Transferred from previous discourse:

Good morning.

The ANALysts are either taking the day off or are busy selling their holdings, so there are no Cara 100 Ratings Changes to report.

Here are the Cara 100 stocks that are reporting earnings this week:

Tuesday:

Before the Bell : JNJ, SU

Wednesday:

Before the Bell : EXC, UTX
After the Close : QCOM

Thursday:

Before the Bell: NOK
After the Close: IBKR

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

Have fun in what should prove to be a most interesting week.

Good morning

"I hope I’m wrong, but I’m thinking that a large economic storm is building, and it’s aiming to hit hard in the weeks and months ahead," said Richard Russell, 83-year old author of the Dow Theory Letters.

To read about this (and a few other stories), please refer to my regular weekly article highlighting some thought-provoking news items and quotes from market commentators during the past week, and briefly reviewing the week’s market action on the basis of economic statistics and a performance chart.

Here is the link to the "Words from the Wise": http://tinyurl.com/3ywzwt

We're in for very tough times!

prieur,

Thanks. I really enjoy your site.

Regards

TSX is down 540 points now. BNN reporting speculation that Bank of China will have write downs on subprime and that Soros mentioned this is the worst market since WWII.

Some Canadian stocks:

NOT at 2.92
UUU at 6.09.
HBP up 7% (SP60 bear ETF)
OIL at 10.74
HGD up 9.7%

Quebecor World files for protection, stock down to 0.14.

SiO2,
You forgot my stock PNP.TO @ 2.86; down 12%. It was at 4.40 a couple of weeks ago. Big ewxposure to NOT and MGA. MGA has limited mining due to environmental issues with Austrailia that have not been worked out. At least it is in my retirement account so the fear is mitigated. Getting ready to turn on my BNN live stream; $7/month. It is nice to have when CNBC/Bloom is down.

Strategists at Morgan Stanley told clients on Monday to stay in cash.

"Our themes continue to be: patience, earnings recession, U.S. recession spreading global, bear market regime, don't be lured into value stocks as most are likely to be value traps, much more monetary easing. We expect flat but volatile markets just as in the 1989-92 period -- a real whipsaw environment for the market," they said.

http://tinyurl.com/27avmb

BillHunter.

How nice of the startegists at MS to tell their clients to stay in cash.

That way they can buy at these LOW levels run the market back up, then tell their clients everything is A OK...Then sell the shares they bought to thier clients at the higher levels

When everyone is screaming to stay in cash it is time to buy.....

Last Thursday's evening post at 10:47 p.m. about
"Tuesday could be setting up as the big drop" may come true. (key word is may)

Recall someone posting last week Don Coxe's thoughts that the things could be better by September after a recesionary period. That would be quick. Don't think that will include real estate IMO.

A quick lethal kill of the bull (can't remember Bill's Spanish word from the bullfighting ring) could spring some opportunities over the next few weeks or so. We'll see what the market gives us.

Si02 we'll have to keep our eye on the agriculture area as everything will get thrown out.

Heading back to Chi-town in a few hours through the lake effect snow which continues to fall.

Its amazing how slow a market moves up and then can go down so hard.

I'd be surprised the Fed isnt out tomorrow AM to stop a possible share crash and with pressure from Wall St, Corporations to cut, which will make things worse later on IMO

This ain’t 1929: a history lesson

Posted by Ben Bland on 21 Jan 2008 at 14:19

As a responsible financial journalist, at times like these I feel duty bound to put today’s market dip into its proper historical context.
In 1929, the Dow Jones Industrial Average collapsed from a high of nearly 400 to a low of around 40 in 1932. And it didn’t recover to the 400 level until about 1954, although adjusted for inflation, some say the real recovery wasn’t completed until 1960.
Please check out this graph. Among other things, it quite clearly demonstrates that markets do not move in a straight line. The tumble down to 40 points was punctuated by countless rallies.
In terms of more recent history, the Dow Jones Industrial Average plunged by 23pc on Black Monday, October 19, 1987. That was without doubt a crash – and to match that, the FTSE 100 would have to fall by around 1350 points.

http://tinyurl.com/2s3wwz

How about:

TIM at 10.20
UXG at 2.90
FNC 1.11
CNU at .19
WGI at 2.89

Following Bill's report, I am not touching any of those.

Seamus, I believe mentioned that Don Coxe interview with BNN. Thanks for the note on agri. I am not holding any at the moment.

POT down another 4%,
Agrium down 6.7%.
Sadia down 4.8% in Brazil
Perdigao down 6.8%

I'd really looking at the above two tomorrow. People won't stop eating.

Lots of good deals out there, just doesn't feel like buying anything, no reason really. I am very happy to have picked up FXP for my registered accounts last Friday, and several puts for my trading account. Too bad US markets are closed.

stockeshock, that could happen. However, I see this as good thing. The market needs it, can't keep putting fingers on the leaks.

Current Economist reports that Brazil's Embraer (ERJ) has now overtaken Bombardier to become the world’s largest supplier of regional jets.

In 2006, over 95% of its $3.8B sales were outside Brazil. ERJ combines low cost manufacturing with advanced R&D. Having a JV with China Aviation, they are AHEAD of Boeing and Airbus in transforming themselves from an exporter into a global producer.

With mkt. cap. At $5.5B, doesn’t ERJ have the potential of being a 10-bagger? If bought coming out of the next trough, a 20-bagger?

I think, after a global washout by perhaps 2012, high quality BRIC multinationals are the most likely big gainers over the ensuing 20 years.

They don't face competition from domestic startups (there's almost no venture capital there.) In BRIC's the big guy wins; he can grow from domestic dominance to global success.

I would not look at POT yet... it has split a couple of times in the last couple of years.. P/E is 43.60...

Fertilizer bubble maybe?

bg,

IMHO, the time to invest for the long term isn't here yet. I think we have another 20% or so to go on the downside.

Short term....who knows? I suspect that Helicopter Ben will be jawboning about something early tomorrow morning. We may even be blessed with another harangue from President Shrub.

The old Chinese proverb and curse, "May you live in interesting times", keeps echoing thru my pointed little head today.

Regards

jock, thanks for ERJ, down 4% in Brazil now. waves, agree too. I am only looking at SDA (-6%) and PDA (-8%). BullH, agree too!

BCE is down to $34. This is the company that is being bought out for $42.

Si02,

Do you think that there will be problems with the BCE buyout if bond or paper markets collapse?

Could be a good speculative buy if not... there are some serious penalties if the deal doesn't go through.

Imagine sitting on this stock for 30 years and someone else can grab a nice gain in less than 2 months... if it happens.

Tomorrow it should drop more as the US market opens... just a guess though. What do you think?

I'm kicking myself now for closing out most of my positions Friday. Thankfully I still have a position of FXP open but I lost out big time on further moves in SKF, SRS and QID.

Yikes! Good morning everyone.
Looks like I was optimistic thinking we would just gap down to 11800 on Tuesday. DJIA futures at 11620....holy capitulation absentium!

Tuesday is going to be very interesting.

Keep your wits and cash my friends. Man is my NOT.V killing me or what?

Oh great, DJIA futures now 11,586. yep, like 87'. Straight down.

Interesting blog

Recommended to me...

Looking through the history of the commentators - you are all for the most part - bears - or at least defensive traders.

So a couple questions.

1st off

Why is the market selling off?

Isn't it because the public has been told we are having a recession.

Did the market figure this out?

No, it is just reacting to what it was told.

IMO This is a setup plain and simple - to get your shares. It's a fear campaign

The only way the market can have an '87 type crash (where the market falls and stays down for many many months) is if we have an actual bank or major financial firm collapse - probably due to leverage/derivatives etc...

Otherwise this is just a coordinated take down of the markets and asset prices.

How low will this go?

Until the panic ends I guess

2nd question...
If we are going into a recession - why has the price of copper not been falling during the recent slide the past few weeks?

And what is showing relative strength (it's transports, retail) oddly enough

Charts show what has happened.

What's next?

3rd question:

Why isn't anyone buying?

Hi,

Several of my clients are freaking out.

Other are not freaking, but are facing margin calls.

Nice.

Soon, very soon it will be buying time.

Copper prices:

http://www.kitcometals.com/charts/copper_historical_large.html#1year

BCA Research calls:

http://www.bcaresearch.com/public/story.asp?pre=PRE-20080116.GIF

Yikes! The sell off overseas is intense.

One example of the ugliness of the situation -- EEM (the iShares MSCI Emerging Markets ETF) has been bouncing off long term support the past two trading sessions. Tomorrow it will gap down significantly and that trend line will become the resistance I'll use to measure the strength of any recovery.

The similarities to 1987 are uncanny -- all we need is Paulson to start bitching about Germany.

