Cara's Commentary & Community Chat, Wednesday, Sept. 16, 2009

Pimco ups its stake in government debt big time in one fund:
http://www.bloomberg.com/apps/news?pid=20601087&si...

while global confidence is breaking new highs on signs recession over
http://www.bloomberg.com/apps/news?pid=20601087&si...

on the back of eight days of straight gains in QQQQ with no pullback. Hmmm. Something stinks.

I am guessing that Pimco is confident that yields remain low and prices will rise if they're loading up? Or do they seek the yields of rising interest rates they believe will come from an "improving" economy?

ALOHA !!

From Tuesday section ...

aucourant posted - "we could start a lobby "Government for the People" on behalf of the American people."

So we already pay their bloated salary as "bribe takers" and now we have to pay them "honesty bonuses" to boot?

I say we just vote out every REP and DEM incumbent in the US Congress no matter how long they have been there. No matter who they are. Let them know we are done with REP and DEM. Stop contributing donations to those two parties, stop volunteering for those parties, stop all contact with those parties. Let both parties just dry up and blow away.

JUST VOTE THEM ALL OUT ...

CLEAN HOUSE! Literally ...

It would be so much cheaper and so effective. We pay nothing yet send a VERY powerful message that we are done with them! Just imagine 535 new employees showing up at Goldman Sachs headquarters all at once! HA!! Then imagine a CSPAN without a single DEM or REP present in Congress, only independents and libertarians and the like. Not a single REP or DEM present anywhere in Washington DC. Then imagine the REP and DEM headquarters having to shut down due to lack of funds ... AWESOME ...

A complete coup without a shot fired or a single street protest!

That is what I have been doing since the 1980s ...

Voting is POWER ... show them the POWER for once!

"Sept. 16 (Bloomberg) -- As Alan Greenspan tirelessly makes the rounds to save his legacy, Singapore is reminding us why the former Federal Reserve chairman’s efforts aren’t working.

Mr. “We Can’t Detect Bubbles” probably never thought he could learn a thing or three from an economy of 4.8 million people. This week, Singapore’s National Development Minister Mah Bow Tan unveiled measures to prevent excessive price swings in the real-estate market.

The reason: The Asian country sees the very signs of rampant speculation in home buying that central bankers such as Greenspan long argued couldn’t be spotted or headed off. Funny how tiny Singapore can do it and the mighty Fed can’t.

Mah, in perhaps a Freudian slip, seemed to note the irony. He said Singapore’s measures were meant to “temper the exuberance in the market.” Remember it was in December 1996 that Greenspan made the words “irrational exuberance” a euphemism for bubble."

The author goes onto note that:

"In Hong Kong’s case, I’d say it’s too late. Its market capitalization to gross domestic product ratio is 640 percent, according to Mark Matthews, a strategist at Fox-Pitt Kelton in Hong Kong. That’s four times larger than that of Singapore and 10 times as large as the average for the rest of the region. Bubble, anyone?

Exhibit A: A one-bedroom apartment in Kowloon sold for a record HK$24.5 million ($3.2 million), the South China Morning Post reported. For 816 square feet (76 square meters), that had better include visits by Jackie Chan or Jay-Z."

So the Hang Seng is apparently in bubble territory along with HK real estate. So the US markets may not make the first move in tumbling. And Mr Bubbles just keeps on making a spectacle of himself.

http://www.bloomberg.com/apps/news?pid=20601039&si...

I do not know the exact time, but its around 9 AM

Edit: he is on presently

ALOHA !!

GOLD UP and AUD UP
GOLD UP and CDN UP

I see most of the commodity currencies are up against the USD and gold priced in those currencies are up as well. This enhances owning a pure gold producer listed on the ASX or TSX much more. A currency and metal "arbitrage vortex-x-x"(aka: Rogue Trader)!! HA!!

When I follow currencies I note the differentials(point spreads). Like I have always seen the spread between the Swiss Franc and the Australian Dollar is always 1000 basis points roughly for months now. Today it has now broken down that resistance in favor of the Australian Dollar and is now at a .0948 value. On the present course this would signal a break out in the Australian Dollar.

I do not use the AUD ETF FXA, but I do use the real deal ...

ALOHA !!

