[7:25am ET] The AP newswire headline reads, “World stocks up amid faith in recovery”, but are they really or is this mostly a simple two-day $USD-Precious Metals trade?
http://finance.yahoo.com/news/World-stocks-up-amid-faith-in-apf-86354435...
Over the past three trading sessions, the equity indexes have hardly moved and some have even fallen, but the casual observer would think from the headlines that a so-called economic recovery has pumped stock prices much higher.
Take for instance the index of the world’s second biggest equity market, the Nikkei 225 closed last Thursday at 9978.6 and today was 9799.6. Australia, for all the talk of booming economy and higher interest rate closed last Thursday at 4702.0 for the All-Ordinaries index and this morning was 4695.8. So why are the headlines so loudly proclaiming the opposite?
The French CAC, German DAX and UK FTSE closed last Wednesday at 3795.4, 5675.2, and 5133.9 respectively and yesterday at 3770.2, 5657.8 and 5138.0.
So, frankly, I don’t see what all the screaming of joy is about other than more hype. On the weekend I opined that there was a temporary over-sold equity condition that might lead to gains of +2% to +4%, and in some markets that happened. I gave a list of stocks, mostly in the Energy and Basic Materials sectors and in most of those cases, those share prices happened to pull the indexes higher.
But where I have been wrong or at the very least confounded is the moon-shot in the precious metals this week. Silver for example closed Friday at 16.12 and at 6:28am ET today was trading at 17.46. That’s a gain of +8.4%. Gold, which in percentage terms usually moves very little, closed Friday at 1002.10 (spot) and this morning was up +4.5% to 1047.21. Palladium was up +6.1% from 293 to 311 and platinum +4.3% from 1277 to 1332.
These are massive two day moves and, because of the plunge in the $USD, well ahead of what I thought likely. But are they sustainable? Is the rest of the world prepared to stand by as speculators drive the US Dollar into the sixty cent level, causing their own export manufacturing industries to close more plants and lay off more workers? If so, those governments will soon have anarchy in their streets.
Some of the Fed governors are beginning to speak up. That is the voice of reason. On the other hand, there are Gold Bulls acting like this is Carnival, the street party never to end.
Well, I’ve been there; it always ends.
Something else to think about while you watch precious metals prices get pumped higher this morning. I have a hunch that party noise will come to an end today.
Comments
gold here....
an ominous ending to todays insightful commentary Bill.
yes we have seen this many many times before and it usually goes like this:
1. run up in the futures markets in the early morning session
2. quick rise followed by a sudden spike back down towards the prior day's consolidation point.
3. a market rally running on fumes, gaps appearing all over a host of equity charts
4. gold shares timidly getting dragged along for the ride as opposed to leading the charge.
5. should gold miners gap higher today at the open i would not be surprised to see them quickly fade back down for the remainder of the session before closing lower, further deepening the disconnect b/w the metal and the miners.
6. more USD collapse and China/Iran oil trading nonsense is like oxygen for this rally, once that drafty window is shut.... look out.
7. ive never seen so much enthusiam by a people in the demise of their own currency simply because it will benefit their investments in precious metals.
action plan: sell portion of total gold position on any jump higher this morning and the DJ spin....
good luck,
What is the essence of what you are saying here Bill?
If you happen to get a few minutes some time over the next day or two, would you be able to elaborate slightly on what you are getting at here?
'Do investors remember it was the flip comments of Treasury Secretary James Baker about the greenback and Deutsche Mark that precipitated the 1987 crash?'
Just trying to understand
All the best
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Cara 100 Ratings Changes
Good morning.
Upgrades:
CSCO - to Outperform @ William Blair
DIS - to Neutral @ BOA/Merrill Lynch. PT Raised from $22 to $30
GGB - to Buy @ Deutsche Securities. PT = $20
KO - to Buy @ Deutsche Securities. PT Raised from $52 to $62
New:
BBBY - Wells Fargo Initiates with a Market Perform
RIMM - MKM Partners Initiates with a Buy. PT = $87
RIMM - Jesup & Lamont Initiates with a Buy. PT = $80
PT Raised:
GOOG - from $490 to $565 @ Oppenheimer. Outperform
Re: Cara 100 Ratings Changes
Thx
Hmmm. Not 1 downgrade huh? I've been taught to sell risk :)
Re: Cara 100 Ratings Changes
Yes I also get nervous when everything is upgrades, HB&B is trying to sell their risk and needs to create a market of buyers for it. Later they will downgrade everything when they want to buy and need to free up some sellers.
Reckless driving>> FXP/QID in the trunk pre-market
Lately, it's all reckless driving, or staying off the streets.
CS comments on Oil & Gas Equipment & Services OVERWEIGHT
Let's not be normal anymore; Introducing 2011 Estimates, Revising Estimates and Raising Price Targets (PT)
• Focusing on the recovery; raising PTs for diversified service companies. We shift our valuation basis to 2011, and away from Normalized, in order to focus on the recovery from the 2009-2010 trough. We sense that 2011 is likely the beginning of an extended upcycle, which does create a valuation case for more upside for the segment, even if upside surprise potential is more muted than in past cycles. We raise our PTs an average of 15%.
• An offshore and international land-led recovery. Despite an expected steady rise in service intensity in U.S. land, Credit Suisse Energy's more conservative U.S. gas view points to a lackluster recovery in North America. Offshore becomes that much more significant (finally!) - we estimate offshore comprises 35% of revenues and 42% of segment EBIT in 2011 versus 32%/~29% in 2008.
• Preferences remain HAL and WFT. Although this segment is overhung by high relative multiples on what appears to be a sluggish 2010, we expect stock picking before year-end 2009 to refocus on medium term growth and to benefit the fastest earnings growers in this segment. We believe that top pick HAL and also WFT have positioned themselves to grow faster than "trend" (equivalent to gaining market share).
--- B. Handler
Wall Street's near-death experience
Last night I posted a most interesting text from Andrew Ross Sorkin's new book. You all must read this.
http://www.vanityfair.com/business/features/2009/1...
let's see how BSBR ipo does
Banco Santander Brasil (bank). Hasn't opened yet.
Another ipo VRSK over on the nasdaq.
Re: gold here....
It is possible for gold to move down today, especially in the suppressive NY market. However, gold has been basing for several months and it is unlikely that its recent sharp break-out will last only a few hours. Considering the worsening and sorry state of the world economy, especially in the U.S., gold should have sufficient fuel for a massive rally. Furthermore, rumours are surfacing of major physical gold and silver shortages. A perfect example of this is the recent discontinuation, again I might add, of gold and silver coins from the U.S. Mint. Their previous excuse of running out of blanks is running a little thin by now! The big test for gold will be when this false equity rally finally fizzles out. Like last year, gold may be taken to the woodshed again but if it isn't, expect an unprecedented rally in gold and silver. Lighten up now and you just might miss the rally of a generation. Is it worth it?
Cheers
e-readers in the news today
According to AP, with today's $40 price reduction, the Amazon.com Inc. Kindle electronic-book reader device now costs $259. It debuted in 2007 at $399 and started this year at $359, before another price cut in July. The current Kindle can wirelessly download content in the U.S. over the Sprint Nextel network, but outside the country you must connect it to a computer with a USB cable to add content. The international version will be able to wirelessly download content over AT&T's network around the world. CEO Jeff Bezos called it Amazon's best-selling product, but Amazon has not disclosed sales figures for the Kindle, which has a 6-inch (15-centimeter) screen that displays shades of gray, room to store 1,500 books and the ability to download books wirelessly. According to a report being released today by Forrester Research, e-reader sales will total an estimated 3 million this year, with Amazon selling 60 percent of them and Sony Corp. 35 percent. Sony offers a $199 "Pocket Edition" e-reader and larger $299 touch-screen model, and in December it will offer a $399 model that can wirelessly download books rather than needing a connection to a computer.
Re: What is the essence of what you are saying here Bill?
delete
On-Line Transaction Processing (OLTP)
Even before global regulators have approved the Sun-Oracle merger, the companies have introduced a new product that is likely to make solid sales. It is after all a database driven world.
http://www.oracle.com/database/database-machine.html
Re: gold here....
There are two types of gold to me: the shiny metal in your safe deposit box, and gold promises. A gold promise is just a trading vehicle - a price to be traded like everything else. So when the promise is high and hyped, I sell, and when the promise is low, I buy. Or at least I try to. And if there's a breakout, and the momentum seems there, I buy the breakout. And if the promise seems to be trading inversely based on dollar movements, and the dollar happens to be at a very low point, I think buying (or holding) the promises is quite risky for too long.
Physical gold itself is quite another matter. I try not to confuse the two any longer.
Re: What is the essence of what you are saying here Bill?
Obviously, if Bill has time, he'll speak for himself, but I'll put out my interpretation:
I think Bill is cautioning those who are getting a little too excited about the market and PM gains to take off the rose-tinted glasses and set aside the koolaid. These are some questions to challenge one to consider fundamentals, including whether current prices are justified, and have the fatal flaws in the system been fixed or band-aided.
