hello from germany

Interactive Heatmap Over/Under Valuation Housing

A Warning on Risk in Commercial Mortgages

Three Strikes And Out, PIMCO on UK CPInflation

http://immobilienblasen.blogspot.com/

uh oh.....

U.S. April ADP goods ex-manufacturing down 22,000, 5-yr low

U.S. April ADP services jobs up 106,000, goods down 42,000

U.S. April ADP employment report up 64,000, 4-year low

lets hope the government is hiring......

Looks like we might be testing the trend line on gold today. See Twiggs gold chart and commentary.
Trend slowing at 650, danger of reversing at 630.

Keep the faith!

Bill,

Indian markets were closed for 2 days May 1 & May 2nd (Tue & Wed). The 'down 36' points on BSE you see is from Monday Apr 30th.

Anyone interested in building a position in India should consider IFN & IIF right now. Both are closed-end funds that have been trading at a decent size discount of between 10-12% to the NAV. They both traded at premiums much of 2006 and till March 2007.

This discount has been growing since past few weeks and could provide a cushion of 10-12% downside protection if/when a pullback happens this summer. See
http://www.blackstone.com/india-asia/india/fact_sheet.html

I think INP is a much better way to invest in India but right now it is the CEFs that seem to be on sale with a 10-12% discount to NAV.

Thanks for the report Bill.
These guys are real pro jockies. I like the tire inclusion. Great story, they need to sell it just a bit.

Hi....Bill;

I find the comment (First Page of the Report) about finding acceptable hedging for 450,000 ounces of gold interesting..

Isn't this a problem in a PM bull market????

Cheers...........DLB

PS:I own some of this stock....

the morning gap down may have shaken out a few gold hands...it turned around pretty quickly

DB,

I seem to recall seeing something about WGI having to hedge some gold production as part of a financing deal - - an unfortunate condition in a PM bull as you suggest.

Hi Bill and others

whoa, after a few days not having internet access I couldn't wait to come back and catch up. I could almost call this an addiction. You guys are great, and I learn something new every day, and nearly every post!

Bill,

I was wondering about your thoughts on energy. I have been reading a lot (and listening) to peak oil advocates who are claiming the enormous opportunities present in energy stocks (oil, water, etc.). Do you think you could ever put up a list of those 20 energy stocks you like or think have great potential, similar to the great job you did with gold miners, and tech stocks in the past (I wasn't a reader back then for the tech stocks unfortunately). I only ask because there are so many and I (as well as some others I'm sure) am really not sure where to begin. Your previous miner list really set a good starting point and allowed me to visit the sites, watch the charts and read over some (although I don't completely comprehend them in their entirety) financial information.
Perhaps you are following some energy stocks outside the US and Canada, or within. Of course, this would only be a list of those you consider great companies and by no means a recommendation. Hope you enjoy the sunny skies in Toronto today.
Best of health.

PS I can't wait for the book and more information on the Bahamas fund.

Hi...Manx928;

Thanx for the info...Lets hope the Jockeys find and use "accepatable" hedging .....

I like the story and Thanx for the report Bill....

Cheers........DLB

dxd at a new low... how much longer can the large-cap rally continue...maybe longer than seems reasonable, if you zoom out to a multi-year chart of the DJIA...long dxd

looking to add slv on a drop to 129...no positions in PMs right now

Western Goldfields "just needs to sell a bit"... Bill, you have said the key managers are "big company guys".

I'll be interested to hear whether they get your message when you meet them this week.

In my experience it's hard to teach corporate guys scrappy start-up tricks - like selling a promoting a junior miner.

(long WGDF)

Jock. The boys from Western Goldfields have all been around for quite some time. Maybe this time around its not big enough for their profiles. They need a good push to keep things moving. For some strange reason I think they are not too interested and might be looking for a suitor. Todays report is a start in the right direction.

Coal stocks seem to have caught a bid today.

Hi...Bill;
Thanx for the info it's much appreciated... Like I said.. I like the story and have bought in..

I'm a little reluctant ("Chicken") to buy into KRY because of the Chavez situation....The resource they are sitting on though is absolutely remarkable...

However...I'm betting the jockeys in Red Lake,Nevada,California and Mexico... The race is on....

Cheers and Thanx again...DLB

Eric--Top of the web site--GCIS 10 Energy sector has the information you requested. Bill has a lot on his plate and he provides this info for free. You have to research and make your own decisions, but the GCIS link mentioned is a great place to start. Good luck.

Conundrum of the day -

Experienced mining analysts, please help me understand ......

