Bill Cara’s Blog for Oct 14, 2010 [See post-close report]

Good morning.

No POMO Injection Scheduled For Today

8:30 - Initial/Continuing Claims
8:30 - PPI/Core PPI
8:30 - Trade Balance
11:00 - Crude Inventories

Google (Cara 100 GOOG) reports after the bell

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LLTC - PT Lifted from $34 to $35 @ FBR. Underperform

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"We have, in this country, one of the most corrupt institutions the world has ever known. I refer to the Federal Reserve Board. This evil institution has impoverished the people of the United States and has practically bankrupted our government. It has done this through the corrupt practices of the moneyed vultures who control it". — Congressman Louis T. McFadden in 1932 (Rep. Pa)

*(US) INITIAL JOBLESS CLAIMS: 462K V 445KE; CONTINUING CLAIMS: 4.4M V 4.45ME
- Prior Initial Jobless Claims revised higher from 445K to 449K
- Prior Continuing Claims revised higher from 4.462M prior to 4.51M

- 4 week Avg claims 459K v 455K prior

*(US) SEPT PRODUCER PRICE INDEX M/M: 0.4% V 0.1%E; EX FOOD & ENERGY M/M: 0.1% V 0.1%E
- PPI Y/Y: 4.0% v 3.7%e
- PPI Ex Food & Energy Y/Y: 1.6% v 1.5%e

*(US) AUG TRADE BALANCE: -$46.3B V -$44.0BE
- Prior revised higher from -$42.8B to -$42.6B

Components:
- Imports M/M: $ v $196.1B prior
- Exports M/M: $ v $153.3B prior
- China: -$28.04 v -$25.92 prior
- Japan:-$ v -$4.95B prior
- Canada: -$1.35B v -$1.4B prior
- OPEC: -$9.01B v -$8.04B prior
- Mexico: -$ v -$-5.34B prior
- Europe: -$ v -$9.9B prior

"Could inflation also be why no one is impressed with earnings reports?"

I for one am impressed by recent earnings reports and I have been pretty much yelling this for a few months now.

SLW - Silver Wheaton downgraded to Hold from Buy at GMP.

The rally is into its seventh week, and they're lined up outside Gilley's (or Schwab) waiting to take a shot at it. At this level, it's a little late to be opening longs, as one is likely to get thrown off. On the other hand, it's also no time to be short- you would simply be gaming the mirror image of movements in the bull. And if you're playing with leveraged inverse ETFs- by now we all have a mental recording of Sponge Bob wishing us 'Good luck with that,' right?

My recent experience with INTC was a timely reminder of the unpredictable nature of potential turning points- actually, it was also a timely reminder that I'm getting too old for this [stuff]. The correct play right now is probably to wait for the crowd to tire of the mechanical bull, and then pick up where I left off on the long side (I'm still bullish overall). I don't mind paying higher prices at that point.

Of course, I don't rule out intraday forays into TZA should I sense the bull about to slam Travolta on his [back].

An interesting video at Mish:

Emerging Market Economies Turn to Capital Controls; Forex Market in State of Disarray; Gold's Message; Life Imitates Art

Clip from the movie, "Rollover".

http://globaleconomicanalysis.blogspot.com

Anyone have Bernanke's email address?

In tza 22.50

I am a fan, forced not chosen. If he lost his position tomorrow, I would no longer be a fan. I can't imagine having the job of fixing this mess and I have not lost complete confidence in his abilities.

If he was to drive the market down and strengthen the dollar before year end, QE2 would be much more effective next year. It would also bring more tax money back to the government at higher rates. They could also make a ton of money in contracts as the market has a couple months on sale. A couple months to allow for M&A.

That's what I think would be a good plan but I also know Bernanke knows much more than I do. I hope he can work it out. I'm still in the reserves and don't want to be back in that damn submarine!

Udall commented yesterday that if the rest of tech is rising this should be in the $21-22 range. If not, it provides deep store of value to portfolio in a market correction. They played their earnings prudently and well. Second mouse may get the cheese. just purchsed at $19.3

KO - numbers raised at UBS. Shares of KO now seen reaching $65. Estimates also increased, given better demand in emerging markets and the U.S. Buy rating.

LLTC - Downgraded at Barclays to Equal Weight from Overweight as the company guided for slightly lower December revenues and bookings. Price target trimmed to $33 from $35. 2011 and 2012 EPS estimates set at $2.36 and $2.38, respectively.

