Bill,

There are still youth with goals, myself being one of them! I know my parents taught me that there are more important things than getting rich. After all, the money I would get is slowly devaluing itself every day anyway, isn't it?

Futures higher this morning, and the S&P daily chart has a nice bounce off the 200 day... I think the old bull is still alive and starting to kick back!

Typepad sucks! (My constructive criticism)

Anyone have a look at LEND today? A buying opportunity? :)

I am so happy to be out of this market right now.

http://finance.yahoo.com/q?d=t&s=LEND

NEW YORK (Reuters) - Accredited Home Lenders Holding Co. (NasdaqGS:LEND - News), a subprime mortgage lender in the process of being sold, on Thursday raised concern about its ability to stay in business as the U.S. housing market slumps.

Thinking of buying some CEF-A though... or maybe some silver bars.

AHM looks like a bucking bronco right now.

SOHU-is it going to fill the gap at 31.50...

Bill,

Your theme regarding America's inattention to 'the glass half-empty' succinctly encapsulates these troubling times. I think the "meme wars"--ideological struggles of epic proportions--are just cranking up again.

Here is a link to a brilliant documentary film, "Zeitgeist", that should be viewed by any and all concerned about liberty, economic well-being, and the turmoil of this era. Warning; the film is controversial, empirically suspect and seemingly bleak until the final denouement. It's also long, approximately 2 hours. But push on through--it is worth it! --if only to grasp the full dimensions of the cultural strife unfolding.

http://tinyurl.com/2zfgcb

Lots of sweet selling opptys for the active trader this am

Markm, sorry about the confusion. I thought YOU were the playboy, talking about these "girls". Shows you the un-kid-centric bias that my child free lifestyle fosters.

Another day, another lender. I'm curious too know if anyone thinks this rally has legs.

Until they prove capable of the job, I think the owners and managers of American capital are going to keep moving that capital into other countries, to the detriment of America. Europeans did the same until over the past 50 years they managed to pull together to stabilize the region. So, the job, as big as it is, can be done.

I kinda felt the US was at one time moving in the right Direction.

Just curious Bill, did you think America was moving in the right direction in the 90s? I feel like this banana republic syndrome came on the turn of the century? top down.

Here is something to think about: over the last 5 trading days there has been 3 buyers for every 11 sellers in this market. What does that mean? It means that while the small guy has been liquidating their portfolio's the big guys have been scooping up their shares; thus the lack of movement to the downside over that period.

A few of you scoffed at my comments that this bull markert is far from over. Now I will say this: the downside will not be much further then that which has already been seen.

Is this a buying opportunity in the market? ABSOLUTELY. People are in check, so as the market rises they will not buy much; which is exactly the perfect storm for the big funds to move the market higher without Joe public scooping up all their profits.

P.S. It now appears obvious: the sub-prime mess will now be contained, with those stocks with sub-prime exposure being the only ones to be effected. Is the problem much bigger then feared? Absolutely, but you need a reason to shakeout Joe-public. This is not the last time the market will fall because of the housing market, or the real fear of a U.S. recession (although it will be short lived) which I believe will be the next catalist to drive the markets down during the next shakeout.

THIS IS A GLOBAL BULL MARKET and U.S. coporations are global companies; and the Global picture is the one to watch during these pullbacks.

At the risk of rolling a few eyes, I'll share what VectorVest is saying currently. Their colormetric is deeply in the red for both the Canadian and U.S. markets, which means they are advising prudent investors to not do any buying and they are advising aggressive investors to play the market to the downside.

Personally, (while not yet convinced of VectorVest's predictive abilities), I would feel a lot more bullish if the markets had corrected another 4 or 5%. I'm not feeling good about the strength of any rally efforts from this level, but that said, I'm still holding lots of gold miners in hopes of that final run-up.

And, call me crazy, but I've been in our old buddy KRY for some time now and added some more in the last few days.

Manx

I mentioned before that Vector Vest changes their predictions based on the market movement: Thus is it a bad indicator to predict market turn-arounds.

If you followed Vector Vests predictions during market volitility, you will get your ass handed to you on a plater. This is exactly why I say Vector Vest is not for everyone, and mentioned how I think it should be utilized to get the most out of it.

LEND-taking a shot at 4.90

I think the last two posts capsulize the current crisis.

While Peter may be correct, to be prudent we need confirmation. That means we aren't beating the big early money, but we aren't beat to death if the elephants make another move for that little door.

I am certainly watching the XAU for signs Bill's crystal ball works as well in temps above 80F.

Thank You for posting Peter. Remember, none of us is married to our views. We have nothing to defend but our portfolios. I feel no need to defend a possibly faulty diagnosis (mine). I do feel the need to keep it healthy.

KRY(TSX) - some comments for those wondering about this stock.

This is my first post. I have been following the commentary by Bill with much interest since May of 2006. This is a great educational blog about the stock market. I don't think I will ever stop learning here. Bill has introduced me to a lot of trading ideas and I thank him for constantly reminding us of how to trade. Thanks Bill for all the effort and time you put into this Blog.

I went to the annual meeting of KRY in Toronto. My brief assessment: great story but management was not forthcoming about the story. I use technical analysis for decision-making. After Bill mentioned the stock I looked at it and waited a while until TA gave me a buy signal. The timing was good so I bought for my Margin account Nov02/06 and sold Dec01/06 for a good run up when TA became neutral (therefore I sold). Following the comments here and using TA I bought back in Mar09/07 for both my Margin and Retirement accounts. Well TA became neutral at the beginning of April so I sold all of my Retirement holdings and a third of the Margin holdings on April 13. This is when I started letting emotions get involved with my trading. I got another buy signal around $4.20 CDN but I decided I would stay out because the story was getting muddled. So hold and wait was the plan. So the stock goes up, I get back into the emotions of holding and wait. Well the stock then goes down to the $4.00 CDN level but I don't have a buy signal and emotion is getting ahead of me and I want to buy. TA is really telling me to sell, but I don't.

I should have sold and locked in a nice profit and put some cash aside as Bill tells us to stay close to the sell button. I will keep an eye on this stock and if I get a good TA buy signal and I buy into the story again I will post the same to this blog.

