Tue, 09 Feb 2010 04:45:29 -0600 http://www.marketoracle.co.uk/ Financial Markets Forecasting & Analysis Website en-gb http://www.marketoracle.co.uk/images/logo.gif http://www.marketoracle.co.uk/ site_admin@marketoracle.co.uk http://www.marketoracle.co.uk/Article17112.html Whether you’re in Central Europe, such as Ukraine or Romania, the Med countries such as Portugal, Italy, Greece, Spain, or from Hungary to the Baltic States of Estonia, Latvia or Lithuania, you all have one common problem ---The hell that is the Euro! Tue, 09 Feb 2010 04:45:29 -0600 http://www.marketoracle.co.uk/Article17111.html Predators and parasites recently gathered in Davos to discuss the mounting problems of their prey. All present agreed the problem needed urgent attention. Historian David Hackett Fisher describes this passing era as the period of Victorian Equilibrium. England’s Victorian Equilibrium, however, was built on banker’s credit, a foundation of sand; and like the story of Cinderella where the carriage turns into a pumpkin at midnight, the banker’s credit has now turned into defaulting debt and the fairy-tale world it built is collapsing. Tue, 09 Feb 2010 02:52:09 -0600 http://www.marketoracle.co.uk/Article17110.html This week's Charts of the Week cover the overall equity market via the S&P 500 and then look at the dollar (via its ETF, the UUP) and commodities such as gold, silver and agriculture that are impacted by the dollar (via their ETFs such as the GLD, GDX, SLV, DBA and DBC). Tue, 09 Feb 2010 02:39:18 -0600 http://www.marketoracle.co.uk/Article17109.html Yesterday I explained why the market began to rally sharply Friday afternoon. Today we’re looking at where the market is from a technical perspective. Be forewarned, if you’re a bull, what follows isn’t pretty. For starters, the first thing we need to keep prominent in our thinking is that the market rally from March 2009-January 2010 was largely a technically driven rally fueled by easy money from the world’s Central Banks: Governments around the engaged in an unprecedented amount of stimulus/ bailouts and much of this money found its way into the financial markets. Tue, 09 Feb 2010 02:18:33 -0600 http://www.marketoracle.co.uk/Article17108.html Many investors have written in asking me what happened on Friday. For those of you who weren’t watching the tape, stocks entered a free fall around 1PM Eastern Time. It looked like we were going to get another massive drop similar to the one that occurred at Thursday’s open.   However, suddenly at 2PM stocks began to stage a sharp reversal with virtually every major US index ramping over 1% in a matter of minutes. Having collapsed for days, stocks actually managed to close Friday at a gain. Tue, 09 Feb 2010 02:11:59 -0600 http://www.marketoracle.co.uk/Article17107.html The S&P 500 sliced through its January lows yesterday, killing any notion that this latest drop is just a brief dip with which to buy. The next lines of support are the November low (1,040) and then the October low (1,020). Tue, 09 Feb 2010 01:56:00 -0600 http://www.marketoracle.co.uk/Article17106.html I’ve been receiving a number of emails lately asking me whether I am a deflationist or an inflationist. Just as often I am asked if we’re in a deflationary environment or inflationary environment. My answer to both questions is “yes.” Tue, 09 Feb 2010 01:50:17 -0600 http://www.marketoracle.co.uk/Article17105.html European and U.S. stock markets have taken a hit recently as spooked investors from Shanghai to Sao Paolo were fleeing risky assets amid concern that the financial crisis in Portugal and Greece could spread through the euro zone with vast implications for the fate of the fragile global economic recovery. (Fig. 1) Tue, 09 Feb 2010 01:46:52 -0600 http://www.marketoracle.co.uk/Article17104.html "Patience is power; with time and patience the mulberry leaf becomes a silk gown." ~ Chinese Proverbs, Sayings of Chinese Origin Mon, 08 Feb 2010 17:22:34 -0600 http://www.marketoracle.co.uk/Article17103.html Despite enjoying 2 full quarters of 'recovery', and coming off a hefty 5.7% GDP quarter - the reality is not so happy down on Main Street (business).  Keep in mind the year over year comparisons are versus the period of time (fall 2008/winter 2008-2009) when the recession was at its deepest, so to see continued "growth" in this area is certainly not a green shoot.  However, I am sure it can be explained away as all bad news is... let me think of an appropriate head in sand response.  