Bill Cara’s Blog for Aug 15, 2012
CTA Trading Desk Morning Report
[7:00am ET] Good morning.
I was saddened to hear of the passing of mining legend Don McKinnon, a friend I have introduced to many of you in these pages and in person.
The article in The Timmins Times tells his story well, but Michael Barnes who published a paperback in 2006, entitled The Scholarly Prospector – Don McKinnon, described it much more fully with photos. A few of you have an autographed copy of that book.
As you know I was in his son’s office about a month ago and on the phone since. At PDAC in March I met Don and spent quite a bit of time with the family, Don, Stephanie, Gordon and Alexa, as I do every year. Another daughter Donna is a former employee of mine.
I’ve flown in Don’s Beaver floatplane and with him in other planes to mines from Quebec to Colorado. Twenty-five years ago, I financed and took his company public on the Toronto Stock Exchange. I invested in his Canadian Orebodies, a fairly new company which his son Gordon runs. Many years ago, Don bought my old Rolls Royce and gave it to Gordon for use at Western University, telling me “I wouldn’t drive that pimpmobile”.
He saw life that way, with humour, always. He needed it, I figured, because he saw life as a struggle, which could be beaten with hard work. His persistence was renowned.
Don had a million stories that spoke volumes about the man who persevered amid hardship in the bush, always studying in-depth his prey, but succeeding at finding mines like few in history from the Kidd Creek copper mine that a good friend now manages for Xstrata to the three great gold mines at Hemlo, in Northern Ontario.
The one time in my life I thought I was about to die was when we rolled Don’s large eight-seater Caravan totally over in the air as we approached the landing in a farmer’s field they call an airport near Highwater Quebec. We had just cleared the mountain top close to the Jay Peak Resort in Vermont in a severe windshear when the chaos ensued. I’ve never forgotten it.
One of you recently wrote in these pages to thank me for the education he received around the coffee table at PDAC a couple years ago, with Don McKinnon and Rob McEwen together. It’s ironic then that I’m having lunch with Rob today.
Life goes on, but I will definitely miss Don McKinnon. He would be 83 on Saturday.
Good morning, Geoff here.
In recent posts, Bill and I have both noted the “risk-on” strength in the stock market through ratio charts that point towards future strength.
We have also noted the complacency that has accompanied this rally.
As you know, we have been focused on being long stocks for a few months now, so our posture is long with gains. As such, we have to note the road signs pointing towards risk that we may want to avoid. The road signs are definitely mixed at this time.
One of the warning signs is the Volatility Index, $VIX. Here is a 5 year chart of the $VIX compared to the S&P 500. I have noted periods when the $VIX was very low and how MOST of those periods were followed by a decline in the S&P 500 – but not all of them and not right away.
This chart shows the same thing:
However, Sentimentrader.com is not showing extreme optimism in the stock market that often accompanies tops, so the market can continue to lift higher.
It is difficult to ignore the warning signs, but the market continues a low volume levitation act with data pointing to a slowing global economy. Weeks ago, we were saying that QE had to come while most TV pundits were saying that no QE was in the future. It appears that traders have now shifted to our side of the argument as they don’t want to miss out on a liquidity induced rally.
Let’s face it – liquidity lifts all boats, but eventually there are no more buyers and the boats lose buoyancy – the question is; when will that happen?
Have a great trading day!
Here are the 7:00am ET snapshots of the latest equity market trading results for Europe, and futures prices plus 5-minute charts of the futures for S&P 500, 30-year US Treasury Bond, US Dollar index, Gold and Crude Oil.
|Symbol||Name||Last Trade||Change||Related Info|
||3.89 (0.19%)||Components, Chart, More|
||11.60 (0.50%)||Components, Chart, More|
||9.76 (0.28%)||Components, Chart, More|
||33.41 (0.48%)||Components, Chart, More|
||0.79 (0.24%)||Components, Chart, More|
|^OSEAX||OSE All Share||485.44
||0.55 (0.11%)||Components, Chart, More|
||1.97 (0.59%)||Components, Chart, More|
||14.03 (0.22%)||Components, Chart, More|
||28.55 (0.49%)||Components, Chart, More|
||0.70 (0.08%)||Chart, More|
||23.66 (1.62%)||Chart, More|
|GD.AT||Athex Composite Share Price Index||621.77
||1.45 (0.23%)||Chart, More|
The team will check in during the day, reporting in the Discourse when there is a new entry.
Enjoy your day.
Cara 100 Company research notes from brokers
Vad’s Catch of the Day
Kaimu’s Sound Money
Deron’s Daily ETF Analysis
Despite yesterday’s distribution (decline on higher volume) in the Nasdaq Composite Index ($COMPQ), it is positive to note that the large-cap bretheren of that tech-heavy index, the Nasdaq 100 Index ($NDX), still managed to close above the prior resistance (new support) of its week-long consolidation pattern. This is shown below on the 60-minute (hourly) chart of PowerShares QQQ Trust ($QQQ), a popular ETF proxy for the Nasdaq 100 Index:
Going into today’s session, we will be keeping a close eye on whether or not $QQQ manages to hold support of yesterday’s intraday low. If it does, a low-risk swing trading buy entry could be made, with a tight stop just below yesterday’s low. This would provide a positive reward-risk ratio for the setup, as a tight stop could be utilized, with substantial upside IF yesterday’s breakout attempt holds. Note that any such buy entry would be momentum-based and short-term in nature. Conversely, if $QQQ falls below yesterday’s low, we would not be surprised to see a swift return back down to test the lows of the recent sideways trading range of the past week.
The commentary above is an excerpt from The Wagner Daily, our nightly ETF and stock trading newsletter. Subscribers to the full version receive our exact entry and exit prices for swing trading our top ETF and stock picks, access to our market timing system, and technical trading commentary. Signup for your 30-day risk-free membership by clicking here.
Cara on the Metalminers
Cara on the International Markets
CTA Trading Desk Mid-Day Report
CTA Trading Desk Post-Close Report