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Central Banks Out In Force This Week PDF Print E-mail
Written by FX Street - Strategic Currency Briefing   
Monday, 14 July 2014 07:41

fxstreetxOutlook

The calendar is overstuffed with important data this week in a market that is now free of the dis-traction of soccer in Brazil. In the US, we have Yellen tomorrow and Wednesday, which probably overshadows everything else, and we also have corporate earnings galore, with a lot of banks this week (including Citibank, which just threw itself into the briar patch of the Feds to escape the State of New York). This week in the US we get June retail sales, June industrial production, July NAHB Index, the Fed's Beige Book prepared for the July 29-30 Fed meeting, weekly jobless claims, June housing starts, Philadelphia Fed survey, preliminary June University of Michigan sentiment survey and June leading indicators.

But we also get a ton of data out of China....continue reading HERE

 
More Fireworks To Come PDF Print E-mail
Written by Larry Edelson: Swing Trading   
Monday, 14 July 2014 07:12

STOCKS DOWN, GOLD UP: MORE FIREWORKS TO COME

I hope you paid attention to the market action this past week. The significance of it all is crucial to not only understanding what is going on, but also to protecting and growing your wealth.

First, the stock market has topped. All the evidence I am studying tells me we are now in a bear market that could last anywhere from three to 10 months.

The reason the market has finally topped is simple. It got stretched too high for too long and it needs to pullback and take a break. Much like trying to hold your arm up by your side for as long as you can, at some point, it’s going to feel like a lead weight and you’re going to have to drop your arm to recover. It’s that simple.

Analysts will tell you that corporate earnings for the second quarter are going to disappoint, or some other nonsense. But the fact of the matter is that the stock market needs a break … it needs to pullback and wash out some diehard bulls … and refresh itself before heading any higher.

larryxHow low can the Dow go? Not all that much lower. Worse case, 13,937. Best case: 14,687.05. But it won’t be a vertical drop. There are bound to be some sharp rallies and zigzags along the way lower.

Second, gold is soaring again. Since the first of June, gold is now up almost $100. And the thing is that gold’s recent rally has occurred along with a stronger dollar, something I’ve been warning you would happen.

So why is the dollar stronger when the U.S. economy is weak at the knees and the U.S. stock market is falling? That’s simple to understand too:

A. Domestic U.S. investors who are selling stocks are moving back to cash, which is bullish for the U.S. dollar. And more forcefully …

B. European investors are still flooding into the dollar, fearing a collapse in the euro (which has now started) and all the hair-brained schemes European leaders are devising to try and save the single-currency experiment.

Like raising taxes to insane levels. Like embracing a European Union-wide policy of confiscating depositor money should another European bank fail. And more, much more, including bickering with British authorities now to try and get the U.K. to adopt the euro, which Britain has rejected from the outset of the currency.

And then there are the war cycles I have been warning you about, which are ramping up at a feverish pitch. Ukraine crumbling. Israel and Hamas literally now at war. Japan changing its 60-year nonaggression pact, freeing up its military to confront China. And more. Which is precisely why …

Third, crude oil is now building a stronger base than I had expected, and will likely soon launch higher. I do expect one more pullback in the price of oil, which we are getting now. But soon, oil could jump to $112, then even higher, to $124, before it takes another breather.

Fourth, mining shares — also as I have warned you — are now soaring like a rocket. Some mining shares are up 20 percent in just the past week. Thirty percent, even 40 percent over the past month. Don’t say I didn’t tell you so. I did.

But don’t worry. Mining shares are among the most undervalued equities on the planet. Over the next few years, I see many of them (not all), doubling and then doubling again, while others soar 500 percent, 600 percent and more.

Meanwhile, while all this is happening …

Fifth, deflation has now migrated to the food sector, with the prices of soybeans, wheat, corn, and soybean oil literally collapsing. Corn prices have shed 25 percent since April. Beans, 18 percent since May 23. Wheat, 26 percent since May 9.

Crazy markets you say? They’re not crazy at all. They are doing exactly what they should be doing, exactly what I have forecast and expected.

Sure, my timing has been off a bit on some markets, like the stock market, but the correction appears to be finally here …

And more importantly, once it ends, you will be able to get on board at much cheaper prices … and watch your equity investments grow like crazy as the Dow heads toward 31,000 over the next few years …

Not despite all the problems in the world today — but because of them!

