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I'm inclined to be optimistic so I'd like to argue with you on this, but I can't since I remember the GDP revisions to 2001 data that came about a year later and showed a couple of negative quarters after they had originally been reported positive. As I recall there were 3 quarters revised downward by significant amounts. I guess that a recession is much easier to endure if we don't know we are going through it. We might as well have a big stock rally too while killing time until the next boom.
Yes, that might send some bids to other base metal miners. I'm charting LMC and PCU now. It also begs the question of recession vs continued growth in world demand for copper and other base metals. Last year the Chinese gamed the copper markets and it looks like they are doing so again this year. And I thought this week would be slow and boring, lol.
I found this today also: "Third quarter annualized GDP was up only 1.6% and this was with the help of astounding growth in vehicle sales which is somewhat suspect. Shortly following the data release, Bloomberg reported that that the Department of Commerce found a "statistical fluke" and had reported a 26% increase in auto production. Subsequently, the numbers will be revised downward to a GDP advance estimate of 0.9% for the third quarter. So this year, the GDP has gone from 5.6% to 2.6% to 0.9% in the first three quarters. "
So even with the housing data and the declining GDP growth rate, stocks have risen since July. Many of the Dow 30 have not hit new all time highs and that might mean the blue chips have further to run. Is the broad market signalling that the slowdown will be shallow and short?
Freeport-McMoRan Copper & Gold Inc. (NYSE:FCX - News) and Phelps Dodge Corporation (NYSE:PD - News) announced today that they have signed a definitive merger agreement under which FCX will acquire Phelps Dodge for approximately $25.9 billion in cash and stock, creating the world's largest publicly traded copper company.
http://biz.yahoo.com/bw/061119/20061119005066.html?.v=1
Housing in central Texas is booming. Toyota just opened a new plant in San Antonio creating a couple of thousand more jobs. From San Antonio to well north of Austin, housing is still going up in price. So the "collapse" must be regional. The housing stocks are well off their lows for some reason. Is that just Cramer? I'd like to here what people in other markets are seeing.
Schilling works for Forbes and is famous for his calls for $40 oil over the last couple of years. Take anything he says with a big grain of salt, imo.
The excess storage story is overstated. Demand is up and that makes the days of cover in storage about the same. From the most recent EIA report: "U.S. crude oil inventories remain well above the upperend of the average range for this time of year. Total motor gasoline inventories dropped by 3.7 million barrels last week, and are now in the lower half of the average range. Distillate fuel inventories fell by 3.6 million barrels, and are in the upper half of the average range for this time of year." So one headline number is above the range and the other two are in the range. . . hmmmmm
The weather does affect traders, although it's funny how that forecast was out all week and they chose today to dump their oil positions.
The big washout in oil brought RIG from 76 down to 72.56 with max pain at 70. The move made max pain look like a real magnet. I see what you mean about RIMM. That would be interesting.
Is Max Pain a useful indicator for stocks? If so, how strong is it? http://www.iqauto.com/cgi-bin/pain.pl
thanks in advance
They did this last month too, right before the contract terminates.
Debka started the incorrect rumors about US carrier deployment. Their "Enquirer" style reporting was picked up and spread by many sites, none of which bothered to check the facts. There are not, nor have there been three CVNs in or near the Persian Gulf. The US Navy presence is not unusual, and is scheduled well in advance.
Per the Navy, there were two CVNs in the area earlier this month briefly. The Enterprise left the Fifth Fleet area last week and is in Lisbon on a port call on their way back to Norfolk. The Eisenhower relieved the Enterprise and is in the Arabian Sea. The Eisenhower supports operations in both Afghanistan and Iraq, so they move back and forth. The "Ike" is the only CVN near the Persian Gulf. There are some amphibious warfare ships participating with local countries in scheduled exercises in and around the Gulf. These drills take place every year, but for some reason have been hyped this year, possibly due to U.S. elections.
It is very unlikely that the US would move unilaterally against Iran and even more unlikely that such a move would take place without more air power than is available (Harriers) with the one Expeditionary Strike Group now in the Persian Gulf.
http://www.navy.mil/navydata/navy_legacy.asp?id=146
Here's another thought, If futures traders thought for one minute that there was anything unusual going on in the Persian Gulf, the POO would be well north of the 59 dollar level it hit yesterday.
AMGN reports after the bell. Is anybody playing it long?
Here's one reason for energy to turn around:
OKLAHOMA CITY, Sep 27, 2006 (BUSINESS WIRE) -- Chesapeake Energy Corporation (NYSE:CHK) today announced that it has elected to shut-in a portion of its unhedged near-term natural gas production in light of currently low wellhead natural gas prices. Effective October 1, 2006, the company plans to temporarily shut-in approximately 100 million cubic feet (mmcf) per day of net natural gas production (approximately 125-150 mmcf per day gross) in various areas of operations in the southwestern U.S. until natural gas prices recover from recently depressed levels. Chesapeake's current oil and natural gas production is over 1,600 mmcf of natural gas equivalent per day (91% natural gas) and these shut-ins represent approximately 6% of the company's net oil and natural gas production. Management Comments
Every year energy prices correct in the Spring and the Fall. These periods are called shoulder seasons, when demand drops due to mild weather. For the past 3 years the price of crude has corrected between 20-30% in the fall. Last year the price dropped from 70.85 to 56 from September to December despite hurricane damage to production, refiners and distribution and the lack of elections. (Then it rose back to 70 bucks during the warmest winter in 400,000 years). A 20% correction from the recent high of 79.86 yields 63.88. A 30% correction yields 55.90. So it is reasonable to look for a bottom in crude this year in that range. Given the ample inventories in storage, it is also reasonable to expect prices to remain relatively soft until we get a handle on how severe the winter will be in the Northern hemisphere. The wild cards are disruptions to supply and weather and those zany speculators.
