Bill Cara’s Blog for Dec 21, 2012

CTA Trading Desk Morning Report

[7:00am ET] Good morning, Geoff here.

Charts:

S&P 500:

ggimage01_122112.png

Gold Daily:

ggimage02_122112.png

Gold Weekly:

ggimage03_122112.png

GDX Daily:

ggimage04_122112.png

I will get more detailed in the weekend report. If you have not e-mailed me yet, please do;

geoffgoetz@caratrading.com

If you received a report last weekend, you will receive one this weekend also, thank you.

Have a great trading day and weekend!


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
^ATX ATX 2,402.52 6:44AM EST Down 9.25 (0.38%) Components, Chart, More
^BFX BEL-20 2,490.80 Dec 20 Down 7.90 (0.32%) Components, Chart, More
^FCHI CAC 40 3,656.25 7:00AM EST Down 10.48 (0.29%) Components, Chart, More
^GDAXI DAX 7,625.43 6:45AM EST Down 46.67 (0.61%) Components, Chart, More
AEX.AS AEX General 343.36 6:45AM EST Down 3.24 (0.93%) Components, Chart, More
^OSEAX OSE All Share 490.44 6:44AM EST Down 1.78 (0.36%) Components, Chart, More
^OMXSPI Stockholm General 342.07 6:44AM EST Down 2.32 (0.67%) Components, Chart, More
^SSMI Swiss Market 6,881.45 6:44AM EST Down 31.34 (0.45%) Components, Chart, More
^FTSE FTSE 100 5,916.23 6:45AM EST Down 42.11 (0.71%) Components, Chart, More
FPXAA.PR PX Index 1,030.00 6:59AM EST Down 3.79 (0.37%) Chart, More
MICEXINDEXCF.ME MICEX Index 1,479.73 7:45AM EST Down 10.24 (0.69%) Chart, More
GD.AT Athex Composite Share Price Index 888.69 6:43AM EST Up 7.99 (0.91%) Chart, More

http://finviz.com/futures.ashx

http://finviz.com/fut_chart.ashx?p=m5&t=ES

http://finviz.com/fut_chart.ashx?p=m5&t=ZB

http://finviz.com/fut_chart.ashx?p=m5&t=DX

http://finviz.com/fut_chart.ashx?p=m5&t=GC

http://finviz.com/fut_chart.ashx?p=m5&t=SI

http://finviz.com/fut_chart.ashx?p=m5&t=CL

The team will check in during the day, reporting in the Discourse when there is a new entry.

Enjoy your day.

To learn how to trade stocks and ETFs for consistent trading profits in both bull AND bear markets, sign up to receive our best daily ETF and stock picks through The Wagner Daily swing trading newsletter.


Point and Figure on Canada


OptionOracle


Harp’s Roadmap


Cara on the Metalminers


Cara on the International Markets


CTA Trading Desk Mid-Day Report


CTA Trading Desk Post-Close Report


  1. 8:30 AM ET Durable Goods Orders 8:30 AM ET Personal... [#116276]
    By: davefairtex (5216 comments) Go to top ↑
    • 8:30 AM ET Durable Goods Orders
    • 8:30 AM ET Personal Income and Outlays
    • 8:30 AM ET Chicago Fed National Activity Index
    • 9:55 AM ET Consumer Sentiment
    • 11:00 AM ET Kansas City Fed Manufacturing Index
  2. 1 in Buy alert 4 in Distribution Zone 2 in Sell... [#116277]
    By: davefairtex (5216 comments) Go to top ↑
    • 1 in Buy alert
    • 4 in Distribution Zone
    • 2 in Sell alert

    Accumulation Zone (4%): Monthly 2, Weekly 6, Daily 6
    Distribution Zone (26%): Monthly 8, Weekly 29, Daily 43

  3. The trashing of Modern Portfolio... [#116278]
    By: Les (7233 comments) Go to top ↑

    The trashing of Modern Portfolio Theory:

    http://peterlbrandt.com/modern-portfolio-theory-is

    Put into poker parlance, which is very illuminative. I will return to this subject with some personal anecdotes when time allows. One Christmas party too many requires my presence tomorrow…

  4. Good morning. 08:30 Personal Income/Spending 08:30 PCE... [#116280]
    By: Bull Hunter (3552 comments) Go to top ↑

    Good morning.

