Dear Bill,

Those are somw AWESOME pictures. Who's the skinny guy with no shirt? It's funny, my sister used to hang out with the New York Hashers, believe it or not, but was never crazy enough to run with them. So the market's going up today, huh?

Your servant Chris

Why base metals are going higher
Here there's an interesting article:
http://www.321gold.com/editorials/casey/casey073007.html
I agree with this opinion.
"There are now 50,000 students studying geology in China, versus 900 in the U.S. (of which 300 are foreign)".
Bill also sees a signal in the bids for Alcan.
Resources are still a good investments, even if short term there can be some weak days.

And here there is a curious graph about how much silver you need to buy a house in US:
http://www.321gold.com/editorials/morgan/morgan073007.html
Just to say that investing in silver can be a good idea.

And now the comment of Jim Sinclair on the 27th July:
"Yesterday’s collapse in the gold price come on the heels of the largest volume traded for a single day on the Comex that my records going back 6 years indicate. Nymex reported a mind-numbing 257,914 contracts traded hands yesterday during the rout that hit the gold market from the fallout of the rush into liquidity. That is humungous! The good news for gold’s friends is that such huge volume days that occur either on the way up or the way down typically tend to portend exhaustion waves when it comes to the futures markets. During such times, blind panicked buying or selling is the order of the day. People want out at any and all costs and simply do not care about anything else except to “GET ME OUT!” In the case of yesterday, it was terrified longs bailing out in droves. The result was a SHARP DROP in the open interest of nearly 20,000 contracts. The previous day’s down leg was marked by a drop of 15,000 contracts. In just two day’s time, we have cleaned nearly TWO MONTH’s worth of buyers since that is the last time open interest was near the current levels.
Again, while I hate to be prematurely optimistic given the current climate of fear and confusion, it is difficult for me to see how much more downside is left in the gold market especially seeing how well it held up today after yesterday’s exhaustion day. Even as stocks continued tanking later this afternoon, gold held rock steady. Just as what happened yesterday, its price descent down into the lower nether regions of the mid $650’s brought out strong buying which took the market back up into the plus column at one time during the day. Not too bad all in all considering how the currency crosses were getting whacked today and how the dollar was experiencing another dead cat bounce.
While the gold shares did not fare as well being caught up in the general market downdraft, the bullion price appears to be making an attempt at stabilizing here. I repeat from yesterday – I am of the opinion that the metal will lead the shares out of the bear’s woodshed."

By the way: nice pictures Bill! :)

Report of Gold Market Lending by Blanchard (pdf)
http://www.24hgold.com/viewarticle.aspx?langue=en&articleid=158878_Gold_Market_Lending_Central_Banks_and_Gold
Very interesting!

Moin,

here comes a "funny" story

Bear, Lehman, Merrill, Goldman Traded as Junk, Derivatives Show

Bonds of U.S. investment banks lost about $1.5 billion of their face value this month as the risk of owning the securities increased the most since at least October 2004, according to Merrill indexes. Prices of credit-default swaps based on the debt imply that their credit ratings are below investment grade, data compiled by Moody's Investors Service show.

Bonds of New York-based Goldman and Merrill are rated Aa3, seven levels higher than swaps suggest.

About 1 percent of the thousands of companies followed by Moody's have a gap of more than five levels between their actual and implied rankings, analyst Tony Smith said in a July 19 report titled ``Broker Securities Climb a Wall of Worry

At the same time (yesterday)

S&P raises Morgan Stanley debt rating to "AA-minus".

Standard & Poor's on Monday raised its debt rating for Morgan Stanley, citing strength in the bank's core investment banking and trading businesses.

S&P raised Morgan Stanley's senior unsecured debt rating to "AA-minus," the fourth highest investment grade rating, from "A-plus."

Number 2:

IMO, I'd play (and have) the 2009/2010 7.50 leaps.

Number 2:

IMO, I'd play (and have) the ESLR 2009/2010 7.50 leaps.

US should boost debt limit (by Henry Paulson)
http://www.chron.com/disp/story.mpl/ap/politics/5011956.html
Creation of liquidity (debt) still running...

Marc Rich, Glencore, Xtrata, etcetera ...

Interesting feature on page 1 of Wall St. Journal today looks at the influence of the above on global commodity markets. It's not only HB&B and Central Banks which wield unseen market power !

