The dollar is moving the markets. A 2% surge in the Dow may look like good news, yet it is only a matter of time until the foundation breaks and it all comes crumbling down.

By Andrew Snyder, TodaysFinancialNews.com

Baltimore – (TFN): Do not be fooled by a market that rallies on a weakening dollar. The law of conservation of energy proves all is not well.

If you remember your high school physics classes, you are familiar with the concept, or at least you once were. It is the law that says a total amount of energy remains constant in a closed system.

While the global financial system is not entirely closed, it is close enough for our analysis, especially given the market action these days.

Instead of waxing and waning on future income stream possibilities, many stocks are moving in correlation with the rising and falling dollar. Because the fluctuations are based on currency exchanges instead of changes in actual worth or value, we can look at the situation no differently than those silver, swinging balls on any executive’s desk.

One ball moves another.

The dollar weakens, the Dow moves to capture the change.

Yesterday’s big move in the equities market was not due to word of a sudden new spurt in consumer spending, banking liquidity, rising interest rates or even predictions of new growth.

It came because the dollar, the true indicator of America’s economic superiority, made a massive decline. Companies that export their goods or services will see a top-line benefit, but at what cost?

The conservation of energy says when one “mass” goes up, another must go down in equal proportion.

While so many investors are turning bullish because of the increased revenue potential at the nation’s exporters, it is important to remember we import far more than we export. The difference was $677 billion in 2008.

Turning it around

There is no doubt in my mind the markets have overdone their exuberance, considering the dollar’s decline.

A greatly weakened dollar will be detrimental to the nation’s financial health. It may not be obvious today or tomorrow, but give it time and the problems will begin stacking up.

Granted, a stock market that is focused on an inflationary economy will rise, but not nearly fast enough to eliminate the great pain caused as the price of everything rises.

But besides the usual inflation debate, a government that supports a weakening dollar, especially one that depends on foreigners buying its debt, opens itself to a host of dilemmas.

The first is obvious. Who wants to lend anybody money, if they are going to get less money in return? If the dollar continues to weaken at its current clip, we will be paying China back in worthless dollars in no time.

Once China gets spooked, hold onto your hats. The downward spiral will start.

And what about all of those foreign companies that want to set up shop in the States and take advantage of our technology and well-educated workforce. A weak dollar makes a move financially crippling.

Here’s my point. An equities market that soars solely on a dwindling dollar is far from good news. It does not signal growth or security. It is a sign that major trouble is brewing.

Diversify internationally before it is too late.Similar Posts:

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• GrenTech: China does it again – August 14, 2009

Article first published on Today's Financial News

An irrational market’s dangerous celebration

Finally, the world’s experts are confirming what I have been shouting for months. Natural gas prices are way too high.

By Andrew Snyder, TodaysFinancialNews.com

Baltimore – (TFN): Two years ago, most investors said this would never happen. Even twelve months ago it looked improbable. But today it has happened and it should change the way you look at the energy markets.

For nearly two months, I have been troubled by the situation brewing in the nation’s natural gas industry. Too much supply and not enough demand has created a recipe for disaster.

But most investors disagreed.

How many times have I heard the talking heads state that if oil prices are rising, natural gas prices must rise as well? It has been a common investing theme for as long as I remember. For the most part, it worked.

Until now.

Thanks to massive gains in drilling efficiency and technology, the United States now has more natural gas at its pumping disposal than ever before.

According to reports out of the International Energy Agency (IEA) this morning, it is going to create great downward pressure on future natural gas prices.

As supply eclipses demand, prices will plummet.

I told you so

Across the globe, the IEA believes power generation and industrial natural gas demand will drop 3%. It will bounce back next year, increasing by an average of 2.5% from 2010 to 2015, but supply is still expected to outpace demand until late next decade.

Yes, next decade.

With massive amounts of natural gas flooding domestic markets, falling prices are the most obvious variable in the equation. What many investors are not looking at is the recent preparations for natural gas imports.

Remember, just a few years ago the markets were expecting a strong natural gas shortage here in the States. They quickly developed and implemented plans to create massive LNG offloading and storage terminals.

Now, they are hard pressed to find any LNG shipper that can deliver a boatload of gas at today’s prices. It is far cheaper to pump natural gas from Ohio, West Virginia or Pennsylvania than it is to top off a tanker in Kuwait, ship it across a couple of oceans and unload along the Texas coast.

That is not good news for the nation’s LNG import business, which was just getting started.

Going the wrong way

One company I have been watching quite closely is Cheniere Energy (AMEX:LNG). The $116 million company is developing LNG terminals on Louisiana’s Sabine Pass.

Instead of telling you my opinion of this speculative play, I will give you the market’s opinion.

It isn’t good.

Since March, when shares of most everything doubled in value, Cheniere’s share price fell from $5.00 to just $2.06 at the moment. Almost every day, the price is going lower and lower.

Thanks to word like we got from the IEA the trend is not likely to end anytime sooner.

That is phenomenal news for TFN Strategic Trader subscribers. I made them aware of the situation almost a month ago and advised them to buy a very specific set of puts.

Since then, the value of those puts has risen by over 30% and is about to go even higher as the underlying shares are down by nearly 2.5% so far today.

If you think those gains are nice, how would you like to bank gains of 342%? That’s how high another set of calls have climbed since I warned about the natural gas industry’s impending doom.

This trend is just getting started. In fact, I believe we won’t see the real action until mid-January, when the market finally realizes it made a massive mistake.

