Good Morning Bill - went to order your book this AM - which connected me to www.booksonbiz.com.

During the checkout process - I note that the shipping cost (Standard/Air) is still listed as $20. I know you previously addressed this issue -

"Regarding the book, in response to my query about shipping cost via BooksOnBiz.com, my publisher says they are working to change this on a country-by-country basis.

The publisher informed me, “We have already credited the US orders that were placed over the weekend $10, so that the shipping in the US will be billed at $10. The true cost to Canada is $15, and the rest of the world would be $20. We’ll get this resolved, but in the meantime, if anyone orders from the US or Canada, we will be crediting them back the difference in shipping. We do not want your readers to think we are gouging them on the shipping.”

Any update on when BooksonBiz.com will fix their web site to show the new/lower shipping cost, and we won't have to go through the $$ crediting process?

Thank you

Maybe we should set up a quant model to match theirs and trade against it.

GDX bid/ask indicates a good open as well as GLD.

Silver/SLW still ugly IMO.

Apollo group upgraded by Suntrust robinson and re-recommended by Motley Fool Hidden Gems yesterday.

encourage reading posts by "peter" and "MarkM" from previous discourse...

going to lean towards the "retest of DJIA 12,800" scenario...out of financials and most miners yesterday...long UNG/NBR/PWE/OIH/BMD + KRY/WGDFF/SLW...if peter's thesis plays out, will be unwinding all positions except microcaps over the next two weeks...

NG futes will open down-what else is new..

"Even if they don't share the same statistical models, quant funds share similar approaches to the market. They are schooled in the same statistical methods, pore over the same academic papers and use the same historical data. As a result, they can easily come to similar conclusions about how best to invest."

all of leisa's research on "phase-locking" now appears prescient and may have applications beyond the original thesis. of course, anyone "schooled" in the methods can easily tweak the model(s) in a contrarian direction..he/she just needs to do it a little faster and a little smarter than his colleagues...

One of the kids I played golf with yesterday spent the summer interning at a quant fund. Where I live is really close to the epicenter of the hedge fund world, and this kid goes to an ivy, by the way.

He described the "trading" done by this fund, and it's nothing like what most of us are doing.

The "trader" is just a computer program, and the "traders" do nothing more than tweak the program and kind of watch it do it's thing. The kid had never traded seat-of-the-pants. The process he described sounded kind of inhuman and very 21st century, 2001 Hal kind of stuff. The program learns from it's mistakes, apparently. It has 50 some odd strategies that it employs, simultaneously if necessary. More and more, these kinds of programs will be our competition.

The owner, whose fund was up over 10 % last month, offered him a job when he graduates, a rather rare occurrence. I realized then that our meeting was serendipitousm and that our skills hardly overlap at all. He is the new breed, and I am the old, but I wouldn't trade places with him, although his lovely gf, who was playing with us, seemed interested in just that.

Last few days every morning Gold starts off very well, then after the market opens it looses all the momentum.
I wonder if it's manipulation.

GG showing strength on good volume.

Bill/2nd_ave -

Their adoption of similar approaches is a necessary, but not sufficient, condition to the wreck witnessed two weeks ago. The quant space has been dominated by a handful of consistent leaders for 10+ years whose success was due to constant innovation. IMO excess leverage has dampened the competitive advantage that one can gain through technical/speed improvements over smaller copycat competitors. The bandwagon has grown (in all hedge fubd categories) exponentially with the leaders pulling most of the weight (and earning a slight extra return) and aping passengers providing extra fuel boosters (and happy to earn a decent profit).

The accident early August (and reported breakdown of expected relationships) may stem from a rush towards the bus' exits which were designed to handle a smaller crowd. Irrationality often prevails when one loses all hopes of salvation; hence the emergence of random shocks that throw quant balance off kilter.

These crowded trade phenomenons have been very prevalent in the last year (see monster squeeze @ AMZN, emerging markets exponential explosion, the nascent chip/technology trade since June) and can be traced back mostly to leverage.

2nd_ave. Unless you have unlimited resources (larger than those on the other side of your trades) and/or insider information (for the conspirationally-inclined from the PPT), you cannot act contrarian to a quant crowd except on the margins or for a "black swan" trade. With leverage being sucked out, we could see the "Renaissance" of the quant leaders and a policing of this marketplace.

