Live Hawaii Tsunami Coverage Ustream Video (CBS KGMB)

Wow live video coverage of the Hawaii tsunami warning courtesy of CBS KGMB on Ustream. One day we will live stream an asteroid about to hit us, after an ad. Dvol hopes everyone in Hawaii and on the West Coast will be alright.

Tsunami Warning for Hawaii and Alaska (NOAA), Chile/Japan Earthquakes

Taking a break from market waves at the moment for a more important issue. There is apparently more action in the ocean. A tsunami warning for Hawaii and Alaska (via NOAA twitter) is in effect from the 8.8 mag earthquake that hit Chile (LA Times).  A 6.9 earthquake also hit Southern Japan (xinhuanet).  The US earthquake weapon is hard at work.  Is the Earth about to explode?  Here is a graphic from NOAA (from the tweet) showing Tsunami travel times and the most recent message from the NOAA.  It looks like tsunami warnings are all around the world.  Prepare for Tsu-wave volatility...

Obama Bipartisan Health Reform Panel, Business Roundtable (Videos)

For the DV archives. Videos from the Bipartisan Meeting on Health Reform: Part 1, 2, 3, 4 and the Business Roundtable.

S&P Under 50DMA, TLT and 30-Year Yield At Make Or Break Point (SPX, SPY, TLT, TYX)

While the S&P camps out below the 50 day moving average and potentially forms a right shoulder (we'll see), the 20+ Treasury bond ETF ($TLT) and 30-Year Treasury Yield ($TYX) are both at inflection points. TLT is just above the 50DMA and close to testing downtrend resistance.  If inflationistas get spooked on the long end and sell because Bernanke is too soft on the short end, TLT could retest the June 2009 lows of $86.

On the other hand RSI is building as is momentum so if there's some type of flight to safety and/or deflation consensus, it could break the downtrend and test the 200DMA at 92.20.  Below I also provided the 30 Year Treasury Yield chart ($TYX).  You can see the obvious make or break level at ceiling resistance and at the triangle point.  $TYX is just above the 50 day moving average so in my opinion if it breaks below that it could test the 200DMA (230 basis points lower around 44 or 4.4%).  Since the October 2009 low $TYX always found support at the 200DMA. 

If the S&P decides to roll over and test the 200 day moving average ($1,037), in the past Treasuries caught a bid so perhaps yields (inverse of price) would follow suit.  I'm not sure if that's the definite dynamic today given jitters on the long end.  Is the long bond now considered "risk" on the "flight to safety" trade even though it's technically "risk free"?  Is "temporary flight" risk officially priced in? I'll just watch the charts, follow the dough...  Charts below are $SPX, TLT and $TYX.

Municipal Crisis Is Spreading, Updates on Distressed Munis | February, 2010

ALERT FROM DVpf (Distressed Volatility Public Finance)

I've been writing about the public finance crisis since 2008. The craziest story so far has been out of Jefferson County, Alabama.  Bankers at JP Morgan bilked Jefferson County, AL ("county paid banks $120 million in fees, six times the prevailing rate") into buying $2.7 billion interest rate swaps that turned out to be viral when the recession hit, debt was downgraded, auction-rates skyrocketed and swaps violated covenants which put them on the brink of bankruptcy (read the Bloomberg story:  JPMorgan Swap Deals Spur Probe as Default Stalks Alabama County).

Municipalities feed on their tax base, so when their underlying economy is booming they can lever up against tax revenues and throw cash at projects/developments to improve the area and create jobs. It's great until the economy crashes, tax revenues slow and they're left servicing debt and unprofitable operations, in GASB terms. So just like a company they have to cut projects, lay off workers and try to kill or lower debt payments. During the past few years I've been watching this unfold all across the Country.

Distressed Detroit.. (Analysis of Detroit Economy in 2008) (7/12/2008)
Jefferson County, AL - Possibility of Biggest Municipal Bankruptcy In History (8/13/2008)
The Municipal Meltdown. Current Health of U.S Municipalities (Videos / Links) (10/19/2008)
Oakland, California Denies Bankruptcy Rumors, General Fund Drying Up (6/9/2009)
California Issues IOUs, California GO Bond Bets (7/1/2009)
Jefferson County Volatility, Interest Rate Swaps to National Guard (8/5/2009)
Moody's Downgrades Detroit $781M GO Debt Further Into Junk (8/30/2009) 
Illinois Insolvency, Chicago Commercial Real Estate Outlook, Warehouse Vacancies Hit 12.1% (1/22/2010)
Chicago CTA Volatility, $95M Budget Hole, Service Cuts, 1100 Laid Off (Video) (2/6/2010)

So munis are distressed and it's just getting worse..

