Tom Luongo

Newsletter provider, tech, gold & precious metals, currencies
Tom Luongo
Newsletter provider, tech, gold & precious metals, currencies
Contributor since: 2012
Company: Newsmax Media Inc.
Saif,
Part of Shell's underperformance is tied to the weakness in the British Pound. And that will likely continue for the near future. It'll take a collapse in Europe to arrest the Pound's weakening versus the dollar, IMO. That is very possible as the political situation there is deteriorating rapidly.
Once we get a bottom in oil and a reversal of capital flows into European Sovereign Debt Shell could outperform the U.S. majors if the pound recovers to $1.50.
@Steven Yes, a political settlement will likely happen quickly. Also, understand that Russia and Iran are now strategic partners. Gazprom's Alexei Miller made it clear the other day that Iran will not be adding significantly to European gas supply anytime soon.
I'm taking Miller at his word, and it supports what you said about Iran 'owing' Russia. And this is one of those ways Russia gets repaid.
And the U.S. won't like any of this one bit. The bigger question isn't whether the U.S. buckles but whether the U.S. has any effective say left in the matter at all?
I'm more worried about the Saudis doing something incredibly stupid and provoking a wider conflict than I am about the U.S. I think we're still looking for a way to save face and salvage what we can. The Saudis position is much more existential.
Putin's approval ratings here in the U.S. are already rising. But, where he needs improved press is in Europe. If Russia can stabilize the region and staunch the flow of refugees Putin will be very popular in Europe, which will ensure Nordstream and Turkstream happen, at a minimum.
Gazprom has traded between 130 and 160 Rubles per share for three years. The drop is all Ruble-related. So, if you think the Ruble is going to 100, which I don't, then OGZPY is a sell, otherwise it's a collection of some of the most under-valued assets due to political risk in markets today.
The likely scenario is to continue bouncing between $4 and $5 until sanctions are lifted by the EU. If Nordstream-2 goes off without a hitch, and it looks like it is since construction is underway, then that would signal EU leadership is done playing by the U.S.'s diktats and forging an independent energy policy.
Steve, in answer to your rhetorical question about Russia siding with Iran that's easy. It puts more pressure on Saudi Arabia's already tenuous nee disastrous financial situation and stabilizes all of central Asia for growth.... part and parcel with China's new silk road projects. And it restores Iran as a major power broker in the region as opposed to the Saudis. The Russians, having free-floated the Ruble are not hurting as much from low oil prices like the Saudis that are still pegged to the dollar.
There is plenty of trade between Russia and Iran possible aside from oil. Think uranium, defense, IT.
Once Syria's been mopped up, Ukraine will resolve itself, with the Donbas acceding to the Russian Federation.
But, for now, Gazprom, in dollars, is a yield play at best.
@Pink While I love SE US timber as a long term play, we're more likely looking at at supercycle in the USDX than in housing starts and that's not 'good eats' for RE investors.
In fact I would be net short real estate in general for the next 5 years while looking for gems in specific areas of the country that could do well.
Timber is a contrarian play while commercial property gets crushed but the whole sector will be under pressure as capital flows back out to Europe, Russia and China thanks to a stronger dollar and a flatter yield curve.
Good luck all.
FNV is a possibility since Pierre Lasonde already has money in PVG. The big question is when gold turns around, which isn't quite yet. But, when it does PVG should quickly outperform the rest of the mining sector.
@Puma Of course Washington is behind this. They are behind every idiotic move the EU has made in the past 2 years vis a vis Russia.
Putin is playing a very smart delaying game allowing the sanctions to further hollow out the EU economy and deteriorate its banking system while pivoting east and targeting weak NATO assets like Turkey and Greece who have been thrown under the bus by the US/EU.
This anti-trust suit is naked payback for Russia courting Greece and the EU has no leverage.
Yes. They are. And while the case may be a slam dunk, what is the EU going to do? Tongue wag, is what. And then they'll pay up because all that matters here is the leverage and Gazprom/Russia has it and the EU doesn't.
Velocity of money has been falling for 30 years. During that time gold rose and it fell. As for the 'ignoring history' thing... QE1 and QE2 were very good for gold. QE3 was not. At this point the effects of QE4 are, at best, unknown.
Instead of looking at either of these things by themselves look instead at what they are symptoms of.... faith in central planners to keep the system afloat. The reason bulls (like myself) feel that QE4 would be a positive for gold is that it would countermand the Fed's communications policy and reveal that they have no good answers to the problems.
That (the loss of confidence) is when the majority of market players will shift in sentiment to the other side of this trade and overwhelm those pushing the price down in the paper markets. QE4 could be that trigger. So could about 1000 other things.
RIght now central banks are 'infallible' that will not last.
As for whatever system you use to handicap sentiment monthly and quarterly highs, lows, and closes are data. Not interpretations of data which are, at best, faulty in a market with so few real actors. THis is my fundamental problem with Elliott Waves, moving averages, RSI, MACD and all the rest.
Keep your focus on big signals not the daily noise to get the best quality signals.. and even they are flawed at this point.
