Bill Cara's Blog for Sep 8, 2011

ANGLO American may be considering a $US120 a share offer for Walter Energy, but neither is willing to comment on takeover speculation that possibly includes a run by BHP Billiton.

Britain's The Times reported on the speculation overnight, without divulging sources, that Anglo American is planning to discuss a possible bid this weekend and that mining titan BHP may also be interested in Walter Energy.

The potential offer values Walter Energy's equity at $US7.49 billion ($7.04bn) and represents a 60 per cent premium over its closing share price on Tuesday. Analysts say Anglo American has the firepower to execute such a deal, given it has $US6.81bn cash at hand and $US8.97bn of undrawn facilities as of July 31. Anglo American also has a net debt-to-equity gearing ratio of 14 per cent, which is low enough to absorb a company like Walter, which has an enterprise value of about $US9.8bn based on the reported offer.

Shares in Walter Energy were up 24.7 per cent, or $US18.42, at $US93.45 while Anglo American rose 3.9 per cent (93 pence) at 2475.5p at the close yesterday.

Walter Energy has operations in Canada, the US and Britain, and sold 7.2 million tonnes of coking coal, a key ingredient used in steelmaking, in 2010. It is also involved in thermal coal and natural gas production and has 194.3t of recoverable coal reserves as of the end of 2010.

Anglo American has already signalled interest in acquiring coal assets over the past year. It considered purchasing the Colombian coal assets of privately owned US-based Drummond and also contemplated bidding for Australia's Macarthur Coal, the world's biggest miner of pulverised coking coal, a low-cost raw material used to make steel. Macarthur recently backed a sweetened bid from Peabody Energy and ArcelorMittal that values Macarthur at $4.83bn.

Anglo American also decided this year to retain rather than sell its Canada-based Peace River Coal venture, a company that operates a joint venture with a unit of Walter Energy in Canada.

A London-based analyst, who wished not to be named, said all these factors lend credibility to a potential bid but he noted that Walter Energy's share price hasn't risen to the reported offer price, indicating that some investors believe Anglo may not make a bid.

http://bit.ly/natp2h

LONDON -(MarketWatch)- UBS AG UBS -0.08% has hiked its gold forecast for next year by 50% to $2,075 a troy ounce, citing expectations that further global macroeconomic disappointments, European sovereign debt troubles, and low business, consumer and investor confidence will bolster demand for the precious metal as a "line of defense" against fresh market turmoil.

The Swiss bank has also revised its expected average gold price for this year up to $1,665/oz, from $1,500/oz previously, ahead of a likely "strong fourth quarter price environment," it said.

http://www.marketwatch.com/story/correct-ubs-lifts...

Hotel California, good reference :)

(GR) EU's Juncker: Greece should not take the next aid tranche for granted
- There cannot be any flexibility in Greece's deficit targets.
- Privitization in Greece is not moving along as well as it should.
- Would not rule out changes to EU treaties over coming months.
- Euro region banks are well capitalized.
***Reminder: Late on Wednesday evening, German Fin Min Schaeuble is said to have told other MPs that Greece's financial situation was on a "knife's edge" - financial press

*(US) INITIAL JOBLESS CLAIMS: 414K V 405KE; CONTINUING CLAIMS: 3.72M V 3.706ME
- Prior Initial Claims revised higher from 409K to 412K
- Prior Continuing Claims revised higher from 3.735M to 3.75M

This may be old news to some, but I have just had the opportunity to see this documentary. The director could have taken his cue from what Bill and Kaimu have been saying for as long as I can remember. Startling yet not surprising for us Caristas. A must see.

From filmmaker Charles Ferguson comes this sobering, Oscar-winning documentary that presents in comprehensive yet cogent detail the pervasive and deep-rooted corruption that led to the global economic meltdown of 2008. Through unflinching interviews with key financial insiders, politicos, journalists and academics, Ferguson paints a galling portrait of an unfettered financial system run amok -- without accountability. Actor Matt Damon narrates.

