Monday, October 21, 2013

Alasdair Macleod: Currency Crisis Dead Ahead

Introducing the ‘Fiat Money Quantity’ measure

This week’s podcast interview introduces a new monetary measurement developed by Alasdair Macleod: the ‘Fiat Quantity of Money’, or FMQ.
Alasdair explains how FMQ is derived, as well as what it can tell us about the true levels of fiat money supply. In the case of the dollar, it reveals that levels are far above what is commonly appreciated – so far, in fact, that a currency crisis could arrive sooner than even many dollar bears expect.
What ‘Fiat Money Quantity’ (FMQ) Is Signaling
I started off with the desire to put together a metric of money which allows me to compare sound money with fiat money. My approach to this was to look at what happens in how fiat money was created.
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The Hain Celestial Group, Inc. (NASDAQ: HAIN)

The Hain Celestial Group, Inc., together with its subsidiaries, manufactures, markets, distributes, and sells organic and natural products. The company offers grocery products comprising infant formula, infant, toddler and kids foods, non-dairy beverages and frozen desserts, flour and baking mixes, hot and cold cereals, pasta, condiments, cooking and culinary oils, granolas, granola and cereal bars, canned, chilled fresh, aseptic and instant soups, greek-style yogurt, chilis, packaged grains, chocolate, and nut butters. It also provides cold-pressed juices, chilled hot-eating and frozen desserts, cookies, crackers, gluten-free frozen entrees and bars, frozen pastas and ethnic meals, frozen fruit and vegetables, cut fresh fruit, refrigerated and frozen soy protein meat-alternative products, tofu, seitan and tempeh products, jams, fruit spreads and jelly, honey, and marmalade products, as well as other food products. Further, it provides personal care products comprising skin, hair and oral care, deodorants, baby care items, diapers, acne treatment, body washes, and sunscreens.
To review Hain's stock, please take a look at the 1-year chart of HAIN (The Hain Celestial Group, Inc.) below with my added notations:
1-year chart of HAIN (The Hain Celestial Group, Inc.) Over the last (8) months HAIN has consistently moved higher. Since February though, the stock has formed a 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. HAIN confirmed its trendline support earlier this week. In addition, the stock has formed a trendline of resistance over the last (2) months (red). At some point, one of these lines has to break.

The Tale of the Tape: HAIN has created (2) trendlines to watch. A long position could be entered on a pullback to trendline support or on a break through trendline resistance. A short position could be entered on HAIN at trendline resistance or if the stock were to break the trend line support.
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Is Santarus :SNTS a Buy?

The company’s treatments for colitis, angioedema, and travelers’ diarrhea could triple—that’s right, triple—the company’s 2012 revenue.
How can this be?
  1. On January 14, 2013, the FDA approved its colitis treatment—pushing share prices 11% higher.

  2. In the five months since the company’s colitis treatment was launched, the company has seen sales jump $22 million, and we expect revenues to double again by year’s end.

  3. What’s more, the company’s new acid reflux product has one key advantage over its competitors: It offers the longest lasting acid control in the market—nearly 19 hours. The results will drive millions more in annual sales and earnings, not just for the next 90 days but for years to come.

  4. In addition, the company’s anti-diabetes agent just received a huge endorsement from the AACE (American Academy of Clinical Endocrinologists), whose guidelines doctors use in prescribing. With the annual diabetes market estimated at $35 billion, that’s like winning a $100 million lottery every year as tens of thousands of doctors begin to prescribe this company’s new treatments over the competition.

  5. As if that weren’t exciting enough, the company’s angioedema treatment just received orphan drug status from the FDA. As a result, the company will now receive millions of dollars in tax incentives, plus enhanced patented production and marketing rights—not to mention subsidies for its clinical research.
This is why the company’s stock price has soared 392% since I first recommended it in March 2012. With the analyst community expecting the company to declare another 150% earnings growth come November, we see the upward trajectory on this stock continuing for some time to come.

This is why, if you can add this one to your holdings before it declares earnings—and before the pension funds pile in—you could easily grab its next 100% gain by the end of the year.

Santarus Inc...
  • Has registered 89% sales growth and 2,032% earnings growth year over year,

  • Has analysts forecasting another 154% earnings rise come November,

  • Has a forward P/E ratio of—get this—just 15, and that’s after the stock has handed my readers 392% gains in 19 months,

  • Has a market cap of under $2 billion,

  • Has one of the strongest buy ratings of any of our stocks, and

  • Has just reported a 7.8% sales surprise and a 72.2% earnings surprise and raised its full-year outlook to $1.61 to $1.65 per share from $0.72 to $0.81 per share.
Throw in the fact that ObamaCare is about to funnel another 31 million potential customers its way and you can see why I’m convinced beyond doubt the company is going to clobber Wall Street and double investors’ money again.

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Full Moon Drives Nasdaq To New 2013 Highs

It’s hard to really trust the market moves when the Nasdaq screams higher and the Dow closes essentially flat and I want to point something out that could be key as we go into next week.
  • Oct 18th – full moon (top?)
  • Sept 19th – full moon (top in markets)
  • July 22nd – (a congestion zone that became a top)
  • June 23rd – bottom
My point here is that the full moon is often associated (at least in recent times) with an important reversal area for the Dow. Add in the fact the Nasdaq is really over-extended and enthusiasm for tech stocks after Google’s earnings should be at highs, and you have a recipe for a pullback. I’m not bearish as I am more indifferent to what is going on in the markets. I’m waiting for some sort of game-breaker move to the upside to get long (and we may have it after today, but it will be key to see how the Nasdaq performs in the coming days) or I was waiting for a decent pullback to get long.

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US Weekly Economic Calendar

time (et) report period Actual CONSENSUS
10 am Existing home sales Sept.   5.30 mln 5.48 mln
8:30 am Nonfarm payrolls Sept.   185,000 169,000
8:30 am Unemployment rate Sept.   7.3% 7.3%
8:30 am Import price index Sept.   0.2 0.0%
10 am FHFA home price index Aug.   -- 8.8% y-o-y
8:30 am Weekly jobless claims 10/19
337,000 358,000
8:58 am Markit flash PMI Oct.   -- 52.8
10 am New home sales (tentative) Sept.   422,000 421,00
10 am Job openings Aug.   -- 3.7 mln
8:30 am Durable goods orders (tentative) Sept.   3.1% 0.1%
9:55 am UMich consumer sentiment index Oct.   75.2 75.2
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