Bill Cara's Blog for Feb 2, 2011 [See post-close report]

last time I looked at an important inflection point in Uncle buck, it was running up against a trendline resistance that held. Now it's the opposite. Long-term trendline support. One reason I was short until close. The $ was falling into support yesterday and has bounced a little this morning. How far and for how long is anyone's guess.

Don't call me Shirley.

Bill Gross in his recent monthly rant compares the Bernanke FED, and even the president to SATAN. Bill is quite peeved as to the money printing and govt. manipulation. This is a worthy read, just as much as the Treas. Sec. interview in my opinion. Bill makes the case that this negative real interest rate ponzi will not last much longer. Implies bond investors should not put a dime in treasuries and seek higher yields overseas.

Here are two ETF's that don't roll futures contracts:

iShares Dow Jones US Oil & Gas Ex Index (IEO), which is an equity play on the oil and gas exploration industry and includes Occidental Petroleum Corp (OXY), Apache Corporation (APA) and Anadarko Petroleum Corp (APC) in its top holdings.

Vanguard Energy ETF (VDE) is a diversified energy ETF play which boasts 161 holdings. Top holdings include petroleum giants ExxonMobil (XOM), Chevron (CVX) and ConocoPhillips (COP), which are heavily involved in nearly every aspect of gasoline production.

I am looking at shorting UGA if it pops up a bit today...

thanks Kerry. I'm just more interested in a direct crude-tracking instrument, rather than an oil company(s) proxy. Just can't fine one. May have to open a futures account. Cheers.

http://tinyurl.com/45dpete

WASHINGTON (MarketWatch) — Private-sector employment rose in January, and “strength was evident” in all major industries and sizes of business, according to Automatic Data Processing Inc.’s employment report released Wednesday.

The ADP report showed that private-sector employment rose 187,000, with the service-producing sector gaining 166,000 and the goods-producing sector increasing 21,000.

Employment rose 97,000 at small businesses, 79,000 at medium businesses and 11,000 at large businesses.

For December, ADP reported that private payrolls gained 247,000, compared with a prior estimate of 297,000.

Less than a rousing response to those numbers.

Bill Gross had better watch his tongue.

Giving Satan a bad comparison like that could cost Bill dearly — for a looonnnngggg time.

BRCM - PT Lowered from $50 to $47 @ RBC. Outperform

BRCM - PT Lowered from $51 to $48 @ Stifel Nicolaus. Buy

CHRW - C.H. Robinson downgraded to Equal Weight from Overweight at Stephens.

CHRW - PT Raised from $77 to $82 @ RBC. Outperform

I posted a similar chart several weeks ago too. At that time I thought we would get to the upper line, but that didn't happen and my UUP was stopped out. But now, I'm thinking the resistance will hold. Bought some UUP calls this AM.

I repurchased EEM puts that were stopped out yesterday, technically EEM is making lower highs and lower lows since beginning of 2011. My USO puts and UNG calls are holding since yesterday.

I'm also eying gold/silver/miners for long term purchase.

It is interesting that after two rounds of money printing which theoretically should have crushed the buck, its still doing more or less fine. Same with treasuries. It amazes me, and I don't really have an explanation.

kenley55 -

"I'm just more interested in a direct crude-tracking instrument, rather than an oil company(s) proxy. Just can't fine one. May have to open a futures account."

That's easy: Just go to a local fuel supply company, the little guys who deliver fuel oil and such, and set up a contract for storage of a refined product that stores well like diesel and sell it back to him for a profit.

Stay thirsty my friend.

Looks like it's getting worse "blood everywhere" says BBC reporter a minute ago...
http://www.bbc.co.uk/news/world-middle-east-12307698

The life blood of Big Pharma is its huge research budget to keep the billion-dollar miracle drugs in the pipeline. So Pfizer's new CEO almost eliminates its research budget to stay out of the red short term and, EUREKA!, the stock goes up.

http://news.yahoo.com/s/nm/20110201/bs_nm/us_pfizer

Unbelievable. No position and I don't need any Viagra, thank you.

