Break Free from Fossil Fuel - Resolve on Earth Day

Earth Day was celebrated world wide on 22 April- a day to reflect on environmental issues of our planet. On Earth Day let us spare a thought for our environment - not for any lofty abstract charitable symbolism but for our own survival on this planet.

We must debunk the myth that any step to protect environment, will save our planet. It will save us.

When we tackle environmental issues with positive action, we are saving ourselves, and not the planet. This planet will survive any environmental catastrophe, but humans will not.

So let us do ourselves a favor - protect our environment. In this process we will save our species from extinction. Earth has and will survive many such catastrophe.


Fossil Fuel

This Earth Day let us resolve to phase out fossil fuel from our environment.

We the people of planet earth, have to set urgent realistic deadlines and act firmly to throw out fossil fuel from our ecosystem. Once and for all!

Break free from fossil fuel within next 10 years. It is possible if we have many more Elon Musk (CEO Tesla Motors) on earth.

We must have many variations of Tesla by many other automobile companies. Automobiles consume 60% of world's total oil consumption. Replace fossil-fuel-guzzling automobiles with clean efficient Tesla-kind-of-electric automobiles and enjoy pollution free cities.

Recent precipitous fall in crude oil prices will help the cause of fossil-fuel-free world.

Find ways and means to keep oil prices low for a long time so that oil business is no longer lucrative, and finally gets abandoned by big influential coteries and countries.

Peabody, world's largest coal company, recently filed for bankruptcy protection in US owing to falling demand of coal. This space should quickly get filled by renewable energy.

Technology enhancement in renewable energy should be a global effort, backed by governments under UN umbrella, and not left to corporations. Then only renewable energy will be accessible, cheap and user friendly for mass consumption.

Peek at US Markets from Sidelines

Dow opened the day at 17985, rose to a high of 18027 , then plunged to a low of 17910 and recovered smartly to be slightly in green.

Important points to keep in mind for Dow :-

If Dow closes flat today, then it will be very encouraging for bulls. It will mean that Dow has taken support from 10 EMA and declared it's intention to move higher on Monday. I am expecting that low and high made so far in Dow, remain intact in trade today.

On Monday, if Dow does not violate today's low(17910) and closes above today's high(18027) - then we can expect Dow to touch 18300,

Out of Work But Thankfully Out of Danger - US Markets Dive

We went out of business when Dow reached 17900 last Friday. I had asked my audience to exit US markets with Dow between 17990/17950. Dig out details here.

I not only asked my audience to exit markets, I also told them to stay on the sidelines. That makes us unemployed - watching the battle from gallery. Probe yourself. If you are short of time to probe, examine the operative paragraphs :-

"The best case scenario is that the sell off in equity markets takes place in slow motion. Big players may choose to exit their positions in a classical "Distribution Process" so that they can obtain reasonable price for their huge long positions.

So you may witness very high volatility with spurts of buying interest emerging and trying to draw eternal bulls into a bull trap. That is the shade of grey for you!. Keep out of markets and watch it from sidelines till dust settles down. I will keep you posted and immediately inform you as and when that happens. Be safe, be happy - adopt a no-trade strategy for the moment!!!"

Watching from sidelines, you can witness battle raging between bulls and bears. Today bears seem to be winning. I have been maintaining in all my previous posts that bears will defend their last known territory between 18000/18200 in Dow. You can find mention of this here or read the excerpts below ;-

"I still maintain this view that there is no point in sticking one's neck out when Dow is in its long term selling zone of 18000/18200. Bears by all means will defend this last territory. Once out of this territory,Dow will be breaking new grounds - where no man has ever been before! All- time- high of Dow is 18351."

US markets are down more than 100 points at the moment. Don't you agree that we are safe sitting out this volatility? It is very difficult to be holding positions in such times when there is no clear trend.

At such moments you cannot even build short positions. For all you know, tomorrow you may find Dow 100 points higher. 

One thing is certain though - definite move either way  will be signaled by an intra-day movement of 300 points in Dow in that direction. Therein lies your indication to trend development. 

Watch this space regularly for updates and call to action. Also, your comments will be most appreciated. So take out few minutes to do me a favor and comment without any inhibitions. 

Chinese Invade IMF - Yuan Set to Become Reserve Currency

At peak of last global financial crisis of Sub Prime fame, Chinese leadership publicly criticized  international monetary system. China chided that a  international monetary system solely dependent on US Dollar for stability, will be prone to disaster. From there started Chinese quest to invade international monetary system.

