Friday, September 30, 2016

Marilize Legajuana...No Wait!

Entrepreneurs have a key role to play in legalizing marijuana

My friends from high school and university undoubtedly are laughing at the thought of me writing a column on cannabis. Even my eight-year-old son is beginning to realize I am a bit of a nerd, wondering why daddy never touches a beer like other parents. My personal experience with tobacco, alcohol and drugs consists of one…

Investing In Chinese Banks Isn't As Profitable As In Golden Era?!? I Wonder Why

China bank IPOs not as profitable as in 'golden era'

Jamie Dimon and Sergio Ermotti starred in the roadshow promoting Postal Savings Bank of China Co's share sale. Yet the executives' participation in this year's biggest initial public offering also serves as a reminder that investing in Chinese banks isn't what it used to be. When China's fifth-largest bank priced its $7.4 billion share sale last…

How Far Do Committments Go In New OPEC Agreement?

Oil prices rise after OPEC announces first output cut since 2008

OPEC has agreed to cut its oil output for the first time since 2008. The major oil producing nations struck a preliminary deal at talks in Algeria. Brent crude the international benchmark for oil, rose almost 6% to nearly $49 a barrel on the news. The move sent US stocks rising with energy shares pushing the…

Deutsche Bank, Easy Money, Stagnant Southern Economies: Hawks Are Circling Around Draghi

Draghi faces off against German critics

Grilled by German lawmakers, European Central Bank President Mario Draghi has been defending its ultra low interest rates and other stimulus measures, which he said were a necessity. Answering questions from the Bundestag’s European Affairs committee on Wednesday, he rejected claims that the ECB’s monetary policy was undermining eurozone growth, German bank profits and even fuelling…

Thursday, September 29, 2016

"Hot Housing Market" Catching Up To Australia, New Zealand And Canada Eight Years Later

Canadians, Aussies and Kiwis trapped in 'commodity bust, housing boom' cycle and the unwinding is going to be painful

Canada is not alone in having its central bank backed into a corner, forced to warn about the dangers of high debt and hot housing markets, while powerless to change interest rates as a commodity bust weighs on the economy. Economists at Bank of America Merrill Lynch have now grouped together Canada, Australia and New Zealand…

Seven Fat Years And Then Seven Lean Years

WTO expects slowest trade growth in 2016 since financial crisis

GENEVA - World trade will grow more slowly than expected in 2016, expanding by just 1.7 percent, well below the April forecast of 2.8 percent, according to the latest WTO estimates published on Tuesday. With expected global GDP growth of 2.2 percent in 2016, this year would mark the slowest pace of trade and output growth…

Wednesday, September 28, 2016

Energy (XLE): You Saw It Here First (And Yes I'm Making My Smug Face)

What a day! Surprise agreement with the Saudi's after a marathon conference session. Can't say that I'm very surprised by my bullish triangle which I posted yesterday on Energy ETF XLE, then!

Tuesday, September 27, 2016

Energy (XLE) Creating An Interesting Bullish Formation

But....could it be? Really? I've never seen one of these before, especially for an industry that's basically just had its ass handed to it by a failure of OPEC to come to an agreement on curbing the collapse in Crude Oil. Energy ETF XLE is generally bearishly configured: the EMA's are crossing over to the down side and an ascending channel looks like it's set to break. But out of nowhere a bullish declining wedge has appeared making it seem like the large ascending channel will continue right after a second touch is put in on the support line. This could be played with tight buys and stops at $65.50. This could be an epic contrarian play right now (as the article previous posted article by Tim Knight points out).

With Everything Else Going On I Think This Chart Crude Oil Chart Only Ends One Way

Slippery Do Dah

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I have a “moment of truth” every morning when I grab my iPad, bleary-eyed, from the side of the bed, to see what the ES is doing. This particular morning, I was bracing myself for +30 on the ES considering the Clinton momentum, but, happily, it’s only up 3 measly points at the moment. More important to me, crude oil is getting its shiny black bottom spanked, down about 2.7%. Some ridiculous rumor should be along any moment now.
0928-crude
Over the past nine trading days, in eight cases the price is about $44.25 at either the high or the low of the day. In other words, for nearly two weeks now, the price has been getting bounced around to the upside (by rumor) or downside (by fact), but has been sorta-kinda $44.25 or thereabouts.
If we can break $43, the triangle above would be history, and oil stocks could really start to see some downside. As it is now, energy remains my largest concentration of stocks positions, with nine out of my sixty-position positions being energy shorts.

