Today's action suggests the trade continues from gold into equities. My best GUESS is that we will retest 560.

way of least resistance in stocks is up currently, but no action to write about so far. Anyone an opinion about AUY?

Yes, the same trade seems to be occurring.

It seems to be some kind of "Carry Trade" tied to a weak yen - rush into safety - first bonds - now financials, US Blue Chips etc... of course exacerbated by today's N Korea talk.

Wouldn't be surprised to see BOJ do nothing later this month - to keep the same carry trade going.

The scenario could then go like this:
Carry trade money will continue into US assets until end of year. Some carry trade money finds its way back into commodities again - resulting in stagflation.

Once everyone's loaded up on gold etc again -that's when BOJ will raise again - for another final flush out in commodities.

You can't fight these money flows IMO.

Maybe I'm wrong - but that's sure the way it is looking.

Of course if the US economy is really in trouble - the BOJ will raise right away to choke of the last vestige of cheap money.
Then the rate decrease cycle will start - led by the US.

So I guess the Yen has become a key thing to watch here....

Bill, there's a stock that trades over the counter MNCS, that is truly amazing (I use the word loosely). Behold the chart.

Have a look see. This one is getting a lot of press in the last few days.

How about a quick analysis, since you are a student of the 'promotion'.

LOL, never seen a chart like that MNCS.OB thing^^ never would touch things like this. You do not know the game that is played there, so you sure got to loose.

1) The game is pretty obvious

2) you don't have to lose.

For those wondering about MNCS.OB (Manchester Inc.), here are a few extracts from this past weekend's Vancouver Sun (by author David Baines, one of the few columnists worth reading in this rag):

"Some days, trading is substantial. On Friday, just over one million shares changed hands. News, on the other hand, has been scant. In fact, the company doesn't even have a business. It is simply proposing to acquire one."

"With 33 million shares outstanding, the company's market cap now exceeds $260 million US."

"So what exactly is going on here? The answer is that this is yet another OTCBB shell company that was manufactured in Vancouver and then exported to the US where it is now serving as the vehicle for yet another outrageous stock promotion."

"Manchester was created as a mineral exploration company, but it wasn't a very earnest one.

In a registration statement filed with the US SEC, the company's president was listed as Jackson Buch, of Kelowna, a pipeline management consultant who had no prior experience in exploration.

Manchester's other officer and director was Dana Upton, a long-time Howe Street promoter who has been a director of many dubious stock deals, including Burro Creek Minerals Ltd. and Hi-Peg REsources Ltd., both of which attracted regulatory or police attention.

Although Upton was not accused of any wrongdoing, it is clear that he was not keeping very good company.

With Buch and Upton at the helm, Manchester sold seed stock to 40 people. One was Anna Skokan of Delta, who was listed as owning 150,000 shares, but Skokan said she never bought any shares. In fact, she said she has never heard of the company."

"Karl Kuipers of Kelowna was listed as owning 50,000 shares, but he said there is "no way I would have bought 50,000 shares of this company. I was building a house in 2002, I didn't have any money for investing."

"It is not clear who put them on the list. The two people who might know--Buch and Upton--couldn't be reached for comment.

It's clear, however, why they were put on the list. To meet share distribution requirements, such companies must have at least 35 shareholders. So whoever is running the show finds names or solicits people to act as nominee shareholders. Then when the company goes public, all the shares are gathered up, so there are no shares in the hands of the public.

With no public float, the promoters can swap shares back and forth and set the stock price at whatever price level they want."

"Manchester's registration statement listed the company's address as 200, 675 Hastings Street. That happens to be the law office of Greg Yanke, a key player in the shell manufacturing business in Vancouver."

I'll end off with this:

"...if it follows the usual pattern, the main target will be Americans and they will almost certainly be burned by this Vancouver-made weapon of financial destruction."

Here's the author's web page:

http://www.canada.com/vancouversun/columnists/davidbaines.html

Hope that clears up the mystery.

MarkM/Tradesman,

What tools/websites do you use to determine daily money flows, or is it just a gut feel? I use http://tal.marketgauge.com/MGHome/PHSReportsIndex.asp but you seem to have a better read. All of my miner positions took a dive in the afternoon even though the gauge is postive.

