Baltic Dry Index. 1014 -17 Brent Crude 46.17
LIR Gold Target in 2019: $30,000. Revised due to QE programs.
David Madden, of IG, said: “It used to be just Australia that would catch a cold when China sneezed, but the Chinese sell-off is far more infectious than initially thought.”
---- Mr Madden warned it will take “a few more months” to see the impact of the Chinese devaluation, adding “when it does trickle down it will be painful”.
http://www.telegraph.co.uk/finance/markets/ftse100/11813666/Global-markets-tumble-as-commodity-prices-fall-into-death-spiral.html
It’s a rout! Flee for your lives. Even the talking chair’s New York Plunge
Protection Team was overwhelmed. Mr Dow has spoken. Commodities, led by Dr.
Copper, the metal with the PhD in economics, were right after all. Now comes
the big question, how much damage was done by all this year’s central bank malinvestment
bubble. Plus where will the next Lehman show up.
Below, more on when central banksters become irrelevant. When pushing on
a string and hopium fail. How is Greece ever going to repay anything?
The Dow Theory just flashed a ‘sell’ signal
Published: Aug 20, 2015 5:17 p.m. ET
The Dow Industrials join the Transports in breaking January lows
CHAPEL HILL, N.C. (MarketWatch) — The venerable Dow Theory, the oldest stock market timing system that remains in widespread use today, flashed a “sell” signal at Thursday’s close.The Dow Theory was introduced gradually over the first three decades of the 20th century in editorials in The Wall Street Journal by its editor at the time, William Peter Hamilton. The three preconditions for a “sell” signal that he set out are:
- . Both the Dow Jones Industrial Average and the Dow Jones Transportation Average must undergo a significant correction from joint new highs.
- . In their subsequent significant rally attempt following that correction, either one or both of those Dow averages must fail to rise above their pre-correction highs.
- . Both averages must then drop below their respective correction lows.
That situation could have been resolved bullishly if the Dow Transports DJT, -2.50% had surpassed its previous high. That didn’t happen, and instead the third and final hurdle of a Dow Theory “sell” signal was generated at Thursday’s close when it broke under the low identified in step 1, which was 17,164.95.
But it wasn’t even close: The Dow cleared that hurdle with 174 points to spare.
More
S&P 500 Drops Below Trading Range as Global Selloff Intensifies
August 20, 2015 — 10:52 AM BST Updated on August 20, 2015 — 10:06 PM BST
The Standard & Poor’s 500 Index tumbled the most since February
2014, sending it below a trading range that has supported it for most of the
year amid intensifying concern that global growth is slowing.
The S&P 500 slipped out of the 70-point trading range it has been stuck
in since March, falling below 2,040 to as low as 2,035.73. The gauge erased its
gain for the year and is now 4.5 percent below its May record. The benchmark
slid through its average price for the past 200 days for the fourth time this
month, failing to rise back above it by the close for the first time since July
9.
----Other major indexes also tumbled. The Dow Jones Industrial Average lost 358.04 points, or 2.1 percent, to 16,990.69, the lowest level since October. The Nasdaq 100 Index retreated 2.8 percent, with only four members advancing. The Chicago Board Options Exchange Volatility Index rose for a fourth day, heading for its biggest weekly gain of 2015.
Netflix Inc. lost 7.8 percent as investors targeted the biggest winners
of the year. Media stocks entered a correction as Walt Disney Co. tumbled 6
percent amid an analyst downgrade. The Nasdaq Biotechnology Index also entered
a correction, falling more than 10 percent from a record set a month ago. The
Philadelphia Semiconductor Index slid into a bear market, plunging more than 20
percent from a June peak.
----U.S. equities had held their ground throughout 2015, weathering turmoil from Greece and headwinds including a strong dollar that threatened multinationals’ earnings and a more than 60 percent drop in oil prices.
The S&P 500 stuck within a range roughly tracking its 50-, 100- and
200-day moving averages, boosted by signs the economy is recovering and support
from central banks. The S&P 500 hasn’t had a decline of more than 5 percent
all year, and hasn’t dropped more than 10 percent since 2011.
The index today plunged below the 200-day moving average as the rout in emerging
markets intensified, with Kazakhstan becoming the latest country to stop
defending its currency, as developing nations struggle to overcome plunging
prices for commodity exports and China’s shock devaluation.
