Bill Cara’s Blog for May 28, 2012

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.

Symbol Name Last Trade Change Related Info
^ATX ATX 1,912.90 May 25 Down 5.90 (0.31%) Components, Chart, More
^BFX BEL-20 2,121.20 4:57AM EDT Up 24.10 (1.15%) Components, Chart, More
^FCHI CAC 40 3,071.98 6:59AM EDT Up 24.04 (0.79%) Components, Chart, More
^GDAXI DAX 6,365.93 6:45AM EDT Up 25.99 (0.41%) Components, Chart, More
^AEX AEX General Chart, More
^OSEAX OSE All Share 444.69 May 25 Up 0.73 (0.16%) Components, Chart, More
^OMXSPI Stockholm General 312.48 6:44AM EDT Up 3.57 (1.16%) Components, Chart, More
^SSMI Swiss Market 5,865.19 May 25 Up 12.75 (0.22%) Components, Chart, More
^FTSE FTSE 100 5,389.66 6:45AM EDT Up 38.13 (0.71%) Components, Chart, More
FPXAA.PR PX Index 867.10 6:59AM EDT Down 2.50 (0.29%) Chart, More
MICEXINDEXCF.ME MICEX Index 1,296.80 7:00AM EDT Up 15.56 (1.21%) Chart, More
GD.AT Athex Composite Share Price Index 515.04 6:45AM EDT Up 29.86 (6.15%) 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.


Vad’s Catch of the Day


Kaimu’s Sound Money


Deron’s Daily ETF Analysis


OptionOracle


Jake’s Take


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. 4 in Accumulation Zone 16 in Buy alert 1 in... [#109514]
    By: davefairtex (5215 comments) Go to top ↑
    • 4 in Accumulation Zone
    • 16 in Buy alert
    • 1 in Distribution Zone

    Accumulation Zone (20%): Monthly 13, Weekly 28, Daily 21
    Distribution Zone (4%): Monthly 7, Weekly 2, Daily 3

  2. ... [#109515]
    By: Grym (5469 comments) Go to top ↑
    • Grym, The ideal is to encourage China to buy our bonds... [#109520]
      By: mayhem991 (199 comments) Go to top ↑

      Grym,

      The ideal is to encourage China to buy our bonds. Then we simply devalue the dollar. I mean devalue it officially, not devalue it with the FEDs printing presses.

      • mayhem991, "Devalue" relative to what? How would they go... [#109523]
        By: Grym (5469 comments) Go to top ↑

        mayhem991,

        “Devalue” relative to what? How would they go about that? What is the value of a dollar?

        It seems as though it has devalued as measured in price per ounce of gold, but aren’t all major currencies doing likewise?

    • "The announcement by GM's CEO that 70% on their cars are... [#109521]
      By: Corner Stone (369 comments) Go to top ↑

      “The announcement by GM’s CEO that 70% on their cars are being made and sold in China”

      Could I please ask you to use the correct data point when you quote this stat? It’s “70% of cars made in China are sold in China”. It makes a significant difference when evaluating how GM ranks as a trading stock or proxy for the industry/economy.
      Thanks.

  3. Deron - Turns out I do have a question. How do you... [#109516]
    By: davefairtex (5215 comments) Go to top ↑

    Deron -

    Turns out I do have a question. How do you identify the overall market trend? Is it a strictly technical decision? Your trading strategy makes total sense once you identify the trend properly…which seems to make this an important task!

  4. The are once again back up to 6.5%. If they break higher... [#109518]
    By: davefairtex (5215 comments) Go to top ↑

    The are once again back up to 6.5%. If they break higher, it might be meaningless if something can-kickingly bailout-positive happens in the Greek elections…

  5. "Money is concentrating at the top at an unprecedented rate... [#109519]
    By: westcoaster (1130 comments) Go to top ↑

    “Money is concentrating at the top at an unprecedented rate and stagnating in the bond market instead of being invested to create jobs.”
    Krugman advocates keynesian bazooka, chides Bernanke for not taking his own advice, hence failing.
    Liked his recommendation that money be poured into education, rehire teachers, re-tool the country….like back in WW2. (appropriate Memorial Day consideration)
    Happy Holiday Americans. Markets dead without you all!
    http://oilprice.com/Finance/the-Economy/Lunch-with

    • ALOHA!! Money is concentrated in "liabilities", period!... [#109526]
      By: kaimu (3289 comments) Go to top ↑

      ALOHA!!

