MinKL Invest

Saturday, 17 September 2011

No Recession Scenario: Is the Bottom In?

By: Kevin Cook

September 16, 2011

If the consensus view right now is for a coin-flip's chance we see a mild recession, the market sure is acting healthy. When you throw the weight of Europe's debt crisis on top of that probability, it's a wonder we haven't broken the lows.

My approach has been to watch the fundamental backdrop of economic uncertainty and to trade the emotional swings against high-probability support and resistance around it. Here's an update of the S&P 500 chart I showed earlier in the week targeting a rally to 1,220-1,240.

This rally doesn't appear over yet, especially with the intraday strength on Friday making a second run for the highs at 1,220 as of noon Eastern. A punch through the steeply dropping 50-day moving average at 1,228 is still very likely.

And a touch of the upper channel trend above 1,240 is still in line with the very bullish bounce off of support at 1,135. A push through the previous swing highs around 1,225 will activate lots of technical buying programs and related short-covering that should have the strength to get us to 1,240. .......

http://www.zacks.com/commentary/18852/No+Recession+Scenario%3A+Is+the+Bottom+In%3F

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Beware the "Value Mirage" - Zacks.com

By: Steve Reitmeister

September 16, 2011

Many investors are drooling over the perceived values they see in today's stock market. However, many of these people are falling into a dangerous trap that will lead to horrific losses in the days to come.

Below I will detail the mistakes these investors are making, so you can avoid the same fate. Plus I will give strategies to make money in the current turbulent market environment and the years ahead.

Looming Recession = 40% Drop in Stocks...Or More

Certainly I'm not the first guy to warn you that a recession is likely on our doorsteps. You don't have to look far to see the signs:

US Debt out of control
Consumer Sentiment is plunging
Manufacturing sector is contracting
No Jobs Growth...and signs of getting worse
Oh, did I forget to mention the European Debt Crisis?

I could go on, but I think you get the point. And the sad fact is that the average recession brings about a 40% decline in stock prices. Unfortunately this has the markings of an even worse than average recession, and thus worse than average bear market.

Why Do Stocks Decline So Much?

It's really a simple 2-part equation: .......

http://www.zacks.com/stock/news/60940/Beware+the+%26quot%3BValue+Mirage%26quot%3B

Mineweb.com - Possible effects on gold of yet another major banking crisis - GOLD ANALYSIS | Mineweb

Mineweb.com - The world's premier mining and mining investment website Possible effects on gold of yet another major banking crisis - GOLD ANALYSIS | Mineweb

The severity of the latest crisis affecting European banks - and beginning to spread globally - is reminiscent of 2008 and could ultimately lead to a new role for gold in the global monetary system

Author: Julian Phillips
Posted: Friday , 16 Sep 2011

BENONI -

LOSS OF FAITH AND THE DECAY OF TRUST IN MEASURED TERMS

With the downgrade of Societe General and Credit Agricole, two of the largest French banks, because of their Greek debt holdings, it is certain that any default by Greece (which still looks more than likely) will trigger major banking crises. Moody's lowered Credit Agricole to Aa2 from Aa1 because of its Greek holdings, and will continue to review the impact of funding markets on the rating. Societe Generale was reduced to Aa3 from Aa2, with a negative outlook, as Moody's re-evaluated its level of state support. BNP Paribas (BNP) SA, the largest French bank, had its Aa2 long-term rating kept on review for a possible cut. French lenders top the list of Greek creditors with $56.7 billion in exposure to private and public debt. BNP Paribas has declined 41% in Paris trading this year, Credit Agricole has fallen 46% and Societe Generale has dropped 55% on escalating concern that the European sovereign debt crisis is turning into a banking crisis. ......

http://www.mineweb.com/mineweb/view/mineweb/en/page33?oid=135581&sn=Detail&pid=33

New Risks For A Market Already Under Great Stress | International Forecaster Weekly Bob Chapman The International Forcaster

September 14 2011: The prices of gold and silver were subdued for so long but no more, greater swings in metals forecast, a new scenario today for this current phase of the metals market, new bumps in the road to look out for, purchasing power robbed with the printing of money, deficits out of control.

In the case for gold and silver, it has been go long and stay long for 11 years. During that period great gains have been made during what was the formidable first phase of the gold and silver bull market. Gold was $260.00 and silver was $3.50. Some stocks rose from $4.00 to $86.00, some from $0.80 to $42.00. This performance in spite of gold and silver suppression by the US government. In their desire to keep gold and silver subdued all the government really accomplished was to offer an opportunity for buyers to buy at lower prices than they normally would have been able too. In that process buyers have been able to stay ahead of inflation and many have made large profits. We have convinced almost all not to try to trade these markets, because they have not been professionally trained to do so. That concept has worked quite well and will continue to do so. The problem with novice trading is that if you get out you may never get back in. You must outsmart the market ignoring the gyrations and stick to the long-term objective. This bull market in gold and silver, now almost 11-1/2 years old will probably last another 5 to 10 years even if the system collapses. In the end our formula has worked well and avoided commission costs, something we are acutely aware of having been in the brokerage business for almost 30 years.

Each phase of the bull market is somewhat different. It wasn’t all that long ago that we predicted swings in gold prices of $20 to $30 to $100 a day in gold, than $0.50 to $2.00 in silver swings that we have just experienced. Next it will be $100 to $200 to $400 swings daily. Long-term investors may not like volatility, but traders sure do, and that draws more players into the game. A good example is the past few weeks where we saw $200 swings in gold and $5.00 swings in silver. The gold and silver shares, having languished for three years have started to come to life. They have been victims of shorting and naked shorting by the PPT and hedge funds, which appears to be lessening. We also see more institutions as buyers of these issues. Brokerage firms have advised their brokers to use the ETFs, GLD and SLV, as vehicles to play the gold market, when they do not have the physical gold and silver they say they have. They are an accident waiting to happen. The unexpected downdraft mining shares experience three years ago was caused by institutional de-leveraging of positions that were 100 to 300 to one. Even banks got up to 70 to one. That has changed with leverage at 10 to 30 to one and almost all of these participants are either out of the sector or short. The scenario today is totally different and explosive. ........

http://theinternationalforecaster.com/International_Forecaster_Weekly/New_Risks_For_A_Market_Already_Under_Great_Stress