Monday, September 26, 2016

Blockchain: Moving Away From Paper And Double-Entry Legacy Systems

Blockchain steps out of the lab as big banks 'toy' with real-world applications

Blockchain, a technology that has emerged with the promise of reaching far beyond its origins as the backbone of virtual currency Bitcoin, is slowly moving out of the testing lab and into real-world applications. Financial institutions, including Alberta's ATB Financial and Canadian Imperial Bank of Commerce, recently teamed up with blockchain pioneer Ripple in separate projects…

Price Drop In Oil Precipitated By Saudi Arabia To Punish The U.S. For Shale Gas Exploitation Now Has Them Investing In It

Saudi Aramco eyes $334bn investment by 2025

Saudi Arabia's state-owned oil giant Aramco plans to invest a total of about $334bn by 2025, including spending on infrastructure and projects to maintain oil capacity. Senior Aramco official Abdulaziz al-Abdulkarim, vice president for procurement and supply chain management, told a conference in Bahrain on Monday that the figure included spending on exploring for and developing…

Without ETFs This Very Website Would Be Very Boring

Courtesy of: Visual Capitalist

Sunday, September 25, 2016

Energy (USO and XLE) Gone From Bad To Worse, Thanks To OPEC

So Saudi Arabia is apparently "willing to cooperate" and "cut output levels" according to an article published by Bloomberg, and this after a tumble of 3.7% on Friday, but that the upcoming meeting in Algiers of OPEC members will be "consultative" and unlikely to produce any firms commitments. What I find laughable about this proposal is the effect it will have on the actual price of oil. 800,000 more barrels of oil are being pumped into the market now compared to August while Nigeria and Libya have solved previous supply disruptions. I'm not sure where all this oil is going since capacity is at an absolute limit at the moment, but it seems conditions are being created to lower prices even further.

Energy ETF's are not looking hot at the moment. Energy Sector ETF XLE seems to be putting in a large topping pattern while recently being in a declining triangle formation. A critical support at $67.00 is in, so please monitor carefully.
What's particularly worrisome is the appearance of the Crude Oil ETF USO which I think might be showing a head-and-shoulders pattern. I haven't always been the best at identifying these patterns, but regardless, the EMA's are bearishly aligned with important support levels at $9.80 and $9.30. It could be that the rebound in energy was all a pipe dream if these supports are lost.

Accord Creates Closer Financial Ties Between Russia and China

ICBC designated as RMB clearing bank in Russia

BEIJING - The People's Bank of China (PBOC) announced Friday that it has authorized the Industrial and Commercial Bank of China (ICBC) Moscow office to offer renminbi clearing services in Russia. Chinese and Russian central banks signed a memorandum in June on the establishment of a…

Yuan Influence Continues To Spread With Direct Exchanges To Middle East

China to launch yuan's direct trading with Saudi riyal, UAE dirham

BEIJING - China announced on Friday it will launch direct trading of its currency yuan with the riyal of Saudi Arabia and the dirham of the United Arab Emirates, on its inter-bank foreign exchange market Monday. The move will bring the number of foreign currencies that are allowed…

"Forget All The Human Rights Violations And Shady Banking Practices, We Need Free Trade With China Now"

Business community says free trade with China can't wait until political difference resolved

MONTREAL - As Prime Minister Justin Trudeau and Premier Li Keqiang wrap up the first official visit of a Chinese leader to Canada since 2010, members of the business community say that although China might not be perfect in terms of environmental regulations and human rights, now is the time to forge closer ties with what…

FOMC: Dissenters In The Fed Historically Have Been Wrong

David Rosenberg: Hawkish, dovish or a bit of both?

So the Fed didn't hike today, but the markets were only priced 20% for a move in any event. Everyone has been talking about a hike by year-end and on that prospect (futures are priced just over 50/50) and the Fed delivered. The forward guidance was blunt: The Committee judges that the case for an increase…

Friday, September 23, 2016

Semiconductors (SMH) Is Looking A Little Toasty

My Natural Gas UNG trade was pretty good this week but after the FOMC announcement and the successive rises we've had since I feel the market is at a minor inflection point right now. Lots of indexes are at key resistance areas (refer to my earlier post today to see what I mean) and the charts don't feel resoundingly positive as a whole. Case-in-point, Semiconductors Index ETF SMH which bounced two weeks ago off the lower Keltner Channel had a nice run of late with EMA(9) crossing over the EMA(13). Problem is though it now appears a weak looking ascending bearish wedge has appeared and SMH as a whole looks to be putting in a topping pattern. For the last few weeks I've stated that I'm quite content staying on the sidelines until the announcement came from the Fed, but now that it has, I'm perfectly content to continue being mostly in cash.

