HILL AND STREET NEWS

YOU'VE HEARD IT BEFORE -- BUY LOW, SELL HIGH AND PROTECT PROFITS

2009-09-09T09:25:00.001-04:00

Here at Hill And Street News, we have written that our stance was to ease into gold when the prices were right – and then to take profits along the way as gold moved higher. It is a stance that has worked.

But when things are going right, there is always the tendency to get cocky. It is impossible to know precisely how far folks will carry individual sectors or the market in general to the upside or downside because emotions are such a huge factor. But the goal must always be to remain watchful over true economic facts (and we believe that US economic problems are not all solved – the farther the US dollar falls and gold soars, the greater the negative impact on our nation’s economy) and to try to anticipate what will happen in the future, all the while taking advantage of current opportunities – acting when prices are right, taking profits along the way.

We believe that it would be a mistake to pump serious money into such an extended market when economic problems are not yet all fixed. But we will continue to look for long-side opportunities – easing into them at the right prices and taking profits along the way.

IMPORTANT READING

2009-09-08T09:35:00.001-04:00

UN PANEL TOUTS NEW GLOBAL CURRENCY RESERVE SYSTEM, Breitbart

UN SAYS NEW CURRENCY IS NEEDED TO FIX BROKEN 'CONFIDENCE GAME', Bloomberg

U.S. DISPLACED BY SWITZERLAND AS MOST COMPETITIVE, Bloomberg

CHINA ALARMED BY US MONEY PRINTING, Telegraph.co.uk

UN WANTS NEW GLOBAL CURRENCY TO REPLACE DOLLAR -- IMPORTANT READ

2009-09-08T09:12:00.003-04:00

The dollar should be replaced with a global currency, the United Nations has said, proposing the biggest overhaul of the world's monetary system since the Second World War.

U.N. WANTS NEW GLOBAL CURRENCY TO REPLACE DOLLAR -- CLICK HERE TO READ

AFTER THE LABOR DAY WEEKEND

2009-09-08T09:00:00.003-04:00

Friday closed at around the best levels of the day. The S&P 500 remains technically okay, although the move higher on lighter volume following the bigger volume move lower could be a warning sign.

But the larger picture will be the G-20 meetings, including who holds the positions of leadership and the chatter around the continuation of the US dollar as the world’s reserve currency. There is a lot that can impact currencies, a lot that can impact the US dollar. That's all important.

Over the really, really long-term, we like silver and gold. But talking “now,” we have believed it prudent to incrementally take profits along the way up. In the markets, remember, once again, that the trend is your friend until it is not. And there always comes a time when the wind shifts the other way.

We believe that over the really, really long term, gold will go higher – but this is looking way ahead. And we believe that crude oil will go higher too.

But what is critical is “now” – making the right moves now to increase profits and to hang on to those profits. So we watch the winds and make small moves accordingly. Even if we believe in "higher" way down the road, there is time between now and then -- and market can go considerly lower before it goes higher again. There are the yellow warning flags that must be watched -- so we want to make the right moves now to be in a better position for some time down the road.

WEEKEND READING

2009-09-05T08:12:00.008-04:00

WALL STREET PURSUES PROFIT IN BUNDLES OF LIFE INSURANCE

TELECOM MARVELS, OCRegister

WHY DO INVESTORS SIT TIGHT IN 401(k)s?, Wall Street Journal

RETHINKING STOCKS' STARRING ROLE, The Wall Street Journal

CAREFULLY EXAMINING THE FED'S ACTIONS, The Wall Street Journal

WARNING: THE DEFICITS ARE COMING, The Wall Street Journal

HOW AND WHEN WILL THE GLOBAL CRISIS END?, cnbc

ECONOMIST SEES SLOW RECOVERY, The London Free Press

GOLD WARNS OF DOLLAR WEAKNESS, Incredible Charts

A SEPTEMBER FOR GOLD, Mineweb

FRIDAY -- WITH A HOLIDAY WEEKEND AHEAD

2009-09-04T08:47:00.000-04:00

Most of yesterday was quite flat – but that squeeze that we mentioned as a possibility happened during the final hour yesterday, giving the market the kind of strong finish that we have seen often over the past few months. Although volume was not heavy, the Bulls were able to finally get something going.

“The U.S. jobless rate in August jumped to 9.7 percent, the highest since 1983, and employers cut another 216,000 jobs, highlighting threats to consumer spending,” reports Bloomberg.

Trading may be choppy today -- given the strong finish yesterday, the Bulls may be able to take the market higher today. But remember, too, that if there is a gap up, it can also fade. So keep a vigilant eye.

We will be watching the market winds closely – still sticking to the pattern of small moves. The holiday weekend generally means that many traders and investors are off for some fun with family – and light volume can lead to some whippy action.

THURSDAY, KEEPING A SHARP EYE

2009-09-03T09:36:00.001-04:00

After some pretty ugly action lately, the S&P500 did give up a bit more yesterday on above average volume – with major Indices finishing just a bit off their worst levels. Over the past few days, strength has been sold. But, still, there has been no real technical damage and uptrend remains intact. There has been no evidence that the dip buyers have gone away. And it appears that there will be a higher open today.

We have often spoken of our keeping an eye on the precious metals, believing that gold could reach about $1,000 an ounce. And the goldminers have performed as expected.

We will sound like a broken record – but, once again, we believe that it is important to keep an eye on the $USD. The dollar has been showing weakness, and the thought is that investors have been looking for the safety of gold.

We will watch whether this morning strength gets sold – and there is always the possibility of a squeeze here.

Be careful out there.

WEDNESDAY -- COMPUTER PROBLEMS FIXED

2009-09-02T09:53:00.003-04:00

Yesterday was a rather ugly day as traders once sold good news -- and there was huge volume into the close. Financials were hard-hit as folks showed their concerns about the real health of banks. Commodities go hit with the exception of precious metals. And while the S&P 500 remains in its uptrend, this was still all of this action was worrisome for the Bulls.

At Hill And Street News, we have had an uneasy feeling about the market for weeks. We believed that at minimum, the market needed desperately to consolidate. But we have also been concerned about economic problems that remain unsolved.

Is this the consolidation that we have needed -- some profit-taking was destined to happen. Or is the market actually showing some more serious deterioration here? The huge volume off highs hints at institutional selling which is a bit worrisome. But technically the market is still in an uptrend.

We still believe that any moves should be small as we wait for better signals of where the market will go from here. Be careful!

FRIDAY -- TECHNICALLY ALL IS WELL, BUT WE WATCH THE MARKET WINDS

2009-08-28T08:42:00.001-04:00

Yesterday the major indices were relatively unchanged – and some folks were looking at defensive names. Hmmmm. Anyway, in looking at the charts, there is no real evidence of the market rolling over, and the S&P500 is technically okay.

We have been calling for consolidation – some of that gentle churning action. And, indeed, the market has been churning this week which is a good thing. But we still believe that there needs to be further consolidation for the market to make any significant move higher.

And, quite honestly, having said all of that, we still cannot get from the back of our minds that those nagging economic problems are not all solved – and eventually such things at some point always seem to come back to haunt. It is our belief that the picture is not as rosy as some folks would like us to believe.

Once again, it seems that the right thing is to take advantage of opportunities when we see them.

And it seems the right thing is to keep an eye out there always sweeping, looking for the moment when folks start to worry significantly that the market winds will shift.

THURSDAY -- LAST LAZY DAYS OF SUMMER

2009-08-27T10:05:00.000-04:00

While the market has been getting some pretty decent news this week, but hasn’t soared off the news – that does not necessarily mean that the Bulls are losing control. Players are still searching for trades, and the trend remains with the Bulls.

However, having said that, we still believe that there are plenty of critical economic problems remaining to be solved – and, in the end, unless they do get quickly solved, at some point they will be a focus again.

The market is acting a bit tired – which makes sense. But some sectors have still been attracting attention and action, such as the biotechs.

At the moment, we are enjoying summer days – and will be on heightened alert for signals of which way the wind is going to blow. It is hard to sit on hands and, while we believe some rare good set-ups can still be found, we are not eager to be doing anything too gingerly. There will be opportunities – and, quite frankly, we want prices to come to us.

PROTECTING GAINS IS ALWAYS A GOOD THING

2009-08-26T08:58:00.000-04:00

The reappointment of Ben Bernanke as Fed Chairman and a better-than-expected consumer confidence report prompted folks to move the major Indices to the highest levels of the year – before later giving up some of the gains. However, the action was decent – and the dip-buyers once again were hanging around.

Thus far the market seems in decent shape – and the Bulls are still in control.
However, we believe in keeping a sharp eye out there – and think it prudent to tighten stops and be rather ambitious in protecting gains.

THE TREND IS YOUR FRIEND

2009-08-25T10:26:00.003-04:00

The US markets moved higher in early morning trading yesterday, but the gains slowly disappeared when traders decided that it was time to take some of their profits off the table.

Ben Bernanke will have a second term as Chairman of the Federal Reserve, and the market, of course, always likes continuity. This plays into the hands of the Bulls who have already been having a lovely time lately.

Stocks are extended, in need of some consolidation – so it seems wise to take some profits and enjoy some of these last days of summer. It is difficult to put too much money to work when we believe both that the nation’s economic problems are not all solved – and the market is extended to the upside.

But the trend is your friend until it is not, and currently the trend is with the Bulls. So the winning hand has been to stay with the trend – remembering that the market can continue in a direction much longer than anyone expects. Folks who have stayed on the sidelines have been left out of the “trend is your friend” rally.

Our view, as we seem to say daily, is to look for good chart set-ups, making small moves and taking profits along the way. There seems no reason to stay entirely out of this market. But it will pay to not get cocky – to remain vigilant. While it might not happen quickly, at some point the tide will turn, and it is never fun to watch profits go away. And the number one rule has always been to protect profits.

THE BULLS STILL HAVE IT THEIR WAY

2009-08-24T09:18:00.005-04:00

The market closed out the week rocketing to fresh new yearly highs after a better-than-expected existing home sales report. This was a big win for the Bulls! It certainly felt great, but, of course, now we are faced with the problem of finding new set-ups.

So we will be looking for those set-ups while remaining vigilant over recent gains. Despite believing that a correction will come, not not knowing exactly when that will happen -- our thought is to take advantage of the good set-ups and to contine to take gains along the way. Jumping out of positions a bit too early is far better than staying in them too long.

Some notables: Traders have been selling the China and India US-traded ETFs -- and the market is at levels where, if it does not churn for a bit, traders might begin to take some profits. And, as we have been saying for quite some time, the $USD remains a real key and it will be prudent to keep a sharp eye on it!

WEEKEND READING

2009-08-22T14:40:00.006-04:00

WHITE HOUSE TO BOOST 10-YEAR DEFICIT FORECAST TO $9 TRILLION

WHEN THE RICH GET POORER, LOOK OUT BELOW

SMALL INVESTORS FACE BIG HIT IN ETF PUSH

EX-UBS BANKER GETS MORE THAN 3 YEARS IN PRISON

TOYOTA COROLLA STILL CASH FOR CLUNKERS TOP SELLER

GADDAFI EMBRACES LOCKERBIE BOMBER AND THANKS HIS 'COURAGEOUS FRIEND' GORDON BROWN FOR RELEASING HIM

U.K. SAYS AL-MAGRAHI RELEASE NOT LINKED TO TRADE PACK

OBAMA UNDERWRITES OFFSHORE DRILLING. TOO BAD IT'S NOT IN U.S. WATERS

CHINA TRAIN MAKER WINS APPROVAL FOR SHANGHAI IPO

RIO'S SORE SPOT, LOWER SPOT PRICES FOR IRON ORE HIT THE COMPANY'S REVENUE IN THE FIRSDT HALF. WHAT WILL TOMORROW BRING?

WOES ARE INCREASING, THE LOCKDOWN OF CONTINENTAL FLIGHT 2816

FRIDAY -- EYEING PRECIOUS METALS AND MINERS

2009-08-21T09:31:00.004-04:00

On Thursday the S&P500 closed at its third highest level of the year – and the Nasdaq posted solid gains. The gains actually took the U.S. market ahead for the week despite what was a pretty ugly Monday.

For the past half-year now, buying pull-backs and dips has paid off and it appears that it will take some unexpected bad news and/or perhaps some failed bounces to change this market mode. Of course, though, our readers know that we believe that economic problems are not all solved – so that there is always the potential for some bad news to emerge.

But right now the Bulls remain in control, seem pretty happy and can claim that trend that is your friend -- so we will continue to look for chart set-ups and be involved in small ways, with a particularly watchful eye on those overhead resistance levels. We are eyeing some precious metals and miners.

THURSDAY -- BULLS STILL IN CONTROL FOR THE MOMENT

2009-08-20T10:02:00.002-04:00

At the closing on Wednesday major indices had made solid gains that, together with the prior day's gains, took the market back to about flat for the week. Dip buyers were doing their thing, and the Bulls showed that at least for the moment they remain in control. Most sectors were higher, with greatest gains in energy, health care and basic materials.

We still suspect that there will be more of a correction before too long, but for now the Bulls have control and that must be acknowledged and respected. The trend is your friend until it is not. And we are keeping a watch for such things as lower highs.

In the meantime, we continue to look at charts for set-ups -- and among those that we are looking at are INFY, JNPR and BCRX.

WEDNESDAY

2009-08-19T09:54:00.003-04:00

Yesterday the market experienced a decent bounce after two days of poor action. Deere announced lower revenue and profit, but, of course, the numbers beat estimates. That's just the sort of thing that has been happening lately. Volume was not surprisingly light, and while gains did not make up for the ground that had been lost, the dip buyers showed that they are still around.

To speak up on the Bulls side, the S&P 500 has thus far held above 975. The dip buyers are still around and wanting to participate. So far the best that the Bears have been able to pull off have been a couple of down days in a row. And the analysts continue to move the market higher with upgrades of some general favorites.

So until the wind switches direction, it makes sense to look for opportunities -- good set-ups -- and try to take advantage of those opportunities. But until we develop greater confidence, our moves are small and we take some profits along the way.

TUESDAY -- WATCHING FOR SIGNALS

2009-08-18T10:49:00.000-04:00

Major indices and sectors other than health care providers ended yesterday miserably. Financials, precious metals and resources suffered the most as folks shifted their interest to more defensive sectors.

While market action never reached a panic, this time the dip buyers were absent, either vacationing, asleep or simply refusing to participate. Of course, we have been expecting this for a while. It was due.

For now, it seems prudent to watch for real signals as to which way the wind is going to blow from here. We will watch to see whether upward action draws sellers taking profits – or whether this ends up being viewed as a buying opportunity. But, as we have said, there is still room to the downside before any real technical damage is done.

WHAT WILL THE DIP-BUYERS DO HERE? WE ARE WATCHING.

2009-08-17T10:21:00.001-04:00

Recently we have issued frequent reminders that the market would likely offer better set-ups and better opportunities down the road – which seems to be coming to fruition.

Traders took some gains on Friday, though the market finished off the worst levels of the day.

