Nikkei closed at the low, but it looks like Bill is giving it a chance to "hold."

Recommend you read MarkM's take on things, posted at 649am this morning.

XAU: I see Bill and MarkM "staying away" for now.

Todd Harrison offers an xlnt overview of the risks right now, and is trading the short side. Excerpt: "Market moves are characterized by three phases: denial, migration and panic. If the debt bubble has indeed cracked, as I believe it has, we've got a long, hard road ahead. I shared a similar thought in 2000 with regard to the trading dynamic, and I offer it again in a much broader context. And please don't shoot the messenger. That, in many ways, is the same conditioned behavior that continues to plague our society."

http://tinyurl.com/3x46gp

Nat'l gas futures up 2% at the moment.

If I add it all up>>planning to move to cash this morning...

ProudPapa-thanks for your note re BMD. You really can't beat the local perspective. (I remember driving by what was then the newly-constructed Silicon Graphics building in Mountain View in 2000 and wondering when they were going to start moving in...never did, and the site was eventually sold to another company.)

FWIW,,,as I read the nyse and nasdaq summations, we appear fairly close to a medium term bottom.

It portends to me a run-up till at least December(eom). Of course not in a straight line.

I like tech/chips, etc. and those in cara accum zone.

Dab

Again, we take it one day at a time in a market like this. We judge the quality of any rally FIRST before we pull the trigger, okay? That being said, for LT traders who have been waiting for accumulation zone to appear on their stocks, there are individual names out there that can't be hurt much more than they already have, IMO.

Again, we take it one day at a time in a market like this. We judge the quality of any rally FIRST before we pull the trigger, okay? That being said, for LT traders who have been waiting for accumulation zone to appear on their stocks, there are individual names out there that can't be hurt much more than they already have, IMO.

CDN vs US Banks
A look a monthly charts of C and BAC show limited appreciation since 1999-2000 area whereas the CDN charts of RY and TD show a tripling of price in the same period. Either the US should be a steal here because of weaken dollar OR we should just buy the pullback in the CDN because the US looks like it will continue to weaken..
Any thoughts ???

UNG: Nymex natural gas futures now up 3.5%...unfortunately, the strength in the commodity is not being reflected in prices of NBR and PWE...

SLV: spot silver at 12.30...considering rotating funds out of UNG into SLV as an alternative to cash...

GDX-not willing to take the opening hit, and hoping for an intra-day bounce to cash out...

Happy Independence Day for all the readers in India -- wish I were there flying kites with you!

The seesaw continues, with LEND up 26% in premarket.

It was almost a $10 stock last Friday. Closed at $5.50 yesterday.

Will KRY slide past the $3 mark today?

i see bill is at a crossroads here, and could long or short depending on the traffic pattern...put that together with markm's comment about individual names heading into the accumulation zone, and for anyone who has played the Cara RSI 30/70 plan: i think it paid off when you sold >70 and is about to pay off if you buy in <30...

writing puts or going short are simply ways to tweak the plan for add'l gains...

is there a better system out there...

Great idea rotating into slv 2nd. Same as low cost cash at this point.

I'm underwater GDX and hoping for a bounce as well.

My positions except GDX are small so I'm not freaking....yet.

I'm feeling bullish on oils, NG and associated stocks like PWE. IMO they won't stay disconnected from what Joe Bastardi says is going to be a big hurricane (Dean) and the borderline number that will hit Texas soon. Have you seen the track? Even if it goes in the gutter it will be a strike to the gulf infrastructure.

I think the recent USD strength is due to the shortage of liquidity/dollars to service margin/debt/CDO's/redemptions. There is hint of more fed liquidity today. I'm still hopeful as bullion is still holding here with minor weakness so far.

If you are a PM bull then AUY and SLW are going to be buys. GFI is near the 52 wk low again.

NOW that I check, GLD is strengthening and GFI is up .20....dang....

BEST of luck to everyone. I would like to short but just my luck we would instantly start a monster rally.

Pumping Money: Financial Market Liquidity Explained
http://www.npr.org/templates/story/story.php?storyId=12712136

UNG-exiting at 45.12 and rotating (partly) into SLV at 123.68...

with bill's added input, going to let the positions play out for now...

Monthly capital flows to the U.S., including short-term securities, fell back in June to $58.8 billion from a revised $107.3 billion in May.

craig-venturing beyond SLV into SLW/GFI/adding to GDX, but keeping position sizes SMALL...

adding KGC also..my thinking here is pretty simple: regardless of the short-term outlook, i just like the miners at these prices...

BMD:

*DJ Birch Mountain Tgt Cut To C$3 From C$4 At RBC >BMD

COVERAGE REITERATED: Birch Mountain (BMD) reiterated by RBC Capital Mkts. Reiterated rating Underperform.
07:48 a.m. 08/15/2007

craig-i'm even loading up on BMD...

jogyp-as long as you are dealing with good companies (and i believe BMD has a competitive advantage in a growing market) my experience has been that analyst downgrades are xlnt buying signals...

Bought 3000 shares of WGDFF @ 2.45.

2nd, Just passing the info I am finding.
I am planning to hold for a while. Downgrades may keep the price depressed for few days IMO.

I keep reading about the central banks adding liquidity to the system, but no one evr talks about taking it out.

How does the central bank get the money back?

mlg

Re. gademsky's question, this liquidity was in the form of short term loans/purchases by the Fed specifically for asset backed securities (i.e, mortgages), to be repayed in days or weeks. So the question really is how will they be repayed? What will have changed in days or weeks that allows these loans to be repaid?

If they are not repaid, isn't this inflationary, which is precisely what the Fed is trying to control? Doesn't this just make things worse?

MPEL:

Down 6% on heavy volume. Earnings coming out this friday. Earnings leaking out or what?
Only news I can find is http://tinyurl.com/28rwqn

It's up to the fed, but these are generally short term loans at the fed rate to cover liquidity issues. Now we are seeing overnight rates between banks at 5%, a .25% break over fed funds rates.

Maybe I need to write more about shorting, it appears to be working....when I short we rally.

KGC Call/Put 12.50 position mentioned yesterday was bought for 0.50, currently $0.80. Exiting position because gold and DJIA are up and miners are down, good potential that KGC goes up here and position reverts.

Have we seen a report from Noodle in the trenches as of late?

GLD/SLV reversed hard off the opening lows in the face of continued strength in the USD...who's buying...

Bill -

I am confused. How can Fast Eddie L.'s purchase of 15+ million of Citigroup be a glaring example of an orchestrated take-out at lofty prices (Aug. 3) and a useful indicator to follow whale buyers (at lower prices admittedly) today? Call me cynical, but, if one participates in a take-out, doesn't it seem sensible that one will expect a similar courtesy in the future (or at least some other compensation)? Again, maybe he is still on the hook for a past favor (2003 credit card operations sold to C?).

JML

11:07Fed accepts $4.5 billion in mortgage-backed collateral
11:07Fed lends banks $7 billion in one-day repurchase operation

BMD:
Added some more at 1.90, thinking it's an overeaction to the earnings.

BMD-must be something in the conference call...it can probably be downloaded via their website...

Also added BMD...looks like they are knocking out the stop losses..

jogyp-you will probably in retrospect have added at an ideal time...not adding any further to this morning's position right now...

KRY:
at 2.91.Tempting, but not adding anymore. Just watching.

I'm finding the price action on some of these miners rather freaky...

KGC at 11.6? GG back below 24? AUY below 10?

We have yet to see a rally since May 2006 in the PM miners that hasn't been almost completely wiped out each and every time. Some stocks have maintained advances, but the past year and three months haven't been very good for Mom&Pop PM investors unless they've been jumping in and and out!

This is day 2 of miners getting hit hard while the bullion is flat. There's bound to a be a floor... right? lol

Reloaded some BMD as well at 1.90. Luckily I sold my small position last week....wish I could say the same for some others I am holding. Looks like a stop loss raid and buyers are very reluctant in this environment and therefore not defending the stock price. Already back above 2.00 as I speak.

Thanks to JogyP for the heads up.

Also opened positions in PDN.to and LAM.to yesterday and added today. Will continue to watch developments in theu market....

Markets in general very tenuous. Seems they would like to go down but if everyone is simultaneously expecting it ain't so easy!

SLW is on the cusp of breaking its up-trend (higher highs and higher lows)... Looking to see if it can go back above 12.30!

GDX-how much more can they hit the miners...guess the answer is as much as they want...it stops when it stops...

Closed out my XHB puts and SRS (ultrashort realestate) this morning. Still holding puts on MFX (Mortgage Finance Index).

May be wrong, but have seen too many option week bounces destroy short profits.

Looking to buy some beaten down retailers here and to reenter shorts higher.

Fazeli:

I have found the best success pocketing PM profits is to use the 'BS' method (Buffett Standard or 26%). Trying to hold PM's for the big day hasn't worked for me over the past two years.

There is always something cutting the legs out from under the miners as we march onward and hopefully upward to the clear blue sky; like labor problems, fuel cost, ground shifting under the leach pad. You name it and Murphy's law is standing by for our PM's, mortgage crisis notwithstanding. So take profits when you see them and do it often. Then rebuy like todays opportunity which very well could improve as the the week progresses.

I'm gonna need a tetanus shot after today...ouch!

