good point on the margin calls!

here are some charts from yesterday and of course some cartoons that fits to the current situation....... :-)

http://immobilienblasen.blogspot.com/

Colin Twiggs is out this AM saying it is NOT a time to go bargain hunting and does not expect support until Dow 11600. http://www.incrediblecharts.com/free/trading_diary/trading_diary.htm

Western Goldfields has an excellent podcast at BMO Capital Markets conference. 21 minutes but well worth the listen IMO. Click on the link then the Orange RSS conference podcast button and then scroll down to Western's presentation:
http://events.ipresentations.net/Webcasts/2007_02/BMO_GlobalResources2007/Lobby.php

HB&B thrive on confusion, fear and greed and are always ready to jump on situations like yesterday to make away with millions!! This needs to be investigated to the hilt! I had long assumed we had fixed all such "silly system issues". Gosh, if Google can handle humongous traffic, I don't see why a system that serves the world's trading needs cannot. This is ridiculous.

fed to the rescue.... Fed ready to act if financial crisis erupts: Geithner

The Federal Reserve stands ready to lower interest rates if a financial crisis erupts, said Tim Geithner, the president of the New York Fed, on Wednesday. "As always, central banks need to stand prepared to make appropriate monetary policy adjustments if changes in financial conditions would otherwise threaten the achievement of the goals of price stability and sustainable economic growth," Geithner said in a speech about liquidity in financial markets to a business group. Geithner said his remarks were general in nature and not related to "the specific conditions of the moment" where the stock prices plunged around the world. Geithner said liquidity, like market confidence, is very difficult to measure and a reversal of both liquidity and confidence play a critical role in leading to financial shocks. Geithner said financial regulators have a difficult time in predicting when liquidity may reverse. The best way to limit the risk of crisis is shock absorbers in the financial system. "These shock absorbers are substantially stronger today that they have been even in the relatively recent past," Geithner said

http://www.marketwatch.com/news/story/fed-ready-act-if-financial/story.aspx?guid=%7B5289F407%2DDD28%2D429C%2D841F%2D688897A39CA7%7D

got gold...?!!!

number2son has to liike those housing reports. Boy did the West get hit down over 30%!

Bernake speaking soon and let's see if what happens now.

In March, I think we're going to see the "white of their eyes" that Bill referenced.

Thanks for the link golden7. It will also be interesting to hear what Don Coxe of BMO says this week.

Hi.

Does anyone have any recommendations on a gold bullion dealer? Ideally in Canada.
Thanks

From The Wgdf website. No detail just bullets.

Why to invest in WGDF

We believe Western Goldfields is an extremely undervalued gold equity that is yet to be fully appreciated by institutional and retail investors. Those familiar with the Company and its potential talk about ten key reasons to invest in Western Goldfields.

These reasons are:

* Reputation and experience of the management team
* Feasibility Study indicates excellent rate of return at current gold prices
* Proven and Probable Mineral Reserves of 2.36 M ozs
* Measured and Indicated Mineral Resources (exclusive of reserves) of 1.25 M ozs
* Excellent potential to increase Mineral Resources
* Permitted mine, processing facility and reserve base situated in North America
* Proven technology - Run-of-Mine (ROM) Heap Leaching
* Ability to fast Project towards production
* Existing infrastructure facilitates quick resumption of operations
* Increased liquidity once a TSX listing is obtained

Finally, Western Goldfields is a rare opportunity in the mining industry. Our core asset Mesquite will require about $90 million dollars of capital and expense to be brought into full production

Eric,

I believe Kitco is THE bullion dealer: www.kitco.ca

Seamus, I was surprised by the sharp drop in total sales. I was expecting them to come about the same as existing sales. The real story, other than the increase in unsold inventory, is the 2.1% drop in price.

This is further evidence that the builders are facing substantial margin pressures.

Another thing to bear in mind is those numbers reflect contracts signed, not closings. So with cancellation rates still extremely high, the reality is builders are going to continue to struggle.

This pretty much puts to rest the "dancing at the bottom" hype.

Do you guys have any thoughts on SNDK? It took a schlacking yesterday, like everything else, and its monthly RSI is nearing 30. It seems to be at or have broken support that it found in July.

Cheers.

Scotia Mocatta sells gold.

http://www.scotiamocatta.com/interface.htm

You can buy eGold.
http://www.e-gold.com/

There's BorderGold.
http://www.bordergold.com/

Here's a thread that mentions Toronto dealers
http://forums.canadianbusiness.com/thread.jspa?messageID=164913

Or you could buy the Gold ETF GLD & take possession in London.

I'm scratching my head about why spot gold keeps going down but GLD goes up?

Liquidity pumping:
Eurozone money supply hits 17-year high in January 2007. Well, maybe gold can start growing again a little more.
http://www.ft.com/cms/s/8710833a-c652-11db-be1a-000b5df10621.html

Does anybody have any insight on using adjusted (for dividends or interest) closes on charts? Stockcharts.com does but BigCharts.com doesn't. The charts and moving averages can be very different on high dividend stocks. I generally haven't used adjusted closes in the past and am curious that Stockcharts does.