Jack and Dave,

With rates still held artificially low and other nations taking turns at seeking the "worst currency" title, I expect the US dollar still has a bit of allure to it.

As for the US economy, I see this also as a mirage. Yes, a number of companies are reporting good earnings, but much of this is due to foreign labor holding down costs and foreign sales boosting bottom lines.

The average US consumer is buying by using savings (I think I read that by David Rosenberg.) and the checks from unemployment pay. Since the US economy has been 70% consumer dependent this will continue for as long as taxpayers allow these checks to be issued.

Old guys on Social Security (like me) are not getting any increases and can't trust investment regulations and accounting anymore. Young people are having a tough time competing for jobs with SS subsidized retirees — we are setting up an age conflict unlike we've ever had, IMO.

None of the above says, "Good Economy," to me.

How long this can last is unknowable and I wouldn't put any money on predictions. When someone as experienced as Bill has trouble coming to conclusions, I'm even more cautious than usual. (40% cash)

Be careful with long-term storage of fuels. Here is just one source of advice:
http://fueltechinc.com/reference-from-authorities-...

On the chart it looks like a modest short to me: Sell at 18.80 or higher. Stop loss 19.31 (-2.7%). Target 18.01 within 2 weeks (+4.2%). Not enough reward/risk for me but tempting nonetheless. It would be a straight repeat of January 2010.

Kenley,

Take a look at HOU/HOD which is run out of Toronto and tracks next month's NYMEX crude futures. It is a 2x ETF and can also provide a currency play if you are located outside of Canada. It is usually amomg the volume leaders on the TSX so there is Lots of volume and liquidity. Go to Horizon Beta Pro on the web and DYODD.

Zaydac -

Here's a good run down for the farmer in you:
http://www.backwoodshome.com/articles/warner43.html

BP gives diesel five years if managed properly:
http://amsca.com/files/Download/Fuel_news_long_ter...

You can also take used motor oil and put it in a barrel and wait a few months for all the carbon to drop to the bottom. The old oil is as clean as the retail stuff you buy off the shelf.

Local distributors will contract fuel oil prices for up to a year.

Gold is easier ...

OK, a bout of sudden, violent food poisioning (fast reaction, over quick) has triggered by concerns about food safety. In particular, GMO corn world domination has me thinking: just what is in this stuff?

GMO's main advantage to the grower is that the seeds allow a massive use of Roundup on the plant which results in my eating the 'natural' plant that was sprayed with poisons. The main advantage of GMO to seed companies like Monsanto are the extra chemical sales and patented seeds that pay a huge royalty if their patented genes wind up in a farmer's own seed stock (what do you think pollen floating on the wind for miles does?) and this practice is decimating indigenous corn species.

But back to my story: I called the nice folks at Orville Redenbacher the manufacturer of the product I ate. They answer the phone as "a ConAgra company". The nice person who apologized profusely for my experience did not encourage me to report this incident to any health authroties. The did, however, offer me $30 gift certificate (for a $3.00 product!) and coupons for ConAgra products as a nice bribe to shut up. I thanked them and offered to gift those items to my local food bank and informed them I was calling my health department and FDA next.

So I found this site that directs information about food poisioning to the appropriate health department in your state: http://www.reportfoodpoisoning.com (or does it? I will find out by calling my health department next)

If we think a 'natural' product as innocent as popcorn is safe, we have another think coming. Corn kernals are growing on stalks of plants, thinly protected by a few leaves with silks that draw in poisons to the seeds as they grow. GMO plants were engineered to resist chemical pesticides so farmers could avoid weeding and pest damage. So massive pesticides are sprayed on them as they grow several times. We really don't know the effect of the DNA rigged product or the pesticides on our bodies long term as they tend to build up in our cells and organs. All I know is my body violently rejected that particular microwaved popcorn. I admit I purchased this product on a whim. I prefer organic popcorn and normally cook it in a pan.

