"Congratulations! Your investment returns Year-to-date are = 0.00%
Be sure to thank your friendly "Fed-Model-says-stocks-are-cheap / Sub-prime-doesn't-matter / Valuations-are-reasonable / Buybacks are great / Consumers-are-fine / Earnings-are-great / there-is-no-inflation" perma-bull for all their great advice."

from Barry Ritholtz referring to SPY

Bill, it looks like it may be a low volume day on the blog.

It reminds me of a past US Thanksgiving Day when I walked into a Canadian brokerage office at about 2 pm and the reps that put the trades thru to the exchange were actually sleeping at their dusks.

we have awesome cross-currents->

spectacular close in the US
spectacular close in Shanghai
mildly positive futures
no way to capitalize on any of the above today (for those in the US)->this has to be a major current
clipping bill's ST take (for another failed rally attempt->will need to check daily RSI-7s for specific positions)/JWibbs' one-month outlook to the dashboard

long-term set-ups also looking better->still think (for most of us) the long side is a more comfortable and enduring play-> a) gold dip/spike (3 year horizon), b) China (this has to be a 10-25+ year horizon), and c) financials +/- housing/technology (see JWibbs here also)...

happy thanksgiving for those celebrating, and good luck trading to those able to do so today...

Yield curve spread between the 10-year/2-year bonds has advanced parabolically in the past few weeks.

Also notable in the gold markets, gold prices in $C and $A have not yet broken out completely, but the £, €, ¥ have all seen gold price breakouts.

Yields on treasuries have continued their decline, this will support the gold price as yields underperform gold price advances.

Happy news for $C gold investors, as predictions from the Central Bank forecast rate declines. This means a very positive scenario for Canadian gold companies.

As I sit down with pies baking in the oven...a sweet potato mascarpone and a maple pecan chocolate tart...Happy Thanksgiving to all. I see that Colin Twiggs is teetering on calling a bear market if the Dow breaks below 12800.

It feels like the market is finally realizing that its bag of bull tricks has been spent. Liquidity, global economic boom, strong American consumer, Federal Reserve support have all been pulled out of the bag. Like poor Bullwinkle, the rabbit out of the hat ended up being a roaring bear head (not the lion in the cartoon!) Perhaps Rocky the squirrel or Dudley Dooright can help. I realize that I'm dating myself by these beloved cartoons that I group up watching.

Leisa

"...a sweet potato mascarpone..."

Oh, to be in your kitchen just to enjoy the smells...

Do you share your recipes like you share your thoughts on market etc.?

A quick look at the long term 30-year bond chart says a great deal about just why there is support in the market without sincere economic fundamentals acting on prices.

http://tinyurl.com/2bu4ca

Long term bonds with increasingly higher percentage yields are about to mature, creating large capital influxes in return creating a demand for liquid assets. This would also suggest a continued demand for bonds across the time spectrum, regardless of yields.

Thus we also have a desperate search for liquid assets in the markets and for dependable long strategies.

Its likely this money will find its way into currencies. As the 30-year maturity bonds from 1977 onwards have increasing yields, this means ever increasing amounts of hard cash either to pay down massive quantities of debt and reverse the course of the dollar.

From the long term chart, I presume that Q1 2008 will be the starting point of this movement, since 1978 was the year where long term yields began to rise to a peak in 1982, so this means several years of influence over the markets.

What if????

All those countries holding US debt instruments, USD etc figure out a way to get it back into the US...i.e. set up mortgage vehicles whereby they loan money and then heaven forbid do not re-structure and sell the paper but actually hold the mortgage till maturity (like my Credit Union does)...credit crunch lessened, US economy avoids major depression/recession, world avoids major d/r, USD strengthens, other currencies weaken, US stays as the world's major consumer, emerging economies keep emerging....

Just wondering....big money needs money to flow to keep making big money.

Maybe I am too simple but I have found that when I have LOANED my kids money and they run into difficuty paying it back I make adjustments so I do not lose all my money...I take a little short term pain for the long term gain.

