spot gold getting hit $880 at last check.

Read your post about diet and health and I wanted to recommend a wonderful book that explains how our bodies work to lose or gain weight. It also debunks a lot of weight loss myths. It is called "Good Calories Bad Calories". Since reading this book I have lost 10 pounds without any feelings of starvation.

Bill,

Your recent warning re: the price of gold was "spot" on!

I hope you all were listening, all you tin-foil-hat gold bugs. And if you were, how much money did Bill save you?

Fed

Mishkin resigns effective Aug 31. That will leave only 4 members out of the 7 intended for the Fed. Hmm... Sort of a "lame duck" squadron with a blind leader in a helicopter out front.

Interesting commentary on the situation by Mish Shedlock:
http://tinyurl.com/4fdcuq

Dr.cosa, I think you read Gartman, Do you know how he defines one unit?

For example, if he has a $1 million portfolio and has four units in gold, what is the initial dollar value of those four units?

My question relates to position sizing and I’m interested in getting inside his head on this concept. TIA

vinod- closing CALM flat at 31.50...

vinod-> always suspicious of opening strength, which i'm seeing in SMN/DUG/airlines...hoping for follow-through, but not counting on it...

Cara 100 Update:

Targets Raised:

ADBE - $46 to $50 @ Citigroup
QCOM - $52 to $60 @ AmTech Research

vinod-> always suspicious of opening strength, which i'm seeing in SMN/DUG/airlines...hoping for follow-through, but not counting on it...

SMN/DUG: Still holding.

Waiting for the oil invetory report at 9:30 AM CST.
Everyone is anticipating on build up of invetories based on less driving during the memorial day weekend.

Anyone suggest a hedge against a falling General? (GE?) RSI seems to be getting stronger from last Friday, though it's still struggling.

Crystallex annual report is out. Doesn't look like they plan on failing quickly or gracefully.

"The Company forecasts that it will have cash to fund its operations until approximately June 2009
assuming expenditures continue at the same pre-Permit level as before the communication from the
Director General of Permits at MinAmb denying CVG’s request for the Permit. In the event of a negative outcome in its appeal of the MinAmb directive relating to the Permit, or a prolonged appeal process, the Company will re-assess its planned expenditures. "

Re: Gold

Because somebody is interested and focussed on the gold sector does not mean that they are tin foil hat gold bugs.

The gold price is obviously under pressure today because oil prices are high and anticipating a correction. This would automatically raise the dollar, thus affecting gold prices. Oil and Gold are different, since Oil is not money. So be it.

My opinion on the comments made to this blog AGAINST the gold price, and pointing the finger at gold investors says that people STILL don't look on gold as money and prefer foreign equities which are far more risky when considering the collapses in the financial sector.

I think the important thing to remember is that regardless of price fixing and dumping on the gold markets that we have seen, and whatever contingencies this may create in one's imagination, contango still hold true for the precious metals sector. The other commodites are in backwardation.

I like this blog, but its becoming too too much like a trade union lounge, where a different opinion is not tolerated, and that day to day movements in the price of a particular commodity invites severe criticism. I feel that I am well positioned, though have been in the wrong for quite some time.

I am not about to debate relentlessly for my position, John Embry and Jim Sinclair seem to look on it as their job. I have my doubts about other 'advisors' who are more self interested short term opportunists, and I see the same happening here.

Good Luck

F6

[Bill Cara note: F6, I don't see this community as being anything more than independent and objective. We are traders, not lobbyists, and our positions do change, both short-term and long term. All opinions are not only tolerated but they are welcomed and to suggest anything different is disappointing to say the least.]

Re: Gold

http://www.professorfekete.com/articles/AEFWhatGoldAndSilverAnalystsOverlook.pdf

F6 - I, for one, like to hear any perspective that is well argued. The more diversity of opinion the better.

In fact, before taking a share position based on an assumed outcome, I force myself to imagine the opposite outcome and my planned response.

Your comments against multi-metallic deposits make a lot of sense, if base metals have peaked, and precious metals haven't.

Please keep it coming ...

F6 - I hope that is not a good luck and good bye. Your input is greatly appreciated. Please don't stop.

telestar:

re: gartman's unit sizing

i only read gartmans occassionaly when i find copies posted on the web, they are hard to come by if you dont have a paid subscription.

i dont fully understand his "unit" approach, i just enjoy his gold commentary because he is bullish on gild without being a gold bug.

-----

Fransix:

i agree in many ways with your comemnts,
daily fluctuations in prices are often used as springboards for tirades against or for particular trends.

theres such a varied time for the traders on this blog, the day traders, the trend followers, long term investors and swing traders.

ive said before that as much as i respect john embry, his fund has done F$&^ All the past 2 years all the while he releases monthly commentary that is starting to sound circular and cheerleader like. the second he said "last chance to board the gold train under $1000" did it in for me.

Sinclair is a whole different approach. The guy posted his home phone number on his website for people to call him should they feel scared about the POG. no gold advisor can match that kind of dedication, certainly not one who runs a free website imho.

[Bill Cara note: Your last sentence is a bit unfair. As I understand it, Mr. Sinclair runs a negative cash flow gold exploration company. He, like Rob McEwen, is on a constant search for new shareholders, so people like that make themselves very much available. This is the same reason that anybody in the public can go to the important gold shows like PDAC and Cambridge and meet the CEO's.

When I'm fully licensed and seeking clients, you will have my personal telephone number too. :-) I will be particularly interested in hearing from people who want to come visit me in The Bahamas where I can tell you about the wonderful lifestyle and opportunities here.]

Cramer's report on JOYG and why this may not be a commodity bubble:

JOYG Shows the Fallacy of the Commodity 'Bubble'

Hedge fund demand spikes coal, steel and iron ore.

OK, that's a lie. But it makes people feel less mystified by the endless price increases for these materials.

I believe there are hedge funds in there distorting the oil markets for certain -- perhaps as much as $10.

No more than that. I say that because I have been a firm believer that if the prices really were artificial, by now there would be a surfeit of oil to meet that artificial demand. It is now clear from various reports that the production of oil is down year over year while the demand is much, much stronger because of demand from not only India and China but now the Gulf States.

Let's forget oil for a second though, and go through the joyous release from Joy Global (JOYG - commentary - Cramer's Take), the leading maker of underground and surface mining equipment.

That great company raised guidance to $3.15-$3.30 from $2.96-$3.22. It did so because, as it says, every single end market is in short supply of the energy building blocks. Here's the non-hedge-fund rap on these minerals: "The company continues to benefit from unprecedented demand for its underground and surface mining equipment in response to the strong demand for coal, copper, iron ore and oil sands." The gap in coal demand alone "could reach 60 to 100 million tons this year." That's a gigantic amount, something we can't possibly make up, and we are the Saudi Arabia of coal, as we hear endlessly. Steel shortages? "Both metallurgical coal and iron ore remain in significant deficit, and some projections indicate that steel shortage could be 20-30 million tons" in excess of what can be produced. Copper can't meet the demand either.

