Stocks moved sideways Tuesday during a day of base building with buyers idle due to wariness over political and regulatory issues, discounting solid earnings reports. The DJIA climbed intraday over resistance at 10,250, but fell back to close even, just under 10,200 again. The market is moving sideways, waiting for a catalyst to cause the SmarTrend(R) indicators to climb out of oversold zones and rally the market indices...
Check out my podcast for the full report:
http://www.mysmartrend.com/podcast

01/27/2010-Shares of Verizon Communications (NYSE:VZ) are trading 1.3% lower to $29.78 Wednesday after FBR Capital analyst David Dixon downgraded the company to Market Perform and cut his fiscal 2010 EPS forecast to $2.29; previously his forecast matched consensus estimates of $2.41.

Dixon writes, "We believe that a continued weak economy, high tariff rates for legacy services, and intense wireline margin pressure have driven management to accelerate head-count reductions and reposition its sales force to focus on the higher-margin segment of its enterprise customer base--effectively de-emphasizing revenue growth for margin stability."

To ensure that your weight on the foot forward -
[url=http://www.golfbargainoffers.com]discount golf clubs[/url] is a perfect solution for the hook. If you have the ball, you need some of your weight is still happy to be back. So you [url=http://www.golfbargainoffers.com/goods-721-TaylorMade+R9+Fairway+Wood.html]TaylorMade R9 Fairway Wood[/url] do not get the ball close. This is the first deadly hook. All done, the weight, you will experience ever.
But ... is actually quite simple to treat the hook. Proof of this sequence of changes that are more likely to be corrected hook. Its aim is to correct a hook from the outside.

1) are weakened, he began firmly unde [url=http://www.golfbargainoffers.com/goods-565-Callaway+X-22+Irons.html]Callaway X-22 Irons[/url]r control. You want only his fists in the vicinity of the target. In this way, people can, nature has shown no effect on the area. It is no exaggeration, as everything else is tested is crucial. To ensure that this test before, if you are sure you have to play a weak grip.
2) is on the left side (right), if the left-handed tendencies goals - starting with an open mind. This is a continuation to the right of the ball, he is [url=http://www.golfbargainoffers.com/goods-488-Titleist+AP2+Irons.html]Titleist AP2 Irons[/url] seeking. Open your channel a little on this line, shoulders.
(3) in a position of the ball forward - is a common player, cut the ball pinballs forward into position. How to copy. When connected, the result should be a relatively simple ball. (Note: If good or per serving, your first goal should be learning to do.) Forward Pass, in their stations some things should be back on track.

Over the coming decade, I strongly believe that most of the best investment opportunities will emerge from the four following natural resource categories: Water, Agriculture, Gold and Energy…or what I call the WAGE group. And some of those opportunities will feature a combination of these resource categories. One of the most intriguing combinations is what I call the energy-water nexus.

It takes water to produce energy and energy to produce clean water. That nexus creates a number of profit possibilities. Sometimes, they are not so obvious. But often, a company that possesses expertise in water treatment will possess a related expertise in the energy field. The connection between water and energy is at least as old as the process of pumping water into old oil fields to boost production.

But the connection between these two precious fluids is changing quite a bit.

Let’s take a look at one of the less-obvious connections…

You may not realize this, but two-thirds of oil discovered stays in the ground. The average recovery rate is only about 35%. What if we could recover more of the oil we’ve already discovered?

If the recovery rate improved to 50%, the world’s recoverable oil would increase by 1.2 trillion barrels. It would double today’s proven reserves, says the IEA. That much oil makes even a cynical old oilman catch a gleam in his eye and starts his heart aflutter. Indeed, lots of big brains churn away at this problem day and night.

“It’s the prize for the next half century,” says Howard Mayson, vice president for technology at British oil giant BP, quoted in this morning’s Wall Street Journal. BP relies heavily on enhanced-recovery methods. These methods aim to improve that oil recovery rate.

