moin moin from germany,

what a roller coaster in china!

i think that the $ is the story of the day. the $index is looking to break down.

great call on gold btw!

it will be interesting to see how gold stocks are doing when the stock market in general finally has some problems.

"There is a lot of enthusiasm for WMT now, which is a Dow 30 heavyweight"

And a RTH heavyweight as well at 16.7%.

Food inflation? Strategic pork reserve?

Part of an article from today’s WSJ:
“The latest sudden, sharp surge in the price of China's staple meat -- as of mid-May, wholesale pork prices are up 43% compared to the same time last year -- has turned into a national political event. Premier Wen Jiabao has toured markets and reassured anxious citizens that the situation is under control. The minister of transportation jumped in, promising to help ensure pork makes it smoothly from slaughterhouse to market. The government may even open up its strategic pork reserve, a supply of frozen pork and live pigs it can use to help stabilize prices.

China's consumption of pork and other meats has risen in recent years as ever-richer urbanites enjoy a more luxurious diet.”

Long SFD, SEB (illiquid)

Is IMO/imperial oil still in the cara 100...that one is ranked highest on for roc...i put the tickers in a watchlist. Surprised to not see it on Bill's review.

Bill - Thanks for the "heads-up" on Bonds. I put a wkly chart of TLT behind a chart of $UST and while the corelation is not exact, it is pretty good. $UST is in the RSI(7) zone and at a falling trendline support while TLT has what looks to be a double bottom forming here. Like some of your earlier posters, I need to see some clear trend reversal before taking a position in TLT (I don't do futures), but it is definitely on my watch list.

Here is a chart link that might work for those who are interested:
http://stockcharts.com/h-sc/ui?s=$UST&p=W&yr=3&mn=7&dy=0&id=p70239994976

excellent one Seamus! :-)

On food prices, raw food price increases is at around 27% year over year (source: http://data.bls.gov/PDQ/servlet/SurveyOutputServlet). The last time this happened was in the mid 70s. While "core CPI" is wonderfully "under control", in the 70s CPI then followed raw foods to the mid teens. (you can get some anecdotal evidence yourselves by comparing any supermarket bills you have from 1 year ago - the inflation is there.).

On the strategic pork reserve, we now have a couple hundred million in China that are starting to eat better. Hence, these prices are not going down, quite on the contrary.

Any companies for industry group 30202010 CARA100, or any raw food ETFs out there?

Dear Bill,

Good morning. It's interesting in Crystallex that even though the bid/ask spread was only a nickle, no trades hapened for three minutes and fifty one seconds, and then it was the bid that was hit. Is there any esteemed financial professional out there who has an update on the imminent permiting of Crystallex that was reported on this blog some weeks ago?

Chris

picking up gfi...

ALOHA !!

Latest UK datapoint on gasoline from a friend in London is at the equivalent of $7.26USD per gallon($0.96UK/litre). Morris Minis and diesel Citroens(no SUVs)abound London streets. New camera system that records license plates and charges equivalent $18USD per car to enter city center "congestion zone".

Latest UK datapoint on housing from London, Chelsea district, equivalent 800sq. ft. two bedroom flat purchased in Jan 2006 for $425,000UK sold for $700,000UK last week.

Questions for Americans are obvious, like we have had it easy for decades on gas prices yet somehow Congress always diverts attention away from themselves by having committees investigate oil company profits as the reason for "high" gas prices. How much taxpayer funds went to study oil company profits? What about a Congressional committee to study Congress spending and money printing and excise taxes and how that effects gas prices? Where's the Congressional committee to investigate Goldman Suchs profit on oil futures?

Question for Brits ... Does your government investigate BP profits? Maybe it should then your gas prices would come down to $0.50UK per litre like ours!

If debt and inflation is rampant in the UK and they sold off their gold then why is a pound worth twice as much as a USD? Also why is it the biggest debtor nation in human history ... the USA ... still has a AAA credit rating? All the while the US Comptroller General is on 60 Minutes yelling how broke we are while exposing our government accounting system has "two sets of books"? What does it take to get a bad credit rating in the global currency markets? I mean it seems the US government has surpassed even Enron's fraud record? I'm waiting to see the next Kennedy Honors TV show where Bernanke and Paulson get the "Medal Of Honor" and the US Comptroller General gets thrown in jail!