      Money is concentrated in “liabilities”, period! When you buy a bond(debt) you are giving the green light to more Congressional outlays that beget yet more interventionist policy that creates yet more huge malinvestment globally. Debt begets more debt and so sovereign bonds are the ultimate weapon of mass destruction.

      I was building schools in the San Francisco, CA area back in the 1980s and even then when I spoke with teachers they told me they had to supply school supplies for their students and one librarian asked me if I could get the other contractors to donate money to buy books for the new library we just finished building. That was 1988 and as anyone who lives in San Francisco can attest it is not exactly poverty stricken Skid Row!

      If the cure was to throw money at things then we should have won the Vietnam War and we should have a thriving economy NOW. The problem is we are throwing money at the politicians and bankers. These are the least productive members of our society. These two entities believe in only one thing … “debt”. Their careers are based on it and their family’s future relies on it. There is a very fine line between a drug dealer and a banker and it gets even finer with Krugman. What we need to do when government throws money is to bypass the debt component. The US Constitution designates no central bank. The US Mint just printed the money without the banker middleman skimming interest. Why do we need a banker in the middle? Why does the US Treasury need a US Federal Reserve bank account?

      The system has long been broken and none of it will work until we reform virtually everything in America and start over. JOB ONE is to completely reform our monetary system and get rid of the US FED and the cartel of private bankers that is its members. If you give $300BIL to teachers you only empower their union not the kids in school. Its the same with infrastructure and everything that has been politically tainted. We live in a “monopolized world” where monopolies run everything. In the case of unions labor rates are monopolized and guaranteed by law(Davis Bacon Act). Where is the incentive for competition? How is a monopoly capitalism? Without competition there can be no capitalism. A monopoly restricts individual rights. Once again we have a web of special interest agendas that subvert any real reform … that subvert any real capitalism. Whenever you see the word capitalism substitute “competition” in a business sense, but use the word “rights” from a moral sense.

      Maybe look at Capitalism from a different angle …

      Definition of Capitalism

      “Capitalism” is conventionally defined along economic terms such as the following:
      An economic system in which the means of production and distribution are privately or corporately owned and development is proportionate to the accumulation and reinvestment of profits gained in a free market.

      This is an example of a definition by non-essentials. An essential definition of capitalism is a political definition:
      Capitalism is a social system based on the principle of individual rights.

      In order to have an economic system in which “production and distribution are privately or corporately owned”, you must have individual rights and specifically property rights. The only way to have an economic system fitting the first definition is to have a political system fitting the second definition. The first is an implication of the second. Because the second, political, definition is fundamental and the cause of the first, it is the more useful definition and is preferable.

      Because people often use the term “Capitalism” loosely, “Laissez Faire Capitalism” is sometimes used to describe a true Capitalist system. But this phrase is redundant.

      Capitalism is the only moral political system because it is the only system dedicated to the protection of rights, which is a requirement for human survival and flourishing. Defending individual rights is the only proper role of a government. Capitalism should be defended vigorously on a moral basis, not an economic or utilitarian basis.

      Since the advent of the US FED our rights and our monetary and economic base have been steadily eroded by the use of “debt”. Sadly the US FED powers and those of Congress have only increased over time, especially during the latest credit crisis. The tragedy is that even for those of us who use no debt we are caused to suffer as well, only to a lesser degree. Debt has totally subverted our individual rights. In essence the ECB has taken every Greek citizens rights through the use of debt. If you owe debt you are owned. Debt is not the proper way to govern a country or to live as a citizen. Debt is a tool used only by oppressors not liberators. Who died and made Debt God? For me the true “evil” of money is not “gold” but “debt”. Who can say that debt does not rule the world now? All global markets and currencies go up and down now based on Greek bonds, a tiny country with only 10.7 million people. Talk about wagging the dog! Debt wags the dog …

      • Yo kaimu. I was in France in 68 listening to discussions... [#109528]
        By: westcoaster (1130 comments) Go to top ↑

