Oil in 2012: $200 or $50?

The US broad money supply by one measure has increased at an annual rate above 30% for most of this year. Maintained, that could triple prices within four years and oil would look moderate at US$200 a barrel, with gold hitting $2,000. Good sense by the US Fed and politicians might save the day, or a full-scale revolt by bond dealers

http://www.atimes.com/atimes/Global_Economy/JD30Dj02.html

Fried in the financial sun

Any thoughts that the decline in bank holdings of derivatives means all is now well can be thrown out the window when you consider just who exactly bankers are, and if you didn't already know who they are the latest interbank lending claims will tell you. Yet you still want to hold stocks? At a price-to-earnings ratio of 57 and climbing?

http://www.atimes.com/atimes/Global_Economy/JD30Dj01.html

Re: BOC Telegraphs Anti-Commodity Stance

Governor of the Bank Of Canada reveals that the commodity rise can't last, that its bound to see a correction:

http://watch.bnn.ca/#clip46269

Bump in treasury yields:

http://www.bankofcanada.ca/en/rates/tbill.html

Good morning.

There are NO Cara 100 Changes to report at this time.

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

Have a great day.

No slowdown for U.S. tech industry

In the past two weeks, eight of the top 20 IT vendors have reported better-than-expected earnings. These include Intel, IBM, Google, AT&T, Apple, EMC, EDS and Microsoft, which all beat Wall Street estimates of how they would fare in terms of revenue and profits during the first quarter.

``Globally, IT budgets for 2008 remain stable. The growth rates are slowing in the U.S., while there is accelerating growth in Europe and Asia Pacific,’’.

In the United States, corporate IT budgets will grow 2.3% this year, instead of the 3.1% rise predicted by Gartner in the fall of 2007.

"Tech is showing resilience for a couple of reasons,’’ says Mark McDonald, group vice president and head of research for Gartner Executive Programs. ``The nature of IT budgets has changed dramatically since 2001 and 2002. They are much more business based and business rationalized than in the past. . . . IT is not the target-rich environment for cost-cutting that it was before.

http://tinyurl.com/3vvdhh

regarding BOC comments,

i find it disturbing that a non-elected former exced from a massive US financial firm becomes the head of the BOC and proceeds to talk down our economy and speak of the fall of commodities while his co-conspirators in the US do what they can to talk up the state of the economy and the state of the financial landscape going forward.

canadians are seeing their largest export to their largest partner which makes up the lion's share of the value of our exported goods rising price wise and demand wise. in any other scenario it would be at the least supportive in light of a slow down in manufacturing.

allegedly our economies are linked w/ the USA yet their prospect for recovery is better than ours, and yet our realestate sector was as inflated as theirs so a crash isnt imminent, and our banks were more conservative and less exposed to sub-prime so their stocks should stop falling,

but lets cut rates and talk about how bad things are. barf.

edit: our realestate sector WASNT as inflated...

in my blind rage at the BOC this morning ive forgotten how to spell.

but not how to barf.

Am I the only one who is tired of trading these markets? Not only what Bill has so eloquently noted here about the way the table is tilted against us, it just wears you down watch such dislocations day in, day out.

The latest from U.S. homebuilders is most disturbing...

"Eli Broad, a philanthropist and co- founder of KB Home, the fifth-largest U.S. homebuilder by revenue, said he expects home prices to drop another 20 percent.

``I don't think we're anywhere near a bottom in housing,'' Broad told Bloomberg TV at the Milken Institute Conference in Beverly Hills, California. ``We're going to have a big inventory of unsold, unoccupied homes that's going to take three or four years to clear out.''

``People were using their home equity as really an ATM machine,'' Broad said, referring to an automated teller machine. ``They were spending more money than they were earning by taking equity out of their home. That couldn't go on indefinitely. We're now paying a price for that.''

http://tinyurl.com/5janj4

Good point, dr. cosa! I had a sympathy barf.

One of the things I felt was coming was that a general "takedown" was being orchestrated. If commodities correct sharply, as is being suggested, then everything corrects.

BTW, for those still suffering short-term with ESLR, here is a positive YouTube video:

http://www.youtube.com/watch?v=JFam12gydIo

Good morning everyone,

The 2 major questions on most people's minds are these...What will the bald bastard say tomorrow about the future of rate cuts and when will gold resume it's upmove. First of all, if the bald bastard does indeed signal an end to rate cuts it will, paradoxically be good for gold, which has, in the illogic of Wall Street, sold off in anticipation of the end of cuts. If, on the other hand, the bald bastard fails to indicate wether tomorrows cut is indeed the last one, then the malaise will continue in the PM's and probably, in the stock market in general.

PS: Apologies to the follically challenged, I just don't like central bankers, or any kind of bankers for that matter. We should kill them and take their stuff and eat their children, eh?

And the CountryWide catastrophe continues.

http://www.bloomberg.com/apps/news?pid=20601087&sid=a0ismP2Ew44M&refer=home

"Countrywide Chief Executive Officer Angelo Mozilo, 69, has said he's facing an informal U.S. inquiry into his stock sales. Mozilo has sold about $450 million of Countrywide shares during the past four years, according to the New York comptrollers' lawsuit."

vinod- like you, won't be gaming the FOMC decision (in fact, the DJIA/SPY/NDQ may well end up in trading ranges through the summer regardless of the decision)...setups that look good for longer holding periods: rising bond yields; china; and buying into a gold correction...

"Worst mistake in a generation"

http://online.wsj.com/article/SB120941300416350473.html

Not news here.

And home prices have fallen 12.7% YoY per Case-Shiller. So why not bid up home builders and banks?

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

Yipee!

As noted in the article, this sets a precedent. Precedent lasts longer than a generation.
So Ben has set the table for more of the same in the future....unless, as written in a previously linked article, he is forced to resign in disgrace in a bond dealer coup.