As The Wall Street Journal reports:

“Enhanced recovery is a lifeline for the biggest oil companies, such as Exxon Mobil Corp. and BP, which are under intense pressure from shareholders to keep ramping up production and gaining access to fresh reserves. But that’s hard to do when the companies are shut out of the oil-rich Middle East and places like Russia. So they rely more and more on existing fields, some of which have been producing oil already for decades.”

It is like squeezing a sponge ever tighter to extract the most of what you can get. The old method is to simply flood the reservoir with water. The idea is to create enough pressure to make it easier to pump the oil out. It is not very efficient, but it works for a time. It is also becoming a bigger problem to secure the water supply. That’s why we see oil companies buying water rights out West. Currently, the shale oil plays consume a lot of water.

Instead of using water, some companies will pump the reservoir with carbon dioxide. Companies used to store carbon dioxide in old unused reservoirs. Using this method of enhanced oil recovery, they put that carbon dioxide to work. BP uses this method out in its Prudhoe Bay reservoir, to great effect. Recovery rates there are 60%. Now Prudhoe Bay, which people in the 1980s once thought would cease pumping oil in 30 years, looks to be good for another 50 years.

The WSJ describes another method BP uses: “flooding reservoirs with polymers that expand like popcorn when they come into contact with hot rocks, thus flushing more oil out of difficult-to-reach nooks.”

The name of that polymer is BrightWater. One company has a patent on this material and makes it for a profit. That company is Nalco Holding (NLC:NYSE), a company I recommended several months ago to the subscribers of Capital & Crisis. BP uses BrightWater in Argentina and Pakistan. “BP says the additional oil the new technology will produce over the next 20 years is roughly equivalent to finding a major new field,” reports the WSJ.

“Nalco,” you say, “but isn’t Nalco is one of the world’s largest water purification companies for industrial companies?” This is what we mean by energy-water nexus. The two are related. And Nalco sits right in the middle of that nexus.

Last year, Nalco’s energy services segment was a bright spot. Sales grew 17% organically for the year. In the fourth quarter, sales were up 23% despite the steep oil price decline. In that segment is Nalco’s enhanced oil recovery (EOR) business.

CEO Erik Fyrwald commented on this business in a quarterly conference call. “We are in with a lot of oil companies explaining and talking to them about it,” he says. “We believe as oil prices come back up, [EOR will be a] really big growth opportunity, just delayed for a period of time.”

The delay stems from the fact that many oil companies slashed their exploration and production budgets last year, when oil and gas prices were falling. But it seems inevitable that as the big oil reservoirs dwindle, the EOR business will be big down the road. Of course, EOR is only one of the many valuable things Nalco does in the energy-water nexus. It is no wonder why Warren Buffett’s Berkshire Hathaway is the biggest shareholder.

Nalco is a long-term buy.

Regards,

Chris Mayer,
for The Daily Reckoning

When the market rallies it is generally on the back of a falling dollar. Remember it is not proportionate, however, it is reactionary. Therefore, regardless if the dollar is negative or positive on the day the market will catch a bid if the dollar declines regardless of where it is trading at the time.

Bearish warnings for DOW / SP500 / EURO daily charts continue.

Bullish warnings for the USD index / VIX index / USDCAD / USDCHF on the daily charts continue.

More updates later.

http://twitter.com/GrandSupercycle

leadimage

11/17/09 London, England – Gold hit a new record yesterday. The price rose $22.50 to $1,139.

And today we take up a foul and disagreeable task. We ask ourselves: what if we are wrong?

If you bought gold when we first recommended it, ten years ago, you are in a very comfortable position. Gold sells for more than 4 times as much today. But what should you do now? And what if you didn’t go for broke on gold in the early ’00s? Is it too late to get in on the bull market?

To give you a warning, in the following windy ambulation we come to no conclusion we haven’t come to before. We say gold is going to the moon. If we are wrong about when…we will be delighted sooner than expected…self-satisfied…and insufferable for years. If we are right, we may have to wait a long time before saying “I told you so.”

First, the press has certainly noticed the bull market in gold. How could it not? Most reporters say gold is going up simply because the dollar is going down. In the popular press, we found no other explanation. In fact, much of the notice of gold seems to occur within articles about the dollar. We found, for example, that the dollar is at a 15 month low…and, coincidentally, gold has just hit an all-time high.

