Cara's Commentary & Community Chat, Tues., Jan. 6, 2009

"The Dow Industrials fell 81.80 points, or 0.90 percent, Monday, closing at 8,952.89. NYSE volume was higher at 138 percent of its 10 day average. Upside volume led at 54 percent, with advancing issues at 66 percent, with upside points at 52 percent. S&P 500 Demand Power fell 1 point to 438, while Supply Pressure fell 3 points to 375, telling us neither side had strong interest in taking a position. Monday's decline was mild and we believe was corrective. We saw a small change in the McClellan Oscillator Monday, which suggests a large price move is coming Tuesday or Wednesday. What direction? ....... There was a Bullish divergence Monday between the Advance/Decline line Indicator and prices. The 30 minute Full Stochastics give indecisive guidance for Tuesday, while the 15 minute Full Stochastics suggest prices could rise."

News for 'UXG' - (*DJ US Gold Corp-El Gallo: Two New High-Grade Areas Discovered)

I guess details will come out later today.

I just want to mention...You will spend 24 hours in NYC jail for smoking a joint on an empty street, if caught by the undercovers...

And Bernie Madoff stole BILLIONS and wasn't even held overnight?

Comeon.

Based on the historical extreme we reached on the Gold/Oil ratio last week, I have been rotating my speculative interest from junior miners and into junior oil producers over the last few days. Part of my reasoning is that miners have benefitted from the continued plummet of oil prices but that may no longer be the case(since fuel is large expense for miners, margins were expanding rapidly). So I raised cash from selling some miners that were up nicely and rotated into junior oil stocks. I am still long term bullish (but short term bearish) on miners.

Friday and today I opened positions in NuVista(NVA.TO), HighPine(HPX.TO), AED Oil (AED.AX), ROC Oil (ROC.AX),Compton Petroleum (CMT.TO). Compton I bought based on RSI buy trigger alert.

The action I am seeing across the board in oil juniors over the last 3-4 days is reminiscent of the action in junior gold producer stocks about 1-1.5 months ago.

Craig....It's FEWER wives, less water. Fewer sheep, less open space. If you can count 'em, it's fewer. If you can't, it's less.

GOOG...I always knew this one would turn into a MONSTER short. Just a monster.

thats some conviction. or eager beaver trying to get in before ctab report :)

What would they have done with Madoff in China?

An associate of mine thinking he was smart once stashed a joint in his shaving bag before heading off to Japan. We finally found him in prison garb squatting bare-foot on the balls of his feet in the center of a small cold jail cell. It cost him his job.

Has an it been discussed what a good exit point for the TBT would be?
[By the grace of G-d I got in an 36.03]

I won't go into here... but I strongly disagree with you. Anyhow Sandy, do you have a good exit point for TBT? Would like to max the gains on this one.

Its pretty easy to find an entry point for any trade, its just finding the right selling point that's the hard part.

I tightened my stop a bit this morning. I still think this trade has a way to run, but we may get a pullback.

Did the same with DXO.

Take it for what it's worth. You can miss a significant part of a run by setting your stops too close. As I did with SLW.

RSI 7 day breaks above 30 but I'm not chasing. Buy limit 14.90.

Mr Cara

May I ask a stupid question .... what do you mean by the following statement in regards to SLW?

"think it is close to being fully priced at this level"

My take is that the silver price will go up as the risk taking returns in the next couple of months. The gold:silver ratio is ridiculous now. This why I'm long silver and short gold (small position).

C$ is gaining sharply on the greenback

BAC From neutral to buy.
GG Remains strong sell.

Bill,

Will those political issues in Brazil impact the value of Yamana?

I agree for different reasons. We had a huge influx of dumb money buying in the last couple of days. Dumb money also covered shorts in late december. I bet a strong down wave followed by improving markets.
FD: long TZA at 43.3 and underwater, no take it back, in the money now.

Billionaire (maybe ex-billionaire?) Adolph Merckle throws himself in front a of a train.....

I'm worth less than the lint in Merkle's coat or his couch change, even after a massive correction.

Somehow I feel more positive.