Conusmer Staples (XLP), Materials (XLB) and Retail (XRT) All Holding At Resistance

Three ETFs Still Worth Shorting

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Consumer staples…….
0922-XLP
……materials…….
0922-XLB
……and retail……
0922-XRT

Thursday, September 22, 2016

Gold Miners (GDX): Out Of The Gate And Down The Straight

Seems fortuitous that I re-posted an article from one of my favorite stock market commentators that suggests a bounce in gold and gold stocks before the FOMC announcement, but looking at the Gold Miners ETF GDX a bullish declining wedge was being put in which was promptly broken (smashed in-fact) right afterwards. Volume was incredibly high yesterday, well above the 180 moving average, meaning this is quite bullish. Because of the sharpness of the change since the correction began back in late July early August not all of my indicators have crossed over, but I expect them to over the coming week. 

Clive Maund: Where Will Gold Go Now?

PM Sector Alert Ahead Of Fed, Possible Double Bottom Completing...


The purpose of this update is to point out that the PM sector correction may be completing RIGHT NOW, with sector indices at the 2nd low of a potential Double Bottom. Whether it is or not depends on the outcome of next week’s Fed meeting – if they announce a rate hike, then both the broad market and the PM sector can be expected to break sharply lower. If they don’t – if they put it off again till later, or never, then the PM sector should take off higher again. We cannot know in advance whether they will hike or not, but we can be sure that their intentions have already been telegraphed to the 1%, so that they can position themselves to profit in advance.

Going solely on the year-to-date chart for the GDX, it does look like it is completing a Double Bottom at the support level shown, and setting up for another big rally, although it could break either way. The chances of it breaking to the upside are now rated at 65% - against 35% for a breakdown, and it does make sense for the Fed not to hike, as its prime duty is to keep asset prices elevated for the benefit of the 1%, not look after the economy – they abandoned that responsibility many years ago.

This would in fact be a classic place for a major new uptrend to begin; the sector has endured its deepest correction since this new bullmarket phase began, that has seen many quality stocks correct back heavily, and the sector has gone from being heavily overbought at the start of July to substantially oversold, and is in a zone of strong support above a rising 200-day moving average, which signifies that the larger trend is still definitely up. Yes, it could drop further if they hike interest rates next week, and it is this fear that is of course deterring would be buyers here.

How to handle this situation? – Well, one approach is to jump on the best PM stocks the moment it is clear that there will be no rate rise, if this is the outcome, for the sector can be expected to finish the day with a big white candle before continuing higher. Another approach is to take a chance and buy ahead of the announcement, and perhaps take out insurance in the form of Puts, in case a rate hike is actually announced and the sector then drops.

Whatever happens, the PM sector is certainly better value than it was two months ago, and statistically the odds favor the major uptrend resuming soon.

We will be looking at a range of better PM stocks to consider buying early this coming week on the site (we already looked at a range of Australian stocks in recent days).
End of update.

Wednesday, September 21, 2016

Low Oil Prices Are Now Like Chlamydia, You Just Have That S**t Forever

Cancel the oil price recovery?: New supply set to keep coming down the pipe till at least 2019

A crude oil supply shortage is looming, but it may not be upon us till at least near the end of the decade, according to RBC Capital Markets. "The steep drop in capital investment is... laying the foundation for a supply gap to emerge, by 2019, as long cycle-time projects, mostly sanctioned in a higher oil…

Japan: Part One Of Our Under-Whelming Central Bank Plan

Stop Killer

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Well, the big news tonight was what Japan would be. Here’s the skinny from our friends at ZH:

