Bill Cara’s Blog for Mar 22, 2011 [See Post-Close report]

CTA Trading Desk Morning Report

[7:00am ET] Good morning.

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.

[9:29am ET] Good morning. Geoff here.

Global stocks experienced some small gains overnight helped by the Nikkei which rallied 4.4% on the good news regarding the nuclear issue.

The US futures markets are slightly higher as I write this.

As the nuclear issue seems to have peaked, eyes move to Libya. In Europe, questions arise on whether or not the military should be under NATO control. In the US, politicians of both parties are rising against the president regarding the constitutionality of the US involvement. It sounds like the coalition is already in disarray. Regardless, oil prices will remain volatile until the Middle East calms down which may not happen soon – we also have to watch Yemen now.

The issues that have been roiling the global markets seem to have calmed and market volatility has dropped but those issues remain. As traders, we need to be aware of various scenarios and have a plan to take advantage of those possible scenarios if they play out.

One of those scenarios involves the US Dollar.

Weeks ago, we mentioned the negative correlation between equities and the US Dollar. As the US Dollar falls, the stock market trends higher. This relationship is due in part to inflation, in the form of money, sloshing around in the system. That money is put to work in the stock market.

What that excess money also does is rally commodities like gold and oil. As the US Dollar falls, commodity prices rise in terms of the USD because the dollar isn’t worth as much as it was before, so it takes more US Dollars to purchase the same amount of a commodity. As the dollar falls you want to be long commodities – most of the time.

We were also watching for the massive money printing that has occurred over the last few years to eventually push the dollar to new lows. If the stock market fails to rally as the US Dollar declines, that would be a really bad sign for the stock market. The negative correlation between the US Dollar and US equities would be ending because traders would be nervous about the US Dollar. If the US Dollar was not able to find support, risk would rise in the equity markets.

Cliff Notes: Bernanke’s printing press weakens the US Dollar to the point that traders are nervous and sell stocks breaking the negative correlation between the US Dollar and US stocks.

So, what is our trading plan IF that particular scenario plays out over the coming weeks and months? Remember, this is a BIG IF;
• News may come out that the USD has “cracked”
• Traders will sell the broad equity market as the US Dollar declines
• If the stock market falls too fast, leveraged traders will need to raise cash and babies will be thrown out with the bathwater, including gold and other commodities
• Many emotional gold longs will be shocked that gold isn’t rallying due to the USD decline (“because it should, it just should dammit!”)
• CNBC will trot out a number of gold bears to push more fear into the gold market panicking gold longs into selling gold at even lower prices
• We wait to see some climax selling in various gold securities because that will be a sign that the weak hands are out of the gold market. When the downtrend ends and a price chart shows a downtrend line break to the upside, we step in and start using the capital that we have on the sidelines to purchase gold and quality gold stocks. We will be looking at trend lines and Fibonacci levels. The attractive gold stocks will be the prior leaders.

Ok, like I said; that is a big IF, but this type of scenario (with different catalysts) has played out many times since 2003 and probably will again. As a trader, you WANT volatility in order to make money and you need to have a list of a number of possible scenarios, then if one begins to play out, you will be ready to ACT. It just happens that I see the above scenario as one with the most bang for your buck.

Have a great trading day!

Symbol Name Last Trade Change Related Info
^ATX ATX 2,846.07 6:44AM EDT Up 19.16 (0.68%) Components, Chart, More
^BFX BEL-20 2,615.93 6:58AM EDT Down 11.49 (0.44%) Components, Chart, More
^FCHI CAC 40 3,907.48 6:58AM EDT Up 3.03 (0.08%) Components, Chart, More
^GDAXI DAX 6,807.20 6:44AM EDT Down 8.92 (0.13%) Components, Chart, More
^AEX AEX General 357.12 6:44AM EDT Up 0.42 (0.12%) Components, Chart, More
^OSEAX OSE All Share 492.79 6:44AM EDT Down 2.41 (0.49%) Components, Chart, More
^SMSI Madrid General N/A 0.00 (0.00%) Chart, More
^OMXSPI Stockholm General 352.92 7:00AM EDT Down 1.69 (0.48%) Components, Chart, More
^SSMI Swiss Market 6,240.08 6:42AM EDT Up 16.17 (0.26%) Components, Chart, More
^FTSE FTSE 100 5,790.67 6:44AM EDT Up 4.58 (0.08%) Components, 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.


Cara on Trends & Cycles


Vad’s Catch of the Day


Kaimu’s Sound Money


CTA Trading Desk Mid-Day Report


CTA Trading Desk Post-Close Report

Good evening. Patrick here.

I have been battling computer problems since early this morning; from the looks of it I didn’t miss a whole heck of a lot. After the big initial push upward yesterday morning equities have been flat lining for the better part of two days. Usually this sort of tight consolidation occurs directly before an impulsive move.

The S&P has respected the 1330 area thus far pausing as it tests its 20- and 50-day moving averages, and the 50% retracement of the latest decline. Volume has been anemic the past few days – traders are indecisive right now, electing to watch the action from the sidelines.

