Tag: gold
Morning Rage 10.3.2012
Metals are all gaining before the market opens. Gold futures are up two and three quarters, silver even, and platinum up a point and a third. Corn is down almost six points, but historically, October is a strong month for corn and soybeans. Soybeans start the morning even.
Family Dollar Store will be announcing its quarterly earnings this monring. The stsock is already up a dollar-eighty in pre-market trading at $67.56. Although FDO has been missing earnings, the company has experiencing high growth in floor space by building new stores.
The EIA Petroleum Status Report, which determies the price for petrolium products and reflects the supply and demand, will be released at 10:30am EST. ADP emoployment report that came out this morning beat estimates by 22,000 which could explain the push higher for futures this morning.
Bearded Ben's Fake Rally 9.20.12
It can be argued that the Federal Reserve is the most powerful institution on the face of the earth. America is the center of world economy…especially as bond bears squeeze Europe and China slows with delinquent loans rising by nearly 333% since the end of 2011 all while their repressed population is starting to speak up.
The E-mini S&P 500 Index Future has had an average true range (ATR) of 13 points over the last 14 days; this is compared to nearly 25 points over the past year. Consequently, the volatility index is low too. The CBOE’s VIX, a measure of implied volatility in the SPX, is down 40% year-to-date as a result of the small ranges that have slowly become a reality. While on the topic of options, the SPX currently has an implied one-sigma move of up or down $46 with 28 days to go in the October options. This is against, during this time last year, the October standard deviation was up or down about $99. This was however during the USA debt downgrade fiasco and debt ceiling, but the market came to the conclusion that America would still be a staple in the investment world, for rates actually proceeded to fall, proving the downgrade wrong in the short and medium term. The low ATR, VIX, and implied move in the SPX could all be a direct result of the Fed manipulating the market with their various programs not allowing for true capitalist price discovery to occur in the free market.
This contraction in volatility and price action has become a reality since the Federal Reserve started to communicate their intentions to further stimulate the economy via additional quantitative easing. More specifically, The Federal Reserve said it will expand its holdings of long-term securities with open-ended purchases of $40 billion of mortgage debt a month in a third round of quantitative easing as it seeks to boost growth and reduce unemployment; while keeping an eye on inflation, and while still undergoing operation twist…swapping out shorter term maturities for longer term (increasing the duration of the portfolio). “The Committee also anticipates that inflation over the medium term likely would run at or below its 2 percent objective.” To the contrary the implied inflation rate is currently (as measured by the 10 year less the 10 year TIPS) 2.50%. Perhaps the committee does not look at market prices, for they believe that they are the market.
The Fed in general has come into question. The dual mandate has been dropped by other developed areas and countries including Canada, the European Central Bank, the Bank of England, and the Bundesbank. This should all be questioned for the “wealth effect” has caused a fool’s rally, real income to fall, and confidence in policy makers to fall. The only way to fight the inflationary “Bernanke Put” is to buy gold and silver calls.
E-mail the author with any comments or inquiry…
Data courtesy of Thinkorswim
Morning Rage 9.17.2012
I expect the performance of US indices this week to have a more honest QE3 reaction after exploding upward last week. Indices futures for the Dow, S&P, and Nasdaq are all down 21.00, 3.25 and 4.25 points respectively. Metals futures are all down slightly before the market opens with Platinum and Palladium losing the most, 16.10 and 11.70 respectively. Crude futures are down 0.20%.
One of my favorite ETFs to follow in the aftermath of QE3 announcements is SPDR Gold Trust (GLD | $171.8). GLD is down $0.35 in after hours trading after taking a $0.49 gain on Friday. The Oct ATM straddle is priced around $7.00 about a 4% expected move. After the QE3 announcement, a higher probability of currency manipulations around the world will have investors continue to invest in gold.
Apple stock (AAPL | $691.28) is up 2.68 points in pre-market trading to $693.99. Apple set a presale order record with the new iPhone 5. I expect the stock will jump over $700 before the end of the month but, due to the volatility over the past week or so, it may jump back and forth over the $700 line.
Google stock (GOOG | 709.68) was up three and a half points on Friday, only slightly short of its all time high. The stock has hit a resistance point below $715.00.
Alex Kalish has a master’s in economics from Suffolk U.
Questions, comments and suggestions welcome: alexk@keeneonthemarket.com
Halftime Report 9.13.2012
Oil and Gold are both up 6.00 and 0.68, to 1,778 and 98.99 respectively. Platinum futures are up 31.80 and are quickly catching gold. The EUR/USD exchange rate gained 1.13% up a penny and a half to 1.3136 euros per dollar. Strangely, the US dollar is gaining value against the Japanese Yen, up about $0.77.
