Tuesday, June 8, 2010

Middle East Producers See More Heavy Oil in their Future - Guest Post

Guest post by oilprice.com

Middle East Producers See More Heavy Oil in their Future

Middle East oil countries should increase production of heavy oil as oil prices remain higher and improved technology makes it easier, those attending an industry conference in Bahrain were told.

Bahrain’s oil minister, Abdulhussain Mirza, told the Heavy Oil World MENA conference that heavy oil reserves in the region were estimated at 1 trillion barrels, or 28% of total world reserves, but historically accounted for little more than 10% of production.

Is GLD Ready For 2010 Breakout? DXY, SLV, GDX, GVZ, GLD Charts

Here are charts of SLV (Silver ETF), GLD (Gold ETF), GDX (Gold Stock ETF), DXY (US Dollar Index) and GLD/UUP (Gold ETF/US Dollar ETF).  Gold, Silver and their fiat buddy $USD are testing ceiling resistance levels as we speak and could spike or decouple at any moment.  The US Dollar took out a downtrend (chart 1) but still needs to break above the late 2008 high to be scot-free.  GLD could spike if it violates $122, look at the ascending channels for potential targets (chart 2, 3).

Links for June 8: Goldman Recommends Hedging XLF With Puts

Goldman Sachs recommends hedging XLF with put options, based on CDS - MarketWatch
Bear Options at Record as Wien Says Stocks to Rally (puts cost more than calls) - Bloomberg
ES (s&p e-mini future) vs. EUR/JPY - Zero Hedge
Bernanke Q&A with Sam Donaldson, Unemployment will remain high - Bloomberg
Morgan Stanley shutting 300 branch offices, cutting 1,200 jobs - Zero Hedge
Matolcsy Says Hungary Needs Extra Budget Cuts of 1%-1.5% of GDP - Bloomberg
Apple’s Jobs Unveils IPhone-4 With 100 New Features (video chat, thinner) - Bloomberg Video
Chinese Steelmakers to Cut Output, Baosteel Says - Bloomberg - h/t @chinabizwatch
Chrysler recalls nearly 600,000 vehicles - Reuters

Monday, June 7, 2010

Marc Faber Mises Circle Speech, When is the Next AIG to Fall? (5/22/2010)

Marc Faber gave an interesting speech at the Mises Circle ("Austrian Economics and the Financial Markets") in Manhattan, New York on May 22, 2010. He gave potential consequences of prolonged zero percent interest rate policies (ZIRP) and printing money. Another bubble is brewing folks, watch the video. He shows a powerpoint with historical charts during his speech. Marc Faber called the failed $115 $SPY breakout in the beginning of March. He runs the Gloom Boom Doom report, find recent posts on Marc Faber w/ embedded media appearances here. Long live Austrian Economics, reflexivity and technical analysis. That's all you need folks!

Friday, June 4, 2010

BP’s Continued Existence Seen Coming Under Threat as Gulf Oil Spill Continues - Guest Post

Guest post by OilPrice.com

BP’s Continued Existence Seen Coming Under Threat as Gulf Oil Spill Continues

The continued failure of BP’s efforts to stop the Gulf oil spill and mounting political pressure are putting the very future of the British-based oil giant in question.

$SPY Must Hold Shelf of Death, Under 200DMA, $107.75 -2.67%

$SPY (SPDRS S&P ETF) is trading on a wobbly shelf under the 200DMA. Let the force be with you $SPY.  Are we still in Wave 3?

$SPY [courtesy of FreeStockCharts.com]

Tom Lee (JP Morgan): AAII Survey Bearish Sentiment = Capitulation, Watching Credit Spreads and Risk Assets for Confirmation

On June 1 on Bloomberg TV, Thomas Lee, JP Morgan's Chief US Equity Strategist, said he was fading the net-bearish sentiment in the AAII Sentiment Survey (bull/bear ratio).  He thinks it shows bearish capitulation.  Tom also mentioned that credit spreads have widened a bit (pricing of risk) and equities need confirmation from other risk assets (high yield) in order to move higher.  He still thinks we're in a normal bull market correction but remains a selective "slow buyer".  Interesting, watch the video below.  The market better get above the 200DMA.  Lee made correct calls throughout 2009.  I also threw up a snapshot of the AAII Sentiment chart.

Mark Zuckerberg at D8: Things Will Be Designed More Around People and Will Be Powerful Direction [Facebook]

Below is a video of Mark Zuckerberg (Founder and CEO of Facebook) speaking at the AllThingsDigital D8 conference. He gets into Facebook privacy settings, social plugins, the news feed backlash and future predictions. I cooked up a Zuck quote and embedded a video clip, courtesy of AllthingsD.
"My prediction would be that a few years from now we'll look back and wonder why there was ever this time when all these websites and applications, whether they're mobile applications or websites, weren't personalized in some way, whether it's through social plug-ins or connect or instant personalization, or whatever programs other companies come out with but I just think that the world is moving in this direction where things are going to be designed more around people and I think it's going to be a real powerful direction."

Thursday, June 3, 2010

You Down With UUP? Dollar and Gold Decoupled Today, GLD at Ascending Triangle Inflection Point!

Continued from my previous post Who Decouples Next with a bunch of charts. Look at the GLD/UUP relationship widen today. UUP is preparing for a ceiling breakout (or failure) in a mini ascending triangle and GLD just took out the 20 day moving average and mini uptrend on the 30 minute chart. GLD is trying mercifully to break above the December high and through the year long ascending triangle. If the Australian Dollar wants to take down Gold, so be it.  These are near term technical indicators but could be part of a major confirmation signal soon to come.  Charts below are courtesy of FreeStockCharts.com.

