Daily Trading & Social Commentary for Nov. 5

That's impressive action in the UUP chart today (actually for the last 2 weeks).

http://tinyurl.com/ykakztz (UUP @ stockcharts.com)

Thoughts rattling around in my head tonight...

- US markets are about the only global market that has sucked wind this year (Japan is the other); maybe a little catch-up before year-end is due?

- don't underestimate the influence of Buffett betting $26 Billion on the US economy.

or

- US$ strength = Fear ?

.
.
.

time will tell, I guess.

I think railroads are a Peak Oil play from Buffet's standpoint. As oil gets more scarce, so the theory goes, trucks go out of fashion and trains come back in. An electrified rail network can still deliver cargo even if oil imports are completely cut off. At that point, the rail network has some pretty good pricing power. Plus, Buffet is a big fan of owning a moat, and I can't think of anything more moat-like than a trackload of right of ways that will likely never be repeatable again in this country's history.

Note that serious currency issues with the dollar might well act like peak oil from the standpoint of prices and the ability to import oil.

Another possibility is, he is using all his cash before it becomes valueless.

It would be interesting to be a fly on the wall to see just how he managed to get the whole company, and why he chose this moment in time to make his play.

Also here yesterday someone pointed out the possibility that Buffet is buying mineral rights which is similar geographically to right of way. He is a
long-term thinker or that is the rumor anyway.

www.ADVFN.com, see ya in the morning. Happy trading all until we meet again.

I remember following the action when Sante Fe was in play several years ago - maybe 15 or 20 years ago - and the talk was nothing about railcar shipments and had everything to do with the rights-of-way and the incredible amount of real estate owned or controlled by SF at that time. It was envisioned that these R-O-W's would be used to carry fibre for the emerging WWW and that pipelines and utility grids could be routed along rail lines. Fast forward to today and perhaps can see where Warren is headed.

I haven't seen any mention of Buffet and Goldman looking to buy $3 billion in tax credits from Fannie.

http://tinyurl.com/ygadg3p

Comments?

Would also just like to say thanks to Bill for this great resource and all of you for your posts. This is my first post on the site. I've been lurking for a while trying to learn. I appreciate all the charts and links to videos everyone posts. They are helping me get a better understanding of things.

Cheers.

http://ronsen.blogspot.com/2009/11/volatility-expa...

The fact that somebody bought a massive number of UUP November 23 calls before the action yesterday might generate an SEC investigation under normal circumstances...but we're a sheep at the switch.

GLL and DZZ in Accumulation zone

FD: long DZZ

still sitting with a buy limit order at 38.24 (kangaroo tail reversal). Need a little more of a rally to load the wagon...again.

No position.

Below expectation

Good morning.

There are NO Cara 100 Ratings Changes to report at this time.

Released on 11/6/2009 8:30:00 AM For October, 2009

Prior
Nonfarm Payrolls - M/M change -263,000
Unemployment Rate - Level 9.8 %
Average Hourly Earnings - M/M change 0.1 %
Average Workweek - Level 33.0 hrs

Consensus
Nonfarm Payrolls - M/M change -175,000
Unemployment Rate - Level 9.9 %
Average Hourly Earnings - M/M change 0.1
Average Workweek - Level 33.1 hrs

Consensus Range
Nonfarm Payrolls - M/M change -200,000 to -55,000
Unemployment Rate - Level 9.9 % to 10.1
Average Hourly Earnings - M/M change 0.1 % to 0.3 %
Average Workweek - Level 33.0 hrs to 33.1 hrs

Actual
Nonfarm Payrolls - M/M change -190,000
Unemployment Rate - Level 10.2 %
Average Hourly Earnings - M/M change 0.3 %
Average Workweek - Level 33.0 hrs

Highlights
The jobs picture in October worsened as the unemployment rate topped double digits and payroll jobs fell more than expected. Nonfarm payroll employment in October declined 190,000, following a revised decrease of 219,000 in September and a revised contraction of 154,000 in August. The October fall in payroll employment was more negative than the market projection for a 175,000 decrease. September and August revisions were up 91,000 net for the two months (the net declines were smaller). Payroll losses were widespread in both goods-producing and service-providing sectors but declines were sharper in the goods-producing sector.

