Ratios at Work

A subscriber asked if we would explain how to read / decipher the ratio charts we work with, so here you go, as it’s about time again.
In this regard, there are in fact two types of ratio related charts we work with, and both will be covered here today.
Firstly, we will cover the ETF / Index charts used in our monthly ‘true sentiment’ studies, the most recent of which is attached here, with the analysis attached as well, published the day following the posting of the charts. What makes these ratio charts and monthly analysis so important? Firstly, these ratios are ‘open interest ratios’ (not volume) meaning they measure closing trade levels of the respective ETF / index (or stock), meaning the traders feel strongly about these positions because they are willing to hold them overnight, if not longer. Because hedging positions, which constitute a fairly large percentage of the trade in most cases, are often held until expiry.
So some of these positions are hedges, which waters down the predictive value of even this measure, however at the margin, open interest put / call ratios are the only remaining indicator that measures ‘true sentiment’ in a market (security, ETF, index) in question. This is borne out in the observation you could have gone to ZeroHedge since 2010 and read hundreds (if not thousands) of stories purporting to be meaningful indications of sentiment, which are almost all negative (which has turned into something ugly for unwary followers who don’t realize what is happening because they have lost a great deal of money shorting stocks over the years, not to mention the psychological damage), and yet, stocks continue to grind higher in a rinse and repeat continuum month in and month out. (i.e. the perpetual short squeeze.)

This post was published at GoldSeek on 10 April 2017.

Dow Coil

The Dow has been trading sideways for a couple of weeks now and has formed a volatility coil. My expectation is that price will break sharply lower (below 20,400) over a period of 3-5 days, then be followed by a move to new highs.


This post was published at GoldSeek on 10 April 2017.

IRS COMMISSIONER ADMITS TAX CODE IS TOO CONFUSING: ‘I DO NOT DO MY OWN TAX RETURN’

Everyone knows that tax season sucks, and it’s not just because we have to fork over our hard-earned dollars to a wasteful government. To add insult to injury, our government has devised one of the most complicated tax codes in the world. Every year, most of us agonize over getting our taxes done right, or we spend more money to have someone else prepare our taxes. You know it’s bad, when even the head of the IRS doesn’t prepare his own taxes.

This post was published at The Daily Sheeple on APRIL 10, 2017.

Whole Foods Surges After Jana Goes Activist

Who says activist investors are dead, swallowed whole by the relentless passive, ETF wave?
Moments ago Whole Foods, which has seen its stock suffer a painful decline for the past two years, spiked on a WSJ report that Barry Rosenstein’s Jana Partners has amassed a 9% stake in WFM and is pushing the organic grocer to speed up its turnaround efforts while also exploring a possible sale.

This post was published at Zero Hedge on Apr 10, 2017.

Shale Hotspot Draws In Another Big Oil Player

The oil price crash that destroyed a lot of smaller oil producers has not spared the finances of even the oldest and largest oil companies. Trying to keep the precious dividends intact and growing, Big Oil is focusing on cost control and cash preservation, and has effectively deferred investments in new ultra-expensive drilling ventures.
One of the biggest companies, U. S. Chevron, is now planning to capitalize on its vast acreage holdings in the Permian. Investments in new mega projects, at least over the next few years, are not currently on the table, chief executive John Watson told Reuters in an interview published this week.
Chevron is now betting big on the Permian; the star shale play straddling West Texas and New Mexico that has seen most of the resurgence since oil prices started steadily recovering in the fourth quarter last year.

This post was published at Zero Hedge on Apr 10, 2017.

Commercial Bankruptcies Surge As The Fed Warns Of A Stock Correction – Episode 1251a

The following video was published by X22Report on Apr 10, 2017
Morgan Stanley wage growth is leveling and might be slowing. Commercial and consumer bankruptcies have surged and it looks like pre 2008. Loan creation have declined further and it is following the same pattern as 2000 and 2008. The Fed minutes shows they have the ability to bring down the market and to push the market up. This time they are getting ready to bring the market down.

