CTA Trading Desk Morning Report
[2:40pm ET] Good afternoon, Bill here.
For most independent investors and traders, it’s been a tough year – one that I opined in mid-November would change for the better, and it started out that way. Unfortunately, for some us, we have held steadfast in our belief that capital market and economic conditions were such that precious metals ought to be lifting as well. Instead they have been basically side-tracking and then suddenly dropping at times, without warning. However, I’ll now opine that precious metals are basing for a lift-off sometime in April and that equity indexes like GDX and GDXJ will double within ten (10) months.
My associate Harp Singh, who previously in the blog has given us roadmaps and also presented his views at the Cara Toronto 2012 Conference, and will again this year, uses his own technical analysis tools to project future prices. He called today to say he believes that massive buying will commence on or soon after April 1 and that this Bull run will persist through mid-January to mid-February 2014. He believes all equity sectors will be involved as the broad market moves higher.
How high? For the DJIA, Harp is looking for a move to 14700 and then a ~3% pull-back say to 14200 before the Dow lifts to 15600 or possibly higher into next January. At 1556 the S&P 500 has already broken out and will now side-track a bit before following the Dow higher. He projects a first move in the S&P to 1610-1625 before pulling back to 1565, which would be followed by a surge to 1775-1800 into January. For Gold, he’s forecasting a top in the same timeframe at 2900-3000 with a candlestick on top possibly in the 3200-3300 level.
In Harp’s words, “the equity market, particularly precious metals equities, will soon give us the highest return in the shortest time that it has for several years. This will be a good market to trade, and all investors should be long.”
You know that there are always two sides to any perspective on capital market prices. But, as you also know, I do agree with Harp’s forecast. In fact both of us believe that a falling US Dollar will be the great enabler.
All views are welcome, of course.
[7:00am ET] Good morning, Geoff here.
As I write this, equity futures are slightly lower but gold and gold miners are up with miners outpacing the metal. We have been waiting for metals and miners to finally bottom and when they do, we will see short squeezes start a profitable rally in the space.
The CEF trade study that I posted a couple of weeks ago was the start to that trade but it is only up slightly at this point. However, the fact that it never got stopped out is a success and looks to mark the exact end of the decline. It was a high potential buy with a defined stop-loss area – exactly the type of trade that I like. (FD: we are long CEF).
Here is the updated GDX chart. The long trade continues with the next buy point marked along with the sell-stop. Remember, this is not a recommendation to buy or sell a security.
I rarely, if ever, post trades in this manner so please remember that this is a simply a trade study and not a recommendation to buy or sell securities. (FD: we are long a number of gold and silver mining stocks).
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|
||0.52 (0.02%)||Components, Chart, More|
||2.30 (0.09%)||Components, Chart, More|
||3.24 (0.08%)||Components, Chart, More|
||1.70 (0.02%)||Components, Chart, More|
||0.74 (0.21%)||Components, Chart, More|
|^OSEAX||OSE All Share||526.69
||1.04 (0.20%)||Components, Chart, More|
||0.42 (0.11%)||Components, Chart, More|
||15.03 (0.19%)||Components, Chart, More|
||2.97 (0.05%)||Components, Chart, More|
||6.23 (0.60%)||Chart, More|
||0.00 (0.00%)||Chart, More|
|GD.AT||Athex Composite Share Price Index||934.03
||4.34 (0.47%)||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 Seeking Alpha
Mar11: 11:00 AM The launch of the fabled Amazon (AMZN -1.1%) smartphone has been pushed back from Q2 due to manufacturing challenges at Foxconn, display industry contacts tell Digitimes. A Taiwanese paper previously reported the phone would launch in Q2 or Q3. If/when the phone arrives, Amazon is expected to be as aggressive with pricing as is has been for its Kindle tablets and e-readers.
Mar12: 7:37 AM Jefferies’ Peter Misek cuts his price target on Hold-rated Apple (AAPL) to $420 from $500. He’s slashing his revenue numbers and seeing about a 25% chance the company misses Q1 guidance after Jefferies’ recent supplier checks. “Historically when handset makers fall out of favor, they fall faster/further than expected.” Shares -0.7% premarket.
