Levy Forecasting On Deflation Train, Don't Tell TIP ETF (Chart)

From Tech Ticker. From the first video David Levy, President of Levy Forecasting said, "I think Treasuries (although I'd have a very diversified portfolio) and very high quality Corporate bonds makes sense here.... We're expecting a great deal of weakness in the economy on and off over the next couple of years more with a brush of deflation....".





Don't tell this to the TIP ETF, check out the recent break out. It could be related to the 1,014 October 102 calls open in the money. TIP closed at 102.88 today up 0.36 and the Oct 102 call was up 0.40 to 1.00. I'm wondering when those were bought.

TIP (Courtesy of Stockcharts.com)
TIP October Option Chain (Courtesy of Yahoo Finance)

Also a little history on Levy Forecasting (The Levy Forecasting Center, LLC)

"PREDICTING THE PULSE OF THE ECONOMY (New York Times)
By PENNY SINGER
Published: Sunday, January 10, 1988

WHAT everyone in business needs is a good crystal ball. But to be of value, forecasts must be accurate, and a Chappaqua consulting group, Levy Economic Forecasts, has compiled one of the best records in the country for predicting turning points of the business cycle in the United States for the last 40 years.

Forecasting the economic future is the business of S. Jay Levy, who started Levy Economic Forecasts with his late father, Jerome Levy, in Manhattan in 1949. In 1956 the company moved to Chappaqua to distance itself from the turmoil of Wall Street - in order to gain perspective on its work, Jay Levy said, Now with his son, David, as his partner, Mr. Levy publishes Industry Forecast, the oldest, paid-circulation publication of its kind in the country. Published monthly since 1949, the Levys's newsletter has attained a reputation for accuracy by predicting recession periods over a 25-year span." (Read full article)

Tech Ticker Video Sources:
First Video: Seek Bonds, Not Stocks as Deflation Is the Threat, Not Inflation
Second Video: America's "Very Soggy" Outlook: Why the Recovery Won't Be V-Shaped
Last Video (not embedded): No Way Has Housing Bottomed, Says David Levy

Alan Greenspan: Market Flattening Out Will Put Dull Face on 2010 (Bloomberg Interview)

Quotes from Video #2:

Alan Greenspan: "I think a very major part of this recovery that we have seen is a function of the huge spilling over of liquidity in the system which is coming from all of these capital gains, and it's hard to envision[?] going up 50% and then going up more. The odds are I have to assume that we flatten out, even though earnings are doing well as you know, and that flattening out is probably going to put some sort of dull face on 2010 but I don't look for an actual contraction [ ]...

Al Hunt: "But not 3-4%..."

Alan Greenspan: "I would doubt it."

Michael Moore On Capitalism Killing Newspapers

"They'll blame it on the internet"... What are blogs considered??? It looks like capitalism transferred news reporting to a different medium which in my opinion is better and faster than ever before. So how is that bad?

For Rail News Visit ProgressiveRailroading

Put http://www.progressiverailroading.com/rss/prnews.asp in your reader. Check out their blogs, news..

About: "Features a daily news feed, editorial blogs, industry event calendar, and an overview of each month's issue of the printed magazine."

Website: http://www.progressiverailroading.com/

Posted by newsbysector.blogspot.com.

Paul Tudor Jones Predicts 1987 Crash, Dow in Eighties v. Twenties, Portfolio Insurance Crisis (Derivatives)

If this video sticks, Paul Tudor Jones and his team look at correlations between the 1920s and 1980s, predicting the 1987 crash. From Trader: the Documentary in 1987.



*I wanted to add this an excerpt from a Paul Tudor Jones interview in 2000. He mentioned "there was a tremendous embedded derivatives accident waiting to happen in the crash of '87 because there was something in the market that time called portfolio insurance". Sounds similar to the 2008 credit default swaps accident.

"Q: Can you give an example?

Paul Tudor Jones: Certainly. The one on a percentage basis that's been the most profitable for me was the crash of 1987. There was a tremendous embedded derivatives accident waiting to happen in the crash of '87 because there was something in the market that time called portfolio insurance that essentially meant that when stocks started to go down it was going to create more selling because the people who had written these derivatives would be forced to sell on every down-tick. So it was a situation where you knew that if you ever got to a point where the market started to go down that the selling would actually cascade instead of dry up because of the measure of these derivative instruments that had been written. And in the crash of '87 you had an overvalued market and you also finally had a situation where every down-tick would create more selling and I think I understood the dynamics of that. The crash was something that was imminently forecastable to somebody that understood the measure of derivatives and how large they had grown in such a relatively short period of time and the impact that it would have on a relatively unknowing and na'e market. And the same exact thing happened in 1990 in Japan." Full interview here

$GLD, $TLT, $UUP - Something Has To Give Here

Something has to give with GLD, TLT and UUP. Looking at the 3 month chart UUP (the US Dollar long ETF)has been trending lower with TLT (20+ Treasury bonds) and GLD (gold ETF) moving higher. If there is runaway inflation positioning why is TLT catching a bid. If there's deflation going on why is UUP selling off. Those questions will be answered soon and will allow a nice trade imo. As of 12:01 eastern time today, $TLT is now unchanged, $GLD is up 1.09% and $UUP is down -.57%.

GLD, TLT, UUP 3 Month Chart (Courtesy of Stockcharts.com)
5 Day Chart (Courtesy of Stockcharts.com)

This sounds right: "RT @Infovestment item of the day is crude oil,the fantasy has once again hijacked all markets,it suppresses the USD and lifts all commods"

Google Wave Demo Video, I Like Website Embed Feature

I always wondered why Gmail didn't allow embedded Youtube videos. I think Google Wave fills that void. The team in the video said if email was invented today it would be like Google Wave. From their site:

"Google Wave is an online tool for real-time communication and collaboration. A wave can be both a conversation and a document where people can discuss and work together using richly formatted text, photos, videos, maps, and more."

