The VRTrader.com VR Silver Newsletter - Wednesday 10/20/2010
"Tools for the High Performance Trader"
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Redistribution in any form is strictly prohibited.
LEIBOVIT FILES | by Mark Leibovit
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Leibovit Files
Wednesday, October 20, 2010
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When You Smell Smoke You Run!
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I will also be speaking at Michael Campbell's Gold & Precious Metal Conference October 23 in Vancouver. Here are the links:
http://tinyurl.com/2eu9m8k
http://tinyurl.com/2ag5wcs
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I will be a guest on BNN's (Business News Network - Toronto) 5 p.m. EST on Squeezplay - the primetime flagship interview show on the network.
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Commentary below from TIMER DIGEST's #1 Intermediate Market Timer for the 10 year period ending in 2007 - Mark Leibovit
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Current TIMER DIGEST Signals:
Stocks - Bear
Gold - Bear
Bonds - Neutral
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UPCOMING ECONOMIC RELEASES/MARKET EVENTS
OCTOBER 20 - 22, 2010:
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WEDNESDAY, OCTOBER 20:
PRE-MARKET EARNINGS:
Abbott Labs, Altria, Boeing, Delta Air Lines, M&T Bank, Morgan Stanley, US Airways, Wells Fargo
DURING MARKET HOURS EARNINGS:
AMR Corp
MBA Purchase Applications
7:00 AM ET
Richmond Federal Reserve Bank President Jeffrey Lacker opening remarks to a journalism workshop at the University of Maryland.
9:30 AM ET
EIA Petroleum Status Report
10:30 AM ET
Philadelphia Federal Reserve Bank President Charles Plosser speech on incentives and regulation to the Union League in Philadelphia.
12:45 PM ET
Beige Book
2:00 PM ET
POST-MARKET EARNINGS:
E*TRADE, eBay, Seagate Tech
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THURSDAY, OCTOBER 21:
PRE-MARKET EARNINGS:
Alaska Air, AT&T, Baxter, Caterpillar, Eli Lilly, Freeport-McMoRan, Hershey Foods, Jetblue Airways, Southwest Air, Union Pacific, UPS
St Louis Federal Reserve Bank President James Bullard opening remarks to the Annual Economic Policy Conference in St. Louis.
Jobless Claims
8:30 AM ET
Kansas City Federal Reserve Bank President Thomas Hoenig speech in Albuquerque, New Mexico.
9:45 AM ET
Leading Indicators
10:00 AM ET
Philadelphia Fed Survey
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
2-Yr Note Announcement
11:00 AM ET
5-Yr Note Announcement
11:00 AM ET
5-Yr TIPS Announcement
11:00 AM ET
7-Yr Note Announcement
11:00 AM ET
Fed Balance Sheet
4:30 PM ET
Money Supply
4:30 PM ET
POST-MARKET EARNINGS:
Amazon.com, American Express, Capital One, PMC-Sierra
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FRIDAY, OCTOBER 22:
PRE-MARKET EARNINGS:
Exelon, MB Financial, Penske Auto, Schlumberger, Verizon
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STOCKS - ACTION ALERT -
Stocks had their worst day in two months as investors became unnerved by a surprise rate hike in China, disappointing earnings, and fresh concerns about the impact bad mortgages could have on banks. The Dow fell 165.07 to 10978.62, back below the psychologically important 11000 level. The S&P declined 18.81 to 1165.90 and the NASDAQ dropped 43.71 to 2436.95. Volume was up from Monday and quite heavy. Breadth was bearish.
We sold our equity positions and even bought an inverse ETF on Monday ahead of yesterday's decline. We then added to our short position yesterday and switched to a TIMER DIGEST Sell Signal as the indexes posted Negative Volume Reversals ™. Looking at a chart of the S&P 500 for downside targets, the market could very easily fall to the 1130 level, which was the summer high and should now act as support. I am keeping an eye on the 50 day and 200 day moving averages which are at 1118 and 1121 and rising.
This may only be a correction ahead of the next big push higher, but I've learned over the years a small top could really be a big top and you only realize that in hindsight. If I smell smoke, I exit the theatre and I don't wait until I see the flames! We can always reverse back to the long side. That's what computer technology allows us to do, but if something more serious and unexpected is unfolding at least we have preserved our capital.
Financials were doing well (up as much as 0.68% intraday) following good earnings reports from Goldman Sachs and Capital One. But then, came a report that Bank of America might be forced to repurchase bad mortgages. (See below.) By the end of the session, Financials (XLF) close down 1.39%, not the worst performer but a far cry from the earlier gains.
Commodity stocks (XLB -2.56% and XLE -1.99%) fell sharply as a rising Dollar and fears of falling demand caused by China's rate increase hit metal and oil prices hard yesterday.
Retailers (XRT -2.92%) did even worse after chain-store sales for the week ended Oct. 16 rose 1.7% from the year-earlier period, the slowest rate in at least four weeks, according to a survey released Tuesday by the International Council of Shopping Centers and Goldman Sachs. On a week-over-week basis, sales fell 0.7%. "National temperatures soared relative to last year and its historical record making it the warmest comparable week in 15 years, which unfortunately was not good news for retailers selling seasonal goods," said Michael Niemira, ICSC's chief economist. He forecast October sales to rise about 2.5%.
Only defensive Utilities (XLU +0.19%) rose yesterday after AEP beat earnings projections and raised its dividend.
The strong US Dollar also hit stocks yesterday. Remember, the entire September-October rally was accompanied by a weak Dollar. Stocks like a weak Dollar, as long as the decline in orderly, because it makes US good more affordable overseas and foreign sales more valuable when converted back to Dollars. Additionally, a rally in US stocks accompanied by a decline in the US Dollar means that the price of US stocks to overseas investors has not changed. So while American traders have seen a big jump in US equity prices, the gain in terms of Euros or Yens is much smaller. And yesterday? Stocks fell as the Dollar rallied. So watch the Dollar for clues as to what stocks will do.
But, why is the Dollar rallying? Check out the article below.
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DOW TRANSPORTS - ACTION ALERT -
Transportation stocks fell yesterday, but did slightly better than the broader indexes, helped by the sharp decline in oil which reduces a large portion of their expenses. The Dow Jones Transportation Average fell 65.72 or 1.39% to 4647.28.
American Airlines and WestJet Airlines formed an alliance on Tuesday to more seamlessly carry passengers on each others' networks, the two carriers said. The deal will allow American passengers traveling to Canada and transferring to a WestJet flight to buy a single ticket and to check their bags through to the final destination. American passengers will be able to connect to 25 new Canadian cities not currently served by American or American Eagle. AMR gained 2.19% yesterday and WJA.TO rallied 0.68%.
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GOLD and METALS - ACTION ALERT -
Precious metals got crushed yesterday, having their worst one-day drop since early July, as traders reacted to a jump in the dollar after Treasury Secretary Timothy Geithner pledged the U.S. government wouldn't devalue the dollar and said that Washington will work to "preserve confidence" in the greenback and after China's surprise interest-rate hike. Gold fell 34.30 to 1335.30, silver declined 1.01 to 23.37, platinum lost 28 to 1661, palladium dropped 16 to 570, and copper settled down 0.0975 at 3.7575.
We went on a TIMER DIGEST Sell Signal for Gold intraday yesterday. But in fact, we sold our Gold and Gold related positions on Monday and bought an double inverse Gold ETF at the same time. Another bulls-eye trade!
