Gold:

"the era of 'peak gold' has arrived", which is truly momentous, because it means that the "easy to get at" gold has been gotten at, and the rest of the gold left in the earth is harder to get to, and thus the rate at which gold is being discovered has collapsed when compared with the old days, which is just like the collapse in new discoveries of oil, which is where you get the phrase "peak oil", and they both have crucially to do with how a rising demand growth curve and a falling of supply growth intersect at that place called Lonely Street.

http://www.atimes.com/atimes/Global_Economy/IK29Dj02.html

Kaimu,

I do not know Gartman, or what his record is. I do know he is as often wrong as he is right. The most successful trader I ever knew was right on only 32% of his trades and he is highly profitable.

As for your bet, I’m not interested in the least. My goal is an absolute return, period. I applaud anyone who makes large returns since I know risk is relative to return.

I guess, I should just buy only gold, set up shrine and worship it daily.

Kaimu, you make a lot of really excellent points, you care and our passionate about your views.

Finally, I have two secrets the first secret about the stock market is there is no secret. The second is real wealth, real wealth is health.

Peace brother.

Greetings Planet Cara.

Here are today's U/D's for the Cara 100:

Upgrade:

UBS to Outperform at Credit Suisse

Regards

"The weather changes quickly."
Posted by: jasper at November 28, 2007 12:50 AM

Change in the Weather

jasper- a pleasure reading your posts...your well-chosen words/phrases always come across loud and clear (maybe it’s related to growing up on the grounds of Tulane)...went rummaging for my ’86 ‘eye of the zombie’ tape, as I think the john fogerty version of "change" is a great soundtrack for any market crash…and the best time to play it is when they’re ramping things up...

WFC- this has to be the first "reliable/credible" picture of mortgage-related losses, as wife has great respect for john stumpf and we are unlikely to see him come out in 6 months with any major "revisions."

QID has hit my target and I’m beginning to load up pre-market...don’t know when we start to go down again, but I’m moving the port towards the Bull Hunter camp in Lancaster county...

2nd,

You better get a horse and buggy if you're headed this way. :^)

Regards

2nd

(maybe it’s related to growing up on the grounds of Tulane)

As in the BIG Easy?

From the You Can Take It To The Bank Dept.

Just days after the August plunge, I seem to recall the vice-chairman of the world's most influential merchant bank (rhymes with "G-man sucks") saying on CNBC that he would not be surprised if, after the violent rally then in motion, the markets returned this fall to retest the August lows.

And lo, it came to pass.

isaiah- jasper definitely has roots in "NOLA," and i believe he has a childhood connection to Tulane...but i'll let him speak for himself...reading jasper reminds me of listening to springsteen, who can tell a story/conjure an emotion in 8-12 lines (philadelphia, youngstown)...

Great to have all of you on my side...

Without all, I really would have thought this rally has legs...

DJIA has to get to about 100 pts over the 200 DMA for me to change my bearish outlook...A LONG WAY TO GO IF YOU ARE A BULL...300 pts...

2nd_ave...Also looking to reload my QID...and add more FXP...

Just wish I had a way to short this market in my wifes 401K with Fidelity...

2nd

Ok.... I asked because that is where I started as a Petroleum Engr for Shell in the late 70's.

Time does go by...

Side note:I choked yesterday by not selling the QID .

Sorry...Wifes 401K with Principal...All they offer is ways to go long the market...

Or just park in moneymarket ..

bg- if the wife's account allows her to buy FXY (Japanese yen), think i posted a link a couple of days ago showing it's almost inversely correlated to all US indices...

FXP- adding at 77.45/QID- multiple lots pre-mkt/open-> 39 and change...
DUG/EEV on the watchlist

Short-term Bull case?

Prospect for rate cuts coming...
Disposable income is rising...
Employment still looks good...
Stocks are cheap on a historical basis...
Global economy is booming...
Just had a 10% correction...

Financials and ETFC are on a tear this morning.... The Slosh report seems to indicate a drop in funds sloshing around.

http://www.gmtfo.com/reporeader/OMOps.aspx

Scaling into INFY. 40.40.

jogyp- here's your chance to lighten up...

Bill would like to know your take on Risks in India and where your think they rank.

In reference to interest on India based companies (INFY, TTM, CTSH)not sure how many are aware of the risks in India's political/social infrastructure. For whatever reason these items are not widely reported in the press here.

Prime Minister on Naxalite (Extreme left wing communists aka Maoists) as the graveset threat to India)
http://timesofindia.indiatimes.com/articleshow/1489633.cms

On infiltration of top level government:
http://www.india-defence.com/reports/3032

117 policemen killed in one district in 2007 by
http://tinyurl.com/28baqc

Hammer wrote: "Short-term Bull case?"

'Prospect for rate cuts coming..."
Maybe, maybe not. A guess.

"Disposable income is rising..."

WHAT??? Please. pipe some light up there....
your USD lost more than any supposed gain in "wages". This is an idiotic, indefensible statement. Apparently you don't buy gas, food or medical care.

"Employment still looks good..."
Compared to when? 1933? Employment has not been at a level that keeps up with population growth much less "look good". Another indefensible idiotic statement.

"Stocks are cheap on a historical basis..."
Really? How much bad debt will the financials be bringing on their books in the next year or so? How much will your house be worth. You don't know and neither does anyone else, so you don't know true value of the market and neither does anyone else. More stupidity.

"Global economy is booming..." See pipe daylight comment above. Apparently some of us see a glass half full even when it's full of shit.

"Just had a 10% correction..."
Which historically leads to a further 8% down.

Now if we can only stretch our vision more than a day or two ahead....

The Christmas rally is here. Do you really believe that the PPT/Wall Street is going to let the retailers lose at this time of year? It will all be warm and fuzzy news for the next month. The bad news will come out again in January. The consumer is going to give December its last horrah before facing reality in the January.

2nd, I am planning to do it by end of day.

Here is one for swing trade for you
MRVL: Good results - Buy below 15, sell above 17.

Sanjay Dutt:

If you haven't read Bill's opening comments for today you should and if you haven't what part of NO don't you understand?

correction...if you HAVE read them what part of no don't you understand?

All,
You know, Bill has a lot to do and it doesn't take a lot to take the wind out a hard working man's sails. It is up to the community to police some of the garbage that gets posted here, especially the attacks on Bill's work.

While I don't want aggression or personal attacks, attacking faulty ideas is fair game and we need to be more vigilant in this regard.

Thus my slightly aggressive stand with Hammer and his statements. If he read here for even a few minutes he would understand how stupid they sound. We can all hear that tripe on Kudlow.

Lotsa bulls out there today...

Added to my FXP @76.00 can't believe I got a better price that 2nd_ave...

I'll wait till the lower low is put in around 12400 then I may put some money to work on the long side...AT WHICH TIME I WILL BE BUYIN GOLD

If FXP is getting near it's 52 week low of 69 does that mean that China's market is near it's all-time high again?

This market can rally as hard as it wants. I'm not convinced that everything is "rosy" out there and will add to my shorts.

Rob.

UXG at 3.61: Where will it stop? Getting worried now.

QID: in a little at 39.26
FXP @ 75.75
Still in DXD.

Bought some EMC for a trade and a little WGW.

JogyP

UXG at 3.61: Where will it stop? Getting worried now.

I'm sick to my stomach over this one. I'm in too deep to even considering selling.

didn't bill write something a couple of days ago along the lines of the "bulls" right now not being you/me/main street, but vested interests...

Do check out the up/downgrade page today.

At the bottom of the page are some new price targets for nine equites (one listed twice with different price targets).
For the ten listed, eight were reductions in price target, even on the supposed upgrades.

So analysts are telling us price targets are going down, not up.

Hammer1,

Are those facts or wishes?

I don't think employment and ergo disposable income are firm. Stock multiples are still above historical averages, so I'm not sure how you call that cheap. The global economy has been booming, but how can one flip from saying the U.S. is the dominant economy and is on the decline, to then saying that the rest of world will negate that negative impact.

I think we're seeing a bounce from the correction that we've experienced, but I'm on the side of "sell into strength". The best buys are down the road a piece.

It appears to me that the current strength in the market may be the "year end" rally that normally comes around this time.

Harry Dent had been looking for support to hold on the S&P around the 1400-1410 area which it did yesterday. This morning he advised buying any near term weakness.

Additionally, from a Wyckoff standpoint yesterday looked to be a day of accumulation on higher normalized volume.

I look for the market to move higher from here. Any break from the 1410 area on higher than normal volume would negate that viewpoint for me. Baring that scenario I expect higher prices.

That's my point 2nd. "They" are going to make retail rally one way or another. There is to much at stake. the news is going to be all good to make consumers feel good for a month.

I agree with Craig that the regulars should help police the comments. We're here because we respect Bill and his knowledge and also love trading. It's that simple. Anyone who has issues with that shouldn't be here and Bill shouldn't have to put up with their s_ _ _!!!

On a lighter note, GOOG and APPL are barely up. The financials are leading the rally. They were due for a bounce but I hope anyone buying them is doing so with a short-term plan because they have a long way to go down from here.
I have a hedge with 5 Citi calls for March in case they manage to bail out the financial sector but I really don't see how that's possible.

Rob.

FXP- adding at 74.96...

Isaiah,
Sit tight, stop looking at it for now. Gold is going down and gold miners with it. When it bottoms you will buy at the right time, lower your basis. If you trade gold or miners, every once in a while you are going to be scared to death. In my case that marks the bottom where I *USED* to sell in panic.

Now I scale into positions and worry less about the moment. (you should see my FXP position today). Scuba time.

Search your feelings young Skywalker....the force is with you.

Craig

LOL

stktrader...

What happened in the fall of 73?

From Contrary investor...

Not since the bear market of 1973/74 In very coincidental fashion, mutual fund investors in the 1973/74 period did not begin selling their mutual funds until well into/after the market had already completed most of its decline. The 73/74 precedent does speak to the fact that the NASDAQ could easily have another down year next year. Clearly a decline of the current level being followed up by another year of significant decline is not w/o precedent. It's happened before. Then, as now, we strongly believe that the public will be the key to the next leg down in the bear market, if there is to be a next leg down. It's during the second significant downturn in most "classic" bear markets where anxiety and fear take hold and the public reacts out of emotion. As you know, though, in 1974 we were facing significantly higher energy costs, the beginnings of the onset of serious inflation,...hmm, maybe we better just stop right here.

Easy Craig...

Indicated "Short-term bull?" with a question mark.

Rate cuts...bond rates say so.

Disposable income rising...what proportion of income does the general middle income family spend on fuel...it is minimal.

Unemployment rate...4.8% is historically low.

Stocks are cheap...PE is roughly 15 times earnings. Earnings may go down I concede.

Global boom...China's growth for example? Other countries outside of the US are trying to slow their growth...

Correction...How many 20% corrections have we had?

Just giving you the other side...I may not necessarily agree with all of it...just want to here the other side from some, I believe, smarter individuals than me. And from what I have read on this board, I think you probably fit that category. Thanks for your response.

JogyP and Isaiah64v4;

I bought UXG warrants a while ago.....I was in and out of this one early for a nice profit.... So when the warrants were issued I bought them and put them away......2011 exp. date....

I think you'll be happy with your uxg but patience is required....We are riding the "Jockey" and I think he is one of the best in the business....The extra risk in exploration plays, given the worldwide financial mess we find ourselves in,is being repriced ...DOWN...

Most exploration plays....Especially the diamonds are down....However if one of these plays hits the motherlode we'll have another Noront on our hands.... I like UXG...The Jockey and the area the claims sit on.....Patience...

Cheers.....DB

Craig,

Well said, and thanks for responding as you did. You voiced the thoughts I had when I first read Hammer's post.

