Cara's Commentary & Community Chat, Tues., Feb. 3, 2009

This one looks like it may have bottomed. Gold also may have some life in it today.

Archer Daniels Midland Co. said Tuesday second-quarter earnings rose 24% as improved product prices pushed revenue slightly higher.

One might surmise from Fibonacci that spot gold could pull back to 880 or even 865, before moving up again. That's been the action since Nov/08.

But then again, maybe not! Just a wild guess.

http://tinyurl.com/c89tfr
NEW YORK (AP) -- Shares of SanDisk Corp. slid in premarket trading Tuesday after the maker of flash memory cards posted a larger-than-expected fourth-quarter loss, said it expects 2009 to be challenging and that it may sell stock to raise cash.

today is a goood example of how the KITCO 3 day gold price overlay is a guide.
looking at the action you see gold's attempt to rise back towards $920, from there is fell hard dipping below $900.

its understandable that we'd have a small jump back today. i look at golds action here, if we can breach $920 level on this run today or into the overnight, then id be ready for the next leg up. i dont feel as if that will happen, and i suspect we touch in the mid-teens on spot gold before going back below $900 and resuming a short-term down trend. crude oil is slding again and the USD is still hanging in there while the broad markets are imho looking weak. i dont see this as a great set up, but i bought into HGU yesterday as it moved towards $13.

hopefully any moves down are quickly corrected and an upleg resumes

good luck

SNDK - Downgraded to Below Average @ Caris & Co. Price Target = $8. (Thank you for that, Captain Obvious)

note that 80% of allocation refers to 80% of whatever percentage one deems appropriate for a particular position...

not a big deal, but the title of this post still says monday with the wrong date.

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

hi Kar, I went ahead and sold all the drys I bought at 5.00 on the opening after reading todd in fl. comments - thanks todd.

I am holding uco, fas and auy = hoping they go back up a tad so I can get even.

watching closely today.

vb

why can't they just give the people the money to pay down their mortgage/debt. less debt = more equity + more savings + more purchasing power.

Why is every solution include the word "lending" and "bank"? Just give me the money direct deposit!

"Obama Foreclosure-Relief Plan May Guarantee Rewritten Loans"
http://tinyurl.com/dkg8fs

Well, if you give people cash now, they will pay down debt with no stimulus to economy. If you give money to banks, this (mind you, in theory) will produce 10x more lending due to fractional banking principle and stimulate economy.

Now, this is the rationale as sanctioned by official banking establishment (which has the world governments in their pockets). I don't agree with that as I don't agree with the fractional banking principle and greediness of bankers (and CEOs) in general.

But, the truth is it will take a generation of suffering to fix these problems.

The generations of excesses will have to erased by at least a generation of suffering. Noting philosophical about it, just a reversion to a norm on a generational scale.

VB, I agree this whole industry is for day trading only at this point - extremely volatile - lots of opportunity if you pick your points according to a plan. I mis-stated yesterday when I said I was in DRYS long.

The USD has weakened sharply over the past few hours and is now down 0.70. The euro and yen have made sizable gains. Gold is holding its own but has not been able to take advantage of the USD drop. We will see what affect dismal motor vehicle sales will have on the USD and markets later this afternoon.

Good luck with UCO vanilla. I was not impressed with the sharp spike down at the open. Even though WTI was trading up, sometimes +0.20, UCO was not following. I expected the big boyz shorted the open. Even though I was holding UCO@9.71 I sold @9.77 and am pretty much in cash at present, with intentions to increase cash.

The boys over at evilspeculator are catching my eye as of late. I don't know where the market will go when the new improved bailout pkg is announced. I am not impressed with the leaked details I have heard so far. I suspect after the pkg is announced, it will take some time to have an effect and the mkt may begin to lose patience along the way.

I'm expecting the usual weekly bounce(s) to come along as well. I think we muddle along, drifting lower this week. Just my guess.

Comcast will offer 10.00 deduction on next months bill.
Supposed hacker got into their network.

WARNING sensored but may offend some people
http://www.youtube.com/watch?v=CKfo5NsliVY

VB, my comment was not really designed as short term trading advice, but I'm happy that you were able to book some very nice short term profits.

The news driving DRYS is subject to the co. being able to hold up their end of the amended deal. So while it's a short term boost for the company, no doubt, if things do not improve in their biz, then they may be back at the negotiating table attempting to amend loan agreements once again.

