Friday, June 27, 2008
Multilateral US Dollar Intervention Likely On The Horizon...
With the Fed's credibility waning, market technicals broken, commodities on the verge of major breakouts, and the US Dollar within striking distance of new lows we believe we are now in the red zone for an aggressive move by the US government to intervene in the foreign exchange market and stem the slide in the US dollar. The dollar slide has undoubtedly been the culprit for much of the markets malaise, as its relentless decline has put significant upside pressure on commodities pushing oil and gasoline to all time highs. With the Fed unable to adjust monetary policy favoring a strong dollar (i.e. higher rates) for fear of adding further strains on an already cash-strapped consumer, we are looking for the US government to step in and use the untraditional measure of intervention within the foreign exchange market in an attempt to not only break the back of a raging bull market in commodities, but more importantly regain global confidence in the greenback and the US financial system. We are looking for the US government to step in multilaterally, joining hands with their european counterparts as europeans also view the soaring euro as an unwelcome hinderance to domestic growth due to the fact that it makes their goods more expensive to foreign buyers and thereby makes them less competitive in the global marketplace. We are looking for possible intervention this sunday night or next week, and as such have taken a long position in the July 115 DIA calls here at $1.76 as the DOW is now firmly in oversold territory, and either way a bounce is very likely next week.
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29 comments:
Nos,
Are we talkin' commodity sell off
Monday morning due to intervention?
I just loaded more ROYL.
I think this could happen, they don't want people flipping out over July 4th.
NOS,
Would this be a good time to load up on ROYL & FPP?
Are you saying that ROYL will collapse if this happens? It sure sounds like it.
You seem to be saying, get the hell out of commodities (gas, oil, etc...) am I missing something? What does this mean with respect to ROYL?
If I am reading this post, my expectation is that you would be dumping all of your ROYL position. Am I misinterpreting you message?
What can the US Gov't do to stem the chaos? Drill Offshore!?... Raise rates? Bernanke suggested inflation will moderate in the upcoming. Raise taxes? End the War?? Whatever scam they pull it will only temporarily mask the inevitable crash. I plan to continue to hold commodities.
What say you?
HE STOPPED ANSWERING MESSAGES DAYS AGO - YOU ARE EXACTLY RIGHT. I THINK SOMEBODY IS LOOKING TO GET ROYL CHEAP.
HEY NOSTRAMUS, HOW COME YOU HAVEN'T ANSWERED ANY POSTS ON ROYL THE LAST FEW DAYS - ARE YOU REALLY HOLDING STOCK OR ARE YOU SHORT???
NICE TOUCH WITH THE RED LETTERS - ARE YOU TRYING TO SCARE PEOPLE TO SELL THEIR STOCK?
ESPECIALLY ROYL. WHY ARE YOU NOT ANSWERING POSTS ON THAT SITE. THE GOVERNMENT HAS BEEN TALKING ABOUT THIS FOR 3 YEARS.
IT'S AMAZING THAT NONE OF THE NEWS SERVICES HAVE THIS. DON'T FALL FOR THIS SCAM - HOLD YOUR STOCK
Wow, everyone relax. We did not dump our ROYL position. We simply believe that the Fed is well aware of the critical juncture we are at in terms of the equity markets and the breakout in commodities, and we believe that the Fed will step in to prevent a major slide in the equity markets. Will we be correct, we don't know, we don't have any inside information or anything like that, we are just very good at analyzing situations and predicting the movements of market participants. We believe the situation we are in is very similar to the March environment where we correctly predicted Fed intervention the day before (see our March 10th and 13th posts)...while the Fed did not use an inter-meeting rate cut as we believed, they did step in using Treasury swaps to add liquidity to banks, and therefore averted an equity slide. This time we believe they will use forex intervention to stem the slide...of course we could be wrong. we will soon see.
Maybe you should go private? You have a bunch of new investors trying to get your best guess on ROYL. Why no responses to those. If your that smart, you should have put two and two together and realized an announcement in red print implying the feds actions could impact the commodity market might effect their holdings.
You used some pretty ominous language in today's post. Nobody could possibly read it and feel good about holding commodities.
Can't you at least understand why people reacted the way they did?
To all of those uncertain about ROYL - I recommend that you start by investigating ROYL's holdings in the Uinta Basin specifically as they relate to the Flat Rock field acquisitions recently made by WLL.
