Der USA Bären-Thread
http://www.bloomberg.com/apps/...20601109&sid=adFsGVxspArw&refer=home
Es bleibt dabei: Im Schnitt liegen die aktuellen Zahlen der neu geschaffenen Stellen um die Hälfte unter dem Vorjahresschnitts.
Homebuilder verkaufen die Häuser, da Milliarden an Schulden drücken, teils unter ihrem Erstellungspreis - mit Rabatten bis zu 40 %.
Homebuilders Liquidate Assets as Threat to Survival Spurs Sales
By Bob Ivry
Enlarge Image/Details
Oct. 5 (Bloomberg) -- When D.R. Horton Inc., the second- biggest U.S. homebuilder, couldn't sell the one-bedroom condominium in San Diego it listed for $349,800, the property was auctioned as a last resort for 37 percent less.
D.R. Horton, with annual revenue of about $11 billion, and Hovnanian Enterprises Inc. now face the worst choice in the worst residential real estate slump since the 1930s. They're selling homes at any price they can get.
``It's desperation time and some companies may not make it,'' said Alex Barron, an industry analyst at Agency Trading Group Inc. in Wayzata, Minnesota. ``At this point in the housing cycle, if you have too much debt, it's hard to get out from under it.''
Homebuilder profits depend on the cost of land, said John Burns, president of John Burns Real Estate Consulting in Irvine, California. Companies can still make money building on land purchased before the 2005 peak of the five-year U.S. housing boom, though price declines of as little as 10 percent might wipe out those profits, he said.
``They are all losing money,'' Burns said. ``They'll talk in terms of gross margin and it sounds like they made money, but they actually lost money because they didn't make their costs.''
`Really Stinks'
The average cost to build a 3,340-square-foot home in the U.S. is $403,925, according to the National Association of Home Builders in Washington. That includes $219,015 for construction costs, $45,507 for the price of undeveloped land, $65,969 to prepare the land for building, marketing expenses of $11,258 and a sales commission of $19,499.
During Hovnanian's ``Deal of the Century'' promotion last month, the company sold a 2,900-square foot five-bedroom, three- bathroom house at the Greenwood Manor development in Royal Palm Beach, Florida, for $525,000, said Kathy Bell, who bought a house with the same floor plan down the street for $575,000 in March 2006.
``It really stinks,'' said Bell, 50, a medical billing specialist who lives in Hovnanian's development in Royal Palm Beach, Florida. ``We were here in the beginning and we didn't get any deals. It's very upsetting.''
Construction costs alone for a house that size would be about $435,000, according to the Florida Home Builders Association. That doesn't include the cost of land, or preparing the lot.
Debt Load
Hovnanian's Web site said that model was available ``starting from $530,000s.'' Hovnanian spokesman Jeff O'Keefe said the company offered discounts as high as 30 percent. O'Keefe said he wouldn't comment on the prices paid for properties sold during the promotion, which ran from Sept. 14 to Sept. 16. Chief Executive Officer Ara Hovnanian had said the company sold 2,100 homes in the three days, more than double expectations.
The 15 largest homebuilders are saddled with $7.75 billion in debt due to be repaid through 2009 and the companies' bonds trade as if they were junk, according to credit-default swap data.
At least five of the top 15 homebuilders by revenue are burdened with too much debt, Agency Trading's Barron said. They are Hovnanian in Red Bank, New Jersey; Irvine, California-based Standard Pacific; WCI Communities Inc. of Bonita Springs, Florida; Atlanta-based Beazer Homes USA Inc.; and TOUSA Inc. in Hollywood, Florida.
WCI will reduce its debt with the completion this year of a luxury condominium tower in Bal Harbour, Florida, said Chief Financial Officer Jim Dietz.
Nationwide Auctions
``We might discount a home 20 percent if the profit margin was 30 percent, but we haven't discounted any properties 40 percent, which some homebuilders are doing to raise cash,'' Dietz said.
Officials from Standard Pacific and Beazer didn't return calls seeking comment.
``We're not focused on growth,'' Ian McCarthy, Beazer's chief executive officer, said at a homebuilding conference in New York on Sept. 18. ``We're very much focused on today and getting through this downturn.''
Beazer has conducted three national sales since June, the latest called ``Smart Homes Savings Event.''
TOUSA withdrew its forecasts for 2007 and 2008 on Wednesday, blaming what it called worsening market conditions, the company said in a statement.
