Wednesday, July 31, 2013

How Important Is The Spot Price of Uranium?

Though the spot price of uranium has fallen to US$34.50/lb.—a far cry from the US$140/lb it fetched a few years prior—how important is the spot price of uranium? The answer: not as important as the long-term price. In fact, over six times more uranium is traded in long-term market prices than in the spot market price. Most investors in the commodity universe understand the spot price for metals. A simplified definition of the spot price is what the metal costs to buy or sell right now, minus the commissions and fees. Oil, for example, trades billions of dollars a day on a spot price. For copper producers, unless they are hedged, the spot price is the price that matters to them when they sell their production.
The Dubious Uranium Spot Market
I say dubious because less than 15% of the metal is actually traded on spot prices. In the uranium sector, there are two types of markets: the spot price (less than 15% of the market—and as low as 5%); and the long-term price (over 85%). Currently, the long-term price for uranium is over 50% higher than the spot price. The long-term uranium price is currently set at US$57 per pound, whereas the spot price as of this writing is US$34.50.
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China’s Coming Credit Crisis – James Corbett on RT

After years of China’s rapid growth and development, the world’s second largest economy appears to be slowing down. The government is expecting the lowest rate of economic expansion in more than two decades. James Corbett, editor of The Corbett Report news website, joins RT to talk more on China and its place in the global economy.
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2 Stocks to Profit Most From the ‘Texas Oil Boom’ : PXD, PER

As I wrote up this analysis of the best investments in oil, a familiar saying came to mind: “Everything old is new again.”

A truer statement could not be said about the Permian Basin, which is a geological formation roughly 300 miles long and 250 miles across that stretches across west Texas and eastern New Mexico.

It has been producing oil (29 billion barrels worth) since 1921. But even as recently as a decade ago, it was thought to be played out.

That was before new drilling technologies such as fracking were considered for use in the region.

Nearly 48% of all drilling rigs in the country are drilling right now in Texas, with over 400 drilling rigs in the Permian Basin alone. (more)

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Bullish at the Bottom: Why Now is the Time to Buy Commodities

by Frank Holmes
Daily Reckoning

It was a challenging first half of the year for most commodities, with only two resources we track on our Periodic Table of Commodities Returns rising in value. Natural gas and oil rose 6.5% and 5%, respectively, while silver lost a third of its value and gold lost a quarter of its price from the beginning of the year.
[...] At first glance, the correction seems to support naysayers who believe the supercycle in commodities has ended, such as Credit Suisse analysts who had declared that the “era is over” in its digital magazine The Financialist.
We disagree. Instead, we see severe price declines as possible buying opportunities during this ongoing commodity supercycle.
Continue Reading at…
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Tibco Software Inc. (NASDAQ: TIBX)

TIBCO Software Inc. provides middleware and infrastructure software worldwide. It offers products in the areas of service-oriented architecture (SOA) and core infrastructure; business optimization; and process automation and collaboration. Its SOA and core infrastructure product line helps organizations integrate their disparate systems and move towards flexible infrastructure comprising services or discrete data components that can be assembled, orchestrated, and reused. The company's business optimization software tracks large volumes of real-time events as they occur and applies rules in order to identify patterns that signify problems, threats, and opportunities, as well as automatically initiate appropriate notifications or adaptations of processes. Its process automation and collaboration software helps organizations coordinate manual and automated process flows that span their business and enables employees to collaborate in real-time using social media. The company also provides professional services, which include consulting services that comprise systems planning and design, installation, and systems integration; maintenance and support; training; and hosted services.
Please take a look at the 1-year chart of TIBX (TIBCO Software, Inc.) below with my added notations:
TIBX holds above resistance TIBCO's stock had been trading in a large, sideways range since December. Over those last (9) months, the stock has also formed a key level at $24 (navy), which had most recently been acting as resistance. Late last week the stock finally broke back above that $24 level. So, assuming TIBX holds $24, the stock should be moving overall higher from here.
The Tale of the Tape: TIBX had a key level of resistance at $24 that should now act as support on any pullbacks. A long trade could be entered on a pullback to $24 with a stop placed below that level. However, if the stock were to break back below $24, a short trade could be made instead.
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US Rents Hit Record Highs As Homeownership Plunges To 18 Year Lows

The American Homeownership Dream is officially dead. Long live the New Normal American dream: Renting.
According to the latest quarterly homeownership data released by the Census Bureau, the raw homeownership rate of 65.0% was unchanged from last quarter and 0.4% lower than a year ago. And on a seasonally adjusted basis (not sure why homeownership is adjusted for seasons: people who live in a house in the winter generally live under a bridge in the summer?), the percentage of Americans who have a house declined from 65.2% to 65.1%: the lowest since 1995.
Obviously the flipside to most “children” in their mid-30s still living in their parents’ basements is that those wishing to brave the New Normal world will have to spend a lot for rent. A record lot in fact, as the median asking rent for vacant housing units just hit an all time high of $735 per month.
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Tuesday, July 30, 2013

Are Stocks Heading for a 1987-Style Crash?

A year ago, Wall Street pundits and prognosticators were busy marking the 25th anniversary of the great stock market crash of October 1987, and speculating whether it could happen again to a market that had doubled over the prior three years, despite a weak underlying economy.

While October 2012 ultimately saw the Dow Jones Industrial Average (^DJI) decline by about 2.5%, that was nothing compared to the 22% one-day wipe out that crushed the market two-and-a-half decades earlier.

Today, with the Dow up more than 2,000 points since last October and trading at record highs, fears are rising that the red hot stock market could be setting up for something sinister once the summer slow season is over. (more)

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Whitney: High Interest Rates Will “Trigger a Real Downsizing” for Cities

Meredith Whitney famously predicted in December 2010 that “hundreds of billions of dollars” of municipal defaults would happen within the next 12 months. The good news is that Whitney's call never materialized and the former banking analyst has since been widely criticized. In her new book Fate of the States, Whitney discusses the cause of the 2008 housing crash and forecasts boom times for the states that escaped the residential crash and burn. But investors and analysts are eager to get Whitney's take on Detroit's filing for bankruptcy protection -- the largest in U.S. history -- and revisit her notorious prognostication again. She called the filing "a game-changing event."

