With the above in mind:
U.S. Stock Market – I said in the weekend update that I suspected the bears would look to add to Friday’s drop today. They certainly did. But before one assumes this is the resumption of the major downtrend, I would like to point out today was not a complete victory for the bears. The bulls may be licking their wounds but they do have a few reasons not to commit suicide until at least the end of trading tomorrow.
If there’s such a thing as an orderly 250 point down day, today was it. There were a whole host of reasons to open sharply lower and we did. But much of the day saw limited waves of selling on lower volume. The final hour (the most important hour of every trading day) actually saw selling pressure dissipate and the market come off its lows. This is not something seen much during the severe decline. Yes, it’s only a crumb but to a starving and beaten bull, it can pass as a meal these days.
A distinct lowering of bullish enthusiasm combined with a dramatic increase in pessimism among retail investors (a much needed occurrence if there’s going to be any real bottom) is also an early sign all may not be as bleak this time around. One shouldn’t have been surprised that bulls raced to take profits after such a long and painful bear market. It’s like a game of craps (not that I ever been in one-lol) when after a long dry spell, a shooter gets hot and makes the longs a fair sum of money back. As soon as that hot shooter sevens out, most longs say color in (they cash in their chips and leave the table).
The difficulty remains an almost certain weaker employment number and horrendous 1st quarter earnings. The market is unstable at best and appears in no position to stand another shock and awe attack by short sellers on top of bad news. Bulls can only hope for a draw in the near term.
Oil – I truly don’t wish to offend anyone but I often wonder how some people will ever make money investing. Case in point; I started liking oil in late December at $36.50. The market was overwhelming bearish at the time. I kept emphasizing the long side despite perceived bearish news. While oil worked its way higher, certain people kept asking was it time to get in? When oil went to $54 last week, those very same people asked did they miss it. Today, they decided to have a one-day sale and what do those people do? Ask should they now wait to see if it goes lower. No offense but they would be much better off playing bingo or something.
We ran up 50% in just three months during a period when current fundamentals look like such a rise is unjustifiable. This may well be true but like I said in this weekend’s oil commentary, I believe the market has already discounted the present fundamentals and is looking at a much more favorable oil market down the road. If one concurs, one needs to use any real pullbacks as buying opportunities. The 50-day M.A. is in the mid 40s and I think that’s the worst case scenario as of now. It would not surprise me to see us snap back above $50. Wednesday’s inventory numbers are likely to have more of an impact this week than normal. Stay tuned.
Gold – A stronger dollar and talk of IMF sales-again, help push gold lower. It remains in a trading range.
Base Metals – Pullbacks are buying opportunities.
U.S. Dollar - any further rally up to the 88-90 area on the Index is yet another selling opportunity.
I have placed our debt clock at the top of the blob just in case anyone, including me, gets caught up in “happy talk”.
“Running into debt isn’t so bad. It’s running into creditors that hurts”.
Peter, I remember couple of years ago I used to see the national debt clock LIVE and each of our share used to be around $70k. I saw it on your website and the share is almost $200k per American????????
WHOW, it’s all I can say
Peter, having sold recently, I jumped back in with both feet this morning. Chose HOU. I’m not a day trader so would appreciate your views with respect to the Commodity versus Stocks at this time since I had previously maintained a split position. The thinking is to roll the position into stocks once leverage versus the commodity appears more favourable. Many thanks for a most informative blog.
Hello Peter,
The HW announced today that Diavik is going to take production shutdowns. How does this will affect HW share price ?
http://www.reuters.com/article/marketsNews/idAFBNG45185720090330?rpc=44
Leo:
Stay away from HOU & UCO especially since you are not a day trader. The only one of these that tracks reasonably is DXO. For example, when Peter recommended oil, HOU & UCO were about $10. Now that oil is up 50%, UCO is at $8 and HOU is at $6! Ouch!
It’s tough enough to get the direction right – I think it’s criminal when you get it right and still lose money.
Far better to buy the stocks of oil producers, methinks.
Peter, thanks for posting the US debt clock… how scary is that? Another staggering way of looking at it: try spreading it out over EVERY SINGLE PERSON ON THE PLANET… that’s $8,985 per person! YIKES!
Klaus:
Thanks for your perspective, I couldn’t agree more, you can’t hold them long term. I’m not a day trader nor am I a long term holder in a market that can deliver returns in weeks one would have been thrilled about for a year not too long ago. I have found that the leverage and compounding aspect of the HBP’s are impressive if you catch a trend then cash in and wait for a subsequent correction before re-positioning. Playing HBU,HGU, HOU and HEU this way I’m up 33% YTD (I don’t want to talk about the rest of the portfolio) with 60% of it realized. So far so good but it can obviously also bite hard in the opposite direction. Cheers,
Leo:
You’re doing better than me with those HBP things. You must have my money – lol.
