Saturday, May 31, 2014

David Gurwitz Reloaded – Gold Silver Lows Getting Very Close

from Financial Survival Network
David Gurwitz of Charles Nenner Research joined us to update last week’s bad audio recording.
Yes, right on schedule, we’re seeing the projected lows in gold and silver kick in. You can speculate as to why.
David sees $1150-$1160 as the potential bottom, sometime in July. After that it could be happy days are here again… At least David seems to think so, and the cycles are looking good for Apple too, $750!
Click Here to Listen to the Audio
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James Turk – One Of The Most Astonishing Charts In History / May 29, 2014
On the heels of some strange trading in global markets, today James Turk sent King World News one of the most astonishing charts in history.  All KWN readers around the world need to take a good look at the 25-year chart that is featured by Turk in his interview below.
Turk:  “Two days ago we discussed the options related smash in gold and silver.  Well, today I sent you one of the most astonishing charts in history.  Eric, I’ve never seen a financial asset class as distorted as the one shown in the chart below….
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How to Avoid Penny Stock Pumpers

The Wolf of Wall Street is back. But this time, he has an internet connection.
“Spam messages hyping penny stocks are multiplying, accounting for 16% of unwanted email in 2013, up from less than 1% the year before,” MarketWatch reports. “Regulators also charged five penny-stock promoters last week for schemes to inflate share prices to feign market interest, including two cases that involved plans to send email blasts.”

Yes, the pump and dump schemers are out in full-force—and they’re coming for you.
The cycle of a promoted stock
Recently, the SEC and the Financial Industry Regulatory Authority said stock spam has kicked into high gear, according to MarketWatch, representing the “inbox equivalent of a boiler room sales operation.”

But he financial media’s obsession with the scammers and the high-flying stocks they tout isn’t doing you any good at all…

Our own microcap expert Thompson Clark says all the media attention given to these so-called “investments” just feeds right into the hands of pump-and-dump scammers.
“The news articles are absurd,” Thompson says. “Instead of warning investors, they do the opposite. That is, they encourage investors to look for these ‘story’ stocks, expecting ridiculous gains with no risk.”

Thompson spends his days sifting through the filth in the over-the-counter market to dig up the few ideas he finds worthy of a serious investment. And he even uses microcap’s shady reputation to his advantage…

“Think about it this way,” he explains.” The average perception of microcaps is that they’re 100% full of scam artists and shady promoters. If that’s the case, then there must be a lot of promoters. That’s because there’s currently over 7,500 listed microcap stocks in the US alone.”

With fear and panic comes opportunity. Of course, there’s no promoting involved in Thompson’s investment thesis. It’s just simple math, economics, and common sense.
“As long as the average investor thinks microcaps are rife with frauds, I’ll continue to recommend my readers invest in them. The less competition, the better. Take, for example, a microcap company that I recently recommended to my subscribers. It’s been a publicly traded microcap for close to twenty years.

“It’s very possible this tiny company could become a billion dollar company.  Soon…”
And stay away from those promoted stocks. They’ll bring you nothing but trouble…
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Expect a Tsunami of Municipal Bankruptcies

by Michael Kling
Money News

More cities will go bankrupt like Detroit, predicts a government expert.
Rising pension-fund and health-care costs are putting enormous pressure on state and local governments, Richard Ravitch, who is advising Detroit’s bankruptcy judge, tells CNBC. Plus, the federal government, attempting balance its own budget, has cut its funding to cities.
Politicians prefer not to raise taxes or cut services, so have repeatedly issued bonds to borrow, kicking the tough decisions down the road.
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Unless You Want to Go to Prison, Read This Before Taking Money Out of Your Bank

George Soros won’t go to prison for taking his money out of the bank, but you could, if you are not very careful.
In response to yesterday’s article which detailed how it is a good idea to monitor George Soros’ money movements, because they are predictive of future economic collapses as they have been so many times before. We should all be more a little more than nervous when Soros, in the first quarter of 2014, removed his money from three megabanks.
“Rick” wrote to me following the publication of yesterday’s article with some very pointed concerns and questions. Here is his response:
“Ok, the idea of removing your money from the bank for me is a joke! I have a substantial amount in 3 different accounts. It’s VERY difficult to remove more than $8,000 or $9,000 at a time without extreme scrutiny from the IRS and the DEA. Plus, the banks will tell you that frequently they don’t have enough on hand to give you even $8,000. If you close your account, guess what? They give you a check, NOT cash! So you have to go to another bank WITH A CHECK once more!
So, how does one remove their money from the bank without causing  major transaction reports to be filed with the government about your banking activities????
Dave, thus, please give us tips on how to remove substantial amounts of cash without incurring the wrath of the government, and how to take out large amounts of cash to begin with, as the banks discourage taking out more than $1,000 to $3,000 dollars in any given transaction.”
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Friday, May 30, 2014

Fortunes Are Being Made in This Sector – Marin Katusa of Casey Research

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McAlvany Weekly Commentary

McAlvany Financial Briefing Part 2

About this week’s show:
-Mike Gallagher interviews David McAlvany
-The dollar has lost 96% in 100 years
-Financial repression robs the retired
Read | Subscribe@iTunes
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General Motors (NYSE: GM) a Sell

This is no doubt a tough market to trade. Stocks seem to be levitating over a pit of ravenous bears who can't seem to get the upper hand (at least not yet).
On average, taking big short positions has been a losing proposition for investors, as many stocks have managed to climb higher in the face of uncertainly. If you are going to go short, there better be a darn good reason to do so.
Even though momentum stocks may look overpriced, it's safer to use less volatile stocks in this market environment. Traders should also use stop-losses and have realistic expectations.  (more)

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Why bond yields are tanking

The yield on the 10-year Treasury note (^TNX) hit a new low for the year, sinking as low as 2.43% Wednesday, its lowest level since June 2013. In a phenomenon that has surprised many on Wall Street this year, money is rushing into Treasurys even as stocks hover near multi-year or all-time highs.
Yahoo Finance Senior Columnist Michael Santoli says the flood of money into bonds is a global phenomenon and that as low as yields have fallen in the United States, they’re still better than much of the world. “If I want to give you a list of the countries whose 10-year debt trades at lower yields than the United States, it’s almost all the developed world,” said Santoli, highlighting that the United Kingdom, Canada and Germany are among the countries with lower yields than U.S. debt right now. “Globally, there’s a scarcity of yield.”  (more)