Concerning the markets, I really don't know what to think. I'm almost entirely in cash at this point (not a day trader) and fundamentally it seems to me there's no place to go, longer-term, than down. Resetting ARMs, mortgage rates which haven't come down (despite Fed cuts), seriously bad consumer housing situation (and outlook), poor consumer confidence numbers--the list goes on and on.

It floors me watching the news when I see video of 'Black Friday' and hordes of people lined up like cattle, rushing into stores at 4 in the morning. Seriously people. If the consumer manages to spend through this holiday season, then how long until credit card delinquencies accelerate? Perhaps these folks are just chasing the deep discounts because there are tapped out. I don't know.

The thing is, depsite common sense and what seems logical, HB&B never cease to amaze in what they can pull out of a hat to buy time. If you look at a daily chart of the $SPX over the past year, the July-August decline looks very similar to the Nov-Dec drop we've just experienced; and we saw where we went from the August bottom. While I don't think it's probable we rally significantly here, it's not _impossible_ that we do, although I can't really see that without further declines in the greenback.

Personally, I doubt I'd have the conviction to go long here, even if the tape gets some love to the upside for a year-end rally.

Thanks to everyone here for their comments, the phenomenal majority of which are respectful, intelligent, and insightful. I think it speaks volumes to Bill's efforts and the community's repect and appreciation for those efforts, that this blog _does_ attract such a high quality following. You should be extremely proud Bill, thank you.

stktrader,

If the HB&B does manage to rally the retailers thru the holiday season, the old Bull Hunter is chomping at the bit, looking for an entry point into massive amounts of SCC.

Regards

DB

Thanks for your encouraging post. It is just hard to watch it fall as much as it has.

Several months ago I jumped in really big on what I thought was a big drop. That was before it fell off the cliff. :-)

But Rob McEwen + exploration in the USA + his lease is surrounded by major producing mines and the future outlook for gold has caused me to hold on.

So I'll sit tight.

Thanks again.

Hello all,

since I can only watch and wait today I'm reading a lot and will share links for those who wish to read.

China wins from credit crunch fallout

Special investigation by City staff
Last Updated: 9:42am GMT 28/11/2007

http://tinyurl.com/ynva6u

For a decade, China has deliberately insulated itself against the boom and bust cycles of the capitalist West by building up the greatest cash fortune ever assembled: a staggering $1.3trillion (£650bn) in foreign exchange reserves.
China's colossal war chest reflects its emerging status as a superpower challenging the West not only economically but politically, with potentially profound implications for us all.

Bull,
I am part of consumer services. It is already in recession. Believe me! That is why I am on the board these days. I don't have any work until January. Aquire an etf that shorts retail after the January retail numbers come out. From there it will be all downhill for the retails.

Its very strange that the market is rallying along with the dollar. I would think the two are mutually exclusive. I still think that if the dollar keeps rallying the markets will take it on the chin.

This is a very difficult environment to trade in as most tells are not working. It seems like the computers are in control and they have changed the rules.

Hammer1 responded:
"Easy Craig..."

Alright, I hit the easy button.

"Indicated "Short-term bull?" with a question mark."

Gotcha.

"Rate cuts...bond rates say so."

Yes, the grown-ups say so but that's why the yield curve has been screwed up, no?
Bonds say cut they don't say when. If we are to rally won't we need that Dec 11 cut? The bond guys don't get to do that....dammit.

"Disposable income rising...what proportion of income does the general middle income family spend on fuel...it is minimal."

First, the figures are lies. Then you have to subtract real inflation, not the liar rate the government wants you to believe, and you need to eat everyday. Fuel is burnt to get you food, to grow it, refrigerate it, transport it. You use consumer staples everyday. They are going up far faster than official liar inflation rate.
I supplied a simple example a while back...toilet paper, up 25%. I assume you use it....daily.... The USD has fallen from the mid 80's to the mid 70's, a drop of at least 10%.
THAt my friend is a wage LOSS, not a gain.

"Unemployment rate...4.8% is historically low."

First, it's a manipulated lie. Then they revise the lie. Even the lie number doesn't keep pace with population. 4.8% is a joke just like the inflation number.

"Stocks are cheap...PE is roughly 15 times earnings. Earnings may go down I concede."

More manipulation and lies. Until the financials come clean we don't know.

'Global boom...China's growth for example? Other countries outside of the US are trying to slow their growth..."

These countries don't have domestic consumer stasis. They sell to us. We are slowing markedly. when their customer goes down, they will too.

'Correction...How many 20% corrections have we had?'

Of those we had since 1945, 11 lost an additional 8% and lead to a bear market and nine didn't.

Just giving you the other side...I may not necessarily agree with all of it...just want to here the other side from some, I believe, smarter individuals than me. And from what I have read on this board, I think you probably fit that category. Thanks for your response.

For you Isaiah64v4

Don't be a Footsie neurotic
Last Updated: 11:47pm GMT 24/11/2007
Neuro-economics can help you understand your reactions - and get richer, says Jason Zweig

What goes on in your brain when markets are crashing? The new science of neuro-economics - a hybrid of neuro­ science, economics and psychology - has begun to shed light on that question. Within 12 milliseconds, or one-25th the time it takes you to blink your eye, upsetting financial news can activate the amygdala, a structure in your brain that generates emotions like fear and anger.

http://tinyurl.com/yrg4e7

Isaiah, Remember when I said a month or so ago I planned for 30% drop in miners. Could still go down further, so try to work into your plan some buying at some point if you believe in the long-term pic. By the way, I wasn't predicting that, just saying I was planning for it. Difference.

stktrader,

Unless I have bad info, SCC double shorts the retailers as well as some consumer services, inspite of it being described as a consumer services short.

Does anyone know of a better way to short the retailers?

Regards

Rough ride ahead as Winnebago in downturn

By David Litterick
Last Updated: 12:48am GMT 28/11/2007

Forget inflation and the manufacturing figures. Stop looking at the latest existing home sales figures or the data on non-farm payrolls. One of the most accurate indicators of an imminent recession is in and Americans should start tightening their belts.

Winnebago, the makers of the famous recreational vehicles so prominent on the highways of the US, is expected to post a decline in sales this year for the first time in six years. Buying a motor home is seen as the ultimate discretionary item, and over the past three decades, declines have always heralded a rapid slowdown in the US economy.

http://tinyurl.com/ysmf3w

UNG at lower edge of a 37.5 - 41 trading range established Sept 12. COT data a week and a half ago showed commerical traders net long (more than normal), which should be bullish for Nat Gas. Nat Gas report tomorrow 10:30ET

isaiah- when the markets all end in the red again, mornings like this will help you remember how much "work" it was...;)

MU- out at 8.46...

Craig . . . Decaf my man, Decaf. . . . agree with your statements, but “idiotic” sounds personal . . . . manx928 writes the same message without inciting. It’s healthy to hear other opinions even if we think its way off base. Sometimes they’re even correct . . . don’t want us to end up with “group think” . . . other times it confirms our positions even more. FWIW, Hammer1 did use the words “short term” even if the disposable income & employment comments seem out of touch with reality. Just my 2 cents.

BTW, speaking of decaf, SBUX showing life today after Cramer hammered (no pun intended) it last night. I just closed (buy to cover) my Jan puts (small loss) as I think the whole market will be headed down by Jan 19 expiration.

Northvan . . . thanks for the updated Commodity ETF information last night.

Speaking of recessions, it’s apparent to me from traveling & observation, the states of Louisianna & Michigan are already there.

moneygenie,

Thanks for the input on Winnebago.

In my area, the dealers can't even give them away.

Regards

Why does the bull case never mention the credit markets? Because they are in disarray and all bear markets start in the credit markets. P/E's "cheap" at 15 reflects past earnings, not future. Stock buybacks have contributed to earnings per share increases. Macy's just admitted that it will be much harder for them to meet earnings expectations (per share) after they suspended their stock buyback program. They basically admitted that they have been manipulating earnings per share through stock buybacks, and they aren't the only ones.

Also, isn't November year-end for banks? This rally may be some tape painting to make the books look better at month-end.

UNG- adding at 37.55

Seamus,
You are correct, idiocy was idiotic on my part.

Hammer1, please accept my apologies.

Thank you for the SBUX heads-up.

shark_attack mailed me this and felt strongly enough that he, with all his problems posting, really wanted the message to get out, so he sent it to me.

"Michael,

As you know I can't blog. But someone needs to tell the bloggers about the proper use of stops vis-a vis the UXG commentary of this am.
One does not stay in a position that's going
against you significantly, no matter who the damn
"jockey" is. One sets a reasonable stop,
electronically if one has zero discipline, and one
does not make emotional attachments to stocks,
jockeys, horses, or any other metaphore one cares to choose. Be loathe to buy into stories regarding stocks, jockeys, horses, etc. Finally, one does not "hope" for anything in the markets. Hope, it has been written, is the arch-enemy of successful traders.
Hoping is a sign that something's going wrong.
Horribly wrong in the case of UXG. Thanks."

There you have it. Pay attention.

A TA perspective, not that I align or not, just what may be the common technical viewpoint where only prices count and not fundamentals, is that 1490 has to be cleared for an intermediate up trend.
Personally, operating on one third exposure...with Bill and 2nd on the other shoulder.

Isiah64v4....One oil service microcap that may have a large upside at current depressed prices is outside nola: omni...hard to get good information, but just something that caught my attention and am following. A Don Coxe inspired thought...looking for companies that will help deliver scarce resources. "on the other hand" could become a dead corpse.

Re: ETF solvency

I understand that ETNs depend on the solvency of the issuer. What happens when the issuer or custodian of an ETF like GDX becomes insolvent? In the case of GDX, I'd imagine it would retain its value despite insolvency because it is composed of stocks of $GDM. I'd greatly appreciate more input on this, especially with Kaimu's warnings.

They are really kicking the stuffing out of the yen and franc here. Trying to manufacture a rally is hard work.

2nd_ave,

Two VIQs (Village Idiot Questions) for you, at your convenience. When watching the bid-ask quotes bounce around at FXP, do we watch the decisions of men or machines? Is there any significance to the high volume today? Many thanks IA.

TD Waterhouse is experiencing some traffic I think...

URG: Temporary System Problems In WebBroker

SUMMARY:
WebBroker is currently experiencing intermittent systems problems. You may see a 'Service Temporarily Unavailable' message when you login. If you receive this message, please try closing your browser and logging in again. We are investigating the issue and will provide updates as soon as new information is available.

Risk management is important...having cash available when you need it is important...making 4 to 5% without risk at times is better than to take a chance losing 30 % knowing that you have to make 42.85% to get back to even.

Tread wisely those of us that are relatively new to volatile markets....there are many in this game that are real experts in this type of daily action.

Posted by: TimG at November 28, 2007 10:59 AM

Thank you Sir, I was just going to post a Q to find out when report.

Thanks all.

PS. I am an energy, "holistic" kind of gal. So for any so inclined I will ask that we visualise LIGHT streaming into and out from ourselves to members of the community, especially Bill. Today might be a tough day but perspective is the Key. We are connected whether we believe that or not. in MHO.

Wavesmash:

Did some of us experience this problem yesterday as well at different firms?

Is trading volume up?

Is it taking longer to get your orders thru?

How does that factor into getting your price?

Bill,

I have been thinking of mentioning this recently. Have you ever considered switching out MCO for MHP in the Cara Global 100? MHP is seems to me a more "global" company. Their S&P brand/financial services as well as education make up a large global footprint. MHP also has a long history of dividend increases.

From their website: "The McGraw-Hill Companies has paid a dividend each year since 1937 and is one of fewer than 30 companies in the S&P 500 that has increased its dividend annually for the last 34 years"

Just thought I'd throw that out there. Obviously, both of these companies are in a difficult position right now, but seems to me that MHP would be a more consistent holding than MCO.

Apology accepted...

You are educating me...even if is forcefully done. I appreciate that. Thanks again for your response.

