International Savings Club

Coal Fired Profits From Oakshire

2011-05-17T00:27:00.001-07:00

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Wall Street Elite

Coal Fired Profits

A quick trade recap before we start:

Last week's recommendation to buy CALL options on the PowerShares Deutsche Bank U.S. Dollar Bullish Fund (NYSE:UUP) is now up 19%. We're suggesting you hold the trade for the time being. We bought the January 2013 expiry so we've plenty of time value to play, and, moreover, we feel it's time to go with the buck for a while. Here's the way the weekly UUP dollar chart looks:

For the past two years, UUP has climbed with every surge in weekly volume (see red annotations, above). As you can see, volume from two weeks ago came in at the highest level in the fund's history, a combination of massive short covering and new bullish positions being taken on, a full 3x the weekly average volume. We say that's bullish.

Not shown above, but evident on the daily chart, are a number of additional dollar-bullish technicals. Have a look here:

The daily chart shows RSI in bullish territory above its 'waterline', with MACD rising strongly behind. If and when both are situated above their respective mid-point waterlines, the dollar should be moving confidently higher.

See also the convincing drive above both the downsloping trendline (in red) and the short term moving average, an indicator of strength for the next two to three weeks minimum, in our view.

This Week in Purgatory

Yes, the economy looks like hell. Any objective observer could tell you that. The following is what's contributing to one of the ugliest macro pictures we've seen in decades:

Rising interest rates – particularly in emerging markets, but coming eventually to a western nation near you.

Japanese disasters – global supply chains have been disrupted by Japan's tragic event trio (earthquake, tsunami and nuclear calamity), that dealt a severe blow to the country's manufacturing sector. It's far too early to tell when all lines will be up and running as before.

Flagging U.S. housing market –it looks like we're about to go from bad to worse. Any rise in interest rates will certainly put a nail in the national home buying coffin, but in the meantime, there's very little activity in an already depressed sector. Case-Shiller (see below) indicates prices still sliding, National Home Builders Index at a two year low and sales numbers remain depressed.

April Housing Starts will be announced Tuesday morning.

$100 Oil – this will no doubt cool global growth.

Austerity – already part of the European and U.S. State government equation, and now about to be implemented by the Feds. Could cut into growth. Sure, but how deeply?

Corporate earnings slowing –after the solid year-over-year growth of the last two years, driven largely by cost cutting and other operational efficiencies, earnings are slowing. We're now looking at the worst numbers for the last five quarters. Is it the start of a trend or an exception?

The corporate 'beat rate' is also at its worst levels of the current bull market, very possibly because all efficiencies have now been wrung out of workers and systems.

So we go short, right?

Not so fast, swifty. We bring you the bad news because we've now seen enough of it to know that it doesn't make a great deal of difference in the face of a Mississippi juggernaut wave of liquidity that continues to move unrelentingly into the global monetary base. What the bad news does do is keep nervous hands off the bid for equities. And that's fine with us.

Since new highs were achieved on the major market averages, we've turned bullish, and so we remain. Which does not mean, of course, that we won't see any stock weakness over the next week or two; it's still very possible. We've left several shorter term option trades open for that express eventuality. If there's a pullback, we expect it to be deep, swift and scary, forcing the ninnies out of the game and giving us a number of winning trades. Thereafter, we also expect the market to grind its way to new highs.

Finally, we're of the opinion that it's next to impossible to determine the direction oil will trend over the near term. There are just too many intangibles, including the ongoing upheavals in the Arab world, floods and tornadoes in the U.S. Midwest, the likelihood of more natural disasters the world over, and the determination of speculators to drive the price of crude higher.

Make no mistake: oil is critical to the rate of global economic growth and, by extension, the plight of markets. We see the potential for sustained volatility in the energy sector – of the sort we witnessed last week, with 10% daily moves as traders search for the next intermediate trend. And our aim is to exploit that volatility.

We're doing it like this:

We're not going to trade oil itself. We're going into a closely related commodity – coal.

We're doing it for several reasons.

1. Coal miners, as a group, have seen even more exaggerated moves than most companies in the energy complex.

2. The supply/demand picture for coal, though complex, is somewhat easier to project than that of crude oil, with all its attendant geopolitical vagaries.

3. There are several options strategies that avail themselves at this juncture that we feel could prove immensely profitable.

That said, here's coal for roughly the last two and a half years:

The current price action for coal is situated about midway between the trend channel lines that have prevailed for the last two and a half years, and the gain for the period was in the neighborhood of 25%.

Now have a look at the Market Vectors Coal ETF (NYSE:KOL) plotted against one of the industry laggards, Arch Coal (NYSE:ACI), over the same two and a half year time frame:

ACI has had a tough go of it, and after a recent downgrade by, among others, Standard & Poor's Equity Research, we say the underperformance will continue.

We are setting up a zero premium trade that works like this: buy CALLS on KOL and sell them on ACI. The trade will be profitable if KOL rises faster or falls slower than ACI

Wall Street Elite recommends buying in equal numbers the KOL October 51 CALLS for $2.25 and selling the ACI October 31 CALLS for the same price.

With kind regards,

Hugh L. O'Haynew, Analyst, Oakshire Financial

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Copyright © 2011, Oakshire Financial, All Rights Reserved

The information transmitted is intended only for the person or entity to which it is addressed and may contain material that is confidential, privileged and exempt from disclosure under applicable law. Any review, re-transmission or other use of, or taking of any action in reliance upon the information by persons or entities other than the intended recipient is prohibited. If you receive this in error, please contact the sender anddelete the e-mail and its attachments from all computers. Oakshire Financial does not accept liability for any errors, omissions, corruption or virus in the contents for this message or any attachments that arise as a result of e-mail transmission.

MORTAGE FOR HAPPY LIVE

2011-05-16T00:08:00.001-07:00

We all know that we will love the feeling of having something that's all ours - a home where we can decorate the way we want. A nice garden in your backyard, a comfortable living room.We can do it all your way when you own! There are more advantages to owning a home than personal satisfaction, for example, you can deduct the cost of your mortgage loan interest from your Federal Income Taxes, and usually from your State Taxes too. And interest will compose nearly all of the monthly payment, for over half the number of years you will be paying your mortgage. This adds up to hefty savings at the end of each year. Also, we are allowed to deduct the Property Taxes you pay as a Homeowner. In addition, your property's value usually will go up through the years.If you rent, we pay your monthly payment and it's gone forever.

Using a Real Estate Broker is a good idea. All the details involved in home buying can be mind-boggling. A professional Real Estate Broker can guide you through the whole process and make your life easier. He or She will able to answer you many important things that you may be considering in the neighborhood, for example, the quality of schools, population, and crime rate, etc. The Real Estate Broker will help you evaluate the price range you can afford, search the classified ads, and multiple listing services for the homes you'll like to see. He or She can explain the cons and pros of different types of mortgages, walk you through the paperwork, and answer any related questions when you sign the papers at the closing. And it is FREE or you don't have to pay anything to the Broker because the payment comes from the Home Seller!
Sometime we ask: How much money will I have to prepare for buying a Home? Ok, there are many things you need to consider, for example, the cost of the house, the loan amount, and type of mortgage you are getting. Basically, you need to prepare enough money to cover Three Costs:

* Earnest Money: the deposit you make when you submit your offer (8 - 20% of the purchase price)
* Down Payment: a percentage of the cost of the home that you pay when you go to settlement (10 - 20% of the purchase price)
* Closing Costs: the costs for processing the paperwork to buy a house (3 - 6% of the purchase price)

Mortage is something usually avoided by someone who do't brave enough to have something.You will have to pay the monthly utilities bills, for example, gas and electricity. You will also have Property Taxes, and you may have City or County Taxes. Taxes usually rolled into the mortgage monthly payment. You can consult the Real Estate Broker regarding these cost.

So, What will the Mortgage cover? It usually covers four parts:

* Principal - repayment of the amount you borrow
* Interest - payment to the lender for the money you borrow
* Homeowners Insurance - monthly payment to insure the property against loss from free, theft, and other hazards required by the lender
* Property Taxes - Annual City or County Taxes assessed on the property (divided by number of mortgage payments you make a year). That is enough. You can go now to your mortgage broker near your way..document,. You may want to consult your Attorney to make sure what you are signing.

Focusing on the Four G's - Gold, Guns, Gas, Grub

2011-05-12T17:57:00.000-07:00

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Bourbon & Bayonets

Back Country Buying Binge

There's a structural change now taking place across the western world that will likely shape our future as much as any other phenomenon or development we've encountered in our lifetimes. It goes without saying that it will also affect the future of our investments. It's a development that very few are currently speaking about.

The depopulation of major urban centers has already begun. We're not talking here about the flight from inner city crime, the challenges of educating children in such an environment or the social instability that's part and parcel of modern urban America. These phenomena are well documented and have existed for well over half a century. The flight to the suburbs is actually a relatively old story that's left a gap which has been filled largely by newer immigrant communities – a role they've fulfilled astoundingly well. But that's not likely to continue forever.

What we are referring to a genuine depopulation that results from cities becoming unliveable in the truest sense of the word. It's a negative feedback loop that begins in economic contraction, leads to fewer work opportunities and growing crime, is magnified by a swiftly dwindling government safety support net, that then further reduces retail spending, destroys more jobs and ultimately sends people little by little out of the urban arena altogether, to the countryside in search of:

work opportunities,
more affordable living spaces,
plots to grow one's own,
cover from the dangers of a decaying urban social atmosphere, and/or
old fashioned charity (something the folklore indicates is more readily available in the country).

The jobs lost in the last several years are not coming back. We are as a country simply no longer competitive with the rest of the world. Blame unions if you want; it doesn't matter. The same products are now available to us cheaper because they're produced overseas. There's no reason for this trend to stop.

More than this, the economy at large is a train wreck in waiting. There will be no soft landing from the mess that will, at some point, hit us full frontal lobe, and send literally millions into the streets looking for gainful employment.

The intelligent are already starting to venture beyond the 'burbs and are planning for more difficult times. The latecomers will be less prepared. Everyone will be in search of the basics: medicine, seeds, fertilizer and canned goods. Those who are interested in profiting from the spectre of this wholesale migration to the wilds will focus on the four G's: Gold, Guns, Gas and Grub, those items that are certain to be bid higher under such circumstances.

In the time leading up to that upheaval everything will appear to function as normal. The early birds (those 'nutcases' who see the writing on the wall and start making their way toward the rural but-nutter lifestyle) will get the pick of the land and will therefore be best situated to survive the mess. But outside of the silly speeches these 'wackos' sometimes make, all will be business as usual.

Markets will rise on a wave of printed currencies the likes of which has never been seen. The banking system will heave and groan, this way and that, but is unlikely to buckle until the very last moment – and that event could still be a decade away. Wars will come and wars will go, politicians will deceive and athletes and actors, indeed celebrities of every stripe, will continue to be admired for everything but their characters.

And investors will be duped into believing that business as we've known it in America will continue just as it has long, long into the future.

Would that it were so.

Alas, we at Oakshire Financial are in the business of not only correctly forecasting trends and events, but of profiting from the same in the markets. And so in the next few weeks we are suggesting you take a closer look at a few investments that fit with the scenario we've discussed above.

The depopulation phenomenon has already started and could kick into high gear should the real estate market take another leg down. At that point, Amerco (NASDAQ:UHAL) , the stock holding company of U-Haul International Inc., should begin trucking in all four gears. U-Haul is one of America's premier do-it-yourself moving and storage companies.

Technically, the pennant forming (in blue) is a bullish continuation pattern. And with all its moving averages rising, there's much in Amerco to be bullish about. The only worry we have is that the price action is now 60% above both the long term moving average and rising trendline.

Many happy returns,

Matt McAbby, Senior Analyst, Oakshire Financial

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HOME / ABOUT US / CONTACT US / INVESTMENT NEWSLETTERS / FOREX & FUTURES / EDUCATION

Copyright © 2011, Oakshire Financial, All Rights Reserved

The information transmitted is intended only for the person or entity to which it is addressed and may contain material that is confidential, privileged and exempt from disclosure under applicable law. Any review, re-transmission or other use of, or taking of any action in reliance upon the information by persons or entities other than the intended recipient is prohibited. If you receive this in error, please contact the sender anddelete the e-mail and its attachments from all computers. Oakshire Financial does not accept liability for any errors, omissions, corruption or virus in the contents for this message or any attachments that arise as a result of e-mail transmission.

Fw: Where the Money is in 2011 [NEW VIDEO]

2011-05-08T18:13:00.001-07:00

John Thomas, the Mad Hedge Fund Trader, founding father of the international hedge fund industry and one of 2010's top-performing traders reveals:

Where the Money is in 2011:

Where top hedge funds are betting the money is, including little-known "frontier" & emerging markets, secular bull markets in commodities, currencies, hot ETFs and more.

