ON WITH THE SHOW.....
AAA.V..THE PIGS GOT A LOVE FOR THIS CHART. IT STILL SCANS SOME NICE NUMBERS. IT HAS EXCEPTIONAL MANAGEMENT, IT HAS TWO EXCEPTIONAL PROPERTIES. IT HAS AN EXCEPTIONAL OPORTUNITY FOR PROMOTION, AND A FEW OTHER HIGHLY PRIZED ATTRIBUTES VALUED IN A STOCK. BEST OF ALL, BECAUSE OF ITS PROXIMITY TO SEVERAL INTERNATIONAL MAJORS, ITS HEADED RIGHT INTO THE MIDDLE OF A POTENTIAL BIDDING WAR. THE PIGS TARGET OF $3 BY THE FALL IS NO DOUBT A CURIOSITY AND A BIT LAUGHABLE TO SOME. THE PIG HAS QUITE A SENSE OF HUMOUR.....BUT HE IS VERY SERIOUS ABOUT THIS COMPANY. THE PIG OWNS OVER 50,000 SHARES OF AAA.V.
SLI.V...THE PIG WROTE UP THIS PORK CHOP JUST A COUPLE OF NIGHTS AGO. SEE THAT ENTRY FOR A REVIEW. THE PIG JUST BOUGHT A COUPLE OF THOUSAND SHARES THIS WEEK. THE PIG SCANS ARE QUITE IMPRESSIVE, BUT THE REAL TIP CAME FROM A PIG CONTACT. THE PIGS CONTACT HAS LOFTY PREDICTIONS FOR THIS CHOICE CHOP. TOO HIGH TO PRINT AND NOT GET LAUGHED OFF THE BLOG. AS WITH AAA.V THE PIG SAYS ITS A LONG TERM BUY THAT COULD GO MULTIPLE, EVEN FROM CURRENT LEVELS.
NEW CHOICE CHOPS.....................
REV.V...THE PIGS NOT SURE WHAT THE HUBBUB IS BUT THE SCANNERS SURE PICKED UP ON IT. ACCUMULATION TO THE MAX, DISTRIBUTION TO THE UPSIDE, MOVING AVERAGES TO THE UPSIDE AND NO APPRECIABLE NEWS. WHATS THAT TELL US ? YES THAT SOMEONE KNOWS SOMETHING AND NEWS IS PROBABLY COMING. ACT CAREFULLY AND WATCH FOR LIQUIDITY IMPROVEMENT, BUT ITS SURE A TEMPTING TIDBIT TO OWN.
CTE.V..A PREVIOUS PIG PICK FROM A DAYS BACK, BUT WITH ONE OR TWO DELICIOUS TWISTS. ACCUMULATION CONTINUING, LIQUIDITY STAEDY, BUT THE MOVING AVERAGES ARE SHOWING PRE EXPLOSIVE NUMBERS. ONCE AGAIN, WATCH FOR LIQUIDITY FOLLOW THROUGH AND CONTINUED ACCUMULATION. IF GOT IN ON THE FIRST RECCO THEN CONSIDER SOME PROFIT TAKING AND MORE PATIENCE.
ERI.V...THE PIGS REALLY NOT SURE OF THE STORY HERE...AND YES ITS FALLEN OFF THE EDGE A BIT. BUT THE SCANNERS PICKED UP A LARGE CHANGE IN SOME AREAS THAT INDICATES TO THE PIG THAT SENTIMENT IS CHANGING, AND FOR THE UPSIDE. THE PIG WARNS THOUGH, LIQUIDITY (VOLUME), THEN A SMALL POSITION AND THEN PATIENCE. THERES A CHOICE CHOP HIDDEN IN THERE SOMEWHERE. BUT THE PIG NEEDS A BIT MORE COMFIRMATION BEFORE WADING IN.
Crude oil leads markets skyward......
By Dan Healing And Shaun Polczer, Calgary HeraldApril 2, 2010Oil and gas stocks soared, the loonie flapped to within a cent of parity and crude prices touched above $85 US per barrel Thursday as buoyant economic news boosted investor sentiment.