Sharkie is right.
1. It's best to set stops limiting your loss.

2. If you keep small positions you can monitor w/o too much problem, BUT this will include emotions.

3. If you are risking more than you are comfortable losing, set limits.

4. There has been several instances where our fearless leader has had to talk us through these tough times and dips. Each individual will need to determine where they are and their own level of comfort with losses or negative positions.

Jobs:

Anyone in the real world knows the job situation sucks. Even those of us in 'good jobs' can't escape the feeling of hanging on by our fingernails, staring over our shoulders into the abyss. I've had this conversation with people in better situations than I, and worse.

Ask people at Citi how they feel today?

The numbers:

If you look at the supposedly 'good' numbers last month, they did not even equal the number of people entering the work force, so there is still a deficit.

The number that came in was 166K. From our friend Mish, we get this breakdown:

"The overall numbers look OK on the surface but once again the devil is in the details.

* Manufacturing shed another 21,000 jobs this month and continues to lose jobs every month.

* Government added 36,000 useless workers.

* Leisure and hospitality (typically very low paying jobs) added 56,000 jobs.

But the amazing stats are once again found in the Birth/Death Assumptions.

The BLS has shown a net gain of jobs added to new businesses in both construction and financial activities nine consecutive months from February through October.

The BLS is assuming not only that jobs were added, but that new unaccounted construction businesses were created in this environment where business capex spending has been weak, housing has been horrid, and over 170 lenders have gone out of business or stopped writing loans since last December as per the Mortgage Lender Implode-O-Meter.

Clearly this is reporting from an alternate universe."

The other thing you need to look at are income levels, which, if you use the REAL inflation numbers, are not just stagnant, but have been dropping.

It's not good out there. Out here.

Bill:

If you were not here, I'd be screwed.

Thank you, thank you, thank you,
Rookie

P.S.
Tip Jar or ???

moneygenie

Thanks for the article... I think I'll put down my MK-47 and suicide bomb vest and read it first!

:-)

Those with slow trading, make sure your firewall is not stomping on your trading platform.

Norton was very bad for me. McAfee works very well with the Scottrade platform.

Norton could literally hold my quotes and trades back several minutes. I thought it was my broker until I switched between my laptop and desktop. It's worth checking out.

Denny Phelps

You call a on the drop in the miners was dead on.

You have to sitting pretty now with your holdings. Good job!

shark_attack,

If I recall correctly, you were suspended at one time. Perhaps the block got enforced again by mistake. Maybe an email to typekey people is required??? But you may have tried that already, anyway it seems plausable to me since you were able to post from another location so it must be the ISP thing. Just a thought.

I'm seeking ways to keep my eyes off of the color red. If anyone wondering about my # of posts.

LOVE and LIGHT to one and all.

11.28.07
INFLATION STORY # 6

Winter is tip toeing into the Deep South (USA) and we actually have to use heat. My home uses two types of energy to perform this task:

‘Free” firewood. This starts out in 12-16 foot long scrap slabs cut from logs at a nearby sawmill, which I must load, haul, cut, split and stack.

The other form of energy is kerosene that escalated 20% per gallon from this time last year. This is ‘Home Heating Fuel’ with no road tax applied. It costs as much or more then over the road diesel fuel for large trucks.

Remember when good ‘ole’ coal oil use to be 10cents a gallon?

We needed some milk, which I normally buy at a globally owned German grocery store. It was out of the way on this expedition into town so while picking up a few hardware supply items at WMT Super Store, I strolled over to the food section and picked up a gallon of milk. Knowing this is where America Shops for Less I ended up paying 32.75% more per gallon than at the foreign grocer in our midst :(

PS Telestar3d: Nice 11.28.07 12:28A post. My AU/AG slept several decades also but is finally smiling now and like kaimu says, I still have the physical GOLD/SILVER and have come to the conclusion one must consider it a very looooong term investment. ;)

When I see this I find it hard to want to own DOW...and I can't say that I have a great social conscience when it comes to investing. Personally, sold DOW on the last downturn and was looking to re-enter on the basis of its increasing interest in supporting food production.

SAGINAW, Mich., Nov 26, 2007 (UPI via COMTEX) -- Dow Chemical is preparing to clean up what a government scientist says is the highest level of dioxin contamination ever recorded in a U.S. river or lake.

The toxic "hot spot" discovered in Michigan's Saginaw River measured 1.6 million parts per trillion, a level nearly 20 times higher than any previous find, The Saginaw News reported Monday.

Officials at the Michigan Department of Community Health issued a fish consumption advisory for the entire Saginaw River and a portion of Saginaw Bay.

TimG

Thanks.......

I read your post last night in regards to my wash-sale tax question. After the market closes today I have a follow up question for you.

I would like to scale into UXG here but I think that using Bill's "method" would be the conservative approach to take. 7 day rsi above 30 to enter.

I would like to scale into UXG here but I think that using Bill's "method" would be the conservative approach to take. 7 day rsi above 30 to enter.

ALOHA !!

Telestar3d ... I am passionate about the way the US government and HB&B conduct business or should I say conduct "fraud"! Where in the US Constitution does it say that all this fraudulent and Imperialistic policies are condoned?

The ETFs are risky ... People just dump their cash into these things on HB&Bs say so and nobody I have heard from reads the fine print or even considers "real risk" lurking in the agendas! ETFs have become the darlings of HB&B and to me that in itself is a BIG red flag especially when you have the likes of JP MORGAN in custody of your investment!

We'll just have to leave it at that!

Does Gartman want to take my bet?

You know every bubble has had its cheerleaders for HB&B. During the dotcom it was Mary Meeker and Henry Blodgett. During the fibre optics it was George Gilder. In the end 99% of the time the cheerleaders made the most money and their followers didn't! I consider Gartman the HB&B cheerleader for the gold "bubble"!

In the end we all have to do our own due diligence and we have to live with the consequences. 10-4 OUT!

YEP ... health is wealth! NO DOUBT!! That is one of the main reasons I live in Hawaii! I am sure a lot of people move to the Bahamas for the same reasons plus a few more!!!

C.Note:
In our area (we are a pretty big dairy state) milk has gone from $1.99 a gallon a year ago to close to $4 a gallon. 100%.

I try to shop at Cara 100 COST for milk. My regular store is directly across the street from wally-world. It's a Kroger company, Fred Meyer, much better than WMT.

money...
here is the economic calendar Bill often refers to:
http://www.nasdaq.com/econoday/index.html

One thing I like about IE 7 is the ability to have multiple home pages. When I lauch IE in the morning, it opens my broker, this blog, marketwatch (why I read this I dont know), kirkreport.com, bespoke, my google calendar and the econday calendar.

Isaiah, ok... but I'm no expert.

UNG seems to be getting hammered right along with oil after the supply data. I added to my position also.

2nd

"when the markets all end in the red again, mornings like this will help you remember how much "work" it was...;)"

What I'll remember is...

A L W A Y S... be flat at the end of the day!

If you are day trading.

If I would of jump off the train when you did with QID/FXP/DXD, and bought back this AM.

I would be singing "Life is but dream"
instead of "Nightmare of Isaiah Street". :-)

Rookie,

Where would you be if Bill Cara and Community were not here?
Same place as me, underwater, fiscally and emotionally.
But I'm not, because I've been:

Protecting my capital
Keeping my eye on the ball
Selling into Strength*

*guilty of missing a recent opportunity to do so in one position and now licking wounds.

Thanks again to the Community and Bill Cara.

This board reminds me sometimes of a college class, a professor and his charges. There will sometimes be students who will say inane, maybe insulting (to the intelligence) remarks. Then, the professor must feel "am I teaching here, or babysitting" and that would be disheartening. On this board, that happens infrequently, because it's such a well run operation, but it does happen. Then Bill, who is our financial mentor, senior advisor, has to deal with it. He does a magnificent job. I'm not smart enough in the financial arena to comment much, but I am learning a great deal just from being here.

GLD down 1.4% but GDX down 0.2%. I didn't think the gold miners would hold up so well.

****Attention Group ****

Just an idea to throw out to everyone.

Maybe tomorrow when you first sign in, your very first post should just contain the words

"Thank You Bill"

He would have a lot of them to scoll through and would definifely get the message.

ooops........

Bill you weren't suppose to see that!

Rally cries for policing thoughts is usually the first step in the quality of discourse going down hill. I like Craig as he is a tremendous contributor here but felt the response to Hammer was over the top. What exactly needed to be policed? As Hammer mentioned he was giving the other side of the argument and it was a fair post to put out there for comment.

Homogenous thinking of the group is not what you want here. If it is let me know.

For the most part there are almost zero flame posts so I am not sure why people get riled up so much. Intent is so hard to ascertain from posts as well.

Anyway, differention and counter view points is not only good it's what makes a market and keeps all of us on our toes.

Peace

Forgot full disclosure p.s.: We're underwater at 78 and holding.

I have fished the Saginaw river for Walleye before. It's too bad it's contaminated. If you only knew how beautiful the great lakes and it's rivers are. A travesty.

Kaimu,
Gartman is up 15.4% ytd. His gold position is scaled in at 50% and is hedged with an equal amount of puts to protect capital.

Geckojb,
My response was over the top as I did exactly what I was arguing against, which is personal attacks. I feel pretty dumb.

It isn'tthoughts or peple that need challenging, it's ideas. We do that everyday here.

The thing I was trying to convey, before I fell to my own "idiocy", was that the basic method and message here, supplied at some expense of time and money by Bill Cara, needs to be defended. Bill's mental health, physical health, labor, time, money, energy, all need to be defended if we are to continue to congregate here and to benefit and prosper from his labor of love.

If he doesn't love it, it will not be here.
I have been in similar situations in leadership positions in national organizations.

There is no shortage of people that will judge the best amongst us by their own goofy morals and standards. Those striving for excellence have a hard enough fight without having to deal with mediocrity or personal attacks on their DONATIONS.

As Van Morrison says, "We need to keep mediocrity at bay."

At the risk of being censored and banned....

Eight Main Symptoms of Group Think

Illusion of Invulnerability: Members ignore obvious danger, take extreme risk, and are overly optimistic.

Collective Rationalization: Members discredit and explain away warning contrary to group thinking.

Illusion of Morality: Members believe their decisions are morally correct, ignoring the ethical consequences of their decisions.

Excessive Stereotyping:The group constructs negative sterotypes of rivals outside the group.

Pressure for Conformity: Members pressure any in the group who express arguments against the group's stereotypes, illusions, or commitments, viewing such opposition as disloyalty.

Self-Censorship: Members withhold their dissenting views and counter-arguments.

Illusion of Unanimity: Members perceive falsely that everyone agrees with the group's decision; silence is seen as consent.

Mindguards: Some members appoint themselves to the role of protecting the group from adverse information that might threaten group complacency.

I have a UXG position, so I thought I would share my risk management strategy for people who are feeling nervous about it. I took a fairly small position, but I was still uncomfortable with it being almost $0.60 under my cost basis. So I sold some covered calls. I sold MAR 08 5 calls for $0.65. This decreases the downside, while limiting the upside, but I think the tradeoff is well worth it if you are worried.

For those not familiar with this strategy, this is how it works: I have a cost basis of $4.19 right now. If we get to March expiration and the stock is still below $5, the options expire and my cost basis effectively becomes $3.54 (note that this is slightly below where it is currently trading). In that case I've reduced my loss. If the stock blows past $5 at March expiration, then the options get exercised and I am forced to sell my shares for $5 each...giving me a $5.00+$0.65-$4.19= $1.46/share profit, or a 1.46/4.19 = 34.8% gain over maybe half a year.

While it's possible that UXG could go way up, and I could regret limiting my profit to that 34.8% gain, I still don't think I'd cry too much over that kind of return. Especially if you are "in too deep to even considering selling". Of course, if your cost basis is above $5.65, this almost assures you a loss, so it may not be the best plan.

