SUN SEA COCKTAILS MUSIC AND MY BOAT

Off on my holidays .

I wont be blogging for a month .

ALUMINUM AND OIL SIGNS OF THE FUTURE

Well Alcoa brought us the awaited numbers and beat the St. in sales and profits . Sales fell 41% to $4.24 billion from $7.62 billion last year, beating analyst expectations of $3.93 billion. The aluminum giant said it lost 26 cents a share last quarter, better than the 38 cents expected, despite the 41% drop in sales from 2008. This is their third consecutive quarterly loss reported .

The company said the average price of aluminum on the London Metal Exchange in the second quarter was $1,485 per tonne, a 9% increase from the first quarter of 2009, but a 49 % decrease from the second quarter of 2008. No doubt they have been hit hard with the downturn their big markets of building and construction, aerospace, and the motor industry. They showed the better than expected results partly due to Job cuts, by cutting their divi and cutting spending also by raising $1.3b.

The big killer for the company is that cut in the price of aluminum.

The Juruti bauxite mine in Brazil and the Alumar alumina refining upgrade and expansion are both in the process of being commissioned. The first shipment of bauxite from Juruti is expected within the next 90 days.

Chuck Bradford an analyst at Affiliated Research Group said "Results were better than expected due to improved costs, In the last several days it became pretty clear that Alcoa was going to do much better on the cost side than we had thought."
He cautioned, however, that the report, which is generally viewed as a bellwether for the broader economy, should not be taken as a sign of a strong earnings season.
"Alcoa's numbers really have no relation to anybody else or the economy," Bradford said. "It's strictly a matter of worldwide metal supply and demand and the savings Alcoa achieved in cost were purely company related."

The shares traded up in AH trading and are currently at 10.12 as I type having hit 10.35. A lot will depend on their guidance in the conference call which will be tonight 8th July.

HANDY LINKS:

http://www.kitcometals.com/

http://www.kitcometals.com/charts/aluminum_historical.html

I wouldn't be overly enthusiastic with these results but the company is trying hard to keep on top of things in these hard times.

In other news we saw that Consumers trimmed borrowing in May for the fourth straight month as the recession took another bite out of investments and drove unemployment higher. According to a report in the AP The Federal Reserve said Wednesday that consumer credit fell at an annual rate of 1.5 percent, or by $3.2 billion, from April. Economists expected a deeper cut of $9.5 billion.

But the new figures still mark the latest move by consumers to curb borrowing, pay down debt and strengthen household budgets. Americans have been spending less and saving more to cope with the recession, which started in December 2007 and is the longest since World War II.
The savings rate jumped to 6.9 percent in May, the highest since December 1993. The amount of money saved — $768.8 billion — was the most on records that started in January 1959, the government recently reported.

Also in the news was the UK is heading for an "energy crunch" after new oil and gas exploration in the North Sea dropped 57pc in the first half of this year. A report by Oil & Gas UK, the industry group, showed that companies are cutting back on new projects as costs rise and funding is scarce during the recession.
Investment in the industry fell to £4.8bn last year, down £1.2bn over the last two years, and it could drop below £3bn next year. The report estimates that £5bn a year is needed to maintain exploration.

In a report from Bloomberg

Venezuela oil and natural-gas drilling slowed to a five-year low in June after the country’s state oil company deferred payments to service providers, spurring rig shutdowns in the South American country that was the fourth-biggest source of U.S. crude-oil imports last year.
Oil rig use fell to 58 from 63 in the previous month, while natural-gas drillers kept using three rigs, according to figures released today by Baker Hughes Inc., the world’s third-largest oilfield-services company, which tracks drilling worldwide. The combined total is the lowest since October 2004.
Drillers are shutting down after Venezuela’s state oil company, Petroleos de Venezuela SA, failed to pay its bills for as long as a year. The prospect that a U.S. recession will further erode oil demand has prompted companies worldwide to reduce drilling investments, said Fadel Gheit, an analyst at Oppenheimer & Co.
“Everything in the oil business has been skidding for the last seven to eight months,” he said today in a telephone interview from New York. “Not only is demand not going to grow, but demand will decline in the next five years.”
Oil won’t return to its record level of $147.27 a barrel reached in July 2008, he said.