On the heels of the richest initial public offering in Canadian oilpatch history -- $1.35 billion raised by Calgarybased Athabasca Oil Sands Corp. on Tuesday -- stock markets marched resolutely upwards. Oil-weighted players led the way, as the S&P/TSX capped energy index jumped three per cent, with PetroBakken Energy gaining 9.4 per cent to $29.01. Oilsands players were right behind. Cenovus Energy rose 5.8 per cent to $28.06, UTS Energy ascended 5.8 per cent to $2.57 and Canadian Oil Sands climbed 5.1 per cent to $32.01. The broader Toronto market index climbed 113.33 points to 12,151.06 and the Dow Jones in New York closed at 10,927.07, up 70.44 points. Both reached highs not seen since September 2008. Oil settled at $84.87 US a barrel, up $1.11, after hitting an 18-month high of more than $85 earlier in the session. "The bigger picture for oil prices is the impressive array of global economic indicators we've seen in recent days, which to me suggests the global economy gained further momentum in March," said Douglas Porter, deputy chief economist for BMO Capital Markets.
"Specifically on the Canadian dollar, I think it's gotten a boost from this upturn in oil prices, but it's also been supported domestically by another series of strong numbers for Canada, which heighten the odds of the Bank of Canada hiking interest rates with or without the Fed this year." Porter said BMO has bumped up its national gross domestic product growth forecast to 3.4 per cent from 2.6 per cent at the start of the year.Both Porter and Scotiabank commodities specialist Patricia Mohr expect the crude oil price to lose strength later this year and neither has changed the forecast based on recent events. Porter has an average price forecast of $78 this year and $85 next year, while Mohr predicts $83 and $87, respectively."Commodities were just surging today, almost across the board, with particular strength in oil," said Mohr. "What this really boils down to is the commodity markets are beginning to anticipate a strengthening recovery in industrial activity across the G-7 countries and with that a recovery in demand for raw materials, including oil."
The Athabasca offering is more about the strength of equity markets than the price of oil, Porter said. "It shows the increasing risk appetite of investors more broadly. Definitely it's a thumb's-up for the oil market as well," he said. Walter Zimmermann Jr., chief technical analyst for United-Icap brokers in New Jersey, suggested commodities such as energy, and equity markets reach a seasonal peak before falling back again in May."You would expect this going into April," he said. "You almost always get some sort of uplift going into spring."But he suggested higher interest rates later this summer would keep a lid on energy prices and the stock market. Governments in both Canada and the United States are expected to start tightening monetary stimulus later in the year, which is code for higher rates. That in turn will slow the economy and reduce demand for products such as oil, Zimmermann said. "We might have a shot at $100 (a barrel) before May," he added.Martin King, a commodities analyst with FirstEnergy in Calgary, said in a weekly research note the rally could be short-lived.
"Not to say that it should be reversing course and heading lower, but simply that the necessary physical ingredients are absent, for the moment, to sustain a push to higher price levels." Higher oil prices gave support to the Canadian dollar, which traded within a cent of parity to its U.S. counterpart, closing at 99.17 cents US, up 73 basis points.The loonie strengthened against 14 of its 16 most-traded counterparts, including the euro and the yen, after a report Wednesday showed the nation's economy grew in January at the fastest pace in three years."The Canadian dollar is up on positive underlying sentiment and broad-based (U. S.) dollar weakness," said Marc Chandler, global head of currency strategy at Brown Brothers Harriman & Co. in New York. "I do think parity will happen."
The dollar tends to track movements in stocks and commodities, which has earned it the title of "petrodollar."Oil rose after economic data from the world's three largest economies reinforced confidence in the global economic rebound. U.S. manufacturing expanded last month at the fastest pace since July 2004, according to the Institute for Supply Management's factory index, which exceeded economists' forecasts. China's manufacturing expanded at a faster pace, while a Bank of Japan survey showed confidence among the nation's largest manufacturers rose for a fourth straight quarter."The tone of data releases was all better-than-expected," said Jack Spitz, managing director of foreign exchange at National Bank of Canada in Toronto. "Equities and commodities are posting gains. Unsurprisingly, the Canadian dollar as a risk-correlated currency is doing well."