The only real downside here (aside from missing out on a huge upward move) is if you think you might want to sell your UXG shares before then, in which case the options might end up costing you a little more money to get rid of (I refuse to be short naked calls).

Anyway, it's something to think of. It's amazing how many times I've used options to "fix" a broken trade. In fact, I have a large calendar spread on KRY that has mostly offset my losses to date, and which could turn it profitable when the near month (Jan 08) options get close to expiration.

maggy,

Reads like an episode of Kudlow & Company. :^)

Regards

The Etiquette of Weblogs - 2 Rules

1)Never, ever launch a personal attack on someone (especially other bloggers). Not only does this lessen your own credibility, but it also causes problems which are likely to never be resolved satisfactorily.

2)If you ever become the victim of such a personal attack, the best policy is to ignore it. If you get involved, you are taking time away from the valuable construction of your own material.

i hate to say it but i placed a small gold miners short position via the HGD in canada, that double shorts the XGD gold index.

im up %1 and basically waiting to see if gold
can break back above $800 and stay there this week.

the RSI-7 on the canadian miners is showing a solid downtrend by connecting a straight line from the september peak to now.

MACD has is trying to make a cross into a buy signal but it remains unconfirmed.

im wondering if gold is waiting to bust through $850 on the next rate announcement, or if its set to plunge if no cut is announced.

holding....
holding...

Korvus

Thanks for the detailed explanation on your UXG strategy.

I got 2 problems on why I can't use your strategy.

1) I am not that far along in my trading skills to buy "puts & calls"

2) My cost basis is 5.30 [ouch!]

Maggy, thanks for posting. This was what I was pointing to a week or so ago. It wasn't received well so I kept my mouth shut since.

Moving on...Here is something for the group. George Slezak's is offering a free one week trial of his website www.stockindextiming.com. Code=alpha, password=123.

Who is George Slezak? I dunno but timer digest has him #3 market timer past year. Saw it posted elsewhere and thought someone here could get use out of it. Report back if you like it or find it helpful.

From AP just now. Note the paragraph buried deep in the article. I include it at the end.

Bear Stearns Cuts 4 Percent of Staff

By THE ASSOCIATED PRESS
Published: November 28, 2007
Filed at 12:06 p.m. ET

NEW YORK (AP) -- Bear Stearns Cos., the nation's fifth-largest investment bank, on Wednesday said it will cut 4 percent of its staff in further fallout from the summer's mortgage turmoil.

The company will cut 650 jobs in all departments from its staff of about 15,500. This marks the third wave of layoffs at the battered investment bank, which as of last month had cut about 900 positions throughout the firm.

Bear Stearns has been among the hardest hit on Wall Street as investment banks reel from deterioration in the subprime mortgage and leveraged loan markets. The biggest global investment houses and major banks collectively wrote down some $80 billion worth of assets because of the market crisis this summer.

[...]

Cayne, who owns about 4 percent of Bear Stearns, has refused to relinquish control of the struggling firm. Instead, he pushed out former president Warren Spector in August. Spector did not receive a severance, but was allowed to keep stock and option awards worth about $23 million, according to a regulatory filing.

[...]

Russell Sherman, a spokesman for Bear Stearns, said the jobs cuts would come from across the firm and were not restricted to one particular business. However, a person familiar with the layoffs who was not authorized to speak publicly on the matter said cuts would likely come from the operations side of the business -- including information technology and legal and compliance departments.

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

So, a bunch of IT geeks, like me, who had nothing to do with creating this mess, get pushed out the door while the CEO hangs on with both claws and the VP who got shoved overboard is 'allowed' to keep his 23 mil.

It's a cold world.

Korvus,

My thanks, too, on providing the detailed explanation of your strategy. I'm at the stage where such examples are of excellent value!

Craig:

"3. If you are risking more than you are comfortable losing, set limits."

I think I know what you are trying to say but "If you are risking more than you are comfortable losing" then I assume you would set your limits at what you are risking... but then then you would lose more than you were comfortable with if you were stopped out.

In this case I would adjust my risk level to my comfort level then set my limits.

I agree with the various comments here about needing freedom of thought in discourse so there is no stifling of opinions. Group thought would be boring. However, just take a look at a stock like KRY, for example. It has many message boards and they are so over the top out of control that serious investors took to forming private members groups. Otherwise, there was no intelligent conversation going on. You might say put them on ignore, but when there are more on ignore than not...what's the point. A little structure, or control, seems to be needed in public forums.

I don't know, that group sounds like ruminants, not humans. That group would need to be closed/limited, ie: unable to hear or learn from any information source outside the herd.

On an internet blog that would be difficult.
Of course one thing about groups...they get together for common reasons/purposes, which does expose them to group think if they aren't careful. This blog would be WWIII if we all didn't have similar views of the world or the maturity to discuss them without losing it, and someone we respected who's view point and opinions matter to us and who keeps on the alotted task. We are an "US", a group...and we do think.

Afterall, it has been said many times, we are all connected.

I think I will be a day early.

Thank you Bill!!!!

Thank you Bill!!!!

Thank you Bill!!!!

Thank you Bill!!!!

We are having a rare thunderstorm here in Honolulu.

added to my UXG position also today @3.57

Just want to say I for one am pleased and impressed at how this morning's blogging crossfire has turned into a healthy discourse. I hope Bill's seeing enough of this to recognize that he's facilitating and inspiring a quality forum, (the little hiccups are part of it's evolution).

Thanks to Hammer1 and others for offering up contrary thoughts.
Thanks to Craig for having the grace to apologize and engage the debate.
Thanks to Molly and JogyP for passing along some words of wisdom.

Anyone look at the daily chart of JCP?

MACD divergence? If xmas sales surprise could see a pop in the short term. I realize the retailers are in a tailspin. JCP is down over 45% this year. Can I say...the risk might be "minimal" in the short term?

craig- van morrison: it's not easy being green (!)

buying some JPY hedge here.

using this: http://www.goldman-sachs.de/isin/detail/DE000GS7MS50/

Hammer1,
Did you see Bill's list of retailers to watch yesterday? You may be onto something....

BTW, please, everyone, if I screw-up don't hesitate to let me have it. I can take it.

Thank you Hammer1, Seamus, Geckojb, Maggy and anyone else I might have missed.

Bill,

RE: MHP/MCO

Thanks for your response. I agree with you at this point, neither deserve the spot in the Global 100 right now, but sounds like you agree that MHP is stronger and less vulnerable than MCO due to its more diversified businesses. Always interested to hear your take!

As far as a (perhaps European) replacement you are looking for, you may consider adding Areva to your considerations for an industrial. They are really at the forefront of the nuclear revival including a new $12B contract for new Chinese reactors. I think it may be one that could have a lot of staying power in the index. Just a thought.

And now to share one of my strategies, (unproven as yet) ...

RY-T

I'm putting a tight stop under this one now after a couple of days of good gains.

I've observed that this big Canadian bank stock can move 5% every month. By combining swing trade strategies with my investing strategy, I'm trying to take advantage of at least part of these 5% moves on the long side. If I catch the swing right, I sell and wait to reload a couple weeks later. If I get on the wrong side, I just wait it out, figuring that I'm better to wait for a gain than lock in a loss. I'm still confident that the big Canadian banks aren't going to fall off a cliff. Which also explains why I avoid going short.

Theoretically, if I can catch 5% per month, that's 60% per year. Pretty nice return for an investment that has very limited risk.

RY-T

To add to the above comment ...

I'm thinking that $53 is now acting as resistance where it was formerly support. If I wind up out at $52.50, I'll be looking to re-buy at $50 or under.

Craig, it's beautiful to see someone with humility and shelve their ego. Very respectable.

Geckojb:

"Intent is so hard to ascertain from posts..."

Isn't that the truth.

I am just learning this e-mail and blog world lingo and am beginning to understand why we need :>) and LOL. BTW IH3ptz.

BTW ru a THUMBER or a YUPPER or a?

test

Major repair today of the negative market internals we've seen since downtrend accelerated this past month.

So which is correct: the Dow Theory sell signal at 12845 a few days ago or the more postive bias to the markets after the +3.8% rally since yesterday's low? While there are many reasons to be bearish, I have to give the edge to the bulls, for now. Best time to tell though will be next Monday/Tuesday, after auto. month-end buying is complete and after the market has had a day or two to digest Monday's 10:00AM ISM Manufacturing index release.

JWibbs
http://www.2globalmarkets.com

Korvus,

My thanks, too, on providing the detailed explanation of your strategy. I'm at the stage where such examples are of excellent value!

Posted by: manx928 at November 28, 2007

Agreed....

One of my goals for next year is to make my first plunge into the world of options ..but much work to do on learning how they work etc.

I believe today would be a great day to add some Jul 2008 puts. Take your pick.

Hi Golfer..a thumber, living in the burbs,smack dab in the middle of recession USA. I am also a hunter and ice fisherman (noticed your postings on the subject a few days ago).

Isaiah64v4,

I've only been trading options seriously for about six months, and I think learning the basics of buying and selling calls and puts can be really useful. Selling covered calls is one of the easiest strategies to learn, and in this case it could help. Even at your cost basis, you could still use it as a protective measure, especially if you think the big gains will be far off (after March, in this case). You might want to look into it.

Jeff

my 2 cents on blogging etiquette:

--no personal attacks
--stick to blogging about markets, securities,
companies, etc. go offline if you want to
discuss everything else.
--maximum of 3 paragraphs per post
(concise is better and I believe that
diatribes do not below on a blog)
--ban violators after warnings
--always thank the moderator/mentor

other thoughts?

Thanks Bill!

JWibbs

2nd,
FXP has started to trade negatively in relation to FXI, a neg divergence to FXP.

I still think we are correct to hold, but it may be painful until either no Dec. cut or January.

But I'm waiting for some moderation to today's glee into the close. I may be disappointed.

Would gladly buy SKF at today's low of 94.51
I think that comes back soon.

Thanks for the afternoon comment, Bill.

Regards

Bill,
Re: Bear Trap

You said you didn't feel like blogging but you did and I'm grateful.

My gut says that the trap slams shut in the blink of an eye.

krovus

"I've only been trading options seriously for about six months"

Can I ask how you got started?

Bill,
I agree totally with your last post. This is completely a bull-trap.

Even the FED's Kohn, who everyone's attributing this rally to is very negative in his statements.

http://tinyurl.com/3cnfmq

"The degree of deterioration that has happened over the last couple of weeks is not something that I personally anticipated"

"uncertainties about the economic outlook are unusually high"

"The housing sector has continued to decline and to erode at a very, very rapid rate"

He doesn't sound too cheery to me.

And look at FRE up 15% because they're cutting their dividend in half.

Total pumping and short squeezing that could go on until Monday but I suspect it will end sooner.

I'm not dropping my shorts!!!

Rob.

Bill says "Bull Trap", not bear trap, although right now I've got something caught somewhere.....

An important distinction between bear and bull!

Maybe we get a "favorable" (?) beige book.

Holy Freudian Slip, Batman.

Yes, I meant to write Bull Trap.

Holy Freudian slip. Yes, it's Bull Trap I meant to write.

I want to thank you, Bill Cara, for doing what you do for this community. You have no idea how much it means to me and how much good you do. You scared me a little bit today, I thought for a moment as I was reading, that you were going to stop blogging--sheew,relief! I've been reading your commentary on this blog and on Seeking Alpha for well over a year now. I have never met you in person but I feel as though I know you through your writing. We here NEED you, you don't need us, and yet you generously offer your knowledge and experience for all wise enough to listen and maybe learn something they did not know. Almost all (maybe all) in this community, I have come to believe, are good people. We are all judged by the thoughtfullness and the intent of our of our discouse. Nothing is frivolous, it all adds. You do have some Great people in this community--I could mention names, but you know who you are, LOL. Gus.

