WSW Friday, May 29, 2009

Daily Notes

Wednesday, June 3, 2009

The Ministry of Stupidity Speaks had the congress interviewing Ben Bernanke. Ben is a great guy and does a wonderful job. He had to say that he will defend the dollar, and he did. He pronounced a list of all the things the Fed can do to unwind their balance sheet (loaded up with things from doing “take unders” (not “bail outs”…) of various agencies and financial companies (like AIG) and NOT cause inflation.

But news flow had a report of Geitner pronouncing to a meeting of Chinese students that Chinese investments in America were sound; and they laughed at him… Someone needs to tell the students not to be so honest. At least not until China has finished rolling it’s US debt into shorter maturities…

So we had the dollar showing strength. OK, we knew this would happen for a little while a little bit. Just don’t expect it to hold for long.

News Flow also had some traders saying to short the commodities companies (in particular FCX) or to sell out of oils (in particular PBR) due to them being significantly high. Well, RSI had told as that too.

So the foreign resource play in companies like PBR and FCX took a big hit today. Time to sell out? Nope. The market makers and traders were out of inventory to sell. They are just loading up again by buying in the stocks at lower prices. If your stop loss order sold you out, put a buy if touched above these stocks and wait for the turn to buy you back in.

If you did not own any, this is the “dip” back to the moving averages. It’s time to buy in. Watch the 10 day hourly chart for the MACD crossover back to blue on top headed up.

If you are already holding these stocks, now is the time to get ready to fill out the position. As the “dip” matures, buy the rest of the position that is your target. Most of these dips have been about 3 days long, so I’d make that late Friday / early Monday as the best time to buy back in.

There is a small possibility that this is a longer term toping action. I don’t think it is (yeah, oil is off $3 or so; at way higher then it was last month..) but what I think doesn’t matter. Watch the charts. We would expect a return to the moving averages, then a rise back to the up run. If that recovery run does not exceed the recent high, then we have a top. Until then, it’s just a dip in a run to the high side. If the stock just blows right through the moving averages in a Crazy Ivan headed south, well, that’s a whale shorting like crazy and you need to guess what their motivation is.

Most of the time I have about 1/2 my position with a close stop loss on it and another 1/2 that is protected by a further out stop loss (or sometimes an ‘out of the money put’ option. That way you don’t need to decide when to sell out, just when to buy back in. For example, PBR hit $46 a day or two ago, so 1/2 the position has an order that says “sell if it hits 44” and got sold this morning. The other half is held. Now look at the PBR chart and the 25 day SMA is at about $40 while the 50 day Simple Moving Average is at about $37. So your target “buy point” in a dip is about $38. You don’t want to be selling out at $38, you want to be buying. So that other 1/2 of your PBR can have a “sell if it drops to $34” to make sure you don’t ride it down to $20… or you could have bought a “put” option for $34 for not very much money a few days ago. This is a “core plus trade” strategy. The 1/2 core position is held for long term investments and the other 1/2 is traded as ‘fast money’. The PUT is just an insurance and volatility reduction strategy.

Why do prices move like this? Simple. Somebody announces on TV or Goldman Sachs announces to it’s brokers that “The Commodity Trade is Too Old!” and they ought to sell (probably because they saw the RSI at 80 ish and the price far above the SMA stack). The “Market Maker” (who sometimes is the same broker…) knows this has been said; (via news watching services if nothing else) so when he comes to work this morning, he knows a lot of folks will be selling stocks (both ‘natural sellers’ and short sellers who heard the news). By law and exchange rules, the Market Maker broker must buy those shares (that’s his job – to maintain a ‘liquid’ market.) But there is no requirement about the price: So the Market Maker sets the price somewhat absurdly low so that he knows he will make money when he eventually sells those shares on to someone else. (Sometimes they are wrong and take a loss, but not often). So for the next couple of days, they are “forced” to “buy the dip”… Then they sell those shares out again later at a profit (when everyone decides it is time to buy and the Market Maker is obligated to sell…) It is very helpful to think like a Market Maker…