Klaus:
Perhaps today but tomorrow is a brand new day! We must take advantage of the markets within the next 24 months as they offer a generational opportunity. Thanks God for Peter’s service, prospecitive views and ethics. Cheers,
Interesting article … http://onlinejournal.com/artman/publish/article_4521.shtml.
The government has done an amazing job in creating a form of panic to get things done. As the toxic asset plan came out it was celebrated by the markets when it reality as the article aptly points out it once again hits the tax payers with the cost of the toxic assets again achieveing the central banks goal of ” the great wealth shift”.
When historians look back at this period they will be in awe of of how complicit the public has been and continues to be willing to accept their own financial demise. This is not going to be called the greater depression like I once thought, but rather “the great wealth shift”.
The average person will be destitute since the government will be destitute and both it and its citiznes will be legally obliged to the debt incurred through this orgy of spending and complete lack of understanding about economic affairs of the nation … this has been an era of complete trust by the citiznes of the US in their government who regardless of party lines have been motivated by the love of money the central bankers of the world have always had. Central bankers do not add productive value to an economy they exploit the lack of discipline of countries and people through usury. The greater the lack of discipline the higher the profitability. Bernanke appears to be the voice of reason and most trusted figure yet it is he or his puppet masters who through the lending to countries around the world are no in position to complete control them.
Humanity’s hope rests in the hands of China and Russia and there abilities to act rational through this period, the west has democratically chosen state facism (how ironic) … the media, the entertainment industry, sports, religion all serve as the distractions (opiate of the masses) to allow the conquest handed to those who love money and use money not as a medium of exchange, not as a way to help others but rather as away to control people thereby acquiring more.
The USA is no longer a country fit to live in … as emigration begins restrictions will soon be imposed … you will be required to take or pay for your share of the debt incurred for the excessive and reckless lifetyle lived by Americans.
the prophet
Hey PG. How come you’re not in here? http://www.marketwatch.com/news/story/Six-reasons-I-am-calling/story.aspx?guid={C7D85D3C-7008-4980-AE1E-47AD2565FBA7}
Try this http://www.marketwatch.com/news/story/Six-reasons-I-am-calling/story.aspx?guid={C7D85D3C-7008-4980-AE1E-47AD2565FBA7}
Sorry everybody the link won’t work. Go to http://www.marketwatch.com
Peter forgive my “dullness” but please clarify what you mean by the following statement:
U.S. Dollar – any further rally up to the 88-90 area on the Index is yet another selling opportunity.
The reason for my confusion is in the model portfolio, is a short of the US dollar (UDN). Are you meaning selling of the US dollar (I think that’s what you mean), or a selling of the short of the US dollar that is in the model portfolio? If the first then conversely that would mean UDN is a buy.
thanks!
Thanks folks for sharing helpful hints on the stocks that work for them. Together maybe we can survive this tsunami. Keep sharing your learnings about the stocks – you are doing a good service.
NAK.NDM Info – for what its worth, the following was on the stockcom board in Canada:
Super Stock Picker issues Buy Recommendation on NDM.TO
Super Stock Picker (http://www.SuperStockPicker.com) today recommends Northern Dynasty Minerals Ltd. (AMEX: NAK – TSX: NDM) as a buy in the Ultimate Price Momentum v1 portfolio. For more complete information on this portfolio, go to:
http://www.superstockpicker.com/portfolio_Ultimate_Price_Momentum_v1.html
About Super Stock Picker:
Super Stock Picker mechanically manages a set of portfolios holding only Canadian stocks. Super Stock Picker is an independent and unbiased recommendation service whose web site access is totally free, including access to current holdings and historical trades since inception. For more information, please visit http://www.SuperStockPicker.com
About the Ultimate Price Momentum v1 portfolio historical performances:
Since Inception (annualized) 31.32 %
3 Year (annualized) -2.46 %
1 Year -60.82 %
Year-to-Date -21.48 %
6 Month -23.75 %
3 Month -13.54 %
1 Month 6.38 %
G20 Meeting should be interesting…. Figure that there’ll be Dollar support thru the meeting and when everyone gets home the sell orders hit. Gold breakout coming soon?