CMBS, CRE Losses "Worst Coming", Municipal Budget Shortfalls, Goldman S&P Earnings Revision [links]

Japan Deflation vs. U.S Today (Nasdaq v. Nikkei Charts)

Interesting post at Business Insider: If We're Japan, Then The NASDAQ Is Going To 800 In Three Years. Click the chart links below.

Wednesday, June 2, 2010

Who Decouples Next? (GLD, UUP, SPY, AUD/JPY, AUD/USD, EUR/USD, FXI)

I want to know what you internet folk think of this.  In the beginning of May, $SPY (S&P ETF), AUD/JPY (Australian Dollar/Yen) and AUD/USD decoupled from $UUP (US Dollar Index ETF) and $GLD to the downside.  Yield plays and carry trades unwound a bit at that time.  The Australian Dollar rose in tandem with Gold during the reflation trade last year but decoupled during the 2008 carry trade massacre (financial crisis).  Australia is the second biggest producer of gold (mining weekly).  The Euro was already moving lower in late '09 on Greek/Eurozone sovereign debt fears and China ($SSEC, $FXI) was making lower highs.  Now it appears that AUD/JPY, AUD/USD and $SPY are testing downtrend resistance and UUP is being squeezed at an inflection point.

Tuesday, June 1, 2010

BP Stock -15%, CDS Spikes to 167bps, ATP Notes Down $300M, ATPG -18% and APC -19.5% [Stock Charts]

This BP "black swan" event in the Gulf (live BP oil cam) is not only killing the environment, but losing investors big money.  Except those long credit default swaps, short stock or long puts. BP's stock is down about 15% today after the "top kill" operation failed (bp.com).  They now have to drill relief wells which could take 2 months to complete (msnbc).  London investment bank Arbuthnot Securities thinks "BP Plc may break up or become a takeover target" (bloomberg).  The cost of the spill so far is $1 billion for $BP (npr).

BP stock lost 15% today and 40% since mid-April.  Andarko Petroleum lost 19.55% today and 45% since mid-April and ATP Oil & Gas lost 18% and 60% respectively (look at the comparison chart).

SPY and S&P 500 Future in Descending Channel, Testing 200DMA (Charts)

$SPY (SPDRS S&P 500 ETF) and the S&P June future are trading in a steep descending channel, just below the 200 day moving average. The falling 20 day moving average could bump heads with traders soon (light blue line on second chart). High frequency traders need to team up and make things happen. Charts courtesy of Stockcharts.com and Optionsxpress.

Updates: GLD/Currency ETF Ratios (GLD/UUP, GLD/FXE, GLD/FXB, GLD/FXY, GLD/FXY, GLD/FXC, GLD/FXA)

I'm watching the Gold ETF ($GLD) against major currency ETFs ($UUP-US Dollar, $FXE-Euro, $FXB-British Pound, $FXA-Aussie, $FXC-Canada, $FXY-Yen), especially GLD/UUP with the recent flight from the Euro.  GLD/UUP is sitting on 2008 support in a symmetrical triangle.  Get ready for Gold/US Dollar divergence or a tandem dance (direction same, speed different).  GLD/UUP RSI (relative strength index) is at 52.

Monday, May 31, 2010

Case Shiller Home Price Index Down 3.2% in Second Quarter, At 2003 Levels Nationally

Yale's Robert Shiller still sees uncertainty with home prices. was on BloombergTV see the video below. From S&P press release on May 25, 2010:

David Rosenberg Sees S&P at 900-925, Gold at 3000 Reasonable (SPY, GLD) - Bloomberg Video

David Rosenberg, Chief Economist and Strategist at Gluskin Sheff + Associates, was on Bloomberg Television Friday giving his views on the S&P 500 and Gold price. In short summary, Rosenberg would be "interested" in the S&P between 900-925 (w/ no double dip recession) and believes gold will hit 3,000 an ounce in the next several years, which is a conservative forecast. That's more than double where gold stands today folks. David does not see $90 or $85 EPS on the S&P next year and sees revenue growth cutting short. Front month June gold contract (GCM10) is at 1,215. Watch for a confirmed ascending triangle breakout, above ceiling resistance, or lack thereof. Look at the 3 yr $GLD chart below.  Video below courtesy of BloombergTV.

Israel Raid of Flotilla Off Gaza Coast: Articles, Video Footage Links, Differences [#Flotilla, #Israel, #Gaza]

Links to articles and videos on the Flotilla raid off Gaza.  See my middle east link fest from April, aka beware of geopolitical volatility in the middle east.  You never know if this sh* will escalate into something bigger.  Peace in the middle east people.  I embedded a news video from Reuters and threw up a bunch of links to articles.  It's a lot of noise, but I'm just showing the differences of views.

Hugh Hendry Debates w/ Columbia's Jeffrey Sachs on European Debt Crises (May 26, 2010 on BBC Newsnight Video)

Happy Memorial Day to my US subscribers. Watch Hugh Hendry of Eclectica Asset Management (based out of London) debate with Columbia Professor Jeffrey Sachs on how to solve the Greek/European debt crisis. Hendry, who is probably short Greek sovereign debt (via CDS), vulnerable European banks or the Euro in some form (which has been the right trade) recommends you panic.  Sachs says bail them out, Greece will be able to *service* its debt under normal market conditions in the near future.

Friday, May 28, 2010

Amid the Financial Turmoil One Economic Indicator is Soaring - Guest Post

Guest post by OilPrice.com

Amid the Financial Turmoil One Economic Indicator is Soaring

The financial world is coming unglued again. Greece has pushed the E.U. to the brink. Global stock markets are tumbling.

And yet, at the same time at least one economic indicator is soaring. The Baltic Dry Index.