China went about being the good guy and convinced IMF executive board that Yuan meets standard of "freely usable" currency. It also observed all IMF compliance rules to get approval for entry into SDR (Special Drawing Rights) basket.

Countries can use SDR to supplement their reserve currency. IMF member countries holding SDR can draw any currency from the basket to meet balance-of-payment needs.

Presently this basket of Reserve Currencies has US Dollar, Euro.Yen and British Pound. On 01 Oct 2016 Yuan will join these privileged currencies to stake claim to Global Reserve Currency basket with weighting of 10.82%, ahead of Yen and British Pound

Are you convinced that IMF has rightly approved Yuan as Reserve Currency? 

Chinese leadership has long history of being secretive and manipulative in their demeanor. All economic activity and data are either hidden from international scrutiny or fudged.

China has always been cheating on its currency and has pegged it artificially and arbitrarily to the dollar.

Despite its dubious track record on monetary front, China could win IMF approval by opening its onshore Bond and Currency markets to foreign Central Banks. Plus it reported its reserves to IMF - Bah Big Deal!!

No one is sure these reserve reports are true or not.China recently reported its Gold reserves as 1658 metric tons after a gap of six years. This is close to last reported figure six years back. However experts believe that it should be nearly double that figure at 3000 metric tons.

Who should we believe? I am with the experts who keep a close tab at various bullion activities of the dragon nation and have nothing to gain by falsifying figures.

Why IMF ignored Time Bomb called Chinese Economy?

Chinese economy is in shambles with balloons all over. Which of these balloons will burst and when, is anyone's guess.

In my earlier post I had mentioned China as one of the three factors that can crash global markets. Other two factors mentioned in that blog were Oil and Brexit. You can again visit the post : Bears Sharpening Daggers - US Markets in Danger of Bear Grip

Very briefly we will go through present state of Chinese economy to get the full import of IMF decision :-

• Chinese stock markets, barometer of health of any economy, have simply collapsed. Shanghai Composite Index has sunk from 52 week high of 5178 to 3042 - loss of 41% in a year. Moreover it is hurtling towards 2000 level. Remember stock markets are leading indicators to overall economy by six months.
• China is in midst of oscillating between bubbles - it moved from real estate bubble to stock market bubble to bond bubble and presently has come back to real estate bubble. Property markets in Shanghai rose by 25% year-on-year.
• China released its GDP figures which simply do not add up. Figures are too smooth to be believed. When they had largest annual decline in rail freight traffic ever reported, how has GDP grown?
• China is a debt fueled economy. Moth-eaten corrupt sectors like real estate are being merrily funded.
• Chinese banks have trillion dollars as bad loans (NPAs) and are collapsing under the burden. Recapitalizing such a huge capital is not an option with the govt. 
• China has not even come clean on the total extent of bad loans that their banks are reeling under.
• Since the present dispensation took over in 2012, no economic reform has been carried, except anti-corruption drive within party with the sole aim of hogging and concentrating power.

The laundry list of Chinese Machiavellian machinations goes on and on. Yet IMF would like to hand over international monetary strings to China? Beats me! 

If anyone in the audience has different take, please do comment to make us wise on this issue. Whether in agreement or not, your views on the subject will go a long way in shedding more light. So do us a favor and comment uninhibitedly. 

Glimpse of US Markets

Going to press, Dow was trading at 18041, down 11 points. It opened at 18059, made a low of 18031 and high of 18078.

I am still maintaining my stance of recommending no action in US markets till clear trend emerges. Remember we are right inside the Resistance Zone of 18000/18200 in Dow. If you missed my recommendation detailing this strategy, here is the link again.

I will be waiting for your comment!

Hear Bulls Roar - Dow Positioned to Break New Ground?

Bears running for cover! And there is none.

From  Asia, Europe right up to America, there is no place for bears to hide. Everywhere bulls are in full control. Markets are in all shades of green, but green all the same.

Oil is up by 0.5% - and surprisingly enough Gold is also up. Bulls are running amok and have inadvertently stepped into gold bastion. But once there by default, they are piling up bullion. Someone please explain more rationally!!