The 50 DMA is just under $10. Could the stock get back up to the low to mid $8s on this run ? Surely, it could. But you'd need to be watching it second by second and move trailing stops up if it continued north.

All that said, in a stock/industry like this, one has to grab the gains when they're there. Well played.

New from Jim Jubak (DENSA Approved):

http://tinyurl.com/dc77dg

hi johnny and todd and kar,

Kar, for me, long is over 5 minutes!! so if you post Long Drys, I take it that you mean you are not shorting.

For me, until the banks stabilize, I am not investing in any stocks. I am holding fas betting that the banks will eventually work again. But, if they don't (like kaimu says) I will make out on the gold I have. I have auy but I also have some in the perth mint.

I am considering real estate soon as a better investment. I am seeing condos on the market in orlando for 50,000. Would appreciate thoughts on real estate deals nationwide.

thanks!

vb

vb -

Long time in commercial r.e. Metrics for appreciation are as follows:

Office Demand = Service Sector Jobs Growth
Retail Demand = Effective Buying Income
Housing Demand = Household Growth

Not happening.

Too early to buy r.e. unless you're negotiating with bank asset at pennies on the dollar and prepare to subsidize debt service for a few years. Key will be to jump in at price bottom and lock into lowest mort interest rate with no balloon before inflation hits and drives up the interest rates. Inflation will make your debt melt if the rate is locked.

Cheers.

VB, I hold some real-estate and had planned to build acquisitions during this down turn. I am on the US east coast, 2-1/2hrs from DC. That means something because the US government spends a lot of money in the extended metropolitan area and there are also lots of businesses that deal with government. Housing prices are down but nothing like what happened in California, Florida and other places.

I was bidding on a $200k+ home and it finally sold for $119K. I expect home prices generally to keep falling, reversion to the mean of 3X avg income by region and locality. I also decided that there are a lot of baby-boomers like me and many own multiple homes. Those extra homes were part of our retirement savings.

So, unless the US population begins to sharply increase, I don't see the Boomers needing extra homes as we age, we need the money. And there are a lot of extra homes on the market and getting foreclosed on continually.

So, I decided there may well be a glut of homes for decades IMHO. So I stopped trying to purchase more property, regardless of the price and focused on becoming a better trader.

If you want to trade in real estate, it's all about location and what that entails e.g. demographics, population density, jobs, transportation, recreation opportunities, schools/hospitals, quality of life, etc.

VB said:

"I am considering real estate soon as a better investment. I am seeing condos on the market in orlando for 50,000."

As you know, I'm in SW FL (and also involved in construction), so I'm somewhat familiar with Florida real estate.

Regarding condos, you need to know the monthly maintenance fees. Many of the condo associations have empty units due to foreclosures, which has led to bank owned units. In quite a few cases, the banks are not paying their maintenance fees, which has led the associations to raise monthly fees for those remaining. This can cause a lot of financial strain for those who assumed that maintenance fees would be stable.

In a condo, you may have a nice observation deck off your family room or master bedroom, and then discover someone has moved in below that likes to sit out there and smoke cigars. If you like cigars, then you've made a new friend. If you don't, your deck is all but unusable during the time the cigar smoker is outside.

Some condos allow seasonal renting, while others are restrictive as to how many months of the year they can be used by those other than the owner. Be sure you know the rules before purchase.

Also, research the history of the condos. Was it formerly an apartment complex that was "renovated" into condos ? Not unlike stocks, the price may seem cheap but it's probably for a reason.

There are 3 bedroom 2 bath homes in FL (cement block) on the market at or near $60,000 right now, depending on the location. You cannot purchase the raw land, the construction materials (block, cement, steel, lumber, windows, doors, floors, etc) and have them dropped (unassembled) on the lot for that price.

There are opportunities out there in real estate, for sure. But you have to know the area (or know/hire someone who does = not necessarily a realtor) and do you research.

Don't know about condos but watch out for Zillow when it comes to houses. My wife follows that website a lot and says the home descriptions are incorrect too often causing the "market values" to be highly suspect, if not downright incorrect. Anyone else experience that?

yup,

the plunge looks like its settling in at $890, may base around there for a bit then make its next stair-step down.

depending on how the markets move the next few weeks might be some consolidation for POG. moves back below $840 will make me nervous though.

this may just be one massive head-fake before an overnight explosion upwards through $925, followed by $950 in short order. no matter what gold will make you work for it.

pulled some article from the past. hope the board finds reading them as valuable as I did. now all we get are doom and gloom of the coming depression and Dow 6k.

http://articles.moneycentral.msn.com/Investing/Sup...