U.S., Canada, Germany and Japan Back to Pre-2003 Industrial Production Levels - Guest Post, Chart

Guest post by OilPrice.com

U.S., Canada, Germany and Japan Back to Pre-2003 Industrial Production Levels

An interesting chart from the Bank of Japan's latest monthly economic report.

Japanese capacity utilization is way down. Around 20% of manufacturing facilities are standing idle.

This is an improvement from the beginning of 2009, when 35% of capacity was shut down. But a marked decrease from pre-financial-crisis levels, when there was almost no excess capacity to be found.

Lake Erie Wind Farm to be First Freshwater Offshore Project in U.S. - Guest Post

Interesting news on wind energy submitted by OilPrice.com

Lake Erie Wind Farm to be First Freshwater Offshore Project in U.S.

The first step in an ambitious project to generate 1,000 megawatts of electricity from offshore wind turbines in Lake Erie was taken this week with an order to General Electric for five massive turbines.

Greece Stock Index Tests March 2009 Low, NBG Downgraded By JP Morgan to Sell, Almost at $2 Low

DJ Greece Index
First Dubai hit the March 2009 low back in December (2009), now add Greece to the list.  Below are charts of the Dow Jones Greece Stock Index ($GRDOW) and Greece (Athens) General Share ($ATG) from StockCharts.com.  The Greek indexes are still in a descending channel but they could bounce at support. $ATG is just above the March low.  I need to see Greece base out here and violate the channel with crisp green volume before turning bullish.  This action could be pricing in a double-dip recession for Greece.  The European Union Labor Chief even warned of a double dip recession in Europe (WSJ).  With Greek austerity measures (lower wages, higher taxes) and banks tightening up again, there could be a double-dip right around the corner. Remember, indexes are forward looking and reflexive.

Thursday, May 27, 2010

S&P Future +2.19% Overnight Testing 200 Day Average, Dollar Index Nervous on Uptrend (ES_M, DX_M Charts, $UUP, $SPY Related)

S&P Future Update:  The June E-mini S&P Future is up 1.91% tonight, testing the 200DMA and downtrend resistance level [it is now up 2.19%].  The $1,050 floor and flash crash low are holding for now.  Tonight's move is a decent reversal from Tuesday when ES was down 2.50%.  There are still plenty of bulls out there, look at my link fest from earlier.  Bulls still need to clear the 200DMA and downtrend resistance level for breakout confirmation.  I put up charts of the E-Mini S&P June Future (ESM10) and Dollar Index June Future (DXM10).  The Dollar is looking nervous at uptrend support, it's still holding but watch for a break.  ES gave back some gains, up 1.98%.....  Looks like fresh green volatility.

E-mini S&P Future (Snapshots from OptionsXpress)
June Dollar Future DXM10

Einhorn Shorts Moody's, Rosenberg Sees 30% Decline, Gold Update (XAU/USD, 5/26/2010)

This link fest is almost as important as my previous link fest, a re-test of the highs of importantness if you will. I'm also watching gold and provided a look at the gold spot chart priced in US Dollars (XAU/USD) below. It broke out on the hourly chart, we'll see if it hits 1,230 again. Also take a look at the live US National Debt clock embedded below courtesy of zFacts.

Wednesday, May 26, 2010

Whitney Tilson Explains Short Homebuilders Bet, $ITB Technical Update (Fast Money Video, 5/24/2010)

Part II of my first post on $ITB (DJ Home Construction Index ETF) with a link to Whitney Tilson's full housing report. Tilson of T2 Partners was on Fast Money last week explaining his "short" bet on the homebuilders or $ITB (ETF). Today $ITB pierced through the 200DMA but rallied back to close green at $13.79.  Watch the 200DMA, flash crash low and $12 support, which is also the 38.2% retracement level. If those levels get violated, I'm thinking $9-$10 is on the table (July, 2009 low and 61.8% retracement).

Tuesday, May 25, 2010

Leader Capital's John Lekas Sees 4,200 On Dow By Q2 2011, Interest Rates and LIBOR Higher (CNBC Video)

Like David Tice who runs the Prudent Bear Fund, Leader Capital's John Lekas is one of the rare ones calling for a 50% decline from here on the Dow. He sees the Dow hitting 4,200-5,000 by the second quarter of 2011.  He said increasing LIBOR, interest rates and lower earnings (S&P EPS $85 to $55) will be the catalysts.  The Dow closed at 10,043 today.  In October of 2009 on CNBC, John was calling for 6,900 by the end of 2009 (which didn't pan out) and 4,200 by the end of 2011.

Gulf Spill Puts US Energy Bill on Slippery Slope - Guest Post

Guest post by OilPrice.com

Gulf Spill Puts US Energy Bill on Slippery Slope

With energy, Senate Democrats find themselves between a rock and two hard places. Nonetheless, Sen. John Kerry, D-Mass., and Sen. Joe Lieberman, I-Conn., have introduced their climate and energy bill.

Its timing is awful. Its fate is uncertain. Yet its sponsors felt it had to be done now.

While the Gulf of Mexico is being damaged by a runaway well, spewing millions of gallons of oil-like bile from hell, any energy bill has the chance that it will be amended to become an anti-energy bill and will fail when hoped-for Republican support evaporates.