The only part you don’t know is if they are intending to sell those shares later in the same day, the following day, or next week. For that you watch a “fast chart” like the 10 day 15 minute and look for patterns of price run up / run down as the Market Maker buys in blocks and sells them out again a bit higher in price. It is often a mix of some day trades and some stocking up for next week…

This is also why you hold about 20 different positions in at least 5 different industries or “themes”; so that when The Minstry of Stupidity or the Market Manipulator moves against you, it’s only 20% of your positions at most that need tending. And if those have at least 1/2 stop loss orders on them, it’s a 10% exposure to a drop of at most 10% – and 1% does not get your blood pressure up…

A lot of work? Yeah. What, you thought trading stock was easy and fun? It’s a job, much like any other…

Tuesday, June 2, 2009

Hog Wild in China?

Hog Wild in China?

I always wanted a farm…

CVGW  Calavo Growers - Calif.  Avocados and veg.
MLP   Maui Land & Pineapple - with a tourism kicker... 

CGLA  Cagle’s Inc - Atlanta Georgia - Chickens and feed
CALM  Cal-Maine Foods - Eggs
SAFM  Sanderson Farms - Mississippi Chickens & Poultry
PGPDQ Pilgrim’s Pride in bancruptcy (trailing Q on ticker)

HOGS  Zhongpin Inc, - Chineese hog farms
FEED  Agfeed Industries - Chineese hog farms & hog feed
SFD   Smithfield - Huge intl. meat & hog producer
HRL   Hormel - Spam spam spam spam ... and a whole lot more

SPY   S & P 500 baseline

Looks to me like FEED and maybe HOGS are rocket rides with a bet that as China gets rich, there will be one Whole Heck of a Lot of sweet and sour pork replacing steamed rice…

But even the domestic farms and meat producers are rising faster than the S&P 500… Maybe it’s time to “buy the farm”? I’m planning on taking a “tiny” position in HOGS or FEED (or maybe both) and maybe a piece of MLP or CVGW depending on how I feel about pineapples vs avocados …

Have to find something else to sell first, though… I’ll need to race what I hold against them and see who looses the race (and what the volatility looks like – too bouncy is annoying… and what has an RSI at 80+ and maybe isn’t quite time to buy until that dip Real Soon Now…)

(I divide things into Full Position – about 10% of total money to invest, 1/2 Position, 1/4 or small, and “tiny” or less than 1% – reserved for risky or unfamiliar companies, those on huge rocket rides that might collapse back a long ways, or toys. This is typically a couple of hundred dollars up to a thousand, but no more than that until I get familiar with the company and know it better. I also have “marker” positions that are sometimes a single share or less than $100. Just enough to keep me aware of the stock. I do this to “patch” over my poor discipline at watching things I don’t own but think I’d like to watch sometime Real Soon Now… )

Financials are being doggy, so I think it’s time to be exiting any remaining banking positions (I’m down to one preferred stock at this point, and will be looking at it closely – but it has a nice dividend…)

Monday, June 1, 2009

Well, I’m down to about 2% cash. The rest went into things like PCL, FXI, more PBR, PCU, QTWW (toy – ish), YUM, M. I was already fairly well positioned for this breakout, just a little lighter than I ought to have been.

My reading of the tea leaves is that the yen dropped, and China took off like a rocket last night (during their market open). I suspect that our “whale” moved some money to China and other emerging markets. We also have had an uptick in Australia and a take off in the U.S. with the GM bankruptcy announcement.

Lightening up the retailers was a mistake in retrospect, with things like JCP and M up double digits today. I did hold onto considerable positions, and it is good trade discipline to sell part when you have a double, but it’s always a bit hard to accept. Then again, I got nice gains today in what I kept and I had settled cash to deploy in other areas. Such is life.

