Today’s Winners and Losers

TheDailyGold - Wed, 2012-03-21 20:28
 GDX fell by -0.20% while GDXJ fell  by  -1.01% and SIL fell by 0.88%

Here are today’s best performing Silver and Gold stocks:


Ben Bernanke tells EU to clean up banks

Ambrose Evans-Pritchard - Wed, 2012-03-21 19:19
Fed Reserve chairman exhorts Europe's leaders to beef up its banks.

Dahlman Rose & Co Report on Meadow Bay Gold

TheDailyGold - Wed, 2012-03-21 16:43

The company has a $4.67 price target on the shares.

Download the report here


International Market Snapshot

bespokeinvest.com - Wed, 2012-03-21 16:39

It’s been awhile since we’ve published a snapshot of stock markets around the world, so on the following pages we highlight our trading range charts for the major equity indices of 20 of the largest countries by market cap.

Below is a table of the 20 featured markets, sorted from best to worst based on performance since the start of 2011.   For each country, we also provide ETF tickers for investors that may be interested.

Of the 20 countries shown, the US has been...

Continue reading...  (Must be a Bespoke Premium member to view.)

Analysts Turning Slightly Less Negative

bespokeinvest.com - Wed, 2012-03-21 14:36

Back in mid-February we noted that there had not been a single trading day so far this year where there were more analyst upgrades than downgrades.  Shortly after, we finally did see a day where upgrades exceeded downgrades (2/23).  Even since then, however, most days have still continued to see more downgrades than upgrades.

The chart below shows the net daily number of analyst upgrades so far this year.  Through today, upgrades have exceeded downgrades on only nine out of the 55 trading days in 2012.  It is strange enough that analysts started off the year on such a down note.  Normally, a new year brings analyst optimism where outlooks on the year ahead are bullish.  This year, that wasn't the case.  What makes this pessimism even more peculiar is the fact that it came in a year where equities are off to one of their best starts ever. 

LinkedIn (LNKD) Closes in on $100

bespokeinvest.com - Wed, 2012-03-21 13:04

Shares of LinkedIn (LNKD) are closing in on the triple digit level for the first time since late July following an upgrade of the stock by Goldman Sachs (GS).  While the stock still has not surpassed $100 today, it has cleared some pretty strong resistance in the low 90 range.  As the jobs picture in the United States continues to improve, LNKD is increasingly being viewed as a play on employment as employers migrate from traditional recruiting resources to LNKD.

Another MF Global, Only Smaller: WorldSpreads has 13 Million-Pound Shortfall in Client Money

Following an "unusual pattern of client trading" WorldSpreads Announces 13 Million-Pound Shortfall in Client Money
WorldSpreads Group Plc (WSPR), a U.K. brokerage and spread betting company, said it has a shortfall of 13 million pounds ($21 million) of client money as it appointed KPMG LLP as an administrator to manage the business.

WorldSpreads owes clients 29.7 million pounds and has about 16.6 million in cash, the London-based company said in a statement. The firm’s stock was suspended on March 16 after it discovered a hole in its accounts.

“Due to the accounting irregularities that have been discovered, it is likely that there will be a shortfall to clients,” KPMG said in a separate statement. “One of the immediate priorities of the special administrators will be to investigate and attempt to reconcile all client positions in order to establish the extent of the shortfall.”

WorldSpreads’s founder, chief executive officer and largest individual shareholder, Conor Foley, resigned March 14. Roger Hynes, a former managing director at CMC Markets Plc, replaced him as interim CEO. Niall O’Kelly resigned as chief financial officer in February as WorldSpreads said it would post a full- year loss after an “unusual pattern of client trading.”

Clients’ accounts were frozen on the afternoon of March 16, preventing them from withdrawing money or adding to their funds, according to Sorrelle Cooper, a spokeswoman for KPMG in London. Any open positions were also closed, she said.

WorldSpreads clients facing losses may have access to the Financial Services Compensation Scheme, which covers as much as 50,000 pounds per claimaint, the Financial Services Authority said in a separate statement.

The firm has about 15,000 client accounts and 66 employees, who will be initially retained “to support the orderly wind down of the business,” KPMG said. Redundancies are nonetheless probable, it said. This begs the question: Do you know where your money is?

Mike "Mish" Shedlock
http://globaleconomicanalysis.blogspot.com
Click Here To Scroll Thru My Recent Post ListMike "Mish" Shedlock is a registered investment advisor representative for SitkaPacific Capital Management. Sitka Pacific is an asset management firm whose goal is strong performance and low volatility, regardless of market direction. Visit http://www.sitkapacific.com/account_management.html to learn more about wealth management and capital preservation strategies of Sitka Pacific.


Spain Faces "Increasing Risk of Debt Restructuring" Says Citigroup Chief Economist

Spanish Sovereign debt yields jumped again today following Restructuring Concerns expressed by Willem Buiter.
Spanish bonds fell, pushing 10-year yields to the highest level in a month, after Citigroup Inc. chief economist Willem Buiter said the nation faced an increasing risk of a debt restructuring.

Ten-year Spanish securities slid for an eighth day, widening the extra yield over similar-maturity German bunds, as a decline in European stocks sapped demand for higher-yielding assets.

“Spanish spreads moved much wider after Buiter’s comments,” said Lyn Graham-Taylor, a fixed-income strategist at Rabobank International in London. “This highlights concern over further debt restructuring. Bunds recovered on the resulting safe-haven demand.”

