Trading Desk Blog for Oct 11, 2010 [See post-close report]

The IMF warned that "Conditions in the global financial system now have the potential of jumping from benign to crisis mode very rapidly."

It will come as no surprise that we agree, but at least for now, investors evidently could not care less.

http://tinyurl.com/2d7atyb

The trade feels scary but the stops hold so far. The trade is starting to work today IMHO.

Dr S - "Well, firstly, I'm not in the reflation camp. I believe the shoe will fall in housing and real estate in general but if reflation were to be implemented in housing all that would be required is targeted gov't incentives like a $9,000+ tax credit to new homebuyers (sound familiar?) and a zero down payment at 0% for 50 years using ye ol' Fan/Fred paradigm."

Housing back in 2005-2006 was high because the popular vision was that home prices always increase, and so a large number of people were willing to take on absurd debt levels to get on the train "while they still could." Now, people are well aware that home prices don't always go up. The innocence is gone, the bloom is off the rose, and perhaps that is the real reason why the bubble never strikes the same place twice in a row. The biggest problem is the loss of Confidence. It takes over-confidence to overpay. I'm thinking that's not likely to happen in housing for quite some time.

Plus, the move-up buyer is underwater, the first-time buyer doesn't have a job, and the already-been-foreclosed-upon buyer has really crappy credit. Who exactly would be buying?

Perhaps - if Fan and Fred were to convert each and every REO they had, or will get in the next few years into rentals, that might do it. A policy statement saying they were taking those homes off the market, let's say for five to ten years, and renting them out (subcontracting with some management company to do it) might be effective. If the supply overhang isn't there anymore, it might make a reflation possible since the popular perception would be one of scarcity rather than oversupply.

It would kill the existing rental market, of course, with all that government supply, and all the folks who bought "investment" foreclosures hoping to rent would be quite upset, but it might reflate home prices a bit. And it might be doable without Congressional approval.

It will be interesting to see what happens.

No one believes in a bull market when it starts. No one. And right now, no one believes one has started. What better time to jump start the next bull?

2nd_ave - "No one believes in a bull market when it starts. No one. And right now, no one believes one has started. "

This is a great example of the use of a logical fallacy. Let me turn it around and see if the statement still provides insight.

Does a bull market start every time nobody believes that one has started?

Dave- I'm not one to put much stock in either logic or logical fallacies. I'm only interested in how the market might manage to frustrate the majority of traders. And if it takes a logical fallacy to do it, I don't discount that possibility.

Hi All - Catching a nice ride today on this dually listed company. Uranium deal with pounds under permitting. Management is decent but look for it to be hammered back to reality when the rational Canadians take gains tomorrow. Happy Trading

equities, dollar and gold all going up. I wish I knew what it meant. It least the long UUP and short SLW part of my trade works fine so far.

Could it mean economics is shifting from pseudoscience closer to empiric science?

http://www.marketwatch.com/story/nobel-for-explain...

when (how soon) will it all come tumbling down?
http://kunstler.com/blog/2010/10/bank-shot.html#more paste > fraud absolutely everywhere in our banking system.

The problems are too widespread for the authorities to pretend they don’t exist, and there is no obvious way to put this Humpty Dumpty back together. here...
http://www.nakedcapitalism.com/2010/10/4closurefra...

the collusion of gov't and business.

"there is no obvious way to put this Humpty Dumpty back together."

I guess I will take the easy and say that there are certain "rules of law" that are immutable and even transcendent like a house that is divided against itself sets/sits precariously.

you guys may both be right. who's to say that just because the sentiment indicator is positive then people believe its a new bull market? i think we can agree that most people in the market are short term traders/investors, right? i mean, that's why there is such a strong belief that long term buy and hold is dead. so maybe it's just that people are all assuming we will be in this big trading range and that the positive sentiment comes from traders looking to game the next 5% or so.

a bull market would probably still be able to get those positive sentiment people off the bull train because they think it's this trading range and they will be thinking that they should just take gains when they have them and that they can buy back at lower prices. so perhaps it is bullish out there, but only in the short term. perhaps people don't really truly trust that this is a bull market but rather are trying to trade their way to prosperity instead of hold their way to it?