When asked how Detroit’s situation will impact the muni bond market more broadly, Whitney demurred.

“Well let me turn that question back to you because you have more experience in the muni bond market than I do,” she says to The Daily Ticker’s Aaron Task in the attached video. “What do you think?”

When pressed, Whitney agrees with Task that cash-strapped cities and municipalities will likely pay high interest rates on their bonds from creditors, a situation that would dig local governments deeper into debt. She explains:

“In state constitutions there are caps on the debt service payments but not caps on the total debt outstanding that a state is allowed to carry. So when you have very low interest rates, and very cheap costs to borrow, you can borrow a lot. Now all of a sudden if your cost of borrowing has gone up by a factor of 2x, you’re hitting limits that are actually going to trigger a real downsizing for a lot of the municipalities that have been really going for broke over the last couple of years.”

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"Dr. Doom" Marc Faber: The end of this bubble is approaching

Given more than his normal 30-second soundbite on mainstream media, Marc Faber is able to discuss in considerably more detail his views on the massive growth in global financialization (when compared to real economies) noting that "one day, this financial bubble will have to adjust on the downside." This will occur via either an inflationary burst or a collapse of the system. Simply put, "it's gonna end one day," either through war or financial collapse, "it will be very painful." The Gloom, Boom, and Doom Report editor notes current asset valuations are driven by excess credit creation, printing money, and distorted market signals, and the unintended consequences of the effect on investor psychology are perfectly mis-timed. Faber concludes with a discussion of the inflationary impact of US monetary policy and where it is seen (and not seen) and the global social unrest implications of middle class discontent.
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Franklin Resources: Big BEN

Our strategy is based on adding one stock each month to our model portfolio; the stocks are chosen exclusively from those that have announced splits in the previous month.

The universe from which we are is selecting, the group of split stocks, is already assumed to be performing “ahead of the market”. So all one has to do is achieve an average performance within that pre-selected group.

First, we look for companies that are making money “the old fashioned way” are preferred. In other words, companies that have real earnings that are growing at a moderate pace get preference.

Second, we look for companies that pay dividends receive high marks. Dividends are a hedge against a falling market and are a signal, in themselves, that the company’s management recognizes for whom they are working.  (more)

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Penn West Petroleum Ltd (NYSE: PWE)

Penn West Petroleum Ltd., an exploration and production company, engages in acquiring, exploring, developing, exploiting, and holding interests in petroleum and natural gas properties and related assets in western Canada. The company's principal proved plus probable reserves are located in Alberta, British Columbia, Saskatchewan, Manitoba, and the Northwest Territories, Canada. It also has proved plus probable reserves interests in Wyoming in the United States. The company was formerly known as Penn West Energy Trust and changed its name to Penn West Petroleum Ltd. in January 2011. Penn West Petroleum Ltd. was founded in 1979 and is headquartered in Calgary, Canada.
Please take a look at the 1-year chart of PWE (Penn West Petroleum, Ltd.) below with my added notations:
1-year chart of PWE (Penn West Petroleum, Ltd.) PWE peaked last September at $17 and lost half of its value from there. The stock seems to be forming a base over the last (9) months all the while hitting a very important level of resistance at just under $12 (red). No matter what the market has or has not done since November, PWE has not been able to break through that area of resistance. If the stock can finally move above $12, higher prices for the stock should follow.
The Tale of the Tape: PWE has a key level of resistance around $12. A long trade could be entered on a break through that level. However, if you are bearish on the stock, a short trade could be made on any rallies up to $11.75 - $12.
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5 Rocket Stocks to Buy in August : GM, HPQ, JNJ, MA, PEP, V, DLPH

The combination of summer doldrums, Fed tapering, and muted earnings expectations can't seem to derail the rally in stocks. And it looks like investors are finally starting to get the hint...

The S&P 500 is more than 18% higher today than it was on January 1. And as the upside from equities becomes more and more conspicuous, retail investors are starting to become buyers again. Don't mistake that for a contrarian signal – fewer U.S. households owned stocks at the start of the year than in any time during the last two decades. That extreme was a contrarian signal to start buying; this modest uptick in investor participation is just confirmation of the rally.

So, with more upside left to wring out in 2013, we're taking a closer look at five new Rocket Stocks worth buying in August.

For the uninitiated, "Rocket Stocks" are our list of companies with short-term gain catalysts and longer-term growth potential. To find them, I run a weekly quantitative screen that seeks out stocks with a combination of analyst upgrades and positive earnings surprises to identify rising analyst expectations, a bullish signal for stocks in any market. After all, where analysts' expectations are increasing, institutional cash often follows. In the last 209 weeks, our weekly list of five plays has outperformed the S&P 500 by 80.66%.  (more)

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Monday, July 29, 2013

Biodel (NASDAQ: BIOD): Under $5 Biotech Stock on the Verge of a Potential 82% Breakout

I like trading biotech stocks under $10. These little dynamos can be powerful wealth creation tools if wisely chosen and traded within a well-diversified portfolio.

I am sure I don't need to say it to any experienced investors, but a word of caution is needed whenever mentioning biotech trading. Biotech stocks are notoriously volatile and can be an account killer if not managed with the utmost respect for risk. 

Knowing which biotech stocks to buy and which to avoid is a science in and of itself. This process can become so complicated that often the best biotech investors are medical doctors or pharmaceutical research PhDs. These individuals can drill into the scientific nuances of the various biotech products to determine the ones that have a high chance of success.

