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1. <?xml version='1.0' encoding='UTF-8'?><rss xmlns:atom="http://www.w3.org/2005/Atom" xmlns:openSearch="http://a9.com/-/spec/opensearchrss/1.0/" xmlns:blogger="http://schemas.google.com/blogger/2008" xmlns:georss="http://www.georss.org/georss" xmlns:gd="http://schemas.google.com/g/2005" xmlns:thr="http://purl.org/syndication/thread/1.0" version="2.0"><channel><atom:id>tag:blogger.com,1999:blog-6557910854406592777</atom:id><lastBuildDate>Wed, 13 Mar 2024 17:35:29 +0000</lastBuildDate><category>The Rational Investor WCTS 081508 - Gold</category><title>The Canadian Rational Investor&#39;s CTS Spotlight</title><description>A place for CRI to publish most recent CTS&#39;s spotlight charts and comments</description><link>http://wtcsspotlight.blogspot.com/</link><managingEditor>noreply@blogger.com (The Cdn. Rational Investor)</managingEditor><generator>Blogger</generator><openSearch:totalResults>96</openSearch:totalResults><openSearch:startIndex>1</openSearch:startIndex><openSearch:itemsPerPage>25</openSearch:itemsPerPage><item><guid isPermaLink="false">tag:blogger.com,1999:blog-6557910854406592777.post-7103274837707613763</guid><pubDate>Sun, 04 May 2014 19:13:00 +0000</pubDate><atom:updated>2014-05-04T12:13:55.611-07:00</atom:updated><title>CRI&#39;s WCTS Spotlight Blog for May 2nd, 2014</title><description>&lt;span style=&quot;font-family: Verdana, sans-serif;&quot;&gt;Hello and welcome back to CRI&#39;s WCTS Spotlight Blog,&lt;br /&gt;&lt;br /&gt;Now that we are officially into the month of May one should be very cautious for the next six weeks. Historically, many commodity related business\&#39;s use May as a seasonal pivot (where supply and demand influences peak) so one shouldn\&#39;t be too surprised to see wild gyrations through this transitional period. Since we know most of the world\&#39;s equity markets are very overextended I am troubled by what I see developing in the long end of the yield curve (see WCTS Blog post). It would appear bonds are starting to look more attractive relative to stocks. Couple all this with the turmoil out of Eastern Europe and I for one shall be reluctant to commit new money to ideas for a while yet.&lt;br /&gt;&lt;br /&gt;&lt;a href=&quot;https://www.tradingview.com/i/ja8mkwPf&quot;&gt;&lt;img border=&quot;0&quot; height=&quot;272&quot; src=&quot;https://www.tradingview.com/i/ja8mkwPf&quot; width=&quot;400&quot; /&gt;&lt;/a&gt;&lt;br /&gt;&lt;/span&gt;&lt;div&gt;
2. <span style="font-family: Verdana, sans-serif;">As we fast approach the typical seasonal top for the North American economy it shouldn't surprise us to see the anti-equity-market proxy (bonds) start to look more attractive. While I am not suggesting a trade (low reward to risk ratio on setup prevents me from considering the idea) , I do respect the fact that we may see a nice rally from current levels. Three justifiable reasons suggest to me price wants to revisit the low 140 area in the not too distant future. 1. Inverted Head and shoulders price pattern target (outlined on chart). 2. Optimal Short Trade Entry (OTE) zone currently about 144 to 148 [keep in mind, institutions do not short down markets, this is the area that they will look to short to play this bear market - not near the lows here]. 3. Gaps near 143 & 145 need to be filled. Put it all together and I can comfortably understand a bond market rally - but as previously mentioned, because reward is about equal to risk I simply can not justify taking a trade....<br /><br />That's all for this issue of the WCTS Spotlight,<br /><br />Brian Beamish FCSI<br /><br />The Canadian Rational Investor<br />the_rational_investor@yahoo.com<br /><a href="http://www.therationalinvestor.ca/RI_Tradents.php#wctsspotlight">http://www.therationalinvestor.ca/RI_Tradents.php#wctsspotlight </a><br /><a href="http://www.therationalinvestor.ca/">http://www.therationalinvestor.ca</a></span><div>
3. </div>
4. </div>
5. </description><link>http://wtcsspotlight.blogspot.com/2014/05/cris-wcts-spotlight-blog-for-may-2nd.html</link><author>noreply@blogger.com (The Cdn. Rational Investor)</author><thr:total>0</thr:total></item><item><guid isPermaLink="false">tag:blogger.com,1999:blog-6557910854406592777.post-5501685820661018168</guid><pubDate>Sun, 19 May 2013 17:43:00 +0000</pubDate><atom:updated>2013-07-15T10:14:07.556-07:00</atom:updated><title>CRI&#39;s WCTS Spotlight Blog for May 17th, 2013</title><description>&lt;span style=&quot;font-family: &amp;quot;Trebuchet MS&amp;quot;,sans-serif;&quot;&gt;&lt;span style=&quot;font-size: small;&quot;&gt;Hello and welcome back to CRI&#39;s WCTS Spotlight Blog,&lt;br /&gt;&lt;br /&gt;05/17/13: The recent
6. bullish reversal in the US Dollar index continued this past week and
7. has now confirmed (in my mind) the bullish scenario laid out in previous
8. blog posts. With both ECB & BOJ on aggressive easing programs, the
9. North American economy looks to be relatively attractive and indeed
10. money is pouring into US dollar denominated assets. Of particular note,
11. the Aussie dollar is now racing lower in a bid to play catch-up to the
12. Yen. Additionally, from a macro perspective, things are taking a hawkish
13. turn in Syria suggesting a global war premium is being built back into
14. the market, something we haven't seen for some time. </span></span><br />
15. <br />
16. <div class="separator" style="clear: both; text-align: left;">
17. <span style="font-family: "Trebuchet MS",sans-serif;"><span style="font-size: small;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgMQ2rsWKpL9Xi98ro0zYXVI6bWDJ0TEujm-3SIko5EYmzOcWfEjJCDfUyYQYdtGvPohBS4ihiziwRkdIJ7WkDUI91cCV4B7P0YlX4v8sATacfJwK9wikYzhnGU_ScBaENQ_aQ5j8PW60A/s1600/USDollar051713.bmp" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" height="117" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgMQ2rsWKpL9Xi98ro0zYXVI6bWDJ0TEujm-3SIko5EYmzOcWfEjJCDfUyYQYdtGvPohBS4ihiziwRkdIJ7WkDUI91cCV4B7P0YlX4v8sATacfJwK9wikYzhnGU_ScBaENQ_aQ5j8PW60A/s320/USDollar051713.bmp" width="320" /></a></span></span></div>
18. <br />
19. <span style="font-family: "Trebuchet MS",sans-serif;"><span style="font-size: small;">Since the US Dollar Index put in such a dramatic bullish reversal over the past two weeks I thought it only prudent to take a good look at the weekly and monthly charts to see if this recent price action is trying to tell us something. Oh boy, it seems to be! </span></span><br />
20. <br />
21. <span style="font-family: "Trebuchet MS",sans-serif;"><span style="font-size: small;">Regular readers will recall my WCTS spotlight blog from March 15th (<a href="http://wtcsspotlight.blogspot.ca/2013/03/cts-spotlight-blog-for-march-15th-2013.html" target="_blank">link</a>) in which I painted two potential scenarios for the US Dollar Index. After what looked like a nice double top it appeared just two weeks ago as though the bearish scenario was going to play out. Then out of nowhere a monster rally both broke the existing double top and forged through the significant highs from last summer. This bull trap caught many off guard (and in my mind) has laid out the true path going forward. As the charts above illustrate, two very well defined bull ab=cd patterns are currently at work. While it may take weeks, months and maybe even a quarter or two to get to the upside objectives, I feel confident of direction.</span></span><br />
22. <br />
23. <span style="font-family: "Trebuchet MS",sans-serif;"><span style="font-size: small;">Since the US Dollar Index is our 'financial asset' proxy this generational cycle it is important to understand where it is headed and some of the broader implication of the trend. The trend in my opinion remains up for the US Dollar index. Regardless of fundamental reasons, I shall be looking for a stronger dollar index going forward, not a weaker one. And, until a top comes in or upside objectives (outlined on the two charts above) are hit, pull-backs represent buying opportunities while rallies represent profit taking windows. Additionally, conventional wisdom suggests US Dollar strength would imply US Dollar denominated commodity price weakness. Given this historical norm, I shall too be looking for a general malaise within the commodity space. Given my various bearish posts within the space of late (gold, feeder cattle, copper, et all) that supposition seems to be indeed correct.</span></span><br />
24. <br />
25. <span style="font-family: "Trebuchet MS",sans-serif;"><span style="font-size: small;">That's all for this issue of the WCTS Spotlight,</span></span><br />
26. <span style="font-family: "Trebuchet MS",sans-serif;"><span style="font-size: small;"><br />
27. Brian Beamish FCSI</span></span><br />
28. <div>
29. <span style="font-family: "Trebuchet MS",sans-serif;"><span style="font-size: small;">The Canadian Rational Investor<br />
30. the_rational_investor@yahoo.com</span></span><br />
31. <span style="font-family: "Trebuchet MS",sans-serif;"><span style="font-size: small;"><a href="http://www.therationalinvestor.ca/RI_Tradents.php#wctsspotlight">http://www.therationalinvestor.ca/RI_Tradents.php#wctsspotlight </a></span></span></div>
32. <div>
33. <span style="font-family: "Trebuchet MS",sans-serif;"><span style="font-size: small;"><a href="http://www.therationalinvestor.ca/">http://www.therationalinvestor.ca</a></span></span></div>
34. &lt;span style=&quot;font-family: Trebuchet MS,Arial,Helvetica;&quot;&gt;&lt;/span&gt; </description><link>http://wtcsspotlight.blogspot.com/2013/05/cris-wcts-spotlight-blog-for-may-17th.html</link><author>noreply@blogger.com (The Cdn. Rational Investor)</author><media:thumbnail xmlns:media="http://search.yahoo.com/mrss/" url="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgMQ2rsWKpL9Xi98ro0zYXVI6bWDJ0TEujm-3SIko5EYmzOcWfEjJCDfUyYQYdtGvPohBS4ihiziwRkdIJ7WkDUI91cCV4B7P0YlX4v8sATacfJwK9wikYzhnGU_ScBaENQ_aQ5j8PW60A/s72-c/USDollar051713.bmp" height="72" width="72"/><thr:total>0</thr:total></item><item><guid isPermaLink="false">tag:blogger.com,1999:blog-6557910854406592777.post-4968768163991078855</guid><pubDate>Sun, 31 Mar 2013 20:48:00 +0000</pubDate><atom:updated>2013-04-06T08:55:39.437-07:00</atom:updated><title>CRI&#39;s WCTS Spotlight Blog for March 28th, 2013</title><description>&lt;span style=&quot;font-family: &amp;quot;Trebuchet MS&amp;quot;,sans-serif;&quot;&gt;&lt;span style=&quot;font-size: small;&quot;&gt;Hello and welcome back to CRI&#39;s WCTS Spotlight Blog,&lt;/span&gt;&lt;/span&gt;&lt;br /&gt;
35. <span style="font-family: "Trebuchet MS",sans-serif;"><span style="font-size: small;"><br /></span></span>
36. <span style="font-family: "Trebuchet MS",sans-serif;"><span style="font-size: small;">03/22/13: The end of
37. Q1\'13 is here and so too does it bring the Japanese fiscal year end.
38. Amid the seasonal ill-liquidity, the US dollar index is once again
39. pushing back above the 83 level suggesting the fight between 83 and 84
40. isn\'t quite over yet. We will be watching that chart\'s resolution
41. closely over the coming weeks per our recent WCTS blog posts and weekly
42. updates. Seemingly to confirm this broader market bearishness, Bonds
43. look to be bottoming, Copper looks to be topping and Healthcare (a
44. sector that usually does well during bear markets) was the best
45. performer through the entire quarter as suggested by our 1st 2wks study
46. back in January. Lastly, with the recent announcement of US farmer\'s
47. crop planting intentions released on Friday (where corn intentions are
48. for the biggest US corn crop in more than 80 years) I thought we ought
49. to take a quick look at the grain markets and what the charts might be
50. suggesting there going forward. Additionally, this week I have included a
51. short tutorial on Bearish Engulfing patterns (Japanese Candlestick
52. price pattern) and putting those patterns into context given higher time
53. frame chart analysis - enjoy...</span></span><br />
54. <span style="font-family: "Trebuchet MS",sans-serif;"><span style="font-size: small;"><br /></span></span>
55. <br />
56. <div class="separator" style="clear: both; text-align: left;">
57. <span style="font-family: "Trebuchet MS",sans-serif;"><span style="font-size: small;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgfYEWP9DF1_77iAn5W74i78Jkbf0GKsAYXmkwXFEOWtYaCtwEnXO7QIvvxbASG86oHUNnpiiekot620hnkA1peruBEu9oSZpSMFIGd71M0cTsKylCEb28bVZvYtBkNm1ZI5ln_NWoORsQ/s1600/BearishEngulfingPatternDBA033013b.bmp" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" height="183" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgfYEWP9DF1_77iAn5W74i78Jkbf0GKsAYXmkwXFEOWtYaCtwEnXO7QIvvxbASG86oHUNnpiiekot620hnkA1peruBEu9oSZpSMFIGd71M0cTsKylCEb28bVZvYtBkNm1ZI5ln_NWoORsQ/s320/BearishEngulfingPatternDBA033013b.bmp" width="320" /></a></span></span></div>
58. <span style="font-family: "Trebuchet MS",sans-serif;"><span style="font-size: small;">When I read through the news pertaining to the rather dramatic decline in prices on Friday (news link: <a href="http://futures.tradingcharts.com/news/futures/News_of_record_corn_crop_shakes_market_195282547.html" target="_blank">News of record corn crop shakes market</a>) I am reminded of a lesson I learned many years ago in the commodities market, the best cure for high prices - is high prices! Interestingly, shortly following that barrage of negative sentiment, news articles like this started to appear (news link: <a href="http://futures.tradingcharts.com/news/futures/Crop_outlook_bullish_for_corn__soybeans_195322943.html" target="_blank">Crop outlook bullish for corn soybeans</a>) suggesting institutional demand (Ethanol) and a diminished planting of other crops (especially evident in Oats for example) may set a 'floor' for further price appreciation. With the fear of a re-occurrence of last year's drought conditions and/or an always persistent fear of flood it is no surprise we have a very tightly wound market with potentially explosive fundamental movement either way. </span></span><br />
59. <span style="font-family: "Trebuchet MS",sans-serif;"><span style="font-size: small;"><br /></span></span>
60. <span style="font-family: "Trebuchet MS",sans-serif;"><span style="font-size: small;">So here we are caught right between the proverbial 'rock' and a 'hard place'. At the moment it literally feels like there is an equal tug of war of news going on and that seems to be confirmed by the price action. Now here is the 'rub' - as traders, we must always be asking ourselves, is the potential reward I may realize on this one particular trade justify the very real risk I am going to have to take. And as of Friday's price action, I don't see justifiable shorts on any of these one day moves. One by one, I can go through each of these grain markets and make just as compelling an argument for the bulls as I can for the bears and that unfortunately doesn't help our risk:reward ratio at all...</span></span><br />
61. <span style="font-family: "Trebuchet MS",sans-serif;"><span style="font-size: small;"><br /></span></span>
62. <span style="font-family: "Trebuchet MS",sans-serif;"><span style="font-size: small;">Of the six markets shown above, lets take a look at Corn since the news was so Corn centered. I find it particularly interesting that while big, Corn's move did not break the significant lows from only a month ago. 687.25 was the key weekly low (682 daily low from the May contract 03/07/13) and that is the number I shall be watching closely for over the coming sessions. If indeed, that bottom holds, then corn is actually still working a perfectly normal double bottom 'bullish' price pattern and may even be setting the stage for a massive bullish AB= CD price pattern heading into the summer seasonal peak. At the same time, we may very well be carving out a bearish AB=CD price pattern too. A break of 678.50 would confirm this and would imply a downside target just under $6.00 which coincidentally happens to be where some juicy gaps are that really need to be filled. So as you can see, not the best odds....really about a 50/50 bet... anyone got a coin??? </span></span><br />
63. <span style="font-family: "Trebuchet MS",sans-serif;"><span style="font-size: small;"><br /></span></span>
64. <span style="font-family: "Trebuchet MS",sans-serif;"><span style="font-size: small;">As you all know, I am by nature a very conservative investor and according to the 'Two Rules of Investing', rule number 1 says we can't consider a trade unless we are absolutely confident of at least 66% accuracy. 50/50 is not 66%. Additionally, options prices are currently skewed for a 50/50 scenario. According to our options model (OnlyDoubles Trades) we can only consider an option purchase if it's current price is half of what we expect it's intrinsic value will be should the market move to our anticipated target. That only happens with we catch a market with too much of a bias in one direction or the other. Here, the market really doesn't have a bias (remember our tug-of war), so there really isn't an unfair advantage for us to participate.</span></span><br />
65. <span style="font-family: "Trebuchet MS",sans-serif;"><span style="font-size: small;"><br /></span></span>
66. <span style="font-family: "Trebuchet MS",sans-serif;"><span style="font-size: small;">Which brings us to our Educational segment on Bearish Engulfing price patterns and their appropriate use given the larger time frame chart analysis. Here then is a very interesting daily (above) and weekly (below) chart summary on the DBA agg. commodity ETF with particular emphasis on two '<a href="http://www.linkedin.com/redirect?url=http%3A%2F%2Fwww%2Einvestopedia%2Ecom%2Fterms%2Fb%2Fbearishengulfingp%2Easp&urlhash=J6Sb&_t=tracking_disc" target="_blank">Bearish Engulfing Patterns</a>' as highlighted in Stockchart.com's predefined <a href="http://www.linkedin.com/redirect?url=http%3A%2F%2Fstockcharts%2Ecom%2Fdef%2Fservlet%2FSC%2Escan&urlhash=HOmG&_t=tracking_disc" target="_blank">bearish engulfing pattern scan</a> from Friday.</span></span><br />
67. <span style="font-family: "Trebuchet MS",sans-serif;"><span style="font-size: small;"><br /></span></span>
68. <br />
69. <div class="separator" style="clear: both; text-align: left;">
70. <span style="font-family: "Trebuchet MS",sans-serif;"><span style="font-size: small;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEg3Dg4sWg6DcZioccPtcpGv_qeJrpd8JRCjrPtvscT6tLliv3Fs2AwDvuOjsCQn6kvpcewzxStyHiDKNq8pb3FlmC-10zY2D-qvpLsbL8PrqYzqGUR_mSEZTj17HJbDo-UlfuTHYXhPY7s/s1600/BearishEngulfingPatternDBA033013.bmp" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img alt="DBA bearish engulfing pattern" border="0" height="289" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEg3Dg4sWg6DcZioccPtcpGv_qeJrpd8JRCjrPtvscT6tLliv3Fs2AwDvuOjsCQn6kvpcewzxStyHiDKNq8pb3FlmC-10zY2D-qvpLsbL8PrqYzqGUR_mSEZTj17HJbDo-UlfuTHYXhPY7s/s320/BearishEngulfingPatternDBA033013.bmp" title="DBA Bearish Engulfing Pattern" width="320" /></a></span></span></div>
71. <span style="font-family: "Trebuchet MS",sans-serif;"><span style="font-size: small;"><br /></span></span>
72. <span style="font-family: "Trebuchet MS",sans-serif;"><span style="font-size: small;">Current DBA weekly chart: <a href="http://scharts.co/Y1WnL7" target="_blank">http://scharts.co/Y1WnL7</a></span></span><br />
73. <span style="font-family: "Trebuchet MS",sans-serif;"><span style="font-size: small;">  </span></span><br />
74. <span style="font-family: "Trebuchet MS",sans-serif;"><span style="font-size: small;">The two 'blown-up' charts (#1 & #2) are the two bearish engulfing patterns I would like to concentrate on here today. Notice they both meet the text book definition of a bearish engulfing pattern and may look roughly the same - but alas, they are very different. When one looks at the weekly chart (below) we see that #1 occurred at the top of the price channel and there was a very well defined downside target (the very large weekly gap at $26.50). #2 has however occurred at what I would consider a very tough location. </span></span><br />
75. <span style="font-family: "Trebuchet MS",sans-serif;"><span style="font-size: small;"><br /></span></span>
76. <span style="font-family: "Trebuchet MS",sans-serif;"><span style="font-size: small;">First off, from a seasonal perspective we must keep in mind, spring is often a 'pivot' period for the broader market and especially so within the agricultural sector. Specifically
77. for the grain markets, we are now shifting back to a supply driven
78. market rather than the demand driven market typical during the North
79. American winter. Prices shall be driven by fear of flood or drought and will ultimately culminate with the Fall harvest. In the face of poor international demand, it is not surprising to see that prices
80. themselves have fallen for more than seven months and have left a lot
81. of gaps to the upside that really ought to be filled in at some point
82. down the road.   </span></span><br />
83. <span style="font-family: "Trebuchet MS",sans-serif;"><span style="font-size: small;"><br /></span></span>
84. <span style="font-family: "Trebuchet MS",sans-serif;"><span style="font-size: small;">So with this backdrop (one very different then in late January) we are currently right up against a key low and Friday's action was unable to penetrate that low. The grain markets themselves were ugly but they did not break. Should they break, the very important low ($25.70 on this ETF) shall be broken too. BUT that has not happened yet and I do believe it is dangerous to assume that it will happen.</span></span><br />
85. <span style="font-family: "Trebuchet MS",sans-serif;"><span style="font-size: small;"><br /></span></span>
86. <span style="font-family: "Trebuchet MS",sans-serif;"><span style="font-size: small;">Given too, we will be entering the 1st 2 weeks of Q2'13 (and all the implications that go with that event), I will personally be reluctant to take any bets in earnest until that window is closed. I fear prices will test and maybe even break those significant lows early this coming week but then rally hard through the first two weeks as trapped shorts have no choice but to cover. Indeed, if it is one thing I have learned while working with the good people at TsT, there are/will be quite a few traders that would consider buying
87. against the 25.70 low as a relatively low risk:reward long scenario.</span></span><br />
88. <span style="font-family: "Trebuchet MS",sans-serif;"><span style="font-size: small;"><br /></span></span>
89. <span style="font-family: "Trebuchet MS",sans-serif;"><span style="font-size: small;">So what is the point of all this then? Take away from this that not every bearish engulfing pattern is the same. Some occur at really good shorting locations, others occur at typical 'trap' locations. As always, nothing is guaranteed in the market and getting sucked blindly into each and every bearish engulfing pattern can be both mentally exhausting and financially debilitating. Take every chart pattern you see and put it into context given your higher time frame chart analysis. If they agree, then you may have something to work with. If not, beware!</span></span><br />
90. <span style="font-family: "Trebuchet MS",sans-serif;"><span style="font-size: small;"><br /></span></span>
91. <span style="font-family: "Trebuchet MS",sans-serif;"><span style="font-size: small;">That's all for this issue of the CTS Spotlight,<br />
92. <br />
93.  
