Financial Market Report for the Week Ending Friday October 4, 2013
1) … The short selling opportunity of a lifetime has emerged with the stock market rally of Tuesday October 1, 2013.
Tuesday October 1, 2013, was a strongly bullish day in the financial markets with short covering accounting for the day’s gain as Yahoo Finance In Play reports Risk assets benefited from the rebound in Europe where yesterday’s fears of a possible collapse of the Italian government were alleviated by reports indicating about 20 PDL ministers are ready to form a breakaway party supporting Prime Minister Enrico Letta. The fluid situation is expected to become a bit clearer tomorrow when the prime minister appears in front of the parliament.
Precious Metals traded strongly lower with Gold, GLD, -2.8%, and Silver, SLV -2.3, which stimulated Gold and Silver Mining lower, GDX -2.4%, GDXJ -3.1, SIL -2.1, SSRI -1.8; the outlook for these stocks is terribly bearish as not only are they unable to leverage higher on rising prices of the underlying commodity, but are leveraged lower on falling prices.
World Stocks, VT, rose 0.8%, Nation Investment, EFA, 0.5%, Global Industrial Producers, FXR, 1.2%, nearing its recent high, and Solar, TAN, 4.0%, led a whole host of sectors higher which included
Inverse Volatility, XIV 3.3
Paper Producers, WOOD 2.1
Pharmaceuticals, PJP 2.0
Nasdaq Internet, PNQI 2.0 New High
Biotechnology, IBB 2.0 New High
Internet Retail, FDN 1.7 New High
Media, PBS 1.6 New High
Health Care Providers, IHF 1.5
China Industrials, CHII 1.5
Design Build, PKB, 1.2
Transportation, XTN 1.2
Retail, XRT 1.3
IPOs, FPX 1.3
Resorts and Casinos, BJK 1.2
Semiconductors, SMH 1.2
Networking, IGN 1.2
Small Cap Pure Value, RZV 1.2 New High
European Financials, EUFN, 1.1 led by LYG, RBS, UBS, CS, SAN, IRE, DB,
Small Cap Energy, PSCE 2.2 New High
Energy Production, XOP 2.0 New High
Yield Bearing Investments,
Global Telecom, IST 1.3 New High
US Stocks,VTI 0.9
BRICS, EEB 1.3
Russia, RSX 2.3
India, INP 1.7
China, YAO 1.6
Brazil, EWZ 1.0
Nation Investment, EFA, 0.5
Taiwan, EWT 1.7
South Korea, EWY 1.5
Sweden, EWD 1.5
Emerging Markets EEM, 2.0
Turkey, TUR 4.7
Thailand, THD 4.6
Philippines, EPHE 2.2
Mexico, EWW 2.4
Argentina, ARGT, 2.8 New High, led by BBVA, BFR, GGAL
Egypt, EGPT 1.9 New High
Eurozone, EZU, 1.2 led by Life Insurance Company, ING,
Italy, EWI 2.5 New High
Greece, GREK 2.1 New High
Spain, EWP 1.6 New High
Netherlands, EWN 1.2
Finland, EFNL 1.2
Credit traded lower as the Interest Rate on the US Ten Year Note, ^TNX trade higher to close at 2.65%
Aggregate Credit, AGG -.25
High Yield Municipal Bonds, HYD -1.0
Zeroes, ZROZ -0.7
30 Year US Treasuries, EDV -0.7
Ten Year Government Notes, TLT -0.6
Emerging Market Bonds, EMB -0.6
Long Duration Corporate Treasuries, BLV -0.6
Fiat money died Friday September 20, 2013, with World Stocks, VT, Major World Currencies, DBV, and Emerging Market Currencies, CEW, trading lower, as Jesus Christ is operating in dispensation, as presented by the Apostle Paul in Ephesians 1:10, that is in administrative oversight of all things economic and political, and has pivoted the world out of liberalism and into authoritarianism, and as such the stock market has turned from bull to bear; those ETF sectors which rallied over the last year and countries which rallied from late June 2013 to late September, 2013, seen in this Finviz Screener, will be trading lower from the Tuesday October 1, 2013 rally, on competitive currency devaluation and on the exhaustion of the world central banks’ monetary authority as investors come to greater realization that the US Fed’s monetary policies have crossed the Rubicon of sound monetary policy, and have made “money good” investments bad.