    08:30 Personal Income/Spending
    08:30 PCE Prices – Core
    08:30 Durable Orders
    09:55 Michigan Sentiment – Final

    ——

    IBM – IBM initiated with a Buy at Topeka. Target $245

    MA – PT Lifted from $525 to $575 @ Argus. Buy

    MCD – McDonald’s coverage resumed with an Outperform at Wells Fargo.

    NKE – price target raised at UBS to $115. Stage set for accelerating EPS growth. Buy rating.

    NKE – PT Lifted from $94 to $100 @ Canaccord. Hold

    NKE – Nike downgraded to Neutral from Buy at Janney Capital. Janney downgraded Nike citing valuation. Price target is $110.

    PAYX – Paychex downgraded to Neutral from Outperform at RW Baird due to slowing near-term core payroll revenue growth. Price target lowered to $34 from $36.

    ——

    “The American Republic will endure until the day Congress discovers that it can bribe the public with the public’s money.” ~ Alexis de Tocqueville

  5. Sold 7 calls for a very nice gain, allowing the others to... [#116281]
    By: ea32da32 (2362 comments) Go to top ↑

    Sold 7 calls for a very nice gain, allowing the others to run since we’re in the gap. will see if we can hit the $20.06 area I am looking for.

  6. https://www.facebook.com/NRANews While we... [#116282]
    By: NYUGrad (4750 comments) Go to top ↑

    https://www.facebook.com/NRANews

    While we wait;
    http://www.youtube.com/watch?v=M1u0Byq5Qis

    my opinion is there is a bigger agenda and the Sandy Hook tragedy is being used to disarm Americans. So when poop hits fan in far future, currency is in downward spiral, et al, the govt will have full control, all the guns, and all the gold.

  7. I hope everyone was able to avoid the Fiscal Beach... [#116283]
    By: ea32da32 (2362 comments) Go to top ↑

    I hope everyone was able to avoid the Fiscal Beach reaction. I’ve given this all much thought – way too much IMHO. I think Boehner and O-Nero should cut the crap and give the people games and bread. Time for Boehner to punt; let republican pathetic strategist errors and failures to properly communicate come to fruition, scrape up what’s left in a generation or two and move on… bush did such a great job alienating the media with his reclusiveness and inability to communicate anything positive – the republicans have simply continued that line and it’s a complete failure – they are a complete failure. That’s my editorial and I’m sticking to it LOL.

    Earl

  8. GLD 7 day RSI 26.80, 7 week 34.88 SLV 7 day RSI 20, 7 week... [#116284]
    By: bsi87 (1171 comments) Go to top ↑

    GLD 7 day RSI 26.80, 7 week 34.88
    SLV 7 day RSI 20, 7 week 32

    GLD P&F breakdown on Dec 18, objective 148
    http://stockcharts.com/def/servlet/SC.pnf?chart=gld,PLTADANRBOPADF1!3!!!2!20]&pref=G

    SLV ditto, objective 24

    I see a series of gaps to the downside since early Dec, only one filled and inability to move above the filling action

    Strong nearly horizontal support at the mid summer 2012 lows

    FD:no position long or short in the PM’s, limit orders at summer prices

    • bsi87 you wrote about summer prices and horizontial... [#116287]
      By: Bear E (287 comments) Go to top ↑

      bsi87 you wrote about summer prices and horizontial support.
      Market seems to like to undercut previous lows at a later date before ripping back up into consolidation range.
      I think this has to do with the computer programs set to trade certain distances past targets.
      Bear E

      • Actually the big boys can see all the sell stops and gun... [#116290]
        By: bsi87 (1171 comments) Go to top ↑

        Actually the big boys can see all the sell stops and gun them. Gets rid of the weak longs (esp if they bought at higher prices) AND the shorts as they cover their position. Several doji’s (I call them kangaroo tail reversals per Elder) in the weekly charts in the mid summer time period.

