Saturday, November 30, 2013

Overdose: The Next Financial Crisis

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Martin Armstrong: Expect Cashless Society, Not Hyperinflation

One of the greatest failed predictions over the last few years has been that the Fed’s massive monetary stimulus would result in runaway hyperinflation. Certainly we can debate whether the official consumer price index is artificially lower than what reality would suggest, but it's clear current U.S. inflation is nowhere near levels of hyperinflation and has actually been trending lower over the past two years as deflationary trends persist, in spite of the Fed’s best efforts to the contrary.
So how is it that the Fed can create all this money and not create inflation? Martin Armstrong, who has long criticized calls for hyperinflation or even high inflation in the U.S., said one of the main reasons is because the U.S. dollar is the global reserve currency.
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Hedge Funds are Short Crude Oil

While CFTC Commitment of Traders report tends to be very useful, some of the date in the report can be strange from time to time. One of these strange occurrences is the divergence between positioning in Nymex Crude Oil futures and Nymex Heating Oil futures.
The reason I tend to follow Heating Oil COT, is because Heating Oil correlates very closely to Brent Crude (global barometer of oil prices) and the COT report of hedge fund positioning does a good job of giving contrarian buy and sell signals.
Chart 1: Brent Crude Oil together with Heating Oil COT report

Source: Short Side of Long 
The chart above of Heating Oil COT, shows how reduced net long positions or even outright net short positions tend to be good signals for buy opportunities when it comes to Brent Crude. The current positioning is one of the most extreme in decades (confirming very low Public Opinion sentiment). What does this tell us about the current consolidation triangle setup in Brent Crude prices?
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Crude Down, Refiners Up?

I’ve been noticing this disconnect between oil & gas refining and marketing stocks over the past few weeks but in didn’t seem so “in my face” until tonight. I think it had to do with so few results on my screeners tonight due to my volume requirement that they stood out, but this is just odd how this sector is performing so well with crude being under pressure as of late. I won’t be placing any trades in this sector as these chart patterns don’t fit the ones I trade, but I thought I’d point it out.
learn about the the crack spread…
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Porter Stansberry: The madness of the crowd cannot sustain this rally

 I see two critical phenomena taking place in the market right now... And I hope people will pay attention to them.
 No. 1, the retail investor has returned to the stock market in a huge way. If you look at mutual-fund inflows, they're very powerful. In October, U.S. equity funds had net inflows of $10.5 billion, the highest monthly inflow since January. These inflows are the biggest influx we've seen into stocks since 2007.
 Unfortunately, I believe the retail investor is late to the party. Too much money is going into stocks right now at too high of a price. This is not the time to be buying stocks. You want to be buying stocks when other people are selling them, not when everyone in the world is buying them.
I sincerely thought the market top was being made in early June and in May when the junk bonds peaked and yields fell to less than 5%. I've been early on that call. Nevertheless, I don't think it's going to end well for the retail investor.  (more)

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Dr. Marc Faber; ” World Central Banks Are Going To Bankrupt The World!

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Why Canadian homes are more unaffordable than ever

Low interest rates are a form of economic junk food.

It’s true in the housing market, where low rates have glossed over a striking decline in affordability in the past two decades. A sustainably strong housing market is based on fundamentals like a reasonable match between growth in incomes and home prices, not the economic equivalent of fat and salt.

Most of us have at least a basic idea of how much house prices have gone up in recent years, but there’s been a lack of curiosity about how buyers are keeping up. For some perspective, let’s look at incomes as taken from Statistics Canada data on weekly earnings going back to 1997, and real estate price data supplied by the Canadian Real Estate Association.

Back in 1997, the average house price in Canada of $154,620 was about 4.9 times the average pretax annual income ($31,484) of an individual with a full-time job. For the year through July 31, the average price of $379,725 puts houses at about 7.8 times income. ($48,497, all figures in current dollars).

A reasonable long-term assumption is that houses will rise in price by the inflation rate every year on average, and that wages will more or less keep up with inflation. That would give us a kind of affordability equilibrium in the housing market.

But house prices have surged ahead of income. In the past 17 years, incomes have risen by an average annual rate of 2.6 per cent, while house prices have gone up 5.4 per cent. Put another way, house prices have more than doubled over that period, while incomes are up by just a bit more than half.

The surge in housing prices is the great gift of the global financial crisis five years ago. The crisis drove interest rates down to historic lows, thereby allowing buyers to shrug off a growing disparity between their incomes and the cost of buying a house. The availability of 30-, 35- and even 40-year mortgages a few years back also helped obscure the income-house price gap.

But rates have been the big stimulus for the housing market. The prime lending rate at banks and credit unions – it’s used to price variable-rate mortgages – fell as low as 2.25 per cent from 6.25 per cent in mid-2007 before edging back up to the current level of 3 per cent. The average posted rate for five-year fixed-rate mortgages fell to 5.14 per cent at mid-year from 7.24 per cent in 2007.

You can chop roughly 1.5 percentage points off those five-year fixed rates to get the discounted costs that borrowers typically pay. On a $400,000 mortgage, the decline in these discounted rates over the past five years would have saved a buyer about $470 per month.

That’s what kept houses affordable while prices left income growth behind. Can we keep living this way? A lot depends on interest rates. The Organization For Economic Co-operation and Development said last week that Canada may need to start pushing up rates next year, and that our central bank’s benchmark rate may need to more than double by the end of 2015.

But that almost certainly won’t happen. BMO Nesbitt Burns has interpreted the Bank of Canada’s latest words on rates to suggest that the status quo will rule for at least another year. So we’re good on housing, right?

Low rates were needed to stabilize the economy back in the financial crisis, and they may still be required. But let’s recognize that they’re having an unhealthy effect on housing by getting people into homes that are going to be tough to manage financially.

At some point in the next couple of years, the economy is going to surprise us on the positive side. Anyone who buys a house now or bought in the past two years or less has virtually no chance of avoiding a sizable rate increase at renewal, and that means a higher cost of living.

A more enduring foundation for affordable housing is a match between incomes and house prices. It’s sometimes said that a house should ideally cost three times your annual salary. That’s laughably out of date, so let’s say three times your household income.
With two average wage earners in a household, the ratio of price to income falls to 3.9 from 7.8. If that seems okay to you, consider that house prices in October rose 8 per cent over the same month a year earlier on a national basis. Anyone get an 8 per cent raise lately?

