19th June, 2009
Contact Paul A. Ebeling, Jr. firstname.lastname@example.org
Paul A. Ebeling, Jr. writes and publishes The Red Roadmaster's Technical Report on the US Major Market Indices, a weekly, highlyregarded financial market letter, read by opinion makers, business leaders and organizations around the world. Ebeling has studied the global financial and stock markets since 1984, following a successful business career that included investment banking, and market and business analysis. He is a specialist in equities/commodities, and an accomplished chart reader who advises technicians with regard to Major Indices Resistance/ Support Levels.
The Red Roadmaster’s Technical Report on the US Major Market Indices + ™ Now including: Crude Oil, Gold, Sliver and Forex Technical Up-date
Vol. 062209 # 1 Copyright June 22, 2009 The Red Roadmaster™ Editor/Compiler/Analyst/Commentator June 22, 2009 6:00 AM EDT Dear Reader, Flash Alert… I can be read daily and weekly on www.livetradingnews.com ,www.stockpreacher.com
www.dynamitecaps.com , www.bullstockalerts.com, www.pinnacledigest.com and www.stockbully.com in a round-up of global market news and analysis, including technical up-dates throughout each week. Double Flash Alert…see the RR technical snapshots daily at www.livetradingnews.com and http://stockpreacher.com/stocktalk and www.dyanmitecaps.com Today’s list includes: Apple, Inc (APPL), CarMax, Inc., (KMX), Microsoft Corporation (MSFT), Modavox Inc (MDVX), Smith & Wesson Holding Corporation (SWHC), UBS AG (UBS), WuXi PharmaTech (WX), and Wyndham Worldwide Corporation (WYN). See them all at www.livetradingnews.com and http://stockpreacher.com/stocktalk. Listen to "The Red Roadmaster" AKA Paul A. Ebeling, Jr., on the Big Biz Show with Bob "Sully" Sullivan every Thursday at 1:40p PDT on the CBS/Business Talk Radio Network. Go to www.bigbizshow.com for your local listing and or go to www.livetradingnews.com and www.stockpreacher.com to tune in Live.
Week Ending June 19 Stock Market Action Report Quadruple Witching Options Expiration (Quarterly) came and went quietly with little change. CarMax, Inc., (KMX) and Smith & Wesson Holding Corporation (SWHC) were among the biggest Price Gainers last Friday.
Recap of the US Stock Market Action for the Week Ending June 19 US stocks rallied into the close last Friday led by banks and big cap techs.
"This Bull Market is in the early stages,” Hugh Johnson, who manages more than US$1.5B as chairman of Albany, New York-based Johnson Illington, said in a Bloomberg Radio interview. “The numbers we’ve been looking at, with regard to the economy, pretty clearly indicate that probably in the Q-3 we’re going to have an expansion.” JPMorgan rose to the highest price in a week on the announcement saying it will cost less to repay government rescue funds than analysts estimated. Microsoft rallied after Goldman Sachs Group Inc. added it to its “conviction buy list” and Apple climbed after releasing a new iPhone. Commodity producers fell with Crude Oil and metals prices. The S&P 500 added 0.3% to close at 921.23 on the day. The index was off 2.6% in its first weekly loss in a month, but closing above the Key Level of 919. The lagging DJIA shed 15.87 pts (0.2%) to close at 8,539.73, and the leading NAS tallied up + 19.75 pts (1.09%) to close at 1,827.47. US Treasuries gained as traders bet losses that pushed 10-year yields to the highest in more than a week cannot be sustained. Ten-year yields increased 14 basis points last yesterday, the most since June 4. The US$ declined against most of its major counterparts as speculation the global recession is easing prompted investors to buy higher-yielding assets. It declined 0.4% to US$1.3952 vs. the Euro, from US$1.39 last Thursday. Crude oil for July delivery fell US$1.77 (2.5%) to US69.60bbl at the close trading on the New York Mercantile Exchange. Crude Oil futures have climbed 56% this year and are off 3.4% on the week last week. Volume and Breadth: Volume was heavy on the NYSE, with about 2.13B/shrs changing hands, well above last year's estimated daily average of 1.49B/shrs, and on the NAS, about 3B/shrs traded, well above last year's daily average of 2.28B/shrs. Advancers outnumbered decliners on the NYSE by 1,868 to 1,117 and on the NAS there were 1,565 advancers vs. 1,084 decliners. Note: The early leaders in a new Bull Market must be the banking and tech sectors. This action is proving my work once again. On a personal note: In our continuing discussion with my friend last week, we all agree on what has been coming on strong in this rally, and it is not basic materials but Biotech and Life Sciences and sustainable energy in the sector rotation. Again, the areas we believe likely to grow in strength and length are healthcare equipment, healthcare technology, and healthcare supplies (excluding healthcare facilities). Stay Tuned… Red PS: Savvy market and Capitol Hill observers are saying,” play the wrong side of a Barack Obama initiative (like health care reform) and you are likely to lose.” PAEJr ______________________________________________________________________
The most asked Question/s on the Week The Big Q: Red, How do I select a stock to buy, sell or trade? The Big A: There are likely as many ways to select a stock as there are folks selecting them, personally I prefer to have the odds in my favor. So, here are some fairly simple methods to help in the stock selection process. First, do not try to pick a bottom or to pick a top. Second, always try to trade in the direction of the market. Third, always try to have the odds on your side. If 70 to 80% of the market it trading up then do not look for stock that are trading down and vis-a-versa. When playing a Bullish Market, one of the
criteria for selecting a stock to buy is in an advancing sector, and be happy to take profit out of the middle of a move instead of trying to catch a bottom to buy. A key way to select a stock is on purely technical events; for instance, a stock crossing a moving average where there are no fundamental considerations. Sometimes you may combine the fundamentals with the technicals where a company is paying a high dividend that has low debt and a price to book ratio less than 1, and although those fundamentals may look good you need a good technical entry point and a close by exit level in case the stock price goes against you. Ask yourself some questions: What am I seeking in my trade or investment? Am I looking for a company that appears undervalued while paying strong dividends? Do I want a stock that is optionable? What exit strategy will I use? Have I considered what the upside appears to be and how does that compare to the risk I am taking? Key is to think about what you intend to do before you do it. Again, plan your work and work your plan. Remember, you never get poor taking a profit and/or cutting your losses. Tune out the Noise…
Red Go to www.stockpreacher.com or www.livetradingnews.com and download, read and study “Knowledge is Power,” the Stock Preacher’s e Book, it’s Free.
Best Quotes of the Week Best Green Quote of the Week: "China could potentially be the top market for solar. Companies up and down the supply chain should benefit," said Wu. Beijing is considering enhancing cash incentives at a time when European states including Germany, one of the largest solar markets, are pulling back on spending to slow industry growth. Best Technical Quote of the Week: “The leading NAS continued its Bullish action after breaking out over the November2008 high and challenging the October 2008 Gap open down level. Thus continuing its role as the market leader and continuing it up-trend, with very good action, i.e. the breakout, the test, and rebound.” Red Roadmaster AKA Paul A Ebeling, Jr. Best Quotes on the Stock Market: “Investors are not selling the leading NAS in here and this is a Key component in the rally.” Red Roadmaster AKA Paul A. Ebeling, Jr. Best Scary Quote: “…we will pass it and then find out what the cost is after that…” said Senator Dodd on healthcare.
