October 30, 2008

The list for today:

NEOG
LPHI
PETS
STRA
AFAM
STE

October 29, 2008

AEX Index	259,58	9,09%	S&P 500 Index	930,09	-1,11%
Dow Jones Indus. Avg.	8990,96	-0,82%	Nasdaq Composite	1657,21	0,47%

Here is the list for today:

AVAV

EBS

PSQ

CMTL

DLTR

HOMB

LPHI

APOL

MG767

VASC

VITL

ICUI

AMCP

OZRK

CRI

October 28, 2008

A massive rally on more than average volume.

AEX Index	237,96	0,36%	S&P 500 Index	940,51	10,79%
Dow Jones Indus. Avg.	9065,12	10,88%	Nasdaq Composite	1649,47	9,53%

Here is the list of shares rising on higher volume:

1. IKN
2. CPSI
3. HOMB
4. LPHI
5. PETS
6. VASC
7. AMCP
8. PCBK
9. OZRK
10. TMTA
11. CRI

Many of the stocks above are forming nice bases and can break out when the wave turns convincingly. That means 4-5 updays of rally ... on high volume.

October 25, 2008

Summary:

AEX Index	245,92	-4,63%	S&P 500 Index	876,77	-3,45%
Dow Jones Indus. Avg.	8378,95	-3,59%	Nasdaq Composite	1552,03	-3,23%

here are the movers of today:

1. DXD
2. SDK
3. SDS
4. PSQ
5. FXY
6. LPHI
7. EEV

It is remarkable day. Only one stock has held out LPHI. rest are just ultrashort. This is the first time this has happened since the time this blog has started. Is this the sign of extreme negativity, which might indicate that we are close to a recovery (which will probably be a relief rally). Another 10-15% downside at max and then a strong recovery is expected.

But still the stocks which have been mentioned in this blog have held out very strong above the 50DMA and 200DMA. Especially the biotech companies and scientific and technology sector.

October 23, 2008

AEX Index	257,85	1,09%	S&P 500 Index	908,11	1,26%
Dow Jones Indus. Avg.	8691,25	2,02%	Nasdaq Composite	1603,91	-0,73%

List for today:

1. PSQ
2. SMN
3. SFK
4. TLO
5. GHN
6. PETS
7. ENSG
8. PLW
9. VASC
10. VITL
11. THS
12. SCB
13. UTEK

Of special notice : UTEK . it is developing a cup with a handle shape.

October 23, 2008

AEX Index	255,08	-5,30%	S&P 500 Index	896,78	-6,10%
Dow Jones Indus. Avg.	8519,21	-5,69%	Nasdaq Composite	1615,75	-4,77%

today's list:

1. CSLR
2. CPSI
3. SMN
4. EWV
5. APSG
6. PETS
7. SPTN
8. LG
9. ENSG
10. VASC
11. ALGT
12. UBCP
13. CRI
14. EEV

October 21, 2008

EBS

Here is the list for today:
1. QCOR
2. ITWO
3. SMN
4. NEOG
5. LPHI
6. CHRK
7. ENSG
8. ICUI
9. ALGT
10. MBFI
11. HBHC
12. GSIT

new website

I am making a new layout for the old blog on investment ideas. For the meantime I shall be redirecting traffic to this blog . Sorry for any inconvenience. For all rss feed please use the current feed.

October 20, 2008

Here is the graph for DOW industrials. A clear flag pattern has formed. This will provide a downward impulse to the index. So expect a breakout on the downside unless something miraculous happens.

Although not shown here the nasdaq shows a similar formation. Moreover notice that volume on rise is below the average. So not a convincing rally at all today. Moreover notice the remarkable volume of sell off on 10th October. The highest intraday sell off in a year. All the sectors which have not yet broken down will probably break down. So watch and beware....

Market overview today:

AEX Index	269,41	6,80%	S&P 500 Index	985,40	4,77%
Dow Jones Indus. Avg.	9265,43	4,67%	Nasdaq Composite	1770,03	3,43%

Stocks on rise on high volume :

1. ADG
2. EBS
3. CPSI
4. TQ
5. NEOG
6. LPHI
7. PETS
8. GEHL
9. SPTN
10. CTGX
11. MMSI
12. ROCM
13. THS
14. DR
15. SCB
16. ATLO
17. EVBN
18. SURW

October 17, 2008

AEX Index	252,26	1,70%	S&P 500 Index	940,55	-0,62%
Dow Jones Indus. Avg.	8.852,22	-1,41%	Nasdaq Composite	1.711,29	-0,37%

VIX :70.33
Change: 2.72 (4.02%)

Here is today's list of movers for today.

