Now that Robin Landry’s target zone has been filled, the odds are increasing daily that the run-up we have seen since March may be toast. The gold price is down $7.50 when I looked this morning (early) and that would seem to portend a drop of 75-points or so in the Dow.
When I look at a 1-year chart of the Dow, what I see is the fast & slow stochastics have just completed a nice double peak, there’s a divergence in the MacD, and the RSI (relative strength indicator) has turned down.
IF this is the case (and this is NOT financial advise…you’re on your own there), then I would expect to see the Dow come down a fair bit today, maybe rally next week with the usual pre-Holiday bias and either set a nominal new high or just miss it, and then get into serious down mode in coming weeks.
To just throw a dart, I’d expect to be back at March lows in either February or March, before a last gasp upside run which ought to be quite playable; at least that’s how I’m planning to bet the markets. Not touching equities, but big dollar rally and subsequent commodity decline would certainly make sense but I’ve been wrong more times than I can count. Death of the Dollar taking off for the holidays could happen from where I sit.
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Although markets move on their own – trader noise being equivalent to meandering herds of bulls, bears, and sheep – there usually ends up being some news event that gets blamed for directional changes. My personal theory is that the market is going to be very disappointed that Oprah Winfrey is planning to leave her talk show in 2011 – and before having me on as a guest, too – or more likely, the semi-retirement of the Mogambo Guru (see today’s coping section) will leave the market without as much of a wall of worry to climb.
Oh, sure, a vote this weekend on the Health Care Bill might be mentioned, or the way the bill sends $100 million to Louisiana in return for support by Senator Landrieu, changes in dollar values, and the wave of troubles in the Afghanistan War (15 killed by a motorcycle bomber today), but the prospect of the Mogambo on a golf course scares me as much as all other factors combined.
Falling Gold
Big move today and Monday in gold? That’d be December commodity options coming off the table, just so’s you know. Tungsten-filled or otherwise.
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On the other hand, there could be a huge pop in gold prices coming shortly, since my eagle-eyed broker JB called this morning to say “You know, the roll-overs to future contracts has been unusually slow…and you know what that means?”
I didn’t get an argument when I said “Oh, probably something like institutions are going to be taking some extra-large deliveries…which means either I should not sell either one of my gold coins, or I should buy tungsten futures?
Going Dutch
A Treasury Press release caught out consulting national bank veep this morning:
Treasury Announces Intent to Sell Warrant Positions in Public Dutch Auctions
The US Department of the Treasury today announced its intention to dispose of several warrant positions received in consideration for investments made under the Capital Purchase Program (CPP). Over the next month, Treasury intends to conduct auctions to sell its warrant positions in JP Morgan Chase & Co., Capital One Financial Corporation, and TCF Financial Corporation.
Each of these banks has fully repurchased Treasury’s preferred stock investment. The warrant sales anticipated over the next month, if consummated in full, would represent Treasury’s disposition of its remaining holdings in these companies. The proceeds of these sales will provide an additional return to the American taxpayer from Treasury’s investments in these banks beyond the dividend payments it received on the related preferred stock.
Treasury intends to sell the warrants through registered public offerings. These offerings will be executed using a modified Dutch auction methodology that establishes a market price by allowing investors to submit bids at specified increments above a minimum price specified for each auction. More detailed guidance for the auctions will be available in prospectuses that will be filed by the warrant issuers prior to the opening of each auction. Treasury expects to conduct similar auctions in the future for other warrant positions it holds in banks that have repaid CPP investments.
Deutsche Bank Securities Inc. (Deutsche Bank) has been retained as the auction agent and sole bookrunning manager for these offerings. In this role, Deutsche Bank will accept bids and identify a clearing price for each auction. If investors do not have an account with Deutsche Bank, they may be able to participate in the auction through their own brokers, as a network of several dozen brokerage firms will be invited to aggregate suitable client orders and submit them to Deutsche Bank. The warrants are complex securities that are not suitable for all investors.
Prospective investors will be able to obtain copies of the prospectuses relating to these securities, when available, from Deutsche Bank Securities Inc., Prospectus Department, Harborside Financial Center, 100 Plaza One, Jersey City, New Jersey 07311-3988, telephone: 1-800-503-4611.
Terms like “bookrunning manager sound a lot like a numbers-racket is that your point?”
No, just an interesting way to get warrant positions in JPM, Capital One and TCF…
Dead Banker List
Unemployed private eye? Fired financial researcher? You may be interested in a list of ‘Dead Bankers” that has shown up at Scribd….find the common elements and report back. Expect there will be two lists – one which is tied up to this side or that, and then the others in response/reaction from another group.
I’d do this myself, but remodeling frenzy is in full swing.
For Whom the Dell Falls…
Not a happy quarter for the Round Rockers, but bound to improve…yada yada…global recovery…yada, yada….good times are just ahead?
Inflation to the Streets
Dozens of students have been arrested at UC Davis for protesting 32 percent tuition hikes.
While one of the signs read “Save the humanities” (I’m sure they meant Save the Manatees, and they just screwed up the spelling) what UC Davis really ought to focus on is saving the math department which needs to be beefed up in order to excusify 32 percent increases in a 5% (or less) inflation environment. Why, anything other than capitulation to a 5% increase would mean either the University or the Federal Government has completely lost track of inflation realities.
I leave it to you who you’d believe: UC Davis claims of soaring costs or BLS claims to the contrary…hard call, I know. But one of ‘em ain’t shooting straight, near as I can figure….or both.
¿Por Que?
“Work site arrests of illegals fall dramatically” says a report in the Washington Times. Why this would happen seems clear to me – no it’s not a tolerance policy - just the Border Patrol has more important stuff to do – like stop people 99 miles inside the US Border in the Northeast and put them in a national database…got it? You really need more fluoride. Sheesh!
Climate Change to Increase Prostitution?
Yep – so goes the logic of a UN official: climate change wrecks farming and fishing and drives people to any other sources of income like dangerous work and prostitution.
While this comment was directed at the Philippines, might also explain California and….and….most people have this habit called eating.
Ark Notes
About now, people in Britain are maybe wondering (Britain hit by floods after record rainfall) whether the promise by God not to destroy the world by flood again is somehow being breached.
Common sense (or nearly such): If you check the fine print, that warranty wasn’t first written in English and applied only to a small marketing area the Middle East. Your results may vary, see insert for details, offer void where prohibited… Don’t ask Noah, ask NOAA. Besides, Britain is not part of ‘the world’ – it’s a Crown entity. Sorry.