Thoughts on Markets

Monday, July 12, 2010

Federal Government vs. Texas - Precious Metals Down - DOW drifting

Both gold and silver have been hit at the same time this morning. That is suspicious. Nevertheless, it puts both in reasonable buying range. The prices may go lower, but I like both at almost any price and try to accumulate ounces over time. I expect to see lower prices before too long.

 From the Washington Post:

Obama's debt commission warns of fiscal 'cancer'

By Dan Balz
Washington Post Staff Writer
Monday, July 12, 2010

BOSTON -- The co-chairmen of President Obama's debt and deficit commission offered an ominous assessment of the nation's fiscal future here Sunday, calling current budgetary trends a cancer "that will destroy the country from within" unless checked by tough action in Washington. Nothing new, but spoken from "by an insider" HERE.


Washington Targets Texas, Usurping State’s Rights

By Representative Ken Paxton

Texas Insider Report: McKINNEY, Texas – While the American public has become accustomed to Congress adding unrelated riders & pork to Federal Spending Bills, Texans may be surprised to learn that certain Congressional Members specifically targeted Texas last week, making particular demands on our State while simultaneously circumventing Texas’ State’s Rights for funding public education.
Last week, the United States House of Representatives passed the Supplemental Appropriations Bill H.R. 4899 … with amendments.
Through amendment, Congress is trying to bypass our State’s authority for setting our own education standards by offering money directly to school districts to hire additional employees.  Simply more intervention by the Feds into the authority of states. We must stand against such actions. Of course, I am not in favor of government schools and stand strongly for home schooling by Christian parents with sound Christian schools a second choice. But Hey, we do not want the Feds to be overrunning the states. The reverse is always better.  HERE.


Copper outlook - diminishing surpluses and new uses ahead

John Chadwick looks at the global copper market, reckoned to be in surplus over the next two years, and some of the new and growing uses for the metal

According to the International Copper Study Group (ICSG) data, the refined copper market balance for 2010 could show a surplus of about 580,000 t as growth in copper supply is expected to exceed projected weak growth in industrial copper demand. "For 2011, a smaller surplus of around 240,000 t is anticipated as increased economic activity is expected to boost demand in copper end-use markets. While actual industrial demand in 2010 is expected to increase in all of the major consuming regions, copper market offtake is expected to decline slightly from the 2009 level owing to lower apparent Chinese demand. In 2009, China´s apparent consumption increased by 38%, significantly exceeding the estimated growth in China´s semi-manufacture production. It is believed that substitution of refined copper for direct melt scrap and the accumulation of unreported refined copper inventories accounted for the difference in apparent consumption growth and semi-manufacture growth. As goes Dr. Copper, so go the markets. HERE.


Gold - hedge against catastrophe - Stansberry

Buy gold as a hedge against catastrophe and gold stocks when they're cheap compared to the price of bullion. Interview with The Gold Report.

 The Gold Report: In late June, the markets dropped on the news of China downgrading the European debt. The European Central Bank (ECB) loans came due a couple of days later. The U.S. has experienced another dramatic decrease in consumer confidence, and the unemployment picture isn't much better. What is happening in the marketplace?

Porter Stansberry: The largest economic bloc in the world having difficulty getting access to additional credit implies a really big slowdown in global GDP. I don't think many people realize that the European Union is actually the largest economic bloc in the world, but people are waking up to the fact that Europe's troubles are not going away. More and more creditors around the world-China being the latest one-are waking up to the fact that loaning more money to Greece, Spain, Italy, Portugal and Ireland isn't going to solve any of their problems. The paper bailouts that the ECB has orchestrated over the last year are not solving the problem. Extending maturities and terms of debt to a bankrupt country doesn't make it solvent. It merely postpones the day of reckoning.

TGR: But we do see those countries taking massive austerity measures. In fact, a big conversation at the G-20 in Toronto focused on the contrast between this movement in Europe and Obama's desire to continue stimulus tactics. Are we in a situation where we'll see competing powerful economic approaches to the debt issue? See the entire interview HERE.


Congress Stalled As 2 Million Lose Jobless Benefits  
by David Wilna
Click > H


Two Bad Investments: Stocks, Bonds
By Gary North

The public has been told that the way to wealth is investing. The way to invest, Ph.D. economists tell the public, is to allocate your portfolio between stocks and bonds. Which stocks? An index of American stocks, preferably the S&P 500. Buy a no-load fund. Same with bonds: a mix of mid-term and long-term AAA-rated corporate and Treasury bonds.

Don't try to beat the index, modern portfolio theory warns us. Buy and hold. All will be well.

For fund managers, yes. For investors, no. Read it HERE


Momentum Book Update: Trend Indicators Still Pointing Negative

Rough market. Staying small and extremely agile continues to be of utmost importance. It’s been almost three full months since more than 25% of my capital was allocated on either side of this market. In that time I’ve lost about 1% of absolute return. For a market down more than 15% from the top, I’ll take it.
I began building short positions on Friday afternoon. I will continue to build shorts up to the declining 50 day moving average. I believe we test 1040 SPX at least one more time. If we cut through it hard we could see a quick capitulation move. If we bounce hard, consolidate for a week or two at higher levels, and see some institutional participation, this market could rip. For now I will play the short side as we still have all of the trend indicators pointing negative.  Read it HERE.


ETF Rewind: S&P 500's Best Performance of the Year (So Far)

The market finally got its reversal, repairing most of the prior week's damage, leaving the S&P 500 (SPY) higher by +5.1% for the best weekly performance of the year. However, we are now just as short-term overbought as we were recently oversold, and only earnings will tell where we go from here. Nice chart and read HERE.


Your Single Best Defense!

Precious and base metals are not only critically strategic commodities — but what’s happening in those markets are also blatant signs of what may well be the most urgent financial AND strategic dilemma of our time:

The threat to the cornerstone of our nation, the massive financial and debt crisis and their impact on the value of the U.S. dollar, and hence, your wealth.

So today I am going to review with you why I believe the precious and base metals sectors are critically important to your portfolio.

I will demonstrate for you that the single best defense you can take for your portfolio is to go on the offense — to use precious and base metals investments to protect your wealth from the ravages of a falling dollar and to capitalize on a myriad of wealth-building opportunities. This is a reasonable approach for many investors who do not follow the markets very closely. Read it HERE.


Monday's Analytical Charts for Gold, Silver and Platinum 

Good graphs HERE

Miners from Scottrade: (All off today)

Currencies from

 Some prices: FVITF 1.9561; TBT 36.5601; TLT 99.80; GDX 50.01; GDXJ 26.30; Gold of 10.90 at 1200.50; Silver off 0.20 to 17.91; DOW off 20 at 10178.

Market up, market down. Lots of volatility. The general market may be getting tired again, as it still seems to be only another bear rally. The market should reveal a lot of information to us this week. Notice that gold has corrected in all major currencies. \

By the way, the Daily Pfennig reported that central banks have moved to replace a small amount of dollars with the Canadian Dollar which has been performing well and is based upon a commodities economy. The Australian dollar has also shown some strength. 

All is in the hands of our Lord and Savior King Jesus who rules today. Let us turn back to Him and live the Christian world and life way. All must obey Him for life. Those who choose not to do so are choosing death. Beware the word of God does not return void. It accomplishes all it is presented to do. The sole that sins will die without the grace of God. Seek Him while He may be found. In the end, every knee will bow to King Jesus, but for the lost, it will be too late.

Best to each, Doug



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