We’ll see what tomorrow brings. For now I’m just loving it: Heavy in EWZ and CZZ. Up 4.7% and nearly 10% respectively as I type this… Gotta love that “money for nothin’ and the land for free” trade put on in CZZ back at about $2.85 a share – now it’s at $5.60 and folks are paying up for it. I have a double, and ought to sell half, but I’m not going to. Yeah, I’m violating trade discipline. But with BZF the Brazilian currency (the Real) going up, with SGG and Oil both going up (CZZ makes sugar and fuel), there are just too many positives for me to walk away. We’ll see if I’m showing great wisdom or being an idiot for violating trade discipline…

Looking ahead:

Dollar Trade -Down - getting old

Dollar Trade -Down - getting old

Look at that RSI. Approaching 80. That’s what happens in a bull run getting old. This ticker “UDN” is a bet that the Us dollar will go DowN. There is a matching “UUP” that bets the Us dollar will go UP. So what does this mean, 80? It means that a lot of distance is between the price and the moving averages, that a lot of people have figured out this is a good trade to have made, and there are ever fewer folks left to figure it out and join the trade. Typically, RSI is a leading indicator. When it hits 80 you have a bit more to go, but need to start thinking about your next trade and thinking about stepping away from this one for a while.

If it is a long term (secular) up trend trade, RSI will tend to oscillate between 50 and 80. If it’s a trade that’s rolling over, it will go from 80 to 50, then up a little to about 70, then down to 30, then up to 50, then down to 20; when it then says the short side is getting old. Basically, it’s a bit of a roller coaster, so you watch the bumps up and down. As RSI hits 80 ish, watch for a pull back. At the NEXT run up in RSI, if it makes a new “bump” that is lower than the last one (i.e. less than 70 or so), then that trade is over for a while. If it rolls: 50 / 80 / 50 / 80 etc. you have a steady rising position with lots of room to run … until that “next 80” turns into a “next 70” or even less… then it’s over. That time is also when the Simple Moving Averages have gone into a Flat Weave. Right now, the SMA stack is pointed hard up. We have time.

I expect it to be a shallow strengthening, followed by another drop of the dollar, like mid-March to mid-April and probably starting in a couple of weeks.

Now this particular trade, against the US Dollar, is a very important one if you have a lot of money Out Of The US, as I do. So this is telling me to check, and double check, that positions in places like Brazil and China can beat a (temporarily?) strengthening dollar – and to do it now before the dollar starts to move… UUP and UDN are measured against a basket of currencies, but dominated by major exchange currencies like the Euro and Yen – not so much against the BZF or Chinese Yuan. It is quite possible, and maybe even likely, that the US Dollar can strengthen against the Euro while BZF strengthens against both. So this is just a warning flag, not an exit call…

It is also a good example of what to look for on a chart in terms of that RSI indicator. It gives you a “heads up” at potential approaching tops with an 80 and at potential approaching bottoms at 20 ish. Then you watch the other indicators for confirmation of the trade changing direction. (i.e. MACD goes flat and then rolls to the other side, followed by DMI / ADX inflecting then crossing over). You can “scale out” a bit at a time as the indicators “line up” or you can wait for a stop loss to sell you out, or you can be “hands on” and pick your moment.

If you look back at Nov through Mar you can see that RSI at 20 gave a very long early indication before it failed to return to 20. It took 4 months of a flat market (with spikey trades) before the broad trend changed. (When SMA 50 went flat and the 25 was weaving it). That first touch of 20 was only 1/2 way through the dominant trade. We likely have many months before the trade against the dollar is completely over, but it is time to start planning. Picking the next theme, and vehicles that support it. Expect a couple of spikes in favor of the dollar in the next couple of months, but don’t panic out at a move against you, leave the trade gracefully when it is in your favor.

If you would like a peak ahead at what I’m evaluating it is stuff like oil services and some tech. Cell phones, pda’s, that kind of stuff. What all that lithium, copper, etc. gets turned into for sale. AAPL is ripping, but I “have history” with them that makes it hard for me to be objective. PALM is on a rocket ride, but you need to evaluate it carefully, it’s gone up a lot already. I’ll probably stay with the QQQQ basket as a less emotional vehicle for me.

