Rick Santelli Goes Off On The Federal Reserve, Quotes Zero Hedge (CNBC Video)

Rick Santelli went off on the Fed again Friday and quoted Zerohedge.com (CNBC Video). For more rants click the label below. Off to drink beer in Chicago.

Crude Oil Prices Fall Below $80 Again as Officials Anticipate Slower Growth - Guest Post

Guest post by OilPrice.com

Crude Oil Prices Fall Below $80 Again as Officials Anticipate Slower Growth

Oil Market Summary for 08/09/2010 to 08/13/2010

Crude oil prices slumped below $80 a barrel again this week as the Federal Reserve and other official forecasters took a dimmer view of the economic recovery.

Friday’s closing price for the benchmark West Texas Intermediate futures contract of $75.39 a barrel marked a retreat from the contract’s short-lived foray outside the $70 to $80 a barrel range it has been trapped in for months. Prices fell nearly 7% from last Friday’s close of $80.70 a barrel.

A Dow Candlestick Signal and Historical Nasdaq Pattern (Guest Videos)

In the videos below, Adam Hewison of MarketClub charts out the Dow and Nasdaq and integrates his trade triangles technology. He saw an interesting historical pattern in the Nasdaq and a Japanese candlestick signal in the Dow.

Wharton's Siegel: No Double Dip Recession, Sees Dip in Treasuries (Long-Term Bonds)

If you missed it, Wharton's Jeremy Siegel was on Bloomberg TV on August 9 before the FOMC statement:
"I think there is now a very broad consensus that this slow patch is not going to develop into a double dip recession and despite the slow GDP growth in the second quarter, another good quarter of corporate earnings. So I think there's some good things that are coming through that are more than just what we expect tomorrow from the FOMC."

Back in March he thought there'd be a mid-year correction as the Fed started raising rates. The Europe sovereign debt crisis threw him a curve ball.

Marc Faber: Buy Farm With High Voltage Fence! Jurassic Park?

Marc Faber who writes the GloomBoomDoom report said some interesting things in his most recent report. This was from MoneyNews.com on 8/5/2010:

"With tongue apparently in cheek, he says buy a farm you can tend to yourself way out in the boondocks. And protect it with high voltage fences, barbed wire, booby traps, military weapons and Dobermans."

Hey, I've come to respect all potential black swans. According to the article Faber also said that Robert Prechter's Dow 1,000 call "shouldn't be excluded" given his track record. Prechter is in the deflation camp (see recent video comparing Dow to 1987). However, in the CNBC video below he said that all of the stimulus and money printing would be positive for equities if investors ditch Treasuries and the US Dollar, given the US fiscal situation. That could happen if inflation hits the economy and bond vigilantes invade the Treasury market (Niall Ferguson). Wouldn't Treasury Bill rolls and gold compete with equities for "real" return protection? What if it's stagflation. Also, would the risk free rate be replaced by stable US investment grade corporate bond yields, instead of Treasuries? Interesting days lie ahead!

8/3/2010: Printing will Create 'Final Crisis' (CNBC)

Bob Prechter: Dow Chart Similar to 1987 Top, Bullish on US Dollar, 100% Cash (Video, 8/12/2010)

After calling the market top in late March, Elliott Wave's Robert Prechter told BloombergTV yesterday that the Dow chart looks similar to the 1987 top (*see post with NBR and FNN videos reporting the 1987 stock market crash). We already experienced a stock market crash on May 6 at the head, is a right shoulder crash next? The chart does look vulnerable here with the potential head and shoulders setup. I'll post Dow charts tomorrow on multiple time frames. Prechter is still bearish on the stock market and bullish on the US Dollar (in 100% cash) and thinks deflationary forces will drag down commodity prices, including gold.