Peter, Perhaps you could clarify something? With all this bullishness in gold, I hear nothing about our national heritage, ” Ft.Knox and our gold “. With all we owe (the USA), the gold we have continues to go up in value per ounce. To divide the indebtedness with the amount of gold in ft. knox, I suspect the value per ounce would be or should be extremely higher than the spot price of gold. So why isn’t it ?
Also Uranium seems to have dropped off the radar screen and you also have left the area, it seems there is a lot of news around which would warrant some interest or comments.. The president has also failed to include Ur in his speech to the nation. Personally I think the Uranium, nuclear energy area will play a large part in our economic recovery. Jobs alone in that area would be a large percentage to cure joblessness.
Is there too much fear regarding nuclear ? Maybe a few scientists as elected officials in gov’t would help to get the USA on track to the enormous demand for electricity once we leave oil for elec cars !!!
NDM is one of the top 10 holding in Mac Universal precious Metal Fund, one of the 10 largest precious metal funds. see the link:
http://www.morningstar.ca/globalhome/QuickTakes/Fund_Overview.asp?fundid=6924
Klaus and Leo;
I have been hearing and observing the same. I think this article explains it well.
http://www.thestreet.com/_yahoo/story/10479563/1/crude-etfs-keep-losing-as-oil-prices-rise.html?cm_ven=YAHOO&cm_cat=FREE&cm_ite=NA
challie, the gold if there is any (there hasn’t been an physical audit in years) in Fort Knox has been turned over to the Fed (a private corporation) by the treasury and is listed on their balance sheet. It is no longer the people belonging to the people of America. It is the central banks who manipulate the price of gold downwards to maintain the illusion that paer money is of value when in fact it is an IOU from a bankrupt state. The following video provides information about this and features a man I deeply respect … Ron Paul. He tells it like it is and provides us a very good reason to distrust the way the American government is conducting business today. Please take the 7+ minutes to watch and learn about the extent of the corruption.
http://www.youtube.com/watch?v=styYIG-fiEc
the prophet
For oil ETFs, try DIG ( 2 x ) or DUG for shorts. Also for 3 X leverage, try ERX for long.
Special Alert from Casey Report – FYI:
As we prepare to go to press with the April edition of The Casey Report, there is a potentially important development in the works that could negatively affect our short positions.
Specifically, this Thursday, April 2, the FASB, under pressure from the government, will vote on policy changes related to “mark to market” accounting standards that almost certainly reduce the amount of write-downs companies must take on illiquid and hard-to-value investments. While loosening accounting standards could trigger a backlash from investors, already unhappy with the culture of obfuscation that has dominated Wall Street, an even greater potential exists for a celebratory rally to occur, because the proposed changes in accounting standards will cosmetically improve the balance sheets of the nation’s struggling financial institutions.
Given the amount of capital now on the sidelines, much of it in the hands of investment managers with every incentive to deploy that money, and very few to sit in cash, it is not inconceivable that we could see a strong rally materialize in the short term. As a consequence, we are advising our readers to take the prudent course of closing out short positions immediately.
since 1963 I havebeen investing in silver and gold , either in coin, stks or futures and in ‘78 became a trader on a futures exchange. Since 1975 I have believed that Ft. Knox has held our national heritage without selling off our wealth. I still believe we the people have this wealth and under guard. Presently there is a group seeking to confirm whether we still have this wealth and I support that endeavor. Until I learn differently I will rely on that assertion.
As to the banks , feds, and pols controlling prices of gold, I am aware of that FACT and so long as they donot try to sell our hoard of gold, I will only fight back thru the marketplace and the media.
As to Ron Paul, I have followed his every word and wished that every citizen could back him. In the’60s there was virtually no one who knew the present situation would happen. Finally , in the 70s we began to take notice of the dying dollar and the gvt’s printing of money, disguised as “expansion of the money supply”. and so the fraud by the gov’t expanded and became more and more clandestine. As the SHADOW used to say, “who knows what evil lies in the heart of men,……..”
Harold,
Helpful article. Many thanks for passing it on.
Hi Peter
Could you give your opinion on Nat Gas. It would seem to be a buy here soon on a risk reward basis coming from the technical side and i would assume demand will pick up on price alone. Peter, with all due respect, your infatuation for the Devils has caused you to miss a great bull run in the Canucks. Fortunately for you its not too late to get on board. A small wager, 1000 shares of Gix (ouch) , that they go farther in the playoffs than the Devils. Have a good one.
Hi readers of Grandichs blog. I havent bloged in over a month.
have been out of ung since early February. Can any one give their take on it.
How low can natural gas go?