GIX.v quite alive and well in the last 2 days.

sio2

I made a bet on dba for the same reasons...is not working too well...contango...see article,
no pure plays on pork,chicken etc..just soft agg's

http://etf.seekingalpha.com/article/35682
Index intended to follow: $gkx

Is IMO/imperial oil still in the cara 100...that one is ranked highest on for roc...i put the tickers in a watchlist. Surprised to not see it on Bill's review.

2nd:
Picked up more GFI at 17.02
Casino stocks MPEL and LVS looking attractive.
BMD: moving sideways for the last few days?

sorry for the double post on imo...i was going to comment on pork/ agg etf..but got blocked out...and I went backwards to recover my comment to try again.

re pork
try dba but there is a contango effect, google for seeking alpha article to explain re dba

Hello Kaimu,
As a Brit,well I am English actually,we are all getting fickle over here about being different from each other, English,Scottish,Welsh etc. Blairs devolution back firing.My answer to you about about petrol(gasoline as you call it)is that over 80% of its cost to us is government tax,they are the biggest robbers.

Kaimu. When I visit my farm I move around in a donkey and cart. No gas required. Do you have donkey's in Hawaii?. I do know they have many in Washington.

- Gold -
Bill: you're our beam!
Your call on gold was perfect.
Now we have the bullish signal: MACD is growing up. http://tinyurl.com/2fk5pv
And if we add that Eurosystem central banks will stop selling for a while, gold can enjoy a little ride. Last week the ECB sold only 29 millions Eur of gold and announced the sale stop for now.
But bonds are going to be a big competitor for any investment.

KRY and any other position, really: My opinion is if you take a position you need to have some faith in it. That's how you make money in the market. No risk, no reward...no pain, no gain...call it whatever you want...you're playing for real money and it's not easy..

BMD: I think it will have an xlnt summer, and we'll see price action reflecting that this fall...

Dear Bill,

Thank you for the KRY update. I didn't mean to sound like as much of an arrogant jerk as I realize I do (and in all probability am).

Chris

As I mentioned last week Uranium would take another hike after last 2 auctions. Hit $133lb today and expected to reach $140lb by early next week.

Let's not slander donkey's. they are only half responsible.

Washington (DC) has jack-asses. That's when a stubborn donkey mates with a horses ass.

The result of course, is a sterile stubborn jackass. And with the excess of DC madam horses asses in Washington, a jackasses population explosion.

SiO2---As I recall, it was around 1973 when we last had food inflation like this or what is beginning this year. We’ll have to watch the rainfall or lack thereof in the Midwest farmland come July. So far, there seems to be more than enough moisture.

IMO, there are “a couple of hundred million” people in India who are/will also start eating better. (Don’t think they have a “strategic reserve” yet) :)

Reference ETFs:

DBA is a play on agric futures. DBC is a play on commodity futures; it includes oil, gold as well as some agric products. These investments are through the futures markets. Do your own diligence. (I think g034 may have commented on this in the past. Haven’t heard from him lately)

Not raw food, but PBJ is a food and beverage ETF that is 75% consumer staples and @ 18% consumer discretionary. I looked at the holdings and there are a few involved with food production like K, TSN and CPO. Again do your own DD.

There may be more, but that’s all I’m aware of at this time

Jackasses population explosion? Geez.
No, just jackass explosion.

Interesting tape today.
Uranium is helping URZ recover, thankfully....

I agree with those who think that Gas taxes add more to the price of gasoline than the media reports. Our county taxes, alone, add 10c or more per gallon. Add in all the other taxes and the total per tank would probably put food on two tables.

