After The Noise

After The Noise Takes a Vacation

AfterTheNoise@gmail.com (AfterTheNoise.com) — Tue, 14 Apr 2009 22:22:00 +0000

China Life Insurance Co. LTD (LFC) was recommended to me in an email I received a few days ago. I'm always willing to look. When I do, often I am mystified as to why a "buy" is suggested after a nice run up.

After The Noise traders can see the opportunity here. It happened at about the $43 level. Within the "noise" archives you'll find dozens of graphic examples of this simple trading method. The idea is to take a small risk under specific circumstances when a stop-loss can be set at an appropriate level. If you got in now, where would you put the stop?

Maybe LFC will pull back to the moving average lines. Maybe...maybe...under those circumstances...maybe a trade will make itself known.

NO VACATION FOR KNOWLEDGE...

All my trading e-books are available here at this site. And you are welcome to the "free" intro ebooks. Just email me with your request.

But it is time for me to take an AfterTheNoise vacation. Other projects now demand my full attention, such as....

http://www.thelakethatstolechildren.blogspot.com/

and

www.daniellesbeacon.blogspot.com

Please visit those sites. Many thanks for your interest in my work and these simple techniques. Contact me by email if you have questions.

Evil Knieval Takes a Leap with Dow Jones Chart

AfterTheNoise@gmail.com (AfterTheNoise.com) — Tue, 31 Mar 2009 14:28:00 +0000

Jim Sinclair at www.jsmineset.com offered this view of the Dow Jones rally. His point: Bear market rallies have nowhere to go but down if no uptick rule is put in place.

The uptick rule so necessary in the stock market does not exist in the mini-Dow Jones futures market. For this reason, it is relatively easy to trade up or down, whenever a trader sees a signal to get in.

It is never too late to learn something about the mini-Dow Jones futures market, which offers flexibility and leverage. To learn why this is an important part of your trading arsenal, email me to receive your FREE REPORT: How to Ride the Mini-Dow Jones Up or Down.

Do it before Knieval goes Kaput.

China and the U.S. Treasury Bond

AfterTheNoise@gmail.com (AfterTheNoise.com) — Tue, 24 Mar 2009 16:24:00 +0000

What does this man have to do with the U.S. Treasury bond chart below? Zhou Xiaochuan, above, is the governor of the People's Bank of China. In an essay released this week, Zhou has suggested that it is time to develop a new currency that would replace the late but great king of all currencies -- the U.S. dollar -- as the global standard. The proposal includes revamping the world's financial structure. Such a revision would, Zhous said, help dampen the growing discontent among developing nations, who are weary of U.S. dollar dominance.

China, Japan and other nations, such as Great Britain, buy enormous sums of U.S. Treasury bonds. This buoys our economy as it puts money in our government coffers. If these buyers become sellers of bonds, we'll see bond prices fall hard.

A scary thought. But there is a solution. Average American's can learn to trade Put options in the U.S. Treasury futures market. Those options will grow as the price of bonds fall.

The techniques are not difficult to understand, but there is always risk. Past performance does not necessarily indicate future gains.

Even so, some option can be purchased for a few hundred dollars, not thousands. My free ebook How to Beat Hyperinflation Before it Beats You is an excellent introduction..

Will John Q Take The Hint? Pain = Gain

AfterTheNoise@gmail.com (AfterTheNoise.com) — Tue, 10 Mar 2009 19:33:00 +0000

Warren Buffett knows a financial market bubble when he sees one. In the late 1990s he watched red hot internet stocks implode. This decade he witnessed the housing bubble pop. Now the Oracle of Omaha says the ultra safe U.S. Treasury bond market is overpriced and ready to blow. But do you think Main Street America, those good folks who could use a few extra bucks, will listen? Doubtful. This hardworking, fair-minded group wouldn’t know a bubble if it exploded in their faces.

Yet this “for the ages” opportunity could help middle-class homeowners and others burdened with credit card debt hedge against more hardship – and maybe make a profit. They don’t need a lot of money to get in. They don’t need to own U.S. Treasury bonds.

What they need is to learn how to risk – and there is risk – small sums of money buying Put options. And, if they can afford a far more risky venture, they need to learn how to sell U.S. Treasury bond Call options, which will immediately add money to their accounts. Powerful strategies that use both techniques are also worth learning. And you don’t need a degree from the Harvard Business School to understand these methods.

But who is listening? We all know people who bought at the top of the internet stock craze. Last month I read about a smart business woman who launched a real estate business in 2007 – and quickly went bust. She should have known better. Yet right now I wager she and plenty of others are tempted to buy those "triple-A" rated debt instruments known as U.S. Treasury bonds. Backed by the government, by golly, they can’t go wrong.

Oh yes they can. As Mr. Buffett explained in his annual letter to Berkshire Hathaway Inc., shareholders, the yield on t-bonds is next to nothing. That’s because in late 2008 the price of bonds soared as the stock market took a beating. As a result, interest rates fell to near historic lows. But now the U.S. Federal Reserve and Treasury Department are trying to avert financial Armageddon with a stimulus package the size of which boggles beleaguered minds.