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Thursday, May 29, 2014

Bull / Bear Spread Now In Danger Territory Above 40%

from King World News
On the heels of recent strength in stocks, the spread between the bulls and bears is now in danger territory above 40%. Featured below is a fascinating chart which takes a look at sentiment. Bullish sentiment has now reach new extremes and it is above worrisome levels as the markets have remained strong.
Here is the latest Investors Intelligence report along with the all-important sentiment chart: The S&P 500 and DJ Transports ended Friday with further records while the NASDAQ Comp and Russell 200 each gained more than 2.1% over the five sessions. Index and indicator charts had more gains and positive status shifts. Not surprisingly there was another small increase in advisor optimism. Not every shift was in that direction as some new skepticism followed the positive weekly close.
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Trulia Inc (NYSE: TRLA)

Trulia, Inc. provides tools to research homes and neighborhoods for consumers through Web and mobile applications. The company, through its tools, also enables real estate professionals to market their listings. It provides subscription and free products for real estate professionals, as well as sells display media advertising. In addition, the company offers information on schools, crime, neighborhood amenities, home values, and other communities. It serves buyers, sellers, and renters. The company was formerly known Realwide, Inc. and changed its name to Trulia, Inc. in September 2005. Trulia, Inc. was founded in 2005 and is headquartered in San Francisco, California.
To review Trulia’s stock, please take a look at the 1-year chart of TRLA (Trulia, Inc.) below with my added notations:
1-year chart of TRLA (Trulia, Inc.)
TRLA had been trading sideways for the last 3-4 months. Over that period of time the stock had formed a somewhat clear resistance level at $36 (red). In addition, TRLA had also created a strong level of support near $29 (green). At some point the stock had to break one of those two levels created by the rectangle pattern, and yesterday the stock broke resistance. The stock should now be making a run at the prior $40 level (blue).

The Tale of the Tape: TRLA had a level of resistance at $36 and yesterday the stock broke that resistance. The ideal long opportunity would be on a pullback down to or near that previous $36 level. On the other hand, one would want to enter a short position on a break back above the $36 level.
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Bonds Lead, But Gold & Silver Will Follow

Years ago, 16 to be exact I was reading a book by John Murphy (the god father of technical analysis). And I read something that has always stuck in my mind. He said that the price of bonds typically lead trend reversals in the stock market.
Taking a look at the chart below, you will notice that both the price of bonds and the price of gold have started to show signs of strength even though the US stock market continues to rise. This is telling us that the big money players are slowly rotating their money out of stocks. This is exactly what the intraday charts of the indexes and volume have shown us in the last couple months (distribution selling) also. Smart Investors are starting to rotate their money into the safer havens like bonds, gold and silver.
gold stage
The treasury bonds market is one of the longest running bull markets in history. I do not recall any other asset class to have sustained a bull market for over 33 years.  The charts below shows this massive rally and also the new short term rally which will last for several months.  (more)
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Leveraged ETFs May ‘Blow Up’ Industry

BlackRock Inc. (BLK)’s Laurence D. Fink, who oversees the world’s biggest exchange-traded fund lineup, said leveraged ETFs are a structural problem and have the potential to “blow up” the industry.

“BlackRock would never do a leveraged ETF,” Fink said in a question-and-answer session with Deutsche Bank AG co-chairman Anshu Jain today in New York. Fink said he doesn’t understand why the U.S. Securities and Exchange Commission allows them to operate.

ETFs, which have turned into one of the most popular investing vehicles over the past decade, have become increasingly complex as firms try to appeal to a more diverse base of investors. While the majority of ETFs mimic indexes, leveraged versions use swaps or derivatives to try to amplify daily index returns. Leveraged and inverse ETFs have came under scrutiny over several issues since 2009, the year the SEC warned brokers and investors that the vehicles weren’t appropriate for long-term investors. (more)

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Our Top 3 Dividend Funds for a ‘Monthly Paycheck’ : PFF, SPFF, JPS

For income investors considering preferred stocks, having an idea of what to consider is a rational starting point.
I have three preferred-stock funds worth considering today. All three funds yield above 6%, and all three pay dividends monthly.
This is an additional benefit for anyone dependent on investment income to meet monthly expenses.
For any income investor who wants to venture into the world of high-yield preferred stock funds, any of these three picks will competently do the job.  (more)

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Wednesday, May 28, 2014

Wall Street: 98% Risk of Crash This Year

Earlier this year, a select group of Wall Street Insiders were surveyed, and the results were ominous. These financial experts and fund managers predicted a 98% chance a stock market crash will happen in the next six months.
Gary Shilling, one of Wall Street’s top economists, says the S&P Index could drop as low as 800, a 42% decline.
Jeffrey Gundlach, one of the world’s biggest bond fund managers and CEO of DoubleLine Capital, says the real damage is yet to come and an “ominous third phase” will “far exceed the damage of 2008.”  (more)

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Where Is Gold Going?

Two week ago I first called for patience regarding Gold’s expected Investor Cycle (Investor Cycles run 24 weeks) decline. Since then, Gold has continued to chop sideways in a largely lifeless and apathetic manner. The few price spikes we’ve seen have typically come during thinly traded markets, with little follow-through and prices that close near where they opened.
The current price action is why the Bollinger Bands have constricted so tightly. The trading range has narrowed with each passing day, and volatility is now at an extreme low. The lack of volatility is reflected in the 2nd tightest set of Bollinger Bands since the start of the bull market 14 years ago. Regular readers will know that I place significant predictive value on instances where tight Bollinger Bands occur near expected Cycle pivots.