Today, though, traders were met with some pretty atrocious action in the international markets. And folks are talking about recent weak US economic data.
But the market had recently soared and was, in our humble opinion, in need of a pull-back. And even with some recent churning action, we have felt that the market was overbought, extended to the upside.

It will pay to watch what the dip-buyers do here, but this is just the kind of action that we need to bring sanity back into the markets and provide those decent set-ups that we have been speaking about.

2009-08-15T16:08:00.002-04:00

WEEKEND READING -- DIFFERENT THIS TIME

2009-08-15T10:12:00.007-04:00

The weekend reading is slightly different from usual -- less about news; more about some people's thoughts -- some things to ponder whether you agree or not.

Are Markets Being Manipulated, Green Faucet

Collapse in the Wake of the Fed’s Wall Street Bubble?

The Rich Get Richer And The Poor Get…Fired by Henry Blodgett

No Such Thing as Riskless Venture Capital, The Wall Street Journal

What’s Chinese for .limitedgovernment?, Wall Street Journal

Why Today’s Stock Markets Are All About Confidence and Gullibility, J. S. Kim, Seeking Alpha

U.S. and China: Dollar Dumping Is Not the Real Worry, Simon Johnson, Seeking Alpha

Recession Is Over: Long Live Depression, Seeking Alpha

FRIDAY -- PERRY COMO STANCE STILL IN EFFECT

2009-08-14T10:53:00.003-04:00

Once again, on Thursday the major indices finished the day near the session highs. Volume was light, but the dip buyers were right there doing their thing several times throughout the day. Cyclical sectors had some particular strength -- includding materials and financials.

The market has been seemingly building a base near highs as the trading range of the last two weeks remains. And while many folks argue that the market is extended and in need of a pull-back, the market seldom does what people expect. And a case can be made that recent churning action near the highs could actually set up for a move still higher. Time will tell.

There are no changes in our stance – the Perry Como approach, easy does it.

Be careful out there.

And don't forget about the Weekend Reading tomorrow.

THURSDAY -- THE BULLS STILL IN CONTROL

2009-08-13T09:18:00.004-04:00

Yesterday the Bulls had complete control. The dip buyers proved that they are neither sleeping nor on vacation -- not quietly going away. Stocks were bid from the open, and after the Fed announcement the market moved higher, although closing under the highs of the day. But the major indices were more than 1 percent higher after two consecutive down days -- and recent churning action, of course, has allowed the S&P500 to at least work off some of the overbought conditions.

As we all know, the trend is your friend until it is not. And the trend so far remains as it has been – with the Bulls.

But the Bulls should not get cocky. The economic problems have, unfortunately, not all gone away.

We will continue to look for charts, making small moves and taking profits along the way. We believe that this is not a time to be jumping into the market with both feet, trusting whatever the talking heads on tv say. It seems a time to study charts, make small moves where charts look right – and continue to take some profits to be prepared for another day.

WEDNESDAY

2009-08-12T09:29:00.002-04:00

Yesterday’s trading session stood out because the sellers were in control and the dip buyers seemed either taking a snooze or having left for vacation. Easily the biggest losing sector was the Financials.

While yesterday's action was negative, things can turn on a dime and the action does not necessarily mean that the dip buyers are now giving up.

But we have been saying that the market needs to digest gains and work off overbought conditions. And, quite honestly, the market can move lower without seeing any real technical damage.

The FOMC news may give the market more action today – but whatever the market reaction, we would wait for things to settle before taking the move too seriously. Be careful out there.

HILL AND STREET NEWS' STANCE

2009-08-11T09:34:00.006-04:00

Yesterday was what we have been talking about – a bit of a pause. Some consolidation is just what the market needs. And while the week was off to a slightly negative start, dip buyers once again showed their confidence – or fearlessness – and stepped forward during the final hour, preventing the market from finishing at the worst levels of the day.

There is not a whole lot to say that we have not already said before, but reminders seem in order given that we have some new readers.

Yes, the market has been in need of a pause. But to think that a pause is all that we believe that we need to confidently jump into the market with both feet is not correct. Our large belief is that many of the critical economic problems have not gone away. They are not yet solved. And until we feel greater confidence that solutions are in place and working, we will remain particularly vigilant.

Based on the above, our own belief is that shorter-term trading is more in order – with profits definitely taken before they go away.

Our eyes are focused everywhere – on the news, action in the global markets, the $USD, etc. Pretty much everything has a cause and an effect -- and we are keeping that in our minds.

AMERICAN IDOL AND PAULA ABDUL, CKX AND 19 ENTERTAINMENT

2009-08-10T19:08:00.003-04:00

With a family that has enjoyed watching several seasons of American Idol, we took a fun adventure into announcements of connections of the popular television show, keeping in mind some of the drama taking place lately regarding Paula Abdul's departure from the show.
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American Idol creator Simon Fuller’s company 19 Entertainment announced the acquisition of a 51 percent stake in UK-based Storm Model Management Ltd, the agency that’s roster includes models Kate Moss, Jourdan Dunn, Lily Cole, Cindy Crawford, Eva Herzigova, Carla Bruni and Emma Watson.

Of course, this announcement comes just weeks after 19 Entertainment and its parent CKX agreed to a $45 million deal with Ryan Seacrest that keeps him as host of its popular American Idol television show and apparently working on other projects. And it comes just weeks after the Idol executives and Idol judge Paula Abdul agreed that she would leave Idol – reportedly because an agreement could not be reached on a salary for Abdul.

Apparently Fuller and Storm’s owners have spent more than a year working the deal expected to “create new joint entertainment platforms for its talent, as well as developing the Storm brand in new and exciting directions.”

“With 19 moving more into the world of fashion and style, the opportunity to join forces with Storm … was irresistible,” commented Fuller. “Together we can push the boundaries, blur the lines and redefine what a model agency should be in this fast-moving world where fashion is playing an increasingly important role in setting and reflecting culture and tastes.”

19 Entertainment also revealed that its growing fashion portfolio includes a joint venture with Fashionair.com, Victoria Beckham’s critically acclaimed dress collection which sits alongside her denim and sunglasses lines, a multimillion-dollar fragrance partnership with Coty, and a joint venture with designer Roland Mouret.

CKX reported that the “deal is a continuation of (its) mission to form partnerships with high-value entertainment companies or individuals” – and lists among its current roster Muhammad Ali Enterprises, Elvis Presley Enterprises, David Beckham, Victoria Beckham, “American Idol” and “many others.”

Also, in a separate financial announcement today, CKX chairman and CEO Robert Sillerman said, “I am pleased at where the company sits at this time.”

SKX, for the six months ended June 30, 2009, saw revenue increase to $161.0 million from $153.7 million for the comparable period in 2008, according to the report. Operating income is listed as having declined from $45.3 million in 2008 to $34.8 million. And the 2009 results were said to include a “non-cash swing of $6.0 million in foreign exchange losses, as well as %5.8 million in unusual one-time costs.”

However, skipping to comments on American Idol, the report reads, “Revenue was flat at 19 Entertainment as new television programming offset declines in American Idol. The decrease in revenue attributable to American Idol was due to reduced foreign syndication revenue, lower ratings bonuses and weaker on and off air sponsorship revenue resulting from the global recession.”

“The predictability of our core business permitted us to more than double our development budget for 2009,” commented Sillerman. “With American Idol increasing its lead among the key demographics to unprecedented heights, with So You Think You Can Dance beginning an additional season in September of this year, with attendance at Graceland running ahead of last year in this quarter and with the Las Vegas-based Cirque du Soleil show on track to open at the end of this year, the base of our business continues to be solid. With others cutting back on development, we anticipate greater opportunities in both Television and Internet opportunities.”

19 Entertainment CEO Simon Fuller said, “I could not be more excited by the diversity and quality of our forthcoming projects. With the decision to invest more time and resource into a strong development programme, this initiative is now beginning to bear fruit. We are negotiating new TV shows in reality, comedy, drama and music, including an intriguing multimedia show that will push the boundaries of television, the Internet and live events. With our Sport, Fashion, Music and online presence also growing, 19 and CKX have more new initiatives than ever before.”

19 Entertainment, a wholly owned subsidiary of CKX, Inc., has relationships and partnerships with “some of the biggest names in sports, music and fashion, including David Beckham, Victoria Beckham, Carrie Underwood, Kelly Clarkson, Daughtry, Claudia Schiffer, Roland Mouret and world tennis No. 3, Andy Murray.”

MONDAY MORNING

2009-08-10T10:15:00.003-04:00

The bulls have been in control – unrelentingly so it seems. Stocks have made tremendous moves to the upside, and there has been little or no time to digest gains and consolidate. Just ahead of the jobs report, it appeared that there might be some of the needed digestion, but all that disappeared once the report was released. And although a number of charts are now looking technically improved and presenting better set-ups, we still feel the need for some consolidation. But, of course, the trend is your friend until it is not – and the trend has favored the Bulls.

Perhaps with this being summer and some of the earnings season hoopla behind us, things will quiet down – perhaps until just before Labor Day. Typically summer is quiet, but more volatility comes into the market in September and October. And while the G-20 meeting is more than a month away, it is still there in the back of our minds.

Our thoughts are that gold can go a bit higher, but we are not trusting financials – and expect that we will soon see weakness in energy and basic materials.

WEEKEND READING

2009-08-08T11:00:00.008-04:00

YOU WILL NOT WANT TO MISS THESE

The Credit Crisis: The Largest Outlay in American History, Barry Ritholtz

Despite Bailouts, Business as Usual at Goldman, The New York Times

Man vs Mutt, WSJ

Lawmakers' Global-Warming Trip Hit Tourist Hot Spots, WSJ

Todd Harrison's Memoirs of a Minyan, MarketWatch

CHINA/INDIA

More access to press 'legacy of Games', China Daily

Monetary policy to remain unchanged, China Daily

Shanghai Stock Exchange prepares for foreign listings in 2010, theaustralian, WSJ

Lenovo cuts Q1 loss on China growth; outlook cautious

US distributors deny Chinese tires disrupted market, China daily

Coal India: Need to Hike Domestic Prices, WSJ, India

JOB LOSS RATE DROPS TO 9.4%

2009-08-07T09:05:00.002-04:00

Yesterday the S&P500 hit a high for this year shortly after the open and then continued to sell off and eventually close in the red. Sectors remain overbought, but we still have yet to see any real technical damage – simply a bit of caution about consumer spending and the upcoming jobs report that will garner headlines and attention. Folks were expecting job losses of about 275,000 – 300,000 with unemployment rate rising to 9.7 percent.

US nonfarm payrolls declined by 247,000 in July (after 443,000 loss in June) the Labor Department reported today -- and the unemployment rate surprisingly fell from 9.5 percent to 9.4 percent. Once the numbers were released, the market immediately reacted positively seeing it as a turning point in the recession.

As always we remain on the lookout for great looking charts, but still feel that the market needs to at least churn for a bit to work off recent gains before moving higher.

2009-08-06T16:59:00.000-04:00

Web Log Directory

WATCHING AND WAITING

2009-08-06T09:45:00.000-04:00

The major indices once again are pointing to a higher market open.

Financials and materials were the winners yesterday. Industries that were weakest were the very ones that generally take the market higher including oil services and biotechs. And breadth was slightly negative – with the large volume early indicating that possibly players might be thinking about taking some profits. Retail investors seemed uneasy – perhaps worried that consumers, once again in July, were in “cutting back” mode.

The $USD gave back the prior day’s gain, but while the $USD may continue to slide to a new cycle low, our expectation it will not move significantly lower.

So far, though, the trend has continued to be “friend,” and we continue to look for charts with good set-ups, watching and waiting. A few that we are watching are GROW, PAAS, FSUMF, KONG and SIGA.

WATCHING AND WAITING

2009-08-05T10:27:00.001-04:00

How many times have we stressed that our eyes are glued on the $USD? – which we believe will probably not fall too much further from here.

The $USD, in our minds, has been and remains a key! And thus far, our stance on $USD/precious metals action has been spot on.

The Bulls have continued to maintain their control – and, as we have frequently said, the trend is your friend until it is not. And buyers have stepped up to take advantage of dips.

But an ever increasing number of charts have moved into further and further into overbought territory – with risk escalating while the number of decent chart set-ups has been diminishing. Definitely it seems prudent to keep an eye focused on market direction, especially following the first hour of trading – to keep another eye on the international markets.

For the most part, we are sitting on our hands. The risk/reward is not what we want here – and, other than quick trades, it seems best to wait for set-ups that we believe in that will likely occur down the road.

FUTURES INDICATE LOWER OPEN

2009-08-04T09:27:00.002-04:00

Futures are indicating a lower open – not unexpected by any means. Personal incomes in the U.S. have reportedly decreased by 1.3 percent, the largest decline in four years.

But yesterday – what an amazing day! The ole Bulls had themselves a big one, thanks to a plunge in the $USD, escalation of international equity indexes and a better than expected reading on the US ISM index. And a Ford Motor sales increase helped too. Each of the major indices, in the end, closed at new intermediate highs.

But the underinvested Bulls and the Bears who invested short have been feeling pretty darn ill as they have day after day watched this market soar. And one after another the pain has felt heavy and huge, and they have been jumping aboard the momentum train speeding further and further into overbought territory, hoping to collect at least some quick trading profits before the train ride is over. Of course, the number of charts with decent entry points have become fewer and fewer, making it ever more difficult to find ways to participate.

We at Hill and Street News have participated in the market for quite some time, felt no need to jump into high-risk moves – and are growing ever more concerned as the need for consolidation continues to escalate. We are, as probably are most folks, keeping an eye on the late 2008 resistance level. And, too, we are not forgetting that all of the problems that drove the market lower have not gone away – and even most companies that reported better than expected earnings did so largely based on lowered expectations.

KEEPING A SHARP EYE ON $USD

2009-08-03T14:04:00.005-04:00

We wanted to make certain to mention that we are keeping a sharp eye on the $USD since it is a real key!

Although we have mentioned the importance of following the $USD over and over again, especially with respect to commodities, it seemed worth repeating again here!

BACK IN THE SADDLE AGAIN

2009-08-03T10:13:00.001-04:00

The past week flew by, as all vacations tend to do, but it also feels good to get back to business again.

Without a doubt, the market has been strongly in Bull mode – and as we have said many times, the trend is your friend until it no longer is. And when the trend is as strong as we have seen recently, fundamentals matter less than the trend. There is little doubt that the market is extended and in need of some consolidation, but there has been little to show that the momentum is slowing. Putting money to work has been more and more difficult because, simply, there have not been pullbacks and consolidation.

But we do believe that the market is increasingly becoming more vulnerable. We are not trusting, and will continue our stance of making tiny moves to the upside – taking some profits as they occur in order to protect profits. While it is possible that the excesses can be worked off over time, our sense is that there will come a time of the kind of entry points that we look for.

Some of our other thoughts are that there may still be some room to the upside in precious metals. But, should gold move to $1,000 an ounce, we will, at least for a brief time, become sellers.

It is good to be back at our desks, and we will spend today getting caught up on reading.