C$ presently up across the board, esp euros (4+%)/ except down BRA reals and RUS rubles

From psychological research, loss is 2-3 times as painful as equal gain. I know it too well personally, recently as I started buying energy and miners early. It felt not too good. It makes me wonder if it worth to do trading, as one exposes oneself to a lot of emotional trauma. I only do it short term to erase the huge 2008 losses in my portfolio.

Here's a rough quote from Lermontov that reflects a trader's negative mindset:

"He is in madness dreamed of storms in the hope that they would give him peace."

I can relate to the losses, being chomped on in 2008. Some of us start out with far less than others.

How is it that those of us with far less seem to see there is value in the things money can't buy. Is it because we are forced to?

I mean, Merkle wasn't anywhere as broke as some on this list who count themselves as lucky for what they have.

Maybe it's harder to fall than to never gain elevation.

Considering just where we've been over the history of money, and the result of years of history, and its logical consequences when it comes to money, which is the attempt by commercial banks and governmental agencies to legitimize the regime of credit derivatives into the quadrillions, their notional value determined by their talismanic mathematical equations, would not gold be the ultimate "credit default swap?"

It has a price, and a formulaic relationship with the long bond, short term rates, currency fluctuations. In fact, should the entire global regime of securitizations fail in the wake of defaulting sovereign debt, then gold without any contractual obligations or fluctuating interest rates would accrue, just like a credit default swap.

Credit default swaps held as risk against any credit derivative are often characterized as risk insurance, but are third party liens with excessive interest rates that drive value out from under the holder of the credit derivative. They are a market trap that depend on a zero sum game of the eventual illiquidity of the borrowers. If the sovereign debt which is now under the exclusive patronage of the commercial banks, (a very small number of the institutions to boot,) is ultimately written with a credit default swap attached, then it is likely no different than sub prime or Alt-A mortgages that can no longer return exhorbitant interest rates.

So what, exactly do need to hold as risk insurance against the risk insurance?

We really have come full circle in the history of money and re-invented the wheel.

No need to apologize to me. it's your house :)

“Where were U.S. investors better off last year: In the Dow Jones Industrial Average, down 34% or the Nikkei 225, down 42%?

Strangely, the latter.

Currency volatility was so extreme in 2008 that in many cases it outweighed the effect of judicious international equity allocations. For dollar-based investors, the Nikkei was down only 29%, thanks to the soaring yen.
The impact for sterling-based investors was even more pronounced. They lost only 3% on Japanese equities, as the British currency slumped.

There is of course a flip side. Dollar-based investors in the FTSE 100 lost half their money in 2008, despite the index falling only 31% for the year. And those that were lured into outperforming emerging-markets funds during 2007, discovered that some of the strength was fueled by the weak dollar. The Brazilian Bovespa index rose 44% in local currency that year, but 72% in dollar terms. In 2008, the story reversed. The Bovespa fell 41% in local currency and 55% in dollars.”

http://tinyurl.com/72u95r
(WSJ online-subscription may be required)

"Maybe it's harder to fall than to never gain elevation."

Reminds me of the old saying: The higher one goes, the harder one falls.

Pookster, went a little long DOW at $15 (like the company, like the dividend too, if it holds) - did you ever pick up TRA?

The market today is acting like a tight spring on the verge of breaking loose. I recall this type of slow movement back and forth in 2008 right before a big breakout. Just which way will it unwind today...up or down? If you buy into McHugh's TA [1st post] then it will be upward.

My favorite is #10!

Longer-term Treasuries fell for a fourth day, pushing yields on 10-year notes to the highest in three weeks, as concern the U.S. will sell record amounts of debt drove investors from the safety of government securities.

Benchmark 10-year note yields increased almost half a percentage point in a week, the most since September, on U.S. spending plans. Yields on notes and bonds climbed after President-elect Barack Obama told House Speaker Nancy Pelosi yesterday he favors a $775 billion economic package...