Gasoline looks to be about 15 cents from support.
WRT Oil, I'm not sure where the "lower demand" is. EIA data shows demand is higher than last year and higher than the 5 yr avg. Also, demand rises sharply in the 4th quarter. "World oil use typically rises sharply during winter in the Northern hemisphere. This year, the International Energy Agency in Paris expects fourth-quarter demand to rise by 1.5 million barrels a day from current levels. World oil use is forecast by the IEA to total 86.3 million barrels a day in the fourth quarter." http://online.wsj.com/article/SB115765535454256597-search.html
The various speculative premiums are leaving the poo. No hurricanes (yet), less worries about Iran, and BP bought a big chunk of world surplus to cover the Alaskan shut-ins. It appears that a recession fear is now being priced also. When all the good news is in the price, what's left?
http://www.siliconinvestor.com/readmsg.aspx?msgid=22792529
The Trust’s ordinary operating expenses are accrued daily and are reflected in the NAV of the Trust. The Trust’s expenses include fees and expenses of the Trustee (which include fees and expenses paid to the Custodian by the Trustee for the custody of the Trust’s gold), the fees and expenses of the Sponsor, certain taxes, the fees of the Marketing Agent, printing and mailing costs, legal and audit fees, registration fees and NYSE listing fees. In order to pay the Trust’s expenses, the Trustee sells gold held by the Trust on an as-needed basis. Each sale of gold by the Trust is a taxable event to Shareholders.
http://www.streettracksgoldshares.com/pdf/streetTRACKS.pdf
GLD is slightly below the spot gold price because there is a small slippage due to fees at the ETF. It's in the prospectus.
I'll second that thank you. Have a great weekend.
Thanks, I scalped a bit out of the middle and apparently get to keep it. That was really wild. Cramer was airing a re-run today that pumped NXG. Coincidence? You decide. I wonder which firm was "erroneous" and big enough that they got a do-over?
What's up with NXG? I can't find any news. tia
Put/Call Ratio explained from TheStreet.com:
The Chicago Board Options Exchange (CBOE) equity put /call ratio indicates the sentiment of options traders. Put buyers are betting that stocks will fall, while call buyers are betting that stocks will rise. When the number of puts relative to calls is high, that means investors are bearish. When the number of calls is higher, that means investors are more bullish.
The put/call ratio, however, is often used by the investment community as a contrary sentiment indicator. That is, the higher the ratio, the more bullish it's considered to be, on the theory that investors are too bearish. The lower the ratio, the more bearish, on the theory that investors are too bullish. Generally speaking, a put/call ratio of 0.75 or higher is considered bullish. A reading of 0.40 or below is considered bearish. Anything in between is considered neutral.
On Friday, April 14, 2000, the day when the Dow fell 617 and the Nasdaq dropped 355 -- their worst plunges ever -- the equity put/call ratio hit 0.77. That high put/call ratio marked a short-term bottom in stock prices, as the Nasdaq and Dow rebounded sharply, registering huge gains the following Monday and for the next week.
Investopedia has this and some good charts:
http://www.investopedia.com/articles/optioninvestor/02/052102.asp
When the ratio of put-to-call volume gets too high (meaning more puts traded relative to calls) the market is ready for a reversal to the upside and has typically been in a bearish decline. And when the ratio gets too low (meaning more calls traded relative to puts), the market is ready for a reversal to the downside (as was the case in early 2000).
Historically index options have a skew toward more put buying. This is because of the index put option hedging done by portfolio managers - this is also why the total put/call ratio is not the ideal ratio (it is polluted by this hedging volume). Recall that the idea of contrarian sentiment analysis is to measure the pulse of the speculative option crowd, who, on balance, is wrong. We should therefore be looking at the equity-only ratio for a purer measure of the speculative trader. In addition, the critical threshold levels should be dynamic, chosen from the previous 52-week highs and lows of the series, adjusting for trends in the data.
As with any indicators, they work best when you get to know them and track them yourself. While I don't like to use them for mechanical trading signals, put/call ratios do outline, quite reliably, zones of oversold and overbought market conditions. They should thus be included in any market technician's analytical toolbox.
By John Summa, CTA, OptionsNerd.com
I like USO for your scenario.
Oil may be declining on speculation that Iran will take the deal soon. The September contract terminates trading on the same day (Tuesday the 22nd) that Iran said they would announce their response to the "deal" to stop enriching uranium. The economy is still growing demand for energy as evidenced by the weekly data from the EIA.
