ESRL- transcript of conference call:

http://tinyurl.com/48yagp

whatever they didn't like about it yesterday has reversed today...see no reason to want to sell this stock right now..

sorry-> ESLR (not ESRL)...

craig- no rush to jump in, right...the greatly unanticipated break of 12800 may lead to panic covering, which only gains momentum if we head towards 13000-> "sitting tight when you're right" applies to waiting for entries also...

(jogyp- congrats on your prescient +400 call)...

Dr cosa,

Re PoG: As mentioned yesterday, this move in PoG is not surprising, for the reasons mentioned at the time.

I see no upside now, and am waiting for the price to come to me at around 770 / 800, with a first stop around 850.

This will take several days to unfold, I guess.

Please do not trade on this, this is just an opinion. DYODD.

Cheers!

Todays Gap List (updated every 15 mins): http://tinyurl.com/4h576p

craig- FXP-> note that shanghai has been cut in half since last october...FXP is clearly a trading vehicle only, not inclined to hold for any length of time...

g52-

re TOG- would be ironic if we get to play the short bond trade twice-> yields may strengthen from here as both the USD/broad market rise (along with shanghai back to 5000+ in time for opening ceremonies)->would be selling RRPIX/DXKSX into summer strength...it's clear they can easily "postpone" the ultimate hit to financials until late fall-> at which point emergency rate cuts allow you to reopen positions in both...

QID with a 43 handle...

2nd

So you don't see the correction to 10000/2000 that Bill spoke of as happening anytime soon?

selling BA pre-market...leaves just NWA in the "air transport" trade...

I would like to get an idea as to why some companies can miss earnings, post large write downs and still have their stock price rise. Is this market being manipulated?

QT- no one knows...we tend to get everything we look for when we're not looking for it/stop looking for it (in life, love and the markets, right ;)-> there was so little interest in airlines/technology/home finance/china last friday/this monday that buying all 4 appeared to be "low risk..."

now that we've rallied to 12800, i think the "low risk" call is for it to continue on to 13000 on the strength of short-covering....beyond that, who knows...

Good Morning.

Here are your Cara 100 Ratings Changes:

Upgrades:

GOOG - to In Line @ Fox Pitt
GOOG - to Buy @ Jefferies & Co.

Downgrades:

GSK - to Underweight @ JP Morgan
NOK - to Underweight @ JP Morgan
NOK - to Neutral @ UBS

New Coverage:

CSCO - Buy @ Lazard Capital
GRMN - Equal Weight @ Lehman Bros.

Target Price Raised:

GOOG - $530 to $550 @ RBC
GOOG - $600 to $620 @ Oppenheimer
GOOG - $580 to $620 @ Lehman bros.

Target Price Lowered:

NOK - $40 to $36 @ Lehman Bros.

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

Have a great day and a better weekend.

2nd

So I take it you are still considering this a bear market. Sorry I guess I miss read your earlier post.

stonecrest-> let me direct you to vad graifer's 3/16/08 post: http://www.realitytrader.com/blog/

my own feeling on gold right now is that it likely will suffer from multiple points:

oil settling down from its highs eventually taking everythig down with it, (yet somehow its high oil costs that hamper gold miners, when oil gets cheap they still fall, its loose loose)

and jawboning by the federal reserve who will get their cake and eat it too for a short while, dropping rates in the upcoming months with strong rhetoric that future cuts are unlikely, having the effect of providing stimulis via lower rates while supporting the dollar w/ forward looking statments that will crunch gold and commodities.

though eventually should they begin raising rates, i dont fully understand how gold will resume its upward run.

anyone have a better grasp of this?

I still think this is all the big traders running the market up into options expiration. Next week will be the tell.

There still aren't any companies out there that
have reported solid growth in earnings from the US except General Mills and JNJ.

Look at GOOG's results everyone is so hyped about

"International markets accounted for 51 percent of Google's revenue in an expansion that was accentuated by the weak dollar. Google said its revenue would have been about $202 million lower if the dollar's value hadn't declined so dramatically from the first quarter of 2007."

And they only beat revenues by 100Million.

I haven't looked at CAT and HON yet but I'll bet they show similiar gains on the back of the dollar.

I hope they do run it to 13K. It will be that much easier to short at that level.

And I say again, if everything is so great in Bankland then why is Libor up again today? 1-month 2.87 and 3-month 2.91. That's up from 2.7 and 2.71 on Monday.

This increases payments on almost everything and as I pointed out yesterday, the days of 0.0% credit is over unless you're friends of the FED. So, anyone carrying credit card balances that can't pay them will get hit with higher payments and higher interest rates. That's not even to mention the option ARM's or Auto loans that will reset higher with LIBOR climbing.

I'm not buying into their trap.

Rob.

Hope no one has already posted this link ,

Mr Mortgage - Here comes the ALT-A crisis.

http://tinyurl.com/3hlt6k

Was an eyeopener for me, cheers, John

Good Morning,

On March 6, the fed was about to cut and many people on this blog (though not Bill) were looking north vis a vis the price of gold. Talk was of $1500, $2000 gold.

On March 6 I wrote "A peek into the future if I might. Gold, IMHO will have a darn difficult time reaching the spectacular price targets for two simple reasons. First, most of the bulls are already on board. Secondly, I would be surprised if Bernanke is allowed to pursue his inflate-at-all-costs strategy....I also feel that in addition to those things, $1000 represents, to put it gently, a significant psychological barrier....What I'm trying to say is, you'd be nuts to pay $1000 an ounce for gold."

The reaction from you guys was, predictably, swift and strongly opposed.

"See you at $1200" said my friend Mike.

"Good Luck! I wonder how it is you are so sure?" asked the wise and contemplative Kaimu.

