Month: November 2013

Weekend Update

November 8, 2013

— VIX has been in a declining trend channel since its 7-year low in March.  Usually, once the cycle low is made, the index usually reverses and begins challenging the prior highs.  In this case, the VIX made two lower highs since March, remaining in the declining trend channel.  This suggests we look for alternate explanations.  The first that comes to mind is that the VIX is ending its trend with a truncated low that should have at least challenged the lower trendline.  The Cycles Model suggests that the decline is finished, also in a truncation.  Perhaps we may see new highs developing now.

SPX still beneath Cycle Top resistance.

— Although SPX had a gain for the week, this is the second week that it closed beneath Weekly Cycle Top resistance and trendline at 1771.24.  Trendline resistance held as the SPX ramped the close to get a positive reading for the week. This behavior will not last.

(ZeroHedge)  It seems like the last 2 days have been a massive NASDAQ-TWTR pairs trade… Today saw broad stock indices best day in a month despite the early “good news is bad news” sell-off as newly minted TWTR heads towards its first bear market threshold off the highs. The Dow managed to get back to a record high close by the end of the day.

NDX appears to be rolling over.

–NDX saved itself from an even greater loss by ramping the close.  The upper trendline of the Broadening Wedge formation appears to be stiff resistance to further advances in NDX.   In fact, it appears that NDX is leading the other domestic equity indices lower since it peaked two weeks ago.

(ZeroHedge)  “People are, once again, being fooled,” fears Bill Fleckenstein in this brief CNBC clip, warning that investors buying into the stock market at all-time highs here are making a grave error. Investors are ignoring fundamentals at their peril, “in the stock mania in 1999, people were bullish because stocks were going up. In 2007, people were bullish because stocks and real estate were going up. They didn’t (look) ask – Why are they going up? Is this sustainable? Is this healthy? – and in both cases, it was not.”

The Euro closed beneath two important supports.

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           — The Euro broke through both weekly Short-term and Intermediate-term supports this week.  It appears to have bounced near its weekly Long-term support at 132.30, but may be trapped by its Intermediate-term resistance at 134.09.  The bounce may be over in very short order, since the Cycles Model suggests the Euro may be due for a significant low in about 4 weeks.

(ZeroHedge)  European monetary policy/monetary conditions are too tight and, Citi’s FX Technical group explains, the EURO is too strong thereby exacerbating the effects of the internal devaluation in Europe (as we noted here). Looser monetary policy and a weaker currency are becoming increasingly necessary conditions for the Eurozone to recover/survive. Thepresent period in the Eurozone, Citi adds, where the financial architecture is coming apart at the seams is not remotely unprecedented and in fact offers a very compelling historical perspective for significant devaluation of the EUR in the years ahead.

The Yen is dropping out of its Triangle formation.

–The Yen rallied once more inside its Triangle formation and closed beneath the Triangle on Friday.  The Cycles Model suggests an imminent sharp decline that may challenge the Head & Shoulders neckline at 96.00. The Yen may shortly resume beneath the neckline in a Cycle Wave V, carrying it to new lows as early as next week.

(The Guardian)  Gazing down at the glassy surface of the spent fuel pool inside the No 4 reactor building at Fukushima Daiichi, it is easy to underestimate the danger posed by the highly toxic contents of its murky depths.

But this lofty, isolated corner of the wrecked nuclear power plant is now the focus of global attention as Japan enters the most critical stage yet in its attempt to clean up after the worst nuclear accident in the country’s history.

The US Dollar breaks above its Falling Wedge.

— USD closed above its Intermediate-term resistance at 81.11 this week.  It has emerged from its Falling Wedge which implies to or above its Wave (D) high at 84.96.  The long-term uptrend has regained the upper hand in a very negative environment.  Dollar shorts are retreating as institutions begin to allocate more toward the Dollar.

(CNBC)  The dollar soared against the euro and yen on Friday after data showing U.S. job growth unexpectedly accelerated in October.  The strong jobs report fed market speculation that the U.S. Federal Reserve could taper its monthly purchases of $85 billion in assets sooner rather than later, particularly after a much better-than-expected U.S. gross domestic product report on Thursday.

Gold has a last support.  Will it hold?

— After breaking through Intermediate-term support at 1322.84 last week, Gold appears to be declining toward its last support – the Cycle Bottom at 1269.51.  A further breakdown next week puts gold in jeopardy of breaking a massive Head & Shoulders neckline just under 1200.00.  The big picture looks very grim for gold.  The near term target is the completion of its Cup with Handle formation near 731.28.  I hope that I am wrong on the lower target.

Treasuries also nearing final suport.

— USB declined through both weekly Short-term and Intermediate-term support this week.  The next levels of support are its Cycle Bottom at 130.54 and its Broadening Wedge trendline just beneath it.  USB has an appointment with an important low possibly during Thanksgiving week.  However, before that happens, there may be a bounce back to retest resistance at 132.39.

(ZeroHedge)  The reaction to the non-farm payrolls report in the US Treasury complex has the bond bears out en masse this morning. A 10-12bps jerk higher in yield is nothing to sneeze at and certainly flushed more than a few uncomfortable longs out – but BofAML’s MacNeil Curry warns “treasury bears beware.” The completing 5 wave advance and confluence of support between 2.738%/2.759% says further yield upside is limited. Don’t be max short into these levels. There should be better levels to sell in the days ahead.

