Morning all!
Anyone thinking of going short of Allstate today, either directly or via puts?

The FL Ins Commissioner suspended their license yesterday afternoon so they can no longer write new policies - of ANY kind, including car insurance - in FL. Should be an interesting day for them today.

On the airline front, Continental posted an actual profit for Q4, and Reuters reports AF/KLM would back a DAL merger.

So with the action lately, those stocks should all to tank today, lol!

Good luck everyone!

BK - Bank of NY Mellon posts 65% decline in net earnings says the headline for this morning's conference call. Actually, the weekly chart for BK shows that relatively speaking, BK has held up pretty well for a Financial, so far, but if this news doesn't make a significant drop in share price, it might be worthy of watching for a buy gap soon - after all, it is a member of the Fed I think. It is not yet in the AZ(weekly), but its history is one of not being there long when it does enter. This time could be different, of course, and even then, I'm not taling long-term investment here.

No position.

To All,
I get a market letter from a well known blogger many people here read that says the number of NYSE equities below the 200 DMA is approaching the levels we saw in 1998 and 2002. Not there yet but getting close.

I think we are going to see money coming back into the markets as we get close to 12000.
It may not hold, but the signs are already there.

Example: Merrill reports a loss three times as great as expected and it falls but the financials (XLF) hold. Looks like some tech stocks are trying to come back as well. See aapl, rimm, ebay, etc.

I'm UW on FXI this AM and sold the SKF premkt.

Be careful and good luck to all.

Cramer going nuts on CNBC again. "I have never seen this level of fiction in financials."

Craig

Good AM...
Still learning the lingo here...
"I'm UW on FXI "
What is "UW"..[underwater?]

Glug....yep.

WOW! Cramer airing the truth this AM.

Ignore his craziness and listen to what he's saying. He's laying it all out there. Amazing.

Not near TV - what did he say?

isaiah- FXI set to open at yesterday's high->check your exposure...

This should be another YouTube Cramer classic. I find it amazing that they allow him to air some of his statements, like how the financial institutions offload their bad paper to "dumb investors" in places like Germany, Australia and Florida. Why are they singled out? The bad paper seems to be evreywhere except perhaps Cuba, Russia, Iran and North Korea; methinks Wall Street and Washington are not in synch with their objectives.

Craig

Yesterday I took a major hit FXI....MAJOR HIT !

Then I chickened out at buying back at 147.xx.
Then I doubled up at 152.95.

Looking at the pre market bids... I now stand to make back my loss, plus a profit. Maybe a handsome one if it doesn't turn back on me.

Keep in touch today if you decide to sell FXI.
I'm still working on my timing. I am either way to early or a way too late when it comes to selling.

craig- thanks for the timely reminders about trying to catch a bottom...would be ironic if yesterday's sale marks the turnaround in the N225..

Interesting article arguing that the rise in oil consumption by China will be far more tempered than U.S. media makes it out to be. However, the argument also predicts that the overall effect of rising Chinese oil demand on the U.S. economy will still be quite troublesome to U.S./China trade, etc: http://tinyurl.com/22hs9p

snip -- Chinese leaders have deliberately held down living standards for their own people and propped them up in the United States. This is the real meaning of the vast trade surplus—$1.4 trillion and counting, going up by about $1 billion per day—that the Chinese government has mostly parked in U.S. Treasury notes. In effect, every person in the (rich) United States has over the past 10 years or so borrowed about $4,000 from someone in the (poor) People’s Republic of China. Like so many imbalances in economics, this one can’t go on indefinitely, and therefore won’t ... China has an exquisite dilemma. If they allow their economy to expand too rapidly, and pay any price—they can obviously afford it—for additional imported oil or finished products while continuing to support domestic price ceilings, they will help push world oil and gasoline prices so high that they will harm their customers, driving down demand for their exports -- end snip

He's basically saying the same thing Bill has been saying for years. HB&B for the most part (he named a few exceptions in his mind) is out to screw you and "jam" the customer.
And the SEC is worthless and regulators do nothing, especially if you are wealthy.

He claims GS doesn't, but I think that is fantasy.

I do find it interesting that two or three days ago he was calling a "bottom" in the financials, but today the line is "I have never seen this level of fiction in financials."

2nd

I have a story for you. Will email you later on after the close of the market.

Thanks for you help yesterday.

2nd

your [typo city]

Good morning, Mr. Phelps. Your mission, should you decide to accept it, is to make money in this insane market.

Here are your Cara 100 Ratings Changes:

Upgrade:

BA - to Outperform @ Bernstein

Downgrades:

ADBE - to Neutral @ UBS
INTC - to Market Perform @ Charter Equity
SLW - to Sector Underperform @ CIBC

Target Prices Lowered:

LLTC - $35 to $33 @ Caris & Co.
LLTC - $36 to $33 @ Jefferies & Co.

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

Good luck, Jim.

2nd,
Hope it helps! If I sold half my TM position yesterday, it is likely the bottom! I have a way of doing that. Notice what it looks like today?

Looks like a bounce come hell or high water.
Nibbled on QLD premkt. as a trade.

I can't believe the financials and XLF/SKF.
Too much manipulation to get a decent play.
Tragic news is good and so-so news is tragedy...I need an interpreter.

If Cramer is telling the truth today then that means he managed to unload all of his financials yesterday during the mini rally.

Cramer link here:

http://www.cnbc.com/id/15840232?video=624755222&play=1

"Just put it on my 401(k) Debit Card" ????

Sometimes my innocence just leaves me speechless! More at link:
http://tinyurl.com/3e2frm

"Why do they wait for a crisis to say they need to do the right thing?"

For the same reason HB&B serves themselves, human nature. Disasters of any kind, financial, engineering, etc. are usually required before enough people are pissed off, lessons learned, & meaningful change is made.

Bill,
With all due respect, if they are not out to SERVE us, then the opposite is the case.

When they choose to serve themselves, family and friends, etc, etc. they also are choosing to NOT service the needs of customers, most especially if they trade against their customers and use that data for their own profit.

If they served the customer and held that as their highest purpose and it didn't result in periodic (constant really) devaluation of all of the assets of their customers and the loss of net worth, then, like all businesses, the customer's wealth would then make them wealthy in kind. See Costco or Starbucks.
Customer first, owners profit handsomely.

But that is not how it works, is it?

I think we're seeing panic in the bank CEO's eyes. He knows that 90% of what they sell us is based 100% on TRUST. And that just happens to be the commodity in shortest supply presently.

Regarding the article posted last night about how Goldman is raising their price target on Gold and even saying it could reach 1000 this summer.

I remember the last time Goldman talked about Gold. It was sometime in December when they advised their clients to sell. That was just before Gold shot up over 900. So, I think people in Gold should be cautious now in case that was the signal by Goldman for everyone to sell. What does everyone think? Does that make sense?

Rob.

craig- be careful->not so sure the opening rally doesn't get sold...

isaiah- ditto...why not take at least 1/2 off the table if you're back in the green..

Nibbled on Allstate Feb 47.5 puts...waiting on further developments to see if this is a position I'll close today/tomorrow, or hold longer term.

NOT.V- opening at 3.53 (USD)

Re: Cramer
Here is a snippet of a blog post of Cramer's on realmoney.com from yesterday entitled "There's Nothing Good Happening":

"In the end, everything fails. In the end, oil goes down and gold goes down and copper goes down and grains go down. In the end, banks fail and brokers fail and toxic debt defaults and some of the insurers go under.

And that's what is happening now. Gold's getting killed and so is copper. All of the hiding places are getting flushed out, which is why I finally said Tuesday, "Enough with the agriculture."

While it is happening, you see drastic price declines that you never expected. Breathtaking. This is what happens when everything goes wrong.

Which it is.

We are in the heaviest, most intense deflationary spiral of our lives.

Ladies and gentlemen, like a few other times in my 29 years -- 1979-1981, 1987 and 1990 -- there's nothing good happening.

Don't pretend."

I didn't check to see if the entire post is on thestreet.com.

WGW- opening at 3.46...(short large-cap miners/long juniors)...

Just a reminder that Monday is a holiday and US markets will be closed.

Now, if I had a bunch of shorts, and if I wanted to make a long holiday out of it, what would I do? Tomorrow is Expiry; so, do I roll over my shorts now and tomorrow morning, or just buy to close and then wait?

"Do ya feel lucky, Punk? Well, do ya?"

Even Cramer is bearish now. Does anyone agree that all of this negativity points to signs that the market will get a bounce in the short term?

