A Dang Good Year for AUDCAD … So Far!

If you bought the Australian dollar and simultaneously sold the Canadian dollar at the beginning of the year and you’re still positioned like that then you’re probably a pretty happy camper. That’s because year-to-date AUDCAD (Australian dollar vs. Canadian dollar) has jumped 1,000 PIPs – or 11.4%. And in the world of forex, that’s a huge move.

And having just tested its highest level in more than three years, we begin to wonder if this pair could be running out of gas. Buy-and-hold strategists will tell you the trend is your friend, so keep buying and holding. But we’ve got a different philosophy that keeps us asking: when is the trend not your friend? And when is the trend going to reverse and take you to the cleaners?

 

Right now may be one of those times … or it might not. But

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The benefits are obvious, but some risks are not widely appreciated. The Utilities Sector shows a disturbing trend for the 12 months ended May 2008. The Gas Utilities Industry has fared a little better than its peers during this period. The crude oil outlook is unclear. That is why opinion is divided on how gas prices may fare in future.

This small-capital stock from Fort Worth, TX has a clear location advantage. The home base is front and center of one of the most exciting natural gas fields in all of North America. The management has been sanguine in leveraging a spatial advantage fully. It has been pro-active in securing gathering and processing rights to top natural gas resources in its neighborhood.

Stock investors wary of how the markets have behaved during June 2008 will be relieved to know that this stock

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Ctrip.com (CTRP) is an interesting thesis right here - one could make an arguement that as China slows so will travel, but it is all relative ("slowing" in China is a very different proposition than the US - i.e. GDP dropping from 12% growth to 6% growth would seem like a recession for them, while in the US we would dream for 6% growth). That said a major risk would be the post Olympics removal of energy subsidies which would put a serious crimp in the growth story there. We shall see how it plays out. All I know is for nearly 5 years, when I buy Ctrip.com on dips I am always rewarded over time - even though it is ALWAYS expensive on a P/E basis. Much like the DryShips purchase I don't expect any huge rebound anytime soon, and thus I am (as always) ...

Gold is Money. Its been said before, notably by the late JP Morgan. Yet today we find ourselves forgetting that gold is money.

Jim Sinclair has made some very accurate calls in his time, and is one of the most recognized experts in gold today. A recent message from Mr. Sinclair, I have bolded where he says gold is money:
As far as I am concerned:

I do not anticipate a one month or more drop in gold. Neither does Monty Guild, so be careful not to read his general commodity comment ass-backwards.
The worst case scenario is a chop after the low of April 28th set in, and the rally high in the low $950s. Following this the chop gives way to a break above $1034 on its way to $1200 in 2008. Write that down for the dark night of your gold soul.
Gold …

What goes for copper, goes for technology stocks (and global markets as a whole). After what looked to be a triple top for the commodity in 2007, the ever weakening dollar helped push an upside breakout of $375.

Broadening wedges are hard to define; upper and lower boundaries which help contain price expand with time, disguising future price developments which may hold greater near term significance. If this is what’s at play then a move back to $250 would appear the best case for the metal.

However, as long as $375 holds (which it has so far managed) then a run-of-the-mill breakout is to hand, with a projected target closer to $500 than $250.

U.S. election years are traditionally viewed as bullish for the market; a change in the guard brings fresh ideas and a brighter outlook. However, the previous two have been anything but. The current protracted Democratic nomination isn’t helping given …

Back in July 2006, I set a price target of $125 on oil and I gave it two years. Back then, oil was at $75 a barrel. My reasons were simple: 1) Demand from developing nations including China. 2) No addition to the world oil supply. 3) Geopolitical concerns in Iraq, Nigeria and Venezuela. 4) A commodity bull cycle which is far from over. My prediction on this price target holds true as we are just $2 short of the $125 mark in less than 2 years since that post. Back then, I received plenty of opposition to my post. While the headline "Oil is Cheap" might not have held true to historical prices, what I meant all along was that oil was cheap back then relative to the price of oil in the future. And guess what? I think oil will be higher in two years than it is now. I think in two ...

The individual names do not matter at this point so I am going to just consider this mini basket to be "1 position". Last Thursday as the chickens were running around with their heads cut off about the "strong dollar", I was incrementally adding to my coal stakes [May 1: Incrementally Beginning to Add to Coal] so today I am simply reversing those purchases plus taking out some Alpha Natural Resources (ANR). Let's look at them as a group since that is how I look at these 4 names - I had a 10% weighting going into day with Arch Coal (ACI), Massey Energy (MEE), ANR, and Consol Energy (CNX) They have come a long way in just a few days ACI from $53s to $62s (+17%) MEE from $48s to $57s (+19%) ANR from $46s to $58s (+26%) CNX from $75s to $89s (+19%) Please note I did not buy at the lows Thursday, ...

I know we have a lot of readers who subscribe only by email and hence do not come to the website itself, but just as an fyi sometimes we run polls and/or there are comments made by readers that you are missing out on ;) Anyhow in this week's poll we asked 'What is Your Long term View on Commodities?' With 97 respondents 16% responded that this is just the latest in a series of bubbles 84% responded that in 5 years we are going to wish we could buy at these prices Now, I assume there is sampling error because I fall more in the latter camp so most blog readers who were less biased probably are leaning to the latter answer after reading the blog or as most humans do, prefer to read sources that agree with their own viewpoints - hence we attract more people who already came to the blog with ...