Cara 100 RSI values: http://www.tradersquest.de/cara100.html

Bill/All,

Looks like CFC is up over 20% in premarket today.

CALABASAS, Calif. (AP) -- Countrywide Financial Corp., the nation's largest mortgage lender, said Friday it swung to a loss of more than $1 billion in the third quarter on to rising loan-loss provisions, writedowns and dwindling origination volume.

But the company insisted it will be profitable in this quarter and in 2008, as it restructures its business to take advantage of the current market.

Countrywide posted a third-quarter loss of $1.2 billion, or $2.85 per share, compared with earnings of $647.6 million, or $1.03 per share, during the same quarter a year ago.

Analysts polled by Thomson Financial, on average, forecast a loss of $1.28 per share on revenue of $231.9 million for the quarter.

Countrywide's total revenue fell to a loss of $50 million in the third quarter, on the impact of impairments and charges, from $2.82 billion during the same period a year ago.

Origination volume fell to $96 billion, from $118 billion as Countrywide shifted its product mix to more traditional loans.

Countrywide ramped up its loan-loss reserves to fight rising delinquencies and defaults, especially among subprime mortgages given to customers with poor credit history. Countrywide reserved $934 million for bad loans in the third quarter, up from $38 million held during the same quarter last year.

Countrywide was also forced to take writedowns of $690 million in the third quarter as investors shied away from purchasing subprime mortgages and other nontraditional loans because of their rising delinquencies and defaults.

Most bank stock are up almost 2% in premarket...

but the volume is rather low (<75,000), so these prices don't really indicate the market yet...

That's weird...Today's Hilary Clinton's birthday too. It's strange the people who share your birthday. For example, my birthday is shared by Michael Jackson, and I promise I'm not weird. Really, I promise.

HAPPY BIRTHDAY WILL !!!!!!!!!!!!!!!!

Bill,

Instead of paying some outrageous fortune for MS Office, consider downloading the absolutely free and very competent, open source Open Office suite. It does everything MS Office does and in a more easily learned way. I use it and it works great.
http://www.openoffice.org/

Toby

Hulbert's latest sentiment update:

http://tinyurl.com/2l4sg2

excerpt: "As of Thursday's close, the HSNSI stood at just 7.7%. In other words, the average short-term market timing newsletter is now almost completely out of the stock market.
What I find particularly noteworthy is that this most recent level for the HSNSI is nearly 26 percentage points lower than where this sentiment index stood at last Friday's close. That was the day in which the Dow suffered a mini crash, falling 367 points."

more than anything else, i'm a short-term sentiment trader, so this has me a little concerned (holding QID)...

Alberta Royalities
One more indication that you can't trust politicians, it's my view everytime they stick there nose in business they screw it up. Surely they could have made some long term assumations 5 years ago when oil was trading lower, put royaltites in place at much higher prices allowing an industry to correctly predict the cost of doing business going forward.

Sharkie,,,do you still own uxg??

It had a "weird" down move yesterday with gold moving higher.

Does anyone think McEwen may be chasing fools gold here.

I'm still holding shares from $5.50.

Are there any thoughts that the powers that be are holding it back while accumulating shares??

tia,
Dab

gold on a tear overnight,
USD just dipped below 77,

i wonder if a rate cut is still in the cards if the USD is making all time lows and oil/gold making highs just days before the announcement.... or is gold simply anticipating the cut...

im concerned that bullion has moved up to new highs the past few weeks while the shares have not followed in kind. when this divergence has happpened in favour of the metal vs. shares, what has been the usual outcome?

It looks like a good time to get QID on the cheap, if you're a believer we gonna crap out in the mkts.

QID at 35.35 in premkt

Bill, could this be the melt up????

I have one last question for the board on UXG.

UXG seems to be trading on the latest drill results news.

Does UXG have nothing else other than this latest project??

OR,,,is this just the fluff coming out of the speculation in the latest project??

Dab

QID: Looks like we might be able to get it at the 52 wk low....if we dare.

I'm wondering if we get the usual MSFT lull, as it usually does well after earnings and then craps out. Seems like it has some TA going for a breakout, but it IS MSFT.

2nd, I'm feeling like I did in July/August, real iffy. Greed says "chase", brain says "are you kidding me?".

Bill,

How much more pumping can go on before we see some rationale coming into this market?

This is unreal...

dabonenose,

http://www.usgold.com/about/

US Gold is a pure exploration play on their current land holdings in Nevada... emphases on the jockey and his skills.

Qick question:

When I go to pull up Bill's graphs for

CBJ SSRI SIL NG KRY UXG GRZ TSE_HRG TSE_GUY TSE_AGI

using the link

http://tinyurl.com/2oqn3r

I only get graphs for CBJ & SSRI and not the others. Where as the other links will show graphs for all the companies listed.

Is this due to his recent computer problems or has it always been like this?

Thanks!

This is just weird. The Bank of England warns of risks to the housing and equity markets. Yeah, that's not some 24-year old analyst, it's the BOE.

http://news.independent.co.uk/business/news/article3093833.ece

http://www.forbes.com/markets/feeds/afx/2007/10/25/afx4259770.html

Today, especially this morning, looks like a good opportunity to lighten up. I wish the VIX were a bit lower so I could buy more puts, but I guess I'll just have to dabble.

Cheers,
Erik P

Dab........

I hope this turns out not to be true.........

"Does anyone think McEwen may be chasing fools gold here"

I am heavily weighted at 5.30

Erik, I expect the VIX will come down quite a bit today. Good point about the caution raised by the BOE. Think H. Paulson would do the same? Don't make me laugh.

Also check out the ABX spreads. They are lower than they were in August. And CFC sees blue skies ahead?

What happens to Gold if the Fed holds rates steady? It's moving as if a cut were in the bag, and so is the dollar. But I really don't like the risk-reward here. If I were to buy anything, it would be hedged with covered calls.

And look at oil. Surging again, when it should be heading down.

Dab,

I sold UXG. I shouldn't have bought it yet (at the time I did) and like you guys, I have no idea what's in the ground there, maybe just sand and Jimmy Hoffa. My bet is it goes up but I am much more interested in HMY right now as does VGZ. It's not about the horse or the jockey, it's about trader psychology, and I don't trade stocks, I don't trade companies, I trade human psychology. In a sense I trade people (velez and capra). I like to buy stocks that are going up and I don't care if they make widgets windsurfers or even ugly plastic shoes.

craig- i'd be careful here...

if the "market is us," and we're reduced to trading on spin, technicals and sentiment > did we collectively decide to throw fundamentals out the window? of course not. i think it's more along the lines of: playing in the capital markets = playing a game where the odds are tilted against you, and the "rules" may be changed at any time. if it's a casino and we're all playing poker, who do you trust? ;)

if i were to dispense "responsible" advice, i would have to advocate staying out right now (or selling what you have left into yet another selling opportunity). (and bill's system is pretty clear about signals for buying and selling.)

since we've both decided to try gaming the short side, as mentioned above i'm surprised at hulbert's latest reading > for once, i find myself agreeing with the short-timers (who tend to be wrong)...so from a contrarian perspective, i now need to trade against myself ;)

however, rather than rush judgement, i need to sort out the cross-currents running thru my head > does being on the same page mean increased odds of being right; increased odds of being wrong; will volatility make the side you pick irrelevant...i don't know...suspect "irrelevant" might be the right "choice," and trading sides (ultra-short to ultra-long > back and forth) just might make you a lot of money ;)...good luck....

"rush to judgement.."

My quick thoughts on UXG are that it's similar to KRY in holding strategy and emotions it arouses from people. In my opinion, it's a non-tradeable position. It does what it does. With KRY, you are waiting for one data point... the elusive permit. With UXG, your also waiting for one data point, the one drill result that shows the mother lode. Until anyone has each data point for the respective stocks, you can't quantify what a holding in the company is worth. BTW, I do not hold KRY, but I do hold UXG. I hold UXG because I think it's worth a small portion of my portfolio to invest my money with a man who has proven himself in the past... time and time again. From my research, he's looking in the right place.

craig- addendum: often find the "hardest" thing for me to do (given the cross-currents at any given moment) is the "right" thing to do...having said that, then gun to head (as todd harrison likes to say), i'd be buying QID...just don't pull the trigger if i'm wrong ;)

CFC- massive short-covering...

