Sunday, November 29, 2015

Daily News Roundup: Went on vacation, returned on probation

Foreign Affairs:
Cameron steps up bid to win support for Syria bombing (Bloomberg)
Violence in Turkey after prominent lawyer shot on live TV (Zero Hedge)
Momentum growing for a climate deal (Bloomberg)

Oil majors queueing up in Iran (Bloomberg)
Fattest ever cattle herd signals end to record beef prices (Bloomberg)
Miners still reeling after copper crash (The Telegraph)
Resource rout gathers steam (Globe and Mail)
OPEC price war likely to continue (Global Risk Insights)
Russia ready to expand gas cooperation with Saudi Arabia (Sputnik News)
China seen holding off LNG deliveries amid glut and high-cost domestic output (South China Morning Post)

Business & Finance:
How much debt can the oil industry handle? (Zero Hedge)
Bill Gates expected to create billion dollar clean energy fund (Globe and Mail)
China's home-grown Comac ARJ21 passenger jet enters commercial service (South China Morning Post)
Art & Design:
Mercedes to deliver GLC fuel cell vehicle by 2018 (Slash Gear)
Finally! Photos of Star Wars recreated with Lego (Design You Trust)
Part 4: Adam Sandler and the Chanukah song (The Awesomer)

Saturday, November 28, 2015

Gold: Screaming to breakout to around $105.50

Earlier in the week I had written about silver looking like it was positioned bullishly and now I've noticed that gold is positioned even better! The bullish descending triangle in gold (GLD) had previously eluded me but now a narrative is beginning to emerge. I have now highlighted gold entering a possible transitional channel within the blue lines. One top was in May of this year and the other October. What is currently happening (I believe) is the other low making this channel up. I am not sure where GLD will go from there, but in the short-term at least GLD is a strong long/buy. There is a gap to fill starting at $104.50 so possible upside limit would begin in that region. I have highlighted a similar bullish descending triangle in SLV as well that I had neglected to point out in my previous post. Divergences are also prominent in the MACD(12,26,9) and RSI(5 and 14) charts.

Thursday, November 26, 2015

Obama pardoned the wrong Turkey: Middle East unrest possibly bullish for energy ($XOI, ERX, XLE)

I don't feel like writing very much after a mediocre review on my clinical performance today but I noticed something when I was reviewing my energy index $XOI. I previously wrote how $XOI was in an ascending bearish triangle and that a retracement would likely take it to around 1140. Well it appears that another bearish ascending wedge is developing with two very good taps on the diagonal support line (at 1140 and 1170) meaning that for me an ascent is going to take place from here before having to worry about an eventual breakdown. The narrative that has emerged here is that this is a response to the general confusion and Middle East unrest. Energy is listed as a strong long/buy. $XOI target set at around 1300.

Wednesday, November 25, 2015

Daily News Roudup: $5000 was a lot when I was kid, but now that I'm a 34 year old adult with student debt, that seems like a fuck-load of money

International Affairs:
$7 billion boost for Germany's refugees (Bloomberg)
Waiting to happen: The downing of the Russian jet (The Economist)
ECB: Emerging markets vulnerable to multiple shocks (The Telegraph)

Business & Finance:
Brazilian bank CEO arrested in Rio (Bloomberg)
China's earliest monthly economic indicators flash warning sign (Bloomberg)
Europe's banks still weighed down by €1 trillion in bad debts (The Telegraph)
Pfizer and Allergen: Inside the $300 billion merger (The Economist)
Shift: The Bitcoin debit card (Bless This Stuff)
Israel signs natural gas deal with Egypt (Haaretz)
Glencore's oil deal in Libya called 'worthless' (The Guardian)

Art & Design:
Why didn't I think of that? A monthly sunglasses subscription service (kickstarter)
They were once caged, now a nice lady knits sweaters for them (Design You Trust)
Reusable rocket Blue Origin launched successfully (The Awesomer)