Truth is, I wasn't SURE, this isn't a "sure" business. But now, it seems the writing is really on the wall and that the gold market is anticipating a time, after Bush, after Bernanke prehaps, a time of dollar strength and higher rates. The difficult thing about this business is, just when you've got it all figured out, the game changes. I hope you all have a fabulous day, and a big shout-out to our patron and leader, Bill Cara.

chris (shark)- i remember your call for $800 gold last fall...hope to see it again ;)

jogyp- strong open pending in SIGM...

2nd

i know you guys are expecting market to go up to
1300.
but you never know it may be down by dayend
this is expiration Friday

OIL:

Mideast increasingly consumes its own oil, prices rise

Saudi Arabia, Kuwait, Oman, Qatar, Bahrain and the United Arab Emirates — have grown at a 7 percent annual clip since 2002. They are consuming about as much oil as China, whose thirst for oil frequently gets the blame for tight global supplies.

Lehman's Robinson expects that after this summer, oil prices may fall back as more supplies become available. He believes prices could fall by $30 a barrel, which could return gasoline to $2.50 a gallon or less.

http://www.mcclatchydc.com/227/story/34056.html

Fortis metals monthly Report

April 2008

Gold, silver, platinum, palladium, aluminium, copper, nickel, lead & zinc, tin, plastics, steel.

http://www.virtualmetals.co.uk/pdf/FEM0804.pdf

vinod- that's why we're looking for entries into QID/SKF/FXP-> nothing goes up in a straight line...

2nd
I am also looking at QID/SKF/SMN
no to DUG and China is already down a lot
i am not sure about FXP

Alex Elder -

sees weekly S&P, DOW as bullish per the "impulse system". If S&P closes and holds over 1390, it faces short-covering, 3-4 months of gain. With Euro gains moderating, he wondered whether curency intervention is coming or underway.

IMHO, this is NOT incompatible with Bill's larger, longer-term fundamentally-based alerts.

[Bill Cara note: I agree Jock. The US equity market is in a short-term bullish correction of the Bear market. It will be supported by a stronger USD, and falling commodity prices, I believe. I now believe that the next major downswing will be more likely in July or October, following a continuous stream of negative macro-economic data and the beginning of bad corp Q/Q and Y/Y earnings comparisons. This bump will likely be the result of expectations of the White House dividend to lower income families. The problem that cannot be resolved, however, is massive bank de-leveraging that must take place as residential housing market prices continue to slump. The biggest problem there, btw, is in non-owner occupied (ie, speculator-owned) units, which will be a disaster for the banks. The American taxpayer cannot be asked to extend financial support to the Moms & Pops in South America, China and Japan who are walking away from their investments in those buildings. The condo/international legal issues are mind-boggling. So, house prices are a key issue, and not just in the US.]

Thanks 2nd!

If I recall correctly, on the way up I also predicted $900 gold, which was, at the time, met with quiet skepticism too. I also predicted global warming, the Bush victory in 2000 and of course, the 911 terror attack although I only had the date nailed down to 2 weeks either side of:) And remember who killed the Kennennedy's...After all, it was you and me.

2nd, Vinod: All rallies have been sold so far and the price action on the ultras isn't as negative as I thought it would be.

"Sitting" may be the right thing...
We may start with a flurry and then fade.

Hey RRPIX, DZZ, ESLR look good.

dumping NWA...

I am sitting tight today out of everything, as I am heading to Florida to visit my sister in Cocoa Beach for 2 weeks. I might trade down there, but might just take a week off from everything. I am sure I will read this site on my downtime around the pool. If we are up big time today, I might get into a little FXP/SKF.

scaling into QID at 43.69...

craig- dumping DZZ right here, no need to think twice ;)

dumping HGD.TO while i'm at it...

g52- look for a good day, my friend ;)

ESLR out @ 10.40
Back into FXP.
Adding to SKF (small bite).
Added QID @43.80

Sitting when you're right.....darned Jesse....

QID-> out at 43.98...

Re: ABCP

Here it is: The ABCP that investors bought into in Canada are all tied to Credit Derivative Obligations

http://www.bloomberg.com/apps/news?pid=20601082&sid=aT3gvNDBCQZE&refer=canada

ESLR- adding at 9.95...

that was the first wave...true 'tell' will be whether it gains momentum following the profit-taking...

still leaning towards 13000...no positions...out of all longs except ESLR, out of all shorts except DXKSX...

ESLR in at 9.6

ESLR is a real mover, either way...hanging tight/no more additions....

ESLR down over 11% now. Incredible that a company is punished for actually growing.

I'm holding what I've got. I may add as this is a panic sell off now.

Too funny, red candle on ESLR is poking below the bottom on my 5 min live chart.

You need a sense of humor on days like this. ;)

n2s- if companies get rewarded for bad news, then it's only fair they get punished for good news ;)

Ok Guys,

Am I the only one who finds it weird that Bill removed his photo from the header? Am I the only one wondering how Bill is feeling?

Sharkie,
I suspect its part of his disengagement plan - he mentioned a few days ago that this would become "Cara Community".

sharkster, I think the absence of the photo betokens the new "community" orientation of this site. I would read nothing more or less into it.

National Defense Institue has released it's assessment of the war in Iraq. First line of it "Measured in blood and treasure, the war in Iraq has achieved the status of a major war and a major debacle"
http://www.ndu.edu/inss/Occasional_Papers/OP5.pdf

Keep in mind this is the war John Mcain has said he would keep fighting for next 100 years. Republicans are doomed this election cycle.

"Keep in mind this is the war John Mcain has said he would keep fighting for next 100 years. Republicans are doomed this election cycle."

I hope so, but I doubt it given that morons asking questions about lapel pins still have access to the microphone.

That's because we haven't had a working media in quite some time. Instead of journalists, we have pundits.

There could be several reasons Shark.

I'm thinking it's a legal matter for someone trying to re-enter the securities biz.

Bill isn't usually shy about health issues.

No matter, I send my best wishes for a desireable outcome and hopefully some rest.

us in iraq/china in africa...if there was no oil, there would be no presence...

very nice! ... wanting this to close above 12,750 for more progress next week ... keep your seat belts fastened :)

Hey Shark Attack, re Bill's photo:

We are not finished with the blog graphics revision. Photo will return repositioned.