Crude remains beneath mid-Cycle support/resistance.

— Crude ended a very powerful Primary Cycle decline on Tuesday.  We are evaluating to see whether it may rise above its Long-term support/resistance at 98.63.  The Cycles Model suggests that, should it rally above critical support, it may continue to rise into early December.  If so, we could see crude Challenging its Cycle Top at 110.27 by then.  The alternate view suggests a rather lackluster bounce and further decline to the Cycle Bottom at 81.17.

(Reuters) – A 90-car train carrying North Dakota crude derailed and exploded in a rural area of western Alabama early on Friday, leaving 11 cars burning and potentially bolstering the push for tougher regulation of a boom in moving oil by rail.

Twenty of the train’s cars derailed and a number were still on fire on Friday afternoon, local officials said. Those cars, which threw flames 300 feet into the night sky, are being left to burn out, which could take up to 24 hours, according to the train owner, Genesee & Wyoming. No injuries were reported.

China stocks have lost Intermediate-term support.

–The Shanghai Index declined beneath its weekly Intermediate-term support at 2118.99, losing all near-term support.  The Cycles Model suggests the decline may extend to the third week of November.  China stocks are in a Primary Cycle decline, which has the potential of being much stronger than might be expected.

(ZeroHedge)  Earlier in the year we unveiled the most ‘epic’ Chinese over-capacity bubble chart. Of course, China bulls shrugged at such inconvenience as demand and supply imbalance (even as Michael Pettis destroyed many of their hopes and dreams as all that debt – to over-build and over-supply – has to be repaid). Fast forward to today, on the eve of the nation’s Third Plenum, and Chinese leaders are facing the music. As AP reports, leaders have ordered local officials to stop expanding industries such as steel and cement in which supply outstrips demand. The call, via video conference, saw planning officials warn local leaders to stop ignoring orders to reduce overcapacity in industries including steel, cement, aluminum and glass, “Those who still violate discipline will be heavily punished.” One chief engineer exclaimed, “the scale of overcapacity is unprecedented.”

The India Nifty retreats from  its Cycle Top.

— The India Nifty index may be starting a very fast decline to its Cycle Bottom.  It has completed its final reversal and the trigger to activate the Orthodox Broadening Top formation lies at the bottom trendline at 5400.00  It appears that CNXN may be reaching the bottom of this chart as early as the end of November, due to a Primary Cycle decline now underway.

The Bank Index is still gaming the trendline.

— BKX  surprised the shorts again by rallying ton Friday back above its trendline.  Nonetheless, it did not make a new high, so the August 2 high still stands.  However, BKX has an important low to make by the third week of November.  This is a very difficult index to short for many investors.

(ZeroHedge)  In a day full of “shocking” announcements, we just got the latest one. Because it must be truly a shock that none other than Goldman’s Bill Dudley, who also moonlights as head of the New York Fed, is stoically against the break up of America’s systemically critical, massive and 100% untenable FDIC-insured hedge funds, pardon megabanks. Such as Goldman.

(ZeroHedge)  One of the most trumpeted stories justifying the US economic “recovery” is the resurgence in car sales, which have now returned to an annual sales clip almost on par with that from before the great depression. What is conveniently left out of all such stories is what is the funding for these purchases (funnelling through to the top and bottom line of such administration darling companies as GM) comes from. The answer: the sameNINJA loans, with non-existent zero credit rating requirements that allowed anything with a pulse to buy a McMansion during the peak day of the last credit bubble.

(ZeroHedge)  The following chart, from the Balyasny Asset Management Q3 letter to investors, show just that: the magic of hedge fund leverage in the New Normal.

Specifically, it shows that while BAM’s AUM from 2010 until Q3 2013 has increased only modestly (light blue), it is the dark blue bar portion that shows just how much “purchasing power”, i.e., allocation, has been deployed by the fund, thanks to the good graces of its Prime Brokers, who have allowed it expand its leverage from 100% to nearly 500%! Compare this to the peak leverage in the old normal which was roughly half: yes, that was at a time when the so-called credit bubble exploded. It has now doubled.

(ZeroHedge)  During a brief interview on FOX Business, the author of The Age of Deformation (David Stockman) exclaimed “There’s no one in the stock market today except drugged up day-traders and robots… This is utterly irrational,” adding that “we’re in the fourth bubble inflated by the Fed in this century… but now we have the greatest, mother of all bubbles.”

Regards,

Tony

Anthony M. Cherniawski

The Practical Investor, LLC

P.O. Box 129, Holt, MI 48842

www.thepracticalinvestor.com

Office: (517) 699.1554

Fax: (517) 699.1558

Disclaimer: Nothing in this email should be construed as a personal recommendation to buy, hold or sell short any security.  The Practical Investor, LLC (TPI) may provide a status report of certain indexes or their proxies using a proprietary model.  At no time shall a reader be justified in inferring that personal investment advice is intended.  Investing carries certain risks of losses and leveraged products and futures may be especially volatile.  Information provided by TPI is expressed in good faith, but is not guaranteed.  A perfect market service does not exist.  Long-term success in the market demands recognition that error and uncertainty are a part of any effort to assess the probable outcome of any given investment.  Please consult your financial advisor to explain all risks before making any investment decision.  It is not possible to invest in any index.