If you want to get in on the action, read my exclusive report here.Similar Posts:

• Gas pain: The International Energy Agency weighs in – November 5, 2009
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• National Fuel Gas: A different way to play natural gas – August 27, 2009
• Natural gas industry braces for impact – October 7, 2009
• A chart worth studying: Natural gas vs. crude prices – August 28, 2009

Article first published on Today's Financial News

342% gains from natural gas implosion

In today’s TFN eNews:

* Silver’s up again

* Beggar thy neighbor

* The drop hight has just been elevated

Dear TFN eNews reader,

Silver futures for December delivery rose 32 cents, or 1.8%, to $17.695 an ounce. Earlier, the price reached $17.78, a two-week high.

Silver Wheaton Corp. (NYSE:SLW) announced today that it would hold its Q3 results conference call tomorrow, November 10, 2009 at 11 AM. Share prices went up over 5%, to a 52-week high of $14.92!

(Wonder what kind of results they’re announcing…)

This was an especially welcome sign after the past two weeks: You were able to buy the stock at $11.93 as late as October 28! Hot Stock Confidential members who used thepast month to scoop up shares at lower levels are sitting on short-term gains of up to 25%, just in the past two weeks.

Our official gain on this stock is now around 52% over our initial entry price. And even though there may be some small sell-off after any results announcement, I intend to hold on to it for a while.

(HSC’s other remaining sterling silver play was clocking in at 11% gains since Oct. 15. Here, too, the October market dip created an excellent opportunity to buy on the cheap. For more information, look no further than here: http://www.todaysfinancialnews.com/HSC/ridic/WHSCK904.html)

*** Commodities kept on climbing as the dollar kept on slipping. This will not change any time soon: Congress and the White House are pursuing an agenda that is fundamentally opposed to a rising dollar: A combination of “beggar thyself” and “beggar thy neighbor”.

Despite the emission of concerned noises about budget deficits, the Administration’s rosiest projections translate into enormous inflationary pressure, which currently is held in check only by the deflationary powers of the global economy and the currency peg between the Chinese yuan and the U.S. dollar.

The lower the dollar, the cheaper and more competitive become Chinese imports to countries with stronger currencies. In turn, this feathers Beijing’s nest, allowing the Chinese to stimulate domestic consumption and resource hoarding.

Meanwhile, the fundamental sources of support for many commodities shave been pushed far above what can be supported by fundamentals alone, with speculation and capital flows now in firm control of pricing.

So far, this bubble has been working out well, especially for gold, precious metals, and commodities investing.

But there is the ever-present danger, that an extraneous event could trigger another crisis. For years, my chips have been on a popping of the Chinese debt bubble to trigger a mega-crash. In my book Hot Trading Secrets (written in 2005), I predicted this collapse for the summer of 2009.

Obviously, I was wrong… but not necessarily off-target: For the last year, Beijing has been given out loans to a degree that would make subprime mortgage brokers look like Calvinist clerics!

The drop height for China has been multiplied over that of 2005!

***Clandestine signal sets stage for triple resource opportunity:

Lock in 256%, 678% even 1,894%  gains as a secret hedge fund swings for the fences… and misses! The markets have got it all wrong and I will prove it. Read on…

http://www.todaysfinancialnews.com/TST/GAS/ETSTKA03.html

*** Quote of the Day:

“The projected cumulative deficit for the next 10 years is now $9 trillion, having just been revised upwards by $2 trillion. Perhaps it is because these sums are incomprehensible that Americans are no longer shocked by them: but someone will have to pay. There is no sign of the budget going into the black in any of the next 10 years: the projection for 2019 is still that it will be 4 per cent of gross domestic product (it is between 11 and 12 per cent now). The health care plans, were they to be enacted, would make this dire situation even worse. They can be funded only by higher taxes, which is no doubt fair if everyone wants such a system, but far from everyone does. And, as I have written in relation to our benighted economy, the growth that might ease the problem will only be depressed by higher taxes.”

– Simon Heffer, Telegraph.co.uk

Recommended Reading:

Life is a highway, a Chinese highway

Natural Gas Prices: “Stealth Buyer” tips his hand

Today’s Top 3 Penny Stocks

Today’s Top 3 Financial News Stories:

Breitbart.com – Gold price hits record high as dollar wanes “Gold prices hit a record above 1,100 dollars on Monday with the dollar weakening after a pledge by G20 countries to keep economic recovery pumped up with easy money. In morning trading here, gold struck an all-time peak of 1,109.50 dollars an ounce as the euro rose to 1.50 dollars for the first time in two weeks.”

MoneyNews.com — Prechter: 2008 Crash Just A Warm-Up “Elliott Wave analyst Robert Prechter says the rally is over and predicts the start of ‘another wave of the bear market,’ similar to the one investors experienced in 2008. ‘I don’t think we’ve hit the V bottom yet,’ Prechter told CNBC.”

Bloomberg.com — U.S. Joblessness May Reach 13 Percent, Rosenberg Says “The U.S. unemployment rate may rise to a post-World War II high of 13 percent in the aftermath of the recession, said David Rosenberg, chief economist at Gluskin Sheff & Associates Inc. in Toronto.”

Cordially yours,

J. Christoph Amberger

Executive Publisher, TodaysFinancialNews.com

Article first published on Today's Financial News

This silver stock’s soaring today!

In August of 2008, Horacio Marquez of Money Morning recommended Berkshire Hathaway as a ‘Buy’ for his readers. Today he revisits this pick and the implications of the 50 to 1 split for investors.

