Tuesday, April 19, 2011
How not to get along with your Banker
China Urges US to Protect Creditors After S&P Warning
Published: Tuesday, 19 Apr 2011 | 10:46 AM ET
By: Reuters
China's Foreign Ministry said on Tuesday that the United States must take "responsible" measures to protect investors in its debt after Standard & Poor's threatened to lower its credit rating on the United States due to a bulging budget deficit.
Read the entire story here:
Silver moving higher on mediocre volume
In watching silver move up towards $44 in today's session, I am struck by the huge amount of air pockets above this market. Based on the manner in which is it moving up, there are simply not enough offers. I get the sense that would-be shorts in silver are terrified to step in front of this market. The dearth of sellers is allowing small bids to take the price up in big steps.
Coming on the heels of what was a huge volume day yesterday, I am a bit concerned about this. Right now it seems to be more a case of fewer sellers than it is a case of more buyers. I want to see the metal clear $44 and hold that level to feel a bit more comfortable about this and I want to see the volume pick up some. This market has come a long way and will need to see plenty of buyers even at these levels to keep it moving steadily upward.
A pause in the move would actually be healthy at this point. It could be that some of the shares are sensing this are a reluctant to jump higher waiting to see if the metal will pause and set back a bit or gather further momentum and just head to $50. Should the latter occur, we will see a rash of short covering in the silver mining shares.
Let's see how the metal fares the remainder of the trading day. If it clears $44, the volume should pick up.
Coming on the heels of what was a huge volume day yesterday, I am a bit concerned about this. Right now it seems to be more a case of fewer sellers than it is a case of more buyers. I want to see the metal clear $44 and hold that level to feel a bit more comfortable about this and I want to see the volume pick up some. This market has come a long way and will need to see plenty of buyers even at these levels to keep it moving steadily upward.
A pause in the move would actually be healthy at this point. It could be that some of the shares are sensing this are a reluctant to jump higher waiting to see if the metal will pause and set back a bit or gather further momentum and just head to $50. Should the latter occur, we will see a rash of short covering in the silver mining shares.
Let's see how the metal fares the remainder of the trading day. If it clears $44, the volume should pick up.
Mining shares need the Man with no name
For a little fun on another day in which the mining shares are once again lagging the metals.
Those of you who are fans of the trilogy from the 60's will remember the scene well!
http://www.youtube.com/watch?v=KaZkv0aorMM&feature=related
And just for your listening pleasure.... A classic soundtrack lead... great music to trade to....
http://www.youtube.com/watch?v=mLXQltR7vUQ&feature=related
http://www.youtube.com/watch?v=CpZjvbSC9_M&feature=related
http://www.youtube.com/watch?v=2PwpOmjAu1M&playnext=1&list=PL5B9214378E620573
Those of you who are fans of the trilogy from the 60's will remember the scene well!
http://www.youtube.com/watch?v=KaZkv0aorMM&feature=related
And just for your listening pleasure.... A classic soundtrack lead... great music to trade to....
http://www.youtube.com/watch?v=mLXQltR7vUQ&feature=related
http://www.youtube.com/watch?v=CpZjvbSC9_M&feature=related
http://www.youtube.com/watch?v=2PwpOmjAu1M&playnext=1&list=PL5B9214378E620573
Monday, April 18, 2011
Moody's - or - Standard and Poor's?
I have been fielding a few private emails asking about the rather bizarre behavior in the bond market today. After being greeted with a downgrade to the US credit outlook from "stable" to "negative" by S&P, the bonds sold off sharply falling near a full point at their worst level.
They then began moving higher even as the stock market was sharply lower as the rival ratings agency, Moody's issued a positive outlook on its own AAA US rating. Moody's did site some of the same concerns as S&P but suggested that the US government would reach some sort of agreement on dealing with the massive debt problem in contrast to S&P which was not at all confident that leaders would be able to come to any agreement to deal with it.
Moody's also cited issues facing Greece and thus drew some attention off of the US credit issues and back onto Euro sovereign debt issues.
The situation reminds me of the scene from the old movie, "Deliverance", with the dueling banjos. Moody's basically pooh-poohed S&P. My way of thinking is the US citizens are the ones going to be doing the squealing when the dust finally settles - those who saw the movie and remember that one scene will know exactly what I am referring to.
If that was not enough, the US National Association of Home Builders Index revealed that homebuilder optimism in the industry dropped one point in April from 17 to 16. That served to reinforce the notion of a sluggish economic pace of "recovery" in the US calming some concerns about any early end to QE2 as some of the Fed governors were out yacking about once again.
I should note here that the speed at which the long bond market fell tells us just how precarious things are in that market. In my opinion, it is a giant accident just waiting to occur.
They then began moving higher even as the stock market was sharply lower as the rival ratings agency, Moody's issued a positive outlook on its own AAA US rating. Moody's did site some of the same concerns as S&P but suggested that the US government would reach some sort of agreement on dealing with the massive debt problem in contrast to S&P which was not at all confident that leaders would be able to come to any agreement to deal with it.
Moody's also cited issues facing Greece and thus drew some attention off of the US credit issues and back onto Euro sovereign debt issues.
The situation reminds me of the scene from the old movie, "Deliverance", with the dueling banjos. Moody's basically pooh-poohed S&P. My way of thinking is the US citizens are the ones going to be doing the squealing when the dust finally settles - those who saw the movie and remember that one scene will know exactly what I am referring to.
If that was not enough, the US National Association of Home Builders Index revealed that homebuilder optimism in the industry dropped one point in April from 17 to 16. That served to reinforce the notion of a sluggish economic pace of "recovery" in the US calming some concerns about any early end to QE2 as some of the Fed governors were out yacking about once again.
I should note here that the speed at which the long bond market fell tells us just how precarious things are in that market. In my opinion, it is a giant accident just waiting to occur.
Silver flirting with $44
Silver has made an approach to its next resistance level near $44 which it will have to clear to set up a run towards $46. Its prior pattern has been to make an approximate $2 increase, pause, move sideways and consolidate, and then make the next leg higher as it stairsteps its way upward.
I am a bit concerned by the huge volume earlier in the session but that is only because the market has moved so far, so quickly. Also, we are beginning to see an increase in rollover activity which is going to exaggerate volume readings until we get to the first of May so that has to be taken into account as well when we look at these things.
I am a bit concerned by the huge volume earlier in the session but that is only because the market has moved so far, so quickly. Also, we are beginning to see an increase in rollover activity which is going to exaggerate volume readings until we get to the first of May so that has to be taken into account as well when we look at these things.
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