In a separate report Crude oil fell for a sixth day, the longest losing streak since December, and gasoline tumbled to a two-month low after a report showed a bigger-than-expected gain in U.S. fuel supplies as the recession curbed demand.
Gasoline stockpiles climbed 1.9 million barrels to 213.1 million in the week ended July 3, more than twice the increase forecast in a Bloomberg News survey, the Energy Department said. Inventories of distillate fuel, a category that includes heating oil and diesel, rose to the highest since 1985 as consumption dropped to a 10-year low.
“The market is starting to focus on the weak fundamentals,” said Antoine Halff, head of energy research at Newedge USA LLC in New York. “The deterioration of the fundamentals should continue in the weeks ahead. The drop in prices has yet to run its course.”
Crude oil for August delivery fell $2.79, or 4.4 percent, to $60.14 a barrel at 2:42 p.m. on the New York Mercantile Exchange, the lowest settlement since May 19. Prices have dropped 16 percent in the past six days.
Gasoline for August delivery declined 9.95 cents, or 5.7 percent, to $1.6333 a gallon in New York, the lowest settlement since May 6. It was the biggest one-day drop since March 30.

Distillate Supplies
Distillate fuel inventories rose 3.74 million barrels to 158.7 million, the biggest gain since January, the report showed. The increase left supplies last week 30 percent higher than the five-year average for the period.
Gasoline inventories were forecast to increase 900,000 barrels last week, according to the median of 16 responses in a Bloomberg News survey. Supplies of distillate fuel were estimated to rise 1.83 million barrels.
Total U.S. daily fuel demand averaged 18.4 million barrels in the past four weeks, down 5.9 percent from a year earlier, the report showed. Distillate consumption fell 12 percent to 3.27 million over the period, the lowest since July 1999.
“The distillate demand numbers just look awful,” said Tim Evans, an energy analyst with Citi Futures Perspective in New York. “There’s a double-digit year-on-year decline in demand because of the economy. If GM isn’t making cars, they aren’t shipping them, either.”
Crude Oil Inventories
Crude oil inventories fell 2.9 million barrels to 347.3 million last week, the lowest since January, the report showed. Supplies last week were 7.4 percent higher than the five-year average, according to the department.
“This report is incredibly bearish,” Evans said. “The drop in crude-oil stocks isn’t that important because total petroleum stocks keep rising.”

To read the full report go to http://www.bloomberg.com/apps/news?pid=newsarchive&sid=a3K2HPWe2JIo

OPEC Expects Demand for Its Crude in 2013 to Be Below Last Year .

The vix for oil is showing a high level of uncertainty among investors as efforts intensify for stronger regulation of energy trading. This measure is a relatively recent addition to the CBOE. Oil VIX Ticker - OVX tracks the United States Oil Fund ETF (NYSEArca:USO - News).


All very bearish there.

Well today I traded the big shorts FAZ & TZA it was a shorts dream day and I switched for the inevitable end of day pop to FAS. It's nice of Uncle Sam to throw us a few $'s each day like this.

A FEW THINGS TO WATCH AND THINK ABOUT

Today we saw weakness in the market. There were a number of reasons for this. First one that I saw was the Nasdaq which closed down 2.31% at 1746.17. This was helped by MSFT which was down 2.9% Dell off 3.1% Goog off 3.2% at $396.63 yep under the $400 . There were many Tech stocks down emc, cien, intc, in fact hard to find a winner there. This was mostly down to worries about spending may fall by as much as 6/7% this year in what are essentially growth companies . Yes spending down in one of the big O's targeted areas to help the economy . Of course there is the talk of how much these stocks had run and were due a bit of a pullback . By now you will be aware about my thinking of the run, it was at least in part manufactured . There really is no interest in the market at the moment from investors. This can be clearly seen by the Vol. of late. No one is willing to take any kind of long term view at these levels and most think we will see lower levels again sooner or later.

Another reason for the fall today was the uncertainty about earnings from the big industrials with Alcoa AA giving their numbers after the bell tomorrow Wed. The number is expected to come in low. Their ceo announced today that the future is looking better with China looking like it's leading the way out of this slump. I worry when you hear things are not so bad before you get earnings from a company. A kind of soften the blow so to say.

There was a bit of a worry for some traders of UNG which was trading up till it was halted during the day. It finally got trading again but closed down around 3% at $12.18 It's not one I follow, but the news was about them looking for regulatory approval to issue 1 bln new units. What I hear you say more shares they must have more shareholders than shares lol. Well joking aside here is a couple of links to the story.

http://www.reuters.com/article/marketsNews/idUSN0733779520090707

http://www.bloomberg.com/apps/news?pid=newsarchive&sid=aAcyPvtgZKpU

Oil had a nasty slip today too with Crude oil falling to a six-week low. No one is buying at the moment as demand has fallen with inventories showing a rise last week. Here is a link for the weekly numbers . http://www.eia.doe.gov/oil_gas/petroleum/data_publications/weekly_petroleum_status_report/wpsr.html

Again I see reports of people saying it's needs to pullback a bit. “The price fall looks like a needed correction to the market,” Simon Wardell, energy research manager at Global Insight Inc. in London, said today on Bloomberg radio. “The oil market doesn’t reflect spot conditions, it reflects the expectation of conditions, and those change very quickly.”