94. <br />
95. <br />
96. </span></span><br />
97. <div>
98. <span style="font-family: "Trebuchet MS",sans-serif;"><span style="font-size: small;"> Brian Beamish FCSI</span><span style="font-size: small;">
99.  </span></span><br />
100. <span style="font-family: "Trebuchet MS",sans-serif;"><span style="font-size: small;">The Canadian Rational Investor<br />
101. the_rational_investor@yahoo.com </span></span><br />
102. <span style="font-family: "Trebuchet MS",sans-serif;"><span style="font-size: small;"><a href="http://www.therationalinvestor.ca/RI_Tradents.php#wctsspotlight">http://www.therationalinvestor.ca/RI_Tradents.php#wctsspotlight </a></span></span></div>
103. <span style="font-family: "Trebuchet MS",sans-serif;"><span style="font-size: small;">
104. </span></span>
105. <br />
106. <div>
107. <span style="font-family: "Trebuchet MS",sans-serif;"><span style="font-size: small;"><a href="http://www.therationalinvestor.ca/">http://www.therationalinvestor.ca</a></span></span></div>
108. <span style="font-family: "Trebuchet MS",sans-serif;"><span style="font-size: small;"><br /></span></span>
109. <span style="font-family: "Trebuchet MS",sans-serif;"><span style="font-size: small;"><br /></span></span>
110. &lt;span style=&quot;font-family: &amp;quot;Trebuchet MS&amp;quot;,sans-serif;&quot;&gt;&lt;span style=&quot;font-size: small;&quot;&gt;p.s. fwiw, I personally prefer the concept of the &#39;outside downside key reversal&#39; (using OHLC bars) in that the market opens HIGHER than the previous two period&#39;s highs and closes LOWER than the previous two period&#39;s lows. Notice that while both are text book candlestick &#39;engulfing patterns&#39; definitions, #1 above meets the &#39;key reversal&#39; criteria while #2 does not....&lt;/span&gt;&lt;/span&gt;</description><link>http://wtcsspotlight.blogspot.com/2013/03/cris-wcts-spotlight-blog-for-march-28th.html</link><author>noreply@blogger.com (The Cdn. Rational Investor)</author><media:thumbnail xmlns:media="http://search.yahoo.com/mrss/" url="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgfYEWP9DF1_77iAn5W74i78Jkbf0GKsAYXmkwXFEOWtYaCtwEnXO7QIvvxbASG86oHUNnpiiekot620hnkA1peruBEu9oSZpSMFIGd71M0cTsKylCEb28bVZvYtBkNm1ZI5ln_NWoORsQ/s72-c/BearishEngulfingPatternDBA033013b.bmp" height="72" width="72"/><thr:total>0</thr:total></item><item><guid isPermaLink="false">tag:blogger.com,1999:blog-6557910854406592777.post-2549440532183152179</guid><pubDate>Sun, 24 Mar 2013 20:28:00 +0000</pubDate><atom:updated>2013-03-24T13:29:21.338-07:00</atom:updated><title>CRI&#39;s WCTS Spotlight Blog for March 22nd, 2013</title><description>&lt;span style=&quot;font-family: &amp;quot;Trebuchet MS&amp;quot;,sans-serif;&quot;&gt;&lt;span style=&quot;font-size: small;&quot;&gt;Hello and welcome back to CRI&#39;s WCTS Spotlight Blog.&lt;/span&gt;&lt;/span&gt;&lt;br /&gt;
111. <span style="font-family: "Trebuchet MS",sans-serif;"><span style="font-size: small;"><br /></span></span>
112. <span style="font-family: "Trebuchet MS",sans-serif;"><span style="font-size: small;">03/22/13: The US
113. dollar index this past week showed signs of fatigue any time it pointed
114. its nose above 83.00. As previously mentioned, 83-84 represents a
115. significant battle zone for the index and its ultimate resolution ought
116. to give investors a guide as to 'fear' vs. 'greed' expectations for
117. the coming weeks and months ahead. Given this is Japanese fiscal year
118. end, we may see trend resumption once on the other side of that event.
119. Interestingly too, that event will mark the beginning of Q2''13 and we
120. shall be given yet another brief glimpse at what fund managers are doing
121. with their new capital. Elsewhere, the professor of economics (HG
122. Copper) had something to say this past week. While still contained
123. within a larger channel, Copper prices registered a weekly double top
124. breakdown suggesting lower, not higher prices ahead. With that in mind I
125. thought we ought to take a look at what is going on there in this
126. week's WCTS Blog.</span></span><br />
127. <span style="font-family: "Trebuchet MS",sans-serif;"><span style="font-size: small;"><br /></span></span>
128. <span style="font-family: "Trebuchet MS",sans-serif;"><span style="font-size: small;">High Grade Copper (HG) Weekly & Monthly</span></span><br />
129. <span style="font-family: "Trebuchet MS",sans-serif;"><span style="font-size: small;"><br /></span></span>
130. <div class="separator" style="clear: both; text-align: left;">
131. <span style="font-family: "Trebuchet MS",sans-serif;"><span style="font-size: small;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgSAbc6nPXZcsQCZmvyb4oO43WKLTAAnUCifZj4JuRezEdQJF5jp7cu6nE17ucnfxVh2DrBYJI2aKSDKbUKW3Cmi-wVbUnq45dcDylKtcMfZ_0_Ye_kI3IvE9CBOOhM-o_hRX7fOScd8Kfc/s1600/HGMrch2013.bmp" style="margin-left: 1em; margin-right: 1em;"><img border="0" height="120" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgSAbc6nPXZcsQCZmvyb4oO43WKLTAAnUCifZj4JuRezEdQJF5jp7cu6nE17ucnfxVh2DrBYJI2aKSDKbUKW3Cmi-wVbUnq45dcDylKtcMfZ_0_Ye_kI3IvE9CBOOhM-o_hRX7fOScd8Kfc/s320/HGMrch2013.bmp" width="320" /></a></span></span></div>
132. <span style="font-family: "Trebuchet MS",sans-serif;"><span style="font-size: small;"><br /></span></span>
133. <span style="font-family: "Trebuchet MS",sans-serif;"><span style="font-size: small;">  </span></span><br />
134. <span style="font-family: "Trebuchet MS",sans-serif;"><span style="font-size: small;">HG Copper review: Here again we find another commodity perched at or near 10-15 year highs and threatening to break down in earnest - quite a re-occurring theme of late. Unlike other markets, HG Copper's general trend itself has broader implications. Also known as the professor of economics, Copper is such a key componatant in manufacturing (from housing to airplanes to automobiles) that its direction is often a great proxy for global economic output. Rising copper prices equates to booming economies; falling prices equates to contraction. </span></span><br />
135. <span style="font-family: "Trebuchet MS",sans-serif;"><span style="font-size: small;"><br /></span></span>
136. <span style="font-family: "Trebuchet MS",sans-serif;"><span style="font-size: small;"><br /></span></span>
137. <span style="font-family: "Trebuchet MS",sans-serif;"><span style="font-size: small;">Fundamental review: </span></span><br />
138. <span style="font-family: "Trebuchet MS",sans-serif;"><span style="font-size: small;">On balance, I find it incredible how only 10 years ago Copper prices traded in a nice $.50 to $1.50 range for the better part of thirty years. Only over the past decade has copper 'come to life' (as this chart illustrates: <a href="http://www.futuresbuzz.com/hg.bmp" target="_blank">link</a>). W</span><span style="font-size: small;">hile I can understand a revision higher in price given the destruction of the base currencies' fundamental value (US$) unless there is continued strong demand, prices can easily fall from these lofty levels and fast! The 2000-2010 decade was dominated by the building out of China's economy. Will that trend continue? Has that trend already started to reverse? Chin's political structure has moved away from the growth-at-all-costs model and Chinese stocks are reflecting that. Europe itself is in self-destruct mode as we know austerity will cut GDP growth not help it. And here in North America we are facing a fiscal situation that like the Europeans lends support to contraction not economic expansion. Even from a short term perspective, whatever housing demand there is this summer has surly been bought by wholesalers by now, so when I put it all together I am not quite sure how this market can maintain such high levels let alone move to new highs from here. Once the seasonal window closes (<i>sell in Ma</i><i>y and walk away</i>) I personally would be especially leery of owning this commodity in particular.</span></span><br />
139. <span style="font-family: "Trebuchet MS",sans-serif;"><span style="font-size: small;"><br /></span></span>
140. <span style="font-family: "Trebuchet MS",sans-serif;"><span style="font-size: small;">Technical review:  </span></span><br />
141. <span style="font-family: "Trebuchet MS",sans-serif;"><span style="font-size: small;">Monthly (chart on the right above): Given the 'V' nature of the bottom in price from 2008, it shouldn't surprise anyone to expect a test of that low at some point down the road. While that big fat juicy target may be a little aggressive there are two significant downside targets that seem very realistic given the world's current fundamental situation. Should price move through the lows from October
142. 2011, we will be setting up a monthly bearish ab=cd price pattern. The
143. target on that pattern is about $2.50 and at the same time, there exists
144. a nice little gap on the Monthly charts at that level too. The two
145. together make for a compelling argument for that level to be traded to at some point in the future.  </span></span><br />
146. <span style="font-family: "Trebuchet MS",sans-serif;"><span style="font-size: small;">Weekly (chart on the left above): Here is a very interesting situation. Price just this past week broke down through the most
147. recent low to register a new weekly double top price pattern (red
148. channel). At the same time, price is also caught in another equally powerful bullish channel (blue channel). These two forces are at work at present and are making for a very interesting battle. Given the low liquidity of Japanese fiscal year end and the fact that we are coming up on the end of Q1'13 I am reluctant to get too bearish of this recent breakdown. I for one am willing to wait for the first
149. two weeks of the coming quarter to get out of the way and let the
150. market tell me if this price breakdown is for real or is just a head fake in an illiquid market. But make no mistake - things are brewing here...</span></span><br />
151. <span style="font-family: "Trebuchet MS",sans-serif;"><span style="font-size: small;"><br /></span></span>
152. <span style="font-family: "Trebuchet MS",sans-serif;"><span style="font-size: small;">Summery</span></span><br />
153. <span style="font-family: "Trebuchet MS",sans-serif;"><span style="font-size: small;">The professor of economics is generally not happy and we should listen to what he is saying. Lower highs and lower lows define a bear market and this past week's price action gave us just that. Given the current global economic backdrop that expectation shouldn't come as too big of a surprise.</span><span style="font-size: small;"> Given too the current market's ill-liquidity
154. in the face of Japan's fiscal year end (and what may lie just on the
155. other side of that event) and the transition from Q1'13 to Q2'13, I for
156. one shall be watching HG Copper over the coming weeks very closely to see if this breakdown is for real or just a head fake.</span></span><br />
157. <span style="font-family: "Trebuchet MS",sans-serif;"><span style="font-size: small;"><br /></span></span>
158. <span style="font-family: "Trebuchet MS",sans-serif;"><span style="font-size: small;"> </span><span style="font-size: small;">That's all for this issue of the CTS Spotlight,<br />
159. <br />
160.  
161. <br />
162. </span></span><br />
163. <div>
164. <span style="font-family: "Trebuchet MS",sans-serif;"><span style="font-size: small;"> Brian Beamish FCSI</span></span><br />
165. <span style="font-family: "Trebuchet MS",sans-serif;"><span style="font-size: small;">The Canadian Rational Investor<br />
166. the_rational_investor@yahoo.com </span></span><br />
167. <span style="font-family: "Trebuchet MS",sans-serif;"><span style="font-size: small;"><a href="http://www.therationalinvestor.ca/RI_Tradents.php#wctsspotlight">http://www.therationalinvestor.ca/RI_Tradents.php#wctsspotlight </a></span></span></div>
168. <div>
169. <span style="font-family: "Trebuchet MS",sans-serif;"><span style="font-size: small;"><a href="http://www.therationalinvestor.ca/">http://www.therationalinvestor.ca</a></span></span></div>
170. </description><link>http://wtcsspotlight.blogspot.com/2013/03/cris-wcts-spotlight-blog-for-march-22nd.html</link><author>noreply@blogger.com (The Cdn. Rational Investor)</author><media:thumbnail xmlns:media="http://search.yahoo.com/mrss/" url="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgSAbc6nPXZcsQCZmvyb4oO43WKLTAAnUCifZj4JuRezEdQJF5jp7cu6nE17ucnfxVh2DrBYJI2aKSDKbUKW3Cmi-wVbUnq45dcDylKtcMfZ_0_Ye_kI3IvE9CBOOhM-o_hRX7fOScd8Kfc/s72-c/HGMrch2013.bmp" height="72" width="72"/><thr:total>0</thr:total></item><item><guid isPermaLink="false">tag:blogger.com,1999:blog-6557910854406592777.post-8062134615725203789</guid><pubDate>Sun, 17 Mar 2013 17:43:00 +0000</pubDate><atom:updated>2013-03-17T11:47:20.695-07:00</atom:updated><title>CTS Spotlight Blog for March 15th, 2013 </title><description>&lt;span style=&quot;font-family: &amp;quot;Trebuchet MS&amp;quot;,sans-serif;&quot;&gt;&lt;span style=&quot;font-size: small;&quot;&gt;Hello and welcome back to CRI&#39;s CTS Spotlight Blog.&lt;/span&gt;&lt;/span&gt;&lt;br /&gt;
171. <span style="font-family: "Trebuchet MS",sans-serif;"><span style="font-size: small;"><br /></span></span>
172. <span style="font-family: "Trebuchet MS",sans-serif;"><span style="font-size: small;">03/15/13: The US
173. Dollar index itself is at a very interesting cross roads here. As
174. pointed out in this week's WCTS Blog, we are either at the end of a
175. bearish Bat harmonic pattern (which would imply lower levels from here)
176. or we push up through the 2012 summer peaks (suggesting much higher
177. levels to come). Regardless, the area between 83 to 84 is a very
178. important one and I for one will be keeping a close on how it resolves.
179. While the bond market has yet to be convinced the North American economy
180. has indeed turned, equities are enjoying what appears to be a flight
181. back-into-risk. The fact that all world indices tracked are now pointing
182. higher suggests we are closer to the end of this run then the
183. beginning. Considering seasonality, I wouldn't be surprised if the
184. spring/summer of 2013 marks an important peak. Interestingly, the rally
185. itself is coming from unexpected sectors as our ABG trade (AAPL, Bonds
186. & Gold) takes a break. Indeed, out-performance from sectors like
187. pharmaceuticals shouldn't come as too big a surprise given CRI's 1st
188. 2wks of Q1'13 study suggested that would be the case. Have the metals
189. been beaten up a little too much? Recent WDB Options Model screen
190. results would suggest so as several 'get paid to take a position'
191. trades have emerged of late.</span></span><br />
192. <span style="font-family: "Trebuchet MS",sans-serif;"><span style="font-size: small;"><br /></span></span>
193. <span style="font-family: "Trebuchet MS",sans-serif;"><span style="font-size: small;">US Dollar Index (Weekly) </span></span><br />
194. <span style="font-family: "Trebuchet MS",sans-serif;"><span style="font-size: small;"><br /></span></span>
195. <br />
196. <div class="separator" style="clear: both; text-align: left;">
197. <span style="font-family: "Trebuchet MS",sans-serif;"><span style="font-size: small;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjbYSUfUb5QBTkUobWCZxuu8nSlDvt2L5T7_gjICzzt2UUKjoz7ZRuhbvh3B-dJTjDhrou8cJssX2xEUHxirJSz5LcnkDij7BfGupe-D-Ktap5LeFZLzOxmSxGL3jnWTfZ52oCgn_8tYJc/s1600/USDollarMrch13b.PNG" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" height="304" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjbYSUfUb5QBTkUobWCZxuu8nSlDvt2L5T7_gjICzzt2UUKjoz7ZRuhbvh3B-dJTjDhrou8cJssX2xEUHxirJSz5LcnkDij7BfGupe-D-Ktap5LeFZLzOxmSxGL3jnWTfZ52oCgn_8tYJc/s320/USDollarMrch13b.PNG" width="320" /></a></span></span></div>
198. <span style="font-family: "Trebuchet MS",sans-serif;"><span style="font-size: small;"><br /></span></span>
199. <span style="font-family: "Trebuchet MS",sans-serif;"><span style="font-size: small;">British Pound vs. The US Dollar (Weekly & Monthly) </span></span><br />
200. <span style="font-family: "Trebuchet MS",sans-serif;"><span style="font-size: small;"><br /></span></span>
201. <span style="font-family: "Trebuchet MS",sans-serif;"><span style="font-size: small;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhmTYTed0KFyhPfQ6FHN20wzLUee7lFdH_THRyuX507XvadomvhtX6g4w8IA4dwyTVK4KN9O3HpJRn5AUAHEiq0cTCZBNm3j6YPVLgrVIxwb2Bd2EseIG_oNYPTEMQwRscFrTHYn8dIgvA/s1600/MnthlyBPound0313.bmp" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" height="175" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhmTYTed0KFyhPfQ6FHN20wzLUee7lFdH_THRyuX507XvadomvhtX6g4w8IA4dwyTVK4KN9O3HpJRn5AUAHEiq0cTCZBNm3j6YPVLgrVIxwb2Bd2EseIG_oNYPTEMQwRscFrTHYn8dIgvA/s320/MnthlyBPound0313.bmp" width="320" /></a> </span></span><br />
202. <span style="font-family: "Trebuchet MS",sans-serif;"><span style="font-size: small;">As highlighted in recent weekly commodity trend summary posts, there are some interesting wranglings going on with the currency space of late and I thought we ought to take some time this weekend to look at the US Dollar Index in general and one of its trading pairs (The British Pound) in particular.</span></span><br />
203. <span style="font-family: "Trebuchet MS",sans-serif;"><span style="font-size: small;"><br /></span></span>
204. <span style="font-family: "Trebuchet MS",sans-serif;"><span style="font-size: small;">The US Dollar index</span></span><br />
205. <span style="font-family: "Trebuchet MS",sans-serif;"><span style="font-size: small;">The greenback itself has been under relentless cyclical pressure since the day George Bush Jr. took office some 12 years ago. The coupling of the generational cycle turn ('greed' cycle peak into 2000) and absolutely horrible domestic policy culminated in the United States of America being pushed to the literal brink of bankruptcy by 2009. Once it was revealed how bad the situation really was and the US Fed established itself as a dependable 'lender of last resort' (and at considerable risk I might add) both a floor in the US Dollar was established and 'fear' proxies (like gold) calmed appreciably. </span></span><br />
206. <span style="font-family: "Trebuchet MS",sans-serif;"><span style="font-size: small;"><br /></span></span>
207. <span style="font-family: "Trebuchet MS",sans-serif;"><span style="font-size: small;">So the question at this point seems to be, ok, what's next? The underlying fundamentals within the US economy have been supportive of both a stronger US dollar itself (interest rate spreads are attractive relative to the rest of the world) and a stronger US domestic economy (US corporate earnings are good and the yield curve remains expansionary). Until either the Fed signals an end to its current 'low interest rate' policy or international demand for US paper wains I see no change in that backdrop. Which brings us to the charts. The first chart above is the US Dollar index and it is in my opinion that the index is at a very significant cross roads. Should this be a 'Bearish Bat' harmonic pattern (where point d. would represent the end of our counter trend rally) we should see prices fall appreciably from current levels. Should this be a bullish AB=CD harmonic pattern (where point B would represent the beginning of a whole new longer term leg higher) we should see prices rally appreciably from current levels. While the jury is still out on the broader world economy, I myself will be looking to see how the index acts in and around this 83 to 84 level over the coming weeks. This is what I would consider the battle zone. If the bulls win we blast through 84, if the bears win we fail at 83. </span></span><br />
208. <span style="font-family: "Trebuchet MS",sans-serif;"><span style="font-size: small;"><br /></span></span>
209. <span style="font-family: "Trebuchet MS",sans-serif;"><span style="font-size: small;">So are there any ques for investors that might help guide expectations going forward? In
210. the short term we do still have seasonality on the 'commodity bulls' side. Once
211. that window closes (<i>Sell in May and walk away</i>) my bullish enthusiasm for commodity ownership (and respective US Dollar bearishness) shall be tempered. It has been my general belief that the public is 'too long' commodities in general. Given my recent comments on the risks of owning such assets (WCTS Blog posts on Gold and F. Cattle of late for example) my general feeling is for lower commodity prices and a stronger US dollar over the medium term. </span><span style="font-size: small;">Consider too, Democrat US Presidents are historically US
212. Dollar bullish (as their constituents are typically urban rather than
213. rural) a strong US Dollar policy in general shouldn't be a surprise
214. through Mr. Obama's second term. While these two arguments are fundamentally US Dollar bullish, I myself am going to wait for the break of 84.245 to confirm it technically and I wouldn't be surprised if it takes us getting through the seasonal 'peak' to do it. </span></span><br />
215. <span style="font-family: "Trebuchet MS",sans-serif;"><span style="font-size: small;"><br /></span></span>
216. <span style="font-family: "Trebuchet MS",sans-serif;"><span style="font-size: small;">So lets take a look at what is going on internationally to see if there might be any hints there. The second chart included in this week's blog is on the British Pound vs. The US Dollar and I think it has some interesting 'tells' to it.  There is no doubt about it - this is a bear market! The question for me is, how bearish is it? In exact opposite fashion to the US Dollar index (as expected) the British Pound is literally on the brink of a significant collapse. Indeed, I remember reading stories of traders getting their 'big break' on the devaluation of the British Pound back in the late 1970's and early 1980's - is history repeating itself here? Believe it or not, the Monthly B. Pound chart is painting a target below parity with the US Dollar - or about $.50 lower from current levels! If this chart isn't a wake up call for US Dollar bears, I honestly don't know what could be. While the monthly chart does look ominous, the weekly chart does look a little washed out. Selling below 1.50 seems a little late to the trade but any counter trend rallies back into the 1.60 area would be considered an attractive shorting area (looking to buy Jan, 2014 or beyond Put options) and I shall be keeping an especially 'peeled eye' on this potential trade going forward.</span></span><br />
217. <span style="font-family: "Trebuchet MS",sans-serif;"><span style="font-size: small;"><br /></span></span>
218. <span style="font-family: "Trebuchet MS",sans-serif;"><span style="font-size: small;">That's all for this issue of the CTS Spotlight,</span></span><br />
219. <span style="font-family: "Trebuchet MS",sans-serif;"><span style="font-size: small;"><br />
220. </span></span>
221. <br />
222. <div>
223. <span style="font-family: "Trebuchet MS",sans-serif;"><span style="font-size: small;"> Brian Beamish FCSI</span></span><br />
224. <span style="font-family: "Trebuchet MS",sans-serif;"><span style="font-size: small;">The Canadian Rational Investor<br />
225. the_rational_investor@yahoo.com </span></span><br />
226. <span style="font-family: "Trebuchet MS",sans-serif;"><span style="font-size: small;"><a href="http://www.therationalinvestor.ca/RI_Tradents.php#wctsspotlight">http://www.therationalinvestor.ca/RI_Tradents.php#wctsspotlight<span style="font-size: small;"> </span></a><a href="http://www.therationalinvestor.ca/">http://www.therationalinvestor.ca</a></span></span></div>
227. </description><link>http://wtcsspotlight.blogspot.com/2013/03/cts-spotlight-blog-for-march-15th-2013.html</link><author>noreply@blogger.com (The Cdn. Rational Investor)</author><media:thumbnail xmlns:media="http://search.yahoo.com/mrss/" url="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjbYSUfUb5QBTkUobWCZxuu8nSlDvt2L5T7_gjICzzt2UUKjoz7ZRuhbvh3B-dJTjDhrou8cJssX2xEUHxirJSz5LcnkDij7BfGupe-D-Ktap5LeFZLzOxmSxGL3jnWTfZ52oCgn_8tYJc/s72-c/USDollarMrch13b.PNG" height="72" width="72"/><thr:total>0</thr:total></item><item><guid isPermaLink="false">tag:blogger.com,1999:blog-6557910854406592777.post-8758783236395813334</guid><pubDate>Sun, 17 Feb 2013 15:23:00 +0000</pubDate><atom:updated>2013-02-17T07:27:30.624-08:00</atom:updated><title>CTS Spotlight Blog for February 15th, 2013 </title><description>&lt;span style=&quot;font-family: &amp;quot;Trebuchet MS&amp;quot;,sans-serif;&quot;&gt;&lt;span style=&quot;font-size: small;&quot;&gt;Hello and welcome back to CRI&#39;s CTS Spotlight Blog.&lt;/span&gt;&lt;/span&gt;&lt;br /&gt;
228. <span style="font-family: "Trebuchet MS",sans-serif;"><span style="font-size: small;"><br /></span></span>
229. <span style="font-family: "Trebuchet MS",sans-serif;"><span style="font-size: small;">02/15/13: In what
230. seems to be a straight move out of the Yen and back into the EuroFx, the
231. US dollar index has gone rather sideways of late (with maybe a new
232. slight downside bias). As the Yen itself has entered a weekly oversold
233. condition (rather rare in itself) regional stock markets have either hit
234. or exceeded upside price objectives. Indeed, stocks globally have
235. enjoyed a rather market friendly fundamental backdrop through Q1\'13 so
236. far. Seeming to confirm this, the market's classic fear proxy, gold,
237. hasn't fared well of late. Indeed, recent warnings regarding gold seem
238. to have been warranted; but now that weekly downside objectives have
239. been hit appreciably lower prices from current levels (for the time
240. being) may be asking a bit much. Recent talk of Germany 'being more