Jack

The reason the click through rates on Google ads was up 20% is because all the workers at the companies don't have much to do so they sit around surfing the web. Next month they will probably get laid off and then they can site at home and click through more. Google is in a win win situation at the moment.

Citigroup reports $5.1 billion loss on hefty write-downs

http://tinyurl.com/5g6ujk

Will somebody please take away the punch bowl? This party is getting a little crazy...

Re: Gold basis

We're seeing backwardation in the spot price over the futures price right now. 11:00 am, the gold price curfew hour.

Is the huge drop in POG today based on ???news?

Re: POG

Gold price has been selling off rampantly in the London markets overnight.

Hi Bill,

Glad you didn't get in trouble with them, that was the first thing I thought when I read today's first sentence. I've been enjoying your book, and have some questions for you and the community after more study.

Gold backwardation, not seeing it
Spot 915.5 http://tinyurl.com/2njrkk
June futures 918 http://tinyurl.com/2fjbkd

Photogray, didn't you hear that the dollar is up because bank earnings are great?

The VIX is under 20 for the first time in awhile. And how about C, up > 6% after report substantial losses.

For some perspective (and to bring my ESLR comments to a merciful conclusion) those losses are 5 times ESLR's current market cap.

From the Dow Jone Newswires:

Canada Hot Stocks:Ecuador Miners Fall On Chance Of Suspension
April 18, 2008 11:00am ET

Among the companies whose shares are making notable moves in Friday's session are Aurelian Resources Inc. (ARU.T), Dynasty Metals & Mining Inc. (DMM.T), Creststreet Power & Income Fund L.P. (CRS.UN.T) and GLG Life Tech Corp. (GLG.T).

Ecuador mining companies Aurelian Resources Inc. (ARU.T, C$5.84, -C$1.52, -21%) and Dynasty Metals & Mining Inc. (DMM.T, C$5.07, -C$1.09, -18%) are down after Ecuador President Rafael Correa said Thursday that several mining concessions in the country will be revoked and others suspended. Haywood cut its target price on Aurelian in half to C$6 and lowered its rating to sector underperform from outperform.

Creststreet Power & Income Fund L.P. (CRS.UN.T, C$6.40, C$0.40, 6.7%) has agreed to sell its two wind power units to an affiliate of FPL Energy LLC for C$121.6 million. It estimates that unitholders will receive a distribution of about C$6.63 a unit from the transaction proceeds.

GLG Life Tech Corp. (GLG.T, C$3.00, C$0.10, 3.5%) has signed a 20-year agreement with the government of Juancheng County in China, giving the company exclusive rights to grow high-quality stevia leaf and build and operate a stevia processing factory.

(END) Dow Jones Newswires

04-18-08 1100ET

Copyright (c) 2008 Dow Jones & Company, Inc.

It's based on the rising dollar. Look at DUG though, still getting pounded even though crude is down. Another proof that this rally is mainly an options expiration rally. Look how many puts sold on everything at the beginning of this options month. And since then we've been climbing steadily except for the GE drop.

It's certainly not based on fundamentals so why couldn't the big players sell tons of puts and but tons of calls running it right until expiration.

The GE drop almost screwed up their plan but luckily the PPT was paying attention.

I'm not fooled.

Rob.

I meant "buy tons of calls"

Rob.

rob- does that mean you're buying DUG?

trying QID again at 43.44...

"Is the huge drop in POG today based on ???news?"

The sharp drop in gold this morning has nothing to do with fundamentals and everything to do with manipulation. In keeping with the West's tradition of pre-emptive strikes, what we are experiencing is probably nothing more than disconnecting the golden alarm bell... again. Note the link below that was issued just after the initial take-down. After all, we could not give the impression to the sheep that out-of-control deficits are a bad thing can we?

Also, in keeping with Disneyland tradition, Citi shares are up 5%.

Fireworks

"Britain had a 10.2 billion-pound ($20.4 billion) budget shortfall in March, a third more than economists forecast, driven by higher capital investment and an increase in spending by state-owned companies.

The gap was the largest for the month since records began in 1993 and widened from 7.1 billion pounds a year earlier, the Office for National Statistics in London said today. The median forecast in a Bloomberg survey of 17 economists was 7.8 billion pounds."

http://tinyurl.com/4867dq

[Bill Cara note: The USD/PoG move this morning is co-ordinated. Expect more to come.

USD rally
http://tinyurl.com/229pya

PoG pull-back
http://tinyurl.com/w18m ]

GOOG up almost 20%...

QID- forget it, out at 43.27...

Wouldn't that tempt the BOE to cut rates which would make the $USD stronger in comparison?

That in itself would/should be bullish for POG but it is priced in USD so it is what it is.

Considering that there is an abundance of supply from gold refineries in the form of kilo bars, you have to assume that bullion banks are taking advantage leasing the same gold several times over and dumping those on the market.

Given that banks are borrowing all of their reserves it would not seem too improbable that bullion banks are operating under the same conditions.

Now, if they are all engaged in Credit Derivative Swaps, borrowing hundreds of millions of dollars worth of notional value underwritten by bullion leases, then they can naked short the gold price as much as they like. They can take out a much larger notional short position on gold many times larger than commitment of traders' data.

The same would go for dollar obligations, which would be a derivative bet on a rising dollar, somewhat the reverse of the gold short.

Re: Kilo bar supply

Scrap supply is finite and only comes as a percentage total precious metals supply. Once that scrap can no longer fill the gap between mine supply and steady investor demand, we are again in a short fall.

The "tell" is gold lease rates. Another "tell" would be a complete lack of coins, but an abundance of kilo bars at only certain refineries.

A more certain "tell" on the renewed effort at expanding borrowing through credit derivatives and swaps, would be the rise of the silver price against the gold price. For now, we see sideways trade in the gold/silver ratio.