Currency weakness and a slowdown in Chinese growth prompted Citigroup to
cut its 2016 global growth forecast to 3.1 percent from 3.3 percent, its third
consecutive downgrade, while holding its 2015 estimate at 2.7 percent.
More
U.K.'s FTSE 100 Stock Index Falls 10% From Record, Entering Correction
August 20, 2015 — 9:19 AM BST Updated on August 20, 2015 — 4:45 PM BST
Falling health stocks sent U.K. stocks down for an eighth day amid
global growth concerns that have been rattling markets.
The FTSE 100 Index has now dropped more than 10 percent from its high in
April -- typically known as a correction.
The
benchmark fell 0.6 percent to close at 6,367.89 in London, putting its
eight-day drop at 5.5 percent.
China Caixin manufacturing PMI hits 6 1/2 year low
Published: Aug 21, 2015 12:48 a.m. ET
BEIJING--An early gauge of China's factory activity fell to a
six-and-a-half year low in August despite China's efforts to reinvigorate
slowing growth.
The reading released on Friday suggests Beijing may need to do more to
reach its goal for the year of about 7% economic growth over 2014. "Now
they need to double down on stimulus," said Tim Condon, an economist with
ING, who added that economic activity in the third quarter could fall below
that annual pace.
The data came more than a week after China's surprise move to devalue
its currency, a move that should help its exporting factories. While the
devaluation will likely need more time to have an impact, it points to
Beijing's broader concerns over the slowing pace of growth.
----The preliminary Caixin China Manufacturing Purchasing Managers' Index, a gauge of nationwide manufacturing activity, fell to a 77-month low in August of 47.1, compared with a final reading of 47.8 in July, Caixin Media Co. and research firm Markit said Friday.
A reading above 50 indicates expansion from the previous month, while a
reading below 50 indicates contraction.
The reading was even worse than July's, which was a two-year low,
"indicating that the economy is still in the process of bottoming
out," He Fan, chief economist at Caixin Insight Group said.
Sub-indexes of both new orders and new export orders decreased at a
faster pace in August, and output and employment also fell more rapidly.
More
Oil Poised for Longest Weekly Losing Streak Since 1986 Amid Glut
August 21, 2015 — 12:23 AM BST Updated on August 21, 2015 — 5:20 AM BST
Oil headed for the longest run of weekly declines in almost three decades on
signs the supply glut that drove prices to a six-year low will be prolonged.Futures fell as much as 1.6 percent in New York, set for an eighth weekly drop. The U.S. pumped crude in July at the fastest pace for the month since at least 1920, the American Petroleum Institute reported Thursday. The nation’s stockpiles are almost 100 million barrels above the five-year seasonal average, weekly government data showed Wednesday.
Oil has slumped more than 30 percent since this year’s closing peak in June amid speculation the global surplus will persist. Leading members of the Organization of Petroleum Exporting Countries are maintaining output, while Citigroup Inc. predicts crude may slide to as low as $32 a barrel, a level last seen during the world financial crisis.
“The extent of excess supply is not something that demand is going to grow
into in the near future,” Ric Spooner, a chief analyst at CMC Markets in
Sydney, said by phone. “If we’re going to avoid downward pressure on prices,
it’s going to have to come from production cuts.”
West Texas Intermediate for October delivery lost as much as 67 cents to
$40.65 a barrel on the New York Mercantile Exchange and was at $40.85 at 12:20
p.m. Singapore time. The volume of all futures traded was about 24 percent
above the 100-day average. The September contract expired Thursday after rising
34 cents to $41.14. Prices have decreased 5.2 percent this week.
More
Stocks, oil tumble as grim China PMI sparks growth fears
Oil prices and emerging market assets also took a hammering, as fears of a China-led deceleration in global growth gripped markets. MSCI's broadest index of Asia-Pacific shares outside Japan .MIAPJ0000PUS was down 2.1 percent to its lowest since July 27, 2012.
Markets in countries whose economic fortunes were closely linked to China's growth tumbled. Japan's Nikkei .N225 lost 2 percent and South Korea's Kospi .KS11 shed 2.2 percent.
The mood in markets, already soured by overnight weakness on Wall Street, darkened further on a grim reading of China's factory activity.
The Caixin/Markit manufacturing index showed activity in China's factory sector shrank at its fastest pace in almost 6 1/2 years in August as domestic and export demand dwindled. That, coming on the heels of weaker-than-expected data in July, stoked fears of a slowdown in the world's second-biggest economy.