241. like Spain' and Japan's intention of spending their way out of their
242. current economic malaise suggests global fiscal austerity may be nearing
243. an end. Lastly, this week\'s CTS blog spotlight takes a look at another
244. long term commodity price chart that looks a little top heavy - Feeder
245. Cattle. While it may not have broken down yet, does further upside price
246. appreciation seem realistic?</span></span><br />
247. <span style="font-family: "Trebuchet MS",sans-serif;"><span style="font-size: small;"><br /></span></span>
248. <div class="separator" style="clear: both; text-align: left;">
249. <span style="font-family: "Trebuchet MS",sans-serif;"><span style="font-size: small;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjj2hUrRCHGNb5HzVDmfIupa91Qi8GeEKcaCKdGDHvfWi7FqJtgf-FLuDZWUK6FiH0Eifi-XTSlWtkc0eZK0sQJEVivaLz0FvmOOyRAotKk8BcAcA5EmkRZ0Nfzg6wBfXp7VIGVKUBbF5Q/s1600/FeederCattleFeb2013.bmp" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" height="237" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjj2hUrRCHGNb5HzVDmfIupa91Qi8GeEKcaCKdGDHvfWi7FqJtgf-FLuDZWUK6FiH0Eifi-XTSlWtkc0eZK0sQJEVivaLz0FvmOOyRAotKk8BcAcA5EmkRZ0Nfzg6wBfXp7VIGVKUBbF5Q/s320/FeederCattleFeb2013.bmp" width="320" /></a></span></span></div>
250. <span style="font-family: "Trebuchet MS",sans-serif;"><span style="font-size: small;">Every once in a while it pays to keep an eye on the longer term price charts just to keep yourself honest. We all love bull markets, but at some point we have to ask ourselves if further upside price appreciation is both realistic and warranted.  </span></span><br />
251. <span style="font-family: "Trebuchet MS",sans-serif;"><span style="font-size: small;"><br /></span></span>
252. <span style="font-family: "Trebuchet MS",sans-serif;"><span style="font-size: small;">Recently, we here at WCTS Blog took a look at the long term price chart of Crude Oil (as a leading commodity)and asked aloud if such a price pattern could be in gold's future (a lagging commodity). While gold seems to have begun its slow correction phase (with plenty of ebb and flow over the coming months/quarters ahead) playing commodities short through the 17.5 fear cycle (of which we are currently in year 12-13) can be very profitable but also dangerous too. Indeed, I would expect short term rallies (back into resistance) to be violent and profit windows on short positions to open and close very quickly. While I love the notion of our 'home-run-trade' ($110 Dec. '13 Put option on GLD), I wouldn't be looking to touch that position unless it doubles in value (at which point it is always a good idea to sell half your position).</span></span><br />
253. <span style="font-family: "Trebuchet MS",sans-serif;"><span style="font-size: small;"><br /></span></span>
254. <span style="font-family: "Trebuchet MS",sans-serif;"><span style="font-size: small;">Having said that, I think the more important question traders ought to be asking themselves is <i>does ownership of gold at +$1500/oz represent a cheap or expensive holding</i>? Considering our long time held technical belief in the 50% rule, long term ownership of any commodity  well above that level is inevitably asking for trouble. Additionally, we as asset owners are not only looking for stable prices but indeed we need rising prices. Without rising prices there can be no capital gain, which makes this entire endevour pointless. So not only do we need to ask if ownership is risky but also ask if capital gain potential is realistic. Unfortunatly, when it came to +$1,700 gold that simply was not the case - for the time being.</span></span><br />
255. <span style="font-family: "Trebuchet MS",sans-serif;"><span style="font-size: small;"><br /></span></span>
256. <span style="font-family: "Trebuchet MS",sans-serif;"><span style="font-size: small;">Which brings us to our commodity in focus this week, Feeder Cattle. Without a doubt, Feeder Cattle has enjoyed a rather noticeably rally over the past four years. at +130 weeks it has been by far the longest running weekly bull pattern WCTS has followed in its short history. Prices briefly tested the key lows under $90 in 2009 only to peak just above $160 into early 2012. The historical breakout through $120 represented a significant re-pricing of Feeder Cattle and in the face of topping grain prices, farmers had little new incentive to bring product to market. As long as price remained above the very powerful short term uptrend line, there really was no telling where she was going. But with the recent weekly failure just below that significant uptrend line, one has to seriously be asking themselves if further upside objectives are realistic? At the moment, price is caught in a channel (133 to 155) and it is really a coin toss in the short term as to which mark will be traded at next. The point here is, does owning Feeder Cattle represent a low risk or high risk proposition? Considering many institutional traders watch for the OTE Fibonacci levels for 'low risk' trade entries (a 70.5% retracement of the primary move & currently near the 108 area) one might argue there is realistically more than $35 (or 25%) of risk owning Feeder Cattle at these levels. That's a lot of risk!</span></span><br />
257. <span style="font-family: "Trebuchet MS",sans-serif;"><span style="font-size: small;"><br /></span></span>
258. <span style="font-family: "Trebuchet MS",sans-serif;"><span style="font-size: small;">Indeed, it is so much risk one might consider a Put option at some point along the road here. Playing the short side during 17.5 year 'fear cycles' (as pointed out previously) can be both rewarding and dangerous. Like the GLD Put recommendation made earlier, this would be a very long term trade for commodity options and as a 'home-run' trade ought to be treated as so. That means it ought to be only considered with money that you can afford to lose. While Feeder Cattle's potential monthly top is still early in the making I shall be watching for a an OnlyDoubles trade possibility and will of course keep you all informed should one come along. </span></span><br />
259. <span style="font-family: "Trebuchet MS",sans-serif;"><span style="font-size: small;"><br /></span></span>
260. <span style="font-family: "Trebuchet MS",sans-serif;"><span style="font-size: small;">Speaking of which, our last OnlyDoubles trade seems to be working nicely as bond prices within the US continue their correction. June TLT 120 Puts suggested at $4.00 are currently $7.00. Those that were able to take the trade ought to have orders working at double your purchase price (hence the name OnlyDoubles!) or at $8.00 or better. Once filled on half the position (and you have your original investment capital back in your hands) feel free to ride the remaining to where ever your personal comfort level takes you.</span></span><br />
261. <span style="font-family: "Trebuchet MS",sans-serif;"><span style="font-size: small;"><br /></span></span>
262. <span style="font-family: "Trebuchet MS",sans-serif;"><span style="font-size: small;">
263. That's all for this issue of the CTS Spotlight,<br />
264. </span></span><br />
265. <div>
266. <span style="font-family: "Trebuchet MS",sans-serif;"><span style="font-size: small;"> Brian Beamish FCSI</span></span><br />
267. <span style="font-family: "Trebuchet MS",sans-serif;"><span style="font-size: small;"><span>The Canadian Rational Investor</span></span></span><br />
268. <span style="font-family: "Trebuchet MS",sans-serif;"><span style="font-size: small;"><span> </span>the_rational_investor@yahoo.com</span></span></div>
269. <span style="font-family: "Trebuchet MS",sans-serif;"><span style="font-size: small;">
270. </span></span>
271. <div>
272. <span style="font-family: "Trebuchet MS",sans-serif;"><span style="font-size: small;"><a href="http://www.therationalinvestor.ca/RI_Tradents.php#wctsspotlight">http://www.therationalinvestor.ca/RI_Tradents.php#wctsspotlight</a><br /><a href="http://www.therationalinvestor.ca/">http://www.therationalinvestor.ca</a></span></span></div>
273. &lt;span style=&quot;font-family: &amp;quot;Trebuchet MS&amp;quot;,sans-serif;&quot;&gt;&lt;span style=&quot;font-size: x-small;&quot;&gt;&amp;nbsp; &lt;/span&gt;&lt;/span&gt;</description><link>http://wtcsspotlight.blogspot.com/2013/02/cts-spotlight-blog-for-february-15th.html</link><author>noreply@blogger.com (The Cdn. Rational Investor)</author><media:thumbnail xmlns:media="http://search.yahoo.com/mrss/" url="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjj2hUrRCHGNb5HzVDmfIupa91Qi8GeEKcaCKdGDHvfWi7FqJtgf-FLuDZWUK6FiH0Eifi-XTSlWtkc0eZK0sQJEVivaLz0FvmOOyRAotKk8BcAcA5EmkRZ0Nfzg6wBfXp7VIGVKUBbF5Q/s72-c/FeederCattleFeb2013.bmp" height="72" width="72"/><thr:total>0</thr:total></item><item><guid isPermaLink="false">tag:blogger.com,1999:blog-6557910854406592777.post-1016499548890246313</guid><pubDate>Sun, 23 Dec 2012 16:20:00 +0000</pubDate><atom:updated>2012-12-23T08:20:44.790-08:00</atom:updated><title>CTS Spotlight Blog for December 21st, 2012</title><description>&lt;span style=&quot;font-family: &amp;quot;Trebuchet MS&amp;quot;,sans-serif;&quot;&gt;&lt;span style=&quot;font-size: small;&quot;&gt;&lt;span&gt;Hello and welcome back to CRI&#39;s CTS Spotlight Blog.&lt;/span&gt;&lt;/span&gt;&lt;/span&gt;&lt;br /&gt;
274. <br />
275. <span style="font-family: "Trebuchet MS",sans-serif;"><span style="font-size: small;"><span>12/21/12: Well the
276. world didn't come to an end on Friday so now back to reality.
277. Interestingly, as we approached the significant date we saw both 'fear' currencies (US Dollar & Jap. Yen) continue to sell-off. The
278. dollar is now at key support so it should be interesting to see where
279. we go from here. Conversely, the Yen has broken a well defined uptrend
280. line and Asian stocks have continued to rally smartly off that reversal.
281. One could argue that the current 'fiscal cliff' concerns have acted
282. as a natural break on the current economic cycle. Should that be the
283. case, and we get some sort of resolution, we may actually be setting the
284. stage for a substantial move higher through 2013. That is a rather big
285. assumption at the point and I for one shall let early January's price
286. action (the January barometer) tell us what to expect for 2013.
287. Regardless, stocks appear strong, inflation appears in check (for now)
288. and commodity prices are relatively calm for the time being. Enjoy your
289. holiday and get ready for a wild 2013.</span></span></span><br />
290. <br />
291. <div class="separator" style="clear: both; text-align: left;">
292. <span style="font-family: "Trebuchet MS",sans-serif;"><span style="font-size: small;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEg0HpDoVlWicRVJPJnJ4xgSA84XLG1l-tekdUKwOX-mo7VdqZgUw50YdejekLuY8DaBvuOE48MOJdAS3qLWpOv17WijLh-tOyWwBoxuWZR9tw5aKWV-izW1bYJhZNTKyqN2mHKcv5HxxDI/s1600/CLvsGDWCTS122112.bmp" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" height="120" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEg0HpDoVlWicRVJPJnJ4xgSA84XLG1l-tekdUKwOX-mo7VdqZgUw50YdejekLuY8DaBvuOE48MOJdAS3qLWpOv17WijLh-tOyWwBoxuWZR9tw5aKWV-izW1bYJhZNTKyqN2mHKcv5HxxDI/s320/CLvsGDWCTS122112.bmp" width="320" /></a></span></span></div>
293. <br />
294. <span style="font-family: "Trebuchet MS",sans-serif;"><span style="font-size: small;"><span>While doing my WCTS today something jumped out at me. After considering this past week's price action in two market's in particular I thought a longer term perspective was needed. After looking at the monthly charts I became convinced that something of significance ought to be brought to CRI's broader reader base - hence this week's WCTS blog post. I won't tell you the market in particular now because I don't want your personal bias to impair your judgment (those shrewd investors out there ought to know exactly what market I'm talking about by just looking a the chart and reading this weeks CTS). </span></span></span><br />
295. <br />
296. <span style="font-family: "Trebuchet MS",sans-serif;"><span style="font-size: small;"><span>Anyway, on to the analysis. The chart to the left above is a monthly continuous contract for Nymex Crude Oil. It is important to note that energy is a 'leading' commodity. Often the broader market gets its' ques from energy prices. Once energy prices started to rally, they basically dragged the rest of commodity land (and price levels within our society) higher with them. Notice the dramatic run up in price through the period from 2004-2008 (about 4 years). Notice too the long term trend line (drawn off the significant lows). It was incredible to watch price triple what it was from the panic lows in January, 2007 ($50) up to its peak (near $150) by mid 2008 - but it did. It was just as stunning to watch the whole thing fall apart to hit a low (around $40) by the end of that year - but it did. If you had suggested such a thing prior people would have thought you were nuts - but it happened! Indeed, there were very few who could see this whole thing from start to end, but those who did catch either side made a handsome sum (regular readers will recall CRI's recommendation to buy Dec, 2008 $90 puts at $2,500 in June of 2008. That option went to over $50,000 by time all the dust settled in December). Crude oil's 'bubble' burst and it burst hard. Once it had broken, the question really was, where would it bottom? While yes the market did move beyond the long term trend line on its inital burst lower, it is interesting to see how we have basically gyrated around that long term trend line over the past couple years as the dust settles from the disaster. Additionally, it is interesting to see how the original significant monthly breakout price ($80) has acted as a magnet during the current market confusion.</span></span></span><br />
297. <br />
298. <span style="font-family: "Trebuchet MS",sans-serif;"><span style="font-size: small;"><span><span style="font-size: small;">So now that brings us to the chart on the right. If someone had told me five years ago that this market was going to triple (in five years) I would have thought they were nuts - but it did. I am sitting here today, wondering aloud....<i>"if a 'leading' commodity</i><i> (like energy) can do a massive 'V' top, is there any reason why this 'lagging' commodity </i><i>(fear proxy) can't</i><i>?"</i>... If one draws the same long term trend lines (as Crude's) we see that current long term price support for this market is around $1000 or 40% below current levels (40%!!!!!). Additionally, price broke out on a monthly basis from around that same level when it started its run into late 2009. It took the energy market less than six months to correct back to that long term trend line - could the same thing happen in this market??? Unfortunately, I have been playing this game for so long I already know the answer, the question for me now is not 'if' but 'when'. Considering WCTS just gave a significant weekly 'sell' signal on this market, I would be very reluctant to own any asset related to this market for at least the next year or so...Furthermore, Like CRI's recent foray on the short side of the bond market (through TLT put options) I do believe there is an OnlyDouble's trade here and shall be looking in earnest for acceptable options to consider over the coming weeks.</span></span></span></span><br />
299. <br />
300. <span style="font-family: "Trebuchet MS",sans-serif;"><span style="font-size: small;"><span>Have you figured out which market it is, yet??? </span></span></span><br />
301. <span style="font-family: "Trebuchet MS",sans-serif;"><span style="font-size: small;"><span><span style="font-size: small;">blow up this script to see the ans<span style="font-size: small;">wer</span>........................................ <span style="font-size: xx-small;">gold</span></span></span></span></span><span style="font-family: "Trebuchet MS",sans-serif;"><span style="font-size: small;"><span><span style="font-size: small;"><span style="font-size: xx-small;"><span style="font-family: "Trebuchet MS",sans-serif;"><span style="font-size: small;"><span><span style="font-size: small;"></span></span></span></span></span></span></span></span></span><br />
302. <br />
303. <span style="font-family: "Trebuchet MS",sans-serif;"><span style="font-size: small;"><span></span><span>That's all for this issue of the CTS Spotlight,</span></span></span><br />
304. <div>
305. <span style="font-family: "Trebuchet MS",sans-serif;"><span style="font-size: small;"><span> Brian Beamish FCSI<br />the_rational_investor@yahoo.com</span></span></span></div>
306. <div>
307. <span style="font-family: "Trebuchet MS",sans-serif;"><span style="font-size: small;"><span><a href="http://www.therationalinvestor.ca/RI_Tradents.php#wctsspotlight">http://www.therationalinvestor.ca/RI_Tradents.php#wctsspotlight</a><br /><a href="http://www.therationalinvestor.ca/">http://www.therationalinvestor.ca</a></span></span></span></div>
308. </description><link>http://wtcsspotlight.blogspot.com/2012/12/cts-spotlight-blog-for-december-21st.html</link><author>noreply@blogger.com (The Cdn. Rational Investor)</author><media:thumbnail xmlns:media="http://search.yahoo.com/mrss/" url="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEg0HpDoVlWicRVJPJnJ4xgSA84XLG1l-tekdUKwOX-mo7VdqZgUw50YdejekLuY8DaBvuOE48MOJdAS3qLWpOv17WijLh-tOyWwBoxuWZR9tw5aKWV-izW1bYJhZNTKyqN2mHKcv5HxxDI/s72-c/CLvsGDWCTS122112.bmp" height="72" width="72"/><thr:total>0</thr:total></item><item><guid isPermaLink="false">tag:blogger.com,1999:blog-6557910854406592777.post-7969671072331146616</guid><pubDate>Sun, 02 Dec 2012 18:36:00 +0000</pubDate><atom:updated>2012-12-02T10:36:14.470-08:00</atom:updated><title>CTS Spotlight Blog for November 30th, 2012</title><description>&lt;span style=&quot;font-family: &amp;quot;Trebuchet MS&amp;quot;,sans-serif;&quot;&gt;&lt;span style=&quot;font-size: small;&quot;&gt;Hello and welcome back to CRI&#39;s CTS Spotlight Blog.&lt;/span&gt;&lt;/span&gt;&lt;br /&gt;
309. <br />
310. <span style="font-family: "Trebuchet MS",sans-serif;"><span style="font-size: small;">11/30/12: While the
311. US dollar index itself was little changed this past week, the Japanese
312. Yen was anything but. After breaking down through support just two
313. weeks ago, the Yen is in virtual free fall as talk from the BOJ (about a
314. need for further stimulus) and a general 'risk-on' tone have both
315. helped to bring the
316. Yen down dramatically. In almost reverse fashion to Europe though,
317. regional stock indices look rather bullish in the face of Yen weakness
318. and is the focus
319. of this week's WCTS Spotlight. Elsewhere, it is interesting to see the
320. historical relationship between the grain and meat markets play itself
321. out. Grain
322. prices look rather weak and conversely meat prices look strong - is a
323. spread trade in Oats/Hogs developing?</span></span><br />
324. <br />
325. <div class="separator" style="clear: both; text-align: left;">
326. <span style="font-family: "Trebuchet MS",sans-serif;"><span style="font-size: small;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhgwCC9XJ6h8qmG2LX8Q09XAvzIbNIH3Adna7Wt01-ZiLm4y6HvGCkz0Z7DIy9XOmDdIsXgXBD9ABfs7PEBei59Ak_gm2kzGndA7ACCFOOJd8Pck6pqdcXL9qKpbOh4USe0pd8UpOKivlQ/s1600/AsianStksWCTS113012.bmp" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" height="294" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhgwCC9XJ6h8qmG2LX8Q09XAvzIbNIH3Adna7Wt01-ZiLm4y6HvGCkz0Z7DIy9XOmDdIsXgXBD9ABfs7PEBei59Ak_gm2kzGndA7ACCFOOJd8Pck6pqdcXL9qKpbOh4USe0pd8UpOKivlQ/s320/AsianStksWCTS113012.bmp" width="320" /></a></span></span></div>
327. <br />
328. <span style="font-family: "Trebuchet MS",sans-serif;"><span style="font-size: small;">As a follow up to recent posts regarding how poor Europe looks from an investment landscape, I though this week we ought to take a look at Asian markets and what the current currency gyrations may be implying for the region in general. Interestingly, the Japanese Yen has acted almost opposite to that or the Euro. Unlike the very weak Euro-Fx, a strong Yen seems to be what is holding this region down. Considering how dependent Asian markets are on manufactured exports, it shouldn't surprise anyone that a strong Yen is literally killing Asian companies. As we have pointed out in the past, currencies are often driven by short term interest rates (and more importantly, the public's perception of how secure those returns will be). When the US economy collapsed (and with it US short term interest rates) there was no longer a premium to hold US paper over Japanese. Additionally, many investors have come to believe North America will have to go through a 'lost decade' </span><span style="font-size: small;">similar to that Japan just went through. Given this backdrop, it was no wonder investors were fleeing the US dollar and running into what it perceived to be the only other reliable 'safe haven' to park their money. The Euro itself is simply not a vi<span style="font-size: small;">able alternative and you can only put so much money into</span> gold. </span></span><br />
329. <br />
330. <span style="font-family: "Trebuchet MS",sans-serif;"><span style="font-size: small;">With the recently released better than expected manufacturing data out of China (linked pair to the US dollar) and encouraging US housing market data, that 'panic' flight into the Yen seems to be waning. Couple this with a horrific domestic economic situation with<span style="font-size: small;">in Japan itself </span>and escalating tensions with its trading neighbors and the end result could be an equally violent move out of the Yen. The question at this point, does the weekly support line (we are fast approaching) hold? We have just filled in an important gap and have made a text book OTE (70.5%) Fib. retracement so odds are there could be a sizable bounce into the end of the year. Regardless of the short term gyrations, we ought to appreciate the simple fact that the Yen's relentless rise seems to be in check (for the time being) and local economies seem to be cheering the news.</span></span><br />
331. <br />
332. <span style="font-family: "Trebuchet MS",sans-serif;"><span style="font-size: small;">Looking at the price charts of the individual countries in the region we see that indeed, stocks are pointing higher, not lower here. It is interesting to see Japanese stocks turned violently higher on the break in the Yen and until the Yen itself shows signs of turning I believe the wind is at these countries backs not in their faces. I do see a nice little gap on the Nikkie (quite a bit higher than where we currently are) that suggests once filled we ought to see some cooling down in price appreciation. That gap seems to correspond well with the other countries upper channel boundaries and those channel lines shall represent my collective resistance zones going forward.</span></span><br />
333. <br />
334. <span style="font-family: "Trebuchet MS",sans-serif;"><span style="font-size: small;">As has been pointed out elsewhere, we are now comfortably into a very healthy season for stock investors. Typically we enjoy a 'Santa Claus' rally into <span style="font-size: small;">Christmas</span> and with the US Presidential election, we have an added <span style="font-size: small;">seasonal</span> boost into January's inauguration.....</span></span><br />
335. <br />
336. <span style="font-family: "Trebuchet MS",sans-serif;"><span style="font-size: small;">as one of my trading partners used to always tell me, "<i><span style="font-size: small;">m</span>ake h</i><i>ey while the sun is shining my bo</i><i>y....</i>"  </span></span><br />
337. <br />
338. <div class="separator" style="clear: both; text-align: left;">
339. <span style="font-family: "Trebuchet MS",sans-serif;"><span style="font-size: small;">That's all for this issue of the CTS Spotlight,</span></span></div>
340. <div>
341. <span style="font-family: "Trebuchet MS",sans-serif;"><span style="font-size: small;"> Brian Beamish FCSI<br />the_rational_investor@yahoo.com</span></span></div>
342. <div>
343. <span style="font-family: "Trebuchet MS",sans-serif;"><span style="font-size: small;"><a href="http://www.therationalinvestor.ca/RI_Tradents.php#wctsspotlight">http://www.therationalinvestor.ca/RI_Tradents.php#wctsspotlight</a><br /><a href="http://www.therationalinvestor.ca/">http://www.therationalinvestor.ca</a></span></span></div>
344. &lt;span style=&quot;font-family: Trebuchet MS,Arial,Helvetica;&quot;&gt; &lt;/span&gt;</description><link>http://wtcsspotlight.blogspot.com/2012/12/cts-spotlight-blog-for-november-30th.html</link><author>noreply@blogger.com (The Cdn. Rational Investor)</author><media:thumbnail xmlns:media="http://search.yahoo.com/mrss/" url="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhgwCC9XJ6h8qmG2LX8Q09XAvzIbNIH3Adna7Wt01-ZiLm4y6HvGCkz0Z7DIy9XOmDdIsXgXBD9ABfs7PEBei59Ak_gm2kzGndA7ACCFOOJd8Pck6pqdcXL9qKpbOh4USe0pd8UpOKivlQ/s72-c/AsianStksWCTS113012.bmp" height="72" width="72"/><thr:total>0</thr:total></item><item><guid isPermaLink="false">tag:blogger.com,1999:blog-6557910854406592777.post-428839648461586117</guid><pubDate>Sun, 18 Nov 2012 07:40:00 +0000</pubDate><atom:updated>2012-11-18T05:19:49.847-08:00</atom:updated><title>CTS Spotlight Blog for November 16th, 2012</title><description>&lt;span style=&quot;font-size: small;&quot;&gt;&lt;span style=&quot;font-family: &amp;quot;Trebuchet MS&amp;quot;,sans-serif;&quot;&gt;Hello and welcome back to CRI&#39;s CTS Spotlight Blog.&lt;/span&gt;&lt;/span&gt;&lt;br /&gt;
345. <br />
346. <span style="font-size: small;"><span style="font-family: "Trebuchet MS",sans-serif;">11/16/12: The US