Bernanke = Arthur Burns 2.0

I meant to indict as illogical gold rising subsequent to the cessation of rate cuts, not to say that the selloff prior to was illogical.

Mr Spock ears

gold getting hit hard, gold shares even worse.

if gold is indeed set to fall towards $800,
i cant imagine where the shares will be.

the next 2 weeks or so are framing up to be one of the most trying for gold share investors.

the only good news is Jim Sinclair's daily refrain of $1600 + for gold long term and a few more weeks of weakness before a rise. i just dont see how gold will make a run in the current circumstances with everything seeming to be working against it. cut or no cut spin seems to be destined to claim a downfall, along w/ the guilt by association effect should commodities fall.

the masses may have been mislead into believing gold is a mere commodity and not money. who benefits? the powers that be that get their cake and eat it too with lower rates, a mere nod to fighting inflation and a dump in gold and commodities.

Re: BOC comments

IF they're taking an anti-commodity stance, the BOC favours depression rather than hyperinflation. As a matter of fact, its probable that JP Morgan's dishoarding of bullion through the UK markets via its StreetTracks ETF is setting up a price rise, rather than attempting to limit gold's advance.

The weakness of the technicals for gold are very obvious in the monthly chart and would seem that we have seen the last price surge for some time. But what is more glaring is the advance in oil prices. A correction may not occur before we reach ~$130. Why gold is not following in the wake of oil prices is puzzling, but not without the knowledge of dishoarding.

Recently, I sat in the pub watching the hockey game. I was hoping that the universe was placed back in order should the Canadiens advance to the Stanley Cup, but was thwarted in that hope. Oh well, there's always the rematch. I spend a good deal of time watching the commercials, as they are the best indicator of the extent of collective material hysteria. One commercial I had been watching is a "Crazy Ed" type commercial advertising the exchange of money for jewelery. Its and obvious pump with dancing girls and flashing hundreds of dollars on the screen. They have become very frequent during advertising spots, where they were only occasional during news hours. I am assuming that public dishoarding of precious metals keepsakes is finite.

So there seems to be a lot of dumping of precious metals on the markets at present. I assume that silver is coming out of mine supply as companies attempt to bolster bottom lines against currency depreciation.

I recall the comments from this article:

"Commodity inflation has always led to depression"

"These holders can use sales of gold to make it look as if money is worth more than everyone is guessing by releasing waves of gold such was we saw last spring and will see very soon. If 300 tons of gold hits the markets, it soaks up a lot of loot. BUT NOT IF THE SAME BANKS ARE ALSO OFFERING INFINITE LOANS WELL BELOW THE RATE OF INFLATION!

This is why I suspect, even if 2,000 tons of gold hits the markets this next year, it will only cause more people to take on more loans to buy this 'cheaper' gold and within a year, the inflation of the value of gold will redouble. This is why the only cure is to restrict the flow of money. In other words, to deliberately make for a depression."

http://www.commodityonline.com/news/topstory/newsdetails.php?id=6195&cont=1

So if the BOC was anti-commodity (a heresy in Canada) and they wanted to trip up commodity price advances, then they fully intend to pull the plug on lending. Either than, or use price controls of some sort.

Bernanke = William Miller - Lite !

2nd
We have two points of view here
Some trader is calling market to go higher with some bump in-between
Beside Housing and HB&B economy in Tech/mining/oil/and many sector is not bad
Job picture is not that bad

And some are calling for market to hit bottom once before moving higher

If FED cut rate oil will go higher and income of oil producing country will go up which they may invest in HB&H. so, basically our money through higher oil price will help HB&H. Instead of doing this way Fed should just give money to HB&H

Because lower interest rate has not lower mortgage rate but it is up
Lower rate has not help consumer
So. Why to lower it

Corporations don't vote.

People vote.

Lobbyists only get one vote, no matter how much money they have.

People have one vote, no matter how poor they are.

Bill, you're too cynical. I've been leading protests via fax, email, phone calls and recently direct action (http://www.fedup.org) over the last few months and slowly, over the span of about that six months, the sleepers are waking up.

The commentary from people in NY to the most recent crew - a bunch of patriots who showed up to carry signs and hand out leaflets right in front of Bear Stearns, JP Morgan, The Federal Reserve building and the NYSE were amazing.

Never give up.

Never surrender.

And never shut up.

Get involved Bill. This problem can be solved. Barney Frank is running into "problems" with pushback in his crazy handout campaign now, and its coming from citizens.

We the people can stop it.

You just have to care.

will buy MRK at 37.45

Even as a daily trading vehicle SKF is faulty. Presently: XLF = - 1.1%, SKF = + 1.1%

I think SKF and FXP are good to rent them for few hours or for a day

Vinod,

The low interest rates are only for the banks benefit. It lets them build their cash reserves. As a retiree it really hurt me when Greenspan set the rate at 1% and now it's getting me again with 2% rates as it reducedes the income I can get from my cash in the bank. Thankfully I own my home, cars and make no revolving credit payments whatsoever. I'm sitting on the sidelines in cash until this market corrects. I'll watch for the TOG patiently and only do very short term trades in the meantime.

BUsh is on TV right now, speaking defensively about "all we're doing for the people."

XAU- only 6% away from hitting Bill's first target of 158...

2n
is it time to get in DGP?

out MTK 37.30

This market is in a very shaky position.
Protect your self.

Pascal

http://www.effectivevolume.eu/content/Reports/MA_428.pdf

it should say MRK

not seeing a sell-off in the NDQ...anyone know how much of the DJIA drop is related to MRK?

vinod- eyeing CALM for an entry...what do you think?

CALM- scaling in at 29.37...

vinod- personally, i'm waiting for XAU 158...