This doesn't effect my long-term, multi-year prediction for gold, which is for much higher prices. But Gold has rallied so much and the sentiment has become so bullish that I have been looking for a short-term top. Negative Volume Reversals ™ or Negative 'Key Reversals' in stock indexes and the metals on Monday was exactly what I've been waiting for.
Gold was vulnerable for anywhere from a 5% to 15% correction. Round and round she goes, but where she stops nobody knows! Stay tuned.
For more in depth analysis, see my VR GOLD LETTER. A special discount is offered to Silver and Platinum subscribers: www.vrgoldletter.com!
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BONDS - ACTION ALERT -
Treasuries rose as traders moved from riskier equities to safer bonds, though gains were limited by a better than expected housing starts report. The long bond future gained 9/32 to 132 14/32.
Yields on 10-year notes fell 4 basis points, or 0.04%, to 2.47%. On Oct. 11, 10-year yields closed at 2.38%, the lowest since January 2009. Thirty-year bond yields fell for a second day, by 6 basis points to 3.90%. The longest-dated debt sold by the U.S. has lagged in the last month's rally. On Friday, they closed at 3.89%, the highest since early August.
Shorter-dated debt yields remained near all-time lows as they are generally the most sought-after securities when investors are shifting away from riskier assets and want some safety. Yields on 2-year notes /declined 1 basis point to 0.35%. Three-year yields fell 3 basis points to 0.53%.
In recent days and weeks, Treasuries and stocks have often moved together. More frequently, they tend to move against each other, but not now. The so-called quantitative easing is why. Bad economic news, which boosts bonds but normally hurts stocks, increases the chances of quantitative easing. This quantitative easing means a flood of money into the markets in which both stocks and bond will be purchased. So bad news on the US economy is now good news for both stocks and bonds and good news is bad news.
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CRUDE OIL - ACTION ALERT -
Crude oil futures posted their biggest one-day drop since February, as equities suffered and the dollar surged after a surprise interest-rate increase in China, which also cast a pall over prospects of oil demand. Crude fell 3.64 to 80.16, its lowest price since September 29. Crude traded down to 79.96 and recall I've been looking for a retracement back to the 78.00 level for the past couple of weeks.
The American Petroleum Institute late Tuesday reported an increase of 2.3 million barrels of crude oil in the nation's inventories for the week ended Oct. 15, slightly above expectations. Gasoline stocks declined 83,000, while distillates inventories decreased 854,000, the trade group said. More closely watched government data is scheduled for Wednesday. Analysts polled by Platts expect an increase of 2.1 million barrels for the week ended Oct. 15. Stockpiles of gasoline are seen declining 1.2 million, while stockpiles of distillates are expected to decline 1.3 million. Crude oil fell slightly in overnight trading following the news.
Natural gas though rose 0.082 to 3.513, snapping a three-session losing streak.
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US DOLLAR - ACTION ALERT -
The US Dollar enjoyed its biggest one-day advance since August after U.S. Treasury Secretary Timothy Geithner late Monday pledged the government won't devalue the currency and the U.S. will "preserve confidence" in the U.S. unit. The Dollar also benefited from a flight to safety after a rate hike by China fueled worries that the world's fastest-growing economy could restrain global growth. The US Dollar Index jumped 1.293 to 78.227.
The People's Bank of China lifted deposit and lending rates by a quarter point on Tuesday, according to the official Xinhua news agency. The surprise policy move brought the one-year yuan lending rate to 5.56% from 5.31% and the one-year deposit rate to 2.5% from 2.25%, Dow Jones Newswires reported, citing a statement issued by the central bank. The announcement was the first policy tightening since December 2007. It's effective Oct. 20. The Yuan fell 0.02% against the US Dollar.
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ECONOMIC NEWS:
New construction of U.S. houses expanded for the third straight month in September, the Commerce Department estimated Tuesday. Starts rose 0.3% in September to a seasonally adjusted 610,000 annualized units, much stronger than the 578,000 pace expected by economists. This is the highest level of starts since April. Starts of new single-family homes rose by 4.4% to 452,000 in September, while starts of large apartment units fell 9.7% to 158,000. Building permits, a leading indicator of housing construction, fell 5.6% to a seasonally adjusted annual rate of 539,000. This is the lowest level of permits since April 2009.
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CORPORATE NEWS:
Apple's fiscal fourth-quarter earnings outstripped Wall Street's expectations, with profit coming in at $4.31 billion, or $4.64 a share, compared to net income of $2.53 billion, or $2.77 a share, a year ago. Revenue jumped 67% to $20.34 billion, with the iPhone the main driver of the quarter. The company said 14.1 million units were sold, far more than Wall Street's consensus estimate of 11.5 million units. Analysts expected earnings of $4.10 a share on revenue of $18.9 billion. Apple, in typical fashion, also issued a highly conservative forecast. However, sales of the iPad fell short of analysts' projections for the period and gross margins fell. AAPL fell 2.68%.
IBM said third-quarter profit rose to $3.6 billion, or $2.82 a share, from $3.2 billion, or $2.40 a share, in the same period last year. The technology giant said revenue rose 3% to $24.3 billion. Analysts had expected earnings of $2.76 a share on $24.2 billion in revenue. IBM declined 3.36%.
Coca-Cola Co.'s profit rose 8% in the third quarter, helped by volume growth that outpaced its long-term target, the beverage giant said Tuesday. The company also said it expects to repurchase about $2 billion shares by the end of this year. Coca-Cola said its third-quarter profit increased to $2.06 billion, or 88 cents a share, from $1.9 billion, or 81 cents a share, in the year-earlier period. Sales rose 5% to $8.43 billion. Analysts estimated the beverage giant to earn 89 cents a share on sales of $8.39 billion. KO was up 0.57%.
Bank of America posted a third-quarter net loss of $7.3 billion, or 77 cents a share, compared to a net loss of $1 billion, or 26 cents a share, in the same period last year. The bank saw a net loss applicable to common shareholders of $7.6 billion versus $2.2 billion a year ago. Excluding a goodwill impairment charge of $10.4 billion, the banking giant said it earned $3.1 billion, or 27 cents a share in the quarter. Analysts forecasted earnings of 18 cents a share. "We are adapting to the regulatory environment, credit quality continues to improve, and we are managing risk and building capital," said Chief Executive Officer Brian Moynihan, in a news release. "We are realistic about the near-term challenges, and optimistic about the long-term opportunity."
In the afternoon, Bank of America got more news. A bondholders' group is seeking to force Bank of America to buy back some $47 billion in bad mortgages packaged by Countrywide Financial Corp. Pacific Investment Management Co., BlackRock Inc., and the Federal Reserve Bank of New York wrote to Bank of America and Bank of New York Mellon Corp., the debt's trustee, faulting Countrywide for not servicing the loans properly. Bank of America acquired Countrywide in 2008. BAC fell 4.38%.
Goldman Sachs Group reported third-quarter net income of $1.9 billion, or $2.98 a share, down from $3.19 billion, or $5.25 a share, in the year-ago period. Wall Street analysts had forecast quarterly profit of $2.32 a share, on average. Economic conditions "continue to be challenging in a number of important markets," said Chief Executive Lloyd Blankfein in Goldman's earnings release. GS rose 1.96%.
Capital One Financial said its third-quarter earnings more than doubled over the year-ago period. Capital One said its net income was $803 million, or $1.76 a share, up from $394 million, or 87 cents a share. Income from continuing operations rose 87% year-on-year. The results handily beat consensus estimates of $1.22 a share. COF rallied 4.11%.
