The Money Map Advantage
Thursday, March 16, 2006
By Horacio Marquez
Email – #34
** Our “load the boat” Call Confirmed This Morning
Wednesday through Friday of this week, I’m at the Investment U conference in Delray Beach, Florida. It’s been an outstanding experience: “standing room only” in many presentations, top rated speakers, and a great opportunity to meet many MMA subscribers here – some until the late hours of the night, including a retired investor who, she tells me, flew eleven times through the eye of a hurricane and whose late husband once managed to land his battle-worn B-24 airplane, saving the entire crew during World War II.
In my presentation yesterday, I mentioned here that I expected the core CPI measure of inflation to be very well behaved this morning – and that the market would take off, especially interest-rate-sensitive stocks.
Well, right on cue, with headline and core inflation both posting at 0.1% for February, housing starts down almost 8%, and jobless claims at a moderate pace, I was happy as a lark in spring, as cyclicals, emerging markets and energy performed strongly.
And later, I delighted in the Philly Fed index, which measures industrial activity in the east coast, showing moderating inflationary pressures and activity consistent with our soft-landing view.
Indeed, the data shows that the Fed’s gradual policy is working well and that, just as we predicted, they are much closer to the end of their rate hikes than Wall Street and recent market pundits were declaring.
Be mindful that Fed chairman Bernanke declared that policy will be data-dependent. And the data was helpful, and as I wrote last week, the key 10-year U.S. Treasury bonds caught a strong bid this week, declining some 14 basis points (0.14%) in yield since Monday as the market moved closer to our own view of the Fed stopping at 4.75%, which will eventually surprise the markets positively if and when it transpires. Our Unibanco (NYSE: UBB) recommendation has rallied some 7.5% since our purchase, and has a lot more to go.
And also confirming our views, Fed Governor Kohn declared that the Fed will not act to preserve high home prices. Translation: As home sky-high prices correct downwards in bubble areas, do not expect the Fed to ease monetary conditions to cushion the fall. This statement is what the market calls verbal intervention by the Fed. Hint: Do not get caught long speculative real estate in a bubble area, because the correction is under way and the Fed is not going to stop it. Profits from real estate are flowing back to equities, as I confirmed from some of you in Delray yesterday, who have wisely taken profits in real estate and moved onto global equities.
Now, focusing on tomorrow’s options expiration, we do have the remaining one-quarter of our original position in the Peabody Energy March $45 calls (BTU-CI) still open. So sell them today at the market since they expire tomorrow.
Action to take:
Sell Peabody Energy March $45 calls (BTU-CI)
Enjoy and profit,
Horacio Marquez
If you have any questions, feel free to call one of our VIP Trading Services representatives at 888.570.9830 (toll-free) or e-mail: viptrader@oxfordclub.com, or contact Pillar One Advisor Rick Pfiefer at 800.438.3040 or 407.667.4729.
Stock & Symbol
Current Price
Comments
Unibanco (NYSE: UBB)
$85.22
Buy. Sell stop is $59.58.
Peabody Energy (NYSE: BTU)
$47.15
Buy. Sell stop is $35.
IShares Brazil Fund (Amex: EWZ)
$41.79
Buy. Sell stop is $33.79.
BHP Billiton (NYSE: BHP)
$36.65
Buy. Sell stop is $32.70.
Banco Bradesco (NYSE: BBD)
$40.96
Buy. Sell stop is $29.45.
Petrobras (NYSE: PBR)
$90.24
Buy. Sell stop is $75.47.
Mitsubishi UFJ Finan. (NYSE: MTU)
$14.20
Buy. Sell stop is $12.93.
iShares Japan Fund (AMEX: EWJ)
$13.84
Buy. Sell stop is $12.83.
Tenaris (NYSE: TS)
$185.08
Buy. Sell stop is $117.27.
MSCI Austria Fund (AMEX: EWO)
$30.82
Buy. Sell stop is $26.51.
Market Watch
NASDAQ
1528.95
0.00
SP 500
813.88
0.00
DJIA
7749.81
+89.84
As Of 6:12AM 3/26/2009
Attention Money Map Subscribers!
Money Map Report,
New China Trader
& Money Moves Alert
are now found at www.moneymappress.com