Welcome To The Third World, Part 23: Honest Pension Returns Equal Mass-Bankruptcy

Last year the California Public Employees’ Retirement System, otherwise known as Calpers, cut the expected return on the funds it invests for plan beneficiaries from 7.5% to 7%. Seems like a modest change that should have a correspondingly limited impact on all concerned, right? Alas, that’s not how things work in the realm of compound returns, where small initial changes produce hugely different outcomes. In fact, this is a bankruptcy-level event for some California cities.
California Cities’ Pension Tab Seen Almost Doubling in 5 Years
(Bloomberg) – California cities and counties will see their required contributions to the largest U. S. pension fund almost double in five years, according to an analysis by the California Policy Center.
In the fiscal year beginning in July, local payments to the California Public Employees’ Retirement System will total $5.3 billion and rise to $9.8 billion in fiscal 2023, according to the right-leaning group that examines public pensions.
The increase reflects Calpers’ decision in December to roll back the expected rate of return on its investments. That means the system’s 3,000 cities, counties, school districts and other public agencies will have to put more taxpayer money into the fund because they can’t count as heavily on anticipated investment income to cover future benefit checks.

This post was published at DollarCollapse on APRIL 10, 2017.

APRIL 10/A HUGE 1.77 TONNES OF GOLD ADDED TO THE GLD AND A MONSTROUS 11.231 MILLION OZ OF ‘SILVER’ WITHDRAWN FROM THE SLV/BANK OF ENGLAND CAUGHT IN LIBOR SCANDAL AS AUTHORIZING IT/BANK OF ENGLAND…

Gold: $1251.30 DOWN $3.20
Silver: $17.89 DOWN 24 cents
Closing access prices:
Gold $1254.70
silver: $17.94!!!
XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX
SHANGHAI GOLD FIX: FIRST FIX 10 15 PM EST (2:15 SHANGHAI LOCAL TIME)
SECOND FIX: 2:15 AM EST (6:15 SHANGHAI LOCAL TIME)
SHANGHAI FIRST GOLD FIX: $1265.01 DOLLARS PER OZ
NY PRICE OF GOLD AT EXACT SAME TIME: 1252.30
PREMIUM FIRST FIX: $12.71
xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx
SECOND SHANGHAI GOLD FIX: $1267.69
NY GOLD PRICE AT THE EXACT SAME TIME: 1254.65
Premium of Shanghai 2nd fix/NY:$10.80
xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx
LONDON FIRST GOLD FIX: 5:30 am est 1253.60
NY PRICING AT THE EXACT SAME TIME: 1253.45
LONDON SECOND GOLD FIX 10 AM: 1250.05
NY PRICING AT THE EXACT SAME TIME. 1250.10
For comex gold:
APRIL/
NOTICES FILINGS TODAY FOR APRIL CONTRACT MONTH: 21 NOTICE(S) FOR 2100 OZ.
TOTAL NOTICES SO FAR: 608 FOR 60800 OZ (1.8258 TONNES)
For silver:
For silver: APRIL
0 NOTICES FILED TODAY FOR NIL OZ/
Total number of notices filed so far this month: 641 for 3,205,000 oz
XXXXXXXXXXXXXXXXXXXXXXXXXXXXXX
END
The open interest in silver continues to advance with today’s reading just under 222,000 contracts or about 2,000 contracts below the record set last year. The price of silver is a good $2.55 below the price when the record OI was set. Today we saw a big drop in the price of silver. Late tonight, I will retrieve the preliminary OI figures and if the OI remains high, then the managed money (hedge funds) remained firm again and would have refused to liquidate their silver contracts with today’s orchestrated raid.
I will let you know tomorrow…
Let us have a look at the data for today
.
xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx
In silver, the total open interest ROSE BY 5 contracts up to 221,867 DESPITE THE PRICE FALL ( 10 CENTS) WITH RESPECT TO FRIDAY’S TRADING. THE HEDGE FUNDS (MANAGED MONEY) CONTINUES TO SLOWLY ADD TO THEIR POSITIONS WITH THE BANKERS TRYING TO COVER THEIR EVER BURGEONING SHORTS (OVER 555 MILLION OZ) BUT TO NO AVAIL. In ounces, the OI is still represented by just OVER 1 BILLION oz i.e. 1.110 BILLION TO BE EXACT or 159% of annual global silver production (ex Russia & ex China).
FOR THE NEW FRONT MARCH MONTH/ THEY FILED: 0 NOTICE(S) FOR NIL OZ OF SILVER
In gold, the total comex gold also ROSE BY 6,005 contracts WITH THE RISE IN THE PRICE OF GOLD ($4.00 with FRIDAY’S TRADING). The total gold OI stands at 434,800 contracts.
we had 21 notice(s) filed upon for 2100 oz of gold.
xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx
With respect to our two criminal funds, the GLD and the SLV:
GLD:
We had a huge change in tonnes of gold at the GLD: a deposit of 1.77 tonnes
Inventory rests tonight: 836.49 tonnes
SLV
We had a huge change in inventory at the SLV/a massive withdrawal of 11.231 million oz of silver from the SLV
THE SLV Inventory rests at: 317.070 million oz
end

