Tuesday, June 30, 2009

Zenn Electric Car, Supercapacitors in Action (Videos)

We have commented on a couple of occasions about Zenn Motor Company. This Canadian company is attracting great attention because of their use of supercapacitors to power their new electric cars.

My son, who just turned 10, did an experiment of capacitors vs supercapacitors. He charged both a capacitor and a supercapacitor and used them to power a little motor coupled to a plastic rotor. The results are astounding. Please see the videos below.

Initially, both capacitors are charged for about 5 seconds by the power source (a battery), then the power source is removed. Now the rotor is spinning powered by the energy stored in he capacitor only.



The capacitor was 2,200uF. The supercapacitor, much smaller, as can be seen on the video, was rated 6F!

With the capacitor, the rotors spins for less than 1 second fater the battery is removed. With the supercapacitor, the rotors spins for over 12 seconds.

Zenn trades under the symbol ZNN on the TSXv.

Disclaimer: I have no position on Zenn. I would just like to buy their cars in Canada, which we are not allowed to do.

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World's Largest IPO This Year: Bradesco and BB to Profit USD$1.7B With VisaNet

VisaNet's IPO was the biggest in the world so far this year. It did not happen in New York or London. It happened in Brazil's Bovespa.

Bradesco (BBD on the NYSE) and Banco do Brasil will register a profit of R$3.4B in Q2 2009 (USD $1.7B) due to their sale of the Visanet IPO in the Bovespa (Sao Paulo Stock Exchange).

Bradesco will report R$2B for the sale of 10.5% of the shares, and will still keep 28.7% of VisaNet.

As we reported earlier, Bovespa is now the 4th largest stock exchange in the world in terms of market cap.

BBD chart:

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S&P500 Top 10 Companies to Short for June30

Here is the S&P500 oversold/overbought report for June 30. Today we are back into overbought territory in terms of the number of overbought versus number of oversold companies. We have 44 overbought companies and only 11 oversold. The average RSI7 is 54.43, which is neither oversold nor overbought.

The top 10 overbought companies are (number indicates RSI7):

WPI 83.83
WAT 82.97
BSX 82.05
SJM 81.62
CELG 80.79
DTV 79.75
HSP 79.67
BDX 79.21
SO 79.00

List of overbought companies:

(please click to enlarge)

List of oversold companies:

Here are the RSIs of the ETFs we follow. They are in pretty much in no man's land.

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Monday, June 29, 2009

Federal Express July and August Straddles

Australian Colin Twiggs writes today about Fedex (FDX)

Twiggs says: " FDX failed to follow-through below $50 (after breaking support at $52), rallying strongly to test the upper border of a gently descending trend channel. Twiggs Money Flow (21-Day), however, continues to warn of selling pressure; and breakout below the channel would signal a test of primary support at $34. Upward breakout is now as likely and would indicate a primary advance with a target of $90; calculated as 62 + ( 62 - 34 ). "

With targets of either $34 or $90, this is another opportunity for straddles, where an investor profits with price movements either way.

A July 60 call sell for $0.50
A July 50 put sells for $0.50

Maximum move required for profit: 11.5%

August 60 call sells for $1.55
August 50 put sells for $1.50

Maximum move required for profit: 15.2%

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Interest Rates Will Reverse: Stunning Treasury Yield Curve Chart

Chart From Yahoo:

Rates will not stay this low forever. Rates will go up, that much is a certainty. The exact timing is in the only uncertainty. The question is what is the best way to profit from the future rise in rates. A investor who has years to wait has a definite opportunity here.

Buying options is not a sure bet as there is timing involved. Shorting TLT is an attractive idea. Selling long term options is another one (for those who can write options). TBT is not a good idea for the long term as it is a 2X ETF (we have posted repeatedly here warning against leveraged ETFs).

As usual, it all depends on the investor's timeframe.

