Cara's Commentary & Community Chat, Wednesday, Jun 24, 2009

Quick scan through Bloomberg and Yahoo doesn't reveal this information. I assume you're using a paid service like Vad and most pros for that matter?

ah found it. WSJ Europe. You just scan the headlines first thing in the morning?

So I'd wanna be fast getting back into the call leg of GLD this morning, on first sign of plunge efforts from NY.

Good morning.

Upgrades:

BDK - to Neutral @ Credit Suisse
DB - to Hold @ Citigroup

Downgrade:

BA - to Underperform @ Oppenheimer. Price Target Lowered from $42 to $40

RE:>Les, I thought you reside in Europe where I figured this was big news. Maybe it just came to me during the night as I struggled to get some sleep? :-)

You are right Bill, I am very US centric in my news coverage and neglect European financial news. Even the English newspapers I scan are not covering the ECB issue, they are very UK centric as well. Will have to broaden my daily scans.

With your sleeping habits Bill, you remind me of Margaret Thatcher, whose 16 hour work days are legendary. Is it an ability to go without sleep, an inner drive that pushes one beyond normal fatigue levels? Could make for interesting psychological study, although I'm sure the literature can be found somewhere for this phenomena.

BA -Price Target Lowered from $40 to $39 @ Credit Suisse. Neutral

...

Good morning!
Using Questrade in Canada, I don't see any of the premarket trading some are able to. Is there a site that I can go to? TIA

Bloomberg says this has spiked the futures and will lead to opening rally in equities.

U.S. Durable Goods Orders Unexpectedly Jumped in May

I feel like I'm getting tossed hither and yon with these volatile swings practically every day.

i can attest to the power of high dose Vitamin D (D3)to help not just the immune system but skin issues. about 5000-10,000 IU's per day, taken with meals helps dramatically boost the immune system, reduce heart disease inflammation and help skin from breaking out in all sorts of rashes/lesions etc.

ive actually had a few moles fall off after a regiment of Vitamin D and Alpha Lipoic Acid (serves to clean out your liver, the master organ)

good luck Bill, it will be fine.

J

Minor position. Easier to judge sentiment given a vantage point.

I like it 2nd...was waiting for you....started a hair earlier.

Old habits die hard....

Out @ $9.09 - Get in my belly!

Would that be an entire herd of rabbits?

I see it as Prairie Dogs - waiting and listening, being patient, sharing tips and then making the pounce at the right time.

Team Action works!

see pic

vb

Tuesday there was small change in the McClellan Oscillator which usually signals a large price move in the next day or two.I expect we'll see the move after the Fed announcement today.

Sold off my SLW

Opening position.

I see a lotta stuff that's just mid range. When compared to risk alternates like IEF, not much compelling reason to go long or short.

Capitulation trades on the other hand have been popping up.

JMO, do your own homework.

PS Volume is about half the daily average in the first 45 minutes.

RSI 7 day is below 10.

SVU is shaping up as a capitulation trade. RSI 7 day is 13.3. Max pain for July and August is 17. Might have to wait a day or two.

Don't fret for him too much Bev, he's got those lead tighty whities...

option futures more closely... Duke power is expanding solar use, along with others... spwr may not be in the hunt, but they are American based.. and, I, for one, cannot rationalize the value diff. between fslr and spwr... also like T. Rogers at cy semi... tough cookie, very smart....

you bet, they are waiting for the big prairie dog to give the signal!

Here is a picture of bill this morning in the cara commentary telling us the dollar is weakening

cp, did you check out the 2ndlife site?

vb

Weak dollar - good reason to pounce. Tried 2ndlife but my bandwidth is 0.000001bps here.... Maybe the stimulus porks this puppy's 'puter up to speed.

Go Doggies!

sold into the breakout...when you're trading this market, you're going up against the best. Now wondering about getting back in.

Kryptonite- Man that takes me back a long time. I remember spending entire days with Superman, and later, the Marvel series. And the Hardy Boys. When we moved to a new neighborhood in Pittsburgh and I started third grade mid-year, one kid introduced himself and showed me a brand new edition- I borrowed it and returned it the next day. We wre required to give oral book reports- for the two of us, the entire class would always chime in "..by Franklin W. Dixon."

firefly,

thanks for that info on sinopec and addax I have some funds parked in a merck currency fund and thought maybe it might be an option to transfer out of the currency basket into a growth position/ foreign equity. I feel safe with oil and energy long term and hold PBR and SU. It looks like China is moving into this area and I will def check it out, thanks.

vb

With the broad market up and silver up, ECU.TO seems to be forgotten. They are already producing gold and silver, and so they DO benefit directly from the rising price of gold and silver. In the past, such "forgotten" stocks almost always bounced strongly if the favorable conditions for the sector persisted. So I just bought another 2000 shares of ECU.TO, bringing my total position up to 3.7% of my portfolio.