American Electric Power said that its third-quarter net profit rose 25% to $555 million, or $1.16 a share, from $443 million, or 93 cents a share, a year earlier. Revenue for the quarter increased 17% to $4.1 billion. The group said ongoing earnings excluding special items in the latest quarter were $1.15 a share. Analysts were expecting earnings of $1.04 on sales of $4.3 billion. "We have seen improvement in the industrial sector from the lows of 2009 but demand in other sectors is essentially flat," said Michael Morris, chairman and CEO. The company also narrowed its earnings guidance for 2010 to a range of $2.95 to $3.05 a share from its previous range of $2.80 to $3.20 a share. Analysts on average had been forecasting 2010 earnings of $3.04 a share. American Electric Power also lifted its quarterly dividend by 9.5% to 46 cents a share, from 42 cents a share. AEP inched up 0.52%.
Data storage firm EMC said that its third-quarter net income rose 58%, helped by improving margins. EMC also boosted its full-year earnings outlook. EMC earned $472.5 million, or 22 cents a share, up from $298.2 million, or 14 cents a share, a year ago. Excluding restructuring and some other costs, profit was 30 cents a share, compared to 23 cents a share a year ago. Analysts had expected the firm to report earnings of 30 cents a share, on revenue of $4.14 billion. EMC eked out a 0.14% gain.
Johnson & Johnson reported a higher third-quarter profit, although sales came in slightly below those of the same quarter in 2009. J&J said it earned $3.42 billion, or $1.23 a share, compared with $3.35 billion, $1.20 a share, for the prior year's quarter. Revenue dipped 0.7% to $14.98 billion, down from $15.08 billion. Analysts estimated that J&J would post earnings of $1.15 a share, on revenue of $15.24 billion. JNJ slipped 0.89%.
Military contractor Lockheed Martin said its third-quarter net earnings fell to $571 million, or $1.57 a share, from $797 million, or $2.07 a share, in the year-ago period. Earnings from continuing operations were $565 million, or $1.55 a share, and included a one-time 32-cents-a-share charge for a voluntary executive separation program. Net sales rose 5.6% to $11.38 billion. Analysts were looking for earnings of $1.62 a share, on average, with sales of $11.61 billion. Lockheed cut its full-year profit outlook to a range of $6.75 to $6.95 a share from $7.15 to $7.35 a share. LMT closed down 0.81%.
Zions Bancorp said its third-quarter net loss narrowed to $80.5 million, or 47 cents a share, from $135.2 million, or 84 cents a share, in the year-ago period. Analysts estimated a loss of 49 cents a share. Zions shares fell 1.3% to $21.07 in light volume in after-hours activity. ZION rose 2.39%.
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POST-MARKET NEWS:
Yahoo posted third-quarter net revenue of $1.12 billion, down slightly from $1.13 billion in the year-ago period. Analysts had expected net revenue of $1.13 billion. Net income rose to $396.1 million, or 29 cents a share, from $186.1 million, or 13 cents a share, in the year-ago period. The company's earnings included a 13 cents-a-share benefit from the sale of HotJobs. Analysts had expected Yahoo to report third-quarter earnings of 15 cents a share. YHOO rose 1.1% in after hours.
Cree posted first-quarter profit of $58 million, or 53 cents, from $21 million, or 23 cents a share, in the year-ago period. Excluding one-time items, the company said earnings would have been 60 cents a share. Revenue rose to $268.4 million from $169.1 million in the year-ago period. Analysts had expected 58 cents a share on revenue of $277.5 million. The company forecast second-quarter revenue of $270 million to $280 million, below the current estimate of $296.3 million. It also expects adjusted per-share earnings of 56 cents to 60 cents. Wall Street is looking for 59 cents a share. CREE declined 8.1% in late trading.
Juniper Networks said third-quarter revenue rose 23% to $1.01 billion from the year-ago period. Analysts had expected sales of $1.02 billion. Adjusted earnings for the latest period were 32 cents a share, matching expectations. Profit at Juniper jumped to $134.5 million, or 25 cents a share, compared with $83.8 million, or 16 cents a share, for the same period last year. JNPR dropped 2.0%.
Boston Scientific swung to a third-quarter profit of $190 million, or 12 cents a share. In the year-ago period, the company lost $94 million, or 6 cents a share. Excluding one-time items, the medical device maker would have reported earnings of 19 cents a share. Revenue fell to $1.92 billion from $2.03 billion a year ago. Wall Street had expected earnings of 6 cents a share on revenue of $1.92 billion. The company forecast fourth-quarter adjusted earnings of 15 cents to 18 cents a share on revenue of $1.93 billion to $2 billion. Analysts currently expect 10 cents a share on sales of $2 billion. BSX gained 3.0% in after hours trading.
Gilead Sciences reported third-quarter net income rose to $704.9 million, or 83 cents a share, from $673 million, or 72 cents, a year ago. Revenue for the three months ended Sept. 30 rose 8% to $1.94 billion from $1.8 billion, led by increased sales of antiviral drugs used to treat HIV. Excluding one-time items, Gilead earned 90 cents a share. Analysts , who typically exclude one-time items, predicted the Foster City, Calif.-based biopharmaceutical company would earn 87 cents a share on $1.93 billion in sales. GILD rose 2.2%.
Altera reported its third-quarter net income more than trebled to $217.5 million, or 69 cents a share, from a profit of $56.7 million, or 19 cents a share, in the same quarter last year. Revenue increased to $527.5 million from $286.6 million a year earlier. Analysts had expected the chip company to report earnings of 64 cents a share, on revenue of $524.8 million. Altera expects fourth-quarter sales to grow 3% to 6% from the third quarter with gross margin expected at 70% to 71%. ALTR gained 2.2%.
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URANIUM - ACTION ALERT
Ux U3O8 Prices* (Uranium)
October 18, 2010 Posting
Spot: $49.25 UP 1.00. Bull market high in the cash market was $138.00.
The December Uranium Futures closed at $49.00. Uranium futures recent his a new bear market low of 40.00. June 13, 2007 hosted the bull market high of 154.95. Major support lies well under the market at $36.00.
The spot price of uranium quadrupled from 2004 to 2007. When it hit $138/lb, uranium became a certified bubble, which has now burst.
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Listen to my Michael Campbell interview on 'Money Talks' on Saturday morning, September 25. Use the following link to the CKNW 'Audio Vault' and set the hour at 9:00 AM.
http://www.cknw.com/...audiovault.html
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Canadian TSX, TSX Venture and Canadian Dollar Commentary for our Canadian clients updated for Wednesday, October 20:
The Canadian market followed the US market lower yesterday, but a weak Canadian Dollar helped the Canadian indexes outperform the US market. The TSX dropped 97.46 or 0.77% to 12570.55. A Negative Volume Reversal ™ was formed, so though I cannot for sure claim we've seen a major top, I would expect to see further downside with an objective of 12,200-12,300. If we breakout above the 12,710 bull market high from last week, this signal is negated.
Research In Motion, maker of the BlackBerry smartphone, fell 0.9 percent to C$48.82 after Apple lowered its profit forecast and Chief Executive Officer Steve Jobs dismissed the threat of rivals. Apple said profit for the current quarter will be about $4.80 a share, which includes the year-end holiday shopping season, less than the $5.03 predicted by analysts, as supply constraints hamper sales of the iPad.
Potash Corp. of Saskatchewan Inc., the world's largest fertilizer producer, advanced 2.1 percent to $148.40. Yara International ASA said it will probably team up with a partner in order to buy potash and phosphate assets.