Best Quotes on the State of the World Economy: “Consumer confidence is building on the momentum that it picked up in April, reflecting the strength we are seeing in the stock market," said Raghavan Mayur, president of TIPP, a unit of TechnoMetrica Market Intelligence. “And, everything you see has its roots in the unseen world. The forms may change, yet the essence remains the same. Every wonderful sight will vanish; every sweet word will fade, But do not be disheartened, The source they
come from is eternal, growing, branching out, giving new life and new joy. Why do you weep? The source is within you and this whole world is springing up from it." -- Jelaluddin Rumi Best Quote on Risk: “The basic difference between an ordinary man and a warrior is that a warrior takes everything as a challenge while an ordinary man takes everything either as a blessing or a curse, there is no such thing as luck.” --- Friedrich Nietzsche Best/Humorous Political Quote of the Week: “The jokes may not be as good, but neither is the guest list,” Obama said at the Radio and Television Correspondents Associations Dinner. “For me, there’s no contest. Why bother hanging out with celebrities, when I can spend time with the people who made me one? A few nights ago, I was up tossing and turning trying to figure exactly what to say. Finally, when I couldn’t get back to sleep, I rolled over and asked (NBC News anchor) Brian Williams what he thought,” Obama said. The Best Gold Quote: Thomas Geissler, owner of TG-Gold-Super-Market, said, "German investors have always preferred to hold a lot of personal wealth in gold, for historical reasons. They have twice lost everything. Gold is a good thing to have in your pocket in uncertain times." German gold bullion dealer TG-Gold-Super-Market says it plans to install as many as 500 gold vending machines throughout Germany, Austria, and Switzerland this year. The Stuttgart-based company aims to introduce the gold vending machines in train stations, airports, shopping malls, and anywhere else retail interest for gold bullion is likely. The new gold vending machines will sell small 1, 5, and 10-gram gold bars as well as South African Gold Kuggarand Coins. TG-Gold-Super-Market says each vending machine will hold up to 1,500 pieces of gold bullion. Best Overall Quote/Article of the Week: Challenge yourself to find one good piece of good news every day… Find Ways to Make Good News 05:32 PM Thursday June 18, 2009 HarvardBusiness.org By John Baldoni
Stephen Tyrone Johns died as he lived, helping other people. Johns opened the door for the man who shot him, a white supremacist who opened fire at the Holocaust Museum where Johns worked as a security guard. Friends and co-workers remember Johns, an imposing man who stood six-and-a-half feet tall, as a "gentle giant" who enjoyed his work and was well liked by others. To its credit, CNN.com played the Johns story on its home page on and off for a day or so. Typically the victims don't get much coverage; only the killers. In the coming days and weeks we will still get our fill of information about the man who shot Mr. Johns, but it was heartening to see CNN go counter to this trend. CNN's coverage also shows those of us who write and teach about leadership that while we cannot change the world overnight, we certainly can seek to change things within our own control. And so here's a suggestion for any leader who is wrestling with tough issues in these tough times: You should continue to address the impact of the financial crisis on your business, but you owe yourself and your people a break from the relentless progress of bad news. Challenge yourself to find one good piece of good news every day, or every other day, and share it with your people. You will find these stories in the news at large but also in your company specifically. Share these stories with your colleagues. Going a step further, you might even consider making some good news, too. Here are some suggestions to spread some good cheer. • • •
Recognize a colleague for a contribution she has made and publicly thank her for it. Spring for lunch for the team; nothing fancy — pizza and sandwiches will do. Hand out coupons for free movie tickets or DVD rentals. 4
Sponsor a community volunteer day, e.g. give people a day off to work in their communities. Create opportunities to share positive work experiences and lessons learned in your team meetings.
Spreading good cheer will not save your department from further cutbacks; it will not help your company be a more formidable competitor. It may not even save your job. But what it will do is get you in the habit of thinking more positively. That has its virtues. Not only will you brighten the lives of those with whom you work. You will also train yourself to approach your own job with a more optimistic attitude.
My pal Wally Stein’s Words of Wisdom “Feel the energy all around you, absorb it and be transformed.” .
________________________________________________________________ This Week’s 10 11 Big Stories + In View In View: Dads get less than Moms Consumers in the US will spend 27% less for Father’s Day than for Mother’s Day why? Well, because neckties, T shirt and back yard barbeques cost less than flowers and restaurant dinners. The average amount spent on gifts for these special holidays since records began to be kept in 2002 say Moms are always in the lead according to Kathy Grannis, a spokeswoman for the National Retail Federation. US shoppers plan to spend US$91.00 for Father’s Day on June 21 this year, compared with US$124.00 for Mother’s Day this past May 10, according to surveys for the NRF, a trade group based in Washington. This year average spending on Dads may fall 3.9%, compared with an 11% drop for Moms as consumers tighten their belts this year. “If you are looking to trim dollars, mentally it is easier to do that for Dad,” Pam Goodfellow, a senior analyst at BIGresearch in Worthington, Ohio, said in a telephone interview. The firm conducted the survey for the NRF. “Dads understand we can do a cookout as opposed to Mom or Grandma, who always prefer to be taken out for lunch or dinner.” Moms usually received flowers, a restaurant meal, jewelry or a gift card, according to a survey of more than 8,000 consumers conducted March 31 to April 7. Dinner in the Back Yard or a Ball Game rank highest for Dads, followed by clothes, gift cards and electronics, a May 5-12 survey showed. 1. Biggest Shift in U.S. Health Care May Emerge in 45-Day Sprint The largest expansion of US health care since the creation of Medicare in 1965 may emerge from legislation designed to reshape the medical industry and change how Americans receive and pay for care. Congress today begins crafting legislation that Democratic leaders plan to push through both chambers by their August recess. The measure may require all Americans to get medical insurance, force insurers to accept all patients and end the tax break for employer-paid health benefits. These changes may be hammered out with unprecedented speed at the urging of President Barack Obama, who four days ago said, “this is the moment.” Obama has made a health-care overhaul his top domestic priority, using his February budget proposal to call it a “moral” imperative to extend coverage to the country’s 46 million uninsured. Obama also tied the long-term fiscal soundness of the US to controlling medical costs. Health care consumes 18 percent of the US 5
economy and may rise to 34% by 2040, the White House Council of Economic Advisers reported June 2. “I don’t think we’ve ever had anything this large in American history aimed to go this quickly that touches everybody’s lives,” said Robert J. Blendon, a professor of health policy and political analysis at Harvard University in Cambridge, Massachusetts, in a telephone interview. “They’re moving at a pace we’ve never seen before.” The US will spend more than US$2T this year on health care, the Health and Human Services department reported in February. Today, the Senate Health committee will begin debating a bill that includes “gateways” where consumers may compare coverage plans. The Senate Finance Committee later this week will unveil a bill that among its provisions will call for taxes on health benefits, and House committees will release a draft of their own comprehensive measure that would create a government-backed plan to compete with private insurance.
Individual Investors Not Fueling Recent Rally The conventional wisdom is that retail investors, and not institutions, have powered the market’s rally off the March 2009 lows. Not so, says Charles Biderman, CEO of TimTabs Investment Research. The firm tracks the flow of money in and out of mutual funds. Since the start of May, he says, “U.S. equity funds have taken in a modest US$7.1B” despite improved performance. Instead, retail investors are plowing money into bond funds. Moreover, Biderman says that individuals did capitulate in the heat of the crisis, having been burned twice in the last ten years. The retail investor is not in the market yet, but history tells us that they will be, Biderman expects them to come in to the market in 2010.
3. The Rally's fate hinges on the US Fed's action and continuing growth in home sales The economic outlook is improving, but US stocks' rally that began in March may run into an obstacle or two this week as investors will assess data on new and existing home sales that could point to whether the battered housing sector has bottomed, and they will keep an eye out for profit forecasts or warnings as Y 2009 Q-2 comes to a close. The US Fed is expected to leave rates unchanged after its two-day meeting ends Wednesday, but investors will check its statement for clues on the central bank's economic outlook going forward.
4. Moody's warning on California debt stuns state The State of California struggling to close a US$24.3B budget gap faces the prospect of a "multi-notch" downgrade in its credit rating if the state's legislature fails to act quickly to produce a budget, Moody's Investors Service warned last Friday. Moody's decision to place California's general obligation debt on alert for a possible "multi-notch" downgrade stunned state officials. The state's current A2 credit rating is Moody's sixth-highest investment grade and makes California the lowest rated of the 50 states. The A2 rating is just five notches above speculative status and Moody's raised the potential for the rating to tumble toward "junk" status if lawmakers fail to quickly produce a budget for Governor Arnold Schwarzenegger to sign. A downgrade could push California's borrowing costs up at time when state officials expect to issue up to US$9B in revenue anticipation notes as soon as possible after a budget agreement is notched, a deal whose timing is in doubt.
5. Apple’s Investors Get Used to Life Without Steve Jobs Apple Inc. shares have climbed 63% since Chief Executive Officer Steve Jobs went on medical leave, signaling investors are confident 6
the maker of the iPhone can succeed without its co-founder at the helm. Jobs turned over day-today operations in January 2009 to operating chief Tim Cook may give up the CEO job permanently when he returns later this month. Jobs, a cancer survivor, could take a new position, possibly as Appleâ€™s Chairman, letting him guide the company with less scrutiny of his health. Apple has not disclosed the exact nature of Jobsâ€™ medical condition. He said on Jan. 5 that he was suffering from a hormone imbalance and announced nine days later that his health issues were more complex than he thought. Cook and a team of product and marketing executives have raised their profiles in Jobsâ€™ absence, unveiling updated Macintosh computers and iPod media players. The company also is releasing a new iPhone today, generating buzz even though Jobs, 54, did not introduce the device.
