Thoughts on Markets

Thursday, January 07, 2010

Monk says, "It's a jungle out there." - One map thru it

From a technical perspective BYD Company is not looking good. However, the fundamentals of this company are quite good. They manufacture batteries for the products of many good companies and have what is reported to be the best batteries on the basis of lasting power on the market today. They may be having some financing struggle in moving forward into electric auto manufacturing on a larger scale. I am not selling this stock now, but I wanted you to see some of the technical negatives in the graph.

Here is the danger in using close stops in on stocks. I was using a 3% stop and sold DROOY at about 7.57 on a temporary dip. However, one should not be discouraged as long as the trade was profitable. That is the reason for using stops - PROTECT THE PROFIT. In these markets it is best not to sell all a good miner until we reach the 3rd. wave. I always try to hang onto a large part of my original holding. Too often, I have been stopped out and then left in the dust as the price moved onward and upward. That is discouraging, but part of the interesting and exciting game of investing. I have, as mentioned yesterday, sold all of my VGZ, because it was very discouraging. I still like DROOY and am holding a good percentage on my original holding in it.

The boyz main target seemed to be silver Tuesday they capped about 17.80; Wednesday about 18.35, and again about 18.35 today. However silver and gold are trading in a nice higher range than recently. Silver is currently up just a tad and gold is down a bit.




From Uncommon Wisdom: See the charts in the video update HERE. This in an informative look at precious metals, dollar, markets, and oil. It is a good overview.

From the Daily Pfennig: "Well... PIMCO, the largest bond fund in the world, earlier this week announced that they were reducing their exposure to U.S. debt... Yesterday, Bill Gross, of PIMCO, was on the TV here, talking about U.S. Treasuries, and how he would rather buy a German bund (treasury) than a U.S. Treasury, for the Fed is still implementing quantitative easing, and the ECB has begun to shrink their balance sheet... Two completely different directions for these two Central Banks...

I'm telling you this now, so you can listen to me later... Treasury yields are going to rise in 2010, causing huge losses for holders of existing Treasuries... Are you still holding them?

The Fed's last FOMC meeting minutes were printed yesterday afternoon... Seems there was some debate on the subject of asset purchases... Some wanted to boost or extend security purchases, while one Fed Head sought a reduction of the asset purchases... And... Apparently we have some Pfennig readers among the Fed Heads, as a few of them expressed their concern that the Fed's "extraordinary stimulus" is presenting "risks"... (that's central bank parlance for inflation!)"

So not only the foreign banks and Federal Reserve may be slowing their Treasury purchases, but now PIMCO is too. Where will the Treasuries be sold? That a is a looming possibility.

More from the Daily Pfennig: "Then there was this... OK... Remember last year, when I tried to make a case on CNBC about the Plunge Protection Team (PPT) and I was ambushed? Mocked? Made fun of? Well... Yesterday, I saw a story on MarketWatch about a trader that believes the PPT is responsible for the stock market's rise in 2009... Let's listen in on a snippet of the story...

"The source of approximately $600 billion net new cash necessary to lift the market's overall capitalization by $6 trillion last year could not be identified by TrimTabs, Charles Biderman founder and chief executive of Trim Tabs, said. The money, he said, didn't come from traditional players such as companies, retail investors, foreign investors, hedge funds or pension funds.

We know that the U.S. government has spent hundreds of billions of dollars to support the auto industry, the housing market, and the banks and brokers. Why not support the stock market as well?""

More evidence of intervention in our markets. Remember, we have no free markets only intervention as has been mentioned several times here.

From CommoditiesOnline.com:

Gold may gain 35% in 2010: Jeffrey Nichols

NEW YORK (Commodity Online): Investors can expect a gold bull market in 2010 while silver could outperform gold as was the case in 2009, according to Jeffrey Nichols, Senior Economic Advisor to Rosland Capital.

"Gold rallied sharply on the first trading day of 2010 - in part, mirroring a weaker U.S. dollar but also reflecting reestablishment of long positions by some funds and speculators who, despite their bullish view of the market, sold metal in December to realize profits earned from last year's price surge." Read it HERE.

From Ed Steer's Gold and Silver Daily:
This is a very informative graph from the Washington Post. It enlightens those who believe that unemployment is no problem.

A problem which may be faced in a number of smaller countries soon from Radio Netherlands Worldwide:

New episode in Icesave saga

The Dutch government has reacted angrily to a decision by Iceland's president not to sign a bill enabling repayment of lost deposits to Dutch and British savings account holders. "We're extremely disappointed," Dutch Finance Minister Wouter Bos told the press. He added that postponing a solution for the lost deposits would be unacceptable, and has demanded an explanation from the Reykjavik government.

The aim of the deal was to repay 3.8 billion euros to the Dutch and British governments, which had helped out depositors who lost their money when the Icelandic banking system collapsed in October 2008. Many Dutch savers had been lured by banks in the mid-Atlantic country offering above-average interest rates on an internet-based savings account. The Icesave internet bank was run by Icelands's ill-fated Landsbanki. Read it HERE.

From YahooFinance:

US Dollar Ready to get Clobbered

Read it HERE. There are a lot of good statistics long and short positions of commercial banks in the various markets including the dollar, silver, and gold. The statistics are clear and easily picked out in a few seconds.

Miners from Scottrade.com:

Currencies from Kitco.com:
BYDDF 8.50; FVITF 2.334; Silver 18.32 on up tick; Gold 1131.30 on down tick, and DOW +4.23 to 10578.74. DOW had been down earlier, but has moved up just a tad. This could be impacting the miners, as well.

The first week of 2010 has been interesting. The dollar is expected to rise some during the first quarter to maybe half year and the metals were expected to dip further ( What a buying opportunity that would present to us. Keep your powder dry for that potential! ) The Brazilian Real looks to be the strongest currency for 2010 if they go ahead and raise interest rates as many believe they will. Those of you who are in the Everbank BRIC currency CDs should profit from those moves if they are realized. By the way, Everbank World Markets is not planning to offer 3 and 6 month BRIC CDs with a minimum of $10,000 investment. You might want to check them out.

I attempt to let you know what I see in markets and what I am doing in them. Believe me, it is a jungle out there and one cannot be too careful. Caution is the watchword. It is dangerous. Detective Adrian Monk as said, "It a jungle out there." He was correct, but he was always somewhat hesitant about venturing out. We are told in scripture that the unbeliever fears there is a lion lurking about to kill him, so he does nothing. The believer on the other hand is bold as a lion and welcome challenge knowing that His faith is in the sovereign King Jesus who rules all the rulers of the world and everything thing that happens. We can rest with absolute confidence in all His ways. But there is only one way to discover His ways and that is through a diligent study of His infallible will under the guidance and power of the Holy Spirit. Do not neglect daily study of the saving word of God. Then make your own decisions on every area of life in accordance to what He teaches you from that word.

Best to each, Doug

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