Thanks for noting the blatant manipulation in the markets yesterday, Bill. Minyanville's Jeff Cooper also discuss this today:

http://tinyurl.com/29oqcx

I sent my email to the SEC about this. I hope others did, as well. As you say, Bill, how can we expect to manage our money if the markets are rigged?

Anyone get into QID near $35 this AM? 2nd?

I hope so. Hard to not be paralyzed when the futures spin is so positive.....thanks Bill.

Long time reader, first time poster.

Bill, thanks for the work you do here. Not only is your commentary excellent, but you've also managed to form a strong community of well-educated investors and traders.

Recently "Simon A" left a comment that introduced me to a website run by Karl Denninger. In last night's video commentary Karl shares what he thinks happened; you can find the video at:

http://tickervideo.org/eod-1024/eod-1024.html

Anyone that is offended by colorful language will want to skip it. Those with children in the room will want to use headphones.

Cheers.

craig- no, sticking with my 50% short posture right now and not adding any more...

n2s- after reading bill's opening commentary and jeff cooper's column, wondering how far manipulation can go before they run out of ammo...can they keep this up for another year, two years, indefinitely? someone has to pay a real price for the party, right? the pain of homeowners selling at a loss is an opening chapter, but for the most part i still see tax payers partying out there...

Well that market is off to a morning tanking again. What are the dark pools and HB&B planning now? Should I buy QID or QQQQ? Will they eventually tie up their capital enough so the market has to correct? It seems trickier and trickier playing against the "house". Any ideas would be appreciated.

Bill,
I believe more rate cuts are coming simply because the Republicans cannot possibly justify wasting more of the tax payer's money on Iraq if those same tax payers are losing their shirts in the stock market. Therefore the markets will stay in bull mode with minor pullbacks until the Iraq issue is resolved or the Democrats come to power. Democrats will be blamed for the sharp decline in the financial markets the morning after the election. IMHO but.. on the other hand can they really keep the dance going for that long? I call it a two handed prediction. On the other hand they kept it up for this long already...oops! that makes three; which means the first hand got elected...for now, with tight stops, physical gold and cash, if I understand it correctly... Cheers

Bill,
Can you explain this a little bit? I'm having trouble getting my mind around the strategy:

"My key on the silver market is the share price and the PE multiple of Silver Wheaton (SLW) as this company is not a miner, but is a banker of silver production. Whenever I think silver prices have topped in a cycle, and about to fall, I switch from the SLW to go long silver futures positions. At the bottom of the cycle, I switch back into the SLW."

Using SLV as a proxy (which I hate to to do, but Yahoo doesn't seem to have a continuous contract symbol and I don't know how to do this in Stockcharts) it seems like these are correlated. So a top in one is close to a top in the other.

So were one to sell SLW at a top in silver prices, and then go long $SILVER, wouldn't that be a losing trade?

http://finance.yahoo.com/q/ta?s=SLV&t=2y&l=on&z=m&q=l&p=&a=&c=slw

I'm probably missing something. Can you help me understand this a little better?

Bill, as far as manipulation goes, it's guys like you who have at least gotten me to see it, and understand the motives better, so instead of fighting a ghost who's punches I can't anticipate, now at least I can see better what's coming. They may be giants on an uneven playing field, but seeing which way they might fall helps.

If the PPT (Plunge Protection Team) can prop up the market through Nov. 1, aren't the end-of-year seasonals likely to bear the load of a heavy market at least into January?

It is much easier to be a good trader from the long side than from the short.

At this time, many would view a stock market decline overlapping a housing decline as undesirable.

Inflation of the monetary kind tends to lift all boats.

Yaba -

I agree with you. Jeremy Grantham also believes the presidential cycle will temper the markets until the election, meaning the Republicans will do everything possible to prevent a bear market. No party has held onto the White House in the middle of a recession, excepting FDR.

The question is whether they will be able to do so.

Mike:

"...I switch from the SLW to go long silver futures positions. "

I believe you are confusing $SILVER - symbol used in Stock Charts for Continuous Trade (EOD) with SLV - ishares EFT.

kry--------any posibilities permit befor oct31??

MikeNYC

Interesting comments on SLW and silver futures, I will have to have a closer look at that.

Re Stockcharts, see the following 2 charts they should show up in the charting engine window at Stockcharts so you can see all the dropdown settings windows as to how I set them up, might have to be logged into Stockcharts for it to work.

SLV vs SLW
http://stockcharts.com/h-sc/ui?s=SLV&p=D&st=2006-05-01&id=p93832070763

$Silver vs SLW
http://stockcharts.com/h-sc/ui?s=$SILVER&p=D&st=2006-05-01&id=p93832070763

Another great place to get answers to tricks on using Stockcharts is on the Stockcharts users forum on IHUB
http://investorshub.advfn.com/boards/board.asp?board_id=1277

eom

RobBoss,
No, I'm not.

As I said, I used the SLV as a proxy to create the chart. SLV is based on spot, which tracks extremely close to the front month in the futures market. Yahoo has no continuous contract symbol that I could find, and I don't know how to create the same chart in Stockcharts, which offers the $SILVER symbol.

Explain how the use of the continuous contract could invalidate my point that SLW tracks silver very closely and exiting at a top in SLW would almost certainly be exiting at a top in $SILVER (and by extension, SLV?)

An FYI........

The National Post has a article about the reasons why Peter Grandich thinks gold will hit $850/oz by early 2008. A short but interesting interview.

http://tinyurl.com/2pf5h9

Furthermore, Rob, let me ask you a hypothetical:

Were you long SLW and exiting it because you felt silver prices had reached a top, is $SILVER, SLV, SST, SIL, bags of junk, bullion or any other component of the silver complex a place you would then go long?

I understand fully the symbols. I just don't understand the strategy.

KRY at 2.59 and dropping..

Thanks, Quasi. I need to go to Stockcharts Chart School.

I like this one:

http://stockcharts.com/h-sc/ui?s=$SILVER&p=D&st=2006-05-01&id=p92189631118

$SILVER, SLV and SLW. $SILVER and SLV track each other perfectly, and correlate highly to SLW.

Still scratching my head, but I'll shut up until Bill weighs in.

2nd,
The comp chart (Q's) looks to be in our favor.

Falling RSI, stoch, macd rolling over.