Here's a daunting fact from the release: "Copper suppliers have not been able to produce surplus to date, and announced major expansion projects will add no more than projected demand growth over the next four to five years"

Why? Joy cites emerging markets growth in general and China and India in particular as these countries continue to industrialize.

The result? Joy thinks that it will be three to five years of supply deficit, with the U.S. really being the only hope of swing production to meet the demand. That means a dramatic increase in the need for equipment for Joy Global and gives the company visibility for at least the next four years, something that you do not find in most companies' futures.

This is an extremely sobering view. Joy really is the only major maker of the equipment that can make a real difference. But it is booked through and is doing its best to meet equipment demand. It can't, though.

So here is the real conundrum. Does anyone think that U.S. interest rates control the price of these commodities? Does anyone think that if we raise rates, it will curb inflation? All it could do is make it so that the companies that need Joy's equipment to help rebuild inventories might not be able to buy the equipment they need to knock the prices down eventually.

Joy's the key metaphor to this moment. Read the notes, listen to the conference call, and you will know how much the commodity bubble is not a bubble at all, but the result of a huge underinvestment in minerals coupled with mergers that left only a couple of players that can't possibly meet the demand that is needed to rebuild inventories of just about every important mineral in the world.

Gold and gold stocks
As things currently stand, this week's pullbacks look routine. The only real concern is that gold and gold stocks are continuing to be influenced in a big way by what's happening in the oil market; specifically, they are being bid up whenever the oil price rises and sold off whenever the oil price declines. From a fundamental perspective this makes no sense because changes in the oil price do not alter the investment case for gold bullion and a higher oil price is bearish for oil consumers such as gold mining companies. But sensible or not, right now there is a positive correlation between gold and oil with oil being the leader. This correlation was readily apparent on Wednesday when gold and gold stocks dropped sharply at the start of the US trading session in response to a weak oil market and then began to rebound as soon as the oil market began to strengthen.
The oil-gold relationship will only present a problem for gold during the initial phase of oil's coming intermediate-term decline, after which gold's own fundamental drivers should come to the fore.

[Bill Cara note: Agreed. That's essentially my position too.]

DUG/USO-> anyone think the negative correlation will reverse? do high oil prices at some point hit oil/gas producers either via declining demand or higher costs of production, and over what price range would that occur...

I bought a truckload of gold this ST. Patties day and am not letting go (although it has been tempting at times) anytime soon.

ditto that.....
F6 - Your input is greatly appreciated.
re .....all you tin-foil-hat gold bugs
I thought he was talking about the likes of me, an avowed neophyte who , with my inate ? unreasoning and deepseated love of all things gold will continue to buy all that glitters....hopefully on the dips...just like millions who define the world market.
Although I will admit tin foil sets my teeth on edge. the actual tin foil, not the comment
peace from north puget sound

Norwegian oil fund will soon own 1% of Europe's stocks

http://tinyurl.com/46f5br

Crude reports unexpected major drop in crude inventory.
These gov't reports are losing all credibility.

4.091% now, looks like the bond bear may be kicking into gear, 4% on the ten year was a pretty critical level.

F6 - I agree with others that your input is valuable and much appreciated.

When you mention that gold is in "contango" I looked up the definition and it states that it means the futures are priced above spot. This is the normal situation and may only have bearish implications if futures are priced "too far" above spot. In your opinion are futures too high priced at this time or just the normal?

BTW, please don't let one poster discourage you, I have noticed alot of nonsense by that particular poster.

[Bill Cara note: The more respect one shows for any other, the more they will receive from all others.]

Scaling into yhoo @$27.09

So...if the specs are responsible for the price of oil, where are they hiding all the inventory?

These guys are drinking crystal and getting bottle service vodka at 1000/per.

I have yet to see an 'oil specu-tini' appear on any drink list, so I know that's not happening.

Can we put this boogeyman to rest now?

Swaps to evade commodity market position limits are wrong, pure and simple, and were you or I to structure trades to avoid oversight we'd be in jail. But that ain't where the barrels are going.

2nd, this is just a guess:

Could that future demand destruction be an underlying reason why XOM has tried & failed four times to break 95 in the last year? I've heard the argument before, @ 80/bbl, 100/bbl, and still hearing it now. It's funny to see a 1 yr XOM chart compared w/USO.

Not just the demand destruction, but cost increases & resulting cash flow impacts...

Bill, re comments:

my comments werent directed at you; your phone number has been posted on this board before during the PDAC, and ive never had a problem contacting you when i needed to.

i referred specifically to gold advisor's, many of whom have paid subscription services that after experiencing i found lacking in content and accuracy that Mr. Sinclair provides for free.

[Bill Cara note: I have heard from many that Mr. Sinclair provides high quality information on a free basis. I do plan to meet him this year. My prior comments are intended to accurately state my understanding why he does what he does, but I may be corrected on that.

Also, my cell number for 7x24 access will be posted soon. I thought it was already available, but if not, please send me an e-mail if you'd like the cell and the blackberry mail address now.

Btw, regarding "Lessons from the Trader Wizard", I am close to an agreement with ISI Publications whereby ISI will continue to sell to their clientele, and I will supply Amazon plus do direct sales and fulfillment through this website.]

Fran,

That hat looks pretty good on you....

On another note, I am sick of getting screwdoodled trying to trade these inverse oil etf's.

Is the Korvus RSI app down?

shark, I hear you. I had that painful DUG surgically removed from my acount a few months ago and now I seem to have stepped on a little DCR.

DCR was cheap enough to be a non-expiring virtually free put. It still is. But that doesn't mean it's going to pay off.

shark, let me know when you, er, capitulate and go long oil. That's when I'll go short.

(just kidding - you're not one of the commenters I fade.)

The bald guy had it right: print the chart of $WTIC, take off the numbers and labels and put it on the wall. Now ask yourself: is this a chart I want to bet against?

Here's the formula everyong needs to know.

The key equation for turning points in all financial markets:

extreme concensus + extreme speculation = extreme price

Concensus is not yet extreme. Therefore, price has not yet reached it's extreme point.

"print the chart of $WTIC, take off the numbers and labels and put it on the wall"

I did that and it looked like a priceless Salvador Dali painting.

ALOHA !!

ON GOLDBUGS
The opposite of a "goldbug" is a "pesobug"! Pretty soon the "pesobug" will not be able to afford the tin ... let alone the hat!

I am not so much "pro" gold as I am "anti" fiat! If I am to be ridiculed for desiring money that has a store of value and maintains its purchasing power then I will lovingly accept such misguided ridicule!

ON THE FED
This was taken from a Jim Rogers article that shows he has a less than acurate view of "fiat money"!

