hi bill,

here is more on the china tumble (including a very good interview with marc faber!)

http://immobilienblasen.blogspot.com/2007/02/china-down-9-biggest-slump-in-10-years.html

Morning Bill. Sailors take warning may be very apt today. A request from a first time poster. With reference to ETF's and their policy of loaning out shares, is this positve to the shareholder or does this produce an opportunity for the loanee to short those shares and drive down the price of the underlying stock which in turn would drive down the price of the ETF? Barclay's state they do it to increase shareholder value. Any comments out there would be highly appreciated.

>

I suspect that the story may extend beyond the day.

now what happens to all the liquidy in the market?

mission accomplished:
http://www.atimes.com/atimes/Middle_East/IB28Ak01.html

thanx

This is going to be a fun day for us bears. I have been short-term bearish for the last 4-6 weeks without sporadic success, but today we get to have our day of glory! Let's see if this is just going to be another dip, er.., Grand Canyon, for the bulls to buy! BUy the dip! I think we may have seen the end of that for a while...

Lauriston--it's an unwritten imperative that bears must be more dignified than bulls for the work as a market pall bearer (vs. market party animal) is more somber. Dignity! Discretion! Decorum! Delicious! (oops!)

I wouldn't be the resident housing monomaniac if I didn't mention that Cara 100 Hovnanian (HOV) announced preliminary results this morning. They will be reporting a loss of over a $1 per share. Read their bizarre release, which seeks to blame a single market for their poor performance. Nonsense, I say.

Additionally, existing home sales will be released at 10 a.m. est. I expect them to be ugly-ugly.

New home sales come out tomorrow.

This should be a fun morning, I read that article from the Asian Times, and although i find it pretty funny, it lacks credibility. The entire web site is thinly veiled Chinese propoganda, just take a look at the article on Japan and Mongolia, ouch.

Anyone have any ideas on the chip sector, and whether or not we see a turn around in the next year or so?

Any input would be appreciated, Thanks

Here is link quoting Marc Faber:

http://www.bloomberg.com/apps/news?pid=20601087&sid=a70INYQDpdQQ&refer=home

Through Bill’s eyes/blog, we see the future and for those of you that have been here the past couple of years, he has made it fairly easy for us to capitalize on it.

Thank you Mr. Cara.

OMG, it's a bloodbath.

This is eerily similar to the July 2006 top in its manifestation. I called 12660 as the top and I may have missed it by 1%. Nonetheless, my shorts are green across the board-- at least for now.

If this is cycle high for gold I would expect first line of resistance to be 650ish.

Please remember that a 4 year cycle low or its equivalent is out there somewhere. Today's data reveals that the economic cycle hasn't been repealed. This cyclical bull has been running since October 2002. 54 months is not out of the ordinary AT ALL for a 4 year cycle. Bear markets tend to shave off about half of the profits from a bull run.

Let's see what happens before getting too giddy.

Good luck and good trading all.

IMO, this is NOT the cycle high in gold.

gold is overbought and could use a short term breather though.

Expect printing presses to be on high to stave off equity / housing market meltdown = gold up regardless if it works or not. Just my thoughts at this exact moment, NOT a recommendation.

Long: GLD

I think that the following will be interesting to watch. With the transports having "lately" confirmed the bull market (which I hold suspect, but what do I know), and now that the transports (1) have been downgraded and (2) have fallen below their resistance, I am interested to see how this dynamic unfolds in the future.

I think that the following will be interesting to watch. With the transports having "lately" confirmed the bull market (which I hold suspect, but what do I know), and now that the transports (1) have been downgraded and (2) have fallen below their resistance, I am interested to see how this dynamic unfolds in the future.

JNJ has been looking interesting in the past few days and currently today at 63.58 ... RSI7 and RSI14 are under 30 and stock is just about to break through 200MDA.

Not sure if it's worth taking a position yet though if meltup continues or wait until market liquidity dries up and corrects to get a better price.

No position

Nice trading opportunities in the PM shares this morning. Will look to add to longer term positions on afternoon weakness. Northern Dynasty is green.

im getting killed in slw. any hope if i hold?

SNDK

Anyone else taking a hard look at SNDK?
M/W/D is currently 33/17/19. Would probably nibble when the daily shows upswing past 20. Would like the monthly to be below 30 though which is why I would nibble and not bite.

This is bloodbath. S&P just dropped off a cliff from 3% to 4% in a matter of minutes, and that is with trading curbs. Tomorrow will be interesting. Where are all those bulls who come here to boast of how much money they have made and how much Bill has lost by being cautious? Too busy panicking.

I encourage you all to research pi cycle dates, discovered by Martin Armstrong. They have coincided almost exactly with the 1929, 1987, 1989, 1998 crashes and the 2000 top and 2003 bottom. February 24th, 2007 was a pi turn date. Need I say more?