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Friday, November 29, 2013

Martin Armstrong Predicts Dow Jones Industrial Average At 32,000 By 2015

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Govt Cooking Inflation Numbers, Alasdair MacLeod

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PulteGroup, Inc. (NYSE: PHM)

PulteGroup, Inc., through its subsidiaries, engages in homebuilding and financial services businesses primarily in the United States. The company's Homebuilding segment is involved in the acquisition and development of land primarily for residential purposes within the United States; and the construction of housing on such lands. This segment offers various home designs, including single-family detached, townhouses, condominiums, and duplexes under the Pulte Homes, Del Webb, and Centex names. As of December 31, 2012, this segment had approximately 670 active communities. Its Financial Services segment engages in mortgage banking and title operations. This segment arranges financing through the origination of mortgage loans primarily for homebuyers; sells such loans and related servicing rights; and provides title insurance policies as an agent, as well as examination and closing services to homebuyers.
To review Pulte's stock, please take a look at the 1-year chart of PHM (PulteGroup, Inc.) below with my added notations:
1-year chart of PHM (PulteGroup, Inc.) The $18 level has clearly been important to PHM, not only as support from February through July, but also as recent resistance (red). In addition, the stock has formed a trendline of support (green) starting back in August. These two levels combined had PHM stuck within a common chart pattern known as an ascending triangle. At some point, the stock had to break through one of those two levels, and as you can see, it was the $18 resistance that finally broke.

The Tale of the Tape: PHM broke the resistance of its ascending triangle. A long trade could be made on a pullback to $18. A break back below the $18 level would set up a possible short trade and negate the forecast for a move higher.
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The HUI Has Penetrated Its June Lows, Gold and Silver To Follow / By Bob Kirtley / November 28, 2013
The June low for the gold mining sector was believed to the bottom for gold miners and as such presented a buying opportunity for the precious metals community. At the time we greeted this event with some trepidation and described the capitulation as a capitulation of sorts, but not a final one.
In any bull market we have to climb the wall of worry and gold and silver did exactly that in the first phase of this bull market as many objectors denounced its progress. This wall of worry will always be with us as gold clings on in the hope that there is a U-turn coming and the bull returns with a vengeance.

The Gold Bugs Index (HUI)

The June bottom in the mining stocks produced a rally that took this index from 210 to 280 for a gain of 33%. Since then the froth has dissipated and the HUI has dropped back to close at 204 today. It could be that the miners have returned to retest these lows and the bulls may lend a hand here by making more acquisitions, thus providing some support. On the other hand if the miners lose support and the HUI continues to plunge, then the June bottom will join the ranks of the many false dawns that we have experienced since the heady days of a couple of years ago when the HUI traded at around 625. Since then the HUI has lost almost 70% of its value, a gut wrenching disappointment for gold bugs if ever there was one.
The fortunes of the gold and silver producers are largely predicated on the price of both gold and silver and so it goes that we must focus intently on their progress or lack of it, as the case may be. Although it has to be said that there are other factors that could adversely affect mining companies, such as a major stock market correction which would in turn weigh heavily on mining companies as they could be grouped with stocks in general and sold down accordingly.
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We Haven’t Seen Shocking Numbers Like This In Years

from King World News
There is reason to be concerned even with global stock markets on a tear recently. There is a stunning chart and table featured below which all KWN readers around the world need to see.
If you look at the chart and table below it reveals there are some serious warning signals even as many major indexes have been hitting new highs.
Here is the latest Investors Intelligence report along with the all-important sentiment chart and table: “The indexes rebounded late last week and the modest Friday advance turned them positive over the five sessions. After early Monday gains, all three main averages had penetrated even number levels. Broad stock action is not confirming those highs and the negative indicator divergences held. There was more bullishness amongst the advisors, with shifts in that direction outnumbering other changes reflecting new skepticism. The new high in optimism signals a near fully invested outlook that often occurs with market tops. It doesn’t mean an immediate sell-off but the strong likelihood of lower market levels in two-to-three months’ time. Quotes are from the shifting outlooks including one lengthy capitulation.
Continue Reading at…
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Thursday, November 28, 2013

Facebook Inc (NASDAQ: FB)

Facebook, Inc. operates as a social networking company worldwide. It builds various tools that enable users to connect, share, discover, and communicate with each other on mobile devices and computers. The company's Facebook Platform is a set of development tools and application programming interfaces that enables developers to integrate with Facebook for creating social apps and Websites. As of December 31, 2012, it had 1.06 billion monthly active users and 618 million daily active users. The company has a strategic partnership with Trend Micro Inc. for educating and protecting users' digital lives against malicious sites and malware. Facebook, Inc. was incorporated in 2004 and is headquartered in Menlo Park, California.
FB could be forming a head and shoulders (H&S) pattern. Please take a look at the 1-year chart of FB (Facebook, Inc.) below with my added notations:
1-year chart of FB (Facebook, Inc.) FB has performed quite well over the last 5 months while creating a key level at $45 (blue). That $45 level, which has been recent support, is also the possible “neckline” for FB's potentially still forming H&S pattern. Above the neckline you will notice the H&S pattern itself (pink).
Remember, patterns such as an H&S need to confirm to have the meaning that they imply. Confirmation of the H&S would occur if the stock were to roll over and break below its $45 support. If FB does break that level, the stock should move lower from there.

The Tale of the Tape: FB could be forming a head & shoulders pattern. Although a trader could go long at $45 expecting a bounce, the stock's pattern would imply an eventual breakdown. If that happens, a short trade should be entered on a break of that $45 level.
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Margin Debt Soars To New Record; Investor Net Worth Hits Record Low

The correlation between stock prices and margin debt continues to rise (to new records of exuberant "Fed's got our backs" hope) as NYSE member margin balances surge to new record highs. Relative to the NYSE Composite, this is the most "leveraged' investors have been since the absolute peak in Feb 2000. What is more worrisome, or perhaps not, is the ongoing collapse in investor net worth - defined as total free credit in margin accounts less total margin debt - which has hit what appears to be all-time lows (i.e. there's less left than ever before) which as we noted previously raised a "red flag" with Deutsche Bank. Relative to the 'economy' margin debt has only been higher at the very peak in 2000 and 2007 and was never sustained at this level for more than 2 months. Sounds like a perfect time to BTFATH...(more)

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Porter Stansberry: The U.S. stock market could now fall by half

Our government's current debt-fueled policies are unsustainable and creating a huge crisis.

The simple fact is, if our government were required to pay a fair market rate of interest on its debt… the interest payments alone would swallow up all of our tax revenue (and then some).

Sooner or later, that fact will overwhelm the smoke and mirrors and the chicanery of quantitative easing. Sooner or later, that fact will overwhelm the passions of the world's banks that keep 60% of their reserves in U.S. dollars. Sooner or later, that fact will overwhelm the popularity of the U.S. dollar as the basis of international trade.

And make no mistake… China has had good reason to negotiate bilateral trade and currency agreements over the last 18 months with every single major trading counterparty in the world.

At some point, the Chinese will unveil a complete convertibility of its currency, the yuan. And when that happens, what do you think will happen to the value of the U.S. dollar? What do you think will happen to the actual rate of interest on U.S. Treasury bonds, especially long-dated bonds?

All of those things will change because, as I said yesterday, the markets over time are weighing machines. And I guarantee you the passions of the crowd change over time. So the current pricing for equities in the United States is based on 18 years of earnings.