The late September 2013, S&P 500, $SPX, price of 1709, and SPY price of 172, reflects an Elliott Wave 5 High. Thus the October 1, 2013, rally marked the short selling opportunity of a lifetime, as in a bull market one buys into dips, but in a bear market, one sells into pips. Of note Sam Jones and Arash Massoudi of Financial Times report Hedge funds’ bets on falling share prices have dropped to their lowest level in years as traders predict an extended bull run for equities over the coming months. According to data from Markit, the overall value of short positions on European shares has dropped to $133bn, the lowest level since the data provider began monitoring in 2006. In the US too, short positions are touching record lows. Just 2.4% of S&P 500 shares are on loan to short sellers.
When fiat money died Friday September 20, 2013, with the trade lower in World Stocks, VT, Major World Currencies, DBV, and Emerging Market Economies, CEW, a new form of money rose to govern mankind’s economic transactions, that being diktat money.
Thursday, October 3, 2013, was a bearish day, as ETF Daily News reports Outer limits of monetary policy and inflation and the Finviz Chart of the Market OFF ETN, OFF, rose, and the Yahoo Finance Chart of Volatility, ^VIX, also rose, stimulating Volatility ETFs, TVIX,VIXY,VIXM, higher. The Great Bear Market that commenced Friday September 20, 2013, recommenced Thursday, October 3, 2013, as is seen in the 200% Bear Market ETFS, such as BIS, FXP, SQQQ, SDD, SSG, trading higher.
The chart of the S&P 500, $SPX, seen here in Chart Gazer chart, shows a 0.9% close lower at 1,697; its 50 day moving average.
Nations trading lower included
Brazil, EWZ, and Brazil Small Caps, EWZS
Sectors trading lower included
Inverse Volatility, XIV
Internet Retail, FDN
Nasdaq Internet, PNQI
US Infrastructure, PKB
Design Build, FLM
Small Cap Pure Value, RZV
Small Cap Industrials, PSCI
Paper Producers, WOOD
Consumer Discretionary, IYC
Yield Bearing Sectors trading lower included
Global Real Estate, DRW
Real Estate, IYR
Leveraged Buyouts, PSP
Of note, Global Consumer Staples, KXI, seen in this Finviz Screener, which includes TSN, PG, KRFT, MDLZ, CAG, and GIS, is a loss leading sector, since September 20, 2013, as is seen in their combined ongoing Yahoo Finance Chart.
The decline in the price of Gold, $GOLD, since late August 2013, is a buying opportunity, as the Gold ETF, GLD, is in an Elliott Wave 3 Up, from its early July 2013 bottom of 117.5, as is seen its Weekly Finviz Chart. The Elliott Wave 3 Ups, are the most dramatic of all economic waves, and create the bulk of wealth gains, of all of the ascending five waves
On Thursday, October 3, 2013, Spot Gold, $GOLD, closed at $1,316, with support lower at $1,300 and a strong floor at $1,275. The chart of the Gold ETF, GLD, rose slightly, to the edge of a massive consolidation triangle, to close at 127, from which it will either break out, or break lower. Either way, it is wise to Dollar Cost Average, an investment in the purchase of gold bullion, as in the age of authoritarianism, the possession of gold and diktat, will be the two forms of sovereign and sustainable wealth.
The Yahoo Finance chart of the EUR/JPY, and the Google Finance Chart of the EUR/JPY, and the Forex Trading chart of the EUR/JPY, and FXStreet chart of the EUR/JPY, show a close at 132.45 on October 3, 2013; from which a trade lower, will soon propel Eurozone Stocks, EZU, and European Financials, EUFN, as well as World Stocks, VT, lower, as The Great Bear Market of all time commenced Friday, September 20, 2013, and envigorated Thursday, October 3, 2013.
Jesus Christ, operating in Dispensation, that is in administration of all things economic and political, as presented by the Apostle Paul in Ephesians 1:10, completed liberalism with a burst of credit in the No Taper Rally, and a rally in currency carry trade investing, followed by a trade lower in World Stocks, VT, Nation Investment, EFA, and Global Industrial Producers, FXR, and US Stocks,VTI, such as the S&P 500, to which Jack Chan of JC’s Buy and Sell Signals, gave his Sell Signal to the S&P 500, SPY, during the week ending Friday, October 4, 2013.
On Friday, October 4, 2013, currency traders took the Japanese Yen, FXY, slightly lower to a new weekly rally high, at 100.30, its dark filled candlestick suggests that the rally in the Yen, is at its zenith. And the Euro, FXE, even more slightly lower, to a new weekly rally high of 134.12, forcing the EUR/JPY, to lower to close the week lower at 132.04, yet Eurozone Stocks, EZU, rose to close near their all time high.
