Seeking Alpha

Russell Gold's  Instablog

Russell Gold
Send Message
New member Russell Gold is an investment research analyst. Russell Gold fields of interest include technical analysis, macroeconomics, demographics, financial history and energy policy. His published topics include; stock options, dividend investing, technology, services, finance and search... More
View Russell Gold's Instablogs on:
  • Stock Chart Technicals For Gold, Silver, Euro, Swiss Franc And US Dollar

    Both the Euro and Swiss Franc have had volatile years since the Lehman crash of 08. Although, as you can see below, the Euro and Swiss Franc have had quite a different ride.

    Euro has carved out two peaks followed by two bottoms. The Euro and Us Dollar have been in an inverse relationship for many years. This relationship is most noticeable in the Euro and US Dollar charts below. Euro is near its two year bottom. The dollar has moved up versus the Euro since May of 2011.

    Euro

    (click to enlarge)Euro - Philadelphia Index

    US Dollar

    (click to enlarge)US Dollar

    PowerShares DB US Dollar Index Fund UUP

    (click to enlarge)Russell Gold UUP chart

    PwerShares UUP is turning negative. The US Dollar reversal that started in May 2011, looks to be coming to an end. It appears UUP has one more technical support before eroding the bullish dollar run.

    Swiss Franc, on the other hand, has followed a similar path as silver.

    Swiss Franc

    (click to enlarge)Swiss Franc - Philadelphia

    Silver

    (click to enlarge)Silver Spot Price

    iShares Silver Trust SLV

    (click to enlarge)Russell Gold SLV 6 Month Chart

    Gold however, has held strong above the $1500 support/confluence. Unlike silver, gold is still near the highs set in 2011. The near future may not sit well for gold, SPDR Gold Trust GLD, and Silver, iShares Silver Trust SLV investors. I have annotated the 6 month GLD chart below. GLD and gold are forming a common pattern in the markets, a descending triangle. Descending triangle's are very bearish. Gold's target is 1300 and GLD may reach new 52 week lows near 120.

    Gold

    (click to enlarge)Gold Spot Price

    SPDR Gold Trust Shares GLD

    (click to enlarge)Russell Gold SPDR Gold GLD

    CurrencyShares Euro and Swiss Franc Trust, FXF and FXE shares, represent a cost-effective investment relative to traditional means of investing in the foreign exchange market. Both three year charts and 6 month charts suggest the Euro and Swiss Franc are near bottoming.

    I also annotated FXF and FXE 6 months charts. Both FXF and FXE charts display a distinct Wolfe Wave pattern. The Wolfe Wave is a basic shape in technical analysis. This natural occurring pattern predicts levels of supply and demand. The overriding factor in identifying the Wolfe Wave pattern is symmetry.

    CurrencyShares Swiss Franc Trust FXF

    (click to enlarge) Three Year CurrencyShares Swiss Franc Trust FXF

    (click to enlarge)Russell Gold 6 month chart FXF

    CurrencyShares Euro Trust FXE

    (click to enlarge)FXE

    (click to enlarge)Russell Gold FXE 6 month chart

    The charts are suggesting gold and silver are headed for lower lows. Currency ETN's other than the US Dollar, are very bullish. Invest wisely, we are most certainly headed in volatile territory for the remainder of the year.

    Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.

    Aug 09 2:55 PM | Link | 3 Comments
  • Research In Motion Unusually High Stock Option Volume

    Research In Motion Unusually High Stock Option Volume

    Over 100,000 Research In Motion Limited (RIMM) option contracts were traded August 01, 2012. For Research In Motion this is both unusual and significantly high trading volume. The trades were made with the January 2013 expirations.

    The trade is most likely employing a strangle option strategy in the hopes of a significant move in share price. With a strangle, options expire at the same time, but unlike a straddle, the options have different strike prices.

    Research In Motion stock stood in green territory most of the day, opening much higher in the early morning trade reaching $7.39. However, as the market close approached, RIMM shares turned negative, closing at $7.12.

