ADDED TO GOLD (GLD)
January 27, 2012
Added a 5% tranche to gold (GLD) right here at $167.48.
Tags: GLD
NEW TRADE ON GOLD (GLD)
January 26, 2012
A new 5% tranche short on GLD right here at $167.82.
The plan is to build a new short position in GLD starting with the last entry. The plan is to build the position slowly if gold continues to go up all the way to $1825.
Our stop zone will be $1826 to $1865. This is a medium term trade and the risk of loss is high.
Those holding an existing short position in GLD or gold futures may want to adjust their position based on the principles taught in Bullet Proof Your Portfolio seminar or in the alternate, by properly using ZYX Change Method Trade Management Guidelines.
We will be closely following this trade on the ZYX Short Sell Change Alert.
Tags: GLD
The Federal Reserve on Gold and Silver
January 26, 2012
The Federal Reserve on Gold and Silver
The Federal Reserve does not directly comment on gold and silver. For the first time in the living memory, the Fed sent a clear signal to sell gold and silver.
The market participants did not listen and ran both gold and silver up. After the 12:30 pm EST announcement from the Fed, gold ETF [s:GLD] and silver ETF [s:SLV], gold miner ETF [s:GDX] and popular miner stocks such as Newmont [s:NEM], Barrick [s:ABX] and Silver Wheaton [s:SLW] saw explosive buying.
Famed investor Benjamin Graham, said that in the short term the market is a voting machine, but in the long term it is a weighing machine. In other words, in the short run gold and silver moved based on the prevailing consensus opinion, but in the long run the true value of gold and silver will be reflected in their prices.
After the 12:30 pm Fed announcement, gurus were out in full force recommending aggressively buying gold and silver.
“Fed Promises Exceptionally High Inflation For Three More Years,” shouted the headline from a well circulated newsletter.
Previously, the Fed statement promised exceptionally low interest rates until mid-2013. In the 12:30 pm statement, the Fed said that it expects exceptionally low interest rates until late 2014.
The Fed action amounts to QE2.5 (Quantitative Easing).
The foregoing Fed move was interpreted as inflationary and it made sense for gold and silver to spike.
In other words, the Treasury’s printing presses will run harder and longer. Up to this point, gurus and investors were right in running gold and silver up…Read more at MarketWatch
OUT OF GOLD
January 26, 2012
This is the post on ZYX Short Sell Change Alert yesterday at 12:28:
’FED EASES, GOOD FOR GOLD AND SILVER’
The language behind Fed’s statement amounts to QE2.5. This is positive for gold and silver.
Out of the gold ETF (GLD) trade at $161.
Tags: GLD
‘Don’t Be Evil’ Gives Google Possible Antitrust Cover
January 24, 2012
In my article, “Google’s Brilliant New Weapon To Fight Facebook,” I described Google’s new weapon “Search plus Your World”.
Search plus Your World changed Google’s ranking in its search results. Google started emphasizing results from Google+ social network at the expense of Facebook and Twitter.
Now a few engineers from Facebook led by Blake Ross, Facebook’s product director and co-founder of Firefox, along with engineers from Twitter and MySpace, are responding with a new tool called ‘Don’t Be Evil.’ The name Don’t Be Evil is a fairly deliberate dig at Google’s tag line.
The engineers asked how much better social search would be if Google surfaced results from all across the Web. They created a tool that uses Google’s own relevance measure—the ranking of their organic search results—to determine what social content should appear in the areas where Google+ results are currently hardcoded.
According to the developers, this is how the tool works:
If Google decides that it’s relevant to surface Google+ page as a result in any of the areas where Google+ content is hardcoded, the tool searches Google for the name of the Google+ page. Then, the tool identifies the social profiles within the first ten pages of Google results (top 100 results). The ones Google ranks highest — whether they are from Flickr, Twitter, Facebook, LinkedIn, MySpace, Quora, Tumblr, Foursquare, Crunchbase, FriendFeed, Stack Overflow, Github or Google+ — replace the previous results that could only be from Google+.
This tool is offered as a bookmarklet, which is a small bit of code that run…Read more at Forbes.
3 Real Reasons for Google Stock Drop
January 23, 2012
Shares of Google GOOG +0.01% lost about 8% after the Internet giant missed earnings. Google is a cheap stock; the big drop cannot be justified by missing earnings alone.