Of course this market is like a dirty ball player, ready to kick dirt in the ump's face to save their sorry slow asses.

So some lie, rumor or manipulation is sure to be used.

Hard to figure how to play all this nice news.
We get Fed cut rumors added to Turkey in Iraq, we announce sanctions against Iran (might an attack be next?)and lousy earnings with the financials hiding under their desks.

Where's Goldilocks? LOL.

Question: Anyone ever follow a stock called Brush Engineered Materials [BW]. It had a nice run from Aug 16th of 37 to 58 on Oct 18th.

http://tinyurl.com/3bwdwe

But so far to taday it is in free fall down 11 points already. Anyone know why?

KRY dropping ... oh, for Chrissake, what now?!!!!!

Bill -

Another sign of the times comes in the form of self-congratulatory earnings release with captions such as "best 3Q ever" or language like this"

"The Black & Decker Corporation (NYSE: BDK) today announced that net earnings for the third quarter of 2007 were $104.6 million or $1.59 per diluted share, versus the Corporation's guidance for $1.40-to-$1.45 per diluted share. Net earnings were $125.1 million or $1.74 per diluted share for the third quarter of 2006."

http://tinyurl.com/ywe3wn

Even if the trend is not collapsing as fast as feared, is it enough to mask the negative momentum and bid the stock back to the middle of the 52-week range? Wouldn't the company's just announced buyback have been more in line with the average shareholder's interest if conducted near the year lows (as DD did a couple of years back in a single big chunk)? Will they proceed nonetheless for the benefit of larger holders looking to distribute?

I see that MarketWatch encapsulates my train of thought with their lede (http://tinyurl.com/2sxzoy)

JML

Disclosure: Looking for a sensible entry point for a long-term value position in BDK. Guess I'll wait a bit more...

The word on the street is...

Chavez is a little irregular this morning. Sell KRY until he gets a some fiber in his diet.

In an unrelated note, here's the subhead on Marketwatch right now:

"U.S. new-home sales rise in September, while a re-examination of sales figures for August results in downward revisions."

I know it's preaching to the choir, but how do we believe a single g..d... word these people say? It's just insane.

MikeNYC, I don't. And I believe someone has shifted the bullshit machine into overdrive.

N2,
So...what do you do? We're in this red queen race with inflation, and nothing you see around you makes any sense.

===========================================

" `Have some wine,' the March Hare said in an encouraging tone.

Alice looked all round the table, but there was nothing on it but tea. `I don't see any wine,' she remarked.

`There isn't any,' said the March Hare.

`Then it wasn't very civil of you to offer it,' said Alice angrily.

`It wasn't very civil of you to sit down without being invited,' said the March Hare.

`I didn't know it was YOUR table,' said Alice; `it's laid for a great many more than three.'

`Your hair wants cutting,' said the Hatter."

============================================

It's their table and they're just cutting our hair and hogging all the wine.

RE: MikeNYC's question re: SLW & silver. First to be clear, I'm no expert and I'm certainly not speaking for Bill. But I think when you are confident in an uptrend in the silver price you want SLW (it will go up faster). If you think silver is topping, but still want exposure, then you switch to silver itself. It may go down, but if it does, SLW will go down more. And if it simply consolidates or continues to move higher, you still have some exposure.

On the silver trade:
I'm no expert, but I have to assume Bill means he would sell SLW near the perceived top and then on the ensuing correction perceived bottom, buy futures.

I would think futures looking forward would tend to price in inflationary increases first, then the bullion would drive higher, then the miners and brokers like SLW as a result of the higher bullion price.

re New Home Sale

HOV had a "Sale of the Century" last month. May be the rest of the home builders did the same.

Agree w/bego

My 2 cents-When I look at the chart posted by MikeNYC, I see $silver -1.14, SLV -2.43 & SLW +31.32. Divergence there.

It reminds me of one of MarkM's tells involving $Gold & $XAU.

Erik P,

Welcome to the community (I recently came out of the closet myself), and thanks for the video link. It's good to know that others are as outraged as myself over yesterday's market hijacking.

I'm so upset, that I can barely bring myself to watch the ticker today, much less trade.

If no-one is brought to justice over this, IMHO, it's because the Feds were part of it.

Watch out for black helicopters...

Wall Street must just glance at the headlines and then make big investment decisions. Builders are up on the news.

If they were to actually read the new housing report they may come to the same conclusions as Calculated Risk at: http://www.calculatedrisk.blogspot.com/ . Cancellations are rising, and the new housing sales situation is getting worse, not better. The numbers just released will be revised downward in the coming weeks, perhaps by quite a bit.

Is anyone else wondering whether Washington Mutual (WM) or Citigroup (C) are sensible long-term buys at these prices? They both pay good dividends.

Can't remember who else had Abitibi, but it appears to have bottomed and is now moving up nicely. I suspect a lot of the low-price trading over the last couple of months was arbitrage-related and now this is out of the way.

Still, by no means, out of the woods, and pricing for newsprint still getting killed, but my purchase is based on the assumption that low prices will force out marginal producers and mills, enabling price increases over the next couple of years which will drive profitability. There is huge leverage here if the prices move as the industry is so despised (kind of like the airlines in 2002).

This cool graphic tells you a stock's month-by-month historical performance. Mostly large caps, it seems. Here's a read on WMT:

http://tinyurl.com/2ncyap

the way to avoid lots of clicks (on this site) is simply to delete the stock symbol (wmt) on the end of the full URL and then type in the next symbol you want to review.

Individual stocks vary widely from the general month-by-month seasonals for the indices.

Byline: this is from Thompson Financial, via AOL, as discovered and suggested in today's Kirk Report.

Fred,

I'm heavily short the lenders but even if I weren't, I'd stay away from these two.

There is a lot more bad paper to be written off in the coming quarters. WM's divy is not safe.

All IMHO.

Good luck.

i think you need to evaluate financials not so much on foward looking earnings, or balance sheets but on their
BFGF (Barfability Factor Going Forward)

right now my BFGF charts are parabolic

;)

EOD on home sales number.

http://bigpicture.typepad.com/comments/2007/10/no-new-homes-sa.html

Bill,

Forgive a greenhorn's interruption here .. but how could AMZN hardly budge during last Friday's tech massacre? Who was propping it up?

Yes, the markets are rigged and my execution awful as all of my puts on AMZN expired OTM.

