Bill,

5 stars to your comments today.

Really the best!

Thank oyu for sharing.

Have a good one.

So true Bill. Nobody to blame.

Two weeks ago I posted some ETF straddle plays on DIA, IWM, SPY, XLF. Here is the status as of yesterday:

Biggest winners: DIA and SPY, only loser: XLF. DIA and SPY positions returned over 67% profit (60% ROI, in 2 weeks, betting on a move *either way*).

Complete numbers:

http://nexalogic.com/strangles.html

craig/isaiah- game plan?

UYG/QQQQ-> partial sales pre-market or at the open (close the SKF short in your case)->hope they sell the opening gap, in which case add (back) the UYG/QLD and hit the pedal?

"We could have sold (and I don’t mean sold covered calls, which you don’t do in a Bear market) and, for the majority of us, we froze."

Bill, it's as if you were thinking of me when you wrote this! The covered calls I wrote on my ESLR position lead to a terrible reversal this month. I should have sold the position when the chart broke key support. The calls, however, gave me a false senses of hope that I was protected. They were until a few days ago. Then they became an anchor.

What is particularly frustrating for me is that I KNEW what was coming and I still managed to make key mistakes. I, and no one else, am to blame.

Barbarians at the gates...

"The company now faces a Sunday morning deadline to convince its bankers to accept a $400-million infusion from Quebecor and Tricap Partners Ltd., a unit of Brookfield Asset Management. The banks are leery about accepting a deal that would give Quebecor and Tricap a spot at the front of line in the event of a future court filing."

http://tinyurl.com/33vdyx

Bill, 2nd, Isaiah,
Well this is different but the question is the same from 2nd and Bill really.

Was that capitulation and are we starting another bull? I gave my answer last night after my trip to Costco (not very busy BTW) which is this concept of 12,000 being IT, and then we rally is the work of HB&B, talking heads and wishful thinkers.

So, 2nd, the plan is to sell into strength and look for re-entry on ultras in any false rally, which they all will be for a while.

Since I'm so sure it's a bear, they will do what they did in December, rally really convincingly to scare the crap out of the bears.

I think Bill said they would mount a fight around 12000. One fight isn't the war.

Bill:

"You have to love the trading game... But the satisfaction of being able to coldly, objectively, trade prices is simply the best...
and by that I mean the numbers, whether they are fundamental, quantitative, technical or economic, are what you need to focus on.

In other words, don’t let the game play you."

In my humble opinion, this is one of your best offerings yet.

FXI- set to open up 5%...during sell-offs it's enough work to focus on the 'obvious' and neglect the corollaries->would make sense to map out all your possibilities ahead of time and hit the buy buttons on the entire sell-off watch list simultaneously...

2nd,
Game plan clarification. Looks like we gap up at the open. I'm a seller into strength as I think any rally is temporary while HB&B tries to pull more fat from the fire while everyone is distracted with stimulus packages and the thrill of the U.S. Government giving us our own money back.

If they want stimulus they need to put people to work and give them (under 200K a year earners) a free ride for savings and investment. Hard to be capitalists without capital.

I'm just holding my SKF short and any longs I bought on weakness until a reversal, then I'll be out of longs and reestablish my shorts/ultras.

SEAMUS:

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!

Posted by: Seamus at January 17, 2008 10:47 PM

That fellow in Eastern Manitoba is doing fine, thanks.

The cold front got here before it hit you... looking at night temperatures in the -35C (-31F) area with windchills around -45C/F.

It will be a GOOD DAY to get some packing done for the upcoming trip to Arizona... 1/2 glass view LOL

Stay warm and let's hope that no one suffers any serious problems during this cold spell.

2nd,
Am I making sense? Kind of the answer to your post last night about gapping up and then fading.
This time it's at a support area (12000+/-) so the gap up may appear to have more conviction. Afterall, all of the TH's are telling us we should be buyers.

Anyone watching CNBC? All the traders and TH's talking about "faith" in Bernanke.

Sounds too much like DIAL HOPE.
I'm happy to sit and wait today. We've been here before...in December.

Golfer...Wish I was going with you

37 degrees in Phoenix..Low Gonna be in the 60's for a high all week...

A regular heat wave from Canada..

SEAMUS...I am also with you here in Chicago...:^)

Good Morning Bill, et al!

Craig, I disagree. It is not our own money that wea re getting back, it is money borrowed from hostile foreign governments taking us deeper into debt and further depressing our currency.

NOw , fellow bears.. the futures are already coming offf the drug induced euphoris, it is fine to cover, but let's see what happens first. Some people may agree that this is the most moronic reason to rally that ever has been. Cover if the indexes cross over their futures pre-market highs. Then we know the credit addicted have taken over the ship. That is about 160, 25, 20 - dow, nas, s and p/

Good Morning Bill, et al!

Craig, I disagree. It is not our own money that wea re getting back, it is money borrowed from hostile foreign governments taking us deeper into debt and further depressing our currency.

NOw , fellow bears.. the futures are already coming offf the drug induced euphoris, it is fine to cover, but let's see what happens first. Some people may agree that this is the most moronic reason to rally that ever has been. Cover if the indexes cross over their futures pre-market highs. Then we know the credit addicted have taken over the ship. That is about 160, 25, 20 - dow, nas, s and p/

Good morning.

Gazing into the nuclear winter of the market we find two Upgrades to the Cara 100:

BBBY - to Buy @ UBS
RIMM - to Outperform @ Oppenheimer

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

Be careful out there and play nice. :^)

Sold some puts in APPL yesterday as a trade for a bounce. AAPL held up well, but I do not want to hold into earnings.

AAPL may be a catalyst for a nice bounce next week, but with their PE I think there are other places to play...

Wish earnings were not coming out because i sold the FEB 145.00 puts for 6.10...

The problem...Miss guidance and take AAPL to the woodshedder...I will be watching today...May sell partial today and the rest on Tues AM...

Earnings after the bell on TUES...

Covered my SKF short with a 25% profit.

No comments on the Bush "stimulus". The only thing it stimulates in me is an abiding disgust at the fiscal, intellectual and moral bankruptcy of the Bush administration.

I took profits on everything yesterday except for a small position in FXP. I'll add more to it if we get a good head fake rally. I'm also watching for another good re-entry into SKF and SRS.

I'm still not going to touch anything on the long side yet.

Sorry, we're getting "refunds" of the money we borrowed from terrorists and communists. I forgot, we don't have any capital.

Backing up the truck again today at 12:59 pm PST and holding over weekend...more GOOG, AAPL, FXI, EEM, EWH and GS going LONG as long as QQQQ is above 44.70. No fun to short...till we rise some more.

2nd, Rally not looking quite so powerful now.

Financials reversing from premkt highs. Still up, but moderating.

IF we're going to bounce here (which I think we are) is it a day or two bounce taking the Dow to 12,500 or so; or is it a multi-week bounce running into moving average resistance at about 13,200 or so. I think the latter but confirmatory/opposition views appreciated.