The market is building energy – look for vertical development (trend day) soon; if the S&P starts punching through 1310 shorts are going to feel the heat. Bears will be looking to fill the gap from yesterday (roughly 1279-1281) with lower targets of 1250-1260 and 1220-1230.

The “fear” index (VIX-1.94%) has plummeted -35% in less than a week indicating most of the players are unconcerned about Libya, Algeria, Bahrain, Iran, Japan, Portugal, Spain…

While everyone may be breathing a sigh of relief now things could quickly change, especially if a geopolitical “event” happened, the greenback (DXY+0.11%) decline intensified, or interest rates (TLT+0.28%) suddenly began spiking upward.

Stay vigilant my friends.

Have a great evening.


  1. Submitted by Grym (3236 comments) on Tue, 03/22/2011 ... [#82056]
    By: Grym (5469 comments) Go to top ↑

    Submitted by Grym (3236 comments) on Tue, 03/22/2011 – 07:15 #82055 (in reply to #82046)

    All of your comments are so disturbingly true.

    Check out this article to see one of those 25 (GE) who control the US job situation with the aid of Congress’s globalizing of America. Treatment of His Majesty, Jack Welsh on GE-owned CNBC makes me gag.

    Where America’s jobs went?In a globalized economy, American corporations are rapidly shifting their workforces abroad
    ?http://tiny.cc/nw0qq

  2. CPI rose to 4.4pc in February, up from 4pc in January... [#82057]
    By: Les (7233 comments) Go to top ↑

    CPI rose to 4.4pc in February, up from 4pc in January. Economist had forecast a rise to 4.2pc. Retail price inflation (RPI), which is based on a longer-running index and is used as a starting point for many wage negotiations, rose to 5.5pc from 5.1pc, its highest since July 1991.

    http://www.telegraph.co.uk/finance/economics/inter

    In response to questions from UK media (US journalists being too polite to raise their hand), the bearded sage of the US Fed snorted petulantly that “that’s not inflation – it doesn’t count!”.

    • Les, I think saying it is used as a starting point for... [#82060]
      By: Mark H (1363 comments) Go to top ↑

      Les,

      I think saying it is used as a starting point for wage negotiations is a bit anachronistic. Have they not heard of the deep cuts to public sector spending? These days you count yourself lucky just to have a job. Expecting to be compensated for inflation is a thing of the past. What planet do these journalists live on?

      • you'd have to read the full text to see that not since the... [#82061]
        By: Les (7233 comments) Go to top ↑

        you’d have to read the full text to see that not since the 1920′s has such purchasing power been lost by the UK household. VAT increases and inflationary pressures are the cause with, as you point out, no question of serious wage negotiations possible in the present climate (well, the German unions are trying).

        It begets the question both in the UK and the US. What is retail’s future in this ‘recovery’?

        Does Washington think it can or will want to block the bearded one from further monetary easing – if so, with what consequences for said ‘recovery’?

        Picked up the article by Paul Singer. That is worth reading, thanks to the person who posted it.

  3. 7:45 AM ET ICSC-Goldman Store Sales 8:55 AM ET... [#82058]
    By: davefairtex (5215 comments) Go to top ↑
    • 7:45 AM ET ICSC-Goldman Store Sales
    • 8:55 AM ET Redbook
    • 10:00 AM ET FHFA House Price Index
    • 10:00 AM ET Richmond Fed Manufacturing Index
    • 11:30 AM ET 4-Week Bill Auction
  4. Good morning. 6.5 - 8.5 Billion Dollar POMO Injection... [#82059]
    By: Bull Hunter (3552 comments) Go to top ↑

    Good morning.

    6.5 – 8.5 Billion Dollar POMO Injection Today.

    ——

    10:00 – FHFA Housing Price Index

    ——

    Cara 100 Earnings: CCL, WAG (.80 vs .80)
    After The Close: ADBE

    ——

    NE – Noble Corporation upgraded to Outperform from Market Perform at BMO Capital citing higher oil prices and expectations for an increase in offshore rig demand. Price target raised to $55 from $51.

    ——

    “Ancient Rome declined because it had a Senate. What’s going to happen to us with both a Senate and a House?” – Will Rogers

  5. (US) Fed's Fisher: Does not believe that the role of the... [#82062]
    By: Vadym Graifer (4341 comments) Go to top ↑

    (US) Fed’s Fisher: Does not believe that the role of the USD as a reserve currency will change, although US officials need to ensure confidence

    unless by ensuring confidence you mean cutting dollar’s valuation in half, yeah

    - Reiterates danger of Fed monitizing the debt, warns would lead to economic destruction.

    I thought they were not going to monetize debt anyway, why the warning?

    - US housing to stay depressed for some time to come

    but in 2007 your chief said… oh, never mind. As a traditional hero of Russian jokes, analog of Little Jonnie, ones said: And these people forbid me to pick my nose??