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Friday, June 26, 2009

Wheat Prices to Soar: Ug99 Fungus Spreading All Over the World

Ug99 is a destructive fungus that threatens to wipe out 80% of the world's wheat crop. Scientists in Canada and around the world are trying to develop resistant wheat strains resistant to this fungus that has spread from Africa to Iran and is likely to show up soon in India and Pakistan, and from there to the rest of the world.

The stem, black or cereal rusts are caused by the fungus Puccinia graminis.

Destruction of wheat crops threatens to cause widespread famine. It may also cause a very large increase in the prices of staples such as bread and pasta.

The Ug99 fungus, also known as stem rust, is likely to spread worldwide, either through wind-blown spores or carried by people. "It's a time bomb," Jim Peterson, an expert on wheat genetics at Oregon State University in Corvallis, told the Los Angeles Times. "It moves in the air, it can move in clothing on an airplane. We know it's going to be here. It's a matter of how long it's going to take."

"I think it is important people start recognizing what a big threat this is. This could mean world famine. This is quite the deal", said Rob Graf, a research scientist with the Agri-Food Canada's Research Center in Lethbridge, Alberta.

The UN also says Ug99 is a major threat to world food security.

Stem rust is a long time foe of wheat farmers and afflicted wheat's wild ancestors before that. The most recent outbreak in the US was in 1962 when over 5% of the crop was killed.

Resistant strains of wheat apparently overcame the problem. But a new strain appeared in Uganda in 1999 and began spreading from there. Ug99 is a strain of black stem rust. It is virulent to the great majority of wheat varieties. Unlike other rusts, which only partially affect crop yields, UG99 can bring 100% crop loss. Up to 80% yield losses were recently recorded in Kenya.



Wheat trades on the Chicago Board of Trade (CBOT), under symbol W. Current prices:

Where wheat is produced (courtesy wikinvest):

(click to enlarge)

From an investment point of view, a couple of companies and ETFs that I follow that are are directly related to wheat are:


This ETF tracks the price and yield performance of the Deutsche Bank Liquid Commodity Index - Optimum Yield Agriculture Excess Return. The index is a rules-based index composed of futures contracts on some of the most liquid and widely traded agricultural commodities: corn, wheat, soy beans and sugar.

DBA is currently close to oversold, with ab RSI7 is 38.8 and RSI14 is 43.0.


Formerly Saskatchewan Wheat Pool. The Company is organized into five segments: Grain Handling and Marketing, Agri-products, Agri-food Processing, Livestock Feed and Services, and Financial Products. The Grain Handling and Marketing segment is engaged in the collection of grain, shipping to inland or port terminals, cleaning of grain to meet regulatory specifications, and sales to domestic or export markets. The Agri-products segment includes an ownership interest in a fertilizer manufacturer and ownership of a fertilizer distributor. The Agri-food Processing segment includes the manufacture and marketing of products associated with oats and malt barley for domestic and export markets. The Livestock Feed and Services segment formulates and manufactures feed products.

VT.to's RSI7 is 49.1

Companies that will suffer from high wheat prices:

Being a global commodity, wheat is used for many foods, bread and pasta in the West countries and noodles in Asia. If the commodity prices increase, the usual consequence is that food producing companies are faced with a dilemma of lowering margins or passing on cost increases to the consumer. If the latter occurs, demand is destroyed. Bottom line is that company profits will suffer.

Sara Lee (SLE) and Campbell Soup (CPB) are both producers of baked goods, especially bread.

Kellogg (K), General Mills (GIS), Kraft Foods (KFT), PepsiCo's (PEP) Quaker Foods, and Nestle (VTX:NESN) are all major producers of breakfast cereals, most of which are made partly from wheat.

Kraft Foods and PepsiCo's Frito-Lay are the largest multinational snack companies. Many of the products manufactured by these companies, including corn chips, cookies, and crackers, are made primarily of grain products.

More to come.

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Declining Tax Revenues Cause California to Lose Credit Rating

Credit terminated.

Rapidly declining sales tax revenues: if it happens in California, it is likely happenning everywhere.

