The VRTrader.com VR Silver Newsletter - Monday9/17/2007
"Tools for the High Performance Trader"
Copyright ©2007, All rights reserved.
Redistribution in any form is strictly prohibited.
LEIBOVIT FILES | by Mark Leibovit
Monday, September 17, 2007
Baiting For Another Bear Trap - But Watch Out For A Snake In The Grass!
---------------------------------------------
Economic Data and other events scheduled for September 17-21:
---------------------------------------------
Monday, September 17:
Empire State Mfg Survey 8:30 AM ET
4-Week Bill Announcement 11:00 AM ET
3-Month & 6-Month Bill Auction 1:00 PM ET
---------------------------------------------
Tuesday, September 18:
ICSC-UBS Store Sales 7:45 AM ET
PPI 8:30 AM ET
Redbook 8:55 AM ET
Treasury International Capital 9:00 AM ET
State Street Investor Confidence Index 10:00 AM ET
4-Week Bill Auction 1:00 PM ET
Housing Market Index 1:00 PM ET
FOMC Announcement 2:15 PM ET
---------------------------------------------
Wednesday, September 19:
MBA Purchase Applications 7:00 AM ET
CPI 8:30 AM ET
Housing Starts 8:30 AM ET
EIA Petroleum Status Report 10:30 AM ET
---------------------------------------------
Thursday, September 20:
Jobless Claims 8:30 AM ET
Leading Indicators 10:00 AM ET
EIA Natural Gas Report 10:30 AM ET
Philadelphia Fed Survey 12:00 PM ET
Money Supply 4:30 PM ET
---------------------------------------------
FRIDAY, September 21:
Quadruple Witching Options Expiration
Yom Kippur begins at Sunset
Autumnal Equinox, Sunday the 23rd!
---------------------------------------------
Boy, you can hear the locks snap on the trap as it is carefully being set into place!Analysts and financial journalists alike are betting the future of our nation's financialsurvival on the outcome of Tuesday's FOMC decision - but most generally express concern.Traders are itching to either sell into a rally should the news is 'good', i.e., 50 bps orif it is 25 bps to zero. Many feel the move is too little too late and the country isheaded into recession regardless. Of course, we're too smart to fall for all thatnonsense. As you know, the stock market looks beyond a recession or well before it and themere talk of it (as, by the way, we heard all last year), is confirmation the bull marketis alive and well. In addition, homebuilding and real estate prognosticators are callingfor a much deeper and prolong correction between the 'sucker' (real estate) turns. LateFriday I was listening to financai radio and heard one caller after another speculate onwhat the Fed will do or not do with interest rates. The naivety of financial journalistsand the public are incredible! They actually believe it is the 'end-all' with regard tothe stock market and the economy!
They don't speak of the influence and cooperation of the Bank of Japan with regard tothe Yen 'carry trade', the influence of Secretary Henry Paulson and his Plunge ProtectionTeam and careful 'financial engineering' which has created the most prolonged rally in theDow Industrials this century, and, of course, the 'secret' moves that Ben Bernanke's boyshave implemented, e.g., massive injections of liquidity into the US financial system inrecent weeks resulting in an unprecedented M3 Money supply growth rate of 13% going on15%. When Bank of America moved to 'invest' in Countrywide following the 'surprise' 50 bpsdiscount rate cut, do you think that occurred in a vacuum? Or, perhaps as I suggested, wasit a covert move on Bernanke's part to prevent a collapse of the company using Bank ofAmerica as his surrogate? In my view, that was clearly the case.
Do you think except for psychological reasons there is any basis for us to put undueemphasis on Tuesay's FOMC meeting outcome? The answer, of course, is no. But, the beartrap is being carefully prepared for those who believe otherwise. Due to the above factorsI am confident the stock market indexes will see new all-time highs in coming months andall the poppycock you hear to the contrary is just that - poppycock.
No doubt, we're going to experience a 'sell-off' of some kind, but the real question tobe asked is whether it will last or will it even be prevented from occurring vis a vis thePlunge Protection Team and their allies at the Bank of Japan. Yes, the US Dollar has beenamong the first casualties of the Fed's massive injections of liquidity over the past fewweeks sliding to 15 year loows and, yes, gold prices have broken out above $700 /oz totheir highest in 24-years. So what? These are trends that are well established and shouldcontinue in the years ahead.