JML

Hey Shark_attack

If all that is true about the comuputer programs being used to trade (and I believe it is as I heard something recently which lead me to the conclusion this was happening) it will be very good for people that don't follow the crowd in their investing concepts. I personally am glad to see this happening.

Looking over the Morningstar indexes this morning and I was a bit surprised to see Small Value stocks decoupling from the rest of the market on a YTD basis as much as they have. I would of either expected small growth to have been down as much but that area has a 12% differential over their value cousin. Here is the list:

1 Mo. YTD 12 Mo. 3 Yr. 5 Yr.
US Mkt -3.31 4.1 16.62 12.93 12.89


Lg Cp -2.74 3.78 16.15 11.56 11.19
Mid Cap -4.28 6.44 19.51 17.33 17.45
Sm Cap -6.55 0.66 13.45 13.98 17.13

US Val -5.39 0.76 12.23 14.98 14.48
US Core -2.92 3.99 17.61 12.96 12.84
US Gr -1.55 7.89 20.33 10.49 11.1

Lg Val -4.69 1.3 12.48 14.88 13.56
Mid Val -6.73 0.93 13.15 15.86 16.77
Sm Val -9.54 -6.02 6.99 12.08 16.19
Lg Core -2.05 3.83 17.22 11.88 11.21
Mid Cor -4.99 5.63 20.49 16.06 16.96
Sm Cor -6.41 1.45 14.57 15.87 18.38
Lg Gr -1.42 6.52 19.11 7.3 8.43
Mid Gr -1.15 12.93 24.95 19.97 18.17
Sm Gr -4.01 6.28 18.32 13.66 16.48

S&P500 -3.1 3.64 16.13 11.76 11.81
Rus 2k -6.84 -0.83 12.12 13.4 16.02
DJIA -1.35 7.29 20.84 11.73 11.11

Seamus,

Partially shifting from SFD to SDA. I just wonder how much of the drop in SDA was due to the Brazilian real dropping vs the USD. SDA looks very good here.

BTW, Taiwan's PPT (Pork Protection Team) does not want foreign pork, but China seems to want it (need it).

Your SFD has been amazing.

Bill, I was on the phone last night with Brett Goetschius of DealFlow Media. On August 23 they held a Live webinar with former SEC attorney's Larry Bergmann and Michael McPhail as guest speakers. The discourse in the meeting was quite entertaining as the thoughts of a conflicted agency continue to surface from former attorney's. Bergmann admitting that there are internal conflicts regarding short sales in the markets while McPhail acknowledges the very existence of short and distort tactics.

For any interested an archive of this webinar is available at :

http://dealflowmedia.com/webinars/index.html#archived

New article by Eric Janzen up this morning. I found it insightful.

http://www.itulip.com/forums/showthread.php?t=1903

a snipet:

What is says is that there will be no Fed Funds rate cut in response to the credit bubble collapse. The easy money Greenspan Fed put is gone. Welcome to the Open Market Operations Fed or OMOF. It's motto: Liquidity Without Asset Price Inflation.

Mechanically, here's how it works. The Fed will only do business directly with banks that maintained good loan practices and are the most credit-worthy. Lenders of various flavors such as investment banks and hedge funds that took on a lot of bad loans can only deal with the banks that deal directly with the Fed. They do not have access to the new and improved discount window on their own. The credit-worthy banks can use the weak creditors' assets as collateral to borrow from the Fed.

For example, a distressed hedge fund can't access the Fed directly but can take the mortgage-backed securities they hold and bring them to a credit-worthy bank that does have access to the Fed. That bank uses the paper as collateral for a one month loan. That's why Bank of America, Wachovia, Citigroup, and JP Morgan all hit up the discount window at the same time, each for the same $500 million amount yesterday, to let hedge funds and others know where to go to put up their asset backed securities and CDOs and other paper as collateral for loans. The banks borrow from the Fed, and the hedge funds borrow from the banks. Hedge funds and others can still fail, but in an orderly way versus a simultaneous dumping of assets into a frozen market. The Fed can turn the discount window knob as need to control the rate of failure, averting the dreaded "break in the chain of payments."

geckojb,

re asset classes, nice to see someone else posting top down commentary. No one here has yet said what their annual return aspirations are, but I would be very satisfied with 20 percent on average. Industry groups and country specific etfs can offer higher returns but I am constantly amazed at just being in the right "broad" index, which includes the morning star domestic categories, can bring to the table. Here are some ytd returns on such indices/etfs. Historically,i've noticed that topdowners show disregard for the midcaps, claiming that there is just too much overlap with smallcaps...not true anymore.