Thanks for posting your thoughts Bill. Calculated risk has a nice article on commercial real estate hitting the wall. I have been in this arena for 34 years and can attest to this. Sorry about not posting the link - last time I copied and pasted it vanished. So anyone thinks its a good article post for others and tell this dumb dumb how to do it. Thanks

Bill,
In regards to UXG. If one wants to accululate this miner would the Cara Method be the way to begin? It is still below 30 RSI7 on the dailies.

Thanks for posting your thoughts Bill. Calculated risk has a nice article on commercial real estate hitting the wall. I have been in this arena for 34 years and can attest to this. Sorry about not posting the link - last time I copied and pasted it vanished. So anyone thinks its a good article post for others and tell this dumb dumb how to do it. Thanks

Budda Bill,

Great analysis!

"So, this is a Bull trap. The gap up this morning gives evidence of a trapping technique."

I would of never known such a thing existed.
Yesterday was the first time I ever heard about a possible bear trap.

Mr Cara your blog and posts like these have helped so many people especially the more inexperienced people like me. I would of ended up going to slaughter if I hadn't been warned this was a trap.

I plan now to just go ahead an sell into this rally and fatten up those bulls headed to slaughter. Better them than me.

Thanks!

I havent turned on the tv today. are the talking heads drooling at the mouth looking at the camera like a hyena who hasn't eaten in a week?

GRgold

Ditto........ to your post!

Major miners/gdx are in the green. Still looks insane as the negative divergence with rsi/and other oscillators is profound.

I am examing my emotions on a day that normally I would be heavier invested and breathing easier thinking, yep this is another buy on the dip and that we had the 10percent nick. These are the days that account for the vast majority of a year's up tick and thus, one has to be invested or risk missed opportunity. That's not a well embraced line of thinking around here but a momentum player for the last four years would have made a routine annual 30 plus percent just taking the meat out of the middle. And, trailing stops can perform just that trading horses about once every 3-4 months.

"On the other hand", to truly believe that these last two days are about manipulation in order to take our money it really is a sickening feeling just holding onto the one third in equities that I have. It would not be worth a few more up days. My largest stock position is GE in my taxable account. I bought it in 2003 as a conservative core and now faced with, "Is this the day I should sell into strength." It would free up some cash and help me rest more comfortable in a major downturn, but I'm not yet there. Indecision is a bitch.

ALOHA !!

Okay ... Gartman ... Hey you're beating the S&P ... Good job 15% ytd! I'm doing 3 times better than that and I'm not in and out hedging! So he's into some stocks also? Had he just bought gold when I last did at $651 and just sit on it he would have a 23% return ytd now! Jeez Gartman ... GOLD is a hedge buddy! How many hedges do you need to hedge the hedges? In my book only one ... and its not GLD!

Okay cash out of the Gartman portfolio and what do you have?

15% minus capital gains taxes of 15% so that leaves around 12%+/-!!! Now you're in the "real world" and 15% won't cut it! That doesn't even beat the 28% hike in fuel surcharge that Matson just announced! Or the 34% FedEx fuel surcharge! That doesn't even beat the 35% price rise I am paying for cardboard boxes coming in Jan 1 2008! Also a 8% rise in rubber band prices. A 30% rise in plastic sleeve prices. A 16% rise in plastic tubes prices. This is just the little old FTD flower industry folks ... What are the inflationary costs in the medical biz going to be? But the biggest whopper ... what is the cost of supporting a US MILITARY WORLD POLICE going to be? Wheres that calculation in all these black boxes and Kudlow? If the US government and Wall Street ever got honest we'd all be as broke as the USSA! Hey ... give em time they're working on it!

Anyone get the picture here? We're at a point where our own government is negating a 15% return! You have to have better returns to keep up with government spending and paper printing!

For a Nation that is so dependent on "imports" fuel surcharges for basic shipping will put a lot of retailers into the red or out of business! These are the ripples of a growing tsunami that haven't even been noticed yet by Wall Street's public personna. So the DOW rallies today because of a "rate cut" ????? These people are beyond immoral!!!

I'm with Bill ... not much will save the Little Guy! Even after profits!

The USD got up to 75.72 today and now is down to 75.41. The Euro went down to 147.14 today and is now back to 148.12.

So much for the dollar stregthening and the Euro weakening.

Rob.

jasper,

I've learned the hard way that moves in the stock market always go farther and last longer than I can get my head around. in other words, using my best analysis, if I am absolutely 100% convinced that a bullish upmove is done as of today, the market always seems to push a bit higher and put in a peak a few days after my expected peak. short-term exhausation pushes prices to extremes through greed and fear at the peaks and troughs. so I always add a margin-of-safety to my price and time targets when I am executing trades.

hope this helps,
JWibbs

FL,
Yep, Franc off it's lows today, yen still iffy.

How can this kind of volatility be healthy for the markets? It's insane. And Bill is right to avoid this roll coaster -- keep money on the sidelines while this plays out. The drop may be just as sudden and violent as this rise.

Here's wishing for a few quiet, boring days where someone who doesn't have the time to watch the tape minute by minute can establish positions.

Isaiah64v4,

First, I started with a lot of reading. :) Here are a few good resources:

http://rsi.korvus.net/OptionStrategyGuide.pdf (optionsXpress sent this to me for free, so hopefully passing it on isn't a problem)
http://www.theoptionsguide.com/strategy-index.aspx
http://urltea.com/281g?thinkOrSwim

I also went to one of the free Option Planet classes. For being free you get some really great information.

http://www.optionplanet.com/assembled/list.html

The next step is to paper-trade a few trades (I believe you can download the ThinkOrSwim software and do paper trading with it for some demo period -- there are some good analysis tools in the software). Then do a few small trades, though this might be cost-prohibitive it you are at an expensive broker (I pay about $3/contract, but some places have an up-front fee that makes small trades expensive). Once you are comfortable with that, you can scale up.

Learning how to buy calls/puts and write covered calls is a great first step, and it takes a lot less effort than learning things like calendar spreads and even verticals.

jasper, the 1 hour charts on the indexes telegraphed this turn to the upside. I was surprised, however, at the speed and violence of the move.

I'll be watching for the same thing to happen in reverse -- divergence in the oscillators on the 1 hour charts as the bulls exhaust themselves. That will be the signal that we're near a peak.

I for one appreciate what you are doing Bill. A hearty thanks.

test

korvus

Thank you very much for those links. Checking them out now.

B L E S S Y O U !

Bill,

I suspect you'll continue to read your blog despite assertions to the contrary... one can't ignore one's child. It goes against long ingrained instinct. That said, I did find the comment somewhat disconcerting. Why this reaction? I'll have to meditate on that.

I came to your blog several months ago.
I have absolutely no money in the markets. In fact, as a graduate and medical student, I'll be hundreds of thousands of dollars in debt for a long time to come. Generally, I have nothing to contribute, so I sit with silent keyboard and observe and chuckle and learn.

Why am I here then?... as a 20+ year student of sociology, I came for better understanding of the financial beast. I wanted to taste the blood and smell the sweat of this entity... I wanted to see it in action from the perspective of those who know it best; thus your tutelage.

This beast truly does breath. With your help, I am better able to take its pulse and understand its emotions. I am beginning to understand better how it works, not just why it does the things that it does to please its masters. And for this, I owe you my thanks.

If I have anything to offer to this community in exchange for what I've learned here, it would be this: for years I have been extremely accurate in my long range assessment of the financial markets (astonishingly so to many) and it has not been from any gift of insight or special trading savvy. My secret has been an comprehensive understanding of social engineering. Much of what impacts our lives today meets a very specific agenda. To ignore this is to play a rigged game at your own peril.

For the gold bugs, and in response to the peak gold concept being played now, I would suggest a comprehensive investigation of the history, physics, and concepts surrounding "ormus." And don't be satisfied with a cursory glance, dig deep!

Thanks again Bill.

SKF: bought a few at 96.20

Keep in mind that it's late in bull markets when volatility like this rears it's head. Do you recall the huge gaps up and down back in the last bear market? This is feeling very familiar.

MikeNYC-

I remember a couple of weeks ago you were describing CRE as the next shoe to fall.

Here is a Bloomberg article you might enjoy.

http://tinyurl.com/ypu3rf

tough day for the bears- (and the last few weeks have been tough for the bulls)...

all bears are subject to violent counter-trend rallies, but have to wonder who's buying this one, right...anyone who bought the last few dips got burned->is it different today, or is just another display of the (careless) use of OPM...

isaiah- if position size is clouding your judgement, may want to cut exposure, but i never recommend cutting into weakness->you will always get a better chance (ask jogyp)...we aren't going to know if this (was) the ultimate buying opportunity except via rearview...and if you're placing bets, pick the right jockey->i've seen bill pound the table on miners/GLD when THs were saying the opposite (and vice versa)...and unless i'm mistaken (and apart from his ST advice not to short a strong market)->he's pretty clear on where he thinks things are headed...

The trick is to skew the TA by manipulating a close above 13,300, which is the war right now. HB&B has unlimited OPM, so I expect they may get their way, although it doesn't feel quite as strong as it did earlier.
Starting the final hour with a 1 hour DJIA chart pointed up.

Isaiah,
You can open an OptionsXpress virtual account for free.

From Bloomberg: ``Kohn's comments just add to a perception that the Fed is embarking on a sustained path of easing,'' said Michael Metz, the New York-based chief investment strategist at Oppenheimer Holdings Inc., which manages $60 billion. ``There's also huge relief that the worst of the financial crisis may be behind us.''

Wow! Anybody here with funds at "Oppenheimer Holdings"? :-O

I think a simple strategy of sell the rips and buy the dips is good for now.

jwibbs and number2son,
thank you for your feeback, good food for thought.
Using the 60min divergences can be helpful. My fido screen only allows for 10 day at the 60s. My sense is that a knee jerk down could come tomorrow and that there just is not always enough time for the 60s to reveal the next move. The 30's might be overly sensitive and present a false positive for a downturn. Those that like this methodology are probably saying,"they work it just takes time for them to play out". And, on my screen there are a lot of indices and stocks with strong daily positive divergences....except for GDX. If one subscribes to this methodology one is going to be quite bullish looking out farther...a whole couple of days, anyway.

jiggstoo- re your VIQ- no idea...just know when things swing too far one way or the other, i will usually place a limit on the bid or ask, and not worry too much about catching a "fair" price->i just want to be in, or out...

Prior post recalled today.

Noticed over the last month or so there have been a number of hybrid preferred securities offered by DB, BAC, FITB, MER, MS, GS etc., etc. (all the usual suspects!) paying quarterly interest 7-8% area. One catch is a provision which allows issuer to defer payments up to 10 years and let payments accumulate. You’ll have to pay taxes each year on the deferred even though you didn’t receive payments. Another thing, I think income is treated like interest instead of dividends. Issue price is $25 and they list on the exchanges.

IMO, stay clear of these offers . . . . . . . . . . . . . . . .
Posted by: Seamus at November 16, 2007 11:29 AM
****************************************
Perfect example: Received an email update today on a preferred hybrid offer from:

Barclays, priced @ 25, yield to maturity 7.70%, payment quarterly, maturity: Perpetual, w/call features in 2013 & 2025.

Perfect example IMO of what to AVOID as elaborated in prior post. In a couple of weeks, the traded price will be closer to 20.

Be careful out there. I recently pulled up some info on a Singapore Bank I've liked over the years thinking it may be unscathed from the sub-prime, SIVs, CDOs, etc. Guess what? Yep, they had exposure thru CDOs to the U.S. mortgage market and had to allocate more reserves to cover.

It's worse than the bird flu contagion of a year or two ago! It's everywhere!