The highlight of the KRY annual meeting was getting a chance to meet Bill, whom I found to be a gentleman with a remarkable memory and a life of adventure. (Thank you Bill for your assessment of the management team at the AGM). I may be a small investor, but I am glad to have Bill as a mentor along the way. We all need someone to assist us in our investing, as we cannot go it alone. Oh, thanks Bill on WGI (TSX). My proceeds from the KRY sale went into this stock - which I should have also sold short-term (for the purposes of raising cash). Thanks to MarkM for reminding me that the Technicals on the market are bad. Yes, I have seen that for the past +- two weeks. Not the best environment to be investing in. Another reason to sell even if you are in great stocks. But I have bought a double ETF index fund to hedge a down move in the CDN market to offset the stocks I hold.

Thanks to the many posters here for your commentary on the markets. This is quite the community and we are connected in this blog.

Bought 2100 partial fill on my 3000 share order on BMD @ 3.01.

OIH-back in at reduced size...

Peter-what time frame do you trade and/or invest? I wrote yesterday before the opening that the market was in a position for a snap back rally and I believe now we will enter a trading range with diminshing volatility over the next month or so. However, after this period of lower vol and a slight upside bias ends, I think the market will be due for a much larger correction. Since my trade timeframe is minute to minute many entries can be made from either the long or short side. Many readers are much more long term oriented and I'm sure the would appreciate you explaining how you will enter your long positions, your objectives, and your exit strategy and stop out points. Thanks for your posts, they make for interesting reading.

2nd.....I'm gonna try this trade too...lend

ok...just be careful...you're counting on the shorts to take it up...

2nd,
The LEND play looks more risky compared to others. Remember AHM dropped 90% in one day, LEND is only down 40% now.

stktrader-BMD-congrats on letting the price come to you...

I will try it when it stops going down.

By the way 2nd, you deserve supreme kudos for your prescience re: AHM and others.

SOHU-out at a loss...

Ditto Stktrader. Nice buy.

2nd, check out FSLR. I shorted this thing at the open at 106+! I think there is about $20 more downside.

LEND-adding at 4.36...

Wow. Sorry 2nd. Where do yu guys think this thing'll fall to? The news did sound pretty bad on this one. Had it happened yesterday, i'd have been a better play

This thing's going down with a vengance

jogyp-thanks for the warning...learned a few lessons about position size...adding at 4.25

I am checking in quickly.

Peter-

I don't mind your comments but let's at least use FACTS.

"Here is something to think about: over the last 5 trading days there has been 3 buyers for every 11 sellers in this market. What does that mean? It means that while the small guy has been liquidating their portfolio's the big guys have been scooping up their shares; thus the lack of movement to the downside over that period."

Fact: The Dow is down 420 over the last 5 trading days, not including today. Beginning with 7/26 now: Minus 311. Minus 208. Plus 93. Minus 146. Plus 150. Add it up. And if you used a measure of anything but the big caps it would be much worse.

"P.S. It now appears obvious: the sub-prime mess will now be contained, with those stocks with sub-prime exposure being the only ones to be effected."

I am not going to even bother to append subsector numbers and charts here because it's a waste of my time. What is clear from even a cursory glance is that the carnage in the market is much broader than brokers, insurers, banks, mortgage companies etc.

the other thing to remember is psychology...how are the shorts viewing the same trade from the other side...and there is a large short position...

Peter,

Yes, I paid attention to your earlier comments on VectorVest and tend to agree that because it is momentum-oriented, it doesn't react well to short-term swings. I offered up their current colormetric as food for thought only. Whether it is taken as gospel, a bellweather, contrarian, or even complete nonesense, is the choice of each reader. I'll continue to review VV's other tools over the next couple of weeks and see if I can make as good use of them as you're able.

and remember, streaks all come to an end, right? (LOL)

Craig,
I thought about the FSLR call by Bolling but as I said on the previous day posting here, I have a mind block at this point on high priced shares. Would you mind reading that post near the end and respond here if it is not too inquiring?

Peter:

Thanks for coming back. Your post’s eclipse the ‘chat.’

let's see, my basis is now 4.66, and it's at 4.08...guess i'll stop here and wait it out...glad you waited, chris

FSLR: covered my short with 9% plus.
Seems to be squeezing right now, will wait for another entry.

in the meantime, AHM is at 2.17...

Hey Optionoracle:

I trade mostly pennies and Blue-chip options. I try and time my buy and sells to catch the beginning of a move and play it for 1-6 months.

Sometimes I will buy stocks for a short term bounce but I am prepared to hold them.

I have considered ETF's, but haven't done it yet. If I were to play ETF's it would be during market corrections and mostly for shorting: Then it would be to daytrade.

I think the next few weeks will be very good for daytraders, as I am expecting volitility with a high probability of another pullback once we have made about a 400 point gain from the most recent lows. After that pullback (which may or maynot happen) I think the market moves to new highs.

My thinking is that the markt will takeout old highs (14000) move to about 14500 and have another 400-500 point pullback before continuing up.

Next year I think the U.S. goes into a slight recession, which lasts until the end of the year, but that doesn't have enough of an impact to take the Dow down; as the global economy will pull the U.S. stocks higher.

I try and look at the big picture and play the moves also. I had shorts in place that took my portfolio higher, as the market pulled back.

I know that is more info then you asked for: but I figure if you can have a look into my head it will make you understand my trading stratagies.

looks like the Dow Jones headline at 1027 did it: "Accredited Home Lender Warns Future Is In Doubt > There is no story accompanying this headline." Can't say there was anything "new" here, but if you're holding, would probably prompt a few people to hit the sell button. Just can't resist taking the other side of the trade...like buying when gloom fogs up the screen, and selling when the headlines are good...

Stktrader,
Sure, but I'm dealing with an ultraslow connection today (delaying my trading platform up to 2 mins, yikes) so it might take me a bit.

Thank you for checking in Mark. Our biggest hugs to the girls. Have FUN!!! My daughter is 27 now, no digging in sand piles anymore, now we're tring to get her her own sandpile. Enjoy!

Market underneath looks stable from my VERY SHALLOW, VERY QUICK look. Bulls could have opportunity to add. There was good risk adoption trading early this morning.

Gotta go.

Thanks Craig.

I've been corrected. While the DJIA fell hard 5 days ago I was looking at the end of that close while evaluating the last 5 days (so its not really 5 days).