Generating Cash
The company will focus on generating cash to pay down debt, CEO Antonio Mon said in the statement.
TOUSA Vice President for Investor and Corporate Communications Hunter Blankenbaker, reached by phone, said he had no further comment.
Pulte Homes Inc., the third-largest homebuilder by revenue, ran a newspaper advertisement in September in which the Bloomfield Hills, Michigan-based company offered to pay buyers' mortgages and taxes for six months if they bought homes at its developments in suburban Chicago.
Pulte's national sale in June, called ``The Perfect 10 Event,'' was a success, according to spokesman Mark Marymee, who wouldn't specify what profit margins were or how many homes the company sold.
``The builders are very hush-hush about the prices they're selling new homes for,'' said Andres Wilken, who writes the South Florida Housing Bubble blog in Tamarack, Florida.
Plasma Television
Ryland Group Inc., based in Calabasas, California, offered suburban Chicago buyers a free finished basement and a plasma television in a September newspaper advertisement. Miami-based Lennar Corp., the biggest U.S. homebuilder, put 16 homes in Palm Springs, California, up for auction on the Internet in April, selling 11, according to Tony Isbell, president of RealtyBid.com in Rainbow City, Alabama, which conducted the auction.
``A lot of people see it as desperation,'' Isbell said.
D.R. Horton of Fort Worth, Texas, overcame qualms about its image with the Sept. 29 auction of 56 unsold San Diego condominiums. The 200 bidders who filed into a tent on the grounds of the Doubletree Hotel in Mission Valley, California, needed a $5,000 cashier's check to prove they were serious, said Steven Moran, an agent with Century 21 Award in San Diego, who attended with 11 clients.
``I ran the numbers and the condos sold for between 68 cents and 74 cents on the dollar based on the original asking prices,'' Moran said.
Indoor Parking
A condo with an enclosed balcony and an indoor parking spot was originally listed at $349,800 and sold for $220,000, Moran said. D.R. Horton also threw in a washer-dryer and $2,500 toward closing costs, Moran said.
``Adding a credit toward closing costs still allows them to show the highest selling price they can,'' Moran said.
D.R. Horton spokeswoman Jessica Hansen did not return calls seeking comment. The company did not allow members of the media into the auction and has not released sales information.
About 57 percent of builders offered incentives to buyers in August, up from 37 percent in September 2005, the last month of the national housing boom, according to a survey by the National Association of Home Builders.
Fifty-two percent of builders said they cut prices in August, compared with 19 percent in September 2005, the builders group said. The typical incentive was worth about $5,000 and the median price reduction was about 5 percent, said Stephen Melman, director of economic services for the builders association.
Pinched by Discounts
``Our company has intensified the focus on generating cash and keeping inventories low,'' Lennar Chief Executive Officer Stuart Miller said in a Sept. 25 conference call. ``We have rigorously pursued this objective by using incentives and price reductions to sell homes and to backfill cancellations.''
Pinched by competitors' discounts, Los Angeles-based KB Home saw gross margins fall to negative 28 percent in the third quarter from 21.1 percent in the same period last year, the company said in a regulatory filing Sept. 27.
``We anticipate the pricing and margin pressure will continue until the inventory levels of unsold homes is back in balance with demand,'' KB Home Chief Executive Officer Jeffrey Mezger said on a conference call that day.
To achieve a balance between the number of buyers and sellers, homebuilders need to cut current inventories in half, said Michelle Meyer, an economist at New York-based Lehman Brothers Holdings Inc., the fourth-biggest U.S. securities firm by market value.
Meyer's outlook calls for sales to drop until the third quarter of 2008 and for housing starts to decline until 2009.
Insolvency
It would take 8.2 months to sell off the current inventory of unsold new homes, according to the U.S. Census Bureau. The average over the last six years is 4.9 months.
``We would not be surprised to see one or more of the larger homebuilders become insolvent if current pricing trends persist into 2008,'' Mark A. Morgan, senior equity financial analyst with New York-based Rochdale Securities LLC, wrote in a note to clients on Sept. 27.
At least seven publicly traded homebuilders have asked their banks for more lenient lending terms in the past four months, according to New York-based research firm CreditSights Inc. They are Pulte, on June 29; D.R. Horton, on July 6; Beazer, on July 25; Dallas-based Centex Corp., on July 18; KB Home on Aug. 17; Lennar, on Aug. 21; and Standard Pacific on Sept. 14.