347. dollar continues to show strength as now a rapidly hotting up situation
348. within the middle east adds to a general risk-off environment. Of
349. particular note this week, Europe\'s woes are starting to show in
350. earnest among the bigger previously thought impervious nations of the
351. North. Austerity may be this generation\'s 1930s tariffs. One by one the
352. PIGS nation\'s of Europe have watched their own economies crumbled in
353. the face of dramatic self imposed GDP reductions. Now it appears it is
354. Europe\'s leading northern economies\' turn (this week\'s WCTS focus).
355. Hopefully, the academics within North America can talk the lemming
356. (North American economy) off the cliff (the fiscal-cliff rather) before
357. we too shoot ourselves in our collective feet. Elsewhere, grain prices
358. look to have indeed topped heading into the demand driven portion of
359. their marketing year. Since global growth is currently in question and a
360. risk-off atmosphere prevails, the cure for high grain prices at the
361. moment seems to be indeed that - high grain prices.</span></span><br />
362. <br />
363. <div class="separator" style="clear: both; text-align: left;">
364. <span style="font-size: small;"><span style="font-family: "Trebuchet MS",sans-serif;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhzala4qVF2TUCS9TElrxi4-N_oNjsNqb9llITXBWlvnBXjh2kyqhFhbjXw_QL0tApZrvVlqjde4dZnkyec8akHRZWXA27nB7B5J53w-HD7WSVFGI7oB8DEHiP_9LpCMdP4r6DLp8pwIj4/s1600/EuroStksWCTS111612.bmp" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" height="305" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhzala4qVF2TUCS9TElrxi4-N_oNjsNqb9llITXBWlvnBXjh2kyqhFhbjXw_QL0tApZrvVlqjde4dZnkyec8akHRZWXA27nB7B5J53w-HD7WSVFGI7oB8DEHiP_9LpCMdP4r6DLp8pwIj4/s320/EuroStksWCTS111612.bmp" width="320" /></a></span></span></div>
365. <br />
366. <span style="font-size: small;"><span style="font-family: "Trebuchet MS",sans-serif;">As a follow up to recent posts regarding the noticeable bottom in the US dollar index and corresponding top in the Euro-FX, I though we ought to take a look this week at the coincidental breakdowns in the European stock markets. This collective break is significant in itself as the fundamental news out of the region seems to be rather bleak. This past week saw the Euro-zone officially fall into recession (<a href="http://www.ctvnews.ca/business/eurozone-back-in-recession-figures-show-1.1039954" target="_blank">News Link</a>) with growth expectations pegged for the 2013 at a whooping 0.1% (and that may be optimistic). Interestingly, of specific note this past we<span style="font-size: small;">ek<span style="font-size: small;">, German it<span style="font-size: small;">self is <span style="font-size: small;">starting to now starting to feel the pain<span style="font-size: small;"> as its<span style="font-size: small;"> </span></span></span></span></span></span></span></span><span style="font-size: small;"><span style="font-family: "Trebuchet MS",sans-serif;"><span style="font-size: small;"><span style="font-size: small;"><span style="font-size: small;"><span style="font-size: small;"><span class="ec_b_11" dir="ltr">ZEW Economic Sentiment</span> reading came in much worse than expected. </span></span></span></span>Austerity is taking its' bite, people are expecting contraction and it is now feeding on itself. Money multiplyer theory would suggest these economies will not only feel the effects of the <span style="font-size: small;">government</span> mandated cuts but also the ripple effect of the cuts and <span style="font-size: small;">then the ripple ef<span style="font-size: small;">fect of the ripple effect </span></span>etc. Europe does indeed have a long fundamental road to recovery ahead of itself.</span></span><br />
367. <br />
368. <span style="font-size: small;"><span style="font-family: "Trebuchet MS",sans-serif;"></span></span><br />
369. <span style="font-size: small;"><span style="font-family: "Trebuchet MS",sans-serif;">So with this fundamental backdrop, lets take a lo<span style="font-size: small;">ok a<span style="font-size: small;">t the technical picture and see what it ha<span style="font-size: small;">s to say. First off,</span></span></span> it would appear the breakdown in the UK & Germany are well contained within broader bull markets. This supports (for the time being) the notion that the 'rich' northern nations of Europe are in better shape than their southern neighbors. Having said that, neither of these countries could break their 2011 respective highs so a failure here may lead to a serious test of said uptrend. Italy on the other hand is firmly within a bear market and the recent failure came well below previous peaks suggesting prices ought to test recent lows at some point in the not to distant future. It isn't even worth looking at the 'PIGS' nations charts - they are all much worse. This brings us to France - where I believe the market's attention is closely focused. France is right on the edge of doing ok and breaking. Notice the battle at the previous peaks not seen in Italy. Notice too the failure just this past <span style="font-size: small;">week</span> through our most recent support low. Notice too, a break of this uptrendline leads to a lot of open space. I for one shall be watching the developments out of France closely for any tells as to how bad  bad might get. </span></span><br />
370. <br />
371. <span style="font-size: small;"><span style="font-family: "Trebuchet MS",sans-serif;">The entire globe seems fixated on the US and it's fiscal cliff while not paying much attention to what is going on in their own back yards. As mussed about in my CTS commentary, it would seem North Americans take these kinds of 'cliffs' more seriously than in Europe. And indeed, it would appear politicians over here are listening (<a href="http://blogs.marketwatch.com/election/2012/11/16/stock-market-vigilantes-will-force-fiscal-cliff-deal-analyst-says/" target="_blank">News link</a>). I wouldn't be surprised to see a catalyst around this event. At the same time I do not see the same inter<span style="font-size: small;">est out <span style="font-size: small;">of</span> Europe at the moment. This to me feels dangerous as investors there seem <span style="font-size: small;">re<span style="font-size: small;">ticent to the fact that price<span style="font-size: small;">s are heading lower<span style="font-size: small;"> and their economic situ<span style="font-size: small;">ation is gong to get worse not better in the near future </span>- <span style="font-size: small;">European</span> stock investors bewar<span style="font-size: small;">e!</span></span></span></span></span></span></span></span><br />
372. <br />
373. <div class="separator" style="clear: both; text-align: left;">
374. <span style="font-size: small;"><span style="font-family: "Trebuchet MS",sans-serif;">That's all for this issue of the CTS Spotlight,</span></span></div>
375. <div>
376. <span style="font-size: small;"><span style="font-family: "Trebuchet MS",sans-serif;"> Brian Beamish FCSI<br />the_rational_investor@yahoo.com</span></span></div>
377. <div>
378. <span style="font-size: small;"><span style="font-family: "Trebuchet MS",sans-serif;"><a href="http://www.therationalinvestor.ca/RI_Tradents.php#wctsspotlight">http://www.therationalinvestor.ca/RI_Tradents.php#wctsspotlight</a><br /><a href="http://www.therationalinvestor.ca/">http://www.therationalinvestor.ca</a></span></span></div>
379. &lt;span style=&quot;font-size: x-small;&quot;&gt;&lt;span style=&quot;font-family: &amp;quot;Trebuchet MS&amp;quot;,sans-serif;&quot;&gt; &lt;/span&gt;&lt;/span&gt;</description><link>http://wtcsspotlight.blogspot.com/2012/11/cts-spotlight-blog-for-november-16th.html</link><author>noreply@blogger.com (The Cdn. Rational Investor)</author><media:thumbnail xmlns:media="http://search.yahoo.com/mrss/" url="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhzala4qVF2TUCS9TElrxi4-N_oNjsNqb9llITXBWlvnBXjh2kyqhFhbjXw_QL0tApZrvVlqjde4dZnkyec8akHRZWXA27nB7B5J53w-HD7WSVFGI7oB8DEHiP_9LpCMdP4r6DLp8pwIj4/s72-c/EuroStksWCTS111612.bmp" height="72" width="72"/><thr:total>0</thr:total></item><item><guid isPermaLink="false">tag:blogger.com,1999:blog-6557910854406592777.post-3946149177506075086</guid><pubDate>Sun, 11 Nov 2012 05:34:00 +0000</pubDate><atom:updated>2012-11-10T21:38:12.101-08:00</atom:updated><title>CTS Spotlight Blog for November 9th, 2012</title><description>&lt;span style=&quot;font-size: small;&quot;&gt;&lt;span style=&quot;font-family: &amp;quot;Trebuchet MS&amp;quot;,sans-serif;&quot;&gt;Hello and welcome back to CRI&#39;s CTS Spotlight Blog.&lt;/span&gt;&lt;/span&gt;&lt;br /&gt;
380. <br />
381. <span style="font-size: small;"><span style="font-family: "Trebuchet MS",sans-serif;">11/09/12: In what
382. can only be described as a classic 'buy on the rumor, sell on the
383. news' event, the pre-election rally (on the hopes of a long shot win by
384. the GOP challenger & a promised tax cut) not only cleaned out many
385. weak shorts but also relieved a rather over-sold market condition. The
386. subsequent price failure not only took back the rally but also broke to
387. new lows in many cases. Meanwhile, the very noticeable bottom in the US
388. dollar index continues to build as many of its major trading pairs are
389. looking rather weak compared to the greenback. What is most interesting
390. to me, is how quickly the major media outlets have switched their
391. attention from all out election blitz to the impending 'fiscal cliff'.
392. Indeed, as I have been worrying about for a while, we ought to see some
393. sort of climactic capitulation around that event. Having said that, the
394. event itself is a little over two months away and given the fact that
395. the public is paying attention (and selling into the media frenzy), it
396. wouldn't surprise me to see a bit of back filling through this
397. seasonally bullish time of year.</span></span><br />
398. <br />
399. <div class="separator" style="clear: both; text-align: left;">
400. <span style="font-size: small;"><span style="font-family: "Trebuchet MS",sans-serif;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEiFziBY7fnAJ6uVLhEksdANF1o2f98KWXRbmCP305S0dWOyydHEypFDUTFjXUjdIltdkllwbWx6yLbLokFy_DyVkPuWq5_xHpbSgBRnKoRNyriWarIWg9Zgthi_0x9ksCYUONQI2LAr3qY/s1600/CTSSpotlightEuroYen110912.bmp" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" height="116" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEiFziBY7fnAJ6uVLhEksdANF1o2f98KWXRbmCP305S0dWOyydHEypFDUTFjXUjdIltdkllwbWx6yLbLokFy_DyVkPuWq5_xHpbSgBRnKoRNyriWarIWg9Zgthi_0x9ksCYUONQI2LAr3qY/s320/CTSSpotlightEuroYen110912.bmp" width="320" /></a></span></span></div>
401. <br />
402. <span style="font-size: small;"><span style="font-family: "Trebuchet MS",sans-serif;">As a follow up to last week's post on the weekly US dollar index (and its associated potentially bullish turn) I thought we could take a moment this week and look at its major trading pairs (Euro-FX & Yen) and see if they are trying to tell us anything. The chart on the left above is of the Weekly Euro-FX vs. the US dollar and the chart on the right is of Weekly Jap. Yen vs. the US dollar.  These two charts seem to correspond with the general tone in the Greenback - that being a move away from 'risky' assets and a preference toward those of the most trust-worthy central banks.  Specifically, The Euro-FX broke down this past week just below a key resistance line. This failure below the 50% level suggests inherent weakness and does suggest a test of this past summer's lows may not be too far off. Notice too, the tops on the Euro are rather rounded (with multiple tests of the highs) while the lows are all 'V' shaped and rather violent. This in itself is a hallmark of a bear not a bull market. Switching to the Yen, we see that it just recently tested its 50% level and once again it held up. In what appears to be a consolidation just below the recent extreme highs, the 50% level has become a defacto neckline of a massive Head & Shoulders price pattern. If so, one ought to expect some sort of 'right-shoulder' price action over the coming weeks/months ahead.</span></span><br />
403. <br />
404. <span style="font-size: small;"><span style="font-family: "Trebuchet MS",sans-serif;">Since we know Euro-land interest rates are general still higher than both the Japanese and US rates, we must assume that if Yen and Dollar are rising in unison vs. the Euro we must be in a 'flight to safety' market. As a fundamental back drop, I believe this <a href="http://www.bloomberg.com/news/2012-11-10/euro-loses-most-in-4-months-against-yen-on-fiscal-cliff-greece.html" target="_blank">news ar</a><a href="http://www.bloomberg.com/news/2012-11-10/euro-loses-most-in-4-months-against-yen-on-fiscal-cliff-greece.html">ticle from Bloomberg</a> summarizes the 'risk-off' environment that currently dominates the investment landscape.</span></span><br />
405. <br />
406. <span style="font-size: small;"><span style="font-family: "Trebuchet MS",sans-serif;">Between the 'PIGS" nations of Europe (and their on-going debt sagas) and the pending US 'fiscal cliff' there is plenty for investors to be concerned with going forward. Having said that, I think if an investor gets wrapped up in the short term market gyrations they often miss the bigger picture (seeing the forest through the trees). Something significant is going on and I don't think it is being fully appreciated. If we look back at our longer term cycles we ought to notice that The US Dollar usually underperforms through its 17.5 year 'fear' cycle. The D-mark & the Yen appreciated dramatically through the last two cycles (Nixon taking the US off the gold standard and<b> </b>Roosevelt's currency devaluation) and the same ought to hold true today. One should not be surprised to see a powerful long term uptrend at work in the Yen. and it shouldn't surprise anyone to see efforts by Japanese Central Bankers to reverse that trend as futile. Here lie's (in my opinion) the current market conundrum that seems to be missed by many. A German based currency should be very strong right now too. This in itself should keep German exports in check - but it isn't. Because of the 'PIGS', international investors are reluctant to buy the Euro and German companies are enjoying massive 'artificial' gains. At the same time, Euro central bankers are offering the market a premium (spread between short term interest rates to that of the other 'reserve' currencies) and the market still doesn't want their paper. Something has to give...</span></span><br />
407. <br />
408. <span style="font-size: small;"><span style="font-family: "Trebuchet MS",sans-serif;">I for one am not quite sure how this is going to resolve itself but it is an ongoing concern I have. How does a situation like this usually resolve? I do recall reading stories of many 'market wizards' who got their big break by seeing a significant change coming and building a relatively low risk position into that event, I wonder if this is one of those situations? Something I will give considerable thought to going forward and maybe you ought to too...</span></span><br />
409. <span style="font-size: small;"><span style="font-family: "Trebuchet MS",sans-serif;"><br /></span></span>
410. <br />
411. <div class="separator" style="clear: both; text-align: left;">
412. <span style="font-size: small;"><span style="font-family: "Trebuchet MS",sans-serif;">That's all for this issue of the CTS Spotlight,</span></span></div>
413. <div>
414. <span style="font-size: small;"><span style="font-family: "Trebuchet MS",sans-serif;"> Brian Beamish FCSI<br />the_rational_investor@yahoo.com</span></span></div>
415. <div>
416. <span style="font-size: small;"><span style="font-family: "Trebuchet MS",sans-serif;"><a href="http://www.therationalinvestor.ca/RI_Tradents.php#wctsspotlight">http://www.therationalinvestor.ca/RI_Tradents.php#wctsspotlight</a><br /><a href="http://www.therationalinvestor.ca/">http://www.therationalinvestor.ca</a></span></span></div>
417. <br />
418. &lt;span style=&quot;font-family: Trebuchet MS,Arial,Helvetica;&quot;&gt; &lt;/span&gt;</description><link>http://wtcsspotlight.blogspot.com/2012/11/cts-spotlight-blog-for-november-9th-2012.html</link><author>noreply@blogger.com (The Cdn. Rational Investor)</author><media:thumbnail xmlns:media="http://search.yahoo.com/mrss/" url="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEiFziBY7fnAJ6uVLhEksdANF1o2f98KWXRbmCP305S0dWOyydHEypFDUTFjXUjdIltdkllwbWx6yLbLokFy_DyVkPuWq5_xHpbSgBRnKoRNyriWarIWg9Zgthi_0x9ksCYUONQI2LAr3qY/s72-c/CTSSpotlightEuroYen110912.bmp" height="72" width="72"/><thr:total>0</thr:total></item><item><guid isPermaLink="false">tag:blogger.com,1999:blog-6557910854406592777.post-1535850858074108734</guid><pubDate>Sun, 04 Nov 2012 18:14:00 +0000</pubDate><atom:updated>2012-11-04T10:34:05.560-08:00</atom:updated><title>CTS Spotlight Blog for November 2nd, 2012</title><description>&lt;div&gt;
419. <span style="font-size: small;"><span style="font-family: "Trebuchet MS",sans-serif;">Hello and welcome back to CRI's CTS Spotlight Blog.</span></span><br />
420. <br />
421. </div>
422. <div>
423. </div>
424. <div>
425. <span style="font-size: small;"><span style="font-family: "Trebuchet MS",sans-serif;">11/02/12: The
426. previously mentioned piercing of the 80.31 level in the US dollar index
427. proved to be a significant event but wasn't truly confirmed until the
428. later part of this week's trade. While its' previously registered bull
429. ab=cd target may be a little aggressive, the index is moving higher and
430. a test of the mid summer peaks isn't out of the question as we
431. approach the 'fiscal cliff'. Will this coming Tuesday provide any real
432. surprises? Considering <a href="http://intrade.com/">intrade.com</a> has Mr. Obama wining by a margin of
433. 66% to 33%, a 74% likelihood of the Democrats keeping control of the
434. Senate and a 94% chance of the Republicans winning the House - a
435. surprise doesn't seem likely. Indeed, four more years of same old same
436. old as we march toward the anticipated 17.5 year 'fear' cycle peak in
437. Q3'17.</span></span><br />
438. <br />
439. </div>
440. <div>
441. </div>
442. <div class="separator" style="clear: both; text-align: left;">
443. <span style="font-size: small;"><span style="font-family: "Trebuchet MS",sans-serif;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgZuhNZ6D31EUPyGnV98Rb77X9lQLsJ7EcanSJcng6Ee6TSMDTltrJqunmMJ8oI7kHFlHxOLM5_T5x2tc0dxtGFUcD7ihc8oDhowMeiJTeanLAQo_lkyxQp51bob1uOI6gwFqB8ZXMW9JY/s1600/CTSSpotlightUSDollar110212.bmp" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" height="254" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgZuhNZ6D31EUPyGnV98Rb77X9lQLsJ7EcanSJcng6Ee6TSMDTltrJqunmMJ8oI7kHFlHxOLM5_T5x2tc0dxtGFUcD7ihc8oDhowMeiJTeanLAQo_lkyxQp51bob1uOI6gwFqB8ZXMW9JY/s320/CTSSpotlightUSDollar110212.bmp" width="320" /></a></span></span></div>
444. <div style="font-family: "Trebuchet MS",sans-serif;">
445. <div>
446. <div class="separator" style="clear: both; text-align: left;">
447. <br /></div>
448. <div class="separator" style="clear: both; text-align: left;">
449. <span style="font-size: small;">As we approach the all important US Presidential and US Congressional elections this November and the looming 'fiscal cliff' come January I thought it would be of some value to take a look at the US dollar index itself in earnest ahead of these events. </span></div>
450. <div class="separator" style="clear: both; text-align: left;">
451. <br /></div>
452. <div class="separator" style="clear: both; text-align: left;">
453. <span style="font-size: small;">Since we are all familiar with our 35 year generational cycles and its effect on money flows (if not then I highly encourage you to do a refresher on my <a href="http://www.therationalinvestor.ca/seminars/macro_analysis.html">Macro Economic Trends</a> webinar) then we know that during the 17.5 'fear' cycle (of which we are current in year 12 of 17) the US dollar Index itself will represent a fear vote in the market place. In essence, when the market is fearful money will run into the Dollar, when it isn't it will explore alternative 'riskier' assets - hence the term 'risk-on' vs. 'risk-off' trade. Simply put, one can glean the general happiness of the broader market during 'fear' cycles by how poorly the dollar index is doing.</span></div>
454. <div class="separator" style="clear: both; text-align: left;">
455. <span style="font-size: small;"><br /></span></div>
456. <div class="separator" style="clear: both; text-align: left;">
457. <span style="font-size: small;">So with this backdrop in mind lets go take a look at what is actually happening. Clearly the US dollar index has been well contained within a bull trend since the significant weekly/monthly double bottom registered through 2011. Until a corresponding double top comes in my general hunch is to expect higher not lower  prices from here. Indeed, if one where an advocate of higher highs and higher lows defining a bull market (of which I am) then we see that the Index has been successfully registering higher highs and higher lows for quite some time. Conversely, tops of late (like the one seen over this past summer) are 'V' shaped meaning price goes straight up and straight back down. This in itself isn't the hallmark of a bear market but one rather of a bull market (something to keep an eye on going forward). This past 'correction' is telling in itself too. The fact that the market came right back to the 1 year 50% retracement level, did not break the previously registered double bottom and has now itself put in a new double bottom (with the break above 80.31) all suggests this bull is rather healthy and normal in nature. A trade through those recent lows (78.6) & the 50% level (78.55) would cause me to reconsider but considering the potential upside objective (85.30...see below) and one ought to at least consider the long trade (80.31) from a risk/reward perspective (ie 1.80 risk vs 5.01 reward).</span></div>
458. <div class="separator" style="clear: both; text-align: left;">
459. <span style="font-size: small;"><br /></span></div>
460. <div class="separator" style="clear: both; text-align: left;">
461. <span style="font-size: small;">Technical outlook: So if we are pointed higher, where should investors expect this market to go? I personally have four bullish targets in mind should this little double bottom of late hold. Firstly, I shall expect the market to at least attempt a 50% retracement of the late summer selloff (currently 81.42 area). Once there, I shall look for the market to move into the OTE Short Sweet Spot (currently 82.58). Should price continue to point higher my next target shall be the summer peak (84.245). A break above this high would in itself represent yet another longer term bullish signal for the Dollar Index (and a very large 'fear'/sell signal for the broader market) and would suggest that the previously mentioned bullish AB=CD target is very much still in play (currently that target is near 85.30).</span></div>
462. <div class="separator" style="clear: both; text-align: left;">
463. <span style="font-size: small;"><br /></span></div>
464. <div class="separator" style="clear: both; text-align: left;">
465. <span style="font-size: small;">Fundamental drivers: So with all this US Dollar technical bullishness I have to ask myself what are the fundamental drivers for such a move going forward? I believe the US economy (and by default then the world economy) is heading towards a massive contraction very much like the contraction seen in the late 1930's (almost 10 years past the '29 crash) that literally laid the ground work for the 2nd world war. The looming US 'fiscal cliff' and the now completely failed 'austerity measures' of the PIGS nations of Europe are very much like Germany refusing to make WW1 reparations in the 1920's. While in the short term they are headline catchers and make for good political fodder, these kind of policies have far reaching consequences for national currencies, domestic economies and play right into the 'fear' cycle scenario. Indeed, very rarely do we see economists agree on an outcome; yet here it would seem they all agree that an economic contraction (dare we use the 'R' word) is coming, the question is how big (<a href="http://www.reuters.com/article/2012/10/28/us-usa-economy-cliff-idUSBRE89R0EL20121028">Reuters news link</a>).</span></div>
466. <div class="separator" style="clear: both; text-align: left;">
467. <br /></div>
468. <div class="separator" style="clear: both; text-align: left;">
469. <span style="font-size: small;">We know commodity prices will boom into 2017<span style="font-size: small;"> which al<span style="font-size: small;">so means<span style="font-size: small;"> </span></span></span>paper assets will bottom. </span><span style="font-size: small;"><span style="font-size: small;"><span style="font-size: small;">Th<span style="font-size: small;">at event is <span style="font-size: small;">just under five year awa<span style="font-size: small;">y and we will be guaranteed to see some very wild price swing<span style="font-size: small;">s over the <span style="font-size: small;">interim<span style="font-size: small;">.</span></span></span></span></span></span></span><span style="font-size: small;"> </span></span>Th<span style="font-size: small;">e</span> combination of global competitive currency devaluation (QE programs) coupled with bad debt being piled upon more bad debt (historic <span style="font-size: small;">budget </span>deficits) has pretty much guaranteed our anticipated 'fear' cycle peak outcome</span><span style="font-size: small;"><span style="font-size: small;"><span style="font-size: small;"><span style="font-size: small;"><span style="font-size: small;"><span style="font-size: small;"><span style="font-size: small;"><span style="font-size: small;"><span style="font-size: small;"><span style="font-size: small;"> </span></span></span></span></span></span>- the only question now, how violent will vio<span style="font-size: small;">lent</span> get....and unfortunately, it can get pretty ugly around these 'fear' cycle turns<span style="font-size: small;">.<span style="font-size: small;">..</span></span></span></span></span></span></div>
470. <div class="separator" style="clear: both; text-align: left;">