        The weekly candlestick charts for QQQ show doji dragonfly reversals for last week and this week. P&F is still showing bullish target – see what it looks like tomorrow. There’s a slight upsloping trendline support around 61.50

        FD: short QQQ

  9. Following the two changes announced yesterday, I will be... [#116289]
    By: Bill Cara (4105 comments) Go to top ↑

    Following the two changes announced yesterday, I will be making five changes to Sector 10 (Energy) to reflect a greater reliance on US production and refinery operations. I will write about this in the WIR, but essentially it is because I do believe that the US is on the road to self-sufficiency in Energy, and will become an exporter. This will have a major impact on the US economy within 3-5 years, and requires some changes to the companies you put in your watchlists.

    • I have been compiling a number of analyst reports on the... [#116292]
      By: Bill Cara (4105 comments) Go to top ↑

      I have been compiling a number of analyst reports on the future of US energy, and am pulling together the pieces that seem to be the most consistent and believable. There is no question that (i) production has increased dramatically in the past year, and (ii) the oil and gas fields that are being drilled with phenomenal success are indeed very large. I can see why Freeport-McMoRan decided to refocus on energy in the US as opposed to fighting Indonesia and other foreign governments.

      Just think about what lower energy costs will do to the US economy — in terms of real estate development, travel and manufacturing.

      • Bill, There was an article in Newsweek magazine recently... [#116294]
        By: Grym (5469 comments) Go to top ↑

        Bill,

        There was an article in Newsweek magazine recently “The End of Pasta” about the trade-off in N. Dakota between oil and wheat production. Climate change is endangering production of Durum wheat, but mineral rights don’t belong to the farmers.

        We may be going from bad to worse. Would we rather eat or drive?

        http://tiny.cc/0pkopw

        Grym

      • I'm a little less sanguine about the near-term prospects... [#116298]
        By: terryC (336 comments) Go to top ↑

        I’m a little less sanguine about the near-term prospects for energy in North America. Do you really think the voices from Big Oil that were preaching “Peak Oil!” until recently are going to allow for such a flood of underlying energy commodities that it would result in a significant drop in prices or increase in the level of exports? Domestic demand is weak due to lower economic activity, resulting in near-record volumes of oil and gas in reserve storage. Refining operations are close to capacity because the price of oil is excessively high and there is no political will to bring it down so consumers can afford cheaper transportation. With all the excess production of NG we have not seen any big moves to greatly expand LNG for export. Why has there been little demand for more NG pipeline capacity that would facilitate the export of LNG? I’m guessing that is because the quality of NG from most shale deposits is not competitive with that found in most global LNG channels and fracking may not have a long life as a means of extraction. Yes, the quality of NG is determined by where it is found and how it is extracted and a lot of it is blended and treated so it will not damage hi-efficiency furnaces). It will be interesting to see what the EPA’s report on fracking released today will conclude on the matter. I am looking forward to your findings in the WIR.

      • Yes; but what of all of those reports of the short lifespan... [#116305]
        By: MarkOfTheBeast (27 comments) Go to top ↑

        Yes; but what of all of those reports of the short lifespan of these fields? Or do you think that technology will find a way to extend them?