Hmmm. If short termers are out, then that is really neutral, neither long or short.

The noise is to the upside, but we have to ask....does man live on Halo alone?

Does anyone believe Angelo is turning a profit this Q? Me thinks not so likely.

Sooooo, we're still in "game the fed" mode. I'm thinking of setting up all my trades either way, wait for the fed to announce, see where the dust settles and start hitting buttons.

I felt perfectly in time with this market until this week. Not bad advice to stand aside.

Bill,

Just get the trial versions of Office.. they should do you over for 180 days.

Today is Brunswick day for me. :)

if "history repeats, but it doesn't rhyme," what if it gets played out a week later in october of 2007...

"If short termers are out, then that is really neutral, neither long or short."

you're right..that gives me a little more confidence ')...guess i was reacting more to the unexpectedly low exposure reported + the % drop in exposure in the past week...

And BOS would have been right! Lead on BOS.
Buying would have put you in a nickle above the 52 wk low. Amazing. Did I? No. No harm no foul, so far.

Since USD is done and oil is whacky, DUG is nearing it's low. This has to revert sooner or later.

MSFT earnings straddle returning +108.11% at 9:45AM

Calls bought at .80, sold at 3.20
Puts bought at 1.18, valued at 0.09

Puts are probably worth keeping at this price.

I watched every interview with Mr. Mcewen on BNN prior to and after his departure from Goldcorp. Sad to say, shareholders who held one of the richest gold mines could not get enough of copper.

I believe in hindsight that people will see Mr. Mcewen as being right, that you do not dilute your gold production with base metals. Its unfortunate to see that his desire to trump Goldcorp in a bid for a commuppance has resulted in his basing his whole personality and success on the UXG bid.

Not only that, I had bought into RMX long prior to his investment in that company, out of the selfsame desire to invest in a company with exposure to base metals. I sold the investment in Africo and Paragon due to losses on RMX. I didn't lose any money, but now feel fortunate to be out of all. I missed Mr. Mcewen's white knight investment in RMX, which would have salvaged my investment strategy.

But overall, my lesson was not to dilute my intentions to invest in gold with investments in base metals. See them as seperate, because one day, metals prices will underperform gold. Base metals plays are still getting a great deal of attention, though that will change.

HI All

Just remember...If the market is going to fall...Worst case senario for the Bears...
Huge Short Squeeze on a Friday...
And then Market gets taken apart Sunday Night before we can even react...

This market sure looks like Distribution to me...Others could say accumulation and selling by the weak hands...

I am sticking with Bill..Sell INTO STRENGTH

craig- nice move on TM this morning..

MSFT- happy to see this stock finally make a move...it's been dead money for 5 years...

MCO is testing its 52 wk low

Sorry I forgot to mention VGZ (up 5.6%) is now up against the bottom of the 200 day, should be resistance.

CONGRATULATIONS KAIMU ANOORAQ time to lighten up you only made 66 percent in 2 weeks. Tell us what's so great about this stellar performer.

hello 2nd,

in case you're wondering, I did not sell QID. Am in UNG too but never got back into DUG......yet.

have a good one.Thanks for encourage.

FT front page story on $5.56B, 20% stake in Standard Bank (Africa's largest) taken by Industrial and Commerce Bank of China. Advised by Goldman Sachs!

It's the largest foreign investment by a Chinese Bank, and the largest foreign direct investment in South Africa since the end of apartheid.

2nd,
Seems to be a divergence between the $comp and QID. QID sure got a big push from 34.94 back to 35.55 or so while the comp was going up concurrently.

The shorts are still keen on a deal.

I was buying TM with a 104 handle so I'm a happy camper today.

CFC loses 1.2 billion for the quarter. Stock up 16%. The company says it expects to turn a profit in the fourth quarter and in 2008.

Maybe. Maybe I'll be appointed Emperor of Japan in the fourth quarter too.

I better sell my SKF. NOT!

shark_attack,

I was hoping no one would mention the NAME.......

I had lots of it, won't say how much cause is too painful, @ $ 1.45 until May when I sold for a buck or so gain.

oh well, I gots "sabotage issues, what can I say..... live and learn.

Craig,
Oil is far, far from wacky. I'd argue it is getting more SANE every day.

Here's my evidence, explaining in one simple chart why oil is likely not coming back down in any significant way.

http://tinyurl.com/yqw7ep

This is a 2 year chart of WTIC. The overlay is an INVERSE plot of the DX.

I'll let the pictures do the talking this time.

MikeNYC,

Great chart, I didn't realize there was a $ONE symbol in Stockcharts--thanks for that! I'd imagine a similar chart comparing the dollar with the $SPX from the August spike low in the $SPX would show similarly--i.e. in $US dollar terms there really hasn't been much of a rally.

Cara 100 Micron (MU) looks to have made a buy signal today, for what it's worth. Monthly / Weekly / Daily RSIs all below 30, with the daily this morning breaking up through the 30 mark.

Long MU.

Markets:

Once the yield curve pops its zit in the short term treasuries, then you have about 60 days to set your house in order.

Prices:

If all depends on currency, then I would be very concerned about where prices go if the defacto peg of the dollar to the Yen unwinds, or that the Yuan peg unravels.

So the idea is to watch currencies, more specifically, the £/¥ chart which I believe is showing signs of change in the currency market.

But on the Yen, consider if you will nobody stands to face hyperinflation like the Japanese.

Anyone looking at MU today?

"This market sure looks like Distribution to me"

Agreed, basketguy.

Any technicians in here who can confirm or refute this?

But Mike, Secty Bodman said it's a supply problem.....don't you believe him? LOL!

My concern is we all get on one side of the boat of gold and oil on our sure bet the Fed cuts and USD continues to weaken, and then no cut or a surprise. Not that I see another scenario, but I don't trust the sure outcome with my $$$.

Both Ben and Hank are looking to run over my dogma with their karma.

MikeNYC....

"Here's my evidence, explaining in one simple chart why oil is likely not coming back down in any significant way."

Last night on Fast Money [CNBC] they had the chief economist at Tesoro (TSO)Lynn Westfall about price of oil. If you get the chance check out the video and hear why he says the price will fall back into the $60's range.

http://www.cnbc.com/id/21474044

"Westfall believes crude prices will fall back down to $60 per barrel because, eventually, market fundamentals will replace the anxious speculation that is what’s driving the price now. The hedge funds and financial investors that drive the futures market of oil are artificially inflating the price when they pour so much money into commodities, Westfall said. These investors are also more likely to overreact to news headlines.."

MikeNYC

Agree, great chart helps to see whats really going on. As a Canadian investing in various places I've been forced lately to always convert the charts back to $Cdn just to see where I'm really at.

Doesn't make any sense to realize a 20% gain but when you bring it home and spend it you actually have less than the original capital. For alot of my US investments my breakeven point is basically rising almost the same as the stock price.

I posted this chart late last night on Goldcorp $US vs. Goldcorp $Cdn, same thing just another way of looking at it.

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

Countrywide reports a Q3 $1.2 billion loss and expects to return to profit by Q4? Does anyone - ANYONE - actually believe that? Where has SEC oversight gone? Where are the auditors? I just can't believe that there is any way in this universe ruled by logic that they only had to write down a relatively minimal value of their loan inventory. So what is it then, mark-to-market gaming since there's no true litmus test of what market is on these holdings right now?

I would love to hear the reactions from those on this board after hearing this earnings release.....

Like a few others on the board yesterday, I was compelled for the first time to write the SEC a formal complaint asking for investigations into some of the market manipulation we're seeing.

Unbelievable.

TREND PORTFOLIO

I started a trend portfolio around August 15 using only CARA 100 stocks. I have added some shorts of some Cara 100's as well using 1% max of the portfolio for each short. This week I sold HBC for 3% loss, ABB for 11% gain, MFC for 8% gain, and IMO for 1% gain.
Started with 1 million. Currently up around 10%.

http://tinyurl.com/yoe5j2 - portfolio
http://tinyurl.com/2hd44p - transactions

Current holdings: pg up 10%, AET up 13%, CVX up 3%, DEO up 5%, SU up 10%, VIP up 17%, Dell up 1%, CTSH 5% loss, VCP up 6%, ATVI up 2%, HDB up 11%, IBN up 11%, GS up 3%.