iShares S&P Latin America 40 ILF 18.87%
PwrShares Dyn Mid Cap Grow PWJ 18.56%
iShares Pacific ex-Japan EPP 14.18%
iShares Emerging Markets EEM 12.07%
iShares Morningstar Mid Growth JKH 12.02%

geckojb,

Thanks for sharing the info on OMOF. As I see it, the process provides yet another method for HB&B to control the order flow in the markets to their advantage. When bad collateral is about to be dumped or downgraded in the market, HB will sweep their own accounts first, then drop the hammer on the collateral.

Where is everyone today?

Here is an interesting formula:
Total No. Of comments at end of day today = Yesterday's VIX x 4 = 91

Oh.. what just happend to Gold?

geckojb, TerryC great discourse . . .you got it . . . thanks for sharing your thoughts.

Si02 sold SFD in master account, but retaining in IRA. They have their challenges as well as pretty good potential. Daily RSI 7 now over 70.

Brazilain stocks certainly offer opportunity and as a whole I'm positive on them. Unfortunately they are a "crowded" trade and when hedgies face margin calls or liquidation, out they go.

As we speak (write), my AG watch list is all green. Looks like institutional investors may be moving in, we'll have to watch volume/block trades. Miners looking good too!

THAT's a normal chart! LOL! Who goosed the indices?

jogyp-thanks for the alert...selling NBR/PWE/OIH into the related spike in commodities...

Henry C K Liu has a very good article titled:
CENTRAL BANK IMPOTENCE AND MARKET LIQUIDITY which can be found at 24hgold.com.

A recommended read it for all Cara forum members

a few snipets follow:

"It can be expected that sharp volatility in the equity markets will continue as announcements of assurance are issued by the Fed, the Treasury and key Congressional committee chairmen to temporarily boost the market on false hopes, only later to be brought back down to reality.

The market is casting a vote of no confidence in the Fed's ability to save the market. At best, the Fed can slow down the credit meltdown by extending it out into years rather letting the market execute a needed catharsis. It is not a scenario preferred by true free marketers.

No doubt the Fed has an arsenal of offensive monetary tools at its disposal. But just like the "war on terror" in which all the guns of the Pentagon can have no effect unless the military can find real terrorist targets, the Fed's monetary tools remain useless unless the Fed knows where to intervene effectively.

Just as terrorists morph into the general population to make themselves difficult to identify, the problem with structured finance is that by transferring unit risk to systemic risk, it deprives the Fed of effective targets to intervene on a systemic repricing of risk. When contagion has already spread risk aversion to all vital components of the credit market, containment is no longer an effective cure.

Financial health will continue to decline in the entire system until the risk appetite virus works its natural cycle. Excess liquidity is like a drug addiction. It cannot be cured with another stronger additive drug by adding more liquidity. What the Fed is trying to do is not merely to restore market liquidity, but to preserve excess liquidity in the market. It is trying to avoid a crisis by setting the stage for a bigger future crisis."

"Low interest rates hurt the dollar
The problem with the single-dimensional prognosis on the curative power of policy-induced falling interest rates on the ailing economy is that it ignores the adverse impact such interest rate cuts will have on the exchange value of the dollar, which has already been falling in recent years beyond levels that are good for the economy."

"It is not possible to preserve the abnormal market prices of assets driven up by a liquidity boom if normal liquidity is to be restored. All the soothing talk about the fundamentals of the economy being strong notwithstanding the debt bubble is insulting to the thinking mind."

"This is a debt economy fed by a liquidity boom. When the liquidity boom turns to bust, all the strong fundamental indicators such as corporate earnings will wilt from a debt crisis. Asset value cannot be held up by simply adding excess liquidity forever without creating hyper inflation. Also, some liquidity problems, such as those caused by a loss of market confidence, cannot be solved by merely injecting money into the financial system, which in fact will only add to the problem. Restoring market confidence requires a rational restructuring of the economy to absorb excess liquidity.

Price is a function of liquidity which can be quite detached from normal value. Liquidity conditions offer a new paradigm as the key to understanding why and how the markets move. Liquidity is consistently a reliable indicator on which to base the timing of trading and investment decisions. Liquidity is the key determinant of the direction of the stock market, but it does not inform on fundamental value.