The rebound since March has me plenty nervous. I would have preferred more pause for breath at least, and allow some fundamentals to fill in. But for the time being, I'll just bump-up both my mental and hard stops for the portion of my account that I was willing to put into this market earlier.
T. Boone Pickens going bullish on oil...
That's my signal to short the oilers today...Like geese in autumn TBP appears magically shortly before oilers turn south. And they're struggling this morning.
Re: let's see how BSBR ipo does
BSBR is already trading, $13.19 now, vol 59M. (Average vol, zero :-))
Biggest IPO of the year, 2nd largest bank in Brazil.
Re: gold here....
Gold closed on 14 MAR 08 at 1033.50 yesterday it closed at 1039.70, finally the breakout we have all been waiting for. Sell here? Maybe. Has it spiked short term? Yes, definitely. Since Thursday’s low of 990 it has moved 51 points. How many of those points did you catch?
Generally, I agree with selling the spikes and trying to buy the lows, but not here. The breakout is an all clear sign here for the bulls. When gold moves it moves so fast you’ll be left behind. Were you since Thursday?
This is not to say we should not expect some pullback here, I do into mid to late Oct in which case I will add. The seasonals are very strong here for gold and along with the breakout should be given the benefit of the doubt.
As to trading gold right here I’m reminded of what Clint Eastwood might say, well do you feel lucky punk? (or something like that).
2 nd/ .... Goodmorning
Thanks for ' chaos ' comments ( I was up late reading Bill's ' Vanity Fair ' inclusion.... fantastic article )... I was thinking more like the years 2000 and 2001 that Goldman might adopt some form of Dr. Tan's system, which was published in 1999 .... Who knows, but I guess money can buy just about anything... good trading, Baz...** I am taking a speculative position in MTXX, as non-nasal products are selling at this time of the year..
Re: What is the essence of what you are saying here Bill?
manx928 - thanks, I do understand that bit. I was refering more to how the comments by James Baker that started the fall in '87 are relevant to the current situation. I assume it has something to do with the state of the dollar, I just don't understand the link. But I want to :)
Cheers
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Re: Reckless driving>> FXP/QID in the trunk pre-market/ OFF
Pulling over for breakfast.
Study on inside benefits of analysis
http://www.zerohedge.com/sites/default/files/getti...
Re: 2nd/ .... Goodmorning
baz- Here's what I think. There's chaos theory, and there's KISS. Put both guys at a trading desk. Within 30 days, the person they both report to will be doing evaluations, and he/she will be saying to the guy who's trading with the chaos box, "Keep It Simple, Stupid!"
Re: What is the essence of what you are saying here Bill?
Here's one article that references James Baker's comments in 1987:
"The tensions on trade came to a boil in October 1987 when the markets were already nervous about the economy, inflation, higher interest rates, an inexperienced and initially clumsy Fed Chairman and a soaring trade deficit. The announcement of a large U.S. trade deficit on October 14 was the tipping point. Following this news, Treasury Secretary James Baker strongly suggested the need for a fall in the dollar and made implicit threat that the reluctance of Germany and Japan to let the mark and yen to appreciate could be met with retaliatory trade actions. The following day – the infamous Black Monday of October 19th 1987, the stock market crashed: the Dow Jones Industrial Average went into a free fall, down 508 points, losing 22.6% of its total value."
http://www.rgemonitor.com/blog/roubini/140982
GOLD CURRENCY
ALOHA!!
Whether you are trading GLD(prices) or holding the real deal the contrarian play is that "gold is money". In other words so many people globally are so disconnected from what "real money" is they perceive gold is the same as GLD and vice versa. Many believe all gold's function is based on is strictly paper gold futures and derivatives trades. No doubt the average trader you meet here on the blog is not tied to gold through derivatives, but there are some who trade gold futures either on the COMEX, TOCOM or LME. There are some who trade GLD prices.
The other contrarian play in motion is that "Empire is forever" ... That needs no further explanation as so it is far off base and kooky, that it needs to be filed under the category "house prices go up forever"! Really no prices go up, just the purchasing power of your money goes down.
The "free floating" socio-monetary experiment begun by Nixon and urged on with typical Empire arrogance by then US Tres Sec. John Connally made the US Dollar the "WORLD'S PROBLEM" by his own comments back then. And so it has been for some 40 years now ... The US Dollar has been a "problem", but even Nixon alluded to the real issue by saying "We are all Keynesians now!", shortly thereafter. Being Keynesian mainly benefits those who are tied to ever expanding government and its intervention into every facet of our daily lives. Being Keynesian benefits none of us who have no banking connections or know nobody on Capital Hill except being a member of the exclusive, ever expanding government worker union or the expansive US Military and the other new service branch devised hastily during the Iraq War ... BlackWater. But none of those "common-man affiliations" makes you rich it just means you have a job longer than most.
The pure monetarists hold gold not to take joy in seeing the fiat system's demise but only for the reasons you would put stops in on a trade or hedge with options ... ITS PRUDENT! Many of us have worked for some 40 or 50 years and those of us who have seen America in a state of chaos with street rioting and tear gas and rubber bullets know how much things can change suddenly.
From my weekly US TRES REPORT ...
"Anti-war protests? The most effective anti-war protests were by the US troops who "fragged" (threw fragmentation grenades at) 788 officers. Eighty six officers were killed by their own troops and 714 wounded. This had more impact than the kids with placards. You can't fight a war that the troops are sick of after ten years without progress."
The illusion is in the money. It has nothing to do with commodity supply and demand or derivatives or charts or political entitlements or what Warren Buffet does or whether GLD has gold bars or not. The MONEY MONOPOLY understands that and their only motives today are purely 100% self preservation. If the global community ever figured out there is a better more fair monetary system out there then the MONEY MONOPOLY would be over tomorrow. Since I do not have high hopes for the average American to figure that out(based on their voting record)then the system can only CHANGE through collapse from foreign emanations. All monetary misfortunes are magnified much more in the country where the "Reserve Currency" resides, where Empire is. America is Empire mainly due to our reserve currency status.
No not much has changed in terms of human history and its association with fraudulent monetary systems. Those who understood the fraud simply moved to protect their own wealth and nothing more ... No joy ... just prudence.
Non-confirmed $ 4 B.
investment in Ghana, by xom....
Re: gold here....
Telestar, not sure if you were talking to me with your comment about being "left behind", but since you might be, I'll tell you.
My trading account was "left behind" for the move from 990 to 1018. I caught the move from 1018 to 1040 - the day of the gold breakout above its old high, which I bought. I'm out at the moment. As Warren Buffet said, there's no "called strike" in trading, so being "left behind" is more about a risk/reward calculation than anything else. Paper gold has done well for me. Right now I'm flat, since I'm treating paper gold like any other paper product, attempting to buy low, sell high, and only take prudent risks. With the dollar possibly bottoming, and with gold at an all-time high, I'm being very selective with my paper gold holdings.
Honestly if the market takes a drop, I believe folks will still come home to Mama Dollar, which will in all likelihood trounce paper gold pretty soundly. There will be a point in the future where that will not happen, but I do not think this is that point.
The physical gold in my safe deposit box, though, was not left behind. In fact, it has ignored pretty much all of the moves both up and down for quite some time now.
Re: What is the essence of what you are saying here Bill?
Ok, I think I've got it
Link: http://books.google.com.au/books?id=KJs1WDN54wEC&pg=RA1-PA187&lpg=RA1-PA187&dq=James+Baker's+comments+us+dollar+Deutsche+Mark+1987+crash&source=bl&ots=o7l3WzlSEa&sig=jjnWrB7C2vg_JtCnU1uGPe4KwMI&hl=en&ei=FavMSs-OA8eAkQWP6N3iBA&sa=X&oi=book_result&ct=result&resnum=2#v=onepage&q=James%20Baker's%20comments%20us%20dollar%20Deutsche%20Mark%201987%20crash&f=false
(sorry dont know how to tinyurl)
'The precipitating factor in the 1987 stock market crash, was the notion that the administration would accept a depreciating currency.' Angell (New York Times, August 24, 1997) also said, 'I think there was a question about the Federal Reserves credibility.'
Now that makes a hell of a lot of sense. Connection made loud and clear. Thanks for noting things like this Bill, it enhances my understanding of events that I was not in the markets to witness. All of a sudden I understand why you have made so many references to 87 over the last month or two.
Cheers
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Re: gold here....
Hi Dr. Cosa - Always enjoy your clarity / thanks for the input, but I continue to dabble with the juniors on the moon shot of a real "company building" deposit. Most of them are flat this morning, but Banro (BAA) just keeps chugging along. Not really too in touch with the technicals other than lots of ounces, has funds to develop and is acquiring plants to move into production shortly + lots of favorable terrain under liscense. Of course some country risk (Congo), but they recently finalized "Mining Convention" detailing agreement terms with the ministry - probably better title security than in the U.S. under the current regime truth be told. Happy Trading
Re: What is the essence of what you are saying here Bill?