TOF - "who's to say that just because the sentiment indicator is positive then people believe its a new bull market?"

Let's use two tools here to see what most likely is the truth here:

* Look at the site itself. The question they ask is, "are you bullish, bearish or neutral on the stock market for the next six months." It's a simple question.
* Use Occam's razor. The simplest explanation is most likely correct. Bullish probably means bullish.

Taking the two together, I think its much more likely than not that the folks who answered "bullish" were in fact bullish. Certainly there's a chance you could be right, but I feel its a much less likely outcome.

Heck, they might even be right.

Bull - If you compare the price of the S&P 500 index relative to current year's earnings, which is a pretty common fundamental valuation metric, then you can make the argument that the market is cheap. If you set opinion aside and just look at the numbers, you have to admit that the "fundamentals" of this valuation metric don't suggest that the market is overvalued. Maybe it was the drop back in July/August that was the wrong move?

I'd tend to agree that the start of any (bull/bear) shift is not easily recognized at it's origin; yet, there somehow doesn't seem enough underlying fundamentals to support one? Too many lingering problems in the US and world economy.

Go to most blogs, people mention deflation vs. inflation; upcoming U.S. mid-term elections; currency wars; China; oil and PMs.

To me it's that central banks are doing the opposite of what was done in the 1930s; which is to add liquidity; which means they must fear a) lingering recession, a double-dip recession, or b) worse. Unemployment has been high for a long time, housing is shaky; one must be selective to find growth in Europe (which basically means Germany); I don't translate that as an overall bullish sentiment[?]; ie.

I'd like to get bullish, but right now I am in the camp that this market is propped up.

Dave- I don't understand why you're trying so hard to pin me down on this. You know my style, right? It's pretty much all intuitive. On top of that, my level of trust in any data/sentiment point culled from media sources is quite low. So all I'm saying is that in my opinion (a) there are still too many bears out there, and (b) if I were the Market my take on Maximum Frustration right now would be to rocket the indexes higher this week on earnings releases by a few major players in the technology/banking sectors. If my goal is to take it up to 1200/12000, I have to start somewhere- why not here and now?

In fact, I plan to reposition the buy-and-hold half of the portfolio in FSRBX/FSELX at the close.

"the move-up buyer is underwater, the first-time buyer doesn't have a job, and the already-been-foreclosed-upon buyer has really crappy credit. Who exactly would be buying?"

I have been saying that to anyone who wants to listen... had dinner with a professor and his wife from a well respected regional university... they plan on buying a home 21% off the original ask and selling (for a profit) in five years with the notion the market should be "fine by then"... have to agree Mr. fairtex, anyone who wanted to buy bought five years ago... not many buyers left imo

Scott and Dave -

The question shouldn't be who's buying but rather at what price. As I told my neighbors who are both professors (MD & PhD) now in the market for an upgrade, I will be buying from them in a few years at LESS than half of what they intend to pay right now. The reply: You can never time the bottom.

2nd, if you look at the AAII chart closely, peak in AAII precedes peak in equities by 2-4 weeks. This is why I was still bullish in early to mid Sept when AAII spiked first time, but I'm bearish now, 3-4 weeks later. I posted about it here in mid Sept. Now, since we got a second peak in AAII, I'm more worried, as it resembles January 2010 situation. However, end of July 2009 looked similarly and we had only a modest sell off.

The most worrisome aspect of AAII right now is its 4-week moving average. It's highest since May 2008 and exceeded all peaks in 2008 and 2009.
In summary, I'm bullish long term but very cautious short term.

The additional thing is rising dollar, just like Bill mentioned recently. It's doing OK last couple of days especially considering it was falling vertically prior to that. I hope it's not a bearish flag though.

ALOHA!!

Go to most blogs, people mention deflation vs. inflation; upcoming U.S. mid-term elections; currency wars; China; oil and PMs.