The Spanish 10-year yield jumped 14 basis points, or 0.14 percentage point, to 5.37 percent at 2:55 p.m. London time after rising to 5.38 percent, the highest since Feb. 16.

Dutch Bonds

The extra yield investors demand to hold Dutch bonds instead of German bunds widened after an independent agency said the Netherland’s budget deficit may increase.

The Netherlands Bureau for Economic Policy Analysis said the shortfall would exceed the European Union’s target of 3 percent. The agency said the 2013 deficit would be 4.6 percent, revised from 4.5 percent. Spanish 10-Year Bond Yield



Willem Buiter is a bit too politically correct. I suggest the odds of a Spanish Debt restructuring is greater than 90%.

Mike "Mish" Shedlock
http://globaleconomicanalysis.blogspot.com
Click Here To Scroll Thru My Recent Post ListMike "Mish" Shedlock is a registered investment advisor representative for SitkaPacific Capital Management. Sitka Pacific is an asset management firm whose goal is strong performance and low volatility, regardless of market direction. Visit http://www.sitkapacific.com/account_management.html to learn more about wealth management and capital preservation strategies of Sitka Pacific.


Teflon Stocks

bespokeinvest.com - Wed, 2012-03-21 10:00

We consider a stock to be overbought when its current price is more than one standard deviation above its 50-day moving average.  When a stock trades to overbought levels, it indicates that it is trading above its "normal" trading range and could be due for a pullback.  There are times, however, when a stock can trade to overbought levels and stay there for an extended period of time.  With that in mind, if you are holding a stock that trades to overbought levels, rather than sell it immediately, it is generally a good idea to put some sort of trailing stop in place.

Currently, there are several stocks in the S&P 500 that have traded at overbought levels for eight weeks in a row or more.  Seemingly nothing has been able to stop these 'teflon' stocks.  The list below highlights the seventeen names that have closed more than one standard deviation above their 50-day moving averages for at least the last 40 trading days.  It is no surprise that names like Apple (AAPL), Nike (NKE), Chipotle (CMG), and priceline.com (PCLN) are on this list, as they garner most of the headlines.  Other names, however, are a bit more of a surprise.

Currently, Yum! Brands (YUM) has been overbought for 77 consecutive trading days, which is a period that stretches back to last November.  After YUM, three stocks are tied for second at 62 trading days -- LMT, SHW, and TJX.  AAPL is actually fifth on the list and tied with DaVita (DVA) at 56 trading days.  Perhaps one takeaway from this list is the fact that although so much ink, pixels, and time is spent covering the day to day moves of AAPL, there are a lot of other stocks out there, and some of them have seen even stronger gains than AAPL this year. 

Mitt Romney Proposes $8 Trillion Welfare Program for Defense Contractors; Prepare for Two Wars if Romney Wins

I sit back in amazement and watch Republicans self-destruct with ridiculous proposal after ridiculous proposal.

Let's ponder two plans, neither of which is going anywhere, and one of them may very well cost Mitt Romney the election should he win the nomination.

Ryan Plan Revives Deficit Duel

The Wall Street Journal reports Ryan Plan Revives Deficit Duel
Rep. Paul Ryan's budget instantly became the centerpiece of an election-year debate over the size of government on Tuesday, thrusting back into the spotlight a topic—the deficit—that has been largely overlooked by the presidential candidates.

Mr. Ryan (R., Wis.), who heads the House Budget Committee, said his plan would put the U.S. on a sound economic path by spending $5.3 trillion less than Mr. Obama recommends over 10 years, resulting in a budget deficit that would be $3.3 trillion narrower.Let's pause right there for a second. The deficit is about $1.4 trillion. If the US lapses back into a recession at any time, (something I think is highly likely) it will worsen. Cutting $5.3 trillion over 10 years, is $530 billion a year, still leaving deficit spending at $900 billion a year, not counting the odds of a recession.

Let's continue with a few more snips ...
Congressional budgets by nature lack specifics—those are provided in spending bills that come later—and this one was no different. Still, Mr. Ryan made some things clear. Most dramatically, he proposed repealing Mr. Obama's health law.

The plan also would cut the top tax rates for corporations and individuals to 25% from 35%, creating just two brackets for individuals, 10% and 25%.

Mr. Ryan angered Democrats, and privately frustrated some Republicans, by proposing a $1.028 trillion cap on discretionary spending for next year, a figure that excludes formula-based programs such as Social Security and Medicare. The two parties, after weeks of negotiation, had agreed on a level of $1.047 trillion in a deal in August.

Mr. Ryan said he was taking into account another section of that deal, which requires across-the-board cuts of $97 billion beginning in January, $55 billion of that in defense. Party leaders are planning to negotiate a way to restructure those cuts, probably after the election. Mr. Ryan's plan instead directs six House committees to come up with cuts by May that total a similar amount.Ryan Reneges on Defense Cuts

Notice that Ryan cannot even stand for a measly $55 billion cut in defense spending instead wanting to cut entitlements. Yes, entitlements should be cut, but so should defense spending.

This proposal is doomed from the get-go. It is both pointless, and weak. All Ryan has proven is that he is a deficit-cutting wimp. If you are going to start another budget war, at least have the decency to propose a balanced one.

Ron Paul alone wants to balance the budget. 

