Bill Cara’s Blog for Mar 18, 2013

CTA Trading Desk Morning Report

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

The Cyprus situation is extremely interesting. According to just about every news agency, old Russian money is deposited in the Cyprus banks and the KGB will be out for revenge should their money be “taxed” alongside the Cypriots deposits. We shall see if this outright confiscation of private capital will come to pass without repercussions, but I have to ask; how can this possibly go over well with the public? If it happens in Cyprus, it can happen anywhere, and I do mean anywhere.

This event has the makings of a catalyst worthy of squeezing the massive gold short position taken by hedge funds. At the very least, the CEF and GDX long trades posted here in the last few weeks continue to work and may have marked the lows.

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
^ATX ATX 2,444.73 6:45AM EDT Down 51.74 (2.07%) Components, Chart, More
^BFX BEL-20 2,647.00 Mar 14 Up 18.40 (0.70%) Components, Chart, More
^FCHI CAC 40 3,786.95 7:00AM EDT Down 57.08 (1.48%) Components, Chart, More
^GDAXI DAX 7,943.67 6:45AM EDT Down 99.18 (1.23%) Components, Chart, More
AEX.AS AEX General 349.10 6:45AM EDT Down 4.48 (1.27%) Components, Chart, More
^OSEAX OSE All Share 521.09 6:44AM EDT Down 5.30 (1.01%) Components, Chart, More
^OMXSPI Stockholm General 375.81 6:59AM EDT Down 4.52 (1.19%) Components, Chart, More
^SSMI Swiss Market 7,776.93 6:45AM EDT Down 87.46 (1.11%) Components, Chart, More
^FTSE FTSE 100 6,423.23 6:45AM EDT Down 66.42 (1.02%) Components, Chart, More
FPXAA.PR PX Index 985.61 6:58AM EDT Down 9.31 (0.94%) Chart, More
MICEXINDEXCF.ME MICEX Index 1,495.11 8:00AM EDT 0.00 (0.00%) Chart, More
GD.AT Athex Composite Share Price Index 960.42 Mar 15 Down 7.87 (0.81%) 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 100 Company research notes from Seeking Alpha

Dow Chemical (DOW)

Mar18: 8:48 AM Dow Chemical (DOW) says it plans to build several specialty material production plants on the U.S. Gulf Coast to take advantage of cheap shale-derived natural gas. Dow also reaches agreement to provide ethylene supplies to a petrochemical plant on the Gulf being developed by Japanese oil refiner Idemitsu Kosan and trading house Mitsui.


Qualcomm (QCOM)

Mar18: 5:42 AM Qualcomm (QCOM) has postponed making the second half of a $120M investment in Sharp after the Japanese company missed a deadline to complete the specifications for smartphone and tablet PC screens, and the preparations for their manufacture. The deadline will now move back to June 30. The delay increases the pressure on Sharp, which needs to repay a $2.1B convertible bond in September.


Wal-Mart (WMT)

Mar18:8:22 AM Senior managers with Wal-Mart (WMT) are in India this week to meet with a government-appointed panel looking into the company’s lobbying activities. It’s forward progress for the retailing giant in its slow bid to expand operations in the nation. According to the Indian government, 62 other retailers have been cleared for single brand retail in the nation though getting up and running is another matter.


Vad’s Catch of the Day


Kaimu’s Sound Money


Deron’s Daily ETF Analysis


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



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kaypomors
kaypomors
March 19, 2013 9:29 am

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Ventilation Blues
Ventilation Blues
March 19, 2013 4:09 am

I am interested in Bills indication on the affect of Cyprus, the growing awareness of where people have left their money (ie in Banks), the current media attention and support towards gold, and what must be a potential huge rush now towards people investing in physical gold.
Lets see what CEF does and the POG this week. Should be interesting.

baz22
baz22
March 19, 2013 2:03 am

early May could see an explosive move at ‘ Achn ‘… a Lot is going on…..

xyz
xyz
March 18, 2013 10:58 pm

from Reuters:

U.S. Treasury Secretary Jack Lew, who has talked with his EU counterparts, was monitoring developments closely and expected a “fair” solution, Washington said.

So we now have approved “fair” levels of confiscation of capital.

kaimu
March 18, 2013 9:10 pm

ALOHA!!

A leader is best when people barely know he exists,
when his work is done, his aimed fulfilled, they will say :
we did it ourselves!

