Market Discussion

[terainvestment]

DAVID:

yesterday nigth I read a thread of Terliso: "from 5,000$ to 50,000$".

I found very interesting the story behind this challenge and probably many members or potential subscribers of 3SOF could be intrigued by such contests and subscribe to your service.

Why don't you launch with Terliso or with AussieTrader a new contest?

"From 10,000$ to 100,000$": one trade a time, and with a time frame of one year!

It would be pretty exciting see the best traders here picking stocks...and win the best! 

[AussieTrader]

Hey Terainvestment,

I agree that would be something of interest.

In fact David, Ramsberg and I have already had discussions based on the possibility of re-establishing the stock picking competition which 3SOF ran a while back. Here is the old stock picking competition board location http://www.3stocksonfire.org/trading/index.php?board=17.0

Thanks for your input.

[la-onda]

shadowtrader update:

http://www.shadowtrader.net/videos/sunday040608st.html


cheers
Oliver

[tokyopua]

Looking for OPTIMISM! :-)

$INDU 12,099.66, -293.00, -2.4%) ended the day with a gain of 420 points, the biggest one-day point gain in more than five years. ( Read full story.)
But there's more reason for the bulls to cheer than the magnitude of the day's point gain. Tuesday's action also was strong enough to trigger a bullish technical event known as a "Double Nine-To-One" signal.

This indicator is based on the volume of all NYSE-listed stocks that go up on a given day, expressed as a percentage of the total volume of all stocks that rose or fell on that day. On a day when rising stocks' volume is the same as declining stocks' volume, for example, this ratio would be exactly 50%.

A single "Nine-To-One Up Day" occurs when this ratio is 90% or higher on a given day. According to Martin Zweig, who helped to develop this indicator several decades ago, such a huge imbalance of up volume over down volume "is a significant sign of positive momentum. In other words, when daily up volume leads down volume by a ratio of 9-to-1 or more, that tends to be an important signal for stocks." The quotation comes from Zweig's 1986 book, "Winning on Wall Street."

An even more bullish signal, according to Zweig, is when two "Nine to One Up Days" take place within a short period of time -- something he called a "Double Nine-to-One" signal. It is this more bullish signal that got triggered on Tuesday: March 11, one week ago, was a Nine-to-One Up Day, and so was Tuesday, when up volume constituted more than 95% of the combined volume of both rising and falling stocks.

How bullish is a "Double Nine-to-One" signal? One answer is provided by David Aronson, an adjunct professor of finance at Baruch College. Professor Aronson is the author of a book titled, "Evidence-Based Technical Analysis" (Wiley, 2007), in which he discusses how to use the "scientific method and statistical inference" when judging investment strategies.

Aronson, along with the students in a class he teaches at Baruch College, tested the statistical significance of "Double Nine-to-One" signals. Aronson told me that he and his "class used data from the beginning of 1942 through fall of 2006, and we looked at what happens in the stock market in the 60-trading-day period following a ... double Nine-to-One signal, versus what happens the rest of the time.

In those 60-trading-day windows, the S&P 500 index  produced an average annualized return of over 22%, on the assumption that an investor entered the market on the close the day after a double Nine-to-One signal was triggered and held until the end of the 60th trading day later."

"In the non-signal periods," Aronson continued, "in contrast, the return averaged 4.5% annualized. The difference between these two average returns is statistically significant."
Aronson told me that these calculations do not include dividends.
Are there are flies in the ointment? Of course. There always are.
One is that "Double Nine-to-One" signals aren't foolproof. Such a signal was triggered last November, for example, and, far from rising at an above-average rate over the subsequent three months, the stock market fell.

Another objection is that it may not be entirely fair to consider March 11 to have been a "Nine-to-One Up Day." That's because NYSE up volume on that day, as a proportion of total volume of both rising and falling issues that day, came to 89.998%.
A technician who rounded percentages to two or fewer decimal points would have concluded that March 11 was a Nine-to-One Up Day. But someone who calculated the ratio out to more decimals would have concluded that March 11 didn't qualify and, if so, then we didn't get a Double Nine-to-One signal this week.