Here is his quote from his article on Bear Stearns collapse.
Mr. Rogers stated: "I’ve read the Federal Reserve Act. Nowhere in it does it say you’re supposed to bail out Wall Street. Their mandate was to have a sound currency and it was later expanded to help employment. But nowhere does it say you’re supposed to bail out investment banks."

Mr. Rogers "investment banks" are our currency! Investment banks invest funds from not only corporations and individuals but other "Fed banks" as well.

Here ... "Three major U.S. banks - including Fifth Third Bancorp. (FITB) and Wachovia Corp. (WB) - got clobbered in recent days on the news that they’ve lost another $1.6 billion by making investments in the Citigroup Inc. (C) Falcon hedge fund that lost 75% of its value earlier this year."

Now this on BOLIs ... "The funds were invested the premiums from so-called "Bank Owned Life Insurance Vehicles," or BOLIs, which are designed to pay off when key employees die.

BOLIs, in case you are not familiar with them, are specialized policies typically purchased as an employee benefit. Banks use them to fund such expected costs as employee compensation and the accompanying benefits. Like most life-insurance-type policies, BOLI policies contain both an investment feature and a death benefit. "

I once has an annuity with Lincoln Financial and I cashed out because I did not trust where my funds were being invested. If US banks can have huge losses then that means US insurance companies are next in line. Where there's smoke there's fire!

Sure enough the Citi hedge fund Falcon is proof of that. Insurance companies are just as susceptible to seek high risk returns as banks are in their effort to compete and pay out huge bonuses!

Buyer beware ... I prefer to know where my money is rather than allow some 30 something to stash it into the "black hole" of HIGH RISK!

Start considering insurance company implosions! Go here and you will notice insurance companies listed, but how many of these imploded hedge funds hold your annuity money?

Link: http://hf-implode.com/

As the website says, "Hubris, extreme leverage, and other people's money." That about sums up the US financial system! Where's my tin hat?

F6,

I want to add my voice to several others in appreciation of your commentary on the gold sector. I value your contributions on this blog and encourage you to continue.

Viso has pointed out the positive correlation between gold and oil during this downturn in oil. Wishing to keep my long PM positions, my tactic has been to hedge with HED.to. This has worked very well since Monday, with the decline in PM nicely compensated with the increase in HED. I plan to maintain this strategy until the positive correlation between gold and oil weakens. Your posts, as well those of other knowledgeable gold observers here (dr. cosa, moab, maromatics, Jock ... come to mind) and Bill's guidance, are all helpful in executing this strategy, as I'm sure can be said for others currently invested in PMs.

Why Volume matters discussion.

http://tinyurl.com/3es83x

"is this a chart I want to bet against"

the last time i heard that was in ref to gold just before it hit 1000/oz, lol

150/bbl seems like a nice round number around which all shorts throw in the towel

There exactly two things we can know for sure about a stock:

price and volume.

All else derives from those. Ignoring either one is equally insane.

What do i have today: a discussion on a new financial-blog congregating company- Newsflashr, also AAPL-long-NFLX-short combo,and a few sunny pics from Nantucket
http://wallastoninvestments.com/

ALOHA !!

Go to the UXG website and Rob McEwen has posted a chart at the very top with these words ... "YOU SHOULD PAY ATTENTION TO THIS CHART"!

Link: http://www.usgold.com/

ALOHA !!

In Jan 2008 I was in Perth, West Australia and gasoline was at $5.90US and I saw no real shortage of cars on the road! I did notice that I rarely saw an SUV or a jacked-up four wheeler!

I have been watching this blog and found many insightful opinions. Thank you.

I am relative new to trading. So, I'll have more questions than opinions or answers. Here is one -

There are a lot of smart people out there investing/trading. Even if oil peaks, what economic conditions people are seeing now that justifies for a "bull market correction" vs. Bear market rally? Dow Chemical's price hike of 20% is huge in my opinion. They are providing something even more intimate to our daily lives than steel and coal. Is market psychology outplaying technical/fundamental?

The old market adage says that the market moves approximately 6-9 months ahead of the economy. If so, are we living now at the January Low or March Low? And is a very Merry Christmas in store for us? If yall's answers are yes' to both, I'd tell my kids that there will be no birthday presents until Xmas.

Tell me I am not the only person who thinks all of the relevant information and data is not correctly priced into equities at this time. I feel more confused by the day when I look at the economic data in this country and see a completely different story line in stock prices. Everyday is a battle to steel my resolve that everything is not well despite the upticks and financial fomenting.

Does it really come down to technical analysis or is there still room for fundamentals. I'm trying to get the hang of this through the discourse I read and the comments from Bill but it has been an uphill battle.

On Crude Inventory Report and USO pull back -

"We believe the heating oil contract is down again because of the solid increase in stocks while the reversal in the crude contract is, in our opinion due to market participants now questioning the reliability of this week's data, especially whether import calculations are correct. We believe today's data, other than the questionable crude data, is at best neutral."

http://www.oilintel.com/newshome.cfm?news_id=6096&action=showstory

No one knows where gold will find a bottom; no one can predict the future. It could be here at 880, 850, 800. Bill feels the bottom will be at 800 and his crystal ball is better than anyones. However, we each need to learn how to trade and invest for ourselves and not rely on Bill's every word.

I've come up with my own system and I suggest everyone do the same. g034 has been saying this as well. Being right is worth nothing; making money is the only reward. Some traders are wrong 60% of the time and are still very successful.

Also remember that the gold miners have their own cycles. They will bottom at different times.

F6:

I always appreciate your comments.

In this time of chaos, everyone will be BOTH wrong and right, and we need all views in order to sort out a path we all can make work for us as investors. There is not a single path in this chaos but many, with fine details and corrections require in the navigation.

Yea TOG is coming, but for instance as anew investor I am still unclear what that means to me, how, I need to trade and work with the flows to move with that.

Hang in here, it is of benefit to us all, since together we are a community... yes nit picking and such at times, but still sharing.

peace

Bill,
Have you considered setting up a Facebook Page as a companion and link to this blog? I think that Facebook has more than 70 million members worldwide. IMO Facebook would provide you with increased functionality and an opportunity to provide multimedia communications at little or no cost. It would also allow those Bill Cara Community fans, who so desire, to get to know each other better.

[Bill Cara note:

I guess this is the next thing to do. I will look into it. Helpful advice would be appreciated.]

Telestar:

I don't follow gartman, but will speak to your general question wrt position sizing.

While I was first learning to trade, I began to investigate lots of position sizing/money mgmt systems. There is a concept called "risk to ruin" that you can model with Kelly formula. The problem inherent in this modeling is that you need to know or estimate your "edge" to be effective. But, it is still a useful tool for learning if not accuracy.

The position sizing should be based on the distance to your stop, and your risk per trade.

ex: Stock ABC is trading at 39.50. My stop, placed at an obvious support level (say a previous swing low, gap level, etc) is at 39.00. So I am risking 0.50 per share on the trade. I will size my position based on my allowable risk per trade. Many people use 1% or 2% of their trading account equity as their risk per trade.