My best counsel right now:

A. Don’t expect your typical summer doldrums for any financial market this year. Instead, expect more fireworks.

B. Don’t accept any common wisdom about the markets, like gold must go down if the dollar is strengthening. Or that mining shares must fall if the broad market slides.

C. Don’t buy into all the garbage out there that these markets are manipulated, and that you don’t have a fair chance at making money as a result. That too is pure hogwash. Both parts of it.

And instead, think for yourself, think out of the box, question everything you hear and read …

Or else you will end up one of the sheep in a pack unknowingly on your way to the slaughterhouse.

Until next week …

Best wishes,

Larry

The post Stocks Down, Gold Up: More Fireworks to Come appeared first on Money and Markets – Financial Advice | Financial Investment Newsletter.

 

 
Sentiment Improves As Investors Hope For More Uptrend PDF Print E-mail
Written by Paul Rejczak - Sunshine Profits   
Monday, 14 July 2014 07:11

The main U.S. stock market indexes gained 0.2-0.6% on Friday, extending their recent move up, as investors’ sentiment improved ahead of quarterly earnings releases, among others. Our Friday’s neutral intraday outlook has proved accurate(link). The S&P 500 index extended its short-term consolidation, as it remained above month-long upward trend line. The resistance is at around 1,980-1,985, marked by July 3 all-time high of 1,985.59. The next resistance is at the psychological level of 2,000. On the other hand, the level of support remains at around 1,950-1,690, marked by recent local lows. For now, it looks like a flat correction within long-term uptrend, as we can see on the daily chart:

1

Expectations before the opening of today’s session are positive, with index futures currently up between 0.3% and 0.4%. The European stock market indexes have gained 0.5-0.8% so far. Investors will now wait for some quarterly earnings releases. The S&P 500 futures contract (CFD) is in an intraday uptrend, following last week’s downward correction. The nearest important resistance is at around 1,975, marked by recent highs, and the support level remains at 1,950-1,960, as the 15-minute chart shows:

2

The technology Nasdaq 100 futures contract (CFD) is relatively stronger, as it trades close to long-term high. The resistance level is at around 3,915-3,920, and the level of support is at 3,890-3,900, among others:

3

Concluding, the broad stock market extends its consolidation, as the S&P 500 index trades slightly below its early July all-time high. We remain neutral, as there may be some more volatility following medium-term uptrend. We think that it is better to stay out of the market at this moment, just to avoid low risk/reward ratio trades. Earnings season can be a time of increased volatility as investors react to news from the companies. So, it may be better to cut back on your trading or even move to the sidelines completely, especially following recent run-up. We’ll let you know when we think it is safe to get back in the market.

Briefly in our opinion, no speculative positions are justified.

Our intraday outlook remains neutral, and our short-term outlook is neutral:

Intraday (next 24 hours) outlook: neutral
Short-term (next 1-2 weeks) outlook: neutral
Medium-term (next 1-3 months) outlook: neutral
Long-term outlook (next year): bullish

 
Silver Market Update PDF Print E-mail
Written by Clive Maund   
Monday, 14 July 2014 06:42

Whilst acknowledging that "this time it could be different" we have no choice but to call gold and silver lower on the basis of their latest extraordinary COT charts, which reveal that the normally wrong Large specs are already "betting the farm" on this rally. This is especially the case with silver where the Commercial short and Large Spec long positions are already way in excess of what we saw at the March peak.

Let's start by looking at the latest 6-month chart for silver. On this chart we can see that following its big up day in mid-June silver has only made incremental gains, creeping higher by about 75 cents over the past several weeks.

34499 a

The 1-year chart will enable us to make a direct comparison with the latest COT chart placed right below it, which goes back about a year...

34499 b

34499 c

By comparing these 2 charts we can see how the peak and troughs in the silver price have a strong correspondence with the peaks and troughs in Large Spec long positions. What is truly startling about the latest COT chart is the extraordinary explosion in Commercial short and Large Spec long positions in recent weeks, with readings way in excess of what we saw at the March peak, so that the COT structure for silver is much more extreme than that for gold, which itself is at a 1-year record by a wide margin. If history is precedent this points to an imminent reversal and significant drop by silver.

