Blog for November 25, 2009 [See ADDENDUM]

Good morning.

There are NO Cara 100 Ratings Changes to report at this time.

U.S. Initial Jobless Claims Fell 35,000 to 466,000 Last Week
I guess the robots will juice the markets to 11,000 today.

EDIT: it is only less than 500k probably because many are on holiday and too "busy" to fire people. so 466k newly unemployed the week prior to thanksgiving is pretty bad if you think in that context.

Happy Thanksgiving

Oh good, I wouldn't enjoy somewhat limited in conversational topics company of penguins anyway (Grin)

Highlights
Two prior weeks of big declines in the purchase index raised talk that however good October may have been good for home sales, November was likely to mark a reversal. But not so fast! The purchase index surged 9.6 percent in the Nov. 20 week, biting into mid single digit and low double digit declines in the prior two weeks (note MBA said the prior week was revised slightly lower but offered no further details). The sequence suggests that let down with the end of first-time buyer credits was limited to the beginning of November. Refinancing applications fell 9.5 percent in the week but still make up more than 70 percent of all applications, a reflection of extremely low mortgage rates including an average 4.82 percent for 30-year fixed loans.

Released on 11/25/2009 8:30:00 AM For October, 2009
Prior Consensus Consensus Range Actual
New Orders - M/M change 1.0 % 0.5 % 0.1 % to 1.5 % -0.6 %
New Orders - Yr/Yr Change -19.6 % -1.3 %

Highlights
The outlook for manufacturing cooled a bit in October. New orders for durable goods in October fell 0.6 percent, after a revised 2.0 percent rebound in September. The drop in October was well below the market forecast for a 0.5 percent boost. Excluding the transportation component, new durables orders fell 1.3 percent, following a 1.8 percent jump in September.

Released on 11/25/2009 8:30:00 AM For wk11/21, 2009
Prior Consensus Consensus Range Actual
New Claims - Level 505 K 495 K 460 K to 500 K 466 K
4-week Moving Average - Level 496.5 K

Highlights
Improvement in initial claims is picking up steam in what points to lower payroll losses for November's employment report. First time claims fell 35,000 in the Nov. 21 week to 466,000 (prior week revised 4,000 lower). The four-week average also broke below 500,000, down 16,5000 to 496,500. Continuing claims are also falling, down 190,000 to 5.423 million in data for the Nov.. 14 week, but here the change also reflects the expiration of benefits. Those receiving extended benefits fell 34,600 to 539,500. Continuing claims may be clouded but initial claims offer perhaps more reason for optimism than any other piece of economic data.

........nice call yesterday on the USD hitting deep into the 74 range and yes it happened overnight.

Grym- glad to see you are no fan of paranoid schizophrenics.

Ciao, Z.

Don't be a schizzy hater; I happen to know that we are being overrun by greenery which loves CO2...just kidding, but if the axis fits.

I'd guess that oil's complete lack of reaction to a 0.72% drop in the buck (and the break below support) is oil bearish. Add to that $WTIC's breakdown of its last 4 week trading range yesterday and it would be a great trade, except for the dollar weakness. That's why if you want to do your SCO trade, put in a stop in case the buck continues downhill and that ends up dragging oil up.

This stock has gained 15,900% from 03/2009 to present.

It was $0.21 and it's $33.49 now.

AMZN - estimates, target raised at Government Sachs. AMZN estimates were increased through 2011. Price competition is likely driving traffic to the site. Buy rating and new $146 price target.

I'm not a super fan of the ultrashorts (SCO, DUG, etc), I'd just outright short XLE if I wanted to get the exposure and if I wanted to double it, I'd short twice as much. But you can't do that in retirement accounts, I know.

Because of decay its hard to analyze DUG's performance against oil, so I will use XLE instead. Perhaps you can use DUG as a short term trading vehicle to short XLE for a brief period of time.

XLE looks to be "short term expensive" relative to $WTIC. (daily XLE:$WTIC RSI is high right now, because XLE didn't follow $WTIC off the cliff yesterday).