“We saw tremendous gains last year and a lot of flight to quality built in, and now we are seeing some of that get sucked out of the marketplace,” said Tom Tucci, head of U.S. government bond trading in New York at RBC Capital Markets, the investment-banking arm of Canada’s biggest lender.

http://tinyurl.com/8y49j7

Pookster,

I see. My gut feeling is telling me that those 800-900 pt swings of Oct/Nov are pretty much over and done for a while. A lot was sold off to ridiculous levels in those 8 weeks, so I think we are seeing some covering now in a lot of issues (or maybe its January effect that started in Dec). Last several days, actually past 2 weeks I have seen long green in all of my holdings. I'm not over-confident - just more confident than I was 2 months ago.

TRA has had a nice move off its bottom of 12 - I'm holding as I believe it goes higher from here, but would not recommend an entry at current quote, ie I say hold it if u have it.

"Chairman Ben S. Bernanke sees the thawing of frozen credit markets as critical to a recovery, and is determined to try to prevent a second wave of credit distress as the U.S. weathers bad economic news over the next two quarters. The Fed is now looking at ways to revive lending by using its balance sheet to hold loans and bonds that investors don’t want."

Buffett style - Bernanke wants to invest your children's future in bonds and loans investors don't want. He just needs more taxpayer money.

Won't there be a rush to corporate bonds coming to a theater new you? I think this started a month ago...

My two cents worth in the consumer discretionary arena are:

News Corp. (NWSA)

Fortune Brands (FO)

I haven't examined their balance sheets either but they do trade actively with volume.

Clive Mound has posted his excellent gold market analysis at 321gold. In a nutshell, we're ST/IT overbought and vulnerable to a hard pullback before the next leg up. Check it out.
http://www.321gold.com/editorials/maund/maund01050...

Looks bullish to me, an ascending triangle breakout and test.

I've been trying to get my arms around the divergence between the credit spreads like the AAA CMBX spreads and the TED Spread. The AAA (and lesser quality) CMBX spreads have stayed at a very lofty level while the TED Spread has continued to drop back down to July 2008 levels.

My theory is that with the banks essentially being fully backed by the Fed and foreign governments, the willingness of banks to lend to one another is greater than it was a few months ago. Yet, the willingness of banks to then lend out to corporations and individuals is still very weak because of the tough economic conditions and deteriorating corporate/individual conditions.

Craig, actually a nice sentiment behind your comment. I thought along the same lines. I also thought Oh Oh. Is it worse that it seems (yes) and is it going to get worse than it is now? I don't know. Thats why Vads mantra of "trade what you see.." is a learning mantra for me. Now I'm looking at the short Etf's. This bounce since Oct 17 or 22 is very nice,...but...? I want to go long. I yearn to go long. Its less fun as part of the Bear market, imho.
Had too tight stops on TBT -let go at 39.75 and STX-out at 5.17 Ouch
peace from the north Puget sound. Keep your feet and your powder dry.
fd= long SLW, AUY, TCK,WFMI,NOT, BAC, OPT.to,RY

at first glance, the holdings of PHB look pretty good. but the price of PHB has gone parabolic and i'd rather buy it when it drops down some. i'm going to have to look at this later on this week when i get a minute.

I was out when it happened but NVDA is starting to look ok as an investment. Solid close above 10 is needed for an investor.

On another subject....

"The New York Yankees announced that they have signed first baseman Mark Teixera to a whopping $180-million, eight-year contract...The Yankees have handed out a staggering $423.5 million worth of contracts during this offseason. Just last week, they gave C.C. Sabathia a $161 million, seven-year contract and pitcher A.J. Burnett a five-year $82.5 million deal."

Ok, baseball has bad rules about payrolls. That's how it is. But please...
I do NOT want to hear any Yankee fanatics crowing about how great these Yankees are IF they should win it all this year. Their concern shouldn't be about winning, winning sure as heck ought to be assured. What Yankee fanatics should be worried about is what will it mean when these Yankees lose again?...Will you guys be able to live with yourselves or will you be throwing yourselves under the 6-train?

I can't recall who put the screen out but does anyone have the list of technology company's that (were) trading below the cash on their books?
Would appreciate seeing the names again.
TIA

Yes, and I'm salivating over the yield. The risk/reward looks competitive to me.

i put that out some time ago...i'll look it up again.

