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#1 TTHQ Staff

TTHQ Staff


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Posted 31 August 2011 - 06:55 AM

The VRTrader.com VR Silver Newsletter - Wednesday 8/31/2011
"Tools for the High Performance Trader"
Copyright 2011, All rights reserved.
Redistribution in any form is strictly prohibited.
LEIBOVIT FILES | by Mark Leibovit
Leibovit Files
Wednesday, August 31, 2011


Opening Comments

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Stocks - NEUTRAL

All the world's central bankers know how to do is print money. And, frankly, that is all you need to know. So long as they as continue to do this, the seeds of another financial armageddon are being sown. The question is whether they will be successful in financial engineering an economic recovery or just another stock market rally. So far, all they have done is line the pockets of Wall Street and traders. Home prices, jobs and investor confidence have been decimated. The S&P 500 touched yesterday. As you know, I've been looking for a bounce to 1230, maybe 1250. Markets are a bit 'overbought' here, but with Obama coming out with his new 'jobs' program after Labor Day and the FOMC meeting on September 20-21, expectations are high and the market could see some further upside progress. That said, I remain NEUTRAL on the market. Please note that the Dow Industrials declined over 2000 points from the May high to the August low and has now retraced half that amount or 1000 point s. Usually, the wisdom applied in bear markets is that once you see a 50% retracement, then watch out below! Those who use Fibonacci numbers would instead apply the .618% rule which would equate to 12,000 in the Dow Industrials (now 11,600) and 1267 in the SPX (now 1220). Overall, I am not ready to call the launch of a new bull market, though it is legitimate to argue with an accommodative Fed, an election year next year and the fact we are coming out of a seasonally negative into a seasonally positive period, we should be thinking the glass is half-full. I am taking it one day at a time. For now, I am trying to give the upside the benefit of the doubt into September - though it appears it may only be another 'dead-cat' bounce.

Gold - BULL -

Barrons Magazine this past weekend headlined "A Flashing Yellow Light on Gold" saying: "With gold commonly used as a hedge against a falling dollar or even a falling economy, that might seem like oxymoronic advice. But that's the word from MKM Partners' derivatives strategist who argues that gold's trading patterns suggest the SPDR Gold Trust (ticker: GLD) is poised for an even larger correction than has already occurred." This is bullish. In all fairness, Barrons has a reputation for being bearish on just about everything. On the flipside, CNBC was running a whole story today about touring a gold mine and watching a bullion bank in operation. Bob Pisani at CNBC was grinning ear to ear, so he must have been long gold today as it rallied $50.00 an ounce back to the 1840 level. This is bearish. Interestingly, we're getting mixed input. I think what is happening is clear. Few really understand gold. What they don't understand they don't buy. Buying internet stocks with no earnings made more sense back in the late 1990s, but buying gold with a 6000 year history of surviving all countries and currencies somehow makes less sense. Gold's strength is an embarrassment to Wall Street and Central Bankers. It is 'F' on their report card. A theoretical a 'head-and-shoulder's pattern can be discerned in the daily chart of gold and with a little imagination you can 'measure' gold down to potentially 1500, particularly if the recent 1700 low is broken. That wouldn't change the bull market and, in fact, would precisely test the rising 40 week moving average. Still, it would give a lot of investors (myself included) some significant indigestion. I am more in the bullish camp, thinking that seasonality and current world fundamentals dictate higher prices in the weeks and months ahead with my next big target (once we cross 1906) being 2200-2300. Whether we get there now or via detour to 1500 will be known 'in the fullness of time'. Investors hold on. Traders, pay attention!