Thoroughly insightful view of the country's financial downfall. This movie will definitely make you very wary of business as usual in the financial world and how it effects the way our government runs. You will be moved--from sadness, distrust, anger to possibly despair when you feel like everyday citizens not involved in the financial or political world may never be able to change this blatant greed, and how it effected so many people here and in many other countries. A must see film, if you would like to be educated on this corruption.

Title - INSIDE JOB
I got it from Netflix.

Get well soon for Your grandchild.

Thanks very much for helping us . Ordinary people

Grazie Franco

Shazaam...I wonder if they are short covering yet..LOL

Full Disclosure...Long at 7.20 Thanks Bill and Friends...

again...wasn't our debt just downgraded in large part for over spending? and now we're hoping for more spending? can we please just let things fall where they may and get the debt cleared out of the system?

Hi Mark H - Another player in the coking coal space is Teck's Fording River coal mine producing 8.7 million tonnes of metallurgical coal annually - well located for sea transport to Asia. Happy Trading

"Is the Second Shoe About to Drop on the Euro? There were two pieces of news today that enabled the Euro (FXE) to benefit from a much needed relief rally. First, the German Supreme Court ruled in favor of the legality of the Greek bailout package. Then the Italian Senate approved a $70 billion austerity package that is a prerequisite for the rolling over of the country’s existing debt.

With news this dramatic, you would expect the Euro to launch a major rally of three, four, or even five cents. But the best the damaged and suspect currency managed was a feeble one cent rally.

It is an old trader’s nostrum that if you throw good news on a stock and it fails to go up, then you sell it. The European currency is starting to meet that qualification." (more)

http://www.madhedgefundtrader.com/september-8-2011...

I like the idea a lot. Note the important juncture that the attached FXE chart is at. Could be good for a quick short while this mess the Euro is in deepens.

Maybe reality finally starts hitting home... no matter how much you tweak, do various monetary policy maneuvers, legal acrobatics and multiside negotiations, sovereign debt doesn't go anywhere and exceeds what can be repayed. So in the end it's either default or print - and print part is difficult to impossible with Euro structure...

I posted some daily bearish divergence between SLW and its ROC oscillator yesterday. Today the intraday bearish divergences have my attention. A potential line up of multiple time frames that could work out big.

Gently, gently here. 2 man Oct 40 put recon team to get a feel for the enemy position.

Agree that UUP a 'tell' for now. UUP (rising) probably correlates with sovereign debt crisis pretty well.

Thought that judicial ruling solved Europe's problems beyond laughable. Greek one year bond at 90% says 'turn out the lights'. Hope I'm not repeating.

(US) Fed's Plosser reiterates that Fed is unlikely to provide new stimulus, low bond yields unlikely to help job market in any major way (but wait, weren't we told for months if not years now that Fed can stimulate job market with their monetary policy tweaks?)
- Reiterates that the Fed would respond to ciris of deflation or a financial crisis (what about crisis of inflation? Or in Fed vocabulary such thing doesn't exist?)
- Temporary growth headwinds are becoming persistent (hmmm... this one is a puzzler. Persistent temporary - is is permanent?)
- monetary policy may not be the best tool to deal with unemployment levels (is it ever...)
- Fed policy is not powerful enough to solve economic problems in the US.(eeek... and we thought... ugh, never mind)

Hi Ron, "Thought that judicial ruling solved Europe's problems beyond laughable" - I agree. I don't think the German people are going to continue to swallow their pride and bail out everyone. They might but it seems less likely.

budfoluse,

I watched the movie from Netflix as well and the only surprise to me was how widespread the corruption is. With so much info available on this, not to jail these major offenders is a crime in and of itself.

I also watched an interview Ferguson on line and the last question was, "Why do you think President Obama has done nothing about the banks?" His, "I don't know," answer left me puzzled — isn't it pretty common knowledge Goldman Sachs was his single largest campaign contributor?

Grym

Vad,

I got a kick out of your Plosser summary. Since I nearly always trade the longer term I never read the Fed comments (can't totally avoid due to MSM). These guys just can't match Greenspan's Fed Speak — set the bar for dissembling comments.

Perhaps the punch line to this joke would be,

'Plosser suspects the world is not flat, but is puzzled by the "persistent temporary" disappearance of the sun each night.'