I want to send the remaining product to a lab for testing. Rancid oil is often the culprit according to my reading on food poisoning. Turns out the 'natural' butter in this product is actually palm oil with some preservatives and a whiff of milk. How can they even call that butter much less natural? Silly me for thinking a big name like Orville would actually have something safe for my evening movie snack!

Interested if anyone here has sources for food safety and food poisoning or experience with GMO's. I know a lot of investors here are keen about BioTech and I am just suggesting it's not all it's cracked up to be. I spent a lot of time reading the massive scientific data presented against GMO's when I lived in New Zealand and it really opened my eyes.

My next movie is Food, Inc. Maybe without the popcorn, huh!

Yes, I sold some near AEM puts a few days back. No calls yet, but like NGD (which I also bought)

Supposedly that is bad for stocks, but this is not a strong enough indicator to rely on.

My personal take is that we are going by a stealth stock correction right now that you can see in some stocks, especially small cap, but it's hidden if you look at indices or blue chips.

as most know I am an option freak, RBY is currently at 4.97, think still one of bill's favorites and the $5 feb call (12 trading days to exp) is bid .25.... thats a 5% cash on cash return for a little over two weeks.........also been doing options on BG in here, a classic ag play selling at a real lo PE w/div coming up, STX doing OK in here also and is a VERY low level take-out story............DYOD....its REALLY cold down here in Texas, rolling blackouts/frozen pipes (forgot how fast one has to drip them in teen weather)......best to everyone......

http://tinyurl.com/5vdbgbh

Great that the government is supporting Jon Corzine, CEO of MF Global by making him a primary dealer. Great, absolutely, freaking great.

Earl, thank you for the time it takes to do one more thing and add my community picks to the list. On a lackluster day as today with junior minors sliding sideways it is good to see my pick CGR at the top of the miner’s list at Google by percentages. I think it is a good indication of perceived value to be a leader in a sector loosing share value as are the junior miners today. With that said I don’t read much more than this business is expected to produce more product than it has before.

Claude Resources year end report 1/25

http://tinyurl.com/6b4bxeq

“Vice President of Mining Operations Philip Ng stated, "We had another year with improved operating results in safety, environment, production and margins due to the efforts of our employees and improved gold prices. Obtaining the necessary approvals and permits for the Santo 8 Project in 2010, Claude has set the foundation for significant production growth at the Seabee Gold Operation through 2013. To further improve operating efficiency, shaft deepening at the Seabee Mine commenced in the second half of 2010 and is expected to be completed in the first half of 2012. This will extend the economic life of the Seabee Gold Mine as well as materially lower unit operating costs."

In 2011, Claude plans to mine from its Seabee Gold Mine and the new Santoy 8 Gold Mine. A commercial production decision on Santoy 8 is expected to be made in the first quarter of 2011. Production from Santoy 8 is expected to increase from 200 tonnes per day during the first quarter of 2011 and exit the year at 400 tonnes per day.”

http://tinyurl.com/67m3ze2

“In Canada, the most prolific gold mining district is the Red Lakes District. If you want to find gold, it helps to have ownership in a Red Lake property. It is the heart of high volume gold production in Canada. Claude Resources Inc. (AMEX: CGR) is one of the few companies to own one of the historic mines in that district. The Madsen mine is still fully permitted with a mill ready to operate again.

Claude Resources owns 100% of the 10,000-acre location, with its working 4,000ft -plus historic mine shaft, and permitted mill and tailings system. The company will be able to put the property back into operation once its fully dewatered, rehabilitated and new high-grade reserves have been mapped out.

Remember, back in 1989 another Canadian mining company, Goldcorp Inc. (NYSE: GG), purchased the Arthur mine in the Red Lake district. The company reevaluated the geology over the following years, drilled a series of new exploration holes in 1995, and subsequently made one of the largest gold discoveries in history. Red Lake Mine in 2009 produced over 600,000 ounces of gold for an average cost of $288 an ounce, making it one of the richest and cheapest sources of gold on the planet.

The Madsen mine is about six miles from the Goldcorp Red Lake mining operations. Claude Resources has spent the last couple of years dewatering the mine so that new modern drilling rigs can be installed into historic operating levels to increase the known resource base.