It's not quite as crazy as you might think, for it amounts to growth of only about 10% a year, once you account for the miracle of compounding. In fact, Dow 21,000 is a modest number compared with most other meaningful measures of stock value on the planet, and the index has the means and motivation to get there.

http://money.cnn.com/2007/05/04/markets/markets_05...

"It's pretty much playing out according to the plan that [Fed Chairman] Bernanke laid out for a soft landing," said Douglas Roberts, managing principal at Channel Capital Research.

Taken as a whole, the report seemed to suggest growth is slowing enough to take the edge off inflationary pressures but not so much as to drive the economy into a recession, all of which raised bets that the Federal Reserve might cut interest rates later this year.

Fed policy-makers are meeting next week and are expected to hold rates steady at 5.25 percent for the seventh meeting in a row.

http://www.nytimes.com/2007/10/14/business/yourmon...

Moreover, stocks have become a whole lot cheaper during this market, based on common valuation measures like the price-to-earnings ratio. A bull market is generally marked by climbing stock values, even by standards other than share price.

Indeed, after starting off at a lofty 27 in October 2002, the stock market’s P/E ratio has fallen to a much more modest 18. “If anything, this market has become more attractive based on valuation,” Mr. Paulsen said.

This is not the way it’s supposed to work. As bulls age, investors are supposed to be willing to pay ever-higher prices for stocks. Indeed, in the first three years of the previous bull market, which began in October 1990, P/E ratios for the S.& P. 500 index shot up to 22 from 14. “This is the only postwar bull where P/E’s have come down,” Mr. Paulsen said.

Dr C

as noted earlier, a pullback to 880-865 would not surprise, but to 840 would.

good luck/

i like examining EMA lines for broader trend changes on long dated charts.
SMA's are my go-to for shorter term charting.

periodically i call up 2 year charts of the large cap gold stocks to see if an overall impression and commonality exists among them using 20,50 and 200 EMA lines.

i noticed the following for ABX, GG and NEM (the juggernauts of gold miners)

1. 200 ema's are about to turn upward for the first time in 6 months for GG and NEM and about 1 year for ABX. this signals a broad trend-change occuring. could be weeks/months to fully suss out

2. 20 ema's are turned up and crossed above the 50 and 200 ema's for most of these stocks.

3. once the price of these three stocks is above all three moving averages, and all 3 EMA's are moving upward w/ the 20 above the 200, a major buy signal on the weekly and montly charts could cause a tidal shift from a technical standpoint as they have not been positioned as such for a very long time. if this occurs along side a move through $950-1000 gold, look out. the shares may make their grand reappearance after years of underperformance.

all imho.

these are longer terms moves i watch along side my ST stuff, and daily complaints about gold!!! ;)

I should have bought at the open.

"these are longer terms moves i watch along side my ST stuff, and daily complaints about gold!!!"

I love the complaints, they get me thinking and keep me focused. Otherwise, I might fall asleep....

just to add to my prior comment,

i cant post charts from my work but if you call up a 1 year chart of the GLD
with a 20/50/200 EMA study, you will find it almost disturbing at the technical picture:

20 above 50, both above 200, price above all 3 w/ the lower end of today's candle kissing the 20 before moving back up. its uncanny.

though the slow STO and RSI 7 are pointing down, if this set up can hold, it is a bullish development over the medium term imho.

ToddinFL

"There are 3 bedroom 2 bath homes in FL (cement block) on the market at or near $60,000 right now, depending on the location. You cannot purchase the raw land, the construction materials (block, cement, steel, lumber, windows, doors, floors, etc) and have them dropped (unassembled) on the lot for that price."

Just add that cost does not equal value, never will. Also, Realtors are advocates for the seller unless there is a buyer-broker agreement allowing them to represent the wrong fiduciary. A broker, in theory, protects the interests of a seller in a large transaction but Realtors have bastardardized that concept with a listing/inflated commission monopoly and a blurring of representation. European residential sales commissions are half of U.S. Realtor commissions. Beware.

Your comments are spot on.

Cheers.

and i am waiting for stochastic daily and weekly to signal when to get onboard the golden express.

GG
http://tinyurl.com/awkg2k
On the daily you will see the stochastic rolling over pointing down, and rsi also about to fall below the 50 line. MACD borderline rolling over to flat. Watching if it will seek to kiss the 50 dma at $27.24. also watching for stoch and if it will reverse from the 50 line or continue all the way down to oversold level.