Grym

In the general sense, not anyone specifically, since people like to use the kitchen table family budget analogy so much let me pose a general question. If I came up to you and said, I like your situation but I can see you need a little work done to your house. I'll loan you money for 10 years for almost negative real interest rates to get the work done.
Would anyone here say no?

We as a nation are crazy to not be borrowing right now. The entire financial world is screaming at us to take their money, and taking negative real interest rates for the privilege. We have infrastructure shortfalls of about $2T currently. We could borrow and spend to remedy that now, or we can wait 3 years where the same work will cost us $5T to remedy.
I'm just baffled some days.

I watched it with disgust, paced the floor and at times just had to walk out of the room. Not for the truth, but for how far we've traveled down the path. We've succumbed to the seven deadly sins.

Another similar movie with an outstanding cast is "A Civil Action".
http://www.imdb.com/title/tt0120633/

This is a project we are confident in.
http://jimymac.blogs.com/shareholdersforjustice/to...

you have mail !

I guess the time horizon is everything.

Bonds...don't think so "return-free risk"
Equities (some deep value tech, e.g. CSCO, MSFT)
Real estate (probably somewhere, not in Massachusetts)
PMs
Rare earths (selected)...requires a lot of due diligence
Cash (the one US asset that FRB wants to devalue)

For me today, VIX flat, dollar up hardly encouraging

Greece is reporting a negative 7+% GDP for the latest quarter today. This should add nitromethane to the Euro bailout debate.

There are rumors that Obama may have given in to corporate demands to lower repatriation income tax rates for those companies sitting on offshore profits. This ruse was done in 2005 but resulted in little US job creating investment. It did result in stock buybacks and enhanced corporate stock options for the elite. Lots of lobbying money has been spent on this issue. Let's see if Obama jumps on board for this gift to select multinationals.

The dollar may be due for some further strengthening in view of current developmemnts.

In general, the situation is you either fix the front doors and window now with money at negative real interest rates, or you wait a few years and pay more for the same repairs.

It's not about pretty walls, or to revert my analogy, it's not about good looking bridges and roads it's about solidly maintained infrastructure.

In my analogy, it;'s about whether I can repay my debt or not. If I am deep in debt already, and under the bankruptcy threat as it is - what good will it do to me to fix the doors and lose the whole house to my creditors? It may cost me more to fix the door in a few years, but I would go for that option to make sure that I borrow for new doors and windows when my house is secured by fixing my financials.

Get well soon

The old Bull Hunter is in the middle of a major flood here in Lancaster County, PA.

My house is holding but there's 2 feet of water(and rising) in front of the doors into the business complex where I work.

Yikes.

You can construct yourself a silver-only version of CEF if you buy CEF and then short the appropriate number of GLD shares. And you have yourself a lottery ticket which just might pay off if its true that GLD doesn't have any gold, or if it gets seized, or something else evil happens to the beast.

The money is being offered to the highest rated risk in the entire world. The entire financial universe is yelling at the top of their lungs (by their actions) that the entity wanting to borrow is the best of all available choices.
No one on the planet making large scale investments doubts the ability to continue making payments.

Ceo Rui Feng bought 100,000 shares in the open market on Sept. 7, 2011
at a price of $7.97.
http://canadianinsider.com/coReport/allT...

What does it matter if lenders yell offering the money if the math of repayment isn't there?

Lenders offered money with no restraint during subprime lending spree, to anyone with a heartbeat and with no regard to ability to repay. Look where it got us. Now we call it "predatory lending."

Whatever they want, whatever we want, whatever we call these practices - it's all secondary. Primary question remains: is math there to repay the debt? Without printing, without QEs, without financial trickery, without operations Twist, Tweak, Turn, Rinse and whatnot - just repay it in reasonable terms and not spending insane money just to serve the debt. If not, how can borrowing more be justified?

Edit: Fresh from newswire, and just in time to add to discussion:

(US) Congressional Budget Office (CBO) forecasts August budget deficit at -$132B; YTD deficit at -$1.23T

for homes. where owning a home was prestigious. not a prize in a cracker jack box.

the president should go on tv tonight and apologize for being the biggest disappointment of all presidents, since he had Carte blanche to lead the people in his early administration period, yet chose to focus on his political methods.