Turning to the household survey, the ranks of the unemployed continued to rise as the civilian unemployment rate worsened to 10.2percent from 9.8 percent in September. The consensus had expected a 9.9 percent rate. The October rate is the highest since the same rate for April 1983.

Wage inflation firmed as average hourly earnings in October rose 0.3 percent, following a 0.1 percent uptick the month before. The market had forecast a 0.1 percent advance. The average workweek was steady at 33.0 in October, falling short of the market forecast for 33.1 hours.

The bottom line is that the labor market is still in recession even though overall economic growth is positive. The jump in unemployment is going to keep consumers cautious and economic growth sluggish.

BIll will this be another great sucking sound (you may have referred to earler)as most investors circle the bowl...and those trusting brave souls that remain circle the wagons...except these wagons are missing hardware needed to keep the weels on.

What recourse would, say, teachers, firefighters, etc., have if pensions were cut... In all honesty, I don't see how the States will have the money to pay in the years to come.. I, along with so many others here, have believed this was a direct government supported buying program to keep the ' markets ' going higher to increase the tax base.

U.S. employers cut a deeper-than-expected 190,000 jobs in October, government data showed on Friday, driving the unemployment rate to 10.2 percent, the highest in 26-1/2 years.

The Labor Department said the unemployment rate was the highest since April 1983. It revised job losses for August and September to show 91,000 fewer jobs lost than previously reported.

Analysts polled by Reuters had expected payrolls to drop by 175,000 and the jobless rate to edge up to 9.9 percent from 9.8 percent in September.

The labor market is being watched for signs whether the economic recovery that started in the third quarter can be sustained without government support. The economy grew at a 3.5 percent annualized rate in the July-September period, probably ending the most painful U.S. recession in 70 years.

Payrolls have declined for 22 consecutive months now, throwing 7.3 million people out of work since December 2007, when the recession started.

However, the pace of layoffs has slowed sharply from early this year, when nearly three-quarters of a million jobs were lost in January. In October, job losses were across almost all sectors, with education and health services and professional and business services bucking the trend.

Manufacturing employment fell 61,000 last month, while construction industries payrolls dropped 62,000.

The service-providing sector cut 61,000 workers in October and goods-producing industries slashed 129,000 positions.

Education and health services added 45,000 jobs, while government employment was flat.

on HP for the next little while, along with INTC, AA and GE ( per upgrade this am. )... Windows 7 is coming out and CSCO is corporate oriented, which still needs to produce ever faster.. Maybe EMC will be a good watch..

http://broadcast.ino.com/education/rimm1105/

showed me how pivot points interact with tops to give downside targets. never saw that before

increased substantially.. As a point of fact, a very good friend of mine was Informed he was ' too old ' ( age 58, a brick mason ) to be rehired by THE largest brick and concrete contractor in North Carolina ( he was laid off 9 months ago ).. I wonder if this will be a new tactic to be used by the physical work related industries...? This man worked with the company since he was 19.... its a shame, because he is in very good health and knows his craft... and has a family to worry about...

Yes, CNBC will remind us this is a lagging indicator and this number is growing.

The jobless rate will continue to go up because of extended 20-week unemployement benifit.

Yesterday, the nonfarm productivitive jumped to 9.5%. The companies are cutting costs by reduced work force, squeeze their employees in order to increase the bottom line for their big bonuses.

Many employees are not happy with their work place but it is very difficult to change job now.

I think it will maybe, just possibly, very likely, with my finger in the air, return to significant decline...but again we all need to feel that the risk are significant and that Tiny Tim, and others will bail out the world with another save across. JMO and nothing more...I am trying my best to read the tea leaves.

AMZN - Upgraded at Bernstein to Outperform. $160 price target. Estimates still appear to be too conservative.

RIMM - numbers lowered at UBS. Shares of RIMM now seen reaching $67. Estimates also cut, to reflect lower consumer demand. Neutral rating.

SBUX - price target boosted at Barclays to $18 from $15 on impressive 4Q results. 2010 EPS estimate increased by 10 cents to $1.00. Maintain Equal Weight rating.

Sorry to pick on you CNBC, but I really think you buys/gals ought to win an award or something, feather in your cap, for your biting humor and constant discourse with the world; lord knows we need you and your unbiased reporting, especially that we have almost no other news source to turn to...unless we consider using our own common sense, which is way underated, at least by you any way.