Still in cash position.

If they just gave us the money, then where would politicians get the lobbying money the banks "owe" the politicians.

And, also, we're just idiots out here in flyover country. We'd surely use the money in ways that wouldn't return the money to politicians.

To me this circus is all about politicians getting the pass-through they think they deserve.

Why else would we be saving all the bad banks at the expense of the good banks and at the expense of otherwise successful businesses and at the expense of future generations' wealth.

Rob.

GLD needs a HD Monkey to get through the 50 dma.....

jack, I have the same problem. As Bill mentions, I just tune out even more of the noise. I reduced the scurities followed, sometimes trading only one for extended periods, learning it's peculiarities. Studying it, so I knew it like the back of my hand. Gradually increasing trade size with confidence. On days I lacked confidence I just don't trade or just trade small lots. I never try to sell at the highest price of the day, but I do try to buy at the lowest. My goal is to make money and any time you make money, you won! Then it's just a question of reducing the risks and a lot of that, for me, is making changes based upon up-to-date knowledge of the single trade I focus on. Tune out the noise and trust yourself.

Must think there is more money outside the politico mafia.
Or the Republican majority didn't need anymore added scrutiny in the club house.
Who's next?

wow.

this one in my IRA is up 80% since it came in as buy alert cara 100 stock
i own it and look like going to go higher. do your DD

Good morning! I see that UCO still did not hit my buy limit at $9.5, and so I got tired of waiting and bought it now at $9.77. The Dow Jones-AIG Crude Oil Sub-Index (^DJAIGCL), which is the underlying index for UCO, is sitting at a "triple bottom" level. So it either rises strongly from here or falls into an abyss. The second outcome is unlikely because oil is low as it is already, so I think it is a good bet now. Placing a sell limit order on it at $12 (so as not to sell too soon during a spike up, but if I see it at $11+, I'll probably sell it).

Also, I got tired of waiting to see FAZ in the $60's, so I have just doubled my FAZ short at $54.54. If I see it in mid-60's, I'll increase the number of my short FAZ shares by another 33%.

I am re-posting a comment I made late last night about BTU, since some people often tend to read only the current day's discussion.

*****

Johnny, I suggested BTU because I think it has seen its bottom already, and so now you can trade it without reading ANY news at all, simply by scaling in on the way down and scaling out on the way up (that's what I am planning to do).

Here is a price chart for Central Appalachian Coal Futures:

http://www.eia.doe.gov/cneaf/coal/page/nymex/nymex...

However, the short-term correlation with BTU stock price is not very high.
Interestingly, SLX (steel ETF) has a very high correlation with BTU/ACI, presumably because a large part of coal is used in steel mills. But I think another reason for this high correlation is that all industrial commodities are dependent now on the general industrial demand, and a rising tide lifts all boats.

Frank Holmes from US Global Investors mentioned recently that the Baltic Dry Index (BDI) is a good *leading* indicator of the future industrial commodity demand. He said that BDI actually measures the shipping rates (on large ships) from Australia into China. The chart of BDI looks very encouraging since early December, when many commodities have bottomed:

http://www.bloomberg.com/apps/cbuilder?ticker1=BDI...

Interestingly, BDI rose steeply during the last week, despite the general market selling off.

*****

Thanks vinod. It is one sick puppy indeed, with good room to move, as thousands of others. As long as it moves either way it is fine.

I little common sense can go a long way.....funny how many thought the 5 year bull run was never going to die. but it always does. Now this Bear is long in the tooth and there seems like there is no end in sight.

It may help to read about what bottoms look like:

THE FOUR GREATEST CALLS IN STOCK MARKET HISTORY

http://www.dowtheoryletters.com/DTLOL.nsf/FOUR+GRE...

"The market gave the unusual picture of hovering near the lows for more than seven weeks, and might be said to have made a “line” during the latter weeks of that period."

However, the investor asks, “Have we seen the lows for the bear market?” According to strict construction of Dow Theory, we cannot yet tell.

Surely we have many things which might lead us to believe this to be true – we have surely had a considerable period of accumulation, but these periods frequently preface secondary reactions, or occur at some intermediate point in a secondary. Should this secondary reach normal limits with respect to recovery and duration, and a decline of some weeks follow, and this decline did not break the bear market lows, after which a recovery set in which carried above the high point of the secondary now in the making, it would seem reasonable to suppose that the lows had been passed. And should the secondary now forming develop a sideways drag beneath normal expected recovery points, making a clearly defined “line”, and should such line be broken topside with some healthy advances, it

would be a splendid buying signal.

