Good morning

Waving the old year goodbye with a few new records under the belt is no mean feat, but the real glitter for gold bullion is that most indicators seem to point to more good news down the line. And gold is now also getting close to its previous high of $850 (achieved almost 28 years ago on January 21, 1980).

I have just reviewed gold's prospects in a new blog article entitled "Gold glitters brightly at start of 2008".

The link to the story is: http://tinyurl.com/2fjly3

Bill,

I wish you and yours a productive and happy new year. May CTAB prosper for you and your clients.

One of my resolutions is to modify all of my past destructive trading behaviors. With your remarkable efforts and encouragement, I finally 'get it'.

I hope I can add to your new projectas stated above.

And yes, South Florida feels chilly this morning!

All the best,
Stuart

Good Morning.

Here are your Cara 100 Ratings Changes:

Downgrades:

INTC - to Neutral @ Banc of America Securities
OXPS - to Market Perform @ BMO
SBUX - to Peer Perform @ Bear Stearns
TT - to Hold @ Sterne Agee

Price Target Raised:

AET - $63 to $66 @ Deutsche Securities

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

Other Stocks of Interest:

CVP upgraded to BUY @ Piper Jaffray with a price target of $17.

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

Let's all put our New Year trading resolutions into good use, get rich and make Bill proud.

Bill,

A toast to you for a happy and prosperous New Year and to good blogging in 2008!

best,
JW

isaiah- UNG is building on friday's spike and will probably turn 'green' for you today...

BH- taking a look at CVP...

Happy New Year everyone!

I see Cara 100 SBUX is downgraded to perperform, maybe a chance to pick up some more under $20. I was a buyer at $20 last week for a few shares.
The 52 week low is $19.85 or so.

Isaiah, I notice some ability to trade the premarket with Scottrade, but still unable to trade GLD, which would have been my choice @ 83.91 this AM. I'm still in the process of funding/transfering my acct to IBKR.
SKF does trade premkt on ST though.

In reading the latest edition of the Costco Connection (Cara 100 COST) I noticed an article entitled "Middle Class Lifeboat".
Costco surveyed 200 people from all walks of life and the theme that emerged was the middle class is concerned about the economy and many have taken active steps to adapt or change behaviors to survive.

In my mind, considering who the average Costco customer is demographically, this is the equivalent of an "Economist" cover.

Good morning 2008!

Many of us make New Years Resolutions to improve ourselves. The improvement may be in the form of a habit, health improvement or work related. I tend to hit all three, results vary ;-) . So, with that in mind, I'd like to remind everyone of Bill's search for traders to join his Trading Group. This is an opportunity to trade with some excellent traders.

From his December 24th Daily Report:

"Trading Group

It is the responsibility of the Cara Virtual Trading Group to ensure that the best ideas from the Research Group and proprietary trading signals are implemented on a 24/7 basis. As traders, our main job is to maximize alpha through execution and proper risk management with the end result providing client accounts with significantly enhanced returns on a risk adjusted basis.

Trader Recruiting

To satisfy global coverage on a 24/7 basis, we are currently looking for 5 traders in the Americas, Europe and Asia/Pacific regions. As the group grows, our goal is to have traders in Chicago/NY, Singapore/Hong Kong and London/Dublin or other cities with major trading activity. Trading support will also come from Vivian Watts, head trader at EFG Bank, Nassau, Bahamas.

The key attributes that we are seeking include:

• First and foremost, we are looking for traders from within the community. Cara Trading Advisors (Bahamas) Ltd. is comprised of high quality individuals from within the Cara Community. CTAB is unique in that the trading, research and technology groups will be working much closer than traditional money management firms in meeting our common goals.
• The second key attribute is reliability. The trading group works as a team, handing off the portfolio from one team to another as the clock turns through the regions. All team members must trust the others to trade the portfolio during their designated time, this is mandatory.
• Traders must be proficient in equity trading. They must also have a solid foundation in option and futures trading in order to “get up to speed” in a day or two.
• The traders must have experience in managing risk within the portfolios. Proper risk management will be paramount to the success of the portfolios.

The challenges of handling order flow with stealth, maintaining a reasonable workflow, seeking out hidden liquidity in dark pools for best execution, accessing geographically diverse markets and post trade analytics to instantly access portfolio allocations will be met through the CTAB technology group, Interactive Brokers, EFG and others."

I am helping Bill with this, so if there is any interest please contact Bill in confidence at bcara [at] billcara.com and I will get back to you.

2nd,
How do you like the bid against the financials?

XLF UP a dime, SKF UP a .50....seems like the bid on SKF is telling us something....

g034,

I've just forwarded my credentials to Bill at the email address you just mentioned...interested in the NY position.

thanks,
JW

craig- things moved quite a bit since your post...got caught watching CVP (9.67/out at 9.94)->leaning towards selling the open...

Keeping my eye on rural telecom, FRP.

This company has been beaten up due to problems with acquiring some Verizon lines.

Trading at 52 week low and yielding 12%.

JW - great! Looking forward to speaking to you and all community members that respond to this search.

Btw, due to the holiday season, many eyes are not on the blog at this time so I will be reposting this over the next week or so.

Any cogent appraisals around on the Canadian energy trusts? I'm intrigued by how much the Canadian gov't whacked my shares. I guess it's going to fund someone's health care now. I suppose that's good.

VRSN - Massive resistance at 38 remains in place for the seventh day. Exceedingly unusual action. Someone liquidating a huge position?

Looks like the market just went over a small cliff. I'm watching that 1452 mark on the S&P to see if it can punch through today.

Does anyone here have an opinion on the safety of margin accounts when the firm is declared insolvent/bankrupt? I am aware of legitimate questions with regards to this and your holdings being pooled with everyone elses such that there might be some question what is returned to you.

Maromatics,
Are you shorting gold or have you reconsidered?

$crb
topping?
spells trouble for pm's no matter how seen as storehouse of value?
Thinned out position in pm's on Monday. Today, my decision looks impulsive.

Is it not surprising that India's mkt continues to hold up.

questions questions.

FWR partnering with Xstrata (Dec 21).