Reads: Nassim Taleb (stay in cash), Cisco Uncertainty, Gold (Goldman and Cramer), GLD, CSCO, TBT

Links for 8/11/2010

Taleb Says Government Bonds to Collapse, Avoid Stocks - Bloomberg
Cisco sees "unusual uncertainty," sales disappoint - Reuters
Goldman Sachs: "Gold Market Poised For A Rally As US Real Rates Head Lower" - Zero Hedge
Jim Cramer: Why You Should Buy Gold Right Now - CNBC
Trade gap likely points to slower economic growth - AP
Guest post: El-Erian on violent market moves - FT Alphaville
Yen Advances Versus Euro, Dollar as Growth Concerns Spur Demand for Safety - Bloomberg
JGB 10-yr yield hits 7-yr low with yen near 15-yr peak - Reuters
U.S. Two-Year Treasury Yield Is Near Record Low as Investors Seek Safety - Bloomberg
Exotic debt in US spreading its wings - Economic Times
Bankrupt Vallejo Should Pay Debt With Car Fees, MBIA Unit Says - Bloomberg
UBS Sued for Copying Oil Reports in Investor Research - Bloomberg, DealBreaker
Youth unemployment hits record high (UK) - Guardian.co.uk
Judge orders Wells Fargo to pay back $203M in fees - AP
Debts Rise, and Go Unpaid, as Bust Erodes Home Equity - NYT
Fortress to buy most of AIG consumer finance unit - Reuters
Is There A Liquidity Problem At Goldman Prime? - Zero Hedge
New York Times article on Société Générale's Albert Edwards - link
Spanish Crisis Threatens Second Front as Catalonia Rates Rise - Bloomberg
Soaring food prices hit Pakistan - Al Jazeera English

DV Link Arbitrage LLC
North Canal Street
Chicago, IL 

If $SWKS Trend Breaks, 200 Day Average or $12.5 Support Next (Chart)

If you read my previous post on Skyworks Solutions (SWKS) a few weeks ago [Skyworks Breaks Out of 8 Year Channel (SWKS, RFMD, TQNT, SMH, AAPL, QQQQ)], I said it broke out of an 8 year channel, which could be good thing, structurally, for the long term. However, if the market rolls over here, specifically the Nasdaq, there's a chance $SWKS could violate a rising wedge and test the 200 day moving average (hits today at $15.14) or floor support line ($12.55). It closed at $17.29 today, below the 50 day moving average.

I'm not seeing that much option activity, but the $17.50 August and November call strikes are loaded with open interest (Aug $17.50 C: 13,976 open contracts, Nov $17.50 C: 30,396). Wondering if it's long or short exposure (or hedging). Check out the SWKS chart. Click the image above (courtesy of FreeStockCharts.com) for a larger view.

William Black: We're Following Japan Hiding Losses, Rating Agencies Need To Go, Disses Wall Street Pay

Professor William Black on Tech Ticker touches on the "perverse" incentive structures on Wall Street and how executives and professionals aid the frauds instead of protect from them, fueled by accounting firms, auditors, appraisers, rating agencies, lawyers. Haha, pretty much the majority of the labor force. He then wants to know why these Wall Street institutions still exist since they are too big to fail, essentially borrowing at zero and buying long-term Treasuries, at the expense of unemployed America. He stresses that we're going down the Japan deflation route by hiding losses on bank balance sheets. He says look at the Nikkei, it lost 75% in nominal terms. In the third vid he says get rid of the ratings agencies. If interested read my post Knock Down Existing Financial Infrastructure, Accredited Investor Rule is Nonsense (Exposed in 2008).

E-Mini S&P 500 Future -1%, ES Technical Analysis and ETF Action (SPY, GLD, UUP, TLT)

Here's an update on UUP, SPY, TLT and GLD and the overnight S&P Future (ESU10). When the FOMC Statement hit, you can see that GLD and SPY rallied while TLT (Long Treasury Bonds ETF) and UUP declined. TLT fell pretty hard from its high. When looking at the full trading day though, TLT, UUP and GLD closed up around 0.25% while SPY closed down 0.55% (2 charts below).

It's 3:38am eastern time and the E-Mini S&P 500 September Future (ESU10) is down 1% at 1,108. ES is hitting ceiling resistance at the January and June highs (potential shoulders) and is sticking to its 200 day moving average (1,105).

FOMC Statement: Maintains Rate at 0-0.25%, Reinvesting Agency Debt, MBS Principal In Long-Term Treasuries (SPY, UUP, GLD, TLT Reaction)

Federal Reserve "FOMC Statement" for August 10, 2010, from FederalReserve.gov. Market reaction as of 2:55pm:

$SPY/S&P ETF -0.36% (regains losses)
$UUP/US Dollar ETF  +0.14% (erases gains)
$GLD/Gold ETF +0.42% (new highs on day after initial gap down)
$TLT/20+ Treasury ETF -0.14% (takes steep fall from high on day)
Release Date: August 10, 2010
For immediate release