The use of web-linked articles is meant to be informational in nature.  It is not intended as an endorsement of their content and does not necessarily reflect the opinion of Anthony M. Cherniawski or The Practical Investor, LLC.

By MoneyMorning.com.au

‘Tea. Earl Grey. Hot.‘

When Capital Jean-Luc Picard wants a steaming beverage in his ready room aboard the Starship Enterprise, he just utters those words. The ship’s ‘replicator’ then assembles the necessary atoms – including those for the cup – and produces it, ready for the drinking.

Picard thinks nothing of it – it’s hardly more remarkable to him than a microwave oven is to us today. Just as we now use radio waves to excite atoms and generate heat in our own kitchens (which would have been mind-blowing in the 1950s), his replicator uses some fancy energy technology that is never quite specified in Star Trek: The Next Generation to get atoms to self-assemble into food and drink.

That’s science fiction, but it’s actually not impossible. When you see an industrial 3-D printer working today, with a little poetic license you can glimpse the beginnings of something similar. A bath of liquid resin lies inert, a primordial soup. A laser begins tracing patterns in it, like lightning. Shapes form and emerge from the nutrient bath, conjured as if by magic from nothing.

Okay, poetic license revoked – we’re still a long way from molecular self-assembly, or at least in any useful way. A 3-D printer can only work with one material at a time, and if you want to combine materials you need to have multiple print heads or switch from one to another, like the different colour cartridges in your desktop inkjet printer.

We can only work at a resolution of about 50 micrometers (the thickness of a fine hair), while nature works at a thousand times finer detail, of a few tens of nanometers. And there’s nothing self-assembling about the way a 3-D printer works: it does all the assembling itself, with the brute force of a laser solidifying a powder or liquid resin, or melting plastic and spreading it down in a fine line.

But you get the point. We can imagine something, draw it on a computer, and a machine can make it real. We can push a button and an object will appear (eventually). As Arthur C. Clarke put it, ‘Any sufficiently advanced technology is indistinguishable from magic.‘ This is getting close.

You may think of 3-D printing as bleeding-edge technology today, the stuff of high-end design workshops and geeks. But you may have encountered a 3-D printer already, in ways so prosaic you didn’t even notice.

Take custom dental fittings, such as those that change the alignment of the teeth over months with a series of slightly different mouth guards, each of which shifts the teeth imperceptibly into a new position, in that case, a dental technician scans the current position of your teeth, then software mathematically models all the intermediate positions to the desired endpoint.

Finally, those positions are 3-D printed plastic as a series of mouthguards that you wear, each for two or three weeks, until your teeth are in the new position.

Likewise for the prototypes of practically every gadget you’ve ever bought, and the architectural models for the newer buildings around you. Custom prosthetics are 3-D printed, if you’re lucky enough to have a dentist who can replace a crown in a single sitting, that’s probably 3-D printed (they sprayed with enamel) in the office. Doctors have printed and replaced an entire human jaw from titanium.

Today, you can buy a custom 3-D printed action figure of your World of Warcraft character or your Xbox Live avatar. And if you go to Tokyo, you can have your head scanned and you can buy a photorealistic action figure of yourself (try not to get too creeped out).

Commercial 3-D printing only works with a few dozen types of materials, mostly metals and plastics of various sorts, but more are in the works. Researchers are experimenting with more-exotic materials, from wood pulp to carbon nanotubes, which give a sense of the scope of this technology.

Some 3-D printers can print electrical circuits, making complex electronics from scratch. Yet others print icing onto cupcakes and extrude other liquid foods, including melted chocolate.

At the huge scale, there are already 3-D printers that can make a multi-story building by ‘printing’ concrete. Right now that requires a 3-D printer the size of the building, but it may someday be built into the cement truck itself with a concrete that uses positional awareness to decide where to put down concrete and how much, directly reading and following the architect’s CAD plans.

Meanwhile, researchers are working just as hard at moving in the other direction: 3-D printing at the molecular scale. Today there are ‘bio printers’ that print a layer of a patient’s own cells onto a 3-D-printed ‘scaffold’ of inert material. Once the cells are in place, they can grow into an organ, with bladders and kidneys already demonstrated in the lab. Print with stem cells, and the tissue will form its own blood vessels and internal structure.

Today’s vision for 3-D printing is grand in ambition. Carl Bass, the CEO of Autodesk, one of the leading companies making 3-D authoring CAD software, sees the rise of computer-controlled fabrication as a transformative change on the order of the original mass production. Not only can it change the way traditional consumer goods are made, but 3-D printing can also work on scales as small as biology and as large as houses and bridges.

In an essay he published in the Washington Post, Bass explained what’s so different about this way of making things:

‘The ability to produce a small number high quality items and sell them at reasonable prices is causing an enormous economic disruption. In it, you can see the future of American manufacturing.‘

In a computerized manufacturing process like 3-D printing, complexity and quality come at no cost… A traditional paper printer can print a circle or a copy of the Mona Lisa with equal ease. The same rule applies to a 3-D printer.

From a design perspective, this is revolutionary. It is no longer necessary for the designer to care or know about the manufacturing process, because the computer-controlled machines figure that stuff out for themselves.

