The VRTrader.com VR Silver Newsletter - Thursday 3/8/2012
"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
Thursday, March 08, 2012
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Opening Comments
Nightly Business Report (PBS Television), Friday, March 2, 2012:
http://tinyurl.com/82uq6ec
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Check out the Debt Clock. It is ticking against all of us:
http://www.usdebtclock.org/index.html
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NEAR-TERM SIGNALS:
STOCKS - ACTION ALERT - SELL (Looking To Buy In A Month Or Two)
The S&P 500 dropped like a rock on Tuesday finding support at 1340 coming off its 1378 high from February 29. As I told you, my downside objectives were 1323 and possibly 1270. Could we have bottomed after only a two-day correction? Anything is possible with Ben Bernanke at the Fed keyboard. There are a couple of items to consider. Seasonality points to some downside risk from March 1 to the end of May and volume was negative both coming off recent highs and during yesterday's bounce. The offset is that we achieved oversold readings very quickly. In addition, the 'Weird Wollie' phenomenon of a break to the downside mid week of the week prior to options expiration often sets up another rally try. If we cannot take recent highs within the next week or so, I would expect to see another selling wave unfold to the aforementioned lower targets. Barring the advent of a nuclear war or some other 'outlier' event, the Presidential election rally should resume this summe r and fall, especially if the markets senses Obama will be looking for another job. Bernanke is a desperate man, though he paints a cool demeanor in front of television cameras. The U.S. and Europe are essentially bankrupt, but using Fed smoke and mirrors, jaw-boning, trial balloons, false economic data, a friendly non-combative financial press while 'gifting' vast sums of money to friends of the financial aristocracy who are entrenched running this country, the push to make believe all is well may have a decent chance in succeeding. We just have to know when to run for the hills before the next big bust unfolds. And, there is no doubt in my mind its coming. An attempt is clearly be masterminded to drive all the major stock indexes back to or through their all-time highs. Having the ability to run the printing press 24/7 can clear create the desired effect. Ultimately, our only hope is that Ron Paul's call for return to fiscal responsibility is embraced by the next generation as they kick the bums out and we start on a clean sla te.
GOLD - ACTION ALERT - BUY (And Take Delivery Of The Physical Metals)
I am repeating yesterday morning's commentary: "We have learned that over the past several years that metals more often track with the stock market than against it, breaking the long-standing belief that gold goes up when stocks go down. I'm sure even the current relationship will in time be broken as well. Purchasing metals is viewed as a 'risk-on' trade, even though I see them as a hedge against government debauchery. Though we cannot trade on 'seasonality' alone, we have to pay attention to long standing patterns - one of which is a traditional high point the end of February for gold and a somewhat choppy topping pattern in silver that stretches into late May. Though few if any commentators wish to talk about it, it is clear to me based on my own readings and the work of www.gata.org that 'intervention' in the precious metal market has evolved into government sponsored 'financial terrorism', as I highlighted in last weekend's Leibovit VR Gold Letter. As American citizens ( fortunately Canadians do not have to worry about this now), we have to fight for our right to own the precious metals in the same breath as we fight for our Second Amendment rights. In my Nightly Business Report interview this past Friday evening, my host, Tom Hudson, jokingly referred to my recommendations as covering 'guns and silver'. There are solid reasons why both have drawn investor interest most notably the need to protect oneself from one's own government. Ammunition has become a valuable commodity along with gold and silver. It is better to be prepared than to wish you had prepared when it's too late."
Short-term, gold and silver are bouncing off oversold positions. While gold retraced into the mid 1600s as hoped, silver did not quite reach the 30-31 level I wrote about at the same time. Meanwhile, should spot gold clear 1792 and spot silver clear 37.60, fasten your seat belts - a moon shot will then likely unfold before out eyes. The sell-off was clearly 'engineered'. I sure hope those responsible have done a good job of covering up their tracks because analysts and commentators like myself will be doing our upmost to track them down and expose them for what they are - gangsters!
That said, they are doing the rest of us a big favor. As they attempt to drive down prices, they ultimately discourage producers (miners) from producing the needed metals. This could create untold shortages and drive buyers strictly to the physical market - a market these gangsters have little control over. Keep 'stacking' your gold and silver. When the upside explosion comes, there will none to be had.