Among PM's, why don't Platinum and Silver command special immunity from the sell-offs that afflict gold ?

(After the May '06 peak, platinum fell nearly as far as gold; silver fell farther than gold!)

It's common knowledge that gov'ts often sell gold to depress its price, and to maintain faith in their fiat currencies.

It would seem gov'ts have much less influence over silver prices, and none over platinum.

So, why haven't these metals (and stox of their producers) become better bets for uninterrupted gains than gold or gold stox?

Side question: why are there so few silver producers, and yet fewer platinum producers?

Las Vegas Sands (Cara 100) reports after the close today. Wynn, LVS and MGM are up slightly in advance. MPEL hasn't moved. I'm interested in buying LVS, MGM and MPEL at better prices. Hoping that LVS misses and creates a sale!

Fred

I'm tempted to buy HL here. Sell off on earnings report seems misplaced and overdone.

Technically, the price just broke below its 50 ema. So I may wait for it to recover from here. There's a lot of air beneath it if it can't find some new support.

Opinion on XEG.to (Energy ETF) - noticed a cross of MACD 50 over MACD 200 yesterday, which i read is typically a positive indicator. (i'm new to this) My logic also takes into consideration trad'l summer driving season and potential disruption from huricane season. I do gather from reading that many share a conviction that a hefty correction within 9 months is quite likely. So thoughts on XEG in light of the above? Great site, very informative.

Correction. MPEL just jumped.

Fred

Any opinions on Coral Gold (CGR)? Rob McEwen had planned this one in his original UXG group and dropped it at the last minute. He did comment however that he might revisit the company in the future. It has come down significantly.

Fred

http://tinyurl.com/yvpdnv

Roger Nussbaum mentions a post from Tom Lyndon. He seems to use a methodology that largely corresponds to what has been my strategy, aided by software that uses an alpha roc measurement. Trailing stop losses are the safety net and religiously enforced by simply entering into a order. In a normal market this has worked quite well. Who cares about a trailing 8 percent loss after making double digits, and if one waits for a new uptrend in another sector there is always another horse to ride. Cash is fine until then. Very simple. No fundamental analysis. No hedging with options. No trying to anticipate with rotation theory. No story stocks to fall in love with. Diversification is accomplished by using different roc periods, which I am sure does not sound like diversification to many here. I'm here because fear of a severe market top became overwhelming. Trailing stop loss orders may never find a bid where planned. And, I have to tell you that it is a disorienting experience for a momentum investor to be hanging out with stock and value jocks. But, nonetheless, I feel the draw.

Stop orders: It might be time to revisit what stops are and are not:

http://stocks.about.com/od/tradingbasics/a/stoploss.htm

Good morning, Bill.

Interesting action in the PM field. SLW and AUY doing well despite the pressure on gold and silver. PAL rebounding nicely after a big a takedown yesterday.

Amazing what HON is doing today. RSI 7 daily weekly monthly all above 80 to start the day but here it is up 1+ percent.

Jock. It is very expensive to mine silver and platinum as compared to gold. Silver because of price and platinum because its so rare and mined in only a few spots. Furthermore platinum required a long process to bring to finished product.

Leisa Coal caught a bid weeks ago and my guess without looking at charts is that they are overbought. If you believe its NOT different this time, should get a backfill on crude testing
$ 60.47 per C.T.'s excellent work here in the next 45 days.

Eric your request for energy plays is why I offered HW to Bill (provide some diversity to his 100 list noting it is probably a bit top-heavy in miners which in this environment is not too surprising) last week noting its a sub 1 billion market cap. play WITH REAL EARNINGS AND GROWING in a variety of high-tech coal genres. I must give Jim Jubak credit here since he first started following the firm last March or so and added shares to his personal port. in Feb. I added HW to my IRA recently (my first trade here in a year-plus) at B.V. noting that pros have been adding here heavily and the final stops were blown-out yesterday on that old school dummydance before shorties cover (placing a stop within 1% of a 52 week low must be perhaps the most assanine thing I have ever heard of, talk about late to the game)! Ofcourse you can go after a high-flyer in solar, etc... with no earnings, however you risk a shit, shower, and shave, as opposed to getting a billion-plus in revs. via HW at 6X cash and a P/S of .75 cents.

Thanks for the daily access to the charts Bill, a real luxury.

Beat the Red Wings!

Time to accum. YHOO here? note Bill's rules.
Valuation too rich for my blood however word is Panama has turned the corner.....