    Sarcasm Mode Off

    • Vad, you've just highlighted the danger of telling too many... [#82064]
      By: davefairtex (5215 comments) Go to top ↑

      Vad, you’ve just highlighted the danger of telling too many lies – namely that to remain credible the lies have to be consistent over time. Those of us that have a memory better than the average saint bernard will recall that Bernanke said quite clearly in his 60 minutes interview, “we are not monetizing the debt” and now we hear that Fisher reminds us that there is a danger when we monetize.

      In Egypt the government fell after enough people got disgusted. In China, they call it “losing the Mandate of Heaven” – one of those colorful Asian phrases that effectively places the stamp of legitimacy on a successful revolution. Clearly if you lose the revolution, that means you lost the Mandate of Heaven – an amazingly practical bit of spiritual practice.

      http://en.wikipedia.org/wiki/Mandate_of_Heaven
      “The Mandate of Heaven postulates that heaven (Tian) would bless the authority of a just ruler, as defined by the Five Confucian Relationships, but would be displeased with a despotic ruler and would withdraw its mandate, leading to the overthrow of that ruler. The Mandate of Heaven would then transfer to those who would rule best. The mere fact of a leader having been overthrown is itself indication that he has lost the Mandate of Heaven.”

      Someday, hopefully soon, the Fed will lose the Mandate of Heaven. They are already well down the road of monetary despotism, pillaging Grandma’s savings while raising her cost of living all in order to provide their TBTF banks their shocking interest rate spread, massive executive bonuses for a job well done, perfect trading quarters, and the like.

      • I seriously hope they lose it (providing they ever had it... [#82067]
        By: Vadym Graifer (4341 comments) Go to top ↑

        I seriously hope they lose it (providing they ever had it in the first place) without causing hyperinflation first… this is so not pretty. I know I spoke of this example before, but I still, good 18 years later, can’t forget it: tears in the eyes of an elderly guy looking at the box of matches on the shelf costing more than what he managed to squirrel away over his entire life. Once you realize what he feels, you’ll never take these actions by PTB lightly.

      • Dave, I hope loss of the "Mandate of Heaven" comes with a... [#82075]
        By: Grym (5469 comments) Go to top ↑

        Dave,

        I hope loss of the “Mandate of Heaven” comes with a ticket to hell, but I suppose that is too much to expect. After all, millions of Americans are experiencing it through job loss, rising taxes, mortgage fears and rising food and energy costs. (which he conveniently ignores)

        He will simply write a best-selling book, complete with alibis, telling how his solution was prevented from succeeding due to the incomplete support or some such B.S.

        Hey, Greenspan got away with it.

  6. ... [#82063]
    By: Johnny (1181 comments) Go to top ↑
  7. Modest dollar rally off 75.50 causing some indigestion in... [#82066]
    By: davefairtex (5215 comments) Go to top ↑

    Modest dollar rally off 75.50 causing some indigestion in gold & silver before NY open today.

  8. You remember our last SPY chart with support at 125 and new... [#82068]
    By: Vadym Graifer (4341 comments) Go to top ↑

    You remember our last SPY chart with support at 125 and new resistance at 130, see the first attachment. Next chart – Current Battlefield Next Junction – shows nicely forecast bounce off 125 and hitting that resistance. It happened on lower volume vs. selloff’s, so odds are slightly on the side of retreating, but not overwhelmingly – news events are still influencing market to the greater degree than normally. If SPY breaks 130, we are in very vague environment with no clear signposts.

  9. In the commentary at the top of the... [#82069]
    By: Jack Senett (438 comments) Go to top ↑

    In the commentary at the top of the page.

  10. PVM.AX, the Oz listing is down by 7% but I see the Venture... [#82070]
    By: Les (7233 comments) Go to top ↑

    PVM.AX, the Oz listing is down by 7% but I see the Venture listing up by a couple of cents. Fine, I’ll take the 8% and buy back lower. After all, if the Oz listing drops so much without futures pressure, which have only arisen as the buck started strengthening at 8am, then the Canadian listing is probably gonna cop it too right?

    So I sell at .72. No fill (I assume the exchange is open for trading premarket). Then the price drops to .71. So I cancel. Price returns to .72….

    penny drops and I get the game. Someone wants to suck in buyers. They’re not prepared to take my small offering.

    Nice game fellas

    • It has been a rocky ride on PMI but worth it. It feels like... [#82123]
      By: Ventilation Blues (164 comments) Go to top ↑

      It has been a rocky ride on PMI but worth it. It feels like a Rodeo stock. When it reaches 1 I feel I want to get off but it seems like it may be worth going long on. Having said that, IF Geoffs scenario above plays out PMI will take the dive along with everyone else.
      Perhaps Kaimu has some thoughts on the volatile erratic price movements of PMI. Thats twice its jumped 30% in a single trading day and then shed alot of its price. Should we forget going long here and play the game as Les has noticed? Buy ay 0.6 region, sell at 1 region. Repeat.