Read: UBS Pound Foreast 1.48, Soros on China, Rosenberg on FHA, GGP/Brookfield, SEC Curbs Short Selling, Fed Keeping Rates Low, Zero Hedge vs. RBS, $SPY Quant Algo, Aiko Toyoda Statement Video

Articles for 2/24/2010, read up... 

SEC Curbs Short Selling, Disappointing Goldman Sachs (Bloomberg, Video)
Bernanke pledge of low rates lifts Wall Street (Reuters)
UBS Cuts Three-Month Pound-Dollar Forecast to $1.48 From $1.59 (BusinessWeek)
Surface Tension: George Soros on China (Caing.com, 财新网)
Real Market Control for Bubbly Real Estate (Caing.com, 财新网)
David Rosenberg: Get Ready For FHA To Go Completely Bust, Housing Market To Take Hit (BusinessInsider)
Greek strike halts transport, people back reform (Reuters)
Record Direct Bidder Share And Near Record Direct Take Down Masks Indirect Shrinkage (Zero Hedge)
General Growth shuns Simon, picks Canadian buyer (Indystar)
New class action lawsuit targets Yelp (CNET)
Is the SPY getting a "Jump" at key levels from a quant algo?  (HedgeAccording.ly) interesting
Latvia Sells 2-Year T-Bills for First Time Since 2007 (Bloomberg)
Junk Bonds May Post Double-Digit Returns in 2010: Pimco (Reuters/CNBC) wow
Bear Market Armageddon: Why Prechter Might Be Right This Time (TechTicker Video)
Greenspan: U.S. recovery "extremely unbalanced" (Reuters)
The 2014 HY Maturity Cliff: Bank of America's Take (ZeroHedge)

Auto News..
FBI raids Toyota suppliers in Michigan (DetroitFreePress)
GM to Wind Down Hummer After Sale to Tengzhong Fails (Bloomberg)
Toyota dealers rally in defense of brand (CNN)
After Toyota Recall, Best Deals Ever for Hybrids (HybridCars)

"Toyota President Aiko Toyoda gives his opening statement before the House Commerce Oversight Committee hearing 2/24/10" (CSPAN).

PIIGS, Goldman and Shanghai Index All Below Their 200 Day Moving Average

I first heard about this from John Murphy at StockCharts.com (S&P 500 May Retreat Below 200-Day Average: Technical Analysis (BusinessWeek), that the PIIGS (Portugal, Ireland, Italy, Greece and Spain), Shanghai Composite Index ($SSEC) and Goldman Sachs ($GS) are all trading below their 200 day moving average. China is tightening and the "PIIGS" are dealing with a sovereign debt crisis (with Goldman as financial engineer 1, 2). The February report by Bill Gross mentioned that public debt escalation (debt-to-GDP >90%) could slow economic growth by 1% and put pressure on asset/investment returns (Ring of Fire: February report at Pimco.com).

So with major indexes currently trading below their 200dma, could they drag the S&P, Dow, Nasdaq, TSE, Sensex, FTSE, Nikkei, Hang Seng and even Bovspa (Brazil) down to test that level?  Most indexes are just under the 50 day as of today's close so if they can't get above that level I'd say there's a possibility.  Here are charts courtesy of StockCharts.com.  The 200dma is the red line.

Shia LaBeouf, Wall Street 2 Jimmy Kimmel Interview, Schwab Training and People Busted For Insider Trading On Twitter

Hat tip to MissTrade for the video.  Actor Shia LaBeouf was on Jimmy Kimmel discussing his new movie Wall Street 2: Money Never Sleeps (international movie trailer and teaser trailer). The most interesting part of the interview was when he talked about training at a Schwab office in Encino.  He was training to be a proprietary trader in the movie. With help from others, LaBeouf said he turned $20,000 into $489,000 and 4 of the 9 guys he was training with went to jail for insider trading on Twitter!

EUR/USD at Primero Downtrend Resistance 1.3636, Decision Imminent (Chart Continuation or Breakout)

EUR/USD (Euro to the US Dollar) is nearing downtrend resistance. Like I stated in my previous re: $FXE (Euro Index ETF) post, if that trend gets violated it could see decent upside momentum, which would then need confirmation. I provided multiple time frames for FXE, XAU/USD and $Gold. EUR/USD is currently trading at 1.3636 and the decision is imminent imo. Check it out, here's a static chart of EUR/USD from 11:22pm central tonight (2/22/2010).