SDS - Long @ 61.08
Using MACD(13,32,9) and STO(22,12) on intraday 3-minute chart, a slight modification of yesterday's moderately successful technique. Let's see if I can keep from selling too soon (again).

FXP- opening at 86...

AdamG,

Using Cramer as a contrarian indicator, I'm looking for something to buy for a short term swing trade.

I like the way you're thinking.

Regards

SDS - Up to 61.64...and back down a bit...Itchy trigger finger....."Patience, grasshopper!"

Thanks to all who posted the Cramer info and link. Good discussion material, whether he's right or wrong. Agree that now that he's bearish, maybe it's time to be bullish. Also agree that Goldman's call to go long gold could be signal to sell. No matter what he says about Goldman "never jamming," GS has already admitted to going short subprime, while they were selling it to others at the same time.

SDS - Out @ 61.71

Well well...

I think maromatics's scenario for a short squeeze set-up and possible rally attempt by the end of the month is playing out as he laid it out.

Cramer telling the truth today (read: go short financials) is a good contrarian indicator :-)e..

Some other aspects that seem to support this view:

- Check the Slosh Report at www.gmtfo.com - HB&B returned $33B today, and no returns are due until the 24th. Even then, it's only $9B left. So the liquidity-drain must be almost complete, and certain non-HB&B hedgies etc must have been washed out. Margin calls and the like.

- Large-volume intraday money flow in QQQQ and SPY indicates buying during the downdrift since January 10, up to today. QID also agreees - slight large-volume selling there).

Let's see... Disclosure: long QQQQ and SPY index March calls.

OG- pressing the short side->but nothing wrong with playing the same trade a dozen times in a day...wife often outperforms me when she's able to trade, simply b/c a dozen short swings can add up..

OG - the STO (22,12) is that fast STO, full STO, slow STO, or STO momentum indicator?

Here's an old article of deflated price charts comparing the Dow and Gold:

http://www.321gold.com/editorials/hoye/hoye120705.html

Note that point '14' is the $900+ target. The $650+ target was exceeded and went to ~$730 in May, 2006. Thus the price activity deviated from the model at that time, but I wonder if Bob realizes that the timing and price levels might be conforming with the original model, and that gold is really true to form?

http://www.institutionaladvisors.com/pdf/060117-HOY_CHARTWORKS_Gold.pdf

For those of you who own WGW check this out:

DOW JONES NEWSWIRES

Western Goldfields Inc. (WGW) has completed the first 2008 gold pour of 1,000 ounces at its Mesquite Mine in California.

The Toronto company said the first gold pour at Mesquite is the "final milestone" in the transformation of the company from gold developer to producer.

The company said gold sales for the month of January are expected to be about 2,700 ounces, exceeding the January budget by more than 30%.

The company expects to produce about 155,000 to 165,000 ounces of gold in 2008.

Capital spending through year-end 2007 on the expansion project was $98.4 million and the remainder of the $109.2 million delvelopment capital will be spent in the first quarter of 2008 when the remainder of the leach pad, processing facility and truck shop are completed.

Dow Jones Newswires

01-17-08 0943ET

cramer- no problem with using him as a contrarian indicator, but keep in mind he has a large audience, and ST market reaction may not be contrarian...

Averaged down on PNP.to at 3.59. Trying to get my basis as close to NAV as possible. I am now under $4 usd.

I love it! When Bernanke started talking QID was at or slightly below 46; now it's approaching 47.

Keep talkin',Ben; how about a "Talkathon"!

Off the FXI express...
made it out at @156.5/156.14/156

Made up 87% of my loss from yesterday. I can surely live that !

:^)

FXP- out at 90.82...

From research I have heard about, short interest is not very high. Therefore, short squeezes will not be very sharp. Shorts have been quick to cover apparently. That also means that there is not much holding the market up.

S&P has hit new lows. This doesn't bode well IMO. There needs to be a rally soon or everyone will give up on it and the gates of hell will open.

Great article discussing Goldman's subprime positioning

http://www.bloomberg.com/apps/news?pid=20601039&sid=aEXlKAu61sYU&

correction: with that

[I'm so excited I got out of that deep pit that my typing is worst than normal]

isaiah- congrats...nice not to be playing against you this morning ;)

NG storage down again.

2,691Bcf vs 2,750Bcf last week and 2,949Bcf last year.

moab - last night Fast Money had a guy (last name of Worth) on their "Chartology" segment. Had the 1yr S&P chart up highlighting the same thing (was also right in line with comments made on Genesis' blog Market Ticker).

Heh, dunno what that means...mebbe short term bounce, near term gates of hell scenario, long term buying opportunity after bobsled ride?

isaiah- i would have used a word that rhymes with pit, but glad you're out ;)

2nd

:^)

Thanks ! Feels sooooooooooo good to be in cash now. The volatility of yesterday's market was brutal...

Anyone see this?
ABK down 60% after Moody's warns

http://tinyurl.com/38363s

MBI is also down close to 30%.

These two will likely go out of business.

Rob.

Wonder if Ron Paul is in the house today.

reenzo - STO(22,12) are my own values plugged into Fido's Active Trader chars, which display (I believe, based on their documentation) a fast stochastic. Indicator just flattened out, meaning I should have held to 61.54.

Make that 62.54

writersblock,

Unfortunately, it appears that the good doctor is campaigning in SC this morning.

Betcha Helicopter Ben is delighted. :^)

thx OG...looking at my positions using those same values is helping ease my intra-day jumpiness

I am switching between 1 min, 3 min, 10 min to look for confirmation on loosening or tightening stops.

I *think* the 1 min is warning, 3 min tell, and 10 min confirmation. I have no idea if this will work, but it makes me feel better anyway, LOL!

onlineaces, thanks again so much for STT. Down $3.
Enjoying the ride with all puts today, everything is red on my screen.

BTW, TD AMeritrade, when asked about ETrade and how they benefited from all the fleeing customers "any acquisition of ETrade would be very complex and risky".

reenzo - The important thing is to find something with which you are comfortable, that is not inordinately complex, and that works for you.

I'll be wathcing XLF (financial etf) closely today. It's starting to feel like a good possible entry for a short-term (2-3 days) trade long.

Dave

WGW- adding at 3.34...

MON & BG continue to be clobbered.

Oh, the humanity !

Was going to short SDS @ 62.75; never got the chance, as it only bounced to 62.74. Need to re-read (moab -- disregard the following) Jesse Livermore's admonition re the perils of trading "at limits".

You're onto something Dave.
It looks like it's trying to form a ST bottom here. I'm watching Williams %R as a tell.
It's gone from the high 90's to 50's and macd/stoch have turned up....as has the price.

Waiting for it to form a ST V bottom.

bull hunter,
looks like the ag sector is giving up - deere and POT are also tubing

watermelon,

Looks like the Cramerheads will soon be in the soup line. :^)

DaveB, thanks for the link to the excellent Michael Lewis commentary on Goldman. Kind of gives "thinking outside of the box" renewed credibility. If, that is, that really is how it happened.

XLF and the SPX.X have the same chart moves. If you are buying the XLF you feel good about the S&P.

Craig - we're coming to a similar conclusion using different criteria, so it makes me feel good about my reasoning. I'm wathcing positive RSI divergence (daily) and a thinking we may set up a nice island reversal pattern here. Again, I'm thinking of a 2-3 day updraft setup here with no specific target in mind (which makes me a bit more cautious.)

Isiah....Do you have a method for trading FXI so you are not caught buying high and selling lower?

XLF- ->UYG for those who like to turbo-charge the trade...

stktrader, the SP500 just broke support from early March 2007, whereas the XLF broke that support back in July 2007. Perhaps the XLF is leading the SP500 - I don't know.

Looking at the two charts, I'd be much less inclined to get long SP500 until it crosses back up through that old support.

I won't really have a good read on any of this until eod today, since I always trade off eod pricing.

Dave

Thanks SiO2, I was tettering on whether to sell with a gain. Your post and the realization that UNG is not causing me as much stress as UXG and ECU puts things in the proper perspective.
Thanks to all who post here especially you Bill. Having your Recap and Commentary available at or before open gets me started on the right path.
peace and good hunting
Gray

DaveB,
I am looking only at the intraday chart in the last two days on the 5 min chart. Continue on!

And these folks are "in charge" Bill!

Scary indeed.

And the nutcase talking now, Mr. Lundgren from California, is a knothead. I'm sorry Californians. You need to pay attention at the polls and at the bank and accountant.