Overnight Volatility- S&P June Future Down 2.5%, Dollar Near Highs ($SPX, ES_M, DX_M, GC_M, SPY Charts)

The June E-Mini S&P Future is down 2.5% to 1,043, the June Dollar Future is up 0.77% to 87 and June Gold is down 0.52% to 1,187.  According to Robert Prechter of Elliott Wave (see Tech Ticker), the S&P is in a minor wave 3 of 5 pattern.  The S&P future took out the flash crash low and 5/21 low just now.  There are still issues in Europe (Spanish bank bailouts, the Euro), North Korea/South Korea tensions and Dollar funding risk premium (Libor rate) is on the rise.  Roubini summed up everything on CNBC last week.  Technically, the S&P retested the 200 day moving average and failed.  I'd like to see a strong base and downtrend break before getting long the S&P or $SPY ETF.  SPY also needs to get back above the 200DMA.  The US Dollar Index is near the 5/19 high and Gold is in an ascending triangle plotting its next move.  Watching to see how equities react tomorrow and GLD:UUP (Gold/Dollar ETF) ratio!  If 1,050 doesn't hold, the June 2009 base of 950 looks like support.  Charts below are courtesy of OptionsXpress.

Monday, May 24, 2010

Archive Videos: 2010 TechCrunch Disrupt Conference #TCdisrupt

Watch the 2010 TechCrunch Disrupt conference embedded below on LiveStream. Find it originally at http://disrupt.techcrunch.com/. Find full presentations on the video library widget. I found out about this conference from SecondMarket on Twitter. They are trying to disrupt private illiquid stock and debt markets!

After May Sell Off Prechter Still Sees Long Bear Market, Likes Cash Not Gold (Has Too Many Bulls)

First off, did you listen to Robert Prechter (Elliott Wave International) in April when he said "between now and May is the 3rd best selling opportunity since 2000"?  He called that one right!  Prechter was on Tech Ticker last week giving his prediction that stocks are in for a very long bear market.  By the way, Distressed Volatility is not a perma-bear blog as the name implies, I let chart technicals decide direction.  Embedded videos are used to promote different opinions whether they agree with the chart or not.  If you want recent bullish commentary see posts with Barton Biggs (Traxis Partners).  Prechter said we are in minor Wave 3 (of 5) of C?  Elliott Wave people correct me if I'm wrong.  Here are key points Prechter made and the Tech Ticker video.

Roubini Sees 20% Downside, Be In Cash or German Short-Term Debt (CNBC Video 5/20/2010)

Last week Nouriel Roubini (NYU Professor/Roubini Global Economics) was on CNBC.  Here are key points he made from the video below (5/20/2010).

South Korea's Lee Responds to Alleged Torpedo Attack, North Korea Said Will Retaliate With War If Attacked, Keep Eye On Geopolitical Volatility

South Korean President Lee Myung-bak addressed the attack today in a statement found at JoongAng Daily (see embedded Business Insider post). I embedded videos from AsianCorrespondent.com and AP showing evidence that the torpedo came from North Korea, Hillary Clinton's statement and a North Korea Naval Officer threatening to retaliate with an "all out war" if there's a response. North Korea denied the attack. Something to be aware of people, geopolitical volatility et al.   South Korea decided to suspend trade w/ North Korea.

Sunday, May 23, 2010

Hugh Hendry Shorts China, Klarman Sees Another Lost Decade, The Most Important Distressed Volatility Link Fest Ever (5/22/2010)

Taking over the linking game one "< a href >" at a time...

Saturday, May 22, 2010

Live BP Video of "Deepwater Horizon" Well Oil Spill

Watch oil leak from that busted Deepwater Horizon oil well in the Gulf of Mexico. It's a live stream by BP. For more information on the leak go to NOAA.gov.  I also embedded a video with oil spill forecasts updated by WKRG (Mobile/Pensacola).

Gartman on Technical Damage Done to Markets, Euro (Bloomberg, 5/21)

Dennis Gartman, who runs the Gartman Letter, talked about the Euro and technical damage done to just about every market (from US equities to England to China) on BloombergTV Friday 5/21. Back in February I threw up charts of the PIIGS (Portugal, Ireland, Italy, Greece, Spain), Goldman Sachs ($GS) and Shanghai ($SSEC, $FXI) that were below their 200DMA.  I noted that John Murphy's ChartWatchers blog mentioned that we'd test the 200DMA, and we broke it last week (first during the "flash crash"). A few days ago Gartman said to sell gold positions (as a trade) and he timed the sell off very well.  Gold hasn't officially broken down yet. I'm watching the 50 day moving average and uptrend from the lows on GLD (SPDRS Gold ETF). If those levels get taken out there could be a $100 support test (from breakout). I'm watching to see how the market reacts at 200DMA resistance.  Enjoy the video courtesy of BloombergTV.

Google Golden Cross, Sentiment and 50% Retracement Watch ($GOOG Short Interest, Put-Call Ratio Trend)

I just did a post on the Google TV Keynote which you should check out. GoogleTV is coming this fall. I felt like charting out $GOOG and it doesn't look pretty at the moment.  It looks similar to the market indexes. $GOOG is in a short term downtrend, look at the dotted line on the chart. If the powers that be can trade GOOG through that downtrend and break back above the 38.2% retracement level, there could be hope for at least a rally to the moving averages. If the market continues to roll over, aka SPY can't take out 200DMA resistance, $GOOG could head on down to the 50% retracement level around $439. Floor support resides at $447 from June 2009 and $375 from February 2009. GOOG is currently trading at $472. Oh and watch the 50/200 day moving average on the chart.  If the 50 day moving average (blue) crosses below the 200 day moving average (red) ("golden cross") it usually signals confirmed weakness ahead, with rallies and retests along the way.  There are exceptions.

Footage From Top of Burj Khalifa Tower Spire! [Video from ImreDubai]

I just thought this was cool.  Look down from the Burj Khalifa (aka Burj Dubai) tower courtesy of ImreDubai.  It is 828m above sea level, "the tallest man-made structure ever built".