As well: while the DJIA fell 208 points 4 days ago, the actual drop in the price of the VV composite (which includes over 8000 U.S. stocks) fell from $29.76 to $29.38 and currntly resides at $29.40.

So what I was trying to say was: Since the close of 5 says ago $29.76 to today, the last 4 days has seen a stablizing in the price of stocks dispite the great selling pressure on the same stocks.

BIG MONEY IS BUYING AND HOLDING THIS MARKET UP while smaller money (Joe-Piblic) is selling.

While it may not change the validity in the message, I will admit you are right Mark; I could have presented my arguement better for your sake.

chris-let me put it this way...no one wanted to buy AHM @ 1.28, even fewer @ 1.04...the next day it's @ 2.25...

there's nothing wrong with being a momentum player, you'd have been chasing AHM this morning @ 1.75, and still be making money...

instead, i prefer looking at the next basket case, which is LEND..no one wants to buy it today...so i'll pick it up and wait it out...

What concerns me the most, and why I an bearish medium-term, is consumer spending. The consumer is responsible for 70% of the US economy. As Bill pointed out yesterday, retailer stocks are getting beaten badly. Auto sales have fallen off a cliff. With falling house prices, now falling stock prices, and a huge amount of option ARM resets to come, the consumer may be retrenching. Funds may be able to push the market higher short term but if profits disappear their will be nothing they can do to keep the market up.

i have to say the price movement in AHM bodes well for a recovery in LEND...both are down for the same reason, right?

Bill,

This is my first time posting, although I have been a daily reader since being turned on to your site about 6 months ago. I felt compelled to finally say "thank you" for all of the insight that you provide - as it pertains to capital markets and also the "bigger" picture of the common good. Your commentary, as well as that of your readers, has completely changed my view of how markets really operate.

Your comments today could not have been more pertinent to the current state of America - a society in decline, because of its hijacking my those in power, and the subsequent disenchantment and disengagement in the system by its citizens. Bottomfeeders that many would classify as political geniuses have convinced the mindless following mainstream that dissent, even for the sake of bettering your country - is unAmerican, thereby stifling intellectual debate. How ironic, isn't it, that America found its original legs by dissenting? Until complacence is in its last throes, business as usual will proceed, and I am not holding my breath, unfortunately.

Best to you Bill and every trader currently in the midst of this volatile market.

Bill,

This is my first time posting, although I have been a daily reader since being turned on to your site about 6 months ago. I felt compelled to finally say "thank you" for all of the insight that you provide - as it pertains to capital markets and also the "bigger" picture of the common good. Your commentary, as well as that of your readers, has completely changed my view of how markets really operate.

Your comments today could not have been more pertinent to the current state of America - a society in decline, because of its hijacking by those in power, and the subsequent disenchantment and disengagement in the system by its citizens. Bottomfeeders that many would classify as political geniuses have convinced the mindless following mainstream that dissent, even for the sake of bettering your country - is unAmerican, thereby stifling intellectual debate. How ironic, isn't it, that America found its original legs by dissenting? Until complacence is in its last throes, business as usual will proceed, and I am not holding my breath, unfortunately.

Best to you Bill and every trader currently in the midst of this volatile market.

i have to say the price movement in AHM bodes well for a recovery in LEND...both are down for the same reason, right?

i have to say the price movement in AHM bodes well for a recovery in LEND...both are down for the same reason, right?

so AHM is at 3.90? what the hell just happened...i saw 14.77 flash across the quote screen for LEND and thought i was in the twilight zone....in a good way of course!

Up nicely on my whopping 100 shares of AHM bought yesterday at 1.17 (the advantage of the $1 IB commission). Tried to buy a couple hundred more during the breakdown yesterday but orders were backlogged and I finally gave up. Just letting it ride for now!

SWC making a move. Chart looks good for an afternoon breakout perhaps. I still think this one was way overdone.

JBX I think has bottomed. Earnings next week. I think the Qdoba portion of the company is worth at least $1B alone based on a comparison to current value of CMG.

MPEL -sticking with it, great results from LVS yesterday. Stock has stabilised here and looking for some upward pressure.

so AHM is at 3.90?

Up nicely on my whopping 100 shares of AHM bought yesterday at 1.17 (the advantage of the $1 IB commission). Tried to buy a couple hundred more during the breakdown yesterday but orders were backlogged and I finally gave up. Just letting it ride for now!

SWC making a move. Chart looks good for an afternoon breakout perhaps. I still think this one was way overdone.

JBX I think has bottomed. Earnings next week. I think the Qdoba portion of the company is worth at least $1B alone based on a comparison to current value of CMG.

MPEL -sticking with it, great results from LVS yesterday. Stock has stabilised here and looking for some upward pressure.

Stktrader:
Yes, I heard Eric's sell based on poor earnings (and he's an oil guy that has always doubted these stocks) and I extrapolated that to selling short.

Since I am as cautious as the next person I don't wager a lot on something like this, and I sit on it like a worried hen until it gives me a bit of a buffer to set a stop loss or it turns against me and I cover it for as small a loss as possible.

I shorted 100 shares or a little over $10,600.
If I had covered right at the top (bottom?) I would be up over $1000, but being greedy I was waiting for more and it reversed, so I covered with a little over $900. Not too bad for two hours of nervous sitting.

Look at it squeeze now! Good thing I covered!

2nd_ave: I am with you 100%: Lending corporations should be shorted, and will have a major roll in one of the next couple pullbacks in this market. But it may be the home builders that take serious losses in the next big pullback. One may look to buy commecial real-estate on that pullback, as U.S. corporations should do fine; as world growth puts a demand on their products and as the dollar keeps falling.

With people borrowing against the equity in their homes; the credit crunch is close at hand and will lead the U.S. economy into the recession of 2008.

might as well be in vegas, man...

LEND:
"The decline put the shares well below the $15.10 level that private equity firm Lone Star agreed two months ago to pay for San Diego-based Accredited. That transaction valued Accredited at $400 million."

All this could have been a play to buy LEND much cheaper than the original purchase price.

2nd...that AHM rally was AWESOME. were you in or out? I was wondering at 2.25 if it was a buy...sat there wondering.
I have to get more into the moment

UNG-watching for the 4-5% reload zone...

LEND:
"The decline put the shares well below the $15.10 level that private equity firm Lone Star agreed two months ago to pay for San Diego-based Accredited. That transaction valued Accredited at $400 million."

