AC Investor

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PCS had heavy volume come into the stock on Friday, as it closed up $.40 on 2.5x normal daily volume. The heavy buying makes this an interesting situation and one worth watching on Monday. From a technical standpoint, the stock is starting to show signs of acumulation with high volume on upside days and low on dowside days. The technical chart shows the stock is in a short term bull market rally with MACD on top of signal line and K line on top of D line. This momentum could push this stock much higher from here. Next resistance is now seen at $7.64.

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MPEL looks to have made a bottom and is trying for a reversal. The technical chart above suggests that stock might find now resistance at $4.55. Only a close above this level would suggest further upside. Remain invested with a stop loss at $4.15.

Other Stocks to watch - ( Pattern is Bullish Engulfing )

Q – QWEST COMM INTL INC
BMY – BRISTOL MYERS SQUIB
PCS – MetroPcs Communications
RIMM – Research in Motion
MCD – MCDONALDS CORP
DUK – DUKE ENERGY CORP
PARD – NeoRx Corporation
SLE – SARA LEE CORP
LDK – LDK Solar Co Ltd 8.00
AKS – A K STEEL HOLDING CORP
MPEL – Melco Crown Adr
ALL – ALLSTATE CORP
EXC – EXELON CORPORATION
BA – BOEING CO
IPG – INTERPUBLIC GRP OF COS
XLV – Select Sector SPDR
HCP – HCP Inc
TMO – Thermo Fisher Scien
TQNT – TriQuint Semiconductor
ACAS – American Cap Ltd
NSC – NORFOLK SOUTHERN CORP
DF – DEAN FOODS INC
YUM – TRICON GLOBAL REST INC
CLF – CLEVELAND CLIFFS INC
RTN – RAYTHEON CO NEW
BIIB – IDEC Pharmaceutical
BBBY – Bed Bath & Beyond Inc.
MWA – Mueller Water Produ
DRAM – Dataram Corporation
URI – UNITED RENTALS INC
LO – Lorillard Inc
ISIS – Isis Pharmaceutical
SNH – SENIOR HOUSING PROP
QTWW – Quantum Fuel System
NU – NORTHEAST UTILITIES
WEC – WISCONSIN ENERGY CORP
CMC – COMMERCIAL METALS CO
CNOA – Industrial Electric
PFCB – P.F.Chang’s China B
TMX – TELEFONOS DE MEXICO
SCHN – Schnitzer Steel Ind
GNA – GERDAU AMERISTEEL CP
TECD – Tech Data Corporation
PPH – Pharmceutical Hldrs
DVA – DaVita Inc
SVR – SYNIVERSE HOLDINGS INC
SEE – SEALED AIR CORP NEW
PKG – PACKAGING CORP OF A
RWT – REDWOOD TRUST INC
VPHM – ViroPharma Incorpor
MTZ – MASTEC INC
APWR – A-Power Energy Gene
SIGA – SIGA Technologies Inc.
MOO – Mk Vector Agribs
OLN – OLIN CORP
AZO – AUTOZONE INC NEVADA
TSTC – Milestone Capital Inc
ONB – OLD NATIONAL BANCOR
CMO – CAPSTEAD MORTGAGE CORP
CXM – ARIES VENTURES INC
NPBC – National Penn Bancs
BPZ – BPZ Resources
RMTR – Ramtron International
BVF – BIOVAIL CORPORATION
IDCC – Interdigital Communications
ROC – ROCKWOOD HOLDINGS INC
LNCR – Lincare Holdings Inc.
SONE – S1 Corporation
ACOR – ACORDA THERAPEUTICS
PNK – PINNACLE ENTERTAINMENT
SIGM – Sigma Designs, Inc.
BGP – BORDERS GROUP INC MICH
LIHR – Lihir Gold, Limited
FNB – F.N.B. Corporation
UCBI – United Community Ba
OGE – O G E ENERGY CORP
CHT – CHUNGHWA TELCOMM
NABI – Nabi
CML – Compellent Technologies
BMO – BANK OF MONTREAL
WATG – MGCC INVESTMENT STR
MICC – Millicom International
POL – PolyOne Corp
TNDM – Neutral Tandem Inc
MATK – Martek Biosciences
PRE – PARTNER RE LTD
VLY – VALLEY NATIONAL BAN
SMOD – SMART MODULAR TEC
HAIN – The Hain Celestial
CVD – COVANCE INC
ATK – ALLIANT TECHSYSTEMS
CASY – Casey’s General Sto
HGT – HUGOTON ROYALTY TRUST
GY – GENCORP INC
HME – Home Properties Inc
DLB – DOLBY LABORATORIES INC
HGG – HHGregg Inc
ALJ – ALON USA ENERGY INC

Courtesy of Vincent Fernando at Clusterstock

In case you missed it, treasury bill yields went negative yesterday (to -0.03%) which means investors were willing to lose money in order to own them. This is a very rare occurrence.