The aggregate capitalization of any market or market sector, whether stocks, real estate, precious metals, commodities, debt instruments etc is a function primarily of liquidity, with the economic value having only secondary impacts except when liquidity is neither excessive nor scarce. The total value of any market is impacted by its current liquidity trend."

Per Everbank's Pfennig, Goldman Sachs forecasting weakening dollar over the near term:

. . "we now forecast EUR/$ at 1.43 on a 3-6 month horizon, compared with 1.35 previously. For $/JPY we expect a move to 110 on a 3-6 month horizon, compared with 118 previously."

Seamus,

That explains why "Goldman Sachs long gold position at Tocom has gone up by 3,265 contracts today (yesterday this volume was 1,700)."

And the move up in POG today.

Expect a low volume week next week due to final August vacations. Also, with month-end and the early September holiday, we believe U.S. stocks will remain bid short-term. A few days after the holiday, we expect the downtrend that began in mid-July to resume.

If this scenario plays out and the market trades down to the August 16th lows, check our website for a research report on what we expect will unfold: http://www.2globalmarkets.com

Hmmm...On what blog could I have seen this analogy a few days ago? Gilbert should have footnoted billcara.com

Central Banks Play `Whac-A-Mole' in Credit Freeze: Mark Gilbert
By Mark Gilbert
Aug. 24 (Bloomberg) -- As global credit markets petrify, central banks are playing ``Whac-A-Mole'' ....

MarkM -

Just par for the course as a bunch of individual squeezes are under way on companies with poor business & near term outlook (e.g. specialty retail). I guess that an August Friday is easier game.

We'll see if SPY escape the 1,466/8 gravity by close to see if the "jump the resistance on low volume" game worked here.

JML

Bill....thanks for commentary on India...I got highest relative strength rating on a 175 period momentum indicator within the foreign etfs end of last week...combine this with your observations and it's time to put some cash back to work...started buying this week INP. Finished at open this morning.

Markm,
For xau A have 140 as the bottom of 3 yr trend channel. Would you consider this as the line in the sand for a breakout, or am I too low? Personally, think reversion to the mean can too easily be overstated for an excuse to bottom fish but the more I become familiar with xau index the more that this statistical event applies. Not an asset class to hold at the top. Currently, rsi/7 has positive divergence which gives me more hope of a continuing move upward.

astral25

I have to disagree with your thesis.

You state: "Financial health will continue to decline in the entire system until the risk appetite virus works its natural cycle. Excess liquidity is like a drug addiction. It cannot be cured with another stronger additive drug by adding more liquidity. What the Fed is trying to do is not merely to restore market liquidity, but to preserve excess liquidity in the market. It is trying to avoid a crisis by setting the stage for a bigger future crisis."

The Fed is trying to avoid the collapse of the financial market as it is needed to avert a real market collapse.

As long as the global economy keeps growing the debt can be sustained and reduced once the troops are called back from Iraq.

The reason the U.S. does not have a surplus is because of the cost of the War and it is imparitive to keep the market growing so the government can afford the war and not let the dollar collapse.

Any business, society or economy can grow using debt, if the entity in question can pay off its debt before its growth prospects slow to a point where it cannot maintain its debt and lenders are unwilling to continue to finance the entity in question.

As long as there is global growth the U.S. should not have a problem unless there is a serious event like a nucular one, or such, that closes global trade to slow or turn negitive.

I do not forsee global growth slowing before the U.S. pulls its troops out of Iraq, and it is the war that is the reason for the U.S. debt problems.

World wide political instability is the real problem for the financial markets at this stage of the game.

As I have said before the U.S. cannot afford their market to reverse at this point so the Fed must support it and not allow it to become bearish.

While it is true that entities financially suffer because of unexpected events (causing them to be unable to meet their obligations: thus bringing them to bankrupcy). The debt the U.S. holds will not cause the whole market to falter as long as the growth globally remains in tact.

While U.S. growth was the engine of past economies it is now just a component of the global economic engine. Political instability is the nails on the road that could do serious damage to the U.S. and cause it to default on its paper obligations. But we are not there yet.