Playing the "mean reversion" game, and assuming $WTIC was going to tank or at least stay even, betting that XLE would in the short term drop more than $WTIC might be a reasonable trade. However, longer term XLE does not look particularly expensive vs. WTIC (look at the weekly XLE:$WTIC chart for that perspective) so I don't feel you have the longer term winds blowing in your favor.

I think if things go bad, oil will go bad faster than XLE - at least if history is any guide. Notice how on the XLE:$WTIC chart its trading at 0.75 XLE per barrel of $WTIC, and the high during the depths of the crash was 1.25.

Released on 11/25/2009 10:00:00 AM For October, 2009
Prior Consensus Consensus Range Actual
New Home Sales - Level - SAAR 402 K 410 K 385 K to 425 K 430 K

Market Consensus Before Announcement
New home sales in September fell 3.6 percent to a much lower-than-expected annual rate of 402,000. Supply on the market was steady and still elevated with months' unchanged at 7.5 months. However, it was a notable improvement from earlier in the year and especially against the year-ago level of 10.9 months. Apparently, the likely reason that existing home sales did well in September but not new home sales is that homebuilders were trying to keep sales prices up while those in existing home have been more willing on price concessions. The median price of new homes rose 2.5 percent in the latest month to $204,800.

About shorting oil right now though - I have to point out that often when $WTIC's daily RSI has gone to the 30 level (we're at RSI=34 now) oil has bounced, so shorting oil here seems somewhat risky unless you feel the trend has actually changed.

Shorting here, you are selling the breakdown, which will probably work if the overall trend in $WTIC has changed. If it hasn't, you're shorting at an RSI low.

My thought is Pres. Obama will increase troop levels close to 40,000 in Afg...Main thoughts are to keep troops safe, especially at X-mas time... body armor ? drones ?

http://seekingalpha.com/article/175053-google-uses...

Google is making waves!

IBM and INTC now looking weak as well. Strange market...

considering the amount of money they SHOULD be making, with borrowing rates at 0 and lending rates higher than that, i'm surprised also - tried to trade bac a couple of times, but kept getting stopped out - I don't get it, especially considering the fact that they will have 6-12 months more of that spread benefit - imho

... on a short week:

Market Internals update at 12:00pmET
- NYSE volume 320M shares, about 34% below its three-month average; advancers lead decliners by 2.3:1.
- NASDAQ volume 640M shares, about 35% below its three-month average; advancers lead decliners by 1.1:1.
- VIX index -1.25% to just over 20.00

TN,

in most cases it's just narrow low volume trading environment with little follow through. Sometimes though some unusual things happen - mostly thanks to low volume again. Some particular stocks make exaggerated moves, or whole market suddenly surges like crazy - I remember vividly Thanksgiving in 1999, huge upward market move while everyone was expecting normal boredom... That's exception though, usually it's just "sit out, with some occasional hunt and peck" days.

I remember 1999 well; the fed was so called worried then too...Paulson etc, per Bill's take on HB&B, were not however.

If only the next thing would emerge so I can lay this cash flow to my account...I know one thing, as you say, it is what it is at least for today.

First, I am not saying that their strategy is inferior. They do apparently have sufficient cash flow...have not really analyzed their BS, etc. I am saying this because of CS's emphasis on recession resistant Firms (ambidextrous term, as in easily manipulated. ie. sbux, whole foods).

I am saying in the short-to-medium-term, that I discount whether this is robust trading news...then again with the apparent(tricky)dollar strategy, and I have not looked at their RSI or stochastic's, advantage gos to the nimble(relative term...make out of it what you will, Bill((not Bill Cara of course)), Dennis and others on CNBC sure do).

edit:
http://www.reuters.com/article/ousivMolt/idUSTRE5A...

Loannetter,

"Grym, we both know how powerful media manipulation is. Is it also prematurely melting glaciers? Unfortunately we will never know the unbiased truth! I just wonder who does?"

A. There may be a real melting problem due to greenhouse gas or something else.
B. It may be a hoax built on a cyclical change.
C. It may be a case of jumping on a real problem, increasing the concerns to the point of making BIG bucks on it.