Horacio Marquez, Money Morning:
I emphasized that Berkshire should be a core, long-term holding in investors’ portfolios and not a stock to trade in and out off. Today, the stock is about 11% above the price that it finished 2008 at.

This recommendation was issued three weeks before Lehman Brothers’ Sept. 15 bankruptcy filing. I knew at the time that there was a possibility that Lehman would go bankrupt and that the market would retreat, but I felt that the huge amount of cash on Berkshire’s books would provide it with countless opportunities to pick up quality assets at bargain prices should that happen.

“Under Buffett, Berkshire Hathaway is a like an astute and disciplined kid in a candy store,” I wrote.

Read the rest of the story at Money Morning.
Similar Posts:

• TFN Strategy Soundboard: What kind of stocks should you buy now? – May 20, 2009
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Article first published on Today's Financial News

The Buffet Strategy – building value for investors and markets

Alex Green, Chief Investment Strategist at Investment U looks at the value of long-term investment planning.

Jeremy Grantham, president of investment management firm GMO LLC, has been getting a lot of press lately.

At the market’s top, he warned of an impending bear market. At the bottom in March, he forecast a historic rally. Today, he says the market is 25% overvalued.

Should you be worried? Perhaps not.

Let’s start with Grantham’s track record. He’s made a couple of good calls lately. But does he get it right all the time? Of course not. No one does.

But even if he’s right, it wouldn’t necessarily be negative. It all depends on your time horizon. Here’s why…

How Long-Term Investors Can Benefit From A Bear Market

If you own stocks on margin, call options, or LEAP options, a market downturn could be devastating. A 50% decline in the value of a fully margined account would erase your equity. Your options could expire worthless.

Who benefits from a bear market? The obvious answer is short sellers and put option buyers.

But others benefit, too. Primarily long-term investors.

A new study by T. Rowe Price shows that those who began systematically investing in equities in severe bear markets made out “significantly better” than investors who began in bull markets.

Take 1929, for example, the year that kicked off the Great Depression…

From 1929 to 1938 – one of the worst 10-year periods in history – the S&P 500 returned minus 0.9% annually.
Yet if you began investing $500 a month in 1929 and kept it up for 30 years, your total return was 960%.
If you did the same thing starting in 1970 – the start of one of the other worst decades in market history – you’d have fared even better: up 1,753%.
These investors did more than twice as well as those who invested the same way at the beginning of the go-go 1980s and 1990s.

What can we take from this?

Continue reading this article at Investment U.
Similar Posts:

• M&A Tuesday: A day late and lots of dollars short – November 3, 2009

Article first published on Today's Financial News

An overvalued market – not always a bad thing

In today’s TFN eNews:

* Jumping on the TFN bandwagon

* The fourth horseman

* Top China growth play

Dear TFN eNews reader,

The Wall Street Journal today jumped on TFN’s natural gas bandwagon: “Gas production from shales has boomed with new drilling technology that makes it easier to extract gas from dense rock formations. Shale formations, such as the Barnett Shale in Texas, have been largely credited with fueling a surge in domestic gas production. Producers must drill down to the rock, then horizontally through the formation, to break it apart and release the gas trapped within.

“A surge in supplies from these fields and weak demand for the fuel resulting from the economic downturn have contributed to falling natural gas prices.

“Natural gas prices have fallen by more than 60% from their summer 2008 highs above $13 a million British thermal units. Gas supplies, however, have remained abundant. Total gas in U.S. storage for the week ended Oct. 30 stood at an all-time high of 3.788 trillion cubic feet — about 11% above last year’s level and the 12% above the five-year average.”

Andrew had been hinting at just this thing for months: We talked extensively about this in the late summer… and started belaboring the subject right here in the TFN eNews in September.

Three weeks ago, he moved his TFN Strategic Trader into position.

On one of his put options plays, his readers are up by 88% from the official entry price. But despite that gain, he’s maintaining his buy rating on these puts. The shares underlying his second pick were also down today, thanks to dropping natural gas prices and rather anemic quarterly results. TFN Strategic Traders were up over 30% on the play, with stronger gains certainly on the way.

But Andrew was switching the status of his third put play from a buy to a hold: This ETF slid incredibly fast over the past two weeks — down another 3% just today.

“That action has increased the value of our put options by 242%, with more gains likely on the way today,” he wrote today. “While I’m positive we’ll see significantly higher returns, the threat of a quick rebound is growing. If it happens, you’ll get a shot at buying the contracts at reduced prices. Don’t sell yet. But don’t buy any more.”

*** To make up for this status change, he offered a fourth Gas Basher play today: “This is a perfect day to enter the position as shares of the company are up on news of a positive quarterly earnings announcement. Fortunately for us, the good news will not last. The company specializes in natural gas compressors, which are used at gas wells as well as transportation pipelines.

“Of course the company had a decent quarter thanks to the massive Marcellus Shale growth. That’s no surprise. But the growth spurt will be short lived as the industry shoots itself in the foot. You know my thoughts on how the industry is about to plummet, thanks to a glut of production. Next Tuesday, we’ll get confirmation from the International Energy Agency. When it happens, the action will unfold fast.”

Read up on Andy’s main argument right here: http://www.todaysfinancialnews.com/TST/GAS/ETSTKA04.html

*** Protectionism is a reflex inherent in everybody who doesn’t understand free markets and prosperity building. No surprise here: With over 10% of the U.S. workforce now actively seeking work — not counting those who’ve given up –, the Obama White House just imposed another set of strong tariffs on imported Chinese goods.

It’s proof the situation is getting tense. But in this contest, there’s only one side holding four aces. That’s why we say take advantage of the move and buy Chinese!