Happy Thanksgiving to all my American friends. I wish everyone a full belly and a warm glow. Today is a day to celebrate in Canada also. I understand that it will be cold and snowing in Toronto. I guess you want all those visiting folks from Winnipeg to feel at home. Crank up those natural gas furnaces and fireplaces. Have a good one!

Whoever is holding FXP is psyched. China is down over 4%, unless that was yesterday. I'm just hoping the recovery rally isn't too strong to scare me out of my puts on RIMM and GOOG. Happy Thanksgiving everyone!!!

Rob.

Happy Thanksgiving to All! To continue, a question: Are we (World) entering a Kondratief Winter? Are we back where we were 70 years ago (Great Deppression)? I believe that Technological advancements, and not only, have changed things ireversibly. I don't know a lot but, I know that a Dollar bill is an I.O.U. and it can only be reddeemed in the U.S. no matter how many hands it goes through.

We are theoretically in Kondratieff winter, based on the 10-year yield chart. Its very symmetrical, so this is why people adhere to the theory.

One thing people have missed is the fact we went through a deflationary boom, from which everybody benefitted.

Now we will probably see the trough of K-winter based on 30-year bond yields, which should last until 2015.

This is not unlike the long depression of the late 19th century.

Bill,
Thanks for NOT.V. It is nice to have a stock go up the day one buys it. Up $500 usd. It seems that as of now since I am in on 1K shares that we are suppose to wait to add when the metals quality report is out. Does anyone know when that is?

Bill,

First, happy thanksgiving.

Second: I do not see a rally attempt now, too much bad news arount.

I do see the market falling (with the usual ups and downs) untill Dec.11th, on which date the FED will be foreced by the market to cut rates.

At that point we may be around May 2006 levels, and then HB&B will pump pump pump pump like crazy before Xmas.

On the other hand...I may be wrong.

LOL!

Cheers mates,

China banks now appear to have caught the American problem , as reported in the Telegraph, but I haven't confirmed this write-up in the American press. If true, and I suspect that it is, then that might explain some of the recent down moves on the Shanghai Stock Exchange ($SSEC, stockcharts).

"Credit 'heart attack' engulfs China and Korea
By Ambrose Evans-Pritchard, International Business Editor
Last Updated: 2:42pm GMT 22/11/2007

The global credit crisis has hit Asia with a vengeance for the first time, triggering a massive flight to safety as investors across the region pull out of risky assets. ...."

http://tinyurl.com/296hmd

"Whoever is holding FXP is psyched. China is down over 4%.." not holding, but wondering if Shanghai traders will drive it right back up tonight...hard to game an index when it trades twice before you're able to close a position...

if China sells off again tonight, will be looking to go long via FXI...if it bounces right back up, may take another look at FXP...(how's that for rocket science? ;)

Just checking in . . . reference China, perhaps it’s time for an update viewpoint from the “Fly”.

Received a phone call the other night from Tucson . . . someone who worked for me years ago. He & 6000 others just received their pink slips from a privately held mortgage company where he was a fraud investigator. The company went under.

Here’s the news. CWC has recruited him and is hiring fraud investigators. Yes, CWC is acting like they’re going to make it. Must be that BAC support. Aren’t their convertibles under water?

Happy Thanksgiving to all here in the states. Time for football & turkey! Otherwise, to all, have a good one and stay connected. Thanks for all Bill!

Seamus,
I am out of town in Las Vegas. What game/games in the NFL are on today and at what time?

On this US Thanksgiving day I'd like to give thanks to Bill and the community for all their tremendous and selfless efforts to educate others. I for one have learned a huge amount in the last two years. Your time and efforts are greatly appreciated.

The best to everyone and their loved ones.

I have been using E*Trade Canada and a Cdn bank discount broker. I opened an Interactive Brokers account a month or so ago, but only started trading it yesterday. Since the IB charts suck, I was using the E*Trade Web Trader for monitoring my positions. Both are supposed to be in real-time, but I noticed when I went to sell the IB quote was better than the E*Trade quote. I was playing with QID and although I don't remember the actual numbers, the IB mkt was at least $0.10 higher than the current bid/ask on E*Trade. Of course I jumped and sold on IB. I am wondering if this is common and if E*Trade is scalping, or if this is an anomoly which often occurs on the different trading platforms?

golfer - visit leisa's blog and look at the the past few posts - you will find some good recipes and stories.