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Bank of Ireland (NYSE: IRE)

The Governor and Company of the Bank of Ireland provides a range of banking and other financial services to consumer and business banking sectors in Ireland and internationally. The company operates through Retail Ireland, Bank of Ireland Life, Retail UK, and Corporate and Treasury segments. Its deposit products include current accounts, checking and time deposits, and certificates of deposit. The company’s loan products portfolio comprises loans to customers, including overdrafts; installment credit and finance lease receivables; mortgage loans for house purchases; home improvement and secured personal loans; credit cards; property and construction, business, and other services loans; and term loans, project, structured, commercial, and leverage acquired finance, international asset financing, leasing, installment credit, and invoice discounting.
Please take a look at the 1-year chart of IRE (The Governor and Company of the Bank or Ireland) below with my added notations:
1-year chart of IRE (The Governor and Company of the Bank or Ireland)
IRE rallied nicely to start off the year, but has since then given it all back. Along the way, the stock has found support and resistance areas primarily at the levels of $14, $16, $18, $20 and $22 (blue). Each of those prices has been either support or resistance, or even both, multiple times. The stock is now trading between the $14 and $16 levels.

The Tale of the Tape: IRE is currently trading between $14 and $16. A long trade could be made on a pullback to $14 or on a break above $16. A short trade could be made at $16 or on a break below $14.
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George Soros Tells America To Take Their Money Out of the Banks Before It Is too Late

When George Soros is not donating millions to the North American Man Boy Love Association (NAMBLA), his money  movements have been predictive of an impending economic collapse. This has made him the most watched bankster in the world. If you have any money in a domestic American bank, you would be wise to read this article and act accordingly.
This article is the first of a two part series which is designed to help as many people, as possible, to have as soft of a landing as possible from the devastating effects of an economic collapse that may be right around the corner.

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Tuesday, May 27, 2014

Kyle Bass On China's "Contraction" And "The Fed's Worst Nightmare"

With the Fed tapering and both China “I don't think the markets are discounting what’s really happening in China,” and Japan’s currencies likely to weaken, the net impact on the U.S. will be deflationary, Kyle Bass warned in a recent presentation. That trend will be accelerated by the improvement in the balance of trade for the U.S., which had its current account deficit shrink due to increased hydrocarbon production. Bass warns, the crucial moment will come when the U.S. reports a sub-6% unemployment rate, meeting the target it has set for normalizing its monetary policy by ending QE and raising rates. He predicted that will come in July. That will be the Fed’s “worst nightmare,” he said. Raising rates would stifle growth and recreate unemployment problems, which would be disastrous politically, according to Bass.  (more)

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Ferro Corporation (NYSE: FOE)

Ferro Corporation produces and sells specialty materials and chemicals in the United States and internationally. The company operates in five segments: Pigments, Powders, and Oxides; Performance Colors and Glass; Performance Coatings; Polymer Additives; and Specialty Plastics. It offers various performance materials, including frits, porcelain and other glass enamels, glazes, stains, decorating colors, pigments, inks, polishing materials, specialty dielectrics, electronic glasses, and other specialty coatings; and performance chemicals comprising polymer additives, engineered plastic compounds, and pigment dispersions. The company’s products are used in appliances, automobiles, building and renovation, electronics, household furnishings, packaging, and industrial products. It sells its products primarily to the manufacturers of ceramic tiles, appliances, construction materials, automobile parts, glass, bottles, and wall coverings directly, as well as through agents and distributors.
Please take a look at the 1-year chart of FOE (Ferro Corporation) below with my added notations:
1-year chart of FOE (Ferro Corporation)
FOE has held a very important level of support at $12 (green) since October of last year. No matter what the market has done lately, FOE has not broken $12. Now the stock is approaching $12 again and that might provide another bounce higher. However, the stock’s recent creation of lower highs could lead to an impending breakdown on the horizon.

The Tale of the Tape: FOE has a key level of support at $12. A trader could enter a long position at $12 with a stop placed under the level. A break though the trendline resistance, which currently sits near $13, would also be an opportunity to get long on the stock. If the stock were to break below the support, a short position would be recommended instead.
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How to Play Platinum’s Rise

In April, Investment Director Karim Rahemtulla wrote an informative article explaining why platinum prices are set to rise.

Like so many things in the economy, the situation boiled down to supply and demand.

You see, as Karim explained, the platinum supply is shrinking thanks to the depletion of Russia’s Norilsk mine and labor unrest in South Africa’s platinum sector.

Since Karim posted his article, the situation in South Africa, the world’s largest supplier of platinum, has only gotten worse. (more)

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This Legendary Guru Is Focusing On Double-Digit Yielders

If you are hoping to be a savvy stock picker when you're in your 70s, I've got good news for you. Seventy-one-year-old legendary fund manager Leon Cooperman, who I profiled last year, remains on top of his game.
As I noted then, Cooperman was wrapping up a successful year of investment returns in 2012, and I decided to see how his February 2013 investments turned out. Excluding his investments in yield plays Linn Energy (Nasdaq: LINE), Kinder Morgan (NYSE: KMI) and Atlas Pipeline Partners (NYSE: APL), which are in the portfolio for income and not capital appreciation, the rest of his top holdings are handily beating the market.
Cooperman's Hot Hand
Yet recent adjustments in his portfolio suggest Cooperman now views the market in a different context. According to recent filings, Cooperman appears to be eschewing growth stocks and chasing yield -- very high yield. Three of his picks sport dividend yields in excess of 10%. Here's a closer look. (more)

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Wells Fargo & Co (NYSE: WFC)

Wells Fargo & Company provides retail, commercial, and corporate banking services to individuals, businesses, and institutions. The company’s Community Banking segment offers checking and market rate accounts, savings and time deposits, individual retirement accounts, and remittances; and lines of credit, auto floor plan lines, equity lines and loans, equipment and transportation loans, education and residential mortgage loans, and credit and debit cards. Its Wholesale Banking segment offers commercial loans and lines of credit, letters of credit, asset-based lending, equipment leasing, international trade facilities, trade financing, collection, foreign exchange, treasury management, investment management, institutional fixed-income sales, interest rate, commodity and equity risk management, insurance, corporate trust fiduciary and agency, and investment banking services, as well as online/electronic products. The company’s Wealth, Brokerage, and Retirement segment offers financial advisory, wealth management, brokerage, retirement, trust, and reinsurance services.
To review Wells’ stock, please take a look at the 1-year chart of WFC (Wells Fargo & Company) below with my added notations:
1-year chart of WFC (Wells Fargo & Company)
WFC has been trending higher since October, and during that time, the stock has been climbing a trendline of support (blue). Over the last 2 months though, the stock has formed at 52-week high resistance at $50 (red). At some point WFC will have to break one of those two levels.