Private Glencore uses publicly traded affiliates for production of LOTS of metals and coal, no doubt sourcing and selling freely with bad regimes, just as Marc Rich did with Iranian oil in the '70s.

Does anybody know how to post a WSJ link? The title is: Aggressive Swiss GiantRides Resources Boom

Bill looks youthful with that mohawk. Just kidding of course about the hair do.

Call me crazy, as I must be for hanging out with posters who short term trade when I try not to...anyway, when I first started looking at this blog my impression, and that is all it was, is that Bill was far more pessimistic about the short term view than he is now, while currently most of those that post here are in cash. It's hard to know from either msm or blog reading whether it's a herd of bears or bulls. Time horizon is huge factor, besides being what makes it a horse race.

I've gone to cash, more than once this year and there can be a lot of missed opportunity. I'm up to 40% cash, and will scale out on continued weakness with an open mind to being influenced by Bill's commentary.

Anyone on the board have good ideas for junior - midsize energy companies. Looking for some leverage as we look to move to all time highs with Oil and (eventually) rebound with Nat Gas.

Thanks.

You will be back, Bill. Someday you will miss those Canada geese and you will migrate North just like they do.

Looking tan and handsome Bill! Good on ya!

Anyone watching MU? Looks to be on a little pullback here.

Still watching the XAU. It isn't looking as strong as Bill does. I can see I need to get away from the rainy NW.

XAU looks to be rolling over. Another chance to buy?

scaling back into UNG @ 39.38...

bb,

Natural gas is not expected to rebound until well into 2008 according to the FP, there is too much of it. I am glad to be out of it with a profit.

I like pdn.to and LAM.to (small Uranium) and of course Cameco has been taking a great beating. For oil, my pref. is Nexen. All of these have given very good profits in the last 3 days. Just the ones I know...

Hey Folks,

It aint over yet, but volume on a lot of my "bounce" stocks the past 2 sessions is unconvincing that this is anything other than a lil 'ol bounce. Also, AAPL down 3% AMZN down 4 %, the market is lacking "leadership" from anyone except the ugly shoe Co. (CROX).

Bill, what is your view on the length and percentage fall in both gold and the XAU once the cycle peak of 2002 to 2007 is completed? Many thanks for your thoughts.

shark-

I am UNIMPRESSED so far as well. Volume was only marginally better yesterday and there are a lot of industry groups that have forgotten to show up for work. The action today is tepid and some leaders are having bad days as you suggest. I think this market is very weak at its core, and that is showing up in the breadth figures.

Pssst....it's starting to go kids....

I bought a little SDS and am still short XLF and improving.

I am not impressed either, but bought GS at 193.

I might need a push... Come on you guys, if we give it a push it will roll downhill on it's own.

The ^VIX (on Yahoo!) is up 1.1% which to me means this market is headed down. ^VIX started the day down and that supported the market going up...

Your problem, my friend, is over at the Dow. Lotta love being shown some names there.

AHM 86% down!

Brokers and bankers looking puny.

It must be the big dow exporters/materials/oil as all else is, well, sucky.

AHM-thanks for the heads-up...any chance you were short this one, n2son?

BKX now solidly in the red and S&P just slipped as well.

Maybe I'm being cynical, but month-end today, so I would expect one more push to try and finish in the green.

picke up 1000 AHM @ 1.28 just for the hell of it...kinda felt like throwing a chip on red as you're walking by...

I was short from $12.3 now 1.35. Got the tip to short AHM from Motley Fool's CAPS system on 7/23/07.

nice move, onlineaces...

FMT looks like it might want to be next in line...

AHM now $1.07. WOW!

The push, if any, will need a new month which is tomorrow.

If broker dealers and financials are the biggest part of the mkt, say goodnight.

They are tanking as I type.

What you've got, Folks, is a subprime lender going out of business, weighing heavily on a very precarious market. Lehman down over 3 %. Good thing skyscraper windows dont open!

...that chip's not looking too good right now...

online...how's it feel to be up 90% on a trade in one day?

craig-the market's dropped on a dime...shorts are looking good...

craig-make that two drinks...

if markm's options were up 65% earlier, they must be taking off now...

I missed getting on board the AHM Titanic. But congrats to those that did. That's the way these things fall, you never really know where or when the next ice berg will rise up.

...counting on the shorts to take me back out >1.28 LOL...

