What We're Reading

The stock market continues to weaken, as evidenced by these ETF charts.    If you zero in on a sector you wish to short, I would bear in mind that ETFs are comprised of market leaders.  I would look for names "outside" of the ETF components; consider them leaders and you want the weaklings to short.

The reasons for weakness are numerous. 

Consider the election weight (a Trump win would weigh on equities but Clinton weighs on pharma pricing).  Then there are flat-to-dropping sales.  Of course the USD movement (up will weigh on commodities and large caps with overseas exposure).  Then there's those who feel we are already at or above maximum value and they're not buying here.  They're hedged, short some and long financials ahead of the Fed rate hike.  Then there's that Fed hike itself.  High dividend is flushing down the toilet (SDY) in September.  Overseas weakness with China not helping boost confidence for demand.  And we also have more failure at the OPEC talks with no offer from o

I can’t tell you that gold is a bad investment. Even after the recent plunge, if you bought gold in 2004, your investment would have earned you an annualized rate of about 10.4 percent, after accounting for inflation. That is darned impressive. If you bought in 1994, it would have earned about 3.9 percent per year -- not too shabby. Even if you bought all the way back in 1984, you would have earned 1.8 percent in real terms. (Of course, this assumes that shadowstats.com is wrong, and that inflation hasn’t been massively understated.)

In addition to delivering decent long-term returns, gold has been a way to spread or offset investment risk. As my co-blogger Yichuan Wang showed last year, gold’s return is somewhat negatively correlated with interest rates, so that a bet on gold is to some degree a bet on lower rates. This is actually the prediction of some old economic models, which also indicate that gold should have a positive rate of return over the long term. But a lot of the varia

For all you doubters out there, yes I have out my pompoms on the move in gold and silver this week.  You scoffed in March when I said a right shoulder could be formed.  Then again chuckled in April and May 3rd but I ask you who's laughing now?  Already I'm seeing tweets of a possible H&SB and I'm comfortably long SLV calls, enjoying the sunshine.  Scoff all you wish you financial gurus.  Charts don't lie; people do.

This daily for GLD and SLV is intriguing, showing both breaking out of falling wedges (they should test support which would be great to get in or add more shares or calls).

Gold seasonal demand doesn't actually kick in until late Summer for festival season in India, unless you're a believer of getting in early.  Silver does see some season demand in the Summer due to coin manufacturing BUT these two could also be signalling some fear in the equity market topping.  Of course this could also be nothing more than short covering (inflation hedge?) but it is what it is  Bull

• Stocktwits: "investor say the bottom is in for gold"
• Hey, wait a minute.  Didn't StockBuz say watch for a gold (GLD) weekly right shoulder to form back in March and early April?  Even posting on the gold miners here.  We're ahead of the herd once again......maybe.   (click image to enlarge)  At least risk is minimal; stop below $120
• SINA pre-announced an earnings beat but also announced it has received two notices from Chinese regulators stating its "License for Online Transmission of Audio-Visual Programs would be revoked due to certain unhealthy and indecent content from third-parties or by users" on Sina.com and its affiliated online literature site.  Ouch!
• JPMorgan becomes the first to warn on trading revenues in Q2, expecting markets revenue to slip 20% after declining 17% in Q1.
• AAPL wins a Federal jury decision again Samsung on smart phone patients but it's a victory for Samsung with less than 10% sought, actually being awarded ($120m vs. $2bil).  The jury rejected Ap

• No shocker here as the FTC issues a blistering rebuke of states limiting sales of TSLA direct consumer sales.
• So much for the peace accord with Russia as they begin military exercises (WSJ)  Markets will not like this continued uncertainty.  Watch crude oil, gold, silver and copper.  You will note that bonds $BND (flight to safe haven) have been holding up.  Not everyone is pouring money into equities.
• The first regulation proposals are coming out on e-cigarettes  $LO currently holds a 42% market share..
• Talk about putting cash to work.  AAPL has bought 24 companies in the last 18 months.  Searching for innovation allthewhile announcing an increase to their stock buyback, stock split and quarterly dividend to keep value investors in the name.  Oh, and an earnings beat once again to a low bar set.  Way to go Tim Cook.
• The FCC said it will propose rules today that could give high-speed Internet providers more power on what content moves the fastest on the Web based on which firms pay th

It may not be a popular view but then again, when everyone's on one side, doesn't the market tend to do the opposite of what's expected?  It seems the Elliott Wavers of the blogisphere are calling for gold to head lower here but I stand by my call of last week that the low will hold and we'll see a head-and-shoulders bottom (right shoulder) forming here.  Silver and all of the miners reflect a similar pattern, as posted here at StockBuz last week.  The weekly even resembles a possible double bottom.  Wouldn't that be sweet!  At the very least, down side risk is defined (last weeks low) but with fear in the market and heavy selling continued after the first of the month, utilities (safe haven) are already hitting a new high and I believe flight to precious metals will continue as well.  At least in the near term.  Not a long/hold.

• For all the worrying about weather impacting job creation, Trim Tabs say real time tax receipt data (allegedly more reliable than BLS data) suggests that the economy has been picking up steam.  24/7WallStreet
• A 8.2% magnitude earthquake overnight off the coast of Chile with a 2 meter tsunami.  Supposedly mining operations have not been affected buy you try to tell that to silver and gold this morning.  They're not buying it (so far)
• Interesting metrics from Flurry on mobile usage today.  GOOG accounts for 18% of time spent by consumers which includes YouTube, while FB is 17%.   Android web browsing is losing market share, going from 20% or usage down to 14%
• Facebook apps continue to hold strength ahead of Google according to Comscore data..  Twitter's app was only used by 22.8% of U.S. smartphone users in January. 77.6% used Facebook's core app, and 27.5% Instagram. Five different Google apps were used by over 40% of users.
• The Affordable Care Act (Obamacare) met it's targ

Sometimes it pays to simply remove the distraction of moving averages and let the chart movement speak for itself.  What say you StockBuz?  Are those head-and-shoulders bottoms or no?  Long gold and silver (and miners) with a stop below last weeks low (to your tolerance).  Partial on a breakout, move up stops to b/e, final target equal to distance of head to breakout zone.  Call it flight to safe havens, call it massive short covering/profit taking, .  Who cares.  The risk/reward is irresistible.