1. SDS
2. LPHI
3. ALCO
4. CTGX
5. THOR
6. ICUI
7. DR
8. SCB
9. PGC
10. EVBN
11. GRNB
12. BTFG
13. UTEK
14. LNDC
15. UST
16. HWKN

THE COUNTDOWN of a manipulated gold price is running out

So what’s wrong with gold? Why has the price not skyrocketed? Do you remember the day when Bear Stearns failed? Do you remember what happened on that day with gold? It spiked up to $1032 per ounce and marked its highest intraday price ever (in nominal price terms – remember, the inflation adjusted high would be in the $2300 per ounce range). Now in retrospect, doesn’t the Bear Stearns event look like some kindergarten party? Yes, the financial system has been under much more stress recently. What we have experienced in the last days was the biggest effort ever made to rescue the global financial system and it is still not clear if we are out of the storm. But nevertheless gold has even retreated to the $850 range. Does it looks strange or not?

In times where the entire financial system is on the edge, you would expect gold to soar because of its safe haven attributes. Obviously something is seriously wrong. Right now, we are experiencing two forces to fight with each other: the physical market and the paper market. To understand what’s going on you have to know that the paper market is the short term market and the physical market is the long term market.

The place of most attention for the paper gold market is the COMEX. The price you see in the newspaper is the price of the gold future traded on the COMEX. Unfortunately, it is a paper market which is very vulnerable for manipulation and it does not reflect the real market which takes place in physical supply and demand.

In the past, commodity producers used futures to hedge prices and in many cases physical delivery took place. Today, futures are by the majority just markets for speculators trading paper and not asking for physical delivery. Just remember what happened with oil some months ago – oil was trading at roughly $ 150/bbl and even official sources claimed that the reasons were demand and supply based – they neglected the effect from speculators and deep pocket institutional investors. Well, the high was set in July. Do you really think that demand has fallen that sharply or supply has caught up that fast since then? Maybe you remember the intraday spike in July which was responsible for the all-time-high? This was triggered by short-covering from a Texas based energy trading firm. Do you think this has something to do with demand and supply or do you think this is just a paper market movement? Yes, this is a paper market movement and for gold the price has been depressed.

Also remember, banks are not lending money to each other and they have to do whatever is possible to stay liquid. Have you ever heard of the gold carry trades? They are real and they are most likely at least responsible for a part of the paper selling pressure on gold. Central banks have loaned a portion of their gold holdings over the past years. GFMS and Virtual Metals have estimated that gold on loan position amounts to between 4000 and 5000 tons. GoldMoney believes the gold loan position is more likely to be 8000 tons to 15,000 tons, whereas Cheuvreux’s estimates central banks have lent as much as 10,000 tons to 15,000 tons of gold, which it suggests is between a third and half of the reported total of their reserves.

Banks were desperate to get cash and therefore were selling gold futures into the market – the futures were most likely covered by gold lent from central banks. I also assume that central banks were assisting in this procedure since it was another way to support the credit system. Actually, it was a very agreeable way since it was done without any public knowledge (and particularly without any media coverage) and without any immediate consequences on the monetary aggregates (at least for the short term). I can’t prove this action but there are many indications that this happened:

• Soaring gold lease rates as an indication that gold has been lent heavily and as an indication that central banks started at some point to tighten. The rising gold lease rates are also an indication that central banks weren’t willing to lend their gold at low interests any more.
• Very strong selling on the COMEX gold future particularly when risk aversion was strongest and when banks were struggling for liquidity. Last Friday, gold crashed over 7% in a day of pure panic. Would you really sell gold on such a day? Interestingly, the selling pressure started very late in the day when volume was drying-out.
• Confirmation from gold trading desks that central banks started to tighten gold lending. Obviously, they were not willing to lend their gold to a potentially insolvent counterparty at a low interest rate. Nevertheless gold lending still happened but at higher interest rates and this gold was sold into the market.

What about the long term implications of the bailout packages on gold? The possible threats are severe and will very likely lead to higher inflation. The sum of the overall bailout packages has now reached more than $4600 billion, huge isn’t it? The extremely aggressive fiscal and monetary policies now in place are ticking time bombs for inflation in the future. Right now, the world fears about deflation and inflation are not a threat. That’s true, but what happens if the official agencies now in charge are too late to tighten the monetary flood once economies are recovering? Yes, this will lead to a major inflationary backlog of potentially giant proportions.