Also on the topic of Oil/Gasoline prices, here is another concern to watch. Remember the problems that were caused by hurricanes that hit our Gulf region? Apparently there is a "category 5" heading into the Straits of Hormuz. Here's the link (and a tip of the hat to George Ure's blog):
http://www.globalsurfnews.com/news.asp?Id_news=28244

Thank you Seamus. I am a little concerned with the 27% raw food inflation manifesting itself on nominal CPI sooner than expected, and what that will trigger.

This article explains the contango in DBA, as well as talks about current food inflation:

http://etf.seekingalpha.com/article/35682

Ah, good ol' Bernanke, but words are but a wisp of smoke:

"BOND REPORT: Treasurys Down As Bernanke Predicts Moderate U.S. Growth"
http://tinyurl.com/2fbh5w

Thanks for pointing out WMT earlier when there was ValueLine Report (I think that was in Feb) - I had really liked your write-up and subsequently bought it when it had dipped little. It is very refreshing to come and get hype-free good quality reading on your Blog every day.

Sinclair’s TRE has some interesting news giving a PRC company a 150 day exclusive option to evaluate its properties. The Chinese are very smart and it will be nice if they decide to make a commitment. I was involved in Noranda during the Chinese look/see, but they passed on that one.

TRE is highly speculative, but a world-class jockey IMO. Recently, TRE has bounced off 50% retracement @ 4.85.

Long TRE

Craig....if we are to slander any, we must have accurate nomenclature. For the record, a jack ass is a male donkey. I believe that the sterile stubborn creature that you are referring to is a mule (product of a male donkey and female horse). For those who are interested, a hinny is the obverse cross--male horse, female donkey. You may when a game show question with this information, and if you do, please remember me.

Leisa. I am not going to allow horses of any gender on my farm. I just want Pedro to be known as a donkey.

DBA was a disappoint but lately seems more responsive..correlates with $gkx...for more hx, stockcharts.com

i have a large position as a hedge, since it does not correlate well with other assets...holding for now.

Sorry Leisa! Are you refering to the animals?
If so I gratefully accept your correction, but
I was talking about politicians which I think was an accurate description. They are all jackasses, right? LOL!!!!

Just don't try to use my answer on a game show and don't credit me. I would use your answer.

Nice woodshed.....

In fear i've cleared the deck as many as 3-4x only to see a bounce and higher lows. I'm holding with stop losses in place. So contrarians, look out below. Is it poster.. second ave been having a similar experience? Time to hold'em , time to fold'em. .xau found support at june 1 open...looks orderly...and I am heartened by bill's guidance of a floor.

re: China...does anyone see a pollution story getting more play? Anything edible from China is suspect. Anything, imho.

ALOHA !!

horatio ... We do have wild donkeys here on the Big Island!! I do not own one though and nor do I have a cart.

SiO2 ... Yes, GIX has done well ever since last month when the "weak hands" let me "load up" for $1.49! I can only hope the next positive drill results produce a great buying "dip"! Thanks to tip of Aussieontop ...

I have two more junior explorers that are hugely speculative that I have not mentioned here before. Both are way WAY under the public radar yet since I bought them last year they are up near 100% each. One has projects based in Canada and the other in Australia, so no "country risk". I do not plan to release their names until they show signs of less downside risk, which means more positive drill results and news releases regarding either major JV participation or funding. There is risk then there is RISK!!! I would not want people here to lose money on my more riskier ventures! Stay tuned ...

jasper,

i'm planning to hold 'em...but i hate giving advice when your retirement's at stake, which is why i'll never be managing OPM...

Dear Bill,

May I throw a question out to the room? A friend of mine is competing for a Bigtime portfolio manager job and needs to come up with a few fantastic "shorts" in order to get the job. Ayone who cares to comment, please let me know the best % of short interest range that you want to see in a good, ready short, and typcially, what are the best, less obvious ways of finding good shorts. Any specific short ideas would also be appreciated, but they should be both fundamentally and technically sound.

Thank you in advance.