The $ is in the news quite a bit and is been traded at 1.39 with the € as I type.

Credit card loan delinquencies also increased, rising to 4.75% from 4.52% in the last quarter of 2008.

The US unemployment rate is now at a 25-year high of 9.4%.

Debt Burden Quickens Power Shift as G-8 Loses Clout

http://www.bloomberg.com/apps/news?pid=20601109&sid=aEVdnjdCm1W0

Yep overall I'm quite confident in this market. Of course you have to be on the right side of the fence .

NEWS FLASH

Had to do that lol.






http://stockcharts.com/h-sc/ui?s=$INDU&p=D&st=2009-04-01&id=p96780006543&a=160203265


and the s&p chart link


http://stockcharts.com/h-sc/ui?s=$SPX&p=D&st=2009-03-01&id=p77279003958&a=172472989

These charts are courtesy of http://stocktiger.com/

I highly recommend stocktiger for market news and views.

Stocktiger is not in any way connected with my blog. The views expressed on this blog are mine.

Looks like the markets have indeed their head and shoulders .

THE GOLDEN CODE

Sergey Aleynikov

Well we see that Goldman Sachs code has been stolen . Goldman say if it were to fall into the wrong hands it could be used to manipulate the market in an unfair way. Well well well whats new there? All it means is someone else will be able to do for themselves, what Goldman are doing at present. I wonder if that was the cause of the glitch on Friday when we saw the extended trading . The Russian Sergey Aleynikov whom uploaded the codes to a German web site say's it was a mistake as he thought he was uploading “open source” files on which he had worked, and only later realised he had accessed more data than he intended . It appears Sergey was offered a job in Chicago with a wage pack of around $1,200,000 a year.

Now did he make a mistake or not. I think to be fair to Mr. Aleynikov I'd let the judge do his work on that one. But I will point out that this man is not slow when it comes to IT. He has some inventions which he worked on to his credit . These appear to be mainly in Telecommunications .

http://www.patentbuddy.com/patentdetails/2740386;jsessionid=26CAF2FC30E031638E48CD86CA05A9D2

http://www.patentbuddy.com/patentdetails/3204170;jsessionid=26CAF2FC30E031638E48CD86CA05A9D2

I believe he did delete most of his tracks but failed to delete or was unaware that there was a backup kept of all work done on Goldmans computers. Still he may not have had any criminal intent as he may have thought he was more or less taking some of the tools from his toolbox to start his new job with.

Anyway here is the actual charge

http://static.reuters.com/resources/media/editorial/20090706/Complaint%20--%20Aleynikov.pdf

as you can see Goldman dont divulged much about the trading programs but we do know that they are to do to with high vol. trades and can be executed with very high speeds . Just the tool a good crook would need!!!!!

I see he made bail ($750,000) so he must appear to be no immediate threat himself. But if the info was on a web site who knows who has it now. You do have to remember that there is a hell of a lot of stuff out there that no one sees. But he was arrested in Newark Liberty International Airport.

Here's something you wouldn't have seen on the net only for this news

http://www.youtube.com/watch?v=hJQ9PyA3TMo&eurl=http%3A%2F%2Fvideos%2Enymag%2Ecom%2Fembed%2Fplayer%2Fcontainer%2F560%2F367%2F%3Fwidget%5Ftemplate%5Fcid%3Dcustom%26content%3D7879JJ0QJQMDP6Q2%26widget%5Ftype%5Fcid%3Dsvp&feature=player_embedded

Yep old Sergy himself doing his thing lol.

Sorry to my readers

I used a story from a source in a late post after the Iran / North Korea story which was very interesting . As it was not mine I got a message that something was wrong with it. Most likely copyright infringement . I took it down . I hope blogger see that it's been removed and my site is put back to normal mode.. I see the message that comes up points to spam not sure if this is just a computer error or not. I hope the problem is resolved soon.


Mike

GEOPOLITICAL QUANDRY Will something fall out of this

Well we have two fronts in the Nuclear power saga up and running at the moment . The First and potentially most dangerous is in my view the treat of Israel on Iran . First off the US will do little to stop such an attack. Second I see in a report that the Saudis are not stopping Israeli planes from flying through their air space if such an attack were to be launched . Also Israel has in the past proven that they are well capable of such an attack as they bombed an alleged Syrian nuclear facility in 2007.




The election fallout at the moment must be getting a lot of attention from Mossad. We see daily internet clips from mobile phones of the split in the people. Which reminds me of the old saying divide and conquer. Israel must be weighting things up big time these days. I personally think Israel will make a move on Iran, the clock must be ticking on this one. Israel has the capacity to take out any Nuclear infrastructure they want with conventional weapons and know they have the BIG arsenal to prevent any retaliation.