Thanks F57
Re: 2nd/ .... Goodmorning
Like a dog chasing its tail !
Re: What is the essence of what you are saying here Bill?
Ad, re Tiny URL, here's your link made tiny.
http://tinyurl.com/y9aeylo
Now for instructions on how to do it yourself, just go to the menu at the top of this page, "Site Index" > "Website Help" then > "Chart and Link Posting 101". There is a section on using Tiny URL along with a very good video link explaining the operation.
hope this helps, Quasi
Re: GOLD CURRENCY
kaimu. and you said it so much better than me. graphs are important but with fake money supporting it, something has to break
The illusion is in the money. It has nothing to do with commodity supply and demand or derivatives or charts or political entitlements or what Warren Buffet does or whether GLD has gold bars or not. The MONEY MONOPOLY understands that and their only motives today are purely 100% self preservation. If the global community ever figured out there is a better more fair monetary system out there then the MONEY MONOPOLY would be over tomorrow. Since I do not have high hopes for the average American to figure that out(based on their voting record)then the system can only CHANGE through collapse from foreign emanations. All monetary misfortunes are magnified much more in the country where the "Reserve Currency" resides, where Empire is. America is Empire mainly due to our reserve currency status.
Re: gold here....
DaveF, no my thoughts were not direct at you specifically, but to all generally. We all have to trade it the way we see it or want to see it, that's what makes markets.
Kaimu, your last post is extremely well stated. There is no joy in gold breaking to new highs as it is a bad omen.
Indexes feel like they're sputtering...booster rockets on deck?
Not saying they're able to do it, but I think 10000 is on the 'agenda.'
Re: What is the essence of what you are saying here Bill?
Ad,
I found this comment re: Baker and 1987.
"Another important trigger in the market crash was the announcement of a large U.S. trade deficit on October 14, which led Treasury Secretary James Baker to suggest the need for a fall in the dollar on foreign exchange markets. Fears of a lower dollar led foreigners to pull out of dollar-denominated assets, causing a sharp rise in interest rates."
Board changes
at GRO, in last few weeks......
The Silent Majority
Not too long ago there was a silent majority that did not like the direction of the blog. Since that time however the quality of discourse does seem more focused, but where is this so-called silent majority?
It was stated that there were at least 10,000 of you voicing displeasure, is there a reason why you are not contributing here with your views?
So, here is a challenge to the "Silent Majority" say/post something. Starting on Monday or today pick a Cara 100 stock and comment. Maybe post a relevant article. We rarely get more than 300 posts daily, so starting Monday we should be getting close to 2,000 post a day. Come out of the closet!
So Silent Majority are you Gamers?
Gann 50% retracement and rise rule
Does anyone here subscribe to this school of thought? On major indices it seems to work within a few percentage points quite often.
Re: Gann 50% retracement and rise rule
Do you mean Fibonacci 50% retracement? If so, yes it is a good guide.
P.S. I'm talking too much lately, going to lurk mode (too much coffee).
Re: GOLD CURRENCY
"Anti-war protests? The most effective anti-war protests were by the US troops who "fragged" (threw fragmentation grenades at) 788 officers. Eighty six officers were killed by their own troops and 714 wounded. This had more impact than the kids with placards. You can't fight a war that the troops are sick of after ten years without progress."
Yes, when people can't reach those behind a policy they will tend to strike out at whomever is handy. We could see an outbreak of violence akin to the 1960s with those least responsible taking the brunt of the outrage.
Tough to get to "those too big to fail" and those who are perpetuating this fraud. Blacks may see Hispanics as taking their jobs. Whites may see all Hispanics as illegals costing tax dollars. Poorer may see richer as the enemy who brought this on.
Diversity is not necessarily a good thing when a scapegoat is needed.
On the other hand, I'm still hoping the effects of this criminal (IMO) action will unite all of the above to make change we can live with. We need to identify the proper targets before picking up the pitchforks. I think more people are beginning to realize just who this is, but still too few.
Re: What is the essence of what you are saying here Bill?
Ad,
Go to:
http://www.tiny.cc/
Re: Gann 50% retracement and rise rule
NYUGrad, my mistake there is a Gann 50% rule, Gann states "You can make a fortune by following this one rule alone."
There is a book titled The Trading Rule That Can Make You Rich, by Edward D. Dobson that is a short 67 pages that focuses on this very rule. You can get it at the library or maybe Amazon and I recommend it.
That's it sorry for my mistake.
Re: Gann 50% retracement and rise rule
Here are some youtube vids i came across. and i've attached my back of napkin 1st try to see if this works. Obviously there is prob a chart out there that will fit almost any theory or mathematical repetition. but quite interesting.
http://bit.ly/1DqOq6
there is a parts 1, 2, 3
Summary: the most important level of support or resistance is 50% of a major high or low. But obviously this doesn't always work. But my thinking is you include fib retracements and other indicators and you have a better risk mgmt system in place. This was news to me so thought i would share.
And my chart is attached. Two big ifs. If 43.17 is top and if 50% retracement plays out, it would mean lower low than Dec or Mar.
EDIT: And i picked QQQQ randomly. prob biased as i am into QID now. But when i have time I would like to check this out for individual stocks as well as gold.
VMC and MLM have had fits and starts for
several months, yet GVA .... ? California ( and analyst aside ), this one remains a mystery... Are those $$$ billion's set aside to be used for public works ?... Will there be any job programs in the works before years end, or is it a ' just in case ' back-up for the financials...?
shorted more FCX
I am a bit surprised by the action in FCX, as it keeps going up. Still, I just shorted a little more FCX at $71 because copper is still making lower highs and lower lows and did not break out to a new high above $2.80, S&P did not break out to a new high above 1060. However, as soon as I see both of these conditions take place, I'll take off most of my FCX shorts (except those that I am using to hedge my UXG, SLV and GLD) and will be ready to put them back on at higher levels when the charts will turn bearish once again.
Edit: I should also note that $USD seems to have stopped its decline (at least for today) and started rising, potentially making a strong double bottom at $76. If this continues, then FCX obviously has no chances.
Edit 2: Yet another factor I forgot to mention for entering the FCX short right now is that it seems to have made two lower highs on the daily chart and right now, at $70.82, is VERY close to making a lower low.
Re: The Silent Majority..I guess I'm one
Telestar3d, RE: The Silent Majority, the group of 10,000
I guess I would put myself in that group, although I have never voiced displeasure with the format of Bill's blog. I have tried to provide input and support for improvements or changes, but ultimately I usually go by the rule "if it works, don't try to fix it".
Personally I try to keep up with the blog daily or at least every few days, usually after hours or on weekends. I don't have the time available to day trade and thus I'm becoming more of a swing trader / short term investor. In my opinion this is the major issue for the silent majority, participation is a two way street. With all the discourse in one common daily blog it makes it very difficult for anyone with limited time. Yes its easy to get the mic and make a post, but then later that day or the next trying to follow-up or continue the discussion is impossible or at least it would be so disjointed as to be impossible.
In my opinion, if we (Bill) had the ability to create a limited number of sub-committee groups (blogs) on specific subjects, say "oil & gas", "PM's / miners", "Cara 100", "I-Phone vs Blackberry" etc. then things would be a little different. These groups would only attract members with specific interests / or skills and would have only a few daily posts on a single focused subject. Thus checking in every few days would be sufficient to keep up and involved with the discussion. With something along these lines, I think we would see much more participation from the silent majority.
I know Bill and the team are working on some new formats and ideas for the blog which we will see shortly. Virtually every step Bill has made has been an improvement and perhaps the silent majority will have some new options in the near future.
As always I consider it a privilege to participate here, when I can and I appreciate everything Bill and the team have done to help us all thru these volatile times.
Quasi
Re: Wall Street's near-death experience
Bill,
Did you catch this howler on the very first page of the long piece by Sorkin?
"... Treasury bills were trading for less than 1 percent (annualized) interest, as if they were no better than cash, as if the full faith of the government had suddenly become meaningless."
Maybe he's better at describing billionaires drinking coffee in paper cups and "grubby" bedrooms at the NY Fed.
But, seriously, the Paulson/Goldman waiver/recusal talk smacks of a planted story. Call me cynical ...
Re: What is the essence of what you are saying here Bill?
Alright, I'm going to show my ignorance here, but aren't the particulars of 1987 significantly different than today, specifically the prevailing interest rates? I'd actually expect a slight rise in interest rates to inspire confidence at this stage. I guess I was just looking at this as an example of how a tenuously-high market can be knocked off a cliff at any moment by a fear-inspiring comment.
Re: shorted more FCX
David,
Don't forget that FCX is Freeport Copper and GOLD. If gold has truly broken above $1033 and is headed for the 1200 - 1300 range that could be a very dangerous short. To me the chart looks bullish, I am not so sure it is inversely correlated to the price of copper as you seem to be assuming. Hopefully, you are taking measures that whatever happens in the market, you will be happy, I like that concept and try to apply it myself. :-)
Re: shorted more FCX
Sorry, didn't say that correctly with "inverse correlation". Meant to say I am not sure that just because the price of copper is going down that FCX will follow it down.