Ah yes... let's throw this on the pile of "it's a lagging indicator". Via Reuters: Mon, 08 Feb 2010 17:18:17 -0600 http://www.marketoracle.co.uk/Article17102.html And that's what everyone was expecting after that wonderful hammer on all the critical index charts in the last hour on Friday. The S&P 500 touched the 200-day exponential moving average at 1046 (1044 print) and then burst higher. It was the first test in an extremely long time and after losing the 20- and 50-day exponential moving averages, one would think that whichever index got down to the 200-day exponential moving average first would give the market a quick blast higher and that's what happened. Mon, 08 Feb 2010 17:10:51 -0600 http://www.marketoracle.co.uk/Article17101.html Before we get to this week's Outside the Box, a quick note about my writing on Greece in last Saturday's letter. I made the point that if Greece defaults it does not necessarily mean they have to leave the EU, any more than if Illinois defaulted they would have to leave the United States. Greece could still use the euro and life could go on. EXCEPT. The markets would no longer lend the Greek government money at anything close to a livable rate. Greece would be forced to balance its budget. Since they are part of the euro, devaluing the currency is not an option. The results of controlling their fiscal deficit would not initially be pretty and would almost insure a serious prolonged recession or depression in the Greek area, with fall out in the region. It would be a sad decade for Greece. But in the long run, it is a better option than default. Mon, 08 Feb 2010 17:08:35 -0600 http://www.marketoracle.co.uk/Article17100.html The great blizzard that rolled across the eastern United States this past week should have served as an icy funeral pyre for the Global Warming Scam. Charles Ponzi was a rank amateur when compared to the attempt by climate evangelists to extract money from the gullible public. These would be weather Madoffs dream of the money extracted from the public by Keynesian economists, the clear champions of money Ponzi schemes. Money that appears to have been squandered.  Mon, 08 Feb 2010 17:01:24 -0600 http://www.marketoracle.co.uk/Article17099.html Last week, the House approved another increase in the national debt ceiling. This means the government can borrow $1.9 trillion more to stay afloat and avoid default. It has been little more than a year since the last debt limit increase, and graphs showing the debt limit over time show a steep, almost vertical trend. It is not likely to be very long before this new ceiling is met and the government is back on the brink between default and borrowing us further into oblivion. Mon, 08 Feb 2010 16:54:59 -0600 http://www.marketoracle.co.uk/Article17098.html The U.S. dollar was up last week against the euro out of fear of how debt problems in Greece and elsewhere in Europe will be resolved, and as a result gold had a tough week. Mon, 08 Feb 2010 14:43:14 -0600 http://www.marketoracle.co.uk/Article17097.html Major stock market indices put in outside weekly reversals last week, which is a bearish technical indication the intermediate-term trend may have finally rejoined the primary forces that would see prices far lower were it not for official intervention. And although this intervention is now getting talked about in the press in a more intelligent fashion, even if only on a very limited basis, it should be understood most remain oblivious to what makes the stock market world go round. Mon, 08 Feb 2010 14:31:30 -0600 http://www.marketoracle.co.uk/Article17096.html A choppy whippy day but US stocks rose Friday, with the Dow Jones erasing a 167-point drop in the final hour of trading, on speculation the European Union may propose a solution for Greece’s budget deficit. Oil, gold and copper rebounded, and the dollar pared its gain. The late day rally has been put down to short covering.  Mon, 08 Feb 2010 09:42:05 -0600 http://www.marketoracle.co.uk/Article17095.html This article takes a look at results for important asset categories since several key dates: (1) the approximate October 2007 stock markets high, (2) the approximate March 2009 stock markets low, (3) YTD 2010, and (4) since the January 19, 2010 election breaking the 60% Democrat super-majority in the US Senate. Mon, 08 Feb 2010 09:32:58 -0600 http://www.marketoracle.co.uk/Article17094.html If electric cars are adopted by the market in the US and abroad, there will be a shift in the relative demand growth rate for certain basic materials. While global population growth and average global standard of living increases will raise overall materials demand across the board, a move toward electric cars, particularly plug-in electric cars, will change the composition of basic materials demand growth. Mon, 08 Feb 2010 09:25:56 -0600 http://www.marketoracle.co.uk/Article17093.html We are caught in the grips of a great war! It is not a traditional land or sea war with tanks and battleships. Nor is it an anti-terrorist, guerilla war for hearts and minds. Mon, 08 Feb 2010 09:16:45 -0600 http://www.marketoracle.co.uk/Article17092.html Needless to say, Thursday was nothing short of an orgasmic day for Gold bears and Dollar bulls. The precious metals complex crumbled along with the Euro, while the greenback was higher. In fact, it was such a bad day that Gold officially lost its safe-haven status, according to CNBC. This was also noted by Elliot Wave and The Business Insider. All proclaimed that Gold was no safe haven. Mon, 08 Feb 2010 08:51:12 -0600 http://www.marketoracle.co.uk/Article17091.html The world’s attention is on the fiscal malaise in Greece and Portugal. Just a few months ago, policy makers told banks to shore up their balance sheets with more sovereign debt. However, policy makers around the world have since raced to spend money in an attempt to