Premium Brands Holding Corp. gained 1.8 percent to C$14.20. The food distributor and manufacturer said it bought Seattle- based sandwich and wrap maker SK Food Group Inc. The company's 12-month price estimate was raised to C$16 from C$15.50 and its rating was lifted to "buy" at Laurentian Bank Securities by equity analyst Vincent Perri, citing the acquisition.
Energy 290.11 -3.45 (-1.18%)
Financials 181.03 0.66 (0.37%)
Health Care 47.70 0.15 (0.32%)
Industrials 107.37 -0.36 (-0.33%)
Info Tech 28.03 -0.32 (-1.13%)
Metals & Mining 1,177.19 -41.02 (-3.37%)
Telecom 94.33 0.18 (0.19%)
Utilities 216.09 0.73 (0.34%)
Resistance 12,710, 12,900, 13,173, 13,771, 13,875, 13,983, 14,157. Support is 12,200-12,300, 12,055, 11,750, 11,480, 11,380, 11,065, 10,990, 10,800, 10,600, 10,400, 10,384, 9500, 9300, 9140.
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CANADIAN TSX Venture:
The Venture fell more sharply as gold and the other metals got hit hard and Metals & Mining was the worst performing sector. The TSX Venture declined 23.30 or 1.27% to 1814.91.
Resistance is 1984. Support is 1788, 1740, 1666, 1630, 1580, 1500, 1439, 1425, 1375, 1343, 1306, 1231.
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THE CANADIAN DOLLAR (using the FXC Exchange Traded Fund):
The Canadian Dollar fell sharply yesterday as traders moved to the safer US Dollar and sold commodity-based currencies as oil and metals fell sharply following China's rate increase and the concerns of slower growth that will create. Also hurting the loonie: the Bank of Canada reduced its economic growth forecast and kept its benchmark overnight lending rate unchanged at 1 percent. FXC declined 1.69 to 96.36.
Bank of Canada Governor Mark Carney kept the target rate for overnight loans between commercial banks at 1 percent, and cut his forecast for growth next year to 2.3 percent from a prior estimate of 2.9 percent, in announcing its decision in Ottawa.
The Bank of Canada may not raise rates again for six months, overnight index swaps indicate. The rate on the six- month security, a gauge of what investors think the policy rate will average during that time, was 1.05 percent yesterday, down from 1.175 percent Sept. 16.
Resistance is 99.30, 100.00, 102.00, 110.00. Support is 94.85, 93.20, 92.50 91.82, 91.00, 89.75, 87.50 and 85.18.
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DAILY VR LIST:
Editors note: The Daily VR List here is abbreviated with the full list only available to Platinum subscribers by clicking on 'Current VR List' on the Home Page of VRtrader.com.
Canadian shares are listed at the bottom of each section with the title: 'XXX CANADIAN STOCKS XXX'.
Silver subscribers who find this useful should upgrade to Platinum where you can pull down VR charts for many securities and watch the patterns unfold for yourself. There is no technical service on the planet that posts Positive and Negative VR! Why? Because they are proprietary to VRtrader.com!
How do you use this list?
Volume Reversals ™ are buy and sell triggers and are traders find them particularly useful, especially coming off market extremes as an indication of a change of direction. Use the VRs in conjunction with your other technical indicators and you've added a unique technical tool to your arsenal.
To see a visual representation of Volume Reversals ™, please go our Current Portfolio section and click on any recommended stock. Or, if you would like to get a VR Chart for a specific symbol, please click here. Please note that the list of symbols available is limited at this time.
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VOLUME REVERSALS FOR TUESDAY, OCTOBER 19, 2010:
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POSITIVE VRs
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.. CANADIAN STOCKS ... Canadian Stocks
ESI.UN ENSIGN ENERGY SERVICES
FTS FORTIS INC
HOD HORIZONS BETAPRO NYME
HSD.UN HORIZONS BETAPRO S&P BEAR ETF
RCI.B ROGERS COMMUNICATNS I CL B
TD.UN TORONTO DOMINION BANK
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U.S. STOCKS:
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AEROSPACE/DEFENSE Aerospace/Defense Products & S
ERJ Embr Emprs Brsl De Aero
AUTOMOTIVE Auto Parts
WMCO Williams Controls Inc
BANKING Money Center Banks
STI Suntrust Banks Inc
BANKING Regional - Mid-Atlantic Banks
PEBK People's Bancorp Of Nc
BANKING Regional - Midwest Banks
ASBC Associated Banc-corp
CHFC Chemical Financial Corp
BANKING Regional - Northeast Banks
FCCY 1st Constitution Bancorp Nj
JFBC Jeffersonville Bancorp
BANKING Regional - Pacific Banks
CATY Cathay General Bancorp
EWBC East West Bancorp Inc
BANKING Regional - Southeast Banks
BKBK Britton & Koontz Cap Cp
CSFL Centerstate Banks Of Florida
BANKING Regional - Southwest Banks
QCRH Qcr Hldgs Inc
BANKING Savings & Loans
COLB Columbia Banking System
FBSI First Bancshares Inc Mo
CHEMICALS Agricultural Chemicals
COIN Converted Organics Inc
COMPUTER HARDWARE Computer Peripherals
WAVX Wave Systems Corp Cl A
COMPUTER HARDWARE Data Storage Devices
EMC Emc Corp
COMPUTER SOFTWARE & SERVICES Business Software & Services
MAIL Incredimail
SDS Sungard Data Systems Inc
COMPUTER SOFTWARE & SERVICES Healthcare Information Service
MRGE Merge Technologies Inc
COMPUTER SOFTWARE & SERVICES Multimedia & Graphics Software
RLRN Renaissance Learning Inc
THQI Thq Inc
CONSUMER DURABLES Electronic Equipment
DISH Echostar Communications Corp
CONSUMER NON-DURABLES Cleaning Products
SCL Stepan Co
CONSUMER NON-DURABLES Textile - Apparel Footwear & A
SKX Skechers Usa Inc
TBAC Tandy Brands Accessories
DIVERSIFIED SERVICES Business/Management Services
TGIS Thomas Group Inc
DIVERSIFIED SERVICES Consumer Services
TUC Mac-Gray Corp
DIVERSIFIED SERVICES Personal Services
STEI Stewart Enterprises Cl A
DIVERSIFIED SERVICES Rental & Leasing Services
AYR Aircastle Ltd
FLY Babcock & Brown Air
DIVERSIFIED SERVICES Technical Services
VSR Versar Inc
DRUGS Biotechnology
ATHX Athersys Inc
INCY Incyte Corp
DRUGS Diagnostic Substances
ICCC Immucell Corp
DRUGS Drug Manufacturers - Other
AMRN Amarin Corp Plc Ads
OPK Opko Health Inc.
ELECTRONICS Diversified Electronics
ESP Espey Mfg & Electronics
ELECTRONICS Scientific & Technical Instrum
AXK Accelr8 Tech Corp
VRML Vermillion` Inc.