Bonds - NEUTRAL -

Even though bonds upticked yesterday and still feel they are extended and should retrace further. Pimco's Bill Gross was on CNBC's Larry Kudlow show this evening reiterating his feeling that Treasury bonds are a buy, that is, he is still looking for lower rates. Short-term, I feel aggressive traders would be short the bonds for a bit more of a correction in coming weeks and then perhaps we can see bonds once again turn higher vindicating Bill Gross's view. Here, I have decided to remain NEUTRAL.
August 31 - September 2, 2011:
Wednesday Aug 31:

MBA Purchase Applications
7:00 AM ET

Challenger Job-Cut Report
7:30 AM ET

ADP Employment Report
8:15 AM ET

Canadian second quarter GDP
8:30 AM EDT

Chicago PMI
9:45 AM ET

Factory Orders
10:00 AM ET

EIA Petroleum Status Report
10:30 AM ET

Farm Prices
3:00 PM ET

Earnings: Bombardier, Canadian Imperial Bank of Commerce and Reitman's

Thursday Sep 1:

Chain Store Sales

Motor Vehicle Sales

Monster Employment Index
6:00 AM ET

Jobless Claims
8:30 AM ET

Productivity and Costs
8:30 AM ET

Bloomberg Consumer Comfort Index
9:45 AM ET

ISM Mfg Index
10:00 AM ET

Construction Spending
10:00 AM ET

EIA Natural Gas Report
10:30 AM ET

3-Month Bill Announcement
11:00 AM ET

6-Month Bill Announcement
11:00 AM ET

Fed Balance Sheet
4:30 PM ET

Money Supply
4:30 PM ET

Earnings: H&R Block and Toronto Dominion Bank

Friday Sep 2:

Employment Situation
8:30 AM ET

Earnings: Campbell Soup, Canadian Western Bank and Laurentian Bank

Market Summary:

After falling at the open following a disappointing consumer confidence report, the market recovered its losses and hit better than three-week highs as the Fed supported moves to boost the economy (See section for BONDS). After trading down nearly 110 points, the Dow Industrials gained 20.70 or 0.18% to close at 11559.95. The S&P rose 2.84 or 0.23% to 1212.92. Riskier stocks did even better with the NASDAQ jumping 14.00 or 0.55% to 2576.11 and the Russell 2000 rallying 3.43 or 0.47% to 728.08.

Economically sensitive stocks led the advance, including commodity shares, (XLB +0.84%, XLE +0.59%, XLI +0.85%, and XLY +0.46%) after the Fed signaled moves to help the economy and as traders gear up for Obama's upcoming plan to create jobs.

In contrast, Financials fell (XLF -0.68%), the only sector to do so, after a weak bond auction in Italy raised concerns about the debt crisis while a letter from the International Accounting Standards Board questioned the European banks' inconsistent writedown on Greek sovereign debt.

Meanwhile, defensive stocks barely budged (XLP +0.26%, XLU +0.04%, and XLV +0.33%) as traders shifted into stocks more likely to advance because of expected upcoming economic stimulus.

Despite recent outperformance by the riskier, economically-sensitive stocks, only the defensive sectors ETFs are trading above their moving averages. XLP and XLU are above both their 50-day and 200-day moving averages while XLV is above its 200-day moving average but not its 50-day moving average.


Transportation stocks outperformed with the other economically-sensitive groups. The Dow Jones Transportation Average jumped 65.34 or 1.41% to 4683.96.


Precious metals rallied following the disappointing consumer confidence report and growing credit concerns in Europe (See section on Dollar and Currencies). The expectations of economic stimulus from the Fed and/or President Obama is also lifting the metals. Gold rallied 46.60 to 1835.10, more than recovering its Monday losses. Silver rose 0.47 to 41.35, platinum jumped 31 to 1851, palladium gained 21 to 773, and copper was up 0.0320 to 4.1415.

See comments above or for more in depth coverage of all the week's action, subscribe to the Leibovit VR Gold Letter at www.vrgoldletter.com.

Spot Uranium traded 50.50 and is slowly giving up recent gains. Uranium has swung from the June 13, 2007 high of 154.95 down to 40.00 and recently backup to 73.00 until the Japanese earthquake. Since then, we're trading between 52.00 and 62.50.

Treasuries jumped after the weak consumer confidence report, after one Fed official said that they should ease even more, and increasing credit risks in Europe. The long bond future rallied 1 24/32 to 138 18/32.

