Thursday, February 24, 2011

Freeport-McMoran looks weak here...

From Yahoo Finance - Freeport-McMoRan Copper & Gold Inc. engages in the exploration, mining, and production of mineral resources. It primarily explores for copper, gold, molybdenum, silver, and cobalt deposits. As of December 31, 2009, its consolidated recoverable proven and probable reserves totaled 104.2 billion pounds of copper, 37.2 million ounces of gold, 2.59 billion pounds of molybdenum, 270.4 million ounces of silver, and 0.78 billion pounds of cobalt. Freeport-McMoRan Copper & Gold Inc. was founded in 1987 and is headquartered in Phoenix, Arizona.

Freeport (FCX) is looking rather weak at this point. If the market enters a downtrend, as we have talked about in previous post, this could be a lucrative shorting opportunity. The stock charts looks wear, as do FCX's two main sources of revenue, copper and gold.

Freeport-McMoran (FCX)
Gold (GLD)

Disclosure: No Position

Wednesday, February 23, 2011

Portfolio Update

After two days of slight losses the long only portfolio will move to 100% hedged at the open tomorrow morning. Will it be a wise decision? I'm not sure, it depends on if the Fed can keep up it's POMO fueled market melt-up. If so we will return to a net long position as needed. More on the portfolio will be described in the first volume of the weekly newsletter due out on Sunday.

POMO (Permanant Open Market Operations) "Money Printing"
  • Thursday 2/24/2011 - $4-6 billion
  • Friday 2/25/2011 - $6-8 billion
Good luck fighting the Fed.....

Risk is high in this area....

Right now risk, as measured by the Gold-to-Silver ratio, is at the same height as it was at the peak of the bubble and the top of the housing bubble. It probably isn't a great time to be long the stock market right now without the appropriate hedges in place. I'm not calling for a crash, but I wouldn't be buying risk assets at the moment. Couple this with the second chart showing the S&P bouncing off of two VERY long-term resistance lines and you have the making of at least an intermediate term drop in the markets.
  • Bottom line - if you're looking at purchasing a few shares of your favorite stock I would wait a few days to weeks to buy at lower prices.
Long Term Gold-to-Silver Ratio

Monthly S&P 500 Index

2/23/2011 - Noon Update

S&P 500 Index Daily Chart
  • Wedge support has broken on the SPX watch for a further retrace to at least 1275, if that breaks watch for a move back to the 1220 area. Good luck.

Tuesday, February 22, 2011

Investment Newsletter coming this week!!

Starting this week Absolute Investments will be writing a weekly newsletter that will be published every Sunday night. It will give our technical and economic analysis, as well as two different portfolios to follow, one long only and one long short. The portfolios will only trade ETFs so as to to limit company specific risk and add to broad diversification. Look forward to it. If you'd like to subscribe to the newsletter just e-mail me at

A quick update: Our last post was back in December where we identified a range breakout on the S&P 500 and predicted higher prices. That prediction came true. Today I'll provide two charts, the daily (short-term) chart and the longer term weekly S&P 500 chart. I'll explain more in this weeks newsletter, but the charts do a fairly decent job giving a market picture themselves.

S&P 500 Daily Chart

S&P 500 Weekly Chart