Traders need to watch Goldman Sachs (GS) today. They are reporting quarterly earnings before the open. I believe the direction the stock moves today will effect the overall market.

Michael gave a terrific interview on J. Puplova's show (financialsenseonline) week before last. I bought his book and will finish it this week. Though, a book titled Financial Armegeddon, even though it purports to guide you, does cause some trepidation when one cracks the spine!

Japan sets up minimum wage raise

http://news.bbc.co.uk/2/hi/business/6445087.stm

inflation?

bill,

first i wanted to thank you again for your great "credit suisse" post. one of the best overviews on subprime, alt a etc i´ve seen so far.

looks like the dominoes are falling

CDOs May Bring Subprime-Like Bust for Buyouts, Junk-Rated Debt

scroll to the 2nd. post

http://immobilienblasen.blogspot.com/

Hey folks,

Looks like I was right on my IVAN pick of a week or two ago. Also, could Bill or somebody please explain the implications of this Russin company buying Crystallex, i.e, the was this thing will play out from here on in? It does seem Chavez may be happier playing pass the perogie with a Russian company than with our own, sulfurous devil of a fellow. Any ideas?

Chris

Maybe I'm gonna be provocative, but I just have a strange idea: if US government will back big banks with big troubles, and many people are so deeply in debt that they can simply work during their whole lives to pay for it, without owning anything for real (no property), I'm afraid that US is going to test a (old) new kind of communism. The actual ownership of most properties being ascribed to the state, or to an oligarchy. But even worse, the interest of these owners is not the wealthiness of the whole community, but just their greedy survival. Hmm, maybe today I just have a bad mood. But thanks Bill again for your usual great info and opinions.

Offtopic Bill,

When will we see PDAC updates? Will this be a paid feature on billcara2.com? I would have loved to go but work kept me tied down.

I am anxious to learn about uncovered junior golds from the show.

Hi Bill,

I thought your post last night was awesome. Your site is always my starting point for information, and the stats, charts, graphs, etc. that you post are nothing more than solid information. My grandfather lives in Southern California now, an American for about 30 years. A real patriot he is. He still thinks the US should make everything at home...
Anyways, I often forward him your articles that address the current situation, and although its not a good feeling to be the bearer of bad news, I'm sure that what I say or send him from your site makes its way into conversations with friends. It's too real of a situation to ignore. I was there over Christmas holidays and after hearing stories of the real estate market and borrowing against artificially inflated home values, seeing first hand the development, everything seemed just a little too good to be true. I for one agree with you that the US is in trouble. The excess is simply not sustainable.

Have a great day!

LEND down 50%...

Did smaller traders who shorted or bought puts on NEW and LEND make a lot of money? or did the big boys short it a long time ago on the way up?

Lelik -

It is not a new kind of communism we will be enterring but an old kind of fascism. When the interests of the state and corporations are the same it is fascist.

I was sickened by Moody's decision to raise (!?) credit ratings on big banks because they expect the federal government to bail them out if the banks fail. Is that what is left of the free market? Private profit, public risk?

An aside - I saw two paper shredding trucks parked on Park Avenue this morning.

There's been a noticeable divergence between HL, PAAS, SRRI and SLW, with the latter trading significantly lower than the others.

In a research report Monday, a Sprott analyst by the name of Stein reduced his 2008 cash flow estimate on Goldcorp (GG) to US$1.61 a share from US$2.19, citing in addition the partial sale of Goldcorp's stake in "highly profitable" Silver Wheaton Corp. (SLW).

Not sure, but if the selling was over the past month, it could explain the divergence.

Disclosure: Long SLW & HL

Hi everyone-

I have a question in regards to GG: Does anyone know the reasons of GG's underperformance of the past few weeks vs. AEM or GDX? Based on fundamentals, it appears to me, a novice, undervalued in comparison, so I must assume there is something other people know or see that I don't.
Any input from the insightful is appreciated.

Not long yet, but thinking about it.

Seamus,

goodness, can't believe the timing of this. Your post came in while I was typing my question.

ALOHA !!

Thank you Bill for talking about "survival". It gets old to be called a "thread killer" or "gloomypuss" or "pessimist" ... I am none of the above and I constantly tell people that I am just being "real" ... I'm a "realist". To me that is GOOD!!!