        • Hi M. Beast - Not so much the short lifespan, but a... [#116306]
          By: Luggie (639 comments) Go to top ↑

          Hi M. Beast – Not so much the short lifespan, but a semi-rapid decline curve, but over an extended period. Here is a decent summary from the Million Dollar Way…..:
          The best Bakken wells now produce 1 million bbls of oil over the lifetime of the well (based on composite of information publicly as of January, 2012). The oil industry refers to this figure as the estimate of ultimate recovery (EUR). Back in 2007, EOG opined that the EUR from each of its wells in the Parshall could be 750,000 barrels of oil equivalent. In January, 2010, CLR opined that dual laterals will add another 400,000 barrels to the EUR. This is less than, but comparable to the EUR for wells in east Texas (Texas Barnett Combo). It should be noted that EOG sits in one of the “sweet spots” in the Williston Basin and their wells are probably going to return much more than the “average” well in the basin.
          In October, 2011, Harold Hamm (CLR/CEO) opined that the “typical” Bakken well will have an EUR of 603,000 barrels. In May, 2011, James Volker (WLL/CEO), opined that the average Bakken well will be 300,000 bbls/well EUR. In addition, many operators are considering secondary recovery enhancements. Happy Trading

  10. sure acting funny with all the cliff talk FD: No... [#116291]
    By: bsi87 (1171 comments) Go to top ↑

    sure acting funny with all the cliff talk

    FD: No position

  11. In keeping with the energy theme Bill has been talking... [#116295]
    By: worthcap (152 comments) Go to top ↑

    In keeping with the energy theme Bill has been talking about today, I would like to call the following to your attention – http://www.mcdep.com/rtweek121123.pdf

    We have positions in two of the names mentioned in this NG Royalty Trust idea, MTR & PBT, shopping for a third at the moment. Also have positions in RDS.a and COSWF (sitting at LBB for third time). Also like DVN, OXY & COP (has the best chart of the bunch). Do your own DD. Looking forward to Bill’s new energy ideas.

    Added some SLW too early today and increased our SLV hedging to offset this long. Took some GLL off but still holding balance, just in case yesterday was not the swing low and I expect a retest in the next couple of weeks anyway. Gold & Silver Dec futs expire next Thursday, sure we will see some games prior to that, especially in thin holiday markets.

    Have a great weekend and Merry Christmas to all.

  12. ALOHA!! NFIB Optimism Index for November is down to 87.5... [#116296]
    By: kaimu (3289 comments) Go to top ↑

    ALOHA!!

    NFIB Optimism Index for November is down to 87.5. A HUGE PLUNGE! The NFIB Optimisim Index was created in 1986 and since then a reading lower than 87.5 has only occurred seven times; five of those times was in 2009. We are now at July 2009 levels, only Q1 2009 was lower. As I said in my prior SOUND MONEY reports I bet the NFIB Optimism Index would tank as we moved to Q1 2013. I can’t wait to see what the rate will drop to in December. One of the few standards the FED and the BEA and the BLS cannot mess with.

    Debate and blame as they will in Washington DC all that is missing is the God’s honest truth; they are NOT our saviors they have been our demise all along …

    Next time VOTE THAT!!

  13. ALOHA!! GRR(TSXV) share price is up near 28% on about... [#116297]
    By: kaimu (3289 comments) Go to top ↑

    ALOHA!!

    GRR(TSXV) share price is up near 28% on about double average volume, which has been whittled down substantially. Still things move fast for junior share prices, especially when the upside goes off.

    The “boomerang effect” is in full swing at Golden Reign Res(GRR:TSXV). I presented on GRR at the 2011 CTA Conference in Whistler. Mainly I was intrigued by the high grade shallow assays and the first NI43-101 shows that loud and clear.

    Although fairly small in terms of Au equivalent ounces the grades can make up for “smallness”. This to me is a perfect candidate for the principles of “micro mining”, especially the near surface open pit assays.