FRIDAY -- FUTURES POINTING TO LOWER OPEN

2009-07-24T09:05:00.002-04:00

Thursday’s trading was strong as cash flooded in and all three major indices leapt to their best levels in months – stocks closing just off the session highs, the S&P 500 and Nasdaq rocketing. Earnings reports have been flooding in, and pretty much they have been okay (but keep in mind that very often this has been due to cost cutting, rather than real revenue growth). Crude oil was considerably stronger. And it seems Dow Transports have broken out.

Asian stocks have now risen for the ninth straight day -- and European stocks enjoyed their longest rally since 2006.

There truly has been a sense of euphoria as more and more folks have joined the camp of believers who think that they must get long or be left out.

There is no way to precisely know when this euphoria will wane, but we do expect that there will be a pullback – and that with patience, there will be better entry points. Should the market continue higher, we will continue to take bits of profit, raising cash for the better entries.

Also, with a longer term view, we keep in the back of our minds the fact that interest rates will rise -- even Federal Reserve Chairman Bernanke has said that. And as interest rates rise, borrowing costs will be higher for the U.S. government – which in turn will slow economic growth. So we believe that there are challenges ahead that will impact the market – and it is too early for dancing Bulls because we are not entirely out of the woods yet.

An additional note: Our office will be closed during the next week for our annual summer break. We will be back posting again on August 3rd – (already looking forward to getting back into things again). It is always hard to walk away from the market for even a day. But some of my children scheduled their own vacations to spend time with my husband and me, and I'm really looking forward to enjoying time with them. They are, after all, what it is all about. And truly everyone here deserves a break, a chance to do what is personally important to them. In the end, it is a good thing because we will return refreshed and ready to deal with what is at hand.

THURSDAY, FUTURES INDICATED HIGHER

2009-07-23T09:27:00.005-04:00

Yesterday the major indices ended mixed, but dip buyers were not backing away – still actively doing their thing. The Nasdaq posted some strong gains with semiconductors, consumer discretionary and retailers quite strong. Apple obviously had an impact. And less than an hour before the opening bell, the futures are indicating a higher open.

Yes, the news for the most part has remained pretty much okay. The trend is clearly higher, and as the saying goes, the trend is your friend. But day by day more and more chart entry points are simply getting harder and harder and harder to find. With three "harders," point made. Charts that are interesting are basing near highs -- a look rather like ARTG.

If any of those Bears decided to buck the consensus of the pow wow a few days ago and, instead of chasing higher, decided to bet short -- they have undoubtedly been feeling the pain and may very well be getting squeezed.

At the moment, we are pretty much market wallflowers – except for a tune we cannot resist, we are sitting out the dancing. We have positions on the long side that we are already in, but are not buying new or adding to many longs here. We always have been first about protecting our gains – and the risk/reward simply is not calling us onto the dance floor at this point. We simply don’t mind standing around the punch bowl and watching other dancers – until the conditions are right and they are playing our kind of music for dancing. As overbought conditions get worked off, the dance floor will once again look more inviting.

WEDNESDAY -- BANKING REPORTS RAISING SOME CONCERNS

2009-07-22T09:34:00.004-04:00

Today, Wednesday, will likely be all about earnings – and about an hour before the open, the Dow, S&P 500 and Nasdaq were all indicating a lower open.

Apple, in early morning action, though, was indicated higher based on a 12 percent gain in sales and a 15 percent increase in third-quarter profit. Apparently after cutting prices in June, sales of Macs skyrocketed.

But banking sector earnings were were raising some concern. Morgan Stanley reported a third straight quarter loss that was worse than analysts expected – thanks in part to costs to repay the U.S. government. Wells Fargo reported second-quarter earnings that rocketed 81 percent for a new company record, but shares were lower based on worries that loan troubles are persisting. Bank of New York Mellon reported that it second-quarter earnings dropped 43 percent -- and SunTrust Banks reported a loss on increased credit costs.

Yesterday the market, after pulling back in the morning, posted a seventh straight day of gains -- all major Indices ending higher. Healthcare performed well, and there was weakness in Financials, likely because of the slew of earning reports due.

We are focused now, after the big run higher, on risk management – and believe that good setups will occur. We are looking at oils – and when the right opportunities are there, gold.

GOOD ENTRY POINTS ARE KEY

2009-07-21T09:33:00.006-04:00

Yesterday, quite honestly, we were at least a little bit hoping that the market would hardly budge one way or the other. After last week’s gains -- many charts had shifted from oversold to overbought territory, and it seemed safest for the market, or the minds of the players, to simply work off the gains to create a better atmosphere for a move higher without hesitation or thoughts of too much too fast.

But yesterday some players were chomping at the bit to get into the action and during some brief dips, they quickly stepped up to take advantage. The S&P 500 closed near the high of the day. Consumer discretionary stocks enjoyed some nice gains and, not unexpectedly, there was some weakness in the defensive sectors.

There have been some positive signs lately – and as long as reports come in okay and there is no unexpected fly in the ointment, the market seems in pretty decent shape.

Having said that, though, our minds are unchanged. We do still anticipate that at some point here gains will need to be digested. And that should create some better entry points than we are seeing now.

Patience is generally rewarded -- and we expect to remain patient in waiting for those good entries.

ARE THE BULLS BACK IN CONTROL?

2009-07-19T23:26:00.009-04:00

Last week was a pretty nice week for the Bulls. The S&P 500 held the 880 support level -- closed on Friday having held onto the gains of the previous four sessions. On the whole, earnings reports were fine. The tech sector that we predicted would be a leader indeed was a leader -- and, of course, many sectors enjoyed nice gains. Resource stocks finally escaped from No Mans Land, primarily because of China. And at the bear's pow wow, the bears felt sufficient fear that they decided to jump in and chase prices higher.

But here we are -- another Monday, another start to a new week. There have been some encouraging signs recently, including some positive signs in the financial sector. Sentiment now seems improved. And a whole lot of charts are technically improved as well, although very few are what we would term screaming buys. Many actually went from being oversold into now overbought territory. So the question is -- will the market roll over, or will the Bulls make a push higher? Will the S&P move back up to the high of the year? Until we feel more comfortable about the answers, our moves will remain tiny.

But it does seem that the winds are favoring the Bulls. And with the already reported decent earnings reports, those Bears may very well be too frightened to get too close to the betting-short bonfire, not wanting to get burned again.

And today there is news that CIT may get a chance to restructure its debt outsie of bankruptcy.

After the gains of last week, it seems that it would be nice simply to see the market rest for a bit, digest gains, develop some nice buying patterns and then move higher again.

We have often mentioned keeping an eye on gold -- watching for further weakness in the $USD, and looking to add to gold stocks when the prices are right. No changes there. Some of the chemical types have some decent set-ups.

WEEKEND READING

2009-07-18T09:10:00.018-04:00

UNITED STATES

House ethics committee opens 15 new cases, thehill.com

Robin Hood Tax Policy, forbes

Takeover opportunities grow for House Dems, thehill.com

U.S. Weighs Special Team of Terrorism Interrogators, WSJ

Obama Challenges Black Community to Set High Goals, Bloomberg

Labor in the driver's seat, Jewish World Review

F-22 -- An Essential National Security Asset, Human Events

U. S. HEALTH CARE

House Panels Approve Health Plan With Tax on Wealthy, Bloomberg

Schumer Says CBO 'Wasky' on Health Cost, Sees Passage, Bloomberg

Obamacare: The Cost-Cutting Delusion, Forbes.com

Taking a scalpal to costs, Economist.com

Pay for care a new way, state is urged, hospitals and doctors may be put on budget in MA, Boston.com

CHINA

China's Market Value Overtakes apan as World's No. 2, Bloomberg

Asian Stocks Record Best Week Since May on Recovery Speculation, Bloomberg

U.S. Commerce Secretary: let's get balance right, xinhuanet.com

China becomes world's wealthiest state, Pravda

China's Bubbling Consensus, WSJ

Former Boeing engineer convicted of handing over trade secrets on the shuttle and Delta IV rocket to China

China Clamps Down on Activist Lawyers, WSJ Asia

RIO TINTO/CHINA

Rio Four versus iron will of the state

Rio 'bribery' case shakes foreign groups, ft.com

RUSSIA

Russian economy to continue declining till 2011, optimistc experts say, Pravda

Russia's arms deal with Iran makes Israel acquire F-35 fighters from USA, Prava

Russia's Su-30 fighter to become world's most exported jet, Prava

INDIA

India Designates Sites for U.S. Nuclear Deals, WSJ Asia

India's Biggest Economic Challenge w/comments, Harvard Business

OTHER GLOBAL

West African oil gets boost from Obama Ghana trip, says Gold Star Resources CEO, Scandinavian Oil-Gas Magazine

Miners still drawn to the Democratic Republic of Congo, Financial Post

Anarchy reigns and retail investors are in stocks, The Australian Business

Police tear-gas Iran protesters during prayers, breitbart

FINANCIAL

Panel Probing Financial Crisis Has Wall Street Ties, WSJ

Unwelcome attention, oversight of the Federal Reserve, Economist.com

China can do without US dollar?, Pravda

Banks Should Be Too Good To Fail, forbes.com

Bank profits not as impressive as they seem, Bloomberg

Swiss banks running out of storage space for gold bullion, Mineweb

Cheaper Mortgages Spark Lower FICO Scores for Payers, Bloomberg

Sandard Bank, ICBC look to Africa, Mineweb

Venture Capital Investment Quickens, but Still Down From '08

SECTORS/STOCKS/COMPANY SPECIFIC

With Goldman Sachs bonuses, new push for 'say on pay' bill, Christian Science Monitor

Goldman Sachs bites Uncle Sam's hand, CNNMoney.com

The politics of pipelines, Scandinavian Oil-Gas Magazine

What's next for Google' Android chief, CNNMoney.com

Pickens Said to Seek Investors for Hedge Funds After 79% Gain, Bloomberg

GE's profits almost halve, ft.com

For Intel, Nvidia, Worst Is Over, Says Jon Peddie, eweek.com

Spotify Looke For A New Tune, Forbes

OTHER

Socialist America Sinking, Human Events

Jockey Positions Speed Up Horses

FRIDAY -- WITH A LOT OF INFORMATION TO DIGEST

2009-07-17T09:11:00.009-04:00

Yesterday, for most of the session, the market traded sideways. And then along came Nouriel Roubini to scare the ole Bears right into another big camping pow wow . The economist said that the worst of the financial crisis is over – that the recession might end sometime this year. Some of those ole bears got so frightened of being left out of the market merriment that they simply caved in and joined, pushing especially metals, homebuilders and semiconductors higher.

But today is a new day. There is a lot to think about, a look of earnings numbers and guidance to consider -- and options exp. And never forget that traders are incredibly fickle.

We have a bit of a mixed bag today. An influence on the market today will undoubtedly be GE, which beat on earnings and missed on revenue – and Bank of America, which reported that earnings dropped less than expected. Both premarket were looking weaker. Also, Citigroup, which beat analysts’ expectations, indicated higher.

In view of how far the market has surged this week, weakness is anticipated – but still, the Bulls must be afforded some benefit of the doubt. There are likely going to be some short positions to take here before too long – but it’s never a good idea to arrive at the party too early. A nice rest could allow charts to look more compelling to the long-side. Again, easy does it – we will wait for situations and prices to come to us.

(A reminder -- weekend reading will be posted tomorrow.)

WATCHING THE WINDS FOR DIRECTION

2009-07-16T10:50:00.008-04:00

Going into yesterday, it seemed pretty clear that it would be Intel’s day, likely spilling over into the technology sector – and, in the end, propelling semis to multi-month highs. We got our anticipated short squeeze. The S&P500 posted a good day and the Dow Industrials enjoyed the best gain in three months; in fact, there was a nearly 3 percent rise in major indices on great breadth and volume. After a month of pain, for the Bulls it must have felt a bit like Christmas in July.

And in the Bear camp, leaning to the short side, there had to have been a gathering around the campfire with chatter about waiting to see happens now -- because it is possible that the Bulls’ Christmas could continue toward the yearly high. Gold, which we believe will eventually move higher, stood firmer.

And yesterday financials had gifts under the tree. But we knew that it was prudent to contain gleefulness in front of reports from JPM, BAC, C and GE reports. Today JP Morgan, the second largest bank, reported that profit rose for the first time since 2007, helping to offset rising defaults on consumer loans. But investors are back in worry mode after CIT, running short on cash, says that it will not get a federal bailout. And there are the BAC, C and GE reports.

Yesterday the S&P 500 closed slightly over 930, the peak of the right shoulder, but that raised a dilemma – some stocks, after a few days of gains, became extended and possibly in need of churning for a bit. And some resource stocks, recently in No Mans Land, moved to overhead resistence on light volume – what did the Bears around the campfire decide about that?

What about the fact that Intel’s news was yesterday – and there are wild swings between euphoria and despair? Will the Bears, caught leaning the wrong way, feel too distraught to bet to the short side? What about the extended charts that need a rest? It will not surprise anyone that we want to see which way the wind is going to blow. Until we see clear signals as to the direction and strength of that wind, we want to play the slow game and be certain to play our cards right. It is all about risk-reward, and making the right moves.

WELCOME

2009-07-15T18:41:00.004-04:00

At Hill And Street News, we seem to be gathering a considerable number of new readers -- and wish to welcome all of you to our community. Hopefully while here, together we can share some thoughts, manage the market to our best advantage -- and enjoy some comraderie at the same time. Welcome aboard.

7skwc4bjpz

INTEL SETS THE TONE

2009-07-15T10:10:00.006-04:00

Intel had a beauty of a report, bringing a rise of 7.8 percent in early trading after its revenue forecast topped analysis’ estimates. Just what the doctor ordered, huh? In fact, semiconductors have actually been one of the better acting groups in front of Intel’s report.

“Intel’s results reflect the stabilizing environment,” said CEO Paul Otellini. And while Otellini thinks that US businesses probably will not be shopping for new PCs until next year, he explained that consumers in Asia, especially China, are leading the recovery.

Remember, though, that the market is fickle – and what is giddiness one day can quickly turn to despair with countering news. Some earnings reports may give the Bulls some steam and frighten those troops with short positions based on the head and shoulders pattern and poor action in the resource camp, something that we have been alluding to and something to keep in mind. And even a strong initial showing can get faded – so as always, we will take things easy. And we’ll keep an eye on the S&P 500.

As if we didn’t know, earnings season can be extremely tricky – another reason for careful, slow moves.

The technical traders who placed their faith in that head and shoulders pattern suffered with the change in course. We had already mentioned that there could be that situation of covering short positions. Some traders are always looking for the quick pot of gold, hitting the exact moment that the tide turns – and then they get caught in the wrong camp, but it has always been our stance to move slowly and expect that anything can happen.

Ours is what we call the “Perry Como” approach. No one except old folks may remember Como, but he was a barber turned singer who was famous for his unwavering slow and easy style. My mother was a Como fan, so I grew up with his music. And I think that Como would have been good at doing what we do.

Remember, it is early – there are more reports to come this week. Don't get too caught up in things today -- remember, the market can turn on a dime. We are keeping our wits about us.

TUESDAY -- GOLDMAN SACHS NEWS

2009-07-14T09:34:00.003-04:00

An imputus on trading today will be reaction to the Goldman Sachs earnings report -- which exceeded analysts’ estimates. Expectations had already been high, especially after Meredith Whitney’s call yesterday.