Bull Hunter,
Thanks for your feedback. There are a few companies in my watchlist now that are in or near the accumulation zone and are at my long-term buy price points. However, I can't make a good case for buying anything right now and I'm bored silly with trading paralysis.

Still have the feeling that we're not going to see much happen in the market until November. We get these big intraday swings, but then net out without much change. Fundamentals are not good, but shorts are afraid of the Fed after last meeting, so quick to take profits. There is still a major risk that the Fed decides to further revalue the dollar to try and help housing which will push up all assets in US$ including stocks.

thanks for the tip Jock - got that from Kirk yesterday and bookmarked it. Now I have an easy way to use it without becoming frustrated on my slow work network.

bb - http://www.dailywealth.com/archive/2007/oct/2007_oct_03.asp

related to ABY - the link at the bottom, foresttalk.com could be useful as well.

Hello

QUESTION??

IS NOW A GOOD TIME TO BUY FIFTH THIRD BANCORP
OR SHOULD I WAIT A LITTLE LONGER FOR MORE PRICE DECLINE.....

THANKS

Isaiah64v4

Check link for details

Brush Engineered Profit Misses 3Q View
http://tinyurl.com/2xqaap

Trading My Chips ........

Thanks for the link on BW....

[Hope I can hold to "my chips" and pick up some others in the mean time! :-) ]

k

kry-----has anyone contacted home office richard marshall? has anyone have any idea where this crystallex will end up. lox o money already been spent by kry. what is it gonna take to ram this permit through??

I have to admit, I've got caught by yesterdays rate cut rumors and closed bunch of short positions against reason and my own TA targets. Still positive on those trades but todays action proves I was completely wrong by getting emotional, my initial trailing stop targets were perfectly correct. In these days of manipulation one should trade like a machine with zero emotions or not trade at all.

For those of you who follow HERO, it looks like it has been doing a stairstep movement the last few days continually testing the previous day's low. Well, it is back at this 24.60 area.

Seems like it would be a good trade to go long with a tight stop around 24.50.

They report earnings on 10/30 and it seems like at least a brief rally to the $26-7 area is in order prior to then.

-----------------

Also, I think Azimut AZM.V is in the buy range right here in the mid $4s.

russty1 - re KRY

at the Gold Show in Toronto, one of the companies that DOES seem to be playing Hugo's game correctly rolled their eyes at KRY. Remember the issue over sharing facilities with GRZ, and promising to process the copper along with the gold? The VZ gov't asked that this be done. (KRY and GRZ's elephant mines are very close together).

Apparently, KRY dragged its feet on facilities sharing and committing the process their copper. That's when the gov't approved GRZ, and left KRY hanging.

Or so I was told by the VP/IR of yet a 3rd player in VZ. The same guy maintained that others are doing OK with Hugo, just that KRY isn't playing a good game in VZ.

For what it's worth. I have no position in any company operating in VZ.

dr.cosa, I want to get some of those BFGF charts. Funny.

With Turkey bombing a country we occupy as well as our gov't putting the squeeze on Iran's money--anyone have any trenchant analysis about what's likely to transpire here?

BillySundance -

How can we know if AZM.V is finished going down? Today, it has ticked up, but with only 2500 shares traded today, it would have only costed someone $US10K to lift the price.

Might be safer to see it base and then tick up significantly. With such low volume, there's no way to sell out if you're wrong.

MBI is getting slaughtered today. Whoever wanted to go long this name a few months ago, this is why I counseled against it. They apparently couldn't even get a quote for their mortgage bonds - no buyers!

Now I just need to cover my short at the right time and not get too greedy.

KOG down big...anyone know anything? News I have doesn't 'splain this.

moab,
Oh man, don't tell me about MBI :( I closed both MBI and ABK among other shorts yesterday on that stupid (or is it smart) rumor.

Jock,

Perhaps I should have said I thought AZM.v looked attractive to begin building a position - I would not dive in. Also, I do realize that volume on this stock is small and prone to wild swings, but also realize that even though the share price is in the CAD's $4.xx, the market cap of this company is only $78M CAD. Most companies this size trade sub-$1 stocks so make what you will of the volume.

At the mid-$4 range, you would be buying in cheaper than Board Chairman Dennis Wood.

From CanadianInsider.com:

Sep 25/07 Sep 19/07 Wood, Dennis Indirect Ownership Common Shares 10 - Acquisition in the public market 1,000 $5.150
Sep 25/07 Sep 19/07 Wood, Dennis Indirect Ownership Common Shares 10 - Acquisition in the public market 100 $5.000
Sep 18/07 Sep 14/07 Wood, Dennis Indirect Ownership Common Shares 10 - Acquisition in the public market 1,200 $4.900
Sep 18/07 Sep 14/07 Wood, Dennis Indirect Ownership Common Shares 10 - Acquisition in the public market 1,100 $4.950
Sep 18/07 Sep 14/07 Wood, Dennis Indirect Ownership Common Shares 10 - Acquisition in the public market 1,100 $4.990
Sep 17/07 Sep 13/07 Wood, Dennis Indirect Ownership Common Shares 10 - Acquisition in the public market 2,000 $5.100
Sep 17/07 Sep 13/07 Wood, Dennis Indirect Ownership Common Shares 10 - Acquisition in the public market 1,000 $4.900
Sep 17/07 Sep 13/07 Wood, Dennis Indirect Ownership Common Shares 10 - Acquisition in the public market 7,000 $5.000

Kodiak Oil and Gas....Anyone know anything (KOG) down 22%

I just called Kodiak and spoke with the inv rel person. She said that a property called questar was showing disappointing results but that the other property called williston or something or other was showing good results. They released their earnings a couple of days ago but I guess nobody bothered to read it till today.

Thanks for the link rob d.

CFC is PLUNGING today....so this might be a harbinger for tomorrow at 12pm for the markets. WHY? CFC reports at that (albeit odd) time. Is it possible they will announce bankruptcy? If that is possible then look out below!

No one who attended the recent miner's expo in Toronto has described yet Rob McEwen's views of the future of US Gold (UXG). Can someone please do that, as several blog readers have already asked for it and thousands more are very interested and will really appreciate such input?

Thanks...

How about oil up almost 3 bucks...Yowza......

DFS selling off (Down another 7% today) like it is CFC.

Anyone know of any reason?