``It's important for any business to have positive cash flow,'' said Calvin Boyd, vice president for investor relations at Pulte. ``In this environment, that need is enhanced a bit.''
The five biggest homebuilders by revenue -- Lennar, D.R. Horton, Pulte, Centex and KB Home -- wrote off a combined $3.3 billion in the third quarter on land they own and will not build on or options to buy land they are choosing not to exercise. Shares of the companies have declined between 46 percent and 53 percent this year.
The ``devastating impact'' of those losses could make banks less inclined to grant builders more lenient lending terms in the future, Frank Lee and Sarah Rowin of CreditSights said in a Sept. 26 report.
``The banks are in the drivers' seat and will determine the future of the homebuilders,'' Lee said in an interview.
To contact the reporter on this story: Bob Ivry in New York at bivry@bloomberg.net .
Last Updated: October 5, 2007 00:09 EDT
Merrill Lynch schreibt 4,5 Mrd. $ ab
von Tobias Bayer (Frankfurt)
Die US-Investmentbank Merrill Lynch veröffentlichte eine Gewinnerwartung und teilte mfür das dritte Quartal einen Verlust von bis zu 0,50 $ je Aktie mit. Zugleich entbrannten Spekulationen über einen größeren Stellenabbau.
Verantwortlich für den überraschenden Verlust seien Wertberichtungen bei Collateralized Debt Obligations (CDOs) und faulen Hypothekenkrediten (Subprime). Diese Wertberichtigungen würden vor allem den Geschäftsbereich mit Anleihen, Währungen und Rohstoffen FICC belasten, teilte Merrill Lynch am Freitag mit. Auf der Ertragsseite werde eine Steigerung um 20 Prozent gegenüber dem Vorjahresquartal erwartet, hieß es in der Mitteilung. "Trotz einer guten Performance war das Marktumfeld weitaus schwieriger als gedacht", sagte Merrill-Lynch-Vorstandschef Stan O'Neal. "Wir sind mit unserem Ergebnis bei strukturierten Produkten und Hypotheken enttäuscht." Die Aktie von Merrill Lynch starte mit einem Plus von 0,6 Prozent in den New Yorker Handel. Quartalszahlen wird die Bank am 24. Oktober vorlegen.
Mit Merrill Lynch hat ein weiteres Kreditinstitut heftige Abschreibungen vorgenommen. Zuvor hatten schon die UBS, Citigroup und die Deutsche Bank Wertberichtigungen in Milliardenhöhe vorgenommen. Die Deutsche Bank schrieb 2,2 Mrd. Euro ab. Die UBS hatte einen Fehlbetrag von 4 Mrd. Franken bei Festzins- und Währungsgeschäften erlitten, einer Sparte des Investmentbanking. Die Verluste entstanden bei Subprime-Engagements, wo die Bank auf direkte und indirekte Engagements 3,7 Mrd. $ abschreiben musste. Hinzu kamen Abschreibungen von 400 Mio. $ auf Kredite an Beteiligungsgesellschaften.
Die Vertrauenskrise an den Finanzmärkten macht den Banken schwer zu schaffen. Versprochene Kredite für Großübernahmen finden derzeit an den Märkten keine Käufer und müssen daher in den Büchern neu bewertet werden. Zudem liegt der Hypothekenmarkt wegen der abgestürzten US-Häuserpreise am Boden. Insgesamt sind wegen der Krise in der Finanzbranche zehntausende Arbeitsplätze abgebaut worden.
Spekulationen über Jobabbau
Die Nachricht der Rekordabschreibung dürfte Spekulationen über einen Stellenabbau bei Merrill Lynch anheizen. In Berichten des Fernsehsenders CNBC war am Donnerstagabend von Gerüchten die Rede, dass rund 15 Prozent der Stellen im Anleihe-Geschäft auf der Kippe stünden. Dieser Bereich ist besonders stark von der Krise an den Kreditmärkten betroffen. Analysten erwarten hier im dritten Quartal milliardenschwere Abschreibungen im Zusammenhang mit Hypotheken-Papiere und Kreditzusagen für Großübernahmen.
Eine Merrill-Sprecherin lehnte eine Stellungnahme zu den Berichten ab und sprach von Marktgerüchten. Doch auch Branchenexperten sagten, wegen der Milliardenverluste im Anleihegeschäft seien Entlassungen wahrscheinlich. "Da werden vermutlich Köpfe rollen", sagte Bill Fitzpatrick, Analyst bei JohnsonFamily Funds. Auch sein Kollege Richard Bove vom Institut Punk Ziegel & Co erwartet Einschnitte im Fixed-Income-Segment: "Ankündigungen von Stellenstreichungen werden kommen", schrieb er in einem Kurzkommentar.