Facing a $24B budget deficit (at least!) for the new fisal year, Fitch Ratings, lowered the general obligation bond rating of the US' largest bond seller one notch to "A"-minus from "A."

The rating was also immediately placed on negative credit watch. California. State Controller John Chiang said Wednesday the state will start issuing IOUs for all general fund payments except those categories protected by the state constitution, federal law and court decisions.

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S&P500 Most Overbought and Most Oversold Report, June 26

The S&P500 has now shifted somewhat into overbought territory again in terms of the number of companies with RSI7s over 70 and below 30.

Today we have 34 overbought companies:

(please click to enlarge)

We have 16 oversold companies:

RSI7s of some of the ETFs we follow:

Note the low RSI for volatility (VIX) corresponding to the stable range we have had for the last couple of months.

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Thursday, June 25, 2009

Russian Banks in Very Bad Shape: Government to Bailout and Take Board Seats (Nationalize)

The Financial Times reports today:

"Russia is considering a banking bail-out that will go further than measures taken by the US, as fears grow that bad loans could paralyse the economy. "

This is whay I stay away from financials. If you consider financials, I'd try straddles instead. See previous post on XLF.

The Russian proposal, involves government issuing bonds to boost the balance sheets of the banks. The state would get preferred shares. Unlike the US bank bail-out, the Russian scheme would see the government take board seats and get veto rights at the banks it bails out. Very close to nationalization, and the same can be expected in many other countries.

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Natural Gas Report: Overflow in 10.0 to 12.2 Weeks

Natural gas storage inventories were released today. The chart below compares the storage curve last year and this year.

(click to enlarge)

The chart speak for itself. Storage is 31% higher than last year and 22.2% higher than the 5-year average.

At the current rate, North American storage will overflow in 10.0 to 12.2 weeks. As we have stated repeatedly, we remain short until sometime near the end of July or early August.

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Wednesday, June 24, 2009

Update on Natural Gas, Short of the Month: 10 Weeks to Overflow

Every Thursday we report on natural gas. We have been saying to stay short.

The chart above shows the prices since last Thursday. Click to enlarge!

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ECB Lends 442B (USD $612B) at 1%, Fed to Follow? Straddles Will Fly

The European Central Bank announced today that it will lend a record E$442B at an amazing 1% interest rate. It is its biggest allotment ever.
"The loan represents about 70 percent of the ECB's outstanding liquidity operations and 5 percent of euro zone economic output, and analysts said the generous supply of funds should bring down money market rates. It's an extremely generous offer from the ECB which you don't see from other central banks ..."

The 'green shoots' have been poured more fertilizer on top of them. This is why it is not possible to use any logic to forecast the market's direction, and that straddles are the way to go. With straddles you win either way, up or down.

With all this money being injected, the GLD straddles we posted yesterday will be flying soon. Actually, all straddles will.

GLD, UCO, UNG Straddles

SPY, IWM Straddles

We wonder whatever happened to the North Korean nuclear cargo ship that was to be intercepted by the US. The news being fed by the media have changed. Was the market about to crash?

Will the Fed make a similar announcement today?

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Tuesday, June 23, 2009

S&P500: 8 Overbought and 182 Oversold Companies

Conditions are clearly short term oversold: 8 overbought, 182 oversold. This implies a short term bounce (up) for the markets.

Here is the updated list of most overbought and oversold companies in the S&P500.


There are 8 companies with RSI7 over 70.


There are 182 companies with RSI7 under 30.

(please click to enlarge)

Finally, here are the RSI7s of the ETFs and indices we follow:

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Total Value of World's Gold Reserves: $1.2T, Itemized List

Here are the top 41 holders of gold reserves in the world. Values were computed with the officially available reserves, and using today's price of $921.50/troy ounce.

The total reserves are USD$1.25T. This may help put things into perspective when the major countries in the world have been printing trillions recently. The U.S. for example, only has about $240B in gold reserves, which is really very small compared with what is being printed or with the current deficits.

