Cara's Commentary & Community Chat, Monday, Jul 6, 2009

Bill, you gotta be joking. I sure hope that you are joking. ;)

Its what you call "open source."

23.92/24.55...

it is not a code. it's their direct access to the govt. that cannot be stolen on a usb drive.

i am growing really tired of the manipulation in this casino. its like playing poker against the house, but this house can see your cards as well as controls which cards are coming out of the deck!

Here's a little more factual stuff from the Chicago Tribune

News out today about chromite intercepts that appear favorable. Also note they just granted stock options on the 30th when results were probably in the house.. oh well - thought J. Harvey was above some of that. Guess the news isn't unexpected with the stock trading flat. Happy Trading

This website is incredible for comparing all sorts of financial variables and appears to be at the leading edge for education in all sectors of society. I have never seen anything like this and have spent way too much time reviewing its capabilities. Enjoy! http://www.wolframalpha.com/screencast/introducing...

Going to h#ll. Can it retreat back down to $2.50? Let's start at $7.07 and then $5.66, then $4.88. This could very well happen if gold retreats to $650, a possibility. Precious metals is now following the major indexes and inverse to the dollar. China is going to keep supporting the dollar as long as they have so many US bonds. They aren't stupid. Of course they can continue to quietly acquire gold from their own country's producing mines and nobody will ever know because it won't have any effect on the rest of the world's production.

"OK. Why now ? ETF's have become "day trades" , is this just another grab?"

Nah. You would not believe how poorly and underserviced the Canadian ETF space is. This is just two more of the much needed ETFs that are trickling into the Canadian Market. From what I understand they just piggy-back on the US listed ones (EEM for the emerging markets one, forget the ticker for the World one) but we'll take it up here in the Great White North. Liquidity will be horrible, though.

And you say ETF's have become day trades. Everything listed is available for day-trading but that's not how the majority use listed stuff.

Don't know, but have just done one of my infrequent trades. Sold Sep 7.50 puts for .70. If exercised, my basis will be 6.90. Also, put in a semi-stink bid (.25) to repurchase covered calls sold earlier for an average price of 1.12 for sep 10's.

Interesting that SLW briefly went over $10, but the options were not exercised.

I'm guessing it's safe to assume our $1K launch has been delayed due to inclement weather.

Can Obama speak fluent Russian as well?

It's a lesson many market participants don't fully understand until their accounts have dwindled to almost zero. There remain quite a few out there (and here, as well) that think they "know" when it's OK to average down. I'm not smart enough to know when it's OK, so I avoid the practice altogether.

Good video - thanks for posting.

He only speaks Goldman.

You have to wonder how this will affect gold prices, since GS is one of the bullion banks holding all the cards.

Certainly lease rates have narrowed between the short and long term.

I'm assuming that either Eurozone sales or UK central bank sales are intended to defend whatever currency, either the Pound or the Euro. Looking at both, they dropped precipitously along with oil prices, and the Yen has bolstered.

I typed an earlier message about the same time as yours. Don't see it yet, so will reply to your message.

I have sold puts on Sep 7.50 for .70, making my basis 6.90, if exercised. Have also entered a semi-stink bid of .25 to repurchase covered calls of Sep 10s, which were sold at an average price of 1.12.

The info you've been waiting for.....

Newsflash...This is a bear market. It has been a bear since December 2007. The march-June move was a bear market rally. This market should be traded primarily (some would say exclusively) from the short side.

We are entering a protracted period of stagnation, similar to Japan, as employment trends downward and the biggest bunch of homeowners in world history attempt to catch a bid for their barracks. These two trends will intersect and do a sideways shimmy into a future of down-to-flat housing prices (no incentive to purchase) and a "welcome to Wal-Mart" employment sector.

I have an idea....Let's give California, Texas, Arizona NM and NV back to the Mexicans before those states go broke in exchange for one concession.....that the 50 million illegal Mexicans dispersed throughout the other contiguous 43 states be compelled to move there....A fair trade if you ask me. Viva Mexico!

One more thing and then I'm going to the beach (it should be a lousy summer in the stock market).....If we all just bought whenever we want to sell and sell short when we feel like buying we would be ahead of the game. Our long-only amateurish instincts will lead to poverty if succumbed to. I include myself in this group for rhetorical purposes.

sharkie - If I'm reading you right, you're advocating addition to short positions here. I'm wondering if you went short last session and left money on the table for today's gap down...