CALM i will enter small, if goes down will add more

Not too long ago, there were some references in various sources with respect to the price of Gold and the price of Oil being linked together. Why not now? One answer, among many, is the possibility of a new War to be started in the near future. Follow my line of reasoning.

POG might go down if “Deep Pocket” party-faithful already have a clue as to when, and if, such a new war is planned and could easily be driving POG down to a good price for loading up, and purchases of Oil for storage and future use are driving up the price of Oil in ALL of its forms.

Rumors, and I hasten to repeat rumors, a while back suggested that May would be the month of possible onset for war. The timing of shortages of certain food items on the West Coast might feed into this line of thought.

Personally, I find it hard to believe that there could be any possibility of a new war effort any time soon. The realities of non-support and of non-resources certainly suggest that such an undertaking would be ill-advised <– ah, wait, there’s the problem.

In any case, I googled for some analysis on the possibility of a new war, possibly with Iran, and found this excellent, I think, analysis worth reading in entirety. The last paragraph sums it up pretty well:

“... In sum, while US-Israeli threats should not be underestimated, the situation as it stands seems to favour the protraction of a state of no-war, no-peace. Overall, the factors against war seem to outweigh the factors propelling towards war. But since when has logic had the upper hand in determining the behaviour of the Bush administration? It is perhaps again the unknown quantity of Bush and his neo-con allies that, above all, feeds the spectre of Gulf War IV”
– Galal Nassar in Al-Ahram Weekly On-Line
http://tinyurl.com/4o96hk

My comment: Never underestimate the determination of a fool, but don't bet your gold on it -- yet.

i agree spot,

there has been talk of an imminent war with iran for 2 years.

there have been skirmishes, like the recent shooting of a iranian boat by a US contractor but that alone is insufficient.

remember the British naval crew taken virtual hostage by the Iranians, the UK did virtually nothing accept eventually pull out of Iraq, a bygone when the full might of her majesty's sword would have made Iran think twice about broaching british naval interests.... things have changed.

unfortunately somehting much more serious may have to occur before any conflict escalates.

Good morning Bill,

In today's opener, you wrote "...a blog intended to discuss the impact of capital markets on social equity."

Allow me to turn your words around for a moment: 'the impact of social equity on capital markets'.

What triggered this word play is your impassioned support for the SEC's XBRL project you wrote about on April 18th. Faster, cheaper access to SEC filings is possible for us ordinary joes. Therein is a keystone of social equity, of levelling the playing field for us independent managers of capital in a world dominated by HB & B.
It's not going to loosen the tight reins of central banker control of the capital markets, but it may be a huge shift for all of us here, We the people.
Yes, the capital markets may well be open to everyone, but the information is usually not.

Thank you for your energy. I am constantly enlightened by the commentary here and inspired by your guidance.

Stu

[Bill Cara note: You are correct; the terms are interchangeable.

I suppose I was referring in this case to the negative impact on social equity where bankers have used the capital markets as weapons upon the people.

In turn, you are stating that that the people's needs and demands for social equity will sting the banking industry unless fundamental change quickly comes about.

Yes, there are many former bankers who are speaking out now in agreement.]

*****News Flash****

Swimmers were again cleared from a New Smyrna Beach Monday after a third swimmer in three days was bitten by a shark and treated at a hospital.

The latest victim was the ninth recorded shark bite of the year in Volusia County, putting the number of bites ahead of the record breaking "Year Of The Shark" in 2001, according to beach records.

"the protraction of a state of no-war, no-peace" sounds horribly Orwellian

The effect of the stronger dollar on oil and gold must be so desirable to the fed that at this point they must be really considering putting an end to all these cuts. It seems to be what the market wants now, the certainty of no more cuts and a backing off of oil and gold. Whaddaya think sportsfans?

"the protraction of a state of no-war, no-peace" sounds horribly Orwellian

Right on cyderman. It's direct quote from Trotsky. During 1917 Brest-Litovsk treaty negotiations he came up with bizarre idea "no peace, no war, and dismiss the army"

Every time I see Bush I am amazed again at how a country as great as the United States could have elevated such a incompetent mediocrity to this high office. He is a complete and utter embarrassment to the office and to the country.

Oh, yeah, and people like Genesis voted for him twice.

There is no suffering like having an idiot for a boss...or President.

And not to be outdone, did you all catch Hillary on her broom over Oz....skywriting..."Surrender Barrack"....

CALM- adding at 29.15..

I think the fed holds if the banks really are "out of the woods" so to speak. If he cuts in the face of 120 a barrel oil, that would mean we're right to assume that these banks and analysts were lying when they said the worst is over.

And if that's the case, watch out below because the equity market is coming down hard as the fantasy of a short recession comes crashing down.

I would also expect the dollar to tank and oil to hit 150 if he cuts. And I would also expect Gold to start surging again.

Rob.

#2sun,

Bush is by far the most successful American
President in half a century or more. Think about it. A nation's rightous desire for justice for the 911 attacks has been subverted into A bizarre, undeclared war, longer than WWII in it's duration, for no stated and definable purpose. Also, 20 million-plus Mexicans have swarmed over the border during the last 2 terms providing nice, compliant low wage labor as Bush refused to build a wall. Gas prices are (in great part resultant of the above-described war) at 4 bucks a gallon. We have a Supreme Court that is further to the right than the German Third Reich, no offense to the Jews, and a congress that is the best money can buy. We are, by design, descending into third world nation status, becoming a place where the masses will huddle in poverty and the few will live like the billionairs they are behind video security and razorwire. The dollar is soft enough to compete with the other third world currencies. The American working class (read your Marx) has been DESTROYED by 30-plus years of anti-labor government and corporate policies.

