The Basel Committee on banking supervision watered down bank liquidity rules and as a result European banks rallied on the news. Banks like DB and Credit Agricole rallied 3% across the pond overnight. This action many bring some tailwinds to Chicago and New York as we open today, financials will naturally be on many watch lists considering the former.

BlackRock Inc. is a leading independent investment management firm. BLK provides clients with a variety of investment and risk management services, similar to GS, MS, and CS. BLK generates revenues from client business. Clients range from pension funds to non-for-profits. These services include investing in equities, fixed income, and other assets. Products that retail traders may be familiar with are managed by BLK too. iShares exchange-traded funds (ETFs) and other exchange-traded products ( ETPs) are popular among trading community.

BLK is one of the best performing financial stocks. BLK is only down a mere 12% from its all time high (ATH). Stocks like GS and WFC are still down 46% and 21% respectively from their ATH. BLK, according to the chart below, may have broken out.

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Author

salernoma@mx.lakeforest.edu

The trend channel is also a nice tool to use as a reference point. Price action in July of 2011 was the start of this huge bull-run. Depending on how your trend lines are drawn, Visa has respected the upper and lower bounds many of times. Days of note have a white oval. These days have the same or a similar pattern to what was presented yesterday. For the most part, each of these situations resulted in lower prices in the short term.

It is also interesting to note that yesterday’s volume was 30% above the 50-day average volume. Additionally, on balance volume failed to confirm a new ATH too. A target could be the middle of the bull channel displayed below, perhaps about $150 in the short term. Next week’s weekly options in combination with the regular January monthly options are pricing the $150 put calendar at $0.34, if one was inclined to get bearish next week. Other ‘options’ include buying put verticals or anything with negative deltas.

Feel free to e-mail any comments, feedback, suggestions, or general inquiries to…

Author

salernoma@mx.lakeforest.edu

At the December meeting, the FOMC announced Treasury purchases of $45 billion a month in addition to $40 billion a month of mortgage-debt purchases, which began last September.  Cash silver fell nearly 2.5 percent to $29.42 an ounce, the lowest price since August 22, and was at $29.78.  The drop in prices for the two metals has created an attractive buying opportunity.  Despite the fact that both metals are cheaper, silver may offer a greater reward than gold in 2013.  The price ratio of silver to gold is one piece of evidence suggesting that silver prices are undervalued.  The current price ratio is 55:1, which at one time was as low as 16:1.  The availability ratio of physical silver to gold is approximately 3:1, however, investors are typically buying more silver due to the its cheaper price.  This is why silver prices may be dramatically undervalued.  The table below shows the price ratio of silver to gold over the past four years.  According to reports from Gold Bullion and Wealth Management Company, bullion dealers throughout the world have reported strong demand for silver and a shift in Asian and Middle Eastern markets from gold to silver.  The increased demand for silver is the result of it being undervalued and relatively cheap compared to gold.  The CPI-adjusted silver price suggests that silver should be trading at $122 per ounce.

Table provided by: U.S. Mint

Author: Tyler Sciortino

Current Student at Roosevelt University, Majoring in Finance.

Contact for questions or inquiries at tsciortino@mail.roosevelt.edu