It seems we are all focused on QE2 or the DvsI debate, the elections are coming, etc ... etc .. What is missing is the same old issues that have not gone away. That would be global sovereign debt, the EU, USA(states), Australia, Switzerland, UK and the has-beens of Greece and the other PIIGS and many others who sooth sovereign deficits with debt(both internal and external). It seems far too few people consider "counterparty risk" any more in terms of derivatives as if TARP and BASEL III cured the World's monetary derivative risks for eternity. We are all sitting here thinking the days of AIG taxpayer rescues are behind us. I do not believe we are cured of anything with regards to debt, especially sovereign debt. Truly it was not that long ago that the Euro was being pronounced DOA, but a FX rally somehow eases our collective monetary Stockholm Syndrome consciousness. Another sovereign debt issue could trump a QE2 and send the USD on a rally along with gold. That is what happened the last time the Euro was DOA. Anyone remember that? Is the World cured of toxic DEBT? Certainly the US Treasury shows absolutely no signs of reversing the daily accumulation of mega debt. The clock is still ticking ... Another ticking time bomb is the Peso, not only the US one but the Mexican one. The last time that bomb went off Clinton ordered a USD rescue via you know who ... only it was Greenspan then.

Here is a reminder of how fast things happened and who did what ...
A week of intense currency crisis stabilized some time after the US President Clinton, in concert with international organizations, granted a loan to the Mexican government.

Loans and guarantees to Mexico totaled almost $50 billion, with the following contributions:

* The United States arranged currency swaps and loan guarantees with a $20 billion total value.
* The IMF promised an 18 month Stand-by Credit Agreement of around US $17.7 billion.
* The Bank for International Settlements offered a $10 billion line of credit.
* The Bank of Canada offered short term swaps with a US dollar value of around one billion.

The Mexican "bailout" attracted criticism in Congress and the press for the central role of the former Co-Chairman of Goldman Sachs, U.S. Treasury Secretary Robert Rubin. Rubin used a Treasury Department account under his personal control to distribute $20 billion to bail out Mexican bonds, of which Goldman was a key holder. In late 1995, " newly installed President Ernesto Zedillo said he needed the cash to pay off bonds held by Citibank and Goldman Sachs, lest the New World Order come crashing down around the ears of its panicked acolytes." According to Hannibal Travis, Associate Professor of Law at Florida International University College of Law, the "former manager of $5 billion in Mexican investments at Goldman Sachs became U.S. Secretary of the Treasury and lobbied for legislation that forced U.S. taxpayers to contribute in excess of $20 billion to bail out investors in Mexican securities, in a form of 'corporate socialism'".

LINK: http://en.wikipedia.org/wiki/1994_economic_crisis_...

HOLY COW ... look at all the "counterparties" ... What a coincidence that they were the same ones in 2008 and 2009 and in the EU in 2010. Hummmm??? The Mexican Peso crash was in 1994. Nah ... it'll never happen again ... we're smarter this time! Besides the Mexican government is so much more stable now than in 1994.

Standard & Poor’s in December cut Mexico’s foreign-currency debt rating to BBB, the second-lowest investment grade, from BBB+, with a stable outlook, saying the government failed to broaden the tax base significantly. Fitch Ratings downgraded the country in November. Moody’s rates Mexico at Baa1, the third- lowest investment grade rating.

Yeah ... IT ALL WORKS UNTIL THE NEXT CRISIS! AND THE NEXT!! AND THE NEXT!!! I thought the Federal Reserve Act(1912) was suppose to cure all this monetary instability ...

HEADS UP ...

Thanks for the link, a good read.

Re: 'will they goose it higher'?
I've given up trying to guess that one, BH; looking for the clear direction, but I'm a blind man in this game.

There was an interesting bounce higher off the 200-period MA on the 5-minute $SPX chart about an hour ago.

Thing's got more oscillations than most lap dancers.

2nd - "I don't understand why you're trying so hard to pin me down on this."

I'm tired of the mis/disinformation that has been floating around in the mainstream media for years that encourages folks to buy or sell stocks based on misleading, planted, or just plain wrong information. "I threw a dart at a dartboard, it stuck in "Buy" so I'm backing up the truck." Gee thanks.