Even simply keeping cash under your pillow would earn a higher return, in either an inflationary or deflationary environment. So negative yields, no matter how small, clearly don’t make any investment sense.

When this happened back during the end of last year, Post-Lehman, one potential reason was that institutional investors were so panicked that they simply wanted to protect the value of their capital as much as possible. The only way to do that within their scope of options was to buy U.S. treasury bills, even if they had to accept a small negative return.

Yet investors certainly aren’t as panicked as they were last year. So what’s going on this time?

The FT (via FTAlphaville) ‘The growing appetite for short-term government debt reflects an effort by banks to present pristine year-end balance sheets to regulators and investors – a practice known as “window dressing” on Wall Street, analysts said.’

And…

Across The Curve: Typically as the year end approaches clients tend to unwind profitable trades and reduce balance sheet. I think that some of that deleveraging process has created new piles of cash and that money needs a place to park.

Others are preparing to beautify their balance sheet by having some pristine government paper on the books over year end. Some of that trade has begun as investors purchase paper which will carry them into 2010.

Thus this time around it appears there is simply too much money that wants to sit tight and look respectable come year-end. Which means that we shouldn’t read too much from the negative T-Bill yield and this will eventually rebound back to at least 0%, once the year-end regulatory dance comes to an end.

Zero Hedge
After yesterday’s debacle for the Fed, could even more grey clouds be gathering for the Chairman? As readers will recall Alan Grayson recently presented several questions, the response to which would serve as a gating factor to Bernanke’s reconfirmation. Alas, that initiative never appeared to get much traction. In fact upon questioning Chris Dodd said that Bernanke’s confirmation was a done deal.

“I’ve indicated I want to be supportive. I think Ben Bernanke’s done a very good job, particularly in the last year or so. I think that view is embraced by a lot of people,” said Dodd, a Democrat.

“The chairman’s not going anywhere,” Dodd said.

Yet a recent interview by Mike Stark indicates that Mr. Dodd may have had a change of heart about the certainty of Mr. Bernanke’s tenure, and is now voicing much less certainty about the continued tenure of the fiat money printer.

As the clip demonstrates, Dodd may be reeling under increasing Main Street pressure to not seem like the Fed puppet that Mr. Barney Frank has disclosed himself to be.

Mike Stark: “Is it a foregone conclusion that he’ll be confirmed?”
Senator Dodd: “Not necessarily, not necessarily, we’ll see how members react.”
Mike Stark: “What do you think his chances are?”
Senator Dodd: “Well I don’t know, as Chairman of the committee I don’t want to speculate how other members feel about it, we’ll see what happens.”

As a reminder Frank stated the following: ““It’s going to be seen as weakening the independence of monetary policy with consequent negative implications. People are going to be worried about the impact on the dollar, on the interest rate.” Of course, in reality there is absolutely nothing factual contained in Frank’s statement, which is merely another escalation of the Mutual Assured Destruction doctrine, so well practiced by Wall Street, and finally getting adopted by Washington. Should the final Paul-Grayson bill pass in its current form, we expect nothing less than a resignation by Mr. Frank, followed hopefully by the resignations of his “supervisors”, Mr. Geithner and Mr. Bernanke.

In the meantime, keep an eye out on future commentaries by Dodd and other members of our ruling “elite” vis-a-vis Bernanke and the Fed. If yesterday is any indication, the opposition of the majority of the public’s opinion, especially if its finally bears fruit in a Fed transparency outcome, will be equivalent to political suicide for all those who have been supporting the Fed’s desire to maintain its unprecedented secrecy.

The gold market continues to steam roll ahead as it gets closer to our $1,300 target zone.

As we have stated before, gold is in a fully fledged bull market and sharp pullbacks are to be expected. This is not to say the bull market is over; it is more to say that pullbacks should be looked upon as opportunities to add to or initiate new positions. Click on the chart to view the video

By Doug Hornig, Senior Editor, Casey Research

“I have always depended on the kindness of strangers,” said Blanche DuBois, in the final words of the play A Streetcar Named Desire. Well, don’t we all.