"Freewest Resources Canada Inc. today announces the signing of an agreement with Xstrata Copper ("Xstrata") whereby Xstrata may earn up to a 75% interest in the Corporation's Sungold base-metal property (the "Property"). The 100%-owned Property comprises 94 square kilometers or 49 mineral claims and is located 120 kilometres west of Thunder Bay in the Shebandowan greenstone belt of northwestern Ontario.

Under the terms of the agreement, Xstrata is required to spend $3,000,000 on exploration and make cash payments of $125,000 to Freewest over a 4-year period, to earn a 51% interest on the Property (the "Option"). In addition, Xstrata retains a Bump-Up Right enabling it to earn an additional 24% interest (75% cumulative), by completing a Feasibility Study with respect to all or parts of the Property or by incurring no less than Twenty Million Dollars ($20,000,000) in Feasibility Study Expenditures. Upon Xstrata having exercised its Bump-Up Right and becoming vested with a 75% interest in the Property, a Joint-Venture shall be formed with Xstrata having a participating interest of 75% and Freewest 25%. Should Xstrata exercise its Option but not exercise its Bump-Up Right, a Joint-Venture will be formed between the parties with Xstrata having a participating interest of 51% and Freewest 49%. "

Historically, December is one of the best months to be invested in stocks. Since December's return was flat, the market is telling us that "something is different this time."

Now that the normal month-end (and year-end) bid has expired, the stock market faces a tough test. The market's technicals (we analyze the strongest stocks compared to the weakest stocks) ended the year very weak and today's ISM print below 50 has extended the weakness with a new bout of price declines.

If the market closes below the November lows we will be publishing a new research report on our website (www.2globalmarkets.com). Stay tuned!

In the first 15 minutes this AM 60,000 QQQQ June puts with a 49-51 strike sold. This was with about 100 calls selling. I bought 10 myself with the 51 strike. Hopefully I'm following the big money and not one of the suckers.

Rob.

Happy New Year Bill and everyone!!!Bill here's to success in your new efforts this year and thanks for keeping us supplied with your trading wisdom!

- Denny, I started buying into the oily gassy canroys last week and built up a position of five. They are a commodity play on top of a currency play on top of an an individual company, so they are more involved in terms of the work you need to do. I try to stay on top of the energy markets, fx, and then get into particulars. Look for production, profit margins, reserve life.. as a starter. Since last week I bought into tui.un, aav, hte.un, nae.un. Each one of those has a story, but do your dd, and the company presentations are a good place to start. They all have something fairly recent. One proviso, don't chase just yield, chase yield and safety.

Finger Lakes, isn't the big money selling those QQQQ puts too? Someone could be pocketing those $18M, as is usually the case with 90% of options.

calvino, you forgot on top of willy-nilly taxation. Thanks for your input. I suppose the foray into the tank paid for itself in terms of education. All I've learned though, is that gov'ts can tax your assets to death whenever they want. If you've got any resources, let me know. Thanks.

Si02, that's true. But it would be extremely unusual if a put writer originated all those contracts -- rather it was a market maker meeting demand.

By the way, did anyone see the ISM report? And the ten year rate?

Not good.

Both MU and AMD heading for a 6 handle. Sharp edges, beware!

Has anyone read this yet?
http://www.portfolio.com/executives/features/2007/11/19/Blaine-Lourd-Profile

The new year is starting out right for Gold - a new record high! Now, if only the market doesn't tank, the gold shares should skyrocket!

calvino, the thing that bugs me is who would want to invest in these things when taxation comes out of the blue. There are some seniors here who could probably benefit from the yields, but I had my head handed to me in Penn West Energy (PWE). Once the word came down that Alberta was looking at another tax, it seems investors sold first and asked questions later, having been burned already. I often wonder if investors in the U.S. would not raise hell if the U.S. gov't slapped a tax on like that. Of course, they may yet.

Calvino, I don't follow aav or nae, however, hte should be looked at as a refiner play and tui has horrible, horrible management and just cut divi again! I'm looking at day. It bottomed and turned early Dec and has been on a tear since last week.

DUG- opening a position at 35.82...

The bears are back..... Yogi & Smokey are in the house.

I think I'm detecting a little blood in the water. :-)

2nd

curious...have you set an exit price on UNG?

"While other nations may walk away from creditors, I think the possibility of the US authorities doing that are slim to none, and that will keep the $USD and Treasury prices strong."

I'm sorry but this misses the point on monetization of the debt. No one feels the US will walk away from creditors. It is certainly not enough to keep treasuries and the dollar high.

I suspect you'll be wrong on the dollar range as it should be much lower and I highly doubt that gold will return to $650 this year as you have suggested repeatedly.

Isiah, wrong! I am posting today, and I am channeling the Kodiak, Grizzly and Polar spirits. Don't fear the reaper, how's them fxps.. :-)

Denny - Diane Francis wrote very cogently on the subject. Don't get me started on the pink shirted wanna be cowboy MBA Harper. Canadian pensioneers subsidizing Taqa on the PWI deal. PWI was higher then taqa sale price before pink shirt sprung the Haloween treat!! Okay, with that out of the way.. Alberta is not the federals, they are competing with bakken in saska and BC, there is a limit to their madness..

Calvino

You remembered...

I'm hanging 10 on my board with FXP....going to ride this wave all the way to shore. You holding any FXP or QID?

Cadet, TUI lost their horrible managment in august and the new one is much much better. the divi cut brought the payout to 15% , you are not talking enterra here! furthermore, the divi cut should leave them about a dime per share, my estimate, to plow back into e&p which is good. they are also going to sell off oil props into a high market to clear all their debt. again, to me, a smart move. finally the shares have been surging the last three days, and are now yielding less than the 15%, also a good sign that the market believes the story. still, I took about a fifth of my position off today and would switch into nae or aav, but the shorts on the bloated hypeshares beckoned me too hard, so that's where i put the profit.

Well so far in two and a half hours I'm up 15% on those QQQQ puts. I'm wondering if this is a head fake to start the Jan Rally or if this is heading towards a retest of the lows.

And with Gold up so much and the dollar only doen fractionally I'm wondering if Gold is putting in a short-term top and will start falling now.

I'm thinking about buying some puts on NEM to play that possibility.

I'm also wondering how AAPL will fare with the Macworld conference coming up Jan 14-18th. They usually surge during that conference.

Rob.

Quite a race between MU and AMD.