Because of the U.S. debt, the government cannot orcastrate a recession (at this time) to allow the ultra rich to absorb the assets of the middle and lower classes: So the ultra rich have the government over a barrel and are forcing the Feds hand to lower interest rates, or they will cause a market collapse by halting the economy (atleast that is their threat, and thus we have the current market conditions).

Peter -

How do you factor the overleveraged U.S. consumer in your Weltanschauung? Whether an interest cut, continued global growth, or withdrawal from Iraq are events that create conditions sufficient for him/her to sustain current levels of indebtedness remains a big unknown in the thesis you laid out. Not only must the banks continue to extend credit, but the borrower must be willing/able to borrow.

You could also argue that the U.S. government could benefit from a pre-emptive recession, a dollar crash and an inflationnary environment so as to erode the debt burden and depreciation the assets held by fast-growing creditors.

JML

Interesting commentary by Peter..even I understand it. What's interesting is that a short term bullish bias pt of view always looks more convincing when the mkt is advancing, and vice versa.

Peter...are you also saying that the ultra rich have a win win situation? Whereby even if their current assets falter they can buy what would then be extraordinarily discounted assets (of the less fortunate)? A close friend of mine is a history prof..he had me read a book about early american presidents and the role of the banks. Andrew Jackson was extremely popular because of the issue that you raise.

Repeat:

"I am posing a question to gold shorts and if it is not answered today, I will ask again tomorrow. You are anonymous here, so there is no reason not to answer and I know that there are traders short of gold that read this site. Convince Bill's community and profit from your trade.

So; what is your rationale for shorting gold in the face of such a fundamentally bullish environment? Please help this simpleton understand your rationale.

TIA

Posted by: g034 at August 23, 2007 7:45 PM"

ALOHA !!

Meantime ... while Western central banks are busy bailing out "bad loans" and derivative WMDs from a bursting credit bubble and the US military is shoulder deep in the Middle East quagmire the Russian and Chinese militaries are building up and on joint maneuvers. I have been watching the two "ex-Communist" powers moving towards another "Cold War 2" for the past four years. Russia has recently radically upped the anti ...

Does anybody know what happened to commodities during the last Cold War?

Link to Cold War: http://tinyurl.com/2myfew

Currently the US Coast Guard blue water fleet are on patrol in the Straits Of Hormuz. What sort of signal must that be to the Russians and the Chinese, not to mention Al-Qaida? Currently all branches of the US military need new equipment and revitalized personnel which will require more unlimited military budgets along with unlimited money for banks and soon to be more unlimited money supply for the retiring baby-boomers who have diligently paid in their Social Security over the past 40 years expecting it to be paid back and THEN SOME! If the US government reneges on baby-boomers then the youth of today will awaken to the con job of paying Social Security and taxes. The US government cannot renege for that reason, but it can cut benefits. The common denominator here is failed US government policy backed up by "unlimited spending"! Once again BIG CENTRALIZED GOVERNMENT is not the cure for anything except prosperity and real wealth ...

This next chart shows US Debt from 1952, which goes to show the build up of debt based on BIG CENTRALIZED GOVERNMENT spending on the BIG THREE policies. Policy #1-LBJs New Society Policy #2-The Vietnam War Policy #3-The Cold War. Now we are soon to have the same BIG THREE spending policies PLUS! LBJs "New Society" will come back to bite us in the ass when the baby-boomers retire. GWB's "War On Terror" the new Vietnam War and now the Russians and Chinese,due to US Military expansionism, are reheating the Cold War and now we have the PLUS ... the BCC(Bank Confidence Crisis)which will turn into the US Dollar crisis over time when you add up all these multiple fronts and multiple crises. This is all typical Roman Empire collapse syndrome ... BIG GOVERNEMNT over extended globally!

Link to US Debt: http://tinyurl.com/34qok9

Lately over two US administrations there has been an attempt to mitigate rising inflation by manipulating, through "weighting", the US CPI. Rising inflation is not good for consumers or the stock markets. Inflationary cycles cannot be stopped by "weighting".