Monday, November 23, 2015

Biotechnology: Ascending bearish wedge back in play on $BTK (hey, that rhymes)

I called biotechnology as a "long/buy" recently while the S&P was heading towards a test of 2120. I naively said that the ascending bearish wedge had been invalidated when it broke a diagonal resistance at around 3750 on $BTK, but all I've ended up realizing is that is that the bearish ascending wedge is just getting larger and I now have to issue a strong sell/short signal on biotechnology. It may be a few a more sessions for the euphoria of the Allergen and Pfizer merger to wear off, but I've drawn the ascending bearish wedge or the bullish ascending channel to show where this index needs to go in order for the wedge to be invalidated. All the stochastic indicators are pushing the oversold region and there's a resistance line on the RSI(5) indicator comprising a series of lower lows which needs to be broken in order for this pattern to be invalidated.
Oddly enough if one were to have stayed glued to the biotechnology ETF XBI (which I was guilty of until recently) the stock seems to be happily occupying an ascending channel and appears to be imminently breaching another diagonal resistance at $71.00. The next few sessions are going to be critical in showing the direction of biotechnology and healthcare. I'm going to play it cautious and follow $BTK instead of XBI as it has been an excellent guide in the past. Please be careful, our second right shoulder may be going in.

Sunday, November 22, 2015

Silver's Time to Shine

I have noticed a few commentators on the internet have both noticed gold and silver's long term decline but also the possibility of a bottom being put in for one or both of them. I hate calling bottoms because it is often the most irrational part of the stock market and can happen longer than you're able to stay liquid.

The daily chart for silver doesn't appear to reveal anything special, in-fact, my chart is quite messy as I have struggled to find any channels worth charting with the exception of the large downward red channel where it currently finds itself. There are a couple of gaps that need filling around $14.00 and $14.20 but nothing particularly spectacular to write home about. A possible support level at $13.40 may be going in but it's hard to say. It may be premature but the curve in the stochastics(14,7,7) chart looks like it's about slowly shoot up and the RSI(5) indicator was hugely over-sold. So far thought this is a very lukewarm and speculative trade.
What has me really interested about silver is the weekly chart which is currently putting in a massive bullish declining wedge. I'm not ruling out further downside based on the weekly charts either, but for those of you looking to make a long-play on silver the weekly chart is telling me it's time to begin developing a position. A reflection of this change can be seen in the MACD histogram which has shown a series of higher lows and a gradual change towards a positive momentum over the last three years. Last week may have been the first bottom being put in! I am issuing a very strong long-term buy on silver.

Saturday, November 21, 2015

Daily News Roundup: That dissapointing moment you get to work and it's not on fire

International Affairs:
Terror Alert: Brussels in lockdown (Bloomberg, Zero Hedge)
UK posts biggest budget deficit since 2009 (Bloomberg, The Telegraph)
India backs bigger role for Yuan (South China Morning Post)

Business & Finance:
2016 will be a year of stable growth for equities, say analysts (Financial Post)
Container freight plummets 70% in 3 weeks (Zero Hedge)

The Lucara diamond may be the second largest ever (Financial Post)
Iran seeking to increase output above OPEC's ceiling (Bloomberg)
Oil prices to stay lower for longer (The Telegraph)

Art & Design:
Glaucus atlaticus spotted off (ahem) Australia (Design You Trust)
L.A. Auto Show: Alfa Romeo Quadrifoglio and Porsche Targa 4 (The Street) 

People Can Change: Carmelo Anthony visits Rikers Island (The Awesomer)

Guest Post: A Lump of Coal in Your Stocking (thanks to Natty Gas and Crude)

Why 2015 will go down as a year to forget for North American coal miners

Plenty of coal industry insiders have spoken out about the collapse of the business in the United States. But nobody does it with quite the same fervor as Robert Murray. Canadian miner Lucara finds 1,111-carat diamond - believed to be second-largest ever The gigantic diamond, found in Botswana, is so big that Vancouver-based Lucara could not…