I believe if very experienced and smart investors such as Mr Jim Rogers see inflation as a very real threat in the future, you should listen to them. You might want to watch this interview “Inflationary Holocaust” by Jim Rogers. Another interesting interview regarding the same issue and with further implications on currencies such as the dollar, euro and sterling is “Will bailouts risk hyperinflation?”

I picked up the topic of a global currency crisis in previous articles and I’m sure this will happen in the not too distant future. Remember, the value of a currency is in the long term determined by its fundamentals (and not short covering or pure safe haven buying as it happens right now in the US dollar). I expect the old economy currencies will devaluate against the currencies of the emerging countries, particularly Asian countries. They have huge amounts of money, economies with excellent long term growth potential and no hidden financial time bombs. Do you really think the US dollar is stronger or is it more likely that other currencies got weaker against the US dollar? That’s a very important difference.

The US dollar got stronger because of a giant flood of money pouring into the US treasury market. This was safe haven buying at its best. But when the storm calms, do you really think these investors feel comfortable? I don’t think so. In the mid to long term, the US dollar and the rest of the highly inflated global currencies will devalue. It’s also interesting that according to the World Gold Council, CBGA 2 signatories sold only 357 tons gold in year 4 of the agreement, well below the 500 tons ceiling. Are they running out of ammunition or did they finally understand that they'd better hold on to their gold since this is the backbone of their paper money?

So what’s going on in the gold market? Right now, we have a huge wave of paper gold coming into the market and therefore depressing the price of gold. I’m speaking about gold futures that have been sold by large unwinding transactions mainly from hedge funds which have to reduce their exposure or which are liquidated entirely. Lots of margin calls for private and institutional investors also played their part in this game.

A pretty new invention are the so called ETNs (Exchange Traded Notes) and virtually thousands of other paper products (called certificates, baskets, structured products, etc.). Do you remember the word ‘counterparty risk’? Does this ring a bell? Yes, it should. Even if you have bought an ETN or another paper based product on gold, it is not necessarily backed by physical gold, it is actually nothing else than a debenture with a payment guaranty of the issuer – a great product if the issuer is Lehman Brothers or Bear Stearns, etc. After Lehman Brothers went bankrupt, many investors found out that even their capital protected products were worthless. I strongly believe the current sell-off in commodities and also gold is a substantial part triggered by huge selling of paper products. So here we are again, the paper market vs the physical market.

The physical market is virtually exploding! Demand is so strong that you have to wait several days or even weeks before you get your physical gold (coins or bars). So how can you explain that physical demand is so incredible strong that you can’t get your coins and bars and the price of gold (remember COMEX paper market) is still falling? I can’t and this makes me think that something is seriously wrong and will eventually lead to a huge spike in the price of gold!

It is not only the physical demand that is very strong, it is also the gold ETFs which are adding up gold and just reached new record levels, but still the price of gold is falling.

There is one thing I don’t like about some of the gold ETFs. Did you know that some allow short selling? This looks like a minor issue but could have a major effect for investors who think they own a fund which is fully backed by physical gold. Maybe this is not the case: The ETF’s administrator only knows the net long position and backs this amount with physical gold.

Imagine, we have 100 long positions (from investors who want to have a fully backed gold ETF) and we have 50 short positions. Overall this means a net long position of 50 (and I guess the fund administrator only covers the net long position with physical gold). So what happens if the investors with the 100 long positions are asking for physical gold delivery? Well, there is only enough gold for 50 long positions in the ETF’s vaults. But the fund administrator has to deliver the physical gold for 100 long positions. Maybe this triggers a short squeeze in the physical gold market? I don’t like this idea and therefore I prefer holding physical gold in a vault or in an ETF which does not allow any short selling. Unfortunately, the world’s biggest gold ETF “SPDR Gold Shares” (GLD) allows short selling. I like the instrument as a vehicle to track the price of gold but I don’t like the short selling possibility.

Overall, the bull market in gold is far from over. Even though most investors don’t really understand what is going on with the price of gold. It’s like an elastic spring, the more you depress it, the higher it jumps once released. Right now, inflation is not a problem, but it might get one in the future again and this time probably even bigger than before. Besides of course other fundamental reasons to buy gold (e.g. growing jewelery demand from emerging countries, asset hedge, currency protection, etc.).