Take Cara 100 stocks. Weed list down to stocks with 22 week and day moving average whose SLOPE is up. Wait for close below 13 day moving average. Wait until you think will close at highest in past 3 days and buy ( thus the trend factor ).
I use average true range to determine price targets and stops.

Constructive criticism is welcome. Thank you for this wonderful website Bill. I am so glad you have put on a happy face!!

Evergreen Solar (ESLR) is up big on high volume. This is a volatile stock, no doubt, and I can't find any news. Of course, the talk is growing louder about alternative energy.

FWIW, I'm long this stock. I also have my eye on ENER, ASTI and HOKU. The latter two are more speculative than ENER.

For you chart watchers, ASTI broke out of a pennant a few days ago.

MacDonald Mines (BMK) looks like it is halted. Fancamp (FNC) has run up as high as 26%. It's now up 16%. Freewest (FWR) and Noront are relatively indecisive.

LOOK OUT!

Moody's just hit a bunch of SENIOR tranches (not the ABX-traded ones, the ones ABOVE that) on a number of CDO deals.

This is going to result in capital calls on the insurers and means we are at risk of imminent "Acceleration Events" in CDO land.

What are those? They cut off coupon payments to ALL BUT THE SENIOR TRANCHES.

This makes ALL of the subordinate tranches basically worthless up to the AAAs, and will hit the AAAs for up to 50% of their value immediately (coupon x remaining time = instant haircut)

The result of this will be CATASTROPHIC to pension funds and anyone else (money markets, etc) that hold this paper.

THIS IS THE REAL DEAL, and it is being mostly ignored so far!

This isn't a falling knife - its a falling PIANO!

Don't be under it!

It's not just Halo 3.

This is a company with 50 billion dollar/year revenue that just reported a 27% increase in revenue, YoY. Were it any other company but one that everyone seems to hate, it would have already passed 40.

Example: RIO reported a 9.9% YoY increase in revenue and a decent but not huge gain in earnings, and the the thing really popped. Hey, who doesn't love RIO? (Long RIO and doing great, BTW. I love it, too.)

The real question is why did this move, which is far from over, take so long to happen? Because everyone hates Microsoft. Except every IT purchaser who buys their products and fills their data centers with MS Server and desktops with Office version whatever, a gazillion palmtop users who run Windows Mobile, ten zillion XBOX purchasers, and on and on. Actually, most of those people hate MS, too. But they keep on buying and buying.

These products have been selling, are selling and will continue to sell. Lots.

There are also a lot of option writers who are about to get creamed. With MSFT locked in a five year or more channel, those things were like easy money. Uh oh. Not any more. As I said the other day, 700,000 call contracts just went ITM. If it hits 40, that's another 100,000. Those guys are getting eaten alive. And that's just JANUARY!

OK, I just did the math. From 35 down, there are 1,219,995 ITM call contracts for January expiry. Ouch! Let's see, 1,219,995 option contracts for 100 shares each is 121,999,500 shares. OK. Let's say each share is 35. That's $4,269,982,500 worth of shares that SOMEONE has to make good on, in cash or shares.

Merry Christmas!!!

Nope. This move is real, though, of course not like the mining lottery tickets everyone wants to find or the hot base metal producers, etc.

Perspective - a 300 Billion dollar company just increased its market cap 21% in one month, 18% in five days. I think it's time to take this move seriously, no?

KRY at 3.0

what the HECK is happening in KRY?

KRY - 2 million shares in last 20 mins

http://www.vheadline.com/readnews.asp?id=76553

Bill,

bdtobias has a good point about OpenOffice. I've used it for over 3 years and never had a problem with Excel or Word files, either importing or exporting. My daughter started using it about a year ago. All her papers at Western Michigan University had to be "handed in" in either the Word or Excel formats. Her profs never knew she had exported them from OpenOffice. I highly recommend it.

TORONTO, ONTARIO--(Marketwire - Oct. 26, 2007) - MacDonald Mines Exploration Ltd. (the "Company")(TSX VENTURE:BMK) proposes to complete a brokered private placement, with IBK Capital Corp. ("IBK") acting as agent, for gross proceeds of $10,000,000, such offering to be completed through the sale of 25,000,000 units of the Company (the "Offering"). A total of 15,625,000 units of the Company will be sold on a "hard dollar" basis (the "Hard Units") at a price of $0.40 per Hard Unit for gross proceeds of $6,250,000. A further 9,375,000 units of the Company will be sold on a flow-through basis (the "FT Units") at price of $0.40 per FT Unit for gross proceeds of $3,750,000. Each Hard Unit will consist of one common share and one common share purchase warrant (the "Hard Warrants").

BMK is currently trdaing at 86 cents.

Good grief. Volume in KRY just exploded. What a yo-yo. In every sense of the word.

holdenll -

Interesting. Strategy questions:

- why would you ever short a Cara100? Isn't it better to short lousy companies rather than excellent ones? or at least to short an index (full of good and bad managements) rather than a Cara100?

- do you see no role for RSI, or other price oscillator in your strategy?

The essence of Bill's trading strategy for Cara100's is using RSI to trade in and out on longer-term relative price extremes of top quality companies.

Have you tested your trend-following approach versus Bill's approach? I imagine yours leads to much more frequent trading.

Thanks in advance.

Meant to post with my link, that's all that I can find regarding KRY.

Meant to post with my link, that's all that I can find regarding KRY.

How is that news bit posted by Hoosier causing a BUMP in KRY prices?

Also, this PM miners rally is getting long in the tooth. How far can this go before things turn sour? RSI-7 Weekly of many of the good miners are now in the 70 range.

Genesis -

Where did you find the information on the Moody's downgrades?

Jock,
Why wouldn't you sell on the RSI alert and then short? Even quality co's go through down cycles which is what the RSI system is for.

Example: When BC was selling boats and balls hand over fist, and the RSI gave a sell signal, wasn't that also a short signal to some traders?

On the BC call... apparently they have a lot of big boats in their backyard inventory... lol.

Not too many surprises here.

Looking ahead, they see a bad 2008, but new product demand is great.

Starting to feel kind of bad for the dollar. Should say feel bad for U.S. and the kind of repurcussions this will have, or is having. Hard to believe we're getting ready to throw more billions at war,--and interest rate cuts seem to be a forgone conclusion. What chapter was this in the Econ 101 book?

number2son -

Could ESLR's move have anything to do with WFR report last night (and 10%+ pop today)?

Bull Hunter/AlanM -

Now that Angelo has seen and called the trough, maybe - just maybe - "our boy" Ben doesn't need to cut rates next week.

JML

P.S. It sure feels like distribution with an ever shrinking leadership and increasingly violent moves. But I have been burned by the Fed and the market's reaction twice recently. So I will become more bearish (as opposed to apathetic) with a breakdown below 1,490 (and successful retest of this new resistance) on HEAVY volume.

So what was that, another virtual permit?

So what was that, another virtual permit?

Jock

Yes..it is unthinkable to short a cara100 stock except in certain circumstances. I am trying to use only Cara100 stocks in the portfolio and do not want to introduce shorting using other stocks.

As Bill sometimes says, there is a season for everything...take a look at HOV for the past 2 years. Oct05 it was trading around the mid 40's, Oct07 around 12....Cara 100 but was a good short.

There was once a discussion here about putting together a Cara100 of really nasty stocks with bad management and fundamentals but until that list is put together....

yes..my way does lead to more trading. I just do not have the stomach for buying something just because the RSI is low and turning back above 30.
There are many instances of a purchase dropping an additional 10 20 30% before it comes back and makes a move. I cannot withstand that! Thats just me.

This board seems to be very open minded and I appreciate the soap box.

Doug11,
I posted a link a week or so ago to a chart comparing the S&P rally priced in dollars versus the S&P rally priced in Euros. The S&P rally in euros certainly doesn't look terrible, but it doesn't look anything at all like the great stock market that everyone is screaming about.