It is very cool because it brings in other social networks, including Twitter, and Waves have an embedding feature for websites and blogs. I would like to embed charts and videos on this blog and have other people add their own charts, videos and comments below the post. They wouldn't have to be at the blog to comment which is the best part. Google Wave looks very cool and I'd like to try it out.

For Articles on Mining Investments Visit Resource Investor

This is a good site for news on the metals and mining market. Sections include precious metals, base metals, rare earth metals, mining investments, commodities and more.

"ResourceInvestor.com is a free service to investors, financial professionals and other stakeholders who participate in the mining, drilling and piping sectors.  ResourceInvestor.com was founded in 2004 by Timothy Wood. It subsequently became a subsidiary of Pfingsten Publishing. It is now managed by Futures Magazine, which is a unit of Summit Business Media." (ABOUT)

Posted by newsbysector.blogspot.com.

JJC, Comex Copper at Trend, Moving Averages, COT Inflection (9/28)

DV is watching the Comex Copper December Futures contract and JJC (IPATH UBS COPPER ETN). Both appear to be at the current uptrend line and below the 50day moving average. Copper is a huge recipient of the global reflation bid at this point and if there is a correction, copper could fall (opinion of course). If JJC breaks below trend it could hit 34.30 then 31.30 depending on catalysts. Look at the big volume spikes on down days.. The Dec Comex Copper future looks the same. Also if the 20dma crosses the 50dma to the downside that could bring downside momentum. $2.50 and $2.25 look like targets if downside movement takes over. These levels aren't officially broken yet, but I'm watching Copper.

JJC (Courtesy of Stockcharts.com)

Copper Comex Dec Future (Courtesy of Optionsxpress)

More on Copper's commitment of traders. From this chart from cotpricecharts.com net commercial hedgers vs. large speculators open interest is around par. Large speculative traders are a tiny bit short while commercials and small speculators are a tiny bit long. These levels aren't off the charts like February so a new trend has to tip large specs one way or another to profit off of price, unless I'm off here.

Copper Commitment of Traders (Courtesy of cotpricecharts.com)

UPDATE 1-Chile's Sonami sees 2010 avg copper price $2.50/lb (Reuters)
Copper Retreats On Chart Selling After Inventory, Homes Data (WSJ, 9/24)
Shanghai copper falls on lower LME, weak equities (Metal Bulletin)
Copper May Drop in London as Inventories Rise, Dollar Gains (Bloomberg)
Pricey metal (Business Standard)
The importance of copper: Panic and recovery (Resource Investor)

$TLT Above Resistance, Hedging Market or "Stern" Fed?

I'm watching TLT break above resistance heading toward 100, $UUP (USD Long ETF) testing resistance and GLD, SPY bouncing off of support, something has to give here. I find TLT's strength here interesting. This strength could be hedging a market/reflation trade correction or it could be betting on the Fed. Read this Reuters article. It noted Kevin Warsh's oped piece in the WSJ and it's "stern" tone on fighting inflation. IMO, last thing we need right now is another inverted yield curve.

"The reasoning behind the disparate paths was clear enough. If investors bet short-term rates will rise quickly, then they feel comfortable about the longer-term path of inflation, making them feel better about holding bonds that mature in seven years or more." (Reuters)

TLT
UUP

GLD

SPY

Great Site For Alternative Energy Stocks (altenergystocks.com)

Altenergystocks is a superb site for alternative energy/clean tech sites.

AltEnergyStocks.com provides high-quality, original research into alternative energy, renewable energy, and clean technology companies. (About section)

All stocks section is here. Sections include: CleanTech, Battery, Biodiesel, Biofuel, Biomass, Clean Transportation, Coal-To-Liquids, Electric Grid, Electricity Storage, Energy Efficiency, Environmental Market, Ethanol, Flywheel, Fuel Cell, Geothermal, Hydroelectric, Hydrogen, Microturbine, Mutual Funds and ETFs, Ocean Power, Pollution Control, Power Production, Smart Grid, Solar Stocks, Waste-to-Energy, Wind Stocks.

Posted by newsbysector.blogspot.com.

Marc Faber Sees Stock Market Correction, Fiscal Debt Crisis (Bloomberg Interviews)

Here are more interviews with Dr. Evil, Dr. Doom Marc Faber on Bloomberg Television. He thinks there will be a rebound in the US Dollar and a correction in stocks and gold. So that is where Doc Doom stands in the short term. Bloomberg video link. Here is the underlying article: Marc Faber Says Stocks Have Likely Peaked for 2009 (Bloomberg).


Here's a three part interview from September 22, 2009. "The next crisis will bring down the entire capitalistic system". Fast forward to 5:43.

S&P and Oil Performance Gap, Will SPX Follow Oil Lower? (Charts)

First off how about those DEC Crude Oil $60 Puts! I wrote about crude's inflection point two days ago. Oil broke down and premium spiked on the $60 Dec put, which is up 117% since that post (1.09 to 2.37). For those who speculated or hedged with puts, congrats. $WTIC spot (W.Texas Crude Oil) declined 8.18%. It broke the 50 day moving average and could test $60 support eventually. The 200 day moving average is at 56.56. Traders could retest the 50dma (now resistance) first, we'll see.

West Texas Crude Oil (Courtesy of Stockcharts.com)

The market is starting to roll over with Crude. During the past month W. Texas crude ($WTIC) declined 8.5% while the S&P gained 2.2%. Since oil and economic growth are directly related the 10.7% performance gap should, in my opinion, get filled sooner or later. Will the market take oil's lead here or could this possibly be a fake dollar denominated sell off.

Continue reading >>

Fed FOMC Statement, Scales Back TAF, TSLF (9/23-9/24)

The Fed plans to "gradually scale back facilities in response to continued improvements in financial market conditions". Let the unwind begin?

