Daily Updates

Two significant changes are pushing markets towards a shakeout.

First, the bond markets are showing strains. For instance, both investment-grade and junk-rated companies are finding it more difficult to issue bonds. To put this in today’s context, the momentum money that has pushed asset prices up since the spring of 2009 assumes, or believes, that governments will do whatever is necessary to sustain the upward march. Now there are doubts.

…..read more HERE

 

U.S. Stock Market and Gold Update

Posted by Peter Grandich - Grandich.com

on Friday, 11 June 2010 14:24

9:00AM EST Friday June 11th

U.S. Stock Market – I have said on several occasions you can’t count out the “Happy” people until at least two closes below 1,040 on the S & P 500. I previously noted that the first test would hold, be followed by a bounce, and then we would have to measure the retest and any bounce after that (we’re there now).
spx

I believe the S & P 500 has now set us up for either a very good buy or sell signal. If the index can rally above its 200-Day MA and close above 1,110, I think we could see a summer rally that could set up a right shoulder to a significant Head and Shoulders top formation. And if we reverse here and get two closes below 1,040, the final nail in the coffin will have been hammered. Stay tuned

gch

Gold -It seems like a day doesn’t go by without some article, report or email claiming the end of gold’s rise is over. I received no fewer than a couple dozen emails this morning about a Marketwatch article about gold no longer being a bargain and asking what do I think. Hello? How many times must I say gold is in the mother of all secular bull markets? How many times must I utter the investment world and many in the media hate gold and you’re always going to hear this?

I used this channel when gold was testing $1,185 to show you it has been in a nice uptrend since February and in it’s one step back part (and two steps up) it can test the low end of the channel. The nitwits who love to hate gold are the ones who each day try to find comments that agree with their bearish assessment of gold. Tokyo Rose has been doing that from hundreds of dollars lower. The burden of proof is on them, not us who have fully enjoyed this great secular bull market to its fullest. Just remember, when we hit $1,300 I’m expecting one dollar from everyone to go to Tokyo “Nitwit” Rose Relief Fund.

 

On Major Moves, Peter Grandich has been very right and not only saved many investors fortunes, but expanded them dramatically. On November 3, 2007 at the MoneyTalks Survival Conference, Peter Grandich of the Grandich Letter warned that “an unprecedented economic tsunami will hit American beginning in 2008”.   Peter advised publicly to short the US market two days from the top in October, 2007 and stayed short until the last week of October, 2008. He began to buy stocks in March 7th,  2009. He also bought oil and oil related investments near the lows after the dive from $147.
….go to visit Peter’s Website

To HERE Peter speak and others speak on Trading go HERE:
allstar2

 

 

Every summer newspaper articles are published discussing the benefi ts of being in the market for the “Summer Rally.” The summer rally is a myth!

If there is a rally in the summer it typically occurs up until mid July. The subsequent period from July 19th to October 27th tends to be negative and provides a poor risk-reward profi le for the broad markets. Of course there are sectors that do well in the summer months, but investors have to be selective.

In future newsletters I will discuss both the summer rally myth and potential sector investments for the summer months.

In summary, if the markets perform well at the end of June and the beginning of July, do not fall in love – markets can be fickle and easily betray.

…..read much more in Brooke Thackray’s 5 page letter on Seasonal Trends HERE

Don’t……

Posted by Peter Grandich - comment via Jon Hilsenrath

on Friday, 11 June 2010 13:32

……. “be foolish to think Bernanke’s comment on gold was just some off the cuff remark. Gold was trading at or near new all-time highs and breaking out when his quote hit the wires. While I’ve always respectfully differ with my good friend Bill Murphy belief that the Gold Cartel is in the market daily, I do believe these comments by Bernanke were done with a purpose. The anti-gold crowd is in deep trouble. The recent nonsense from Jeff Christian over his squabble with GATA reeked of a controlled panic in my eye. The media continues to be filled with calls for gold to go much lower. Prechter’s latest market top forecast (He has made several others all the way up) is the latest carrot being used. before that it was the Barclay’s guy coming fall that’s now triple-digit in the red. For me, none can ever top the utter nonsense BNN was aired about the Mr. T gold sell signal a couple hundred dollars ago. Gold is in the “mother” of all secular bull runs and $1,300 is our next milestone.” – Peter Grandich