The three real reasons behind the big drop in Google’s stock price are Amazon AMZN -0.04% , Apple l AAPL +0.06% , and Facebook.
On Nov 3, 2011, I wrote on MarketWatch that “holders of Google stock are well advised to lighten up on bounces…”
I did not have a crystal ball to predict a decline in Google’s stock price; it is simply that the attack on Google’s basic business model was so easy to see.
Ecosystems built by Amazon, Apple, and Facebook are the reasons behind the big decline in cost-per-click (CPC) data. The average cost paid by advertisers per click to Google was expected by analysts to increase 3.2%. It turns out the CPC decreased by 8% both from the previous year’s fourth quarter and from the previous quarter.
The problem facing Google is that its bread and butter is still a basic search.
Amazon has developed its own ecosystem complete with information from its competitors. It used to be that most consumers would start their search for online purchases at Google. Now since consumers know that they can see information from Amazon’s competition on Amazon, the research at The Arora Report shows that consumers are increasingly bypassing Google and going directly to Amazon.
Facebook has been working hard to keep consumers within its own ecosystem. Our research shows that an increasing number of Facebook users are making less use of Google…Read more on MarketWatch
Iranian Buying Unlikely Culprit For Uranium Stock Rise
January 23, 2012
Is Iran buying large quantities of uranium ore or yellowcake?
It is true that Iran has an extensive uranium enrichment program. It is true that Iran is making progress in its nuclear program. It is also true that Iran in the past has claimed that it was forced to resort to secrecy after U.S. pressure resulted in several of its nuclear contracts with foreign governments being terminated.
Yellowcake is a form of uranium concentrate obtained from leach solutions as an intermediate step in the processing of uranium ore. Sources indicate that aggressive buying in uranium stocks is occurring in North America on speculation that Iran is buying uranium. Look at shares of Canada’s Cameco (CCJ), up 30% year-to-date. Similarly aggressive speculation does not seem to be happening on overseas stock exchanges.
In the 1970s, South Africa sold 600 tons of yellowcake to Iran. At that time, with U.S. support, the Shah of Iran had embarked on building as many as twenty atomic power reactors in Iran and signed a contract with Kraftwerk Union (now Siemens) to build a power reactor at Bushehr.
It would appear that the purchase from long ago is the source of some of Iran’s uranium. Iran also has its own uranium mines. One mine is in southern Iran near the Persian Gulf at Gchine. The second mine is in central Iran at Saghand. There have been reports the Saghand mine contains a low-grade ore body of about 553 parts per million uranium…Read more at Forbes
Battle Planning For Apple’s Earnings Report
January 23, 2012
Apple reports earnings on Tuesday, January 24, after the close of trading. The consensus estimate is for $9.97 in earnings and $ 38.73 per share for revenues.
Of course, as usual, breakdown of numbers by product category will drive the price of Apple stock.
Over last three years, I have watched in amazement as analysts dismiss Apple’s projections. The legions of analysts have concluded that Apple has perfected the art of guiding conservatively so that it can beat the projections.
I follow several sets of rigorous principles and rules in my investing and here are a few I focus on prior to the earnings release of every stock in the Arora Report portfolio:
1. Nobody knows with certainty what is going to happen next. Analysts can be diligent and knowledgeable, but in the end it is a guess. A prime example is the recent earnings release by Google(GOOG). Analysts were uniformly bullish, but actual earnings turned out to be significantly under the consensus, and Google stock promptly fell about 8%. A similar situation happened with Amazon (AMZN) in the last quarter.
2. Pay attention to whisper numbers. Traditionally, whisper numbers have been a gimmick by Wall Street to curry favor with clients who pay large commissions. Whisper numbers are unofficial and unpublished numbers. Over the last three years, whisper numbers have been consistently different from the published numbers. What can you do if you do not pay large commissions? There are several services providing whisper numbers. In my experience, none of these services help investors make money…Read more at Forbes
ADDED TO GOLD
January 23, 2012
Image via Wikipedia
Consider adding a 5% tranche to gold (GLD) right here at $163.42.
Those not in the position may start a 5% position here.
