It's been a heck of a week in the markets ... crude oil at new highs, the dollar getting hammered against the Yen and the stock market continues to melt like an ice cube in a furnace.
So the question is, "what do we have to be thankful for??"
We have so much to be thankful for and this video I found on the net points out all the priceless jewels we already have in our lives.
From the entire INO.com and MarketClub family have a safe and wonderful Thanksgiving.
Good Tuesday Everyone. I decided to give you my usual Lesson a bit early as it's VERY current...
This morning, at 10AM est, the Freddie Mac team addressed what was a packed conference call to report their earnings for Q3 and project where Freddie Mac will end up...AND I WAS THERE!!
Overall the tone from management was optimistic...but understandable so as shareholders have been clamoring to know how management will fix what the sub-prime mess really made on Freddie Mac. But to shareholders and casual observers alike, they knew the outlook for Q4 was grim.
One presenter noted; "Q4 will be a lot like Q4". Does that mean another 25.00 per share drop? The video analysis will help traders understand the conference call a little better along with explaining how trading with the trends in ANY market can be profitable.
Freddie Mac Video Lesson
Open invitation to the FED Chairman Bernanke and to all Fed governors to go shopping
Dear Chairman Bernanke,
Let's go shopping.
I invite you and your entire committee to come shopping with me for groceries in any local supermarket you like. Oh, before we do that let's stop at a filling station and buy some gas.
You know what gas is, right? Well that's the stuff the goes in your car's gas tank, that's what gets most Americans to work.
I am not sure if you, or any of your committee have at anytime in the past year purchased a gallon of milk, 
a gallon of gas, or any groceries to put on the table. But, if you haven't, then its time we went shopping together.
You see Mr. Bernanke, I along with three hundred million other hard working Americans are having a hard time understanding why you keep saying that inflation is under control.
We just don't understand where you get your numbers from? You see we are the regular folks who get paychecks, shop at the local stores and supermarkets and fill up our tanks at the local filling station.
We just don't understand where you go to get your groceries or buy your gas. That is why I want to invite you and your entire committee to come shopping.
I know you are busy, so if my invitation doesn't work for you, perhaps you could let me in on the secret store and filling station where you and the Fed governors shop and buy gas.
Thanks.
I look forward to hearing from you.
Sincerely,
Adam Hewison
Regan: Venezuelan president, Hugo Chavez said today that the empire of the dollar is crashing. Well, he and the Iranian president proposed over the weekend that OPEC price oil against a basket of currencies rather than the dollar. So we're asking today, “Is OPEC more of a threat now then it has ever been in the past?” Well, to answer this one we want to bring in Adam Hewison, technical analyst of INO.com, CNBC's very own Sharon Epperson, and today's guest contributor, Vince Farrel.
Welcome to all of you. Adam, so what do you think? Should we be paying more attention to OPEC then we have in the past?
Hewison: Well this has got all the earmarks of Chavez. He's not our friend, and we have to accept that. He's using a barrel of oil as an economic weapon towards the US, that's the first point. The second point has got to be the sides aren't going to go along with it. They're not going to divest themselves of the US dollar. They've been with the US for a long time, they will continue to be with us. And, the third point is demand. We use 25% of the world's oil here in the US and we represent 5% of the population. That's not going away.
Regan: So it's an opportunity then, do you think Vince for Chavez and for Ahmadinejad to kind of gang up together against a common enemy and spout off a lot of rhetoric?
Farrel: Would you if you were another member of OPEC put your trust in these guys? I think the answer is no. I think Adam is dead right on all the points he just made, and secondly I think Venezuela's oil output is going to disappear. This guy Chavez is a nut, it's going to disappear off the world market because you need to reinvest mightily, especially down there in the Orinoco Belt which is heavy oil. Costs a lot to get out, and even more to refine. And their draining every penny out of PDVSA for his social program and putting nothing back in. And, sooner or later that's going to dry up and he's going to disappear with the sands of time.