LAO TZU

I guess we can classify the entire global political and monetary system “NON TZU”!

bigwad1
bigwad1
Reply to  kaimu
March 18, 2013 9:30 pm

Nobody could find Bush when those airplanes were crashing into those financial buildings out in New York City! NON TZU??????????????

kaimu
Reply to  bigwad1
March 19, 2013 4:10 am

ALOHA!! More like NOT TZU! I thought he was reading fairy tales to kindergartners?? Wasn’t that the infamous video where he was told of the WTC crashes and then he was completely speechless? Ah … hey it was 12 years ago! That’s the point though isn’t it? If you wait 45 years to release really damning evidence that our government is completely corrupt and immoral then who cares? I mean the Vietnam generation is practically dead or on meds and the younger generations operate on out-of-sight-out-of-mind so the impact is virtually a whisper. Imagine if we Vietnam era generation knew… Read more »

Vadym Graifer
March 18, 2013 7:53 pm

(CY) Cyprus President Anastasiades said to have indicated to Eurogroup he does not have enough support to pass the deposit levy through Parliament – financial press – The Eurogroup is said to be holding a teleconference on Cyprus that started about 45 minutes ago. **REMINDER: earlier today, Cyprus DIKO Democratic Party (minority member in the ruling coalition): Will not support the deposit levy law. DIKO holds 8 seats out of 56 in Parliament, and President Anastasiades DISY party holds 20 seats. – Prior reports had indicated that some DIKO party members were wavering in their support of the deposit levy… Read more »

kaimu
Reply to  Vadym Graifer
March 18, 2013 8:54 pm

ALOHA!!

First of all what Cypriot voter would vote for a party named DIKO with a straight face????

Listen up, lets not forget this is not the first “haircut” that European savers have suffered since the advent of the Euro. The first haircut Euro savers got was the day the Euro became a currency! The Euro should have ended before it started …

Vadym Graifer
Reply to  kaimu
March 18, 2013 9:02 pm

Cyprus official languages are Greek and Turkish. I highly doubt that abbreviation sounds the same to them as to you. You don’t want to know how some index symbols sound to Russian ear, particularly AMEX Gold BUGS (Basket of Unhedged Gold Stocks) Index (grin)

kaimu
March 18, 2013 6:13 pm
davefairtex
davefairtex
March 18, 2013 5:15 pm

There really is a qualitative difference between everything you guys have talked about, and what is happening in Cyprus. In the case of Cyprus, every single depositor in every single bank in Cyprus is having 6-10% of their money removed overnight. Unlike us here, normal people don’t notice exchange rate fluctuations, annualized inflation (unless its hyperinflationary), or even sovereign defaults, because nothing happens to their personal bank accounts. But when their account drops by a particular amount over the weekend, the loss is: 1) easily calculated; 2) happens at a specific time – like a gap-down; 3) always occurs by… Read more »

manx928
manx928
Reply to  davefairtex
March 18, 2013 6:55 pm

You’re correct, of course, that bank deposits are considered by us all to be ultimately safe, and thus this is a shocking proposal, but are we really talking primarily about “grandma”and “company payroll” people? Or is the cash on account as held by wealthy non-residents the greater sum? (I’m not claiming that to be the case, I don’t actually know, but I suspect it from a couple things I’ve read.) So, perhaps this is a special levy against the questionable economy that is offshore banking, (i.e. the Cyprus banking system has benefited from their services to wealthy Russians, et al,… Read more »

davefairtex
davefairtex
Reply to  manx928
March 18, 2013 7:06 pm

manx – Even if it is 50% Russian mafia and 50% Cypriot Grandma, it still is the case that each and every Cyprus depositor will suffer a 6-10% loss on their savings accounts over the weekend. Normal people get thrown under the bus, and they are NOT used to this happening – especially when there is a deposit guarantee in place for deposits up to 100k euros. Talk about a bait & switch. “You can definitely trust our depositor guarantee, you will never lose money when the bank fails – but we didn’t say anything about a depositor tax! GOTCHA!”… Read more »

manx928
manx928
Reply to  davefairtex
March 18, 2013 7:35 pm

I guess I’m just used to Government Gotchas – I’m Canadian. 🙁

(e.g. tax change to income trusts)

14them34me
14them34me
March 18, 2013 4:54 pm

“We don’t pay taxes. Only the little people pay taxes”

Ronrayn
Ronrayn
March 18, 2013 3:00 pm

In 2008 the $USD was depreciated by 20%, either by deprciation of currency or simply attacking bank deposits as in Cyprus, the result is the same. So yes people, they are stealing our money, everyones money, everywhere.

JimG
JimG
March 18, 2013 2:16 pm

The plan was laid out three weeks ago in the WSJ…

“…any plan to inflict haircuts would need to be hatched in secret to avoid bank runs”

Keep the public assured…

“I want to be absolutely clear. Absolutely no reference to a haircut on public debt or deposits will be tolerated. Such an issue isn’t even up for discussion,”
President Nicos Anastasiades three weeks ago.