I'd rather sit on the sidelines and let everyone else fight this one out. The risk-reward on the downside looks pretty crappy. Everyone is expecting a bounce and when it comes it will likely be violent and wipe out most gains from shorts.

I've been struggling with figuring out who is left to sell. Right now my best guess is all the people expecting a bounce. I just don't know if they've already placed their bets.

The similarities to 1987 are uncanny -- all we need is Paulson to start bitching about Germany.

I'd rather sit on the sidelines and let everyone else fight this one out. The risk-reward on the downside looks pretty crappy. Everyone is expecting a bounce and when it comes it will likely be violent and wipe out most gains from shorts.

I've been struggling with figuring out who is left to sell. Right now my best guess is all the people expecting a bounce. I just don't know if they've already placed their bets.

activedollars,

If you're new here, I'd suggest reading thru Bill's WIRs and daily comments. This should give you a better understanding of what this place is all about.

If you find this site to be too much gloom and doom for your own market outlook, may I respectfully suggest that you might feel more comfortable hanging around here:

http://tinyurl.com/3c5hkq

Kudlow, would the REAL president please stand up!!!

I am currently stuck between accounts. E-trade won't wire the funds from my trading account to IB until tomorrow or Wednesday, and IB won't authorize trading until the next business day.

For some reason it seems now wasn't the best time to try to set over the electric fence to greener pastures.

Bull,
You're a Kudlow fan too? Goldie Locks is still alive!!!

Big ouch today! My best holdings are down 5%. Most of my holdings are down 11%+.

activedollars - Copper is falling now!

Copper is down over %4 in the futures market.

Bull Hunter/basketguy/moneygenie/and anyone else either short or in cash- congrats for being on the 'right side' going into Tuesday's open...

for the rest of us, Tuesday may be a challenge

few thoughts on how to play it (personally, i think the '24-hour heads up' helps- at least you have the chance to think things over):

1. take the (opening) hit. often viewed as an easy way out, but if looking at only a modest opening gap down, difficult to beat for ease/speed of execution. i am unfortunately 40% invested on the long side, but given, say, a 5-10% drop at the open i would not hesitate to take a 2-4% hit to the port for peace of mind.

2. buy. under the circumstances, hate to be caught ultra-long any sector (and it's not clear right now if the financials are relatively safer than any other)->currently have a position in UYG...may opt to add to it if it looks as if the death knell is being sounded for XLF...

3. hedge. would be inclined to hedge Japan/FXI with EEV (as opposed to UltraShort Japan/FXP), and to hedge the financials with QID/SDS/even DUG/SMN (as opposed to SKF), in an attempt to tweak a little extra performance from the hedge...

4. do nothing. not recommended, as there is nothing worse than being inactive during a period of volatility. in fact, would wager that taking an opening hit of 5% and going to cash will immediately put you in the catbird seat->with the volatility and opportunities to come, will not take long to make that up (not to mention the fun you'll be having)...

what's Tuesday morning going to look like?

a. worst-case scenario (if you're long)->more selling overseas, leading to Black Tuesday. a 25% opening drop would be about the worst i can imagine...but then i'd be buying.

b. positive open->can't be ruled out. recovery overseas +/- combination of monetary/fiscal policy decisions could do it. in which case, honestly, i'd be selling.

c. most likely, a 5-10% drop...which hopefully, for the defensively-positioned readers of this blog, will be highly manageable.

silver lining->major (trading/buying) opportunities straight ahead...

activedollars -

Copper is down big in the futures markets right now...down over %4.

As part of the preparation for Tuesday for US Traders:

1) We are still 20 hours away from the open
3) Pay attention to circuit breaker rules and the different times here:http://www.nasdaqtrader.com/trader/help/circuitbreaker.stm
4) Be clear whether what you are seeing on the screens and your internal bias is return of capital or return on capital, and act accordingly

in either case plan and try not to worry or celebrate in advance of reality...

Either way...good hunting!

Are there any ideas as to how the trading environment will look on Tuesday? Wednesday? Thursday? and Friday?

If the US market gaps down, does that mean that there won't be enough time first thing in the morning to buy DOW puts? Once the market has gapped down, what are the odds that it will trend down rather than trend flat?

I don't watch any TV -esp CNBC

All I know is there is a lot of fear.

And it is possible that a lot of this fear may be misplaced.

And I know that the best times to buy are when others are forced to sell (ie: margin calls, forced liquidations etc..) - this is when you get things cheap.

We are at some support on the TSX today around 12120 or so... including a channel you can run all the way back to 2003 - to me this is a chance to start scaling in small positions - holding all the rest in cash to see if the trades work or not - then adding if they do.

If these levels fail and the dam breaks then I will be buying into the panic around the 11300 level - probably tomorrow or through Wednesday.

TCK is at a 50% retrace down.
Also at a major trend line support.

TCK being a bellwhether will IMO be the key stock to watch for whether this recession talk is BS or not.

28'ish looks good to me.

If there is going to be a real recession (not one created by CNBC or Fedspeak to scare people) - then TCK is going lower

Of course if people panic anything can happen - - charts are not that useful in emotional times.

I am not a professional or that expereiced like the rest of you...

But again though I ask:

Why isn't anyone buying?

Is it because you are scared?

Is it because you are waiting?

Waiting for what?

Thanks

2nd - I'm hoping to do well on both sides long and short.

I have a very large position (80%) in an assortment of puts:

10 Feb Puts in : MON MA IWM SU AG ATI CHK TSO
4 Mar Puts in : SU COF IWM
2 Apr Puts in : MON MA
1 May Put in : STT

I think I mentioned StateStreet STT as a short candidate sometime last week. I also searched for the strongest stocks, as this market will take no prisoners. MasterCard is another I've mentioned as well. The Agri stock were popping too high in weeks past along with Oil.

I swore to not sell my puts after reading all of my respected blogs on Friday ....
Everyone was saying "bounce" on Friday, so I decided to add a hedge position (20%) , just in case ... and bought Feb calls on QLD ATM (sigh)

I will sell all my front month puts into opening weakness tomorrow morning and hold my QLD call options. As the market goes up, I will add to my remaining puts.

That's my strategy for the short term. It may change. I'm keeping my eyes on the tickers and looking for signs of some kind of bottom.

For the longer term, the 5,10,30,50,200 day mov. avg are downward sloping. Until I start to see the smaller mov. avg. crossing from below to above the higher mov. avgs. this market is staying down.

Active, why am not buying? Have you read the latest WIR to see Bill's opinion on where we are heading?

I am also looking at many good deals to enter, but not yet. We are not there yet. JMO.

I see some references to the 1987 Market drop here and elsewhere. I remember it well ... lots of blood in the streets, so to speak; BUT it really did NOT last for months. Here is a link to an SPX long term chart (I think it is a free chart so the link should work). The drop occurred just before the ‘88 marker on the chart. Relatively speaking, the market surged back very quickly. Is that comparable to now? I really don’t think so, bwdik.
http://tinyurl.com/2keu4d

Personally, I am in the camp that thinks there is a strong possibility that all Central Banks and Friends had a role in engineering these “bubbles in the bathtub” and the same CB&F probably have some role in engineering this drop/market correction in order to maximize profits on their shorts/puts/futures such as GS likes to brag about.

Last week, posters stated that the VIX just wasn’t high enough - will it be high enough tomorrow? Some said we need to see a real corrrection of the SPX before buying - here it is. Some said the $US is going to hell in a hand basket; so, doin’t buy stocks - now the $US is up nicely (for now). Some said Gold is too high and needs to retrace - see $US comment.

Hey gang - I’m not saying to jump in at the Open tomorrow, but I am saying to stay flexible in your thinking and watch for signals and confirmations for quick trades (ie 1-15 days). It just MIGHT be a setup (Cramer(“Judas Goat”?) moans, Fed moans, press releases moan –> leads to “feel good” about Cut).

Just thinking out loud, do your own diligence before taking any action.

EEMTRADER- thanks for the sunday evening post...will be taking a look at those books...

activedollars..welcome..

why is no one buying?.at times like this capital preservation first ..yes?

Bargains will still be there...when the panic selling abates..how long will that selling continue?...no idea..margin calls add to selling pressure...

you might want to wait for a large volume intraday reversal to buy..I went 1/3 long...they can feel my pain in spain.:)

"Why isn't anyone buying?"

I've been buying and have enough QID to choke an army.

"Is it because you are scared?"

Are you trying to play school yard games, insinuating that prudent investors are "chickens"?

"Is it because you are waiting?"

Yes, I'm waiting to go long.

"Waiting for what?"

For the Bear market to play out.

activedollars,

I am a novice when it comes to investing, but I have been watching and reading for some time and have a few ideas about why the markets are plunging right now.