    OPEN PIT
    Indicated – 73,000 Au Eq ounces @ 9.18 g/t
    Inferred – 185,000 Au Eq ounces @ 8.42 g/t

    UNDERGROUND
    Indicated – 22,000 Au Eq ounces @ 6.76 g/t
    Inferred – 620,000 AU Eq ounces @ 7.17 g/t

    These are “resources” and not “reserves”, but the grade is king especially in this hostile market environment. These grades are approximatley double what the initial overall grades for SLR(ASX) were in the early stages.

    Infill drilling continues …

    LINK: http://finance.yahoo.com/news/golden-reign-outline

  14. terryC: Pipeline infrastructure is being added for Natural... [#116299]
    By: Lat30Long95 (7 comments) Go to top ↑

    terryC:
    Pipeline infrastructure is being added for Natural Gas, however the best markets to sell the product are overseas and the infrastructure to send NG overseas require a long lead time to permit and construct. LNG Export Terminals are permitted to Cheniere in Cameron, LA and in San Patricio County, Tx. Pangea recently applied for a permit to build a LNG export facility in San Patricio County also. Exxon is in line for a permit too – http://seekingalpha.com/article/821351-exxon-mobil

    LNG Tankers require a deep draft and the largest existing ports along the Gulf (Houston, New Orleans) are not well suited for those ships. New port locations are needed for LNG exports. Once LNG Export facilities are “spotted” and permitted, then I suspect the pipelines will follow to these permitted locations.

    The supply is readily available – the means to move supply to the best markets is not. The transmission pipeline from gathering fields to port will require the least amount of time to construct.

  15. I still like DNDN but the ACHN chart is a bit better... [#116302]
    By: ea32da32 (2362 comments) Go to top ↑

    I still like DNDN but the ACHN chart is a bit better looking. I sold my Dendreon calls when it didn’t hold $5.26 toward the end of the day – a few minutes later it dropped to $5.15 – then started to recover a bit. I held ACHN.

    • Yep... always the next one to deal with !.. like we... [#116308]
      By: baz22 (2875 comments) Go to top ↑

      Yep… always the next one to deal with !.. like we discussed privately last night, ZLCS is on the radar… as ATHX is also… both have looming clinical indications… Regenerative medicine ( stem cell ) will be the one to watch in 2013… as for this year… Wow.. The diet-trio from early January…CLSN in the low $ 2′s .. the Hep C guys.. TASR ….. SRPT.. all the ‘ true ‘ penny trades !!..and those jaw dropping shorts !! It been quite a ride my friend… can’t wait till January, 13… best of all worlds to you

  16. http://seekingalpha.com/article/1077661-sandstorm-... I'm... [#116303]
    By: ChrisM (279 comments) Go to top ↑

    http://seekingalpha.com/article/1077661-sandstorm-

    I’m long SAND. I like the sound of his approach to charity – pity the interviewer didn’t pursue that a little more.

  17. ... [#116304]
    By: kaimu (3289 comments) Go to top ↑
  18. is what the Troika appears to be pushing, and Greek law may... [#116307]
    By: Les (7233 comments) Go to top ↑

    is what the Troika appears to be pushing, and Greek law may soon pass. This poison pill legislation will kill the democratic right of a sovereign to carry out the will of a people, but that’s how (economic)empire’s function:

    http://www.golemxiv.co.uk/2012/12/the-humiliation-

    Of there being 2 ways to enslave a nation – the sword and debt – Germany failed in the former but appears determined to have its way by the latter.

    • Greece has already defaulted. To pretend otherwise is an... [#116309]
      By: Ilya (572 comments) Go to top ↑

      Greece has already defaulted. To pretend otherwise is an excercise from ‘Alice in Wonderland.’ “Run twice as fast to stay even and then”, you die sucka!

      The legal smoochzes all attempt, using the gobbldee-gook de jure to hold together a system that has already failed. No matter the vote or non vote by the people of Greece, this albatros has already been hung on a Euro-Supreme Court decision that …wait…there is no such entity…Europe is a classic ‘Chinese’ fire-drill. Their multi-storied house is burning down around them and the best they can do is to fling sand from a pink pint bucket with a plastic shovel.