471. <br /></div>
472. <div class="separator" style="clear: both; text-align: left;">
473. <span style="font-size: small;">That's all for this issue of the CTS Spotlight,</span></div>
474. <div>
475. <span style="font-size: small;"> Brian Beamish FCSI<br />the_rational_investor@yahoo.com</span></div>
476. <div>
477. <span style="font-size: small;"><a href="http://www.therationalinvestor.ca/RI_Tradents.php#wctsspotlight">http://www.therationalinvestor.ca/RI_Tradents.php#wctsspotlight</a><br /><a href="http://www.therationalinvestor.ca/">http://www.therationalinvestor.ca</a></span></div>
478. </div>
479. <span style="font-size: xx-small;"><br /></span></div>
480. </description><link>http://wtcsspotlight.blogspot.com/2012/11/cts-spotlight-blog-for-november-2nd-2012.html</link><author>noreply@blogger.com (The Cdn. Rational Investor)</author><media:thumbnail xmlns:media="http://search.yahoo.com/mrss/" url="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgZuhNZ6D31EUPyGnV98Rb77X9lQLsJ7EcanSJcng6Ee6TSMDTltrJqunmMJ8oI7kHFlHxOLM5_T5x2tc0dxtGFUcD7ihc8oDhowMeiJTeanLAQo_lkyxQp51bob1uOI6gwFqB8ZXMW9JY/s72-c/CTSSpotlightUSDollar110212.bmp" height="72" width="72"/><thr:total>0</thr:total></item><item><guid isPermaLink="false">tag:blogger.com,1999:blog-6557910854406592777.post-344267899194493555</guid><pubDate>Sun, 19 Aug 2012 20:01:00 +0000</pubDate><atom:updated>2012-08-19T13:04:00.060-07:00</atom:updated><title>CTS Spotlight Blog for August 17th, 2012</title><description>&lt;div style=&quot;font-family: &amp;quot;Trebuchet MS&amp;quot;,sans-serif;&quot;&gt;
481. <span style="font-size: small;">Hello and welcome back to CRI's CTS Spotlight Blog.</span></div>
482. <div style="font-family: "Trebuchet MS",sans-serif;">
483. <br /></div>
484. <div style="font-family: "Trebuchet MS",sans-serif;">
485. <span style="font-family: "Trebuchet MS",sans-serif; font-size: small;">08/17/12: In very
486. light holiday volume we have seen some dramatic price action through the
487. past week. Most notably, the much stronger US jobs data (and a waning
488. fear of recession) have put a top in the long dated government bonds and
489. have pushed major stock indices to within shouting distance of the
490. spring highs. The top in the 10 year US bond is so pronounced I have
491. made it the subject of this week's WCTS blog spotlight. Seeming to
492. confirm this 're-flation' notion, commodity prices in general are
493. moving higher across the board and most recent posts on being long the
494. commodity heavy TSX 60 and in some of the Softs markets all seem to be
495. working.</span><span style="font-size: small;"> </span></div>
496. <div style="font-family: "Trebuchet MS",sans-serif;">
497. <span style="font-size: small;"><br /></span></div>
498. <div class="separator" style="clear: both; font-family: "Trebuchet MS",sans-serif; text-align: left;">
499. <span style="font-size: small;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjbLasxAs91EgWhC021FnxNZDS4xYz44ZV3_Go-fVts9hmI_fiKes8kthSgqpvsIVDOEwkFoWbJajnPnx7lmbADcGe_oAIhTKcRkQ9EmB4TL_dSM7Olu5KOjEzjn3y_ap_CWV6kv6IMAUE/s1600/USTreasuries081612.JPG" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" height="191" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjbLasxAs91EgWhC021FnxNZDS4xYz44ZV3_Go-fVts9hmI_fiKes8kthSgqpvsIVDOEwkFoWbJajnPnx7lmbADcGe_oAIhTKcRkQ9EmB4TL_dSM7Olu5KOjEzjn3y_ap_CWV6kv6IMAUE/s320/USTreasuries081612.JPG" width="320" /></a></span></div>
500. <div style="font-family: "Trebuchet MS",sans-serif;">
501. <br /></div>
502. <div style="font-family: "Trebuchet MS",sans-serif;">
503. <span style="font-size: small;"><span style="font-family: "Trebuchet MS",sans-serif;">As we move our way through this 17.5 year 'fear' cycle (expected peak Q3, 2017) there ought to be a general preference towards income paying securities over growth [Please refer to <a href="http://www.therationalinvestor.ca/seminars/macro_analysis.html#17cycle">CRI's Macro-economic analysis seminar</a> for more detail]. </span><span style="font-family: "Trebuchet MS",sans-serif;">The
504. fear of recession (both locally within North American and globally)
505. coupled with a credit crunch has had investors running to 'safe' assets,
506. like US Government Bonds, for a few years now. </span><span style="font-family: "Trebuchet MS",sans-serif;">This trend can be clearly seen in the chart above - where US Government Treasuries have enjoyed a rather dramatic bull run over the past few years. </span></span></div>
507. <div style="font-family: "Trebuchet MS",sans-serif;">
508. <br /></div>
509. <div style="font-family: "Trebuchet MS",sans-serif;">
510. <span style="font-size: small;"><span style="font-family: "Trebuchet MS",sans-serif;">While we know that this macro trend ought to continue for at least another five years, we also know that there ought to be pockets of 'correctionary' price action along the way. Short periods of time where the market cleans up any 'overbought' conditions before laying the groundwork for another leg higher. This is the point where I believe the market currently is. Not a new long term trend - a correction within a long term trend.</span></span></div>
511. <div style="font-family: "Trebuchet MS",sans-serif;">
512. <br /></div>
513. <div style="font-family: "Trebuchet MS",sans-serif;">
514. <span style="font-size: small;"><span style="font-family: "Trebuchet MS",sans-serif;">A rising bond market is in itself a deflationary situation - literally a lack of fear of inflation. The bursting of the US housing market bubble was the catalyst for the current 'dis-inflationary' spiral we are in now. Indeed, interest rates have move dramatically lower but may not clearly reflect the current situation. Economic data from North America is generally getting better as the FOMC has literally kept the gas pedal floored in an attempt to stimulate the economy. With the recent top in the bond market and an associated breakout to new highs in the stock market, one might come to be belief that the gas is finally reaching the engine.</span></span></div>
515. <div style="font-family: "Trebuchet MS",sans-serif;">
516. <span style="font-size: small;"><br /></span></div>
517. <div style="font-family: "Trebuchet MS",sans-serif;">
518. <span style="font-size: small;"><span style="font-family: "Trebuchet MS",sans-serif;">So where might prices go over the near term if indeed there is a top in the bond market? The chart above clearly illustrates my three target zones should the recent top hold (please refer to chart above). These include a very healthy correction back into support around 130.6 (Point A.), a full correction back to the 50% level of this entire bull run around 126.80 (Point B.) and finally the 'all hell has broke loose' target back at the long term support around 123 (Point C.).</span></span></div>
519. <div style="font-family: "Trebuchet MS",sans-serif;">
520. <br /></div>
521. <div style="font-family: "Trebuchet MS",sans-serif;">
522. <span style="font-size: small;"><span style="font-family: "Trebuchet MS",sans-serif;">It is interesting to see that the US bond market set up an almost perfect 'OTE' short entry point around 135. It is interesting too that a move back to the refered to points above would represent interesting 'OTE' long entry areas.</span></span></div>
523. <div style="font-family: "Trebuchet MS",sans-serif;">
524. <br /></div>
525. <div style="font-family: "Trebuchet MS",sans-serif;">
526. <br /></div>
527. <div style="font-family: "Trebuchet MS",sans-serif;">
528. <div class="separator" style="clear: both; text-align: left;">
529. <span style="font-size: small;">That's all for this issue of the CTS Spotlight,</span></div>
530. <div>
531. <span style="font-size: small;"> Brian Beamish FCSI<br />the_rational_investor@yahoo.com</span></div>
532. <div>
533. <span style="font-size: small;"><a href="http://www.therationalinvestor.ca/RI_Tradents.php#wctsspotlight">http://www.therationalinvestor.ca/RI_Tradents.php#wctsspotlight</a><br /><a href="http://www.therationalinvestor.ca/">http://www.therationalinvestor.ca</a></span></div>
534. </div>
535. &lt;span style=&quot;font-size: x-small;&quot;&gt;&lt;br /&gt;&lt;/span&gt;</description><link>http://wtcsspotlight.blogspot.com/2012/08/cts-spotlight-blog-tsx-for-august-17th.html</link><author>noreply@blogger.com (The Cdn. Rational Investor)</author><media:thumbnail xmlns:media="http://search.yahoo.com/mrss/" url="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjbLasxAs91EgWhC021FnxNZDS4xYz44ZV3_Go-fVts9hmI_fiKes8kthSgqpvsIVDOEwkFoWbJajnPnx7lmbADcGe_oAIhTKcRkQ9EmB4TL_dSM7Olu5KOjEzjn3y_ap_CWV6kv6IMAUE/s72-c/USTreasuries081612.JPG" height="72" width="72"/><thr:total>0</thr:total></item><item><guid isPermaLink="false">tag:blogger.com,1999:blog-6557910854406592777.post-2944125946373788108</guid><pubDate>Sun, 12 Aug 2012 20:58:00 +0000</pubDate><atom:updated>2012-08-12T19:26:52.840-07:00</atom:updated><title>CTS Spotlight Blog, TSX, for August 10th, 2012</title><description>&lt;div style=&quot;font-family: &amp;quot;Trebuchet MS&amp;quot;,sans-serif;&quot;&gt;
536. <span style="font-size: small;">Hello and welcome back to CRI's CTS Spotlight Blog.</span></div>
537. <div style="font-family: "Trebuchet MS",sans-serif;">
538. <br /></div>
539. <div style="font-family: "Trebuchet MS",sans-serif;">
540. <span style="font-size: small;">They say, <i>when it rains it pours</i>. To that end, here is yet another CTS Spotlight Blog entry for you to consider in the coming trading sessions.</span></div>
541. <div style="font-family: "Trebuchet MS",sans-serif;">
542. <br /></div>
543. <div style="font-family: "Trebuchet MS",sans-serif;">
544. <span style="font-size: small;">There appears to be a general consensus on what to do about the European debt situation, how bad it really is and who could be potentially affected. There have also been very stern comments from the ECB suggesting they will do 'whatever is necessary' to defend the Euro-FX. Couple this 'capitulatory' talk with surprisingly bullish jobs data out of the US, a Fed ready to add liquidity (not take it away) and very robust corporate earnings and it is my belief that the late spring/early summer 2012 correction is behind us. Consider too that we do have an upcoming US Presidential election in early November. I only mention this last part because we very rarely have a collapsing market into such events. </span><br />
545. <br />
546. <span style="font-size: small;">From a contrarian perspecitive, it is Interesting to see that even though many of the world's indices are approaching their spring highs (and in my opinion starting to point higher in earnest) there remains a rather large bearish sentiment in the market - suggesting there are still plenty of investors either short or sitting on the sidelines. Should The Dow, Nasdaq or the S&P break to new highs, we could see a mass rush of buying on the 'don't miss the boat' trade.</span></div>
547. <div style="font-family: "Trebuchet MS",sans-serif;">
548. <br /></div>
549. <div style="font-family: "Trebuchet MS",sans-serif;">
550. <span style="font-size: small;">So why am I mentioning all of this? Canadian stocks have been hit especially hard through this seasonal correction. Because of Canada's heavy reliance on the resource sector (a volatile sector by definition) Canadian investors have to face more and more volatility in their portfolios as we head into the 17.5 year 'fear' cycle peak. It's not much fun on the way down - but oh boy it can crazy on the way up. (which of course we all know exactly when it's gong to happen - right? If you answered NO to that question maybe you should go take <a href="http://www.therationalinvestor.ca/seminars/macro_analysis.html">CRI's macro-economics seminar</a> to brush up on your fundamentals). Times ought to be very good for Canada in general over the next five years but any news/fear of recession in the US can/will lead to dramatic month-to-month price swings like we just saw over the past 4 months. Recent upbeat US jobs data, a very healthy yield curve and strong corporate profits are not the hallmarks of recessions and I do NOT believe the US is there at the moment. Once the US election is over and we are facing 'the fiscal cliff' I believe all bets are off and am probably going to suggest going to 'cash' at that point. But that is four months away and over the interim prices look to be heading higher - not lower. </span></div>
551. <div style="font-family: "Trebuchet MS",sans-serif;">
552. <br /></div>
553. <div class="separator" style="clear: both; text-align: left;">
554. <a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhny0PZHf81A9Z438PX07GTmpfsywauxSbldCL5vv9F_wXyAxmLs1IpOGdk-LG31UUg4wb3jJ1H-JuFCzb4IIpQL96ngAGT-uQ1f7JwsQpOd6pVqRoRJYLnFuIBMrXLR2WAs7uMvyg-vCI/s1600/WCTSotlightTSX081012.JPG" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" height="245" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhny0PZHf81A9Z438PX07GTmpfsywauxSbldCL5vv9F_wXyAxmLs1IpOGdk-LG31UUg4wb3jJ1H-JuFCzb4IIpQL96ngAGT-uQ1f7JwsQpOd6pVqRoRJYLnFuIBMrXLR2WAs7uMvyg-vCI/s320/WCTSotlightTSX081012.JPG" width="320" /></a></div>
555. <div style="font-family: "Trebuchet MS",sans-serif;">
556. <span style="font-size: small;">So now on to the chart. The first thing that jumps at me is the fact that the 50% level is almost 40 points higher than where we are now. Yet the recent lows are only 20 points lower. That would represent a 2:1 risk reward model. Addtionally, this market is current within both the 2 year and 1 year 'OTE' zones suggesting again that the risk/reward model is tilted towards the reward side.  </span></div>
557. <div style="font-family: "Trebuchet MS",sans-serif;">
558. <br /></div>
559. <div style="font-family: "Trebuchet MS",sans-serif;">
560. <span style="font-size: small;">I would advise taking some time over the coming week to look seriously at 6-12 month call options (on your most favored ETF proxy....for me probably the XIU March, 2013 $17 call currently $1.05 offered <a href="http://tmx.quotemedia.com/options-quote.php?qm_symbol=XIU&qm_page=33779">TMX link</a> or about twice what I want). If I can find one where the price paid today is half (or less) what the intrinsic value of the option will be should prices move to the 50% level, I might just pull the trigger - seems like an interesting OnlyDoubles trade, no????</span></div>
561. <div style="font-family: "Trebuchet MS",sans-serif;">
562. <br /></div>
563. <div style="font-family: "Trebuchet MS",sans-serif;">
564. <div class="separator" style="clear: both; text-align: left;">
565. <span style="font-size: small;">That's all for this issue of the CTS Spotlight,</span></div>
566. <div>
567. <span style="font-size: small;"> Brian Beamish FCSI<br />the_rational_investor@yahoo.com</span></div>
568. <div>
569. <span style="font-size: small;"><a href="http://www.therationalinvestor.ca/RI_Tradents.php#wctsspotlight">http://www.therationalinvestor.ca/RI_Tradents.php#wctsspotlight</a><br /><a href="http://www.therationalinvestor.ca/">http://www.therationalinvestor.ca</a></span></div>
570. </div>
571. &lt;span style=&quot;font-size: x-small;&quot;&gt;&lt;span style=&quot;font-size: small;&quot;&gt;&lt;span style=&quot;font-family: &amp;quot;Trebuchet MS&amp;quot;,sans-serif;&quot;&gt;&lt;/span&gt;&lt;/span&gt;&lt;br /&gt;&lt;/span&gt;</description><link>http://wtcsspotlight.blogspot.com/2012/08/cts-spotlight-blog-tsx-for-august-10th.html</link><author>noreply@blogger.com (The Cdn. Rational Investor)</author><media:thumbnail xmlns:media="http://search.yahoo.com/mrss/" url="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhny0PZHf81A9Z438PX07GTmpfsywauxSbldCL5vv9F_wXyAxmLs1IpOGdk-LG31UUg4wb3jJ1H-JuFCzb4IIpQL96ngAGT-uQ1f7JwsQpOd6pVqRoRJYLnFuIBMrXLR2WAs7uMvyg-vCI/s72-c/WCTSotlightTSX081012.JPG" height="72" width="72"/><thr:total>0</thr:total></item><item><guid isPermaLink="false">tag:blogger.com,1999:blog-6557910854406592777.post-4574360763932891315</guid><pubDate>Sun, 05 Aug 2012 20:28:00 +0000</pubDate><atom:updated>2012-08-05T13:31:24.575-07:00</atom:updated><title>CTS Spotlight Blog, Softs, for August 3rd, 2012</title><description>&lt;div style=&quot;font-family: &amp;quot;Trebuchet MS&amp;quot;,sans-serif;&quot;&gt;
572. <span style="font-size: small;"><br /></span></div>
573. <div style="font-family: "Trebuchet MS",sans-serif;">
574. <span style="font-size: small;">Hello and welcome back to CRI's CTS Spotlight Blog.</span><br />
575. </div>
576. <div style="font-family: "Trebuchet MS",sans-serif;">
577. </div>
578. <div style="font-family: "Trebuchet MS",sans-serif;">
579. <span style="font-size: small;">Since I had the time this week, and I see some startling opportunities out there in the market, I thought I would post my thoughts on the 'softs' market in general and point out two intersting opportunities developing within the sector.</span><br />
580. </div>
581. <div style="font-family: "Trebuchet MS",sans-serif;">
582. </div>
583. <div style="font-family: "Trebuchet MS",sans-serif;">
584. <span style="font-size: small;">So here is my CTS summary for the week of August 3rd, 2012:</span></div>
585. <div style="font-family: "Trebuchet MS",sans-serif;">
586. <span style="font-size: small;"> 08/03/12: After a
587. week's hiatus, we are back in the saddle! In what appears to be a
588. rather normal bounce (coming out of the seasonal trough of late
589. spring/early summer) commodity prices in general are moving higher. ECB
590. help from Europe, better employment data from North America and
591. stabilization from Asia all seem to be supporting the idea of higher,
592. not lower prices going forward. Some rather aggressively (grains),
593. others mid stream (energies) while others seem to be just getting
594. started (softs). Indeed, Softs got hit very hard through the correction
595. and look to be offering some very interesting risk/reward potentials
596. here. For more on that please refer to this weeks WTCS blog post.</span><br />
597. </div>
598. <div style="font-family: "Trebuchet MS",sans-serif;">
599. </div>
600. <div style="font-family: "Trebuchet MS",sans-serif;">
601. <span style="font-size: small;">Specifically, I am refering to Orange Juice and Cotton as outlined in the chart and associated tables below:</span></div>
602. <div style="font-family: "Trebuchet MS",sans-serif;">
603. </div>
604. <div class="separator" style="clear: both; font-family: "Trebuchet MS",sans-serif; text-align: left;">
605. <span style="font-size: small;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgYAV5vl9_hV3zhqKLuS9MI3I1Quo3VeKQVOHZmFWPqvyLaMPT0znEqy9Jd5fPggNLBCEHDBiYxzMlu3S6Bqqv5XNQYDPzmMOUsrRJp9FrLJwnEEM2VHna-3xcPNjm-JqjbF7nJVpwnUuU/s1600/OJWkly080312.JPG" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" height="232" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgYAV5vl9_hV3zhqKLuS9MI3I1Quo3VeKQVOHZmFWPqvyLaMPT0znEqy9Jd5fPggNLBCEHDBiYxzMlu3S6Bqqv5XNQYDPzmMOUsrRJp9FrLJwnEEM2VHna-3xcPNjm-JqjbF7nJVpwnUuU/s320/OJWkly080312.JPG" width="320" /></a></span></div>
606. <div style="font-family: "Trebuchet MS",sans-serif;">
607. </div>
608. <div style="font-family: "Trebuchet MS",sans-serif;">
609. <span style="font-size: small;">Both of these markets have yet to respond to the broader market bottom of late. While I am not an outright bull on either market yet, it is interesting to see the 'OTE' trade idea at work (In short, taking a position at or near a 70.5% retracement of the consolidation range and risking a break of the significant range pivot). You can see how OTE suggested getting long cocoa several trading sessions ago and now we seem to have a working uptrend there. Can either OJ or Cotton do the same? At these risk levels (Cotton: .65 risk for 45.00 potential reward!!!!!! & OJ: $8.50 risk for $32.00 potential reward) is it not at least prudent to consider the trade. From a fundamental perspective, either one good 'hurricane fear' or a little of the grain misery passed on to cotton growers and either one of these markets could spike back to their respective 50% levels and most probably back to filling in their rather weekly price gaps.</span></div>
610. <div style="font-family: "Trebuchet MS",sans-serif;">
611. <span style="font-size: small;"><br /></span></div>
612. <div style="font-family: "Trebuchet MS",sans-serif;">
613. <div class="separator" style="clear: both; text-align: left;">
614. <span style="font-size: small;">That's all for this issue of the CTS Spotlight,</span></div>
615. <div>
616. <span style="font-size: small;"> Brian Beamish FCSI<br />the_rational_investor@yahoo.com</span></div>
617. <div>
618. <span style="font-size: small;"><a href="http://www.therationalinvestor.ca/RI_Tradents.php#wctsspotlight">http://www.therationalinvestor.ca/RI_Tradents.php#wctsspotlight</a><br /><a href="http://www.therationalinvestor.ca/">http://www.therationalinvestor.ca</a></span></div>
619. &lt;/div&gt;</description><link>http://wtcsspotlight.blogspot.com/2012/08/cts-spotlight-blog-softs-for-august-3rd.html</link><author>noreply@blogger.com (The Cdn. Rational Investor)</author><media:thumbnail xmlns:media="http://search.yahoo.com/mrss/" url="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgYAV5vl9_hV3zhqKLuS9MI3I1Quo3VeKQVOHZmFWPqvyLaMPT0znEqy9Jd5fPggNLBCEHDBiYxzMlu3S6Bqqv5XNQYDPzmMOUsrRJp9FrLJwnEEM2VHna-3xcPNjm-JqjbF7nJVpwnUuU/s72-c/OJWkly080312.JPG" height="72" width="72"/><thr:total>0</thr:total></item><item><guid isPermaLink="false">tag:blogger.com,1999:blog-6557910854406592777.post-9053051715226750074</guid><pubDate>Sun, 29 Jul 2012 04:58:00 +0000</pubDate><atom:updated>2012-07-28T21:58:49.198-07:00</atom:updated><title>CTS Spotlight Blog, Indian Rupee, for July 27, 2012</title><description>&lt;div style=&quot;font-family: &amp;quot;Trebuchet MS&amp;quot;,sans-serif;&quot;&gt;
620. </div>
621. <div style="font-family: "Trebuchet MS",sans-serif;">
622. <span style="font-size: small;"><span>Hello and welcome back to CRI's CTS Spotlight Blog.</span></span></div>
623. <div style="font-family: "Trebuchet MS",sans-serif;">
624. <span style="font-size: small;"><span>  </span></span></div>
625. <div style="font-family: "Trebuchet MS",sans-serif;">
626. <span style="font-size: small;">Since trading Crude Oil in earnest for the past six months (please refer to <a href="http://crisdaytrading.blogspot.com/">CRI's DayTradingBlog</a>) I must admit I have been letting this blog slide a little of late. </span></div>
627. <div style="font-family: "Trebuchet MS",sans-serif;">
628. <br /></div>
629. <div style="font-family: "Trebuchet MS",sans-serif;">
630. <span style="font-size: small;">So for something a little different, I thought I might use this platform to take a look a specific markets as they come to my attention.To that end, this week a friend of mine asked for my thoughts on the Indian Rupee. Frankly, I have always been a little suspect of this currency trading unit and wouldn't be inclined to 'invest' my hard earned dollars into it directly. But considering the myriad of North American based ETF's and other such products, it seems only prudent to at least be cognizant of what is going on. </span></div>
631. <div style="font-family: "Trebuchet MS",sans-serif;">
632. <br /></div>
633. <div class="separator" style="clear: both; font-family: "Trebuchet MS",sans-serif; text-align: left;">
634. <span style="font-size: small;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjyzfxIk0aHPhDG4ya01msYH7JNNi08WrkmVIqwYIfvpYyBFS5VPcqrTe8bREJrHJFED4LgWFMt_FlFHgabexyFbDpuZCIiuvbQ4NPbclIzpB_0Xp9hEH9UL7BGqj2LFTmYQO9KZtJg0wo/s1600/CTSpotlightBlogIndianRupee0712.JPG" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" height="315" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjyzfxIk0aHPhDG4ya01msYH7JNNi08WrkmVIqwYIfvpYyBFS5VPcqrTe8bREJrHJFED4LgWFMt_FlFHgabexyFbDpuZCIiuvbQ4NPbclIzpB_0Xp9hEH9UL7BGqj2LFTmYQO9KZtJg0wo/s320/CTSpotlightBlogIndianRupee0712.JPG" width="320" /></a></span></div>
635. <div style="font-family: "Trebuchet MS",sans-serif;">
636. <span style="font-size: small;"><br /></span></div>
637. <div style="font-family: "Trebuchet MS",sans-serif;">
638. <span style="font-size: small;">On first blush my knee jerk reaction was to be looking for a top. Yet one fatal mistake many novice traders do is to assume a change when there really isn't one. So, while my hunch is we need to come back to the daily and weekly 50% levels and clean up what appears to be an overbought market, there is NO top in place on either the US or Canadian crosses. One must still be looking for the recent highs to be tested and then if broken, the respective uptrend channel lines next.</span></div>
639. <div style="font-family: "Trebuchet MS",sans-serif;">
640. <span style="font-size: small;"><br /></span></div>
641. <div style="font-family: "Trebuchet MS",sans-serif;">
642. <span style="font-size: small;">On a side note, it is interesting to see such strength in the face what appears to be world wide weakness. This, in itself, is quite bullish and does suggest one ought to be looking for substantially higher prices to come. Is India becoming a reserve currency in itself? While that may be stretching things a bit, the internal Indian economy seems to be offsetting overseas weakness. While 'reserve currency' status may be years down the road, we at least know that for the next 5 years (give or take a quarter or two) this country will have the wind at its back and not in it's face...</span></div>
643. <div style="font-family: "Trebuchet MS",sans-serif;">
644. <span style="font-size: small;"><br /></span></div>
645. <div style="font-family: "Trebuchet MS",sans-serif;">
646. <span style="font-size: small;">Trading perspective. While this market is clearly trending higher, one must be weary of buying into risky markets. I could easily see the daily and weekly 50% levels tested in earnest and still feel like this market is trending higher. To that end, new purchases of either unit ought to be put on hold until some sort of 'clean up process' happens. Those that are long should be looking to take at least partial profits on existing positions (if you haven't already done so) and enjoying a free ride on the remaining (and what should be relatively 'risk free') positions.</span></div>
647. <div style="font-family: "Trebuchet MS",sans-serif;">
648. <span style="font-size: small;"><br /></span></div>
649. <div style="font-family: "Trebuchet MS",sans-serif;">
650.  