Robert Rhea
July 25, 1932

Dow Theory is in a very similar position today (if the INDU hold)

fireworks: do you know which four members of the Obama team have submitted their resignations?

at $40 for the shares I shorted today at $54.54.

jeez bullhunter, I figured you for a suit and tie, the way you're pulling off these upgrades and downgrades on a daily basis. I had you cut out for a Wall St. hack.

Nice photo.

The problems with this reasoning is everyday someone makes a prediction. Some of them, due to lucky timing, will be correct. We will forget about the incorrect ones. Even our Bill had a shot at one at the end of September and we know what happened.

The size of this correction so far is consistent in amplitude and time with a typical recession. However, this is not a typical recession. Sure, we will have a bear rally, hopefully soon (I'm counting on one), but the end of secular bear market that started in 2000 is not in sight yet.

>I like this appointment, a lot.

>But, I have to wonder why a leading Senator is buying Powerball tickets? His retirement planning, maybe? :-)

>From wiki, "Gregg won more than $850,000 in 2005 after buying $20 worth of Powerball tickets at a D.C. convenience store."

...and the 64,000 dollar question... did he pay his taxes on the windfall?

on my watch list. Probably stick orders in with buy stops above the 3PM price.

http://tinyurl.com/cfcayz

Buffett buys $300m senior unsecured notes from Harley-Davidson carrying an annual interest rate of 15%. Notes will mature in 2014. HOG’s on the road again (today).

sh/&, was idly thinking FDX and UPS might be oversold yesterday.

both up 6 percent today.

Johnny, I have never used ATR as an indicator... What is your thinking about the significance of ATR trending lower?

These guys are a slick bunch of thieves... no surprise! Don't worry though, they'll pass legislation to eliminate the problem, maybe even hide it in the stimulation package in some obscure last-minute addendum.

IBB/Gild
Gild peirced buy point.

long PRGO @ 23.19. Capitulation play. Max pain 30 for March.

long STI @ 10.00. MACD divergence. Capitulated Jan 21/22. Max pain for March.

Do your own homework.

Barry -

You're right, Mexico is suffering major civil strife. Think of the core as a drug war (real war, not the type the US has spent billions on) wherein 5,000 people died in 2008 (more than the US has lost in Iraq in 6 years!)

BUT, those deaths are concentrated in cities contested by rival drug gangs. 1700 of last year's deaths were in Ciudad Juaraz alone.

Because of the weakening of police forces (by infiltation and attrition of the good officers) a general crime spree has also erupted virtually across the country. (A Mexican friend of mine was robbed in her GARAGE last month, in a mid-sized town away from the drug war).

BBC reports that more people are now kidnapped in Mexico than in Colombia or Iraq. The recent and officially "accidental death" of the Interior Minister in a Learjet crash is widely believed to have been instigated by drug kingpins as a warning to the government to "back off". But Pres. Calderon is keeping the pressure on.

STILL, NONE of this seems to be affecting miners working in Mexico. Mines are in rural areas, and protecting concentrate on its way to processing, or bullion on its way from processing doesn't seem to have been a problem.

The key thing to focus on for miners in Mexico is that (per Joey) the Mexican Peso seems to be breaking down vrs. the dollar. If their production costs fall, and the bullion is sold in US$, that's a profit margin increase for producing miners in Mexico.

I don't know GORO, but Otto is a big believer. He covers Latin American juniors. He has done a write-up of the company which he sells for $20, and his work is serious fundamental work. So, it's worth buying if you own GORO.

http://www.incakolanews.blogspot.com/2008/12/gold-...

I agree more and more people are waking up to the two sets of rules and the institutionalized corruption. Now what we need is for the top brass to start caring what we see and think again.

Maybe Dashle stepping down is a sign we're headed in the right direction.

I hope so.

Rob.

"Maybe Dashle stepping down is a sign we're headed in the right direction."

No, it's the tip of the iceberg. The corruption runs deep, and it's well hidden under a very thick carpet full of fleas.