Is anyone here following these? I have been looking at the price action in both for some time but only have a small position in bac. I read that a well respected analyst (from JPM?)gave bac a price of $32.00 but haven't read the report--am hunting for it now. Byddf is a Chinese battery maker which Buffett owns something like 16% of; tried to buy more but the owner wouldn't let him. Both these are longer-term plays (if they are a play at all) but was wondering if others here are intrigued?
s

retirement......

Glad you have access to quality health care. Wish more of the world's people did. Best wishes whatever the outcome. ~OG

How are you holding up with your SLW? Were you able to add any shares in yesterday's sell off to bring down your cost basis?

Senior Citizens Administer A Beat Down On Their Financial Advisor
Posted by Greg Michaels, Jun 24, 2009, 10:05am

A group of German senior citizens recently decided to forgo the legal process and deal with their investment losses the old fashioned way- vigilante justice. The silver haired bunch jumped their financial advisor as he was entering the door to his house, bound him with masking tape, thew him into the back of an Audi, drove him to one of the couples' vacation homes and had their way with him in the cellar for four days. It took 40 members of the German counter-terrorism unit to get the active seniors to free their prisoner.

I take it that the IMF gold sales have everyone just scratching their heads a bit and wondering what the banking cartels are going to add to the wrinkles in the gold saga.

It need not be that complicated. A 400 metric tonne allocation of gold into the commercial banking sector could conceivably generate a trillion dollars of liquidity. Given that gold leases and the derivatives associated with bullion lease rates can be used to expand liquidity then I presume that this is the intention. Further, the assets a bullion swap would create allow for purchases of treasuries.

A binge of leasing gold could potentially liquify markets, but you would need people willing to trade those derivatives amongst themselves. These people are the most familiar with the sleight of hand that occurs in the banking sector, as it all happens off balance sheet, they are the only ones to know. At the height of the rebound in markets, the timing would suggest that we are at the top of the market right now.

But given the lack of interest in accepting any downside risk running into the hundred of billions, its very likely there will be only once source of these leases and one buyer. The Fed. Then the Fed may turn around and purchase the necessary treasuries in order to keep things humming. Small wonder then, that the Fed will require legislative powers over and above any rational legal framework.

So gold leases, which have been in a coma lately are theoretically about to experience a drop in price, requiring higher interest rates. So that is one to watch for.

Notwithstanding, the previous six years of market binging on derivatives has seen an expansion on an order of magnitude of 1000 to over a quadrillion dollars of notional value. To re-liquify the markets we are seeing the attempt in its very infancy of yet another expansion of the derivatives trade, which would presumably require another order of magnitude into the quintillion of notion value, should it succeed.

thanks dr. cosa, I have heard that as well. In fact, there is a doctor in our area who preaches Vitamin D.

His name is

J. Joseph Prendergast, M.D.
http://www.endocrinemetabolic.com/about/jjp.html

I've seen him work wonders for people. Anyone in the bay area should book mark the link.

ps I think your advice on Gold is very Good. You have saved me alot of money when I was thinking of adding.

vb

amendmant to their constitution....to Balance the buget.. beginning in 2016, making it illegal for the federal government to run a deficit of more than 0.35% of GDP...and, starting in 2020 it will bar Germany's state governments from running any deficits at all....

Good call on LECO, good company for infra. Stoch turning up MACD looking to cross and RSI in the cellar! But, as I was looking at my infra watchlist I see I missed a pop on RBA. Was expecting more down. Should have known as soon as Bill mentioned ppt there was smoke in the air.
Good luck today Bill. You are on our prayer list
Illini, thanks for pointing out the Cara Community Map. Now I want to know who is the guy from Lake in the Hills-my old neck of the woods (sorta). And I want to know who is out on San Juan Island, near Lime kiln Lighthouse, my new neck of the woods(also sorta). Full disclosure; not a stalker just curious
peace from North Puget Sound

"...and, starting in 2020 it will bar Germany's state governments from running any deficits at all...."

Not a hard sell in a country that still remembers the hyperinflation of the Weimar Republic that ended up putting a house painter turned dictator in control. Hopefully, the United States will not have to learn this lesson.