And you continue to question that Bush has been, by far, the most successful American President, maybe of all time? He's better than Nixon, the war has been much costlier. He's better than Reagan, The deficit spending has been much more profligate than under Reagan, thereby starving the so-called "beast", the fascist term for America's social safety net. This guy has set in motion events from which we probably never can recover as a leading nation, and you question his effectiveness? Two words bro...

.........Mission Accomplished!

Re: war.

The release of detailed intelligence on the alleged Syrian nuclear sight last week is suspicious to me. This intelligence must have been known for many months yet no one would confirm anything shortly after the strike. Why is it being released now?

Also, why is the Bush administration continuing to add to the strategic oil reserve at all time high prices in a recession?

Moab,

The answer to your last question is that this administration has done everything possible to raise the price of oil. They're Houston oilmen, right?

Strategery?

moab, maybe they think (know!) oil prices are going higher, whatever the reason.

If you go to war for oil and it isn't so successful resulting in high inflation and $4 gas, the natural progression for greedy pigs is to blame supply and use it as an excuse to want to drill all over the place. You know, neat and clean and only the size of a postage stamp....all the same lies you hear each time...

Just look how nice those "environmentally friendly" methods are doing in places like New Mexico where the water tables are all polluted with oil by-products from such abuses. Even Republican ranchers are fighting now.

Their greed knows no limit.

CMG:
http://tinyurl.com/3osecv

CMG just broke the powerful support/resistance/round number level of 100.

Do I even need to add the break is to the downside?

That's 20 (17% or 18% or so?) bucks of price movement since it released it's dubious earnings report last week.

This fat and salt laden 'healthy' burrito shop STILL trades at 44x earnings.

Support at 95. The easy money on this last little move is gone. I hope the support at 95 holds and it reloads back up to 110. It's got an irrational following that will push it back up.

I posted last summer that this would be a gift that keeps on giving, all the way down.

Unless there is a complete breakdown below 90, I'm looking for a tradable channel to set up somwewhere in that 90-120 range. Probably between 95 and 110.

Selling short-term hope (calls) at a strike that is never going to come, at appropriate technical points in the underlying, will be rewarded.

DavidV

Looking forward to McEwen's email.
I figure in the mean time, I better set a
stop loss for UXG [@0.01].

Today's low 1.96 Ouch!

My take is that if you are going to war you would want to have a large amount of oil in inventory. I find it incomprehensible that they would want to pump up the price of oil for personal gain but anything is possible with these people.

Dennis Gartman just took gold out back and shot it.

UXG/WGW/NOT.v-> could do worse than start buying at these prices...taking 20% allotments here...

David/QT- do you have a strategy for exiting FXP in the event a change in Fed policy sparks a rally? stop loss at least, right?

vinod- nice spike in SMN...still holding, right..

Silver - buy the metal? or silver stocks?

http://tinyurl.com/559h39

QT: I have cc'd Ian Ball (someone who works at McEwen capital) in my message to Rob and he responded today saying that my message was forwarded to Rob. So we may get a response soon! In the meantime, I think I'll use your stop loss at $0.01! :)

DavidV

FSLR earnings tomorrow pre-market - I am wondering if they can keep the momentum required to maintain this amazing $20B+ market cap?

Pres Bush said today that the high price of oil is due to Congress not opening up Alaska to new drilling for oil. Shame on Congress! (not)

http://tinyurl.com/3v4ayv

gold/silver corrections are fast (eg, august 2007)-> sharp drop following a surprise rate increase could easily come and go within a day...

Jock.
Silver Wheaton down 9% today so far.. !!!

2nd_ave: I am actually leaning toward selling FXP today and rotating the funds into SLW (I have enough juniors as it is and I think I need to give more weight to seniors in my portfolio). This way, if the Fed cuts rates as expected (0.5%) and issues a mild statement, then all stocks will rally including SLW. If the Fed makes a smaller cut than expected (only 0.25%) and/or issues a pessimistic statement (which I think is the more likely outcome), then all stocks collapse and I'll get a good chance to exit SKF I have been buying on the way down (last purchase at $98 with a sell limit at $106).

DavidV

Silver Wheaton is now oversold daily and weekly with a 9% collapse today. I'm starting to get interested but hoping for under $12.

It is always surprising to me to see how badly the PM miners get whacked.

David- sounds good...you'd be selling one on (very relative) strength, and buying the other on severe weakness, which usually gives you a nice buffer...

Re: SLW

Silver Wheaton reported record earnings yesterday, though insider selling totals ~$8m. for the year.

Looking at dollar performance, the $USD is hovering around the 13-week EMA. Silver very volatile, silver leases continue into the negative.

No reports on ETF dishoarding in silver, though mine production has increased in all sectors, silver is a likely by-product.

2nd

My FXP exit strategy is to wait and sell into strength. I got hammered when FXP took that sudden 8pt drop a few days ago. I made a mistake by not setting the proper stops. I set a Stop Limit and it blew right by it.

DavidV

Ok fellow, if I don't hear from you I will see you at the bottom! :-)

QT- understood...i'm just putting out the possibility that you may not get the strength you're looking for...if shanghai bottomed in march, then it would be difficult to see an exit above your basis this summer, in which case there may be better places to put your money...if you get the strength you're looking for tomorrow, i would take it...if not, would still think about exiting...

Does anyone know of a site that lists the main characteristics of junior 'early' or 'near production' miners in a single page? I am looking for a simple snapshot of:

- current/near production and future production estimates
- confirmed resources
- no. of shares/market cap
- any cost info

If such does not exist, would people be interested in helping me build such a simple list. You could submit 3 or 4 of your favorite miners. The information can be easily built and made public with Google tools.