In the end, the cure may cause inflation, the well-known enemy of fixed-income instruments like bonds. The pin that bursts the bond bubble may very well be the kind of hyper-inflation that forces interests higher and quickly decreases the value of bonds. But one man’s wipeout may be another man’s windfall. If only John Q. would take the hint: this is the equivalent to that “hot” insider tip you always dream about. The penny stock that explodes upwards. The horse that can’t lose.

But most folks will only moan about the big problems that are out of their control. On one hand, they are right: Nobody on this planet from President Obama to the Oracle of Omaha can insist that a man-made global phenomenon behave itself.

On the other hand, knowledge is power. Learn something new. Nature repeats. Like all bubbles of the past, the bond bubble will eventually burst. You can take that to the bank – if you learn to trade bond options.

Financial Survival is Your Only Option: How to beat the 'street' with options and new knowledge

AfterTheNoise@gmail.com (AfterTheNoise.com) — Sun, 08 Mar 2009 17:17:00 +0000

Learn something new. That is the essence of survival. When pushed to the limit, the hero in many stories must dig deep to discover fresh insights, resources, clues. Only then does he or she save the day.

Save your day – or make your day – by looking inside. Leaning on old reliable skills is valuable, but it may not be enough. Make a list of things that may have helped you avoid a current financial disaster, difficulty or debt load. Master one thing on your list – if you believe it will be useful in the future.

The future is now. It’s not tomorrow or further down the road or in next month’s subscription of your favorite magazine. Actions must be considered and then taken – now. Small things first. Nothing so radical that in months to come it will be seen as hasty or detrimental. But change now, in some way. Don’t wait for change.

Expand your creativity. Consider the opinion of Barrett Prelogar, CEO of Winntech, a Kansas-based marketing group that has earned a non-conformist reputation for encouraging entrepreneurs to think big and take action. In February he attended a conference where he listened to other CEOs discuss massive cutbacks and ways to hunker down until the economy improves. Wrong, wrong, wrong.

“The reaction to a bad economy is to cut costs and save, when in reality that’s the worst thing you can do. For small businesses, all the corporate scriptures and rules do not exist. They should use those freedoms as opportunities. I can be bullish on innovation even if I’m not bullish on the economy.”

Prelogar and the Winntech staff helped launch a new retail clothing chain owned and operated by a former college football player who had no previous retail experience. They did it for a fraction of the cost normally associated with opening a business. They have been cash-flow positive since Day 1 – even though they opened in the dismal fourth quarter of 2008. Name of the store? Plush.

Take a 30 minute vacation. Set aside concerns – no matter how bad they may be – and luxuriate in a half hour of creative thought. Think of it as a mind spa. Clear out the demons, the noise, the negative voices. Relax and listen. When times are tough, ignoring the obvious won’t help. But mental vacations from the turmoil are free. And they are a tried and true survival technique.

Often experts talks about cutting back on spending. Fine, do that. But every time you cut back, write down an idea that might actually bring a little money in. No “get-rich-quick” schemes. We all know that path is bogus. Instead, focus on simple gains. Sell something that is not essential, such as books, CDs, etc., that you no longer use. Someone else will enjoy the bargain, and receiving a few extra dollars can feel great. Remember, you’re not trying to create a windfall. If it happens, great, but the idea is to use what you have for gain. Celebrate each extra dollar.

Finally, learn something new that is money related. Something that does not demand a large expenditure or risk. Yet something that will prove valuable as your new world takes shape.

-- Douglas Glenn Clark

Warren Buffett Says Beware the Bond Bubble

AfterTheNoise@gmail.com (AfterTheNoise.com) — Mon, 02 Mar 2009 15:27:00 +0000

When Warren Buffett speaks, investors and traders listen. The Oracle of Omaha recently revealed his concern about the high price of U.S. Treasury bonds. This "safe haven" has been a popular place to park money as the stock market works out its troubles.

But what goes up must come down. Long-term bond investors may be in for a shock, Buffett says, if interest rates rise and push down bond values.

How can they -- or you, even if you don't own bonds -- benefit from the burst of the bubble? Learn how to risk small sums for big gains in the U.S. T-bond option market. The Only Option Plan explains it all for you.

Warren Buffett wrote:

When the financial history of this decade is written, it will surely speak of the Internet bubble of the late 1990s and the housing bubble of the early 2000s. But the U.S. Treasury bond bubble of late 2008 may be regarded as almost equally extraordinary.

Clinging to cash equivalents or long-term government bonds at present yields is almost certainly a terrible policy if continued for long. Holders of these instruments, of course, have felt increasingly comfortable – in fact, almost smug – in following this policy as financial turmoil has mounted. They regard their judgment confirmed when they hear commentators proclaim “cash is king,” even though that wonderful cash is earning close to nothing and will surely find its purchasing power eroded over time.

Approval, though, is not the goal of investing. In fact, approval is often counter-productive because it sedates the brain and makes it less receptive to new facts or a re-examination of conclusions formed earlier.