Re: the above. Bounced out at 42.1

I'm NOT saying to buy this dog with fleas, but it is looking enticing on the daily. No position.

you got mail

I forget which one of you said this but whoever said gold was strengthening this morning when it was down 8 bucks gets a "gold star"

http://tinyurl.com/85m3rf
"NYU, the largest private university in the U.S. by enrollment, said in a complaint filed Dec. 23 that it had at least $24 million in losses after Merkin and his funds invested its money with Bernard L. Madoff Investment Securities LLC without informing the university. Merkin, who has denied wrongdoing, may be deposed in the case, Lowe ordered."

the most astonishing fact about the entire saga to me is that Madoff's sons were the ones who turned him in after he confessed. How lonely of a world must Madoff have built around himself for this to occur?

went to a reunion of sorts last week and several classmates from Stern class of 99-01. many are out of work, changed industries or in limbo at current jobs. One who was with ubs this time last yr, was now at madoff as a trader. not much work to do as the entire place is a crime scene. I felt bad as he has two babies & new house, but hopefully they all land on their feet.

the saddest part is i dont think NYC will ever be the same. NYC always stood for hard work, opportunity, liberty, Wall St, a new chance in America. thats why my parents brought me here in 1980 when i was 4.

That all seems to be at risk for my hometown.

GG moved from strong sell to sell.

F remains a buy, same as previous status.

As likely co-conspiritors in on ongoing criminal enterprise, Prosecution has convinced the Madoff boys that their best interest will be served by distancing themselves as completely as possible.

I recall that when my man Stew Leonard Sr. stole 400 million in taxes using drop boxes and all manner of subterfuge, his son Stew Jr, though involved to a degree, was spared prosecution when pops fell on his sword and pled guilty. Apparantly the Madoff boys expected no such honerable behavior from their pops.

It is an OUTRAGE that this guy was allowed bail. An OUTRAGE.

Rumer has it that Madoff knowing he'd been caught moved funds then instructed his sons to blow the whistle... His sons apparently had their own capital with Lehman earlier on. The Madoff's had prepared in advance?

“WE HAVE VIDEOTAPED PROOF THAT THE E*TRADE BABY WAS USING A FAKE VOICE, DIVERTING INVESTMENT FUNDS TO PARTY CLOWNS, AND BUNDLING SOILED DIAPERS AS COLLATERALIZED SECURITIES.”

Baby:“IT WAS LIKE, SO EASY … THE SEC WAS CARRYING A BIGGER LOAD OF SH!T THAN I WAS.”

http://satiricalpolitical.com/?p=5229

Madoff, I believe, is just the tip of an iceberg much larger than NYC.

RVEP up 196%

I do not know how many people Madoff had to help him pull this off, but it is not a one man job.

I think that there is a high probability that the sons are part of the scam and that the plan was for Dad to take the fall and have his sons look the hero by turning him in to the Feds. Same goes for the latest caper, let’s report to the authorities the receiving of assets by mail which is against bail terms and we continue to look good.

Of course this is speculation by me. The main reason why I think this is if Madoff was my father I would want to know how my father was making such consistent returns and insist that he teach me his methods so that upon his death I could do it for myself and clients.

If you have a better scenario, let me know.

Your scenario is plausible, but not the likeliest choice.

More probable is that once they were apprised of the fact that they (the sons) were "part" of the largest fraud in the history of mankind, they became so rightfully fearful of prosecution that they determined to do anything to keep their rich asses out of jail. It's kind of like, you're a passenger in a car, the driver stops in front of a bank, says "wait here", returns with bags of money and then when caught by Johnny Law,it's like, "Cmon...you mean to tell me this guy wasn't robbing a bank? Tell it to the judge."

I'm betting that Sr. has a "deal" worked out w/the "boyz" so that he will take the fall - sparing his sons.

Most parents would prefer to take the pain rather than their children.

BTW prosecution better get some more evidence on the sons so that they can force this _____ inside for life.