Facebook is trading at a valuation of around 100 years of earnings. But what is the value of all those future earnings if the value of the dollar crashes? What is the value of all those future earnings, 15 years', 17 years' worth of earnings, if instead of the long bond being 3%, it was 8%?

If you do the math, if you do the dividend discount models, and you compare it with the risk-free rate, you can see for yourself that evaluations of U.S. stocks could easily fall in half.
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7 Remarkable Numbers From Canada’s Housing Market

No doubt real estate has been the saviour of the Canadian economy. Mostly thanks to all of those condo towers and housing developments, the country escaped the worst of the Great Recession.
Since the housing bull market began 20 years ago, the industry has posted some truly incredible figures. Here are the top seven most remarkable numbers from the nation’s real estate market.
1. 150% price increase
According to the Canadian Real Estate Association, the average house in Canada sold for $152,378 in 1998. Today, the mean house price has ballooned to $379,725. This represents a 150% price appreciation over that time frame — one of the best performances in the industry’s history.
2. 7.8x income
As you might expect, real estate prices have handily outpaced incomes. Over the past 15 years, the average full-time salary has increased at a 2.5% annual clip, versus house prices that have grown at a 6.3% annual pace.  (more)

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Dynavax Technologies (Nasdaq: DVAX): This Cheap Drug Stock Has 245% Upside

The first rule of running a biotech company: Don't run low on cash. Once investors smell a cash squeeze coming, they'll hammer shares mercilessly.
That was the painful lesson learned by the executives at Dynavax Technologies (Nasdaq: DVAX). Though DVAX was pursuing the development of a very promising new vaccine, the company was burning through more than $15 million in cash every quarter and was at risk of not making it to the FDA finish line. Shares, which traded around $5 in October 2012, skidded all the way to $1.
The good news is that the company shored up its balance sheet late last month, and shares have finally begun to rebound. And, with a few breaks, DVAX looks poised to rise from a recent $1.45 to $3, $4 or even $5.
Little Company, Big Target Market
DVAX has spent years developing Heplisav, which is a vaccine for hepatitis B, a disease that currently afflicts 240 million people around the world, according to the World Health Organization.  (more)

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Titan International Inc (NYSE: TWI)

Titan International, Inc., together with its subsidiaries, engages in the manufacture and sale of wheels, tires, and undercarriage systems and components for off-highway vehicles used in the agricultural, earthmoving/construction, and consumer markets in the United States and other countries. The company provides rims, wheels, tires, and undercarriage systems and components for various agricultural and forestry equipment, including tractors, combines, skidders, plows, planters, and irrigation equipment; and for various types of off-the-road earthmoving, mining, military, and construction equipment comprising skid steers, aerial lifts, cranes, graders and levelers, scrapers, self-propelled shovel loaders, articulated dump trucks, load transporters, haul trucks, and backhoe loaders. It also offers truck tires; wheels and tires; and assembles brakes, actuators, and components for the boat, recreational, and utility trailer markets, as well as a range of products for all-terrain vehicles, turf, and golf car applications. The company sells its products directly to original equipment manufacturers, independent distributors, equipment dealers, and distribution centers.
Please take a look at the 1-year chart of TWI (Titan International, Inc.) below with my added notations:
1-year chart of TWI (Titan International, Inc.) TWI has had a rough go of it over the last 9 months, to say the least. In a market that insists on going higher, TWI has continued to break lower. From June til mid-September the stock formed a clear support at $16 only to break lower yet again. Since that break, the stock has been resisting that same $16 area and appears to be approaching that level again.

The Tale of the Tape: TWI is approaching $16 again. Traders could enter a short trade at $16, while a long trade could be made on a break back above that level with a stop placed below it.
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Wednesday, November 27, 2013

Jeff Rubin: Triple Digit Oil & Higher Price at the Pump Here To Stay?

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Discover Financial Services (NYSE: DFS)

Discover Financial Services, a bank holding company, provides direct banking and payment services in the United States. It operates in two segments, Direct Banking and Payment Services. The Direct Banking segment offers Discover card-branded credit cards to individuals and small businesses on the Discover Network. This segment also provides other consumer banking products and services, including private student loans, personal loans, home loans, and prepaid cards; and other consumer lending and deposit products, such as certificates of deposit, money market accounts, online savings accounts, and individual retirement account certificates of deposit. The Payment Services segment operates PULSE, an automated teller machine, debit, and electronic funds transfer network; and Diners Club, a global payments network, as well as a network partners business, which includes credit, debit, and prepaid cards issued on the Discover Network by third parties.
To review Discover's stock, please take a look at the 1-year chart of DFS (Discover Financial Services) below with my added notations:
1-year chart of DFS (Discover Financial Services) Over the last 8 months DFS has consistently moved higher. Since June though, the stock has formed an apparent 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. DFS' trendline seems to be important now that it has been tested a 3rd time back in October.

The Tale of the Tape: DFS has created a trendline of support over the last 5 months. A long position could be entered on a pullback to that trendline, which is approaching $50, with a stop placed below that level. A short position could be entered if DFS were to break the trend line support.
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Hitch a Ride on a Platinum Supply Crunch

Can you name a commodity that’s currently in a supply deficit? In other words, production and scrap material can’t keep up with demand?

How about two? If you find that difficult to answer, it’s because there aren’t very many.

When you do find one, you might be on to a good investment — after all, if demand persists for that commodity, there’s only one way for the price to go.

At the end of 2012, the platinum market was in a supply deficit of 375,000 ounces. Much of it was chalked up to the sharp decline in output from South Africa, where about 750,000 ounces didn’t make it out of the ground due to legal and illegal strikes, safety stoppages, and mine closures(more)

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Natural Gas Keeps Testing Key Resistance

One of my favorite things about technical analysis has to be the whole principle of polarity. This study of supply and demand is the beginning of all of my analysis. When prices keep bumping up against a specific price, we know that with each test, there are less and less sellers. Eventually, when sellers dry up (after enough tests), the buyers take over control at that level and prices shoot up. The same thing can be said about support. The more times support is tested, we know there are less and less buyers down there. This is simply due to the fact that at some point, anyone willing to buy at that level has already made their purchase. So when the buyers dry up (after enough tests), sellers take control and prices fall hard.
Today, let’s focus on the key resistance in Natural Gas. Again, the more times a level is tested, the higher the likelihood that it breaks. Why? Because with each test, in this case about $3.87, there are technically less and less sellers willing to sell at that level? Why? Because more and more sellers willing to sell up here have already sold.
Here is a daily chart of Natural Gas showing this to be the 4th attempt to get above this key resistance level since July:
11-26-13 ng
Something else that I think is worth pointing out is the significance of this level. The sellers have consistently been defending the 50% retracement of the April to August decline. Regardless of whether you’re using absolute highs and lows (red), or closing prices (blue), the range of this resistance is about the same. To me this is a monster level.
The bad news for the natural gas bulls is that prices have shot up hard as we currently approach this price. This makes it much more difficult to break through, and quite frankly a breakout would be less reliable. The good news however, is that this is test #4. But more importantly we have a nice little shakeout, or false breakdown, early in November that could be that catalyst to take prices through this resistance.
If and when these levels are taken out, the polarity mentioned above starts coming into play. If we get through, we know the sellers have dried up and the buyers are now in control. Therefore, any future retests of this level should be met with buyers.
Either way, I think this action in Natural Gas is extremely constructive. And for now, I’d rather err on the long side. I don’t have a position yet, and as of right now I’m not sure where the entry point is. But this is something definitely worth watching. Perhaps a retest of the 200 day moving average could be the first entry? Maybe a few closes in the 3.90′s could be confirmation. Or possibly the breakout and retest of support. I’m staying very open-minded with this one and really just taking it one day at a time…
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The Bull Market Doesn't Care That You Think it "Should" Correct