Happy Thanksgiving all!

Spelling - I meant to say anomaly. I will watch the pricing between the two platforms and report back if I see a trend in price differentials between the two.

CORRECTION to previous post @ 12:41 PM should be CFC (Countrywide)NOT CWC.

"Here’s the news. CFC has recruited him and is hiring fraud investigators. Yes, CFC is acting like they’re going to make it."

stktrader GB Packers-DET Lions 12:30 PM
NY Jets-Dallas Cowboys @ 4:15 PM
INDY Colts-ATL Falcons @ 8:15 PM
ALL EST
Late game is on cable-NFL network and is not available everywhere incl. some cable networks.

PS. Grey Cup is Saturday.

Leisa

You forgot...

"Captain Wrong Way Peach Fuzz"

"Natasha"

"Boris"

"Mr. Big"

and one of my favorites

"Fearless Leader"

2nd

So you thinking FXI long on another sell off tonight.

Gusty

isaiah- why- would you rather go long or short after two successive sell-offs...or just stay out of the way ;)

a LT position in FXI, whether you started last year or at this year's high, should pay off many-fold over any extended time horizon...probably as much as or more than buying Japan in 1945 or HK/Taiwan in the fifties...

...whereas, have to wonder where buying and holding the S&P500 today would end up in 20 years...

had the chance to visit beijing/shanghai/nanjing in 1984->"that china" would have been a dice roll->forward to 2007->nothing's going to stand in the way of this generation...

Still trying to get my BMO position I talked about last night. Was out this AM and missed the chance to buy under C$55 and now it's up 1.4% today and I hate buying stocks after they've moved like this. Sure, I may miss out on this opp, but I've made more money being patient that trying to force these things.

Jsaxman: Regarding E-Trade. I used to keep an E-trade account in addition to my Fidelity accounts. On two occasions, I noted that I had placed a bid on an option on E-trade, one that was higher than the current bid, but lower than the ask, and on Fidelity, that bid did not show nor did it show on E-trade--though I had placed the order.

I found it exceedingly odd. With all of the E-trade scare, I switched to TD Ameritrade. I like to have something in my back pocket!

Golfer--Yep, now and again I post recipes. The sweet potato marscapone is a Frankenstein recipe--meaning I cobbled together more than one recipe. I'm not sure how the final product would taste, BUT as I was putting together the filling last night I elected to put some cayenne pepper in it. Yep--to give it a a little kick!

Here's our menu (I'm from VA, so that will explain a few things--but no grits on the menu!):
Turkey (brined at home)
Ham
Brussels Sprouts and Carmelized Onion Hash
Turnip greens/Collards
Potato and Turnip Gratin
Scalloped Oysters
Tart Cranberry Sauce
Sausage and Cornbread dressing (I even make the cornbread for it.
Plus the two pies I mentioned.

My greatest love is to feed people in my home.

2nd

With so much volatility in the market place these days [especially ours] and when panic steps in [and I believe it will at some point], then wouldn't you agree the markets [Asia included] will fall, and fall fast?

I could see buying FXI for the short term bounce, then sell and move into FXP for the fall.

You mentioned the word long term and to me that is a lenghty period of time 6 mos or a yr plus. And a whole lot of bad news could come out in this time to rattle the markets even more.

Where is my thinking flawed?