I normally oppose prison for non-violent offenders. For this _____ I make an exception.

Well that did it...the moment he uttered the words, JOYG took off like a rocket.

Upgraded to neutral now.

committed a non-violent offense...the 'ripple effect' ensures a chain of violent actions/reactions will result from the loss of $50b-> aside from the foreclosures, repossessions, lost dreams, and altered life-styles, a wave of denial, guilt, anger and rage will surely lead to countless acts of violence, be they domestic, familial, retaliatory, self-directed, and/or ultimately senseless...in the global scheme of 'things,' Madoff was one bad _______...

Got stopped out from TZA.
This rally is surprisingly strong. Will reevaluate later.

to me it looks like an intraday double top. i could be wrong, but that's what i'm betting on. investors have to be nervous going into friday's jobs report with 25% gains off the lows.

GDX gap filled,
HGU still some upside.

im not getting back in until i see what happens post gap fill for hte HGU.

gold is just bouncing back up to levels where it was at the start of the year.

until we break through them im in wait and see mode.

but things over at the CDNX are definately looking good, which may be a strong sign going forward.

as usual this notion of rebalancing to affect commodities hasnt worked according to the rumour's logic. we saw gold fall then rise alongside most other commodities on an up day in the broad market.

i call junk on these types of events that almost seem to easy to affect prices. akin to "end of month balancing", "tax loss selling", and the like,
they are never proven and at best anecdotal.

ALOHA !!

As the real estate crisis deepens and job losses abound as the economy tanks there are a couple sectors that may afford some upside. One I have mentioned here before which is the storage facility business like PS-Public Storage. The other is home security services. Brinks(BCO:NYSE) recently spun off its home security division in Nov 2008, Brinks Home Security(CFL:NYSE). The spin-off has done well and is up around 75% from $13 to $23. As people may feel less secure they will turn to home protection. Brinks has an excellent track record in that industry. If you are hording gold then you need an alarm system like Brinks to give you a heads up before you grab your other home security device "GLOCK"! For those wishing to spare your intruders life so that he or she can waste away in prison then grab your "TASR"(as in "DON'T TASE ME DUDE")! Interesting enough I used to follow a company a few years ago that had the patent on electric bullets that could be used in any firearm and when the bullet came in contact with the perp it emitted a high power electrical shock that incapacitated the target! I have since lost the name of the company. It was operational to 300 yards. I think that would be the best alternative since allowing a perp within TASR range is on the risky side!

Not sure if home security has been a topic of discussion here in the past.

I used to install the real McCoy at California and Federal Prisons ... I am not sure if "razor wire" is association approved for your neighborhood!!!

IN SRS @49.27, small, moves like a bungee cord

thanks bill...teamwork always counts.
very professional and educational.

Bill,

With the Madoff case front and center in the U.S., a bond scandal in Italy is probably beneath the radar, like a page 16 newspaper item. However, it may very well explain the USD action.

Some of the usual bank suspects involved with this one.

Direct from Everbank’s Daily Pfennig:

“There's a bond scandal that was uncovered in Italy, with Italy losing large sums of money, and some major banks like Deutsche Bank and UBS are right smack dab in the middle of the investigations. With Deutsche Bank in Euroland, and UBS in Switzerland, there you have the story behind those two currencies taking a beating from the dollar the past two days. There are other banks like JP Morgan Chase reportedly involved, but the majority of the problems resides in Europe... Let me try to explain the problem, as I know it to be from reading the story in the U.K. Telegraph last night."

"Investment bankers, many based in London, spotted a major opportunity in the 1990s. Italian cities and regions wanted to borrow money. In order to avoid ballooning debt, the central government required local authorities to put away a percentage of the loan every year in a "sinking fund" so that when it was time to repay the full sum, they would be able to do so."

"Investment banks offered to manage the sinking funds. While the funds initially had to be invested in Italian government bonds, the criteria were widened to include other government debt within the European Union. This could include debt from countries seen as more likely to default, such as Greece, as long as it was triple-A rated."