It definitely includes RON PAUL! He would be one of the most proud Americans if he saw WE THE PEOPLE clean house on these "illegals", these traitors. He has said many times that he is only running as a REP so he can stay in power and keep getting elected! He is playing the "game" ... He knows the score in DC!! He knows that 90% of US Voters can't think past two parties! He knows the power structure in DC and the media is against third parties, which is why WE THE PEOPLE need to be voting FOR third parties! HA!!

People like RUSH LIMBAUGH should be ousted from radio for promoting the two party system. As long as you listen to RUSH you are divided! You are NOT UNITED against the corrupt two party political elite.

Whatever they say we need to do the opposite! DO A GANDHI!! DO NOT PARTICIPATE IN EMPIRE! SAY "NO" TO EMPIRE ... EMPIRE = REP & DEM

ERTS - Upgraded to Outperform @ FBR Capital. PT Raised from $20 to $22

If you're holding either one and thinking three sevens just lined up on the slot machine, here's the casino concierge to explain it all to you:

http://tinyurl.com/olql5e

We the citizens of the Unites States of America are a blessed lot. We have the best politicians money can buy.

So as far as I can tell, gold's rise yesterday evening and this morning was accomplished without a large move down in the buck. I recall Bill saying that in the past that gold runs typically end with gold gapping higher overnight, and then selling off all day long. We're in a position to do just that this morning.

So after market open, will gold drive higher, will the shorts run to cover, or will we see distribution followed by weakness and perhaps accompanied by a dollar rebound?

10x10x10x10.....March to 100M

I am at heart a cynic and skeptic. I guess you can become like that growing up in NYC. But I want to be part of the solution. And I will assume this community consists of thousands of readers just in America alone. And I will also assume each of those frequent readers knows 10 people that are not commonly shared adults who pay taxes and live in America.

If we each effect 10 people in our network to open their eyes to what is happening, and they agree to do the same, it would not take very long for full awareness by all of the working class in America.

This logic is why I started my blog and why I have started to speak loudly with my family, friends, and coworkers. Referring them to this blog, other blogs, emailing ron paul videos, encouraging them to see Michael Moore's new upcoming movie, etc.

A democracy filled with men and women who don't know they are slaves, is just a tyranny!

10
100
1,000
10,000
100,000
1,000,000
10,000,000
100,000,000

For anyone who bought gold long this morning....Looking to enter yamana on a solid turnaround above the upper pivot at 11.

Preferrably AT 11:)

Could take 'till 11 am as well.

Dave- I think it's high-risk time, regardless of what one holds in his portfolio. Even cash, where the risk is underperformance. Nothing would surprise me right now.

Of course, it's also a time to be prepared for opportunities.

100% cash right now.

Bought some at $3.06. The company has now announced two deals, of which today's is a large deal, in the past week. The deals are selling their portfolio companies which means there is liquidity in the marketplace and they are able to raise much needed cash to cover their debt convenant issues. The stock was beating down quite a bit and if they can survive this stock will go up quite a bit in my opinion.

I admire your efforts. Yes we can, as I have been doing the same to educate and awaken those around me.

Nothing looks meaningful in my eyes at the moment since everything looks to be purely liquidity and emotionally driven. Interestingly the banks have started to underperform again.

Yes, it is a long way to 790EUR/Oz from 692. Would 1200USD/Oz make a new high in EUR as well? I certainly do not expect on it, not this year at least.

Chris - ACAS is one I have watched since December. They have a portfolio of companies whose performance was dragging the company into near bankruptcy. They violated some debt covenants and were able to negotiate extensions on them hoping they could sell some of their companies and raise cash. They couldn't do this until the past week and they just announced two deals, of which today's is a big one and will solve their cash problems. I think this goes much higher.

I also meant to mention that they sold the company for a huge gain and it values the company at over $200 Million more than they were marking it on their books last quarter. So book value of the company goes up more than 10%, which is significantly considering it is currently trading at .5 times it's book value from last quarter. If it trades at book this is a $7 stock.

'I see most of the commodity currencies are up against the USD and gold priced in those currencies are up as well. This enhances owning a pure gold producer listed on the ASX or TSX much more.'

Ha, not if your an Aussie or Canadian Kaimu. Gold for us poor Aussies is DOWN 25 odd % since February.