However, Aronson, in an interview Tuesday afternoon, indicated that in his opinion, March 11's volume data came close enough to qualify. Had it been included in the sample studied by him and his class, March 11 would have been considered a "Nine-to-One Up Day."
Finally, a more serious objection is that there have been around a dozen nine-to-one down days over the past couple of months. However, Zweig argued in his book that Nine-To-One Down days do not have as much bearish significance as Nine-to-One Up days have bullish significance.
The bottom line? Tuesday's "Double Nine-to-One" signal may not prove to be as reliable a signal as it has in the past. But the bulls can nevertheless console themselves that the burden of proof has shifted so that it's now the bears poking holes in the bullish argument rather than the other way around. 

LINK: http://www.marketwatch.com/news/story/tuesdays-market-flashed-double-9-to-1/story.aspx?guid=%7BC61515A8%2D00F0%2D4460%2DAC40%2D51E2BA8D864B%7D&dist=TNMostRead

Anyone know whether the huge up day last week was also a "Double Nine-To-One" day?  That would be 3 in a row, clearly super bullish if so

[setravis]

The market indices moved sideways again Friday in an attempt to correct a near-term overbought situation; however, further correction is needed, and a shallow pull-back is still anticipated to take place this week.

The strong buying force underpinning the market indices, but also points to the need for a pause before any subsequent phase to the uptrend can recommence.
The critical question to be answered is whether the last two weeks of buying force were enough to cause the long and intermediate-term trends to find bottoms and build bases from which an investors' rally can set in for an extended period of time.

There is insufficient evidence to draw that conclusion at present, but a number of signs are encouraging. The long-term trend, which had been down since January 7, turned to flat last week, and the intermediate-term trend has moved up from an oversold bottom on March 28.

It is the near-term trend indicators which are in need of a downward correction. All four have been in an overbought state for the last four trading days. Historically, such circumstances last for up to not more than two weeks, rarely three weeks, before starting down again.
The week before last,
the near-term trend indicators climbed from oversold to overbought territory, while the DJIA was declining from about 12,600 to 12,200. All the while buying forces were accumulating, and last week the DJIA climbed back over 12,600, providing a good sign that a new near-term trend high had been reached. An important hallmark of the market having found a meaningful bottom is when measured trends' successive highs and lows are higher than their predecessors'. The reverse has been the case up until last week, thus properly characterizing the time period for the first three months of this year as an investors' downtrend, made up mainly of downtrending indices and long- and intermediate-term indicator declines.

Any meaningful turn in the longer-term market trends would expect to commence with upturns in the shorter term trends. The trade-term trend appears to be trying to cooperate by finding higher intraday highs and lows in both the indices and the indicators, although so far the trend is only slightly up. A good sign would be for the DJIA to rise above the 12,750 level intraday before any corrective pull-back sets in. There is likely to be a follow-on rally this morning as the trade-term trend indicators became oversold on Friday, and were headed north as the day ended. However, the same indicators may become overbought before the DJIA can reach 12,750, and clearly demonstrate that what might still be a bear market rally has turned in to a longer-turn uptrend.

Bear market rallies are notably abrupt and short-lived, and last Tuesday's 400-point rally proved no exception. However, the core of its momentum rested upon a vital market determinant: improved sentiment for financials' solvency issues, as indicated by the oversubscription of the Lehman offering. Furthermore, the day's rally contained the key elements of equity strength beyond the surge in financial shares: a heightened appetite among investors for risk with attendant price declines in US Treasuries, an 11% drop in the Vix, US dollar strength, and a fall-off in commodity prices.

By week's end, however, stock markets had digested increasingly worrisome economic news. Fed Chairman Bernanke, while still proffering an accommodative monetary policy, for the first time suggested the possibility of negative US growth, also citing financial markets still under stress. And on Friday the nonfarm payrolls numbers topped the 400K level for the first time since Katrina, at its worst level in five years with troublesome indications of broad-based job cuts throughout the economy. Nevertheless, the markets still managed a healthy rally on the week. Both the Nasdaq and S&P 500 posted weekly gains of over 4%, narrowing year-to-date losses to 10.6% on the Nasdaq and 6.7% on the S&P. The DJIA dropped 0.1% Friday on a 4.7% drop in General Motors shares specific to news that an investor group wanted to back out of its $2.55 billion equity investment in major supplier Delphi Corp. And yet the index still managed a 3.2% gain on the week, off 4.9% so far this year.