Analogic Corporation (ALOG + 13.67%) is a technology company that designs and manufactures advanced medical imaging and security systems. ALOG hit a new high today of 78.73, up about 9.50 points. Shares exploded today after its quarterly results and guidance topped expectations. Analysts expected a EPS of $0.71, a surprised of $0.25 per share as earnings were $0.96.
Bank of America (BAC | + 1.60%) had a second day of huge volume. The stock has been downgraded by at least 5 analysts, yet it continues to creep higher. 226.6 million shares were traded today already.
Google Inc. (GOOG| +$6.16) jumped up almost 6 points in the first half to 712.20. Google has been extremely volatile this week. On Wednesday it was down around 685.00 and gained almost 18.00 points yesterday.
Apple Inc. (AAPL | 1.99%) is up an astounding 13.61 points. Sitting at 696.56, AAPL has hit a new high, again. The iPhone 5 pre-orders were sold out within an hour this morning which may have drove all of the bears away from the stock, after some questioned the value of upgrading.
US economic news released today includes the CPI, retail sales, and industrial production. All reports are released on a monthly basis. Production is down 1.2% overall, with manufacturing losing 0.7%. Retail sales grew 0.9% beating last months 0.8% growth. Finally, CPI grew by 0.6%. Food and Energy prices accounted for 0.5% of this months change, however, year-over-year change in CPI were all energy and food at 1.7%.
Alex Kalish has a master’s degree in economics from Suffolk University.
Questions, comments, and suggestions are welcome: alexk@keeneonthemarket.com.
Morning Rage 9.14.2012
Fed’s current strategy of buying long-term securities and selling short-term is ineffective. Further policy accommodation is warranted, and the fed will expand purchases of securities while extending the current federal funds rate and:
- The Fed will purchase 40 billion dollars a month of mortgage backed securities, which will be in an increase in holdings of long term securities of about 85 billion dollars a month till 2013
- The goal is to increase downward pressure on mortgage rates and long term rates in general, providing support to the housing sector by encouraging home purchases and refinancing
- If the Fed does not see improvements in economic and financial developments in the upcoming months they will continue purchasing MBS as well as additional asset purchases as appropriate, called unlimited quantitative easing
- The Fed will continue to control prices but is focused on unemployment
- Policy will continue passed recovery, to provide assurance to households and businesses, the target rates are 0% to 0.25% through mid-2015
- Projecting unemployment rates of 6.0 – 6.8 by 4th quarter 2015
- Projected inflation of 2% a year
- Fed earnings are remitted to the treasury and will help reduce federal deficit and debt
With that news, the DOW was up 206.51, 1.55%, to 13,539.86, S&P up 23.43 or 1.63% to 1,459.99. Overnight, Dow and S&P futures gained 63.00 points and 7.25 points respectively. Crude oil futures are up 1.79% to 100.07. Yesterday before the announcement, our trade pick at KOTM was to purchase a call fly on GLD, a Gold ETF. After the 12 pm announcement, GLD rose 3.41 points, a 2.03% gain, and continued to gain points overnight up another 0.44 points. As the policies around the world try to keep up with the Fed announcement, investors will be looking for stable currency. I am expecting buyers to continue pushing Gold prices up, and GLD to move up into a range of 174.00 to 178.00 and higher by 2013.
What happens if Fed policy fails? Bernanke explicitly stated that the Fed will continue its easing until employment gets better, with no real time frame. At some point, if unemployment and GDP are not improving, uncertainty about whether or not the Fed can effectively change the economy will make for a strong bear market. Don’t lose sight of the Fed’s progress over the next twelve months.
Alex Kalish has a master’s in economics from Suffolk University.
Comments, suggestions, and questions welcome: alexk@keeneonthemarket.com.
All That Glitters… 9.11.2012
Whether or not the Fed announces QE3 or not they will continue to ease as they have been for years now so the announcement really doesn’t matter a whole lot unless they announce a huge new program.
….Is Gold
Regardless of what the Fed announces Gold is going to go higher. It will go a lot higher eventually. There may be some bumps in the road, some pullbacks, but eventually gold will be a lot higher than it is today.
I don’t know if it will be next month, next year, or in five years, but the world’s current monetary policy will send gold to at least $3000 an ounce. It would not surprise me in the least to see $5000 gold at some point in the next ten years.
Why Gold?
There are several reasons why gold will continue to go up but the main reason is the global debt fascination.
United States
The United States is in debt up to our eyeballs. The debt is somewhere currently around sixteen trillion dollars. If you take into account the unfunded liabilities of social programs it is estimated to be anywhere from seventy to one hundred trillion dollars.