The same design can be fabricated in metal, plastic, cardboard, or cake icing (it might not be very useful in all those materials, but it would exist.). ‘We can separate the design of a product from its manufacture for the first time in history, because all of the information necessary to print that object is built into the design.‘ Bass explained.

Even better, as 3-D printers proliferate and become used for small-scale bespoke or custom-made manufacturing, they can provide a more sustainable way of making things. There are little or no transportation costs, because the product is made locally.

There is little or no waste, because you use no more raw material than you need. And because the product is custom-made just for you, you’re more likely to value it and keep it longer. Personalised products are less disposable; you simply care about them more.

Rich Karlgaard, the publisher of Forbes magazine, thinks that 3-D printing ‘could be the transformative technology of the 2015-2025 period.‘ He writes:

‘This has the potential to remake the economics of manufacturing from a large scale industry back to an artisan model of small design shops with access to 3-D printers. In other words, making stuff, real stuff, could move from being a capital intensive industry into something that looks more like art and software. This should favor the American skill set of creativity.‘

But also remember what 3-D printing and any other digital production technique cannot do. They offer no economies of scale. it is no cheaper on a per-unit basis to make a thousand than one. Instead, they offer exactly the opposite advantage: there is no penalty for changing each individual unit or making just a few of a kind.

It is the reverse of mass production, which favours repetition and standardisation. Instead, 3-D printing favours individualisation and customisation. The big win of the digital manufacturing age is that we can have our choice between the two without having to fall back on expensive handcrafting: both mass and custom are now viable automated manufacturing methods.

Chris Anderson
Contributing Writer, Money Morning

(This essay was excerpted from Chris Anderson’s book, Makers: The New Industrial Revolution.)

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EURUSD: Bearish, Faces Further Downside Pressure

EURUSD: A follow through on its previous week decline has left EUR targeting further downside. Support lies at the 1.3300 level with a break turning focus to the 1.3250 level and possibly lower towards the 1.3200 level. We may see the bulls come in here and turn the pair higher but on further decline it will push lower towards the 1.3100 level. Its weekly RSI is bearish and pointing lower supporting this view. Conversely, resistance stands at the 1.3547 level followed by the 1.3650 level where a break will aim at the 1.3710 level. Price hesitation may occur here but if violated EUR will target the 1.3800 level. Further out, resistance stands at the 1.3645 level. All in all, EUR remains biased to the upside.

By fxtechstrategy.com

By The Sizemore Letter

Microsoft ($MSFT) founder Bill Gates made news last month when it was announced that he had made a $155 million investment in Spanish construction company Fomento de Construcciones y Contratas SA (Spain:FCC), taking a 6% stake.

Now, $155 million is a relatively modest sum of money for Bill Gates.  Forbes calculates his net worth at $72 billion.  Still, a move like this gets your attention.  If the world’s wealthiest man (Gates recently re-took that title from Mexico’s Carlos Slim) sees value in a beaten-down market, it’s probably worth exploring.

And Gates isn’t alone.  American private equity firm Apollo Global Management ($APO) recently made a large purchase in the Spanish banking sector.

I’ve been bullish on Spain for a long time now (see “When Spanish Stocks Rally, They Rally Hard,” which I published in February).  I saw a market full of world-class companies with excellent exposure to emerging markets that happened to be deeply depressed due to Spain’s deep recession.

And my position here hasn’t changed; even after the recent rally of nearly 40%, the iShares MSCI Spain ETF ($EWP) sits at barely half its 2007 high.  And Spain’s market has one of the lowest earnings multiples, at 14, and highest dividend yields, at 3.9%, of any developed market.

Spanish stocks have been drifting downward for the past three weeks.  This is normal, healthy correction, and should be expected.  But it’s also a great opportunity to accumulate new shares of your favorite Spanish stocks.

My recommendation?  Buy the entire index.  I recommend buying shares of EWP.  Plan to hold for 6-12 months or for gains of 20-30%.  Use a 15% trailing stop.

Spanish stocks are cheap, and investors are only now starting to warm up to them again.  I believe the bull market is just getting started.  But we should remember, this is Europe, a continent in crisis, and risk management is important.

And on a final note, we just got a major shot in the arm from ECB President “Super Mario” Draghi.  Draghi cut the benchmark rate to just 0.25% and made it clear that “Our monetary-policy stance will remain accommodative for as long as necessary.”  Tapering may be the word de jour on this side of the Atlantic.  But it looks like European stocks will get to enjoy monetary stimulus for the foreseeable future.

This piece first appeared on TraderPlanet.

Charles Lewis Sizemore, CFA, is the chief investment officer of the investment firm Sizemore Capital Management. At time of writing he was long MSFT and EWP.  Click here to receive his FREE 8-part investing series that will not only show you which sectors will soar, but also which stocks will deliver the highest returns. This series starts Nov. 5 and includes a FREE copy of his 2014 Macro Trend Profit Report.

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By Elliott Wave International

Senior Analyst Jeffrey Kennedy is the editor of our Elliott Wave Junctures educational service and is one of our most popular instructors. Jeffrey’s primary analytical method is the Elliott Wave Principle, but he also uses several other technical tools to supplement his analysis. In today’s lesson, Jeffrey shows you how to use candlestick patterns to identify opportunities.