And urge all Americans to shun debt and own assets outright, or at bare minimum own 51% and finance some. Otherwise we are all renting our homes, cars and electronic toys, which all supply jobs overseas vs here.

He should then address the education issue and how students should not take on massive debts to go to school and risk not learning employable trade skills.

Yet, we will hear about longer extension on unemployment, roads bridges tunnels, renewable energy, and how businesses will hire more people for tax cut incentives.

laughable. it is time for all of Americans to be our own president.

The short position I took up on FXE today - a follow up. See attached.

This is what scanning 4 or 5 good blogs are for. Reading actionable intelligence from traders I've learnt that have the competencies and honesty that will help me in my trading.

FXE was by coincidence losing major support today. The weekly chart told me that. No hesitation to borrow those shares and short it, and there is plenty of room to drop as others here have noted.

sold SVM shares for quick cash and bought 500 Canadian shares for long-term holding - SVM.TO. Pull out SVM to a weekly chart and it looks good. Kudos to those who got in at $7.XX. Price action is really nice today. Been a long time since I've seen that.

SVM seems to be showing us all what it looks like when shorts get to cover under pressure. Scanning the articles listed under finviz.com and they are all either neutral or positive. One of the articles even had a guy who actually got someone literate in chinese to browse the chinese government website and pull up the requisite information. Apparently it was all kosher.

http://seekingalpha.com/article/292389-silvercorp-...

"The press release shows pictures of the SAIC filings and profit of each subsidiary, but I still wanted to check it myself on the actual SAIC website. While the press release shows how to do this, it is still no easy task. I had to hire a Mandarin speaker to type for me the Chinese characters to spell the name of each subsidiary. And it was still a pain to go through it. I took a screen shot of the filings and translated "net profit" so you don't have to go through the trouble."

SVM seems to be successfully playing catch-up with the rest of the silver miners; its up 11% on 2.6 times normal volume on a day when SLW and friends are up around 0-1%. SVM:PAAS shows it might be 1/2 of the way back to "normal".

FD: still long SVM

FXE 2pm 138.45 entry if I were to but the 10/20min still trending down at high rate so no confirmation on my chart, yet.
regards,
Earl

@Les
Can you share the 4-5 blogs you think are useful for that kind of information? Obviously one could do quite amazingly well solely with the information presented here by Bill and the commentary, but it's good to build some useful sources.

I have a restriction for short and medium term trading in individual names, due to obtaining conflict clearances from the firm I work for. For example, a co-worker had a lot of AAPL, and wanted to lighten up. Well, they had become a client and he was not allowed to trade the name. Trapped. And even when we can be cleared, it's not a process I enjoy.

I can, however, trade ETFs without restriction. The problem is the ETF-focused web sites and blogosphere can seem very huckster-ish or operated by those without as much transparency as as much a track record as out host.

CEO purchased 100,000 shares. http://canadianinsider.com/coReport/allTransaction...

Folks who took on additional shares in Silvercorp at the likely fraudulent "fraud low" of last week are doing very well. Congratulations to those who stepped up. I didn't have buying power, sadly.

Earl,

Thanks for the link — maybe I'll start turning the sound on more often ;-)

I can't stand Tom Friedman, but Santelli is a favorite of mine.

So none of the CNBC shills can admit Social Security, which now has passed the equal mark of payers-in vs takers-out, is a Ponzi scheme. I guess they need to bring in Madoff to draw them a picture.

Grym

Corner Stone,

"Let's say I have cash for a car. The dealer tells me 0% interest for 60 months on that model. Should I pay cash? The dealer is giving me a further price break with almost no downside if I make payments with no vig added.
Even if you just stuck that cash in a .25% APR instrument you're still ahead after 60 months."

What I have found to be better is to offer the seller of nearly anything cash on the line, especially in today's economy. It's called negotiating.

