Market Update

Source

11:55 am : The major averages are back near session lows as sellers remain in control. All three of the major averages are seeing losses of similar magnitude, trading down 1.2%.

Shares of Eli Lily (LLY 39.81, -0.67) are down 1.7% despite the company announcing the Food and Drug Administration has approved Amyvid for use in patients under evaluation for Alzheimer’s and other diseases related to cognitive decline.  DJ30 -147.39 NASDAQ -35.55 SP500 -17.62 NASDAQ Adv/Vol/Dec 351/575.3 mln/2110 NYSE Adv/Vol/Dec 485/246.1 mln/2536

11:30 am : Treasuries are seeing a choppy session as action holds near Friday’s highs. Modest buying of longer dated paper has yields down a couple of basis points during today’s session and has the 10-yr searching for its first sub-2.00% print since March 12. The long bond is leading today’s advance as a gain of 17/32 has it nearing resistance in the 99 00/32 area. A flatter yield curve has persists with the 2-10-yr spread tighter at 172.5 basis points. Meanwhile, precious metals are mixed with gold up $8 at $1638 and silver down $0.40 near $31.35.DJ30 -150.30 NASDAQ -38.19 SP500 -18.47 NASDAQ Adv/Vol/Dec 340/507.2 mln/2100 NYSE Adv/Vol/Dec 477/221.2 mln/2537

11:00 am : The major averages are off their worst levels, but still hold losses of close to 1.0%. The S&P 500 is now the worst performer among the major indices, trading down 1.2%.

Molina Healthcare (MOH 26.36, -8.65) is down 24.7% after the company was informed it was not selected to participate in the Ohio Medicaid Managed Care Plan Request for Applications. The company’s contract with the state will expire without renewal at the end of 2012. Meanwhile,Centene (CNC 43.81, -6.99) is lower by 13.8% on similar news.  DJ30 -130.29 NASDAQ -28.03 SP500 -15.76 NASDAQ Adv/Vol/Dec 368/413.5 mln/2047 NYSE Adv/Vol/Dec 497/184.7 mln/2482

10:35 am : The dollar index has pulled back sharply, but has only given select commodities a boost. In  the energy, May crude oil has been in negative territory all session and didn’t benefit from that pull back in the dollar index. Crude hit a new session low of $101.27 a short while ago and remains near that low in current trade, now at $11.49/barrel, down 1.7%.

May natural gas was in the red overnight, but gained some steam this morning. About 20 minutes after floor trading began, nat gas rallied to a new session high of $2.11. Currently, it’s up 0.3% at $2.10/MMBtu.

In metals, Apr gold and May silver are mixed following the recent pullback in the dollar index.  Gold is now back near session highs, while silver is attempting to come off its recently-hit session low of $31.43. Currently, silver is modestly lower at $31.63, down 0.4% and gold is +1.0% at $1646.80/oz.DJ30 -127.52 NASDAQ -32.45 SP500 -15.60 NASDAQ Adv/Vol/Dec 350/331 mln/2049 NYSE Adv/Vol/Dec 468/157 mln/2417

10:00 am : The major averages are holding on session lows as sellers remain in control following Friday’s jobs report. The Nasdaq is pacing today’s decline with a loss of 1.5% while the S&P 500 and Dow trade lower by 1.4% and 1.2% respectively.

Shares of AOL (AOL 26.64, +8.22) are one of the few bright spots, trading up 44.6% after the company announced a $1 billion patent deal withMicrosoft (MSFT 31.09, -0.43). The deal pays AOL $1.056 billion in cash for more than 800 of its patents and their related applications. Today’s announcement includes the sale of stock of an AOL subsidy upon which the company expects to see a capital loss for tax purposes.  DJ30 -151.14 NASDAQ -47.22 SP500 -19.17 NASDAQ Adv/Vol/Dec 284/185.7 mln/2057 NYSE Adv/Vol/Dec 371/104.4 mln/2510

09:45 am : The major averages are under pressure in the opening minutes of trade. Selling is most pronounced in the Nasdaq as the tech-heavy index is down 1.3% while a loss of 0.9% has the Dow seeing some slight outperformance. Meanwhile, financials and energy are the worst perofrming sectors in the S&P 500, trading down 1.7% and 1.4% respectively.DJ30 -135.47 NASDAQ -41.21 SP500 -17.22 NASDAQ Vol 108.9 mln NYSE Vol 79.4 mln

Source

“A US Geological Survey research team says a remarkable increase in earthquake occurrence in the US in the past decade is “almost certainly man-made.”