Chris

Re: WFMI
FTC opposes Whole Foods' Wild Oats buy
Wild Oats said it and larger organic grocer will challenge government lawsuit

http://yahoo.reuters.com/news/articlehybrid.aspx?storyID=urn:newsml:reuters.com:20070605:MTFH63172_2007-06-05_18-36-57_N05295426&type=comktNews&rpc=44

Chris:

A friend of mine is competing for a Bigtime portfolio manager job and needs to come up with a few fantastic "shorts" in order to get the job. "

If (1) people post great short ideas; (2) your friend's potential employer reads this board; and (3) there is a crossover, that wouldn't speak to well for your friend. IF your friend is to prove his/her mettle in the process the ideas should be strictly his/her own and not those of a on-line community.

Sorry to sound parental, but I do have strong feelings about this.

Cuba and Venezuela will construct a fiber optic cable between them, with 10 times the capacity of the biggest existing cable. Spurs at each end will allow Caribbean and Northern S. American countries to interconnect "at prices cheaper than those charged by private enterprises".

http://www.caribbeannetnews.com/news-1879--5-5--.html

This item via "Gerry" in the Bahamas.

JogyP and others --

Anyone else see irony in FTC opposing merger of Whole Foods and Wild Oats, even as DOJ approves Monsanto's buyout of Delta & Pine seed company?

Looks like there's a genetically-modified corporate diet in store for us all !

jasper,

Thought I would paste this advice from a TSM blog, and I'll let you decide whether it applies to your PM holding:

Norm Conley
Is paring back equity exposure the right thing to do?
6/5/2007 3:32 PM EDT

There is lots of commentary on the site discussing the relative merits of pulling back one's equity exposure due to the strong recent price action. I wrote about this subject from the opposite perspective earlier in the week, so I don't need to rehash it too much here.
Suffice it to say that while "taking some money off the table" after a "big run" sounds prudent and often feels good to do, market history suggests otherwise. As I demonstrated in my recent column, I believe market history shows a meaningful persistence of intermediate-term trends. In other words, what goes up continues to go up more often than otherwise. This sounds crazy and imprudent and perma-bullish, but any fifth-grader with a spreadsheet program could do the same analysis as I did and come to a similar conclusion.

Behavioralists have demonstrated convincingly that we tend accumulate pride and shun regret with our portfolios. Selling some or all of a portfolio to "lock in gains" feels really good, because it gives us the opportunity to be proud of our foresight to have been bullish in the first place. When we're wrong (i.e. we decide not to sell and the market commences a downslide), it makes us feel bad. Correctly timing a market correction, therefore, gives us a triple-whammy of good vibes: we are proud to have picked the right time to have been "in" the market, we are doubly-proud to have gotten "out" at the perfect time, and we have avoided any regret from missing a strong move in the market. We get to slurp up some mighty tasty emotional dividends out of that sort of experience.

But for all but a very few true market wizards, trying to time the market in such a way usually fails. Therefore, outside of regular and unemotional and systematic rebalancing moves, I usually advise long-term investors to scrupulously avoid making meaningful reallocations of capital based upon market conditions.

This is particularly true right now, when I believe the odds favor continued strength in U.S. stocks, especially large-caps.

RE: Chris & Short Advice
FWIW,if I were hiring for a "bigtime" portfolio manager job, I would not likely hire someobody who needs a public blog to come up with ideas (unlike say....me). I'd be looking for somebody who lives & breathes the markets 24/7 and already has a list of longs, shorts, and everything in between down on paper (or computer) with a list of criteria & indicators or at least some sort of system already in place. I wouldn't be interested so much in the actual shorts named by the candidate, as much as his/her reasoning behind them.

If Hypocracy is irony, yep.

Funny, if you are any monster multinational oil conglomerate or say a Dubai investment firm interested in operating U.S. ports, all restrictions are off.

But not if you operate in the vital national security related strategic natural foods business.

Free markets indeed.

Chris,

I've always had the best gains in short positions by riding 5 dollar stocks to nothingness, or close to it. Look for charts showing a long railroad track decline between price and 200 DMA and short on a spike when the company annnounces something grand. This works best late in a bear cycle.

FWIW, today's decline didn't smell right to me. Esp the TICKQ action vs. the QQQQ's -- a lot of non-confirmation going on there.

