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Finance 0
Biotech Chart Looks Scary. Breakdown In The Making?
As a picture is worth a 1000 words, we let the chart speak. Biotechnology peaked last July. The IBB ETF, representing the sector, has dropped from around 400 points to 263 (last close) in a bit more than half a year. That is a drop of some 34%. The problem right now is that biotech is breaking through major support, indicated in red on the chart. If that support level does not hold (a very likely scenario), then we see the next support level between 200 and 220 points, which would mark a decline of almost 50%. We aren’t there yet, but the chart really looks scary. This not the time to take positions; it is a time to be patient and let the m... -
Finance 0
Primary Silver Mining Company To Cut Production 25% In 2016
The low price of silver has finally claimed is first victim. Endeavour Silver (EXK) announced that it will cut silver production by 25% in 2016. The company has three mines working in Mexico and will produce 7.2 million oz (Moz) of silver in 2015. However, Endeavour plans to shut down production of one of their mines by the end of 2016 and put it on care and maintenance. According to Endeavour Silver’s press release: Endeavour’s mine plans for 2016 are focused on minimizing all-in sustaining costs and improving after-tax free cash flow rather than metal output. Silver production is expected to be in the range of 4.9-5.3 million oz, gold... -
Finance 0
Lower Oil Prices Aren’t All Bad
World financial markets appear to be in a panic, partly over events in China, and partly over the plunge in oil prices. I will claim no expertise on the former, although people I respect who do write on China seem to think the country is not facing an economic meltdown. This leaves lower oil prices as the main source of worry. There are some bad stories with lower oil prices. Developing countries that are heavily dependent on oil exports will be badly hit. Also, much of the debt issued by energy companies is likely to go bad. This may have some ripple effects in the financial markets, but is unlikely to set off any general collapses. Also, th... -
Finance 0
If You Have A Sweet Tooth For Trading Its Pay Day
On Wednesday Jan 27th I wrote an article that gave you a picture perfect trade setup. The trade is on sugar or the SGG sugar ETF. As of this writing sugar is now over 10% in our favor from the original entry and trading at short term support. This is a critical level to lock in partial profits and move your stop in the money for the balance of the trade to be safe. I just want to keep following up with this trade as many followers are in this trade with me. Daily Chart of Sugar As you can see in the chart below sugar price formation has turned bearish. With price breaking through support we have seen a beautiful wave of stops being triggered... -
Finance 0
SP 500 And NDX Futures Daily Charts – BoJ Goes More Negative Than Hillary’s Campaign
Stocks were on a tear today as the first look at the GDP number for 4Q 2015 came in as lousy as expected. If the past is any indication, the next two revisions will take it lower to the zero bound, perhaps even negative. Digging beneath the numbers, it appears that rising healthcare costs were a major contributor to GDP. Since healthcare costs in the US are far above what is paid in the rest of the developed world, one might consider the growth of those costs as a distortion on the greater economy, almost in the manner of a tax. And the BOJ shocked the markets by opting for negative interest rates, just one week after Kuroda san came out and ... -
Finance 0
Evaluating The Wealthfront And Betterment Portfolios
Robo Investing firms trumpet the virtues of passive investing. But in order to buy the market, one first has to define the market – and the definitions one chooses are where the action is. Today, we’ll take a look the active portfolio choices (market definitions or asset choices; wink, wink) made by robo giants, Wealthfront and Betterment. Lessons From LEGOs In order to invest in “the” market, we’d need a single vehicle (e.g., an ETF) whose portfolio includes all investable assets (stocks, fixed income, derivatives) throughout the world. There are ETFs that represent pieces of the whole pie, but none come close to really representi... -
Finance 0
Safely Transporting Oil By Railroad
The oil price crash impacts the railroad sector. Transporting freight gets cheaper, but demand for railcars to bring oil out of the Bakken fields and other places where pipelines were never laid is now dropping off. Refer to US DOT MARAD’s 2008 study “Impact of High Oil Prices on Freight Transportation” for technical discussions of how the rail sector behaved under different conditions. Times have changed, perhaps permanently. Safety rules can also change with the times. Railroad accidents made headlines when America’s oil shale boom was roaring. Horrific, sensational railcar explosions are less useful justifications... -
Finance 0
Xerox Corporation Splits In Two: What You Need To Know
Like Hewlett-Packard did last year, Xerox Corp (XRX – Analyst Report) announced on Friday that it will split into two companies in an effort to try and turn its business around. Here’s what you need to know. Two separate companies One of the new companies will hold Xerox’s premier printer operations, while the other company will contain its business process outsourcing unit. The new companies’ value The document technology company will be worth $11 billion, while the services company will hold a value of $7 billion. Deal completion The Xerox deal is expected to be completed by the end of this year. Carl Icahn will play a major r... -
Finance 0
E The Daily Shot And Data – January 29, 2016
Let’s start with Japan where the BoJ took the markets by surprise by pushing the benchmark rate into negative territory (taking a lesson from the ECB). In a stunning move of “competitive devaluation”, the BoJ “retaliated” against China’s recent currency depreciation and the ECB’s threats of further easing. Welcome to currency wars. The yen weakened sharply in response (shown below is USD rising vs. JPY). The next chart shows the yen/renminbi exchange rate. That appreciation in recent weeks was not welcome news for the BoJ and Haruhiko Kuroda is now giving it back to the PBoC. The 10yr Japanese govern... -
Finance 0
U.S. Stock Market & The Gold Sector
To review our stance, which is years along now, the gold sector is not going anywhere until it becomes widely accepted that developed stock markets, including and especially those in the US, are in bear cycles. We have also drawn analogies to the Q4 2008 event that took place in what felt like a nanosecond compared to today’s long, drawn out process.For this reason, a better ‘comp’ has been the 1999 to 2001 time frame. That was a process as well. Regardless, gold boosters viewing inflation as the reason to buy the sector are still out there pitching, but even they have retooled their pitches for a deflationary world. It is now and al...
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