C.Note:

Agreed... RSI-30 for a lot of the miners is now at or below 30. KGC needs to hold 11.5, UXG needs to stay above 6.15(ish) and SLW 12.3(ish)...

I want to add small bits of PAAS, SLW, and KGC today, but afraid of the falling knife.

Just took a look at a six-month chart of GDX vs. GLD. Each has tracked the other quite closely ... until the last 7 trading days. Relative price differential is now at an extreme. A return to equilibrium (assuming GLD price remains at current level) would require GDX price of 40.50.

From www.housingdoom.com today:

....From Broker Outpost....posted by [Mortgage321321] further down the "Open Letter" thread:

"Dear Mr. President:

It is obvious that many people who purchased homes in the past five years had no business purchasing those homes. Foolishness comes in all ages, looks, creeds, etc.

As a mortgage broker who never did a stated income loan, I lost a lot of business to my competitors (at least the ones that are still around.) I never believed that anyone should get a loan at some teaser rate, have it adjust, and hoping that the client will come running back to me so that I can refinance them again.

Well, in the long run, I guess I was right and a lot of the other mortgage brokers who put their clients in jeopardy were wrong.

Now, it looks like some of these brokers want the American Taxpayer to bail out their clients (who are probably calling them up, cursing at them, crying to them, or what ever) as well as make the broker’s bank account become full again.

It is amazing how they it was okay when the people who need a bail out probably cashed out a few times, went on vacations, buy their fancy cars, and realize that was just borrowed money.

Let the system work. I sold my house in 2005 and I am waiting for prices to get back to sanity. That was the risk I took and if does not happen, then I am out of luck.

However, please do not use my tax money to not make it happen.

Oh, and on a side note, using terrorism as a scare tactic just shows how bad business is.

Thanks for your time."

I couldn't agree more.

Choking on Valgold. Down 15.5% today on 44,000 shares. I'm 40% underwater on this one now.

Have you all heard GS latest?

Their hedge funs cut fees, no fee for the first 10% performance and locked in for six mos.

Wonder why the big fish might be investing in GS hedge funds?

Do you suppose they have these fire sales when the getting is good? Now, those who have Buffett money may not blink, but we little people should take note. Is it near bottom or are they worried and propping up this mess?

KGC is getting too cheap. Picked up AUG 10 for $1.50, no premium. Will sell if it drops 15c.

Marketwatch - August 15, 2007 12:10 PM ET




LONDON (MarketWatch) -- European shares closed generally lower for the second straight day on Wednesday, with financials such as banking firms Deutsche Bank and UBS again under pressure as investors continued to worry about fallout from current U.S. subprime mortgage market woes.

The pan-European Dow Jones Stoxx 600 index fell 0.2% to 365.73, with Deutsche Bank (DB) and Credit Suisse Group (CS) among notable decliners, down around 1% each.

Miners were also in the red, with BHP Billiton down 1.7% and Anglo American down 1.9%.

The weakness in Europe followed a sharp fall in U.S. equity markets on Tuesday, when the Dow industrials lost more than 200 points after Sentinel Management Group stopped investor withdrawals. U.S. stocks opened in the red Wednesday but turned moderately higher by the time European markets closed. See U.S. Market Snapshot.

The U.K. FTSE 100 index fell 0.6% at 6,109.30 and the French CAC-40 index gave up 0.7 % at 5,442.72.

The German DAX 30 index bucked the trend to close up 0.3% at 7,445.90, helped by a 5.1% gain in shares of Bayer on speculation that the pharmaceutical company may be the target of a bid from rival Novartis and strength across the auto sector.

"The markets are still a bit edgy. If you're losing money and you don't know when it's going to end, then you're going to take money off the table," said Robert Quinn, European equity strategist at Standard & Poor's.

Brokers cut banks

Deutsche Bank and UBS were also the focus of downgrades from rival brokers.

Credit Suisse downgraded UBS to neutral from outperform after its rival Swiss bank reported earnings on Tuesday.

"We had substantially underestimated the impact that the combined exposure of UBS investment bank to mortgage-backed securities and Dillon Read Capital Management to subprime and subsequent spillover would have on the fixed income revenues of UBS (19% of group revenue in 2006) going forward," the broker said.

UBS shares fell 0.4%.

And Merrill Lynch downgraded Deutsche Bank to neutral from buy, saying it is no longer comfortable having two of its three European investment banks rated as buys.

"The markets have become more difficult than we thought even in early August. Moreover, the standstill in the asset-backed commercial paper markets shows that financial system stresses are significant. We see no obvious signs of a let-up, and still worry about further possible bad news out of the broader German banking market," the broker said.

Credit Suisse also lowered its rating on French insurer AXA to neutral from outperform and cut its price target to 36.50 euros from 33.50 euros ($45.78).

Given the slowdown in many of the major life insurance markets of the group, and the group's more competitive stance in property and casualty, growth could be lower than we had believed," the brokerage added.

AXA shares lost 1.2% at 28.49 euros.

Nestle up

The defensive food and beverage sector was one of the only Stoxx 600 sectors to trade in the green on Wednesday, boosted by a 9.5% rise in the shares of Swiss food group Nestle .

Nestle, the world's largest food company, posted a better-than-expected 18% rise in first-half profit, lifted its outlook and announced plans to buy back 25 billion Swiss francs of stock ($21 billion).

Other food and beverage companies on the rise included personal goods manufacturer Unilever (UN)(UL), up 1.8%, and sugar firm Tate & Lyle , up 0.5%.

Also, shares in chemical and pharmaceutical manufacturer Bayer (BAY) jumped over 4.8% to 73.80 euros amid speculation that Novartis (NVS) would launch a 70 euros-a-share offer. Neither company commented on the reports.

Shares of Novartis edged 0.4% lower.

Meanwhile, E.On (EON) shares rose 1.2% after the water utility late Tuesday reported second-quarter earnings that broadly met analyst forecasts and held onto its 2007 guidance. Net profit fell 18% to 901 million euros, E.On said.

European retailers were under pressure, with an update from Swedish clothing chain Hennes & Mauritz adding to disappointing news for investors already eying lackluster updates from U.S. retailers Wal-Mart Stores Inc. and Home Depot on Tuesday.

Hennes & Mauritz shares were flat after it reported a 14% increase in sales for July, a figure that fell slightly below analyst expectations.

Europe's second largest fashion retailer by sales, behind Spain's Inditex , said sales from stores open longer than a year increased by 2%.

Just thinking out loud, but seeing how hard the gold miners are getting hit today with the price of gold up today (according to WSJ.com), wonder if there's not some forced selling going on by some hedge funds who are getting hit with Q3 redemptions. If so, tomorrow is the last day for investors to submit for Q3, so if this is the case, should see the start of an uptrend in the next couple of days.

I took a small position in KGC @ 11.47 and PAAS @ 25.75... hoping it works out!

GDX has the feel of forced selling...i'd say anyone buying is benefiting...looking out towards a longer horizon....

I hope you're right BB, as I'm hitting the wall and looking to preserve capital at some point here.

If we break another level of resistance and start moving lower I'm pulling the cord and going partial cash in miners.

I already stopped out of half my UXG position which is pissing me off.

Fred, I don't go down 40%. My rules prevent it.
I hate to lock in loses, but the $$$ is already gone....and I won't put good money after bad in an Edsel.

I'm hanging as long as gld is holding and XAU doesn't take a swan dive. (more than it has).

If I can get out of some of these PM's and miners without losing my ass I'm seriously looking into re-allocating to much more defensive positions, cash and income.

bb and 2nd-ave, that's what my lying eyes seem to be seeing. Everything seems to be treading water today, but gold and silver stocks seem to be heading to the bottom of the sea. It doesn't jive with the spot prices.

Craig - Let us know when you "capitulate." No doubt that'll mark the bottom. ;)

On spike in GLD:XAU ratio to 5+ I bought 1/3 position in miners just now.

I have tight stops for such a volatile position.

Good luck and good trading.

Hey, DROOD, don't make it BAD ....

Is there as a significant gold stock who's up significantly? YES, it's DROOD, up 2.76%

This also represents a bounce off a significant low!

Same to you, MarkM

2nd,
If I hadn't pushed my luck buying into a full position on GDX on the way down.....I would be a buyer here. BUT there is no point in compounding my errors. Now it's got me defensive/on the wrong side of the trade. Now I have to be patient and reduce exposure as I can.

If I wasn't under water in PM's and miners (and losing some peices) I would be buying AUY and probably UXG here.

MarkM - interesting catch re gld:xau! Beyond today's spike, a strong trend of gld outperforming xau ever since the 7.19 top.

UNG-it's edging back towards what i consider a low-40's accumulation zone...

Fazeli:

I’m watching the dividend PM miners IAG, GG, GFI along with XAU index (down in the mid 130’s). Would be a buyer of IAG if it breaks below $7 level, same with GG if /when it sinks below $23, and GFI again if it drops below 14.40 as it did this morning.

Disclosure: own all the above.

I'm sure a lot of us are wondering if we are on the right side of the metal equities trade and whether to bail out. Todd Harrison on minyanville.com notes, "I can't help but wonder if there is a liquidation in the metal equity arena. They don't trade right and, as I like to play these names from the long side, I've been watching the tenor quite closely."

OG, No worries! I KNOW when I feel like this we're getting close to a bottom.

When I sell in fear it IS the bottom. Guaranteed. I have the proof!

