UNG-nice reversal in Nymex Oct NG from the overnight low of 5.249 to 5.56...craig, do you see this as a buy or a sell...

taking on a little QID...just don't trust the monday gap-up openings...

Speaking of interest rates and the price of gold, would the Cara community kindly vote in the following polls:

http://stats2008.googlepages.com/poll

There are two simple polls:

(1) what will the Fed do with rates?
(2) what will the price of gold be?

The polls show instant results, are for fun and not overly serious, but will allow to see how well the system works with a large number of responses, so please take a quick vote if you can. Thank you.

As for predictions, lets see how the Cara community does compared with the experts :-)

2nd,
Depends on your basis! LOL!

If my basis was lower than current price I would be a seller. As it is I'm a watcher/waiter.
I'd buy if we went back to 33/34 or so!

Hmmm....looks like the morning mayhem is starting to settle down.

Those watching Bill's TM bottom fishing call may want to keep an eye on TM for buying opportunities. Green Arrow, the 52 week low is 103.78 and it's currently 112 +/-. Here is a co. to watch.

Bill,
I have posted some employment charts on different
sectors of the economy. Goods-Producing emplyoment has turned down(as has the household survey). The Financial sector showed no chage from
July's level despite the mortgage-related layooffs(It is lagging)
This point to another weak number next month.
So I have to agree that the Fed will cut rates.
See
www.wrahal.blogspot.com

I like MSPD here for a trade $1.81

Where do you think they go Will?

I'm still leaning to 25 basis pts. not much to celebrate about. Hard to see a big reversal with 50 in light of all the comments emanating from Fed heads and supposed global demand pushing inflation (see China).

2nd,
Careful what you ask for....UNG!

BTW 2nd,
Nice call on GFI this AM. Would have been good for most of the sector. I took your advice as I was up on a ST GFI. More drinks?

That QID looks promising from here.

Another to watch in the accumulation zone is WMT.
New 52 wk low....

great article by Mr. Frank Veneroso off of Paul Van Eeden's site regarding the current credit crunch...

https://www.paulvaneeden.com/MediaLib//Downloads/Home/Commentary/Frank%20Veneroso%20on%20the%20US%20Credit%20Crunch%20(263%20KB).pdf

Quite a fast decline today. I recommend everyone read Jeff Cooper's missive today:

http://www.minyanville.com/articles/index.php?a=14035

This guy is an excellent market technician. He called the July top weeks before, to my amazement.

If S&P 1430/1400 is broken we could see a very fast decline to 1350 or less. The next two weeks are very vulnerable to big declines.

I think if the XAU doesn't catch a bid soon this morning it'll be testing the 144 line for the 50 day MA. Gold is up a .25%...

Moab,
The herd is telling us they are waiting.
How many folks here are holding large amounts of cash waiting to test the previous low?
How many are trading ST?
How many talking noggins are saying they are either in cash waiting to test the low or short?
How's volume and in what direction?

Hard to disagree with the charts and analysis indicating the above!

I killed the MSPD trade, it is a victim of the times.

2nd - Your thoughts on PKD @ 7.21?

Craig -

Don't know exactly what you mean. This community is more bearish than most investors so I would not extrapolate our behavior to the rest of the market. I don't listen to talking heads, especially on financial infotainment as you never know what their agenda is. Before the July top cash levels are at the lowest in history and margin debt was the highest.

Market behavior will tell the tale at support levels. The possiblity of a large decline in the next two weeks is there based on past patterns of market panics.

My feeling is that the market is being primed for sone geo-political event(s) to occur. This could be a mashup of reports on Iraq troop stay/withdraw in combo with some other political event in combo with some natural disaster. I have no doubt that computer models are developing these, and when the ducks are in a row the trigger gets pulled. This should be a very interesting week.

OG-still think cash is the way to go (or short if you need to be in)...i see nothing in today's news that changes anything, and still think everything goes down from here...

and tomorrow being 9/11 + good mix of superstition out there, difficult to go long...

aces -- Re your morning question:

"Any opinions as to why silver's is trailing gold? Doesn't silver usually lead gold? Is silver underpriced right now?"

Perhaps silver IS still leading, rather than trailing, gold; that is, leading to an interim pullback?

2nd -- Came to same conclusion after I posed inquiry re PKD. Mostly in cash, but still long UNG and a few puts [CI, ALB, & CAM]. Having yet another good day. Hope you are too.