First, the Yen carry trade is unwinding. If you look back over the last year or two, there seems to be a correlation between a strengthening Yen and market declines. This morning it looked like the Yen was starting to weaken a bit, but that didn't last. I would look for a shift in the Yen before expecting a market recovery. It is a "tell" for direction of money flow.

Second, Ambac was downgraded from AAA to AA with the possibility of further downgrades and the bond market indicating that it may go bankrupt. What that means is that all the banks (and pension funds) holding their bonds will have to announce new write downs - possibly billions and funds that must hold only AAA bond will have to sell at discounted prices. Other monoline insurers are likely to be downgraded along with their bonds, which would affect trillions of dollars worth of bonds. Realize that the bond market is bigger than the stock market. Not that all is doom and gloom; but these are big issues.

Why is there little buying? First, the American markets are closed. I don't sense a lot of fear on the board; we have been taught to sell into strength and many have fairly large cash positions right now. We are learning patience. Perhaps tomorrow will be a better day to buy. There is no harm in waiting to find out.

I'm glad to see 2nd is back in form.
Everyone will need to keep open communications here Tuesday.

Congratulations to those holding shorts!
I'm glad I kept my enthusuasm for a bounce in check with small bites. It will still cost me, but not fatal.
My biggest loss will be WGW, but I'm not inclined to sell it. I am open to admonishment/correction/advice on this point.

Otherwise it looks like 2nd's plan pretty much encompasses the available choice of appropriate responses.

Hi,

Why isn't anyone buying?

Re: A lot of people are buying. Otherwise the prices would have fallen to zero. There are just more sellers than buyers, for the time being.

Is it because you are scared?

Re: there is real fear in the market. That is why some people are buying.

Is it because you are waiting?

Re: on times like these, technical analysis studies are really worthless. As margin calls come up, babies go out the window with bathwater.
We are investors, not casino players.

Waiting for what?

Re: Clarity.

Cheers,

Bought FNC.V at 1.11 and VAL.V at .235.

activedollars, I'm sure everyone has their own criteria for judging when it is a good time to buy. On this forum, for example, Bill has exhaustively detailed how he uses the RSI-7 to evaluate when a stock is in a buy or sell zone.

Right now, it seems that every time we think the fear level has climaxed, it ratchets up a bit more. I'm not sure who it was, but someone opined here recently that he didn't think we were close to a near-term bottom because so many were looking for a rebound this week.

As for myself, goal #1 right now is capital preservation. You're damn right I'm scared. But more importantly, I have no confidence in the markets right now, and no interest in being a hero on either the long or short side.

But I disagree about the value of charts. They have been telling me for some time now that the mood is ugly. And I will look to them, not the CNBC or Bloomberg talking heads, to tell me when the selling has truly exhausted itself.

Thanks for all the input.

Everyone here has a lot of experience... and is very knowledgeable

What should one wait for in terms of clarity?

A Key Reversal?
A 9:1 up day?
An ABC reversal? ie: retest of a low

etc... etc...

Thanks,

Also it just seems a bit suspicious that European markets are down 5-7% on a US holiday

And when I see stories like "this will be the worst recession - even worse than 1990" etc..

This is laughable- the market is trying to discount in 3 weeks - a supposed terrible recession.

And then there is George Soros saying this is worst than WWII - this just smells funny to me.

They want you to sell..

When they want you to sell - it's never to your advantage IMO.

Of course I have not been not around long enough - so this type of extreme decline is a learning experience to me

How long do they usually hold things down to force margin calls? 2-3 days??

Fred; PNP.TO
Since this equity does not have to share their portfolio until late March for the Dec. 31, 2007 quarterly report, how does one determine the current price of the fund? The price is down based on the impression of the current listed positions of the portfolio. But maybe that portfolio has changed and the current price is not reflective of the new share purchase/liquidation. What do you think? I am in at $4 but I am willing to double down at some point since my position is only 2/3 filled. Even Boone Pickens is buying Uranium positions as stated in the most current interview.

wavesmash, Re, BCE. Every single analyst I have heard says the deal will go through. But yes, what if MER does not have money? Or, what if at some point it's better to pay the penalties than go through? BCE is likely not worth $42 at the moment, so what are the penalties for not going through? What if BCE is really worth $20. I don't know. I bought some. With a relatively stable market I'd buy more, not this market.

Larry Bermann was on BNN today and offered a couple of suggestions. The first one is to buy a pair of HGU (2x gold up) and HED (2x Energy down). if you look at the chart of HGU/HED you will see that the ratio is near the lows:

http://tinyurl.com/2ly5pt (stockcharts)

I think the point is that you will make money if either one moves more than the other, sort of like a straddle, but with less risk as there are is no premium decay. When can you lose money with this pair? When gold goes down and energy is stable or goes up, or when energy goes up and gold is stable or goes down. Unlikely.

I like the reasoning. Any opinions?

His second suggestion is a pair of HFU (2x financials up) and HXD (2x bear) once the ratio drops a a bit more, as above.

stktrader,
Sorry, I don't have an answer for you. I've looked at Pinetree, Longview and Dundee Precious Metals recently. I like PNP's portfolio best of the three by far but, don't own any of them. You could check Marketwire press releases for recent PNP acquisitions. That's the best advice that I can offer you. I'm getting slaughtered in all my holdings and am pretty much all in. Is that why you're asking me ...for a contrarian trade (LOL).

Fred,
You seem to be the most knowledgeable in terms of buying and selling the small explorers/miners out of Canada. I do get the current new buys from Pinetree but I do not think that they have to disclose their sells. It will be interesting to see the portfolio in March for the last quarter. I wonder if they have been selling Mega due to the environmental problems that they are having.

There would have to be strong demand in bullion despite the selloff, since gold prices have been in and out of backwardation all day so far, and the gold basis remains very tight, within $1-$3. Central bank selling in the European market probably to continue for the time being, and gold leasing/shorting practise as it has a long standing tradition to continue in NY markets.

Bullion prices should retain their monetary status as base metals continue to come under pressure. Crude can decline to $84/bbl. and still be at the 34-week EMA before a possible bounce.

Moreover, the consensus overall is one of increasingly short-term thinking, since we are seeing a yield curve inversion of the short term treasuries over the medium term treasuries.

re: searching the archives.

Does anyone know how to sort the search results by date?

Active Dollars states: "Also it just seems a bit suspicious that European markets are down 5-7% on a US holiday" Nothing suspicious about it. BB gave a very poor performance last week, and the incentive package fell flat. Further, the world markets are now fearful that they are not decoupled from the US. It's the market voting with it's dollars. Everyone's risk tolerance and time horizon are different. Some will see this as a buying opportunity; others will see this as a time to wait patiently for a better risk/reward payoff relative to their circumstances. There are many different successful investment styles. Your certitude regarding the motives of "they" is a bit at odd with your professing to have little knowledge about the markets and the events leading up to our current period. Many of the financial stocks have been cut in half. So a decline of 10-15% in some of the world indices indicates to me that it could go further.

With the amount of leverage in the financial system (10:1 loan to capital ratios), there is some sorting out of who is still solvent and who is not. IMV, in light of what we know to be true regarding this derivative mess (think of it as the equivalent of a computer virus--it's a financial instrument virus infecting all who touch it!), what is suspicious is not the decline in the markets (in fact the DOW is not even down enough to officially qualify as a bear--but darn close) but rather the absent of news on the following:

~Hedge fund blow ups--yeah we heard about the public ones, but don't you find it odd that we've not heard about more. For those of you who were brave enough to follow with me the dissecting of Hedge Funds and Systemic Risk last Spring, we know that fixed income arbitrage is among the riskiest of HF strategies. Lots of folks were in this--so where are the dead bodies besides the handful of floaters outside of the rotting carcasses of BSC's and HSBC's hedge funds that have already surfaced?

~Pension and public funds--the investment banks hawked these fee-rich instruments to pension funds and most likely municipalities. Outside of the Florida news, why have we not heard more from other quarters?

FWIW, I think that watching the recovery in the financial sectors is key AFTER the reflexive bounce they will experience from being in a grossly oversold state and responding to a rate cut.

But I surely do not pretend to know.

2nd,

I should have all musical lessons prepared for the week by the time the opening bell rings tomorrow morning.

Whichever one of your scenarios plays out, I'll be able to devote all my time and energy into making money.

I'm glad I don't have to go thru tomorrow alone. The world's sharpest investors are at my side here.