Interesting article. Every area of the economy is suffering.

My oldest son works for Hendrix Motor Sports in Charlotte, NC building race cars for Jimmy Johnson (NASCAR). His wife works for a company that sells race track souvenirs. We saw them (grandchild birthday) this past weekend, and even though a Hendrix car is a serious contender for the Championship again this year, my son's wife reports large layoffs in her company. There are just very few fans coming out to the tracks this year and those that do, don't spend money. My son says many teams are or will be closing soon due to lack of corporate sponsors.

Where I live in rural NC, the town where I shop (Siler City) has lost the fabric mill, the Lowes food, the Peobles, several fast food and more formal restaurants, two auto dealerships and many small retail businesses. Indeed the cost of doing business is exceeding the ability of people to do so. The main income in this community is from the farm, teaching school, delivering the mail, State Highway Patrol, unemployment checks, social security, gas stations and the chicken processing plant (still going). Since almost all of these are NOT large incomes, most of any excess flows off to Raleigh or DC in taxes and not back into the community. I think we will see the end of many small towns. People here agree, so far, the stimulus sucks -- and want DC to keep the change.

With 10.2% unemployment rate, much higher than expected, all Dow, SP500 and Nasdaq are green at this moment.

Two day ago Bill wrote "As we have pointed out several times before, the reaction to news is the key, not the actual news itself."

I can see it clearly now. And once again, trade with "what you see, not what you think".

The initial reaction to the news was intensely bearish. Oil sold off really hard, so did SPX. And then someone came in and bought a whole lot of pretty much everything.

Right now I am somewhat upset with myself by not taking my gains when I had them and instead waiting to see how things transpired during today's market. Its called being greedy, and in this market, which appears subject to astonishing bursts of buying, it's not a smart idea, especially when short.

CNBC is at it again...boy they think we are dull...could they be correct...does their business model even allow this?

Same here, I should get out ERY this morning for small profit instead of losing money now. My UNG Dec 8 call gets hit. UNG is really weak today.

Bought some at $11.80

Maybe, but it is moving lower.

Good moved, I follow you. I'm in Jan 115 put @ 9.45. Thanks

Deep ITM puts is the way to go given the volatility. 10.2% is an ugly number and makes me move to cash/go short.

spoke too soon...out of the business of predicting the esoterics...not profitable anyway.

Not a prediction...lower High however...may be good for my Gold short...if we do take a down trek perhaps that new car, eh?

the big boys got 'em both ways this AM. LOL

OIL@77.24, GOLD@1092 to pull market going south.

On both the SPX and NDX ... a bit early, but this could be a good time to re-enter shorts.

I'm also seeing bullish divergences on the short ETFs (60 min charts).

I'm using TZA. I'm wrong if the necklines on the major indexes are breached to the upside with authority.

to that point in time....

pulled all the buy orders. Gotta go to work plus the favorable EOM period ending.

No dought about stepping away (turning them off)if needed; personally I may compain but nonetheless, having watched CNBC since 1995, I still use them now for an informed on my part contrarian type concept informer. Such is the tactics on some days and thusly I row the boat hoping not to encounter disruptive to my purposes waves.

MCD@62.1, it jumps 3 bucks in 3 days. The RSI7, 14 and 21 are 83, 75, 70 respectively (I use prophet.net). The high unemployment rate should hurt retail and restaurants but MCD adds .60. Is it because people do not eat at restaurants and going to fast food?

I was in Jan 65 put at $4.25.

I was a big fan in the 90s, a little less so recently, but there's no question I'd miss it if it wasn't there. Perhaps F1 exemplified the excesses of the earlier part of this decade; in particular leading to criticisms that the richest teams were gaining unfair advantage with the technology they could buy - and triggering many questionable attempts to rein in the technology race with rules.

I'd like to think this isn't the end of F1; just that the pendulum is swinging. And if it swings back to racing that is less about how much money was spent on the car and more about the driver, hooray! (I'm not dissing the technology, I'm just applauding great driving.) And I'll be all the more delighted if F1 takes it down a few notches in terms of elitism - because I'd love to take my son to a race without having it consume half the year's vacation budget!