There’s something lopsided about this account of things. If the yellow metal has hit a record high, how come the dollar is down for only 15 months and not since the Flood? Makes you wonder if the dollar isn’t the whole story.

Elsewhere, we find that the dollar is trading at $1.49 per euro. Wait a minute. We remember the dollar at the exact same level…was it a year ago…more…? And it’s been at that same level, more or less, all the while gold has gone up more than 10%.

It’s not the fall of the dollar that is driving the gold market, in other words, it’s something else…it’s the fall of ALL paper currencies. For when the dollar goes down, so do the rest of them – more or less. No nation wants its currency to rise too much against the greenback. Americans are still the world’s biggest spenders. They spend dollars…not rubles…not euros…not zloties. A nation whose currency rises against the dollar is in a competitively weaker position. Its costs – in local currency – go up while its sales – in dollars – go down (it has to charge higher prices). Typically, central banks buy up dollars with money created for that purpose…thus increasing their own money supply and thus decreasing the value of their own local currencies relative to the dollar.

Since all the world’s central banks, more or less, are doing this, all paper currencies are going down together – compared to gold.

But wait, wouldn’t they be going down together against everything else too? If currencies are getting weaker…shouldn’t they be getting weaker against oil…and McDonalds’ hamburgers…and woolen underwear? The oil price is at $78 – where it’s been stuck for a while. Oil is a special case, but almost all consumer prices are stuck too. Take out energy and food, and consumer prices are deflating in the US. Put back in the energy and food and they’re just stuck. There is no sign of generalized consumer inflation – not in the USA and not in Europe either.

The only thing that is going up is gold. There is a bull market in gold and gold alone. But why?

According to the law of supply and demand, you expect the price of a thing to fall when its supply increases faster than the demand for it. In today’s news are two reports on gold production. One, from South Africa, tells that a scientist says the nation’s residual gold in-the-ground is much less than expected. It has been overstated by 900%, he says. Another report shows the output of from the gold mining industry clearly topping out. Gold supply, in other words, is increasing, but not as fast as it used to.

The supply of paper money, on the other hand, needs no new discoveries. Since there have been huge increases in the monetary base of paper money all over the world, it is reasonable to expect the price of paper money to go down. Gold, traditionally the thing that paper money is priced in, should go up. Speculators are buying it now in anticipation. Even central banks are buying again. And nearly everyone expects the price to continue going up.

As near as we can tell, gold is properly priced already. Comparisons are rough, but an ounce of it appears to buy about as much stuff as it did 2,000 years ago. You can buy a suit of clothes for an ounce of gold – no problem. Go to Wal-Mart; you can buy 4 suits.

As Roy W. Jastram wrote in his 1977 book, The Golden Constant, gold’s “price has been remarkably similar for centuries at a time. Its purchasing power in the middle of the twentieth century was very nearly the same as in the midst of the seventeenth century.”

Gold…or the people who speculate in it…may be looking ahead. Or, they are dreaming. If gold is already about where it should be why would you pay more? You must expect paper currencies to go down…to buy less stuff. In other words, you’d have to be anticipating a fall-off in the value of the paper currency.

It may come to pass exactly as they imagine it. Gold may rise and rise and rise…as paper currencies fall and fall and fall some more. In that case, we here at The Daily Reckoning headquarters as well as all of our dear readers who followed our advice 10 years ago will be delighted. Gold may hit $1,500 by the end of the year. By the end of next year it may be $3,000. By the year after, well…who knows…? “We told you so,” we will say.

But there is almost always more under Heaven than speculators think. When we look into it, we see gaudy increases in the monetary base…but only very modest increases in M2, the money that buys stuff. What’s more the rate of increase for M2 has fallen in half over the last 8 months. It’s now only about 7% annually in the US. And when we look at the CPI we see no increase at all. And despite the ‘recovery,’ unemployment is still rising and house prices are still falling. So, if speculators see the price of stuff going up in paper currency terms, they must be looking way over our heads.