Saif,
Good overview of STO, thanks. Looking at the chart right now I would be cautious of a monthly close below $27.52 since the breakout above $29 has failed.
If the current situation with the dollar intensifies, i.e. more USDX strength due to liquidity drying up, oil prices will get hit with another round of selling and the majors will all take a hit.
My feeling is that things will be touch and go until after the U.S. elections. But, fundamentally, yes, I like the moves STO has made, but the key to the trade will be timing.
Nice to see you in good form, my friend.
@Stock This is the big point and why DDR4 support for Carrizo is so important for AMD in 2015, especially with the pushback of Broadwell later into 2015 gives them a real opportunity.
It's also why a dual channel memory controller (at a minimum) is needed for the next iteration of the small 'cat' cores.
Gold gave a two-bar monthly reversal in February... It's been basing since then. Investor sentiment is still unbelievably bearish. CEF is still trading at a 4.3% discount to NAV. If sentiment is so good, why are people not bidding up the price of a known quantity of physical metal?
A 3.2% move on Thursday is indicative of a loss of control and repositioning by sovereign money, e.g. China.
Look at the broader commodity complex in inflation terms and then tell me with a straight-face we're headed to $1000 gold.
If we close above $1316 this month, that would monthly reversal bar of this three month correction and confirm the recent lows as the new bottom. Y'all need to be watching the 2 year bond market to see the real action.
The last volatile market is the one where the Chinese own a significant portion of the issue.
Color me not-shocked that Avi continues to peddle the bear case even though the dollar can't rally after the ECB goes to NIRP and backdoor QE while the Fed nominally tapers.
Justin,
If our forensics into mobile Kaveri dual graphics is correct, then the performance 'mixed bag' was due to clock normalization of the dGPU with that on board the Kaveri APU. An R7 250 added in was downclocked to 720MHz by the driver to match that of the Kaveri GPU.
This disparity between clock rates is lower with the mobile parts and therefore as drivers mature dual graphics should work better on the mobile platforms. We'll never see this benchmarked in the tech press b/c they have the narrative they want, and AMD's marketing guys are hopeless -- or under funded. Either way it amounts to the same thing.
@Kasteel Please read my article where I address this subject directly and you can see the math for itself.
Now project better ASPs and margins for discrete video cards, both retail and professional, and the whole picture is completely different. You are free to not believe in the turn around story but if you do it is not based on the numbers but rather a perception of what you think the numbers mean. That's your choice but IMO you are missing the point on what could easily be the biggest winner in tech over the next two years... that's how far your analysis is off.
here's the article that touches on the margin story.
http://seekingalpha.co...
@Kasteel
And if you did the basic research you would know that gross margins are expected to drop with the change in business model to capture higher net margins (the point of any organization) over a longer period of time.
That's the semi-custom model. Moreover, the R&D expenditures are down because the model is designed around working with the client, cf. Sony, MSFT, to share research expenses. Couple that with chips built around portable IP blocks which can be mixed and matched creates a multitude of customized solutions for individual clients.
Lastly,
"I do believe companies need to spend money to make deals. In the case, you said AMD would have spent nothing, which is wrong IMO. I guess the company decreased at least, its margins to get the deal with MSFT and SONY. "
This is flat out wrong. CFO Devinder Kumar has stated on the record that the console wins will be accretive to net margins up to the 'high teen %' as production of the chips stabilizes and optimizes.
AMD is not just turning things around by cutting costs. It has fundamentally altered its business model from that of a traditional capital-intensive chip maker to more of a licensee approach and as such using the old gross margin trickle down analysis is simply inappropriate.
Hence, I would tell you to cover your shorts or at least keep your sell-stops tight.
@Arvin the WinXP upgrade path is a great opportunity for new budget performance PC sales. We'll see how that shakes out. Good point.
@e92 Those are really impressive improvements. Now, imagine those numbers having come out in mid-January. We knew it was just a matter of the technology improving and you gave us some proof. The rest of the tech press frankly cannot be bothered except to reinforce their own biases.
What matters now is sales. And it looks like Kaveri, despite people holding their noses, is priced properly. The longer that persists the better it is for AMD.
@asH9 Cool. I have that Mobo for both Kaveris.... good board. Thanks!
@asH9 I've pushed my 7850k to 1062MHz on my water cooler with no problem. Stability was iffy with my memory though... Kingston HyperX 2400MHz.. I think the timing is too wide. I downclocked it and it works fine.
What's the CAS timing on your Radeon 2400 sticks?
@Xtian I wouldn't pair a Kaveri with an R9 for today's market. If you're thinking about future-proofing a bit with newer games utilizing both GPUs independently, then maybe.
But, still they aren't really a fit. An Athlon x4 370 plus R9 is better value.
I like Gigabyte motherboards, they work really well. If you do go with a Kaveri, look into memory timings @ 2400MHz. I had real stability problems with mine which disappeared when I downclocked the memory to 2133MHz.
I haven't had the inclination to play with timings/NB voltages/etc. to tweak the 2400MHz memory.