Well, what about the rest of us -- those of us without high-level degrees in the sciences? Is success still possible trading biotech stocks? (more)

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HMS Holdings Corp. (NASDAQ: HMSY)

HMS Holdings Corp. provides cost containment services to government and private healthcare payers and sponsors. The company's services include co-ordination of benefits and program integrity services. Its co-ordination of benefits services provide cost avoidance services that offer validated insurance coverage information, which is used by government-sponsored payers to co-ordinate benefits for incoming claims; and program integrity services identify improper payments on a pre-payment and post-payment basis, identify and recover overpayments, detect and prevent fraud and abuse, and identify process improvements. It serves state Medicaid agencies; the centers for Medicare and Medicaid services; commercial health plans, including Medicaid managed care, Medicare Advantage, and group health lines of business; government and private employers; Pharmacy Benefit Managers; child support agencies; the Veterans Health Administration; and other healthcare payers and sponsors.
Please take a look at the 1-year chart of HMSY (HMS Holdings Corp.) below with my added notations:
1-year chart of HMSY (HMS Holdings Corp.) HMSY has a very important price level at $26 (navy) that has been both support and resistance over the last (6) months. The stock also has a clear lower level of support at $22 (blue). In between those levels you can see that $24 (red) is not an uncommon area of support or resistance either. So, in addition to showing clear levels of support/resistance, HMSY is also showing you that it tends to react to each $2 increment.
The Tale of the Tape: HMSY is currently trading between its $24 and $26 levels. A long position could be entered at $24 or on a break above $26 with a stop below the level of entry. If HMSY breaks below $24, another long play could be made at $22. If you are looking for a short trade instead, a break below $24 would provide you with that opportunity.
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Europe is a Hot Mess ~ Alasdair Macleod

It's almost August, the month everyone in Europe takes off on holiday to forget their troubles. This year may be different, though, as not only can many not afford a vacation, but Europe's troubles loom so large that forgetting them won't be easy...

In this podcast, Chris talks with's European economy expert Alasdair Macleod about the current state of the Continent. As a reminder, Chris is keeping a keen eye on events in Europe, as he sees the region the most likely candidate to serve as the flash-point for the next major global financial crisis. Sadly, Alasdair has few reasons to convince him otherwise. 
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4 in 5 in US face near-poverty, no work

Four out of 5 U.S. adults struggle with joblessness, near poverty or reliance on welfare for at least parts of their lives, a sign of deteriorating economic security and an elusive American dream.

Survey data exclusive to The Associated Press points to an increasingly globalized U.S. economy, the widening gap between rich and poor and loss of good-paying manufacturing jobs as reasons for the trend.

The findings come as President Barack Obama tries to renew his administration's emphasis on the economy, saying in recent speeches that his highest priority is to "rebuild ladders of opportunity" and reverse income inequality.  (more)

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InvenSense Inc. (NYSE: INVN): This Tech Stock Could Double Soon

The technology I want to tell you about today is one of my best investment ideas.

And not just because it saved my life.

I’m talking about “location-based services,” the technology that allows your smartphone to show where you are… or tell you where you need to go.

It’s a technology that has double-your-money profit potential because of all it can do.

It can help you find the nearest retail sale, guide you to the seafood house where you have reservations, or get you to a hotel for a good night’s sleep.  (more)

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A Recipe for Success: One of the Biggest and Best Mining Packages, Balmoral Resources: BAR.V

There are certain time tested business models which have a high probability of leading to major rewards for early shareholders. But not everyone can do it. As a matter of fact, few people do.

That’s why I am about to introduce a company whose management team was able to turn their $0.13 stock to a $3.00 buyout in less than 12 months – a potential return of 2215%.

A $10,000 investment could have returned you $221,500.

That same team is giving investors another opportunity. Only this time they are even bigger…and better.

Their newly formed company now owns one of the largest land positions in the Abitibi – home to the second largest accumulation of gold in the world.  (more)

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US Weekly Economic Calendar

time (et) report period Actual CONSENSUS
10 am Pending home sales index     -- 6.8%
9 am Case-Shiller home price index May   -- 12.1% y-o-y
10 am Consumer confidence index July   81.2 81.4
8:15 am ADP employment July   175,000 188,000
8:30 am GDP 2Q   1.0% 1.8%
8:30 am Employment cost index 2Q   0.4% 0.3%
9:45 am Chicago PMI July   53.5 51.6
2 pm FOMC announcement        
8:30 am Weekly jobless claims 7/27
-- 343,000
9 am Markit PMI July   -- 51.9
10 am ISM July   52.0% 50.9%
10 am Construction spending June   0.5% 0.5%
TBA Motor vehicle sales July   15.9 mln 15.9 mln
8:30 am Nonfarm payrolls July   175,000 195,000
8:30 am Unemployment rate July   7.5% 7.6%
8:30 am Personal income June   0.5% 0.5%
8:30 am Consumer spending June   0.5% 0.3%
8:30 am Core PCE price index June   0.2% 0.1%
10 am Factory orders June   2.2% 2.1%
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Saturday, July 27, 2013

Smart(er) money betting on copper

The terrific Asbury Research recently featured how commercial hedgers have made a huge bet on copper. Although some may disagree, it's generally accepted that in the world of futures, commercial hedgers tend to be the smarter money. Granted, much of their smartness or ability to be more right than wrong comes from simply being on the other side of trades that tend to be more wrong than right. In the zero-sum game of the futures market, commercial hedgers are frequently on the opposing side of an increasingly popular trade, and as we know being contrarian is very often a winning strategy.
I would also emphasize that the timeliness of commercial hedgers greatly improves at extremes, meaning when their position size approaches levels that have rarely been attained over time. And if you read the Asbury Research piece (strongly urged), it's quite evident this is one of those times, with commercial hedgers at "their largest collective net long position for copper in the 30-year history of the contract."
The weekly futures chart of copper further illustrates the ups and downs of contract flow.
Source: Finviz
Note the red circles signifying levels where commercial hedgers established very large net long exposures -- and more often than not these levels have coincided with bottoms for copper. And vice versa, at levels where commercial hedgers have been very net short, as was the case at the start of 2011, copper has tended to be at a peak. I would also point out that the round-number of $3.00 appears to be a meaningful level of longer-term price support.  (more)
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Investing in Real Estate Without Buying Property

History suggests that the home you live in is likely to be the largest investment you will ever make. But because the costs and barriers to get into the real estate market are so high, many investors look no further than their front door.

But as Phil DeMuth of Conservative Wealth Management explains in this installment of Investing 101, REITs (or Real Estate Investment Trusts) make it possible to buy properties you couldn't even dream of owning yourself.

1) What Exactly Is a REIT?