Beware the investment activity that produces applause; the great moves are usually greeted by yawns.

The Only Option: Survival

AfterTheNoise@gmail.com (AfterTheNoise.com) — Mon, 02 Mar 2009 02:36:00 +0000

Thank you Jim Sinclair and www.jsmineset.com for the very serious cartoons. They are a reminder of the absurdity of our times.

Survival may seem like a problem that has only one solution -- more money. But we need more than money now. We need new ideas that create a better monetary system. The one we have is seriously compromised and probably broken for good.

When will things get better? Only when we have new goals to move toward. When crisis develop, too often we look back and wish for those good ol' days. In fact, we need to look forward.

If the only option is survival, the only strategy is -- Learn Something New.

Expect More from Gold and Some Gold Stocks

AfterTheNoise@gmail.com (AfterTheNoise.com) — Fri, 20 Feb 2009 23:12:00 +0000

In early February, I pointed out that the Tanzanian Royalty Exploration Corp. (TRE) chart was showing a break out pattern. The chart above shows that price moved a bit lower before breaking out to the upside. Compare this move with the chart below. where moving averages form a triangle. For a reminder of the significance of the formation, visit this link:

http://afterthenoise.blogspot.com/2009/02/tanzanian-royalty-exploration-progress.html

I have charted the progress of TRE since October the price indicated a bottom. The Noise Variation trade signal described in After The Noise took place between $2.00 and $2.25. Since then the stock has nearly doubled in price. For a reminder of how this trade has played out, visit the link below.

http://afterthenoise.blogspot.com/2008/12/santa-bull-for-tan-range-royalty.html

And then look for other gold stocks that showed the same bottoming pattern. Analyze how much price has moved. Then ask yourself: as the economy stumbles and gold continues to serve as a currency, how much higher can gold rise?

China and U.S. Treasury Bonds: Another Relationship on the Brink...

AfterTheNoise@gmail.com (AfterTheNoise.com) — Thu, 19 Feb 2009 02:30:00 +0000

Am I being too obvious? I hope so. Because the truth is, the U.S. Treasury bond futures market cannot defy gravity forever. It has already retraced some of its race to the moon. It may move higher before falling more. But the commentary of Monty Guild, below, once again makes clear which by now should already be clear: the short side of bonds is a trade trend waiting to happen. China knows it. Japan knows it. Do Americans who own homes or debt of any kind know it? Some days I wonder.

This is still yet another Mortgage Liberator alert.

WILL U.S. CREDITORS KEEP BUYING THE MASSIVE OFFERINGS OF U.S. DEBT?

By Monty Guild of Guild Investment

We do not understand what could possibly tempt other countries, who are U.S. creditors, to continue buying U.S. debt. Perhaps it is the promise of U.S. military security and/or to ensure an end market for the creditor’s export goods. The Japanese are finding out that the U.S. is no longer a reliable end market for their exports. The Chinese have already stated publicly that they have alternatives to U.S. bonds for their huge accumulated reserves, as reported this past weekend:

CBRC Official Says U.S. Bonds Not Only Option, China News Says

By: Judy Chen
Feb. 13 (Bloomberg) — China Banking Regulatory Commission official Luo Ping said holding U.S. government bonds is not the only option for investing reserves, clarifying comments made a day earlier, the China News Service reported.

Home on the Mini-sized Dow Jones Range

AfterTheNoise@gmail.com (AfterTheNoise.com) — Thu, 05 Feb 2009 23:26:00 +0000

This daily chart of the mini-sized Dow Jones futures market reveals the muddle this nation is in as it mulls over a stimulus package that will either make us or break us, which is redundant and scary since the system is already broken.

Let's recap: As the holiday season approached the stock indices appeared that they might be willing to give us a Santa bounce. The blue rectangle shows the divergence between price and the RSI. For After The Noise traders, this was a classic "variation" set up, which was also evident in the S&P.

Price did rise from the low, as expected. But it didn't go very far and therefore didn't break any resistance levels or turn the moving averages upward. Instead it settled into a range.

Can you blame traders? Who knows what will happen next? Who knows if the stimulus package is a stiff that, when approved, will underwhelm the market and send it lower, or a rocket that will ignite new trading and create a bullish environment?

Does anybody really know what time it is? So sang the superlative music group Chicago so many years ago.

Tanzanian Royalty Exploration: Progress Hurdle

AfterTheNoise@gmail.com (AfterTheNoise.com) — Mon, 02 Feb 2009 22:52:00 +0000

The Tanzanian Royalty Exploration Corp. (TRE) chart is forming a triangle. As price squeezes into the nose of this formation, it is forced to decide a direction -- up or down, of course.

But below note how the 200- (red) and 50-day (blue) moving averages are essentially doing the same thing. This excellent gold stock has already made nice gains since our initial posts in late October/early November. It struck the 200 level, fell back to the 50 level and now is at a point where it will either rise -- break through 200 -- or fall -- break down below 50.

The lesson: Moving average lines and trend lines sometimes provide the same information about what price (that is, traders) are up against.