You can apply these methods across any market and any time frame.

If you think you need years of experience to identify a high probability trade setup — you’re wrong.

To prove my point, let’s examine three price charts using only a few popular Japanese Candlestick patterns and a single simple moving average (SMA).

Japanese Candlestick analysis was introduced to the West by Steve Nison. The information contained in a candlestick chart is the same that is contained in an open-high-low-close chart, except that the data is presented differently using “shadows” and “real bodies.”

Moreover, these candlesticks form patterns which are important to traders. If you would like to learn more about candlesticks, I highly recommend the book Japanese Candlestick Charting Techniques by Steve Nison.

How do two tools — candlesticks and a 20-period SMA — identify high probability trade setups?

The answer is simple in that you use the 20-period SMA to identify the trend and then focus your attention on the appropriate candlestick patterns. If the trend is up, as defined by the slope of the 20-period SMA, focus your attention on bullish engulfing patterns, piercing lines and morning stars. If the trend is down, as defined by the slope of the 20-period SMA, focus your attention on bearish engulfing patterns, dark cloud cover patterns and evening stars.

Watch this 4-minute video where I explain more:

Learn How to Apply Some of the Most Powerful Technical Methods to Your TradingGet 10 additional free lessons just like this one to help you learn to apply powerful technical methods to your trading. In this 10-lesson series, EWI analyst Jeffrey Kennedy shows how to use Elliott Wave and supporting methods such as candlesticks, RSI and moving averages to improve your ability to spot and act on opportunities in your charts.Get your 10 free lessons now >>

The currency market has seen an explosive growth in the last decade. Some estimates place it at over 5 trillion dollars traded every day, which makes forex the largest and most liquid market in the world. Known as foreign exchange, FX, and Forex, the currency market was traditionally unavailable to the non-institutional trader. However, this is no longer the case. Currency trading is now open to anyone willing to climb the learning curve.

The reasons for its popularity vary from trader to trader, but some of the advantages include 24 hour trading, high leverage, no commissions, and no restrictions preventing traders from shorting any currency. Additionally, the Forex market is global, and it regularly makes significant moves throughout the 24 hour cycle.

Leverage

Leverage in Forex is much higher than in other, more traditional markets. Rather than trading with a ratio of 1:1 (one to one) or even 10:1, the FX market offers leverage up to 500:1 leverage. Thus, with $1,000 investment you actually control $500,000. This makes it easier to capitalize on smaller moves, and intensifies the profit (and loss) in a larger move.

Trades executed 24 hours a day

A 24 hour trading day is attractive to many people. The market moves in three distinct phases as different regions open and close. New York usually sees the largest moves, but the London and Tokyo sessions also experience significant price fluctuations. Trading your choice of currencies at your preferred time of day means a great deal of flexibility. There is no need for those on the West Coast to be at the trading station at 6:00 O’clock in the morning – not any more. A trader may profit from the euro, yen, or dollar, at any time of the day or night, and in any market direction, up, down, or even sideways.

Liquidity

The massive liquidity of forex means you will never experience a delay when executing a trade. Traders do not have to wait for an up-tic before shorting a currency. No restrictions exist; regardless of market direction it is always possible to short any currency.  Unlike equities or futures, with forex you will never have trouble buying or selling any position. You will never have to hold when you would rather sell.

Associated costs:

No commissions are paid on currency trades. The brokers make money on bid-ask spreads rather than commissions. This fact makes it less expensive to transition in and out of multiple positions. This is especially important for short-term traders such as day traders. Spreads differ from broker to broker, so be sure to check this small cost, as well as the potential for any slippage. Some market makers today offer guaranteed quotes, so even slippage can be eliminated – almost always. There are extreme periods of volatility that make it unavoidable, but this is rare.

ECN-type (Electronic communications Network) brokers are becoming popular, allowing access to the biggest of the big players. There are benefits as well as disadvantages to using an ECN that are worth investigating. For example, you may pay commissions on every trade with an ECN, but you benefit from very tight spreads. At times of high volatility the bid-ask spread is sometimes widened, but this is no different from typical retail market makers, and it’s an understandable practice. The ECN uses a more ethical approach to another important dilemma: Most brokers take the opposite side of your trade, which seems to be a conflict of interest. Although justified as a means to facilitate liquidity, this looks like a bet against the customer. It presents some serious ethical issues that are absent when trading through an ECN.

Although trading in national currencies was once the exclusive domain of large banks and institutions, this has changed forever. Regardless of your trading style, the forex market offers unique advantages over other markets. From your home office, the beach, or in Mexico City, with an internet connection you are now in complete control of your financial destiny, and able to compete with other traders, big and small alike. Whether trading full-time for a living or part-time as a hobby, you should find out what advantages forex holds for you.

To learn more please visit www.clmforex.com

Disclaimer: Trading of foreign exchange contracts, contracts for difference, derivatives and other investment products which are leveraged, can carry a high level of risk. These products may not be suitable for all investors. It is possible to lose more than your initial investment. All funds committed should be risk capital. Past performance is not necessarily indicative of future results. A Product Disclosure Statement (PDS) is available from the company website.. Please read and consider the PDS before making any decision to trade Core Liquidity Markets’ products. The risks must be understood prior to trading. Core Liquidity Markets refers to Core Liquidity Markets Pty Ltd. Core Liquidity Markets is an Australian company which is registered with ASIC, ACN 164 994 049. Core Liquidity Markets is an authorized representative of Direct FX Trading Pty Ltd (AFSL) Number 305539, which is the authorizing Licensee and Principal.