Anyway, maybe more to Bill's point - I have to believe that the likes of Toyota think about F1 participation in terms of ROI, and being a mid-pack runner in F1 isn't likely to sell a lot of Camrys. But, there'll always be someone to step in and fill the void - plenty ready to come forward with a $50M budget once those with $200M budgets stop hogging the limelight. Bernie Ecclestone will just have to reduce his club fees the same way my local private golf course did.

Someone was watching OPTT a while ago, interesting little stock... fresh news:

Friday, November 06, 2009 11:35:45 AM
Ocean Power Technologies Inc Gets A$66.5M grant from Australian govt for 19MW wave power project off the coast of Victoria, Australia

I listened to an interesting interview with Louise Yamada where she says she thinks this period is just like 1938. I've been trying to determine if this period is a parallel to 1938, 1975, or 1983 and she's clearly in the 38 camp. In 1938, the market ran up about 60% from its lows at the end of March until mid November, which is almost identical in returns and time frame as this one (if 1101 was the high). It then went down 25% to April of the following year (about 5 months), then saw another 6 month rally which attempted to take out the previous highs from the prior year, only to fall back near its 1938 lows about 7 months later.

If this plays out again, we could see 840 to 880ish as the lows in March before another rally.

FD:
I am long SPY $116 March puts, but mostly in cash now.

"After digging around and sifting through the things both said and not said, I have come to the conclusion that what we are seeing are the likely effects of a rescue operation. By this I mean a large injection of stabilizing cash to one or more parties, possibly related to the recent large bankruptcies."

"Today's 200 point Dow spree was said to be due to favorable unemployment data and excellent productivity gains but if you were watching the overnight futures you noticed that the lift-off actually began at 3:00 a.m. As a trader, I am quite familiar with this pattern. When large futures gains are recorded beginning at 3:00 you can nearly always count on those gains holding through the day."

"The Soviets simply dictated everything from prices to false production figures until the system collapsed. The tools of persuasion and market interference at the employ of modern central banks are far more sophisticated than anything the Soviets ever dreamt of."

"Are the markets larger than the banks? I'd like to think so, but I am growing more and more confident that the answer is "no" and that the distorting effects of untold trillions of fiat money can elevate prices for long enough to change people's minds."

http://www.chrismartenson.com/blog/market-recap-ri...

I have a 14 year old.... all he and his friends have been talking about the last 2weeks, Call of Duty: Modern warfare2

What's keeping Activision afloat are two things -- lowered expectations and Tuesday's release of Call of Duty: Modern Warfare 2, which should quickly win the title of biggest opening week for an entertainment release in history. According to BoxOfficeMojo.com, Harry Potter and the Half-Blood Prince holds the global movie box-office record with a $394 million opening week. Counting pre-orders, Modern Warfare 2 could crush that number within a couple of days.

"The stock market has had a history this year of shrugging off weak employment report after weak employment report because the expectation is that we will see further rounds of fiscal stimulus, so it’s hard to say what equity investors will do with this latest piece of data. We find it hard to believe that nurturing a policy that risks taking the government debt-to-GDP ratio above 100% in the next three-to-four years is deserving of the P/E multiples currently underpinning equity market valuation. It should not be lost on anyone that the S&P 500 has managed to rally over 60% from a low during which payrolls have declined 2.8 million, and that this is without precedent. Let’s define normal as the norm of prior 60% rallies and what’s normal is that by now the economy is not only standing on its own two feet but has already generated over two million net new jobs."

I think the Fed has really put conviction in the short dollar trade. Today's weak report added confidence that 0% rates will stay in place and that the dollar will not be supported.

http://www.chartsandcoffee.com/2009/11/emboldening...

there is a company called ' xoma ', that is doing some wonderful things with their drug development platform... The management is good, and debt levels are in check.. I am buying as the opportunities present themselves... Needless to say, research is one's option, and opinions will clash... For me, this is not a trade, as it is not a one trick pony... I have a LT position established months ago.. I have traded this over the year's, as I did with vicl, incy, cvm, isis, etc... One could wait for better entry levels... But I am looking for novelty and growth potential..