Interest Rates will Rise with Bond Bust

AfterTheNoise@gmail.com (AfterTheNoise.com) — Tue, 27 Jan 2009 01:04:00 +0000

Trader Dan Norcini says U.S. Treasury bond futures are due for a bounce since it began to fall in late 2008. He also notes that without a bounce, bonds face a steep decline because technically there is not way to go -- but down.

What does this portend? Higher interest rates. A very cold shower for any kind of recovery expected by...who?

This Mortgage Liberator alert must not to be dismissed.

Excerpt below from http://www.jsmineset.com/

"Bonds dropped yet again today – Gee – what a surprise! Seriously, this market is so overdue for a bounce but the fact that it cannot even seem to hold its gains for more than an hour is quite revealing. Bonds must bounce soon or they are setting up for a major technical collapse. On the technical charts there really is not much support until we get down to the 123^20 – 124^00 level. That is also near the 100 day moving average. Failure there and we are going to see long term interest rates shoot sharply higher; something which the Fed does not want to see with housing still in such a tenuous condition."

-- Dan Norcini

Tanzanian Royalty Corp (TRE) & After The Noise Teach Technical Trading Lessons

AfterTheNoise@gmail.com (AfterTheNoise.com) — Sun, 18 Jan 2009 23:28:00 +0000

So many trading lessons can be learned by dedicated yourself to one market...and sometimes one stock.

Let's recap: A couple months ago I began to chart Tanzanian Royalty Corp. (TRE) because gold stocks had been battered and the chart began forming an After The Noise trading setup. For proof that simple techniques can work, use the link below to review previous posts.

http://afterthenoise.blogspot.com/2008/12/santa-bull-for-tan-range-royalty.html

As was expected, after a nice run up TRE retraced it's upward move. Also, as expected, it challenged the 50-day Moving Average. Price has since bounced off the 50-day MA, but that doesn't necessarily mean the pull back is over. For more upward movement we need the MA and MACD to move up. The MACD histogram has already begun changing direction, and sometimes such a change is a precursor to price moves.

In short, this stock has already proved profitable for those traders who saw the basic NOISE VARIATION setup and decided to take the risk. "Risk" is the operative word. There is always risk.

The Bubble of the Century! (So far)

AfterTheNoise@gmail.com (AfterTheNoise.com) — Tue, 13 Jan 2009 20:17:00 +0000

When looking for opportunity, you need look no further than the U.S. Treasury bond futures market. Here at After The Noise, we like extremes because generally they portend change.

This week the U.S. Dollar is enjoying a bullish surge. Realistically, how long can this last? George Harrison once sang, All Things Must Pass. Especially market bubbles.

Timing is always the biggest challenge when attempting to exploit market transitions. Don't worry about catching every dollar of the move down. Simply stay tuned and be ready to harness at least a portion of the downtrend, which whenever it occurs may be the beginning of a long ugly fall.

Consider this an ongoing Mortgage Liberator Alert!

"The bond bubble is an accident waiting to happen The bond vigilantes slumber. As the greatest sovereign bond bubble of all time rolls into 2009, investors are clinging to an implausible assumption that China and Japan will provide enough capital to keep the happy game going for ever. "

Ambrose Evans-Pritchard

Last Updated: 12:22PM GMT

12 Jan 2009

They are betting too that debt deflation will overwhelm the effects of near-zero interest rates across the G10 and nullify a £2,000bn fiscal blast in the US, China, Japan, Britain, and Europe.
Above all, they are betting that the Federal Reserve chief Ben Bernanke will fail to print enough banknotes to inflate the US money supply, despite his avowed intent to do so.

Yields on 10-year US Treasuries have fallen to 2.4pc – a level that was unseen even in the Great Depression. This is "return-free risk", said bond guru Jim Grant.

It is much the same story across the world. Yields are 1.3pc in Japan, 3.02pc in Germany, 3.13pc in Britain, 3.26pc in Chile, 3.47pc in France, and 5.56pc in Brazil.

More…

2009: Swim or Sink Like a Stone

AfterTheNoise@gmail.com (AfterTheNoise.com) — Thu, 01 Jan 2009 00:48:00 +0000

Is it possible to have a prosperous 2009? Despite the financial disaster the globe experienced this year, the new year will no doubt bring speculative opportunities that may offer respite from turbulent times.

Monty Guild of http://www.guildinvestment.com/ offers some predictions and guidance in his end of the year market commentary.

Market Commentary From Monty Guild

Posted: Dec 31 2008
By: Monty Guild

OUR OUTLOOK FOR 2009

A) The U.S. dollar will decline in 2009. This is a lynchpin for several investments.

B) Precious metals and grain commodities have bottomed. These are priced in dollars…as the dollar declines their prices will rise.

The above predictions are strongly held views. The next prediction depends upon events that are still unfolding, therefore we are waiting to establish the timing for this prediction.

C) Many stock markets will bottom in 2009, due to the fact that they have become very cheap. We will watch them and gauge their attractiveness based upon a number of fundamental and technical variables. We believe that when the bottoms do occur, they will be followed by rallies, which will carry many markets much higher. We do not believe that the time has arrived for most markets, but some markets may soon be ready for purchase. We plan to keep our readers updated on our views about the proper time to buy.