TFN’s world-wise strategist Andrew Snyder writes: “Washington is getting serious about ‘leveling’ trade with China. Call it a desperate tool to fix our trade imbalance. Or call it bowing to American manufacturers — whoever those may be. Just don’t call it good news for the economy.

“Obama is going to get some mighty weak handshakes when he heads to Asia in a few days. After imposing the largest-ever tariff on imported Chinese pipe (almost 100%), Beijing is far from happy. As our dependence grows on China to fund the nation’s debt, this is not a good time to tick off our most important trading partners.

“Despite tax-relived American middle-class liberals now complaining about ‘taxpayers’ bailing out financial institutions, it’s worth mentioning that the bail-out money did not originate from U.S. tax revenues… but with our foreign lenders!

“Unfortunately, given the relative strength of the Chinese economy, Obama’s latest trade sanction will hurt American more than China. We’ve got unemployment at 10.2%. Their economy is growing by a percentage almost as high.”

So where to put your money?

One suggestion is China Infrastructure Investment Corp. (NASDAQ:CIIC). The tiny, $100 million company is nearly a pure play on the country’s growth potential.

Find out more about this play right here: http://www.todaysfinancialnews.com/international-investing/life-is-a-highway-a-chinese-highway-10298.html

***The 3 Best Stocks under $3 to buy Now!

We expect these new recommendations to bring in gains of perhaps 145%… 55%… 67%. Better yet, I think we can take some of those gains before Christmas. But you have to act immediately! http://www.todaysfinancialnews.com/HSC/ridic/WHSCK902.html

*** Quote of the Day:

“I’m an American, and I’m for prosperity. What creates prosperity is free and competitive markets. That means limited government. And I will speak about that every chance I get.”

– John Stossel, Creators.com

Recommended Reading:

Life is a highway, a Chinese highway

Best Books to Fight H1N1: 5 Great Reads to Beat the Swine Flu

Natural Gas Prices: “Stealth Buyer” tips his hand

Today’s Top 3 Penny Stocks

Today’s Top 3 Financial News Stories:

Finance.Yahoo.com – Jobless rate tops 10 pct. for first time since ‘83 “The 10.2 percent jobless rate for October shows how weak the economy remains even though it is growing. The rising jobless rate could threaten the recovery if it saps consumers’ confidence and makes them more cautious about spending as the holiday season approaches.”

MoneyNews.com — Zuckerman: U.S. On Brink of Deflation Crisis “Inflation typically results from too much money chasing too few goods,” writes Zuckerman in U.S. News & World Report. Today, too much supply is chasing too little demand.”

Bloomberg.com — Gold Advances to Record in New York, London After Jobs Data “Bullion is heading for a ninth consecutive annual gain and approaching $1,100 an ounce for the first time as investors seek to protect their wealth from the threat of inflation and the debasement of the U.S. currency. Payrolls fell by 190,000 workers last month, compared with a 175,000 drop anticipated by the median forecast of economists surveyed by Bloomberg News.”

Cordially yours,

J. Christoph Amberger

Executive Publisher, TodaysFinancialNews.com

Article first published on Today's Financial News

TFN eNews 11/06/2009: Top China growth play?

Obama just imposed another set of strong tariffs on imported Chinese goods. It is proof the situation is getting tense. Take advantage of the move and buy Chinese.

By Andrew Snyder, TodaysFinancialNews.com

Baltimore – (TFN): Washington is getting serious about leveling trade with China. Call it a desperate tool to fix our trade imbalance. Or call it bowing to American manufacturers. Just don’t call it good news for growing trade tensions.

Obama is going to get some mighty weak handshakes when he heads to Asia in a few days. After imposing the largest-ever tariff on imported Chinese pipe (almost 100%), Beijing is far from happy.

As our dependence grows on China to fund the nation’s debt, this is not a good time to tick off our most important trading partners.

Unfortunately, given the relative strength of the Chinese economy, Obama’s latest trade sanction will hurt more Americans than it will Chinese. We’ve got unemployment at 10.2% and they have an economy growing by a percentage almost as high.

Where’d do you want your money?

One Chinese company getting plenty of attention is China Infrastructure Investment Corp. (NASDAQ:CIIC). The tiny, $100 million company is nearly a pure play on the country’s growth potential.

Essentially, CIIC owns a highway, the Pinglin Expressway. In exchange for maintaining and overseeing the operation of the highway, CIIC charges a toll to every vehicle that uses the road.

Last year, the company was able to turn $50 million worth of revenues into $2 million worth of profits, a steep decline from the $12 million in raked in during fiscal ’08.

The loss in profits forced share price to drop from above $5 to just over a buck per share. As I write, investors are getting $1.24 per share, an 11% premium to yesterday’s closing price.

If you are as bullish on China’s growing economy as I am, you will agree this is a great way of playing the company’s increased consumption, travel and shipping trends. In other words, it is as pure of a play on China’s future growth as Warren Buffett’s move to buy Burlington Northern (NYSE:BNI) is a play on America’s growth.

Again, I ask where do you want your money?

I am positive Berkshire Hathaway (NYSE:BRK) would much rather spend $26 billion in overseas economies, but we can all imagine the political backlash if the Oracle of Omaha becomes the Oracle of Beijing.

Buffett’s salary would be the next to be slashed.

There is a bull lose in China. No matter how hard Washington tries, it won’t be able to catch.

I say hop on it and ride the beast as long as you can.