LLTC - numbers lowered at Morgan Stanley through 2012. Inventory is likely to grow in the coming quarters. Overweight rating and new $32 price target.

LLTC - estimates increased at UBS through 2012. Company should continue to see higher demand from communications and industrial customers. Neutral rating and $31 price target.

MSFT - price target cut at Credit Suisse to $36 from $40 on softness in PC sales. Maintain Outperform rating.

SBUX - estimates, target boosted at UBS. Shares of SBUX now seen reaching $31. Estimates also upped, given higher retail sales expectations. Buy rating.

Price up, but timing no idea.
Transition to ant gas fired utilities.

http://seekingalpha.com/article/229722-natural-gas...

I'm over at the FAS/FAZ table trying to decide if I want to make a play...

thanks for the link. I have been bullish on gas and accumulating UNG calls on dips in the last couple of days. UNG is nasty and I need to transition to better vehicle for that trade. Rarely we have nat gas so oversold.
Just came in, UNG WOKE UP AND IT'S GOING UP.

on monthly charts, comparable to the peaks in 2006 and 2008 on weekly charts. If one could time the shorting, it would be fantastic trade. Not sure I could do it.

Don't forget to take your silver charts back past 1980 so you can see what it is capable of. It went from about $5/oz at the beginning of 1979 to around $50/oz. in 1980. So, it may be "overbought" but be careful. Shorting it based on the "it's gone up too much" thesis is dangerous.

eslr was quite a joy.. in the meanwhile, watching cpst.. lot of back and forth... GE seems to like their tech.. best to all.

Consumers Paying Off Debt?

Do You Believe In The Easter Bunny?

An enlightening view of the current state of consumer credit:

http://tinyurl.com/2wsrxoo

doubled up on tza at 22.25

I've been watching CPST for a few years now. Mostly lost on my trades, currently down in one account and about even in another. I really like their product and think they have a lot of potential but they just seem to not be able to get off the ground. Maybe someone big will buy them out?
Waiting for my FAZ to get back to $13 and go beyond; Lost $ with VXX, held on too long (or not long enough?).

Canadians (and others for comparison sake) may want to read this snapshot of Cdn fiscal state: deficits were almost eliminated but now back to 3.6% of GDP. Seems fairly benign compared to US and others. Harper will probably keep an iron grip on deficit spending.

http://opinion.financialpost.com/2010/10/13/willia...

I agree. I will swiftly turn bullish after today. Sizable POMO days tomorrow and Monday should bring us back up to 1185 at least, maybe 1200.

Just as a reminder, tomorrow October 15th (Friday) and October 18th (Monday) are both POMO days. Shorts beware!

I must have accidentally hit the "Easy Button". PCY has been stuck at $USD 0.55, no shares traded since yesterday until a few minutes ago. I just looked and it has jumped to 0.64, perhaps it was a technical reporting problem with the exchange?
J

Seems like the whole "mortgage gate" fiasco might be the catalyst to the end of this nifty move over the past month and half. Similar to the European debt issues in April.

Unless we get some POMO MOMO

$ESLR Looking tired

Why? I like the company, as you all know, and it's dropped almost 6% from my exit point yesterday. I don't think it drops much further.

Jack, UNG is nasty, but so are the natgas futures on which they are based. Its a freaking shark pit, and these guys run natgas up, and down, and all around based on nothing that I can see other than the goal of startling traders out of positions both bullish and bearish. Run it up - stopped out the shorts. Then run it down, stopped out the longs. Isn't this fun?

Natgas is not for the faint of heart. I have a very small position (one natgas mini futures contract) I use to keep my toe in the water. It moves $12.50 per $0.01 of natgas underlying movement (it controls 2500 MMBtu of natgas). When it moves above 4, I'll probably sell it off.

Every month, you lose your natgas futures contract when it settles out for cash, and so you have to perform "the roll" forward yourself.

With most of the major banks, I'm seeing a continuing series of lower highs on the daily chart. Today, the move down is a big price movement on 2-3 times normal volume on C, BAC, WFC, and JPM. That's a pretty clear signal to me that all is not well. The big volume implies real money is changing hands, and multiplied by the big price movement says that serious money is fleeing this sector.

One helpful thing I've learned (painfully) is that stocks that are dropping most often don't stop until they come across a natural support level. Sometimes it happens spontaneously, not sure why, but most often stuff keeps dropping until it reaches (say) 23 for your WFC. I'm also seeing WFC in a big descending triangle pattern, but there might be a nice bounce between now and the time it resolves.

Then again, I'm short XLF (inception a week ago - saw a lower high forming), and doubled up yesterday) so you probably don't want to listen to me.

Tell me, why are bonds dropping with the market off 7 points?

TLT is through it's 50 DMA and the move down today isn't just peanuts.

Interesting.

Thank you for the reminder Kaimu, now I have the full list.

If I had bought into those stocks when you first posted, my portfolio would look much better. There is always a wall of worry to deal with and my concern at the moment is watching for the counter moves in all these resource stocks when da boyz decide it's time the Euro falls and the US dolla rises.
J

Yep the TLT move happened at 100 ET, it was a somewhat soft 30 year auction (or so econoday tells us). Thanks for the info jet I haven't been paying close attention today. Luggie is a banker, maybe he knows something. :)

They are selling GM ipo hard! I wouldnt be surprised if Obama goes on tv and pleads to American's to buy stock and a gm car. Spend Spend Spend!

Article in the journal yesterday talked about the volt being a hybrid, not fully battery powered. No wonder so much pressure for China to tell us about their battery technology.

(a) Not seeing panic in the banking sector- betting on at least a ST bounce.
(b) I think GOOG rekindles the short squeeze in the technology sector.

Hi All - I have commented on this one before, as it has been part of the litter for some time now. NTC recently commenced limited production as China imports of tungsten drop and the price of WO3 increase, but it is the property they have in the wings that intrigues me. It is having a nice day on unusually high volume. Happy Trading

This is true, Volt uses the planetary gear configuration with 2 electric motors, gas engine, and output shaft elegantly connected by planetary gears. This is exactly what Toyota uses in Prius (I smell a patent infringement here). But Volt has more powerful batteries that even the plug in Prius will have (hence the sticker price).

FD: I just bought a new Prius and I'm loving it. Fun to drive (in a different sense of fun) and I'm getting 50-60 MPH in city driving.

Just putting it out there. Probably zero chance.

The best way to invest is holding the market overnight and selling in the morning, according to new research.

A new study from CIBC World Markets shows that over the past decade, all of the gains on the Toronto Stock Exchange have been achieved while the market was sleeping – in the daily differences between the level at which the benchmark S&P/TSX composite index closes one day and the level at which it opens the next.

Since early 2001, these overnight gains have generated an average annual price gains of 11.3 per cent, compared with 4.1 per cent for the index overall – and an average annual loss of 3.9 per cent during trading hours.

“In fact, an investor who had only exposure to intraday moves would have experienced a 35-per-cent decline in capital over the past 10 years,” wrote CIBC World Markets quantitative strategists Peter Gibson and Jeff Evans.

“In addition, intraday returns have been approximately 32 per cent more volatile than overnight returns, making the results even more substantial on a risk-adjusted basis,” they wrote.

http://www.theglobeandmail.com/globe-investor/inve...

Something new today. SPX is off -9, bonds are down, and the dollar is down all at the same time. Of course gold and silver continue up, though with less vigor than one might expect with the buck breaking below 77. Honestly, I thought the equity market would explode today with the dollar move, but it just didn't happen. SPX moved up in asia, and then sold off as the NY open approached. I'm still puzzling over what that means. Equities have lagged PM all during this rally, and perhaps they've had just as much QE pump as they can take? Or perhaps it was the lack of a POMO?

When "the usual stuff" breaks down, it makes me sit up and take notice. Possibly the mortgage fiasco is causing some doubt? (Will the banks lead us down?) Or maybe the selloff (after good earnings reports) in JPM and INTC had a one-day delayed effect on buyer enthusiasm.

One more thing. I admit it, I'm a chicken. I just bought some GLD puts to cover my PM exposure. Much as I like My Precious I think risk is elevated and I don't mind sacrificing a few percentage points off my return for some peace of mind. (RSI D/W/M = 82/91/79)

I'm thinking it's time to thump short-term call buyers ahead of options expiration. IWM is especially extended. Time for a consolidation at the least. I'm still bullish but have shed some additonal positions last week and this week. I'd like to see a healthy 5-8% correction and some further clarification of this mortgage hold situation and it's ultimate affect on the banks........short-term bearish, long-term moderately bullish

Thanks Les, I think this goes thru eventually. The fisheries are going to say what they have to say about the fish form their point of view. Trout lakes not hard to come by in BC. They are everywhere, and I doubt this one is anything special. My hunch is the money is too big to let that stop this. They've got 8m ounces of gold to boot, so the copper is coming out cheap, or vice versa.

This is worth a read.
http://www.minyanville.com/businessmarkets/article...

I'm going to institute the following. The chill winds of winter seem to be revving up in the markets, and no wonder. Just stopped out of EQIX at (2%)

Addison Cammack: A stockbroker from Kentucky who swore by the two-point stop-loss rule. “If you’re wrong,” he said, “you might as well be wrong by two points as 10.” He followed this method successfully and was one of the few bears to make a fortune on Wall Street and keep it.

You guys make sense, even if the markets don't sometimes (markets stay illogical longer than we stay solvent)... Nice to hear some seasoned voices. Hearing the FED admit in August it sees "inflation below a desired level" seems they are screaming "WE WILL INFLATE"... and the markets will follow too. They will not want repeat Japan... why would they... or anyone... what would that prove?

ALOHA!!

Whats normal anyway?

Whats normal that has been going for as long as I have been alive is the US Treasury spending and debting. They SPEND first then DEBT later!

With this "slow boil" on US Treasuries nobody can envision a debt default. If they could then it would be priced into the bond market and right now with record low yields what is priced in is UNENDING DEBT FOREVER at AAA!!! And believe me the US Treasury and the two party monopoly are obliging those US Debt bond holders to the umpteenth degree!!! That to me is as ludicrous as dotcoms and real estate going up forever.

The "real World" is split into two factions ...
Those who believe in DEBT(false wealth) and those who believe in commodities(real wealth). You can exist your entire life without any debt but how long can you exist without food, water or shelter? What we Americans have been sold is the con job that we "cannot exist without debt", hence the AMERICAN DREAM that has engulfed not only American citizens, but American corporations. The monetary system we now use is based on DEBT and so can only promote DEBT solutions whereby more DEBT is used to solve insolvency issues that have passed resolve. I so no resolve for anything but more spending and debt at the US Treasury.

Speaking of defaults,Japan is at the head of the line.
http://normxxx.blogspot.com/

Betting On A Japanese Default
¹²Betting On A Japanese Default

By Katie Benner | 13 October 2010

One hedge fund manager who accurately predicted the mortgage crisis says the "Keynesian end point" for Japan is inevitable. Japan is lumbering toward default, veteran investor Kyle Bass said Wednesday at the 6th Annual Value Investing Congress in New York City. As part of his presentation called "Does Debt Matter"? Bass described in stark detail how one of the largest economies in the world will eventually be stuck in a permanent structural deficit, whereby its revenues cannot cover the interest on its massive debt, much less the debt itself.

According to the International Monetary Fund, Japan's debt accounted for 218.6% of its 2009 gross domestic product, making it the largest public debt of all industrialized nations. While Bass, a principal at hedge fund Hayman Advisors, says he doesn't know when the situation will unravel for Japan, he argued that even now the country is toying with its "Keynesian end point". Its current social security expenditures and interest payments on debt total about 44 trillion yen a year, versus the 41 trillion yen the country is bringing in.

Bass is best known for predicting in 2007 that subprime mortgages were going to cripple credit markets, another situation that moved swiftly from impossible to inevitable. To bet on a Japanese default, Bass said that in general he is able to cheaply buy out-of-the-money interest rate call options on Japan,.....
J

Why do I doubt the inner voice ;)

Well, I took the stance that the market over-reacted to the fisheries notice, and will revert to preconceptions when aborbed. I added to my position at the close at $6.22. INitial position established at $6.45, We shall see.

Beats, up $30. No position.

Company announces it knows of no material change to cause the stock to lurch today.

I see a greater similarity to 2004, especially since 2009 was a carbon copy of 2003. I first mentioned that here in the beginning of 2009.

This brings something I always thought about. Buy 2 opposite securities, say FAS and FAZ. Have 2% stops on both and let the winner run say 10% and repeat. If one is concerned about decay, well short both opposing investments. Never tried it or backtested. Is it go or no go?

No, we are comparing apples to apples here. Meaning now it is October 2004, we jumped from the august bottom and after some consolidation will race to the december peak.

One thing to keep in mind, the gains are mostly due to dollar slide, so forex timing is all you need.

Screw it. No trust in the overnight action whatsoever in this crazy market...

I own equal amounts of AGQ and GLL. Its been working for me and may be a safer play than shorting gold alone.

Silver:
1 Day: +2.29%
5 Day: +9.12%
1 Month: +19.84%
3 Month: +33.79%

If that's not a parabolic move I don't know what is

jack,

sorry to say, but won't work. Would be too easy if such formal schemes could bring money.

Arbitrarily chosen numbers is a problem. Why 2%? Why 10%? Is there pattern that says 2% constitute a stop level after which they normally continue against you and if they work they reach 10%? Or you get 2% loss on one, then another moves 5% and reverses back down before reaching your 10%, thus stopping you on both sides?

Real chart patterns are not just taken out of thin air. They are based on certain behavioral patterns.

http://bit.ly/95abKa

As well as a Florida woman who called 911 when a outsourced locksmith was doing the banks work, meanwhile she thought she was getting robbed.

I wonder at what point all of that known stuff is baked into Gold. At $1,370 an ounce, up from $250 10 years ago?

You have to remember that gold recaptures the loss of dollar purchasing power. and we had lots of that regardless what $USD index tells.

But clearly gold is peaking in the intermediate terms. Suddenly everyone is talking QE, inflation and week dollar. Silver is not peaking but going totally nuts. This would be very profitable to short it timing is right.

Does anyone here trade currencies? When I was looking at Gold prices for June 7 and today, 1240.40 on June 7, 1381 on Oct 14, an 11 % gain, I noticed gold has gone from 1532.40 AUD to 1392.46 AUD in that same time, a 9 % loss. So if you bought an ounce of gold at 1240 USD in June, and exchanged another 1240 into AUD, your Australian dollars would be worth $1520 USD today, for a 22.5 % gain. So buying Aussie dollars would have been better then gold. Something I'm going to have to look into.

You are right on DaveM. The Brazilian Real has done even better (you can track these at http://nexalogic.com/gold.html) Gold still has a negative return vs BZF. It's not so much gold going up, it's the USD, Euro, CAD, etc, that have gone down. It's all relative, an illusion of gains. Same with oil.

BTW, the Yuan has been stellar too. Options were offered basically free last week, for a 28% gain (http://etfreport.blogspot.com/2010/10/cyb-yuan-etf...)

ALOHA!!

REVENUE BREAKDOWN
But you guys leave out what I have been pointing to since Q4/2008 which is the ever widening REVENUE BREAKDOWN at the US Treasury. I even covered that "tax revenue breakdown" for 30 weeks last year. Surely there are many more economists and sovereign wealth funds who see this besides me. Are we to incorrectly assume the market has already priced in an 800% shortfall in "real" tax revenues at the US Treasury? You have to measure total net tax revenues against total outlays. Remember you cannot count debt issues as "deposits"(aka:revenues) unless the bond holders are okay with never being paid back. And so the US Treasury continues to count debt as an asset.

When I first reported the US Treasury revenue breakdown in Q4/2008 the States were not yet in revenue breakdown mode. Now they are. All US governments on every level are now in Revenue Breakdown Mode(RBM) ... The original Q4/2008 RBM was confirmed in the next quarter Q1/2009.

Then do not forget many months ago Obama announced his goal to double US exports, which a lower USD would help enormously. But do the ends justify the means? If the DEMS want to retain power then they will be leaning on the US FED and the US Treasury to move the markets. Voters with their pension funds in the red will not re-elect the incumbents or even the party. Voters who rely on SS and MED will not re-elect a party that freezes SS benefit COLA and increases MED premiums. No the political path of least resistance is to spend more and debt more, damn the revenues.

The bigger question is "Will the rest of the World allow Obama to achieve his goals of doubling US exports on the backs of their economies all the while running up huge REVENUE DEFICITS at the US Treasury,paying for these deficits with US Treasuries on the backs of foreign savers and their economies?" Every point I make here is a "liability" against the US Treasury, against the USD and against the global fiat currency system. These, in my mind, are huge liabilities markets have yet to "price", even though gold and silver are moving in that direction. Never mind the major shorts at the COMEX covering.

IMO, your perspective is too short term. Gold hasn't changed at all. If anything its much more difficult to find, and as a result getting much more expensive to mine. I'd expect mining output to continue to decline as a result, at increasing costs. In addition, you can't count on "cash for gold" to extract 400 tons per year from American households forever, and the central banks seem no longer willing to sell 500 tons per year like they have been doing every year. That's going to give you a supply reduction in the neighborhood of 1000 tons per year, all told, as compared to a couple years ago. That's about a 30% reduction in supply, and from what little I learned with my Bus/Econ degree, reducing supply tends to cause prices to rise unless demand falls.

I'm not going to pretend I know all the answers, but in general, all paper currencies are being devalued currently, all attempting to garner export jobs from one another, and as long as we have paper money on a course for devaluation and debasement, gold will be more and more the stable store of value that the paper money is not.

Sure, Ben could get up there at 8:15 tomorrow morning and sing "A strong dollar is in our nation's best interest" song, but I think him more likely to say they need to reduce unemployment from its current intolerable levels, and just fail to mention that a blind eye will be turned to the inflation, and that the cost will be dumped on savers and future generations of Americans, none of whom has any say in what he or the Fed says or does. He didn't notice that QE1 didn't create jobs anywhere but China, so I have no expectation that he will notice that QE2 also doesn't create jobs anywhere but China.

In summary, sure, gold could pull back to $1000 if they create a panic, but long term, paper becomes worthless. Voltaire saw it. Nothing has changed since then, other than everyone has forgotten why paper can't be a store of wealth.

The shift out of dollars is underway. The Fed decided it wanted the dollar down, part of the current currency wars now being waged. The Chinese are trading dollars for anything that is not dollar.... Greek bonds, oil for their strategic storage, copper, iron, gold, euros, rubber, tin, grains, etc. Canadian and Ozzie dollar now at parody, Euro at 1.40 and Yen at 81.5, Real at 1.65. Even the Mexican peso has gained against the dollar. A Swiss franc is now worth more than a dollar. Isn't it nice to have your government destroying the value you have worked for and saved.
Someone suggested now that the miners have been rescued, we should now fill the whole with banksters and crooked politicians. I'd vote for that !!

Bernanke jawboning QEII seems to have worked well... I think the market has already priced in about a trillion QEII with its recent rise. Commodities up, precious metals up, stocks up... bond market propped up with interest rates down... all without actually starting QEII yet. Just the threat made the market move.

But will QEII work? Will rates go lower? Not much Will banks start increasing lending? No Will companies
hire lots of new workers? No Profit margins will get squeezed if companies cannot pass along higher material
and other rising costs, preventing expansion of the labor pool. Will Americans consume more and take on more debt? No Will it solve the problems in residential and commercial real estate? No Will confidence in the US economy grow? Highly unlikely. Will the government's financial health improve? No.

If Bernanke pulls a fast one and does only 500B QEII, look for a strong market pullback. If QEII goes to 1.5T, higher asset prices are probable. He wants a higher market with the hope it will create confidence and consumer spending.

Will gold correct.... very possible.... but IMO it will see through the faulty policies of the FED and continue its rise
through 2011. Purveyor of truth Goldman Sachs says gold to hit $1650 in 12 months and copper $5. I could see
gold retracing to $1250 on profit taking ( a big maybe) before powering ahead towards $1600. Trading in and out of gold could cost one dearly if some black swan type incident appears if your out of the market waiting for that re-entry price. Seller beware.

How will the market react to a Republican victory in the upcoming elections? Might be good for oil and its service sector. Bad for green energy. Good for defense industries. Bad for teachers and some civil service sectors. Perhaps
we'll get a realignment of spending from Republicans but probably not much change in the overall health of the dollar and the US economy. I think gold will continue to do it's thing and protect against the debasement of our Federal Reserve Notes.

Republican victory will not bring about any massive change. It will bring about gridlock. They won't pass anything Obama likes (so he'll veto it), and they won't pass anything he wants.

Mokat, no quibble with the logic here, just loved the (Freudian?)slip with regard to the "parody" of the $CDN and $AUD. Parity is what we Cannuks appear to long for, although hitching a ride on that elevator ride down is no great achievement IMHO. Just couldn't let Vad be the only one looking out for our command of English LOL. Peace from Toronto

Hi All - With all the talk of Au not too much focus on the small universe of U3O8 equities. I have noted some significant gains in this sector over the last 20-30 trading days. Likely the dollar thing + stimulus, but I think we are seeing some funds loading up & gaming this commodity group along with Au & Ag. Any thoughts on the sector, or on new horizons in this vein to consider. Happy Trading

Who's verdict?

Check to see if the major airports in the area were closed about that time... coinkydink...?

hehe

ALOHA!!

Likewise, probably not a good time for Americans to pick up Canadian or Australian equities if paying in USD.

Exactly ... I think now I have to look at emerging market exchanges like Hang Seng, Straits where I still get some bang for a buck! The only reason I hit the ASX is because I knew Australia better and in Jan/Feb 2008 I spent six weeks(3 fortnights) in Australia traveling the country on the Indian Pacific and Qantas stopping in at mining companies and interviewing execs as well as meeting up with Aussie investors I knew who were in the gold and mining biz. I had a great time and none of it seemed like work, more like a "trading adventure"!!! By time Q4/2008 hit I already knew what companies to buy as I watched their share prices and the AUD drop to record lows. I am not so well positioned in Asia or South America or South Africa as I was and still am in Oz. In 2011 I plan to be in Africa, mainly Ghana, building a bigger network.

Still if I look back to using the AUD/USD arbitrage back at Q1/2009 you could buy SLR(ASX) @ $0.17AUD, which was $0.11USD. Now with the AUD nearly at par with a USD you could sell SLR(ASX) @$2.48AUD, which would be $2.46USD, so in USD denomination that is a +22 USD bagger! Here you see the currency arbitrage kick in because in AUD its only a +14 AUD bagger ... This is the leverage you get when you venture to foreign exchanges and take advantage of currency spreads to buy quality companies on foreign exchanges.

It worked really well and it made my trip in Jan/Feb 2008 an outstanding opportunity. Besides I love Australia and used to live there so I consider Oz like my second home ... I think the only thing that saved me and allowed me to "pull the trigger" on large $$$ back when the markets were crashing in 2008/2009 was my confidence in company fundamentals and monetary trends. Without knowing the management on a personal "face-to-face" level trades turn into more a guessing game or reputations(aka: ROB POWER).

German steel manufacturers have won over regulators. This could play out in the share prices of both companies, if it is not already baked in. FWIW.

http://finance.yahoo.com/news/Germany-to-block-BHP...

EWZ is the go to for Brazil market action. A small cap ETF now available: EWZS. FWIW.

Kaimu,

I do have to hand it to you. Your conviction and timing on the Aussie trade was unbelievable. Considering the end of the world vibe that was going on at the time. You certainly didn't keep your moves a secret either. I remember reading your plans with too much skepticism. The best position call ever on this board. Are you scaling out of that position now? Also what is it about Ghana that intrigues you. Is it because it is the epicenter of the "GOLD COAST".
Congratulations,
Bob

S&P -1.00 / -0.09%
Level 1,172.50
Fair Value 1,170.07
Difference 2.43
Nasdaq +4.75 / +0.23%
Level 2,066.75
Fair Value 2,052.33
Difference 14.42
Dow -7.00 / -0.06%
Level 11,045.00

took some snapshots of this weeks trading in autos and French banks. Look at Soc.Gen. You wanna short that at the beginning of the week after dramatic drop Monday and those spikes just kill the bears. The shortsters appear to have been torn a new one and like the post close report mentioned, failed to capitalise on weakness.JMO. Nice db there on BMW.

illini- A total hip can be totally hip! Here's to hopping around again in no time. Check in when you can...

overbought remains so

Les,
Like any ratio, there can be a reversion to the mean by adjusting either factor. Do you think that reversion will be in the form of gold accelerating or silver dramatically falling?

"Republican victory will not bring about any massive change. It will bring about gridlock. They won't pass anything Obama likes (so he'll veto it), and they won't pass anything he wants."

Unless, there is massive popular pressure of course!

It would be nice to know the answer, wouldn't it, Les! Perhaps what we can infer from the ratio is that gold has lower risk and one's weighting should now shift from silver to gold. Because, if that ratio reverts to the mean, gold will perform relatively better. Not that it will feel good to be in gold if it takes the form of a fall, but the fall in gold should be less than the fall in silver.