The upshot of this window-dressing bullish move is the rapid resorption (or is it obliteration?) of oversold conditions. Memo to self, rallies are always more violent in bear markets. So we are set up for a quick test of the 1,480-90 resistance in short order. If this visit occurs too soon (i.e. at the end of an extended move) - maybe by week-end -, odds favor a failure and a short set-up in the vicinity of the test zone. Just like violent down moves (in the bull market for most of this year) that landed too quickly into support were a quite reliable bounce play. At the end of the day, this market is bound for frustrating the astute, rational observer. But the goal here is to make money, isn't it? So let's dance...

maggy is right that this community like all groups led/moderated/inspired by a charismatic personality risks losing critical thinking through selective retention and attrition of its members. At the end of the day, the market and our collective successes/failures as traders/investors will decide if the community remains a source of valuable information/analysis/discussion or just another locum of predictable water cooler break banter.

JML

MikeNYC

Thanks.... I will do that... less pain if I mess up...LOL
:>)

Ignorance is bliss, Bill... please don't worry about the ignorant, just ignore them. :)

Thanks for posting today. I kind of wish I hadn't seen it with the way the markets are moving. Glad I did though... this is starting to feel like 2000 again. Blogging is almost as addictive as trading in capital markets.

I saw this quote today and thought of this blog.

"Tell me and I forget. Teach me and I remember. Involve me and I learn." - Ben Franklin

Oddly enough, it was from George Mason Univerity's Experimental Economics site.

http://www.ices-gmu.org/

I bought into CBH a couple of days ago because I took a look at the oversold conditions of financials, and this one stood out as being a potential gap up to meet the acquisition price. They're going to get taken over by TD. Any move in the shares of TD will affect the stock of this bank from here. Their "ethically-challenged" former CEO is off doing other things.

He is starting up a venture fund with a former analyst of the company. What to fund? Mid-cap banks of course!

http://tinyurl.com/2jeu8s

Dog bone anyone?

The trend up today is a good change. With rates coming down, how many people will be renegotiating their mortgages (and paying fees to banks)?

Without your site there's no way I would have been this interested in the markets and able to see the games that are being played with stats & stocks.

MtnGntx... so what's your prediction? Where's gold in a month? How about financials?

Do you study neuroeconomics at all?

Bill, thanks for bringing this community together.

jumble,

What might be your take if .spx goes thru 1490 area of resistance? ps..how much are you exposed roughly? Ilike your line of thinking as you try to thread the needle, so to speak.Or, is that me I'm talking about?

22nd_ave

Appreciate your thoughts. Many thanks.

I am tempted to hold onto the financials(MER, C, BAC, ETFC) for one more day seeing the strength of this rally. Sold FNM for a nice profit today.

DUG anyone?

Kaimu - for junk food: only junk MONEY will do ....

Here's a guy unable to use his 1964 quarter in a vending machine! Too much silver, too heavy, REJECT!

http://tinyurl.com/38cm6z

PS: The coin is worth 2.50 = ten times face value!

DJIA rsi/stoch/macd/money flow looks to be exhausting on my 1 min/1hour chart

2nd_ave

Oops. Didn't mean to float you in the middle of the Hudson.

Here comes the OPM...

With a strong close today they should be able to gap this market up tomorrow...

That is the time I will wait for...and add to my shorts...

Isaiah,
While you are there, it might be worth your while to investigate single-stock futures. Once the merger with XpressTrade completes, OptionsXpress will have an amazingly well-stocked menu of commodity futures, futures options, stock options, single-stock futures and more.

I think trading single stock futures is something the day traders and short term swing traders here would find very useful. I'm always surprised they do not get more attention. SSFs have several distinct advantages over shares. However, the universe of SSFs is much smaller than the universe of shares. Personally, I'm studying them and which I wish to trade. I'm building two lists: SSFs which are also Cara 100 companies, and SSFs with smaller margin requirements that a small beans guy like myself would be more comfortable with.

One big advantage of SSFs - going short is much, much easier than with shares. In a fast moving bear I imagine that would be attractive. And there are no funds clearing/free riding/daytrading penalty problems with stock futures.

You also get much more leverage than a stock margin account (with associated risk, of course.)

BUStudent, thanks. It seems these credit swaps are a very reliable indicator of which CRE firms are the weakest. It happened with household real estate first, and now we see the echo in CRE. BTW, I'm no genius. Mish has been yelling about CRE collapsing for months. I'm just standing on the shoulders of giants, looking around.

Bill, you are a true professional.

How convenient. On a 350+ point up day on the dow, JC touts that financials have bottomed.

Can he not go to jail for the things he advises on tv to millions?

http://tinyurl.com/3cxjy2

They are calling it "The biggest 2 day rally in 5 years"

jasper -

As long as the 2000/2007 highs are not taken out with conviction (say 10% breakout), we would be reinforcing a LT multi-top formation with devastating bearish implications.

FYI, 70% gross exposure (30% cash), 50% net long (short via long-dated equity puts hence positive cost basis) with mostly medium (1-3 yr)/long (5+) term holdings. Looking to reload broad indices short via ETF or options (if VIX comes back to high 10s/low 20s).

JML

MikeNYC - my experience with SSF's is that they are relatively thinly traded - thus not as liquid especially in a fast enviroment and also have realtively wide spreads. THis makes them tough for daytrades, but likely vehicles for trend traders.

"Indecision is the fear of failure"
Bill:

Spot on!
Did I mention that I'm not too proud to share a hand off? I'm pegged and completely agree with your thoughts on portfolio management...which I don't think many mgrs of the relatively small account..under 2million, do much of anymore. All asset allocation until the next year's minor tweaking. Though, I might be overstating it as I'm not entirely sure. Just my experience.

MikeNYC

Thanks...looks like I'll be burning the midnight oil tonight reading.

The Fed may have brought hope to financials in the broad sense. Yet it failed to raise CFC from the living dead list.

JML

re options- bias is towards selling them vs buying them, as well as owning the underlying shares...selling puts the cash into your account, and you have pretty much defined your risk (as far as what price you are willing to have your shares taken away from you)...whereas watching time eat away at the premium while you're waiting can get old very fast...JMHO...

Yikes! Spent the morning in the air...landed to discover I'm sittin' on Davy Jones' locker. Lots of reading to catch up on for the cab ride. Looks like you got 'em right where you want 'em, I-man

DaveB,
Yes, they are often thinly traded. John Carter, in Mastering the Trade, which got me thinking about these, addresses that. Since the MM just opens a share position for each future order, he is not exposed. Carter says that the bid ask is often for show, and he'll place a limit order near the price and has no problems getting filled.

He has a quote that says something like "There are days when I can tell by the OI that I'm the only person trading the future and I always get reasonable fills."

I'm just starting out, so I can't speak for experience. But that doesn't sound too far-fetched to me.

I'll find out more as I get into it.

SKF: Craig mentioned SKF's low of 94.51, but that came in the first few minutes of trading. It spiked way down and then way back up before slowly moving down into the 95's later in the day. I added to mine at $95.75.

Dear Bill,

First, I apologize if my post about the Mr. T gold indicator offended you. It struck me as a funny spoof. I didn't mean to direct those individuals only looking for serious discourse to that article with my analogy to the RSI and MACD.

The comment was in no way a jab at your methodologies -- I myself use the RSI indicator extensively (almost exclusively). I was rather shocked to see your reaction just now since I value your blog and insight tremendously. As I mentioned in my "15 minutes" of posting over the past three weeks, I have been a daily reader for the past year and half or so.

I agree with you that it is tough to keep up a sophisticated discourse in a *free* public space. I suppose that this goal and my detraction from it is what got you so frustrated with my post. I hope that my future participation isn't interpreted so negatively.

Regards,
~Brian

P.S. The reason I have under $25,000 is because I am 1.5 years out of college and am toiling under $45,000 in student loans. The reason that I would consider day-trading is because there is currently extreme volatility in the markets. For you to point that post out as a reflection of the quality of my contributions is unfair.

Bill Cara.. Just want to say..
Appreciate this board and your insights into the markets. I am learning a lot. I have been frustrated for years and mostly been out of the stock market because I felt it was a basket of lies and public deception. The only reason I regained an interest is because I now have a 401K and thought I would educate myself.
I have great appreciation for what you share with us here on the board. Not many who want to expose the truth of the insiders and how it works the way you seem to.
Once again, Thank you for giving me hope that I may be able to understand the nature of the Beats" I recently read " The Creature From Jekyl Island" What and eye opener. Anyone else read it?
Bill

Regarding SKF. I'm on the other side of that trade with UYG. I opened it a couple of days ago thinking that the financials had gone down so far that there was no one left to sell. Plus, some tailwind for an expected fed rate cut. I was not disappointed today, though I expect that today was unusual exuberance.

Jumble...thanks! Your multi top concern is worth paying attention to. Perhaps, i'm thinking about this too much. The better choices may be to either to take profits and sit in cash OR tighten stops. I want to make money and still manage risk without giving up too much opportunity.

Jumble...thanks! Your multi top concern is worth paying attention to. Perhaps, i'm thinking about this too much. The better choices may be to either to take profits and sit in cash OR tighten stops. I want to make money and manage risk without giving up too much opportunity, and still stay within my skill level.

sadleb,
For what it's worth, I thought you were just making a humorous follow-up to a ridiculous Mr T post and I never thought you were serious about Mr T being a great indicator worth following. I guess these subtleties get lost when it's just text on the screen. I imagine if we were all saying the exact same things over our 5th our 6th beer, we'd have a laugh and move on. Hang in there.

PS make sure you keep up on those loans. I just paid mine off, and after huge penalties for not paying it on time, well, let's just say it hurts to think about it.

what a day,

my earlier post noted a small short position i took against gold miners,

i was up a small amount before mid-day it started to creep back down,i closed out with minimal profit and use the funds to go in for a quick day trade in the miners on the long side,

crazy timing,and the biggest thing for me was getting out before it went red, and accepting that i was on the wrong side and went to the right side. even if only for a few bucks.

jasper- reward is (almost) always commensurate with risk (for those of us with no advance notice, anyway)...

Just a thought: I remember Bill saying that he may eventually categorize the blog as to daytrading chat vs. longs etc. Wondering if there can be some provision made for the real beginners. I know this blog is meant to educate and share.
I have been reading and learning for the past 15 mos. I check this blog many times throughout the day but I do not blog because I am not as knowledgeable as the regulars. I hesitate to ask questions as they may be too elementary. I can read charts,subscribe to Stockcharts and know some TA. I am sure there are many like me who are beginners. Maybe there can be a beginners section where we can go to learn basics??

And feel free to chat about some basic topics

Korvus,

thanks for the explanations on the covered calls. I'm sure a similar strategy has been mentioned before but you broke it down nicely. Fortunately, my cost basis on UXG is not too far off of todays price ($3.91) but thats UXG.TO. I might be able to use this strategy in the future though, although I need to learn more about options first.

And Shark_Attack, if you are out there, that is sound advice that I probably should follow a bit more closely. Unfortunately, I have read many books (financial reckoning day, empire of debt, coming dollar collapse, etc. etc. etc.) and have become maybe too much of a gold bug. I don't have the time to day trade, so prefer to 'buy the dips'. I'll admit though, some positions I have are down 50+ % !!!! But if I double up on those right now, then I'm only down 25%, and my cost basis is lower for IF and when the market decides to pay them more attention. As bad as it sounds, I do get attached to some companies, and HOPE probably makes up a percentage of my mentality. I'm sure experience will play a part in addressing those detriments, as I'm still a rookie.

I thought I would mention this to the blog, I've told Bill about it already: There is a great documentary out now by Alex Jones about such topics as the Bilderberg Club, New world order, eugenics, NA Union, texas superhighway, and things like that. It is called ENDGAME. you can order it on amazon for about $13 I believe, the video is about 2 hrs long and is a very interesting watch and eye opener for the conspiracy theorist in us all.

