The commodities trade looks to be back on

After weeks of decline the commodity trade looks to reverse trend here. Oil looks to be the strongest. Silver may have bottom or is near a bottom, the 200 day moving average on the SLV would be the next support if a bottom hasn't been put in yet.

NANO

NANO looks very bullish so I picked some shares up. NANO has a lot of support at the 200-MA.

Silver is not at a bottom yet

Silver is reversing during the final hour of the trading day after looking like it was about to put a bottom in the short-term.

It wouldn't be surprising to see SLV flush to $30.

Hello traders,

Sorry I haven't been posting lately. I've been busy looking for a new place to live as I am finishing up my degree and looking to work for Wall Street.

I shorted Gold and some other commodities at their top. I'm starting to see what could be a short-term bottom in commodities like gold and silver, but I have to wait until the last 15-min. of the day to confirm.

Check back just before the trading day is closed!

A few weeks ago I made a post about precious metals and where one could expect a top to form if technical analysis, psychology, and math were used together correctly.

The levels were $148-$151 on the GLD. $148 being a trendline and $151--a Fibonacci output. Math called the top. GLD all-time high? $153.61

http://yourfinancialblogger.blogspot.com/2011/04/when-if-ever-will-precious-metals-pull.html

Silver continues to crash

Silver had a very nice run up in recent months so a correction of this magnitude isn't surprising at all. But the drop is so dramatic, I'd look for some reversal candle to signal a long position.

The Markets are looking very unhealthy and all indicators, but two, are still pointing down. They've been showing a negative divergence since last December. The indicators don't determine short-term bounces and bottoms, they indicate a longer term bottoms and tops.

A lot of stocks are pulling in today. This type of action makes waiting on the sidelines all worth it.

SFY has support between $35.40-$36.50

CHK Bull Flag

CHK is setting a nice intraday Bull Flag here. This pattern can be used for a day trade.

A pierce of $8.00 would be a good buy on HL

My swing trade positions:

AVL, CHK, Short Gold.

Stocks with Bullish Consolidation

These stocks have good fundamentals and are attractive at these levels.

AVL:


CHK:

You would think the death of Osama Bin Laden would rally the markets, but it didn't. The markets are trading inverse to the US Dollar. Late in the trading day, we saw the major indexes as well as precious metals pullback in as the Dollar rallied.

SLV-towards the 61.8 retracement or around $33.50 I'd start to get interested.


GLD-Pierced the Fibonacci resistance and formed a topping tail. A pullback is expected.

Osama Bin Laden has been killed

Osama Bin Laden, the mastermind of the 9/11 attacks, was killed earlier today with a gunshot to the head.

GLD has resistance @ $151.20

$151.20 is a Fibonacci Resistance on GLD

Why shouldn't Will work for the NSA?

One of my favorite actors. Matt Damon in the movie "Good Will Hunting." $2.50/gallon the good old days, HA! Will had it right 14 years ago.

REDF looks ready for a pullback

I've been following REDF for about a year now. It's an Indian internet stock that has a very good long-term outlook. It's basically an Indian version of Groupon. Only 10 million Indians have access to the internet, I say "only" because India has a population of over a billion so the potential growth for this company is astronomical. I've followed this stock when it was only $2.00, it went as high as $18.00! A topping tail is indicative of a pullback.

GLD "pretty number" hit

GLD today hit a high of $150.00. 150 is a "pretty number" and is a number that many traders would put as their sell limit. I am short Gold.

The tide that lifts all boats...U$D

The Fed is leaving rates unchanged as expected. Everything from financial to energy is rallying on the news. But this comes at the expense of the USD losing its value.

MS could bounce here

MS has support here @ $25.56

AUY: Yamana Gold

Yamana has support @ $11.80, but I ultimately I'd look for the 200-MA

CHK: Inverse Head and Shoulder

Inverse head and shoulder patterns are bullish.

Gold comes into resistance and Silver approaches its all-time high

Gold has come into the $148-$151 resistance level that was mentioned in a last post.


Silver jumped as much as over 8 percent to an intraday high of of $49.82 an ounce, just about 50 cents off its all-time peak of $50.35 hit on Jan. 18, 1980. A further pullback is expected.

Huge run up today in the markets but on the back of a weaker dollar. I'm on vacation until next Monday. I wish you all the best of luck with your trades. cheers*

HL: Hecla Mining

Solid company with a good looking long-term chart. A hit of the 200-MA would be your buy.

BAC coming into support

Support is @ $12.00, I'd look for a 2-day bounce.