Searching for Sings of Intelligent Thought

The only possible conclusions for Ryan's proposals are: He is brain-dead. He does not want a deal for political reasons.

Although it's frequently hard to see signs of intelligent life from either party in Congress, I will give Ryan the benefit of the doubt, suggesting that he purposely wants to antagonize Democrats for political reasons.

No Deal Coming

A USA Today Editorial states GOP budget hurts prospects for deficit deal.
If anything is obvious from the past several years of budget wrangling, it's that meaningful progress on the federal deficit will require a grand, bipartisan deal of the kind that President Obama and House Speaker John Boehner were negotiating last summer before their talks collapsed.

Democrats will have to give ground on the entitlement programs that are swallowing the federal budget. Republicans will have to compromise on tax revenue.

If that is too tall an order during a presidential election year, the two parties should at least avoid fanning flames that will make future deals harder to achieve.

What's most galling, however, is that the plan would violate the terms of the stopgap budget deal worked out last summer. It would breach the cap on defense spending and take money from other areas. It is hard to imagine a better way to undermine prospects for a broad long-term deficit deal than for one side to go back on its word.

As for Democrats, they need to get their heads out of the sand. The argument that they can simply "protect" Medicare against marauding Republicans does not square with reality. While prudent tax hikes can buy some time, and cuts in other spending might be in order, the biggest threats to the nation's solvency by far are health care and retirement entitlements.

The Democrats' response to Ryan's latest plan was both predictable and troubling. Even before the plan was out, they launched a Medi-scare campaign of letter-writing and robocalls targeting 41 vulnerable Republican incumbents.

But, in an era in which both parties try to pawn off partisanship as patriotism, why let the facts get in the way of a good attack ad? Perhaps after this year's election, when big spending cuts and tax hikes are slated to take effect, the two sides will seriously address the long-term fiscal problems the nation faces. After all, notwithstanding the fantasies of party leaders, a sweeping deficit reduction package enacted on a party-line basis is not going to happen.Mitt Romney Proposes $8 Trillion Welfare Program for Defense Contractors

As noted above, Ryan's proposal is seriously misguided at best. Unfortunately, Romney's plan is far worse.

Please consider A Lesson in Republican Math: Throwing Money at the Pentagon
If you’ve been fretting about faltering math education and falling test scores here in the United States, you should be worried based on this campaign season of Republican math. When it comes to the American military, the leading Republican presidential candidates evidently only learned to add and multiply, never subtract or divide.

Despite current Pentagon budgets that have hovered at the highest levels since World War II and 13 years of steady growth, the administration’s latest plans would only reduce spending at the Department of Defense by 1.6% in inflation-adjusted dollars over the next five years.

Still, compared to his main Republican opponents, Obama is a T. rex of budget slashers.

After all, despite their stated commitment to reducing the deficit (while cutting taxes on the rich yet more), the Republican contenders are intent on raising Pentagon spending dramatically. Mitt Romney has staked out the “high ground” in the latest round of Republican math with a proposal to set Pentagon spending at 4% of the Gross Domestic Product (GDP). That would, in fact add up to an astonishing $8.3 trillion dollars over the next decade, one-third more than current, already bloated Pentagon plans.

Nathan Hodge of the Wall Street Journal engaged in polite understatement when he described the Romney plan as “the most optimistic forecast U.S. defense manufacturers have heard in months.”

In fact, Romney’s proposal implies that the Pentagon is essentially an entitlement program that should receive a set share of our total economic resources regardless of what’s happening here at home or elsewhere on the planet. In Romney World, the Pentagon’s only role would be to engorge itself. If the GDP were to drop, it’s unlikely that, as president, he would reduce Pentagon spending accordingly.

Rick Santorum has spent far less time describing his military spending plans, but a remark at a Republican presidential debate in Arizona suggests that he is at least on the same page with Romney.

Mitt Romney at Sea

But let’s stick with the Republican frontrunner (or stumbler). What exactly would Romney spend all this money on?

For starters, he’s a humongous fan of building big ships, generally the most expensive items in the Pentagon budget. He has pledged to up Navy ship purchases from 9 to 15 per year, a rise of 50%.

Romney is also a major supporter of missile defense — and not just the current $9-$10 billion a year enterprise being funded by the Obama administration, primarily designed to blunt an attack by long-range North Korean missiles that don’t exist. Romney wants a “full, multi-layered” system.

That sounds suspiciously like the Ronald Reagan-style fantasy of an “impermeable shield” over the United States against massive nuclear attack that was abandoned in the late 1980s because of its staggering expense and essential impracticality.

If the development of Romney’s high-priced version of a missile shield were again on the American agenda, it would be a godsend for big weapons-makers like Boeing, Lockheed Martin, and Raytheon, but would add nothing to the defense of this country. In fact, it stands a reasonable chance of making things worse. Given the overkill represented by the thousands of nuclear warheads in the American arsenal, the prospect of a nuclear missile attack on the United States is essentially nil.

Ensuring a Cost-Overrun Presidency

If you were hoping that, with an eye to fighting yet more disastrous wars in the Greater Middle East like the $3 trillion fiasco in Iraq, the U.S. would raise ever larger armies, then Mitt’s your man. Prepare for Two Wars if Romney Wins

Should Mitt Romney win election this November, prepare for two wars.

  1. War with Iran
  2. Trade War with China

Both would be stupid and both will cost trillions of dollars.