"A Real Estate Investment Trust is a business that buys real estate. Typically they specialize in one particular slice of the commercial market," he explains, pointing out that a REIT buys a series of properties, manages them, collect rents, and then passes that money along to shareholders. (more)

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The Crash of 1929 - FULL DOCUMENTARY (Stock Market Wall Street)

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Has the U.S. Treasury Already Exceeded the Debt Limit?

U.S. federal debt has been stuck at $16,699,396,000,000.00 for 68 straight days, according to the Daily Treasury Statement on July 24. That amount is exactly $25 million less than the legal borrowing limit of $16,699,421,000,000.00 set on May 17, 2013. But that’s only part of the story.

A closer look at the numbers actually shows the U.S. Treasury has already blown past the federal legal borrowing limit! And the mainstream media, as usual, is out to lunch. The table below shows how “Total Public Debt Outstanding” is already $38.82 billion above the statuary debt ceiling and now at $16,738,106,000,000.00.

The yield on 10-year U.S. Treasuries (^TNX) has surged 51% over the past three months and 84.07% over the past year alone. That move has taken the 10-year yield from 1.40% to 2.61%. And bond investors – especially owners of long-term debt - are beginning to see something they haven’t seen in a while; hefty losses.  (more)

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Dow 16,000 finds resistance dating back 90 years, in play now!

Do charts have memories? Could an confluence of support and resistance lines dating back as much as 90 years end up being important to the Dow? What would happen if the Dow breaks above this rare line up?
Some key "Emotipoints" (emotional turning points) dating as far back as the 1920's, line up at one price zone, which comes into play around Dow 16,000. As of last nights close, the Dow is less than 500 points/less than 3% away from this confluence of Emotipoints.
This confluence of Emotipoints becomes all the more important when you look at the chart above ( , which reflects that the Dow hasn't made any gains after subtracting for inflation in 13-years! (see post here)
Odds are high we won't know for a while how the Dow will handle this rare situation. At this time the confluence should be viewed as resistance.  If the Dow can break through this cluster of lines, it would be a very positive technical event!
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Contango 101: What It Means for Your Energy Investments

Sometimes it seems like investors have a language all their own. If you ever tune in to the talking heads on some of the major business stations, they'll use some big words that likely will have you scratching your head. One such word is contango, which has absolutely nothing to do with dancing.

Contango is a term used when a trader is talking about a forward or futures contract. Normally, a forward or futures curve will have an upward slope to it meaning that traders are willing to pay more for the underlying commodity or contract in the future. The market is said to be in contango when traders are willing to pay more today than they are in the future. The following graph helps to display this more visually:
Source: Suicup
This term can come into play when investing in the energy markets. When natural gas or oil is in contango, a producer might want to lock in the price of oil and gas to get a better short-term price to ensure its profits. That's because if a market is in contango it means that the company can earn more money by selling short-term contracts as opposed to a longer-term contract. Let's take a look at a couple of examples of how this can play out with your investments.  (more)
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Incredible chart may have called the exact bottom in gold stocks

Fibonacci, that incredibly insightful mathematician of the 13th century who mysteriously whispered his secret to those of us who reverently pondered my previous post of June 30th, has proven (as usual) to have correctly called the exact bottom in the Amex Gold Bugs Index (HUI) quite literally to the exact day (Thursday June 26). 

Confirmation of this fact came yesterday with the gap opening of the HUI index, as price landed squarely on 'the other side' of the 43 week price down trend line and today included more upside follow through, just for good measure. The weekly chart of the HUI index is giving us the requisite Fourth of July show, as the True Strength Index (TSI) indicator has put together first a positive divergence BUY signal, followed by a trend line break BUY signal, and with the TSI (7,4) reading presently just at ZERO, it appears the third bullish BUY signal (ZERO crossover) will be attained, perhaps as soon as tomorrow.  (more)

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Friday, July 26, 2013

The American Dream Film-Full Length

The AMERICAN DREAM is a 30 minute animated film that shows you how you’ve been scammed by the most basic elements of our government system.
All of us Americans strive for the American Dream, and this film shows you why your dream is getting farther and farther away.
Do you know how your money is created?
Or how banking works? Why did housing prices skyrocket and then plunge?
Do you really know what the Federal Reserve System is and how it affects you every single day?

THE AMERICAN DREAM takes an entertaining but hard hitting look at how the problems we have today are nothing new, and why leaders throughout our history have warned us and fought against the current type of financial system we have in America today. You will be challenged to investigate some very entrenched and powerful institutions in this nation, and hopefully encouraged to help get our nation back on track.
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GOFO = Gold forward rate Chart

GOFO = Gold forward rates, the difference between cash gold and future gold.

Backwardation = Negative GOFO
Negative GOFO = When the nearby future gold price exceeds the spot future gold price.

This time it is terminal.
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FORD is Up 80%, and is Just Getting Started: F

For three decades now, I’ve trusted Fords.

I got my first used Ford Escort as a college kid, drove it for years, then passed it down to my younger brother.

I bought a brand-new red Mustang in the late 1980s – and still regret ever having sold it.

I’ve since had an Escort wagon, which died only because the guy who changed the oil didn’t put the cap back on the oil pan when he was done.

And I just bought my latest Escort — a 2001 model with more than 95,000 miles on it. I have every reason to believe that with proper TLC, it’ll go to at least 200,000.  (more)

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Why MicroFinancial Will Be the Market’s Next Ten-Bagger: MFI

It’s a very rare thing to find a potential ten-bagger like this. I think it’s only happened three or four times since I began investing in 1995. This is the kind of Peter Lynch stock that you catch when it’s an underfollowed microcap, that just happens to provide something people really need, and for which a highly fragmented market allows it room for potentially explosive growth.

MicroFinancial Inc. (MFI) also happens to operate in an area I have experience in. It’s part of the alternative finance sector that I’ve been working in for almost 10 years.

Peter Lynch always said to invest in something you understand, and in this case, it’s my expertise.

