Cliff Wachtel - Seeking Alpha 'Cliff Wachtel' Tag RSS Syndication from SeekingAlpha.com SeekingAlpha.com http://seekingalpha.com/author/cliff-wachtel-cpa Golden Shorting Opportunity, if Stocks Pull Back http://seekingalpha.com/article/174435-golden-shorting-opportunity-if-stocks-pull-back?source=feed 174435 If stocks start to make their long anticipated retest of support, all kinds of opportunities arise from this very extended rally. Here’s just one.

Check out this daily chart for gold (click to enlarge). Question: What’s missing from this picture?
Gold Daily Chart- Chart Courtesy of AVA FX (11 Nov 19)
Answer: Nearby support.
Significance – Big Juicy Shorting Opportunity IF Stocks Pull Back
Background
Gold has been on a tear, up almost 10% in less than 3 weeks.
Reasons include:
  • A continuing decline in the US dollar
  • Rising optimism about the recovery igniting inflation concerns
However, these factors have been present for most of 2009. What really got the party started? Answer: India.

The Central Bank of India bought 200 tons of bullion from the International Monetary Fund. The IMF thought they were getting a great deal, selling their bullion at the "height" of the market in order to raise cash to help struggling nations.

]]> Fri, 20 Nov 2009 01:43:09 -0500 Cliff Wachtel If stocks start to make their long anticipated retest of support, all kinds of opportunities arise from this very extended rally. Here’s just one.

Check out this daily chart for gold (click to enlarge). Question: What’s missing from this picture?
Gold Daily Chart- Chart Courtesy of AVA FX (11 Nov 19)
Answer: Nearby support.
Significance – Big Juicy Shorting Opportunity IF Stocks Pull Back
Background
Gold has been on a tear, up almost 10% in less than 3 weeks.
Reasons include:
  • A continuing decline in the US dollar
  • Rising optimism about the recovery igniting inflation concerns
However, these factors have been present for most of 2009. What really got the party started? Answer: India.

The Central Bank of India bought 200 tons of bullion from the International Monetary Fund. The IMF thought they were getting a great deal, selling their bullion at the "height" of the market in order to raise cash to help struggling nations.


Complete Story »]]> GLD BNZ FXE FXA Cliff Wachtel Oil: Ready to Break Higher? http://seekingalpha.com/article/174212-oil-ready-to-break-higher?source=feed 174212 As the chart below shows, oil looks like it is trapped in a $76-$82 range. Don’t be fooled by that range, there is solid reason to believe oil could once again get close to $100, a level not seen since September 2008. Why?

Historically, the price of oil vs. gold has been between about 12:1 and 15:1. When the USD is losing value, the ratio tends to be lower (that is, oil goes up relative to gold as oil producers raise dollar-denominated prices to maintain the value of oil), and since 1/2001 has often been 10:1 or lower.

]]> Thu, 19 Nov 2009 04:06:04 -0500 Cliff Wachtel As the chart below shows, oil looks like it is trapped in a $76-$82 range. Don’t be fooled by that range, there is solid reason to believe oil could once again get close to $100, a level not seen since September 2008. Why?

Historically, the price of oil vs. gold has been between about 12:1 and 15:1. When the USD is losing value, the ratio tends to be lower (that is, oil goes up relative to gold as oil producers raise dollar-denominated prices to maintain the value of oil), and since 1/2001 has often been 10:1 or lower.


Complete Story »]]> USO Cliff Wachtel Quiet News Week Ahead. Will that Mean Rally, Consolidation or Pullback? http://seekingalpha.com/article/172124-quiet-news-week-ahead-will-that-mean-rally-consolidation-or-pullback?source=feed 172124 Now What? Does a Quiet News Week Mean Further Rally, Consolidation, or Pullback?

GLOBAL EQUITIES

The S&P 500 gained during every session this week, with the bulk of the gain coming on Thursday following solid results from Cisco (CSCO) and a surge in nonfarm productivity. The much talked about stock market correction continues to fail to materialize with the S&P 500 just 2.9% from its 2009 highs and up 60% from its March low.

]]> Mon, 09 Nov 2009 03:23:55 -0500 Cliff Wachtel Now What? Does a Quiet News Week Mean Further Rally, Consolidation, or Pullback?

GLOBAL EQUITIES

The S&P 500 gained during every session this week, with the bulk of the gain coming on Thursday following solid results from Cisco (CSCO) and a surge in nonfarm productivity. The much talked about stock market correction continues to fail to materialize with the S&P 500 just 2.9% from its 2009 highs and up 60% from its March low.


