Last Friday, West Texas Intermediate crude closed at $99.76 per barrel while Brent crude oil closed at $111.58 per barrel, marking a small gain over the preceding week. At the beginning of the week, oil prices rose modestly after the European Union announced its decision to impose an embargo on Iran’s oil exports. The EU said the embargo would be implemented over the course of several months to avert a sharp hike in oil prices, although Iran subsequently indicated that it may stop supplying oil to Europe immediately.
Doc is an expert at options trading and we talked about how to trade options the right way. Most people just try to use options as a substitute for buying stocks and lose money because they don't factor in volatility and time decay.
Silver rose sharply last week by 6.68%, closing at $33.86 per ounce on Friday. (On Friday, the white metal also reached a two-month high at $33.93.) Reflecting an ongoing strong rally, last week’s average price of $32.98 per ounce was 8.21% above that of the preceding week.
The Market Vectors Gold Miners ETF (GDX) rose 2.5% last Friday to close at $57.14. This also represented a 9.5% gain over the preceding week. (GDX is an exchange traded fund that tracks the performance of gold stocks.) This week’s gains came about after disappointing GDP figures and the Fed’s announcement to keep near zero interest rates till late 2014. The unresolved European debt crisis also adds uncertainty to the world economic outlook. Given that gold is seen as a good inflation hedge and a “safe haven” when the US dollar is weakening, investors have been flocking to gold and gold ETFs.
Last Saturday, the Greek government and its private creditors said that they were working out the final elements of a debt-swap agreement, which they expected to be ready this week. In an emailed statement, the Institute of International Finance (IIF), which is negotiating on behalf of the private creditors, said that both sides are “close” to completing a voluntary exchange within a framework outlined by Luxembourg Prime Minister Jean-Claude Juncker.
Last Friday, the ratings agency Fitch downgraded the sovereign credit ratings of five European countries - Belgium, Cyprus, Italy, Slovenia and Spain - noting that they were vulnerable to monetary and financial shocks in the short run. Fitch’s move came two weeks after Standard & Poor’s downgrade of the credit ratings of nine European countries. While the euro fell shortly after the news, it eventually regained its losses. This was because Fitch’s move was not considered as severe as S&P’s, and that it did not affect any triple-A rated countries like France.
In a big week on the results front, the Dow Jones Industrial Index broke its winning streak though the tech heavy Nasdaq put on a further 1%. The S& P 500 Index stayed put around the 1316 level as traders eye support at 1310 and resistance at 1325.
The World Economic Forum Annual Meeting 2012 wrapped up in Davos-Klosters, Switzerland over the weekend with global financial chiefs issuing a warning that no economy is immune from the European debt crisis.
The World Economic Forum is a nonprofit based in Geneva. The annual meeting brings together about 2,500 economic leaders, journalists, political leaders and others to discuss methods of improving the state of the world.
I just did this podcast with Nicholas Santiago of InTheMoneyStocks.com. In it we talked about his short-term outlook for the market and what he sees in the months ahead.
Both of us are looking for a short-term correction over the next few weeks and then a rally back up to possibly new highs and then another big market drop like we saw last August and September. We talked about the reasons why.
This morning before the start of trading on the New York Stock Exchange and Nasdaq Amgen (NASDAQ: AMGN) announced that it was purchasing biotech company Micromet Incorporated (NASDAQ: MITI) for a blockbuster $1.16 billion acquisition.
Micromet announced that it also agreed to the buyout and shareholders will receive $11 in cash per every share that they own.
I just did this podcast with David Banister of www.markettrendforecast.com in which we discussed his outlook for the stock market and gold.
David uses trend psychology and Elliot Wave theory to understand and forecast the moves in the financial markets. He thinks that a short-term pullback for the markets is likely to start soon, but then we'll probably see another move higher.
Netflix (NASDAQ: NFLX), the on-demand Internet streaming film and TV program service provider, will be announcing its fourth quarter earnings on 25 January (Wednesday). Last Friday, the company announced that its marketing chief, Leslie Kilgore, would step down and take up a nonexecutive spot on the board. In addition, it also appointed Vice President of Marketing Jessie Becker as the interim Chief Marketing Officer and Jonathan Friedland, formerly Senior Vice President of Walt Disney Company, as the Chief Communications Officer.
Gold prices maintained their upward trend last week, ending last Friday at $1,658 per ounce, a 2% increase over the previous week. (Gold traded around $1,654 to $1,664 last week.) While gold has started off with a sharp gain early last week, the daily gains subsided in the course of the week, before rallying again on Thursday, after China announced better than expected economic growth in the last quarter of 2011.
Apple (NASDAQ: AAPL), the technology powerhouse, is releasing its first quarter earnings after the market close on 24 January (Tuesday). Thanks to popular products like the iPhone 4S and MacBook Air which were likely big sellers during the holiday shopping season, Wall Street analysts are now forecasting Apple to earn $10.04 per share and revenue of $38.92 billion. This would be a big contrast to the previous quarter when the company fell short of revenue expectations because of delays in introducing the iPhone 4S, which didn't happen until October.
It appears there is a solid date established for when Greece will default on its €14.4 billion bond maturing that it does not have the resources to repay, according to reports published by Reuters and Forbes.
Though last week’s corporate earnings presented investors with a mixed bag of results to ponder, better news on the domestic economic front along with more encouraging news from Europe spurred the market to a third week of gains.
Despite the recent rally in the stock market and in precious metals, gold stocks are continuing to act very sluggish and frankly I am worried about them.
The Market Vectors Gold Miners exchange traded fund (NYSE: GDX) made a peak in September and has been in a correction ever since. It has critical long-term support at 51, which repeatedly acted as strong support for GDX throughout 2011.
In the last few weeks of December GDX broke through this 51 level and then bounced back up in the first few days of 2012.