The market This Week

WSW – Friday, May 29, 2009

For the US markets, we were dramatically up Tuesday gave most of it back Wednesday. Dramatically up again, though a bit less Thursday. Flat Friday; right up until the last 30 minutes when the “end of the month fund my 401k at work” money flooded in making a spike up. I hate “battle ground” markets.

Much easire was the BRIC trade. Brazil, Russia, India, China. Of those, India was leading. BRIC was much more steady up, with only China being a bit of a laggard. (There was a holiday in Hong Cong – Dragon Boat Day, on Friday. Weeks with a holiday are often slow. Weeks with a US holiday on Monday and a Chinese holiday on Friday will be very slow for Chinese stocks traded on US exchanges.)

Being Out Of The U.S. was the place to be this week. I expect it to stay that way for a while. The 10 year chart for the emerging markets shows them already out of the bear market phase. (Price crossing the 200 day, or 40 week, Simple Moving Average, MACD crossing above zero pointing up, DMI+ on top, that is, blue over red). The 10 year US chart shows us on the cusp, but in a sideways congested area. Just step away from the battle ground in the US, and move to the rocket ride in BRIC.

With that said, remember that the best entry will be on “pull backs” to the moving average stack (on the 1 year daily chart). Fast markets like this can have runaway upside runs, so don’t sit on the sidelines forever waiting for a pull back. Buy your position in parts (called “scaling in”). One quarter or one half now, more in a few days. When it pulls back, fill out the position (rather than panicking out like the market maker wants you to do…) Use the shorter term charts to time the entry, the longer term charts to tell you the trend you are entering.

Last week I’d mentioned a bit of tea leaves leading me to think a “whale” was moving money. I’m now fairly certain they are an Asian Whale and stepped aside for the whole week. We’ll see next week. If I were them, I’d put that money OOTUS, so watch especially for a surge in the stock market and / or currencies of non-US countries.

I’m continuing to be predominantly holding Brazil, Australia, BRKA and some Canadian Oils and mostly OOTUS already. I made no trades this week, it was just a bit too squirrelly and while I was waiting for the “whale” to make waves, I think they were at Dragon Boat Day celebrations for the week…

In the middle of the week, we had a magnetude 7 quake in Latin America and a tin pot nut case in Korea blow off a nuclear bomb, withdraw from the 1953 armistice ending the Korean War, and launch a bunch of missles. Not good. EWY, the South Korea ETF took a dive, but recovered Thursday and Friday. Needless to say EWY is likely to be sideways for a while until this sorts out more… (See the “Asian Tigres” heading under the Racing Stocks tap at the top of the page.)

At this point my expectation if for another day or two of spikes near the close as the last of the “monthly savers” money gets deployed. I will reposition the cash I had set aside for potential use as a short hedge, into BRIC and “Stuff Stocks” instead- Gold, Silver, Miners, Oils, etc. rather than wait for a shorting opportunity. I’m still going to watch for the whale to come back in on Monday, but at this point, I don’t expect to see much in the U.S. market.

I’m going to carry forward the same quote about General Trends that I carried forward last week. Why? Because it is still true and still sound! All I would add is that with the election in India out of the way, the indian stocks are just having a great run to the upside, even better than other parts of BRIC such as Russia and China.

General Trends

Generaly trends hold for months to years at a time. At this point, we can make fairly good statements about what those trends are likely to be for the next year (and maybe longer…). Sure, there will be lots of day trade wobbles during tha time; and if you are willing to watch a 10 day 15 minute chart with live data (i.e. not the 20 minute delayed data you get for free from BigCharts) you can trade those ripples. I’d rather get “the wind at my back” and be in those dominant trends. Then if I “miss a trade”, I can recover by doing nothing but waiting.

So what are those trends? Same things I’ve talked about for the last couple of months:

1) The Emerging Markets are going to lead the recovery and have the best future gains. My favorite is Brazil, but Mexico is interesing and China will have lots of growth. EEM, the broader emerging market is also good (packaging a bit of Russia, Turkey, Eastern Europe and others too) as is India (via individual stocks or the various India funds: IIF, INP, IFN, EPI) .