ELECTRONICS Semiconductor - Integrated Cir
PXLW Pixelworks Incorporated
TSEM Tower Semiconductor Ltd
ENERGY Independent Oil & Gas
APAGF Apco-Argentina Inc
ENERGY Oil & Gas Drilling & Explorati
KRU Crusader Energy Group Inc
FINANCIAL SERVICES Asset Management
BX The Blackstone Group L.P
FINANCIAL SERVICES Closed End Fund - Debt
BLJ Blackrock Nj Muni Bond Trust
DDF Delaware Inv Div & Inc Fd Inc
FINANCIAL SERVICES Closed End Fund - Equity
CLM Cornerstone Strategic Value
DDG Proshares Short Oil & Gas
FINANCIAL SERVICES Closed End Fund - Foreign
EMD Sal Brothers Emerging Incm Fd
FINANCIAL SERVICES Credit Services
COF Capital One Financial Cp
OSM SLM Corp
FINANCIAL SERVICES Diversified Investments
ADJ SPX Acclerated Return Note
CCT Comcast Corp
FINANCIAL SERVICES Investment Brokerage - Nationa
ISM SLM Corp
FOOD & BEVERAGE Beverages - Brewers
DEO Diageo Plc Ads
HEALTH SERVICES Medical Appliances & Equipment
AMMD American Medical Systems
HEALTH SERVICES Medical Instruments & Supplies
ANGO Angiodynamics
DXCM DexCom Inc
HEALTH SERVICES Medical Laboratories & Researc
SPEX Spherix Inc
HEALTH SERVICES Specialized Health Services
ANCI American CareSource Holdings I
INSURANCE Insurance Brokers
BRO Brown & Brown
INSURANCE Property & Casualty Insurance
HTH Hilltop Holdings Inc
MRH Montpelier Re
INSURANCE Surety & Title Insurance
ABK Ambac Financial Group
FNF Fidelity National Finl
INTERNET Internet Information Providers
ADAM A.D.A.M. Inc
INTERNET Internet Service Providers
GSB Globalscape Inc
LEISURE Gaming Activities
PTEK PokerTek Inc
LEISURE Restaurants
FRS Frisch's Restaurants Inc
MANUFACTURING Industrial Electrical Equipmen
AETI American Electric Technology I
MANUFACTURING Industrial Equipment & Compone
SNHY Sun Hydraulics Corp
MATERIALS & CONSTRUCTION General Building Materials
SHW Sherwin-Williams Co
MATERIALS & CONSTRUCTION Heavy Construction
MTZ Mastec Inc
MATERIALS & CONSTRUCTION Manufactured Housing
SKY Skyline Corp
MATERIALS & CONSTRUCTION Residential Construction
HOV Hovnanian Enterprises A
KBH Kb Home
MATERIALS & CONSTRUCTION Waste Management
AWX Avalon Holdings Corp
MEDIA Broadcasting - Radio
CCU Clear Channel Comm Inc
EMMS Emmis Communication Cl A
MEDIA Broadcasting - TV
NXST Nexstar Broadcasting Group
TZA Tv Azteca Sa De Cv Ads
MEDIA Publishing - Books
SCHL Scholastic Corp
METALS & MINING Industrial Metals & Minerals
MEE Massey Energy Company
NANX Nanophase Technologies C
REAL ESTATE Property Management/Developmen
GYRO Gyrodyne Co Amer Inc
SCC Security Capital Corp A
REAL ESTATE REIT - Diversified/Industrial
ANH Anworth Mtg Asset Corp
DCT Dct Industrial Trust Inc
REAL ESTATE REIT - Healthcare Facilities
NHI National Health Investor
REAL ESTATE REIT - Office
BDN Brandywine Realty Trust
KRC Kilroy Realty Corp
REAL ESTATE REIT - Retail
FRT Federal Realty Investmnt
RETAIL Discount
DLTR Dollar Tree Stores Inc
RETAIL Electronics Stores
GME Gamestop Corp
RETAIL Grocery Stores
BSI Blue Square Israel Ltd
RETAIL Home Improvement Stores
HD Home Depot Inc
SPECIALTY RETAIL Specialty Retail
BAMM Books-A-Million Inc
CSH Cash America Internat
TELECOMMUNICATIONS Telecom Services - Foreign
MTE Mahanagar Telephone Nigam
TELECOMMUNICATIONS Wireless Communications
GRRF China Grentech Corp Limited AD
TRANSPORTATION Major Airlines
DAL Delta Air Lines Inc
TRANSPORTATION Shipping
DHT Double Hull Tankers Inc
TRANSPORTATION Trucking
ABFS Arkansas Best Corp
UTILITIES Gas Utilities
EPB El Paso Pipeline Partners
WHOLESALE Medical Equipment Wholesale
PDEX Pro-Dex Inc Co
--------------------------------------------
NEGATIVE VRs
--------------------------------------------
.. CANADIAN STOCKS ... Canadian Stocks
CNQ.UN CANADIAN NATURAL RESOURCES LTD
FN.UN FIRST NATIONAL FINANC
FTT FINNING INTERNATIONAL
GTU.UN Central Gold Trust
HBM.UN HUDBAY MINERALS INC
HOU HORIZONS CRUDE OIL BULL PLUS
HXU HORIZONS BETAPRO S&P/
JAZ.UN JAZZ AIR INCOME FUND
NVA NUVISTA ENERGY LIMITE
PAA.UN PAN AMERICAN SILVER
SLW.UN SILVER WHEATON CORP
TWF.UN TIMBERWEST FOREST COR
XIU.UN IUNITS S&P/TSX 60 IND
XSP ISHARES CDN S&P 500 H
--------------------------------------------
U.S. STOCKS:
--------------------------------------------
AEROSPACE/DEFENSE Aerospace/Defense Major Dive
GD General Dynamics Corp
GR Goodrich Corp
AEROSPACE/DEFENSE Aerospace/Defense Products & S
KAMN Kaman Corp
ORB Orbital Sciences Corp
AUTOMOTIVE Auto Manufacturers - Major
HMC Honda Motor Co Ltd Adr
TM Toyota Motor Corp Ads
AUTOMOTIVE Auto Parts
ARGN Amerigon Inc
AXL American Axle & Manufact
AUTOMOTIVE Trucks & Other Vehicles
NAV Navistar Internat Corp
BANKING Foreign Regional Banks
LYG Lloyds Tsb Group Plc
SHG Shinhan Finl Grp Co Ltd
BANKING Money Center Banks
BCS Barclays Plc Adr
CS Credit Suisse Group
BANKING Regional - Mid-Atlantic Banks
ASFN Atlantic Southern Financial Gr
CBAN Colony Bankcorp Inc
BANKING Regional - Midwest Banks
FBIZ First Business Financial Servi
GABC German American Bancorp
BANKING Regional - Northeast Banks
BERK Berkshire Bancorp Inc
BNCL Beneficial Mutual Bancorp Inc
BANKING Regional - Pacific Banks
BMRC Bank of Marin
PFBC Preferred Bank Los Angeles
BANKING Regional - Southeast Banks
PBIB Porter Bancorp Inc
BANKING Regional - Southwest Banks
BANF Bancfirst Corp Oklahoma
BANKING Savings & Loans
BYFC Broadway Financial Corp
CNY Carver Bancorp Inc
CHEMICALS Agricultural Chemicals
AVD American Vanguard Corp
CF CF Industries Holdings Inc
CHEMICALS Chemicals - Major Diversified
DD Dupont E I Nemours & Co
DOW Dow Chemical Co
CHEMICALS Specialty Chemicals
BAK Braksem Sa
KRO Kronos Worldwide Inc
CHEMICALS Synthetics
AWC Alumina Limited
CCC Calgon Carbon Corp
COMPUTER HARDWARE Computer Based Systems
MXWL Maxwell Technologies Inc
XATA Xata Corp
COMPUTER HARDWARE Computer Peripherals
IMMR Immersion Corporation
LOGI Logitech Intl Adr
COMPUTER HARDWARE Data Storage Devices
CML Compellent Technologies` Inc.