Obviously our PPP is up but thats cold comfort sometimes :)

I'm a long term Gold bull, but the more and more I learn, the more I wonder how great an investment it is for those from the 'commodity currency' countries, as our AUD seems to be the worlds 'go to' currency at the moment.

Bill if your ever looking for a topic to discuss, I and I'm sure other non US members would love to hear your thoughts on the subject of gold in strong currencies.

Cheers
Ad

The fact that "every pundit is saying the recession is over" makes me think it's just begun. Where were these pundits last year? Where were they in March? What is their record (as Bill mentioned this morning)? Look at Bernake's statement yesterday -- what the heck does he know about the future when he got this whole mess so wrong as far as his prognostications went?

Colour me cynical but there's really only one economist I listen to -- David Rosenberg and even his words are carefully vetted.
s

You know, the more I think about this deal the more it makes me think ACAS is significantly undervalued. They sold this company for $400 Million. The current market cap of ACAS is $900 Million. This is a company that was on the brink of bankruptcy. It was a $40 stock in 2008.

FD:
I own shares at $3.05ish.

"You know more than I on the subject."

not really :).

"I thought it was fascinating because every pundit is saying the recession is over, yet this armada of cargo ships sits idle."

And in that you are right. But it is terribly frustrating not to be able to make market trading decisions based on economic conditions.

Being a parent never instilled the sort of patience that I'm learning from trading.

a useful read on the subject:

http://www.spiegel.de/international/business/0,151...

speaking of shipping, DRYS that I accidently shorted yesterday fiddling with the stop order just went through the roof. Covered ok when resistance was passed, but sheesh talk about a major stuff up...

thank goodness he is back in ' the pits ' instead of having to play nice on the set..... Santelli is the only, and I mean Only regular on cnbc ( there is no way in hell I will capitalize ' cnbc ' )who tells the truth..... I thought all was lost while he was on fast money,,,, glad to see his stripes haven't changed...

I agree, very good points. I really like how Rosenberg's new firm puts out a free daily email with his thoughts on the markets and economy.

Bought more at $3.20.

SNY - I have owned this for a while and added some last year after the initial H1N1 scare. It just made a new 52-week high. Wonder how much furtehr it has to run or I should consider writing Calls against some of my holdings to protect downside. I also fear a near-term bounce in the us$.

http://finviz.com/quote.ashx?t=sny

As per the RSI 7d-7W-7m system values are not yet screaming a SELL, but I am sure it will go down if/when the rest of the markets go down.

Would appreciate any/all opinions

Custom chart review FWIW. You may want to protect those nice gains in some way given prior resistance and lack of volume on the upside.

http://chart.ly/htqwxa

The valuations... and the fact that inside selling is 25 x inside buying... they know better than I what is going on...

NYU, I am aware of the "ghost fleet", but from these postings I have learned to pay attention to the BDI http://tinyurl.com/3sm9kd (still low with BCI in free fall) and rail car loadings http://tinyurl.com/5otcgc (current week is looking good, but YTD not so much).

This looks like another good site http://tinyurl.com/qtm5n6 but I haven't used it much yet.

"Long Term Gold Chart Targets 1325"

"US Dollar Long Term Chart and a Scenario for Dollar Devaluation"

depressing - talking about dollar devaluation...

http://jessescrossroadscafe.blogspot.com/

I agree. I would rather make money than say "that's it, this is totally irrational...I don't care if the market keeps going up because I'm right and I'm not going to buy anything". No one is bigger than the market.

And to say that everything is overvalued is ridiculous in my mind. Are you going to tell me that GE is overvalued when it is still 60% off its highs? What if the economy is actually turning around? Wouldn't you agree that it's possible that companies like GE can actually grow their revenues and that the earnings estimates could be low if the economy has bottomed and is going up?

I'm also cognizant that things could be heading toward a blow off top in the short term but I think things are getting better in the economy despite what most naysayers are pointing to. I'm optimistic but keeping open to all sides of the argument.

http://tinyurl.com/r8229v
An interesting site. I may start using it.

Thursday, September 10, 2009 - The Freight Transportation Services Index (TSI) rose 1.6 percent in July from its June level, the first monthly increase since February and the largest increase since January 2008, the U.S. Department of Transportation’s Bureau of Transportation Statistics (BTS) reported today (Table 1).