Complete Story »]]> CSCO DIA SPY QQQQ GCF GLD USO Cliff Wachtel Tale of Two Rate Hikes: Similar Events, Opposite Market Reactions http://seekingalpha.com/article/170454-tale-of-two-rate-hikes-similar-events-opposite-market-reactions?source=feed 170454 What a difference a few weeks can make. Here's a salutary lesson about why markets can be so hard to predict based on fundamentals alone, and why analysts can be right about events and wrong about how the market reacts to them.

While equities tend to drive currency markets, there are times when currency markets can move both equities and commodities. Moreover, the same kind of news can cause the opposite reaction, depending on the market's mood at the time.

]]> Mon, 02 Nov 2009 03:12:42 -0500 Cliff Wachtel What a difference a few weeks can make. Here's a salutary lesson about why markets can be so hard to predict based on fundamentals alone, and why analysts can be right about events and wrong about how the market reacts to them.

While equities tend to drive currency markets, there are times when currency markets can move both equities and commodities. Moreover, the same kind of news can cause the opposite reaction, depending on the market's mood at the time.


Complete Story »]]> SPY Cliff Wachtel USD Outlook: Short Term Up; Long Term Down. Here's Why http://seekingalpha.com/article/170382-usd-outlook-short-term-up-long-term-down-here-s-why?source=feed 170382 Despite the justified talk about the USD losing its position as a premier reserve currency and trade benchmark status, it's critical to keep some perspective.

For the Near Term

A Near Term Stock Pullback Is Likely and Should Boost the USD

]]> Sun, 01 Nov 2009 07:28:29 -0500 Cliff Wachtel Despite the justified talk about the USD losing its position as a premier reserve currency and trade benchmark status, it's critical to keep some perspective.

For the Near Term

A Near Term Stock Pullback Is Likely and Should Boost the USD


Complete Story »]]> UUP UDN Cliff Wachtel Positive Signs for the Dollar from China's FX Reserve Growth http://seekingalpha.com/article/166732-positive-signs-for-the-dollar-from-china-s-fx-reserve-growth?source=feed 166732 Reserve growth and diversification is in the spotlight once again as China's Q3 reserve growth figures were released, coming in at $141bln, one of the largest quarterly gains on record. September inflows alone were $61.8bln. Adjusted for valuation, it is conceivable that capital inflows have accounted for a significant portion of FX reserve growth in China.

The surge in reserve growth calls into question how diversification by the world's major reserve holders is proceeding at this stage. China may have stepped up its purchases of non-US assets over the past few months, but will not be doing so in a destabilizing fashion. According to Treasury data, China's purchases of Treasuries are now a bit more volatile compared to previous quarters and the pace of buying is clearly declining.

]]> Thu, 15 Oct 2009 11:00:14 -0400 Cliff Wachtel Reserve growth and diversification is in the spotlight once again as China's Q3 reserve growth figures were released, coming in at $141bln, one of the largest quarterly gains on record. September inflows alone were $61.8bln. Adjusted for valuation, it is conceivable that capital inflows have accounted for a significant portion of FX reserve growth in China.

The surge in reserve growth calls into question how diversification by the world's major reserve holders is proceeding at this stage. China may have stepped up its purchases of non-US assets over the past few months, but will not be doing so in a destabilizing fashion. According to Treasury data, China's purchases of Treasuries are now a bit more volatile compared to previous quarters and the pace of buying is clearly declining.


Complete Story »]]> UUP CNY CYB Cliff Wachtel Global Markets Outlook, Week of Oct. 5-9: Risk Appetite Shift http://seekingalpha.com/article/164719-global-markets-outlook-week-of-oct-5-9-risk-appetite-shift?source=feed 164719 The overall theme this past week was a distinct reversal in risk appetite, as global equities, commodities, and related risk currencies pulled back while safe haven assets gained. A disappointing US employment report justified the pullback, though minor losses suggest it was mostly priced in already.

STOCKS

]]> Sun, 04 Oct 2009 08:37:17 -0400 Cliff Wachtel The overall theme this past week was a distinct reversal in risk appetite, as global equities, commodities, and related risk currencies pulled back while safe haven assets gained. A disappointing US employment report justified the pullback, though minor losses suggest it was mostly priced in already.