Personally I use around 1/5 Kelly or about 1% risk per trade. So if my account is $50,000 I will risk $500 per trade. Therefore, my position size would be 500/0.5 = 1000 shares.

When you begin to see trading as something akin to playing blackjack with an edge through card counting, you'll be on your way. Make sure you have an edge when you enter a trade, and take those trades knowing that while probability is in your favor (hence the "edge") you may lose almost as often as you win or encounter extended strings of losses. Let go of the need for emotional validation (i.e. the need to be "right") on your trades.

All you can do in trading is find edges, and exploit them through disciplined, non-emotional, systematic trading systems. Bill's "simple system" using multiple time frame RSI analaysis combined with MACD is one "edge". Similarly, the quant focused folks might use days up or down in a row to develop an edge for the following session.

EX: the DIA has been down for 4 days in row. Historical analysis shows that after 4 down days in a row, the following day is an up day 72% of the time. (numbers are made up for illustration.) Dr. Ron Sen, who occasionally posts here, has a son Connor who wrote a book called "How markets really work" or something similar, that is basically just this kind of quant studies with some graphs depicting the data. I don't use this type of thing in my trading (and I don't trade the indexes) but it is a way develop edge(s).

Cara Community:

I've been lurking a long time. Typekey has kept me from posting all but maybe once or twice. What happened to MarkM? We used to stir the pot on ritholtz's blog quite a bit. Anyway, good to join the discussion.

Anyone know why the market is taking off today?

well vinod i guess you got your rotation from energy to tech / fin a day later!

so with XLF / BKX bouncing off their lower resistances, a possible relief in oil prices, anybody leaning towards a retest of the 200-day next week?

I see several questions today about why the market is not lower than it is. Number one, don't fight the market. Secondly, don't fight the market. I've been through that evolution so I understand.

Also, don't forget that any security will most likely return to mean. The market has just revisited the 200 day moving average, which is typical in the early stages of a bear market. Nothing goes in a straight line. Behavior from here will be telling.

Bear markets IMO are about the denial to acceptance psychological transition. The bad news will only be all priced in at the bottom. Until then participants will cling to denial and hope because they don't want to face the economic truth or don't know any better.

QID->adding at 37.64...

This is a link to a site I have used for some time now that charts the medium and long term Dow/Gold ratio, what I particularly like is that it is kept upto date too.Hope its of use to others.

http://tinyurl.com/2sp36

ALOHA !!

Who wrote this? "But when a long train of abuses and usurpations, pursuing invariably the same Object evinces a design to reduce them under absolute Despotism, it is their right, it is their duty, to throw off such Government, and to provide new Guards for their future security."

ALOHA !!

Today I bought ...

ECU(TSX)-20,000 shares

"But when a long train of abuses and usurpations..."

I think it was Jefferson in the Declaration of Independence.

RH

Kaimu the gutsy ! - ECU ....

I for one would appreciate any news or perspective on ECU, which has for so long disappointed. Maybe this is a double bottom ...

HI everyone

I am just curious

does anyone use

http://www.bullionvault.com/

any comments about this operation?

So far Perth Mint from Kaimu comes highly recommended but I am poking about seeking a second company to work with also. I like to try to work in pairs when possible.

How about CNU Kaimu? Would you buy more at 7.5c? Could buy a lot more with little money :-)

moab:

"Bear markets IMO are about the denial to acceptance psychological transition. The bad news will only be all priced in at the bottom."

Well said. For example, after the S&P 500 topped in Sept 2000, it did not reach the final bottom until Oct 2002 (~ 2 years later).

It looks like the final chapter of the BSC bailout is coming closer.

With the shareholder approval giving a boost to the financials, does anyone else see an opportunity here to get into SKF or maybe some LEH/MER puts?

VISO, your post from 10:26 this morning appears to be taken essentially word for word from Steve Saville's commentary for subscribers to his newsletter, published today. I do not see any attempt to credit Saville, and others have responded to your post as though the comments were your own. Saville reminds subscribers in every newsletter that any posting of this sort will result in immediate termination of one's subscription. Care to explain? For those not familiar with Saville's work, you can check him out at www.speculative-investor.com

Scaling into GFI a few cents above the 52 wk low.
(12.84).

12705 2nd....I think support/resistance is 12750 +/- nice entry on QID.....

SKF macd has been crossed and heading down but the price is resisting it.....buying a few SKF here.

Dang....I MEAN XLF macd....sorry folks....

jogyp/vinod- leaning towards holding onto SMN/DUG here...have no idea when the move comes, but i want to be holding when it does...

RE: Who wrote this? "But when a long train of abuses and usurpations, pursuing invariably the same Object evinces a design to reduce them under absolute Despotism, it is their right, it is their duty, to throw off such Government, and to provide new Guards for their future security."

------>Thomas Jefferson !!!!!

Congresswoman, on floor of house, paints pretty picture of the future landscape of US in developing North American business model. (7.5 minutes long and worth the time...IMHO)

http://tinyurl.com/3l8b5g

Congresswoman isnt as eloquent as Mr. Jefferson, but perhaps just as inciting.

DavidV- nice call on FXP earlier this week-> any interest in re-entering and at what point?

Alaskan Pete, thank you for your explanation on position sizing. I intend to get back to you with some questions, but I need to study this more.

The reason this is so interesting is that Tharp took one system and he tested the models on the same trading system, so the only variable was the position sizing. The simulations were run with an initial equity of $1,000,000 and took 595 trades over a 5.5 year period.

From TraderMike’s site:

“The models produced drastically different results:

• The worst was the baseline model which just bought 100 shares of stock whenever a signal was given. That model returned $32,567 or 0.58% annualized.
• Fixed-amount model: This method traded 100 shares per $100,000 in equity. It returned $237,457 or 5.75% annualized.
• Equal leverage model: Each position in this model was 3% of the account equity. So at the start of the trial each position was $30,000. This method returned $231,121.
• Percent risk model: According to this model positions were sized such that the initial risk exposure was 1% of the account equity. So with $1,000,000 equity the initial risk would be $10,000. So if the initial stop on a trade was $1 the system would trade 10,000 shares. For an initial stop of 50 cents the system would trade 20,000 shares, etc. This model returned $1,840,493 or 20.92% annualized.
• Percent Volatility model: Positions were sized based on each stock’s volatility — the more volatile the stock the fewer shares are traded. For this trial positions were pegged at 0.5% volatility (initially $5,000 per position) — so if a stock’s average true range was $5 the system would trade 1,000 shares. This model returned $2,109,266 or 22.93% annualized.”