651. <span style="font-size: small;"><br /></span></div>
652. <div class="separator" style="clear: both; font-family: "Trebuchet MS",sans-serif; text-align: left;">
653.  
654. <span style="font-size: small;"><span><span><span><span>That's all for this issue of the CTS Spotlight,</span></span></span></span></span></div>
655. <div style="font-family: "Trebuchet MS",sans-serif;">
656.  
657. <span style="font-size: small;"><span><span><span><span> Brian Beamish FCSI<br />
658. the_rational_investor@yahoo.com</span></span></span></span></span></div>
659. <div style="font-family: "Trebuchet MS",sans-serif;">
660.  
661. <span style="font-size: small;"><span><a href="http://www.therationalinvestor.ca/RI_Tradents.php#wctsspotlight">http://www.therationalinvestor.ca/RI_Tradents.php#wctsspotlight</a><br />
662. &lt;a href=&quot;http://www.therationalinvestor.ca/&quot;&gt;http://www.therationalinvestor.ca&lt;/a&gt;&lt;/span&gt;&lt;/span&gt;&lt;/div&gt;</description><link>http://wtcsspotlight.blogspot.com/2012/07/cts-spotlight-blog-indian-rupee-for.html</link><author>noreply@blogger.com (The Cdn. Rational Investor)</author><media:thumbnail xmlns:media="http://search.yahoo.com/mrss/" url="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjyzfxIk0aHPhDG4ya01msYH7JNNi08WrkmVIqwYIfvpYyBFS5VPcqrTe8bREJrHJFED4LgWFMt_FlFHgabexyFbDpuZCIiuvbQ4NPbclIzpB_0Xp9hEH9UL7BGqj2LFTmYQO9KZtJg0wo/s72-c/CTSpotlightBlogIndianRupee0712.JPG" height="72" width="72"/><thr:total>0</thr:total></item><item><guid isPermaLink="false">tag:blogger.com,1999:blog-6557910854406592777.post-7501660253447390090</guid><pubDate>Sun, 29 Apr 2012 17:28:00 +0000</pubDate><atom:updated>2012-04-29T10:28:40.167-07:00</atom:updated><title>CTS Spotlight Blog, Canadian Dollar, for April 27, 2012</title><description>&lt;div style=&quot;font-family: &amp;quot;Trebuchet MS&amp;quot;,sans-serif;&quot;&gt;
663. <span style="font-size: small;">04/27/12: The first
664. signs of a crack in the US Dollar Index showed this past trading week.
665. While a collapse is a little premature to predict, the break does
666. suggest the much anticipated change in US Fed policy may still be quite
667. some time to come. Indeed, confirming this notion, US Long dated
668. Treasuries have reversed their recent breakdown and have pushed to new
669. highs. Interestingly, the Canadian dollar has bottomed vs. the Greenback
670. as Canadian bonds have not broken their recent top and on word from BOC
671. Governor Carney warning the Canadian public to expect higher rates
672. there soon. Additionally, Crude Oil looks to have found support just
673. above $100/barrel which is interestingly often led/supported by the
674. Canadian and Australian dollars (the commodity currencies). </span></div>
675. <div style="font-family: "Trebuchet MS",sans-serif;">
676. <span style="font-size: small;"><br /></span></div>
677. <div class="separator" style="clear: both; font-family: "Trebuchet MS",sans-serif; text-align: left;">
678. <span style="font-size: small;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjJfLm7BwpiSbmEgl0uGpgdawc8QQEP0n9eeTmacqxSbQZGERF-bRkmfhZDdPlIKyOwKJMZjVmL2i__qBw3Bqi0jrLoXtRm9zQib90rTrYFiMIEmh8w7iE7LvIA56cuKO09pTLe0PycMn4/s1600/CTSSpotlightCD042712a.JPG" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" height="240" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjJfLm7BwpiSbmEgl0uGpgdawc8QQEP0n9eeTmacqxSbQZGERF-bRkmfhZDdPlIKyOwKJMZjVmL2i__qBw3Bqi0jrLoXtRm9zQib90rTrYFiMIEmh8w7iE7LvIA56cuKO09pTLe0PycMn4/s320/CTSSpotlightCD042712a.JPG" width="320" /></a></span></div>
679. <div style="font-family: "Trebuchet MS",sans-serif;">
680. <span style="font-size: small;"><br /></span></div>
681. <div style="font-family: "Trebuchet MS",sans-serif;">
682. <br /></div>
683. <div style="font-family: "Trebuchet MS",sans-serif;">
684. <span style="font-size: small;">This week I thought I would take a good look at the Canadian dollar since I made reference to it so much in the weekly CTS. </span></div>
685. <div style="font-family: "Trebuchet MS",sans-serif;">
686. <span style="font-size: small;"><br /></span></div>
687. <div style="font-family: "Trebuchet MS",sans-serif;">
688. <span style="font-size: small;">After putting in a well defined double top pattern through the spring and summer of 2011, the Loonie promptly gave back the entire bull run of the previous year in a matter of a couple months. Importantly, the Loonie did not break the previous significant monthly low (92.13) suggesting the longer term bull market was still in place. As it appeared that Europe's debt issues had for the time being been contained within Europe, the Loonie quickly took back a good portion of the sell off and has spent the better part of the past year oscillating between the lows and the 50% level. As energy prices have improved so too has the broader Canadian economy as well as the prospects for significant infrastructure spending going forward. The anticipation of such spending has created a whirl wind of activity within the western portion of the country. So much so that BOC chairman Carney recently warned Canadian's of higher short term interest rates to come. Additionally, Canadian long dated government bonds have not broken out as have their US counterparts suggesting any slowdown south of the boarder shouldn't be too constrictive on Canadian GDP.</span></div>
689. <div style="font-family: "Trebuchet MS",sans-serif;">
690. <span style="font-size: small;"><br /></span></div>
691. <div style="font-family: "Trebuchet MS",sans-serif;">
692. <span style="font-size: small;">As a direct result of this relatively rosy outlook for the Canadian economy, the Loonie has started to appreciate vs. the Greenback. On a short term basis, we have broken through recent peaks suggesting prices do want to move higher. While the short term bull flag I have outlined does suggest a move north of 104, on further inspection it does seem a little conservative of a target. I wouldn't be surprised if we shot a little farther than 104 then consolidate around the 104 area. Should be move through 104 cleanly (or on a subsequent breakout after a consolidation), a serious test of last year's peak (just above 106) seems likely.</span></div>
693. <div style="font-family: "Trebuchet MS",sans-serif;">
694. <span style="font-size: small;"><br /></span></div>
695. <div style="font-family: "Trebuchet MS",sans-serif;">
696. <span style="font-size: small;">A couple of side notes I would make here:</span></div>
697. <div style="font-family: "Trebuchet MS",sans-serif;">
698. <span style="font-size: small;">As a student of the market for more than 15 years, I have noticed that the commodity currencies in general lead basic commodity prices. Those currencies in particular are the Canadian and Australian dollars. Both are pointing higher at the moment which does support the notion of higher raw commodity prices in general going forward. This should be a helpful tool for all those that follow CRI's day trading blog on Crude Oil and does confirm our basic thesis that Crude prices are pointing higher too in the short term.</span></div>
699. <div style="font-family: "Trebuchet MS",sans-serif;">
700. <br /></div>
701. <div style="font-family: "Trebuchet MS",sans-serif;">
702. <span style="font-size: small;">2. Interestingly, Asia had been the significant driver for world economic growth over the past decade and the Australian dollar was a direct beneficiary (almost doubling in value vs. the US dollar over the time period). As Europe flounders in its sea of debt and China appears headed for a harder landing than was expected, It appears in the short term North America (and particularly North America ex. USA) is currently the best place for economic growth going forward. Does that mean we could see the Canadian dollar rise materially vs. the Australasian dollar? Is this a spread trade in the making? Further research does seem warranted...</span></div>
703. <div style="font-family: "Trebuchet MS",sans-serif;">
704. <br /></div>
705. <div class="separator" style="clear: both; font-family: "Trebuchet MS",sans-serif; text-align: left;">
706. <span style="font-size: small;"><span><span><span>That's all for this issue of the CTS Spotlight,</span></span></span></span></div>
707. <div style="font-family: "Trebuchet MS",sans-serif;">
708. <span style="font-size: small;"><span><span><span> Brian Beamish FCSI<br />
709. the_rational_investor@yahoo.com</span></span></span></span></div>
710. <span style="font-size: small;"><span style="font-family: "Trebuchet MS",sans-serif;"><a href="http://www.therationalinvestor.ca/RI_Tradents.php#wctsspotlight">http://www.therationalinvestor.ca/RI_Tradents.php#wctsspotlight</a><br />
711. <a href="http://www.therationalinvestor.ca/">http://www.therationalinvestor.ca</a></span></span><span style="font-family: Trebuchet MS,Arial,Helvetica;"><br />
712. </span>
713. <table align="center"><tbody>
714. <tr><td style="text-align: left;"><span style="font-family: Trebuchet MS,Arial,Helvetica;"><br />
715. </span></td><td><br />
716. </td><td><br /></td></tr>
717. </tbody></table>
718. <span style="font-family: Trebuchet MS,Arial,Helvetica;"><br /></span><br />
719. &lt;span style=&quot;font-family: Trebuchet MS,Arial,Helvetica;&quot;&gt;&lt;br /&gt;&lt;/span&gt;</description><link>http://wtcsspotlight.blogspot.com/2012/04/cts-spotlight-blog-canadian-dollar-for.html</link><author>noreply@blogger.com (The Cdn. Rational Investor)</author><media:thumbnail xmlns:media="http://search.yahoo.com/mrss/" url="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjJfLm7BwpiSbmEgl0uGpgdawc8QQEP0n9eeTmacqxSbQZGERF-bRkmfhZDdPlIKyOwKJMZjVmL2i__qBw3Bqi0jrLoXtRm9zQib90rTrYFiMIEmh8w7iE7LvIA56cuKO09pTLe0PycMn4/s72-c/CTSSpotlightCD042712a.JPG" height="72" width="72"/><thr:total>0</thr:total></item><item><guid isPermaLink="false">tag:blogger.com,1999:blog-6557910854406592777.post-3348940612697605212</guid><pubDate>Sun, 19 Feb 2012 19:20:00 +0000</pubDate><atom:updated>2012-02-19T11:23:45.967-08:00</atom:updated><title>CTS Spotlight for the week of February 17th, 2012: Japanese Yen</title><description>&lt;div style=&quot;font-family: &amp;quot;Trebuchet MS&amp;quot;,sans-serif;&quot;&gt;&lt;span style=&quot;font-size: small;&quot;&gt;02/17/12: While the  US dollar index is little changed this week, the Japanese Yen has broken  down materially. The long standing bull market has reversed and  suggests it may need to go through a natural correction process of the  recent multi-year run. Coincidentally, a bottom has formed in the  Eurodollar market. While rather wide, it does suggest that the credit  crunch begun last year has abated for the time being. If this is indeed the  case (the reflation of the world economy) the notion does support a Yen bearish  stance and further appreciation of both equities in particular and  commodity prices in general.&lt;/span&gt;&lt;/div&gt;&lt;div style=&quot;font-family: &amp;quot;Trebuchet MS&amp;quot;,sans-serif;&quot;&gt;&lt;span style=&quot;font-size: small;&quot;&gt;&lt;br /&gt;
720. </span></div><div class="separator" style="clear: both; font-family: "Trebuchet MS",sans-serif; text-align: left;"><span style="font-size: small;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhn95E86iiOM_Ns8jGkQVi9isnbUOarlQiU63g93tRcfOAxI1eB3yV9InjKBeS_fyjhtowTXZGeBnGNL5xNI-0YYVnusPRbe5Z1QFk_Ixr7dw_Gr0F1Q5E582O2zoMR2IPUdXncXO2E76s/s1600/CRIMMJY021712.GIF" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" height="240" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhn95E86iiOM_Ns8jGkQVi9isnbUOarlQiU63g93tRcfOAxI1eB3yV9InjKBeS_fyjhtowTXZGeBnGNL5xNI-0YYVnusPRbe5Z1QFk_Ixr7dw_Gr0F1Q5E582O2zoMR2IPUdXncXO2E76s/s320/CRIMMJY021712.GIF" width="320" /></a></span></div><div style="font-family: "Trebuchet MS",sans-serif;"><span style="font-size: small;"><br />
721. </span></div><div style="font-family: "Trebuchet MS",sans-serif;"><span style="font-size: small;">This week I thought we ought to take a good look at the Japanese Yen. If one is to believe that a top has formed in the Yen (double top breakdown currently working from 12783) then there may be far sweeping fundamental implications going forward. The Yen itself has been quite a rise over the past few years. Since the US Federal Reserve lowered its key borrowing rate into the same range as the Japanese, there has been a definite preference for the Yen over the Dollar. The new 'safe-haven' flow pushed the Yen to rise to historic levels, but that may be changing. As mentioned above, the fact that the Eurodollar market (which is the US corporate short term interest rate market) has bottomed and equity prices are pressing historic highs suggests fear is leaving the market</span><span style="font-size: small;"> and that the world is reflating once again. </span><span style="font-size: small;">In short, the 'safe-haven' trade seems to be over for now.</span></div><div style="font-family: "Trebuchet MS",sans-serif;"><span style="font-size: small;"><br />
722. </span></div><div style="font-family: "Trebuchet MS",sans-serif;"><div style="font-family: "Trebuchet MS",sans-serif;"><span style="font-size: small;">So if indeed the 'safe-haven' trade is over for now, where ought one to expect to see the Yen move to over the coming weeks/months ahead. My primary target here is a 50% retracement of the past 2 year move. Currently that 50% level is in and around the 11900 area. Considering the short signal came in on a move through 12783, there is a potential 800 plus point gainer here. One ought to risk up to recent resistance (the highs from 3 weeks ago at 1.3134) or about 350 points. This trade represents a greater than 2:1 reward to risk ratio so is definitely worth considering. Should we get a daily bounce into resistance and then some sort of failure I will look at a June 121 put option (currently 0.00970). At 11900 this option will have an intrinsic value of .02000 or more than double today's price - but I think we can get it a little cheaper</span></div><div style="font-family: "Trebuchet MS",sans-serif;"><br />
723. </div><div class="separator" style="clear: both; font-family: "Trebuchet MS",sans-serif; text-align: left;"><span style="font-size: small;"><span><span>That's all for this issue of the CTS Spotlight,</span></span></span></div><div style="font-family: "Trebuchet MS",sans-serif;"><span style="font-size: small;"><span><span> Brian Beamish FCSI<br />
724. the_rational_investor@yahoo.com</span></span></span></div><span style="font-size: small;"><span style="font-family: "Trebuchet MS",sans-serif;"><a href="http://www.therationalinvestor.ca/RI_Tradents.php#wctsspotlight">http://www.therationalinvestor.ca/RI_Tradents.php#wctsspotlight</a><br />
725. <a href="http://www.therationalinvestor.ca/">http://www.therationalinvestor.ca</a></span></span><span style="font-family: Trebuchet MS,Arial,Helvetica;"><br />
726. </span></div><table align="center"><tbody>
727. <tr><td style="text-align: left;"><span style="font-family: Trebuchet MS,Arial,Helvetica;"><br />
728. </span></td><td><br />
729. </td><td><br />
730. </td></tr>
731. &lt;/tbody&gt;&lt;/table&gt;</description><link>http://wtcsspotlight.blogspot.com/2012/02/cts-spotlight-for-week-of-february-17th.html</link><author>noreply@blogger.com (The Cdn. Rational Investor)</author><media:thumbnail xmlns:media="http://search.yahoo.com/mrss/" url="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhn95E86iiOM_Ns8jGkQVi9isnbUOarlQiU63g93tRcfOAxI1eB3yV9InjKBeS_fyjhtowTXZGeBnGNL5xNI-0YYVnusPRbe5Z1QFk_Ixr7dw_Gr0F1Q5E582O2zoMR2IPUdXncXO2E76s/s72-c/CRIMMJY021712.GIF" height="72" width="72"/><thr:total>0</thr:total></item><item><guid isPermaLink="false">tag:blogger.com,1999:blog-6557910854406592777.post-4877451532335877037</guid><pubDate>Sun, 27 Nov 2011 20:48:00 +0000</pubDate><atom:updated>2011-11-27T12:48:11.917-08:00</atom:updated><title>CTS Spotlight for the week of Nov. 25th, 2011: Swiss Franc</title><description>&lt;div style=&quot;font-family: &amp;quot;Trebuchet MS&amp;quot;,sans-serif;&quot;&gt;&lt;span style=&quot;font-size: small;&quot;&gt;11/25/11: The credit  crunch that began some sixteen weeks ago continues to play itself out.  Short term US corporate interest rates (as measured by the Eurodollar  futures contract) continue to climb while central banks keep government  guaranteed yields at historic lows. Considering this is a European debt  problem it should not surprise to see the Euro currency itself continue  to flounder vs. the US dollar. Interestingly, since the Swiss pegged  their currency to the Euro, it now has rolled over in earnest and is  currently pointing much lower too. Elsewhere, select soft markets and  the whole grain market have begun to collapse (as suggested here many  times over the past few posts) indicating international demand is waning  at these lofty levels. Weak demand, a strong local currency and  out-right fear are dominating the commodities landscape - bulls be  careful.&lt;/span&gt;&lt;/div&gt;&lt;div style=&quot;font-family: &amp;quot;Trebuchet MS&amp;quot;,sans-serif;&quot;&gt;&lt;br /&gt;
732. </div><div class="separator" style="clear: both; font-family: "Trebuchet MS",sans-serif; text-align: left;"><span style="font-size: small;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEj90d34C_JrhC8bVS7HL6kErBwj1vkhZ8g0wFGOf75Cm5PSHZyzTBYjApIdzRp3bnBjTVz3PHqv_tloHx4f6ChlhW2ixiIhd-MMIlGweVllNe_s2XyJwf-dJ0ZnI1o1PWbwottztEUxBas/s1600/CTSSpotlightSF112511.bmp" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" height="245" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEj90d34C_JrhC8bVS7HL6kErBwj1vkhZ8g0wFGOf75Cm5PSHZyzTBYjApIdzRp3bnBjTVz3PHqv_tloHx4f6ChlhW2ixiIhd-MMIlGweVllNe_s2XyJwf-dJ0ZnI1o1PWbwottztEUxBas/s320/CTSSpotlightSF112511.bmp" width="320" /> </a></span></div><div class="separator" style="clear: both; font-family: "Trebuchet MS",sans-serif; text-align: left;"><span style="font-size: small;">This week I thought we ought to take a look at one currency (vs. the US Dollar) that looks especially vulnerable, The Swiss Franc. Since the news of Switzerland's 'pegging' of its local currency to the Euro there has been a dramatic shift away from this once considered <i>last bastion of security</i>. Because of the peg (currently at 1.20 Sw. Franc/1 Euro) the Swiss believe they can control a run-away deflationary spiral that so often affect's countries with rapidly rising currencies. The irony of this belief is that they may indeed get a falling currency, and maybe even a bit more. The chart above is a classic example of what I like to call 'too far too fast'. The end result of these violent moves is often going right back to where the breakout started from. The recently confirmed massive bear flag pole formation (indicated on the chart above) seems to confirm this potential outcome. The rally that kicked this whole move higher off started at 85.73 and the bear flag pole formation target currently sits near .87. The fact that the market has consolidated at the 50% level and subsequently failed further supports this conclusion. So what may cause such a dramatic turn? Firstly, we are well aware of the fact that we are very firmly with another 'credit crunch'. Fear is dominating and when it does, people run into the only thing they can really trust - and for now that still remains the US dollar. Couple this macro backdrop (money moving away from Europe and towards safety) with local political meddling and one can easily see this scenario play itself out. Indeed, of late there have been more calls from Swiss politicians for an even greater devaluation of their currency peg with the Euro - with 1.3 and even 1.4 being tossed around (<a href="http://futures.tradingcharts.com/news/futures/DJ_SNB_Jordan_Swiss_Franc_Still_High__Will_Act_If_Necessary_Report_169105047.html">news link</a>). </span></div><div class="separator" style="clear: both; font-family: "Trebuchet MS",sans-serif; text-align: left;"><span style="font-size: small;"><br />
733. </span></div><div class="separator" style="clear: both; font-family: "Trebuchet MS",sans-serif; text-align: left;"><span style="font-size: small;">So couple local politics with an already weak Euro backdrop and we have the makings for the complete unwinding of a previously violent bull market. Additionally, the charts do confirm this fundamental outlook. The Swiss may indeed get exactly what they want (a weak currency) but the jury is still out on weather it will solve their domestic economic troubles.</span></div><div class="separator" style="clear: both; font-family: "Trebuchet MS",sans-serif; text-align: left;"><span style="font-size: small;"><br />
734. </span></div><div class="separator" style="clear: both; font-family: "Trebuchet MS",sans-serif; text-align: left;"></div><div class="separator" style="clear: both; font-family: "Trebuchet MS",sans-serif; text-align: left;"><span style="font-size: small;"><span>That's all for this issue of the CTS Spotlight,</span></span></div><div style="font-family: "Trebuchet MS",sans-serif;"><span style="font-size: small;"><span> Brian Beamish FCSI<br />
735. the_rational_investor@yahoo.com</span></span></div><span style="font-family: "Trebuchet MS",sans-serif; font-size: small;"><a href="http://www.therationalinvestor.ca/RI_Tradents.php#wctsspotlight">http://www.therationalinvestor.ca/RI_Tradents.php#wctsspotlight</a><br />
736. <a href="http://www.therationalinvestor.ca/">http://www.therationalinvestor.ca</a></span><span style="font-family: Trebuchet MS,Arial,Helvetica;"><br />
737. &lt;/span&gt;</description><link>http://wtcsspotlight.blogspot.com/2011/11/cts-spotlight-for-week-of-nov-25th-2011.html</link><author>noreply@blogger.com (The Cdn. Rational Investor)</author><media:thumbnail xmlns:media="http://search.yahoo.com/mrss/" url="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEj90d34C_JrhC8bVS7HL6kErBwj1vkhZ8g0wFGOf75Cm5PSHZyzTBYjApIdzRp3bnBjTVz3PHqv_tloHx4f6ChlhW2ixiIhd-MMIlGweVllNe_s2XyJwf-dJ0ZnI1o1PWbwottztEUxBas/s72-c/CTSSpotlightSF112511.bmp" height="72" width="72"/><thr:total>0</thr:total></item><item><guid isPermaLink="false">tag:blogger.com,1999:blog-6557910854406592777.post-2489253752754609467</guid><pubDate>Sat, 12 Nov 2011 17:05:00 +0000</pubDate><atom:updated>2011-11-12T11:06:04.840-08:00</atom:updated><title>CTS Spotlight for the week of Nov. 11th, 2011: Oats</title><description>&lt;div style=&quot;font-family: &amp;quot;Trebuchet MS&amp;quot;,sans-serif;&quot;&gt;&lt;span style=&quot;font-size: small;&quot;&gt;11/11/11: Fear has taken over  the currency markets as every uptrend vs. the US dollar has either  failed or outright reversed. US short term corporate interest rates  continue to climb as the &#39;Ted spread&#39; widens. The fundamental seeds  for further price deterioration are being sown, is anyone listening? In  the commodities markets in particular, many of the previously strong  uptrends have either broken or are starting to look vulnerable. This can  be especially seen in the grain markets where Oats (as a good leading  indicator) has just confirmed a very bearish price patten with this  week\&#39;s price action (and is the subject of our WCTS Blog). The only  exception appears to be in the meats, where both Live and Feeder Cattle  look especially strong. This too though makes sense given our outlook  for grain prices.&lt;/span&gt;&lt;/div&gt;&lt;div style=&quot;font-family: &amp;quot;Trebuchet MS&amp;quot;,sans-serif;&quot;&gt;&lt;span style=&quot;font-size: small;&quot;&gt;&lt;br /&gt;
738. </span></div><div class="separator" style="clear: both; font-family: "Trebuchet MS",sans-serif; text-align: left;"><span style="font-size: small;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhymdXxQlaY7Sp_sKR-5AzeIRnEoGGFe1wUzwQV45Lgw-ADPk8mFWRwmh8-9-y8SIKKJiWy-iCNahSBS4RYFKUScA11slrid3k05iSNWYQWPCqkja31-bopl9FELlm2kA9j56qWksm-BIc/s1600/CTS111111Oats.bmp" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" height="245" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhymdXxQlaY7Sp_sKR-5AzeIRnEoGGFe1wUzwQV45Lgw-ADPk8mFWRwmh8-9-y8SIKKJiWy-iCNahSBS4RYFKUScA11slrid3k05iSNWYQWPCqkja31-bopl9FELlm2kA9j56qWksm-BIc/s320/CTS111111Oats.bmp" width="320" /></a></span></div><div style="font-family: "Trebuchet MS",sans-serif;"><span style="font-size: small;"><br />