Speaking of tech. Bill perhaps someday in the future you could explore the notion of how tech MUST move higher in a bull market; I appreciate the link to a lack of cap.ex spending here but like the suits say in a secular bear market "this is a stock pickers environment." Hence Amazon may move, but as for the rest of the gang ho-hum. See if HPQ's earnings changes all this for the moment (disclaimer HPQ is my second largest holding in my IRA noting it's a HOMETOWN play).

May God bless the Queen and bring the cup to Silicon Valley!

Also like HL bouncing off the lower dev (3) Bollinger. See some support back around 7.95; watching to see if it will break the Feb high 8.66 and then catch the 50 SMA. As I recall their silver cost is very low around $.23 or so. Going Long HL again.

Market continues to confound--"If you can't beat'em, join'em"--Long earlier this morning on GS.

All said and done, I can't help but think of last year around this time which might explain all the CB gold selling that appears to be ongoing. (suspect it might be the Chinese picking some of this up, but don't know).

Craig I believe C.T. had near-term support at $ 659, if that does not hold THEN $ 630 is the line in the sand. My guess is that P.M.s will be shaky going into next week per next FOMC meeting; a fair-sized minority calling for the next move being a hike but then again the 2 year is not behaving this way per C.T.'s chart.

Seamus noting the R.S. of the HL chart, entering shoulder season, note options action, testing $ 7.50 is not out of the question remember Bill's rules RSI too high here.

Rick--Yes, I note that coal caught a bid first week in April, and then quickly became overbought. I've been following them pretty closely. One little Chinese stock, PUDC.OB has already doublein price. It went from .88 per share and is currently trading at 1.76. I generally don't buy stocks such as this (and didn't). I did pick up some ANR. I also have some SSL (some coal ops).

I see HW is doing quite well today. They have lagged the group overall.

Rick45 agree on the options action; I have daily HL RSI7 at 24.96 (noting the weekly & monthly are higher) and believe the risk may be worthwhile.

A lot of factors besides besides RSI go into each individual's decision as Bill has pointed out. Different opinions--that's what makes markets!

Re HL, I have a stink bids in place in case the stocks breaks down more before the conference call -- which starts at 2 est.

The way it's trading now, it looks like I might get a fill.

Leisa PUDC.OB sounds rather dicey, my wife and I are expecting our first child next month hence such a picksheet play is verboten for me I will have to take your word for it :)

Actually HW and CNX entered into a deal recently, also HW bought some mines down south somewhere (want to say Alabama) so they are thinking about controlling costs via upstream and down action. I suppose HBB has to allow the shorties there to get their "nuts gathered" before the upgrades arrive for the "cover" to cover :)

Does anyone follow McClellen's report:
---
"Gold prices are
headed downward from here to a May 30
bottom, but that will not be the end of it.
Gold should see some more ugliness along
with stocks into a bottom due roughly June
20."

Since I don't know if this stuff is copyrighted, here is the link.
http://www.investorshub.com/boards/read_msg.asp?message_id=19306350

Any thoughts?

Well Said seamus, at first blush next support looks around $ 8 for a bounce to sell into.

JogyP "Big Mac's" call is on the shoulder season paradigm, I have been feeding my online account in preparation to add to my juniors; if crude does not hold $ 60 may be bargain hunting time :)

Bill suppose $ 630 IS the line since the last backfill took us down to what $ 595-ish; suppose the proper macro conditions would take-it to the moon through $ 735 (perhaps on China dumping their USD paper to buy every miner north of the equater...

Rick--congrats on soon-to-be arrival. Be particularly nice to your wife. That last month is a killer. You are embarking on quite a journey.

Thanx Horatio and Bill for your thoughts ...

Thanks Leisa, your correct everyday is an adventure.

The challenge for me at this point being 25% cash in my IRA and about 35% in commodities (including HW) is do I add the perfect miner? Ofcourse at one end of the spectrum would be safety with an AAUK for example with the dividend, international coal exposure, etc... OR go after more alpha with a junior....

LVS & MPEL
Snipet from Dow Jones News:
“Macau - a peninsula and two islands - is the only place in China that allows casino gambling. A monopoly on the industry was broken up a few years ago, and foreign gambling companies - mostly from Las Vegas - were allowed into the market.
This has drastically changed Macau, once a sleazy casino town infested with criminal gangs that often waged bloody turf wars. The flashy new Las Vegas-style casinos are pulling in hordes of mainland Chinese gamblers, who last year helped Macau rake in $6.95 billion in gambling revenue. That helped the city surpass the Las Vegas Strip, which earned $6.69 billion, as the world's most lucrative gambling center.“
Take note that revenues now exceed Vegas.Long both and hopefully for a long time.

i.e. should an IRA be 50+% in commodities?

