Saturday, January 12, 2013

Volume Off the High for 1/11/13

Just a couple of new volume off the highs for the last trading day of the week. First there is UHT, which has been showing signs of distribution at the top here. There is no news here and the stock may resume its climb after the seller (probably a large institution) clears out. Then again, the seller may be showing his or her hand. This is one to watch. As for WPI, the stock traded down on a recommendation downgrade by Goldman.

High Volume High 1/11/13

A few high volume highs for the last trading of the week. The first is DK, which is up on no apparent news. This could be a short squeeze move, or it could be someone knows something. There is also VCBI, a Virginia banking concern that is apparently putting itself up for sale. The stock is trading at 1.3x book or 1.4x tangible book. Now I have looked at the take out multiple for banks in some time- so take this next comment with a grain of salt- but I do remember take-out multiple for banks North of 2x tangible book. There still could be some upside to VCBI. I am going to have to check on the more recent multiple. Last, there is GGC.The stock was up after shareholders approved the a new stock offering to fund an acquisition.

Friday, January 11, 2013

The History Money, Banking, and Federal Reserve

This comes via the Mises Institute.

All that Glitters- Twiddling Thumbs Edition

Sometimes the wait is unbearable, but I keep reminding myself the timing is not right. First off, the timing models remain in a moderate buy zone. I would much prefer a stronger buy indication before jumping in feet first. A moderate buy on the timing models would not be a problem if the markets (be it gold trading or the gold mining stocks) have shown a sign of significant strength. They still remain weak on the upside. This leaves me recommending to remain on the sidelines awaiting a better entry point, or at the very least a slow buy in on weakness with a small percentage of investable assets.

As stated, the timing models remain in a moderate buy range. One caveat to this assessment is that I am modeling a slight pullback in the money supply for the first two weeks of 2013 (remember, money supply is reported with a two week lag and I estimate the current money supply figures using a combination of seasonal factors, growth rates, trend growth, and Federal Reserve's balance sheet.) This pullback is based mainly on seasonal factors, which shows a draw down in the money supply in the first weeks of the year, only partially offset by Fed's quantitative easing program. If the Fed's asset purchase program more than offsets the seasonal factors, then the model results may be underestimated. With that said, here are the current timing models.

3-Month Model, Current estimate -1.3

1-Year Model, Current estimate -1.4

6-Month Model, Current estimate -1.4