      • I don't want to play the game so much VB in that I would... [#82127]
        By: Les (7233 comments) Go to top ↑

        I don’t want to play the game so much VB in that I would have been happy to play the price arbitrage in PMV.V had the bid of .72 been real. That would have been a near 10% gain and then buy back lower. Unfortunately the bid was a fake and the price arbitrage closed very quickly.

        PVM.AX up .02 or 3% this morning. I don’t want to be disturbed by the noise, just noting the games being played by the Canadian exchange.

        Long 1k and deciding whether I want to be long more. I missed the all important dip to support at .55 recently. Another retest of that support would be great.

  11. Portugal & Ireland CDS spreads 5 per cent wider... [#82071]
    By: Mark H (1363 comments) Go to top ↑

    Portugal & Ireland CDS spreads 5 per cent wider today.

  12. BBY - numbers lowered at Jefferies. Shares of BBY now seen... [#82073]
    By: Bull Hunter (3552 comments) Go to top ↑

    BBY – numbers lowered at Jefferies. Shares of BBY now seen reaching $35, according to Jefferies. Estimates also cut, as the company will likely see slower sales this quarter. Hold rating.

  13. holding the SLW call and prepared to buy another if I see... [#82074]
    By: Les (7233 comments) Go to top ↑

    holding the SLW call and prepared to buy another if I see buyers regroup and taking it to higher levels. The $ appears to have competition for buyers interest this morning. Still holding USO puts.

    Ready to change opinion on a dime if market dictates.

    edit: USO puts dropped for 10+% loss on surging oil futures. long a second SLW call. long 100 shares of PSLV.

  14. Portugal widening sharply (538bp, +41) ahead of tomorrow's... [#82076]
    By: Mark H (1363 comments) Go to top ↑

    Portugal widening sharply (538bp, +41) ahead of tomorrow’s crucial budget vote. Failure to pass will make things awkward at the EU summit

    http://twitter.com/gavanNolan

    • The euro crisis act II does squat to the dollar. I guess... [#82077]
      By: jack black (2306 comments) Go to top ↑

      The euro crisis act II does squat to the dollar. I guess people lost faith in buck. I’m still trying to figure out if that means it will come roaring back (contrarian take) or crash down (striking weakness).

      • ... [#82079]
        By: Mark H (1363 comments) Go to top ↑
        • I think you might be right. I just checked the COT data on... [#82081]
          By: jack black (2306 comments) Go to top ↑

          I think you might be right. I just checked the COT data on $ and the difference between COT (long) and large speculators (short) hasn’t been greater since 2007. However, that was months before dollar stopped falling in 2008. My take is COT $ data is very poor for timing deflection points.

  15. Its weird to not see any opening gaps like we are used... [#82078]
    By: jack black (2306 comments) Go to top ↑

    Its weird to not see any opening gaps like we are used to.

    • Miners (BHP, RIO, etc.) are weaker this... [#82080]
      By: Mark H (1363 comments) Go to top ↑

      Miners (BHP, RIO, etc.) are weaker this afternoon.

      • It's only AM where I live but I also noticed that FCX shows... [#82082]
        By: jack black (2306 comments) Go to top ↑

        It’s only AM where I live but I also noticed that FCX shows a true direction of the markets today as apposed to major indices that are hardly moving.

        FD: FCX puts.

        • Re: FCX Could be the spike in oil, but I would have... [#82086]
          By: Mark H (1363 comments) Go to top ↑

          Re: FCX
          Could be the spike in oil, but I would have expected copper to retreat if that were so.

          • I noticed the spike in oil that almost triggered my stops... [#82088]
            By: jack black (2306 comments) Go to top ↑

            I noticed the spike in oil that almost triggered my stops (now retreating slowly). WTF? News of one US plane crashed/shot down?
            Pilots are safe BTW.

          • Tank fire has killed three Palestinians in Gaza. Edit:... [#82089]
            By: Mark H (1363 comments) Go to top ↑

            Tank fire has killed three Palestinians in Gaza.

            Edit: (Egypt) Interior Ministry building has been set on fire.

  16. I'm currently visiting in southwest Michigan and wanted to... [#82083]
    By: MoKat (531 comments) Go to top ↑

    I’m currently visiting in southwest Michigan and wanted to report on the job situation here. There is a regional midwest chain of Walmart type stores run by the Grand Rapids Dutch called Meijers. They have developed a new store nearby and after 2 1/2 years, have finally gotten it ready to go. It has grocery and general merchandise and a gas station. Like a Walmart supercenter.

    They have 300 job openings of which 70% are part time. 2000 people have applied for those jobs. I would assume most of the jobs are less than
    $10 per hour. This store will take more from the local economy than it contributes. So much for economic recovery.

    • "This store will take more from the local economy than it... [#82087]
      By: bluesky (98 comments) Go to top ↑

      “This store will take more from the local economy than it contributes. So much for economic recovery.”

      I guess I don’t understand this comment. To me, that is called a profit and is necessary for doing business. I understand the part-time jobs aren’t ideal, but it sounds like people were willing to take them just the same. If you put in more to the economy than you take, then it wouldn’t it be called a charity? Maybe the problem is with people who would settle for $10/hr. instead of taking more initiative to find or make better income.