I don’t think we will be going to 9,000 on the Dow. A close above 8300 might change my mind since I see a lot of resistance there. What do I know though???? I just started out in this game a year or two ago and pretty much lost it all! But hey, it is fun to guess none-the-less.
I agree with Peter that we may never see oil at these prices again… I am still wondering the best way to invest. Thanks gsh for the lead… I will take a look.
A lot questions about Natural Gas. Let me quote an extract from Porter Stansberry:
” natural gas prices – like oil prices – are notoriously cyclical. When you have a big boom, you know, sooner or later, you’re going to have a big bust. Last September, there were over 1,600 working natural gas rigs in the U.S., a record amount by a wide margin. That number is now down 47%. But even with the decrease in working rigs, gas in storage in the U.S. is up almost 30% over last year and 20% above the five-year average for this time of year.
Even with half of the rigs on the shelf, gas reserves are still way above normal. A large amount of natural gas in storage at this time of year (at the end of the winter heating season) suggests prices are going to fall a lot over the summer.
Now, remember… natural gas and oil have always been boom and bust markets. Always. But over the last half-dozen years, a very powerful new idea – “peak oil” – led some market participants to believe the era of oil busts was gone forever. Don’t laugh. Lots of otherwise very smart people bought into this nonsense.
According to these theorists, onshore energy production in the United States peaked in 1974 and energy production globally was going to peak in 2005-2010, depending on whom you asked. Thus, prices for natural gas and oil could only go higher in the future. Make a note: There’s nothing more dangerous to investors than any theory which claims to know, with certainty, prices will always move in one direction or another.
What happened, in fact, is that the market worked just like a free market theorist would have expected. Higher prices led to vastly more drilling and more exploration. Huge new natural gas fields were discovered, improved, and exploited. And guess what? By 2008, the U.S. was producing 26 trillion cubic feet of natural gas per year, the most in the recorded 72-year history of natural gas production. So much for peak oil.
So… by the end of 2008, the U.S. was producing more natural gas than ever before, with more active rigs working than ever before, with more natural gas in storage than ever before, at the tail end of the largest price increase to natural gas, ever. Given these facts, I think you ought to have your head examined if you believe the price of natural gas is going up.
I am well aware that monetary inflation may drive the price up, if only because the price of everything is likely to increase. But if you’re looking to hedge your exposure to the dollar, buying just about anything else is a much better bet than natural gas. Here’s why…
We’ve discovered huge new reservoirs of natural gas, which are much cheaper and easier to drill than oil reserves. Proven reserves of natural gas grew by 12% in 2007 – the ninth straight year our proven gas reserves increased. (The data isn’t available yet for 2008… but it’s certain that reserves grew again, probably by double digits.) Over the last nine years, our proven natural gas reserves have increased by 45% – the steepest gain since 1944 to 1953.
It is hard to exaggerate how massive the gains in proven natural gas resources have been over the last few years. Just consider these numbers from one of the new sources, the Barnett Shale. In 1999, proven reserves in the Barnett Shale region totaled 2.4 trillion cubic feet. They now total 17.4 trillion cubic feet. And that’s small potatoes compared to the Marcellus Shale in Pennsylvania. In 2002, estimates of the Marcellus gas reserve were around 1 trillion cubic feet. Now it’s believed there are 500 trillion cubic feet of gas in this one shale formation. Even if only 10% of this gas is produced, that would increase our total current reserves by 20%.”
I am neutral on UNG. It is very low now but the trend seems to point that it is going lower until I see otherwise technically.
Sorry to hijack this thread,but its how this blog is set up!….can any of you “mathimagicians” calculate where the above debt calculator will be in ten years,assuming no more money printing,and the current interest rate??thanx.
Thanks gsh
The guys on Fast Money seem to agree. Too much inventory and decreasing demand.
According to the Canadian National goverment:
457,637,000,000 federal debt
33,504,680 people
=$13,659 each.
Does the debt clock above include city, county and state debt?
Peter – Don’t know if you read down this far…. but I see that NDM was scheduled to release Q4 earnings news after close today, yet there is nothing available in company news, on the NDM website, or in Sedar filings. Can you point us to the info?
Seems like a pause before SPX declines into 600s and quite possibly somewhat lower; this move would likely make the bottom.
Harold:
Thanks for the article I don’t know why these oil funds don’t buy futures 12 months out. The contango / backwardation issues would be minimized.
gsh:
You are 100% right on nat gas, but oil is a very different animal. While we are a long way from “peak gas,” there have been precious few large oil discoveries. Peak oil does not mean we will run out, just that we will run out of cheap oil. For example, there are projects currently on hold in the oil sands with estimated production costs of $80-$90. There is no cheap oil coming on stream. The only thing that can prevent substantially higher oil prices is massive demand destruction. Even if we go into another Great Depression, low prices would only be temporary.