Click here to view this FREE WEBINAR!

I'll keep this short and sweet. Today I have a webinar showing you where the money is in global markets and why. I don't care what your trading style is; this information will make you money.

Click here to register - it's free. It's by John Thomas. Who is he and what does he know? You're going to love that answer to that question.

First, he runs one of the hottest hedge funds in the world right now. He's one of the top-performing hedge fund traders in the world today. He's been in the financial markets for 40 years.

His experience includes 10 years as a trader and hedge fund consultant at Morgan Stanley, where titans like Paul Tudor Jones and George Soros paid to have him consult on their hedge funds.

John was there when Tudor Jones got famous from his trades in 1987s Black Monday, while John's equities desk made $75 million trading against Soros that same month!

In 2010, he published 49 free trade recommendations in the last five months. 48 have been winners.

John is not your average trader, either. Wall Street Titans like Paul Tudor Jones and George Soros have hired him to consult with their hedge funds.

And get this: John founded Wall Street's first-ever dedicated international hedge-fund.

And right now, today, he's one of the top-performing hedge fund traders in the world, based on performance. He knows where the money is and he lays it all out for you in this webinar.

Click here now to watch it.

Yes, you have to enter your email address, but that's not exactly a big deal since you can "unsubscribe" from his email list afterward if you want to.

I give you my word: The quality of his content will blow you away. It's 100% content with ZERO sales pitch of any kind.

Sincerely,

Barry Boswell, Chief Trader of Wealth Insider Alliance

Wealth Insider Alliance ("WIA") is not a registered investment adviser. We do not and will not provide personalized investment advice. We publish opinionated information about finance and trading that we believe our subscribers may be interested in.

Wealth Insider Alliance and its officers, directors, partners, affiliates, contributors, consultants or employees may hold positions in sec urities mentioned on the Wealth Insider Alliance website.

ALL CONTENTS OF THIS LETTER ARE COPYRIGHT 2010 WEALTH INSIDER ALLIANCE ALL RIGHTS RESERVED: REPRODUCING ANY PART OF THIS DOCUMENT IS PROHIBITED WITHOUT THE EXPRESS WRITTEN CONSENT OF THE WEALTH INSIDER ALLIANCE Protected by U.S. Copyright Law {Title 17 U.S.C. Section 101 et seq., Title 18 U.S.C. Section 2319}: Infringements can be punishable by up to 5 years in prison and $250,000 in fines.

LEGAL DISCLAIMER: This work is based on government filings (like SEC filings and announcements like the "Non-Farm Payroll"), current events, recent interviews, company press releases and what we've learned over the last 10+ years as financial journalists. We may have made mistakes and you shouldn't make any investment decision based solely on what you read, see or hear here. It's your money and your responsibility. The Wealth Insider Alliance expressly forbids its writers from having a financial interest in any security they recommend to our subscribers.

THE TESTIMONIALS CONTAINED HEREIN WERE PROVIDED WITHOUT COMPENSATION. WHILE THE EXPERIENCES DESCRIBED ARE BELIEVED TO BE TRUE, THEIR CLAIMS HAVE NOT BEEN INDEPENDENTLY VERIFIED, NOR HAS ANY ATTEMPT BEEN MADE TO DETERMINE THE EXPERIENCE OF THE INDIVIDUALS AFTER THE TESTIMONIALS WERE GIVEN. TESTIMONIALS ONLY PROVIDE THE PERSPECTIVE OF INDIVIDUALS WHO WERE SUCCESSFUL AND SATISFIED WITH THEIR EXPERIENCE. THE AVERAGE TRADER MAY OR MAY NOT EXPERIENCE SIMILAR RESULTS. PEOPLE CAN AND DO LOSE MONEY TRADING OPTIONS. THE EXAMPLES GIVEN IN TESTIMONIALS MAY HAVE LIMITED APPLICABILITY TO WHAT PURCHASERS OF THE PROGRAM ADVERTISED MAY GENERALLY EXPECT TO ACHIEVE, AND THE PERFORMANCE EXPERIENCED BY THE PERSONS GIVING TESTIMONIALS IS NOT WHAT PURCHASERS SHOULD EXPECT. SOME TESTIMONIALS MAY BE BASED ON PRODUCTS OR SERVICES OF CHUCK HUGHES OTHER THAN THE SPECIFIC ONES ADVERTISED HERE.

PAST PERFORMANCE IS NOT INDICATIVE OF FUTURE RESULTS.

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Risk Disclosure Statement:The risk of loss in trading foreign exchange can be substantial. You should therefore carefully consider whether such trading is suitable for you in light of your financial condition.

Unique experiences and past performances do not guarantee future results! Results are non-representative of all clients; certain accounts may have worse performance than that indicated. Trading spot foreign currencies involves substantial risk and there is always the potential for loss. Your trading results may vary. Because the risk factor is high in the foreign exchange market trading, only genuine "risk" funds should be used in such trading. If you do not have the extra capital that you can afford to lose, you should not trade in the foreign exchange market. No "safe" trading system has ever been devised, and no one can guarantee profits or freedom from loss. Trading involves high risks and you can lose a lot of money. Past performance is not necessarily indicative of future results and individual returns may vary amongst participants. Investment return and principal value will fluctuate so that an investor's account, when redeemed, may be worth more or less than their original investment. All performance figures assume the reinvestment of realized gains and capital gains. There is considerable exposure to risk in any foreign exchange transaction, including, but not limited to, the potential for changing political and/or economic conditions that may substantially affect the price or liquidity of a currency. This is not a solicitation to invest. Please consult a licensed investment advisor and read all risk warnings before committing funds.

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Urgent: A buyout by Apple may send AVVC shares up 1,978 pct.

2011-05-05T20:26:00.001-07:00

Imagine Owning APPLE, RIM and GOOGLE Combined For $1 A Share... Now's Your Chance!

In A $6.1 Billion Industry With
Over 234 Million Customers - AVVC Could Return You 1,978% Profits
By August 1st!

Haven't heard of them yet? That's because they just
came public. That's why you need to act now!

By acting today on AVVC, you could easily grab
1,978% profits as the mobile application
(or 'app' for short) industry triples again in 2011!
As this forward thinking company secures a huge
chunk of this $6.1 Billion pie, you could watch as...

Your meager $5,000 investment jumps to $103,900 or - your $10,000 rockets to $207,800 - all by August 1st, 2011!

Greetings!

Before we begin, you need to understand how rare it is to be at the birth of an industry...

When an event like this happens - fortunes are built, new pathways to profits are discovered and regular, ordinary people become legends.

Andrew Carnegie did it with steel...

The Rockefellers did it with oil...

Flagler did it with the railroads.

And we're about to see it happen again.

You see, the cyber age has brought about another technological revolution... no, more like an evolution as the new generation of computers is upon us...

As over the past few years, "Smart" technology has risen to prominence, changing the way people use cellular phones forever.

Blackberry may have been the first of this new generation, but it wasn't until Apple's iPhone was introduced that these mobile mini-computers took center stage.

iPhones introduced the idea of apps, tiny computer programs designed to allow the user practically millions of options and ways to use their phones...

In fact, you no doubt are already taking full advantage of what apps can do for you.

Apps are big business...

This year alone, it is estimated that Americans will download 17 Billion apps, as compared to 10.9 Billion in 2010 - that's an increase of over 55%!

It's no wonder why mobile apps have become a booming, $6.1 Billion industry.

But we're only seeing the beginning of what's to come...

Because by 2012, some experts are predicting the industry to hit $17.1 Billion, and just three years later, the app industry could be a whopping $25 Billion mega-market!

And Avatar Ventures (AVVC) is leading the charge to not only profit in the long term, but could very well return you 1,978% by August 1st, 2011!

I'll give you all of the amazing details in my latest Special Report - follow this link now!

Sincerely,

Eric Dickson
Editor, Breakaway Stocks

PS. While I believe strongly that AVVC will be trading at $3.35 (as you'll see in a minute) it's entirely possible it can be trading north of $20.78 by year's end, that's anywhere from between 300% to 2,000% returns on a stock you can buy now for only $1.

PPS. By the time you read my attached report, 3 Million apps will be downloaded. Don't waste a moment longer, the time to get in is now, your timing is perfect.

Back to Big Caps?

2011-05-05T20:25:00.001-07:00

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Bourbon & Bayonets

Investors Shifting Gears

Are we about to witness a bond breakout?

We've been watching the long bond (represented by the iShares Barclays20+ Year Treasury Bond ETF (NYSE:TLT)) quietly build a base for the last three months. During that time it has made a series of higher lows and higher highs and now appears poised to challenge the last high at 95. Look here:

The technicals for TLT paint a picture consistent with a sustained bull move, though not without a few hurdles to overcome.

Current resistance comes in at 95, where the long term moving average (in yellow) sits. It also happens to be the level of the last retracement high, so the selling could be significant should the market rally to that level. We think it will.

The Relative Strength Index and MACD indicators are both bullish, having climbed above their respective waterlines over the last few weeks.

The only thing missing from the move is volume. Any breakout above the 95 level should be accompanied by larger than average volume to be considered conclusive and tradeable.

What's more, the weekly chart on the bond is also looking bullish. Take a peek here:

Just last week RSI surfaced above its 'waterline', offering further proof that a bullish breakout may be in the offing. If and when MACD confirms (still could be a couple of weeks off), we could have a genuine long-bond 'buy' on our hands.

What's Behind it All?

In our opinion, the Treasury market's recent success bespeaks a growing defensiveness on the part of global investors, who are also running out of sovereign fixed-income alternatives. U.S. bonds may not be as safe as they once were, but for the average investor, is there a safer destination?

The stock market, too, has been witness to an increasing investor defensiveness. Though the whole market has been climbing, a look at some of the more successful sectors of late speaks of a clear urge to avoid risk.

Here are charts of recent action in the Utilities, Health Care and Consumer Staples sectors:

Add 9.6% to your utility dividend and you're doing quite well. Here's Health Care:

Even better returns here.

These three defensive sectors have surged as the market processed the latest earnings and economic data. That doesn't bode well for the market in general – nor does the parabolic nature of the above three charts bode well for the sectors in question.

Should a very long-awaited correction now begin, it will have been forecasted by both the long bond and these three defensive sectors.

And Silver?

Silver, too, has been doing some forecasting of its own, both regarding the price of commodities in general and of the price of silver itself.

To put it bluntly, the magnitude of the silver selloff we've just witnessed, however you want to account for it (wild margin requirement raises, for example), is a sign of sideways movement (at best) or a more significant retracement for the intermediate term.

Here's silver's latest action:

The fall below the 50 day moving average occurred with hardly a day's hesitation and puts immediate overhead resistance on the metal at $43. Anyone trading silver would be wise to consider bailing at any counter-trend rally to that level.

We're now in line with premium newsletter writer, Hugh L. O'Haynew, who pens our weekly Wall Street Elite , when he says the days of commodities and precious metals market excitement will now take a back seat to equities, where liquidity flows have yet to create the same elevated risk profiles we've seen in commodities like silver over the last half year.

Hugh recommended buying ZSL CALLS two days before silver's most recent top was put in, and subscribers are cleaning up on the trade. ZSL is a double inverse leverage ETF, moving up $2 for every buck lost in the silver pits. The options only add to the leverage.

To Sum, Friends

As we suggested in last week's instalment of Bourbon & Bayonets, it may not be about economic fundamentals anymore. With corporate earnings offering a reasonable show of growth, we've very likely begun to witness a shift in money flows, out of once hot commodities, into bread and butter, big cap stocks.

Time for you to shift, too?

Many happy returns,

Matt McAbby, Senior Analyst, Oakshire Financial

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Do you still believe in silver?
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HOME / ABOUT US / CONTACT US / INVESTMENT NEWSLETTERS / FOREX & FUTURES / EDUCATION

Copyright © 2011, Oakshire Financial, All Rights Reserved

The information transmitted is intended only for the person or entity to which it is addressed and may contain material that is confidential, privileged and exempt from disclosure under applicable law. Any review, re-transmission or other use of, or taking of any action in reliance upon the information by persons or entities other than the intended recipient is prohibited. If you receive this in error, please contact the sender anddelete the e-mail and its attachments from all computers. Oakshire Financial does not accept liability for any errors, omissions, corruption or virus in the contents for this message or any attachments that arise as a result of e-mail transmission.

Back to Big Caps?

2011-05-05T20:20:00.000-07:00

_______________________________________________________________________________________

To unsubscribe, please click the unsubscribe link at the bottom of this email - Thanks :)

Bourbon & Bayonets

Investors Shifting Gears

Are we about to witness a bond breakout?