BTS, a part of the Research and Innovative Technology Administration, reported that the

NOTE >>Freight TSI declined in nine of the last 12 months, but has remained steady or increased in the last two (Table 2).

For additional historical data, go to http://www.bts.gov/xml/tsi/src/index.xml

"No point in getting mad at prices, they will happen anyways."

No kidding. Prices reflect collective consensus at any given moment. How is it a matter of any emotion, anger or otherwise... Crowds are gullible and are going to get lured it near the top? Well, it happened at each and every market top and it's exactly what makes the top - exhaustion of buyers among which crowd is the last segment to react. Similarly, bottoms are made with crowds being last to exit. One can get mad at tulip mania of the 17th century just the same.

Let me offer a great read: Extraordinary Popular Delusions and the Madness of Crowds by Charles Mackay, first published in 1841. Offers real perspective on the matter and contributes greatly to understanding of the markets from mass psychology point of view.

Agreed. It's like getting mad at being stuck in traffic. You might as well get into the Zen of waiting it out. Have dinner. Get an oil change. Whatever.

http://seekingalpha.com/article/161578-the-little-...

this article is already available to us.

I feel bad for these people but I put a large part of the blame on them. People have to take control of their own money. Why would anyone work their butts off 40+ hours a week and save money and then put it into something they have no idea about? That's just ridiculous. The market is inherently risky.

Love that book!! So pertinent to today. Thanks for suggesting it.
s

baz, I don't think your line of thoughts is going against the grain of the community per se. Displeasure with the way wasteful and ineffective money management ways were and are being pushed on unsuspecting public was expressed here many times, and rightly so. That's why we do what we do here: try to educate those who are inclined to manage their money themselves and offer professional management based on very different principles to those who aren't.

It's just that many prefer emotions to lead to something constructive, not just endless venting :)

"Let me offer a great read: Extraordinary Popular Delusions and the Madness of Crowds by Charles Mackay, first published in 1841."

http://www.gutenberg.org/etext/24518

Thanks Vad, here^s a link to a free electronic version.

I bought around where I circled the oversold stoch condition on the chart. I have a stop below that level to control losses. But for gains i use indicators to guide when i sell.

seems it can either be consolidating or forming a bearish wedge. support and resistance is clearly defined. But greed is more apparent than fear. might be time to cash in.

http://tinyurl.com/q4c9o4

On another note, I was right on IAG, just got shaken out too early. IAG has no overhead technical resistance, that other gold miners have to contend with.

My best wishes to his success in prosecuting and implicating Paulson/Bernanke as well.

http://tinyurl.com/o2wjp9

Another down day - what does this make, 8 of the last 9? I keep expecting a rebound, and every day I'm disappointed. Perhaps I should capitulate. :)

I wish I had real volume information on the forex market.

RSI daily=15.43, weekly=16.45, monthly=31.30

SRS at 9.10 anyone??

Baz22 said, " So, I will shut up, because this goes against the grain of the community, and I do not want to be viewed as an outcast.."

Please speak up, differing points of views are good. Regardless of what we feel or our own bias, we need to know both sides to best navigate. Thanks for sharing.

The truth matters until it doesn't.(thanks Kaimu) It seems Rick Santelli didn't take the bait of an air time ego feed or higher contract feed and convert.
It was interesting to see how obvious the truth was when he refused to argue and didn't fall for the scripted list of hot flash points that had worked to get him going over the last year. A lesson I will take from that video.
The point, it made me have a gutt check.The recession is over. Day 1 since the call how many more days till rates go up? Does this mean that they proceed now with their truth and recovery count down. It seems they only see their truth and don't realize one morning something will end in a result they had not seen. That's when their truth will matter till it doesn't. Two ways of seeing truth in this country will lead to one big fall in my humble opinion.
How long will this take until we(USA) trip over the proverbial rug , so much has been swept under there it's going to be one heck of a fall when it happens.
Long QID with stops,long VGTSX in my 401k "savings"
Sold UXG at 3.30, Limit stink bid at 2.09(should be 2.41?) to reload
Only my second post and a second chance to say mahalo to Bill for my education which is still in progress...Aloha

might be a good time to look at this again as this has lagged the market but finally started to move last week. There is a $70 price target out on them and they look pretty undervalued. Deep in the money calls expiring far out (Mar/Apr 2010 or Jan 2011) might be a good investment...

