Daily Updates
Superpollster Scott Rasmussen has pulled the pin and rolled one of his patented hand grenades under the chair of the Political Class. Rasmussen’s “October Surprise” is contained in a recent poll showing 44% of likely voters favor returning to the gold standard, 28% opposed. That intensifies. If the public knew that it would “dramatically reduce the powers of bankers and the political class to steer the economy” support goes up to 57%. Opposition drops to 19%.
Reducing the power of bankers and the political class — along with gold’s empirical record of turbo-charging job-creation and economic growth — is core for gold’s proponents. Thus, that inevitably will become public knowledge and make gold a potentially huge electoral asset.
Ed Note: The following perspective is completely at odds with Don Vialoux’s, who sees an equity market seasonal trade to the upside between October and April.
Citi: “The Bear Market Rally Is Behind Us:
While we respect the October monthly close on the S&P 500, we did not close above the 12 month moving average…we believe the bear market rally is behind us and anticipate a move towards the 1,000-1,015 target over the weeks and months ahead.”
WEDNESDAY, NOVEMBER 2, 2011: BOB HOYE PUBLISHED BY INSTITUTIONAL ADVISORS
SIGNS OF THE TIMES:
“All the choices we’ve made have been the right ones.”
– Obama on ABC News interview, October 18
He should have said that all the choices made were the “left” ones.
“Reid signals government jobs must take priority over private-sector jobs.”
– The Hill, October 19
“Federal employees [in the beltway] compensation averages more than $126,000, which is up from $122,697 in 2009.”
US Median Household Income was $54,442 in 2010, down from $54,719 the previous year.
“An increasing number of Republican presidential candidates are talking about returning the U.S. Monetary system to the gold standard.”
– Rasmussen, October 21
* * * * *
Perspective
Volatility has become the byword for “Down”, volatility was generally expected to run into October. Our October 4th conclusion was that “It could take a week or so to get the DX down and all the disasters up.”
That’s the way it seems to be working out and disasters did not continue through October.
In the meantime, how long can the sunshine last and how bright can it get?
It happened rather quickly.
On the S&P Ross had a target range of 1222 to 1258. Monday’s high was 1256, and today’s “news” about the Euro “fix” has popped the stock index up to 1275. Timed with a weaker dollar the announcement is being celebrated with prices rising for most of last month’s disasters.
With this, the daily RSI on the S&P had a big swing from very oversold to somewhat less than overbought. A few days of surge could make this overbought–perhaps enough to force a consolidation.
In looking around for confirmation, the RSI on the bond future seems to be establishing the opposite swing in momentum.
Then, crude oil’s recent rush has accomplished a big swing on its RSI. Worth noting is that this could be a delayed seasonal high. Delayed because of overall troubles into early October. Once topped, crude could decline into January.
Recently physicists have expressed doubts about the constancy of the speed of light. Keeping with the latest in physics, we have no hesitance in noting that market sunshine is picking up enough momentum to limit the move.
Gold And Silver Sector
During the choppy, but favourable, action expected into the new year silver could outperform gold. It has been since early October.
That the gold/silver ratio could not take the “next leg up” in early October signaled improving possibilities for the general financial markets.
This can continue and we remain confident that action in the ratio will give us advanced notice of the return of liquidity concerns.
In the meantime, the rise in this – the really shiny sector – can continue for a couple months. That would be within a secular bull market that could last until the secular credit contraction exhausts itself.
* * * * *
Central Bank Computers
Exuberance In = Exuberance Out
(For most of the time)
Except in 1921, 1929, 1973, 1980, 2000 and 2007, which were overextensions with consequent collapses severe enough to overwhelm the Fed’s ability to inflate.
Admittedly, the Fed did not have computers in early times, but then it has been infinitely reckless in theories and practice since day one.
Link to October 28th ‘Bob and Phil Show’ on Howestreet.com:
http://talkdigitalnetwork.com/2011/10/show-me-the-money/
INSTITUTIONAL ADVISORS
WEDNESDAY, NOVEMBER 2, 2011
BOB HOYE, INSTITUTIONAL ADVISORS
E-MAIL bobhoye@institutionaladvisors.com
WEBSITE: www.institutionaladvisors.com
According to EquityClock.com, the average optimal holding period for Cocoa futures is from October 22nd to February 16th. Average gain over the last ten periods was 13.9 percent. The trade was profitable nine of the last ten years.
Cocoa has a history of moving higher between November and March. What are prospects this year?
Gains revolve around the production and sale of chocolate over a number of holiday periods, including Halloween, U.S. Thanksgiving, Christmas, and Valentine’s Day. The trade concludes prior to the Easter holiday. As demand grows for chocolate in the late Fall and Winter, so too does the price of cocoa when companies such as Hershey and Cadbury are major buyers. The period of seasonal strength also corresponds with the timeframe when the larger of the two annual crops begins to ripen and harvest yields become known. A smaller harvest also takes place during the period of seasonal weakness from April to June.
The current outlook for Cocoa is mixed. The National Confectioners Association recently reported that Cocoa Production in North America grew 3.4 percent in the Third Quarter to 124,621 metric tons due to increased demand. However, supply is expected to remain plentiful due to favourable weather conditions in the 2011 growing season.
On the charts, Cocoa has an improving technical profile. The Dow Jones-UBS Cocoa Sub-index is rebounding from oversold territory according to a number of technical indicators, including MACD, RSI, and Stochastics. The benchmark remains in an intermediate downtrend, below both 50 and 200-day moving averages. Support is indicated at $31 and resistance is prominent at $35. Strength relative to the S&P 500 Index is showing early signs of recovery.
Aside from purchasing Cocoa Futures Contracts, investors can gain exposure through the iPath Dow Jones-UBS Cocoa Sub-index Total Return ETN (NIB $37.70), an unleveraged investment based on short term notes and cocoa futures contracts.
Preferred strategy is to accumulate positions in Cocoa for a trade during the current period of seasonal strength. Expected US dollar weakness during the current period also could add to returns.
Don and Jon Vialoux are the authors of free daily reports on equity markets, sectors, commodities and Exchange Traded Funds. They also are research analysts for JovInvestment Management Inc. All of the views expressed herein are their
personal views although they may be reflected in positions or transactions
in the various client portfolios managed by JovInvestment. JovInvestment is
the investment manager for the Horizons family of ETFs. Daily reports are
available at http://www.timingthemarket.ca/ and http://www.equityclock.com
-
I know Mike is a very solid investor and respect his opinions very much. So if he says pay attention to this or that - I will.
~ Dale G.
-
I've started managing my own investments so view Michael's site as a one-stop shop from which to get information and perspectives.
~ Dave E.
-
Michael offers easy reading, honest, common sense information that anyone can use in a practical manner.
~ der_al.
-
A sane voice in a scrambled investment world.
~ Ed R.
Inside Edge Pro Contributors
Greg Weldon
Josef Schachter
Tyler Bollhorn
Ryan Irvine
Paul Beattie
Martin Straith
Patrick Ceresna
Mark Leibovit
James Thorne
Victor Adair