This post was published at Harvey Organ Blog on April 10, 2017.

Overseas Stimulus Train Keeps Hurtling Forward

As we focus on the most recent moves of the Federal Reserve, it’s easy to miss the bigger picture. The Fed has been trying to move toward an interest rate ‘normalization’ program for more than a year, since nudging rates up .25 points in Dec. 2015.
Although it remains to be seen whether the two interest rate hikes last December and March signal a rocket launch or a sputtering firecracker, the central bank at least wants to give the appearance of tightening. The Fed has also launched some trial balloons with talk of shrinking its bloated balance sheet.

But some other central banks around the world aren’t even making a pretense of ‘normalization.’ For instance, Bank of Japan Governor Haruhiko Kuroda said Monday the central bank remains committed to maintaining its massive monetary stimulus program.
Last fall, the BOJ launched a program to hold short-term interest rates in negative territory at minus 0.1%. The bank also seeks to keep the Japanese 10-year bond yield at about 0% through aggressive asset purchases.
Kuroda’s comments echoed statements he made in March. Japanese central planners remain obsessed with hitting the 2% target inflation rate, as Kuroda stated at a Reuters Newsmaker event last month:

This post was published at Schiffgold on APRIL 10, 2017.

Stocks and Precious Metals Charts – Freedom

‘The world says: ‘You have needs – satisfy them. You have as much right to it as the rich and the mighty. Do not hesitate to satisfy your needs; indeed, expand your needs and demand more.’ This is the worldly doctrine of today.
And they believe that this is freedom. The result for the rich is isolation and suicide, and for the poor, envy and murder.’
Fyodor Dostoyevsky, The Brothers Karamazov
The marketeers were massaging perception today, putting up a good front of confidence despite the many, many geopolitical and economic risks.
This smells like a bubble topping. That can take quite a bit of time, or not. It depends on what happens to specifically break the illusion that is driving the hot money to chase mispriced risks.
Gold and silver finished largely unchanged. The Comex is becoming a betting parlor that happens to have a little physical metal in the back room. This is more true for gold rather than silver, given the activities of some parties in Comex silver to use it as a delivery mechanism for their wholesale operations.

This post was published at Jesses Crossroads Cafe on 10 APRIL 2017.

“Not So Good”, Tailing 3Y Auction Prices With Lowest Bid To Cover Since July 2009

With the 3 Year trading modestly tight in repo, and just above 0% after being special for the prior three days…

… some expected another strong auction, with the yield stopping through the When Issued.
However, perhaps as a result of the bid for TSY paper during today’s trading session, moments ago the Treasury announced that the 3Y priced at a yield of 1.525% (below last month’s 1.63%) and tailing by 0.08%, the highest tail going back to mid summer 2016.

This post was published at Zero Hedge on Apr 10, 2017.