Isiah, I have thought about it everyday, like they were my own positions. I read about your trading and would have been upset if you lost money! No fxp here, but I'm holding jrjc, bidu, csun, ctdc, and ej short. I had mentioned some of these positions a few weeks ago :-) but with huge warnings and provisos!

I wonder how all the people that listened to the talking heads on tv and bought into this market are feeling right now. I bet Cramer's inbox is full of nasty letters.

Calvino

"I read about your trading"

Yeah....it read like a Greek Tragdey in 2007. With UXG being the ultimate trear jerker. But it's 2008 and the surf is up!

SDS - Longs might want to consider exiting now @ 55.35

calvino, well look at that! Some other people are upset about the "income trust fiasco." Does it actually say Americans can sue the Canadian gov't?
Diane Francis: http://tinyurl.com/2qdd7x

Regarding Zenob’s lament on Ron Paul and Evolution Last Saturday the 29th (Sorry no reply earlier… typekey issues while traveling.):

Many on the internet seem to be grasping at this event as if anyone questioning the tenets of evolution should be crucified as a heretic. Their prima facie argument seems to rest on an “immutable” interpretation of the concept of evolution. If modern scientific discovery has “proven” anything, it is that man’s understanding of nature is not immutable.

Let me elaborate... Do you believe in gravity? “Why, of course I do MtnGntx; gravity is an immutable fact of life. Surely anyone who doesn’t believe in gravity is insane.” But gravity is not universal and only works in special well-defined cases. The entire realm of Quantum physics began as a means to describe a reality in which gravity does not adhere to Newtonian law. “Ah, but now your grasping at straws, MtnGntx, as gravity works quite predictably well in all other circumstances.” And again, you would be wrong ( http://tinyurl.com/ype2sn .) My point is that we have a tendency to think in terms of black and white, when, in fact, reality expresses itself in shades of grey.

“But evolution… that is a scientific fact! Your doctorate is in molecular genetics, for goodness sakes; surely you must believe in evolution?” Yes and no…. Works well sometimes, and horribly at others…. Well, give me a break… the question is loaded. What would you expect of me?

DNA is a fabulously fascinating and complex molecule. It is unlike any other molecule known to man. It can act as an insulator, a semi-conductor, or a superconductor depending on its environment. It is optically active, easily rotating light. But it also orders photons in a lasting and purposeful manner ( http://tinyurl.com/ywdz3q ) that we don’t yet understand. In fact, studies repeatedly indicate that emotion and intention have a direct impact on the physiological state of this molecule with very interesting quantum effects that researchers are having a difficult time comprehending.( http://tinyurl.com/yvlfl4 ) To be sure, all of these non-standard attributes stand a high probability of impacting our nascent newtonian concept of evolution…quite potentially in irreconcilable ways.

Genetic mutation itself, the driving force behind the concept of evolution, is also fabulously fascinating, complex, and dynamic. At certain times in our history, the process inexplicably and against all probability speeds up ( http://tinyurl.com/bouyz ). Findings in this area have required a new view of evolution termed
“punctuated evolution.” Indeed, periodicity seems to be the norm in the fossil record rather than the exception, and this periodicity occurs without clear environmental causation ( http://tinyurl.com/2fx3w9 , http://tinyurl.com/2zlfs9 ). In this sense, Evolution itself appears to be far more dynamic than current models predict or allow.

If that were not bad enough, evolution seemingly violates another well established and immutable “law” of science; the 2nd law of thermodynamics. This law mandates that everything in the universe tend toward an entropic and random state… an existence in which organization is an anathema. But arguably, this does not describe the initiation and development of organic life, where complex, highly-ordered, self-replicating molecules, produce fantastically diverse, self-serving systems that miraculously manifest as living, learning, growing entities… And don’t forget, all of this complexity originates from the bosom and chaos of primordial goo… So, which law should we qualify… the “law” of evolution, or the “law” underlying thermodynamics?

“But, MtnGntx, blasphemy among blasphemies, this smacks of CREATIONISM!” And now, I think we are getting to the heart of so much indignation. When anyone questions fundamental tenets of evolution, are they to be branded as a creationist? If so, then I stand branded and I’ll gladly endure this pariah status even though I am uncertain as to which crime against science I’ve committed. In fact, I suspect that those in judgment really have no clue what violations they are citing in their condemnation.

Having never studied it, I am not certain what a creationist is. But I think creationism purports that some transcendent intellect precedes and orders, as an underlying force, all levels of our physical universe… including, of course, all that we consider to be life. So, just for fun, lets take a closer look at the underlying structure that defines DNA: ( http://tinyurl.com/yrry7u ) Now isn’t that interesting. But in “Dust Comes Alive in Space” ( http://tinyurl.com/2ezcl3 ), it gets even better… “The findings have provoked speculation that the helix could be a common structure that underpins all life, organic and nonorganic.” Truly, man has much to learn about the nature of life itself.

Science has never “disproven” the “tenets” of creationism as I understand them. If anything, our discoveries tend to support these concepts. (As usual, this is just a VERY SMALL sample of supporting reference …I went with a few of the more interesting and less technical examples). In conclusion, to those who would characterize evolution as something other than a malleable model in progress… a “theory,” if you will… I would suggest that if you choose to wrap yourself righteously within the cloak of science, then you would do well to understand what bits that cloak will effectively cover before proceeding out into public… lest you may find your arse hanging out at an inopportune moment.

I hope those of us here in the United States choose carefully before casting our votes this year…. I hope that we will not allow emotional sound-bite or pundit spin to cloud the real issues we face. And I hope that we will not permit ourselves to be disenfranchised by “election irregularities.” This may require a bit more personal involvement than in the past.

Happy New Year and good trading to all of you!

P.S… an update for those keeping track of global warming: U.S. Senate Report: Over 400 Prominent Scientists Disputed Man-Made Global Warming Claims in 2007 ( http://tinyurl.com/2hmrer ). And: EPA Chief Vows to Probe E-mail Threatening to ‘Destroy’ Career of Climate Skeptic ( http://tinyurl.com/yuq8pj ).

For those of you who followed the DOW (Cara 100) trade in November - oil is approaching $100 again and DOW is at those prior lows. RSI's are similar to then, but MACD is not. Maybe setting up again, maybe not.

