Another Region Seeks To Join Russia Most Likely Moldova's Transnistira Region

"Who is next" in the great annexation scramble ? 

The most likely region to enter the USSR 2.0 next is Moldova's Transnistira region, where in a 2006 referendum some 97% of the population had voted to become part of Russia.

Moments ago this appears to have been confirmed after the president of the territory said the following, via Bloomberg:

• TRANSNISTRIA SEEKING TO JOIN RUSSIA AFTER WINNING INDEPENDENCE
• MOLDOVA'S TRANSNISTRIA REGION SEEKS TO JOIN RUSSIA: PRESIDENT
• TRANSNISTRIA PRESIDENT SHEVCHUK SPEAKING TO REPORTERS ON RUSSIA

One thing is certain: the "west" will not be happy as the Russian territorial expansion continues.

Stock Markets Bubbles and Parabolic Slope Theory By Dan Stinson

Is there a Stock Market Bubble? 

Parabolic Slope Theory

Firstly, what is a bubble from a technical standpoint? A bubble is a parabolic advance in a market or stock where the price appears to move straight up without normal corrections. The corrections or pullbacks are small, sending the stock or index straight up. Greed and euphoria are high and complacency is low. The higher the market or stock moves, the bigger the bubble and the more pain on the way back down. As we have seen, bubbles can occur in stocks, stock markets, commodities, debt, Real Estate and derivatives. 

Parabolic advances can't be sustained and always end poorly, with the price usually falling below the starting point of the parabolic move. What goes straight up, comes straight down faster and usually further. So, to determine if a bubble is in play, we need to analyze the advance to determine if it has gone parabolic. We know that parabolic advances always fail, so a parabolic advance in a market where it is questioned to be a bubble, will also fail or burst. [Parabolic advance = Bubble]

I have a number of charts illustrating past and current bubbles and have identified many common aspects of a bubble, which we have named as Parabolic Slope Theory (PST), with more information coming. For now, we can see that bubbles have an average parabolic slope of 70 degrees, but can range from 60 to 85 degrees depending on the starting point of that slope. We can sometimes see a 60 degree slope when starting at the beginning of the rally, but can see a 70 degree slope at the start of the parabolic advance. The slope becomes steeper as the rally matures and can reach 80 degrees or higher near the top. This 80 degree slope on some charts can be counted as as wave (5) up.

The first chart illustrates three bubbles for the S&P500, starting with the 2000 bubble with a slope of 68 degrees. The slope for the 2007 bubble ran at 60 degrees to the top. The current rally is running at an average of 70 degrees and has moved further and steeper than the parabolic advance from 1995 to 2000. It would appear that the markets are stronger now than in 1999, but it sure doesn't feel like 1999. We can also see that the parabolic advances into the bubble tops lasted for about 5 years, with the declines taking 2 years. We can't really utilize the 70 degree slope rule to determine where the top is in a bubble, but if we see a pullback and then see the parabolic advance turn higher at an 80 degree slope or more, then we could assume that the final wave up is in play. We also know that the markets are currently in the 5th year of this rally where the previous cycles suggest a top is due. Just knowing that it is a bubble will help us make the right decisions before the bubble bursts. Our previous newsletter adds insight on the timing for a top with the DOW and Nikkei relationship.

S&P 500 Parabolic Slopes and Bubble Tops 2000 - 2007 - 2014

The markets are in another smaller bubble, although the S&P500 chart would suggest that this bubble is larger than the 2000 bubble. This bubble call is supported by our 70 degree slope rule and many stocks that have also gone parabolic and are in the 70 degree range.

So, the next time we want to determine if a bubble is in play, we can
1: examine the slope of the advance and determine if it is parabolic move.
2: examine the corrections and determine if they are small. This will also be determined by the slope. If the slope is steep then the corrections will be small.
3: determine if greed and euphoria are high and complacency low.

This chart is only a guide so that you can follow the action and monitor the expected outcome. The action could play out exactly as illustrated or it may need minor adjustments as we follow it through.

CME Group Reducing Margins For Gold, Silver, Platinum

CME Group is lowering margins for gold, silver and platinum futures as of the close of business on Friday.

The exchange operator, in a notice issued late Thursday, said the changes are “per the normal review of market volatility to ensure adequate collateral coverage.” Margins act as collateral for a trade in a futures contract.