By MoneyMorning.com.au

Natural resource veteran Rick Rule was in town last week and declared 800 of Australia’s mining companies mostly garbage.

That’s a pretty big call, but probably right. 

We trust his judgement. If you’re unfamiliar with his name, Rick Rule has been investing in natural resources for over forty years.

He spoke for free to a select group of Port Phillip Publishing subscribers. Suffice to say, he’s seen the same cycles play out over and over again.

But don’t be misled by our opening comment. He sees plenty of opportunity in Australian resource stocks. Some of the news this week would suggest he’s right. He doesn’t appear to be alone, either…

Major Companies Still Interested in Australia

One reason the Aussie dollar appears to be holding up better than expected is that there is still foreign investment money flowing into Australia.

That’s bucking a global trend of declining foreign investment, according to a new OECD report. From all accounts, this is mostly resource related in the case of Australia.

You might remember a few weeks ago we mentioned some of the international energy majors showing interest in Australia’s oil and gas sector.

The trend is holding. Take this from the Australian this week:

‘The nation’s shale and other unconventional gas plays are drawing growing international interest as horizontal drilling and hydraulic fracturing techniques that turned a US gas shortage into a glut are starting to be employed to a greater extent.  Gas prices in Australia, where LNG-led demand is surging on the east coast and where the west coast has long had high prices, are also an attraction, contrasting with depressed US prices.’

This is the move Dan Denning has been hunting with great success over at The Denning Report. He still sees plenty of opportunity in this sector too. You can see why here.

Dan has his subscribers in some of the smaller energy stocks on the Australian market. Part of his strategy has always been the assumption they could become a juicy takeover target to an energy major. The big guys need to replace production by adding reserves.

To get an idea of how lucrative takeovers can prove to be, you only need to check out the share price rise of Warrnambool Cheese and Butter, from around $4 to over $8 thanks to a bidding war. If you’d managed to ride the whole wave up so far, you’d be sitting on an over-100% gain.

Granted, it’s pretty hard in circumstances like that to know when to bank your gain, but you get the idea.  

We Bet You Didn’t Expect This Five Months Ago

Mind you, not every investor is a fan of taking a position in a company on the prospect of it becoming a takeover target.

Kris Sayce over at Australian Small-Cap Investigator isn’t usually, especially if the company isn’t yet profitable. 

He prefers to invest on the fundamentals, and if a takeover offer comes along, take that as a bonus.

But Kris is still interested in resource stocks. Generally, they’re beaten down in price and investors aren’t interested, on the assumption that commodity prices are going to fall.

But the iron ore miners reminded us all how profitable resource shares can be if you get in at the right time and the market doesn’t move as everyone expects.

The price of iron ore, for example, has stayed up. Result?

The Australian reported that Mount Gibson Iron is up 111%, Arrium 93% and Fortescue Metals Group is up 92%, all since June 30 of this year.

Now there’s a suggestion the oncoming Chinese winter could drive iron ore back over $US140.

But Kris isn’t talking about iron ore. That rally has probably made its move for now anyway.

However it is interesting that Xiong Weiping, the chairman of the big Chinese mining company Chinalco, forecast this week that Chinese commodity demand will outstrip its economic growth in the next few years.

He’s hardly an independent voice, but notable because he emphasises that China’s industrialisation is far from over. That’s the same point Tom Miller makes in the book we mentioned last week, China’s Urban Billion.

Rick Rule broadly made a similar point about Asia in his presentation.

That’s good news for investors if you can identify the growth industries in China. And one of those is bound to be in dealing with the level of pollution.

From reports, this is one of the big sources of public anger in China. It lowers quality of life, affects the Chinese tourism industry and is so bad it causes respiratory deaths and diseases.

China needs to cut down on the level of emissions. A big part of that will be reducing its reliance on coal. Another will be reforming the automobile market.

But the car makers are already moving.

That’s where Kris Sayce says he’s found an edge for Aussie investors. You can check it out here.

Callum Newman+
Editor, Money Weekend

From the Port Phillip Publishing Library

Special Report: Read This or Retire Poor

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By MoneyMorning.com.au

TECHNOLOGY:
3D Printing Just Blew My Mind…Again

I’ve just spent two days making my way through the 3D Print Show in London. It’s something I’ve been looking forward to since I packed up home (and the cat) in Melbourne just a few short months ago.

As soon as I stepped through the doors at the Islington Business Design Centre the impact this new technology is having became obvious.

3D printing is amazing.  It’s the only way to describe it. Until you see it in action with your own eyes you can’t really understand its potential.

3D printing will effectively change the very fabric of business across the world. It will reshape manufacturing, impact fashion and the arts and change consumer products. But the most bizarre way in which 3D printing will change the world is in medicine.

One of the most mind-blowing experiences I had in the last six months was when I printed my first 3D model on our UP! Mini 3D printer.

Then this Thursday I saw something even more amazing. I saw a 3D printed face (see below) that was as realistic as a person’s face. I had to check it wasn’t an illusion. And got so close to it, I thought it was going to talk to me.