So, is the market poised for further recovery or a shimmer of fool's gold? This week's market tale is expected to rest upon the micro unwinding of corporate earnings' tales, well bracketed by two key companies reflecting polar earnings trends. Alcoa kicks off the earnings season today with analysts expecting a 36% earnings drop on poor auto industry and construction demand, higher energy costs and a weak US dollar. At week's end the earnings story rests upon results from General Electric, with analysts looking for 16% profit gains on offsetting improvements in global demand. But it must be noted that analysts have been notoriously and hugely mistaken in their estimates during the latest turndown, which showed fourth quarter profit declines of 25.1%, the worst showing since 1991. At the start of the year expectations called for a 4.7% gain in S&P first quarter results; currently estimates are for a 10.9% decline, fueled by a 58% profit drop among financials. Excluding banks, analysts are looking for 8.4% profit increases despite the adverse negative macro trends. For the year, analysts have been even more reluctant to cut projections, estimating a 15% gain in full year profits, believing last year's final quarter easy to beat and a turnaround in financials likely. Energy companies' gains should stand out, up 33%, with gains of 9% expected in consumer staples (which include such firms as Wal-Mart, Coca-Cola and Procter and Gamble); however, drops of 10% are projected at consumer discretionary companies (such as retailers and homebuilders). Profit warnings this week may provide more perspective on the analysts' accuracy and optimism.

In any case, market action for the week will find few top-tier market-moving economic reports. Remarks following next Thursday's ECB interest rate policy meeting, which is generally expected to result in no rate change, will nonetheless be of significance to any resumption of US dollar strength. Should ECB President Trichet emphasize growth, shifting from the need to control prices there, a dollar rally could ensue. Monday February consumer credit numbers are due with Fed speakers San Francisco President Yellen and Fed Vice Chairman Kohn taking the podium. On Tuesday, February pending homes sales and FOMC minutes are due for release. Wednesday includes posting of February wholesale inventories and weekly crude stockpiles with Fed Chairman Bernanke and Dallas Fed President Fisher speaking. Thursday looks to February trade balance, March same-store-sales, March's Treasury budget and weekly initial jobless claims with Fed Chairman Bernanke again speaking. Friday marks the release of March import and export prices and the University of Michigan's preliminary April consumer sentiment report with a speech from Dallas Fed President Fisher.

In the corporate corner, deal activity over the weekend provided upward impetus to today's futures, including reports that Nestle plans to sell its 77% stake in Alcon to Novartis for as much as $39 billion. Microsoft warned Yahoo in an open letter it has three weeks to accept its bid, threatening a proxy battle; Yahoo reportedly believes the offer undervalues the company. Private equity firm TPG plans a $5 billion cash injection in Washington Mutual, the largest US S&L. And talks between Delta Air Lines and Northwest have reportedly been revived. Metals and mining issues advanced overseas on a Goldman Sachs upgrade. UBS received a Merrill upgrade based on share valuation levels.

[BigSully1]

Tuesday, April 8th, 2008


Jim Rogers: More Pain for the Greenback, and the Failure of the Federal Reserve
By Keith Fitz-Gerald
Investment Director
Money Morning/The Money Map Report

SINGAPORE - By bailing out Wall Street and applying "band-aids" to the economy, the U.S. Federal Reserve may well be causing its own downfall - even as it hastens the demise of the greenback as a viable global currency, investment guru Jim Rogers told Money Morning during an exclusive interview.

Because of such strategic missteps, U.S. consumers could be facing a long and painful economic malaise, similar to the "lost decade" of 1990s Japan, or the stagflation-riddled 1970s in the United States, Rogers said.

Make no mistake: If that happens, there are two clear culprits - current Fed Chairman Ben S. Bernanke, and his predecessor, Alan Greenspan.

Bernanke "and Greenspan together will probably bring [about] the end of the Federal Reserve," Rogers said during the interview in Singapore. "We've had two central banks in America that failed [and] this third central bank will probably fail, too, because of Bernanke and Greenspan. The Federal Reserve [just] put $200 billion more onto its balance sheet of mortgages. Now I don't know how big they can expand their balance sheet, but if they keep doing it, there's only so much - and they just bought Bear Stearns (BSC)."
 
Rogers first made a name for himself with The Quantum Fund, a hedge fund that's often described as the first real global investment fund, which he and partner George Soros founded in 1970. Over the next decade, Quantum gained 4,200%, while the Standard & Poor's 500 Index climbed about 50%.