Yesterday Dow recovered form day low of 17848 and closed at 18004, after making a high of 18010. This means that Dow swung a neat 62 points from day low to reach its high. All this was done in gloomy and uncertain situation of oil plunge. Very creditable!

Feeling Left Out of the Celebrations?

Today  Dow has opened in green at 18014 and is at present up by 37 points. But we are out of work, isn't it? That is because I told you to book profit when Dow at 17900/17950 as per my earlier post.

Snippets from that post   Bears Sharpening Daggers - US Markets in Danger of Bear Grip
"Bears are gleefully whetting their hatchets and tomahawks, waiting for markets to open. So the wise thing to do would be to square off all long positions between 17900/17950 in Dow.

I agree that you would feel cheated if Dow was to surge northwards, but it is better to take profits off the table. Remember we had built long positions as per my advice at 17400 in Dow. If you take profit at 17900 you still would have accrued 500 points in Dow.
Massive resistance in Dow Jones exits at it's long term selling zone of 18000/18200. No need to take extra risk in hope of collecting 100 Dow points more, with dark clouds gathering on global stage"

I still maintain this view that there is no point in sticking one's neck out when Dow is in its long term selling zone of 18000/18200. Bears by all means will defend this last territory. Once out of this territory, Dow will be breaking new grounds - "where no man has ever been before!". All time high of Dow is 18351.

What we are witnessing now may be some sort of trap being laid for bulls. I had mentioned it in a post last Saturday. Sample the snippets from the post How will this Sunday be - Black or Grey?

"The best case scenario is that the sell off in equity markets takes place in slow motion. Big players may choose to exit their positions in a classical "Distribution Process" so that they can obtain reasonable price for their huge long positions.

So you may witness very high volatility with spurts of buying interest emerging and trying to draw eternal bulls into a bull trap. That is the shade of grey for you!. Keep out of markets and watch it from sidelines till dust settles down. I will keep you posted and immediately inform you as and when that happens. Be safe, be happy - adopt a no-trade strategy for the moment!!!"

Please don't get trapped!!

Dare Saudis to Execute Threat to Ramp Up Oil Production !

Saudi Prince threatened last Thursday that if Production Freeze at Doha Summit was not agreed to, then they could ramp up oil production by extra 1 million barrels per day. Now that there was no deal at Doha on Sunday, we dare them to ramp up production as announced. We dare them to shoot themselves in the foot. We dare them to carry out their puerile threat. We, the people of planet earth, dare them !!

We are tired of Saudi shenanigans. They are at this mischief for so long that it is not funny any more. As many aver, even with trillions of  petro-dollars Saudis have not done one single act of goodness for mankind. In fact its the other way around!

For investors in oil, there is no reason to panic. This fall was expected which I had announced on Saturday itself. If your are visiting this space for the first time then I recommend you to read following posts before proceeding further :-
                              How will this Sunday be- Black or Grey?
                    World Waits with Bated Breath - Doha Summit Outcome

Lets analyse the situation as it exists today. Crude is down 2.9% at 39.3 USD as of publishing this post. It has recovered lot of lost ground when earlier in the day it had crashed more than 5%, day low being 37.61 USD.

Why am I saying there is no reason to panic for oil investors. Oil can go down to 35 USD this week but that is all. In fact many believe that NO Deal at Doha has been a boon in disguise for long term stability of  crude oil market.

Forces of demand and supply will realign in a structurally sound manner. Supply side constraints will develop as production in many oil producing countries will be curtailed owing
to prolonged low prices not being viable, including shale gas production in US. Offshore drilling will be simply untenable.

On the demand side one is expected to see small incremental steps of growth as global economies claw out of  mire. Local politics, if not anything else, will compel nations to increase productivity in many ingenious ways. After all recession also has shelf life!

Glimpse of US Markets

Dow is up 59 points at 17956 as of going to press. Moving in tandem with oil. Dow has also recovered from its day low of  17848. But we are not trading - remember? I had asked my audience to exit market at Dow in range 17900 - 17950. That was on Friday and you may check it here.

This exit has given us a profit of 500/550 points in Dow since we entered market when Dow was at 17400 as per my recommendations. Check it out here.

But right now we should have market strategy to sit on the sidelines. Let various forces of pull and push play out. Let clear trend emerge and then I'll tell you confidently to enter trade for definite gains, like I always been doing. Remember trading gains of 700 points jump in Dow from 16500 to 17200!

Enjoy no work!!