We've been watching the long bond (represented by the iShares Barclays20+ Year Treasury Bond ETF (NYSE:TLT)) quietly build a base for the last three months. During that time it has made a series of higher lows and higher highs and now appears poised to challenge the last high at 95. Look here:

The technicals for TLT paint a picture consistent with a sustained bull move, though not without a few hurdles to overcome.

Current resistance comes in at 95, where the long term moving average (in yellow) sits. It also happens to be the level of the last retracement high, so the selling could be significant should the market rally to that level. We think it will.

The Relative Strength Index and MACD indicators are both bullish, having climbed above their respective waterlines over the last few weeks.

The only thing missing from the move is volume. Any breakout above the 95 level should be accompanied by larger than average volume to be considered conclusive and tradeable.

What's more, the weekly chart on the bond is also looking bullish. Take a peek here:

Just last week RSI surfaced above its 'waterline', offering further proof that a bullish breakout may be in the offing. If and when MACD confirms (still could be a couple of weeks off), we could have a genuine long-bond 'buy' on our hands.

What's Behind it All?

In our opinion, the Treasury market's recent success bespeaks a growing defensiveness on the part of global investors, who are also running out of sovereign fixed-income alternatives. U.S. bonds may not be as safe as they once were, but for the average investor, is there a safer destination?

The stock market, too, has been witness to an increasing investor defensiveness. Though the whole market has been climbing, a look at some of the more successful sectors of late speaks of a clear urge to avoid risk.

Here are charts of recent action in the Utilities, Health Care and Consumer Staples sectors:

Add 9.6% to your utility dividend and you're doing quite well. Here's Health Care:

Even better returns here.

These three defensive sectors have surged as the market processed the latest earnings and economic data. That doesn't bode well for the market in general – nor does the parabolic nature of the above three charts bode well for the sectors in question.

Should a very long-awaited correction now begin, it will have been forecasted by both the long bond and these three defensive sectors.

And Silver?

Silver, too, has been doing some forecasting of its own, both regarding the price of commodities in general and of the price of silver itself.

To put it bluntly, the magnitude of the silver selloff we've just witnessed, however you want to account for it (wild margin requirement raises, for example), is a sign of sideways movement (at best) or a more significant retracement for the intermediate term.

Here's silver's latest action:

The fall below the 50 day moving average occurred with hardly a day's hesitation and puts immediate overhead resistance on the metal at $43. Anyone trading silver would be wise to consider bailing at any counter-trend rally to that level.

We're now in line with premium newsletter writer, Hugh L. O'Haynew, who pens our weekly Wall Street Elite , when he says the days of commodities and precious metals market excitement will now take a back seat to equities, where liquidity flows have yet to create the same elevated risk profiles we've seen in commodities like silver over the last half year.

Hugh recommended buying ZSL CALLS two days before silver's most recent top was put in, and subscribers are cleaning up on the trade. ZSL is a double inverse leverage ETF, moving up $2 for every buck lost in the silver pits. The options only add to the leverage.

To Sum, Friends

As we suggested in last week's instalment of Bourbon & Bayonets, it may not be about economic fundamentals anymore. With corporate earnings offering a reasonable show of growth, we've very likely begun to witness a shift in money flows, out of once hot commodities, into bread and butter, big cap stocks.

Time for you to shift, too?

Many happy returns,

Matt McAbby, Senior Analyst, Oakshire Financial

What are your thoughts on this move?
Do you still believe in silver?
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The information transmitted is intended only for the person or entity to which it is addressed and may contain material that is confidential, privileged and exempt from disclosure under applicable law. Any review, re-transmission or other use of, or taking of any action in reliance upon the information by persons or entities other than the intended recipient is prohibited. If you receive this in error, please contact the sender anddelete the e-mail and its attachments from all computers. Oakshire Financial does not accept liability for any errors, omissions, corruption or virus in the contents for this message or any attachments that arise as a result of e-mail transmission.

Sector Consolidation Trend Could Send PLSB Shares Up 698 Percent

2011-05-04T15:26:00.001-07:00

PLSB

The Start-Up Company You Must Own Today

A BREAKTHROUGH PRODUCT MEANS IF YOU OWN PULSE BEVERAGE (PLSB) NOW, YOU COULD MAKE A FAST 698%... BUT...
Sit On Pulse For A Year And Watch As A Buyout Craze Could Do This To Your Money...

Turn $2,000 into $18,980... Turn $6,000 into $56,940

Turn $12,000 into $113,880... Turn $20,000 into $227,760

Fellow Micro-Cap Investor:

This one looks set to break out any day now... then go on a terrific run in a sector where smart investors have historically cleaned up with gains that have exceeded 3,900%!

Pulse Beverage Corp. (PLSB) has a MARKET DEFINING - even market transforming - new product line... one that looks set to claim a significant share of the world's $300 billion non-alcoholic beverage market.

In the near-term this could mean gains for you that approach 700%...

But if you know the beverage industry... you know that one thing always seems to happen to a hot new product that cuts into the big gun's market share...

The company gets bought out and investors are
usually paid off at outrageous multiples.

In Pulse's case, I conservatively believe that would be about 12 to 1.

And, I have laid this remarkable opportunity out for you in a brand new Special Report you can get for FREE right now... with no obligation on your part.

PULSE Has A World-Beating New Product...

Hello, my name is Andrew Carpenter - sometimes referred to as the maverick genius of the micro-cap sector. In truth, I am the editor of the Carpenter Global Stock Advisory newsletter. It is tailored to people who want to make more money... and who are only worried about whether a company has real products and real potential - not what market they trade on.

Hence, along with mega-winning plays from giants such as Starbucks, PetroChina, Cosco Singapore, NutriSystems and Guess Inc....

I've also shown people small, high-potential companies such as gold miners that have real gold deposits, oil companies that are actually pumping oil and biotechs with new-product pipelines... and now, a beverage company with a one-of-a-kind product.

In fact, I am so good at picking emerging MicroCap stock winners that a couple of years ago both The Wall Street Journal and USA Today did big stories on me.

Here's just a sampling of the market-trouncing gains about which the media were so excited:

• Cosco Singapore - 562% • Starbucks - 222.88%

• Chia Shin Cement - 430.60% • China Natural Gas - 452%

• NorthEast Petro - 121.33% • Posco - 188.44%

• General Steel - 670.86% • Yanzhou Coal Mining - 668%

• Lingo Media - 141.6% • Xinyuan Real Estate - 87.61%

A PULSE Quickening Opportunity With PLSB

Right now, however, I want you to focus on the Special Report I have written about Pulse Beverage Corp (PLSB). It's yours for FREE... no strings attached.

Here's just a brief preview of what you'll find in this brand new Special Report.

Pulse Beverage's water-based drinks were developed at Baxter Healthcare. Its parent company, Baxter International Inc. (NYSE:BAX), is a $12.8-billion-a-year global healthcare giant.

Pulse's drinks use a new, cutting-edge way to make sure nutrients are used by the body and not just passed through.

The ingredients in Pulse Beverage drinks meet an important FDA standard.

As you'll see, doctors should love the healthy benefits of Pulse Beverages.

Pulse Beverage has one-of-a-kind products that will dominate the virtually untapped nutritional drinks market... with few, if any, competitors.

The global market for Pulse Beverage products is nearly limitless... as the FREE Special Report will show you.

At less than $2, Pulse Beverage (PLSB) shares are incredibly affordable today when compared to Pulse's massive potential upside... it's an upside I see as initially topping out at around $7.98 in the coming months.

The management team at Pulse has been responsible at such well-known brands as Monster Energy Drinks, AriZona Tea, Rock Star, Vitamin Water, Everfresh Juices, Ocean Spray, Honest Tea and Fiji Water.

THIS MANAGEMENT EXPERIENCE IS WHY I AM CONVINCED YOUR BIGGEST MONEY WITH PLSB COULD BE MADE BY WAITING FOR WHAT I BELIEVE WILL BE A BUYOUT FROM PEPSI OR COKE!

Read The Special Report That Details Exactly Why Pulse
Beverages Could Be Your Next Big Stock Market Success

Quite frankly, you must read this timely Special Report because this is the kind of opportunity that most people don't come across regularly... especially in the red hot beverage sector.

A sector in which small companies ignite quickly... and a sector in which even the stock price of a small company such as Hansen's Beverage, which once traded at about 89 cents, is overvalued today at more than $61.

That makes Pulse Beverage a brilliantly uncommon opportunity for you...
one that could make you as much as a rapid 698%.

So read my FREE Special Report now. I'll dig into the entire beverage industry and show you all the sweet details about Pulse Beverages (PLSB)... and why you must own it now - at what could be its lowest price ever.

Owning Pulse today means you would be in line for a stock market success that I predict could reach 698% in a relatively short amount of time.

You can access my FREE Special Report right here.

Thank you for your time today and for your interest in Pulse Beverage Corp. (PLSB).

Sincerely,

Andrew Carpenter
Editor, Carpenter Global Stock Advisory

Liquid Bull Options Making Money

2011-05-03T17:22:00.001-07:00

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Wall Street Elite

Liquid Bull Options

As we've been saying for the last two weeks, if the technicals indicated a breakout on the three major market averages, we would turn bullish. And so we have. Last week the Dow, NASDAQ and S&P 500 all scaled to new heights. We're now expecting a sustained bull March toward former all-time equity highs – and where she stops, nobody knows.

[We're talking specifically about the Dow and S&P 500. We would be very surprised if the NASDAQ ever ascended to its former millennial year top.]

Here's the chart of those three indices for the last two months:

At this point, the only question is whether there will be a retest of the old resistance line, now become support (in red, above).

Either way, we're not waiting. Our best instincts tell us it's now time to go long this market and employ a deep-in-the-money CALL option strategy, against which we will be writing (selling) CALLS intermittently.

More on that in a moment, but first, a little more explanation of our shift in position.

First, here's a longer term chart of the Dow:

Reverse head and shoulders formations like those in our chart above are essentially continuation patterns – unless they break down. In that case they can be used as very reliable reversal signals. The neckline on the RHS pattern of our chart above (in blue) has now been broken, and so, according to TA, the march north continues.

With last week's price action, Dow Theory is also now signalling a bullish confirmation. Here's a year's worth of daily action on the transports, which this week took their cue from the Industrials to surge roughly 5%.

As the chart indicates, it was the transports that led the break to new highs before retreating to wait for a Dow Industrial confirmation. When the Dow punched clearly higher last Tuesday, the Transports surged, setting new 52 week highs a day later.

A Rising Corporate Tide

While there's been plenty of bad news on the geopolitical front, including rising oil prices and a massive Japanese economy that's been dealt a severe body blow, corporate America has been doing a brisk business, pocketing big bucks in productivity gains and even bigger profits from the falling dollar. Here's a look at top line growth from the S&P 500 for the last decade:

No problem here. In fact, so long as the dollar continues to slide there will be great benefits to large American firms increasingly doing business on foreign shores, with particularly strong growth for those moving product in emerging markets. In short, a weak dollar makes 3M and Kimberly Clark winners from Geneva to Kiev to Katmandu.

The prospects for the dollar? For those who care to listen to Warren Buffett, the Nebraskan put it plainly last week when he said, "No question that the purchasing power of U.S. dollar will decline over time. Only question is at what rate it will happen."

Here's the buck of late:

The dollar index has taken out the last two layers of support before it heads toward all-time lows, set back in the pre-crash months of 2008. We see little reason why the dollar should not test those levels, nor why corporate America should cease generating continued strong revenues from overseas while it persists.

Finally, all of the foregoing may not matter a whit.

What in the world are you talking about?

Sad to say, but it's true.

It's quite possible that the only thing that matters anymore is government monetary policy, or, more specifically, Fed easing, QEn as it's now known to markets.

The Fed will almost certainly continue to backstop the stock market with liquidity infusions – it has made it clear a number of times that this is now a policy goal. A rising market (or one that doesn't fall too far, at the very least) is a confidence builder without parallel. Rising asset prices gets people spending like nothing else – and, in turn, gets banks lending). Both of these phenomena are necessary for growth.

And know this, too. It's no longer necessary for the United States Federal Reserve to be the one flipping the print switch on quantitative easing. China's central bank has done a yeoman's job of keeping the world drenched in paper currency over the last twelve months. See here:

Could this have had anything to do with silver's parabolic rise over the last seven months? With the price of foodstuffs flying the world over? China's money supply has grown faster than any other country on the planet of late, at times hitting monthly year-over-year growth rates of almost 20%.

And why limit it to China and the U.S. Central banks as a group can't get enough of this game.

The most recent entrant to the party is the Bank of Japan. Last month, the BOJ added the equivalent of $250 billion to its balance sheets and estimates are that the number will swell to a sum larger than QE2 ($600 billion) before the game is over.

With this move, it should be noted that the Japanese now possess a sovereign debt to GDP ratio of about 205% (!), making it ever more likely that that decades old economic funk that country has suffered will continue well into the foggy future.