It was after Rogers "retired" in 1980 that the investing masses got to see him in action. Rogers traveled the world (several times), and penned such bestsellers as "Investment Biker" and the just-released "Bull in China." And he made some historic market calls: Rogers predicted China's meteoric growth a good decade before it became apparent and he subsequently foretold of the powerful updraft in global commodities prices that's fueled a year-long bull market in the agriculture, energy and mining sectors.

Given Rogers' prescience - not to mention all the uncertainty facing U.S. investors right now - we thought it was well worth a sit-down with the noted guru, even though it meant traveling all the way to Singapore, where he now lives with his family, to do so.

During that interview here in Singapore, Rogers also said that:

Although the United States faces perhaps its most daunting economic challenges in at least a generation, "in America, most people do not understand that there is a problem."
Because of these weak-dollar efforts - as well as the billion-dollar bailouts - "America is now the largest debtor the world has ever seen."
Although the central bank seems intent on engineering a U.S. economic rebound by creating an ultra-weak dollar, no country in history has ever emerged from a serious financial crisis by "debasing its currency."
The bottom line: The strategies that the central bank is currently employing are nothing short of "outrageous," Rogers said.

"You know, I've read the Federal Reserve Act," he said. "Nowhere does it say [the central bank is] supposed to bail out investment banks! Nowhere does it say you should bail out Wall Street. Their mandate was to have a sound currency, and then it was later expanded to have employment - to help employment. But nowhere does it say: 'Bail out investment banks.'"

Let's take a look at some of the highlights of the Money Morning interview with investor and author Jim Rogers.

Keith Fitz-Gerald (Q): There's a confluence of money flowing into and around China.  Do you believe that the U.S., with all its current problems, will get left out?

Jim Rogers: Absolutely.

The U.S. dollar is a terribly flawed currency.  I'm trying to get all of my money out of U.S. dollars.  I don't know why anybody would put money into the U.S. dollar, and by extension into the U.S., as we stand here today. The U.S. is probably the largest debtor nation the world has ever seen!

The United States' foreign debts are increasing at the rate of $1 trillion U.S. dollars every 15 months.  U.S. foreign debt is over $13 trillion, and rising rapidly. It's the official policy of the central bank to debase the currency. They're trying to drive down the value of the dollar. 

Q: The government has succeeded wildly, so far.

Rogers: You haven't seen anything yet! 

They're trying to drive down the dollar. I'm trying to be patriotic. I'm trying to sell dollars. That's what they want. I'm trying to help them drive down the value of the currency. 

All Americans should. There are certainly probably good reasons to put some money in dollars. For instance, if you have to buy cotton, you have to have dollars.

But for the most part - I, anyway - am joining other people who're trying to avoid the U.S. dollar, because Washington has sent a very clear signal: "We want the dollar to decline. We're gonna do our best to make it decline."

Well, everybody has to make their own decision. I'm trying to do what the Federal Reserve wants me to do, and I'm selling dollars. 

Q: My take is that former Fed Chair Alan Greenspan and current Fed Chairman Ben S. Bernanke may go down as the worst central bank chairmen in history. Do you see it differently?

Rogers: [Bernanke] and Greenspan together will probably bring [about] the end of the Federal Reserve. We've had two central banks in America that failed. This third central bank will probably fail, too, because of Bernanke and Greenspan. 

The Federal Reserve last week put $200 billion more onto its balance sheet of mortgages.  Now I don't know how big they can expand their balance sheet, but if they keep doing it, there's only so much - [and] they just bought Bear Stearns. 

There's just so much they can do. Maybe that balance sheet is infinite. I doubt it. And it can be said to be infinite; they just print money like Zimbabwe or someplace. But that has to come to an end, eventually. 

Maybe Bernanke is going to get into his helicopter and fly around collecting rents now.  Maybe when they repossess all the property, he's going to be the rent collector. But then when they eventually take on all the car loans, I guess he's going to be collecting car payments, too. And credit card debt, when they take over all the credit card payments, I guess he'll be hauling us all out saying: "Your credit card's overdue." 

This is insanity.

Q: Is there a circumstance under which you could see the U.S. recovering, or do you think this country is doomed to be an economic also-ran?

Rogers: Historically, nations that have gotten themselves into this kind of situation have only gotten out following a crisis or a semi-crisis, or some gigantic stroke of luck.