Mar12: 7:00 AM Boeing (BA) has reportedly received an $18B order from Dublin-based Ryanair for 200 jets in a deal that is set to be confirmed next week, when Irish Taoiseach Enda Kenny visits the White House. It’s not clear whether Ryanair will acquire the 737-800 or Boeing’s new ‘Max’ model. The booking would be one of Boeing’s largest ever and presumably mark the end a feud that goes back to 2009 over a collapsed order.
Broadcom Corporation (BRCM)
Mar11: 7:02 PM A new Broadcom (BRCM) digital cable adapter SoC makes it easier for cable video to be delivered to “Boxee boxes, smart TVs and other types of IP-connected video devices,” Light Reading observes. The BCM7576’s integration of an IP mini server allows it to decrypt content so that it can be shuffled around home networks, and onto retail devices. The chip can also handle up to four video feeds using a single-tuner – current adapters often require multiple tuners.
Mar12: 6:56 AM A bright spot from Costco’s (COST) FQ2 report is that membership fees rose 15% to $528M – an improvement based on volume not a price hike. Looking at the retail sector, William Blair says the company’s low e-commerce profile helped keep it strong in merchandise categories while peers Target and Wal-Mart slipped in February. 3:24 AM More on Costco (COST) FQ2: net profit +39% to $547M, boosted by a $62M ($0.14/share) tax benefit. Comparable sales +5%, with U.S. +5%, international +6%. Excluding positive impact of forex and gasoline prices, comparable sales +5%, U.S. +5%, international +4%. Operates 622 warehouses, plans to open another 14 by end of FY.
Enterprise Products Partners LP (EPD)
Mar12:7:45 AM Enterprise Product Partners (EPD) receives the transportation commitments necessary to support development of a 270-mile Gulf Coast ethane pipeline. It will originate at the company’s Mont Belvieu, TX facility and transport ethane to multiple petrochemical plants in Texas and Louisiana.
Exxon Mobil (XOM)
Mar11: 9:52 AM Exxon Mobil (XOM -0.3%) says it has started production from the Telok natural gas field, located offshore Malaysia in the South China Sea. The Telok A platform is the first phase of the Telok natural gas project, which will consist of two four-legged unmanned gas satellite platforms; a total of 14 development wells are planned.
25 Footlocker (FL)
Mar11: 7:53 AM Sterne Agee’s Sam Poser recommends buying Foot Locker (FL) after shares fell off following the company’s disappointing Q4 results . The analyst thinks the retailer’s margins will improve and notes valuation levels are attractive.
Mar12: 8:30 AM Merck (MRK +3.3%) says that the Data Safety Monitoring Board will allow the company to continue with its large-scale trial of its blockbuster Vytorin cholesterol drug, indicating that no safety issues have come up. Some analysts had hoped that the trial would already have demonstrated Vytorin’s effectiveness and so could be halted. Alas, the study will continue until September 2014.
Mar11: 2:46 PM Starbucks (SBUX) continues to increase its investment in locally-sourced coffee beans in China as it sees forecasts for coffee consumption for the region continue to move higher. The market for packaged coffee products is estimated to be set to rise 75% to 16B yuan ($2.5B) by 2017 which fall in line with the company’s plans for 1,500 stores by 2015. Early response to American phenomenon Starbucks in lower-tier Chinese cities has been stronger than expected.
Toyota Motors (TM)
Mar11: 2:24 PM Toyota (TM +0.4%) wrapup: 1) The automaker says it will increase hiring during FY13 to reverse a two-year trend. 2) A new political action committee in the U.S. will be tasked with looking after Toyota’s interests in North America. 3) Recent comments from execs reveal that Toyota will become more flexible about shipping car production from one nation to the other to improve efficiency. 4) The Lexus brand is desperate to see relations between China and Japan cool off with new forecasts showing annual luxury car sales will exceed 3M by 2020.
Mar11: 2:24 PM Vale (VALE +0.3%) confirms it is suspending investments in its $6B Rio Colorado potash project in Argentina, which it says is not “in line with Vale’s commitment to discipline in capital allocation.” The project has been plagued with cost overruns due to inflation which has raised labor and materials expenses.
Mar11: 8:28 AM A government panel in India rules that Indian companies don’t have to make disclosures about their lobbying activities in a determination which could have a favorable read-through for Wal-Mart (WMT). The same panel is expected to issue its report on the U.S. retailer to the government next month.
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