I've been called different names... but this is new (VeryBigGrin)

Potential, team... The main bulk of debt was settled (with Goldman)...They have consistent rev.'s... I would think it can possibly be bought 15 % cheaper... I look at LT charts as opportunities ( ie: hgsi, dndn, vnda, isis, etc ).. As I said, opinions (thank goodness for them! ), will clash, but vicl ( $ 1.80 ), incy ( $ 3.20 ), cvm ( .49 ), exel ( $ 4.70 )did well off crashed charts. There are a ton of bio's out there... I try to be rather picky....

ALOHA !!

Bill, yes , the circuit ... The movers and shakers can make you or break you no matter what. Thanks for the tip.

POLITICAL FLUFF
When I review management and directors I look for a proven track record and if I can find a company that has upper management slots filled with proven producers from former success stories then I take note. What I learned from my Father being in the oil business for 40 years is that a lot of these guys with this huge experience retire or move out of the conglomerate to start their own businesses. It pays to follow these guys. I mean it makes sense because that is what I did when my partner and I started Delta Technology. We got tired of the peanuts we were getting while we watched the fruits of our expertise drive up every morning in a brand new Mercedes Benz 450SL. Then after we looked around the office at the end of the day at 7pm we were the only ones still sitting there going over blueprints and writing up management reports. Apparently its the same scenario at bigger companies like Chevron and Shell. At least I have seen that in the past just looking at management and director bios.

Invariably though there is this thing I call "political fluff". It exists in every country in the World but more so in the Third World arena, especially South America and Africa. You can spot it a mile away and in the case of AQM its a sore thumb.

When I see a 28 year old playboy attorney listed as the founder of a copper mine that starts production in 2009 that qualifies as "political fluff"! I think I saw this guy on a Miami Vice episode once ... Anybody else here know any 28 year old attorneys who found a copper mine using their vast geological expertise from their law degree? Hummmm!! Usually when an attorney finds a mine he did not "find it" he more than likely "stole it"! Believe me I know some New York City attorneys that have operated with that "business model" for decades! I still see their name tied to some very sleazy financing deals, just add some political juice and you're in like bloody Flynn!!

Then I see one of his cohorts listed as CFO from the same company who also looks like she's a 20 something ... BINGO! Whose politically connected kids are these? Now I am not saying they are incompetent, because I do not know them at all or their performance, but it reeks of "political fluff"! Oh yes, when operating in these countries it is ESSENTIAL to have someone on your payroll who "speaka la idoma" or to be more precise "el lenguaje del dinero"! I have personally been involved in a company where the "government shareholders" saved the company from a hostile foreign bank. If the company has BIG political ties then chances are they won't have any banking or political issues to contend with so long as those "government shareholders" are very happy campers.

Does anyone doubt there are some political payoffs going on at Russoro-RML. The only way Russoro would ever have trouble is if the Chavez Gang was ousted by some ANTI-CHAVEZ con ANTI-RUSSIAN y PRO-CIA politicos. Every company has to have a "payoff and bribes" department! Probably none bigger than the USA! As a reminder right out of college Chelsea Clinton got picked up by a DC firm starting out at $240,000!!! Whose kid is she? Hummmmm??? What do you think that company bought "talent" or "connections"?

YOU GOTTA PAY TO PLAY!

The S&P has now retraced 50% of its losses from 1100 on Oct 19 to 1030 earlier this month.

"The American Bankers Association is now pushing Congress to give a new systemic risk regulator — either the Federal Reserve or some panel of regulators — the power to override accounting standards.

The view of the bankers is that the financial crisis did not stem from the fact that the banks made lots of bad loans and invested in dubious securities; it was caused by accounting rules that required disclosure when the losses began to mount.”

http://www.nytimes.com/2009/11/06/business/06norri...

TN_blogger,

http://tiny.cc/1JegW

This is the most recent video interview I have seen of her opinions.

Short article on the 1938 - 39 rally and subsequent correction with a good chart of the DJIA

http://tinyurl.com/yd7auqt

ALOHA !!

Wow ... I just posted this:

"No nation need fear at any time to have less money than it needs."
From his book the Theory Of Money and Credit (1940)

The global governments and banks will print outlandish sums and break every law ever written with impunity to stay in power!

What's next "NON-NON-NON-GAAP"?

Credibility is shrinking by the nano-second while gargantuan liabilities are growing by the nano-second!

I see a buying spike of 500,000 at 1:50pm. Was that you David? ;)

May the trade winds be with you.