Friday, May 21, 2010

Crude Oil Prices Remain Under Pressure After Dipping Below $70 a Barrel in Week, Oil Market Summary for 05/17/2010 to 05/21/2010 (Guest Post)

Guest post by OilPrice.com

Crude Oil Prices Remain Under Pressure After Dipping Below $70 a Barrel in Week

Oil Market Summary for 05/17/2010 to 05/21/2010

Crude oil prices ended just above $70 a barrel on Friday after dipping below that threshold earlier in the week. The benchmark June contract for West Texas Intermediate settled at $68.01 before it expired on Thursday, after falling below $65 a barrel in intraday trading.

Google TV Keynote Video [Google I/O 2010], Coming Fall 2010 on Sony TVs at Best Buy, Watch Intro Videos and CEO Partner Panel #GoogleTV, $GOOG

Here are a few videos from the Google TV keynote presentation (Day 2) at the 2010 Google I/O conference. Google TV is set to hit stores in Fall 2010 at Best Buy. It will run on Chrome and Android. Google is partnering with Sony (integrated TVs), Logitech (companion box), Intel Atom Processor (chip set), Adobe (Flash), Dish Network and Best Buy . I embedded Google TV introduction videos and the 22 minute CEO Partner panel with Eric Schmidt (Google), Paul Otellini (Intel), Howard Stringer (Sony), Jerry Quindlen (Logitech), Charlie Ergen (Dish Network), Shantanu Narayen (Adobe) and Brian Dunn (CEO of Best Buy). Find more videos at the GoogleDevelopers Youtube channel. Who wants to start a business channel?

Thursday, May 20, 2010

Whitney Tilson Bets Against Housing (ITB), Paulson is Bullish (BZH, Beazer Homes)

If you didn't already know, there's a battle on the direction of housing right now. Whitney Tilson of T2 Partners is betting against housing, or short $ITB (Dow Jones US Home Construction Index), while John Paulson is betting on V-shaped scenerio.  ITB and other housing ETFs recently had a false ceiling breakout, took out an uptrend and broke through the 50 day moving average.  On this huge down day it is trading just above the 200 day moving average.   If we can't hold here, $12 and $9 (July 2009 low) are next if housing does a back flip.  Last time I checked $ITB was trading at $13.09.

Euro/Dollar Parity After Bounce? (INO/MarketClub Video Update) $EURUSD

Watch the most recent INO/MarketClub video on EUR/USD (Euro to US Dollar).  I put these videos up because not only am I a proud affiliate, Adam Hewison (the founder) has actually been right the majority of the time on these free videos and the trade triangles appear to manage risk quite well.  He combines chart technicals and the proprietary trade triangle technology to make trading decisions (subscription link).  He thinks the Euro could bounce here but overall the trend is down and could possibly hit 1:1 with the $USD.  It's possible, anything can happen people, also Gary Shilling thinks so as well.  You can find free video updates at the MarketClub blog or on Youtube.

Wednesday, May 19, 2010

Leveraged Loan/High Yield Bond Market Update (Charts, S&P LCD Videos for May)

Here's an update on the leveraged loan and high yield bond market by S&P LCD from their Youtube channel LCDComps. I also follow them on Twitter @LCDNews.  Check out the S&P/LSTA US Leveraged Loan 100 Index chart. After a monster run, the Leveraged Loan Index is testing January 2010 support levels.  There are two indexes, click the links for further explanation. Retail can't trade leveraged bank loans, only banks and financial institutions "over-the-counter", but it doesn't hurt to KNOW how they're being priced.  Retail investors can trade high yield bond ETFs (HYG, JNK et al.). See recent posts on high yield bond ETFs by clicking the labels at the bottom.

Courtesy of Bloomberg.com SPBDLLB:IND

Courtesy of Bloomberg.com SPBDLL:IND

US Leveraged Loan / High Yield Bond Market Analysis (May)

European Leveraged Loan/High Yield Bond Market Analysis (May)

Source:  https://www.lcdcomps.com/lcd/index.html

Videos: Anti-Government Protests by Red Shirts in Bangkok, Thailand, Global Revolution Trend Intact

There are anti-Government protests going on in Bangkok, Thailand. The "Red Shirts" are running a campaign to oust the Prime Minister. Rioters burned 27 buildings including banks, hotels, shopping malls and the Thai Stock Exchange (Bangkok Post via Bangkok Metropolitan Administration). They also raided Thai Channel 3. It is just me or is this global anti-Government protest trend intact? See recent blog posts with anti-Gov protest videos to see what I mean. Below are Thai protest videos from various news organizations.

White House Covers Up Menacing Oil "Blob" - Guest Post

Guest post by OilPrice.com

White House Covers Up Menacing Oil "Blob"

In an exclusive for Oilprice.com, the Wayne Madsen Report (WMR) has learned from Federal Emergency Management Agency (FEMA) and U.S. Army Corps of Engineers sources that U.S. Navy submarines deployed to the Gulf of Mexico and Atlantic Ocean off the Florida coast have detected what amounts to a frozen oil blob from the oil geyser at the destroyed Deep Horizon off-shore oil rig south of Louisiana. The Navy submarines have trained video cameras on the moving blob, which remains frozen at depths of between 3,000 to 4,000 feet. Because the oil blob is heavier than water, it remains frozen at current depths.

Institutional Investors Keep Buying Dips (Robert Shiller of Yale)

According to Yale Economics Professor Robert Shiller, the stock market is "highly priced" and his own buy-on-dips confidence index is "sagging". He said institutional investors are the only ones buying these dips and worries about a double dip recession. Watch the full interview at Bloomberg.com and see recent blog posts featuring Robert Shiller here. If interested here's a free online course by Robert Shiller at Open Yale Courses, ECON 252 Financial Markets.

