Wednesday, November 30, 2011

Wasn't that fun!

Nice up day. Steel one of the strongest sectors. Molycorp did o'kay also.
The charts:

Control your risk.....

Monday, November 21, 2011

China tensions?

The president of the U.S. was in Australia to announce the placing of a U.S. Marine contingent on the continent. This is seen as a counterbalance to China in the region. This can't do anything good for China relations in the medium term. China is the type to twist arms when they can. I remember their moves in restricting the export of rare earth minerals last year and what they did to the prices of those commodities, prompting the re-opening of the only U.S. mine for the rare earths, the MolyCorp mine in So. California. I can see China continueing to tighten the grip on the rare earth metals since they are critical in the solar and computer industry. With that in mind I initiated a small long position in MCP. The price of this stock continue to decline, but there doesn't seem to be much urgency in the selling.

The volume in the S&P is not urgent so far today as well. I would expect more panic given the percent declines.....
Control your risk.



Wednesday, November 16, 2011

Tuesday, November 15, 2011

LNG and CNBC

CNBC just had a discussion on why the U.S. is not using more natural gas in transportation vehicles.
Last week I sent them the news item about Cheniere Energy (LNG) that I posted on this blog. I asked them at that time why they don't talk to Boone Pickens again. Guess who's picture is on their website today???? Mr. Pickens.
Maybe I had some influence. Yea, me and a thousand others with the same Idea.... the 99%.
gh

Will the sentiment change from deflation to inflation?

That is the question on needs to consider to be on the right side of the markets nowadays.
Here is a stock that I would consider a bellweather of the inflation trades.  Freeport McMoran, an Australian mining company, has been in a recent downtrend. The downtrend may be broken soon and may be an indicator to the direction of world stock markets in general. I has held up surprisingly well given the European problem going on. FCX is a China play, and an inflation play in general. Stocks like this usually make a meaningful move when a trend line is broken. It may go down as well, however.
Watching:
Control risk.
gh
Addendum:
FCX is a copper and gold company. Here is the chart of copper. Known as Dr. Copper in the markets for it's usefulness as an indicator of economic activity. Copper is an important component in many industrial processes.....
Dr. Copper. This chart looks almost the same as FCX.....

Friday, November 11, 2011

What is the 99% upset about?

There has been a movement afoot lately called "Occupy". As you know this group has been organizing people to stage demonstrations on Wall St. and in the business districts of major cities in this country. The "occupy" movement seems to suffer from the lack of a single coherent message however. Instead the participants voice a general dissatisfaction with the way things in this country have been going. I would like to point out one instance of the kind of thing that I think is causing this dissatisfaction.
A couple weeks ago Canadian regulators gave the go ahead to a project to export Liquid Natural gas from a port in British Columbia. Last May U.S. authorities o'kayed a plan to export LNG from Louisiana. Most of these exports will be to Asia. Natural gas prices have plummeted in the last 3 years as new technology has made the gas more recoverable. Estimates of U.S. natural gas reserves now give us decades of plentiful energy if we choose to use it. Today, as I write this, the price of crude oil is $97 a barrel. We all know what the high price of oil does to the economy. Automobiles and trucks are easily converted to natural gas.
A very large part of the trade deficit in this country is due to imported oil. The trade deficit is a large part of what makes the U.S. dollar weak, and a weak currency makes everything more expensive. And the countries that we buy oil from do not always have the best interests of this country in mind. Not to mention our need to act as policeman in the Middle East.
Yet, the lawmakers in this country would rather let private interests export our natural resources while the rest of us import high priced energy to burn in our cars. A carefully fostered sense of distrust of government has been put over on the American people. Many in the public arena have taken up the chorus of "government is bad". I believe that many in big business have supported this campaign against "big government". But private enterprise will not undertake the job of converting the U.S. from oil to natural gas without incentives from the government. And the government is us. The 99 percent!
The availability of energy is what powers our economy. The cheaper the energy the easier it is to produce the things that make life comfortable. Yet the powers that be choose to allow our cheap energy to be sold to China. Again, the private interests trump the public interest.
This is one example of the kind of thing that makes Americans wonder just who is in charge.

Why is the U.S. and Canada exporting natural gas?