Leisa,

i think anyone who is smart enough to brine their turkey beforehand is qualified to give trading advice.

honestly turkey is very bland without a good soak and followed up by a deep fry.

isaiah- (maybe you should consult your 251pm post for a more appropriate handle...other than captain wrong way, of course...)- not saying this is the best time to go long china, simply that anyone who is long has no reason whatsoever to sell...

as for friday morning, fading another sell off in shanghai may pay off...based on bill's take, if QID falls, then going long FXI may more than hedge a hit to your QID...(and if QID spikes friday morning either pre-mkt or at the open, would certainly consider taking at least partial profits)...

make that your 151pm post...

has anyone seen "dan in real life" and would you recommend it?
"michael clayton" and "gone baby gone" both xlnt picks if planning to hit the theatre today...

bb,

I agree with you that BMO is oversold at $55. P&F chart shows it is sitting right at long-term support that has held twice in the past. RSI 14 is showing signs of moving back up from 30-level. If it can reverse from here, it has alot of upside.

However, I think today's move of 1.4% in BMO simply reflects the small gain on the TSX after BOC injected $655 million to boost liquidity.

My gut tells me BMO still has more downside from investors fleeing anything remotely related to subprime exposure. Bill also warned about his yesterday, when he wrote:

"The Cdn banks BMO (BMO) and CIBC (CM) have fallen faster in the past month than most Fund managers would have believed possible. I think it's time to investigate the reasons why."

Am awaiting Q4 results next Tuesday, coupled with anticipated BOC rate cut Dec 4. As an alternative to buying the stock, I may opt to buy calls / sell puts.

I've got my order in to buy today, but just not willing to chase, perhaps I will still get filled today. Decided to go with just a a quarter position today, then I can wait for the results and add more if the numbers are OK and it drops a couple more points, and I'm out if it breaks $50ish. Also, if Bill's call is correct that we see a rally over the next few days, financials should be a big winner as they have been pushed down so far and are being quite heavily shorted now.

2nd....Saw Dan recently and enjoyed it.... some good performances ....not a great movie, but fun.

Seamus...thanks for clarifying CFC...you had me trying to figure out how Central Alberta Well figured in the scheme of things....Off to Grandmothers House we go....Best Wishes to you all!

Locked in profits and sold Noront (NOT) at 4.90. Still have McFauld's Lake exposure through BMK, FNC and FWR.

2nd

Been "QID nervous" after reading Bill's comments this AM about a possible [or certain] rally Friday.

Hope QID can make it into the opening bell and little beyond so I can pull the trigger. While I am at it, I'll probably let DUG go too.

You holding DUG or dumping Friday?

jaketh- thank you

isaiah- you're wasting your time worrying about your position->can almost guarantee the unexpected any given day=NO idea what will happen friday morning...plus the extreme volatility (emotions) in the market right now gives you a good "buffer zone"->you'll have (probably more than a few) opportunities to exit either QID or DUG at a profit...

SHORT TERM TRADE: NOT.V

I was just ahead of you, Fred, scaled out of my last 1/6 position at $4.89, 10.3% net on entire position.

Picked up an initial position in PDN.TO at $5.57 for longer term holding.

Picked up 5 Feb calls on XFN.TO on the theory we could get a short term bounce on Canadian financials. I prefer the "blended result" of the ETF to individual stocks.

London up 1.4% today, Germany up 0.6%%. I find London trades more in line with S&P and Germany with Nasdaq, so these 2 markets will likely open strong to play catchup from today. Of course, that could completely change depending on what happens overnight. Hong Kong and Shanghai were hit hard last night, but Japan was up.

For those following the techs:

RIMM has had net insider selling of CDN $41,435,162 over the last 60 days (3rd largest of any Canadian company).

Leisa,

Thank you for your menu. I sounds like it is going to be a good day for you.

I will make sure my daughter gets to see it and we may combine our talents and use it for our Christmas dinner.