MarketWatch: Triple Digit Blue Chip Bounce!

Kitco: Bargain Hunters Lift Gold!

Moral: Don't pay a bit of attention to the media. Especially those with an agenda.

ALOHA !!

Wavesmash posted ...
"Or you could buy the Gold ETF GLD & take possession in London."

The day you can take delivery from an ETF is the day hell freezes over. Where in their prospectus does it say you can take delivery in London and from which custodial bank and by what means? For ETFs to allow delivery defeats the entire purpose of ETFs for the BIG banks and the FED. I believe GLD and SLV state catagorically that their ETFs only "track the spot prices".

I would never buy ETFs if you want 100% insurance from a monetary crisis. Only holding physical gold and silver will ever give you a 100% guarantee. Anything else including EGold or GoldMoney or Perth Mint is held by other entities and you are low on their list of "owners" even though its your money. The other disadvantage is accesibility to your ownership. It is inaccessible 24/7 365 days a year in terms of delivery and the banks doors can be closed any time for any reason that they or their governments deem fit!

Buy gold futures and then take delivery..."what do you mean you don't have enough gold for me to take delivery?".

Become the Hunt Brothers.

Just a light comment on yesterday's blip. It now appears China can blow lots of wind around the globe in short order. The primary reason as announced by the Chinese was to clean house and rid the market of crooks, maniplulators and other undesirables. Of course these folk dont have any say in the matter and as yet and the Markets don't have an Eliot Spitzer on the lookout. Action in China is swift and unreported.

I did hear from a few in the know that China was not going to allow any blowup of markets in 2008 and that any damage control will be done in 2007. Does that mean we are in for more fireworks. It has been decreed that there must be no surprises in the year of the Olympics.

I think gold bars is the only answer.

C.Note says: “I'm scratching my head about why spot gold keeps going down but GLD goes up?”

That is strange, if I had to take a guess, it would be that the futures holders are getting margin calls and are being sold out. Still it is odd.

If GOLD trades down to 650ish I will add. Also looking to short before day is out. Sold out positions that did not bounce today with bounce.

Bill, great analysis on the margin call situation yesterday... what a bunch of bums.

WRT to another poster's comments. I'm of the opinion, as stated on my blog (Kingsland Report http://buttonwood1792.blogspot.com/) that we will not only retest low print of yesterday, but that with technical damage done, there is no reason to believe that we wont see at least a move down to 50 wk moving avg around 11,700, which would also be in between 50% and 61.8% Fibonnaci retracement. throw in the likelihood that China is not done engineering a p/e drop in is Shanghai markets, along with declining eco fundamentals in the U.S., I just can't see new Dow highs for some time to come unless earnings and guidance in April are stellar.

BUstudent,
Not sure about buying SNDK today but sure am looking at selling Arp 07 $35 and/or $32.50 puts at $1.60 and $0.70 respectively. If assigned, I would have a cost basis of $33.40 and $31.80 respectively. I would be okay owning SNDK at those prices.

Eric,

Ebay has an active market in bullion.

Scotiabank (Toronto) also has a metals desk.
I used to go in there looking like a chimney sweep and buy 100oz silver bars for 5.85 an ounce.
The clerks sneered at me, sometimes I wore flip flops and my best Pau Hana!! I pointed out that you cant mine silver for 5.85 an ounce. Good times.

I thought brokers in the US gave 24 hours notice on margin calls for equities?

more on the intraday slump from ticker sense!

http://tickersense.typepad.com/ticker_sense/2007/02/dow_calculation.html

Bill/All,

I do not believe the "trade data had fallen behind" excuse offered by Dow Jones. I noticed a few individuals indicated that if a trader was watching the index and the futures, he/she would have easily spotted a 200 point discrepancy. I refuse to believe that HB&B did not notice this and indeed profit from it. Indeed, I would go so far as to charge that this was engineered to profit from it.

Sell to the public with the Dow at 12,250, drop it 200 points in 30 seconds and then buy it back 200 points lower.

FYI, I have worked with trade processing on Wall street for more than 15 years. As a rule of thumb, stress tests on live trade processing systems involved envisioning the highest possible trade volume, double it and then allow 50% or more in increased future volume. Not having worked with Dow Jones, I am not sure what criteria they use, however, I would presume it would be comparable.

If their systems were unable to keep up with yesterday's volume (which I doubt), they should be firing a lot of their technical team. It also makes you think, "The richest entities in the world's richest country and they cannot purchase enough machine power to provide reliable trading." Sad.

ALOHA !!

Yes I agree Ebay does sell all kinds of bullion in the form of coins and bars. Problem with EBay is it's a better place to sell than buy because 99% of the time EBayers bid up prices way above spot or above premiums charged by dealers. Why? Well, two reasons ... One is competition and all that ego stuff!!! Two is usually EBay bidders can't afford the minimum purchase restrictions dealers have. Some dealers require a $2000 minimum and the more you buy the less the premium. Due to that you get bidders on EBay just buying one coin or one bar, which is okay because that is all they can afford.