The U.K. got out because they discovered the North Sea. Now you give me the largest oil field in the world, or one of the largest oil fields in the world, I'll show you a good time, too. 

So if you have a stroke of luck [you can escape these kinds of problems], but otherwise, nobody's ever sorted out these problems without some kind of gigantic crisis or semi-crisis first. 

In America, most people do not understand there is a problem! The few who know there's something going on don't understand what it is. Most of them who understand it actually think it's good that the currency's declining. America's not going to do anything until things get very, very bad. 

Others that offer the rejoinder to this - that the declining dollar makes America competitive - [that] has worked in the short term. But no country has ever restored itself by debasing its currency, not in the long term, not even the medium term.

Many places have tried to debase their currency as a solution. It's never worked, other than maybe in the short-term, for a while.

Q: Are we looking at a Japanese-style lost economic decade?

Rogers: The Federal Reserve is making the same mistakes that the Japanese made.  They're trying to say: "We won't let anybody fail. We'll print a lot of money. We'll drive interest rates to zero. And we don't want anybody to fail. We'll put on as many Band-Aids as we have to." 

Well, putting Band-Aids on a cancer patient is not a good solution. 

So whether it's like the '90s in Japan, or the '70s in America, remains to be seen.

[One-time U.S. Federal Reserve Chairman] Arthur Burns, who headed the central bank in the '70s, did exactly what Bernanke's doing. He raced in and printed money and said: "Oh, everything's gonna be OK." 

But the economy never recovered, inflation went through the roof, and the dollar was under duress. Eventually they had to bring in Paul Volcker and interest rates went over 20%. And eventually they killed inflation and they solved the problem. 

They're making exactly the same mistakes that Burns made. For whatever reason, though, this problem is going to last longer than previous difficulties in America. And it's probably going to be worse. 

Because, now, America is a debtor nation. Now we're the largest debtor nation in the world. At least in the '70s, we were still a creditor nation. Japan could survive because they were the largest creditor in the world at the time. So they didn't fall off the face of the earth. 

America's now the largest debtor the world has ever seen. What's happening in the U.S. is not going to be fun.

Q: Should the Fed be stepping in like it has in recent months?

Rogers: It's outrageous that Bernanke's sitting there. You know, I've read the Federal Reserve Act. Nowhere does it say [the central bank is] supposed to bail out investment banks! Nowhere does it say you should bail out Wall Street. Their mandate was to have a sound currency, and then it was later expanded to have employment - to help employment. But nowhere does it say: 'Bail out investment banks.'

Investment banks have been failing for centuries.  The world hasn't come to an end... even when investment banks have failed. They just caused a setback, and so what!

Recessions are usually good for the system. They clean out the excesses. And my God there've been excesses on Wall Street in the past 10 years. You don't see a bunch of 29-year-old cotton farmers driving around in Maseratis and flying in private planes to exotic locations. Well, you see a lot of guys on Wall Street doing that. 

And the idea that we're now supposed to bail them out is ludicrous! I don't see any of those guys sending their bonus checks back.

Huge amounts were made in the debt markets. We now know [that money was made] at least incorrectly, if not fraudulently, and yet, now we're supposed to bail them out. It's bad enough they get to keep their money. But the outrageous part is that it will cost more to try to prevent a recession than to have the recession. 

We have safety nets in place, now. We did in the '70s in America and the Japanese did in the '90s. I think there's good evidence that it will cost more to try to prevent the problems than to have the problems. 

Q: That's a very interesting thought that had not occurred to me before. 

Rogers: Well, we'll see if it's right.  In nature, there's the natural phenomenon of forest fires. The forest fires are pretty terrible when they're going on. But nature invented them to clean out the forest so that the forest could then come and grow from a new, sound foundation. That's what recessions do, too. They're a natural phenomenon. 

Nobody likes it when we have them any more than anybody likes a forest fire. But in the end, everybody's better off. Bernanke thinks he can stop this; he's going to very well destroy the system by trying to save it.

Q: Could you see a segment of the financial system surviving this? Or do you think that there will be such catastrophic change that we won't recognize it till several years from now?

Rogers: Ask me again in five years, 10 years. That was true after the '30s, certainly.  It was true even after the '60s. Very few people went to Wall Street in the '70s, very few.  A whole generation ignored Wall Street in the '30s and in the '70s. 