But, while the 'Street' is being distracted by 'will he or won't he' nonsense, there isa sideshow going on which will likely have the greater impact and, as usual, it is notbeing discussed - a virtual snake in the grass. Crude oil surged over $80.00 a barrel thisweek receiving support from geo-political tension in the Middle East, after IsraeliF-15I's flew deep into Syrian territory, and destroyed a munitions dump, loaded withweapons from Iran, or what the New York Times claims was a facility with nuclear material,imported form North Korea. The report said five IAF fighter jets carried out the attack.
In an unusual attack, Pyongyang's kingpin Kim Jong-il harshly "condemns the saidincursion and expresses solidarity and support of the Syrian nation in its righteous causeof safeguarding national security and peace in the region," he said. Advisors toSyrian President Bashar Assad are pressuring him to respond to the Israeli attack by"landing a blow to an Israeli target," the Kuwait-based Al-Jareeda reported.
Reportedly, the Iranian-funded installation was razed to the ground. Equally important,the Pantsyr-S1E missiles, that Damascus purchased from Russia to repel air assailants,failed to down the Israeli jets accused of penetrating northern Syrian airspace from theMediterranean the night before. The new Pantsyr missiles therefore leave Syrian andIranian airspace vulnerable to hostile intrusion. Syria took delivery in mid-August of 10batteries of sophisticated Russian Pantsyr-S1E Air Defense Missile fire control systemswith advanced radar.
Information on Russian missile consignments to Syria or Iran is vital to any UScalculation of whether to attack Iran over its nuclear program. They assume that the"absolute jamming immunity" which the Russian manufactures promised for theimproved
Pantsyr missiles was immobilized by superior electronic capabilities exercised by the USF-15I jets before they left Syrian airspace. At least ten Pantsyr-S1E batteries wereshipped to Iran to boost its air defense arsenal; another 50 are on the way, of whichSyria will keep 36.
But the bottom line is the successful Israeli strike on Syria, leaves the door open fora possible US aerial strike on Iran's nukes in the year ahead.
Yes, folks, this story is only beginning to unfold! And, yes, this could be the causeof a widely expected market setback, but not for the reasons we're told to expect. Ifbulls are blindsinded, this may be the cause.
My bottom line is to remain bullish on Crude Oil, Gold, Commodities in general, and,yes, stocks. Will we try and 'trade' a swing in stocks along the way? We will certainlygive it a shot.
Quadruple option expiration is ahead this coming Friday and we noticeably didn'texperience any downside volatility this past Wednesday (a traditional 'Weird WallyWednesday') - the Wednesday of the week before of options expiration where such volatilityusually manifests itself. It appears, however, this week an attempt will be made to scarethe bulls and run up the put options, but I'm not so sure it's going to stick.
I'm still looking at that 'reverse head-and-shoulders' pattern in the major blue-chipindexes - confirmed (as I told you) above
the highs from September 4 and especially August 8 of 1496 and 1503, respectively,in theS&P 500. Target measurement? 1630 in the S&P 500! My current thinking, however, isthat should we breakout at this time, we're certainly going to see follow-through, but notto the extent of the aforementioned maximum measurement.
I haven't addressed the downside because as far as I'm concerned we have already'double-bottomed' and there is no particular reason we have to retest the mid-August lowsand for the same reason not break them. But, I'm trying to keep an open mind and also on a'money-management' level trying to lock in profits rather than risk losing them. It shouldbe an interest couple of weeks, but overall, as I've said, should I decide to sell longpositions, you not infer that I'm turned-tail and am bearish on the bigger pictureuptrend.
Gold and stocks more or less track together and should both work higher over theintermediate term. Gold shares are stocks and if the general market takes a nosedive, Isuspect they will retrace as well - especially if the US Dollar Index chooses to recoverrecent losses. As stated, my next big upside target for gold bullion is $875.00, but Ihave no specific time frame for the fulfillment of that target.
