The VRTrader.com VR Silver Newsletter - Monday 3/21/2011"Tools for the High Performance Trader"
Copyright ©2011, All rights reserved.
Redistribution in any form is strictly prohibited. CLOSING COMMENTARY | by Mark Leibovit Closing Comments
Monday, March 21, 2011
Closing Comments
Metastock has announced the release of my Leibovit Volume Reversal 'plug-ins':
http://tinyurl.com/469bbzh
Whether you're a trader or money manager, the use of my plug-in will be an invaluable and unique complement to your regimen.
It is 30 years in the making, so don't miss it!
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My book 'The Trader's Book of Volume'(published by McGraw-Hill) is now available.
Here is the link to Amazon.com:
http://tinyurl.com/2a494fb
--------------------------------------------If you purchased the 2011 Annual Forecast Model (AFM) (VR Forecaster Report) you would have known in advance that the market was going to nosedive in March. Check it out! No price is too high for good info. It covers cyclical projections for the Dow Industrials, the TSX, Gold, Crude Oil, 10-Year Interest Rate Yields and the US Dollar Index. The Model has been published since 1987 and has garnered a respectable following among traders and investors seeking an overall 'timing' tool for the major markets. Here is the link:
https://www.vrtrader...cribe/index.asp
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Commentary below from Mark Leibovit, TIMER DIGEST's #1 Intermediate Market Timer for the 10-year period ending in 2007 AND the #2 Intermediate Market Timer for the 10-year period ending in 2009. Also, TIMER DIGEST's #3 Gold Timer for the Ten Year Period ending 12/31/10.
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Equities exploded higher out of the gate today on positive M&A news as they posted solid gains. For the session the Dow was up 178.01 at 12,036.53, the S&P 500 was up 19.18 at 1298.38, and the Nasdaq Composite was up 48.42 at 2692.09. Volume decreased from Friday and breadth was strong. Tomorrow is 'Turnaround Tuesday', so with the market now up 3 days in a row we shouldn't be surprised if we get a pullback. However, it appears we've seen the lows (due in the current time frame) and we're headed to new market highs. As my friend, Don Vialoux says, we're in a 'sweet spot' to buy stocks for a rally into May. Sell May and go away? Perhaps.
The dollar was weaker as the U.S. Dollar Index was off .230 at 75.425.
Gold was stronger on high mideast tensions coupled with a weaker dollar. Gold was up 7.20 at 1426.90. Silver was up .86 at 36.14, platinum was up 22 at 1743, and palladium was up 17 at 746. Silver seems destined to make new highs with potential into the 40s. Will it do it now? I would make that bet. Gold above the 1446 area should give it kick toward 1500.
Copper was sharply lower as the May contract settled .0530 lower at 4.2860. Copper is a big play on the rebuilding of Japan and I'm a bull.
Crude oil was strong as it settled 1.26 higher at 102.33. The Crude Oil bears are getting another enema. I see now reason why Crude Oil should decline. By the same token, I am uncertain what upside target to place on Crude. Jim Rogers says longer-term we're headed to $200 a barrel. I better start shopping for another hybrid or, better yet, learn to use my bicycle more!
In economic news, February existing home sales came in at an annualized rate of 4.88 million units vs. consensus of 5.05 million units. Sales for the prior month were revised upward to an annualized rate of 5.40 million units.
A strong favor for stocks today sent the major equity averages up to impressive gains. The advance has culminated in the Dow's best three-session performance since September.
Although an escalation of military engagement in Libya sent oil prices up more than 1% to close pit trade above $102 per barrel, news that Japan has made progress in its efforts to restore damaged nuclear facilities helped quell concerns about a potential meltdown. That helped both foreign markets and U.S. equity averages add to the gains that they staged late last week.
Today's leaders were energy (XLE +3.04%), silver (SLV +3.01%), and gold miners (GDX +2.40%).
Today's laggards were telecom (IYZ -1.13%), base metals (DBB -0.90%), and treasuries (TLT -0.59%).
Treasuries fell as concern eased that Japan will suffer a nuclear meltdown and after the U.S. said it plans to sell holdings of agency-guaranteed mortgage- backed securities bought during the financial collapse.
Ten-year notes dropped for a third day in the longest losing streak in six weeks as stocks gained after Japan's Prime Minister Naoto Kan said progress is being made in restoring power to reactors. The Treasury Department said demand for mortgage-backed securities guaranteed by Fannie Mae and Freddie Mac has improved along with broader financial conditions.
The yield on the 10-year note rose six basis points, or 0.06 percentage point, to 3.33 percent at 4:08 p.m. in New York, according to Bloomberg Bond Trader prices. The price of the 3.625 percent note maturing in February 2021 fell 15/32, or $4.69 per $1,000 face amount, to 102 1/2.
The benchmark note's yield earlier gained 10 basis points to 3.36 percent, the highest level in a week. Yields on 30-year bonds advanced three basis points to 4.45 percent.
OptionsXpress Holdings Inc. soared 17 percent to $17.90. Charles Schwab agreed to buy the Chicago-based company for $1 billion in stock, adding the 10-year-old retail options broker to its equity and mutual fund offerings. The largest independent brokerage by client asset will exchange 1.02 shares for each share of OptionsXpress. Charles Schwab added 0.5 percent to $17.65.
American International Group Inc. rose 6 percent to $37.03 even after the insurer bailed out by U.S. taxpayers said first-quarter catastrophes including the earthquake in Japan will cost the company about $1 billion this quarter.
