New Moon Top Holding…Barely

A little chart potpourri tonight. 5 charts that stood out to me.

13653 is the high of the day on the New Moon last Friday. So far that top is holding but with a quiet consolidation during an options expiration week, the bulls may have a crack at that resistance tomorrow. Futures are mildly up as I type this and this week’s pullback looks textbook with the big money holding their positions. If we break through that level with force we could be in for a nice rally tomorrow or next week.

If I was bearish I’d point to this massive bearish ascending wedge on Nasdaq. But that was only if I was bearish. Pay no attention to the man behind the curtain…whose name is Benjamin.

Horrid action on the transports today…but like I said on twitter…this is so last century. Does anybody really pay attention to this index anymore?

Pick a bearish pattern, and then stick a fork in bonds.

• bearish head and shoulders with a break and a retest to the neckline – money favors lows
• down-trending channel which is a little less ominous, but $125 should be a top if that’s it.

As above, so below.

The Single Best Way to Make Money in Natural Resources

Where are the best opportunities right now in natural resources?

The obvious answer is the companies that are digging the stuff out of the ground.

But to find tomorrow's next big winners, you also have to look at what's hated.

For example, no other natural resource has been shunned during the past few years quite like natural gas. Prices have rebounded sharply since April, but that's nothing compared with where prices were before.

Shares of high-quality producers have barely responded -- but that type of disconnect is always resolved in time.

Most industry execs say natural gas will need to hit at least $5 per thousand cubic feet (Mcf) before they start revamping their budgets and directing more drilling rigs and resources back into gas fields such as the Haynesville Shale.

So we've got a long way to go before the industry turns up the production faucet.

But if gas reaches $5 per Mcf, then cash flows should explode for low-cost producers like Ultra Petroleum (NYSE: UPL). The company can turn a profit with gas as low as $2.88 per Mcf -- and it has 5 trillion cubic feet of reserves waiting to be sold.  (more)

Nat Gas Consolidating Ahead of Another Upleg

Increasingly, nearby natural gas futures appear to be consolidating their April-July gains (1.902 to 3.277) between 2.60/70 on the low side and 3.00/20 on the high side.  My work considers this to be a sideways digestion area in preparation for the next recovery upleg that projects to 3.40/50 and then to 3.90-4.00.
That said, natural gas must hurdle and sustain above its most recent rally peak at 3.070 in order to unleash the buying power to propel prices to the above-mentioned targets.

US Weekly Economic Calendar

time (et)	report	period	Actual	forecast	previous
MONDAY, SEPT. 24
	None scheduled
TUESDAY, SEPT. 25
9 am	Case-Shiller home price index	July		--	2.3%
10 am	Consumer confidence index	Sept.		65.0	60.6
10 am	FHFA home price index	July		--	0.7%
WEDNESDAY, SEPT. 26
10 am	New  home sales	Aug.		380,000	372,000
THURSDAY, SEPT. 27
8:30 am	Weekly jobless claims	9-22		375,000	382,000
8:30 am	Durable goods orders	Aug.		-5.3%	4.1%
8:30 am	GDP	Q2		1.7%	1.7%
10 am	Pending home sales index	Aug.		--	2.4%
FRIDAY, SEPT. 28
8:30 am	Personal income	Aug.		0.2%	0.3%
8:30 am	Consumer spending	Aug.		0.5%	0.4%
8:30 am	Core PCE price index	Aug.		0.1%	0.0%
9:45 am	Chicago PMI	Sept.		--	53.0
9:55 am	UMich consumer sentiment index	Sept.		79.5	79.2

Gold To Advance Another $700 – $1,200 Within Months

kingworldnews.com / September 21, 2012
Today 25 year veteran Caesar Bryan surprised King World News when he talked about gold advancing $700 to $1,200 in a matter of months.  Bryan stated, “Just looking at gold relative to the supply of money, gold may advance to $2,500 to $3,000 in the first few months of next year.”  Bryan, from Gabelli & Company, also discussed the nature of the current gold advance, silver, and what to expect going forward.

Here is what Caesar had to say:  “Since we’ve had the news of further easing in the US and Europe, gold has moved up in a sort of ‘step’ fashion.  It’s quiet for a few days, and then another move higher takes place.  Now we seem to be set for another ‘step’ move higher.”

Caesar Bryan continues:

“What that says is that there is very strong underlying demand for gold because the gold price hasn’t weakened in the face of these upward moves over the last month or so.  When you look at a chart you could claim that it’s somewhat overbought because we’ve had the move from the $1,600 area to the high $1,700s without much of a pause.

But the long-term opportunity is very much on the long side of the market.  Gold is going to go higher….
READ MORE

Seasonally Speaking, Next Three Weeks are Typically The Weakest of the Year

The Markets
Markets traded marginally higher on Wednesday, driven primarily by Consumer Discretionary stocks following a much better than expected report on Existing Home Sales. Homebuilders such as Pulte, Lennar, and Toll Brother pushed strongly higher, attacking multi-year highs that have been established over the past few trading sessions. Increasingly the housing industry is showing signs of recovering with Existing Sales hitting the highest level since early 2010 and back to levels witnessed prior to the 2008/2009 recession. Housing starts are also holding around the highest levels since the recession began. Seasonal tendencies for the home building industry, however, are less than favorable over the next month or so as the summer selling season concludes. Following the month-long “swoon”, the stocks see their best seasonal gains during the fourth quarter of the year as investors begin anticipating the spring building season.

Over the past couple of days markets have seen momentum starting to show signs of decline. Price is stagnating. Seasonally, equity markets are within the weakest three week period of the year, which concludes just past the first week of October. Weakness has also been known to persist throughout October, resulting in an intermediate-term bottom that is often realized just prior to the end of the month. Given this seasonal framework and technicals for a number of asset classes starting to see momentum rolling over, probability is high that a selloff/correction will occur in the weeks ahead, potentially related to earnings caution. FedEx has been a recent prominent company touting weak economic fundamentals and earnings caution. Another transportation stock confirmed what FedEx was saying on Wednesday after the closing bell. Railroad operator Norfolk Southern warned that earnings would trail analyst estimates due to weakness in coal and merchandise shipments. An unrelated company, Adobe, also issued an earnings forecast on Wednesday that also missed analyst estimates. Oracle, a industry titan, will report earnings on Thursday after the market close, a report that is typically a leading indictor of the strength within the technology sector going into the seasonally favouable fourth quarter.  (more)

U.S. meltdowns - History lessons for the euro

In the early 1870s, property prices in Vienna, Berlin and Paris soared on the back of a state-promoted building boom fuelled by easy credit extended against the collateral of unbuilt or unfinished houses.
The crash that followed parallels what has happened more recently and may, with other lessons from U.S. history, provide pointers for the euro zone crisis.

As the property prices soared, Europe's world was turned upside down. Thanks to grain elevators, conveyor belts and huge steamships, American farmers opening up the fertile Midwest were able to export vast quantities of wheat and then processed food.

Grain producers from Russia and central Europe simply could not compete with what came to be known as the American Commercial Invasion.

The crash came in central Europe in May 1873 as the low costs of the new industrial superpower exposed long-held growth assumptions as unrealistic. Continental banks collapsed, prompting British lenders to hold back their capital, unsure who was most exposed to souring mortgages. Interbank rates rocketed. (more)