STOCKS


Complete Story »]]> SPY DBC UUP UDN Cliff Wachtel Forex Insider: How to Trade the Monthly U.S. Employment Reports http://seekingalpha.com/article/164236-forex-insider-how-to-trade-the-monthly-u-s-employment-reports?source=feed 164236 The Biggest Economy's Biggest Trading Event: Monthly US Employment Reports

What It Is

The US Department of Labor's Non Farm Payroll, Unemployment Rate, and Average Hourly Wage reports, released together on the first Friday of each month, combine to form what is arguably the month's key economic news event for the United States. It is intended to represent the total number of paid workers in the U.S. minus farm employees, government employees, private household employees and employees of nonprofit organizations.

]]> Thu, 01 Oct 2009 05:53:30 -0400 Cliff Wachtel The Biggest Economy's Biggest Trading Event: Monthly US Employment Reports

What It Is

The US Department of Labor's Non Farm Payroll, Unemployment Rate, and Average Hourly Wage reports, released together on the first Friday of each month, combine to form what is arguably the month's key economic news event for the United States. It is intended to represent the total number of paid workers in the U.S. minus farm employees, government employees, private household employees and employees of nonprofit organizations.


Complete Story »]]> UUP UDN Cliff Wachtel Gold: What Professional Futures Traders Think http://seekingalpha.com/article/162298-gold-what-professional-futures-traders-think?source=feed 162298 A friend asked if anyone had seen short interest on gold. Not quite my specialty, but did a quick check.

Points to note from the Latest Commitments of Traders Report of Sept 11 on positions as of Sept 8 [see table below]:

]]> Fri, 18 Sep 2009 15:46:43 -0400 Cliff Wachtel A friend asked if anyone had seen short interest on gold. Not quite my specialty, but did a quick check.

Points to note from the Latest Commitments of Traders Report of Sept 11 on positions as of Sept 8 [see table below]:


Complete Story »]]> GLD Cliff Wachtel Do Gold's Recent Moves Indicate Global Confidence in Currencies Is Unraveling? http://seekingalpha.com/article/160749-do-gold-s-recent-moves-indicate-global-confidence-in-currencies-is-unraveling?source=feed 160749 For those who don’t follow at least the big picture of currencies and commodities, here’s something you should read, because you may see that you need to start paying a bit more attention. The US dollars status as reserve currency, though safe in the near term despite the hype otherwise, is ultimately based on confidence, as is the case with any fiat money.

Does gold’s move this past week suggest that the rest of the world has lost faith?

]]> Thu, 10 Sep 2009 04:49:03 -0400 Cliff Wachtel For those who don’t follow at least the big picture of currencies and commodities, here’s something you should read, because you may see that you need to start paying a bit more attention. The US dollars status as reserve currency, though safe in the near term despite the hype otherwise, is ultimately based on confidence, as is the case with any fiat money.

Does gold’s move this past week suggest that the rest of the world has lost faith?


Complete Story »]]> GLD SLV FXA FXC FXE FXS BNZ DBV UDN CEL FTE TEF AETUF.PK ENY ERF PEYUF.PK PVX VETMF.PK ATGFF.PK PMBIF.PK ATPWF.PK BLIAF.PK CMHIF.PK CDPYF.PK NPRUF.PK RIOCF.PK BPL EPB EPD ETP KMP MMP NS OKS SXL TPP TYG ARLP NRP PVR PTNHF.PK STON Cliff Wachtel The Coming Crude Oil Pullback: Using Contracts for Difference (CFDs) http://seekingalpha.com/article/159209-the-coming-crude-oil-pullback-using-contracts-for-difference-cfds?source=feed 159209
Crude has been a great instrument to trade, because it often amplifies movements in global stocks and other risk asset markets. With global stocks and other risk assets already pricing in a recovery, and likely overpriced, they are ripe for a pullback. Like many pullbacks during a long term bear market, the coming one could easily be well over 10%.

Trading crude oil has often been one of the best ways to play a strong trend, since it often amplifies movements in global markets.

]]> Mon, 31 Aug 2009 13:15:25 -0400 Cliff Wachtel
Crude has been a great instrument to trade, because it often amplifies movements in global stocks and other risk asset markets. With global stocks and other risk assets already pricing in a recovery, and likely overpriced, they are ripe for a pullback. Like many pullbacks during a long term bear market, the coming one could easily be well over 10%.

