Tuesday, April 27, 2010

Greece is in an all out collapse....

$Athens General Shares (Short-term view)

$Athens General Shares (Long-term view)

Could this be at least an intermediate top?

  • I'm sure the market should fall right now. I just don't know if it will or not.
  • Yesterday I positioned myself net short, but will buy pullbacks strongly when I think the time is right.
  • My favorites are China and the energy sector.
  • You can check out my portfolio with a 20 minute delay in the link at the top right hand side of the page or right here anytime 24/7.
S&P 500 Index

Monday, April 26, 2010

China setting up for long-term rally?

  • I noticed a huge head & shoulders pattern today when looking at a long-term weekly chart of the China ETF FXI.
  • This could be huge, with a price target north of the highs in 2008.
  • Maybe we haven't even seen the beginning of the China bubble?
  • There could be some money to be made if this happens to breakout. Keep it on your watch list.
China ETF (FXI)

Friday, April 23, 2010

Home / Gold Ratio

Below is the median single-family home price divided by the price of one ounce of gold. This results in the home / gold ratio or the cost of the median single-family home in ounces of gold. For example, it currently takes 153 ounces of gold to buy the median single-family home. This is considerably less that the 601 ounces it took back in 2001. When priced in gold, the median single-family home is down 75% from its 2001 peak.

“It is a [disputed] question, whether the circulation of paper, rather than of specie [gold and silver coin], is a good or an evil… I believe it to be one of those cases where mercantile clamor will bear down reason, until it is corrected by ruin.”
- Thomas Jefferson

“Paper is poverty,… it is only the ghost of money, and not money itself.”
- Thomas Jefferson

Thursday, April 22, 2010

Hourly EWT

This is my count right now from the recent rally from mid Feburary....

Has the market finally stalled?

  • The S&P 500 is beginning to run into a sheer wall of resistance.
  • If you've banked some profits on the way up but are still reluctant to sell your long holdings I would suggest buying some put protection at this point in the game.
  • I'm not saying the market is going to tank back into oblivion, but it truly is time for a pause in the rally.

S&P 500 Index

Is the all mighty China poised for a substantial pullback?

  • I believe China's days could be numbered. It's just a matter of time before their enourmous property bubble pops. The market knows this and I think it's about to get a head start on the way down.
Shanghai Stock Exchange

Friday, April 16, 2010

Goldman Sachs charged with fraud!

SEC charged the company and one of its vice presidents with defrauding investors by misstating and omitting key facts about a financial product tied to subprime mortgages.

The SEC said Goldman Sachs (GS) structured and marketed a synthetic collateralized debt obligation, or CDO, that hinged on the performance of subprime residential mortgage-backed securities. According to the SEC, Goldman Sachs failed to disclose to investors vital information about the CDO, in particular the role that a major hedge fund played in the portfolio selection process and the fact that the hedge fund had taken a short position against the CDO.

So what GS was doing was selling a package of subprime residential mortgage backed securities to its customers knowing that they were overpriced and in a bubble while at the same time they were in a short position profiting at their client's expense.

So about the fine. GS was fined 1 billion dollars which sounds like a lot of money but when you look into the fine it's a slap on the wrist. The clients lost 30, 40, 50 percent of their assets because of this fraud that GS profited on. What percent of GS's assets was this 1 billion dollar fine? 0.09% of their 2007 assets. When you were losing 50.00% of you assets because GS lied to you they were losing 0.09% of their assets. This is around 1.1% of their 2007 revenue and 8.6% of their net income. So Goldman Sachs lost most people's life savings when they knew they were toxic investments and they get fined around a month of 2007's income (31.5 days)sounds reallllly fair to me.

Tuesday, April 13, 2010

Monday, April 12, 2010

George Soros: "50% Chance The Eurozone Disintegrates"

Things are not looking great for the Eurozone. Debt is knocking on the back door and it's not leaving till it gets in.

From Clusterstock:
“It is 50-50 whether the eurozone breaks up. The damage that break up would cause is so great, that I think that as people realise it, they will pull back from the brink,” Soros told the Financial Times in an interview. “But we are at the brink now...a solution has to be found in a matter of days.”
Greece is on the brink and I dare to say that the recent bailout won't be enough to save the mother of western civilization. The bailout rate is now rumored as being 6%. Greece simply can't afford this. Up next....Spain, Ireland, Italy, Latvia, Britain....

Euro Update