FICC-Chef Semerci gefeuert
Auslöser der Spekulationen sind die jüngsten personellen Konsequenzen, die Merrill aus der Krise gezogen hat. So hatte sich das größte US-Brokerhaus, dessen Quartalszahlen in den kommenden Wochen erwartet werden, am Mittwoch von Osman Semerci getrennt. Dieser verantwortete bislang das Anleihe-, Devisen- und Rohstoffgeschäft des Unternehmens. Auch der für strukturierte Kreditprodukte zuständige Manager Dale Lattanzio nahm seinen Hut. Zu den Hintergründen wurde offiziell nichts bekannt. Aus mit der Sache vertrauten Kreisen hieß es aber, Semerci sei entlassen worden.
Quelle: www.ftd.de
Meldung:
Freitag 5. Oktober 2007, 16:14 Uhr
Fairfax (aktiencheck.de AG) - Der amerikanische Baukonzern Brookfield Homes Corp. (ISIN US1127231017/ WKN 165268) musste im dritten Quartal einen deutlichen Rückgang beim Auftragseingang hinnehmen.
Wie der Konzern am Freitag erklärte, lag der Auftragseingang im dritten Quartal bei insgesamt 130 Eigenheimen, nach 264 im Vorjahreszeitraum. Als wesentliche Ursache für den deutlichen Auftragsrückgang wurden die anhaltend unsichere Lage auf dem US-Immobilienmarkt sowie der anhaltende Preisverfall bei Wohnhäusern genannt.
Bis Ende September lag der Auftragsbestand bei 890 Bestellungen, wobei der Konzern für das Gesamtjahr 2007 einen Gesamtauftragsbestand von knapp 1.000 Wohnhäusern erwartet.
Die Aktie von Brookfield notiert aktuell mit einem Plus von 1,03 Prozent bei 20,52 Dollar.
wenn bei gewinnwarnungen es weiter hoch geht ...dann weiss der markt mehr als ich..
und der markt hat auch noch ben hinter sich....und ich als baer stehe ganz allein da
also müssten alle firmen eine massive gewinnwarnung abgeben, dann überspringen wir den crash u. gehen sofort wieder in eine neue hausse über.
mfg
ath
Verluste der Banken
Schlechte Absatzzahlen der US- Autohersteller
Haben wir etwas vergessen? ;-)
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Na, dann muß es ja stimmen. Sind ja die Experten ganz nah an Volkes Ohr.
Dann geh ich jetzt mal massiv long.
05.10.2007 16:50
US-Rezessionsgespenst verscheucht
Die US-Hypothekenkrise hat am Arbeitsmarkt nicht die befürchteten Spuren hinterlassen. Im September wurden mehr Jobs in den USA geschaffen als erwartet. Eine weitere baldige Leitzins-Senkung wird damit unwahrscheinlich. (...)
Volkswirte reagierten erfreut. Die Helaba zeigte sich besonders von der Aufwärtsrevision des Vormonats "positiv überrascht". Die Warnungen vor einer Konjunkturabschwächung seien "überflüssig" gewesen, hieß es bei der DekaBank. Nach den August-Daten hatten Anleger ein Abgleiten in eine Rezession befürchtet. (...)
http://boerse.ard.de/content.jsp?key=dokument_254592
Just kiddin'
Isc.
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Kuckuck ist Vogel des Jahres 2008
(AFP) - Der Kuckuck ist der Vogel des Jahres 2008. Der scheue Zugvogel, der seinen Namen seinem eingängigen Ruf verdankt, ist nach Angaben von Umweltschützern in Deutschland vielerorts verschwunden, da sein Lebensraum verloren geht. (...)
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Set Up for a Reversal Down
By Rev Shark
Street.com Contributor
10/5/2007 10:37 AM EDT
The "all news is good news" action continues. I suspect this market would have been up no matter what the jobs report had been this morning as there is obviously lots of folks anxious to buy.
We are set up quite well for a reversal on this gap open and I'm watching for signs that one will develop. I'm taking profits into strength where I can and am not making too many new buys.
The wild speculation in China stocks continues, but it is becoming a bit more selective. A number of the stocks are seeing some pressure while new names are being jumped on as questionable stories of China connections makes the rounds.