Cheers from a COLD Southern Ontario.

re: shift in FOMC's thinking on economy & markets

Fed Chairman Bernanke and company must be more worried now versus early November when they stated that growth and inflation risks were roughly balanced. Today, Fed's Vice Chairman Donald Kohn (and previously Fed Chairman Greenspan's right-hand man) gave a speech where he essentially confirmed the markets' current expectations of another 25 basis point cut in the federal funds rate (and the discount rate) at the next and final 2007 FOMC meeting on December 11th.

Checking the “tell” . . . Carry Trade lives (at least for another day or two).

http://tinyurl.com/yuj8ud

jc173: I am not knowledgeable, BUT I do not let is stop me from blogging here. That you can read charts and understand TA means that you are NOT a beginner. Don't sell yourself short. This community is a generous one.

Apparently I'm not literate either.....BUT I do not let "it" (not is) stop me....

Eric wrote: "As bad as it sounds, I do get attached to some companies, and HOPE probably makes up a percentage of my mentality."

You can have your favorites to trade, but you can't fall in love with them Eric. They'll leave you dry.

As Bill has written--"We trade prices" whether it's a day, weeks, months or years. Remember who's in charge--YOU ARE.

Try reducing your HOPE percentage (thru discipline) and your mind will be in charge. If the HOPE percentage approaches close to zero, you'll be ahead of most of us.

"Plan your trade, trade your plan"

jc173

"This community is a generous one."

Lesia is right on with this jc173.

Ever see my Basic 101 questions posted here?

When I hit the Post button I can hear 2nd_ave, Craig and the rest of the gang chuckling in the background.

So don't be shy...speak up.... or I should say "post up"

Gee on fast money they are yacking about the strong action in the US$ today. On my screen, the dollar index opened at 75.65, a high of 75.67, a low of 75.08, and a close of 75.105 for a net change of .030. Wow, what are these people smoking.

IMO, the dollar's give back is a tell that indicates fed easing is coming and gold will be rising.

Fast money used to be interesting, but has become over produced.

jc173

This community has always been about asking questions and discussing the basics and the exceptional. I am always amazed at all the new techniques, systems and data sources discussed here, which generally start with a "basic" question. Not only do I learn, but I am reminded of things that I have put aside over the years.

The brain power here is exceptional. Bright minds + bright ideas + a bright leader = raising all of us to a higher standard of performance and taking us beyond our own limitations.

Right on Seamus with respect to HOPE. Hoping your positions will come back will kill you. Eliminate hope replace with discipline.

I do not remember who it was, I think Jock said it, but that "when you trade you are really trading against your mind."

I think this is a powerful statement to reflect upon.

Eric -
I second Seamus, falling in love with a company and trying to average down instead of taking a loss in a potential bear market is the most dangerous thing to do for investor/trader.
Let me give you an example of my own mistakes - in 2000 I could not imagine in my worst dreams that a huge company and a market leader like Nortel would go down by orders of magnitude. So I kept averaging down several times thinking "it can go much further, the odds are it will recover" only to see it drop further like a stone in a few weeks in another bear raid.
Companies are not your friends or family members, neither they are your investment ideas by themselves. They are merely tools to realise these ideas and should be treated with utmost mental neutrality.

Apologies ahead of time for market-unrelated chatter...

Wavesmash,

my gig is electrophysiology. Specifically, stimulus and signal propagation in muscle and neuronal tissue. When one (who knows what to look for) assays dried neuronal tissue (brain) the result is an astounding amount of monatomic metals...ie GOLD molecules. Take home message, there is MUCH more gold in our environment than mainstream science recognizes or acknowledges.... VAST QUANTITIES MORE.... so much for the pointless pontifications of peak-golders. The problem is that it exists in a form that most phycisist are reluctant to recognize... a bio-reactive and exotic state that does not conform to mainstream expectations of what gold is. I suspect that it will only be a matter of time before we begin to mine this windfall, quite literally from the world around us. In fact, we currently do so inadvertantly all the time, only to disgard it without recognition.

For me, as both a researcher and physcian, the exotic state is far more interesting and valuable than the yellow substance with which we are all familiar. We still have a lot to learn about its potential uses and purpose. But in my educated opinion, gold's true value and significance to humankind remains hugely misunderstood.

To answer your questions... The US markets are inexorably headed downward and Gold will head upward.

IMHO, of course.

Sincerely.

Hey Folks...

Good article by Doug Klass [Mr Bear]

"Kass: This Is Just the Eye of the Storm"

http://tinyurl.com/yrlqvr

"The credit problems our system faces are real (and probably far worse than most have accepted), and expectations for economic and corporate profit growth are still far too optimistic.

....these risks of a transition from credit/debt accumulation to de-accumulation will be a painful deflationary process.

In summary, in the fullness of time, the markets are likely going lower -- much lower. We face a recession and a disappointing profit picture."

Hello. Anyone out there? Test, test...

MtnGntx - what are you saying about GOLD?

Are you saying there will be other new ways of retrieving gold? that there will be new applications for gold?

I'd really appreciate learning just what you were driving at.

Eric at November 28, 2007 4:53 PM
Re: doubling up on down positions

"…I don't have the time to day trade, so prefer to 'buy the dips'. I'll admit though, some positions I have are down 50+ % !!!! But if I double up on those right now, then I'm only down 25%, and my cost basis is lower…"

I'm no expert, always learning, but I'll throw out my two cents for consideration.

I understand your logic, I've been there done that. I used to justify it by thinking if I didn't own the stock it looks like a good place to buy and thus justified adding more. I understand lowering your cost base, but you now have twice as much capital invested and remember even though your cost base is 25% down you will need 33% up to break even. Also on the downside you would be loosing twice as much capital per move.

I'm still battling with those undisciplined emotions and company luv problems but trying to improve. I'm a medium / long term trader and I don't keep a written log but I do try to at least keep a mental plan, mostly follow that plan and sit back and review performance once in a while. My long term performance is the greatest when I follow the discipline root and follow the plan like a machine without emotions. My biggest losses have always been when I get married to a stock.

I often have friends, investors / traders just starting out who will ask about stocks, they've done the DD and just want some confirmation. I agree its probably a low risk entry at this point in time and then I ask when they're going to sell it. They always think this is the strangest question, as why would they decide now how much profit they will be happy with, they will do that down the road. Well for me this was the best discipline I've added to my toolbox, if you don't have an exit plan then you're not ready to hit the buy button.

The exit on the downside is fairly simple as I'm entering at a low risk point so I know quickly if the trade is not going as I expected and I get out totally with a small loss, sometimes the same day, (every plan needs a little wiggle room which varies by volatility). Then as quickly as possible I move the stop loss up to breakeven and move up with time, (virtually never lower a stop loss).

Now on the upside I don't usually put in a sell order at a set price, (although it happens sometimes), I go with the flow, MA's, MACD, RSI, candlesticks, oversold, change in fundamentals etc. If it gets overextended I will run a tighter stop on part of my position taking profits off the table. Now say if irrational exuberance really takes off that’s when I sometimes put in a highball sell order and am happy to have somebodies market order pick me off. Another way to look at it is if I consider the current price action to be the absolute highest risk entry point then I should be looking to take some off the table.

Most people say its never a loss until you sell it and per the tax man that’s right. But I've always considered my working capital to be whats in my account at the time and any reduction in that value means I'm letting someone take it away and thats a loss in my books.

As an example I'm still learning, left lots of profits on the table on UXG, was only in for a short time, up 25% in a couple of months and watched it all erode, (a little to much wiggle room), in the end I sold it still up a little more than commissions but brought the funds back to Canadian so lost 2%, but avoided loosing another 5% had I left it in US funds. I sold at $4.40 by my rules, second guessed myself for a couple of days, now its below $3.75. I'll watch for another low risk entry but if it doesn't happen, it doesn't happen, go back to following the rules.

Anyway just some other ramblings.

and Hi from Cold South Eastern Ontario

Eric:

...getting attached...falling in love with a copmpany.

Many of us have had that experience and more often than naught have paid for it dearly.

This is what I have learned from Bill and reinforced in this blog to help me overcome these "fatal attractions."

buy the company...TRADE THE PRICE

TRADE THE PRICE: It seems so obvious.

I have spent a great deal of my time dealing with the significance of those words.

I went back over all my buys i.e.all the companies I invested in, since 1999. There isn't one company that I bought that I consider was a bad investment.

After further analysis I determined that for the past 6 1/2 years I have been

BUYING COMPANIES...TRADING COMPANIES

UPON deeper analysis I was able to determine that my MAJOR losses were with those companies that I had the greatest attachment to or had fallen in love with...WHY???

HOW do you trade a company you love? Two people who are in love and get married usually do not get divorced.

buy the company...TRADE THE PRICES has changed my total investing/trading outlook.

I made a trade today on a company that I have been involved with since it was a pup...would I have done it three months ago...no....will I be in it again in the future...all other things being equal...yes

When will I buy it again and when will I sell it....

When the PRICE is right.

PS... If you re-read the blogs and some other sights where Bill deals with his trading style you will find that he is a strong believer in the use of RSI and MACD indicators. BUT he will say that they are not necessarily the be all and end all of the indicators that can be used. BUT he NEVER wavers from his mantra

WE TRADE PRICES

I hope this helps even though we know what hope can do. :>)

(I trust the spelling is ok...I am having with the "i before the e rule" tonight

Group Think

maggy- thanks for a well-timed post...

no immediate take on whether the cara blog is "guilty" of any of the "eight main syptoms" (or to what degree), whether any or all necessarily indicate group think [is group think a "diagnosis" arrived at by ruling out other possibilities, or does the collective presence of the eight doom us? ;}], or whether it can be a good thing up to a point/under some circumstances, but a bad thing beyond/in other scenarios (the "author" of that list definitely was NOT smiling when he wrote it->afraid to ask about context/Table 2 citing groups that come under this umbrella...?)

at this point, i still note plenty of dissenting opinions (although i note the occasional "hope it's OK"), and hope the blog remains that way...

make that "fall" under this umbrella

BH- if i started in lovelock, nv last night, then now somewhere on i-80 between provo and cheyenne and still driving east...not looking forward to the "great plains" ahead...

Bill,

I thought I put a post in today relative to a comment someone made about your opening comment this morning but I do not see it.

Maybe I didn't hit the post button...grandpa mom day.

Part of the comment asked "What caused your reaction?"

I was up a little earlier than usual this morning to catch up on readings that I could not get done yesterday afternoon and evening. I started with this blog and noted that you made posts on Tuesday's blog at 11:31 PM, and one at 5:49 AM. I was reading this 5:49 one not long after you posted it and it struck me that there wasn't much time in between the 11:31 pm post and it for sleep. Then you posted the Daily Report at 7:57am and the Community post at 9:08 am.

I for one wished you hadn't blogged today but took the time to do other things.

Take care of yourself Bill.

ALOHA !!

MntGntx ... You posted, "For the gold bugs, and in response to the peak gold concept ..."

I am not so much concerned about peak gold or peak oil or peak anything as I am MOST concerned about PEAK MONEY SUPPLY! PEAK MONEY SUPPLY follows directly after PEAK DEBT!

Quasi and all:

It looks like ERIC has struck a nerve.

This is why it is important for all members especially those that feel uncomfortabe with posting to make a post. One never knows what it may lead too but it won't lead to anything if you do not post it.

Quasi, you post...

"The exit on the downside is fairly simple as I'm entering at a low risk point so I know quickly if the trade is not going as I expected and I get out totally with a small loss.."

This is the next important thing I have learned here. I have always used entry points but some of them were lousy. Again based on my old BUY THE COMPANY...TRADE THE COMPANY system it was relatively easy to buy it at just about any price because I expected it to be higher in whatever time frame I had thought it would be higher.

So I buy and it goes down... so what? it is going to be higher..it keeps going down..so what, it is going to go higher and besides I will now make it a long term hold.