I admire the man. My father had a saying, "There is two ways to make money. You make more or spend less". Warren Buffett is great at both.
But, if I could afford to bid for lunch with anyone, I would have to choose Bill Cara. Not only would I learn more, I think the meal, drink and conversation would be much more stimulating.

http://www.realitytrader.com/blog/

here's Vad's article Salty.

There was an interesting article posted at 1:35 AM today on MarketWatch.com summarizing a newsletter from Harry Schultz ( whom I know nothing about ) regarding a potential bank holiday and our foreign missions being required to hold one years worth of local currencies.

Anyone heard this?

Is Schultz for real?

Dan

thanks Les. Appreciate the link. Now I can validate what I did wrong! :/
s

hmmm, after today's difficulty in buying back into the call leg of the GLD straddle being played I was hesitant to sell the call again when it reached 10% today. I fear now that I might have been played. Was waiting to see if the FOMC meeting lit a rocket under gold's butt...

It amazes me that anyone would consider that as "good".

Last year, same month (6 months into the recession), was $215 billion, and this year its $169 billion.

I consider that pretty abysmal, especially since the big reason it was as high as it was is a result of aircraft orders being up 68% from the prior month, since given the financial state of the airlines, I think it unreasonable to expect long term high order input for airplanes.

Honestly, I think all the economic figures should be given as comparison month to month, year on year, and rolling 12 month vs prior rolling 12 month to give a reasonable perspective rather that be used as a means to lie about the economy. But providing honest numbers doesn't appear to be one of the goals.

my point, exactly ! (good info...)

if only..!

dr,cosa - Agreed, putting aside all the cheap party noisemakers, booze, and pinata's, I hear one voice of reason and that voice has demonstrated uncanny aptitude.

cheapy - You make a good case, I suppose we'll discover how the market feels about it.

Here's a thought I'd like to offer up: Last week's dollar strength may have been bolstered by foreign entities in preparation for this week's Treasury auctions? My concept involves foreign Gutenberg devices running full bore, enough to keep the US gov. adequately funded with enough left over to do some global bargain hunting?

Mokat,

Sorry, I dont understand the first 2 paras very well. Are you saying its another melt down event like Lehman collapse that will trigger a bank holiday, cross border financial transfer etc etc? Or is this another scheme Timmy is cooking up. With the time frame and all quoted, it looks like rolling out TARP plan or something. Just trying to understand what you meant.

upper pivot for Yamana is 8.70

Bernanke pulls a Tony Soprano on BAC upper management.

Interventionist swine sell PM futures using your tax money.

Just another day in paradise:)

yes, was thinking that this is not the sort of interventionism required to hold market together. What game was played here?

HB&B didn't like what the Fed had to say? Sending a message?

One of the better articles that explains why gold seems to fall in the West despite rising support...

What is reported in the mainstream financial headlines is often contradicted by the details behind the headlines.

For instance, there is no sensible reason why anyone would want to lease precious metals at a negative rate. That is, in addition to the risk of not getting back any metal at all, the lessor gets back less metal than they originally loaned out!

Yet, the one-month lease rates for gold and silver have been negative since June 2. I find it hard to believe that a profit-seeking owner of gold or silver would enter into a contract that guarantees a loss. After all, the owner would simply stay even if he did not lease the metal at all.

The only sensible explanation for such an action is that there is something else going on behind the scenes to compensate the gold and silver lessors for their losses at dumping physical metals on the market at a negative rate of return.

As I have explained in past columns, the U.S. government has a lot to gain from suppressing the prices of gold and silver - such as propping up the value of the U.S. dollar - and appears to have long subsidized the dumping of physical precious metals on the market.

So, right now physical gold and silver is being dumped on the market unrelated to supply or demand factors. It seems obvious to me that the only reason for the temporary bump in supply (leases have to be eventually paid back) is to suppress precious metals prices.

While gold and silver prices have declined from two weeks ago, they are still up significantly from the beginning of the year. The reasons for the recent lower prices seem to come more from artificial manipulations rather than free market trading activity. As such, I consider it more of a sign that we are getting ever closer to the day when precious metals prices will rise by leaps and bounds. The more people know about the real news stories, and not just the headlines, the sooner that gold and silver price suppression schemes will completely fail.

http://tinyurl.com/ls98dn

"HB&B didn't like what the Fed had to say?"

HB&B makes the rules, the FED executes accordingly.

Now I definitely know I was played. note to self. take the cash when possible. buy back in at higher price if justified.

edit: As the Schultz link says, take profits constantly! Gotta knuckle that one into my head.