All of which is to say, that the markets are going to be climbing steadily on this vast pool of liquidity sloshing about the planet, and that it will all end miserably, but that we have no other choice but to play it for what it's worth.

Trade Now!

As we mentioned earlier, we're buying deep-in-the-money index CALLS to capitalize on the run we're expecting. We're going d.i.m. because we want to maximize the intrinsic value of our options. And although it diminishes the wallop effect that at-the-money or out-of-the-money options possess, it also makes for a more conservative play should the trade go against us.

Because we're going out a long ways, we'll also profit from selling CALLS against the position on a monthly basis.

Important: we're holding our current, more bearish trades just as they are, as a decline may well be in the works as we speak.

Wall Street Elite recommends: immediate purchase of the SPY January 2013 90 CALLS, trading for $46.87, (bid), a mere half percent premium over intrinsic.

With kind regards,

Hugh L. O'Haynew, Analyst, Oakshire Financial

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Copyright © 2011, Oakshire Financial, All Rights Reserved

The information transmitted is intended only for the person or entity to which it is addressed and may contain material that is confidential, privileged and exempt from disclosure under applicable law. Any review, re-transmission or other use of, or taking of any action in reliance upon the information by persons or entities other than the intended recipient is prohibited. If you receive this in error, please contact the sender anddelete the e-mail and its attachments from all computers. Oakshire Financial does not accept liability for any errors, omissions, corruption or virus in the contents for this message or any attachments that arise as a result of e-mail transmission.

Why Did ALQA Jump 58% in April?

2011-05-02T18:11:00.001-07:00

In This Issue:

"Analyst Kevin Kedra of Gabelli & Co. says that a non-branded lidocaine patch could take away about 65% of Endo's annual revenue – $760 million."

Countdown to $1.4 Billion Market Takeover…

Tiny ALQA Could Seize 80% of Lidoderm™ Market in One Year.

Investors are Starting to Jump in for a Huge Profit Ride. Don't Miss
Your Chance to Get in Early....

May 2, 2011

Not many companies can go from $1 million in sales to nearly $1 billion in a year. But Alliqua (ALQA) might be on its way to doing just that.

And judging by its booming share price, plenty of investors are betting it's going to happen.

Since announcing their patent filing for a transdermal "pain patch" in April, share price has shot up 87%.

Investors are excited because ALQA set its sights on the billion-dollar market for transdermal pain management – a market currently 100% controlled by Lidoderm™ from Endo Pharmaceuticals.

They're hot on Endo's heels, too. Which spells trouble for Endo because Lidoderm™ is about to come off patent.

That means Endo could face nearly immediate erosion of their $760 million annual Lidoderm™ sales to Alliqua or other competitors.

The race is on, but you might want to put your money on Alliqua (ALQA).

For a couple of reasons, they could quickly corner 65 percent of the lidocaine pain patch market.

One of Only Two Manufacturers in the World

A little-known fact about Alliqua is that:

Alliqua is one of only two manufacturers in the world that can manufacture the high water content aqueous hydrogels needed to make transdermal patches with Allequa's unique competitive advantages.

Alliqua owns one facility, and Covidian owns two, making this a very small and elite universe.

Alliqua's advantages include product stability and purity, biocompatibility, and – most significantly – reproducibility and with high water content, which could result in substantial manufacturing cost savings.

Any other potential entrant in the fast-growing pain patch market would have to contract Alliqua or Covidian to make competitive patches.

Talk about a high barrier to entry for Alliqua's competitors!

It would take millions of dollars and potentially several years for competitors to build and gain FDA certification for a comparable new facility.

That makes any possible competition a distant speck in the rear-view mirror. Which means AQLA can race ahead to a close-by and very lucrative rung on the Big Pharma ladder.

It's a race that is already heating up ALQA's share price – shooting up 87% in the three weeks after announcing their patent filing in April!

But it's still early in the game. ALQA could rocket to unheard of profits for early investors. Here's why:

ALQA's Quick Road to $1 Billion Revenue

The non-branded drug industry makes it possible for companies to grow revenues with unheard-of speed.

A report from Johns Hopkins University business law professor, Stacey Lee says, "Generic drugs generally enter the market priced 20 to 80 percent lower than their branded counterparts…."

Those low prices fuel rapid growth from the managed healthcare industry, which strives to keep costs down.

That's why, as Lee continues, when a drug goes off patent, a new non-branded version

"…can capture 44 to 80 percent of brand-name drug sales within a year after release."

Even at the low end, that means Alliqua could rapidly hit $600 million in sales.

But analyst Kevin Kedra of Gabelli & Co. says that,

"…a generic Lidoderm patch could take away about 65% of Endo's annual revenue – $910 million.

Imagine what happens to a company's share price when
they race from under $5 million in sales to $910 million within one
year!

Alliqua (prounounced a-LEE-qua) is the obvious and natural player to grab that market share.

Alliqua is already a supplier of ultra-high tech sheet hydrogels. The hydrogels are manufactured in huge sheets which are then shipped in bulk or cut and shaped to customer specifications.

If you've had a wound care patch applied in the hospital or doctor's office, there's a chance it was manufactured by Alliqua.

But unlike other hydrogels on the market, Allequa's hydrogels are cured with an electron beam. This results in a number of process benefits, as well as a natural adhesive feature that is compatible with human skin and does not adhere aggressively, as is the case with many chemically cured gels.

You're already familiar with hydrogel patches. They are applied like bandages, and deliver medications directly through the skin. You can get them for smoking cessation, motion sickness, and even vitamin B12 deficiency. And lately, they're being introduced for acne and cold sore treatments, wart removal, and cosmetic product delivery.

Alliqua's patented hydrogel technologies and exclusive manufacturing facility have already given them a lock on the transdermal drug delivery materials market.

But ALQA's unique hydrogel technology puts the entire transdermal delivery market in reach.

Next Up: The $32 Billion Global Transdermal Delivery Market

Transdermal wound care, medical device and cosmetic product delivery together are a massively large and growing market.

Research firm, Nerac, says,

"Thanks to advances in drug delivery and formulation technology, combined with the threat of patent expiration and diminishing sales of blockbuster drugs, those small, sticky skin patches aren't just for smokers anymore. The once stagnant transdermal delivery market is picking up steam and is forecast to grow dramatically over the next few years…. Some market analysts predict that the global market could reach as high as $32 billion by 2015."

The firm also points to dramatic drug development savings for companies with transdermal delivery technologies:

"Average R&D for a typical drug is $500 million over 15 years, while for a transdermal drug development time is roughly 4-8 years and costs $10 million to $15 million."

Like an mighty assembling army, Alliqua is aligning for victory in the battle for market domination.

They're filling out the ranks of their Board of Directors with heavyweights from the healthcare banking, insurance, and health services industries.

They've completed several important milestones in their pain patch development.

And they are – to use their phrase – "aggressively pursuing" completion of the non-branded version.

The stars are aligned on this one. ALQA could be one of the best performing stocks this year, based on these developments.

Savvy investors are getting on board ALQA now.

To Your Investing Success,

Your StockProphets Team

P.S. Keep a close watch on your email inbox for more ALQA updates.

Top 7 Stocks Under $10-Yours Free

2011-05-01T20:27:00.001-07:00

Today's Biggest Gains Come in Small Priced Packages

Fellow Investor,

As this record-setting bull market enters it's third year, many stocks are starting to get a little tired—and expensive. Now is NOT the time you want to chase expensive stocks that have already had their big run.

But it is the perfect time to snatch up some overlooked gems that Wall Street hasn't yet noticed.

The dynamos I'm going to tell you about all trade in the sweet spot between $5 and $10 dollars. That means they are less volatile than stocks that trade under $5, yet can deliver supersized gains if you buy them at the right time and at the right price.

I've scoured the markets and chosen my top seven stocks under $10 for today's market. My analysis is posted and waiting for you here. And it's yours absolutely FREE for a limited time.

I urge you to read it now to learn how you can double your money in the months ahead.

NEW Special Report—Yours FREE!

In this free Special Report you'll get the name of all 7 of my top stocks under $10 including:

The little-known tech company with its hands in all the hottest gadgets on the planet—tablets, netbooks, smartphones, you name it. Their technology extends battery life and improves screen displays. Snap it up before Wall Street takes notice.

Ready to make some money from the social media explosion? Here's your chance. This media stock stagnated during the recession, but is ready to come roaring back thanks to a major move into social media. The stock has doubled since mid-December and that's just the beginning. Get on board now for the next big run.

My #1 China play under $10. This stock is set to soar as the China's insatiable demand for continues. China uses more coal than the U.S., Europe and Japan combined. Currently, coal supplies 80% of China's electricity, and demand is only expected to grow with the completion of one new coal plant every month. Years from now you will be bragging to your friends about how you bought the stock cheap "way back when it was just $7 a share."

The global leader in the emerging field of genomics. The explosion in genomic information has led to the discovery of many new disease-causing proteins and the company's innovative technology provides a direct route from those genes to drugs, resulting in speedier and less costly treatments. The stock is a steal at today's price and positioned to move higher in the next few months thanks to an upcoming filing for FDA approval for its breakthrough drug targeting high cholesterol.

A consumer stock set for a massive rebound. Renewed consumer confidence will be a huge game changer this year and this once-time high flyer is about to be a hot stock. Added kicker: The company is becoming a player in Asia, especially Macao, the gambling capital of the world.

You'll get all the details on all 7 of my stocks under $10 in your free report "7 Top Stocks Under $10."

If there's one thing I learned in my 20+ years on Wall Street, it's that when opportunity presents itself, you can't hesitate. You've got to pounce!

Our top stocks under $10 move fast, so please don't wait to take advantage of this opportunity to learn how to nab double, even triple digit profits from the stocks in my new report, "7 Top Stocks Under $10."

You can get immediate access FREE—no strings, no gimmicks—but only for a strictly limited time. Click here to read it now.

Sincerely,

Hilary Kramer
Editor, GameChangers

P.S. Don't miss out! These stocks under $10 move fast and you should too! Go here to read your FREE copy now!

Step by Step - 90 Days to $90K

2011-04-22T17:42:00.001-07:00

We've seen so many people fail in home business simply
because they joined the WRONG opportunity(s).

They put their heart and soul into promoting it, but it
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These people leave the Internet thinking that online
business is a scam, but the truth is often that they just
joined the wrong opportunity.

If they would have put the same energy into a good online
plan (one that actually converts prospects into customers
and pays YOU the Lion's Share of the profits), they would
have succeeded.

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If you want to avoid joining the WRONG program and get on
the fast-track to online business success, I encourage you
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Regards,

Allan & Edwin

P.S. You don't need any experience, technical skills,
products, websites, list, a lot of money, selling, telling
or talking to people.

Just plug in and let them help you!

P.P.S. As a thank you for reading our email please accept
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So Crude: China Dances the Takeover Twist

2011-04-22T17:38:00.001-07:00

_______________________________________________________________________________________

So Crude: China Dances the Takeover Twist

To begin, let's just say there's little hope of traders and funds bailing out of their long crude positions until there's a genuine turnaround in the Libyan picture, and NATO proves itself ready to conquer Sir Nutman Qaddafi decisively. The longs have the momentum at this point, and with few willing to take the opposite side of the trade, we'll likely continue to see upward pressure on oil.

The only other event we could imagine triggering an oil unwind is a breakdown in the equity market, with oil speculators selling the prospect of a broad based economic downturn.

Beside that, there's only one other data point that could significantly impact oil prices on the downside, and that's Chinese demand. Take a look here at an overlay of the latest Chinese rate hikes against the state-controlled retail price of diesel and gasoline.

The price of gas has tracked interest rates higher for the last half year, and we feel the latest (and biggest) hike will begin to bite both retail motorists and businesses in a significant way. Moreover, with Chinese demand accounting for a full 40% of growth in global oil demand, the oil bears now have a prodigious arrow in their quiver.

That said, we don't believe this price rise (or any future rise) will be enough to sour traders on their current long contracts, but we do believe that the above chart will be cited widely when and if a crude correction begins in earnest. And the effect will likely be to a accelerate the selloff appreciably, further roiling equity markets and sending small crude traders home with their teeth in Ziploc baggies.

We'd pull the trigger early on all oil trades as soon as prices begin to turn south.

The Price of Oil in China

The Chinese are not indifferent to their growing need for oil, of course, and to that end their national oil companies, China National Offshore Oil Corporation, Petro-China and Sinopec, have been actively investing in safe assets with strong futures that can weather geopolitical storms and that will benefit exponentially from new extraction technologies.