Canada is "not going to be protectionist," Finance Minister Jim Flaherty said in an interview with Tom Keene on Bloomberg Radio. While Canadian companies are not doing enough to boost productivity, the country's automobile sector is improving after last year's shutdowns, he said. Gross domestic product increased 0.6 per cent in January, the fifth straight gain and the biggest since December 2006, Statistics Canada said Wednesday. "The Canadian economy is firing on all cylinders," said Omer Esiner, a senior foreign-exchange analyst in Washington at Travelex Global Business Payments, a currency-exchange network.
spolczer@theherald.canwest.com
Thursday On The Markets
Canadian dollar: 99.17 cents US, up 73 basis points
Oil: $84.87 US a barrel, up $1.11
S&P/TSX: 12,151.06, up 113.33 points
TSX Venture: 1,602.54, up 26 points
Dow Jones: 10,927.07, up 70.44 points
Nasdaq: 2,402.58, up 4.62 points
Gold: $1,126.10 US an ounce, up $11.60
© Copyright (c) The Calgary Herald
Commodity bulls may be due a Chinese reality check
By Christopher Brown-humes
Published: April 2 2010 19:56
Last updated: April 2 2010 19:56
Commodities are booming, we learned again this week, with news of a near-doubling in iron ore prices for this quarter. The same is true of mining shares. The FTSE All-Share mining index was up 4.6 per cent in London’s holiday-shortened week. The rise owed less to the news about iron ore than the raft of positive global manufacturing data on Thursday that supported the growing view that the recovery is gathering momentum and the world can avoid a double-dip recession. But at these levels even the most ardent commodity bull has to question whether the sector is becoming overvalued. Mining stocks have tripled from their low in December 2008. Rio Tinto’s shares pushed above £40 on Thursday, after hitting a nadir of £8.66 on December 5, 2008 (they are still below their £58 peak in May 2008). BHP shares at £23 are already above their summer 2008 peak of £21.96. And Xstrata shares, worth less than £3 in early March last year, are now worth £13 apiece.
The rally owes most to the fact that Chinese growth was not derailed by the recession that hit the world’s other main economies. Indeed, the Chinese economy has continued growing strongly thanks to its spending on infrastructure which is very metals – and hence commodities – intensive. But what if economic recovery picks up in other parts of the world, as Friday’s US non-farm payrolls figures suggest? That could give another leg to the commodities rally. Xstrata concluded a coal deal with Japan this week at a level that was better than expected and oil also broke out of its recent trading range, hitting $85 a barrel.
There is every indication, in other words, that miners are heading for a profits bonanza. BHP calculates that every $1 rise in the annual price of iron ore adds $80m to its net profits and every $1 rise in the coking coal price adds $25m. But it is going to be harder to make profit forecasts in future because iron ore prices will no longer be negotiated on an annual basis, as they have been for the past 40 years. They will now be fixed quarterly, based on recent spot market levels. In the April-June quarter, prices will be $110-$120 a tonne, compared with the $60-a-tonne level at which the 2009-10 annual contracts were settled. If the April-June price holds for the whole year, BHP profits will rise by a whopping $4.8bn.
But that is a big if. Which brings us to the key question facing all investors in commodities in the coming months. Will Chinese demand hold at recent levels? The optimists believe China will continue to stockpile commodities, underpinning demand. The sceptics say the country’s booming economy will have to be cooled by monetary tightening and that will eventually hurt demand. Interestingly, investors in the Chinese stock market appear less bullish about the country’s prospects than those in other markets, given that the Shanghai Composite fell by 5 per cent in the first quarter. This cannot be ignored unless the country’s stock market is completely divorced from its fundamental economic health. Another reason to doubt whether the mining rally is sustainable is that commodity price rises will feed into increased manufacturing costs and ultimately higher inflation. That will inevitably lead to higher global interest rates.
But this is not an issue in the short term. The short-term issue is that if mining profits are going to explode, how will miners spend their bonanza? Higher dividends, special dividends, share buy-backs and renewed corporate activity are all possibilities. There certainly seems to be some unfinished business on the corporate front. At the height of the commodities boom, BHP sought to merge with Rio Tinto, Vale of Brazil attempted to buy Xstrata and Xstrata approached Lonmin. Since then Xstrata has had to abandon a plan to merge with Anglo-American. A new round of takeover activity could give a further push to share prices. But investors should also be wary about predators overpaying and regulators intervening in an industry that has already seen a great deal of concentration.
chris.brown-humes@ft.com
THE PIGS WEBSITE OF THE WEEK.................
(A PIG FAV....)
http://chartgame.com/
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