      • ... [#82091]
        By: Grym (5469 comments) Go to top ↑
        • "Why should I work for you when I can make almost as much... [#82093]
          By: bluesky (98 comments) Go to top ↑

          “Why should I work for you when I can make almost as much on unemployment?”

          I just think there’s a third option there. I swear we’d be better off by cutting unemployment down to 3 months. If people don’t get tough, creative, and maybe even move if necessary, then how will anyone’s situation get any better? People have to work to eat, and they have to do more than stock shelves in order to eat well. However, I would imagine the towns getting the new big-box stores are still doing better than those that the big-box stores decided to pass over.

          • ... [#82097]
            By: Grym (5469 comments) Go to top ↑
          • Grym, I wish the best for you and your son. My sister has... [#82106]
            By: bluesky (98 comments) Go to top ↑

            Grym,

            I wish the best for you and your son. My sister has MS, and my brother-in-law is on unemployment right now. I may come across as flippant, but I appreciate everything you’re sharing from your experience. I would still encourage anyone to try their best, because the world still ain’t going to change for the better on it’s own. I have a 90 year old grandma with a bad knee and chronic shingles that likes to say, “It could always be worse!”.

          • Bluesky, I afraid there is nothing individuals can do... [#82118]
            By: Grym (5469 comments) Go to top ↑

            Bluesky,

            I afraid there is nothing individuals can do unless we band together and get rid of the elite coalition of legislators, big labor and big business and big banks.

            Lobbyists are running the Congress for unions, CEOs and bankers. They are ignoring the nation and working for their own self interests.

            We in the US had it all to ourselves since WWII and I don’t begrudge other countries from getting ahead. The problem is our companies are hampered by regulations designed to improve health and well being like EPA, OSHA, child labor laws, health care and retirement plans, etc., yet imports are made under no such limits and we cannot compete.

            It WILL get worse (like your grandma says) unless we make massive changes and begin to equalize the playing rules. Here the bad economy has trickled down to my barber and dentist.

            The overload on us who are retired and those who are working at low income jobs is reaching the breaking point and I expect we’ll see a violent reaction, not the calm protest we’ve been having.

      • bluesky, I know where MoKat is coming from. Last fall we... [#82103]
        By: terryC (336 comments) Go to top ↑

        bluesky,
        I know where MoKat is coming from. Last fall we motored down the east coast of Lake Michigan from Mackinac to Holland MI to take in the fall colors. What is distressing is realising the change from where it was to where it is now economically. Areas like Traverse City or Holland are looking OK superficially due to infrastructure spending, but beneath the veneer created by old ( retired people ) money, there is little productive activity ( i.e. wealth creation ) compared to 10 years ago. Places like Manistee and Muskegon are depressed rust belts with Main Street having as many shops closed as open. Vacant factories and shipping terminals abound. The high wage jobs have disappeared and retail looks like the only resort to find work….until the retiree money runs out. The Big Lie being put out by the administration about recovery isn’t helping. Smart money is not going to invest in the future of America until the politicians come straight with the people, take back control of the Treasury, and start giving jail time to the banksters that brought us to the state we are in.

        • Not that they did any good for America, but I don't think... [#82110]
          By: cheapy (578 comments) Go to top ↑

          Not that they did any good for America, but I don’t think the lost 20 million jobs was caused by the bankers. The blame for that lies squarely at the feet of the politicians from both parties, who gave China all sorts of beneficial treatment, sending factory after factory, industry after industry, and even the machines from the shuttered factories, off to china. Add some blame for the likes of Wal-Mart, Target, Kohls, etc, who have virtually nothing on their shelves that is made here except food, and add to the blame list the great American consumer, who was so short sighted to buy those cheap Chinese goods, not realizing that the list of jobs lost would eventually include their own. Its an odd coincidence, don’t you think, that if you took the monthly trade deficit of say $40 or $50 billion, and divided it by the 20 million or so Americans that would like a decent job, that you’d have $2000 to $2500 per month to pay each of them if we weren’t sending that money overseas for imports instead.

          Yes, it is a big lie. The paper money, the promise of Social Security and Medicare that we already paid for but will receive, TAXED, at a DEBASED value. The whole nation has become a big Ponzi scheme, dependent on the Federal government to spend money it doesn’t have and can’t borrow, and for the Fed to print that money to make it possible, and for America and the rest of the world to sit idly by, and still accept those paper promises, fully well knowing that the debts can NEVER be repaid.

          I wonder how many years it will be before they admit the nation has been in a depression. I remember them announcing that the recession was over a while back, LOL. They might want to send news of that to the rust belt, somehow.