New subscribers: Please carefully study Trade Management Guidelines before entering this trade on GLD.
We will continue to follow this trade on the paid subcription Alert service.
Symantec (SYMC) Has More To Say About Norton Hacking
January 19, 2012
I detailed the attack by hackers on Symantec, the maker of popular Norton Antivirus software in my article, “Lords Of Kings Hack Norton Antivirus, Are You Safe?”
Subsequently, Symantec’s take on the hacking was detailed in “Symantec Says Norton Is Safe After Lords of Kings Attack.”
Symantec had stated that the stolen code was 10 years old and did not include the code for its flagship product Norton Antivirus for consumers.
Now Symantec is backtracking. In an email to The Arora Report, Symantec admits,
“Upon investigation of the claims made by Anonymous regarding source code disclosure, Symantec believes that the disclosure was the result of a theft of source code that occurred in 2006. We believe that source code for the 2006-era versions of the following products was exposed: Norton Antivirus Corporate Edition; Norton InternetSecurity; Norton SystemWorks (Norton Utilities and Norton GoBack); and pcAnywhere. Due to the age of the exposed source code, except as specifically noted below, Symantec customers – including those running Norton products — should not be in any increased danger of cyber attacks resulting from this incident.
Customers of Symantec’s pcAnywhere product may face a slightly increased security risk as a result of this exposure if they do not follow general best practices. Symantec is currently in the process of reaching out to our pcAnywhere customers to make them aware of the situation and to provide remediation steps to maintain the protection of their devices and information. Since 2006, Symantec has instituted a number of policies and procedures to prevent a similar incident from occurring.” …Read More at Forbes
Steve Jobs’ School House Dream Comes To Fruition But Not Big News For Stock
January 19, 2012
Steve Jobs had a dream of making traditional textbooks obsolete.
Now Apple (AAPL) has promised to reinvent textbooks. Today Apple introduced iBooks 2. iBooks 2 can be purchased, starting today, from Apple’s iBooks store.
iBooks 2 is rich in swiping and pinching gestures, animations and video. Apple is completing the package with iBooks Author, and a new iTunes U program. iTunes U allows teachers to create online courses and handouts.
iBooks Author is a WYSIWYG app for writing interactive books. The app runs only on Mac. The app allows one button publishing of books to an iPad.
Apple has managed to partner with the giants of the textbook business including McGraw-Hill (MHP),Pearson, Houghton, and Mifflin.
The key question for investors is the impact of this program on Apple stock. The answer based on theZYX Change Method is that iBooks will not have a material impact on Apple stock.
First, the computers at The Arora Report that monitor every trade in Apple stock and are programed to analyze the data to decipher ‘smart money’ actions are showing no accumulation in the aftermath of the announcement. These algorithms were also not showing any accumulation in the days leading to the announcement of iBooks.
Second, Apple is focusing on K through 12. Not many students in this market have iPads….Read More at Forbes
A CONSERVATIVE WAY TO PROFIT FROM FINANCIAL STOCKS
January 19, 2012
Bank of America (BAC), Goldman Sachs (GS), and Morgan Stanley (MS) are rocketing as of this writing. Financial sector, as represented by ETF SPDR Select Sector Fund – Finan (XLF) is one of the top performing sectors in 2012.
Subscribers to ZYX Global Multi Asset Allocation Alert have achieved a 21.25% return to date using a low risk strategy. The strategy included buying the ETF PowerShares Financial Preferred (PGF). Fortunately it is still not too late to buy PGF on dips.
The following is a list of the holdings of this ETF.