Many citizens probably still cling to the old saw that public debt doesn’t matter because “we owe it to ourselves.” Wrong. Debt always matters. And as for whom we owe it to, it is a lot of kind (or, at least, not yet unkind) strangers.

As recently as 1970, foreign holders of U.S. debt were essentially non-existent. But their slice of our obligation pie has steadily increased, especially over the past two decades, until now foreign governments and international investors hold about 35% of Treasuries, as the following chart reveals.

Of about $11 trillion in U.S. debt, foreigners have about $3.8 trillion, with China in the lead at nearly $1 trillion and Japan not far behind at around $750 billion.

Most likely, though, this trend has already leveled off. The Chinese, Japanese, Russians, and Indians have openly announced their decision to cut back on further purchases and existing holdings of U.S. government debt. Beyond that, the source of funds previously allocated to their purchases — trade surpluses — has declined sharply with the recession. As a consequence, going forward, foreign buying is more apt to shrink than increase.

While foreigners are continuing to show up for the record-sized Treasury auctions, it’s due to the dollar retaining its status (albeit shakily) as the world’s reserve currency. But they have become quite cautious, generally investing towards the front end of the yield curve, which is a vote of no confidence in the buck’s future. As the chart below illustrates, sales of long-term bonds to foreigners are way down.

So what does all this mean?

It means that a big chunk of our prosperity during the past twenty years was due to a trade deficit that put billions of dollars into the hands of foreigners, who then turned around and bought Treasuries with them, helping the U.S. government finance its massive deficit spending. That’s over — and the unwinding process has just begun.

Yet federal deficit spending, far from reflecting this reality, has grown by leaps and bounds. But who will finance it? Let’s extend our first chart out a few years.

As you can see, we project that foreign participation has plateaued. U.S. private domestic investors can probably increase their holdings moderately, now that households are consuming less and saving more, and financial institutions have money to invest in Treasury paper. The agencies and trusts (like Social Security) are really not a part of the equation, but rather reflect programs on “auto-pilot” and quickly headed to the point where they will negatively impact, not help, the deficits.

Adding it all together, even under the most conservative of assumptions, there are simply not enough buyers to cover the accelerating federal deficits. That leaves the lender of last resort, the Federal Reserve, as the only remaining candidate to satisfy the government’s grotesque appetite for funding. There is no viable alternative.

The Fed will take up the slack in the only way open to it, by printing money out of thin air and exchanging it for promises from the Treasury. That means an escalation of monetary inflation and, somewhere down the road, serious price inflation as well. We don’t know exactly when that will happen, only that it must.

The editors of The Casey Report have been alerting subscribers to this very possible scenario for quite some time. If foreigners stop buying U.S. government debt, the whole house of cards will come crashing down. But you can do a lot to protect yourself financially – run with the trend instead of swimming against it. Find out more about the accurate predictions of trend hunter Doug Casey and his team, and how to profit from them… click here.

By Gary Grimes

Please understand that this article is about more than safeguarding your money; it’s about saving you headache and heartache. It’s about giving you peace of mind.

Before I explain, please allow me to ask a few questions:

• Have you given much thought about the money in your banking accounts lately? Do you know if it’s safe?
• Have you thought about what might happen if your bank fails?
• Did you know you could be left in the lurch for days, weeks, even months before you get your money back from the FDIC?
• What happens if the FDIC can’t cover your funds?
• How do you find a safe bank to protect your deposits right now?

I hope you’ve given these questions some serious thought.

I have to be honest: These questions were about the farthest things from my mind until about a year ago, when I downloaded the free “Safe Banks” report from my colleagues at Elliott Wave International. At first, the report scared me: I thought, “Oh My Gosh! I could lose all of my money if my bank fails. What would I do?”

But as I read on, I figured out that the report was not only about making my money safe; it was about giving me peace of mind.

If you’ve read any of the following news items, perhaps you understand the fear of learning your money might not be safe. Here’s a recent story from Bloomberg:

Sept. 24 (Bloomberg) — In May, the FDIC said it was projecting $70 billion of losses during the next five years due to bank failures. The agency said it expects most of those collapses to occur in 2009 and 2010.

The FDIC’s problem is that it didn’t collect enough revenue over the years to cover today’s losses. The blame lies partly with Congress. Until the law was changed in 2006, the FDIC was barred from charging premiums to banks that it classified as well-capitalized and well-managed. Consequently, the vast majority of banks weren’t paying anything for deposit insurance.