Kinross Gold is announcing Q2 results tomorrow before the open and it is down 2.5% today. Is this a warning signal?

^VIX is now up 6.32%

You got em' 2nd!

Nice call.

I'm in, out, making $$. They didn't have enough XLF to short. That was a nice clue. Then the XAU started it's dog trick for a treat. Roll over XAU....good dog. IAI went from pos to neg which let me know I was on the right track.

Bulls are fighting back though, be careful!

AHM, said it is considering a variety of options including liquidation. Analysts noted that it a bankruptcy takes place, it would be significant as the lender does not do subprime loans. The stock was down 90% on the session. -Marketwatch

http://tinyurl.com/ywefzm

2nd gets the gold star today.

This was a day traders market.

Bought some PM/miners on the biggest dips, sold into the AM strength, made decent $ on shorts and ultras.
Still short the dow, S&P, financials.

WFMI holders will be happy.

Comps up 7%. $39+ in the aftermarket from 36+.

"It aint over yet, but volume....is unconvincing that this is anything other than a...bounce"

I admit, I did buy a little GSS near the close, $3.67 Ya gotta have fun, right?

..i'm all for having fun...

That was a nasty selloff into the close wasn't it?

Further deterioration in financials - SKF really spiked into the close.

"if markm's options were up 65% earlier, they must be taking off now..."

I don't even want to tell you guys how unbelievably large that one got. Let's just say I probably don't have an encore for tomorrow.

WFMI-wife and I have noticed that every one of the Cara 100 that hits the AZ has more or less then gone on to outperform...

MPEL was moving up again today - the market definetly likes the convertible bond offering they came out with yesterday. I managed to sell some into the morning run, reload intraday, and sell some more into the close.

Searching through the bargain bin - I was wondering if anyone else follows JBX (Jack in the Box) stock? The fast food chain has a subsidiary called Qdoba - a burrito place that is main competitor of CMG - Chipotle Mexican Grill (check out what that stock did after earnings today!).

Anywho- JBX stock has been beaten down recently on very little actual news. It looks like a good buying opp. as they will report earnings in a couple weeks. With Nelson Peltz circling his wagons around WEN - Wendy's this week, I feel there may be some good value to be extracted in JBX. They also have the Qdoba brand in tow for a possible spinoff somewhere down the road.

I forgot to mention that Qdoba makes a damn good burrito as well!

On the way to the bank, guys, and as a matter of perspective, the SPX hasn't even violated yesterday's intraday low. So this qualifies either as the quickest retest ever or the beginning of a breakdown.

I know that lows improved (almost had too) but I want a good looksee at the other internals. Did XBD take out its reaction low? I don't think so. Anyway, I think we should chew on this a bit.

Guys,

I'm no sage, Heaven knows, but I'm still of the belief that stocks, particularly mining shares which I think will find new favor, will get a nice bounce in here. Did you see under armour today? (UA) Is it finally safe to short this thing?

More generally, I still think the Dow may hang in here and rally for a bit more, but my trigger finger will be itchy.

Everything was going according to plan in the morning: Sold IBKR, INFY, MS,BMD all with nice profits.
Then I made the big mistake of the day!
Bought GS at 193 just before the AHM bomb dropped!
I should have listened to MarkM and 2nd!

While the market did turn down, mining and metals ranked 2 of 31 industry groups, losing only 0.08% on the day, and energy ranked 4 of 31, losing only 0.15%.

By contrast, group 31, computer hardware, lost 2.17%

craig-Re today's gold star: i appreciate the gesture...but i'm pinning the star above this post from last Sunday:

"For myself, I will be using every tool at my disposal. And every hour of available time I have. It's that critical right now. I don't for a minute believe anyone when they try to tell me this has been a "typical correction" and point to its size (~6%). Why? It was swift and brutal with some of the worst internals I can recall. It was accompanied by the element I have been saying for two years could kill this bull: a change in liquidity (credit) and investor psychology. Anyone who blindly bought Thursday's dip got their rear ends handed to them as a result. And there were many. So it is NOT like February's drop nor those in 2006, 2005 or 2004.

TECHNICALLY, damage has been done but not enough to change the bullish posture of the LT charts. So yes, until proven otherwise, the bull is still alive and kickin'. Looking deeper though, the divergences were and remain HUGE. Part of the market has collapsed. I believe 17% of NYSE stocks hit 52wk lows at one point on TH. On another meaaasure it was 25%. That is OMG stuff. That is Crash Warning type of behavior. I kid you not.