Again, using just one trading system, look at the incredible difference in results based on position size. The only draw back to this is the analysis is hypothetical. I think in your example to me you demonstrated the “Percent risk model.”
With respect to the Kelly Formula, there is a book titled Fortune’s Formula by William Poundstone which details the history and evolution of the Kelly criteria.
Thank you again. T3D

mebea Posted 12:09 PM

...I am not the only person who thinks all of the...is not correctly priced into equities at this time.
This is answered above by moab....
"Bear markets IMO are about the denial to acceptance psychological transition"
and then you ask.....
"Does it really come down to technical analysis or is there still room for fundamentals.".... I try to use both. To make an analogy...
If I analyze the performance of my car I look at service records (earning statements), I look at condition of the engine and I monitor mileage. Does this tell me how well it will perform in the future? The fundementals would be the make of the car, again my history with it, what I paid for it, last oil change and as Bill points out...the jockey. I had a luxury van bought slightly used that I lovingly maintained. I had a teen age son. Ah well you can guess the rest of the story!

To Alaskan Pete ...thanks thats as concise an explanation of sizing and risk management as I have seen.

Thanks to ALL posters

Opportunity to profit comes from the divergence of price from fundamentals and the eventual guaranteed convergence. However, you have to watch the technicals to see when this convergence is more likely to take place. In the tech bubble it took several years for the fundamentals to finally exert themselves and the price to catch up to them.

Many people forget, but commodities stocks were trading at depressed levels at that point setting up a positive divergence.

BirdDog

You are right, it's my fault

One more thing - fundamentals tell you what side of the trade to take and technicals/sentiment tell you when to try the trade.

Bought some SKF June 130 calls.

Short term scalp at best, thinking today was a little euphoric in the financials, we'll see...

Some Questions:

1. I am starting the AACI (Accredited Appraiser Canadian Institute) program next month. Was this a good decision?

2. How come Jim Sinclair never talks about the gold and silver basis. Also, how do you apply fibonacci numbers to trading?

3. Does anyone use questrade?

craig did you mean you were taking a position in xlf?

CUQ.to - Churchill Corporation

Sold my holding to clear out my position. Too Volatile and not waiting to see if it will break out of the trading range. Time to raise cash again for some new short-term trends developing in Oil and Gold sectors.

From January 31, 2008 to today, a return of 27%. A Buffet number in 4 months. I will take it.

GIX.to - Geologix Explorations Inc

kaimu - this one has worked out well for both of us. Up 31% for initial purchase. Did not buy more with your down at $1.40. Looking at taking partial profits unless you know something here that I don't know. Short-term I have a possible reversal down on the charts. Longer-term it is a hold and going higher.

HED.to - Horizons BPro S&P/TSX Capped Energy Bear

Working out well. Still undecided about adding to this position this week. Charts favour a move up for this ETF based on the negative signals on the charts for the canadian oil stocks.

Remember to do your own Due Diligence on any stock I mention. I am not your investment advisor. Just telling you what I am actioning. Appreciate the information that other post about their canadian stock trades and investment outlook. Cheers. [048]

Oil price declining on good news today seems to indicate a top is in.

Gray: No, I took a position in SKF, the ultra-opposite to XLF....although the chart is iffy.
I think XLF retests the low. Warning: I've been wrong before and was a couple times today.

You will notice I bought SKF on the XLF macd downturn and it has borne no fruit....someone is/was buying financials....now it looks like it wants to turn down again but we keep bouncing off the DJIA 50 DMA.

T3D:

Interesting results from Tharp. And yes, the system I described is % risk. There is also another element if you decide to use a % risk approach and that is whether to have it truly "fixed" and adjust it after every trade based on your account equity or to use an anti-martingale, or martingale strategy. Unless you have a rather large account, or trade in odd lots, it doesn't matter much as your risk amount and hence position size wouldn't vary much between those strategies. Personally, I use a fixed % risk and don't use martingale or anti-martingale strategies.

You mention a volatility based method of sizing.
If you ever have the chance to read the "Original Turtle Rules", do so. It is the best single description of developing a trading strategy I've ever seen. And in addressing volatility, it is an eye opener. Instead of position sizing from volatility, it incorporates volatility into determining the stop level.

I've toyed a bit with incorporating (volatility)this into my methods, but it just doesn't help me. If I were trading donchian channel breakouts in commodities like the Turtles, maybe it would be useful, but I prefer to set my stops based on TA...obvious chart levels...rather than based on the normal volatility of the stock.

Basically, the anti-martingale would reduce your risk amount after losses and increase it after gains. Martingale would be the opposite...an old example would be a series of "double or nothing" bets.

As a side note: Thanks to whoever mentioned CNSL last week (Craig or 2nd maybe?). I don't normally toy with stocks with such a low daily vol, but the TA was compelling...I had a reasonably tight stop at an obvious prior low/support area. Got in at 13.81, trading today about 15.40, not bad for a week.

By Ambrose Evans-Pritchard

http://tinyurl.com/6kwtkp

"Willem Sels, a credit analyst at Dresdner Kleinwort, said the banks are beginning to face waves of defaults on credit cards, car loans, and now corporate loans. "We believe we're entering Phase II. The liquidity crisis has eased a little, but the real credit losses are accelerating. The worst is yet to come," he said.

The jump in corporate bankruptcies has not yet been picked up by the usual indicators, which tend to lag the market, lulling investors into a false sense of security. The true losses are already known to specialists in the business, said Mr Sels.

any bets the market closes in the red, along with XLB/XLE?

vinod- congrats on your airlines play (DAL/NWA/UAUA)->all up between 6-8%...nice surprise next time you get a break at work, my man...

maybe the airlines are an even better indicator the top in oil might be in?

What's pissing me off is I bought the garbage at 1.08, threw in the towel at a buck 6 after oil seemed to stabilize, and hit the golf course. Came back and saw I missed out on a nice f-ing move. I maybe ought to go back to a life of crime, it's more of a sure thing.

Watching MS for potential put entry point.

Also rcvd my economic stimulus payment - eighteen hundred large wonder dollars! Plan to spend on vacation in Spain coming up in 2 weeks!

Alaska Pete: Glad to read you here, haven't heard from you for some time as I haven't been checking Barry's site too often...I get his market letter though.

Bull Hunter brought CNSL to my attention some time ago and I added it to my watchlist noticing the 13.60 52 wk low (at that time) so I started accumulating around 13.80 - 14.00 and added a good deal more @13.51. Then BH was kind enough to report the Credit Suisse upgrade just as I filled out my position. I was just thinking of the $1.55 dividend on a $13.83 basis (11.25%) but I'll take the cap gains as well! I sold a little today but will add back on any decent dips.

Good on ya!

Craig - With you adding GFI at/near today's 52-week low; see my 1:06pm skype post......Is anybody still using skype (other than charlie_g, nex, & spuds)? Only 4 skype posts today.

MikeNYC,

I'm not capitulating and going long oil. Today confirms it, after the Memorial day weekend when nobody drove anywhere.