Actually, I'd like nothing more than another shot at buying GG with a 16 handle, it would be a pleasure pulling the trigger on such a trade.

CP - It looks like it broke support at approx 5.00. Currently at 4.76 and next downside is approx 4.30? It's down 35% in two months, RSI is near 30 on 7d and under 30 on 7m. Like several stocks, would like to buy but waiting on firmer signals. G

my take

G - I'm not buying jack-squat today, I've got cash on the sidelines (and some underwater positions) which suit me just fine.

If we see 666 again, I'll know what to do. Otherwise I'll just sit tight until the selling stops.

An old Texas saying: "If you don't like the weather, just wait a few minutes".

Rule one of the professional trader is: When a stock doesn’t do what you expect it to do, sell it. No hesitating, no questions or doubts raised no conjectures of the way it should have turned out, or might still turn out, no dreams of how it will do what it was supposed to do‚ tomorrow. The pro never says I’ll watch it one more day. He doesn’t phone an analyst who’s been following the company and ask, what’s happening? Is there any news?’ All too often, the delay in searching for the‚ why, is costly. The desire to be perfect is one of the prime bugaboos of the stock market, but it’s a compulsion that belongs on the psychiatrist’s couch, not on the exchange floor. And that means no berating yourself for having bought it, should it then go down, and no remorse for having sold should the stock turn around after you’ve gotten out and finally do what was expected.

I get your point. In fact there has been a bear market in labor certainly since the point you reference. It is arguable that stocks would have followed suit had not the free-marketeers intervened (yes that's an ironic impossibility).

But think of it this way if you must....If you believe in supply and demand, then clearly the supply of both phony securities (pets.com, the globe.com) and phony money (credit bubble) have lessened to a significant degree, as have salary-paying opportunities to enslave onesself (as well as 401-k opportunities, both of a matching and non-matching nature. So yeah. Damn right there's an significant supply and demand issue in stocks, housing and probably mousetraps at this point. Welcome to America. Land of the inept. Home of traitorous government. Land of the weak, the sick, the old and infirm.

And anyone who thinks that any of these markets are going to just snap back is somking something far better than the rest of us.

"It might help to know how much GS contributed to all of Obama's political campaigns over the years."

I hope they didn't overpay.

23.65/24.22

this is in regards to corn and chickens... think we'll see a rather large increase in chicken processing, because beef prices are just to high... ( he raises both )..... AGU has no debt maturity untill 2011.... so, IF they get CF Industries, I have to go back to the late Feb. charts (when proposal was first announced )and then when CF dropped down toward the $ 59.00 range (I had talked about then)... Because of the Arbs., I would apply a 10% knock on AGU... Maybe this would trace to $ 32.00 because of general market conditions.. either way, AGU is setting up for a great buy.... ( ethanol requirements could also figure in )....

CP: "It might help to know how much GS contributed to all of Obama's political campaigns over the years." I hope they didn't overpay.

Here is the list of top contributors:

University of California $1,564,490
Goldman Sachs $994,795
Harvard University $854,017
Microsoft Corp $833,617
Google Inc $803,436
Citigroup Inc $699,790
JPMorgan Chase & Co $695,132
Time Warner $589,334
Sidley Austin LLP $588,598
Stanford University $586,557
National Amusements Inc $550,683
UBS AG $543,219
Wilmerhale Llp $542,618
Skadden, Arps et al $530,839
IBM Corp $527,572
Columbia University $526,802
Morgan Stanley $514,881
General Electric $499,130
Latham & Watkins $493,835
US Government $491,420

Source: OpenSecrets.org

For comparison purposes....same source.
Sure looks like there was a favorite with some donors.
I see GS hedged their bet some, but we should all know these are subject to federal limits, so over the limit is from pooled PAC donations.

Merrill Lynch $373,595
Citigroup Inc $322,051
Morgan Stanley $273,452
Goldman Sachs $230,095
JPMorgan Chase & Co $228,107
US Government $208,379
AT&T Inc $202,438
Wachovia Corp $195,063
Credit Suisse Group $183,353
UBS AG $183,079
PricewaterhouseCoopers $167,900
Bank of America $166,026
US Army $165,370
Gibson, Dunn & Crutcher $159,596
Blank Rome LLP $154,226
Greenberg Traurig LLP $146,437
US Dept of Defense $143,605
FedEx Corp $131,974
Lehman Brothers $126,057
Bear Stearns $117,498

Bill,

Glad to see the humor. Many times, even when things are bad, a little laugh is good for the soul. PS-I also wanted to express how much I like this blog-including things not market related. I may disagree with some of the politics but as long as there is civil discourse we all learn.