While Resorts and Casinos, BJK, International Telecom, IST, IPOs, FPX, Small Cap Energy, PSCE, and Energy Production, XOP, traded to a new rally high, monetization of debt, has finally turned money good investments bad. Investments in Risk Assets, such as Small Cap Value Socks, RZV, has ended, as confirmed the Market Off ETN, OFF, and Volatility, XVZ, trading higher this month of October 2013. The interventionist policies of the world central banks no longer provide investment stimulus in Global Industrial Producers, FXR, as leaders such LPL, IP, WHR, MHK, PHG, ERIC, VPRT, ABB, ENR, ITW, ROK, MMM, FLS, SNA, LECO, SI, GM, GE, and BA, are trading lower. Jesus Christ acting in the Economy of God, Ephesians, 1:10, has ended the Fed; He did what Ron Paul could not do.
Yes, the Fed be dead. Charles Hugh-Smith of OfTwoMinds blog, writes in Zero Hedge, The Fed Bubble Era Is Over This is seen in the Too Big To Fail Banks, RWW, trading lower from their rally highs. And Asset Managers such as BlackRock, BLK, and Eaton Vance, EV, that coined liberalism’s wealth, are trading lower as well. Now under authoritarianism, the policies of nannycrats and technocrats, working in schemes of regional integration, will underwrite economic activity.
Debt deflation, specifically competitive currency devaluation, has commenced, terminating Nation Investment, EFA, and Small Cap Nation Investment, IFSM, and Emerging Market Investment, EEM, and liberalism’s fiat wealth, VT. The ongoing destruction of fiat money can be followed via the trade lower in Stock ETFs, seen in this Finviz Screener, and the Currency ETFs, seen in this Finviz Screener
The Chinese Yuan, CYB, popped higher, suggesting that it can go still higher.
The Indian Rupe, ICN, rose to a new rally high, taking India, INP, SCIN, higher, Yet its banks, IBN, and HDB, while rising today, are India’s dead weight. In similar fashion Mexico’s BSMX, is Mexico’s, EWW, dead weight.
The rising Japanese, Yen, FXY, now at strong resistance, has turned Far East Financials, FEFN, such as SMFG, MFG, MTU, and IX, and Japan, EWJ, and its exporters, such as SNE, CAJ, KYO, HMC, and NJ, as well as Japan Small Caps, JSC, such as MKTAY, lower; the Nikkei, NKY, lost 2.8% the week ending October 4, 2013.
In perverse way, the National Bank of Greece, NBG, rose taking Greece, GREK, to a new rally high. Italy, EWI, and Spain, EWP, rose to a new rally high as well, while Ireland, EIRL, Netherlands, EWN, Germany, EWG, and Finland, EFNL, have peaked. Reuters reports Greece’s Piraeus And NBG To Set Up Bad Banks As Bad Loans Soar.
Liberalism’s credit is at its zenith as World Treasury Bonds, BWX, and International Corporate Bonds, PICB, stand at their rally high, while Emerging Market Bonds, EMB, and US Treasuries, TLT, have sold off. The trade lower in Junk Bonds, JNK, and Ultra Junk Bonds, UJB, as well as the trade lower in Convertible Securities, CWB, reflects the beginning of the end of liberalism’s credit. Of note Credit Providers, such as American Express, AXP, seen in this Finviz Screener, are trading lower.
The strong trade lower in the US Dollar, $USD, seen in the chart of its 200% ETF, UUP, has finally put the nail in the coffin of the Milton Friedman Free To Choose, Banker Regime. Major World Currencies, DBV, and Emerging Market Currencies, CEW, are no longer floating, they are sinking. The US Dollar no longer serves as the world’s reserve international currency, and as a result World Real Estate Excluding the US, DRW, and Real Estate, IYR, are trading lower in value. The Chinese Renminbi will serve as a regional currency for the Association of Southeast Asian Nations, ASEAN, trade bloc. Trust in the diktat of regional alliances will be the basis for regional integration and economic sustainability in the age of authoritarianism.
The Chinese Money Report provides the WSJ report China for the first time joined the ranks of the most-traded international currencies, underscoring the rise of the world’s second largest economy
and the growth of the global foreign exchange market. The Chinese Yuan vaulted to ninth in the Bank for International Settlements’ latest report on foreign exchange turnover, surpassing the Swedish Krona and New Zealand Dollar, among other widely used currencies.