MFI leases business equipment and provides other forms of business and consumer financing. The businesses it assists might be startups, or they may be established. Even better, MicroFinancial doesn’t have to market directly to these businesses. A national network of equipment vendors, brokers and other dealers advertises on their behalf.  (more)

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The Fresh Market Inc (NASDAQ: TFM)

The Fresh Market, Inc. operates as a specialty grocery retailer. The company offers various perishable product categories, including meat, seafood, produce, deli, bakery, floral, sushi, and prepared foods; and non-perishable product categories, such as traditional grocery and dairy products, as well as bulk, coffee and candy, beer and wine, and health and beauty products. As of March 12, 2013, it operated 130 stores in 25 states of the United States. The company was founded in 1981 and is headquartered in Greensboro, North Carolina.
Please take a look at the 1-year chart of TFM (The Fresh Market, Inc.) below with my added notations:
1-year chart of TFM (The Fresh Market, Inc.) After selling off from November til March, TFM has slowly worked its way higher. Throughout the year, the stock has created a key level at $55. For example, $55 was support several times last fall, and it has now acted as resistance once already back in May. Now the stock is approaching that level again and that could provide a potential trading opportunity.
The Tale of the Tape: TFM is back up at $55. A trader could enter a short position at $55 with a stop placed above that level. If the stock were to break back above that $55 resistance a long position would be recommended instead.
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Trader alert: Keep an eye on the Transports

I think now is probably a good time to bring up the Dow Jones Transportation Average running up into its May highs. These fresh closing highs in trannies got all the Dow Theorists pumped up last week as they finally confirmed the new highs that the Industrials had already been making. But what you don’t hear much these days is the big underperformance for Transports lately. The relative strength the group had been showing this year peaked all the way back in March, believe it or not.
But why am I really worried up here? Well, it just bothers me when new highs are made that can’t hold for more than a day or two, especially when they’re all-time highs, as was the case in Transports. Here is the daily bar chart showing what just happened:
7-23-13 djt
Notice the bearish divergence that has been developing throughout the year as prices have rallied; the relative strength index has not confirmed. But more problamatic might be the weekly chart. Look at the same higher highs, but more bearish divergences in RSI:  (more)
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Thursday, July 25, 2013

Financial Astrology: Bullish Trend Remains Strong

Our model portfolio continues to show gains along with the major indexes.  At the end of last week the Nasdaq issued a buy signal along with a minor pullback.  This means the bullish trend is very strong and the markets will likely move much higher.  Last week the grand trine with Neptune/Saturn/Jupiter tightened to an exact degree on July 17th.  Transiting Jupiter is moving to an exact conjunction to the US Jupiter (stocks) while the influence from the grand trine comes down from the heavens.  The influence of this aspect could be why the markets have remained so bullish while the city of Detroit is falling into bankruptcy.  Mercury has moved direct on July 20th while inconjunct (150 degree angle, shaped like a boomerang) to the Federal Reserve Mercury in the 5th house of ‘the states or colonies,’ in this case Detroit, which is delivering, or returning like a boomerang, the karma of debt.  This influence can, and has in the past, created a ‘yank’ (sharp pullback).  This is also why I have highlighted the potential for a pullback into July 26th.

full_moonOn Monday July 22nd there is a full moon in perigee (closest to earth) at 0 degrees Aquarius.  Full moons in perigee have a more significant influence than full moons further out (called apogee).  The gravity of the moons weight pushing on earths atmosphere has a greater influence on the emotional bodies of society and reflects (or magnifies) those energies for good or ill.  The moon is simply a giant reflector of mans creations in the earth.  A full moon in perigee is different than an eclipse of the moon (not as dire) where the moon is ruled by the darkness and night side of life, instead of reflecting the light of the sun.  The last full moon in Perigee was on June 23rd at 356,991 km from earth, and marked a turning point in the markets that was bullish.  On Monday the full moon is 359,169 km from earth, 2178 km further out from earth.  The influence of the moon could again bring a turn in the markets and I am cautious about the markets here with Mercury inconjunct in the Fed chart into July 26th.

I should also note that the full moon perigee/apogee cycle is shifting now where the succeeding full moons will progressively move further from earth until next Summer when in August 2014 the full moon will be at 356,898 km from earth.

Overall, we are very bullish and see these potential pullbacks as opportunities to buy new long positions.Please share this article

Splunk is Getting Too Big to Not Fail: SPLK

Momentum investing can be a double-edged sword. If you buy a stock with great technical trends such as rising relative strength (RS), then you can ride the wave to rapid gains. But once momentum investors embark on a fierce buying frenzy, share prices can become disconnected from the fundamentals. Further gains can be had as momentum extends, but once the tide turns and momentum investors exit a stock, the downside can be swift.
The key for such stocks: Identify the event that may trigger a turning point. And that is the basis for today's trade.
Indeed, the froth is reaching dangerous levels for high-flying software provider Splunk (NASDAQ: SPLK), and an upcoming quarterly-earnings release (scheduled for Aug. 26) could lead to a serious bout of profit-taking.
Splunk's ongoing surge throughout 2013 is explained away by one simple fact: The company is growing by leaps and bounds. Splunk provides software that helps analyze and optimize the performance of large data sets, especially those found in today's cloud computing. Huge reams of data can be sorted through in a matter of seconds, allowing IT managers to make important network management decisions quickly. Data analyzers in retail, health care and other fields can now react much faster to key changes in trends. (more)

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Gerald Celente – Trends In The News – “The Extended Generation?”

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Potash Corp. on the Verge of a Potential Double-Digit Breakdown: POT

After rallying hard off a late 2008 low, agricultural chemicals firm Potash Corp. of Saskatchewan (NYSE: POT) found a serious top in early 2011, one that acted as the precursor to a choppy slide lower. Since the 2011 top, the stock has developed a series of lower highs. Notably, though, while it traced out lower highs, it continually failed to record a meaningful lower low.

POT has strong support around the $37 area. But if broken, the stock has the potential to quickly accelerate lower, finally recording the lower low that the bears are looking for.

Oh, I remember it well... Potash used to be the sexiest stock on the block back in late 2006 through the first half of 2008. But, as always happens, those chasing a stock with too steep a slope end up paying a steep price. For POT investors, this happened in 2008 as the stock cascaded lower. A climb that took roughly 20 months to complete took less than six months to erase/retrace 90%.