All this could be a play to buy LEND much cheaper than the original purchase price.

UNG-watching for the 4-5% reload zone...

LEND-unloaded into the pseudo-buying frenzy...and getting ready to reload..

KRY on the move. I guess the bleeding had to stop some time...

chris-i unloaded the last of my AHM this morning pre-market at 1.75...i was thinking the same thing you were at 2.25...

on the other hand, i hit the sell button as soon as i saw that 14.77 quote flash for LEND, and ended up getting taken out...about 9.70 lower (LOL)...looking to get back in if it drops again...

never underestimate the power of a short squeeze...

ALOHA !!

Bill ... Excellent and exact view of America and Americans. We are witnessing an Empire in decline and its money. What other "paper IOU" will take the place of the US Dollar reserve currency? Right now the Euro has the largest weighting in the USDX. As you stated their M3 is hardly any better than the USA. Globally all fiat currencies are expanding in supply. Thats what fiat does in the hands of humans! Governments realize they need to placate the masses or they are out of business. To do that they have to expand money supply along with population so that is why a M3 chart looks just like a World Population chart. The Chinese are doing that the most efficiently on a true wealth basis in terms of infrastructure, yet inflation is their nemesis as well. The USA is running on fumes when it comes to real wealth. The richest man in the World is now a Mexican. But is anybody really getting any richer? People will "trade up" thinking they are beating the "system" but that will only last temporarily. The odds of beating inflation are slim for the majority of people trying to make ends meet. That's the scam of corrupt fiat monetary systems.

ON REAL WEALTH
You are right on Bill ... The USA is in decline in terms of production "aka:real wealth" and even just plain old "production" period! Industrial production ... real GDP growth machine for real wealth is becoming stagnate. Look at this chart and you will see it clearly.

Link US production 1920 to 2007: http://www.nowandfutures.com/download/IndustrionProduction1920-2007(cr).jpg

Production has not been running much above 10% since the 1970s and hasn't been much above 5% since the 1990s ... fading fast! Yet another depleated tax base the US government can no longer depend upon for tax revenues. Like Haliburton says, "Dubai ... here we come!" Like Nike and every other US corporation says, "Beijing ... here we come!" You elected them ... your tax dollars at work! Unions have to ask for higher wages because their members demand it and their members demand it because monetary inflation demands it. Like dominoes ... its all interconnected to "fiat money"! US corporations move overseas to press the "reset" button on non-union lower wages and a litigious free ... regulatory free environment.

The simple answer is to vote out BIG GOVERNMENT and its representatives ... everyone on Capitol Hill!

ON THE DOW
Someone asked if this rally has legs? That is all relative. If you compare the DOW performance and adjust for inflation or gold then you will find there is no rally in "real money" terms, but as I have pointed out before, the stock market is the "money spigot". The closer you are to the "money" the better your chances are to survive. Look at Zimbabwe and the Zimbabwe stock market, an extreme example of hyperinflation, but inflation is inflation "hyper" or not. My Grandfather would think 14% M3 inflation would be "hyper", but nowdays 14% is considered "livable" just like $78USD oil! Not until Joe SixPack wakes up and finds he can no longer afford his smokes or his Budweiser will there ever be massive changes. Re-electing the same two parties will never make a difference.

Link DOW/CPI: http://www.nowandfutures.com/download/inflation_adjusted_dow.png

Cash out your profits and you will see what I mean. Between the tax gauntlet and inflation whats left and for how long? Back to the casino and FAST! How is it the casino has lasted so long? VEGAS only keeps getting bigger ...

The DOW will tank this October ... Elliot Wave 2007 is a dead zone. I still hold seven figures in cash for such defining events. Play the short trade all you want ... its the American Way ... the Chinese and the BIG MONEY know the difference! If you are in debt then of course you need to reach for that big stock market payday so you can achieve "debt freedom". All I can say is "buyer beware" ... the sell side is in charge of the casino ... not you.

I continue to stick with gold and silver and the companies that explore and produce these metals because throughout human history these metals have been the most sought after and represent true and long lasting value. This is not a flash-in-the-pan trend because the "fiat experiment" where the US Dollar was supposed to replace the "gold standard" has failed. Problem is none of the "paper producers" or the "paper holders" want to admit it yet until they can finish trading their paper for "real assets". In comes Sovereign Wealth Funds(SWF) ... Best get your family some real wealth and its not made out of paper or day trades! A severe currency crisis would wipe out all "profits" in a flash! More to the point a "confidence" crisis...

Bill ... I would take what you say about the USA and apply it globally. So long as fiat monetary systems exist people will suffer while bankers and politicians will prosper. Jimmy Cliff ... ja' mon ... he knows! Bono and Oprah know squat ... still kissing the hands that feed them!

chas ... Good on ya! We gotta treat the youth right(a Jimmy Cliff song)if we as Americans ever hope to save ourselves and be a respectable country again without military solutions. I believe gangs are popular here in America because the youth feel increasingly dislocated and irrevalent, with no real future. More symptoms of Empire collapsing and fiat scarcity ... violence. Violence seems to be as acceptable as 14% M3 here in the USA. We are not on the "right" road in many ways!!! Many ... many ... ways!

THE GLASS HALF EMPTY FOCUS
If you are an American and for that matter, a Canadian, and you are fed up with the leaders now in power then perhaps you might want to participate in making a change. Here is a link to doing just that ... All major movements start small, but I truly feel as more Americans suffer first-hand this type of movement will grow.

Link: http://www.freedom21.com:80/member/forum/topic.asp?TOPIC_ID=131

Hey Bill:

Could it be that polititions are to blame for the moral state of society; atleast here in Canada? And the judicial system and the political system in the U.S. Why do I say that? They make the laws and the guildlines for how the laws should be enforced.

Kill someone and you could be out in a few years. Steal from people and there is no debtor's prisons to make you work to pay back what you stole. Break into someones property and they don't even fingure print to try and find out who did it so they don't stop: I mean why would the Police bother after all, the thief will just be put back on the street a couple days later; to do it all over again. And God help you if you turn in a theif or murderer to be prosicuted; the Police won't help you and you will probably be killed for it.

The ones even more to blame, in my eyes, are the religious leaders. When your physically sick, you go to a doctor. When your spiritually sick you go to your religious leaders: But what do you do if your religious leaders have no answers and are sick also?

