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Buzz Bits: Dow, Nasdaq Move Up

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Crude's Strong Close - Adam Michael - 2:41 PM

Please note the strong close in crude today despite a bearish crude inventory number. I have long maintained that too many folks key off the weekly inventory data. Lots of folks trying to top-tick crude right now are getting whipped around.

I can't tell you how many people ask me each week why the reason for the constant bid in crude (it's a lot). I'm sure it will become all too obvious in a few months.

In fact, I find it very bullish that we haven't pulled back more despite entering the beginning of the shoulder season where demand for crude can be 5-10% less due to mild weather.


Mini Minyan Mailbag - Dollars and Repaying Debt - Mr. Practical - 2:35 PM

Mr. Practical,

The world needs to pay back debt, which is denominated in dollars... How do the mechanics of this statement possibly come into play? Would a start down this path lead to a roadway to devalue assets and give our little g-back sustainable bid?

Thanks,
Minyan S

Minyan S,

Debtors who don't want to declare bankruptcy need to sell things to raise the cash necessary to pay back either interest or principle. Given that the vast majority of debts are dollar denominated, they will need to sell all sorts of thing and convert those sales into USD (thus the bid up for short term treasury instruments which are 'near cash' or cash equivalents).

Debtors who do declare bankruptcy send whatever assets they have to the creditor and they (a bank holding a home for e.g.) have to covert that asset into cash. That is how the demand for cash (and thus the relative value of the USD against goods, services, gold, silver, other fiat currencies) increases.

-Mr. Practical



NEM News, Not a Warning - Lance Lewis - 2:20 PM

Newmont Mining
(NEM) is under pressure after the company filed its Denver gold show slide presentation with the SEC.

The interesting thing is that this was not a "warning". The media has basically taken a couple of slides from a slide show and painted them as a "warning". For example, the Marketwatch story that hit even before Bloomberg picked anything up this morning says Newmont Mining warns on costs, dwindling reserves.

Rather than parse through what was said by these journalists. I would encourage people to review the slide show above and the actual audio presentation (see the link below) and ask themselves what has changed? I think you will find that today's "news" is not "news" for NEM (although the fact that NEM says it's open to acquisitions is in fact bullish news for the juniors). The presentation was actually quite bullish, I thought after I reviewed it. Also of note for those involved with Golden Star (GSS) was that NEM also said that it expected costs in Ghana to actually fall going forward.

Click here for the NEM presentation (and others at the Denver gold show), which you can access after entering user information.

Given the huge move that NEM has had since the August lows (and the heavy chart resistance in the $48 area), just about anything was due to trigger a correction like this in the stock. Today's mischaracterization of this "slide show presentation" by the media just served as the silly excuse, in my view.

For those looking to add to gold mining positions, this seems like an opportunity to me.

Positions in NEM and GSS.


Cute Couple - Sean Udall - 12:51 PM

Optium (OPTM) and Infinera (INFN): Both stocks have made important near term technical moves. Multiple metrics confirm this.

Near term fundie catalysts have also occurred. Optium with an earnings turnaround and Infinera with multiple new large contracts. And Infinera has all the markings of a possible second coming of Riverbed (RVBD) (which I wish I still owned).

Even though long, I'm thinking of adding to both.

Positions in OPTM and INFN

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No positions in stocks mentioned.

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