I just got 12.5% reduction on a new roof with an increase in the quality of both the ice and water shield and the shingle guaranty. I've done similar on buying a car. I said I had never borrowed since my house. Forgot one. In 2004 I bought a car, but instead of cash (dealer couldn't do it, he said) I took a loan from the mfr. which netted an additional $1,000 off the already negotiated lower price. I then paid off the loan (no penalty) one month later.

Grym

pity you're caught like that Mike cause I'm not a big user or follower of users of ETF's. You made me think there a moment and I did manage to squeeze out a long forgotten name - Tom Lydon. You might want to follow him up:

http://www.forbes.com/sites/riabiz/2011/03/30/how-...

Definitely Bill for daily action - convert his thoughts on the action into the ETF space if you will.

The MHFT is a great macro morning read IMO: http://www.madhedgefundtrader.com/
John Thomas makes ample use of ETF's in his thoughts.

Vad is good for a "penny for his thoughts". Dunno if I'm insulting him using that phrase :). Possible scenarios. Concrete trade examples that often reveal new information and aspects that can be integrated into my approach.

I've also been monitoring Ryan Puplava over at Financial sense. Lots of charts, sensible technical/fundamental analysis dished up once a week.
http://www.financialsense.com/

Speaking of which, is anyone interested in listening to an audio of Bill Fleckenstein speaking gold and gold mining stocks with Jim Puplava? It's 9pm here and I am content to settle with Haydn going into close. If there are any juicy bits worth sharing, pray thee tell.

http://www.financialsense.com/financial-sense-news...

Hope that helps. cheers.

I wonder what the exercise price is for the options? That really is the crux of the deal, isn't it? I guess that's what you mean by the terms. Though the 7.5K per month isn't bad, either, depending on the amount of time per month required.

Sounds like 7.5 is the "walking around money" and the 200K options is the payoff.

Ron,

Not to worry — "It will only take the low-end jobs." ( Left unsaid, And who cares about them?)

Grym

Buckley's is only 1/3 the cure....add Fisherman's Friend Lozenges and Newfie Screech and you will be dancing the jig in no time.

Well, the differences are, it's not FREE money, and it's not being borrowed to replace or retire other debt - it only adds to the debt that already exists. Borrowing would be acceptable under the terms you list... but those are not the terms we deal with. We simply accumulate more and more debt, and none of it is interest-free.

I wish I had some better options data tools to give a visual, but the action in the implied volatility of SVM options today is/was unreal. As the stock rose from early morning to mid-day, implied vols (in calls&puts) were dropping across the board only to explode once SVM settled down and started oscillating around the $9 area.

Take a look at the OCT11 $7 puts. Almost 10,000 traded today and the contract closed at $1, down only $0.05 DoD on an appx. +10% move in the underlying stock! That's pretty bizarre in my book. If you tried to get some long exposure yesterday by selling those October puts, you made virtually no money DoD on that 10% move higher in the stock.

Not sure what to make of it other than to say there is some serious finagling going on in this stock.

Billy -

I can verify what you're saying. I'm short 10 October 7's and that position was up almost $300 at one point today. I'm still up, but only $75. And the underlying is still up $0.85! Very interesting.

Corner Stone.

"But with that said, if a lender offers me free money I am taking it. If he's going to pay me to explore other opportunities, retire other debt, or increase my potential revenue stream then I am going to."

I prefer not having any debt to retire. IMO better to accumulate interest than pay it. Nothing is EVER free ;-)

To each his own.

Cheers,
Grym

at ' Financial Sense '... " All things Gold ".. > http://www.financialsense.com/financial-sense-news...

We got the heads up in April of a company going public in the Ashanti Gold Belt. It was a posting from Kamiu, where he explained the Board of Directors for Castle Peak Mining included:

Randy V. J. Smallwood
Co-Founder, Chief Executive Officer, President and Director, Silver Wheaton Corp.

http://investing.businessweek.com/businessweek/res...

I have to think he knows mining and how to set up a company here to discover the wealth in the ground.
http://www.voltaresources.com/s/AshantiBelt.asp

The price in my opinion was too close to perfect to wait any longer. The prospectuses for CAP showed an initial offer in the private company of 35 cents Canadian. I got 30,000 today for ½ a cent above their buy. An additional offering was completed privately around three weeks ago.