Silver, as part industrial commodity, is more susceptible to economic contraction and consistently underperforms gold during economic slowdowns. Chart this ratio going back 25 years and you will see this. Silver leads gold and outperforms during economic growth but underperforms during economic contractions.

as we suggested in previous bc posts, the rally into month-end August was nothing more than institutional asset managers position-squaring and equitizing cash to avoid benchmark risk. as of this morning, SPX was -3.5% from the peak of the month-end rally. we expect a re-test of the mid-August low of SPX 1370 to occur in another 1-2 weeks. if this scenario plays out, we will be releasing a new research report on our website very soon.

our Mar07 research report, available at http://www.2globalmarkets.com discusses why stock market weakness would occur this year. You can also check out our Archive section that includes a number of research articles on the U.S. dollar, gold, the Fed and Wealth Management.

I'd offer two wild guesses re silver:
- for individual investor it is much easier to hoard/store/hide gold than silver ;)
- silver may have more industrial use relative to investment use than gold and economy slowdown expectation may have extra toll on it;

Sorry to blather on (I'll shut up now....), but those who avoided the temptation to go long BC several days ago should thank those who advised caution. BC down 4.26% @ 22.22....

Moab,
I don't know how bearish anyone is here. I know we are on Bill's blog and the call is a meltup in the next month or so with rate cuts, rising USD supply and rising gold. ST I think a lot of people here expect a test of the previous low before resuming in the meltup. If that is bearish then I'm okay with that.

I'm not talking about one or two heads but the average on Bloomberg. While they are more in the hold area, hold isn't BUY, and volume is telling us there aren't a lot of buyers.
That would jive with the list sentiment.

We're not near tops now so it doesn't matter what they were then. What are margin levels now?

Future charts are based on today's sentiment. Charts are backward looking by nature. They can be predictive (the body will tend to follow the head), but the chart itself is the past.
They are only one tool in our box.

I agree with your outcome, I just have more indicators pointing that way than charts.

SiO2:
Tried your poll. Returned error message.
"Could not Process Request"
Could be a coding error.
As for me Cash is King. Sml positions in MU & CNE with good basis on each.

Lazarus, could you please try again and let me know if the error happens again (and if so, which browser you are using). It seems to be working ok, there is a steady flow of votes coming on both questions. Many thanks.

http://stats2008.googlepages.com/poll

The weird thing is that typekey logged me out, after a few months of being logged in.

RSI Question -

Is using a RSI 35 daily the same as using a RSI 7 weekly (allowing for holidays, etc.)?

Like using Yahoo charts for the ease of use, etc. but it won't let me put in RSI 7 weekly.

Thanks

BC

Oh yes, Old Goat, I'm certainly glad to have been dissuaded from getting into BC too early. Fundamentals were persuasive, but that said, if in a week or so the RSI moves solidly back up and the MACD turns upward to form a bottom above it's mid-August low, then this stock will be showing good bullish signs technically. I've got this one on my watchlist for a possible buy after the broad market pullback that I'm believing will happen.

2nd....Got UNG?

Someone mentioned here few weeks ago to watch GS for market direction. (I think it was g034).

GS held up well friday and is up 2% today.

Looks like BC may get a bounce to 24.

UNG:
Nymex Natural Gas Rises as Explosions Damage Mexican Pipelines
http://www.billcara.com/archives/2007/09/caras_commentary_community_cha_25.html

Buying some Yamana Gold.

Didn't get the bump last week the other gold companies did, I think due to undwinding of Meridian arbitrage positions and once this is done, think will play catchup.

P/E for FY-08 is only 9 and have good record on managing acquisitions.

UNG:
Sorry I pasted the wrong link above.

http://www.bloomberg.com/apps/news?pid=20601072&sid=anj4eNk65qeg&refer=energy

JogyP - Not saying you're wrong re BC, but the connection between GS and BC escapes me. Is your projected BC move based on potential gap closure?

craig-no...didn't foresee the pipeline explosions ;)

I am new to the market and trading. What did Bill mean by this statement?

"As the Bear advances, the goldminers will be the last to leave the dance floor. I expect that to occur in anywhere from one to four months."

That gold will fall in 1-4 mons?
Thanks!

OldGoat,

Sorry, I just posted my thought on the market, GS and BC. Did not mean to imply any relationship between the two.
I just think BC is short term oversold and may get a short convering rally if overall market improves.

Sorry 2nd, Thought you had a ST position.

