Archive for November 2013

November 26th: Ed’s Daily Portfolio Summary   Leave a comment

BIDU: 6.37 to $163.03 ( 4.07% , 5.18% overall)– bought at $155.00
GNW: -0.14 to $15.14 ( -0.92% , 61.58% overall)– bought at $9.37
MSFT: -0.29 to $37.35 ( -0.77% , 11.66% overall)– bought at $33.45
NDZ: -0.04 to $8.26 ( -0.48% , -4.51% overall)– bought at $8.65
NNVC: 0.01 to $4.66 ( 0.22% , 83.46% overall)– bought at $2.54
PVCT: -0.02 to $0.80 ( -2.44% , -13.98% overall)– bought at $0.93
YHOO: 0.35 to $36.64 ( 0.96% , 36.31% overall)– bought at $26.88

OVERALL: +0.41%

Posted November 26, 2013 by edmcgon in Open Thread, Portfolio

Traders Corner   4 comments

Yesterday’s S&P 500 drop helped give the bulls a little breathing room for today, by raising the top of the Bollinger Bands. Other than that, the technicals are pretty much the same as they have been for about a week.

The S&P 500 levels to watch today:

UPSIDE: 1808 (November 25th’s high and the all-time high) and 1809 (top of the Bollinger Bands).
LAST CLOSE: 1802 (November 18th’s high).
DOWNSIDE: 1800 (November 25th’s low), 1797-1798 (2 data points), 1794-1795 (3 data points), 1790-1791 (2 data points), 1788 (November 18th’s low), 1782-1784 (3 data points), 1780 (November 14th’s low), 1777 (November 20th’s low and the 20 day moving average), 1773-1775 (3 data points and October’s high), 1770-1771 (2 data points), 1764-1768 (5 data points), 1760-1762 (3 data points), 1752-1755 (2 data points), 1746-1747 (2 data points), 1745 (bottom of the Bollinger Bands), and 1736 (50 day moving average).

Posted November 26, 2013 by edmcgon in Daytrading, Investing, Market Analysis, Technical Analysis

Ed’s Daily Notes for November 26th   5 comments

Fox News: Almost 80 million with employer health care plans could have coverage canceled, experts predict

Almost 80 million people with employer health plans could find their coverage canceled because they are not compliant with ObamaCare, several experts predicted.

Their losses would be in addition to the millions who found their individual coverage cancelled for the same reason.

Stan Veuger of the American Enterprise Institute said that in addition to the individual cancellations, “at least half the people on employer plans would by 2014 start losing plans as well.” There are approximately 157 million employer health care policy holders.

Avik Roy of the Manhattan Institute added, “the administration estimated that approximately 78 million Americans with employer sponsored insurance would lose their existing coverage due to the Affordable Care Act.”

Last week, an analysis by the American Enterprise Institute, a conservative think tank, showed the administration anticipates half to two-thirds of small businesses would have policies canceled or be compelled to send workers onto the ObamaCare exchanges. They predicted up to 100 million small and large business policies could be canceled next year.

According to projections the administration itself issued back in July 2010, it was clear officials knew the impact of ObamaCare three years ago.

What will be truly interesting is if those cancellations go out before next year’s mid-term election.

Bloomberg: Gold Fix Drawing Scrutiny Amid Knowledge Tied to Eruption

This is the very definition of “insider trading”:

Every business day in London, five banks meet to set the price of gold in a ritual that dates back to 1919. Now, dealers and economists say knowledge gleaned on those calls could give some traders an unfair advantage when buying and selling the precious metal.

The U.K. Financial Conduct Authority is scrutinizing how prices are set in the $20 trillion gold market, according to a person with knowledge of the review who asked not to be identified because the matter isn’t public. The London fix, the benchmark rate used by mining companies, jewelers and central banks to buy, sell and value the metal, is published twice daily after a telephone call involving Barclays Plc (BARC), Deutsche Bank AG (DBK), Bank of Nova Scotia, HSBC Holdings Plc (HSBA) and Societe Generale SA. (GLE)

The process, during which gold is bought and sold, can take from a few minutes to more than an hour. The participants also can trade the metal and its derivatives on the spot market and exchanges during the calls. Just after the fixing begins, trading erupts in gold derivatives, according to research published in September. Four traders interviewed by Bloomberg News said that’s because dealers and their clients are using information from the talks to bet on the outcome.

“Traders involved in this price-determining process have knowledge which, even for a short time, is superior to other people’s knowledge,” said Thorsten Polleit, chief economist at Frankfurt-based precious-metals broker Degussa Goldhandel GmbH and a former economist at Barclays. “That is the great flaw of the London gold-fixing.”

We will see whether the British government actually does anything about this, but I’m not holding my breath…

Posted November 26, 2013 by edmcgon in Market Analysis, News, Politics, Precious Metals

November 25th: Ed’s Daily Portfolio Summary   Leave a comment

The following includes Friday’s results:

BIDU: -1.74 to $156.66 ( -1.10% , 1.07% overall)– bought at $155.00
GNW: 0.08 to $15.28 ( 0.53% , 63.07% overall)– bought at $9.37
MSFT: 0.24 to $37.64 ( 0.64% , 12.53% overall)– bought at $33.45
NDZ: 0.04 to $8.30 ( 0.48% , -4.05% overall)– bought at $8.65
NNVC: 0.13 to $4.65 ( 2.88% , 83.07% overall)– bought at $2.54
PVCT: -0.01 to $0.82 ( -1.20% , -11.83% overall)– bought at $0.93
UPRO: 1.11 to $89.16 ( 1.26% , 2.60% overall)– bought at $86.90
YHOO: -0.01 to $36.29 ( -0.03% , 35.01% overall)– bought at $26.88

OVERALL: +0.38%

Posted November 25, 2013 by edmcgon in Open Thread, Portfolio

Thought for the day   Leave a comment

Bureaucracy is life’s way of telling you, “Don’t do this!”