Disappointment on rates (no change)
  • *BOJ MAINTAINS POLICY BALANCE RATE AT -0.100%
But it appears BoJ unleashes its reverse twist idea…
  • *BANK OF JAPAN TAKES ADDITIONAL ACTION
  • *BOJ TO INTRODUCE QQE WITH YIELD CURVE CONTROL
  • *BOJ SCRAPS AVG MATURITY TARGET OF JGB HOLDINGS
  • *BOJ TO BUY JGBS IN LINE WITH CURRENT PACE (disappointing)
And ups it ETF-buying…
  • *BOJ: 2.7T YEN OF ETF BUYS FOR ETFS THAT TRACK TOPIX
Will do more jawboning…
  • *BOJ TO ENHANCE FOWARD GUIDANCE
  • *BOJ TO EXPAND MONETARY BASE UNTIL INFLATION STABLE ABOVE 2%
  • *BOJ BOARD VOTES 7-2 ON GUIDELINES FOR MARKET OPERATIONS
So the bottom line is bigger ETF buying, maintains rates (no easing), maintains bond-buying (no easing), unveils “yield curve control” (steepens curve but crushes bank balance sheets through long bond MTM losses)
But then they dropped the final tape-bomb…
  • *BOJ: MONETARY BASE MAY FLUCTUATE TO ACHIEVE YIELD-CURVE CONTROL
In other words – QQE size may increase… which the market liked…
Looking at the USD/JPY chart, it’s roaring higher, but at first the floor fell out (same goes for the ES) so whoever had stops in place……….sayonara!
Badges_Small NEW1

Tuesday, September 20, 2016

African Resource Development Continues Unabated

Uganda Oil Pipeline Opportunities to Be Unveiled

The Uganda-Tanzania crude oil pipeline business opportunities are going to be unveiled to private sector in special workshop next Tuesday. The workshop, organised by Tanzania Private Sector Foundation and Petro Fiorentini, expects to unveil opportunities available before, during and after pipeline construction. The organisers also expect to express the role of value chain and local content…

At The Most Critical Point When Strong Leadership Was Needed

A weakening world economy and a strengthening of Trump's appeal to voters

Now that summer is well and truly in the rear view mirror (it's so hard to return to the world of virtual wealth when there are very real diamonds of light still glittering on northern lakes), our principle theme going into the last quarter of 2016 is the increasing likelihood of a crisis-grade inflection point tipping…

Oil Glut In World's Biggest Market

China's crude oil output sees sharp drop

BEIJING - China's crude oil output fell 9.9 percent year on year in August, the biggest monthly drop since 2003 as refineries slashed production amid sluggish global oil prices, data from the National Bureau of Statistics showed Monday. Imports, on the other hand, have trended upward after private refineries were given permission to import crude last…

Monday, September 19, 2016

Like Canada, And Much Of The Rest Of The World Too, Global Investment Is Divided By An Iron Curtain

Black swans approach for Canadian investors

The polarity in the global discourse on what lies ahead for world markets and the global economy is absolute. The resounding chorus affirming a positive outlook in the United States contrasts sharply against the dire warnings of money managers and bankers in Europe and Asia. Canadian investors are still in a state of shock to some…

Natural Gas (UNG) Breakout

I've followed Natural Gas ETF UNG closely for a long time because if you can get it right, the gains on it are fantastic. Unfortunately, it is fabulously volatile and you can get wiped out very easily. Right now UNG has been making some bullish gains. There's been an ascending support line that was hit twice in August and once more this month which have made up our lower boundaries. Our upper limits have been a resistance line from highs back in July, August and September. Friday, UNG was one of the few equities getting strong bids throughout the day and it convincingly broke out above resistance with a 1.17% gain. In the coming trading sessions we'll be looking for a confirmation of this breakout with another close above the line. The next stop will be around $8.80. Our ultimate target is $13.25 with a stop along the way at around $9.40.

Sunday, September 18, 2016

Agriculture (DBA) Quietly Appearing Bullish

Agricultural ETF DBA has been pummeled since late June but in that time has produced a fantastic looking bullish declining wedge. A new buy signal was produced on Friday which has me looking at other commodities too, now (more on that tomorrow). DBA is bearishly aligned within it's EMA's so caution is urged, a caution which is echoed by it's low volumes, too. Lower highs however have appeared on the RSI(5) creating some divergence with the MACD joining the chorus. I know next week is a critical week for the market with the FOMC on Tuesday but DBA should get a serious look by day traders who can have a long/buy at around $20.40 with tight stops around the EMA (9) or (13).

Saturday, September 17, 2016

Energy Looking Increasingly Bleak

Cracking Crude

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This is mostly a comment cleaner, as you chatty Slopers have racked up about 400 comments from my last post yesterday. My dogs are staring at me, though, eager for their way-too-early-every-morning stroll through the pitch black streets of Palo Alto. Thus, I will share this one chart of crude oil, which has the new front month of November. My view is that breaking 43.59 is the next important event, since that’ll slice us through a trendline that’s been in place the entire year.
0916-crude
As I was typing this, a slew of economic data came in, and early reaction seems to be not-so-thrilled. I certainly hope it sticks, since it’ll mean my prediction of a “second trap” (mentioned in the prior post) will have proved itself prescient.