reinvigorate their respective economies, leading to record deficits. Now everyone appears surprised that weaker countries are having difficulty financing their largesse. Mon, 08 Feb 2010 08:10:05 -0600 http://www.marketoracle.co.uk/Article17090.html THE PRICE OF GOLD reversed an early 0.8% gain in London on Monday, revisiting Friday's finish of $1066 per ounce in what dealers called "lackluster" but "choppy" trade after last week's "widespread liquidation." European stock markets also gave back an initial rally, while the US Dollar held the Euro near Friday's new 9-month lows. Mon, 08 Feb 2010 07:43:54 -0600 http://www.marketoracle.co.uk/Article17089.html Wild Friday Here’s how we see it. Mon, 08 Feb 2010 07:40:24 -0600 http://www.marketoracle.co.uk/Article17088.html Trichet is one of the stalwarts of the economic crisis of 2008. He steered the EU economy through one of the most difficult eras after its creation and yet has maintained one of the cleanest balance sheet (Deficit 6% of GDP: one can almost mistake it for China or India Balance sheet). Mon, 08 Feb 2010 07:33:07 -0600 http://www.marketoracle.co.uk/Article17087.html General Commentary: The system for the SPY is on a Buy signal 50% The market was able to make some nice gains early on in the week, but then panic set in on Thursday and we saw all the gains wash away with a 3% drop for one session. Friday continued the drop except that we saw a recovery late in the session and this could now set up a nice bounce in the near term. Mon, 08 Feb 2010 06:22:00 -0600 http://www.marketoracle.co.uk/Article17086.html Gold closed lower in US trading on Friday at $1,057/oz. It traded sideways in Asian trading prior to jumping from $1,066/oz to $1,073.50/oz in early trade in Europe. Gold is currently trading at $1,070.20/oz and in euro and GBP terms, gold is trading at €783/oz and £688/oz respectively. Gold's 2.7% fall (in US dollars) last week led to further technical damage and may embolden some traders to short the market. Mon, 08 Feb 2010 05:48:18 -0600 http://www.marketoracle.co.uk/Article17085.html Jon D. Markman writes: The most important fundamental development of the week was not any of a slew of economic reports at all but the new federal budget proposal released by the White House. And it was a doozy: The Obama Administration proposed to spend $3.8 trillion, with $1.6 trillion on the equivalent of the national credit card.  Mon, 08 Feb 2010 05:21:05 -0600 http://www.marketoracle.co.uk/Article17084.html Last week the gold price dropped 2.3 percent. The silver price dropped 7.2 percent and the FTSE 100 index closed down 2.5 percent. Just as everything went up together in 2010 [see our article ‘The Three Major Questions That Will Determine the Gold Price in 2010’] everything comes down together too. Mon, 08 Feb 2010 03:39:15 -0600 http://www.marketoracle.co.uk/Article17083.html Over the weekend I received an email from Irishscot2, a poster on MarketWatch, regarding seasonal adjustments to the unemployment rate. Mon, 08 Feb 2010 03:34:52 -0600 http://www.marketoracle.co.uk/Article17082.html Former Federal Reserve chairman Alan Greenspan answered that he had placed his trust in a flawed theory when he was called before Congress to explain why he, Goldman Sachs Treasury Secretary Robert Rubin and Deputy Treasury Secretary Larry Summers, prevented Brooksley Born, head of the Commodity Futures Trading Corporation, a government regulatory agency, from doing her job of regulating over-the-counter derivatives. Mon, 08 Feb 2010 01:57:53 -0600 http://www.marketoracle.co.uk/Article17081.html Ersan Bocutoglu and Aykut Ekinci write: Austrian business-cycle theory (ABCT) is capable of explaining the origin of the current global crisis. Therefore, ABCT provides Austrian economists with an advantageous position, compared to the other schools, in foreseeing this crisis. See, for example, Thornton (June 2004), Karlsson (November 2004), Shostak (August 2005). Mon, 08 Feb 2010 01:48:51 -0600 http://www.marketoracle.co.uk/Article17080.html “How blind are those who cannot see the forest for the trees?” - John Heywood Gold’s action was scary last week – for all those who focus only on the short term.  But these are precisely the people who cannot see the big picture. And because they cannot see the big picture they cannot predict the big move.  And the big money, I remind you, is made in the big move. Mon, 08 Feb 2010 01:34:34 -0600 http://www.marketoracle.co.uk/Article17079.html The U.S. stock markets have taken a dive since mid-January, where the various indexes were each in the process of going over larger cyclical peaks. That topping action was then favored to give way to a sharp correction into the month of March - then to be on the lookout for technical signs of the next mid-term low. Mon, 08 Feb 2010 01:26:48 -0600 http://www.marketoracle.co.uk/Article17078.html We are moving out of cash.but which way? Happy Super Bowl Sunday! As I get ready to watch the championship game of the NFL, my appetizers are all set to put in the oven, wine is decanting, beer is stocked in the cooler and a few of my indicators have shifted their positions. Bullish or bearish? Mon, 08 Feb 2010 01:16:17 -0600