But another way to "tell" if silver prices will rise soon, is that silver lease rates have gone from negative to positive.

http://www.kitcosilver.com/charts/silverleaserate.html

What does this all mean? That means that any financial services institution making a short term credit derivative bet shorting gold will soon run out of paper (believe it or not)

I would assume there is a certain desperation if we see that much supply out there at this juncture. If its coming from the UK, why not lease out ETF gold bullion and sterling silver through Barclays bank to help things along? (just imagining)

Aside from this, there is still steady investor demand going on. Why? Because you can hold precious metals as monetary value in a safe deposit box.

Feature article on page one of today's WSJ:
Surge in Natural-Gas Price Stoked by New Global Trade
Further Gains Likely Despite 93% Spike; Bidding With Japan
http://online.wsj.com/article/SB120847521878424735.html?mod=hpp_us_pageone

With increasing prices for US food staples, "Third world" countries and their citizens may be forced to sell gold to buy food. Just a thought..

People who are starving don't have gold to begin with, and the affluent only have a very limited supply of gold carrying sentimental value.

What's the word....did the DJIA/S&P viagra fail or are we going longer?

Market looks tired - not a lot of buyers and shorts have been squeezed hard already – looking at GOOG reminds me of the good old days.

2nd,
Yes, I'm holding a few July 25 DUG calls along with my SEpt 60 COF puts and my NEM June 45 puts.

Other than that I'm all in cash and really thinking about buying puts on the S&P and DIA. But I'll likely wait until Monday as we could see a morning push Monday before we start nosediving again.

Rob.

re: SPX -

As I mentioned a few weeks back - double bottom unless confirmed that it is not, shorts that don't see this may eventually get squeezed (happening now).

The 38.2% fib retracement is broken as of now, this retracement formed the last 3 month resistance line that I have spoke of before, this may provide for more upside to come.

Above 90 day EMA now.

Watching volume and next few days of price action for confirmation, although if confirmed, the price oscillators will be overbought on a daily chart at that time.

craig- it's not viagra...it's 'get shorty'

Sell alert question for community
After the RSI-7 monthly, weekly, and daily are above 70, is it a sell alert if the weekly falls under 70 but the daily stays above 70? eg today RIO, IMO. I thought the daily RSI-7 had to fall under 70. Thanks.

They can run it all the way to a new high if they feel like it. It's not going to change my position at all.

Scare the shorts screw the put holders and suck in money sitting on the sidelines is the name of the game. Will alot of the money on the sidelines succumb to greed? Maybe.

Are there any companies that have been the cause for these massive rallies that are experiencing real earnings growth? Not that I can see. Until we see real earnings growth on the horizon this is all just a sucker's rally in my book.

Have I missed out on 10%+ in upside profits? Sure, but I'm not in the room so I don't know when the selling back to reality begins. So, I'll patiently wait until the pumpers run out of energy. I still think it will be next week and then I'll pounce.

Has any of these manipulated earnings restored real confidence and trust in the market? I don't think so.

Rob.

And even with all this rallying I'm still up on my COF puts and my NEM puts but a little underwater on my DUG calls.

Rob.

Looking at NQ chart, in addition to what g034 said...

- double bottom, confirmed
- inverted head and shoulder, confirmed
- inverted cup and handle, failed
- 1900 resistance, broken

All bullish formations you can think of are there. Things are very volatile and it all can change on a dime, and fundamentals, as we all know, do not match bullish sentiment... so I wouldn't get overly long-happy, but stubborness on a short side is unwarranted in face of this price action. What we see is a very strong confirmation of how sound Bill's advice to stay on a sideline has been, unless you are a day trader or a scalper.

ALOHA !!

sharkie ... Good luck! The "ever-present" ... THEY ... always make their big attempt to take the POG down on Fridays and before expiration. Any POG downturn is always a reason to pump the USDX. Goldman Sachs on the TOCOM still has the lowest short position in history! Until I see Goldman Sachs participate with some heavy shorting this current POG downturn won't last. Believe me nobody on this site prays for a HUGE POG crash more than I, but there are a lot more US Peso holders more powerful than I looking to dump and move to "value" ... "real value".

dr cosa ... The "knee jerk" reply to any announcement by the FED to raise interest rates would be met with a POG crash, but then you'd have to ask yourself, "Why is the FED raising rates now?" Everyone knows raising rates will destroy any hope that US real estate markets would recover. Perhaps the FED logic would be "Well, real estate is already in the CRAPPER so who cares!" You cannot fool the SMART MONEY ... You cannot bailout banks to the tune of, what I call a low ball number that Goldman Sachs put out of $950bilUSD, and still claim you have a STRONG DOLLAR POLICY! You cannot wage a an epic multi-trillion dollar "War On Terror" and have a STRONG DOLLAR POLICY! You cannot have 77million baby-boomers retire and have a STRONG DOLLAR POLICY! You cannot have a country drowning in debt and job losses and have a STRONG DOLLAR POLICY! You cannot keep raising debt ceilings over and over into infinity and have a STRONG DOLLAR POLICY! Let the banks fail and everyone lose their jobs and riot in the streets all the while raising interest rates at the same time and then, even I would start to believe in a STRONG PESO!

The POG takedown is ... as its always been over the past seven years that I have been buying gold and silver ... TEMPORARY!

There has to be some severe sea change in the fundamental way the FED and the US government operate to make any permanent substantial changes in the value of global fiat currencies! The only way fiat monetary systems have been "changed" in past historical instances, has been a total collapse! Anybody who has studied "money", even Bernanke and especially an ex-gold bug like Alan Greenspan, knows that! Or is this era we live in now somehow "special"!

AT&T to cut about 4,600 jobs, sees $374 million 1Q charge

http://tinyurl.com/4gd3xs

Kaimu,

I am a true admiror of your views.

Cheers mate!

ALOHA !!

This is just mind boggling. I mean the US financial media must believe we Americans are just about the most ignorant people that ever existed! Look at this ...