Everyone is looking out for number 1 and it is the American way. The American dream is: :You to can become rich." But wait: In order for you to be rich someone must be poor for you to explote them in their poverty and for you to get them to work for you (hmmmm sounds like slavery).

If you buy into the American dream you destroy the family unit; as everyone is out for themselves: The ideology is contrary to the ideology of community, which states we all work together to help eachother.

While many will say that my views are communist; I say: yes your right. Communism is not bad: Dictatorships are. And what is a Dictatorship, but Capitilism without democrocy? While many will say the U.S. is a free country; I say: Then why do you pay taxes? It is not a free country; That is a lie. It is a Country of rules like any other dictatorship only the rules are more lacks then in some of the other dictatorships around the world.

It all comes down to this: Either you are living for yourself, and are selfish. Or you are living for others, selfless: which is what true communism, by the very meaning of the word, is.

Until we as people stop caring about materialism and start caring about eachother, the world will only get worse. That doesn't mean we don't need things; it just means that we need them to help others: and really beyond food, shelter and clothing, we really don't have needs. Thats not to say that we cant use other things to the benifit of others: but if we are honest, we are not using the things we now have for the benifit of others, but for ourselves.

ALOHA !!

Oops ... sorry for the double posting!

2nd,

I was unable to log onto the blog for awhile. I've never seen the perception of value change as quickly as that feeding frenzy in ahm. I know I shouldn't be thinking this, but iss this thing setting up to rally from here? Also, how do you feel about lend today?

UNG-moving into the minus 4% range....

AHM-back in at 2.15

lend? gs owns 1.7m shares of lend, 3.8m of ahm...and there must be heavy exposure from all the brokerages...i think they're in play until it's resolved which way they have to fall...

chris-are you still in KRY...i'm thinking a 4% move might do it for me (although still holding a sizable LT position)...

ALOHA !!

This tells you who supports HB&B and the power elite Reps and Dems ...

Dollars donated for Presidential candidates ...

Link: http://www.opensecrets.org:80/pres08/donordems.asp?filter=A&sortby=2

AHM-out at 2.57

Hello Bill and the Cara Community.
Thanks to all posters, even those who don’t like us fuzzy thinkers.
Any comments on these two items?
1. Insider sales of ADBE have dropped insider ownership to 0%.
2. My guy at the HB&B says he’s telling his clients to short the oil stocks inc. OIH.
TIA.
Peace from the north end of Whidbey Island
Gray

Dennis Gartman is on Bloomberg saying gold is down because it's liquid and it's been used in this downturn to cover margin calls.

As our friend Kaimu says, it won't last forever.

The COE of Barrick was on earlier, he says we're heading to over the *old* high with an 8 handle.

It is much bigger than the global economy...the earth itself is sick and dying:

Let us take a moment and consider the earth for what it is: basically the table of elements we learned in high school, things like Hydrogen, Oxygen, Aluminum, Gold, etc.
Now let us assume that for the earth to be healthy and 'balanced', these elements are all inside the earth. As humans we have taken all these elements, everything from (off the top of my head) Gold, silver, platinum, palladium, copper, aluminum, molybdenum, nickel, iron, titanium, uranium...(i read an article recently about the possible profitable opportunities in mining tantalum), etc. out of the earth, therefore throwing it out of balance.
Let us compare the earth to us as humans. We need minerals in our bodies to live, in a fairly delicate balance, ie. calcium, magnesium, phosphorous, zinc, selenium, etc. and if these are deficient, the result is that we get sick, in one form or another. We also need oils in order for our skin to remain healthy and for internal lubrication, without which we would get sick, in one form or another.
So on top of taking away the earths metals and minerals for 'profit', we have also robbed it of (if you subscribe to peak oil theory) over half of its oil, which is presumably needed for internal lubrication, etc.
Lastly, if we were to cover ourselves with a non-porous substance, ie. cement, we would not be able to breathe, rot, and die.
Not to mention the ozone layer, burning of fossil fuels, poisoned waters... so on and so forth.

So that's my theory, though not completely original, on our dying planet, mother earth. She is sick, off-balance, 'under the weather', the storms and earthquakes and everything else is evidence. As humans we are not much different from the earth. Rob us of our vital nutrients and we get sick too. Today at my work (a fitness club) someone mentioned that there are no recycling bins, and about 1,000 of those plastic 500 ml water bottles are thrown out a day. It's sad, but what difference does it make at this point, really.

Off topic, I know.

Great Market Chat today Bill, saying it like it is as always.

Paradise looks beautiful!

halfway through 'empire of debt', and continually astonished at the empirical characteristics and historical similarities of the United States and past world 'leaders'. Can't wait for your book.

CYG, ZPA and PNN are all in an interesting oil play together (all located on teh Toronto Venture Exchange). Drilling just started and should be about a month before results are in. Either they find a lot of oil or a lot of water.

PNN is the most interesting out of this play as it has a number of interesting properties outside this play.

I recently sold my ZPA and bought PNN: there are shares at 23,24 and 25 before it jumps to 35. In my opinion it is a very good speculitive play that has a real good chance at some real profits.

Unlike the otcbb; the venture exchange posts all current full orders of bids and asks, and is really no different then the TSE or the NYSE, except for the stocks being more speculitive in nature.

2nd,

I was not able to post for hours. I did make a nice quick profit buying AHM off its 2-lows after the humongo rally.

I have never witnessed the perception of value change as quickly as that rally, though I am new to this biz. That was a radical rally, and it also sounds like you timed it nice.

2nd, is it AHM looking good to you in here, and would you take any home tonight?

Re KRY, I sold into this morning's rally, such as it was. Alas, another mistake. I do make a million of em. This is no game for perfectionists.

chris-may decide to reload and hold a little overnight in the event, but i wouldn't want to make it more than pocket change...self-described end to my streak a little premature, but make no mistake about it, it WILL end...and still liking cash...

If anyone wants to see what a short squeeze looks like chack out FSLR now....

I didn't make the very most of it, but I got some down and up. Whacky.

Fun when you're the one making the $!

KRY-why was that a mistake...i sold my ST position, no regrets...

