posted by Peter Greene
10 Sunday Reads
1 day ago
Tuesday, June 30, 2009
ISM Chig. and 1 day S&P returns
This chart represents 1d S&P returns on release day for the ISM-Chicago figure. Returns are relatively normal during longer periods of expansion/contraction. But during periods of uncertainty, such as now, returns are volatile on the day of release and tougher to predict. Its sensitivity to Midwest auto manufacturing cycles is likely the current issue to decipher.
Monday, June 29, 2009
Firm's Oil comments
Crude Oil Weekly Report
Oil was a flat line as the market got pulled in different directions on a confusing mix of market fundamentals. Once again the Chinese are calling for a global currency so they can loosen their dependence on the dollar and talk of more big purchases of oil yet at the same time we have Bank of China Governor Zhou Xiaochuan playing down dollar worries by saying that China’s foreign exchange reserve policy is stable. That kind of talk may give the dollar a boost but the other key question for the oil market is whether or not the Chinese are going to continue their recent strong buying in oil.
Well the answer to that question is probably yes. Over the weekend it was reported that China plans to increase strategic crude oil reserves by 60 percent to 270 million barrels during the next five years by the Nikkei English News citing an unidentified official from China’s National Energy Administration. According to the report China will spend 30 billion yuan ($4.39 billion) for stockpiling facilities with a capacity to hold 169 million barrels. China Petrochemical Corp., China National Petroleum Corp. and other companies will construct and use the storage sites. If China continues to strengthen its reserve then oil will be bought on pullbacks. This should help provide some long term support.
Technicals: Because this is our initial piece on Oil, we decided to show a broader view of the USO (United States Oil Fund, LP) – our proxy ETF for the general crude contract. For the most part, the chart above represents a huge rounding type bottom. Notice the heavy volume at the trough – this is showing the type of volatile activity where money moves from weak hands to strong hands. This is most likely representative of oil bulls finally giving up after buying at much higher prices and new investors popping in feeling that oil was undervalued. Over short term, USO may linger but should eventually retest the $40 region and eclipse that to target the $55/$60 region over the more intermediate term.
posted by Peter Greene
Oil was a flat line as the market got pulled in different directions on a confusing mix of market fundamentals. Once again the Chinese are calling for a global currency so they can loosen their dependence on the dollar and talk of more big purchases of oil yet at the same time we have Bank of China Governor Zhou Xiaochuan playing down dollar worries by saying that China’s foreign exchange reserve policy is stable. That kind of talk may give the dollar a boost but the other key question for the oil market is whether or not the Chinese are going to continue their recent strong buying in oil.
Well the answer to that question is probably yes. Over the weekend it was reported that China plans to increase strategic crude oil reserves by 60 percent to 270 million barrels during the next five years by the Nikkei English News citing an unidentified official from China’s National Energy Administration. According to the report China will spend 30 billion yuan ($4.39 billion) for stockpiling facilities with a capacity to hold 169 million barrels. China Petrochemical Corp., China National Petroleum Corp. and other companies will construct and use the storage sites. If China continues to strengthen its reserve then oil will be bought on pullbacks. This should help provide some long term support.
Technicals: Because this is our initial piece on Oil, we decided to show a broader view of the USO (United States Oil Fund, LP) – our proxy ETF for the general crude contract. For the most part, the chart above represents a huge rounding type bottom. Notice the heavy volume at the trough – this is showing the type of volatile activity where money moves from weak hands to strong hands. This is most likely representative of oil bulls finally giving up after buying at much higher prices and new investors popping in feeling that oil was undervalued. Over short term, USO may linger but should eventually retest the $40 region and eclipse that to target the $55/$60 region over the more intermediate term.
posted by Peter Greene
Madoff to Jail
Bernie had no friends, no character witnesses, nobody no family . With that the judge gave him the maximum 150 years....
Still can't believe this guy is still lying and not helping anything in the investigation...This guy is the lowest piece of scum ever.
posted by Peter Greene
Still can't believe this guy is still lying and not helping anything in the investigation...This guy is the lowest piece of scum ever.
posted by Peter Greene
Firm's S&P note
This week’s trading on the S&P 500 should tell us a lot about the market. The questions likely answered this week are the following: Is this just a pause that refreshes and prices work higher or are we entering into a corrective phase commensurate with the typical seasonal summer weakness ?
As seen in the attached note the market is equally conflicted with this idea as well as the S&P 500 has been fairly directionless since early May oscillating a few percentage points above and below the 920 level. To gain some direction (up or down) the index needs to either break above 923 or below 875 (key intermediate term support).
Sentiment remains the markets friend as most sentiment measures suggest that investors have not endorsed the current rally.
posted by Peter Greene
As seen in the attached note the market is equally conflicted with this idea as well as the S&P 500 has been fairly directionless since early May oscillating a few percentage points above and below the 920 level. To gain some direction (up or down) the index needs to either break above 923 or below 875 (key intermediate term support).
