Category: General

Market Perception, China And Why Gold Is Going Higher

Posted on by The INO.com Team

The carnage continues in China with the market closing after 30 minutes of trading when it reached the 7% trigger point to close the market. That weakness spilled over into the European and US markets this morning, all of which are sharply lower.

One bright spot this morning is the that gold seems to be finding new friends that have pushed it up to its best levels in 2 months.

Why is all of this happening?

It all boils down to market perception. Perception is perhaps the most powerful force in the marketplace and the perception right now, no matter how irrational, is that investors do not want to own stocks. Investors were clamoring to buy Amazon when it was approaching $700 a share, now this morning Amazon is down almost $80 from its recent highs. Did Amazon's business model suddenly change? No, perception changed. Investors do not want to own Amazon right now as they think they can buy it lower.

The other big change, of course, is the fact that the Fed is no longer printing money and using quantitative easing to goose up the market. The fact that easy cheap money is no longer available is a psychological impediment to the market going higher. Continue reading "Market Perception, China And Why Gold Is Going Higher" →

Veteran Investor Rick Rule Reveals a Unique Arbitrage Opportunity

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One of the hardest things for a mining executive to do may be nothing. But in a market that is not rewarding companies for pulling resources out of the ground, Sprott US Holdings Inc. CEO Rick Rule would prefer to see what he calls "optionality" rather than dilution from companies looking to justify salaries. In this interview with The Gold Report, he praises innovative precious metals streams on base metal projects and one Canadian company that is adding value and being rewarded for it.

The Gold Report: In November, you called the bottom for precious metals. Do you still believe that we're in the bottom?

Rick Rule: Yes, as long as you can define a bottom gently. I said in that same interview that the most important factor in gold pricing was the fact that it was priced in U.S. dollars, and we see a topping in the U.S. dollar. In fairness, Karen, if you had asked me that same question two years ago, I would have responded in the affirmative and been quite wrong. But I do think the upside in gold is both larger and closer than the downside in gold.

TGR: Now that the Federal Reserve has increased the key interest rate slightly, the expectation is that the value of the dollar will increase relative to other currencies. How could that be the sign of a bottom for gold? Continue reading "Veteran Investor Rick Rule Reveals a Unique Arbitrage Opportunity" →

GPS vs. Road Map: Which Works Best? (Part 1)

Posted on by The INO.com Team

By: Elliott Wave International

Some of the best stories about global positioning systems (GPS) are the weird detours they sometimes recommend.

A while back, while on a family trip through Great Smoky Mountains National Park, I decided to use my GPS to drive around the park's western boundary to see the wildlife. My old-fashioned map made it look like it would take the better part of the day. But my GPS said the trip would only be about 20 miles long. Little did I know -- until I got there -- that the road from the GPS was only the remnant of an old wagon trail. I had to backtrack and take the path my paper map had originally suggested.

Sometimes, the old-fashioned way of doing things is still the best way.

I believe that's true when it comes to analyzing markets, too. Financial markets can also make you take weird "detours" -- just when you expect the price to go straight up or down, depending on how you've positioned your trades. Continue reading "GPS vs. Road Map: Which Works Best? (Part 1)" →

How To Profit From Government Mandates In Biofuels

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The Energy Report: New proposed Environmental Protection Agency (EPA) requirements for the renewable fuel standards (RFS) program could change the landscape for biofuels. What is the new supply-and-demand picture for corn ethanol, biodiesel and sugarcane ethanol?

Brett Wong: This is a proposal, and not a confirmed mandate, which we expect to get by the end of November. The two most important pieces in the standards cover corn ethanol and biodiesel usage requirements. The new proposal for minimum corn ethanol use would be 13.4 billion gallons (13.4 Bgal), which creates a floor. The blendwall, based on Energy Information Administration's (EIA) expectations for gasoline consumption this year, is about 14 Bgal based on 10% ethanol content in gas, which car manufacturers say is a safe level for the fleet. That is the domestic ceiling. This leaves discretionary blending from 13.4 up to 14 Bgal. Beyond that, the demand is from exports, which use up the overall capacity of about 14.7 Bgal. Some people talk about 15 Bgal, but I think that includes some facilities that will never come back on line.

"Renewable Energy Group Inc. could be the biggest winner within the nonintegrated biodiesel providers."

We send a good amount of our ethanol to Canada, which has blending mandates as well. We send some to South America. Brazil has a large blend requirement of 27.5%, which was an increase from 25% last year. That country produces a lot of ethanol from sugarcane, but it has had some rough crop years and must import biofuel to fulfill mandates. There are also more exports going to Asia, where China is trying to clean up its air. Continue reading "How To Profit From Government Mandates In Biofuels" →

Trading Tip #12 - Have Fun

Posted on by The INO.com Team

I hope that you have gained valuable insight to the markets with the "12 Days of Trading Tips" and can use some of the tips to help make 2016 your best year ever.

12 Days of Trading Tips Day 12

With that said, here's the last tip: Have fun!

Trading stocks can be complicated, intimidating at first and of course, stressful. But if you do your research and plan, it will be fun.

Have a safe and happy holiday season and a Merry Christmas.

Every success with MarketClub,
Adam Hewison
President, INO.com
Co-Creator, MarketClub

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