          • I lay the blame on banksters, not because of the recent... [#82111]
            By: terryC (336 comments) Go to top ↑

            I lay the blame on banksters, not because of the recent financial meltdown, but because of their insidious destruction of a working model of capitalism, reshaping the “new, American-style” capitalism to serve their greed. This has happened over decades, and could not have occurred without the complicity of regulators and legislators everywhere. Don’t expect HB&B to morph into some kind of body of goodness for America anytime soon. When the last pocket has been picked and the lights are turned out, they will be off to running their game using taxpayer’s money in growth markets such as found in Asia and Brazil. Why, come to think of it, I believe Barak is down there right now opening doors for the gang as I write.

          • Ultimately it comes back to fiat money. When the only money... [#82117]
            By: ChrisM (279 comments) Go to top ↑

            Ultimately it comes back to fiat money. When the only money was gold/silver coins, every time something was bought from another country, gold flowed from the buying country to the selling country. That reduced the supply of money in the buying country, and thus depressed economic activity in that country since the velocity of money was effectively fixed. This “depression” reduced prices and thus costs, thereby restoring competitiveness. I don’t know how that discipline can be restored in a world of mouseclick money, but we see the same macro effect now with gold flowing from central banks of the west to those of the east, albeit cloaked in the accounts of the BIS.

        • terryC, "The Big Lie being put out by the administration... [#82116]
          By: Grym (5469 comments) Go to top ↑

          terryC,

          “The Big Lie being put out by the administration about recovery isn’t helping. Smart money is not going to invest in the future of America until the politicians come straight with the people, take back control of the Treasury, and start giving jail time to the banksters that brought us to the state we are in.”

          Right!

    • MoKat - I'm in Ann Arbor. Witness the 2010 Census... [#82122]
      By: Dr. Strangelove (2004 comments) Go to top ↑

      MoKat -

      I’m in Ann Arbor. Witness the 2010 Census population decline over the past decade in Detroit to a level not seen since 1910: TWENTY-FIVE PERCENT. Rather shocking really but we’re conditioned to take it around here. You may find it interesting too that there is not a single grocery store operating within the Detroit city limits for years now. Mayor Dave Bing is the first good mayor in my lifetime but the public unions are having none of it.

      http://tinyurl.com/469eq6r

      …. In the ghetto.

  17. ... [#82085]
    By: loannetter (1298 comments) Go to top ↑

    http://www.marketwatch.com/story/existing-home-sal

    Sales fell in all four regions-the biggest decline in the Midwest = 12.2%.
    Median home price fell 5.2% to $156,100 the lowest since April 2002
    Distressed sales rose to 39%
    All cash sales rose to 33% (3X the average for ‘healthy economy’)
    First Time Buyers of existing sales up to 34%

    In short: a great time to get a few friends together and buy that distressed McMansion next to Rick Santelli and turn up the music!

  18. (PO) JP Morgan analyst sees chance that the Govt will fall... [#82090]
    By: Vadym Graifer (4341 comments) Go to top ↑

    (PO) JP Morgan analyst sees chance that the Govt will fall tommorow as ‘high’ (timing uncertain)
    - Reminder: Portugal’s budget vote is due Wednesday, with the PM threatening to quit if the austerity is rejected, Socialist party leaders claimed there would be an ‘abyss’ if the vote failed

  19. The United Nations nuclear watchdog cautioned Tuesday that... [#82092]
    By: Mark H (1363 comments) Go to top ↑

    The United Nations nuclear watchdog cautioned Tuesday that the severe situation at Japan’s earthquake-hit Fukushima Daiichi nuclear power plant could still take a turn for the worse, despite a gradual improvement in the past few days.

    “We need to be aware that it isn’t yet finished. There may still occur new, serious developments,” International Atomic Energy Agency Deputy Director General Denis Flory said at a press briefing here.

    The situation at Fukushima Daiichi “remains very serious,” Flory said.

    Among other things, the IAEA is concerned that it hasn’t yet been able to establish whether the radiation containment vessels around reactor units 1, 2 and 3 are intact or damaged. Another source of concern is the spent fuel ponds at reactor units 1, 2 and 4.

    The IAEA said it isn’t currently receiving any data on temperatures and water levels in these pools, where nuclear fuel rods are placed to be cooled after use.

    IAEA said high levels of radiation are still being measured within the plant, and to some extent in the 20-kilometer evacuation zone around it.

    Flory underlined, however, that the accident at Fukushima Daiichi isn’t comparable to the Chernobyl accident in Ukraine in 1986, the worst ever in nuclear history. At Chernobyl, Flory said, a graphite fire that lasted more than 10 days flung radiation far up into the atmosphere, giving the release a massive reach.

    “The reactors at Fukushima are burping from time to time, so there is some release of radiation, but it can’t be compared with Chernobyl, because there isn’t the same driving force behind the release at Fukushima,” Flory said.

    • I agree it's not Chernobyl, but it's not Three Mile either... [#82095]
      By: jack black (2306 comments) Go to top ↑

      I agree it’s not Chernobyl, but it’s not Three Mile either. I bet the severity will eventually increase to 6 with time. It’s currently at 5, same as Three Mile incident.

  20. ALOHA!! Here we have the US FED creating dangerous... [#82094]
    By: kaimu (3289 comments) Go to top ↑

    ALOHA!!