You're watching the local news and then all of a sudden THEY do a report enumerating the previous weekend movie grosses, as though you were the Hollywood money-man who actually bankrolled the freaking thing? Is the amount of money a movie made last weekend a news story?

This is some of the sleaziest of the new "journalism", the total eradication of the line between reportage and adverts. It used to perplex me and now it merely offends me to my core.

I have another funny one for you all.....I went to the beach on Friday, it was, to place my chairs and blankets in opportune spots for viewing the 'works scheduled for later that eve, perfectly legal and acceptable here, I called and checked first. Five hours later I says to myself, I says, "let me go back to the beach and just LOOK to make sure my stuff is ok", and would you believe.....

The exact MOMENT I arrive at the beach I see 2 teenagers, Beavis and Butthead actually, grab 2 of my chairs and start walking off with them. I slam the car into park, get out and in full view of half of Westport, I proceed to go COMPLETELY ballistic, which, for me, is pretty severe. I said things to these two that I'm pretty sure they'd never heard before, although I made sure not to actually touch them. Although I came close. Also came close to probably having a heart attack, although it felt great unleashing like that.

The crowd began to heckle me, the hypocrits. Called me crazy. I told the teenagers that rather than notify the police (because invariably I call the cops about 20 times a year to report someone or something "messed up" and even THEY'RE starting to wonder about me), I would instead entrust THEM to guard my "stuff". And if ANY of my "stuff" was missing, I'd be coming after them personally, and not in a kind, friendly manner. I then turned to the crowd of maybe 500 people and announced that "no one" was to lay hands on my "stuff". You know what? When I returned 4 hours later to view the 'works, all my stuff was in place exactly where I'd left it. And it wasn't even smeared in dog ****. Let's hear it for the dog warden and stringent leash-laws!

Teenagers just suck. They just do. I know, I was one once.

University of California $1,564,490. WOW!!!

"I haven't called the cops twenty times in my life and don't know anyone who has."

The few times I've called the cops were to report stolen items. Luckily for the thieves and perhaps me, I've yet to catch one red-handed. None of the items have been recovered, the thieves probably sold my liberated possessions for pennies on the dollar.

Any comments GOOD/BAD on the 1 for 10 reverse split due for Wednesday 7/8/09 after the close. FAS is set to reverse split 1 for 5 at the same time.

Two jump out at me:

University of California $1,564,490
US Government $491,420

I guess these numbers must be contributions from individuals who work in the places. Right?

Cara: I’ll speculate here: was the Central Bank of Russia the buyer? Is this the reason President Obama has traveled to Moscow today?

If so; then Putin must think that this was really a CIA plot to finally bankrupt Russia!?! By the end of June RTSI was 57.15% lower compared to its closing level one year ago (2303.34 points on 30 June 2008).

"Una causa per la guerra", "une cause de guerre", "ein Anlass für den Krieg".

No wonder Obama had to beat it post haste to Moscow!

You don't want to know CP, but I'll give you a hint.

Forget insurance. Just go get an old prescription bottle for Oxycontin/Oxycodone, put some of those white Smarties halloween candies in there and your stuff will still be there when you get back.

I wish I was joking.

Maybe he's defecting?

Off topic, but I need to purchase an unlocked cell phone? Can someone recommend a good source? Thanks, G

I don't know what you mean by unlocked, but the best deal on new cell phones is Costco. They include the car charger, etc.

Grym - US Government - I believe this is the default amount each candidate is provided by law (just guessing, but easily verifiable I'm sure).

If it drops further, then I'll just hold on to it. Sticking with new rules- no additions except on strength.

My plan today was to either trade or fade the trendline breakout setup I posted yesterday. The opening gap down confirmed the direction. On at 8.03 covered at 7.69 for a day trade.

"Who did he refer to when he said "we"?"

Goldman Sachs

shark- I'm impressed with your faith in leaving the chairs/blankets unattended for 5 hours. Based on my experience, I wouldn't have been able to do that. Glad to hear human nature played out as expected.

The current price is tempting, but I already bought some SLW at $8 during its spike down a couple of weeks ago. So, following the principle of regret minimization (or the principle of always finding something good in any market move), I'll wait for SLW to drop to around $7 and will then sell some $7.50 puts on it. If today is a medium-term bottom and SLW does not drop to $7 for a while (or ever), that would be fine with me as my existing position (with a cost basis at $8) will generate a large profit.