Friday, September 16, 2016

Streaming: The New Business Model In The Mining Market

Courtesy of: Visual Capitalist

An Appetite For Debt Becoming More Popular Elsewhere In The World, Too

Canada's household debt is now bigger than its GDP, for the first time

OTTAWA - The appetite of Canadians for debt continues to grow to record levels. The ratio of household credit market debt to disposable income climbed to 167.6 per cent between April and June, compared with 165.2 per cent in the first quarter, Statistics Canada said Thursday. That means that households now owe about $1.68 in credit…

Relief Now Doesn't Mean It Won't End Badly

Overhead Supply

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Well, thanks to D.G., the market really screwed the pooch today. However, I think we could be in for a downside surprise tomorrow. Take note of the intraday chart of the Dow Jones Composite. Observe its overhead supply (yellow tint; duh) and the tag of the broken trendline (green circle).
0915-comp
Also look at the ES, which is even more interesting. Same overhead supply, and I’ve circled in red the “trap” from Monday. I put it to you that today’s ridiculous surge (green circle) was the second trap of the week. I hope so, at least. See you Friday morning.
0915-estwo

Thursday, September 15, 2016

Small Bullish Declining Wedges Abound in Financials (XLF), Brazil (EWZ), Emerging Markets (EEM), Europe (VGK), High Yield (HYG) And Others

I'm still sitting on the sidelines with a small position in Natural Gas ETF UNG at the moment, but going through my index funds I began noticing a lot of small declining wedges that have been created over the last five to seven trading sessions. It has shown up best in Financials ETF XLF but has also appeared in the Brazil ETF EWZ, Emerging Markets ETF EEM, Europe ETF VGK, High Yield ETF HYG, Malaysia ETF EWM, Metals and Mining ETF XME, Oil Services ETF OIH, Real Estate ETF IYR, Small Cap ETF IWM, and Technology ETF XTN. I'm not married to all them but some of them do look like great bullish declining wedges.

Brazil: EWZ
Emerging Markets: EEM
Europe: VGK
Financials: XLF
High Yield: HYG
Malaysia: EWM
Metals and Mining: XME
Oil Services: OIH
Real Estate: IYR
Small Cap: IWM
Technology: XLM




 

This Is How The Real Fight Against The Machines Begins

Robots Will Take 6 Percent Of Jobs From Humans In 5 Years: Report

Robots and other artificial intelligence will replace humans for many service industry jobs as some of the world’s technology companies expand their improving research, according to a business consulting firm’s new report. New York-based Forrester Research says six percent of jobs could be filled by “early-stage intelligent agents,” or IAs, by 2021 as tech giants like…

"Slow Growth" Is Not Unique To Just Canada's Growth, But Globally As Well

Bank of Canada deputy warns investors to adapt because slow growth is 'new reality'

OTTAWA - Nearly a decade after the global financial crisis, economists and policymakers of all stripes are still working to avoid another one. Canada's economy could take 15 years to 'reinvent' itself, warns head of Royal Bank of Canada David McKay also says he's concerned about how much current levels of consumer debt and higher debt-servicing…

Tuesday, September 13, 2016

Are The Energy Markets Trying To Say Something (OIH, USO, XLE)?

I continue to stay on the sidelines because, "why?" "Why" would I want to get bogged down in this internecine chopping around? We all know nothing is going to happen until September 20th when we finally get a verdict on interest rates (I don't know how much we can expect before the election, mind you). The energy markets are a perfect reflection of this. They've been caught in consolidation patterns going back to May and June and I'm staying out until we've heard from the Fed.

Oil Services ETF OIH found support at a line from May and August lows and this week I fully expect it to go back to overhead resistance at $29.25.
Crude Oil ETF USO also finds itself in a stout consolidation pattern. I similarly expect it to find overhead resistance after last weeks sell-off.
Energy ETF XLE finds itself in a rising bear wedge but like the other two overhead resistance at $72.00 should be found whereupon we wait the 20th.