Bill,Have not commented in a long time. But have watched this post everyday with great interest.I'm not a day trader, but have successfully traded in and out of posistions (mainly in the timeframe of weeks or even months) throughout the year. I have followed my own 50% rule for trading. SKF + 57%, AEM + 53%, KGC + 51%, SLW +53%, WGW + 51% etc. Plus some bombs like KRY -27% (thanks Hugo!). I am extremely grateful to you all,especially for the more thoughtful, and some incredibly insightful,and incisive observations. Though sometimes I do glaze over at some of the more personal and contentious statements. Anyway, saw Paulson on the Today show, and didn't like his body language at all, (really nervous looking) it seems the market is at a huge crossroads for HBB and agree with Bill that last two hours could be crucial, if HBB decides to dump into strength during the day to raise cash. But I think Ben and Hank might still pull a rabbit out of their ass to possibly stem the tide, providing their buddies at HBB cooperate. However, thank you all for the often interesting and entertaining discourse on individual securities, and sectors. And thank you Bill for this websight, where true Social Equity exist's for All !

Bullion prices in backwardation this morning.

Spot:- $884.80

Near Futures:- $883.60 - $884.-

Dan Sullivan cashed out Wednesday:

http://tinyurl.com/2d88d7

"Sullivan has liquidated his two model stock portfolios and gone completely to cash. The last time he was in an all-cash position was in early April 2003, nearly five years ago."

I wrote more about capitulation on my blog last night. Great to see Bill's thoughts as well.
Stop by my blog for juicy analysis

Rob
http://www.WallastonInvestments.com

Hi,

Gold will now retrace for a while.

Soon it will be time to buy.

Cheers,

Bullion prices have now adjusted since a very brief backwardation in the last few minutes:

Spot:- $883.30

Near Futures:- $886.10

Resulting gold basis is at this moment:- $2.80

craig- muted open is preferable to gap up...so for the financials, it's looking 'good...' (IMO)

2nd,
Looks like I could reload my SKF short.
SKF ask is almost back to last nights high.

skepticism is good...time to worry is when we're all in agreement...

Maromatics - do you have a target in mind for gold's retrace?

TIA, Dave

Magnolia,

I'm not yet convinced that the bounce will last til the end of the trading day.

With a 3 day weekend coming up, how many will hold stocks remains to be seen.

All IMHO.

Regards

I'm using the Larry King indicator as bounce predictor. Last night on his show, he had a series of pop investment types on (Jean Shatzky, etc.)talking about the market turmoil. Must be worth a week or two snap-back rally!

Good point BH.

We're simply back to mid-day yesterday.
Remember the last rally long weekend?

I thought the gold breakout above the all time high was important. It is being tested now during oe week. If it holds atop for a few days and builds a flag from the dec low, the po would get to 1022(same as the flag po off the Aug low)

Just a thought..

2nd,
financials getting slaughtered again.
SKF is taking off, now above 125.

Craig,

I can't get this scenerio out of my pointed little head:

Market has a snap back rally. The HB&B uses their advantage to be able to trade 24/7, sells off everything over the long weekend......the rest of us wake up to a barren wasteland on Tuesday morning.

I know I'm too skeptical...........can't help it, I read too much Vonnegut. :^)

Regards

Server Error......damn this TypeKey

CEF Gold/Silver up $0.20 today. Where's the rally though? Everyone's left the building?

craig- maybe, but i'm adding to UYG at 32.05...

Out of IQW (Quebecor World) at 0.39 from .225, not holding this for the weekend. Deadline is Sunday for the banks to accept proposal.

FXI at 155...

Dave,

Gold:

- First entry: 835
- Most lilkely better entry: between 770 / 790
- Great entry: 760
- Ideal (not likely): 650

But beware that later in the year, as the Bear deepens and widens, Gold will fall too... so this is not a "sure trade" for too long.

Further: keep conservative leveraging.

BH,
I like it. Did you work for HB&B? If not they should hire you as a strategist.

2nd, for a daytrade when I see the chart bottom for XLF. So far it's continuing the 2 day trend established on the 16th at 14:50 or so.
I think I was lucky last night.
My $124 "short" could have been well over 126 this AM....

Craig & 2nd

Just got in... Am I reading the posts correctly? Craig sounds bearish but 2nd with his FXI buy appears bullish.

HERO hitting 52 week low.

I just wanted to say thank you to Bill and the tech team...Yesterday afternoon I made a request for a feature in the website and in a matter of hours it was implemented.

A few days ago the iPhone got a software update which allows users to create webclips and put them on their home screens (basically a bookmark to a webpage). By default the iPhone takes a snapshot of the page to use as the icon on the home screen. The problem with this is that if you take 3 or 4 websites - take a snapshot of each - and shink it down to 57x57 pixels, they all look the same. Websites can distinguish themselves by defining an icon that they want to be used instead of just the snapshot. I grabbed the "Bill Cara" banner that is at the top of the page, and from that made an icon. I sent it to Bill and the Cara Tech Team and they put it up. It looks great on my iPhone - thank you!

By the way, if anyone is interested in doing this for their own website, here is the link to the apple documentation (it is pretty straight forward):
http://developer.apple.com/iphone/devcenter/designingcontent.html

Full moon Monday... lunar cycle traders watch out. :)

BullHunter, nice scenario. I think this market, and money, in general, is being fought out like a war, and always against us. But, pardon my ignorance, can HB&B really trade 24/7? If so, seems as if we all should go flat, each and every night. By the way, thank you for providing the upgrades and downgrades every morning.

SLB getting pounded!

isaiah- that's why they call it trading...may see an extended bounce from here..or it could drop to test 12,000 anytime...keep position sizes small and be quick to execute...

"can HB&B really trade 24/7?"

writersblock,

I've always assumed that they could. If this is not correct, could someone please elaborate on the subject.

It's my pleasure to provide the Ratings Changes every day, my small contribution to this wonderful community.

Regards

Aye Isaiah,
I'm bearish in a bear market LT. I'm good playing a bounce, but I think it's a bounce.

Maybe 2nd will restate his position as I'm not totally clear on it. I think he's playing the bounce but think he is bearish LT as well.

Here come the rumors....now speculation on a 75 basis pt Fed rate cut. Will they stop at nothing?

Craig

That's what I figured. Just checking.

hunter...

All they ahve to do is trade the futures markets...

speaking of HB&B- if i wanted a rally->keep the morning trend line flat, take it down for another shake-out down to buy points, and spring the bear trap in the afternoon...if i really wanted a good time, tweak the media (and of course, the president's speech)...what a joke (or not)...LOL

The HB&B are still trying to offload risk to us...

My question...Who are the suckers buying? No offense 2nd_ave..:^)

Wall Street daring, MIC, also hitting 52 week low.

Wall Street darling, MIC, also hitting 52 week low.

Craig

I think it was Rick Santelli that said this morning the Fed should just drop the rate to ZERO and change the bias to TIGHTENING.

Lots of ideas all over the map.

bg- that's OK, man...any unintended offensive remark may well turn into an unintended compliment at any given time...

I decided to sit on my hands today.

I'm not in a good position to get in on either side. I'm holding my core positions in CHSCP, TM and WGW, all red for me at this point.
Maybe I'll get another chance for the ultras.

Sold or covered everything else into this AM rally for good or bad. Actually they were all good but could get *gooder*. LOL!