The new drilling will allow the company to look for the same types of zones that Goldcorp found in the Red Lake mine complex next door at lower depths than where Madsen was last mined.

http://tinyurl.com/5s9yz56

So, if you’re going to pick them, it would be nice to post supporting evidence to the why when you come accost it for the community.

I have a position in this company from the 90 cent range.

This one should take you right back to 1970.

http://tinyurl.com/65ovlkt

The lyrics take me right back to VXX.

There she stood in the street, smiling from her head to her feet
I said, "Hey, what is this?"
Now baby maybe, maybe she's in need of a kiss
I said, "Hey, what's your name, baby?
Maybe we can see things the same
Now don't you wait or hesitate
Let's move before they raise the parking rate"
All right now baby, it's all right now

Took her home to my place, watching every move on her face
She said, "Look, what's your game?
Are you tryin' to put me in shame?"
"Baby", I said, "Slow, slow, don't go so fast
Don't you think that love can last?"
She said, "Love, lord above, now you're gonna trick me in love"
All right now baby, it's all right now

Loannetter,
I just tossed my Orville in the trash. Thanks for the information. I passed it to my better half that likes looking into these matters.
best regards,
Earl

Agree with Bill about the Egyptian National Museum. They will get the Nefertiti statue from Berlin when the Nile freezes over. Same with Greece and the Elgin marbles.

History is too precious to entrust to any country where mobs with pitchforks and access to glass bottles and gasoline look at rioting as a sport. Classic Egypt has been a dead civilization since before Alexander the Great. Classic Greco-Roman civilization expired before Aleric. India had no idea that they even were once a civilization until the Brits dug it up for them.

For all our warts, Western Civilization has been caring and respectful of the past. I doubt that there was ever a 'historic district' in Athens or Thebes.
The Chinese custom of "adopting ancesters" bewilders me still. I think they are still learning about their long dead civilization.

If Egypt with a strong standing army and mega bucks in foreign aid (peace money) from the U.S. taxpayer can devolve so quickly, Pakistan must surely be next. We need to declare victory in Afganistan and withdraw before Pakistan hits the fan...

I guess we could always send both of them American grain and drive up prices so that I'd be forced to sell you hamburger for $9.99/lb. Seems fair to me.

Ross -

"Agree with Bill about the Egyptian National Museum. They will get the Nefertiti statue from Berlin when the Nile freezes over."

Yeah, but Dr. Hawass was successful in obtaining some artifacts from guilty hoarder universities here in the U.S. attempting to make some type of amends in a vain professor's quest for a Nobel Peace Prize, no doubt. Which makes me wonder what will become of Dr. Hawass' mega pet project - coined as the 'fourth pyramid' - started in 2002 and now nearing completion with a $550 million budget. So much for preserving history or even civilization for that matter!

http://tinyurl.com/6eg87g5

Even the British Museum scoffs at the thought of giving back that piece of Sphinx's beard or the Rosetta Stone to the new Hawass super museum or even my Uncle John's Vickers Vimmy, the first to cross the Atlantic non-stop (but not solo) to ME. So much as step in their way and it's a corporal yelling QUEENS GUARD! STAND CLEAR!

The Egyptian gov't camel cavalry in the Cairo square yesterday reminds me of an old admonishment ... the beatings will continue until morale improves!

Cheers.

What's sad in this whole story and mostly forgotten is that a) a number of weeds are now resistant to roundup, 'requiring' further 'technological innovation' and b) American honeybees are in massive decline. One or a number of these extravagant aids to American farming are suspect in this decimation and still no action is taken.

http://www.spiegel.de/international/europe/0,1518,...

There is big change coming in this space I think.

Les, The news is not forgotten, it is repressed for obvious reasons by the usual suspects.

Of note for the $ watchers is Twiggs use of 76 as support, of which he expects a retest. Higher trough in his momentum indicator would suggest bullish divergence and confirmation of support. Something to watch.

http://www.incrediblecharts.com/tradingdiary/tradi...