To more fully describe our own state of mind, we don’t doubt that all the liquidity added to the world’s monetary system will eventually be soaked up by paper currencies. But it could take a long time; we might be dead before it actually happens.

But since we are entertaining the possibility that we might be wrong; let us look at what is going on in more detail. If there were a real recovery – as announced in the world’s newspapers and proclaimed by its stock markets – you’d expect a rising increase in demand…leading to higher prices…leading to a higher gold price.

Yesterday’s news brought word of greater retail spending than anticipated. This was greeted as more evidence that a recovery is actually underway. But upon examination, we discover that the evidence comes almost all from auto sales. We also find that the number crunchers contributed to the lift by revising figures for September. These are month to month movement numbers. So you can raise October’s number simply by lowering the number for September.

What’s more, while sales went up…auto prices actually went down – in paper dollar terms. This doesn’t sound inflationary to us.

Meanwhile, news reports said that fewer people are defaulting on credit card debt. The reports also tell us that delinquencies on credit card debt are up. So, we’d have to call that a draw.

And then there’s the news from GM. The giant, government-owned auto company says it will repay its loans from the feds earlier than expected. But wait…we also find that the company continues to lose money. How then will it repay debt? Perhaps by refinancing!

Other reports are similarly confusing and inconclusive. Profits are up on Wall Street. But wait…sales are down. You can increase profits by cutting expenses (getting rid of employees, mainly). But you can’t increase sales. And as long as sales are falling you have to expect lower profits in the future. (Stock market buyers…take note.)

“With the majority of publicly traded companies done reporting third quarter earnings,” writes 5 editor, Ian Mathias, “the trend is clear: Profits were way better than expected, revenue was flat at best.

“Of what little we recall from freshman year, Finance 101 insists that profit equals revenue minus costs. Thus there really can’t be any questions left as to how the market pulled off this quarter…companies are simply trimming the fat at an incredible clip. Not exactly a long-term plan for growth.”

The New York Times reports that job losses continue to be “deep and enduring.” Mortgage applications are running lower than they were 9 years ago. “More households report food shortages,” says a Wall Street Journal headline. And insiders are still selling their own companies.

So, it still looks to us as if we are in a depression…one that will take many years to sort out. It is unlikely that the bull market in gold will reach its final blow-off top while the depression continues. But stranger things have happened. Eventually, gold will reach the apogee of its bull market. And when it does, we want to be ready for it. We will celebrate with champagne and sparklers.

Still, we wouldn’t get out the party hats…not just yet.

Until tomorrow,

Bill Bonner
The Daily Reckoning

There is very good weather in Saint-Petersburg (Russia) now and a lot of people and some of my colleagues from FBS Company have holydays. But the oil market has no summer vacations. Every day in the oil market happens a thousand of the events. About the events of previous week I would like to write in the Dealbreaker Community.
P.S. I apologise for my long message:)

06/29/2009 Monday
Oil futures ended above $71 a barrel on Monday, rallying after an attack on an oil platform in Nigeria rekindled supply worries. Light, sweet crude for August delivery rose $2,33, or 3,3%, to end at $71,49 a barrel on the New York Mercantile Exchange. Earlier, the contract soared to an intraday high of $72,40 a barrel. Oil prices have rallied 37% over the last three months.
Earlier Monday, the Movement for the Emancipation of the Niger Delta said that it had struck at the Shell Forcados offshore platform in Delta state, the report said. Nigeria is a key exporter of crude. In the currency markets, the dollar was mixed against most other major currencies. The greenback rose against the Japanese yen, while the dollar fell against the euro and the British pound. Dollar weakness typically boosts dollar-denominated commodities such as oil.
Meanwhile, the International Energy Agency revised lower its forecast for global oil demand, but energy traders shrugged it off.
A Japanese news report Monday said China plans to increase its strategic crude-oil reserves by 160% over the next five years.