FUNDAMENTALLY, we have evidence of weakening consumer demand. We have a weaker economy to look forward to. Housing is now a big drag. A much dimished GDP seems baked in the cake now for 3Q. Jobs are okay. If they turn down that will be bad news indeed. The credit markets appear to be a shambles but who really knows how far this goes? Noodles reports give great pause. Overall, I'd say we are at yellow light stage about to turn red.

The big change seems to be investor PSYCHOLOGY. No one believes the talking heads and Paulson when they blather on about containment. All news is being sold, good or bad. Risk is being repriced. The mood is nervous to fearful. That either means the time has come to buy because fear has overrun fundamentals or it means the selloff has just begun because we are starting an extended period where what is going on behind the curtains is revealed to all through the markets discounting mechanism.

So MarkM is watching this very carefully indeed. I was a buyer of the Spring selloff. I am NOT buying this thing. Not yet. I need to see a LOT more. I need to see a rally on improving internals. I would like to see a retest and a hold of lows wherever those may come. I would like to see how market participants react to news. I would like to see evidence that risk appetite has returned. I would llike to see some leadership. If I see all that, I will buy. Until then I sit on my hands watching and waiting, with my moves thought out and orders lined up. That's the game plan."

Posted by: MarkM [TypeKey Profile Page] at July 29, 2007 7:54 PM

Thanks 2ave. I try.

I also think I have been consistent with my views. I see some market gurus that I read flipping back and forth between bullishness and bearishness day by day. Market up. Time to buy! Market down. Time to sell! Either you have a view and a plan or you don't. It can't change every 24 hours. That just chews people up.

I am still watching the internals very carefully. No BEAR FLAG flying at my place yet. The Adv/Dec Line remains remarkably resilient. Part of the market is incredibly sick but another part seems resistant to infection. Can the good doctor just amputate and the patient recover? Or will blood sickness cause internal organ failure?

Anyway, vigilance is the watchword.

MARKET ALERT
from The Wall Street Journal.

July 31, 2007

Bear Stearns, already forced to shut two hedge funds that bet heavily on the risky subprime-mortgage market, is now facing big losses in a third fund that has roughly $900 million in mortgage investments, according to people familiar with the matter.

The $850 million Bear Stearns Asset-Backed Securities Fund has suspended investor redemptions and expects losses in July.

Also, Japan down over 1% right now.

WSJ is keeping score on Junk Bonds, LBOs and Hedge Funds credit problems:

http://online.wsj.com/public/resources/documents/info-BondTurmoil0707-sort.html#

We are only 2.67% away from the very important Japan's Nikkei 225 16,600 support level. Yen is gaining strength w/respect to USD . It will be very interest to see how effective our government's "plunge" team does tomorrow. Also, Aug 1st has not been a great trading day historically.

2nd_ave - I'm with you re: MarkM's comments.

I noted that every time there was a downturn, Bloomberg Radio brought in Disciples of Doom to 'splain it all to us. And when the day was positive the Booyah Band marched in. After a while I stopped checking in to Bloomberg.

Like MarkM says: Decide what your plan is and stick to it. Right now, I'm thinking my cash looks quite pretty indeed. And I have been developing a lovely buy list. Patience is as important to success in investing as the right companies to buy at the right prices.

US indexes are looking largely red:

DJIA -124
S&P500 -17
NASDAQ 100 -17

http://www.bloomberg.com/markets/stocks/futures.html

Let see what the morning brings....

Test. Testing TypeKey Registration

Shanghai picking up steam to the downside -1.75
All ords -2.5
Hong Kong Hang Seng -2.7 & Red Chip -3.4

Will be interesting to see what happens in Euro land.

I think that I will be holding on to my SDS tomorrow.

Steve

WFMI - holders will be happy?

What if they bought > $40?

At least I'm back to even. :)

A good time to be in cash, though historically Sept - Nov look good for WFMI.

LEND should see some repercussions from the AHM fallout this morning. Interesting day ahead.

Murdoch gets DJ for $5B.

http://tinyurl.com/24uwr7

And the FTSE opens gapped down 100 pts, ouch.