Here it is again, at the bottom of the page:

http://www.dailywealth.com/archive/2007/oct/2007_oct_13.asp

AlanM, Countrywide has been playing games with their numbers and has been 'busted' (by the citizen watchers, of course. The Government won't do a damn thing.) I read Michael Shedlock's blog every day and he is all over it. In particular, they were caught playing games with their REO numbers. They are hiding how many properties they actually are stuck with. Blatantly. There will be no Q3, or Q4, profits. If they exist at all the end of 2008, there will be no profits then, either.

Shedlock is relentless and correct in his covering of the housing debacle and it's spread. Another data point: There are more option ARM resets to come in the next couple of years than we have had already. The only bottom I'm seeing is the one on that hottie on the subway this morning.

Isaiah, blaming speculators is popular among those who don't want to see the truth, as explained here by Bill - no one wants wooden nickels. The Chinese are dumping them as fast as possible. Soon everyone else will too. I'm calling my family this weekend to advise putting whatever they have into non-dollar denominated assets, if at all possible. Will they listen? Well, I don't know. But I have to try.

If 'speculators' are responsible for $WTIC heading for 100, then they must be the ones responsible for the buck heading below 75. I don't think so. This is a family blog, so I'll just say "Horse-spittle!"

I'm just praying, like everyone else, that I don't lose my job in the debacle we are going to see in 2008.

Genesis says "This is the real deal" above.

Sinclair printing this on his blog almost daily "This is it!"

No arguments there.

If fed lowers again, won't we see Gold hit 800 as the USD tanks?

KRY Spike at 11:00 AM at both AMEX and TO.

http://finance.yahoo.com/q/bc?s=KRY.TO&t=1d

I think it will see 3 again today. Bought GRZ at 4.71

long HMY Harmony Gold BABY

OUTSTANDING article summarizing current perils:

http://blogs.telegraph.co.uk/business/ambrosevanspritchard/oct07/skyhasfallen.htm

Fazell,

is there any restriction in your view, to holding junior miners, as they are not yet overbought?

Gold:

We are finally in a run-up. I perceive the case as follows. All is currencies now. This the start of a major re-alignment of international currencies. As the Yen goes into its seasonal high, the dollar goes into its seasonal low, and gold for its part, has passed its seasonal correction window.

I would set aside the maudlin acting about calamities that befall us at this stage, because that leaves on vulnerable to fear and greed at the same time.

holdenll - Have you automated your selection process for watch-list placement, or are you doing a visual chart check or using another manual method?

Moody's downgrades here:

http://www.bloomberg.com/apps/news?pid=20601087&sid=a0eLttAJgrzk&refer=home

ABX indices are plunging once again. Can asset fire sales be far off?

"I'm just praying, like everyone else, that I don't lose my job in the debacle we are going to see in 2008.
Genesis says "This is the real deal" above.
Sinclair printing this on his blog almost daily "This is it!"
No arguments there."

It seems like there is a huge disconnect between what is appearing on the surface via infotainment, and what people above are seeing when they peak under the mat. But...I think it's possible the powers that be will cobble something together to avoid catastrophe and limp along to the next day. My working thesis is that they can't contain inflation at this point, though.

CFC Nov 15 puts went as low as 0.05 today, now at 1.30, over 9,000 traded. Somebody made a few millions.

On the lighter side..... from today's Peter Grandich's letter....

Breaking News GATA Bull Gores Gold Cartel:

http://www.youtube.com/watch?v=arpFsrps9k4

[This had to hurt...More than most of my trades!]

Re: holdenll's strategy

performance of major indexes from Aug 15 to now:

http://finance.google.com/finance?cid=13756934

outperforms dow and sp500 easily. lags Naz by 1.5% but much better diversification. check minyanville for stats about the Naz - 50% of total move this year accounted for by 5 or so stocks (AAPL, RIMM GOOG).

might be onto something, but i am wary of messing too much with Bill's system. Jock already stated the benefits of it in a previous post (less trading, more potential for tax advantages b/c longer holding period, etc.)

one of my this morning picks VGZ is up 10%
Another HMY is up 4%

KRY

Wow real news, sounds good

http://biz.yahoo.com/iw/071026/0320635.html

QQQQ-

for every buyer there's a seller...two weeks' of decent earnings and guidance for the sector have gone by, and you would think it's pretty much priced now...

so who's selling...and who's buying...would hazard a guess the funds are buying, the correct distinction here being they are buying with **Other People's Money**, of course... whereas brokers are practicing the fine art of selling (their own accounts) into strength...it's just a matter of time before the media stops slapping today's Buyers on the back and starts patting them on the back for being Bagholders...;)

"priced in by now..."

Comedy Special Tonight 7pm EDT on CNBC.

Don't miss the fun as Larry Kudlow interviews Dick Cheney on BubbleVision. Is this where HB&B conditions investors for the invasion of Iran?

Watching Larry Kudlow is my second favorite thing. My favorite thing is sticking my mouth over the exhaust pipe of a bus. :^)

BillySundance,
Thee's no new news in the press release. We already knew about the recommendation. We need a permit!

Market Wire
11:48 a.m. 10/26/2007

TORONTO, ONTARIO, Oct 26, 2007 (MARKET WIRE via COMTEX) -- Crystallex International Corporation (KRY) reported that the Venezuelan National Assembly's Commission of Economic Development has today published a report following its October 4th, 2007 Las Cristinas hearings. The Commission's Report noted that representatives from the Ministry of the Environment and Natural Resources of Venezuela (MinAmb), the Ministry of Basic Industries and Mining ("MIBAM"), the Corporacion Venezolana de Guayana ("CVG"), and Crystallex testified at the hearings.
A copy of the Commission's Report and an English translation are available on the Crystallex website www.crystallex.com in the "Recent Development" section of the site

Jogy,

You were right, you saw 3 bucks again today.

FranSix

I think that Gold cannot keep rising at this pace because a total collapse of the USD isn't possible. Various economic factors will kick-in globally (such as manufacturing and trade) that will help the USD base.

However, if the fed lowers next week, Gold will go up, and with it, so too will the miners. As usual, the juniors will see the biggest gains, BUT we're no longer sure of a long term bull-market, and so there will be great uncertainty regarding the medium term! Therefore, people may just sell into strength in the short term, because I doubt anyone who is serious is stockpiling gold at this price!

Still, predicting these things is quite tough. We have all of our technical indicators, our economic indicators, etc., but I'm still unsure, and so I have unloaded 75% of all my PM miners. I hold very small positions in SLW, PAAS, WGI, and then the Bullion ETFs (GLD, and SLV). I also have a medium sized position in XGD.

News for banking bears. I just received a phone call from a former staff of mine who works for Citibank (Citigroup in Canada). He wants a work reference because layoffs are being issued in Canada and he has been let go with a nice severance package.

PS: I can't believe KRY is up 20%+ on this news. It's still not a permit or even an indication of a permit. It's just a department in the Venezuelan government saying "We think yada yada"!

News for banking bears. I just received a phone call from a former staff of mine who works for Citibank (Citigroup in Canada). He wants a work reference because layoffs are being issued in Canada and he has been let go with a nice severance package.

2nd ave,
As a young family observer, back from the equivalent of greatest generation reunion (or, last ones standing) Mind boggling to be with such vibrant people whose bodies may fail before too much longer. I chided a ww2 naval captain for being too frugal and not getting a bigger computer screen when he's fast loosing his vision. This individual has made more money in the stock market past few years than he ever made as head of a regional poultry distributor that originated the "butter ball turkey." Money begets money.

As for the here and now, looks like prudent risk averse traders are on the sidelines. My subscription source is. How many snapbacks does this mkt have left? Personally, 1% below all time ytd high and 55% cash. Those who committed to the theme of commodity rich countries and used less sensitive swing trading "tells" would be doing quite well. Drops in the 8% or less range, as the argument goes, should not be sending folks to the sidelines. EZA,s.africa.. for instance, out of favor due to politics and currency, still has leadership. What's noise and what's trajectory continues to be hard to separate, can make the head hurt and a lot of tails get chased.

Any update from Bill on his client services? In the past week, I looked a few times at my account with just a little tweaking...bought more qid and more gdx few days ago. I did like breaking the routine of daily monitoring.

FWIW
'Unacceptably high' costs hit Gold Fields earnings
Africa's second biggest gold producer Gold Fields said earnings fell by almost 19% to R429-million in the September quarter, compared with the June quarter, owing to "unacceptably high" costs and lower production at non South African mines.

http://www.miningweekly.co.za/article.php?a_id=119809

it's the crash-o-matic rally killer.