    Here we have the US FED creating dangerous precedence …

    Fed says 2010 payment to government sets record
    Fed pays US Treasury record $79.3 billion, reflecting gains from programs to aid economy
    AP

    Martin Crutsinger, AP Economics Writer, On Tuesday March 22, 2011, 11:46 am EDT

    WASHINGTON (AP) — The Federal Reserve is paying a record $79.3 billion to the U.S. government after the central bank earned a record amount of money last year from programs aimed at boosting the economy.

    The Fed says its payment to the Treasury Department for 2010 is 67 percent higher than $47.4 billion it paid in 2009, the previous record.

    The central bank earned a record $81.7 billion last year from its massive holdings of securities, which were purchased to help stabilize the financial system and pull the economy out of the recession. A portion of those earnings go toward funding the Fed, which receives no appropriations from Congress. Any money left over is turned over to the Treasury Department.END

    First of all since when has a bank ever “earned” a dime? They earn through debt and leverage as they intervene into markets. To pay JP Morgan 101 cents on the dollar for assets that would have otherwise BKed is not “earning”. To offer emergency discount window funds to major banks and then inject POMO into the banking sector and S&P futures is not earning. To force complicit politicians into TARP and Stimulus is not earning. You can only earn by creating capital through trade not debt. Debt has counterparties that are created by using more debt. The entire Yen Carry Trade is debt based. You “borrow” from BOJ at 1% you buy debt from RAB at 5%. Now what if one of those two debt counterparties failed? Or more impossible, what if one of those debt monies had a 9.0 earthquake and tsunami that destroyed infrastructure then wiped out four GE nuke plants and threatened the evacuation of Tokyo? Hummm … never happen in a million years!

    Now lets pretend the US FED or any bank in America “earned” something. Lets go with the US FED$79BIL to be deposited at the US Treasury. If you look back to my last SOUND MONEY I showed that on Tuesday, March 15th, the US Treasury reported an increase of the US PUBLIC DEBT by $72BIL for that one day. If we apply that US FED payment all we have left is a tiny $7BIL which does not even cover one week of Social Security checks.

    But this news will be used to pump the “debt ceiling” action and buy more time. The worst part of all this is the “crisis precedence” it sets, because the next time when the US FED and its member banks need a huge public bailout they will use this as an example of their past successes. Only a US Congressman and a central banker economist are sworn to buy that!

  21. Amazing footage of Obama's message of peace, deplomacy and... [#82096]
    By: Dr. Strangelove (2004 comments) Go to top ↑

    Amazing footage of Obama’s message of peace, deplomacy and understanding today. No joke.

    http://www.youtube.com/watch?v=8v99wEjLa-E&feature

    Cheers.

  22. All, I have enjoyed the brief vacation, but decided to... [#82099]
    By: Bill Cara (4105 comments) Go to top ↑

    All,

    I have enjoyed the brief vacation, but decided to return to trading on Wednesday. Unfortunately, I will not return to blogging of any kind for the next three weeks.

    This week I have been in Freeport Bahamas, in and around where we held the Cara Conference 2010. I’m now 95% certain I will relocate here from Nassau, and have been looking at potential residence/office locations. After finding what I want, I’ll be 100% certain of moving here.

    For clients who wish to contact me this week, please use the administration [at] caratrading.com, and I’ll get tracked down. Thanks.

    • Bill: It was a great surprise to see your pink highlighted... [#82125]
      By: stev1183 (12 comments) Go to top ↑

      Bill:
      It was a great surprise to see your pink highlighted text. Welcome back to the world of trading. Hopefully I will be welcoming you back to the world of blogging in 3 weeks. Enjoy your “vacation”, which probably means no more than 40 hours of weekly market research. I’m guessing you are many people’s cup of Joe in the morning.

  23. JMO. If this is the best the bears can do, we're headed... [#82100]
    By: 2nd_ave (5605 comments) Go to top ↑

    JMO. If this is the best the bears can do, we’re headed back to 1350.

  24. The boyz must be up to something... "There is nothing... [#82101]
    By: fireworks (256 comments) Go to top ↑

    The boyz must be up to something…

    “There is nothing inherently wrong and certainly nothing “illegal” about J.P. Morgan Chase (JPM) gaining a vault license for storing and taking delivery of gold/silver/platinum/palladium from the futures markets known as NYMEX/COMEX. However, the speed, timing and manner in which the exchanges just granted it troubles us.”

    http://tinyurl.com/4glkzvu

    • I'm flabbergasted. These guys just won't quit... Sprott's... [#82105]
      By: Les (7233 comments) Go to top ↑

      I’m flabbergasted. These guys just won’t quit…

      Sprott’s silver fund (PSLV) just broke out to new highs today. I’m happy to be in just over $17. I’ve gone and taken what profits I made in the first 3 months and a few hundred bucks more and laid them in Sprott’s redeemable fund. I’ll keep that as a core holding now, unless the price of PM’s shows serious signs of melting down.