Futures still looking grim but have IMPROVED over the last half hour.

http://www.bloomberg.com/markets/stocks/futures.html

I know that many of you see traders dashing in and out of short and long positions here and haven't the experience (or pain tolerance!) for that. So here is an idea for you to work on. In overvalued markets I park my wife's LT money in a conservative Equity/Income fund. Most of these have a 60/40 blend of stocks and bonds. Returns are solid in both up and down markets. Never spectacular (unless we are coming off a low like 2002 where these funds were all up 20%). It stays there until the next bear market resolves valuations. Then it will be switched into a more aggressive Capital Appreciation fund.It is a very simple timing method that appeals to my value bent.

You will have to decide how you define overvalued/undervalued on your own but I can suggest Tobin's q, Shiller's PE10 or Hussman's peak to peak PE are on the right track. And if you research these funds I would stay away from any that have loaded up on financials on the equity side or have taken on EM or HY risk on the fixed income side.

Just an idea.

OK, Japan's NIKKEI is down 2.19% and we are now only 1.6% away from Bill's Maginot Line of 16,600. I think the fat lady is done singing for now.

Good article in todays Asian Times about the biofuel/food relationship. Here's one quote from http://tinyurl.com/27wqle

Environmental analyst Lester Brown recently noted, "We're looking at competition in the global market between 800 million automobiles and the world's 2 billion poorest people for the same commodity, the same grains. We are now in a new economic era where oil and food are interchangeable commodities because we can convert grain, sugarcane, soybeans - anything - into fuel for cars. In effect the price of oil is beginning to set the price of food."

Thanks MarkM that is a great idea! Got to be careful with the wifes money.

And also what is EM? HY is high yield right?

Steve

agua-

By EM I meant emerging markets debt.

Some of these funds will try to beat the simple benchmark by gussying up the fund with sector bets. Right now I'd avoid any that were doing that. At least until things calm down and everyone can bring their heads back out of their shells.

MarkM,

I will research those funds as I don't short stocks. I go to cash when things get shakey. ( during the .com bust).

Thanks, Sarah-Hadassah

Sorry 2nd, the platinum star goes to MarkM for at least the last week.

To all:
Received my snazzy marketletter from a well respected advisor/blogger/manager and it is very negative. Included was a letter from a top ranked institutional ETF investment desk.

The letter cites extreme weakness in sentiment VS the last few corrections. So far this correction, according to this firm, is nothing like February, no rush to buy dips as previuosly happened. AAMOF, they still see flight to bonds and cash.

Their finding: We aren't even in the first inning of this sell off, we aren't in the park yet.

2nd,
Joe Bastardi is telling us the east is going to have a record heat wave....how is that UNG doing?

craig-NYMEX nat'l gas Sep 07 futures up 8 cents at the moment=about a 1.3% pop in UNG...

AHM-RBC Captital Markets reiterates its rating of Sector Perform...what does that mean...if the sector goes up 10% > target on AHM is 1.14? Any analyst with the cajones to put a target price on AHM right now is what I'm looking for...

First signs of possible climatic action; multiple put call readings over 1 during the past few sessions, TRIN spiking to 2.5 yesterday on the close, and can count 5 waves down from the all time high. Would like to see the VIX get 50% over its weekly Bollinger band. First day of the month usually brings in buying. Not calling a bottom but signs are appearing to be on the look out for a snap back rally attempt. Lots of resistance to chop through on the upside.

Ah, good for you!

I see gld moving a bit pre-mkt.
Blackstone got several upgrades.
Index futures down to start our day.

Good luck!

It is possible that AHM may be a saved by the Angels. Because the angels will have more to loose from an AHM bankruptcy.

http://finance.yahoo.com/q/mh?s=AHM

Kinross Gold (NYSE:KGC) reported earnings today 0.09/share vs 0.19/share last year, shares flopping around on the open on the news, the overall outlook seems good to me though, with new mines on the table for 2008 and solid production. The report is available at www.kinross.com if anyone is interested.

UNG-a 3% move in one day's enough for now...out at 40.52...

Craig-

Sentiment seems to me to be "position for the snap back rally but bail quickly at first hint of trouble". Very thin conviction if you can call it that.

Gunslingers market.

jogyp-you're right...3.8m shares > $36m hit yesterday...

Oh God...It's happening....AGGGGGAAAAAIIIIIINNNNN!!!!!!!!!!

(I've predicted 5 out of the last 2 snap-back rally's)

jogyp-i keep thinking about betting on an intraday short-covering rally in AHM...taking a shot at 1.05...