Refinancing experience
I have great credit and I'm in the process of refinancing from a 30 yr. to a 15 yr. mortgage. I was told that W-2 forms from the past 2 years are no longer acceptable verification, the underwriters want to see my 2 most recent pay stubs. On the one hand, this seems cautious and a procedure that banks should've been following all along. On the other hand, it seems overly cautious. Indicative of a very tight credit market and a reaction to the rise in the unemployment rate since last year.
Silent Majority - PDA
My cara 100 choice today (i just bought 100 shares) at 53.60. I am a fan of point and figure charting. Using stockcharts.com, I have a price objective of 90 and a stop around 48.99....10 to 1 reward to risk...
Pierre says to decrease the box size on point and figure charts to get a shorter term look at trends and support.....these look positive as well.
I have been using bill's stocks in this fashion at tickerspy.com and have a 34% gain since I started (s&p is up over 50% over the same time period, so I am not a pro). The following is what is currently in the portfolio...I do have ATVI in my real $ portfolio. The percentage is the gain since purchase.
Please do not lecture me about RSI levels...Everyone likes to cook differently.
ATVI $12.48 +6.0% stop 10.99
BBD $20.00 +25.9% sell if closes below 18.95
KSS $57.93 +13.5% Stop 54.50
PDA $53.55 n/a stop at 48.99 (using today's closing price)
Re: Refinancing experience
Tremendous -
I recently did a conventional loan and was also required to provide two most recent pay stubs. I would guess it is just a reflection of the high unemployment rates.
In the lender's eyes, they are unaware whether you are refinancing to take advantage of current rates or whether you may have lost your employment and need to refinance to back your equity out to pay for other needs. Hard to believe they did not previously require this - but I suppose when employment levels were high there was an implicit assumption that employment could/would be easy to obtain.
Re: Refinancing experience
Wait until they ask you for bank statements showing you have enough cash to service the mortgage for 6 months, if you were to lose your primary source of income. ;)
Re: Refinancing experience
And very shortly down the road.... a financial IQ test. Of course this wouldn't apply if its the guberment loaning out the money, (loaning out our money).
brief dollar drop
The brief dollar drop at 1:30 ET startled me out of my oil short. It was very odd - gold, silver, and spx didn't notice UUP's move, but I sure did, and closed out my short accordingly. No harm done, I made money, but I thought the whole experience was very odd. Either something is up with UUP, or the markets totally decoupled from their usual dollar linkage for the past half hour.
In related news, XLE does not seem to be a follower of USO at all. It is very curious. Maybe a computer got unplugged somewhere.
The whole market feels sluggish today, actually. Calm before the storm?
bought back some SRS
The markets seem to be heading south now, which would print yet another lower high on S&P. I just bought back at $10.30 the other 1/2 of the SRS shares I sold on Friday at $10.60 (I bought back the first 1/2 on Monday at $10.11). Preparing for a ride. :)
Re: What is the essence of what you are saying here Bill?
Ad,
I am happy that others stepped up to discuss this. I don't always have time.
Many people blamed the crash on the comments Baker made concerning the dollar. Here is Roubini's take on the background.
In 1987, the biggest external problem of the U.S. was the large current account deficit that had been the result of the twin deficits of the Reagan years. Unsustainable tax cuts and excessive military spending (remember the pie-in-the-sky Star Wars project) in the Reagan I administration led to a strong dollar and a large current account deficit; after 1985 the dollar started to fall driven by the unsustainable external imbalance. In 2006, we bear the consequences of the reckless fiscal policies – unsustainable tax cuts and runaway military spending in reckless foreign adventures like Iraq (pie-in-the-sky dreams of imposing "democracy" in the Middle East) – that led to large twin deficits since 2001. And since 2002 the dollar has started to fall under the pressure of the external imbalance.
In 1987, in spite of the fall of the dollar since the Plaza agreement of 1985, the current account deficit was still large because of the delayed – J-curve – effects of the depreciation and because the still large fiscal deficits and low private savings kept national savings low. Then, the U.S. started to blame its trading partners, Germany and Japan, and their "weak" currencies for being at fault for the continued US trade deficit. The political scare mongering in the US was that a rising export giant like Japan would leading to the hollowing out of the US manufacturing sector; trade frictions with Japan – on cars, semiconductors, etc. – became heated and accusations of “unfair” trade were rampant. Then, the US started to put pressure on Germany and Japan to let their currencies – the mark and the yen – to appreciate significantly more relative to the US dollar. Today, the scare mongering on “unfair” trade has China as its scapegoat and victim. The US, instead of blaming its own policies that led to low private and public savings for its external deficit, is blaming China and its currency policies for these external imbalances. As in 1987 there is the terror that China will hollow out the US trade sector with its unstoppable export boom. And trade tensions are now boiling.
The tensions on trade also came to a boil in October 1987 when the markets were already nervous about the economy, inflation, higher interest rates, an inexperienced and initially clumsy Fed Chairman and a soaring trade deficit. The announcement of a large U.S. trade deficit on October 14 was the tipping point. Following this news, Treasury Secretary James Baker strongly suggested the need for a fall in the dollar and made implicit threat that the reluctance of Germany and Japan to let the mark and yen to appreciate could be met with retaliatory trade actions. The following day – the infamous Black Monday of October 19th 1987, the stock market crashed: the Dow Jones Industrial Average went into a free fall, down -508 points, losing -22.6% of its total value. The S&P 500 collapsed by -20.4%, dropping from 282.7 to 225.06. This was the largest loss that Wall Street had ever experienced in a single day. Technical factors, such as the growth of derivative instruments trading and inappropriate risk management tools (delta hedging that could hedge little in a fat-tail event of systemic turmoil and instead exacerbated the herding reaction of the market) added to the disorderly financial meltdown.
Re: shorted more FCX
JesseSLC, thank you for reminding me about gold being a part of FCX. Do you know what fraction of their profits comes from gold? I was under the impression that this fraction is small. If gold soars now, I will be in a good shape, since I have been accumulating GLD and SLV since March, still have a lot of UXG left, and also bought a fair amount of January 2010 GLD calls (with a strike of $90) when gold rose to 1005 for the third time a few weeks back (instead of crashing down after briefly rising above 1000 like it did last year, which made me think that this move is much more sustained this time).
I would like to thank Bill for pointing out that $985 is a strong support level for gold, and if violated, gold could easily go to $900. During the gold collapse last week, I was afraid about gold tanking after $USD started heading up, I did wait for $985 to break. Bill's call about $985 being a strong support level was right on the target, and $985 held firm, which helped me calm my fears. This showed me, once again, that instead of engaging in theoretical debates about gold I should just be watching the price. If gold falls below $985, I'll sell my calls and maybe sell some of my UXG as well. Until that happens, I am in the game.
Re: Refinancing experience
t11- We refinanced March '09 (to a 4.875% 30-yr fixed), and 2 pay stubs were required. But then, every time I've financed or refinanced it's been the same, so that may be a Bay Area standard.
FYI
I'm looking for a few more days of consolidation then a final rally up for the $NDX before beginning its correction downward. Getting close to a 10 yr trend line and some good over resistance above.
http://tinyurl.com/yag6o2l
CRE
Commercial RE report from Cdn REIT MF manager. Some points.
There will be blood, but mitigating that:
Outlook continues to improve with low interest rates, capital available to re-capitalize REITs; ("Re-equitizing" term replaces deleveraging)
Thirst for yield.
Large market rents and leases stabilizing.
Everyone expects a crash, Remember: Things never move as we would expect them to.
Dislosure, Long SRS.
Re: FYI
Bev- I would agree that the rally is not over. (fwiw), I think:
(a) The Obama administration wants the DJIA (the index followed by J6P) over 10000. And to the extent possible, for it to remain there.
(b) It was last November when Obama started working on the financial crisis- it would be a notch on his belt for October/November 2009 (ie, the first anniversary of the crisis) to be seen in a positive light.
I know it sounds like a pretty 'shallow' argument. Human nature often is shallow. Not referring specifically to Obama, nor am I necessarily dissing the shallow(er) aspects of human nature, which after all is a natural part of us.
Re: shorted more FCX
David,
I don't really follow the company or know much about it. I do know that it is part of the XAU index and I think many people consider it a gold stock more than a copper stock. I just enjoy following your trades that you so generously post so when I have time I check the chart when you post about something. Looking at the chart I see an uptrending price making higher highs and higher lows, slow stoch showing upward momentum, a RSI7 moving up, and a MACD getting ready to trigger a buy signal. I do think I remember you recently chastising yourself for jumping into a short before it was clear the trend had changed. Just trying to help, maybe you are a little sleepy getting up so early before it is even afternoon. Ha!