IMN Imation Corp
COMPUTER HARDWARE Diversified Computer Systems
CRAY Cray Incorporated
IBM International Business Machine
COMPUTER HARDWARE Networking & Communication Dev
BBOX Black Box Corp
CSCO Cisco Systems Inc
COMPUTER HARDWARE Personal Computers
AAPL Apple Computer Inc
COMPUTER SOFTWARE & SERVICES Application Software
BMC Bmc Software Inc
CA Computer Assoc Intl Inc
COMPUTER SOFTWARE & SERVICES Business Software & Services
ADP Automatic Data Processng
CALD Callidus Software Inc
COMPUTER SOFTWARE & SERVICES Information & Delivery Service
DST Dst Systems Inc
COMPUTER SOFTWARE & SERVICES Information Technology Service
IGTE Igate Corporaion
SRX Sra Intl Inc
COMPUTER SOFTWARE & SERVICES Security Software & Services
DMRC Digimarc Corporation
COMPUTER SOFTWARE & SERVICES Technical & System Software
MANH Manhattan Associates Inc
MENT Mentor Graphics Corp
CONGLOMERATES Conglomerates
GY Gencorp Inc
HON Honeywell International
CONSUMER DURABLES Electronic Equipment
HIT Hitachi Ltd
MSN Emerson Radio Corp
CONSUMER DURABLES Home Furnishings & Fixtures
HUB.A Hubbell Inc Class A
SCSS Select Comfort Corp
CONSUMER DURABLES Housewares & Accessories
LANC Lancaster Colony Corp
NWL Newell Rubbermaid Inc
CONSUMER DURABLES Recreational Goods
JADE Lj Internat Inc
MOV Movado Group Inc
CONSUMER DURABLES Sporting Goods
COGO Comtech Group Inc
CONSUMER DURABLES Toys & Games
GPIC Gaming Partners Intl
MCZ Mad Catz Intract
CONSUMER NON-DURABLES Cleaning Products
DAR Darling International
CONSUMER NON-DURABLES Packaging & Containers
LABL Multi-Color Corp
SEE Sealed Air Corp
CONSUMER NON-DURABLES Paper & Paper Products
AVY Avery Dennison Corp
CVO Cenveo Inc
CONSUMER NON-DURABLES Rubber & Plastics
AEPI Aep Industries Inc
CSL Carlisle Companies Inc
CONSUMER NON-DURABLES Textile - Apparel Clothing
GES Guess? Incorporated
MFB Maidenform Inc
CONSUMER NON-DURABLES Textile - Apparel Footwear & A
BOOT Lacrosse Footwear Inc
BWS Brown Shoe Co Inc
DIVERSIFIED SERVICES Business/Management Services
ABM Abm Industries Inc
APEI American Public Education` Inc
DIVERSIFIED SERVICES Education & Training Services
CAST ChinaCast Education Corporatio
MBA Cibt Education Group Inc
DIVERSIFIED SERVICES Personal Services
STNR Steiner Leisure Limited
WU Western Union Company
DIVERSIFIED SERVICES Rental & Leasing Services
AER AerCap Holdings
MGRC Mcgrath Rentcorp
DIVERSIFIED SERVICES Research Services
CVD Covance Inc
ENCO Encorium Group Inc
DIVERSIFIED SERVICES Security & Protection Services
PNTR Pointer Telocation Ltd Ord
DIVERSIFIED SERVICES Staffing & Outsourcing Service
AHS Amn Healthcare
CDI Cdi Corp
DIVERSIFIED SERVICES Technical Services
SAI Saic Inc
DRUGS Biotechnology
EXAS Exact Sciences
GILD Gilead Sciences Inc
DRUGS Diagnostic Substances
ABAX Abaxis Inc
BLUD Immucor Inc
DRUGS Drug Delivery
FLML Flamel Technologies Sa
NKTR Nektar Therapeutics
DRUGS Drug Manufacturers - Major
AZN Astrazeneca Plc
JNJ Johnson & Johnson
DRUGS Drug Manufacturers - Other
ADLR Adolor Corporation
ALXN Alexion Pharmaceuticals
DRUGS Drug Related Products
NAII Natural Alternatives Int
NUTR Nutraceutical Intl Corp
DRUGS Drugs - Generic
CPD Caraco Pharm Labs
WPI Watson Pharmaceuticals
ELECTRONICS Diversified Electronics
AEIS Advanced Energy Ind Inc
AMSC American Superconductor
ELECTRONICS Printed Circuit Boards
BHE Benchmark Electronics
RAVN Raven Industries Inc
ELECTRONICS Scientific & Technical Instrum
A Agilent Technologies Inc
AUDC Audiocodes Ltd
ELECTRONICS Semiconductor - Broad Line
CAVM Cavium Networks Inc
OPXT Opnext Inc
ELECTRONICS Semiconductor - Integrated Cir
BRCM Broadcom Corp Cl A
DIOD Diodes Inc
ELECTRONICS Semiconductor - Memory Chips
RMBS Rambus Inc
SIMG Silicon Image Inc
ELECTRONICS Semiconductor - Specialized
ARMH ARM Holdings PLC ADS
LOGC Logic Devices Inc
ELECTRONICS Semiconductor Equipment & Mate
ASMI Asm Internat N.V.
ASML Asml Hldgs Nv Ny Reg Shs
ENERGY Independent Oil & Gas
AEZ American Oil & Gas Inc
APA Apache Corp
ENERGY Major Integrated Oil & Gas
COP Conocophillips
CVX Chevron Corp
ENERGY Oil & Gas Drilling & Explorati
ATW Atwood Oceanics Inc
BBG Bill Barrett Corp
ENERGY Oil & Gas Equipment & Services
BHI Baker Hughes Inc
CGV Cgg Veritas
ENERGY Oil & Gas Pipelines
EEP Enbridge Energy Partners Lp
ENB Enbridge Inc
ENERGY Oil & Gas Refining & Marketing
ETP Energy Transfer Pntr Lp
HES Hess Corp
FINANCIAL SERVICES Asset Management
CNS Cohen & Steers Inc
IAAC Internat Asset Holdg Cp
FINANCIAL SERVICES Closed End Fund - Debt
BCV Bancroft Convertible Fd
BDJ BlackRock Enhanced Dividend Ac
FINANCIAL SERVICES Closed End Fund - Equity
ADRD BLDRS Developed Markets 100 AD
BDD PowerShares DB Base Metals Dou
FINANCIAL SERVICES Closed End Fund - Foreign
CAF Morgan Stanley China A Share
DEW WisdomTree Europe High-Yieldin
FINANCIAL SERVICES Credit Services
ECPG Encore Capital Group
PRS Primus Guaranty
FINANCIAL SERVICES Diversified Investments
CODI Compass Diversified Trust
DRH Diamondrock Hospitality Co
FINANCIAL SERVICES Investment Brokerage - Nationa
BGCP Bgc Partners Inc
FINANCIAL SERVICES Investment Brokerage - Regiona
GFIG Gfi Group
RJF Raymond James Financial
FOOD & BEVERAGE Beverages - Brewers
FMX Fomento Economico Mex
FOOD & BEVERAGE Beverages - Soft Drinks
CCE Coca-Cola Enterprises
CCH Coca-cola Hellenic Bottling Co
FOOD & BEVERAGE Farm Products
CQB Chiquita Brands Intl Inc
FOOD & BEVERAGE Food - Major Diversified
HNZ H.J. Heinz Co
FOOD & BEVERAGE Processed & Packaged Goods
MKC Mccormick & Company Inc
HEALTH SERVICES Health Care Plans
AET Aetna Inc New
CNC Centene Corp
HEALTH SERVICES Home Health Care
AFAM Almost Family Inc
LHCG LHC Group
HEALTH SERVICES Hospitals
AMSG Amsurg Corp Common
DYII Dynacq Healthcare Inc
HEALTH SERVICES Long-Term Care Facilities
ESC Emeritus Corp
NHC National Healthcare Corp
HEALTH SERVICES Medical Appliances & Equipment
ALGN Align Tech Inc
GIVN Given Imaging Ltd
HEALTH SERVICES Medical Instruments & Supplies
BCR C.R. Bard Inc
BDX Becton Dickinson & Co
HEALTH SERVICES Medical Laboratories & Researc
DGX Quest Diagnostics Inc
GHDX Genomic Health Inc
HEALTH SERVICES Medical Practitioners
LCAV Lca-vision New
HEALTH SERVICES Specialized Health Services
ESRX Express Scripts Inc
INSURANCE Accident & Health Insurance
AFL Aflac Inc
TMK Torchmark Corp