Les - I'm willing to let this one go for a little while as I think today's news is a huge sentiment changer for the next few weeks/months. As such, I'm ok with having it go down 10% because I think it's worth at least double it's current price.

Vad said:"Ah come on... this is an old book, written with class, elegance, respect to history, tasty surfing through the names and events... get it in a library and read a real deal"

You do remember this story about a man who didn't speak the local language when he moved to another country, don't you?

I could buy it on Amazon, but that would be succumbing to superdupertechnology in pursuing said item :)

Wal-Mart is showing a possible long legged doji (bullish reversal) candle on the daily chart and pretty good support at 50. Daily RSI is 27 and rising. Possibly good for few week swing trade?

Decent technical dudes take...........
http://tinyurl.com/ryfak6

Just window shopping for now.

Nat Assoc of Realtors and Nat Assoc of Homebuilders lobbyists are busy trying to extend the stimulus giveaways
for the real estate sector. Supposedly a home appliance giveaway is scheduled for October. How are they working?

HOUSING

The current home buying incentive program, as it now exists, is expected to cost taxpayers a bit over $15 billion.

Senate Banking Committee Chairman Democrat Chris Dodd and Republican Johnny Isakson are sponsoring a bill that would extend the credit through 2010 and expand it to a $15,000 maximum. In the House, two different bills have been introduced to extend and expand the credit for either 6 or 12 months. NAR and the NAHB organizations are strongly supporting these initiatives.

NAR's own estimate is that only 350,000 of the homes sold under the program would not have been sold without the tax credit. If you now divide the $15.2 billion the program cost by only those 350,000 homes that might not have sold without it and you get a whopping $42,800 per additional home actually sold.

AUTOS
Cash for Clunkers, promoted as an energy savings measure, cost the Fed government about $600 per barrel of oil saved over the first year. Trading in a 15 mpg car for a 25mpg car driven 12,000 miles per year saves 320gal per year per car. 700,000 cars sold under the program saves 5 million gallons per year or 1/4th of one days consumption in the USA. $3 billion cost for the program equals about $600 per gallon. The government might get a bit more kickback from their giveaway as the $4500 is taxable to the auto dealers if they have any taxable income for 2009.

Can't wait for the health care initiative from these bozo's.

NYU - What's up with that!?! Coming to my home city and taking the market down?

http://tinyurl.com/l2d8bc

Watch macd to see if it can break the bearish divergence. If it does this market might melt up some more.

From todays Globe and Mail:

http://tinyurl.com/p6lrlb

Looking like they may have reached maximum altitude. UAUA and AMR selling of hard from todays highs. I have ripped off the seat cushion for use as a flotation device. Out of airlines entirely for now...

haha

A bit about the TULIP Mania.The part about the Sailor is amusing...

tulips became a fad among the rich of Holland, and prices began to mount. Soon even ordinary bulbs were selling for extraordinary prices, and the actually rare bulbs were astronomical. A single Viceroy tulip bulb would sell for 2500 florins a value roughly equivalent to $1,250 in current American dollars, while a rarer Semper Augustus bulb could easily go for twice that. One particularly amusing exchange showed the goods traded for one bulb – the lengthy list includes among other things: a bed, a complete suit of clothes, and a thousand pounds of cheese. At the height of the mania, in what seems a complete loss of sanity, the bulbs were deemed too valuable to risk planting by their (formerly) wealthy purchasers, and it became popular to display the plain ungrown bulbs. In at least one instance the plan for safety backfired when a visiting sailor mistook a tulip bulb for an onion, and proceeded to eat it for breakfast.
The height of the bubble was reached in the winter of 1636-37. Tulip traders were making (and losing) fortunes regularly. A good trader could earn up to 60,000 florins in a month– approximately $61,710 adjusted to current U.S. dollars. With profits like those to be had, nothing local governments could do stopped the frenzy of trading. Then one day in Haarlem a buyer failed to show up and pay for his bulb purchase. The ensuing panic spread across Holland, and within days tulip bulbs were worth only a hundredth of their former prices. The tulip bubble had burst.