Click to enlarge

Once I’d picked my jaw up off the floor, the reality of what I was looking at set in. It absolutely blew my mind. And it confirmed this was no fly-by-night industry. I was indeed looking at the beginning of a new industrial revolution.

The fact we can now 3D scan and print such detail is staggering.

That’s why I’m certain 3D printing is set to have as big an impact on the world as the personal computer has.

Because this technology isn’t about just printing off scale replicas of the Eiffel Tower. It’s about making the world better.

It could be through 3D printed prosthetics. It could be through new, inspiring pieces of art. It may even be inspiring younger generations to become ‘makers’.

Whichever way you look at it, this new industry in its own right is set to change the world.

Some of the 3D printers on display were the Ultimaker, MakerBot, Cube X and UP Mini (the same one we have in our Melbourne office). But there were more. I saw at least a dozen different kinds of 3D printer. And then there’s the range of 3D modeling software companies. And the 3D scanners…there’s a lot more to this industry than just the printers.

It’s clear to see is this industry is rapidly expanding. At each part of the supply chain are young, exciting companies poised to profit from it all.

Some of these companies are private. Some are investable on the stock market. Some will be pivotal to the expansion of the industry. And some that I saw today probably won’t be around in 12 months time.

Investors need to sort the good from the bad, and they need to know which companies are going to last. Because with an industry Credit Suisse predict will grow to over $12 billion by 2020, there’s a lot of money to be made investing in the right ones.

ENERGY:
Is the Future in Driverless Cars or Driverless Pods?

There’s been a number of big announcements in technology over the last 12 months. None more so unnerving for some than driverless cars.

Mercedes Benz’s latest S-Class is jam packed with driver assistance technologies. Mercedes said they could have made the thing drive itself. But understandably the world isn’t quite ready for it yet.

Tesla’s CEO Elon Musk has said a world with auto-cars is a future we will have to get used to. And Nissan is furiously working away at getting a fully autonomous car on the road by 2020. Of course you can’t forget Google’s ongoing testing of their driverless cars too.

But it’s the UK that seems to be making steps forward when it comes to driverless cars.

Since 2011 you’ve been able to travel between the Heathrow Terminal 5 business car park and Terminal 5 via the Heathrow POD. POD is a driverless electric car system that shuttles people around the airport. It’s safe, efficient and fantastic for the environment.

In May this year, as part of Heathrow’s five-year business plan, the airport announced an expansion of the POD project. The new expansion will operate from Terminal 2 and 3. The longer terms plans are to run over 400 PODs to nearby hotels.

But it’s not just Heathrow Airport investing in driverless, electric personal transportation. The city of Milton Keynes is now getting in on the act.

Milton Keynes is about 45 miles northwest of London. Although a nice place, the only major draw card of Milton Keynes until now has been as the home of the Red Bull Racing F1 Team. But now there’s something else to get excited about.

By 2015 Milton Keynes will have 100 driverless, electric pods running around the city. They will connect the main train station, office parks and shopping centres.

Although linking only a few locations to begin with, the potential of this technology is amazing.

In Milton Keynes’ future owning a car will be for the ‘traditionalists’. Imagine being able to call up a pod from your house, waiting less than five minutes, and being on your way to the shops quickly, safely and efficiently.

As I’ve said before, when you have an entire system of driverless cars, or pods in this case, the system becomes completely safe. Eliminating the human element in driving means safer road travel for all.

Projects like the one at Heathrow and Milton Keynes continue to prove their potential. And as they prove that this system works, I don’t believe it will be too long before we see a pod system launching in a major city like London or even Melbourne.

HEALTH:
Sensors to Monitor Your World

Every day you carry between seven to eleven different sensors. They exist in devices like your watch, your laptop and obviously your smartphone.

The most commonly known sensor is GPS. It determines where you are in this big world thanks to a bunch of satellites in space. Other common sensors include the accelerometer, gyroscope, temperature and (thanks to Apple) fingerprint reader.

And as we move forward in our connected world you’ll find more sensors in every new device you get. You’ll also find new sensors such as blood pressure sensors, skin temperature sensors and brainwave sensors.

You may have heard of the FitBit Flex, Nike Fuel Band SE, Jawbone Up and Adidas MiCoach. These are examples of devices that you can get today that are pushing the boundaries of sensors to monitor your health.

As sensors get smaller and more integrated into devices, the next question is at what stage do they become a part of our physiology? That’s to say when do sensors become biosensors?

Well for some crazy experimenters biosensors are a reality right now. Just this week a man implanted a horrifically large sensor in his forearm. The sensor is roughly the size of a large smartphone. And yes it uncomfortably creates a smartphone shaped lump in his forearm.

The sensor links wirelessly to his computer and monitors everything biologically. It can even warn him when he’s about to get the flu.

Now of course this didn’t receive medical approval. That means a doctor did not perform the implant. A ‘body modification’ specialist performed the operation. I won’t show you a photo but if you Google ‘sensor forearm’ you can find it for yourself.

As grotesque as this looks and sounds, it’s a big leap forward. As long as they’re not harming anyone and all parties are doing this consensually, then you’ve got to admire their bravery. It’s crude, and is a bit ‘horror-movie’. But it’s a clear indication that technology in the power of individuals can allow for remarkable achievements.