EUR/USD Daily (FreeStockCharts.com)

CME Chairman Melamed Sees Bubble In Equities Not Commodities, Likes US Dollar Over Euro (Fox Business)

Interesting interview on Fox Business with CME Group Chairman Leo Melamed.  He said the only bubble he sees is in EQUITIES and that commodities already retraced their move. He also likes the US Dollar over the Euro (USD/EUR) with interest rate pressures in Europe (with the PIIGS in critical condition).  He blames Government and derivatives for the cheap money fueled financial crisis. Hopefully the video comes up, if not go to Fox Business.

Is Bloom Box An Energy Revolution? (60 Minutes Video)

People are buzzing on Twitter about the Bloom Box so I thought I'd find the 60 Minutes video from last night (2/21). Supposedly a box you can put in your basement can generate enough power to nix the need for power lines/the grid. It's a plug-in power plant. It's like going wireless on a phone or computer. They said one disc powers one light bulb and 64 discs (fuel cells) in a box can power a Starbucks! "In 5-10 years we'd like to be in every home", the founder and CEO K.R. Sridhar said. He said it would be around $3,000. Here is the full article with all the videos at 60 Minutes (CBSNews).  It looks very cool.  Also, what about solar panels?  Check out Nanosolar's panel assembly factory (video). It looks to me like we're in an energy revolution, it just hasn't gone parabolic yet.

Abby Cohen Still Thinks S&P Fair Value is 1250-1300 (Video), Likes Technology, Commodities and Sees M&A or Share Repurchases With Cash On Hand

Goldman strategist Abby Joseph Cohen is bullish on the market. Last week she said the recession's been over for several months and thinks fair value for the S&P is between 1,250 and 1,300. With the S&P at 1,109, that would mean we are 12%-17% undervalued. She likes technology from business investment, commodities from improved global demand and sees share repurchases/m&a activity from cash on hand. She was on Bloomberg radio last Wednesday. Cohen's call for 1250-1300 is unchanged from her view in December, 2009 (videos). Maybe she can get Goldman Sachs ($GS) over its 200DMA while she's at it. If she's right a break above 1,150 would probably be an area to get long in size with put protection to $1,300 (not a recommendation). Until then... Ride the double dip (where the black swans at?)!

(Courtesy of Stockcharts.com)

Large $FXE Volume, Option Trade, USDX, Golden Crosses and Sunday Action (EUR/USD, $USDX, FXE, XAU/USD, Gold Continuous Contract, GLD)

Sunday night Gold, Euro and $USD report for 2/21/2010:  Btw, long US/CAD Olympic hockey (4-2).  Did you see the volume on FXE (Euro Trust Index ETF) Friday?  Over 3 million FXE shares traded on Friday (5.1 million on the week), a level not seen since Aug/September 2008.  Look at the volume blocks on Friday bringing up the gap down.  Tonight EUR/USD is up 0.35% breaking out on the 30-minute chart and XAU/USD is on the move.  So on Sunday at 8pm central it looks like a push out of the Dollar into the Euro and Gold.  Can't tell you what's going to happen tomorrow. 

From the charts below though the FXE trend is down, however, if Greece gets monster backing or a positive catalyst, short covering could break the closest downtrend and cause some damage.  There is another downtrend to test.  On this post (2/14) I gave you multiple FXE resistance levels for the longs to battle, including ceiling resistance, the 50dma, 200dma and downtrends (technical chess).  The weekly volume has been increasing with lower lows which is interesting.  Charts are from freestockcharts.com.  Speculative shorts on the Euro contract hit a record, see link below.  What do you make of that?

FXE (Rydex CurrencyShares Euro Trust ETF (1-minute on Friday, Feb 19)

FXE (3 month, Daily w/ 50/200dma, squeeze range)


FXE 6 Month Daily Chart

FXE Weekly (rising volume)

Now a look at the US Dollar Index ($USDX, Friday), Gold Continuous Contract ($GOLD) and XAU/USD spot (Sunday).

Soros Owns a Sh*t Ton Of $GLD (Gold ETF), Doubles Down Ending 12/31/2009 Q4 Holdings Report

According to the most recent Soros Fund Management 13F Q4 holdings report, it appears that Soros's hedge fund doubled down on their GLD position (for holdings ending 12/31/2009). To be exact he increased his position by 152% to 6,178,342 shares. It is the biggest holding in the Soros Fund Management portfolio, totaling 676.3 million dollars.  John Paulson also owns GLD en masse which I'll touch on in a separate post.  Keep in mind these holdings are reported from the 9/30/2009-12/31/2009 period, so we'll know wtf he did with his holdings in a few months.   His top holdings are as follows: