There's nothing like getting out of our own overly-tightly-wound culture and into a place where people are less connected to markets and more to each other to put things in perspective! I look foward to more of your insights from Bahamas!

Your comments on risk management are interesting. I have a friend who works for a big bank on wall street (no names) on one of their internal trading floors and told me that during the big pull back in May his entire group was forced to close all trades as management had determined (after the market came down for those six or so days in a row) that the trades weren't properly managed to hedge some of the risk (highly correlated investments). The fact that they had to close ALL positions on that particular floor for that particular bank just goes to show you all the risk management in the world sometimes can't keep the big boys from getting fried. Just thought that made for an interesting side note.

Regarding the movement of the miners vs gold or (GDX vs GLD). One poster explained several weeks ago that when GDX lags movements in GLD it may be sympathy for weakness in the broad equity market. If one has a poor outlook for equities, can the miners still be an attractive option for gaining leveraged exposure to gold.

Bill - It would be disheartening to learn that you're inside blogging if the weather is as nice as I imagine it is down there. None-the-less, it's greatly appreciated.

Bill and all,

Short term - Respectfully disagree.

Correlated events like in India and the Middle East should be seen as a short term opportunity for profit taking when the technicals confirm.

http://globalgold.blogspot.com/2006/07/gold-chart-and-commentary.html

thanks real1, and to all the others who post a lot of helpful charts, links and educated opinions, the time that you take out of your day is very much appreciated by a lot of little people, i can speak for a few

Warren Buffet Alert!
Charlie Rose has a three part TV series of intelligent discussions with the Warren Buffet. The last part concludes on public televisions stations Wednesday night. You can watch previous parts on Google video.
http://video.google.com/videosearch?q=tvshow%3ACharlie_Rose&so=1
I found it worth watching.

Hi Mr. Cara, what do you make of the fact that gold (GLD) was up about $10 but nearly all the gold miners closed slightly in the red. Does this indicate that the market doesn't think the current gold price can hold here ?
Thanks for all your great posts.

Haven't I been saying that one of these days the Dow was going to open up down a hundred?

This is no market for lots of exposure. I have 48% cash, 10% short maturity bonds hedged by miners, and 42% diversified but defensive equities COMPLETELY HEDGED BY THE UNDERLYING INDICES.

MarkM, can you educate us a little and explain what you mean by 'hedged by the indices'? Are you buying puts on DIA/QQQQ?
Many thanks.

My longs are taken with the hope that they outperform the SP500 or, in certain cases, the RU2000. I have them hedged by short sales of indices (SPY etc) in amounts equal to the longs. So I am only looking for what is called "alpha" here to create positive action for me. So far so good as I am up slightly during the market decline. I have not gone net short yet as I was waiting for a sizeable bounce. I may have to wait until we retest the June lows. That may come earlier than I expected.

Agree with MarkM. Have 43% now in cash after trailing stop hit on SLW yesterday when I was out. Maintaining 8.5% in miners and 7.5% in falling dollar.

Watching for a bounce to consider shorting QQQQ.

Seamus,

Is that enough of a bounce on QQQQ, or what kind of level do you consider a bounce?

Thx.

P.S. Buffet, Dell, and many other millionaires in the 100M club seem to be all meeting in a secretive conference in San Francisco. Anyone know what that meeting is about, and could they planning the next market moves? :-(

Si02

No, that isn't enough. I'm awaiting a larger bounce up near the 50 day SMA which is just under 39 right now. I don't know if we'll reach it; once this thing starts cascading . . .

On the other hand, cash is not trash with ST T-bills a little over 5%!

I'm patient and for now that's the plan. JMHO, not advice. Some of the pros here may have other helpful insights. Good luck!

Re prior post above:

PS. I have Sept.QQQQ puts and other put plays on the table.

oferchrissake, the Middle East has been blowing itself to bits for the last 30 years. Each and every brou-ha-ha is fodder for the market doing what it would have done anyway.

With respect to oratier, significant events effect the market significantly ONLY WHEN they are unexpected. Otherwise, "news" is an event to be faded by us smart folks cognizant of the overall trend.

IMHO, in respect to *this* week, gold is over-bought, the broad market over-sold. Yes, the direction is down, and yes, gold is the place to be. But not next week.