CNBC stating Pres speech on new plan at 11:50AM

basketguy....I think HB&B already unloaded risk by banging the market up this morning...GE's results is not that great...I used to work for the Immelt..loves to beat expectations.Watch the put/call ratio couple of days before expiration and lean against the crowd...

basketguy
the "suckers buying" are the big boys wanting to close out your shorts so they can take them over and a few sharp guys like 2nd who know how to trade the bump. See Bill's comments in his Market Recap today if you haven't had a chance yet.

basketguy....I think HB&B already unloaded risk by banging the market up this morning..trade with HB&B ot against them...GE's results is not that great...I used to work with Immelt..loves to beat expectations.Watch the put/call ratio couple of days before expiration and lean against the crowd...

So much for reloading on SKF. It's obvious I should have held on to it. It's up another 5 bucks and some change.

Re: the President's Plan

I wonder if this is like the "plan" in Papillon?

A small metal tube shoved up a certain body cavity.

:^)

Bh re HB&B, GS trades around the clock at different exchanges. Remember Kaimu’s link to the GS short gold/silver information you have to disclose in Toyko. After we close, they move on to Australia, then Japan, then Singapore, probably Dubai, then all of Europe before we open. O’yeah, I forgot Shanghai and HK.

Can’t help but think what’s going to hold up the markets on Tuesday (Mon holiday) after options expiration, president stimulus, etc. today.

Golfer if you’re the last one up there when you leave for AZ, turns off the lights . . . LOL…stay warm.

Basketguy heading to Western Michigan this afternoon . . . subtract another degree or two or three during the evening hours.

S thrown out today after announcing subscriber losses, cuts and office closings. Down to 8.15 now up to 8.70 area. Someone will buy this company someday. No position.

Rick Santelli didn't hold out much hope for the markets either. The bond grown-ups are usually pretty sharp.

2nd, XLF is a falling box cutter. The trend remains unphased. If I were standing next to you I would try to pull you off the tracks...or at least try to talk you off.

Ha ha Nice one Bill

The pres is shoving something to us...I would rather take that metal tube right now...

Thanks for the 24/7 explanation, Bill.

There goes the rally...

Look like margin calls are going out at a frantic pace...

Gotta raise some cash

Craig:

"I decided to sit on my hands today.

I'm not in a good position..."

I am glad you went on to explain yourself. :>)

here we go...

They've turned the market into a casino!
Look at this - up 200 down 200 , etc

There is no regard for greater good, its just a huge casino that takes in TRILLIONS in 401k money to leverage bets, make derivatives,
The electronic herd.
Truly, there is a destruction of country going on by those that only think $$ and themselves.

Thomas Jefferson warned about bankers and especially when they [see Paulson] get in bed with government.

Its too bad.

HGD.TO- wavesmash, don't know about you, but making sales here...

I don't think anyone will want to be long financials going into Tuesday with AMBAC reporting and conference call.

It's looking like we may get another big "tails up" day today, pretty much accross the board. Inverted hammers - not generally a sign of reversal in a downtrending market.

Maybe Bush's press conference will pop this market, but I don't think so.

UYG- adding at 30.95...

Seamus:

Just looked at the weather forecast for W. Mich. and as expected they have a weather advisory for "Lake Effect" snow...

Be careful.

Larry Kudlow--
how wrong can an "expert" be?
I mean, I'd be broke if I listened to him,

Question: Does -Can Not Be Corrections- CNBC TV hire journalists as reporters and these bulls only who have no critical thinking to keep people dumb?

Bill, thanks for the explanation. Please keep us informed as to when Cara Trading Advisors is up and running. BY the way, does using IB, which I think you've said your company will be affiliated with, get us around the problem of frontrunning, i.e., do they route their own orders, or do they go through Knight, or someone like them?

Re: Larry Kudlow

I'd sooner take stock tips from the kid playing banjo in Deliverance.

or even the hillbilly who "went the distance" for Ned Beatty. :^)

golfer thanks . . . that's a good reason to leave in the afternoon rather than the evening

Craig out of EGLE? Thinking of selling 17.50 puts on Tuesday if it drops . .

2nd,
Watch Williams %R on XLF. It was at 99. Now dropping a bit to 82. If it starts to drop that is your ticket.

Plus Bushy is blabbing.

Maromatics,

Just curious, how can you be so certain that gold will go down "as the ressecion deepens." I was under the impression that what we now face is stagflation. Is that not so. The truth is that no-one knows what gold will do short term and no one can risk prophesy. Long term I believe this to be a gold bull and I will continue to believe it until proven wrong. Gus (disclosure, long gold).

GR,

The answer to your question has 2 time frames:

- Immediate term: gold is stretched after a great run, and is ripe for a technical pullback. It will be helped by margin calls in which the baby goes out with the bathwater. For the time being, all decent dips are good long entries.

- Later on, as deflation really kicks in, all asset classes lose value, including gold. But we are not there yet.

FYI I am expecting the gold pullback to jump in for a whle. It will be great before it gets awful.

Cheers,

How's this for a prediction. The stimulus package sends stocks and the dollar up and commodities and treasuries down.

Then when the FED cuts rates everything reverses.

It seems like a fitting play for HB&B to concoct.

Rob.

Good Morning from San Francisco,

I read Bill's commentary everyday. Today's comment shows one of his basic thesis; how to be a successful trader.

I marvel at my daily portfolio balances. They are barely
fluctuating these days. That's because I've learned to understand the macro view from Bill.

I've been 30% cash, 40% in ADR RBS preferred 7.25%, and long 30%. I've learned to take my profits and buy using Bill's system;
adapted to my style. One of these days I'll short and buy calls and puts; when my understanding of the concepts and charges
are crystal clear. I have been making some money on the QID,
over the past year. It's been fun reading the frequent comments
about the QID & SDS trades. Educational, too.

I don't comment much, but I feel like one of the gang. Every morning I look forward to spend the day with all of you.

Thanks Bill for enduring the frustrating months of computer
viruses, and the difficulty of your internet connectivity this summer.

Sarah-Hadassah

P.S. Looking forward to participate in your up-coming financial
products.

2nd...

See a long term trend upward in HGD still.

Short term could dump a bit again. I'm still underwater unfortunately.

Ambac Financial Group Earnings Conference Call (Q4 2007)
Scheduled to start Tue, Jan 22, 2008, 10:00 am Eastern

Whew! Thanks to God and HB&B for this mornings mini rally. I made a small sum on GOOG in about an hour, was able to turn a profit on WAG,WM and MU! And also able to get more to the sidelines! thanks here to those like bg who call it as it turns. I did not want to be holding any st when BB starts to speak.
Thanks finally to Bill. You teach many people, far more than you know. You probably get a little tired of repeating yourself. I will be just another to say keep it up! It WILL get thru the noise
peace from north puget sound...I am off to be Grampa today, probably go tromping on the beach throwing sticks and getting cold and muddy. FUN!
Gray

Bill,
Excellent comments today!! I'm getting better at the trading game but just need to be more patient and less emotional with my trading. And, like 2nd says, I need to start looking at both sides of any trade I initiate to see the other side.

And I need to change sides quicker when the market goes against me.

Rob.