At Least Tim And I Agree On One Thing, Consumer Staples (XLP) Is A Bust

Two Forthcoming Shorting Opportunities

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I like ’em both – – the closer they get to the gap, the safer they are as shorts.
0913-xlb
0913-ITB

Monday, September 12, 2016

Tim Knight: Remember I Told Everyone To Wait For The Dust To Settle

That Explains It

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As excited as I was to see the market falling to pieces again on Sunday night, I was somewhat disappointed (although not too surprised) to see strength returning on Monday morning.
0912-bounce

It only took a moment to see what was going on, however.
0912-gart
What terrifies me is that there hasn’t been a single time – – not one – – when the man went bearish and stocks continued lower. This also aligns nicely with the fact that stocks don’t fall in this market any more than One Single Day. So it’s a real pisser, as I’d like to enjoy a sustained downfall once in a blue moon.

In all seriousness, the ES is getting near its supporting trendline, and I fear a bounce to, oh, about 2135 or so may be in the cards. I say again, this stinks, because I love staying short, but between Gartman and the trendline, I may need to lighten up
0912-es

One positive thing I will say, however, is that my highest concentration of shorts remains in energy (which, mercifully, Gartman is mute about for now), so this may have a little more juice to squeeze out.
0912-cr

Clive Maund: Precious Metals Losses Could Get Heavier

PM Sector Downside Target on Market Rout - strategies...


After what happened on Friday many Precious Metals sector investors are naturally concerned about the effect of further heavy losses in the broad market on the sector. Let’s now review Friday’s action, starting with the broad market itself, before moving on to consider the likely impact on the PM sector.

After almost two months of quietly drifting sideways, the ground opened up beneath the broad market on Friday, as we can see on the 6-month chart for the S&P500 index below, it gapped down at the open and plunged by 2.45%, heading ever lower as the day unfolded – there was not even the customary bounce in the last hour of trading. This was predicted on the site back on 1st September when we had correctly identified what kind of pattern was forming, in the article COMPLACENCY RIFE AS VERY DANGEROUS PATTERN COMPLETES IN S&P500, a Dumpling Top, although at that time it was not known what sort of collateral impact this would have on the PM sector. This was a severe and decisive breakdown and there was almost no place to hide – most everything tanked, with the exception of the dollar and some obscure paper of the Czech Republic, I believe. Bonds plunged and yields rose, and it is thought that this may mark, at long last, the start of a rate tightening cycle, necessary to the survival of a number of banks. Of course, the rate rises, should they occur, can only be miniscule, otherwise the entire system will implode. If it does mark the start of a tightening cycle then bonds and stocks are in for a really rough ride.

The decisive breakdown in the stockmarket on Friday probably marks the start of a severe downtrend. How far will it drop? It should drop, in short order, at least to the 2030 – 2040 level, where there is support, and could easily continue lower to the next support level in the 1990 – 2000 area. This latter objective is made more likely by the top pattern also having the attributes of a Tower Top, where the sharp rise out of the June lows to form the left side of the tower is now mirrored by a precipitous decline to complete the right side of the tower. This drop, should it occur, will probably be the curtain raiser on a long and brutal bearmarket, that has been kept at bay for years now by Fed and government meddling.

If such a drop occurs in the broad market in coming weeks what will be the effect on the PM sector? We have already seen the PM sector suffer quite severe collateral damage during yesterday’s mad scramble for the exits. While it doesn’t look all that much on the 1-year chart for GDX shown below, partly because the PM sector is much more volatile, the losses in the PM sector were double the losses in the broad market, not a good sign – while the S&P500 Index fell by nearly 2.5%, the PM sector fell by over 5%. This means that it is reasonable to expect further steep losses in the PM sector if the broad market continues to tank as expected. How far will it drop? – probably to the zone of strong support on the GDX chart in the $21 – $22 zone. While that might not look all that much from the current $26.4, it will involve a good many stocks showing further heavy losses. With this move the correction should end, and here it is important to note that such a drop would not cause any technical damage, since GDX (and PM stock indices) would only be dropping to their rising 200-day moving averages – on the contrary, by rebalancing sentiment and shaking out the weak, it will set it up for the next big upleg. After a big plunge the stockmarket will probably grind lower in a more measured manner, whereupon the PM sector is likely to go contra-cyclical and rally. This correction now appears to be taking the form of a classic 3-wave A-B-C correction as shown on the chart, and the C-wave to the support should mark the end of it.

How should holders of PM stocks handle this correction? Most important of all is realizing first off that it is only a correction, and having an idea of where it is likely to end, as set out here, should help. There are several ways to handle it depending on what type of investor or trader you. One approach is to sell holdings now, assuming the sector doesn’t open heavily down on Monday, with the aim of buying them back when GDX drops into the support zone – this approach risks being left stranded if the sector turns up from here. Another is to sit tight and tough it out, in the knowledge that prices will recover again, once the next major upleg gets started, but perhaps the best approach for those set up to use this strategy, given that we have a good idea of the downside target, is to insulate your positions from loss using Puts. If the Puts are sold for a profit once GDX drops into the support, and the sector subsequently recovers as expected, so that there are no losses in the stocks, the Puts will have provided a windfall profit.