Traders are still quite hungry for this wild speculative action and they will continue to create it for a while. However, be careful -- some of these stocks are starting to lose their momentum.
Looks Like a Short Squeeze
By Rev Shark
Street.com Contributor
10/5/2007 11:49 AM EDT
So far I'm dead wrong about a reversal kicking in. In fact, it looks like a short squeeze is kicking in as we fail to reverse and the bears give up on the fade trade.
I don't want to fight this sort of momentum, but I am inclined to take profits into it rather than buy new positions.
Als Bär sollte man weiterhin aussen vor bleiben, auch wenn die Chance am "Top" zu shorten mal wieder verlockend ist. Gut möglich, dass nun stattdessen die nächste Kursrakete gezündet wird.
Wenn die Experten zum Einstieg blasen weil angeblich alle Vorsicht überflüssig war wäre ich nun im Gegenteil noch zurückhaltender als vorher. Die Rahmendaten sind weiterhin schlecht und der Arbeitsmarkt ist nun mal ein nachlaufender Indikator. Im Artikel von Comstocks (s.o.) wird ausserdem beschrieben, dass selbst ein Zuwachs von 230.000 Stellen dem Rezessionsszenario nicht widersprechen würde.
Seht es mal positiv: Jeder Punkt Plus macht das Shorten billiger wenn die Kurse kippen.
October 05, 2007
HUI Bull Seasonals
by Adam Hamilton
As the nights lengthen, the leaves change color, and the chill winds of autumn begin to blow, the seasons are on everyone's mind this time of year. But it is not only these natural seasons driven by orbital mechanics that are changing. The most bullish seasonal time of the year for the precious metals and their miners is nearly upon us.
The mere fact that precious metals have seasonal tendencies is often surprising to traders. Everyone can understand why a soft commodity like wheat is seasonal. Due to the Earth's axial tilt and its annual revolution around the sun, there is one primary growing season in the northern hemisphere. Thus wheat supplies typically peak just after harvest before shrinking until the next harvest. Since the celestial seasons affect supply, and supply and demand drives prices, the Earth's seasons play a major role in wheat price trends.
Interestingly it is these same orbital mechanics that drive gold seasonality. The vast majority of the world's population lives in the northern hemisphere, so the importance of the autumn grain harvest is universal. In places like Asia with deep cultural affinities for gold, farmers often invest some of the profits from their annual harvests in gold. Harvest leads to big global surpluses of capital and some of these funds migrate into gold.
There are other cultural factors that also accentuate gold's seasonal strength this time of year. Indian wedding season is one of the most important. In India, the world's biggest gold consumer, little distinction is made between jewelry and investment. When brides get married, their families give them intricate 22-karat gold jewelry to help secure their financial futures. The most popular time to get married is during the autumn festival season. Thus around 40% of India's total annual gold demand tends to arise in October and November.
I realize this seems quaint to our Western minds, but we too have similar behaviors woven deeply into our own cultures. Our own holiday shopping isn't all that different. A large fraction of our total spending occurs between Thanksgiving and Christmas, a single month that often makes or breaks the entire year for retailers. Spending is high worldwide as the year wanes and people start feeling closure on their financial year. Even in the West, some of this holiday spending funnels into gold jewelry for loved ones and bullion for investment.
So world gold demand is indeed highly seasonal, for a variety of reasons. Understanding this is important as we traders can increase our odds for success if we trade with these seasonal trends. But do these gold seasonals affect the gold stocks? Each time I write about gold seasonality I receive a blizzard of e-mails asking how pure HUI seasonality looks. Does this flagship unhedged-gold-stock index follow gold's seasonal lead?
In order to address this excellent question, I applied the same methodology I have used for gold seasonals to the HUI itself. This was described in depth in my latest essay on gold seasonals, but here are the highlights. Unlike typical multi-decade futures seasonality studies that span bull and bear alike, I am only interested in how HUI seasonality has unfolded within this bull market. Past behavior within bears is probably not all that relevant to future behavior within this bull. So all of these charts only extend back to 2000 when today's bull was born.
To build these charts, each calendar year's daily closing data was individually indexed. The first trading day of each year was assigned a value of 100 and every subsequent day of that year was indexed off of it based on absolute percentage gain. All of these individual annual indexes are then date-matched and averaged together. The result, when plotted, shows the seasonal tendencies of the HUI within its bull market to date.