Article first published on Today's Financial News

Life is a highway, a Chinese highway

I am not the only one yelling about the natural gas industry’s impending doom. This week, I’ve got the backing of a major international agency.

By Andrew Snyder, TodaysFinancialNews.com

Baltimore – (TFN): This may be your last chance. As each day passes the pressure on the natural gas market grows larger and larger. Today, there are two major catalysts ready to send the industry into a nosedive.

The first comes from the Energy Information Administration, which tells us the nation’s natural gas inventory has built by another 29 billion cubic feet over the past week. That means the gap between gas in storage and total capacity continues to shrink.

According to today’s figures, there is 3.788 trillion cubic feet in storage, 11.1% higher than this time last year. That figure doesn’t sound like much until you look at the nation’s total storage capacity, which stands at 3.889 trillion cubic feet.

If we continue to add to our coffers at the current rate, we’ll be out of space in less than a month. When it happens, the spot market will be flooded with gas and prices will plummet.

Go short now!

Don’t expect it to be a short-term phenomenon, especially if you agree with the predictions out of the International Energy Agency (IEA).

Next Tuesday, the group will unveil its World Energy Outlook. According to early drafts, the agency is considerably bearish on the future of natural gas, saying we’ve turned the corner from a sellers market to a buyers market.

Just like I am, the IEA is concerned with the massive amount of “new” natural gas that is about to flood the market as a result of recent shale discoveries and increased industry efficiencies.

One of the key predictions in the report is the massive oversupply (up to 250 billion cubic meters) of natural gas the industry will be forced to endure over the next five years.

Not only does that mean prices are going lower, but LNG terminals will be shuttered and all those new wells sprouting up in places like Pennsylvania, Ohio, West Virginia and New York will be plugged as well.

If you have been following my commentary over the last month or so, you know the IEA’s findings are nothing new. I did my own research and let TFN Strategic Traders in on three plays to make almost two weeks ago.

Our timing could not have been better.

So far, the three trades are worth gains of 33%, 88% and 242%. Not bad for just nine trading days.

But the best days (at least for shorts) are yet to come. As natural gas prices plummet and the industry self-destructs, these plays will soar in value.

It is not too late to get in on the action. To read my full, in-depth report click here.Similar Posts:

• Buy oil. Sell natural gas – October 26, 2009
• 342% gains from natural gas implosion – November 10, 2009
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• Where to “store” your money now – June 4, 2009

Article first published on Today's Financial News

Gas pain: The International Energy Agency weighs in

Pundit Adam Lass charts the coinciding trends of increasing oil and stock prices, and marks the peak and fall of two administrations – and wonders whether the Obama administration will let the markets run their course again.

By Adam Lass, Taipan Daily

“Oil down to $80!”

A year ago, that headline was impressive, because crude futures had been hanging out around $144 a barrel, and were on their way to $48. Talk about blood on the trading floor! Now that’s the sort of rich stuff a columnist can sink his teeth into.

The recent $3 hiccough is merely a 4% cyclic dip within a larger rising trend that has seen crude futures rise some 71% over the past nine months. Quite frankly, the oil price could drop to the bottom of the rising trend at $75, and I still wouldn’t be impressed. Heck, I halfway expect it.

Still, this little tempest in a teacup did get me thinking about energy prices et al. I’ve long maintained that energy costs are the mosquitoes of inflation. That is to say, they are the disease vector that allows the theoretical destruction of the dollar to burrow down deep into regular folk’s pockets.

Read the complete article at Taipan Daily.
Similar Posts:

• A chart worth studying: Natural gas vs. crude prices – August 28, 2009
• Oil at $65: A glimpse of what’s to come – May 28, 2009
• The crude market is making Uncle Sam pay – June 11, 2009
• Three facts prove I was right – July 29, 2009
• Crude storage: What happens when they are full? – July 16, 2009

Article first published on Today's Financial News

Will big oil burst Obama’s economic Bubble?

The dollar is as unpopular as ever. Continued low interest rates, massive inflationary threats and never-ending stimulus plans are creating a situation like never before.

By Andrew Snyder, TodaysFinancialNews.com

Baltimore – (TFN): Nobody wants the dollar these days, but yet we all depend on the greenback to keep the business world spinning.

There is an interesting phenomenon taking place in China. As the Fed prints so much money that it is contemplating selling advertising space in place of presidential portraits, Asian investors are making major moves to capitalize on the situation.

Investors are firing up the carry trade like never before, borrowing dollars and buying yuan- or yen-based.

Meanwhile, the Asia banks that end up with a horde of dollars are nervously exchanging them for domestic currencies as they fear holding too many dollars will hurt their bottom line as the currency continues its rapid depreciation.

Normally, the forex markets is the place traders head when they need a good nap or a break from “real” trading, but thanks to the massive changes we have seen lately, the currency markets are anything but boring.

While my commentary has drifted away from the commodities carry trade in recent weeks due to my natural gas industry research efforts, the powerfully profitable trend is as alive as ever.

Think about it.

Reuters is touting an article today that discusses the “shortage” of dollars on the market. As banks dump their holdings, governments with huge trade surpluses are forced to take on the exchange.

With nearly a trillion dollars in its reserves, China already has more than enough greenbacks on hold. But it can’t put the money out to the free-market ravens. It would only make the situation worse.

The only thing it can do, besides letting its currency float (don’t expect that anytime soon) is buy something it needs with the cash… like commodities!

Tangible assets like coal, oil, platinum, silver, gold and iron are the perfect purchase. The trades are done in American dollars and they are actually appreciating in value. The more China buys and stockpiles now, the less it will have to rely on the open markets when its economy really gets cranking.