Trading in the Chinese currency, also known as the renminbi, has more than tripled over the past three years, to $120 billion a day in 2013, the BIS said, referencing survey data from April. Daily U.S. Dollar trading in 2013 has averaged $4.65 trillion. Yuan gains highlight China’s ambitions to play a larger role in a market long dominated by the dollar and, to a lesser extent, the Euro. Daily global currency flows have risen more than 30% in three years. The Yuan ranked 17th in the previous BIS survey, in 2010. The shift also highlights the international nature of the manufacturing supply chain and the flexibility U.S. based firms can gain by using Yuan.
2) … John The Revelator, at the age of 90, while in exile on the Isle of Patmos, wrote the details of a dream given to him by angels, which foretells that regional governance and totalitarian collectivism will arise out of waves of sovereign and banking insolvency in the Mediterranean Sea nations of Portugal, Italy, Greece and Spain.
Inasmuch as the sovereignty of nation states is failing, on the collapse of fiat money, beginning with the Emerging Market Currencies, CEW, and Emerging Market Bonds, EMB, nannycrats will increasingly meet in summits and work groups, to renounce national sovereignty, and to establish regional sovereignty, where monetary, fiscal, and economic policies will be directed by statist public private partnerships of banks, businesses, labor organizations and governments, all acting to establish regional integration for the purpose regional security, stability and sustainability.
The IMF is showing the way forward, as the centerpiece statement of its position paper More Fiscal Integration to Boost Euro Area Resilience, dated September 25, 2013, calls for better oversight of national policies and enforcement of rules: “Going forward, reinstating fiscal discipline and reviving market discipline may require stronger involvement of the center in national fiscal decisions.”
Peter Schwarz of WSWS reports The Return Of The Euro Crisis. In the euro zone, the average sovereign debt has risen from 88 to 92 percent of gross domestic product (GDP) in just one year. Despite deep cuts that have left over half of the country’s youth out of work, Spain had a budget deficit of 10.2 percent of GDP last year, Greece of 10, Ireland of 8.3, and Portugal of 6.4 percent. France also will not meet the 3 percent limit demanded by the EU; its budget deficit is expected to exceed 4 percent.
After the failure of the no-confidence vote against Italian Prime Minister Enrico Letta, the financial press called for more social cuts. Letta “now has the upper hand,” wrote the Financial Times. He must re-establish the country’s competitiveness “by cutting the high taxes on labor and paying for it by slashing public spending.”
I relate that out of a soon coming Financial Apocalypse, that is a credit bust, and global financial system breakdown, foretold in Bible prophecy of Revelation 13:3-4, a One Euro Government will rise to provide order; it will be a United States of Europe, with a great democratic deficit.
WSWS reports on German Unity Day, German President Joachim Gauck Calls For A Stronger German Role In World Politics And In The Euro Crisis. “The question is bluntly posed: does our commitment reflect the importance of our country,” he said.
The periphery nations, will exist as hollow moons revolving about planet Brussels and planet Berlin. While Greeks cannot be Germans, all will be living as one, in common debt servitude to centralized task masters, such as Jenz Weidmann, President of the Bundesbank, and Viviane Reding, European Commissioner for Justice, Fundamental Rights and Citizenship, as they direct a Eurozone Fiscal Union. She is seen in Facebook Meeting with Pietro De Matteis, co-President of the European Federalist Party; and is seen in Youtube Video Address for a Federal Europe. Of note The Express UK recently reported Fury Erupted Over A Fresh Brussels Plot To Transform The EU Into A Federal Superstate. Justice commissioner Viviane Reding, a European Federalist, communicated the EU should have powers to impose human rights rulings. Her masterplan includes a vision of the European Commission as a “quasi-judicial authority” alongside an EU “justice minister” and powers for Europe’s courts to impose rulings, overriding national governments.
Liberalism featured trust in the world central bankers for investment gain. Now in authoritarianism, specifically out of waves of economic and political turmoil in the Mediterranean Sea nation states of Portugal, Italy, Greece, and Spain, people will come to trust in the word, will, and way of sovereign regional leaders, that is statist nannycrats, for regional security, stability, and sustainability, as communicated in bible prophecy of Revelation 13:3-4.
Doug Noland of Prudent Bear frequently penned liberalism as the age of wildcat finance; an epoch where bankers of all types fiercely strived to outdo one another to generate the greatest investment results, and where Ben Bernanke fathered credit easing.