No position.

g034

'Maybe setting up again,"

For what g034?

Denny, I wish I was in Canadian politics, because I would harpoon Pink Shirt every day for subsidizing the sheiks of abu dabi with Canadian retirees money. A wretched disgrace!

Isiah, good attitude, don't let the hype pushers blow you out of the market - ultimately they are lying, while you have reality on your side!

In case any have interest in screening tools, I use a prophet.net free account for this purpose. Parameters I find useful include oversold condition (Wilder's RSI < 30) with price breaking out above 5-day but still below 20-day on higher than average volume. I eliminate from consideration very low priced stocks and those with large bid-ask spreads and small avg daily volume.

Scan results are based on real-time (not delayed) data, and are presented together with charts (20-minute delayed, I think) for quick visual review. Results can be updated at any time during the day with a single mouse click. Users with free accounts can save two sets of scan parameters so that it is not necessary to reconstruct your scan each day.

On the 28th I wrote about the symmetrical triangles of the Dow and SP 500 and gave it 1-3 weeks to resolve. With today's action the triangle has broken to the downside more noticeable on the Dow. Will it go back to the bottom trendline or not.

mtgntx...

you must have watched this documentary.

http://www.hbo.com/docs/programs/friends_of_god/

Interesting post. Of course 80 million evangelicals can't be wrong. Maybe just shades of right.

Mitt Romney, "WHY WE DON'T NOT SUPPORT HIM"
http://tinyurl.com/2378va

Circuit City (CC) call fell off a cliff. Guess that's what happens when a stock has too much institutional ownership and the institutions are ticked off at where the money is going. It's still in the accumulation zone... anyone accumulating?

1. it's punctuated equilibrium
http://en.wikipedia.org/wiki/Punctuated_equilibrium

2. the SLoT argument is THE worst creationist argument in existence. It's even worse then Pascal's wager. Super quick version of the SLoT: the entropy in a closed system always increases over time. The problem for anyone trying to use this to argue against evolution is that the earth is not a closed system. Walk outside and look at that big ball of nuclear fire in the sky. The earth is receiving constant energy from the sun. As the entropy of the sun increases, ours decreases. In other words we are benefiting from the heat death of the sun, but that's not going to be a problem for several hundred million years. This is pretty basic high school science.

3. the major tenets of creationism tend to be: Special creation(everything was zapped into place just as it is) which has most definitely been disproven by science. If science hadn't shown this to be untrue you wouldn't see creationists throwing such a fit about it. The next tenet of creationism tends to be the age of the earth(although there are a few creationists who give ground on this). The earth is most definitely NOT young as most creationists claim(tree rings alone exceed the age most creationists adhere to). Lastly, creationists tend to think the bible is without error and better then a science book. A quick glance at it shows that this is not the case. There are hundreds of contradictions contained in it as well as things that are simply wrong. As such you can plainly see that the major tenets of creationism HAVE been disproven. NOTHING in science supports anything in creationism. Zilch.

4. Evolution is not a "model in progress". It is one of the most well researched and supported theories in all of science. In 150 years it has never been falsified.

And don't get me started on climate change deniers. The discovery institute has just as many "scientists" on their 'dissent from Darwin' list. What you have to take into account is that this is far less then 1% of the scientists in those respective fields(around 400,000+ if memory serves). Not to mention that if you check into the names on that list you'll see that many of these climate change deniers have close ties to oil companies, most prominently Exxon. Several of them are little more then rentable opinions with PhDs. Several climate change deniers used to make their money by denying that cigarettes were harmful. You can look them up here:
http://www.sourcewatch.org

calvino, hope this isn't boring other people but can you explain that connection between the Middle East and the Canroy's? I appear to be woefully ignorant down here. You mean they are being bought by non-Canadians after the recent downdrafts in the stocks? Why do I see they are closing?

I wonder if the FOMC minutes being released at 2 will make the market jump like the ISM number made it tank this morning.

Rob.

MtnGntx,
Thank you. My takeaway from your discourse is that many of us feel a need to explain everything through scientific truths. Truth is relative to what is known at the time. My personal experience is that scientific models provide a framework for discussion, understanding and further exploration. A little art (creative thought) is always required to complete the mix and some variance is always excused. Applying this to the science of using RSIs and MACDs to determine which stocks to buy and sell, I would never rely entirely on the scientific model. I need to consider micro and macro changes in the business environment and other variables including market sentiment, irrational behaviour and political agenda. I also accept that the more I know, the less I know.

crystallex finally has some momentem!!!!!!!!!!!!!----gold way up. russty

wavesmash:
I added CC around 4.09 friday and today expecting a January effect bounce.
Other January bounce candidates (FRPT,MPEL, SLM, BSC, MER)

regarding canroys, remember that a strong CAD hurts them, it doesn't help them. all their costs are in CAD, and all their income is in USD

None of the above requires a supernatural explanation or supernatural force as the primary assumption.

Craig,

I am biting my hand not to give the order to short. Actually, I am really fighting myself here!

Believe me, I am really in a personal struggle between my personal rules and what I think I should be doing, but so far I have decided to stay out untill next Monday.

Anyway, I would have shorted at 850, obviously wrongly at such level, as I do believe that this is the final strech of the gold run before some consolidation...

:-)

maromatics, why would you want to short something that is the only real money?

Gold is currently up over $20, so let's take a look back at the GLD symmetrical triangle "lesson".

Here is the original post -

"For those interested (hope someone is), let's have a little "Technical Analysis Lesson for Today". I highly recommend that new traders participate in this. This lesson may make you a lot of money in the years to come. As is custom here, the community is the teacher so let's not be bashful and try to get as many answers/teachers as we can.

I am looking at a daily GLD chart. It appears to be forming a SYMMETRICAL TRIANGLE pattern. I have had great success trading this pattern and think that many of you will too.

So;

What type of pattern is this? Continuation, reversal, etc.?

If the pattern is confirmed by a breakout, what is the target price of said move? (roughly, don't need exact price, just eyeball it, or "annotate" button on stockcharts). This is the most important question, imo.

What else would one look for in this pattern? Volume, etc.

