Tuesday, April 9, 2013

European Financials Drop To 7-Month Lows

zerohedge.com / By Tyler Durden / April 8, 2013, 11:46 -0400
European bank stocks are officially in bear market territory, now down over 22% from their highs with today’s drop closing the index at seven month lows. Financial stocks have played catch down to credit’s early warning weakness but still have more room to run. The correlation between financials and sovereigns has been notably broken down in the last few weeks - as it seems an external funding source has saved European sovereign debt (perhaps one that just wants to get away from its vicious cycle-like devaluation and diversify into anything non-JPY-denominated). On the day, Portugal blew wider at the open (+22bps) only to be magnificently bid back to unchanged by the invisible hand. Spain and Italy drifted slightly tighter on the day. Stocks were similarly low range today. Swiss 2Y closed at 3-month lows as EURUSD retraced back from its highs to close practically unchanged from Friday at 1.3000.
Bank stocks are -22% from their highs in Late January. Notice the stability in European sovereign risk (the blue line is a GDP-weighted average of nation spreads)… and its ignorance of the collapse in recent weeks…

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Silver Sentiment Reaches Extreme Levels

We know that Gold sentiment is at bull market lows, and this should help contain any fall ahead for gold.  Looking at Silver this week also finally shows that sentiment has also finally fallen to bull market lows.
We know that when sentiment reaches these levels of extremes (see Green lines on below chart), that it has always marked a significant low.  As Silver has retraced back to its 2 year support area (low $26 area), sentiment has dropped even further this time compared to past lows.  This follows the general theme I outlined within the introduction of the premium newsletter.  The longer this bear market powers on, the deeper the sentiment will drop and therefore fewer will be willing to buy into the idea that a new low is at hand.
silver sentiment april2013 gold silver price news
Sentiment is so low that the premium on the Sprott Silver funds has essentially dropped to zero.  No premium for a fund that has always commanded at least 2% but on average around 5-6% and as much as 20%.  It has never gotten anywhere near these level before and it just highlights the “disgust and fear” aspect of this bear market in metals.
Sprott Silver Premium april2013 gold silver price news
It’s no surprise to see Silver sentiment and premiums at such depths.  The Silver chart is just horrendous, look at the series of lower peaks and lower DCL’s.  It’s no wonder that the latest COT report shows speculative long positions are at such very low levels.
Silver Price Daily October2012 April2013 gold silver price news
In closing, the entire precious metals sector looks to be bouncing off yet another punishing drop and Cycle Low.  Prudent investors will ask the question, what is different this time around.  To this I have no firm answer and it’s why we remain guarded and under–invested.
But we’re also again back down and bumping against 18 and 24 month lows.  There is major support down in this area, so the theory is that we’re going to once again bounce out of this area.  If we manage to power higher, there is a great chance that it will just never look back!.  But if we were to lose major support, that will send the sector into a more pronounced and deeper bear market.

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Blue Dollar Market

by Martin Armstrong
Armstrong Economics

The Argentine Government has made it its policy to overvalue the Argentinean Peso (to hide the fact that people are buying dollars and smuggling them out of the country in any way they can as a result of the brain-dead policies they’ve been pursuing for about a decade now). Of course this has led to a “black market” rising where the USD is indeed much higher than the “official rate”. The free market USD is often referred to as Blue Dollar, and is about 60-70% higher than the Government-suppressed “market”.
Continue Reading at ArmstrongEconomics.com…

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Sequenom Inc. (NasdaqGS: SQNM)

Sequenom, Inc. provides products, services, diagnostic testing, applications, and genetic analysis products that translate the results of genomic science into solutions for biomedical research, translational research, molecular medicine applications, and agricultural and livestock research. The company operates in two segments, Molecular Diagnostics and Genetic Analysis. The Molecular Diagnostics segment researches, develops, and commercializes noninvasive molecular diagnostic tests for prenatal genetic disorders and diseases, women’s health related disorders and diseases, ophthalmology, oncology, infectious diseases, and autoimmunity. The Genetic Analysis segment designs and markets MassARRAY system, a nucleic acid analysis platform that comprises hardware, software applications, consumable chips, and reagents to measure genetic target material and variations.

To review Sequenom’s stock, please take a look at the 1-year chart of SQNM (Sequenom, Inc.) below with my added notations:


For the last (2) months SQNM has been consolidating within a common price 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. For SQNM, the rectangle pattern has formed a $4.70 resistance level (red) and a $4 support level (blue).

The Tale of the Tape: SQNM has formed a rectangle pattern. The possible long positions on the stock would be either on a pullback to $4, or on a breakout above $4.70. The short opportunities on SQNM would be on a break below $4 or on a rally back up to $4.70.

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The next domino: Australia doubles tax on retirement savings

Australia Tax
sovereignman.com / By Simon Black 
Though Australia’s national balance sheet is comparatively quite strong, the government has been running at a net deficit for years… and they’re under intense pressure to balance the budget.
The good news is that Australia now has a goodly number of investor-friendly immigration programs designed to bring productive foreigners into the country, similar to the trend we’re seeing across Europe.
On the flip side, though, the Australian government has just announced new rules which penalize citizens who have responsibly set aside savings for their own retirement.
Any income over A$100,000 drawn from a superannuation fund (the equivalent of an IRA in the United States) will now be taxed at 15%. Previously, all such income was tax-free.
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Investment Education 101: Interest and Debt: The Rule of 72 for Compound Interest

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Soros Sees China Shadow-Banking Risks Similar to Subprime

from Bloomberg.com
Billionaire investor George Soros said China has a “couple of years” to control risks from nontraditional financing whose expansion has parallels with the cause of the global financial crisis.
“The rapid growth of shadow banking has some disturbing similarities with the subprime-mortgage market in the U.S. that caused the financial crisis of 2007-2008,” Soros said today in a speech at the Boao Forum for Asia in China. “I’m sure the authorities are aware of the dangers. They have both the skills and the resources to deflate an incipient bubble gradually.”
Continue Reading at Bloomberg.com…

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