Posted November 25, 2013 by edmcgon in Philosophy

Traders Corner   5 comments

The only thing different about the S&P 500’s technicals today is the Bollinger Bands, with Friday’s close right at the top of them. While the S&P 500 can still go up, and the futures are pointing up, it will be a slow trudge. Don’t expect any 3% up days here.

The S&P 500 levels to watch today:

UPSIDE: none.
LAST CLOSE: 1804 (top of the Bollinger Bands and the all-time high).
DOWNSIDE: 1802 (November 18th’s high), 1797-1798 (2 data points), 1794-1795 (3 data points), 1790-1791 (2 data points), 1788 (November 18th’s low), 1782-1784 (3 data points), 1780 (November 14th’s low), 1777 (November 20th’s low), 1773-1775 (3 data points and October’s high and the 20 day moving average), 1770-1771 (2 data points), 1764-1768 (5 data points), 1760-1762 (3 data points), 1752-1755 (2 data points), 1746-1747 (2 data points), 1745 (bottom of the Bollinger Bands), and 1734 (50 day moving average).

Posted November 25, 2013 by edmcgon in Daytrading, Investing, Market Analysis, Technical Analysis

Ed’s Daily Notes for November 25th   4 comments

Financial Times: US banks warn Fed interest cut could force them to charge depositors

Leading US banks have warned that they could start charging companies and consumers for deposits if the US Federal Reserve cuts the interest it pays on bank reserves.

Depositors already have to cope with near-zero interest rates, but paying just to leave money in the bank would be highly unusual and unwelcome for companies and households.

The warning by bank executives highlights the dangers of one strategy the Fed could use to offset an eventual “tapering” of the $85bn a month in asset purchases that have fuelled global financial markets for the last year.

Minutes of the Fed’s October meeting published last week showed it was heading towards a taper in the coming months – perhaps as soon as December – but wants to find a different way to add stimulus at the same time. “Most” officials thought a cut in the interest on bank reserves was an option worth considering.

Executives at two of the top five US banks said a cut in the 0.25 per cent rate of interest on the $2.4tn in reserves they hold at the Fed would lead them to pass on the cost to depositors.
Banks say they may have to charge because taking in deposits is not free: they have to pay premiums of a few basis points to a US government insurance programme.

“Right now you can at least break even from a revenue perspective,” said one executive, adding that a rate cut by the Fed “would turn it into negative revenue – banks would be disincentivised to take deposits and potentially charge for them”.

Other bankers said that a move to negative rates would not only trim margins but could backfire for banks and the system as a whole, as it would incentivise treasury managers to find higher-yielding, riskier assets.

U.S. banks could become very dangerous if the Fed follows through with this plan. I would avoid U.S banks for the near future, especially regional banks which are particularly vulnerable to this kind of Fed policy.

Klein Online: Israelis in secret trip to inspect Saudi bases. Could be used as staging ground for strikes against Iran

Israeli personnel in recent days were in Saudi Arabia to inspect bases that could be used as a staging ground to launch attacks against Iran, according to informed Egyptian intelligence officials.

The officials said Israel, Saudi Arabia, Qatar, Jordan and other Arab and Persian Gulf countries have been discussing the next steps toward possible strikes on Iran’s nuclear sites.

The officials said the U.S. passed strong messages to Israel and the Saudis that the Americans control radar capabilities over the skies near Iran and that no strike should be launched without permission from the Obama administration.

It was unclear whether the purported visit to Saudi Arabia by Israeli military and intelligence officials signals any real preparation for a strike or if the trip was meant to keep pressure on the West amid Israeli fears about the current deal with Tehran.

The trip came prior to the announcement today of the deal with Western powers that aims to halt key parts of Iran’s nuclear program in exchange for sanctions relief.

At a cabinet meeting in Jerusalem today, Prime Minister Benjamin Netanyahu slammed what he called a “bad” and “dangerous” deal, while affirming that Israel will not allow Iran to go nuclear.

Let’s assume for the sake of argument that this is accurate, and Israel carries off a strike against Iran. Iran may toss a few missiles at Israel, and then this will be done. Oil prices spike, then drop as soon as it’s over. Considering the Arabs are working with the Israelis on this, Iran can’t get too aggressive, without turning the entire Middle East against themselves. That’s a war they can’t win, even assuming the U.S. stays out of it (big IF!).

France 24: China creates air defence zone over Japan-controlled islands

Beijing on Saturday announced it was setting up an “air defence identification zone” over an area that includes islands controlled by Japan but claimed by China, in a move that could inflame the bitter territorial row.

Along with the creation of the zone in the East China Sea, the defence ministry released a set of aircraft identification rules that must be followed by all planes entering the area, under penalty of intervention by the military.

Aircraft are expected to provide their flight plan, clearly mark their nationality, and maintain two-way radio communication allowing them to “respond in a timely and accurate manner to the identification inquiries” from Chinese authorities.

Considering how much trouble China is going to with this, I tend to doubt this will cause anything more than a minor international incident, at worst. But it is certainly worth watching.

Posted November 25, 2013 by edmcgon in Economy, Federal Reserve, Market Analysis, News, Politics