Here is a recent new item:


CALGARY (Dow Jones)--A project to export liquefied natural gas from British Columbia's west coast to markets in Asia received approval from Canadian regulators Thursday.
KM LNG, a joint venture between Apache Corp. (APA), Encana Inc. (ECA) and EOG Resources Inc. (EOG), received the license from Canada's National Energy Board to export from a deepwater port in Kitimat, B.C.
The license is a step forward for the project, initially estimated to cost C$5.6 billion, which is still undergoing a feasibility study by the partners. If they decide to build it, the terminal could begin shipping natural gas to markets in Asia by late 2015, eventually shipping up to 1.4 billion cubic feet of natural gas a day.
It's the first license Canadian regulators have issued to export LNG, reflecting the shift in North American gas markets as horizontal drilling technology unlocked vast new supplies of natural gas from shale rock. The new supplies sent North American gas prices plummeting, and plans to open more terminals to import natural gas from abroad were converted to export from oversupplied markets in the U.S. and Canada.
"Kitimat LNG represents a remarkable opportunity to open up Asia Pacific markets to Canadian natural gas," KM LNG President Janine McArdle, who is also an Apache senior vice president, said in a statement. "This export license approval is another major milestone for Kitimat LNG as we move forward to market our LNG supply."
The U.S. took a similar step in May, approving plans by Houston-based Cheniere Energy Inc. (LNG) to export LNG from a terminal in Louisiana.
The KM LNG project, led by Apache, received a 20-year license from the Canadian government to export more than 9 trillion cubic feet of gas over the life of the project. Nearby gas basins in British Columbia and Alberta owned by Apache and EOG contain more than 19 trillion cubic feet of recoverable gas, according documents filed with regulators.
Calgary's Encana said in a recent presentation that an LNG export terminal will help find markets for gas produced from the Horn River basin in northeastern British Columbia, which is rich but a long distance from markets in the U.S. The company estimated that Asian countries will need an extra 15 billion cubic feet a day of new gas supply by 2020 in order to keep up with the growth in demand.
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Why will the U.S. allow the export of our natural gas at the same time we are buying $100 oil. Natural gas is very usable as a transportation fuel. This is what T. Boone Pickens was trying to get done a couple years ago, to no avail. This is more foolishness by the Americans. We will let our private interests make a profit to the long term detriment of our country.

Thursday, November 10, 2011

col revisited

This is a strong looking chart. I don't know why.

interest rates, oil, and the economy.

Very interesting action in the stock indexes lately. Big down day in the indexes yesterday and weak action in the long bonds. And oil keeps going higher. (At least until I mention it!)
I can't help feeling that interest rates are going higher from here. Got stopped out of TBT last week, but am looking to re-establish a position as a trend emerges.....
The charts:


If Europe was going to set in motion the Greatest Depression ever, why is the stock market so strong. Markets usually do the thing that fools the most people, because markets are the people all trying to outguess each other.
Control your risk and don't let the market train you into bad trading habits......
gh

Tuesday, November 8, 2011

umpq

Awhile back I was touting Umpqua Bank, a local publicly owned bank in the Pacific Northwest. At the time I was advocating a buy over $12. At that time the stock went barely over and then quickly reversed, stopping me out with a small loss. Since that time the stock broke through the bottom of the range it was in and now has recovered back to the $12 dollar area. The best trades are often the hardest to take. It is hard psychologically to get back in this stock here, but the strength of this stock is dramatic and it has outshone most of the banking stocks that I look at. For a long term play this bank has merit. The chart:
As alway, limit your risk in whatever timeframe you play in.....gh

Sunday, November 6, 2011

update 11-6-11

A quick update on possible trades recently featured.
I was stopped out of the long TBT by the gap down day last week.
Holding on to steel. Still see buying in most steel stocks.
JJG is seeing buying in large chunks intraday....
A recent comment by Schnitzer Steel leads me to believe the asian economys may be stronger than many believe....
"
Schnitzer Steel Industries Inc.'s (SCHN) fiscal fourth-quarter earnings more than doubled as the company reported double-digit revenue growth and higher volumes and prices. The company's revenue has continued to benefit in recent quarters from stronger global demand for recycled metals and higher prices, though lower margins and a higher tax rate have cut into earnings. The company has also been on an acquisition streak this year, closing 10 deals. "Looking ahead to 2012, we expect the positive benefits of the investments and acquisitions we have made as well as the overall increasing demand for scrap metals to continue," President and Chief Executive Tamara Lundgren said. "Despite recent forecasts of lower global GDP growth, the growth rates of the developing economies, which are our primary end markets, still reflect levels which can sustain strong steel production."

Combine this with the LVS strength and the outlook for the emerging economies may still remain strong....
Some recent charts:


I wonder when coking coal will become popular again?

Control risk always........