September and October VIX Call Options Active In Futures (Volatility)

Videos below are from the OptionMonster Volatility Sonar Report, which provides updates on VIX options daily (OptionMonsterTV). VIX September and October calls were active today and yesterday. The curve is in contango, the Aug VIX Future is at 24.10 and Oct VIX Future is 29.60, with VIX spot bouncing around multi-month lows at 23 (see chart). It's always interesting to see what's going on in the VIX options, in size. VIX options and futures hedge or speculate on the price of volatility going forward. There are two ETFs that play the short term and mid term VIX futures (VXX and VXZ), but they have monthly rolling risk. The ETFs move with the VIX Futures not the spot measure you see streaming everywhere. The VIX (Volatility Index) is the overall price of fear or insurance in the S&P Index options (http://www.cboe.com/micro/vix/introduction.aspx).

John Taylor (FX Concepts) Eyeing EUR/USD Trend Reversal, Greece, Spain Will Default, COT Chart (EUR/USD, USDX, DXY, UUP, FXE)

I originally found this interview at Zero Hedge, find the video there, hat tip.

John Taylor of FX Concepts LLC (largest currency hedge fund in the world) was on Bloomberg TV on August 6 (video) calling for a trend reversal in EUR/USD (Euro/US Dollar). I see that large speculators and commercial hedgers are converging on the Dollar Index Future Commitment of Traders chart (COT). Large traders are net long 12,375 contracts (green line, 3rd chart) while commercial hedgers are net short -14,082 (blue line). In March the spread was 30,000 and -40,000, so it narrowed significantly. Catalysts will widen the spread and confirm a direction from here. Watch the Fed reaction tomorrow.

Reads: Negative Equity Falls to 21.5%, Goldman Lowers S&P Target, FRBSF Warning, Structured Notes Next Bubble

Global Link Arbitrage for 8/9/2010 (some articles are a few days old). I could arb links all day long.

Negative Equity Falls in Second Quarter, But National Home Values Continue to Decline
"Home values in the United States continued to decline in the second quarter of 2010, with the Zillow Home Value Index falling 3.2 percent year-over-year and 0.6 percent from the first quarter to $182,500. The national rate of decline decelerated from the first quarter, marking the second consecutive quarter of slowing declines, and negative equity fell to 21.5 percent, according to the second quarter Zillow Real Estate Market Reports(3)." (Zillow Press Release)
Bank of Japan Keeps Policy on Hold to Gauge Risk on Yen Gain - Bloomberg

JAL to Cut More than 19,000 Jobs by March 2015: Report - CNBC

China Trade Surplus Soars, Putting Yuan in Focus - CNBC

Goldman Sachs lowers 2010 S&P Target to 1,200 - Zero Hedge

Albert Edwards: U.S. Conference Board Leading Indicator Back in Recession Territory - Zero Hedge

S&P Technical Barriers (200 Week), S&P -0.40% YTD, 30-Year Treasury +11%! (TLT, $USB, SPY, $SPX)

2010 has been an interesting year so far for the S&P 500: 16.8% gain from February low, flash crash, 2.5 months of sideways action and a -0.40% return year-to-date. Not as interesting as Europe. The 30-Year Treasury bond is up 11% YTD, you should've listened to Gary Shilling! $TMF knocked out the bond vigilantes.

Japanese Government Bond Yields, 3-Month Bills (JGBs), News

If interested in charting out Japanese Government Bond Yields and Bills here are a few Bloomberg.com links. Tweak the numbers in the url for more years and months. These rates will probably coincide with inflation, deflation and/or growth going forward. Visit this page for a full list of JGB yields and prices, as well as a chart of the yield curve and Bank of Japan Rate. The Nikkei 225 is currently down 1% at 9,545, 9,000 is support (charts).

UBS's Art Cashin: Summer Rally May Be Topping, Sees Payroll Deflation

Catching up from last week. Art Cashin, director of floor operations at UBS, was on CNBC last week saying the summer rally may be over, with perhaps another melt up. He was also interviewed on King World News giving his perspective on the US Economy, unemployment, payroll deflation and GDP growth (downgrades to 1.5%).

Goldman Economist Jan Hatzius on GDP Growth, Inflation, QE2 (8/2010)

Goldman Sachs Chief U.S. Economist Jan Hatzius released an update on inflation, unemployment, US economic growth and quantitative easing. Check out the articles and video from Smartrend News.