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That's led them to Canada's oil sands, where they recently purchased a big chunk of Syncrude Canada, which operates the largest single source of oil in Canada, producing more than 111 million barrels annually. This acquisition adds to a growing portfolio of Canadian projects, including two producing properties bought from Athabasca Oil Sands Corp., a large property once owned by French giant, Total S.A., called Northern Lights, a joint venture deal with Penn West Energy that will exploit the latter's significant assets in the Peace River Basin and a 17% stake in a private concern known as MEG Energy Ltd. China has also purchased a great many leases on properties that have yet to be developed in both Alberta and Saskatchewan.

The Canadians, of course, are thrilled with China's nascent interest, as it makes up for recent American reluctance to invest in the area over environmental concerns.

Whether the U.S. re-enters the oil sands in a meaningful way, or just pressures the Canadians to stop selling important assets to the Chinese remains to be seen. But it's got to be one or the other. The U.S. is none too happy about Chinese interest in Alberta, but they're also reluctant to get involved in any project that might produce an environmental SNAFU. There's been one too many of those in recent years.

China's Natural Partner

Canadian Natural Resources (NYSE:CNQ) is one of the oil sands' biggest players. Its Horizon mine alone has 110,000 barrels/day capacity now onstream, with another 122,000 expected by year end from its 'Horizon 2/3' expansion. The company's Primrose property produces an additional 100,000 barrels a day.

CNQ's properties rely upon 'Steam Assisted Gravity Drainage' (SAGD) techniques to extract their oil, a process that also uses significant quantities of natural gas to get product to ground level. Here's what it looks like:

But the expanded Horizon project will be exploiting a newer range of technologies that should enhance the recovery process and, according to our sources, likely bring a bid for the project in the near future.

CNQ was likely preparing for this when they hired the Canadian arm of Sinopec to participate at every level of the Horizon expansion.

Technicals look constructive on the weekly chart, too:

A two year rising channel still in play. All technicals currently bullish.

1) It's an oil sand play with 2) an enhanced recovery angle and 3) a takeover twist, all-in-one.

Many happy returns,
Matt McAbby, Senior Analyst, Oakshire Financial

What do you think of China and Canadian Crude?
Share your thoughts here!
HOME / ABOUT US / CONTACT US / INVESTMENT NEWSLETTERS / FOREX & FUTURES / EDUCATION

Copyright © 2011, Oakshire Financial, All Rights Reserved

The information transmitted is intended only for the person or entity to which it is addressed and may contain material that is confidential, privileged and exempt from disclosure under applicable law. Any review, re-transmission or other use of, or taking of any action in reliance upon the information by persons or entities other than the intended recipient is prohibited. If you receive this in error, please contact the sender anddelete the e-mail and its attachments from all computers. Oakshire Financial does not accept liability for any errors, omissions, corruption or virus in the contents for this message or any attachments that arise as a result of e-mail transmission.

A Sunny Day for Albertan Muck?

2011-04-19T17:09:00.001-07:00

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Bourbon & Bayonets

A Sunny Day for Albertan Muck

Last week we spoke in broad terms about the importance of the Canadian oil supply for America in a world growing increasingly fractured along cultural/religiouslines.

We're particularly interested in the oil sands of Alberta, an area that's seeing increased investment dollars now that higher crude prices are making additional research and exploration possible.

Of course,where the money flows, so does politics. It's worth it to have a brief look at the politics surrounding the oil sands.

In truth, the political picture is now in flux. President Obama's approach to the 'revolutions' now taking place in the Arab world is putting him at odds with a number of current regimes, not least of which includes long time ally Saudi Arabia, whom the President appears to be alienating in serious fashion. And that doesn't bode well for the price of imported crude for the near term.

It also puts local supply at a premium.

Roughly 70% of the world's oil supply is controlled by OPEC, and of the remaining 30%, a full half is found in Alberta's oil sands. That makes it almost inevitable that the area will be exploited despite all the environmental dangers involved in extracting and processing the product.

President Obama recently indicated that his administration would have to 'study the 'destructive' effects' of the oil sands' business before granting permission for along-awaited pipeline called 'Keystone XL' to proceed to bring more than 500,000 barrels a day across the border.

As far as we can tell, the current State Department investigation into the matter is no more than a bone being thrown to environmentalists, and that there's really no intention to impede the future flow of oil from what Obama terms the most "steady and stable and reliable" source of oil for America.

In the same way that the President reversed an earlier decision regarding deep water drilling in the Gulf of Mexico, he'll most surely authorize Keystone and subsequently spin it for the projected $20 billion it will pump into the American economy and the $5 billion in taxes it will also shoot into state coffers along the way.

The Way of the Sand Separators

That said, here's a look at just one of the players we mentioned last week that we feel is worthy of immediate attention.

Suncor Energy Inc.(NYSE:SU) has a $68 billion market cap and derives the majority of its revenue from its oil sands' projects. They've been active in the Canadian oil sands extraction business since the late 1960's and have almost tripled total revenues since 2005. A look at the monthly chart for the last decade also points up some interesting recent developments.

Look here:

Before we dive in, it should be said that the longest term charts are generally a more reliable technical tool than those of a shorter-term nature, though, of course, they offer more belated trading signals. That said, the above monthly chart shows the latest rise in Suncor stock above its three year, rising trendline and its long term moving averages. Both good signs.

More important, however, may be the action of the Relative Strength Index and MACD indicators, both of which are now in bullish mode for the first time since the massive crude correction of 2008. As of this month, Suncor's monthlies are clearly flashing 'buy'.

Similar signs can be found on the weekly chart, too. Check it out:

Here, a rising trend channel is firmly in place, and the stock's price sits roughly in the middle of that channel. Moreover, Suncor's shares are now six weeks clear of all their moving averages (see red box, right side of chart).

All of the foregoing does not tell us that the stock is now going to rise. On the contrary, it could be there's are trenchment in the works that brings the SU lower by as much as 10% to the $40 range before the longer term trend is resumed.

That said, there's much to get excited about here.

A look at Suncor's production profile for the next ten years shows the following:

With significant new projects coming onstream nearly every year for the next decade and the dual prospects of 'peak oil' and a 'clash of civilizations' unfolding before us, we look very favorably on Suncor's chances of appreciating faster than the average western integrated producer.

Many happy returns,
Matt McAbby, Senior Analyst, Oakshire Financial

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A VIXtorious Option Trade

2011-04-19T17:04:00.001-07:00

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Wall Street Elite

A VIXtorious Options Trade

There's much to be said about sentiment readings, although, as we mentioned last week, they can be notoriously difficult to employ successfully. It's just too dang hard to quantify what's an 'extreme' reading for most of them. And it's only the extreme readings that we're concerned with.

That said, last week something interesting occurred that we don't see very often. A bevy of sentiment indicators lined up together in the overly-bullish column, producing what we feel is an event worth noting. Here's the way it came down:

·    AAII's individual investor poll flashed six year high readings,

·    Mutual Fund Manager percentage cash levels struck their lowest readings ever (i.e., these guys are all in),

·    Hedge Funds recorded their most bullish sentiment levels ever, according to a Bank of America/Merrill Lynch survey,

·    Futures traders are feeling more bullish than at any time in the last four years, according to a poll taken at futures.com

·    Economists, according to news-org polls are unanimously bullish, and

·    Newsletter advisories are offering their highest bullish readings in seven years.

We'll leave you to do the math, but it does look a tad worrisome, given that we haven't seen a breakout in the major averages to new highs yet, and that when we do, these number should only surge to even hotter and higher supercharged, atomic bullish levels. And what to do then?

Given the foregoing, our position is the same as we outlined in last week's letter. Unless and until we see new highs on the three major equity indexes, we remain committed to our bearish stance, and we're holding on to our SPX PUTS.

Technical Tangoes with Begrudging Barometers

Inexact sentiment indicators come in a variety of forms. The volatility gauges, for example, VIX, VXN and QQV, can also be used by traders at extreme levels as contrarian indicators. But this, too, is not an easy business.

Performing technical analysis on the VIX is more a rogue's game than honest trade, in our opinion, though there are some who swear by it. For our part, the facts inveigh against traditional charting of volatility indexes. For one, these indicators are derivative phenomena in the truest sense – they gives readings as a function of option prices, which are, in turn again, a function of the price of an underlying index, in the case of the VIX, the S&P 500. We say that makes it just a couple of steps too far removed from actual buyers and sellers to be used as an object of charting.

It's also plainly not a security. The bars or candles you see on a VIX 'price chart' do not represent anything that even approximates the chart of, say, Exxon Mobil – or any other stock for that matter.

And that means that any and all attempts to draw trendlines or apprehend 'breakouts' or analyze Relative Strength numbers or Stochastics, etc. have to be taken with a grain of salt.

But does that make the VIX chart useless?

Not at all. It's just the raw data, rather, that gives us the information we can genuinely use. That is, the level of volatility itself can be a clue to overbought/oversold levels, and, as Matt McAbby, our weekly Bourbon & Bayonets analyst, points out, the daily 'compression' reading on the VIX, i.e. the absolute movement on any given day's trade, can also assist forecasting efforts.

Let's look at the VIX for the last half-year:

After March's spike to highs over 30, the VIX has settled down to levels last seen just prior to the late-February index highs. Again, since that time we've seen no new highs, but the general level of bullishness has increased along with last Friday's plunge in volatility.

We're not Impressed

Far from seeing happy days in all of this, we tend toward a greater pessimism. And we believe we have support from the bond market, where it appears a bullish breakout may now be in the works for the long bond. Not a joke. A bullish breakout. Look here:

The technicals on TLT, the iShares Barclays 20+ Year Treasury Bond Fund, show a reverse head and shoulders bottom in the making, a bullish development that runs counter to all current conventional thinking about U.S. Treasury Bonds, but that fits hand-in-glove with the macro picture we see unfolding in markets over the next couple of months.

That is, an equity selloff and concomitant 'flight to quality' in the Treasuries.

You Know it Don't Come Easy

If and when it does transpire, we expect a battle royale in the bond pits. Major resistance from the long term moving average (in yellow, above) and the neckline that marks the breakout point for the head and shoulders bottom (in red, above) meet at exactly the same point.

If it comes down to it, two opposing technical outlooks will then be forced to duel over the near term direction of the bond market, and the winner should see outsized gains in fairly short order. We'll be watching closely for possible trades as the situation clarifies itself over the coming weeks.

In the meantime, our hunch is to bet against the crowd. We expect a decidedly bullish move in the mid- to long-end of the curve is on its way.

Trading a Tool for Profit

This week, we're recommending readers buy what we feel is now the cheapest security available, given the market's current makeup.

With the VIX literally toying with 52 week lows and investor sentiment at multi-year highs, and with the bond market pricing in a possible defensive outlook on the part of global investors, and all of this in the face of a Quantitative Easing regimen that looks not to be continued beyond June, we say volatility is about to go gangbusters and what you're seeing now is just the calm before the storm.

The trade is a simple one. Buy VIX CALLS.

The June 17 strike now trades with a spread of $4.50-$4.70. Any pullback in equities should see the VIX move into the mid-20's, at least. Even a bullish breakout – if swift – could engender a similar response.

Wall Street Elite recommends immediate purchase of the VIX June 17 CALLS, now trading at roughly $4.50.

With kind regards,

Hugh L. O'Haynew, Analyst, Oakshire Financial

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A Clash With Canadian Crude

2011-04-12T17:05:00.001-07:00

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Bourbon & Bayonets

A Clash With Canadian Crude

After several weeks' diversion, we return to perhaps the single most important factor in the current global market mix.
Oil.

NYMEX crude has jumped above $109 this week, and it's anything but nutty to expect gas prices to ratchet toward $5 and higher over the near term (if that sounds bad, Europeans are now paying the equivalent of $9 per gallon).

As this happens, we're forced to reflect on the macro picture that's responsible for this phenomenon and to consider how other, broad political and economic currents will shape our investing future, both near-term and far.

We see it like this:

There is currently a war going on. It's an undeclared, economic war that has always been with us, particularly since the rise of nation states roughly two centuries ago. But recently it has grown in intensity.

As we approach the inevitable Kondratieff winter – a period of great wealth destruction that will ultimately erase all economic excesses of the current era and eliminate all but the strongest and most necessary business enterprises, the tendency on the part of nations will be to protect at all costs the economic standing of its citizenry, and by extension, maintain the social standing of its elites.

This is precisely what we're seeing in the Arab world.

As commodity prices smacked the average Bahraini, Egyptian and Tunisian urbanite, he sought redress (rightly or wrongly) from his government. And fearing their ouster at the hands of an increasingly angry mob, the immediate response of elites was to placate and pacify that same rebellious cohort through economic means. Yes, political and legal reforms were also laid out, but money was at the core of the fix.

How many hundreds of billions of dollars were pledged to the Arab masses over the last few months is hard to accurately quantify – and how much will actually reach their hands is another question. But note well the direction of the response: to buy the rebels; to underpin the status quo with money; to 'buy their love'. However you want to term it, the method employed is symptomatic of the new era we are entering.