This information is easily searched on the web, should only take a few minutes and is worth your while. As long term community members will attest, I don't waste my time here and won't waste yours.

btw, I chose GLD and not gold, gold futures, etc. for consistent answers

Posted by: g034 at December 12, 2007 11:10 AM"

Since that post we found that:

- A number of Caraistas said that this is a continuation pattern. That is correct (and turned out to be bullishly true), but historically, the probability of this formation being a continuation pattern is lower than many other formations that traders view. Please read the books that Bill recommends on Technical Analysis for further study.

- When trading GLD, charting $gold itself is probably better.

- The price target is found by adding the measure of the broadest part of the triangle to the breakout point. Rough calculation; $7.52 + $80 = $87.50 (or so). Currently trading below $85, so not there yet.

- The lower line of the formation was roughly in line with the 50 dma which would provide further support.

- Before the breakout, I mentioned that by eyeballing the chart, you could see that various price oscillators would be turning from weak to bullish on a possible breakout of the triangle down the road. This was important for three reasons; first; you need to try to anticipate what may happen in the future and have a plan in place, second; because the price oscillators (MACD, RSI, etc.) were weak, the downside was limited and favored a continuation of the bullish trend, and third; if the price oscillators turned bullish (crossovers, etc.), the black box hedge funds / traders would be looking to go long gold - this would be new money coming into the space driving prices higher.

- This pattern is also called a coiling pattern...and look how the coil has been sprung!

So, how would you have traded this? A lower risk trade would be to have bought on the breakout higher with support being provided by the lower end of the triangle. This support would have been strengthened by the overlapping 50 dma. A failure of the breakout would lead you to looking at those supports to add to the position, or as marks for stopping out your longs. Because the triangle was pretty mature (getting narrow), the downside was less than if the breakout occurred earlier which lessens your downside risk.

Each trader has different experience, goals and time horizons regarding loss of capital, so traders could use different strategies to manage the risk of the long.

If I missed something, a calculation is incorrect or if you simply want to add your $0.02, please don't hesitate to comment.

Thanks to all who participated in this. I hope some of you actually traded on this formation and are enjoying a positive p&l on a day when the DJIA is down over 200 pts.

If someone else would like to start another "lesson", feel free. This will probably be my last post on this one.

Thanks again.

Disclosure; Long GLD and other gold related holdings.

BTW, go34 is referring to his DOW chemical trade a while back.

He is cluing us in to keep an eye on it for the same set-up, which is pretty darned nice of him.

Denny,

Because the gold run is now ripe for s pullback that will shakeout the weak hands and clear he way for a brutal run upwards thereafter.

There is no consolidation made to support these levels, and so gold will inevitably fall.

I was thinking about shorting at 850. I was wrong.

Now I am biting my hand not to short 860, but I am waiting to see some rolling over signals, which can happen at any time.

Another reason for not having shortes was that the FOMC minutes are coming out today. Of course that these minutes are "by themselves" irrelevant to prices, but the spin is pretty relevant.

SO, here is the skinny:

- If I had not decided not to trade before Monday, I would be short gold since 850 (wrongly).

- If by Monday I see Gold sorring over, I am shorting it like there is no tomorrow, with a target around the mid 700s.

Cheers,

2007 Stats

Growth Stock Portfolio (Non Commodity)- Up 16.4%
Absolute Return Portfolio- Up 12.4%
Commodity Portfolio- Up 53.2%

Max portfolio drawdown was less than 4% in 2007.

My resolution is to keep tuning out the noise of and trade 'em like I see 'em.

Good luck and good trading in 2008.

Interesting to see SMN (ultra short the basic materials) is up over 1.5%.

Miggs

Interesting development for the Ron Paul fans out there. Fox has banned him from the NH debate.
http://tinyurl.com/2eyfn6

Ron Paul is on Bloomberg now.

I would vote for him if I was a US Citizen.

maromatics, just curious why don't you put any weight in favor of gold on the basis of other factors, like coiling pattern, pennant, cup-and-handle formations against the currencies, etc.?

I would never vote for Ron Paul. But Fox's move clearly demonstrates how they are not a news organization but instead are an arm of the republican party. Ron Paul is likely to have a "Nader effect" this election cycle if he goes independent. And unlike last time it will hit the republican party instead of the democratic party. The republican party is clearly trying to keep that from happening and the move by Fox is just part of that plan. As far as I'm concerned, if they are going to keep Thompson in the debate(even though he doesn't even really want to be president) then they have no real reason to exclude Paul.

Denny,

Because in my opinion gold is ahead of its own curve and will soar to incredible highs, but not yet, surely not before a "cleaning pullback".

Too many people are on the long gold trade, and from my experience I know that HB&B, will shake them out sooner than later.

But there was not enough room for RP on the Fox bus! :)

Should have used an aircraft carrier instead...

CC is bouncing a bit after FOMC minutes release... must be being pulled by general market.

G0Payton, Maro, Denny:
Thanks for the great Gold discourse today: learning a lot. Printed G034 lesson for offline study. (P.S. GO34: everytime I'm running up a hill I think of Walter's backyard training camp)
Craig: What great restraint demonstrated in 1:29 post! New Year's resolution?

MarkM- why don't you apply to become part of the Cara Trading team?

NYUGrad,

Re ATVI: hope you have not got into that trade - it is down 5,6% today....

It was, and still is, a decent short.

Cheers.

g034 at January 2, 2008 1:33 PM Just in case you missed it, I posted my 2 c about 3 or 4 weeks ago. The on balance volume for gld on the fall from 83.63 remained strong suggesting a continuation of the trend to me.Rather than call this a symetrical triangle I am more inclined to call it a flag because of the strong volume taking price without any correction of note from the Aug low to the Nov high(creating the mast) Here is the chart I posted back then fwiw,I think the volume can now be seen to be clearly in favour of this breakout. Macd and rsi looked very similar to Mar 2006 so that was of no concern to me at all.Contrary to what some traders may feel about the lack of volume so far I am happy with less volume than more as I think that much larger volume now would be closer to signifying a top as it did in May 2006. The po I have in mind remains 1020ish contract gold per stockcharts with a pause at 875 on the way likely from my study of the long term price dyodd etc http://tinyurl.com/2av4l9 cheers

Who here loves this line from the FED...

The Fed also noted that there is a chance of a rapid market rebound, and reversing rate cuts

How great is that....