6. US exports to Iran up in Obama's first months Iran spent nearly twice as much on US imports during President Barack Obama's first months in office as it did during the same period in 2008, showing that despite trade penalties and tense relations, the two countries are still doing business. The US exported US$96MM in goods to Iran from January through April, according to an Associated Press analysis of U.S. government trade data compiled by the World Institute for Strategic Economic Research in Holyoke, Mass. U.S. exports to Iran totaled US$51MM during the same period in 2008 and US$27MM over those months in 2007. Soybeans, wheat and medical supplies -- all considered humanitarian items exempt from US trade sanctions are among the top exports this year. Humanitarian shipments are an example of the tricky line the United States has walked in dealing with Iran -- even more so during Iran's election protests. Obama has proceeded carefully when commenting on uprisings in Iran over President Mahmoud Ahmadinejad's disputed re-election, saying he shared the world's "deep concerns" but that it wouldn't be productive "to be seen as meddling." In allowing exports of necessities such as grain and medical supplies, the US has tried to send a message to the Iranian people that it is a friend to them and has no interest in punishing them for their government's policies. At the same time, by helping Iran feed and provide medical care to its population, Washington can't help but provide an unintentional benefit to the Tehran government.
7. Incentives add shine to China solar drive Beijing's bid to boost the solar energy sector could draw more than US$10Bin private funding for projects and put China on track to become a leading market for solar equipment in the next three years. Shares of US listed Chinese solar firms such as Suntech Power Holdings, the world's biggest crystalline solar panel-maker, have risen strongly on expectations China will soon unveil more cash incentives to develop solar energy. China, the world's top greenhouse gas polluter, is trying to catch up in a global race to find alternatives to fossil fuels, blamed for carbon emissions affecting the planet's climate. Any cash perks for the sector will help drive demand for solar energy systems and create bigger businesses for companies involved in the entire solar supply chain, says Julia Wu, an analyst with research firm New Energy Finance. Top panel-makers including Trina Solar, Yingli Green Energy Holding Co and JA Solar are expected to benefit, while solar wafer-makers such as LDK Solar could gain from related business opportunities."China could potentially be the top market for solar. Companies up and down the supply chain should benefit," said Wu. Beijing is considering enhancing cash incentives at a time when European states including Germany, one of the largest solar markets, are pulling back on spending to slow industry growth. Nearly 10 yrs of subsidized prices have made Germany among the largest markets for photovoltaic panels, which transform sunlight into electricity, producing solar giants including Q-Cells AG and Conergy.. 7
8. Consumers’ eye values as well as value in recession Consumers are still putting environment and ethical issues at the heart of their spending decisions in the recession, even if they have cut back on some higher priced "green" goods like organic foods. Shoppers are flocking to environmentally friendly products sold at competitive prices and are often making more frugal choices with a view to their environmental benefits, such as cutting down on packaging and waste. They are also still prepared to pay a premium from green goods when there are long-term savings to be made, as with energy-efficient light bulbs, and when purchases are being made to last for years, like electrical goods and cars. The challenge for retailers and their suppliers is to come up with more affordable, eco-friendly products without hurting profit margins that already squeezed in the recession. 9. Goldie free of government but not Warren Buffett Last week Goldman Sachs Group Inc. settled its US$10B debt with the US taxpayer; now what will they do about Warren Buffett? Last year, Buffett's Berkshire Hathaway Inc. invested US$5B in Goldman and acquired preferred shares and warrants to buy common stock, making Buffett's presence large, because of his reputation for integrity and as one of the world's savviest investors. So what will Buffett, now the 2nd wealthiest man in the United States do? "Basically not much," said Vahan Janjigian, author of the book “Even Buffett Isn't Perfect.'" He has a history of making fairly large investments in these kinds of companies and sitting back and letting the management team run the company." Janjigian expects Buffett to sit tight as Berkshire collects US$500M of annual dividends on the preferred shares and earns paper profits on accompanying warrants to buy an additional US$5B of common stock at US$115/shr for up to five years.
10. Geithner Defends Plan to Give Fed Stepped-Up Powers US Treasury Secretary Timothy Geithner defended the administration’s proposal to give the Federal Reserve increased powers in his first public tussle with lawmakers skeptical whether the central bank is up to the job. Advocating for President Barack Obama’s regulatory overhaul on Capitol Hill, the Treasury chief faced repeated questions from senators who cited previous regulatory failures at the Fed and potential conflicts with its monetary-policy duties. “The Federal Reserve is best positioned” to oversee the biggest financial companies, Geithner told the Senate Banking Committee in Washington, adding that the Obama plan gives the Fed only “modest additional authority.” Most central banks around the world have some responsibility for monitoring systemic risks, he said. Obama’s plan calls for the Fed to monitor the biggest, most interconnected banks, sets up a new agency to oversee consumer financial products and brings hedge funds and private equity firms under federal supervision for the first time. The central bank, which supervised Citigroup Inc. and Bank of America Corp., has come under fire from some members of Congress for its secretiveness and lack of public accountability. The administration also wants to put an additional check on the Fed’s emergency lending power by requiring the Treasury to approve its use in advance, Geithner told the panel. He also said the new consumer agency will take away Fed authority over mortgages, credit cards and other issues.
11. Volkswagen sees positive Q-2 results Germany's Volkswagen will have a "positive result" in the second quarter and would consider giving sports car maker Porsche a loan if asked, VW's chief financial officer Hans Dieter Poetsch said last Saturday. "We will surely end with a positive 8
result," Poetsch told Reuters, referring to the second quarter."We've reduced volumes and inventories which is why we have a strong cash flow. In the second quarter we will continue on this path. Net liquidity will remain at a high level," he said on the sidelines of a conference in Bayreuth. Net liquidity in the first quarter was more than 10 billion Euros. Poetsch added that VW, Europe's largest auto maker, is also on track to having a "positive result for the full year."Many other carmakers around the world are running big losses due to a collapse in sales caused by the global economic crisis. 12. The S&P 500 headed North The benchmark S&P 500 index .SPX should surge back to its October 2007 record above 1,500 by the end of 2012, provided the US economy sees a Vshaped recovery, JPMorgan Chase Chief U.S. Equity Strategist Thomas Lee said last Wednesday. "The global economy is in the midst of a synchronized recovery," Lee said at the Reuters Investment Outlook Summit. "If we end up with a V-shaped recovery, we could go back to our record high of 1,500 in 2011-2012," he added, referring to the S&P 500. The S&P 500 fell 0.4 % to 908 last Wednesday. Lee also reiterated his year-end 2009 target of 1,100 for the S&P 500, saying the United States will likely come out of its recession some time this summer, followed by the rest of the developed world. In October 2007, the S&P 500 hit a record closing high of 1,565.15, before falling back. In March of this year, it slumped to a 12-year closing low, but has since rebounded by about 40 percent on hopes the recession that begun in December 2007 was moderating. Lee added that a market correction in the wake of the recent run-up would be "healthy," and could lure back investors who opted to sit out the recent rally. "This rally has left many investors uninvested or underinvested. The pullback is the entry point to really see more meaningful money put to work," said Lee, who has been named a top analyst in Institutional Investor magazine's annual all-star poll. He favors the financials, industrials, technology and consumer discretionaries sectors, in that order, saying the sectors would be the biggest beneficiaries of an economic recovery. Within financials, he favors asset managers. The S&P financial index .GSPF is up 84% since the broader market's 12-year low on March 9. "We are still favoring cyclicals over defensives," said Lee. Even so, he was mindful of potential risks to the recovery."The biggest risk is that we're implicitly assuming the consumer is stabilizing. There's a lot of potential shocks. If oil goes to US$100 bbl, you can't have a recovery," said Lee, adding the other risk would be if savings rates somehow overshoot.
This week's Big Story: Hot Topic: BRIC Dollar Bonds Beat Ruble, Real, Yuan Debt as Medvedev Frets For all the criticism of the US currency by leaders of the so-called BRIC nations, dollar bonds sold by the largest emerging-market countries are outperforming debt traded in Reais, Rubles and Yuan. Russian President Dmitry Medvedev, Chinese President Hu Jintao, Indian Prime Minister Manmohan Singh and Brazilian President Luiz Inacio Lula da Silva called for a “more diversified” monetary system yesterday to reduce dependency on the world’s reserve currency. The four leaders met in the Urals city of Yekaterinburg, where they planned to discuss buying each other’s bonds and foreign exchange, said Arkady Dvorkovich, Medvedev’s top economic adviser. “It does not up to politicians to determine which currency will be the world reserve currency,” said Lutz Karpowitz, a currency strategist at Commerzbank AG in Frankfurt. “In the end the market decides it.” Dollar bonds sold by China earned 11.4% in the past year, more than double the 4.6% for debt in Yuan, JPMorgan Chase & Co. indexes show. Brazil’s US currency bonds returned 3.6% as real-based notes lost 4.9%, and Russia’s dollar bonds outperformed with a 1.9% loss compared with a 7% in Ruble debt. India does not have US$ denominated debt
Really Big Story: Switzerland strikes tax deal with the USA Switzerland and the United States have reached agreement on a double taxation treaty, the Swiss finance ministry said last Friday, this is a key step toward its removal from a list of tax havens. Switzerland, whose private banks manage around US$2T of foreign wealth, aims to secure 12 new bilateral tax deals by the end of 2009 which could allow it to be removed from an OECD "grey list" of states which need to improve tax cooperation and avoid possible sanctions from G-20 nations. Talks with Washington are crucial for Berne as US authorities have accused Swiss bank UBS of helping rich clients to hide money in secret Swiss accounts. UBS is losing clients because of the bad publicity. While the Suisse/US agreement had never been dependent on solving the case against UBS, it could prove difficult to force through parliament without a solution, a spokesman for the Swiss Finance Ministry said.