Even better, China is buying more time until it has to begin depleting its own massive supplies of domestic commodities.

The news from India earlier this week that it bought massive amounts of gold from the IMF surprised the markets, because most folks believed China would do the buying.

But with a massive trade surplus of its own, India needs to take advantage of the commodity carry trade just as badly as its neighbor.

It all adds up to great bullishness for the commodities markets. While crude and gold get most of the attention, buyers are not limiting their purchases to these two kingpins.

The entire complex is on the auction block and prices are going up. It is not too late to get in on the action.

Article first published on Today's Financial News

If everybody dumps the dollar, where does it go?

In today’s TFN eNews:

* Gains in gas

* Gains in gambling

* Three small-cap movers worth watching

Dear TFN eNews reader,

Despite the gut-wrenching contortions of the market, this turned out to be a fantastic week. For some options investors, that is.

As I write, the natural gas plays TFN options strategist Andrew Snyders initiated ten days ago have surged by 140%, 22%, and 185%, respectively.

Natural gas is trading for $4.865 per MMBtu — down significantly from the $5.97 highs reached on October 20.

The timing sure couldn’t have been better. Now, here comes the big question. When to sell?

“I know many of my readers are sitting on monstrous gains. I also know that many new members to TFN Strategic Trader are sitting on smaller gains. Normally, after almost tripling your money, I’d say lock it in and move on. But I promised more and I believe more is on the way.

“That is why I’ll recommend a fourth way to play the natural gas industry this coming Friday. For those who’ve already locked in gains, it will be an opportunity to reset and start over. And for those hanging on for more, it’s yet another way to play a powerful situation.”

(I say don’t miss that: Make sure you’re a TST member by Friday: http://www.todaysfinancialnews.com/TST/GAS/WTSTKA04.html)

*** But the good news didn’t stop there.

News out of Ohio was equally fantastic for Penn National (NYSE:PENN). In case you missed the headlines, Ohio narrowly passed Issue 3, a constitutional amendment that allows gambling in four of the state’s largest cities. This will be a strong boost for Penn’s future revenue stream, which has sent shares up by nearly 10% today. Even better, the surge has sent Andrews calls up by 175%. There are still several weeks until expiration. We’re in for another round of profits.

Xerox (NYSE:XRX), too, sailed past a critical resistance level around the $8.00 mark today. As the underlying shares zoomed past their 50-day moving average. Our calls are up by over 65%.

This is a critical play to keep an eye on. As of now, it is a hold. But any market weakness could quickly change my opinion.

We are past our official breakeven point by a dime, which means any increase in share price, will be reflected in our contracts. With over two weeks until expiration, immense upside potential remains. This week’s action will be pivotal.

*** The markets are moving forward. While the big guys move by just a percent or two, the small-cap offers phenomenal profit opportunities. For investors in the right spot, specifically the small-cap market, it has been a very profitable week. Andrew Snyder commented:

“Shares of Pacer International (NASDAQ:PACR) are up by over 50% after the intermodal and logistics provider tossed two pieces of good news to the bulls. First, Pacer finalized a deal with Union Pacific (NYSE:UNP) which creates an additional $30 million in new cash flow for the $140 million firm. The company plans to use the proceeds to pay down a credit line by about 50%. A good move in this credit-tight economy.

“Even better than the shoring up of the corporate balance sheet was the news that company remained profitable during a volatile quarter.

“While most analysts expected a small loss, Pacer managed to rack in profits of $600,000 thanks to revenue of $418.7 million. The Street expected a top-line figure of just $402 million.

“If you’re a fan of Warren Buffett’s big move in the railway industry yesterday, you will like Pacer. It’s the small-cap version of going ‘all-in’ on the American economy.”

But there are two more companies. Read up on them right here:

http://www.todaysfinancialnews.com/us-stocks-and-markets/three-small-cap-movers-worth-watching-10286.html

*** The U.S. Retirement System could owe YOU Money:

A recent University study reports that millions of Americans could qualify for an extra $10,000 or more per year thanks to the U.S. Govt’s retirement program. If you’ve worked and have paid into this program, it’s your legal right to collect your full benefit.

New report explains the details: http://www.stansberryresearch.com/pro/0909TRWANY49/MTRWKB04/PR

*** Quote of the Day:

“In the coming weeks, Speaker Nancy Pelosi and Majority Leader Harry Reid will be asking their troops to cast potentially career-ending votes for healthcare changes, Medicare cuts, higher taxes, and fines on the uninsured. Whether they cast those votes depends on their faith in Obama’s drawing power. But, the votes in Virginia, in particular, show the limits of Obama’s appeal. (…) [The GOP victories in Virginia and New Jersey] send a message to red-state Democratic congressmen: Obama may be able to survive in the deep water into which he is leading his party, but you can’t.”

– Dick Morris, Creators.com

Recommended Reading:

Best Books to Fight H1N1: 5 Great Reads to Beat the Swine Flu

Natural Gas Prices: “Stealth Buyer” tips his hand

Today’s Top 3 Penny Stocks

Today’s Top 3 Financial News Stories:

WSJ.com – World Bank upgrades China growth forecast “The World Bank has upgraded its 2009 economic growth forecast for China to 8.4pc on the back of huge public spending but warned stronger domestic demand was needed to ensure a sustainable recovery.”

MoneyNews.com — Stephen Moore: Obama an Economic Failure “The falling dollar and the continuing surge of gold prices indicates that President Obama, like his predecessor, is going to be considered an economic failure.”