Oh it's not for my sake, Peter. It's for the sake of the board. If you want to insert your opinions into these pages, put them in BOLD, perhaps with an exclam! behind them, perfectly okey-dokey by me. I don't take that stuff seriously and generally gloss right over it. If others want to read it, fine. But if you want to debate the market, or trading, or investing or whatever really, then it's helpful to provide facts or sources, especially if you have no track record here. As a fine example of someone who regularly goes about it the right way (my opinion of course), challenges my thinking, and causes me to investigate and perhaps reconsider, look at what "Namkcots" posts.

That's the last I intend to say about this, or your posting here.

On the economy:

The Return of the Robber Barons

http://www.counterpunch.com/roberts08022007.html

The U.S. stock market is benefitting temporarily from the month-end bid (where institutional money managers automatically push up prices as they are forced to equitize cash). Expect the decline in stocks to pick up steam again over the next few days. Sometime around late August the decline will end and then a fast and furious re-test rally should ensue. We believe the rally will fail (it will not go above the mid-July highs recorded by the major stock averages). Stay tuned!

http://www.2globalmarkets.com/2GMPages/MktComm.htm

lets see where it falls to my friend

Craig: Very good example of a short squeeze and with the instablility of the market forcing people to cover their accounts it may be a vey good time to buy put options on FSLR.

Very good call.

More details on the story I reported early this morning about the "Fat Thumbed Trader" and yesterday's rally. Big Picture has the details:

http://bigpicture.typepad.com/comments/2007/08/mystery-solved-.html

Another REALLY NORMAL occurence on the indices and charts again. This is getting surreal.

MarkM,

My take of this whole fiasco is that liquidity is still sufficient for the trading leaders (best desks and/or computer armies) to squeeze their way up against me-too short players (small hedges & retails). More stocks remain to be distributed before the floor falls out.

I find it also interesting that these Viagra boosts occur right on time to mask (or attempt to) key outside reversals that occured in July. Fix the charts asap seems the motto here.

Tomorrow will tell much for the next few weeks. If strong continuation rally on the back of economic news without pre-weekend jitters (due to leverage bubble deflation), we could witness a very narrow rally (big/mega cap only) throughout Aug. to bring back Dow on the brink of 14K "gold"ness while S&P / Mid and Small caps struggle through a good deal of upside resistances.

JML

He guys, they're saying AHM may not open tomorrow....I wouldn't be holding these into the close.

They're closing

What's the value of these AHM shares? like, breakup value or whatever

jumble-

The chop today seemed indicative of traders getting out of positions under cover of the market but I thought that a good floor was in hence my AM note of bullish tint. Today's 2 minute rocket could be exactly what you suggest. I will not be screaming "Follow Through Day!" just yet.

I recently bought options on SMSI and ENDP (call options).

Both had good financials released today. While the SMSI is up 16%+ ENDP which revised guildance upward, is down today: should be a good buying opportunity on it.

I have read several notes warning about that 'monthly outside reversal' in July but the only place I've seen actual numbers about past precedent is Jason at sentimentrader-

"Since 1950, it has happened three times (October 1979, January 1990 and November 1991). The following month, the S&P was positive all three times by an average of +5.4%. Four months later, the sweet spot for these occurrences, also showed a positive return all three times for an average of +9.7%. All of them were positive by at least +7.5% over that time frame. The average amount that the S&P declined during those four months was only -1.8% compared to an average maximum gain of +13.5%. Wow.

Three instances isn't much of a sample, so I went back and checked the last 108 years of the DJIA. I show 8 occurrences for that index, and it bounced back the next month 7 of those times by an average of +2.7% (the one negative return was -1.5%).

Using the same four-month window as the S&P, I show 6 positive instances out of the 8, with an average return of +6.2%. On average, the most the Dow went against us during those four months was -3.8% compared to an average maximum gain of +10.0%."

For those who care yesterday form 4 activity was 2:1 buys:sells; so far today the numbers are a little better than that.

"Craig wrote":He guys, they're saying AHM may not open tomorrow....I wouldn't be holding these into the close
Apparently Nobody did closed @ 1.45.

Figures it won't trade tomorrow 'cause I missed the boat today (LOL)

Congrats to those who did

Many Thanks Peter. Even a blind squirrel finds a nut now and then!

I am having trouble coming up with reasons why the market will break it's recent highs. I am wondering what about the seemingly contagion that seems to be spreading to other industries? We are seeing earnings take a hit due to mortgage/subprime slime meltdown like the rails where Burlington Northern Sante Fe is blaming lower shipments the housing market and retailers like Target and Office Max the same.

Can the global growth story work independant of the US consumer? I find it hard to be convinced it could.

Maybe Peter can offer his thoughts on this. Peter, I enjoy your opinion for the simple fact that it's contrary here and I believe all good and honest discourse needs to consider the other side of the argument which you do well.

does anyone know why AHM is selling, alternately, a like 80 cents and then, over 2 dollars and then 80 cents. Is that some bizarre tax loss thing?

AHM-well i'm going to throw another chip on the table for kicks...0.77...the fact that there are buyers here tells me it's still in play...not over till it's over...(not to be construed as a recommendation to anyone else)...

AHM:

American Home Mortgage to close Friday - report

http://money.cnn.com/2007/08/02/real_estate/american_home_mortgage.reut/index.htm?source=yahoo_quote

Good call Craig!

ALOHA !!

Is it just me or are there other people out there that consider all this Dem vs Rep ... lib vs conservative ... red vs. blue ... a load of CRAP!! I am so sick of hearing Rush and Maher and all the rest playing sides!!! It is just so childish I cannot even believe it! Of course thats how the elite like it so "We The People" are never united about anything ... We never are united and that makes it all seem hopeless and you hear stuff like "Things'll never change!" ... "Why fight it?" ... "Whatever!" "Its too BIG!" Apathy abounds!! The perfect environment for crooks to breed in ...

In reality 90% of people just want to be left alone to pursue their happiness! Does BIG government really think they are indespensible? When we really need help, like Katrina, look what happens. People see BIG government for what it is ... inept and useless! Turns out victims of Katrina got more help from neighbors and non-government entities ... even the dreaded WalMart was there! FEMA was nowhere to be found ... off in DC counting ice bags!

also notable is the lack of any headlines on AHM...instead, we have a story on hedge funds snapping up distressed assets: http://tinyurl.com/2nanhr

in fact, "Marathon Asset Management LLC, a $9 billion hedge fund firm focused on debt markets, is planning a new fund that will buy distressed mortgage-related assets to take advantage of "carnage" in the subprime home loan business.
The new fund, the Marathon Distressed Sub-Prime Fund, will begin taking commitments from investors in August, according to a letter sent to clients by Marathon President Bruce Richards."