"Markets are pricing in the worst right now," said Herald Van Der Linde, head of Asian equity strategy at HSBC. Particularly with uncertainty about the Chinese currency, "people are saying this is risk, and we step away from the market."
Shanghai stocks fell 1 percent to below the 200-day moving average for the first time since July 2014. That brought losses for the week to 7.9 and pushed the S&P 500 .SPX to a six-month low overnight. The Hang Seng index .HSI in Hong Kong was down 1.9 percent.
The MSCI emerging markets index .MSCIEF slid 1.5 percent to a six-year low.
U.S. stock futures fell more than 0.4 percent to a six-month low in Asian trade after the Chinese PMI was released. The Australian dollar, considered a liquid proxy for China demand, extended earlier losses, falling 0.4 percent to 73.05 U.S. cents.
More
Well the sword is well and truly falling. Outside of the massed central
bankster’s Plunge Protection Teams, few will want to try catching this sword
today. The news out of China suggests that far from GDP expanding at 7 percent,
China’s GDP may not be expanding at all. The Great Reconnect between the
central bankster’s stock market bubbles and reality looks to be the main
feature of H2 15.
“Liquidation
sometimes is orderly, but more frequently degenerates into panic as the
realization spreads that there is only so much money, not enough to enable
everyone to sell out at the top."
Charles
P. Kindleberger. Manias, panics and
crashes.
At the Comex silver depositories
Thursday final figures were: Registered 55.87 Moz, Eligible 115.20 Moz, Total
171.07 Moz.
Crooks and Scoundrels Corner
The bent, the seriously bent, and the totally
doubled over.
No crooks today just fools and knaves in Canada’s oil patch. At
the time of writing, Canada’s benchmark crude, Western Canadian Select was
trading at a USD 15.55 discount to the USA West Texas Intermediate crude.Canadian Oil-Sands Producers Struggle
Drop in crude prices, high costs challenge whether deposits can be extracted at a profit
Updated Aug. 19, 2015 9:06 p.m. ET
CALGARY, Alberta—Canada’s high-cost oil-sands producers are struggling
as oil prices sink to fresh six-year lows, and even the most efficient drillers
are losing money on every barrel they produce at current prices, according to a
report published Wednesday.
Canadian oil-sands production has grown 30% in the past five years but
the recent price slump has hit producers’ bottom lines and forced them to
suspend development of new projects.
Western Canadian heavy crude costs more to extract than other oil
sources because it must be separated from deposits of sand. It also trades at a
discount to other crudes, in part because of the distance it must be
transported from remote boreal forests in Alberta.
Benchmark West Texas Intermediate oil cost less than $41 a barrel in
Wednesday trading, which although at multiyear lows was still well above the
Western Canadian Select average of around $24 a barrel.
More than half of current oil-sands production can’t break even unless
WTI crude-oil prices rise above $44 a barrel, according to a TD Securities Inc.
report published Wednesday.
While
about 45% of oil-sands production comes from strip mines, the remainder is
tapped via horizontally or vertically drilled wells. Operators pump steam into
these wells to melt deposits of crude embedded in sand using techniques called
steam-assisted gravity drainage, or SAGD, and cyclic steam stimulation, or CSS.
Current prices may no longer allow operators to cover the costs involved in
extracting those deposits of heavy crude, or bitumen.
“Every
single SAGD/CSS player [is] bleeding cash on every barrel of bitumen produced
at the current WTI” spot prices, TD Securities said.
Despite
lower prices, the Canadian Association of Petroleum Producers expects oil-sands
output to continue to grow another 30% through 2020 as multibillion-dollar
projects already under construction start producing. CAPP forecasts oil-sands
volumes will grow by 130,000 barrels a day over 2014 levels to 2.29 million
barrels a day this year as major producers such as Suncor and Exxon Mobil Corp. ’s Imperial Oil
Ltd. subsidiary
increase their output.
More
Even losing $6 per barrel, top Canada oil sands project unlikely to close
Wed Aug 19,
2015 4:55pm EDT
CALGARY, Alberta (Reuters) - Canada's largest synthetic crude project is
not likely to shut down operations, its biggest owner said on Wednesday, even
as a company presentation showed it is losing about $6 for every barrel it
produces.