According to the study by USGS, oil and natural gas extraction activity have possibly provoked a series of recent earthquakes from Alabama to the Northern Rockies.

However, USGS authors did not estimate a direct cause-effect relationship between oil and gas activity and earthquakes.

“It remains to be determined how they are related to either changes in extraction methodologies or the rate of oil and gas production,” says the abstract for USGS study, published by the Seismological Society of America.

However they gave a possible explanation for it. They relate it to drilling, which requires the disposal of millions of gallons of wastewater for each well. The number of wells drilled has increased over the past decade.

A recent series of earthquakes in north-eastern Ohio, the latest and largest being on New Year’s Eve, has prompted that state’s Department of Natural Resources to close or suspend development by natural gas drillers of five deep wastewater disposal wells pending an investigation into well impact on increased seismic activity in the area.

Earthquakes have been linked to so-called injection wells in other states. For example, Arkansas imposed a permanent moratorium on disposal wells in an approximately 1,200 square-mile area, due to enhanced seismic activity near the Fayetteville Shale.

“The acceleration in activity that began in 2009 appears to involve a combination of source regions of oil and gas production, including the Guy, Arkansas, region, and in central and southern Oklahoma. Horton, et al. (2012) provided strong evidence linking the Guy, AK, activity to deep waste water injection wells,” the study says.

The research team led by USGS geophysicist William Ellsworth, says the frequency of earthquakes began rising in 2001 across a broad swath of the country between Alabama and Montana and culminated “in a six-fold increase over 20th century levels in 2011.”

Meanwhile, according to the federal Energy Information Administration, shale gas production grew, on average, nearly 50 per cent a year from 2006 to 2010.”

Source 

“STOCKS HAVE REACHED THE EUPHORIA STAGE

The last bull ended when the leading stock, GOOG, entered a parabolic “bubble” phase. That was the signal that the bull had reached the euphoria stage. When the GOOG bubble popped it signaled the end of the bull market.

Two stocks, AAPL and PCLN, have been the leaders of this bull market. Both have entered the euphoric “bubble” stage. When the Apple and Priceline parabolas break it will almost certainly signal the end of this bull market.

Apple is now stretched 49% above the 200 day moving average. Anything between 50 and 60% above the mean is extreme dangerous territory.

As I pointed out in my last article the dollar is beginning its second daily cycle up in what could very well be a cyclical bull market. This should correspond with the stock market topping and the next leg down in the secular bear market.

My best guess is that we will see a sharp sell off over the next 2 to 3 weeks, followed by a sharp rebound (QE3?) that may, or may not, move stocks to marginal new highs, similar to the 2007 top.

The poor employment report on Friday is the first warning shot across the bow that the economy is slowing in preparation for moving down into the next recession/depression.

Bernanke is in the same position he was in 2007. Printing more money won’t stop the collapse. It will only continue to spike the price of energy and exacerbate the decline.

Source 

“The shortfall in US labor union pension funds is huge and growing rapidly. The latest data, from 2009, from the PBGC showed that thesemulti-employer plans were 48% underfunded with $331bn of assets to support $686bn of liabilities – and it has hardly been a good ride for those asset values since then. Critically, as the FT notes today, recent changes by FASB has enabled Credit Suisse to estimate shortfalls more accurately and it paints an ugly picture. The critical difference between reality and what is being reported is the ability for firms to use actuarial ‘facts’ to discount liabilities or compound assets at a 7.5% annual growth rate – as opposed to the sad reality of a financially repressed investing environment where returns swing from +20% to -20% in a flash forcing all funds into market timers and not long-term buy-and-hold growth players. These multi-employer pension schemes cover over 10 million people concentrated in industries with highly unionized workforces such as construction, transport, retail and hospitality but of the shortfall only $43bn lies with firms of the S&P 500 – leaving the bulk of the burden on small- and medium-sized businesses once again. It seems the number and size of unfunded (implicitly government) liabilities continues to rise or does this force pensions to follow Ben’s path and increase exposure to hedge funds (which are underperforming in this serene rally so far this year) in an effort to meet these hurdle rates? Either way it appears this under-appreciated drag on the real-economy as one after another small-, medium-, and large- (Safeway faces shortfalls larger than its market cap) businesses will need to eat into earnings to fund this shortfall.