Since the average of annual indexing doesn't show how dispersed the underlying data actually is, standard-deviation bands are also rendered. The tighter the bands, the closer the underlying annual indexed numbers were before they were averaged. The closer the pre-average data, the higher the probability the seasonality in that region of the chart will stay relevant going forward. Closer means it isn't just a statistical anomaly created by a couple of extreme outlying years. The small inset charts show the full standard-deviation bands.
While this essay is on the HUI bull seasonals, we still need to start with gold bull seasonals since the gold price is the primary driver of the gold stocks. This chart is updated from my July essay on gold seasonality. The primary question that led to this thread of research was whether gold stocks tend to follow gold's seasonal lead. So before we get into HUI-specific seasonals, we must first have a clear picture of gold's.
Gold tends to have three big seasonal rallies every year. Provocatively for traders today, its largest by far tends to start in mid-October and then power higher into early February. This reflects the fabled autumn buying season for gold. General Asian demand, Indian wedding season, Western holiday buying, and other regional factors lead to a major surge in gold demand and often gold prices this time of year.
Gold traders know this well and usually really add to their long positions in anticipation of this tendency. While gold seasonality certainly doesn't guarantee the gold price will comply every year, it sure increases the odds. Seasonality is like a tailwind on top of the other fundamental, technical, and sentimental factors driving gold. When these other factors are already bullish, strong seasonality ramps up the probabilities of imminent gains even further.
This chart has been especially intriguing lately. Note above that gold tends to start rallying in late August, climb even higher in the first half of September, and then really shoot higher in the second half of September. Sound familiar? This was exactly what happened over the last six weeks or so. But since this chart includes data to the end of September 2007, perhaps gold's awesome performance lately unduly skewed this chart.
Thankfully this is easy to test. In my July essay on gold seasonals, the data only runs to the end of June. Check out the first chart in that summer essay. Although a bit less extreme than the chart above, gold still had the exact same tendency to do what it did from mid-August to late September. Its seasonal patterns then and now are virtually identical. So prior to September 2007, gold already had a well-established tendency to rally modestly in the first half of September and then shoot higher in the second half.
This ought to disturb you as it calls into question today's orthodox perceptions of last month's gold trading action. Almost everyone today assumes that gold rallied because the Fed cut rates while the dollar hovered on the edge of the abyss. And I agree that these factors are almost certainly the primary causes of gold's excellent month. But even last summer, the gold seasonality chart already showed a crystal-clear tendency for a very similar September price pattern to occur even without any Fed machinations.
So would gold have rallied modestly initially last month and then shot higher in the second half even without the Fed? Probably, as it sure has the tendency to do just that regardless of the Fed. Perhaps traders today should be attributing more of gold's September to usual seasonal buying and less to the Fed's throwing the dollar to the wolves. Maybe all the Fed really did for gold was modestly amplify already established seasonality.
Another interesting revelation from the July chart, which is even more pronounced here, is gold's seasonal tendency to pull back rather sharply in early October. This, of course, is exactly what we witnessed this week. The déjà vu is pretty uncanny. After this initial sharp pullback, gold gradually grinds lower and consolidates for a week or two. This early October consolidation is extremely important because it offers traders our last chance to load up on long positions ahead of the biggest seasonal rally of the year.
And gold's tendencies right now are even more relevant because the standard-deviation bands of its seasonality are fairly tight right now. It wasn't a couple of extreme annual results that distilled down to today's seasonality, but seven individually-indexed years with a rather narrow clustering of indexed levels this time of year. This renders today's narrow window of time in which to add long positions all the more important.
So back to our original question, does gold seasonality drive HUI seasonality? Absolutely! Take one more look at the gold chart above and then quickly scroll to this HUI specimen. The HUI's big seasonal rallies, as well as its seasonal weak spells, mirror gold's incredibly well. If I cut off the left axes that map the magnitude of these indexed moves, these two charts would be virtually indistinguishable to the casual eye.
When comparing these charts, realize that the HUI's goes to 135 indexed while gold's only goes to 114. So while they look very similar, with major peaks and troughs throughout a typical seasonal year matching closely, the HUI amplifies gold's volatility considerably. For example, in January and February the HUI tends to go from 100 to 108 indexed while gold only tends to move from 100 to 103.
This HUI leverage to gold is the only reason why anyone invests in gold stocks. If the far-riskier gold stocks only tended to pace gold's gains, then it would make a lot more sense to own the much-less-risky physical metal itself. But since gold stocks have amplified gold's gains on the order of 5.3 to 1 in their respective bulls to date, betting on the stocks is well worth their additional risk.