Isaiah64v4, that was actually Allan Greenspan. He had advised the bull to get an adjustable rate mortgage a few years ago.

rob d,
thanks for the Firefox tip.
I should have simply asked for suggestions. There's a wealth of knowledge here.

Denny Phelps.
LOL .... good comment!

FT reports that the ABX index (of subprime mortgage bonds) has fallen 30% in Oct. FT quotes CrediInsights saying "there could be another shoe to drop".

rob d-

check harrison's column from this am:

http://tinyurl.com/274hml

"Three stocks accounting for 50% of the NDX rally this year? Really."

so maybe i'm mainly short just AAPL, RIMM, and GOOG)...could be good or bad...

Bull Hunter -

I don't think Kudlow will be too tough on Cheney. Wish he would ask him if he still thinks deficits don't matter ! and when iraqis are finally gonna greet us as liberators !

ok i just bought in on the crash.....go kry!!!!!!!!!

Any Seabridge Gold [SA] holders here in the group?

I ran this stock up from 15-35 then sold. Since then I sulked a little,thinking maybe I should of held on longer. But after reading this article today I am thankful I didn't get "hosed".

http://tinyurl.com/2z3wf3

If this article is accruate....then how was the stock able to climb to the heights that it did?

And second... why haven't investors figured this out and stop the charade?

Seasonal low for the buck?

Pretty long season

http://quotes.ino.com/chart/?s=NYBOT_DX&v=dmax

Fazeli,
What will stop the rise in gold? The upcoming 50 basis point Fed cut ;-)

no problem cyderman - i got it from lifehacker.com
sign up for their feed - they usually have a download of the day for good freeware and loads of good firefox extension and tweaks.

There is a wealth of info here. i found the site because Leisa mentioned Kirk Report once, so I added him to my list. Then in his frequent (and excellent) link list there was something at lifehacker. ain't the Net great :) ?

thanks 2nd - that was the one i was looking for.

sharkie, my friend > let me bestow upon you the BOS title...for real...

If ya got em, let em roll.

Fred

I guess seeing is believing with KRY. In this case, the market just wanted some positive reassurance that wheels are still turning - in writing. I was lucky and average down a few shares at 2.55 yesterday and unloaded some in the 3.10 area. Still holding a core at a decent loss.
I think that as the price of gold rises, VZ will really have some internal pressure to monetize these assets.

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

I ended up trying to catch the knife on MCO. I average in a position around $42.50, seems to be working so far. It hit 40.50 earlier, which I think could be the low for awhile. A rate cut should cheer up these ratings firms.

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

Lastly put a small short on CCJ to hedge larger positions in PDN.to and UUU.to. CCJ reports next week and there are some concerns of their Cigar Lake mine schedule being pushed back again. Should lead to some mean reversion before CCJ reports 10/31.

76 handle.

Oh, now it flipped back to 77.009.

I feel better.

ALOHA !!

QID ... 13% of assets are in the Nasdaq 100 and 87% assets are in cash and derivatives(swaps). I have to ask how much of their cash are in other derivatives linked to CDOs? Sounds very risky to me. I can see how they are paying a high dividend since its all tied to derivatives, but is that prudent in an era of instant meltdowns? There is no FDIC on ETFs, so the US Taxpayer will not step in. No taxpayer bailouts for GLD or SLV either should the underlying custodial banks become derivative insolvent.

This looks like another CAR ETF in disquise ...

kaimu- thanks for the info...

ALOHA !!

Shark ... ANOORAQ-ARQ.V/ANO.AMEX Last time I looked Anooraq had some 62mil PPG ounces on tap! Is that all? That would include Rhodium. Seen what Rhodium is trading at these days?

Kaimu,

If there is a serious/tragic market crash I would not expect the QID and many other inverse 2x to be worth anything. I'd assume they are worthless, people know they are taking that risk on when they buy it.

SiO2- no, i didn't know that...would seem as if borrowing securities and short-selling is far safer...cash sits in your account, not theirs...

BillySundance,
I want to see the KRY permit as much as anyone on this board. I'm underwater in KRY and I'm also underwater in VAL which I think a KRY permit will cause to pop. Today I,m trying to get a position nat gas. I've got bids in for Duvernay (DDV), Delphi (DEE), Cyries (CYS) and Galleon (GO.A). I'm hoping to catch them near their daily lows.

Looks like the COT report a couple weeks ago saying there was a lot of commercial short interest in gold should have been disregarded. Perhaps gold is going straight to 1000 without stopping?

For SLV it is JPMorgan Chase.

Here's another interesting ETF fact.

The silver ETF will provide an excellent place for some huge bank to acquire instantly a gigantic pile o' silver.

Any holder of 60% of the SLV can call for it's dissolution and distribution of the metal.

For 140 million ounces, here's my math (kaimu, check me!)

140,000,000 ounces
X 14.oz

= $1,960,000,000 total ETF assets (less fees already deducted - I'm not calculating that.)

.60 of 1,960,000,000

$1,176,000,000

So - for 1.2 billion dollars, an entity can acquire 84 million ounces of silver at one fell swoop, with no waiting for delivery from COMEX, no CFTC or silly 'cornering' accusations that brought down the Hunts, no legal games possible from the shorts (it's right there in the SEC approved prospectus!)

You think that's not on the agenda or has escaped the awareness of the big banks?

Then why was it placed in the prospectus?

I would like to see some fund swoop in and do this before the HB&Bs. It would be awesome.

Anybody know where I can get a billion.two bucks?

RE: Shorting Cara 100 Companies

It seems to me that the time to short is when you have a strong expectation of the price going down. Again, the trade is about the prices--not the companies.

As discussed, this would be outside of the RSI/option-selling system.

ALOHA !!

SiO2 ... I am looking more at the "truth in advertising" aspect of QID. We all know the risk, but did QID owners know they mostly hold cash and derivatives piled on derivatives? Or did they think they were buying well managed put options on various QQQ componenets? How are you shorting the QQQ when all your assets are either in cash or in Nasdaq securities? Where's the "short" position? I saw some measley 4.6% in derivative swaps perhaps that is somehow "shorting" the QQQ under Wall Street rules? I guess you could say the only real "short" is the cash waiting for the NASDAQ to crash and then buy the bottom. What kind of "short" is that? WOW ... how much is George O Foster and Taeyoung Lee(managers)making for putting all the assets in cash? They should rename this ETF "QQQ - MCBSWS" "MOSTLY CASH BUT SOMEDAY WE'LL SHORT" ETF! What a proliferation of ETF CRAP the Wall Street casino owners put out these days! Yet people just lap it up like puppy dogs at a IAMS convention!

With a market crash bad enough to wreck the financial system and blow most banks to smithereens, no one would be left unscathed if you need rely on any inter-personal contacts and exchanges. Even with mounts of gold in my treasure chest, I would feel threatened by the hungry hordes chasing whomever does not share their plight. For most who trade/invest in paper, yes, the counterparty risk exist and will exist till the end of times.

JML

Psychology:
During a serious crash QID would skyrocket at first, but at it's perceived peak, what is the impetus to BUY it from sellers hoping to cash out?

On the other hand, if you short actual shares, when they hit your perceived bottom, there will always be sellers there to buy from to cover, and normal market forces (supply/demand) remain.

UXG is up 6.3% and climbing....

I should of bought more at 4.34 the other day.

On my grave marker it will read as follows....

"He would of... He could of...He should of"

ALOHA !!

Jumble ... Nevermind the nuclear financial bomb! What if QID had to take a $500mil write down like Merrill Lynch did recently on its short term cash/derivative position? The next day the exit doors would not be big enough and the dividend would be 0! Then the class action lawsuits would start flying and the "truth in advertising" issue would be front and center. Refresh my memory how many weeks prior notice did Merrill Lynch give their stockholders for their recent $7bil writedown?

Derivatives are like a Reverse Roulette Wheel in Vegas. Round and round and when your number pops up ... YOU LOSE! There is no winner ...

Fred,

I am moderatley on underwater on KRY (more-so) and VAL.v (less-so). I think both will pay off in time (insert sarcastic KRY joke here), but I have learned the importance of averaging in over time on these exploration plays and trying to do some trading around a core position.

