Fubarrio Expat Trader

It’s been a while since I talked about this, but I wanted to do a quick review of cups and handles. As you’ll remember, a “cup and handle” is a chart pattern that technicians use to occasionally attempt to predict future price movement in a security. Here is a link to my previous post on cups and handles.

Let’s look at some simple charts of U.TO or Uranium Participation Group on the Toronto exchange. U.TO trades roughly in line with the price of U3O8 (with a speculative premium). U.TO is a company that stockpiles yellow cake supplies.

The first chart off to the rght is the period mid-2004 to september 2006 on U.TO. If you look closely you can actually see two separate cup and handle-esque pattern formed during this period.

I do a lame attempt at tryin to highlight these pattern in red ink in the second chart. the two green vertical lines are merely indicating the period where a bullish run-up in price took place off the back end of the first handle.

Remember, that cups and handles are most indicative of future trending behavior after a longer term trend is already in place (duh). In other words, it more indicative of a longer term trend taking a “rest” or getting ready to continue with a longer term trend.

In these cases, the reason we care, is that as the cup and handle breaks out it can be rather explosive in price. In chart three I highlight the second cup and handle. This cup and handle isn’t as well formed as the first as the price action is quite choppy.

In the fourth chart I “zoom in” on this second cup and handle. While choppy, given the fact that it took place after a run-up in a longer term trend, i still viewed it as quite positive, and made several comments on this blog and to personal friends that Uranium was looking quite bullish.

As you can see in the fifth and final chart, which shows the second cup and handle and the price action from the subsequent breakout, the price action was pretty magnificent.

While most who trade on the fundamentals would attribute this to the cigar lake accident which put into question a large futre prospective uranium supply. it’s also interesting to note that the price action in U.TO and the Junior miners set up *ahead* of this accident.

Once the news broke publically, the true breakout happened. But at the time, the prices were already nosing up against all time highs on the backside of a cup and handle formation in the midst of what looked like a signficant long-term bullish trend.

If you want more info on cups and handles, and why i think they might actually be some insight on market psychology — especially when they are evaluated in conjunction with volume trends which i didn’t bother doing here, see my earlier post.

ciao for now,

fuBarrio

If you enjoyed this post, make sure you subscribe to my RSS feed!

I think the old joke goes something like this:

Q: “How do I build up a million dollar portfolio in Junior Uranium Mining Stocks?”

A: “Start with 10 million dollars….”

All jokes aside, as documented here, (along with gold) Uranium juniors were a big pony that I staked the last year as I saw some other markets starting to get really “wobbley”.

Junior Uranium is the new Internet, for better or worse. There are no earnings. Yet, many of these companies are up WELL over 100% since this summer….actually almost ALL uranium juniors are up a similar amount as a result of a production setback by the biggest miner of them all.

The reason that I’m bringing Uranium miners up again is this:

1.) neener neener neener — “I told you so!!!”

2.) We are rapidly approaching a period of the year when junior mining shares generally do NOT perform as well …..mid-april-ish to september.

3.) i think some stock traders *may* look to book some profits if/when we move above 100/lb on the yellowcake (currently at $95)….Fortunately, the price of physical Uranium itself doesn’t have a futures market, so most of the buying/selling is done by commercials and not speculators….although there are a couple of vehicles out there for giving traders the ability to take down physical supply off of the market further exascerbating the physical supply problems.

While there are lots of reasons that “this time it’s different” one must be aware of tidal influences if one is going to surf the global liquidity wave for a living. The good news is, if you haven’t already jumped on the uranium bandwagon there is a nice period here where you could have a chance to do your research, get set up, and get into a speculation or two during the “slow season” this summer.

If you’re going to invest in the junior miners try to pick ones with proven URANIUM mining experience. Given the length of the recent downcycle these are very few and far between and will quickly winnow a list of about 300 down to 10 or fewer for you.