“Some of the world’s biggest banks are trying to extend the principles of securitization to the plain-vanilla world of trade finance – a market worth an estimated $10 trillion a year – as concern mounts that regulatory changes could constrain a key lubricant of the global economy.

JPMorgan [JPM  43.65    -0.69  (-1.56%)   ] is among several banks that have begun testing investor appetite for the trade finance equivalent of collateralised debt obligations – the derivative products blamed for compounding the financial crisis – in an attempt to boost lending capacity.

Trade finance supports more than 80 percent of global trade. But it has been disrupted by the financial crisis, as some lenders got into trouble, and by the regulatory response to the crisis, as banks have been ordered to hold more capital against lending.

Banks have lobbied hard against the constraints imposed on trade finance by the Basel III global rule book, due to be phased in from 2013.

The new rules for overall bank borrowing – the leverage ratio – treat a typical three-month trade finance loan as a year-long exposure, effectively forcing banks to hold far more top-quality capital against the loan….”

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“Following the tragic suicide in Athens last week, it really does appear that the Greek troubles are entering a new, potentially dangerous stage.

The Daily Mail reports that a firebomb blast took out a government building last night — and appears to have specifically targeted the Public Sector Reform Ministry, responsible for laying off 150,000 public sector workers.

Thankfully, despite the fact there was no warning given, no one was hurt in the blast.

The bombing comes just days after a similar attack on the home of Costas Simitis, the former Greek prime minister who led the country into the euro…”

Read more

Source

“NEW YORK (MarketWatch) — Shares of the following companies were among those making notable moves in Monday’s market session:

Advancers

AOL Inc. AOL +45.33%   shares surged 42% after the search engine said it agreed to sell more than 800 of its patents and related applications to Microsoft Corp. MSFT -0.94%  and would give Microsoft a nonexclusive license to the patents it still holds, at a price of just more than $1 billion in cash.

Carrollton Bancorp’s CRRB +23.46%  shares rallied 23% after the parent of Carrollton Bank said it would merge with Jefferson Bancorp Inc.

Great Wolf Resorts Inc. WOLF +11.40% shares rose 12% after private-equity firm KSL Corp. increased its offer for the operator of indoor water recreation parks by 12% to $234 million, trying to top a rival effort by Apollo Group Management.

Zep Inc. ZEP +0.70%  shares climbed 3% after the maker of disinfectants and pest-control products reported second-quarter earnings that beat expectations.

Decliners

Centene Corp. CNC -13.66%  shares fell 13% after the provider of health insurance said it was notified a subsidiary had not been awarded a contract to continue serving Medicaid members in Ohio, starting early next year.

Zhongpin Inc.’s HOGS -5.98%  U.S.-listed shares declined 5% after federal regulators on Friday froze the accounts of six people accused of insider trading involving shares of Chinese pork processor. “

“Michigan State University President Lou Anna K. Simon contacted the Central Intelligence Agency in late 2009 with an urgent question.

The school’s campus in Dubai needed a bailout and an unlikely savior had stepped forward: a Dubai-based company that offered to provide money and students.

Simon was tempted. She also worried that the company, which had investors from Iran and wanted to recruit students from there, might be a front for the Iranian government, she said. If so, an agreement could violate federal trade sanctions and invite enemy spies.

The CIA couldn’t confirm that the company wasn’t an arm of Iran’s government. Simon rejected the offer and shut down undergraduate programs in Dubai, at a loss of $3.7 million.