    What was in investors minds? How much that option strangle cost. The cost of 50k in-the-money $8.00 strike puts, approximately $9 million ($1.80 per contract x 50,000 contracts x 100 shares), the cost of 50k calls, $1.75 million. $7,250,000, that is quite the cost difference.

    (click to enlarge)Research In Motion RIMM Call Calendar January 18, 2013

    (click to enlarge)

    The two single block trades consisted of one 50,000 11.00 out-of-the money strike calls and one 50,000 8.00 in-the-money strike puts. High volumes in stock options are very important in predicting future stock prices. Below are the two trades consisting of 50k contracts (1 contract = 100 shares).

    (click to enlarge)Research in Motion High Call Option Volume January 2013

    (click to enlarge)

    An important date to keep in mind, Research In Motion second quarter 2013 results are scheduled for September 27, 2012. Research In Motion last reported their 1st Quarter, Fiscal Year 2013 earnings June 28th. First quarter results disappointed the street and the stock fell sharply. To make matters worse, after the results of the report the company announced a planned 5,000 employee layoff. Yesterday, Research In Motion new CEO Thorsten Heins announced another 3,000 employee cut saying he would transform RIM into a "lean, mean, hunting machine."

    One notable RIMM shareholder is BlackRock Inc. (BLK). Much like Research In Motion, BlackRock is going through some of its own problems. This summer BlackRock lost Robert Doll, senior managing director and chief equity strategist; Susan L. Wagner, a founding partner and vice chairman; Robert Capaldi, senior client strategist; and Daniel Rice, a high-profile money manager. BlackRock Chairman is seeking to reverse withdrawals from active funds and boost assets as its acquisition spree ends, is expanding top leadership and shaking up its investment unit in the most sweeping overhaul since it became the world's largest asset manager. Looks like both Research In Motion CEO Thorsten Heins, and BlackRock Chairman and CEO Laurence D. Fink are overhauling and moving forward.

    Here is a breakdown of other major RIMM shareholders.

    (click to enlarge)

    Aug 09 2:51 PM | Link | 3 Comments
  • Bernanke And QE3 ? Gold And Silver Prices Higher

    QE3? Coordinated Joint Effort? Mortgage Bonds? Treasury Twist? How Much? When?

    What is Bernanke thinking???

    Important questions that need to be answered for SPDR Gold Shares, GLD, iShares Silver Trust, SLV investors. Riskier investors such as double multiple ETF's ProShares Ultra Silver, AGQ, and ProShares Ultra Gold, UGL, might be praying for QE. Both AGQ and UGL are near 52 week lows. Gold mining stocks, such as Market Vectors Gold Miners ETF, GDX, and Direxion Daily Gold Miners Bull X3 Shares, NUGT, who have been hit hard for most of the year, may see the biggest returns. ETFS Physical Platinum Shares, PPLT, and ETFS Physical Palladium Shares, PALL, will benefit as well.

    (click to enlarge) Chicago Mercantile Exchange Gold Spot Prices

    (click to enlarge) Chicago Mercantile Exchange Silver Spot Prices

    Bernanke schedule should be taped to your fridge. These dates are very important for investors all over the world. Most market moves take place shortly before or after FOMC meetings. Below is a chart and schedule of the FOMC meetings for the remainder of 2012. Bernanke will likely use one of these meetings to announce QE3. Markets will gather more volatility as each date passes by.

    (click to enlarge) SPDR S&P 500 SPY

    July 31-August 1 (Tuesday-Wednesday)

    September 12-13 (Wednesday-Thursday)*

    October 23-24 (Tuesday-Wednesday)

    December 11-12 (Tuesday-Wednesday)*

    * Meeting associated with a Summary of Economic Projections and a press conference by the Chairman.

    On August 29, 2010, an election year, Bernanke announced QE2 at the Jackson Hole, Wyoming summit. This year Bernanke will present the annual symposium in late August. The end of August could be the date gold and silver investors are fed some hints.

