S&P index

Commodity Futures Charts

Monday, December 28, 2009

28 December after Boxing Day

Asia is having a good rally in the morning, HSI having a rally in low volume. Most Hong Kongers have put their monies into a new home in the past months. Hong Kong tycoons have urged its fellow countrymen to put monies into properties instead of stock market. The boom times are not coming back again when moms and pops are cash-strapped and funds are afraid to push when there may not be buyers at the top.

Probably, HSI is attracting some dumb funds from China. Meanwhile Wen JiaBao has pledged to dampen the rising China property market. Prices have risen so high that it is out of reach of the ordinary citizens, having to live 2 lifes to pay the mortgage.

State own enterprises went into the property market and bought a bundle using state funds, thus transferring profits to the property developers. Then the SOE bequeathed the units to its management as entitlements.

China manufacturers went abroad and bought whole units as staff lodging instead of renting.

I have this errie feeling that the world may face a decade long dropping properties prices. Which is imaginable in a relatively land scarce Hong Kong. However it may be possible because individuals may be holding on to multiple units.

The last plunge was not enough to wipe out the property developers. The plunge was swift and short. And Banks were willing to holdout.

Think the next one would be a major geopolitical, or celestial events. The market seem to be immune to any financial shock.

Meanwhile H1N1 has spread to a lot of species other than swine or homosapiens. to dogs, turkey, birds, etc.

Quote from Dr Niman:
" Currently, many countries are experiencing a reduction in the number of H1N1 cases, which will provide an opportunity for the H274Y sub-clades to become much more dominant in the next wave. The increase in H274Y has also produced more linkage to receptor binding domain changes at position 225, including lethal combinations of H274Y with D225G. "

H274Y means Tamilflu resistance
D225G means deep lung infection => Cytokine Storm

It takes a major headline like: cluster death of tens and hundreds of infected individuals within days to jolt the world into realisation that it is a Pandemic afterall.

Tamilflu resistance is spreading, deep lung infection causing Cytokine Storm is spreading (most evident in Ukraine), next comes H5N1 and H1N1 mixing.

All is peaceful and quiet after Boxing Day.

Just to mention that my wife got 90 USD as credits on her new credit card for FREE, and we went to a nice restaurant on Xmas day. The Bank (backed by a SWF) gives out monies for FREE literally.

I have been eyeing a 42 inch LCD TV for many years, finally bought a reputable Japanese brand new 42 LCD TV for 800 USD. It has 3 HDMI inputs, slot for reading SD card. MY wife was wondering with all the plastics, glass, electronics, logistics cost, how on earth is the manufacturer making monies.

A lot of the electronics manufacturers (TV, Cameras, Laptops, handphones) ridding of inventories in Dec (possibly they produced more than then forecasted, consumer demand was weak). One reason is that they want to bring back Cash, rather than wait for profits.

The other reason is that they want to ramp up production in 2010. However if a LCD TV sells for 800 USD, who is going to buy at 1000 USD ?

LEDs are not catching up (spells trouble for Samsung, LG), when its improvement is only marginal compared to LCD, and not worth spendings thousands just to go Green. (in California, they are having a law banning plasmas, and LCDs (not sure, but something like that)).

The paradox is that Consumers are expecting lower prices, while Commodities are rising. Hence businesses are stuck in between. Is this Inflation or Deflation ? As I mentioned in my post months ago, it is both Inflation and Deflation. and let the Economists find a new theory for this. (never let Bernanke box you up in his concoction, if his QE theory works, he would not have to rig the market).

Anyway a Princeton Economics PhD still means a lot. Anyone out there got a scholarship to offer for a Princeton Economics PhD ?

Sunday, December 27, 2009

27 Dec Bizzare

Today is the 3rd day of Xmas. So far two headline grapping events has happened, both being Bizzare.

First, Susanna Maolo (a Swiss Italian, probably a Tyrolian) sprang on Pope Benedict and caused another cardninal to break his leg. This is her second attempt in 2 years, and she wore the same red shirt. Shortly after the incident, Vatican spokesman said Susanna is forgiven. Conspircacy has it that she is the Secret Daughter of the Church.

Next, the son of a top Nigerian Banker tried to detonate a bomb onboard of a Delta airline plane about to land in Dretriot. Luckily he got himself burnt. Looks like some crude homemade device.

The world is still bickering about China being the culprit for the failure at Copenhagen summit. China came out with a detailed recount of the events. Western media has it that Obama barge into the meeting China was having with Brazil and other developing nations. And Obama ordered a discussion.