Does SPY Revisit Flash Crash Low of 105.25, Broke Monday Low (Chart)

SPY broke through Monday's low (5/17). The flash crash low was $105.25.

SPY (SPDRS S&P 500 ETF) courtesy of FreeStockCharts.com

Previous:

Welcome Back Volatility, Where Does SPY Bottom? 200DMA, May Crash Low OR June 2009 High/Support (Charts/Videos) (SPY, DIA, XLF, VXX, LDQ, TLT, IEF, UUP)

PG Loses 30%, But Closes Down 2%! (Chart), NYSE CEO on Sell Off (Video)

Interesting Reads at Zero Hedge Today (5/6/2010), SPY Lost 9% at One Point

Psychological Plunge in Oil Prices Makes OPEC Nervous, Official Says - Guest Post

Guest post by OilPrice.com

Psychological Plunge in Oil Prices Makes OPEC Nervous, Official Says

The plunge in oil prices in the wake of the euro crisis has OPEC worried.

Qatar oil minister Abdullah bin Hamad Al Attiyah emerged as an unofficial spokesman for the oil cartel over the weekend in a series of news agency reports from the Gulf that signaled the group’s concern.

Germany Bans Naked Short Selling in 10 Banks, Insurers and Eurozone Government Debt (Naked CDS)

Germany's BaFin (financial regulator) decided to temporarily ban naked short selling in 10 German banks and insurance companies and ban naked credit default swap speculation in European Government debt.  Below are ten financial institutions that made the cut (BaFin press release). Get ready for an interesting day tomorrow. EUR/USD is trading at 1.21936, blew right through 1.25 support, pretty crazy out there.
* AAREAL BANK AG
* ALLIANZ SE
* COMMERZBANK AG
* DEUTSCHE BANK AG
* DEUTSCHE BÖRSE AG
* DEUTSCHE POSTBANK AG
* GENERALI Deutschland HOLDING AG
* HANNOVER RÜCKVERSICHERUNG AG
* MLP AG
* MÜNCHENER RÜCKVERSICHERUNGS-GESELLSCHAFT AG
Market chaos warning after German ban on shorting - (Telegraph.co.uk)
Germany Bans Naked Short-Selling, Swaps Speculation (Bloomberg)
The Definitive Incomplete Analysis Of Today's German Shock And Awe (Zero Hedge)
German ban on risky bets seen backfiring (Reuters)
German regulator issues naked short-selling ban (BusinessWeek)
Swaps Soar on Germany’s ‘Act of Desperation’: Credit Markets (Bloomberg)

Tuesday, May 18, 2010

Jim Cramer Likes Gold ($GLD), Gartman Sells Anticipating Pullback

Jim Cramer on Mad Money yesterday (video below) gave reasons to own Gold and said it could be headed to $2,000oz.  Dennis Gartman of the Gartman Letter advised clients to "rush to the exits", anticipating a technical pullback (CNBC article). They are looking at two different time frames I believe. It makes sense that traders would get scared at the December 2009 high ($119.54) and flee back to home base (support), forming a double top. Traders might re-evaluate another breakout attempt at the 50DMA or uptrend support level. If that uptrend from late 2008 gets broken on strong volume I'd be careful with protection (IMO). I don't think we've seen the official parabolic move in gold yet (being only 20% above the March 2008 high, before the crisis/FX printing spree?) but that's just me. A spike in Treasury yields would take my attention away from gold though on a structural basis.  Right now I'm watching the US Dollar/Gold (UUP:GLD) ratio and FXB:GLD, FXE:GLD etc. Boo yaahh... Below is a chart of $GLD and the Mad Money video courtesy of CNBC.com.

Don't Be Misled By 13F Filings, They Don't Disclose Shorts, Credit Default Swap Exposure (CDS)

People, don't be misled by 13F SEC Filings reported by hedge funds and institutional investment managers every quarter. They don't have to report short positions or naked credit default swap exposure (credit insurance) against underlying long positions. Meaning 10 million shares of Company X might just be part of a large net short position. This is an interesting comment on the potential nature of Paulson's MGM holding this Q.

13F-Reports are filed quarterly by institutional investment managers (managing more than $100 million) less than 45 days after the quarter ends at SEC.gov. 13D-Reports are filed when institutional investment managers own 5% or more of a company within 10 days of the purchase. They must report material changes (acquisitions or dispositions) greater than 1% of the holding.

Monday, May 17, 2010

"Large Volume" Trades Outside Recognized Exchanges, Dark Pools

Today on CNBC Larry Tabb of Tabb Group explained that any "large volume" trades outside recognized exchanges in dark pools. It seems to me like high speed liquidity, front-running and hiding trades (whether over-the-counter or in dark pools) for hedge funds and investment institutions is more important than market transparency. At least start a High Frequency Trading ETF to let retail investors join the front-running party.

Illinois Has $4.5 Billion In Unpaid Bills, $1.75 Billion Due June 10 (Short Term Debt), Higher Taxes Looming?

Illinois' financial update by Distressed Volatility Public Finance (DVPF)

The April 2010 Illinois Comptroller Quarterly, by Illinois Comptroller Daniel Hynes, stated they had $4.496 Billion in unpaid bills and $1.75 Billion + interest that must be repaid on June 10. Below is part of the quarterly report (PDF here).  Read the articles below and also check out the daily cash balance chart comparing 2007-2010.  Higher taxes coming?

Sunday, May 16, 2010

'Meltup' (National Inflation Association Video), $TIP ETF Chart (Treasury Inflation Protected Securities ETF)

If you're concerned about potential inflation (higher prices) down the road, watch the video below from the National Inflation Association.  Also you know what else is interesting?  The iShares Barclays TIPS Bond Fund is at all time highs.  TIPS are Treasury Inflation Protected Securities.  See the NIA press release, Meltup video and $TIP chart below.