Syncrude Canada Ltd, a joint venture project in northern Alberta at
which mined oil sands bitumen is upgraded into refinery-ready synthetic crude
has a break-even production costs of C$57 ($43.46) a barrel, according to a
presentation from Siren Fisekci, vice president of investor and corporate
relations.
That is around $6 higher than the current outright price for synthetic
crude, which yesterday settled at $37.37 a barrel. Synthetic crude has been
below $43 a barrel since early August as its discount to benchmark U.S. crude
SHRSYNMc2 widened and global oil prices CLc1 LCOc1 dived.
The cost to COS to produce Syncrude's fully upgraded oil is even steeper
at C$62 ($47.27) a barrel once interest payments, administration, insurance and
other costs are added in, according to the presentation at the EnerCom Oil and
Gas conference in Denver, Colorado.
Canada's oil sands, home to the world's third-largest oil reserves, also
feature some of the highest operating costs and lowest prices in the world.
Benchmark Canadian heavy crude has collapsed to 12-year lows at near $20 a
barrel, raising questions about whether some operators would simply shut down
to wait out the slump rather than carry on pumping at a loss.
Even so, Canadian Oil Sands Ltd COS.TO, the largest-interest owner in
the 326,000 barrel per day Syncrude mining and upgrading venture, said shutting
in production is not something the company would consider.
"From COS' perspective we believe the costs to shut in and later
restart production are very significant. This is the case for most if not all
oil sands projects," said Scott Arnold, director of investor and corporate
relations at COS.
---- Break-even costs include operating
expenses, regular maintenance, capital expenditures, crown royalties and
development expenses and reclamation, according to the COS presentation.
Upgrading bitumen into synthetic crude adds extra expense, but the
unusually detailed breakdown of costs underlines the difficulties facing all
producers in northern Alberta.
More
Essential Oil News: August 17th-23rd
Alberta Oil's weekly roundup of the
top energy news and a look at what's on the horizon
---- Three more years? Moody’s Investors Service is saying that depressed oil and gas prices might last another 36 months, with deeper cuts for the E&P sector looming, following a report that studied 90 energy companies. The Moody’s study lands at a time when Canadian oil prices are dredging lows on par with the 2008 financial crisis. The bond credit rating service says oil could hang low through 2018, averaging $50 a barrel for the rest of the year and maybe reaching $60 in 2017.
Trican in trouble. Shares in Trican Well Service, Canada’s largest
fracking service company, have hit their lowest point in 15 years, despite a
$140-million deal to sell the company’s Russian pressure-pumping unit to
Rosneft. Trican stock lost one-third of its value last week and kept falling
Monday morning, hitting a low of $1.07. The company could breach a covenant
with lenders by the end of next month, causing its debt to become due on demand
and casting “significant doubt with respect to the ability of the corporation
to continue as a going concern,” according to Trican’s second-quarter earnings
statement released Friday.
More
WESTERN CANADIAN SELECT DEFINED
The largest stream of commercial heavy oil produced in Canada is Western Canadian Select, which is a blend of bitumen, conventional oil, synthetic crude oil and condensate. Learn more about this crude oil stream produced exclusively from the oil sands.US government lowers oil price forecast on Iran nuclear deal
The US Energy Information Administration says that the return of Iran could force oil prices even lower
American oil prices are expected to average less than $50 per barrel
throughout 2015 after the US government's official watchdog lowered its
forecast for the next two years.
The Energy Information Administration (EIA) - part of the Department of
Energy - has said that West Texas Intermediate blend crude will trade at around
$49 per barrel in 2015 and recover only slightly to $54 per barrel in 2016.
This is a $6 and $8 revision on its previous forecasts amid an ongoing slump in
prices.
The EIA said: "Concerns over the pace of economic growth in
emerging markets, continuing (albeit slowing) supply growth, increases in
global liquids inventories, and the possibility of increasing volumes of
Iranian crude oil entering the market contributed to the changed
forecast."
More
Solar & Related Update.
With events
happening fast in the development of solar power, I’ve added this new section.
Updates as they get reported. Is converting sunlight to usable cheap AC energy
mankind’s future from the 21st century onwards? DC? A quantum
computer next?
No
update today.
Antony C. Sutton
The monthly Coppock Indicators finished July
DJIA: +88 Down. NASDAQ:
+189 Down. SP500: +116 Down.
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