3rd Lower High in past few weeks
Until the s&p can close above the most recent high of 1062.98 I think the downtrend remains intact. I also think there are so many signs of a top, including excessive bullish sentiment, big increase in M&A activity, insider selling far outweighing insider buying, etc, and the market remaining overbought across numerous metrics.
Re: brief dollar drop
"The whole market feels sluggish today, actually. Calm before the storm?"
dave, I would say the market is VERY nervous today, with sharp rallies coming out of nowhere followed by abrupt declines. I haven't seen such a jagged chart for market indexes in a long time. Still, DOW has just made a lower high and S&P put in a double top over the past couple of hours. It may not mean much in such a jagged market, though.
Bill, could JP Morgan refuse delivery of physical gold to
their counter-parties, and if so, what events would you think might happen ? And if JP doesn't have the physical, would they have to buy or borrow it, and from whom ? Thank you for any answer....
bond yields are going down
Bond yields are supposed to be a proxy for the real economic growth, and with those yields going down the "smarter" bond investors seem to be getting worried about the outlook for 2010. Unless, of course, this is Bernanke spending his last $300B buying bonds in the open market before the end of October, when he promised to stop doing that.
SPY 60 min chart = topping tails
let's see how goldman/jpm, i mean supply/demand, closes the markets.
" Asset Inflation "..did I just hear you correctly, Ron Insana ?
that " although we have ' asset inflation ', equities are a better investment, NOW, than leaving your money in the bank ".... What the F*** ?? Oh, I forgot.. On ' Real Money ' this morning, you lamanted missing the past months run-up, and are now " back in "... Thats my boy...
Re: " Asset Inflation "..did I just hear you correctly, Ron ...
baz....that's the same Ron Insana that left his media post in 2006 to open a hedge fund (at the top of the market) which he later closed in Q4 2008 at the bottom of the market. Why anyone would put value in his financial insight is beyond me. I guess he is a perfect fit for CNBC.
Re: shorted more FCX
JesseSLC, I just looked through the 2008 annual statement from FCX and they are projecting for 2009 to sell 3.9B lb of copper and 2.1M oz of gold. At $3/lb for copper and $1000/oz for gold, that would imply 6 times more revenue from copper sales. The 1 year chart of FCX resembles the copper chart very well, with both FCX and copper bottoming in December 2008. In the short term I do see FCX being more affected by movements in S&P than by movements in copper. Thus, as I said, my trigger for taking off most of the FCX shorts will be for S&P breaking out above the previous high of 1063 and for copper breaking out above the previous high of $2.80.
Re: FYI
2nd
I think we could be close to topping. I also think we will have this last quick run up shaking out the shorts. Then the sell off will start quickly. OR... we will continue to rally to 20,000!
Here is a scary chart. http://tinyurl.com/y8pq5kr
Re: bond yields are going down
David
There was one this morning. He did some more buying
http://tinyurl.com/ya9mx24
.04
Bonds [from google finance]
3 Month 0.04% 0.00 (0.00%) <<<<<<<<<<<<<<<<<<<<<<<<<<
6 Month 0.13% 0.00 (0.00%)
2 Year 0.85% -0.04 (-4.49%)
5 Year 2.15% -0.04 (-1.83%)
10 Year 3.17% -0.05 (-1.55%)
30 Year 3.99% -0.03 (-0.75%)
--------------
on another note, i am disappointed to see no further discussion of the SECRET meetings that everyone knows about thanks to the SECRET meetings being reported in the newspaper.
impaled on the FCX spike...
What a spike up in FCX at the close! I guess the smart short sellers covered EOD before I could notice the spike up. FCX basically matched its 1 year high (set on September 22) at the close today. I might re-think my FCX short strategy. If it goes down tomorrow, then all is well and we have a nice double top. If, however, it continues to power up tomorrow, then I'll close my shorts and will wait for the $73 level to be pierced to the downside (or another bearish setup at higher levels) before putting on those shorts again.
This rally hardly seems overdone....BAC analyst is bullish
“This rally hardly seems overdone to us,” the analysts wrote. A decline of 5 percent to 10 percent in the S&P 500 “would not be surprising, but we would view such a pullback as a buying opportunity,” they wrote.
http://bit.ly/11wls7
Why not just say, "we are short the dollar" and save us some reading.
Alcoa reports. Might help tomorrow with the forever rally
Up afterhours
http://bit.ly/SXhSA
Profit beat and they returned to Greed from Red. But Sales dropped 34 percent to $4.62 billion from $7.234 billion from this time last year. A CNBC headline ofcourse reads, "Alcoa Reports Surprise Profit; Sales Also Beat Expectations."
I expect this to ignite Dow and buyers. Its such a sexy headline for those fax/email client reports going out now.
300 Hotel defaults, foreclosures rise in California
"Statewide, more than 300 hotels were in foreclosure or default on their loans as of Sept. 30 -- a nearly fivefold increase since the start of the year, according to an industry report released Tuesday."
http://www.latimes.com/business/la-fi-hotels-forec...
[Tomorrow's headlines: World Markets Rally On News]
Goodnight! :-)
Re: impaled on the FCX spike...
Why did I fail today? My mind slowed down and I became "glued" to my FCX short, instead of staying agile and being ready to take it off when FCX crosses a certain level on the way up with the realization that I can always put it back on when FCX crosses that level on the way down. This is something one should never forget: always draw a level at which you will take off a position if price moves against you, with the full understanding that you can just as easily put it back on when/if that threshold is crossed back in your favor.
What thresholds should I have been watching today? Well, FCX at some point made a double bottom at $70.70 and then broke below this level. At that point, I should have set $70.70 as that threshold for the short I opened at $71. The final and unquestionable line of defense should have been $71, so as to be consistent with the rule of "not letting a profit turn into a loss." I failed to trigger this rule, I failed to derive a threshold from the chart, and the result followed, quoting Buddha, "just as surely as the cart follows the hoofs of the Ox." Hopefully, I'll avoid making this mistake in the future, now that I have publicly admitted it. The absolute loss on today's short was minimal ($80), thanks to the lesson I learned well from 2nd_ave about scaling into a position in very small increments. But it was still a loss...
Re: Alcoa reports. Might help tomorrow with the forever rally
Ah, so THAT'S what happened to FCX at the close -- it followed AA based on the expectations (or leaked out info) about good earnings. Let's see how sustainable that will be tomorrow. As Bill said, when stocks sell on good news the next day, the future direction is most likely down.
Re: impaled on the FCX spike...
I wasnt' really watching the site today, but what you should have been watching out for was AA earnings which handily beat....here we go again. Every materials stock set to rise. No one looking at revenue drop of 50%
Just speaking with friend in metal fabrication shop. He says copper just keeps going up in price.
Re: Alcoa reports. Might help tomorrow with the forever rally
Freudian slip :)
I cant edit my post since you replied David. oh well.
"Greed from Red" meant to say returned to "Green from Red"
spy charts
Just a couple of simple trend lines.
On the log chart you can still probably read last 3 days rally as retesting the March-now trendline, and not having broken it. Certainly not broken it decisively and with volume.
On the linear chart the trendline wasn't even touched with recent correction and todays rally looks like it went to the top line of a wedge.
On both the RSI is still below it's recent bounce attempt, MACD hasn't crossed over bullishly yet, and volume continues to be anemic on positive days.
Tomorrow is a somewhat busy news day:
Oct 8 8:30 AM Initial Claims
Oct 8 8:30 AM Continuing Claims
Oct 8 10:00 AM Wholesale Inventories
So stocks could react and charts could give some decent guidance tomorrow. But if history is any guide, we'll get a doji and more indecision...
Re: spy charts
Good points! May I ask your input on linear vs algo for such a long trend line. Since the non-linear is percentage based vs equal unit of measure for linear, wouldnt non linear (spyOct7Log.PNG) be more accurate/appropriate?
The basis of my question is the long duration of this trend line.
Trying to learn. thx.
Eric Schmidt, Google, says Economy bouncing back. shows signs
http://bit.ly/NghnX
I have to take his comments with grain of salt. if i had his bank account and wealth, I might feel pretty rosy as well, no matter what the market conditions.
but the interview is a good read.
Re: spy charts
Hehe, if I knew, I probably would have just posted one :)
I guess if I think about it, growth (population, gdp, etc) is exponential, or at least expected to be. I.e. 3% per year. In that sense, if you look at the trend line over several decades, you need to use logarithmic. Otherwise you would have to use a parabolic trend line (probably possible, but tricky :).
So yes, non-linear (log) would seem to be the way to go, and it's what I normally look at. I just presented both since I've seen bloggers/commenters refer to both, and figured I'd preempt the confusion...
Just for the fun of it I drew an approximate parabolic trendline on the linear graph :)
Re: Gann 50% retracement and rise rule
NYUgrad thanks for link to youtube Gann vids ,interesting .
Re: Eric Schmidt, Google, says Economy bouncing back. shows ...