My Karma screen is okay today I guess.

Si02,

Took the poll. Worked fine.

Isaiah:

from bill's july 26 commentary:

"As to the overall market and gold specifically, the gold trend and cycle is a known lagging indicator of a broad-based Bull market. In a Bull fight, the Bear takes down the paper-backed securities first (credit market based interest-sensitive stocks) because they are the weakest storehouses of value. Next to come are the stocks of the companies that hold assets comprised of brand and patents and so forth because these companies have products and services people always need and use to some degree through thick or thin. Finally comes the commodity-based producing companies, which because of their control of the supply-demand economics can stay stronger longer. The strongest of course is the goldminer producing companies because gold is real money – a permanent storehouse of value. So, when the Gold Bear arrives on the scene, it is almost always a case of having desert to end the meal. By then, the rest of the market has already been consumed.

In the current market cycle, US Treasury Secretary Paulson and Fed Chief Bernanke have managed to support the financials longer (in their price trend and cycle) than most of their predecessors. But, in the end, the free market will prevail over intervention because the free market is based on natural law, where ultimately human nature will drive people to do what they are going to do in any event, with the passage of time.

So the focus on gold, unfortunately, means the market is quite late in its long-term cycle.

After a market pull-back through a complete Bear cycle, the Financials will be the seeds that first sprout as drivers of the next Bull. That happens because Bear markets send interest rates (ie, the price of money) down. We then borrow that money to build economically productive assets (ie, wealth); and the Bull then thrives and the Bear dies.

As I say, there is a rhythm to all prices. The market is a dance. Gold is the last one out on the dance floor before the music stops.

Usually. (LOL)"

UNG - Out @ 36.97; probably too early an exit, but at least I'm free of the corpse.

For those of you who may be interested, Valgold, VAL.V is on fire sale, down over 15% on less than 50,000 share volume.

OldGoat - I feel the same way. Exited the $35 basis position I built after the storage report drop last Thurs/Fri. I unloaded this afternoon between 35.85 - 36.98. I'm hoping for a nice pullback once this short covering rally dissipates to reload a bit.

Sitting on my hands at the moment - one of the most difficult strategies I have learned lately.

UNG:
Call me greedy, I am going to wait for a gap up tomorrow morning.

Newcrest, the large Australian miner is looking to raise $2 billion Australian dollars to close out it's hedge book, repay it's gold loan and buy put options on gold to ensure they can fund their current projects.

http://www.newcrest.com.au/upload/412_10x09x200765612PM.pdf

Good news is that it is another major gold miner who is looking to gain full leverage to POG (like Barrick did earlier this year). Bad news is that this could make it hard to trust movements in gold price over next while.

2nd_ave

Thanks for that GREAT description of the
Bull-Bear Market Dance. I appreciate it!

For those that follow Marc Faber. He has an interesting call in his lastest posting.

www.ameinfo.com/131614.html

My view is that unless the Fed is prepared to accept a vicious recession it has no other option but to bail out the system no matter how unpleasant the consequences will be in the future. The problem is really that in recent years the Fed has never controlled credit growth and that the monster needs now to be fed with even more money and credit growth.

Admittedly, 'easy money' may not do the trick for housing, which is likely to continue to deflate in real terms (inflation adjusted), but it is possible that amidst a deteriorating global asset bubble advance/decline line (fewer and fewer assets making new highs) the one or the other asset market will still make a new high.

After all, the Shanghai stock market has so far not been affected by the mortgage related credit crisis. As an aside, the Shanghai Stock Exchange Index trades now 55% above its 200-day moving average (it is therefore extremely overbought) and it is up from its June 2005 low by over 4-times.

My point is simply this: When emerging markets will break down sometime within the next 9 months the US stockmarket is likely to out-perform foreign markets.

Since I assume that this insight will not have escaped the attention of large global money managers, they are likely to increase their exposure to US equities in future. This, particularly, if the US dollar weakens further.

Reluctant bear
Therefore, despite being negative about the US economy and its financial market, I am reluctant to be heavily short US equities. Earlier, I mentioned that new US stock market highs were unlikely for the rest of the year and just above I seem to be 'relatively' positive about US.

So, if I look at the investment environment I cannot get excited about participating in the ongoing battle between market fundamentals, which are, in my opinion, a disaster, and the manipulation by the Fed (and possibly at some point also by the government), which could boost US asset prices or at least prevent them from declining as much as the bears (including myself) would like them to do. In military battles even the victors have a very high casualty rate.