Charles Evans, the president of the Chicago Fed, said that the Federal Reserve should take further easing steps because the economy is "moving sideways" and the labor market is in a recession-like state. "You could argue that maybe we should ought to be looking for a little more data to see if we are going to get out of this period of weakness. But I don't really need to see a lot more data to understand that we have not achieved escape velocity and we need to do better," he said.

There was no clear consensus among Federal Reserve officials at their Aug. 9 meeting about what the best next easing step would be, according to the minutes of the meeting released on Tuesday. Options on the table included more asset purchases, increasing the maturity of the Fed's balance sheet or cutting the interest on excess reserves the Fed pays to banks. After the discussion, the central bankers decided on a "measured" move - to change the language of the statement to indicate they thought their benchmark interest rate would stay near zero until mid-2013 and wait for lengthy discussion about easing at a two-day meeting next month. Some on the FOMC wanted the statement to say that the FOMC would keep rates low until the unemployment rate fell to a specific target or setting an inflation target. But other officials were concerned about how to pick a target. The minutes show that the Fed officials did not see a recession coming but were worried that the economy was vulnerab le to shocks. The FOMC held an unscheduled meeting to discuss possible failure by Congress to raise the federal debt ceiling and what actions they could take if "disruptions to market functioning posed a threat to the Fed's economic objectives."


Oil rose as the Fed discussed ways to boost the economy and as the uncertainty in Libya supports prices. Crude oil was up 1.63 to 88.90, its best level in nearly three weeks.


The US Dollar Index rallied amid rising debt fears in Europe after a weak bond auction in Italy. The US Dollar Index rose 0.262 to 73.983.

The Italian government sold 7.7 billion euros ($11.1 billion) of debt, including 3.75 billion euros of the new 10-year benchmark bond. The sale produced an average yield of 5.22%. Bids for the 10-year supply exceeding the amount on offer by just 1.27 times.

European financial institutions have been inconsistent in taking losses on Greek sovereign debt, the International Accounting Standards Board, which writes accounting rules, warned in a letter to Europe's market regulator. "This is a matter of great concern to us," wrote Hans Hoogervost, chair of the International Accounting Standards Board, in a letter to the European Securities and Markets Authority dated Aug. 4 but released on Tuesday after it was reported by the Financial Times. The newspaper said the letter was prompted by concerns that some European firms haven't made enough provisions for sovereign debt losses. The newspaper, citing an unidentified person familiar with the correspondence, said the letter reflects worries about the approach taken by BNP Paribas and CNP Assurances .

The Euro fell 0.47% against the Dollar.


The Conference Board said its index of consumer attitudes sank to 44.5 from a downwardly revised 59.2 the month before. Economists expected a reading of 52.0. The index is at the lowest level since April 2009. Consumers' outlook also deteriorated sharply as the expectations index plunged to 51.9 from 74.9. The assessment of consumers' present situation fared better with the index slipping to 33.3 from 35.7.

Home prices rose 1.1% during June from May but are down 4.5% over the past year, according to the closely followed S&P/Case-Shiller 20-city composite home price index.

Canadian TSX, TSX Venture and Canadian Dollar Commentary for our Canadian clients updated for Wednesday morning, August 31, 2011:

The Canadian market rallied and bested the US's performance as rising metal and oil prices lifted the TSX. Solid earnings from Bank of Nova Scotia (BNS.TO +2.20%) also helped. The TSX jumped 129.86 or 1.04% to 12634.71.

Canada's overall current account deficit widened by $5.3 billion to reach $15.3 billion in the second quarter, according to figures released this morning by Statistics Canada.

The agency also reported this morning that its Industrial Product Price Index slid 0.3% in July - largely due to declines in chemical products and motor vehicles, while the Raw Material Price Index fell 1.2%, mineral fuels the major factor there.

Energy 280.77 3.26 (1.17%)
Financials 174.12 1.18 (0.68%)
Health Care 51.90 -0.19 (-0.36%)
Industrials 105.67 1.21 (1.16%)
Info Tech 29.42 0.55 (1.91%)
Metals & Mining 1,219.02 18.12 (1.51%)
Telecom 99.27 -0.05 (-0.05%)
Utilities 221.33 1.74 (0.79%)

Resistance is 12,715, 13,000, 13,120, 13,517, 13,901, 14,089, 14,329, 14,715, 15,000, 15,600. Support is 12,066, 11,617, 11,000, 10,700.