A) WHY THE U.S. DOLLAR WILL DECLINE IN 2009

We have been pointing out in our recent letters that a huge increase in the supply of U.S. bonds is necessary to finance the U.S. budget deficits, the bail out of world banking system, and president elect Obama’s plan to create jobs for three million people within two years. If the dollar weakens as we predict, foreign currency bonds denominated in strong currencies will be good investments.

Argument 1: THE U.S. NEEDS TO ATTRACT BUYERS FOR THEIR BONDS.
To attract buyers for the huge supply of bonds, the U.S. will have to either cut the value of the dollar, or raise the interest rates the bonds pay. Because the Federal Reserve and Treasury Department’s plan to bailout the banking system relies on low interest rates, rates will stay low. Thus, the U.S. dollar will again be under pressure.

Argument 2: THE CHINESE ARE SENDING A STRONG SIGNAL …THEY BELIEVE THAT THE U.S. DOLLAR WILL DECLINE.
Recently, we have been hearing general disbelief in the future value of the U.S. dollar from China, the holder of the largest amount of U.S. bonds (and the expected buyer for most of the new bonds to be sold). In recent weeks, several key Chinese officials have made negative comments about the U.S. dollar.

The first official comments were that China will not make new investments in U.S. banks, because they wanted to spend the money on growth within China. A second senior official said that the U.S. should not get complacent, and continue to believe that dollar would stay high just because it had been rising for a few months.

The third comment was made this past week in Hong Kong’s largest newspaper, the South China Morning Post. It was made by Chinese Central Bank governor Zhou Ziaochuan. He said, "The U.S. dollar is unlikely to be stable next year and later…and the likelihood of the United States issuing more money in the near future adds to the depreciation risk in the U.S.-dollar-denominated assets and trade settlement."

This is typical Chinese behavior. They repeat the message in different media through different senior officials. China obviously believes that the recent rally in the U.S. dollar will not continue, probably because they will be buying less U.S. dollar debt. I believe all investors should face the fact that China, who has been the largest buyer of U.S. debt, will be buying less of it in the future. If they do buy U.S. debt, they will want a cheaper dollar before making any commitment. This adds strength to our view that the U.S. dollar will fall in 2009.

Argument 3. RESTARTING THE ECONOMY IN THE U.S. WILL STRESS
THE U.S. BUDGET FURTHER
A suggestion for President elect Obama: If you want your program of revitalization to have quicker effects…employ tax cuts. Cuts in withholding taxes will immediately stimulate economic growth. Of course, tax cuts will mean more bonds will have to be floated to cover budget deficits, but many new bonds are being floated anyway. In our opinion, tax cuts will work better.

Business will recover more quickly, and people will get more productive jobs.
Although infrastructure projects would fill a national need, they have historically been slow to effect economic growth. Much of Japan’s "lost decade" of stagnant economic growth (which really lasted over 13 years), has been blamed on placing too much dependence on infrastructure projects to stimulate the economy.

By our estimation, it will take at least three years to employ three million people with steady paychecks. It will probably take one year just to identify and begin implementing the truly good projects, and to avoid the useless projects proposed by local officials. It could take two additional years to plan and ramp up employment for those projects that are approved. Every state, county, and city will have their own pet projects. Each must be vetted to avoid pork barrel projects such as building golf courses, and local swimming pools, instead of roads, schools, energy infrastructure, and information superhighways.

B) PRECIOUS METALS AND GRAINS HAVE BOTTOMED IN PRICE
PRECIOUS METALS
Precious metals provide some security in periods of war, economic hardship, and financial folly. Currently, all three are part of the landscape. · War: Israel, Palestine, Iraq, Pakistan, Afghanistan, maybe Iran, and…India? · Economic Hardship: Currently, we are experiencing the worst economy since the Great Depression in the developed world. · Financial Folly: Here are a few candidates; the banking system collapse, the mortgage loan scandals, the mortgage derivatives crisis…we could go on and on.

In addition, the U.S. dollar will weaken, which raises the price of gold in U.S. dollar terms even if the gold remains constant in price against other currencies. Gold acts as a currency.

GRAINS-The world’s growing population needs to eat, and grain stockpiles are low. Expected global grain production will be moderate this year, and grain stockpiles will be even lower in a few months. Grains are also priced in U.S. dollars and will benefit as the dollar falls in buying power.

C) STOCKS ARE GETTING CHEAPER ALL OVER THE GLOBE
The long bear market that global stocks have been experiencing, have made them much cheaper and more attractive for long term investment. Based solely on current valuation, many are good values. However, the backdrop of a weak world banking system, and a severe global economic slowdown makes judging value and timing purchases more difficult.

We must be sure that companies and countries have adequate capital and access to liquidity to continue to finance their ongoing activities. The managements of the companies must be capable of operating in a challenging environment, and their products or services must have visible and enduring markets. Fundamental economic variables, technical, and psychological variables will also enter into the valuation/timing question. Some opportunities will be identified; we will wait patiently and review the evidence frequently.