Topping tail on GLD 60-min chart

AEM approaches suupport

AEM has support in the low $61.00 range

The call to turn bearish is paying huge dividends. Watch the $30.00 level on CHK.

When, if ever, will precious metals pull back?

The precious metals arena (SLV,GLD) have all entered uncharted territory. To find levels of resistance you would have to apply math, psychology, and contrarian thinking. All of which are already hard to apply individually--applied together? good luck but the reward can be great if applied correctly.

GLD resistance: $148.00-$151.00

Day trading levels--SPY 10-min

I haven't been able to find any outstanding swing trades lately so I'll post some day trades instead.

CHK and USO

10-min: Day trade scalp the USO @ 200-MA


Daily Levels on CHK:

Day Trading Scalps

Scalp SPY @ $131.20 and $131.00

USO, GLD, SLV

USO:

GLD:

SLV:

The pullback in commodities looks to have begun

I've been calling for a pullback in commodities (especially USO if it reached $44-$44.25) and as it got there it went above and caused me to go bullish. I should have stuck to my guns and stayed with my bearish call, because shortly after going higher it reversed! But I guess that's why I'm trading from home and not somewhere on Wall St....

Anyhow, I made a good call to go bearish recently as it is paying off. Use this opportunity to buy up commodities like Silver. I'll have levels for entries on the GLD, SLV, USO sometime soon.

*cheers!

..

Is the Treasury Bubble ready to burst?

Quantitative easing is a process by which the Federal Reserve purchases assets (such as treasury bonds or mortgage backed securities) from banks. The cash that is made by the banks for selling their assets to the Federal Reserve becomes excess reserves that is supposed to be used for lending. This is supposed to stimulate the economy.

The Federal Reserve has already engaged in one round of quantitative easing since the beginning of the economic crisis purchasing $1.7 trillion worth of bonds and mortgage backed securities between 2008 and 2010. This pushed the yields on treasuries to near-record lows and kept interest rates artificially low (0.25%).

But the banks aren't lending and the economy is not recovering, because the banks are engaged in what is known as the carry trade. Lending money out at a higher interest rate than what you had borrowed it for.



After 2008, banks were undercapitalized because of all the mortgage write-offs they had. Rather than issuing new shares of stock and diluting their capital, Bernanke allowed the banks to borrow money at a short-term borrowing rate of 25 basis points. Rationally, the banks took that borrowed money and invested in long treasuries yielding 4.5% at the time. Essentially the banks were making ==Y*(4.5%-0.25%)== (Y being the amount of money invested) risk free! So why lend out to the public who was losing their job, had no savings, and had a high probability of defaulting on their loans?



Of course, you can play the carry trade game. But the risk is that if interest rates start to move up, you need to get out fast. Last November, Bernanke said that inflation was on the horizon. To me he is hinting to the banks that he is going to hike interest rates sometime in the near future to tame the inflationary pressures and that now is the time for the banks to get out of the carry trade. Then he announces QE-2, “We’re gonna make $600 billion available to the economy for buying treasuries,” in other words, "I, Ben Bernanke, will deflate the carry trade bubble so don't you all storm out that door at the same time." At the moment, the plan to deflate the bubble seems to be working as interest rates have not gone up significantly.



On a previous post I made, November 2, 2010, I told my followers to watch what was going to happen to treasuries the following day. November 3, 2010 came and yields spiked on the QE-2 announcement. That spike, I suspect, was due to the banks exiting the carry trade and could be the day that marks the end of the bull market in US treasuries.

Today the Fed is the proud owner of billions of dollars worth of US treasuries and in months time will realize how expensive they got it for. With QE-2 expiring in June, what is going to happen to interest rates? They'll be going up. How high? It's anybody's guess.

• You can play the Treasury Bubble burst by going long TBT, PST, and other treasury bear ETF.

• The next FOMC is on April 27

• I will be short Treasuries some time in the future

• cheers

Abolish the Federal Reserve!

I'm tired of little Bernanke. The man must walk to work, use a candle for lighting, eat instant noodles on the daily to not see inflation in the economy. And what the hell is going on with our government?

UUP: Has fallen like a rock!

USO: Gaps over resistance....it looks to be going much higher


In the very near-term--I am bearish.

If the price of oil does not stop at $110/barrel...

look for oil to go to $125/barrel. Oil SHOULD find some resistance here at $110. However, if it doesn't stop here, it could be a signal that investors are extremely bullish on the commodity and force prices up.

USO coming into resistance

The USO is approaching $44/share, I'd like to short it here, but it can go as high as $44.25

Tsunami warning issued to Japan. Markets are getting hit.