David,
I have not attended the conference but the way I see it it UXG is pure exploration company now. Rob believes that he owns the land with the right geology to find a major gold deposit there but that has not happened yet. He has an excellent team and financial backing for the project but that does not guarantee there is something in the ground. I do appreciate his openness and integrity when it comes to discussing results though.

Thursday BankTank.

Listen for the rumor du jour. Something like Uncle Ben is cutting 6 full basis points, actually paying lenders to borrow from him. :^)

Does anyone here hold or follow (AU) Anglogold? This stock doesn't seem to track the rest of the PM. It often seems to be up or down more than most other PM's. Any insight why this stock doesn't follow the rest of the PM's would be helpful and why it's up on a flat day for most other PM's.

Thanks,
Adam

Erik P,

Thanks for the link. Much appreciated.

onlineaces re CFC

Saw some corporate bond listings this a.m. and CFC had something like a 6 month bond paying over 12%! Don't think there would be buyers but you don't know. The next highest on that list was around 5.2%, with the majority under 5%.

Taking some risk:

Have a position in ultrashrt MZZ, first time since last May.

Shorted transport HTLD @ 13.75

Sold some BAC Dec 45 puts.

KOG down 33% KODIAK dropping like a rock....

Any recommendation on the best bank to work with in the Bahamas on opening an account now with purchasing property in mind for down the road?

David -

Most commentary from the Gold Show relating to UXG has been about McEwan himself. But, I think he's the key to UXG. He's such a smart and determined guy, that he'll do anything he can to make UXG a success.

Of course, there's a risk of nothing there, but the land is in a sweet spot for big gold deposits.

How many other juniors are led by a proven, world-class entrepreneur with a billion of his own dollars (much of them unrealized, in UXG) behind him? led by a guy who has shown major smarts, cojones, and integrity in his career?

And now that he's shaven off his mustache, middle America will LOVE him when starts appearing on CNBC and FOX biz news ! LOL

BTW, I currently have no position in UXG, but hope buy to when it dips with the expected gold pullback.

Seamus

Can you provide a quick link to the CFC bond info you mention?

I understand selling calls, as long as you are long the stock (in case they get called away on a run going up on the stock). But how does that work with selling a Put? Do you have a short position in BAC to protect you from a free falling BAC stock price?

Thanks in advance...I also have a very large short on MER and was thinking that maybe selling put would reduce my costs on that position.

RE: Abitibi

BB,

I followed Abitibi (not recently, though), and thought could be a buy for a patient investor willing to wait.

Were supposed to merge with Bowater. Does anyone have any idea how to determine which one to buy if you've decided you want to buy the company? Is it as simple as saying company A will receive X number of shares of company B, and B will get Y shares of company A, do a little math and compare their relative prices in the market? Any other factors? Presumbaly, you get the same company if you buy either Bowater or Abitibi, but they are selling at different prices so one should be a better deal. Or is the market usually efficient in pricing? Any thoughts from the Cara community?

More cynical ranting (must be the weather...). After miss vs. expectations, early momentum dip and concerted sell-off, POT CEO found useful to share new material information during CC that was not in earnings release (no new shipment due to competitor's mine flood). Naturally, stock exploded upward overrunning short stops (incl. mine). It starts looking funny when most momentum leaders generate some 15%+ intra-day range (some full up ala AAPL, some down ala CMI, some up+down AMZN/POT). What to make of it?

In the meantime, market indices recover from day lows with oil rallying above $90/bbl. Oh well

JML

MAC/Leopard OS mightily impressed the NYTimes, esp. its ease of backing up, no registration needed, low memory requirements, and general fun:

http://tinyurl.com/37dukx

Jock...

UXG gets any lower it will be FREE! :-)

This from a guy who has a UXG basis of 5.25 [ouch!]

MSFT earnings straddle play is very attractive, requires 6.09% move.

C32.5 $0.80 12 $34.48 6.09%
P32.5 $1.18 8 $30.52 -6.09%

Been accumulating a Au/Cu exploration co in BC. The symbols are GWQ.V or GWRRF (pink).

Some data can be found here: http://pooga.com/canroys/viewtopic.php?t=3154

There is much more info on the paid portion of the site. In that data is a statement(paid site) that the current 4 largest holders(>50%) want to sell the assets and that possibly III.TO Imperial Metals is a possibility.

The release of the latest drill core data is imminent and that should be a price driver. Discussions on the site point to a $4-10 possible price. Currently trading at $1.75 ish US.

Does anyone here have knowledge of Imperial or another acquirer in the BC Lac La Hache area?

onlineaces CFC bond info was on the Schwab account site where they show the market availability as well as their inventory. I think you'd have to have access thru your account with Schwab. There are other sites that post bonds, but I don't have my finger on them at this time.

Reference selling puts, Bill has talked about this in the past and this site should have some examples.

Basically, I sold ten 45 Dec expiration puts. Someone paid me for this and the money is added to my account. However, if the 45 price is reached and the buyer exervises their option to sell me the shares at 45, I have to have the money to pay for the shares. My actual cost however is the 45 price minus the amount received for the ten puts. So lets say I received 1.50 per put, which computes to $1500. So my actual purchase price is 43.50.

Now, I have the option to let it expire and bank the money if the shares are not put to me (it stays above the strike price or the price goes up). I can also buy the puts back (to cover) at any time whether at a gain or loss. Of course, the stock could go to 40 and I would still be liable to buy it at 45 if put to me. Or I could buy the puts back at a loss in that instance as the price would be more than the $1.50 paid per put.

Also have some Cara 100 SBUX puts that if put to me will let me in for under $22 a share.

Suggestion: Only do this with stocks you feel comfortable owning at a lower price.

Hope this helps.

LOL! How did you think Angelo was going to pay for all those new amorts (and get his) Bill? Is there a choice?

How many other lenders will need help and how many will fail? Shorting the financials has been the easiest no-brainer ever.

I have been worried we might not see a rate cut, but that has to be balanced with the knowledge that they are about out of hats and rabbits.

David
McEwen was asked spefically about UXG and the reasion you are not getting a specific response is becasue that is what McEwen gave us. He told us that the geologist said they had found what they expected to find, the same as everyone else in the area. He then went on to explain that he is looking for an elephant not the norm, he told us why he bought the property that he and a number of other prowerful players wanted the same property, that the location is such that you can expect to find an elephant. he wants to educate the people working for him to kick it up a notch. In effect no real answer just that he wants the exploration kicked up. He was very vague.