2) Resource companies will continue to win. Miners, metals, etc. And with them the resource based economies (and markets) of Australia and Canada (and Brazil and…)

3) The U.S. Dollar is not a secure currency in the long run (given the number being printed) and the present demand for U.S. dollars will eventually fail. There is already evidence that the Chinese are cutting ownership of U.S. dollar assets. Yes, there will be tradable rallies (like the one started today by the Swiss central bank supporting the dollar due to excess demand for their currency…) but the long term trend is not stoppable until the government changes their behaviour, and I see no evidence for them changing.

4) When economies recover, and stock markets with them, Bonds tank. It is time to be getting out of your bond positions. Hold cash if you can’t bring yourself to buy stocks. (And cash does not have to be dollars… You can buy Yen, Swiss Francs, Euros, Reals… FXY, FXF, FXE, BZF respectively or even Aussy dollars FXA or Candian Loonies FXC).

5) Inside the U.S., it will be tech companies, resource companies, and cyclical recovery stocks that win. (Whether they win more than being in emerging markets will vary by company. Best answered by doing your own cusomized races for any particular company of interest. For example, you could race EWZ against RIMM and FCX to see what you like better… )

6) As an investor, this U.S. Government Is not your friend. They may be the friend of unions, voters, welfare queens, etc. but not of investors. Governments in general do not do a good job of running companies, this one will be worse. If they are heavily interested in an area, run away screeming. If they “help” (via owning?) GM and Chrysler, it is FORD who will win. If they are going to “fix” U.S. healthcare, look to TEVA or European drug companies for your defensive drug stocks. And if they are mucking around in the bank ownership and management, well, there are some really nice banks in Brazil and other emerging markets ( ITU, BBD ) in addition to Europe and Asia. Notice also that the “senior debt” i.e. bond holderes have had their rights crushed by the U.S. Government every time they have “helped” a company in this cycle; so the bonds of U.S. companies are not a particularly good deal either (if the Government is interested in an industry). So your money does not need to be there. It can go to other companies, other investments, and other countries.

These themes are likely to be with us for months at least, and perhaps for years and years to come.

What does the 10 day hourly chart say is happening now?

The charts on this posting are very large. On a Mac with Safari, “CTRL” and a mouse click lets you open them in another window for better viewing. Other browsers, YMMV…

Here’s a 10 day houly chart of the Dow 30 Industrials (DIA), the S&P 500 (SPY), the Nasdaq tech companies (QQQQ), the Russel 2000 (RUT), and both a Brazil fund (EWZ) and an Australia fund (EWA). It also has a ‘short fund’ (SH) on the chart so you can see what being short this market is doing right now. We also have EWO, an emerging Europe Austria fund and EWW for Mexico.

10 Day Hourly Interval Broad Market

10 Day Hourly Interval Broad Market

This is a live chart, so my comments will describe how it is now, but in a week it will be showing new data and a new week. Since I think it’s more important to be in touch with what the market is doing NOW than to preserve the historical chart, this is, IMHO, a reasonble choice. Just don’t be surprised if the chart I describe is not the one you see a few weeks from now!

We see that the U.S. market is in a flat wobble but we had the end of month spike. No need to be there. The emerging markets are continuing to out perform. No real surprise. Obama is now pushing for a VAT type tax (10% National Sales Tax) to fund his spending spree since the Carbon Cap and Tirade got watered down enough that he’s short a $Trillion or so. India elected a pro-business government. Decisions decisions… BING! I’ll take India for $10,000…

(FWIW, under the ‘racing stocks‘ tab I’ve added two examples of ‘fast trader’ charts under the SPY broad market section. You can trade this market just buying and selling on the crossovers of the 16 hour moving average, but a couple of the other indicators can help… if you want to day trade. Sideways choppy markets are suited to day trades, but you must be fast to exit if it turns down.)