A 7.4 aftershock strikes nearly a month after twin disasters flattened the northeastern coast.

ANAD: Anadigics Inc

Looks like a bounce is coming

Copper vs. Aluminum

Freeport McMoran and Southern Copper have seen a sharp rise in revenues thanks to the steady increase in the price of copper now at all-time highs (copper has risen nearly 250% since 2008). One would suspect that these copper mining stocks will continue to rise with the price of copper, however as copper becomes more expensive manufactures may choose to substitute it with a cheaper alternative; aluminum.



Aluminum is seen as a more cost effective substitute as copper crosses the $3.50/pound mark. In the last 5 years aluminum has substituted about 3% of the copper market and this trend is likely to continue. Alcoa, the world’s leading aluminum producer, predicts aluminum will potentially substitute 20% of the global annual refined copper market if copper prices continue to increase at its current pace.

..

• I closed out my short position on the GLD today
• I'm turning bearish on the markets now, but I'd be cautious being short the market due to the light volume
• I'd look to short the USO if it gets to $44
• I am in shares of AEM as of yesterday
• My positions are : AEM and SCCO
  

Gold and silver have been absolutely resilient. My short position on Gold has done absolutely nothing these past couple of weeks (-0.76%). Silver continues to rip and is the preferred commodity over gold--at least to me it is.

I've been really keeping a close eye on AEM and I would love to have it @ $62/share but it could rally from here and I may jump in on it later on today. There is limited down side to the stock.

My positions: VALE, SCCO, and short GLD

It isn't a matter of "if" inflation will hit, it's a matter of "when" it hits, what assets should you own? During periods of inflation there will be extreme volatility and corporate profits will go down.

Last year, retail company profit margins were being eaten into by inflation, retailers could have passed the extra cost along to the consumer but instead chose to hold back on raising prices because of the fragile economy. Retailers, like Nike, has announced earlier this year that it will be raising prices for its products some time in the future due to higher oil and cotton prices. As an investor, you have to ask yourself if consumers are willing to spend more on things like a pair of shoes. If they don't; Nike shareholders will get hurt.



During times of high-unemployment and rising food and energy prices, I think consumers will wisely choose to save. But with the type of monetary policies enforced by the Fed, they're trying to force consumers to spend--which will hurt consumers as they spend their savings, and anybody who chooses to save will get hurt anyways because their purchasing power will diminish by the day. It's a lose-lose situation.

Lesson: Own commodities. They're not a screaming buy now, but if commodities correct from here, like I suspect; jump on.

DPTR: Delta Petroleum

Look to jump in on this on a hit of the 50 or 200 moving averages or $0.84 and $0.77

The Fed's gameplan

I look at the charts, and I notice 3 things:

1. Commodities look like they want to correct
2. The correction that began on February 22 til March 16, 2011 is not a significant correction
   
3. Despite weak market internals, the market continues to advance and a breakout above the February highs would not be surprising although if it does, look for a major pullback
   

So now what? The Fed has been criticized for "propping up these markets" via QE-2 and causing inflation. But we know this is what the Fed wants to do. They wouldn't want it any other way.

But if there is outcry over money printing, how will the Fed continue to push its agenda? Easy. Suspend QE-2, let the propped up market drop, let blood spill on the Street, let deflation creep in causing a correction in commodities, and when the world looks like it's about to end, Bernanke will come forward and say, "I told you we needed to print more money....bastards." Everybody will agree and rejoice together. The correction in commodities will come to an end and commodities will sky rocket.

Stocks to Watch

BBY: $25-$26 is support


AEM: Buy on a hit of blue trendline at $60-$62


AUY: Buy at 200-MA

Strong Gap up

The SPY gapped above the $132.40 this morning. Look for a move to $133.50.

..

Anemic Volume

Volume has really dropped off the past 2 weeks. We know from the past that light-volume carries with it a bullish bias. Areas of resistance on the SPY are $132.40 and $133.50. I suspect spring break has a lot to do with the lack of volume.

Pullback in Gold, Silver, and Oil?

If you are in the inflation camp with me, you know that commodities are in a bull-market, but it looks like a correction is coming. I've been shorting Gold since it has hit $1400/oz. and continue to hold my short positions. I would look for a pullback to the daily 200-MA on the GLD as a buy.

For oil I would look to short it if the USO went to $44. But if, instead, it decides to decline from here, I'd begin to ACCUMULATE SOME positions in the USO around $38-$39.

Silver of the 3 commodities looks to be the strongest. Look to accumulate silver when the SLV gets to $30-$31. $26 would be the ultimate target for SLV however.

Good Luck All!