Gold for optimists
Therefore, I suppose that in the ongoing financial battle between the optimists, who expect a new high shortly, and the pessimists, who expect a new low before the end of October, the best course of action may be to only take small positions and to be patiently awaiting better entry points both on the long and the short side.

However, if some of my readers are very optimistic, I recommend them to buy gold and gold shares rather than the S&P 500 and other major US indices.

At the same time, I would continue to avoid the financial sector, which is in a credit contraction the most vulnerable industry. It is only a massive injection of liquidity that could reignite a further up-ward move in the global asset bubble, which would be nothing else than another major debasement of paper currencies

Wondered if any in the community are actively working with the spreadsheet(s) and excel add-in for cara 100 screening. I've had partial success with functionality, but have a ways to go. some fields are not yet updating. Would like to know of others work/comments.

2nd_ave

Using that theory the market has been on its last legs for the last 6 years (since) gold started to move off of its lows.

I subscribe to a different theory: Gold is a currency and as the USD is falling Gold is rising against it, as it is a currency.

I believe Gold is no more on its last legs as I believe the USD is nowhere near finished its decline: I think there is a long way to go.

As U.S. corporations are global corporations, I believe that the Dow will continue to rise, as the international markets will continue to go forward and the value that they will add to their corporations (in U.S.D. terms) will increase during a U.S. slow-down.

In short Gold rises as the USD falls.

moabmatt,

Hoosier and I are working on a project that will create a working excel spreadsheet that will work for the Cara 100. We're currently working on making it easier to install and configure. We are also trying to make it easier to add new features that the community requests.

We should have something ready this week.

Quentusrex & Hoosier
Thanks, you guys.
Your (and others') generosity and hard work is what makes this community so unique.
I hope in the future that I may be able to make some small contribution to repay.
I am sure Bill is loving this.

Quentusrex and Hoosier -

Thanks in advance for getting this RSI sheet together! It will be a great help.

Quentusrex and Hoosier----Ditto thanks in advance for your extra efforts and contributions.

"Interesting start to the week as 100 percent of economists are now expecting a Fed rate cut of 25 basis points or more. Seventy-four percent anticipate a cut of 50 bp to 4.75 pct. Prospect of a lower rate is leading to a US Dollar crisis, and rising market interest rates and commodity prices, however."

Bill, just last Friday 50 or 60 of those same wall street economists were predicting that 100,000 workers would be added to the workforce last month. Not only were those "ECONOMISTS" wrong, they didn't have a clue!

I believe the people with direct money control can do what ever they want, to whom ever they want, as long as it benefits them and no one else.
The only logical solution is to move to Hawaii.

ALOHA !!

Counterparty ... every contract requires one even a derivative! Ever wonder who is in charge of counterparty risk on all these trillion dollar derivatives floating around the globe?

COUNTERPARTY RISK MANAGEMENT GROUP(CRMG)
Members are almost evey HB&B. The leaders are:
GOLMAN SACHS
JP MORGAN
CITIGROUP
BEAR STERNS
LEHMAN
DEUTSCHE BANK
MERRILL LYNCH

Here are the WORKING GROUPS that are no doubt interfacing with all the major central banks to avert the latest disasters.

WORKING GROUPS
- RISK MANAGEMENT AND RISK RELATED DISCLOSURE AND PRACTICES ... headed by Goldman Sachs, BArclays, JP Morgan and Bear Sterns

- FINANCIAL INFRASTRUCTURE DOCUMENTATION POLICIES ... headed by Goldman Sachs, Lehman, Merrill Lynch, Deutsche Bank, Bond Market Assoc. and the ISDA(International Swap & Derivatives Assoc)

- COMPLEX FINANCIAL PRODUCTS RISK MANAGEMENT, RISK DISTRIBUTION & TRANSPARENCY ... headed by mainly JP Morgan and one slot out of ten is filled by Citigroup

- SALES OF COMPLEX FINANCIAL PRODUCTS TO RETAIL INVESTORS ... headed by Goldman Sachs, JP Morgan, Gitigroup & Merrill Lynch

- MAJOR LEGISLATIVE AND REGULATORY DEVELOPMENTS ... headed by HSBC & Merrill Lynch

- RISK MANAGEMENT CHALLENGES ... headed by General Motors Asset Management & TIAA-CREF

Link to CRMG: http://tinyurl.com/2ym9rh

I would be worried about General Motors managing anybody's risk ... although GM certainly has the experience with "challenges"!