Actually, the sane thing to do is prepare for two wars regardless of who wins. The odds may be lower under Obama, but that is the best one can say.

Republican Self-Destruction

The self-destruction of Republicans is very painful to watch because I am not a Democrat and do not like President Obama in the least.

Unfortunately, some Republican proposals are so out of whack with what needs to happen that independents are highly likely to make a lesser-of-two-evils choice of Obama over whoever the Republican nominee is.

Given the strong likelihood Republicans manage to hold the House, a divided Congress and a divided executive-legislative split might easily be the best we can hope for.

I am writing in Ron Paul. The chips will fall, how they fall.

Hopefully Republicans get their act together in 2016 because this was a pathetic performance.

 Mike "Mish" Shedlock
http://globaleconomicanalysis.blogspot.com
Click Here To Scroll Thru My Recent Post ListMike "Mish" Shedlock is a registered investment advisor representative for SitkaPacific Capital Management. Sitka Pacific is an asset management firm whose goal is strong performance and low volatility, regardless of market direction. Visit http://www.sitkapacific.com/account_management.html to learn more about wealth management and capital preservation strategies of Sitka Pacific.


Gold “Not Looking Great”, But Fundamentals “Still Solid” Despite Ongoing India Strike

TheDailyGold - Wed, 2012-03-21 01:15


BullionVault
Tuesday 20 March 2012, 09:00 EDT

Gold “Not Looking Great”, But Fundamentals “Still Solid” Despite Ongoing India Strike

U.S. DOLLAR gold bullion prices dropped to $1643 an ounce Tuesday lunchtime in London – 1.0% down on Friday’s close – as stock and commodity prices also fell and US Treasury bonds rose.

“[Gold] support is at $1625,” says the latest technical analysis from bullion bank Scotia Mocatta.

“A breach of this level opens up a full retracement to the $1522 December lows.”

Silver bullion fell to $32.07 per ounce – 1.6% down on the week so far.

On the currency markets, the Dollar rallied, gaining 0.4% against the Euro.

The strike by gold dealers in India entered its third day Tuesday. Gold dealers have shut their premises in protest at last week’s government decision to double gold import duties. India imported 969 tonnes of gold bullion in 2011, according to World Gold Council data.

“The import of gold of such magnitude strains balance of payments and affects the exchange rate of the Rupee through impacting the supply-demand balance of foreign exchange,” finance minister Pranab Mukherjee, who announced the duty hike, said earlier today.

“At the moment, it’s not looking great for gold,” reckons Nikos Kavalis, metals analyst at Royal Bank of Scotland.

“On the one hand you have the strengthening Dollar against the Euro hitting the market and you also don’t have that much support from the physical market…At the same time, we are still standing by our bullish call for the market. We think prices can, and will, go higher later in the year, so I would say at current prices, we would definitely be buyers.”

“Beyond the short term,” adds Anne-Laure Tremblay, London-based analyst at French bank BNP Paribas, “we remain positive on gold’s outlook as the fundamentals are still solid. These include high liquidity, low interest rates and sovereign debt concerns.”

Institutions that sold credit default swaps against a Greek sovereign default will have to pay out up to $2.5 billion, following an auction Monday to determine the recovery value of Greek bonds.

Earlier this month, the International Swaps and Derivatives Association, which adjudicates on whether CDS should pay out, agreed that a credit event has occurred in Greece.

In Italy meantime, prime minister Mario Monti was holding talks with unions Tuesday aimed at persuading them to go along with labor market reforms.

Elsewhere in Europe, the Netherlands “is confronted with the same problems as Italy and Spain”, according to Dutch government think tank CPB.

“Budget cuts are equally required in these countries in order to regain control of the government budget, whereas reforms must be implemented simultaneously in order to ensure economic growth.”

The Dutch government is expected to run a deficit this year equivalent to 4.6% of GDP and is trying to find around €9 billion in budget cuts. Last month it agreed to the Eurozone fiscal pact that deficits should be no bigger than 3% of GDP.

The Netherlands has been in recession since last July, Reuters reports, but is still rated AAA by all three major ratings agencies.

Here in the UK, inflation continued to fall last month. February’s consumer price index data published this morning show that annual inflation was 3.4%, down 3.6% in January and its lowest rate in two years.

The UK’s Office for Budget Responsibility meantime has raised its forecast for economic growth, the Financial Times reports. The OBR’s most recent forecasts were made last November.

The new more optimistic predictions are expected to be revealed in tomorrow’s Budget, and are “extremely close to those in the autumn statement” the FT writes, citing “government insiders”.

Saudi Arabia meantime has pledged to send oil tankers to the US in a bid to bring oil prices down to a “fair” level. US consumer price inflation saw its biggest monthly rise in nearly a year last month, with gasoline prices rising 6% in February.

Federal Reserve chairman Ben Bernanke is due to begin his so-called “PR offensive” later on Tuesday, when he delivers a lecture to undergraduates at George Washington University. Tuesday’s lecture is the first of four such appearances in which Bernanke will speak on the role of the central bank, ahead of the Fed’s centenary next year.

Steel production growth in China, the world’s second-biggest gold consumer, has “flattened”, according to Ian Ashby, president, iron ore at Australia-based miner BHP Billiton.

“[But] we still see positive growth out to the middle of the next decade.”