Market Internals update at 3:30pmET
- NYSE volume 1.19B shares, about 40% above its three-month average; advancers lead decliners by 4.5:1.
- NASDAQ volume 2.31B shares, about 27% above its three-month average; advancers lead decliners by 2.1:1.
- VIX index +1.75% to just over 23.50

If you track this stats day after day, you can see both volume and magnitude of the intraday move increase. Slow roasting of bear meat moves closer to well done stage. Another interesting sign is a lot of rumors - I don't remember seeing as many of "ABCD moving on rumor of takeover" headlines in quite a while.

The article below is all about the conundrum that is Infrastructure theory contrasted with Infrastructure Practice on the wild side and painful I might add.

http://www.forbes.com/2009/07/13/software-oracle-s...

edit:

Up on further analysis, the author takes a rather irrisponsible attitude toward robustness of SaaS, which is not true in my opinion regarding some vendors like IWEB, which has a superior offering.
I am not saying purchase them, but while risky, they just released a major new product that changes the game for SMB.

http://tinyurl.com/lbbfkr

I wanted to stop buying SRS, and this thought indeed saved me from placing a buy limit order on SRS at $9.5 last night, 50-cents lower than my latest purchase at $10. But buying at $9.05 after hours definitely beats buying at $9.50. :)

I also looked at the 6-month $USD chart and noticed that during its downtrend, it does regularly come back to touch the 50-day MA. Right now $USD is about the furthest away from the 50-day MA is it has been during the past 6 months. So even if the long-term downtrend in $USD stays in tact, the odds are in favor of a sideway or an up motion in $USD until it touches the 50-day MA. While $USD was moving sideways in June, the equities kept falling. Since equities are heavily overbought now, I suspect we will get a decent pullback even if $USD moves sideways (and not necessarily strongly up) for the next few weeks.

After that pullback, one will need to watch closely and decide whether or not to buy some SPY calls (that's what John Hussman did a while ago -- he didn't want to open real long positions but instead bought some index calls so as to have a limited loss in case the uptrend ends), since buying such calls during previous pullbacks was a winning trade.

Today were the seniors, yesterday mostly mid-tiers and royalty companies, Monday the juniors and incipient producers.

The (Sunday)kick-off seminar had interesting overview materials on the sector; Kinross' presentation did too.

I didn't know that Russia's Polyus was up to 1.2M oz/yr, has an expanded relationship with Kinross, and that 75% of its shares are owned by Russia's two richest men. It seems Russia has the 2nd largest gold reserves in the world, and is one of the least explored countries.

SLW's Peter Barnes is super-impressive to listen to, even more so than CEO's of quasi-rivals Franco-nevada and Royal Gold.

There is a lot here worth seeing and listening to, if you want a current feel for the industry and its leaders:

http://events.digitalmedia.telus.com/denvergold/09...

Thanks for posting that Dave. And that's why I listen to Rosenberg...fabulous article. But then he's preaching to the converted here..
s

Dave

Make what you will of the daily charts, but both SLV and SLW have been exhbiting breakout behavior for since busting through their early-June highs a few weeks ago. Perhaps your interpretation of a "breakout" doesn't take into account that silver is trading continuously so, today for instance, much of the breakout move in silver had occured prior to market open (and resulted in a morning gap up).

I'm far from ready to declare this distribution as we are make continuous new highs for this trend. Joe Sixpack is still wholly unaware of the devaluation of the currency in his pocket and the effects of quanititative easing that may not fully appear until a year or two down the road.

In my speculative opinion we could very easily see a parabolic spike in silver at some point in the next year or so. Conditions are ripe and accumulation has been underway for a long time. Quantitative easing is/can be a long drawn out process but eventually people will wake up one day and inflation will whack them with a proverbial 2x4.

First cup of coffee. Market just opened. Sun just has risen. NASDAQ just bounced on the bottom chart on second monitor, UAUA just made double bottom on the third, LVS just made new annual high on fourth. Report on healthcare reform on TV.

http://www.dailypaul.com/node/107252

apparently the needed 290th vote in support of the fed audit has been confirmed for the house bill.

Bought AH at $39.60 as a protection against my long positions.

"Looking like they may have reached maximum altitude. UAUA and AMR selling of hard from todays highs. I have ripped off the seat cushion for use as a flotation device. Out of airlines entirely for now..."

Billy, why do you think that they may have reached "max altitude" ? Both have a very strong daily chart, with uptrending 5-day, 10-day and 50-day moving averages. I am holding UAUA with a stop at 8.97.