So my fear here is a buy signal for good traders.

Mark is confirmation as he would be diametrically opposed to me and doing the right thing.

ALOHA !!

HUI
I believe the HUI March 6 low of 316 level will hold.

ECU SILVER
Bought ECU SILVER today ...
Financials were not great due to production cut and mining lower grades and due to retuning production circuits. Recent PP(Private Placement)provides adequate funds to accelarate to 43-101, which is management's priority. Those companies buying the PP are underwater at $2.35C. One fund bought 648,000 shares yesterday, rest was mostly European selling. BIG down day across the board for all gold stocks. How can HB&B allow gold stocks to shine as DOW is mauled? This is not new and has been the case even in the 1987 crash ... stocks are stocks mentality prevails. Only gold and silver rose during the 1987 crash. Unfortunately ECU released financials on a big down day ... DOUBLE TROUBLE! ECU fundamentals have not changed ... a very large deposit is destined for their 43-101!

I already own as much GG as I care to really, and all at prices I don't much care for because of the USD vs. CAN dollar exchange... GG does indicate directionality of the seniors though.

I also own enough GFI at a 5% loss at the moment, so not sure if I want to pile on more there...

I'm looking for the silver miners to lead the way, hence the PAAS trade! If SLW closes at its current price, I'll be a bit worried about the direction we're headed next.

Sorry, forgot to mention that was a reply to C.Note

Reasoning:

1)GLD:XAU ratio at extreme.
2)Market overdue to rebound so equity will be supportive.
3)$USD looks toppy for this move.

I judge the risk/reward to be favorable but I can be wrong, of course!

Bought 1K AUY on double bottom and RSI below 30.

Craig,

I hope you have can hang on. I didn't check myself, but if Markm sees the GLD/XAU ratio above 5.0, that is an excellent sign.

Following is an excert from John Hussman re gold from March. I keep a copy of this on my desk. http://www.hussman.net/wmc/wmc070312.htm

To put some historical context on this measure, since 1974, the Gold/XAU ratio has been greater than 5.0 about 15% of the time. When the ratio has been this high, the XAU has followed with annualized gains of 89.6%, on average – a figure that remains high even if the data is split into multiple samples. When the ratio has been greater than 4.0, the XAU has followed with average annualized gains of 27.4% (though the finer profile of returns has been sensitive to other conditions such as interest rates, economic trends, and inflation). In contrast, when the ratio has been less than 3.0 (meaning that the gold stocks are very elevated relative to the actual metal), the XAU has declined at an annualized rate of -36.6%, on average.

“Importantly, the return/risk profile for precious metals shares is strengthened further if the economy is experiencing weakness. For example, when the Gold/XAU ratio has been greater than 5.0 and the ISM Purchasing Managers Index has been less than 50 (indicating a contracting U.S. manufacturing sector), gold shares have appreciated at an average annualized rate of 125.6%. In contrast, when the Gold/XAU ratio has been less than 3.0 and the Purchasing Managers Index has been greater than 50, precious metals shares have plunged at an average annualized rate of -49.9%.”

Bill Cara Said: I do believe things will bounce for a month or two, largely on new liquidity from the G-20 central banks.

It is my understanding that recent liquidity injections were Repo's which are nothing short of 1-3 day loans at interest to member banks. The MBS paper was taken as collateral nothing more. The bulk of these loans have probably already been paid back due to their short term duration. I don't understand how this equates to liquidity in the long term sense. As all money = credit is created in debt. It requires increasing levels of debt creation to service principle and interest on existing obligations. If the credit markets are ceasing up and M1 (paper money + vault cash) is not accellerating significantly. How are debt obligations to be serviced. It is my opinion that the Debt-Money System mechanics require ever increasing levels of monetary inflation to continue without recession. Yes M3 is expanding but this is debt if M1 expansion is not increasing proportionally a debt crisis ensues.
These concepts are illustrated in "Money as Debt"
http://video.google.com/videoplay?docid=-9050474362583451279&q=Money+as+debt&total=1040&start=0&num=10&so=0&type=search&plindex=0

I am by no means an expert but in the last two years to perserve my 401K funds I have read everything I can find to get insight into the macro picture. Because I'm am relagated to long term mutuals and Gov. Money Markets (employer claim of feduciary responsability). There is no way to bottom fish for broken stocks of good companies. My performance is subject to average returns of major indexs so the macro picture is paramount to my survival. Since 5/10/06 I've been sitting in gov. money markets. If the analysis of increasing liquidity holds with out significant M1 type injections then borrowed money is being used to service debt, akin to using youcredit card to pay your mortgage. Hoe can this be healthy or result in a market surge now that the cat is out of the bag so to speak and every one knows that the underlying assetts of this highly leveraged market are in steady decline.
Someone please rip my thesis a new one one because I'm getting tired of missing these rallies.
Thanks

Hey Guys: We might be seeing a short term bottom here as BNN (Business News Network) just stated that there is more liquidity in the Mortgage Market today and it appears the backlog in liquidity is no longer a (short-term) issue.

There may be a good upside to this market over the next couple days.

I also noticed the Buy/Sell ratio hit the largest spread since Oct 2002 yesterday which may signal the bottom of the market.

The Long-term trendline on the DJIA shows that a 12600 bottom is posible: but I wouldn't bet either way on reaching it.

The Value Line on the Vector Vest Composite is holding and shows that stocks are worth more than they are trading at.

WGDFF down 9% now... didn't see that coming today!

CHTR, Charter comm, one of the companies mentioned above has a massive put 2.50 position for Jan 08. Just curious, does it mean anything and how does a 110,000 position get open like this?

stormrunner -- Have you considered moving 401(k) balance, either in whole or in part, into a Rollover IRA? This might afford you the flexibility you bemoan no having.

stormrunner:

You certainly sound more intelligent than the average Joe fund investor but doesn't market timing (all in or all out) require you to make two decisions (when to sell then when to buy back in)?

I have no problem with trading in general as most here trade and fade but typically individual issues and they understand that it's short to mid term swings they are after.

With a 401k, as you are finding out it is much more diffuclt to market time since a 401k is a long term investment by nature with limited selections.

I am just wondering if you wouldn't be better off coming up with a long term model allocation to stocks and then raising or lowering depending on short to medium term trends?

For example let's suppose that you decided that under normal circumstances (nominal risk or fairly valued markets) you would maintain a 70% exposure to equities. In times of over-valuation or high risk (you define) you would reduce equities by some amount. Suppose "you" felt the markets were over-valued and risk was high, you would go to a 40% stock allocation.

If the market appeared to "you" to be under-valued and poised for a nice run up you could allocate over your 70% benchmark.

The upside is that you wouldn't have to be 100% right all the time in your market timing. If you draw down and miss a big market move than your account underperforms.

Just my take for someone managing a mutual fund account with limited choices and choices in the end that are typcially all highly correlated with each other. If you had more choices and flexibility then I would feel different.

Good luck my friend!

This appears to be another very weak rally attempt. The way I see it, the Fed is denying wall street the rate cut they covet. As I posted on an earlier date, wall street is not satisfied with injections of liquidity through the discount window. Instead of short term loans at a 50 basis point discount (in the Fed's favor) at the discount window they want a gift of lower interest rates. It seems that such a gift may not be forthcoming. Personally, I have no sympathy for these wall street pigs.

These loans may have to be repaid sooner than wall street anticipates. Repayment will dry up the liquidity injections. The temporary lquidity may save some hedge funds but little else.

I don't believe a substantial rally can be mounted under these circumstances.

A further obstacle to a substantial rally is the uncertainty over the soundness of some money market funds. This is much more serious than wall street believes. People who receive, or fear they will receive, less than they deposited will be very distressed. If the small investor moves her money into CDs or treasuries she is less likely to buy the dips because buying stocks will no longer be a one step hair trigger seamless transaction. She will have to consider tying her money up in the trade long enough to make the cost of selling CDs or treasuries wothwhile.

With regard to gold/silver and the PM miners, I think that their prices are speculation based rather than demand based, and speculative support is being eroded here as well as elsewhere in the market. The action of the last few weeks in PM looks to me like distribution not accumulation. This sector could collapse.

oh oh... KGC broke down from it's 11.5 support!

From a free source, the ratio I was talking about: http://tinyurl.com/2zyhc4

nterestingly, Platmin, PPN.TO is up today around 3%. Are platinum miners not subject to the same rules as gold miners? Also Khan Resources and Laramide are down significantly. LAM is a falling knife that has just about wiped all of its gains in the last few days--incredible!

Valgold now trading near .35. Bill already graciously contacted the CEO and there is evidently no change in the fundamentals. If anyone has insight about LAM I'd love to hear it--a falling knife right now.

New term for the lexicon I read last night in Roubini:" financial dark matter" (the stuff behind CDO's, special purpose entities, etc).

the latest in a string of stories re the inability of well-qualified buyers to obtain a mortgage in the bay area:

http://tinyurl.com/3cwg3k

IMO, it's just a sign of the times...brokers are simply doing what's expected of them in our politically correct culture: over-reacting...

must be a ton of stressed-out people in boardrooms writing new policies with little thought but plenty of haste >> all of which will be rescinded when share holders get over the crisis and start worrying about profits again...

