Bill Cara's Blog for Mar 30, 2011 [See Post-Close report]

"Vanity of vanities; all is vanity,"

We are watching the meaninglessness of a market based on pretense and perpetuated to prove one man's theory.

Bernanke will continue to protect his vanity — if it kills us.

"This meaninglessness, as expressed by Ecclesiastes (1:2), becomes "vanity of vanities; all is vanity," with the Hebrew word "hevel" translated as "vanity," but which literally means "vapor" -- the insubstantiality of the vapor of breath."

http://www.jewishmag.com/97mag/shakespeare/shakesp...

Good morning.

5.5 - 7.5 Billion Dollar POMO Injection Today.

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7:00 - MBA Mortgage Apps (-7.5%)
7:30 - Challenger Job Cuts (-38.6%)
8:15 - ADP Employment Change (201K vs 210K)
10:30 - Crude Inventories

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AAPL - Apple coverage transferred with a Buy at Sterne Agee, maintains its Buy rating on Apple and raised its price target to $445 from $400.

CSCO - Cisco initiated with a Buy at Sterne Agee. Target $29

KSS - Kohl's downgraded to Neutral from Conviction Buy at Goldman based on lack of catalysts, limited EPS growth, and inflation concerns. Price target lowered to $60 from $63.

RIMM - Research in Motion initiated with a Neutral at Sterne Agee. Target $63

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"The truth is more important than the facts."
- Frank Lloyd Wright

http://blogs.knoxnews.com/munger/2011/03/ex-sandia...

Thanks for the link Johnny. From Ritholz's site the link to the scenarios laid out by a nuclear disaster researcher is the most pertinent and interesting, should you feel the urge to buy Japan right now.

Don't know how my Yen short works out in such a scenario. Mass repatriation of Yen or mass printing by the BoJ?

http://on.ft.com/hZrnrW

New email but nothing yet on their site. Gold is up this morning, but Davefairtex's excellent research (#66921) shows gold usually declines during the day and I feel PM's are close to a 'weak period'. The miners mostly follow the PM prices, so I don't know if UXG is a LT buy here. Still, good news.

"March 30, 2011 9:04am ET USA - US Gold: El Gallo Continues to Expand East & South
New High Grade Mineralization Discovered in Two Areas
TORONTO, ONTARIO--(Marketwire - March 30, 2011) - US GOLD CORPORATION (NYSE:UXG)(TSX:UXG) is pleased to announce drilling continues to expand the size of the silver-gold resource and upgrade the inferred mineralization at the El Gallo Project in Sinaloa State, Mexico. In addition, drilling has intersected high grade mineralization 400 meters (m) (1,300 feet (ft)) southwest of the El Gallo resource. Also, drilling on the recently discovered Alamo vein has encountered mineralization 150 m (500 ft) south of the previous exploration.
EXPLORATION HIGHLIGHTS

El Gallo & Surrounding Area:

-- Drilling continues to expand the Main Zone resource further to the east
and south. Intersections include: 132.4 gpt silver over 9.1 m, 115.9 gpt
silver over 9.5 m and 423.0 gpt silver over 3.5 m.

-- Infill drilling, designed to upgrade inferred mineralization to the
measured and indicated categories continues to meet expectations: 211.6
gpt silver over 14.2 m and 83.9 gpt silver over 14.0 m.

-- High grade silver-gold mineralization discovered 400 m (1,300 ft)
southwest of the El Gallo resource: 2,400 gpt silver and 39.3 gpt gold
over 0.6 m.

Alamo (7 km North of El Gallo):

-- High grade gold mineralization intersected 150 m (500 ft) south of the
previous drilling: 18.2 gpt gold over 2.0 m and 20.3 gpt gold over 0.8
m.

-- An extensive drill program is currently underway at several of the new
veins in order for them to be included into an updated resource
estimate, which is expected by year-end. Assays results for these veins
will be released in approximately three weeks.