There was some weakness in the 2-min chart today, is that what you allude to?

http://www.youtube.com/watch?v=Kg0-a4zlwNM

The song to play when it's over, and you're never going back.

Joe - I still like UAUA and will look to trade it again when/if I find another comfortable entry. What I saw today was that the open moved UAUA up very steadily to 9.63 until about 11:30am when it began to sell off even as the broader market continue to fuel upwards. The selling came with a solid amount of volume, more than I have been accustomed to seeing lately suggesting a distribution of shares. Then I looked at the options setup for Friday. Very heavy open interest on the Sept7.5 and 9 calls but very small open interest on the Sept9 put. Their is actually SUCH heavy call interest for Sept that max-pain is at $6 for Friday (for what its worth).

Seeing general froth is making me more concerned about holding high beta stocks like UAUA - especially over night. I am concerned with further immediate upside potential % wise. (Whereas I felt there was legitimate 20-25% upside when we are at 800 S&P, I'd be utterly shocked if we went 20-25% further here on S&P). And I wouldn't be surprised if this rally ends at some point with a whallop of a down day.

In general, just getting a bit more cautious and wanting to take a step back, transition some of my trading from swing positions held for weeks and entering more trades intraday as we get closer to the final upward capitulation. I'll be keeping an eye on UAUA. If it turns out I got completely shaken on UAUA today, well, guess I'll have to move on to the next trade.

26 bear ETF's in accumulation zone

SSG/FXP in buy zone

5 bull ETF's in distribution zone.

CHINA WILL BE A BIGGER BUBBLE THAN JAPAN

Superb analysis out of SocGen analysts this morning.  Dylan Grice says the Chinese economy has many similarities to the Japanese economy before it imploded in the 90’s.  He cites 8 reasons why the Chinese economy is likely to be an even larger implosion than the Japanese economy:
Studying the lessons from Japan’s lost decade(s) is key for anyone seeking to understand today’s post-bubble world. But a closer reading of Japan’s financial history illuminates today’s China far more. In the early 1980s, on the eve of its financial liberalisation, Japan was the rising power from the East set to overtake the West. Younger and growing rapidly, it was still a decade away from its climactic and catastrophic bubble peak. This is where China is now.
Japan’s deflationary experience since its bubble burst haunts policy makers and investors, who are confronted with a bewildering range of theories explaining what has gone wrong and how a similar scenario can or can’t be avoided.
But the real cause of Japan’s deflation is probably more demographic than debt-related.  If so, maybe we should be more worried about the side-effects of an ongoing stimulus overdose aimed at reviving the dead, rather than fighting a more ordinary bout of flu.
Japan has been the first industrial economy to begin demographic contraction. Indeed, thanks to Deng Xiaoping’s 1979 one child policy, China will soon face the same problem.
But it is unlikely China will suffer the same immediate fate. In fact, further reflection on the similarities between China and Japan leads one to realise that many of the challenges confronting China today have already been faced by Japan, demography being only one.
From the strained currency diplomacy to the accusation of favouring exports over domestic demand, from the Western marvelling at Confucian capitalism to the sense of inevitability about the rising of a great power in the East … all were as true for Japan 30 years ago as they are of China today.
And Japan 30 or so years ago might be a more fruitful analogy altogether. There is a clear historic coincidence of manias and geopolitical shifts. In the 1980s, Japan’s developing financial bubble reflected a shifting of the balance of power in its direction.
But the geopolitical shift towards China now underway dwarfs that seen in Japan in the 1980s, and probably anything yet seen in the history of the modern world. A commensurately seismic mania would lead to excesses beyond all proportion to the periodic bouts of frothiness seen so far.
Japan’s experience also hints at what may be the future catalyst unleashing this frenzy: capital account liberalisation. Financial history is filled with financial liberalisations gone wrong and Japan’s bubble can be traced directly to the removal of controls on international capital flows and banking in the early 1980s. Seeking a larger international role for the renminbi, China is now, albeit tentatively, embarking on a similar path. Full liberalisation, when it occurs, could be the starting gun for the biggest bubble the world has ever seen.