Apparently we need to explain simple economics to those who think it's so damned simple.

How is we have to explain how tax cuts to 1% of the population cost the other 98% a lot of money?
Are politicians retarded or dishonest?

Dave: My V bottom is turning into a small r.

No commitment yet.

Stktrader - our posts highlight the difference that a person's timeframe makes on trading decisions and postings here!

Both may be right - just different timeframes...

Dave

Photogray, FYI, next week's drop is expected to be -150Bcf. I just bought another load of HNU.to.

That was hilarious Bill! Maybe she did it on purpose? Her chances of getting it right were like 95% anyway.

Photogray, FYI, next week's drop is expected to be -150Bcf. I just bought another load of HNU.to. If and when it drops below 2Tcf then there will be a major price shift. If and when.

That was hilarious Bill! Maybe she did it on purpose? Her chances of getting it right were like 95% anyway.

Are posters so dim that 1% from 100% is 98%? LOL!

Boy do I look good now! Excuse me Mr. Lundgren, can you help me with my subtraction? LOL!

EEMTRADER

I never planned on owning FXI, I was just using it to play the dips the other day. I think they refer to it as scalping. Then around 2:40 or so I was unable to access my Scottrade account and I got caught at the end of day holding FXI. The next day it tanked on me and I played catch up trying to get out of the hole. By the grace of
G-d I got out today with a slight loss. Lesson well learned! Never scalp.

http://traderfeed.blogspot.com/2008/01/weak-market-weak-vix-what-it-might-mean.html

contrarians beware...

rob d,

Not that I'll ever stop being a contrarian, but that link is interesting. Thanks.

Craig... don't forget fees... at least 1%. Could account for the discrepancy... :)

At least nobody called Big B "Mr. Greenspan" yet

HGD coming back in from the cold this morning.

Also, any feedback from anyone on CBH? TD is acquiring them... stock took a bit of a hit again today... probably something to do with another shareholder lawsuit.

"Shareholders claimed, among other things, that the deal was undervalued, riddled with conflicts of interest, and that the termination fee that deters Commerce from seeking another suitor was too high.

"The only thing they got for the class was a reduction in the termination fee (but) the reduction is contingent on the TD Bank deal closing (when) it's too late for another suitor to come in and bid," Rozwood said."

potash -pot sure is taking a hit down $15.00 to day wow!!!!!!!!!!!

Keeping my eye on Cara 100 member, DEO. This one is moving down and should be a decent defensive play in a recession/economic slowdown.

Waiting for Buy Alert/Godot.

It looks like all the longs are throwing in the towel. There doesn't seems to be any safe sectors except being short.

Looks like Bernacke has the same effect on the Markets as Bush.

Rob.

Stopped out of MOO for a loss.

Sector rotation out of ag companies today as noted by others. Exception: ETFs related to the grain futures, like RJA, JJG and DBA having good days.

As Bill has written. “I have said this repeatedly. I think the rats are buying time to jump ship. As the sectors and industry groups are hyped up one at a time and then sold off, it appears that HB&B is clearing inventory.”

Gold last one on the dance floor.

Isaiah - Maybe the lesson is "get a better broker".

Sorry to read that, Seamus.

These are great companies that are of huge interest to me. I'll be looking to buy into MOO or some it's components after the big one.

OldGoat

You're right. Craig did and it's about time I do the same.

SDS - Short @ 63.59; same technique as earlier.

Isaiah - I know a lot of folks here use IB, but you might checkout ThinkorSwim (ToS for short) at www.ThinkorSwim.com.

Low commissions, great tools, very reliable, very good customer service.

BCE dropped almost $2 due to rumors about buyout... recovering.

test, just got two server errors, can't post

new daily high for $VIX just now @25.54

I think today is a good day to keep a close eye on some junior exploration companies for capitulation. It is days like today when forced selling may cause forced selling and provide some great opportunities.

Several server errors, 15 mins ago, will try again.

Bull Hunter

Yes looks like all the hype on FETV the last while has created a top in the AG sector. Lots of profit taking the last couple of days.

Almost all on my AG watch list pulling back, keeping an eye on the big guys for a new entry on the long side. But will need to see some signs first, POT, BG, MON , MOS, CF etc

Summary chart view AG list

http://tinyurl.com/39tz8g

Margin calls - I once read an article on margin calls - and recall that article stating that such margin calls generally occur around a certain time of day (I'm thinking 1:00 or 2:00). Does anyone here have information on this topic?

Dave

BH Yes, there are great ag companies with a niche and there will be opportunity. MOO has a large portion of MON and BG which explains its moves. Some may want to play the rebound with MON & BG but you'll have to move fast. As I tell myself, patience, patience.

Been reading Taleb's Fooled by Randomness. He refers to a strategy of skewness where there's a small chance of a large loss and a big chance of a small gain. He compares it to Russian roulette where you win for a while until you're dead. Not where you want to be.

there is going to be a relief rally...when these people stop talking on TV.....

Boy, XLE (a LT holding) is falling out of bed. Now would ordinarily be the time I pick up a bunch, but in a overall bear market I feel more uneasy about it. My discipline has been to buy at these levels but I'm rethinking my tactics for the changed conditions....

Things are getting even uglier than the major indexes would indicate.

Even highly thought of stocks are being dumped indiscriminately.

Abandon all hope, ye who enter here.

Biggest gainers on my watchlist over the past 12 months are VIP, PBR, RIO, JEC and MON. All are up at least 90%. All are arguably good comapanies. I expect profit taking to knock back at least half of those gains.

Round 2 of options expiry day maybe? Margin calls?

i didn't mean "don't be a contrarian", I was just referring to the posters who are looking really hard (perhaps too hard) for a tradeable bounce. I should have explained the reason for my post... but glad you liked it BullHunter.

Seamus, et al - rats may be jumping off of the ship, but don't some of the rats have to stay invested all of the time? If so, the game is to figure out which island they'll end up playing Survivor on.

Isiah, this is none of my business, BUT...you are playing as an addict. I'm saying this out of love, not resentment, but all addicts end in the gutter. You need to examine your emotional swings, go to meetings, etc. Stop trading! My apologies in advance for my bluntness.

SDS - Stopped out @ 63.39; had lowered stop in line with 3-minute PSAR, hoping that by abating fear of loss, I could focus on hope for a big win--in effect, trying to channel Jesse L.

Still, a win--however small--is a win. Now watch this particular train head south (or not) without me on board. But there will always be another train.

charlieatthelake:

I wrote this to Bill on Dec. 4th, 2007....

"Bill:

Should we be concerned with Isaiah64v4 or is it just me?

If he is for real is he in too deep?

I do not need nor want to know any particulars about him or his trading but if you know more about him and you are not concerned just let me know.

Thanks,...."

I never got a reply.

Sentiment...I was just reviewing a Blogger Sentiment Poll (Birinyi) taken on a weekly basis. The results are interesting and may give us food for thought: 47.83% Bullish / 43.48% Bearish - leaving just 8.70% Neutral. Both the bullish & bearish readings are high, however the most interesting ascpect to me is the lowest reading of Neutrals since they began this poll (mid 2006). Legitimately, the poll has a short hisatory, but it appears to do a good job of generating contrarian readings.

So what does this all mean, I'm not sure - maybe others can chime in on this. I'd say that the very high level of both bulls & bears says that most people are invested on one side or the other, with little cash on the sidelines to be put to work. That's why we see reversals that don't stick - it's an evenley matched tug-of-war right now.

Simply a few thoughts for today...

Checking in 2nd....a penny for your thoughts...

Also...look at the XLF. All but money flow appear to be heading higher at this point.

See post I sent and then apply to the 5 min daily chart of XLF along with Q's and DJIA (to get general trend).

Isaiah,

My sense is that you are doing okay ($$) on balance. I think that because you are exuberant and forthcoming, it's a little concerning to less extroverted traders. I sure hope you don't take offense to the well-meaning remarks and go dark on us, as you certainly are an important part of the mix here, asking good questions and often comic relief.

Ah, I love this board: Vonnegut, Beckett... What's next?

What more market news is coming? What econ data? Who's reporting soon? Who is giving a speech soon?

Shoes are dropping, and bodies are floating to the surface.

DOW @ $35, PE-9, yield 4.75%

recently signed two large contracts with Saudi and Kuweit worth 22B & 9B respectively. Should go up when oil prices go down.

no position yet.

Perfect contrarian for a bounce...Maybe?

But not yet..Need to see the panic sell at any price...

