yield on the 10-year treasury would go below 2%, they would have called you crazy.

The Fed's actions are also a proximate cause for the recent ascent in equity prices. The connection here was discussed by Warren Buffett in a famous speech he gave at the height of the dot-com bubble (if you've never read it, I strongly encourage you to do so).  (more)

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