Si02

I like it. MSFT volume now exceeding daily average by 200%.

David
That said, and I own UXG, he and Bill mentioned that more times than not you don't find the big one on the first drill bit, closer to the last drill is more like it. Bill has a story he can share about Hemlo regarding this.

id like to get some thoughts on the MFI indicator,
i know the RSI 7 is a fav for you bill, and after reading about the MFI it seems like a more dynamic version of RSI.

some thougths on the validity of this indicator and if it should be used as a 7 or 14 time frame?

thanks,

I didn't buy KOG after it'ss turnaround and missed out on pirate profits.

Bill... thanks for your input on McEwen [UXG].

From what I read here and else where McEwen is worth the risk.

Thanks Bill,
I'm going to try to study that, looking back at the data.

Speaking of giving parties a way to short metal...

Ted Butler's latest article is a very important glimpse into the outright fraud being carried out on Wall Street every day, in plain sight, and no one in power seems to care very much.

Someone here said they were emailing the authorities charged with protecting investors over yesterday's action. Good luck with that. Read this story and you'll see why it doesn't even matter.

For years Morgan Stanley has had a precious metal storage service. By a large amount, most of the metal was silver, because it's more bulky and harder to store than the other metals.

So Morgan took the money to buy the allocated silver, BOUGHT NOTHING and pocketed the money. Furthermore, they TOOK MONEY IN STORAGE FEES for completely non-existent silver. Repeat: They charged a monthly storage fee for years for something that did not exist!!! They were caught only when a customer, at Butlers suggestion, began asking for the serial numbers of 'his' bars.

After filing a lawsuit, it came out that there was no metal at all.

This is completely and utterly bald-faced fraud. Were you or I to do something similar, we'd get perp-walked right into the courthouse.

Morgan? They get to 'admit no wrongdoing' and pay some some small restitution, a couple million dollars.

To 22,000 people. 22,000 people who were charged for metal and storage that never even existed. 22,000 cases of ongoing monthly fraud.

By the way, if you wonder why precious metal prices have lagged other metals, it's easy to see.

Think of all the demand that went into:

1) metal that was 'purchased' to be stored by Morgan and others;
2)'silver' futures contracts for which no delivery is even possible, (mini's, in particular)
3)ETFS that may or may not have metal;
4)ETFs that admit to being merely 'linked' to metal prices in order to give investors 'exposure' to gold;
5)miners that collude with the Silver User's Association and the gold cartel to keep prices low (those same miners take short positions in the market!) These are gross violations of shareholders trust, shareholders who would, presumably, prefer to see precious metal prices climb.
6) Metal producers who short the market (Englehard was a major short and sat on the NYMEX board, under who's nose this stuff takes place - what about their shareholders?)
7) and on and on. Believe me, I have a list.

Where would the price of silver be if 22,000 well-heeled Morgan investors had actually taken delivery of metal? We'd be looking at $20-25 dollar silver and salivating over it hitting $50 next Spring.

There is so much 'gold' and 'silver' being marketed to investors that have nothing to do with actual gold and silver at all. That's a hell of a lot of dissipation of demand being marketed to suckers, er, excuse me, 'investors' who think they are long gold or silver and who are actually contributing to the short side of the market!

It's so damned crooked. I'm wondering why I don't go into business selling naked calls on gold and silver. I'd have all the big guns on my side.

It's also why I think a fund using our debased dollars and buying real metal and selling _covered_ calls (which I view as legit, as opposed to naked shorting) would be a very profitable enterprise.

OK, I'll stop ranting about that now.

Seamus, that divergence of SLW from SLV and $SILVER is the leverage you get from being long a quality metal producer. That's the one good reason to invest in shares vs metal. But the flip side is, it involves leverage (and risk.) That cuts both ways. That's why I maintain shares are NOT even close to owning metal, in terms if an investment portfolio. Both have a place. But if you go long in any form of these "not-golds" you are just helping to stifle your own investment. I wish more people would realize that.

I hope people check out this article.

This is an important work from a guy who takes a LOT of grief from a lot of people, but occasionally gets it really, really right.

http://news.silverseek.com/TedButler/1193161018.php

"Money for Nothing

By: Theodore Butler

On September 24, a Federal Judge in New York heard final oral arguments in the class-action settlement between Morgan Stanley and 22,000 of their clients involving costs associated with the storage of precious metals. The parties have agreed to settlement terms. Morgan Stanley will pay several million dollars and promises to revise their precious metals storage processes. However, there is no admission of any wrongdoing. Unfortunately, the class-action participants will receive very little and it will be, basically, business as usual as far as Morgan Stanley’s precious metals storage practices are concerned. All that’s left is for a final approval by the judge.

..."

A question on market data.

I ususally use nasdaq.com to find short interest for stocks I own. For whatever reason they have data for stocks on all of the major US exchanges. Usually this data is reported once a month around the 15th (I think it is the second tuesday of the month or something).

But, this past month they reported short interest twice, once in mid-Sept and again at the end of Sept(9/28). Will this data be reported 2x a month from now on?

Thanks in advance.

Seamus, MSFT is up 7.5% after hours, looking good, will have to see tomorrow. The nice thing is that it has plenty of time left and there should be residual value left on the puts, and the stock can come down with the market at some point too.

CHTR down 22% today, hit by multiple fires, real CA fires and analysts with sell recommendations on cable operators.

Good reason NOT to have BP in the Cara 100.

Enronesque conduct by BP traders.

BP to pay big fine; Chicago grand jury indicts 4 ex-traders.

http://tinyurl.com/24yv7s

Si02 . . . MSFT after hours in the mid 35s now up @ 13.4%. Still looking good. Good point re the puts. I was thinking similar with the time till expiration. Thank you for the heads-up!

Billy,

Comments from Brian Shannon regarding short interest:

Nasdaq stocks are now available as of October 15, you can find the individual numbers. Did you notice that the short interest is now reported every two weeks? According to Nasdaq it is to "promote better market transparency". I'm all for that, but if they really want to provide that market transparency it should not take them two weeks to compile the data before they release it. Years ago it may have taken them two weeks to get this information together, but with the speed of computers and the programming skills why would it take two weeks? The short interest numbers will always be at least two weeks old before we get them, that is really unacceptable. The short interest numbers can still help us find potential SHORT SQUEEZE candidates by observing the trends of the short sellers and approximating where their pain levels will be in a stock, but it is always an educated guess and just one more piece of information in the complicated market puzzle.

