Thursday, April 28, 2011

UNG jumps, and why (now that is a good question!)

This is UNG today, up quite a bit, +3.3%

At 10:30AM the natural gas inventory/storage was released, showing  an injection of 31Bcf.

This is being portrayed as low. You know what happens after this, week after week.

We shall see if UNG resumes its eternal drop in the following days.

Wednesday, April 27, 2011

Gold & silver ETFs soar after Fed's QE announcement; gold at $1,527

Please take a look at the gold, silver, and precious metals ETFs (that we track live here). It's is a sea of green:

With the price of gold hitting  a new record high, it is no wonder:

The reason for this is clear, QE continues.

Bernanke: “We are going to continue to reinvest maturing securities, both Treasuries and MBS, so the amount of securities that we hold will remain” approximately constant,  “The amount of monetary policy easing should remain constant going forward from June.”"

Monday, April 25, 2011

Gold and silver soar; Precious metals ETFs: AGQ up +982%

Both silver and gold are soaring today, particularly silver, which is up over 5%.

Please take  a look at the ETFs that we follow live:

AQG is up a mind boggling +982% since 2009.

Bank of China vs. Soros and Wild Rumors: Yuan Appreciation Will Not Help Against Inflation

We track all currency ETFs live here. The Chinese currency ETFs we use is CYB.

Throwing cold weather on Bill Soros comments and wide and wild spread rumors last week about a sudden major Yuan appreciation, the Bank of China says that the revaluation of the yuan will not be an effective weapon against inflation "but rather a consequence of growing inflationary pressure".

In fact, today China's yuan fell by its daily limit against the U.S. dollar after several large import settlements led to a temporary spike in demand for the U.S. currency.

The comments were made by Deng Lei, deputy general manager of the treasury department of the Shanghai branch, Bank of China.

"I do not see much of a correlation between the two, as the rocketing prices of international commodities have contributed to the current inflation rate," "For instance, if the yuan appreciates by 5 percent and the price of crude oil surges by 10 percent, the domestic market still faces a 5 percent rise, which leaves the problem unsolved," (China Daily today)

Billionaire investor George Soros said earlier this month that the appreciation of the currency as a way of controlling inflation would be "advantageous".

Previous experience in some South American countries has indicated that the rise of a currency might thwart its competitiveness in exporting goods, which can lead to the collapse of the national economy"

China this month registered its first quarterly trade deficit in seven years, reflecting the faster-than-anticipated rising prices of imported commodities.

The yuan's appreciation "will be no help in rebalancing global recovery, as it would depress US consumer demand and would not shrink the US trade deficit",

The yuan has gained 4.6 percent against the US dollar in the past two years, the second-smallest gain of 10 Asian currencies tracked by Bloomberg.

"Domestic demand, notably rising labor costs, has helped to cause the high inflation but it is inevitable during economic transitions,"  "Tightening monetary measures, therefore, will assist in managing the inflationary pressure caused by domestic stimulation plans after the financial crisis."

Deng also forecast the possibility of another rate increase in a "steady and gradual manner", he emphasized the moves "cannot continue indefinitely as it brings new pressure on exchange rate hikes that deviate from the idea of curbing liquidity".

Thursday, April 21, 2011

UNG shows good bounce, but beware contango still in effect

UNG has bounced  a little in the last couple of days:

It is a god bounce from the local low of $10.60 to $11.33 or so.

However, the current situation is that there is contango of 1.0% from May to June and of 1.7% from June to July contracts. This is still not good news.

Monday, April 18, 2011

U.S. Downgrade: Gold and Silver ETFsJump, Bond ETFs Drop Hard

The U.S. downgrade by S&P today to AAA negative  is having major effects on the price of gold and bonds today.

From our gold etf tracking live site (click)

 Look at AGQ, +843% since 2009, amazing.

From our bond ETF tracking live site (click)

Bonds are all negative (you don't see red on the dailies, but bonds move significantly less than stocks, 1% is a big move)

Thursday, April 14, 2011

Natural gas injection is very bad news for UNG

UNG holder should take note that today there was an injection of 28Bcf.

The total amount in storage went up to 1.607Tcf, in spite of the the cold weather. This is very bad news for natural gas, in spite of the spike in UNG today. We have seen this pattern before in recent weeks.

Wednesday, April 13, 2011

European troubles continue: Portugal now only has money until May; food inflation soars

And we are in April!

This is today's cover of Jornal de Noticias:

The first headlines says: Government admits it only has money until the end of may". The country needs $5B to pay debts that come due in June. "To make matters worse, food and gas prices continue to rise".

That may be better than some other countries.