The Tale of the Tape: WFC has a $50 resistance and an uptrend line of support to watch. A long trade could be made on either a pullback down to the trendline, which currently sits near $48, or on a break through the $50 resistance. A break below the trendline support should lead to lower prices.
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Monday, May 26, 2014

US Weekly Economic Calendar

time (et) report period Actual forecast previous
  Memorial Day
None scheduled
Tuesday, MAY 27
8:30 am Durable goods orders April   -0.7% 2.5%
9 am Case-Shiller home price index March   -- 12.9% yoy
9 am FHFA home price index March   -- 6.9% yoy
10 am Consumer confidence index May   83.5 83.2
  None scheduled        
Thursday, May 29
8:30 am Jobless claims 5/24   322,000 326,000
8:30 am GDP revision Q1   -0.6% 0.1%
10 am Pending home sales April   -- 3.4%
8:30 am Personal income April   0.3% 0.5%
8:30 am Consumer spending April   0.0% 0.9%
9:45 am Chicago PMI May   63.1 63.0
10 am UMich consumer sentiment index May   82.0 81.8
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Saturday, May 24, 2014

Clif High Web Bot: June US Economy Crash Begins

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Porter Stansberry: How I'm preparing for the next bear market in stocks

I’m afraid you’re not going to like today’s Friday Digest. It deals with the serious risks to equity prices in the U.S. and how you should handle your portfolio. I’d like to give you a simple barometer to watch – something that will serve as an “early warning” indicator for us. I’m nearly certain you’re not watching this indicator yet. You may have never even heard of it before. It’s something CNBC won’t tell you about. It’s something that will help us get out of stocks before the ongoing correction because of the bona fide bear market.

Here’s the ironic part… just telling you about this indicator is probably going to cost me a lot of money, perhaps even millions of dollars.

You see, we have a lot of subscribers that never want to read anything about risk or the likelihood that stocks will fall in price. And every time I write an essay like this… something that’s generally bearish… and perhaps a bit more sophisticated than what they’re used to seeing in a newspaper… they immediately cancel their subscriptions.

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Financial Sense Newshour – Quarterly Webinar 2014 Q1

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Euro Weakness Remains / Dan Norcini /
I have been keeping a close eye on the Euro ever since ECB President Draghi began talking it down a couple of weeks ago. The reason for this, besides monitoring various currencies for trading opportunities, is to see whether or not it has indeed peaked out and is starting a trending move lower. If it does, it is my view that this is going to especially benefit the US Dollar, as the Euro comprises over 50% of the weightings in the USDX. Consequently, a falling Euro will tend to push the Dollar higher which in turn will tend to push gold lower.

I wish to repeat for the newer readers here, I view gold as the Anti-Dollar. As a general rule, it tends to fall when the Dollar moves higher and conversely, tends to rise when the Dollar falls. The linkage is by no means an exact one – but it is a fairly good judge of whether one can expect rising or falling gold prices as one monitors currency movements.

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The Contrarian Case for Coal Stocks

The sudden abundance of natural gas and tightening of coal-emission standards by the EPA has pushed U.S. coal prices down sharply over the past five years as generation plants shifted their energy preference to the cleaner and cheaper resource:

While no one is suggesting we’re at the dawn of a new coal age, a research note from Westwood investment management makes an interesting case for why we may be at an important inflection point. With natural gas losing some of its pricing edge relative to coal and coal inventories already at lows, we could be at the turn for an incremental shift in demand for coal. “…(W)e believe that 2014 could mark a new profitable stage for the coal sector as headwinds have turned into potential tailwinds,” wrote Westwood’s energy research team.  (more)

Friday, May 23, 2014

10 High-Yield 'Dividend Aristocrats' To Buy Now

Valued at over $3 billion each, these mega-sized blue-chip companies have managed to pay out dividends for decades. Some have paid a dividend for the past century or even longer.
But to earn their coveted status, they've had to increase their dividend every year for the past 25 years. And to keep the status, they have to keep paying a larger dividend every year from now on -- no easy feat.
That's why only 54 out of the 500 stocks in the S&P 500 have made the cut.  (more)

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David Gurwitz – Lows Coming in Silver and Gold

from Financial Survival Network
David Gurwitz of Charles Nenner Research says the cycles never lie. He sees stock markets topping around the world and gold and silver putting in their bottoms before beginning their inexorable rises. Oil is going up with an intermediate target of $122 per barrel. Natural Gas is another story. The war cycle is picking up steam. Every 100 hundred years there’s a big one, just go back in history. Cycles seem to control everything, so the next time someone’s carrying on about free will, just point to the stars.
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The Euro Is About To Collapse

Two weeks ago I started to get all excited about the US Dollar Index. With the amount of pessimism in this market, the key reversal day on May 8th came at the perfect place and perfect time. But simultaneously, the $EURUSD confirmed a failed breakout and key reversal day to the downside. I believe the selling in this market continues.
Here is a weekly chart of $EURUSD going back to the 2008 all-time highs. I first brought up this chart two months ago, but the currency continues to struggle at this level. Look at the failed breakout and quick reversal:
5-22-14 eurusd
Now take a look at a shorter-term chart. Look at that key reversal day on May 8th. Prices hit the highest levels since 2011 on an intraday basis, and then reversed course to go out at the lows. The selling continued after that confirming the failed breakout:
5-22-14 eurusd daily
The problem I see with EURO is that we have failed breakdowns on multiple time frames and at multiple resistance levels. On the weekly chart, we have a multi-year downtrend line that it failed to take out. On the daily chart, we have horizontal resistance that it failed break. This is not good. I would expect further downside in this market.
To me that’s great for US Dollars as the Euro represents 60% of the US Dollar Index. A sell-off here would give the greenback a major boost.
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Emerson Electric Co. (NYSE: EMR)