The daily volume of gold bullion transferred between parties by clearing members of the London Bullion Market Association fell 12.2% last month to 606.5 tonnes, according to LBMA figures published Tuesday. The fall follows a 1.0% monthly gain in January.

The daily volume of silver bullion transferred rose 7.2% to 4976 tonnes, following a 24.3% monthly drop in January.

Holdings of silver and gold bullion in the world’s two largest silver and gold ETFs– iShares Silver Trust (SLV) and the SPDR Gold Trust (GLD) – remained unchanged Monday. The SLV is unchanged since last Monday, while the GLD has not moved since last Tuesday.

ETFs meantime have been included on a list of “possible shadow banking entities” being examined by the European regulators.

The European Commission’s Financial Stability Board says it “has identified a possible mismatch between liquidity offered to ETF investors and less-liquid underlying assets”.

“The current regulatory debate,” continues the European Commission green paper on shadow banking, “focuses on possible liquidity disruptions; the quality of collateral provided in cases of securities lending and derivatives (swap) transactions between ETF providers and their counterparties; and, conflicts of interest where counterparties in these transactions belong to the same corporate group.”

Ben Traynor
BullionVault

Gold value calculator   |   Buy gold online at live prices

Editor of Gold News, the analysis and investment research site from world-leading gold ownership service BullionVault, Ben Traynor was formerly editor of the Fleet Street Letter, the UK’s longest-running investment letter. A Cambridge economics graduate, he is a professional writer and editor with a specialist interest in monetary economics.

(c) BullionVault 2011

Please Note: This article is to inform your thinking, not lead it. Only you can decide the best place for your money, and any decision you make will put your money at risk. Information or data included here may have already been overtaken by events – and must be verified elsewhere – should you choose to act on it.


Dark Clouds for Gold Seem to Have Been Dispersed

TheDailyGold - Wed, 2012-03-21 01:09


Based on the March 16th, 2012 Premium Update. Visit our archives for more gold & silver analysis.

According to a Bloomberg survey at a precious metals conference this week, gold is poised for a 21 percent gain in 2012, extending its bull market to 12 consecutive years. Bullion may rise to $1,897 an ounce in New York by Dec. 31 from $1,566.80 at the end of 2011.


They have plenty of reasons for optimism, despite the recent drops in price. Demand for gold has strengthened as Europe seeks to contain its debt crisis and China has displayed a growing appetite for gold. Governments have kept interest rates at all-time lows to shore up growth. Central banks have been net buyers for three straight years, the longest stretch since 1973, according to World Gold Council data.


They are not the only ones optimistic about gold. The specter of inflation is making some turn to the yellow metal.


“By the time inflation becomes evident,” says Paul Johnson of the $14 billion Paulson & Co. hedge funds, “gold will probably have moved, which implies that now is the time to build a position.”


And just recently the Islamic Republic News Agency reported that Iran would begin accepting payments from its trading partners in gold. This move further reinforces the universal currency and store of value aspects of the metal. Iran already allows its trade partners to pay in their native currencies. It has also accepted payment in the form of goods from both India and China. It will now take payment in gold. Fundamental situation is clearly bullish for the yellow metal.


Let’s turn to the technical portion with analysis of the gold to bond ratio. We will start with the long-term chart (charts courtesy by http://stockcharts.com.)

A look at the gold to bond ratio provides us with the proper long-term perspective in viewing gold’s decline last week. Analysis of this chart suggests that the bullish trend definitely remains in place, as no breakdown has been seen below the long-term support line.

In the long-term chart for gold (you can click the chart to enlarge it if you’re reading this essay at sunshineprofits.com), we see that the important support level mentioned in our essay on the possible rally in gold (March 14th, 2012) has been reached. Quoting from the abovementioned essay:


Last week saw several important developments as gold’s price decline approached the 50-week moving average while the RSI level remained slightly above the 50 level. This is a bit ambiguous with respect to what likely seemed to be needed for the final bottom to form.


In the past few days gold’s price moved slightly below the 50-week moving average and afterwards moved back above this level. In addition, the RSI moved below 50.


These two signs defined the bottom seen in early 2007 and it appears that the current bottom is already in at this time. Also, the possible correction appears to have happened already.

Taking a look at the chart from 2006-07, we see that the major bottom seen early in 2007 saw gold bottom half way between the 50% and 61.8% Fibonacci retracement levels. Huge volume levels also accompanied this local bottom. Furthermore, gold’s stock prices visibly declined at the same time and the RSI level moved close to but did not reach 30. Now let’s take a look at where we are today.

We now turn to the current short-term GLD ETF chart. Gold’s price has declined past the 50% Fibonacci retracement level but is still above the 61.8% level. In fact, on Wednesday, gold’s closing price was between the two and the bottom formed on significant volume. Also, the RSI level declined close to 30 and then moved back up. The situation is nearly identical to early 2007.

In our opinion, the striking similarities make our analysis this week quite reliable. Many factors are very much in tune and it is likely that this pattern will hold for the next couple of months. Keep in mind that it may take a week or so for the rally to really get underway.

Some might say that the bearish head-and-shoulders pattern is visible to some extent but a closer look reveals that this is not really the case. The shoulders are not really symmetrical. In early 2007, the pattern was even more visible and the target level based upon it was lower than the actual bottom that was formed. With the pattern less visible this time, and so many other factors aligned perfectly, it is likely that the bullish implications here will prevail.