Link to cycles: http://tinyurl.com/3c237r

This is why I see no long term downtrend for precious metals or commodites. I believe the cycle is set to repeat since US government spending cannot stop due to future obligations that only exacerbate rising monetary supply(M3b expansion). Only a complete global monetary and economic collapse(depression)would bring this new cycle to its knees, from which global hyperinflation of all fiat currency would result in an effort to "kick start" the global economy. Under such conditions gold would still be the "go-to" real wealth play. Its a NO WIN for global BIG CENTRALIZED GOVERNMENTS and their fiat currencies ... The long and the short of it is these global governments print and produce nothing but debt. Some say ... "Wait China produces real wealth ..." Yes, but what are they trading it for? Right now they get "real debt" (a US Dollar IOU)in exchange for "real wealth"(goods and services). Thats the problem with globalization built upon the false wealth of fiat money(debt). Producer nations exchange real wealth for the false wealth of consumer nations. I find it a horrible shock and ironic that the two biggest communist nation states hold both real wealth in terms of natural resources(Russia)and in terms of goods and services(China), while the supposed "free market" democracies hold mainly debt! Our Founding Fathers are twirling major RPMs in their graves like punching a hemi Cuda! But hey ... you get what you vote for ... just ask the US Comptroller General(GAO)!

I have a simple statement. I am not nor have I ever been a Racist.

1. Michael Vick is a disappointment as a human being.

2. His defenders, the NAACP, are an even bigger disappointment. How is it that they cannot SEE cruelty when someone of color is the perpetrator?
Are dogs not as worthy of humane treatment as any living thing? What a dizzying fall from the heights of Dr. Martin Luther King to the pathetic inhumane excuse making losers they have presently become.

Dog fighting is NOT s "sport". Dogs can't represent themselves for multi-million $$$ contracts to get out of the ghetto kennels like people can. They don't sign on to get killed if they perform poorly or have too sound a temperament to fight.

I now have some additional ideas to use when certain sports figures like quarterbacks can't play, perform or throw a ball. If we use THEIR rules we can drown, shoot or hang them. How humane. If you can drown a dog for not fighting then it sure leaves the field open for what to do to Michael Vick for poor performance as a MAN. Some people are truly pathetic.

When are we going to treat this type of person with the indignity and shame they deserve?

Craig,
I'm with you man. I can't understand Vick's utter stupidity. At least, I sincerely hope it is stupidity and not sadism or prurient.

Craig,

I believe that animals have rights, and that in the future historians will look back on these days, and the way in which animals are treated, and consider this the dark ages.

GSS showing lots of moxy and is a buy.

Have an awesome weekend, and a good next week too. I will be in Chatham at the little 9 hole course trying to break 39; if you see me say hi, I'm the one with the blue mizuno bag.

Addition to my previous comments, "assuming that he is found guilty".

Great charts on commodities and life cycle of gold above from Kaimu! Like a earth google picture. Thanks.

Ditto re: Craig and Shark's comments concerning animal cruelty.

btw, people who torture animals don't necessarily feel that human beings can't be tortured.

UNG: Added more at 35.4 expecting a bounce next week.

Canada Natural Gas May Advance on Warmer Weather in Midwest
http://www.bloomberg.com/apps/news?pid=20601082&sid=afA5hhUgwNtE&refer=canada

Three really obvious gooses of the indices today.

Social equity starts at home and how we treat one another and all living things. I like a burger or steak like most people, but how we treat these animals is important to our own mental health and humanity.

Once again I'm proud to be a member of the Cara community.

Fred, Mr. Vick pled guilty to Federal charges.
The State of Virginia still has to decide how they will treat him.

I think one must be something of a sadist to find dog fighting entertaining. To participate in the fighting and killing dogs makes it hard to find otherwise.

Vick participated in killing many dogs that did not win:

"Prosecutors charged that dogs sometimes fought to the death and that some underperforming animals had been shot, drowned, hanged, electrocuted or killed by being slammed to the ground.

Vick said he knew that underperforming dogs were killed from 2002-2007, including as many as eight dogs in 2007.

"All of those dogs were killed by various methods, including hanging and drowning," the documents said. While he did not explicitly admit having killed any of the dogs himself, he did say: "These dogs all died as a result of the collective efforts" of him and his partners."

---

If that is not sadism that I do not know what is. Vick has plead guilty today so I don't understand the "assuming he is guilty" part. He is guilty by his own admission. And the NFL has claimed that this is the worst PR disaster in its history.

Back to the markets - to my eyes this still looks like a repeat of the '87 crash pattern so far. Failure at the 76% retrace in the next week, which is around 1490 S&P, would go further in validating this.

Jeff Cooper points out that August 25th is the 20th anniversary of the '87 top. There may be a resonance there.