Thursday, November 19, 2015

Daily News Roundup: Support Our Right to Arm Bears

International Affairs:
Why Islamic State has all the money it needs (Bloomberg)
British National Health: Decreased spending and now a Doctor's strike (The Economist)
U.S. Russia improvement in relations (Bloomberg)

Biggest diamond find in more than a century at 1,111 carats (Bloomberg)
530 Kilometers: Visualization of the oil glut (Zero Hedge)
Goldman eyes $20 oil as glut overwhelms storage (The Telegraph)
Iraqi oil at $30 as OPEC readies for new battles (Reuters)
Obama: "No" to Keystone and "Yes" to nuclear (Business Green)

Business & Finance:
Baltic Index drops to all time low (Bloomberg, Zero Hedge)
Evans Pritchard: Finland's depression is the final indictment of Europe's monetary union (The Telegraph)

Art & Design: 
Canadian kids tying coats to street poles for the homeless (Design You Can Trust)
RWD Huracan LP580-2 (Hi Consumption)
 Bill Fuckin' Murray: A Very Murray Christmas Trailer (Cool Material)

Wednesday, November 18, 2015

Who Knew? S&P and Biotechnology set to climb

Who knew that war, terrorism, options expiration week and interest rates (possibly) climbing in December could be a bullish sign for the market. It was back in August that I stated that once the correction was done we could see the balance of the year with a ascending market. Except for the recent hiccup, that forecast has been remarkably resilient.

Springheel Jack made the near sighted prediction that a failure for the S&P to break the middle bollinger band would be bearish for the market, which although technically correct I feel didn't take into account options expiration and the Fed. His prediction that a break above 2060 would mean that a high at around 2116 would be tested is I feel spot on. This move also shows that the series of higher lows creating the green line on my diagram was a mega-strong resistance and the platform upon which our double top is going to be made.
One of the places I think this market transition is most profitably evident is in the Biotechnology Index $BTK. I was thinking to myself three days ago how instinctively the biotech's were building up to something but really didn't make it evident until the EMA(13) crossover of the EMA(34). All the momentum indicators are positive and the full stochastic (5,3,3) still has room left for an ascent. Most critically though is that $BTK has broken out from the diagonal resistance line made by the four lower highs in July, August, September and November. Biotechnology is listed as a long/buy.

Tuesday, November 17, 2015

Guest Post: Overvalued and Overblown

Conditions are ripe for frothy markets - here's how to spot a bubble before it bursts

In the early 1980s, a marble bust of Pope Gregory XV made headlines in Toronto. Dating back to the early 1600s, it had been in the hands of an aristocratic English family until 1978 when they sold it for £240 (about $600). At that time, its provenance was unknown. A few years later, an art expert…

Monday, November 16, 2015

Daily News Roundup: Vive la resistance!

Foreign Affairs:
The accused man behind the Paris attacks (Bloomberg)
Finland to discuss leaving Eurozone after citizens force debate (The Telegraph)
Putin: Pariah to Playa' (Bloomberg)

OPEC export price falls below $40 for the first time since 2009 (Bloomberg)
Berkshire still has faith in oilsands as stake in Suncor increased (Financial Post)
European steal industry must halve by 2030 in order to survive (The Telegraph)

Business & Commerce:
Japan slides back into recession (Globe and Mail)
The debt crisis rolls on (The Economist)
How Saudi Arabia's oil gamble could kill OPEC and feed the ISIL monster (Financial Post)

Art & Design:
Simple yet powerful: Street art in Paris one day later (Design You Can Trust)
On the block: Aston Martin DB4GT (Hi Consumption)
Office warfare: the 15 best Nerf guns (Hi Consumption)
The Han Solo blaster flask (The Awesomer)

Thursday, November 12, 2015

U.S. T-Bills: People seem fearful, albeit possibly only in the short-term

Treasury ETF TLT has been showing a bullish descending triangle since mid-August. It's two peaks came when it either passed or touched the Keltner channel lines in August and September and it now appears that the third hit may break through. I am now issuing a speculative long/buy on TLT as strong sessions from the last five days have gotten some indicators (like RSI(5) pointing north like this has room to grow. A lower low has not yet been put in and it appears resistance has formed at the low of mid-September of $118.00 (creating the flat bottom of our triangle).  
Please be wary though as a gap needs to be filled from $119.50 to $120.50. This gap in all likelihood will be filled but gaps often signal a reversal point so I have drawn what the greater downward channel may look like if this turns south. 