Yes, GNK is one of the better and larger dry shippers (I follow DRYS, GNK, OSG, DSX, EXM, NM & PRGN on a regular basis). On any given day one will outshine the others - IMHO it'll be a while for GNK to do what DRYS has done in the past few days (changed bad news into better news - for now). Just keep watching the press releases and wait for the opportunity to jump in). It could be GNK tomorrow - who knows. The BDI has risen for 10 days straight. Have fun.

No clear reason yet except for Gold Reserve's efforts to resist Rusoro's hostile offer.

Not adviseable to chase Rusoro, whose trading pattern since the crash now shows 2 sharp moves off of month-long plateaus.

Possibly,

the Obama admin should put on it's application form, "please be willing to pay taxes" before applying. I pay taxes and I get roads, bridges, an army, a police force, schools, parks,...etc.... Others pay taxes and get a shot at bending the presidents ear! Maybe O'bama should steer shy of the Clintonites for his Cabinet..

it's a matter of perspective I guess :-)

I will be waiting to read Bill's take (if their is any)on the markets interpretation of the recent "A" team fall-out....

bought a little TBT prior to the housing report...mostly watched

DB

on O'bama's application

Glad i found this blog and am learning to manage my own financial future. in the 1st month of the yr i have made more trades than all of 2008, and I am up handsomely (although buying SLW at $2.86 changes things). However my avg gain per trade is 17%. (5% without the $2.86 monster trade on SLW)

Even in the midst of chaos on wall st and dc, this blog has helped me start to fight emotional decisions and try to build more systems and logic into all trading decisions. this helped me miss a 20% loss in gm on Friday. I sold immediately after buying, once i realized i bought on emotion. none of my systems told me to buy yet.

And after i bought MDRX on emotion, i then too saw it was a flawed trade and cut my losses quick. (seeing Jim C on their homepage helped too)

It's what also is keeping me out of gold stocks at this second(right or wrong).

I may not be professional grade as GMC slogan, but i am no doubt smarter now vs when i first registered at the old blog on the typepad platform over a yr ago.

thanks to all the community for adding to my tool belt too.

back to bashing our system :)

on volume and lack of leaders.

http://tinyurl.com/kl72q

28 new highs
290 new lows
not counting BB

NYUgrad,

like yourself, I am very thankful to have found this site. My discovery was on a fluke. I read something last fall that Seeking Alpha published of Bill's. I read it and instantly noted he was different than the many other market pro's "opining" on the net. I went to this site and have noted a real change in my approach to trading since.....gratt's

While I can't say I have a full grasp of Mexican politics/government, I am aware that Mexico relies heavily on their state operated oil production - which in this economic environment translates to a huge loss of revenue over prior years.

This probably explains (partially) why the Mexican currency is getting walloped vs. USD (MX Peso down vs. USD today even while others are showing significant strength vs. USD)

From a perspective of political risk to mining operations, I don't think Mexico will be trying to nationalize mining operations. If anything they need all the private help they can get to fund the kind of investment activity to keep jobs and tax revenue flowing.

Just months ago, Venezuela tried to go it alone with oil and look where they are now:

"Chávez reopens oil bids to West as prices plunge"

http://www.iht.com/articles/2009/01/15/america/15v...

reminds me of a story called "The Boy Who Cried Wolf"......

"the Obama admin should put on it's application form, "please be willing to pay taxes" before applying."

I'm guessing there'll be a rush to pay back taxes amongst politicians this year which just might erase the federal deficit now that these guys aren't just spending taxpayer money, but spending their own as well. What a great way to pay down these bailouts!

Gold breaking out after hours

Bill called it

Welcome to the Club Citigroup...

Wells Fargo & Co. abruptly reconsidered a pricey Las Vegas casino trip for employees Tuesday after a torrent of criticism that it was misusing $25 billion in taxpayer bailout money.

The company initially defended the trip after The Associated Press reported the company had booked 12 nights at the Wynn Las Vegas and its sister hotel, the Encore Las Vegas, beginning Friday. But within hours lawmakers on Capitol Hill had scorned the bank, and the company said it was reconsidering.

The conference is a Wells Fargo tradition. Previous years have included all-expense-paid helicopter rides, wine tasting, horseback riding in Puerto Rico and a private Jimmy Buffett concert in the Bahamas for more than 1,000 employees and guests.

http://tinyurl.com/9v426
(you may be subject to an ad cnn sells prior to the Obama interview)

I dont even think it's his fault. He is the President. Is he supposed to audit every appointee's taxes? I am sure he goes to bed thinking "what have i gotten myself into?"