Will that happen again?  Probably, because of things we've been discussing. 

So there will be big changes, of course.  If you're in the field that deals with - and works out - bankruptcies, you've got a great future - on Wall Street, or in the legal profession.  If you're in commodities, you have a great future. Some sectors of the financial community are going to do well. Many others are going to disappear and/or do badly.

Q: How low could the dollar go?

Rogers: I have no idea. You just have to watch it as it evolves. Politicians and bureaucrats can do unbelievably stupid things, and have [done so] throughout history. 

They will usually do things that are so stupid nobody can believe them, but it happens.  You have to watch and see as it goes.

[BigSully1]

Asian Inflation Begins to Sting U.S. Shoppers

BAT TRANG, Vietnam — The free ride for American consumers is ending. For two generations, Americans have imported goods produced ever more cheaply from a succession of low-wage countries — first Japan and Korea, then China, and now increasingly places like Vietnam and India.

Justin Mott for The New York Times
A worker at a brick factory in Bat Trang carries bricks to a kiln for the final hardening process. More Photos »
But mounting inflation in the developing world, especially Asia, is threatening that arrangement, and not just in China, where rising energy and labor costs have already made exports to the United States more expensive, but in the lower-cost alternatives to China, too.

"Inflation is the major threat to Asian countries," said Jong-Wha Lee, the head of the Asian Development Bank's office of regional economic integration.

It is also a threat to Western consumers because Asian exporters, even in very poor countries, are passing their rising costs on to customers.

Developing countries have had bouts of inflation before. Indeed, some are famous for them, like Brazil, which experienced triple-digit inflation in the late 1980s and early 1990s. But two things make this time different, and together promise to send prices higher at Wal-Mart and supermarkets alike in the United States, just as the possibility of recession looms.

First, developing countries now produce nearly half of all American imports. Second, inflation in these countries is coming at the same time that many of their currencies are rising against the dollar.

That puts American consumers in a double bind, paying at least some of producers' higher costs for making their goods, and higher prices on top of that because the dollar buys less in those countries.

Asian businessmen say they do not have a choice about charging more. "This is a tough time to do business," said Le Hoai Vu, the sales manager for the Quang Vinh Ceramic Company here in northern Vietnam.

The company just increased by up to 10 percent the prices it charges Pier 1 Imports in the United States for hand-painted vases because labor costs are rising 30 percent a year.

Over all, in Vietnam, one of the fastest-growing destinations for manufacturing investments and one of the fastest-growing sources of American imports, prices rose 19.4 percent from March 2007 to March 2008.

In China, Foshan Shunde Augustus Bathroom Equipment Ltd. in Foshan City is about to raise prices by 10 percent for a range of bathroom fixtures exported to North America.

"Rising inflation is a way of life in China these days, you see it everywhere," said Faye Kong, the company's international business supervisor.

The cost of American imports from less industrialized countries as a group is rising. A Bureau of Labor Statistics index of average prices for imports of manufactured goods from such countries fell gradually through early 2004, but is now rising briskly and was up 5.6 percent in February from the same month last year.

That contributes to rising inflation in the United States; in the 12 months through February 2008, the prices of goods for sale in the United States increased by 4 percent, according to the government's Consumer Price Index.

But so far, Asian exporters have passed along only a portion of their costs. In China, for instance, prices are now rising almost 9 percent a year, triple the pace of a year ago.

Workers in the developing world facing higher prices have been increasingly vocal in demanding higher wages, with protests erupting in recent days in Vietnam, Cambodia and Egypt.

At the same time, inflation keeps rising: the Philippines announced that its inflation at the consumer level had doubled in the last five months, showing a 6.4 percent increase in March over the same month a year ago. And weekly inflation at the wholesale level has accelerated in India, reaching an annual rate of 7 percent in the week ended March 22, up from 3.1 percent as recently as last October.

Not long ago, it would have been unlikely for a poor country with high inflation to see its money strengthen in value against the mighty dollar. But the dollar is not quite as mighty as it once was. Large American trade deficits and other problems have weakened its appeal.

And there are signs that the dollar could fall further if developing countries' central banks stopped supporting it, particularly in Asia.