So today when you start saying stuff like you did at first - "nobody ever believes in bull moves when they start, nobody is currently bullish, therefore...its time to buy", well it just felt like sloppy thinking, and then I did a very minor amount of research and I found out your gut feeling was wrong, this told me not only is there sloppy thinking, its also poorly informed - well I just think we can do better.

Why are we different than the MSM? Why is this blog interesting? What are we here for anyway, if not to inform each other about important bits of meaningful data that helps us make our trading decisions? If all Bill did was say "my gut feeling says gold is up next week" who would remain? Bill gives us data by the bucketful, points out anomalies, linkages, tells a story with prices and ties everything together. He doesn't just say "I think the S&P goes to 1200."

Most of the posts here are folks who talk about stuff they've found that they are sharing with the group, in the hopes that it helps to inform us on what is happening in the world that might affect our trades. These I find to be value-added, especially when they wrap the stuff they're sharing in context.

2nd, if all we did all day was share our gut feelings and our trade blotter with each other, we'd be a bunch of Jim Cramers yelling buy and sell at each other. "I think it goes up from here." "I think it goes down." Really? Is that the best we can do? I'll go watch MSM if I want that.

Now maybe you find my posts useless - too long, they don't involve FAZ or FAS, and indeed everyone has an opinion and this is just mine.

Dave,
There are only few people on this forum whom I value a lot and you and 2nd are in the top of the scale. You have to give 2nd a credit with his intuition calls. He entry long at 11 AM was superb for a daytrade if he exited before 3PM.
He has a gift to see the best entry and exit points. This is something I lack as I tend to overanalyze charts and sometimes get information overload.
There is no problem with him sharing his gut feelings and Bill Cara does it a lot too.
Sometimes are moments when charts indicate that markets should go one way and the markets go in the opposite direction. I would not be surprised now if it happens again. That would validate his instincts.
We will see, but please chill out.

"Today Goldman Sachs said that its mortgage servicing unit, Litton Loan Sevicing LP, will halt some of its foreclosures. It is reviewing how its documents are handled.

“Litton Loan Servicing has suspended foreclosure proceedings in certain cases while it completes a review of its procedures,” Litton said in an e-mailed statement to the press."

Dave- No apology needed. As you know, I've been posting comments since 2005. Let me outline the evolution of my trading style:

(a) Buy and hold in core accounts spiked with a few swing trades.
(b) Buy and hold alternating with shorts, spiked with a few swing trades.
(c) Swing trades based on strategies that could be reasonably explained, spiked with day trades.
(d) Day trades using strategies based purely on gaming crowd psychology.
(e) Day trades using strategies based on gaming perverse forms of crowd psychology.

Obviously, intuition has played/still plays a part in all of the above.

I use what works (for me), and recently I've made comments about nothing beyond straight intuition working. (Is it possible that when trading against software that executes trades in milliseconds + sophisticated strategies designed to confuse those using tradtional metrics, the only effective defense is intuition? Well, who knows...) When I'm hit with the instinct to trade (whether to open/close, or in response to a about ST market direction), the instinct is usually 'coupled' with an image or fleeting thought. I almost always post the image or thought without much editing- ergo, the thought this morning that the market will ramp up b/c no one expects it to. That's really the best I can do right now. I'd be lying otherwise.

Note that I'm often wrong, and when I'm wrong, I close the trade quickly (as I did early this morning with TZA/VXX)- that in and of itself often keeps me out of trouble (as Landry might say).

Now here's some truly useful advice from David Trainer:

http://tinyurl.com/2e5jef4
During an appearance on the “Your Money with Chuck Jaffe” podcast, Trainer said investors are better off digging through management’s statements than income statements.

“As a former auditor, I can tell you that companies can put whatever they want into income statements and balance sheets, but they have to at least justify or explain what they put there by what they put into the notes and [management’s statement],” Trainer said.