I am tired of hearing about how this American Dream will just go on and on forever. Hey ... there is no forever for enything. Everything has a cycle. Cycles go up and down. Every Empire falls. ACCEPT IT !!! IT IS REALITY !!! The sooner you accept it the sooner you will be able to do something about it ... As Darwin pointed out a long time ago ... ADAPT OR DIE !!! Reality did not wait for Goldilocks ... Reality did not "spare" Goldilocks ... REALITY IS TODAY !!

In 1997 this diagram(see link below)first got my attention regarding consumption and survival in a collapsing economy. I remembered it for a long time but lost the source. Then in 2001 after the Tech crash I started looking for a new investment vehicle that was at a cycle low. I then ran across a chart of gold 1975 to 2001 on Kitco. Gold and silver will protect you through bad times. How do I know? About 5000 years of history is all I need. Gold and silver are the "REAL DEAL" unless you own them in a ETF.

My survival plan was then complete. Don't even think in terms of a depression think in terms of a lost job or health issue. How do you survive? I recall back in the old days my grandparents talking about how they survived the depression living on a farm in Haynesville, LA. What better insurance can you have against a depression knowing that your basic needs will be met even if SafeWay is half empty or closes? Katrina showed that as of today every WalMart and SafeWay has a three day supply chain. If no trucks made deliveries for over three days the stores would be empty. I for one do not want to depend on that! I then looked at a plan to buy a farm and researched the most prolific place on Earth to grow plants with the least effort. I also wanted the most moderate and ideal climate in order to minimalize utility bills. I came up with Hawaii. I researched all the islands by taking a trip to Hawaii in 1997 and 1998. In 1999 I bought on the Big Island of Hawaii on the windward South side. Here I am ...

I urge everyone to look at this link to the original diagram I saw back in 1997. The diagram has been updated for 2007. As long as World population is increasing along with monetary supply there is no way commodities will go down, especially given the production shortages now faced by miners and oil companies. Folks, twenty years of stagnate and falling commodity prices have all but dried up exploration, hence supply. You just don't go out and find a Northern Dynasty-NAK property overnight. Even after finding a huge deposit it takes another five to ten years to get any production.

Link: http://mii.org/

You will be amazed at this diagram. I lost this source for about ten years. Last night I decided to try and find it again. I FOUND IT!!! YEAH !!! Interesting that it comes back to me in 2007 ... SPOOKY-KY-KY-KY !!!

One of the most important issues is DEBT ... There is NO WAY to survive with debt. That includes a mortgage. Prioritize your income ... I paid cash for my Hawaii farm in 1999 even with interest rates at 5%. If you own a mortgage you then have to accept that if you gamble in the stock market you are really gambling with you mortgage. Any lost funds in the market could have gone to pay off your house. The money I have in the market has no MARGIN. I consider mortgages as MARGIN. Think about what you are doing because there is more at stake than you think ...

A little off-topic but I can't off-hand recall Bill talking a lot about Private Equity - the bubble replacing housing as we speak. It seems tailor-made for your concerns over social equity Bill. (Forgive me if you've covered this already and I somehow missed it.) Econotech does a great job of skewering this from the social equity angle in a post entitled "World Needs Better “Face of American Capitalism” than Private Equity, Goldman Sachs, Media “Freak Show”: http://econotech.blogspot.com/2006/12/1219-world-needs-better-face-of.html On this front I found this comment by From John Kay at FT yesterday - too funny: "Sitting on my desk is a prospectus for a fund of private equity funds. It offers me some of the best names – Blackstone, Permira etc. I have just received a large cheque for my holding in Equity Office Properties and, if a similar bidding war for Sainsbury’s takes place, I will have a lot of cash to reinvest. But wait a moment. Was it not Blackstone that just bought Equity Office and are not the names in the frame at J Sainsbury almost exactly those in my fund of funds? The prospectus invites me to buy Equity Office Properties and Sainsbury from myself, at prices around twice what I recently paid."

Does anyone have any idea why the VIX has just shot up around 11:20, and then torqued around a bit? I'm off news today, so I don't know what could have happened at that moment.

