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Sunday, September 26, 2010
Google an indicator of market trend?
As you can see requests for "stock market crash" on google were exploding just before the 2008 crash starts.
So google statistics can be a useful tool to indicate investors fear and predict a stock market crash.
So google statistics can be a useful tool to indicate investors fear and predict a stock market crash.
Arabica coffee +90% since march 2009 low
KC, ICE [NYBOT]
198c is a major resistance level, and analysts say that arabica already reached its highest, so it's time to take your profits.
Tuesday, September 14, 2010
Overview of the week
Source: StockCharts.com
The Diamonds Trust, Series 1 (NYSE:DIA) ETF, which tracks the Dow Jones Industrial Average, respected a support level earlier this week and ended up surging from those lows. The $100 level has become a clear level to watch, as bulls have aggressively defended it on a few occasions. Looking above, DIA is testing an important level near $105, which is the lower end of a bearish gap. The close above the nearby 200-day moving average suggests that the rally could last much longer than some are anticipating and reduces the probability of a double dip. Friday's close above this level could lead to a test of the more important level of $107.
Source: StockCharts.com
The Powershares QQQ ETF (Nasdaq:QQQQ) pushed higher and remained above its 200-day moving average for the second consecutive week. Many traders will now set their sights on the August high of $47.19. The sharp rebound over the past few weeks may have trapped some bears and it should add to the upward pressure moving forward. If QQQQ breaks above the high, it could lead to a longer term trend higher.
eur/usd
US Dollar Index (USDX) (source:Bloomberg)
EUR/USD
The key resistance is 1.2775 (red line) if its breaks the next target will be 1.2880 and then 1.30 (Fibonacci).
Fear of a double-dip w?
Amex Gold Bugs Index (HUI) evolution since nov 2009
USD/JPY hits new 15-year low (83.23 yen)
EUR/CHF hits a new record of 1.28 for 1€
Investors invested massively in the German Bund last August
fear of a double-dip w? investors are looking for safety investments these days!
Tin price still going up
A high demand (+20% compare to jan-april 09, mostly for electronics industry) which can not reach the offer.
Indonesia (Timah and Koba Tin), Peru, China, and Bolivia which (the largest producers of tin) are reducing their exports due to production difficulties (extraction cost, government policy...).
Next resistance level for tin will be $22,000, if it breaks the next target price will be $23,000.
Sunday, August 22, 2010
Inflation Adjusted Average Gold prices
Inflation Adjusted Annual Average Gold prices in September 2009 Dollars.
That's $38,211 in circulation for every ounce of gold in reserve! Of course, it's even higher nowadays. The printing presses are cranking faster than ever in 2010. Only now, it's much harder to know how big the actual money supply has gotten as the number was so embarrassing that the Fed stopped to publish the “M3" measure in 2006.
Source: inflationdata.com
From 1880-1914 the U.S. dollar official gold price was $20.67 per ounce and the U.K. official gold price was £ 4.24 per ounce. By 1914 most countries in the world were on a Gold standard. This Gold exchange rate was maintained by a complex system of transferring Gold from New York to London. Creating a system of checks and balances that should have prevented the onset of inflation.
This worked fairly well until other countries began abandoning their Gold standard to finance the First World War. The U. S. entered the war late and was able to maintain its gold standard.
See that in the graph the nominal price of Gold is flat but the inflation adjusted price is not. If Gold perfectly hedged inflation the inflation adjusted price of gold would overlap the nominal price.
In the figure 4 "Cumulative Inflation by decade" from 1913 through 1920 inflation (as measured by the CPI) had increased by almost 98% (in other words in 7 years prices had almost doubled) but the price of Gold remained flat (by Government decree).
Then, over the next 10 years deflation set in as the roaring 20's unfolded as the US economy boomed and Europe suffered the after-effects of WWI. Finally, in 1929 the system could not stand the internal stresses and the stock market crashed ushering in the Great depression.
In 1933, President Franklin Roosevelt realized that the U.S. could not maintain the pretense that Gold was still worth only $20.67 per ounce (because at that price foreign government would have bought all the U.S. gold). So he perpetrated one of the greatest frauds ever on the American public. He forced U.S. citizens to sell their Gold at the official price of $20.67 and once he had collected all the Gold into government coffers, he adjusted the price to its real price of $35 per Troy ounce. Thus the government made a handsome 69.33% profit in a few months (equivalent to a 69% tax on Gold owners).
This effectively, increased the money supply and "legitimized" the inflation that had silently been occurring behind the scenes as prices increased but gold values did not. In hindsight, this increase in the money supply may have been the key factor in the emergence from the Depression.