I would agree that the FTC opposition to the merger of two boutique retailers is over the top.
Demographically speaking, the 'faddish' nature of Whole Foods and/or Wild Oats will run their course in due time as pricing pressure annihilates what little brand advantage the two may have with this organic euphoria.

Whole Foods bought out Harry's Markets here in my area for some dumb reason. Harry's lost millions for over a decade as Blazer tried to forge market share in the affluent Northern burbs. The new owners aren't setting the balance sheet on fire here now either.

Don't understand this affection for WF nor its expensive stock price, all things considered. It is on my list of shorts as I bet with Safeway & Kroger in the retail grocery space.

Heely's, those shoes with the wheels in the heels, are coming under fire from retailers here with many banning folks wearing them from entering. Seems that damage to flooring and injury potential (liability) are the reasons.....I've been short this fad for a bit now...

The Whole Foods in NYC in the Time-Warner Center is truly marvel. I stopped in on a weekend late in the afternoon and the hangar sized store was jammed, carts wheel to wheel and quite literally hundreds of people waiting to check out. The prepared foods area was an embarrassingly huge cornucopia of the tastiest, widest selection of gourmet foods I've ever seen in a supermarket, and the packaged foods were superb brands that never grace the shelves of my little Washington Heights bodega. I walked around in awe and, after seeing the prices, shock! If the level of spending I saw taking place is replicated even fractionally in other locations I can see why they have had success. They execute very well and people, at least here in the 'thin belt' of Manhattan can't get enough of what they do. I would wonder how it scales to the rest of the country, especially in a serious downturn when the prices will be difficult for many to afford. Is this a 'credit bubble' 'good times' food retailer? For now, in that one store at least, the good times sure seem to be rolling.

Me? I wandered around for a half hour and went back outside and grabbed a couple of slices.

Mike
NYC

The 2005 E*Trade-Ameritrade story is back from the dead.....

http://www.thestreet.com/markets/marketstory/10222428.html

http://www.marketwatch.com/news/story/sac-jana-urge-td-ameritrade/story.aspx?guid=%7BB76839A4%2D4768%2D4CA8%2DB725%2D5E9E59FDD660%7D&siteid=yhoof

Both stocks are popping in after hours.

Eaglecrest (EEL) popped 23% today on large volume (2.5 million shares). It was bouncing off a 52 week low and its charts are attractive to bottom-fishers. The company announced favourable sample results. West Timber Mining (WTM) popped 21% on large volume (1.3 million shares). The stock broke out of a four month base. I can't find any news. Disclosure: I had never heard of either of these companies before today and I am currently not long or short. Also, I am not recommending these companies for a trade.

Sorry that's West Timmins Mining.

Uh-oh...Hulbert is out with an update on gold-timing newsletters, and this is not what I wanted to see: http://tinyurl.com/2co7u7

Hulbert addresses the wrong signal from last month straight on: "Skeptics may object to this conclusion on the grounds that contrarian analysis a month ago was incorrectly bullish," then says "But don't dismiss the conclusions of contrarian analysis because of this misstep. Not every system works all the time, after all. And, more often than in my research into sentiment among market timing newsletters, contrarian analysis has been on target."

So now I'm a little worried.

..but keep in mind his signals tend to lead the market by a day or two, so if the jump in bullishness worries you as well, you have time to act..

bbd.b
Not sure if anyone mentioned it but the bomber is at 6.07, I'm pretty sure that our gracious host said a trusted friend of his liked the chart quite a bit..and I believe that was atleast 30% lower...

..keep in mind also that Hulbert is referring to SHORT-TERM signals here, so if you have a long-term horizon, not to worry...