If there is an open sharply higher and then within the first hour a disappearance of those gains, be careful.

Bloomberg reports: Net income in the three months ended June 26 was $3.44 billion, or $4.93 a share, the New York-based bank said today in a statement. That surpassed the $3.65 per-share average estimate of 22 analysts surveyed by Bloomberg and compared with $2.09 billion, or $4.58 per share, in last year’s second quarter.

And that short squeeze that we mentioned yesterday caught folks off-guard. It seems that some traders had theorized that the break below S&P500 880 sent the message that it was time to go short. But as we have been saying all along, this is not a market to be trusted and it is a mistake to assume anything too quickly.

Patience, easy movements and waiting for prices to come to you is the way to collect rewards.

But for as long as it lasts, after four weeks down it felt awfully good to see so much “green” on the screen. But a little bit of green is still no cause for getting cocky and thinking that all is well. At this moment, the bears still have the edge -- until we see otherwise.

We are watching those oversold crude oil and precious metals to see how they react.

The question will be whether yesterday alleviated oversold conditions sufficiently that negative earnings reports will push the market lower, or whether we have worked off enough froth that the market will move higher again. Our thoughts are always the same – we will watch, wait for clear signals and make certain that we feel comfortable about what we do.

EARNINGS SEASON SWINGS INTO HIGH GEAR THIS WEEK

2009-07-13T09:17:00.004-04:00

Futures are pointing to a higher market open on Monday, in part based on encouraging comments from Meredith Whitney who recommended buying shares of Goldman Sachs for the first time since January, 2008.

Friday was essentially a half-hearted trading day, probably a bit due to summer doldrums – but to a greater degree a reluctance to get too involved with earnings season swinging into high gear essentially on Tuesday of this week. Technology, which may well be a leader when the market recovers, performed okay, but all in all there simply was little of note.

In considering the total picture, though, it seems that the Bulls have a tough battle ahead. Recent momentum has more and more shifted in favor of the Bear’s camp across the board. And for the Bulls to defend their current position or even gain ground, they desperately need a whole lot of good ammunition, some very terrific earnings reports.

Cost-cutting measures helped last quarter. The bar is set pretty low with respect to earnings expectations. And we definitely go into this earnings season with the charts really quite mixed – some have held on quite well despite the general market, while others have become tremendously oversold. And speaking of oversold, there may be situations where unexpected positive earnings and guidance will result in short squeezes. Oils and precious metals are, of course, oversold, but they have been in No Man’s Land lately.

So there is the potential for a lot more action this week. Some pretty significant reports are on the agenda. And we will see how the earnings season begins to shape up – and how much of the individual results seem already priced in. Guidance will be critically important.

Some companies to watch that will undoubtedly grab headlines will be, of course, Intel (INTC), Goldman Sachs (GS), and Johnson and Johnson (JNJ) reporting on Tuesday – and Google (GOOG) and JP Morgan Chase (JPM)on Thursday -- and General Electric (GE), which just had a pretty tough week, on Friday.

Be careful – and if you plan to step into the battle, keep a watchful eye on just how the battle is shaping up. If it looks like the enemy is starting to gain traction, be quick to step out of the line of fire.

WEEKEND READING

2009-07-11T07:45:00.002-04:00

This is a longer-than-usual Weekend Reading, but we thought that we would make up for the fact that there was no list posted over the July 4th long weekend.

EXTREMELY INTERESTING

A Goldman trading scandal, Reuters

Ex-Goldman Programmer Described Code Downloads to FBI, Bloomberg

Goldman Sachs profit bonanza could stoke anger, Reuters

Lenders avoid redoing loans, Fed concluded, study cites lack of profit in aiding the distressed, boston.com

A MUST-READ

Dumbing-Down the U.S. Navy (it takes a bit of reading to get to the must-read portions!), human events

Government care a health hazard, jewishworldreview.com

HIGH U.S. INTEREST

G-8 Sets Agenda on Trade, Climate, The Wall Street Journal

House to target wealthy to pay for healthcare, The Hill

China's communist government has used its relationships with prominent Americans to further a propaganda effort aimed at influencing US policies and softening economic sanctions, Washington Times

China speaks with authority at Italy summit, China Daily

China criticises dollar, telegraph.co.uk

GOP hits Pelosi for mouse funds -- $16.1 million in stimulous money, Washington Times

CHINA/RIO TINTO SAGA CONTINUES

China v Rio Tinto, Wall Street Journal

Now China accuses the Rio Tinto Four of bribery as well as spying, Mineweb

Chinese spy row escalates as diplomatic crisis brews, The Australian

Beijing's intimidation, The Australian

Govt: Proof against Rio spies sticks, China Daily

China risks protectionist bonfire over Rio Tinto arrests, Telegraph.co.uk

Rethink follows arrests of Rio staff, the australian news

INVESTING, INCLUDING SECTORS AND STOCKS

Greenback on the back burner, where to invest when dollar is weak, MarketWatch

Bargains among blue chips as retirees sell, Canada.com

A record 43 Chinese companies earned spot on latest Fortune 500 list, China.org

June China iron ore imports second highest ever, Mineweb

Copper and Nickel to Correct says Macquarie Research, National Post

IEA: Global Oil Demand Expected to Rebound Next Year, Rigzone

Petrobras: 100% Success Rate Drilling in Santos Basin's Pre-Salt Layer, Rigzone

WHAT ABOUT TECHNOLOGY?

Goldman says it's time to get offensive with tech, MarketWatch

Cyber Attack Raises Stakes for Tech, TheStreet.com

AND GOLD

World's top 100 gold stocks: a little shabby, but strong enough, Mineweb

Lihir Gold, another major gold miner expressing confidence in gold's future, Mineweb

FOR A CHUCKLE

Oh la la - US President snapped checking out delegate's bum!, Bild.com

Beauty Who Turned Obama's Head Is a Brazilian from Rio, Brazzil.mag.com

OTHER

Michael Jackson: Chinese businessmen build new Neverland on island, Telegraph.Co.UK

Pelosi shuts down resolution on Michael Jackson, Yanoo! News

CHINA -- AN EMERGING SUPERPOWER (Repeat)

2009-07-10T21:42:00.005-04:00

Our article on China, posted prior to the G-8 meeting, had moved off the blog's main page. We were asked if we would repost it -- and are doing so for the benefit of those who did not have the opportunity to read it previously. We also expect to update this in the near future.

CHINA -- AN EMERGING SUPERPOWER

At Hill and Street News, we have been and remain keen observers of what we believe are China’s strategies to become “the” new global superpower. Undoubtedly, our readers have noted our frequent reference to China, notably with respect to its growing political and economic power, its monetary policies and its prolific accumulation of natural resources.

First, it is entirely understood that United States and China have close economic links, particularly since China now holds more U.S. Treasury debt securities than any other country – and, of course, each is the other’s second-largest trade partner. Perhaps instead of speaking of “links”, we should allude instead to China’s huge position of power over the U.S.

To put the near-term economic growth outlook for the United States and China in perspective, consider information from the Washington-based International Monetary fund:
“Developing Asian economies, led by China and India, will expand 4.8 percent this year while the U. S. contracts by 2.8 percent and the euro area by 4.2 percent,” reported the IMF according a June 30, 2009 Bloomberg article titled, Asia Junk Bond Returns Top Stocks, U.S., Europe Debt. But the World Bank late last month raised its forecast for China’s economic growth this year to 7.3 percent and for 2010 it predicts China’s GDP growth will accelerate to 7.7 percent.

So while the Chinese economy is expected to expand this year, the economy of the U.S. is expected to contract.

And now let us glance at that U.S. debt, largely held by China. A June 29,2009 examiner.com article titled “Financial future of U.S. worsens under Obama”, that presents an abbreviated version of a Washington Times article of the previous day, cites that according to the U.S. Commerce Department, foreigners now hold 50 percent of our country’s publicly held debt – or 25 percent of the US national gross domestic product. And then it explains that if those foreign investors, “such as China, significantly reduce their purchase of future U.S. Treasury debt securities, without even dumping their current holdings, U.S. interest rates could soar and the dollar could collapse.”

Further:
“Three decades of massive ‘trade’ deficits have converted the United States from the world’s banker – able to pay any price and bear any burden in the cause of freedom’ – to the world’s largest debtor, utterly dependent on China and other foreign interests,” according to Charles McMillion, chief economist of Washington-based MBG Information Services. “We are so deeply in debt and this money is so liquid that it hamstrings our monetary, fiscal and trade policies. We’ve really mortgaged our financial future.”

And whether you accept or agree with information provided by Sen. Judd Gregg in a June 30, 2009 article at unionleader.com, this information is chilling and at least worth considering.

This article cites Gregg’s belief “that because of Obama administration spending, the U.S. will have budget shortfalls, or deficits, averaging $1 trillion each year for the next ten years.” Later it states that “By the end of the budget period as proposed by the President, the debt will have skyrocketed to 82 percent of GDP, which is not sustainable.” And further, it echoes previous sentiment that if the Chinese, who have already expressed concern about U.S. debt, “start to reduce their purchases of our government securities because of our need to borrow increasing amounts of money to finance all of the spending that the President has proposed, we will have to start offering higher interest payments to potential leaders to make our securities more attractive.”

Without a doubt, regardless of which political or economic leaders are believed, there is sufficient and convincing evidence at every turn that the U.S. is economically in a serious situation.

China, on the other hand, seems to be positioning itself to become “the” superpower – and more and more businesses want access to China’s markets.

Just watching headlines: June 30th, a People’s Daily Online headline reveals, “European businesses wish to invest more in China” – and in the body of this story, “European enterprises believe that China’s economy can recover earlier in the global downturn.” A recent New York Times article revealed, “Bain Capital, an American private investment firm, said Monday that it had agreed to invest as much as $432 million to acquire a minority stake in Gome Electrical Appliances, one of the biggest Chinese retailers.” This was termed “one of the largest American investments in a mainland Chinese company.” These are just a couple of numerous such stories.

Yes, there seems great interest in China, and why not. As Eswar Prasad wrote in a review of the book, The Chinese Growth Experience: A Golden Tapestry, “an economy that has grown at an average rate of about 10 percent per annum for over two decades, has over a billion people, and has vaulted over others to become the third-largest in the world tends to draw attention.”

THE EMERGENCE OF THE YUAN

Garnering considerable recent attention, Li Lianzhong,a senior researcher with the Communist Party, strongly suggested that China should buy gold and US land. “The US is printing dollars on a massive scale,” Li explained, “and in view of that trend, according to the laws of economics, there is no doubt that the dollar will fall. So gold should be a better choice.”

But he also suggested that an additional reason to buy gold is that the metal is considered necessary for an escalation in the role of the Yuan – “that if the yuan should go international or become a reserve currency, China needs more gold to back that.”

Li, who heads the economic department of the Party’s research office, opined that the yuan should become a fifth currency in the International Monetary Fund’s Special Drawing Rights. And he further suggested that it should have an equal 20 percent weighting with the US dollar, yen, euro and sterling.

Within days of Li’s report, the People’s Bank of China issued a statement saying that China expects to request a reform of the international currency system that will make it more diversified.

On Monday of this week, June 29, China and Hong Kong signed a deal that cross-border trade would be with the yuan – seen as a step in increasing the position of the yuan. Governor of the People’s Bank of China in Hong Kong, Zhou Xiaochuan, earlier this year even suggested the idea of the yuan replacing the dollar as the benchmark global currency.

And then today the Financial Post blarred the headline that China wants “to debate proposals for a new global reserve currency at next week’s Group of Eight summit in Italy." Further in the article, “The debate centres on proposals by some emerging powers that an alternative should be found to the U.S. dollar as the global reserve currency, to reflect the shifting balance of power in the globalized economy.”

Seemingly in support of an escalation in the role of the yuan, Russian Finance Minister Alexei Kudrin had previously said, “I think the shortest route would be if China liberalized its economy and allowed the convertibility of the yuan. … This could take 10 years, but after that the yuan would be in demand and it is the shortest route to the creation of a new world reserve currency, and I think China needs to think about this.”

U.S. LAND, OIL AND NATURAL RESOURCES

Li, of course, also suggested that US land is now a better investment for China than US securities. And, in fact, even before his suggestion, the Chinese had started to invest in U.S. real estate. "At the aptly named ‘America Is for Sale Expo,’ which occurred in Beijing in April 2009, Chinese buyers grabbed more than $100 million in U.S. real estate. Shortly after the expo, it was reported that an additional $400 million in sales was in the works. And another expo is scheduled for October.”

Further Li said that China should dedicate more of its $1.95 trillion in foreign exchange reserves to buying energy and natural resource assets – and, of course, when he spoke, it was widely understood that China has been gobbling up oil and natural resources for quite some time now.

China has been on a natural resources spending spree – not only buying companies outright, but also establishing relationships with other countries, as the nations of Africa, that give China access to natural resources.

In June, 2009 China’s state-owned Sinopac Group made the largest overseas purchase by a Chinese company ever, agreeing to pay US$7.19 billion for oil exploration company, Addax Petroleum Corp. This acquisition provides China with production capacity and reserves in West Africa and the Middle East.

The Wall Street Journal recently reported, “In the past year, Chinese state-owned companies have been encouraged to make acquisitions by a central government convinced that the global financial crisis has created an unmatched buying opportunity. They are taking advantage of depressed asset prices and access to Chinese credit to strike deals designed to secure the resources needed to power China’s growing economy." Further: “deals like the Addax acquisition show they are gradually growing into international oil companies, capable of striking high-profile, cross-border deals. They are even expanding into countries, such as Syria, deemed too risky by Western oil companies.”

And in March of 2009, a Financial Post article read: “Asia’s dealmakers say a Chinese resource spending spree will accelerate throughout the next 12 months, with Canadian mining and energy companies likely on the shopping list.” In the weeks preceding the publication of this article, it says: “With the backing of Beijing, cash-rich Chinese investors have spent the past several weeks working on a spate of overseas resource deals.” And while much of China’s spending had been directed toward Australia, “as the number of Australian targets shrinks, ‘low valuations elsewhere will likely move the focus to North America, particularly resource-rich Canada,” said Richard Griffiths, managing director with Royal Bank of Schtland’s M&A team in Hong Kong.

Of course, there was the well-publicized attempt by Aluminum Corp of China to buy Australian mining giant Rio Tinto for $19.5 billion, but Rio Tinto turned that offer down.

And while China has had no shortage of interest in acquiring oil and natural resource companies, its expansion spans beyond those sectors. Middle East North Africa Financial Network reports, “Mergers and acquisitions is a burgeoning industry in China. In the past year Chinese state-owned entities have successfully acquired minority interests in foreign banks and other financial institutions, and not all as a result of the credit crunch. … Financial news headlines around the world may be bemoaning a global slowdown, but Chinese M&A is definitely alive, well and expanding.”

Earlier we authored an article posted here that highlighted “compelling indications that China is not only strengthening economically and industrially, but that (it) is establishing strong footholds in oil-rich nations of Africa.” With such relationships in place, one has to wonder whether these African nations will sell exclusively to China. And, of course, it is understood that the U.S. and China may well be competing for global oil.