The top is in in oil, and gold topped out around 1000. Remember how you were gonna see me at $1200? Didn't happen won't happen. Oil's coming down now too. Just looking for a good re-entry.

shark_attaturk:

are you looking for a good re-entry on
oil or gold? (or both?)

2nd_ave,

im holding, and adding to smn. its going to work out nicely.

2nd:

I think Twiggs expected resistance for the Dow at 12,750:

http://www.incrediblecharts.com/tradingdiary/2008-05-24.php

U.S. regulators probe oil markets
http://tinyurl.com/5wlqoo

short oil

ALOHA !!

SiO2 ... I did buy 40,000 more CNU at $0.08CDN!

ECU SILVER
Okay, aside from the general melaise of the entire junior exploration sector ECU share price has not performed well. A quick look at a one year chart and that's a given!

Some of the main criticisms of ECU are as follows:

- Narrow epithermal veins metallurgy makes it too costly and challenging to process.
- Too much exploration and not enough production.
- Outsized "potential ounces" compared to measured and indicated.
- Funding.

Those are valid issues, but as I like to point out ECU has already been producing concentrates of lead(silver), zinc, and pyrite(gold). In fact, one past quarter in 2006 they reported a profit from operations. Even today they are still in production with their 300t/d mill going and they are now stockpiling concentrates and are even processing some copper. Prior production was being sold to Penoles, but now they are in talks with Chinese smelters and based on larger production they may get a better price from the Chinese than the Mexicans.

Right now ECU is working on a Pre-Feasability study that will be out by Dec 2008 to upgrade to a 1500 t/d mill. They are currently batch testing with Dan Kappes metallurgy circuits with the final tests on the pyrite circuit due within two weeks that will be able to provide info needed to negotiate concentrate contracts with the Chinese smelters.

Currently ECU has $12milUSD cash available and the President/CEO insists no more share dilution will occur.

I believe the ECU fundamentals are in place for a successful mining operation with a large deposit to feed a longer mine life. I guess not much will happen until GoldCorp comes knocking!

Double bottom? We'll see after tomorrow as the POG sellers try to keep the negative sentiment going over the weekend by taking down gold and silver on Friday and the whole opex is working this time!

I am thinking of entering a bear call spread on NVDA.

Their new chip seems to be underwhelming:

http://www.theinquirer.net/gb/inquirer/news/2008/05/29/nvidia-gt200-sucessor-tapes

From: Jesse's Café Américain

The Great Bond Crash of 2008, 2007, 2006, 2005....

As we forecast the great bond crash of 20xx is now underway.

Every year the bond puts in a top early in the year, and then crashes down to a low something in June or July as stock rotations are served up for the small spec, to take on the excess shares that Wall Street wishes to unload as part of its "sell in May and go away" gambit.

And there it is.

Sometimes an intentional shaking of markets can build up feedbacks to the natural frequency of a thing, as Nikolas Tesla demonstrated. If the Wall Street wiseguys keep shaking the national economy, we might be in for a real earth-shaking finish to the year.

Wall Street is an impediment, a drain, a parasite on the real economy.

The banks must be restrained

2nd
thanks for your comments
do not have time to read all post right now
I am keeping all untill tomorow
If you draw chart of USO and any airline (DAL/NWA/UAUA)
will give you ide that it moves inverse to USO

craig
first time I brough some GFI

Got a nice fill on my NVDA Sept $22.5/$32.5 bear call spread -- $2.70 credit per share :) My break-even is $25.20, with the option of converting the trade into a short upon expiration.

ALOHA !!

BernardF ... Yes GIX is a keeper!

Poor, suffering bankers of HB&B, eat your hearts out:

Keith Barron is ONE RICH geologist -

Insider transactions filed on May 27, 2008
Source: SEDI
Keith Barron, co-founder and former director of Aurelian Resources Inc., sold 15,600 company common shares at $4.35 each on May 15 through May 21, 2008, bringing his total common share holdings to 13,992,400 shares.

Folks, that's about $60M, even at today's price for ARU. One of you at HB&B has probably sold the good Dr. Barron a "collar" ... so, he'll hang onto most of that whatEVER happens in Ecuador ...

Vinod: I hope it works as well for you as ESLR did for me! Good luck!

jeremy- thanks for weighing in...i've seen SMN take off either way, and trying not to get shaken out before the next move...

2nd
When you buy SMN and are shorting basic materials, what are you actually betting against? The housing industry?

Kaimu - ECU

Impressive operational considerations, but help me understand. In terms of resources defined, they published in Jan 25M oz measured, and 13M oz indicated, the ultimate "retail" value of which is about $570M (with no haircut for in situ status).

ECU's cap is already $357M. So, I guess you are assuming that their veins will prove economical to mine, AND that they will convert a lot of the 179M inferred ounces to reserves? They also cited north of 464M oz of "potential resources". Are you giving them significant credit for that too?

zeto- no, just betting on reversion to the mean...

2nd,

it could go to 35-40 when it starts to move.

it will be like the sell-off in gold...

IMHO, the TOD has not commenced yet. When the stock market corrects, I see investors rushing into treasuries taking down the yield.

I nibbled on Jan 2010 TLT puts one month back, but am not purchasing more at these levels. I think we will get better opportunities.

AlaskanPete, thanks for the additional info, I just printed out the original turtles trading rules.

By the way, rumor has it that this is AlaskanPete’s trading room. Enjoy!

http://tinyurl.com/2jj9nw

my target is around 40. if it hits that ill sell 3/4 of my position.

Now that oil and gold are heading south, I'm wondering when the next wave of bad financial debt will be announced.

Thoughts on RSI and when to sell:

Assume a long position of 1000 shares XYZ Corp

I've been tinkering with selling a partial position when the daily RSI hits 70 (300 shares), selling another partial when the weekly RSI hits 70 (300 again), and selling the rest in accordance with the normal approach discussed on this site.

Anyone here have an opinion on this way versus other stock exit strategies?
All ears here . . . Thanks!

Oh, and thank you to Kaimu for bringing LYM to my attention. It's been fun buying and watching the past few days--I might have to buy some orchids with some partial profits along the way. ;-)

2nd
Just a note
Market usually jumps on first week of the month
So, Friday is last day to check all short

ALOHA !!

Yes Jock, I am counting on ECU's 179mil ounces to become indicated. I also believe that some of the 400-800 mil Ag ozs will be moved into inferred category in 2008 since that is what the Terneras veins are all about(last news release). The discoveries just keep on coming N-S-E-W !!! Go back to some of the past drill results going back to 2006 on the Terneras deposit. All together they have five mines in a very local proximity.

Jim Sinclair
Dear Friends,
I am staying with the position that the price of gold established its LOW in this reaction period on April 28th.
We are entering into an area of major support as gold trades below the $887.50 Angel. That Angel will demonstrate its magnetic influence by pulling gold to the upside.
A worst case scenario bottom on this second decline will be within a range of $18 to $22 under that Angel. A more likely scenario is $10 to $14 under.
In terms of a timeframe to establish the absolute low, which will be a huge Bear Trap, is a few days at the most.
After this absolute low has been established, the $1200 magnet will start pulling on the price of gold once again.

