Bill Cara’s Blog for April 20, 2010 [See post-close report]

"Greece sold the 13-week securities today to yield 3.65 percent, compared with 1.67 percent at a sale of similar debt on Jan. 19, according to the Athens-based Public Debt Management Agency. Investors bid for 4.61 times the securities offered, up from 3.23 at the last sale, the PDMA said."

http://www.bloomberg.com/apps/news?pid=20601009&si...

Asking myself whether we have a double top in junk bonds (JNK). The appetite seems to be there - I've heard one hedgie call it a bubble:

http://www.bloomberg.com/apps/news?pid=newsarchive...

same old, same old?

Inflation is back in the UK:

http://blogs.telegraph.co.uk/finance/edmundconway/...

what an ugly picture in bonds. TBT might beg to differ however.

The Greek government is getting ready to ask for its bail out money. It is disclosed that this $50 billion is only a stop gap. The IMF under its French leader has offered to use US and other non-European taxpayer funds to contribute to the bailout. The IMF offer appears to be in violation of the IMF mission to bail out only developing economies not than mature economies. I think the bond vigilantes are probably asking too little. They should expect some IMF donor counties to object and perhaps refuse to pay.

tobyt... sometimes a blind squirrel finds an acorn.. thank you, though.. several are high risk that I don't post, for obvious reasons.. the partnerships and phase development matter most to me, along with operating cash, float and hedge activity.. I am prepared to hold several for quite awhile, as patent expiration in the big boys is critical to their value .. one drawback is paper issuance ( xoma, although the drop was a good opportunity to add some ).. generally, unless a late stage phase II or mid-stage phase III, they will retrace to the mid-pivot. just trying to get a foot in the door early enough to withstand the market forces.. good luck and good trading....

since today seems to be a slow day in terms of comments posted I have a quick question.
I see that as both GLD/GDX are green with o.6-0.7% gains so to is HGD.to with about 1% gains. Is this normal? I thought that HGD.TO being a global bear ETF is down when GDX/GLD are up. Should I be looking at the individual stock in the ETF and see their performance? Any thoughts?

ovidet, the Canadian dollar is up 1.7% today. GLD and GDX are priced in USD.

It's the 'illusion of gold going up'.

call me cynical but i suspect this is nothing more than fodder for more broke underpaid journalists to write books about the downfall of banks they may have at one time invested in or wrote favorably of, about the mismanagement of a stock market they never understood well enough to make money in, and the masterminds behind it for all of us to direct our anger at.

every 8 or 9 years this happens and we just keep on jumping to the beat when they drag out a shooter to blame.

the only reason any of this happened or that these men were able to "bring" down an economy was because enough people were willing to take the financial risk to facilitate. anyone in the stock market must understand that implicitly there is risk, and that risk doesnt preclude vices such as lying and misrepresentation.

there was never a good reason to truly trust the large banks who led us to buy tech stocks at their peak, yet all was forgiven in 2005 leading up to the sub-prime crisis.

focusing on "charges" brought against GS or whomever the bank of the month is only distracts us from making money. if you truly believe banks are bastions of evil, then dont invest in them, dont hold money in their accounts and dont think that charges or jail time will change them. it never has and never does because people will get roped in all over again by the next prophet.

paulson charged with possible fraudulent activity involving a large bank and mortgages he selected before shorting his way to billions. the gold bugs who proclaimed "huzzah" at his every gold purchase and claims to a lack of gold in the GLD now must wonder what his true intentions were.

chasing false prophets not profits is the problem. posting articles about such and such buying gold or saying "gold is good, i wont ever sell it" are absolute nonsense. these are megalomaniacs, do yourself a favour and disregard most of what you read in teh papers as its written by broke ass writers who couldnt trade their way out of a paper bag, but take no slight in tarring those who actually try and fail, or calling greedy those who try and succeed, hoping to delight in their eventual downfall.

financial markets have become for many a spectator sport, populated by analysts writing articles about how much the hometown team will win by, and a total lack of checks and balances to hold their asses to the fire when its revealed that their predictions are hollow and baseless.

gold will go up when its ready. not when some clown in a nice suit say so because of debt problems that have plauged western nations for 200 years.
theres never been a time when issues of debt and teh economy werent an issue. its always a "pivotal time" a "time of change" or a period of "challanges".

hold fast gang.

The small H&S structure from yesterday has been invalidated by todays rise. It looks to me like an ABC corrective move with B-up finishing. Makes sense for a bounce out of the 11wk cycle low being the bottom of C-down. The shape of the bounce out of the bottom of C will be critical in establishing how high the last of the 22-week cycle will move. SPXU back on.

Volume was high on the sell-off and weaker on the rebound. Commodities still weak but a small recovery today. BDI still declining.

The slope of the 150dEMA SLV:GLD has turned negative, as has the GDX:GLD. Dance floor less crowded.

Hacked screen view from inside the PPT pump station:

http://tinyurl.com/2ga79v

list... President, along with FBI, want to make mandatory for criminal indictment in all 50 states... Public labs ( non-government ) are set to benefit in the coming years...

There has been some interesting discussion of the short metals position and the 100:1 Ponzi on the metals futures at King World News:

http://tinyurl.com/np3kzr

Jim Ricards, Andrew Meguire, Harvey and Lenny, GATA,... over the last 2 weeks or so.

It would seem to me that the PM short will ultimately cause a dramatic rise in Silver prices. The issue with SLV, GLD is they will not be able to pay out superspike prices because once the jig is up, they will establish a cash settlement date stake in the ground, while the physical market goes parabolic for who knows how long and how many times higher.

how do you feel about sify ? Thanks,

looks like an interesting indian web play......earnings on the 23rd.............DYOD

thanks...did not make the connection even though I knew the loonie was up. All due to expected rate increase at next bank meeting
http://tinyurl.com/y6ywbtf

A long time reader with a question.

Bill's RSI tool is a great idea, and I'm wondering if anyone here has developed something similar that would allow you to review stocks or commodities that are not part of The Cara 100 in the same format?

Anything anyone cares to share?

If this has been covered before apologies.

Thanks

now we know one of the reasons why BLK has been trending down. It's nice to know that we investors know after it has made its move.

The tool works for most listed stocks. I don't think it does futures, but you could put in corresponding etf. Neat thing is once you input the ticker symbols in you can bookmark that page and not have to re- write the ticker symbols. Also I believe Olaf has made a program that will input google watch list stocks write into the RSI tool. The only downside is it seems that every stock in the whole world is above RSI 70, so the tool may not be as useful as a more "normal market"
Bob

this company is insane.

ALOHA!!

"... not when some clown in a nice suit say so because of debt problems that have plauged western nations for 200 years."

Debt has been around since and before Roman times and in fact it was excessive military and government expansion that brought on the overwhelming debt that killed off the Roman Empire, otherwise we would still be ruled by Ceasar now.

American and global debt has never been this bad until we dropped the gold standard by "default" in 1971. See where 1971 is on this chart?
LINK: http://research.stlouisfed.org/fred2/series/GFDEBTN

The problem has never been the "debt" but the double barrel shotgun of "exponential spending" combined with "exponential debt" from the path of exponential growth in government and misallocation of capital from promises made to US Voters in order to retain a political and monetary monopoly. It boils down to our ability to pay our debt without issuing more debt on top of staggering amounts of embedded debt.

Look at this chart now and see what happens when there is no brakes on spending(net outlays)right around 1971. Check out the steep curve(or loss of curvature) right around year 2000. Is it a coincidence that government expansion and spending went parabolic after 1971? Now take a look at the little "bump" around 1940 during WW2. Krugman would have you believe that debt does not matter because we were able to pay for WW2, except we did not pay for it with our capital as we were net exporters( of oil, etc) and creditors then. It was Europe and Asia that owed us after WW2. However as we know the tables have turned and now we owe the rest of the World as we now are a major debtor not a creditor. That is a major difference between America after WW2 and America after 9/11.
LINK: http://research.stlouisfed.org/fred2/series/FYONET...

These two charts especially FYONET shows why it is useless to even have US Income Tax any more. These two charts explain why gold and silver and the commodities have had such run-ups. When will these two charts correct? Two answers:

1-When the US Treasury defaults
2-When US Voters vote out the two party monopoly

Which of the above two outcomes is likely to occur first?

Then we see why debt has not been an issue as much in the past, but look now at revenues(receipts).
LINK: http://research.stlouisfed.org/fred2/series/FYFR?c...

All of the above is for "Federal" government and US Treasury, but US States are in as bad or worse fiscal condition. Who will "bailout" the States?

Then let us not forget the amount of debt held by households. Still at record multi-decade highs.
LINK: http://research.stlouisfed.org/fred2/series/CMDEBT...

As Americans we live and breath debt. It is as much a part of our lives as the blood in our veins, even for those who are "debt free", we must accept the debt burden for those who are not. Those who are debt free continue to "pay" in the form of higher taxes, less jobs and a progressively lesser lifestyle than our parents and grandparents.

The result of more misallocation of capital and more debt is less of this ...
LINK: http://research.stlouisfed.org/fred2/series/PSAVER...

To make the mistake of thinking that like real estate prices, debt goes up forever is sheer hubris. Unfortunately that is exactly what the White House, the US Congress and the US Treasury are all full of.

bobbyo -

"The only downside is it seems that every stock in the whole world is above RSI 70, so the tool may not be as useful as a more 'normal market'"

Try MON to counter your statement. If the market is overbought, RSI is telling you something in an "abnormal market" too. Patience is a virtue or go short with SRS at your own peril. By gawd, man, don't blame the tool!

Cheers.

I currently use Tradestation (short-term trades, generally) and the think or swim module of TD Ameritrade (longer-term) for trading, and am fairly happy with that, but I'm curious what others are using these days, especially in the way of flexibility of scanning.