739. </span></div><div style="font-family: "Trebuchet MS",sans-serif;"><span style="font-size: small;">In polar opposite to last week's blog write-up, the current Oats chart is a definition of bearishness. There are so many reasons to look for prices to correct over the medium term one really doesn't know where to begin. From the fact that the 50% rule suggests prices need to come back to the 307 area; to the well defined downward pointing channel that suggest real support currently sits in the 250 area; to the gap way down at 225, there are plenty of reasons to look for lower prices in this particular grain going forward. Today I am going to comment on what I consider to be the final 'nail' in Oat's 'coffin' - that being the confirmation of a short term bear flag pole formation (with the intra-week move through the October low of 321). </span></div><div style="font-family: "Trebuchet MS",sans-serif;"><span style="font-size: small;"> </span></div><div style="font-family: "Trebuchet MS",sans-serif;"><span style="font-size: small;">From a short term traders perspective, one really loves the see tight, well defined short term price patten. It give the trader an ability to get in and out in a short period of time with very well define price targets. The breaking of 321, in my opinion, represents such an event. The failure of 321 is often refereed to as a bearish flag pole pattern (as one can see on the chart above). The price objective (284.50) is 37 cents away (at $50/pt is $1850) while the risk (to just above 345) represents about 24 points (at $50/pt is $1200). I personally would like at least a 2:1 profit/loss ratio to consider a futures trade. To that end I might look for a rally into the 330s to put the short trade on where a move to above 345 would stop me out but at a much smaller loss. Having said that, I have seen markets collapse on the confirmation of a bear flag patterns so at the very least lets watch and see what happens. Another alternative might be to consider a Put option. March, 2012 Oats (<a href="http://futures.tradingcharts.com/chart/OA/32?anticache=1321116877">chart link</a>) has a similar price pattern where it's bear flag target is [bear flag; 354-(398-331.5)=287.5]. Currently, the March, 2012 $300 put is 4.75 points ($250). At the target, this option will have 12.5 points ($625) of intrisic value or more than twice the price we can pay for the option today. Considering that the option has a little more than 3 months to hit the target, buying this put option to me sounds like a reasonable risk. To that end, I shall be looking into this trade in earnest in the coming week.</span></div><div style="font-family: "Trebuchet MS",sans-serif;"><span style="font-size: small;"><br />
740. </span></div><div class="separator" style="clear: both; font-family: "Trebuchet MS",sans-serif; text-align: left;"><span style="font-size: small;">That's all for this issue of the CTS Spotlight,</span></div><div style="font-family: "Trebuchet MS",sans-serif;"><span style="font-size: small;"> Brian Beamish FCSI<br />
741. the_rational_investor@yahoo.com</span></div><span style="font-family: "Trebuchet MS",sans-serif; font-size: small;"><a href="http://www.therationalinvestor.ca/RI_Tradents.php#wctsspotlight">http://www.therationalinvestor.ca/RI_Tradents.php#wctsspotlight</a><br />
742. <a href="http://www.therationalinvestor.ca/">http://www.therationalinvestor.ca</a></span><span style="font-family: Trebuchet MS,Arial,Helvetica;"><br />
743. &lt;/span&gt;</description><link>http://wtcsspotlight.blogspot.com/2011/11/cts-spotlight-for-week-of-nov-11th-2011.html</link><author>noreply@blogger.com (The Cdn. Rational Investor)</author><media:thumbnail xmlns:media="http://search.yahoo.com/mrss/" url="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhymdXxQlaY7Sp_sKR-5AzeIRnEoGGFe1wUzwQV45Lgw-ADPk8mFWRwmh8-9-y8SIKKJiWy-iCNahSBS4RYFKUScA11slrid3k05iSNWYQWPCqkja31-bopl9FELlm2kA9j56qWksm-BIc/s72-c/CTS111111Oats.bmp" height="72" width="72"/><thr:total>0</thr:total></item><item><guid isPermaLink="false">tag:blogger.com,1999:blog-6557910854406592777.post-7492268414039491479</guid><pubDate>Sun, 06 Nov 2011 16:58:00 +0000</pubDate><atom:updated>2011-11-06T08:58:38.955-08:00</atom:updated><title>CTS Spotlight for the week of Nov. 04th, 2011: Cattle</title><description>&lt;div style=&quot;font-family: &amp;quot;Trebuchet MS&amp;quot;,sans-serif;&quot;&gt;&lt;span style=&quot;font-size: small;&quot;&gt;11/04/11: The US  dollar index rebounded after filling in a gap that remained on the  downside. This rebound came on the heels of a massive intervention by  the BOJ. Last week we commented on the relentless  charge higher by the  Yen. Monday saw the Yen break through key support on the intervention.  That long position should be stopped out but once the dust settles, the  Yen looks to be headed back up to the highs and my expectations, even  further. Elsewhere, the cattle market has registered a massive breakout  in both Live Cattle and Feeder and is the focus of this weeks CTS blog.  One ought to expect much higher prices there going forward.&lt;/span&gt;&lt;/div&gt;&lt;div style=&quot;font-family: &amp;quot;Trebuchet MS&amp;quot;,sans-serif;&quot;&gt;&lt;br /&gt;
744. </div><div class="separator" style="clear: both; font-family: "Trebuchet MS",sans-serif; text-align: left;"><span style="font-size: small;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEik2vLf4LQBsPd88TP7IxU_-l-EW37OkQp2PifKNlp9uiFUWMh6UhAgVDqtjBVRiEznRU2MJ-857Qi2Sjmxh0uyJLgZHlB1r-Gg97SUx1NoYBAItnl-MNr_HH9TftYWFutvVBkVMPOdqqM/s1600/LCW110411.GIF" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" height="243" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEik2vLf4LQBsPd88TP7IxU_-l-EW37OkQp2PifKNlp9uiFUWMh6UhAgVDqtjBVRiEznRU2MJ-857Qi2Sjmxh0uyJLgZHlB1r-Gg97SUx1NoYBAItnl-MNr_HH9TftYWFutvVBkVMPOdqqM/s320/LCW110411.GIF" width="320" /></a></span></div><div style="font-family: "Trebuchet MS",sans-serif;"><br />
745. </div><div style="font-family: "Trebuchet MS",sans-serif;"><span style="font-size: small;">This week I thought we would take a look at one of the few markets that is moving higher in earnest, regardless of the US dollar's trend. Meat prices have lagged the broader market's inflationary action over the past few yeas. Over the past few years we have seen Corn go from $3 to $6, gold from $750 to $1500 and crude from $50 to $150. Meat prices however haven't moved in such a manor. I believe that it is the meat's turn now. </span></div><div style="font-family: "Trebuchet MS",sans-serif;"><span style="font-size: small;"> </span></div><div style="font-family: "Trebuchet MS",sans-serif;"><span style="font-size: small;">From a cost perspective, grain prices are current very weak and any further global economic uncertainty shall reduce demand for already dramatically inflated prices. This is music to a cattle farmer's ears. As the price of grain falls, the carrying cost of herds fall too. Couple this fundamental situation with an already tight supply of cattle and we have the makings of a bull market. Since farmers are not being pressed to sell their herds and they see rising prices, they have incentive to keep their herds in the hopes of seeing higher prices in the not too distant future. In essence, the spiral feeds on itself. Higher prices means less supply to market means higher prices etc.</span></div><div style="font-family: "Trebuchet MS",sans-serif;"><span style="font-size: small;"><br />
746. </span></div><div style="font-family: "Trebuchet MS",sans-serif;"><span style="font-size: small;">Technically speaking, this chart is one of the most beautiful one's a technician can see. Simply put, prices are moving from the lower left to the upper right in a very consistent, steady fashion. Market's often 'go parabolic' near the end of moves, we see no parabolic action here which suggests we are a long way away from the end of this run. Specifically, traders were given a huge buy signal this past week when prices moved through Spring '11 highs (122.60). The formation itself suggests we will see at least another $.10 higher in the short term (where each point = $4 so $.10 = 1000 points = $4000 per contract).</span></div><div style="font-family: "Trebuchet MS",sans-serif;"><span style="font-size: small;"><br />
747. </span></div><div style="font-family: "Trebuchet MS",sans-serif;"><span style="font-size: small;">Notice that this market actually gave you a chance to get in before the massive weekly breakout. CRI got a nice double bottom buy signal 13 weeks ago at 115.50. This position is up almost $4000 itself and yet I think we are just getting going here rather than nearing an end. Regardless of where you are long, enjoy the ride because it looks like this market is just now starting to heat up in earnest.</span></div><div style="font-family: "Trebuchet MS",sans-serif;"><span style="font-size: small;"><br />
748. </span></div><div class="separator" style="clear: both; font-family: "Trebuchet MS",sans-serif; text-align: left;"><span style="font-size: small;"><span>That's all for this issue of the CTS Spotlight,</span></span></div><span style="font-family: "Trebuchet MS",sans-serif; font-size: small;"> Brian Beamish FCSI<br />
749. the_rational_investor@yahoo.com<br />
750. <a href="http://www.therationalinvestor.ca/">http://www.therationalinvestor.ca</a></span><span style="font-family: Trebuchet MS,Arial,Helvetica;"><br />
751. &lt;/span&gt;</description><link>http://wtcsspotlight.blogspot.com/2011/11/cts-spotlight-for-week-of-nov-04th-2011.html</link><author>noreply@blogger.com (The Cdn. Rational Investor)</author><media:thumbnail xmlns:media="http://search.yahoo.com/mrss/" url="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEik2vLf4LQBsPd88TP7IxU_-l-EW37OkQp2PifKNlp9uiFUWMh6UhAgVDqtjBVRiEznRU2MJ-857Qi2Sjmxh0uyJLgZHlB1r-Gg97SUx1NoYBAItnl-MNr_HH9TftYWFutvVBkVMPOdqqM/s72-c/LCW110411.GIF" height="72" width="72"/><thr:total>0</thr:total></item><item><guid isPermaLink="false">tag:blogger.com,1999:blog-6557910854406592777.post-6057259963500756003</guid><pubDate>Sun, 30 Oct 2011 15:45:00 +0000</pubDate><atom:updated>2011-10-30T08:56:40.584-07:00</atom:updated><title>CTS Spotlight for the week of Oct. 28th, 2011: Canadian Dollar</title><description>&lt;div style=&quot;font-family: &amp;quot;Trebuchet MS&amp;quot;,sans-serif;&quot;&gt;&lt;span style=&quot;font-size: small;&quot;&gt;10/28/11: As the US  dollar continues its pullback from the recent panic-highs few new trends  have been establish amongst it&#39;s major trading pairs. Of note this  week, the Jap. Yen continues the relentless charge towards its bull flag  target and both commodity currencies suggest more rather than less  volatility ought to be expected in the coming weeks/months ahead. As the  world pulls back from the proverbial brink, downward price pressure has  eased momentarily across the board and especially so in equities. This  new money has to be coming from somewhere and it looks like the longer  end of the yield curve is where it is coming from. While the bottom  continues to hold in the US Dollar index, one might consider this entire  market move to be nothing more than relieving a short-term oversold  condition.&lt;/span&gt;&lt;/div&gt;&lt;div style=&quot;font-family: &amp;quot;Trebuchet MS&amp;quot;,sans-serif;&quot;&gt;&lt;br /&gt;
752. </div><div class="separator" style="clear: both; font-family: "Trebuchet MS",sans-serif; text-align: left;"><span style="font-size: small;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjvY2oWGfl2_TOMCxbqIlFOoOGQ28PdHzu_6v7qfkUVubPgQw8kDRp1sALihmvhyphenhyphenmyiLCcWB_zRurEO0Ck2OVjU40zxPLpsh6Pkb1Z7bL6_FKKiEE0K8e1tbxe1IFSGXGRFvmGhluPK_8c/s1600/CDollar102811.bmp" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" height="257" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjvY2oWGfl2_TOMCxbqIlFOoOGQ28PdHzu_6v7qfkUVubPgQw8kDRp1sALihmvhyphenhyphenmyiLCcWB_zRurEO0Ck2OVjU40zxPLpsh6Pkb1Z7bL6_FKKiEE0K8e1tbxe1IFSGXGRFvmGhluPK_8c/s320/CDollar102811.bmp" width="320" /></a></span></div><div style="font-family: "Trebuchet MS",sans-serif;"><br />
753. </div><div style="font-family: "Trebuchet MS",sans-serif;"><span style="font-size: small;">Since the Canadian dollar is such a good proxy for the commodities markets in general, I thought we would take this week to look at what the 'Loonie' is doing and where one ought to expect this one particular currency to go over the coming weeks/months ahead. Just as important, one ought to appreciate the message the Canadian dollar is sending the market as a commodity proxy. </span><br />
754. <br />
755. </div><div style="font-family: "Trebuchet MS",sans-serif;"><span style="font-size: small;"> </span></div><div style="font-family: "Trebuchet MS",sans-serif;"><span style="font-size: small;">The first thing that jumps out at me when I look at this chart is: wow, what a drop!. And now, what a rebound! If one had respected the 50% rule through last year's rally, one ought not to be too surprised that prices needed to cool down. Indeed, this currency appreciated more than 14.5% in a little more than 1 year. That kind of move certainly wasn't sustainable, and indeed, prices did begin to correct into the typical seasonal peak of late spring 2011. One can never know exactly where a bottom will come in on a correction and here is a case where the markets dramatically over shot the downside target. Indeed, we went all the way back to the original double bottom lows (92.40) to find buying support through the panic sell-off of late Sept./early Oct. In just as violent a move, we bounced of those panic lows and now sit just a bit above the original downside target - the 50% rule of 99.155.</span></div><div style="font-family: "Trebuchet MS",sans-serif;"><span style="font-size: small;"><br />
756. </span></div><div style="font-family: "Trebuchet MS",sans-serif;"><span style="font-size: small;">If one had done the short trade coming out of the seasonal peak, one ought to have taken profits. The fact that the market overshot the correction target by more than 5 cents should be nothing more than extra gravy for your already handsome winnings. If one hasn't taken profits one really ought to ask themselves what the risks are going forward. Ironically enough, when looking at the chart from today's perspective, one gets the feeling that the risks are almost exactly 50/50. </span></div><div style="font-family: "Trebuchet MS",sans-serif;"><span style="font-size: small;"><br />
757. </span></div><div style="font-family: "Trebuchet MS",sans-serif;"><span style="font-size: small;">I find it interesting that the more I study charts, the more I see the market from a symmetrical perspective. There seems to be a poetry to price action and here again is another good example. Notice how the 50% level almost seems to be a pivot. We seem to have swung violently above and then below but ultimately end up back at the 50% rule. Notice too the sizable gaps left at the extremes (just under 1.05 and just above .96). This suggests to me we may take quite some time bouncing in between these two points. Considering how close we are to the 50% level, one might argue that there is almost an exactly equal amount of risk vs. reward with going long or short from where we are now.</span></div><div style="font-family: "Trebuchet MS",sans-serif;"><span style="font-size: small;"><br />
758. </span></div><div style="font-family: "Trebuchet MS",sans-serif;"><span style="font-size: small;">So in summary then, as with many other commodity markets and commodity related currencies, there was a fabulous short trade that developed through the seasonal peak of 2011. That seasonal trade is behind us now and it appears that also like many other markets, the Canadian dollar is now quite comfortably into a 'clean-up' phase. Given the violent price action seen over the past few months and the fact that at both extremes gaps were left on the chart, one can realistically expect a 5% swing in either direction from current levels. This is historically a very high rate of volatility and should be respected. Fortunes can be made and lost in times like these so prudence is key in any market call. I don't see an easy trade here so what is the point in taking the risk....</span></div><div style="font-family: "Trebuchet MS",sans-serif;"><br />
759. </div><div style="font-family: "Trebuchet MS",sans-serif;"><span style="font-size: small;"> </span></div><div class="separator" style="clear: both; font-family: "Trebuchet MS",sans-serif; text-align: left;"><span style="font-size: small;">That's all for this issue of the CTS Spotlight,</span></div><span style="font-family: "Trebuchet MS",sans-serif; font-size: small;"> Brian Beamish FCSI<br />
760. the_rational_investor@yahoo.com<br />
761. <a href="http://www.therationalinvestor.ca/">http://www.the<span style="font-family: Trebuchet MS,Arial,Helvetica;">rationalinvestor.ca</span></a></span><span style="font-family: Trebuchet MS,Arial,Helvetica;"><br />
762. </span><br />
763. <span style="font-family: Trebuchet MS,Arial,Helvetica;"><br />
764. &lt;/span&gt;</description><link>http://wtcsspotlight.blogspot.com/2011/10/cts-spotlight-for-week-of-oct-7th-2011_30.html</link><author>noreply@blogger.com (The Cdn. Rational Investor)</author><media:thumbnail xmlns:media="http://search.yahoo.com/mrss/" url="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjvY2oWGfl2_TOMCxbqIlFOoOGQ28PdHzu_6v7qfkUVubPgQw8kDRp1sALihmvhyphenhyphenmyiLCcWB_zRurEO0Ck2OVjU40zxPLpsh6Pkb1Z7bL6_FKKiEE0K8e1tbxe1IFSGXGRFvmGhluPK_8c/s72-c/CDollar102811.bmp" height="72" width="72"/><thr:total>0</thr:total></item><item><guid isPermaLink="false">tag:blogger.com,1999:blog-6557910854406592777.post-7334165708092724704</guid><pubDate>Sun, 09 Oct 2011 17:09:00 +0000</pubDate><atom:updated>2011-10-09T10:09:29.434-07:00</atom:updated><title>CTS Spotlight for the week of Oct. 7th, 2011</title><description>&lt;div style=&quot;font-family: &amp;quot;Trebuchet MS&amp;quot;,sans-serif;&quot;&gt;&lt;span style=&quot;font-size: small;&quot;&gt;Hello and welcome back to CRI&#39;s CTS Spotlight,&lt;/span&gt;&lt;/div&gt;&lt;div style=&quot;font-family: &amp;quot;Trebuchet MS&amp;quot;,sans-serif;&quot;&gt;&lt;br /&gt;
765. </div><div style="font-family: "Trebuchet MS",sans-serif;"><span style="font-size: small;">10/07/11: As we  approach the US Dollar's upside target many of its trading pairs are  starting to look washed out. No new up trends have been established over  the past few weeks suggesting the malaise that has blanked the broader  commodities market shall continue for at least a little while longer. Of  particular note this week, Corn and Oats have finally joined the rest  of the grain markets in a general correction that looks to be long  overdue.</span></div><div style="font-family: "Trebuchet MS",sans-serif;"><br />
766. </div><div class="separator" style="clear: both; font-family: "Trebuchet MS",sans-serif; text-align: left;"><span style="font-size: small;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgT0ATYk6c4uHEJthe2Z0q9aYV1D5BrUyWEYU0ZJtrKz8zY32NbvVFwHkAwMuRXtKNTMr3UmVxBF0elc0HUusgeF6Nw32JqbZn5s6VTeMe1OpZkqoOKywxwJibqFyR4iWn7d_LXZnllWYk/s1600/CTS100711Corn.bmp" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" height="244" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgT0ATYk6c4uHEJthe2Z0q9aYV1D5BrUyWEYU0ZJtrKz8zY32NbvVFwHkAwMuRXtKNTMr3UmVxBF0elc0HUusgeF6Nw32JqbZn5s6VTeMe1OpZkqoOKywxwJibqFyR4iWn7d_LXZnllWYk/s320/CTS100711Corn.bmp" width="320" /></a></span></div><div style="font-family: "Trebuchet MS",sans-serif;"><span style="font-size: small;">One by one, the bull markets in the commodities are reversing. Here then is the latest commodity to break bearishly - Corn. Considering Corn was less than $1.50/bushel when I started to learn how to trade commodities back in the early 1990s, one could easily say that this market has come along way. What were once astronomical prices are now considered normal - can this kind of food/staple inflation continue? Or do we put in a top and spend the next twenty years working our way back down. Only time will tell, but one does have to respect the fact that this is historically a very expensive market. </span></div><div style="font-family: "Trebuchet MS",sans-serif;"><span style="font-size: small;"><br />
767. </span></div><div style="font-family: "Trebuchet MS",sans-serif;"><span style="font-size: small;">The fundamental argument for higher corn prices has always been about growing world demand. As our population grows, so too does the demand for raw food commodities like Corn. Couple this with the addition of government subsidized competition from the Ethanol industry and one can see how prices have tripled since the turn of the century. From the supply side, we have been fortunate for the fact that yields have also grown at a remarkable rate too. While 100 bushels per acre was normal before the turn of the century, today we produce well above 135. So given these underlying fundamentals can one justify prices more than doubling in the last year? And furthermore, can one justify prices continuing to grow from there? Unfortunately, I don't believe so. Yes, price pressure will remain strong as we work our way through this 17.5 year commodity cycle. But yearly gains like we have just seen certainly can't be sustainable. It all comes back to the old saying, '<i>nothing cures high prices - like high prices</i>'.</span></div><div style="font-family: "Trebuchet MS",sans-serif;"><br />
768. </div><div style="font-family: "Trebuchet MS",sans-serif;"><span style="font-size: small;">Ironically enough, I don't think the run-up or this subsequent run-down in price has much to do with corn fundamentals at all. I believe that the market moved higher through QE2 (the reflation of the world economy through 2009-2010) and is now going through the hangover of the Fed. taking the proverbial punch bowl away from the party. Considering how broad based the fall in prices has been, it is hard to point to one specific piece of news that is deflating commodity prices. People are running out of all risk assets and into the US dollar. And if that we not enough, commodity prices we follow are traded in US Dollars which means that at the end of the day prices have to be lower (if the underlying currency is stronger) just to stay the same. </span></div><div style="font-family: "Trebuchet MS",sans-serif;"><span style="font-size: small;"><br />
769. </span></div><div style="font-family: "Trebuchet MS",sans-serif;"><span style="font-size: small;">So corn, like so many other commodities, has entered its correction phase after a serious run up in price. With the break of the early July low 0f 616, the market has established a very well define double top price pattern. Additionally, this same break confirmed a head and shoulders top too. This is a massive topping patten where stops on short positions should sit just above resistance near 765. It is so much risk that I doubt many would actually do the trade. If we got a rally up into that resistance area and failed I might take a serious look at a Put option but for now I am flat and watching. For those that are short (or can get short) the gap at 563.5 and a one year 50% retracement of 561.75 shall represent short term targets. The 'support zone' highlighted on the chart should see some demand come in but If the global economic situation doesn't improve into the end of the year, one could see a realistic test of the head and shoulders target of 433 into the early 2012 export driven market.</span></div><div style="font-family: "Trebuchet MS",sans-serif;"><span style="font-size: small;"><br />
770. </span></div><div class="separator" style="clear: both; font-family: "Trebuchet MS",sans-serif; text-align: left;"><span style="font-size: small;">That's all for this issue of the CTS Spotlight,</span></div><span style="font-size: small;"><span style="font-family: "Trebuchet MS",sans-serif;"> Brian Beamish FCSI<br />