Regards

One chart of particular concern is the €/$ trade, which has continued in one long unbroken streak since summer '05. For the most part, it has reached its upside target in full. It can correct at this point, but has tested its upside target twice in the last quarter:

Stockcharts.com $XEU:$USD

http://tinyurl.com/2tnqcn

The ¥/$ is in a similar condition, with a massive upside target still waiting:

Stockcharts.com $XJY:$USD

http://tinyurl.com/2q8c3x

BH- as long as you won't be playing Ride of the Valkyries, and no quotes about the smell of napalm in the morning..;)

Zenob;

I closed out SKF and QID positions last week myself. Enjoyed the ride for months.
I've stopped the self-flagellation about not holding further and am ready for what comes Tuesday and beyond.
I am grateful for Bill's WIR and the gifts of the entire Cara community. Without them, I'd still be long 90% and freaking out like some of maromatics' clients!

I checked my ego at the door awhile ago, but damn I feel good about my portolio today.

Stu

Well, I am buying some today. Got filled on 3 Canadian Small Caps that I've been waiting on for several months. They are cheap now, so it's worth a shot. Not committing all my capital, but you know that you're not going to pick the bottom day and buy all your stocks on that day. Also, the market will likely bounce back hard when it does, so you'll be stuck trying to decide whether to buy a stock which is already up 15% or trying to wait for it to come back down (which it often never does). At some point, you have to start buying and I think a day like this is not a bad place.

Take a look at Western Goldfields (WGI) that Bill has talked about in the past. It is down from $4.00 to $2.91 and is the same price as when gold was $700. Even if gold tanks, there's not much downside and the value of the company is still in the $6 to $8 range as they move into full production (assuming no financial armageddon)

Leisa, I like your idea about watching the Financials... and I looked back through some of your previous posts - and you seemed to be suggesting back then that what is happening now was going to transpire - so you were spot on.

So how low do you think Citi will go?

It was down 7% in Europe trading at one point today.

Looking at a long term chart - kinda looks like 22 or so... that's near what I was expecting.

Next followed by 18 if all heck breaks loose...

I don't understand all the SIV derivative stuff... guess I'm a simpleton...

The market expects 200billion in losses - but are these losses going to be worse because of the leverage???

Looking back, the DOW dropped 22% when the losses from the Asian contagion became known.

Today's equivalent would be around DOW 11071 - oddly enough this would be at the peak in 2005 - of the 1st DOW wave up from 2003..

KP84,

This is true. Everyone else at the office where I work is crying over how badly hit their portfolios are and I'm walking around the building complaining that I sold early and cheated myself of several grand.

If I had not found this site I would be one of the ones crying over a savaged account instead of just complaining about not making enough. I should keep that in perspective.

Thanks Bill! :-)

2nd,

Ron already picked out my theme song for tomorrow:

http://tinyurl.com/2rz3zf

:^)

MBIA and AMBAC

Looks like Ambac and MBIA are headed to bankrupty. Most states have substantial fiscal problems without this development. Perhaps the Federal government will step up and create a muni bond guarantee corp. to protect the credit quality of state bonds.... something similar to FDIC. There also was a rumor that Buffet may do something to aid the muni bond market via his reinsurance company. The powers that be better act fast or more asset destruction ahead as well as increasing the level of fear.

ALOHA !!

I have to comment on these comparisons to past stock crashes in terms of "degree". I believe these comparisons are only good to compare fundamentals not prices. Would you expect a 1950 Mercedes to be the same as a 2008 Mercedes? No, because technology and numbers produced(participants)have changed drastically! Today you can move a million shares in one mouse click. Today we have market participants all over the globe even in Communist countries. Today "futures" and "derivatives" exist which were not known or little traded in the past. Today we talk in trillions not millions in terms of debt and margin. Today governments and central banks intervene more frequently and on larger scales.

I believe "confidence" is being killed off in both global stock markets and currencies. I believe Westerners(First World) will experience a severe monetary crisis for the first time since the 1920s. It will be more severe simply because there are more people and participants whose incomes and retirements will be effected. Wall Street bankers and government have arranged for this. Safety nets will be few so, Live by the sword ... Die by the sword.

I would suggest this to read ...
http://tinyurl.com/2sdcbh

I read and follow the Mises Institute and simply put most leaders and economists are misinformed because they were educated without freedom of thought. They were educated with blinders on ... That is how I was educated until I got out of school. In reality schooling in the uSA(as well as other coutries)has severe limitations and creates complacent followers by design. A "matrix" does exist. If you do not believe me then try to talk Mises principals to Bernanke. Try to get the Average Joe to vote for Ron Paul. Try to get your friends or relatives to buy gold. A wall exists by design ... It is a barrier to the truth ... If the "real truth" were accepted then banks would not own us and paper money and government's irredeemable promises would be like the plague.

Zenob- excellent point...a one-day hit (to those of us who turned [inexplicably ;)] long last friday) should not cause anyone to veer off the road, simply one of the hazards of driving...it's only if/when you decide to take your hands off the wheel that you are at risk of something worse...what would a long drive be without detours and blind curves->some of the most memorable trading experiences occur trying to get yourself out of a jam...

BH- then i guess this will be mine:

http://tinyurl.com/2pa858

ALOHA !!

Leisa ... I totally agree that we have been seeing the tip of the iceberg in terms of dead bodies. Way back in July 2007 one of the first hints hit the junior miners which I did mention. I asked how it was a small company like RedCordp could lose some $20mil due to ABCP problems with their parked cash and the big guys like MSFT and GE and IBM who also have "parked" cash report nothing? How was it junior miners are the only ones who suffered so far? Remember when junior miners and producers were putting out special news releases to assure shareholders that their cash was secure(some reported losses)? Nothing like that ever emminated from Fortune 500 companies who are using the exact same banks. I guess financial viruses are selective ...

left out the music:

http://tinyurl.com/3xuvsn

man, weren't those the days, when none of us knew what the DJIA was?

(link to circuit breaker rules courtesy of EEMTRADER)

87 was different in some ways,

dow had run 60% in the past yr(although it has had 4 good yrs recently), xau had run from 60 to 155 and the xau:gold ratio was at .34 with 500gold(today it is only .20 with 866gold)

The devastation in the jr gold stocks is really something else.

Barron's says investors too pessimistic over
MBIA. They mention Warburg Pincus provided
a recent capital injection would be an interested buyer.....they speculated it is worth
$30-40 share 4-5x current stock value.

Here's the article at seeking alpha

http://tinyurl.com/2gzjtv

Man, how smart is Warren Buffet. Opens his own bond insurance business and now that AMBAC FINL GRP and its ilk are going down, he takes all their business!

Man, how smart is Warren Buffet. Opens his own bond insurance business and now that AMBAC FINL GRP and its ilk are going down, he takes all their business!

re MBIA- don't follow the company, but have great respect for Marty Whitman and TAVFX...not saying Whitman is right every time, but if he's buying, would be hard to bet against his record...

Anyone selling HGD into tomorrow?

Seems like it has been pretty flat after the morning pop, but is it going to get stronger when the big board wakes up, or was the selling absorbed by the world's markets over the weekend and today?

Back to world politics... everyone seems to be lightening up?

Israel relaxes blockade.
Russia offers Britain way out of culture row.
Taiwan's KMT to seek closer China ties only after presidential vote
Scotland mulls US pressure over haggis ban
Chavez is on crack. (had to put this one in) :)

Chavez admits chewing coca 'every day in the morning'
http://tinyurl.com/2k4fy9

I have cocoa in my cereal every once and awhile.

What a day.

Bernanke definitely not taking the day off (at least, I would not be were I in his shoes). He will be expected to follow through on the words of his 1/17 testimony:

"Financial and economic conditions can change quickly. Consequently, the FOMC must remain exceptionally alert and flexible, prepared to act in a decisive and timely manner and, in particular, to counter any adverse dynamics that might threaten economic or financial stability."

So 'consequently,' he is at work today prepared to counter the odds of a steep drop tuesday. Being 'at work' includes conversations with bankers across the globe, which immediately renders the conversations 'not private.' Futures and/or the foreign markets should provide a 'tell' on what (or whether anything) is being proposed. Timing- anytime after market open and you risk the wrath of all stock-holders placing market orders ahead of the bell->of course, since the majority of stock-holders own them in funds they can't sell till EOD, it won't matter ;)...but I would still opt for some type of pre-market announcement->although, it would probably be between 830 and 915am EDT, as I wouldn't want to impair bargain purchasing by friends and family...

all JMO, and having fun (18 hours) ahead of the bell...

Does the following have any merit?

Investors are holding much less put protection in their portfolios than they were on Friday - and could this fact alone send the markets lower?

Friday January 18th was an expirations day in the options market and consequently, January options aren’t available anymore – they’ve expired.

For whatever reason, traders haven’t purchased nearly as many “puts” (a bet a stock will move lower) or “calls” (a bet a stock will move higher) for February, March or the outlying months.