In this week’s chart of gold from a non-USD perspective, we have a confirmation of the bullish outlook we have seen in the previous charts. Another move to the downside target area, which was reached last week, has been seen and it’s likely that a double bottom will form and the ratio will then move higher. The breakout above the declining resistance line (based on 2011 tops) has been well verified and it seems that now is the time for the rally to begin.

Summing up, the situation in gold remains very bullish for both the short term and long term based on this week’s charts.

To make sure that you are notified once the new features are implemented, and get immediate access to my free thoughts on the market, including information not available publicly, we urge you to sign up for our free e-mail list. Gold & Silver Investors should definitely join us today and additionally get free, 7-day access to the Premium Sections on our website, including valuable tools and unique charts. It’s free and you may unsubscribe at any time.

Thank you for reading. Have a great and profitable week!

P. Radomski
Editor
www.SunshineProfits.com

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All essays, research and information found above represent analyses and opinions of Mr. Radomski and Sunshine Profits’ associates only. As such, it may prove wrong and be a subject to change without notice. Opinions and analyses were based on data available to authors of respective essays at the time of writing. Although the information provided above is based on careful research and sources that are believed to be accurate, Mr. Radomski and his associates do not guarantee the accuracy or thoroughness of the data or information reported. The opinions published above belong to Mr. Radomski or respective associates and are neither an offer nor a recommendation to purchase or sell securities. Mr. Radomski is not a Registered Securities Advisor. Mr. Radomski does not recommend services, products, business or investment in any company mentioned in any of his essays or reports. Materials published above have been prepared for your private use and their sole purpose is to educate readers about various investments.

By reading Mr. Radomski’s essays or reports you fully agree that he will not be held responsible or liable for any decisions you make regarding any information provided in these essays or reports. Investing, trading and speculation in any financial markets may involve high risk of loss. We strongly advise that you consult a certified investment advisor and we encourage you to do your own research before making any investment decision. Mr. Radomski, Sunshine Profits’ employees and affiliates as well as members of their families may have a short or long position in any securities, including those mentioned in any of the reports or essays, and may make additional purchases and/or sales of those securities without notice.


Best and Worst Performing Nasdaq 100 Stocks YTD

bespokeinvest.com - Tue, 2012-03-20 14:50

Yesterday we highlighted that the Nasdaq Composite was off to one of its best starts to a year ever, and the best since 1991.  So which stocks have been driving the rally?  In the tables below, we highlight the best and worst performing stocks in the Nasdaq 100 year to date (YTD).  While the Nasdaq 100 doesn't include all of the stocks in the Nasdaq Composite, it includes the largest stocks in the index, and they are ultimately what drives performance.

With big gains so far this year for both stocks, Apple (AAPL) and Priceline (PCLN) are two stocks that have probably gotten the most headlines.  In terms of performance, however, the leader of the pack for the Nasdaq 100 is Sears Holdings (SHLD), which is up 152.8% YTD.  Even after this monster gain, however, SHLD is only back to levels that it traded at in late October.  Number two on the list of best performers this year is Netflix (NFLX), which is also rebounding from a rough second half to 2011.  Rounding out the top five are Fossil (FOSL), Seagate (STX), and AAPL.  While PCLN has had a strong year so far, it currently ranks as the sixth best performing stock in the Nasdaq 100.

On the downside, there are actually ten stocks in the Nasdaq 100 that are down in 2012.  Apollo (APOL) is this year's worst performer with a decline of 19.5%, followed by First Solar (FSLR) and Electronic Arts (EA).

One interesting aspect of the year's list of best performing Nasdaq 100 stocks is how many high priced stocks are on the list.  As shown above, four of the ten names on the list have share prices in the triple digits.  Currently, there are thirteen stocks in the Nasdaq 100 that have share prices above $100.  Of those thirteen names, the only one that is down year to date is Google (GOOG).  Combined, these thirteen stocks are up an average of 24.56% compared to an average YTD change of 17.11% for all 100 stocks in the Nasdaq 100.  

With AAPL's dividend announcement yesterday, one question asked was whether or not the company had any plans to split its stock.  While stock splits have no fundamental or technical impact on a company's valuation, you often hear that a stock split is good for a company's future performance because the lower share price opens it up to a bigger pool of potential investors.  While this rationale sounds good in theory, this year at least, companies with high share prices have been outperforming their lower priced peers, thereby refuting the argument that companies with high share prices should split their stocks.

 

Saudi Arabia Aims to Deliver "Wall of Oil" to US; Oil Minister Says "High Oil Prices Unjustified" ; Highest March Price in History; Republicans Say Obama Not Doing Enough

Wall of Supertankers Heads For US

Brent crude at $125, US Crude at $110, and soaring gasoline prices everywhere have caused quite a stir. See Highest Price Ever of Gasoline in March; State-by-State Gas Price and Gas Tax Comparison for a discussion.

In response to high prices, Saudi Arabia has a plan to send a wall of supertankers to the U.S. to knock down prices and Republicans have attacked President Obama for not doing enough.

Please consider The price that launched a wall of ships
In a matter of days, Saudi Arabia has hired the largest number of super-tankers in years. When the tankers load their cargo in Ras Tanura, the world’s largest oil terminal, in the next couple of weeks and start a 40-day voyage towards the US Gulf coast, they will deliver a wall of oil with a single aim: to bring prices down.