As for natural gas, while I am very knowledgeable about the commodity itself, I don't follow many smaller production plays. Considering the relatively cheap price for NYMEX gas in USD$ terms, I would think it would negatively affect Canadian gas producers when you factor in the recent drop of the USD vs CAD. Won't it be hard to finance projects? I guess that all gets flipped on its head if you think we are near the bottom of the nat gas market and the USD drop.

Kaimu, it is invested in HGMB instruments (Hope to Get Money Back). On the other hand, it is difficult to find something that will not lose nearly all its value in such environment, other than the stuff at the end of the rainbow, which happens to be at a well-known farm in Hawaii. That's what I tell my kids when we see a rainbow in the sky.

The point is I would really not want to hold any QID-like thingy in such scenario (which may not happen).

Isaiah64v4, adopt the surfer's attitude, there's always going to be another wave.

BillySundance,
I find that Canadian mutual funds select their Canadian investments from a very small pool of companies. These mutual funds are mandated to buy Canadian and they can't just hold Encana. So, I believe that the intermediate Canadian natural gas producing companies will recover eventually. It might be in the next three months or it might be in the next three years but, they will be significantly higher in the future.

QID: While it isn't perfect, I'm not giving my profits back! Just sell and trade it for cash before anyone notices it isn't worth *anything*. You know, like chips.

more firepower on the way to control/manipulate commodities:

http://seekingalpha.com/article/51404-proshares-files-for-48-new-commodity-and-currency-etfs?source=d_email

Vista Gold VGZ my this mornings pick up 11%
HMY Harmony Gold my other one up 5%

just went long gsx it's going higher

Correct me if I am wrong, but since UXG was added to the R2K a few months back, I would think that we should see some nice volume just based on managers trying to mimick the R2K index, which is having a nice day afer a big drop over the last few weeks.

RE: QID and QID-like "products.

"SiO2,Kaimu.Craig,Mike,others:

Many thanks for your input. Held off QID re-entry after being stopped out Weds. Glad I did and 'gladder' now. Took a position on MSFT puts this AM; hit my target and sold.

Left some $ on the table, but feel good about the disciplined approach - which I have learned from many contributors to this blog.

I'm actually quite surprised that the powers that be have let good go up like it has be for the Fed meeting. One would think that with gold and oil where they're at, it will be very difficult for the Fed to do what the market wants.

Hoosier

My thinking exactly!

Think Bill’s premonition about the CBs hitting gold may take place soon. Thus, took profits (60%) this afternoon on Jan KGC 17.50 calls. Still retaining WGDFF positions, but out of other PMs.

Si02, ditto---sold the calls this a.m., holding the MSFT puts part of the straddle.

Underwater on ultrashort MZZ. Must be the Bernanke put (FOMC cut next week) holding up the market.

Speaking of ultrashorts, Powershares is coming out next week with a 2x inverse ETF of the FXI (Xinhua China25 index fund). Wonder what kind of derivatives that prospectus will have?

Dumb luck—with a lot of cash on the sideline from recent sales, played the speculative side picking up some KRY a couple of days ago at 2.72. Haven’t been near this since last spring . . . made some decent money off it in the past with some swing trades selling on those roller coaster rumors.

BillySundance,
Do you know anything about the use of NatGas in power plants?

My understanding is that many plants can burn oil OR gas. I've been wondering why we don't see reserves draw down as plants switch from oil to cheaper gas?

Are they not switching? Does it take time? Do you think they will? Is the premise of my question flawed?

Anybody understand how that works?

Typing too fast! good=gold and "be for"=before

Also, any clamp down on the POG Monday or Tuesday before the meeting is going to look very orchestrated.

MikeNYC re Nat gas

Lot of power plants still use coal and will continue (as long as the price is low)as the smokestack "scrubbers" are more effective and getting better. Lots of coal supply in the U.S.

Another area: When nat gas is low, fertilizers do well as nat gas makes up most of their production costs.

Thanks to everyone who responded to my query regarding US Gold yesterday! I did draw some moral support from the positive comments to hold onto my UXG shares, which I started buying on the way down at 6.1!

Incidentally, I am curious what the traders on this blog will say about my trading strategy, which consists of selecting a sector that I believe will go up in the next few years based on the fundamentals (say PM stocks), taking a core position in this sector for about 1/3 of my cash, and then choosing some volatile stocks from that sector (UXG, GROW, KRY, SWC, SLW, CCJ) to trade, buying these stocks in small bunches on the way down and selling them on the way up, making sure that each bunch is sold about 5% higher than it was bought. Then, even if these stocks end up at the same place few years from now, I should make tons of money based on all the fluctuations they go through.

ALOHA !!

For all those here who own ETFs I think it would be prudent to look at your ETF and see what size exposure the ETF has to short term cash and derivatives(swaps, etc). In such a case as QID you expose yourself to further risks outside the prospectus of the ETF and what that ETF was designed to do. Such losses could possibly collapse an ETF and mire its remaining shareholders in class action lawsuits for years. I believe there would be a "trading halt" instigated without notice. That is the risk you run.

I always think about how hard I had to work to make the money I invest with. Remember the cash you guys throw in and out of ETFs and the latest hot stock dujour is "net" not gross ... meaning the US government and your State took their part first! Just think how much harder it will be to replace any losses. Wall Street could care less since they make their commissions and bonuses off OPM(Other Peoples Money) ... yours!

"2x inverse ETF of the FXI.." i knew it was only a matter of time...after reading today's posts, wondering if ETFs will rise and fall within the next 5 years...

kaimu

"Such losses could possibly collapse an ETF"

&@$!%...... Thanks.... I'll sleep like a baby tonight!

QID: Just added some at 35.48

Hoosier -

I don't think that the powers that be need any cover or justification anymore. FOMC blinked in September and traded one box (raising to fight inflation vs. killing the RE market for good) for another (not cutting destroys the credibility they have left with their supporters).

Until the music stops (possibly in the form of an unbelievably bad economic report - inflation out-of-control or negative GDP growth), they have free license to go on one speculative rampage after another.

JML

CFC- how many shorts were there...from 12 to 17 in a day...

Check out the P&F chart of the FXI.

http://tinyurl.com/2xqdo8

2x inverse ETF of the FXI will be the mother of all ultrashort ETFs.

2nd,
According to Shortsqueeze.com there were 79 million short. Too bad we can't get daily update of short positions. I would love to see how much of this is short covering and how much is actual buying. Speaking of craziness anyone see WCG lately. Their headquarters in Tampa got raided Wednesday(no one knows the reason yet). Trade resumed yesterday as they dropped over 60%. Today they are down another 10%. They report earnings on Nov 5th. Risky but there could be big money made on the right side of it.

MikeNYC -

Oil/NG switching is most readily available for marginal (and fairly inefficient) units serving peak load. So even with fuel arbitrage there, you are not looking at tremendous fuel consumption swings. Also, due to air pollution controls, oil has become the alternative fuel to NG as preferred source. Hence the switch would occur from NG into oil first (and back once oil advantage dissipates). On top of the environmental costs (real or permit-based), I believe that switching affects operating/maintenance costs with oil being a more expensive proposition.

JML

LOL - YHOO at a 52-week high with a core business in shambles. For sure now, China is the new .com.

JML

David, I like your strategy, not that I am any judge. May I suggest a sector to consider? Water. Companies like VE and SBS deal with purifying it, supplying it, etc., etc. I think going forward that water is going to very, very important and it's worth seeking out companies that have a lot to do with water (supplying it, cleaning it, moving it, pumping it, etc., etc.)

I'd also check into the electricity infrastructure.

Different subject: A week or two ago someone here asked if those of us who "hung in" with gold would have done so without Bill's encouragement. Well, I can't raise my hand. Gold is helping to "gild" my portfolio, something that would not have happened without Bill's steady encouragement.

Thanks, Bill!

Hey Leisa!

What are you up to today?

WCG now down 26% today. IT's at 32 now. Tuesday it was at 122!!! Talk about crazy.