We may get a little bounce, but wait till they are selling at any price...

Craig,

Re "Also...look at the XLF. All but money flow appear to be heading higher at this point."

Maybe I'm mis-interpreting your statement, but XLF rates a 'Descending Triple Bottom Breakdown' on the P&F at stockcharts.com, with a bearish target of $24. MACD doesn't look very healthy either. I suppose going long XLF in the short-term could catch a brief rally if/when the administration deliver on their emergency rescue plan or PPT make their regularly scheduled appearance at 2:30 PM, but longer term I don't see XLF reversing.

Am I missing something?

today was a little scary but not a panic or capitulation by any means. Still looking for 12000, and then....

I have a question. When do all of those people with IRA stock accounts, which they can't short, start selling off in mass?

FattyArbuckle:
How 'bout a little Hemingway: The Sun Also Rises?

Yes, timeframe. The longterm timeframe is as you say, but intraday for daytraders is quite a different thing.

Excuse me, WAS a different thing as I started writing. Ah how quickly the market changes...

I'd guess a large part of this sell off is a rapid unwind of the carry trade as the Yen hit 106 a coule of days ago..It has since risen to 107.The BOJ had jawboned previously that 107 was the line in the sand. This time down they were silent. A 3m chart of the yen paints an interesting picture.

Carry trade selloffs are the worst as everything gets sold...winners and losers alike. Those of us who are not daytraders are certainly challenged on days like these...the conviction of one's investment decisions are put to the test.

I'd also guess that the dollar will continue to lose value after the Fed cuts rates again and select investment in essential commodities and precious metals will offer protection to the dollar decline. If the Fed gets too agressive in cutting rates and boosting the money supply, stagflation may evolve into hyperinflation and the level of fear will rise. Gold's monetary role should be reconfirmed.

It seems as if we'll need more bad news to drop further from here. What's on tap for next week besides tons of earnings? Most of the banks reported this week so it will have to be someone else going under the knife.

Maybe APPLE with disappointing profits on Tuesday.

It is starting to look like the smart money sold calls this month and bought puts unless we see a huge rally in the next 8 trading hours.

Rob.

craig- i see a divergence right now btw the DJIA/SPY->vs FXI/QQQQ....i'm thinking about going long UYG/FXI, but the drop in DJIA/SPY is bothering me...

Watermelon...

When they give up HOPE....

I don't see much if any hope out there!!

Rob.

Who has any hope?

Rob.

Interesting action in GE - blew through 52 week low, leaked earnings ? They report tomorrow

2nd,
That's what bugs me.

I sit and watch the individual ETF in question and then cross reference with the indices and they aren't telegraphing anything to hang your hat on. No conviction one way or the other.

I'm leaning lower of course, but XLF rallys, then drops, then Q's run, then they sell as quickly. Too easy to get caught out.

I have to think that still means down from here...but maybe not as directly as we would imagine or want.

GW, Hank and Ben have that hope thing.

Just dial 1-800-kissyour$goodbye

Rob,

IMHO, the tech stocks still have a long way to fall. I'm holding onto my QID for at least another 10-12 points.

Of course, I could be wrong.........it wouldn't be the first time. :^)

WAG -- holding up well against the downturn.

When the fiscal stimulation package is announced and the Fed cuts rates, I think that we'll have a one day splash (bounce) and then a flush.

WAG

Couldn't resist another nibble myself when I looked at the technicals.

did we just test the morning lows ...?

the $vix just poked the downsloping trendline on the daily......just sharing info...

If anyone here believes that DOW will be trading at 38 by Jan 2008 or that INTC will be trading at 21.30, the LEAPS are calling.

XLF - thinking I'll wait on this one. WAMU reporting after the bell today, along with a number of other banks - then AMBAC on Tuesday. Too much risk out there for me.

Dave

WAMU = Washington Mutual - symbol WM

craig/basketguy-> sense at least a little panic out there now, so going in on UYG at 33...

It's going to be a huge task to rally the S&P back up to 1370 in the next 84 minutes. Anyone have any spare oxen????

2nd, There's no bottom on the XLF yet....act at your own risk...

OK, now that YM has reached the bottom of its channel from Jan. 10 and NQ has made a marginal new low for the day, it's time to turn this tub around.

Wishful thinking? :^)

2nd,
Remember, WM (WAMU) reports after hours.

Your UYG is a daytrade, right?

backing up the truck...and my neighbors...

I just want to say I think Bill's foresight over the past 6 months has been remarkably accurate with the sight exception of his call for a slight gold pullback before the climb (which may still may happen) But for Bill and his work here, I'd probably be sitting on a bunch of organic fertilizer right now.

It seems they're buying gold stocks like goldmansucks told em to?

Little interesting note. Right before the retailers reported their earnings I decided to take a tiny short position in a retailer. I was deciding to go with either TGT or SHLD. I figured with the bad news coming out it would be an easy few percent. Since TGT had some bad news that had already came out I figured they'd be a little extra squishy and went with them.

Needless to say TGT went up from 47 to 50 and has been holding in that range through all of this carnage. I'm amazed. I'm still holding it and just marveling at how this sucker is unphased by the market tanking around it.

Anyone buying puts on Wamu before the close?

Rob.

Anyone buying puts on Wamu before the close?

Rob.

Craig - that's what I'm thinking too - but I don't trade intraday anyway (lol). However, the big one could be AMBAC on Tuesday - they're in real trouble and will likely have a big influence on many other financials, since they insure a lot of the toxic waste on the other financials balance sheets.

EEM TRADER...

Is that a short truck or double-trailer?

2nd,
XLF off the floor. Be careful!

Scaled into WGW and UXG at the lows.
One share of BRK/B.

double trailer...:)

On 5-min chart, YM pulled back at 20EMA to retest bottom of channel from Jan. 10; NQ pulled back at its 20EMA to test breakout from short-term downtrend line.

Both tests look successful. Last exit for those who are vertically challenged? :^)

What is going in the trailer?

craig- everyone was looking for a bounce two days ago and ready to pounce...didn't get one->now it's tanking, and they're all staying away? it's time to buy...(JMHO)...

QQQQ-> in at 45.72...

WM- what if it announces buy-out by JPM?-> careful with those puts...

WM- what if it announces buy-out by JPM?-> careful with those puts...

XLF->back to (first) principles: buy weakness, sell strength...long UYG...

DIA just hit 122.18
Thats about 2,000 points from the "Goldilocks" high.

I am going in,
GL all.

re: Goldman on Gold

I remember when the Euro was at $1.30 or so they were predicting $1.43. That was dead-on. Later they predicted $1.50 for the Euro if memory serves, when it was in the low $1.40 range after hitting $1.43. Speaking of gold, I read this in Moneyweek Magazine's Jan 15 email:

"This week the London Bullion Market Association (LBMA) released the forecasts of 28 precious metal experts in its annual competition.
Most years, Ross Norman of The Bullion Desk wins - and most years he makes the most bullish forecast. He has again this year. He reckons gold will hit a high of $1,250 an ounce before the year is out, and won’t sink below $840.
Meanwhile, one expert from Commerzbank International in Luxembourg, suggested a high for the year of $900. I don’t know what planet he’s on – but that got breached before 2008 was two weeks old, in fact on the very day that the LBMA released their forecast.
But he’s not the only expert who seems to be out of touch with the real world… 
Over 40% of the participants in the LBMA gold price forecasting competition do not expect to see gold hit $1,000 an ounce. Only three of the 24 (12.5%) see highs above $1,050. I wonder how many of these people look at money supply growth figures. Mark my words, Norman will come first or second in this competition yet again. Gold will break $1,100 this year. The surprises in this gold bull market have always been on the upside."

It's easy to see where he's getting the $840 low--lots of support there.

1st Guy: "Is that a piano falling out of that building?"

2nd Guy: "No.....it's the DOW !!!!

Whoa, here we are, back at the gates of hell!

dow may be plunging...but the breadth is not proportinaltely plunging...tommorow is options expiration....now is when to pick up divergences in individual stocks...not indices...and $vix is poking...

Whoever called DOW 12100 by the end of the week was right on. Hopefully he put his money where his mouth is.

Wouldn't it be crazy if the stimulus announcement tomorrow cranks the Dow back up to 12,800. I wouldn't be surprised about anything at this point.

Rob.

EEMTRADER,
I agree, people are throwing in the towel now
SS

Thank you Mr. Bill Cara. You deserve to play golf anytime you feel like it.

I bought 2 XOM Apr. Put contracts @ 3.85 in Dec.