Source: FederalReserve.gov
Release Date: September 23, 2009
For immediate release

Information received since the Federal Open Market Committee met in August suggests that economic activity has picked up following its severe downturn. Conditions in financial markets have improved further, and activity in the housing sector has increased. Household spending seems to be stabilizing, but remains constrained by ongoing job losses, sluggish income growth, lower housing wealth, and tight credit. Businesses are still cutting back on fixed investment and staffing, though at a slower pace; they continue to make progress in bringing inventory stocks into better alignment with sales. Although economic activity is likely to remain weak for a time, the Committee anticipates that policy actions to stabilize financial markets and institutions, fiscal and monetary stimulus, and market forces will support a strengthening of economic growth and a gradual return to higher levels of resource utilization in a context of price stability.

With substantial resource slack likely to continue to dampen cost pressures and with longer-term inflation expectations stable, the Committee expects that inflation will remain subdued for some time.

In these circumstances, the Federal Reserve will continue to employ a wide range of tools to promote economic recovery and to preserve price stability. The Committee will maintain the target range for the federal funds rate at 0 to 1/4 percent and continues to anticipate that economic conditions are likely to warrant exceptionally low levels of the federal funds rate for an extended period. To provide support to mortgage lending and housing markets and to improve overall conditions in private credit markets, the Federal Reserve will purchase a total of $1.25 trillion of agency mortgage-backed securities and up to $200 billion of agency debt. The Committee will gradually slow the pace of these purchases in order to promote a smooth transition in markets and anticipates that they will be executed by the end of the first quarter of 2010. As previously announced, the Federal Reserve’s purchases of $300 billion of Treasury securities will be completed by the end of October 2009. The Committee will continue to evaluate the timing and overall amounts of its purchases of securities in light of the evolving economic outlook and conditions in financial markets. The Federal Reserve is monitoring the size and composition of its balance sheet and will make adjustments to its credit and liquidity programs as warranted.

Voting for the FOMC monetary policy action were: Ben S. Bernanke, Chairman; William C. Dudley, Vice Chairman; Elizabeth A. Duke; Charles L. Evans; Donald L. Kohn; Jeffrey M. Lacker; Dennis P. Lockhart; Daniel K. Tarullo; Kevin M. Warsh; and Janet L. Yellen.


---------


Source: FederalReserve.gov
Release Date: September 24, 2009
For release at 10:00 a.m. EDT

The Federal Reserve on Thursday announced schedules for operations under the Term Auction Facility (TAF) and the Term Securities Lending Facility (TSLF) through January 2010 and other information related to those facilities.

These schedules are consistent with the intention indicated in the Federal Reserve's June 25 press release to gradually scale back these facilities in response to continued improvements in financial market conditions.

The schedules also take account of the possibility that market pressures could be heightened over year-end. As noted in previous announcements, the Federal Reserve remains prepared to expand its liquidity operations more generally should financial market conditions deteriorate materially.

Schedules are attached.

Term Auction Facility

Under the TAF facility, to date the Federal Reserve has reduced offered amounts from a peak of $150 billion per auction to $75 billion per auction as conditions in short-term funding markets have continued to improve. Under the schedules announced Thursday, the Federal Reserve will continue to offer $75 billion per 28-day auction through January in order to ensure that an adequate volume of funding is available in the period leading up to year-end and over year-end. Reductions in the sizes of those 28-day operations are expected to resume early next year. The amounts offered under the existing cycle of auctions of 84-day funds will be reduced to $50 billion effective in October and to $25 billion in November and December, and the maturities of those operations will be reduced. The purpose of shortening the maturities is to align the maturity dates of those operations with the maturities in the cycle for 28-day funds. With the completion of that transition, the auction schedule will be converted by early next year to a single cycle of 28-day funds offered every 28 days.

Over the next several months, the Federal Reserve will assess whether to maintain a TAF on a permanent basis and will publish a request for public comment on a range of possible structures for a permanent TAF.

Term Securities Lending Facility

As announced on June 25, the Federal Reserve has discontinued Schedule 1 TSLF operations and TSLF Options Program operations. It has also reduced the frequency and size of its Schedule 2 TSLF operations. Consistent with recent further improvements in conditions in secured financing markets, the amounts offered in TSLF auctions will be scaled back further from their current size of $75 billion. As indicated in the attached schedule, TSLF offerings will be reduced to $50 billion in the October auction and to $25 billion in the November, December, and January auctions in the current 28-day cycle of auctions.

Peter Schiff Expects Dow/Gold Ratio to Equal 1!

Peter Schiff was on Tech Ticker today.. He thinks the Dow/Gold ratio could equal 1 and he sees Gold at 5,000/oz! The ratio is currently trading at 9.77/1. Below I provided a chart.






Dow:Gold Ratio (Courtesty of Stockcharts.com)

Marc Faber is Bearish on Dollar, Prefers Gold and Stocks With Inverse Correlation

Marc Faber is not bullish on the Western world compared to emerging economies. There will be negative consequences as a result of the Fed printing money and the $2 trillion fiscal deficit. Faber is highly confident there will be an economic collapse after this reflationary boom. He believes the standard of living will decline due to inflation and Governments will go to war to divert attention away from the public. Damn... But he's basically saying ride the reflation wave until all hell breaks loose.


Source: Yahoo Tech Ticker

It's interesting that he switched his view on the Dollar. On August 15 Faber thought the US Dollar would rally for a few months with a market correction. It could still pan out. He did acknowledge the risk of the "Fed being a money printer". From this interview on 9/24 he said just that, before the economic collapse the S&P/US Dollar pair trade will move higher given the inverse correlation. He said you can protect yourself from dollar depreciation by buying real assets (commodities). As for stocks he likes Chesapeake Energy to take advantage of an eventual rebound in natural gas prices and Nova Gold.



I'm stocking up on Macbook Pros, Verizon internet cards, canned food, farm land and a glock.

Oil Put Options, MACD, RSI, Implied Volatilities, OVX Update

Watch oil here..

"Oil Options Hit Highs as Verleger Predicts 44% Plunge (Update3)

By Alexander Kwiatkowski and Grant Smith

Sept. 21 (Bloomberg) -- Oil traders are paying more than ever in the options market to protect against a plunge in crude prices.

