Posts Tagged ‘Reason’
Monday, March 1st, 2010
Adam Hewison, MarketClub, explains a gold indicator that has stood the test of time:
It’s been about eight days since we did a video on gold, and given the market action today I thought I would look at what is causing the downward pressure in this market.
If you did not watch my last video on gold, I strongly recommend you click here to watch the video titled “Five Reasons Why Gold Will Not Make a New High This Time” as it will give you a bigger picture of how we see this market playing out in the next 12 months.
In today’s short video we look at an indicator that we have not talked about before in any of our videos. The indicator, which is an overlay on top of the chart, is called the Donchian Channel Indicator.
Richard Donchian, who has since passed away, came up with this indicator in the late ’40s. The reason why I like this indicator is the fact that it has successfully stood the test of time. I think you’ll really enjoy seeing how it can help you make money in the gold market.
Also in this video, I point out one very important cycle that is in play now and where I think the next tradable low is coming into this market.
Tags: 12 Months, 40s, Donchian Channel, Downward Pressure, Eight Days, Gold, Gold Market, Marketclub, Money Market, Reason, Richard Donchian, Test Of Time, Videos
Posted in Markets | No Comments »
Thursday, November 19th, 2009
With the US dollar falling down a precipice, spare a thought for non-US investors invested in US stocks and bonds.
The graph below shows the performance of US 10-year Treasury Notes since the beginning of March in both US dollar terms (red line) and euro terms (blue line). Whereas US investors are showing a poor return of -2.8% for the period, European investors are completely under water to the tune of -17.5%. For the year to date the figures are -4.8% (US dollar) and -10.5% (euro). (Although I am using the euro in this example, the same logic applies to most other non-US dollar currencies.)
Source: StockCharts.com
The next graph illustrates the same principle for equities by comparing the performance of S&P 500 Index in US dollar terms (red line) with the same Index from the viewpoint of a euro investor (blue line). Whereas US investors have every reason to be very pleased with a return of +64.1%, euro investors are lagging quite far behind with +39.2%, which becomes more pronounced when compared to a return of 55.4% for the European Top 100 Index. For the year to date the figures are +22.9% (S&P 500 - US dollar), +15.6% (S&P 500 - euro) and +21.9% (European Top 100).
Source: StockCharts.com
It is understandable that European investors are not ecstatic about the greenback’s slide and will keep having reservations about committing funds to US assets until they see signs of the dollar forming a bottom.
Tags: 10 Year Treasury Notes, Amp, Assets, Currencies, European Investors, Graph, Greenback, Investor, Logic, Principle, Reason, Red Line, Signs, Spare A Thought, Stocks And Bonds, Stocks Bonds, Us Dollar Terms, Viewpoint
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Friday, July 31st, 2009
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Initial Jobless Claims were 9k more than expected. But Continuing Claims were 103k less than expected. As we have regularly noted, Street spinmeisters ignore Continuing Claims when they are worse than expected but herald the rebound in the job market when they are better than expected.
We noted almost two months ago that Continuing Claims were set to decline appreciably but it would NOT be a sign of a jobs rebound. It would be Americans exhausting their unemployment benefits.
Over the past month numerous pundits and the media have reported on the increasing number of people that have exhausted benefits or were about to exhaust their unemployment benefits.
Bloomberg: The unemployment rate among people eligible for benefits, which tends to track the jobless rate, held at 4.7 percent in the week ended July 18. [This suggests the Continuing Claims decline is due to benefits exhaustion.]
The ‘Exhaustion Rate’ [of unemployment benefits] jumped to 49.77 in June, up .60 from May. This suggests that about 400k people (Continuing Claims) exhausted their unemployment benefits in June.
And we can reason that x-hundred thousand people exhausted their benefits as July progressed. This would account for virtually the entire decline from the Continuing Claims peak of 6.9m – regardless of seasonal adjusting chicanery.
Is this a reason to rally? Of course not!
So why the big rally on Thursday? We addressed this a few days ago when we opined that July performance gaming should commence late on Wednesday. And we regularly note that performance gaming is most intense on the penultimate day of the marking period, which was yesterday.
We also remarked that anxiety over Friday’s GDP report would induce traders to insure that markets received maximum gaming on Thursday.
It was amusing to watch the financial media, especially the TV networks, try to explain Thursday’s rally on fundamentals. Some tried to attribute the rally to Motorola’s smaller than expected loss!
Please make some notation on your calendars that highlights expiration week and the penultimate day of the month. These are the periods of maximum upward manipulations of stocks.
PS – Trading sources said Goldman bought 1000 SPUs after the open yesterday.
Source: Bill King, The King Report, h/t The Big Picture.
Tags: 9m, Anxiety, Bill King, Chicanery, Exhaustion, Few Days, GDP, Gdp Report, Hundred Thousand, Initial Jobless Claims, Jobless Rate, Motorola, Plea, Pundits, Rally, Reason, Rebound, Tv Networks, Unemployment Benefits, Unemployment Rate
Posted in Gold, Markets | No Comments »
Thursday, May 21st, 2009
Mint.com creates great, attention getting charts. As the old saying goes, a picture says a thousand words. The US-China trade chart below does a great job of presenting how both countries trade with each other and the rest of the world.
Introduction by Mint.com
Like it or not, the US and China have a trading relationship that has global repercussions. The plastic US flags that say Made in China don’t tell the whole story. No, not everything is made in China. In fact the US manufactures and exports almost as much as China but it consumes a great deal more. Hence, the trade imbalance. What’s interesting is exactly what the US imports, stuff like machinery and toys and as much steel and iron as it does shoes. And what we export — high-tech stuff like airplanes and medical equipment and, for some reason, 7 billion dollars worth of oleaginous fruit which is used to make cooking oil, presumably for Chinese food.
Click On The Image For A Larger Version (Note:Image accessed via Mint.com)
Tags: Airplanes, Billion Dollars, China Trade, China Trading, Chinese Food, Cooking Oil, Countries, Flags, Global Repercussions, Job, Medical Equipment, Mint, Reason, Relationship, Rest Of The World, Shoes, Stuff, Toys, Trade Imbalance, World Introduction
Posted in Economy, Emerging Markets, Markets, Oil and Gas | No Comments »
Friday, December 19th, 2008
Yep, the share prices of the two mining giants have crossed. After suffering another sickening fall on Thursday, Rio shares (down 10 per cent) are now trading at £10.40, about 4p lower than BHP’s.
This is seriously embarrassing for Rio. After all, BHP’s abandoned bid was pitched at a ratio of 3.4:1.
Of course, the reason Rio is being dragged lower is debt. And Rio has a lot of it - $40bn to be precise, against a market value of $27bn.
The company says it will be able to meet its debt repayments ($8.9bn is due next September) and does not need a rights issue.
But the market doesn’t believe Rio, and the result is a sinking share price.
Since BHP walked away last week, Rio shares have fallen 58 per cent.
Related links:
No respite for Rio - FT Alphaville
Source
Tags: Alphaville, Bhp Billiton, Bid, Debt Repayments, Ft Alphaville, Giants, Lot, Parity, Reason, Respite, Rio 10, Rio Tinto, Share Price, Share Prices, Shares
Posted in Markets | No Comments »