Klaus,
I am bullish on oil. Has been bullish ever since it dropped below $40. I had bought ERX, DOG, DXO, CNQ,SU made quite a bit trading on positive bias. As for the ETFs, these are all trading stocks and you have to get in and out. But maintaining a positive bias helps i.e. when stocks over extended you take profit but make sure you buy back when it drops back again.
Hi Peter, do you know what happened today with NCU it went from .30 all the way up to .65 and came right down again to .35 — What was that all about?– still a good buy?
Thanks
Anna
Susan.
I thought they were going to announce the changes to the mark to market and uptick rules a week or so ago and Instead the FED announced they a were going to buy back treasuries. The uptick rule is no big deal, but if change to the mark to market rule hides the true value of the bad assets, the financials will indeed improve and pull the rest of the market along.
What bothers me is that they can’t price these bad assets now. If they can hide the true valuations under a new mark to market rule, it will be interesting to see how fast they can come up with a price.
Changing ‘Mark To Market’ rules should be coming shortly. Get this G-20 Meeting out of the way.
Did you notice that the G-20 street protestors are taking their animosity out on the banks? The British financial sector is reportedly all boarded up. It’s reminiscent of when the Argentinians woke up one morning to impoverishment after decades of misguided government policies. They stupidly ran up and down the streets throwing rocks at the bank windows.
Why didn’t they throw the rocks at the government offices? Because they’d get bullets in return. Now you know why the banks always get blamed.
TD Waterhouse discount brokerage is unavailable for trades this morning. It seems that too frequently I’m unable to access my accounts with them. When forced to phone in the wait is very long. Does anyone reccomend any of the other Cdn brokerages that they’ve had better luck with or are they all pretty much the same? I’d appreciate any input.
Pam,
I bank and trade through Scotiabank and haven’t had any downtime in 5 years or so. Bear in mind, I’m not a really frequent trader so maybe I’ve just been lucky?
Pam,
Try interactivebrokers.com. It is most sophisticated and robust. It is my main trading platform. It will take a little time to learn to use the platform but it designed for professionals.
As a backup, I have Etrade.
Hi Peter:
Any thoughts on ATW? It seems that Sprott has taken an interest.
Any thoughts on CRC? Over 3 million shares traded yesterday. Is it back from the dead?
Thanks
rt
pam , it must be a regional problem i have been online with waterhouse since 6 am no problems. i have used waterhouse for years the only problem i can remember is the day of the bce take over collapse the system was overloaded and i could not get trades in untill noon.
Bill,gsh and Neil,
Thanks so much for your responses. They help.
Pam:
I have used Royal Bank of Canada’s Action Direct for 10+ years and yes, there are “outages” from time to time. Never longer than 10-15mins, but annoying nonetheless.
Peter,
Looking forward to meeting you in Calgary .Have a safe trip.
Peter, our fearless leader, could you please comment on the following involving Treasury buying which seems to be supporting Treasuries to the consternation of those who are holding TBT…..anyone else is welcome to comment as well. thanks!
Fed purchases
Treasurys also played off the Federal Reserve’s latest foray into the government bond market, buying $6 billion in debt maturing in 2012 and 2013. Dealers had submitted $16.95 billion in debt to be purchased.
On Monday, the central bank bought $2.5 billion in bonds maturing in 17 to 30 years. That followed $15 billion in shorter-dated debt bought last week to kick off a plan to buy $300 billion in U.S. debt, a program designed to force borrowing costs lower.
The Fed’s next batch of purchases, of debt maturing between 2013 and 2016, will take place on Thursday.
NAK closed today at $7.15…highest since $7.14 close on July 31, 2008. IMO NAK gonna make my name come true before July 31, 2009. Hopefully, it will get there without the benefit of a buyout offer. If we do, any offer under $15.00 gonna be a waste of time IMO.
THE WANING DAYS OF AMERICAN LIBERTY
Liberty & Tyranny – Mark Levin
Debuts as The N.Y. Times Best Seller
http://www.wabcradio.com/showdj.asp?DJID=12009
One the most articulate defenders of the U.S. Constitution who understands what dangers are presented to our freedoms is Mark Levin. From his perspective as a Constitutional Attorney, Mark speaks quite frankly to ordinary Americans in inspirational, understandable, and fiery ways. The link above will direct you to a talk radio link and Mark Levin’s website.