GRS:
Gown another 4% at 10.74.
Earnings are due in a few days.

2nd,
I am a bit shaken from my mistakes yesterday. Waiting for a snapback rally to escape

Tried that on NEW only to see it go down further.

AHM's chances may be better.

^VIX keeps going up...+3.1% at 24.25 and TICK distribution is still negative. Will not be a buyer until I see positive TICK distribution. Keeping my eye on 10-yr treasury rate and the YEN. I am not a buyer in this market yet.

I know this isn't a board for mutual fund investors, but I'll have you know, a close personal relative of mine is 2nd in command at a huge U.S. mutual, and all I can say is, people would be awestruck at the way their 401-k money and pension money is bewing mismanaged by these ego-monkeys. The dumbest person on here can out-think the average mutual fund manager.

Absolutely Mark.

Interesting....SKF is ripping while XLF is up, albeit marginally. Someone needs to make up their mind(s).

The only other green on the screen is GLD.

Keeping a close eye on the S&P support.

2nd,
AHM:
"RBC notes the liquidity crunch is much more severe than they anticipated. Wall Street counter-parties have pulled warehouse lines of credit, and AHM is now unable to fund loan production AHM has retained Milestone Advisors and Lazard in an effort to source additional financing, consider balance sheet liquidation strategies and perhaps explore potential sale of the co. A forced balance sheet liquidation, could result in an after-tax hit to book of as much as $10 - $13 per share, leaving estimated pro-forma tangible book at $6 - $9 P/S. If additional credit or a buyer are not found soon, firm believes AHM may be forced to seek bankruptcy protection, which could render the common shares worthless. If a buyer emerges, they think the co could garner an estimated $4-$6 in a post B/S liquidation deal"

shark_attack

are they hiring? i'm looking for work.

regards
joey

Anyone else notice that gold is holding and even up perhaps .25 - .50% a day in this pathetic mkt?

Still dancing.

Need to retest that AM low. If that holds then the bulls will try to take it up again.

Joey,

Unfortunately, the billionaires who own those places trust the multi-multi-millionaires who run them to NOT hire people who haven't been an expensive private college, as opposed to public) and they lean particularly on those hobbled by the intellectual burden of having studied finance, typically at the graduate level.

(Leaves me sol)

It's total meltdown in mortgage related stuff. You guys have absolutely no idea the amount of these at-risk securities that the average mutual fund holds. (kiss that early retirement adios)

For anyone who missed Bill's late afternoon addendum (that would include me):

"ADDENDUM 2: I couldn't access my own blog via TypeKey (what a disaster that software is), so I'll insert additional comment here (around 3pm ET):

A lot of the buying yesterday in the Dow stocks was short covering. More of the same earlier today, taking the day to a higher high. Now with this mid-day pullback, we want to see a firm close. A triple-digit loss on the DJIA today would not be good for the Bulls. But, if there is a higher low today and tomorrow than yesterday, I'd say the Bulls are still in control.

Also, I would look at the %K Stochastics for each of the Dow 30 that have had recent Daily RSI-7 values go under 30. If the %K is sidetracking along the bottom and not recovering, I'd say the outlook is poor.

Cash is the best position to be in right now if you are an intermediate-term trader. Longer-term oriented traders ought to be slowly rotating out of stocks into cash. My very short-term bullishness of the past couple days was simply to get readers to be more patient. I was concerned some of you would be busy hopping on short-life put options and shorting stocks before the cycle peak is confirmed. I think it would be premature to do that.

The Fund managers have the ammunition to take this market still higher now. I see them buying up the bonds, but do they really believe that rates/yields are going to fall much based on the economy and the failures happening at financial institutions?

As I say, what long-term oriented traders ought to be doing at this point is preparing to sell more stocks (those still held long) into the next round of higher prices, but not here. I don't advise selling a stock into weakness at any time unless the turn has just happened. Admittedly, it's a tough call."

Posted by Posted by Bill Cara on July 31, 2007 11:09:27 AM | Category: Cara's Daily Commentary

Now, with that out of the way, and IF ALL IS WELL, they will try to take it up. So let's watch shall we?

If you want an easy way to short (or go long if you're so inclined) the "mortgage business", take a look at KBW Mortgage Financial Index (MFX).

Largest positions are FNM, FRE, WM, CFC, but also hold MTG and DHI. Details at http://www.kbw.com/research/MFX.asp

Can't buy "the stock" like BKX, but can do options at not an outrageous spread.