Sold 1 today @ 8.00 and holding one with stop as per money manage.

Thanks to all who post here Re. trades. We learn from each other all the time.

Haven't looked at this in awhile, but the NLR ETF (uranium, nuclear infrastrucute plays) setting new lows below 32. Not yet though, more blood needed in the streets.

watermelon "When do all of those people with IRA stock accounts, which they can't short, start selling off in mass?"

After they open their monthly statements the first week of February.

Now and futures.com has gold in euro equivalent at $1000US ($800€)

http://www.nowandfutures.com/images/predict_gold.png

What will cause a change in the precious metals markets? Possibly a very large silver discovery will change the gold/silver ratio and be generally supportive of gold prices.

craig- honestly, i am pretty confident it's a buy...it feels surreal, but i can see it play out->it's an overnight hold, and it 'feels' right...(fwiw)...

sorry, that's €600.-

Bought some WGW @ 3.17 and happy to buy more if I get a chance...

DJIA -330. Capitulation?

Wow, we must be at the short-term bottom if 2nd is going long overnight.

Rob.

Wow, we must be at the short-term bottom if 2nd is going long overnight.

Rob.

I think the way I will play this is to wait for another entry into SKF rather then try to ride XLF back up. It seems to be the danger is on the long side not the short side.

BLOOD IN THE STREETS

GOOG- under 600...

"Things got worse and worse. Finally there came the awful day of reckoning for the bulls and the optimists and the wishful thinkers and those vast hordes that, dreading the pain of a small loss at the beginning, were now about to suffer total amputation -- without anaesthetics."
--Jesse Livermore

Finger Lakes at January 17,

I think that is what I said a few weeks ago, to the effect that a plunge through the hs that was evident to many was nessessary to purge the week hands for a rally.Could it turn into a falling wedge? The uptrend from the mar 2003 low through the July 2006 low comes in around there/here making a 3rd touch for a valid trendline.

I still have much trouble believing it can rally with the lousy fundamentals, can a falling dollar support the sm as it gets adjusted to inflation? I don't know..

Here's the chart fwiw
http://tinyurl.com/2yzuma

GOOG- under 600...

rob-> i also tried to bottom fish Japan and lost...not saying we're necessarily at a bottom, just that it's a good time to buy, or at least start buying...not going all in, but no hesitation at picking up positions here either...

Where is Maromatics...I hope he is O.K with those 1800 NDX calls he bought...

GOOG- under 600...

rob-> i also tried to bottom fish Japan and lost...not saying we're necessarily at a bottom, just that it's a good time to buy, or at least start buying...not going all in, but no hesitation at picking up positions here either...

When people get their next 401K statements they're going to be shocked!!!

I have a brother-in-law that puts in the max every paycheck and never looks at it for any reason.

I would think most 401K's have lost all last year's gains by now unless they are actively managed.

Rob.

HBC holding up well...

I agree 2nd. Your sense of the market is great. I need to get better in that department or just get better in switching sides quicker.

Rob.

How would you like to be the next President? Some legacy Bush is creating!

OG- hope you're applying that quote to the bulls who bought into the last few traps...today may be an amputation for some, but a buying opportunity for the rest of us...

Closing most of my shorts and taking profits. Not going to gamble them on a possible rally. I'll wait for the prices to come to me to load up again.

Jaketh

"My sense is that you are doing okay ($$) on balance. I think that because you are exuberant and forthcoming, it's a little concerning to less extroverted traders....."

You are a very insightful. You are correct on all points. A lot of times I was just expressing the fun I was having,trading. Guess I went to far with it. Maybe I should post my 2007 Schedule D here so as not to worry the overseers. My CPA last week seem happy with my estimated gains for the year. And so far in 2008, I am ahead of the curve.

Man I hope you are right 2nd....

You are in UYG (dbl XLF) and I'm short SKF (dbl XLF).

Again, this was a little scary but nothing like August. We're within about 80 pts of the Feb low of 12075.

Best of luck to you 2nd!

craig- re your opening post:

"I get a market letter from a well known blogger many people here read that says the number of NYSE equities below the 200 DMA is approaching the levels we saw in 1998 and 2002. Not there yet but getting close."

Please let me know if it hit(s) today...thanks

2nd... you said into QQQQ... what about out of HGD?

Or are we going back to $11.00 tomorrow?

cashed out about %30 from recent gold gains,
and feeling alright about the recent plunge with some cash on hand to get back in again should
gold dip down in the $840 area, and/or add on strength once the metal can close above $900 for at least 1 week or so.

Jaketh

"My sense is that you are doing okay ($$) on balance. I think that because you are exuberant and forthcoming, it's a little concerning to less extroverted traders....."

You are a very insightful. You are correct on all points. A lot of times I was just expressing the fun I was having,trading. Guess I went to far with it. Maybe I should post my 2007 Schedule D here so as not to worry the overseers. My CPA last week seem happy with my estimated gains for the year. And so far in 2008, I am ahead of the curve.

HGD is a separate play entirely->my take would be the gold sector goes down regardless of the broader market...exception would be the juniors, which have already been trashed, and will hopefully recover...

check the FXI volume out on the last minute at todays close of regular session...is that buying low or capitualtion selling...at the low...?

WM-

news is bad (of course)...
XLF up on the news (so far)->may reverse at any time (of course)...

Washington Mutual Inc (NYSE:WM - News), the largest U.S. savings and loan, posted a $1.87 billion fourth-quarter loss on Thursday, its first quarterly loss in more than a decade, battered by mortgage defaults and write-downs.

The raising of $2.9 billion in net proceeds through the issuance of convertible preferred stock that increased the year-end tangible capital to tangible asset ratio to 6.67 percent, $3.7 billion above the company’s targeted ratio of 5.50 percent.
A reduction in the quarterly cash dividend rate on the company’s common stock to 15 cents per share.
A major expense reduction initiative projected to reduce 2008 noninterest expense by $500 million to $8.0 billion or less.
A significant acceleration in the strategic focus of our Home Loans business that emphasizes mortgage lending through our retail banking stores and other retail distribution channels.

LOL! So far so good 2nd.
WM didn't hurt anything so far.
Ambac should be a little different.

You know, it could reverse at any time.....covered 50% of my short with a tidy profit. Still have some to ride....

"A major expense reduction initiative projected to reduce 2008 noninterest expense by $500 million to $8.0 billion or less."

500m to 8b? pretty wide range...
any doubt they want to refrain from using phrases such as 'workforce reduction' or 'branch closings?'...

You know, it could reverse at any time.....covered 50% of my short with a tidy profit. Still have some to ride....

I hate typekey.

Even when I reload and my post is missing, it screws it up anyway.

Sorry for the duplicate.

craig- twirl that gun pretty fast, my man...

Isaiah64v4:

"...Maybe I should post my 2007 Schedule D here so as not to worry the overseers..."

I find your use of the term "overseers" rather interesting. What do you mean by it?

Have a great and relaxing evening all, I'm off to Costco.

Thank You 2nd, and of course, Bill.

Isaiah64v4:

"...Maybe I should post my 2007 Schedule D here so as not to worry the overseers..."

I find your use of the term "overseers" rather interesting. What do you mean by it?

Bill,

Thanks for the reply.

Golfing can be good for you no matter what age you start to play.... I didn't start till I was about ten... :>)

Golfer...

You been hiding in the shadows?

A tremendous day indeed.

Bought some BCE today. BCE is being bought for $42/share, and traded at 36 today. The deal is a done deal, supposedly. If it doesn't, the TSX is done. So seems like an easy ROI, IMO.

Still have my 50% position short XAU. It looks as though XAU may have a lot further to fall yet, so I'm planning to hold that position for a while - target 160, or a higher high daily close.

Is anyone else calculating the downside projection of the head and shoulders breakdown on the S&P as 1300? IT depends largely on your interpretation of the neckline. Here's my take:

http://img148.imageshack.us/my.php?image=24621012fl9.gif

YYZTrader..

We are close...I had just under 131.00 in the spy

And down just under 11900 in DJIA

Jeff Saut a good read today:
http://www.raymondjames.com/inv_strat.htm

"Golfer...

You been hiding in the shadows?"

Yeah, Golfer, I thought you were in Australia with Kaimu or something.

"Golfer...You been hiding in the shadows?"

Yeah Golfer, I thouight you were in Australia with Kaimu or something.

basketguy and Jaketh:

Not hiding...not in Australia... but am getting ready to head to Arizona for a month or two.