Trading crude oil has often been one of the best ways to play a strong trend, since it often amplifies movements in global markets.


Complete Story »]]> USO Cliff Wachtel Key Events and Implications: Traders' Weekly Forecast, August 30 - September 4, 2009 http://seekingalpha.com/article/159043-key-events-and-implications-traders-weekly-forecast-august-30-september-4-2009?source=feed 159043 This past Thursday saw something different, and possibly very significant—currency events influencing stocks. Specifically, a declining USD was seen as the main cause for a spike in oil prices, which in turn caused a spike in materials stocks in the US, which in turn sparked enough of a rally to lift US stocks higher despite lower results earlier in Asia and Europe.

Generally, stocks have led currencies and commodities. Could we be seeing the start of a change in inter-market relationships, with stocks taking a less dominant role as a sinking dollar becomes more of a market moving influence of its own?

]]> Sun, 30 Aug 2009 09:01:41 -0400 Cliff Wachtel This past Thursday saw something different, and possibly very significant—currency events influencing stocks. Specifically, a declining USD was seen as the main cause for a spike in oil prices, which in turn caused a spike in materials stocks in the US, which in turn sparked enough of a rally to lift US stocks higher despite lower results earlier in Asia and Europe.

Generally, stocks have led currencies and commodities. Could we be seeing the start of a change in inter-market relationships, with stocks taking a less dominant role as a sinking dollar becomes more of a market moving influence of its own?


Complete Story »]]> Cliff Wachtel Best Risk / Reward Income Investments, Part II: Canadian Energy Infrastructure Stocks http://seekingalpha.com/article/158819-best-risk-reward-income-investments-part-ii-canadian-energy-infrastructure-stocks?source=feed 158819 Stocks for the fear AND greed in all of us.

The Problem: Conflicted by Fear and Greed

In the current market, many income investors are feeling very conflicted.

]]> Fri, 28 Aug 2009 05:32:53 -0400 Cliff Wachtel Stocks for the fear AND greed in all of us.

The Problem: Conflicted by Fear and Greed

In the current market, many income investors are feeling very conflicted.


Complete Story »]]> ATPWF.PK GLHIF.PK INRGF.PK MCQPF.PK NPIFF.PK ATGFF.PK KEYUF.PK PMBIF.PK Cliff Wachtel Global Markets Weekly Trading Preview: Markets Continue to Focus on the Positive http://seekingalpha.com/article/157893-global-markets-weekly-trading-preview-markets-continue-to-focus-on-the-positive?source=feed 157893 STOCKS

US: Friday, a better-than-expected Existing Home Sales figure (5.24 million vs. 5.00 million consensus) led to a 1.9% rally in the S&P 500. However, many analysts attributed this gain to much lower prices (about $30k lower on the month) and foreclosure sales. Also, new home building continues to drop, as does employment. So investors are effectively ignoring poor economic data while going long the positive data. The end result is all four of the major indices listed below made fresh 2009 highs on Friday.

]]> Mon, 24 Aug 2009 07:05:50 -0400 Cliff Wachtel STOCKS

US: Friday, a better-than-expected Existing Home Sales figure (5.24 million vs. 5.00 million consensus) led to a 1.9% rally in the S&P 500. However, many analysts attributed this gain to much lower prices (about $30k lower on the month) and foreclosure sales. Also, new home building continues to drop, as does employment. So investors are effectively ignoring poor economic data while going long the positive data. The end result is all four of the major indices listed below made fresh 2009 highs on Friday.


Complete Story »]]> DIA SPY QQQQ UUP UDN FXA FXB FXE FXF JYF FXY CYN CYB DBV FXEN DUG GLD SLV USO UNG GSG DBA Cliff Wachtel Today's Best Risk / Reward Income Investments, Part I: Canadian Power Stocks http://seekingalpha.com/article/157825-today-s-best-risk-reward-income-investments-part-i-canadian-power-stocks?source=feed 157825 Here are some stocks for the fear AND greed in all of us.

The Problem

In the current market, many income investors are feeling very conflicted.

]]> Sun, 23 Aug 2009 21:38:32 -0400 Cliff Wachtel Here are some stocks for the fear AND greed in all of us.

The Problem

In the current market, many income investors are feeling very conflicted.


