The Social Network Trailer (Facebook Movie)

Below is the movie trailer for "The Social Network" (500millionfriends.com), the new movie about Facebook / Mark Zuckerberg's creation at Harvard. Looks decent.

Oil Prices Show Little Momentum for Breaking Through $80 Barrier - Guest Post

Guest post by oilprice.com

Oil Prices Show Little Momentum for Breaking Through $80 Barrier

Oil Market Summary for 07/19/2010 to 07/23/2010

Prices of crude oil futures slumped below $79 a barrel on Friday despite a stock market rally and the rise of Tropical Storm Bonnie in the Gulf of Mexico.

The downward turn on Friday followed a sharp gain Thursday amid positive corporate earnings reports that some saw as a signal of economic recovery and the brewing tropical storm.

Tax Cuts Expire End of 2010, Expect Boring Market (Kass), Unemployment Benefits Extended

Here are *premium* news links for 7/22. The market indices violated a few resistance levels today. Developing...

Securing Uganda’s Oil Industry Urged But Repeat Terrorist Attacks Seen As Slim - Guest Post

Guest post by OilPrice.com

Securing Uganda’s Oil Industry Urged But Repeat Terrorist Attacks Seen As Slim

Although the Ugandan government can boost the security of its fledgling oil industry from future terrorist attacks that may scare away certain investors, Africa analysts doubt violence replicating the twin bombs that struck during the World Cup final is likely.

Somali militant group al-Shabab claimed responsibility for explosions that tore through the capital Kampala July 11 and killed more than 70 people.

Quicken Loans Moving 1700 Employees to Detroit, Light Rail Coming #Detroit

This is potentially good news for Detroit's tax base, tech and financial districts, and the city economy in general. All they need to do now is build that M-1 light rail up Woodward (CNN), move the Palace of Auburn Hills downtown (Detroit Pistons) and Detroit could start attracting corporations, jobs and people back to the city on the cheap. What do you think? Detroit's downtown actually looks good, can it not build out from the core? Below is the Quicken Loans press release, a Detroit link fest and view of Campus Martius Park/ Kennedy Square.

Quicken Loans to Move Headquarters, 1,700 Employees to Downtown Detroit by Mid-2010

Move establishes large Quicken Loans presence downtown two years earlier than original plan


LIVONIA, MICH. - JULY 13, 2009

Quicken Loans today announced plans to move its headquarters and approximately 1,700 of its team members to leased space in downtown Detroit’s Compuware Building by mid-2010. The move is subject to state and city approvals.

Ford (F) Earnings Friday, Chart, Options Setting Up (Part 3)

Get ready for Ford (F) earnings on Friday. I've been watching the chart ($F) and option activity for over a week now (see post on 7/14 and 7/20). Calls were mainly active in my previous posts, but today saw put volume in August above open interest. Calls were still heavily traded though and the ISEE ratio actually favored calls, I'll get into that later. At the close a total of 31,099 August $11 Puts traded with 24,116 already open. I'm not sure if they were opening or closing trades, naked sales or connected with stock, just pointing out that the Aug $11 put was in play (like calls last week) with volume > open interest in decent size. The put closed at $0.36 and would profit if $F traded below $10.64 before August expiration (or volatility spikes on a downside move). Ford closed at $11.55. Back to the ISE Call/Put Ratio. The ISEE ratio (ISE customer calls opened vs. puts) favored calls today: Calls: 3.83K / Puts: 802 with ISE implied volatility at 44.77 and historical volatility at 40.75.

Animated Explanation of Wall Street Reform Bill, White House Video (Kumar?)

The White House put out an animated youtube video explaining the Wall Street Reform Bill (full text) which was signed today by Obama. I originally found this video at ZeroHedge. Is Kumar the voice on this? White Castle!!!

China Consumes More Energy Than US For First Time, China Denies It (USO, Crude Oil, CL)

IEA graphic, full size at IEA.org
China surpassed the United States in energy consumption for the FIRST TIME according to the IEA.
"IEA calculations based on preliminary data show that China has now overtaken the United States to become the world's largest energy user. China's rise to the top ranking was faster than expected as it was much less affected by the global financial crisis than the United States." (IEA.org)
China denied it.

Bernanke Testimony, Semiannual Monetary Policy Report 7/21/2010

The Federal Reserve released their semiannual Monetary Policy Report today and Chairman Ben Bernanke testified before Congress. Find the full testimony text and video below. The full report PDF can be found here or at the Federal Reserve website. In other political news, President Obama signed the Financial Regulation Bill H.R. 4173 (CSPAN video) and the Senate passed the unemployment insurance extension bill 59-39. It is headed to the House tomorrow. The bill H.R. 4213 would extend benefits for 2.5 million Americans out of work for 6 months+ through November. The Dow closed down 109 points.