(Please click to enlarge)
Note that the GLD ETF ranks in 7th place, although some people claim they don't really own physical gold, but that is another story.

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Monday, June 22, 2009

Winning Oil, Natural Gas and Gold Straddles for the Week

Today we start a new month of options, and with that, come the best option trading opportunities.

Oil and Natural Gas

Oil and Natural Gas are prime candidates for straddles and strangles.

UCO is at 12.50, right in the middle of strikes. UNG is extremely volatile and it is too expensive. Here are attractive strangles ideas for this week, showing the maximum moves required. because it is so early in the options month, the actual moves required will be much lower.


GLD offers the lowest required maximum move and strangles are very, very attractive. here are 91-90 and 92-88:

Computed with the StraddlesCalc too.

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Friday, June 19, 2009

U.S.to Intercept North Korean Nuclear Ship: Winning Straddles for July

Fox News reports that the US is sending a destroyer to intercept a North Korean ship suspected of carrying nuclear cargo. Whether this is just irresponsible reporting or whether sparks do indeed fly over the weekend, stocks are still significantly overbought and are due to come crashing.

Here are the current strangles that can become quite profitable for July:

XLF is at a sweet spot at a point equidistant from strikes. SPY requires the lowest maximum move. IWM is my favorite, liquid, easy to and fast to trade, and difficult to manipulate.

Computed with our StraddlesCalc tool.

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Top Oversold and Overbought Companies in the S&P500 June18

Here are the top oversold and overbought companies in the S&P500. Updated with prices at EOD yesterday.

Top Oversold:

Please click to enlarge.

Top Overbought:

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Natural Gas Report June 18: Overflow in 9.1 to 10.9 weeks

Natural gas inventories were released today:

(please click to enlarge).

Inventories increased by 114Bcf during the week, bringing the total to 2.557Tcf, which is now 32.1% higher than last year, and 22.6% higher than the 5-year average.

The storage is significantly above the 5-year average channel. The chart belows compares 2009 with last year:

At the current rate, the estimated number of weeks to storage overflow is now between 9.1 and 10.9 weeks, some time in August.

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Thursday, June 18, 2009

Credit-Card Debt Reaches $1T, Now You Do Not Need to Pay Your Balance

Do you pay your credit-card bill every month? A record number of people are not paying at all!

"Revolving credit", a close approximation of credit card debt, totaled about $940B in March according to the Federal Reserve. It also reported that 6.5% of credit card debt was at least 30 days past due in the first quarter, the highest percentage since 1991. The amounts being written off are also at peak levels.

The New York Times reports that credit-card companies and banks are letting people not pay what they owe and are settling for far less that what it is owed.

"They say many credit card issuers have revised internal guidelines to give front-line employees the power to cut deals with consumers. The workers do not even have to wait for customers to call and ask for a break."

BAC and AEX publicly state that they decide on a case-by-case basis. Other institutions are reluctant to confirm the practice, but the NYT has pently of examples.

TransUnion says that nationally, in Q1 2009 the bankcard delinquency rate (the ratio of bankcard borrowers 90 days or more delinquent on one or more of their bankcards) increased to 1.32%, up 9.1 percent over the previous quarter. Year over year, bankcard delinquencies increased 11% from 1.19 to 1.32 percent. This number willl surely go up when the numbers are published in Q2 2009.

For the rest of us, whey did we ever bother to pay our bills in full?

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S&P500: 8 Overbought and 89 Oversold by RSI7, but 2 Overbought, and Only 1 Oversold by RSI14

Today we have some very interesting indicators on the S&P500.