BONDS - ACTION ALERT - NEUTRAL
Recent strength in bonds has been a warning that there is something 'rotten in Denmark' as investors seek safety. I remain NEUTRAL, but will post trading signals (Positive and Negative VRs) for Platinum subscribers seeking short-term trades. Yesterday, I presented a Leibovit VR chart for Treasury Bonds overlayed with various such signals formed in recent weeks. Check yesterday morning's report to view that chart if you missed it.
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UPCOMING ECONOMIC RELEASES/MARKET EVENTS
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THURSDAY MAR 8:
European Central Bank, Bank of Canada and Bank Of England interest rate policies released today.
Canada's February Housing Starts
8:15 AM ET
Weekly Initial Jobless Claims
8:30 AM ET
Bank of Canada Overnight Lending Rate
9:00 AM ET
Bloomberg Consumer Comfort Index
9:45 AM ET
Quarterly Services 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
3-Yr Note Announcement
11:00 AM ET
10-Yr Note Announcement
11:00 AM ET
30-Yr Bond Announcement
11:00 AM ET
Fed Balance Sheet
4:30 PM ET
Money Supply
4:30 PM ET
Earnings Reports:
Canadian Imperial Bank of Commerce, Canadian Natural Resources, Canadian Western Bank, Viterra
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FRIDAY MAR 9:
Canada's February Employment Report
7:00 AM ET
Monster Employment Index
February U.S. Non-Farm Payrolls
8:30 AM ET
January U.S. Trade Deficit
8:30 AM ET
Wholesale Trade
10:00 AM ET
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STOCK MARKET - SUMMARY
The stock market rallied yesterday, recovering about half of Tuesday's loss, after ADP reported that February was another good month for job creation, some positive signs out of Greece, and after a report that the Fed is considering so-called sterilized bond purchases to keep down interest rates. The Dow Industrials jumped 78.18 or 0.61% to 12,837.33. The S&P 500 rose 9.27 or 0.69% to 13523.63. The NASDAQ Composite gained 25.37 or 0.87% to 2935.69.
Yesterday was a "risk-on" day as risky stocks outperformed and defensive stocks lagged behind. The risky small-cap Russell 2000 rallied 1.10%. In contrast, defensive sectors barely participated in the rally (XLP +0.15%, XLU +0.06%, XLV +0.45%).
Among sectors, Financials led the rally yesterday (XLF +1.28%) after more owners of Greek bonds agreed to participate in the debt swap. A default would likely cost the banking sectors billions of dollars, so any avoidance of it is bullish for them.
Economically sensitive stocks also outperformed (XLI +1.03% and XLY +1.14%) after economic data continues to point to slow but steady growth.
Technology did well yesterday (XLK +0.75%) after Apple (AAPL +0.08%) unveiled its new iPad.
Breadth was positive, but volume fell. We saw heavy volume on Tuesday's decline but light volume on Wednesday's recovery. This is a bearish signal.
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DOW TRANSPORTS - SUMMARY-
Transportation stocks rallied with the rest of the market, but slightly underperformed as oil prices rose. The Dow Jones Transportation Average rose 26.41 or 0.52% to 5073.66.
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GOLD and METALS - SUMMARY
Precious metals recovered some of their recent losses as traders bought risk with the metals still trading like risky assets. Gold jumped 9.70 to 1684.30, silver rose 0.48 to 33.43, platinum jumped 18 to 1629, palladium rallied 19 to 684, and copper increased 0.0295 to 3.7670.
Switzerland Wants Its Gold Back From The New York Fed (Tyler Durden - zerohedge.com)
It has been reported that Germans are increasingly concerned that their gold, at over 3,400 tons a majority of which is likely stored in the vault 80 feet below street level of 33 Liberty (recently purchased by the Fed with freshly printed money at far higher than prevailing commercial real estate rates for the Downtown NY area), may be in jeopardy,and will likely soon formally inquire just how much of said gold is really held by the Fed. As it turns out, Germany is not alone: as part of the "Rettet Unser Schweizer Gold", or the "Gold Initiative": A Swiss Initiative to Secure the Swiss National Bank's Gold Reserves initiative, launched recently by four members of the Swiss parliament, the Swiss people should have a right to vote on 3 simple things: i) keeping the Swiss gold physically in Switzerland; ii) forbidding the SNB from selling any more of its gold reserves, and iii) the SNB has to hold at least 20% of its assets in gold. Needless the say the implications of this vote actually succeeding are comparable to the Greeks holding a referendum on whether or not to be in the Eurozone. And everyone saw how quickly G-Pap was "eliminated" within hours of making that particular threat. Yet it begs the question: how many more international grassroots outcries for if not repatriation, then at least an audit of foreign gold held by the New York Fed have to take place, before Goldman's (and New York Fed's) Bill Dudley relents? And why are the international central banks not disclosing what their people demand, if only to confirm that the gold is present and accounted for, even if it is at the Federal Reserve?
