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November 16, 2005

The Woes of America, Wed, Nov. 16, 2005, 7:18 AM

I still haven't put a dent in the overnight reader mail, but here are a couple. The first includes a link to an article worthy of reading. USA Today could have entitled their article, The Woes of America".

The situation facing Americans today requires no explanation or defense on my part. It is not my problem.

After all, I live in a country with a trillion dollar GDP that has enjoyed nine straight years of budget surpluses (but where incidentally the populace is still unhappy enough to likely soon turf the government of the country in power since 1993).

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"Bill, Please read this. Without major spending cuts, tax increases or both, the national debt will grow more than $3 trillion through 2010, to $11.2 trillion — nearly $38,000 for every man, woman and child. The interest alone would cost $561 billion in 2010, the same as the Pentagon.

Mega YIKES! /JW"

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The next was from B. Here is the exchange.

Bill, Thank you for your thoughtful answers. I am sure that you will help many by not publishing all 100 companies until an accumulation zone has been entered.

I know that you must be a very busy guy being retired, doing your research, and writing your blog. However, I cannot help but ask you if you are quite confident of a pullback to 9,800-9,200 on the Dow why you wouldn't have some puts on it? Are they too expensive? I was thinking that they could get rather inexpensive if the Dow pushes through 11,000.

I am happy to be part of your survey.

Thank you for taking the time to answer my questions. I really appreciate you sharing your experience and knowledge.

Thank you,

BL"

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B: My thinking is aligned with that of many independent, objective and successful traders. Could we be wrong? Of course! There are also many brilliant people who honestly believe a new bull phase is happening this month. But the most important point I can make is that trading is a never-ending journey. If you are properly equipped to make the trip, your voyage will be successful.

Have a good day.

/Bill

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I see that gold is rallying again this morning, as it should under the circumstances. The spot price is up +$2.68 to $471.20.

In about an hour, the U.S. CPI data will be released. If only we could trust the integrity of that data. And that of the TH spin community.

Later today, I will in fact decide whether or not to put on puts. That's not my usual style, which is to only buy puts and calls after extreme short-term moves that I believe are blow-offs that follow extreme intermediate-term moves.

You see, when you buy a put or call, you are taking on risk. One problem is time decay. The other is that you need the market direction to go your way, which is in effect relying on others. I'd rather rely on myself, and I can best do that with the practice known as overwriting, or writing puts and calls in conjunction with core portfolio positions.

Please read the link to the USA Today article sent by JW.

Posted by Posted by Bill Cara on November 16, 2005 07:18:06 AM | Category: Cara Today in the Market

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