Yamada was trained by Alan Shaw who started Smith Barney's Technical Research department for Smith Barney. Shaw was an excellent technician and Yamada a great student. Yamada became the Head of Technical Research for Smith Barney when Shaw retired due to health reasons.

If you can find any of their old or new research I would read it as it is insightful, but mostly for long term trends rather than for short term trading.

ALOHA !!

David posted - "Looks like they are still serious about pumping the economy with phony money, and this is not the environment where $USD can rise and stay above its 50-day MA."

The second leg top for the USDX was called in Q42008 by the US Withholding Tax Revenue charts of Matt Trivisonno. Which are still down thanks to the arrogance of Karl Denninger.

I connected the tops with the USDX charts, which I posted here back then, which is when I made major moves out of the USD and into CHF and AUD and into AU and AG coinciding with moves into the ASX and SLR and SRL where I still am.

I agree the USD looks like Geithner has Brewers Droop ... its a WEAK DOLLAR POLICY no doubt! Was there ever any doubt? Come on ... this is the "human condition" guys. It goes back before Cleopatra! Now we have a monetary system based on it! BRILLIANT!

Go here to get a 60 page booklet in PDF by Alan Shaw. Requires registration.

https://www.lbrgroup.com/index.asp?page=Booklet

for no loss but just day trading fun. :) Looks like the bulls do want to take the indexes above their intra-day triple top today...

Markets opened higher on Thursday as a strong reading on productivity and an easing in jobless claims helped cheer investors. Will stocks continue to rise from this point? Steve Hochberg, chief market analyst at Elliott Wave International, shared his market outlook.

“This has been a bear-market rally,” Hochberg told CNBC.

“It’s been a great rally in terms of percentage gain over a short period of time, but everything we look at in terms of the internals of the market suggests that it’s just a bear-market rally.”

Hochberg said the number of advancing shares versus declining shares has been “contracting on the way up” and the advancing volume on the NYSE has been in a “typical bear market profile”—contracting as the rally extended.

Hochberg said that another important factor is market sentiment.

“Back at the lows in March, you had 2 percent stock bulls,” he said.

“Now we have a rally and we’ve recently had 91 percent stock bulls, which coincided with the closing high on October 19 on the S&P. This is typical of bear market rallies and now we’ve turned over.”

If you are talking about mid west America or some other place where salaries and benefits of public workers are on par with the private sector, fine. That is not the case in lower New York State and not the case nationally with respect to federal employees, including teachers and cops. I am saying that, generally speaking, public sector salaries and benefits have gone way past what the private sector gets, past what is reasonable, past what the taxpayer and our children can afford. Many in this country are becoming more and more aware of the problem.

Someone posted here earlier about a 75% guaranteed pension for police officers, apparently age independent. Is that excessive, while the private worker is dependent on market forces affecting his 401-k? Your conclusion is ‘yes, he is risking his life’. So is the cabbie in Gary, Indiana, making 5% of the salary and benefits the cop is making. Perhaps the police officer was paid a reasonably good salary and benefits during his career and the pension can be reduced. I’m saying that there is some amount that is too much. Teachers here in lower New York get large salary, benefits and pensions. What do you think of 80 - 100k a year, with summers off?
Teachers are the largest lobbying group at the NYS government level. What do you think that they are lobbing for? To make sure that our legislature knows how passionate they are for teaching? No, it is to make sure that they continually get increased salary and benefits.

As to passion for the job, and how money relates to it I will tell you that money does not ensure passion or competence. The correct comparison is not 'low paid cops and high paid bankers and athletes'. We know that athlete and banker salaries do not equate. They have no place in any comparison here. The correct comparison is public teacher’s verses private engineers, anything with a similar education requirement. Then look at the salaries and benefits of each.

As to the “mediocrity we currently have in our educational system”, I say that we have it at the same time that we have relatively high salaries. So the high salaries have not motivated the person to do the job more competently.

Give us the solution. I say that this is an entitlement that the public cannot afford, an entitlement that ultimately will break the backs of our children, the ones you want to see succeed. The salaries and benefits enjoyed by public workers cannot continue to be this far out of step with the private sector, with the ability of the public to pay. Private salaries are periodically ‘reset’ lower . I don’t see it happen in the public sector. How would you fund ever increasing public employee benefits? The states are broke now. Sell more bonds to china?