Other Asset Classes

The 10 day hourly asset class race:

10 Day Hourly Interval Asset Class Race

10 Day Hourly Interval Asset Class Race

Silver, Oil, Emerging Markets, Copper. See a trend?. It’s time to be OOTUS. Especially resource rich countries like Brazil, Australia, Canada. It’s time to be in resource companies. Even WOOD had a bit of recovery from it’s dip and DBA, the Ag Commodities basket, continued to rise (probably due to cold weather especially in Canada predicting poor harvests)

The “stuff” trade is on and the “cold” trade is on (grains, oil). The U.S. Dollar is dropping like a rock still. (Though the yen was modestly stable against the dollar, the resource currencies and the emerging market currencies were rising fast. See the “Currencies” heading under the “Racing Stocks” tab at the top of the page.


SPY  S & P 500 US stocks
GLD  Gold
EEM  Emerging Markets
FXY  Japanese Yen
JJC  Copper
SHY  Short term bonds 1-3 year
USO  U.S. Oil
DBA  Agricultural basket
SLV  Silver
WOOD  Wood / Timber

So what happened in the Tech Market relative to world markets?

Recent months - A Tale of Two Markets

Recent months - A Tale of Two Markets


QQQQ  Nasdaq 100 mostly Tech companies
DIA  Dow Jones 30 Industrials
SPY  S & P 500 largest companies in the U.S.A.
MDY  Midcap  (Middle sized in terms of market capitalization)
RUT  Russel 2000 - a collection of 2000 companies from small to large.
EWZ  Brazil fund
EWA  Australia fund
EWO  Austria fund
EWW  Mexico fund

We see that tech has gone flat. While it has outperformed the Dow and S&P 500, the recent trend has gone flat and other markets are now crossing it to the upside.

Of particular interest is the EWO fund. Austria. This is a good proxy for the Emerging Europe trade. I love Austria… So it would be a decent buy, and it would be reasonable to investigate other emerging Europe trades in other central European countries. Czech, Poland, etc. I don’t know many of these stocks (but do know some of them exist, like CETV that looks like it’s on a bottom). It would take a bit of work to dig some out. Being a lazy sort, I’ll most likely pick up some EWO as the lazy C.E. trade.

Were Bonds a good idea?

OK, lets take a peak at the Bonds Race.

The Treasury had a bond auction that did not go as well as they wanted. 2 year and 5 year sold OK, but 10 years needed a rate ‘bump’ to get them sold. When rates bump up, the value of the bond bumps down. The next couple of $trillion they plan to sell will be worse. TIP (Treasury Inflation Protected Securities) went up, but long bonds dropped. Hold no U.S. Bonds longer than 2 year maturity or TIPs, be out of long duration bonds or bond funds holding them. Price did recover a bit on Friday, so I would not hold a “short of the bonds” position in TBT going into next week.

What sectors won this week?

	  

13.59%  DJ US Marine Transportation Index	  
12.45%  DJ US Platinum & Precious Metals In...	  
11.20%  DJ US Travel & Tourism Index	  
10.93%  DJ US Nonferrous Metals Index	  
10.01%  DJ U.S. Iron & Steel Index	  
9.84%   DJ US Coal Index	  
9.72%   DJ US Oil Equipment & Services Inde...  
9.59%   DJ U.S. Industrial Metals & Mining...	  
9.53%   DJ US Oil Equipment, Services & Dis...	  
9.22%   DJ US Footwear Index	

“Stuff Stocks” like coal (XME is a mining and energy basket), Steel (SLX is a steels basket), ships to move it in, platinum for catalytic converters, Oil services (OIH) not a surprise when oil is rising, The only ringers here are Footwear and Travel and Tourism. Worth exploring. That there are two different Oil Services categories is interesting and I need to click on each one to see what makes them different. Sometimes there are related categories that mostly hold the same stocks but with slight variations in theme.

So my take on it is that “things China will buy” are what you want to own. Those are largely provided by companies, and stocks, that are Out Of The U.S. – the OOTUS play.

A Broad View

Finally, my “Rorschach Race” (under the “Racing Stocks” tab up top).