Yeah, 2nd_ave, this on top of my suspicions that sonmething is not quite right... Money going from bonds to equities, if there is a major correction $$ will fly right back into debt instruments.
AND I do not think that we have really seen what the PTB can do to alter Gold price, What we have seen to date may only be a prologue to greater future shenanigans.
Long term, yes, Gold is going higher, but even Bill is expecting any rally to come soon to be a short lived event.
I think that determining if there is an impending world equity crash right around the corner is the more important issue.
I mentioned recently that I liquidated some of my PM holdings. I did make money but considering the big picture I have learned that I am way over exposed to PM. What I have sidelined can easily go back in but if there is a major confirmed trend upward, most of us here have the ability to determine if an event like that is unfolding. I may have to eat crow but the downside risk in overall equity markets is of greater importance than a possible mini rally.
Where am I going with this, well I guess I am glad to have some cash set aside to buy some bargains down the road in a few months with very good annual gains locked in. ( I know this is exactly what the guy you quoted was talking about)

BTW Long KRY

If you're overexposed, then by all means trim back...

I think gold is one of the most difficult markets to play..at the end of the day, however, gold holds value, and when I ask myself if I would rather be holding an interest in commodities or something else, well, I think commodities wins hands down..there is real demand for gold and oil right now, and I just don't see that going away...

Dear People,

Thanks for your short advice. I know it sounds nuts to think that "They" would hire someone to manage money with no short experience, but that is precisely the situation. And remember, most of the mutual fund people (my friend is a mutual fund manager) dont know beans about going short. They have only one strategy...namely, buy and hold. Then they can buy more if they want. And if they get really nervous, they hold and worry.
It frankly makes me envious as a money manager wannabee that my friend, (and other I know like him), get huge money offers to manage money when they aren't even necessarily particularly good at it or interested in it, but sadly, I am here to report, that is the way the world actually works. One guy gets the whole universe thrown at him, and ten others cant get a break.
I would presume that one looks for the opposite of longs, namely, stocks in a downtrend, stocks being rejected at popular moving averages, stocks with overbought indicators etc.

Chris

chris, if i were to walk into an interview like that, i would play it safe by shorting sectors...so if he throws a few of the inverse names around, that might do it...lol

jasper, for some reason my instincts are to stick with gold...Hulbert has been right with most of his gold timing posts, but (and i am trying to dissociate my outlook from the fact that i'm long gold here both short/long term) my gut is telling me to stay the course...i could be totally wrong, but if i don't listen to myself then i would be whip-sawed by another opinion every other day...if i'm going to be wrong, i'd rather be wrong following my own instincts than be wrong following someone's else's...there's no worse feeling than letting someone talk you out of something you "believe" in and watching it play out just the way you thought it would...good luck whatever you decide

RE: Hulbert

If Hulbert's contrarian system worked, shouldn't he be a billionaire by now? Just askin'. And don't sweat the gold price so much. Unless you're a short-term trader, it doesn't matter. As Bill says, as long as the governments of the world continue to print money, gold will continue to go up. They decide to stop printing and I'll consider selling.

This discussion about gold reminds me about the dow/gold theory.If you bought 18 ounces of gold in late 1929,with 2 tops and 2 bottoms on the dow /gold ratio ,5 trades and 70 years later you would have over 11000 ounces of gold in your possession.Only one problem really that time span is too long.We are currently about 20 to 1 in the cycle and heading lower some say to about 5 to 1 which means gold up or dow down or a combination of both.Or perhaps the cycle is no longer valid, I think it is.

Somebody asked for a reading list the other day. Although by no means comprehensive, at the bottom of my site this morning, I've put up a list of ten books, some classics, some not.

Best to all.

www.ronsen.blogspot.com

You do not have to be an insider or pore over financial reports to get advance notice of a company’s fortunes, just use their services. My brother got a late payment notice from Citibank. He makes payments using those quaint old-fashioned paper checks and the US mail method. He called some guy in India to express his surprise that the US postal system would take 13 days to deliver his check. The nice fellow would not reverse the late charge but offered to sell him some insurance so he could rest easy if Uncle Sam got a case of the slows again. Brother called again during “normal business hours” and talked with a more customer service savvy soul who reversed the late fee and allowed that processing of paper payments was running 10 days behind. Think maybe our company has saved a little too much money downsizing? I thought cashing checks was a pretty important part of keeping a company out of the woodshed. Guess I’m just too old to understand financial New Think. Brother is looking around for another financial services company.
Paulo