Complete Story »]]> ATPWF.PK GLHIF.PK INRGF.PK MCQPF.PK NPIFF.PK Cliff Wachtel Global Markets Weekly Trading Preview: Quiet Range Bound Week? http://seekingalpha.com/article/157746-global-markets-weekly-trading-preview-quiet-range-bound-week?source=feed 157746
The best overall indicator of currency movements remains Global Stock Indexes, lead by the bellweather S&P. When the S&P is up, so also are commodities, and the AUD, NZD, CAD, and EUR. The safe-haven currencies, the JPY, USD, and CHF, tend to go down. When the S&P is down, the opposite tends to occur. Thursday saw a divergence, which may be another hint at the current rally’s weakening. In sum, most currency pairs continue to take direction from the S&P.

Thus as stocks and commodities rose this week, so did the risk currencies, while the safety currencies dropped.

]]> Sun, 23 Aug 2009 09:00:41 -0400 Cliff Wachtel
The best overall indicator of currency movements remains Global Stock Indexes, lead by the bellweather S&P. When the S&P is up, so also are commodities, and the AUD, NZD, CAD, and EUR. The safe-haven currencies, the JPY, USD, and CHF, tend to go down. When the S&P is down, the opposite tends to occur. Thursday saw a divergence, which may be another hint at the current rally’s weakening. In sum, most currency pairs continue to take direction from the S&P.

Thus as stocks and commodities rose this week, so did the risk currencies, while the safety currencies dropped.


Complete Story »]]> UUP UDN Cliff Wachtel Global Markets Weekly Trading Preview: Quiet Range Bound Week? (Part II) http://seekingalpha.com/article/157750-global-markets-weekly-trading-preview-quiet-range-bound-week-part-ii?source=feed 157750 Continued from Part 1

CHF

Returning to Primary Safe-Haven Status If Global Growth Returns?

]]> Sun, 23 Aug 2009 09:00:35 -0400 Cliff Wachtel Continued from Part 1

CHF

Returning to Primary Safe-Haven Status If Global Growth Returns?


Complete Story »]]> FXA FXC FXE UUP DBV UDN FXY FXF SPY SDS GLD Cliff Wachtel Thursday's Warning Signal http://seekingalpha.com/article/157555-thursday-s-warning-signal?source=feed 157555 Thursday's global markets trade showed a very unusual divergence. Global equities markets usually set the direction and pace of commodity and currency markets. Yet on Thursday, while stocks went up, commodities and currency pairs that rise with them generally went down.

Perhaps its just an aberration, though seeing BOTH currencies and commodities resist stocks is very unusual. It is possible that this highly unusual divergence suggests the global equities rally is exhausted.

]]> Fri, 21 Aug 2009 10:36:53 -0400 Cliff Wachtel Thursday's global markets trade showed a very unusual divergence. Global equities markets usually set the direction and pace of commodity and currency markets. Yet on Thursday, while stocks went up, commodities and currency pairs that rise with them generally went down.

Perhaps its just an aberration, though seeing BOTH currencies and commodities resist stocks is very unusual. It is possible that this highly unusual divergence suggests the global equities rally is exhausted.


Complete Story »]]> UDN YCL EUO USO OIH GLD SLV Cliff Wachtel Global Markets: Mid-August Review http://seekingalpha.com/article/155956-global-markets-mid-august-review?source=feed 155956 Here's a summary of what has happened since our last bi-weekly review of July 30, 2009.

Friday, July 31, 2009: US GDP

]]> Thu, 13 Aug 2009 10:25:35 -0400 Cliff Wachtel Here's a summary of what has happened since our last bi-weekly review of July 30, 2009.

Friday, July 31, 2009: US GDP


Complete Story »]]> Cliff Wachtel Daily Review and Preview: Risk Assets Recovering? http://seekingalpha.com/article/155925-daily-review-and-preview-risk-assets-recovering?source=feed 155925 Summary

STOCKS: All major Global stock indexes up, recover Tuesday losses. Showing very tight trading range over the past week within about 2%. The big question: Will the mood stay positive enough to keep stocks around current overbought levels?
FOREX: Despite stocks rise, FX pairs don't show the usual pro-risk bias. Note the table:


]]> Thu, 13 Aug 2009 09:05:54 -0400 Cliff Wachtel Summary

STOCKS: All major Global stock indexes up, recover Tuesday losses. Showing very tight trading range over the past week within about 2%. The big question: Will the mood stay positive enough to keep stocks around current overbought levels?
FOREX: Despite stocks rise, FX pairs don't show the usual pro-risk bias. Note the table:



Complete Story »]]> Cliff Wachtel