      SLW calls closing over 15% today. I don’t expect silver shorts to just roll over and die, but certainly liked the buying pressure in futures as opex approaches.

      JPM and its newly anointed vaults sounds really dodgey in this context.

  25. A low range, low volume day. S+P500 still hanging out... [#82104]
    By: Tremendous11 (74 comments) Go to top ↑

    A low range, low volume day. S+P500 still hanging out (basing?) just below the resistance that Vad pointed out earlier.

    Nasdaq100 is slightly stronger than the Dow and S+P500 today while the Nasdaq composite was slightly weaker than both of them.
    S+P500 closing around 25% of the day’s range above the low of the day while the QQQQ is closer to a 50% retrace.

    I find it hard to draw any conclusions from the day’s index action. Could be the POMO injection was biased toward the Q’s?

    • I agree. The action today is similar to May 13 2010. Volume... [#82107]
      By: jack black (2306 comments) Go to top ↑

      I agree. The action today is similar to May 13 2010. Volume wise and otherwise.
      While the story is compelling for buying the dip, I’m waiting for a second shoe to drop and produce positive divergence on charts.

      FD: some assorted shorts in FAS, IWM, FCX, and EWJ with large long positions in GDX, INP and UNG.

  26. A little weird, no? Dollar dropping, but bonds being... [#82108]
    By: nebish (297 comments) Go to top ↑

    A little weird, no?

    Dollar dropping, but bonds being bought…

    If you don’t like the currency (and are worried about US$ actually losing its reserve status), why would you buy treasuries of any stripe…

    The more I know the less I understand.

    I still feel like the equity market will take a punishing drop at some point here but timing is everything.

  27. Thanks for painting that picture Geoff. It makes sense to... [#82112]
    By: RH (44 comments) Go to top ↑

    Thanks for painting that picture Geoff. It makes sense to me especially on the PM side of things.

    • I'm still digesting that scenario myself. Going back... [#82120]
      By: jack black (2306 comments) Go to top ↑

      I’m still digesting that scenario myself.

      Going back several years in charts I did find a few instanced when markets crashed with crashing dollar, recently March 2008 and July 2008 comes to mind (and now of course). However, every time gold went up (except for now). Is this a big paradigm shift?

      One more thing, dollar sentiments are exteremally low right now and such points are typically a place where dollar bounces some putting pressure on PM and stocks, even though such bounces could be small and short lived.

      Very confusing juncture, especially considering gold and silver sentiments are high right now, but gold miner rather low.

      Edit: Dollar is going up after hours, a bounce coming?

      FD: no direct trades on dollar.

  28. Worth a... [#82113]
    By: westcoaster (1130 comments) Go to top ↑
  29. In the commentary at the top of the... [#82115]
    By: Jack Senett (438 comments) Go to top ↑

    In the commentary at the top of the page.

  30. Mentioned here, I think, and touted on Seeking Alpha by an... [#82119]
    By: ChrisM (279 comments) Go to top ↑

    Mentioned here, I think, and touted on Seeking Alpha by an ex-director with substantial stake, and now by me with a tiny stake. Its a new-tech battery company that’s bought a factory and is doing contract manufacturing of old tech batteries to produce cash flow until the geewhiz stuff gets going. I think it has a pretty chart, moving up nicely from a long base, though it could still reasonably pull back to $0.80.

    • yes, the open market accumulation is noted Chris. I'll buy... [#82128]
      By: Les (7233 comments) Go to top ↑

      yes, the open market accumulation is noted Chris. I’ll buy in more on the dip. Long a few hundred shares here.

      You can see how the weekly time frame has been setting up over the last few months. Unfortunately I wasn’t paying attention (story of my life?). The valley of death appears to have been cleared.

  31. http://tinyurl.com/2fsabco On a cloud of sound I drift in... [#82121]
    By: 2nd_ave (5605 comments) Go to top ↑

    http://tinyurl.com/2fsabco

    On a cloud of sound I drift in the night
    Any place it goes is right
    Goes far, flies near, to the stars away from here

    Is there anyone not looking for a downside move? SPX 1350 sounds more like a magic carpet ride. Which is exactly where bear sentiment will take us.

  32. Here we go again. The market media making poison out of... [#82382]
    By: terryC (336 comments) Go to top ↑

    Here we go again. The market media making poison out of reasonably good results and creating the climate for another sell off. Could it be that the pin-striped analyst crowd find the bald guy a little too clever, and a little too rich? They will not allow a sensible guidance regarding the next quarter, and prefer to ignore the facts. An eleven percent drop in after-hours trading based on a possible 10 percent reduction in QUARTERLY sales? Gimme a break! I put in an order Thursday night for an additional 200 shares of RIM @ 56.50 and the order was filled at the Friday open at 55.80. Call me contrary, but I smell opportunity.

    Allow me to use Bill’s “Back up the truck!” , and here’s why:

    http://www.theglobeandmail.com/globe-investor/mark

    It is not unreasonable to expect RIM to go below 50 or well above 70 in the next 30 to 60 days, so let’s dance!

    FD: 800 shares and holding