Potential reserves in the Uinta Basin are the main driver for the high valuation. Perhaps that will help you to feel more confident in your investment.
i know this is not the way you want to hear this but i feel the motive is cheap share accumulation. you can't blame me for feeling this way as my motive for the judgement will be described.
you state that the dollar collapse is reasoning for this but the dollar collapse is only part, the ONLY part the fed can tamper with. no matter wich way you slice it we have a DEMAND problem. the fed can not correct that and i still feel is the largest concern in the commodities market.
MR.Nostradamus, i do respect you as you have made some great calls and am not taking away from you by any means. my look on you and your opperation is a very skilled chartist as your self now influxing "news" to marry your charts. i have a "sell off" or more so a continues correction myself on 06-30 but for different reasons. i feel that you are making sure it happens no matter the situation. i have also via my charts had every decision you predicted locked as well and they all follow your posts wich match any chartists chart quite well.
if you are correct, wich i hope you are i will repost with an apology.
until then the red lettering has to be taken as suspect.
To me, it looks like the only one upset with this post and "not feel (ing) good about commodities" is you as it looks like you, anonymous, have posted all the comments trying to stir up fear.
There have been several very similar comments posted on the ROYL board - just look under the topic "Sell ROYL???".
As far as I can tell, the most they can do is somewhat stabilize prices on the currency side which may take out some of the volatility of all commodity prices. I can't see oil or oil stocks or gas, as in the case of ROYL, crashing to multi year lows, as the tone of anonymous posts suggests.
Nos,
No matter what, I am a fan of yours. You are accurate and gutzy enough to share your predictions with the whole world. Looking forward to see what our gov can do to prelong this pain of unavoidable decline.
Hey,
I have been following this guy for some time. He has done a spectacular job in making calls. My other investment on his site just rocketed on Friday.
ND, I wouldn't take this personally. I think spirited debate is always good. I do think people went over the top.
However, I do think the timing of the announcement could have been better. If you were a new investor that checked out the site on Friday. I can see how that might have confused them. One guy was even asking you if he "should load up" on Monday. I'm holding, but I am not loading.
Everybody take a chill pill. He is simply indicating the fed may take action. Long term, this stock will deliver.
Hindsite is 20/20
I second the chill pill. People are responsible for their own investment decisions. Always do your own research. I appreciate this blog. It uncovers things I might not normally look at. After doing my own research only then do I decide whether or not to invest. Perhaps it's time for a giant disclaimer.
NOS,
I now know why you want to go private. Every time someone gives advice some people want their hands held throughout the process. People don't understand they are only predictions and some times the timing may be off.
Keep up the good work and ignore some of the posts as they are trying to upsets your readers. Posters don't invest if you can't sleep with your investment. Just think where you would be if you invested in the market overall vs. suggestions made by NOS. I know I am quite please with my returns.
Thanks again and if you go private please keep me in mind.
I totally agree with you on the government support of the US $, I am actually surprised they didn't do it during the past G8 financial summit. Though you can see ECB and US differing views on interest rates they do agree on the US $ value. Until the Fed starts raising rates even a small 1/4 point US $ remains underwater.
nostradamus is just calling it like he sees it, whether good or bad. he still likes royl, but what he's saying is that don't be surprised by a possible Fed intervention that could impact your commodities holding.
If there is a Fed intervention then there might be a correction(short term?) and he might or might not sell his commodities holding such as royl.
he just wants to give people heads up on the possibilities so that people won't be surprise on a possible commodities correction and prepare themselves to take action, whether sell and buy back later or stomach the correction and average down.
aymon
Wow this post has obviously generated quite a heated debate. The red lettering is not something new, Ive done it several times in the past (as old readers know) when I think something extremely important is about to happen. I'm not trying to scare anyone, Im simply trying to call your attention to something which I think is very important. It may or may not happen, Im just here posting my predictions.
We have not sold a single share of ROYL as we believe the underlying fundamentals are extremely solid and the stock is still undervalued. We've said in the past whether nat gas prices are at 11 or 13 it doesnt matter...obviously 13 is much better since they are unhedged, but the basis of our prediction of much higher share prices lies in the massive amount of natural gas reserves (and now oil) they may have in their Uintah Basin acreage. The value of that alone when uncovered will take ROYL higher.