Example: GIX, WGI, ECU, SGR

Well, I just bought 1000 shares of SLW, setting sell limit for 500 shares at $13.99 and for the other 500 shares at $14.99. As for FXP, I am thinking that since I probably won't get a chance to sell it at $66+ today, and since I think the market will go down tomorrow, then the logical action consistent with my state of information is to hold FXP until tomorrow. If I see the market rally at 2:15 ET, then I'll just sell it at that moment with no regrets and treat it as a learning opportunity on taking losses.

DavidV

2nd

What you say is true. But on the other hand I could lose even more by making a bad trade some where else. I will be patient. This market should correct at least some what. The month of May tends to be a down month for the market. Also I keep hearing about a period of volatility is expected to come back into the market. That will be my out.

SiO2 - comparing juniors

Have you seen this site, which compares juniors' deposits as recognized in market caps:

http://tinyurl.com/39bg9n

I can't vouch for the site's accuracy or honesty, but an interesting approach.

FSLR was, to me, an obvious technical trade, 210-280. It's done.

I posted FSLR was waiting to breakout well before it did. Once that huge, fat 3 months symmetrical triangle broke out, and the move completed, FSLR was dead to me.

The move was an obvious technical trade. It's over. Move on. Next trade. Love the move, not the name.

IMO.

BTW, the last 15 bucks of the recent FSLR move was on top of all sorts of bearish divergences. MACD, STO, RSI, volume, all diverging. None of it supports the move from 270-300.

Don't believe a random Internet idiot like me, that's for sure. Check the chart.

In a barely related and irrelevant note: who will want to buy FSLR shares that does not already have some or already sold theirs? I'm just asking....

But I bet plenty of dreamers want to buy those FAT April 320 or 310 calls for 9.30 or 11.70.

Today's News

Down On the Farm

Some farmers are waiting for mother nature to dry up and warm up, as spring planting has been delayed. Farmers must make planting decisions for the season..what to plant and how much. One farmer said tillage fuel costs have risen 3-4x from $500 per acre to nearly $2000 per acre. Fertilizer and seed and chemical prices have skyrocketed. Minimum wages are set to rise this summer and problems with immigrant labor are creating new pressures on operations. Have conditions in the financial markets affected farmers access to credit? If the farmer is tilling a thousand acres,the tillage investment increases from $500k to $2 mil. Hedging costs have also risen. The planting decision is not easy for many. Crop estimates are just guesses... the farmer will make the end decision and mother nature will complete the task, for better or worse.

Srategic Petroleum Reserve

BUSH says filling the SPR is one tenth of one percent of daily US oil comsumption. It's a non issue with him and he stated he is obligated to fill the SPR to protect the United States. Other politicians are seeking to make a big issue about it.

Consumer Distress

A domestic utility reported yesterday said 17% of its accounts were deliquent and disconnections were running at over 600 per day now that the winter ban had been lifted.

Er, May FSLR calls, I meant to say.

SiO2 - juniors, btw

Don't forget Bill's post of a couple of days ago, as to how juniors' shares get crushed when markets turn bad. Personally, I'm only buying at or below the weekly bollinger band, or where trading volume allows for a stop likely to be executed near my target.

SiO2
I am using resourcestockguide.com. They have most of the information
you are looking for, plus a lot of other useful company valuation
data.

MikeNYC - thanks for your take on FSLR

Bernanke = Monty Burns... ;0)

Thanks Jock, that's pretty good info. Two of the companies I mentioned are not there but it has quite a few companies listed. Thx. a lot for the lead. As for stocks getting crushed, yes, I am just getting ready.

Sold out of MS Jul 50 puts with small profit; in yesterday at 3.30, out today at 3.90.

Still maintaining AUY July 17 1/2 calls (yeah, right), hoping for a push up before I throw in the towel.

Other than that into all cash with Fed and UST money market funds...5% physical metals...small options trades against the banks and financials, that's the only way I see to play this market...

Best of luck with your trades.

Re: Junior PM

I would say that if your junior PM has a long term chart, use fibonacci to determine the next level of support/resistance as a departure point to determine a buy-in.

But also be careful of stocks which have already had a spectacular run up in prior years due to speculation or popularity.

The release of detailed intelligence on the alleged Syrian nuclear sight last week is suspicious to me. This intelligence must have been known for many months yet no one would confirm anything shortly after the strike. Why is it being released now?
Posted by: moab at April 29, 2008 1:44 PM

To allow time to extract the source who provided photos inside the nuclear facility.

20% of SLW @ 12.74...

Looks like the markets get a bit asthmatic btwn 3 - 4 PM lately.

2nd, QT, I bought about 2000 shares of FXP at an average price of about 77 and watched it drop from there. However, I'm going to hold til the next Black Swan causes a sudden panic. It seems to me that with all the negative indicators and news, and persistent evidence of recession, the Chinese market is going to drop along with the US correction. I'm willing to wait and risk an Olympic rally in the China markets. If the overall backdrop weren't so bearish, I never would have taken this kind of position....selling on the heels of this recent rally doen't make sense to me....

How reliable is TA when applied to gold?

Spot is at $868.80. Colin Twiggs says:

"headed for a test of medium-term support at $870. Failure would signal a test of primary support at $775"

goldbriefing has fib 38.2% @ $888.06.

So some key technical levels have failed.

Do we now test fib 50%, or CT's primary support at $775?

Anyone care to comment?

Analysis of those photos (Syrian Nuke Plant), by those who do this sort of thing for a living, show some characteristic details of image manipulation...who knows why... but the whole story smells funny in its current incarnation. I don't know if we will get a war, but I would place odds of getting one extremely high.... the people driving for one have planned it for at least two generations. They were able to get us this far... I am betting they won't stop for something as inconsequential as public opinnion.