Wonder if it's time for some Goog Puts (Oct 510 or 500) or BIDU Puts (Oct 410/400 or 390). Might be cheaper tomorrow if market goes up. RSI tool doesn't yet show GOOG and BIDU to be oversold, but close ...
Wells Fargo thx u. Raising cc rates 3% ahead of law
http://bit.ly/Xu0Jn
Oct. 7 (Bloomberg) -- Wells Fargo & Co. plans to raise interest rates on a majority of credit-card customers by 3 percentage points before federal rules limiting such increases take effect, a company executive said.
Re: spy charts, LInear vs Log
NYUGrad,
I agree with Proudpapa and his comments about rate of change - parabolic on the linear charts.
Here's excerpts from some of my past comments on the subject.
Problem is what does a constant rate of change (say 5%/year) look like on a linear chart ?, its parabolic. And when it changes somewhere on the chart to say 3%, its still parablic, just a little different curve profile, virtually impossible to pick out the change in the curve. Also everyone draws straight lines which are really diminishing rates of change and then tries to interpret them as support areas.
Now on a log chart (actually semi log, linear time/log price), that same 5%/year is a straight line and any deviation of the stock price rate of change is easily identified. The other important factor is that events over time have the same percentage scale, ie when I prepared the following sample charts, Oct 2008, the market crash looked very similar in percentage terms to the 87 crash. But on the linear chart of the same time frame, the 87 crash only looked like a small blip.
Here's a link to the notes I wrote on this subject last fall, along with some sample charts. Its over on the Stockcharts users forum on the IHUB website, link below. Note you can read anything on the board but if you want to post you'll need to do the free sign up thing.
http://investorshub.advfn.com/boards/read_msg.aspx...
"Silver Queen" - Cathrine Mcleod and Bear Creek Mining
Great segment on BNN with a woman who has had an impressive career already. Sold two companies for zillions! From a 3 generation Canadian mining family. Her current company, Bear Creek Mining, is WAY up this year.
http://watch.bnn.ca/commodities/october-2009/commo...
With a bulk tonnage, low-grade deposit, Bear Creek is highly leveraged to the silver price. When silver zooms (after a pullback or consolidation?) Bear Creek will be a good trading vehicle, methinks.
FD: no position
latvia on the way to default
Article in telegraph.co.uk:
http://www.telegraph.co.uk/finance/financetopics/f...
Banks brace for Latvia's collapse
The Baltic states are once again in the eye of the storm after leaked reports that Sweden is bracing for a full-blown economic and political "breakdown" in Latvia.
---
I'm thinking this will be a dollar-positive event, since baltic exposure is a european banking issue. While the dollar is bumping along the bottom right now, imagine how it would perform if the euro is impacted by a shock to the system from one of the eastern european countries that is forced to default.
I am constantly reminded of the devaluations and defaults executed by the heavily indebted former allies during the 30s after their economies hit the skids and they were unable to continue servicing their debts. We're seeing the same thing in Latvia, a year after the crash, just like in the 30s. Latvia is perhaps a canary in the coal mine; unable to service its debt, unwilling to cut back further social programs; default and devaluation will be the inevitable result.
I believe this and other second impulse events will strike an already weakened banking system already mired in bad assets. Can blanket government guarantees rescue them a second time?
EDIT: the Euro has retraced 65% of the way from its low point last November. It's also printed a lower high from its Sep 22 peak of 148.
Re: gold here....
davefairtex -
You wrote: "There are two types of gold to me: the shiny metal in your safe deposit box, and gold promises."
Doesn't the stock of a gold producer occupy a middle ground? With proven reserves in the ground, and a proven ability to produce profitably, gold stocks (to my mind) are MUCH MORE attractive than "paper gold" ETF's, and even more attractive than bullion. When the gold price rises, the producers rise by a multiple (assuming energy costs and base-metal prices behave themselves).
Yet another category is the precious metals royalty companies and Silver Wheaton. THEY have "paper contracts" to be sure, but more solid than JPM's promise as a counter-party. They have costs capped in a way that full producers don't.
SO, I submit that there are 4 types of gold:
- "paper gold" ETF's
- gold producers' stock
- precious metals royalty and "streaming companies"
- bullion.
If society deteriorates far enough to require personal physical possession of physical gold, your "neighbors" may well learn of your good fortune, and come for your hoard with their guns and knives. An EMP weapon detonation could also bring about such conditions. IMO, such dire circumstances are hardly worth planning for.
So, I'll stick with gold stocks.
http://acrossthecurve.com
http://acrossthecurve.com
Interesting observations today: "The principal rumor today was that the Russians had placed a large order in the belly of the Treasury curve and made dealers who were short for the 10 year,uncomfortably short.
That make(s) some sense for the short strokes but I think that a little thoughtful analysis of some anecdotal evidence tell us that even a year since the world nearly rushed headlong off a cliff and into an abyss there are still numerous problems which need solution.
I rarely watch CNBC but had it on briefly today. They presented an interesting story about Target slashing toy prices to match previously announced cuts from retail behemoth Walmart. Here it is two months in advance of Christmas and these fellows are already jousting for their share of the consumer’s wallet. How bad can it be and how much worse will it get if they are already at it?
To reinforce the penurious mood of the consumer, the Federal Reserve released data today which showed that credit fell by $ 12 billion in August or by an annualized rate of 5.8 percent."
Also: ... "One last note. I rarely follow T bill rates but I noted today that the three month bill trades at about 6 basis points. That tells me that there is too much money sloshing around seeking safety. Too much money that is not being lent. And probably too much money about to ignite the next bubble (Treasuries) as it flees low yields for higher yields out the curve."
I, Illini, do continue to hold UUP for the time being.
Bill Cara week in review #09 March 1, 2009
http://bit.ly/I3DLH
this WIR preceeded th march 6, 666 low.
My hw for this evening is to read that wir as well as the following and the opening comments and discourse from that week, and compare with the data/ sentiment now.
Excercise of curiosity.
Re: What is the essence of what you are saying here Bill?
Thankyou all for helping me with my question. I fully understand the context in which it was used and am far more knowledgable for it.
So again, thanks for taking the time
Cheers
Ad
Re: FYI PCLN
Bev...look at the major holders of this stock and the percentages they own. Insiders own 5% and institutions own 121%. How do institutions own more than 100% of the outstanding stock. There must be a lot of shares that are not part of the float. It seems to me this stock can be manipulated by the institutions.
I am wondering if they write puts and let them expire on the way up and write calls and let them expire as they drive the stock down.
DJIA 10000. Purple chips on the hard ten.
It seems unreal. But I see it at the tables all the time. If this market is in fact the casino we all refer to it as (even if it's not, I note little distinction between player and trader behavior), then I'm pretty damned sure we hit DJIA 10000 before the end of the month. Any short plays should be constrained to an intraday time frame. JMO, as always.
Re: gold here....
I consider stock ownership a form of paper gold. It's another promise - "we promise to mine that gold and deliver you a percentage of what we make." The gold is sitting in the ground, yet to be mined, with all sorts of unpleasant possibilities standing between the ore in the ground and the delivery of earnings to shareholders. The promise is also visible to the government.
Lest you think I'm against paper gold - absolutely not. I love paper gold. I try to buy it when its low, and sell when it gets high. It also provides a limited form of insurance against devaluation.
Gold promises are easily taxed or confiscated by a central authority. You bring up the spectre of neighbors with guns and knives taking away your wealth. Scary thought. Well I have to say, the US government does this annually, and its just going to get worse. VAT taxes, wealth taxes, windfall profits taxes, you name it, they'll do it. They have no choice.
Office Rents Dive as Vacancies Rise
http://online.wsj.com/article/SB125488352504069971...
This is an important data point. If you cannot read the whole article, put the title into the browser and lick on the link.
Re: DJIA 10000. Purple chips on the hard ten.
No 2nd DJIA 10k fits exactly in the current pattern. Look at the dips Aug 17 and Sep 1 - the rebounds off those went up an amount more or less equal to the drop. Could it happen a magical third time? Of course it could. We haven't received any bad news lately, and it appears in the absence of bad news, the bias is up.
Oddly, the bias is up for the treasury market as well. Treasuries up, equities up, you can't lose in this casino! Red and black both pay off as winners!
Well until they don't.
Today we're still under the lower high - SPX 1060 or 1070, depending on how you look at it. Happy news tomorrow (or the buck going through its recent low) could definitely spike us over that lower high - but of course if that happens, we'll probably see gold at 1100. Heck, we're halfway there.
Hmm we're already at SPX 1062 in asia, since the buck continued to fall after hours. What to do, what to do?
Dreamliner Production Gets Closer Monitoring
Interesting article on the Boeing Dreamliner. I raised many of these issues four years ago, and most people didn't understand why.
http://online.wsj.com/article/SB125486824367569007...
As with any WSJ article, if you cannot read the whole article, put the title into the browser and lick on the link.
Re: Alcoa reports. Might help tomorrow with the forever rally
I am in 100% stocks for the next week or two. I think it is the "right side of the trade".