The fact that there may be other interested parties stirring up trouble in these areas is peripheral to the central issue. In the case of the above noted Arab states, Islamists and other garden variety radicals may add local flavor to the 'uprisings', but they do not change a general pattern that we should expect to see replicated the world over.

We are facing a global economic breakdown that will unfold over the course of years, if not decades, that will affect different regions in an unpredictable pattern, and that will deconstruct the current world order as a direct function of the breakdown in the existing global credit system.

Of course, there will be efforts to shore up that system in any number of ways, all of which will fail and simply prolong the suffering. And in tandem with these failed efforts will come wars of a more conventional nature, as the nineteenth century imperialist model of nation building and market building) is replaced with nation-saving and market-saving efforts. Stable resources and markets will be sought by all in an effort to stave off the speed of economic contraction.

We would also expect to see Samuel Huffington's vision of a 'clash of civilizations' to inform the alliances of the coming period, as those with similar cultures, languages customs, etc. form larger blocs to tackle common interests and problems.

It goes without saying that the healthiest societies will be those that live within their means, that are self-reliant and that create a voluntary system of support for those elements of society that are weakest and/or require temporary reprieve from accident, disaster or just plain bad luck.

Which brings us back to oil

Oil will be central to the coming battle – mostly for the role it will play in juicing the military's of the main players. And for that reason we see great potential for Canada, and particularly its oil sand producers, whom, we believe, will be increasingly relied upon to supply the needs of western states as the world increasingly aligns itself along religio-cultural lines. Canada currently supplies the U.S. with nearly one quarter of its oil. That number will only grow.

We'll have more to say about the oil sands and natural gas in the next few weeks. In the meantime, here are some major Canadian oil sand producers, whom we believe will be relied upon to fill the gap as the fault lines deepen.

Canadian Natural Resources Limited (NYSE:CNQ) currently has over 100,000 barrels a day capacity from its oil sand assets.
Athabasca Oil Sands Corp. (TSX:ATH) shares are up by nearly 70% in the last six months.
Canadian Oil Sands Limited (TSX:COS) is a pure play on the oil sands and therefore carries more risk.
Suncor Energy Inc. (NYSE:SU) is the largest producer by far in the group.

Many happy returns,

Matt McAbby, Senior Analyst, Oakshire Financial

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Copyright © 2011, Oakshire Financial, All Rights Reserved

The information transmitted is intended only for the person or entity to which it is addressed and may contain material that is confidential, privileged and exempt from disclosure under applicable law. Any review, re-transmission or other use of, or taking of any action in reliance upon the information by persons or entities other than the intended recipient is prohibited. If you receive this in error, please contact the sender anddelete the e-mail and its attachments from all computers. Oakshire Financial does not accept liability for any errors, omissions, corruption or virus in the contents for this message or any attachments that arise as a result of e-mail transmission.

The Number One Oil Stock for 2011

2011-04-12T15:12:00.001-07:00

This Man Wants to Make You Wealthy...

Marshall Diamond-Goldberg, President Legend Oil & Gas

And there's a good chance he could do it...
but only if you act on my latest pick immediately!

Marshall Diamond-Goldberg is bound determined to build his new company, Legend Oil and Gas, into a major new independent oil and gas producer. He's off to a great start.

His new company plans to tap the largest sweet oilfield in North America… the Bakken oilfield in the Williston Basin, North Dakota.

He sees fortunes being made for his shareholders… and you can get in now at a fraction of where this stock could be in the near future.

Buy Now: Legend Oil and Gas
(OTCBB: LOGL)

Setting stakes in a 200-billion-barrel ocean of oil!

The Bakken is the richest oil play in the market today, hosting upwards to 200 billion barrels of oil-in-place.

A junior in this location could be the buy of a lifetime… and I urge you to make your move now.

Marshall Diamond-Goldberg hit the Bakken sweet spot and you can bank on this… it could soon be pumping thousands of barrels of oil per day!

Virtually every well drilled in the Bakken hits oil and of those, nine out of ten make money.

It should come as no surprise then that the Bakken is making millionaires hand over fist.

Legend Oil and Gas (LOGL) secured a key location in the center of the Bakken Shale oil deposit. While it's too early to determine how much oil LOGL may ultimately produce, the area is known for high-performance wells producing in excess of 1,000 barrels per day.

If you want to get on board, there's still time to get in at ground-floor.

Once Marshall's new company gets going, its stock could soar 20 to 30 times what it sells for today.

$2,500 Could Yield $72,500 Gains for Today's Shareholder!

To the Profit-Seeking Investor:

Marshall Diamond-Goldberg is a name to remember. He's a little-known giant in the oil and gas exploration business that has already made countless millions for investors in his past projects.

His latest, Legend Oil and Gas (LOGL), could be his biggest yet.

Set in Divide County, North Dakota, Legend Oil and Gas (LOGL) is embarking on an exploration and development plan to tap the super massive 200 billion barrel Williston (Bakken) oil field.

I know of no better place in North America to be seeking these kind of profits. It's easy for me to see that LOGL shareholders are set to make fortunes.

Legend Oil and Gas stock (LOGL) now sells between $1.00 and $2.00, and the growth potential is staggering.

My projections are for a quick 670% gain followed by longer term gains north of 3,300%

With just a handful of successful wells in the Bakken, Legend Oil and Gas could be pumping thousands of barrels per day into America's oil pipelines. Its stock could skyrocket and LOGL investors who get on board now could make a fortune.

This is no time to wait and see what comes next. I strongly recommend that you act on my LOGL buy recommendation immediately.

Bakken Oil Production
is Skyrocketing

Advanced oil recovery techniques have unlocked reserves once thought to be unrecoverable in Bakken's tight shale.

With these techniques, U.S. oil production could be increased as much as 10-fold… a blessing for America and a boon for investors.

Read more about the Bakken in my new online report, available free through the link on left.

Junior companies like Legend Oil and Gas (LOGL) are increasingly hard to find, especially in the Bakken. Be thankful you learned of LOGL when you did.

If you haven't already called your broker, follow the link below to read my new online report about Marshall Diamond-Goldberg's experience in the Bakken, his growth plans for Legend, and why he's on track to make fortunes for new LOGL shareholders.

Yours for Profitable Investing,

Eric Dany

PS. The Bakken oil reserves could boost America's oil reserves by an incredible 1,000 percent. This could be one of the last opportunities you'll find for profiting from an entry-level Bakken junior. Take a close look at Legend Oil and Gas (LOGL) and load up now while shares still trade below $2.00.

Eric Dany has received a cash payment from a third party shareholder to prepare and
publish this report on Legend Oil and Gas. Select here to read important disclaimer

Libyan crisis means U.S. Oil-company LBYE shares could double, here’s why

2011-04-07T05:31:00.001-07:00

The Crisis In The Middle East Is Wreaking Havoc On Oil, Pushing Prices To Over $100 A Barrel! 2 Months From Now, American Oil May Be Our Only Option. Buy LBYE Now And Lock In
Your Explosive Profits Today!

Fellow Investor,

As we speak, the current conflicts in Egypt, Libya and Bahrain are spreading like wildfire, reshaping the world as we know it...

Riots and protests are ramping up throughout the middle east, rumors are swirling that Iran and Saudi Arabia could be next and it's wreaking havoc across the global markets...

Pushing oil to over $100 a barrel for the first time since 2008.

Even more alarming, is the fact that this price spike could be just the beginning, because when this civil unrest hits Iran and Saudi Arabia, oil shipments could come to a screeching halt as the Straight of Hormuz and the Suez Canal are locked down, leaving the rest of the world stranded and dry.

This turn of events could make $100 a barrel oil look like chump change as prices soar through roof on the way to $400 by the time all is said and done...

And leaving American oil companies one of the last and only choices the crude dependent countries of the world can turn to.

A shocking statement, I know...

But luckily for us, we have advanced knowledge of the direction that this commodity juggernaut looks to be taking.

However, this may be our last chance to bank enormous gains as oil shoots to $150, $200 or even $400 a barrel.

If you're not already holding oil stocks, there has never been a better time than now to do so...

But even if you are - you could always use more - especially if that company has massive upside potential that we all look for as investors.

And that potential lies with Liberty Energy (LBYE).

Because not only does LBYE have the right pieces in play to profit in the future, but they're also ready to help you profit now as they bring more and more of their active wells online.

I'll get into this company's amazing story in my hot off the press special report, but first, I want you to realize that...

The shares you buy Today for less than a buck could be
worth $45,000 - just in time for summer!

But LBYE's outlook gets even better when keeping this in mind...

Right now, Liberty Energy isn't even operating at full throttle.

Imagine what happens as Liberty brings all of its 280 wells online, company sales could explode to an astounding $421.9 million at today's price per barrel, sending shares soaring...

But, if oil heads towards the $125 a barrel it looks to be aiming towards, that profit potential could double - or even triple to what is predicted!

If that happens, I suggest selling half at $4.00 - turning $5,000 into a whopping $45,000!

The other half?... Let it ride!!

But that's just part of the story...

Don't wait any longer, see why I believe shares in LBYE could make you rich, almost overnight, or come so close, it won't matter.

Don't wait on this! Get in on LBYE now before the profit door slams shut!

To get all the details in my Special Report you can do so by selecting here, or click on the button below - I'm sure you'll see why I believe that Liberty Energy could be the best oil play of 2011!

To Your Future Wealth,

Shawn Ambrosino
Analyst, M3 Profit Accelerator

Betting Against Odds and Good Sense

2011-04-05T19:56:00.001-07:00

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Wall Street Elite

Betting Against Odds and Good Sense

I. Open Trades

We have a number of open positions that require comment.

The first is the trade we opened back in November of last year on which we subsequently made repair in February. It was a DBA/TLT zero premium initiative for which we rolled out the (short) TLT PUT option until June.

There's still some time before expiry, but things are shaping up nicely, and we still expect our 80 strike option to expire worthless by the time expiration rolls around. TLT (the iShares Barclays 20+ Years Treasury Bond ETF) currently trades at $92.19 and would have to drop in excess of 13% in short order to put our repair in jeopardy. The option was last quoted without a bid. Ask was $0.06.

Moreover, TLT has been building a nice base recently, in the face of disasters in the Pacific, European debt insecurity and ongoing tensions in the Middle East and North Africa.

Here's six months daily trade in TLT:

TLT is now showing two months worth of bullish action, with higher highs and higher lows (in red, above) since bottoming the second week of February. It has also climbed above its short term MA and needs a bit more near term strength to bring its RSI firmly above the 'waterline' 50 level. before taking on resistance at 95 (long term MA,

At that point resistance could be strong. The long term MA at 95 (in yellow, above) looks daunting.

Until then, however, we have little reason to believe that TLT's strength will wane. Investors should worry only about trendline support failing at roughly TLT 91.

We'll have more to say about the long bond shortly.

__________

Our next trade was the February 21^st XLY/IYZ 'spread' that has been in the black almost since the get-go, but hasn't broken out the way we expected. June expiry on the PUTS is also a ways away, but we prefer to close out here and reinstate the trade if we see some positive movement in the weeks ahead.

The XLY June 36 PUTS now trade for $0.50 and the IYZ May 23 PUTS are fetching $0.24. Selling the former and buying back the latter will score $26 per pair traded. Not the Tyson knockout punch we had anticipated, but a nominal profit nonetheless.

__________

Third, our trade of March 21^st, a long-short piece employing the USO (long) and XLY (short) ETFs has moved in the right direction, and we're closing out. But before we get to the details, a quick flashback to some interesting words from a friendly chap named Ano, who posted the following on the Oakshire site on the 28^th of last month. (Sorry, we couldn't resist.)

Your final recommendation to BUY USO and SHORT SELL XLY deserves a kick in your backside!!

From the day of your recommendation until today, you'd be down over USD4k for 1000 shares traded in USO and XLY. Assuming some folks follow your advise [sic] and traded 100,000 shares, they'd be getting a margin call about now and probably jump down the tallest building they can find.

However, if we did the exact opposite of what you recommended, i.e. SHORT SELL USO and BUY XLY, we'd be up USD4k for 1000 shares traded.

In conclusion, we'd all be richer just going the opposite of your advise [sic]. Thanks again, chump.

May the good Lord bless those that bless us. And as for Ano and his 100,000 shares (chuckle), he should feel free to cash out today (at Friday's closing prices; USO $43.17 and XLY $39.30) with a cool $98,000 profit.

And for those who, at Ano's suggestion, went for 1000 shares per side, enjoy your $9800.

Finally, for those who'd be richer for going against our advice, please continue to do so. And stay away from tall buildings.

__________

Our last trade on the block is last week's two-way, long CALL, long PUT, the first leg of which we're closing out today for a 39% profit. We bought the May 1425 CALL options for $0.90 and they last traded at $1.25. Jump here on the CALLS and hold the PUTS 'til further notice.