An index of energy shares rallied 2.9 percent, the most in the S&P 500 within 10 industries. Oil rose as allied air strikes in Libya threatened to prolong a supply disruption in Africa's third-biggest producer and on concern that escalating turmoil may curtail Middle East shipments.
Exxon Mobil Corp. gained 2.5 percent to $82.84. ConocoPhillips climbed 2.9 percent to $77.55.
CBS Corp. gained 5.5 percent to $24.51. Ratings from the NCAA basketball tournament have been up 11 percent from the same period last year, David Joyce, analyst at Miller Tabak & Co., said in a note today. There has been strong demand for advertising and the tournament should be "the second-largest sports ad revenue event after the Super Bowl," he wrote.
Tiffany & Co. climbed 5.1 percent to $60.22. The world's second-largest luxury jewelry retailer reported a 29 percent gain in fourth-quarter profit as sales exceeded analyst estimates during the holiday season.
Citigroup Inc. lost 1.5 percent to $4.43 after reporting a 1-for-10 reverse split of its common stock. Citigroup also reported that it intends to reinstate a quarterly dividend of 1 cent per common share in the second quarter of 2011, following the effective date of the reverse stock split.
In after hours news, Sprint shares rose 0.4% to $4.38. During the day, they tumbled 13.6%, their worst percentage loss since mid-March 2009 as Wall Street targeted the company as one of the most to lose from AT&T Inc.'s planned $39 billion purchase of T-Mobile USA from Deutsche Telekom. AT&T's late-traded shares were up a penny at $28.27.
Citigroup Inc. shares topped Nasdaq's list of the late-session's most actively traded shares, though their price was unchanged at $4.43. The shares closed the day session down 1.5% after giving back earlier advances. Citi said it plans a 1-for-10 reverse stock split of common shares effective after the close of trading on May 6, and to reinstate a quarterly dividend of a penny a share in the second quarter following the reverse split. Read MarketWatch First Take on Citigroup.
Analysts at Barclays Capital told clients the reverse stock split will pressure trading volume on cash equity exchanges. Citigroup year-to-date has been averaging about 516 million shares a day, or 6% of overall industry average daily volume, said Barclays, and factoring in what it considers the most extreme scenario for the exchanges, "we could see a decline of roughly 5%-6%" in overall industry average daily volume, or 464 million shares based on year-to-date figures.
However, Barclays said the reverse stock split is likely to have just a "muted" impact on per-share earnings for Nasdaq OMX Group.
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Canadian News
The Toronto stock market made some significant gains to close more than 200 points higher on Monday as oil and gold prices pushed ahead, helping the market to rebound from volatility last week.
The S&P /TSX composite index moved up 224.07 points to 14,013.7 with all major sectors in positive territory.
The TSX Venture Exchange gained 41.37 points to 2,285.24.
The Canadian dollar was up 0.66 of a cent to 102.07 cents US, as the U.S. dollar dropped to a four-and-a-half month low against the euro and slid against most other currencies.
The energy sector on the TSX moved up 2.3 per cent with shares in Suncor Energy Inc. gaining $1.54 to C$44.63 apiece.
An improvement in investors' risk appetite Monday was also evident in the equities markets, with most indexes around the world up solidly at the start of a trading week that will likely to be dominated again by developments in Japan and Libya.
The TSX ended last week up about one per cent. It finished Monday up another 1.6 per cent.
Investors' appetite for riskier trades, such as stocks, has been weighed down in recent weeks by the confluence of events around the world. On top of Japan 's massive earthquake and subsequent tsunami, investors had to grapple with the potential implications of a nuclear meltdown at the Fukushima power complex.
Over the weekend, Japanese officials reported some progress in their battle to bring the plant under control following near-constant dousing of dangerously overheated reactors and uranium fuel. However, on Monday, the plant's operator said it had just discovered that some of the cooling system's key pumps at the complex's troubled Unit 2 are no longer functional and will have to be replaced.
Canadian uranium companies saw substantial share price gains Monday after a selling off in that market last week due to fears over the future of nuclear power.
Shares in Uranium One added 14 per cent or 55 cents to $4.48 after the board of Mantra Resources Ltd. agreed to support a reduced takeover offer from Russian uranium producer JSC Atomredmetzoloto, which said last week the original price was too high in light of Japan 's nuclear power crisis.
The revised offer affects Vancouver-based Uranium One Inc., which will have the right to buy Mantra from ARMZ at a reduced price. Uranium One will also have more time to buy Mantra than under the previous agreement. Mantra shares rose 24 per cent or $1.26 to $6.60.
In corporate news, Lundin Mining Corp. has told its shareholders to reject a debt-financed takeover bid from Equinox Minerals, saying the unsolicited offer was "financially inadequate" and fraught with risks. Vancouver-based Lundin said the Equinox bid undervalued the company and would place considerable influence over business decisions in the hands of lenders. Shares in Lundin lost three cents to $7.31.
Workers at Teck Resources' Elkview coal operation in southeastern British Columbia have rejected a tentative labour agreement reached last week. A strike at the mine will continue but the company says it will attempt to restart discussions with the union. Teck shares lost 50 cents to $52.87.
AT&T said Sunday it will buy T-Mobile USA from Deutsche Telekom AG in a cash-and-stock deal valued at $39 billion that would make it the largest cellphone company in the U.S. That would likely give T-Mobile customers access to the BlackBerry 's major competitor, the Apple iPhone . Shares in BlackBerry maker Research in Motion gained 95 cents to $60.95.
Good Night.