I am glad those who were found to have a violation stepped down, except Geitner. Under Bush, all these roaches would have gotten a pass. we wouldn't have even heard about it on the news.

Prices=(Money in system * Velocity of money) / Quantity of economic output

Price increases as:
Quantity of economic output -> 0
Money in system -> infinity
Velocity of money -> infinity

A bull trap? Am I missing something?

If this man is so extremely smart he should have made a killing on 08 as well shorting oil, gold stocks and the market in general, yet his earnings in 08 were less, did this have something to do with another Paulson in the White House not being able to pass on info. or that it would look bad, if it stinks there is bound to be a skunk around.

In 2008, his funds didn’t climb nearly as much but were still successful enough to put him at the very top of his profession.

Excellent piece, just started my sub with Portfolio and on a related note, Alan Greenspan is on Paulson & Co's board. He who didn't know how to identify a bubble, encouraged floating rate/sub prime mortgages and the like is 'advising' Paulson.
Made me want to hurl when a buddy passed this on to me last year.
http://tinyurl.com/dxl25r
Why wouldn't one hire the clown that created the mess?

I'll bite...

1st off, i appreciate you sharing! But isnt this also the reason 1 indicator is never enough? much harder to tweak a set of indicators and comparisons with other stocks, vs just using 1 indicator.

Not when you apply that indicator with a price action up or down.

Ex SLW

Except the blue arrow/blue vertical lines on Oct & Nov, if you count the 7 others, where stochastic was turning up from oversold and crossing thru it, the price moved up. that is irrefutable.

If you sold on each red vertical line, when stochastics was turning down crossing thru the overbought line, it would also have saved huge losses. Also irrefutable

:)

My mission is to learn from this.

Quasi said "you have to know the characteristics of your stock, how it reacts and what indicators / settings work for it."

that is what i am starting to learn and forgot to point out. there are subtle intricacies in each stock, especially in between the oversold/overbought lines for rsi and stoch, for diff stocks and sectors.

before i buy any new stock, I try to do my mickey mouse chart exercise with diff combo of indicators to see what worked for it in the past 12 months and the past bullish phases. as well as what indicators worked well for sell signals. even then i realize it may not work moving fwd. i guess its all an exercise of minimizing risk and building a system. :)

I think I'd argue with a few of your entry and exit points on that chart. I see it more like this:

Looking for oil production costs by region/country?

Here's a chart I've seen around and repost from Jessie's blog that shows oil in the $70 to $80 range for marginal costs. Something or someone's gonna give with oil at $40 as suggested by Bill.

http://2.bp.blogspot.com/_H2DePAZe2gA/SYj8f8EoTGI/AAAAAAAAH_c/liZqa38kC4s/s1600-h/CERAoilcost200810(2)_0.png

I dont think i am breaking laws as i am just using Google as my resource.
If you ever come across a article from wsj or nyt and it only allows you to read a blurb, copy the title then google it. the link to the 1st result will usually be the full article.

My guess is many publications want traffic from Google to proliferate their brands.

EDIT: case in point.

"U.S. Plans to Curb Executive Pay for Bailout Recipients"

Excerpts

President Obama and Treasury Secretary Timothy F. Geithner will announce the executive compensation plan on Wednesday at 11 a.m. in the White House Grand Foyer.

Executives at companies that have already received money from the Treasury Department would not have to make any changes. But analysts and administration officials are bracing for a huge wave of new losses, largely because of the deepening recession, and many companies that have already been to the trough may well be coming back.

“That is pretty draconian; $500,000 is not a lot of money, particularly if there is no bonus,” said James F. Reda, founder and managing director of James F. Reda & Associates, a compensation consulting firm. “And you know these companies that are in trouble are not going to pay much of an annual dividend.”

Dr. Strangelove, this chart most likely reflects the costs of starting a new project (and less likely it is just made up). Suncor predicted (in their most recent earnings report a couple of weeks ago) that their oil production costs for 2009 will be in the $33-$38 range. I am attaching a chart showing the operating costs for the other producers. If oil stays below $20 for the long term, then all Canadian oil sands will be shut down. However, based on this chart they produce only 2.4 million bpd, and with the current demand the world will not notice this loss in the short term. The remaining oil currently produced has the operating cost below $20. So in the short term, oil can fall down to $20. If this were to happen, then it would cause major problems a year from now due to resource depletion and project maintenance, and will cause a serious oil spike much sooner than otherwise. So it is reasonable to start scaling into oil now, but not for the reason that the current price is below production costs.