RBS's Bob Janjuah: Gold to 1,500, Euro/Dollar Parity, S&P 850 Fair Value, Treasuries Long Term Problem

Bob Janjuah, RBS (Royal Bank of Scotland) Chief Market Strategist, was on Bloomberg TV (Youtube, Bloomberg.com) last week and gave his views on the S&P, technicals, EUR/USD (Euro-to-US Dollar), Treasury yields, inflation and gold. I posted links to some of his recent reports here but he pretty much covered everything in this video.

Below are highlights and the embedded video.

Skating The California Foreclosure Monster

This is an interesting video called "Cannonball" about skating the pools of foreclosed homes in Fresno, CA. It's a deep video about the housing / economic crisis in California and has some strong language FYI. Thanks Reformed Broker for the video (via Good Magazine and originally Californiaisaplace.com).

Distressed Volatility Links 5/16 (Rosenberg, Roubini, Jim Rogers, El-Erian, Shiller, Chavez)

PIMCO's El - Erian Says U.S. Inflation May Accelerate - Reuters/NY Times
David Rosenberg Part 1: "Why The Depression Is Ongoing" - Zero Hedge
David Rosenberg Part 2: "Gold Increasingly Being Viewed As Currency Of Its Own" - Zero Hedge
Bloomberg's Tom Keene interviews Pimco's El-Erian - Zero Hedge
Robert Shiller: Fear of a Double Dip Could Cause One - NYT
Bailout Is ‘Nail in the Coffin’ for Euro, Rogers Says - BusinessWeek
Roubini Says Greece May Lead Euro Exodus, China Faces Slowdown - BusinessWeek
NYU’s Roubini Says ECB Has ‘Room to Maneuver’ to Back Recovery - BusinessWeek
Loan on mall partly owned by Simon about to default - Reuters via The CRE Review
Biggest Tea Grower Plans ’War Chest’ for Acquisitions (Update2) - Bloomberg
Greece Considering Legal Action Against U.S. Banks for Crisis - Bloomberg
Newest Addition to the Team, Taste_Arbitrage: Flash Crash - Stone Street Advisors
Bangkok fighting leaves 30 dead, 232 injured - AP
‘Iron Man 2’ Tops Box Office for 2nd Weekend With $53 Million - Bloomberg
Skateboarders’ Paradise Amidst the Real Estate Carnage - Reformed Broker
Banks Embrace ‘Extend and Pretend’ as U.S. Hotels Await Rebound - Bloomberg
Funding Curves Update and A Curious Observation - Professor Pinch
Chavez asks Venezuelans to tweet on speculators - AP

Saturday, May 15, 2010

Oil Prices Drop Further in Week as Euro’s Travails Continue - Guest Post

Submitted by OilPrice.com

Oil Prices Drop Further in Week as Euro’s Travails Continue

Oil Market Summary from: 05/10/2010 to 05/14/2010

Crude oil prices plunged nearly 4% on Friday and were off almost 20% from their 18-month high less than two weeks ago, as the euro continued to lose ground against the dollar and U.S. oil inventories continued to build.

Friday, May 14, 2010

Welcome Back Volatility, Where Does SPY Bottom? 200DMA, May Crash Low OR June 2009 High/Support (Charts/Videos) (SPY, DIA, XLF, VXX, LDQ, TLT, IEF, UUP)

In the short term it looks like SPY (SPDR S&P 500 ETF) broke the uptrend from March 2009 AND near term $115 support. So technically support is yet to be seen. That is the question of the day. Where will SPY (S&P 500 ETF) find confirmed support?  Today (Friday, May 14) $SPY closed down 1.80% to $113.90 on worries over Euro sovereign debt. Check out the flight to investment grade bonds (LQD), Treasuries (IEF, TLT), US Dollar Index ETF (UUP) and Volatility Index (VXX). Gold (GLD) closed down slightly.

Diaspora (Personally Controlled Social Web Server) vs. Facebook

Check out Diaspora, "an open-source, privacy-aware, personally controlled do-it-all web server". It seems like you're centralizing all your social data and have ultimate control on your own server. Is this a Facebook killa? Students at NYU are behind this and it looks like they raised $100,000. I'm down. Check out the introduction videos, presentation to ISOC-NY and recent articles.

Thursday, May 13, 2010

GLD, SLV, GDXJ Above Resistance, Why Art Thou Lagging GDX? (Also Check Out Implied Volatility)

The fundamentals for precious metals continue to look good. The EU/IMF backstopped European sovereign debt with a trillion dollars of Euros, the Euro continues to sell off against the Dollar and gold (currency volatility), Freddie Mac needs an additional $10.6  billion in aid, Fannie Mae needs $8.4 billion and I'm starting to think municipalities might need help paying their bills as well (watching MCDX).  There is no doubt that fiat money dilution is putting a bid under precious metals, whether as a currency crisis hedge, inflation hedge or sh* hits the fan hedge.  Check out the charts of $GLD, $SLV, $GDX, $GDXJ, $HL and GLD, SLV implied volatility.

Wednesday, May 12, 2010

Jim Iuorio Likes Silver, Not Just Catch Up Trade to Gold (SLV, GLD)

Jim Iuorio of TJM Institutional Services (who called the massive US Dollar rally in November - video) had some words about gold and silver today on CNBC.