“Think 1999”: Morgan Stanley Sees Huge 30% Surge In Stocks “Investors Cannot Afford To Miss”

With Morgan Stanley’s Adam Parker having left the investment bank to continue his career at Eminence Capital, it was up to his replacement, Michael Wilson to come up with the Initiation of coverage report for the “Classic Late Cycle.” So, in keeping a stiff upper lip, and breaking away from the gloom that appears to have recently gripped his colleagues over at Goldman Sachs, Wilson had no choice but to keep a stiff upper lip and keep the Punch Bowl full (to paraphrase Bill Dudley’s famous March 30 speech).
So, projecting a remarkable dose of optimism at a time when dramatic changes are in store for not only the Fed’s balance sheet but the global credit impulse which is now negative, Wilson, who until recently was Morgan Stanley’s Chief Investment Officer of Wealth Management, writes that “although optimism is a late cycle phenomenon, history tells us the best returns often come at the end. It has taken eight long years to get here, but Wall and Main Street are finally starting to feel a bit better about the future.”
What alse comes at the end is the crash, and those tend to make both Wall and Main Street feel a bit worse about not only the future but also the present.
In any case, the basis for MS’ optimism is the economic recovery – which alas is entirely missing in the hard data, which tumbled after the NFP print to the lowest level in a year – and the Trump reflation euphoria – which the bank may have missed faded about a month ago and has been rapidly contracting to pre-election levels – and uses that to extrapolate a move as high as 3,000 in the S&P, or a 30% blow off top.

This post was published at Zero Hedge on Apr 10, 2017.

Asian Metals Market Update: Apr-10-2017

Trump is once again following his predecessors of war. The attack on Syria was uncalled for. There will be more attacks in Syria till Assad is removed. Later the Americans will convert Syria into another Libya, loot its wealth, loot its people, sell second hand outdated American weapons (just like Iraq) and convert it into another Iraq, Libya or Afghanistan. The hidden agenda is to capture Syria’s massive crude oil and natural gas reserves. Once you control energy prices you rule the world.
The side effects of such attacks are in the form of migrant crises in Europe and America. The common people of Europe also suffer due to the migrant crisis in the form of terror attacks by radical religious groups. Freedom of expression is curbed. Additional taxes are imposed to support migrants. National resources are affected as migrants also consume these resources which is followed by significant increase in the cost of living. Demographic changes in Europe caused by migrants will be gold positive in the medium term as well as long term.
Trump was unable to get any of his policy changed agreed to within his own party. It seems American are war loving people. Approval ratings increase, masses are focused on war and all policies are passed by the legislators with ease.

This post was published at GoldSeek on 10 April 2017.

Secret Recording Implicates Bank of England In Libor Rigging

While it may seem like yesterday, it was nearly five years ago that the Libor scandal first broke, and with it brought scandalous suggestions that none other than the Bank of England was implicated.
As we first reported in July 2012, according to Barclays then CEO Bob Diamond, it was high level individuals at the BOE who may (or may not) have been aware that Libor had been “manipulated” and were (or were not) also active in the setting process:
BARCLAYS SAYS BANK OF ENGLAND CALLED ON OCT. 29, 2008 ON LIBOR BARCLAYS SAYS DIAMOND MADE NOTE OF CALL; RECEIVED CALL FROM PAUL TUCKER BARCLAYS SAYS TUCKER SAID `CERTAIN’ BARCLAYS DIDN’T NEED ADVICE; SAID LIBOR DIDN’T ALWAYS NEED TO BE SO HIGH And yet, concerned about how deep the rabbit hole would go if a central banker was implicated, Diamond tried to cover it up:

This post was published at Zero Hedge on Apr 10, 2017.

Jim Rickards: The Numbers Impacting the Fed

Jim Rickards joined Stephen Guilfoyle on The Street to discuss his latest take on the numbers that will move the Fed in through its decision making process. During the conversation Jim Rickards and Mr. Guilfoyle, also known as ‘Sarge’ on Wall Street, cover how the Federal Reserve will continue to push rates higher and potentially trigger a recession.
To begin the discussion Sarge prompted Rickards’ on his read regarding the trajectory of monetary policy in the United States. Rickards noted, ‘I see the Federal Reserve raising rates in June – the market is getting there, they’re not quite ready yet though. The Fed is on track to raise rates four times a year until 2019 in order to get the Federal funds rate at 3.25%. The expectation is rate hikes in March, June, September, December in a sequence until 2019.’
‘There are only three reasons that the Fed might his a ‘pause button.’ There are only three reasons they would do so. First, if job creation falls below 75 thousand per month, which is a pretty low hurdle. Second, if the stock market fell out of bed and I don’t mean 5%. If the Dow was to fall more than 2000% that would cause the Fed to pause. The third thing would be disinflation. Inflation is currently moving toward the Fed’s goal but if it started to move the over way [you could see the central bank take a pause]. If you don’t see those things then expect the Fed to raise four times a year.’