And even within its own borders, China has been on a spending spree -- including miles of high-speed rail lines and a new bullet train from Beijing to Tianjin which travels at up to 217 miles an hour. Money is going into other projects such as airports, highways and environmental projects. Unlike the U.S., China has few debts, only a small deficit and plenty of cash to pay for their construction boom and their expansion into a whole new level of global competition.

China’s emerging world dominance is evidenced within our own U.S. stock market. Three of the five largest companies in the global Russell index are now Chinese -- and PetroChina has replaced Exxon Mobile as number one based on market capitalization.

“In the past two years, we’ve really seen more quantitative evidence mounting about a shift in investment dollars flowing into China and related countries,” said Stephen Wood, chief market strategist for North America at Russell Investment. “The move up by PetroChina might not be significantly great in a strict statistical sense, but it’s going to grab some headlines. The transition in global economic power is under way.”

China should buy gold to hedge dollar fall-researcher
Russia Says Yuan Could be Reserve Currency in Decade
China Seeks New Global Reserve Currency
Sinopec Pact for Addax Boosts China’s Buying Binge
China wants reserve currency debate on G8 agenda: sources
Chinese M&A expanding despite global showdown
Asia Junk Bond Returns Top Stocks, U.S., Europe Debt
Financial future of U.S. worsens under Obama
China slowly preparing to dominate the globe
China Big Winner As Exxon Dethroned in Russell
World Bank Ups China 2009 GDP Forecast
China, Hong Kong sign yuan trade settlement deal
China’s Route Forward

WEEKEND READING LIST WILL BE BACK, ANOTHER FEATURE SOON

2009-07-10T13:28:00.002-04:00

This weekend we will return with a reading list -- hopefully some information that you have not read before.

If you did not read the feature article on China, posted last week, you really should scroll down on this page and take a look. And we hope to get another one up very soon.

IT IS ALL ABOUT PATIENCE

2009-07-10T09:26:00.002-04:00

Futures are indicating a moderately lower open this morning.

There is still no crystal clear indication of just where this market is heading, and we would really like to see the S&P500 gain some upside momentum. Yesterday provided an okay bounce in the most oversold sectors, energy, materials and financials, but there was sort of a lackadaisical feeling from the Bulls.

The overall trend, of course, has been lower, and we must respect that trend until we see signals that conditions have changed. Quite possibly, the market is simply going to churn here for a while. Without some positive news flow, it may well churn for a bit and then take another leg down.

Investors would most certainly like to hear some positive news from Washington. Folks would especially like an improved jobs report -- and, of course, talk of another stimulus package has them on edge.

It is times like these that make our job so difficult – the tendency is to want to do something, but wisdom dictates doing little to nothing at all. It is all about patience and waiting.

THURSDAY OPEN LOOKS TO BE HIGHER

2009-07-09T09:21:00.002-04:00

Futures are pointing to a higher open today, Thursday.

Yesterday – another tough day for the market. The Bulls, who had let that previous S&P500 880 line in the sand go, stepped up to defend the 870 level late in the day, and even mastered a bit of a bounce to the closing bell.

We have been patiently watching as technical conditions have deteriorated – along the way letting the warriors fight this one out while we stand on the sidelines. And it should go without saying that while we have been sitting on our hands as the battle plays out, we are all the while still looking at individual stock charts.

The S&P500 head and shoulders pattern is not to our liking, but, of course, it is still possible to find some decent looking individual charts that have held up pretty well. And there are a slew of stocks that seem oversold, particularly some of the oils.

The chances for an oversold bounce keep increasing.

And an additional factor in the whole mix is that there may be some interesting action next week as earnings season kicks into full swing.

We are, of course, following all of the news and have been particularly interested in the China/Rio Tinto situation -- something to ponder.

FLATTISH TO HIGHER OPEN ON WEDNEDAY

2009-07-08T09:25:00.002-04:00

Futures are indicating a flattish to slightly higher open.

Yesterday was excruciating -- no escaping that fact. Stocks fell to their lowest level in ten weeks. Major indices ended the day an average of about 2 percent lower, just off their lows for the day. The S&P500 dropped under its 200 day moving average, and the Nasdaq was unable to hold its 50 day MA. Breadth was about 3:1 negative. And the beginning of the earnings season is now weighing heavily on folks’ minds.

After all of that, we could use some uplifting news, but about the best that we can do is to say that many charts are technically oversold.

It is hard to be idle, but we must respect that the trend has turned lower – and until there is a shift and positive signals, the best action that we are taking is simply sitting on our hands.

LOOKS LIKE A LOWER OPEN FOR TUESDAY

2009-07-07T08:14:00.007-04:00

While yesterday the Bulls did step up to the plate to protect that S&P 500 support line of 880 that we had drawn in the sand, there is still not a clear signal of where things will go from here. Will we rest here and have satisfied the Bears that enough is enough -- or is this just a set-up for a rest and then another leg down?

Without clear signals, you know where we stand. Our choice is always to protect capital, and we can live with not trying to time an entry to the exact bottom of a move down. Having said that, we, of course, are keeping a sharp eye on some charts, looking for what we believe to be good entry levels -- and if we do make any moves, they will be tiny until we have greater confidence.

Beyond that, there is not a lot of news/announcements expected today -- which could help the market settle in here.

We obviously prefer having pretty clear signals for action to take. And it makes for a more interesting daily post when there is something to say beyond that we are staying patient and sitting on our hands. But patience is rewarded, and doing something just to do something rarely turns out to be a good thing. So today we will just keep our eyes focused on all of the usual signals that we have mentioned here so many times before.

AFTER THE 4th OF JULY HOLIDAY

2009-07-06T09:05:00.003-04:00

Major indices are indicating a lower open following the long holiday weekend.

Given the broad-based technical damage of last week, it seems eyes will be focusing on whether the S&P500 (which, along with the Dow, formed a head and shoulders pattern) can now hold the 880 support level.

And, of course, with the second-quarter now in the history books, money managers will probably be a whole lot less interested in their propping games.

We previously mentioned that our concern level had risen in the past week or two – and that anything that we did would be very tiny. That sentiment has not changed. It seems a time for patience. There is nothing wrong with having some cash. And our primary stance is waiting for clearer signals and good opportunities.

THURSDAY -- FUTURES INDICATING LOWER OPEN -- DISAPPOINTING JOBS DATA

2009-07-02T09:17:00.005-04:00

Futures are looking lower premarket – and have, in fact, weakened since the release of the latest jobs data showing unemployment reaching 9.5 percent.

Although yesterday was not a bad day with indices posting okay gains, it was the defensive stocks that seemed to fare best. And of concern is the fact that the S&P 500 was unable to hold above the 930 level.

Do we even need to repeat that we will be watching the $USD and gold? By now, that seems a given.

Action today might get a bit touchy -- given this shortened holiday week and thin trading as folks begin heading for the beach. And, in fact, we will be observing the holiday here at Hill And Street News – so that our next report will be on Monday.

As a final note, we do hope that readers will glance over the China report below. It reflects much of what we have been alluding to over several months.

Have a safe and wonderful holiday!

CHINA -- AN EMERGING SUPERPOWER

2009-07-01T15:05:00.006-04:00

At Hill and Street News, we have been and remain keen observers of what we believe are China’s strategies to become “the” new global superpower. Undoubtedly, our readers have noted our frequent reference to China, notably with respect to its growing political and economic power, its monetary policies and its prolific accumulation of natural resources.

First, it is entirely understood that United States and China have close economic links, particularly since China now holds more U.S. Treasury debt securities than any other country – and, of course, each is the other’s second-largest trade partner. Perhaps instead of speaking of “links”, we should allude instead to China’s huge position of power over the U.S.

To put the near-term economic growth outlook for the United States and China in perspective, consider information from the Washington-based International Monetary fund:
“Developing Asian economies, led by China and India, will expand 4.8 percent this year while the U. S. contracts by 2.8 percent and the euro area by 4.2 percent,” reported the IMF according a June 30, 2009 Bloomberg article titled, Asia Junk Bond Returns Top Stocks, U.S., Europe Debt. But the World Bank late last month raised its forecast for China’s economic growth this year to 7.3 percent and for 2010 it predicts China’s GDP growth will accelerate to 7.7 percent.

So while the Chinese economy is expected to expand this year, the economy of the U.S. is expected to contract.

And now let us glance at that U.S. debt, largely held by China. A June 29,2009 examiner.com article titled “Financial future of U.S. worsens under Obama”, that presents an abbreviated version of a Washington Times article of the previous day, cites that according to the U.S. Commerce Department, foreigners now hold 50 percent of our country’s publicly held debt – or 25 percent of the US national gross domestic product. And then it explains that if those foreign investors, “such as China, significantly reduce their purchase of future U.S. Treasury debt securities, without even dumping their current holdings, U.S. interest rates could soar and the dollar could collapse.”

Further:
“Three decades of massive ‘trade’ deficits have converted the United States from the world’s banker – able to pay any price and bear any burden in the cause of freedom’ – to the world’s largest debtor, utterly dependent on China and other foreign interests,” according to Charles McMillion, chief economist of Washington-based MBG Information Services. “We are so deeply in debt and this money is so liquid that it hamstrings our monetary, fiscal and trade policies. We’ve really mortgaged our financial future.”

And whether you accept or agree with information provided by Sen. Judd Gregg in a June 30, 2009 article at unionleader.com, this information is chilling and at least worth considering.

This article cites Gregg’s belief “that because of Obama administration spending, the U.S. will have budget shortfalls, or deficits, averaging $1 trillion each year for the next ten years.” Later it states that “By the end of the budget period as proposed by the President, the debt will have skyrocketed to 82 percent of GDP, which is not sustainable.” And further, it echoes previous sentiment that if the Chinese, who have already expressed concern about U.S. debt, “start to reduce their purchases of our government securities because of our need to borrow increasing amounts of money to finance all of the spending that the President has proposed, we will have to start offering higher interest payments to potential leaders to make our securities more attractive.”

Without a doubt, regardless of which political or economic leaders are believed, there is sufficient and convincing evidence at every turn that the U.S. is economically in a serious situation.

China, on the other hand, seems to be positioning itself to become “the” superpower – and more and more businesses want access to China’s markets.

Just watching headlines: June 30th, a People’s Daily Online headline reveals, “European businesses wish to invest more in China” – and in the body of this story, “European enterprises believe that China’s economy can recover earlier in the global downturn.” A recent New York Times article revealed, “Bain Capital, an American private investment firm, said Monday that it had agreed to invest as much as $432 million to acquire a minority stake in Gome Electrical Appliances, one of the biggest Chinese retailers.” This was termed “one of the largest American investments in a mainland Chinese company.” These are just a couple of numerous such stories.

Yes, there seems great interest in China, and why not. As Eswar Prasad wrote in a review of the book, The Chinese Growth Experience: A Golden Tapestry, “an economy that has grown at an average rate of about 10 percent per annum for over two decades, has over a billion people, and has vaulted over others to become the third-largest in the world tends to draw attention.”

THE EMERGENCE OF THE YUAN

Garnering considerable recent attention, Li Lianzhong,a senior researcher with the Communist Party, strongly suggested that China should buy gold and US land. “The US is printing dollars on a massive scale,” Li explained, “and in view of that trend, according to the laws of economics, there is no doubt that the dollar will fall. So gold should be a better choice.”

But he also suggested that an additional reason to buy gold is that the metal is considered necessary for an escalation in the role of the Yuan – “that if the yuan should go international or become a reserve currency, China needs more gold to back that.”

Li, who heads the economic department of the Party’s research office, opined that the yuan should become a fifth currency in the International Monetary Fund’s Special Drawing Rights. And he further suggested that it should have an equal 20 percent weighting with the US dollar, yen, euro and sterling.

Within days of Li’s report, the People’s Bank of China issued a statement saying that China expects to request a reform of the international currency system that will make it more diversified.

On Monday of this week, June 29, China and Hong Kong signed a deal that cross-border trade would be with the yuan – seen as a step in increasing the position of the yuan. Governor of the People’s Bank of China in Hong Kong, Zhou Xiaochuan, earlier this year even suggested the idea of the yuan replacing the dollar as the benchmark global currency.

And then today the Financial Post blarred the headline that China wants “to debate proposals for a new global reserve currency at next week’s Group of Eight summit in Italy." Further in the article, “The debate centres on proposals by some emerging powers that an alternative should be found to the U.S. dollar as the global reserve currency, to reflect the shifting balance of power in the globalized economy.”

Seemingly in support of an escalation in the role of the yuan, Russian Finance Minister Alexei Kudrin had previously said, “I think the shortest route would be if China liberalized its economy and allowed the convertibility of the yuan. … This could take 10 years, but after that the yuan would be in demand and it is the shortest route to the creation of a new world reserve currency, and I think China needs to think about this.”

U.S. LAND, OIL AND NATURAL RESOURCES

Li, of course, also suggested that US land is now a better investment for China than US securities. And, in fact, even before his suggestion, the Chinese had started to invest in U.S. real estate. "At the aptly named ‘America Is for Sale Expo,’ which occurred in Beijing in April 2009, Chinese buyers grabbed more than $100 million in U.S. real estate. Shortly after the expo, it was reported that an additional $400 million in sales was in the works. And another expo is scheduled for October.”

Further Li said that China should dedicate more of its $1.95 trillion in foreign exchange reserves to buying energy and natural resource assets – and, of course, when he spoke, it was widely understood that China has been gobbling up oil and natural resources for quite some time now.

China has been on a natural resources spending spree – not only buying companies outright, but also establishing relationships with other countries, as the nations of Africa, that give China access to natural resources.

In June, 2009 China’s state-owned Sinopac Group made the largest overseas purchase by a Chinese company ever, agreeing to pay US$7.19 billion for oil exploration company, Addax Petroleum Corp. This acquisition provides China with production capacity and reserves in West Africa and the Middle East.

The Wall Street Journal recently reported, “In the past year, Chinese state-owned companies have been encouraged to make acquisitions by a central government convinced that the global financial crisis has created an unmatched buying opportunity. They are taking advantage of depressed asset prices and access to Chinese credit to strike deals designed to secure the resources needed to power China’s growing economy." Further: “deals like the Addax acquisition show they are gradually growing into international oil companies, capable of striking high-profile, cross-border deals. They are even expanding into countries, such as Syria, deemed too risky by Western oil companies.”

And in March of 2009, a Financial Post article read: “Asia’s dealmakers say a Chinese resource spending spree will accelerate throughout the next 12 months, with Canadian mining and energy companies likely on the shopping list.” In the weeks preceding the publication of this article, it says: “With the backing of Beijing, cash-rich Chinese investors have spent the past several weeks working on a spate of overseas resource deals.” And while much of China’s spending had been directed toward Australia, “as the number of Australian targets shrinks, ‘low valuations elsewhere will likely move the focus to North America, particularly resource-rich Canada,” said Richard Griffiths, managing director with Royal Bank of Schtland’s M&A team in Hong Kong.