IEA Warns on Lower Global Oil Stocks
Ahead of OPEC Output Policy Talks
By AYESHA DAYA and ADAM SMALLMAN
March 13, 2007 11:57 a.m.
The International Energy Agency warned Tuesday that global oil and fuel inventories were being sucked lower at an unusually high pace this year, leading it to fret about demand being met in the coming months and amplifying the need for more crude from the Organization of Petroleum Exporting Countries.
The agency's widely anticipated monthly assessment of the global oil balance said that stockpiles of crudes and fuels held by the Organization for Economic Cooperation and Development group of industrialized nations were falling at a pace of 1.26 million barrels a day so far this year and could spell the largest stock draw in a January-to-March period in more than 10 years.
The IEA, which represents the energy security interests of the OECD, also red-flagged an unusual draw down in crude stocks.
The stock draws are happening because of unplanned refinery outages, high crude demand in Europe and high U.S. fuel consumption. Saudi Arabia's Oil Minister Ali Naimi last year led concerns among OPEC members over ballooning inventories, which in September were more than 120 million barrels higher than a year previously. That fact was cited as a justification for production cuts agreed by 10 of the cartel's members with output quotas, as they eyed sharp declines in the price of oil through the new year.
The 12-member OPEC holds output policy talks Thursday in Vienna with Angola as a member for the first time.
The IEA said daily oil supply from the OPEC-10 fell a further 365,000 barrels in February to 26.8 million barrels a day and has fallen by a million barrels a day since September, 700,000 barrels a day below its promised cuts.
These cuts contributed to OPEC's effective spare capacity climbing 12% to a potential daily output of 2.8 million barrels last month. The slowly swelling spare capacity, admittedly from a historically low base, is cited by some analysts as a reason why oil prices should fall.
Daily output last month by OPEC averaged 30.2 million barrels, 400,000 barrels less than the agency estimates global consumers need from the cartel.
In February, Iraq ended four consecutive months during which it shipped less and less crude, with oil supply up 11% to 1.88 million barrels daily.
However, its output targets have been downgraded owing to delays and the insurgency in the country, with a 2007 target of 2.1 million barrels a day in sight by the end of this year. Despite the recent seesawing of stock markets and heightened anxiety over the pace of U.S. economic growth, the agency, which relies heavily on OECD and International Monetary Fund global economic forecasts, maintained much of its world oil demand expectations from a month ago.
Growth is seen at 1.8% this year against 2006, or 1.55 million barrels a day, with daily consumption of 86 million barrels. But the warmer-than-expected winter forced the agency to cut a hefty 360,000 barrels a day from its demand growth estimate for the first three months of this year, with growth dropping below 1 million barrels each day and demand just below 86 million barrels a day.
The agency's next monthly report will be published April 12.
Write to Ayesha Daya at ayesha.daya@dowjones.com and Adam Smallman at adam.smallman@dowjones.com

I sold PBR today because it seems that when the market weakens emerging market stocks seem to fall more than US domestic oil equities. Long COP and PPP looking for a domestic replacement for PBR.

Last night I mentioned a New Orleans mortgage broker friend and a discussion we had 8-10 days ago. I received an email from him this a.m. and this is his take on things. Just another viewpoint, Not a recomendation. No positions.

I think New Century is toast as are most of the other
non depository B/C lenders. However, in a way it looks
to me as though the big banks and Wall St want to
squeeze out the competition and force New Century and
a few others into bankruptcy so they will end up with
larger market share. As a contrarian I would start
looking for oversold candidates and possible
survivors. At this point a couple come to mind:
Fremont General(FMT) and IndyMac Bank (NDE)., but who
knows!!

The key words are "WHO KNOWS."

looks like we're getting that recent market lows retest after all, gonna be a lot of double bottoms shaping up in some very nice groups soon...

:)
Ralph
http://blog.successfulonlinetrading.com/

US Gold has been grinding lower over a couple weeks with a sort of cratering today. Is today's action due to the Goldcorp slaughter. i.e. McEwen is holding a chunk of Goldcorp stock?

Writersblock--the market is tanking dow down 159 as I write....retail sales down, loan defaults increasing, financials/brokers getting bear raided....

Thanks, Leisa. I did turn on the news after I posted, but didn't hear anything new. I'm pretty sure all that data such as that on retail sales and loan defaults came out much earlier this morning, but then around 11:15 or so, some heavy block trading started pushing everything down, apparently. Or maybe that's the very moment the oversold condition turned overbought. I don't know. It just seemed to me that there might be something else floating around out there. Guess my spidey sense is tingling, or something. :-)

Maggie

Leisa, I just wanted to thank you again for answering my question. If I had not been able to get more information, I would be really upset right about now. :-) Posters like you are another reason I read this blog regularly. Regarding the data: my dad always says that all data shall be interpretted as good until it isn't. I guess that's what's happening today.