Thank you for your replies, I have considered both the weighting my exposure, rolling into possably a self directed traditional or even roth and taking the tax hit.
However my question is more related to the macro thesis I have proposed. Any insight, rebuttal, what ever would be greatly appreciated. Looking to have an open mind here to the possability that we may not have a severe correction. It's just as I illustrated the facts on the ground IMHO do not support this. I also understand that the market can remain irrational longer than most can remain solvent and this buy the dip mantality could support a short term rally. Seems a dangerous gamble.

Damn, MarkM beat me to it. I use $GOLD:$GDM for much the same purpose.

(I'm going to try some HTML here, the following may be garbled)

BTW, I don't trust this rally AT ALL.

$GOLD:$GDM

well, that didn't work...

try

http://tinyurl.com/ytj56q

VAL, KGC:

All miners are going down. KGC, KRY, WGDFF, UXG, AUY.. you name it. It's not just company specific.

Looks like after driving the financials down almost 25%, sellers are looking at other sectors(Metals and Miners).

Trying to stay away from further bottom fishing.

...speaking of which, once they get over the yet-to-be-determined cause of the sell-off in miners, current prices should look pretty good...it feels like an over-reaction as you wade in, but you don't really know until the light of day how much of one...betting the attitude changes from having too much to having enough if/when XAU reverses...

stormrunner - Rollovers directly into a rollover IRA (not a traditional or Roth IRA, but a ROLLOVER IRA) do not have any "tax hit".

..make that "NOT having enough if/when XAU reverses.."

GDX breached June's lows, and $HUI is near. What does it mean?

To me it means get out to live another day. Out of KGC - for now.

Hugo Chavez has lost his marbles....
He's not looking for a Socialist society to benefit the Venezuelan people, he is looking to be a new 21st century dictator. No way will independent business survive a Chavez dictatorship.

Article is from the New York Times;;;;

CARACAS, Venezuela (AP) -- President Hugo Chavez will present his blueprint for constitutional reform Wednesday, proposing sweeping changes expected to allow him to be re-elected indefinitely.

Chavez, who is seeking to transform Venezuelan society along socialist lines, unexpectedly announced late Tuesday that he would unveil his project before crowds of supporters at the National Assembly. He predicted it would bring renewed political upheaval to Venezuela.

Chavez's political allies firmly control the National Assembly responsible for reviewing his proposal as well as the Supreme Court. His critics accuse him of becoming obsessed with power and seeking to become a lifelong leader just like his close friend Fidel Castro.

Chavez rejects allegations that he poses a threat to democracy.

The Venezuelan leader predicted that most people would support his proposal to reform the constitution, but he also forecast the beginning of a tenacious political battle with the nation's opposition.

''I have faith that we are going to convince the immense majority of Venezuelans of the necessity and the immediate benefits that this is going to bring the country,'' Chavez said during a televised interview.

''Tomorrow our great battle begins,'' Chavez said. ''They are going to launch a campaign tomorrow to try to distort the text and the spirit of the proposal.''

Dozens of government supporters wearing red -- the color of Chavez's ruling party -- started gathering early Tuesday outside the National Assembly, where sound trucks and giant video screens were set up in preparation for the president's public address. A recently-nationalized telecommunications company sent text messages to mobile phone clients inviting them to the event.

Chavez has revealed few details of his reform proposal but has stressed the need to do away with presidential term limits that currently prevent him from seeking re-election in 2012.

All but a handful of the National Assembly's 167 members are Chavez loyalists, and critics expect lawmakers to approve most -- if not all -- of the president's reform proposals.

Many lawmakers say they support the idea of eliminating presidential term limits, but they argue the same rules should not apply to state governors and mayors.

National Assembly President Celia Flores said lawmakers could finish the reform debate within two months. Under the constitution, the final draft of the proposal must be approved by voters in a referendum.

Roman Catholic leaders have been among the most outspoken critics of Chavez's plans to rewrite the constitution, and the Venezuelan Bishops' Conference has complained that his reform proposals were drafted without public involvement. Others argue Chavez has dangerously divided Venezuela along class lines.

Since his re-election to a fresh six-year term in December, Chavez stoked fears that he his headed toward Cuba-style communism by creating a single ruling party and nationalizing Venezuela's several of key industries including the oil, telecommunications and electricity sectors.

''The majority of Venezuelans don't want socialism. He wants our country to be like Cuba, and we aren't going to accept that,'' said Linda Dos Santos, a 30-year-old shoe store owner who fears the government could move to seize second homes and distribute them among the poor under the pending reform.

Angel Angulo, a former horse racing jockey who currently works for the foreign ministry, denied the wealthy would be targeted by the government as Chavez moves to bridge the gap between the rich and poor.

''Socialism will bring benefits to those who need it the most, but all of us can live together,'' said Angulo, adding that Venezuela's opposition leaders oppose indefinite re-election ''because they don't have any chance of being elected in forthcoming elections.''

Chavez, a former paratroop commander who was first elected in 1998, denies copying Cuba and insists that basic freedoms will be respected under his government. He says that democracy has flourished, rather than diminished, under his administration.

Chavez pushed through a new constitution in 1999, shortly after he was first elected. He says the charter must be redrafted in order to steer Venezuela away from capitalism.

Yes I know the roll over IRA has no tax hit, Being that I do not have immense sums of money I mention,"or even roth and taking the tax hit". I have considered a self directed Roth so as to have compound interest gains tax free in retirement. I equated "self directed traditional" with "roll over" may be this is incorrect. But my Tax reference was to the roth part of the statement.
At any rate again my thesis is what I'm interested in, not so much "what" to do with the money as to "when" and "why" as I stated and geckojb reiterated timing the macro picture is the problem but not so much of a problem, barring the noise, as to determining the trend.The trend and the reasoning for your projection of the trend as it relates to the liquidity issue I posted about.

SLW and KGC getting slaughtered here.. KRY is dying too...

stormrunner-

As long as you have a sound methodology for re-entering the markets, you need not worry about missing rallies in markets that are overvalued. My opinion (both as to valuation and LT returns).

This is very likely the culmination of the credit cycle. At some point, cash will be king. That being said, even Jeremy Grantham is not 100% cash in times like this. His equity allocation in GMO Global Balanced is about 50% if memory serves me right. Bonds and Absolute Return strategies are the other 50%. Sounds about right to me (though JG tends to be a bit "early" on his reallocations).

Best...

Almost every peak of xau goes south with rsi crossing 50. The odds are huge for a huge percentage sell off. Shame on me for putting the cart before the horse (ie not using the charts to estimate risk) and then holding out hope that this would be different and gold would march toward 750. Mark M's ratio of gold to xau would have told the story too. I am now surprised to hear that others are surprised to see xau keep dropping. 3-6% or more is likely if using history as a looking glass.

Mining stocks like HL that were already taken out back and shot a couple of days ago are holding up well. Seems to me to be selective sellings.

stormrunner -

Looking forward, a roth ira may be better than a conventional. This is argued in The Coming Generational Storm, by an MIT economist, which attempts long-term federal revenue and expense projections, and concludes we shouldn't assume that tax rates will be lower in retirement.

Holders of NEM, RGLD, and AU must be happy today... while most of my stocks are down 5-8%, those ones (which I don't own) are at a 1% loss or less.

$HUI's June low breached, ending a string of multi-month lows that have held. This must mean something big.

The only way to invest in a market as corrupt as these is find a monkey that can throw a dart at a list of US companies. What every name the monkey targets, short the company with every dime you can margin at exactly 2:00, presto.....your a millionaire by the close!

Craig -- Hurry up and throw in the GDX towel. Please!

Thank you MarkM

"This is very likely the culmination of the credit cycle"

And being that Credit cycle peaks probably?? lag equity cycle peaks by 3 to 6 months

Do you agree that Repos are not adding any permanent liquidity that would influence a return to new highs. And that possably a real predicting factor of FED intervention in attempt of a save, is largely limited to noticable changes in either the discount window, fractional reserve ratio, or M0 increases, and if excuted in timely fashion maybe with another significant lag this might get turned around.

Thanks for your input.

jasper-i don't think the sell-off is going to play out the way it's "supposed to." the fact that we're all stumped attests to that. going back to todd harrison's advice from tuesday:

"Be smart, make your own decisions and allow for an ample margin of error. The time to practice our lessons learned is right here and right now."

stick to your rules-which will be different for each of us..

stormrunner-

Correct. Repo action to defend FF rate is not the same animal as the others you mention. The only thing different about Fed action recently is the AMOUNT of MBS they accepted. (Note that this was not subprime garbage.) Likely what banks had on hand to give. The fact Fed made it so public seemed another sop to market. All in all, they gave Wall Street much less than they hoped for.

bidding for WGDFF here at 2.28...

ooomph-

I am continually amazed at the underlying weakness of this market. The numbers don't lie.

adding to SLW and GDX...

Hi MarkM,

Thanks much for your comments. Would you be able to suggest a couple methodologies for re-entering the markets, assuming that the purchases would be held longer term (perhaps 3 years or more). Again, thanks.

Rich

Miners dumped and hit hard as GLD only down a bit.

FXY a rare positive in the portfolio.

yen starting to unwind . . . check the "tell" NZDJPY=X on yahoo . . . this may exacerbate the selling more as the hedgies may look for the exits. Not good.

Again thank you MarkM

I will accept this as a confirmation of a sound thesis then,

And will not salivate "try not to a least" at the head fakes that are certain to occur shortly.