By RSI7, 8 companies are overbought (defined as RSI7 above 70):

MSFT 92.04
LH 80.97
RX 76.03
CLX 74.40
JAVA 73.21
SO 72.79
TXN 72.07
AMGN 71.34

89 companies are still oversold (RSI7 below 30):

ASH 29.82
CMI 29.66
RL 29.63
ROK 29.63
MS 29.54
BJS 29.52
LEN 29.43
UNH 29.39
NEM 29.36
MAR 29.34
LOW 29.05
CHRW 28.86
DNR 28.84
NBR 28.78
ZMH 28.49
CF 28.33
CINF 28.16
NWL 28.09
DNB 28.06
RRD 28.03
THC 28.03
EMN 27.99
JWN 27.84
HON 27.81
PH 27.81
BMS 27.64
SVU 27.47
CBS 27.37
NYT 27.25
AMD 27.21
WFMI 27.06
KFT 26.97
NTRS 26.94
JBL 26.93
CIT 26.92
CAT 26.89
MTB 26.85
COP 26.66
HUM 26.48
ADP 26.46
CBE 26.30
TMK 26.24
TXT 26.03
TAP 26.01
PRU 25.70
MTW 25.49
KR 25.43
FO 25.41
UNM 25.19
PGR 25.06
PG 24.71
GCI 24.68
DE 24.60
LNC 24.56
HES 24.54
LXK 24.52
CPWR 24.30
DD 24.29
VRSN 24.15
KIM 24.11
QLGC 24.00
AIG 23.91
UPS 23.75
PTV 23.48
AMP 23.42
HIG 23.34
EL 23.30
ERTS 23.24
MO 22.54
AVY 22.45
BDK 22.29
FDX 22.18
MDP 21.85
MAS 21.61
AFL 21.21
ALL 20.92
MI 20.62
BIG 20.59
PFG 20.53
MBI 20.44
TIF 20.29
C 20.05
TSO 19.90
GE 19.72
VLO 18.97
SUN 17.79
WY 17.49
PCL 16.97
SEE 14.07
ABC 8.13

The thresholds of 30 and 70 are of course arbitrary. There are, for example, 249 companies whose RSI7 is below 40.


By RSI14 2 companies are overbought:

MSFT 80.18
FISV 71.22

1 company is oversold:

ABC 14.03

These seemingly contradictory figures reflect the recent extended rally. There had been many days of prices going higher since March. These overbought conditions reflect in the longer timeframe indicators, such as RSI14. In the short term, there have been a few declines, which are reflected in the RSI7 indicator.

Note that MSFT and ABC make boths RSI7 and RSI14 lists, in opposite sides.

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Canada's Inflation Dips to Near Zero

Canada's annual inflation dropped to 0.1% in May, a near deflation level. This was the lowest Canadian inflation has been since November 1994, when it fell to minus 0.1 per cent.

The main reason for the decline was the falling oil adn energy prices, but only because last year they were at near record highs and have since dropped. Since Oil peaked at over US$145 a barrel in July of last year, there will be at least one more month of near deflation levels.

Excluding the trasportation component, inflation in Canada remains close to 2.3%, which is where the Bank of Canada wants it. Core inflation, which excludes volatile items, was exactly at the bank's 2% target.

"The decline in the energy price index was due more to high prices in 2008 than to recent market developments," the agency said, pointing out that from April energy prices were actually 4.4 per cent lower.

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Wednesday, June 17, 2009

S&P500 Most Overbought and Most Oversold Report, June 17

Today we only have 3 companies with RSI7 over 70, and 89 with RSI7 under 30! Conditions have changed significantly.

Most overbought:

90.72 MSFT
72.45 RX
70.66 SRE
69.29 SO
69.23 CLX
68.99 S
67.04 JAVA
65.24 LH
65.15 SLM
64.93 WAT

Most oversold:

29.97 HD
29.86 KLAC
29.81 HRS
29.79 TAP
29.76 TXT
29.75 SVU
29.64 DPS
29.55 LLY
29.46 SLE
29.39 PH
29.39 UNH
29.23 KBH
29.20 GCI
29.17 WMT
29.05 CBE
29.02 CA
28.97 CHRW
28.84 AMD
28.72 GPS
28.45 EMN
28.32 JBL
28.28 AFL
28.12 CBS
28.12 DNB
28.01 NEM
27.99 CPWR
27.89 MI
27.87 GE
27.86 HIG
27.76 PRU
27.63 KR
27.60 ORLY
27.45 LEN
27.43 C
27.41 MAR
27.40 DE
27.20 KIM
27.08 WPO
26.92 ADP
26.82 DD
26.75 LXK
26.75 SGP
26.61 MDP
26.51 FO
26.45 TMK
26.32 JWN
26.23 HSY
26.22 DIS
26.00 AMP
25.69 PTV
25.62 FDO
25.40 UPS
25.33 LNC
25.27 PG
25.21 NWL
24.91 HUM
24.89 MAS
24.85 WY
24.84 SNA
24.79 FTR
24.78 AVY
24.53 FDX
24.44 PFG
24.34 KFT
24.25 EL
24.19 BIG
24.17 ALL
23.95 CCL
23.88 ZMH
23.75 PGR
23.43 TSO
23.43 MRK
23.40 MO
23.16 LUV
23.02 CTAS
22.45 PCL
22.36 SUN
22.08 ERTS
21.35 MBI
21.29 WPI
20.65 MCO
20.62 PBI
20.29 TIF
19.71 RAI
19.06 VLO
18.95 SEE
17.57 VRSN
15.66 GENZ
14.47 BDK
5.84 ABC

Some others that I track:

60.84 UNG
35.03 SPY
34.62 IWM
39.73 XLF
35.00 DIA
61.93 USO
68.35 ^VIX

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Tuesday, June 16, 2009

S&P500 Top Overbought and Oversold Companies Report June 16

What a difference a day makes. Here is the updated report, prices and RSIs computed at EOD yesterday.

Top Overbought Companies:

Top Oversold Companies:

(click to enlarge please)

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Brazil's Bovespa and Hong Kong Exchanges Now Bigger than NYSE, Nasdaq and LSE

Sign of the times: The Financial Time of London reports today that Hong Kong Exchanges and Clearing (HKEx) and Brazil’s BM&F Bovespa have vaulted ahead of NYSE Euronext, Nasdaq OMX and the London Stock Exchange in the value of shares in the exchange companies themselves.

The current ranking is:

1. CME (Chigago)
2. HKEx (Hong Kong)
3. DB (Germany)
4. Bovespa (Sao Paulo)

Says the FT:

"BM&F Bovespa has been closing down its trading pits and expanding into electronic trading to make it easier for overseas traders to access the exchange. Next month, the Brazilian bourse opens a London office. Trading volume on HKEx has surged in recent months on the back of strong inflows from investors shifting to equities as they seek higher returns. HKEx shares have risen nearly 70 per cent since the start of the year. "

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Top 20 Stocks to Short in the S&P500, Update June 15

On June 4 we posted a list of the top 20 stocks to short in the S&P500. Here is an update with the price then and the price at the end of the day June 15:

The average ROI of this strategy was +2.58%. In comparison, the SPY (S&P500 ETF) dropped 1.75% in the same period.

The list of top stocks to buy and short is updated here regularly.

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Monday, June 15, 2009

Markets Rally and Decline With Low Volumes - Update June 15

In May we posted an article on the current rally having no volume. We showed that SPY was trading with volumes 31% lower than average, and DIA with volumes 54% lower than average:

Today we have a good drop in prices. The question is whether the volume is higher or lower when the market drops. At first glance, it appears that we are haivng higher than average volume today. As of 1:50PM, SPY had traded 142M shares vs the 30-day daily average of 292M shares. DIA has traded 8.5M shares vs the daily average of 11.9M shares. With over 2 hours to go, the volumes are on their way to still being lower the average totals, but definitely higher than when there are rallies, percentage-wise. We will update at the end of the day.