---------------------------------------------
TIMER DIGEST has named Mark Leibovit of VRTrader.com 'TIMER OF THE YEAR' for 2006. TIMERDIGEST also ranks Mark as the #1 Intermediate Market Timer for the 10 year period endingin 2006! Currently in the #2 spot for 2007!
---------------------------------------------
The legendary VRTrader.com Annual Forecast Model is waiting for you! Don't miss theopportunity to subscribe to this special report and mid-year update that long agovindicated OUR claim that it represents a 'blueprint to the future'. If you had been asubscriber, you would have known ahead of time that the market would likely nosedive inFebruary/March and then rally to June.
Remember, folks, there is no price too high for good information!
http://www.vrtrader.com/vr_forecaster/index.asp
---------------------------------------------
VR TRADER.COM WATCHLISTS:
Please note: The VR Watchlist is currently now only available via the VRTrader.comwebsite accessed via your assigned username and password. Please email mark@vrsurvey.comif you misplaced that information.
---------------------------------------------
Editors note: As you may have noticed, we have been posting our daily VR list for bothSilver and Platinum subscribers. Silver subscribers who find this useful should upgrade toPlatinum where you can pull down VR charts for many securities and watch the patternsunfold for yourself.
I've extended posting this information on a complimentary basis to Silver subscribersfor the time being. There is no technical service on the planet that posts Positive andNegative VR! Why? Because they are proprietary to VRTrader.com! And, Platinum subscriberscan pull up VR Charts on just about any stock from the home page of my website.
http://www.volumereversaltrader.com/vr_platinum/GetVRChart.asp
A Volume Reversal ™ is change from a Rally day to a Reaction day accompanied by anincrease of volume or a change from a Reaction day to Rally day accompanied by an increasein volume. Volume Reversals ™ coming off intermediate lows or highs have greatersignificance in helping to define those lows or highs and important pivot points in themarketplace.
How do you use this list? VRs are buy and sell triggers and are particularly useful indefining lows or highs in stocks and stock indexes. Traders find them particularly useful,especially coming off market extremes as an indication of a change of direction. Use theVRs in conjunction with your other technical indicators and you've added a uniquetechnical tool to your arsenal.
List of Volume Reversals 9/14/07 - Sectors
*** Sectors Positive Volume Reversals ***
**** NONE ****
*** Sectors Negative Volume Reversals ***
Drugs - Delivery
HSP - Hospira Inc
Energy - Major Integrated Oil & Gas
E - ENI SPA ADS
BP - BP PLC
Financial Services - Credit Services
AXP - American Express Co
EXPG - Encore Capital Group
Food & Beverage - Beverages - Soft Drinks
CSG - Cadbury Schweppes PLC
KOF - Coca-Cola Femsa SAB
Materials & Construction - Waste Management
SRCL - Stericycle
WMI - Waste Management Inc
Media - Broadcasting - TV
TV - Grupo Televisa
YBTVA - Young Broadcasting
Real Estate - REIT - Residential
AIV - Apartment Invest & Mgt
Wholesale - Drugs
CAH - Cardinal health Inc
MCK - McKesson Corp
Suggestions? Comments? on the newsletter service. We would like to hear from eachand everyone of our subscribers. Our email is mark@vrsurvey.com.
DISCLAIMER
This newsletter is a publication dedicated to the education of stock traders. Thenewsletter is an information service only. The information provided herein is not to beconstrued as an offer to buy or sell securities of any kind. The newsletter picks are notto be considered a recommendation of any stock but an information resource to aid theinvestor in making an informed decision regarding trading in stocks. It is possible atthis or some subsequent date, the editors and staff of VRTrader.com may own, buy or sellsecurities presented. All investors should consult a qualified professional before tradingin any security. The information provided has been obtained from sources deemed reliablebut is not guaranteed as to accuracy or completeness. VRTrader.com staff makes everyeffort to provide timely information to its subscribers but cannot guarantee specificdelivery times due to factors beyond our control.
Copyright © 2007 VRTrader.com.
Do not duplicate or redistribute in any form.