I see that S&P and Dow turned negative, and it feels like there is really no upward momentum today. So instead of waiting for TZA to hit my but stop at $13.10, I picked up some right away at $13.05.

Consumer credit fell by $14.8 billion to $2.46 trillion in September, down 4.7% compared with a year ago.

Credit balances had never fallen eight months in a row before in the 66-year history of the data.

Negative job growth and contracting credit; now that is a formula for growth. Anyone notice that bankruptcies are marching higher.

http://www.federalreserve.gov/releases/g19/Current/

So at end of day today, we see Gold +8, Silver -0.025, oil -2.00, and the SPX is positive at +3.00. Now normally a gold day of +8 would cause silver to get all excited and spike perhaps +0.20 or even more, but except for the brief move in the morning, silver has languished in negative territory all day long. Likewise, what's with oil going down -2.00 when gold is up +8?

These divergences mean something. The silver chart looks more and more like the right shoulder to an H&S pattern. While gold continues ever higher, oil printed a lower high, and is on its way to printing a lower low as well.

People still seem risk averse to me. Its not showing in the VIX or xly:xlp, but it sure is showing in slv:gld and especially in uso:gld. Short oil long gold means "recovery losing steam, financial crisis is deepening." And yet SPX rallies?

Can it be the interventionists are leaving gold alone, to focus their energies on SPX? Perhaps there really is a "panda put" on gold prices, and TPTB know it's futile to intervene, knowing there will always be a bid in there somewhere, one of those big newly developing countries (China, India) eager to get some of the yellow metal.

Just some thoughts at end of day.

I closed my short oil trade, probably too early, but I'm going to operate under the billy ball premise at this point and be happy with my single.

Released on 11/6/2009 3:00:00 PM For September, 2009
Consumer Credit - M/M change

Prior $-12.0 B
Consensus $-10.0 B
Consensus Range $-20.0 B to $-6.0 B
Actual $-14.8 B

Highlights
Between consumers sticking their money into savings and banks cutting back on loans, consumer credit continues to tighten and dramatically. Consumer credit outstanding fell $14.8 billion in September to extend a long run of declines. Revolving credit, mostly credit cards, fell $9.9 billion with non-revolving, mostly car loans, down $4.9 billion. What little good news there may be is that the rate of contraction is easing as consumer credit contracted at a 6.1 percent pace in the third quarter vs. 6.6 percent in the second quarter.

Market Consensus Before Announcement
Consumer credit outstanding has been showing signs of ill health as consumer credit outstanding contracted a steep $12.0 billion in August after a giant $19.0 billion drop in July. Revolving credit outstanding fell $9.9 billion, following a $2.4 billion decline in July. Non-revolving credit got support from cash-for-clunker sales, helping to limit the decrease in August to only $2.1 billion—much less severe than July's $16.6 billion contraction. Looking ahead, September is likely to be a large negative as non-revolving credit will take a hit from the expiration of cash-for-clunkers in August.

Clip from 5 nov 3min discussion with Louise Yamada see video ,bottom third of page if interested.

http://tinyurl.com/yjgqtm3

You may notice a letter from your credit card company in the mail.

Until Febrary 2010, the credit card companies have lots of time to 'inform consumers' that they are raising their interest rates dramatically. Don't be surprised to see up to 30% as your new interest rate. All in time for Christmas. All in time to 'inform us' before the new congressional bill takes effect stopping them from raising our rates.

Could be one big reason consumer debt is down! What's your choice? When you get the letter, call your card company and tell them you wish to OPT OUT of the increase. Which means your card will be frozen. You will have the option to pay it off and keep it open with a zero balance (for the foreseeable future) or transfer to another lower balance card. As long as you get one that guarantees your rate beyond February 2010 that is.

Note: don't close the card as that lowers your available credit. More posts on how to work the credit system: www.netcredit.blogspot.com

Happy hunting!

Wall Street Journal has some concise info about what is in the proposed Health Care Bill.

All I can say is: Young or old, we are sooooo screwed! Read it and weep. ng.

"What the Pelosi Health-Care Bill Really Says
Here are some important passages in the 2,000 page legislation."
http://tinyurl.com/ycsa2gf
spot