Regan: He's certainly made life pretty tough for any American oil company trying to do anything down there in the Orinoco region, and trying to actually process this stuff and make it into oil that one can actually use.
Epperson: Well that's absolutely right Trish. And also the traders here are very concerned about if that could happen. There seems to be a lot of discourse between OPEC over this and whether or not in terms of pricing against another basket of currencies whether or not to even discuss it.
Of course there is going to be a special committee meeting about this. The issue is if it happens, they by chance were to decouple from the dollar, the acceleration of the decline of oil prices would be so great that they would be ever more of a problem then what their facing now with the falling dollar as it stands right now. It's really between a rock and a hard place here because of course OPEC members are losing money with the dollar falling.
Hewison: The price of oil going up is far greater than the decline of the dollar here, so I don't think that's necessarily the thing. You just have to look at, well two great concerns I have... one is the cold spell that's going to hit the North-East (US). I noticed it was snowing in New York today. We're going to have a very colder than normal first quarter of '08, and also demand. We've got to cut back on demand, which means we're probably going to have to build cars that get 50 mpg as opposed to 20 mpg.
Regan: Interestingly Adam, Mr. Shavez said oil could actually go to $200. I remember at OPEC in Venezuela when he said it might hit $100/barrel. It was considered a rather crazy thought back then, $200 certainly seems rather crazy right now, but...
Hewison: He's a great bluffer too, we have to understand that.
Regan: With that said I mean we are looking at it near $100 right now. What do you think the upward trend possibilities are for oil?
Hewison: Well, the great concern I have in the Middle East... Saudi has the greatest amount of oil in the world, period. That all has to come through the Straits of Hormuz. If there's a problem in the Straits of Hormuz, this is all in a volatile area. No one can predict; it's been volatile for the last 20 years, it's going to be volatile for the next 20 years. I have real concerns about the Straits of Hormuz possibly being blocked, and it can be blocked with the size of tankers they have now. So that would shoot prices up to $200 quite easily. So, Mr. Chavez may be right in that regard, but if nothing happens we should go sideways to maybe... uh. We will see $100 print on the tape with oil. There's do doubt in my mind.
Regan: When, when?
Hewison: I think in Q1 of '08.
Regan: Ok, we've got you on record.
On November 8th Google (symbol goog) had it sharpest one day point move for the year, as it dropped over 37 dollars for a stunning 5% loss for the day. Many Google traders were shocked at the severity of the down move. The move which was like a tidal wave of selling pressure triggered two key technical indicators to turn negative for the first time since August 23rd. This ended what had been an amazing bull run for Google and the two other titans of tech, Apple (aapl) and Research in Motion (symbol rimm). It also proved that gravity, discovered 3 centuries ago by a mathematician and physicist Sir Isaac Newton was alive and well.
Many traders were simply stunned by Google's market action as it led the tech sector meltdown. Here was one of its shining stars caught in a downdraft that seriously damaged it's stock price and the psyche of many traders.
Chart Courtesy of MarketClub.com
Now for the good news. Could the precipitous drop in Google's stock have been predicted? The answer to that question, is yes and no.
Technical analysis is enormously important when measuring market sentiment and judging on how hot a market is running. Google's move below its Parabolic Support line on 11/08 was the first indication since August 23rd when this indicator turn positive that Google was in trouble. A day later on November 9th, Google crashed below its Moving Average Convergence Divergence line (MACD) this also added to Google's downward spiral. These two indicators that are widely available in most commercial charting package and well as our own MarketClub.com confirmed that the down move in Google was for real.
While Google appears to have put in a top at $747.24 on the November 7th it remains to be seen if this is major top. Our gut feel, is that this is an important top but we have no confirmation that this is a major top for this stock. We expect that Google will have to do a great deal more backing and filling south of the $700 level and enter into more of a two way market in the short term.
As for me, I will be watching both the Parabolic and the MACD indicators to see where this market bottoms out.
Adam Hewison
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