There are going to be a couple of companies that build mines of lasting values. And, there will be lots of people who throw their money away on speculative juniors that never become anything — some of which will detail their foibles under pseudonyms while taking on the personae of balding, spotted dogs…..

p.s. for anyone crazy enough to think about speculating in junior mining shares, please take note of fubarrio’s first theorem of bad luck ™ as it applies to securities mentioned positively in a public setting and set your expectations accordingly. for the uninitiated, fubarrio’s first theorem of bad luck predicts a decline in the value of any proposed speculation in the immediate aftermath of any mention in a public forum

ciao,
fuBarrio

If you enjoyed this post, make sure you subscribe to my RSS feed!

Well, I’ve been noticably absent from the scene as of late, so I thought I’d take a minute to catch some folks up on what’s been happening.

I’ve been very busy working with some other “Uruguayan immigrants” (aka expats) on building a few companies here in Montevideo.

The company has been around for a while. So what do we do?

Well, if someone needs to transmit a large wire transfer, or money transfer….(especially an overseas or offshore wire), we do that quickly and confidentially while inviting the absolute minimum of intrusion into your private financial matters.

Sounds pretty esoteric, right?

Well, there are some other services that are going to be layered on top of this eventually that will make it more clear in case you’re still wondering why someone would actually want or need these services.

If you’re a reader of this blog you can probably guess why.

Ok…back to your regularly scheduled programming…

ciao for now,
fuBarrio
offshore wire hound

If you enjoyed this post, make sure you subscribe to my RSS feed!

In and of itself that isn’t really a headline.

However, at last night’s St.Patrick’s day get-together at the Southron’s lair fuBarrio made a proclamation with a certainty only possessed by those with an overabundance of liquid courage. In this case the backbone came courtesy of an oversupply of green Patricia (Uruguayan beer).

Although my memory is hazy as to what exactly fuBarrio said, it sounded something like, “I will stake my LIFE to Hillary Clinton winning the Democratic nomination.”

Of course, this in and of itself isn’t that bold of an announcement — except for the whole ’staking one’s life’ part

However, at the time I was arguing with someone that thought that Hillary’s campaign was coming under heat because of her stance on the war or something. Of course, not being burdened by reading (or watching) US news that doesn’t come from non-traditional conspiracy nuts’ websites I’m not burdened by any of the recent “facts”…..like maybe her campaign actually *is* in trouble No idea.

The side effect of being so “uninformed” has allowed fuBarrio to see with relative clarity events set to transpire over a longer time frame. While staking my life on her nomination seems a bit much, I’m willing to back up my words (kind of) and stake fuBarrio’s life on it.

If Hillary Clinton doesn’t win the nomination (and it isn’t because of her or an immediate family member’s death making her quit) I will lock away my irrepressible alter ego ‘fuBarrio’ and not allow his crazy rantings to be heard by the public at large..thus, effectively “killing” off his colorful online personna.

While I realize it would be strange that someone so unliked would become the first female nominee to head the Democratic ticket, I have THAT MUCH FAITH in the Clinton political machine.

Now, to the prospective candidates in the Democratic election: may the best Dragon-Lady-Sneaky-”cattle futures trading”-Untrustworthy-Pandering-Finger-in-the-wind-Playing-to-the-media-Candidate win!

ciao,
fuBarrio

If you enjoyed this post, make sure you subscribe to my RSS feed!

…Ok I promised to create a post about Uruguay.

This seemed to be the story with the biggest possible effect on foreigners evaluating Uruguay…

From www.UruguayDailyNews.com

BROU TO OFFER REAL ESTATE LOANS 2ND HALF OF 2007

March 16th, 2007

Banco Republica Oriental del Uruguay , the government bank, will be giving loans to people who want to purchase or renovate a house. The program is due to launch sometime after June. Banco Hipotecario del Uruguay, which is a state owned bank used to provide housing loans but has run out of resources. BROU has decided to step into this market because of BHU’s problems and the need for further growth in the construction and real estate industries . (Ultimas Noticias 16/03/07)
——-

Right now, with the exception of some private lenders, there just aren’t loans for real estate in Uruguay. While that has kept the cost of land and homes relatively affordable outside of the popular spots for tourists, it has made nicer properties untouchable for the middle class that reside here and earn their money here.