I don't know, but one thing is for certain in my opinion... it is just the kind of issue politicians love. Easy to raise to a level of religious fervor. A long time to work on it with lots of ways to make a buck, so the lobbyist dollars will flow for a long while.

I'm totally in favor of a drive to cut pollution. This makes second hand smoke look like a zero. But I remain skeptical as to the "crisis" mode which seems to driving it.

There are many scientists that refute claims about global warming, that do not get a look in by the media to put their point of view.

The market is about to stop benefiting from a falling $USD. Right now, $USD is down a huge 0.75%, but IWM is up only 0.13% and XLF is down 0.34%!!! I think Russell 2000 will go down if $USD drops below 74. At the same time, VIX is trading at the lowest levels of the year. Putting together the above two observations (and my previous observations about the market internals having deteriorated greatly over the past month), I conclude that the market is finally done like dinner and now is THE time to be buying puts. So I just bought some puts on the two weak sectors I am monitoring:

- February 2010 IWM $59 puts at $3.20
- March 2010 XLF $14 puts at $0.89

Having such puts (in addition to the March 2010 KRE $20 puts I picked up a couple of weeks ago) should give me the strength to close completely my ultrashort positions during large sell-offs (with the intent of re-opening them during rebounds) and not worry that the southbound will "run away from me." As we know, closing ultrashorts during large sell-offs is the right thing to do, since they lose A LOT during rebounds from such sell-offs.

loannetter -

Icebergs are nothing new. One sunk the Titantic in the mid-Atlantic.

Cheers.

HNU.TO is doing well today. My sell limit order at $9.80 was hit for the shares I added last week at $8.78. I have also just placed a sell limit order at $10.70 for 2/5 of the shares I purchased at $9.80 (which was my initial entry into HNU.TO). Too bad my trade size was not too large...

Is there any sanity in my desire to add to my TWM thats down 7%?

Dr Strangelove, Icebergs of this scale (230 bergs, some 90 feet tall!) in subtropical waters off New Zealand are new.

Vad, must be a slow news day for Strangelove to take my bait! Happy Thanksgiving and remember to pause for the millions of turkeys who gave their lives tomorrow.

Grym, I think we can all agree that regardless of the facts surrounding this debate-- we have raised awareness toward lowering air and water pollution and resource depletion on our beautiful mysterious planet. As Martha Stewart says, 'and that's a good thing'!

Negative divergence happening between Gold and Australian dollar. For most of this month, gold has been going higher but the Australian dollar isn't following suit. In fact, it's making steady lower highs. The Aussie is obviously weak if you pull up the AUDUSD, EURAUD, and AUDJPY daily charts. This is just a sign for caution regarding gold.

ALOHA !!

It looks as if more than just the "poultry" type TURKEYS are getting cooked for Thanksgiving!! POG shorts are basted and ready to be stuffed! More cranberry sauce please!

The POG in USD is breathing on $1200USD at $1193. Down under it is both the AUD and the POG rising together. The AUD is up today BIG closing at .932, while POG is at $1278AUD. It seems to be a RACE FOR PAR, where the AUD seeks par with the USD and the US POG seeks par with the POG AUD. Looks as if the ASX gold miners and explorers will be in continual demand, especially as the POG rises.

The POG denominated in Hong Kong Dollar has shown huge strength over the past week. As India CB buys more IMF gold and as Sri Lanka joins in(buys 10 tonnes) how much longer before the IMF is out of gold again? Where did the IMF get that gold and are they selling off any of the US gold reserves? With transparency like this who needs a "swamp"? I bet the IMF now wishes they just kept their trap shut about selling gold. That old con has totally backfired on them.

My PM holdings as well as my "high risk" portfolio has risen substantially over the past week, well into the six figures.

ON THE ASX
SRL-FLAT, still in a two month trading range between $1.55 and $1.70. Down nearly 5% on the week so far. Tritton came in with some good copper drill results. Good, but not outstanding like the PEM-Mt. Oxide grades.