The big rally in gold and the other metals lifted the TSX Venture to a gain of 32.90 or 1.86%, closing at 1802.76.

Resistance: 1833, 1851, 1954, 2107, 2127, 2254, 2291, 2400, 2465, 2535, 2575. Support: 1730, 1675, 1340.
THE CANADIAN DOLLAR (using the FXC Exchange Traded Fund):

The Canadian Dollar slipped ever so slightly as the US Dollar rallied but the Canadian currency got a boost from rising commodity prices. FXC was down 0.06 to 101.68. While the Canadian Dollar was down 0.09 against the US Dollar, it rose 0.35% against the Euro.

Resistance is 101.72, 103.08, 105.59, 108.00, 110.00, 113.00. Support is 100.21, 99.88, 99.77, 95.96, 93.20, 92.50 91.82, 91.00, 89.75, 87.50 and 85.18.

Below is a list of VRs for ETFs and a list of VRs for Canadian shares.

Subscribing to Metastock and my 'Add-On' is the way to go if you wish to selective check or scan for a more comprehensive list of VRs.

.. CANADIAN STOCKS ... Canadian Stocks








AGZ iShares Barclays Agency Bond
AKP Alliance Ca Muni Incm Fd Inc
BABS SPDR Nuveen Barclays Capital B
BFZ Blackrock Ca Municipal Inc Tr
CIU iShares Lehman Intermediate Cr
DLBL iPath US Treasury Long Bond Bu
EIV Eaton Vance Insured Muni Bd Ii
GBF iShares Lehman Government Cred
GVI iShares Lehman Intermediate Go
IGU ProShares Ultra Investment Gra
LTPZ PIMCO 15+ Year U.S. TIPS Index
MIW Eaton Vance Insured Mi Muni Bd
MTT Western Asset Municipal Define
MZF Mbia Cap Claymore Managed Muni
NKG Nuveen Ga Div Adv Muni Fd 2
NXC Nuveen Ca Sel Tx Fr Inc Ptf
SCHR Schwab Intermediate-Term U.S.
VCSH Vanguard Short-Term Corporate
VFL Delaware Inv Fl Ins Muni Inc
VGSH Vanguard Short-Term Government
VMBS Vanguard Mortgage-Backed Secur
ZROZ PIMCO 25 Year Zero Coupon US T

FINANCIAL SERVICES Closed End Fund - Equity

AGA DB Agriculture Double Short ET
BSJE Guggenheim BulletShares 2014 H
DPK Direxion Daily Developed Marke
ELR SPDR DJ Wilshire Large Cap ETF
EUO ProShares UltraShort Euro
FJA Merrill Lynch Dep Embarq PPLUS
FOL FactorShares 2x Oil Bull/S&P50
FSG FactorShares 2x Gold Bull/S&P5
FWDD Madrona Forward Domestic ETF
FWDI Madrona Forward International
GRV Mars Hill Global Relative Val
GWF Wells Fargo Cap VIII
HYD Barclays High Yield Composite
IPE SPDR Barclays Capital TIPS ETF
IVOV Vanguard S&P Mid-Cap 400 Value
JJT iPath Dow Jones-AIG Tin Total
JZV Lehman Absc Corporation
PALL ETFS Physical Palladium Shares
SGAR iPath Pure Beta Sugar ETN
SHY Ishares Tr Lehman 1-3 Yr Trsy
TIP Ishares Trust Tips Bond Fd
UBN E-Tracs UBS Blmbrg CMCI Energy
USV E-Tracs UBS Blmbrg CMCI Silver
UUP PowerShares DB US Dollar Index
UUPT PowerShares DB 3X Long USD
VTWV Vanguard Russell 2000 Value ET
WDTI WisdomTree Managed Futures Str