As I’ve speculated before, the money that is supporting the nicer homes in the city are supported by foreign money coming in supported by foreign govts, companies, or just individuals (equity locusts) taking out a heloc or selling an overpriced property in parts that support home values with loans and buying here with cash.

Offering RE loans to the unwashed masses again has the potential to be a “game changer” for Uruguay, and unfortunately from my perspective, for the worse. I understand “everyone” wants the 42 inch plasma, granite countertops, and european (or japanese) luxury vehicle….I’m just not comfortable with easily available credit to do it.

Don’t get me wrong, this place is decades behind the US in consumptive behaviour. But, if I’m going to consider putting down roots, I might have to consider buying at a time when I think the volume of equity locusts is getting ready to dry up….otherwise hope that the availability of money to buy real estate locally doesn’t make things crazy here.

ciao for now,
fuBarrio

If you enjoyed this post, make sure you subscribe to my RSS feed!

OK….I know I said I’d lighten up on poor beleaguered housing now that everyone agrees it’s got one foot in the grave and the other on a banana peel.

But, I found this online and almost choked on my twinkies — Contra Costa county is where i used to work (it is east of Oakland) and home to such bubblicious towns as “Walnut Creek” and some truly upscale communities ($3MM+)

I would hope that most of this activity is from the less desireable Contra Costa towns, but where do you think most of the people who don’t work at Chevron Texaco are getting the cash to afford the overpriced homes in Walnut Creek? — my guess — directly and indirectly servicing all the nouveau house rich east bay citizenry

From Central Valley Business Times: http://www.centralvalleybusinesstimes.com/stories/001/?ID=4599

(my emphasis added)

“Home foreclosures in the United States being reported by the media likely understate actual foreclosure sales activity, according to Foreclosure Radar, a Discovery Bay-based foreclosure listings and software company.

According to the company, February saw 4,171 foreclosures with a total loan value of $1.64 billion for distressed properties sold at auction in California. This dollar volume surpassed the prior record reached in the third quarter of 1996, and represents a 48 percent increase from December 2006, says the company which tracks actual foreclosure sales, not just initial listings.

“The foreclosure sale numbers, sometimes referred to as REO’s reported by similar listing services do not reflect current foreclosure sales activity. Instead, they are based on a document called a Trustee’s Deed that gets recorded with the county weeks after the sale. With the rapid changes in the foreclosure market, the delay in waiting for these documents to be recorded has resulted in actual foreclosure sales to be under reported by more than 300 percent,” he says.


“We’ve been tracking home, commercial, and bank foreclosures for years and the recent rise is alarming,” says Mr. O’Toole. “If you look at the data for Contra Costa County, for example, the number of foreclosures has increased by 865 percent in just one year and this is by no means the worst example in California.”

wow.
fuBarrio

If you enjoyed this post, make sure you subscribe to my RSS feed!

…I really miss Chile. In fact I miss them so much I partnered up with our friendly neighbors to the north and made a present for them….

To see my gift online, click on the following link. It’ll take a second to load up….best if viewed with sound, but clearly not necessary!

http://www.tatuagemdaboa.com.br/tatuagem.asp?seunome=fuBarrio&nomeamigo=Chile

ciao,
fuBarrio

If you enjoyed this post, make sure you subscribe to my RSS feed!

“….and those who can’t teach move to South America and blog mindless conspiracy theories all day.”

I swiped this from another blogger’s site…www.thehousingbubbleblog.com (if you aren’t already a bear, read this for an evening or two and you’ll be going into a 12 year hibernation on housing.)

From MarketWatch. “Losses on so-called Alt-A home loans are accelerating and could hit the value of lower-rated portions of some mortgage-backed securities, according to a study released on Tuesday.”

“These loans, known as Alt-A ARM IOs, have seen a four-fold increase delinquencies of at least 60 days, four times the level of similar loans originated in 2003 and 2004, according to the study by David Liu, head of mortgage credit research at UBS.”