1200, easy, fin-man.

History repeating. Please examine closely:

http://stockcharts.com/h-sc/ui?s=$GOLD&p=D&yr=3&mn=0&dy=0&id=p79123507638

It's called "consolidation" and "breakout." Look it up.

Might be next fall. But it's coming.

You and I just have very different time frames.

But hey, man, don't get all up in my grill! You're looking at the guy who kept his DCR and didn't get whipsawed. "I'm King of the World!!!"

(Just kidding - I also fat fingered and screwed up an order. This, after laughing at the posts of others who have done the same. Ah, the humility...)

I re-iterate: DCR is a super cheap non-expiring put on oil. And I thank you for bringing it to my attention.

Time for a beer.

MikeNYC: why do you say that DCR is a "non-expiring" put option on oil? Won't it stop trading at the end of June, since its termination clause has been hit (oil closed above $111 for 3 consecutive days)? And if oil is above 120 at the end of June, DRC will be worth 0 -- am I understanding the situation correctly?

Thanks,

DavidV

Ouch. Thanks DavidV. I didn't understand the instrument.

But it's still time for a beer.

Posted by: 2nd_ave: "DavidV- nice call on FXP earlier this week-> any interest in re-entering and at what point?"

2nd, my logic for exiting FXP was that it should fall (together with other ultrashorts) if oil falls. Oil is just looking ready to roll over, and I have been gradually adjusting my portfolio for this scenario. I sold my GLD holding at a small loss the day I quit FXP (I held GLD only for a day or two), as I figured gold will fall together with oil, and I wanted to practice taking losses. :) Today I bought July put options on USO with a strike price of 100. Tomorrow I may buy more such options or some DCR, if I figure out why it is a "non-expiring" put option, as MikeNYC called it.

To answer your question regarding FXP, I would like to see what would happen if I try following now the Dennis Gartman's rule of being a "wise mercenary soldier" and always fighting on the winning side. As long as oil is going down, the winning side will be up for the market. So I am more concerned now with closing my remaining ultrashorts than with buying FXP. This is a medium-term view, and since I don't follow the market closely, there may be many intra-day trading opportunities for FXP.

If I do decide to increase my short position, I will increase my XHB short, which looks like the weakest market sector for now (XHB traditionally trades opposite to bond yields). This would be following another Gartman's rule: weakness begets more weakness, so it makes sense to throw stones into the wettest piece of paper, which is most likely to break.

DavidV

The DCR 'put' expires June 30, the date of record for the distributon of the trust.

So it's kind of a June put with a 120 strike.

Above 120 the NAV of the trust is zero. Below 120 the value is, er, that's my homework tonight. There's a formula involving the NAV of UCR.

Please, correct me again if I'm wrong.

MikeNYC: the NAV of DCR is MAX[0,120 - (crude oil price at the end of June)/3], as described in http://tinyurl.com/3pp4xb

DavidV

Sorry, make that MAX[0,40 - (crude oil price at the end of June)/3]

At 100/barrel I get 6.67/share.
At 110 I see 3.33.

It's NAV(DCR)=40-NAV(UCR), according to that article.

NAV(UCR) is (front month)/3.

Does that sound right? This is quick back of a post it math.

It's still a nice little hedge to my long drillers.

2nd

Let me rephrase my question on SMN.

What needs to happen in the economy for it to rise and what are basic materials?

zeto- come on, man...some things you just have to look up:

IYM:

"Dow Jones U.S. Basic Materials Sector Index Fund (the Fund) seeks investment results that correspond generally to the price and yield performance of the Dow Jones U.S. Basic Materials Index (the Index). The Index measures the performance of the basic materials sector of the United States equity market, and includes companies in sectors, such as chemicals, forestry and paper, industrial metals and mining. The Index is a subset of the Dow Jones U.S. Total Market Index and is capitalization weighted. The Fund invests in a representative sample of securities included in the Index that collectively has an investment profile similar to the Index. The Fund's investment advisor is Barclays Global Fund Advisors."

Top 10 holdings:

AIR PRODUCTS CHEM APD 3.43
ALCOA INC AA 5.44
DU PONT E I DE NEM DD 7.79
FREEPORT MCMORAN B FCX 6.8
MONSANTO COMPANY MON 11.19
NEWMONT MIN CP (HLDG NEM 3.64
NUCOR CP NUE 3.29
PRAXAIR INC PX 4.93
DOW CHEMICAL DOW 6.45
MOSAIC COMPANY (THE) MOS 2.79

whatever lowers demand for these products will do it...a slowing global economy, maybe?

Let me clarify my position about "fighting on the winning side." Even though I think the market will move up as oil falls, I am still very concerned about the overall economic situation, and so I am not ready to buy market indices. TBT could be an interesting way to play on the market moving up (since bonds get sold when stocks rise), but if the market is moving up because of the falling oil price, the upward TBT potential could be limited, since the talking heads will start screaming about the end of inflation pretty soon (as they watch oil fall). So, not being ready to bet on the market moving up or down, I'll try to focus on oil now and buy oil puts (so as to limit my loss in case oil spikes due to some geopolitical event).

DavidV

2nd

Sorry for the trouble. When I searched the Pro Share Web site I ended up at the Overview section and didn't see the index link which would of taken me to the info I was looking for.
Thank you.

just posted a 1 year chart of the Canadian Financials ETF: XFN.TO. mixed signals.

http://jglobal.blogspot.com

David- the squeeze in oil just feels like it's getting old...depending on how strong the speculation component has been, i can imagine traders starting to game the move for the exits...wouldn't surprise me one bit if T Boone has a short bet on oil and a dinner bet on how close to 150 it gets before the tide turns...

vinod- so you think the first week of trading in June will trump the EOM run-up friday...you may be right, as i am leaning towards a sell-off into EOM this time...

re DCR- based on what i'm reading, the last day of trading will be june 25 (not the end of june)...

fwiw, inclined to take a *small* position, as 'bets' of this sort have a tendency to transcend logic and pay off...can oil drop 20%+ in the next 3 1/2 weeks- absolutely...

re the gold trade- if you haven't already, DGP should be on the watchlist...down to the teens, then up to 30 or 40+?

2nd,

yes. gold should pull back about $70 more. then im going to load the dgp boat.

Mike and 2nd,

Re: DCR...Have either of you guys figured out what the termination clause is/means and how it effects/will effect the etf and the way it will trade frior to termination?