Maggie

I feel like I'm living the chinese proverb about "interesting times". I'm long and underwater in GG, SLW and UXG. Doing well in EGO, PAAS and SSRI. Is it time to double down in the losers? I'm more of an investor than a trader.

Ralph-

How can you see a double bottom BEFORE THE PRESENT DOWNMOVE REACHES PRIOR LOWS AND BEFORE A SUBSEQUENT COUNTERMOVE THEN FORMS A SECOND BOTTOM? Not even Bill's Crystal Ball can do that and it's pretty damned good. That must be a helluva service you have there.

MarkM,

Check in with me in a few days, I'll point out a bunch of double bottoms for ya...

oh MarkM, if I recall correctly your crystal ball was calling for more upside, might need some polishing there Mark, LOL!

Maggie, I'll offer this up:

At 10.46 a.m. FXY (yen ETF) started gaining in strength--no one is talking about that on TV. I know about it only because I own FXY.

It's worth noting that the FT had a great article about China potentially diversifying into Yen. That was in yesterday's edition. That certainly has to scare the bejeebers out of short-yen folks.

Ralph-

Nope. What I said was that calling for a retest was consensus so that made me leery. I also said that a move downward would need to be precipitated by news in the credit markets. Got it? Read the headlines today?

If not , here is our exchange on this topic from a couple days ago in full:

"Ralph-

The "test of the lows" forecast has become consensus. That always concerns me.

From my cycles work the markets have re-established upward momentum but it is nascent and the psychology is fragile. Notice the action on the NEW bankruptcy rumor that started midday Thursday I believe. Market sold off hard for a half hour.

I notice that the stories on Alt-A are being trotted out (read : buried) over the weekend. I would not be surprised at more upside action or a news event derailing what I think is a countertrend bounce either. Since this market is credit driven that would have to be news derailing further the rate cut mantra or further heightening of credit risks to HB&B. Just my take."

Here is your response:

"MarkM, thanks for your comments, appreciate your concern over what too many people are predicting, good point!

Cheers,
Ralph"

Now this is all fun and games until it isn't-- which is at the point people start misquoting me. That is because I take my responsibility to Bill's readership a little more seriously than most. I don't have a service to sell here and Bill tolerates me because I tell it just like I am seeing and trading it.

Best,

Mark

Ralph speaking to MarkM?

I hate it when guys max out on testosterone.

MarkM, i notice you didnt quote me saying we were looking for a retest of lows, but nuff said, I'll let you continue to think fondly of yourself and as an icon of this great blog...l8r

Kaimu, almost enjoy all of your post’s thank you for your efforts.

Just a quick question do you consider CEF better than GLD or just the same as GLD?

I think it is clear you have a preference for bullion, but just wondering about the above.

TIA

Off Topic: On a side note, one of the things I really like about this site is that people tend not to attack each other personally, but professionally about their difference of opinion. What a breath of Fresh Air! Ah give me hit.

Uhhhh, tell me I'm not headed to the woodshed with Leisa again guys. I about didn't survive the last one....

Wow, another expensive lesson in the positive correlation of PM miners to market declines. At this point, although I trimmed another 10% of my equities exposure this morning, it seems reasonable just to hold all my PM equities and ride it out. Somehow I can't see selling now because if the market keeps getting worse, at some point PMs rally due to the "safe haven" effect. Or do they?

MarkM...I still smell like smoke from our last trip to the woodshed...but if you and Ralph don't play nicely we'll have to go to that woodshed..smokin, drinkin and cussin builds comraderie

No, you're alright MarkM.

I'd just let it go and not hit the send button for the rest of the day. The regulars know you and your record.

aleisen,

I'm actually very much thinking the same thing. The fundamentals for Gold should help it move in an anti-correlated fashion with the markets if there is a breakdown in this credit-driven market. Although the miners are subject to wage inflation, cost of operation, etc... in the end, they are the ones who supply the gold that is in demand at a price that is bound to increase, so they should reverse. I especially am wary of letting go many of my PM positions NOW, after such heavy declines in the past 2 weeks. I should have better implemented stop-losses, especially at such a volatile time.

Anyone else have an opinion on this? It would be welcomed...

Long: GLD, XGD, various miners

Aleisen -

Bill has been indicating that you may want to stick to the miners that are generating earnings growth this year from bringing mines online. The bear will value earnings above more speculative plays and these miners likely will outperform the others.

I think iTulip is right - we are in an all assets down phase (except for the yen) as the yen carry trade is unwound. No place to hide.