“It’s a shame folks spend so much time trusting that number [net income] that is highly manipulated and so often misleading,” he added. The “net income number is purposely molded to be the best possible representation of the business in order to facilitate the selling of the stock.”

Goldman Sachs, for example, is an issue where “the current stock price implies the company’s profits will drop by 35% . . . and never grow profits again.”'

fwiw, I feel the same way about INTC and WFC...

Yo Jock - Not sure if you are following this one, but I have been easing into this one for a while. I started following them due to the name mimicking a low grade Au propect in Idaho I was familiar with - only thing is they don't own it. Noted this intercept and pulled the trigger (316.3m : 22.1 g/t Au, 1590 g/t Ag). As always I appreciate your thoughts. Happy Trading to All

2nd & Dave,

Differences in 'personality type" is something that differentiates us as humans. See "Myers-Briggs Type Indicator" under Wikipedia. Dave would probably test out as a sensing, thinking type on 2 out of 4 functions of the profile. 2nd would be the flip side with intuition and feeling as predominant in the perceiving and judging functions, respectively. There is no best way. Genius can come from either angle. I have tested out twice as an INFP (Introverted,Intuitive,Feeling, Perceptive) type. It has not made me a million bucks.

All that aside, I will be signing off for a while as I undergo hip replacement surgery Thursday and recover afterwards. GLD is my biggest position and a stop loss limit order will be in place.

Luggie -

I had followed the chart of AAU for a long time, and above all been surprised by how long they had been in business, how highly respected Polquin is by the likes of Brent Cook, yet how little their stock had ever moved.

Then, I took my eye off the ball, the stock jumped beyond buying range, and has stayed up there.

I like the prospect generator model best. I remember deciding NOT to buy in at $1, and the next time I had looked, it had doubled! - now up to over $3.

Their VP exploration and CFO are founders (and part-time operators) of Tarsis, TCC.V, a new Yukon explorer I wrote about a couple of days ago. Cap: C$6M.

I spoke with Wade Hodges, CEO of NGE, to ask why they had announced a drill program: http://tinyurl.com/2c6bhn2 (Generally they leave drilling to deep-pocketed JV partners).

Over 10 years, NGE has developed proprietary ground-water analysis for finding gold prospects and for targeting the drill in the 1/2 of Nevada which is covered by sand and gravel - and which is therefore largely unexplored.

Based on 3 bids, Wade estimated that they were paying less than half commercial drilling rates (due to close ties with the chosen driller). Wade plans only a few holes on NGE's property between "Awakening" (which NGE optioned to Northgate), and "Sleeper" a past-producing mine just acquired by Paramount Gold.

NGE wants to push the pace. Should the drill find gold intercepts, momentum will build for consolidating the district of 3 properties around Sleeper's pre-existing infrastructure. This is the reason for his exception to the no-drilling rule.

NGE runs VERY frugally. With market cap. of just C$9.4M, NGE already has 11 Nevada properties in their exploration pipeline - generating interest from several producers. Top priority is the next JV. NGE aims to become the "go-to guys" for early-stage exploration in Nevada's basins and valleys.

Disclosure: I own shares. No other ties.

Illini-I'll 2nd, 2nd. That's a tricky procedure. All the best and look forward to your return.

DJIA down 64, Gold down 5.40, Asia and Australia looking red

Well, A picture is better than a thousand words, Asia indexes are deeply red at the moment. Could this be the start of an October correction that every one has been talking about and anticipating before the next leg up to again positive ground just ahead of the Nov election?? Now remember, they can still take the DOW down even a 1000 points from here for one week or so say until Option expiry then drive it up again 1500 points after Oct 19 to be in positive ground when Nov election hit. Every thing is possible these days.