"With a $30 million exploration program over the next two years, a large land package and multiple new discoveries at and around El Gallo, the potential to expand the resource looks excellent. We are pushing aggressively to grow the size of the project as we move it through feasibility and towards production," stated Rob McEwen, Chairman and CEO.

BBY - Caris & Co. Initiates with an Above Average. Target $36

Looks like their pulling an old safety kleen move from 2002
http://seekingalpha.com/article/260883-advanced-ba...

I see this speech was given nearly three years ago.

Every time I fill up I'm going to think of this. Disgusting!

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Congressman Don Young urges the opening of ANWR and the development of American Energy Sources. His bill, HR 6107, the American Energy Independence and Price Reduction Act, would open ANWR and use the approximately $200 billion in federal revenue generated to develop Alternative Energy sources

http://www.youtube.com/watch?v=MlfmvwxxgHM

Central Fund Prices Offering At $22.30 Per Class A Share
56 minutes ago - Dow Jones News
Central Fund Enters Into a US$320 Million Underwriting Agreement
56 minutes ago - Marketwire
Central Fund of Canada Limited ("Central Fund") (TSX: CEF.A)(TSX: CEF.U)(NYSE Amex: CEF) of Calgary, Alberta announced today that it has entered into an underwriting agreement with CIBC World Markets Inc., as lead underwriter, and Credit Suisse Securities (Canada) Inc. (the "Underwriters"), under which the Underwriters have agreed to buy and sell to the public, in Canada (except Quebec) and in the United States under the multijurisdictional disclosure system, 14,350,000 Class A Shares of Central Fund. The Underwriters have been granted the right to increase the size of the offering (the "Right") by up to an additional 1,800,000 Class A Shares, exercisable in whole or in part, at any point prior to 4:00 pm (EST) on March 30, 2011. The offering will be made under a third prospectus supplement to Central Fund's U.S.$1,000,000,000 base shelf prospectus dated September 8, 2009.

Watch out for yesterday's low being taken out. We could see further stop-loss selling.

Thanks Pillzilla, I was wondering what sucked the premium out of CEF. Thought it might be something like that.

This sort of thing will continue to put a constant demand for physical delivery on gold & silver futures. Just the 160M of silver will mean taking delivery on 864 SI futures contracts - or cashing in 180 tons worth of SLV.

According to Stefanie, registration and pricing info will be posted next week, along with registration forms and conference info. Conference is to be held at Westin.

rosevillebill, c2ski,

I've just compiled my topics amounting to 5.5 - 6 hours long session that is going to take place on Sat, Oct 1. It's modified a bit vs. previous conferences according to the feedback I get. Detailed breakdown of the session will be posted together with the rest of the materials.

Copper futures sharply extended their losses Wednesday on worries about economic growth.

The most actively traded copper contract, for May delivery, was recently down 8.25 cents, or 1.9%, at $4.2640 a pound on the Comex division of the New York Mercantile Exchange.

The metal slid after news reports said the International Monetary Fund cut its forecasts for 2011 gross-domestic-product growth for Japan and the U.S.

"The cuts in GDP are never good for copper prices," said Sterling Smith, an analyst with Country Hedging.

Copper is particularly sensitive to economic data because it is widely used to make wire, pipe and sheets for electronics, buildings, automobiles and appliances.

The metal had been slightly lower earlier after data from payroll company Automatic Data Processing and consultancy Macroeconomic Advisers showed private-sector jobs in the U.S. rose by 201,000 this month, compared with an expected 205,000 gain.

The metal also moved lower as crude-oil futures extended their own losses after a weekly government report showed U.S. oil inventories continue to rise.

Although high oil prices have been worrying investors because of the potential drag on the economy, index funds that buy both oil and copper may have decided to sell both after the inventory data, said Frank Lesh, broker and futures analyst with FuturePath Trading.

"Lower energy prices should be good for copper," Smith said. But "$104 oil is not that low of a price."

Meanwhile, inventories of copper stored in London Metal Exchange warehouses rose 225 metric tons Wednesday, leaving them at 439,725. The most recent Comex inventory data, released late Tuesday afternoon, were up 22 short tons at 84,747 short tons.

bullish flag or sigh of exhaustion? No idea which.

SBUX - estimates lowered at UBS through 2012, UBS said. Company will be hurt by BGP and Japan. Buy rating and $41 price target.

ALOHA!!

Copper is particularly sensitive to economic data because it is widely used to make wire, pipe and sheets for electronics, buildings, automobiles and appliances. ,which is everything Japan will need to rebuild its country!

And what the rest of the World will need to go to War with after the West figures out they were duped by that Muslim Peasants Revolution(MPR) and wake up to half a months supply of oil!

The USA will have to annex Mexico(cheap labor) and Canada(resources) to survive. That is if America can survive its own DEBT folly ...

You know the USD will never rally so long as the following currencies stay strong: CHF, AUD and CDN ----- None of those currencies are budging a bit.

I believe the looming threat of the DEBT CEILING is capping every attempt for the USD to get off the floor! When a US FED governor makes a speech listing four reasons the US economy could collapse causing a USD failure and one of them is US GOVERNMENT SHUTS DOWN he is speaking to the debt ceiling issue.

After a decade of watching the US Treasury and debt ceilings we are now within the range of $130BIL until meltdown. Never in the past have we been this close without the debt ceiling being raised. Congress in my opinion is playing chicken here or the US Treasury has some "delay switch" trick up its sleeve. The only delay switch I can think of is the $79BIL the US FED owes the Treasury, but that won't buy much time. Something is up!

http://www.ritholtz.com/blog/2011/03/is-qe3-alread...

Ritholz remarks the same thing as yourself. BoJ just did its own QE2 equivalent in just 3 days.

As of EOY 2010 the total market cap for the TSE was $3.8 Trillion. If 50% of BOJ's US $688B "liquidity injection" was in the form of equity purchases, that means it scooped up around 10% of the TOTAL MARKET CAP of the TSE in three days. That makes it 10% owner of Hitachi, Softbank, Sumitomo, Mitsubishi, Honda, Toyota, Komatsu...and of course TEPCO. Sized for their economy, its as if the Fed had printed $2 Trillion. In three days.

FD: bailed on my EWJ short today.

Damn, should have kept buying the dips.

GE will undoubtedly move higher from here.

jack- I don't about you, but if we close up +90-100 on the DJIA today (with or without the SOX), then I think there's a good chance Thursday and/or Friday close down.

Thanks for saying this 2nd Ave.
I forgot to mention that VIX made a higher low too. Feels like bull trap. However, since the game is rigged, I'm going to be likely wrong.

The VIX is down over 3%. April is the bullest month of them all. I see window dressing and chasing performance into this weekend. BUY BUY BUY - the dips for now.

I have UXG as my only stock right now with the other 50% cash as of now.

This reminds me the developments in early 2007 when dominos started falling already (home builders and banks were next to fall) but Bernanke preemptively flooded the markets with liquidity that distorted the markets and effectively delayed the crash.

This is what is probably happening right now. There will be a rebound from these oversold levels (long term wise as we are very overbought short term) with market crash later in summer/fall.

While people are generally bullish on Japan recovery, I cannot help but see huge manufacturing loss in Japan (energy and parts shortage) that will be exponentially multiplied by global manufacturing loss when missing spare parts from Japan will curtail manufacturing of cars, electronics and other items worldwide. The recent commodity spike, also made worse by Japan, will also throttle economic activities.

Propoganda to the causes of "ever bigger, regulation hurts competitiveness, gives foreigners an unfair advantage"

http://www.marketwatch.com/story/dimon-us-debt-def...

did the same with my OAKBX and CWGIX...market probably runs to 1350 on S&P but thinking we get a dip before then, then again everyone is thinking it runs to 1350.

Shoulda held right thru like you did , but missed a couple good up days. Still a nice little gain in the LT port.