Of course, this announcement was July 30, when AHM was at 10.47...

http://preview.tinyurl.com/26s8tt

kaimu,
The failure of FEMA during Katrina was simply a self-fulfillment of the current administration's view towards government and towards the people they govern. They put fools in charge because they don't believe these agencies matter, and those fools behaved like idiots. There ARE some differences in the parties. The Republicans don't believe in government, except as a means of plunder, which is why their governments will always be terrible.

Under the previous administration FEMA actually did good work and helped a lot of people during their most awful hours. It was among the more respected agencies.

The failure to do a damn thing while an important city and millions of people were blown away is not a symbol of the failure of government as a concept - it was a failure of THIS government, simply the most corrupt, incompetent and ideologically driven government we have ever seen.

Mike
NYC

2nd...What are all these trades going off dollars above the ask in AHM?

don't know...what's going through my mind right now is who's buying? i'm sure it's not J6P, so it's gotta be institutional...so what do they know?

Hey Geckojb: Here is my arguement for global growth dispite the coming U.S. recession.

In my mind the question is:
1. How much does the U.S. consume verses the rest of the world.
2. How much are they growing by?
3. Once the U.S. economy goes into the enevitable recession; how much will the global growth average be vs. the U.S. recession percentage.
4. How much exposure does the Listed Companies have in the U.S. verses outside the U.S.?

I would like to argue that: this is not the same world that exsisted, before the world gained access to the World Wide Web. My argument is that: because Joe-Public in China, or Africa, or Brazil, has access to the same information that we have; they now know they can have all the goods that we have, at costs that are less than half what their importers were charging them before they had access to the internet. This has made access to goods easier and cheaper. Thus many of the things that only the rich in their society could afford, now the average person can afford also.

Hey Bill: You are in the Bahamas. Have you noticed that the average commoner has more material goods today then they did a few years ago?

My wife is from Trinidad and we lived there for a couple years until 2002. Even since then, I hear that people are now driving SUV's and have multiple cars; both of which was unheard of 5 years ago.

This is not the same world that was dependant on U.S. growth, to maintain its growth, as was the case during the last recession.

Instead of the stock market collapsing, I believe the U.S. currency will continue to lose value. And that sectors of the economy, and their stocks, will be the by-product of their exposure to the U.S. markets.

The U.S. currency is the biggest loser in this residential Mortgage collapse, and the ensuing recession. Really we are increasing the value of world currencies vs. the USD: as the world becomes greater consumers of material assets.

What is at stake here, is clearly the U.S. dollar being significantly more devalued then most people believe will take place. As well, the shifting of assets from the ignorant, (those invested in the funds that hold the debt of American Debtors) to the wise (Those that are shorting the right sectors of the U.S. Market, and those who own companies heavily reliant on foreign markets for the majority of their sales).

Because the magority of growth and world consumption is taking place outside the U.S.; as long as the consumption of goods outside the U.S. supersedes the depreciating consumsuption of the U.S. you have global growth.

Really what is in question here, is whether or not the worlds appitite for goods has changed and become greater during this market cycle, compared to previous market cycles. This is the main reason people think the world needs the U.S. economic engine to survive: Because it always has.

LEND-bidding at 6.90/7.00

LEND-expects acquisition to be completed as planned in 3Q...

chris...no idea what's in play with AHM, but if i were presiding over a Ch11 hearing, with the livelihoods of 7400 employees on the line, i'd try to work something out...of course, the deal could still leave shareholders with nothing...

This morning I penned a quick note that the market seemed solid underneath and the bulls had an opportunity to take it up. I have looked at the internals and they confirm that the base was good. At close we settled at/near the top of today's range. My read was that risk appetite was good which means that some swagger is back.

So I believe the stage is now prepared for a meaningful rally, absent headline interference such as another hedge fund blowing up or a major player taking a big hit. 1440 on the SPX is now the base and I would expect a push past 1475 to lead to an attempt at 1490. The overhead slog seems formidable and I expect the Dow and SP100 have an easier time of it, in that order.

I cannot post at all tomorrow during market hours, sorry. I know some of you have written to say that my voice is needed but even sneaking away today when I could was wreaking havoc with what I was intending to do. And I don't like giving you "reads" that are based on less than a studied look even if they do in hindsight turn out to be accurate.

Good luck and good trading.

Kaimu,

WRT your post of 5:56 p.m., I believe the American public are beginning to show frustration with the false choices being given them, but at present lack the power and motivation to take control.

For an entertaining and insightful presentation of false choices in politics you should view one of the videos of "Mouseland" by the Canadian politician Tommy Douglas (deceased). This one has an intro by his grandson, Keifer Sutherland:
http://www.youtube.com/watch?v=gqpFm7zAK90

If the URL doesn't work simply search for "Mouseland".

Peter,
I think your number 4 is key. If/when there is a big pullback, US based companies with a great deal of business overseas will be among the biggest bargains. I wonder how one would go about finding or developing such a list?

I don't think the rest of the world is at the level of consumption to replace a devastated US consumer, but they are catching up. There are a lot more SUVs and multiple car families in formerly poor countries, it's true. I've seen it myself. But there are still an awful lot of poor who need to catch up.

Regards,

Mike
NYC

Morning employment numbers will provide the early direction to the market. The twin blasts of the past two days mean we rapidly reach overbought levels on an advance--and resistance too. Will traders want to push things before the weekend?

My measures say the broader market (NYSE, OTC) is not at all healed but all the action and the headline indices looked pretty good today. My model still says distribution in the broader market has not abated. Broad market leadership is still negative.

Mark,
They're still pushing utilties, telecom and consumer goods and int'l exposed blue chips. Totally defensive. It doesn't say "we're confident" to me. Together with this sort-of shadow distribution (where we know they are selling but in a way that keeps prices somewhat steady)worries me. It still feels like a bull trap to me. Three sectors do not a broad market make.

How far will the credit crunch spread?