What concerns me is the lack of “put” buying because if there are now fewer “puts” on the downside – protection isn't as prevalent.

That could mean we're set up for the perfect storm Tuesday, according to Najarian. "With less put protection, negative news could spark fear more easily and send stocks down fast and sharply,” he concludes.

wavesmah- how high did HGD pop this morning (no positions, but curious)?

wavesmash- how high did HGD pop this morning (no positions, but curious)?

''I chew coca every day in the morning ... and look how I am,'' Chavez said, according to the paper.

if he's referring to the photo that accompanies the quote, we would all look that way after ingesting the same substance...

Popped to $12. Sat around $11.60-$11.75 for most of the day. Currently $11.74

I am trying to figure out if a trailing stop will be hit on a gap down tomorrow for Circuit City...

""It's an absolute rout," said Tim Hughes, head of sales trading at IG Financial Markets in London. "This is just a complete capitulation of the last remnants of any confidence in 2008. This reinforces the firm end of the bull market." "

and this reinforces the firm beginning of the bear market I guess.

http://tinyurl.com/2wvey3

I'm looking at Brunswick tomorrow... buy alert raised by RSI app. Should put in a stink bid at $13. 4% yield?

I find I do best with stocks I buy around the last week and a half of the month and sell in the first 10 days of the month.

Tomorrow's a full moon if anyone's superstitious... and don't go buying a GPS just yet.

"The beginning of Solar Cycle 24 is finally here and that has implications for all of us. For example, anyone who uses a cell phone, GPS receiver, or satellite television may encounter more frequent reception problems, especially as the solar cycle matures."

http://tinyurl.com/38sj27

Time to get out the rabbit ears & compass. (Actually, sounds like a lot of hoopla to me, though it's really cold here today.)

Re: Chavez

No wonder he thinks Bush resembles a donkey.

I believe the FED will cave with a 75-100bp cut, then to "monitor markets" with tightening bias"
something along those lines.

You think they'll let the market crash with the NYGiants in the SuperBowl!!?

No . way.

;-)

Since there isn't any trading today I thought I would post a macroeconomic comment:

Bottom Line: The greatest Credit Bubble in the history of the world -- the one that drove the tech mania of the 90's and then the housing mania of 2000 -- finally popped in August of 2007. This credit bubble was/is so extreme it is hard to describe other than one ratio -- Credit Market Debt to GDP of 340% (Great Depression was 280%). This will push the US and probably the world economies into a reccession in 2008 and probably a Depression by 2010. I would repectfuly disagree with Bill's comment today that this is a "normal bear market" and not "financial armageddon". I believe the situation to be much more dire.

We may be able to delay the outcome through more of the same behavior of extreme credit creation or money prining, but the final collapse has started. As one who believes in the Austrian school of economics lead by Ludwig von Mises the quote that sums it up is the following.

"There is no means of avoiding the final collapse of a boom brought about by credit (debt) expansion. The alternative is only whether the crisis should come sooner as the result of a voluntary abandonment of further credit (debt) expansion, or later as a final and total catastrophe of the currency system involved."
- Ludwig von Mises

"Scotland mulls US pressure over haggis ban"

No wonder the markets tanked today. Another food crisis. Aye?

Define "normal bear market" and "financial armageddon"?

And what do we do to protect assets in either case? Anyone sitting down at the casino tables tomorrow?

China has enough USD to promote financial armageddon and have the US chasing its tail for years... unless we adopt the Amero or something.

Ron Paul has a way out though...

"Paul's plan has become known as the "let's get the hell out of Iraq and spend the billions in the US instead" plan. The Plan has a fairly simple central theme which senior economists have summarized as being strikingly similar to the "let's get the hell out of Vietnam and spend the billions in the US instead" plan that was unsuccessfully floated in the 1960's. "

http://tinyurl.com/38pwa5

CM- if those are the only two options, then you may be right, as under the current administration->any bad thing that can be, will be delayed...for an economist, bernanke seems reluctant to embrace the cyclical nature of markets...why not come out and say that it's normal for markets to go down, and for recessions to occur->that would have a calming effect beyond that of any rate cut, IMO...

ChicagoMark: You mean I have to pay the cards back or go bankrupt? No, say it isn't so.

CM- if those are the only two options, then you may be right, as under the current administration->any bad thing that can be, will be delayed...for an economist, bernanke seems reluctant to embrace the cyclical nature of markets...why not come out and say that it's normal for markets to go down, and for recessions to occur->that would have a calming effect beyond that of any rate cut, IMO...

"In rejecting the Paul Plan, the other Republican and Democrat candidates all offered alternative plans which are rather complicated to explain but can be basically be described as a "Let's give the taxpayers a few dollars to spend in "The Home Depot" buying Chinese made goods" plan. The amount of money varies by candidate but either way the Chinese are pretty happy about it. "

I just got 14 months no interest on my BBQ at HD... is that a good deal?

"In rejecting the Paul Plan, the other Republican and Democrat candidates all offered alternative plans which are rather complicated to explain but can be basically be described as a "Let's give the taxpayers a few dollars to spend in "The Home Depot" buying Chinese made goods" plan. The amount of money varies by candidate but either way the Chinese are pretty happy about it. "

I just got 14 months no interest on my BBQ at HD... is that a good deal?

2nd,
Loved the "Stones" video. Even my wife sat through it. That's a first.

wavesmash- to the extent international politics can be managed like household politics, i see no problem with ron paul's plan...if any of us had a personal financial crisis brewing, would we hesitate to divert funds?

Petrobras announced today the discovery of another large deep gas field, off the coast of Rio. The hydrocarbon-bearing rock is more than 120 meters thick, 5km deep, and the dimensions may be similar to that of the giant Tupi discovery last year.

Activedollars: I couldn't hazard a guess on C's stock price final destination.

stktrader- have to love the instant access these days:

three from my favorite canadian artist:

http://tinyurl.com/2hbh4x

http://tinyurl.com/2amacr

http://tinyurl.com/3764gf

still have (well-worn) LPs of Gold Rush and Harvest...Neil Young now lives about 20 miles away in a (well-hidden) ranch->we all have to keep in mind the balance between money (which makes many things possible) and living life (which goes well beyond making money)...

before we return to investing- have been looking for an mp3/digital version of Marie Cain's Modern Day Magic (1976)...lots of play in SE Michigan in 1976...

Free at last, free at last! Scaled out of my last put options on XIU.TO this morning. Have been scaling in and out, never entirely out since August.

Wavesmash: Scaled out of 1/4 position in HGD.TO last week, took 1/4 off at opening this morning (caught the 12.00 high of the day). I bought it as a partial hedge against PM juniors that I hold, so will scale out of the remaining half if gold miner share prices continue to drop.

Bull Hunter: The BTO clip really takes me back. I was 20 years old in 1970, living in Winnipeg when the Guess Who were becoming big time.

2nd Ave: Rolling Stones evoke similar memories, keg parties in North Dakota in late 60s for friends and acquaintances being drafted.

Good stuff on an otherwise stressful day.

craig- (off-topic) sandy denny version of 'time:'

http://tinyurl.com/3asooq

Thanks for all the great tunes. Attached is my contribution, a video clip from the movie (The Magic Christian) featuring a song (Something in the Air by Thunderclap Newman). http://tinyurl.com/ypn22u

SiO2,
How much more bang can there be for PBR with another find that they are not sure they can get at at a profitable sales price/barrel?

Looks like all the foreign markets heard about the stimulus/welfare package this administration is supposed to dribble back to the tax payers in the US.
Problem is.....this market is going to continue to drop until this country forgets about hiring Bush's "guest workers" and creates jobs for the American people first. There's been far to many lay offs to have any type of productive economy.

Looks like TAPS will be playing over the stock market tomorrow. SO SAD!

The internet is really slow today...

Everyone checking their stock prices??

I began putting "active dollars" to use today.

Of 100 posts - maybe 2 want to buy - the rest selling, shorting, waiting...

Often the next leg of a bull move starts just when everyone is expecting a recession.

And timing these legs is near impossible IMO - despite what the chart/astrologers say...

After all - many were calling for a bear or crash since since 2006 - and they were right - BUT THERE TIMING WAS WRONG.

No everyone will try to call a recession or call a bottom.

I don't know anything about bottoms or tops.

All I know is that stable blue chip companies with growing earnings are now 20-40% lower than they were last summer...

I don't care what the charts say, or what CNBC says or what the AAII survey says or the P/C ratios...

To me it makes sense to start buying...now

stktrader, I have no position in PBR but would like to have once it gets in the AZ. That is what I am pointing out. They will be exporting light oil in a couple of years. Last I heard the cost was cheaper than oil sands, which I think it's profitable at over $40-50b. PBR has developed the know-how for deep well extraction in-house.