Bloomberg.com — U.S. Stocks Add to Global Rally, Gold Hits Record Before Fed “U.S. stocks added to a global rally as a report showed new orders rose in service industries and investors speculated the Federal Reserve will signal its benchmark interest rate will remain at a record low for an extended period. The dollar fell and gold climbed to a record.”

Cordially yours,

J. Christoph Amberger

Executive Publisher, TodaysFinancialNews.com

Article first published on Today's Financial News

When to sell for monstrous gains on natural gas

The markets are moving forward today. While the big guys move by just a percent or two, the small-cap offers phenomenal profit opportunities. Check out these three winners.

By Andrew Snyder, TodaysFinanicalNews.com

Baltimore—(TFN): It has been a week of nauseating ups and downs. For investors in the right spot, specifically the small-cap market, it has been a very profitable week.

Shares of Pacer International (NASDAQ:PACR) are up by over 50% after the intermodal and logistics provider tossed two pieces of good news to the bulls.

First, Pacer finalized a deal with Union Pacific (NYSE:UNP) which creates an additional $30 million in new cash flow for the $140 million firm. The company plans to use the proceeds to pay down a credit line by about 50%. A good move in this credit-tight economy.

But even better than the shoring up of the corporate balance sheet was the news that company remained profitable during a volatile quarter. While most analysts expected a small loss, Pacer managed to rack in profits of $600,000 thanks to revenue of $418.7 million. The Street expected a top-line figure of just $402 million.

If you are a fan of Warren Buffett’s big move in the railway industry yesterday, you will like Pacer. It’s the small-cap version of going “all-in” on the American economy.

Finally, excitement from IT

Another company putting up big gains today is Agilysys (NASDAQ:AGYS). Shares of the IT solutions provider soared by over 40% during the session.

Strong growth in hardware and software sales led the company to operating income of $4.3 million, up from last year’s corresponding period’s loss of $1.9 million.

Interestingly, while material sales rose, support sales plummeted by nearly 33%. This is an important trend to watch as companies nationwide try to do more with less.

Finally put Rehabcare Group (NYSE:RHB) into your ticker and check out the action. Shares of the healthcare facility provider are up by over 25% on the news that the company is laying out $570 million to get its hands on Triumph Healthcare, a Houston-based long-term care provider.

This is an interesting deal because it goes against the grain on a couple of fronts.

First, shares of the acquirer are “supposed” to drop on acquisition news. Today’s deviation from the norm is strong evidence that investors believe the combined companies have much more profit-generating power together than they did separately.

This is also an interestingly time move because of the great healthcare debate taking place across the nation. By making such a strong move, Rehabcare is signally it has no fears of major detrimental changes on the way.

Only time will tell.

For now, all three of these big movers should be at the top of your watch list. The small-cap world is hot and getting hotter.

Article first published on Today's Financial News

Three small-cap movers worth watching

Wall Street is busy dissecting the word out of the Federal Reserve. But really, does it matter what Bernanke says? We all know the outcome. And it isn’t good.

By Andrew Snyder, TodaysFinancialNews.com

Baltimore — (TFN):  The Fed is meeting today. And I ask who cares? At this point, Bernanke and his troupe of politicians masquerading as economists are in so far over their heads, no matter what they do or say, you can bet the move is designed to protect their butts, not yours.

With the global economy taking off without us and foreign interest rates already on the rise, the Fed is desperate to look bullish while acting bearish.

Anybody that has ever tried to prove the existence of Santa Clause or the Tooth Fairy to a six year old knows what Bernanke is trying to do. At this point, he’ll do anything to change the subject and focus the attention on something else.

With all of this talk about an increasingly deadly carry trade bubble, it is beyond obvious that American interest rates need to rise. If it doesn’t happen, soon enough all of America’s money will be invested in some high rise in China’s Guandong province… or Saudi oil.

But we all know Bernanke would commit career suicide by lifting a headliner like short-term rates even by a quarter of a percent. The blame for any upcoming financial downturn will be squarely on his shoulders.

For the youngsters in the room, he’ll be blamed for outing Santa Clause.

So what’s the guy to do? He’s already doing it.

The Fed is unraveling its plans to buy a whopping $1.25 trillion worth of mortgage-backed securities and $200 billion worth of other mortgage-related notes.

That’s trillion, with a “T”

By March, the Fed’s massive buying spree will be over, once again letting the markets deal with a massive amount of very “un-transparent” securities. The same lion that brought the bull down is once again about to be un-caged, hungrier than ever.

If you thought the market had a hard time swallowing so many mortgage defaults, wait until $1.45 trillion dollars runs straight into 10% unemployment and a real estate market worth a fraction of what it was even a year ago.

And here’s the kicker, just by refraining from hitting the “buy” button, Bernanke effectively raises mortgage rates by as much as 100 basis points.

Let’s see… 10% unemployment, a weakened currency, deflating home prices and inflating borrowing costs. It’s a recipe for disaster.

At least Bernanke gets to keep his job and he gets the keen realization that he would not be in this bind if he never would have meddled with the markets in the first place.

We all knew the day would come when the Fed had to clean up its mess. That day has come.

Article first published on Today's Financial News

What’s next for Bernanke and the Fed?

These five Kindle-compatible ebooks should help you outlast the swine flu and the H1N1 virus in style!

by the TFN staff

Baltimore, MD — TFN: It starts with a mild tickle in your throat. By lunch, you’ve developed a tight, percussive cough. On your commute back home, the lights of cars trigger an oddly sick feeling behind your eyeballs. And by the time you’re home, all you want to do is crawl into bed to nurse that 102-degree fever.