Jaketh,
Yes, I'm a work in progress! Just refocusing on the crux of the question.

I wrote a couple posts, purged my system and threw them away. Ahhh, all is well.

Well I may be treading a risky line but I just bought 10 NEM June 45 strike puts at 2.15

I almost sold my QQQ puts after the minutes came out but am sitting tight for now.

I'm also holding UYG, currently a little under as my basis is 41.64 but I think the financials will push up again before another crash so I'm holding that as well for now.

Rob.

Craig:
Beautiful! Yes, learning to write and pitch is "good as gold."

BG:
"a chance of a rapid market rebound, and reversing rate cuts."

Equal, I'm guessing, to the chance that BC gets tired of Nassau and sets up Canadian Traders LLC.

Re: Ron Paul exclusion:

The power players in the Republican house are scared of Ron Paul (Huckabee too, but he is the frontrunner!). It is ridiculous that RP is excluded even though Fred Thompson is allowed to participate. Thompson has lower poll numbers and has run an unparalleled disaster of a campaign. Find his interview with Stephanopoulos and you will see what I mean; it was like a segment from The Daily Show.

"MarkM- why don't you apply to become part of the Cara Trading team?"

Too much of an "individualist" so I'll leave that honor to others. ;)

Good luck and good trading in 2008 all.

Feb 08 Gold Continuous Contract:

As g034’s lesson on symmetrical triangle showed based on the above contract the target count is 891.50.

The calculation is ((top of the triangle minus bottom of the triangle) plus breakout point)). The result is 76.50 + 815 (approx breakout point) equals 891.50 as price objective.

As to shorting gold here, my philosophy is to never short a security that is in a confirmed bull trend, gold. My plan would be either long or really long gold. This is not to say that money could not be made shorting here, but for me why fight the trend and make it harder on your self. There are lots of securities that are in confirmed downtrends that should be easier short trades.

As with g034, if my calculation is wrong, please correct me. Good trading to all.

Long Gld and other gold’s

MarkM - please e-mail me, the e-mail that I have for you is not current.

MarkM - please e-mail me, the e-mail address that I have for you is not current.

thanks

FXP- opening at 78.05
QID- opened at 38.92

better late than never...

Tbar - yes, I recall your excellent chart. Thanks for the inclusion to the discussion.

sorry for the double post above.

g034
What about the chart for gdx?
I see a couple of ways to draw lines on this chart.
Would you say continuation pattern or bullish descending wedge with BO 12/26?

Still have my juniors...but protected profits on Monday....I'll try to believe maromatics might have a point but a weak case for oscillators overbought...more like a coil still going. "On the other hand" may be good to keep powder dry for when banks start selling gold...so goes "theory."

Mark M nice to see you posting.

Looks like the market was hoping for a more solid statement on the part of the FED instead of them outlining either path they could take. Their statement only adds to uncertainty about everything.

That's why I'm on both sides. It swings one way and I'll clear my puts and add calls then swings the other way and I clear my calls and add puts.

Rob.

HGD.TO (HZBSF)->trying to land a [small] position in fido...

HGD (BetaPro Gold Bear Plus) filled at 11.70->will find out shortly if i can even stand up on this surfboard ;)

2nd, I joined you on the short side but with GG puts, +8%, just looks a little overbought.

g034,

Thanks for the nicely reasoned recap and extension of the lesson. You'd make a great teacher.

Tbar,

Lovely chart. See you @ $1,020.

Opened new position 150% long XLF today eod. If falls through 28 (closing) then I'll exit, else holding for 32+.

Bill,
What do you make of the TSX COmposite outperforming the DOW so dramatically over the last few days? This is particularily evident today with the DOW -200 and TSX +100. I'm used to seeing the 2 follow eachother tick for tick even though the TSX Comp has a much higher resource weighting. I'm interested to hear your take.
YYZ

"The Prophet 2nd_ave"

Your call earlier today on UNG was
right on the $$$.

2nd ave...how did you find this gold short? what inspires you? really. thx, jasper

Does anyone think that today's weakness might be a setup for the start of the January rally tomorrow? Many billions of dollars were paid as bonuses on Wall Street this year, and if I were inclined to invest that money into the stock market, and I would see a negative economic report (ISM today), I would wait for wait for the fall and then buy into weakness. So I am not shorting this market yet (aside from the HRB short that I opened on Jan 31 at $18.75 after what looked to me like a short-squeeze).

Denny, Abu DAbi's sovereign fund allocated twenty billion to buy up canadian natural resources. Prime west was the second acquisition, and there will not be a third, as far as I would guess.

Railpower Tech P.To has been tacking on ten percent each day for the last five sessions. No news - someone is accumulating it, and I would guess that someone knows something. It has been a very long time since they annonced a big contract.

Bill,
Further to my previous post.
http://img2.freeimagehosting.net/image.php?5229786529.jpg

Ah 2nd, you heard the call of the bear?

maromatics, good to stick your neck out and make the call. I'll have to admit--even being long pm's--it's almost running too close to the script and so I'm suspicious.

g034
So many interpretations and considerations all open to manipulations, yes I am cautious too as we seem to be following such a perfect chart pattern. At the same time it could be that they have painted it that way so they can run all the pm's they scared out of the jp6 holders, up into the distribution zone yet once again.They really seem to have shaken the tree well with xgd.to:gold at 7 yr lows with 860 gold....

Oops, I forgot to resize and convert to gif for fast viewing.
This should work better.
http://img170.imageshack.us/my.php?image=83285217lp2.gif

Attn: Denny

You mentioned PWE... I follow Kurt Wulff
(www.McDep.com) for his oil analysis and he just raised his NET PRESENT VALUE calculation for the oil sector based on $80 oil up from $66.

The net present value of PWE has raised from $32 to $37. It currently pays 15.9% trading at 26.69.
Has it been beaten down too far? I'd say yes.

I took some principal loss like you (I own shares) but have averaged down as payout looks
sustainable and npv has risen $5.00. FWIW

I own shares.

I'm with DaveB, shorted SKF at the close and was in and out a couple times today.

QID bought early and out at close.

Averaged down on SBUX today, like a falling barrista....be careful, it's HOT and the lid is loose! Bought at 19.31. The last time it was 19.31 was 2004 or so.