This post was published at Wall Street Examiner on April 10, 2017.

Pension Crisis In U.S. and Globally Is Unavoidable

Pension Crisis In U. S. and Globally Is Unavoidable
by Lance Roberts
There is a really big crisis coming.
Think about it this way. After 8 years and a 230% stock market advance the pension funds of Dallas, Chicago, and Houston are in severe trouble.
***
But it isn’t just these municipalities that are in trouble, but also most of the public and private pensions that still operate in the country today.
Currently, many pension funds, like the one in Houston, are scrambling to slightly lower return rates, issue debt, raise taxes or increase contribution limits to fill some of the gaping holes of underfunded liabilities in their plans. The hope is such measures combined with an ongoing bull market, and increased participant contributions, will heal the plans in the future.

This post was published at Gold Core on April 10, 2017.

Key Events In The Holiday-Shortened Wee

In this holiday-shortened week (markets closed for Good Friday), focus turns to several inflation prints in G10 in the week ahead, with US and UK inflation data likely to get the most attention. In addition, there are a few scheduled speaking engagements by Fed officials, including a speech by Fed Chair Yellen on Monday.
Away from the US, the street expects the Bank of Canada to remain on hold, keeping the overnight rate target at 0.5%. Despite recent improvement in some economic data, slack remains in the economy and there is no evidence of demand pressure on prices. More interesting for the markets will be the message that the BoC chooses to send through the combination of the interest rate announcement, the monetary policy report and the press conference.
In Emerging Markets there will be monetary policy meetings in Brazil, Chile, Korea, Kazakhstan and Ukraine. Brazils BCB is expected to cut the selic rate 100bp. Chiles BCCH will likely cut the monetary policy rate by 25bp.

This post was published at Zero Hedge on Apr 10, 2017.

Goldman Downgrades French Bonds Ahead Of Elections

Roughly at the same time as today’s French election narrative shifted again as traders started paying attention to the suddenly surging in the polls far-left candidate Jean-Luc Melenchon, which pushed the Euro to the lowest level in a month, Goldman has come out with a recommendation to short June OAT futures (OATM7) at 147-72, for an initial target of 144.00, and stops on a close above 150.00,
In the note, Goldman’s Francesco Garzarelli writes that a victory by a moderate reformist presidential candidate (Fillon, Macron), which is the base case at the bank, would result in a narrowing of French bond spreads but may be offset by a selloff in core rates. He writes that the ‘fair level’ of 10-year spread to bunds is in the region of 30bp-40bp, from 70bp currently, according to Goldman
The bank adds that it expects French bond spreads and yields to come under upward pressure if the first round of election were to result in a strong showing of anti-establishment candidates (Le Pen, Melenchon), while by contrast, U. S. Treasuries may instead rally on the event, on the back of flight-to-quality flows.

This post was published at Zero Hedge on Apr 10, 2017.

Are You Ready for the Middle East’s Solar Gold Rush?

The MENA region saw over 2 GW of new solar capacity tendered in 2016, and 2017 looks to easily surpass this level as hundreds of billions of dollars begin to flow into green energy in the Arab world.
On April 6th, Middle Eastern nations announced an ambitious energy project to establish an Arab Common Market for electricity. The energy ministers from 14 Arab countries signed a memorandum of understanding, confirming their commitment to the development of an integrated electricity supply system for the Middle East. This announcement in itself is very important, yet it also comes at a time of even larger changes in energy in the Middle East: solar power. A future common electricity market will see an ever increasing role for solar power as countries across the Middle East are heavily investing in renewables.
Ongoing low oil prices together with rising demographic concerns are increasingly motivating MENA states to invest in a more secure and diversified energy portfolio. With an estimated population of 692 million by 2050, the MENA region will require a substantial increase in generating the capacity to meet future energy demands. This point has been hit home this year as Fitch has warned that most oil producers will not break even in 2017, based on a predicted average price of $52.50 per barrel. Most MENA countries need substantially higher prices (ex: Saudi Arabia needs $74) to balance their budgets.

This post was published at FinancialSense on 04/10/2017.