Chairman Ben S. Bernanke
Semiannual Monetary Policy Report to the Congress

Before the Committee on Banking, Housing, and Urban Affairs, U.S. Senate, Washington, D.C.
July 21, 2010

Chairman Dodd, Senator Shelby, and members of the Committee, I am pleased to present the Federal Reserve's semiannual Monetary Policy Report to the Congress.

Economic and Financial Developments
The economic expansion that began in the middle of last year is proceeding at a moderate pace, supported by stimulative monetary and fiscal policies. Although fiscal policy and inventory restocking will likely be providing less impetus to the recovery than they have in recent quarters, rising demand from households and businesses should help sustain growth. In particular, real consumer spending appears to have expanded at about a 2-1/2 percent annual rate in the first half of this year, with purchases of durable goods increasing especially rapidly. However, the housing market remains weak, with the overhang of vacant or foreclosed houses weighing on home prices and construction.

Taliban Using Monkey Fighters (Taiwan News Re-enactment)

The Taliban in Afghanistan are using monkey fighters. Here's a re-enactment by NMA News (NextMedia.com, Taiwan). Monkey soldiers are armed with AK-47s. Stay strapped around Monkeys!

30-Year Treasury to Hit 3% on Deflation Bid -Gary Shilling, TYX, USB Charts

Economist Gary Shilling of A. Gary Shilling & Co. was on Bloomberg TV yesterday talking about deflation, Treasuries and the Euro (EUR/USD). Watch the full embedded Bloomberg interview below. If they yank it, the media file is at Bloomberg.com. Shilling hasn't really changed his views, but he did say he lightened up on Euro shorts when the trade went against him recently. He's still anticipating a turn though (has small short position). Here's a summary of what Shilling said.
  • Euro will hit parity with US Dollar, problems will deepen in Europe
  • 30 Year Treasury Bonds will yield 3%, 10 Year Treasury Notes closer to 2%
  • Real return for Treasuries will be higher with 2-3% deflation (example)
  • Sees a double dip recession, slower growth (2% Real GDP growth annually over next decade)
  • Decade of deleveraging by financial sector and US consumer will bring deflation, slow growth
  • Government replacing private sector deleveraging, how much can they do...

Levels and Indicators to Watch in Gold Spot Chart XAU/USD

Adam Hewison's new MarketClub blog video gives you potential support levels and technical indicators (Fibonacci, MACD, proprietary trade triangles) to watch in Gold Spot. His monthly trade triangle is still green but hopefully you're well hedged from the recent top.  It's a free video.

VIX August 60 Calls Trade and VXX Puts? VIX, VXX, SPY #Volatility

Yesterday's action in the VIX (volatility index) futures options was interesting. The OptionMonster volatility sonar reported that 50,000 August 60 calls traded at 0.20. There was also activity in September (1x2). The action was "re-establishing protection in August and September". If SPY fails again at the $104-105 shelf and the $VIX spikes, the Aug VIX call and future will probably rise in value.

VXX is the ETF for near term futures on the VIX (a rolling long in the first and second month NOT spot http://www.ipathetn.com/VXX-overview.jsp). Today there was an article in the WSJ talking about the VIX futures curve being in contango (July: 26.10, August: 29.50, September: 31.8, October: 33 cfe.CBOE.com) and Jon Najarian mentioned that a trader bought August VXX puts yesterday, a 25-22 put spread I believe. The article said "a put in this instance signals expectations that the market will be calmer. Thus, this investor may have an outlook that is more like the VIX than the index's stormier futures". 

VXX is losing value today and the market is back in the green. The July VIX future expires tomorrow. So were those 50,000 AUG 60 calls for $1,000,000 simple disaster insurance in size before August expiration? The strike price is currently double the August contract. Watch $104-105 area on SPY in my opinion. In other VIX news look at this Barclays Rolls Out Inverse VIX ETN (XXV). See SPY, VXX and VIX Spot charts plus the volatility sonar video after the jump.