II. This Week's Trade

Part of the reason we decided to exit the USO/XLY trade was due to the significant risk premium already built into the price of crude. We remind subscribers that after a 50% spike in the price of oil before the Iraq war in late 2002/early 2003, crude subsequently dove by 34% when then-President Bush finally declared war.

See the graphic:

The circumstances today, of course, are not identical, but the potential does exist for a quick return to levels that preceded the Libyan OP. Of course, crude could also climb to new highs should the general Middle Eastern situation continue to deteriorate or should new elections in Nigeria bring more unrest to that country (general election April 9^th). Nigeria's production is larger than Libya's.

That same risk premium is also finding expression in those higher bond prices we spoke of earlier. The middle to long end of the yield curve is now acting as a relief valve for those afraid of the continued effect of elevated oil prices.

The Big Question

We find it hard to believe the stock market can continue to rise on anything but the waves of liquidity currently sloshing about the banking cesspools. Productivity gains have been all but wrung out of an overworked labor force that's also seeing real hourly earnings significantly eroded (see chart below).

Who's going to spend in this environment?

More than that, who has money? The number unemployed is now at bedrock bottom levels. Look here:

At this stage of the game, should the risk trade come on again – and we are hedging this possibility – we believe it will have to include the financials. The telecoms, on the other hand, have been wildly overbid of late in the wake of a number of high profile deals.

Check it out:

A clear tale of overbought (telecoms) vs. downright weak (financials) that we believe is tradeable – should the market, against all reason and nature, continue to rise.

We are buying CALLS on the Financial Select Sector SPDR ETF (NYSE:XLF), and selling CALLS on the iShares Dow Jones Telecommunications ETF (NYSE:IYZ).

Wall Street Elite recommends immediate purchase of the XLF September 18 CALLS, now trading for $0.35, and selling the IYZ August 25 CALLS for the same price – in equal numbers.

With kind regards,

Hugh L. O'Haynew, Analyst, Oakshire Financial

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The information transmitted is intended only for the person or entity to which it is addressed and may contain material that is confidential, privileged and exempt from disclosure under applicable law. Any review, re-transmission or other use of, or taking of any action in reliance upon the information by persons or entities other than the intended recipient is prohibited. If you receive this in error, please contact the sender anddelete the e-mail and its attachments from all computers. Oakshire Financial does not accept liability for any errors, omissions, corruption or virus in the contents for this message or any attachments that arise as a result of e-mail transmission.

Does Cramer's Timing Mean Anything?

2011-04-02T17:01:00.001-07:00

_______________________________________________________________________________________

Desperately Seeking Commodity Clarity

We've got a few issues to cover in today's report, so let's move right to the charts.

First on the docket is silver.

Can't get around the fact that silver's on everyone's minds – and lips – these days, and certainly inside quite a few pockets, too, as the following chart reveals:

Folks are quite simply buying silver American Eagles out the wazoo. For two years now the fever has been on, and the latest infectee is none other than the most visible market commentator on the planet, Jim Cramer. Check out this video, wherein the man on 'The Street' explains that 'spot' silver is no longer a guide to what you'll have to pay for the real thing.

http://www.thestreet.com/video/11066727/cramer-buy-physical-silver.html

Sorry to say it, but now that Cramer has gone public, we fear the worst. Yes, we admit we didn't believe silver was a good investment at $30, and now that it's 20% higher we believe anyone who doesn't take profits here is also wacked. Yes, we'll take heat for it. Yes, we may have to go back into hiding. But there's going to be one big, mean reversion in the near term that's going to slap this contract from the weakest hands and provide a great buying opportunity for those with stomachs of silver?

Expect the selloff to be precipitous and vertiginous. Not for those without a good supply of Dramamine.

Does Cramer's Timing Mean Anything?

So mainstream is the silver bug these days that it couldn't have waited a whole lot longer to get approbation from the likes of Jim Cramer. And count on it, Cramer's got influence. That influence extends to some of the weakest minds in the investment universe. There will no doubt be a great surge of latecomers entering the market now, eager to cash in on the silver bull's unbelievable profitability. Alas for them. For it will have been too late.

Here's a look at the iShares Silver Trust ETF (NYSE:SLV) weekly chart for the last two and a half years – from what was then a very deeply oversold bottom to the present.

SLV's price action is near parabolic. Following Mr. Jim's advice now and you'll end up eating field mice on a spit.

After a 100% climb in the last six months, on double the weekly trading volume, with RSI levels that correspond at best to long pauses in price movement, then you're begging for a cowboy boot in the bucket.

Bottom line: don't go near it.

Oil Reserves Maxed Out

It doesn't matter anymore if you're an oil bull, or if everyone is reverting from nuclear power to more traditional forms of destroying the planet, or if Libya is winning over the Al Qaeda rebels, or if a general Middle East conflagration is at hand – oil inventories are full.

Full stop.

That means there's barely any room left at the Cushing, OK transit point, where the price of crude settles before moving from the Gulf coast north to consumers. The tanks at Cushing now hold a record 42 million barrels (capacity is 44), which means somebody is going to have to sell because the possibility of taking delivery will not exist at the next rollover.

Here is the price of oil for the last six months:

A double top has been set that may or may not be of long term significance, but in the short run, it will certainly matter. The shorts are well aware that those who normally take delivery of crude won't be able to at expiration. Add to this a general rise in crude stocks across America (up another three million barrels for the week ended March 25^th) – the tenth time in eleven weeks – and you have the makings of a potentially short, sharp downdraft in the weeks ahead.

How to play it is a separate question.

The correlation that normally holds between oil and oil company shares has recently broken down. See here:

A breakdown in the correlation between the two is often an indication that oil company shareholders are looking ahead of the current spot price toward an imminent move in the underlying commodity.

If a crude selloff is in the works, PUTS on the XOMs of this world might be a wise move...

But betting against the oil services group might be a mistake. A recent surge in that sector could well continue if reports out of Saudi Arabia are true, viz., that the Kingdom requires a whole lot more capacity to buy its subjects' loyalty.

Many happy returns,

Matt McAbby, Senior Analyst, Oakshire Financial

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Euroad to Nowhere, interested?

2011-03-25T17:21:00.001-07:00

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Bourbon & Bayonets

Euroad to Nowhere

We've spoken a great deal about oil in the last few weeks, but new items are emerging on the economic radar that require discussion, so we're shifting focus for the time being.

The first issue is European sovereign debt.

Under the cover of NATO bombing the ancien regime's assets in Libya and the Japanese earthquake and its devastating aftermath, European fringe bonds have sold off in manic fashion. We're talking about Ireland and Portugal specifically – though not exclusively. Greece, too, has seen growing waves of selling and Spain is looking more the dog daily.

But Portugal is now in the center ring of the ongoing European circus. The Iberian pauper was thrown to the debt dogs after its minority government stated it could no longer govern. The cause of the resignation was refusal of opposition parties to endorse an austerity plan that would have avoided triggering a European bailout. But now that tax hikes and spending cuts have been voted down, Portuguese bond yields are screaming higher, and it appears the peninsula dwellers will now be forced to accept terms dictated by their European overlords a la Ireland and Greece. Either that, or go bankrupt.

A Zoo of Debt

The scene now shifts to Brussels, where those same lords and ladies are meeting to decide how best to show the world that Europe is not a joke that has morphed from funny to grotesque, and that earlier blowups in Greece and Ireland have now seen their end in Portugal.

How that show goes is anybody's guess, but for our part, it appears that well-fed Europeans living in la-la land for the better part of a century will now have to deal with the proverbial chickens coming home to roost. When you live too high off the hog for too long on other people's money, you eventually forget how to work and save. And when you can no longer pay for your feed, and no one wants to give you anything without loan shark rates attached, you eventually to learn to live within your means. Upshot is: no matter how you slice it, countries like Portugal, Ireland and Greece will ultimately decree upon themselves austerity whether they like it or not.

Until they get it together, however, the lords of Germany and France will have to pay for the periphery states to borrow at cheaper rates, one consequence of which will be strong headwinds in the face of the German and French economies.

Do Not Invest In Europe

While Europe may look like a soggy souvlaki in a bun, Japan is indescribably less appetizing from an investment perspective.

Take a look at this:

Japan had been counted upon (along with China) to help the EU support the European periphery by soaking up those countries' new debt issuance. Japan is plainly not in any position to continue in that role at the moment, as they're now preparing to turn to global capital markets to finance their own reconstruction.

And as the above chart shows, Japan is literally 'off the charts' in terms of its national debt to revenue ratio, with a current reading of better than 1900% (!), and in the process of expanding appreciably. With new financing needs about to explode and tax receipts expected to plummet, that country will be years in the recovery, and won't be in the lending game in any appreciable way for gawd knows how long.

Around the World in 80 Words

In the meantime, Egypt's market sold off (again) and is down 6% as of this writing, with tanks parked outside the Cairo Exchange. Libyan tanks, too, are active against that country's rebels. And Moody's just downgraded 30 Spanish Banks, leading Euro pessimists to view Spain as the next continental domino to fall. (Spain has 20+% unemployment and a rocky real estate outlook.) Globally, automakers are due to run out of microchips, sensors, rubber and other necessary parts due to the disaster in Japan. Look for plant shutdown to begin shortly.

When it's time to make money

Best to make it in U.S. dollars. There's not going to be any great appetite for yen for the next few months, despite the recent rally and premature calls to buy the dip. Nor will the latest push higher in the Euro last much longer. There's simply nothing underpinning either move, save inertia.

The dollar's gonna rise, folks. Play it with DXY options perhaps. Long dated calls may be the best bet.

Many happy returns,

Matt McAbby, Senior Analyst, Oakshire Financial

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No Fly Market?

2011-03-22T16:42:00.003-07:00

_______________________________________________________________________________________
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Wall Street Elite

No Fly Market?

A brief rundown on our open trades before we get to our latest.

Last week we reported that our IYZ/XLY 'spread' was profitable by about $25 per pair traded and that we were holding out for bigger and better things.

As of this last Friday's close, the spread widened just marginally to about $30 per pair traded, but we're still not satisfied. We believe in this one. Remember, it's a telecom vs. consumer discretionary bet that says the discretionaries have more to lose in a general equity selloff than the telecoms, as weak as the latter may be. Telecoms have essentially become utilities in the eyes of the market. They therefore stand to gain and lose much less than the broad market over time.

Next, the calendar spread that we posted on Valentine's Day has returned us nothing but love. Our original call was to sell the February SPX 1330 PUTS and buy the April 1330s. The Februarys expired worthless, putting $690 in our pockets and the Aprils have appreciated in value from our original purchase price of $32.20 to $59.00, a profit of 83%, and we feel conservative investors should now consider closing out.

Remember, too, that we sold the March 1330 PUTS last week against the Aprils and again pocketed the full load on Friday's expiration. That was another fat $4010 in the wallet for each option sold.

For those who choose to close out now – and who followed all our recommendations – your total take on the trade is $7380 on an initial outlay of $3220, or 129%.

For those who still expect more downside and want to hold the April PUTS a while longer, we'll have more to say later. In the meantime, best of British luck to you.

Speaking of the British

The beginning of the war in Libya marks a turning point for oil. Not so much for the price of the commodity – though that may be affected, too. More, we say, for the attention it starts to receive in the financial press as a rally killer.

We've already spoken about this a number of times: there's going to be a point at which the price of oil begins to put a dangerous choke-hold on the global economic recovery, and whether that begins at crude $105 or crude $110 – or whether it's already started, as we postulated a couple of weeks back – is less of a question. More important is the relationship between oil and the equity market, which we now believe is operating inversely and will cause significant downward pressure to be applied to stocks as oil appreciates.

Of course the war on Libya is also adding to the equity sorrows, as Colonel Qaddafi seems intent on blowing up important oil infrastructure upon nearly every military setback. And seeing as the Libyan rebels still maintain control over a large proportion of that country's oil assets, it's elementary that there will be further sabotage.

Middle Eastern woes, of course, are not limited to Libya. The Saudis and neighbouring Gulf States are having significant problems of their own, and most recently Syria, though not an oil producing state, is also heating up, with seven police officers killed in riots there and tens of protesters, along with the torching of several government buildings.

The danger with Syria resides in the conflict spilling into cross-border Turkey, Iraq and Jordan, where significant numbers of Druze and Kurd tribesmen harbour dreams of national sovereignty and are in open conflict with a number of those regimes.

Dramatis Personae

Another actor performing in the current oil drama is the U.S. dollar, which is now teetering at an important support pivot. Look here:

Given the current macro context, we're dollar bulls. But we're not going to fight the technicals, which at this stage look decidedly bearish. As we write, it appears that last year's support at roughly 75.60 is being taken out, pointing to continued weakness in the weeks ahead.