After that, I want out of the usd -
but that is me
vb
Re: DJIA 10000. Purple chips on the hard ten.
"Treasuries up, equities up, you can't lose in this casino! Red and black both pay off as winners!
Well until they don't."
dave- Well said! We're on an extended streak, and it's attracting money. They're crowding the table, throwing C notes at the dealers. There are bets on the pass line, 2x/3x/4x place bets on all the points, field bets, all the hard ways, the Horn, the C&E, the Yo, the Hi-Lo, the 3-2, the 5-1, the 5-3, the 3-1, whatever. All get hit multiple times before she sevens-out. You can't lose!
Why am I wasting my time betting against the trend?
Re: Bill Cara week in review #09 March 1, 2009
Wow. The blood on the street was everywhere and the discourse was pretty negative in March. It was the End of the World Part 4.
Are we now at the polar opposite? Despair from March is now replaced with giddy chasing of prices. However the markets are not as overbought today as they were oversold then. Check out the tables on the WIR#09. http://bit.ly/I3DLH
But then check out what the USD has done since March: http://bit.ly/CeJwq
Sadly my conclusion is no conclusion. I will have to just watch USD, volume, support, and resistance. If the USD finds support then rises, will the upcoming earnings be enough to keep the rally going?
After the March 6th low of 666, Bill said this on March 10:
http://bit.ly/WitEw
[7:21am ET] Is there a Bull left standing? As I pointed out in the Daily Report notes today, the crowd is quiet; a general malaise hangs over the market. The blood and gore on the Street is sickening.
The Daily Sentiment Index (DSI) poll of small speculators shows a record oversold [10 day average] reading of just 5% bulls, which is one of the lowest DSI readings ever seen.
When a market is this oversold and rallies are measured in minutes instead of days, the moment of truth is near. Are we about to submerge into cataclysmic spiral into the abyss, or will the relentless selling finally exhaust itself, paving the way for a multi-month or year bull market?
Risk/reward says this pall will lift. BULLISH.
Bank Of America (And Its Executives) To Be Tried By Jury
http://bit.ly/BZLcs
Quote from Zerohedge:
"In an ominous, one sentence disclosure just filed in Southern District Court of New York, the SEC has advised that it will demand a trial by jury for "all issues so triable." It appears the common man will finally have his say. Woe to ex-CEO Ken Lewis."
Another longer article from Bloomberg:
http://tinyurl.com/ydyrm79
NYUGrad- All of my posts from March 6-8, 2009>>>
No comments?
Submitted by 2nd_ave (3761 comments) on Fri, 03/06/2009 - 11:12 #15514
What if we were free to watch the markets with absolutely no commentary whatsoever? Let the prices speak, and the equity values reflect independent and quiet reflection. In the absence of any outside influences, I just like the pricing of the market right now. I think it's a good time to buy.
WFC- scaling back in @ 8.80
Submitted by 2nd_ave (3761 comments) on Fri, 03/06/2009 - 11:40 #15526
25%
FAS- to 60% @ 2.50
Submitted by 2nd_ave (3761 comments) on Fri, 03/06/2009 - 11:56 #15530
accumulating...
Re: FAS- to 60% @ 2.50
Submitted by mucklovin (9 comments) on Fri, 03/06/2009 - 12:21 #15541 (in reply to #15530)
right behind you.
David- FAScination
Submitted by 2nd_ave (3761 comments) on Fri, 03/06/2009 - 20:10 #15667 (in reply to #15655)
David- You've done well pulling your plane out of nosedives, and I'm betting on you again this time. I'm trying to accumulate a position in the financial sector (along with trading around it), and FAS is a natural draw for me from a gambling perspective (if it's a casino, I'm going to call putting money on the table what it is). I can sense the panic in the sector. Once the hysteria subsides and investors relax, I think the financials recover, and it should be (looking back at a 6-12 month chart) more or less a steady climb. It's anathema to say this now (however, that's exactly why the opportunity exists), but FAS can easily return 10-15-20 fold over the next year or two, IF one is able to ignore the intervening volatility. The only way I can see someone holding through that kind of (emotional) turmoil is throwing a small position on a shelf in the garage and forgetting about it.
If not now, when?
Submitted by 2nd_ave (3761 comments) on Fri, 03/06/2009 - 21:28 #15679
"Bull markets are born on pessimism, grow on skepticism, mature on optimism, and die on euphoria. The time of maximum pessimism is the best time to buy, and the time of maximum optimism is the best time to sell." -- Sir John Templeton
The Tao/Dow
Submitted by 2nd_ave (3761 comments) on Fri, 03/06/2009 - 23:47 #15685
I would agree that Taoism is associated not with inaction, but rather effortless action (which, to the uninitiated, can often seem like inaction).
With regard to Pearl Harbor, the Civil Rights Movement, or hate crimes-> I think the Taoist approach would be one of (a) complete (and/or rapid) assimilation of what is happening + (b) an informed understanding of the (human) motives behind what is happening + (c) a clear vision of the most effective/efficient intervention for responding to what is happening (which presupposes a clear understanding of the likely consequences of any particular response). It comes close to being "in the zone." I would imagine most 3-4-5 star generals to be as good at responding to combat situations as we are at handling every day situations/problems at our jobs.
The Taoist approach would also not necessarily involve "heroic" measures. When it comes to infectious diseases, (a) prevention trumps treatment, and (b) proper hand-washing would be more effective than all the antibiotics in the world at reducing morbidity and mortality from viruses and bacteria. (As long as I'm on the topic, supplying simple latrines to the 40% of the global population that lack ANY means of waste disposal would save more lives than all the medical advances made since the beginning of time. Wars have been/are won/lost on a microbial basis- smallpox decimated the American Indian population, and dysentery can fell more troops than artillery.)
The Taoist trader? Probably one who has found what works for him. A perspective on the markets that allows one to trade effortlessly. We all perceive different patterns/rhythms in very individual ways. Asking where "the Dow" is today is not that different from asking what "the Tao" is today, but it has very different meanings for each of us
swissrobinson- "smart money"
Submitted by 2nd_ave (3761 comments) on Sat, 03/07/2009 - 23:20 #15767 (in reply to #15759)
I have a hard time defining smart money.
(a) What if "smart money" right now is on the sidelines, and ANY transactions in the markets constitute the actions of speculators? What if "smart" money really means being on the right side of manipulation? Even worse, if smart money refers to fraud?
(b) What kind of time frame would one use to define smart money? As pointed out earlier this week, even Charles "In cash since '86" Allmon can seem "smart" for a day. Bill Miller was smart money for 11 years running, until two bad years wiped him out. Buffett was smart, then anachronistic, smart again, and now not as smart as we thought?
(c) I sometimes glance through sites such as the one below to get a sense for who's buying or selling. Note that any fund manager who bought almost anything in the past 6 months has yet to be proven "smart." I selected BAC and WFC at random:
http://thebuylist.com/default.aspx?Stock=bac
http://thebuylist.com/default.aspx?Stock=wfc
What I found helpful were (i) there were a few others besides me buying banks this week (LOL), and (ii) having personally met representatives from some of the funds over the years (eg, TIAA-CREF) that I respect, it gives me the sense that a longer-term perspective right now is probably the one to take.
(d) If smart money is defined as money in the right place at the right time all of the time, no such thing. Overall, I would simply define it as sensibly buying on weakness/selling on strength most of the time, as well as handling errors in judgment with dispatch. That's basically what smart people do on a daily basis with their money, right?
Spring forward: Set clocks an hour ahead tonight
Submitted by 2nd_ave (3761 comments) on Sat, 03/07/2009 - 20:04 #15770
If "fall back" defined the last few months, hoping "spring forward" will apply to the next few...
Taxi (completely off-topic)
Submitted by 2nd_ave (3761 comments) on Sun, 03/08/2009 - 14:01 #15813
In 1979 I spent about 8 months driving for Yellow Cab in Ann Arbor. And of course, I would play Harry Chapin's 'Taxi' in my head once in a while. It was only today that I learned those beautiful falsetto lines in the middle were taken from a Sylvia Plath poem:
Baby's so high, that she's skying
Yes she's flying, afraid to fall
I'll tell you why baby's crying
Cause she's dying, aren't we all...
U.S Futures up big
Futures: http://bit.ly/rNwZA
USD: http://bit.ly/31ReWl
Gold: http://bit.ly/Sxun
The Dollar has lost 97% of its value vs. gold since Nixon.....
Hedge fund manager, John Paulson, spoke recently at Grant's Interest Rate Observer in New York.... " What I'm looking at, is not where gold is going to be ( price ) tomorrow, one month from now, three months from now. I am looking at where gold is going to be vis-a-vis the dollar one year from now, three years from now, five years from now. And I think, with a high probability at each of those points, gold will be higher than it is relative to the dollar today. The probability increases the further out you go. So, when I look at what the risk is, the risk to me is far more ( staying in dollars ) than it is in gold . ".... Bill Fleckenstein...10/07/09'
Taxi
http://www.youtube.com/watch?v=IfqjKDRQvWI
Alcoa CEO Klaus Kleinfeld.......