Mirroring gold, the HUI also has three big seasonal rallies each year. In indexed terms, the one ending in May tends to rise 16 points and the one ending in September 18 points. But it is the third, and largest one, that is most interesting today. It tends to start powering higher in mid-October and climb up 25 indexed points by February! It shouldn't be surprising that the biggest seasonal HUI rally of the year follows the biggest gold rally.
It is gold that drives the gold stocks. Higher gold prices mean higher profits for mining the metal. Higher profits ultimately translate into higher stock prices. Since the price of gold in a secular bull tends to rise faster than the costs of mining the metal, even during a commodities bull, it is the gold price that has the single largest impact on worldwide gold-mining profits. So if gold is going to be seasonally strong, the HUI should benefit tremendously as traders anticipate higher profits.
Now this seems simple and obvious, but an increasingly popular heresy disputes the truth in these charts. Due to a few isolated episodes in 2007 where gold stocks fell with the general stock markets, many PM traders believe that it is the general stock markets that drive the HUI, not gold. It is now fashionable to believe that no matter what gold does, if general stocks enter a bear market the HUI will be dragged down with them.
This concern is not new, and I have researched and written a great deal about it over the last seven years. While the HUI can certainly fall with general stocks for a few days during aggressive high-fear selling, overall it thrives through stock bears. From early 2000 to early 2003, the S&P 500 lost 49% of its value at worst. Meanwhile the HUI soared 322% higher at best within this bear. The HUI even rose within each of its three most vicious downlegs. PM stocks are classic alternative investments not correlated with general stocks.
These HUI seasonal charts help illuminate this general-stock-bear concern from another angle. The three bear years in the early 2000s that slaughtered general stocks are also included to arrive at this seasonal average. Thus these HUI bull seasonals transcend general-stock bulls and bears alike. While gold stocks can be temporarily distracted from time to time, they always follow gold in the end since it drives their profits.
In my gold seasonality studies, I also take a look at calendar-month seasonality. Instead of indexing calendar years, calendar months are indexed. Each month of each year is started at a level of 100 with the rest of the days indexed off of it. Then all the Januaries are averaged together, all the Februaries, etc. I was curious on how the HUI tends to perform within calendar months in this bull, so I did the same analysis here. Realize that each calendar month is a discrete individually-indexed unit, so one month does not connect to the next.
This additional perspective on seasonality is interesting. It closely follows the annual-indexed approach of course, but by distilling the data in a different way it also illuminates additional seasonal tendencies. The HUI's best calendar months of the year in its bull to date have tended to be August, November, and May. And November is rapidly approaching, a great reason to deploy more capital on this October weakness.
Now when I first saw this chart this week, I had to chuckle at August being the strongest month in this bull to date. On average, the HUI has soared almost 8% in Augusts since 2000. November and May have come close to this performance on average, but August still wins out. Obviously this past August didn't cooperate though. The index fell 5% in a month that was marked by a brutal mini-panic in the middle.
This discrepancy between what was expected and what actually happened helps illustrate some of the key limitations of seasonality for traders. Seasonality is simply a tendency, a bias for a price to move in a particular direction at a particular time of the year. But seasonality isn't always a driving factor. Technicals and sentiment, especially near extremes, can easily override seasonality and drag the HUI off of its expected seasonal vector.
August 2007 was a really unique month. Sentiment for gold stocks was horribly bad after they had consolidated for 15 months straight. In the middle of the month worries about the general stock markets temporarily spilled over into gold stocks and drove a mini-panic as many traders capitulated. For our subscribers, I explained this whole chain of events in great depth in the September issue of Zeal Intelligence.
Fear soon got out of hand as intense selling dominated gold-stock prices and they plummeted. This easily overwhelmed the usual strong August seasonals. But check out July in this chart. July tends to look like August did this year. Yet in 2007 July witnessed a 5% gain in the HUI. The usual mid-summer selling in the HUI that tends to hit in July came a month later this year in August. And after that the usual subsequent rally was compressed into September. This helps to illustrate just how elastic seasonal tendencies can be.
All traders who consider seasonality in their decisions would do well to ponder this. Seasonality doesn't offer precise timing, just general probabilities. So while gold and the HUI tend to start rallying strongly again in mid-October, if their rallies start a week or two early or late it doesn't negate the seasonal tendencies. Since seasonals aren't precise and they are so easily overridden by technicals and sentiment, I think seasonals should never be used as a primary trading tool.