“This is the first time in several years for [Saudi Arabia] to hit the market with such volume – and in such a short time frame,” says Omar Nokta, a shipping expert at specialist investment bank Dalham Rose & Co.

Last week, Vela, the shipping arm of Saudi Aramco, hired over a few days 11 so-called very large crude oil carriers, each capable of shipping 2m barrels, to deliver to US-based refiners. “In 2011, Vela fixed one VLCC to the US every other month,” Mr Nokta says.

The hiring spree was the most public move by the kingdom in a series of efforts aimed at bringing down oil prices from $125 a barrel towards $100. “They want to bring prices down. That is it,” says a former Western oil official.Saudi Oil Minister Says "High Oil Prices Unjustified"

Please consider Naimi calls high oil prices ‘unjustified’
Saudi Arabia’s powerful oil minister Ali Naimi sought to cool overheating oil markets on Tuesday, saying high oil prices were “unjustified” and that the kingdom could boost its output by as much as 25 per cent if necessary.

Supply was much more robust than it had been in 2008 when crude rose to $147 a barrel, he said.

As the west’s nuclear stand-off with Iran escalates, oil prices have rallied this month to a post-2008 peak of $128 a barrel with markets bracing for European Union sanctions on Iranian crude that could knock out a chunk of global supply. Jitters have been fuelled by supply outages in Syria, Yemen and South Sudan.
High quality global journalism requires investment.

Christine Lagarde, managing director of the International Monetary Fund, said on Tuesday that rising energy prices had now overtaken Europe’s sovereign debt crisis as the biggest worry for the global economy. Speaking in New Delhi, she said that while the world financial system had strengthened over the past three months, volatile oil prices would have “serious consequences”.

But Mr Naimi insisted that supply was “much more firm today than in 2008”, the time of the last big oil increase. Saudi Arabia had 2.5m b/d of additional production capacity, which it could bring online if necessary.

Saudi Arabia is likely to be producing about 9.9m b/d of oil in April and exporting roughly 7.5m-8m b/d of that, he said. Asked if the kingdom could ease prices by exporting more oil, he said customers were not asking for additional crude. “We are ready and willing to put more oil on the market, but you need a buyer,” he said. Republicans Say Obama Not Doing Enough

MarketWatch reports Republicans launch new attacks on Obama, Chu over gas prices
Republicans launched fresh attacks on the Obama administration on Tuesday over the soaring price of gasoline, ripping the White House in an election-year bid for the upper hand with consumers.

Testifying before the House Oversight and Government Reform Committee, Energy Secretary Steven Chu was peppered with questions about what the administration has done to bring down gasoline prices, which are now averaging $3.85 a gallon versus $3.55 a gallon a year ago.

Republican presidential candidates Mitt Romney and Newt Gingrich have called for Chu to be fired as gasoline prices climb. On Tuesday, Gingrich released an ad highlighting Chu’s September 2008 statement (retracted since he became head of the Energy Department) that he’d like to see gasoline prices at similar levels to Europe’s and his support for the Chevrolet Volt.

Gingrich — who competes against Romney, Rick Santorum and Ron Paul on Tuesday in the Illinois Republican primary — has touted a plan to bring gasoline prices down to $2.50 a gallon if elected president. The White House has criticized that plan as unrealistic.

Obama has said that there’s little that can be done from Washington in the short term to lower gasoline prices and that there’s no “silver bullet” to bring them down in a global market.
Warmongering Fools

Obama is essentially correct when he says "no silver bullet" on energy prices. Moreover, Gingrich is a fool if he really believes he can bring prices down that low without other devastating consequences such as a massive recession and 13% unemployment.

Finally, the leading Republican warmongers are angling for war with Iran, something sure to send oil prices to new highs should it happen. With $trillion deficits as far as the eye can see, the last thing the US needs to do is start another idiotic war, one likely to cause a supply shock sending gasoline prices over $5 if not much higher.

If you want a good reason for high gas prices, you can blame six things

  1. Fed policies - The Fed and its supporters in both political parties are to blame
  2. Fractional Reserve Lending - The Fed is to blame
  3. US Policy in the Mideast - Republicans other than Ron Paul will make matters worse
  4. Deficit spending - both political parties are to blame
  5. Warmongering - both political parties are to blame
  6. Peak Oil

Drill Baby Drill is an inane response to those fundamental problems.

Mike "Mish" Shedlock
http://globaleconomicanalysis.blogspot.com
Click Here To Scroll Thru My Recent Post ListMike "Mish" Shedlock is a registered investment advisor representative for SitkaPacific Capital Management. Sitka Pacific is an asset management firm whose goal is strong performance and low volatility, regardless of market direction. Visit http://www.sitkapacific.com/account_management.html to learn more about wealth management and capital preservation strategies of Sitka Pacific.


IMF sees $160 oil risk despite Libyan boost

Ambrose Evans-Pritchard - Tue, 2012-03-20 14:28
Libya's oil exports have rebounded much faster than expected and will exceed pre-Arab Spring levels as soon as April, plugging a crucial gap in world crude supply as the Iranian crisis comes to the boil.

Highest Price Ever of Gasoline in March; State-by-State Gas Price and Gas Tax Comparison

Highest Gas Price Recorded in March

An ABC consumer report shows Highest Gas Price Recorded in March
The average price of a gallon of regular is now $3.87, the highest recorded price in March. The average price is up nearly 4 cents from a week ago, and over 30 cents from a year ago, according to the Department of Energy, as more drivers face gas prices of $4 a gallon or more across the country.