2ave-

:)

2nd Ave is right. No one knows how deep the rabbit hole goes right now and everyone's crystal ball is cloudy. I am not sure anyone can reconcile what is going on. Let's get all known info out first then go from there.

I can't help but think that the market not only is roiling from current crisis but is discounting out 6 months right now. Hard to paint a Merry Xmas with retailers in trouble, the problems in China, inflation and the consumer squeeze.

I should of said problems with China's goods.

MarkM, is that a laugh or a happy smile?

If someone told me Kinross would drop 10% in one day I'd not have believed it. Still sitting out.

Funds must be really desperate to raise cash to be throwing out quality companies like this.

Will Bernanke cave ?

Saw an article suggesting that if Bernanke wants reappointment in 2009, he may have to let housing prices determine monetary policy. Other words, if housing prices tank, the new prez might not reappoint him. Also, futures markets pricing in a rate cut in Sept.

BUT, it occurred to me, Bernanke is NOT a Washington operator, like his predecessor, and may surprise the world by hanging tough on rates. He's an academic - and a very good one - and could happily return to Princeton with his reputation in tact as one who refused to give in to screaming Jim (Cramer) !

Food for thought ....

SiO2-

Major cajones.

storm-

I am a big believer in mean ol' mean reversion.

my kgc and paas bets didn't work out too well... hanging on to them... hoping there's a high degree of fear selling here... With the price of gold barely moving, and even silver doing decently, I can't imagine so many miners losing 8% market capital in 1 day being all that sane!

Some observations:

Miners are being dumped but on very average volume, unlike the financials, which are being dumped on high volume. Seeing AEM and KGC down 9% is shocking.

Gold is holding strong despite a big rally in the dollar. Earlier this year, when the dollar rallied, gold took it on the chin. Once the dollar rally ends this portends a rally in gold.

There better be a broad rally tomorrow, as Bill expects, or else the door opens wider to a black Monday IMO.

craig-something feels wrong here...betting is doesn't get this wrong without it being an opportunity...will find out soon enough..

Regarding GDX, I follow XAU/HUI for trades due to longevity of each.

Bill's "go long" signal is when RSI 7 turns up from under 30, crossing above 30. I simply don't understand all of the consternation due to the fact that if you follow Bill's trading style (he's teaching to fish, you know), you simply wouldn't be in, or at least your position would be so small as to not bother you.

I repeat for the umpteenth time; "plan the trade, trade the plan".

Remember August '82, MarkM?

That's what this looks like, only upside-down.

g034, very true and correct, but that happens with very few stocks. The daytraders would be doing nothing all day, or go golfing instead (which may save them money :-))

g034-

Now where have I heard THAT before? :)

Yes I do, oomph. Yes I do.

SiO2 - sorry, I forgot that this became a "daytraders" board. Please dismiss everything I have ever wrote as old school, therefore it doesn't work ;-)

"And now a word from our sponsor; Be a friend, don't let friends catch falling knives."

MarkM - hope the new digs are working out for you. Like your ratio trade, waiting...waiting...waiting...

Aug 1982: Dow was 882.5 something, IIRC. And it just kept going and going and going like the Energizer Bunny on steroids.

MarkM put his finger on it: this is the end of the Credit Bubble -- and it was a looong time inflating. But a ballon takes less time to pop than it does to fill, hence what we see now.

I disagree with Bill that "adding liquidity" is going to solve anything. A Fed Funds rate cut may perk the markets up a bit, but that's just a Pavlovian response to a couple decades of Greenspan dog whispering. Bear markets are real -- it's just that we haven't seen one in a generation.

This is a global phenomenon based on the theme Kaimu (aloha!) keeps pointing out from history: governments is (are) too damn greedy to be trusted with a fiat and fractional reserve banking system.

I keep my eye on gold shares, too. And like Kaimu, I buy the physical stuff. But until this market finishes at least the first leg down, I'm not buying any shares.

I'll know the first leg is over when there's blood in the street, or a Bear on the cover of Time magazine.

g034-

New digs are great. We love it here.

I am losing my touch in my old age. I am $244 under water on my buy. :) I'll have to work on patience. Maybe some breathing techniques or yoga.

How do I get commercial sponsors of my posts like you have?

Well, we are there. Two days (with an minor options expiration thrown in for good measure) to know if 12,800 bounces nicely. Tonight's news should paint as grim a picture of the world as can be (and fumble through an explanation of why their Jul. 19 broadcast was sounding so rosy).

It seemed to me all day long that a bunch of the up-move leaders were beaten with a bit more energy than the lesser stocks I follow. Were hedgies forced to part with the winners last?

JML

Disclosure: Nibbled at a speck of DDM at close to see if I can front-run a small bounce here.

The phrase "plan the trade, trade the plan" first came to this board from me, via a better trader than I. The reason that I am bringing this up is that the trader in question (can't remember his name) was incredible, he had his own website and passed away about 5 years ago. His wife took all his "stuff" gave it away and shut down the website before I could actually take notes. He overlapped traditional ta with esoteric stuff like sun spots, moon phases and such.

Does anyone out there know who I am talking about? Does anyone have any info on his trading techniques? John, are you out there?

Maybe you could pm me through Bill?

TIA

Wasn't there a TA named Crawford who liked sunspots and moon phases? The rest of his work seemed pretty solid, IIRC. I remember him on FNN, back in the day...

Can't remember the first name. "Plan your trade and trade your plan" is a saying as old as the hills, I think.

Arch Crawford. Just Google-it.

g034, it's just on thread here that was supposed to be for daytraders, perhaps soon to be moved by Bill. We do love your comments here.

I asked earlier abour CHTR, one of the stocks mentioned by Bill at the top. Today there were 25,000 Jan 08 2.50 puts traded. That is a lot of money. I was just curious, how can such a massive transactions occur. Is this a pre-arranged transaction by two parties?

Perhaps someone here is writing those puts :-) Thanks.

Holy Cow! Sorry I couldn't post in the last 30 mins or so guys.

I felt like Mickey Mouse in "Fantasia". You know, the Wizard's errant apprentice, only the brooms went ape shit throwing money away and I couldn't stop them. I pulled the cord and *NOTHING* happened. GRRRRRRRR. "Sorry, we cannot confirm your sell order of 850 shares of GDX....."
You can do the math if you want to know how big a bandaid my a@@ needs.....where did we start this AM? $38.09 or so?

My Scottrade platform took a giant S and I had to reboot in the basic format to get the hell out of my $2150 loss golden dunce cap (read GDX)when XAU broke down. I also reduced my WGDFF holdings by half throughout the day before I took a loss there.

I am still holding gld, GFI, SLW (frickin' ouch)WGDFF and dividend paying oil/NG/driller trusts (PGH, PWE, PDS).

When we started to really sell I shorted XLF and bought DXD and SDS at the best prices I could.

Needless to say I think we go down from here to at least 12,800 DOW. I'm willing to sit on small holdings of the above until we find our direction.

If I'm wrong and we rally then I'm good, if not I'm going on the berry and "picinic" basket Yogi the Bear diet which is also good.

Sure feels like distribution to me. I thought it might be prudent to carry some luggage out the door before the rush. At some point you have to believe the sellers.

Remember the market waiting for the fed to pause?
I think we see something similar in timing and the market tanks waiting for Gudeaux to cut. I think Ben ignores the crying, kicking and screaming tantrums of the street.

Apparently the market is starting to think the same or they are trying to force Ben's hand or we would have rallied on liquidity influxes today. They clearly want a free hand out and will kill the market if they don't get one. I'm not into betting on the idiots playing chicken with the fed. They can stay irrational long enough to wipe me out. No thanks.

It will take a fed cut, some really good jawboning/promises with market action, or a verifiable end to the tantrum to get me to do anything but short at this point.

omphalos-

It is possible that we have just witnessed the peak of the Credit Bubble and are starting down the slope toward a new order. Yet, call me old fashioned, but we are not even close to fully underway and we don't even know where/what the final destination is. I would agree that odds of a Bear market have risen as have the odds of a recession (hopefully a classical one, not the half-hearted variety that leaves capacity adjustments and risk tollerance still off kilter). Pronouncing the Death of the Credit era, the advent of a unprecedented Depression from a scant month down is IMO as silly as the Bulls crowing on the booming of a new World economy and the perfect partition of risk. Reflation may be a Band Aid that works for a while as can an intervention from Congress to decongest the credit markets, esp. if they decide that "too big to fail" is an applicable principle.

I agree with you that bargains will be found down the road and I hope to scoop some for my family too. But I am also cognizant of a saying a banker friend of my father used to share with us: you experience a Bear market by the scars you earn trading either long or short, for the beast has no mercy.

JML

in case my earlier post was not clear:

"venturing beyond SLV into SLW/GFI/adding to GDX, but keeping position sizes SMALL..."

Posted by: 2nd_ave at August 15, 2007 9:46 AM

...averaging down into a manageable position should NOT be interpreted as advocating getting in the way of any falling implements...

Times like these---Can't help but think of that old Chinese symbol signifying danger, but also opportunity. (Too bad my keyboard doesn't have it)

Weren't there rumors months ago about BAC possibly buying CFC? It's certainly cheaper now.

Bill, yen at a 116 handle. If it continues to strengthened down towards 110, won't the carry trade unwinding result in more throwing the baby out with the bathwater for equities easy to sell?