Tele I bought LVS the day of it's IPO but sold long-ago noting the price of diapers; had some good times in Macau back in the day never had any trouble finding a mass the morning after (my spanish is decent enough to have been able to follow along).

Rick--I don't pretend to know a thing about any of this but I would posit the following:

Commodities will stay strong so long as there is expectation that the global growth cycle stays strong. But as we have seen, commodities can tumble in a hurry once a whiff of global softness goes into the market.

agree Leisa, thats why I am extra careful being an IRA. Plus its in an old school brick/mortar firm so trades are pricey; forces me to be that much more disciplined as opposed to cheap trading costs online.

Check ur email.

GE has returned to the bottom of mid-Jan. down gap ($37.50) on the strength of Citi break-up advice (and renewed participation to big cap euphoria). Will watch efforts to fill the gap with great interest. Absent a break-out (on the back of current swift momentum) above multi-year highs, watch out for double-top and below...

Any chance for a Friday ATH for S&P on the back of harmless (blah!) employment report? Great weekend headlines.

JML

Quite a moonshot today. A couple of more months of this and everyone will be rich! LOL

One of my micro-cap holdings was down 6% at the open but is now up 4%! 13 week T-Bill yield still dropping, which signals to me the party may end soon. But who knows with all that 'liquidity' out there. Someone is desperate that this market not roll over.

LVS & MPEL

Earlier I said "Long both and hopefully for a long time." LVS with a PE in the 70"s and earnings after the close I think I will pass and close position. The same goes for MPEL for different reasons.

So much for long-term, I guess my true self just surfaced.

Put a bid in for IBKR, that's as close as I'll get to Macau.

MU and semi's/igw are up but on light volume....how much significance to attach to this?.....I recalled hearing one of the ta gurus say that stocks can keep going up on light volume. Playing by a mechanical program I got a signal this monday to buy igw. Already have MU so I am holding.

On a sunny market day of heedless excitement, the Fed of NY warns of systemic risk for hedge funds (http://tinyurl.com/yp5pkg). A prophylactic record for future bureaucratic/political protection ("We warned 'em but nobody listened") or an astute signal to the big boys to wind down their run?

Next markers I would look for. 1) Renewed Fed speak re: risk mispricing 2) re: unwillingness to bail individual participants out. 3)big surprise: May Fed statement mentions past failures e.g. subprime and possible similar risks.

As a side note, I keep wondering who their counterparties are, if they operate on a similar VaR model and how much their position would suffer in a perfectly correlated market move (i.e. VaR with 1 correlation between all assets). Any thoughts?

JML

out of dxd/sds...only need one day of this :)

Hello Bill,
I just want to know if you've been able to register all the emails for the research list you talked about a couple of weeks ago?

WHR is at an all-time high. In a slowing housing market. Again, RSIs in the 80s. Is it time to stop the madness?

Rick and Leisa -

Isn't another factor causing those commodity pullbacks the occasional suggestion by Japan (last May, this Feb.) of less favorable terms for the carry trade? I think this causes hedge funds to unwind some of their commodity positions.

Leisa has something interesting on her blog re: hedge fund risks, in case any of you didn't visit today.

http://theperplexedinvestor.blogspot.com/

"In 20 of the last 23 days, the DJIA has closed higher (which has never occurred in the history of the DJIA)."

http://www.marketoracle.co.uk/Article912.html

that's good to hear, because i feel like i've jumped the gun 20 out of the last 23 days. not literally, of course, but for the last month, i've been the trading the wrong side (both long and short). selling quickly when you're wrong helps. but i still feel like a kicker who hasn't put one over the goal for a month. it affects your confidence after awhile, so i'm taking my own advice...sidelined.

Gold Miners finshed very strong today, most of them with higher volumes than avg volume.
NEM -
17.8 million vs Avg 7.2
25000 May 40 calls and 16000 June 40 calls traded today.
Other than an upgrade to Neutral, I can't find anything.

I think something's up with NEM.

glad to see the miners were bid up today...i was a little worried this morning. no positions.

Jock--

It's hard for me to make sense out of commodity prices. Ultimately the price is driven by traders. And that, I think, is a function of liquidity (yen carry being one item) and supply/demand issues though the two do not seem to synch up sometimes! And, it is possible, I suppose, that the two things can (1) work in the same direction--to drive prices higher OR lower or (2) work against each other (you could have high liquidity due to stimulate the economy, but demand may still be low) to keep prices in a tight range tilted one way or the other depending on which is heavier on the liquidity/supply-demand see saw.