The way I see it, if every body believes the market has no way to go except up and up because the FEDs are all the way behind it with their POMO and promised continuous QE2 which trigger the herds to jump on the bullish train and don't look back :), I guess a common sense here will tell me maybe, just maybe I should get off the train for a pause now as a contrarian against the herds and see what will happen to the BULL train in the next week or two. What do you think? Am I making some sense here ? :)

http://finance.yahoo.com/intlindices?e=asia

Any real property including chattle property (which includes my black steers) that is owned fee simple has no contraparty by definition. I applaud the 40% plus of homeowners in this country who have no mortgage. A house simply put is a place to live. Each decides their own needs and means. The temporary insanity of cheap money fostered a whole new industry of money market pirates and the naive algorithims necessary from lazy ( corrupt) rating agencies that even one of my undocumented braseros could qualify for a $175,000 mortgage. The always astute Ayn Rand sycophant, Sir Allen Greenput mumbled that bubbles could only be observed in retrospect by putting one's head between one's legs and looking in the same direction as one's ass only hope that the acrid smell from a burst bubble would soon dissipate.

Real estate is not a failed asset class anymore that GM is representitive of the failure of the entire equity market structure. In any asset class, a few green persimmons need to be culled when making jelly. Overpriced (on a replacement cost basis) real estate built and sold between 03 to 08 shouldn't be the standard against which the majority of most real estate is measured.

I learned early on that the same analylitic metrics that I used to evaluate a public stock company could be used to determine the value of any real estate project. I also learned that Graham and Dodd was more easily applied to real estate because publicly listed corporations came with almost infinite moving parts which can and will be valued on the whims of saleschildren and their banker masters.

In the mid to late 70's, our trust department was called on by all of the sell side firms on Wall Street. Many of them had excellent research but most were contraparties selling not investment ideas but transactions options for a fee. Typically at the end of their presentation I was asked 'what do you own in your personal portfolio.' My reply was that I did't own equities because it would be a conflict of interest since I recommend equities to trust portfolio managers. I also offered that I invested in real estate because I could more confidently assess the income stream and banks were eager to give me 4X leverage if needed.

Mr. and Mrs. America and all the ships at sea, flash; You want/need income from a tangible asset that you own outright and can touch, feel and see? Would you settle for a 10% tripple net cap rate or would you like to sit on your lazy arse and collect 3% from treasuries that are guaranteed to pay you back in devalued colored confetti. You can also own shiney metallic objects that pay you zero. If the price (in dollars) of unproductive silly yellow and silver coins increase, I can assure you that rents on my real properties will increase pari passu plus interest.

Not sure if this was posted here before, but very interesting analysis indeed !!

http://www.cnbc.com/id/39610987

Published: Monday, 11 Oct 2010 | 5:30 AM ET
By: Robin Knight

The stock market is at risk of another flash crash because of the Federal Reserve's liquidity-boosting measures, Robin Griffiths, technical strategist at Cazenove Capital, told CNBC Monday.

"I'm not gaining any confidence from what the Fed has been doing here. I actually think you're going to be talking about a flash cash — they've set it up, we're vulnerable to another one," Griffiths said.

Dollar weakness means that European investors should be cautious of buying into dollar assets and should have been clear for the past decade, according to Griffiths.

"If we had at any stage in the last ten years bought America, we would be down 54 percent at this moment. It really is for losers," he said.

The Fed's Permanent Open Market Operations POMOs, which control the supply of short-term money into the financial system, are distorting the normal market seasonality, according to Griffiths.

S&P -7.90 / -0.68%
Level 1,154.40
Fair Value 1,161.44
Difference -7.04
Nasdaq -12.50 / -0.62%
Level 2,013.00
Fair Value 2,024.71
Difference -11.71
Dow -64.00 / -0.58%
Level 10,899.00

Watching India, as Twiggs called it a self-reinforcing uptrend at his last look at it:

http://www.incrediblecharts.com/tradingdiary/2010-...

It's now made a top. Wanna see a lower high or double top following.

Shorting INDL (2X) or EWX could be your ticket on a pullback in India and other emerging markets.

Note however the buying pressure as recorded by Twiggs money flow indicator, both in global Dow, US markets and the trannies:

http://www.incrediblecharts.com/tradingdiary/tradi...