Emerson Electric Co., a diversified technology company, designs and supplies products and technology, and delivers engineering services and solutions to the industrial, commercial, and consumer markets worldwide. The company was formerly known as The Emerson Electric Manufacturing Company and changed its name to Emerson Electric Co. in 2000. Emerson Electric Co. was founded in 1890 and is headquartered in St. Louis, Missouri.
Please take a look at the 1 yr. chart of EMR (Emerson Electric, Co.) that I have shown below with my added notations:
1 yr. chart of EMR (Emerson Electric, Co.)
EMR had formed a nicely defined up-channel over the last 3 months. A channel is formed through the combination of a trend line support that runs parallel to a trend line resistance. When it comes to a channel any (3) points can start the channel, but it’s the 4th test and beyond that confirm it. You can see that EMR has multiple test points between the channel resistance (red) and the channel support (blue). Yesterday EMR broke the channel support and should be moving lower from here.

The Tale of the Tape: EMR broke out of the bottom up its up-channel. A short trade could be entered on any rallies up to the previous channel support. That line currently sits just above $67.
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The Last Time The Market Was This Short, Stocks Crashed / by Tyler Durden / 05/22/2014 13:43 
It is common knowledge among those that prefer to see the glass of aggregate demand always half-full (in need of fiscal or monetary stimulus and thus always time to BTFD) that stocks “climb a wall of worry” and that stocks can’t drop if so many people are negative. However, while we are sorry to steal the jam from their exuberant ‘cash on the sidelines’ donut, the truth is that eventually ‘strong hand’ short positions build to a point where they dominate and provide the tipping point of weakness in stocks. As Goldman Sachs highlights in the following two charts of short interest ratio (days to cover) and aggregate short interest (dollars), the last time there was this much money short was mid-2007… and that didn’t end well.
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Thursday, May 22, 2014

Dollar Collapse Starts in Late 2014-Charles Nenner


Renowned financial analyst Charles Nenner has been studying cycles to predict all major markets for the past three decades.  Does all the global manipulation in the markets make a difference to the timing of the cycles?  Nenner says, “It doesn’t . . . all these things have nothing to do with the way the markets behave.  They are part of the market behavior.”  Nenner gives Former Fed Head Alan Greenspan as an example.  Nenner explains, “Greenspan and his guys were part of the market.  So, if it would be so that you could manipulate the markets, then we could not predict; and since we predict with much success, then it proves there is no influence whatsoever.” 

On the inflation/deflation question, Nenner predicts both, but first deflation.  Nenner says, “We are holding on to the deflation scenario.  I think we are going into deflation.  I still think we are going to a Japan scenario.  It doesn’t mean that in a couple of years we won’t have super-inflation.”  Nenner adds everything is on a cycle, including interest rates, and goes on to say, “Interest rates go up 30 years and 30 years down; and if you start counting back, in two to four years, we should go back to the old highs of 18% or so.”  Nenner says governments “want” and “need” inflation.  Nenner explains, “Everybody in the end wants the inflation; otherwise, the deficits are going to be huge.”   (more)

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Pierre Lassonde: Mining Cycles Are Good for Royalty Companies and Investors

Pierre Lassonde revolutionized investing with the creation of the first gold royalty company. Three decades later, he is as confident in this model as ever, especially considering the difficulties of the majors in discovering large, high-grade reserves. In this interview with The Gold Report, this director and former chairman of the World Gold Council discusses the significance of the shift in gold ownership from West to East, the problem of mining scale and the results of the industry’s failure to develop new prospecting technology.
The Gold Report: You wrote “The Gold Book: The Complete Investment Guide to Precious Metals” in 1990. What have been the biggest changes in gold investment since then?
Pierre Lassonde: The first biggest change is the development of gold exchange-traded funds (ETFs). They began in 2004 and went from zero all the way up to over 2,650 tons of gold. Ownership is now down about one-third, but that’s still about 1,750 tons of gold held by this instrument.
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Canada’s housing market over due for full-blown correction of as much as 25 per cent

Canada’s housing market continues to show strength overall, with a slowdown in a few urban centres, but it “may only be a matter of timing” before there’s a full-blown correction, warns an economist.
Capital Economics economist David Madani, known for his bearish outlook on Canada’s housing sector, believes the market is overdue for a correction of as much as 25 per cent.
He says the recent softness in cities such as Halifax, Winnipeg and Victoria are just the beginning. Larger “overvalued markets” such as Toronto and Vancouver, are expected to follow.
While many economists are calling for the “soft landing” in Canada’s housing market, Madani forecasts something more severe.  (more)

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Monster Worldwide (NYSE: MWW) Could Double Your Money

For every (NASDAQ: AMZN) or Priceline (NASDAQ: PCLN), you'll find many more examples of web-based business that failed to live up to their promise. Companies like WebVan, and were once worth hundreds of millions of dollars, yet failed to survive the eventual dotcom shakeout.
Others have managed to survive, but are mere shadows of their former selves. Case in point: online employment firm Monster Worldwide (NYSE: MWW), which has seen its shares slide more than 90% since their peak in the summer of 2000.  (more)

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BlackRock’s Fink Warns Housing More “Unsound” Now Than During Last Bubble / by Tyler Durden / 05/21/2014 11:52
More than half a decade after the collapse, and with talking heads proclaiming the recovery as strong as ever and the Fed remarking on the housing market’s foundational pillar to that recovery, BlackRock’s CEO Larry Fink has a few words of warning for the exuberant – the US housing market is “structurally more unsound” today that before the last financial crisis. As the data comes in weaker and weaker, despite hopes for a post-weather bounce, the fact that the US housing market is “more dependent on Fannie and Freddie than we were before the crisis,” is a problem for the US taxpayer and – unlike Mel Watt‘s‘free credit for everyone’ approach to expanding the GSE’s role, Fink says with strong underwriting standards, ownership of affordable homes can again become a foundation for American families. So Watt’s easy ‘Subprime 2.0′ or Fink’s hard ‘American Dream’.
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Wednesday, May 21, 2014