I discuss such patterns frequently because they offer some of the juiciest trading setups. Furthermore, they exemplify the herding nature of today's markets, driven by momentum and trend followers, and exacerbated by overly accommodative fiscal policies on the part of central banks. (more)

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2 Stocks to Buy Ahead of ‘Big Pharma’ Buyouts: ORMP, MNKD

According to the American Medical Association (AMA), one in three Americans is overweight.
Moreover, the AMA recently classified obesity as a disease.

This is news that’s bound to trigger a renewed effort in developing treatments for the two most common conditions associated with it:
Diabetes and heart disease.

But for that to happen, we’ll need to see a trend shift.

That’s because Big Pharma’s research and development budgets are anything but robust right now.
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Aruba Networks, Inc. (NASDAQ: ARUN)

Aruba Networks, Inc. provides network access solutions for the mobile enterprises worldwide. It offers ArubaOS, an operating system software for wired, wireless, and remote access products for integrating user-based security, application-aware radio-frequency services, and wireless local area network (LAN) access to deliver mobile networking solutions, as well as provides various software modules for ArubaOS. The company also offers Mobility Controllers, which provides context-aware networking across wireless and wired LANs, virtual private network (VPN) connections, and remote offices; ClearPass Access Management System for bring your own device provisioning and onboarding, as well as for IT-issued and personal mobile devices to connect to any network; Aruba Instant, a controller-less Wi-Fi solution; AirWave, a multivendor network management software that manages radio frequency (RF) environment, controllers, wired infrastructure, and access points; and Access Points, which offers integrated RF management, intrusion prevention, and support for maximum client density of smartphones and tablets.
Please take a look at the 1-year chart of ARUN (Aruba Networks, Inc.) below with my added notations:
1-year chart of ARUN (Aruba Networks, Inc.) In contrast to the overall stock market, ARUN has had a rough slide since March. After a couple of large gaps lower in May though, the stock has slowly started to rebound and is fast approaching $18. The level (navy) is key to ARUN because it was both support back in October and November, and it was also resistance in May after the 2nd gap lower.
The Tale of the Tape: ARUN is approaching a key level at $18. A trader could enter a short position at $18 with a stop placed above that level. If the stock were to break back above that $18 resistance a long position would be recommended instead.
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Wednesday, July 24, 2013

Watch Plunging Gold Inventories & Backwardation / July 23, 2013
Today 50-year veteran Art Cashin warned about major concerns in the gold market because of declining gold inventories.  Cashin, Director of Floor Operations at UBS ($650 billion under management), also cautioned about the backwardation in gold, and noted the massive global demand as well.
Art Cashin:  “All That Glitters Is Not Arbitrage – Monday, spot gold spiked up $45 and the media pundits pointed to things from China to the FOMC.  While all the cited may have been factors, veteran traders saw the bulk of the move resting in a conspiracy story.
In my mid-day email to friends I had noted this:
Gold soars as NYT story on metal warehouses fans flames of conspiracy theorists that gold warehouse
stores have been “lent” out.  That theory also aided by backwardation (spot price far above near future).
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VIVUS, Inc., a biopharmaceutical company, engages in developing and commercializing therapies to address unmet needs in obesity, sleep apnea, diabetes, and sexual health. The company offers Qsymia, a drug for the treatment of obesity as an adjunct to a reduced-calorie diet and increased physical activity for chronic weight management in adult patients with an initial body mass index of 30 or greater, or 27 or greater in the presence of at least one weight-related comorbidity, such as hypertension, type 2 diabetes mellitus, or high cholesterol; and STENDRA for the treatment of erectile dysfunction. It also completed Phase II clinical studies of Qsymia for the treatment of obstructive sleep apnea; and Qsymia for the treatment of type 2 diabetes. The company has an agreement with Mitsubishi Tanabe Pharma Corporation for the development and commercialization of avanafil, a PDE5 inhibitor compound for the oral and local treatment of male and female sexual dysfunction. VIVUS, Inc. was founded in 1991 and is headquartered in Mountain View, California.
To analyze the company's stock for potential trading opportunities, please take a look at the 1-year chart of VVUS (VIVUS, Inc.) below with my added notations:
1-year chart of VVUS (VIVUS, Inc.) VVUS has been trending sideways for the last (8) months. As the stock has bounced along, it has formed a couple of key price levels to watch. The first is the strong $15 resistance level (red). The other is the key level of $12 level (blue) that has acted as both support and resistance and VVUS just recently bounced off of.
The Tale of the Tape: VVUS appears to be on its way back up to $15. A long position could be entered at the $12 support or on a break above the $15 resistance, with a stop placed below the level of entry. A short play could be made on a break below $12 or on a rally back up to $15.
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Three Qualities That Separate Junior Gold Winners from Losers: Eric Coffin

Source: Kevin Michael Grace of The Gold Report (7/22/13)

Gold juniors need to get back to the basics, says Eric Coffin, and it is going to take large discoveries to get the market excited again. In this interview with The Gold Report, the publisher of Hard Rock Analyst explains how the new economics of gold production require investors to concentrate on companies with three specific qualities, and names companies and the regions that could generate breakout projects.
The Gold Report: Federal Reserve Chairman Ben Bernanke indicated last month that the Fed would begin to taper quantitative easing in September. The equity markets responded quite negatively to this. In the wake of this response, do you think the Fed is committed to this new policy?

Eric Coffin: I think the Fed is committed to tapering, but I suspect it will happen a little more slowly than some people think. Bernanke's quite cognizant that when he does taper it's going to have an impact on the markets. But you can't keep buying $85 billion worth of bonds a month forever. Bernanke has backed off a bit himself on this issue and was back to using 6.5% as his unemployment target. If the U.S. keeps creating jobs at the pace of 175,000 to 200,000 per month, it will take a long time to get unemployment to 6.5%—probably 18 months or more. (more)

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3 Best Retail Stocks to Buy Now: GPS, LAD, KORS

If you’re currently looking for stocks to buy, now’s a great time to take a close look at retailers.

You see, a combination of factors — an improving job market, steaming summer temperatures and lower prices — have helped retailers post sizeable sales gains recently.

And that has given their stocks a significant boost.

The Spider S&P Retail ETF (NYSEArca: XRT) proves that American shoppers have bounced back from the economic malaise.