Obviously, this is another ploy by White House to show the manhood of Obama.

China came out with a counter narration, saying that it was an amicable event.

Wen JiaBao would come to realisation that the world is still very much dominated by White Power (no doubt Obama is Black, he is working for white interest). And Gordon Brown has turned on China as well, by accusing China for stalling.

Soon, China would recede from active engagement with the western power. From the Olympics torch fiasco in Paris, to the now Copenhagen Summit, these are repeated acts of racism by the Western Power.

Wen JiaBao has now to reign in those people in the government who are working for western interest than national interest.

Wen JiaBao has realised that it is possible to achieve economic growth without a bubble stock market, where the only people who profits are the western funds.

Remember the province head of HeLongJiang, where a lot of coal mines are, publicly cry out if China should exchange GDP for Blood, the blood of coal miners who die in national coal mines incidents.

Indeed Hu JinTao and Wen JiaoBao is changing strategy from accelerated growth to a more balanced and environmentally friendly growth, i.e. commodities acquisition would slow, factory expansion would be cut back. Meanwhile trying to provide employment to the masses.

Nov 2010 is mid-term election. Probably Bernanke would hike only in Dec 2010. this would continue the weakenig of USD towards 68-70 (though the recent rally was quite convincing). FED providing unlimited support to FRE, FNM, the new healthcare plan would hasten the deficit, Congress raised the debt limit again. Dollar weakness is still mainstream. While Japan countered with another record deficit to fund its social programs. USD and JPY are racing to be the most debt laden currency, a.k.a. the least worthy currency.

Euro, GBP, Gold, Crude should begin the next leg up. With AUD reaching par with USD, another headline grapping event. (like GBP breaching 2.0 with USD).

Bernanke take is that the unemployment would not allow Inflation to take hold. Yes 10 percent of the population cannot chase prices, but the other 90% need to feed, to travel, to keep an household. Higher crude, higher gasoline, higher heating oil, higher airline tariff (guess what, most airlines are hedged for lower oil price while crude is rising).

Now 10 year yields is on the verge of breaking to the upside.

FOMC and Bernanke would be sidelined in 2010, when events get out of control. Rising inflation holds back consumption, Businesses fighting rising raw material prices while customers recede. 2010 would see Businesses going into unemployment literally (when more and more declare bankfrupt or beg for TARP).

Thanx to Blankfein and high frequency trading firms, they would try to sustain Equities, the result of which is not known. Guess what, now the rumours mills has it that Blankfein would take Goldman Sachs private (in order to take profit on the 200 dollars share price).

One would not declare the Healthcare bill as breakthrough, US has the most complex and expensive healthcare system, while its infant mortality rate is among the highest compared to Europe, and even Singapore (with the lowest infant mortality rate). Most countries healthcare system provides comprehensive healthcare to all, while in US only 84% of the population is covered. The healthcare bill is not doing much to cut cost without the public option. Businesses would be saddled with additional healthcare cost.

Obama would move to his next target, the Afghanistan war and Israel/Paliestine topic. One should watch "Lions for Lambs" starring Robert Redford, Tom Cruise and Maryl Streep. The Lambs sitting in the offices would be pushing out the Lions onto the battlefield with new strategy. To achieve the first success in a short time of 9 months for Obama, the military has to put up more soldiers for sacrifice (bait). (while more and more young Americans volunteer for military service to forgive their student loan amidst dwindling employment)

Next come the 2009 year end deadline for Iran to comply. Would Obama make the gamble, instigate a war to raise his popularity. I am sure he is pondering this as I am doing now.

All is well, thanx to the capable Ralph and bungling Timmy. All is not well because it all seems so well. It is Bizzare indeed.



now things are getting weird, with Wormholes in Norway, Thailand, China and pyramid in bright daylight over Moscow.

Thursday, December 24, 2009

24 Dec Healthcare bill passed


I do not like Obama but I applaud the Healthcare Bill. as it prohibits insurance companies from denying insurance to those with pre-existing conditions. Make employers cover insurance for all workers.

On the other hand, it means less profit for insurance companies while they get more customers. For sure the Federal Debt is increased significantly.

Congress raises US government debt limit to sustain for 2 more months. Treasury issues more bonds, Fed buys those bonds through proxies. Fed prints more monies.

Meanwhile SPX now at 1125.

Next year the risk trades would likely return, and some impatients hedge funds are positioning before the year ends.