Also importantly is they will cut their dependency on Evo. In light of what is going on there, that is just more good news.

Why wouldnt the FED come up at 8am WITH 75, 50 is already baked in the cake, shorts are piling on, fear and loathing in the air, State of the Union for the Bush crime syndicate on Monday :-)
I dont see why people arent expecting the 75 or even 100?

Otherwise we get a massive bust IMO with 45 trillion in derivatives

/

watch this video of a trader losing it

[alot of swearing -- >warning]

http://www.youtube.com/watch?v=rCtQL5b_rCM

Quite honestly, if someone is expecting a bust in 45 trillion of derivatives - then everything is going down - stocks, bonds, gold, your house price, your job, your way of life... everything as we know it - toast.

This isn't a game.

It's the whole financial system.

Either it continues to evolve or it dies.

There is a lot of fear and irrationality at work now - I hope we can all make the right decisions this week - this week could offer the biggest trades for the year - either way - maybe the biggest trades of the decade.

Good luck/trading to all.

watch this video of a trader losing it

[alot of swearing -- >warning]

http://www.youtube.com/watch?v=rCtQL5b_rCM

AD,
Since you are new to this board we are interested in your agenda. You say you are actively buying so Bill responded as to your purchase prices on the equities that you are scaling into so that it can be tracted. It would be interesting just for fun.

AORD and N225 have some catching up to do...continuing drops in SSE and HSI should exert a greater (perhaps more telling) influence on US futures..

ben? must have at least an inkling of what he plans to say tomorrow (can you be the fed chairman and remain silent)...

Look back at the action in October of 87. It was a great buying oportunity. how will we know if a big drop will signal a buying oportunity. The dow droped from about 2246 to about 1738 with large volume. By December of 87 it had started up after bouncing on the bottom for a little over a month. I do not even know with the circut breakers, if we could have a 25% drop.

The drop in 87 was definetly a long term buying opportunity.

Any ideas of how invest with minimum risk?

Thanks.

Is it the feds job to control the perceptions of WallStreet? I don't think that Ben will lower rates until the meeting because he is suppose to reflect on the state of the economy. Although with the timing of the State of the Union address, the arm twisting might be to much. Bush and congress does not want to be seen in a bad light; on TV.

NIKKEI at 12,600
What a buy IMO, I like Japan better than the US long term.

eemtrader,

You and someone else mentioned the activation of the 'circuit breakers', i.e."trading halts". In light of the huge gaps down overseas for two consecutive mornings, I want to post them for all to digest.

As per NYSE website, here's their First Quarter 2008 protocol and explanation of Rule 80B (which NASDAQ and AMEX will follow):

"Rule 80B
Effective April 15, 1998 the SEC approved amendments to Rule 80B (Trading Halts Due to Extraordinary Market Volatility) which revised the halt provisions and the circuit-breaker levels.
The trigger levels for a market-wide trading halt were set at 10%, 20% and 30% of the DJIA, calculated at the beginning of each calendar quarter, using the average closing value of the DJIA for the prior month, thereby establishing specific point values for the quarter. Each trigger value is rounded to the nearest 50 points.

CIRCUIT-BREAKER LEVELS
FOR FIRST-QUARTER 2008

In the event of a 1350-POINT decline in the DJIA (10 percent):

Before 2 p.m.
1-HOUR HALT
2-2:30 p.m.
30-MIN. HALT
After 2:30 p.m.
NO HALT

In the event of a 2700-POINT decline in the DJIA (20 percent):

Before 1 p.m.
2-HOUR HALT

1-2 p.m.
1-HOUR HALT

After 2 p.m.
MARKET CLOSES

In the event of a 4000-POINT decline in the DJIA (30 percent), regardless of the time, MARKET CLOSES for the day.

NYSE Circuit Breakers
In response to the market breaks in October 1987 and October 1989 the New York Stock Exchange instituted circuit breakers to reduce volatility and promote investor confidence. By implementing a pause in trading, investors are given time to assimilate incoming information and the ability to make informed choices during periods of high market volatility."

Good trading to all,
Stu

P.S. You posted a 'template for trading' yesterday; that was awesome. I value things like that.

Is it the feds job to control the perceptions of WallStreet? I don't think that Ben will lower rates until the meeting because he is suppose to reflect on the state of the economy. Although with the timing of the State of the Union address, the arm twisting might be to much. Bush and congress does not want to be seen in a bad light; on TV.

kp84/stu....thanks...that template was for homework..for trading..well it may not work tommorow though.

:).so use with caution.

Bill

I'm not a pro trader like many of you - I'm just learning...

I haven't been through a crash like many of you - so maybe I'm green in that regards...

In any case - looking at the TSX and Canadian stocks:

I see today at 12100 and 11400-11500 as the levels for buying for this current decline.

I will buy something in each of the main sectors

(1)Mining - TCK
Scaled in the 1st bit today - will wait until either a bottom is confirmed or we crash lower - and move the rest in then

(2) Finance - Haven't touched those yet - weakest sector - waiting to see if the TSX Financial Index can hold above its Jul '06 low

If not won't buy until either
(a) C crashes or
(b) interest rate cuts and market stabilizes

(2) Cdn Real Estate - 2nd weakest sector.
Has retraced 50% - looking at buying REITS REI.UN HR.UN - scaled in small amount of REI.UN today. Awaiting for rest - like to see yields go over 7.5%

(3) Golds - No idea

(4) Energy - ECA/CNQ - Scaled in small amount today - wait for rest to see if Oil holds $85

Keeping some short Hedge (HXD) open in case Oil and Gold continue drop.

(5) Tech - will buy QLD tomorrow on a crash or interest rate cut - RIM overpriced relative to US tech names - prefer to see RIM at 73 at least

(6) Cyclical - NCX - scaled in today some

(7) Telecom - SJR.B - maybe 17 if market drops tomorrow - stopped out on it today...

What I have learned from the commentators today - is that during a decline - it is best to preserve capital - so that you have it available when stocks are presented as gifts to us...

It's interesting studying the human emotion factor. I made a lot of money in the past 3 weeks. More than enough to make my year. But now that I'm stuck unable to trade(and my my 2009 year too), I find it nearly impossible to breathe deep and enjoy the 'break'. I know there will be millions of people financially hurting in the next 24 hours, few days, weeks, etc. And I find myself having a hard time not reading, or studying, or developing possible trades for different market reactions.

Is this feeling greed? Is it a gamblers addiction? Is it that I see a great opportunity with wonderful risk/reward ratio? Is the feeling positive? Negative? Should the feeling be harnessed? or controlled?

So many thoughts and questions, while I wait another 36 hours for the brokerage transfer to finish.

Words from the wise

Posted On: Monday, January 21, 2008, 2:32:00 PM EST

Emergency Action Required Immediately To Prevent Public From Joining The Panic Tomorrow

Author: Jim Sinclair

Dear CIGAs,

This is it.

The DJII futures are down over 500 points.

If the Federal Reserve fails to take emergency action before the US opening tomorrow, you will see the DJII open down 1000 points as the public joins this professional panic.

Everything you see happening is contained in the Formula, which will be the catalyst that takes gold again above $887.50 and to $1650.

As long as you have followed my plea to have NO MARGIN on anything gold I see no problems.

If you have margin the rule is never meet a margin call, but sell whatever is needed to meet the call or more, never less.

It is a better wager that the Fed will immediately drop rates by 1 full percentage point.

It is a slam dunk that all Western central banks will cut loose and flood the world with more liquidity than ever seen before.

If central banks fail to cause a torrent of liquidity from their unending check books then $450 trillion of derivatives will take us to the world of Mad Max.

Monetary inflation ALWAYS causes PRICE inflation even without strong business conditions.

Prices of hard and transportable assets rise regardless of business conditions.

All currencies fall and the stronger currency is the laggard in the race to the bottom of the tank.

SiO2,
I agree PBR will be a buy at accumulation zone. That would be a "gift".

This article is singing my tune:

Globe & Mail on Gold prices drop

"It was an unpleasant day for the euro against the dollar and yen and that filtered through into gold. We've swung from being wildly bearish on the dollar and now the focus has shifted to the euro,” Mitsubishi analyst Tom Kendall said."

http://tinyurl.com/2pvcgt

Quentusrex: don't let Etrade stonewall you on that transfer. They tried that one on me when I closed out my savings account there - said they couldn't do it because it was a three-day weekend, or some excuse of that nature. I kept calling back until I found someone who would do it for me right then. Just my experience, but you might try calling back, and not taking no for an answer, until you find someone who will say yes.