As far as the logic of such a war, to understand this you must understand a puzzle of mostly hidden history as well as a sordid brotherhood of international mafiosa. Fiat money represents power. It is not innately powerfully. THese people dont care about money... they care about power. To hell with the economy and public opinion; if they think it serves their agenda and increases their power base, they will gladly damn the entire world to a third world living status.
I do not underestimate the lengths to which they will go, no matter how seemingly irresponsible or illogical their acts might seem, and I would suggest that none of you discount them lightly either.

My $.02

allen- obviously, hoping you have a 7-figure portfolio and bet a reasonable percentage on the trade...;)

allen

Have you been looking over my shoulder? I bought the same amount of shares based on the same thinking. Watched it climbed to 84.xx but held off from selling expecting it to rise even more. Then the bottom dropped out. Ouch!

We'll ride this one out together.

2nd, let's just say that I sleep fine at night, and this position wouldn't wipe me out if I'm wrong. The bearish backdrop gives me hope (although I sympathize with those who lose if I'm right....) The rest, except for a bit of GXEXF.PK and NOT.V, is in cash....

allen: have you read my yesterday's posts about the long-term behavior of FXP? If FXI will oscillate around the current levels, then FXP will steadily decline. Just letting you know that maybe it is safer to hold a short in FXI rather than FXP long-term.

DavidV

Allen: are you on Skype? we can show you charts and timing better than words..if you like....?

QT, this was one of those market fakes, where we think we understand a pattern, but we're both wrong and outfoxed by the combination of the general rally and the tax reduction. Let's hope we're right that the dismal economic picture will rescue a dumb trade.

P/S..looking to add FXP...:) sorry Vinod..no margin on SSEc..not even a rumor of it from the brokers out there..maybe they can proliferate checking accounts for individuals first...

allen, QT: if you plan to hold FXP long-term, then I think in almost all cases it will be more profitable for you to sell your position incrementally down to 1/2 of it when FXP rises and buy back incrementally when FXP falls. This way you will make money both on the long-term FXP trend (if you are right about it) and also on all the local volatility (which may give you a bigger gain than what you get from holding you core position long-term). That is, if you decide to hold ALL your shares long-term, then you are making a statement that you are smarter than most other FXP players and know better what will happen. The market has taught quickly me that my long-term guessing skills are average at best and I should not count on them. However, no one can take volatility away from the market, and making money on volatility is a sure thing. It worked great for me so far with all the holdings I dedicated as long-term -- I've been buying incrementally on the way down and selling on the way up, and as a result have significantly reduced my cost basis.

DavidV

I don't remember who originally brought it up, but I have been following Arctic Glacier for a while now. If you want to see a definition of price divergence, take a look (agun.to / AGUNF). Plus it is currently paying a dividend yielding 13.5%, paid on a monthly basis.

I picked some up today a bit over 8, so take that as my biased disclaimer.

In other news, I have been working on a system for timing sectors/industries that I have been running through the paces with small real-time trades. It is for those trading on a 3-week to 3-month timeframe for the most part. I recently got me into DUG around 30 (not as good as most of the day-traders here) but good so far. Gold has entered an area where it has traditionally turned, so I would be drawing my trendline and waiting for an upward break. That doesn't mean it doesn't go lower from here, but on an upward break of the trendline over the past few weeks, I will be buying. (What I call my index of suspicion is running at -150 meaning I am not suspicious of buying right now. The last few intermediate term bottoms have been put in around -120 to -140, but I have seen it down around -250 over the last few years.) Do you own DD!

Karl

EEMTRADER and David, thanks for your note. I'm not on Skype and can't get on for a while. I'll reread your previous posts where you discussed this. Interesting suggestion to liquidate FXP and short FXI. I guess my strategy probably relies too much on the Black Swan sailing in to save the day....

allen

"this was one of those market fakes, where we think we understand a pattern, but we're both wrong and outfoxed by the combination of the general rally"

I agree with you. But nobody saw this rally coming, especially when it jumped over 400pts in one day. And yet with all the bad news everything is up, up and away. Like a lot of the posts here suggests this market appears to be manipulated.

Stay firm, if and when volatility hits what a difference a day can make.

Allen has balls of steel

DavidV

Good advice! That was my plan from the start. To sell into strenght and then buy the big dips and work my way out of this mess. But I'm also looking for volatility to come into play. Which will just speed things up.

Now if I can just get you to get this UXG to move up for us al would be good.

2nd ave-

initiated position in SLW after the good earnings announcement....we'll see how the mkt reacts to the fed news tomorrow.

Valleyrat - TA, like beauty, is in the eye of the beholder. I'm always amazed at how different TA packages - supposedly using the same parameters on the same indicators - show different values. Telecharts says wait, while Tradestation says buy!

TA's NOT science. So, the only thing to do is develop your own style, and follow it consistently. I can't understand how people draw such fine trendlines, and believe they MUST not be violated. If they are violated, even once, even for a few minutes, prospects change. Really?

Goes without saying that the indicators people choose to emphasize are also their own choices. Gold may just test everybody's favorite "support level" - unless it doesn't!

It may even test Fibonnaci's - although he died about 750 years ago, LONG before the invention of financial markets! LOL

I think people long for certainty and predictability, and through TA people try to convince themselves they're standing on solid ground.

But it's not that kind of world; it's an uncertain, probabilistic world -- not solid ground, rather more like a lake on which swim "black swans" more numerous than the "normal distribution" would allow ..

Sharky, it's just that it's not so large a position for me to get freaked out. As I said, most of the rest of the pot is in cash...and land.

Actually, I have made almost as much as I lost on FXP over the past few months (all ST gains; April 15th was an unexpected disaster this year). This time the position size got bigger than normal because I thought I was Mr. Smart Guy. Shows the value of position sizing, and probably stops, which I didn't use.

Karl, what is your take on the antitrust investigation or Arctic Glacier?