Last year the Xmas rally comes after Xmas, this year by rule of Alternation, it comes before Xmas, would it sustain through Xmas into 31 Dec 2009 ?

Nonetheless SPX 1150 is the next target, questions is how it is going to get there.

Gold trying to make a comeback, held 1074, now at 1100. If it is successful, 1320 is the target, (the original target by the way). If Gold clears 1130 and then 1175, the uptrend is intact. That also means SPX may be in range ot 1150-1170. USDJPY likely to retest 85.

Obama returning to Hawaii for Xmas, somewhere warm.

Meanwhile WHO announced that swine flu may have peaked.
am thinking it has peaked 2nd wave, the disastrous 3rd wave is coming, when the flu is returning as Tamiflu resistant and with a 225 mutation, meaning more disastrous. Perhaps in some countries we have the combination of H1N1 and H5N1, fatal variant spreads like fire.

HK market has been faltering for the past week, perching on 21000. Let see if the new SPX high can induce some buying when HK market reopens next Monday.
Otherwise the worse scenario is DJIA, HK and other markets are waiting for SPX to finish its act.

23 Dec Cheating Galore / Is this it ?

In Asia, investment houses dumping shares, debts, derivatives into self-invented ETF and reselling to public, when selling shares see no willing buyers. HK developers sell one condo unit at 57 million USD to grab headline and then quietly sell other units at subpar price to same buyer (stolen funds from China). Housing agent playing tricks on unknowing buyers, creating buyer panic when telling buyers prospective buy has been bought, hence need to pay premium for next unit. Rag and bone man stuffing wet pamphlets inside paper boards and sell for higher price. Cheating galore, thanx to Ben Bernanke and Obama.

Meanwhile, is that all SPX 1221 ?

Monday, December 21, 2009

21 Dec Snow, dollar falling like snow flakes.


Price for US/Israeli Overt Air Strike against Iran (Rule 1.8 Applies) at intrade.com


US/Israel airstrike over Iran. Expiring Dec 31 2009 contract.

Snow covered Europe. People not able to get back home on time for Christmas. Not much to do at home.

Nobody is expecting much in the markets. Like this is the moment of perfect silence.

Instead of leaping up, GOLD plunged by almost 130 dollars.

another bout of USD weakness with a Equities Xmas rally into January. DXY should hit back to 71-72. Then start the multimonth long USD rally with a big correction in Equities.

Should be quite a good Xmas present for DXY to go from 77.65 to 71. A bonus of sort.

Sunday, December 20, 2009

GOLD

here is a bearish article on GOLD, after it hits 1100 and bounced off.

http://www.thestreet.com/storycomments/10649092/1/gold-etf-charts-an-updated-view.html

Friday, December 18, 2009

18 Dec Hopenhagen -> hoping for the wrong thing

The Taiwanese had a survey to select the most popular Chinese Character for this year. The consenus of the majority is the word "HOPE".

Copenhagen is now called Hopenhagen. If the world manage to clinch the Climate deal, then we would call it Hopenhagen for perpetuity.

One obvious beneficiary of such Climate deals are the Carbon trading exchange (co-owned by Goldman Sachs), the Green Technology companies, Boon Pickens with his Wind-Farm, and the Governments with their Green Tax.

Heard on BBC that nations would levy tax on imports, based on their carbon limits. Example an IPOD would cost more.

So far most businesses are clearing stocks end of year, with massive discounts on existing inventories.

Implications is that we would move into a higher tax environoment in coming months and years.

As well as inflations on staples food and necessaries. Due to climate change, droughts, floods, staples food are harder to come by. Developing countries like Indonesia, Thailand, with their crops supplies would grow in prominance.

The goldilock business environment from 2005 to 2007 would not come by. Instead businesses are continuing to cutdown workforce. With a lot of backoffice operations going to India, Philippine, Mexico and China. US businesses would continue to downsize when earnings pursuit seems to be the only goal of the CEOs. That means fewer and fewer people are willing to spend.

Natural resources coompanies would slow down if not cease to increase capacity. that would drive prices higher. Natural resources companies would face burden of Green Tax and hence have to mitigate with higher prices to consumers.

The next ten years would be payback time for homosapiens.

As months agoo, I have prediced that the next wave of crisis would be among Sovereign Funds. The next wave to come would be Capital Control. Nations would erect controls to prevent those speculative or investment funds from fleeing, along with more Sovereign Funds to fail.

Imagine Blankfein, Diamond running to Timmy for help when their monies get trapped in some foreign government bank vault.