Jim Sinclair nailed this event from last week...go http://www.jsmineset.com/ and take a look at his blog.

stockershock- great video (and who can say they can't identify with it)...

will also take this opportunity to remind anyone who might be facing a serious hit tomorrow that you should take steps to minimize the emotional impact...at the very least, do not trade until you have emotions under control (don't compound your dilemma)...and if things get really bad, take the time to gain perspective (only you know what works for you)...there will probably be only a million or two other traders worse off ;)

Argh... missed that last 15 minute dump of KRY. Somebody must have been playing chicken and decided to bail before it gets double-dumped in the US tomorrow.

I hope Rodolfo Sanz, the new mining minister of Venezuela, likes his cocao for breakfast.

Are the speculative dollars out of the market yet? If I'm reading BCE's chart, it looks like it's nearing some support, or else we have another 25% to go? I hope I'm not reading that right.

I guess when KRY goes to $0 we have speculative dollars out.

Any chartists want to tell me what they see with these top 10 of the TSX?

SU
http://tinyurl.com/33cxmb

MFC
http://tinyurl.com/3a8w5p

RY
http://tinyurl.com/2l95ht

RIMM
http://tinyurl.com/2o7o5l

ECA
http://tinyurl.com/34uwqk

TD
http://tinyurl.com/388djw

BNS
http://tinyurl.com/33cupa

POT
http://tinyurl.com/3czll8

CNR
http://tinyurl.com/2kc2zt

ABX
http://tinyurl.com/3dm48y

Some of them look like they are skydiving.... others have more potential... maybe CNR? They report tomorrow afternoon.

Appropriate quote for today... and maybe tomorrow.

"I am the Nightrider. I'm a fuel injected suicide machine. I am the rocker, I am the roller, I am the out-of-controller! "

Anybody remember Bartertown?

China to set-up largest pig breeding farm
http://tinyurl.com/3bvjlu

stockershock, 2nd - I've painfully been there.

There was a time I was down over 62% of my total trading capital.

But you learn. This site is a life saver.

Dr. Brett has the following advice for traders...
http://tinyurl.com/34bkdx

HSI takes a nosedive at the open (which can be a good thing if it gets bought)...US futures showing (modest) signs of improvement...ben most likely will have the pieces in place by now->can't present w/o a good night's sleep...

Interesting trivia... George Miller wrote Max Max 1,2, & 3 and...

Happy Feet & Babe.

"Move along there, ya... big buttheads! "

Well, I'm off to watch Cramer's head explode some more.

does anyone have an opening (US) target at which they would be prompted to buy? can selling into a 500-1000 point gap down be a 'smart' move, and if not, does it (necessarily) mean (at least partial) buys will be (ultimately) rewarded?

maybe i should rephrase the question->at what downside target do all of you QID holders plan to clear the table?

Louise Yamada, managing director of Louise Yamada Technical Research Advisors LLC on Bloomberg:

States we are in a structual Bear market that started in 2000. Compares the 2000-2007 market to a prior period ( 1932-1937 ) and is not like the 1966-1982 Bear market. States this is the initial breakdown and that "there is no bottom" that she can see.

http://tinyurl.com/2eryx7

2nd, I doubt we get that low tomorrow if the FED comes out with the emergency cut as may be needed for a psychology speed bump, but we may get there later on..

The way I see it, the FED laid off earlier to let the market fall, they could easily have cut 50bp 2 weeks ago, but now that oil and gold are off highs, they can actually do the dirty deed with less "inflation" fanfare and surprise with 75bp to buy more time since they are going 75 -100 total more for this round of easing.

IMHO.

stockershock- agreed...but you want to be prepared for all scenarios...

my friends,

Did anyone hear a guy in London say on Bloomberg Asia, say that hedge funds are shorting stocks so they can buy them lower??

it's still early, of course, but my take (were i to find myself pulling the strings)->back up the truck in Japan/HK, continue to add (to the balance of emerging markets/europe) as futures improve->allow DJIA futures to drift up to, say, minus 250...then spring whatever 'surprise' i wish to announce, which should then actually take the futures positive...

Keep in mind that the DOW is still sitting at stratospheric highs over 12,000. I remember 10,000 was too high, that wasn't long ago, this is still just one giant bubble, and with massive problems. I agree with Bill's call on the WIR.

I am not sure why Mr. Sinclair thinks that 100bp cut will make a difference to his doomsday scenario of Trillions going down. You'd think that cutting rates won't make much difference to the underlying problem. If rates drop to zero we'd have another giant problem. But what do I know, right now I am only planning on sitting tight or buying more puts, if anything at all.

btw, the only reason i bother to hazard wild guesses as to what may be transpiring behind the scenes is that i remain convinced (after a lifetime of wide-ranging experiences) that what transpires anywhere is no more nor less intelligent than what transpires here...the people running the country are basically the same people we grew up/went to school with, right->and i don't recall reading about any epiphanies that would set them apart (unless you're talking about the epiphany of corruption)...;)

Hi, if you have some time, you might want to view this six part series on Self Organizing Criticality, especially #4:

http://www.youtube.com/watch?v=itFwQM96nYY

(Its a bit mathematical/physical)

Sorry, I forgot to mention Self Organizing Criticality is in six parts.

Sorry, I forgot to mention that there are six parts to Self Organizing Criticality.

The carnage continues:

http://tinyurl.com/2tacxu

KRY-babies,

as wavesmash suggests, the stock sits at 2.44 in the US and 1.88 in Canada! What a difference a day makes! I feel your pain ....

I'm living by my 5 min/one day index charts tomorrow (DJIA/$comp/S&P) and the financials (XLF). If we find an intermediate bottom I think it will show up there first. I'm not a buyer until the charts start climbing and I see a trend develop. No need to be a hero.

Asia isn't helping....

Great discourse here as usual. I violated rule #1 today as the value of my portfolio fell below the total of my contributed capital. I actually bought some more of my junior miner stock SGR.V as it dropped from around $1.30 CAD to around $1.15 CAD today.This is my only holding right now.Should have stayed in HGD a little longer for the hedge.Went in(9.95) and out(10.44)of HGD last Thursday.Hope I'm not one of the ones left trying to swim for shore while holding on to gold bricks.Perhaps if the water doesn't get too deep I can stand on them 'til the tide goes out. Wait it out on my little gold island.:)Any who hope everyone has done a little better than me with rule #1. In keeping with musical theme here is one that came to my mind ....In honor of the last bulls still standing :

http://www.youtube.com/watch?v=X5pkkAhETYg

craig- that sounds like a good idea...

asia is indeed not helping at the moment, but still leaning towards improved futures by the open...not over till it's over applies to capital markets more often than any other game i know...

..will also gladly sacrifice 4 points to see BH pick up 20 (LOL)...

craig- see you in the morning, off to bed (no doubt so is our man ben, maybe with an ambien)...not worried about you at all, man->if you take a hit at all tomorrow, would probably put you back all the way to...last wednesday (LOL)...seriously, i can tell you've had a pretty good so far run in '08...

'run so far'

Jan. 21 (Bloomberg) -- ACA Capital Holdings Inc., the bond insurer being run by regulators after subprime-mortgage losses, won a month's grace to unwind $60 billion of credit-default swap contracts that it can't pay.

http://tinyurl.com/29darm

That's about .2% of outstanding CDOs?

What happens when a bank's borrowing costs are higher than their client's costs?

http://tinyurl.com/36qgvy

Sounds like another way of saying negative equity in a mortgage.

2nd.

I’ll have this playing in the background,
So I can call down strength and feel some comfort.
I’m in gold puts but some GS calls which could turn bad for me.
Not too much so I’m cool.
I’m sending LIGHT and LOVE out to all.

http://tinyurl.com/32u5pz
http://tinyurl.com/2aozbk

If anyone wants to know about EFT—
emotional freedom technique

http://tinyurl.com/2zzghb

CommSec share trading website crashes

http://tinyurl.com/3x4nc9

January 22, 2008

THE website of Australia's largest online share broker, CommSec, crashed for half an hour today as investors feverishly traded at unprecedented volumes, panicked by global market volatility.
The site logged 40,000 transactions in the first 90 minutes of trade, compared with 50,000 on an average day.

It crashed between 10.05am AEDT and 10.35am.

A CommSec spokesman said the brokerage, which was established in 1995, had never experienced trading at those levels.

“It is currently back up and trading now as per normal,” the spokesman said.

“The reason for the interruption was a large number of trades and hits on the site.

“We've not seen trading levels of this load or magnitude ever before.

“I think a lot of the clients were trading over the phone at internet (fee) rates during this morning's trading.”

He said the company had logged “pretty close” to its record number of trades in a single day.