But seasonals excel at increasing the odds for success of trades made for fundamental, technical, and sentimental reasons. Gold continues to be a great fundamental buy today for a wide range of reasons, including the struggling US dollar. In real inflation-adjusted terms, its price isn't even close to looking long-term overbought yet. And it hasn't yet stretched far enough above its 200-day moving average to signal the end of this upleg. Gold's sentiment is certainly not euphoric either since few have been really excited about it since May 2006. Together these factors might give us a 75% chance for success for a long trade today.
But when bullish seasonals are added on top of these primary drivers, they create an additional probability tailwind. With gold's seasonal tendency to start its strongest rally of the year in the next couple of weeks, perhaps today's probability for success rises to 85%. Although these absolute numbers are guesses, the relatively small impact of seasonality compared with that of primary drivers is not. So please realize seasonality is only relevant as a secondary indicator if primary indicators are already lining up to drive a trade.
At Zeal we are constantly studying gold and the HUI from fundamental, technical, and sentimental perspectives. Today the metal and stocks look to be in a very bullish position due to these primary drivers regardless of seasonality. But with both gold and HUI seasonality shifting massively bullish in the coming weeks as well, our odds for success on long trades climb even higher. These seasonal tailwinds are very welcome.
So in response to all the bullish fundamental, technical, sentimental, and seasonal factors that are converging today to launch gold and its miners much higher, we are aggressively adding positions in elite PM stocks. If seasonals prove true to their bull-to-date precedent, we have a narrow window here during this early-October consolidation to deploy ahead of the next upleg. If you want to join us in this probable highly-profitable ride higher, please subscribe today to our acclaimed monthly newsletter and mirror our new trades.
The bottom line is HUI bull seasonals track gold bull seasonals closely, which is no surprise for students of the markets. While not a precise primary indicator for upcoming HUI performance, when seasonals match with primary indicators the odds for success in new trades rise considerably. Today we are in such a situation, when bullish HUI seasonals match and buttress bullish HUI fundamentals, technicals, and sentiment.
Provocatively both gold and HUI seasonals expected this week's sharp pullback in early October followed by a couple of weeks of grinding consolidation. But once this short-lived buying opportunity ends, the seasonals project the start of the strongest gold and HUI rallies of the year. So if you have been waiting to add new PM-related trades, you should consider seizing this narrow window of opportunity.
http://www.safehaven.com/article-8554.htm
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By Rev Shark
Street.com Contributor
10/5/2007 1:21 PM EDT
The most interesting thing about the market action today is that it is taking place even though the jobs report this morning supports the idea that we won't see another Fed interest rate cut in the near future.
In fact, a speech by Fed member Donald Kohn this morning strongly hints that "one and done" may indeed by the situation.
Kohn indicates that the cut was intended to unblock tighter credit conditions. He believes that it has apparently worked, and that the Fed must stay vigilant about inflation and should undo the cut to some degree [= +0,25 %? - A.L.], if needed for price stability.
Despite these obvious clues that maybe we won't see some more cuts, the market is rampaging higher on excellent breadth. The buyers just don't care about logic right now. They see strong action and are worried about being left out. They buy aggressively because everyone else is.
We are running on pure and simple momentum right now. There is no strong fundamental reason for the market to be so strong at this point, especially with the Fed unlikely to help out matters. Technically, we are in an uptrend, but extended, and that doesn't suggest that we have good technical entry points.
The million-dollar question is what will get this market focusing on something other than the very strong short-term momentum. I don't know the answer to that, but we'll know it when we see it. For now it's all bulls.
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Trades:
Mein Short auf SP-500 ist durch einen sehr engen Stop gefallen. Die Dollars (EK 1,4152) halte ich weiter, weil nun ja die Fed offenbar nicht mehr senkt und Kohn sogar wieder von einer Zinserhöhung spricht.
Ich selbst sehe die Arbeitsmarktdaten nicht als Frühindikator für die wirtschaftliche Entwicklung. Diese Indikator zeigt sich sowohl beim Aufschwung als auch beim Abschwung stark verspätet, von dieser Datenqualität mal abgesehen.
Das bedeutet jetzt nicht, dass ich mit einer baldigen Rezession rechne. Ich rechne mit einer immer deutlicher werdenden Inflation und noch bösen Überraschungen aus dem Finanzsektor.