@Techno I play Diablo III at 1080p, high settings on my 7700k. I did some benchmarks last night with FRAPS and got 33FPS during heavy combat. 2133MHz memory. I OC'd the GPU to 862MHz and the performance went up to around 39 FPS. But, these were just one-offs. Need to do more rigorous testing.
I'm going to go through and OC both of my Kaveris at some point under a Dual Graphics load. I'm waiting for AMD to include the R7 250x on the dual graphics list for Kaveri. It should be doable for that part if they are, indeed, downclocking the discrete card, especially the 512 shader variants.
@Tech, Kj, Stephen, Stocks et.al. Thanks for the kind words. Today's open is very strong and if it holds the stock could/should pop next week. There's room to tack on another $0.25 to $0.30 from yesterday's close based on monthly average moves.
@rav I too haven't paid Charlie the $1000 for total access, but that article on NVDA was nearly worth it to me. Nearly. It shouldn't be too hard to guess, though, given what we know about how inappropriate for its intended markets the Tegra K1 is.
Why else would NVDA go from competing in a mass market arena with decent margins, tablets and phones, and move to an OEM nightmare like cars?
Anyone who has ever worked for an auto OEM knows that the margins are non-existent and you can only make it on volume.
FYI, I do pay Charlie for the intermediate subscription.
@ta Joel Hruska's article is his opinion and one I do not agree with. I've pretty much given up on anything he has to say with respect to Kaveri. His latest article on dual graphics is nothing more than a sideswipe because he couldn't be bothered to spend $149 and run the same benchmarks with a 7700k or overclock the 7850k he has knowing full well that the driver downclocks the discrete card to that of the iGPU.
So, with the driver improvements and the fact that we've seen the worst that Kaveri has to offer consumers ... and it's still selling pretty well given the above list pricing at Newegg, Amazon and TigerDirect you're still looking at what you see rather than what the market is telling you?
Here are the links to Kaveri pricing a full 2 months out from launch:
Newegg: http://bit.ly/L5uUEj
TigerDirect: http://bit.ly/1r31cA9
Amazon: http://amzn.to/1r31cAb
@stock The chart tells us that you are correct. Sentiment has turned and I like the technical action of the stock since it bounced off the earnings wash-out. A move above $4.06 tomorrow will bring on another round of short covering, especially into op-ex.
@romeras Thanks for that link. Microservers are definitely a major part of the AMD story and a significant turnaround for both HP and Dell would benefit all three.
Again, I really like AMD's partnering strategies in various markets, building relationships with major vendors who can drive an industry -- consoles, servers, and I expect soon, professional graphics.
@e92 Excellent. What's the link, I'll make sure to read it. And both of my kaveri machines are much more stable since 14.2 came out. FYI
@Papa Thanks for the morning LOL. It is greatly appreciated.
If I made a mistake in looking at this week it was the effect of Yellen over-selling raising interest rates ahead of a triple-witching day to push gold below the option pain number and stuff the forex markets back into their boxes.
Watch the blow-up in the USD/CNY, however. Above 6.20 and the western banks are in deep water over their long yuan derivative bets.
@ant21b Again, nonsense. We won't be ready to export LNG to Europe for another 4 years. What do you think the entire gambit was all about in Ukraine? To expand NATO eastward like it has been doing since the Soviet Union fell.
The question is what will NATO actually do? And pounding sand in Kosovo is one thing. Going up against Russia directly in Ukraine? Don't make me laugh.
Never get involved in a land war in Asia. The U.S. has 3 of them currently going on.
@ant21b Nonsense. Of course the U.S. was intimately involved. Our own people were caught on tape saying we pumped $5 billion into Ukraine to create this coup. Garden variety claims of 'tin foil hats' is passe. Nothing happens in geopolitics without cause. There are NO coincedences and as an investor/trader you have to be aware of that.
If you choose otherwise, well, it's your money.
@Papa Yes, Germany and France wanted nothing to do with this, ultimately. Neither did the U.K. The EU will have to choose between the U.S. and the BRICS in the near future and their energy bread is buttered from the East not the West. And the only way out of the debt deflation trap is to allow gold to rise to cover the monetary base expansion necessary to balance the books.
But, for right now? Gold may be weak for a few days while we gear up for the next crisis.
@Papa I think Crimea is a done deal. Whether the rest of Eastern Ukraine goes as peacefully is wholly up to the crazies the U.S. put in charge in Kiev, because the US/EU have spoken and the word is "whimper." And good on them. Not wanting to start WWIII over this where it is obvious that they would be in the wrong is crazy.
There isn't enough pancake makeup in the world for Fox News to spin this to the US electorate that this is evil Vlad the Impaler reincarnated.
But, the follow on moves? Those could get much more interesting. I'm not selling my gold over this. But, a bit of the war trade froth is now gone from the gold market while the POMO froth continues in the S&P just like the Fed wants it.
@Recusant I just got back from running an errand and am, frankly, a little surprised to see gold back over $1362. That is really good price action during COMEX hours. I would like to see a move above last week's high, though... inside bars are usually really bad for gold.
There is more going on in the gold price than just the Ukraine/Crimea situation. The dollar is the key, the geopolitical moves are the headlines but the currency markets are where the real story is being told.