2nd_ave -

I guess that we're cellmates then. I am also growing tired to run build a cluster of bad trades. Despite a greater patience and prudence than during the Fall leg of this run, I find myself pushing the line further and further only to be caught up by this unrelenting beast. At every whiff of weakness I perceive, this bull gets a steroid shot and trample even my outlier shorts. I am not reassessing my fundamental view, but I am surely humbled by how wrong my tune sounds so far. Oh well, back to the drawing board to fight the urge to trade against the grain and prepare for the 'right' time.

JML

Are you guys letting the market come to you? Any over trading going on? With bearish sentiment as high as it is, is the risk reward balance in your favor to go short? I know mo' is not in favor but it ceases to amaze me the staying power of a trend. Just running my chops, breathing a little easier that gold miners bounced where needed.

http://tinyurl.com/2clkt8

Bill -

I agree that markets are inscrutable organisms that try legions of would-be doctors to diagnose their current state. However, I am always circumspect when the signs of a running fever distract practitioners from other underlying (potential? real? imagined?) ills that the patient ought to embody. Momentum - either way - is a fickle mistress and a sad excuse to justify self-fulfilling rationales. As a sideline watcher for my most core assets, I share your interested and guarded watch of a turning sentiment and harder times to pick up some wealth-building bargains. The multiple paper cut wounds I am suffering come from the most active part of my investments where I feel more comfortable (yet I loath to lose to a mirage of an argument) bearing more risks. Maybe I should go back to the gym for some Clay-like footwork training because rope-a-dope is a painful experience.

JML

Bill,

On March 15 Greenspan had a Q&A at the Futures Industry Association meeting in which he was quoted on derivatives:

"I was shocked to find the credit derivatives market, which was working superbly, ends up with the settlement and clearing done with 19th century technology," Greenspan told the futures conference.

"There's an insanity out there that I don't understand," he added. He called on the New York Federal Reserve Bank, which plays a crucial role in the U.S. central bank's financial settlements procedure, to stay involved or "we would face a really dangerous problem."

http://tinyurl.com/2xgy45

This man is truly despicable.

I have a silly question here for people who really understand options. I've been looking at option chains for a while now to get a feel for what's out there and how I could make trades with various risk profiles doing so. So I was looking at the MU option chain today, and in the Jan 2008 calls, I found something really confusing.

I found this with a last trade of 0.50:
-LZVAU MU JAN 2008 7.5000 CALL (CONTRACT_SIZE=100, 59 SHARES OF MU,$3.

...and I found this (which is more what I expected) trading with a last trade of 4.60:
-WGYAU MU JAN 2008 7.5000 CALL

What's the difference? When I look them up on Yahoo Finance, the first one has "CONTRA" in it's name, but that doesn't mean anything to me and could just be the text above cut off.

Seeing this really bothered me because if I'm considering trading in options at some point, I'd better know the difference or else I might buy the wrong one and be less than pleased with my results. I appreciate any help people might be able to give me!

JML-

i don't mind talking about losing streaks. it's important to acknowledge a bad stretch when it happens, and to walk away for awhile. on the other hand, i don't want to over-analyze it. it happens to all of us, and often has nothing to do with how well we trade(d). far more important is to cut losses quickly and preserve capital. the game plan is the same whether it's investing, sports...whatever you are engaged in: relax, do something else and stay positive..if you slip into negativity, it's all over.

so congratulations for having your core assets under protection, and stop talking like you're in a cell block ;)! we all know a major pullback is coming, and there's nothing like watching one unfold with plenty of cash (luck or a crystal ball is really what you need to watch it unfold with a handful of puts). i have no doubt you will be back at all-time highs in a few months.

Korvus--I think that this option has to do with Lexar media that MU acquired. So you probably get 59 shares of MU and $3 per share for the balance of the 41 shares. I'm surmising--that's always dangerous.

`Spider-Man 3' Leaps to Blockbuster Status With $29 Million Worldwide First-Day Haul

http://biz.yahoo.com/ap/070502/film_spider_man_money.html?.v=1

IMO, A record breaking US opening for the movie is likely to boost the Sony shares in the next few days.

Any comments, anyone?

2nd_ave -

If I could have signed up with my preferred handle, I would sign off as Curmudgeon (Typrekey had already the slot filled). Black ink runs in my veins. So don't take my downbeat tone as anything but my sunny character. Everybody gets proven right in time So we'll slide the roller cosater down with glee.

JML