Jay Taylor: Turning Hard Times Into Good Times

2/28/2012: A Royal Reversal of the American Revolution

Dan Norcini: Silver Shorts Literally Panic, Gold Shorts Now Worried

from King World News:

With silver breaking above the $37 level and gold trading $20 higher, today King World News interviewed legendary Jim Sinclair’s chartist Dan Norcini. Norcini told KWN what we are seeing today is a major breakout in the silver market and panic from the shorts: “Today we are seeing a strong move higher in silver and in gold, but particularly the silver market, which is up over 4%. Once silver took out $35.50 in a strong push, they ran a huge number of stops to the upside. There were a lot of shorts covering, Eric, there was literally a panic among the silver shorts.”

Dan Norcini continues: Read More @ KingWorldNews.com

This Is What Happens To The Stock Market After Rallying 15% In 3 Months

For all the bears crying foul over the current market rally, Bespoke Investment Group has some interesting research: market rallies of 15 percent or more are more often than not followed by greater gains.

Bespoke tallied three-month returns back to the late 1920s and found after a market rally in excess of 15 percent, the following three months were positive 77 percent of the time, averaging a 3.2 percent increase.

The S&P 500 has only run up 15 percent in a three month period 36 times, including the current rapid ascent.

Left, a look at the S&P rallies.

Eric Sprott: Investment Outlook (February 24, 2012)

By Eric Sprott & David Baker

2012 is proving to be the ‘Year of the Central Bank’. It is an exciting celebration of all the wonderful maneuvers central banks can employ to keep the system from falling apart. Western central banks have gone into complete overdrive since last November, convening, colluding and printing their way out of the mess that is the Eurozone. The scale and frequency of their maneuvering seems to increase with every passing week, and speaks to the desperate fragility that continues to define much of the financial system today.

The first major maneuver took place on November 30, 2011, when the world’s G6 central banks (the Federal Reserve, the Bank of England, the Bank of Japan, the European Central Bank [ECB], the Swiss National Bank, and the Bank of Canada) announced “coordinated actions to enhance their capacity to provide liquidity support to the global financial system”.¹ Long story short, in an effort to avert a total collapse in the European banking system, the US Fed agreed to offer unlimitedUS dollar swap agreements with the other central banks. These US dollar swaps allow the other central banks, most notably the ECB, to borrow US dollars from the Federal Reserve and lend them to their respective national banks to meet withdrawals and make debt payments. The best part about these swaps is that they are limitless in scope – meaning that until February 1, 2013, the Federal Reserve is, and will be, prepared to lend as many US dollars as it takes to keep the financial system from imploding. It sounds absolutely great, and the Europeans should be nothing but thankful, except for the tiny little fact that to supply these unlimited US dollars, the Federal Reserve will have to print them out of thin air. (more)

Inflation Protection For Your Portfolio : FXC, TIP, UDN

While the runaway inflation that had previously gripped countries like Zimbabwe and Argentina is not currently at the forefront on the fear list for investors in U.S, but inflation should not be forgotten. It is a silent danger as a result of the additional billions employed in government bailouts.

A combination of currency and inflation-protected ETFs may be able to protect an investor portfolios if the inflation expectations become real.

Bearish on the U.S. Dollar
The PowerShares DB US Dollar Index Bearish (ARCA:UDN) is up 1.48% so far this year. UDN's value increases when the US dollar index is falling. If the US dollar index drops as a result of economic issues, this ETF will provide you with some downside protection.

In Defense of Rising Consumer Prices
The iShares Barclays TIPS Bond Fund (ARCA:TIP) is up about 2.18% in 2012. The TIP fund is linked to a measure of inflation known as the Consumer Price Index (CPI or CPI-U). The CPI measures the prices wage earners, clerical workers or basically 90% of the entire U.S. population pay for a variety of expenses including food, transportation, energy and medical care. With oil prices near $110 per barrel, the increase in fuel prices may cause a jump in inflation, which may cause investors to start buying in anticipation of a fuel cost run up.

Currency Exchange Consideration
The Canadian Dollar has continued to be strong against the US dollar in 2011. As the Canadian dollar has been trading above par. The CurrencyShares Canadian Dollar Trust (NYSE:FXC) has gained around 1.19% so far in 2012. Further weakening in U.S. dollar will have a positive effect on the FXC fund.

Final Thoughts
Rampant inflation in not a certainty, but the ETFs mentioned do offer protection should investors notice that prices are beginning to rise once again.

Chart of the Day - Limited Brands (LTD)

The "Chart of the Day" is Limited Brands (LTD), which showed up on Monday's Barchart "All Time High" list. Limited on Monday posted a new all-time high of $47.03 and closed up 1.30%. TrendSpotter has been Long since Jan 24 at $41.82. In recent news on the stock, Limited on Feb 22 reported Q4 adjusted EPS of $1.50, above the consensus of $1.46. The company also announced a new $500 million share repurchase program. Limited Brands, with a market cap of $13 billion, operates specialty stores in the United States and its brands are sold in company-operated and franchised additional locations worldwide.

Is That A Bell I Hear Ringing?

by Bill Holter, JSMineset.com:

Attached is a chart (www.stockcharts.com) for the HUI index going back 3 years on a weekly basis. I usually do not talk or write about charts because they can and are “painted” to make a picture that the “planners” want us to see. In my opinion, they have painted themselves into a corner where the mining stocks are concerned. So what does this mean to you? It means that IF you have endured and held on to your mining shares and not been scared out, you will FINALLY get paid and get paid BIG! Let me explain.

If you look at the chart, you will see the MACD at the bottom (moving average convergence divergence), these are the two squiggly red and black lines that keep crossing over each other. Whenever the black line crosses over the red line from a high point or low point, it usually tells you the direction of the index for the next couple of months or so. You will notice that the highest crossover point where black crossed red to the downside was back in 2009 (after the ’08 crash). Each successive rally reached a lower height on the MACD’s and the low point crossovers were successively lower. This, while the HUI index is just a little bit higher but has been basically “marking time”. During this period, Gold has outperformed the shares in a huge way. Another way of saying this is that the shares are now more undervalued vs. Gold than they have been over these 3 years. In fact, the shares have only been this undervalued twice since the bull market began, 2001 and 2008.

Read More @ JSMineset.com