BWZ Spdr Barclays Capital Shrt Tm
BYM Blackrock Insured Muni Income
CBND SPDR Barclays Capital Issuer S
CHW Calamos Global Dynamic Incm Fd
EIO Eaton Vance Insured Oh Muni Bd
ELD Wisdomtree Emerging Markets
GAM.B General American Investors Com
IMS Morgan Stan Insrd Muni Sec Sbi
ITIP iShares International Inflatio
JLS Nuveen Mortgage Opportunity Te
KTF Scudder Muni Income Trust
MIN Mfs Intermediate Inc Tr
MUAC iShares 2014 S&P AMT-Free Muni
MUAE iShares 2016 AMT-Free Municipa
NCO Nuveen Ca Mun Mkt Oppor
NMY Nuveen Md Premium Imf
NOM Nuveen Mo Premium Imf
NXE Nuveen Az Div Adv Muni Fd 3
NXR Nuveen Sel Tax-Free 3
PHB High Yield Corporate Bond
VNV Van Kampen Mer Ny Vmit
VOQ Van Kampen Mer Oh Qu Mun
ZF Zweig Fund Inc

FINANCIAL SERVICES Closed End Fund - Equity

AGD Alpine Global Dynamic Dividend
AGF DB Agriculture Long ETN
ALM Allmerica Securities Tr
BWX SPDR Lehman International Trea
CXA SPDR Lehman California Municip
DLBS iPath US Treasury Long Bond Be
DWX SPDR S&P International Dividen
EGF Blackrock Enhanced Govt Fd Inc
ERO iPath EUR/USD Exchange Rate ET
EZU iShares MSCI EMU Index Fund ET
FBM Focus Morningstar Basic Materi
FEU streetTRACKS Dow Jones STOXX 5
FHO First Tr Strategic Hi Incm
GDL Gabelli GLobal Deal Fund
GII SPDRs FTSE Macquarie Global In
GRWN iPath Pure Beta Softs ETN
HGI Claymore/Zacks Internation Yie
IDV iShares Dow Jones EPAC Select
IDX Market Vectros Indonesia
IGK Ing Groep N.V.
IPU SPDR S&P International Utiliti
ISF Ing Groep Nv
IST SPDR S&P International Telecom
ITF iShares S&P/TOPIX 150 Index Fu
JGV Nuveen Global Value Opportunit
JXI iShares S&P Global Utilities S
MHO.A MI Homes Inc-Preferred
NIB iPath Dow Jones-AIG Cocoa Tota
NUCL iShares S&P Global Nuclear Ind
OILZ Oil Futures Contango ETN due J
RJA ELEMENTS Linked to the Rogers
SBND PowerShares DB 3X Short Ust Et
SHM SPDR Lehman Short Term Municip
SMB Market Vect Short Muni Ind Etf
SZR WisdomTree Dreyfus South Afric
TBF ProShares Short 20+ Year Treas
TDD TDAX Independence 2010 Exchang
TMV Direxion Daily 30 Yr Bear 3X S
TPS ProShares UltraShort TIPs
TYG Tortoise Energy Infrastructure
TYO Direxion Daily 10Yr Bear 3X Sh
ULE ProShares Ultra Euro
UTF Cohen & Steers Select Util Fd
VEA Vanguard Europe Pacific Etf
WIP SPDR DB International Governme

FINANCIAL SERVICES Closed End Fund - Foreign

BIE Blackrock Fl Municipal Bond Tr
DBU WisdomTree International Utili
DFE WisdomTree Europe SmallCap Div
DOL WisdomTree International Large
DWM WisdomTree DIEFA Fund
ECNS iShares MSCI China Small Cap I
EWD iShares MSCI Sweden Index Fund
EWG iShares MSCI Germany Index Fun
EWI iShares MSCI Italy Index Fund
EWM iShares MSCI Malaysia Index Fu
EWQ iShares MSCI France Index Fund
FCO Aberdeen Global Income Fd Inc
FFD Morgan Stanley Frontier Emergi
FPA First Trust Asia Pacific Ex-Ja
FXB Rydex CurrencyShares British P
FXM Rydex CurrencyShares Mexican P
FXS Rydex CurrencyShares Swedish K
HEDJ Wisdom Tree International Hedg
HTY John Hancock Tax-Advantaged Fu
JOF Japan Smaller Capitalization
PGD John Hancock Ptrt Glbl

My book, 'The Trader's Book of Volume' (published by McGraw-Hill) is now available.

