Thursday, October 9, 2014

Charles Nenner: Scary Deflation on Horizon, Gold Update and Nuclear War

Greg HunterPublished on Oct 7, 2014
Economist Charles Nenner is not bullish on the global economy. Nenner says, “We should have a nice quarter until the end of the year, and next year, we should start weakening again. We had a normal business up move. The problem is the GDP never got up much above 3%. So, now we are going down from 3%, and that is kind of scary because I still see a lot of deflation on the horizon. That is something that is going to be very difficult to fix.” Deflation is debt destruction, and Nenner goes on to say, “It’s the destruction of almost everything. The problem is we owe so much money, and you can only get out of debt by inflating. Deflation will only make it worse. So, I have no clue how we are going to get out of trouble.” Nenner goes on to say, “You are going to get into a downward spiral, which is very hard to get out of.”

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Cree (NASDAQ: CREE) Former Tech Highflyer Looks Like a Screaming Bargain

I'll bet Charles Swoboda would like Wall Street to make up its mind. Over the past few years, the investment community has repeatedly shifted its view of his company, Cree (NASDAQ: CREE).
Four years ago, many were convinced that Cree was on the cusp of explosive growth thanks to its strong position in the LED market. Shares briefly moved above $70 in December 2010. Yet, investors soon soured on the stock after realizing that, while the LED business would indeed be huge, it was not necessarily very profitable. Within a year, shares plunged to just above $20.
Then, a string of good quarters pushed CREE right back up to its prior highs by summer 2013. But once again, shares are in freefall, recently touching a 20-month low.
CREE Stock Chart
To be sure, it was never clear that this stock deserved to trade above $70. As I noted roughly a year ago on our sister site,, "Analysts have been continually forecasting margin gains as Cree more fully utilizes its manufacturing capacity, but so far, that's just not happening."  (more)
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Tempur Sealy International Inc (NYSE: TPX)

Tempur Sealy International, Inc. develops, manufactures, markets, and distributes bedding products in North America and internationally. The company provides mattresses, foundations, adjustable bases, and other products, including pillows and other accessories. It offers its products under the TEMPUR, Tempur-Pedic, Sealy, Sealy Posturepedic, Optimum, and Stearns & Foster brand names. The company sells its products through furniture and bedding retailers, department stores, specialty retailers, and warehouse clubs; e-commerce platforms, company-owned stores, and call centers; and other third party distributors, and hospitality and healthcare customers.
Take a look at the 1-year chart of Sealy (NYSE: TPX) with the added notations:
1-year chart of Sealy (NYSE: TPX)
TPX appears to have formed the double top price pattern (red) over the last 4 months. Double tops are reversal patterns and are as simple as they sound: Rallying up to a point (T), selling off to a support, and then rallying back up again to approximately the same top (T).
As with any price pattern, a confirmation of the pattern is needed. TPX would confirm its pattern by breaking the $54 support (green) that was created by the double top pattern.

The Tale of the Tape: TPX has formed a potential double top. A short trade could be made on a break of the $54 level. Since there is no guarantee of a breakdown, a long trade could be made at $54 if a trader is willing to disregard the pattern.
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Shale Boom Tested as Sub-$90 Oil Threatens U.S. Drillers

The U.S. shale boom is producing record amounts of new oil as demand weakens, pushing prices down toward levels that threaten to reduce future drilling. 

Domestic fields will add an unprecedented 1.1 million barrels a day of output this year and another 963,000 in 2015, raising production to the most since 1970, according to the U.S. Energy Information Administration. The Energy Department's statistical arm forecasts consumption will shrink 0.2 percent to 18.9 million barrels a day this year, the lowest since 2012.

More supply from hydraulic fracturing and horizontal drilling, and less demand, are contributing to the tumble in West Texas Intermediate crude. The U.S. benchmark is down 18 percent since June 20 and fell below $90 a barrel on Oct. 2 for the first time in 17 months. (more)
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Martin Fridson: The Dean of High Yield (AUDIO)

This week, Porter and Country Club Guy interview the "dean of high yield" and Chief Investment Officer of Lehman, Livian, Fridson Advisors LLC, Martin Fridson.

Martin breaks down for listeners one of the greatest ways to make money as an investor...

Find out exactly what is going on in the high-yield markets plus what strategies Martin reveals as most successful.

Plus, Porter asks Martin to share his outlook for the total return on the high-yield index over the next five years...

And there are some headlines that need some classic Porter rants including... Why is "America's Car-Mart" moving their headquarters to New York... You won't want to miss out on Porter's comments...(more)
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Why Volume Matters / by Tyler Durden on 10/07/2014 12:27
 As FBN Securities’ Jeremy Klein notes, daily S&P 500 E-Mini volumes have climbed to an average of roughly 2.1MM contracts over the past week. This could be a problem…
Rising volumes are often associated with market pullbacks
When this metric < 2MM, S&P futures have climbed 496 points; when > 2MM, the E-Minis have dropped 355 points in 2014
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