We may get an oversold bounce and then retest Nov lows, but I'm lightly positioned for the bounce.

Isaiah, Note I shorted SKF, we can trade it premarket so I can either add or take profits at 5AM PST tomorrow.

isaiah- last time i checked, it was "the prophet Isaiah..." see you're having a great day->nice start to the year...

Happy New Year and Happy Trading
Go34 thanks for your GLD lessons. I also have copied and will replay in order to know. I have to let you all know that reading this site ALWAYS teaches and is always great. Just left IB chat which was accurately described as a Jerry Springer show. Now to the question.....
Gold and DJIA have disconnected...at least for the last 5 days. I accecpt that gold will pull back perhaps soon.
Will there be warning?
2nd question.... Will Citicorp go under?
Thanks in advance
Peace from North Puget Sound
Gray

Craig

I didn't know you could short ETF's?

Denny,

As said early this morning: just for fun for the time being.

As you all know, I am out untill Monday, for the reasons I have already shared with you. By Monday all rading desks will be functioning again and trading will be less prone to strange moves.

As far as it seems, by Monday the current stress in equity should have stared to fade, and the prices will probably be good for opening some long options over the broad market, while keeping a low VaR and as Bill says "my hand close to the selling button". As incredible as it may seem, for a while the market is getting ready to climb yet another wall of worry.

Keep your eye on the ball (prices), not on the media hype / fear.

If such a calmer market materialises early next week, then probably the time will be up to short gold, just to milk the cow out of a gold bull market retracement that is now becoming overdue. If gold retraces a mere 5%, it will be over 100% profit in options trading with limited risk. That is not a bad trade.

Cheers!

Sure you can. Be careful though, if you are near div closing date you could get stuck paying someone their div.....generally it isn't good to short div payers.

David,
I agree it could be a set-up for a rally. I have my finger close to the button on my QQQ puts.
Another thing making me suspicious of a rally is the part of the FED statement that reads:

"financial market conditions
might improve more rapidly than members expected,
in which case a reversal of some of the rate cuts
might become appropriate."

It almost seems like a signal statement to big money saying the FED is ready to charge higher. They almost have to if you look at the 10 year yielding 3.9%. With the amount of treasuries we have to sell to feed the government, I bet they'd like to see the yield closer to 5% to ensure everyone keeps buying them.

It's anyones guess. That's why I'm on both sides.

Rob.

Off Topic Question For My Canadians Friends:

Anyone of you "Hockey Fans" watch the
Pittsburgh - Buffalo game yesterday. Wasn't that great to watch them play hockey outdoors in a football stadium among 76,000+ people with it snowing?

Also you folks up north can produce some great players. That Crosby kid for the Pens is amazing!

jasper- it was "joey" who posted the link to the short gold fund (actually, he was referring to one that will be available shortly, but i found this one as well on the BetaPro site)->reference his post:

AdamG:

you were asking about the availability of a gold ultrashort ETF?

check out these Cdn Horizons BetaPro products:

http://www.hbpfunds.com/gbepf.asp

regards

joey

Posted by: joey at January 1, 2008 3:16 PM

I'm typing from memory about Reminiscences of a Stock Operator. Jesse Livermore was asked at a cocktail party whether to buy or sell a particular stock/commodity that was stuck in a trading range. He said to buy if it exceeded the top of the range or sell if it exceeded the bottom of the range.

Gold's all time closing high today indicates to me that "the line of least resistance" is upward. I am long the sector today despite the recent spike.

Not advice, do your own due diligence, consult your financial advisor.

Isaiah64v4,
I caught the first few minutes of the hockey and the last few minutes. As Crosby said a few times, "it really takes you back...(to when we were kids)". I just couldn't drag myself away from the football games. There were a couple of great bowl games and a couple of stinkers. My sympathy goes out to Hawaii and Illinois fans.

astral25, thanks for the rundown on PWE. Does that come with a guarantee that there will be no new taxes?

Re FDX: I expected FDX to drop to this level as the U.S. recession became evident. Actually, it just hit my buy-alert price. I really like the company long-term based on the increasing shipping needs of internet retailers. What I don't get is why UPS has only fallen 5% while FDX has fallen 15% during the past three months. Morningstar says that FDX Price/Book ratio is now 2.0 and UPS Price/Book is 4.77. This doesn't make sense to me and I think that the numbers must be wrong! I want to own both of these companies 5 years from now but, agree with Bill that I only see them going down here.

Calvino, had time to review your comments on True. I see what you were looking at and understand the "trade". Still, for others, True sold the untaxed Saskatchewan props and decided to stay with the newly taxed Alberta props!, another mistake IMHO so I'm still reserved on their mgmt. As far as my DAY suggestion, there's been a large move there, maybe to large for right now.

FDX is in big trouble with the IRS over their liberal use of contractors as a tax dodge. The IRS declared thousands of them to be employees and levied over $300 million in back taxes and fines just for 2002. They are now reviewing other years. Total losses could be in the billions and will likely dent profit margins in the future (my take).

http://www.bizjournals.com/pittsburgh/stories/2007/12/24/daily5.html

The Cdn Horizons BetaPro fund that joey posted the link to I am unable to get because of Scottrade.

If anyone finds a US ETF version of shorting gold I would more than welcome the link. I've looked and have come up short [no pun intended].

To those who continue to use this discourse to rant about the income trust fiasco I am pleading " Enough already!". I think you missed the point of the government's intervention. It wasn't about windfall taxation but about attempting to maintain the integrity of Canadian financial markets which are under-regulated and controlled by HB&B. Those who hack on about "yield" and "dividend" must either be a part of the sell-side or bamboozled by them. The so called yield and dividend as it relates to most of these trusts is little more than RETURN OF CAPITAL ( think Ponzi ). Due to a lack of securities oversight by "regulators" in Canada Joe Sixpack and Peter Pensioner were being taken to the cleaners by the agressive, misleading promotion by HB&B of what was often the bundling of second or third-rate assets. Canada would have a mortgage melt-down type crisis of it's own creation had the government not moved in with a shot across the bow of HB&B. I, for one, am glad that this game is out where all can see it and there for only the gullible to play. I applaud the government for its action in this matter.

Terry,
Do you recommend against owning the trusts today?