The gap between prices of options betting on a decline and those that would profit from a rise in oil widened to a record 10 percentage points, according to five years of data compiled by Banc of America Securities-Merrill Lynch. Crude stockpiles in the U.S. are 14 percent larger than a year ago and OPEC is pumping 600,000 barrels a day more than the world needs, according to the International Energy Agency."

"“There’s all this heating oil with no place to go,” Philip Verleger, a professor at the University of Calgary and head of consultant PKVerleger LLC, said in a phone interview. “I’m fairly certain we’ll see prices in the $30s this year.”"

"While Verleger has dropped a forecast made in July that oil would sink to $20 a barrel, traders are anticipating a decline. The Nymex’s most popular option is the right to sell December crude at $60 a barrel, with 69,244 contracts outstanding, exchange data show. The right to sell at $50 a barrel is the second most widely held. The December 60 put option rose today 47 percent to $1.66." (Full Bloomberg article)

Today the December $60 put closed at $1.09 with 67,502 open. Premium was pulled down since that Bloomberg article. For recent views on oil put/call implied volatility visit these blogs.

Oil Put Demand, That Is (Daily Options Report)
Volatility Skew in Crude Oil Options (Don Fishback)
Bloomberg Option Blooper (Sigma Options)

Crude ($WTIC) looks like it's trading in an ascending triangle which is bullish however it must break above $75 with conviction. A break below $69 would create a lower reaction low and be bearish for crude (with volume). Technical indicators are forming a symmetrical triangle around critical levels. For example the MACD (Moving Average Convergence Divergence) and RSI (Relative Strength Index) are at the 0 and 50 level respectively. A run above or below those levels will decide the direction of strength and momentum. Oil has been riding the 50 day moving average higher and must break below that level (69.50) to prove it can move lower.


$WTIC Chart Courtesy of Stockcharts.com

Another interesting chart is the Oil Volatility Index ($OVX) which is hitting 40 lows for the fourth time. The OVX has been in the 40-50 range since May with oil trading between 63-75.


OVX Courtesy of Stockcharts.com
Will the reflation trade (commodities, S&P, levered loans, risk) just pause and refresh or will it shake out longs at some point? But with what the Government is doing how could they ever be nervous? Crude oil inventories are still up year over year. Read the DOE report ending 9/11. Inventory data is set to be released today. The American Petroleum Institute showed a rise in inventories on 9/18. Oil Falls After Industry Report Shows Increase in Fuel Supplies (Bloomberg). Stay tuned..

ARBX Financial Trends Plus a Volume Spike (Hitting Switches at Arbinet)

I saw a volume spike in Arbinet Corp (ARBX). Over 200,000 shares traded, a number not seen since April.


ARBX 4 Month Chart

DV analyzed Arbinet's financials on April 3 and here is an update. Quarter over quarter revenue and equity declines are leveling off and operating and cost improvements, along with a forex gain, helped out operating and net income this quarter. The operating and net income lines increased every quarter since 12/31/08 but they are still clocking losses. Net income is almost in the black at -967k. The charts below of total revenues, operating income, net income and equity use financial data from Yahoo Finance. Also price/sales(ttm)=0.14 and price/book(mrq)=1.14.

Continue reading >>

Restaurant Delevering Continues, Tishman On CRE (Video)

Restaurant sector continues to delever and reorganize it's balance sheet.



Roseville developer shuts his T.G.I. Friday's restaurants (Sacbee.com)

Owner of 70 Jack in the Box restaurants seeks bankruptcy protection (MercuryNews.com)

Alizadeh's Jack in the Box franchise forced to seek Chapter 11 (Rosevillept.com)

Tavern on the Green Files for Chapter 11 (New York Times)

Bankruptcy Takes A Bite Out Of The Big Apple (WSJ Blogs)

Tishman, CEO of the Tishman Construction Corporation, discusses the commercial real estate industry on CNBC. Commercial Real Estate Is Next Bubble to Burst: Tischman (CNBC).






More News On CRE:

Moody's: Commercial real estate prices falling (AP)

Investors Expect Bank Woes May Finally Jump-Start Distressed Buying Opportunities (CoStar)

BMO's Adornato on CRE, Capitalized REITs and Distressed Buys (Interview Aug 24)

LeFrak, Bair: Commercial Real Estate Loan Losses On Small Banks 2010 (Interviews)

$UUP Back In Early 2008 Channel (Charts, Call Option Interest)

Here are recent UUP (US Dollar Bullish ETF) charts (2 year, 6 months, 2 months, 6 weeks). It is trading at 22.76. First off, looking at the 2 year chart UUP is back in the early 2008 channel (21.92-23.07). UUP has been trending lower since April and volume recently picked up in the ETF and it's call options. $UUP could retest the downtrend to fill that 23.14 gap but requires a strong catalyst to break above that trend. Below is open interest that stood out in the October, December and March 2010 options. Wondering if there's an ounce of speculation in the calls. UUP volume is hitting levels not seen since September 2008, right after Lehman went under. Right now there is a lot of pressure on the USD, from carry trades (1, 2) to shorts betting against USD dilution. However it is interesting that UUP short interest ending on 9/1 was down 52% from 1.53 million shares short to .72 million. Watch the daily updated $UUP chart below to scope out a potential trade on an upside trend break, or watch it die. Mo' Money, Mo' Problems Bernanke!!

October $23 Call, 14,879 open at 0.25
October $24 Call, 19,563 open at 0.10
October $24 Put, 2,713 open at 0.50

December $23 Call, 32,623 open at 0.45
December $24 Call, 24,127 open at 0.30
December $25 Call, 12,055 open at 0.15
December $23 Put, 3,418 open at 0.80
December $24 Put, 3,278 open at 1.52
December $25 Put, 1,030 open at 2.30

March $24 Call, 6,628 open at 0.55
March $24 Call, 32,029 open at 0.30
March $24 Put, 2,423 open at 1.75

Continue reading >>

Q2 Household Equity Up But Asset/Liabilities Ratio At 65 Year Low!