BMD-taking another position at 3.09...

Price of nat gas has moved nicely today, as has UNG. My watchlist of junior and intermediate nat gas producers is down.

Call me insane, nibbled on BMD at 3.08.

What AM low are you eyeing Mark, S&P, gold, or ?

I'm amazed the S&P held at 1444, the day's not gone yet though.

LEND down 22%...

Hmmm, good move 2nd! LOL!

S&P. I am not interested in gold right now.

Rumor on the street is that Beezer is going to file BK. That's a little rally-killer.

Thank you Mark.

GFI-anyone buying on the earnings disappointment?

I'm waiting for it to get back to the 52 wk low or close unless we see a big volume bounce taking us all higher. NOT!

SLW-opening a position here...

AHM-starting to scale out at 1.21...

...started my vacation today, in case you can't tell (LOL)...

SOHU reports tonight, this is a very interesting play for a strangle.

I have been keeping an eye on SWC and PAL for some palladium plays as they are getting very cheap. SWC in particular has had some operating probs recently that have taken the stock down. Took a small position at 8.90.

2nd,
SLW should be alright, XAU is coming off the bottom. SLW chart is tentative, but XAU is better.

I've been scaling into SLW. Also GDX at today's low.

BillySundance, what do you think of the Nissan announcement? That seemed to be the biggest use of palladium.

SOHU-thanks SiO2 for the alert...

Decent prices on WGDFF 2.50 or so.

Someone was waiting for 2.44....we're close.

craig-i like the negativity today...we have a shot at closing higher...

AHM-remaining stash out at 1.25...

SiO2 - the Nissan announcement is definetly a concern for the palladium market. My take on the switch is that it was based on the price of the metal being too high -- not that the technology had been outdated and palladium was no longer useful. So I take it with a grain of salt.

The sell-off in SWC looks exacerbated at this point. I think is is safe to scale in to SWC and even put in a fairly tight stop. SWC has been a hedge fund toy for the last few years with wild swings but right now looks to have some long term support in the mid $8 range.

Buying around $9 with a tight stop could be a good way to set up this trade.

AHM-well i guess i misjudged the short position..lol

As nutso as this sounds, the price recovery in Beazer (the tired 'ol geezer) is so robust, and on such mondo volume, that you'd have to say that as far as this homebuilding stock is concerned, and presuming a close in the 12-or-better-region, let me be the first to say, correctly, that a bottom has been reached in this stock, with firm price support at 8. Actual housing will continue to bite the dust.

2nd Ave, Sounds like you been makin $ my brother......Congratulations!!!!!!!!!!!!!!!!!!!

jogyp-GS is now green...this can only mean good things for AHM...

chris-that's right, man...all before the wife and kids wake up...

SOHU chart looks interesting...high volumes the two days before earnings...is it who knows what or who knows who in china...

I feel like a dummy (stand in for stronger word)... I didn't buy any of the AHM at a buck, and missed out on bigtime scary profits. I also didn't buy BZH at 8 even though I sat there staring at it like a dummy (not really the right word).

Hey 2nd...are ya gonna get back into ahm?

I'm part of the way there 2nd....
I would be careful with GS, the broker dealer ETF is still under pressure.

Interesting segment on bloomberg RE S&P 500 stocks RSI 14. There are 94 with RSI 14 70.

Good ticker stories for GFI although you wouldn't know it by price action.

chris-i think AHM has a chance to run back several dollars/share in the next few days/weeks...but i can't be betting more than pocket change on that...i have no problem day-trading the stock right now...re-entered with a much lower position at 1.30...

Breadth is horrid.

I have no idea what the hell happened to that last post.

There are 94 S&P stocks BELOW an RSI 14 of 30.

NONE with RSI 14 above 70. IOW, read Mark's post. We have horrid breadth.

I am talking about today's advance. There's nothing underneath it. I'll take a look at indices, sectors and groups after the close. I will say that there is damn little risk adoption trades being made here.

AHM-out at 1.51...

...but hanging onto a very small position in the event this cliff-hanger plays out...

New update guys, we're here now:
Continue reading "Cara’s Daily Commentary, Wed., August 1, 2007, 1:19 PM"

Sorry:
http://www.billcara.com/archives/2007/08/caras_daily_commentary_wed_aug.html#more