End of update.

Sunday, September 11, 2016

After Friday Let's Wait For The Dust To Settle, But Consumer Staples (XLP) Is Worrying Me

I'd be the first person to be celebrating my short positions after Friday, but to be honest I didn't have any because I'd much rather watch this market from the sidelines than get cleaned out by another "buy-the-dip." I'm also not entirely convinced we are out of the summer-doldrums either so I think we are still vulnerable to market volatility such as was witnessed on Friday with the low volumes that have been generally pervasive of late, but still, after Friday everyone took it on the chin. Losses were quite deep across the board but looking at my charts everything is still firmly inside their ascending channels. The only exception to this is the Consumers Staples ETF XLP which broke down quite convincingly from its long-term bearish ascending wedge. This is not good, particularly as Consumer Staples is a descent barometer of overall market health. I'm not advocating shorting the market at this point because I think it's a bit late, but I want to see first whether this correction has legs first.

Friday's Earth Shattering Increase In VIX: Was It A Sustainable Rise?

Volatility’s Glorious Return

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Today is the biggest down day since Brexit. Good God, it’s been a dry spell, hasn’t it? I have 70 short positions. As of this typing, 68 are profitable. I suspect those other two will be addressed in short order.
0909-vix

Announcement: Partnership with SlopeofHope.com

I am pleased to announce that Danja Zown has been given permission to legally republish articles by Tim Knight of Slope of Hope. Tim Knight has three decades of experience in stock analysis and his articles with their good humor and directness will improve Danja Zown considerably. Our website is aiming to provide more news based content with a focus on geopolitics while continuing to improve our core service of free stock analysis and insight.

Saturday, September 10, 2016

Japan Working Hard Bringing Africa Into It's Sphere Of Influence

Kenya Clinches 20 Deals At Tokyo Conference

KENYA clinched over 20 deals or 27 percent of the 73 deals that will be funded by Japan as part of enhancing co-operation with Africa hardly two weeks ago at the Tokyo International Conference on Africa Development. What this means is that 53 African countries will be jostling for the remaining 53 deals. At the same…

Renminbi Influence Continues To Spread

Australian securities can be held in Chinese currency

SYDNEY - The Australian Securities Exchange (ASX) has launched a new service which allows Australians to hold securities in Chinese currency renminbi. Developed in cooperation with the Bank of China, the service has been available since August 1 through the ASX's subsidiary Austraclear, the entity responsible for the wholesale debt market's securities depository and settlement. Austraclear…

The Changing Landscape Of Canada's Energy Market

A battle brewing in Toronto could decide the future of Canada's natural gas industry

CALGARY – After years of losing market share to U.S. competitors, Canadian natural gas producers and one pipeline company are looking for a way to fight back and regain their traditional market of Toronto, the country's biggest consumer for residential power and heat. The battle to sell natural gas into Toronto and the surrounding area pits…

Thursday, September 08, 2016

Warning To Britain From The Most Unsuspecting Of Countries

Why the U.K. Must Take Japan's Brexit Warning Seriously

Japan’s warning that its companies may move their operations outside the U.K. if it fails to negotiate favourable Brexit terms is the first major sign of how leaving the EU could affect foreign investment into Britain. Chief among Japan’s concerns is whether or not…

Gold Keeps Glittering Ahead of Fed's September Meeting

Gold price to reach new heights on increased global stimulus, negative rates

Gold's rebound from three month lows this week demonstrates the increased disdain for sovereign debt that charges lenders a fee instead of the other way around. That, combined with the prospect of further stimulus, which in reality is just the fabrication of more cash and credit from thin air for the exclusive benefit of the world's…

So Everything Must Be Great In China, Right?

China's August exports up 5.9%, imports up 10.8%

BEIJING - China's exports in yuan-denominated terms rose 5.9 percent year on year in August, while imports increased 10.8 percent, customs data showed on Thursday. That led to a monthly trade surplus of 346 billion yuan ($51.9 billion), down 5.1 percent from…

Wednesday, September 07, 2016

Heterogenity And The U.S. Energy Market

Courtesy of: Visual Capitalist

And Yet We Are Surprised It Could Get Worse

Drilling activity to fall further than expected as oil prices continue to languish

CALGARY - Drilling activity in the oilfield has slowed to the point that 2016 will be the worst year on record for the oil and gas industry, the Canadian Association of Oilwell Drilling Contractors said Wednesday in a revised activity forecast. The CAODC's updated forecast for the fourth quarter of this year shows a 25 per…

Monday, September 05, 2016

You Know What's Wong With Modern Society?