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URANIUM - SUMMARY
Spot Uranium traded at 51.75 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.
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BONDS - SUMMARY
Treasuries fell yesterday as traders shifted into stocks and commodities after good news on the US economy and Greece. Reports that the Fed is considering sterilized bond purchases-buying long-term bonds but borrowing the money from the short-term market-had little effect. The long bond future declined 16/32 to 141 16/32.
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CRUDE OIL - SUMMARY
Oil jumped after a bullish inventory report, a strong jobs report from ADP, and good news out of Greece. Crude oil rallied 1.46 to 106.16.
The Energy Information Administration reported an 800,000 barrel increase in crude supplies, below expectations of a 2 million barrel increase. Gasoline supplies fell by 400,000 versus forecasts of a 1.75 million barrel decline. Distillate stocks dropped 1.9 million barrels versus expectations of a 1.5 million barrel decrease.
Natural gas is back to new lows amid continued warm weather in the US. Natural gas fell 0.054 to 2.302, its lowest settlement in 10 years.
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US DOLLAR AND CURRENCIES- SUMMARY
The US Dollar Index fell a little yesterday after good news on the Greek debt swap and the US economy drove traders to riskier currencies. The US Dollar Index slipped 0.186 to 79.680.
The Institute of International Finance said that so far 30 participants representing nearly 40% of privately held debt will swap their old Greek bonds for new ones. Greece's Finance Ministry said it needs 75% participation for the deal to go through.
The Euro rose 0.28% against the Dollar.
China intends to extend renminbi loans to other BRICs nations, in another step towards the internationalisation of its currency.
The China Development Bank will sign a memorandum of understanding in New Delhi with its Brazilian, Russian, Indian, and South African counterparts on March 29, say people familiar with their talks. Under the agreement the bank, which lends mainly in dollars overseas, will make renminbi loans available, while the other BRICs nations' development banks will also extend loans denominated in their respective currencies.
The initiative aims to boost trade between the five nations and promote use of the renminbi, rather than US dollar, for international trade and cross-border lending. Under 13 per cent of China's Asia trade is transacted in renminbi, according to Helen Qiao, chief Asia economist for Morgan Stanley. HSBC estimates that the currency's share of regional trade could swell to up to 50 per cent by 2015.
While the US dollar has recently strengthened, many governments believe it will weaken over the longer term and want alternatives, other than the tarnished euro, to use for trade and investment. CDB recently extended a $30 billion loan to Petroleos de Venezuela, the state company, half of which will be repaid in oil.
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ECONOMIC NEWS:
Automatic Data Processing said that private employment rose by 216,000 in February. Economists had forecasted 215,000 new jobs.
Productivity rose 0.9% in the fourth quarter, up from a previous estimate of 0.7%. Unit labor costs rose 2.8%, up from a previous estimate of 1.2% and higher than forecasts of 1.9%.
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CANADIAN SUMMARY:
The Canadian market rallied yesterday on the worldwide move to risk yesterday and on strength in the commodity stocks. The TSX rose 51.53 or 0.42% to 12,350.16.
The TSX underperformed compared to the US market yesterday after Canada reported a 12.3% decrease in building permits.
Energy 276.20 2.44 (0.89%)
Financials 178.50 -0.51 (-0.28%)
Health Care 65.55 -0.13 (-0.20%)
Industrials 110.53 0.91 (0.83%)
Info Tech 25.09 0.12 (0.48%)
Metals & Mining 1,090.84 5.69 (0.52%)
Telecom 103.31 0.16 (0.16%)
Utilities 229.47 1.57 (0.69%)
Resistance is 12,798, 13,000, 13,120, 13,517, 13,901, 14,089, 14,329, 14,715, 15,000, 15,600. Support is 12,117, 11,703, 11,468, 11,420, 10,848, 10,700.
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CANADIAN TSX Venture:
The Venture rose even more than the TSX because of it concentration of mining and oil exploration stocks, which rose with commodity prices yesterday. The TSX Venture jumped 16.80 or 1.05% to 1621.67.