The Alfred E. Newman rally: "What, me worry?"
AMAT gave some weak guidance, sees flat q 4 revenues and orders, less optimistic about FY 07 spending, etc. They forecast .29-.30 earnings for next quarter. Once that hit the wires, the price pulled back...
My thoughts also. ;)
Another board is talking about a high CAC, Customer Acquisition Cost. Apparently, MED guided to a lower number (CAC) than they announced.
Also, they are delisting with the AMEX in order to list with the NYSE. But the notice is worded poorly, making it sound like they are being delisted.
The dollar is tanking and bonds are rallying. I'd say the market is discounting further rate hikes.
ATYT - AMD possible buy out.. up after hours. Anybody think this is really going to happen?
YHOO revenues stank. GOOG is also getting killed after hours. EBAY reports tomorrow, so hang on.
Well I appreciate the explanation and the humor. But the way those rates fall off from last October, with each new high lower than the last, I'd say they represent lack of interest, pun intended.
His reference to lease rates is strange. Here is the chart from kitco and I don't see any correlation. http://www.kitco.com/lease.chart.html
Homebuilders have inventories of unsold houses and undeveloped property all over the country. Home prices on the other hand are set in regional markets.
Forex - Dollar boosted by fall-out in peripheral currencies
Friday, June 23, 2006 9:52:27 AM
http://www.afxpress.com
LONDON (AFX) - The dollar was well bid across the board, benefiting from a fall out in peripheral currencies, notably the Kiwi dollar. Market reaction to news that New Zealand's current account deficit has ballooned to 9.3 pct of its GDP was somewhat perverse as it led to flows into the US currency. The US, after all, has a sizeable and growing current account gap of its own
"The dollar has rebounded across the board as the spill over effects from the unwinding of positions in high yield and commodity currencies," BNP Paribas analysts said
However, they warned that the dollar's fine run may come to an abrupt end
"We would not expect the dollar recovery to persist beyond the current position adjustment," they added
New Zealand's current account gap has highlighted the problem about global imbalances and will likely be a negative for all current account deficit currencies including the dollar
And, concerns about the structural imbalances facing the global economy are not likely to go away with the likes of the IMF warning about potentially severe effects throughout the world
That aside, there was also some support for the dollar from expectations among more aggressive risk-takers that the Fed may deliver a hefty 50 basis point rate hike next Thursday, instead of the usual 25
This view, however, is only held by a minority. Markets have fully priced in a quarter point rate increase to 5.25 pct and are betting on a follow up hike in August
"We believe that the dollar will also become vulnerable to slowing US growth and thus higher interest rates, declining equity markets and signs a slowing housing sector do not bode well," BNP Paribas analysts said
The data calendar is light today but attention will be on US durable goods orders or May. A 0.4 pct rise in May is predicted after see-sawing in the previous two months, mostly due to aircraft orders
If the data disappoints, the dollar may well drift lower
APC takes KMG and WGR for big premiums. This should make the sector interesting.
OTD bad news isn't buried. It's all there in the report.
They will run out of cash unless they issue more shares. They need at least 10.5 million bucks and that will dilute the float by at least 20-30%. They failed to get out of developmental status as soon as they led us to believe. It is interesting how they timed the news release. So how far will they drop? The shares were .75 a week ago so that is possible. The entire float has turned over in the last 4 trading sessions, so just about everybody is stranded at higher prices. I'm leaving an alert at 2.45 and looking for the next one.
OTD bad news, back to 1.77 ah. They may trade back to 1.50 or so on Monday after the news gets wide consideration. But their product is sound and after another 30% dilution I expect them to run... oh well easy come easy go.
I still have some TMR smelling up my portfolio. I hope they get their drilling program improved. Caught your email, am too cheap to pay for private mail... I like RGLD but have it from 30 bucks. TRE, SLW too.
The discount rate has risen 475% while gold has risen 41% over the same period. The correlation is positive not negative over this time frame. The Fed began raising rates in June of 2004 when the discount rate was 1%. Gold was under $400 an oz. Now after 15 rate hikes, gold is $564 an oz. That's about a 41% increase in less than 2 years. The quote you put in bold was once true in a pre-Keynesian world. It ignores a real inflation rate well north of 5%, massive deficits, debased currencies, and increasing demand from growing middle classes in China and India. Raw materials like copper, nickel and uranium have risen faster than gold over the same time period. It is amusing that Tricom and Bloomberg would even trot out this silliness. The next rate hike will take the discount rate to 5% and likely see gold at $600 an ounce.
The April futures are still below 64. That contract terminates trading on Tuesday. The May contract is 65.
http://www.futuresource.com/quotes/quotes.jsp?s=CL
http://www.fxstreet.com/nou/gci/gciindices.asp is now showing the May contract with only a 4-5 min delay.
OT question for the aggressive traders. What do you use for tracking cost basis and taxes? Fidelity screwed up my schedule D download this year. Their system has a limit on line items per stock. I just began trying Gainskeeper and want to know what else folks use. Thanks in advance.