That’s when you realize: You didn’t get the swine flu vaccine. And now the H1N1’s got you.

Here’s the good news:

There’s really nothing you can do about it. You’ll never have as good an excuse to stay in bed, drop a couple of Mucinex every four to six hours… and do nothing but read!

But this isn’t the time to start War and Peace. Or refresh your memory on Kant’s Critique of Pure Reason. You want, need, deserve to be entertained by the best writers in the business.

But since you can’t just pop out to the bookstore… remember, right now, you’re Typhoid Mary or Joseph and a threat to public safety!… this is the perfect time to unwrap the Kindle your gizmo-infatuated spouse gave you for your birthday.

So prop up a pillow, log on to Amazon.com, Inc. (NASDAQ:AMZN)’s Kindle site, and check out some books. Our editorial team, no stranger to the vagaries of swine flu or other ailments that require you to remain still for extended periods of time, suggests the following:

* Ken Follett: The Pillars of the Earth $6.39

This medieval mega-epic should outlast the most tenacious virus. The plot is strong, fast-paced and compelling, characters are complex and addictive, and the period detail is magnificent. The only drawback… you may find yourself jonesing for the next volume… another epic tome the size of a curbstone.

* David Grann: The Lost City of Z: A Tale of Deadly Obsession in the Amazon $9.99

In 1925, British explorer Percy Fawcett heads out on his final expedition into the Brazilian Amazon. His aim: The mythical lost city of El Dorado. Of course, he’s never heard of again. Now city slicker Grann is follwoing his lost trail (and those of others) into the thick of the Amazon. Strange how a madman’s vision can, in the end, turn out… right!

* J. Christoph Amberger: The Lazarus Smile $9.99

If you like Dan Brown and Philip Kerr, this is the book for you! It’s got everything: Amberger’s debut novel wraps you in a hunt for an “Unholy Grail” that ties together Nazis and Praetorians, Nero and Himmler, St. Paul and al Qaeda. Based on true events, this is one of the most lively, well- written, and painstakingly researched books of the season!

* Douglas Adams: The Hitchhiker’s Guide to the Galaxy $6.39

If you grew up during the 1980’s you’re already familiar with this classic cult title. There’s no time like the present to revisit this quirky futuristic tale of man’s final destiny in the Universe.

* Philip Kerr: Hitler’s Peace $9.99

When the Big Three of WWII — FDR, Roosevelt, Stalin — met in Tehran at the end of 1943, they were dividing the spoils of the yet-to-be-conquered Third Reich, jockeying for position, weighing and discarding moral considerations regarding the Katyn Massacre and secret peace negotiations initiated by the Nazis. A fast-paced narratives built on the question “what if?”

Now go fill up your tea mug and get ready to make the darn swine flu pay!Similar Posts:

• Pigs infected! Get ready for a slaughter – October 19, 2009
• Take 30% gains on Sinovac Biotech (SVA) – August 28, 2009
• Sinuvac (SVA) reports swine flu success – August 18, 2009
• Just as predicted, Amazon.com (AMZN) drops back into $80’s – July 24, 2009
• Rough seas ahead for Royal Caribbean – June 29, 2009

Article first published on Today's Financial News

Best Books to Fight H1N1: 5 Great Reads to Beat the Swine Flu

The votes have been counted and gambling is coming to Ohio. That is fantastic news for Penn National (NYSE:PENN) shareholders. Even better for options players.

By Andrew Snyder, TodaysFinancialNews.com

Baltimore – (TFN): It is easy to get political on a day like this, but I promised myself I would not do it. After all, yesterday’s election results speak for themselves.

While most pundits discuss the news from New York, Virginia and New Jersey, I’ve been pouring through the figures streaming out of Ohio’s polling places.

For Penn National (NYSE:PENN) investors, the news is fantastic.

Shares of the gambling-facility operator are up by nearly double digits today thanks to 53% of voters saying yes to Issue 3, a constitutional amendment that will allow gambling in four of the state’s largest cities.

Whether you are in favor of gambling or not, you cannot deny the fiscal boost it provides to local governments, especially when proceeds are hit with a 33% tax rate. For many failing state governments, gambling revenue is a last resort financial life ring.

Now that Columbus, Cleveland, Cincinnati and Toledo will open casinos, Ohio becomes the 39th state to welcome the industry. It is a fantastic trend for Penn National.

No gamble here

The company has steadily increased its revenues as states have revised their law books. As one of the few casino operators without a property in Las Vegas, Penn National has been largely shielded from the city’s devastating real estate and tourism bust.

Its stockpile of cash allows it to grow while its competitors fight to stay out of bankruptcy court.

Today, Penn announced it will have casinos built and operating in all four of Ohio’s gambling towns in just over 24 months.

The plans are proof that Penn’s own gamble, spending $35 million to help push voters to say yes, has paid off. With 47% of the vote saying nay, the odds were barely in its favor.

There are still eleven states left that have not yet legalized gambling. If you ask most industry experts, they agree it is just a matter of time.

Pennsylvania is the next key state. It already allows slots, but the state legislation is currently working on allowing table games. It is yet another revenue-generating opportunity for Penn that has the potential to send shares even higher.

Today’s price pop is no surprise to TFN Strategic Trader members. I recommended playing a set of the company’s call contracts back in September. The options have surged by 200% today. Nice!

Thanks to the news out of Ohio, playing Penn National is far from a gamble. This company has growth potential written all over.

Article first published on Today's Financial News

A $35 million bet pays off for Penn National