Resistance: 1696, 1771, 1804, 1814, 1833, 1851, 1954, 2107, 2127, 2254, 2291, 2400, 2465, 2535, 2575. Support: 1571, 1527, 1440, 1398, 1305.
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THE CANADIAN DOLLAR (using the FXC Exchange Traded Fund):
The Canadian Dollar rallied yesterday as traders moved to riskier currencies and as rising commodity prices helped the loonie. FXC increased 0.28 to 99.64.
Resistance is 101.10, 101.60, 102.23, 103.08, 105.59, 108.00, 110.00, 113.00. Support is 95.40, 94.72, 93.20, 92.50 91.82, 91.00, 89.75, 87.50 and 85.18.
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What is a Leibovit Volume Reversal?
A Leibovit Volume Reversal ™ is a change from a Rally day to a Reaction day accompanied by a increase of volume or a change from a Reaction day to Rally day accompanied by an increase in volume.
Leibovit Volume Reversals ™ coming off intermediate lows or highs have greater significance in helping to define those lows or highs and important pivot points in the marketplace. Check the daily VR List below or sign up for a free 30 day trial at MetaStock to access my VR Indicator anytime on your desktop. Use the following link to sign up:
http://www.vrplug-in.com/
The Volume Reversal ™ is a registered trademark and can only be used or quoted after receiving express written permission from VRTrader.com and Mark Leibovit.
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A comprehensive list of all LEIBOVIT VOLUME REVERSALS for all listed U.S. and Canadian stocks is available to VRtrader Platinum subscribers by clicking on 'Current VR List' on left side of the Home Page.
Canadian shares and both Canadian and U.S. ETF VRs for Wednesday, March 7, 2012 - Check Wednesday's Post-Market Commentary
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The Annual Forecast Model is now 'on-line' BUT YOU MUST SUBSCRIBE! It is a premium report.
Here is the link:
https://www.vrtrader...cribe/index.asp
The Annual Forecast Model (The VR Forecaster Report) is published each and every year in early February and comprises Mark Leibovit's proprietary cyclical forecast for the Dow Industrials and Gold. Don't miss the opportunity to see this Report that projects market direction and/or important cyclical change points months in advance. We have called it our 'Blueprint to the Future'. Unique to Mark Leibovit it has been published since the mid 1980s. Access to the report is provided via the website using the username and password provided to you.
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From Yale Hirsch:
My 1987 Stock Trader's Almanac was dedicated to THE NEW PROGNOSTICATORS.
Mark Leibovit was one of them. I evidently had insight as Timer Digest named Mark the
"Number One Market Timer for the 10-year period ending in 2007."
For the 10 years ending 2009, he was #2 intermediate Market Timer.
He is also their #1 Gold Market timer for 2011.
This book should be REQUIRED READING for anyone who trades.
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My book, 'The Trader's Book of Volume' (published by McGraw-Hill) is now available.
Here is the link to Traders Press:
http://www.invest-store.com/vrtrader/
Here is the link to Amazon.com:
http://tinyurl.com/3wms9q2
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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.
Mark Leibovit is also currently ranked #2 Gold Timer and was ranked #1 for the second-half of 2011.
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John Stewart - Comedy Central - Bernanke Caught In A Lie - Classic!
http://tinyurl.com/74uz6kd
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NOTE: Email address for inquiries is:
mark.vrtrader@gmail.com
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Mark Leibovit media and live presenations:
BNN (Business News Network) -
Link to February 10, 2012 interview:
http://watch.bnn.ca/#clip617150
Money Talks.net World Outlook Financial Conference, February 10, 2012 - Vancouver- http://tinyurl.com/72asl7p
Ira Epstein TV - February 27, 2012 -
http://www.iraepstei...-interview.html
Nightly Business Report (PBS Television), Friday, March 2, 2012:
http://tinyurl.com/82uq6ec
Fox Business News - February 20, 2012 -
http://tinyurl.com/86mx6g2
Hard Asset Conference - Marriott Marquis Hotel,- New York - May 14-15, 2012
Money Show - Caesars Palace - Las Vegas - May 16, 2012
United Astrology Conference - New Orleans Marriott - May 24-29, 2012 -
(P.S. I am not an astrologer, but this group is interested in my cyclical studies.)
http://www.marketviews.tv/ - Host, Ike Iossif - February 3, 2012 Interview
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Fed weighing new form of bond buying
Federal Reserve officials are considering a new type of quantitative easing that will attempt to boost the economy without accelerating inflation, according to a report published Wednesday.