“This ‘alarming’ deterioration could have dire consequences for some investors in the BBB- rated parts of mortgage-backed securities that contain these types of loans, but the market hasn’t priced these risks in yet, Liu warned.”

“Losses ‘could potentially wipe out most of the credit support on BBB- rated bonds backed by Alt-A hybrids,’ Liu wrote. ‘And yet we have not seen any spread movements that suggest investors are taking this into consideration.’”

“Liu’s study, which used LoanPerformance data from the end of January, is based on the housing market remaining relatively flat over the next few years. ‘If house prices fall over the next few years, everything in this scenario will be much worst,’ he said.”

“‘There is a 34% probability that the entire BBB- tranche might get wiped out,’ he wrote. ‘Similarly, there is a 17% probability that cumulative losses reach 300 basis points, which could make BBB bonds appear on the endangered species list.’”

“The percentage of mortgages that started the foreclosure process in the final quarter of last year rose to 0.54 percent, a record high. The previous high, 0.50 percent, occurred in the second quarter of 2002 as the economy was recovering from the blows of the 2001 recession.”

“Delinquency and foreclosure rates were considerably higher for higher-risk subprime borrowers, especially those with adjustable-rate mortgages. The late-payment rate for all subprime loans jumped to 13.33 percent in the fourth quarter, up from 12.56 percent in the prior period and the highest in four years. The delinquency rate for subprime borrowers with adjustable-rate mortgages was even higher; 14.44 percent, also the highest in four years.”

“‘Unfortunately, it appears delinquency rates will likely worsen before they improve,’ said Gina Martin, economist at Wachovia Corp. Economics Group.”

I’m shocked, SHOCKED (!) that problems could spread beyond subprime mortgages into higher rated tranches of credit. Wow, somehow that sounds familiar though (?) The mainstream media is all over this like white on rice at this point I guess.

I guess my 15 minutes is up. Parroting other extremists is cool, but it’s hard to keep up that whole “fringe personality cache” when Lesley Stahl is saying the same thing on 60 minutes.

I guess it’s time for an extremist like fuBarrio to move on to his next project…..uh….er…..hmmmm……uh…..what now?

Anyone want to hear about Uruguay???

ciao for now,

fuBarrio

If you enjoyed this post, make sure you subscribe to my RSS feed!

…Ok, so google has this feature in their “analytics” suite that tells you where all the people who are visiting your site are coming from.

lo-and-behold, i’ve added my FOURTH reader (well, technically it’s still my third because i lost one) in San Leandro, CA.

Now, I do have an aunt and uncle in S.L., but outside of that, I don’t think I actually know anyone else there anymore. The pathetic thing is, I was a property owner and lived there for two years….love those tight-knit US suburbs!

Technically, I did know some people there, but the young people were all so busy climbing the “property ladder” and trying to move to “more desirable” (more outrageously expensive) neighborhoods, that they’ve all since left.

Anyhow, sorry for another in a string of OT posts, but if it’s my aunt and/or uncle (or cousins) drop me a line for pete’s sake and stop kibitzing (info at fubarrio dot com). If it’s someone else from the former fubarrio stomping grounds, send and email or comment and let us know what’s happening.

I’d be especially interested to know if anyone’s realized that the homes in the “flats” aren’t worth 800k yet.

peace,
fuBarrio

If you enjoyed this post, make sure you subscribe to my RSS feed!

Ok…GW style.

After a lot of hullabuloo by the left wing radicals, he got applause (?!?!) as his motorcade blocked off the coastal highway and sped through Montevideo. In reality that was probably just some lackeys in limos and Suburbans, but they got applause none the less.

In other news, some friends launched UruguayDailyNews.com

It’s an ENGLISH digest that tells you in a minute what’s happening in Uruguay, with links to the appropriate Spanish original articles….a little bit of editorial content and over time, they’ll gradually increase the depth and breadth of their original coverage.

bookmark it! check it out daily! see how nothing really does change here!

peace,
fuBarrio

If you enjoyed this post, make sure you subscribe to my RSS feed!