    We also know many markets and economies around the world are slowing at an accelerating pace. Not only is Europe double dipping into recession territory, but so are the BRIC countries. Here are the BRIC ETF's; iShares MSCI Brazil Index, EWZ, Market Vectors Russia, RSX, Wisdom Tree India Earnings, EPI, and iShares FTSE China 25 Index, FXI.

    It does seem possible Bernanke might be waiting for other nations Central Banks to lower interest rates before engaging in another round of easing. That might even include smaller developing nations in South East Asia and South America. Emerging Countries that would be included are traded in both iShares MSCI Emerging Markets Index, EEM, and in Vanguards MSCI Emerging Markets ETF, VWO.

    The European Central Bank (ECB) is also considering expanding its own Long-Term Refinancing Operation (LTRO). Seeking Alpha contributor Eric Parnell covers the Fed, ECB joint effort. Eric points out since the inception of the LTRO, the ECB and the Fed have coordinated there efforts to stem economic slow downs.

    2012 dates remaining for the General Council of the ECB.

    19 July 2012

    2 August 2012

    6 September 2012

    19 September 2012

    4 October 2012 (hosted by Banka Slovenije)

    18 October 2012

    8 November 2012

    22 November 2012

    6 December 2012

    19 December 2012

    (click to enlarge) US Dollar, rebounding since May of 2011

    (click to enlarge) Euro, declining Since May of 2011

    Gold and silver will not only be the prime movers with QE3. Currency ETN's will also see big action. CurrencyShares Euro Trust FXE, will move up quickly, as well CurrencyShares Swiss Franc Trust, FXF. Both Euro and the Franc are currently near 52 week lows. With QE3 PowerShares US Dollar Bullish Index, UUP, will move inverse to the Frac and the Euro. UUP's open interest and near penny prices on both puts and calls imply both high risk and big rewards. Many traders are hedging market moves with UUP options. Going long with PowerShares US Dollar Bearish Index, UDN, would be a wise move as well.

    (click to enlarge) UUP Options Expiring January 18 2013

    Under current law, on Jan. 1, 2013, there's going to be a massive fiscal cliff of large spending cuts and tax increases," Bernanke told the House. The trifecta of disaster; debt limit, sequestration on spending, tax cuts -- if not corrected will surely put our economy in an ugly recession with even higher unemployment than the last recession.

    Bernanke is likely waiting to see commitment or no commitment from congress before deciding on QE3.

    (click to enlarge) 2012 Congressional Calendar

    I wouldn't bet on Congress getting anything done before January 1st 2013.

    I have concluded the US Federal Reserve is pinned. The world is slowing but not enough to merit any action from the Federal Reserve. Bernanke must wait and see if congress can muster out at least a tax compromise. Until we close in on 2013, Bernanke cannot possibly know how much easing the economy needs.

    Right now your best bet is to sit tight. If September 15 passes by with no QE, it might be time to bet against the markets or take out some insurance versus your long positions. You have many options, two of my favorites are iPath S&P 500 VIX, VXX, or ProShares Ultra Short S&P 500, SDS. If you are going to stay put, you might want to buy some insurance. Financials will also be hit very hard without QE3, Direxion Financial Bear 3X Shares, FAZ is a safe hedge against your long positions.

    Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.

    Aug 09 1:26 PM | Link | 4 Comments
Full index of posts »
Latest Followers

StockTalks

  • FAT COW
    Aug 9, 2012
  • Considering;Fiscal Cliff. Will Federal Reserve Introduce QE3 At this years Jackson Hole Summit? NO QE3 (SLV) going much lower
    Aug 9, 2012
  • How much longer can (JRCC) survive?
    Aug 4, 2012
More »

Latest Comments


Instablogs are Seeking Alpha's free blogging platform customized for finance, with instant set up and exposure to millions of readers interested in the financial markets. Publish your own instablog in minutes.