Somehow, CitiGroup(C)has made the US Peso rise in value and gold fall ...

READ ON:
Metals - Gold falls nearly 4 pct to 1-week low after Citi earnings boost dollar
April 18, 2008: 10:00 AM EST

LONDON, Apr. 18, 2008 (Thomson Financial delivered by Newstex) -- Gold fell by nearly 4 percent to a one-week low in early afternoon trade, in line with a broad-based commodities sell-off, as the dollar rallied after well-received first-quarter results from Citigroup Inc.

Hawkish talk from the Federal Reserve overnight and higher U.S. bond yields are also boosting sentiment towards the greenback, further pressuring gold.END

Nowhere in this article do they ever mention the following info about CitiGroup's well received 1Q results!

Now read this about CitiGroup's "earnings" that has caused the US Peso to rise and POG to fall!

READ ON:
Citigroup lops off $14 billion in investments during 1Q
Friday April 18, 12:14 pm ET
By Madlen Read, AP Business Writer

Citi records $14 billion in 1Q write-downs; Wall Street relieved it's not worse

NEW YORK (AP) -- Citigroup Inc. said Friday it will eliminate about 9,000 more jobs, after poor bets on defaulting loans and the tumultuous credit markets lopped $14 billion in value from its investments during the first quarter.END

HA!!! Oh my God ... its laughable! Wall Street is celebrating this because they thought it would be WORSE! HA!!

What wonks the US Media are! This is just a short squeeze by the "bankers-that-be"!

I see inredulousness happens at the hurtin' wailin' wall of worry as well.

:0

F6

Shark,
You write: "Secondly, I would be surprised if Bernake is allowed to pursue his inflate-at-all-costs strategy...." Really? You have someone in mind in this administration that will stop him? Perhaps Hank? They, (HB&B), had to sit this guy down (Bernake)when this mess finally spewed-out, and educate him crash course style on OTC derivities. He doesn't have the laxury of pursuing a "strategy." Please understand we are in deep. We have crossed the theshold staring at the abyss. You also write: "...What I'm trying to say is, you'd be nuts to pay $1,000 an ounce for gold." Okay, what about wheat and rise, or oil?
Gold is just a yellow metal--you don't have to have it--if you think it's overpriced and unsustainable at these levels sell what you have and even short it! On a lighter note, I second your "have a fabulous day and a big shout-out to our Patron and leader, Bill Cara." Patron, I like that! I must admit, I don't like "Caraistas."
Sounds like Sandinistas or something like that--But, that's just me.
Cheers,

Gus.

ALOHA !!

In 1935 when the US government started the whole Social Security system fiasco they never dreamed that Americans would live to collect benefits past 58 years old! Thanks to the fiat monetary system that has allowed the medical community and Big Pharma R&D to borrow huge sums of R&D funds Americans and other Westerners live on into their 80s!

Now imagine if you were the US government and your statisticians were telling you that there are some 77 million retirees coming online in the next ten years would you want to admit inflation exists and then be forced to raise interest rates? Remember all those checks retirees get are based on inflation via COLA(Cost Of Living Adjustment)! Just based on that fact alone we will go the way of Japan, because our government knows raising rates to 18%, like Volcker did, would bankrupt Social Security and Medicare benefits and send the old geezers like me into the streets with our walkers rioting like we did in 1968! Then the youth of America would see that their deductions from their pay for Social Security and Medicare are a farce and they would join us in the streets! Heck, I wouldn't doubt it if even government workers, the military and unions rioted along with us! Essentially the EMPORER WOULD BE FAT ASS BUCK NAKED and the lies would be drooling from every orifice! There is NO WAY those in power ever want to end Social Security and Medicare! But they will be forced to by foreigners who hold our debt. All that you see now is an illusion by politicians and bankers who are scrambling every possible trick to delay the inevitable outcome that has fallen to all past fiat currencies in human history!

Sorry, my bad: "incredulousness"

John UK

Thanks for the info on Alt A mortgages...if anyone thinks the "worst is over".... check out the video link John posted this morning.

In addition to questionable mortgage debt,add in shaky credit card debt, auto loan debt, student loan debt, corporate debt,state and local debt, hedge fund leveraged buyout debt, commercial real estate debt, and all the leveraged derivitive bets....it's collectively a recipe for financial collapse. I expect in the end, Fed impotence will be revealed as US wealth destruction and exportation hits record levels. Bill mentioned this subject in his comments yesterday. Right on Bill !!

Kaimu... I agree... the dollar's future looks bleak...there may be hype, manipulation and jawboning ahead but the Fed will not be able to raise rates for a long time and unless the market forces long bond rates higher, the dollar will continue to suffer. Latest foreign inflows were $60B...just meeting the $2B a day the US needs to square it's balance of payments account and continue the charade.

ALOHA !!

maromatics ... TA! As Rush says ... "ditto" mate!

Do any of the younger readers here even know what the word "ditto" means?

In the short run I am not right all the time but long term you need assets that are "fiat proof"! That's my only strategy aside from "buy the dips"!

I have to say though "margin" is a much broader term than many here realize. Sure the brokerages may lend you "margin" to trade, but in reality I believe "margin" is anything that causes you to sell stocks. When it comes down to it would you sell GE to buy gas to get to work? How many Americans right now are contemplating selling their 401ks and IRAs to pay the mortgage and bills? I am sure they are selling thinking this economy and real estate will rebound any day now. That's what the US Financial Media tells them! I personally would rather walk away from my house than my gold!

Kaimu -

Perhaps more likely from the gov't:

- gradual cutting of Soc. Sec. & Medicare benefits
- gradual reduction in COLA increases
- ever more game playing in inflation calculations
- gradual increase in Soc.Sec & Medicare premiums

They won't "kill the frog" by dropping him into boiling water. They'll plunk him in a cold pot, and gradually bring the water to a boil. Maybe the frog won't figure out what's going on till he's too weak to hop into the streets !