Someone posted the link to beearly.com. Interesting source. Today there's a market letter
from POLLITT & CO. INC. MEMBERS: THE TORONTO STOCK EXCHANGE, THE INVESTMENT DEALERS ASSOCIATION OF CANADA. Below is the final paragraph. Makes me realize for the zillion time what a maze this is for the little guy. TA folks don't care to look behind the curtain but I sure respect the veterans like Bill who does....perhaps BILL can explain it should it even be important. (Sorry if this info has already be posted)
"
But the big, big question is: who is short the 100 million ++ ounces of futures contracts(gold), a number that is
rising steadily? Does it really make sense that increasing buying (of contracts) should be met with
increasing selling of contracts? The short side is not the mining industry, and it’s not the public. It’s not
people with gold in the vault; scenario b) doesn’t apply. It’s not Central Banks; when they sell they tend
to deliver the metal. By the process of elimination, it appears the short side must be big banks, maybe
hedge funds: the sort of people who use the word “algorithm” and have brought us structured notes, subprime
debt, big spec positions in natural gas, and all manner of derivatives. It appears they are becoming
ever more extended as they try to contain the price to “protect” existing short positions. They probably
expect friendly Central Banks will “protect” them. They shouldn’t.
Being offside on ten or twenty million ounces of gold may not make a big den "

Bill,

If the market rallies tomorrow. Would it be wise in your opinion to hold onto any purchases made tomorrow in the rally over the weekend [for future gains].

Also purchases made next week, would it be ok to hold over night or should they be closed out at the end of the day.

This is assuming the rally looks like it will continue through out the week.

http://tinyurl.com/2jnhmz

Not all is well in the UK mortgage markets. Something to keep in mind even with the uk markets up today.

Andy

Bill and anyone interested,
"Transocean and GlobalSantaFe Announce Court Approval and Tentative Closing Date for Pending Merger" I can't recall whether anyone has brought news of this proposed merger forward here. In my opinion, Transocean (RIG) and GlobalSantaFe (GSF) own the ocean when it comes to oil drilling. I have owned both in the past. I have no position in either at present time because I think that they are very expensive and I expect everything in the market to be heading down. However, I propose that if the merger goes through this is one company that will have to be in my Fred 100 and which I will own again at the right price.
http://tinyurl.com/2dffbd

Bill,

Thanks for the feed back.

I'm just trying to learn the art of selling. I have been doing well buying positions. It's just the selling part which is eating my lunch.

Does anyone know of a brokerage that lets you buy shares on London's AIM market?

I looked at IB and it seems only select names from the LSE are available.

To All,Happy Thanksgiving ! Great article (Policy making on the Booze, 11/21/07)by Bob Hoye of Institutional Advisors, on the Safe Haven website (http://www.safehaven.com/article-8868.htm) An interesting and maddening analysis of Central Bank policy shenanagans for the last 100 years. Highly recomended.

Well, Happy Thanksgiving to all those celebrating. I have nothing to add to any trading talk, but I can say brining your turkey might just be step three on the road to nirvana. I don't know what steps 1 & 2 are, but anything that delivers results like a "good soak" just HAS to be somewhere beyond the beginning of "The Road".

Cheers all! Good luck in the coming weeks and happy holidays to all who celebrate from now 'till next Feb!

check out this presentation on bag holders in the mortgage mess:

http://tinyurl.com/yr4voe

without the insurers, where does the mortgage market go? There HAS to be a bailout. i hope that dip for gold comes around soon Bill. I won't screw it up this time.

Good gosh, I just checked the forex and 1 USD will now get you less than 108 Yen. Yikes!

Isaiah, all those ultras index ETFs are going to be volatile. Tomorrow will likely be no different.

The trend is decidedly down and a bear market is inevitable imho. However, I expect the volume of "rate cut" chatter to increase to hysteric levels next week, which virtually guarantees the whipsaws keep a comin'.

Notice a rise in the Yen also means a rise in $US bullion prices.

Re: Bob Hoye. Bob Hoye used to be one of the most reliable predictors of the gold markets since the beginning of the gold bull. Its only as of late that those predictions have not complied with gold prices and markets, and this for a year.

Bob relies on the Princeton Business Confidence Cycle and historical antecedents which have more or less conformed with expectations, but missing major corrections in Gold is a serious matter. His predictions about Oil prices and banking indexes were off, though eventually the banking index finally sold off with the collapse of ABCP.(derivatives) He has been categorically wrong on his $US call.

Much like everybody else, Bob has been dragged along with this bull market with no way of predicting even short term what will happen.

I would take this as a sign that something very unprecedented is happening, but also that this market has every wart and feature of previous collapses and that at some point, his prognostications on the condition of markets will prove correct.