GRgold,
At one time everyone thought stagflation was not possible thinking that a slowing economy would inevitably lead to lower prices. The 70s disproved this notion, but the reality is that in the 70s there were other external factors which kept the price for food commodities and oil rising. There were very bad drought conditions in the midwest during this period which kept upward pressure on food commodity prices. And then there was the oil embargo which of course resulted in upward pressure on oil prices. Many (myself included) feel that it is abnormal to suffer a sustained period of a stagnating economy with simultaneously rising prices. There generally have to be other supply shocks out there to perpetuate an upward movement in prices.

The stimulus package...

http://tinyurl.com/32gzvd

Seamus: Yes, traded it a few times yesterday so I'm up quite a bit and out for now.

I think patience will pay handsomely at some point. Just not there yet.

"President Bush remains committed to fiscal discipline and balancing the
budget by 2012. "

lol

I am not a trader just someone concerned for my 401k and as such, about 2 years ago began religiously reading this blog along with Ritholtz, Roubini, Shedlock,ITulip,Mauldin etc. On 5/10 of '06 I figured this last rate increase would be the straw that broke housings back and an (un)timable yet predictable crash would ensue. On that date my funds went to short term treasuries and have been parked there since. I don't see capitulation until the vix rises to 50 or higher. At that point I might be willing to stick my toes in the water. The delemma would seem to be the correct diagnosis inflation vs deflation, if one accepts the deflation sceme as a precurser to reinflation we haven't begun to see the carnage. In order for reflation to work money must be placed into the hands where it will effect the greatest number of economic market participants, logically housing was this targeted asset class what on earth could take its place.

I see some firming on my screen
while the Dow plunges to 120.66 here

Rob,
Could be, but if I'm Bush, with big IOU's to Party faithful and elections near, I cannot risk a failed "plan" right now. Therefore, I want to come to the rescue AFTER all of the air is let out. Then candidates can talk about the tax breaks, etc. that brought us back from the depths. I'm guessing his remedy will "require support from the Democrats" (who can then be blamed for not acting soon enough). The Bush plan kicks in after the next big drop. Look out below!

I know your brokerage doesn't always have a certain stock available for you to short, but more frequently lately I seem to being getting that "no shares available to short" message. Is anyone else experiencing that. I tried to short DRYS today w/ ameritrade and got that. It may be that I'm just shorting more these days.

The stimulus package linked above is purely a political document where the president is demanding he get everything he wants. Not encouraging

Looks like a selling climax is coming soon.

The Ambac conference call will be an interesting one. MBI and Ambac are trading like they are going to collapse. That could be the catalyst for capitulation and a rebound rally.

I'm guessing the Fed is not emergency cutting because they know they can not stop this train.

"By passing a growth package quickly, we can provide a shot in the arm to keep a fundamentally strong economy healthy......"

- George W. Bush

"Prosperity is just around the corner"

- Herbert Hoover

testing 12,000...

12030!

I'm not going to pull out any Lincoln or Caesar quotes vs. GB but I'm sure they're out there...

This is bigger than the US... so any stimulus package probably needs to be bigger than them too.

SH:

"...One of these days I'll short and buy calls and puts..."

I share your basic ideas and tactics and am beginning to learn about shorting and option trading. To date, I am not certain that out and out shorting is for me (maybe the ultra shorts) but I am pretty certain that trading options will be part of my strategy in the near future.

$vix is at 29.25,,,higher than yesterday....:)

Fear is here. Not panic yet, but fear.

Now we might see some capitulation and a bounce.

Adding to WGW.

Shorting SKF here.

Gray -- Thanks for reminding us of the things that are truly important in our lives.

Looks like that market really like Bush's plan, NOT!!!

I say we just take it down to 10K right now and get it over with!!

I want to see HB&B panic sell!!

I think they're too chicken to panic sell!!

Rob.

shoulda waited, but didn't think it would really happen...;)

LOL! Well that was short and sweet.

Covered the SKF for a small profit in time to seeit reverse. Amazing.

We are at the Feb low on the DJIA.

"Losing the AAA stamp would cripple the bond insurers and throw doubt on the ratings of $2.4 trillion of debt the industry guarantees, causing as much as $200 billion in losses, according to data compiled by Bloomberg."

http://www.bloomberg.com/apps/news?pid=20601087&sid=afPiWbgEN8qU&refer=home

The debt ratings agencies should have downgraded these insurers earlier but they are everything they can to avoid it in order to prevent the cascade of losses.

Dare I say its rally time?

There are a lot of puts for the MMs to try and take back once they are done crushing the calls.

stimulas package = free money for everyone!
What a joke

Hi,

What a great trading day!

Sold my SKF and SRS after the Dow hit my 12100 prediction. I timed the purchase terribly and never thought I would get above water but I did!

Went long Zolt for the bounce up into the Fed meeting.

Thanks for everything Bill!

2nd

Keep an eye on FXP.... FXP is dropping back again... I took a 5.35pt ride on it a little while ago when the market had its daily mini melt down.

Gun slinging again today.
Shorted SKF when Paulson started talking and covered nicely up.

Looking for more opportunities.

2nd,
Williams %R works really well for XLF sentiment.

Billy - Nice call. Perfect timing.

Hi,

Ask yourself:

"Would it be sound money management to go short into a 3 day weekend, knowing that the market may move significantly higher by Tuesday"?

Yeah, right...

OldGoat - thanks for the compliment.

I have to say I thought about posting something similar to that on more than a few occasions this week but had to exercise restraint!

This is the first time in quite awhile that I would feel comfortable recommending to family/friends (non-traders) to allocate some long term capital to equities.

I think it is a possibility we may see a violent rally before the day is out as the ITM put holders cascade onto each other selling puts. Also the market nevers gives this good of an opportunity to those with restricted funds, i.e. 401Ks that can only transact at the market close.

I bought some NMX and WGW today. I had been waiting to get a piece of NMX for a long time.

There were some great deals today on WGW, still is.

Maromatics: Can we take that as "there is no way we go up by tuesday"?

Are you shorting/short here?

I always appreciate your take...

Recession? What Recession? Oh,you mean for the morons who took out teaser loans and morons who lent to them? IBM,INTC,and GE see no weakness anywere.
I know if I listen to CNBC,there is a recession,but its a recession for all those involved in financials who it seems have been doing exactly what Enron was doing.
I dont see a recession, I just hear many people guaranteeing one, that means you go the other way. If we do go into recession it will be a good thing. We need to wash out much excess created by greenspan.
Bought sgp,ep,hk,and acn at open and sold for profit. OUT.
What do you trust more, stocks of US companies or the US dollar? The dollar is worthless,it is paper,the only safety now is in good US corps. Government will have to inflate their way of this mess. If you go to cash make sure it isnt in brokers money markets. That is the real mess.

here we go!!! we're going below 12K today

Rob.

I'll bet ABK gets taken over like Countrywide. Otherwise the cascade of fallout from that would make this last 10% look like a cake-walk.

Rob.

IWA and its 10% yield beginning to look attractive for income purposes with a potential for capital gains.

Many of these rural telecoms have been pulverized beyond reason, IMHO.

Finger

In regards to bank buyouts, I have a feeling that multiple banks are circling WAMU trying to get to a point of comfort with the level of transparency of WAMU's mortgage portfolio before biting

Foreign banks have to be salivating over an opportunity to get a retail footprint like WAMU has.

BH,
Are you sure on the div?
I see on my screen about .35 cents annually.