Okay, I stand corrected. Vick is guilty and he isn't stupid, he's repulsive.

Shorting Golds...
Could be some folks short gold & gold stocks because "nobody knows the future", they could go up, sure, but they could also go down...therefore sell puts plus short the stock covers both scenarios.
for example look at yamana or goldfields this year, if you have been long since january, you would be crying in your beer. yep - some folks would go to any length to avoid such losses, including shorting....... "sad, but true"

People, why are you talking about that dog-fighting guy? The purpose of this blog is to learn about markets!

JogyP
I did not buy UNG today, but, was sorely tempted. Will be looking to buy early next week for a hold until Nov/Dec as natl gas moving into strong seasonal period now.
FWIW XAU and HUI gave buy signals today on daily indicators. Both still on sell signals for weekly indicators. http://www.masterdata.com/

MarkM, do you have a theory as to why the goosing occurred today? Was the market trying to go down when it happened?

I apologize about the "dog-fighting guy" comment, but if you want there are a couple links to markets.
1. Behavior: Everyone is doing well today and either improved or made-up a good deal of lost ground.
Judging from myself: I wouldn't have had time or inclination to write about it two weeks ago as the market was getting slammed.
From Listers: No one would have likely responded even if I did write of it two weeks ago.
Not today. Listers are on their game today.
Few posts and low stress too.

2. NFL sponsors/advertisers. The NFL just announced "indefinite" suspension of said offender which will reflect favorably on the NFL and their advertisers. In bad times and good we still drink Budweiser, Coke, Pepsi, and wear Nike, etc. This will be good PR for these co's.

jogyp-here's the june 20th link that got me started on UNG:

http://tinyurl.com/2bwjqg

he was more or less correct in stating "we are within a week of where prices have a seasonal tendency to stage a one month decline, providing an optimum buying opportunity next month..."

based on the 1900-2002 historical patterns chart, you may be right in expecting a bounce next week that may then run through october...

didn't buy any more today...after 6 weeks of playing the 4% swings, not pressing my luck...basis now sits at 38 1/2, which is where i started the game back in june...good luck going forward..

correction: "back in july..."

Regarding previous comments by Craig, Shark and others about the Vick's dog fighting case - I sent the following a few days ago to the honorable Judge Henry Hudson:

Dear Sir, I read online that you are the presiding judge for the Michael Vick case. I see him as an example for all dog fighting cases as a light has been shown on him. I hope he gets a long sentence as it's despicable what innocent dogs had to endure, particularly when they were tortured to death for not winning a fight they didn't want to be in. Thank you for listening. You have a difficult job for sure in this case.

man, i need to read more carefully: "1990-2003" historical patterns chart..

Myra Saefong on the changing landscape in the gold market:

Excerpts:

"The entrée of large institutional players have most definitely altered the gold landscape to the point where it is no longer the same old game," said Jon Nadler, a senior analyst at Kitco Bullion Dealers. "This new reality has infused additional volatility and counter-intuitive trading patterns into the gold market equation," he said.

Even so, the seriousness of the financial situation is obvious. "A massive liquidity hole has opened in Europe as a consequence of the collapse of the U.S. mortgage market," said Ned Schmidt, editor of the Value View Gold Report. And "the pipeline for money from investors to the real economy is being ripped up."

The situation is characterized by repeated liquidity crunches in which overblown markets have forced speculators to raise cash as markets either tumble or completely shut down, he said.
"Gold has been victimized by this, as it has served as a ready source of liquidity for those desperate to raise cash," he said.
The rush to liquidity and safety at a time like this first targets cash and related instruments, said Kitco's Nadler.
"If the crisis develops into a real dire event, gold ultimately benefits by either falling less in a deflation or by rising as the official sector prints its way out of trouble and creates inflation," he said.

"Gold, by still having value, will be the only asset of choice that remains," said Schmidt. "Gold will be the 'default' ... investment choice by surviving."
So really, "the mortgage market collapse is the catalyst for Wave III, and the next step to over $1,400 for gold," Schmidt said.

Full story:
http://tinyurl.com/2ysqw3

Hang in there Bill. Myself, I'm holding a lot of gold right now in KRY and Franklin Templeton Gold & PM Fund. When it gets over 700 I guess I'll rethink the gold fund. Kry is what it is and Chavez et al controls that situation.