"Larry McMillan's newsletter "The Options Strategist", in a recent article titled "Summer Seasonality", McMillan points out a distinct seasonal pattern in market volatility as measured by trends in the VIX. Over the last twenty years, the VIX has shown a tendency to decline during the second quarter (March through June). After that, it rallies sharply from the start of July until October when it peaks. That may account for the seasonal tendency for the market to weaken over the summer and form important bottoms during October. There's no guarantee that seasonal trend of the VIX will work this year (it doesn't work every year). McMillan points out, however that this year's trend in the VIX is following its historical seasonal trend pretty closely. Needless to say, a July bottom in the VIX would suggest that the market may be in for a weak summer."

[by John Murphy Stockcharts.com]

Put together this chart

http://tinyurl.com/mmrm9o

It looks like it may go lower based on that heavy volume selloff that started at 2:20 PM and broke below the daily lows.

Good luck with your new position. Do you have a stop loss or are you holding this regardless ?

Any opinions on the signifcance of the voluime increases?

"I guess everyone except the middle class gets a bailout."

It's not what you know, it's who you know that counts.

I'm hoping to add positions once we get back to near 52wk lows. I've got time, I can wait.

chart for the Nasdaq

http://tinyurl.com/m47s2v

[FYI: I have real time service. So when you access my charts they will always be current.]

SU is looking cheap where do you guys think a good entry might be.

CP,

By 2012 I should be able to put together the Kumondami Party and we can have a ball by default on election night :-)

Grym

Todd- Yes, I have a stop loss this time. Just don't want to 'publish' it ;)

According to Matt Taibbi in his Rolling Stone article, the next bubble will be in Cap and Trade. The attached article has some stock ideas:

http://zachstocks.com/2009/06/cap-and-trade/

Understood.

No one knows what size anyone posting here is trading with so laying it all out there for everyone to see can be disadvantageous at times.

Maybe others are getting inured to the obvious, that the odds are stacked against the public. After reading WIR and the Rolling Stone article on GS, it pretty much did me in. I know there's no end to it and we can only choose to soldier on as you later said. It helps to know our enemy, so thanks for that.

"Now that we know our place in the world order – slaves mostly – just when we start to get ahead by beating the trading pants off HB&B in the capital markets, we are, I fear, about to get burdened with a trader tax. If you want to day trade, ie, battle hand to hand in the trenches against these banks, you will soon have to pay a price in the form of a transaction tax that for all intents and purposes will be an eradicator of competition from the independent trader."

Put on a small position in HFD.to today.

"the gravy train that is the capital markets would become devoid of suckers if a trader tax were introduced...it will not happen for precisely that reason. The capital markets are a device by which hbb and others steal from joe and sally doe. If they stop playing, who's there to take the wrong side of trades?"

shark- I made the same point yesterday. Not as eloquently as you, of course.

i worried about this in a posting in january:

http://caracommunity.com/content/caras-commentary-...

as a high volume day trader, will i have to pay $100k in transaction taxes before i see a dime in profits? in that case, i should have kept my day job :)

Something to keep in the back of your mind tomorrow....

"....both VIX and SPX were up today. From the chart below we can see (dashed vertical lines) that 7 out of 8 recently when both VIX and SPX were up on the same day, the next day wasn’t very pleasant." [Cobra]

Chart: http://tinyurl.com/mho3t2

Trading seemed awfully sleepy today. Perhaps the GS auto-trader was taken offline because they were worried it could be fooled by the folks who got a look at the algorithms over the past month. Couldn't happen to a nicer bunch of guys.

I'm going to guess from the lazy follow-through today and the widespread expectation that green shoots may not be so green after all, we will head fake up tomorrow - and maybe for a bit longer. The buck has lost all of its gains today and then some starting before the close and continuing afterwards. If it holds and perhaps continues, I'm going to bet on a 10-15 point up day tomorrow, led by a bounce in crude and PM.

I notice that energy stocks have outpaced the losses in crude - APA is down 28% from peak, while oil is only down 16%. Many of the energy-related stocks printed hammers or dragonfly dojis, they all have sub 30 daily RSIs (some sub 20s), so I'm thinking it's time for a bounce. Well I'm hoping anyway - I got CHK and APA near end of day today after seeing the doji.

http://www.marketwatch.com/story/low-quality-stock...