Unless Santa Claus comes to town in an atypically bearish mood, 2013 is going to end the way it began: with a bunch professional money managers calling for a 10% correction. As early as last January mainstream media started complaining about the overdue nature of a market pullback.

Even as overall market complacency has moved higher the hand-wringing among professional investors grows.  Goldman Sach’s (GS) David Kostin nicely captured the prevailing mood last week when he made a bullish call for 2014 but only with a the caveat of a very specific-sounding 67% chance the S&P 500 (^GSPC) will sell off 10% or more in 2014.

In the attached clip Mark Luschini of Janney all but defies those who would offer a divergent view given the facts at hand.  “We’ve gone more than two years without so much as a 10% correction which is a fairly rare phenomenon,” Luschini argues. Stocks are up 30% year-to-date with barely a hiccup along the way.

The market moving higher isn’t a sell thesis. If it were stocks would have at least corrected at some point in the last two and a half years.  Those who have been stubbornly waiting for a pullback have missed a 165% rally from the March 2009 lows. It’s a high price to pay for being patient. 

It’s been about 550 trading days since August of 2011 when stocks finished their last pullback. That’s an usually long stretch by historical measures less than half as long as bull runs from 1990 - 1997 and 2003 - 2007.

Of course the 2007 run ended in catastrophe, but 1997 was a fairly run of the mill crisis in the run-up to the great NASDAQ bubble top of 5,048 made on March 10th 2000. For whatever it may be worth that once unassailable peak is about 25% higher from current levels. (more)
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Peter Schiff - Another Bubble Set to Burst

Peter Schiff is saying that the U.S. Government is giving out misleading information about the economy to paint a rosy picture. According the government, the economy is doing well, yet the third quarter GDP grew only 1.7%, which after the government revises the numbers, as they always do, the growth will be closer to zero.

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Tuesday, November 26, 2013

Why the Nasdaq Is Nowhere Near a Bubble

At the risk of sounding cliché, bubble worries are bubbling up all over the place these days.
Not only has a string of record-high closes fueled the talk, but meteoric moves by a handful of hot stocks have drawn many observers to conclude that the end is near for a bull market that will turn five years old this March.
old bull
Wall Street veteran Jeff Saut disagrees. The chief investment strategist at Raymond James Financial has seen his share of bubbles over a long illustrious career and says, contrary to all the hype, the label just doesn't fit this time, especially for the Nasdaq (^IXIC) which today blasted through 4,000 for the first time in 13 years.
“I don’t think you’re in a bubble,” Saut says in the attached video. “The equity markets care only if things are getting better or getting worse” he adds, “and I think things, especially in technology, are getting better.”  (more)

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The January Effect Gets Going Soon

We haven’t even had Thanksgiving yet and we’re already talking about the January Effect? Are you kidding me? I know, I get annoyed when I see Christmas decorations in November too. But there’s a reason that I’m bringing this up today. As time has gone on, the so-called “January Effect” has begun sooner and sooner. And the statistics have such a high batting average that we simply can’t ignore it.

First of all, let’s define what the January Effect is: This is the tendency for Small-Cap stocks to outperform Large-Caps in the month of January. There are plenty of theories out there as to why this is the case, but the one that makes the most sense to me is simply risk and position sizing. You see, if it’s your job to allocate billions of dollars, you are more likely to buy smaller-cap companies, that are theoretically more risky stocks, early in the year because if you’re wrong, you have the rest of the year to make up for it. As far as position sizing goes, the massive portfolio managers can start buying smaller, less liquid companies early, giving themselves plenty of time to accumulate shares. But either way, the reason is irrelevant, we’ll just go with the math.

According to the Stock Trader’s Almanac, from 1953 to 1995 small-caps outperformed large-caps in January 40 out of 43 years. But after the crash of 1987, this out-performance from the small-caps started to get going in mid-December. Perhaps it was no longer a secret? Who knows. But now this market is taking it step further. Last year in 2012, the small-cap out-performance began in mid-November. The ratio bottomed out on November 15th and rallied all the way into mid-March. So with all that in mind, is it so ridiculous to start talking about it this early?

Here is a chart I posted a year ago showing the seasonal trends of small-caps vs large caps. It shows the Russell2000 divided by the Russell1000 based on daily data from July 1, 1979 through November 30, 2012:
11-25-13 r2 vs r1
Just something to keep in mind while we plan what we’re going to do heading into the end of the year.
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A Great Chance to Double Your Money in 24 Months

It's a "near certainty" that you'll make 100% gains with the idea we'll show you today...
Over the last few months, we've shared several "bad to less bad" trading ideas that have jumped double-digits in just a month or two...
Remember, "bad to less bad" situations are an incredible source of low-risk profits...
"Bad to less bad" is a phrase coined by True Wealth editor Steve Sjuggerud. It involves buying assets that have suffered through horrible times...
In this kind of "bad" condition, you can often buy an asset for well below "normal" levels. If you step in and buy amid the pessimism, you can double your money if a bit of optimism returns to the market.
That's the situation right now in uranium...
Uranium fuels nuclear power stations... And like most commodities, it enjoys huge "boom and bust" cycles.
From 2003 to 2007, uranium saw a huge boom. It ran from $10 per pound to $130 per pound. And the share prices of uranium producers skyrocketed. Canada-based producer Cameco, for example, returned more than 1,200%.
But in March 2011, the disaster at Japan's Fukushima power plant helped turn the boom to bust. Japan was one of the world's biggest consumers of nuclear power, and it shut down more than half of its reactors. Several other countries also scaled back their nuclear programs.
While global sentiment has since improved, the damage was done. Uranium prices now sit at about $36 per pound... their lowest levels in more than seven years.
Right now, uranium producers need to sell their product for about $75 a pound to break even... That's more than twice the spot-market price. In other words, most producers are losing money on every pound of uranium they sell. Eventually, some of them will be forced to shut down.
In short, it's "bad" for uranium right now. Take it from Rick Rule...
Rick is the founder of Sprott Global Companies and chairman of Sprott U.S. Holdings. He has spent decades in the resource markets, making himself and his clients many millions of dollars in the process. He has also financed several of the most important resource companies in the world.
He's a brilliant trader, a genius investor, and a walking encyclopedia of business knowledge.
Here's what Rick told our colleague Frank Curzio in a recent episode of Frank's excellent S&A Investor Radio podcast:
The industry is in fact in liquidation. It sounds like it couldn't possibly get any worse, so sentiment with regards to uranium is really, really bad.
It might be hard to stomach the thought of buying uranium here. But as we've noted in these pages before, when things can't get any worse, they can only get better.
And Rick believes a double in uranium prices is a "near certainty."
Uranium Participation Corp. tracks the spot price of uranium (like GLD does for gold). In the chart below, you can see the big 2011-2012 bust. But you can also see that it has "ground out" a bottom at around C$4.80. Over the last year, it has refused to fall below that level.
You can also see that in the last three weeks, it has gained 12%. On Friday, it hit a new four-month high.
There's no guarantee this is the start of uranium's recovery. But the upside potential is enormous. And it's inevitable. It might take a year... or two... or three to play out. But uranium prices will head higher.
Keep in mind, it doesn't take great news to double the price of a cheap, hated asset... things just need to go from "bad to less bad." And it looks like that's starting to happen in uranium.
– Amber Lee Mason and Brian Hunt