      They are beating dead horses here, and the pity is they know it to be true.

      I’m afraid we are in a ‘new era’ where a thousand years of English Common Law was swept aside. Perhaps even for the last 40 years, the West is being increasingly governed by dictat. Funny, I don’t feel like a prolitariat type minion…Yet.

    • Les, I agree. The Greek poison pill legislation is far... [#116311]
      By: Dr. Strangelove (2004 comments) Go to top ↑

      Les,

      I agree. The Greek poison pill legislation is far worse than a declaration of default since “will kill the democratic right of a sovereign to carry out the will of a people” will become formalized and equal to the Treaty of Versailles which put the people of Germany under an onerous debt obligation resulting in the Weimar hyperinflation and the rise of Hitler. It won’t last: the Greeks will eventually rebel against its EU creditor like the Germans against the WWI Allied Powers.

      Predicting what has already come to pass in the ‘Greek default’ is a waste of time. There gov’t bonds have already shown us a defacto default (interest rates no longer reported) without a declaration of default.

      Armstrong made this interesting point I’d not considered:

      “In all fairness to Greece, the Euro fell to 80 cents US at first, then rallied to nearly $1.60. This meant that the PREVIOUS debt of southern European states APPRECIATED doubling in real costs. It was not just a spending-spree. It was the DOUBLING of the real nominal value of the debt that they had to pay. Sorry, but they got screwed with the Euro all because politicians thought they could not sell a nationalization of debt for Europe and just started with the currency.”

      Just goes to show how stupid the debt structure is behind the euro. As Armstrong pointed out long ago, the euro structure is equal to allowing the states to issue federal debt.

  19. The suicide of Greece, Chapter 18 of The Life of Greece... [#116312]
    By: Les (7233 comments) Go to top ↑

    The suicide of Greece, Chapter 18 of The Life of Greece, Book 2 in the outstanding series on The Story of Civilization by Will Durant. I will over the next few days scan and post some pertinent passages as the systems of thought that created Greece’s grandeur also led to its demise.

    War, environmental impoverishment, class divisions, imperial ambitions and the dumbing down of the once noble popular assembly all led to Greece’s downfall as another civilization took up the banner.

    Sounds familiar.

    ————————–

    19C/66F forecast for tomorrow in parts of Switzerland on the day of the winter solstice. What a mess we’ve left our kids, and we’re still accelerating the speed we pump greenhouse gases into the air.

  20. ... is up now. Now I get to take a break. I might even... [#116313]
    By: Bill Cara (4105 comments) Go to top ↑

    … is up now.

    Now I get to take a break. I might even take a week off. Haven’t decided, but a year ago we went to Havana for the first week of January, and that would be kinda nice. I know I need the time off. Maybe Santa will gift it!

  21. ALOHA!! Could it not be declared that the US banks during... [#116314]
    By: kaimu (3289 comments) Go to top ↑

    ALOHA!!

    Could it not be declared that the US banks during the “Bank Crisis” under membership of the US FED were an insurrection and rebellion against the United States and the Constitution? They did openly threaten the US Congress with complete economic collapse in order to force TARP. As such could it not be said that Section #4 under the 14th Amendment be used as a pseudo RICO statute? Are We The People not debt slaves enslaved by a debt based money system?

    Section 4. The validity of the public debt of the United States, authorized by law, including debts incurred for payment of pensions and bounties for services in suppressing insurrection or rebellion, shall not be questioned. But neither the United States nor any State shall assume or pay any debt or obligation incurred in aid of insurrection or rebellion against the United States, or any claim for the loss or emancipation of any slave; but all such debts, obligations and claims shall be held illegal and void.

  22. This is such an interesting ride. Best to you... [#116315]
    By: worthcap (152 comments) Go to top ↑

    This is such an interesting ride. Best to you all.