Vietnam's central bank even had to order the country's commercial banks late last month to resume buying dollars within the tight range of exchange rates set by the government. Many banks had started betting on dollar depreciation and refusing to accept large sums in dollars, to the point that multinationals and exporters had trouble wiring money into the country to pay their employees' salaries.

Additionally, the dollar's weakness is itself a cause of inflation in developing countries, particularly those that have barely let their currencies rise against the dollar in an effort to hold on to export markets.

In a street market around the corner from the 270-year-old Lungshan Temple in Taipei, Taiwan, Teresa Gau, a fishmonger, is charging up to a third more for fish and crabs than she did a year ago. That is because fishing boat owners are charging her more as they struggle to cover higher costs for diesel fuel, which is priced in dollars.

"They have to raise the price to compensate," Ms. Gau said.

Inflation in Taiwan has started to creep up partly because the government waited until this year to allow the currency, the New Taiwan dollar, to appreciate. Taiwan imports all its oil, and only now is the slightly strengthening New Taiwan dollar starting to hold down the cost for consumers in filling up their gas tanks.

Here in Bat Trang, an ancient ceramics center near Hanoi, Quang Vinh Ceramic's fastest-rising expense is for vivid blue ink for painting vases and other pottery. Imported from Belgium, the ink is priced in euros and has soared 80 percent over the last year in Vietnamese dong.

Keeping the dong inexpensive in dollar terms helped Vietnam increase its exports by 24.1 percent last year, but also lured a flood of investment. Bank loans rose more than 50 percent last year, feeding a real estate frenzy that has not yet abated.

Brick kiln owners like Le Thi Hop here in Bat Trang have responded by tripling prices in the last year.

"Most of the people who buy my bricks say the price is crazy, but I say, 'This is the market,' " Ms. Hop said cheerily.

High costs for construction materials are making it more expensive for the many multinationals like Samsung of South Korea and Hanes and Emerson Electric of the United States that are now building factories in Vietnam, partly in response to rising costs in China.

In addition to the weak dollar, economists say that countries like Vietnam, Egypt, China and Brazil are inherently more vulnerable to inflation when, as now, rising prices are led by increasingly expensive commodities.

Soaring food and energy costs have a far greater effect on developing countries like Vietnam, because of their large agricultural and energy-hungry manufacturing sectors, than on industrialized countries, which tend to have larger service sectors than manufacturing sectors.

Quang Vinh, which was founded by a 15th-generation pottery maker, has raised wages by 30 percent over the past year to keep up with food prices, which have also risen. Food is the biggest expense for the company's workers, who earn $75 a month working eight hours a day, six days a week.

"Before, I used to go out with friends regularly," said Nguyen Xuan Tu, a 29-year-old Quang Vinh worker who rides a motor scooter, like many Vietnamese. "But now, with the high cost of gasoline, I don't go out too much."

Two opposing trends have made it hard to gauge the true extent of inflation in the developing world.

Very heavy investment in new factories, especially in China but increasingly in emerging countries like India and Vietnam as well, has created a lot of extra industrial capacity. That could drag down prices somewhat if the American economic slowdown causes a global slump in demand.

But many developing countries, led by China and India, have blunted the full impact of inflation so far through a combination of price controls and subsidies, and more countries are joining them — Vietnam has imposed price controls on transportation and gasoline over the past week, for instance.

As businesses figure out ways around price controls, like charging the same while shrinking the quantities in each package, and as the cost of subsidies may become unsustainably high, inflation may worsen.

[BigSully1]

Stopped out of my USO short at very small loss. I hate to think how high gas prices will be when they catch up to the "black gold"

Oil Prices Above $112 As Supplies Fall
Wednesday April 9, 1:05 pm ET
By John Wilen, AP Business Writer 
Oil Prices at New Record Over $112 After Government Says Fuel, Oil Supplies Fell Last Week


NEW YORK (AP) -- The price of oil has surged to a new record, with a barrel a crude trading above $112 a barrel on the New York Mercantile Exchange.
A government report that oil and fuel supplies were lower than expected last week gave crude a push past its latest milestone. But months of buying by speculators and by investors seeking refuge from a falling dollar have also lifted oil to its new heights.

Light, sweet crude for May delivery has traded as high as $112.16, surpassing the previous trading record of $111.80 set ast month.

[tokyopua]

As realize now that as long as the market isnt dropping triple digits daily I can start making money again.