Here is the link to Traders Press:

Here is the link to Amazon.com:

In conjunction with Trader's Library, come visit the VR BOOKSTORE where you can find Bestsellers, Just Out New Releases, Videos and Bargain Buys covering the gamut of investing in the stock market! Come shop today!

Mark Leibovit may be seen or heard on the following programs:

Ira Epstein TV - Interviews usually occur on Tuesday or Wednesday. Here is the August 23, 2011 link: http://www.iraepstei...-interview.html

Nightly Business Report (PBS Television)-
Semi-annual interviews Next appearance tentatively scheduled October 7, 2011. Check NBR.com for details. Here is the April 21 interview: http://tinyurl.com/3hdhdvc

BNN (Business News Network) - Check out my April 28 and July 18 BNN interviews: http://watch.bnn.ca/#clip457978 and http://www.bnn.ca/Ne...old-market.aspx

Michael Campbell 'Money-Talks' July 23 interview (Set drop down choice to 9 am)
Mark Leibovit, From Timer Digest August 8, 2011 issue:"TIMER OF THE YEAR RACE AT JUNE 30 "We congratulate Mark Leibovit of VRTrader.com, the 2011 Mid-Year leader.
PLEASE NOTE: E-Mails should be sent to mark.vrtrader@gmail.com or vrcustomerservice@gmail.com.
Mark Leibovit may be seen or heard on the following programs or presentations:

Ira Epstein TV - Tuesday or Wednesday (weekly) - August 23, 2011 link: http://iraepstein.li...-interview.html

The Money Show, September 18-21, Vancouver Convention Center East, Vancouver, B.C.

Nightly Business Report (PBS Television) semi-annual interviews Next appearance October 7, 2011. Here is the April 21 interview: http://tinyurl.com/3hdhdvc

Metastock Conference - October 15-16, Las Vegas. http://go.metastock.com/forms/msc11

Canadian Society of Technical Analysts - Annual Fall Market Conference- October 20-21.

BNN (Business News Network) - Tentatively scheduled October 21. - Check out my April 28 and July 18 BNN interviews: http://watch.bnn.ca/#clip457978 and http://www.bnn.ca/Ne...old-market.aspx

Michael Yorba - Yorba Radio - KVCE-AM 1160 Dallas 5:00-6:00 pm - As scheduled.

The Traders Expo - Bally's/Paris - Las Vegas - November 16-19.

All-day technical workshop/presentation co-hosted with David Bensimon - Vancouver - November 19.

Michael Campbell 'Money-Talks' July 23 interview (Set drop down choice to 9 am)



New! In conjunction with Trader.s Library, come visit the VR BOOKSTORE where you can find Bestsellers, Just Out New Releases, Videos and Bargain Buys covering the gamut of investing in the stock market! Come shop today!

Click here: http://www.invest-store.com/vrtrader
Suggestions? Comments? on the newsletter service. We would like to hear from each and everyone of our subscribers. Our email is mark.vrtrader@gmail.com.

This newsletter is a publication dedicated to the education of stock traders. The newsletter is an information service only. The information provided herein is not to be construed as an offer to buy or sell securities of any kind. The newsletter picks are not to be considered a recommendation of any stock but an information resource to aid the investor in making an informed decision regarding trading in stocks. It is possible at this or some subsequent date, the editors and staff of VRTrader.com may own, buy or sell securities presented. All investors should consult a qualified professional before trading in any security. The information provided has been obtained from sources deemed reliable but is not guaranteed as to accuracy or completeness. VRTrader.com staff makes every effort to provide timely information to its subscribers but cannot guarantee specific delivery times due to factors beyond our control.
Copyright 2011 VRTrader.com.
Do not duplicate or redistribute in any form.