Remarkable Information Kyle Bass, Dylan Grice & Others Shared / May 20, 2014
Today John Mauldin spoke with King World News about remarkable information Kyle Bass, Dylan Grice, Niall Ferguson, Jonathan Tepper and others shared at his conference in San Diego.  Mauldin, President of Millennium Wave Securities, also discussed the bubble nobody is looking at which is going to create serious problems.
Eric King:  “John, you just finished with this major conference in San Diego.  It was very high-powered.  Would you mind talking about who was there and what you heard?”
Mauldin:  “We had something like 20 speakers — Kyle Bass, Dylan Grice, David Zervos, Gary Shilling, Ian Bremmer, Niall Ferguson, Anatole Kaletsky, Jeff Gundlach, Grant Williams, Jonathan Tepper, Neil Howe, Lacy Hunt, George Gilder, Stephen Moore.  So it was a pretty high-powered group….
Continue reading the John Mauldin interview below…

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Federal National Mortgage Association (OTC: FNMA): This 'No-Brainer' Stock Could Quadruple

Every once in a while the markets hand you an investment that practically screams buy or sell.
Unfortunately, it's usually only in hindsight that it becomes so obvious... but once in a while, the market gives you the clues that an investment could go much higher. The investors savvy enough to catch on are anointed gurus as the rest of us wonder why we didn't see the writing on the wall.
While some of these "no-brainer" investments jump spectacularly, leaving little opportunity for later investors to profit, others are more gradual in their rise. (more)

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Food Prices Set To Rise Again: Weather Experts Predict El Niño Comparable to the Destructive 1997-1998 El Niño

The 1997-1998 El Niño is estimated to have caused over 23,000 deaths worldwide (source). With forecasters saying that the signs point to an 80% chance of a strong El Niño forming towards the end of this year, what impacts can be expected?

While some areas such as the West Coast of the United States could get a massive amount of rain (very welcome after record breaking droughts), other areas that rely on rain for agriculture will be left bone dry. A strong El Niño also increases fears that production of many key agricultural commodities in Asia and Australia will suffer.
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Richard Russell – I’m Afraid We’ll See Blood Spilled In America / May 19, 2014
Today KWN is publishing another important piece that was written by a 60-year market veteran.  At nearly 90 years old, the Godfather of newsletter writers, Richard Russell, warns that we will see blood in the streets as Americans revolt because of skyrocketing food prices.  Russell also discusses the missing U.S. gold hoard and more.

Russell:  “Headline in today’s WSJ: “Lackluster Earnings Leave Stocks on Thin Ice.” The article continues — “Investors had expected results to improve in the second quarter. Analysts are forecasting a 6% profit gain. Yet of companies offering guidance, 72% have warned that second quarter results could fall short of Wall Street’s expectations, which isn’t great but is better than the 80% level of the past three quarters.”

People are frightened, and they are ready to believe that a catastrophe lies just around the corner. They are pulling their hair out trying to find some way of creating income. In their frantic search for income, people are ready to believe any hare-brained scheme that promises them profits and income.
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Which Resource Areas Show Signs of Strength? / By Frank Holmes / 20 May 2014
Global synchronized growth, as measured by the Global Purchasing Managers’ Index (PMI), remained stable or positive for the past 12 months until Japan reversed the momentum in April with a precipitous drop in its PMI.  China is contributing modest growth but, fortunately, the U.S. and Europe are rebounding. This lack of consistent global momentum has created a short-term, volatile, hot and cold, stop and go sentiment.  Global real GDP growth peaked in 2010 at 5.2 percent, then slowed for the next three years, to 3 percent.  Global growth in 2014 is likely to accelerate, for the first time in four years, to 3.5 percent, according to ISI. This is constructive news for commodities.
Brian Hicks and I co-manage the Global Resources Fund (PSPFX) using a model that focuses on companies demonstrating robust fundamentals in sectors showing strength.  I’ve asked Brian to share his thoughts on the opportunities we see in today’s market.
Q: We’ve seen strength in the major oil companies, service and equipment companies, oil and gas exploration and production (E&P) companies, chemical companies and refiners. What’s behind the strength?
A: The major oil companies have benefited from higher Brent pricing and cheap relative valuation to energy and the broader market. E&P stocks are especially solid because the price of oil is strong. The shale revolution has been a transformative factor for a lot of companies in this space, creating very strong growth in production. Chemical companies and refiners are downstream beneficiaries of the shale play as relatively inexpensive oil and natural gas priceslower their main input cost in the manufacturing of chemicals and refined petroleum products.  Because of this competitive advantage in the U.S., we’re seeing chemical companies moving back to the states and creating jobs. Global demand is also increasing for oil and chemicals.
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Tuesday, May 20, 2014

SeaDrill (NYSE: SDRL) This Oil Stock Yields 11.2%

They're some of the most reliable dividend-paying stocks on earth.
Each controls a large stake in one of the most universal and depended-on forms of energy in the world, practically guaranteeing it will receive uninterrupted revenue for years to come.
Of course, I'm talking about oil stocks. Their stable demand and reliable dividend payments make oil stocks an undoubted favorite among income investors.
Yet despite being wildly popular in the income universe, most people are missing out on the world's best opportunities in this sector...(more)

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Platinum and Palladium Are Shaping Up To Be Major Bull Markets

Larry Edelson: Last week I told you how platinum and palladium are now preparing to blast off to the upside. This week, I want to tell you more about them, and why the Putin factor is so important in these markets.
First and foremost, the driving force that will send these metals higher is none other than the war cycles that I have been pounding the pavementabout.
Those war cycles are now starting to turn the markets on their heads. They are impacting every market on the planet and threatening to send almost all of them substantially higher.
But with platinum and palladium, you also have some very unique fundamentals coming into play.
First, both metals are in what is called a structural supply deficit. That’s when supplies are limited and getting even more limited — and there isn’t much that can be done about it.
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Is Your Pension at Risk?