That did not work as I googled news "Heat Rises on Dow Chemical"

http://online.wsj.com/article/SB123358978236239621... is the link.

WSJ still thinks its news is worth $$ while its editorial crap is too obviously free and flawed.

Kevin Depew

Deflation & Coming Soon? Punitive Taxes on the Rich

Why is the Fed so phobic about such an important word? Two reasons: First, the Fed itself IS inflation. Increases in the money supply are what causes inflation. Rising prices are simply the result of the Fed's inflationary policies. Two, recognizing this fact, Fed members will rarely utter the word deflation publicly because doing so is similar to an outright admission of impotence.

Put another way, if the Fed says it is concerned with "undesirably low levels of inflation," then what they are really concerned with is a lack of power, a fundamental inability to successfully increase the money supply and thereby kick-start a general rise in prices.

The key here is that deflation is a psychological shift among consumers and businesses in time preferences and risk appetites. The Fed can make credit available, but they cannot make lenders lend, or potential borrowers take on more debt.

It's About Real Interest Rates

Here's why understanding real interest rates is important, however. During a deflationary debt unwind nominal interest rates are virtually meaningless. If the rate of inflation is actually declining, then your real return is much higher.

Meanwhile, in the "real world," real interest rates remain impossibly high, infinitely high in some cases, all of which is simply a fancy way of saying credit is tight, and in some cases completely unavailable for consumers and businesses

Get Out Now!

warning from from Mohamed El-Erian, chief investment officer of Pacific Investment Management Co.: "Get out of Treasuries. They are very, very expensive."
...That does sound like one disastrously inflationary cocktail. But below is why it may take much longer to make that drink than many think:

http://www.minyanville.com/articles/AXP-Fed-Credit...

Shorting Treasuries will win big before 2009 is out. Just not sure how to go about it with society looking for scapegoats

at $9.5, so as to trap a potential down spike in the morning.

Good Evening (Morning?) all;

Can anyone suggest a good piece of software that can be used for back-testing TA strategies? I've been developing some simple rules that I like to use, but I'm concerned about the long-term viability of these rules and need confirmation before I start throwing a lot of money at it.

I'm still learning to accept small losses (but now do so with a shrug) and look for the big trends. It's been a real eye-opener over the past couple of years to see how much of a role personal psychology plays (i.e. confirmation bias) in my results. It really does take nerves of steel to catch the big moves.

Any and all help is appreciated.

JR

Checking in from Australia, taking advantage of the weak AUD to check out a few things and catch some R&R. Monitoring the markets from afar and planning on checking in, now and then.

First impression here in Sydney is very positive. Friendly people. Diverse population. Economy does not appear to be as bad as U.S. or others, although some talking heads opine Australia lags 6 months behind economically.

Would have to say majority of visitors/tourists appear to be from Asia, mostly Chinese, although there are a number of Europeans, Canadians and Americans.

Prime Minister just announced a $42B stimulus that the opposition party is jawboning about fighting it. And their CB cut rates 1 point, which all 4 banks have passed on to the public. Too bad that doesn't happen everywhere.

Stepping back there certainly is a lot of promised global stimulus from a number of countries and when it kicks in, things may move faster; but hurdles remain and that still appears be months away.

Observed Canada's Bombadier manufactured the Sydney light rail cars and VE is managing their monorail.

Walking down a path at the zoo and there it was: A Black Swan. Actually two black swans! And Taleb was nowhere to be seen.

vinod, NYUGrad,

vinod: I totally agree. I've had a number of run-ins with the IRS over many years. Each time I was proved to be in the right. Their accusations always came with a penalty threat attached. It took several months of back and forth (at times costing me when needing legal of accounting backup) and never so much as a, "Whoops, we're sorry,," in the end.

By my count Obama's list is at three so far — Geithner, Daschle and a woman whose name I can't recall. It looks to me like the whole of D.C. has managed to dodge taxes.

NYUGrad: It's not a matter of Obama auditing each candidate (although his staff should) — the problem is that he is simply saying, "I take full responsibility," and allowing Geithner to run the IRS." A simple "mistake" like that and neglecting to pay with penalties for you or me would be called tax fraud!

Bush bad behavior should not be a measure of truth. Obama ran on "real change", but I'm hearing the same kind of smooth talk I disliked when he was just another Illinois politician.

Mackinaw,

Dream subject matter

LOL! At 71 the quality of my dreams is not what it was at 17 either!