Jumble,

I understand your assessment. It's my opinion however that the worst thing that can happen to the U.S. economy is for the Fed to disregard inflation and commodity prices, in an attempt to fight Adam Smith and his hand putting pressure on real estate prices. I believe that going down this road of letting oil continue to skyrocket and USD to fall will quickly create MORE problems for the consumer, and by extension the Fed. The Fed's solution for people not being able to pay their mortgages is to have them not able to fill up their gas tank to get to work? That's what we will get if they keep cutting... and I'm not talking about a year into the future, it's here now.

Brunswick day is over... out of BC now.

Hope next week was as fun as today was.

I mean Hope next week will be as fun as today was. :)

Is bass fishing still supposed to be the replacement for golf in business activities?

http://tinyurl.com/3yk4jq

Will more people go bowling in an economic downturn?

http://tinyurl.com/3daoov

MikeNYC

RE: Gas

To the best of my knowledge, the majority of heating oil (distillate fuel) burning power generation is aged infrastructure that is maintained in order to meet grid reliability standards. These plants can run, but are mostly just kept operational to meet these standards. Because of the outdated technology and high fuel costs, these plants do not compete with conventional power plants.

Most of your baseload, everyday use power, is generated by coal and nuclear plants and some combined cycle gas plants. Peak power (plants that may become economical to operate on those winter weeks when everyone is blasting heaters) use natural gas.

Essentially, plants with fuel flexibility are not switching from heating oil to gas b/c they aren't using much heating oil in the first place.

Hoosier -

No arguing with your assessment of the perils facing the Fed and the U.S. customer/economy. Whether the FOMC truly saw the abyss or got sold on the impending doom by the Wall Street merchants, I believe that, based on their actions since the Aug. volte-face, they are terrified of being the accomplices to a systemic collapse that would rival (and probably exceed the Great Depression). Hence their rush to aggressive, preventive action. If the downside risk is a recession induced by a squeezed-out consumer, so be it. As long as the financial institutions under their purview (and neighborhood) have managed to offload the most damaging stuff and insulated themselves from the ultimate bag holders. Most likely, official statistics won't show Main Street pain until well into next year when the U.S. Presidential campaign will enjoy another topic for debate and blame can be parsed into sound bites. New cycle, new recession, new slate for all culprits (Fed, Wall Street) as the power grabbers are initially magnanimous.

JML

I see that gold futures closed at the highest level since 1980. Sounds important.

MikeNYC

Re Electricity production and various fuels

Here is the EIA site which gives quite a detailed view on the subject. Now it is from the US gov so all the data is subject to change without notice.

http://www.eia.doe.gov/cneaf/electricity/epa/epa_sum.html

Snoop around the whole EIA site, its huge and very interesting, at least to myself as I'm into energy.

I remember back in the 1990's when there was a disparity in elect., oil, nat gas that some folks (think end users) put in the ability to switch from one fuel to the other. I suspect if this disparity continues, we'll see the switch flipped to use Nat gas.

MSFT volume: 287Mil shares versus ADV of 68MIL.

$519BIL net negative money flow according to WSJ site and, if I'm reading the numbers correctly, block trades comprised 99% of that.

Pre market 20 Mil shares drove it from 32-36; then 267 Mil traded during the day and it moved from 36 to 35.

Even if the 77Mil shorts all covered (unlikely), appears that institutions were selling into strength big time. Question is: Who is buying? On a Friday? In this market environment?

To Leisa's point, most captive generation at refineries and chemical processing plants has a multi-fuel capability imbedded into the power plant design. This flexibility allows for a selective use of by-products/flue gas in the plant's fuel mix so as to improve the energy efficiency of the refining/chemical process and the environmental permit restrictions.

JML

Shark_attack: Today I was experimenting (successfully) with pivot points--trading in and out of RIMM (buying/selling, selling short/buy to close). I felt a bit like a monkey on the computer!

number2son

RE: ESLR I have followed this stock for about 2 years now, made some good money trading between 13 and 7. Was hoping for investors (or the general public) to get more upbeat about solving some of our energy problems. Didn't happen so in may I bot a largish position in the 09 7.50 LEAPS in May; content to watch and wait. They do good biz in Europe and are ramping up German 'string ribbon' production facility. Europe is simply more environmentally evolved than the US.

IMO, another good solar play is CSIQ. I missed the Sept to Oct bounce up (and down)and the chart is not yet where I would feel comfortable, but longest call is April 08 so I would avoid that for now and - as Bill and others have counseled - wait patiently for the TA stars to align.

Got my Canadian nat gas positions in Galleon (GO.A), Duvernay (DDV) and Cyries (CYS) just before the close. I'm usually early in so, I won't be surprised if there is more downside to these. I just think that the reaction to the Alberta royalty news today was overdone. These are well regarded companies and they were already beaten to pulp. If/when nat gas prices find a life these stocks could be doubles or even triples. I'm prepared to hold them for several years or more.

After many, many questions via email as to my position vis a vis this market, and to the absence of posts on Bill's blog, let me just briefly say that you are very likely seeing the last of my posts here and that I remain as bearish on the long term prospects of this market as ever. By my measures it is some 35-40% overvalued and destined to bring disappointing returns to LT investors. In the short and intermediate term this remains a very difficult and dangerous environment. Further advances cannot be ruled out; neither can substantial declines. But the advance off the lows was not well supported and in my opinion is relying solely on the expectation of further Fed cuts. Since the Fed has been shown to LAG the bond market for this entire recent period that is a redundant and ridiculous proposition, THOUGH TREATED BY TRADERS AS REAL. We shall all see shan't we?

Best wishes to all readers. Good luck and good trading to you.

Best always,

"$519BIL net negative money flow according to WSJ site and, if I'm reading the numbers correctly, block trades comprised 99% of that."

I noted that Genesis made the same observation on yesterday's action -- it was action about a $1.7B net outflow.

This goes straight to the deteriorating market internals that so many have been warning about for awhile.

When will it finally break?

If the action in CFC today is any indication, apparently the bulls still have a lot of juice. At least until the Fed has spoken.

NYSE Eliminates Trading Curbs Dating Back to 1987

http://tinyurl.com/3bp5aj

OK...Now we can crash without any hesitation.

Seamus

Thanks for you answers on puts. Really appreciate taking time to answer my questions so thoroughly.

MarkM
Always good to hear from you from time to time. Thanks. Particularly comforting when your market predictions correspond with my own positions and commitments, thanks doctor.
Hope we're right.

seamus- "Speaking of ultrashorts, Powershares is coming out next week with a 2x inverse ETF of the FXI (Xinhua China25 index fund). Wonder what kind of derivatives that prospectus will have?"

can you direct me to a site with info on this offering?

Volatility puts algo trading under pressure:

http://tinyurl.com/37c44b

Hey onlineaces,
Interesting about NYSE eliminating trading curbs
since 1987. Without these collars in place to stop a fall,things could get ugly in a hurry.

eliminating trading curbs along with the SEC decision to revoke the uptick rule as of July 06, 2007 - things could extremely ugly in downtrends...http://tinyurl.com/ywp2ko

Thanks for the info on the Gas/oil generator switch. I'll check the site out, too, Quasi. You guys are awesome. That explains a lot. I figured at 70, 80, 90/bbl, they'd be buring gas at 6/MMbtu. I guess it's not that simple.

I have a question about charts, and I somehow think the answer is 'No' but...

Does anyone know how a free site that will let me chart temporal spreads on futures? For example, if I want to plot the spread on Nov vs January rice? Stockcharts doesn't have the commodities because of exchange fees. I can put charts of the contracts up on Barchart.com and eyeball it, but that's not exactly right.

Any ideas?

MikeNYC:

try britefutures -> under spreadcharts on left menu:

http://www.britefutures.com/quotes/spreads.aspx

futuresource.com & manfutures.com also have spreadcharts last time I checked...

Faizell, thank you for your comments!

"eliminating trading curbs along with the SEC decision to revoke the uptick rule as of July 06, 2007 - things could extremely ugly in downtrends"

The downtick rule elimination doesn't necessarily mean things always go down. Guess they must have felt sorry for the bears to throw them a few crumbs.

Bill:

"Many of you have written to say that MAC OS X will give me all I need for file management (comparable to Windows). I don't see how, but I'm willing to look. Tomorrow I will buy the Mac for Dummies (David Pogue), which I hear is helpful."