Analysts estimate the bill to decomission the 4 reactors from Fukushima Dai-ichi to be $12 billion, and take 30 years. Ouch. How does that compare to a coal plant? Probably not so well.

http://www.bloomberg.com/news/2011-03-30/tokyo-ele...

"The Fukushima reactors may take about three decades to decommission, based on Japan’s sole attempt to dismantle a commercial reactor, said Murakami of the Institute of Energy Economics.

Japan Atomic Power Co. began decommissioning a 166-megawatt reactor at Tokai in Ibaraki Prefecture near Tokyo in 1998 after the unit had completed 32 years of operations, according to documents posted on the company’s website. The project will be completed by March 2021, or after 23 years of work, and cost 88.5 billion yen, the documents show.

Japan Atomic took three years through June 2001 to stabilize and remove nuclear fuels from the reactor core.

“It looks indisputable that Tepco will go ahead and dismantle the four reactors, and costs may exceed 1 trillion yen,” said Murakami, who worked at Japan Atomic for 13 years and was involved in the decommissioning of the Tokai plant. “Removing damaged fuels from the reactors may take more than two years, and any delays would further increase the cost.”

Ballena , this video shows China is throwing their money away . They will have to slash prices by 80 to 90 percent . It will be a small price compared to turmoil and revolution . That will be the opposite here in the U.S. where every one here inherits an enormous debt from congress . The Chinese can give or sell at a reasonably price each Chinese family a home . A smart deal by comparison .

Pz- I know exactly what you mean. OAKBX was actually a two-step trade for me:

(a) Opened March 16 on the post-tsunami drop @ 27.81.
(b) Closed March 18 @ 28.15, thinking we would retest 1250.
(c) Instead, the market continued up.
(d) Reopened March 22 @ 28.44 based on failure of bears to take the market down. So I missed a 1% move.
(e) Closed today @ 29. Reboarding the train at higher prices paid off.

I prefer day trading with OAKBX for the simple reason there are no ST fees for 'excessive' trading. Probably would have doubled the gains using a sector fund, but I'm happy with 3%. The entire buy-and-hold half was invested, so it works out to a 1.5% return for the portfolio. Nothing to brag about, but a decent 2-week return.

Selling the GE leaves me with positions in CSCO/INTC/WFC totaling 13.4% of the portfolio. I'm OK with that even through a pullback.

Ilya - Your plan would not work, since these days only the small and insignificant banks actually fail.

I was in the process of writing a long passage about how I was learning to use the 5dma in my trading and ended up scrapping the post as I went back to looking at how the trader I've copied uses his moving average in intraday time frame:

http://www.alphatrends.net/2011/03/29/5-day-moving...

http://www.alphatrends.net/2011/03/29/5-day-moving...

So here's a screen shot of SLW, which I bought long yesterday along with PSLV, and you can see how just one moving average tells in many ways, a lot more than all the moving averages I had littering the screen.

Although I'm the bozo that bought the amateur hour opening again, by end of day my fears were allayed in the strength of closing of these two stocks I've bought.

One thing I do wish to repeat from my earlier post is the idea of 'quarter theory'. .00, .25, .50 & .75. These numbers can act as pivot points for reversal or as a goal post for the next advance to the next quarter.

And silver futures continues to hold 37.50 this morning while the dollar weakens. I've dipped the toe into silver again upon these stocks closing above their 5dma and the possibility that 40.00 now presents itself as target.

As Dave pointed out yesterday, those options in CEF are going to add further upside pressure to bullion prices. We shall see.

http://www.nakedcapitalism.com/2011/03/omg-greensp...

http://www.incrediblecharts.com/tradingdiary/2011-...

I've got those same bearish divergences on my silver setups as Twiggs, so I'm happy to have found tools that can emulate Twiggs momentumm indicator.

But like I pointed out earlier and Twiggs has as well, price is holding support and he's looking for break of 38 to see silver test the upper trend channel.

Being bearish the day before ain't the same as being bullish today.

Crowded trade or not? The commodity currency countries versus All About the BEN-jammins.

http://tinyurl.com/6bs2fka