EWJ  Japan fund
SHY  Short term bond fund
SPY  S & P 500
EWZ  Brazil fund
FXI  China fund
SH  Short S & P 500
RWM  Short Russel 2000
EPI  India fund
EWQ  France fund
EWP  Spain fund
EWG  Germany fund

Has the same story. India, Brazil, China all winning big. European markets beating the US markets (mostly due to currency movements). Shorts making no money. The “short trade” on any duration longer than a day trade is not working right now.

What Is Our Context

Let’s look at the S&P 500 largest stocks in America compared with some other kinds of assets; a couple of month maturity bond fund, oil, gold, Yen. We are in a bear stock market, having a bull run on the edge of a formal swap to the bull side, that’s getting old, but is defining a fairly healthy market recovery but where that run has stopped, and is threatening to roll over or just go sideways for a few months.

Asset Class Races

Asset Class Recent Race

What is this chart? It shows a comparison of a few different assets over a period of several months.

SPY       The S&P 500 ETF
GLD       Gold ETF
USO       Oil ETF
FXY       Japanese Yen currency fund
SHY       1 to 3 year U.S. Treasury Bond fund
FXE       Euro currency ETF
SLV       Silver fund
BZF       Brazilian currency ETF
EWA       Austria ETF
WOOD      A wood and paper products fund

We see silver cutting up fast trying to catch up to gold. Non-US currencies are headed up (with the Brazilian Real rising at faster slope than the FXE Euro as mony floods into BRIC investments). Wood took a pause in its up run but looks ready to resume as housing recovers. And Oil has headed back up as well.

Stock Indicators – what and how

What about Brazil?

Brazil the EWZ ETF vs the BZF currency ETF

Brazil ETF vs Currency Race

Here we can see how much of the move is the stocks and how much comes from the currency. When a lot of money heads into a smaller foreign country, the currencies reflect it. Here we see that big money is moving into Brazil. That all the other currencies are moving against the dollar says that more money is leaving the U.S. Dollar. Be with the trend.

What About Oils?


XOM  Exxon Mobil - Largest, U.S. / Global
COP  Conoco Philips - U.S.  with Russian exposure
CVX  Chevron Texaco - U.S.
PBR  Petrobras - Brazil
PCZ  Petro Canada
BP  British Petroleum
STO  Norway
E  Eni Italy
TOT  Total - France
RDSA  Royal Dutch Shell
IMO  Imperial Oil - Canada Oil and Oil Sands
SU  Suncor - Canadian Oil Sands
SSL  Sasol - South African Synthetic Oil Company

U.S. oils continue to have the “Obama Put” pushing against them, but oils overall had a nice run as the Opec ministers made noise about $70 to $80 oil.. Canadian and Brazilian oils continue to show strength. Oil itself was up on the week. Clearly there is a worry that U.S. Oils will have a confiscatory tax or some other similar pronouncement from The Ministry of Stupidity at some point. That oils can go up, and other nations oil companies can go up, while U.S. oil companies go flat; well, the chart doesn’t lie…

(The Ministry of Stupidity is my term for stupid governments, anywhere in the world, that make stupid statements – often, but not exclusively, from the socialist point of view, but sometimes from the merchantilist point of view, and occasionally just bizzarely off the wall)

Hope you bought some. If not, it’s not too late. Just avoid any oil company subject to the U.S. Congress as long as it is dominated by the socialist democrats.

The REITS race – Real Estate Investment Trusts

Shows REITS bottomed but with a small upward movement starting. I’m continuing to hols a small position in REITS.

Conclusions and Likely Actions

I’m holding my OOTUS positions in Australia, Brazil, metals, miners, and ‘stuff stocks’. I will likely buy more of the ‘stuff stocks’ and country funds, and probably finally add an ag position in JJG (though with silver and EEM running faster I just haven’t gotten to it yet!)

I’m particularly watching ag and food related, given the cool weather and likely crop failures that are shaping up for the year (including drought in places like Argentina).

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About E.M.Smith

A technical managerial sort interested in things from Stonehenge to computer science. My present "hot buttons' are the mythology of Climate Change and ancient metrology; but things change...
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