Do you have an opinion on whether the services of stockcharts.com, freestockcharts.com/Worden, finviz (or something else) are better than the others, especially in regards to scanning capability?

Thanks in advance to any who care to reply -

re: RSI tool....it is a fantastic tool, but remember, RSi is an oscillator and oscillators can stay "overbought" a long time in a trending market, even if it's trending in drips and drabs like our recent slow upward grind.

http://www.smirkingchimp.com/thread/rj_eskow/28144...

The story is this: As almost everyone knows by now, the SEC filed a suit against Goldman over a program called Abacus. The suit alleges that Goldman didn't tell Abacus investors that the bonds they were essentally insuring were being picked by a firm (Paulson) which was betting that they'd fail. Remember that Twilight Zone episode called "To Serve Man," where the aliens promised to help everybody but were really just getting ready to eat them? In this story the investors are the humans and Goldman's execs are the aliens.

The slide show Goldman used to pitch Abacus is pretty damning. It starts with so many pages of fine-print "disclaimers" and "risk factors" that it seems like a Viagra ad ("call your doctor if ..."). There's a lot in there about well-respected (but at best gullible) ACA, this firm that Goldman claimed was picking the bonds. About half of the 66 slides sing ACA's praises, but there's no mention of Paulson. There are long descriptions of ACA's capabilities, their "internal" and "external data sources," and their "defensive trading" designed to "minimize real market value exposure."

To serve man. "It's a cookbook!"

Here's where it gets uncomfortable for Geithner and some executives. Remember all that criticism of the taxpayer-funded AIG bailout, and how under Tim Geithner's direction (he was running the New York Fed then) AIG paid 100 cents on the dollar to Goldman and other "counterparties" for its debts? It turns out that AIG insured seven Abacus deals, and the debts they were ordered to pay may have included payoffs on some of these deals. It turns out that AIG reportedly wanted to pay 60 cents on the dollar, but Geither's New York Fed directed them to pay the full amount.

AIG paid $13 billion from its bailout to Goldman at Geithner's direction. And now, as the Wall Street Journal reports, the SEC "is investigating whether other mortgage deals arranged by some of Wall Street's biggest firms may have crossed the line into misleading investors." And, while "It isn't known what deals the SEC is investigating," the Journal adds that "among the firms that created mortgage deals that soon went sour were Deutsche Bank AG, UBS AG and Merrill Lynch & Co., now owned by Bank of America Corp."

Not to overstate the obvious, but the single most successful strategy of the past 13 months has been to stick with the trend. And I don't know that we've needed much more than a daily glance at the index charts to accomplish that.

aiki,

depending on what are you looking for re: scanning capabilities, IntelliScan is as flexible, customizable and powerful as they get for intraday alerts (http://realitytrader.com/iscan/)

Excellent points, Bill. Trending markets can get overbought and STAY overbought for months and even years. When that seems to be the case, it is no sin to sit in cash. I know people want to play in the casino and people like you and Vad are VERY adept at doing so. But for the average smuck like me, cash can be a hedgehog strategy until the smoke (or the fox) is gone.

Obviously in the long run, cash is trash. The FRNs will lose purchasing power faster than a babe outgrows his shoes.

I for one wait with baited breath your assessment of the Cara junior miners. If gold et al has at least a double coming down the pike, the miners SHOULD be at least a quadruple. This value investor needs to cowboy up his porn stash of shiny metalic objects and the diggers of such.

On a somewhat cautious note, another market 'savant' that I follow is advising a very defensive posture. Uncle Jeffy Saut at Raymond James has been playing the game almost as long as I have. He sells his firms products and research as he should but pulls no punches when it comes to unbiased honesty.

Bob, yes, it has all US exchanges (NYSE, AMEX, NASDAQ), OTC/BB, Pink sheets, TSX and TSX.V

I too thank the person who posted the system results list the other day. Of course, like many of us, my eye was drawn to the Potroski results for 2008. I hunted around to find what it was all about and found the 9 points others have posted here - an interesting attempt to quantify Graham/Buffet trading methods. Nevertheless, over the last few days I have really started to question the results quoted for 2008. What was it? +70%?? I'd like to see the details of the trades and holdings that produced that result in that year! As we all remember vividly, it ws bathwater, baby, and then tub that all got tossed in Fall '08. Doesn't matter how good the company was; they all got smashed. I know, I was trying to scoop up bargains on great companies like crazy in the Fall and despite using careful position sizing methods, even accounting for rapidly changing volatility, it was impossible to END 2008 much better than even.

Essentially the market trend trumped fundamentals, again. I'd suggest that we try and find the the actual details of the trades of the P. system before getting too excited about it.

The return for 2008 is 32.6% not 70%. Can I believe there may have been a select few stocks that did well however rare in that period? Yes!

With over 50 methods why does everyone want to focus on the the best performer only?

You tell me.