"The banks took a fee to manage the sinking funds. They argued to the Italian authorities that as well as saving the money to repay their initial loan, they might also make some money from the investments. Many did when the global economy was booming."

"All of the contracts were different. But critics have said some contained a "sting" which was not properly understood by some of the Italian authorities. While the local authorities only earned a return on the money they put aside, the value of their total loan was at risk. The banks could invest all of the money the authority had borrowed through bonds. If everything went well, the bank would pay a return based on the incremental amounts the local authority was putting into the sinking fund, and keep the rest as profit."

"If things went badly, it was the local authority which would have to pay for the loss - and then also have to pay off the bond when it became due."

"And THAT my friends is the big bugaboo right now... Things have not gone well, and the local Italian authorities (like cities) are left holding the bag, and they have no way of paying this debt!”

I wonder what happened to NOT.V today: up 73% today with no news. Insiders probably know something, so let's see what kind of news will be released tomorrow. :) In any case, I am preparing to take some profits on NOT.V: placing a sell limit order at $1.21US for the 2000 shares I purchased at $0.71US in October.

I would suggest AMZN for the consumer discretionary sector. I'm not sure if its fundamentals are strong enough but they do seem to have improved over the past few years up to this point. I think it would be appropriate to have internet commerce represented in the 100, and AMZN is certainly the giant in that field. They sell a lot more than just books and it seems to me that the trend toward shopping from home will continue to grow.

Looking at flights out of Nassau on Monday March 30th, the latests seems to be approx 3pm for Continental. Is there enough time after the Monday morning's session to get to airport to catch that flight out? Or is the plan to check out prior to going to the session and leaving for the airport right after?

I am prob going to put in for vacation days Fri 27th and Mon 30th, and fly in Friday afternoon. just wanted to see what others were doing.

Getting excited to learn and have fun at the same time.

I'm arriving Thu afternoon and departing Wed afternoon. That should be enough time for a nice mix of relaxing, exploring, and learning.

I just spoke at length with an investor relations representative from Geologix Exploration. Their situation is as follows. For the past couple of years they have been exploring the San Agustin property that belongs to Silver Standard. Three weeks ago Silver Standard came up with a price that Geologix would have to pay to get 100% rights to the property: $34 mil. The following exploration results were obtained by Geologix for San Agustin:
3 mil oz of gold at 0.5g per ton
85 mil oz of silver at 12g per ton
300 mil lb of lead at 0.7%
2 bil lb of zinc at 0.6%
Summing up the above resources, a $34 mil payment would equate to $4/oz gold equivalent. Recently, some properties have been purchased at $30-50/oz gold equivalent. What’s more, the above resources are near the surface and mining them would require a low-cost open pit operation. So this looks like a great deal for Geologix. Unfortunately, they have only $7 mil in the bank, the deadline for the payment is February 10, and no one offered them the extra money yet (in exchange for some share of profits from San Agustin). A few months ago they were offering a joint venture to major companies in exchange for a 20% interest in San Agustin. Now they are willing to give up a 50% interest, but there are still no definitive buyers (although a dozen of major companies are currently evaluating San Agustin and showed a lot of *preliminary* interest in it). So maybe we can all chip in and gather the required $34 mil, in exchange for some stake in San Agustin? :) Or maybe bid up their price by a factor of 10, so that they could do a decent equity financing? :) If this deal does not come through, then the “fair” share price of Geologix based on their cash in the bank would be $0.15, but the real price might undershoot it because many investors (who were in just because of the San Agustin property) will be selling their positions and walking away. So buying GIX.V now is like buying a month-long call option, which can either fall to near 0 or double/triple if the deal comes through. Any takers?

Looks like the up move in UCO is getting exhausted. Placing a sell stop limit order (stop $17.25, limit $17) for the 200 shares I purchased at $11.