Source: SocGen

Thanks Billy. I hadn't taken max pain into consideration for UAUA. I know the theory behind that, but am short on experience :-) Does the max-pain theory really come into play? That would require major manipulation on I-don't-know who's part. I'd be interested in knowing if this is a common phenomenon.

Hello fight fans, ladies and gentlemen and children of all ages. Yesterday it was proposed by yours truly a battle of the ages between APPL and SLW. A hypothetical investment of $10,000 would be made in the two stocks based on the September 15, 2009 closing rounded off. While no time table has been determined yet for the length of this competition for arguments sake lets say until about until the end of the year. Lets see how it played out on day one

$10,000 invested in APPL stock at a price of $175 yielded a position of = 57 shares

$10,00 invested in SLW stock at a price of $13.00 yielded a position of = 769 shares

DAY ONE 9/16/2009

Results: APPL destroys SLW

APPL traded +6.87 higher and closed at 181.87 = +6.87 x 57 = $391.59

SLW traded +.21 higher and closed at 13.21 = .21 x 769 = $161.49

APPL holds a $230.10 lead over SLW after just one day

The reasoning behind my choosing SLW over AAPL was based on the following purely short term reasoning.

1.The current euphoria over GOLD and the potential for SLW to trade much, much higher in a shorter time frame than AAPL
2.The stock price leverage with SLW having daily ranges of .50 to $1.00 which would generate greater investment profit than would AAPL on both a real dollar and percentage basis.

Of course the downside is also great for SLW in that a failure of gold to continue aggressively moving higher will result in a collapse of the stock and demise.

*Congrats to AAPL

This is simply a play on investing in two different stocks nothing less nothing more. People play different stocks and expect to profit one would hope and in this case it is investing in AAPL vs. SLW.

The move is based on where the stock was purchased not the previous days close for the first day only then based on closing price for subsequent days.

It is far easier and shorter to calculate a price movement versus shares and that gives you what you make or lose in dollars. I find it at least for me more real if someone says I made $1,000 on my $10,000 investment and others such as yourself I gather prefer to say I made 10% on my $10,000 investment.

You are welcome to use percentages but for this example I will use dollar movement and leave you to figure out the percentage.

Well I have to say this PM rally does not look like it's gonna stop anytime soon.
And neither does the daily drop in the US dollar, trading at 76.12 down -0.13.
But I'm not sure the dollar drop is what's driving the move in silver & gold at this point.

Can it be the Fed has lost control over the gold market?
Where is that intervention we all know and love?
What's the plan here?

If these prices hold until morning, I suspect SLW will do well tomorrow and I will have been wrong once more...

NYU & Zero Hedge - Nicely done. Unfortunately the vesselltracker add on to Google Earth kept crashing the program. How long before we can log in and track our children and loved ones on their cellphone on Google Earth?

TOF - Mad Hedge Fund Trader has this to say of MS's new CEO: "Waleed Chama will take over as president of Morgan Stanley International, a more sober banker there never was...". Perhaps the market is not into sober bankers right now?

Someone asked my why am I thinking about short DBRN? Well, it was only that - a thought! A possibility for shorting in the event of any retracement the market might pull on us. Brief anecdotal observations of yesterdays action in a couple of stocks (DBRN & AAPL in particular) tells me that someone is interested in systematically breaking major negative trend lines from 2008. I would not purposefully short a stock (except DRYS and that was a foul up) while the rally continues. Apologies to anyone attempting to short anything I've talked about here but I will not fight the trend. They are "what if" scenario stocks.

However I was amused to see the daytraders go to war against flu stocks yesterday. They are a useful crowd for getting in on a solid short, if and when they bunch together to do the deed. I'd like to learn more about the group mechanics of daytraders linked by the internet. I got out of SVA before it went red on seeing it move in sympathy with NVAX, but I've used up my daytrading privileges for the moment so couldn't short it. C'est la vie.

Finally, Jesse's offers a chart illustrating two potential patterns that gold might be in, with associated price targets. JAG appears to be a pig being abused by management (using 52wk high to dilute shareholders) so I'll look to SLW for an entry. Hopefully a pull back in the market will permit a safer entry shortly.

http://1.bp.blogspot.com/_H2DePAZe2gA/SrEDSrCHAfI/...

Thanks for the lists. Just a plugged in the 100k producers into the RSI app
and 9 are in distribution with 14 more having RSI daily & weekly numbers
>70.