MIT economist Lawrence Kotikoff wrote in 2004 "the Coming Generational Storm" expecting such outcomes.

Gus

the term Caraista should invoke a revolutionary feeling or allegory ...as that is what Bill is all about....telling the truth about our controllers in Washington and New York and London. Truth is the first step in a revolution or change.

CLOA vs LOLA

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

That's COLA not cloa

Any chance could this rally be a bull trap?

ALOHA !!

Jock ... right ... thats why the BLS invented the "birth death model" and thats why we're in our tenth version of the CPI! Thats more versions than Adobe Acrobat reader has! HA!!

I like Caraistas too.

"You say you want a revolution
Well, you know
We all want to change the world
You tell me that it's evolution
Well, you know
We all want to change the world"

Beatles

My sympathy goes out to those holding ARU, DMM and other Ecuadorian miners today. It's a bloody shame.
Fred

Fred,
Get used to it corrupt regimes are 'looking for their fair share' form Alberta, Mongolia, Venezuela, DCR, Zambia, Ecaudor etc. It's a great racket, governments risknothing and collect on everything....

volume is not that high
and looks like market run out of viagra

g034 and Vadym,
Thanks for your concern. I realize that all of the technical cards are lined up to rally into the sunset but real rallies are only made with real earnings growth. Everything else is a trap.

That's why I'm 95% cash with some small short positions. If the DOW goes to 13,500 i may be underwater with my shorts by then. Until then I'm holding.

I've just been conned by the street too many times to try and scalp 10% here or there in up moves that don't match earnings growth. And the same sentiment goes for the other side too. In a real Bull market I don't try and scalp 10% here or there on the way down. I just try to stay with the long-term trend and disregard the "noise".

Congrats to anyone who can play both sides in any market and not get creamed.

Rob.

Ecuador freezes large-scale mining, boosts control
Fri Apr 18, 2008 3:06pm EDT

(Recasts, adds details and background)

QUITO, April 18 (Reuters) - Ecuador's popular assembly on Friday ordered the suspension of all mining activity in exploration projects and revoked hundreds of concessions in a move that will increase the leftist government's control over the country's natural resources.

The ruling by the government-controlled assembly will suspend all exploration activity until a new mining law is approved aimed at boosting the state's share of revenue. It says the law must be approved within six months.

The decree could hamper the country's growing industry by delaying production plans and scaring away much-needed investment, analysts and company executives said. Share prices of Canadian miners operating in Ecuador fell sharply on Friday on the implications of the decree.

Ecuador has no significant output of precious metals, but dozens of firms are exploring for copper and gold, including Canada's Aurelian Resources (ARU.TO: Quote, Profile, Research), Corriente Resources (CTQ.TO: Quote, Profile, Research) and IamGold Corp (IMG.TO: Quote, Profile, Research).

The government estimates the country holds $130 billion worth of metal deposits.

Ecuadorean President Rafael Correa, a leftist who has launched a campaign to tighten the government's grip over his country's natural resources, said on Thursday he would support such a ruling.

The order also limits mining holdings to three concessions per company, and calls for revoking all their remaining concessions without compensation.

The 130-member assembly, which is rewriting the constitution and also acting as the legislature, has the power to issue decrees that cannot be vetoed by Correa. (Reporting by Alonso Soto; editing by Matthew Lewis)

Vinod:
I guess the market is catching breath for another strong run to the close.

QT- right now it's trapped bears exiting...personally, i can't tell if it's also a bull trap, or if we're starting a 'genuine' rally that takes off from here...are 'real' rallies only possible under conditions we deem necessary? probably not-> if "the market is us," then we all have different opinions..some of us will be right and some wrong-> b/c i think we need to see DJIA/NAZ 10/2 does not necessarily mean the market will take us there...maybe a double bottom is in, and we're all waiting for something that never happens...or maybe we see those downside targets, but not when/how we expect to see them...if trading was easy then we'd all make the right predictions, and like shark we'd all be right on the next president, global warming, and who killed the kennedys...

I'm opening a large short 2x DOW on the close today.

RSI(9) is extended, tail-up candle, just slightly above resistance - all on what appears to be large-scale short-covering.

If it holds above 12,800 through Tuesday eod
then I exit
else trail stops on down.

Dave

2nd

Thanks for your thoughts 2nd. Just thought I would ask, I'm still learning.

Have a good weekend.

something going to happen
either we are going down big
or this is new bull market

i stay away on expriration day

you're right 2nd, sometimes rallies start when we all least expect it, even in the face of worsening conditions.

But the 2003 rally started with improving fundamentals and I'm thinking this rally has nothing compared to the 2003 rally. I know there were plenty of times of irrational exuberance back in the late 90's, where fundamentals meant nothing and emotion meant everything.

And this could certainly be one of those times, and I'll be glad to be wrong if it is but better safe than sorry if it isn't.

Rob.

n2s- here's a typo that i hope cheers you up:

"Shares of Evergreen Solar Inc. gained $1.23, or 3.9 percent, to $32.80."

http://tinyurl.com/683vrl

Re: Alberta

Alberta backed off its new royalty taxes.

Rob- i don't disagree with you at all...to be clear, all of my positions are trades, and o/w in cash...no vested interest in seeing the market move either way...

Rallies rarely begin with RSI(9) > 77....

Dave

Interesting day.
Taking Bill's advice to hold cash I sold longs in the AM along with ST trades and then traded my way out of the ultra-disasters at the eod.

I have 250 shares of ESLR, 650 shares of RRPIX and a couple very small holdings in juniors I am temporarily UW in (UXG/WGW). Other than those I'm flat and happy.

Sure appreciated the comments from go34 and Vadym

Dave- what if that RSI gets "worked off" going sideways for the next two weeks, before taking off again...there just are no sure bets...closest thing i know to it is betting against the crowd, b/c you can usually depend on the human psyche to do its thing...