Bob Hoye has been calling for an imminent bottom to the $USD decline for many weeks now, but that has been off as FranSix has indicated. I can understand how gold would reach the low 700s if/when the $USD finally rallies. However, I wonder if the US Dollar is still the world's reserve currency. I don't see an alternative currency, gold excepted.

Anyone else like ABB here? Chart looks like it could see a short term pop if the market rallys for a few days.

Bob Hoye also uses the Gold/Silver ratio, which has not provided the predictive quality at market turns as it used to when silver was outperforming gold.

A couple of indeces that have conformed with the Princeton Business Confidence Cycle is the banking index, which peaked on Feb. 27, 2007, as well as the TSX Capped Real Estate Index.

Philadelphia Banking Index

http://stockcharts.com/h-sc/ui?c=$bkx,uu[w,a]dalaynay[pf][iut]&style=

TSX Capped Real Estate Index

http://stockcharts.com/h-sc/ui?s=$SPTRE&p=W&b=3&g=0&id=p80610220358

Rob d:

I wish I had seen the presentation on MBI & ABK back near when it was given! Stock of both started to fall apart in May!

Also interesting commentary on how subprime features are seen in LBO and commercial real estate lending.I guess we really ARE just at the start of the turbulence~!

Bill,

Indeed I agree that a relief rally will come at a certain stage. That is part of the primary bear market we entering now.

However, I just don´t think it will happen now. FOREX trading in the EUR / USD and especially in the USD / JPY this morning are suggesting that further liquidation is going on at this point.

Yes, the pumping will come, but in a couple of weeks time.

Dr. Cosa: If you take trading advice from me, you and your money will soon be parted! But, you'll not get steered wrong from any cooking advice I give!

Happy Friday.

Here are today's Cara 100 U/Ds:

Upgrades:
PTR - to Peer Perform at Bear Stearns
CEO - to buy at Citigroup

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

Of possible interest to mining players:

AAUK - upgraded to Overweight at HSBC

HL - downgraded to Sector Perform at CIBC

isaiah- so here's what i opted: out of QID pre-market at an average of 41.21 (reacting to bill's call/opening picture)...

believe your basis is also lower than the current bid (40.43?), so you could also clear the table (and your head) as well->plenty to look at this morning...

good luck either way...

FXP- holders must feel ripped off by a national holiday...

long side set-ups: FXI, JOF, MU, NBR, WFC
planning to exit remainder of NOT.V
see earlier post re QID- made the wrong call at the close wednesday (but somehow feel the thursday mkt close was a spoiler)

2nd_ave - FXI and FXP also look interesting to me but I'm not inclined personally to hold overnight at this point.

For anyone who is interested, FXI and its inverse FXP are etf's that are offered by iShares/ProShares to reflect the performance of the FTSE/Xinhua25 Index (SharpCharts - $FTX). This Index contains 25 "H" share companies that are permitted by China to be offered on the exchange in HongKong, thus there are some Governmental ramifications in addition to economics. Although there is considerable volume for the etf's, each tick can move by leaps - thus possibly not a trade vehicle for those prone to heart attacks - ggg.

Over our holiday, I posted that the Telegraph had an article that headlined that China has joined the "credit crisis" and stocks are selling off. I still haven't confirmed that "headliner" anywhere else and am about ready to reclass it to "can liner". Some other news said that China has loosened its currency to permit a faster ascent against the $Dollar than previously permitted, but someone smarter than me will have to estimate the extent of the impact, if any, this would have on $FTX. My thought is that a higher Yuan will cut exports and be a negative on the Index, but I have no expertise on the subject.

The weekly $FTX shows an RSI(7) less than 30_, thus possibly in Bill's AZone, BUT , the monhly RSI(7) shows a current (meaning it could chage by the end of the month) negative cross under the 70_; thus, possibly a sell signal by eom. Ah ltttle grasshopper what to do?

Bill, is this where one should trade only in the short term (daily/hrly) charts and/or wait for a trend line break for confirmation of future direction?