I just want to say to you guys that this is the most democratic, most beneficial community/use of technology I've yet participated in. I cherish all of you and the ways that all of you, and particularly Bill, have enriched my trading experience and my life. The computer can enslave us and it can set us free, and it's up to us to make sure it's the latter not the former. Now keep those stock tips coming!

Chris

News from the Alberta Premier regarding royalties:

http://tinyurl.com/3dgnwz

in case link doesn't work, here are the highlights:

"New, simplified royalty formulas for conventional oil and natural gas that will operate on sliding scales that are determined by commodity prices and well productivity. The formulas eliminate the need for conventional oil and natural gas tiers and several royalty exemption programs.

A sliding scale will be implemented for oil sands royalty rates ranging from one to nine per cent pre-payout and 25 to 40 per cent post-payout depending on the price of oil.

The province will exercise its existing right to receive “royalty-in-kind” on oil sands projects (i.e. raw bitumen delivered to the Crown-operated Alberta Petroleum Marketing Commission in lieu of cash royalties). Because this bitumen can be sold or used for upgrading or refining, royalty-in-kind can be sold by the province to support value-added, upgrading projects in Alberta.

The province will ensure that eligible expenditures and definitions of oil sands projects (also known as “ring fence” definition) that determine when a project has reached payout are tightly and clearly defined. Environmental “costs of doing business” will continue to be recognized as eligible expenditures.

No grandfathering will be implemented for existing oil sands projects. The government is in discussions with Syncrude and Suncor, whose Crown agreements expire in 2016, to transition to the new oil sands royalty regime.

Substantial legislative, regulatory and systems updates will be introduced before changes become fully effective in January 2009. "

With age comes wisdom. Better still.

PSsst! Pass it on - Shark is hitting the vino again.

:-)

Just kidding.

Go Sox!

Well, I get the dunce cap today. Sold my MSFT ahead of earnings. I'm being overly cautious nowadays - I'm preserving gains, but missing the meat of many moves.

Oh .. and I just bit my tongue.

;(

Bill
I love the real life stories

Jfs

RE: Short

Thanks for the info. I am surprised I have not heard more talk about this change. I have followed some stocks that were heavily shorted and found this information fairly useful.

---------------

I would never recommend airlines, but I just glanced at the Quarterly report for a little stinker i've been holding a tiny position in for years, Frontier Airlines - FRNT.
This $6.70 stock made 0.39c this quarter

I actually have flown this Denver hub airline 15 times or so and think they are awesome. Good customer service, a tv in every seat, nice new aircraft, few delays, no first class bs (personal preference), and a good miles program(2 free flights and counting). If you are headed to CO to ski I would highly recommend it over United/Southwest/American.

N2S,
MSFT is not done.

Microsoft is obsessed with Google, from the top, who despise Google, to the peons at the bottom, who wish they worked there.

And, according to Dvorak, that obsession now includes the share price. Think about it.

If the power of the breakout has anything to do with the length of the consolidation, consider that the price right now just broke out, barely, to a FIVE year high, maybe more (Google Finance charts go back 5 years.)

As much as Apple is gaining a little bit, MSFT dominate so many areas. Halo, with the XBox picking up steam, their VMWare-like product is getting a huge push (I have a mandatory information session I have to attend on virtualizing our email servers next week - IT managers are, to a man, moving as much as they can to virtual servers. That is _their_ new obsession.)

I am also reviewing next week their new Mobile Device solution, on and on. Of course, Windows and Office still dominate the data center and the desktop, blah blah blah, on and on.

Hey, I don't love Windows or this company, personally. But if I had any safe/growth money to put somewhere, this breakout tells me that MSFT may no longer be the stagnant stock it has been for years.

Oh yeah, 700,000 call contracts, expiring in January, just went in the money (27.50 - 32 strike, with 150K more at 35.) Check my math, but isn't that 70,000,000 shares worth? I'm no expert here, but if even a fraction of those options actually get called away, I imagine it would be a nice boost.

Just the random thoughts from some guy in the Internet, for what they're worth.

I'm starting to think there will be an airline style bailout for CFC and maybe WM. Remember when AMR was down to 1.50. Everyone thought bankrupcy was imminent but then it was decided that AMR and other major airlines were too big and important to fail and within a year maybe less it was at 16 again. That was the biggest trade I ever missed out on because I owned 1000 shares of it that I bought around 1.75 and sold at about 2.45 thinking I was the genius of all time. Boy did I get proven wrong. That trade gets me really thinking about CFC. If it goes much lower, like below 7.50 i may have to jump.

Rob.

Finger Lakes

I here ya on those ones you missed. Similar to Air Canada up here in the north a couple of years ago, they had problems but have come back and are still around, currently trading in the $16 range, a few years ago they got down below $1. But that’s not the whole story.

I owned them back around $2 and made a few percent then got out when things started to look iffy. They went thru a restructuring, old bond holders got a bit, new bond holders got the company, old share holders usually get nothing but in this case for every 11980 shares (I think) you got 1 share of the new company, I think just to avoid the bad press of stating old share holders got nothing but wallpaper. Note if you had less than the magic 11980 shares your got nothing and the new shares opened for trading around $20 in late 2006.

So for the old share holders, with a 11980 :1 share exchange and an opening price in the $20 range and current price in the $16 range, its pretty well a total loss in my books, at least $10,000 to now $16.

However most people I talk to think they missed out on the big recovery from $1 to $16, they just don't know the whole story. They think because it is still called Air Canada it is obviously the same stock. Not even close, they should be force to change the company name not just a suffix on the stock symbol.

Don't know how the AMR story unfolded, I didn't follow that one.

GEOLOGIX – GIX VALUATION

This link provides my valuation of GIX. Use the spreadsheet to make your own assumptions that you are comfortable with. Note that I did an evaluation with the very conservative 200 Mt deposit that Geologix have published on the presentation on their website. An upside case of 500 Mt as suggested by others and a blue sky potential deposit of 850 Mt deposit which is the sum of all the targets for the zones as shown in the Geologix presentation.

http://www.mediafire.com/?5dtgomzylff

On Wednesday GIX released some new results. While they look good, I don’t think too many people understand just how good they are. The results continue to have huge intersections of low grades indicating a large bulk tonnage low grade deposit. The average grade looks like it could be 0.5 g/t gold and about 1.5 to 2.5 g/t gold equivalent. What I was looking for though was any evidence of a high grade section close to surface that could be used as a starter pit to generate early cash flow. I did see some evidence of this in earlier results with grades of just over 1 g/t gold.