The Second Nuclear story is more a song and dance affair . It's another divided country judging from the stories that are leaking out of North Korea. But this is more a show of we like to be known too. Iran has been getting a lot of the headlines and Kim wants to be up there in the news. He must like the US more than people give credit as he fires off the biggest and best rockets he can to celebrate the 4th of July. He lit up the skies on the 4th in 2006 too and kicked off the celebrations in the US with a long-range Taepodong-2 and six smaller missiles. I don't think this threat is as big as is been made out in the popular press.




While the Chinese dont appear to be to upset with his developments they may not be showing the support he would like to be receiving . At the moment there is a did he or didn't he visit China with regard to his son and soon to be new leader of Korea. The Financial Times keep saying he did and if history proves to be right he did in fact visit. We have seen these denials in the past only to be proven right.



But how did he get along with their old allies is the question? China's attitude towards North Korea has hardened, shown by its recent support for sanctions against them. Also since that visit the ruling Korean Workers' Party has ordered the removal of Chinese-made cookies, candies and pharmaceuticals all in the guise of preaching self-sufficiency.



The only danger here is the sanity of the man himself . I don't think he is mad in the sense that he's going to do something crazy but, he has been reported to be in not the best of health . He sent his son and heir to his biggest ally to have at best a middle of the road meeting and more likely rejection . China needs things to go very smoothly with the rest of the world as they try to kick start their economy. Kim could feel so isolated here that he could think well I'll go out with a bang. The world will remember me one way or the other. I don't think it will happen but it's the mad things that happen. I lived to witness 911, I missed two world wars thank God but WHO WOULD HAVE EVER THOUGHT is what comes to mind.

The worrying thing was the response of the Israeli Trade and Industry Minister Benjamin Ben-Elizer whom blasted the US on their response to the Korean Missile Launches.

"I am very concerned about the United States' reaction to North Korea's gross provocation," Ben-Eliezer said in a speech delivered outside Tel Aviv.

Now why would he be blasting the US !!!!! Has Israel got some plan or are they all mouth like the rest of them. Well you do have to be seen and heard whether your a little man or just think your big enough to win.

Two stories tied together at the hip.



The outcome of Israel / Iran a short but brutal war. World economies in tatters




The North Korean story is about a little man who want's to be seen . Nothing going to happen. Unless!!!!!!




So if any, which comes first Iran or North Korea




It's the flip of a coin in my book.







Heads Iran / Tails Iran and if it lands on it's side Korea.





Not the most reliable source wikipedia but some info is ok , You should verify anything from this site.

http://en.wikipedia.org/wiki/Kim_Jong-il
http://en.wikipedia.org/wiki/Mahmoud_Ahmadinejad



Other links

http://www.timesonline.co.uk/tol/news/world/middle_east/article6638568.ece
http://www.theaustralian.news.com.au/story/0,25197,25735849-601,00.html
http://www.google.com/hostednews/afp/article/ALeqM5hzRpTuwqgSm3eOrlneK3R5WKY8pA

THE FAIRYTALE RECOVERY

Well here we are sitting on the Golden Cross and the markets loving it. The 50 day moving avg has crossed the 200 and it has everyone sitting up. The big thing here is out of the last 14 recessions 13 put in a 19.2% gain the following 12 months after such a cross. So it really is a big indicator .

Now for the killer blow .

The one time that it failed was, you guessed it 1938. I think that this time the Golden Cross was manufactured. We have seen very low volume. Each day we have seen the big buy the market at the close along with big pops at support levels which would indicate the computers were kicking in as they were programmed to. We know that of late a lot of people in companies are selling into this rise so who's buying? Well I think it's Government Sachs . The idea is if we get the markets up we create wealth and in the end we save the world. Well I'll have you know this Algorithmic Trading could be the downfall of this very plan that they are using. It has indeed dragged many to the market with their own systems triggering their buy signals . But what happens when someone spots that the Devil himself is pegged to the Cross. Yep they run for the exit only to fall through the trap door to Hell.


We have some clever company insiders selling into this rise. Who would blame these captains of industry cashing in as they know better than anybody how things stand on the ground. According to the latest figures from Bloomberg $800m took flight from the market, the first time money left the market in some time. This number is important as the latest figures show that Americans are saving more now. I wonder if in fact this $800m is the same cash that's been saved.

I have noted from many stock bulletin boards that many are having a nice ride up with the market. The one thing that stands out with many of these traders is they are ready to short this to the floor on the expected turn. If the computers kick in with their sells and these traders get to work I'm thinking there is a Hell after all.


A FAIRYTALE RECOVERY INDEED .