There is no political will to address the funding of future social promises. One side will never agree to raise taxes and the other will never agree to cutting benefits. We will remain at a stalemate until it is too late.
Europe
As our economy flounders for the next couple decades because of all our debt, the government will continue to print money in order to “stimulate” the economy. This is what they call monetizing the debt. We will print money to pay off our debts.
Europe is just in the beginning stages of monetizing their debt. The European Union is a disorganized mess so it is taking them a few years longer than it did the United States to all come together and agree to print their way out of their financial mess.
Portugal, Ireland, Greece, Spain, Italy, and the list goes on. It will only be a matter of time before France and Germany’s economies are affected. Some of those countries have over twenty percent unemployment. Europe will continue to go down the path of bond buying programs in order to prop up the unstable countries.
Gold Will Shine
In the end gold will be where it’s at. In order to protect your purchasing power you will need to own gold in some form or fashion whether it be through gold coins or shares in mining companies.
I’ve owned physical gold since the $800’s and don’t plan on selling it anytime soon. I also own plenty of gold and silver mining companies.
Shares in the miners have risks not associated with the gold market such as labor issues, input costs, and poor management. Right now I would say the best way to accumulate gold is through the ownership of gold coins or bars either in your physical possession or through a company with allocated storage.
Get it now before it is too late. These folks are going to print our way into a deeper mess someday.
-Ben Hoben
Market Recap 9.7.2012
The biggest movers today were on earnings; Lululemon Athletica Inc. and Smith & Wesson Holdings Corp. Both beat analysts projections and gained over 10% on their stock prices.
Lululemon (LULU) reported a net revenue increase of 33% to $282.6 million from $212.3 million in the second quarter fiscal 2011. Gross profit for the quarter increased 28% to 155.8 million and made up 55.1% of net revenue.
Pandora (P) stock was crushed today on an announcement from Apple, Inc. (AAPL), stating plans to develop a competing internet radio product. Apple has been aggressively competing with other companies who have their service on Apple products, like Google Maps. P was down over 16% today ending at $10.47.
Monday, the Bureau of Economic Analysis (BEA) will release its monthly report on international trade. The current global marketplace has been weak; Some of the stronger european economies have begun to struggle and China’s manufacturing has been shrinking for months now. The report on monday is composed of goods and services that are exported and imported into the US, calculating the balance between the two values. The report will primarily affect currencies.
Halftime Report 9.7.2012
Both the Dow and NASDAQ fell below its opening price today by 11:00 am, but the S&P 500 stands alone ahead 0.30% for the day sitting at 1,436.52. US indices futures have stayed put as well. Metals futures gained substantial points today with gold, silver and copper up 1.99%, 3.02% and 3.57% respectively. Silver is sitting just below its high of the day at 33.67 and a high of 33.74. Copper is right below its daily high at 3.6425 with a high of 3.6525. Natural Gas just moved away from its low of the day at 2.6740 with a low of 2.6660, down 3.67%.
The Cooper Companies, Inc. (COO | 93.33) hit a new all time high today gaining 7.32 when the market opened to sit around 93. The gain is representative of the company’s third quarter growth in income of almost 50% from last year. Analyst expected earnings at $1.29 per share but the company outperformed with earnings of $1.36 per share.
Facebook (FB | 19.11) has shown three straight days of growth up almost 2 dollars from its new 52 week low on Tuesday. How long can Zuckerberg’s statement keep Facebook from continuing it’s slope downward? The 52-week at-the-money implied volatility has touched its low today. Put/call sentiment is bullish and the stock might just continue its slow climb up next week.
Morning Rage 8.31.2012
Dow futures have been volatile for the past 24 hours. Yesterday, before opening, the Dow saw a 42 point dip to 13042 and followed the same trend after open, breaking below the 13,000 mark for a two week low. The losses followed reports of stagnant jobless claims in the U.S. and Germany.
Crude Oil futures (95.21 [+0.5]) up about one half of a point overnight, while Gold futures (1661.80 [+3.8]) gained about four points.
OmniVision Technologies (OVTI | 17.33 [+8.93%]) traded 1.4 million shares overnight, gaining a point and a half. Earnings were weak but beat expectations. OVTI relies on the implementation of cameras in new technology, for their image recognition chips. OVTI supplies it’s chips to Apple for iPhones and iPads.
Splunk Inc. (SPLK | 35.25 [+4.75]) jumped 15.57% last night reaching a prices it last hit at the end of May. Splunk Inc.’s software collects indexes data with heterogeneous formats and enables users to analyze the data real time. The source of the gain is an announcement by SPLK that fiscal year 2012 revenue estimates are being raised as third quarter revenues were $45-$47 million.
Alex Kalish has a masters in economics from Suffolk University.