Investors should preferably buy gold stocks such as Goldcorp (GG), Barrick Gold (ABX), Newmont Mining (NEM), AngloGold Ashanti (AU) or Harmony Gold (HMY) to gain direct exposure and leverage to a rising gold price. But nevertheless, physical gold in fully backed gold ETFs or in gold coins/bars remains a core asset besides some gold equity holdings.

(Courtesy: seeking alpha)

October 16, 2008

AEX Index	248,04	-5,69%	S&P 500 Index	946,43	4,25%
Dow Jones Indus. Avg.	8979,26	4,68%	Nasdaq Composite	1717,71	5,49%

List for today:

1. DRS
2. TRCA
3. EBS
4. CPSI
5. ZEP
6. CODI
7. SPTN
8. LG
9. ALK
10. TOWN
11. TRST
12. EVBN
13. UVSP
14. CBU
15. UBFO
16. PCBK
17. GRNB
18. OZRK
19. HTLF
20. TCBI
21. CRE
22. UTEK
23. SHEN

October 15, 2008

AEX Index	263,00	-7,56%	S&P 500 Index	907,84	-9,03%
Dow Jones Indus. Avg.	8577,91	-7,87%	Nasdaq Composite	1628,33	-8,47%

Vix Index Value :69.25
Change :+14.12 (25.61%)

Another day of panic and sell off. But notice how some of the sectors are holding up and still being bought. Biotechnology is still strong.Expect more sell off over the next few days. Should set up the stage for recovery ...

So here is the list for today.

1. DRS
2. EBS
3. ONI
4. IEI
5. SH
6. SCC
7. SDS
8. SZK
9. SDP
10. EII
11. EVBN
12. OZRK
13. PBIB
14. NCEM
15. EEV

October 13, 2008

A day of rally after the historically worst week of the last century. Let us see what the indices are up to:

AEX Index	285,27	10,55%	S&P 500 Index	1003,35	11,58%
Dow Jones Indus. Avg.	9387,61	11,08%	Nasdaq Composite	1844,25	11,81%

^VIX

54.99

-14.96

Does this mean a convincing rally and we are all ready to ride the wave up ? wait and have patience. Generally a rally gains strength and confidence after 3-4 days of strong up rally.

But for the meantime here are the day's movers which are being bought on large volumes.

1. AVAV
2. IMCL
3. TRCA
4. CXSP
5. FSCI
6. SVR
7. LPHI
8. ACET
9. SPTN
10. PNY
11. QSII
12. CIA
13. VITL
14. ALGT
15. UBSH
16. TOWN
17. PGC
18. ATLO
19. RCKB
20. NAL
21. UBFO
22. TCBK
23. CSFL
24. SYBT
25. ATML
26. SHEN
27. HWKN

October 10, 2008

First the market statistics:

AEX Index	258,05	-8,48%	S&P 500 Index	899,22	-1,18%
Dow Jones Indus. Avg.	8451,19	-1,49%	Nasdaq Composite	1649,51	0,27%

Today's movers on high volume

1. ADG
2. CSLR
3. QCOR
4. EBS
5. GRIF
6. SCC
7. SFK
8. SZK
9. DOG
10. PSQ
11. SH
12. DXD
13. SDS
14. RMS
15. SDK
16. RSW
17. BIL
18. SJF
19. SJL
20. EFU
21. LDG
22. UNFI
23. AJG
24. DMND
25. QNTA
26. CZNC
27. CCBG
28. PRK
29. TFSL
30. FNLC
31. NAL
32. UVSP
33. UBFO
34. CSFL
35. MCBI
36. TCBI
37. ABBC
38. EFZ

October 9, 2008

Another day of downward movements:

AEX Index	281,97	-1,29%	S&P 500 Index	909,92	-7,62%
Dow Jones Indus. Avg.	8579,19	-7,33%	Nasdaq Composite	1645,12	-5,47%

Seems the market moves are being completed very fast. We should see a bounce back and rally soon. This is a very positive sign. Too much of bad news is good news. Watch out for the big movers.