Slogging through the Lewis & Clark book mentioned earlier...very slow read; but actually quite interesting...learning so much about the wilderness! They were brave men. Next, Johnny Cash biography...a lighter read. Have a good week end everyone.

Ouch, 2 kb is very slow. Not as slow as I was yesterday (zero kb!)but too slow. I had no communications at all yesterday and had to go to Dad's place @ 4:30AM to get a connection. Can you get a home page to load with 2 kb/hr? I doubt it. Maybe if you click your heels together three times and repeat, there's no place like home....

I thought it funny that only a couple of days before, there were romantic considerations regarding the behaviour of sheep and dogs, and how this represents human behaviour on the markets, and now we are discussing morality in the context of dog fighting.

There is more ego involved in the markets than people are willing to admit. That's what makes us capitalist running dogs.

I don't think the quants are done yet, but if they look upon gold as a barbarous relic, then their best advice would be not to underestimate man's apetite for barbarism.

Looking at the credit situation and how credit is being doled out to larger financial concerns, the bread line has some awful well heeled instiutions demanding at the same time a bailout and control of financial markets.

Really people may not think in terms of utter dollar collapse, but it is becoming a distinct possiblity. Surley a quant worth their weight would be considering that gold as an asset may have properties suitable to preserving captial in direct competition with interest bearing instruments. Gold is, at least surely a hedge against Yenization.

ALOHA !!

FranSix ... But ya gotta understand GOLD is the most boring trade you'll ever make! You BUY IT and you HOLD IT! It does not lend itself to day trading and quant black boxes. What's so rocket science about GOLD? What's so "dead sexy trader" about GOLD? Holding GOLD is like watching paint dry! It just sits there in your safe gathering dust! Why would anyone really want to invest in a one ounce "paperweight"?

writersblock-

This area had shown a lot of resistance for two days. Perhaps, as another poster put it, the thin August Friday trading provided the best environment for it (the goosing). I will say that the market appeared to want to do absolutely NOTHING before it started, even with the favorable headlines.

I look at my retirement and all I see are dollars that I want to short (sort of quoting Feyd (played by Sting) in Dune "All I see is an Atreides that I want to kill!"). When I take what will be due me in Social Security, my defined benefit corporate pension plan, and my 403b Teachers Retirement Annuity, I can't help but observe that they are all denominated in dollars (Lo, even treasuries are denominated in dollars!) . I have bought some gold bullion and gold, silver, and uranium miners, as a hedge against the decline of the dollar, but I don't have the resources to do much in this direction. When you add it all up, even with those hedges, I'm still up to my neck in dollar quicksand. I spend a lot of time in Europe and it makes me envious to see people who don't have to worry about their economy tanking and their currency turning into toilet paper. They don't even have to worry about doctor bills! They are free just to live their lives! Imagine. Why are we Americans so unlucky relative to Europeans (though still very lucky wrt most of the planet, for the time being)? This question will undoubtedly be asked by more and more people when they discover we have crossed the "event horizon" of the economic black hole we're in. Many of us are furiously paddling in the opposite direction. Still, space is beginning to stretch and time is slowing down--I look down and see my feet receding in the distance.

What are other people doing wrt to the decline of the dollar? What are some creative ways for individuals of dealing with this long term issue?

Moral hazard? Gimme a break.

http://ronsen.blogspot.com/2007/08/saturday-morning-coffee-who-has-your.html

Yes, gold is pretty boring. Prefer rare earths & energy metals myself. They are bound to make life sexy. But I'm completely out of these and will abide by my gold investments for now. Gold is more like your aunt with the wart.

But as a market, gold has some very interesting features.

For instance, a periodicity in momentum (CCI - 8 try the weekly chart) that chimes with regularity like a well made watch. I'm sure this would be of interest to people that like leaps and futures trading.

It seems to shrug off credit.

Yet at the same time, it can be used in fractional reserve in comparatively tiny amounts to represent sizeable currency settlements.

Untold amounts are spent in short of gold operations, yet the eventuality became an obligation for major gold miners struggling to divest themselves of the albatross of their own hedge books. You have to wonder how major miners are going to assess short of gold operations along with their banking cartel friends now that asset backed paper has no value.

They say that a 1% rise in interest rates could draw gold from the moon. Gold could come into competition with treasuries should their interest rates decline. This could be made all the more certain if there is an implication of currency risk, aside from the collapse of credit markets.