Note Pimco’s involvement…and the usual suspects Bank of America/Merrill Lynch and Morgan Stanley have their foot prints were all over this.

http://tinyurl.com/cgbe3uh

kaimu
Reply to  JimG
March 18, 2013 5:31 pm

ALOHA!! ” … Such an issue isn’t even up for discussion.” Out of the mouth of fools! Yet three weeks later it is and not only is it still an issue but in the interim Cypriots removed $1.7BIL EU anticipating that it would be an issue. So it matters little whether everybody knew or not. What matters is that it is. What I mean by that is … the C WORD! All this as I have been writing about is just but the latest of the vast accumulation of red flags that have led directly to, what I call, the… Read more »

indyrjc
indyrjc
Reply to  JimG
March 18, 2013 3:22 pm

Mish has some interesting comments today on the Cyprus situation; and how Merkel may be involved behind the scenes.

http://globaleconomicanalysis.blogspot.com/2013/03

terryC
terryC
Reply to  indyrjc
March 18, 2013 7:10 pm

Merkel government guarantees German deposits?

I am reminded that in the year of my birth the German government was telling it’s citizens that they were only operating “work” camps for undesireable elements of the population. No government can be fully trusted.

davefairtex
davefairtex
Reply to  terryC
March 18, 2013 7:45 pm

TerryC – From what I’ve read, during the first years of the Nazi regime, that was largely true – before 1938 it was largely just the undesirables, so to speak. And lots of people spent a few months there and were later released. It was only later that things became substantially more evil. Concentration camp prisoner numbers 3,800 Summer 1935 4,761 1 November 1936 7,750 30 December 1937 24,000 30 June 1938 50,000 Mid-November 1938 21,400 1 September 1939 http://www.camps.bbk.ac.uk/resources/preview.pdf Domestic drones looking for illegal immigration, hollow point bullets and hundreds of mine-resistant vehicles bought by DHS, personal financial information… Read more »

kaimu
Reply to  indyrjc
March 18, 2013 5:35 pm

ALOHA!! … how Merkel may be involved behind the scenes. Why is the Merkel re-election back office con game news? This has been the MO of every global career politician since Rome. To me an even bigger crime was perpetrated by Nixon and LBJ back in 1968 in the name of re-election. I posted about that last night. The last of the LBJ tapes were recently released (45 years later)and this was an atrocity against US citizens if ever there was. Worse than what the Muslims who piloted the two jets into the WTC did and worse than the 2,500… Read more »

Ilya
Ilya
Reply to  kaimu
March 19, 2013 3:58 am

Kaimu, The LBJ tapes are old news. Jim Stockdale (Ross Perot’s VEEP candidate) published a book ‘Thoughts of a Philosophical Fighter Pilot’ in 1995 which pretty much ‘exposed’ LBJ and his ‘Whiz Kids’ gambit with regards to the Tonkin incident!!! I have no doubt that Nixon played treasonous politics but then again, that was always his ‘MO” As an aside, Stockdale also had a chapter about Mike Thorton, medal of honor recipient and his involvement as a member of SEAL team six in Vietnam. SEAL team six seemed to be some secret unit until the Bin Laden episode to everyone… Read more »

Grym
Grym
Reply to  Ilya
March 19, 2013 12:46 pm
Ilya
Ilya
Reply to  Grym
March 20, 2013 4:03 am

Hey Grym,
Manchester is a good biographer. I confess to not having read his Churchill work but I plan to do so.

Manchester did a hack job (he despised Germans) with his biography of the Krupp dynasty; ‘The Arms of Krupp’ but aside from that, I respect his writings…

I once had the honour of sitting at his private desk which was on display at an exibit and I became very meek and introspective comparing my life to his.

kaimu
Reply to  Ilya
March 19, 2013 4:06 am

ALOHA!!

The LBJ tapes are old news.

Wrong! The “last” of the LBJ tapes were just released to the public last week. The first ones are old news, but it seems they waited until the very last to disclose that the war could have ended in 1968 had Nixon not gotten in the mix. That’s not old news! Sadly, it seems to be meaningless news though!

Ilya
Ilya
Reply to  kaimu
March 19, 2013 4:37 am

Kaimu, You mis-read history or only acknowlage the history you want to believe. True, the war was over in 68 BUT it was only over because the higher-ups failed to follow up. They emasculated the air forces who were the only ones that could force the issue to conclusion. The B-52 POUNDING of Hanoi a few years later shocked the hell out of the North and made them at least somewhat pliable. OK. Who really won in Vietnam? We did. They now have a bourse and are becoming good Capitalists!!! Read Col. Charlie Parker’s ‘Strategy for Stalemate’ to understand the… Read more »

kaimu
Reply to  Ilya
March 19, 2013 7:27 am

ALOHA!! True, the war was over in 68 BUT it was only over because the higher-ups failed to follow up. What are you blabbing about? I never said the Vietnam War was over in 1968. I said it could have been if Nixon did not “play politics” with the North. Did you even read the BBC link I posted about the last of the LBJ Tapes being released? Read it and get back to me! Who needs your interpretation of history or any Stanford professor’s interpretation when you have LBJ talking history??? Who really won in Vietnam? We did. They… Read more »