These latest results include 68 m from surface at 3.52 g/t gold and 42 g/t silver for about 4.36 g/t gold equivalent. This is a fantastic intersection and has huge potential to generate early cashflow.

As I wrote last week, GIX have a large backlog of trenching and drilling results to be released over the coming weeks/months. This should continue generating interest and upgrading the deposit. At some stage I would expect them to start talking about defining this high grade zone with the view to generating early cashflow for the project. They could build a small plant to treat this high grade to generate cashflow to reduce financing requirements for a large expansion for the bulk tonnage lower grade mine and mill.

Also with regards to financing, the company may be able to minimize stock dilution by selling off some of its Silver stream like Goldcorp did with Penasquito by selling some of its future silver stream to Silver Wheaton. I notice that one of the GIX directors is Randy Smallwood the Executive VP of Corp Development for Silver Wheaton

GIX are starting to be noticed by Analysts and Agustin is being compared to goldcorp’s Panesquito deposit which Goldcorp have place an NPV of $1.5 billion on it.

• Research Capital have initiated coverage with a speculative buy

http://www.mediafire.com/download.php?3z7bvx9lezv

• Versant Partners have coverage with a Speculative buy with a valuation of $8.55 but a 1 year target of $4.25 due to their perception of 50% risk factor. This is upgraded from $4.25 previously.

http://www.versantpartners.com/pdfFiles/20071025GIX.pdf

• Grandich is saying that GIX is his biggest personal holding etc etc.

• John Kaiser is very bullish. In the public report below he says it GIX could be $10-$20. I have only seen a couple of his reports but he is very very good. I have also been told that he is also usually very conservative.

http://www.kaiserbottomfish.com/s/Trackers.asp?ReportID=194392&_Type=Trackers&_Title=Tracker-2007-05-Understanding-the-quirks-and-upside-potential-of-San-Agusti

And then this more John Kaiser put out another report but you have to be a subscriber to get access to it. It becomes public after 30 days which will be in early November. I am not a subscriber but here is an excerpt that somebody sent me from the stockhouse Bulletin board.

"Bottom-fishers and Spec Value Hunters are hereby warned that Geologix stock may sag this week thanks to accelerated warrant expiry related selling pressure, but the stock should rebound next week as the selling pressure disappears and the market recognizes that this "refinancing" of Geologix without additional dilution will allow the junior to pursue its plans well into the second quarter of 2008. The accelerated warrant exercise news is thus not good news for those who already own Geologix, but for those who do not and were hoping for cheaper prices, the next few days could be the buying window they have been seeking. The purpose of Tracker 2007-13 is to make sure that KBFO members known that a pullback in the price of Geologix is due to a temporary "structural" event rather than a longer term deterioration in the outlook for Geologix and its San Agustin project." I can't display the entire report but you get the idea.

Aussieontop,
love your contributions to the blog, thank you. BUT,
could you (and everyone else) please use TinyURL when posting links, as the long links (eg kaiserbottomfish above) mean I have to do horizontal scrolling for the whole blog). If someone has found a way around this - please enlighten, I'm using Firefox. I have TinyURL on my Bookmarks Toolbar, so its very fast to use.

cyderman

https://addons.mozilla.org/en-US/firefox/addon/2547

add this to your firefox, problem solved.

Any other TA guys having trouble these last few months, I know I am. Finding it very difficult to put a read on many of the charts form a TA point of view.

Breaking thru resistance or running into resistance, at this point it just a matter of your personal bias and which currency you choose to view the chart in. As an example here is a chart of Goldcorp US vs. Goldcorp Canada, which one would you base your TA on and thus is the other one wrong.

http://tinyurl.com/yocdf8

Its getting very crazy, I'm in Canada and invest world wide, so lately just watching the charts is not enough, I continually have to check to see if I have really made any money when I bring it back to the point of origin.

I see this mostly in stocks tied closely to commodities which are priced in USD and fixed daily on the world market. I'm sure it will happen in other areas just there is currently product in the pipeline which will have to be purged before prices are reset in line with world exchange rates.

Things are just more challenging now and have to find new ways to deal with them. In the old days charts had price and time, price was the variable and time was a fixed unit. Now we have price (dollars per share) and time (the same), but now both price and dollars are variables.

Sort of like trying to figure out how fast / or slow you're going when somebody keeps changing the calibration on your speedometer. And you can't even time the distance between the mile markers because they are no longer a mile apart, now plus or minus and changing erratically.

Just venting a bit in these changing times, I will eventually find my way.

Rob d

Thankyou Rob, I've been plagued with that long URL problem for some time. As soon as there is one long URL the entire discourse page defaults to that word length, very difficult to read scrolling back and forth for each line. I always thought it was a problem on the server not limiting the line length but now I have a local fix and it worked in 3 seconds. My "Mr Softy" IE seems to handle it OK but it word wraps at 1/2 a screen, but I prefer to use Firefox 99% of the time with the full screen width, so I'm glad to have this fix.

Bill is there a place we could set up a FAQ section to keep these types of fixes for all users to access. IE how to post, how to use tiny URLs, how to sign up for Type Key (now that’s a story), how to link, how to paste, what you can paste, FireFox link wrap fix, etc etc.

Quasi

Quasi,
The AMR story went a little different. That's why I'm wondering about CFC.
In early 2003 most people thought AMR and a few others were headed for bankruptcy. In late April of 2003, (AMR was at 1.45) Congress passed an airline bailout attached to a war funding bill worth nearly 3 billion dollars. By July AMR was at 10. By November it hit 15. If I would have held it for those six months instead of selling in early May I would have made 10X my investment. That's real money and that's why we really need to watch these major lenders and banks as everything shakes out because some will be forced to declare bankruptcy but others will be bailed out. I don't know if this has anything to do with it but the AMR executives were being heavily criticized at the time for extremely excessive pay and pension packages. Maybe they used a lot of that money to buy "favorable treatment" from government.