Wow,

If what you say above is true Mike this thing is WAY riskier than I previously understood and is probably not to be touched eh?

shark- april 17 Buiness Wire:

MADISON, N.J.--(BUSINESS WIRE)--The NYMEX light sweet crude oil futures contract for June closed at $114.36 on Wednesday, April 16th at 2:30. This marked the third consecutive business day that the reference price for MacroShares Oil Up and Down (UCR and DCR respectively) closed at or above $111. This triggered an early termination event for the securities.

The last day of trading for UCR and DCR will be June 25, 2008.

On July 3rd, a final distribution payment will be made to the UCR and DCR shareholders of record as of June 30th based on the underlying value of the Up and Down MacroShares Trusts. The underlying value of the trusts will be determined based on the June 25th closing price of the NYMEX light sweet crude oil futures contract for August.

MacroShares Oil was launched on the American Stock Exchange on November 30, 2006, as the first product in a family of new, patented securities. MacroShare Oil’s unique paired structure is comprised of an Up Trust (UCR) and a Down Trust (DCR) that are equally collateralized. As MacroShares Up increases in value, MacroShares Down decreases in value by the same dollar amount.

Sam Masucci, CEO of MacroMarkets, which created and manages the products, commented “UCR and DCR were our first MacroShare products. Since they launched, we’ve been educating investors on this unique structure, and gauging the market’s reaction. Currently, the securities have over $300 Million in assets under management and are trading over 3 Million shares per day, which clearly demonstrate the market’s acceptance and willingness to trade the product.”

but fear not:

"Many investors have asked if there will be another MacroShare Oil product. Sam noted, “We recently filed a prospectus with the SEC to offer a new MacroShares Oil product based on a benchmark Crude Oil price of $100. MacroShares $100 Oil, as well as several other new MacroShares products, are currently under development and are in direct response to the market’s interest in applying our unique structure to important asset classes.”

shark- if you're going to be CEO of UBS, you need to act like one...how can you NOT have a chip riding on this play ;)

shark,
It all depends on if you think it will finish in the money or not.

here's my calculations,not to be trusted:

115 - 40 - (114/3)= 1.67
110: 3.33
100: 6.67
95: 8.32
90: 10.00

I have a very tiny bit. y'all would laugh if you knew how much. That's all I want or need of this. It's pretty much just an option at this point. I bet it's priced just like the June puts.

2nd: thanks. June 30 is apparently the distribution date.

2nd,

Mike wrote:

"Above 120 the NAV of the trust is zero. Below 120 the value is, er, that's my homework tonight."

If that's true, then as I said this thing is a ticking time bomb and staying away from it, if it proves to be accurate info, is precisely how I would have saved the shareholders in the UBS scenario. Your expression "a chip riding on it" implies a Vegas style gamble, which we both know professional trading is not. So tell me...Is Mike accurate on this point? What else have you figured out? Where can I read the salient info?

2nd: the diff is UBS uses OPM!

You know it's the bizzaro world when the shark is more conservative in his bets than the banks.

There are a ton of articles on this at seekingalpha.

If you wouldn't buy June 120 puts on oil, don't buy this.

shark- if you can explain the difference between DCR and a CDO to the shareholders of UBS, then you deserve to be the CEO....

i know it's a gamble, which is why i used the language i did...

all the same, from a contrarian standpoint, it's unreal how often positions "not to be touched" turn out well...let's see what happens...no position at this time, but definitely interested...

actually, what's unreal is that mike answered my question before i posted it...LOL...

2nd: if only my psychic powers applied to the market!

2nd,
DEE looks interesting too

if your DCR position pays off 6.7 or 10:1, then they do...;)

jeremy- you need to send your email address to direxion funds..their kind of client ;)

http://tinyurl.com/3mnhnc

smn and dee are just trades. commodities will pull back here a bit. then im going to load the gold boat.

Is anyone thinking about DELL for tomorrow, or is it too late?

ALOHA !!

johnUK ... Thanks for the FRED site on the DOW/GOLD ratio!!! Here is a quote he makes, "The chart shows that it would be logical to expect the ratio to return to a value around 6. Perhaps a ratio of 6 would be gold 1200, Dow 7200."

During inflationary times of War and monetary/economic turmoil(now) it has always been that the benefactor of the "money spigot" has always been the stock market. This is so clear to me, especially after seeing how the US FED came to the rescue of BSC. Now "rescue" may seem an inappropriate word for BSC shareholders and employees, but $10 is better than $0 and even $2 is better than $0 if you look at it from that aspect. Take a look at what Enron shareholders got in the end!

In the wisdom of the banking elite and its accomplice the US government the American public has been sold a bill of goods on DEBT and the AMERICAN DREAM, which are one in the same. What came out of that historically high 44:1 G/D ratio was a very lopsided weighting of paper assets over gold(real money). One look at the comments here on Bills Blog and that is very self evident as many people here have a vast majority of their "wealth" tied up in the American Dream and the US stock market. The American Dream supplies your basics of shelter and the US stock market represents every American's hopes of retirement. This is why the US FED fought so hard to brush the BSC toxins under the rug. I mean one weekend and a venerable US institution was gone! Much like Nick Leeson's takedown of Barings Bank! Poooof ... vaporized into thin air!! Imagine what rage will happen if the US stock markets collapse? That means none of the 77mil baby-boomers who bought into paper assets will be able to retire! NO ... the US government with help of the US FED will do all it can do to print as much US Pesos as humanly possible to keep paper assets afloat, which means the US stock markets and happy baby-boomers!

Going back to Vadym's rule about trades and the "comfort level". If you own gold you are betting against the US government and the US FED and the entire US financial system as well as the global monetary and financial system! I have to tell you that is about the most uncomfortable bet I have ever taken on in my entire life! That's classic David against Golaith! I try not to think about what is at stake here, because everyone's future in the entire World is at stake on this "fiat bet"! Yet if you study past monetary history you will come to the indisputable conclusion that fiat has always failed! Sometimes I wake up and I wish I was blissfully ignorant again as I was in the 1970s just travelling the World surfing with my entire accumulated wealth in one backpack! A can of pineapple juice and fish curry at Poon's in Nadi,Fiji! CPI? Whats that mean? DOW what? Gold? Yeah, I saw Goldfinger! I guess you could say my goal now is to be able to "afford" blissful ignorance again!

My Father once wrote me a long letter on the unproductive nature of surfing and how I should pursue the accumulation of money more vigorously. He never understood it was a spiritual thing I was pursuing and that was my church! It is a meditative state where the ills of the World falls into the nothingness of floating on water! Hummmm ... yes!

Okay ... So the DOW/Gold ratio chart is really a chart of the haves and the have nots! I predict a vast fortune will be lost in America trading the markets successfully! In my case I have literally, "bet the farm"! HA!!! Of well, there's worse fates like having nothing spiritual in your life ...

ALOHA !!

Has anyone here given much thought to the recent trips Warren buffet has taken to China and Europe(Germany)? A few years ago he bet against the USDX in a most open and direct way on the FOREX and got whacked good for that effort. I take those trips to foreign lands as Bu