GOOG is Back Below 2010, 2011 Highs After Q4 Earnings, Will Google Finance Socialize With Google+?

Since DistressedVolatility.com gets paid by Google Adsense and is powered by Google services, I thought I'd listen to GOOG's Q4 2011 earnings call and look at its financial results. I embedded the call below via Youtube and put up a summary of Google's financial results from its press release. Google closed down 8.38% today at $586 after reporting weaker results. From WSJ:

"The weaker-than-expected results were hurt by Europe's economic woes as well as mobile and other new forms of online advertising selling for lower prices than Google's traditional ads. The issues come as Google continues its costly expansion beyond its core search-advertising business, which pits it against formidable competition in mobile, social networking..."

It would be cool if Google Finance built an online social bank with Google bankers and peer-to-peer lending, and Google+ had a social investing, trading and lending network. Or hook up with the financial Twittersphere and StockTwits. As of December 31, 2011, Google had $44.6 billion in cash and short-term marketable securities. Compete with the big banks, Google!

GOOG Technical Update

I see a false breakout above the 2010 and 2010 highs. It broke through the 50 day moving average today, but is still above the 200dma, 50 week moving average and 200wma. Also look at GOOG's trend from its IPO in 2004. It looks like a long-term ascending triangle formed using the highs in 2010-2012 (not perfect though with the 2007 high). If GOOG trades above $630 again that will probably provide confirmation that it wants to move higher, perhaps to $747 or the 2007 high. If it breaks through the long-term uptrend line, that would be bearish. The trendline hits around the 200 week moving average as well. Just looking at simple trends and support/resistance levels here.

GOOG 3-year Daily Chart

What the Next Decade Holds for Commodities - Guest Post

Guest post by Frank Holmes, CEO and Chief Investment Officer of U.S. Global Investors.

What the Next Decade Holds for Commodities

What a decade! A rapidly urbanizing global population driven by tremendous growth in emerging markets has sent commodities on quite a run over the past 10 years. If you annualized the returns since 2002, you find that all 14 commodities are in positive territory.

A precious metal was the best performer but it’s probably not the one you were thinking of. With an impressive 20 percent annualized return, silver is king of the commodity space over the past decade with gold (19 percent annualized) and copper (18 percent annualized) following closely behind.

Notably, all commodities except natural gas outperformed the S&P 500 Index 10-year annualized return of 2.92 percent.

Last year did not seem reflective of the decade-long clamor for commodities. In 2011, only four commodities we track increased: gold (10 percent), oil (8 percent), coal (nearly 6 percent), and corn (nearly 3 percent). The remaining listed on our popular Periodic Table of Commodity Returns fell, with losses ranging from nearly 10 percent for silver to 32 percent for natural gas.




I think this chart is a “must-have” for investors and advisors because you can visually see how commodities have fluctuated from year to year. Take natural gas, for example, which posted outstanding increases in 2002 and 2005, but has been a cellar-dweller for the last four years as a result of overabundant supply and softening demand. The industry is also still trying to digest breakthrough technology that opened the door to vast shale deposits at a much lower cost.

On the other hand, oil finished in the top half of the commodity basket six out of the past 10 years. No stranger to volatile price swings, oil possesses much more attractive fundamentals as we continually see restricted supply coupled with rising demand.

EURUSD Needs To Break Downtrend, Big Move Coming Either Way

EUR/USD is trying very hard to break through that downtrend line in the death channel. It tried for the fourth time earlier this morning but couldn't manage. It is inside both channels again and needs to decide which path to take. If it can breakout of the death channel with confirmation, 1.3146 is the next resistance level and then between 1.34-1.38 through March. Billions of Italian and Greek bonds mature in the next two months. If EUR/USD continues to ski down this slope, 1.18 support is next and then 1.08-1.10. Interesting article at Zero Hedge: A Shocking €1 Trillion LTRO On Deck? CLSA Explains Why Massive Quanto-Easing By The ECB May Be Coming Next Month.




A lot going on: S&P Downgrades France, EFSF; Greece Defaults Shortly (EUR/USD, Bond Yield Reactions)

Morgan Stanley's Adam Parker: S&P Hits 1,167 in 2012, Multiple Contracts With Low Rates, Earnings Plateau

S&P 500 through 2012
(via freestockcharts.com)
Adam Parker, chief equity strategist at Morgan Stanley, has a bearish outlook on the S&P 500 for 2012 with a year-end price target of 1,167. The S&P is currently trading at 1,289. The interesting part about his call is that he thinks the S&P's price/earnings multiple will contract "to 10x over time" because rates are low. He was on CNBC on January 3 and 9 discussing Morgan Stanley's report, see quotes below. To hedge himself, I noticed a CNBC slide that said he could be wrong if there is QE3, a meaningful cyclical upswing, or the U.S. government addresses the debt situation (wouldn't that sell off the market?). I found a quick summary of Parker's S&P call at Morgan Stanley's Global Strategy Roundup.

"US Equity Strategy: The 2012 Playbook
Adam S. Parker et al.

We establish a 2012 year-end price target of 1167 for the S&P 500, representing 7% downside from today's price and around 13% more conservative than the "muddle through" scenario implied by consensus. While 2011 was about multiple contraction, and further contraction is likely, we think 2012 and 2013 are likely to be more about earnings than the multiple. Our 2013 EPS estimate for the S&P 500 of $103.1 is 15% below the consensus bottom-up view of $121.1."

They also lowered their 2012 EPS estimate for the S&P 500 to $100 from $103. Parker discussed his market call with Jim Cramer and David Faber on CNBC on January 3.

S&P 500 Chart Looking Into 2012, Key Trendlines To Watch (SPY, $SPX)


Source: freestockcharts.com

S&P Downgrades France, EFSF; Greece Defaults Shortly (EUR/USD, Bond Yield Reactions)

10-year Portuguese Bond Yield (Bloomberg)
European sovereign credit ratings are in the news again. Standard & Poor's downgraded nine European nations on Friday, including AAA France, AAA Austria, Italy, Spain and Portugal. Yesterday, S&P also downgraded the EFSF, or European Financial Stability Facility, which is dependent on France's creditworthiness since they fund a large portion of the fund. Moody's then spoiled the downgrade party by keeping France at Aaa with a stable outlook. However, markets, except for Portugal (see chart), treated the catalysts like they were priced in.

The 10-year French OAT yield opened at 3.06%, hit a high of 3.12%, but then closed at 3.03% (price moves inversely with yield). And the 5-year French OAT yield spiked to 2.05% at the open and then closed at 1.86%. The 10-year French-German yield spread opened around 1.35 but then tightened to 1.26 at the close. On the other hand, Portugal's government bond yields spiked after S&P downgraded the country to junk. The 10-year Portuguese bond yield opened at 12.65% and rose all the way up to 14.40% to make a new high.

Republican Presidential Debate Live Streaming on Fox

If interested, the Republican presidential debate is live streaming at live.foxnews.com. Huntsman dropped out of the race and endorsed Mitt Romney.

Samsung Transparent Smart Window at CES 2012 (Video)

The Samsung Transparent Smart Window was presented at the 2012 Consumer Electronic Show last week. I thought it was interesting. Thoughts?