Big Breaking Story: TechM renames Satyam as Mahindra Satyam (SAY.N) After two days of deliberations on drawing up the road map for the fraud-hit Satyam Computer Services at the 'Leadership Meet' that concluded yesterday, Tech Mahindra has given the IT outsourcing company a new brand identity -- Mahindra Satyam. The logo will be adopted from the Mahindra Group. “This rebranding exercise symbolizes an amalgamation of the Mahindra Group’s values with Satyam’s fabled expertise, even as it retains that part of Satyam’s identity which signifies commitment, purpose and proficiency of the organization and its people,” Anand Mahindra, vice-chairman and managing director of the Mahindra Group, stated in a press release today “This is a significant milestone towards the recovery of the company (Satyam). We are optimistic that this new brand will re-energize the organization and will be well received by all our stakeholders. With this initiative, we will witness steps by the management to adopt and inculcate the values of ‘performance and customer first’, ‘good corporate governance and citizenship’, which are drawn from the Mahindra Group. With this synergistic approach, Mahindra Satyam will learn from the best management practices of the Mahindra Group while focusing on nurturing Satyam’s innate skills and capabilities,” said Vineet Nayyar, executive vice-chairman on the Satyam board "In terms of professionalism, we have always sought the best people for the job and given them the freedom and the opportunity to grow. We will continue to do so. We will support innovation and well reasoned risk taking, but will demand performance. Customer is first... We exist and prosper only because of the customer. We will respond to the changing needs and expectations of our customers speedily, courteously and effectively," the release said.
On the World Scene: Developing world leaders show new power at summits Leaders of emerging world powers discussed reducing reliance on the United States, as well as boosting security and trade, at two summits last Tuesday hosted by Russia but excluding the West. The range of topics on the agenda and the line up of presidents attending showed the growing economic and political power of the world's emerging nations, including India and China, and their desire to forge new levers of influence. Host president Dmitry Medvedev of Russia hailed the Urals city of Yekaterinburg as "the epicenter of world politics." The need for major developing world nations to meet in new formats was "obvious," he said. The BRIC nations of Brazil, Russia, India and China called for reform of international financial institutions, sweeping changes to the United Nations to give a bigger role to Brazil and India and a "stable and predictable" currency system.
At the Movies: 'Proposal' accepted at the box office Sandra Bullock comedy knocks 'Hangover' to No. 2 Moviegoers said yes to Disney's "The Proposal" during the weekend as the debut of the femaleskewing romantic comedy topped the North American box office with an estimated US$34.1MM, knocking the hard-partying guys of "The Hangover" into 2nd place. Sony's "Year One," Harold Ramis' burlesque of the early history of mankind and the weekend's other new wide opener, found it tougher going. Unable to 10
overcome strong holdover business from "Hangover" and "Up," it had to settle for a fourth-place showing of US$20.2MM. Among exclusive openings, Woody Allen's "Whatever Works" worked just fine. The Sony Pictures Classics release bowed on nine screens, grabbing US$280,720 for a per-screen average of US$31,191. After several weekends in which the domestic box office was down from year-ago frames, ticket sales finally registered an uptick, performing 3%-4% better than they did last year at this time, when the debut of "Get Smart" led the list with a US$38.7MM opening. The holdovers certainly helped. Falling just 18% as it took in US$26.9MM in its 3rd weekend, Warner Bros.' "Hangover," with a cume of US$152.9 MM, hit the $$150MM mark faster than any other R-rated comedy. It took just 17 days to establish the record, besting "Wedding Crashers" by 10 days, and is positioned to play well into US$200MM territory. Disney/Pixar's "Up" also continued to glide along. Ranked third during the weekend, it attracted US$21.3 MM , bringing its cume to US$224.1MM as it sailed past the final gross of last summer's Pixar hit "WALL-E." The PG-13-rated "Year One," starring Jack Black and Michael Cera, debuted in 3,022 theaters. Its 4th place finish and US$20.2MM opening was in line with expectations, Sony said. The low-brow comedy played heavily male (57%), with 47% of its audience under 21. Sony's thriller "The Taking of Pelham 1 2 3," entering its 2nd weekend, took the fifth slot as it dipped by 52%. Its weekend haul of US$11.3MM raised its cumulative gross to US$43.3MM. In 9th place, the second weekend of Paramount's Eddie Murphy comedy "Imagine That" dropped by 44%. After collecting US$3.1MM its cume is a mere US$11.4MM Rounding out the top 10, Fox's "Night at the Museum: Battle of the Smithsonian" ranked 6th with US$7.3MM and a cume of nearly US$156MM.
This Weekâ€™s Economic Data Tuesday, Jun 23 Existing Home Sales, May (10:00): 4.83M expected, 4.68M past Wednesday, Jun 24 Durable Orders, May (08:30): -0.9% expected, 1.9% past Durable Orders, Ex-T, May (08:30): -0.5% expected, 0.8% past New Home Sales, May (10:00): 360K expected, 352K past Crude Oil Inventories, 06/19 (10:30): -3.87M past FOMC Rate Decision, (2:15) Thursday, Jun 25 Initial Claims, 06/20 (08:30): 608K expected, Q-1 GDP - Final, Q1 (08:30): -5.7% expected, -5.7% past Friday, Jun 26 Personal Income, May (08:30): 0.2% expected, 0.5% past 11
Personal Spending, May (08:30): 0.4% expected, -0.1% past PCE Core, May (08:30): 0.2% expected, 0.3% past Michigan Sentiment-Rev, June (09:55): 69.0 expected, 69.0 past ____________________________________________________________________________________
The Samurai Archerâ€™s POV on China's Commodity Buying Spree
Strong buying by China has helped lift commodity prices around the world this past Spring, but some evidence suggests that a sizable portion of this buying has been to build stockpiles in China, At least 90 large freighters full of iron ore are idling off Chinese ports, where they face waits of up to two weeks to unload because port storage operations are overflowing. Yet actual steel production from that iron ore is recovering much more slowly in China, and Chinese steel exports still remain weak. Commodities and shipping executives report that the Chinese are stockpiling a range of other commodities, including aluminum, copper, nickel, tin, zinc, canola and soybeans, and starting last April, China began stockpiling significant quantities of Crude Oil. China's goals vary. Chinese companies have bought iron ore heavily on the spot market in anticipation of higher prices in annual contract talks now nearing completion. The Chinese government has been stockpiling Crude Oil and some metals for strategic reasons, and bought huge quantities of aluminum and canola to insulate domestic producers of these goods from falling global prices over the winter. Those extra purchases beyond China's daily needs have helped reverse the price collapse in commodities that followed the economic downturn last fall. "China's strategic stockpiling and replacement of lower-quality domestic production with higher-quality imports have supported the recent rally in prices for many base metals, but we will not see a sustainable turnaround in demand until the major economies of the U.S., Europe, and Japan recover," said Terry Fanous, a senior vice president in Sydney for Moody's, adding that the leading economies were not likely to recover until next year. The Standard & Poor's GSCI, an index of global commodity prices, has risen 41% from its low on Feb. 18,2009, but is still less than half its record, set on July 3, 2008.
