Berlusconi Resignation Shifts Italy’s Focus

Prime Minister Silvio Berlusconi’s offer to resign leaves Italy struggling to produce a new regime stable enough to implement painful austerity measures in a country that has averaged almost a government a year since World War II.

Berlusconi last night said he’d step down as soon as parliament passed austerity measures pledged to European Union allies in a bid to convince investors Italy can curb record borrowing costs. The text of the measures, which the government has yet to present, is due to be approved by parliament in the coming weeks.

The euro strengthened and U.S. stocks rose for a second day after last night’s announcement, bolstering optimism a new leader will better be able to tame the euro-region’s second- biggest debt. Europe’s inability to contain the region’s sovereign crisis led to a surge in Italian bond yields in recent weeks that further frayed Berlusconi’s fractious coalition.

“While the news could set a positive market tone, that could be short lived,” said Silvio Peruzzo, euro-area economist at Royal Bank of Scotland Group Plc. “Investors will look at the post-Berlusconi and see an option on two outcomes: new elections and a technocratic government. We believe the latter would be strongly preferred and could help the crisis resolution process in Europe.”

Short of Majority

http://www.bloomberg.com/news/2011-11-09/berlusconi-s-resignation-offer-shifts-focus-to-forming-italian-government.html

When will they ever learn? QB

European Banks Cutting Sovereign Bond Holdings Threatens to Worsen Crisis

BNP Paribas SA and Commerzbank AG (CBK) are unloading sovereign bonds at a loss, leading European lenders in a government-debt flight that threatens to exacerbate the region’s crisis.

BNP Paribas, France’s biggest bank, booked a loss of 812 million euros ($1 billion) in the past four months from reducing its holdings of European sovereign debt, while Commerzbank took losses as it cut its Greek, Irish, Italian, Portuguese and Spanish bonds by 22 percent to 13 billion euros this year.

Banks are selling debt of southern European nations as investors punish companies with large holdings and regulators demand higher reserves to shoulder possible losses. The European Banking Authority is requiring lenders to boost capital by 106 billion euros after marking their government debt to market values. The trend may undermine European leaders’ efforts to lower borrowing costs for countries such as Greece and Italy, while generating larger writedowns and capital shortfalls.

“European regulators and leaders are shooting themselves in the foot because a big investor group for sovereign bonds has been taken out of the market,” said Otto Dichtl, a London-based credit analyst for financial companies at Knight Capital Europe Ltd. “The downward spiral will continue until policy makers find a back-up solution for the sovereigns.”

Barclays, RBS

http://www.bloomberg.com/news/2011-11-08/european-banks-cutting-sovereign-bond-holdings-threatens-to-worsen-crisis.html

And courtesy if Shaza's research

Barchart.com's Chart of the Day - Newmont Mining (NEM) for Nov 8, 2011

To access recent archived Chart of the Day reports, please go to:
http://www.barchart.com/headlines/search.php?feed=BC&series=COD

The "Chart of the Day" is Newmont Mining (NEM), which showed up on Monday's Barchart "All Time High" and the "Gap Up" lists. Newmont Mining on Monday rallied by 3.96% and posted a new all-time high of $72.29. TrendSpotter has been Long since Oct 14 at $66.86. Newmont Mining was boosted yesterday by the extension of the 6-week rally in gold prices to a new 7-week high. In recent news on the stock, Newmont Mining on Oct 27 reported Q3 EPS of $1.29 versus the consensus of $1.24. Blackrock on Oct 25 said it sees "massive" opportunity in mining stocks that have been hit hard in recent months and offer compelling valuations and healthy balance sheets. TD Newcrest on Oct 25 initiated coverage on Newmont with a Buy and a target of $85. However, CIBC on Oct 31 downgraded Newmont to Sector Underperformer due to valuation and Deutsche Bank on Oct 28 removed Newmont from its short-term buy list. Newmont Mining, with a market cap of $33 billion, is one of the world's largest gold mining companies with operations in the U.S., Peru, Indonesia, Mexico and Uzbekistan.

Trading Lesson: Notional Risk/Reward is Only Half the Equation

If you’re an open minded, unbiased trader, you’d do well to read Peter Brandt’s blog on a daily basis.  Peter talks about his trading setups, methodologies, and processes, providing a free lesson into the methods of a pro.   The reason I said that you have to be unbiased and open minded is that Peter is a technician and his positions and opinions will change with the price patterns shown in the charts – so if you can’t handle going from bullish to bearish and back to bullish again on the same asset in a handful of days, you will be confused/annoyed/frustrated.  As Peter repeats frequently, “I have strong opinions, weakly held.”

Similarly, you have to understand that a technician like Peter is trading price action: I don’t think he gives the slightest crap what the underlying instrument is – it’s the price pattern that tells the story (it’s a story of the visual depiction of market psychology, but that’s a lesson for another day).

Yesterday Peter illustrated a trade setup in $AAPL, explaining the potential risk/rewards he’ll expose himself too:

“I am a firm believer that charts do not provide forecasts, but can be extremely useful in identifying trades with extremely torqued reward to risk possibilities. This is exactly the case we now have in $AAPL. The following trade assumes a margin account of $1 million.

http://kiddynamitesworld.com/trading-lesson-notional-riskreward-is-only-half-the-equation