With general fear in the market Treasuries are a natural place to go and especially now with a strengthening dollar, but for me to be really confident in the upward momentum of this speculative trade I would like to see it reach and pass the EMA(34). The point and figure chart only has this going to $121.00 on the 30 minute which is not very good from a medium-term perspective.
I am in favor of the second scenario occuring. I believe the gap will be filled and TLT will resume it's downward fall as the S&P is at a crucial and very strong resistance point around 2025 (only about 20 points away).

Tuesday, November 10, 2015

Daily News Roundup: I have 99 problems, money could solve about 73 of them

Foreign Affairs:
Greek economy set to shrink again (Globe and Mail)
Portuguese Premier toppled, Communists and Socialist poised for control (Bloomberg)
Helmut Schmidt passes away at 96 (The Economist)

Oil majors see low oil prices persisting for months (Globe and Mail)
Global coal consumption heads for largest decline in history (Bloomberg)
Canada's oil-sands to be third largest contributor of crude by 2040 (The Financial Post)

Business & Finance:
1970's Redux: Energy watchdog fears oil crunch with Mid-East stranglehold (The Telegraph)
4 out 5 Fed voters will be ex-Goldman (Zero Hedge)
Increase in risk for China's banking sector as debt burden weighs on small lenders (South China Morning Post)
Corporate bond inventories turn negative for first time (Zero Hedge)

Art & Design:
Thermal scans of pyramids of Giza reveal "anomalies" (Slash Gear)
Star Wars characters as classical Greek statues (Hi Consumption)
 280mph: The Hennessey Venom GT (Hi Consumption)
Yamaha Electric PES2 Concept (The Awesomer)

A near-term 'theory' about crude oil (USO), crude oil index ($XOI) and the U.S. dollar ($USD)

I started out with the aim of writing about commodities but got engrossed in the interplay of two indexes and an ETF all related to crude oil.

The first chart to be examined is the crude oil index $XOI. I've noted previously that the crude oil index $XOI has been in a bearish ascending wedge since August and today made contact with the lowermost support line. If this is part of a five wave ascent we should see it fall to around 1167 before turning back up. I've drawn in what this ascending channel may look like but any breach of the lowermost channel line and we'll need to re-think this forecast.
USO, the crude oil ETF, is not mimicking the trend established by $XOI very well because of the influence of the American dollar . If the American dollar goes down we could see USO rise to just over $16.00 for a second hit on our inverted triangle near-term. Long-term however this pattern should break to the downside. 
The U.S. dollar is a little overbought at the moment but having begun a tear to around $1.08 over the long-term I believe an expected short term retracement will only be to about $0.97 before turning back up again.
All of this fits with a view held by some (including myself) that the long-term rise in the American dollar will be bearish for commodities and emerging markets.

Sunday, November 08, 2015

Another canary singing? Technology (XLK)

This struck me as an excellent speculative short/sell that was simply too good to pass up. Everything about this chart is screaming 'top' and almost all indicators of note are overbought (RSI, stochastics, PMO, momentum).