Of course, there was the well-publicized attempt by Aluminum Corp of China to buy Australian mining giant Rio Tinto for $19.5 billion, but Rio Tinto turned that offer down.

And while China has had no shortage of interest in acquiring oil and natural resource companies, its expansion spans beyond those sectors. Middle East North Africa Financial Network reports, “Mergers and acquisitions is a burgeoning industry in China. In the past year Chinese state-owned entities have successfully acquired minority interests in foreign banks and other financial institutions, and not all as a result of the credit crunch. … Financial news headlines around the world may be bemoaning a global slowdown, but Chinese M&A is definitely alive, well and expanding.”

Earlier we authored an article posted here that highlighted “compelling indications that China is not only strengthening economically and industrially, but that (it) is establishing strong footholds in oil-rich nations of Africa.” With such relationships in place, one has to wonder whether these African nations will sell exclusively to China. And, of course, it is understood that the U.S. and China may well be competing for global oil.

And even within its own borders, China has been on a spending spree -- including miles of high-speed rail lines and a new bullet train from Beijing to Tianjin which travels at up to 217 miles an hour. Money is going into other projects such as airports, highways and environmental projects. Unlike the U.S., China has few debts, only a small deficit and plenty of cash to pay for their construction boom and their expansion into a whole new level of global competition.

China’s emerging world dominance is evidenced within our own U.S. stock market. Three of the five largest companies in the global Russell index are now Chinese -- and PetroChina has replaced Exxon Mobile as number one based on market capitalization.

“In the past two years, we’ve really seen more quantitative evidence mounting about a shift in investment dollars flowing into China and related countries,” said Stephen Wood, chief market strategist for North America at Russell Investment. “The move up by PetroChina might not be significantly great in a strict statistical sense, but it’s going to grab some headlines. The transition in global economic power is under way.”

China should buy gold to hedge dollar fall-researcher
Russia Says Yuan Could be Reserve Currency in Decade
China Seeks New Global Reserve Currency
Sinopec Pact for Addax Boosts China’s Buying Binge
China wants reserve currency debate on G8 agenda: sources
Chinese M&A expanding despite global showdown
Asia Junk Bond Returns Top Stocks, U.S., Europe Debt
Financial future of U.S. worsens under Obama
China slowly preparing to dominate the globe
China Big Winner As Exxon Dethroned in Russell
World Bank Ups China 2009 GDP Forecast
China, Hong Kong sign yuan trade settlement deal
China’s Route Forward

WEDNESDAY MORNING

2009-07-01T09:11:00.003-04:00

Well, it seemed that yesterday started okay, and folks made an effort to do a bit of salvaging in the final hour – but the day showed exactly why we have stepped back some lately. None of the sectors escaped unscathed, and goldminers certainly suffered.

We have, you will recall, termed the market “heated” and “frothy” -- and expressed that we have felt cautious. And it has been a while since we have posted that we have felt comfortable doing much of anything.

There do seem some decent charts -- and it also seems that there has been more of a leaning toward defensive stocks.

Still, we are simply enjoying the summer -- and any moves that we make will be tiny ones.

When opportunities present, it is nice to take advantage – but, as we always stress, hanging onto profits is always the first consideration.

It is the start of a new month and a new quarter, and there are some downgrades. And don't forget that the US markets will be closed on July 3rd.

Oh, and we will probably have our China piece later today.

TUESDAY -- BEFORE THE OPENING BELL

2009-06-30T08:40:00.002-04:00

It was for the most part a pretty uneventful day yesterday -- slight weakness in gold -- and oil, of course, was stronger.

So we will see what today, the final day of the quarter, brings. For the most part, there is little to say that we did not say yesterday. Don't forget that there could be those end-of-the-quarter games -- and, of course, this is a short four-day trading week. And we are in those hazy, lazy days of summer.

There are some upgrades out there -- solars looking stronger.

And we are still keeping our eyes focused on the same things cited yesterday -- including $USD and precious metals.

Be careful -- and have a great day!

Monday Market And Trading

2009-06-29T11:25:00.003-04:00

Hope everyone had a nice weekend. We are a little late getting our Monday morning report out – the opening bell just crept up on us as we were making morning checks. Oil, at least at one point earlier today, rose to $70 a barrel after word that China wants to increase its reserves by 160 percent.

Actually, we have been quite focused on China – and over the weekend started working on an article that will be posted here either later today or perhaps tomorrow. Without a doubt, China is a major force that significantly affects the US markets – and China always demands watching.

Friday trading had pretty good volume, but it was a day that was a bit hard to read in a meaningful way because of the Russell rebalancing.

Now we are staring a new quarter in the eye. While the S&P500 raises an eyebrow for a head and shoulders pattern and the number of charts for betting short has been increasing, there remain some sectors or areas of sectors such as Technology that still look pretty okay.

Has there been a day when we haven’t mentioned watching the $USD? But that’s exactly what we are doing, especially as our dollar relates to movement in some of the foreign exchange indexes. A keen eye can sometimes pick up an early hint of which way the market winds are going to blow. And, of course, as always, watching the dollar is always important with respect to the movement in commodities.

Also, we continue to watch gold and silver, including the movement of one compared to the other, not only in watching for good entry points, but again with respect to hints at market direction.

This is not a time to get cocky – we must keep our wits about us as we navigate this market.

Weekend Reading, June 27 and 28

2009-06-26T13:48:00.019-04:00

UNITED STATES

House passes climate bill of more than 1,200 pages

Industry must drive US economy

Google CEO says recovery is likely to begin in autumn, the worst of the crisis has passed

US debter status has dramatically deteriorated, foreigners hold 50 percent of fed government's publicly held debt

US triples its aid funding to Pakistan

COMPANY/INDUSTRY RELATED

Some analysts predict good times for hard drive manufacturers

Six stocks predicted to have big gains, emphasis on industry leaders with strong finances

Global steel demand expected to drop up to 15 percent this year

Yamana Gold a take-over target

CHINA

China advised to buy gold to hedge US dollar

China wants new global currency reserve

Venture Capitalism in China, India

Every week ... ships arrive from Australia, Brazil, India and Indonesia to feed China's hundry steel mills

OTHER INTERNATIONAL

Russian Prime Minister Putin invites Royal Dutch Shell to participate in gas projects

Japan and South Korea want to work together to bring their economies back to health

'Butcher of the Press' to interrogate reformists in Iran

Vodka kills as many Russians as a war

OTHER READING

California drivers might start buying automobile insurance by the mile

FRIDAY'S MARKET

2009-06-26T09:18:00.006-04:00

Since we find ourselves short on time before the market open, this will be an abbreviated post -- but basically our thoughts are unchanged over the past few days. (And, of course, do not forget that weekend reading will be posted tomorrow.)

Yesterday was a better day with basically pretty much all sectors performing well -- including the goldminers that we have been talking about.

Long-term we still continue to like precious metals -- but, as always, it is important to be smart as to timing and price.

The market is looking to open flattish to down. Nothing has changed -- yes, we remain extra cautious, not at all trusting -- and mindful of Russell rebalancing and possible end-of-month games.

FUTURES INDICATE FLAT OPEN THURSDAY

2009-06-25T09:01:00.002-04:00

Fair values are at the moment are indicating a relatively flat market open.

At the open yesterday it looked like the Bulls had stepped up to the plate, but later their efforts seemed more half-hearted as the market slumped following FOMC news.

Just as we predicted, goldminers showed some strength, especially early – and despite losing some ground later in the day, still ended day day higher. Technology, financials and basic materials all fared well. And big oil and pharmaceuticals showed some weakness.

The market has that feeling of summer doldrums, but, of course, all it takes is one piece of news to create wild swings one way or the other. And we are mindful of folks who might want to play games to make end-of-the-quarter numbers – which could at least temporarily create a bounce higher.

We will continue to look at charts for both the long and short sides – and any moves that we make will definitely be tiny.

WORLDWIDE THE RICH LOST 20 PERCENT OF THEIR WEALTH IN 2008

2009-06-24T13:10:00.005-04:00

The rich of the world are not likely to look back at 2008 as a terrific year. Indeed, during this period of economic uncertainty and shaky markets, the world' rich saw their total wealth dwindle by almost 20 percent, according to a Merrill Lynch study cited by Reuters.

"The total value of the wealth of people with net assets of more than $1 million, excluding their main home and consumables, dropped to $32.8 trillion -- below 2005 levels," the 13th annual world wealth report revealed.

Also, the report cited a decline of nearly 15 percent in the number of people with more than $1 million in assets -- and about a 25 percent drop in the number of people who could lay claim to fortunes in excess of $30 million

Futures Looking Higher on Wednesday

2009-06-24T08:51:00.003-04:00

The European Central Bank reported that it will lend Euro442 billion (US $662.63 billion) at 1% to banks for twelve months which should reduce costs for borrowing for banks, companies and consumers. And it is expected that the Fed today will also be looking to keep short-term interest rates low.

Early morning futures are indicating a higher open. Yesterday some oversold stocks made some decent upward moves, but for the most part market action was rather bland. There are still some decent charts, but anything that we do will be very small in size.

Of course, we have an eye on gold.

Futures Pointing to a Higher Open for Tuesday

2009-06-23T07:41:00.003-04:00

Yesterday was ugly, the worst day in two months. Before the open, we said that we would be watching to see if the S&P 920 level could be held -- and, of course, neither the 200 day nor the 50 day moving averages were maintained.

Thankfully, the futures are indicating a higher open today, but the ugliness of yesterday still hangs -- a reminder of how quickly gains can slip away.

Crude oil, which dipped below $67 for the first time in three weeks, and commodities in general have plunged.

We have tended not to do much recently. The market had gotten heated, and it seemed best to protect gains.

Clearer signals eventually emerge, and those are the signals that we wait and watch for. In the meantime, we will examine charts, looking at both the long and short side. And we will be patient -- sometimes hard to do, but often with nice rewards.

Futures Once Again Pointing to a Lower Opening

2009-06-22T07:29:00.002-04:00

After last week, it would be nice to be looking at an easy week ahead. But, of course, there is never a moment when we can let our guard down -- and it seems that we actually need to be particularly vigilant now.

Our eyes continue to be focused on the overseas markets, whether the S&P 500 will hold the around 920 level -- and, of course, the $USD, gold and silver.

There are still some strong charts, but also some that are looking more worrisome than a couple of week ago. Oil seems especially vulnerable. There are some metal/mining charts that look okay. And we are keeping a close eye on selective silver companies, looking for a good entry.

Still and as always, though, the primary focus is on protecting profits and not letting them slip away. We will always miss opportunities here and there, but what we consider most hurtful is to lose what has been gained.

It pays to be careful.

Father's Day Weekend Reading

2009-06-19T20:31:00.009-04:00

INTERNATIONAL/NATIONAL NEWS INTEREST

Web support for Iran Protesters

Former President Bush speaks out

Obama administration pushes IMF gold sales through the house, ties it to security bill

Steve Jobs had liver transplant

CHINA

Bejing will recruit tens of thousands of volunteers to strip 'lewd" content from Intenet

China may try to block Rio Tinto/BHP iron ore joint venture

T BOONE PICKENS

T Boone Pickens and a new American carmaker

T Boone Pickens sees oil at US$80 to $85

SECTORS AND STOCKS

Chile's pension fund managers buying local retail, consumer goods and construction sector stocks

Nissan, electric car in 2010

NJ biotechs try to maintain viability in withering market

Nestle looking at acquisitions in Italy

Saudi Telecom becomes Cisco partner

MINERALS, OIL AND GAS

Price disconnect between oil and natural gas

Encana reports that 'opportunities are emerging'

Teck Resources expects coal sales to be at upper end of previously announced range

Large Canadian gold mine ready to begin operations

Nickel prices are higher, some analysts expect the trend to continue

OTHER READING

Gadgets that Dad might like for Father's Day

Fares drop as more people opt for the back of the plane

World's wealthiest royals

Back On Board

2009-06-18T11:18:00.003-04:00

Finally the computer is up and running again.

The market seems pretty bland thus far today – and we are waiting for clearer signals before putting any real money to work. As always, the goal is to protect our capital – and our stance has always been to watch and wait until the market tells us what to do.

Without a doubt, the market had become over-heated. But the Bears have had their way for a few days now – and the question is whether the Bulls will step back up and retake control. And will the Bulls allow stocks to move back up – or will they flip and take gains as quickly as they are there?

Technically there has been no significant damage. Plenty of charts have bases and are still just fine.

So we simply just watch and wait – vigilantly keeping our eyes wide open. In the meantime, we will get back to charts and reading.

Computer Not Functioning -- Should be back posting messages tomorrow

2009-06-17T07:05:00.001-04:00

Folks,
The computer is not working -- a new router is on its way from Verizon. So with luck I will be posting messages again tomorrow.

Judy

Monday Morning -- Futures Pointing to a Lower Open

2009-06-15T09:16:00.000-04:00

Well, folks, the major Indices are pointing to a weaker open for the market today. Soon it will be our summer solstice – so officially it seems that we are entering what is often considered the slow, lazy summer trading time of year.

Of course, the market has continued to drift in the same trading range that we have been discussing for a while now -- and it seems that everyone is wondering whether the Bulls will maintain their somewhat limited control or whether the Bears will step up and gain some traction. Whichever way the wind blows, stay diligent and react accordingly.

At this moment commodities are looking a bit weaker. Focus will continue to be on China’s demand – and watching the $USD. But we continue to like oil, gold and silver when the prices are right.

As always, though, nothing has changed – we continue to sell strength and buy into dips. It is the approach that has been working – so we will take advantage of it until there is a change.

Weekend Reading -- An Amazing List of Must Read Articles

2009-06-12T22:02:00.014-04:00

IMPORTANT INTERNATIONAL/NATIONAL NEWS!

Tough sanctions for North Korea

North Korea views US-led 'blockade' an act of war

Obama offers cuts to pay for healthcare reform

Quit mirandizing terrorists

Economic recovery--is everything good again

CONGRATS TO PITTSBURGH PENGUINS FOR THEIR THRILLING STANLEY CUP VICTORY -- SOME GREAT COVERAGE BELOW!

Penguins win Stanley Cup in thriller

Stanley Cup partying in Pittsburgh

Injured Crosby lives is dream (sort of)

LOTS OF INTERESTING MINING-TYPE STOCKS INFO!

Thanks to Obama administration, Appalachian coal faces tougher regulatory challenges ahead

Demise of Rio Tinto/Chinalco deal is good for Rio Tinto shareholders

Dollar not only currency in disarray

Kevin Kerr on playing the weak dollar

Trading sessions experienced strong net outflows from gold and silver stocks and strong net inflows in copper, zinc, aluminium and nickel

Bottom fishing for global mining stocks

Experts expect new-build ship cancellations to continue

STOCK SELECTIONS BY SOME EXPERTS!

Six stocks positioned for big gains

Four great tech stocks

Stocks for real estate rebound

OTHER INTERESTING ARTICLES!

Entrepreneurs in China and India

Fewer Engineers and More Anthropologists

How Hyundai sells more when competition cannot find the formula for doing that

Industrial clusters changing Chinese manufacturing

AND THESE!