SLR-Did a big opening spike up yesterday to $1.26 then ended down. I suspect that is management selling their recent options into the rally to some extent. Up 7.25% for the week on good volume averaging 1.3mil per day.

PEM-Up 5.25% for the week so far, average volume 1.04mil per day. There is a RIGHTS OFFERING, which I intend to participate in at $0.42AUD per share. I also have to say Paul Arndt has really done a superb job of turning this company around. I also have to say the huge copper grades at Mt. Oxide are just phenomenal great widths and grades above 6% ... not .6% but 6! On the other side it was a tremendous victory to buy back the Broken Hill silver forward sales at $2.50 per ounce while spot is way above $15. It cost $55mil to do but I believe the exposure to spot was a wise move.

SAU-Up 18.15% over the past week. Now in TRADING HALT, which should be lifted no later than Friday(Australia Friday is USA Thursday). I think it will put the icing on the turkey for me. I got in at the right moment but I failed to capture a large share block as I did not anticipate such a rapid gain on 11/23 of 14% due to drill results, but I bought more on the pull back the following day and just before the TRADING HALT. Now this is a pure exploration play with major Aussie and Japanese JVs. There is also the geothermal link to Olympic Dam, whereby a former WMC exec is on board at SAU and has ties to BHP through the WMC buyout of 2005. Why would BHP say NO to an alternate power source off the grid? SAU will keep its gold focus when it spins off the geothermal play in Q1 2010.

CTO-What can I say other than MANAGEMENT-MANAGEMENT-MANAGEMENT! Sometimes it does not matter how high the grades are if management continually drops the ball. When I was in Sydney in Jan 2008, I met with Chris Towsey, COO and geologist, and put the question to him on management and he gave not a glowing account of their past success, but he did assure me they made some lower management changes that would reflect better success with their milestones, so far CTO has not. One of the things I get leery of right off the bat is when I meet with execs, CEOs or COOs and they bring company promotionals. Out of all the Aussie companies I met with that year only CTO gave me a gold bar "paperweight" with the CTO logo on it as well as pens and a CTO journal, which I have not used. I still own shares but this one may turn out to be a "all boats rise" bet. I have not added any shares and the share price has been the mother of all trading ranges for a long time until it just broke out to the upside again, so some fundamentals must come forth soon or we will back to the same trading range again. To break the spell there needs to be a substantial increase in "production" and not "promises"! Its been my only laggard for now.

RMS-I bought RMS at the $0.41 range believing $0.40 was a floor based on the prior bounce off that level. It did bounce, but I sold at the $0.46 range(12% gain) and moved those profits into SAU. Until something breaks with the Dioro(DIO) quagmire this company seems to be stuck as well. I own no shares as I sold my entire position on the recent rally up.

HAPPY THANKSGIVING ...

For Thanksgiving here on the Big Island we will be joining my orchid farming comrade for Turkey Laulaus and Lilikoi sauce! Gotta go island style bra!

Me too...something is funny here...I agree with an earlier poster that the actual jobs decline was hidden. I am not saying that the market will do any specifics, although I have my wishes, but am saying that when the heck will we ever get the skinny or fat or anything remotely resembling the truth. Bill doesn't think that we should set ourselves up regarding truth coming from most of these guys, it would cramp their style.

Everyone enjoy their giblets and such, as the case may be. I did well on one small cap, but not so well on my UUP...did not expect to yet; is mostly a synthetic hedge to channel Seeking Alpha.

Night all and to all a good night...its right around the corner you know.

They are acting sick.

I am taking a few weeks off from the markets. I usually like to take a few weeks in Dec to read books and discover new music.

Signing off (but I will be lurking)...

I continue to be astonished at the denial of science by many on this blog. Read some books on carbon and climate change. Global warming and man induced climate change has been fairly well proven by science. It is not a guise, and it is not 'a consensus of scientists chasing research funds'. We know that everyone has biases. But the majority of scientists that have studied this phenonoum say it is real. When airborne carbon levels are higher the planet is warmer. Our climate will likely become warmer and more unstable in the coming century and beyond.