I held IWA quite a while ago, sure is hammered here.

BH,
Are you sure on the div?
I see on my screen about .35 cents annually.

I held IWA quite a while ago, sure is hammered here.

Another one, although oil related with HG expossure is PGH, a CDN oil trust.

Craig,

http://tinyurl.com/2eavce

Uranium miners getting hit hard today; CCJ 34.00 PNP 3.20 MGA 2.15.

Ah, there we are... .40 a quarter.

Thank you!

2nd_ave:

How long do you plan to hold those UYGs you picked up?

Some noted bears have turned interim Bulls.
I wonder if thats good!?!

I could see WAMu getting taken over too.

The dollar is near it's high of the day.

Gold has reversed and is trading higher.

3month LIBOR is 3.89, That's .36 below the FED funds rate.

Imagine how hard the market will drop if Bernacke only lowers it by .25 instead of the .5 already priced in.

Rob.

Re. VIX...

Stormrunner...With all the ways today to spread risk, you may never see another spike above 50...

take a look at this sight. The guy does a lot of work Re: VIX

http://vixandmore.blogspot.com/

Craig,

For a minute there, I thought that $1.62 US equated to 35 cents Canadian. :^)

I just heard Hillary saying that we need to freeze interest rates. Doesn't she know Ben is lowering rates? Or maybe she thinks the banks will raise rates soon? I wonder.

Rob.

sshock -
"They say there are two sides to everything. But there is only one side to the stock market; and it is not the bull side or the bear side, but the right side."
-- Jesse Livermore

IWA: 10 year chart shows yesterday was the 10 yr low of 14.52.

It has only been here (15.29 or so) twice before in 10 years. Seems like a good risk/reward with over 10% div. .40 a quarter ($1.60) on a 15.00 stock.

fazeli- i plan to hold UYG...how long, i don't know->the nice thing about buying them last night/today is: i didn't buy them any earlier than that! ;)

Still watching the bullion action today. imo, this is no correction.

The gold basis still seems very tight, with virtually no difference between the spot and near futures price.

A correction in the gold price would mean the basis extends out to ~$13 as it had in August. There IS a correction in the gold juniors today, as mostly panic sellers conform with the same fear as last August, that 'the big kahuna' is nigh.

Most speculative investors see no difference between base metals and gold, so they must be cleaned out before we can advance.

Its Friday, this is normally a weak day for interest in the gold. So far, we've seen only a little drop in bullion.

The chart is filling out nicely, and we are going into a strong January for bullion prices, I am still sticking to my $930 interim high before any pull backs. I'm thinking at least not until the first week of February.

Here is the call, for Jan. 28:

http://www.321gold.com/editorials/hoye/hoye011708.html

The sideways action after that will be lengthy, but at the same time, it should be apparent that gold is now performing far better than any of the other metals. Keep in mind that bullion has now superceeded all currencies:

http://www.gold.org/value/stats/statistics/dailyshort2000.html

Lots of time to look at the fundamentals while my gold junior continues to dog it.

Anyone have a take on Intel here at 19?

IWA really only has a 3 yr chart.
Still has only been at this level twice before.
That might have been where I bought it before.

Even if it drops to it's previous low, the div will still put you up over .60 a share.
Bought a few here and put in a wishful plunge order as well.

The volume on the QQQQ put 48s is 4,653, out of an open interest of 147,210. Would anyone know why this is so low?

fransix
"Most speculative investors see no difference between base metals and gold, so they must be cleaned out before we can advance."

try a hui:gyx chart over 8yrs, if that were the case it would be a flatish chart but as you will see there is an important breakout on the chart recently and obvious money flows

Good luck, Craig.

I haven't pulled the trigger yet.

Anyone else looking at WM with this nice triangle/flag intraday? Looks to be at the bottom trendline of the flag.

Fransix: Don't we want sideways action on the bullion for a bit? The longer the base.....

market rewarding those able to predict the path(s) of maximum frustration->one that stands out right now is XLF down 2%, WM up 8%...

Attention FRP shareholders.

Just received word that management has killed the dividend. This is not commonly known as yet. Time to get out?

BH,
Like my wife says..."it's a very small" position.
LOL! I take small initial positions and if it pulls back to the low I'll load up. In the meantime the div keeps me safe enough as does a stop and allocation.

isaiah- the problem with FXP right now is exposure to a short squeeze...i don't see it as an 'easy' trade here...

isaiah- the problem with FXP right now is exposure to a short squeeze...i don't see it as an 'easy' trade here...

whereas opening long positions right now=opening at 1 or 2 year lows...

Re: FRP dividend

Slashed from $1.59 to $1.03.

Craig,

Thanks for your kind words.

No, that is not what I meant. What I tried to say was actualy the contrary: I believe that prudence would advise to cover shorts before the 3-day weekend...

Entering an ultra long Japan (tracks Nikkei 225)at eod today. Looks like we may have a failed breakdown of the June 2006 lows.

Re: hui:gyx

The move in the hui is probably not due to speculation, as many of those stocks which make up the index are producers, not explorers.

My concern (sorry if my comments seem so biased) is why the gold juniors have not performed remarkably well under the circumstances, the fundamentals certainly seem to warrant it.

MArket is going to get wacky the last hour and a half...careful with your stops...long or short...whichever way you are trading intraday.

WM: broke triangle to the downside. Oh well.

craig-

sense (an inkling of) a change in the wind, my friend...(and i'm trying [hard] to divorce the cues from the fact that i'm currently holding an UW position, but)->the time for daytrading may be coming to an end...first 'cue' was the directionless trend on wednesday, followed by the steep drop yesterday, then a nice set-up for longs today (see 1041am post)...have no interest in dumping any positions right now, and in fact leaning towards adding to the long side, for an extended trade...but thanks for trying to save me from the boxcutter (LOL)

DaveB- following you (back) into Japan...

Buying NOT.V, BMK.V and FNC.V right now.

Closing remainder of my XAU short position at eod today.

Likely to see reversal on this Tuesday - no desire for that risk now, however if it breaks the rising trendline from Aug 2007, then I'll get plenty short again.

2nd...

Still looking for sub 11900 levels DJIA...

Just want you and everyone to be careful....

BE CAREFUL MY FRIENDS

fransix

I agree,not biased at all. Here is an excerpt from Jim Willie on the Jr situation(much like what mexico mike suggested recently.

” from Jim Willie:

Harper refers to the commercial securities of the 30-day to 90-day type, backed by car loans, credit card debt, and mortgages. The US interbank problem has spread to Canada, where the commercial paper market ground to a halt since August after Coventree and others refused to roll over maturing short-term debt. The bankers spot the 9% composition in subprime mortgage loans and backed off totally in bank loan acceptance as collateral. The impact of recent adventures has put some key parties in the lurch. Losses could surpass 50% for Barrick Gold and Baffinland Iron Mines, in addition to the nation’s largest pension fund manager Caisse De Depot et Placement du Quebec. A grand loss would be most welcome to Barrick, suspected of broad illicit behavior, perhaps shorting junior mining stocks (just wild guess). A bankruptcy of Barrick would be tremendous news, forcing liquidation, disclosure, and halted illicit trades. The absence of fiscal lead in the Canadian bank problem resolution leaves the problem squarely with the banks and credit market to resolve. Big downdrafts are likely in asset backed securities. We will see how deeply Canadian banks engaged in lunatic behavior with leverage against such bonds.