Going to go to the CambridgeHouse Conference in Phoenix in February... mainly mining companies but there are some great speakers going to be presenting.

Did some "selling into strength" before the holidays which I knew about but never really did before. But Bill kept sayimg that this was the play for us "longer holders" and it has proven to be a very good move on my part.

I now have a good cash position and am waiting to reposition in my "golfer's 15" which have held up farly well during this period.

I have been paying attention to you guys during this market roller coaster and it brings back memories of the late 90's and early 2000's when I was going through the same daily grind.

I miss some of the "action" but I am now more aware that the main purpose is NOT TO LOSE MONEY and I can do a better job of this with less of the action.

Great forum, great site and I love reading your guys insight.

Heres a question for you (anyone): Both WaMu and AMD just reported huge losses and yet the after hours AMD is up 5% and WM was up as well (now in the red). Am I now getting the sense that all the future info. and losses are already priced into this current market? Or is that assumption way off?

west, your assumption may be correct. I think there was little WM could have said to make things worse. In the case of AMD, the company is broken and has no cash to survive as is. So, if it reports more losses, it makes little difference. AMD has some value for the products and markets it has developed, i.e., someone (crazy or greedy?) could acquire them, or their IP, or provide them with some cash infusion. Just my take. having said that, they both can drop to zero, as can (or should have ) ETFC, C, and many others!

ALOHA !!

Here in Australia TV there is a constant scrolling at the bottom of the TV screen stating,"Australian economy set to rise despite weakening US economic outlook ..."But for how long? I see all the familiar signs of monetary inflation of a debt based society. Spending more than you earn seems to be an acceptable motto for global fiat governments and their citizens.

When governments allow private banks to control their monetary system then there is no greater sin. I would have to say that is as "deliberate" as deliberate can get! The bankers know the score and it has been this way for hundreds of years. This not new and there is nothing new under the fiat sun here! Corruption is a byproduct of greed for which fiat is based. Power corrupts ... Would anybody spend their entire life struggling to attain power and not use it? That is the human condition ... That is why we are in Iraq and that is why we have Goldman Sachs. There is only one "monetary brake" ... GOLD! We all now have a front row seat to an out of control debt based society without brakes. Those in power will shuffle the deck and pray to God they are not the ones at the wheel when this MAC truck crashes!

I disagree with Cramer in that he does not understand the nature of fiat and its not deflation. Not when people like Ben Bernanke are in charge and not when we have a $2tril war and a $600tril derivatives meltdown. No its about a US Dollar crisis ... a full blown "reserve currency" default with NO BRAKES. Just think about it ... When the British empire collapsed there was a gold standard in place. Now there is nothing but excessive debt, no exports, no savings and above all NO GOLD! There is nobody on Wall Street or TOUT TV that has even mentioned monetary crisis yet. In one word ... CONFIDENCE !!!

After its all over it will be the Civil War all over again only this time the carpet baggers will speak Chinese and Arabic.

GOVERNMENT IS ONLY AS HONEST AS ITS MONEY !!!

Nikkei down 407.60 to 13375.85

I agree that a peg to gold will be the only thing that cleans out the credit system. But the human cost will be more than anyone bargained for.

Notice that pro-banker talking heads are calling for +$1000 gold and BRIC economy growth. This at the very peak of the price. Obviously, the want the speculators to be caught buying in the top of the gold markets and the pension funds holding the bag on their emerging economies fraud.

But I think that the dervatives meltdown and its asset value is greatly exaggerated. They are very much like options contracts with a certain value and a certain payout if you are able to obtain leverage.

The problem with them is that everyone looks at their peak value and exaggerates the underlying asset, which is the cash put up to buy them. They were used primarily as assets to borrow more money and were given their peak assessment, not the original cash put up for the contract.

Some data...

$vix is >10% above its 10sma, above the Upper BB on the daily, just shy of 3 standard deviation.strong reversal days follow..google and check for yourself.

RSI(5) bullish divergences on CROX, AAPL. GOOG, QQQQ and even the SPYs?

The backtesting was not done however during the period of a rookie academic Fed Chairman testifying in front of a congresswoman that does not know the treasury secretary's credentials from the Fed Chairman's however...nor the fact that its day before options expiration...:)

I apologize to Isaiah, I am a life long addict and thought that I recognized my patterns in you. We do discuss using our brains and not our emotions here. It's wonderful to hear agreement on capitulation here this afternoon. I took $27 out of SKF. Enthusiasm is a good thing. When Craig or 2nd have suggested using stops or smaller positions, that sounded like the wishy/washy saying maybe if you didn't drink quite so much, which I heard or should I say, didn't hear, for 32 years. I've been clean and sober for 12 years but still have a problem with ice cream, cookies, coffee, etc. My love to you all.

here's the Cramer video for anyone who wants confirm of the "cut tomorrow"

http://tinyurl.com/2ltpqc

http://tinyurl.com/gt38s

NYSE Buys AMEX for $260M
The New York Stock Exchange will buy the American Stock Exchange for $260 million, reports CNBC's Scott Cohn.

charlieatthelake,

Thank you for your apology to Isaiah. That took some heart. I'm really fond of our daytraders in here.

Regards

Re TGT: Target is already down from a high of $70. They also preannounced that they would have a bad quarter--I suspect that most of the news was already in the stock price.

craig- often try to put myself in the opposite set of shoes, which can be enlightening...instead of asking whether to buy on today's weakness, try asking what percentage of today's sellers made the right move? if they made the wrong move, then the converse was probably a good move...(again, JMHO)....

moneygenie,

Nice Cramer video.

Anyone know what time Bush is delivering the economic stimulus speech?

speech-writer is emailing a copy, or maybe the president will be delivering it to a mirror before bed tonight...doesn't really matter, as long as we are 'expecting' one...would only be the failure to deliver one to the public within the next few days that would nullify the effect of our expectations (and any trading based on those expectations may be over well before then)...

Don Coxe was on BNN tonight:

- says Bernanke is a smart person and has been looking at the right things, like being very worried about food inflation. Says Ben is very concerned not to trigger food inflation. Food costs have not reached the consumer.
- Thinks $70B plan not enough. However, he thinks a plan of accelerated depreciating of capital spending will work as part of the stimulus plan.
- Just need patience to get things better. By next fall things will look good again, but Americans are impatient.
- there will be a bad recession in financials, get out of banks and get into commodities/agri. Food prices will go up.

SDA and PDA will soon be looking mightily attractive (not his comment).

What's the chance the Fed injects some liquidity through a repo tomorrow morning, to provide some immediate support to the Whitehouse stimulation plan?

Prior to the new year there was up to 55 billion "sloshing". That has been whittled down to 26 billion as the Term Auction Facility has been used instead.

"Slosh" report here:
http://www.gmtfo.com/reporeader/OMOps.aspx

What's the chance the Fed does a repo tomorrow to inject some liquidity as background support for the Whitehouse stimulus package? Just thinking Bernanke can't be too pleased with the market response following his testimony today. I can't imagine the central planners wanting to risk a down day in the markets tomorrow, with the potential for a big follow-on after the weekend.

Sorry for the double post. Reloaded the site after the first attempt, wasn't there.

another well-timed headline by Jim de Porre:

"A Weak Open Would Serve Us Better
4:51 PM EST
We keep opening strong and then fading all day, and we need to break that pattern."

not really happy with the positive futures right now->a drift down to mild-to-moderate red by morning highly preferable to gapping up (IMO)...

Slosh and liquidity are like urban myths or X-files. This very same morning it was reported above as +33B, now it's -9B. Every Thursday it's the same story. Freedom57, if you add all the lines together for a long time you will get to a number very close to zero. You can do a search for comments on slosh on this site too.

Gold at 873, Nikkei -387, natural gas +0.04 :-)

Si02

also keeping PDA & SDA among others on the watch list. Big sell off today also on the fertilizers--it's a global market for them.
********************************************

Reuters article, page 2, had this on the BCE buy-out.

"A wide variety of rumors has circulated regarding obstacles to the BCE takeover, ranging from angry bondholders blocking the takeout to, more recently, Merrill Lynch pulling out after suffering huge losses on U.S. subprime mortgage bets.

BCE had hoped to close the buyout in the first quarter, but those expectations were later pushed back to the second because of the timing of the regulatory hearing."

Thx Seamus and Bill. I've been looking at POT too, but thought I had missed the boat. Still high, tough to get on board.

If BCE deal does not go through, all hell breaks loose here. It may be organized rumours to bring the price down. Anyway, no pain, no gain.