Now if this isn't a case of the fox guarding the hen house I don't know what is!!! On the other hand it is also a short list for trillion dollar class action lawsuits and lynch mobs ... These banks possess the most exposure to failed derivatives going forward ...

Some talk earlier in the thread on cash sitting on the sideline. Nothing could be further from the truth. John Hussman has recently shown data pointing out that fund managers' cash position is at historically low levels. A large part of the retail investor/trader might be on the sidelines, but the market moving institutions most assuredly are not.

Isaiah-

"Thanks for that GREAT description of the
Bull-Bear Market Dance. I appreciate it!"

Just wanted to clarify that the description is entirely Bill's-I merely copied and pasted his July 26 comments. And agree with your comment...

Bill, where do you go for a vacation, when you are already living in paradise? :-) Hope you're getting some good rest.

Bill, old subjects die hard, Stelco. There's a very good article in The Hamilton Spec.com today. Local Union of Stelco is looking for people to come forward in regards to shareholders etc. They seem to be very irritated with the scheme that has taken place. They appear to want to take action. A man of your stature and knowledge could be a key asset in resolving this situation. I don't think we should let the fox out of the hen house.

Thanks SiO2 for the poll. I like that many here are sharing their daily trades or watchlist additions.
Thanks Quentusrex and Hoosier for the work on the excel sheet. I may learn more computer skills just trying to get it to update. Gotta love a challenge.
My 2 cents. If there is no EGE (extemporaneous global event) tomorrow, I expect a nice bounce just getting thru 9/11 quietly.
Peace
Gray

Alright everyone. Here's the update that atleast some of you have been waiting for. Here is the link to Version 1.0 of the Cara100 Excel Spreadsheet by Quentusrex and Hoosier.

Here is the link:

http://www.mediafire.com/?es1z1ouysed

Just a couple reminders:
1. The spreadsheet needs to download almost 7 megs of information to make it's computations. This will take time, but is worth the wait.
2. If you find a bug, let us know.
3. If you want a new feature, let us know.
4. Enjoy!

Quentusrex - Hoosier,

Many thanks for your time and effort. I'll download tonight and play. Feedback will follow.
MM

ALOHA !!

writerblock ... If I recall Bill is going to his son's wedding in Canada somewhere. I think????

I live in paradise and I vacation on other islands. We usually go to Oahu North Shore or Lahaina but our next BIG trip will be to the BIGGER ISLAND known as Australia-OZ!!! On walkabout in Sydney and Perth for a month and a half ... I just finished up the entire trip itinerary ... Try going through all the airline and hotels on "dial-up"!! It took me bloody forever!!! Whats with islands and lousy internet??? I lived in OZ and went to the University Of West Australia for about six years and still have my mates there, mostly in Perth. Looking forward to a long COOOOO-E-E-E-E !!!! And a little of the Swan piss!!! G'DAY !!! One of the amazing trips we'll do this time is the Indian Pacific train from Sydney Central Station to Perth ... right across OZ!! Jeez, that should be fabulous ... I love trains ... its about the only way I can escape from having to drive! Somehow I am always the designated driver no matter where we go!!! I have to admit though it is a bit tricky driving in OZ where they drive on the "wrong" side of the road and then the gear shift is in the "wrong" place as well! When will they ever convert to the "correct" American way of driving? Still, everytime I drive in OZ it takes me about ten minutes to get orientated to the "wrong" side and then I'm off ... no worries! Stick, one ways, roundabouts ... who cares !!! GOT IT MATE !!!

G'Day

Kaimu, I'll keep a look out for you. I imagine you to be a big mad septic tank, running around in a loud Hawaiian shirt spouting forth about the end of the world. LOL....

While your over here look at Crosslands Uranium ASX:CUX. They own a piece of country next to Rum Jungle in the NT. Rum Jungle was the site of the first uranium mine in OZ in the 50's.The country they have is indicative and has large uranium anomaly on it. They've got some good jockey's on board, a couple of blokes that helped find and prove up Ranger & Jabiluka, two large mines over here.They've also managed to get some junior Canadian crowd to tip in $8 mil over time for a share. Check it out anyway. I know this because my mate owned the lease and then sold it to them, but that's another story in itself.

Just a word of warning while your over here kaimu. Stay away from our girls........:}