One of the best leading indicators of international trade in commodities is the Baltic Exchange Dry Index, which measures the daily cost of chartering a large freighter. While the Standard & Poor's GSCI has continued to rise in the last week, the freight index has fallen by a fifth in that period. The list showed ship owners charging US$58,000.00 a day now but just US$24,000.00 a day for charters next year or in 2011, an indication that there will be more ships than cargoes in the years ahead, particularly with shipyards still finishing vessels ordered during the recent boom. According to J.P. Morgan, China's iron ore imports were 33% higher in April than a year earlier. Crude Oil imports were up nearly 14%, aluminum oxide imports climbed 16% and refined copper imports jumped 148%. Imports of coal soared 168% as Chinese utilities bought more foreign coal while trying to negotiate better prices with domestic producers. Assessing steel demand recently has become a subject of almost obsessive interest among many shipping executives and economists as a barometer of emerging markets' health and as an indicator of demand for everything from iron ore to ships to cars. Sanjay Mehta, one of the four managing directors of Essar Global, the huge Indian multinational in steel, shipping and other heavy industries, estimated that North American steel mills were operating at 50 to 60% of capacity, Chinese steel mills at 70% of capacity and Indian steel mills at 100% of capacity. The resilience of the Indian economy is helping to sustain demand for commodities too, Mr. Mehta said. He suggested that part of China's purchasing over the last several months represented an effort to rebuild inventories that were drawn down during the autumn and winter. Prices of many commodities have jumped sharply in recent months, spot Crude Oil prices, in particular, have doubled since late December 2008. That is driving up the price of gasoline and diesel in many countries, including the United States. Steel demand in China is already recovering for types of steel used in construction, Mr. Elman said. Local, provincial and national government agencies are ramping up investments quickly as part of economic stimulus programs, but demand has been slower to rebound for higher grades of steel used in consumer products, despite US$1 B in Chinese government incentives for the purchase of cars and household appliances, particularly by residents of rural areas. Some economists say they are bullish on commodities because they believe that the United States and European economies are on their way to recovery. "The commodity price rally is for real," said Ajay Kapur, the chief global strategist at Mirae Asset, a big Korean financial firm. "I'm not expecting any huge correction from here." Other executives, particularly in shipping, are less optimistic, and see signs of a bubble in freight rates, and possibly commodities, that may repeat the sudden rise and fall of prices last year. "The past few weeks have been nuts and, rather than cheering this sudden comeback of the dry bulk market, I do have a considerable amount of concern that we are seeing the same bubble again," Kenneth Koo, the chairman and chief executive of the Tai Chong Cheang Steamship Company, another big Hong Kong shipping line, wrote in an e-mail message. "And like that past bubble, it's not going to sustain." God Bless. KK ____________________________________________________________________________________
Snap Shot of the Major US Market Indices 13
NAS: Thoughts on the leading NAS; for now it is healthy, and not showing the double top action of S&P 500 and the SOX. The Big Q: what happens when/if S&P 500 tests further? Will NAS hold its support at the November peak? If S&P 500 continues to slide will the NAS test its November high again? Stay tuned, be nimble and letâ€™s see for folks still wanted to buy the tech stocks. Stats: +19.75 pts (+1.09%) close 1827.47 Volume: 2.732B/shrs (+33.98%) S&P 500: The index bounced back up to the December 2008 highs it broke early last week. That former support now may become resistance. The financials are one of the key factors that could change the entire story. They are not breaking down in here. Some analysts are looking for a run at the near term resistance and then a fad back to 875 before it begins its next run. Stats: +2.86 pts (+0.31%) close 921.23 NYSE Volume: 2.128B.shrs (+95.5%) DJIA: Lagging in here. Stats: -15.87 pts (-0.19%) close 8539.73 Volume: 528M/shrs Friday. Stay tunedâ€Ś The Charts* DJIA Chart: http://stockcharts.com/h-sc/ui?s=djia The S&P 500 Chart: http://stockcharts.com/h-sc/ui?s=sp500 The NAS Charts: http://stockcharts.com/h-sc/ui?s=NAS Stock Chart School: http://stockcharts.com/school/doku.php?id=chart_school Stock Charts Glossary: http://stockcharts.com/school/doku.php?id=chart_school:glossary_s *Charts from www.Stockcharts.com MARKET SENTIMENT The Sentiment Indicators: These indicators are psychological indicators that attempt to measure the degree of bullishness or bearishness in a market. These are contrary indicators and are used in much the same fashion as overbought or oversold oscillators. Their greatest value is when they reach upper or lower extremes. 1. 2. 3. 4.
VIX: 27.99; -2.04 VXN: 28.3; -1.73 VXO: 26.54; -1.99 Put/Call Ratio (CBOE): 0.86; -0.08
Note: Are you watching the VIX? It is now telling us that we are moving back to a more rational market.
*The Market Volatility Index (VIX) measures the volatility of the market. A recent news story described it as "the options market's gauge of investor fear." Traders use VIX as a general inverse indicator of market volatility and sentiment. High numbers mean that there's excess bearishness, and low numbers indicate excess bullishness. The VIX is updated intra-day by the Chicago Board Options Exchange (CBOE), using Standard & Poor’s 500 Index (SPX) bid/ask quotes. It was created in 1993. **The CBOE NAS Volatility Index (VXN) employs the same formula used to calculate $VIX, which is based on the implied volatility of S&P 500 index options. This formula is derived from a basket of put and call options. Some are out of the money, some in the money, and some at the money. The resulting $VXN represents the implied volatility of a hypothetical 30-day option that is at the money. ***The VXO is the ticker created to track the "original VIX" that was calculated using the prices of S&P 100 options. The new VIX uses the ticker $VIX and is calculated using the prices of S&P 500 options. The fundamental nature of the VXO is the same as the VIX, but it is less robust and not as simple as the VIX. Bulls vs. Bears: Bulls: the Bulls are at 44.8% down 47.7%, they have risen from just 36.0% six weeks ago. For your reference: The Bulls bottomed in the summer of 2006, the last major round of selling ahead of this 2007 high, near 36%; 35% is considered Bullish. Bears: the Bears are at 26.4% up from 23.3%, but way off the 37.2% and the 37.1% in mid-April as the market rallied.
For your reference: Bearishness hit a 5 year high at 54.4% the last week of October
What to expect this week, and down the line… Healthcare is big in the news today, as it was big all week last week as there is strong effort by the congress and the administration to get the healthcare plan passed before the end of the summer. So, given the NAS's leadership and the growing strength in healthcare, technology, the exchanges, and China, the sectors cannot be ignored as the money that is flowing augurs for big gains long term. That means, pay attention to these improving and good investment areas going forward. Also, keep a eye on the economic calendar as there are several key reports on the health of the economy, including final readings for Q-1 GDP, the FOMC's Rate decision, Existing Home Sales and Durable Goods Orders. Notable companies reporting earnings this week include; today before the Bell results from Walgreen (NYSE: WAG), followed on Tuesday morning by supermarket operator Kroger (NYSE: KR) and software developer Oracle (NASDAQ: ORCL) after the Bell. On Wednesday before the Bell Monsanto (NYSE: MON) and Rite Aid (NYSE: RAD) will report, followed that afternoon by Bed Bath & Beyond (NYSE: BBBY), and Nike (NYSE: NKE). ConAgra (NYSE: CAG) reports Thursday morning with Palm (NASDAQ: PALM) rounding out the week Thursday afternoon. Again, pay attention as the market transitions and continues the up-trend. Stay tuned… Red PS: Savvy market observers are saying play the wrong side of a Barack Obama initiative (like healthcare reform) and you are likely to lose.PAE 15
______________________________________________________________________ John Mauldin is back with his Thoughts from the Frontline Weekly Newsletter Thoughts from the Frontline Weekly Newsletter
This Time its Different* by John Mauldin June 19, 2009
In this issue: This Time It's Different* Peter Bernstein, R.I.P. Welcome to the New Normal The Three Amigos Credit Spreads - Bullish or Bearish? ISM - Is Less Bad That Good? Contain Your Enthusiasm John Mauldin, Best-Selling author and recognized financial expert, is also editor of the free Thoughts From the Frontline that goes to over 1 million readers each week. For more information on John or his FREE weekly economic letter go to: http://www.frontlinethoughts.com/learnmore To subscribe to John Mauldin's E-Letter please click here: http://www.frontlinethoughts.com/subscribe.asp
In Canada: Molson Family Buys Canadiens, Regaining Control of NHL Team Quebec’s Molson family regained control of the National Hockey League’s Montreal Canadiens, purchasing the 24 time Stanley Cup champions and the Bell Centre from owner George Gillett. The Canadiens didn’t disclose terms of the agreement yesterday in a news release. ESPN said that the Molsons will pay more than US$550MM for the team and its arena in Montreal, citing unidentified people familiar with the situation. “This is a very exciting time for our family and we are grateful to the many people and organizations who came forward to offer their collaboration in the development of our proposal,” Geoff Molson said yesterday in a statement. The deal still requires approval from the NHL’s Board of Governors, which will probably vote in August. It would put the Molson family back in control of the team it owned from 1957-71. Publicly traded brewer Molson Inc. owned the club from 1978 until 2001, when Gillett bought a majority interest. The brewer, now Molson Coors Brewing Co., had since been a minority owner, controlling about 20 percent of the Canadiens to Gillett’s 80%. “I am fully confident that the Molson brothers, who have been a great part of the heritage of the club, will ensure the preservation and development of this great sports institution,” Gillett said in a statement.