Wow, talk about WASH, RINSE, REPEAT. They managed to push SLW to 9.64. Crazy day!

My Fidelity Active Trader Pro seemed overwhelmed today. Though my downside exposure was limited (which also means that my upside exposure has been rather limited!), I found the 30 second 200 pt drop hair raising.

Thank you Bill for warning us all about this day!

Gold took a dive in the after noon sliding $23.
Any thoughts on the sudden dive in Gold.

Tomorrow should be another interesting day inthe PM and global indexes. India releases its budget today and IBN looks like it's getting close to accumulation range.

moab - did you mean PHI turn dates?

re: gold
traders trading on margin sold gold along with their equity holdings. At one point today, the Dow was down, gold was up, then equities took the major dive, bringing gold down with it. This is fundamentally positive, not negative for gold, IMO, repeat, IMO.

Long: gold, stocks, bonds, money market, puts, basically everything, but not a bad day all in all.

g034-

DID NOT MEAN L/T BULL CYCLE HIGH OBVIOUSLY!

I will be long gold again quite shortly I believe.

OK this is the scenerio that we all wonder about.
Paper assets tanking, including gold shares, but gold, itself, looking like the right place to be.
I think that full-time equity players (funds) are dumping high Beta positions including miners (without thinking). I believe this will cause some pain which I also think needs to be endured.
Nothing is ever easy. Conviction is important.
What do you think a world wide market melt down in equities will ultimately mean to hard asset investments?
Huge.
Keep the faith.

Well, I dint get hit too hard today, however I'm mostly in cash.

My plan is to trade the CARA 100 plan with my longer term money.

I see no reason to change my philosophy here.

MU is getting close so will ease in when I think time is right.

It's also getting close to the Andrews trend line I spoke of a few days ago.

I also think the chips will rebound quickly when this carnage ends, and IT WILL END.

Dab

JogyP (and I thought I had seen MarkM posting too but can't find it now) about the sudden drop in gold after the gold market closed: The following is from http://www.gold-eagle.com/dmr3.php.
He says that because funds were selling lots of GLD ETF, physical gold had to be liquidated - after the market closed, causing the sharp drop. If this true, what on Earth are we looking at then while the market is open?
Excuse me?

"Funds sold mining stocks and the StreetTracks Gold Trust, the exchange-traded fund, or ETF, backed by physical gold. The Philadelphia Stock Exchange Gold & Silver Index fell 6.9 percent to 137.56. The StreetTracks fund, which last week reached a record $10.5 billion, dropped as much as 4.5 percent. "

``The stock market didn't collapse until after gold's close,'' said Billy Flahive, a gold trader and partner at Eagle Futures Inc. in New York. ``The liquidation got piled into gold. When they liquidate the ETF, they've got to liquidate gold bullion, so they had to come to the market. They did it after the close so it's a little dramatic.''

No, I mean pi cycle turn date. It is a 3,141.5 day (8.6 year) cycle, divided into smaller 2.15 year cycles. Today marks the end of a full 8.6 year cycle that started on 07/20/98. Where I first learned about it is here:

http://www.contrahour.com/contrahour/2006/06/martin_armstron.html

I recovered this document and others from Martin Armstrong's old site. He is now in jail under strange circumstances.

2/27/2007 is listed in the list of cycle dates. Next one is 04/23/09. I encourage everyone to read this as it is uncanny at predicting changes in the business cycle/stock market. I don;t know why it works but it does. I was holding on to some losing shorts as a hedge against my longs and was determined to hold on through the pi turn date and then re-evaluate. Good decision.

I will have more about this on my blog by the end of the week. I'll post a link then.

Unless some theory has a rational basis count me out ;-)

Pi cycle is not a theory, just an observation of events in business and markets. Changes seemingly take place on this cycle. You have to figure out what the changes are or could be and watch for them.

Pull up and S&P chart and see what started exactly on 07/20/98. Then look at 09/13/00. Then 11/08/02.

Then go back further to '87 and '89 and '29 and check the cycle dates.

I'm an engineer. I believe very strongly in the scientific method and a reason based approach, but this cycle fits the observed phenomena unbelievably well.

Re: Pi cycle

I got a tip about monday's Pi cycle date, and sold a few things. I wish I had sold a whole lot more. despite its uncanny success rate, its hard to take something so simple seriously, but I guess most experienced traders would tell you the more angles you are aware of, the better. for may 11, 2006, the gold/silver ratio worked like a charm (reversing 3 weeks ahead), but this time around it reversed on dec 18th, so I was looking for the correction a few weeks ago... I see aisa isn't doing so hot on wednesday...for what its worth, I will wait a bit and buy more gold stocks with the cash I raised monday. I think the gold stocks will greatly underperform bullion for the next 4-8 weeks.