To repeat what was written in the parallel Gold Market update, the crux of our argument is this. If this apparent new uptrend has got legs, then COT positions, both Commercial short and Large Spec long positions should build up steadily as the uptrend proceeds towards an eventual peak when the uptrend is mature - not explode to huge levels right at the get-go. There is an argument that "this time it's different" and that on this occasion the Commercials are wrong, and when they realize that they are, they are going to rush to cover and create a meltup. The chances of this being the case are considered to be low, and you need to be brave, and perhaps stupid to place bets on the basis of it. We should not forget that the Commercials have unlimited ammo to throw at the paper price to make sure that their will prevails.

34499 d

The long-term chart for silver continues to look promising, so one scenario here is that silver now backs off one last time towards its lows, before the expected major new uptrend begins.

 
Grandich Observations PDF Print E-mail
Written by Peter Grandich   
Monday, 14 July 2014 05:35
 
 

 

U.S. Stock Market – The list of bearish fundamentals and technical continues to grow. Whether it’s another year of high-hopes GDP predictions that end up falling hard as the year progresses, or the fact that the deeper ones goes across the board in equities, the weaker the market’s performance has actually been.
I do suspect that the “powers-that-be” are in overdrive to sustain equity prices at these levels. Unfortunately, 30+ years of experience tells me it’s not if, but when the weight of reality over powers them. The longer they fight it the worse the decline shall be.

U.S. Bonds – I continue to see far too many people who have chased income yields overloaded with junk bonds (or as the Street likes to call them – high-yield bonds). The spread between these bonds and Treasuries has shrunk to an alarming level and has given me cause to think actually betting against junk bonds going forward is a worthy speculative bet.

Gold and Silver – As these two daily charts show, coming into today’s trading, gold had reached overbought and silver was screaming overbought. That’s why it comes as no surprise that after six straight weeks of gains, we see some heavy profit-taking at the start of the week.

You can also rest assured that the shorts had to take a stand at $1,340 because of its technical significance and will do so even more at the critical $1,400 area. Silver’s $22 area will also be key resistance so it shall be healthy if it worked off some of the deep overbought condition it presently finds itself in before challenging that level. It’s actually constructive and would come as no surprise to me that by weeks-end, we made up most, if not all the decline we see today in gold and silver.

U.S. Dollar – There’s only one thought you need when thinking of the long-term future of the U.S. Dollar –here it is

Special Note – It seems no matter how I try not to do so, I must remind certain readers again and again not to waste time getting all worked up over comments made anonymously in cyberspace (chat boards). Unfortunately, some fall prey to demented souls who use these places to act out in manners they never even would dream of doing so in the light of day and for all to see who and what they are (and more importantly, what they are not!).

In this regard, I will comment on my personal largest holding and the only company I still have any type of consultant position with, Sunridge Gold.

First, the good part. The company has apparently reached a point on the corporate ladder few junior resource companies ever make – the threshold of becoming a producer. That in itself is a worthy accomplishment. Second, I think the world of its CEO Michael Hopley. He’s old school and the furthest thing from a typical Vancouver promoter that you can still find running many juniors. And third, the prices of its main assets, copper and zinc, have risen sharply, which should benefit any M & A potential or valuations on those looking forward to SGC becoming a producer.

Now the not’s - so –good. If SGC has had a weak link it’s been on the investor relations and corporate communications side. This isn’t necessarily a bad thing given what embellished, half-truths and actual lies I’ve seen companies portray to the public. I’m confident that doesn’t happen at SGC because if it did, I would’ve nothing to do with them.

I do think things in the past (and even now) should be done differently but even as the single largest shareholder and a consultant, I can just make this known and move on. Unfortunately, others seemingly can’t. Therefore, I shall make no comment about SGC to anyone (my wife and priest – both of whom who own it not included) except here on the blog and in interviews. Sorry if this offends close friends, followers, etc. but I’m tired of having to respond to SGC inquiries every single day. SGC is  important to me but not to the point of having to go over it seemingly endlessly. It’s painfully obvious some have taken my personal comments, twisted them for their own desires and then those comments get twisted even more so - leading many to contact me over and over again.
I promise to share all I can and to let you know what I think – good, bad or in-between. I’ve let Michael Hopley know what I think they can do to greatly improve their corporate investor relations and communications side of things and am confident he will do his best as he has done on the asset development side of things.

My compensation from SGC is equity options, of which I don’t believe I have exercised any for several years:
300,000 @ $.22
37,500 @ $.50
200,000 @ $.55

 

 
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Tyler Bollhorn
21 July 2014 ~ Michael Campbell's Commentary Service

Have you ever wondered why companies with good businesses often fail to perform well while stocks that trade at prices not justifiable by...   Read more...

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