Bill,
Isn't part of the pressure the (temporary) demand for USD to service debt/margin/redemptions? This puts some strength into the dollar due to short term demand and temporary weakness in PM's.

..also see the current environment as one in which day-trading has and will continue to outperform any other strategy...i don't argue with what works...

Bill -

Trading on CFC almost looked to me like the powers that be were looking to find a bottom for this poster child (9x recent volume average; 10%+ off the day's lows). I heard elsewhere that CFC was one of the likeliest to be "helped" through the crisis b/c their failure would condemn the place to hell fast. If the stock gets out of the week here or a bit higher and develop a $20-25 near-term trading range, some appearance of stability may be restored. Else Mozillo better learn the flight schedules to Charlotte, NC or bury the hatchet with Kovacevich and hitch a ride on the next stagecoach up the coast to San Francisco, because his fortune's salvation (however reduced it may be) would rest in the goodwill and vulture greed.

JML

Seamus-the word you're thinking about is "crisis," and posting a link I think you'll enjoy reading (excerpt):

"There is a widespread public misperception, particularly among the New Age sector, that the Chinese word for "crisis" is composed of elements that signify "danger" and "opportunity." I first encountered this curious specimen of oriental wisdom about ten years ago at an altitude of 35,000 feet sitting next to an American executive. He was intently studying a bound volume that had adopted this notorious formulation as the basic premise of its method for making increased profits even when the market is falling. At that moment, I didn't have the heart to disappoint my gullible neighbor who was blissfully imbibing what he assumed were the gems of Far Eastern sagacity enshrined within the pages of his workbook. Now, however, the damage from this kind of pseudo-profundity has reached such gross proportions that I feel obliged, as a responsible Sinologist, to take counteraction..."

balance of story below:

http://tinyurl.com/r467e

The moral hazard in the USA reached all the way down to the counter clerks at Trader' Joes and Whole Foods, the "folks" who make their livings walking up and down driveways with leafblowers on their backs and those who recently swam the Rio Grande (moving north of course). Sadly, even they had bought into the insanity that it is possible to "borrow yourself rich" through residential real estate games, taking down half million dollar or greater loans in California with no ability to make the payments without endless inflation to allow a yearly refinance so as to borrow the money for the payments. The only people not in the game were the "whores on second avenue." So obviously the plug had to come out.

To have allowed the moral hazard to reach essentially everybody was the signature act of insanity of post WWII central banking. BB knows with absolute certainty that the cure for this happens now with lots and lots of pain or the late 1970s inflation blowoff comes again, perhaps with no real solution since the relative position of the USA is today far weaker than during that period.

There may be no solution at this point since the USA economy is not designed in such a way so as to survive a nominal 20%+ fall in residential real estate prices.

"The mess that greenspan made" is the understatement of the (new) millenium.

hello all-
two interesting newsbits:
The US Federal Reserve said Wednesday it may pump more money into the jittery financial system when the stock markets open for trading to meet increased liquidity demands.
The Federal Reserve Bank of New York said that market conditions suggest that an injection will be needed in the federal funds market "to accommodate heightened reserve needs."

The operation would be conducted at the bank's desk opening at 9:30 am (1330 GMT), it said in a statement. The Wall Street markets open at that time.

The New York Fed, which is responsible for such operations for the central bank, said it "stands ready to conduct further operations later in the day if needed."

The Fed pumped a total 64 billion dollars into the financial markets in operations on Thursday, Friday and Monday to soothe investors' fears over a credit crunch tied to the troubled US housing sector.

and...good news for those of us who got hammered in the PMs today:

Soros reports stakes in mining, metals and oil
By Laura Mandaro, MarketWatch
Last Update: 4:33 PM ET Aug 15, 2007
Print E-mail Subscribe to RSS Disable Live Quotes
SAN FRANCISCO (MarketWatch) -- Soros Fund Management said Wednesday that during the second quarter it took new stakes in both sides of a thwarted aluminum merger, Freeport-McMoRan Copper & Gold, and oil giants including ConocoPhillips and ExxonMobil.

The New York-based fund company run by billionaire investor George Soros disclosed it owns more than 4,700 shares in Alcan Inc. and 11,000 shares in Alcoa, according to a securities filing.
In May, Alcoa launched a $27 billion hostile bid for rival producer Alcan but withdrew the bid in mid-July when Alcan
accepted a higher offer from Rio Tinto. The Soros fund also revealed new stakes in a slew of other resource firms since its first-quarter filing.
It owns more than 407,000 shares in Phoenix copper producer Freeport McMoRan Copper & Gold Inc.; 40,000 shares in Canadian gold miner Goldcorp ; and 15 million puts in Aluminum Corp. of China.
It also bought oil companies ahead of a July run-up in crude-oil prices. New stakes include more than 13,000 shares in ExxonMobil, 5,000 shares in Chevron and 432,000 shares in ConocoPhillips (COP:

Evidently even moneymarket funds are riddled with financial dark matter. After about three or four releveragings, what starts out as a mortgage ends up sitting there in your moneymarket fund via a surreptitious version of Gresham's Law. How will we know how much of our pension or moneymarket savings is at risk? Between the dollar tanking--ie, no social security or pension that's got any value left in it, and this latest development, I'm beginning to really despair at having anything to retire on. I can't help but believe that this outcome was engineered from the beginning. With all those trillions of dollars sitting in the social security trust fund and private pension plans, there had to be some way to raid those assets. Is Karl Rove behind this and is that why his work is done and he can retire (LOL)?

One thing I would like to note: if you followed Bill's AZ/DZ with Whole Foods, you would have picked it up around 37 a few weeks ago. With the huge selloff the stock is at 41.50. As Bill says, proof of concept.

I purchased Chesapeake Energy (not a Cara 100) in January using this method. The stock stayed flat throughout the February selloff and I exited in May with a 20% return.

aucourant: MMFs publish lists of quarterly holdings. Read yours. It is generally available on their website if you root around enough. I read Fidelity Cash Reserves this a.m. and was generally consoled. The bulk of my cash is in American Century US Treasury Only MMF, which allows me to sleep at night, but their trading platform is slow.

This is featured on Marketwatch. They are getting more mainstream with gold:
THE GURU'S CORNER
Only panic is left
Commentary: Time to fix the roof of your financial house
By Harry Schultz, International Harry Schultz Letter
Among things to do:
Assume the worst scenario is possible and plan for it. If it doesn't reach that stage, you won't have lost traction but bought yourself peace of mind and financial insurance.
If you own the high yield currencies (I do), switch partially to low yielders for now. My favorite is the Swiss franc. Pays near zero interest but chart is bullish, so should give you capital gain. See currencies.
Worry about banks (all of them). Time deposits, even current accounts, in Europe, U.S., Canada and Asia banks are at risk if the bank goes under or takes a "bank holiday" (1933). The only things safe from bankruptcy to keep in a bank are: gold bullion (if in your own safe box), stocks and bonds. Stocks and bonds are kept in safe custody accounts so they are ok if your bank tanks. (Some world banks have insurance, but it's under $12,000. In the U.S., FDIC insurance is $100,000, which is nice but not sufficient for most middle income citizens, nor is it immediately payable in most cases. Additionally, not all US banks have FDIC insurance.)
Cut your stock positions down if you are too heavy there and/or use stops. Hold mainly oil, natural gas, base metals and precious metals. In general stocks, stay with big, big caps.
Reduce your U.S. dollars to near zero on the present rally, which should move up (on the U.S. Dollar Index) to 83 before topping.
I hope this scares you into doing something, even though it most certainly won't be enough. Bon chance. Good luck.
Uncle Harry

full article here:
http://www.marketwatch.com/news/story/only-panic-left/story.aspx?guid=%7B175F20E8%2D7018%2D41A8%2DAC95%2D53D18D5A1D38%7D

Craig,

Re: Valgold (VAL). Obviously I'm upset about being 40% underwater. But, that equates to 20 cents per share. If their story plays out, as I hope it will, then the 20 cents will be insignificant. Today, Val fell 16.67% on 99,500 shares traded or $36,000 in trades. This is a company which I believe has 60 million outstanding shares. I didn't buy Val for a short-term trade. Time will tell whether they can complete a viable feasibility study. In the meantime, I would like to see the company's PR people issue a public reassurance. It would also be nice to see some insider buying. I really hope company executives don't exercise options and sell.

Just a wealth of information on this board today. Thank you everyone!

northforker-re the Soros post..i don't doubt the numbers, but i don't like the timing..feels a little like they needed to light a bid under a few positions opened in Q2 they don't want to see go underwater..

[Joe Battipaglia on the Kudlow Show was the best I have ever seen from him -- "A]

Todays Larry Kudlow's Show here:

http://www.cnbc.com/id/15839263/site/14081545/

From "goldilocks" and "subprime containment" to "meltdown".

Start at the 5pm video.

Although I bought WGDFF and AUY today and the fact that they are slightly underwater, I am ok with it. You will not find the bottom. One just has to buy when everyone else is selling. We will all be happy with our positions soon. I still want another 5K shares of WGDFF. I will buy tomorrow if it pops down in the am.