Bernanke Puzzled by Gold Rally

Federal Reserve Chairman Ben Bernanke says he’s a bit puzzled by surging gold prices. The 30% rally from a year ago, on top of gains in previous years, might be interpreted as a loud signal from markets that big inflation pressures are building in the U.S. Gold is seen by many investors as a hedge against inflation risk.

In this case, it might instead be a hedge against risk broadly. Mr. Bernanke notes that the inflation signal isn’t confirmed by movements in other asset classes. Yields on Treasury bonds tend to rise when investors worry about inflation, but those yields have been falling recently. Inflation expectations as measured in Treasury Inflation Protected Securities (TIPS) markets remain low. And other commodity prices are falling. Gold is breaking records, but copper prices are down 17% so far this year.

“I don’t fully understand movements in the gold price,” Mr. Bernanke admitted. But he suggested it might be another example of investors fleeing risky assets and flocking to assets that are perceived as less risky, not only Treasury bonds, but also ones like gold.  – Jon Hilsenrath Wall Street Journal.

 

On Major Moves, Peter Grandich has been very right and not only saved many investors fortunes, but expanded them dramatically. On November 3, 2007 at the MoneyTalks Survival Conference, Peter Grandich of the Grandich Letter warned that “an unprecedented economic tsunami will hit American beginning in 2008”.   Peter advised publicly to short the US market two days from the top in October, 2007 and stayed short until the last week of October, 2008. He began to buy stocks in March 7th,  2009. He also bought oil and oil related investments near the lows after the dive from $147.
….go to visit Peter’s Website

To HERE Peter speak and others speak on Trading go HERE:
allstar2

6/10/2010 – Again, we shall warn our clients/readers/friends that the manner in which the US market closed yesterday was hardly to be construed positively, for as we’ve said, bear markets historically open each day higher and close hard upon their lows, while bull markets open lower and close hard upon their highs. Clearly what has been happening in the course of the past several weeks in the stock market here in the US is not of the latter form and is much of the former – Dennis Gartman

For a Trial Subscription go to The Gartman Letter

From Richard Russell 6/09/10 – “A switch — Suddenly, traders and investors believe that the market is weak and that more downside action is just around the corner. As a result, they’ve piled into puts on the S&P which is insurance against downside losses. In fact, the price of puts has surged, meaning that downside insurance has become crowded. When this happens, you can bet that the stock market is ready to rally and cross up those who are betting on more immediate downside action.” “I don’t like the picture. Selling pressure continues powerful and in the driver’s seat, while buying power is weak”. Dow Theory Letters

 

Go to Cash: Facts and Fiction

In a surprising development, the most bearish, and easily most comprehensive, report that we have read in a long time on the broader markets, comes from Canada of all places, via BMO’s Quant/Tech desk. The report’s title is simple enough: Go To Cash – In Plain English. Not much clarification needed – via ZeroHedge

Here is the gist:

“We advocate switching out of equity positions and going to cash. The European sovereign debt crisis appears to be nowhere near over. The global credit environment is worsening. Cost of capital is going up and availability is going down. There are large gaps between where the credit market prices risk and where the equity market is priced. Equity is lagging the deterioration in credit conditions. Moves in currency, equity and commodity markets are mirroring the moves in the credit market. Global growth, in a credit-constrained environment, will slow. Profits will be squeezed by the higher cost of capital…We advocate a zero weight toward equity, and that investors convert their equity positions to cash.”

……read the whole BMO report HERE

 

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