06/30/2009 Tuesday
Crude-oil futures lowered Tuesday as US data showed faltering consumer confidence and falling home prices, setting back hopes for a recovery and higher oil demand. Despite the loss, oil rallied 41% in the second quarter.
Crude for August delivery fell $1,60, or 2,2%, to end at $69,89 a barrel on the Nymex. Earlier, it had surged as high as $73,38 a barrel, the loftiest level in eight months. Crude rose 5,4% in June, extending its monthly winning streak to five. It has gained 57% in the first half of the year.
A stronger dollar weighed on crude. In the currency market, the dollar strengthened against most of its rivals. Gains for the greenback typically weigh on dollar-denominated commodities such as oil because it makes them more expensive for holders of other currencies.
Also Tuesday on the Nymex, July reformulated gasoline lost 2% to $1,8972 a gallon, while July heating oil fell 3,7% to $1,718 a gallon. The gasoline and heating oil contracts expired on Tuesday.
In Asia, China hiked domestic gasoline prices in announcement late Monday, according to media reports. Retail prices will rise by 8,6% for regular gasoline and by 9,6% for diesel, the reports said. At just over $3 a gallon, Chinese motorists will now pay about one-eighth more for a fill-up than Americans, who were paying an average $2,66 a gallon last week, Reuters reported.

07/01/2009 Wednesday
Oil futures have fallen below $70 a barrel as government data showed crude inventories at a key delivery point rose for the first week in five and gasoline stockpiles increased for a third week. Weak demand pushed up total petroleum product inventories for the 14th consecutive week.
August crude futures fell 2,2%, to $69,89 a barrel on the New York Mercantile Exchange. Oil ended second quarter's trading up 41%, the biggest three-month gain in 19 years.
The Energy Information Administration reported Wednesday that crude oil inventories at Cushing, the delivery point for Nymex crude futures, rose 200,000 barrels to 28,6 million barrels in the week ended June 26, rising for the first week since the week ended May 22.Meanwhile, gasoline inventories increased 2,3 million barrels and distillate stockpiles, which include heating oil and diesel, gained 2.9 million barrels. Gains in both products came bigger than expectations.
The EIA seems to lag the API so we are seeing a drop in crude.
Energy traders also digested a series of economic reports on Wednesday. Companies in the U.S. private sector shed 473,000 jobs in June, according to the ADP employment report released Wednesday. The report comes one day before the Labor Department reports on nonfarm payroll growth for June.
Separately, the pending home sales index rose 0.1% in May after an upwardly revised gain of 7.1% in April, the National Association of Realtors said.
ISM index rose to 44.8% in June from 42.8% in May.

07/02/2009 Thursday
Oil futures tumbled nearly 4% Thursday, reaching their lowest level in one month and posting their third weekly loss in a row, as a disappointing jobs report rekindled concerns over when a recovery may begin to take hold.
The Labor Department said Thursday that nonfarm payrolls shrank by 467,000 in June, a bigger drop than the decline of 325,000 expected by economists. Also weighing on crude prices, the dollar strengthened against most of its rivals. The Labor Department report also showed the unemployment rate ticked higher to 9.5% in June, the highest since August 1983.
August crude futures dropped $2.58, or 3.7%, to settle at $66.73 a barrel on the New York Mercantile Exchange, the lowest closing level for a front-month contract since June 3.
Futures lost 3.5% this week. Trading is closed Friday in observance of the Independence Day holiday.
The Energy Information Administration reported Wednesday that total U.S. petroleum-product inventories rose for the 14th consecutive week as demand remained weak.
The EIA data also showed total crude inventories excluding those in the Strategic Petroleum Reserve marked a decline. The inventories, however, still stood above the upper boundary of the average range for this time of year, according to the agency.
On the fundamentals level, high levels of inventories, low demand and sufficient supply continue to point to lower prices.

07/03/2009
Independence Day holiday in U.S.
So, following the results of a week from June, 23th till July, 3rd 2009, oil quotations have decreased in comparison with the last week. Brent price have fallen to $65,6 per barrel, the decrease for a week has made 4,8%. WTI price has fallen to 3,5% to $66,73 per barrel. We feel crude is due for a correction in the coming weeks.