Well reflation is working at some extent. Household net worth increased $2 trillion during the second quarter as DV expected mainly because the stock market rallied, housing prices ticked up month over month and debt declined a tad. This is interesting, from 2007 (around the peak) to 2009-Q2 household assets were down 14% ($78.2 to $67.2 trillion) while liabilities were only down 1.7% ($14.318 to $14.068 trillion)...

Continue reading >>

Peter Schiff for Senate 2010, Stop Mal-Investment!

Lets make America worth something other than one big sub-prime credit. Stop the mal-investment, Peter Schiff for Senate, US Dollar Index to 185 by 2012!!


Trade Weighted US Dollar Index (St. Louis Fed)

Recent Shipping & Maritime Industry News: SeaTrade Asia Online

Check out http://www.seatradeasia-online.com/ for latest news stories on the global shipping industry.

"About Seatrade

The original Seatrade magazine and quarterly Seatrade Cruise Review are the premier providers of information on the global shipping and cruise markets.

Seatrade also provides management training for the cruise sector through Seatrade Cruise Academy and for general shipping through Seatrade Anatomy of Shipping courses at Cambridge, England.

Some Seatrade events are owned by CMP and organised in association with Seatrade Communications Ltd.

For more details please visit www.seatrade-global.com"

Posted by newsbysector.blogspot.com.

Natural Gas: V-shaped Recovery Or $2.50 Retest, Karl Miller is Bearish

If the economy sees a V-shaped recovery why not natural gas? Karl Miller, a globally recognized energy executive and institutional investor who bid on over $25 billion in energy assets in his career, thinks natural gas will correct to $2.50-$2.75 mmbtu. He wasn't bullish on MLPs either and thought equities were overvalued. Natural gas rallied hard to $3.80 today from an intraday low of $2.40 last week. Karl aside, is natural gas seeing a V-shaped recovery or another bear market rally? Below I provided the Natural Gas December 2009 Futures chart which is at an inflection (or deflection) point and the most recent EIA storage report which is bearish and must revert to the 5 year range for $NATGAS to see a sustained bid imho.

Energy Industry Icon Calls for Lower U.S. Natural Gas Prices; Industry at Record Storage Levels and No Demand Drivers

MIAMI, Sept. 15 /PRNewswire/ -- Karl W. Miller, a senior energy executive and institutional investor, today issued the following statement through his advisor VBCC, regarding the fact that U.S. natural gas is at record storage levels and overpriced.

Mr. Miller re-affirms expectations for natural gas to correct to the $2.50 to $2.75 mmbtu price range and will continue getting cheaper, as there will be no sustainable drivers either by natural gas fired electricity generation or industrial demand in the U.S. for the next 6-8 quarters.

The natural gas pipeline companies, master limited partnerships (MLP's) and natural gas producers will suffer substantially reduced earnings during the next 6-8 quarters and are substantially overvalued at the current time.

Oil is dollar based, but has no linkage to the price or demand of natural gas in the U.S.

Mr. Miller retains a sell recommendation on U.S. publicly listed renewable energy companies. He predicts we will see many of these companies, which are reliant upon massive government subsidies, state approval of pass through price increases, and highly levered fail and/or will be purchased at distressed prices. Source

----------------------

Energy Industry Icon Calls Markets Overvalued and Overbought; Energy Commodities Especially at Risk

MIAMI, Sept. 15 /PRNewswire/ -- Karl W. Miller, a senior energy executive and institutional investor, today issued the following statement through his advisor VBCC, Markets Overvalued and Overbought; Energy Commodities Especially at Risk.

Mr. Miller agrees with Mr. Art Cashin's, director of floor operations at UBS Financial Services, statements today that the equity markets are substantially overvalued and overbought.

Earlier today, Mr. Miller predicted that natural gas will correct to the $2.50 to $2.75 mmbtu price range and will continue getting cheaper, as there will be no sustainable drivers either by natural gas fired electricity generation or industrial demand in the U.S. for the next 6-8 quarters.

In line with Mr. Cashin, Mr. Miller expects the natural gas pipeline companies, master limited partnerships (MLPs) and natural gas producers will suffer substantially reduced earnings during the next 6-8 quarters and are also substantially overvalued at the current time.

Mr. Miller retains a sell recommendation on U.S. publicly listed renewable energy companies. He predicts we will see many of these companies, which are reliant upon massive government subsidies, state approval of pass through price increases, and highly levered fail and/or will be purchased at distressed prices. Source

Natural Gas December 2009 Future (Courtesy of OptionXpress)

"Working gas in storage was 3,392 Bcf as of Friday, September 4, 2009, according to EIA estimates. This represents a net increase of 69 Bcf from the previous week. Stocks were 495 Bcf higher than last year at this time and 503 Bcf above the 5-year average of 2,889 Bcf. In the East Region, stocks were 163 Bcf above the 5-year average following net injections of 55 Bcf. Stocks in the Producing Region were 269 Bcf above the 5-year average of 830 Bcf after a net injection of 13 Bcf. Stocks in the West Region were 72 Bcf above the 5-year average after a net addition of 1 Bcf. At 3,392 Bcf, total working gas is above the 5-year historical range." source: eia.doe.gov



Working Gas in Storage Compared to 5 Year Range (eia.doe.gov)

Natural gas has been a great trade during bear market rallies. At some point the 1.3 year downtrend will break and perhaps that is why 10,000 January 2010 Calls are open at $10. To be continued.

Track Active Vessels via Maps, Google Earth Satellite: Vesseltracker.com

Check out Vesseltracker.com if you are interested in monitoring active ships on the waters globally. Definitely a great economic indicator if ships are DARK. They cover vessels across ports and regions around the globe. Download their Google Earth file and you can see if ships are active or not via satellite.

Posted by newsbysector.blogspot.com.

Baltic Dry Index Exposed, Down 43% From June Highs (Chart)

Perhaps the reason why the $BDI is down 43% since June? When is the next inventory rebuild?