Analysts said the new approach would allow the Fed to move despite high oil prices.
Under the new approach, the Fed would print new money to buy long-term mortgage or Treasury bonds but effectively tie up that money by borrowing it back for short periods at low rates, according to a story in The Wall Street Journal.
Economists said that Fed Chairman Ben Bernanke seemed to back away from more quantitative easing during two days of testimony before Congress last week. Financial markets have been unsettled since Bernanke's testimony.
Republicans in Congress have been urging the Fed not to undertake any more quantitative easing, arguing that it would lead to higher inflation eventually.
Richard Gilhooly, U.S. director of interest-rate strategy at TD Securities, said the new sterilized QE would allow the Fed to buy more assets with an eye toward keeping inflation expectations low.
"This would be dollar supportive and would be negative for risk assets such as gold," Gilhooly noted in an email to clients.
Many analysts do not think the Fed would be able to engineer another round of asset purchases unless inflation stays low in coming months.
Most Fed experts do not expect the central bank to announce any new asset-purchase program at its March 13 meeting.
"We don't think they will make any changes at this meeting, they are in a wait-and-see mode," said Yelena Shulyateva, an economist at BNP Paribas.
The Fed has an existing program in place to lower long-term interest rates. Since September, the Fed has been replacing short-term securities on its balance sheet with longer-term securities, a program known as Operation Twist. This $400 billion program ends in mid-June.
Shulyateva said the Fed may launch sterilized QE after Operation Twist ends.
The central bank is now more sensitive to the volatility in markets at the end of QE programs, as a result of unsettled conditions at the end of the Fed's second round of quantitative easing last June, Shulyateva said.
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Fed Up with the Fed
Tuesday, March 06, 2012 - by Ron Paul
While the Fed has recently released an unprecedented amount of information on its activities, there is still much that remains unknown. Predictably, every push towards transparency has been fought tooth and nail. It took disclosure requirements enacted within the Dodd-Frank Act to get the Fed to provide data on its emergency lending facilities. It took lawsuits filed by Bloomberg and Fox News to provide data on discount window lending during the worst parts of the financial crisis. And it will take further concerted action on the part of Congress, the media and the public to keep up pressure on the Fed to become and remain transparent.
Transparency is not a panacea, however, as a fully transparent organization is still capable of engaging in all sorts of mischief. Ironically, one of the Fed's more egregious recent actions, adopting an explicit inflation target, was hailed by many as another wonderful example of transparency. Yet if you think about what this 2% inflation target actually is, you realize that it is an explicit policy to devalue the dollar and reduce its purchasing power. And it adds up quickly over time. Two percent annual price inflation means that prices rise 22% within a decade, and nearly 50% within two decades.
It is worse than that, however. This explicit 2% target also fails to take into account that whatever measure is used to determine price inflation, be it CPI, core CPI, PCE, etc., will always be chosen with an eye towards underreporting the true rate of inflation and price rises. Pressure will be exerted on those calculating the price indices, so as not to alarm the public when prices begin to accelerate.
Of course, government officials claim that price increases do not affect the average American because they can always substitute hamburger for steak, or have cereal instead of bacon to protect their family budget as prices rise. But the American people don't overlook the fact that their quality of life has suffered because of the Federal Reserve and price inflation. What will they substitute when hamburger and cereal go sky high?
The Federal Reserve continues to keep interest rates low in the hopes of boosting lending and consumption. But keeping interest rates at zero discourages saving. Why stick money in a savings account earning 0.05% if it is guaranteed to lose at least 2% every year? The Federal Reserve created the largest debt bubble the world has ever known with these sorts of policies. The extended zero interest rate policy only eviscerates thrift and savings − the true building blocks of prosperity. Capital will continue to be depleted, infrastructure will fall into disrepair and the United States will be a mere shadow of its former self.
It is well past time to end the failed monetary policy that encourages this mistaken preference for cheap money now, rather than real wealth in the long run. Transparency and a full audit of the Federal Reserve is a start and something we must continue to pursue. And, if those in power don't have the stomach to bring the Fed out into full daylight, the American people deserve at least the right to conduct their economic transactions in the medium of exchange of their choosing.
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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.
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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 specific delivery times due to factors beyond our control.
Copyright © 2012 VRTrader.com.
Do not duplicate or redistribute in any form.