However the above figures are misleading. This is because the daily volume averages are coming down hard. Let us take a look at what has happened with the daily average volumes since May 5. As of 2:30PM:

(click to enlarge) June 15 vol. as of 2PM (incomplete)

What we are noticing is that the volume averages have considerably come down from early May. For instance, SPY 90-day average is down 21.5% compared to what it was in May. For DIA, the drop is 38.6%.

To say that volume is higher (today) when the market drops is misleading. The data above shows that volumes are still anemic.


Here is the updated table with volumes as of EOD:

Note that only DIA had higher volume today than on May 5 (2nd last column). However, all these ETFs that we tracked still have significantly lower volume than the 90-day average volume (last column). This confirms that we have lower volumes with the markets going up or down.

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Capital One and American Express Straddles for July

The current crisis and unemployment rate will cause bad loans. Some companies that have done well recently, too well, are prime targets for these bad loans. The chart below shows options strangles to Capital One (COF), and American Express (AXP) for July expiration.

It is very noteworthy that Capital One has just registered a charge-off rate of 9.41%, and a real one of 9.91%, a company record, see the footnote in their SEC filing:

"A change in bankruptcy processing resulted in an improvement in the U.S. Card charge-off rate that is reflected in the May results. The impact was approximately 50 basis points. While our internal guidelines require bankrupt accounts to be charged off within 30 days, our practice had been to charge off customer accounts within 2 to 3 days of receiving notification of bankruptcy. Due in part to an increase in the volume of bankruptcies, we have extended our processing window to improve the efficiency and accuracy of bankruptcy-related charge-off recognition. The new process remains within Capital One’s internal guidelines, as well as FFIEC guidelines that bankrupt accounts must be charged-off within 60 days of notification."

Who are they kidding? Was this change simply to avoid an official record or is it part of the financials pumping for stock issuing and capital raising? Straddles on this company are looking very good.

Price and RSI chart:

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SPY, IWM Straddles: ROI of +11% in 1 Day

We posted these strangles on June 12. Here are the current prices as of 11AM. The ROI in one day is +11/+12%. This is the beauty of straddles, it does not matter the direction the markets goes, and the bigger the surprise, the better the results.

IWM is trading at $50.94, -3.49%, and SPY at $92.74, -2.46%.

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S&P500 Top Oversold and Overbought Companies, June 15

Here are the most overbought and the very few oversold companies in the entire S&P500, sorted by RSI7.

Top Oversold companies:

VLO 21.77

AMP 22.21

UNH 23.09

AET 23.59

VRSN 23.59

SUN 27.15

CVH 27.18

LEN 28.18

HIG 28.90

BDK 28.93

NEM 29.16

TIF 29.51

TSO 30.34

Interesting to see the refiners in this group, TSO, VLO, SUN

Top Overbought (i.e, top 20 t short):

CVX 80.43

RX 80.90

SLM 81.42

STZ 81.43

CTXS 81.56

CSC 81.71

HAR 81.86

PNW 81.97

JAVA 82.09

TSS 82.26

ITW 82.40

SO 82.89

DELL 83.19

GAS 83.46

ETFC 83.46

CLX 84.00

EIX 84.56

BAC 84.70

FISV 86.37

MSFT 90.06

There are 20 companies with RSI7 over 80. MSFT is in unbelievable nose-bleed high RSi7 of 90.06.

The following charts show the SPY, price, volume, and RSIs. RSI is at 67.4. Note how it has been pretty much over 50 since March 2009.

(please click to enlarge)

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Friday, June 12, 2009

SPY and IWM Straddles For Next Week Require 3% Move to be Profitable

Computed with our StraddlesCalc too.

1. Here are fresh IWM and SPY straddles for next week's expiration. Note the maximum move required of around 3%.

Prices as of 1:50PM

2. Here are the SPY and IWM strangles for July expiration.

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The USO Rollover Trade is Dead

We have posted several analysis of USO rollover in past months. The initial months had a clear correlation between the 4-day USO rollover periods and USO prices. For the last two months, however, May and June, this has not happened.