Read ZeroHedge post for more info and pics.. and vesseltracker.com for updated pics
1) Thousands Of Rusting Ship Hulls Are A Fitting Tribute To The Speculative Market Bubble (Zero Hedge)

2) Revealed: The ghost fleet of the recession anchored just east of Singapore (DailyMail)

3) Baltic index drifts lower, cargo enquiry light (Reuters India)

4) Shipping Rates Seen Falling 50% on China, Fleet Size (Bloomberg, Aug 31)

Continue reading >>

For Solar News & Commentary Visit Solar Feeds

I needed to add a solar site to newsbysector. I follow SolarFeeds on Twitter and they have a good blog for information and news on the solar sector. Their website is http://www.solarfeeds.com aka Solar Feeds. They have a bunch of contributors. About Solar Feeds:

"Solar Feeds is the largest solar power news and commentary blog network on the web."

Overall it will be a great site for the eventual push into solar energy. Also check out nanosolar.com.

Posted by newsbysector.blogspot.com.

S&P Above 38.2% Fibonacci Retracement, Eyeing 50% at 1,121

Technical update: From October 2007 highs 1,576.09 to March 2009 lows 666.79, with the S&P currently trading at 1,053 it is above the 38.2% retracement level 1,014 and is eyeing the 50% retracement level at 1,121.44. Meaning the S&P is eyeing the level to recoup 50% of it's losses from the October 2007 high. It is riding the steep uptrend and there's a downtrend that hits just above the 50% level. Watching for a blow out top sooner or later.


S&P 500 (Courtesy of Stockcharts.com)

US Dollar 3-Month Libor Cheaper Than Yen, Franc (Chart), 0.295%

Remember when banks were frozen and 3M Libor spiked to 4.75% on October 9, 2008? Remember it was a big relief when Overnight Libor declined 51% to 2.469% the next day? Now USD 3M Libor is at 0.29%! Perhaps Bernanke deserves some "props" for unfreezing credit lines for working capital. When looking at 3 Month Libor today across popular carry currencies, the USD is now cheaper than the Japanese Yen and Swiss Franc to fund higher yielding assets. Will funds continue to pile onto this trade and devalue the USD or will a catalyst widen yields and unwind the carry trade?






Other articles:
Dollar Near Weakest This Year on Record-Low Borrowing Costs (9/15/09)
Dollar Diminishing Makes U.S. Favorite for High-Yield (9/14/09)
Lord Lamont: Dollar As Carry Currency Is Risky Phenomenon (blog post today)

For Libor charts go to Bloomberg.com: US Dollar 3M Libor, Yen 3M Libor, Franc 3M Libor.

Rick Santelli and Liesman Argue On Lehman's Anniversary

Hell yeah Rick!



Previous clips:

Rick Santelli and Traders Rally for Capitalism at the Chicago Board of Trade (CBOT)

and..

Liesman vs. Santelli Regarding "Dumb Things"!

Lord Lamont: Dollar As Carry Currency Is Risky Phenomenon (CNBC)

Former British Chancellor Lord Lamont was on CNBC with Jim Rogers this morning. Jim is still banking on a currency crisis or terrible inflation and mentioned the risk of protectionism and dealing with Central Europe's horrible loans.

Lord Lamont said we've seen the end of fear and output falling but the road ahead will not be a strong recovery because there is still debt deflation in the system and banks will be cautious to lend. At the end Lamont said the US Dollar becoming a carry currency is a risky phenomenon. By the way, Germany just issued $4 Billion in Dollar Denominated bonds.

Nassim Taleb Speaks Before Congress on Value-at-Risk Model Defects

Nassim Taleb (Fooled by Randomness speaks before congress on the defects of modeling complex systems.

Bank of China's Zhu Min Bloomberg Interview (9/10/09)

I couldn't embed the full interview, the full video is here.


Quick points from the interview:

• Plenty of infrastructure projects in China to soak up liquidity
• Risk of asset bubbles forming due to ample liquidity
• Money needs to go to real projects
• Wall Street feels like the crisis never happened (over-myopic)
• Financial crisis stabilized from a cliff drop
• At the end he said: The real economic crisis is just starting

Wall Street Is ‘Myopic,’ Bank of China’s Zhu Says (Bloomberg)
Bank of China’s Zhu Sees ‘Bubbles’ in Asset Markets (Bloomberg)
China’s New Lending Quickens, Money Supply Rises by Record (Bloomberg)

More analysis by Andy Xie (Former Economist at Morgan Stanley):
Andy Xie: Shanghai Index Fairly Valued At 2,000, Could See Bounce (Video)
FXI Put Protection, Andy Xie On China's Bubble

Input Prices Rise Globally (ISM, JPM Global PMI, HSBC China PMI)

Tonight DV Economics will look at backward looking data, the U.S PMI, JP Morgan Global PMI and CLSA/HSBC China PMI report (Purchasing Manager's Index). The U.S ISM report showed decent growth in Manufacturing, New Orders and Input Prices but a contraction in Employment as expected. The JPM Global PMI and China PMI showed similar growth. It looks like the global stimulus effort reflated crude goods (commodities) to manufacturing inputs successfully. Will input price inflation spread to producer-finished goods and consumer prices?? I charted input price trends below.

Continue reading >>

Headlines and Statistics on the Tire Business

Go to Tirebusiness.com for information on the tire business! You can find global statistics including tire company operating ratios, earnings ratios, spending trends, R&D spending trends, largest Chinese owned tire makers etc. They also have an online news video (TB:Live). Their RSS feed provides headlines. Interesting on the tire biz.

Posted by newsbysector.blogspot.com.

China Rubber Industry Association Responds To Tire Tariff

If you've been reading the news lately, tariffs and duties on Chinese steel and tire imports have been enforced by the Obama Administration. The China Rubber Industry Association responded to Obama today (below). Prof. Perry at Carpe Diem does a simple economic analysis and cost v. benefit on the tire tariff. Bush had a tariff on imported steel back in 2003 but lifted it after 20 months. Last thing we need right now is trade disruption.

