Bill Cara: Factors pushing the "Fear" button, Wed., Jan. 25, 2006, 4:46 PM

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January 25, 2006

Factors pushing the "Fear" button, Wed., Jan. 25, 2006, 4:46 PM

My biggest fear today was being locked out of my computer after I tried loading some new software. But from reading the Comments I see that there are plenty of fears creeping into traders' minds. How about: (i) disappointing corporate earnings (ii) falling bonds/rising yields (iii) a softening energy market (iv) existing home sales declining for second straight month (v) concerns over market breadth (losers over gainers), etc.

Sometimes fear will drive traders into precious metal stocks. Today they were far and away the big group winner.

And how about those silver stocks? I stepped up to the plate yesterday just after 3:00 pm and said I thought they might be ready to go? The silver bullion had moved significantly and I could see the stocks holding back with the rest of the equities.

But today, precious metal stocks were at the top of the leader board, and these silver stocks are at the top of that list. So you can't beat that.

Sometimes you just have to know what to be afraid of. As to me it's Microsoft " not MFST " but the company, and more accurately their software products. :-)

But then, they have a different definition of the word "techie". You see, I'm a techie, but not a techie.

The techie in me just knows how to trade precious metals.

Posted by Posted by Bill Cara on January 25, 2006 04:47:28 PM | Category: Cara Today in the Market

Discourse

Great call! No wonder Forbes salutes you!

I noticed platinum and palladium didn't do bad either. PAL up 3.58% and SWC up 1.7&.

Disclosure: No position in either.

Posted by: Seamus at January 25, 2006 5:04 PM [link]

Bill:

Took your Gold advise this AM. Bought just after the bell and again at 3:00PM catching the valley making $ by close.

Would this not have also been an entry point day for those who want to ride the Oil/Gas whirl wind or do you recommend waiting just a tad longer?

Posted by: C.Note at January 25, 2006 7:11 PM [link]

It's the sell button(for other stocks) and buy button (for gold stocks) that counts :D.
Personally, I don't think it's time to buy oil. Demand is not as strong as expected(Chinese consumption down in 2005, let's see that little piece of news hit the international markets and make a ripple) and you hear too much of it in the news etc. Sentiment is rising and events/news/hype are left that are supporting it. Should've bought a month ago, when everything was quiet and oil could go up a dollar or two without making headlines.
Natural gas may be an idea, as it has been extremely weak. I wouldn't buy something in a downtrend like that before a reversal
http://futures.tradingcharts.com/chart/NG/W
Natural gas weeklies Feb contracts.

Posted by: FirstConsul at January 26, 2006 12:19 AM [link]

FirstConsul thanks for the tip and I did buy GAS about a couple of months ago but the basket I did purchase ends up reading like oil. Are we talking pipe lines? Gas Works? Drillers? Is there like an all around Natural Gas Guy you could point to here?

Posted by: C.Note at January 26, 2006 6:41 AM [link]