Jubak's Journal8/3/2007 12:01 AM ET
http://articles.moneycentral.msn.com/Investing/JubaksJournal/HowFarWillTheCreditCrunchSpread.aspx?page=1

Sorry, forgot tynyURL for the Firefox guys

http://tinyurl.com/2myxve

Hey Mike, Re: "There are still an awful lot of poor who need to catch up." Thus the longevity of the growth cycle.

As for the list of companies I have a couple: ABV CHND LFC SID

As well, Gold stocks could be bought: as gold is a currency, it should move higher as the U.S. Dollar continues to fall.

If interest rates fall, the US Government may avert the the magnitude of the problem the U.S. Consumer will face, once it comes to the renewal of these highly leveraged mortgages.

It may be that the U.S. Gov. will have to drop interest rates atleast once to prevent any real serious problems from arrising in the mortgage industry. Hmmm... Could this be what is in the cards? Why not? Then this whole mess doesn't grow to the debt markets outside of housing.

As long as the Consumer's loans don't get called, seeing the value of their homes have dropped, we could avert this mess. Can't we? Bill: Is this possible? Could this be what is being factored into the stock market? I mean the American people are working, and can pay for their homes as long as they are working. And as long as interest rates don't go up. So the only question is: Do the mortgage companies have to call the loans, if the value is less then the debt owed, if the consumer keeps paying their debt? If not, then as long as interest rates remain low, then there may not be much of a recession at all.

"Anyone look at LEND today? A buying opportunity? :)"

I am so sad I was not in the market today...

LEND is up 25% in after-hours. Maybe I will nibble on that or maybe YHOO tomorrow.

Bill, if you can't find a place in Bahamas, there's always New Brunswick. The climate isn't as nice and there's plenty of taxes but you can still get 350 acres of oceanfront for $250k and maybe the government will pay you to fish.

http://tinyurl.com/yobnvc

Billy's having a fire sale on Kijiji

http://tinyurl.com/ysbc6c

Anyone with LEND profits want to buy me 10 acres?

Wavesmash,

How close is the NB property to an Irving refinery?

The market is Gone! The Illusion is Gone! No more Starbucks manager 1st time buyers looking at $550,000 3Br 2B townhouses....no more move up as the present owners of those townhouse CAN'T sell without dropping their prices to the level of those Starbucks employees and those Rite-Aid Managers and all those other Service Industry Slaves. No more JiffyLube managers speculating on real estate buying up 6-7 properties on 100% no doc, IO loans.

Where they gonna get the 20% they will need now...Mom & Dad? Nah, cause Mom and Dad have got to protect their Ass-ets as they see Soc Sec going away and their Pension (if they had one) in jeopardy and their Mutual Funds evaporate and their own house worth 50% - 75% less and Health care skyrocketing to the moon!

Hold-outs? How long can you hold-out? No one will loan on a property 50% over the comps! All around you everyone is bailing for whatever the market will bear – so unless you can find a cash-rich fool – unlikely – you’re stuck between a comp and a hard place! It will be a downwards spiral until an equilibrium between income and inventory is reached – and that’s a long, long ways down right now.

How are they going to sell real property to the illegal aliens without SS numbers or tax returns? How will they sell to all the underground-economy shysters who have never filed a tax return? How will the multitudes earning $45,000 / year buy those $550,000 townhouses and SF homes (70 miles from their work)? How long will banks and lenders manage millions of empty foreclosed houses left behind after the owners and builders all go belly-up in the green muck! Will those banks and lenders even be in business to mop up after the BK builders and owners? Who in this mess will be the end-of-the-line bag holders?

No, without the phony-money lending practices that led into this lets-make-believe-we-can-actually-afford-it bubble the market would have had to stay within reach of the real wages people are earning today. Within the range of the cash-in-hand buyers who don’t file tax returns. And since median real wages have been going DOWN steadily since 1999 (and cost of living going UP) and since US businesses have been shedding quality high-wage jobs as fast as you can say GLOBAL ECONOMY, and are now accelerating that trend minute-by-minute there is only one direction for housing prices to go --- DOWN DOWN DOWN! Who is going to absorb the lost value – current property owners! At least in the median and lower incomes ranges.

We are back to 80/20 full doc three month seasoned verified savings 33% cumulative debt ratios high FICO loans only….if not this month, then surely by September. Contrary to what existed a few years back, sub-prime and alt-A type loans won’t be available to anyone for any price.

No more hiding the fact that the US is fast heading towards 3rd world status – lots of shanty towns and squattervilles, lots of slums, and a few, armed and gated, enclaves of the rich and powerfu

Craig-

Could you please provide data that yesterday's buying was only in 3 sectors? I am not disagreeing with your thesis that this could be a bull trap, but my data shows a lot of unloved sectors caught bids yesterday as the first basing attempt took shape. If they want to buy homebuilders and broker-dealers when any headline could blast them out of their positions, well, I'd call that an appetite for risk. They also seemed to be buying consumer discretionary (XLY had a big pop) and right in front of a payroll number. Hence my conclusion. Others may disagree.

Note that I didn't say the market was going to run away here. All I did was map out the likely game plan in the major indices. My last note pointed out the continuing weakness underneath. The distribution slowed, but it's still there. So your point has validity. I am just wondering if I missed something that you have access to.

No way-Shanghai Composite hits a new high...

My apologies Mark, I glanced at the market breadth right after close and shot from the hip.
When I checked later I realized I would be corrected!

Those sectors were still being bought, but financials (suckers) had a big run as did a few others like industrials and materials.

I see gold and ag are getting some help as well as those countries rich in commodities like Canada and Brazil. Starting to look familiar?

I was even more worried when I woke up to the FTSE down, but as of now it is made a recovery.

92,000 jobs, 4.6% employment, wages rising (according to the gov't). The econ looks to be slowly weakening, USD is falling.

Could be a nasty day once the market notices that fiscal limp. PM's should do well today with the USD weakening and the euro/Pound strengthening.

2nd, Watch MU, may be getting a bid due to shut down of samsung. Sandisk is as I type.

Bill has a new post up.

Rick45,

The question you ask, which is, how can the workers of the future afford the home prices of the present is, I think, one of the most compelling intellectual exercises possible. Technology and global trends assure us that the working and middle class of the future is a more marginal player in real estate than the generation prior. Does the day arrrive when we laughingly joke, look, during the boom, that house was 2,5 million dollars. HaHa HaHAHAHAHAHAHAHAHAHAHA.....?