Mark Cuban oftens posts pearls of wisdom on his blog--this time on success and motivation, 2009

Facebook user names at 550 per second

Index Futures Pointing to Flat Open on Friday

2009-06-12T08:42:00.003-04:00

Early Friday morning the US stock Index futures were pointing to a rather flat market open.

In Thursday's action, it seemed that some underinvested folks decided to buy -- and some folks betting short decided to cover. But the market that was trading higher through the day began to wane toward the closing bell -- typical lately. So far the Bull is still snorting and stomping, trying to gain traction for a sustained move over S&P 950 -- but, thus far, he has been pretty much just putting on a good show because the reality is that we seem rather range-bound.

Canada's Financial Post As a News Resource

2009-06-12T05:24:00.023-04:00

Waking at 4:30 a.m. has provided a bit of time to meander around the internet in search of new information about companies and stocks. Sleeplessness is not unusual, nor is working online in predawn hours. But this time I had a computer problem -- temporarily lost my bookmarks -- so, without the reliance on old stand-by websites, I ventured into new territory in my news search.

Obviously, there are advantages in going past the familiar because I stumbled upon Canada's Financial Post. And it is hard to believe that in all of this time, I have never visited this site that offers some very interesting information -- and seems especially strong with respect to energy and mining which are, of course, huge industries in Canada.

Some of the tidbits at this website:

Aside from an article on the global economy with thoughts from the Bank of Canada governor, the major headline was, "TransCanada's Alaska pipline project gets big boost." TransCanada Corp has sold one of its natural gas pipelines, located in the US, to TC PipeLines for US$395 million in cash and shares. The North Baja pipeline extends from southwestern Arizona to the California-Mexican border. TransCanada bought the property about five years ago when California "was emerging from its energy crisis from earlier in the decade, ... (but) new technology has opened up previously inaccessible pockets of shale natural gas, which is also cheaper to process, pushing the location advantage of the property into the future." With an abundance of other opportunities, TransCanada decided to opt for capital instead of a "mature asset."

Also on the Financial Post website:

There were articles relating to Yamana Gold, both with respect to the company's possible takeover targets and with respect to the company's announced deal to sell three producing mines to Aura Minerals of Vancouver, British Columbia. That deal sent the price of Aura stock shares soaring on Thursday. And Raymond James analyst Tom Meyer, who upgraded Aura to "strong buy," said that the deal propels Aura "into a gold producer of 'reasonable size" with plenty of near-term cash flow coming from gold. "

The three producing mines that the Vancouver based Aurora Minerals is acquiring from Yamana are -- the San Andres Gold Mine in Honduras and the Sao Francisco and Sao Vicente Gold Mines in Brazil.

Aura claims that among the benefits that it will garner:

Intermediate gold production and cash flow with an estimated average annual production of 220,000 gold ounces at average cash costs of US$555 per ounces in the Americas

Acquire 1.8 million gold ounces of proven and probable
reserves, plus additional 2.44 million gold ounces of measured and indicated resources and additional 0.8 gold ounces of inferred resources

Further information may be obtained regarding both of these news events by visiting the Financial Post website -- which may be reached by clicking the headline above.

A Study of Favorite Stock Selections

2009-06-08T19:56:00.016-04:00

Followers of the stock market, from gurus to novices, tend to have a special selection of stocks that they expect to do well -- and to outperform the market in general. And today, weeks after what many experts have been calling a market bottom, it seems a thought-provoking exercise to look at and follow some of the stocks being touted on industry-related websites.

It is understood that not every individual has the same investing style or time horizon, but, regardless, it should still be interesting to follow these stocks to see how well they perform over the short term and long term. And since the stocks were all mentioned at about the same time, at least the starting date for the group is quite comparable.

Two experts have their selections published in articles on the MoneyShow.com website. The remaining selections come from The Motley Fool staff based on recent recommendations by their investing community.

First, Richard Band, editor of Profitable Investing, theorizes that the stocks that suffered the greatest at the very end of the economic downturn are the ones that surge most early in a recovery. Eventually traders will take their profits in these stocks and move instead to “safer, steadier companies whose share prices haven’t climbed as far yet.” He likes large caps ExxonMobil and PepsiCo. Band's comments:

"ExxonMobil (NYSE: XOM), which has continued to drill aggressively during the industry downturn, will be set to cash in almost immediately (on) even a modest recovery in global business activity (that) will eat into inventories of oil and natural gas, putting upward pressures on prices. The financial titan of oil, sitting on $31 billion of cash (enough to pay off all the company's debt three times over), XOM is seldom a cheap stock. Since early March, though, investors have raced into dicier energy plays and left Exxon behind. It’s time for quality to catch up.

“PepsiCo (NYSE: PEP), which produces Lay’s snack foods and Quaker Oats cereals as well as soft drinks, fruit juices and bottled water, is run by one tough customer, Indra Nooyi, who ‘got going’ in early May with a 6% dividend hike. The company has now sweetened its payout 37 years in a row. …. Sill, I’m even more impressed with PEP’s generous dividend yield – currently around 3.3%.”

James Oberweis, editor of Oberweis Report, notes that Chinese stocks skyrocketed so far this year, but, even so, he believes that they will be excellent investments over the longer term. Oberweis’ top picks are two small Chinese ADRs. He opines:

“E-House (China) Holdings (NYSE: EJ) is the largest Chinese property agent, the Chinese version of Century 21. …. We see E-House as the best way to play a continued rebound in Chinese property sales volumes. The firm has a strong market position, doesn't carry inventory like developers, and has a healthy balance sheet with no debt.
“New Oriental Education (NYSE: EDU) provides foreign-language training and college test preparation courses. Education is highly prized in China, and the huge gap in wages between the educated and uneducated is leading families to invest heavily in their child’s studies.”

The Motley Fool Staff, with input from its large community of members, offered a list of stocks that they tagged "5-Star Stocks on the Upswing" for 6/8/09. They state:

“There is, however, an easy way to increase your odds of finding the stocks that will beat the market. At Motley Fool CAPS, the Fool’s investing community of more than 135,000 members, we’ve found that our ‘five-star portfolio’ is up 15.331% between January 2007 and April 2009, compared to a loss of 40.6% for the S&P 500. In order to fully capture the upside potential of those five-star stocks, it makes sense to identify them just as soon as they achieve five-star status.”

Their stocks selections, which had just the day earlier attained five-star status: Incyte Corp (Nasdaq: INCY), Ternium S. A. (ADR) (NYSE: TX), Allis-Chambers Energy, Inc. (NYSE: ALY), Columbus, McKinnon Corp (Nasdaq: CMCO), Bio-Reference Laboratories, Inc. (Nasdaq: BRLI), Nam Tai Electronics, Inc (NYSE: NTE) and Medicis Pharmaceutical Corp (NYSE: MRX).

In the future, we will look at each of these companies – and the prices used for this study will be the closing prices for each on Monday, June 8, 2009.

To read the complete articles referenced above, follow the appropriate links below.
Richard Band for MoneyShow.com, Two Picks for a Summer Pull Back
James Oberweis for MoneyShow.com, Two Ways to Ride the Dragon
The Motley Fool, 5-Star Stocks on the Upswing

Thoughts on This Week

2009-06-08T06:36:00.006-04:00

Early Monday morning, US futures indicated a weak market opening -- and strength in the US dollar had commodities looking to trade lower.

While the Bulls have maintained their slight edge, some stocks have felt a bit tired of late. But last week did find the major indices looking fine from an intermediate technical view -- which signals that the Bulls can certainly continue to trudge this market higher.

For our part, we are maintaining an "eagle eye" and are never too trusting. And we have one of those eagle eyes focused on the strength of the US dollar, especially with respect to commodities.

Emerging market stocks have been strong, especially China and India -- and tiny biotechs have been rocketships lately.

But it seems that the market, for the most part, continues in its trading range -- and we expect to continue to sell strength and buy weakness. Chasing stocks, not for the faint of heart, is not our style -- so we are selective with buys, preferring to show patience in waiting for stocks to come to us. The primary mission, as always, is in protecting capital -- keeping gains.

Weekly Wrap-Up and The Week Ahead

2009-06-06T09:11:00.008-04:00

Chalk Another One Up for the Bulls

While Friday’s session saw some rather mixed action, the week was another positive one for the Bulls with the major indices ending up.

On Friday stocks initially moved higher after the Department of Labor reported that fewer jobs were lost than expected. But shortly thereafter the market began to slip – and the day ended with the Dow Jones Industrials higher by nearly 13 points, but the Nasdaq lost 0.60 and the S&P 500 lost 2.37 points. Industrials and emerging market stocks fared well. Financials, semiconductors and retail stocks exhibited weakness. And crude oil futures closed down with the stronger $USD.

With the quarter ending in three weeks, it seems likely that the market might enjoy some support as money managers look to add exposure and impress. But it is always prudent to keep a sharp eye on the market – and maintain vigilance.

Weekend Reading--Compelling Stories & Some Fun Links Too

2009-06-05T14:30:00.024-04:00

President Obama visits Holocaust landmarks

The Jerusalem Post highlights reaction to Obama's speech

Slower job losses in US hint that recession might be easing

Obama aministration travel has been to states that Obama won in 2008, not to Southern states that he lost

Third week of gains for Asian stocks

A whole new bull run? Maybe

Nouriel Roubini Prediction

Rogers Holdings Chairman Jim Rogers predicts currency crisis

Jim Rogers says that his best investment was his daughters

President of Nestle's Brazilian unit expects that coffee and sugar prices may move higher

Making money from oil's rebound

And what about gold?

Selling Platinum and buying palladium

Trading Apple

Why Dunkin Donuts gave away free doughnuts on Friday

Hot Green Mountain coffee

Microsoft's early-realed Bing Ads have people talking

P&G to phase out US distribution of Max Factor brand

Interview with Tim Armstrong: Why he left Google to move to AOL (and other

A favorite, Rocketman

"The Day the Media Died"

This is incredibly funny--Massage therapist for models

Just 10 percent of Twitters do most of the tweeting

Make $10,000 a month tweeting

Susan Boyle, Final performance, Britains Got Talent

Friday Significant News

2009-06-05T07:30:00.005-04:00

Mideast has mixed reactions on Obama

State budgets "carnage" worsening reports National Conference of State Legislatures

US job losses slow

Oil on tankers surges 71 percent since early April

Insider selling frenzy

Rio Tinto and BHP Billiton, with a joint-venture deal, led European markets higher

iPhone to highlight developers conference

Steve Jobs ready to resume work at Apple

Indian investors may react to US inflation risk

Indian market may perform better than worldwide peers

Tata Motors hopes to sell world's cheapest car in US

GM to sell Saturn brand to Penske

Mitsubishi's expects its $47,000 electric car will help it challenge competitors

MTS and Nokia partner for sales in Russia

Cessna planning more layoffs and cost cutting

IRS might require that income tax preparers be licensed

Penguins are "even and believin'" in Stanley Cup Finals

Penguins used 'exotic route' to 4-2 victory says Starkey

Complete text of President Obama's Cairo speech

2009-06-04T17:11:00.000-04:00

Thursday's Action: At OK Coral, it was OK

2009-06-04T16:35:00.003-04:00

Heard the Bulls give a sigh of relief at the close today. After a slightly weak opening, the Bulls snorted, pawed the ground for a bit, stood firm -- and got the market moving higher, posting some pretty significant moves in the financial, materials and energy sectors.

Retailers, with unimpressive sales in May, were the day's laggards.

The Dow Jones Industrials ended the day up 74.96 points (0.86%), while the Nasdaq Comp posted a 24.10 (1.32%) point gain and the S&P 500 a 10.70 (1.15%) gain.

Thursday Morning Highlights

2009-06-04T07:29:00.003-04:00

President Obama wants new beginning with Muslim world

Pentagon top secret clearance flaws

Wal-mart opening new stores and creating about 22,000 jobs in 2009

Bernanke: Debt threatens recovery

China's National Petroleum Corporation signed $4.7 billion contract with National Iranian Oil Company

Rio Tinto May Consider $15 billion sale of stock

Andrew Gillian of Aberdeen thinks that investors should buy Indian and Brazilian stocks

Goldman Sachs raises target on light sweet crude to $75

Some retailers might not reach May sales expectations

Peru ETF will start trading on New York stock exchange this month

Medical bills a factor in many bankruptcies

Air France Tragedy Strongly Affects StatoilHydro

2009-06-03T18:56:00.005-04:00

StatoilHydro, the Norwegian oil and gas giant, has been hard hit by the news that three colleages were among the passengers of Air France Flight 447 that disappeared over the Atlantic Ocean earlier this week.

Geologist Marcela Pellizzon, 29, joined StatoilHydro as a contractor in the 2008. She was married to another company employee in Brazil.

Lawyer Gustavo Peretti, 30, also came to StatoilHydro in 2008. He had worked at the Oslo office prior to transferring to the Rio office.

And laywer Kristian Berg Andersen, 37, a Norwegian citizen, joined StatoilHydro in 2002 and was said to have been instrumental in the take-over of Brazil's Peregrino field.

One of the two other Norwegians on that flight had been a supplier to StatoilHydro for 35 years.

The company's commercial activities continued, but all social activities were cancelled and forums were held to help friends and colleages deal with and express their emotions.

"We have learned that three of our people were on the flight with great sadness," said StatoilHydro Chief Executive Helge Lund. "A tragedy like this makes a deep impression on us as colleagues and managers. Our thoughts and sympathies are with the next-of-kin. ... Naturally, the Brazilian organization was particularly affected .... Our attention is now focused on supporting and assisting families and colleagues in Brazil, as well as in Norway."

Oil Tumbles After Unexpected Increase in Supply

2009-06-03T12:52:00.001-04:00

Wednesday Morning Reading

2009-06-03T06:32:00.025-04:00

Early indications are for a weaker open

President Obama starts Middle East tour

Al Qaeda threat of bio attack from Mexico

Confidential nuke locations were posted on the web

Foreign reporters barred from Tiananmen Square

European spending and exports suffer large decline

US Planned layoffs have declined to eight-month low

New vehicle sales rise

American geologist and his wife among passengers on Air France flight 447

Across rural America, a growing number of farmers are taking their own lives

Cymbalta application resubmitted by Lilly to FDA

Germany's wind farms in jeopardy

IRS files lien on 2004 Kerry campaign

Is the US one of the largest Muslin nations?

Global distrust of business has increased

Time spent on social networks nearly doubles in a year

Pittsburgh Penguins Bet Detroit Red Wings

Penguins superstar, Crosby, is marketer's dream come true

Early Indications that Market Indices Will Have A Weak Opening

2009-06-02T09:17:00.002-04:00

The Quest for Oil by China and the United States

2009-06-01T15:17:00.055-04:00

On Monday, after China reported an escalation of manufacturing in May, crude oil soared to its highest level in seven months.

There seem compelling indications that China is not only strengthening economically and industrially, but that China is establishing strong footholds in oil-rich nations African that may or may not decide to sell oil to the United States in the future. For decades China and African nations have shared diplomatic and economic relations, sweetened by China in offering economic grants as well as either preferential or interest-free loans, according to an Institute for Analysis of Global Security (IAGS) report. A relationship with Africa is presumably much easier for China than it would be for the United States since China seems largely unconcerned about issues such as human rights and corruption, the report continues.