| . | HSBC HOLDINGS PLC PFD | A-/A3 | 10.14% | |
| 2. | BANK OF AMER CRP | BB+/Ba3 | 7.42% | |
| 3. | HSBC HLDGS PLC | A-/NR | 5.66% | |
| 4. | ING GROEP NV | BB/Ba1 | 5.38% | |
| 5. | BANK OF AMERICA PD | BB+/Ba3 | 4.67% | |
| 6. | JPMORGAN CHASE | BBB+/Baa1 | 4.48% | |
| 7. | WELLS FARGO CO PREFERR | A-/Baa3 | 4.48% | |
| 8. | CREDIT SUISSE GU | BBB+/A3 | 4.43% | |
| 9. | METLIFE INC | BBB-/Baa2 | 4.30% | |
| 10. | ING GROEP NV | BB/Ba1 | 3.59% | |
| 11. | BARCLAYS BK PLC | A-/Baa3 | 3.44% | |
| 12. | SANTANDER FIN PFD | A-/Baa2 | 3.26% | |
| 13. | GOLDMAN SACHS GP | BBB-/Baa2 | 2.82% | |
| 14. | ZIONS BANCORP PREFERRED STOCK | B/NR | 2.45% | |
| 15. | BANK OF AMER CRP | BB+/Ba3 | 2.34% | |
| 16. | AEGON NV | BBB/Baa2 | 2.22% | |
| 17. | HSBC FINANCE | BBB-/Baa2 | 2.09% | |
| 18. | ROYAL BK SCOTLND | C/B3 | 1.95% | |
| 19. | US BANCORP | BBB+/A3 | 1.85% | |
| 20. | ING GROEP NV | BB/Ba1 | 1.76% | |
| 21. | HSBC USA INC-NEW | A-/Baa1 | 1.73% | |
| 22. | DB CONT CAP TRUST III PFD | BBB/Baa2 | 1.73% | |
| 23. | BANK OF AMER CRP | BB+/Ba3 | 1.71% | |
| 24. | PARTNERRE LTD | BBB+/NR | 1.38% | |
| 25. | ROYAL BK OF SCOT GRP PLC | BB/Ba3 | 1.30% | |
| 26. | AEGON NV | BBB/Baa2 | 1.24% | |
| 27. | DB CONT CAP TR V | BBB/Baa2 | 1.04% | |
| 28. | RENAISSANCERE | BBB+/Baa2 | 1.00% | |
| 29. | PRUDENTIAL PLC | A-/Baa1 | 0.99% | |
| 30. | PRUDENTIAL PLC | A-/Baa1 | 0.91% | |
| 31. | PARTNERRE LTD | BBB+/Baa1 | 0.82% | |
| 32. | PRINCIPAL FINL GROUP PREFERRED | BB/Baa3 | 0.81% | |
| 33. | BARCLAYS BANK PLC PFD STK | A-/Baa3 | 0.76% | |
| 34. | RENAISSANCERE | BBB+/NR | 0.75% | |
| 35. | ING GROEP NV | BB/Ba1 | 0.70% | |
| 36. | AXIS CAPITAL | BBB/Baa3 | 0.66% | |
| 37. | AEGON NV | BBB/Baa2 | 0.65% | |
| 38. | FIRST NIAGARA FIN GRP PREFERRED | BB+/NR | 0.64% | |
| 39. | DEUTSCHE BK CAP | BBB/Baa2 | 0.48% | |
| 40. | ROYAL BK SCOTLND | C/B3 | 0.47% | |
| 41. | AEGON NV | BBB/Baa2 | 0.43% | |
| 42. | BARCLAYS BK PLC | A-/Baa3 | 0.43% | |
| 43. | ROYAL BK SCOTLND | C/B3 | 0.33% | |
| 44. | ROYAL BK SCOTLND | C/B3 | 0.30% |
WEAKNESS IN FINANCIAL CONTROLS AT ZAGG (ZAGG)
January 19, 2012
ZAGG (ZAGG) makes covers and other accessories for mobile devices. This is a highly competitive area where for the most part products are not differentiated.
ZAGG stock continues to levitate because the company issues higly promotional statements to investors. ZAGG’s promotions are helped by a brokerage firm that may have vested interested in promoting ZAGG stock.
The fact that works against our short position is that lots of other astute investors also have a $3 target similar to ours and such investors are short. With abundance of shorts, short squeees occur helping the stock price defy gravity.
On January 16, ZAGG management determined that a material weakness in the company’s internal control over financial reporting existed as of December 31, 2010. ZAGG said that management determined the weakness largely resulted from the company’s rapid growth during the year ended December 31, 2010. Management also determined that no changes to the Consolidated Financial Statements presented in the 2010 Form 10-K were required. On January 17, the Audit Committee of the Board of Directors, concurred with management’s conclusion that the company had a material weakness in the company’s internal control over financial reporting as of December 31, 2010, and determined that neither management’s report nor KPMG’s report regarding the effectiveness of the internal control over financial reporting contained in the Annual Report should be relied upon. ZAGG intends to file an amendment to the Annual Report.