Last month employment numbers were bad and market move up.
This Friday’s number may not be that bad because of Christmas and New Year holiday
And look like we may go near 10000 for S&P by Friday close. if that happens, SRS and SKF will be a good buy around 42 and 90.
Next week earning will kick in and may take market down with it. And this SRS and SKF may shine. This is my take for short term

So, it turns out that $USD's drawdown from 88.46 to 77.69, during mid-Nov to mid-Dec was, in fact, a classical entry point (the 2nd opportunity) for longs who wait for retreats to the 200-day MA, after breakouts. As traders, we can't deny the TA's. Most especially, for those of us who aren't US investors, this cannot be ignored. Spout all the theories of gloom and doom for US$ you like - the fact is, it's strong and trending and you might want to step back and think why that is so. Sure, it might collapse going forward from here, but that's merely speculation based on uncertain fundamental analysis - a trading philosophy that has burned us over and over this last while. And, just to add fuel to the fire, you might want to ask why it was that both Mexico's and Canada's currencies outperformed even the strong $USD today.

USD$:

EDC/EDZ TYH/TYP any opinion about these ETF thanks

David,
Excellent trade!
Stretching you reasoning further, why not take a posiion in airlines ?

UAUA or maybe AMR ? Thoughts ?

Looking at the meteoric rises in companies that are essentially bankrupt or have little to no prospects of making money like LVS, M, MGM, DRYS, ACAS, XTXI makes me even more sure of my short term bearishness. By short term I mean a matter of days. I think people need to come to their senses a little bit and realize how quickly things have risen and how much they have risen. Do you really want to chase companies that are up 70% to almost 200% like SLW? The argument is that they were crushed to lows that were unjustified. I'd argue that the market doesn't have things wrong. They were taken to lows because the economy is incredibly hampered. In my mind, the only sure thing is a company with lots of cash and no debt. The others I'm staying away from.

"David- fantastic trade..."

Thanks, 2nd_ave. Unfortunately, I was too scared to commit a lot of money to this trade, and so I purchased only 200 shares at that price... I am glad, though, that during the first "moonshot day" of UCO, when it jumped from $11 to $15 and then retreated to $13.80, I decided to buy 200 more shares at $13.80 instead of taking profits on the first bunch. This was probably the first time ever that I was scaling in on the way up. But then, this is the first time I am trading at the beginning of a long-term bull market (or at least at the end of a BIG bear market). On that day TBT took off too, so I figured that hot money is just starting to move from bonds into equities and there is much more upside to UCO.

Ross FYI AA is a brutally managed and high cost producer of alumina. Alcan was the crown jewel of aluminum production. It's management is a cathartic lot practising the worst kind of protectionism. AA cannot be taken out w/out the blessing of the State of Pennsylvania and it's board is full of thugs like former MER CEO Stan O'Neill and political hacks like former Mexican President Zedillo. Embrace the reduction in capacity AA needs to shed a few pounds of management waste.

Sandy, all equities are very much correlated now, so UCO will have a significant decline only if the whole market tanks, which will take UAUA down with it as well. So the best thing now is to take profits or to buy put options (I don't want to buy ultra-short ETFs, because if the market had a major short squeeze, I'll lose big time on those).

Noticed on another blog that this is likely to rally.

Volume today was very heavy. Depends on copper prices. If one argues that copper prices have bottomed out and the stock arket does not tank, there appears to be a good opportunity.

However 7 day RSI is very high about 84 %.Stochastic is in overbought territory.

Any one looking at this stock ?

I've been in GIX.V and now GIX.TO for a long time. Peter Grandich was hired as a publicist for this company. You would think he could help find people to arrange the financing. Geologix must have been pretty confident to exercise their option on the San Agustin property. I bet buyers are just waiting until the last minute when everyone has jumped ship to make a lowball offer. They've really set themselves up on this one. Why won't SSRI just go 50/50 with them? Incidently, if you look on Resourcestockguide.com, there are plenty of miners with $4/oz gold in situ value.

An interesting article from Mineweb on rareearths--production of these is being shut down due to economy and due to many of them being byproducts of base metals. Tantalum, for instance, is used to make tiny motors such as for disk drives. The leading producer in Australia, Talisan, has just shut down its operations. Can we live without tantalum?

http://tinyurl.com/98rbj6

Spot gold, which was up earlier this am has turned into the red and for the time taken silver along with it.