Oh what fools we mortals be..

Now, I understand the importance of the AZ and DZ and the greater chance that the price will go up after I buy it and if doesn't take the small lose.

I can still "love the company" but "hate the price" and since I am trading the price, I am not trading something I love ....man no mental hang ups.

Makes sense to me...

Cheers from a COLDER eastern Manitoba

Bill,
I've been watching gold bullion like a hawk since I missed that entire run-up from 680 to 850. I've been trying to follow your advice in letting the price come to me, but I saw that little run up in the gold price this morning and began to once again feel I was not going to be able to get into gold. But then I kept reminding myself of comments you made on what you expect for gold--a drop into the mid or low 700s and then a big move afterwords. I figure that you have seasoned judgement, have seen all this before, and especially that you have a perspective on precious metals second to none. I check the MACD, RSI's, stochastics, but I also find that your insider's perspective on how these markets actually operate is invaluable and basically inaccessible to us newbs or outsiders. Today's comments on the bull trap--that the price of gold was being run up to paint a picture that the Fed is going to cut rates and thereby jack up the stock market is for me priceless wisdom. Thank you in spades for sharing your wisdom. By the way, if I make a mistake, I always attribute it to my own actions--that's the only way I can ever hope to succeed. My most immediate goal is first just to try to stay even against the declining dollar--I'm thinking of social security, pension, IRA, ie, retirement. I imagine that many of us here are worried about the same thing and are perhaps even "involuntary" traders. We are being forced to fend for ourselves as the government/HB&B is deliberately transfering our "substance" to those who don't need it, like the parasitic bloodsuckers they are (pardon the hyperbole!).

Boy am I "in irons", Bill. I have been building a short ETF position and feeling pretty smug about it until the past two days. Have recently given up a lot of my profits (SKF basis is 74.21, etc so still afloat) but was totally blindsided by this ridiculous rally.
I am inclined to hold these short ETFs based on fundys, but don't want to turn them into LT investments.
Got out of PMs too early but with nice profits and am now waiting for an entry.
So appreciate what you do for us, Bill.
Looking forward to doing some sailing with you when I come to visit in the Bahamas. I have some friends who keep boats at Man'O War key... some of which I helped them to build.
Lovely Thanksgiving with the whole family here at the farm, but heading South soon. Maine is getting cold.
Kaimu would love the plans I am working on for a co-op greenhouse we will build here in the Spring. We will all be needing it.
Best to the community.
You all keep me from feeling that I'm alone in this struggle. But of course I am....still comforting to hear your counsel.
Rigdon

Bill,

I echo the gratitude expressed today by many others on your immense contribution to the education of the common man in the art and science of trading against institutionalized crooks you call HB&B. This blog, with the contributions of regulars who are also quite obviously seasoned traders, has given me the confidence to educate myself to a level where I can read the telltale signs in the market after years of floundering while my hard-earned savings were wasting away in so-called mutual funds.

Simply using the RSI indicator has netted me several succesful trades this year, most recently on BMO, bought a few days ago @ $56 when RSI was just poking back up above 30, sold out today @ $61 with RSI rising almost vertically. Yes, it may go higher, but I'll pocket a quick 10% in a few days thank-you very much! No sense being a pig !

Anyway, there is one quote that you wrote some time ago that sticks in my mind like a beacon on the horizon to keep me focused on the long term trend:

Bill Cara July 4, 2007:

"As and when rates/yields plunge (following a collapse of the equity market), the value of HPEC's present debt will soar, after which they will securitize it and sell it back (in the form of a debenture) to We The People in America, and (they hope) abroad."

This message hit a chord in my mind, alerting me to the raw greed of institutional brokers only too happy to use my money and that of millions of other little guys in a calculated rip-off. Well no more. Now I know their long-term gameplan and have become nimble enough to profit from it.

May you remain healthy and happy to share your wisdom for a long time. Many thanks!

bb,

I also owe you a big thank-you for pointing to deeply oversold BMO last Thursday, when you wrote:

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.

Posted by: bb at November 22, 2007 3:07 PM

thanks !

for those caught in various stages of submersion (and those who feel it was more like immersion):

nice thing about a blog is comments remain archived and you can go back and see what you/others were saying earlier (and with how much conviction) vs "how it actually played out."

august 16->DJIA down 750 points (at the intra-day low) in two days->how hard was it for bulls (especially gold bulls) to buy into the sell-off?

DJIA now up 546 points in 2 days->same bears who lamented selling the ultrashorts too early two days ago now reluctant to buy...

if you are buying on weakness and selling on strength it's hard to veer too far off the path that keeps you in play...emotions sometimes get a bad rap, but not at all a 'bad thing' as long as your intellect stays on top of the balance bar...when the market moves against you, then as with all things in life, take the helm and navigate your way through it->can't recall how many times i have seen the black/white/black exuberance/despair/back-to-exuberance regret/relief ebb/flow play out on this board...has to be the way human nature is programmed, it's endless...when things are good, don't get carried away...when things are bad, don't get carried away...if "the market is us," there is absolutely no doubt that the ebb/flow of human nature will find you in the opposite camp and ready to immerse yourself again ;)

What a day it's been. The blog had a strange day, that's for sure.

Today started early for me, as I am traveling on business. About the time I was up Bill had just put up the daily report. (Bill, you were up late last night) I checked in on my portfolio, and wondered what I was going to with my holdings. I have been in fast dance mode for the past two months. Saw the aftermarket trades for ETFC, and was shocked to see 1.5 million shares had changed hands over night and the pre market price was 5.06. It was also clear that the market was set for a boomer. Put a limit sell in for ETFC at 5.25 (yesterday I said "5 and change") and felt comfortable. Next was wondering about WFMI. Decided to let WFMI ride with the market the next couple of days. I've got a tight stop on it... and tomorrow, well, it's going to ride with the incoming tide.

Was suprised that my ETFC limit sell was met by 08:20 mountain. It went higher (5.43 or so) but closed pretty close to my limit sell. No regrets, and no attachment.

The moral of the story? (This is to share with Isaiah)... I need to approach each trade, and each day I plan to trade or have money riding, with a plan or a set goal. If the goal is obtained... pull the pin, if it goes the wrong way... pull the pin. There's another bus to ride.

I had my ass handed to me with the miners a few weeks back, and the last couple weeks have been a freakin' "Market Wizard's Master Degree Boot Camp".

Finally, my cut on the blog for the day.

Take a deep breath, think of Leisa's advice about love and zen and good chi and such... (not quotes, just the general message)and try not to be so sensitive or defensive.

peace out

Hang Seng up more than 4%! Asian/Far East indices all up except NZ.

Another country reducing dollar exposure? Looks like UAE to switch from fixed USD pegs to a currency basket including the euro. Anticipate announcement this weekend or on or about December 20.

http://tinyurl.com/2qesxv

Hi Guys,
Don't take your eye off the ball!!!!

From our friend Colin Twiggs: "--------------------------------------------------------------------------------

Mark Douglas: Trading In The Zone

We spend most of our time studying entries and exits, but the most important factors in becoming a successful trader are money management and self-discipline.

Read my review at Incredible Charts Traders Store.

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

Click here to view the Trading Diary in full-screen view with your web browser.

Fed Rate Cut Likely
By Colin Twiggs
November 29, 2007 2:00 a.m. ET (6:00 p.m. AET)

These extracts from my trading diary are for educational purposes and should not be interpreted as investment advice. Full terms and conditions can be found at Terms of Use.

"Dow Failed Breakout
The Dow reversed, penetrating the upper trend channel, after a failed break below primary support at 12800. One of the biggest mistakes analysts/traders can make is gathering evidence to support their existing position rather than opening their mind to new possibilities. Another common mistake, however, is to shift your position back and forth in response to each new piece of evidence — before their is clear proof that you are on the wrong track."

"Probability may have shifted slightly with Wednesday's strong blue candle, from say 80 per cent to 75 per cent, but remains firmly in favor of a bear market. A higher trough, as with the FTSE below, would increase the contrary evidence, while reversal below 12800 would push the probability back above 80 per cent."

So what is a person to do?
See 2nd's post. I have my Cap'n hat on and I'm piloting through. I'll trade the upside if I can and likely add to my ultras if the opportunity presents itself.

The last two days could screw with your head if you are open to being lied to. JMO.
Over 500 pts in two days? Anyone ever seen that without a return to mean?

This damned fence is uncomfortable...

Also from CT's report:
"Its not whether you are right or wrong that matters, but how much money you make when your right and how much you don't lose when your wrong."

~ George Soros

Top o' the marnin' lads and lassies.

Here are your U/Ds to the Cara 100 for today:

New Coverage:

PG - Neutral @ Credit Suisse
STO - Outperform @ Bear Stearns

Have a great day and play nice. :^)

Thank you, Bill !

To all concerned:

From TDWaterhouse this am

Consensus estimates (metals and minerals) heading down...It is clear to us that consensus estimates are likely to fall over the next several weeks as the analyst community updates it numbers.

Ho-Ho-Ho! Merry.....what? Jobless claims UP over 20,000 over estimates?
Jobless claims highest in two years.

Income rose(?) at 3.8% pace revised DOWN from 5.3%

GDP: Pick the trend....down, down, down.

Korvus:

Do not want to bother you on this while market is open as I expect it is going to be a hairy day.

re: RSI program

"GO...GONE" gotta love it.

I have 2 symbols that I do not get values for. I have gone to Yahoo site and I can get charts etc for them....???

Craig, recession numbers. I don't see how the market doesn't reverse today.

But then again, I've been wrong many times before. ;)

And will be again, to be sure.

now we have daily RSI-7s in the sixties:

http://tinyurl.com/3yvzkg

week ago hopes for FXP>100 dashed by closed markets in the US, two days ago by Abu Dhabi->no reason (yet) to lower your sights...don't be too quick to forget the story you liked so much, was it just two days ago...

Some morning humor.....

Redd Foxx impersonates the Bull Hunter as the Dow rises over 500 points in two days:

http://tinyurl.com/322cbz

:^)

Well #2son,
I was beyond wrong yesterday (on several fronts). Hoping to get a little better today. I need to clear this piece of my butt caught in that bear/bull trap deal from yesterday. 500pts in two days..... if they are going to run a trap, does it have to be so obvious?

I don't know if the reversal will be as large as hoped (by me) but we take what we get.

http://tinyurl.com/yu226s

Mark Hulbert on Momentum Trading

Etrade...loses 8 billion in deposits since sept.

Citadel is buying in for a few million and they jump 11% ????

Hope does spring eternal.

craig- short-covering accounts for much of it...even Novastar (NFI) and AHM jumped countless times before burning out...

Sorry, Etrade got a couple billion (2.8 as I recall), not million.

Still lost deposit/reserves well over the inflow from Citadel.

And a second component of the ETFC deal is the purchase of $1.75 billion worth of 10-year notes, paying an annual interest rate of about 12.5 percent.

11% yesterday, 12.5% today, seems to be the new modus operandi. Mind boggling.

And a second component of the ETFC deal is the purchase of $1.75 billion worth of 10-year notes, paying an annual interest rate of about 12.5 percent.

11% yesterday, 12.5% today, seems to be the new modus operandi. Mind boggling.

Fed Rate Cut Likely
By Colin Twiggs
November 29, 2007 2:00 a.m. ET (6:00 p.m. AET)

Dow Failed Breakout
The Dow reversed, penetrating the upper trend channel, after a failed break below primary support at 12800. One of the biggest mistakes analysts/traders can make is gathering evidence to support their existing position rather than opening their mind to new possibilities. Another common mistake, however, is to shift your position back and forth in response to each new piece of evidence — before their is clear proof that you are on the wrong track.

http://tinyurl.com/7fw5r

SHLD- will open well below the 52-wk low...who will be first to issue the requisite downgrade?

The market's version of ambulance chasing.