In our opinion, 2009 could be regarded by history as a wonderful time to buy, certainly the psychology of fear today is the same psychology found at all major market bottoms. We plan to continue our active portfolio management style; looking for and evaluating opportunities, investing when we find acceptable reward/risk, and managing the portfolios’ exposure.
Guild Investment Management is a service business. We encourage our readers to contact us if you have questions about your investment portfolio, we will be happy to perform a portfolio evaluation for you at no cost.

Thanks for listening.
Monty Guild and Tony Danaher

Will Inflation Be in Your 2009 Christmas Stocking? Or the money you can make...

AfterTheNoise@gmail.com (AfterTheNoise.com) — Wed, 24 Dec 2008 00:10:00 +0000

Monty Guild is forever in the Holiday spirit. He's the gift that keeps giving -- financial market insights.

His inflation missive is posted in full at http://www.jsmineset.com/

A Mortgage Liberator Alert: Why do I keep digging for inflation news? The U.S. Treasury bond futures market is a bubble. When that bubble finally bursts a short sell will be in play and an important trend change will have occurred. Option strategies are a great way to be in position before the deluge.

_________________________________________________

According to the US Treasury/Federal Reserve Board, as of September 2008 US government debt was held by the following countries.

The biggest three owners of US Treasury bonds are:

1. China - $585 billion
2. Japan - $573 Billion
3. United Kingdom - $338 billion

In this light the announcement that was made today in the English language official organ of the Communist party, the China Daily, is particularly thought provoking. "China’s increased purchase of US Treasury securities should not be interpreted as an endorsement of the assumption that the US can borrow its way out of the current financial crisis…”

This follows an announcement made about 2 weeks ago by the head of China’s sovereign wealth fund to the effect that the current high value for the US dollar might not continue.

Perhaps the Chinese are sending a warning that might be attended to.

Your pal,
Monty Guild

Santa Bull for Tan Range Royalty Exploration Corp! A Merry Little Christmas for Stock Traders

AfterTheNoise@gmail.com (AfterTheNoise.com) — Sat, 20 Dec 2008 23:06:00 +0000

On December 10th After The Noise reported that the Noise Variation trade alert on Tan Range Royalty Exploration Corp., (TRE) was moving our way. At the time, price had broken through the 50-Day Moving Average. I suggested that the next target was the 200-Day Moving Average. As you can see from the chart above, price hit that price level on Thursday December 18th.

For a reminder of past posts on TRE, view the following link.

http://afterthenoise.blogspot.com/2008/12/tan-range-royalty-exploration-corp-on.html

Much has been made of a possible Santa rally for the stock market. Some say the latest scandal -- the Bernard L. Madoff bust -- ended those hopes. But not for TRE.

What might this move have meant for you? The signal urged entry somewhere between $2.10 and $2.50. If you entered near the lower end of the range, your gain would have exceeded 90 percent. Let's be modest and say you earned $1.75 per share. That price X (fill in the blank) = ?? Example: $1.75 X 500 shares = $875. Holiday money, if you chose to get out of a nice short term trade.

If you stayed in, what's next? I wouldn't be surprised to see TRE's price settled back down in the $3 range -- or lower to the 50-Day Moving Average. Then we'll need the technical indicators to give us some assurance that price will continue its bullish move.

Other stocks, such as CDE and GSS also enjoyed gains. Both have set back and GSS, in particular, is right back where it started. So it goes with "swing" trading. But this is no time to lose sight of junior gold mining stocks. Expect volatility -- and danger.

This is not a solicitation to trade. I offer the above analysis for educational purposes only on behalf of After The Noise, The Dow Picture Book and The Mortgage Liberator -- all of which teach simple techniques for making money.

U.S. Treasury Bonds Bubble Up

AfterTheNoise@gmail.com (AfterTheNoise.com) — Wed, 17 Dec 2008 20:16:00 +0000

The U.S. Treasury bond blast off is explained to you by Dan Norcini, who is a regular contributor to www.jsmineset.com Do not doubt that t-bonds are now a bubble market. You remember what happened to the housing bubble, the tech stock bubble, etc. All bubbles burst. The question is...when?

"Bonds are moving vertically, a sure sign that a market is in a parabolic blow off run. That market is a giant bubble but only the very brave or very, very quick will be able to get in front of it. When it pops, and it will, great will be its fall. In the meantime, the trend is higher as the many traders are simply buying the long end with flattening trades and could care less how high they push it."

Tan Range Royalty Exploration Corp: On the Rise

AfterTheNoise@gmail.com (AfterTheNoise.com) — Thu, 11 Dec 2008 00:17:00 +0000

Tan Range Royalty Exploration Corp., (TRE) -- an excellent gold royalty company -- is moving up. The link below will take you to previous posts that have covered this trade.

Note where the entry box is located on above chart. Compare to the charts in previous links. This is a Picture Book lesson in the Noise Variation trade.