The new Mac OSX is out this evening, and its a file management operating system, though one might need a backup disk.

Sp-a-a-a-ce.... ni-i-i-ice...

http://www.apple.com/ca/macosx/guidedtour/large.html

Bill,

MacOSX, Tiger Edition : The Missing Manual by David Pogue is also worthy, especially if your needs are directed towards the operating system.

I hate to be the one to ask, but MarkM why no more posting here? I would make an effort to appeal to everyone's ego's, but it's Friday night... and I've had too much tonight to make it coherent.

I just want to say that I am most appreciative for opinions here that are contrary to one another. No one knows who is correct until tomorrow arrives. I have learned so very much here, and even though my current "bearishness" seems to jive with most folks here... the opinions expressed here have prevented me from hanging myself with that view of the markets the past year or so.

MarkM I wish you all the best, and wonderful years raising your girls.

2nd I just heard about the ultra short FXI fund just today. Had to do a little research but found the information.

I am not recommending these shares and anyone who reads this should do your own due diligence (DD) before consideration. It involves aggressive investment technique risk.

The ETF will trade under the symbol FXP. I think it will list under the AMEX.

According to the prospectus, it uses financial instruments including derivatives, investments w/economic characteristics inverse to the index, leveraged instruments and other assets. Financial industry group makes up 40.75% of the market capitalization.

On the following link, click on the PDF download next to prospectus. FXP is on page 115 & 116.

http://tinyurl.com/3aztw6

IMO there will be a time when there will be some active days on this ETF.

2nd

Prior post: first sentence delete "just" before the word "today.

Correction: Earlier at 2:39 p.m. posting, I inadvertently referred to this as a Powershares ETF. It is not. It is a Proshares ETF.

It's been a long day, but overall a good week. Enjoy the weekend.

I think it was MikeNYC who referred to GoldMoney as gold,silver bank account that he used. I've search for something I can trust and I think GoldMoney is where I'll feel safest. With all the recent talk on the blog concerning how unsafe the paper traded assets can be, I want to have a portion of my capital in physical metal that I own and that can be delivered to me on request.

Bill, I know you've mentioned that you are thinking of starting this kind of business, so please know you will have me as one of your first customers when you open for business.

Here is some of the important detail I found that helped make my decision:

Guarantee:
The quantity of precious metals electronically circulating in the GoldMoney system is always equal to the quantity of metal in the vaults.

For every single goldgram and silver ounce recorded within GoldMoney, there exists an identical quantity of grams of pure gold and ounces of silver in allocated storage at the insured vaults.

Euro-Dutch Trust Company, a commercial trust firm, manages the quantity of goldgrams and silver ounces in circulation and provides quarterly verification of the total quantity of goldgrams and silver ounces held in customers' accounts at GoldMoney.

It is audited by the best 3rd third party auditing firm Deloitte and Touche.

This 'Big Four' accounting firm annually examines GoldMoney's governance procedures and GoldMoney's IT security. The auditor's SAS 70 Type II report is available upon request to all GoldMoney customers. I'm requesting this document to be examined by a friend who is an account auditor.

E) A User may, by providing GoldMoney with delivery instructions, which instructions must be in the form prescribed from time to time by GoldMoney and the Vault, at any time request GoldMoney to change the goldgrams and silver ounces in his Holding into grams of gold or ounces of silver that are available for physical delivery to the User, provided that there are sufficient goldgrams and silver ounces to take delivery of a London Good Delivery bar of gold, which bar weighs approximately twelve thousand five hundred (12,500) grams, or bar of silver, which bar weighs approximately one thousand (1,000) ounces. GoldMoney will not charge a fee for its service, but fees may be charged by the Vault for acting on the delivery instructions.

F) The User must, in respect of any request contemplated in clause VIII.E, provide GoldMoney with instructions that are in all respects satisfactory to GoldMoney and the Vault for the handling, management and subsequent disposition of the physical gold and silver made available for delivery in terms of the request, and the Vault may charge the User a fee for this service. A User may also use an Exchange Provider should he wish to exchange goldgrams and silver ounces for grams of gold and ounces of silver fabricated into either bars or coins. An Exchange Provider may charge the User a fee for this service. If any gold or silver delivered to a User is not in conformity with the description provided to the User by the Exchange Provider or the Vault, the User's sole remedy shall be against that Exchange Provider or Vault, and in no event will GoldMoney be liable to correct such non-conformity.

onlineaces,
Yep, I used it. A few random comments:

1. This is Turk's company. He's an extremely pro-gold guy and a big critic of much of the paper gold industry. He and I had a discussion about this at the Spring dinner of the Committee for Monetary Research and Education. There is no doubt in my mind that the gold is there and not some paper promise. The auditing procedures are way more transparent than the ETF, for example.

And I'd bet you my whole sock drawer full of metal there is no loaning or leasing from the pile, as I suspect the ETF is used for. I don't see Turk loaning out your metal to be used to short against you.

2. They charge a small percentage to hold it. I didn't even notice it, esp. due to appreciation in the value of the silver. I think it's something like .02% I bought most of mine right after the big plunge in metals last year and was getting what now seem like great prices. I think between 9 and 11/oz.

3. It's super easy to use. I was buying small amounts of physical metal, but I was also, every two weeks on payday, dropping some in the GoldMoney account. It's simple - you log on, tell them how much you want in dollar terms or, I think, in ounces. You then call an 800 number and read from the on-screen script "this is onlineaces on Oct. 27 I have purchased 32,000 ounces of silver." The dough is debited from your bank account, or at least that's how I did it. There may be other arrangements, but I don't recall right now.

4. Turk and I discussed confiscation in an extreme situation. He felt comfortable with England and basically said, there's no history of it there. I see they just added a vault in Switzerland. I think that's even a lower risk.

5. Some have said "Just buy metal" but I think an account like this has it's place, even in small amounts. I was buying bits of metal on a sort of random basis, but this was a nice, regular purchase, and the ease and regularity helped me in being disciplined to save. Like I said, every payday, into silver and/or gold some of it went, right out of my bank account that evening. And the appreciation beats the non-existent "interest" I would have gotten in a bank account.

Also, I live in a semi-sketchy neighborhood, and I was concerned that if my pile grew big enough, that it was risky to have so much around. I didn't feel like plastering it into a hole in the wall or something. This is safe and easy.

6. I never used the goldgrams payment service, so I don't know anything about that.

7. If you do open an account, fill out and send your 'CAP' know-your-customer paperwork right away. You can buy small amounts regularly before you have to fill it out, but you cannot sell, withdraw or make goldgram payments until you do.

I wanted to take some out, and I had to send in this documentation. It takes a while for mail to reach Jersey, on the Channel Islands in the UK, and of course there was also a mail strike(!) right when I sent it.

The customer service response to my goldmoney system messages was very prompt (time zone differences played a factor, though) and polite.

I can say that this system, web site and people were nothing but a positive experience from start to finish, except for the delay in getting my paperwork there and that was 100% my fault. It was just a good feeling to do that every two weeks and to know I was saving and yet putting my money into metal in a way that was easier than ordering from apmex.com all the time (IMHO the single best online metal vendor on the web, BTW) and safer and more flexible, too.

If you expect to take delivery of bars, check with them for location. It may be that you have to go to where the vault is, but I don't really know right now. I think that would be the UK or Switzerland. I don't know if you can get NY or Chicago delivery, or have it shipped. If that matters, check.

The one bummer is that I like fondling my metal. But I have plenty of pieces here to satisfy that urge. Delivery bars of silver are kind of ugly, anyway.

Anyway, good luck. I hope it works out as well for you as it did for me. I closed mine for personal reasons (I needed the dough.) Like you, I'll be looking at Bill's vault when it opens, if it services small guys like me. But in the meantime, this one is easy to open, easy to fund, pleasant and actually kind of fun to use, and easy to sell the metal and close, when you want to.

I'm curious if any others out there use this and how it worked out.

Hoosier,,,you earlier said,"I hold UXG because I think it's worth a small portion of my portfolio to invest my money with a man who has proven himself in the past... time and time again. From my research, he's looking in the right place".

Same reason I bought in.

If Rob does manage to find a mother lode and with the PPG where it is today, I wouldn't wanna be short, not that there is a large short now.

Dab