TIA

Isaiah,

Checked your TGLDX lately? Happy New Year!

Jaketh...........

I just did........ up +1.97 [4.03%].... I can live with that?

Aren't you in GAMCO Gold AAA (GOLDX) ?

BTW:Where you been?

Isaiah,

No, I don't own GAMCO. I have been in the wings, learning a lot from the faculty here. Studying options for my 2008 project. I'm having a terrific year in the market; of course, there's always Day Two.

g034, Tbar, maromatics, others:
I'm reading intently your posts about the prospective price of gold.

Tbar, I am quite interested in your view that the recent chart consolidation was a 'flag', as this view would support a high probability of upward price movement, right?

Okay, here I sit with Murphy's TA book on my lap;
accepting your comfort with the low volume on the breakout from the flag, for your reasons given, I wonder about the 'high volume' throughout the period of the flag pattern...if this were a flag pattern, shouldn't this be a low volume pause/consolidation?

Your comments, please, as I'm working at learning.

Also, what do you mean by 'jp6 holders'?

regards

joey

Isaiah64v4 - re: short GLD ETF

XLF maybe?

They seem to be a good pair trade and negatively correlated.

Bankers don't like shiny stuff. Try a compare chart with GLD.

If anyone has a subscription to this service maybe they can identify some good paired trades.

http://www.csidata.com

Hopefully Bill is right and there is another opportunity. It will be better for the world if Gold and Oil get down to manageable levels for awhile.

For some reason it feels like tinfoil, cereal, and a hybrid car might be better investments than gold right now.

maromatics:

I, for one, am glad you're not trading this week and having to 'stick to your knitting'...hence, more posts from you...

what will you watch for evidence that gold is 'rolling over'?

regards

joey

ECA, and PCA
Keep an eye on these two, the charts look very good, longterm plays, eca possible cup and handle
pattern, check m/w/d charts

wavesmash

I'll take a look at GLD vs XLF.
Sounds interesting...

Thanks!

wavesmash

I don't know...I rather find a true gold short ETF. This looks like it can go either way on any given day.

http://tinyurl.com/yr2uzf

on bnn one of the analysts was saying that soon it will be a great buy.... thinks they will cut the dividend and people will go out of the stock and then buy it... huge company all over the world, won't go bankrupt.

that is citybank. sorry.

calvino:

"Railpower Tech P.To has been tacking on ten percent each day for the last five sessions. No news - someone is accumulating it, and I would guess that someone knows something. It has been a very long time since they annonced a big contract."

calvino, you do know that P's survival was in doubt after all its 'execution/manufacturing' screw-ups?
Just before Christmas, the company got a $35mill 'infusion' from the Ontario Teachers' Pension Fund, after which there was significant buying by several insiders - 10's of thousands of shares up to about 30c/share. As I recall, the CEO bought 100,000sh at less than 30c.
Also, there has been a recent glowing report from a big purchasers (one of the southern U.S. railways) with indications of a follow up order.

So, all in all, a rescue from insolvency and funds to fix mistakes and manufacture to fill orders is probably the driver of the 'triple' in price in the past week.

regards

joey

Ah 2nd, you heard the call of the bear?
Posted by: calvino [TypeKey Profile Page] at January 2, 2008 3:44 PM

calvino- stand back and look at the market without the baggage of having traded at all...if you take a look at the 2 year chart of almost any index (or conversely, the 2 year chart of any short ETF)->if you believe in reversion to the mean, then i think we've already gotten a good start in every index except Bombay (which is probably being propped up by too much negative sentiment in the wake of the Bhutto assasination)...

Hulbert starting off 2008 with a (contrarian) bet that equities will outperform gold for the year:

http://tinyurl.com/276wht

note that he is making a relative call only->if both rise, gold will rise less; if both fall, gold will fall more...

Byron Wien Announces Ten Surprises for 2008

http://tinyurl.com/2pcavd

taiwan gaps down 1.8%
HK gaps down 1.6%

i think we go down and stay down this time...

Charles Kirk, thekirkreport.com, has a chart on the front page that he uses to determine overbought/oversold conditions of the overall market. It's moving average is about in the middle right now between OB/OS.

2nd,
If you're right my QQQQ June puts are going to be great. Now I'm starting to wish I had bought more.

Rob.

Spot gold above $860 again. I won't be surprised to see a run for $887.50 when New York opens.

joey at January 2,

Yes the flag suggests higher, 1020 is what I came up with per the flag, but who knows,these patterns don't always perform.
jp6 was a blooper, should have been j6p (joe six pack) referring to the average guy trying to trade (if there are any )

Will we be better off if gold comes down in price? I don't know but I thought we got in this mess because they kept it artificially down for so long?

Joey,

Well, as it turns out, my idea yesterdat that gold was a good short at 850 was a really bad idea. Good thing I am out and did not trade it.

The rationale was (and still is) that the long gold trade is overloaded, ie, that everyone is trading this long side here. My experience @ HB&B tells me that sooner than later, without warning, gold prices will fall, thereby shaking the overleveraged players out, as margin calls start flying out to clients.

Of course that I am a gold bull here, do not get me wrong. But bull runs need "clean air", and for that to happen, then prices need to recede a little at some stage.

Anyway, a 850 short would have been a disgraceful trade, which would already have been stopped out, so maybe I am not calling it right this time.

As for equities, early trading in Europe seems to signal that the losses are diminishing, as the initial stresses start to calm down. If the broad equities market forms a little bottom by Monday, there may just be a cool long trade in equities for some time.

Cheers,

What the Fed Wants. What the Fed Has.

http://ronsen.blogspot.com/2008/01/what-fed-wants-what-fed-has.html

Hi again,

Well, gold actualy fell off a cliff this morning....seems like margin squeezing is about to start.

Espect another bull attempt today / tomorrow and that is probably it.

Still out: will only be trading on Monday. At that time I will probably open long positions over the broad market and short gold.

Lunchtime here in Europe!

Cheers

Greetings from the Amish Frozen Tundra.

Here are your Cara 100 Ratings Changes for this morning:

Upgrade:

GFI to Buy @ UBS

Downgrade:

SLW to Underperform @ RBC

Price Target Lowered:

BBBY - $40 > $30 @ UBS

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

Have a great and profitable day.