This not the only stock analyzed here in recent months suggesting a broader use of the After The Noise trading techniques. Search for CDE and SMXMF.

http://afterthenoise.blogspot.com/2008/10/after-noise-variation-strikes-gold-tre.html

Christmas Rally for Dow Jones Traders?

AfterTheNoise@gmail.com (AfterTheNoise.com) — Tue, 09 Dec 2008 19:36:00 +0000

If all you want for Christmas is a rally in the stock market, you might just get what you've asked for. Jim Sinclair offers some historic insight.

Market Commentary From Jim Sinclair
Posted: Dec 09 2008
Post Edited: December 9, 2008 at 1:55 pm

I am in agreement that a study of similar historical periods argues strongly for an equity rally. Those rallies in the past have had one year legs, but in present time we must wait to see.

I am cautious about being bearish on equities right now. Models of 1873 and 1929 show humdingers of a rally during the worst of the world’s depression unrelenting.

The most likely scenario is when Obama starts there will be 2 trillion in fiscal stimulus and that intervention will trigger the $8.5 trillion bailout into the system, starting an inflation few can imagine.

No lender will fail to loan on a government contract that probably guarantees payment.
Over time fiscal stimulus will be famous for only one accomplishment - triggering hyperinflation

Mini-Dow Jones Chart: What's to Like?

AfterTheNoise@gmail.com (AfterTheNoise.com) — Thu, 04 Dec 2008 04:19:00 +0000

Divergence is the answer to the question in the headline. This daily chart only shows part of the picture, but it's worth a look. The drop from 11500 to 7500 looks like it may have bottomed out. Why? As price dropped lower...and lower...the CCI began to move up.

Price has some challenges, though, such as the green trend line, bad economic news, disbelief and god knows what else. But these are the opportunities After The Noise traders like. They have read the "Noise Variation" chapter in my ebook. They know that if you can find a trade with a small $$ risk -- the use of a stop-loss is mandatory -- it may be worth taking.

But this is not a solicitation to trade. I offer this for educational purposes only. For more lessons, refer to the posts in November and October wherein I analyzed stocks such as TRE and CDE. You'll find a similar formation in those issues.

Is Mass Mania Wrong? IN- vs. DE-flation

AfterTheNoise@gmail.com (AfterTheNoise.com) — Tue, 02 Dec 2008 20:35:00 +0000

Dan Norcini at www.jsmineset.com shares some interesting thoughts about the spike in the U.S. Treasury futures prices. An excerpt is included below.

Meanwhile, Agora Financial's The Rude Awakening newsletter offers this fetching headline: Beat The Rush; Sell Treasury Bonds Now. In short, Eric J. Fry suggests that the rush for DE-flation protection may actually be a good reason to get ready for IN-flation. See an excerpt below.

These two reports constitute another A Mortgage Liberator alert!

Hourly Action In Gold From Trader Dan Posted: Dec 02 2008
By: Dan Norcini Post Edited: December 2, 2008 at 2:59 pm
Filed under: Trader Dan Norcini

Incidentally, if you have not looked at a price chart of the long bond recently, do yourself a favor and do so. I was still sucking milk through a bottle the last time yields were this low. I would not be the least bit surprised, and this is the cynic in me, to learn that a good portion of the bond buying in the futures pits is actually front-running using bailout money to get into position for the Fed to begin buying across the yield curve to keep interest rates low. How else to explain the insane rush into US Treasuries in the face of nearly unlimited creation of US debt and collapsing yields? Since there is ZERO accountability for the use of this bailout money, what is to keep the recipients from using it to try to once again leverage it up for a “sure bet”? Answer – nothing! These are the same people who would sell those worthless alphabet soup structured investment securities to their own grandmothers if they thought that they could make a quick buck from it. Do not be under any illusions as to what these conscience-deprived cretins are capable of.

Eric J. Fry, from The Rude Awakening:

But is deflation such an utter certainty that investors should be scooping up 10-year Treasury bonds that yield a near-record-low 3.11%? To rephrase the question, is inflation such impossibility that investors should be unloading 10-year TIPs (Treasury Inflation Protected) that currently yield 2.40%, but could produce a vastly greater return if inflation heats up?

We ask these questions, not because we believe a deflationary episode is unlikely, but rather, because we do not believe that an inflationary episode is impossible. Investors in long-dated Treasury securities seem to have convinced themselves that inflation has been "deep-sixed," not just for the next two or three years, but for the next 10 to 20 years as well.

The cost of taking the other side of that trade has never been cheaper.

Boing! U.S. Treasury Bonds Bounce - for now

AfterTheNoise@gmail.com (AfterTheNoise.com) — Tue, 02 Dec 2008 01:21:00 +0000

Is 20-20 hindsight of any use? The double bottom, above, in U.S. Treasury bonds has proved -- again -- to be a valuable precursor to short- and long-term trend changes. A runaway bond futures market may have seemed unlikely in October, given that a bond top seemed to be in. But that's the beauty of technical analysis, if you're willing to believe what the signals suggest.

Today, price broke through a triangle formation. What does the future hold? Let's look at a second chart.