Sentiment remains the markets friend as most sentiment measures suggest that investors have not endorsed the current rally.
posted by Peter Greene
Firm's Gold Comments
June 29, 2009
Gold Market Weekly Report
Last week, spot gold closed at $939.60 per ounce up $5.55 or 0.59 percent. Gold equities, as measured by the XAU Gold & Silver Index (11) rose by 1.52 percent for the week. The U.S. Trade-Weighted Dollar Index (12) fell by 0.54 percent.
Salient Research Points:
• Gold’s investment appeal resurfaced as the dollar came under renewed pressure after China’s central bank reiterated a call to lessen the dollar's role as the world's currency. The European Central Bank’s liquidity injection of 442 billion euros pushed money market rates and Libor to record lows. This marked the first week in four that gold prices recorded a gain.
• Contrary to market expectations, many analysts believe the Federal Reserve is unlikely to begin rate normalization in 2009 because of a negative output gap and tight levels of credit. RGE analysts said that in order to tame rising Treasury yields, the Federal Open Market Committee may later expand quantitative easing.
The chart at right shows what looks to be an ascending triangle forming in the GLD (streetTRACKS Gold Trust Shares). It has successfully held the lower line at the 92.00 region and, with continued dollar weakness, will likely retest the top trendline near 96-97 area. A clear break there will obviously send the metal to new highs likely snapping the previous peaks at 98.99 and 100.44 with ease. Using a pattern price projection, the 112-115 region should be attainable.
posted by Peter Greene
Friday, June 26, 2009
6/26/09 ... Resilient, resilient, resilient ...
What can we say about this tape other than what our title says, Resilient, resilient, resilient ...
Why do we say this ? Well one only has to look at the internals yesterday where the NASDAQ scored an up to down volume ratio of 8.24:1 with over 4 stocks (4.22) advancing for every on that declined. Not to be out down the NYSE scored ratio's of 7.50 to 1 on up to down volume and also had over 4 stocks (4.18) advance for every on that declined. with ratio's like that it is hard to call the recent pullback anything other than that.
Tech remains the most attractive area of the market as its issues have the largest bases (ie. floors) from which to advance off of. Within tech we are seeing a shift towards the largest cap names that have been out of favor for quite some time (ie. CSCO, ORCL, DELL, QCOM, etc … etc…)
As long as internals remain like this it is hard to not honor the uptrend we are still in off the lows.
Several names with bullish set ups (ie. big bases) within the NASDAQ 100 even beyond the names mentioned above are HSIC, ISRG, QCOM URBN and SRCL.
posted by Peter Greene
Why do we say this ? Well one only has to look at the internals yesterday where the NASDAQ scored an up to down volume ratio of 8.24:1 with over 4 stocks (4.22) advancing for every on that declined. Not to be out down the NYSE scored ratio's of 7.50 to 1 on up to down volume and also had over 4 stocks (4.18) advance for every on that declined. with ratio's like that it is hard to call the recent pullback anything other than that.
Tech remains the most attractive area of the market as its issues have the largest bases (ie. floors) from which to advance off of. Within tech we are seeing a shift towards the largest cap names that have been out of favor for quite some time (ie. CSCO, ORCL, DELL, QCOM, etc … etc…)
As long as internals remain like this it is hard to not honor the uptrend we are still in off the lows.
Several names with bullish set ups (ie. big bases) within the NASDAQ 100 even beyond the names mentioned above are HSIC, ISRG, QCOM URBN and SRCL.
posted by Peter Greene
Tuesday, June 23, 2009
S&P Morning note from the firm
As seen in the attached research note the S&P 500 ran into a significant downtrend line near 950 and has subsequently turned down. This area also represented the January 2009 peak before the index legged down to its’ lows. Given the S&P 500 had to rally almost 44 % before it hit this down trend it is only logical the index would stall here.
We would expect sideways and downward price movement with periodic minor rallies throughout the remainder of the summer, however we think for a while 950 will be the high price on the index, thus more defensive postures (ie. such as buying into corrections and selling the recovery bounces) and strategic trading is likely to make more sense than buying and being patient.
Additionally and as we mentioned yesterday as we enter the mid to latter summer seasonality trends also tend to become less bullish as the summer rally gets replaced by the summer doldrums. So the preponderance of evidence suggests continued softening is likely to occur for a while.
Only taking out the aforementioned resistance/downtrend line near 950 would change the picture from cautious to bullish.
posted by Peter Greene
We would expect sideways and downward price movement with periodic minor rallies throughout the remainder of the summer, however we think for a while 950 will be the high price on the index, thus more defensive postures (ie. such as buying into corrections and selling the recovery bounces) and strategic trading is likely to make more sense than buying and being patient.
Additionally and as we mentioned yesterday as we enter the mid to latter summer seasonality trends also tend to become less bullish as the summer rally gets replaced by the summer doldrums. So the preponderance of evidence suggests continued softening is likely to occur for a while.
Only taking out the aforementioned resistance/downtrend line near 950 would change the picture from cautious to bullish.
posted by Peter Greene
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