The tables below shows what happened before, during, and after rollover. June shows prices as of 10:20AM today.

From a trading perspective, the USO Rollover trade is dead.

Speaking of oil, INO has a nice video on crude oil "Is Crude Oil the New World Currency?", including a Fibonnaci tool.

Click to watch.

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Audit The Fed Bill Has Enough Sponsors, Fort Knox Next?

Announced today, bill now has 222 sponsors, please see annoucement below. Now, if they would only audit Fort Knox!

"Audit the Fed Bill Reaches Crucial Benchmark

Washington, D.C. - Federal Reserve Transparency Act, HR 1207, has reached and surpassed the level of 218 cosponsors in the House of Representatives, which means it is now cosponsored by a majority of the members.

The 218th cosponsor was Dennis Kucinich (OH-10), and the bill has since received its 222nd cosponsor.

“The tremendous grass-roots and bipartisan support in Congress for HR 1207 is an indicator of how mainstream America is fed up with Fed secrecy,” said Congressman Paul. “I look forward to this issue receiving greater public exposure.”

Hearings on Federal Reserve transparency are expected within the next month, as part of the Financial Services Committee's series of hearings on regulatory reform."

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Novartis Sucessful 1st Batch of H1N1 Flu Vaccine

Switzerland's Novartis said today it expects to have full production of H1N1 flu vaccine ready by September or October after successfully developing a 1st batch of the vaccine weeks ahead of schedule. Clinical trials will commence next month.

Novartis trades as an ADR, symbol NVS.

The company said it expects to be producing millions of dossages on a weekly basis.

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Petrobras Opens First Electric Vehicle Recharging Station in Rio

Petrobras inaugurated yesterday the first electric vehicle recharging station in the southern hemisphere. The unit is located in Rio and uses sunlight to generate energy. It has a capacity of up to 100 kilowatts.

Petrobras admits that the initiative has more appeal as an "environmentally conscious" initiative rather than financial. A kilowatt-hour is expensive, costs R$2.60 (USD$ 1.40). If a driver uses the electricity at home, he or she pay six times less: R$0.40 (USD $0.19).

"But when recharging your vehicle at the station, users know that you they are using clean energy, while the energy received at home can come from a thermal power plant, for example."

PBR's focus is the large number of electric bikes in the neighborhood where the recharging station was installed in the Barra da Tijuca sector of Rio. "Here we have the largest concentration of such bikes in the country," says Machado, a Director.

The station also sells gasoline, ethanol and natural gas. In case of little sunlight or demand greater than supply, the station can use the external power network.

A full charge for car or bike takes about four hours. PBR offers an extra battery for the driver to continue using his bike.

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Thursday, June 11, 2009

30-year Treasury Notes Results: Yields Jump to 4.72%

30-year Treasury note auctions results have been announced. The yields have jumped to 4.72%, an increase of 10.3% over last month. Indirect bidders picked up 49% of the total (tbc). Last auction, this was 33%. Indirect bidders include other central banks, and the Fed? I.e, the Fed printing money?

Compare the yields this year:

Individual auction results this year:

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Cristiano Ronaldo Sold for US$132M, Worth More than GM and Chrysler?

Real Madrid finally takes him from Manchester United.

Golden boot yes, but is this deal really worth 80M pounds or about USD$132M? Are any sports or artists personalities worth this much money?

And we thought there was a recession in Spain.

Well, some would say he is definitely better value and more fun to watch than GM and Chrysler.


Reuters now reports widespread anger in Spain:

"Coming just days after Real president Florentino Perez paid around 67 million euros ($94.02 million) for Brazilian Kaka, the move for Ronaldo prompted widespread anger in a country with an unemployment rate of 18.1 percent, the highest in the European Union.
"In Spain there are four million jobless. That's four million family dramas," Juancarlosm wrote on the website of daily El Mundo.
"Spending this shameful amount of money is immoral. I am embarrassed to be a Madrid fan."

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