This precious metals bull market has seen little if any acquisitions by large mining firms of smaller explorers and young producers. Some consolidation was very evident in the period from 2002 to 2004, see Kinross for instance. A higher gold price has been accompanied by falling gold production. Large miners severely cut their geologist staffs in the last decade. Now the best geologists work for juniors, given the name since the smallest firms. The large firms must replace their depleting reserves by acquiring those proven up by the juniors, who have much greater success rates. Mexico Mike suggests collusion is taking place, whereby several larger firms decide among themselves which properties to pursue, which juniors to deal with, leaving most juniors to struggle as they go it alone. Even joint ventures seem scant in number. Majors expect to be able to grab juniors when they wish, likely later, at bargain prices when their assets are more visible but their finances are damaged. The majors are more closely involved with collusion with the central banker agents like JPMorgan and Goldman Sachs. So why would they not collude among themselves also? It is cynical but makes sense.

Mexico Mike suggests that Barrick Gold might be a ringleader, directing gold mining sector collusion. Their Board of Directors include Papa George Bush, hardly a fellow with mining experience or the best motives for gold. Barrick CEO Gregory Wilkins plays to the gold crowd, with “Global mining supply is going to decrease at a much faster rate than people generally believe.” MMike reasons that Barrick might have a mission to short the junior mining stocks on a broad basis, as an adjunct mission to their own illicit hedge book program intended to suppress the gold price. Naked shorting of stocks is more common than realized in Canadian mining firms. Barrick lied in a grand manner in summer 2007, never covered their hedge book, only covered ongoing mines, with half their peak hedge book position still exposed. Yet Barrick masquerades as a favorite large cap gold mining stock in the sector. As majors corner the investment flow of funds on the stock equity side, they can easily use their own higher priced stocks in buyouts of juniors, all in time. This would deprive junior stock investors of their due reward for finding ripe ore deposits. The climax suspicion comes from the NovaGold story, as they successfully defended themselves from a hostile Barrick takeover, only to find themselves on the losing end of an altered engineering estimate for costs at the Galore Creek copper-gold project with Teck Cominco. Suddenly the NovaGold stock price is cut in half. Punishment? Who knows? Watch upcoming acquisition takeover stories. Mexico Mike calls this the biggest market rigging scam of the century.

In my view Barrick is as evil as the gold cartel, as evil as Halliburton, as evil as the worst firms on Wall Street. Even John Ing of Maison Placements Canada of Toronto openly promotes Barrick as an investor, writes about the virtues of gold investments, but is probably paid to turn a blind eye to what scum they are. Some successes might light a fire under the junior mining stock prices, enough to force a backfire on the Barricks out there engaged in active shorting of junior stocks. One must be aware that acquisitions are difficult for the majors to conduct while desperately fighting against the higher gold price, the very acid to kill their balance sheets from short gold futures contracts. Their hedge book problems prevent them from actively devoting capital toward buyouts. This point is overlooked by Mexico Mike. They are slowly being drained of capital as the cover their losing gold hedges, and ratchet their own lines in the sand ever higher in a loser’s game. Also, why would any bank assist in the financing of a buyout deal, when large mining firms have such lousy balance sheets? "

I have not seen this kind of divergence in the jrs to the pog in my short 7yrs of following it,while a friend of mine that manages pm funds says it has been 45yrs for him.

2nd,
Looks like the market may close stong for once. Good call.

Rob.

2nd,
Looks like the market may close strong for the first time this year. Good call.

Rob.

I am with you basketguy. Picked up AMD, MBI, QQQ puts today, plus some FXP insurance for my registered account. Did buy some INTC @19 though.

What kind of crazy house do we work in?

"When the going gets weird, the weird turn pro."
- Hunter S. Thompson

Pres GW (Hoover) Bush spoke, but no one was home, I guess we will all just have to be thankful when the Fed “saves” us from the pit by offering to buy up all those worthless mortgage bonds with tax money - ‘course it won’t be called that..

Thinking of Hoover made me think of Will Rogers. He went through similar times back in the 30's (believe it or not, history does repeat), and he always found a way to put some humor to it. So, I went looking for some of his comments and found this wonderful accumulated sayings with commentary. Here are a couple of snips and a hope that you will read the rest for a smile over the weekend.

... He could not take the lamentations of Wall Street seriously. England, which by international treaty was supposed to protect the Wailing Wall, would have to come to New York to do it. "The Wall runs from the Battery to the Bronx. You know there is nothing that hollers as quick and as loud as a gambler" [insert Banker here] ...

... After the Crash, there were investigations of the market and resulting scandals. Rogers summarized one Senate investigation of Wall Street by saying that they discovered that the street was "located in the sharp end of N. Y. City, that not only the traders but the street itself is short, and neither end don't lead anywhere" (DT, Vol. 3, 155). He approved of the several restrictions put on the exchange by the New Deal. When Roosevelt cut the trading sessions down to three hours a day, Rogers said that this was FDR's way of telling the brokers that there were only three hours allowed to work on the suckers, "and the other twenty-one hours they are under the protection of the fish and game laws" ...

... President Hoover had created the Farm Board which was supposed to solve the problems. When the Farm Board ordered every third row of cotton plowed up, Rogers said this was a good idea that ought to be carried farther. We should also destroy every third Senator, Congressman, and stock broker. Turn cows into every third golf course, and convict every third gangster arrested ..

Here’s the link and have a nice holiday!
http://tinyurl.com/259whz

There are approx. 800,000 QQQQ Jan puts in the money for a cool $250M.

Still only 5,293 out of the 147,210 48s traded today (?).

2nd, Remember December when they used the holiday to kill the shorts? I'm with you...not doing that again.

We're at key support, I suspect you are correct and we'll see some upside. I have no idea for how long, but that's why I've been bottom fishing for decent div payers here. If we start a run I'll add to my positions.

Besides juniors I'm long PGH, IWA, CHSCP, TM (1/4 position) and BRK/B.

Not yet long financials, still bouncing across the bottom. If it starts a move I'm on it.
I think we have lots of time next week. No point in risking anything and ruining my three day weekend.

Bill,

I think that note handed to Bush read...."Mr. President, none of us has a clue either. Give it your best."

I agree with you Bill. I think that Bush's speech should have read "I recognize a need to implement an economic stimulus package. I will work with congress to bring forward the complete details of this package by next Friday."

SIO2...

Good call on INTC...I like the stock and at this level looks good for a longer term hold...

People have 3 days to ponder their losses and Tuesday may see the day of Reckoning for many looking to get out of what has been a mess..

Looking to buy on the panic...

2nd, Remember December when they used the holiday to kill the shorts? I'm with you...not doing that again.

We're at key support, I suspect you are correct and we'll see some upside. I have no idea for how long, but that's why I've been bottom fishing for decent div payers here. If we start a run I'll add to my positions.

Besides juniors I'm long PGH, IWA, CHSCP, TM (1/4 position) and BRK/B.

Not yet long financials, still bouncing across the bottom. If it starts a move I'm on it.
I think we have lots of time next week. No point in risking anything and ruining my three day weekend.