Hearkening back to Cold War anxieties, growing signs of spying on U.S. universities are alarming national security officials. As schools become more global in their locations and student populations, their culture of openness and international collaboration makes them increasingly vulnerable to theft of research conducted for the government and industry.

“We have intelligence and cases indicating that U.S. universities are indeed a target of foreign intelligence services,” Frank Figliuzzi, Federal Bureau of Investigation assistant director for counterintelligence, said in a February interview in the bureau’s Washington headquarters.

‘Academic Solicitation’

While overshadowed by espionage against corporations, efforts by foreign countries to penetrate universities have increased in the past five years, Figliuzzi said. The FBI and academia, which have often been at loggerheads, are working together to combat the threat, he said.

Attempts by countries in East Asia, including China, to obtain classified or proprietary information by “academic solicitation,” such as requests to review academic papers or study with professors, jumped eightfold in 2010 from a year earlier, according to a 2011 U.S. Defense Department report. Such approaches from the Middle East doubled, it said.

“Placing academics at U.S. research institutions under the guise of legitimate research offers access to developing U.S. technologies and cutting-edge research” in such areas as information systems, lasers, aeronautics and underwater robots, the report said….”

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“VICTORIA, Texas (Reuters) – It hasn’t been long since Caterpillar Inc looked like the typical resident of the Rust Belt. Having misjudged how deep the U.S. economy would decline, the world’s largest maker of construction machinery reduced its workforce by 33,000 people worldwide in 2009, closed plants and posted lower profits.

But the Peoria, Illinois-based company has mounted a quick recovery and is emerging as the poster child for America’s manufacturing renaissance.

In 24 months, 15 Caterpillar facilities have been built or updated in the United States, tens of thousands of workers have been added to the payroll and $2 billion is committed for capital investments on its home soil this year.

“We haven’t seen Caterpillar doing this much building in the United States since probably the 1960s,” said Peter Holt, owner of the Holt Caterpillar dealership in San Antonio. Caterpillar is building a $200 million plant two hours southeast of his store, in Victoria, Texas, that is slated to start churning out badly needed excavators later this summer.

Underpinning Caterpillar’s U.S. momentum is a flood of demand by heavy equipment users in America – ranging from construction companies to oil drillers to cement producers – who are looking to replace aging machines now that the economy is improving and credit is easier to obtain.

But a major U.S. expansion is not without risks for Caterpillar. The U.S. economic recovery could still derail, given high unemployment and weak housing markets. And the growth rate of global machinery sales is also tracking at its slowest pace since May of 2010, although U.S. demand is brisk.

Even Holt, the dealer whose family was influential in founding Caterpillar, has a bad taste in his mouth from previous downturns. “Caterpillar has always tried to forecast,” he said. “We’ve never been any good at it (because) there is no consistency in the world economy.”

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[youtube://http://www.youtube.com/watch?v=ZIGzpi9lCck 450 300]

NYSE

ew Highs 2 

COMPANY                       SYMBOL      HIGH                VOLUME 
-------                       ------      ----                ------ 
AOL                           AOL         26.18            3,571,170 
Delphi Fincl                  DFG         45.34              120,159 