ALOHA !!

Just what good is a "stimulus package" for the US Dollar and monetary inflation? Spending more money is the exact opposite of what we need. We need less government and therefore less government spending.

You can't depend on imports and destroy the US Dollar and expect prices to stabilize or go down. Like so many empires before those who rule want their cake and be able to eat it too!

It has taken decades to drain the real wealth that prior generations created so a "stimulus package" is yet another empty promise and hollow solution. The problem cannot be solved by those who created it. The problems we face now are "fiat" based. Fix that ... Quit offering "debt" as a solution. That only benefits bankers.

Where is the mention of the cost of the "War On Terror" in terms of inflationary pressure? Will that be in the President's speech? Rising food and energy prices are only symptoms. These guys will never address the real cause. Same old two party aristocracy two step!

The way I see it the US public will suffer no matter what path is chosen. It is better to suffer for a real monetary solution than a false debt solution. Adding more debt is wrong.

Craig,
If you're out there tonight.... I seem to recall that you mentioned doing some premarket trading on Scottrade. Does that require special account settings (signed docs) or is there an online solution? TIA

Taiwan isn't doing very well right now....

"Last year, China offered Malawi a US$6 billion carrot to end diplomatic relations in favor of Beijing, Yang stated. And despite the government of Taiwan's continued friendship and sincere communications with the government of one of Africa's poorest countries, the Malawians chose to abandon their old friend, he added. China and its state-controlled companies have invested billions of dollars in Africa in a bid to tap natural resources for the Asian giant's growing economy and build Beijing's political influence in the developing world.

For the people and government of Taiwan, Malawi's move is considered enormously insulting and highly discourteous, Yang stressed, especially since the timing of the breakup came during President Chen Shui-bian and Foreign Minister James Huang's visit to Guatemala, a Central American ally, he added.

The Malawian defection leaves Taiwan with 23 diplomatic allies, four of which are in Africa, including Burkina Faso, Gambia, Swaziland and Sao Tome and Principe. Malawi was the third ally to severe diplomatic ties with Taiwan since 2006, following Chad and Costa Rica. "

http://tinyurl.com/33e4m5

Taiwan exchange may list early 2009 after mergers

"The stock exchange told Reuters in December that it had discussed possible tie-ups with NYSE Euronext, the Nasdaq Stock Market and Deutsche Boerse. "

"On a rule barring Taiwan-listed firms from having more than 40 percent of their assets in China, Wu said he had not heard from the authorities as to whether they will relax the clause. "The market has asked if we will relax the regulation, but that depends on the next government after the March (presidential) elections," he said, adding the rule is more a political issue than an economic one.

The cap on China assets has prompted a number of top firms, including electronics giant Hon Hai and manufacturer Pou Chen , to spin off their China assets into separate companies and list them in Hong Kong. "(The investment cap) does affect us, but even so, we kept growing. China is just one of Taiwan's markets," Wu said. Wu and other TSEC officials are touring in Singapore and Hong Kong to seek strategic alliances and to help market Taiwan companies to foreign investors based in the two cities. "

http://tinyurl.com/33t655

Lots of things are happening over there that will affect the world markets.

This chart really speaks to this issue.

http://tinyurl.com/d2gmf

There seems to be a bit of an uptick in the USDJPY chart over the last couple of days. Maybe tomorrow we're going to see a bounce into the weekend in US markets?

ALOHA !!

FOOD PRICES
From an Aussie perspective yesterday I paid $20AUD for a spinach salad at the Subiaco Hotel restaurant. Even in USD terms that's pricey. People are talking about that now. I hear them and most are just saying, "Something must be done!" They will blame the hotel or the grocery store or the food growers or the oil companies or speculators, but very few will blame the government. Instead they will look to the government for HELP! What a major CON JOB !!!

GOVERNMENT IS ONLY AS HONEST AS ITS MONEY ...

Thank you 2nd. I don't know, I was one of the people selling at one time or another! (wrongly).

I will get into my report and see if I can find the chart for % of NYSE equities below the 200 DMA.

Just back from Costco and another in your face example of inflation. Dog food, which we go through quite a lot of around here, up from 17.95 to 20.00. I'm sure glad there's no inflation.
Another Costco shopper was buying dog food and noticed the same thing on almost all of her purchases....and she knew exactly why as she was aware of the purchasing power of her USD.
How many people do we run into that know about currency? Not many.

Yikes, anyone see Asia yet? Looks like we will gap down in the AM, but if we get close to 12075 I bet the bulls make a bit of a run. No idea of how long the hay supply lasts, but I have to ask myself....is the recession even started? 12,075 has got to only be a way station on the fall to who-knows-where. Bill says 10,000 and I'm not in a position to disagree.

But we know it won't happen all at once, otherwise HB&B won't get theirs.

Charlieatthelake: No worries. Perhaps 3% of humans have no addictions or compulsive behaviors. There are many we don't recognize. Hard to not find people exhibiting some form of disfunction whereever people are. Just be VERY happy you don't swim in my gene pool. LOL!

Bush conference call

"President George W. Bush told lawmakers on Thursday he wants tax rebates for families and breaks for businesses in a rescue plan for the struggling U.S. economy that could total up to $150 billion.

The talks between the White House and Congress have focused on cutting the 10 percent income-tax bracket to 3 percent or zero and giving households the money in advance as a rebate.

Businesses would be allowed to take an immediate tax deduction for 50 percent of their new investments."

http://tinyurl.com/2r35pl

Bounce... bounce?

ASX is down 2% tomorrow (today there)

"At the moment all the confidence has gone out of the market and while there is still some value in our companies we are not immune to the day by day declines in the US.

"Normally you have buyers with the sellers but because of the US no one wants to dive into the market and liquidity is at a low as well."

http://tinyurl.com/37bcuk

Seems to be a setup for a Friday bounce to get through the long weekend? Any takers on that one?

Removal of the tick rule last summer seems to accelerate the downdrafts.

Thinking beyond tomorrow's option expirations, the president's stimulus oration, possible short covering, FETV etc., Tuesday could be setting up as the big drop. Wouldn't take much as it seems to be fear out there.

Cold front moving into Chicago tonight . . . wonder how that fellow in Eastern Manitoba is surviving up there . . . imagine the Bahamas are just fine though. Good night Bill and thanks!

SiO2: Thanks for feedback on the repo. I understand the temporary nature of the repos, but is this not the type of circumstance where the Fed might want to do a little more than just roll over the 11 billion maturing tomorrow?

On POT, I have a $145/$135 March put bear spread on it (US). If I lean out my balcony, and look across the river I can see their head office. Brian Acker was on BNN today, and if I heard him correctly he said Viterra (VT.TO, formerly Sask. Wheat Pool) was near his model price (quantitative analyst); it's another ag. play you might want to look at if you haven't already.

Jaketh,
Nothing special to trade pre-market or post-market with Scottrade, although other brokers allow better accessability.

I used to be able to trade almost all except NYSE equities pre and post, now they give me some message about not being nasdaq listed.
So I can trade GFI and some of the ETF's for instance, but not GLD, which makes me crazy.

As an example, that was why I purposely traded SKF (short) instead of UYG as I don't know if I can trade UYG pre or post market and didn't have time to find out.

But there is no special permission, forms or anything like that I'm aware of.

If you are curious as to whether you can trade a specific equity, simply set-up a trade you know is outside the realm of being executed in the pre or pst market and see if ST takes the order.
If not it will tell you why. If it does take it, it will give you an order number. You can then cancel or modify it (make sure it's NOT a market order, only limit orders so you can cancel or modify) and know you can trade it.

Jaketh
DUH! You can only enter limit or stop orders in the pre or post markets. No market orders or shorting. Sorry, forgot.

Merril Lynch supremo John Thain 'the fixer'
By James Quinn
Last Updated: 1:31am GMT 18/01/2008

Unlike some on Wall Street, John Thain doesn't believe Merrill Lynch is broken.

The fact that he took the job at Merrill's, rather than the same job at Citigroup - which he is understood to have been offered - speaks volumes.

And after a $14.1bn (£7.2bn) fourth-quarter writedown and quarterly losses of $14.9bn, the balance sheet now look healthier than those of some rival banks.

advertisementMr Thain, who developed a reputation as a fixer at the New York Stock Exchange, has wasted no time trying to repair the damage inflicted by the sub-prime mortgage crisis.

He appointed Noel Donohoe, formerly of hedge fund Dune Capital Management, as co-chief risk officer to work alongside incumbent Ed Moriaty.