After that level, DXY 74.17 emerges as the next support. If there's going to be a turnaround for the dollar, everything will be predicated on DXY holding above that level. If there's a breakdown, the dollar will likely extend lower toward its all-time bottom at 71.31 (not shown on chart).

In short, continued dollar weakness will be a big plus for oil bulls, as crude is priced in U.S. bucks.

What's in it for us?

There are those who claim that the oil market is now in the grip of speculators, that there's plenty of oil to go around and that current prices have little to do with the supply/demand reality. Don't believe them. Saudi Aramco just raised its prices to customers in Asia and Europe by a significant margin. And that's not the kind of activity a country like Saudi Arabia, whose existence is dependent upon oil price stability, engages in while crude prices are surging and domestic unrest is beginning to seethe.

Therefore

This week, we're trading a variation of a theme we've been playing for nearly a month. It's oil related, and it pits the price of crude against the average consumer's ability to spend on discretionary items, even as he's forced to pay more to operate his vehicle.

Yes, employment numbers may be picking up, but real income is not. As the chart below shows, personal disposable income is taking a big hit from higher food and gas costs:

While average hourly earnings are up zilch in February and just 1.7% year over year, the cost of gas in just the last six months is higher by nearly 40%.

Our trade looks like this: we recommend you go long oil using the United State Oil Fund ETF (NYSE:USO), now trading at $41.93, and short the discretionaries with the SPDR Consumer Discretionary Select Sector ETF (NYSE:XLY), now trading at $37.86.

For every 100 shares traded (on both sides) your cost will be roughly $300, net commissions. The trade will become profitable as the spread between the two securities widens, but will lose should XLY start to close the gap with oil.

We'll be monitoring the trade with an eye to selling options against it, but in the meantime, keep an eye for yourself, and decide now at what point you're going to bail out with a loss.

Wall Street Elite recommends purchasing (NYSE:USO) shares and selling (NYSE:XLY) shares in equal numbers.

With kind regards,

Hugh L. O'Haynew, Analyst, Oakshire Financial

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Copyright © 2011, Oakshire Financial, All Rights Reserved

The information transmitted is intended only for the person or entity to which it is addressed and may contain material that is confidential, privileged and exempt from disclosure under applicable law. Any review, re-transmission or other use of, or taking of any action in reliance upon the information by persons or entities other than the intended recipient is prohibited. If you receive this in error, please contact the sender anddelete the e-mail and its attachments from all computers. Oakshire Financial does not accept liability for any errors, omissions, corruption or virus in the contents for this message or any attachments that arise as a result of e-mail transmission.

No Fly Market?

2011-03-22T16:42:00.001-07:00

_______________________________________________________________________________________
To unsubscribe, please click the unsubscribe link at the bottom of this email - Thanks :)

Wall Street Elite

No Fly Market?

A brief rundown on our open trades before we get to our latest.

Last week we reported that our IYZ/XLY 'spread' was profitable by about $25 per pair traded and that we were holding out for bigger and better things.

As of this last Friday's close, the spread widened just marginally to about $30 per pair traded, but we're still not satisfied. We believe in this one. Remember, it's a telecom vs. consumer discretionary bet that says the discretionaries have more to lose in a general equity selloff than the telecoms, as weak as the latter may be. Telecoms have essentially become utilities in the eyes of the market. They therefore stand to gain and lose much less than the broad market over time.

Next, the calendar spread that we posted on Valentine's Day has returned us nothing but love. Our original call was to sell the February SPX 1330 PUTS and buy the April 1330s. The Februarys expired worthless, putting $690 in our pockets and the Aprils have appreciated in value from our original purchase price of $32.20 to $59.00, a profit of 83%, and we feel conservative investors should now consider closing out.

Remember, too, that we sold the March 1330 PUTS last week against the Aprils and again pocketed the full load on Friday's expiration. That was another fat $4010 in the wallet for each option sold.

For those who choose to close out now – and who followed all our recommendations – your total take on the trade is $7380 on an initial outlay of $3220, or 129%.

For those who still expect more downside and want to hold the April PUTS a while longer, we'll have more to say later. In the meantime, best of British luck to you.

Speaking of the British

The beginning of the war in Libya marks a turning point for oil. Not so much for the price of the commodity – though that may be affected, too. More, we say, for the attention it starts to receive in the financial press as a rally killer.

We've already spoken about this a number of times: there's going to be a point at which the price of oil begins to put a dangerous choke-hold on the global economic recovery, and whether that begins at crude $105 or crude $110 – or whether it's already started, as we postulated a couple of weeks back – is less of a question. More important is the relationship between oil and the equity market, which we now believe is operating inversely and will cause significant downward pressure to be applied to stocks as oil appreciates.

Of course the war on Libya is also adding to the equity sorrows, as Colonel Qaddafi seems intent on blowing up important oil infrastructure upon nearly every military setback. And seeing as the Libyan rebels still maintain control over a large proportion of that country's oil assets, it's elementary that there will be further sabotage.

Middle Eastern woes, of course, are not limited to Libya. The Saudis and neighbouring Gulf States are having significant problems of their own, and most recently Syria, though not an oil producing state, is also heating up, with seven police officers killed in riots there and tens of protesters, along with the torching of several government buildings.

The danger with Syria resides in the conflict spilling into cross-border Turkey, Iraq and Jordan, where significant numbers of Druze and Kurd tribesmen harbour dreams of national sovereignty and are in open conflict with a number of those regimes.

Dramatis Personae

Another actor performing in the current oil drama is the U.S. dollar, which is now teetering at an important support pivot. Look here:

Given the current macro context, we're dollar bulls. But we're not going to fight the technicals, which at this stage look decidedly bearish. As we write, it appears that last year's support at roughly 75.60 is being taken out, pointing to continued weakness in the weeks ahead.

After that level, DXY 74.17 emerges as the next support. If there's going to be a turnaround for the dollar, everything will be predicated on DXY holding above that level. If there's a breakdown, the dollar will likely extend lower toward its all-time bottom at 71.31 (not shown on chart).

In short, continued dollar weakness will be a big plus for oil bulls, as crude is priced in U.S. bucks.

What's in it for us?

There are those who claim that the oil market is now in the grip of speculators, that there's plenty of oil to go around and that current prices have little to do with the supply/demand reality. Don't believe them. Saudi Aramco just raised its prices to customers in Asia and Europe by a significant margin. And that's not the kind of activity a country like Saudi Arabia, whose existence is dependent upon oil price stability, engages in while crude prices are surging and domestic unrest is beginning to seethe.

Therefore

This week, we're trading a variation of a theme we've been playing for nearly a month. It's oil related, and it pits the price of crude against the average consumer's ability to spend on discretionary items, even as he's forced to pay more to operate his vehicle.

Yes, employment numbers may be picking up, but real income is not. As the chart below shows, personal disposable income is taking a big hit from higher food and gas costs:

While average hourly earnings are up zilch in February and just 1.7% year over year, the cost of gas in just the last six months is higher by nearly 40%.

Our trade looks like this: we recommend you go long oil using the United State Oil Fund ETF (NYSE:USO), now trading at $41.93, and short the discretionaries with the SPDR Consumer Discretionary Select Sector ETF (NYSE:XLY), now trading at $37.86.

For every 100 shares traded (on both sides) your cost will be roughly $300, net commissions. The trade will become profitable as the spread between the two securities widens, but will lose should XLY start to close the gap with oil.

We'll be monitoring the trade with an eye to selling options against it, but in the meantime, keep an eye for yourself, and decide now at what point you're going to bail out with a loss.

Wall Street Elite recommends purchasing (NYSE:USO) shares and selling (NYSE:XLY) shares in equal numbers.

With kind regards,

Hugh L. O'Haynew, Analyst, Oakshire Financial

What do you think of this recommendation? Click here to comment on this article.
Home I Investment Research I Forex & Futures I About Us I Contact Us

Copyright © 2011, Oakshire Financial, All Rights Reserved

The information transmitted is intended only for the person or entity to which it is addressed and may contain material that is confidential, privileged and exempt from disclosure under applicable law. Any review, re-transmission or other use of, or taking of any action in reliance upon the information by persons or entities other than the intended recipient is prohibited. If you receive this in error, please contact the sender anddelete the e-mail and its attachments from all computers. Oakshire Financial does not accept liability for any errors, omissions, corruption or virus in the contents for this message or any attachments that arise as a result of e-mail transmission.

Transporting Disaster

2011-03-20T00:01:00.001-07:00

_______________________________________________________________________________________

Bourbon & Bayonets

Transporting Disaster

We live in a world that's filled with suffering and disaster. From floods in Australia to earthquakes and tsunamis in Japan to revolutions and bloody counter-revolutions in the Middle East, the entire globe is going through an upheaval unlike any we've seen in a while.

And, as can be expected, so, too, are markets.

And when the markets are in turmoil, people naturally seek safety.

In our letter of February 17^th, Gold Bit the Fricker, we saw the beginnings of a correction in the commodity sector and wrote thus:

Are futures traders back to examining supply/demand fundamentals? And could that lead to a revaluing of some very troubling speculation going on of late in the softs?

We'll see.

We'll also bet on the shine coming off foodstuffs in general.

Call it like this: a simultaneous retreat in the CRB (maybe played with the DBA ETF) and the S&P 500 – along with a who-could-have-guessed-it flight to an oversold Treasury market. [Italics added]

Friends, take it to the bank.

All the major markets topped out within a day of that report and have since slid between 6% and 8%. The foodstuffs, too, as represented by the DBA ETF, are off 9% since then and 10% from subsequent highs. And, lo and behold, U.S. Treasuries have been the beneficiary of a flight to quality that has been gathering steam since our call went out (in line with Middle Eastern stirrings) through the latest disasters in Japan. The long bond is up nearly 5% since our 17 February letter.

A look at a chart of those last two items brings the spec/safety dance into sharp focus. The top (brown) line is the PowerShares Deutsche Bank Agriculture Fund (NYSE:DBA). The lower (in candles) is the long bond, represented here by the iShares Barclays 20+ Year Treasury Bond Fund (NYSE:TLT).

Moreover, the long bond is now showing signs of entering a more concerted bull phase, as RSI and MACD move convincingly above their respective waterlines, the midway technical marker that's also a proven indicator of longer-term bull and bear moves.

Very clearly, the drop in DBA's price has precisely nothing to do with fundamental factors. When 250 million people across the globe suddenly experience food shortages, the price of foodstuffs does not drop by nearly ten percent. That's speculators unloading positions. Nothing more.

Yes, we're now paying more for food, as the latest PPI data shows. See here:

But clearly those prices are higher on the back of increased play from speculators, who now appear to be losing their interest rather quickly.

Look for volatile food prices to overshoot on the downside.

'And Keep Your Eyes Wide, the Chance Won't Come Again '

Keep an eye on the transports, too.

As we've been discussing intermittently this last while, the transports, along with the Baltic Dry Index (which is now coming off 52 week lows) are a wonderful barometer of business activity, highlighting the volume of goods contracted for delivery in the months ahead.

A few weeks back we noted a very toppy looking Dow Jones Transportation Average and reported on some very disturbing technicals, too. Thus we spake:

On a day of tight trading, when the Dow itself posted a gain of just 0.02% (1.81 points), the Dow Transports plunged an astounding 99 points or 2%. Moreover, a six month trendline was broken over two weeks ago, and all the price action is now fixed below a short term moving average that's rolling over. And if that's not enough, RSI readings have been sub-waterline since the trend break – with MACD now confirming with its own plunge below that marker.

And the situation today looks far more ominous than it did back then. Here's the same Dow Transports' bull move off last summer's bottom:

This chart shows a second trendline break and a head and shoulders top that's now moving ominously close to its neckline support level of DJTA 4880.

If that level is broken, we see a downside count that would bring the Transports to 4600. A first stop.

Wise traders might consider a pairs trade or otherwise make use of the Guggenheim Shipping ETF (NYSE:SEA), apparently the weakest performer in the transportation universe. See here:

Simply put, when nothing's moving, markets fall.

Many happy returns,

Matt McAbby, Senior Analyst, Oakshire Financial

Click here to comment on this article!
HOME / ABOUT US / CONTACT US / INVESTMENT NEWSLETTERS / FOREX & FUTURES / EDUCATION

Copyright © 2011, Oakshire Financial, All Rights Reserved

The information transmitted is intended only for the person or entity to which it is addressed and may contain material that is confidential, privileged and exempt from disclosure under applicable law. Any review, re-transmission or other use of, or taking of any action in reliance upon the information by persons or entities other than the intended recipient is prohibited. If you receive this in error, please contact the sender anddelete the e-mail and its attachments from all computers. Oakshire Financial does not accept liability for any errors, omissions, corruption or virus in the contents for this message or any attachments that arise as a result of e-mail transmission.