Monday, October 13, 2014

Plenty Of Reasons To Explain Recent Selling / By Poly / October 12, 2014
This is an excerpt from this weekend’s premium update from the The Financial Tap, which is dedicated to helping people learn to grow into successful investors by providing cycle research on multiple markets delivered twice weekly. Now offering monthly & quarterly subscriptions with 30 day refund. Promo code ZEN saves 10%.
The equity markets are finally seeing action that has even the most hardened bulls running scared. In the past, I’ve been quick to dismiss selling periods – Cycle Lows – as natural regression-to-the-mean events. In a bull market, an oscillating Cycle pattern of two steps forward and one step back is what drives an asset higher. But this time is different…two steps back is completely out of character. So much so, that I now believe that the 3.5 years bull market is now in serious trouble.
If we were to look for reasons to explain the recent selling, there are plenty to be had. The most likely is not a specific piece of news or single data point, but that the collective herd of market participants is fickle and can be easily spooked. The current bull market has broken plenty of records, including the length of time – more than 3 years – since a 10% correction. This has resulted in double-digit market gains for consecutive years, and a near vertical rise over a sustained period of time. Against the backdrop of a soft world economy, this performance is nothing short of remarkable.

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James Rickards-Next Crash Exponentially Larger than Any Financial Panic in History

Greg Hunter, Published on Oct 12, 2014
James Rickards, best-selling author of “The Death of Money,” says a huge financial panic is a mathematical certainty. Rickards explains, “It is a mathematical certainty, but I can take it further . . . what you don’t hear is this will be exponentially larger than any financial panic in the past. . . . The next time, the Fed is going to be in trouble. They are already insolvent on a mark- to-market basis. Each bailout gets much bigger than the one before. The Fed has a 10 foot seawall, and they are going to get hit with a 50 foot tsunami.”

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Saudi Arabia's "Oil-Weapon" Hits Europe / by Tyler Durden / on 10/12/2014 17:02
We first exposed the “secret” US-Saudi deal in September which led to the inevitable bombing of Syria. We then progressed to explain the quid pro quo of the deal in lower oil prices (benefiting US consumers into an election and crushing Russian revenues). In today’s Wall Street Journal we get the final piece of the puzzle as it is clear that what Saudi Arabia loses in ‘price’ it will make up in ‘volume’ as The Kingdon is taking the unusual step of asking buyers to commit to maximum shipments if they want to get its crude. Simply put, “they are threatening [European] buyers” to discontinue sales if they don’t agree with the full fixed deliveries. The ‘oil weapon’ grows stronger…
As The Wall Street Journal explains,
 Days after slashing prices in Asia, Saudi Arabia is now making an aggressive push in the European oil market, traders say.
The kingdom is taking the unusual step of asking buyers to commit to maximum shipments if they want to get its crude.
“The Saudi push is not just in Asia. It’s a global phenomenon,” one oil trader said. “They areusing very aggressive tactics” in Europe too, the trader added.
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Gilead Sciences, Inc. (NASDAQ: GILD)

Gilead Sciences, Inc., a biopharmaceutical company, discovers, develops, and commercializes medicines for the treatment of life threatening diseases in North America, South America, Europe, and the Asia-Pacific. The company’s products include Stribild, Complera/Eviplera, Atripla, Truvada, Viread, Emtriva, Tybost, and Vitekta for the treatment of HIV infection in adults; and Sovaldi, Viread, and Hepsera products for the treatment of liver disease. It also offers Letairis, an endothelin receptor antagonist for the treatment of pulmonary arterial hypertension; Ranexa, a tablet used for the treatment of chronic angina; Lexiscan/Rapiscan injection for use as a pharmacologic stress agent in radionuclide myocardial perfusion imaging; Cayston, an inhaled antibiotic for the treatment of respiratory systems in cystic fibrosis patients; and Tamiflu, an oral antiviral capsule for the treatment and prevention of influenza A and B.
Take a look at the 1-year chart of Gilead (Nasdaq: GILD) below with my added notations:
1-year chart of Gilead (Nasdaq: GILD)
GILD has been trending consistently higher since April, and during that time the stock has formed a clear trendline of support (blue). In addition, the stock has recently created at 52-week high resistance level at $110 (red). At some point GILD is going to have to break one of those two levels, and yesterday the stock barely held support after breaching it intraday.

The Tale of the Tape: GILD is trading between a trendline of support and a 52-week high resistance. A long trade could be made at the trendline, with a stop placed below that level, or on a break above $110. A short trade could be made on a break below the trendline.
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US Weekly Economic Calendar

time (et) report period Actual forecast previous
  Columbus Day
None scheduled
2 pm Federal budget Sept.   -- $75 bln
8:30 am Retail sales Sept.   -0.2% 0.6%
8:30 am Retail sales ex-autos Sept.   0.4% 0.3%
8:30 am Producer price index Sept.   0.1% 0.0%
8:30 am Empire state index Oct.   21.0 27.5
10 am Business inventories Aug.   0.4% 0.4%
2 pm Beige Book        
8:30 am Weekly jobless claims Oct. 11
290,000 287,000
9:15 am Industrial production Sept.   0.4% -0.1%
9:15 am Capacity utilization Sept.   79.0% 78.8%
10 am Home builders' index Oct.   59 59
10 am Philly Fed Oct.   19.2 22.5
8:30 am Housing starts Sept.   1.015 mln 956,000
9:55 am Consumer sentiment Oct.   83.5 84.6
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