New Lows 43 

COMPANY                       SYMBOL      LOW                 VOLUME 
-------                       ------      ----                ------ 
AbitibiBowater                ABH         13.53                6,210 
Advantage Oil & Gas           AAV         2.94                77,089 
Alliant Techsys               ATK         48.38               12,583 
Alpha Natural Res             ANR         13.85            1,112,462 
Arch Coal                     ACI         9.95               896,575 
Bill Barrett                  BBG         23.26               57,051 
Cellcom Israel                CEL         11.89               62,990 
Cloud Peak Engy               CLD         14.75               89,630 
DelhaizeGrp                   DEG         49.09                5,990 
DeVry                         DV          32.22               96,203 
EXCO Resources                XCO         5.98             1,132,548 
Enerplus                      ERF         19.90              519,820 
Exelon                        EXC         38.15              368,510 
Fortuna Silver Mines          FSM         4.06                54,181 
GasLog Ltd                    GLOG        11.01               52,221 
GenOn Energy                  GEN         1.97               174,238 
GrafTech Intl                 GTI         11.26               95,341 
Heckmann                      HEK         4.02               290,494 
Hecla Mining                  HL          4.18               782,210 
Hyperdynamics                 HDY         0.92               596,010 
KT Crp ADS                    KT          13.35               64,456 
Kaydon Corp                   KDN         23.76               13,534 
Millennial Media Inc          MM          16.71              350,209 
NRG Energy                    NRG         14.88              103,898 
Natl Presto Indus             NPK         71.90                4,376 
Nuveen Glbl Val Opp Fd        JGV         15.73               14,649 
Oi S.A.ADS                    OIBR        15.01                6,061 
Patriot Coal                  PCX         5.51               420,785 
Peabody Energy                BTU         27.61              508,046 
Penn Virginia                 PVA         4.06               128,162 
Petrobras Argentina ADS       PZE         11.00               16,988 
Pitney Bowes                  PBI         17.00              236,276 
RadioShack                    RSH         5.92               395,472 
Standard Register             SR          1.05                47,840 
Supervalu                     SVU         5.07               519,169 
Titanium Metals               TIE         12.75              125,932 
Tootsie Roll Indus            TR          22.06               12,194 
Transalta Corp                TAC         18.03               10,739 
Ultra Petroleum               UPL         20.00              274,263 
Virtus Glbl MultiSector       VGI         19.88               17,370 
World Wrestling               WWE         8.12                23,951 
Xerium Tech                   XRM         6.00                17,897 
YPF SA                        YPF         21.85               47,539

NASDAQ

New Highs 11 

COMPANY                       SYMBOL      HIGH                VOLUME 
-------                       ------      ----                ------ 
Amer Cap Agency Pfd A         AGNCP       25.20               26,200 
Anika Therapeutics            ANIK        13.65               47,797 
Carrollton Bancorp            CRRB        5.40                 2,740 
Global-Tech                   GAI         9.94                55,736 
Great Wolf Resorts            WOLF        7.35               356,673 
Icahn Enterprises             IEP         48.54                5,646 
Mattersight                   MATR        8.78                 1,273 
Procera Networks              PKT         23.75               53,176 
Russ Small-Cap Low P/E        SCLP        72.00                  200 
Salem Comm                    SALM        5.03                13,627 
Verenium                      VRNM        4.60                37,791 

New Lows 35 

COMPANY                       SYMBOL      LOW                 VOLUME 
-------                       ------      ----                ------ 
ARCA biopharma Inc            ABIO        0.71                25,412 
Alliance Hldgs GP             AHGP        39.28                5,067 
Alliance Resource Prtnrs      ARLP        55.01               33,213 
American Learning             ALRN        0.92                 1,900 
Apollo Grp  (Cl A)            APOL        35.77              130,312 
B Communications              BCOM        7.21                 1,000 
Blue Nile                     NILE        28.78               12,963 
CEVA                          CEVA        21.50               15,004 
Cardiome Pharma               CRME        0.60               118,258 
Digital Generation            DGIT        9.17                25,543 
Electronic Arts               EA          15.98              329,566 
EnerNOC                       ENOC        6.56                11,548 
First Solar                   FSLR        20.26              493,762 
GSI Tech                      GSIT        4.15                11,198 
Groupon Inc                   GRPN        13.58              249,659 
Intrnt Gold-Golden Lines      IGLD        5.20                   530 
iSh Emg Mk Engy Sectr Cap     EMEY        46.56                  533 
James River Coal Co           JRCC        4.60               134,122 
Meru Networks                 MERU        3.00                65,642 
Mission NewEnergy             MNEL        0.45                   730 
Opexa Therapeutics            OPXA        0.58                 7,900 
OPNET Techs                   OPNT        27.89                7,318 
Peerless Manufacturing Co     PMFG        13.57                2,668 
Polycom                       PLCM        14.08              600,135 
PwrShs Gbl Gld & Prec Mtl     PSAU        36.38                  601 
Primo Water                   PRMW        1.72                16,483 
Quantum Fuel Sys Techs        QTWW        0.60               116,959 
RealPage                      RP          17.81                7,972 
Rimage                        RIMG        9.83                 2,950 
Skywest                       SKYW        10.46                8,871 
Swisher Hygiene               SWSH        2.01               211,601 
US Auto Parts Ntwk            PRTS        2.87                 2,002 
WebMD Health                  WBMD        22.75               33,902 
Wireless Ronin Techs          RNIN        0.69                 3,600 
YRC Worldwide                 YRCW        4.90                19,329