Watching Ford (F) Stock, Option Action Pre-Earnings, July Auto Sales (Part 2)

I'm watching Ford stock and option activity. I'll arb some Ford news and update the chart later. Last week I saw interesting call activity from August to January 2011. The options were also active before that post. I'm not quite sure of the exact nature of the in-and-out of the money call trades, but either way position accordingly for the technical catalyst on Friday, July 23 (Ford's earnings release). The trading channels on the chart are at an inflection point and $F is just above the 50 and 200 day moving average. An ascending triangle breakout above $12.15 resistance (January high, perhaps left shoulder) could confirm more upside. All in all, $F needs to hold the rising channel and 200DMA if it wants to retest the recent highs. Were the calls speculative in nature gaming Q2 earnings and July US auto sales on Aug 3? Hedge breakdown risk people, like GLD last week (imo). After the jump is a chart and surprise Ford video.

China’s Stocks Rally on Policy Outlook, Automakers Earnings - Bloomberg
"AW Car Co., which makes passenger cars in China with Volkswagen AG, added 1.8 percent to 17 yuan. Chongqing Changan Automobile Co., the Chinese partner of Ford Motor Co. and Mazda Motor Corp., rose 4.6 percent to 9.94 yuan."

Mike Pento Sees Sovereign Debt Crisis 3 Years Away, Hobbs vs. Pento (CNBC Video)

Michael Pento, Chief Economist at Delta Global Advisors, appeared on CNBC on July 16 and debated with Simon Hobbs and Daniel Gross of Newsweek. As always Pento made some interesting points about the economy and unleashed some data. CNBC's Hobbs put up a good fight though, until maybe the AAA credit rating part, I'll come back to this post in 3 years. Pento still sees trouble on the horizon for the US economy and told Hobbs he was writing off the economy for years. This was a decent debate. Below are quotes and the CNBC video. The original topic was why S&P 500 companies are hoarding so much cash.

30Y Bond/USD Decoupled, SPY, VIX, TLT, IEF, Copper, $UST, $USB Charts, Pre-Market Update

Desayuno with Distressed Volatility for Monday 7/19: First off here are a few news items mostly from my Twitter feed. These events aren't affecting Shanghai, EUR/USD or US index futures so far.

1. BP down 5%+ as FTSE opens, concerns over seepage detected near damaged well - @SkyNewsBiz

2. Hungary Forint Tumbles Most in Six Weeks as IMF Ends Talks With Hungary - Bloomberg
(*Here is Hungary CDS Quote at Bloomberg.com)

3. Ireland's credit rating downgraded by Moodys to Aa2 - Irish Times
(*Here is Ireland CDS Quote at Bloomberg.com)

4. Man buys Europe’s entire cocoa supply, analysts suspect market cornering - National Post

I saw that the 30Y Treasury Bond and US Dollar Index decoupled since mid-June. $USB is up 9.95% and $USD is only up 1.90% over 3-months. The US Dollar Index could eventually test the 200DMA and perhaps bounce at the March high. It's still trading in a descending channel with 50DMA resistance up above.

Stock Prices, Economic Data Buffet Crude Oil Futures in Lackluster Trading - Guest Post

Guest post by OilPrice.com

Stock Prices, Economic Data Buffet Crude Oil Futures in Lackluster Trading

Oil Market Summary for 07/12/2010 to 07/16/2010

An unexpectedly sharp drop in a key consumer confidence index sent stocks plummeting on Friday and drove down prices for crude oil futures so that the benchmark contract finished the week virtually unchanged from last Friday.

Lawrence McDonald Thinks SEC Going After Lehman Next (Goldman Settlement)

Lawrence McDonald, former Lehman trader/VP who wrote the book "A Colossal Failure of Common Sense", thinks the SEC will go after other firms more active in the synthetic CDO space after the Goldman settlement. He told PBS Newshour, "I think the big fish that the SEC wants is Lehman Brothers". The movie might not be over for $LEH.
"Goldman Sachs was actually a third-tier player in these kind of synthetic CDOs. Other firms were much more active. And I think you will see things there in terms going after the other firms on these toxic products.

But, more interestingly, I can give you some -- I can break some news tonight. Behind the scenes, I think the big fish that the SEC wants is Lehman Brothers. Lehman Brothers' bankruptcy is 10 times the size of Enron. It's bigger than Enron, WorldCom, Adelphia combined. And I'm hearing behind the scenes, the SEC, the FBI, and the Justice Department are active in going after Lehman Brothers executives."

Find the full article and video at PBS Newshour:

Was Record Settlement Against Goldman Sachs a Good Deal for Company? http://www.pbs.org/newshour/bb/business/july-dec10/goldman_07-16.html

Wall Riding in India (Videos)

Sunday entertainment. I had to put these videos up. Watch people ride motorcycles and cars around a vertical track in India.