AAP

Not selling shares in October is no reason to sell now
Tom Stevenson
Last Updated: 1:11am GMT 22/01/2008

It's the Wile. E. Coyote moment. The ha-ha point at which the cartoon character runs off the edge of the cliff, looks down and realises there's nothing there. Except it's not so funny when it's your savings in freefall. Since the beginning of the year, equity markets have looked and decided they didn't like what they saw down there. Having run in mid-air for months, convincing themselves that the stock market could shrug off the credit crunch, they've had a rethink.
Investors who a week or two ago thought a US recession was a vague possibility have talked themselves into believing a full-blown slump is now a racing certainty that will savage corporate earnings and the value of shares.
After yesterday's biggest ever daily points fall, the market had fallen by 14pc in less than three weeks.
When Brewin Dolphin's equity strategist Mike Lenhoff sent out a flash email comment in the morning, his back-of-an-envelope calculations were based on a FTSE 100 reading of 5750, down from the 6479 reached on January 3. By midday, he was already 200 points out of date. It wasn't pretty.
Fortunately, the market doesn't throw too many of these sickening falls at investors. But when it does, you have to take a deep breath, banish those demons whispering "sell, sell, sell" and marshal some facts.
The first, from Lenhoff himself, is that at 5750 the FTSE 100 offers an equity earnings yield of 9.4pc. What this means is that you can buy the UK stock market for around 11 times its total earnings.
By comparison, to buy the right to the income from a bond issued by the Government you will need to spend around 20 times the annual dividend. Shares have not been cheaper on this measure since the bottom of the dotcom bust five years ago.
Lenhoff also notes that the premium for mid-cap FTSE 250 stocks has all but disappeared which means that 97pc of the UK stock market is now attractively priced.
The counter argument, which is made by Henderson Global Investors' strategist Tony Dolphin, is that equities only look cheap because company earnings have risen way above their long-run trend - he calculates they are 25pc higher.
If you rejig the calculation to reflect that, the price-earnings ratio of the stock market is no longer at a 13-year low but more expensive than at any time in the past 40 years except during the madness of 1999.
These differing views show that the valuation argument depends crucially on whether companies can keep churning out decent profits and that in turn hinges on whether we do or do not face a recession.
If we do, then the stock market has belatedly but rightly priced in a sharp fall in corporate earnings. If not, then it is possible that, as Lenhoff puts it, "today's share prices will look like silly values in 12 month's time, if not before".
You wouldn't believe it from the headlines, but the jury remains out on whether the US, let alone the rest of the world, faces a recession or merely a slowdown this year.
Plenty of economists - Goldman Sachs, Merrill Lynch included - have nailed their colours to the mast and said we're either already in recession or face it very soon. Others are more relaxed.
Lehman Brothers downgraded its outlook at the end of last week but it still expects the American economy to grow by an annual rate of 0.5pc in the first quarter and 0.8pc in the second three months before picking up pace in the second half of the year and growing at more than 2pc next year. It is sticking with its view that valuation and fund flow indicators still add up to a bullish case for equities.
But let's assume that the market is right and that there is a recession this year in the US. What does history tell us about the likely trajectory of shares from here?
The first point is that the stock market predicts recessions by peaking on average four months before they start. The October high suggests, therefore, that a recession is imminent.
The second point is that stocks almost always predict the end of a slump too, bottoming out some time before the economy turns up again. On this basis, Lehman says a market bottom sometime in the middle two quarters of 2008 is likely.
Markets don't respond to earnings recoveries so much as the interest rate cuts that make the recoveries possible. Because the Fed has already started cutting rates, pre-empting the actual recession, recovery could be quicker than in previous cycles.
Lehman's final point, and I think this is the most important for non-professional investors, is that the rallies that follow a recessionary trough are usually fast and furious. An average gain of 33pc is typical, except in those situations like 2001 where valuations were too high at the outset.
The danger for investors who are not sufficiently close to the market is that they get spooked by gyrations like yesterday's and bale out just as the bad news is factored into prices. The unit trust data, and New Star's warning last week, suggest this is happening. They are then too slow off the mark to catch the recovery.
We may not be at the bottom, but the smell of fear suggests that investors are close to what Lenhoff calls a "climax sell-off", the capitulation that immediately precedes a turnround.
Of course, selling in October would have been the preferred option. But, having got it wrong at the top, don't compound the problem by getting it wrong again at the bottom.

http://tinyurl.com/3bfz8s

India's market is going for the gold diving medal. It's down from about 20,000 to under 16,000 in less than 3 trading days.

Just a reminder to everyone to have their broker's phone number and a print out of positions handy. The volume will likely cause a number of load problems.

ALOHA !!

Bill ... The moaning you guys are hearing from Down Under is not from Hewitt's failed Aussie Open bid ... It's from the plundering shareholders and Aussie dollar holders are taking as I type!!! YIKES ... the ASX has been going down over the past 12 days and see no end yet!

Today I drove back over to the Perth Mint and went shopping again getting a 15% USD discount plus a big spot price dip!

Still sitting on seven figures in cash ...

I am watching ECU and GIX and am looking to buy tomorrow if it is a major crash. I am looking to buy under $2 on GIX and under $1.50 on ECU(prior to reporting 43-101).

Others I own like PMV and LYM have hardly budged at all on the ask. A lot of these juniors are already at 52 week lows like CNU and MOR so I do not see any huge moves down from here. If I do I will be buying.

I am hoping there will be a massive crash in the gold and silver spot price. So far I am getting my wish! I will be buying more if it goes lower. I just hope the central banks will help me out in my quest ...

Here on Aussie TV I am so sick of hearing how the stock market downturn are all about the US recession! The signs have been glaring for over a year! Inflation has been raging for a year or more ... What's new? 1+1 seems to be rocket science to Wall Street!

Now I hear about the US Presidential candidates and how they plan to deal wth the economy. Mitt Romney claims that just because he worked in the "private sector" he is more than qualified to fix the economy. Hillary says there is a "lot at stake"! On Martin Luther King Day all these candidates are barking about freedom and equality! What total idiots ... These people are the problem not the solution, they have been for many decades now!

So the USD, the Yuan, the Yen and the Franc go up after the foreign markets plunged. Gold and silver cannot be seen as a safe harbour. The paper currencies are fighting a losing battle. There will be attempts by central banks to trash gold and silver.

According to a spin-off company from Goldman Sachs, individual entities now hold more physical gold than global central banks. I am in touch with the CEO nd plan to research this claim further. He says he has proof. That's an article I plan to write when I get back to Hawaii. Goldman Sachs on the TOCOM has been covering shorts like there is no tomorrow. Remember these guys shorted the CDOs ... These are insiders from way back. These guys sit right in the oval office. Its criminal but its reality.

Many do not accept that "manipulation" is taking place by central banks. I say ... BS !!! The Blanchard case showed clearly the gold market is being manipulated. JP Morgan and Barrick Gold were sued and once the case got to the "discovery" phase the lawsuit was dropped because the US government through the Treasury declared that JP Morgan was an "agent" for the the US government and by association Barrick Gold was also immune.

Add to that the FOMC meeting minutes from 1974 which I wrote an article on over a year ago where I discovered currency manuipulation by the Federal Reserve was operating at full force and then Chairman Burns with future Chairman Volcker in attendance were at the helm. Does anyone really believe such manipulations ended when Greenspan and Bernanke took over? With Presidential Executive Orders run amok and bankers in the White House manipualtion has grown exponentially.

Whatever happens over the next few weeks I see immense opportunity to buy ...

Chase all the prices you want but the bottom line is still ...

GOVERNMENT IS ONLY AS HONEST AS ITS MONEY ...

kaimu,

At what price levels will you be buying physical gold again? I think you said you last bought at $650 in August.

(Novice)

ALOHA !!

SteveC ... Since August I bought two more gold levels. One at $704USD and one at $802USD. I also bought silver at $14.06USD. All Perth Mint allocated.

I already bought gold today at $860USD and silver at $15.70USD.

So I am buying at these levels and all significant dips ...

While I did hold back for a retracement in the POG I have given up on a major significant retracement of $155USD at the mid $700 levels and bought right through the last quarter of 2007.

I will soon be buying juniors again and look forward to gigantic retracements in select companies.

I am amazed at the resilience of the USD. Here we are with POG pushing the $900s and daily US Bank catastrophes, major inflation, high oil and yet the USD is only at 76-77 not far off the 35 year lows of 80. The monetary games of central banks sure are "weighty" ... PUN INTENDED! It goes back to my avalanche example. Now the USD is not looking so bad since all the other currencies are not raising rates and have inflationary battles and stock market terror! In a gold standard this would not happen. When you have floating and weighted paper currencies with debt based economies backing them up then the common standard of measure is LAS VEGAS!! The only way to take risk out of the fiat equation is gold or silver. That's the last thing the monetary authorities want you to believe. They do their best and spend enormous amounts of time and money to convince the World otherwise ...