The atmosphere is not indestructible. Do you remember the ozone hole two decades ago? People in the southern hemisphere still pay a huge price for it with much higher than average skin cancer rates. When the ozone hole was found, the link to fluorocarbons was shown by science and there was quick worldwide action to reduce emissions. The ozone hole started to close. We likely headed off a far greater disaster by acting quickly. Were the scientists who showed this link also 'chasing research dollars’? We enjoy cheap fossil fuels now and force later generations to pay the cost. It is abhorrent.

Now, if instead you were to tell me that the link between climate change and the burning of fossil fuels has been fairly well proven but that we can't do anything about it, or that it is too costly, or that government will be unable to put forth proper regulations in this area, that is something that we can have a reasonable debate about. But not about the basic science.

"Real science, as opposed to a consensus of scientist chasing research funds under the guise of "global warming," has consistently produced unbiased evolving truths. For instance, do you think E=mc2 was initially embraced by the scientific community like "global warming"? Nope."

Rob Hopkins gives a compelling talk on the concept of 'peak oil' boiled down to a bottle of oil and what the energy return and business models of that bottle of oil represents, i.e., when and if the evaporation of oil will happen. He calls for "urgent and deep decarbonization".

http://www.ted.com/talks/view/id/696

I reject most of what you have said on the science. The books I have read, for and against, have given me insight on this subject, I would say greater than that of a scientist who has not read anything substantial on it. The carbon that was removed from the air and sequestered in coal and oil over tens of millions of years is being put back into the air in a few hundred years. It will have a destabilizing effect on climate and global temperatures- the open question is the amount of time it will take. Look at the poles. I've done my homework on the subject. Of course there are questions on the exactness of the science. There are open questions and unproven links in all of science. We still use it to make decisions. There are a host of other environmental and health problems associated with burning fossil fuels. We still have to worry about mercury in our tuna from the fallout from coal burning. If we didn't get scrubbers on some of our coal plants the problem would have been worse by now. Even at my "pay grade" I can understand this. I don't want another tax on society, but some governmental regulation is needed. Environmental controls are absolutely included. We are handing a damaged world to children. It is wrong. You did not answer the question as to why the science was correct on fluorocarbons but is wrong here.

fjd10595,

There well may be a "real" problem of global warming. But let's think about what we really "know."

We know:
• We've been told repestedly "the majority of scientists have studied this phenomenon and say it's real."
• We've been told this is a critical situation with dire consequences.
• What you state here is widely accepted.
• There are computer models of what claim this may lead to.
• The information comes from Experts.

The Experts "knew" Y2K was going to be a disaster.
The Experts "knew" a plane would not be used as a weapon.
The Experts "knew" there was no tech bubble.
The Experts "knew" the housing markets were not a problem.
The Experts "knew" how to save the financial markets.

All I'm saying is that a really scientific approach does not dogmatically assert the future based on the number of people, expert or otherwise, who say it is so.

Money is the universal human corrupter and scientists are as human as bankers. Crisis mode has been widely used and seems on the increase.
• Iraq WMD
• Bird flu
• Swine flu
• Economic meltdown

IMO the mass communication methods available today make it far easier to control the thinking of a few, a segment, or an entire population than ever before.

As one who has asthma, I am totally in favor of reducing air pollution. As one who drinks and eats, I want better controls on food production and cleaner rivers and oceans.

Getting this done universally will be a huge ongoing problem. China is among the worst polluters and who is able to influence or control this Goliath?

Pac Norwest
Disappearance of salmon, one of the most abundant, healthiest protein sources on the planet and keystones to the ecology of the region.

NA.
The bees: 50b mia. Observed with symptoms of Alzheimers and Parkinsons. Hmmm. Who's going to pollinate our crops? Trucked from region to region, fed corn sugar instead of honey, same lame monoculture stuff our diet is based on. The poor little creatures are being poisoned by pesticides and herbicides and overworked.

It's all a matter of time. How much of the real do we want to save? How much do we want to replace with counterfeit? Pity we choose to remain ignorant and compliant. Who's looking out for you and your children, grandchildren and great grandchildren?

Can't get no respect.

Follow the money! We know the plan there.