NHL Commissioner Gary Bettman told the Canadian Broadcasting Corp. in Las Vegas that the sale is a positive one for the Canadiens, whose 24 Stanley Cup titles are equal to the combined total of the Toronto Maple Leafs and Detroit Red Wings, who rank second and third all-time in championships. “They’ve been able to find people who are obviously passionate about the game and structure a transaction that makes sense for everybody,” Bettman told CBC. “That’s a real plus for the franchise and the fans in Montreal.” Geoff Molson, a 38-year-old director of the Canadiens and Molson Coors, heads the investor group that submitted a bid for the team, the Gillett Entertainment Group and Montreal’s Bell Centre on June 10. He hasn’t participated in the team’s board activities during the sale process. Canadian media reports said other bidders included Quebecor Media Inc., Canadian businessman Stephen Bronfman and sporting goods executive Graeme Roustan. “I’m very happy that a Quebec group won the bidding,” Quebec Finance Minister Raymond Bachand said in a telephone interview with Canada’s RDI television network. “The Molsons have deep roots in Quebec and they have been associated with the Canadiens for a long time. It’s a great transaction.” The Canadiens had a 41-30-11 record this season and were swept by the Boston Bruins in the first round of the playoffs.
______________________________________________________________________ Chartists plot your points NAS: Close 1827.47
Resistance: 1880 the June 2009 high 1897 the October 2008 post gap intra-day high. 1947 the October 2008 gap open down 1984 from late September 2008 2099 the mid-September 2008 low 2169 the March 2008 double bottom low Support: 1786 the November 2008 intra-day high 1780 the November 2008 closing high 1773 is the May 2009 high 1770 the mid-October 2008 interim high
1734 50 day EMA 1673 the past April 2009 high 1666 the intra-day January 2009 high 1664 the May 2008 low 1661 is the April 2009 past high 1659 the 200 day SMA 1653 the January closing high 1623 is the early April 2009 high 1620 the early 2001 low 1603 the December 2008 high 1598 the February 2009 high 1587 the March 2009 high 1569 the late January 2009 high 1542 the early October 2008 low 1536 the late November 2008 high 1521 the late 2002 high bounce off the Bear Market low 1505 the late October 2008 closing low. 1493 the October 2008 low and late December 2008 consolidation low
S&P 500: Close 921.23 Resistance: 919 is the early December 2008 high 925 the 10 day EMA 930 the May 2009 high 935 the January 2009 closing high
1000 1050 Support: 902 the 200 day SMA 899 the early October 2008 closing low 897 the 50 day EMA 896 the late November 2008 high 888 the April 2009 intra-day high. 882 the early May 2009 low 878 the late January 2009 high 876 the past April 2009 high 866 the second October 2008 low 857 the December 2008 consolidation low 853 the July 2002 low 848 the October 2008 closing low 846 the April 2009 high 842 the early April 2009 high 839 the early October 2008 low 833 the March 2009 high 818 the early November 2008 low 815 the early December 2008 low 805 the low on the January 2009 sell-off. Key Level 800 the March 2003 post bottom low DJIA: Close 8539.73 Resistance:
8588 the May 2009 high 8602 the 10 day EMA 8626 from December 2002 8829 the late November 2008 high 8934 the December 2008 closing high 8985 the closing low in the mid-2003 consolidation 9088 the January 2009 high 9387 the mid-October 2008 high 9625 the October 2008 closing high Support: 8521 an interim high in March 2003 after the March 2003 low 8451 the early October 2008 closing low 8419 the late December 2008 consolidation closing low 8383 the 50 day EMA 8375 the late January 2009 interim high 8315 the February 2009 high 8307 the April 2009 intra-day high 8221 the May 2008 low 8197 the 2nd October 2008 low 8191 the past April high 8175 the October 2008 closing low. Key Level. 8141 the early December 2008 low 8113 the early April intra-day high 8076 the early April high 7965 the mid-November 2008 interim intra-day low.
7932 the March 2009 high 7909 the early January low 7882 the early October 2008 intra-day low. Key Level 7867 the early February 2009 low 7702 the July 2002 low 7694 the February 2009 intra-day low 7552 the November closing low. Key Level.
(Resistance/Support/Key Levels** on the NAS, S&P 500 & the DJIA) ** Support,
Resistance and Key Levels Support and Resistance
Support and Resistance represent key places where the forces of Supply and Demand meet. In the financial markets, prices are driven by excessive Supply (down) and Demand (up). Supply is synonymous with Bearish, Bears and Selling. Demand is synonymous with Bullish, Bulls and Buying. As demand increases, prices advance and as supply increases, prices decline. When Supply and Demand are equal, prices move sideways as Bulls and Bears tug it out for control. Key Levels Identification of Key Support and Resistance levels is an essential ingredient to successful technical analysis. Even though it is sometimes difficult to establish exact Support and Resistance levels, being aware of their existence and location can greatly enhance analysis and forecasting abilities. If a stock is approaching an important Support level, it can serve as an alert to be extra vigilant in looking for signs of increased buying pressure and a potential reversal. If a security is approaching a Resistance level, it can act as an alert to look for signs of increased selling pressure and potential reversal. If a Support or Resistance level is broken, it signals that the relationship between Supply and Demand has changed.
Red Roadmaster Market Insights on Crude Oil, Gold and Silver, and Currencies Forex Technical Up-date Crude Oil prices moving higher in 2009 Nymex Crude Oil (CL) Crude oil engaged in choppy sideway trading last week but closed below 70 level. While 66.79 support remains intact, daily MACD is now staying well below signal line and Crude Oil has also decisively broken near term trend line support. The development suggests that a short term top should be formed at 73.23 and favoring the downside in the near term, targeting 38.2% retracement of 45.44 to 73.23 at 62.61. On the upside, a close above 72.55 minor resistance augurs that the recent rally is still in progress and should target 38.2% retracement of 147.27 to 33.2 at 76.77 before topping. In big picture, while a short term top might be formed at 73.23, there is no indication that rise from 33.20 has completed yet. Such rise is still in favor to extend to 38.2% retracement of 147.27 to 33.2 at 76.77, and possibly further to next key level of 90, (50% retracement of 147.27 to 33.2 at 90.23) But strong resistance should be seen there and at least from some deep pull back. Though, a break of the 54.66 key medium term resistance turned support will indicate that rise from 33.2 low has completed and will turn outlook bearish for a retest of this low eventually. The long term picture, note that the fall from 147.27 is treated as a correction, or part of the correction/consolidation to the five wave sequence from 98 low of 10.65. Downside target of 17.12/37.0 support zone is already met and the correction might have completed already. Sustained trading above mentioned 55 weeks and 55 months EMA will add some credence to this case and should target next key level of 90, (50% retracement of 147.27 to 33.2 at 90.23). This will remain the preferred case as long as Crude Oil continues to stay above 54.66 support.
Global Gold and Silver trading higher in 2009
Comex Gold (GC) Gold fell to 926.5 last week before turning sideway. Initial bias is Neutral this week and some consolidation might be seen. But after all, further decline is still in favor as long as 962.4 resistance holds. Below 926.5 will target 61.8% retracement of 865.5 to 992.1 at 913.9 next. On the upside, above 962.4 will suggests that decline from 992.1 has completed and will turn short term outlook bullish for 1007.7/1033.9 resistance zone again. The big picture, recent development suggest that the move from 865 has possibly completed at 992.1 already, ahead of 1007.7/1033.9 key resistance zone. Also it suggests that consolidation from 1007.7 is still in progress and break of 913.9 fibo support will bring the third leg down to test 865 support before completing the whole consolidation. Nevertheless, downside is expected to be contained by 801.5 cluster support (61.8% retracement of 681 to 1007.7 at 805.7) and bring resumption of rise from 681. On the upside, a close above 992.1 will revive the case that rise from 865 is resumption of up trend rather than part of sideway consolidation. In such case, retest of 1007.7/1033.9 resistance should be seen next.
The long term picture, medium term consolidation from 1033.9 should have completed as an expanding triangle to 681 already. Rise from there is tentatively treated as resumption of the long term up trend from 253 and will target 61.8% projection of 253 to 1033.9 from 681 at 1160 after taking out 1033.9 high. A break below the above mentioned 801.5 cluster support augurs that consolidation from 1033.9 is still in progress and will delay the long term bullish case.
Comex Silver (SI) Silver fell to as low as 13.93 last week before turning sideway. Some consolidation could be seen initially this week. With 14.425 minor resistance intact, another fall cannot be ruled out but downside potential should be limited as 13.63 is expected to hold in next fall. On the upside, a close above 14.24 will flip intraday bias back to the upside and argue that whole correction from 16.25 has completed at 13.93 already. Break of the 15.54 resistance will confirm this case and bring retest of 16.25 high next. The big picture, as long as 13.63 support holds, it continues to suggest the bullish view that move from 8.4 is still in progress and should extend further towards 100% projection of 8.4 to 14.63 from 11.725 at 17.94. Break of 17.96 projection target will build up the case that such rise from 8.4 is impulsive in nature and should bring retest of 21.44 high. Considering bearish divergence condition in daily MACD, below 13.63 will be the first signal that Silver has topped out. Further break of 11.725 will confirm that whole rise from 8.4 has completed. More importantly, the corrective three wave structure will indicate that some more medium term fall should be seen, with risk of retesting 8.4 low, before completing the wide range correction from 21.44. . The longer term picture, Silver's fall from 21.44 is treated as correction, or part of consolidation to the long term five wave rally from 4.01 and should have completed at 8.4 after being supported slightly above 76.4% retracement of 4.01 to 21.44 at 8.123. Focus now turns to 100% projection of 8.4 to 14.635 from 11.725 at 17.96 and decisive break there will build up the case that move from 8.4 was impulsive in nature, and thus favors the case that long term up trend is resuming. On resumption, the long term up trend should target 100% projection of 4.01 to 21.44 from 8.4 at 25.83 next.