Decreased Global Trade Lowers Suez Revenue

Suez Canal Revenues Decreased By 1.9 Pct During First Seven Months of 2016

Egypt's Suez Canal made revenues decreased from January through July by 1.9 per cent compared to the same period last year, reported state-run MENA news agency. Revenues reached $2.919 billion during the first seven months of 2016, down from $2.977 billion during the same period in 2015, according to previous statistics from the Suez Canal Authority.…

Telecommunications (IYZ): Give Me Something....Anything....Please I'm Dying Here

I often find myself day-dreaming about what I'm doing with my life and how nothing much seems to be going anywhere in this market. I was supposed to be more successful by now, this year was going to be different. I was supposed to be more secure in the knowledge of what I was doing and things were going great until about March and now I've reconciled myself to the fact that this will be a "down" year for me. Then I remember I'm also a Doctor and everything in Medicine is going great, except I suppose the balance in my life seems to be that while Medicine is great I guess the Stock Market isn't and it's here that I am suffering.

Emotions aside, and I do have many of them regardless of what patrician Anglo-Saxon facade outwardly shows, Telecommunications ETF (IYZ) made a major move today. I made a sell/short signal a few weeks back when the EMA's crossed downwards and drew in a declining channel but made a cautious buy signal about a week and half ago. Today a much stronger signal appeared with many of my momentum signal lines being broken upwards. Today we came up to the resistance line for this channel with our EMA(5) crossing over the EMA(9) and not trailing to far behind the EMA(13).
I don't think much is going to happen in the market this month as we have be warned about a possible rate hike which may come as soon as September 20th when the Fed meets again. Personally, I think there's a lot of political pressure to keep rate hikes off until after the election, but then again we have been surprised before.

Sunday, September 04, 2016

This Is Going To Be A Little Awkward For The Longtime U.S.-Canada Bromance

Canada applies to join China-backed AIIB, latest U.S. ally to apply

BEIJING, Aug 31 - Canada will apply to join the China-backed Asian Infrastructure Investment Bank, or AIIB, Canadian and bank officials said on Wednesday, making it the latest ally of the United States to join the new international development bank. The multilateral institution, seen as a rival to the Western-dominated World Bank and Asian Development Bank,…

Where Too Next In The Drive For Resource Diversification?

After lithium, is cobalt the next boom?

Cruz Capital Corp. (CVE:CUZ) (OTCMKTS:BKTPF) (FRA:BRO2) CEO James Nelson had a feeling that, while the world is very focused on lithium, there was another ingredient in lithium-ion batteries that was going to suffer from a shortage of supply just as demand exploded. That ingredient is cobalt. Cobalt is a hard, shiny and grey metal that has…

Saturday, September 03, 2016

Knives Are Out For Precious Metals Already

Well-known short seller targets First Majestic Silver Corp

Canadian miner First Majestic Silver Corp. has become the target of well-known short seller Kerrisdale Capital Management. The hedge fund, founded by its chief investment officer, Vancouver-raised Sahm Adrangi, called the stock "absurdly overvalued" in a new report released on Thursday. First Majestic, a Mexico-focused silver miner, has seen its shares climb nearly 250 per cent…

The OPEC Oil Freeze: I Think We've Been Here Before

Oil production freeze speculation increases

A freeze of oil output by major producers is looking more likely as Saudi Arabia signals a change in approach. Members of the Organization of the Petroleum Exporting Countries are due to meet informally in Algeria at the end of September, along with Russia. They are expected to try to revive a global output deal stabilising…

There's More Than One Way To Get High Baby!!


Courtesy of: Visual Capitalist

Friday, September 02, 2016

The Canadian Oil Sands, Reinvented

Solvents to the rescue: How chemistry can save the oilsands industry

CALGARY – From nuclear bombs to radio waves, to a combustible "fire flooding" idea, scientists have tried, with some successes and many failures, to develop new and improved ways to pull oil from the oilsands since the 1970s. Researchers have abandoned the most explosive oilsands extraction ideas but major companies are increasingly confident in one new…