They’re opening up their wallets for new clothes, movies and electronics at XRT components like Macys, Inc. (NYSE: M), Netflix Inc. (Nasdaq: NFLX) and Best Buy Co., Inc. (NYSE: BBY). (more)

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GE’s Chart Says It Should Continue Making New Highs: GE

General Electric (GE) — Following Friday’s earnings announcement, the stock broke past a multi-month resistance area to a new year-to-date high.
On the multi-year chart, two things stand out.

First, while not quite there yet, the stock is slowly but surely moving toward a major resistance area closer to the $27 mark, which is where the downtrend line off the 2000 top comes into play. Given how long this downtrend has been in the making, we must give the resistance area some breathing room. Thus, I am circling $26.90 to $28 as the next major resistance area, which would also coincide with the 61.8% Fibonacci retracement level from the October 2007 highs down to the early 2009 lows.  (more)

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Jim Sinclair: Multi Hundred Dollar Up Days Coming in Gold As COMEX Moves to Cash Settlements!

from Silver Doctors:
While Jim Sinclair was admittedly several months early in calling a bottom to the current gold correction, few if any today understand the FUNDAMENTALS for gold today as well as Mr. Gold.
With gold notching its biggest up day in over 13 months Monday, trading up $40 to over $1340, Sinclair has alerted readers that the GOFO holding negative 11 days and counting is screaming the truth that that there is no meaningful above ground supply of gold.
As a consequence, Sinclair states that the COMEX will be forced to move to cash settlement for gold contracts within the next 90 days, and that the chaos resulting from the COMEX changing their spot contract settlement could result in multi hundred dollar days to the upside for gold!
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Netflix Owns Nothing, Is Poised for Short-Term Drop: Pachter

Given the fact that Netflix (NFLX) shares have gained 180% this year and is the hottest stock in the S&P 500 (^GSPC), it would not seem out of line to suggest that they were also a bit expensive. Okay, really expensive, with a forward price-to-earnings ration of 150!

But even if this red-hot stock was suddenly cut in half, there's one bear on the street who would still see downside in a company he says has no control over its content costs.

"They own nothing and they've acquired nothing," says analyst Michael Pachter of Wedbush Securities who raised his price target on Netflix to $80 from $65 today but kept his "sell" rating.

Contrary to common belief, Pachter says Netflix's highly acclaimed original content and top-rated shows are merely licensed on an exclusive window. "They have the rights to show the stuff for two years and that's it. They don't own Arrested Development. They don't own House of Cards. They don't own Orange is the New Black."

And here's the catch, Pachter says, and the reason why Netflix's future looks so rocky to him: "Unlike HBO, which owns The Sopranos, when Netflix decides they want to show these shows again in three or four years, Netflix has to pay again, HBO doesn't."

To be fair, even Pachter has to concede that the streaming media outfit is continuing to add subscribers and deliver profits, it's just that he doesn't think their profit growth is dramatic enough to justify its rich multiple and $250 share price.

As he sees it, to truly thrive, Netflix would need to raise its monthly subscription fee to $12 or $15 a month from $8 currently, but warns that such a move - while hugely beneficial to the bottom line - would cost the company as much as one-third of its 29 million customers.

"80% of the subscribers we surveyed said (Netflix) was priced correctly or too high already," Pachter says, adding that about the same percentage said "they wouldn't stick around for any price increase, not even a dollar."

For the record, Factset data shows Pachter is one of nine analysts who currently rate Netflix a sell, while the remaining 75% analysts rate it either hold or buy and have a median price target of $213.
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Tuesday, July 23, 2013

Ask the Expert – Marc Faber – Sprott Money News

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This Indicator Combo Points to the Biggest Winners

There are many ways to find winning trades. Investors have long looked at value and growth methodologies as two distinct investment approaches.

Other investors have combined those two schools of thought into a single approach by using the PEG ratio to compare the price-to-earnings (P/E) ratio to the earnings growth rate. An additional refinement to this approach is to add relative strength (RS) in an effort to find undervalued stocks that are ready to move higher in the short term.

A less widely followed approach to investing is to focus on volatility. A stock's volatility is now being recognized as an attribute that can be used just like the P/E ratio to find potential winners.

Research has shown that low-volatility stocks tend to outperform high-volatility stocks when returns are adjusted for risk.  (more)

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Wyndham Worldwide Corporation (NYSE: WYN)

Wyndham Worldwide Corporation, together with its subsidiaries, provides various hospitality services and products to individual consumers and business customers in the United States and internationally. The company operates in three segments: Lodging, Vacation Exchange and Rentals, and Vacation Ownership. The Lodging segment franchises hotels in the upper upscale, upscale, upper midscale, midscale, economy, and extended stay markets, as well as provides hotel management services for full-service and select limited-service hotels. The Vacation Exchange and Rentals segment offers vacation exchange products and services to resort developers and owners of intervals of vacation ownership interests (VOIs); and markets vacation rental properties primarily on behalf of independent owners, timeshare developers, and other hospitality providers. The Vacation Ownership segment develops, markets, and sells VOIs to individual consumers; provides consumer financing in connection with the sale of VOIs and property management services at resorts; and offers day-to-day-management services, including oversight of housekeeping services, maintenance and accounting, and administrative services for property owners associations and clubs.
Please take a look at the 1-year chart of WYN (Wyndham Worldwide Corporation) below with my added notations:
1-year chart of WYN (Wyndham Worldwide Corporation) From March through May WYN seemed to form a topping pattern and the stock eventually broke lower at the end of May. During that period of time, you will notice that the stock commonly reacted to the $60 price. That price has been resistance (red) on a couple of occasions already, and while topping it also acted as support (green). The stock is currently retesting that $60 level as resistance.
The Tale of the Tape: WYN tends to react to $60. A trader could enter a short position at $60 with a stop placed above that level. If the stock were to break back above that resistance a long position would be recommended instead.
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The 4 Best Currencies for 2013

Currency markets in the first half of 2013 have been roiled by central bankers’ delusional efforts to prop up their lackluster economies.

That means the best currencies to invest in for 2013 — or, the remainder of the year — will be in Asia and Canada — countries where the governments have refused to engage in debasing their currencies in a “race to the bottom.”