The pair will now report directly to him as chair of a new risk committee made up of the heads of all of Merrill's business units. He says he wants every part of the bank thinking about its actions, and the likely knock-on effects of other parts of the bank.

If this works, he's has solved a major problem.

The other difficulty is the downturn in fixed-income trading. This has perhaps been overstated. For instance, within Merrill's fixed- income business, its currency division was trading at record levels last year. Mr Thain is "optimistic" about commodities and mortgage origination, and does not see the need for wholesale job cuts in fixed income now or in the future.

His steady-as-she-goes mantra seems sensible, particularly for a bank that has been through so much in the past six months.

If he can manage to steer Merrill back on course in the first half, and if the economy comes right again in the second half, as Fed chairman Ben Bernanke predicts, then he and the bank should be in a good position to sail full steam ahead.

http://tinyurl.com/ytmrgk

Hi Basket,

:-)

Still betting on a bounce here...

Cheers!

To all those who I was talking with during the day: I'm glad I cashed all my profits out just before the close.

Alright, my analysis of POT so far has ONLY looked at the current status of the options. I would say that when Bill and others believe POT is near a bottom that POT would be a good candidate for calendar options trading. Here's my explanation why:

1. There is a very low dividend which leaves little incentive to actually own the stock. At this moment the dividend is only .29%.
2. The options volume is fairly liquid with 2120 Feb-08 $120 options traded today(Thursday).
3. The ratio of leap to near term option is high. The Feb-08 $120 is $11.10, and the Jan-10 $120 is $41.70. So the leap is about 3.75 times the cost of the near term option. This means that even if you only get %50 of the premium of each near term option; you'll still pay for the leap after about 7 months.
4. The option that is about to expire in the money(Jan-08 $115 @ $7) is still less than the next bracket up for the next month out. Actually the Jan-08 $115 is still less than the option two brackets up and one month out. This matters because as the stock moves up and your option goes in the money, you simply buy it back BEFORE it is assigned and then you sell the option one month further out and one or two brackets higher.

So, I would say that this is a very good candidate to trade ONLY after Bill and others decide that the macro and business data turn good for this stock.

If someone wants me to explain something in more depth, feel free to ask.

Bill and others,
I like Potash and Agrium. I've always liked the need for fertilizer to feed the world story. One thing that gives me concern however is that these fertilizer companies were solid slow growth investments for at least 20 years that I know of (Nova?) until 2006. When I look at their max length charts there's gradual upward movement until 2006 and then it rockets straight up. I think that current P/Es are outrageous. My recall might be suspect here but, I think that fertilizer P/Es were typically in the 10 to 12 range until 2006. Now they are at 40. I fear a bubble.

Freedom57, someone here did a correlation study on the "injections" and the effects on markets and found no positive conclusion. Indeed B. Acker mentioned VT with a model price of 12 indeed, which is about even (Mr. Acker does quantitative analysis and computes a model price for stocks.) Some of his best mentions I noted were:

OIL.to (model: $25)
FM.to (model: $130)
VLO (model:$94)
TSO (model: $68)
LOW (model: $31)
PCA.to (model: $75)

Also mentioned Sunlife as being thrown out with the baby, which I need to take a look at.

I have always found him entertaining for his amusing bullishness, which was finally quite different yesterday, so take those numbers with a grain of salt.

To all, Quentusrex was generously active on Skype today explaining his options strategy and broadcasting when his indicators were showing the moment the gates of the abyss about to open. Someone in his family is being treated for a nice dinner. We had tremendous fun today watching the market collapse (at least those holding puts!).

Q: I sold everything except IWM puts and some QQQQ and INTC calls I bought yesterday (Thursday). Intention is to get rid of the calls today and maybe temporarily out of the IWM puts if there is a "huge stimulus" :-)

Good morning,

Short squeeze anyone?

Time for another potential portfolio player analysis. This time the target is HBC. Keep in mind I am only reviewing the target based on option prices, and not on any macro factors or AZ/DZ signals. I'll leave the analysis of when to move into the trade to others who are more skilled at that than me.

HSBC Holdings PLC is a banking and financial services organization, and should track close to XLF. HBC's stock price is currently at $74.53. The previous declared dividend was $.85, which would yield 4.56%. Now, keep in mind that most of the major banks have slashed their dividends so there's no telling how likely it is that this dividend won't be slashed too.

1. High dividend means you will probably want to actually hold the stock, rather than just own the leap call option. It's up to you, some people might have faith in this dividend, and want to earn that over the leverage that you have by owning the options.
2. The options volume is only moderately illiquid with 44 Feb-08 $75 call options traded today and no near the money Jan-10 calls traded today.
3. The ratio of leap to near term option is very high. The Feb-08 $80 is $1.10, and the Jan-10 $80 is $8.20. So the leap is about 7.5 times the cost of the near term option. This means that even if you only get %50 of the premium of each near term option; you'll still pay for the leap after about 15 months.

Because of #2 and #3 I would say that this stock isn't worth trying to play with a rolling calendar trade(which is one of my favorites). But this might make it a good stock to hold with a leap put. Let's see.

1. The $70 leap put is currently at $10.90 with none traded today. To buy this stock with the put protection you would need $8,543. And you would only have $1,543 at risk. The most you could lose on this trade is 18%. You could put up more capital and buy the $80 leap at $16.70, which would put the total capital costs at $9123 with $8000 protected and only $1123 at risk for a risk exposure of 12.3%. You could trade off an extra $580 in capital to have $420 less portfolio risk.
2. The Feb-08 $75 call options have $2.9 in premium, and the $80 have $1.10 in premium. The Mar-08 $75 call option has $4.00 in premium and the $80 has $2.00 in premium. While there is more premium in the $75 there is WAY more risk of expiring in the money than the $80. If you would be willing to put more cash into the trade the $75 might be worth your while, but if you aren't then the $80 is safer. Using a conservative 50% of premium, you could have an income of .5(1.1*12)*$100=$660 of income per year off of this trade. That would give you a return(excluding capital appreciation) of 7.7% if you went with the $70 put leap, or 7.25% if you went with the $80 put leap.
3. Risk reward. if you went for the safer route and took the $80 put leap, you would have a risk of 12.3%, and a reward of about 7.25% from options. I would say that this stock isn't ready to own unless you forsee some good capital appreciation, because even if the dividend of $.85 you would only be looking at 8% return without any capital appreciation.

So, I would say that this isn't really a decent candidate to trade with options. The premiums aren't quite worth it for this stock right now.

If someone wants me to explain something in more depth, feel free to ask.

For anyone who is curious as to how you would react if the calls you sold went in the money there are a couple ways to look at it:
1. You would first decide whether you want to risk an assignment while you wait for a pull back in the stock price.
2. Then you would try to wait until the week before, or the week of expiration so that the premium difference is the highest between the option that is about to expire and the next months options.
3. Then you will roll your option to the next month. This includes buying back your option and selling the option for the next month(hopefully at a higher bracket). So, let's say that the stock moves to $85 before the Feb-08 $80 call option you sold expires. You would pick either the Mar-08 $85 or the Mar-08 $90 call option.(I'm looking at the current Feb options for a general price target as they are currently one month out) Let's say that the Feb-08 $80(that you originally sold for $1.10) costs $5.55 and the Mar-08 $85 costs $2.90 and the Mar-08 $90 costs $1.10. You would have to put up an extra $265 to roll to the Mar-08 $85(which is right about to go in the money) or $440 to roll to the Mar-08 $90 which is the same distance from the current stock price that your original Feb $80 was from the stock price.

Now from here you would have a few options. You could keep the stock and roll your options and try to be more careful, or you could close out the trade and let the stock be called away from you.
Choice 1: The stock is called away at $80 per share. And over the course of the month your put should be about $9.90(I chose this number because the Jan-10 $70 put leap is $5 out of the money for $10.90 and you would lose a little in time premium). So, you have $8000+$990+110-9123= $-23.
Choice 2: You roll your option and be more careful. You roll to the $90, so you have to put up an additional $440. Your invested capital is at $9563, and you have so far made $110 by selling calls. The stock is up by about $1050, your put is down by $680, and you have to put up an additional $330 to rescue your trade. You paid $330 for your $370 in capital appreciation in one month.
Choice 3: You just buy back your call. Same as choice 2 except that you have made no additional money from call option premium.

I'll say again: This isn't really a decent candidate to trade with options. The premiums aren't quite worth it for this stock right now.