There was a story released recently that claimed some public pension funds are placing increasing percentages of investments into higher-risk alternatives.
This money is collected from taxpayers and promised to government workers for retirement — yet it's becoming more of a high-stakes game.
Unsurprisingly, while these investments may be a problem for taxpayers and pensioners, they are not a problem for Wall Street firms that collect the high fees for managing the funds.
One report cites Blackstone, a large Wall Street investment firm that receives about 37% of its investment funds from state and local pension plans.  (more)

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Allison Transmission Holdings Inc (NYSE: ALSN)

Allison Transmission Holdings, Inc. and its subsidiaries design, manufacture, and sell commercial and defense automatic transmissions for medium- and heavy-duty commercial vehicles, and medium- and heavy-tactical U.S. defense vehicles. It offers transmissions for various applications, including distribution, refuse, construction, fire, and emergency on-highway trucks; school, transit, and hybrid-transit buses; motor homes; energy and mining off-highway vehicles and equipment; and wheeled and tracked defense vehicles. The company offers 13 transmission product lines with approximately 100 different product models. It markets its transmissions under Allison Transmission brand name and remanufactured transmissions under ReTran brand name.
To review Allison’s stock, please take a look at the 1-year chart of ALSN (Allison Transmission Holdings, Inc.) below with my added notations:
1-year chart of ALSN (Allison Transmission Holdings, Inc.)
ALSN has been trading sideways for the last 3 or 4 months. Over that period of time the stock has formed a clear resistance level at $31 (blue). In addition, the stock has also created a strong level of support at $28.50 (green). At some point the stock will have to break one of the two levels the rectangle pattern has created.

The Tale of the Tape: ALSN has clear levels of support ($28.50) and resistance ($31). The possible long positions on the stock would be either on a pullback to $28.50, or on a breakout above $31. The ideal short opportunity would be on a break below $28.50.
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Monday, May 19, 2014

This Low-Risk Trade Could Generate Up to 700% Returns

By Frank Curzio, editor, Phase 1 Investor

Uranium prices are in freefall.
As regular Growth Store Wire readers know, uranium – the fuel used in nuclear power stations – collapsed in 2011. It has since been in a steady downtrend.
And so far this year, the radioactive metal has fallen hard. It's down 16% since the start of 2014. For comparison, gold prices are up 8% and the S&P 500 Index is up 2% during the same time frame.
But it appears the bottom in uranium prices is finally here. And the recent pullback gives us the chance to buy one stock with triple-digit upside and limited downside risk for cheap today.  (more)
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Arch Crawford – May You Live In Interesting Times

from Financial Survival Network
From Arch Crawford’s Latest Crawford’s Perspectives, “May you live in interesting times!” This quote is considered a curse among the ancient Chinese. There is certainly enough of the unusual occurring around our planet to keep our news sources on their toes, although it seems that much is being let slip by, and that news folk are focusing on weird drivel and emotional quackery and neglecting issues of much greater import, involving changes in our way of life. In depth analysis of political and economic conditions are relegated to back pages or ignored altogether while the best work is being presented online by those who are considered unorthodox (and that’s the kindest thing said about them!) It is more and more apparent that the orthodox sources of information have devolved into propagandists who shovel useless or twisted information into minds of the bored, un-analytic, unaware and unawake masses.
Click Here to Listen to the Audio
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A Fortune Will Be Made in this Sector – Marin Katusa Interview

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DaVita HealthCare Partners Inc (NYSE: DVA)

DaVita HealthCare Partners Inc. provides kidney dialysis services for patients suffering from chronic kidney failure or end stage renal disease. It operates kidney dialysis centers and provides related lab services primarily in outpatient dialysis centers and in contracted hospitals. The company offers outpatient, hospital inpatient, and home-based hemodialysis services; owns clinical laboratories that provide routine laboratory tests for dialysis and other physician-prescribed laboratory tests for ESRD patients; and management and administrative services to outpatient dialysis centers. In addition, the company offers DaVita Rx, a pharmacy that provides oral medications to patients with ESRD; disease management services; vascular access services; ESRD clinical research programs; physician services; and direct primary care services. As of March 31, 2014, it operated 2,173 outpatient dialysis centers, including 2,098 centers located in the United States; and 75 centers located in 10 countries outside the United States.
To review DaVita’s stock, please take a look at the 1-year chart of DVA (DaVita Healthcare Partners, Inc.) below with my added notations:
1-year chart of DVA (DaVita Healthcare Partners, Inc.)
DVA has been trading sideways for the last 2 months. Over that period of time the stock has formed a decent resistance level at $70 (red). In addition, the stock has also created a level of support at $67 (blue). At some point the stock will have to break one of the two levels the rectangle pattern has created.

The Tale of the Tape: DVA has clear levels of support ($70) and resistance ($67). The possible long positions on the stock would be either on a pullback to $67, or on a breakout above $70. The ideal short opportunity would be on a break below $67.
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US Weekly Economic Calendar

time (et) report period Actual forecast previous
12:20 pm Fed Presidents Fisher & Williams speak        
Tuesday, MAY 20
12:30 pm Philly Fed President Plosser speaks        
1 pm New York Fed President Dudley on outlook        
11 am Yellen gives commencement speech        
1:30 pm Minnesota Fed President Kocherlakota speaks        
2 pm FOMC minutes  
Thursday, May 22
8:30 am Jobless claims 5/17   315,000 297,000
9:45 am Markit flash PMI April   -- 55.4
10 am Existing home sales April   4.66mln 4.59 mln
10 am Leading indicators April   -- 0.8
10 am New home sales April   430,000 384,000
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Saturday, May 17, 2014