('Castle Peak' or the 'Company', TSX.V: CAP), has arranged a non-brokered private placement offering to raise gross proceeds of $3 million. Under the terms of the private placement, the Company will offer for sale 8,571,428 million units ("Units") at $0.35 per Unit.

http://www.castlepeakmining.com/s/NewsReleases.asp...

On this subject, a few nights ago I was looking at airline tickets, the lodge with fireplace and tub a few feet from the bed and believe for this year CAP is the better investment. Sorry guys, on my word as a meteor miner a round is on me next year if I have to send the check to CARA Traders for it.

Yes the big meeting is a few weeks away in Canada at Whistler. I think this is one of the stocks you will hear about if you are new to the face of the Earth. As it IPOed in April it was private this time last year.

From Bill and the boys I have learned who the giants are and that we need not stand in their shadows but alongside as our money is as good as theirs. And this purchase was with dollars as I did not want to sell any of my positions.

As I ramble on I ran across a chart of another new junior miner in the Ashanti belt area I see a similar start with that IPO and spikes at what I will guess are drill reports.

http://www.voltaresources.com/s/StockInfo.asp

Click the 5 year chart to see the similarities after the IPO. I don’t have to tell anyone you results may be different, no guarantee you will not lose 100% of you investment but leverage is leverage my friends.

http://tmx.quotemedia.com/company.php?qm_symbol=CA...

Vad,

"That's what you get when ivory tower residents get to make decisions or get the ear of those who make them."

As those who trusted Long Term Capital Management found out.

These are the guys who become financial advisors to presidents — and look where we are.

Grym

rlogan1301 -

Assuming you're in the U.S., to trade on the TSX, you would need a trade account with access to foreign bourses (exchanges). Interactive Brokers is a good one because it also allows conversion of account balances into other major currencies on top of the trade. A double do-right.

Private placement is another way of saying a non-public offering of common or preferred stock, warrants or promissory notes. You have to go directly to the company to buy and do your own due diligence requiring good valuation skills of the type of business at hand. I believe kaimu (Stephen Wellman) said he would cover this method at the Whistler gathering in a few weeks as it relates to his Australian miners ... and an orchid farm next to an active volcano in Hawaii. Ha! Wish I could be there.

Cheers.

NEW YORK (TheStreet) -- Deutsche Bank's(DB_) equities business has been slipping in recent years despite the success of the firms fixed income business which so far has compensated for the decline.
Recent reports mention that among the top eight other global investment banks including competitors like Goldman Sachs(GS_), JPMorgan(JPM_), UBS(UBS_), Bank of America(BAC_) and Morgan Stanley(MS_), Deutsche Bank's equities business has stumbled to seventh place this year from fourth in 2004.

http://www.thestreet.com/story/11243037/1/deutsche...

Grym
Bernanke ain't no idiot. He is just Ivory Tower poor.

These people rent themselves out for a promise of the big bucks--expost facto payday. One might question who funds those 'Ivory Towers'. I can assure you that the billions in endowments are not all freely given for altruistic reasons.

A Rent a Prof is in many ways like a Rent a cop. Both are for show only. The difference is that our Rent a prof has bullets in his gun, more's the pity!

The disconnect between the Nobel Prize financial engineers and main street were obvious with LTCM in '98. What it will eventually take to discredit 50 years of financial malfeasance must surely be another even more severe financial disaster where the printing press is pried from the hands of congress and the Fed.

If Bill and Hilly can lever a $20,000 profit in cattle futures (oh the shame!)to a net worth today in excess of $70 million, I suspect that the Bernank has wangled a concession deal worth at least $10 mil on HIS retirement.

Justice is a blind three legged dog named 'Lucky.'

At the very least, our Ivory Tower types should be introduced to the basics of middleclass civility whereby they will no longer order their steak tatare, medium well!

All I know is that a Constitutional Convention is better than anarchy. I hope that we do not experience the latter to get to the former...