If it all turns against me I'll be out before the close.

Interesting TA talk on Bloomberg. Analyst thinks we will head down until we get a VIX over 40. IOW, real fear and loathing.

If I ever meet the type key inventor I'm going to kick him in the nuts.

Thank-you, Tbar.

Re: Price fixing in PMs

Its no small co-incidence then, that the gold junior I'm invested in has a long-standing JV on a property beside the Snip gold deposit with Barrick, which has remained inactive for years, since 1996. The discoverer of the Snip deposit is the biggest shareholder in the gold junior I'm invested in. It normally leads the $C gold price and has been lagging it badly.

I'm thinking that regardless of how you cut it, advances in the price of bullion over the years reduce the price fixing argument to a moot point.

Its all the same in the end, nobody gets any special arbitrage unless they are really lucky even if you are Barrick. If a large gold corporation wishes to price fix in world gold markets, then there is no better market than the Australian gold market. Its painfully obvious how moves in the $C and $A gold prices co-incide.

Its all about relinquishing control over an issue which nobody seems to agree. Its thoroughly impossible to convince any management figure once they have tasted absolute control to relinquish their grip, regardless of the material consequences. So we are seeing abberant trades and stubborn refusal to change methods, though its been years since gold has seen a bottom.

Looking at the copper chart and silver chart suggests to me that somebody 'out there' is attempting to prevent a corner in those markets, but can't seem or doesn't seem to want suppress the gold price.

Craig,

Very sexist remark!

for those who trade the XGD on the TSX or its
double leveraged HGU,

the XGD has retraced back down to the halfway
point of its rise from the december lows.

not sure if this is a textbook technical target point, but rsi is close to the mid-way line, sto is still down and MACD is about to register a downward cross over.

i may look to add next week if volume comes in on any quick rally's keeping tight stops.

Not really...if it were a woman, and it certainly could be, she wouldn't have nuts, so I'd have to think of something else.

I'm not sexist, just not that imaginative.

Level 2 on the jr golds makes no sense at all, if the gold price spikes the offers are (still,they always are)exponentially larger than the bids. Quite intimidating and I can only think it has been designed that way.

Abx as I understand it still have all their hedges outstanding on their jv's with jr's so this remains a downward pressure on any jr they do business with in this rising pog environment, by design I would think which meshes with Willie's article.

2nd,
Pulled the same closing trade on SKF as yesterday. Held while XLF williams % R went from the 40's to zero and covered at XLF $25.51.

XLF now looks to go up but it's the long weekend and I'm out and will sleep like a baby.
Strike that, I won't be up every few hours with with a wet diaper. I'll sleep like a log.

logs don't sleep, but that's another post...

at the finish line->FXI up, two positions in UYG->one above and one under the water line...three days to think it over...

They will this weekend!

'Mericans, have a great three day weekend.
Canuckadorians and global traders, you lucky dogs, I wish you the best weekend and a most profitable Monday.

Another TA analyst (Keith Hennessy) on Bloomberg calling for higher VIX on volume, and DJIA 11,800 as the next support as we broke through previous support.

Gotta have the high VIX though before we find the pony at the bottom of this pile of pony manure.

Re: Offers overwhelm the bids in the gold juniors

Its fairly normal to have offers overwhelm the bids in any given trading day. That's because the volume had been so low for so long and the sellers line up so quickly and uniformly after long periods of accumulation, that its fairly impossible to overcome the sellers unless a protracted buying spree goes on in a particular stock.

This happened in the uranium juniors, and I am quite certain that Barrick has no interest in that sector. The thing that got U juniors out of a certain trading range was a spectacular advance in the uranium price, and particular juniors had good acquisitions and discoveries, albeit temporary runs into many multiples.

It almost always starts with a short squeeze, where tiny volume buying shares against much larger offers actually brings up the share price.

The way to get a clear perception of whether your particular gold junior is performing 'normally' I suppose the best way to accomplish that is overlay the share price against bullion prices in your currency.

Maybe we can get some upward traction from our beloved Canadian juniors on Monday while Wall Street sleeps.

Stimulus Package my ass.

It's a welfare check for us working poor, and another bonus for CEO's of businesses that already gave themselves record Christmas bonuses in December.

Bush and Paulson were wearing suits that cost more then the $800.00 dab of money they are going to half heartedly give back to the working poor.

And...about that so called speach.....what the heck was that all about anyway? The news channels already announced everything those over payed thugs said. And Paulson...did he have to take a dump or what? He was shoving people out of the way trying to get through that exit door.
Disgusting......CEO's 1,000,000,000,000,000 working poor, ZERO.

What's $800.00 going to do to this economy?

JOBS.... Einstein, people need JOBS to raise a family, not an $800.00 bandaid.
I'm done blowing now....sorry everybody!

Is anyone else getting tired of all the talk about economic weakness, substantive interest rate cuts and stimulus plans etc over the last few weeks? When are the authorities going to take ACTION. The street would have been satisfied with a 50bp cut a week ago but now we're pricing in 75 with talk of 100. What's the real game plan here? Everyone and their brother says that the Fed has been behind the curve since at least August. Are we trying to break the commodity producing countries by engineering a deep US recession? Are we trying to debunk the decoupling thesis? Insight anyone?

We're trying to bring down consumption of oil, so it will last a little longer. High prices didn't do it, so maybe a nice recession will.

FranSix at January 18, 2008 4:31 PM

Thanks I appreciate your explanation.

Follow-up on CNU.V
The company has not responded to my two emails. From Fundamental Research (2008.01.15) regarding CNU.V - Continuum Resources Inc. (TSX.V: CNU) – Delays at Natividad Leads to Exploration of Other Oaxaca Properties; Fair value estimate lowered to $0.49 per share. (14 page article requires subscription which I don't have). Disclosure: Long CNU.V.

Re: working poor

As I see it, there is no interest in fixing any sort of price in any market except labour. Companies have no problem with chronic, surreptitious larcenous behaviour against employees.

Many companies are set up solely to bilk employees of their wages and lifestyles, and this is now considered 'good business.' There was a time when the boast was well paid employees, not accolades for the 'most fleeced.'

During times of universal deceit, telling the truth becomes a revolutionary act.
-- George Orwell

FYI Personal Finance recommended selling FRP in the newsletter that came out this afternoon.

Re: $800

Hey, we stole all your money, sold you a house that you can't afford and decimated your 401K......but here's an $800 loan (you'll pay it back and more in higher taxes).

craig-

it's been eight months of daytrading, and time for a change (apologies to jasper for the fake-out last week)...

picked up INTC/SNDK/TM/HBC (all from the Cara 100 AZ) late in the day/AH, back into FJPNX/opened a moderate position in OAKBX (Cap Pres/Income) in the retirement account, and will be looking to add if/when we rally...time horizon-> (guessing) anywhere from one to six weeks...let's see how it plays out...it may all trend down for awhile, but (as bill likes to say), picked them up at lower prices than (just about) anyone else in the past 12 months...

2nd_ave to quit daytrading? Say it ain't so.

I just had a tough decision to make. Either watch Larry Kudlow or go to the package store. :^)

ALOHA !!

STAGFLATION
Look many factors have changed since the 1970s! For one back then we were exporting grains and food products that we now import. We were also manufacturing many more produts domestically and not depending on imported parts and foreign assemblies.