2nd ave:
possibly. the whack has been heavy in the stocks of late. Right after the Soros story was posted, i noticed a $2 jump in spot, which immediately got whacked down again. Reminds me of that game were you pound the gophers with a mallet!

re day-trading:

Want to make it clear that I neither advocate day-trading for the average investor nor do I disparage those who engage in it. I have mentioned previously that I enjoy the occasional adrenaline rush, but also that I have a family and intend to manage our funds responsibly. The bulk of our portfolio is in cash, and will remain there until it becomes clear it's time to go long (I don't like going short and have never had much success with it). The market environment right now is highly volatile, and I see nothing wrong in changing my trading style to whatever works. If you're playing a game and your opponent is whipping your a--, find a change-up that works-for crying out loud, why keep throwing the same old fast ball...

Position size is high on my list of lessons learned-I've brought it up many times, but don't feel I need to create a tag line. BMD and KRY were/are highly speculative positions, and with one memorable exception, I don't think anyone on this board owns an unduly large position in either company. I have taken "outsize" positions at times, but I assure you that no single position in a "spec" has ever exceeded 5-6% of the "port." Wife and I will consider high-percentage positions from time to time, but only in large-caps or sectors (eg, OIH or UNG).

jasper-I remain confident you have no need to change your LT strategy. Every sell-off in the market including '29, '87, and 2002 has proven to be a blip on a LT chart...I only suggest taking a little off the table when things look great, and adding back on a day like today-it helps to "manage your risk, and cut your basis."

Wish nothing but the best to all on this board, and appreciate all contributions...

northforker-Whack-A-Mole? yeah, the little one loves it...

From the Toronto Globe and Mail tonight - more talk of forced selling in the metals....

Canada mining stocks take hit from credit worries

15/08/07

By Cameron French

TORONTO (Reuters) - Canadian mining stocks fell hard on Wednesday as worries about credit markets prompted hedge funds to sell the recently high-flying issues.

Fears that the crisis could start exacting a toll on global economic growth also contributed to the decline as some wondered if demand for commodities would begin to abate.

"This is a group that was held by a lot of hedge funds in the rush to liquidity. Unfortunately these stocks are being dumped," said John Ing, president of Maison Placements.

"What they're doing is taking profits there to offset the other (falling) stuff. If they've got margin calls, or if they have redemptions and they can't borrow money, then you have to sell what you can sell," said John Kinsey, portfolio manager at Caldwell Securities.

"You sell your winners, but you have to keep your losers, because there's no market for those things."

http://www.globeinvestor.com/servlet/story/ROC.20070815.2007-08-15T204012Z_01_N15430052_RTRIDST_0_BUSINESS-MINING-STOCKS-CANADA-COL/GIStory

KRY:
On occasion I read posts on the Yahoo board and a comment made sense. The poster stated that due to opposition from environmentalist in Venezuela, the department in charge of the permit process handed the ball off to Chavez and company so they would not have to take the hit.

I'm wondering a bit about the infusion of liquidity by Central Banks. Given that the subprime slime is essentially a US phenomenon, its curious that European CBs injected much more liquidity than the Fed. Any ideas as to why this should be? Difference in regulations? Or could it be that they are terrified, having caught a glimpse of deflation - when that collateral is suddenly worth only 90c on the $, and its been pyramided a few times, perhaps we have a naked emperor.
We also have the USD rising against European currencies while falling against the Yen. So the Europeans are buying dollars, and everyone's buying Yen and I'm thinking that the unwinding of the carry trade is going to be exponential.
Gold is holding steady, but miners are getting hit horribly. I'm suffering, and was planning to hold them. Someone (here, I think) recently provided a link showing the price behaviour of Homestake around the time of the depression, and it also fell with the general market initially, so maybe the best approach is to keep a core and trade a chunk using Bill's AZ/DZ approach.
Must confess I've put a chunk of IRA cash into Fido's treasury MMF - sleeping at night is important to me. Sorry, rambling a bit, but I'm feeling insecure.

Bill,

You mentioned that today (Aug 15) is the last day for hedge fund investors to file for redemptions and that once this has passed, hedge fund selling will subside and help move the market higher.

However, isn't is true that the redemptions actually take effect at the end of the quarter. So the hedge funds have until the end of September to sell. It is not necessary for them to sell now.

Considering market conditions, it is likely that a significant number of investors are keen to get money out of hedge funds. Wouldn't this mean that we will see more hedge fund selling between now and September end?

I have a serious problem with my broker. It's an online nordic company called Nordnet.
Ever since WGDFF peaked I've tried to sell my shares, but the order won't go through. I've written them 20 times, and I've tried to reach their brokers by phone, but since I'm currently in Chile I couldn't get through on the phone. Still all in WGDFF I'm not to happy about it. In my last mail I told them I would like to put a trailing stop-loss order following 5% below the price. At the time the price was still at 2,60-something. I also told them I will take legal actions against them in order to cover my losses.

The problem is a technical one at this stage. The trading platform won't work. Previously however, the problem was with their canadian partner. I don't know exactly what the problem was, but they blamed it on the canadians. Recently however, my account shows a balance of zero, and if I try to sell it just says 'invalid instruction'.

Do I have a legal case against these guys?

cyderman: "Fido's treasury MMF"? Which fund is that? Do You mean Fidelity Cash Reserves, which is definitly not a "Treasury Only" MMF? Just curious if I'm missing something on the Fidelity landscape...

"It really was easier being retired for the past six years. :-)"

Bill, for some reason I have a feeling that you thrive on having such a full plate.
Congrats on the increasing number of posts!

is the sell-off in gold this time any different from the sell-offs in the summer and fall of 2006 or winter of 2007? all occurred unexpectedly, all were steep drops...the magnitude of the drop at this point appears to be "ballpark," and as someone pointed out earlier, on "very average volume."

is there a problem with buying at this point...i don't think so...if there is, then what does that say for any positions opened (eg, GFI or KGC) earlier in the year...would those bad trades?

some of the differences noted/associated with the current drop (GLD:XAU/$GOLD:$GDM and the possibility of forced sales) are of course positive...

it's just another drop......until it's not ;)

The Canadian stock market perspective - Mid Week commentary and vent.

Yahoo Greeting: [Dow, Nasdaq Hit Four-Month Lows]
MarketWatch: [Canadian stocks hit five-month low on credit anxiety]
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On Saturday I put out my plan for this week:

[For next week I am bearish on Financials, Oil, Small Caps, Base Minerals, Technology and mildly bullish/neutral on gold (read what -kaimu- has to say on gold today - I agree with his views). For now I am waiting for evidence of a bottom that I did not see last week. I'd rather be in late than early and I don't mind being wrong as long as I make money doing it.] [012]

I am going to put myself in the camp of further down moves in the market next week (2% to 3%) and maybe for the [remainder of August. We may have calmed ourselves here, but I fear that HB&B will make the most of it next week by using fear to build a base for the next move up.] [011]

[Negative Hedge on TSX index working out well today. Keep seat belts on. [ST-mildly bearish, MT (medium term) mildly bullish]].

[Briefly, stocks from the Bill Cara Blog to watch: ARU, PNP, WGI, SLW, MLY, HF and Uranium stocks (fire sale/liquidation?).
Other stocks I like for buy signals: CCO - Cameco Corporation [down from $60CDN to $40CDN], ECU, UXG.
Stocks I like, but no buy signal: PWT.UN.
Gold is a buy.] implied physical gold
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Yahoo Finance Poll:

In light of the stock market's recent sell-off, what is your current strategy?
Buying 34%
Holding tight 56%
Selling 12% .....[008]-Thursday August 09, 2007

---------------lets see what happened from the close on Thursday last:
I did not buy any of these stocks except for KRY. my reason: [Emotionally I want to buy or sell something! Hold for now. HB&B will have a long day for strategy meetings. Stocks I like are going on sale today. Will consider tomorrow if it is safe/time to trade. [008] ...Still waiting to buy. I should have consider the poll at Yahoo. 34% want to buy? And buy they did from last Thursday. And 56% want to hold. That is 90% willing to bet things are okay. I should have known to sell. Oh well, live and learn.

ARU - down 10.85%
PNP - down 44.30%
WGI - down 12.04%
SLW - down 08.99%
MLY - down 10.58%
HF. - down 14.49%
ECU - down 11.56% - based of comments from another poster, I did not add to my position. Thanks.
UXG - down 07.64%
PWT.UN down 0.95% - technical analysis price target of $29.85 - August 07, 2007 end of day data.
CCO - down 00.44%

What a relief to not have bought any of these above stocks.
--
Hedge on Canadian index up 5.9% - this is helping to reduce my loss on my gold stock holdings.
--
KRY - down 16.81% - down 15.36% from my buy at $3.46 on August 10, 2007 - did not follow my technical analysis on this one:

[I have been waiting for a second confirming buy signal and previously over the last week TA projected buying prices of $3.19, $3.12 and lastly $3.01 based on price and volume. The gold sector has been hit this week but this stock has resisted to follow sentiment. Not unusual as it has already fallen because of other reasons. TA hopefully filters this out. The stock has traded around $3.40 this week. ... A prudent investor would wait for a few more days of trading data and also see what happens in the gold market before making a trade. For me sentiment has changed in the stock price. Also a new TA I am learning, RSI, looks favourable for a trade. I will draw a line in the sand on this stock. First at $3.20 and then at $3.01. I will be concerned if it moves down to these levels. Without emotion I should sell. Period. End of story.] [009]

Well, I was wrong and paying the price. I am giving this stock more time. The previous profits I made on this stock will give it a temporary pardon.
--
commentary - August 8, 2007 re: [VAL(TSX) - ValGold - $0.40CDN

I really don't follow stocks under a dollar. A quick TA review gives me a negative ST view on this stock. I could be interested in a 'Casino' position if it gets down to $0.25-$0.30. Not a stock pattern that I like. Broke my support line at $0.48. My projected TA price is $0.32.] [006]

Closed today at $0.35 Down 9.09%. Coming into my buy zone. Like the comments from Bill today in his follow-up to this stock.