Jock, well said. I am also puzzled by the use of TA for things like commodities, oil, natural gas, and so on (unless driven by speculators)

Federal Reserve policymakers will discuss paying interest on bank reserves in a closed door meeting on Wednesday. Such a move could in theory allow the Fed to expand its liquidity support operations without limit.

But at times of financial market stress, the ability to pay interest on reserves takes on added significance. Currently, the Fed cannot expand or contract its balance sheet without altering the overall supply of reserves and changing its main policy rate, the Fed funds rate.

All it can do is change the composition of its balance sheet – absorbing more duration risk, liquidity risk or credit risk from the private sector.

But if the Fed was able to pay interest on deposits, it could use that rate to put a floor under the Fed funds rate.

That would free the US central bank to conduct liquidity operations that were larger than the size of its current balance sheet – roughly $800bn.

“The point...would be to allow the Fed to expand its balance sheet without having to drive the fed funds rate to zero in the process,” said Goldman Sachs.

http://tinyurl.com/63usve

SiO2,

My understanding is that the antitrust investigation is more about the texas-based ice distributor (whose name eludes me right now) and that AG is simply going with the investigation. My view is that the stock is priced for nearly the worst-case right now, and while the investigation could take several years to work through, I would be making 13% dividends. They are groing revenue and profit quickly, and I don't feel that ice is particularly price elastic. If you are going to have a BBQ, you need to keep the drinks cold whether that takes you $5 or $6. Assuming that the dividend holds up (and looking at last quarter financials it looks like it should) I feel it is safe.

Karl

Market commentary Tuesday by Bill Gross over at PIMCO argues that home prices are what matters most going forward, and backs a proposal by Congressional Democrats that would serve to prop up home prices under logic that says further price declines must be avoided:

The better alternative is to initiate a limited mark-to-market write-down of private mortgage debt as envisioned in the Dodd-Frank Congressional proposal combined with government-subsidized loans at below market rates. Look at it this way: you can allow a home to fall in price from $400,000 to $300,000 and force an upside-down “short sale” foreclosure, or you can reduce the homeowners’ $400,000 mortgage to $350,000, refinance the loan through the FHA at 4% and stabilize the neighborhood and its home prices.

allen/QT/(David)- David makes a good point about trading your way out of an underwater position...

other strategies would include selling (out of the money) calls against your position, rolling them over each month, and within 3 months bring your basis down significantly, maybe even put you in the green with no change in the original position...alternatively, could try to speed up the process by selling calls to open on strength/buying to close on weakness...

re Strategic Petroleum Reserve: No idea if this is valid or not but this article says the US guarantees Israels steady oil supply even it it means a US shortage. Agreement from the 70s ..

http://www.wakeupfromyourslumber.com/node/4504

re gold, I put a low GG bid at 31 following Bill's post of a few weeks ago. Anyone else looking at that trade?

re TOG: Are many still waiting on that? Talk of possible fed raising makes me worry the high in bond prices might be behind us

re ToG->

the exact sequence of events has always been a little murky (at least to me), but then most trades with great profit potential are by nature unclear (o/w, everyone would be connecting the dots)...i think bill's original premise was the possibility of an emergency cut in rates to zero, which would then price bonds at the maximum allowable limit, at which point you short bonds-> this may still occur (based on earlier comments, maybe in october)...however, if the FOMC holds/raises/signals either tomorrow, then i think a (separate) short bond trade is in play, which would have stared in mid-March with the flight to safety...either way, half the ToG is based on shorting bonds in a rising rates scenario, and in the end i don't know if it really matters what leads to the opportunity or when it occurs-> bottom line is whether you act when you make that (less than clearly defined) call for yourself...

the other half is buying gold when it corrects...does anyone know why it's correcting right now-> again, what matters is making the trade when you judge it presents a decent buying opportunity, regardless of whether the reasons behind the opportunity play according to script...

all JMHO...

in other words, it may be a three-act play, and already underway...

It appears the inevitable wave of Wall Street lawsuits are beginning to trickle in...

"Citigroup plans to offer compensation to investors in a pair of its hedge funds in an effort to hold on to some of its top retail brokerage customers and head off a flurry of lawsuits.

The hedge funds, one in the Falcon family and the other in the ASTA/MAT family, are down 75% and 90%, respectively, The Wall Street Journal reports. At least one investor has already sued the firm, while a south Florida law firm has also filed suit, seeking class-action status.

The decision to bail out some investors reportedly comes after weeks of rancorous internal debate."

http://tinyurl.com/4p6o2j

from Skype Cara China:

[6:52:49 PM] nvr2fast says: in case you didn't know, www.aastocks.com/eng/ is one of the better HK sites for news

2nd, QT, allen,

Just few points in consideration to FXP.

This is form a investment newsletter I subscribe to.

>>
The reason for the charge is now clear. China cut the turnover tax on stock trading by 2/3 to 0.1% from 0.3%. The tax was tripled a year ago to try to discourage speculation, but with the indexes now down close to 50%, China wants to encourage speculation again.

There are 1.4 billion Chinese waiting for a chance to get back into stocks. I do not want to stand in their way.

Moreover, there may well be further measures to encourage the stock markets of Shenzhen and Shanghai in the run-up to the Olympics. No time to be short, to say nothing of double-short.
<<

Best,

more Cara China:

[7:29:52 PM] 2nd_ave says: do you have a link to a real-time/almost real-time (public) site for A shares?
[7:30:07 PM] nvr2fast says: http://www.sse.com.cn/sseportal/en_us/ps/md/sh_b_qci.jsp

AZtock- if Beijing really wants to encourage speculation-> margin accounts now under consideration may well be the ace up their sleeve if they need one...

2nd Ave unless you have proof of Margin account under consideration by the Chinese Government..please do not spread rumors...or you are doing everyone a disservice..do you have proof...? add credibility or destroy your own.