3D heat map

S&P A/D Line

NASDAQ A/D Line 

 -CALLS- 
OPTION    EXP.DATE       STRIKE PRC.     VOLUME        LAST S/PRC.    NET CHANGE 
BAC        4/21/12          10.0000        2516            0.0600      dn 0.0400 
BAC        4/21/12           9.0000        2102            0.3300      dn 0.1500 
AAPL       4/13/12         635.0000        1465            6.2000      dn 3.2000 
AAPL       4/13/12         630.0000        1273            8.3100      dn 3.6400 
BAC        4/13/12           9.0000        1137            0.2000      dn 0.1500 
AAPL       4/13/12         625.0000        1051           10.8100      dn 4.3600 
NEM        6/16/12          50.0000        1019            1.8800      up 0.3100 
AAPL       4/13/12         640.0000         922            4.6000      dn 2.4000 
AAPL       4/13/12         620.0000         829           13.7000      dn 4.9000 
AVP        5/19/12          23.0000         785            1.1200      dn 0.3800 

 -PUTS- 
OPTION    EXP.DATE       STRIKE PRC.     VOLUME        LAST S/PRC.    NET CHANGE 
VALE       5/19/12          23.0000        2397            1.5200      up 0.1400 
S          5/19/12           2.5000        2216            0.1400      up 0.0200 
GLD        4/21/12         155.0000        2128            0.4900      dn 0.2800 
GLD        9/22/12         140.0000        1500            1.7500      dn 0.2500 
AAPL       4/13/12         615.0000        1420            4.5000      up 0.8800 
INTC       4/21/12          27.0000        1106            0.3300      up 0.1000 
MSFT       4/21/12          30.0000        1092            0.2100      up 0.0800 
CALL       9/22/12          17.5000        1034            1.6000      dn 0.9500 
GLD        9/22/12         145.0000        1000            2.6300      dn 0.2900 
JPM        6/16/12          44.0000        1000            2.5100      up 0.5700 

 -VOLUME- 
 CALLS      PUTS           TOTAL 
352127    325951        678078

 -CALLS- 
OPTION    EXP.DATE       STRIKE PRC.     VOLUME        LAST S/PRC.    NET CHANGE 
GS         5/19/12         105.0000         228           12.9000      dn 3.4000 
MCD        4/21/12         100.0000         176            0.5300      dn 0.0100 
BAC        4/21/12           9.0000         149            0.3100      dn 0.1700 
F          9/22/12          12.0000         140            1.0800      dn 0.1000 
SHLD       4/13/12          70.0000         104            0.1200      dn 0.6500 
AAPL       4/13/12         630.0000          95            8.4500      dn 3.5500 
TZA        5/19/12          30.0000          93            0.3600      up 0.0200 
POT        4/21/12          50.0000          88            0.0300      dn 0.0600 
AAPL       4/13/12         625.0000          77           10.8000      dn 4.1500 
AAPL       5/19/12         625.0000          76           33.0000      dn 2.5100 

 -PUTS- 
OPTION    EXP.DATE       STRIKE PRC.     VOLUME        LAST S/PRC.    NET CHANGE 
INTC       4/21/12          27.0000         236            0.3300      up 0.0300 
GLD        4/21/12         155.0000         206            0.4600      dn 0.3100 
FCX        4/21/12          36.0000         117            0.7300      up 0.1700 
MSFT       4/21/12          30.0000          95            0.2100      up 0.0600 
WDC        4/13/12          40.0000          84            1.0800      up 0.3200 
CHK        4/21/12          21.0000          83            0.4300      up 0.1300 
JPM        9/22/12          39.0000          82            1.7900      up 0.2700 
AAPL       4/13/12         615.0000          77            4.5000      up 0.8000 
BAC        5/19/12          10.0000          75            1.1500      up 0.1100 
JCP        5/19/12          33.0000          69            1.2300      up 0.1700 

 -VOLUME- 
 CALLS      PUTS           TOTAL 
11855    16392        28247

Fun times with you money….