2nd ave
that is a certain possibility in which case I won't get hurt much - the upside of the trade greatly exceeds the downside at this point IMO

Also - DOW just touched the downtrend line from Oct 11 through Dec 11 and bounced off.

Lots of possibilities - this trade is following the one I feel is most likely.

Dave

DJ News @ 4:06 EST
Ecuador revokes mining concessions. 80% revoked, 20% suspended as of today.

finger - let me be clear, I am not saying to be long now. I was really referring to two things:

First, I was reiterating what I said before, implying that shorting back then was not the highest probability trade - you've got to listen to what the market is telling you.

Second, reminding of the resistance level being broken - have to pay attention to what is happening NOW. We could see the rally continue further, then fall as we get overbought and find that former resistance providing support.

Personally, I think we are in a bear market, but if you bought Cara 100 stocks on the last buy signals and properly managed those positions, you would be ahead of the game now and could look back at your trading actions as the proper ones to have taken, JMHO.

(this comment is not pointed at you Finger, just talking).

Also, watching IEF, could be forming h&s top.

2nd, maybe the editor has a crystal ball and was writing that article a year in advance? ;)

Have a great weekend.

Very interesting to see the USD, Oil, and Truckers all rise on the same day.

Welcome to the markets - please abandon your logic at the door.

I think I might pick up a little physical silver this weekend. Not a vote that it won't drop more; it surely may. Which is why I'm thinking about just a little bit.

Marketwatch headline right now: "World is Wall Street's oyster"

Yes. We know. That's the problem.

g034,
Thanks. I agree that shorting after the Bear Stearns fiasco would have been very hard to hold until now and very unprofitable.

Likewise going long then would have gotten some decent gains up until now for sure.

You definitely made the right call going long back then. Like Vad says whatever makes you sick to do is usually the right trade. And I, like most people, couldn't even imagine going long back then.

Someday, I'll learn to dance both ways but for now I have to stick to the long-term trends.

Thanks for all your great comments.

Rob.

oil up
metal up
comodity up
with fed help HB&B problem solved
Housing problem solved
people are losing job
and we are in bull market
when did that happen last time?

2nd,
Nice dancing. Someday I'll catch up with you in profiting from any side in any market.

You have a real ability for detecting and trading on intra-day direction changes.

I would rather see the bull market resume and earnings bottom right here but I just don't see that happening yet. So, I'll wait patiently until the bulls run out of steam. I'm sure you and g034 will be right on top of when it happens and we'll ride it down into the sunset.

Have a great weekend everyone!!

Rob.

Summary of Don Coxe's call today:

- Food and fuel inflation are creating enormous pressures, except for Canada, and except for meat prices, so governments are killing livestock, a pattern that has repeated through history, which inevitably means soaring prices for derivatives of grains: meat prices will be going up: suggests to stock up on meat in the next couple of months.

- Discusses the current bad news on LIBOR. The same people which led us into the financial crisis apparently have not been telling the truth on what they pay to borrowed funds. The LIBOR may be sharply understated. Trillions of floating rate products are priced on the LIBOR, which seems to be lied on by the banks.

- Therefore, the current euphoria in the stock market is seriously misplaced. This is no time to be rushing into bank stocks. It is a nightmare for Bernanke and Trichet.

- Rice has gone from $350 to $1,000/ton in a matter of a few weeks. Rice is the basic food for 3 billion people in the world. For countries like the Philipines this is a catastrophe. Comments on Egypt and Argentina imposing gigantic export taxes protecting urban consumers, so farmers will be cutting 15% on wheat planting this year. This is the least desirable outcome that we need right now, and will constrict world supply. It is the equivalent of a giant drought.

- Potash going from $127 to $567, comments on how well Bill Doyle did by walking out of a meeting with the Chinese, the Chinese have no choice now.

- Repeats that this is a nightmare from Bernanke, there is no peak in sight for grains. Starving people will riot (and then soldiers will shoot them in some countries).

- Costs to farmers are rising so sharply that we will not see $3 corn again. Commodities are a series of bad news for consumers, good news for producers (farmers). Consumption is running ahead of production.

- It is real things that we need. The elites are telling us these commodities prices are not real, that oil is only worth $65. However, oil prices are not driven by speculation. If that were true, all futures would be in contango. That is not happening, only a few futures contracts are in contango, and those are grains, which is also bad news. People don't accept payment for oil or corn in derivatives, they only accept cash! Nigeria's and Russia's production is declining. Unless coutries follow the way PBR works in Brazil we will not see increased oil production.

- Bernanke has a recession on his hands, with higher food and fuel prices.

- Electricity is the next to go up.

- You want to have a scarcity bet. Demand increasing, supply decreasing. Some day rationality will return, but in the meantime, this is most chaotic management of food resources, comparable to what occurs during war times.

- Commodities to go up, banks to go down, notwithstanding today's enthusiasm.

"Welcome to the markets - please abandon your logic at the door."

You said it. Market has its own logic - it's different from common logic but it's a logic nonetheless.

One more comment I'd like to throw in general discussion: listen to yourself for the sign of emotional attachment to your position/opinion/bias. rarely good to have one (attachment that is). Not directed at anyone personally of course, just a general point.

Vadym Graifer

you have said it correctly
and The best traders are usually psychologists

vinod- LOL...

so what vad is really saying is to lose the oedipal attachment to positions and let your ego surf the fine line between the id (intuition) and the super-ego (logic)...i think you got it, my friend!

[Bill Cara note: long time Caraistas will laugh at this discussion.
Maybe you recall this?-
http://www.billcara.com/archives/2006/05/my_favorite_car.html ]

vinod, you hit it exactly right. And, the chart is a reflection of players' psychology; Art of tape/chart reading is in fact an art of reading the players' reactions and emotions as they reflect in price/volume action; He who wants top read others emotions correctly needs to be emotionally detached himself. And all this will melt together into that merry dancing between different markets and positions.