" Although the beverage can market is expected to remain stable, the aerospace market will continue to be flat, commercial building and construction is in decline, and the market for idustrial gas turbines has weakened. Metal prices and demand have not yet improved enough to restart smelter production that has been cut back "...... Conclusion ?? Buy, Buy, Buy...
Re: Office Rents Dive as Vacancies Rise
Article glosses over small business situation representing large portion of GDP with office space beyond the blue chip office towers controlled by REITs with slick Wall St debt structures.
Two types of non-REIT office ownership: Those with max debt and those very few without significant debt run conservatively over the years. Those many with max debt can only nominally negotiate lease rates down before cash flow goes negative. Those few without or limited debt can fill vacancies at whatever it takes to draw the tenant in to get at least better than an empty box for a return on investment. So my big point is that the new market is represented by the deep pockets (low to no debt) locking in downsizing and financially strapped new tenants from across town in high debt property with double rent.
In my college town office market (Ann Arbor, MI, where Sam Zell got his start), the old (pre-Lehman Bros collapse) rental rates were around $18 to $22 per square foot with net expense terms for a turnkey suite. The new rate is $8, using the same terms, just gradually filling the deep pocketed office portfolio vacancies. The max debt landlords are just waiting for the rent to fall short of the monthly debt payment as the 3-5 year leases expire with the ballooning debt and the loss of property title or some bizzare TARP-induced regional bank's workout terms to follow. It's a slow motion collapse and the rent drop is more pronounced in my neck of the woods than the Reis data outlined in the WSJ article and translates into a huge, like 50%-75%, drop in 'Main Street' office property value. Once the new low rents become the norm as the foreclosed properties find new owners, the market will more easily recognize the deep 'discounts' in office building market values. It should take about another six months to a year for this situation to ramp up.
Just my micro economic observation. I wouldn't touch a REIT with a 10-foot poll. Thanks for the WSJ article, Bill.
Re: Bank Of America (And Its Executives) To Be Tried By Jury
ken lewis is the fall man - john thain is the one
Re: spy charts
If memory serves me (which is a big if) but a few days ago "tbar" posted a linear chart and Bill requested that "tbar" also create the same chart in log format because he likes (prefers?)log because it considers percentages. It's a confused memory but if you search you may find the answer you seek.
Re: DJIA 10000. Purple chips on the hard ten.
"Why am I wasting my time betting against the trend?"
See me drumming fingers on the desk and humming "treeeend iis your friend, yes it is" to the tune of "Time is on my side" :)
Just yanking your chain. Good job on March 6 bullish comments
Re: DJIA 10000. Purple chips on the hard ten.
I should have gone all-in March 6, then gotten drunk and yanked the tops off a few parking meters. Sentenced to 6 months in the San Mateo county jail. Released last night.
I could then have sold all of my positions this morning, and retired.
Re: DJIA 10000. Purple chips on the hard ten.
LMAO, 2 nd/.... good plan... perhaps I'll try that on the short side..
Re: Office Rents Dive as Vacancies Rise
Hey Bill,
You said "This is an important data point. If you cannot read the whole article, put the title into the browser and lick on the link."
Well, I tried and all I ended up with was a slimy spot on my screen!
It's late - so goodnight all.
I believe the key to the reversal in this market will be BAC...
Barclays and JP are ok, and we know about Goldman... But, BAC truly has huge problems... STI was downgraded today,( and Lord knows, when their commercial problems in Florida and Georgia and NC come to light, well ).... Countrywide is a massive flood at the front door... The securitized loans are weighing heavy on the numbers.. I see no reason why BAC can't trade back to the area of $ 10 - $ 12.... its really not that hard to do...( I still don't put heavy future government assistance out of the picture ).... it could be September 08' all over again, with the precious metal dancers, once again, the last ones off the floor...
dollar dropping in asia
Well the buck is getting beat up in asia, sending SPX +9, gold +7, and silver +.32. The buck touched briefly at 76.10. Looking back at the $USD (instead of the confusing UUP) I note that 76 is the actual year low reached on Sep 23.
Will it break below 76? If so, where will it find support? 75? 72? A USD of 75 could get us to SPX 1100, and probably gold 1100 too. God only knows what USD of 72 would mean. SPX 1200? Gold 1200?
(Rough calculation: each 1 point of USDX drop corresponds to 31 SPX points)
If USD does not break below 76, perhaps 1060 will be the end of the SPX run for now. Will 76 USD hold? If not, the SPX rally could be impressive, as I'm guessing some serious dollar stops would be taken out.
The euro looks like it might be ready to crack, but it's looked like that before.
barclays says "hold your gold"
http://www.bloomberg.com/apps/news?pid=20603037&si...
Oct. 7 (Bloomberg) -- Investors should hold onto long positions in gold as bullion has “significant upside potential” to reach as high as $1,500 an ounce, Barclays Capital said, citing trading patterns.
“Having rallied ‘off the charts’, we are left to resort to projections and extrapolated trendlines to forecast where the move might stop,” Jordan Kotick, global head of technical analysis at Barclays Capital, wrote in a note e-mailed today.
Contrary indicator? HB&B says gold 1500 - remind you of Goldman's $200 oil call in 2008?
Re: barclays says "hold your gold"
I remember Kaimu remarking that JPM was the custodian of GLD, but he also remarked on an English bank as custodian or heavily involved in paper gold as well. Was it HSBC, RBS or Barclays?
A summary on differences between fixed and per share cost trades
http://ibankcoin.com/woodshedderblog/2009/09/23/co...
preparing to cover the FCX short
I see that $USD has dropped below $76, which suggests that the uptrend until $80 (together with falling commodity prices) is not going to happen. Hence, I have just placed a buy to cover order for 60% of my FCX short, stop at $73 and limit at $74.
Geithner tied at the hip to Wall St. bankers
"The calendars, obtained by the AP under the Freedom of Information Act, offer a behind-the-scenes glimpse at the continued influence of three companies -- Citigroup Inc., JPMorgan Chase & Co. and Goldman Sachs Group Inc. -- whose executives can reach the nation's most powerful economic official on the phone, sometimes several times a day."
http://finance.yahoo.com/news/Geithner-makes-time-...
The AP writers responsible for the article could have made themselves famous by following the dots and asking the questions that needed to be asked. Unfortunately its just regurgitation of what we know, even if it is now on the public record as such.
John Lee tweeted this yesterday during trading hours:
"doji day. Lots of people get killed trading on doji day. I am catching up on s.6 ep.2 of HOUSE instead"
Sounds like good advice. I'll remember that. I know it's been said here before.
Looking at weak usd, now in $75.xx territory, what unemployment?
Whatever the new claims are, prices may hurdle over the unemployment line today. I will be looking for irrational option premium extremes to buy today on inverse etf's with longer expiry.
Key Technical Observation: NR7
http://ronsen.blogspot.com/2009/10/bear-baiting.html
Re: Key Technical Observation: NR7
That's an interesting look at this NR7 setup Ron, thanks.
Cara 100 Ratings Changes
Good morning.
Upgrades:
ABB - to Buy @ UBS
ADBE - to Outperform @ Robert W. Baird. PT Raised from $35 to $40
SYT - to Overweight @ JP Morgan
Downgrades:
BRCM - to Neutral @ Robert W. Baird. PT = $30
TTM - to Hold @ Deutsche Securities
PT Raised:
COST - from $63 to $68 @ Jefferies & Co. Buy
MORE JPM GOLD VAULTS
ALOHA!!
Now I love this one ... Think how this gold vault in Zurich has been "fortified" to keep the gold thieves roaming the streets of Zurich out of the SGOL gold vault yet the biggest gold thief in history is already "fortified inside" the vault.
Copied from the SGOL website ...
"ETFS Physical Swiss Gold Shares are backed by physical gold bullion held by J.P. Morgan in fortified vaults in Zurich, Switzerland. The Shares represent a direct interest in physical gold bullion owned by the Trust. Shares can only be issued when bullion is delivered into the Trust account at the Custodian's vault, which is independently inspected twice a year by Inspectorate International. An appointed Trustee must approve all deposits and withdrawals of Bullion held by the Custodian.
Does it matter who the inspector is when JP MORGAN guards the vault?
Even the Swiss public seems to believe JP MORGAN can be trusted. If only they had known the details of the Blanchard Coin lawsuit ... JP MORGAN in recorded court documents is an agent for the US FED and therefore "immune" from prosecution. Would the SNB stoop that low?
In other words this SGOL ETF has hired the World's largest GOLD SHORT on the COMEX to guard their gold. I wonder if COMEX short deliveries can be covered by the SGOL bullion vault ... Hummmmm??? I predict these ETF vaults owned by JP MORGAN and funded by unsuspecting "investors" will be put top the test.
ITS ALL WORKS ...
.
t