SP500 - Well well well! Here we have it folks! The averages have crossed forming the well awaited golden cross. The 50 day crossing the 200 day average which signals a long term buy and hold trade. The golden cross trade is about 85% accurate.

http://3.bp.blogspot.com/_E9lrIW1Qxn4/SkI8xPameGI/...

I don't mean to betray my patrician roots, but the idea of taxing us speculators as though our hard-won profits were earned income is madness.

One cannot compare what we do, and how hard it is and it's uncertain nature, to schlubbing into work every morning for that nice, fat, safe, risk-free paycheck. The speculator should face NO TAX WHATSOEVER on short term capital gains, and long term ones should be taxed at a modest 5 percent. I.R.S. should be turned into an animal rescue operation.

We speculators are obviously the only ones in society who add any value to anything anyway.....

We create nothing...WE OWN.

(have a martini skippy!)

got rejected at 50dma, likely to fill the gap from May. Discl: hv some puts

Holding UNG.

My take is we move much higher.

Just made a snap trade: bought SRS 22 July calls for 1.40 and flipped them within two minutes for 1.55. How do folks play these? I don't typically have guts to hold them for long....

Does under 36 look better? If I had not read Vad's article on averaging down I would have said yes. Now?..hmmm. will wait for further instructions

slw - sold lot I bought yesterday for a small profit. Still holding core amount.

bac - cp - you do know that all the golden boys are at either gs or the Treasury don't you? ;)
s

Bev - yes I do have more than one. One I use to establish longer-term positions; another for trading around that. I also have both cdn and us accounts fwiw.

Forget earlier thanks to Vad for writing that article. While I like to think I was in camp 2, I knew I overplayed my hand as I was nervous with the total amount I was holding. Even now I think the lt picture is very good but I needed some portfolio balancing. Also Vad, my apologies for mis-spelling your name earlier in the day.
s

Can you transfer 50% of your total holdings of a certain stock into another account? If so, I take it the initial shares that you bought would be transferred, while leaving the more recent purchases in the original account.

allengg

How about Scottrade?

photogray - My interest increases as the price gets lower, I have yet to read Vad's prose but from what I gather a successful trader scales in using some rendition of this concept. This morning's Multnoma rabbit-start keeps my novice attention, still evaluating... Puppies didn't run, a last minute support retest to shake off a few fleas?

Of course I'm kidding dude. Oh didn't I tell you? I cured cancer in my bathroom sink! I can't even cure MILDEW.

Yes, you can transfer a portion of your holdings but you must keep a personal record of the cost base of these transferred shares. The new account may record them on your screen with a cost base derived from the share price the day of the transfer-in as they would not necessarily know the orignal purchase price, commission paid etc that determined the true adjusted cost base ( ACB) of these shares when acquired. For tax reporting purposes, the FIFO ( First In- First Out ) rule applies so the oldest shares are the first out when selling & determining gain or loss. Presumably, when transferring shares but not selling, the oldest shares are the ones included in the transfer and you need to know what their ACB is for the future when selling.

Don't spit into the wind and don't tug on Superman's cape (Or Grym's beard for that matter! ;))! Treating mildew with more mildew doesn't work, I've tried it.

Here's what I found, makes sense:

"Vinegar eats grout, so don't use it on tile with grout. I've done that and I've had grout fall out in chunks. I even used a more dilute solution, and you could see that the grout was becoming worn away and it got more porous (which makes it easier for muck to get into).

If it's within the grout, baking soda and some tea tree oil should do the trick or you can use a spray bottle and mix some hot water with some oxygen bleach (which isn't bleach, it's sodium percarbonate and sodium carbonate, which make a reaction to form hydrogen - which blasts the stains away) and that gets my grout really shiny and white. It doesn't do much for the sealer line on the bottom of the tile - I pretty much stilll have to use Tilex for that sealant. The rest of my tub and grout is spanking clean with the OxiClean I use."

Tilex works great......When I'm out of it, splashing bleach around does nicely. And I hear it treats eczema as well:)

Vad where's the wrap-up?...I need to go braise some rabbit:)

edit @ 5:48 Ahh there it is...Long MGM huh? You fox!