Those in the stock may continue to hold.
Those not in the stock may want to wait for an upspike on short covering before entering a position.
We are closely following ZAGG on the ZYX Short Sell Change Alert Real Time Feed.
Tags: zagg
NEW IDEA ON RENESOLA LTD (SOL)
January 19, 2012
Renesola Ltd, (SOL) is a solar stock. Subsidies from the government in Germany have been a big part of the solar business.
Cuts in solar energy subsidies will be implemented on a monthly, rather than on a half-yearly basis, with a goal of phasing them out for some facilities by 2017, said Germany’s Environment Minister Norbert Roettgen.
Short zone for SOL is $2.49 to $3.11, stop zone is $3.31 to $3.62 and target zone is $0.90 to $1.56.
Please carefully follow ZYX Change Method Trade Management Guidelines. We are starting with a 5% tranche on SOL right here at $2.52. Also putting in 5% tranche GTC limit orders at $2.63, $2.78 and $2.94. The plan is to short more if the stock goes higher.
We will be closely following this stock on the ZYX Short Sell Change Alert.
Apple supplier gold mine
January 17, 2012
There is more than one way to skin a cat. To make money from Apple Inc., it is not necessary to buy Apple stock.
Over the years, at The Arora Report , we have benefitted from the rich gold mine of opportunities that Apple /quotes/zigman/68270/quotes/nls/aapl AAPL +1.28% suppliers have offered. Going forward, Apple suppliers are likely to prove more lucrative, both on the long and short sides, than the stock of Apple itself.
Apple has always been very tight-lipped about its suppliers. All subscribers are required to sign agreements that prohibit them from announcing contracts with Apple.
In a historic release, for the first time ever Apple has published a list of suppliers . We have traded 33 of the companies listed on Apple supplier list. Here are some of the noteworthy insights from the list:
Sony and OmniVision
Apple had been relying on OmniVision Technologies /quotes/zigman/82509/quotes/nls/ovti OVTI -1.27% to supply imaging sensors for cameras in its devices. For a long time there were rumors that Sony /quotes/zigman/197524/quotes/nls/sne SNE -1.69% was heavily courting Apple to supply it with image sensors.
The working assumption on the part of analysts has been that Apple would split its image sensor business between Sony and OmniVision. The speculation turned into reality when a tear down of an iPhone 4S showed an image sensor manufactured by Sony. Clearly OmniVision had lost its monopoly. OmniVision’s stock tumbled.
Interestingly, OmniVision is not on Apple supplier list. The reasonable conclusion is that OmniVision has either lost all of its business to Sony or its business with Apple…Read More at MarketWatch
Steve Jobs’ Failure To See Light In OLED Could Cost Apple
January 17, 2012
Steve Jobs was a hero to me and many, but he was not infallible.
Steve Jobs successfully saw around the corner regarding many technologies, but he made a blunder regarding OLEDs.
What the heck is an OLED? Most people know that LEDs are light emitting diodes. LEDs are semiconductor light sources that are made of silicon.
OLED stands for organic light emitting diode, and unlike an ordinary LED there is no silicon in an OLED. OLEDs use organic compounds which emit light when excited by an electric current.
Ordinary LEDs were introduced in 1962. The work that forms the basis of OLEDs was done in 1960, but widespread commercial applications of OLED technology have come to fruition only within the last year. DuPont (DD) has played a key role in the development of OLED technology.
Apple (AAPL), has succeeded in part by bringing next generation technologies to the masses in a simple elegant way. Displays are a big part of most Apple products. No one can argue that to maintain its leadership status, Apple needs to maintain leadership in display technology. Unfortunately for Apple, Steve Jobs appears to have made the wrong judgment about OLED technology. Jobs had good reasons not to favor OLEDs.
Traditionally it has been difficult to mass produce OLEDs. Further OLEDs structures are inherently unstable. OLEDs were also limited by the life span of organic materials that transferred light. For example historically materials used in blue OLEDs had a life span of 14,000 hours to half original brightness, compared to 40,000 hours for traditional LEDs.