Rob.

Post from 10:44PM

Sorry seems Stockcharts doesn't like the link thru tiny URL to my snapcharts file, so heres a direct link that should work. (however Mr. Softy and the other programmers are always trying to anticipate what I'm trying to do and do it for me, but most of the time they just get it wrong).

GoldCorp US vs. GoldCorp Canada

http://stockcharts.com/snapshots/120474845.png

eom

Rob d

I want to add my thanks for providing a simple solution to the long line problem in firefox. Your add-on works great. Thanks Again.

Finger Lakes,

Good point, I agree there could very well be some bailouts, I don't like it but that’s just what the gov historically does.

Personally I feel if you want to start a banana farm in Alaska or a Ski resort in Florida you should be on your own. Historically if you owe $100K they will come and take your house and your car, but if you owe $1Mil they will let you keep the mansion, BMW and will loan you more money to make the payments.

I went thru it in the 80's here in Canada, I bought my first house at 10% mortgage, well within my means, then the rate went to 18%+ and ended up back at 12% when I had to renew. But the people leveraged on the edge and about to loose everything at 18% got all kinds of special treatment, none of which was available to us conservative guys in the middle, kind of ticked me off.

Anyway I agree it will probably go down that way, corporations and individuals who made very bad decisions will get bailed out by the gov and the conservative guys in the middle (the general public) will pay for it in the end.
eom

775/oz.

Where it stops, nobody knows.

And somehow silver is still below 14.

Crazy.

New Poster Testing -- great site!

$666 - $777 - $888 - $999?

Long time reader, first time poster here.

This is a great site. Bill I love your work here and I enjoy reading comments from the members of this community.

I'm from Slovenia so you will have to bare with me regarding my not so perfect english.

Till next time...

ALOHA !!

ON RISK AND DEMOCRACY
Thanks to the FED and the US government the concept of "risk" has been totally subverted and locked away in a deep dark closet somewhere in the bowels of the US federal Reserve Bank building in NYC. When you continually manipulate markets and bailout all the criminal elements then you turn the concept of "risk" in the minds of CNBC investors into a "fluffy brown puppy" ... where the financial CEO gene pool has been stunted to the level of "hillbilly" inbreeding ... "Bubbas-Gone-Wild"! Oil is at $92USD and the Iraq War is raging on for at least another five years since even if the Dems get in there will be a 95% chance they will follow in the footsteps of Bush. More debt means more money supply and next year baby-boomers start to retire in droves. In fact they just announced the very first one retired last week! It was announced with great fanfare as if someone won the lottery! Like a pyramid scheme the first ones in are the winners! That will mean more money supply growth as tax revenues shrink and welfare checks increase. Inflation is alive and well globally, but especially thriving in the USA. Rising costs are everywhere in the real world. The US government credit rating is still at AAA as the US Dollar turns into the US Peso. In fact I refuse any longer to call the US Dollar a "dollar" ... it is more a "peso"! It is being controlled by fourth rate leadership as one would find in a corrupt Third World dictator. If you think of the "US Peso" as the stock price for the corporation USA, then if you subscribe to Bill's formula for investing about buying the "jockey", I would equate our current "jockey" on the level of Ken Lay(ex-dead Enron CEO fraudmeister). You could also compare the current US Congress to the geologists for Bre-X! These guys would lie about anything to save their own hides! What exactly would Wall Street execs lie about to save their bonuses? GAAP accounting ... whose company's financials aren't looking more like Swiss cheese these days? So as we pile up a huge mountain of debt laden manure the collective American perception of "risk" in markets and geopolitical events that run the US Peso is "Bing-g-g-g"(to be said Monty Python style)... vapor! The average American way of coping financially is to "pay the bills until you can't" ... which is a direct theft of the US government play book! Everything "works" until it doesn't! And what happens when we get to the "doesn't" stage? Well, thats when you see angry mobs looking for a scapegoat instead of looking in the mirror! There would then be a last bailout of the "have-nots" by the US Taxpayer ... the true lender of last resort! In the end the people who took prudent action many years prior and who have been responsible and productive taxpaying citizens for their entire life will be made to look like the villains and be labeled as unpatriotic. For after all that is what Democracy is once it is fully distilled into its purest form essentially just ... MOB RULE! You get what the mob votes for ...

ON GLD AND SLV
Hear Bill's warning loud and clear ... If there is any real gold and silver left in these scams it will surely be stolen, oops I meant to say "borrowed", to support POG and POS price supression schemes. Like the US Social Security Trust Fund all investors will be left with is IOUs ... payable in US Pesos! If you understand US money is actually just an "IOU" then you will understand the value of actual gold and silver in your hand and not in the hands of Wall Street. I mean ... I equate GLD and SLV ETFs as silly as a CAR ETF. How many of you would buy a car through an ETF? What good is paying for a car you can't drive? The Wall Street CEO gets to drive your "bought and paid for" car but you don't! In fact you never ever get to even look at your car much less beep the horn! In the end the Wall Street CEO gets in your car and then runs you over in it as he yells back at your limp corpse ... "See ya sucker!!" Your best bet is to trade up to the real deal ...

ON ALL BOATS
The day will come when all junior explorers "boats" will float. The key is to be in them when that day comes. I recall in the heady days of dotcoms and the George Gilder(is he still alive?)era of fiber optics. I went to my Morgan Stanley broker and asked him to do a search of all companies with words "fiber" or "optics" in it. He came back with a list of about 20 companies that included many of the 10 and 20 baggers of the era. That was when "all boats were rising". It was a brief window in time but those "windows" count BIG TIME in terms of one's financial future. You just have to get in the boat at the right time and get out at the right time! Profit counts! I can imagine a time in the not too distant future when many investors will ask their brokers to do a search of all companies with the word "Gold" in it! That will be the day of total "confidence" collapse in the US Peso and the global "Pesos"!

Anyone looking at Brunswick (BC) earnings tomorrow? Compare the chart over the last couple of years to 3M, where the company's former CEO went a couple of years ago, and another was promoted from within. Seems to have follow the same relative path until recently... then it dropped off a cliff... or started sinking.

http://tinyurl.com/2zwvwm

They are consolidating plants and laying off manufacturing staff after a spate of acquisitions. Lots job postings for Brunswick though... mainly in accounting & legal.

http://tinyurl.com/2jls4v