$USD, slowly rallying, touched 78 in afternoon trading in asia, up from its low of two days ago of 77.05 set early Monday morning. USD's RSI-7 climbing, now at 24. It has also broken the downtrend channel (on a 60 min chart) which dates back one month to Sep 10th. This has dragged S&P futures down 10 points. This is a pretty clear currency link, at least to me, for the recent equity market rally. SPX rallies when the dollar is weak, and SPX drops when the dollar shows strength.

For those who may be confused that "good earnings" (or some other positive economic rationale) was responsible for the rally, I would encourage you to examine the SPX as deflated by the euro - $SPX:FXE, which shows the SPX in euros only marginally higher than its nadir on August 25th. The $SPX:$GOLD chart looks much worse, more like a descending triangle formation. If gold is an emerging currency, as Bill suggests, SPX in gold does not look healthy at all. In fact, the weekly chart for $SPX:$GOLD looks like a dead cat bounce off the 09 lows, and it looks like we're headed back to re-testing said lows in the near future.

Will we get a V-shaped dollar rally? Is this just a dead cat bounce for $USD? Who knows. But if the straight-line move down in the buck is no longer happening, what do we think will happen to the equity market rally?

S&P -9.30 / -0.80%
Level 1,153.00
Fair Value 1,161.44
Difference -8.44
Nasdaq -16.00 / -0.79%
Level 2,009.50
Fair Value 2,024.71
Difference -15.21
Dow -80.00 / -0.73%
Level 10,883.00

gap down day. reversal in FX relationships. $ strengthening.

http://www.finviz.com/futures.ashx

Davef asks: "But if the straight-line move down in the buck is no longer happening, what do we think will happen to the equity market rally?"

OOH, OOH trick question - pick me, PICK ME!

Maybe it's 'Don't taunt the bears.' ;) Unless one is at least armed and a good shot.

I would agree that bulls will be promoting the concept of an 'orderly pullback' as the pause that refreshes. Or maybe they'll be selling metals in order to rotate into financials and technology.

Trading can sometimes resemble an unending chess game. I wonder if Bernanke looks at Fed policy that way.

yeh the $silver:$gold relationship looking overstretched.

Learner,

"Hoisington also gives a cogent argument that Treasuries are not in any bubble. These guys are a little heavy on the economics but they have been very right over recent years (ask Grym for a reference)."

Yes!

I only wish I'd been more quick to follow Van Hoisington's advice. After a big drop WHOSX pulled me back to even by year-end.

I heard Paul Kasriel speak before the 2007-2008 plunge and he was a bit too optimist regarding employment, but otherwise spot on. (But I had the advantage(?)of having observed our evaporating employment close up by then.)

Ross,

"Mr. and Mrs. America and all the ships at sea..."

Boy, does that take me back!

Good morning.

NO POMO Scheduled For Today. Next schedule for POMO to be released tomorrow.

14:00 - FOMC Minutes

Earnings After The Bell:
Intel (INTC Cara 100)
Linear Tech (LLTC Cara 100)

Cara 100 News - Pfizer (PFE) Buying King Pharmaceuticals, Inc. for $14.25/share http://tinyurl.com/2495mhe

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AET - Aetna initiated with a Neutral at Credit Suisse. Target $35

CEO - CNOOC downgraded to Neutral from Buy at UBS based on valuation.

CEO - CNOOC downgraded to Neutral from Overweight at HSBC.

GOOG - Google upgraded to Neutral from Underperform at Wedbush. Target $575

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Other Stocks Of Interest:

ALU - Alcatel-Lucent initiated with a Market Perform at BMO Capital. Target $4

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"October: This is one of the peculiarly dangerous months to speculate in stocks. The others are July, January, September, April, November, May, March, June, December, August and February." - Mark Twain

DB - Deutsche Bank initiated with a Sell at Canaccord.

GOOG - PT Lifted from $560 to $600 @ Stifel Nicolaus. Buy

GOOG - Wedbush upgraded Google to Neutral from Underperform on expectations ad dollars online will continue to drive the company's core search business. The firm upped its price target for shares to $575 from $525.

HBC - HSBC initiated with a Buy at Canaccord.