INSURANCE Insurance Brokers
CRVL Corvel Corp
INSURANCE Life Insurance
AEG Aegon Nv
MFC Manulife Financial Corp
INSURANCE Property & Casualty Insurance
AFG American Fncl Grp Hld Co
AIG American Internat Group
INSURANCE Surety & Title Insurance
TRH Transatlantic Hldgs
INTERNET Internet Information Providers
CHINA CDC Corp Class A
MOVE Move Inc
INTERNET Internet Software & Services
AMZN Amazon.Com Inc
ARTG Art Technology Group Inc
LEISURE Gaming Activities
MGAM Multimedia Games Inc
LEISURE General Entertainment
RCL Royal Caribbean Cruises
LEISURE Lodging
IHG Intercontinental Hotels Grp Ad
RLH Red Lions Hotel Corp
LEISURE Resorts & Casinos
MCRI Monarch Casino & Resort
LEISURE Restaurants
BWLD Buffalo Wild Wings
CMG Chipotle Mexican Grill
LEISURE Specialty Eateries
THI Tim Hortons Inc
LEISURE Sporting Activities
TRK Speedway Motorsports Inc
MANUFACTURING Diversified Machinery
ALY Allis-Chalmers Energy Inc
FLS Flowserve Corp
MANUFACTURING Farm & Construction Machinery
BUCY Bucyrus International Inc
CAT Caterpillar Inc
MANUFACTURING Industrial Electrical Equipmen
ENS Enersys Inc
FELE Franklin Electric Co Inc
MANUFACTURING Industrial Equipment & Compone
ASEI American Science & Engineering
[bleeep] [bleeep] Inc
MANUFACTURING Metal Fabrication
GHM Graham Corp
GTLS Chart Industries Inc
MANUFACTURING Pollution & Treatment Controls
PURE Pure Bioscience
WPRT Westport Innovations Inc
MANUFACTURING Small Tools & Accessories
MKTAY Makita Corp Spons Adr
SWK Stanley Worksthe
MANUFACTURING Textile Manufacturing
LDL Lydall Inc
MATERIALS & CONSTRUCTION General Building Materials
AMN Ameron Internat Corp
CRR Carbo Ceramics Inc
MATERIALS & CONSTRUCTION Lumber
KOP Koppers Holdings
MATERIALS & CONSTRUCTION Manufactured Housing
NOBH Nobility Homes Inc
MATERIALS & CONSTRUCTION Residential Construction
GFA Gafisa SA ADR
XIN Xinyuan Real Estate Co Ltd
MEDIA Advertising Services
OMC Omnicom Group Inc
MEDIA Broadcasting - Radio
ROIA Radio One Inc
MEDIA Broadcasting - TV
SBGI Sinclair Broadcast Gp A
TVL Lin Tv Corp
MEDIA CATV Systems
ASCMA Ascent Media Corp
LBTYA Liberty Global Inc Class A
MEDIA Entertainment - Diversified
DISCK Discovery Communications Inc
VIA Viacom Inc Cl A
MEDIA Marketing Services
NCMI National Cinemedia Inc
SGK Schawk Inc
METALS & MINING Gold
BVN Compania De Minas Buena
NEM Newmont Mining Corp
METALS & MINING Industrial Metals & Minerals
CCJ Cameco Corp
EC Engelhard Corp
METALS & MINING Silver
HL Hecla Mining Co
PAAS Pan Amer Silver Cp
METALS & MINING Steel & Iron
CRS Carpenter Technol Corp
HAYN Haynes International Inc.
REAL ESTATE Property Management/Developmen
BPO Brookfield Properties
CPI Capital Properties Cl A
REAL ESTATE REIT - Diversified/Industrial
ALX Alexander's Inc
EGP Eastgroup Properties Inc
REAL ESTATE REIT - Hotel/Motel
HT Hersha Hospitality Trust
REAL ESTATE REIT - Office
BMR BioMed Realty Trust Inc
CLI Mack Cali Realty Corp
REAL ESTATE REIT - Residential
AVB Avalonbay Communities
CPT Camden Property Trust
REAL ESTATE REIT - Retail
GRT Glimcher Realty Trust
KRG Kite Realty Grp Tr
RETAIL Auto Parts Stores
AAP Advance Auto Parts Inc
PBY Pep Boys Manny Moe&Jack
RETAIL Catalog & Mail Order Houses
GAIA Gaiam Incorporated Cl A
HSNI HSN` Inc.
RETAIL Department Stores
DDS Dillard's Inc
RETAIL Discount
BJ Bj's Wholesale Club Inc
CM Coles Myer Ltd
RETAIL Drug Stores
MHS Medco Health Solutions
RETAIL Grocery Stores
IMKTA Ingles Markets Inc Cl A
KR Kroger Company
RETAIL Home Furnishing Stores
BBBY Bed Bath & Beyond Inc
RETAIL Home Improvement Stores
BLDR Builders FirstSource Inc
SPECIALTY RETAIL Apparel Stores
ANF Abercrombie & Fitch Co
ANN Ann Taylor Stores Corp
SPECIALTY RETAIL Auto Dealerships
LAD Lithia Motors Inc Cl A
RUSHA Rush Enterprises Inc Cl A
SPECIALTY RETAIL Jewelry Stores
TIF Tiffany & Co
SPECIALTY RETAIL Specialty Retail
FCFS First Cash Financial Svc
PERF Perfumania Hlds Inc
SPECIALTY RETAIL Sporting Goods Stores
BGFV Big 5 Sporting Goods Corp
DKS Dick's Sporting Goods
SPECIALTY RETAIL Toy & Hobby Stores
BBW Build-a-bear Workshop
TELECOMMUNICATIONS Communication Equipment
ALU Alcatel-Lucent
APSG Applied Signal Tech Inc
TELECOMMUNICATIONS Diversified Communication Serv
CNTF China Techfaith Wireless Commu
XING Qiao Xing Univ Telephone
TELECOMMUNICATIONS Long Distance Carriers
T At&T Corp
TELECOMMUNICATIONS Processing Systems & Products
ITI Iteris Inc
LIFE Lifeline Systems Inc
TELECOMMUNICATIONS Telecom Services - Domestic
BCE Bce Inc
CTL Centurytel Inc
TELECOMMUNICATIONS Telecom Services - Foreign
CEL Grupo Iusacell Sa De Cv
NTL Nortel Invesora Sa Ads
TELECOMMUNICATIONS Wireless Communications
AMOV America Movil Sa De Dv
AMX America Movil
TOBACCO Cigarettes
BTI British Amer Tob Plc
TOBACCO Tobacco Products
UST Ust Inc
TRANSPORTATION Air Delivery & Freight Service
ATSG Air Transport Services
TRANSPORTATION Air Services
AAWW Atlas Air Worldwide Holdings I
AIRM Air Methods Corp
TRANSPORTATION Regional Airlines
HA Hawaiian Hldgs Inc
TRANSPORTATION Shipping
EXM Excel Maritime Carriers
KEX Kirby Corp
TRANSPORTATION Trucking
CVTI Covenant Transport Cl A
JBHT JB Hunt Transport Services
UTILITIES Diversified Utilities
CNP Centerpoint Energy Inc
DPL Dpl Inc
UTILITIES Electric Utilities
AES Aes Corporation
BKH Black Hills Corp
UTILITIES Foreign Utilities
HNP Huaneng Power Intl Inc
VE Veolia Environment
UTILITIES Gas Utilities
ATO Atmos Energy Corp
GAS Nicor Inc
UTILITIES Water Utilities
AWR American State Water Co
MSEX Middlesex Water Co
WHOLESALE Auto Parts Wholesale
LKQX Lkq Corporation
WHOLESALE Building Materials Wholesale
IBI Interline Brands
LAWS Lawson Products Inc
WHOLESALE Computers Wholesale
EFII Electronics For Imaging
IM Ingram Micro Inc
WHOLESALE Drugs Wholesale
MCK Mckesson Corp
NUS Nu Skin Enterprises
WHOLESALE Electronics Wholesale
AGYS Agilsys Inc
HWCC Houston Wire & Cable Company
WHOLESALE Food Wholesale
SVU Supervalu Inc
UNFI United Natural Foods Inc
WHOLESALE Industrial Equipment Wholesale
AIT Applied Industrial Tech
NOV National Oilwell Varco Inc
WHOLESALE Medical Equipment Wholesale
OMI Owens & Minor Inc
PDCO Patterson Companies Inc
WHOLESALE Wholesale
AE Adams Resources & Energy
MUSA Metals Usa Inc
Can the Dollar Rally on a 'Cautious QE' and Strong Denials of a Dollar Devaluation Strategy?