China has given the warning that they do not have that much more USD to spend on Treasuries, as their holding of USD is diminishing due to the reduction of Trade Defiticits. To sustain all the spendings of the Congress and the war in Afghanistan, Bernanke has to overwork the printers on Christmas day.

(by then paper notes would be just paper).

The day the FED is audited for real, the FED would cease to exist.

Without the FED, would you honour my 100 dollar bill ?

It is all about HOPE, no more trust.

This is the long term scenario, short term I am looking for a Christmas Rally to complete SPX 1121. Last year Christmas rally happens after Xmas into 1st week of 2009, then hero Jerome from SOCGEN threw in 50 billion to short DAX Futures.

Now the market is on a tightrope.

Based on alternations, the XMas rally would happen about next week, driving Euro, SPX, Crude, Commodities higher. Some would make new high.

A lot of seismics activity around, we just had the most grandeur undersea volcanic eruption and the Philippine volcan Mayon impending eruption.

Saturday, December 12, 2009

12 Dec FOMC next week

FOMC wold decide what would happen to Euro, Gold and stocks.
Either Euro retake 1.5100 towards 1.5500, Gold to 1200 then 1300,
and Stocks break 1121 once and for all towards 1150.

Meanwhile Paul Krugman wrote an article sort of asking for another 2T of asset purchases by the FED.

Picked up a lot of chatter on UFOs. including the one Moscow claimed as failed missle test over Norway.
http://thealienproject.blogspot.com/

Thursday, December 10, 2009

10 Dec AVP Alien versus Predator H1N1 vs H5N1 => H1N5 (I named it !!!!)

Tomorrow is my kid birthday. Happy Birthday !!!!

http://www.dowell-netherlands.com/2009/12/h5n1-h1n1-cluster-in-dien-bien-vietnam.html

There are now occurrances of H1N1 and H5N1 mixing. We should expect to have more occurrances surfacing in Egypt and South China.

Now Tamiflu resistant strain and H255G (one that cause Cytokine Storm) is fast spreading. While the public is little aware.

The 3rd wave is rising (as in Elliot Wave), the most destructive. So far most nations are happy distributing Vaccines as their response to the pandemic.

Most scientist is expecting this pandemic to be mild as the mortality rate is only 0.048%. As usual, the opposite happens.

When the fast spreading H1N1 merge with the lethal H5N1, we would have H1N5. You touch, you die. Remember, I named it here.

The sad thing is that the Vaccine may cause long term effects, it degenerate the recipient's neurological system in old age.

Meanwhile, the stock market is happy settling down. No panic. Even when Dubai, Greece are facing sovereign risks.

Suddenly it has gone quiet with Iran and Israel, a deafening silence.

Gold is dropping, always presenting itself as a Xmas gift.

As long as Bernanke is there, there is always a reason for GOLD to exisit as the beacon of truth. It is like the Fellowship of the Ring, and Bernie is the evil Sauron. With Bernie confirmation for a 2nd term, GOLD Bull market wuld last for another 4 years. Hence 2010 is the year when the Inflation horseman rises, with the peak in 2012, when the world is caught up in a flame of hyperinflation.

In 2007 and early 2008, the world was expecting Stagflation, which never came. Instead a close call to Depression.

In late 2009, the world is expecting slow growth in US, normal growth in other countries, especially faster growth in China, Asia.
Which would not come, and either we have another trip to Depression, or a High inflation slow growth (Stagflation).
2010 to 2012 would be known as the years of Great Inflation vs Great Depression.

Crude has been staying subdued even in a very bullish Stockpile (lower than expected inventory) report on Wednesday. It is like a crouching tiger waiting for the time to pounce.

Now the world economist has reached a consensus that Asia would have robust growth next year. Insiders have resumed buying after selling most of the time.

For China 4th quarter to 1st quarter next year is a pullback period, when production volume decreases. The China stock market would likely peak out below 3500 (for SHCOMP) and await further signals next year. Chinese New Year is on 14 Feb 2010.

What I know is that some US companies are now cutting back budget for next year.

SPX would stage another rally after this down leg into 1080, and perhaps attempt 1121 (50% retracement) in a thin Christmas market. If it breaks, it would attract a lot of buying and relieve those Hedge Funds who have problem selling in thin markets.

the higher it goes, the more severe would be the subsequent drop. As a Bear, you just wish for a mighty P2.

Tuesday, December 8, 2009

8 Dec China and Gold frenzy

The China government finished some working meeting and set objectives for next year. Essentially, it would be stimulating internal consumption. I.e. a stronger Yuan and a population with more monies to consume.
Though it may be holding back on loose credit, less speculative monies.