Strongest sectors to watch out are:

1. Biotechnology

• SQNM
  
• IMCL
  
• EBS
  
• QCOR
  
• MIPI
  
• BPAX
  
• TRCA
  
• ONI

2. Business / Management services

• BKR
  
• INOC
  
• HPY
  
• APAC

Today's movers on high volume

1. ADG
2. SHV
3. SDS
4. MZZ
5. QID
6. DXD
7. MYY
8. SIJ
9. SJL
10. ITE
11. RSW
12. SZK
13. SCC
14. SFK
15. EUM
16. SH
17. DOG
18. SVR
19. EFU
20. UNFI
21. RGLD
22. ARDNA
23. THS
24. ATML
25. EFZ
26. HWKN
27. DCM
28. EEV

October 7, 2008

Another day of massive fall in us indices:

AEX Index	309,44	-1,00%	S&P 500 Index	996,23	-5,74%
Dow Jones Indus. Avg.	9447,11	-5,11%	Nasdaq Composite	1754,88	-5,80%

Here are the day's movers:

1. EEV
2. EFZ
3. FHC
4. OFLX
5. EFU
6. DOG
7. PSQ
8. SH
9. SHY
10. IEF
11. SJF
12. ITE
13. SDK
14. SJL
15. SIJ
16. DXD
17. SDS
18. SFK
19. IMCL
20. PVSW

stocks moving on heavy volume ( 06 October, 2008)

1. EEV
2. EFZ
3. WEDC
4. BHLB
5. FNLC
6. ORIT
7. TOWN
8. SHBI
9. DMND
10. PLW
11. OFLX
12. LG
13. SPTN
14. UIL
15. PTIE
16. EFU
17. NEOG
18. EMS
19. WWY
20. RSW
21. IEF
22. EUM
23. SFK
24. SJF
25. SIJ
26. SCC
27. SDK
28. FXP
29. EWV
30. ITE
31. TLO
32. PSQ
33. DXD
34. MZZ
35. SH
36. DOG
37. MYY
38. REW
39. SDS
40. QID
41. IMCL
42. DNDN
43. GTXI
44. CSLR

another black monday (06 october, 2008)

First the overview of the market indices:

AEX Index	312,56	-9,14%	S&P 500 Index	1056,89	-3,85%
Dow Jones Indus. Avg.	9955,50	-3,58%	Nasdaq Composite	1862,96	-4,34%

The AEX index graph is shown for the last 20 years. The current downward spiral is showing signs of ending. This means that once again there is light at the end of the horizon. Have patience and wait for the breakout from the spiral and go for some short term uptrend. This may give rise to a relief rally.
Chances are that if the index recovers to around 347 level(that is a rally of 11% or so) it may begin to climb out of the spiral. Taking lessons from last rally in 2003 this may take us to level of 500 or so.

On the other hand if the head and shoulder pattern has to be completed then the index drop will extend to 217.

Which of these scenarios will play out we will have to wait and watch. For now be careful and keep in mind these two scenarios.


At the end of the day the market did rally gaining more than 5%. This shows that there is still buying power amid the heavy selling . Clear signs that it is an oversold market.

The indications are that value is starting to reemerge. But still market volatility and uncertainity prevails with huge interday swings in indices. Have patience and observe the market moves. the end of bear market is not yet in sight. Panic still persists among search for value.

Factors at play:

1> inflation
2> recession
3> Confidence crisis.
4> Liquidity crisis.

Inflationary pressures of commodity is temporarily in check. this is mainly due to recessionary fears and lack of liquidity for speculation.

Main factors among the above four is lack of confidence. That is a very tricky thing to restore. Money cannot buy confidence. Market fundamentals have to be in place in order to do that.

But that would take some time to come. ....

institutional investment (02 october, 2008)

The indices :

AEX Index S&P 500 Index 1114,28 -4,03% Dow Jones Indus. Avg. 10482,85 -3,22% Nasdaq Composite 1976,72 -4,48%

(Another big day of sale off , on the background of the pending decision of
the US senate on the 700bn$ bailout)

1. SCVL
2. PVSW
3. BHV
4. RSW
5. SH
6. SCC
7. TLO
8. WAL
9. ABT
10. PNRG
11. MWIV
12. ACV
13. CL
14. DMND
15. THS
16. UBCP
17. ATML
18. PHTN
19. NCEM
20. CAI
21. DCM

01/10/08 institutional buying

1. IMCL
2. QCOR
3. HPY
4. ECL
5. SH
6. FXG
7. TLO
8. ITE
9. EFJI
10. WWY
11. CHG
12. RGCO
13. SXI
14. CTGX
15. OTEX
16. NFS
17. MWIV
18. K
19. CPB
20. DMND
21. CIZN
22. ICXT
23. PNTR
24. PHTN
25. UFI
26. CENTA