The “initial” margin to establish new speculative positions in the main Comex 100-ounce gold futures contract will decline to $7,150 from $7,975. The “maintenance” margin for existing speculative positions, as well as all hedge positions, will decline to $6,500 from $7,250.

For the main Comex 5,000-ounce silver contract, the initial margin for speculators will drop to $9,900 from $11,000. The maintenance margin for speculative accounts, as well as all hedge positions, will be reduced to $9,000 from $10,000.

Meanwhile, the initial margin for speculators in the Nymex platinum contracts will drop to $2,750 from $3,025. The maintenance margin for speculative accounts, as well as all hedge positions, will decline to $2,500 from $2,750.

CME Group is also lowering the margins for the smaller-sized gold and silver contracts. In addition, changes in margins were announced for a number of other markets, including coal, crude oil, ethanol, iron ore, hot rolled steel and freight.

The full CME Group notice can be viewed at this link.

April 2014 Important Data And Holidays

The Market Is Now Exactly As Overvalued As It Was At The Last Bubble Peak S&P 500

According to this chart from JPM the market's forward P/E ratio now is precisely 15.2x. What was it at precisely the last bubble peak on October 9, 2007? 15.2x. 

Everyone knows what happened next.

Zambia miners can’t afford 29% power price hike — chamber

ZAMBIA's EXPORT TREE

 Zambia’s copper and cobalt producers won’t be able to afford the 29% increase in the electricity tariff approved by the state regulator earlier this week, which will affect mining output, the country’s Chamber of Mines warned Friday.

The price hike in Africa’s second largest copper exporter after the Democratic Republic of Congo follows a series of standoffs pitting mining companies against the Zambian government, in a growing trend across the continent, as resource-rich states move to extract more revenues from global miners.

In a statement, Chambers of Mines of Zambia chief executive, Maureen Dlamini, said the increase didn’t take into consideration the delicate nature of the mining business, currently dealing with weak copper prices, down almost 10% this year.

The body represents major producers, such as Vedanta Resources (LON:VED), China Nonferrous Metals, First Quantum Minerals (LON:FQM, TSX:FM) and Glencore Xstrata (LON:GLEN), which have invested billions of dollars in expansion projects in the country in recent years.

Zambia’s mines use about 68% of the country’s electricity while less than a quarter of the population has access, according to Bloomberg.

India central bank hints easing of gold imports close

Long the top importer of gold, India fell behind China in 2013.

The decline in gold consumption in India came after bullion import duties were pushed up tenfold – from 1% at the start of 2012 to 10% – and other rules such as strictly cash only for imports, mandatory re-export of 20% of imports and transaction taxes stymied India's gold industry.

The shortage of physical gold meant premiums over the London fix demanded by Indian gold traders from jewelers shot up as high as $180 an ounce during peak festival and wedding season last year and remain high today at $60 an ounce.

That's up from $20 an ounce in the middle of March and indicates that demand is creeping back up, argues ANZ in a new research note.

Lifting the restrictions could unleash the pent up demand in India which during good years take in more than a 1,000 tonnes of world supply.

India is gearing up for a general election and a number of politicians have promised to lift the restrictions on the metal so central to the Indian culture.

In March authorities took modest steps by allowing five private banks to import gold and earlier this week the country's finance minister commented that further lifting of restrictions are on the cards in consultation with the Reserve Bank of India.

Indian Express quotes RBI Governor Raghuram Rajan on Wednesday as saying he favoured the gradual easing of curbs on gold imports:

“I think what we have to do is slowly and steadily take actions to remove some of these curbs (on gold imports),” Rajan told analysts at the post-policy call with researchers and analysts today.

He, however, said the timing on relaxation on gold imports needs to be discussed with the government. “It would be useful for some of the big uncertainties facing us to be behind us rather than still in front of us before major actions are taken up in this regard, but I don’t rule it out,” he said.

In contrast to India traders on the Shanghai Gold Exchange are offering gold at a discount to the quoted London spot price.

Driven in part by a weakening renminbi discounts on gold in China widened to as much as $9 an ounce below when the price were headed towards $1,400 in March.

That gap has now shrunk to $2–$3 an ounce as the lower gold prices drives fresh demand and could strengthen further if the yuan begins to appreciate again as expected