To me a stock that is not performing is like a TV set that I bought, bnrought home and found to be non-working... do I sit and watch dark screen in hope it will spring back to life and start showing the movie, or do I exchange it for another one, in a good working order? Or, if an apple I bit into turned to be rotten inside, do I keep biting in hope it gets nice and fresh, or do I throw it away and grab another? Do I have anything invested emotionally in a particular TV set or an apple? If not, why in stock? Just because my ego doesn't want me to admit that my research has been not entirely correct? But that's the nature of the market, it's uncertain which means even correct research may not pay dividends. I feel fine shruging off non-performer and looking for another bus, which is usually right aroundf the corner - and in fact, being too persistent in sitting on a wrong bus, I am very likely to miss the right one...

Sorry for all the analogies, they are a loose match, I just think that they help put things in pesrpective.

Funny cartoon Bill, lol, haven't seen it earlier

ALOHA !!

yvrapx ... Don't forget to list the USA in there with the other corrupt countries! What else do you call "WINDFALL PROFIT TAX"? Why else would EXXON executives get grilled in front of Congress for making a profit, while HB&B get FREE MONEY(subsidised)for making huge losses? In this country corruption is rewarded handsomely, so how is that any different from some other Banana Republic?

Can we take what Vadym says about the markets and apply it to our money? After all money is a market and plenty of people are attached to "their money" in a most disfunctional way! Tons of people here say "I'm 100% in cash!" Does that mean something other than you don't own stocks? Please don't tell me you think you're 100% safe! All it means is you are safe from a DOW crash, not a monetary crash! The general consensus in the USA is that our money is safe, backed by the US Military and an S&P AAA rating, FDIC ... on and on and on! And we Americans love our Dollars! We love it so dearly we even dream in DOLLARS ... We call that the "American Dream"! If we truly trade prices then why have we all held onto a US Peso from the USDX 120 highs in 1995 down to the 71 lows of this week? Will we continue to hold down to 52? Down to 42? Down to 32? While we trade prices of stocks we are totally clueless at trading money prices. To boot we Americans are totally devoid of any concept of what real money is other than pieces of paper we use to pay debt with! If you stay 100% in assets denominated in purely US Dollars then you are at the mercy of the forces of devaluation. All the lucky people here in the USA who bought GOOG yesterday morning are now feeling much richer until they fly to London or Paris after they pay the IRS!

For instance as the US Peso rallies today and the AUD and CDN decline now is a good time to look at trading the ASX and TSX listed companies. If I use a US Peso to buy ASX listed stocks I have an 8% discount built in already. I can either buy 8% more shares than an Aussie could or I can buy at an 8% lower price than Aussies! Why not leverage foreign markets while we still can? I am sure Germans holding Euros are doing the same thing, except I doubt they are buying too many US Banks. You trade prices but you try to stay with quality companies not fraudulent ones. There are multiple levels of trading prices its not all one dimensional ... We trade prices all day, every day and the same psychology exists! Sometimes it makes me ill when I think about it ...

This article explains the new NY Globex manipulation system and how it affected the gold pits on its debut earlier today...

"Globex is a super-fast, 24 hour, around-the-clock and around-the-globe trading platform that was instituted by the Chicago Mercantile exchange. Since I had never heard of it anywhere before, I did a Google News search on it for today.

Nothing.

No news reports that Globex just went into effect for gold trading, or that it was planned to be put into effect. Hmm. A $35 price drop in gold coupled with the secretive launch of a brand new, super fast, 33 trades per second global trading platform for gold. What a coincidence!"

http://tinyurl.com/4flhv8

fireworks, To my knowledge there was nothing new with regards to globex trading of gold futures yesterday. I actually for the most part stay away from the precious metals due to volatility, but have traded on occasion some contracts on globex for some time. The only difference I see is that Kitco added them to their chart... so what?

Hi TennesseeTrader, you could be right that the sudden plunge in gold had nothing to do with the new NY Globex system as it could just be a simple coincidence. However, if one follows the action in the gold pits closely, it becomes increasingly apparent that there are many coincidences in this sector - and perhaps too many for the wise.

But as Bill wisely posted earlier today (see 11:19 am note) the coincidences of the co-ordinated bear raids on gold and silver are difficult to miss. In fact, I have heard that the Pentagon was so impressed with the precision of the co-ordination today that they have enlisted two of the central bank boyz involved to co-ordinate the next round of air strikes in Basra, Iraq.

Cheers

There is no "new" globex system as it pertains to gold. It has been in place for years.

I encourage everyone to read Doug Noland's latest Credit Bubble Bulletin:

"Setting the Backdrop for Stage Two"

http://tinyurl.com/2ezjnr

The electronic markets have been there for years. According to Sinclair these thinly traded markets are a favorite for manipulation. That may be, but no period of day stinks more than the action of 8:30 open in NY. Utterly rancid.

In global 24 hr markets, like forex, the conventional wisdom is to watch the opens of each money center as they circle the globe. However, one of the most interesting times of day in the PoG is the period when Hong Kong closes. At that point London is in full control.

Sudden sharp directional changes in the PoG; the start of the price capping moves that then continue and accelerate in NY; fakey-feeling pattern setups and breakdowns; all of these often commence as soon as HK closes.

Or maybe, when I see these things, it's just my sleep deprived brain curve-fitting. "Move along. Nothing to see here...."

http://ronsen.blogspot.com/2008/04/saturday-morning-coffee-call-hell-chart.html

Early risers. Charts with your breakfast.

Bil
I am going to post this funny cartoon on Buletin
board at trading room on Monday

http://www.billcara.com/archives/2006/05/my_favorite_car.html

eventhorizon, I read Noland about once a month. His articles are so dense it takes me that long to absorb it all. In any case, you're right that this week he is a "must read". Here's his conclusion and it helps explain the puzzling rise in equity valuations:

"It is not beyond reason that a disorderly unwind of 'bearish' Credit market positions could incite a mini bout of liquidity, speculation, and Credit excess that exacerbates Global Monetary Instability - while Setting the Backdrop for Stage Two of the Crisis."