Monday, August 18, 2014

Technician Gary Dorsch: Recent Pullback a Buying Opportunity – S&P 500 Should Hit or Exceed Previous Highs

Also, Ryan Puplava, Erik Townsend and Rob Bernard

Jim welcomes back Gary Dorsch, editor of Global Money Trends at Gary notes that we’ve seen a pull-back in the market recently, not a correction. This is the third pull-back so far this year. He believes this is a buying opportunity and the S&P will return to old highs, although he is cautious longer term.
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Casey Research: Seven reasons to buy silver today

I remember my first drug high.
No, it wasn’t from a shady deal made with a seedy character in a bad part of town. I was in the hospital, recovering from surgery, and while I wasn’t in a lot of pain, the nurse suggested something to help me sleep better. I didn’t really think I needed it—but within seconds of that needle puncturing my skin, I WAS IN HEAVEN.
The euphoria that struck my brain was indescribable. The fluid coursing through my veins was so powerful I’ve never forgotten it. I can easily see why people get hooked on drugs. (more)

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Nuance Communications (NUAN): 50% Upside in This New Internet "Gold Rush" Favorite

If you haven't invested in one of the biggest trends in technology yet, you have another chance today.
In January, I told you about the new Internet "gold rush." Soon, just about every device you use – including your car, appliances, television, and thermostat – will be connected to the Internet. That means you will be able to control everything through your mobile phone, tablet, or PC.
Networking giant Cisco calls the "connectivity" of these devices and the networks that support them the "Internet of Everything" (IoE). The company believes IoE could be a $19 trillion market. That's about twice the size of the entire U.S. housing market. It's an enormous opportunity. (more)

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COMEX Swap Dealers Remain Hugely Short Silver Futures

HOUSTON –  Looking at the legacy COT report for silver futures, and tracking the traders the CFTC calls “commercial” – including the Producer/Merchants and Swap Dealers combined into a single category (with a total of 45 traders reporting commercial long contracts and 54 reporting commercial shorts) – we can see in the data table below that on July 8 silver closed at $21.02.  On July 15 the silver LCNS (large commercial net short position) peaked at 58,696 contracts net short.
Since then silver has declined a net $1.12 or 5.3% (from $21.02 to $19.90 as measured on Tuesdays) while the commercials have covered or offset 14,970 lots or 25.5% of their collective LCNS.
Silver -5.3%,
LCNS -25.5%,
4 reporting weeks. 
Data table LCNS Silver, combined commercials positioning.
20140815 Silver LCNS data table
Here’s what it looks like in our more familiar graph form.
20140815 Silver LCNS Graph
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Corn: a Larger Reversal or Another Trap

Even if we don’t trade commodities, it’s helpful to learn educational lessons and plan trades as they develop from interesting patterns.
Corn is forming a great potential Reversal Example, but we need to monitor it in real time to determine whether this time will be different, or whether we’ll just see a repeat pattern of the similar failed trend reversal signal from June 2014.
Here’s the current Reversal Pattern and the prior failed pattern in a strong downtrend:

I’m showing the Teucrium Commodity Trust Corn Fund – an ETF – but you could also trade or monitor the actual corn futures contract (@C).
Let’s focus on two prior “Rounded Reversal with Divergence” patterns before discussing the current situation.

Rounded Reversal #1 (Success)

From April to May of 2014, Corn shares formed what I like to call a “Rounded Reversal with Divergences” pattern into the $35.50 per share (ETF) level.
Note the red line showing divergences in the Momentum Oscillator as price formed an ‘arc’ pattern or Rounded Reversal Dome.
Price triggered a liquidate/sell-short signal on the break beneath the rising 50 day EMA at the $34.00 per share level and a reversal was confirmed with sharp downside price action.

Rounded Reversal #2 (Failure)

A possible support play and similar “Rounded Reversal with Divergences” developed through June, but price NEVER broke above the 20 day (or 50 day) EMA and the pattern FAILED to generate a reversal buy (breakout) signal and thus the sharp downtrend continued.
In fact,  note how price failed (traded down against) the falling 20 day EMA.
The large red sell candle of June 30th set in motion another liquidation or sell-short breakdown trade.
Price collapsed from $30.00 to the $25.00 per share level where we’re planning another potential “Rounded Reversal with Divergences” price pattern.

Rounded Reversal #3 (In Motion)

This time, we are seeing initial strength from the break above the falling 20 day EMA above $26.50.
Follow the chart to monitor additional upside action through “open air” which simply targets the falling 50 day EMA near $28.00 per share.
A firm breakthrough above $28.00 per share opens another bullish price pathway toward $30.00.
Otherwise, any re-break under the “arc” trendline (like June 30th) sets up another liquidation move – as would a trigger-break to new lows under $25.50.
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US Weekly Economic Calendar

time (et) report period Actual CONSENSUS
10 am Home builders' index Aug.
-- 53
8:30 am Consumer price index July   0.1% 0.3%
8:30 am Core CPI July   0.2% 0.1%
8:30 am Housing starts July   970,000 893,000
2 pm FOMC minutes 7/29-30      
8:30 am Weekly jobless claims Aug. 16
300,000 311,000
9:45 am Markit flash PMI Aug.   -- 55.8
10 am Philly Fed Aug.   21.0 23.9
10 am Existing home sales July   5.00 mln 5.04 mln
10 am Leading indicators July   -- 0.3%
  None scheduled        
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