Thanks for your collective posts, I have learned how much I have to learn!! ;)

Miggs

I will be interested in the price behaviour of NVDA over the next few weeks:

If the takeover rumour fades - lets see where the stock settles into. If this tech rally is for real and is going to continue through to next year - buyers would be stepping into NVDA as it falls back - a sign we should stay with tech trades.

Otherwise this is one big distribution game.

Thanks just_observing, you can certainly smell this one a mile away, but details are always nice.

Miggs-

For the above post of mine I was relying on chart action in the charts I have posted before plus the main US market indices. When gold reaches a resistance level and sells off in a hurry like it did you can bet that there were some underwater positions just aching to get out. So they are selling the rallies. Re the miners, no amount of good news is giving them their ordinary leverage to the underlying commodity. I consider that to be a bad sign. Still, I am long a small amount of miner shares. See my note on John Hussman and HSTRX from this AM.

procol-

Bill doesn't waste his time on this kind of stuff. If he sees something like this being touted in his pages, he has banned the commenterbefore. Just a heads up.

Thanks just_observing.

Miggs:

I am primarily a very short-term trader. As such I don't use any of the conventional Money Flow Indicators in most charting packages. I rely mostly on price and price points and have little interest in volume (since most of the stocks I am trading are very liquid anyways.)

I just try to get myself in for the low of the day and protect that – I'll stop out if I'm wrong. I do watch the TICK though intraday.

I guess you are right: a lot of it is intuitive. Stocks behave a certain way if people want in - and a certain way if people want out. We can't always get this right – but over time we get better at it.
If an institution wants in – they try to hold the price down, draw in sellers (make it look weak – when its strong).
They don't pump the price up like they have been with the Oils and Miners recently (this is a sign they want out).
If an Elephant enters the room though - this is obvious - and just go with that.

By the way IMO one doesn't need Level II to figure these things out - and anyways these pros can hide their intentions on Level II and fake you out.

---

That being said… on the weekends and during dull days I review all the daily/weekly charts and look at the big picture.
Most market movements seem to be based on Big flows of money – and more often than not are illogical.
I try to track currencies and interest rates.

Money starts out where its cheap (relatively) – and flows into where ever it can - to make the quickest buck. Japan is the last place left with cheap money. So now everyone is borrowing low interest Yen, selling it - and stuffing it in the US.

Big money flow is also generated by the S&P futures traders. E-minis etc…
In fact here is a link to a really good blog on trading and this subject in particular:
http://www.traderfeed.blogspot.com/

Some also believe they can follow “smart money� and devise indicators such as this:
http://www.wallstreetcourier.com/technician/timing-indicators/smart-money-indicator.htm

I don't pay much attention to these indicators – but I guess one could incorporate it as part of a trading system along with other market indicators.

The problem I have with market indicators – is that they can all be diverging in price – but the market still keeps going up (because it is the Big money flows – that say where the market is going -> NOT the A/D line, NOT Selling/Buying Pressure etc…)

I do watch the OEX traders though. You can get this on many websites.
The OEX Put/Call (say take a 10/15 day average) – shows short term bullish/bearishness. If they are bearish (or hedged) and the market breaks out (like last week) they may cover some short positions and send the market higher.

The OEX Put/Call Open Interest – is more important IMO - and can show their long term bets (hence future money flow).

Some Money Managers I guess subscribe to:
http://www.trimtabs.com/
But this is all money flow reported 'After The Fact' – and these Money Managers just chase last months flows.

… anyways some ideas to ponder

MarkM/Tradesman,

Many thanks for the insight!

Miggs

Bill,

Excellent summary on oil and gas. I really appreciate the links to the brokerage reports and your parsing of the data. Sometimes I feel out of place posting on the "Daytrader" board since my entries and exits are measured in months rather than days, but hey, it's an equal opportunity board, right?

Thanks again!

MarkM, where does it say I was touting this?

Just the opposite as a matter of fact.

Just a heads up.

Bill, I brought that name up , as it had just recently come to my attention, and was gaining critical mass in the blogisphere. I get lot's of spam, wouldn't think of passing any of it along. This , I thought , trancended the usual , as it seems to be YEARS in the making.

I wondered what you might know about it, not even realizing it was 'hatched' from Canadian soil.

lol, this will be fun to watch .... from a safe distance.

procol-

Bill is correct. I could have chosen better language and timing.

Signed, Bill's Unofficial Blog Den Mother