ALOHA !!

Bundesbank confirms it will not sell any gold reserves this year
By Jon Nones
13 Mar 2007 at 02:07 PM

St. LOUIS (ResourceInvestor.com) -- Bundesbank President Axel Weber said today the German central bank plans no substantive gold sales in the current year of the central bank gold agreement and has made no firm decision for next year. The Bundesbank has already sold 5.3 tonnes of the 8 tonnes of gold it had set aside for gold coins.

Link: http://www.resourceinvestor.com/pebble.asp?relid=29796

Here is the first Central Bank(CB) to publicly claim they are not selling gold in 2007 and are thinking of not selling in 2008. Which CB is it? GERMANY ... Germans know all about fiat monetary systems the hard way!

I am providing a link here to the entire article. Please note the chart at the bottom showing how low CB gold sales are compared to last year. How long before CBs are buying? It seems its all "paper" manipulations and FED spin now ...

Telestar3d ... I lump CEF in with the other ETFs with one distinct difference. At least CEF isn't shuffling its gold to various "custodial banks" worlwide like GLD and SLV are. Still small consolation if you have no way to sell ...

Telestar3d, thought I would add my feedback on CEF.

It is less liquid and less well-known than GLD. I bought a few months ago and have had less success than I did last year with the straight GLD ETF. It also holds both silver and gold, while GLD just has Gold. It seems pretty range-bound where it is now.

The web site has some good points.

http://www.centralfund.com/

It also has a good links section for gold investors.

http://www.centralfund.com/links_and_related_sites.htm

Here's my conundrum regarding today. All of what happened today was self evident 6 mos ago. Of course, I was early to the party and lost money on my forecast which hit the market's psyche today.

Yesterday I bought MS puts based on the news release that I posted for you. I sold them today for a 70% gain. I've let so many options go from green to red, I've taken on the discipline of being early in taking gains on them. I only bought 10, I wished I had bought 1000, but if I had, it would have rallied!

I bought WFC puts this a.m.

I am keeping my core miner holdings and offsetting the losses with shorts. I think there will be an excellent opportunity to add some more miners around HUI 275, if we even see that level. Unless there is a market meltdown - all bets are off then.

Chart here:
http://bp1.blogger.com/_sNBXCBFirO8/ReeZjMGMvpI/AAAAAAAAABI/RPBuQ0hGtdk/s1600-h/HUImonthly.jpg

XAU closed below 131, which had been good support in January. I think the miners will put in a lower low in this downdraft. Pay attention to which miners are performing better in the correction. To my eyes they are the ones with earnings growth in 2007. They may even be very attractive on a P/E basis when the selling ends.

While historically (as much as someone 36 yrs old could use the term) a market bear I am with the person from Nawlins on there being a buying opportunity in the names that will stick around starting to show itself in the lenders. I'm going to pick up some of the names that pay enough of a dividend to make a difference, and then sit back and try and ignore the volatility. Also, I've heard some good things about LEND even with the nightmare unfolding today. If I had the resources to take on major risk I'd take a flyer on the fact that they are trading below book and might get rescued by someone with the cash to take on their liabilities which are not as bad as NEW from what I understand.

Subprime issue (from the perspective of leisa-land):

Tech bubble bursting threatened financial institutions. Fed wratches rates down to heretofore unseen bargain basement rates. Even with systematic increases, the fed rate is far below real interest rates (which means that money is really free and you'd be a full not to leverage and buy a rapidly appreciating asset). Accordingly, speculators borrowed this cheap (free) money and bought assets: real estate, stocks--heck look at the price of antique cars. So you have bubble transference.

Housing suddenly gets bid up--remember people who would list at 9 a.m. and have a deal by noon for above their asking price? Well, this type of activity brings others in. They can borrow cheaply and flip quickly. (Only a fool wouldn't do this). Prices then went out of reach of people who normally would qualify. Make no mistake....this is not about lending money to deadbeats ,as I have seen explained to my horrified dismay. It is about "tuning" mortgage products to get ordinary people into outlandishly priced assets. People are qualified for the lowest interest rate rather than the expected interest rate. Negative amortization loans are made by some (Golden West); just about all of these loans are adjustable rate mortgages. Now, we have the following:

* The music has stopped and demand for housing has abated. When supply exceeds demand, prices fall. People are worried about loan to value ratios; meaning collateral can be impaired--margin of collateral safety deteriorates for borrowers and lenders.
* Because so many ARMS were made, those rates are starting to reset, and they are causing concern because that makes the payment unaffordable to borrowers. Some of these resets are increasing payments by as much as 50%. That stretches people's budgets. (remember the Fed has been raising rates all of this time).
* Blood starts to run in the streets: homebuilders are writing down their assets. We've YET to see the asset write downs in the lending arena--that's the next blood bath, so I say that we've seen nothing yet. We are just smelling smoke...flames are NOT lapping at our collective arses yet.
* Now that these specious lending practices and their commensurate risks are being realized, people are starting to panic. The faucet is now being turned clockwise (toward off). That means liquidity dries up. Liquidity is the lubricant of all asset price increases. Asset prices (homes and stocks) are declining, and people are highly leveraged (margined in their stock accounts and their homes). When people are highly leveraged, they have to seek equilibrium (or their lenders will seek it for them). So assets go on sale. Assets are on sale now. Houses are on sale. Stocks are on sale. That antique car you've been eyeing will be on sale too.

Loss of liquidity =====> decline in asset values====>writedowns on balance sheets (and lower earnings)=====>blood in streets.

I'm sure that someone could do this better and shorter, but there's my stab at it.

re: SLW share price decline...

I don't think GG selling its holding is a factor. GG owns its SLW shares in its subsidiary, Goldcorp Trading (Barbados) Ltd, which last sold 18 million sh. on dec.12,2006, leaving a balance of 108 million shares.

I bought several thousand warrants a few weeks ago; hence, am suffering a hit.

joining the sub-prime mortgage discussion:
I hold puts in 3 candidates, including leap puts in MTG; and I reproduce this precious little piece - one of many - from its Form 10-k, dated march 1,2007:

As discussed in "Critical Accounting Policies," consistent with industry practices, loss reserves for future claims are established only for loans that are currently delinquent. (The terms "delinquent" and "default" are used interchangeably by us and are defined as an insured loan with a mortgage payment that is 45 days or more past due.) Loss reserves are established by management's estimation of the number of loans in our inventory of delinquent loans that will not cure their delinquency and thus result in a claim (historically, a substantial majority of delinquent loans have cured), which is referred to as the claim rate, and further estimating the amount that we will pay in claims on the loans that do not cure, which is referred to as claim severity. Estimation of losses that we will pay in the future is inherently judgmental. The conditions that affect the claim rate and claim severity include the current and future state of the domestic economy and the current and future strength of local housing markets.
In 2006, net losses incurred were $614 million, of which $704 million pertained to current year loss

end of quote: I cut and pasted!

I love it! reserves are established, having regard only to loans already in default; and in the subjective judgment of the management...with declining originations, what will fund the indubitable defaults of tomorrow and tomorrow and tomorrow?

Fazeli,
Regarding your situation with PM stks, not knowing what your holdings are, let's use goldcorp as an example.
In the TSE, it closed at $27.35 today (tue). Looking at weekly charts, there is support around $27 from an uptrend line
dating back to May 2005, so I would expect a bounce soon. If not, there is downside risk to around $25, since
goldcorp could be in a trading range between around $25-35 in this phase of the gold bull (vs. $15-20 that lasted
for years before the last run-up to the May 2006 high).
Drilling down to the daily charts, it looks very bearish and I would expect any
bounce to be stopped around $29-30 (horizontal resistance). It's all a matter of what time frame you are
implementing your investment strategy. Over a very long (multi-year) timeframe, a gold bull
would not be too concerned if a stock consolidates in a well-defined trading range to digest a prior move,
before moving on the new highs. So in goldcorp's case, a long-termer might set a stop somewhere below $25, a
medium-term trader looking at the weekly charts would set it under $27,
a short-termer looking at daily charts might have set it in the low 30's (trendline from Oct last year).

One key point is to come to grips with your emotions now. Define your investment time frame and accept the
gyrations that happen within the price range of that period. If you can't be comfortable with the price swings or
have the patience to sit out a consolidation, then switch to a shorter time frame.
But set a stop-loss no matter which time frame -- there could be company-specific issues,
and even a bull mkt can have severe multi-year corrections. Marc Faber has
noted that in the last gold bull, there was a huge pullback prior to the late-70's rally into the end of that bull mkt.