We’re Headed For An Apocalypse – A Financial Armageddon / May 16, 2014
Today an outspoken hedge fund manager out of Hong Kong warned King World News that the world is headed for an “apocalypse,” or what he called a “financial Armageddon.”  William Kaye, who 25 years ago worked for Goldman Sachs in mergers and acquisitionsalso predicted this disaster will be far worse than anything the world witnessed in the Great Depression of the 1930s.
Kaye:  “When we revert at some point, which is the stated objective of the Fed, to a more normal economy, where banks lend and businesses look to expand and grow their top line, and the labor force participation rate does start to meaningfully decline, in that scenario we potentially set off a process that results in financial Armageddon….
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Gold Miners are Once Again Oversold

The last PMs sector update I had on the blog was all the way back in early April of this year. In the article, I discussed Gold’s outperformance in Q1 of 2014 and the large number of bullish contracts that have built up, as hedge funds started herding with expectation of even higher prices (something that I disagreed with).
I do not usually do prices targets, but I did state that Gold could drop lower in coming months and quarters. Whether this happens before the bear market ends remains to be seen, but one thing is now certain – PMs selling pressure has eased… for now.
Chart 1: US equities are at record while PMs sector is near 3 year lows
PMs vs US Equities
Source: Short Side of Long
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Harry Dent -- The Fake Casino Economy Bubble Is About To Burst: Financial Expert Predicts

On this Wednesday, May 14 edition of the Alex Jones Show, Alex breaks down the latest Obama scandal after thousands of immigrant murderers, rapists, kidnappers and other convicts were released onto the streets of America. Rep. Lamar Smith (R-Tx.) said it would be considered "the worst prison break in American history, except it was sanctioned by the president and perpetrated by our own immigration officials." Joining today's show is economic forecaster and author Harry Dent on what people can do to protect themselves from a future economic collapse. Also joining the show are reporters David Knight and SSG Joe Biggs, who are on the scene in Virginia outside Fort A.P. Hill where the U.S. Army built a fake city, including a school and a Baptist church, to practice military occupation.
Harry Dent of HS Dent Investment Management explains why he predicts a market crash in the third quarter of the year and that the U.S. is headed towards bankruptcy. Stock Market.. an aging Bull Market? Real Estate Party Over? Invest In Gold? Europe Crash Impact? The Government Has To Fail... Survive and Prosper in 2013 with Harry Dent. Please share this article

Six Investment Lessons from Six Billionaires

If you're thinking long term, it's not all about "stock picks"...
I recently attended the Stansberry & Associates Spring Editors Conference in Nassau, Bahamas. Every year, we come together to present our best ideas and hear from a few of our best contacts and industry insiders.
We threw around a lot of specific opportunities for making money... But those weren't necessarily the most valuable ideas we discussed.
After highlighting a handful of his top stocks, for example, one money manager (who asked to remain anonymous) started talking about the billionaires he has worked with in his career... and what he learned from them.
If you can take these ideas to heart, his list will be more useful than a hundred winning stock recommendations. Here it is...(more)
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The Real Purpose of the SEC: Porter Stansberry

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Martin Armstrong: Geopolitical Problems, Flight to Safety Will Drive U.S. Stock Market Higher

The always popular and controversial Martin Armstrong, creator of the widely cited Economic Confidence Model, gave some interesting predictions for the market along with his thoughts on Putin and Russia in a recent Financial Sense Newshour interview. Here are some excerpts:
FSN: Martin, you have a wide following with investors and host large conferences around the globe. What are you telling investors right now?
“Well, I think the best thing to do is clearly stay in the United States right now. Get out of any emerging markets because what you are going to have is: China is rattling its sabers against Japan and South East Asia; you have all kinds of turmoil in Eastern Europe; and I think you're going to probably see that start to pick up quite sharply after September. So you don't want to be involved in those types of assets. I would stay home clearly.”  (more)
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The Euro Currency: Buy Sell or Hold? ProShares UltraShort Euro ETF (EUO), CurrencyShares Euro Trust (FXE)

Longtime readers will know that I recommended shorting the euro as the financial crisis enveloped the world.

Well, today another crisis is looming... one that could be even more devastating for the currency than the banking crisis.

You see, the eurozone faces a ton of issues that it can't seem to escape. Including...

  • Massive structural issues with an aging population in half of its countries.
  • A social welfare system in places like France which encourages idleness.
  • Massive immigration liabilities, thanks to loose borders.
  • Out-of-control taxation, which penalizes consumption.
  • Financial basket cases like Greece, Spain, Portugal and Italy.
  • Unemployment numbers that make the United States look outstanding.
  • And a currency that's overvalued by almost every measure of purchasing power parity.
To top it off, the eurozone is fiercely nationalistic, which prohibits competition that would allow for lower prices.

Again, the easiest solution to these problems - the answer that politicians will always embrace first - is to push for even lower rates... maybe even negative interest rates, which has been suggested. (Negative rates occur when you have to pay the bank to keep your money on deposit.)

By flooding the market with more money, the value of the euro will decrease, causing inflation along with export growth.

There's no question that the euro is headed in that direction. Indeed, the euro's decline is inevitable, and a fall of 20% in the next 12 to 18 months isn't out of the question.

The good news is, there are two simple ways to profit as the euro declines...

Euro Play #1: ProShares UltraShort Euro ETF (EUO). This ETF allows you to capture twice the daily gains of the euro versus the U.S. dollar. Keep in mind that these ultra ETFs reset daily, and they don't produce cumulative gains.

Euro Play #2: CurrencyShares Euro Trust (FXE). You can also short the CurrencyShares Euro Trust by using put options, which can go out as far as two years. This limits your liability to what you have invested in the option and allows you to use strike prices as low as 100 (1 to 1) as far out as January 2016.

Bottom line: The eurozone is in trouble. Its economies can't grow and it's running out of options. Shrinking the value of its currency is the only choice left.
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Friday, May 16, 2014

3 Reasons to Bet Big on Wheat :Teucrium Wheat Fund (NYSEARCA: WEAT)

In a previous article, I discussed why beef prices are elevated and will remain so through at least next year.
And as it turns out, we’re entering a new age of higher prices for many agricultural commodities.
Around the globe, a perfect storm of events has begun to push the price of wheat higher (north of $7 per bushel).  (more)

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