P.S. The "bad to less bad" strategy is so lucrative, we produced a brief (three-minute) video about it. It goes into more detail about how to use the strategy... And it walks you through a few more examples. Watch it here.
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WellPoint, Inc. (NYSE: WLP)

WellPoint, Inc., a health benefits company, through its subsidiaries, offers network-based managed care plans to large and small employer, individual, Medicaid, and senior markets in the United States. The company operates through three segments: Commercial, Consumer, and Other. Its managed care plans include preferred provider organizations, health maintenance organizations, point-of-service plans, traditional indemnity plans, and other hybrid plans, including consumer-driven health plans, and hospital only and limited benefit products. The company also provides various managed care services comprising claims processing, underwriting, stop loss insurance, actuarial services, provider network access, medical cost management, disease management, wellness programs, and other administrative services to self-funded customers. In addition, it offers specialty and other insurance products and services, including behavioral health benefit services; dental, vision, life, and disability insurance benefits; radiology benefit management; analytics-driven personal health care guidance; and long-term care insurance.
To review WellPoint's stock, please take a look at the 1-year chart of WLP (WellPoint, Inc.) below with my added notations:
1-year chart of WLP (WellPoint, Inc.) WLP has formed a solid resistance at $90 (navy), which would also be a 52-week high breakout if the stock could manage to break above it. In addition, the stock has been climbing a trendline of support (blue). These two levels combined have WLP sandwiched within a common chart pattern known as an ascending triangle. At some point, the stock will eventually have to break one of those two levels.

The Tale of the Tape: WLP has an up trending support and a 52-week resistance level to watch. A long trade could be made on a breakout above the $90 resistance or on a pullback to the support, which is approaching $85. A break below the up trending support could be an opportunity to enter a short trade.
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PNC Financial Services Group (NYSE: PNC): Lagging Bank Stock Just Triggered a 'Buy' Signal

One of my favorite strategies is to find a strong group and look for lagging stocks within it that are just starting to play catch-up. It is a variation on the "strongest stocks in the strongest groups" mantra espoused by Wall Street strategists, but I think my modification offers a little more bang for your buck.

Currently, the banks, and especially regional banks, are breaking out to the upside.

Leaders in the group, such as U.S. Bancorp (NYSE: USB), have already made some nice gains this month, and even more since their respective October lows. One of my favorites right now is PNC Financial Services Group (NYSE: PNC), which is based in Pittsburgh.
To be sure, the rising tide of a strong sector does not float all boats, especially those with holes in their hulls. Some stocks are down for reasons besides simply being off investors' radar. Therefore, just because a stock is low in price relative to its recent past does not necessarily mean it will rally to catch up with its sector. Indeed, weak stocks tend to stay that way.  (more)

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Home Construction: Soon Again - Not a Good Investment!

Click to view Forecasting Industry Groups and their ETFs is very similar to any Sector or ETF. It requires much more time and grinding analytics than for a single Company but it is also a very profitable task. Without my Forecasting Methodology, making timely and "Wise" investment decisions my work / analytics just leaves those (would-be profitable) Companies and ETFs on a long list somewhere and not in your portfolio where they should be.

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Is this a secret indicator for bonds?

With last week’s spike in bond yields, investors are left somewhat dumbfounded. On the one hand, higher interest rates are supposed to be bad for stocks. On the other hand, stocks had their highest-ever close. However, the stocks where US interest rates matter most aren't in the most obvious places.

Rates went up last week after the Federal Reserve's Open Market Committee's October meeting notes were released hinting that maybe – just maybe – they would consider tapering it $85 billion monthly bond-buying operations at some point in the near future. The markets are now anticipating higher rates down the road.

"Longer-term, they're going over 3% for 2014," predicts John Stephenson, portfolio manager at First Asset Investment Management. "In the short run, they're coming down."

While many in the market look at interest rate levels to determine what's next for the S&P 500 index, Steven Pytlar, Chief Equity Strategist at Prime Executions, says there's a bit more nuance to it.

"We have seen as it relates to the S&P and 10-Year yields, it’s the rate of change that matters, and not necessarily the trend in yields," says Pytlar.

"Since October, we've seen a steady rise in yields and the S&P has moved higher along with it," says Pytlar. "So, higher yields aren't necessarily a reason to jump out of the market. Where higher yields are a major headwind and are very closely correlated to lower prices is in emerging markets."

“There is a much closer [negative] correlation between US yields and the emerging markets than there really is between US yields and the S&P 500,” says Pytlar.

So, now the big question: Since emerging markets stocks and US interest rates have a very negative relationship these days, can emerging markets stocks be used as a secret indicator for where bonds are going next?  (more)
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Monday, November 25, 2013

Forget Smith & Wesson, Buy This Instead: Sturm, Ruger & Company (NYSE: RGR)

As a longtime tech analyst and investor, I’ve learned that tracking unstoppable trends is a great way to make money.
For instance, the mobile wave is moving so fast it’s turning small-cap companies into financial juggernauts, seemingly overnight.
The same thing is happening with cloud computing. Simply put, there’s a stampede of firms that want to host their data and applications on the web — and are willing to pay top dollar for those services.
But, strictly speaking, not every big-gain opportunity is a true high-tech trend.  (more)

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Profit From The Shale Boom With 2 REITs Yielding Up To 7.6%: IRET, UMH

One of the boldest energy predictions of the past 10 years is about to become reality.