Regarding your point about gold being an anti-correlated play in this credit mkt breakdown, I believe that is
true long-term as I expect the standard liquidity pump solution to be employed in an unprecedented scale soon.
Now whether that will succeed is another issue (I'm afraid not this time and tend to side with Bill's depression scenario;
I just don't see how you can entice consumers to borrow more when mortgage standards are being tightened
and when they're worried about their own jobs, and therefore don't see how most businesses can have the courage
to increase capital spending when the consumer-driven economy is pulling back).

In a severe recession / depression, you can expect wage inflation to be contained as unemployment soars.
You can also expect overall commodity prices to soften due to reduced industrial activity. Both will reduce miners' costs.
In the face of competing currency devaluations brought about by gargantuan boosts to money supply,
the public (and institutions) will increasingly turn to gold and silver -- it has been
in our DNA to associate them with stores of value, and despite what CNBC or others may say, it's not that
easy to erase what has been programmed into us for thousands of years. Fund managers are human beings too
with the same DNA, so we can expect their speculative spirits to work into gold eventually in a huge scale that will
drive gold into 4 digits since the gold mkt (bullion, stks) is so small.

But in the meantime, mid and large-cap PM stks will suffer along with the mkt as institutions raise cash. Only
select juniors/small-cap PM's seem to be relatively unscathed (so far). After seeing what happened to PM stks last May
during that Yen-carry unwind, I was watching for that risk this time around and acted defensively after Feb 27.

For the record, I expect there to be a recession this year and an overall bear mkt for the next 4 years (but watching for
a good long-term PM long entry point this year).
That is just my general long-term thesis; at the end of the day, price action dictates everything.

Some other trading thoughts to reduce the chances of getting into the bind you are in right now:

1. Plan the trade and trade the plan. Think in IF-THEN terms: If a stk does this, then I'll [go long, short, add to a
position, take profits, get stopped out]. Don't think like: "This stk should be going up, darn why is it sliding down?!$#@*&"

2. If you have a long-term gold bull thesis but find that it gets in the way of a shorter-term trading
timeframe that you're operating in, then don't think of your PM holdings as PM plays. For example, think of
goldcorp as an anonymous "XYZ" symbol and trade the price actions and indicators accordingly.
Better yet, imagine it's a long-term bearish stk like a homebuilder ;-)
That will help remove any bias when you manage your positions.

3. Trading can be scientific, and therefore, in fact, cannot be exact (Heisenberg uncertainty principle, or better yet,
chaos theory).
Rather than being frozen like a deer in front of headlights, consider spreading adding/reducing partial positions
over a period of time according to price actions that confirm your expectations.
Commissions are pretty cheap these days, but be on guard against over-trading (which looking back will
seem like thrashing around too much -- it's a matter of constant readjustment).

Hope this helps!

This is a GREAT site. Many many thanks to Bill Cara and to the various contributors who share their thoughts.
I have learned a lot.

rico

GemmaStar:

Follow-up to your question about Brinker's stance was provided by Mark Hulbert this evening:

In first place for risk-adjusted stock market timing performance over the last decade is Bob Brinker, editor of Bob Brinker's Marketimer. Though I had not yet received his March issue when I wrote my February 27 column, I predicted that he would not see the market's big drop on February 27 as reason to turn bearish.
I was right. In his March issue, which was received on March 5, Brinker wrote that "we would view a meaningful stock market correction favorably in terms of future market potential." Brinker went on to write that he does not believe that the correction experienced up until that point "has been sufficient to provide the type of health-restoring effect that is necessary in order to create a genuine buying opportunity."
To be sure, Brinker did not specifically update his advice following Tuesday's drop. But I'm confident he hasn't changed his mind, given that the DJIA is above the level at which it stood on March 5.

If you want to read the entire article, here's the link: http://www.marketwatch.com/news/story/top-performing-newsletters-remain-bullish/story.aspx?guid=%7B95CFF127%2D1F3F%2D4F09%2D8113%2DB257604F9436%7D

Stepping back from today's drop and the fact Asian markets have started out negatively (Nikkei 225 down 450 & dropping as I type), the below informative link (6 minutes) simply highlights the changing world. Something to keep in mind for the long term in changing markets of opportunity. You will need a media player. Turn up your sound.

Http://www.scottmcleod.org/didyouknow.wmv

http://www.scottmcleod.org/didyouknow.wmv

What are everyone's thoughts on Starbucks (SBUX)?

Is it just another KrispyKreme? Can it recover? I have no position but its on my watch list.
http://tinyurl.com/ywx8ql