While China's connections oil-producing nations, such as the African nations, may result in a supply of oil, that in no way implies that China's dependence upon the Middle East for oil is therefore diminished. In fact, China's dependence on Middle East oil is expected to escalate.

The IAGS reports that China has acquired interests in "exploration and production in places like Kazakhstan, Russia, Venezuela, Sudan, West Africa, Iran, Saudi Arabia and Canada." And it further states that even though China has fostered connections these other nations, its "has become increasingly dependent on Middle East oil. Today, 58 percnet of China's oil imports come from the region. By 2015, the share of Middle East oil will stand on 70 percent."

The China effect on both oil consumption and oil prices cannot be denied. The country, with 1.3 billion people or about one-fifth of the world's population, is second only to the United States in oil consumption. And with its industrialization and economy flourishing and it's population expected to reach 1.5 billion by the 2030's, it seems that the country's demand for oil cannot help but surge.

And there are other factors impacting China's energy needs, including a migration of its people from rural to urban areas, massive highway construction program and movement from foot and bicycle traffic to automobiles. Where China's city streets were once bustling with bicyclists and pedestrians, today they are jammed with automobile traffic. Indeed, it is not surprising that many experts think that China's greatest need will be for light petroleum products, motor fuels and some petrochemicals.

Back in the fall of 2007, China had 120 million privately owned vehicles, according to The China Car Times. Of the country's vehicles, it was revealed that just 61.25 percent were privately owned, and another 38.75 percent were state owned. This information was reportedly derived from Chinese state news agency Xinhua and based on statistics from Chinas' Traffic Administration of Ministry of Public Security.

And six months after the publication of that article, China's Petroleum and Chemical Industry Association (CPCIA) revealed that "China's apparent consumption of oil products composed of gasoline, diesel and kerosene rose by 16.5 percent year on year to 52.73 million tonnes in the first three months, and crude oil rose by 8 percent to 91.8 million tones."

Of course, it seems that there is little question about China's growing need for energy. But less transparent are "the nature and scale of the energy and environmental challenges facing the country, the policy responses of the goverment, the existing legal and regulatory framework, and the implications of Chinese energy challenges," cites a report issued by Oil, Gas & Energy Law.

Highly interesting is China's fostering of relationships and acquiring equity in oilfields beyond the Middle East. "China is focusing its efforts ... on finding energy resources in other regions around the world, such as the Caspian, Russia, the Americas, the East an South China Sea and Africa," explains an Institute for the Analysis of Global Security (IAGS) report. "China has either established or been pursuing oil deals with 100 percent of those countries that have at least 0.5 billion barrels of proven reserves," the IAGS report states.

Given the finate supply of global oil and the growing needs of oil-hungry China and the United States, it seems critical to understand how the world's second largest oil consumer expects to meet its demands -- and how China's inroads, particularly oil-producing nations as those in Africa, will impact the United States' access to oil. What will happen if those nations decide to deal exclusively or primarily with China -- and to supply little or no oil to the United States?

So while the United States perhaps will want to keep a close eye on China's inroads into countries such as those in Africa, it seems that both China and the United States will continue to turn to the Middle East for extensive oil supplies.

Sources:

Fueling the dragon: China's race into the oil market"

China Car Times, Oct. 10, 2007

China's Oil Rush in Africa by Cindy Hurt, political-military research analyst with the Foreign Military Studies Office, for The Institute for Analysis of Global Security (IAGS), dated July 2006

Introduction to the OGEL Special Issue on 'China's Energy and Environmental challenges', Oil, Gas & Energy Law

China's Growing Demand for Oil and Its Impact on US Petroleum Markets, Congressional Budget Office, April, 2006

China's Oil Consumption hits record high in first quarter, April 2008

Weekend Reading

2009-05-29T16:52:00.027-04:00

Former Morgan Stanley chief global strategist Barton Biggs says that markets may continue to rise.
Click here

Text proposed by Obama administration for new global warming treaty calls for stricter rules on the US than most other nations, including China and Saudi Arabia.
Click here

Many of the world's "hottest" gold stocks traded at or near a 52-week high on Friday.
Click here

Worthwhile to keep an eye on the US dollar.
Click here

Has China embraced agricultural market reforms?
Click here

Key to avoiding worldwide food crisis may be increased potash production for fertilizers.
Click here

Two gas discoveries by StatoilHydro -- in Harepus prospect in the Norwegian Sea and the Corvus prospect in the Oseberg area of the North Sea.
Click here

Fewer Mexicans coming to US and sending money home.
Click here

Obama administration blocks helicopters for Israel.
Click here

Obama contributors rewarded with offers of plum positions in his administration.
Click here

JetAmerica Airlines offers some $9 fares between some East Coast and Midwest cities starting this summer.
Click here

NHL takes a lesson from NFL.
Click here

Kentucky distillery tour provides glance into whiskey-making.
Click here

Jamie Wyeth, following the death of his father Andrew Wyeth, has focused on his own art -- exhibition opens in Rockland, Maine this month.
Click here

Rare Audrey Hepburn stamp brings $93,000 at a Berlin auction.
Click here

Wall Steet Rally on Friday

2009-05-29T16:24:00.002-04:00

US stocks rallied on Friday -- the Dow Industrials soaring 96 points, the Nasdaq up 22 points and the S&P 500 up 12 points.

The major indices shot higher in the final hour of trading -- and CNNMoney.com reports that May's gains represent the first time that stocks have gained for three consecutive months since 2007.
Click here

Crude oil futures rose to $66.20 a barrel -- a six-month high, almost doubling since the lows of just over three months ago.

Morning Coffee And Reading

2009-05-29T03:30:00.011-04:00

India's GDP grew 5.8 percent last quarter, topping estimates.
Click here

Japan's factory output surges.
Click here

Most undiscovered natural gas is north of Arcic Circle in Russian territory.
Click here

Oil approaches largest monthly gain since 1999.
Click here

Scientists identify new Ebola-like virus in Africa.
Click here

J. Crew profit falls by 33 percent.
Click here

Novell profit more than doubles.
Click here

Dell earnings suffer 63 percent decline.
Click here

The Bulls Keep Marching On

2009-05-28T20:18:00.003-04:00

Once again the bulls assumed control of the market on Thursday -- as the Dow Jones Industrials moved up 103 points, the Nasdaq Composite gained 20 points and the S&P 500 gained 13 points.

Tata Expanding Into Low-Cost Housing

2009-05-28T20:11:00.002-04:00

Tata Housing, a unit of the Tata Group that is the designer of the world's cheapest car, has moved into the low-cost housing arena.

Click here

Indices on Wednesday Give Back Some of Prior Day's Gains

2009-05-27T17:28:00.000-04:00

After rallying on Tuesday, the major indices turned around on Wednesday and relinquished some of the prior day's gain.

The Dow Jones Industrials dropped 173 points on Wednesday, while the Nasdaq gave up 19 points and the S&P 500 finished 17 points lower.

Market Action Strong on Tuesday

2009-05-26T23:38:00.000-04:00

The Dow Jones Industrial Average soared 196 points on Tuesday, while the Nasdaq climbed 58 points and the S&P 500 posted a 23 point gain.

The market reacted strongly to a consumer confidence report for May that surged to 54.9, reflecting the largest gain since 2003 -- and to a Morgan Stanley raise of Apple to overweight based on the expectation that the iPhone will provide profit growth for the next two years.

Weekend Reading

2009-05-24T09:27:00.002-04:00

Individual investors should put their money into TIPS (Treasury Inflation-Protected Securities) as a hedge against inflation, according to Yale University's Chief Investment Officer David Swensen on the Consuelo Mack WealthTrack television show this weekend. "We've had this massive monetary stimulus, and it's hard to see how that does not translate into pretty substantial inflation or at least pretty substantial risk of inflation," he expressed.
(Blogger's note: Swensen is famous for advocating a diversified portfolio -- and TIPS as part of an investment portfolio seems to make sense for individual investors as well as for institutional investors.)

Abu Dhabi Investment portfolio manager Aksel Kibar believes that investors interested in oil stocks should look at the Arabian market, reports Bloomberg.com. "Relative performance charts indicate that this outperformance may last for another 12 months," said Kibar.
Click here to read article

Higher Open Indicated on Friday

2009-05-22T07:51:00.000-04:00

Early Friday morning stock futures were indicating a high start to the day.

Treasury Secretary Timothy Geither said that he will work to trim the US budget deficit, critical in order for the country to maintain its AAA rating, according to MSN MoneyCentral.

Gap Inc reported that earnings of $215 million compared to $249 million same quarter sales a year ago, reports MarketWatch. Same store sales fell of by 12 percent at Gap in North America, by 13 percent at Banana Republic and by only 3 percent at Old Navy.

Thursday

2009-05-21T08:09:00.000-04:00

As mentioned in our Twitter post yesterday, it seems important to remain watchful, cautious and always wanting to protect gains. Yesterday folks appeared giddy to get long exposure -- until they didn't later in the day. It seemed that the flippers were there.
We will see what today holds, but it appears that the market is headed toward a lower open.

Markets Appear Headed to Lower Open on Thursday

2009-05-21T07:09:00.000-04:00

Early Thursday the Dow, Nasdaq 100 and S&P 500 all appeared heading toward a lower open.

On Wednesday the US Federal Reserve reported that the nation's economy might shrink by more than expected this year -- Yahoo Finance

The Obama administration expects to get tough on companies that knowingly hire illegal immigrants, according Homeland Security Secretary Janet Napolitano -- Business Week.

Futures Point to Higher Open on Wednesday

2009-05-20T07:16:00.000-04:00

Prior to the opening bell on Wednesday, futures were indicated heading back into positive territory. On Tuesday, the Nasdaq gained 2 points. but the Dow and S&P 500 ended the day lower.

The Securities and Exchange Commission could lose some of its authority under a regulatory reorganization being drafted by the Obama administration, according to Bloomberg.com.
It is expected that under the reorganization, some of the SEC's powers would shift to the Federal Reserve. One possibility is that the Federal Reserve might assume oversight of firms considered "too big to fail."
SEC Chairman Mary Schapiro is reportedly frustrated that her agency has been offered little input into this process and will fight against any weakening of SEC.

Next week Microsoft Corp will likely unveil its new search engine to the public, reports The Wall Street Journal online.

Choppy Trading Session on Tuesday

2009-05-19T18:53:00.000-04:00

Major indices ended mixed after a choppy trading session on Tuesday. The Dow Jones Industrial Average plunged 29 points today, giving back some of the 235 point gain of Monday. The Nasdaq ended the session with a gain of 2 points to 1,734 -- and the S&P 500 dipped by 1 point to 908.
Housing starts dropped by 13 percent, a record low -- the majority of the decline being in the multifamily home category.

HILL AND STREET NEWS

YOU'VE HEARD IT BEFORE -- BUY LOW, SELL HIGH AND PROTECT PROFITS

IMPORTANT READING

UN WANTS NEW GLOBAL CURRENCY TO REPLACE DOLLAR -- IMPORTANT READ

AFTER THE LABOR DAY WEEKEND

WEEKEND READING

FRIDAY -- WITH A HOLIDAY WEEKEND AHEAD

THURSDAY, KEEPING A SHARP EYE

WEDNESDAY -- COMPUTER PROBLEMS FIXED

FRIDAY -- TECHNICALLY ALL IS WELL, BUT WE WATCH THE MARKET WINDS

THURSDAY -- LAST LAZY DAYS OF SUMMER

PROTECTING GAINS IS ALWAYS A GOOD THING

THE TREND IS YOUR FRIEND

THE BULLS STILL HAVE IT THEIR WAY

WEEKEND READING

FRIDAY -- EYEING PRECIOUS METALS AND MINERS

THURSDAY -- BULLS STILL IN CONTROL FOR THE MOMENT

WEDNESDAY

TUESDAY -- WATCHING FOR SIGNALS

WHAT WILL THE DIP-BUYERS DO HERE? WE ARE WATCHING.

WEEKEND READING -- DIFFERENT THIS TIME

FRIDAY -- PERRY COMO STANCE STILL IN EFFECT

THURSDAY -- THE BULLS STILL IN CONTROL

WEDNESDAY

HILL AND STREET NEWS' STANCE

AMERICAN IDOL AND PAULA ABDUL, CKX AND 19 ENTERTAINMENT

MONDAY MORNING

WEEKEND READING

JOB LOSS RATE DROPS TO 9.4%

WATCHING AND WAITING

WATCHING AND WAITING

FUTURES INDICATE LOWER OPEN

****KEEPING A SHARP EYE ON $USD****

BACK IN THE SADDLE AGAIN

FRIDAY -- FUTURES POINTING TO LOWER OPEN

THURSDAY, FUTURES INDICATED HIGHER

WEDNESDAY -- BANKING REPORTS RAISING SOME CONCERNS

GOOD ENTRY POINTS ARE KEY

ARE THE BULLS BACK IN CONTROL?

WEEKEND READING

FRIDAY -- WITH A LOT OF INFORMATION TO DIGEST

WATCHING THE WINDS FOR DIRECTION

WELCOME

INTEL SETS THE TONE

TUESDAY -- GOLDMAN SACHS NEWS

EARNINGS SEASON SWINGS INTO HIGH GEAR THIS WEEK

WEEKEND READING

CHINA -- AN EMERGING SUPERPOWER (Repeat)

WEEKEND READING LIST WILL BE BACK, ANOTHER FEATURE SOON

IT IS ALL ABOUT PATIENCE

THURSDAY OPEN LOOKS TO BE HIGHER

FLATTISH TO HIGHER OPEN ON WEDNEDAY

LOOKS LIKE A LOWER OPEN FOR TUESDAY

AFTER THE 4th OF JULY HOLIDAY

THURSDAY -- FUTURES INDICATING LOWER OPEN -- DISAPPOINTING JOBS DATA

CHINA -- AN EMERGING SUPERPOWER

WEDNESDAY MORNING

TUESDAY -- BEFORE THE OPENING BELL

Monday Market And Trading

Weekend Reading, June 27 and 28

FRIDAY'S MARKET

FUTURES INDICATE FLAT OPEN THURSDAY

WORLDWIDE THE RICH LOST 20 PERCENT OF THEIR WEALTH IN 2008

Futures Looking Higher on Wednesday

Futures Pointing to a Higher Open for Tuesday

Futures Once Again Pointing to a Lower Opening

Father's Day Weekend Reading

Back On Board

Computer Not Functioning -- Should be back posting messages tomorrow

Monday Morning -- Futures Pointing to a Lower Open

Weekend Reading -- An Amazing List of Must Read Articles

Index Futures Pointing to Flat Open on Friday

Canada's Financial Post As a News Resource

A Study of Favorite Stock Selections

Thoughts on This Week

Weekly Wrap-Up and The Week Ahead

Weekend Reading--Compelling Stories & Some Fun Links Too

Friday Significant News

Complete text of President Obama's Cairo speech

Thursday's Action: At OK Coral, it was OK

KEEPING A SHARP EYE ON $USD