According to the International Energy Agency, the U.S. will eclipse Russia and Saudi Arabia and become the world's top oil producer by 2015. And looking forward, that trend is going to accelerate, with the agency saying that booming production has the U.S. on track for energy independence in 20 years.

But while that bullish trend will give energy companies a big boost, it's also going to have a huge effect on local and regional economies. High-production states such as North Dakota, South Dakota and Nebraska already enjoy the lowest levels of unemployment in the country. And as energy companies continue to add tens of thousands of new employees, those strong local and regional economies will fuel record demand for temporary housing, permanent housing and commercial real estate.

That's why I'm bullish on a little-known group of real estate investment trusts (REITs) that are exclusively focused on strong regional economies in position to profit from the North American shale boom. (more)

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Can You Name North America's Greatest Dividend-Payer?: RPM International (RPM)

Income investors take note: A company you've likely never heard of just joined the dividend-paying elite.
RPM International (RPM) is a $5 billion specialty chemical manufacturer. It just raised its annual dividend for the 40th year in a row. Only about 50 publicly traded companies in the U.S. can say the same. And most of those are slow-growing blue chips.
But RPM is different... It's growing faster. And it pays a higher yield.
If you're looking for safe, high-yielding stocks, RPM and its peers offer some of the best opportunities...
You can see what I mean in the chart below...
I mentioned RPM back in April. I said, "If you are looking for safe, high-yielding stocks, you should turn to small-caps like RPM."
Since my call, shares are up 35%.
With interest rates so low, there's huge demand for safe, steady dividend-paying stocks – stocks that can compound your wealth over the long term...(more)
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3 Market Bubbles That Could Be Ready to Burst

Predicting the next stock market bubble is a completely inexact science. No one knows when a bubble will pop -- but what we do know is there's practically a 100% chance that some sort of crash will occur at some point, because history points us to this fact, just as there's a nearly 100% chance that stocks will come roaring back following that crash.

Today, rather than pinpoint a specific time of when a bubble might occur, I'm going to pull out my proverbial crystal ball and project what I believe could be the next three bubbles to burst. Again, these are pure speculation on my part and not a doomsday call, so keep that in mind.

As someone who has argued against using real estate as a primary investment opportunity, I see no potentially greater threat out there than China's real estate bubble.

Since 1998, China's real estate values have risen by more than 200%, with only a single year registering a decline (2008). October alone demonstrated year-over-year home price appreciation of 10.5%! The allure of housing in the rapidly growing emerging-market country is that it has provided, at least over the past five years, a considerably better return than the stock market, which has returned only a 6% gain over the same period.  (more)

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Silver, Gold & Miners ETF Trading Strategy – Part II

Precious Metals ETF Trading: It’s been a week since my last gold & silver report which I took a lot of heat because of my bearish outlook. Friday’s closing price has this sector trading precariously close to a major sell off if it’s not already started.
On a percentage bases I feel precious metals mining stocks as whole will be selling at a sharp discount in another week or three. ETF funds like the GDX, GDXJ and SIL have the most downside potential. The amount of emails I received from followers of those who have been buying more precious metals and gold stocks as price continues to fall was mind blowing.
If precious metals continue to fall on Monday and Tuesday of this week selling volume should spike as protective stops will be getting run and the individuals who are underwater with a large percentage of their portfolio in the precious metals sector could start getting margin calls and cause another washout, spike low similar to what we saw in 2008.

ETF Trading Charts:

Below are updated with Friday’s closing prices showing technical breakdowns across the board..
ETF Trading Strategies ETF Trades ETF Trade

Sweet & Sour ETF Trading Analysis:

Just to make things a little more interesting I would like to point out a couple other types of analysis.
cefSweet:  Through analysis of the CEF Central Fund of Canada Ltd. chart and evaluation it is clear precious metals are falling out of favor at an increased rate. This fund owns physical gold and silver bullion and investors are fleeing the fund so fast that it is now trading at a 7% discount of its asset value. While this may not seem good for metals I see it as a positive.
When everyone is running for one door after an extended moves has already taken place it tends to act as a contrarian indicator. Knowing that some of the largest percent moves in a trend takes place before reversing, I see this information as an early warning that a bottom will soon be put in place.

Sour: While the USD index has not been much help compared to 2012, I feel as though a rising dollar is likely to unfold for a couple weeks which may lend a hand to pulling the precious metals sector down.
ETF Trading Chart

Precious Metals ETF Trading Conclusion:

While I am starting to get bullish for a long term investment in precious metals I know that a bottom has likely not yet been made. But even if it has been, it is better to buy during a basing pattern or breakout to the upside from a basing pattern than to be underwater with a position for an extended period of time along with all the other negatives that come along with it.
I do like the idea of CEF as a long term investment when I feel the time is right. I have invested and traded it many times in the past. The key to trading the fund is to be sure you are buying it at fair value or a discount from the net asset value. You do not want to be buying it when it is trading at a 5-7% premium. The fund owns both gold and silver making it a simple diversified precious metals play.
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US Weekly Economic Calendar

time (et) report period Actual CONSENSUS
10 am Pending home sales Oct.   -- -5.6%
8:30 am Housing starts Oct. DELAYED 919,000 891,000
8:30 am Building permits Oct.   935,000 926,000
9 am Case-Shiller home price index Sept.   -- 12.8% yoy
9 am FHFA home price index Sept.   -- 8.5% yoy
10 am Consumer confidence Nov.   72.4 71.2
8:30 am Weekly jobless claims 11/23
330,000 323,000
8:30 am Durable goods orders Oct.   -2.2% 3.8%
9:45 am Chicago PMI Nov.   61.0 65.9
10 am UMich consumer sentiment index Nov.   73.0 72.0
10 am Leading economic indicators Oct.   -- 0.7%
  Thanksgiving Day
None scheduled
  None scheduled        
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Saturday, November 23, 2013

The Energy Sector's Most Volatile Niche Now Offers Stunning Yields

Dividend investors crave predictability. Once they lock onto payment streams, they don't want to hear about any interruptions. And if a company dares to withhold a quarterly dividend payout, then many investors simply head to the exits.
I discussed this phenomenon recently with regard to Carl Icahn and his big stake in CVR Refining (NYSE: CVRR).
As I noted earlier this month, CVR had a big hiccup with its third-quarter dividend, but it appears positioned to pay out $3 or $4 per unit in dividends next year. Shares trading around $22 don't begin to reflect that potential income.
Amazingly, a virtually identical scenario has just played out with another oil refiner. And the setup is every bit as compelling.  (more)

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Sulfer (Crude) Spreads Going Wild

The Brent v. WTI spread has blasted out again on US production, Iran, etc....
It's hot money that moves this spread around (my opinion).
The fundamental story is wonderful, but the WTI has a lower sulfur content which makes it easier to refine than Brent and generally more valuable, but the market right now disagrees and that's all that matters.
Picking the tick on the futures spread is dangerous business and not for the faint of heart. If you're right and negotiations with Iran make some progress.....WTI should outperform Brent at some point before long.
That's one approach.
Alternatively, I could consider options strategies that look for the spread to narrow over the next 3 months.  (more)

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Seven Reasons The Uranium Price Is Making A Powerful Move Higher

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The Greatest Opportunity in 30 Years

I caught myself daydreaming last week…

It was October 27, 2008, and Silver Wheaton (NYSE: SLW) just hit $3 per share. I buy 10,000 shares — more than I’ve ever devoted to any one stock.” 
I sell half when it hits $33 per share and pocket $150,000 after a 1,000% gain. I pay off the mortgage, and my wife quits work — and I still have 5,000 shares…

Not a bad daydream, eh?