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GOLD $

Gold stocks are disconnected from the market and the price of gold. Why? I offer my opinion:

1) HB&B looked for a target on the weekend and it was gold stocks. Rich in reward to move down and then move up. They can use 'DIErivatives' and tools we mere investors do not have recourse to. What did they see in our accounts or for the mutual funds (they act as broker) to give them a lead to ravage this sector?
2) This is a small sector and any outsize trading will create a big swing here.
3) Small and some not so small investors believed that returns here were unlimited on the long side. And so strong was their belief they used leverage. A down move of 5% with leverage leads to a 10% loss. And the speculative stocks that went down 50%, well you were wiped out 100%. Now here is a plan: Borrow on your equity in your house. Put this into a margin account and then margin this from 50% to 70% again. Great if the market goes up.

I follow the daily valuation of the Sprott funds in Canada. I don't own any of their funds, but it is a good indicator. I don't know the evaluation date (I think Monday August 13), but on their web site today I see:

Sprott Canadian Equity Fund: (Down) -9.66% this month, 2.13% year-to-date
Sprott Gold & Precious Minerals Fund (Down) -9.92% this month, -13.28% year-to-date
Sprott Energy Fund (Down) -8.77% this month, 0.24% year-to-date
Sprott Growth Fund (Down) -7.42% this month 8.18% year-to-date

Talk about a melt-down. Today will bring a horrendous move down I expect in these percentages. You can see if you used leverage your losses would be greater. These funds may be down but I am sure they won't be for long. Even this firm was not prepared for the melt-down of gold stocks.

On August 4, 2007 I commented: [I will stay long the gold miners and gold (sell button ready).] [014]
I was worried by the technicals on the gold stocks. Traded on hope. I think all of us in this blog did not expect this disconnect in the prices of these stocks. I shudder.

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We Need a Filter!

Bill, if you want the posts to get up to 1000 a day, we need a filter. I just don't have the time to go through all the posts at 175 plus.

Is there some way I can hide the comments of some non-communicators on this Blog!. I believe everyone has the right to post comments on your Blog, but I should have the ability to read only what I want. And is there a way for me to filter so only the non-communicators are showing in the postings. I would like to create a Technical indicator for those non-communicators because I think they would provide a contra indicator. Looking back I see too many comments on gold and housing stocks. This might have been a good warning that a melt-down in the Gold stocks this week. Just a thought. Not sure how to quantify these posts as an indicator. Maybe the ratio between the posts I want and the posts I don't want might be a signal for confirming sentiment to other TA signals I watch.

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ECB, Fed Inject Cash to Ease Fears:

The Feds are pushing on a string. Just because it worked before doesn't mean it will work again. And remember this is not September 2001/911. That was a different economic period and the pumping was only made as a gesture. It wan't needed for an ecomonic reason, it was psychological - we were in a panic then.

We will be the last to know what the Fed and HB&B really knows about the risks in this market. The last thing they want is a panic. I am sure those who got margin calls this week or see some of their stocks down 10% to 70% are not in panic mode -- yet. Maybe they will put their 'heads in the sand' or just not open their statements for the month of August 2007.

Don't be hood-winked now. This is not a one-day/one-week wonder. Maybe in Disneyland they can wave the wand and make it all better. And this is not the time to panic. The man/woman on the street has very little interest in what has happened in the market since July 19, 2007 when the Canadian market made its high for the year.

Let us look at what we are facing:

-the cost of borrowing short-term has just gone up.
-consumer nearing exhaustion in purchasing - what will back to school bring for Wal-Mart and others.
-getting a mortgage now is not a sure-thing.
-housing market outlook remains grim.
-reduce interest rates and bring on inflation.
-raise interest rates and bring on the recession.
-leave interest rates alone and create uncertainty.
-spin doctors are now bringing hurricanes as a problem for the market to worry about {oil}.
-they are a lot of funds we have no clue what the net worth is (our what they have invested in).
-who knows the quality of the goods we are importing from China. Take a look at the news the last 2 months.
-[I went to the grocery store today and bought a can of Fruit cocktail. The store brand had one with mixed fruit and one with the same but with extra cherries. I picked the later and noticed it was Product of China. The other can said Product of Australia. Putting the can I selected back on the shelf, I went home with the one from Australia. There is a movement in the states just starting that aims to boycott products from China. It is our choice and a right. Who knows, this might have an effect on the stock market out a few months from here if it gathers general support (toothpaste, batteries, tires, pet food, child toys - what is next?).

Maybe now Bush will let the Chinese buy up the USA. This would inject long-term money into the system. Hmmm, did they just invest in a private equity firm?

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CASH

Bill says to be in cash. Being at 50% to 60% cash now, I am looking at the bargains out there in anticipation of buying. I think this Friday will be volatile as some players will not want to hold positions over the weekend. Stick to the established companies out there (Warren Buffet does). You can't go wrong with the Cara 100 or like Peter Lynch used to preach (and still does), stick to the companies you patronize for your investing opportunites.

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Bill, if I am getting long-winded here, I would be willing to put up a summary here and link it to a seperate blog with more of my venting added. Just tell me which blog to sign up with.

Been a long day, too tired to proof-read. Bill how do you do this. I am exhausted. [013]

now that cramer's rant has been viewed by the entire financial community and probably translated into several languages for fun, how can bill poole possibly come out in favor of a rate cut...maybe a better question is how long would he have to wait before changing his mind...

northforker
Its called FIDELITY US TREASURY MONEY MARKET and symbol is FDLXX : Strategy
Normally invests at least 80% of assets in U.S. Treasury securities and potentially enters into reverse repurchase agreements. Normally invests in securities whose interest is exempt from state and local income taxes. Invests in compliance with industry-standard requirements for money market funds for the quality, maturity, and diversification of investments.
Moved out of Cash Reserves - yield is lower, but sleep is better, I've got a ton of other stuff disturbing my dreams.

Bloodbath in Asia. Quite a few markets down almost 5%, South Korea - Seoul down 7.5%!! Nikkei down to 16,000. If these losses hold, I fear we will slice through critical support levels in the US and Europe tomorrow.

bill-as jragusa points out, the Nikkei is now closing in on 16,000...

based on your call to set "mental stops no worse than -8 pct from the cycle high, which, in the case of the Nikkei 225 index just happens to be near the 16600 technical support level. If violated, I would be out," are you ready to make the call to "be out"...also wondering if your call is country-specific, refers only to short/medium term traders, "excludes" certain sectors, and if you care to place odds on getting a rally to sell into...

still can't shake the "buy" bug-hasn't every "crisis" generated the chance to pick up what everyone else can't wait to get rid of? still have vivid memories of the SARS crisis in 2003, when i "knew" it was time to buy the Hang Seng, didn't do it, and let one of the best buying opportunities in my lifetime get away...

..above post, btw, refers not to the gold sector, but to (large-cap) mortgage lenders and homebuilders...

..wouldn't be surprised if the smart money in the bay area is looking to back a start-up taking on mortgages for well-heeled buyers who can't catch otherwise catch a break right now...

Wow, Asian markets are getting demolished. I shudder at what will happen in the US come morning.

Well, it's the last time I deviate from my system, plus I learned valuable lessons in cutting losses early and starting with smaller position sizes.

Dow futures down near 100. Ignored my own advice on XAU, even if ratio was favorable. g034, what is that trendline break system thingy again? :)

Amgen announced late Wednesday to eliminate up to 14% of its workforce in an effort to reduce costs.

Overseas markets took a hit on the chin thursday, the FTSE 100 dipped below 16000.

Gold lost 5.00 down to 674.40 oz.

Housing starts are on the econimic front for Thursday along with the weekly jobless claims.

Fannie Mae reports Thursday, those #'s will be a joke.

Good luck to any long investors left, last one out turn off the lights!

My model has been on maximal readings for distribution for 9 straight trading sessions. It is THIS CLOSE to confirming a Bear Market. The A/D line has not gotten to the extreme it needs to be in order for me to make that call.

I have not gone fully defensive (cash). My system keeps a portion long all the time but diversifies and hedges away a lot of the exposure. I am now down 1% since the top.

For some of my views on diversification see Leisa's blog. I have written about it a couple of times there.

Bernard: "We Need a Filter! I believe everyone has the right to post comments on your Blog, but I should have the ability to read only what I want."

The scroll button on the mouse works really well for this.

It is wonderful to see all of this participation. I remember at the first of the year I expressed the hope that people would feel more comfortable posting for it was only a handful of us "regulars". Though I have to admit that I feel an element of surprise when I see comments such as this calling others non-communicators as well as expressing that it is too much of a chore to go through the comments.

Just pretend that you are panning for gold. You'll go through some pebbles, but you'll find a gem or two that will make it worth your time.