As Chinese New Year is on 14 Feb 2010. we should expect Gold jewellery buying to pick on in Dec and January.

Would not be surprised if some government agencies come along and talk about Gold buying. Shanghai has a Gold future exchange. Dubai selling Gold, while China picking up. 1226 is hardly a top. It is a matter how long they want to hold Gold down, and some smart Alec comes along and mop up.

Long time ago, the World doubt if Chinese farmers can afford a Television. They saved up an entire year and bought a TV. No matter how high GOLD rises, it is always a treasure, and more and more farmers would be buying, though not as many ounce as before. There is an insatiable demand out there.

Monday, December 7, 2009

7 Dec Asia open weak

So far HSI dropped, Asia generally weak, though not depressing. Meanwhile EURO holding below 1.4900, looking weak.
It is now early morning Europe. Let us see what the Brits and French decide to do.
The better Employment Figures have given the carry traders a scare. Probably a lot of weak longs taken out.

Saturday, December 5, 2009

5 Dec Gold SPX

now SPX has reached 1119 and faced lots of selling, 1121 is the 50% retracement. It is facing higher high and lower low. Hence the Real Bulls and Bears have come out into the market.

Even the China market is showing zig-zag patterns daily. SO far the China market has not exceeded the high of SHCOMP at 3500 back in July. The gyrations since then has probably sucked in enthusiastics monies from the massess. Essentially the China government is not happy about Morgan Stanley, Citibank, BoA-Meryll Lynch making monies from derivatives contracts with China state owned companies. Any attempt for these firms to fleece the China people is frowned upon. Upside is limited.

Bulls believe the improving Data would improve further.
Bear believe the Rally is overdone.

I am in the Bear Camp. Data has softened for ISM, etc. And the employment data is getting stranger. The major employment comes in Healthcare and Education.

Next week, the Bulls would make the Final push towards 1121.

When Geithner was interviewed by CNBC on Thursday. He said that the stock market recovery is good, "but do not overdo it". And he repeated refuse to comment on the valuation of the stock market. And now he is at loggerheads with Lord Blankfein over Bonus payment. Some PR gimmicks ? Good guy, bad guy ?

Would Lord Blankfein, Diamond, and friends decide to unseat the Democrats in the coming midterm. Conventional wisdoms say not. What if Atlas rugged ?

In next week Hopenhagen Climate meeting, there would be major pledges to cut emissions. Meaning Government would have to divest their stimulus monies into retrofitting their economies and industries. Perhaps to accept a lower GDP growth. And the world economies cannot afford to grow as fast to pollute as fast. While Green technologies is still developing.

Gold pull back almost 78 dollars from 1226.30 to 1148.22 in 2 days. This is a sign of topping but not the top. Having coonsolidated for so many months from March 2008 to June 2009, a span of 15 months, a rally of 5 months seem short.

Would Gold do a leap of 180 dollars in 5 days ?

From the low of 682, 2x = 1384, a 100% gain, not so ambitious compared to some Equities with 400%, 500% gain.

Supply and demand is not the factor, look at Crude with a glut of supply it still holds 75 well. In fact Crude is consolidating for 110, if not 200 when military conflicts break out. Think Abu Dhabi, Saudi may want to replenish their coffers after the Dubai debacle.

In 2010, we would see Israel bombing Iran, while Iran goes into the last stage of weaponisizing its plutonium. Natanyahu would be making secret visits around the region to seek air rights, etc.

Troops surge in Afghanistan to 100,000 for US is probably a mask for ground action in Iran. Oppositions to Ahmadinejadd has grown and probably Ahmadinejadd should be planning refuge now, otherwise face the same fate as Saddam. Imagine Admadinejadd extradited to Israel to face a Jewish court.

World is reporting a subside of H1N1 infections. Wave 2 has peaked. And next we have Wave 3, the spread of Tamilfu resistant and lung infection mutated H1N1. OR worse we may have a combination of H5N1 and H1N1. The rise would be seen in Jan-Feb.

If you know what is coming, there got to be a big welcome party right ? and we have not seen it yet.

There has to be a defining moment to mar the end of P2 and the turn into P3. So far we have not seen it.

We have another 13 trading days towards Christmas Eve. 31 December is full moon.
Did Charles Nenner got it right ? It is going to be a Christmas unlike others.

Obama getting his Peace Prize on 10 December, while enroute to Hopenhagen.