Continue reading >>

Puts Active On XLF and Regional Banks For Next Week

Yesterday was an interesting day in XLF. Fred Ruffy of WhatsTrading.com saw that 108,000 traded on the September $14 Call at $0.15. Fred mentioned this on Twitter along with a 50k ratio put spread on $WFC. Open interest increased today over 100k so the trade wasn't closing out an existing seller, was it a new seller?? The trade could be hedging a potential head and shoulders top which could eventually test the $13.88 neck line. If it was bought-to-open, the $1.62 million (108k*100*.15) used to buy these contracts have 5 business days to exercise below $13.85 or sell out on a volatility spike. It is currently trading at $14.54.

Continue reading >>

Check Out Nanosolar's Panel Assembly Factory (Video)

Is solar the next big thing?

Nanosolar Completes Panel Factory, Commences Serial Production (Nanosolar.com)
An Overview of Nanosolar’s Cell Technology Platform (White Paper, 9/09)




ht beanieville

Hecla Mining Breaks Out, Calls Up On Silver Production, Cost Outlook

Hecla Mining ($HL) spiked 11% today on it's revised silver production and cash cost outlook. They also mention the Lucky Friday Mine. Hecla is riding the silver train at the moment (more below).

Hecla Updates Guidance Increasing Silver Production and Lowering Cash Costs Per Ounce

COEUR D’ALENE, Idaho--(BUSINESS WIRE)--Sep. 9, 2009-- Hecla Mining Company (NYSE:HL) is pleased to announce improved operating performance, increased exploration spending and an update on the development plans for the Lucky Friday mine.

Hecla’s operations continue to show marked improvement as a result of previously implemented plans which focused on lowering cash costs through cost-cutting and optimization programs. Increased production volumes, improved grade control measures and greater availability of hydroelectric power at the Green Creek mine have led to lower operating costs in 2009 compared with 2008. Prices for by-product base metals have also rebounded sharply since early June which helps to reduce operating costs at both the Greens Creek and Lucky Friday mines.

As a result of these programs and improved business conditions, Hecla is revising anticipated full year 2009 silver production to 10.5 to 11 million ounces from 10 to 11 million ounces. The estimate of cash cost per ounce of silver has been reduced by a third to less than $3.00 per ounce of silver from the previously announced estimate of $4.50 per ounce.

Hecla Mining Company President and Chief Executive Officer Phillips S. Baker, Jr., said, “If prices for metals remain at their current levels we should generate substantially more operating cash flow this year than anytime in Hecla’s hundred year history. Second quarter cash flow was $20 million and, importantly, compares favorably with our competitors who produced more silver but at higher operating costs thereby providing less operating margin.”

Baker continued, “Our people have done an excellent job of managing the operations. At Greens Creek we lowered operating costs by increasing throughput while the ore grade at the Lucky Friday mine has improved approximately 10% as a result of grade control measures. In addition, we have also benefited from higher by-product metal prices. I am excited that we have announced a second reduction in our cost guidance and I am confident that we should have full-year cash costs below $3.00 per ounce. These are important achievements and I believe that the location of our mines in the U.S., Hecla’s leverage to a rising silver price and the cash flow generation that we are seeing today makes Hecla an attractive investment.”

EXPLORATION

As part of Hecla’s commitment to grow its production and reserves in its four district-controlling land packages, Hecla has expanded planned exploration expenditures almost 40% to $9.5 million for the year with $7 million being spent in the second half of 2009.

Surface drilling is already underway on the Northeast Contact target at the Greens Creek mine, on the Vindicator property east of the Lucky Friday mine and on the Bulldog vein which is part of the San Juan joint venture in Colorado where Hecla owns a 70% interest. The remaining 30% of the joint venture is held by Emerald Mining and Leasing, LLC and Golden 8 Mining, LLC. Surface drilling should commence at the San Sebastian property in Mexico in the fourth quarter. By early October, nine drill rigs are expected to test our projects in Alaska, Colorado, Idaho and Mexico.

LUCKY FRIDAY MINE

Preliminary work on studies underway at the Lucky Friday mine in Idaho indicates that mine-life can be materially extended under several alternatives. The studies are examining deep development options to mine beyond 2015 under different capital and development schedules. The lower capital alternative could extend mine-life at Lucky Friday by four years for an estimated investment of less than $10 million. The capital required would be deployed to increase the cooling capacity of the ventilation system and for mine development using existing infrastructure.

A second scenario, requiring a greater capital investment is currently the subject of a feasibility study that will detail long-term infrastructure development of the mine that could extend mine-life by several decades. The feasibility study started earlier in the year... Continued here.

Hecla's Home Page can be accessed on the Internet at www.hecla-mining.com.

Source: Hecla Mining Company

DV is revisiting a Hecla post from May 20. Hecla is up with silver due to inflation expectations and a weak dollar¹. There is still business risk involved with this company, they recently deferred preferred dividend payments to conserve cash and to not violate a bank credit agreement. Earlier this year they had to amend credit agreements and raise equity to pay down debt. Since April look at the HL vs. SLV, UUP (Silver ETF, US Dollar ETF) chart.


HL/UUP/SLV (Courtesy of Stockcharts.com)
Back in May Dvol thought the size open in Hecla's back-month calls was interesting. If you revisit the post on May 20 there were 67,000 January 2010 calls open at the $2.50 strike for a $1.05 and 19,000 calls open at the $5.00 strike for $0.36. Fast forward to today, with spikes and corrections along the way, Silver and Hecla both broke out and Hecla's stock is up 31%, the January 2010 $2.50 call is up 71% and the $5.00 call is up 39% (the $5.00 call could have been sold in a spread not sure). Also different time frames tell a different story, HL spiked at the end of May but corrected in the 2s in June/July. It closed at $4.20 today and if silver tanks here, watch out!


Hecla Mining Stock (HL)

Hecla Mining January Calls (Courtesy of Yahoo Finance)

No recommendation going forward. These small caps are high risk. DV occasionally tries to find valuation and/or turnaround plays in small to mid cap stocks. Here are previous posts on Thinkorswim Group before the TD Ameritrade buyout, Skyworks Solutions 1, 2 in February, Arbinet Corp in April and Hecla in May.