The U.S. Treasury bond chart above shows a price explosion that has widened the Bollinger Bands technical indicator. How long can this "open mouth" sustain? Also, please note that the 20-day moving average (the green line) is near the price breakout point. Price doesn't like to stray too far from this MA.

Also, as price continues higher, interest rates shrink. Can we go to zero? On the front page of Sunday's Los Angeles Times, the headline reads: "BAILOUT: PAY NOW, WORRY LATER: The economic strategy of immense spending may sow the seeds of higher interest rates and soaring inflation."

Such a condition will undoubtedly send bonds much lower. But in a climate where bonds -- the so-called safe haven -- understandably move opposite a strong stock downturn, traders seeking a short position must remain cautious.

A conservative strategy for positioning early for the downside move would employ the use of Put option spreads. Chapters 8 and 9 in A Mortgage Liberator Guidebook.

After The Noise Stocks: Master One Method

AfterTheNoise@gmail.com (AfterTheNoise.com) — Sat, 22 Nov 2008 18:33:00 +0000

Last month I began to expand the range of the After The Noise trading method by analyzing a few gold mining stocks. Curiously, several of these charts -- in a sector that has been badly beaten down in recent months -- showed the beginnings of the Noise Variation formation, which is fully revealed in my e-book, After The Noise: How to daytrade mini-Dow Jones and U.S. Treasury bond futures.

One example, Tan Range Royalty Exploration Corp., (TRE) -- an excellent gold royalty company -- is moving up and is well worth watching. Previous blog posts can be found at the link below.

http://afterthenoise.blogspot.com/2008/11/tre-dow-jones-fall-cant-stop-gold.html

The chart above shows another stock that may be setting up. Coeur D Alene Mines Corp., (CDE) climbed to the $7 area in 2006 before moving sideways at a lower price. In early 2008, the stock began a steep fall from the $5 price range. Why the steep fall in so many gold mining stocks. I'll let Jim Sinclair explain it all to you at http://www.jsmineset.com/

For our purposes, the Noise Variation trade relies on divergence between price formation and MACD, a technical indicator. The tough part of this particular formation is that traders must act quickly. I remind you that this technique is a powerful futures daytrading method that can deliver a quick entry -- and exit. Applying it to a stock and presumably a long-range trade strategy means traders might want to back up their decisions with a little fundamental data. In this case, gold is destined to go higher, therefor some gold mining stocks -- but not all -- may also go higher.

CDE's first challenge is to break up the 50-day moving average -- the line that is descending to the $1 area -- a 100 % gain at these price levels. If it can move above that line, next we want it to move above the 200-day moving average, which is near the $2.60 area -- and a 500% gain without even reaching its previous highs.

PANIC: Dow Jones Drop Sees Flight to Bonds

AfterTheNoise@gmail.com (AfterTheNoise.com) — Thu, 20 Nov 2008 22:31:00 +0000

A nearly six point move in the U.S. Treasury bond futures market is a testiment to just how worried stock investors are. Despite low interest rates, even more money flowed to safety -- a so-called sure thing -- and forced rates to historic lows. My, my, my...

Treasury Yields Drop to Record Lows as Recession Concern Rises
By Daniel Kruger and Dakin Campbell

Nov. 20 (Bloomberg) -- Treasury yields tumbled to record lows, with two-year notes dropping below 1 percent for the first time, as global stocks slumped and a deepening recession drove investors to the safest assets.

Yields on two-, five- and 10-year notes and 30-year bonds dropped to the least since the Treasury began regular issuance of the securities as reports showed U.S. jobless claims surged and a drop in manufacturing. U.S. lawmakers postponed voting on a plan to rescue the auto industry, sending the Standard & Poor’s 500 Index to the lowest level in 11 years.

“It’s the continued meltdown of the financial system, lack of action by Washington,” said Gary Pollack, who helps oversee $12 billion as head of fixed-income trading at Deutsche Bank AG’s Private Wealth Management unit in New York. “There’s no white knight coming to save us.”

The benchmark 10-year yield dropped 31 basis points to 3.02 percent at 4:48 p.m. in New York, according to BGCantor Market Data. The 3.75 percent security due November 2018 rose 2 22/32, or $26.88 per $1,000 face amount, to 106 1/32. The yield is the lowest since at least 1962. The yield on the 2-year note fell 9 basis points to 0.97 percent.

The 30-year yield tumbled 46 basis points to 3.46 percent, the biggest drop on record. The yield is the lowest since regular sales started in 1977. Yields on five-year notes declined to 1.88 percent, not seen since 1954, according to data compiled by Bloomberg and the Fed.

Direct Correlation

The Standard & Poor’s 500 extended its 2008 tumble to 49 percent, poised for the worst annual decline in its 80-year history. The S&P declined 6.7 percent to 752.44.

“It’s a direct correlation with stocks,” said Thomas Roth, head of U.S. government bond trading in New York at Dresdner Kleinwort, one of 17 primary dealers that trade with the Fed. “We are the fear indicator, we are the tail being wagged by the fear in the system.”