[7:21:14 PM] 2nd_ave says: price of rice in HK-> up or flat?
[7:21:53 PM] nvr2fast says: trending up slightly, beef/chicken up significantly.
[7:22:02 PM] nvr2fast says: lots of stuff up lately.
[7:22:23 PM] nvr2fast says: hasn't impacted general goods yet like cloth/materials but will be any time since these things come from china mostly.
[7:22:49 PM] nvr2fast says: it hasn't fully hit HK ppl that they're paying more now ... but the factory bosses see it already ,and general ppl will see it soon too
[7:23:15 PM] nvr2fast says: fact that HKD pegged to USD means that HK stocks are getting better value just by sitting there doing nothing special

I guess the last train on the roller coaster went over the peak today.

EEMt-

http://tinyurl.com/6dccqb

excerpt:

"HSBC Securities said in a new research note that last week's cut in stamp duty from 0.3% to 0.1% on A-shares is not a market bailout. Rather, it puts in place a stronger foundation for equities to move higher -- that is, along with measures to keep non-tradable shares off the market and new plans to introduce margin lending."

one of the cara bloggers is looking for 'confirmation' that margin accounts are under consideration...
[8:00:39 PM] nvr2fast says: i've read about it in the south china morning post as well... they're considering it.

"add credibility or destroy your own."

Posted by: EEMTRADER [TypeKey Profile Page] at April 29, 2008 10:46 PM [link]

can we keep it civil please?

2nd Ave As long as this site is about the truth..lets not talk any market up or down..can we have the truth please as well?

EEMt- my comments have NO effect on the market...simply passing along what's out there, along with my interpretations and guesses-> and that's all they are, guesses..i don't pretend to be a guru or a professional trader, nor am i selling anything...blogging is all about opinions- you have yours, and i have mine...

btw, what is the truth?

one's perception of any event or 'fact' is under a million influences- emotion, past experience, education, culture, mood, the people around you, music, controlled substances, you get the picture...the market is manipulated enough as it is-> add your own biases, and no two people will ever perceive things the same way...

"whats the truth" you actually can ask that?

Sharing/quoting sources with links, publicly available information always works..thats something I can forward to someone if I hear conflicting information...

Quoting anonymous bloggers doesnt work as well... how is that glass of wine?

It sure was peaceful during vacation season.....
Can we please zip up the pissing contest?

If readers can't discuss their OPINION then what exactly is the point? When it goes from discussing opinion to harassing posters then it has crossed the line.

If you can provide reliable information to counter a post on China margin or any topic then information is your target...not people. It's then your duty to provide opposing information, not personal attacks. That is the nature of mature debate.

As it is there is plenty of information available indicating China may test the upper trend channel. It might be margin or it might just be the tape, but it's as good a point as any to discuss.
http://tinyurl.com/5f4uus

If you disagree, take the other side of the trade and brag if you're right. No one will have any trouble hearing that. But, if you have a personal issue with another lister, please keep it to yourself or work it out offline with an anger management therapist.

Craig : I just forwarded that link shared here to my broker to find out whats up....thats why links are useful. Vetting out the truth, to the degree its possible, is all part of due diligence.... helps trading....how are you doing? Life going well?

Hey guys,

2nd Ave has a lot of credibility with me. If he posts something, I know that he's in ernest and is not disseminating fiction. And he doesn't even fool around and write crazy stuff like I do:)

Ah, I'm good. It's good you have someone to bounce some of this stuff off of. I've found there's always a few well intentioned folks with a couple good hints, not a shred of truth though. It's the nature of markets with buyers and sellers. If there is an angel telling me to buy you can be sure there is also a devil nearby telling me with equal proof it's time to sell.

Trouble is, sooner or later they usually both end up being right.

Agree...I have many bloggers here to thank MichaelId for DRYS, Vinod for IBN, Moab for BSC,SiO2 for shwoing me an alternative to add to day trading. Bill himself for introducing me to SLW and RGLD, I have had more than my fair share of good fortune on this site.

Takes only one credible source to dispel rumor and fear...like how counterparty risk was handled on this blog by a credible source re Proshares.

Just would like to see more credible sources post...more nuggets..thats all.

HAppy Trading..another gorgeous day in Hawaii.Aloha !

It is my opinion that PIMCO's Bill Gross in conjunction with Barney Frank and a few other "moderates" are laying the ground work for the "New American Economy." It is not new though; It's a fascist economy based on Mssolini's model.
"Stave-off falling home prices," he says. And the congresman is already preparing legislation which, (wild guess on my part), will have the unhindered and wild support of everyone--EVERYONE. Democrats and Republicans. Who could oppose it? We can't go wrong, we can't fail. God forbid that Bill Gross should have big lossess. If he lossess, America lossess. I'm surprised I didn't see more commentary and play about this on this blog as I think it is very important.

Craig: "information is the target, not people" Amen.

EEM: U another Hawaiian? Including Kaimu that makes at least 3 Caraistas from HI. I bet you're even an acredited investor, as Bill calls it. I'm jealous.
..Jeez it's lonely being unacredited, unqualified, sidelined, and waiting for ToG from the middle of podunk, USA

2nd: thx for the ToG update. Looking like the gold trade may come before 0%, but if the current spin is to be believed this may in fact be the last fed cut

Barry Ritholtz calls out Bernanke...and more.

http://tinyurl.com/67bbev

EEMt- would appreciate hearing what your broker has to say about the link...glass of wine was good...yours? ;)

JR- LOL, for 15 years your phone was probably ringing off the hook and you were working 18 hour days...why not enjoy being a 'lonely' homebuilder for awhile before it all starts again?

A must-view Video.

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

Even though he voted for that dunce Bush two times, strong kudos to Genesis for being a leader of this protest.