I am back to AGGRESSIVE trading, scanning the market hardcore for picks with momentum and volume.  Made over $3K on SKNN and CNOA today, despite the ugly market day.   Put in a bid at 1.82 for ORGN that didnt get filled, that stock shot to $2.74 I think it was, just about 20 minutes or so after I missed the bid lol, but the key for me is I still had the discipline not to chase and know how to find these rockets now. 

I owe it to this site that I have this ability now, and my strongest training to get that ability came last year right here on 3SOF.

I would love to see a thread or chat where 3SOF members pool our trading skills like happened last year and we can all find picks like these.  I found SKNN myself, and CNOA was suggested to me.  But you know that commercial that says "Its like having 1000 pairs of eyes on the market"?  Thats what it felt like last year, and we were finding rockets left and right.

Imagine what we could do if we recreate that here at 3SOF. 

It was freaking phenomenal back then, and it could be again.  It was a special sauce.

Whatever happens here, Im going back to my bread and butter for awhile.

God it feels good to finally see green again, big green during the last 2 weeks I went back to trading. 

If anyone agrees with me, throw me a quick applaud yo, because I hope we can find a way to recreate the magic!  Perhaps this small post will be the spark that lights a fire, I sincerely hope so...

[Dory99]

Agree with you completely. I made over $3K on CNOA over the past 2 days. If you don't mind me asking, what metrics did you use to find SKNN?

[la-onda]

I would love to see a thread or chat where 3SOF members pool our trading skills like happened last year and we can all find picks like these.  I found SKNN myself, and CNOA was suggested to me.  But you know that commercial that says "Its like having 1000 pairs of eyes on the market"?  Thats what it felt like last year, and we were finding rockets left and right.

Imagine what we could do if we recreate that here at 3SOF. 

It was freaking phenomenal back then, and it could be again.  It was a special sauce.

Whatever happens here, Im going back to my bread and butter for awhile.

God it feels good to finally see green again, big green during the last 2 weeks I went back to trading. 

If anyone agrees with me, throw me a quick applaud yo, because I hope we can find a way to recreate the magic!  Perhaps this small post will be the spark that lights a fire, I sincerely hope so...

David, Ramsburg & Aussietrader, please think about tokyopuas proposal! I back up this one !!

cheers from Singapore
Oliver

[tokyopua]

Agree with you completely. I made over $3K on CNOA over the past 2 days. If you don't mind me asking, what metrics did you use to find SKNN?

I had SKNN on watch from years ago, so the chart was looking good and I was thinking of getting in, then I saw it pop.  However, it would have come up on a scan had I been doing scans that day.

I used a modified David Randolph scan to find ORGN this morning.  I was a few cents away from a bid that would have probalby made me an additional $1000 in 20 minutes, it went into panic buying, really amazing lol.

[berloga]

I agree with Toky. I think that quick trades can help reduce the overall stress of the long-term waiting. David is already doinng the short-term trading on his Technimental portfolio. Although, for someone like myself, I cannot do daytrades, so I'd prefer "buy today", "sell tomorrow or later on momentum". Perhaps David could have the 3rd portfolio with 2-3 "rocket" stocks that are still bought near the market open and sold at a specific target/condition.

[Houlahan]

Applaud tokyopua!
I will be worthless with helping to find stocks.....b/c I'm in "preschool".
But willing to learn. 

[capricho]

Stopped out of my USO short at very small loss. I hate to think how high gas prices will be when they catch up to the "black gold"

Oil Prices Above $112 As Supplies Fall
Wednesday April 9, 1:05 pm ET
By John Wilen, AP Business Writer 
Oil Prices at New Record Over $112 After Government Says Fuel, Oil Supplies Fell Last Week


NEW YORK (AP) -- The price of oil has surged to a new record, with a barrel a crude trading above $112 a barrel on the New York Mercantile Exchange.
A government report that oil and fuel supplies were lower than expected last week gave crude a push past its latest milestone. But months of buying by speculators and by investors seeking refuge from a falling dollar have also lifted oil to its new heights.

Light, sweet crude for May delivery has traded as high as $112.16, surpassing the previous trading record of $111.80 set ast month.

Well, I have been holding onto USO for a few weeks now and so far it's delivered very fine results. Oil will continue to be a demand commodity and despite market manipulation I feel confident that it will be on a bullish course for some time to come. I'm a long on this one.