"Given the surge that U.S. stocks have enjoyed, maybe mutual-fund investors should just call it a year.

"The market's performance over the last three months is closer to what you'd see in a runaway bullish 12-month period. Diversified U.S. stock funds rose 17.6% in the second quarter on average, according to preliminary results from investment researcher Morningstar Inc. The group is up a no-less impressive 7.1% in the first six months of 2009.

"In fact, while U.S. stocks lagged their international counterparts, every domestic stock-fund category that Morningstar tracks enjoyed double-digit quarterly gains, and all but real-estate focused funds are up for the year. See story on international stock-funds' quarterly results.

"But the rally since early March, while heartening, hinged on the good fortune of lower-quality, smaller-capitalization stocks. Such higher-risk holdings typically lead the market once it hits bottom, but they may not have much more juice left."

ALOHA !!

The 1994 based U7 Unemployment rate reached 21%. The U6 rate is at 17% ... There must be a reason the US government prefers not to use the same Unemployment formula as they did in 1994, the U7 Rate. Hummmmmm????

Meanwhile the US PAYROLL WITHHOLDING TAX REVENUES for Q3 fell off a cliff and this marks the third consecutive 2009 Quarter that has been down. Each quarter is worse than the prior quarter for payroll withholding. This mean that the US government cannot fund its outlays just using tax revenues. Without a market for US Treasuries and without US Trust Funds open to hold IOUs this country would be in default. The current cost of outlays has now crossed the $9.2TRIL line, while the US TREASURY has only taken in $1.5TRIL in tax revenues. The SPEND RATE hit 5.90 today and there is no doubt that the OBAMA regime is even better at "spending" than the BUSH regime was. One more quarter until FY 2010 starts. The amount of spending in the OBAMA "pipeline" is just staggering when you consider CAP & TRADE, STIMULUS X, US Military and Universal Healthcare.

The IOUs are over $9.2TRIL USD ... that is not deflation in anyone's book! OBAMA is now making significant gains on the US PUBLIC DEBT and $12TRIL USD is within sight. God only knows what it will cost America to pay the interest on $12TRIL DEBT for FY2010? EMBEDDED DEBT since 1835 creates more EMBEDDED DEBT which begets permanently EMBEDDED INFLATION ...

"No nation need fear at any time to have less money than it needs.
-Ludwig Von Mises

kaimu - These numbers don't yet include the program that I suspect will be necessary to put a floor in the housing market. The longer they wait, the more expensive it will become.

http://www.financialpost.com/story.html?id=1764824

http://tinyurl.com/n93m26

what is going on? I.O.U's from the largest populous state, being sold on eBay? Goldman loses secret sauce and u.s attorney states in the wrong hands it can be used to manipulate and manufacture profits, yet no one is investigating?

I should send my next mortgage payment with an IOU. This is a sad sad moment for Americans. We don't fight back at all; this just after independence day.

Cool beans 2nd. By the way I was kidding when I mentioned going back to stealing the old fashioned way, but either no one picked up on the irony or they were afraid to mention it:)

"slaves mostly"

Now that was over the top.

I need somebody to review this stuff before I hit the upload button.

Nah...what do you call us when a government can rack up as much debt as they want on our backs. SLAVE, sounds pretty accurate

Light posting tonight. Bill is more responsive than the pawns. He is a knight, has a unique maneuvering capability and is full of surprises.

Maybe some of the pawns are "shell shocked" from the July 4 celebration. More likely they are taken aback by todays price action in oil, gas, PM, and even agriculture.

I am too, despite warnings from the knight in his dismal but prescient WIR.

Good nite/knight all.

U.S. commodities regulators, in an effort to crack down on excessive speculation, plan to propose sweeping trading limits on oil, natural gas and possibly other commodities.

U.S. Commodity Futures Trading Commission Chairman Gary Gensler said Tuesday the agency will hold hearings this summer to consider imposing position limits for "all commodities of finite supply." The agency will also review whether swap dealers, index traders and exchange-traded fund managers should be allowed to get around those limits through special hedge exemptions.

http://online.wsj.com/article/SB124696097259205141...

"The 1994 based U7 Unemployment rate reached 21%. The U6 rate is at 17% ... There must be a reason the US government prefers not to use the same Unemployment formula as they did in 1994, the U7 Rate. Hummmmmm????"

The guy who was in charge of U7 was probably one of the first to lose his job.