We track all country ETFs live here.

Tuesday, April 12, 2011

Germany to exit nuclear energy; Uranium and nuclear ETFs take a hit

The Japanese earthquake has been very damaging to nuclear and uranium companies and ETFs. The news from Germany today does not get any better: it will exit nuclear power sooner than planned.

Germany said it will accelerate the shift toward renewable energy as well as increased energy efficiency.

There is a €5 billion program to increase offshore wind power to be launched this spring.

Hundreds of thousands of people have protested recently in Germany against nuclear power.

This may be why the URA and NLR ETFs has been taking another hit in recent days:

 Please note also that we track nuclear companies as well live, on this site (click).

Monday, April 11, 2011

Think oil has risen a lot? How about a gasoline ETF instead? Much better performance

Please see below a comparison between the major oil and gasoline ETFs, USO and UGA:

6 months: gasoline +51%, oil +26.3%

2 years: gasoline +4.67%, oil -45.6%

This is terrible performance for the oil ETF in the longer time frame. While it's coming off the oil peaks of 2008, the ETF still performed worse than the price of oil. West Texas peak price was $147.x in 2008; today it's prices at $112.80 or so, that is a drop of about 30%.

There is no question that the gasoline ETF, UGA, was the better choice.

Friday, April 8, 2011

Gold jumps to record high: gold and silver ETFs soar, AGQ +689%

Spot gold has jumped to a new record high today:

Gold ETFs are doing very well as well:

AQG (silver), +689.9% since 2009, amazing. We track these ETFs live here.

Thursday, April 7, 2011

The dreadful performance of the bizarre TVIX ETF: -70% in 3 months

Leveraged ETFs are something to stay away from for any period longer than a few hours. We commented a couple of months ago on the launch of yet another bizarre version, the leveraged VIX.

Please take a look at the TVIX perfiormance since inception:

The performance since inception, December 2010 (!): -70%. Wow.

SEC : "The ETNs are riskier than securities that have intermediate or long-term investment objectives, and may not be suitable for investors who plan to hold them for longer than one day.

Wednesday, April 6, 2011

Natural gas contango worsens; UNG drops hard

Contango has worsened today, now at 1.93% for the two front months:

UNG has done very poorly, same as every time this happens, what can we say.

Remember that UNG did a reverse split a couple of months ago, "kiss of death".

Brent crude oil hits new 2.5 year high: USO ETF buy alerts

Brent crude oil has reached a new 2 and a half year high this morning, trading at $123.

USO alerts charts, note the score of +90 (from INO's system, click for trial)

Note also that we are still way off its peak of 2008  in the middle of the financial crisis. Note the accuracy of the signals, particularly the sell in July 2008 (red triangle).

To really see the rise, please see the 6 month chart, note the buy signal (green triangle) in November:

Japan's Yen falling hard, FXY ETF shows sell signal

The Japanese yen continued to significantly weaken overnight, with a  little bump this morning. This is a  24h chart (from INO's tools):

The FXY ETF now shows a clear sell signal, note the red triangle (and score -100):

Tuesday, April 5, 2011

Currency ETFs and the U.S. dollar: BZF hit new all-time high

With yet another upgrade on Brazil yesterday, the BZF ETF has reached a new  all-time high.

Please note that BZF issued a distribution of $3.22 in December.

We track all currency ETFs here.

It is only a matter of time before the Brazilian central bank intervenes, although today they were saying that it's better to have a string currency and a strong influx of dollars than the opposite.

All those U.S. dollars are indeed flowing into Brazil.

China raises rates again: top China ETFs

China has done it, again. The central bank has raised interest rates, the second time this year alone, as it struggles with inflation.
Inflation has been running within striking distance of a 28-month high of 5.1 %, and is expected to rise further in coming months.

We track Chinese ETFs live here.Top performer since 2010 is actually the 3X bull ETF.

Friday, April 1, 2011

Yen drops hard: FXY straddles +35%

Here we go, the Yen is dropping hard. Our FXY straddles from March:

Here are the buy-sell signals for the Yen itself, note the +100 score on the USD versus the Yen:

And for the FXY ETF, note the -100 score (sell!):

From INO's tool (click here for bonus access).

 And the buy-sell signals for the last 2 years, pretty good:

Yen continues to drop today, lower than before earthquake; FXY Straddles

The Yen continued to drop overnight. Stay tuned for an update on our FXY straddles later today.

You can clearly see the Yen bounced after the earthquake, and the sharp reversal. The Yen is now lower than it was before the earthquake, as we expected it to be:

Charts are 24h, from INO (click for free 2 months bonus).