Fact is, the strength of any currency is strongly related to decisions made by governments and central banks.  (more)

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5 favorites for rising yield: D, EXC, KMP, OKE, SO

We avoid chasing stocks that have run beyond these levels. We boost targets primarily based on dividend growth but also on other factors, such as asset additions, that promise dividend growth in the future.

Another component of our approach is a long-term focus. Our buy-hold-sell decisions are rooted in what underlying operating and financial metrics say about dividend sustainability and growth well into the future.

Here's a look at five solid companies with sustainable and growing dividends.

Dominion Resources (D) is one of the largest producers and transporters of energy in the US, with a portfolio of approximately 27,500 megawatts of generation, 11,000 miles of natural gas transmission, gathering and storage pipeline and 6,300 miles of electric transmission lines. (more)

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Here Is The Reason For Gold’s Massive Surge Above $1,300

from KingWorldNews:
“COT data for week ending 7/16 show Commercials added to their Net Short Position by ‐5,566 contracts. As for the Specs, they added +6,905 contracts, bouncing off the lowest Net Long position since 2005. It’s too early to tell of course, but the data may signal the bottom for Gold is in.
Looking at the Net Commercial position in relation to Open Interest (see below), we get a strong flashing buy signal at these levels. Again, too early to tell, but the data would certainly suggest a significant and extended rally is near.
Eric Pomboy continues @

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Monday, July 22, 2013

Top 10 Dividend Leaders of 2013

Dividend stocks are on track to hit record payout levels this year.
Oracle Corp. (Nasdaq: ORCL), Ford Motor Co. (NYSE: F) and Caterpillar (NYSE: CAT) are among the companies reporting the highest increases in their payouts to shareholders.
But they’re not alone.
Net dividend increases on U.S. common stocks for the second quarter are up $17.6 billion over the same time last year.
Amid the increasing demand for yield, more companies are initiating, resuming or boosting dividend payments.
Here are the top 10 stocks with increases in dividend payments in the first half of 2013. (more)

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from Mining Business:
Johannesburg; The average all-in gold production cost for the world’s 5 leading gold miners in Q1 (Mar) 2013 was about $US1,467oz, compared to the average ytd spot price of $1,287oz and around $1,260oz currently, according to a new report.
The SBG Securities report estimates that at least 60% of the top 30 leading miners, representing some 45% of global gold production, are operating at breakeven levels (c$1,500oz) that are well above the current gold price.
Further, it shows that by FY2018 about 50% of global production will likely require a breakeven gold price of c$2,400oz at a year-on-year unit mining inflation rate of 10%, which is looking a bit mission impossible with the report estimating a gold price averaging about $1,455oz this year and rising to $1,620oz for 2016.
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Steel Dynamics, Inc. (NASDAQ: STLD)

Steel Dynamics, Inc., together with its subsidiaries, produces and sells steel products in the United States and internationally. The company operates in three segments: Steel Operations, Metals Recycling and Ferrous Resources Operations, and Steel Fabrication Operations. The Steel Operations segment provides a range of sheet steel products, including hot rolled, cold rolled, and coated steel products; structural steel beams, pilings, and rails; special bar quality and merchant bar quality rounds and round-cornered squares. The Metals Recycling and Ferrous Resources Operations segment purchases, processes, and resells ferrous products, such as heavy melting steel, busheling, bundled scrap, shredded scrap, steel turnings, and cast iron products; and processes nonferrous products consisting of aluminum, brass, copper, stainless steel, and other nonferrous metals for use in foundry, mill refining, and smelting applications. The Steel Fabrication Operations segment produces steel building components comprising steel joists, trusses, girders, and decking products for the non-residential construction industry.
To review Gannett's stock, please take a look at the 1-year chart of STLD (Steel Dynamics, Inc) below with my added notations:
1-year chart of STLD (Steel Dynamics, Inc) STLD has been trading sideways since the beginning of the year while forming a common pattern known as a rectangle. Rectangle patterns form when a stock gets stuck bouncing between a horizontal support and resistance. A minimum of (2) successful tests of the support and (2) successful tests of the resistance will give you the pattern. STLD's rectangle pattern has formed a $16 resistance (red) and a $14 support (blue). A break above $16 would also be a new 52-week high.
The Tale of the Tape: STLD is trading within a rectangle pattern. The possible long positions on the stock would be either on a pullback to $14, or on a breakout above $16. The ideal short opportunity would be on a break below $14.
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Can Commodities Recover in the Second Half?: RIO, BTU, ACI, ANR, CHK, RRC

Rio Tinto (RIO), a diversified U.K. mining stock in everything from coal to aluminum to diamonds, just raised its full-year copper output guidance.
The move comes thanks to the company recovering from a spectacular landslide that struck a Utah mine and destroyed some $100 million worth of equipment, as production at the site is progressing faster than expected.
But you have to wonder why a materials stock like Rio Tinto would be moving so fast to get back on track if base metal prices remain so soft. (more)

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Plains All American Pipeline, L.P. (NYSE: PAA). is Currently a Bargain

Midstream energy companies or, more specifically, master limited partnerships (MLPs) — which generate their revenue from the transportation and/or storage of energy sources, like crude oil, natural gas and natural gas liquids (NGLs) — are an interesting sub-industry to analyze.

To be clear, this group’s enticing argument to investors goes beyond the high yields with which MLPs are typically associated.

They’re characterized by considerably high barriers to entry for competitors, stemming from a tough regulatory approval process and the demand for large amounts of capital.

As a result, distribution of the market share is skewed. Of the 45 companies operating as midstream MLPs, the top seven collected nearly 75% of the industry’s total revenue.  (more)

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US Weekly Economic Calendar

time (et) report period Actual CONSENSUS
8:30 am Chicago Fed national activity index June   -- -0.43% 3-mo
10 am Existing home sales June   5.28 mln 5.18 mln
9 am FHFA home prices May   -- 7.4% y-o-y
9 am Markit "flash" PMI July   -- 51.9
10 am New home sales June   484,000 476,000
8:30 am Weekly jobless claims 7-20
341,000 334.000
8:30 am Durable goods orders June   2.3% 3.7%
9:55 am Consumer sentiment July   84.0 83.9
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