FOREX Currency Trading
EURUSD: Recovering On Hammer Formation Although recovery higher off a hammer formation the past week remains suggestive of a follow through higher, EUR still remains vulnerable while trading below the 1.4000 level and its medium term high at 1.4339. This view also enjoys the support of its potential head and shoulders pattern as well as its nearer term falling channel on the daily timeframe. Supports are situated at the 1.3805 level, representing its Jun 08'09 low which also falls within the vicinity of the 1.3793 level. These levels are envisaged to reverse roles and provide strong supports thereby turning the pair higher again just like the past week. If tested. However, if a cut through there occurs, the 1.3738 level, its Mar 19'09 high will be targeted where a break will highlight lower prices towards the 1.3480 level, its weekly 200 EMA. Conversely, though our overall medium term outlook remains to the upside on the pair, we have to see a decisive break and hold above the 1.4339 level to reverse the present downside threats and bring gains higher towards the 1.4719 level, its Dec 18'08 high and then the 1.4867 level, its Sept 22'08 high. On the whole, though biased to the upside in the medium term, EUR continues to be challenged by nearer term corrective weakness. Directional Bias: Nearer Term -Mixed Short Term - Bullish Medium Term -Bullish
Performance in %: Past Week: -0.57% Past Month: +6.89% Past Quarter: -3.33% Year To Date: -0.25% Weekly Range: High -1.4012 Low -1.3748 Disclaimer: This report is prepared solely for information and data purposes. Opinions, estimates and projections contained herein are the author's own as of the date hereof and are subject to change without notice. The information and opinions contained herein have been compiled or arrived at from sources believed to be reliable but no representation or warranty, express or implied, is made as to their accuracy or completeness and neither the information nor the forecast shall be taken as a representation for which the author incur any responsibility. The does not accept any liability whatsoever for any loss arising from any use of this report or its contents. This report is not construed as an offer to sell or solicitation of any offer to buy any of the currencies referred to in this report.
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Little Gems GetFugu Inc. (GFGU) beginning with its Beta launch this Labor Day, GFGU will debut an intuitive alternative with a search engine platform that will instantly be accessible to 97% of the over 3.3 billion mobile handsets around the world today. Rather than type a website address or search term into a browser, consumers have four ways to mobile search through tools that use voice (Voice Reality Link or VRL), vision (Augmented Reality Link or ARL), location (Geo Reality Link or GRL) and Hotspotting, no matter what type of phone they own. GetFugu is able to directly connect with any searches they are trying to reach, instead of using Google and going through 50,000 results. A consumer can say “Gap” and instantly be connected with the Gap website. Coke has 13 billion-plus cans out in the world at any given time. With GetFugu, they now have 13 billion digital billboards that consumers can interact with via their mobile devices. GetFugu also supports hotspotting on a mobile application. Consumers can watch a video and hotspot by simply touching the screen, a consumer can search for whatever the person in the video is wearing and link directly to a website where he or she can buy those shoes from the latest video. The market potential for GetFugu is global and includes both national and local advertisers in each area. GetFugu is in licensing discussion with over 50 global companies from the US, Europe, Japan, Korea and Taiwan to use the ARL Portfolio technologies. www.GetFugu.com Trading at .22 + .01 on the week Technicals overall Neutral Latest News: Getfugu Partners With Interpublic's Emerging Media Lab to Introduce Mobile Search Technology to the World's Top Brands http://finance.yahoo.com/news/Getfugu-Partners-With-iw-4253023276.html?x=0&.v=1
Neah Power Systems, Inc. (NPWS): NEAH has developed and successfully tested a patented, silicon-based, micro fuel cell which the Company claims will eventually replace batteries. It has a several MM-dollar contract with the U.S. Navy Office of Naval Research, and expects to offer its product to the entire range of the US and global military. The self-contained fuel cell also has a large market in police, and fire departments, and other first responders, including ambulance, paramedic and emergency room personnel, as well as power solutions for notebook PCs PDAs, mobile phones, camcorders, digital cameras and other portable electronic devices. NEAH’s fuel cell fits within a notebook PC’s internal battery cavity instead of outside the computer, and uses methanol, a renewable resource, which delivers continuous untethered power. NEAH recently received a cash infusion from Agile Opportunity Fund, and also acquired SolCool One, LLC, and a leader in the solar air conditioning industry. http://www.neahpower.com The iHubbers are also talking about Neah. Trading at $0.008/shr +.0015/shr Technicals overall Neutral. Latest News: NEAH Power Systems Names Jesup & Lamont Executive Managing Director Ed Cabrera to Board of Directors http://finance.yahoo.com/news/NEAH-Power-Systems-Names-pz-798323819.html?x=0&.v=2
NexHorizon Communications, Inc. (NXHZ) The Company focuses on rolling up many of the hundreds of privately-owned, small cable television networks, cash flow positive of at least 25% EBITDA in rural areas over the next 12-24 months-- systems with subscriber bases in the range of 2,500 to 35,000 throughout the United States and upgrading them to “Triple-Play,” including voice, data and Internet access. The majors have ignored this large segment because it’s not cost-effective for them. NexHorizon operates cable television systems in California, twelve Colorado communities, and has a pending acquisition in the rural communities of Tulsa, Oklahoma. NexHorizon acquired Chula Vista Cable and National City Cable, in California, in January 2008, serving more then 3400 subscribers, with over 30,000 new high-end homes and new areas slated to have over 60,000 newly built homes within the next 5 – 7 years. Recently, NexHorizon brought William ‘Mickey’ Stevenson, former Motown executive, to its Board of Directors. Stevenson is one of the original Motown music producers, an important factor in the career development of Diana Ross and the Supremes, Smokey Robinson, and many others. He will bring his many contacts and friends in the entertainment business to NexHorizon to provide exciting content, with which it intends to grow its subscriber base. http://www.nexhorizon.us/ Currently trading at .07/shr. -.01 on the week. The Sentiment is overall Neutral to Bullish Latest News: NexHorizon to Enlarge California Footprint by Building 1200 Miles of Network Infrastructure http://finance.yahoo.com/news/NexHorizon-to-Enlarge-pz-3282457504.html?x=0&.v=3
CEL-SCI Corp. (CVM): The Company engages in the research and development of drugs and vaccines used in the treatment of cancer. The company’s lead product includes Multikine, which is under development for the treatment of cancer and is cleared for a Phase III clinical trial in advanced primary head and neck cancer patients. Multikine is a patented immunotherapeutic agent consisting of a mixture of naturally occurring cytokines, including interleukins, interferons, chemokines, and colony-stimulating factors. The company also develops CEL-1000, which is derived from a pre-clinical technology called 25
‘Ligand Epitope Antigen Presentation System’ for protection for animals against avian flu, herpes, malaria, viral encephalitis, smallpox, vaccinia, and cancer, as well as CEL-2000, for the treatment of rheumatoid arthritis. http://www.cel-sci.com Currently trading at .50/shr -.12/shr on the week. Support/Resistance . .49/62 The overall sentiment is Bullish. Latest News: 7 More Stock Briefs including CVM http://seekingalpha.com/article/143856-7-more-stock-briefs?source=yahoo
MAC Services Group (MSL:ASX) (www.themac.com.au). Recently continues to be rated the “Only Market Buy” on the Australian Securities Exchange (ASX), by now by two analysts down under, on the back of its ability to “sweat through the downturn” with hard assets and good earnings, cash flow, lots of cash and very little debt. Trading at 1.145 Au$ - .025 on the week. Technical s overall Bullish. Latest News: The MAC Services Group rated a “Little Gem” in the Australian Financial Review Portfolio. http://www.themac.com.au/doc/09-03-2009%20Little%20Gems.pdf Rachel Maloney Corporate Relations Manager Ph: (02)8346 9200 email@example.com
Pacific Asia Petroleum, Inc. (PFAP): This is a US listed and headquartered corporation engaged in the business of Crude Oil and Natural Gas development, production and distribution in Pacific Rim countries, with an initial focus on developing a broad range of energy opportunities in China. The Company focus’ on identifying and managing low-risk, high-return projects, and real opportunities in China and is a strategic partner with several global energy companies. http://www.papetroleum.com Currently trading at 2.18/shr - .08/shr on the week. Support/Resistance 2.07/2.25 Technicals are overall Very Bullish.