Main points from Bill Fleckenstein interview:

Earnings models used to calculate NAV for the mining sector remains low - i.e., people are still betting on gold being lower in value in the future. (less than $1000). Gold stocks look expensive in this light. But cash flow wise they don't look expensive. (Bill has spoken of this)

People are not yet comfortable or appreciate that gold is going to be worth a lot more in the futures. Fiat issues are only starting to come to light. (We're definitely ahead of the curve in those respects). e.g., NEM is buying gold at $800 - $900 an ounce vs. present bullion price of $1900.

http://www.netcastdaily.com/broadcast/fsn2011-0908...

Ok, I've heard this tune before and stop at 12 minutes. Baz, if you caught anything later in the interview that is worth repeating please do tell.

cheers.

1) Why I Covered My Gold Short. I have to tell you that I was just not feeling the love from my gold short when I came into the office Wednesday morning. You would have thought that, with a double top on the charts in place, there would be a move of the same ferocity we saw two weeks ago, when the barbarous relic cratered $220 in days. But this time, when gold down $132 in 24 hours, the momentum suddenly vaporized.

There are now three possible scenarios for the yellow metal. The double top at $1,920 holds, and we collapse to $1,500-$1,600. We continue to bounce around like a ping pong ball between $1,700-$1,900. We break out to a new high to $2,000. Notice that my October puts, which I strapped on when gold was trading at $1,835, losses money in two out of three of these possibilities. Hence, time to heave-ho the gold short.

http://www.madhedgefundtrader.com/september-9-2011...

This is an important shift for me as he is now more closely aligned with Bill. If you read his blog further, he has yet to make a decision as to shorting it again at the highs or going long. This to me suggests at least one hedge fund manager comfortable with gold holding at these levels for the moment, as downside momentum wanes.

I also note that he has a further piece, for subscribers only, titled "Hedge Funds Ramp Up Market Shorts". The Euro has to be one of the more obvious setups in this universe. So for my own short position I get to see who is more powerful - hedge funds or China or whichever other bidder that has been supporting the Euro recently.

I have a small SLW put option purchase in place. I'll be covering that today. You can see the difference between ascending triangle in FXE and ascending triangle in SLW, both in 10 minute stochastics. One provided me with an entry signal that worked and one was a false signal. Unless miners start pulling back here, illustrating a false breakout, I'll cover the SLW puts.

I note PMV.V on the move. Time to make a decision as to where to go long in the mining space, to add to the SVM.TO purchased yesterday. Europe panic remains at the top of my list of potential sell catalysts, which can occur at any time - hopefully happening during the US session.

Hi Les... True, points made before.. Just posting for those that don't subscribe. I do know Bill Fleck has been worth his weight in gold to me, from 1998 thru today. He has missed a few equity calls, but in the larger picture, he is a rare gift. As noted, Fleck is not a ' trader ', hence he approaches from the bigger picture. However, I did get back in NEM at $ 51+ a few weeks go, mainly from what he has talked about in past postings. Take care..

told you my mental agility was severely limited :)

Ok that's interesting to note thanks. Need to enlarge upon my $USD based GLD chart for glancing at gold. Where are you doing it?

TIA

ALOHA!!

The big difference between me, SOUND MONEY and this blog is that I do not get paid to write one word. The gurus that do get paid by their adoring fans and paid quite well have no real great track records and in fact are now repeating some of the same strategies I was doing a decade ago.

For instance Tyler Durden of ZERO HEDGE is just now onto US Treasuries about five years after my first article on GATA. Most of the experts you see on CNBC are just now onto gold and silver. When I was writing about gold and silver CNBC did not even have POG and POS tickers on their scroll! In fact my own Morgan Stanley and Merrill Lynch brokers thought gold was a terrible idea until GLD came along in 2004. Don't get me started on how late the mainstream is on juniors and in fact are still late as they all believe that GDXJ is somehow "juniors"! Not by my definition ... The juniors I do are still under the radar! The day I see PMV, GRR or ECX on the CNBC scroll is the day juniors come to mainstream. The day CNBC mentions private placements as a strategy then its probably time to sell! Will that day ever come? Hummmm ...

That is the "boring" I refer to ...