771. the_rational_investor@yahoo.com<br />
772. http://www.the-rational-investor.com&lt;/span&gt;&lt;/span&gt;</description><link>http://wtcsspotlight.blogspot.com/2011/10/cts-spotlight-for-week-of-oct-7th-2011.html</link><author>noreply@blogger.com (The Cdn. Rational Investor)</author><media:thumbnail xmlns:media="http://search.yahoo.com/mrss/" url="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgT0ATYk6c4uHEJthe2Z0q9aYV1D5BrUyWEYU0ZJtrKz8zY32NbvVFwHkAwMuRXtKNTMr3UmVxBF0elc0HUusgeF6Nw32JqbZn5s6VTeMe1OpZkqoOKywxwJibqFyR4iWn7d_LXZnllWYk/s72-c/CTS100711Corn.bmp" height="72" width="72"/><thr:total>0</thr:total></item><item><guid isPermaLink="false">tag:blogger.com,1999:blog-6557910854406592777.post-8480192565653842942</guid><pubDate>Mon, 26 Sep 2011 06:09:00 +0000</pubDate><atom:updated>2011-09-25T23:10:09.158-07:00</atom:updated><title>CTS Spotlight for the week of Sept. 23rd,, 2011</title><description>&lt;div style=&quot;font-family: &amp;quot;Trebuchet MS&amp;quot;,sans-serif;&quot;&gt;&lt;span style=&quot;font-size: small;&quot;&gt;Hello and welcome back to CRI&#39;s CTS Spotlight,&lt;/span&gt;&lt;/div&gt;&lt;div style=&quot;font-family: &amp;quot;Trebuchet MS&amp;quot;,sans-serif;&quot;&gt;&lt;br /&gt;
773. </div><div style="font-family: "Trebuchet MS",sans-serif;"><span style="font-family: "Trebuchet MS",sans-serif; font-size: small;">092311: As the US  dollar index continues to rally, one by one the commodity markets are  being pulled back down to earth. From energy, to foods/fibers to metals,  the US dollar denominated proxies are all correcting to reflect the  currency change. This week's WCTS spotlight blog looks a Silver in  particular. The only market that seems to be insulated from the  correction are the meats and given the grain market's weakness - that  may continue for some time to come.</span></div><div style="font-family: "Trebuchet MS",sans-serif;"><br />
774. </div><div class="separator" style="clear: both; font-family: "Trebuchet MS",sans-serif; text-align: left;"><span style="font-size: small;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEi51VG_Eb_803pjhnG_AYcGfbCaYjJ6c7tKg_Ug6VQY8wU00uwuPn1LeGemEU8vmLesz232fbb5WMdkvDkGMFbL-rL1FKM6MqApOWtjQdRFo6_DmSCcAmfBVRcQ9SDTNawoKL-OF0rLc0M/s1600/CTS092311Silver.bmp" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" height="244" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEi51VG_Eb_803pjhnG_AYcGfbCaYjJ6c7tKg_Ug6VQY8wU00uwuPn1LeGemEU8vmLesz232fbb5WMdkvDkGMFbL-rL1FKM6MqApOWtjQdRFo6_DmSCcAmfBVRcQ9SDTNawoKL-OF0rLc0M/s320/CTS092311Silver.bmp" width="320" /> </a></span></div><div class="separator" style="clear: both; font-family: "Trebuchet MS",sans-serif; text-align: left;"><br />
775. </div><div class="separator" style="clear: both; font-family: "Trebuchet MS",sans-serif; text-align: left;"><span style="font-size: small;">Here then is the weekly continuous Silver futures price chart for the past few years. From the 2010 lows, this commodity tripled as the bull market 'went-parabolic'. The market eventually ran out of steam just under the historic $50/oz peak (from the last commodity cycle peaks in 1980). While there continues to be a 'fundamental' reason to own precious metals through this 17.5 year fear cycle (of which we currently are about 11 years in) one has to constantly put market moves (like we have seen over the past couple years) into perspective. Can a market keep doubling in price over and over again? Not likely. Unfortunately, the public (by definition always buy at the top and sell at the bottom) gets too enthusiastic and can't appreciate the simple fact that markets (even bull markets) can't always go up. Indeed, I might argue that the recent bullish sentiment within the metals space has gotten so overbought, a correction was long overdue. That correction is happening now. The markets are going down -  not up. A trend that may only reverse once the public starts to hate the sector again. How much pain does that take? only time will tell...</span></div><div class="separator" style="clear: both; font-family: "Trebuchet MS",sans-serif; text-align: left;"><span style="font-size: small;"><br />
776. </span></div><div class="separator" style="clear: both; font-family: "Trebuchet MS",sans-serif; text-align: left;"><span style="font-size: small;">Technically speaking, the weekly/monthly bull run in Silver has ended. Friday's 15% intra-day drop was not only a headline catcher but also represented a significant breakdown on the price chart. Specifically, with the move through 33.488, we now have a classic 'M' or double-top price pattern working/in-place. This zone will represent resistance going forward as those that bought in the past will look to get out get-out at break even. Additionaly, the trading range is so large, short term headline catching rallies may represent nothing more than a move into resistance. Specifically, one should be short from 33.488 with stops just above 43.82. While very few have that kind of risk tolerance (at $5.00/point $.10 represents $50,000/contract) </span><span style="font-size: small;">it is important to appreciate that this market is no longer trending higher and is in-fact, trending lower.</span><span style="font-size: small;"> </span></div><div class="separator" style="clear: both; font-family: "Trebuchet MS",sans-serif; text-align: left;"><br />
777. </div><div class="separator" style="clear: both; font-family: "Trebuchet MS",sans-serif; text-align: left;"><span style="font-size: small;">So where do we go from here? one could argue the short term oversold condition suggests some kind of counter-trend rally is highly likely to occur.  Please refer to <a href="http://crisdaytrading.blogspot.com/">Cri's day-trading blog</a> for more on this. The 50% level (31.70) ought to represent an oscillation level in the near term given it's magnetic effects. But because of extreme market volatility a 5-10% swing in either direction (from where we are right now) isn't out of the question either.</span></div><div class="separator" style="clear: both; font-family: "Trebuchet MS",sans-serif; text-align: left;"><br />
778. </div><div class="separator" style="clear: both; font-family: "Trebuchet MS",sans-serif; text-align: left;"><span style="font-size: small;">New investors are best advised just to leave this one (and really all the commodity markets in general) alone until the US Dollar Index tops out. A bullish US Dollar Index suggests that fear is once again dominating the investing landscape and one really shouldn't 'play' in the market during times like these. This condition may persist for weeks, months or even quarters, but being bullish in commodities right now is literally swimming against the current.</span></div><div class="separator" style="clear: both; font-family: "Trebuchet MS",sans-serif; text-align: left;"><br />
779. </div><div class="separator" style="clear: both; font-family: "Trebuchet MS",sans-serif; text-align: left;"><span style="font-size: small;">That's all for this issue of the CTS Spotlight,</span></div><span style="font-family: "Trebuchet MS",sans-serif; font-size: small;"> Brian Beamish FCSI<br />
780. the_rational_investor@yahoo.com<br />
781. http://www.the-rational-investor.com&lt;/span&gt;</description><link>http://wtcsspotlight.blogspot.com/2011/09/cts-spotlight-for-week-of-sept-2nd-2011_25.html</link><author>noreply@blogger.com (The Cdn. Rational Investor)</author><media:thumbnail xmlns:media="http://search.yahoo.com/mrss/" url="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEi51VG_Eb_803pjhnG_AYcGfbCaYjJ6c7tKg_Ug6VQY8wU00uwuPn1LeGemEU8vmLesz232fbb5WMdkvDkGMFbL-rL1FKM6MqApOWtjQdRFo6_DmSCcAmfBVRcQ9SDTNawoKL-OF0rLc0M/s72-c/CTS092311Silver.bmp" height="72" width="72"/><thr:total>0</thr:total></item><item><guid isPermaLink="false">tag:blogger.com,1999:blog-6557910854406592777.post-4700648114767405378</guid><pubDate>Sun, 04 Sep 2011 18:13:00 +0000</pubDate><atom:updated>2011-09-04T11:21:59.009-07:00</atom:updated><title>CTS Spotlight for the week of Sept. 2nd, 2011</title><description>&lt;div style=&quot;font-family: &amp;quot;Trebuchet MS&amp;quot;,sans-serif;&quot;&gt;&lt;span style=&quot;font-size: small;&quot;&gt;Hello and welcome back to CRI&#39;s CTS Spotlight,&lt;/span&gt;&lt;/div&gt;&lt;div style=&quot;font-family: &amp;quot;Trebuchet MS&amp;quot;,sans-serif;&quot;&gt;&lt;br /&gt;
782. </div><div style="font-family: "Trebuchet MS",sans-serif;"><span style="font-size: small;">09/02/11:The US  dollar index has held the important low of 73.51 but keep watching that  level as dollar bulls aren't quite out of the woods just yet. The Labor  Day weekend is finally upon us and with it hopefully too comes the end  of the low volume, high volatility sessions we have experienced through  the summer of 2011. While no new trends have been established in  commodity land this week, several older trends (gold, Swiss franc,  bonds) are re-exerting themselves. Is this their final push higher - too  early to tell but I for one shall be watching for reversals in the  coming weeks. This week's CTS Spotlight blog shall take a good look at  the US 10 year Treasury Note to see if we can make some sense of the  monster rally of late.</span></div><div style="font-family: "Trebuchet MS",sans-serif;"><br />
783. </div><div class="separator" style="clear: both; text-align: left;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhoLV-dPscfKLjEAxORZq3Vw3ujI3W7mu9TuDlx4Qv-bZItWMaX6BLIat89ZIiOJgGNCY-pLQODmjzRsoVCOcq13lZrXmN6wt2kZO83pXBM4TcjGodm_OqAgpDa_bsu57drmL9o4PSLKp8/s1600/CTSSpotlightUSBonds090211a.bmp" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" height="320" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhoLV-dPscfKLjEAxORZq3Vw3ujI3W7mu9TuDlx4Qv-bZItWMaX6BLIat89ZIiOJgGNCY-pLQODmjzRsoVCOcq13lZrXmN6wt2kZO83pXBM4TcjGodm_OqAgpDa_bsu57drmL9o4PSLKp8/s320/CTSSpotlightUSBonds090211a.bmp" width="212" /></a></div><div class="separator" style="clear: both; font-family: "Trebuchet MS",sans-serif; text-align: left;"><span style="font-size: small;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhxob9ySplVSM0v9Iy42dpH4mrUfzL8ys_mzmkZbDitb4TzYBiepJMW0z4I-91Uetv7yLGWtzrDppwThxOpFt1o1hDQi3KrjmFZo3_jBD1S3ntl9iJShfW3H58GaYQvnTTtPDK4lOi7TpE/s1600/CTSSpotlightUSBonds090211.bmp" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><br />
784. </a></span></div><div style="font-family: "Trebuchet MS",sans-serif;"><span style="font-size: small;">There is so much talk about the bond market of late (European sovereign debt, downgrade of US Treasuries by S&P etc) I thought it only prudent to take a good look at the US Treasury market to understand just what exactly is going on.</span><span style="font-size: small;"> </span></div><div style="font-family: "Trebuchet MS",sans-serif;"><br />
785. </div><div style="font-family: "Trebuchet MS",sans-serif;"><span style="font-size: small;">Aside from the  political rhetoric and its associated manipulation by the media, US  Treasuries are in a resounding bull market. No ifs ands or butts. Politicians would have one believe bonds are in trouble - quite to the contrary, bonds are doing quite well and look to add to those gains in the coming weeks/months ahead. Interest rates are going down, not up. Deflation should be the primary concern - not inflation. And most importantly, the market wants more bonds not less. If President Obama understood this, his economic team would use that market strength to implement a massive public works project. The US Federal Reserve has given a huge endorsement of such a program when it recently suggested that monetary policy should take a back seat to fiscal policy when thinking of ways to get out of the current economic slowdown. Tragically, politicians are very rarely good economists...</span></div><div style="font-family: "Trebuchet MS",sans-serif;"><br />
786. </div><div style="font-family: "Trebuchet MS",sans-serif;"><span style="font-size: small;">Lets take a look at the charts. Just above are the Weekly & Monthly Continuous Futures Charts for US 10 year Treasuries. As any market technician will tell you, 'a chart moving from the lower left to the upper right is a bullish chart' and that is exactly what we have here. Currently we are well contained within a massive monthly upwardly pointing channel</span><span style="font-size: small;"> </span><span style="font-size: small;">where </span><span style="font-size: small;"> </span><span style="font-size: small;">both </span><span style="font-size: small;">long term support and resistance are far away from current prices. In fact, bonds bottomed more than five years ago and are just now entering their fourth year of trending higher. The recent breakout through 127.94 confirms this thesis and is yet another sign of strength. Indeed, this bull flag formation suggested price wanted to reach for 131 in the near term [(127.94-114.89)+117.94 = 130.99] and they have done exactly that. Traders & investors who bought the spring '11 bottom (122.47) are enjoying immense profits (up almost 9 points or $9,000 per contract) and would be well advised to let some of that position go upon hitting the bull flag target. Consider too that this huge rally has come in a very short period of time and one gets the feeling this market needs some time to either consolidate sideways or make an outright correction. A 50% retracement of the move higher would bring prices back into the 125 range [(117.94+131.29)/2 = 125.61] but the breakout to even newer highs over the past week suggests there is no top in place yet and prices may move even higher still in the coming weeks/months.</span></div><div style="font-family: "Trebuchet MS",sans-serif;"><br />
787. </div><div style="font-family: "Trebuchet MS",sans-serif;"><span style="font-size: small;">In Summary then, Interest rates have fallen considerably over the past few years as US economic growth has literally ground to a halt. Couple North America's demographic problems with China's need to curb its own inflation worries and Europe's complete lack of leadership amid the Euro's first real economic challenge and we have the makings for a deflationary spiral very similar to Japan's spiral of the 1990's. While politicians and their media counterparts spin a tale of inflation, deflation should be the primary concern going forward. Interestingly, history is giving the US government a window to expand its debt and grow its way out of the problem - will someone have the political courage to lead it through it? the 1990's was called 'the lost decade' in Japan - only time will tell if we shall have to 'lose' a decade too.</span></div><div style="font-family: "Trebuchet MS",sans-serif;"><br />
788. </div><div class="separator" style="clear: both; font-family: "Trebuchet MS",sans-serif; text-align: left;"><span style="font-size: small;">That's all for this issue of the CTS Spotlight,</span></div><span style="font-family: "Trebuchet MS",sans-serif; font-size: small;"> Brian Beamish FCSI<br />
789. the_rational_investor@yahoo.com<br />
790. http://www.the-rational-investor.com</span><br />
791. <div style="font-family: "Trebuchet MS",sans-serif;"><span style="font-size: small;"><br />
792. </span></div><span style="font-family: Trebuchet MS,Arial,Helvetica;"><br />
793. &lt;/span&gt;</description><link>http://wtcsspotlight.blogspot.com/2011/09/cts-spotlight-for-week-of-sept-2nd-2011.html</link><author>noreply@blogger.com (The Cdn. Rational Investor)</author><media:thumbnail xmlns:media="http://search.yahoo.com/mrss/" url="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhoLV-dPscfKLjEAxORZq3Vw3ujI3W7mu9TuDlx4Qv-bZItWMaX6BLIat89ZIiOJgGNCY-pLQODmjzRsoVCOcq13lZrXmN6wt2kZO83pXBM4TcjGodm_OqAgpDa_bsu57drmL9o4PSLKp8/s72-c/CTSSpotlightUSBonds090211a.bmp" height="72" width="72"/><thr:total>0</thr:total></item><item><guid isPermaLink="false">tag:blogger.com,1999:blog-6557910854406592777.post-2298680227052179843</guid><pubDate>Sun, 21 Aug 2011 17:34:00 +0000</pubDate><atom:updated>2011-08-21T10:34:46.454-07:00</atom:updated><title>CTS Spotlight for the week of August 19th, 2011</title><description>&lt;div style=&quot;font-family: &amp;quot;Trebuchet MS&amp;quot;,sans-serif;&quot;&gt;&lt;span style=&quot;font-size: small;&quot;&gt;&lt;span&gt;Hello and welcome back to CRI&#39;s CTS Spotlight,&lt;/span&gt;&lt;/span&gt;&lt;/div&gt;&lt;div style=&quot;font-family: &amp;quot;Trebuchet MS&amp;quot;,sans-serif;&quot;&gt;&lt;br /&gt;
794. </div><div style="font-family: "Trebuchet MS",sans-serif;"><span style="font-size: small;">08/19/11:The  tentative bottom in the US Dollar index is coming under pressure. The  index matched its June support low of 73.51 only to briefly bounce off  it. Economic news coming out of North America is poor at best so a  general flight out of that region appears to be happening (as the Cdn.  dollar has come under pressure too). The yield curve itself has narrowed  dramatically suggesting the odds of a pending 'double dip' recession  are growing by the day. As an ultimate leading indicator, equity price  action also too points to a contraction in the economy rather than  expansion. Lastly, and our focus for this weeks Commodity Trend  Spotlight Blog, Copper prices have a well defined top working as well  which suggests a weakening economic backdrop.</span></div><div style="font-family: "Trebuchet MS",sans-serif;"><br />
795. </div><div class="separator" style="clear: both; font-family: "Trebuchet MS",sans-serif; text-align: left;"><span style="font-size: small;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhAgU_zsuLlxjQ1j1-EUe3Lqvj0n2zkXxgwTcR_fQhj_Ya28yPHbGWTxBSzAMP62VW9yMkY2iarnXM4ctVo9hLLklQGJXFWN-C-UnOQ41EQUamC2OfLLO3B9ANcLvz5NfJ9ez9qC6KiWfU/s1600/CTSSpotlightCopper081911.bmp" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" height="240" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhAgU_zsuLlxjQ1j1-EUe3Lqvj0n2zkXxgwTcR_fQhj_Ya28yPHbGWTxBSzAMP62VW9yMkY2iarnXM4ctVo9hLLklQGJXFWN-C-UnOQ41EQUamC2OfLLO3B9ANcLvz5NfJ9ez9qC6KiWfU/s320/CTSSpotlightCopper081911.bmp" width="320" /></a></span></div><div style="font-family: "Trebuchet MS",sans-serif;"><span style="font-size: small;"> </span><span style="font-size: small;"><span> </span></span></div><div style="font-family: "Trebuchet MS",sans-serif;"><span style="font-size: small;"><span>As the above commentary suggests, there are growing signs of a potential recession here in North America. From economic data (the New York and Philly Fed numbers for example) to chart analysis (breakdowns in equity prices) to a flattening yield curve, there is plenty to suggest the expansion from the 2009 lows has indeed come to an end. Couple this economic backdrop with the political rhetoric of late (all about austerity rather than stimulus) and we have the makings for a very serious situation. Governments must step up and take the place of the consumer in times like these, yet it appears the exact opposite is happening. This horrible economic combination was one of the hallmarks of the great depression, are we about to make the very same mistake again?</span></span></div><div style="font-family: "Trebuchet MS",sans-serif;"><span style="font-size: small;"><span><br />
796. </span></span></div><div style="font-family: "Trebuchet MS",sans-serif;"><span style="font-family: "Trebuchet MS",sans-serif; font-size: small;"><span>This weeks CTS Spotlight focus's on Copper. Historically, Copper prices follow the broader economy very closely (hence the nickname, 'Professor of Economics'). Since copper goes into everything from housing to automobiles, a higher </span><span>trending </span></span><span style="font-size: small;"><span><span style="font-family: "Trebuchet MS",sans-serif;">copper market usually implies strong demand and therefor it implies a strong economy. Conversely, a lower trending copper market implies weak demand and therefore a weak economy. The price chart above is of Copper and you will notice that it had been trending higher through 2009 and 2010 but has rolled over through 2011. Copper prices are indeed correcting and as of last week have confirmed the lower trending market by making a 'lower low'. Having said that, we all know nothing moves in a straight line and there is plenty of evidence to suggest copper prices are going to be extremely volatile over the coming weeks/months.</span></span></span></div><div style="font-family: "Trebuchet MS",sans-serif;"><br />
797. </div><div style="font-family: "Trebuchet MS",sans-serif;"><span style="font-size: small;"><span><span style="font-family: "Trebuchet MS",sans-serif;">So what's the trend? The break of the May, 2011 lows (two weeks ago) suggests we are now comfortably within a downward pointing price channel. The top of the channel currently sits near the $4.40 area and the bottom of the channel is near $3.80. One can make a case for prices to move about 10% higher or lower from where we currently are but until the market can put in a double bottom price pattern, this market is still trending lower.</span></span></span></div><div style="font-family: "Trebuchet MS",sans-serif;"><br />
798. </div><div style="font-family: "Trebuchet MS",sans-serif;"><span style="font-size: small;"><span><span style="font-family: "Trebuchet MS",sans-serif;">So  for an idea of where prices could/ought to move in the coming trading  sessions lets take a look at the chart for guidance. </span></span></span></div><div style="font-family: "Trebuchet MS",sans-serif;"><span style="font-size: small;"><span><span style="font-family: "Trebuchet MS",sans-serif;">Upside objective: The fact that the market left a gap just above $4.40 suggests that there ought to be a rally of some sort to fill the gap in. Exactly when, no-one knows but the gap is there and we must respect it. </span></span></span></div><div style="font-family: "Trebuchet MS",sans-serif;"><span style="font-size: small;"><span><span style="font-family: "Trebuchet MS",sans-serif;">Downside objective: The '50% rule' suggests prices want to move down into the $3.691 area. $3.58 & $3.70 represent significant trading highs and lows from 2010 and at this point ought to be tested. The speed/resistance line currently sits just under $3.80. </span></span></span></div><div style="font-family: "Trebuchet MS",sans-serif;"><br />
799. </div><div style="font-family: "Trebuchet MS",sans-serif;"><span style="font-size: small;"><span><span style="font-family: "Trebuchet MS",sans-serif;">So in summary then, as a general proxy for our North American economy, copper prices suggest we are contracting rather than expanding. The market has a well established bear price channel in place where resistance is about 10% higher than current market prices and support is about 10% lower. I personally don't think the risk reward ratio is attractive enough to take a position either way but one must respect what the market is telling us. The questions is - are you listening?</span></span></span></div><div style="font-family: "Trebuchet MS",sans-serif;"><span style="font-size: small;"><span><span style="font-family: "Trebuchet MS",sans-serif;"> </span></span></span></div><div class="separator" style="clear: both; font-family: "Trebuchet MS",sans-serif; text-align: left;"><span style="font-size: small;"><span>That's all for this issue of the CTS Spotlight,</span></span></div><span style="font-family: "Trebuchet MS",sans-serif; font-size: small;"> Brian Beamish FCSI<br />
800. the_rational_investor@yahoo.com<br />
801. http://www.the-rational-investor.com &lt;/span&gt;</description><link>http://wtcsspotlight.blogspot.com/2011/08/cts-spotlight-for-week-of-august-19th.html</link><author>noreply@blogger.com (The Cdn. Rational Investor)</author><media:thumbnail xmlns:media="http://search.yahoo.com/mrss/" url="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhAgU_zsuLlxjQ1j1-EUe3Lqvj0n2zkXxgwTcR_fQhj_Ya28yPHbGWTxBSzAMP62VW9yMkY2iarnXM4ctVo9hLLklQGJXFWN-C-UnOQ41EQUamC2OfLLO3B9ANcLvz5NfJ9ez9qC6KiWfU/s72-c/CTSSpotlightCopper081911.bmp" height="72" width="72"/><thr:total>0</thr:total></item></channel></rss>

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