Pros and Cons of High Frequency Trading (Larry Tabb of Tabb Group)

Interesting video from Datacenterknowledge.com. Larry Tabb also spoke at the Money:Tech Conference in early 2008 before HFT was even an issue. Adam Sussman of TABB was also interviewed recently on Tech Ticker. I remember hearing Sussman talk about dark pools in early '08 at a P&I conference....

Full Obama Health Care Speech Video/Text (9/9/2009)

Text of President Barack Obama's address to Congress on health care reform Wednesday, as prepared for delivery and provided by the White House.

------

Madame Speaker, Vice President Biden, members of Congress, and the American people: When I spoke here last winter, this nation was facing the worst economic crisis since the Great Depression. We were losing an average of 700,000 jobs per month. Credit was frozen. And our financial system was on the verge of collapse.

As any American who is still looking for work or a way to pay their bills will tell you, we are by no means out of the woods. A full and vibrant recovery is many months away. And I will not let up until those Americans who seek jobs can find them; until those businesses that seek capital and credit can thrive; until all responsible homeowners can stay in their homes. That is our ultimate goal. But thanks to the bold and decisive action we have taken since January, I can stand here with confidence and say that we have pulled this economy back from the brink.

I want to thank the members of this body for your efforts and your support in these last several months, and especially those who have taken the difficult votes that have put us on a path to recovery. I also want to thank the American people for their patience and resolve during this trying time for our nation.

But we did not come here just to clean up crises. We came to build a future. So tonight, I return to speak to all of you about an issue that is central to that future -- and that is the issue of health care.

I am not the first president to take up this cause, but I am determined to be the last. It has now been nearly a century since Theodore Roosevelt first called for health care reform. And ever since, nearly every president and Congress, whether Democrat or Republican, has attempted to meet this challenge in some way. A bill for comprehensive health reform was first introduced by John Dingell Sr. in 1943. Sixty-five years later, his son continues to introduce that same bill at the beginning of each session.

Our collective failure to meet this challenge -- year after year, decade after decade -- has led us to a breaking point. Everyone understands the extraordinary hardships that are placed on the uninsured, who live every day just one accident or illness away from bankruptcy. These are not primarily people on welfare. These are middle-class Americans. Some can't get insurance on the job. Others are self-employed, and can't afford it, since buying insurance on your own costs you three times as much as the coverage you get from your employer. Many other Americans who are willing and able to pay are still denied insurance due to previous illnesses or conditions that insurance companies decide are too risky or expensive to cover.

We are the only advanced democracy on Earth -- the only wealthy nation -- that allows such hardships for millions of its people. There are now more than 30 million American citizens who cannot get coverage. In just a two year period, one in every three Americans goes without health care coverage at some point. And every day, 14,000 Americans lose their coverage. In other words, it can happen to anyone.

But the problem that plagues the health care system is not just a problem of the uninsured. Those who do have insurance have never had less security and stability than they do today. More and more Americans worry that if you move, lose your job, or change your job, you'll lose your health insurance too. More and more Americans pay their premiums, only to discover that their insurance company has dropped their coverage when they get sick, or won't pay the full cost of care. It happens every day.

One man from Illinois lost his coverage in the middle of chemotherapy because his insurer found that he hadn't reported gallstones that he didn't even know about. They delayed his treatment, and he died because of it. Another woman from Texas was about to get a double mastectomy when her insurance company canceled her policy because she forgot to declare a case of acne. By the time she had her insurance reinstated, her breast cancer more than doubled in size. That is heartbreaking, it is wrong, and no one should be treated that way in the United States of America.

Then there's the problem of rising costs. We spend one-and-a-half times more per person on health care than any other country, but we aren't any healthier for it. This is one of the reasons that insurance premiums have gone up three times faster than wages. It's why so many employers -- especially small businesses -- are forcing their employees to pay more for insurance, or are dropping their coverage entirely. It's why so many aspiring entrepreneurs cannot afford to open a business in the first place, and why American businesses that compete internationally -- like our automakers -- are at a huge disadvantage. And it's why those of us with health insurance are also paying a hidden and growing tax for those without it -- about $1000 per year that pays for somebody else's emergency room and charitable care.

Finally, our health care system is placing an unsustainable burden on taxpayers. When health care costs grow at the rate they have, it puts greater pressure on programs like Medicare and Medicaid. If we do nothing to slow these skyrocketing costs, we will eventually be spending more on Medicare and Medicaid than every other government program combined. Put simply, our health care problem is our deficit problem. Nothing else even comes close. Continued....

Thoughts?

Mary Bartels of BofA/Merrill Sees 15-20% Downside in S&P 500 (Video, Chart)

It is time for TARP banks to take their TARP profits!?

Mary Ann Bartels, head technical analyst at Bank America Securities/Merrill Lynch, said the S&P may correct 15-20%. She's watching 5 "trip wires" to catalyze a market correction. 3 out of the 5 trip wires went negative. She sees this current rally as a "breadth thrust" like '75 and '82 when the market rallied over 60% and had a 14% correction. Since there is no uptick rule today she sees more volatility on the downside. The correction would be part of a "base building" process. She's also bullish on commodities and sees a possible head and shoulders bottom in gold. If it breaks out of the reverse H&S pattern $1,300 is in the cards. Watch the full BloombergTV video interview.

Negative:

1. China market correction
2. Buy volume deteriorating, higher volume on sell offs; Negative breadth
3. Investor Intelligence Survey: Pessimism at 2007 lows

Positive:

1. Percent of NYSE stocks above 200 day moving average at 91%, highest in 5 years
2. Tech outperformance

What this correction would look like..

U.S. Stocks at Risk for 20 Percent Decline: Technical Analysis (Bloomberg Article).

DV agrees with Mary and sees a correction once this "breadth thrust" loses it's supply of Pez