Of course, we now know it means nothing when the FDIC or any other regulator labels a bank “well-capitalized.” Most banks that failed during this crisis were considered well-capitalized just before their failure.

By the end of 2009, more than 130 banks will have failed. Most depositors will have little clue their bank was even at risk. Worse yet, the string-pullers in Washington are doing everything in their power to hide information about the safety of your bank from you.

So far, the FDIC has had enough money to cover insured depositors. But that money is quickly running out.

Just last week, the FDIC voted to mandate early payment of insurance premiums to help cover at-risk banks. But only time will tell if this move will provide the funds needed in the years ahead. Here’s what the Associated Press reported on Thursday, Nov. 12:

WASHINGTON (AP) — U.S. banks will prepay about $45 billion in premiums to replenish a federal deposit insurance fund now in the red, under a plan adopted Thursday by federal regulators.

The Federal Deposit Insurance Corp. board voted to mandate the early payments of premiums for 2010 through 2012. Amid the struggling economy and rising loan defaults, 120 banks have failed so far this year, costing the insurance fund more than $28 billion.

Worse yet, three more banks failed the very next day, Friday, Nov. 13.

This is a very real problem and a direct threat to your money. It’s more important now than ever to personally ensure the safety of your bank. The free 10-page “Safe Banks” report can help. It includes the very latest bank safety ratings from the third quarter of 2009 to help you prepare for what’s still to come this year and next.

Inside the revealing free report, you’ll discover:

• The 100 Safest U.S. Banks (2 for each state)
• Where your money goes after you make a deposit
• How your fractional-reserve bank works
• What risks you might be taking by relying on the FDIC’s guarantee

Please protect your money. Download the free 10-page “Safe Banks” report now.

Learn more about the “Safe Banks” report, and download it for free here.

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Zero Hedge

The race to the economic/currency bottom today is entirely at the expense of the “burgeoning” European economy, and with Spain and Italy being on the verge of a depression, and France having its usual set of problems, it means that somehow Germany is now the greatest economy in the world. The AUD, GBP and JPY are all underperforming, with just the EUR being the beneficiary of the daily USD flaying.

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Courtesy of Phil’s Stok World

We like going short on oil today.

We like going short on the Dow here, as close to 10,500 as we can until “they” prove they can hold it and not just spike us over the line. Copper is also a great short at $3.17 this morning as that is just ridiculous too. We can use 10,500 as a stop on Dow shorts and $80 as a stop for oil shorts and $3.18 as a stop for copper so it’s not like we have to bet the house but, COME ON, this is just getting stupid! Oh, sorry – missed one, also short on the Euro at $1.4975 with a stop at $1.5025…

I know I am trying to be more bullish, we have plenty of bullish plays this week and just yesterday I was warning people to avoid the ultra-shorts, which can still get crushed but, I am sorry, THESE levels are ridiculous given the current environment. Oil may be up at $80 for now and we will get a draw in today’s crude inventories but only because Tropical Storm Ida gave Gulf energy producers an excuse to shut down 43% of production last week and the port at Louisiana was closed for 3.5 days, stalling imports. Gasoline consumption will be up with the holiday last week so they couldn’t have timed this better and, if you look at NYMEX trading yesterday, you’ll see a quick spike from $79.36 to $80.06 at about 2pm, painting a top for the day they are now struggling to match in the futures.

Despite anaylsts official expectations of a 300,000 build in crude (which was never adjusted to take the above 2 major factors into account), the oil traders will be very disappointed with anything less than a 2.5Mb net draw so that’s what we’ll be looking for at 10:30. If we do get a good spike over $80, we’ll be shorting into next week’s report instead. Another report we’re looking at is the latest from Cambridge Energy, which projects growth in oil production capacity through 2030 with “no peak evident,” something I’ve been saying for years. As you can see from the chart – it’s not peak oil they should be worried about, it’s peak demand!

Keep in mind that we still think the dollar is about to wake up and rally off the 75 mark, although every possible effort is being made to push it lower. At this point, pretty much everyone is betting the dollar down but I flipped bullish this month (we menitoned our UUP bets) and George Soros has joined me in warning that betting the dollar lower may soon become hazardous to your financial health. Since it’s the falling dollar, and not demand, that has been fueling the speculative bubbles in gold, oil and the dollar and since the energy and materials secror have led the markets up, a dollar rally is very likely to be short-term market poison but it’s also the best way to put money back into people’s hands ahead of the holidays as it’s the quickest way to drive down food and fuel prices, which make up close to 1/3 of non-fixed household spending.