Can we get a dip in ROYL if we get forex intervention? sure. will we be buyers on the dip? yes. We'd also like to state that we believe if there is forex intervention it will only have short term effects. The price of oil is still ultimately a supply/demand issue...the dollar is just another bullish driver of prices but if you can pull a weak dollar off the table, it may take a few bucks out of oil.
Furthermore, this has obviously been an extremely volatile week in the market, so i understand everyone is stressed. But virtually all of our picks here have held up extremely well, most of them were in the green on friday while the entire market was getting obliterated. If you don't like what I have to say here, by all means read another blog or start your own, no one is twisting your arm to be here. I just call them like I see them, and that is important for many of you to learn. You can't be one-sided on any stock you take positions in nor the overall mkt. You always have to be conscious of both sides of every story, and the possibility of both. Being one-sided ALWAYS ends in disaster.
If/when I do take this blog private I will be teaching subscribers the methods behind my trading strategy. It will also be uncovered in a book im currently working on, but subscribers will get virtually private trading lessons. I want you guys to learn how I trade so eventually you can go on and become masters yourselves. And yes im using the word "master"...everything is masterable even the stock market believe it or not. It just takes a very specific perspective and understanding, and eventually im going to start teaching a small group of you the exact things you need to know and look for to become market masters.
Nos,
You've been wrong on SATC,QTWW,WEL,
these stock didn't budge at all or has been down since your recommendations, Please do not mislead the investors.
and you are wrong on FED intervention
on interest rate now ,all this fuzz are just noise. FED will not raise rate until later this year-Many Analysts view.
Well Nos. I believe in your kindness and honnesty and willingness to help people . i've also been following besides this blog your posts on thelion.. So you don't BS you are professional. I can see that. And yes I would be so greatfull to learn more and become a master. i've tried to learn the charts by myself .. Think I know a little now but i'm far from good.. I'm a mathematical person though with high IQ so I think you would find a good student in me.. so I would be greatfull if you would add me in.
my email: bdrsm@live.be
thanks in advance
Bart
and when you're book is out I'd like to know. I don't live in USA so I'll probably will have to order it online somewhere. But i want it !!!
Just a little note to the poster above mentioning a few stocks you have been wrong on. Not sure about the others mentioned, but QTWW was up over 16% on friday, so I would have to call BS on that.
Nos, I appreciate the time you put in and the fact that you dont mind sharing it. THANKS!
Hey,
Whoever said ND was wrong on QTWW and and SATC better check your facts. I know, because I own both. QTWW was way up on friday 17% and SATC made a strong move back over $3.
The MMs are keeping SATC down and it is being accumulated. I hope it drops under $3, because I will buy more. I'm sure if you look hard enough, you will find some stocks he "missed". My research indicates he is right about 80% of the time. The Real Nostradamus would have happy with this success rate. So, if you are going to pick misses, get your facts straight.
Ya these guys saying NOS is wrong, is BS. QTWW closed at a 52 week high, SATC is almost even to where NOS entered, and WEL is way higher than NOS' $1.95 entry, see his April 17th post. These guys are just haters.
The guy is right, he should totally take this site private.
i've considered the possibility of an intervention as well, but i see too many reasons for oil to stay up.
the fed has lost confidence internationaly, if they were serious they would have raised the rate up half point
any intervention now will be very short lived
the banks are in a scandalous area,, the consumer has so much debt its ridiculous
the washington president spends like there is no tommorow
will have very little effect,,,the plunge protection team has been buying the dollar and china has been selling the gold to keep it in line
we shall see soon
You jerks who whine and cry and need your hand held every day should thank your lucky stars that Nos even responds to you. He owes you nothing. You owe him everything. Some of you here are worse than children.
you are all still responsible for your own DD and if you just invest because Nos says to, then you're idiots on top of being a$$holes.
WRONG!......The Federal have already done too much with the whole Bear Stearn mishap and the discount window....the only intrinsic way to correct this is the "sword" in the economy of hiking interest rate on the same scale Volker did...go back a re-read the Fed note between 76-82'.....
OMG...So many whiner in here... I lost a lot of money to but it was my decision to trade...no one else's fault. Please go private and include me...
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