That was no-brainer, AFAIAC.... open break with 10 cents stop? Any day

2nd
8300 Dow, 900 S&P and 1800 on NASDAQ (closed to this number). How all three mkts can close on perfect round numbers?
I think this thing has legs through the end of the quarter. RIMM/AAPL/GOOG/BIDU all are at very interesting level. A break downward may be an interesting indicator for market direction
Today Brought –OXBSD at 8.60 and sold it too early at 9.60.it been like this lately. Either I sold too early or if I hold them longer I lose

Vinod- I've had the same experience lately- sell when you have minor profits, or risk a loss. It's the character of the market right now.

Will close out the morning session up 1.65%.

What happened to the World Bank forecast? Is it not all about sentiment and crowd psychology the past two days?

http://www.cnbc.com/id/15840232?play=1&video=1163148297&__source=yahoo|headline|quote|video|&par=yahoo

Will he give testimony under oath? Does his statement contradict Paulson's and Lewis'? The statements are contradictory. Duty or perjury?

On2 is about to make a very large move......

So I know a little something about their space. I was in streaming media at AOL a few years back and they were one of our encoding vendors. Why do you think ON2 is now ready to break into the big time? VP8 will be in every mobile device, and everyone will want to buy an encoder plugin from them?

I still have some connections in the field, I could find out some actual technical details if you give me something to go on.

Hey Dave- Stood at the plate today and watched 2 fat strikes cross the plate on TBT and didn't swing. I'm hoping for another fatty to take a cut at.

Looking for a entry in UNG tomorrow after another inventory build. Maybe 13.65.

whats with BBBY results? Didnt they beat last time as well - so this is where we are seeing green shoots :)

B22- You must use SMA, no?

Shiva- Balanced against NKE which has 40% share of the sneaker business, I'm not so sure. Dreaming of NG....

38 or 35, wait for it to consolidate. Should be a good buy. Interesting to see how they pumped it & dumped it.

good short.

if the market pumps into early july, put the crosshairs on bbby if gets to $33ish.

all my data point to a consumer that is going to get crushed...
- credit lines are still being reduced
- banks are lifting interest on credit cards before Obamas changes (eg JPM raised balance transfer fee to 5%)
- unemployment

any other fav consumer discretionary short plays? COH? SHLD is good but too much short interest. looking at insider trading across the board on cons discretionary stocks, im still surprised they hasnt been MORE

and jobless claims. I've heard talking heads suggest that we're already out of a technical recession with GDP no longer plummeting and if jobless claims come in less than what we're used to (perhaps with more hours of those who've kept their jobs being cut to compensate) than this'll provide feel good factors. Both released pre-market.

but has kept quiet about it.

"The European Central Bank prints money too, but it also distributes it to banks through underground tunnels. It pumped them a tidy €442bn (£376bn) on Wednesday, an unprecedented one-year deal at a record low interest rate of 1pc.

The US and Europe are fighting the forces of recession, deflation and even depression. The world's attention has focused on Fed money-printing. The Fed's balance sheet has risen rapidly to $2 trillion. But the ECB's balance sheet has also expanded - to an even bigger €1.7 trillion in the past two years. Wednesday's lending will swell it further."

The seeds of inflation have been sown in Europe as well. Strange to hear Merkel bashing the Fed when the ECB is apparently demonstrating loose monetary policy as well.

"I expect continued consolidation primary between the 895-910 area on the SPX. I am short 10 names with 5% allocated per position for a total of 50%. The names are as follows: PCU, TTI, WTI, HLX, TC, JRCC, HOC, TSO, SD, CRZO. I see that futures are up +1%. I made a good +1.73% yesterday, so I am willing to sacrifice all of those gains if the market breaks out of the range today."

http://weeklyta.blogspot.com/

"Unless lawmakers act quickly to solve the state’s budget and cash crises, California is eight days away from issuing IOUs to many of its creditors, state Controller John Chiang announced this morning.

Without such action, Chiang said his office will begin issuing registered warrants on July 2 to private businesses, local governments, and owners of unclaimed property owed money by the state government, as well as taxpayers due income tax refunds."

...

* Chargeoff rate rises over 10 percent for the first time

* Moody's sees chargeoffs peaking at around 12 percent

* Moody's says bad loans will peak in Q2 2010

NEW YORK, June 24 (Reuters) - The U.S. monthly credit card chargeoff rate surpassed 10 percent and hit a sixth straight record high in May, Moody's Investors Services said on Wednesday, as unemployment grew to a 26-year high.

The chargeoff rate index -- which measures credit card loans the banks do not expect to be repaid -- rose to 10.62 percent in May from 9.97 percent in April.

"We expect the chargeoff rate index to continue to rise...

http://www.reuters.com/article/rbssFinancialServic...