We are just barely a week away from what used to be called “Black Friday,” the day after Thanksgiving when retailers typically begin making money for the year . Now most retailers will be lucky to be in the black on December 31st and that clock is tick, tick, ticking as the reality of the economy will soon hit the unreality of the stock valuations head on.

Mortgage applications fell 2.5% last week despite the 30-year fixed rate falling to 4.83%. As with last week, refinances held things up but even they fell 1.4% as bank lending requirements have tightened people out of qualifying and actual applications to buy homes fell 4.7%, after falling 11.7% last week – making 6 consecutive weeks of declines. This is now a 9-year low for mortgage applications. Not surprisingly, housing starts are dropping as well with builders cutting back 11% to just 529,000 homes or 882 homes per month, per state. “It’s going to be a long road back to recovery,” Scott Brown, chief economist at Raymond James & Associates Inc. in St. Petersburg, Florida, said before the report. “The labor market is a key factor. We really need to see job gains in order to become more optimistic about housing.”

No jobs and a weak dollar is not going to jump-start the housing market but that didn’t stop “expert economists” from expecting 600,000 housing starts this month. Gee, if they can be 15% wrong about that, I wonder what other optimistic BS they’ve been telling us is going to fall apart. Permits also fell to 552,000 from 575,000 last month, possibly because 10.9% of the US housing supply, or 14.2M homes, are currently vacant and more and more families are evicted through foreclosure every day (averaging over 300,000 a month). When the number of people being thrown out of their homes exceeds the number of people moving into homes – generally there is a problem.

The Federal Reserve Bank of New York didn’t even try to get a good deal for taxpayers when it caved to demands from AIG’s creditors that they should be paid in full.

The new report from TARP inspector general Neil Barofsky explains how the New York Fed, then headed by current Treasury Secretary Tim Geithner, essentially agreed that AIG’s creditors should be paid 100 cents on the dollar.

From the Washington Post:

Treasury Secretary Timothy F. Geithner, who was then the president of the New York Fed, concurred with advisers that it would be impractical to impose losses on AIG’s counterparties and that they essentially should be paid at 100 cents on the dollar, the report by special inspector general Neil Barofsky states.

Barofsky said he undertook the report after 27 members of Congress asked him to review the basis for the payments and whether they were made in the best interest of taxpayers. The issue has caused consternation among lawmakers, who have repeatedly questioned why such vast amounts of money flowed with little transparency and without condition to AIG’s creditors, which included some of the world’s largest financial firms.

Barofsky said the Fed’s decisions in bailing out AIG “came with a cost — they led directly to a negotiating strategy with the counterparties that even then-New York Fed President Geithner acknowledged had little likelihood of success.”

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Submitted by Nic Lenoir of ICAP..Hat Tip Zero Hedge

We had discussed last week that even though the S&P future was back around the tops for the year, we did not have enough elements to think the turn was right upon us as the price action and its fractal nature did not have the makings of a complete bullish impulse.

We are now starting to have some elements. Purists will realize we made the tops last week with only divergence on a 30-minute and 60-minute interval charts, which is historically only indicative of a short-term retracement. As can be seen on the 60-minute chart we had slight divergence on the 11th and we have been consolidating since in a wave 4. It is not clear whether wave 4 is completed just yet. Watch 1,095.50 for now. As long as this level is not violated we may be in the last leg up of the impulse started at 1,026, but if it violated expect a pull back towards 1,082/1,084 before we make new highs.

Picking out the top here might be tricky, standard extensions for the last move up range from 1,013 to 1,029 in the SPZ9 future. We will monitor closely the structure of the price action in order to refine the level we see for the possible top as I expect a subsequent sell-off of at least 50 tics once this last leg is complete. In fact I expect we will retest at least 1,033. It is very interesting to note that on the daily chart we have divergence in RSI, and very pronounced divergence on the MACD. As long as the pattern is not violated we should still expect a sizeable retracement down to 943 or 875 down the road.

On a separate note the Dax has violated the resistance I was observing, and I would watch closely weather we close above 5,762 or how we trade tomorrow as if today is confirmed we would go challenge the highs which would in turn imply the top in S&P will be closer to the higher end of the range mentioned hereabove.

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