Source

“Banks currently control 95% of the small business lending market. Now they are lobbying Congress to stop credit unions from cutting into the market.

Pay up on individual mandate penalties….

Source 

“Molycorp, Inc. (NYSE: MCP) may have sold off in recent days but there is some better news for the long-term outlook of this company’s business prospects pertaining to rare earth minerals.  While it has been expanding its Mountain Pass operations, Molycorp has now issued news that its proven and probably reserves of the rare earth minerals are up by some 36%.

The report is said to be based upon an independent estimate from SRK Consulting of Lakewood, Colorado, a mining consulting firm that specializes in such estimates.

The news is said to put Molycorp’s reserves up at 18.4 million short tons of rare earth ore (at an ore grade of 7.98% and a cut-off grade of 5%) versus a prior 2010 estimate of proven and probable reserves of 13.6 million short tons.  The data is showing that a cut-off grade of 5% used by SRK far exceeds the head-grades of most other known rare earth projects around the world.

Molycorp further noted, “SRK now estimates that the proven and probable component of Molycorp’s ore body contains approximately 2.94 billion pounds (1.3 million metric tons) of contained rare earth oxide (REO) equivalent. This compares to the previous estimate of 2.24 billion pounds of contained REO product (1.02 million metric tons).”

Shares of Molycorp ar enow up about 1.5% at $33.69 ahead of the opening bell and the 52-week trading range is $23.05 to $79.16.”

Source

Follow up to that commodity theme….which will be key for the Kingdom of Oz…

From UBS:

“In Shakespeare’s Julius Caesar, a wizened soothsayer warns the great emperor to ‘beware the Ides of March’ – for death loomed over him, until this fateful date. Like Caesar’s confidant, the battered and grim UBS commodities & mining team, too, has a warning for its clients (albeit more prosaic): downside risks loom large for metals and miners, as we head into Q2 12.

There are three elements to our cautious call on industrial commodities and miners. On all three points, we are more cautious than our global macro and asset allocation colleagues:

• The end of Federal Reserve and European Central Bank (ECB) stimuli will cause an acceleration of capital flows out of emerging markets, hitting commodity demand.
• China is undergoing a difficult transition away from the powerful labour and capital mobilisation of the past 25 years. As the authorities refuse to stimulate private construction and infrastructure in the face of a slowdown, commodity intensity will fall.
• The US may see credit conditions deteriorate, post the ECB’s LTRO2 (longterm refinancing operation 2) and with a cyclical slowdown going into the middle of 2012. This would likely trigger a  broader risk-off event and a further acceleration of capital flows out of emerging markets.

Of the three elements of our call, we are seeing gathering evidence that the first  two themes are working. However, there is no conclusive evidence of an increase in US credit stress, nor consistent signs of a US slowdown. On our investment clock that leaves us firmly in zone four: The disinflationary boom.”

They then continue by saying that they use HYG (High Yield ETF) as a proxy for US credit conditions and that should it break the 200 DMA, we would move into zone 2, the DEFLATIONARY BUST! Ouch, scary…

Especially when looking at this chart, today we are breaking the 50 DMA and stand 4.2% higher than that 200DMA. Back in those summer days it is 1 or 2 trading sessions…Ouch, definitely scary…

This baby is a war monger…..

“The market cliche is: Sell in May, and go away.

In his latest column for Real Money, Doug Kass advises not to wait that long.

His key points:

• The economy is slowing, contrary to what a lot of people are saying.
• Massive gridlock is coming in Washington, as Obama and the Republican Congress will likely return to power.
• Monetary and fiscal contraction is coming.
• The market itself is looking bad thanks to weak internals, like weakness in the Russell 2000, and a diminishing number of new highs.”

Read more