ea32da32
ea32da32
Reply to  kaimu
March 19, 2013 12:51 am

Kaimu; that article was very upsetting. Nixon should be known as a war criminal.
Thank you for posting the link.
Earl

kaimu
Reply to  ea32da32
March 19, 2013 2:24 am

ALOHA!! Yes Earl … I know! If that level of duplicity and fraud was going on during the Vietnam War then imagine what sort of fraud has been going on with the Iraq War and Afghanistan War. It boggles the mind when $2.2TRIL was spent!! Just one incident I recall during the Iraq War a number o years ago was the light armor on the Humvees that made them vulnerable to IEDs. I recall stories about US Army personnel having to armor up their own vehicles to make them safer in the field. How many US soldiers died due to… Read more »

Illini
Illini
Reply to  kaimu
March 19, 2013 2:47 am

“How many US soldiers died due to that failed engineering?”

Yes, my nephew was one.

kaimu
Reply to  Illini
March 19, 2013 3:47 am

ALOHA!!

Illini-Sorry to hear that and sorry for bringing up an emotional topic.

Bull Hunter
Bull Hunter
March 18, 2013 2:18 pm

MMM – PT Lifted from $111 to $113 @ Morgan Stanley. Overweight

——

NAHB Index = 44 (down from 46 in February)

skyler
skyler
March 18, 2013 1:32 pm

“…resource estimates have increased to a record level.”

link: http://www.marketwire.com/press-release/mcewen-min

Bill Cara
Admin
March 18, 2013 1:13 pm

BNN’s managing editor Marty Cej had this to say: In the first place, taxing bank depositors as a requirement for receiving aid sets a worrying precedent. If it can be demanded of Cyprus, why not Italy, or Spain? Are bank deposits protected or aren’t they? Secondly, Cypriot banks are a disproportionately large part of the economy, raising the threat of contagion throughout the rest of Europe. Further, if the tax on bank deposits isn’t approved in parliament, there is a real risk of a messy exit from the euro area by Cyprus, which could cause all sorts of volatility for… Read more »

davefairtex
davefairtex
March 18, 2013 1:03 pm

Last night Ilya made a really good point that got me thinking. Referring to capital hiding under the mattress to avoid confiscation, he said: “When the Swiss sold out, as they did, where can a dishonest man earn an honest return? Or said differently, why would an honest man stand for a dishonest negative return?” Its the second half of that got me thinking. Governments depend largely on 80% of honest ordinary citizens going along with the tax regime for everything to work properly. Once the government starts acting in an overtly criminal way – snatching 10% of your bank… Read more »

Grym
Grym
Reply to  davefairtex
March 18, 2013 3:28 pm
Ynot
Ynot
Reply to  davefairtex
March 18, 2013 1:39 pm

Count Vlad to the rescue.

http://www.reuters.com/article/2013/03/18/us-russi

Methinks he doth protest too much.

The ECB has been telegraphing this bailout for weeks now, and the 10% deposit ‘tax’ was announced on Friday, too late for the commoners. There is just NO WAY Putin wasn’t given a heads up on this, along with his inner circle. (And, of course, others ‘in the know’ – nudge, nudge, wink, wink – who are not Russian and/or Cypriot) The Russians who do get hit with this ‘tax’ are just not part of his “cognoscenti”.

Bull Hunter
Bull Hunter
March 18, 2013 1:22 pm

Good morning. 10:00 NAHB Housing Market Index —— CCL – estimates and PT Lowered @ UBS. New PT = $38 CCL – estimates and PT Lowered @ Credit Suisse. New PT = $34 CCL – Carnival Downgraded to Neutral from Outperform at BNP Paribas. CCL – PT Lowered from $46 to $43 @ Stifel. Buy rating. MA – MasterCard Initiated with a Hold @ BNP Paribas. ORCL – PT Lifted from $37 to $40 @ Oppenheimer. Outperform SBUX – PT Lifted to $74 @ Lazard Capital. Buy rating SNDK – PT Lifted from $52 to $60 @ Sterne Agee. Buy… Read more »

davefairtex
davefairtex
March 18, 2013 11:05 am
  • 1 in Accumulation Zone
  • 5 in Buy alert
  • 8 in Distribution Zone
  • 14 in Sell alert
  • Accumulation Zone (7%): Monthly 6, Weekly 10, Daily 6
    Distribution Zone (24%): Monthly 28, Weekly 27, Daily 19

    davefairtex
    davefairtex
    March 18, 2013 11:04 am
  • 10:00 AM ET Housing Market Index
  • 11:30 AM ET 3-Month Bill Auction
  • 11:30 AM ET 6-Month Bill Auction