I have used two dealers in the past without riffraff:
CNI-California Numismatics
Link: http://www.golddealer.com/bullionpage.html

APMEX-American Precious Metal Exchange
Link: http://www.apmex.com/

Biggest bang for your IOU(buck)...
Gold-Krugerrands, British Sovereigns
Silver-rounds and 90%bags

People say the purest is the best ... In that case then go with Maple Leafs. An FYI about British Sovereigns ... The US Air Force provides a rescue kit to all pilots in the event they are shot down. Instead of providing US Dollars they use British Sovereigns ... NO PAPER !!! Why? Because a Sovereign has been around since before the 16th century and the entire world, even people in the jungles of Borneo or the hot sands of the Sahara, accept it! It's the American Express of GOLD! Plus the US government and the military know that gold will still be money even after the US dollar and all other paper fiat, including the Euro, are dust and distant memories!

SPY and S&P gains today (on 1-day comparison chart on Yahoo finance) consistently show SPY 0.5% higher than S&P gains.

http://finance.yahoo.com/q/bc?s=SPY&t=1d&l=on&z=m&q=l&c=%5EGSPC

Any idea why it happens. TIA.

Alot of talk about HBB engineering a "data crunch" to profit at our expense. I think they absolutely made money by selling stock before the programs were allowed to hit the market at 3pm eastern. And the specialists were right there with them lining their pockets (in some cases HBB IS the NYSE specialist). Did anyone see them drop Citi and KO? Those stocks usually are extremely liquid and hard to move-especially Coke. Somehow in the span of 30 seconds both those stocks were taken down a point, putchased, and shoved right back up a point. We were all trying to figure out if the trades really occured. You bet they did. Nice job if you can get it.
Back in December I opined SNDK probably needed to decline further, and said 2 levels made sense-33 and 36. With the monthly RSI now under 30 I would watch these levels and look for a good entry point. I would especially like a key reversal day or week to trigger my entry. Also with the implied volatility in the 6th or 7th percentile I would consider an outright purchase of longer dated calls and perhaps a near term out of the money call purchase and put out of the money sale to synthetically create a long position.

Bill,

Can you review what indicators/techniques you use when going short a stock/ETF/index.

on the crash of the Shanghai stock market:

"take the money and run"
http://chinamatters.blogspot.com/

FWIW, future tells, clues, bellcows to the unwinding of the carry trade. As hedge funds and others unwind the NZ dollar weakens; yen strengthens.

From Everbank's Daily Phennig email:

". . . a chart yesterday ... made it abundantly clear that the carry trade was being reversed. The two best performing currencies yesterday were the Swiss Franc and the Japanese Yen. The worst performing were the traditional benefactors of the carry trade, the high yielding currencies of South Africa, Brazil, Iceland, Mexico, and New Zealand. While the sell off in the South African Rand could be blamed on the big drop in gold, and the selling of Brazil, Iceland and Mexico could be blamed on a flight from emerging markets, the sell off in the New Zealand dollar confirms the beginning of a reversal of the carry trade."

May be prudent to keep an eye on it.

Bill, you nailed it.

Thain, the CEO from the NYSE is speaking on CNBC right now and the guy totally dodged answering this question:

"Are you quite confident that should something like this happen again that the system here will be able to handle it?"

Interestingly NASDAQ had no such "messaging" problems. What does that tell you?

Gives you confidence in the markets, doesn't it?

Why would the rational explanation of selling out accounts have such a reaction on the DOW and not the NASD?. Shouldn't the NASD matched and been relative to the free fall of the DOW?. Thanks

The sharp 200 point drop was actually predicted by the futures market.The DJ futures trading on the CBOT took a dive a full 2 hours before the actually index. Any future trader could have taken advantage of this. Here is a link http://www.informationarbitrage.com/

This seems to be a more rational explanation. A broker account liquidation would have shown up across all indices.

Bill , Nice Article. I fully agree.
Need to know the play ground.

Dow futures have turned from plus 24 to minus 24 over the last 90 minutes. Gold did a double bottom at 660 level on the charts in past two days.

Should gold sell off, my bellcow is determined by checking relative price performance during the decline.If traders and institutions do not want to sell a particular issue down then there is a good reason.

You noticed that I changed from RGLD to AEM at one point and it switched again on last extended decline. There are usually 2 or 3 good candidates produced by that screen and then I attempt to divine institutional support. I then track the price behavior of my bellcow. It strongly tends to foretell moves, both up and down. If the bellcow starts to struggle my antennae go up.

Good luck and good trading everyone.

While I was composing Dow futures dropped to minus 57.

G/L and G/T.

Here is likely cause. Notice the chart of the FTSE. This market often gets "news" (wink, wink) before we do.

http://www.marketwatch.com/quotes/?sid=123797

Be safe people!