Irene Aldridge (Able Alpha) Explains High Frequency Trading Strategies and What Could Have Caused the Crash Last Week (BNN, 5/7/2010)

The Terminator Irene Aldridge, of high frequency trading firm ABLE Alpha, was on BNN (Business News Television in Canada) discussing high frequency trading, different strategies (market making, statistical arbitrage, event arbitrage) and what could have sparked the crash last week.  She thinks a giant order in the futures market by a human or computer was responsible, whether erroneously ("fat finger") or purposely to manipulate the market.  She said these trading algorithms are only as good as the person who programs them.  Go ahead, trade against her.... Make her day.
 
Irene Aldridge on BNN (5/7/2010 - link)

Tuesday, May 11, 2010

High Frequency Traders Are Like Hackers (Mark Cuban's Thoughts On Wall Street)

Read Mark Cuban's blog post about Wall Street, it is interesting.  What Business is Wall Street In? - BlogMaverick, May 9, 2010.

Gold, Dollar Futures Diverging With S&P E-Mini Future (ES_M, GC_M, DX_M, GLD, SPY, UUP, May 11 Charts)

Since April 27, the June Gold and Dollar Index future have been diverging with the June E-mini future.  This marriage looks familiar.  I'm charting out the gold and silver ETFs tomorrow and watching resistance (GLD, SLV).

E-mini S&P June Future vs. Dollar Index Future vs. Gold Future
(Snapshots courtesy of OptionsXpress)

Euro Going To 1.20 By 4th Quarter (FX Concepts John Taylor), EUR/USD Technicals (Chart)

John Taylor of FX Concepts, the biggest currency hedge fund in the world, thinks the trillion dollar European bailout will just delay the fall to 1.20 on EUR/USD.  He thinks it will hit 1.20 in the 4th quarter and potentially lower.  Taylor is a Dollar bull favoring US over European economic growth and I'm sure forward looking US/EU interest rate differentials are part of the equation.  The chart does not look healthy.

Monday, May 10, 2010

Nothing Fazes Barton Biggs, Next Move in US Market is Up 15-20% Led By Technology, Sees Lower Euro

Nothing fazes Notorious B.I.Ggs (Barton Biggs of Traxis Partners) when it comes to US stocks. He was on Bloomberg last Monday thinking 2010 S&P EPS would hit $88-90. That translates to $1424 with an average 16 multiple. That's also 23% above today's close ($1159). $PG broke through the March low 3 days later (lol) and that didn't even faze him (see chart).  On Bloomberg Biggs said the next move in the market is 15-20% higher led by technology stocks.

Greenland Proceeds with Plans for Offshore Drilling in Arctic Waters - Guest Post

Guest post by OilPrice.com

Greenland Proceeds with Plans for Offshore Drilling in Arctic Waters

While the oil spill from a sunken drilling rig in the Gulf of Mexico threatens to become an environmental disaster, plans are proceeding for opening up new drilling territories in the iceberg-infested waters off Greenland.

Rep Alan Grayson: Federal Reserve Owns Red Roof Inn Through Bailed Out Bear Stearns Commercial Mortgage Securities Trust

This is interesting, we own a hotel chain. Watch Rep. Alan Grayson explain how the Federal Reserve owns the Red Roof Inn through a bailed out Bear Stearns CMBS.  I remember on 3/31/2010 Crain's Chicago reported that a Chicago (Streeterville) Red Roof Inn was hit with a foreclosure suit and the debt was part of a $455 Billion CMBS in default.  I did a search and found the actual mortgage in a Bear Stearns CMBS Trust:  Bear Stearns Commercial Mortgage Securities Trust, Series 2007-PWR17 (sec.gov) and Bear Stearns Commercial Mortgage Securities Trust, Series 2007-PWR18 (sec.gov). The New York Fed recently disclosed their holdings and BSCMS_07-PW17 A4, BSCMS_07-PW18 A4, BSCMS_07-PW18 A3 were on the list. Also remember in October 2009 I blogged that the Fed owned and was trying to sell the Crossroads Mall in Oklahoma for $24 million?

Sunday, May 9, 2010

Insuring USO From Oil Volatility Monster w/ Put Options ($OVX) - Reflection of April Complacency Capitulation and Failed Breakout (May/July USO Puts)

Look how put options on the Oil ETF $USO actually made long portfolios MORE money on the failed ceiling breakout. In other words, if traders were trying to time an oil spot spike above that 6-month ceiling resistance level and hedged against oil volatility monster risk ($OVX was at 2 year lows, as far as the chart can see), they not only protected their capital (depending on hedge ratio) but made more money on the other side of their own trade, Goldman RMBS desk style!

Reading: David Rosenberg on 3,000 Gold, JPM Silver Probe, Squawking the S&P Crash, Copper Pierced 200DMA, Venezuela Inflation Hits 30%

News you can use for Sunday May 9, 2010

Venezuela inflation rate hits 30%, highest in Latin America - USA Today h/t @futureshock
JP Morgan silver probe by CFTC, DoJ - Zero Hedge
EU Preps Euro Fund to Fight ‘Wolfpack,’ Debt Crisis - Bloomberg
Britain rejects Eurozone bailout fund - ABC.net.au (h/t market ticker)
Indonesia Hit by Magnitude 7.4 Quake, USGS Says - BusinessWeek
Copper future pierces 200DMA - chart at Pragmatic Capitalist
Ben Lichtenstein of TradersAudio squawking the crash from S&P 500 pit! - Zero Hedge (mp3)
David Rosenberg: The Case For Gold Going To $3,000 Is Getting Stronger - BusinessInsider
ECB advises Spain to make tough economic reform - Reuters
BP Oil-Collection Chamber Clogs, Removed From Leaking Gulf Well - Bloomberg
Oil at $65 a barrel may sound alarm bells for OPEC - Reuters
Rogers, Faber Advise Paring Investments as U.S. Stocks Slump (5/7) - Bloomberg