Notice that in 1930 inflation since 1913 was up about 64% ... is it any coincidence that the Federal Reserve raised the Gold price 69%? No! that one time adjustment just brought it in line with inflation. But that didn't solve the problem permanently. By 1970 inflation was up 306% and gold was still officially $35 an ounce. Once again the price of gold needed adjusting.
Although U.S. citizens could not own gold, foreign governments could continue to present their foreign exchange tickets at the "gold window" and the U.S. was obligated to pay up in Gold.
So in 1971 President Nixon ended the US gold standard. At that point the price of gold bullion was allowed to float freely and find its own level.
This time rather than take all the Gold from the people (since they had none) the Government raised money by allowing the people to buy Gold back at the new higher free market prices.
Government gold sales had a tempering effect on gold prices for a while as the government liquidated its excess gold bullion. But by the late 1970's the government had stopped its gold sales and the price took off.
Many felt that this rise was in response to inflation. From the peak in1980 the inflation rate declined but cumulative inflation climbed steadily upward. But rather than keeping up with inflation the price of Gold fell from the peak of $850 per ounce down to under $300 in 2001.But in inflation adjusted dollars the scene is even worse. The 1980 peak in 2009 inflation adjusted dollars (figure 6) was over $2100 and it fell to under $346 losing a whopping 84% of its value!
So How High did gold really go?
In today's dollars, 1975 gold at $196 is more like $700 in the current market. And 1980 gold, the peak year at the historical price of $850, would now be closer to $2,189.
So if America has 8,180 tons, nearly 261.7 million ounces of gold in reserve, how many dollars does that buy? By 1980, for every ounce of gold in America, the financial system carried $6,966 in cash. That's $1.8 trillion total. But by the end of 2005, the total real money supply shot to over $10 trillion (see figure 2).
Corn and Oat
+40,7% in just more than one month!
Last June 9, the corn reached 4,25 $ the bushel on the CBOT, and went to 5,98$/bu on July 15.
Analyst didn't forecast an increase in corn price, except if there is a climatic disaster! :-)
The largest world corn producers of the northern hemisphere are suffering
Canada, too much rain! A fifth of its production should be decimated.
In Western Europe, the drought threaten. In France (estimates of production with a fall of 3,5%) same thing with Germany.
In Russia, already 20% of the production (nine million hectares) are destroyed. Because of the drought. However Russia is just the fourth world corn exporter...
(As for Kazakhstan, because of the dry weather, it is a third of the production which is likely to be destroyed.
And the Ukrainian, too much rain, impossible to collect the corn.)
With a high RSI (76, overbought), a return under the 550c/bu is possible, with a support at 510. (for long that this support remain untouched we are in a bullish trend)
▪ the objectives are 645/675. Indeed, these levels are the highest reached last year.
▪ an alternative scenario: if the 510 support did not hold, corn will go down to 465, its next support.
So there is a potential of short-term rise, but remain careful about mid-term, stocks of corn are full and this is not sure that the corn market will be affected by the drought this year.
On the other hand, for the long run, corn remain definitively bull (Decrease in production, drought, increase of the world population...).
But what about Oat?
--> a high potential of grow
+40% in just one week! From June 9 to June 15 Oat increased by +40%.
Why?
Because of Russia's worst drought in 50 years. Russia is the biggest producer of oat in the world (20%).
Oat consolidates to its 275 support, before it goes up again.
Last June 9, the corn reached 4,25 $ the bushel on the CBOT, and went to 5,98$/bu on July 15.
Analyst didn't forecast an increase in corn price, except if there is a climatic disaster! :-)
The largest world corn producers of the northern hemisphere are suffering
Canada, too much rain! A fifth of its production should be decimated.
In Western Europe, the drought threaten. In France (estimates of production with a fall of 3,5%) same thing with Germany.
In Russia, already 20% of the production (nine million hectares) are destroyed. Because of the drought. However Russia is just the fourth world corn exporter...
(As for Kazakhstan, because of the dry weather, it is a third of the production which is likely to be destroyed.
And the Ukrainian, too much rain, impossible to collect the corn.)
With a high RSI (76, overbought), a return under the 550c/bu is possible, with a support at 510. (for long that this support remain untouched we are in a bullish trend)
▪ the objectives are 645/675. Indeed, these levels are the highest reached last year.
▪ an alternative scenario: if the 510 support did not hold, corn will go down to 465, its next support.
So there is a potential of short-term rise, but remain careful about mid-term, stocks of corn are full and this is not sure that the corn market will be affected by the drought this year.
On the other hand, for the long run, corn remain definitively bull (Decrease in production, drought, increase of the world population...).
But what about Oat?
--> a high potential of grow
+40% in just one week! From June 9 to June 15 Oat increased by +40%.
Why?
Because of Russia's worst drought in 50 years. Russia is the biggest producer of oat in the world (20%).
Oat consolidates to its 275 support, before it goes up again.
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