I don’t condone illegal medical experimentation. But with willing participants and the right moral circumstances, who are we to get in the way of experimentation like this?

Either way you look at it, biosensors will eventually become a way of everyday life. Not likely in the way just described. But smaller, less intrusive and used in a way that helps us all live longer, healthier and happier lives.

Sam Volkering
Technology Analyst, Revolutionary Tech Investor

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By The Sizemore Letter

I appeared on CNBC’s Capital Connection in Singapore this morning to discuss the Twitter IPO.

Suffice it to say, at 45 times trailing earnings, Twitter is highly speculative at current prices.  Could it go higher?  Abolutely.  But investors are pricing in a massive surge of revenue growth that may or may not materialize.  This is a speculation for your “play money” that you can afford to lose.  It is most certainly not appropriate for your retirement nest egg.

Twitter is at the cutting edge of a media revolution.  It’s all very exciting.  But their business model is still untested and hasn’t turned a profit.

Should you invest in Twitter?  If you want to be a part of its media revolution, go for it.  But again, go into the trade with the right mindset.  This is a speculative trade in which you could make a fortune…or just as easily lose half your capital or more.  It’s not a prudent investment.

Charles Lewis Sizemore, CFA, is the chief investment officer of the investment firm Sizemore Capital Management. Click here to receive his FREE 8-part investing series that will not only show you which sectors will soar, but also which stocks will deliver the highest returns. This series starts Nov. 5 and includes a FREE copy of his 2014 Macro Trend Profit Report.

This article first appeared on Sizemore Insights as Sizemore on CNBC: “Buy Twitter With Your Play Money, Not Your Real Money”

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London Gold Market Report
from Adrian Ash
BullionVault
Fri 8 Nov 08:50 EST

The PRICE of GOLD slumped $20 per ounce in 10 minutes Friday lunchtime in London, as the Dollar rose after much stronger than expected US jobs data.

 Non-farm payrolls added 204,000 jobs net in October, the Bureau for Labor Statistics said, beating analysts’ lowest prediction in a year of 125,000.

 Dropping 2.5% from last Friday’s finish, Dollar gold hit its lowest London Fix since 16th October at $1285.50 per ounce.

 Silver also fell to a 3-week low, and also traded 2.5% down for the week, at $21.35 by mid-afternoon.

 “The bar [was] set low,” said a commodities note from Standard Bank just before the jobs data.

 “If the outcome is better than consensus, we would expect gold, and other precious metals, to come under pressure.”

 World stock markets extended the day’s drop, as did commodities.

 German Bunds and other European debt prices fell, while US Treasury bonds fell so fast the annual yield offered by 10-year debt jumped 13 basis points to 2.73%.

 That’s the highest level in 7 weeks, since just before the US central bank surprised the markets by choosing not to “taper” the Fed’s quantitative easing of $85 billion per month in asset purchases.

 “Clearly the $1350 [level] didn’t want to hold” in gold, says one London market-maker’s trading desk in a note, reviewing recent action. “[Because] miners got busy selling production forward up there.”

 Australian gold miner St.Barbara said yesterday it has sold forward 7.5 tonnes of future production at a price of $1390 per ounce.

 Small West-African producer Amara Mining this week sold 20% of its shares to a wealth management investor.

 This year’s slump in prices will start to dent the rise in world mining output from 2015, said a report this week from consultants MetalsFocus.

 “With this [forward selling] in mind,” that London trading desk’s note goes on, “we can’t really think gold will spike easily through $1350”, which it now sees as a key level.

 “Only longer-term holders shall be enticed to buy more gold while it’s cheap. [But] at some point gold will catch up, strongly.”

 Meantime, “Gold faces downside risk in the near term,” says a technical analysis from Barclays Capital.

 “Although a small bid unfolds when priced in Euros, resistance near €1000 per ounce is a tough barrier.”

 Gold prices for Euro investors also fell on Friday’s US jobs data, but less dramatically with a 1.3% drop.

 One day after the European Central Bank cut its key lending rate to a new record low of 0.25%, the International Monetary Fund today urged newest Eurozone member Slovenia to recapitalize its banking sector “immediately”.

 Credit ratings agency Standard & Poor’s meantime cut its long-term rating on France’s sovereign debt from AA+ to AA, pointing to high unemployment and weak reforms by the government.

Further ahead, “Janet Yellen’s confirmation hearings [for the top job at the US Federal Reserve] are likely the next key event [to] have a direct impact on gold,” reckons a note from Swiss investment bank and London bullion market-makers Credit Suisse.

“Given the market’s image of her as an uber-dove [favoring low rates and more QE] she is more likely than not to come across less dovish than expected during her testimony.”

Adrian Ash

BullionVault

Gold price chart, no delay | Buy gold online

Adrian Ash is head of research at BullionVault, the secure, low-cost gold and silver market for private investors online, where you can fully allocated bullion already vaulted in your choice of London, New York, Singapore, Toronto or Zurich for just 0.5% commission.

(c) BullionVault 2013

Please Note: This article is to inform your thinking, not lead it. Only you can decide the best place for your money, and any decision you make will put your money at risk. Information or data included here may have already been overtaken by events – and must be verified elsewhere – should you choose to act on it.