Import prices rise as US Dollar falls in value. Why does the US Dollar fall in value?

Just how high can US wages rise in a service based economy where services are not needed. WHere consumers in a consumer based economy quit or cut back on consumption. WHy should wages or commissions rise? Why should bonuses rise on Wall Street? In fact many are losing their jobs in financials and construction.

THATS STAGFLATION !!!

Thank our brilliant leaders who sold out to bankers and corporate CEOs and abandoned the US Middle Class with their corrupt monetary system and irredeemable spending. Real wealth here in the USA is out the window. We now run on fiat and debt. The rest of the World is not far behind ...

What did Nixon say ... NO POLITICIAN EVER LOST A RACE BY CREATING MORE INFLATION!

Look in the mirror!

Ambac downgraded
http://tinyurl.com/2nwqvy
"After Ambac scrapped plans to raise $1 billion in capital, Fitch Ratings cut the company's crucial financial strength rating to "AA" from "AAA.""

2nd,
We all knew that sooner or later this spiraling downward would stop and we would load up and lean into it. I've been mindful of this and started scaling into a few select long positions, some from the Cara 100 AZ/buy alert list like TM and some not on the list but stable well managed co's like BRK. Not large or even substantial positions yet, but a start. I was telling my wife today that it was going to be kind of nice to get back to longer term trading/investing.

Do I think we are at the bottom? I have no idea. If we break key support here I'll probably hold a few short positions with an eye to 11,800 and if we fall through that or we get even worse news, 10,000, but I'll likely be adding key long term buys when they present themselves.
If we rally from here then I'll do the same on the way up, but with relatively tight trailing stops. We'll know a lot more by the end of the month.

Either way it's been a blast and I look forward to hearing about your longterm successes.

Well all this talk of going long and not day-trading as much makes me think there may be hope for my 401K and maybe even hope for my QQQ calls.

Good luck to everyone!
Have a great weekend.
I can't wait for the WIR.

Rob.

Alright, let's not get too carried away!

Has anyone seen the $BPNYA or the $NYLOW?
These charts do not say rally nor are we that close to previous levels on the $NYLOW.
We are below previous low % bullishness, but the RSI and MACD are not at the lows on either of these either daily or weekly going back to Aug 06. Both can of course reverse and have, but I would think we would need to reach the previous lows. And the even lower bullish percentage isn't yet a buy signal but quite the opposite.
%BRNYA would be a chart to watch for a real bottom. Right now it doesn't look good.
Look at those macd/rsi's. Don't forget to look at the weekly view as well.

After reading Bill's daily, trading the day and seeing the charts it doesn't look like the bulls are in the game quite yet. They sure didn't do much today.

http://tinyurl.com/2ectq6 ($BPNYA)

http://tinyurl.com/2f78g9 ($NYLOW)

New Costco product wife bought last night: Sunkist "Cara Cara" Power Oranges. Double the Cara, double the power.

Craig,
Here's another interesting study.
http://tinyurl.com/yuccws

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.

Thank You YYZTrader! I received a similar study pointing to much the same thing that may interest you.

http://tinyurl.com/2mjjot

2nd, this is the chart I got from BR.

Awesome! Craig, I read your eulogy to day trading. And I was having second thoughts about unloading wag and mu today.Then between the time I scrolled thru my MarkM folder of charts starting with $BPNYA and $NYSI and thought about chatting up a contrarian thought, you came back with what I was thinking. This has been recognized as bad by those who have a clue. It has not gone where I am afraid it has to get to. One of my seat of the pants indicators is the CountryWide Foreclosure Page. On Oct 30 07 the page listed 1000 homes for foreclosure. Today the site http://tiny.pl/p676 lists 15,649 homes.
And the govt cant come up with a creditable number for inflation, why should I or anyone beleive the employment numbers.
peace
Gray

Fred - I think you'll do better phoning CNU. First, harder to duck a phone call than an email. 2nd, Canadian juniors tend to be open when you talk with them. You'll have a better chance of learning something on the phone ... offered FWIW

Quentusrex, thanks for the depth of detail that you went into in your analysis of HBC. For those of us learning puts and calls, there is another good description at this site
http://tiny.pl/p6rm
gray

You may want to upgrade your PC before March.... inflation isn't just for food these days.

"So why should you care?

Here's why. Because if things fall apart and a Tom Clancy scenario unfolds in the Taiwan Strait you can forget about upgrading your PC or laptop for a while. The hundred miles of shallow seas separating Taiwan and China happen to be the most important yet most precarious link in the global ICT supply chain.

So much is at stake for information technology companies – not to mention the global economy – that one of the founders of the island's semiconductor industry, Robert Tsao, former head of United Microelectronics Corporation, the second largest IC foundry in the world, began placing full-page advertisements in major newspapers asking the DPP to abandon political behavior that could be viewed as antagonistic toward China. "

http://tinyurl.com/2l52ab

Another liquidity tap turns off in Britain... ATM is closed.. see you next year.

http://tinyurl.com/yuqq2u

"Usually the funds hold a cash "buffer" of 10-15% of total assets to meet withdrawals. But Scottish Equitable said yesterday that the cash buffer in the £2bn fund had fallen to just £80m following a wave of redemptions, giving it little choice but to suspend the fund. The only alternative was a "fire sale" of its holdings which could leave investors even worse off."

wavesmash,

How do they think that will help things? If you don't allow investors to withdraw their money that will scare other investors. How would you feel if you saw someone else who purchased an asset, then the asset falls in value/price, then the other person isn't allowed to sell the asset. I would sure be freaked out.

So, they've prevented the firesale of commercial real estate, but they've risked the fire sale of other investment funds. Either way it sounds like investors are pulling out.

Jock,
I'm putting CNU in my KRY bin.

Fred

Grey, Everyone:

There has been two people calling this market like a square dance so far and that is Bill and Colin Twiggs. This report is worth seeing.
http://tinyurl.com/7fw5r

Note the mention of a retracement to retest new resistance at 12800, before resuming the bear downtrend.

I sent this link to 2nd and explained that if we trade these technical ranges, we don't necessarily need to day trade. Just look at the trends on these charts. They can be held for weeks to months in these trends, we just have to be careful to setup for intervention and use trailing stops or option strategies.
For instance, those still holding an ultrashort and not daytrading may be willing to hold it on a retest of 12800 thinking 12800 will fail and they will see 12000 and lower in this bear market.

I also ran a very, very long term chart of the DJIA with all the appropriate studies and saw that we aren't at previous bear market levels.
Additionally, if this is more severe than the sock puppet bear market, and housing finance and the general receding economy are going to last a while, then this 2000 points was just a dip.
The dot.com bear ran from Feb 2000 to Feb 2003.

We better get some popcorn and a comfortable seat as it appears this bear deal is going to be around for a while.

Nice post, thanks, Craig.

I'm a bit concerned, if I'm reading this board correctly, that some in here believe that this has been a correction and we're at or near the end of it.

While the market may be short-term oversold, IMHO, we ain't seen nothing yet. The Bear has a lot of growling to do in the coming months.

Here's Jim Jubak checking in with his take on the next financial crisis:

http://tinyurl.com/2apg3r

Have a great weekend all.