The transitional pattern we have been seeing with technology started approximately in August when the strong ascending channel was replaced with a more horizontal channel. Now a bearish ascending wedge has appeared after an almost uninterrupted climb from late September.
Some longer term indicators have already crossed over however momentum is very strongly positive meaning this might be an intermediate decline before a second top is put in. Some commentators (Northman Trader springs to mind) have said that an ascent in the broad market until the end of the year is possible which gives a second lower high plenty of time to go in on this chart. We have a gap to fill from $43.50 to about $42.50 with Fibonacci retracement levels at $42.08, $41.36 and $40.85. Coincidentally the MA(144) is at $41.38 at the moment which adds additional credence to the Fibonacci levels and the MFI indicator peaked two weeks ago

Saturday, November 07, 2015

Daily News Roundup: Life is short, drink early

Business & Finance:
Technology stocks face "reckoning" as valuations detach from reality (The Telegraph)
China stocks jump after investors turn upbeat on economic outlook (South China Morning Post)
Exxon probed on climate cover-up (The Telegraph)

Gem miners looking for value (The Telegraph)
China buys 15 tons of gold in October (Zero Hedge)
Kuwait sees oil glut for five years on increasing supply (Bloomberg)

International Affairs:
Communists set to assume power and topple Conservatives in Portugal (The Telegraph)
Gasp! China and Taiwan affirm better ties (Bloomberg)
U.S. pulls out of Keystone pipeline (The Globe and Mail)
French back bomb theory in Sinai probe (Bloomberg)

Art & Design: 
How London fell in love with custom bikes (Bloomberg)
Star Wars trailer from Japan reveals new scenes (Slash Gear)

Goliath, the cow who thinks he's a dog (Design You Trust)
 Otor Electric bicycles (Hi Consumption)
Mazda MX-5 Speedstar and Spyder concept (Hi Consumption)

Next Week Rolling Over? Biotechnology ($BTK), Natural Gas ($NATGAS) and Oil ($XOI)

I commented this earlier week about how ominous the biotechnology index ($BTK) looks at the moment, and right now it appears like the final shoulder has gone in. We had a brief test of the EMA(34) on Friday but it closed back inside our ascending bearish wedge. Even the RSI and Stochastics look to be crossing over. Investors can take advantage of any fall in the biotechnology sector by using LABD or BIS. I expect a breakdown next week and I've listed biotechnology as a strong short/sell.
Months and months ago I thought natural gas could fall to $2.40 and it fell even further than that! Curiously this week a buy signal appeared on the RSI(5). Furthermore, the full stochastics have made a bullish crossover so I think natural gas deserves some attention next week. I've drawn in a diagonal resistance line made by the series of lower highs from August, September, and October. Resistance here is at $2.50 but natural gas is looking like a speculative long/buy here.
Earlier on Tuesday I also mentioned the bearish rising wedge in the Oil Index ($XOI) where this past week resistance was found at the MA(144). We are still in the rising wedge but stochastics and momentum indicators are showing downward pressure. I think oil is a strong short/sell.

Tuesday, November 03, 2015

Ominous Signs Abound: Biotechnology ($BTK), Russia (RSX), Volatility ($VIX) and S&P ($SPX).

I wrote several weeks ago about the final second right shoulder going in on biotechnology ($BTK) and today I noticed that it is approaching diagonal resistance put in by lower highs in July, August, and September. Judging by the chart we should see some peaking action over the next week. In addition to the this the MACD and RSI have entered oversold territory. Is our twin head-and-shoulders pattern coming to an end?
Russia continues to be an annoyance for me as I had shorted it after it emerged a large bearish ascending wedge was developing. Stochastics have entered or passed the oversold mark and today found support at the MA(144) however I fear that it may be a month longer before this downward pattern appears. Crude oil has risen recently which is  bullish for Russia but USO's stochastics and RSI indicators have also entered oversold territory. I might have to get out of this trade at a loss but remain confident of an eventual fall.
Volatility continues to trade in a very tight descending bullish wedge. It appears based on it's shape we're about a week away from either a move up or an abortive move down.
Finally, the S&P is at a crucial point right now on the weekly chart. A diagonal resistance line put in by a series of lower highs is currently in play and any break above it puts 2150 in play. Additionally the RSI is quite oversold at the moment.