I don’t know how many investors actually had the intestinal fortitude to plunk down a big lump of cash on a stock at that time — but Silver Wheaton did indeed offer that 1,000% return, and more.

When you look back at the investments that have made the most money over the past few decades, they’ve always been assets that had reached an extreme—an extreme low or an extreme high. (more)

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Maguire – Gold War Heats Up As Shocking Events Taking Place

from King World News
On the heels of some wild trading action this week, London metals trader Andrew Maguire spoke with KWN about the shocking events taking place as the gold war heats up, as well as some extraordinary information about what to expect in the gold market going forward. Below is what Maguire had to say in part I of his stunning interview.
Maguire: “We always start by stepping back and looking at the bigger picture. I’m going to actually tell you what we are seeing, not just myself, but what my sizable clients are seeing as well….
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Ask The Expert – Jim Sinclair (November 2013) : Sprott Money News

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The Product that Will Send 3D Printing Into High Gear

by Wayne Mulligan
Daily Reckoning

Once or twice in every generation, a new invention will change the trajectory of entire industries – the assembly line during the industrial revolution, for example, or the Internet in the ’90s.
We, and many others in the technology community, believe that “3D Printing,” or “Personal Manufacturing,” is our generation’s next big thing.
Imagine one day, rather than trekking to the mall or a big-box store to buy a toy for your son or daughter, you simply “print it” from home. The printer would look similar to the one you might already have – but instead of printing ink on paper, it would use an amazing process where successive layers of material, like plastic, are gradually laid down into various shapes.
Continue Reading at…
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A Big Problem That’s About to Shake Up America’s Health Care Industry

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Friday, November 22, 2013

Southwestern Energy Company (NYSE: SWN)

Southwestern Energy Company, an independent energy company, engages in the exploration, development, and production of natural gas and oil primarily in the United States. The company operates through two segments, Exploration and Production, and Midstream Services. The Exploration and Production segment primarily focuses on the Fayetteville Shale, an unconventional reservoir located in the Arkoma Basin in Arkansas; and is involved in the exploration and production activities in the Marcellus Shale play in Pennsylvania, as well as in Texas, Arkansas, and Oklahoma. It also engages in exploration activities in the Lower Smackover Brown Dense formation in Arkansas and Louisiana; the Marmaton and Atoka formations in the Denver-Julesburg Basin in Colorado; the Bakken and Three Forks formations in Montana; and in New Brunswick, Canada, as well as operates drilling rigs in Arkansas, Pennsylvania, and Louisiana. The Midstream Services segment provides natural gas gathering, marketing, and transportation activities in Arkansas, Texas, and Pennsylvania.
To review Southwestern's stock, please take a look at the 1-year chart of SWN (Southwestern Energy Company) below with my added notations:
1-year chart of SWN (Southwestern Energy Company) SWN has been trading sideways for the last 8 months. Over that period of time, the stock has formed a clear resistance level at $40 (red). In addition, the stock has also created a strong level of support at $35 (blue) that has held since the end of April. At some point the stock will have to break one of those two levels.

The Tale of the Tape: SWN has clear levels of support ($35) and resistance ($40). The possible long positions on the stock would be either on a pullback to $35, or on a breakout above $40. The ideal short opportunity would be on a break below $35.
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US Dollar ETF Trade Setup - UUP

We all know quantitative easing devalues the Dollar but contrary to that general statement it looks as though we could see the dollar index continue to rise for a few more weeks.
If we analyze the chart of the Dollar ETF (UUP) it is clear that the short term momentum has turned up. The break above the down trend line and recent bounce off support bodes well for the dollar index.
The bull flag chart pattern that has formed in the past month has a measured move price target of roughly $22.30. The level also happens to be a key pivot point on the chart along with high volume resistance.
I expect the dollar to continue to work its way higher over the next week or two with $22.30 being the line in the sand where sellers will jump on price and drive it back down, or at minimum force price to consolidate for a few days.

US Dollar ETF Trading Strategy - Daily Chart Analysis
ETF Trading Strategy

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Economic Collapse ~ FED Taper Signals A Major Event Going Hot

The Gold Market has been smacked down and halted twice within 24 hours. The FED/central bankers are prepping the markets for a major event to take place. The FED minutes state that they are back the tapering track which might possibly happen in December 2013, or January 2014. This talk of taper is in preparation for the next false flag event. All the pieces to the puzzle are being put into place to stage the next horrific event.
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Bankruptcy Looms For This BRIC Nation -- Here's What To Avoid: ILF, PBR, VALE

In early 1997, the world was in awe of the record growth of Southeast Asia's "tiger economies" as markets opened and foreign investors rushed to fund new ventures.

However, by January 1998, stock markets across the region had lost as much as 70% of their value, and the crisis had spread to the rest of the emerging world. Even behemoth Russia wasn't immune, defaulting on its debt that same year.

Such massive and rapid growth relied on a constant influx of dollars to fund deficits and pay higher amounts of foreign debt. At the first sign of economic cracks, foreign investors withdrew their accounts, leading to a plunge in currencies and leaving the region's governments unable to pay debt denominated in now more expensive dollars. (more)

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Dynavax Technologies (NASDAQ: DVAX): Could Make Traders 200%-Plus Profits

The first rule of running a biotech company: Don't run low on cash. Once investors smell a cash squeeze coming, they'll hammer shares mercilessly.

That was the painful lesson learned by the executives at Dynavax Technologies (NASDAQ: DVAX). Though DVAX was pursuing the development of a very promising new vaccine, the company was burning through more than $15 million in cash every quarter, and was at risk of not making it to the FDA finish line. Shares, which traded around $5 in October 2012, skidded all the way to $1.

The good news is that the company shored up its balance sheet late last month, and shares have finally begun to rebound. And, with a few breaks, DVAX looks poised to rise from a recent $1.45 to $3, $4 or even $5.

Little Company, Big Target Market
DVAX has spent years developing Heplisav, which is a vaccine for hepatitis B, a disease that currently afflicts 240 million people around the world, according to the World Health Organization.  (more)

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Thursday, November 21, 2013

3 Ways to Profit From Platinum’s Surge

Industrial firms, Wall Street hedge funds, and any big money investing in platinum anxiously await Johnson Matthey’s semi-annual review of the platinum industry.