Last week, the average gas price was $3.83 a gallon, the previous record according to data going back to 1990.

The West Coast was once again the most expensive region with an average gas price of $4.23, up almost 2 cents from last week, with an increase of over 37 cents from a year ago.

The least expensive was the Rocky Mountain region with $3.62 a gallon. That region had the highest increase from last week, 14 cents, while the average price there climbed almost 24 cents from a year ago.
State-by-State Gas Price Comparison

The AAA Fuel Gage Report by the American Automobile Association tracks gasoline national averages including state-by state comparisons.



Site is updated daily. Map above shows prices as of March 20, 2012.

Gasoline Taxes State-by-State



Diesel Fuel Taxes State-by-State



The above maps by the American Petroleum Institute.

In what should be no surprise, the highest gas price states are in general the states with the highest gasoline taxes.

Mike "Mish" Shedlock
http://globaleconomicanalysis.blogspot.com
Click Here To Scroll Thru My Recent Post ListMike "Mish" Shedlock is a registered investment advisor representative for SitkaPacific Capital Management. Sitka Pacific is an asset management firm whose goal is strong performance and low volatility, regardless of market direction. Visit http://www.sitkapacific.com/account_management.html to learn more about wealth management and capital preservation strategies of Sitka Pacific.


EU Sovereign Debt Spreads

bespokeinvest.com - Tue, 2012-03-20 12:51

While spreads on high yield US debt are at their lowest levels since early August of last year, the picture among major EU sovereigns is more mixed.  The charts below show the spreads between 10-year sovereign debt of Italy, France, Spain, and Portugal relative to Germany. 

Although spreads on Italian debt are back down to their lows of August, spreads in the other three countries remain elevated.  That being said, spreads on the debt of France, Spain, and Portugal have certainly stabilized, which is a positive for those markets.

High Yield Spreads Fall to Lowest Level Since 8/1/11

bespokeinvest.com - Tue, 2012-03-20 12:30

Yields on high yield debt have seen a big drop since they peaked out 910 basis points (bps) above Treasuries back in early October.  Since then, spreads have declined 36% to 579 bps and are currently at their lowest level since 8/1/11.   Even after this large decline in the perceived risk of high yield debt, this market still has a ways to go before it is back to the lows of 2011 (453 bps).

 

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Baltic Dry Index: Up 19 Days in a Row, But Still Down 49% YTD

bespokeinvest.com - Tue, 2012-03-20 10:04

The Baltic Dry Index is generally considered the benchmark for the price of moving major raw materials by sea.  With today's gain of 0.4%, the index is currently riding a 19-day winning streak where it has gained 25%.  Yet, even after accounting for this winning streak the index is still down 49% YTD.

From a longer-term persepctive, it has been a rocky twelve years for the Baltic Dry Index.  From the start of 2000 through its peak in May 2008, the index rallied 793%.  Then, the global financial crisis arrived, and shipping rates vaporized.  Since its peak of 11,793 back on 5/20/08, the Baltic Dry Index has declined 93%!

 

IMF and ECB Bailouts "Created" Huge Bondholder Losses; More Haircuts Coming Up

It's hard to have too much sympathy for those buying Greek bonds. Then again, one should always want a fair market, not a rigged one in which certain players can never lose.

Please consider the question How much did the IMF, ECB and EU bailouts harm Greek bondholders?
The Greek CDS auction results are in, and the implied recovery rate on the Greek bond swap is 21.5 percent – so a 78.5 percent loss. What isn't widely appreciated is that most of this loss was created by the bailouts. That is of course true in the sense that the Greek bailouts have delayed the process of adjustment in Greece, so it continued on an unsustainable path for longer meaning its eventual defaults are larger.

And no one thinks the new situation is really sustainable – new Greek bonds are pricing in of order a 75 per cent further write-down. But that's not what I'm referring to here. I mean something much simpler: because Greece was bailed out with loans from the IMF, ECB and EU that have been treated as senior to the bonds of the private sector (i.e. any losses were to be experienced first by the private sector – all loans to the IMF, ECB and EU were to be repaid with a higher priority than loans to the private sector), that meant that the losses to those Greek private sector bondholders that ended up taking losses were much greater.

The bailouts mean that those bondholders that eventually take losses take a 75 per cent loss rather than a 33 per cent loss – they are badly harmed by the bailout process. Anyone with bonds in another eurozone state in receipt of bailouts had better beware. Portugal, anyone?More Haircuts Coming Up

The market is already predicting another 75% collapse in Greek bonds. Ultimately any fools that threw money at Greece (without CDS protection) will lose every cent, except of course the idiots who insisted on the bailouts in the first place: the ECB and IMF.

Portugal is now in the batter's box and Spain is on deck. Both will fail, just as Greece did. The only thing that remains to be seen is how much money the ECB throws at those problems before both blow up in the ECB's face.

Mike "Mish" Shedlock
http://globaleconomicanalysis.blogspot.com
Click Here To Scroll Thru My Recent Post ListMike "Mish" Shedlock is a registered investment advisor representative for SitkaPacific Capital Management. Sitka Pacific is an asset management firm whose goal is strong performance and low volatility, regardless of market direction. Visit http://www.sitkapacific.com/account_management.html to learn more about wealth management and capital preservation strategies of Sitka Pacific.



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