        Yo kaimu. I was in France in 68 listening to discussions about tearing it down and rebuilding from the ground up. They were unsuccessful and the can got kicked down the road and so here we are today. Hell Rome found their way down by going from 1m citizens to 50k at the nadir. Talk about a triple waterfall. I guess we’ll get there too one day. Meantime I still like to think there are individuals around who give a rip … Teachers and spongelike youth who would naturally swim against the current. Hell many Chinese youth are today. We’ve discouraged all but the most self motivated of ours . Let’s see what the masters of debt can dream up next to kick it down the road and give us a little hope down here in debt hell!
        Simon Johnson says the Euro has decayed beyond redemption.

        http://baselinescenario.com/2012/05/28/the-end-of-

    • Krugman is a laughing-stock. His brain is smaller than God... [#109529]
      By: Ilya (572 comments) Go to top ↑

      Krugman is a laughing-stock. His brain is smaller than God gave a goose. Well, maybe he has a brain the size of a parrot; squawk….borrow and spend….squawk squack. Write a book, get royalties is his only stock in trade.

      And here I was thinking that borrowing and spending coupled with the Fed’s ‘mandate’ of ZIRP was the reason we are where we are. Silly me.

      I think it was uncle Milton Freidman who once toured a construction project in China. He observed thousands of labourers moving dirt with shovels. He asked why they didn’t use machinery and the obvious reply (from no doubt a Krugmanesque Commie ) was that shovels employed more people. It is said that Milton replied “use spoons.”

      What this country needs are more spoon ready projects. Think of filling in Bingham canyon at union wages. Valhala!!!!!!!!!!

  6. Looks like another desperate kick the can effort by the ECB... [#109522]
    By: MoKat (531 comments) Go to top ↑

    Looks like another desperate kick the can effort by the ECB is underway. How long will it last?

    Reuters is reporting:

    “Greece handed 18 billion euros ($22.6 billion) to its four biggest banks on Monday, an official said, allowing the stricken lenders to regain access to European Central Bank funding.

    The long-awaited injection – via bonds from the European Financial Stability Facility rescue fund – will boost the nearly depleted capital base of National Bank, Alpha , Eurobank and Piraeus Bank.”

    • Awesome. No money for medical care, but 18 billion for the... [#109524]
      By: davefairtex (5215 comments) Go to top ↑

      Awesome. No money for medical care, but 18 billion for the banks. Is it just me, or does anyone else notice a trend here?

  7. ... [#109527]
    By: johnuk (860 comments) Go to top ↑
  8. MUX just had 3 positive days in a row, which is almost... [#109530]
    By: Ventilation Blues (164 comments) Go to top ↑

    MUX just had 3 positive days in a row, which is almost unheard of!!. Has it bottomed out and we can expect a return to the $4 level before another huge sell off? +6% last night. Some interesting jitters in the markets with these miners and explorers. GIX leaping about and even a strange positive pop from Asante ASE.

  9. Here are links to 2 separate articles published by The... [#109531]
    By: rosevillebill (150 comments) Go to top ↑

    Here are links to 2 separate articles published by The Street. This is what Google gives you as most relevant when entering NE on their financial ticker input. The time frame is less than 2 weeks and one is an upgrade the other a downgrade. Both articles have almost identical facts and the source named is “a member of The Street’s rating staff”.
    http://www.thestreet.com/story/11537599/1/noble-co
    http://www.thestreet.com/story/11555927/1/noble-co

    Geez, these people must be smart and I’d better run out and subscribe to their newsletter or better yet place my money under their expert guidance.

    I own shares of NE and might add some. I like what the company is doing in their deep water drilling platform purchases. What could hurt them in my opinion is the availability of all the new shale oil. I will do my own research and make a decision and certainly not rely on The Street. More than likely I will sit and wait (I’m definitely learning to wait).

  10. Greed and debt ripping down the edifices of US... [#109533]
    By: Les (7233 comments) Go to top ↑

    Greed and debt ripping down the edifices of US society:

    Once one of the largest law firms in the US, Dewey has been hit by the loss of the vast majority of its roughly 300 partners to other firms amid concerns about compensation and a heavy debt load.

    http://www.telegraph.co.uk/finance/newsbysector/ba