And they got incredibly interesting reading in the group’s most recent report, released Tuesday…

In its Platinum 2013 Interim Review, Johnson Matthey said the platinum market this year is moving toward a supply and demand deficit of 605,000 ounces — the largest deficit since 1999. That’s up from a 340,000-ounce shortfall in 2012.

It said that gross demand for the precious metal could hit a record 8.42 million ounces in 2013, up 4.2% from last year. (more)

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BofAML Warns “It’s Time To Be Bearish On US Treasuries”

It’s time to turn bearish on US Treasuries, is the clarion call from BofAML’s Macneil Curry. The impulsive advance in US 10yr yields from 2.669%/2.630% and Tuesday Bearish Engulfing Candles in many of the futures contracts (WN, US & FV), Curry says, means the larger bear trend has resumed. In 10yr yields Curry targets 2.950%/2.992% (the high end of the 4m 2.47%/3.00% area range trade). Pullbacks should be seen as temporary, corrective and an opportunity to go short. This bearish view, he warns, is invalidated on a 10yr yield move below the 2.659% lows of Nov-18. From a trading perspective they express this view by selling USZ3. Downside targets are seen to 128-22/128-12, with a stop above 133-10.
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REITs are on Sale

The 10-year Treasury yield has jumped 30bps from its late-October trough, and is still below the 3% hit in early-September, yet the S&P REITs index has fallen to fresh three-year lows. Our U.S. equity strategists see such pessimism as unwarranted.
While Fed taper talk is heating up again, it is important to distinguish between tapering and tightening. In the absence of a major inflation threat, the Fed has made it clear that it prefers to err on the side of “too late and too loose” rather than “too early and too tight”.
Indeed, the above chart is compelling – the relative share price ratio has a close correlation with the number of months to the first Fed hike. The latter has climbed anew, underscoring that there is a chance to trade REITs from the long side. Value is attractive and cash flow prospects are improving alongside overall economic growth. Our U.S. equity strategists reiterate their recent upgrade to overweight.
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Honda Motor Revs up Returns: HMC

Sales for Honda Motor (HMC) exceeded $130 billion during the last 12 months. Under the Honda and Acura brands, the firm sells autos, trucks, motorcycles, and all-terrain vehicles.

However, many consumers put off purchasing a new vehicle during the recent worldwide economic slowdown. That situation is about to change.

The age of the average vehicle on US roads recently hit an all-time record: 11.4 years.

There is enormous pent-up demand for new cars and trucks. And we are beginning to see that demand show up in the Honda sales numbers.

In the most recent quarter, sales jumped 16.3%. And they are likely to climb sharply higher in the months ahead. Honda will earn approximately $2.50 a share in 2013. But I estimate net income will climb 40% in the year ahead.

One reason is new model introductions. Another is the weaker yen. A declining currency makes Japanese cars more competitively priced in foreign markets.

And most of Honda's sales, of course, are exports. We got a sign of what is ahead when Toyota reported unexpectedly strong sales and earnings. Plus, Honda yields 5%. And that dividend should rise with earnings in the weeks ahead.

In short, rising demand, a falling yen, and new model introductions should drive this Japanese blue chip sharply higher.

So, pick up Honda shares at market today. And place a protective stop at $32. If you prefer to play this one more aggressively, try the April $45 calls, which last traded at $0.60.
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Casey Research: This could be your greatest opportunity in over 30 years

I caught myself daydreaming last week…

It's October 27, 2008, and Silver Wheaton (SLW) just hit $3 per share. I buy 10,000 shares, more than I've ever devoted to any one stock. I sell half when it hits $33 per share and pocket $150,000 after a 1,000% gain. I pay off the mortgage, and my wife quits work—and I still have 5,000 shares…

Not a bad daydream, eh? I don't know how many investors actually had the intestinal fortitude to plunk down a big lump of cash on a stock at that time—but Silver Wheaton did indeed offer that 1,000% return, and more.

When you look back at the investments that have made the most money over the past few decades, they've always been assets that had reached an extreme—an extreme low or an extreme high.

Buying gold at $250 per ounce in 2001… buying tech stocks in the early '90s or Apple Computer at $8 per share in 2003… shorting real estate in 2007 or the stock market in 2008… the list goes on.

Each of those speculations led to massive returns only because the price of the respective asset was either dramatically undervalued and poised to take off or, in the case of the short sales, a bubble ready to pop.

Paradoxically, such opportunities aren't that hard to find—the truth is, they sprout up all the time. What is hard to find is...

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Sally Beauty Holdings, Inc. (NYSE: SBH)

Sally Beauty Holdings, Inc., through its subsidiaries, engages in the distribution and retail of professional beauty supplies primarily in North America, South America, and Europe. The company operates in two segments, Sally Beauty Supply and Beauty Systems Group. The Sally Beauty Supply segment operates a chain of cash and carry retail stores that provide various professional beauty supplies, including hair color products, hair care products, hair dryers and hair styling appliances, skin and nail care products, and other beauty items to salon professionals and retail customers. This segment sells various third-party brands, such as Clairol, Revlon, and Conair, as well as a selection of exclusive-label merchandise. The Beauty Systems Group segment distributes professional brands of beauty products directly to salons and salon professionals through its sales force, as well as through company-operated and franchised stores. This segment operates stores under the CosmoProf service mark. It sells a range of third-party brands, such as Paul Mitchell, Wella, Sebastian, Goldwell, Joico, and Aquage.
To review Tyson's stock, please take a look at the 1-year chart of SBH (Sally Beauty Holdings, Inc.) below with my added notations:
1-year chart of SBH (Sally Beauty Holdings, Inc.) SBH has formed a key level of support around 25.50 (blue) over the last (3) months. In addition, the stock has created a down trending resistance starting from the middle of August (red). These two occurrences combined have SBH stuck trading within a common chart pattern known as a descending triangle. At some point, the stock has to break support or break its string of lower highs.

The Tale of the Tape: SBH has formed a descending triangle pattern. A short trade could be made on a break of the 25.25-50 support area. A breakthrough 26.50 would break the down trending resistance and would set up a potential long trade.
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Wednesday, November 20, 2013

Dow will Crash below 13,000 : Peter Schiff

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How to Turn a 45% Loss into a 296% Gain in Real Estate

Real estate investors could have saved a chunk of change... if they had followed my "timing trigger."
Over the past couple weeks, I've been walking you through how to time your purchase of income investments. My strategies allow you to collect higher dividend payments and larger capital gains.
You can use them with all sorts of income-paying assets... like big blue chips, utility stocks, MLPs, and corporate bonds.
They also work in real estate...
Real estate investment trusts (or "REITs") allow income investors to collect "rent" without the hassles of owning property...
A REIT is essentially a management company that owns property... It collects rents. And it gets big tax breaks in exchange for agreeing to pass on the vast majority of its annual income to shareholders.  (more)

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