Since peaking in June, the dollar has arguably experienced a near freefall. These moves reflect the near certainty felt amongst investors and traders about the Federal Reserve's intention to print more currency to forestall the threat of deflation. However, with dollar shorts at their highest levels in three years and the dollar index stalling at the next support level, it is time to look out for a potential relief rally.
Assuming the dollar short has become an extremely crowded trade, it will only take a little dose of uncertainty in the dollar's weakness to motivate traders to lock in profits and/or dissuade new sellers from joining the party (if any new sellers remain). Over the last few days, the market has absorbed statements from Ben Bernanke and U.S. Treasury Secretary Timothy Geithner that could generate a few doses of uncertainty about the dollar's weakness.
On Friday, Bernanke gave a speech titled "Monetary Policy Objectives and Tools in a Low-Inflation Environment" where he laid out the Federal Reserve's tentative plans for attacking the risks of deflation. While overall it seems the Fed is ready to dig in its heels on this fight and do whatever it thinks is necessary, Bernanke admitted to limits of the Fed's effectiveness, to a high level of uncertainty regarding outcomes, and to the very real risks of unknown costs for taking anti-deflationary action. Here are some key quotes:
"Although attaining the long-run sustainable rate of unemployment and achieving the mandate-consistent rate of inflation are both key objectives of monetary policy, the two objectives are somewhat different in nature. Most importantly, whereas monetary policymakers clearly have the ability to determine the inflation rate in the long run, they have little or no control over the longer-run sustainable unemployment rate, which is primarily determined by demographic and structural factors, not by monetary policy. Thus, while central bankers can choose the value of inflation they wish to target, the sustainable unemployment rate can only be estimated, and is subject to substantial uncertainty.
Given the Committee's objectives, there would appear-all else being equal-to be a case for further action. However, as I indicated earlier, one of the implications of a low-inflation environment is that policy is more likely to be constrained by the fact that nominal interest rates cannot be reduced below zero. Indeed, the Federal Reserve reduced its target for the federal funds rate to a range of 0 to 25 basis points almost two years ago, in December 2008. Further policy accommodation is certainly possible even with the overnight interest rate at zero, but nonconventional policies have costs and limitations that must be taken into account in judging whether and how aggressively they should be used.
However, possible costs must be weighed against the potential benefits of nonconventional policies. One disadvantage of asset purchases relative to conventional monetary policy is that we have much less experience in judging the economic effects of this policy instrument, which makes it challenging to determine the appropriate quantity and pace of purchases and to communicate this policy response to the public. These factors have dictated that the FOMC proceed with some caution in deciding whether to engage in further purchases of longer-term securities.
Another concern associated with additional securities purchases is that substantial further expansion of the balance sheet could reduce public confidence in the Fed's ability to execute a smooth exit from its accommodative policies at the appropriate time. Even if unjustified, such a reduction in confidence might lead to an undesired increase in inflation expectations, to a level above the Committee's inflation objective. To address such concerns and to ensure that it can withdraw monetary accommodation smoothly at the appropriate time, the Federal Reserve has developed an array of new tools. With these tools in hand, I am confident that the FOMC will be able to tighten monetary conditions when warranted, even if the balance sheet remains considerably larger than normal at that time."
Bernanke is so concerned with the Fed's ability to execute anti-deflationary policy that he openly signaled the Fed might try a heavy dose of extra jawboning to tease inflation back up toward the Fed's target:
"A step the Committee could consider, if conditions called for it, would be to modify the language of the statement in some way that indicates that the Committee expects to keep the target for the federal funds rate low for longer than markets expect."
In other words, whatever type of QE unfolds starting in November, it is likely to be a "cautious QE." It will not likely be the kind of full sprint that would cause the dollar to drive to zero overnight. Bernanke is even claiming that the Fed will remain mindful of the potential adverse consequences of its actions. While I remain dubious that the Federal Reserve will be able to tighten when needed, I am very intrigued to hear the Chairman even mention tightening in the same breath he uses to lay out a plan for further easing of policy. Overall, these are ingredients that should give the most aggressive dollar shorts some pause and motivate at least the marginal positions to close up shop as they pullback to "wait and see" and re-evaluate the potential pace for the dollar's future weakness.
Timothy Geithner really threw me for a loop - so much so, that I am still incredulous. But I still offer up his claims because they were noteworthy and thus represent information that the market may internalize. On Monday, Geithner spoke at the latest meeting of The Commonwealth Club of California and reassured the audience that:
"It is very important for people to understand that the United States of America and no country around the world can devalue its way to prosperity, to [be] competitive.It is not a viable, feasible strategy and we will not engage in it.[the United States needs to] work hard to preserve confidence in the strong dollar."
This went a little beyond the obligatory "strong dollar policy" reiterated in ever so unconvincing fashion by Geithner and his predecessors over the many years. So, the statement deserves some reflection and, again, provides a potential catalyst for marginal dollar shorts to exit and begin a dollar relief rally.
Regardless of whether one believes Bernanke or Geithner or thier chances for success in executing their stated policy positions, the implications of these words should be respected in an environment in which the dollar has been in near freefall. If a relief rally unfolds, there will be a good chance that the dollar index will not retest current support for some time to come. Moreover, the euro is signaling some confirming evidence by its struggle to break and hold the 1.40 level against the U.S. dollar (the euro is a little over 50% of the dollar index).
Here are the weekly and daily charts of the dollar index to show how it has successfully tested the next level of support, an upward trendline from the 2008 lows. As with all technical levels of importance, a break of this support will put even lower levels into play.
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DISCLAIMER
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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 s pecific delivery times due to factors beyond our control.
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