But now with Jesus Christ, operating in dispensation, that is the administration of all things economic and political, as presented in Ephesians 1:10, the world has pivoted from liberalism to authoritarianism, where Angela Merkel fathered debt servitude with Greek Bailouts I, and II, and where she in calling for More Europe, laid the groundwork for a soon coming One Euro Government.
Authoritarianism is the age of wildcat governance, where leaders bite, rip and tear one another apart, in their struggle to become top dog leader; these will increasingly rule regionally, in diktat.
Peter Schwarz of WSWS reports on the emergence of wildcat goverance and its diktat in article Italian Government Survives Confidence Vote. When it became clear that Letta would survive the confidence vote, Berlusconi backed down. On Wednesday, he called for support for the prime minister and voted in favor of the government. As a result, far from being resolved, the political crisis has merely been postponed.
In the media, the conflict between Berlusconi and Letta is invariably portrayed as pitting an egomaniac who pursues his own interests against a selfless premier who puts the interests of the country first. In reality, behind all the twists and turns there is the attempt to establish a government that is stable enough to enforce hitherto unimaginable social attacks against the Italian working class.
Letta is a Christian Democrat who owes his political rise to support from the successor organization of the Italian Communist Party. He is currently regarded by both the European and Italian bourgeoisie as best suited for the task of imposing new austerity measures. This is why he enjoys the full support of all European governments and the European Union, and why a wing of Berlusconi’s PdL has now turned against its mentor and lined up behind Letta.
When Berlusconi withdrew his support from the government, Italian share prices plummeted and interest rates on government bonds soared. On Tuesday, when it appeared increasingly likely that Letta would obtain a majority, the trend on the stock markets reversed. The rates charged for Italian government bonds fell sharply and the Milan stock exchange rose by 3.1 percent. Ironically, the share of Berlusconi’s Mediaset group also rose by 6 percent.
In his speech to the Senate on Wednesday, Letta tried to win support by promising to reduce taxes, cut public spending and reform political institutions to ensure stable governance.
For his part, Berlusconi justified his support by citing Letta’s commitment to cut taxes, initiate reforms of the judiciary and particularly to reduce the cost of labour.
The savings and labor market reforms Letta proposes are huge and will reduce the working population to a standard of living comparable to that at the beginning of last century—a period of bitter poverty recorded in many notable literary works.
Italy is currently in a deep recession. Industrial production has fallen by a quarter since 2007, and GDP will shrink this year by 2 percent. The official unemployment rate is 12 percent, and among young people, a massive 40 percent. The national debt is 135 percent of GDP and rising. To reverse this trend, Letta plans to slash billions in social spending.
Rather than constituting a “historic day for Italian democracy”, as Letta claimed in his speech to the Senate, Wednesday’s confidence vote demonstrates a closing of ranks within the ruling class in order to undertake a fresh assault on the working class.
The Johannes Stern WSWS report German President Gauck Calls For Aggressive Foreign Policy is of timely importance as Bible prophecy foretells of the rise of a Eurozone Ruler, that is the Sovereign, seen in Revelation 13:5-10, to be accompanied in his rise to power by a Banker, the Seignior, presented in Revelation 13:11-18, who will call people to worship him. The European Ruler’s power will come through his adept working in regional framework agreements of diktat, and will be so great, that this one described as The Little Horn, one of seemingly little authority, will set his attentions on The Glorious Land, Daniel 8:1-27, and as the propheced Prince who is to come, will provide a Middle East Peace Plan, and establish a One World Government, and One World Religion, with his global headquarters in Jerusalem, Daniel 9:25. This individual is described as the Son of Perdition, that is the Son of Destruction, a truly lawless individual, 2 Thessalonians 2: 2-4. And he is described as the Willful King in Daniel 11:36-45. The Apostle Paul relates that the coming of the Lawless One will be by the activity of Satan, 2 Thessalonians 2:9, and the Apostle stresses he will perform great signs and wonders, that will deceive many people, 2 Thessalonians 2:8. This individual is one who takes the place of and serves as a substitute for Jesus Christ, 1 John 2:18-22. He is the Prince of the Covenant, that is the Middle East Peace Pact. After the league is made with him, he will act deceitfully, as he will arise and become strong with a small number of people, having usurped the high priestly office of Israel for power and gain, Daniel 11:22-23. In the middle of the week, that is at the 3 and 1/2 year mark of his rule in Jerusalem, he will bring an end to sacrifice and offering, Daniel 9:27, and impose emperor worship from all of earth’s inhabitants and impose the Charagma, 666, money system, Revelation 13:18.