Traditional OLEDs also suffered from color balance deficiencies…Read More at Forbes
QUESTCOR PHARMACEUTICALS (QCOR) CLAIMS STREETSWEEPER IS A FRAUD
January 17, 2012
Questcor Pharmaceuticals (QCOR) believes thetreetsweeper.org is a fraud. Here is an explanation from QCOR:
On January 9 Questcor Pharmaceuticals received a communication from an individual representing herself to be associated with a website identified as StreetSweeper.org. The individual requested that the company provide responses to a series of questions about the company by January 10. Due to management’s schedule, the individual was offered an opportunity to have the questions answered by management on Monday, January 16. Questcor has been unable to determine the exact nature of StreetSweeper.org, its ownership structure, or its revenue sources. The website, thestreetsweeper.org, provides no information on these topics, and standard listings about it are limited and opaque. Based on our examination to date, we believe that the website lists people that it claims are associated with it, one of whom the website and media reports identify as a felon who pled guilty to two conspiracy charges and who later pled guilty to racketeering charges related to stock manipulation, another of whom has the same name as an individual who, according to media reports, was arrested recently for kidnapping and extortion, and another of whom has the same name as an individual who, according to media reports, has been involved in extensive litigation regarding fraud, defamation, and slander.
Tags: QCOR
NEW IDEA ON QUESTCOR PHARMACEUTICALS (QCOR)
January 17, 2012
Caution: This is a very high risk speculative idea for a very very short term trade. Risk of loss is high. Investors should not enter this trade. Only experienced traders should attempt it.
Questcor Pharmaceuticals (QCOR) buy zone is $34 to $36.50. Aggressive traders may also want to take a 5% tranche outside the buy zone right here at $38.31. The stop zone is $32 to $33.48. Target zone is $42 to $46.
QCOR stock has fallen based on alegations from Street Sweeper.
We will shortly publish more on this trade.
Tags: QCOR
Read This Before Your Next Cruise
January 16, 2012
Will the Costa Concordia disaster wake up regulators?
Costa Concordia was supposed to be impregnable, but it capsized off the Italian coast. At least six people died. For background please see my prior article Will Titanic-Like Images From Italy Change Behavior? When the Titanic sank, it left an indelible imprint and regulators acted.
In 1914, nations came together to form treaties concerning the safety of ships. These treaties are known as SOLAS. SOLAS stands for the International Convention for the Safety of Life at Sea.
SOLAS prescribed safety procedures including the number of life boats and emergency equipment and continuous radio watches.
Newer versions of SOLAS were adopted in 1929, 1948, 1960, and 1964. The last significant amendment was made in 1988 to replace Morse code with the Global Maritime Distress Safety System (GMDSS).
Nothing of significance has happened since 1988 even though the cruise industry has totally changed. SOLAS seems to be be taking only small incremental steps. The basic premise behind the regulations has not changed since 1914. Regulators appear to be asleep.
The Costa Concordia Incident is Very Serious
At a time when a vigorous debate is raging about the role of regulation, I will let the reader be the judge as to what is right after reading how far behind the regulations are on the cruise industry.
Big Does Not Mean Impregnable
A long time ago experts thought the Titanic was impregnable. In recent years, experts have contended that the big ships are impregnable…Read More at Forbes
FRENCH DOWNGRADE AND QE3 LEAK DO NOT HELP GOLD AND SILVER
January 13, 2012
S&P today downgraded France and other European countries. Such a downgrade just before the long weekend should have caused about $70 of up move in gold. GLD and SLV not only did not respond, GLD and SLV are now down. Gold futures GCG2 are now down to $1633 and silver futures SIG2 are at $29.50.
Federal Reserve Bank has also leaked its plans on QE3. Based on historical patterns, this leak alone should have caused gold to go up by about $100.
Trifecta of long weekend, French downgrade and QE3 — all supposed to be extremely bullish for gold and silver based on the conventional wisdom, and what do gold and silver do? Gold and silver go down.
It is humbling to see that ZYX Global Multi Asset Allocation adaptive model, i.e., the model that automatically changes based on market conditions continues its streak of correctly calling gold and silver now five years in a row. Let us not be overconfident and be vigilant as nobody bats 100% in the business of investments.