Latest News: Pacific Pacific Asia Petroleum, Inc. Signs a Series of Agreements On Enhanced Oil Recovery and Production http://finance.yahoo.com/news/Pacific-Asia-Petroleum-Inc-pz-718025269.html?x=0&.v=1
Power Sports Factory Inc. (PSPF) (www.powersportsfactory.com) is in the Headlights, with Mario Andretti at the wheel, PSPF closed at .08/shr, 00 on the week. Support/Resistance .07/.08 Technicals overall Neutral Latest News: CityRyde's Collaboration with Publicly Traded Company Will Revolutionize the Bike Sharing Industry http://finance.yahoo.com/news/CityRydes-Collaboration-with-prnews-15384641.html?.v=1
The Watch List “On the Watch List” contains potential investment opportunities for suitable small, mini and micro cap portfolios. Hythiam, Inc. (HYTM) may have the answer to addiction of drugs and alcohol through its patented Prometa® therapy, a protocol that is designed to reset dysfunctional receptors in the brain to a presubstance abuse state while integrating medical, behavioral, and nutritional components. Hythiam has 21 patents issued or allowed and 95 applications pending. Q-1 Y 2008 revenues grew to US$11.3 million, with 60% increase in contributions from anti-addiction services. Hythiam provides comprehensive behavioral health management services to health plans, employers, and criminal justice and government agencies. In May 2008, Hythiam announced reimbursement agreement with CIGNA HealthCare for Prometa based treatment program. Its CATASYS™ Integrated Substance Dependence Solution is the only program of its kind dedicated exclusively to chemical dependence. The company also researches, develops, licenses and commercializes innovative and proprietary physiological, nutritional, and behavioral treatment programs. This market represents 180 million lives, and over 22 million Americans suffer from dependence on illicit drugs or alcohol, with only 18% seeking treatment. Direct medical costs in the US are over US$42 billion. Cocaine/stimulant addiction therapy is a multi-billion dollar market opportunity that was previously without effective treatment. www.hythiam.com Trading at Technicals are overall GreenStEnergy, Inc. (GSTY.OB) is developing renewable energy projects located in the “wind tunnel” of Tehachapi, California, utilizing an option agreement to acquire 4,840 acres of undeveloped land together with strategic partnerships with GE Wind, Vestas International, Suzlon, Mitsubishi, the national renewable energy labs, the American Wind Energy Association, and American public power association. Significant provisions benefit renewable energy in the economic recovery legislation passed by Congress and signed into law by President Obama, including an income tax credit of 2.1 cents/kilowatt-hour, plus a federal investment tax credit to help consumers purchase small wind turbines for home, farm, or business use. Owners of small wind systems with 100 kilowatts (kW) of capacity or less can receive a credit for 30% of the total installed cost of the system. Generating 20% of U.S. electricity from wind is the climate equivalent of removing 140 million vehicles from the roads. GreenStEnergy is well-positioned to generate considerable revenue by supplying thousands of home and businesses in Southern California with clean, renewable energy, and by selling its excess production to the national grid. www.greenstenergy.com, Trading at Technicals are overall
COMPLIANCE SYSTEMS CORP (COPI): This is the Company that invented “Do-Not-Call,” and provides other compliance technologies, methodologies, and services to the teleservices industry. Its TeleBlock Call Blocking System mandates telemarketers to automatically screen and block outbound calls against federal, state, third-party, and in-house do-not-call lists, which violations can cost callers up to $15,000 per call. In nine years and over a B calls, not one violation has occurred. The company recently concluded a Canadian contract for similar services and intends to expand its reach by complementary acquisitions in the US and abroad. COPI also publishes online guides, including Regulatory Guide, the only on-line, up-to-date compilation of federal and state Do-Not-Call regulations. iHub is buzzing about COPI. http://www.callcompliance.com Trading at $0.009/shr. +.002 Resistance at .01.shrs, support Nil Technicals are overall Neutral.
Thunder Mountain Gold (THMG) The Company is a developer of high quality precious and base metal projects in North America through acquisition and exploration. A 73-yr old company, Thunder Mountain Gold performs its own natural resource exploration and generates value for shareholders by aggressively developing high-grade, high-quality precious and base metal resources in politically stable mining regions. www.thundermountaingold.com Trading at .18/shr, -.02 on the week. Support/Resistance at .12/.18/shr Technicals are overall Neutral Latest News: Form 10-Q for THUNDER MOUNTAIN GOLD INC http://biz.yahoo.com/e/090515/thmg.ob10-q.html Thunder Mountain Gold Announces Assay Results On Sulfide Intercept At South Mountain http://www.thundermountaingold.com/news/pr_smid_11-12-08.php SEC Form 10-K for THUNDER MOUNTAIN GOLD INC. http://biz.yahoo.com/e/090415/thmg.ob10-k.html Due Diligence is continuing on three new companies that are candidates for The Watch List and they will be posted when completed.
Red’s Edge and Rules to Play by… There's never going to be a perfect time to trade. There is never a good time, never a bad time, just the time. But retroactively - it will always have been one or the other. By learning how to trade for yourself in any market you prepare yourself for any situation. That is the key to stock market success. Get started today on total control trading. Over my 30+ yrs playing the stock market in earnest I have learned that there are winning stocks that most traders and investors completely ignore and abhor. And when played right, these overly unappreciated issues often lead to huge gains, but it is all about timing. There is no mystery here, you all know and/or have heard about “penny stocks” i.e. those that trade under US$5.00/shr on US markets (10’s of thousands of stocks trade on other world markets under US$5.00/shr and are not referred to in the same pejorative manner). This is a US Label (designed to diminish there value and keep you away, IMO). The fact is that there are many, many studies made over the years that prove that these stocks outperform the overall market, and when there is a steady new Bull Market, the little stocks (small caps, micro and mini caps) lead the Charge. As a class, they are the most undiscovered and underappreciated sector of stocks and the sector where the biggest chance big winners on a consistent basis. I call them Little Gems; they are indeed Wall Street's buried treasure for those who wish to go treasure hunting. Here, in the RedRoadmaster, I work to uncover solid, money-making companies whose shares are grossly undervalued and virtually undiscovered, and they sell for US $5 or less a share. And do not forget to always include some small, mini and micro cap (pennies and juniors) issues in your sights; they can give you explosive percentage returns like no others.
Savvy traders do not wait for the stock market to hit bottom, recover or get toppy; they do not double down or resort to tricky, desperation moves. They make simple moves on good data and bank some gains. Do not think get rich, think get rich slowing, it works. Even if you know absolutely nothing about how to start making a living in the stock market, and want to learn how to do it, the first step is to learn from someone who knows how to do it successfully. The stock market is about success, and the lifestyle that comes with it, but it must be done carefully, both by picking the issues and in the trading of them, because one wants to make money doing it independently and without stress. You can’t reverse your “bad plays”, Breathe through your nose, count to 10 and focus on moving forward. You only move forward, and you only focus on what's ahead to win in the stock market game. You do not live in the scrapbook, and always take what the market gives. A journey of a thousand miles begins with the first step (Confucius); Download and read and study “Knowledge is Power,” the Stock Preacher’s e Book, its Free. Always remember that it is wise to look at the risk first and decide how to manage it before ever entering a position. Yes, losses will be incurred; it is part of this and any business and not a bad thing if they are controlled. Again, think “the "get rich steady" and not "get rich quick". The Bull is charging again, and perhaps this is the best investing scenario since the early 80's. It is happening now and savvy traders and investors are positioned and in the action. Have a great week, and stay tuned. All the best this summer,
PS: Some of you know that I am the founder of Archer Entertainment Media Communications, Inc., www.archeremc.com and that last summer Archer launched a powerful new search engine http://www.archer.12buzz.com/#. Since its launch, it has exceeded all expectations and it usage is growing daily. Try it; I believe you will like it. PAE, Jr. Disclaimer: The foregoing is commentary for informational purposes only. It is designed to help the reader learn the fine art of technical analysis. Links are provided to articles and stories referenced in this Report. Some statements and expressions are the points of view and/or opinions of Red Roadmaster™, aka Paul A. Ebeling, Jr. and the contributors. This information is not meant to be a solicitation or recommendation to buy, sell, or hold securities. I am not licensed or registered in the securities industry. The information presented herein has been obtained from readily available sources believed to be reliable, but its accuracy is not guaranteed. Estimates, assumptions and other forward-looking information are subject to the limits of forecasting. Actual future developments may differ materially due to many factors. I do not receive compensation in any manner from any of the companies that are discussed in this Report. Please feel free to print and/or send The Red Roadmaster’s Technical Report on the US Major Market Indices ™ to your friends and associates, no permission is necessary. ©2002/2009 Paul A. Ebeling, Jr.
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Published on Jun 22, 2009