Good morning.

One Cara 100 Ratings Change to report at this time:

NUE - Downgraded to Neutral @ UBS

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

Have a great day.

Glass half full or...?

Let's see, talking heads say tech has "overcome" financials as the larget % of the S&P.

Wouldn't it be more accurate to say financials have fallen dramatically to meet tech, the last extreme bubble, trying to rise to it's previous 2000 levels?

Has technology risen to the level it was 8 years ago? NO? Hmmm. It SEEMS like such a meaningful comparison.....NOT!

theres nothing like the misguided idea that tech stocks are defensive during a bear market.

i can just picture all these struggling corporations who's share prices are falling, and laying off staff, but upping thier IT budgets.

barf.

XLF is looking like its in a stall pattern about to turn down, and im concerned that gold may get struck should oil correct. though everyone has been calling for an imminent correction in crude since it crossed $105, and did the same a while back when it crossed $80. nothing makes sense anymore!

Keep your eyes open....

This environment brings higher prices to some areas where we can benefit.

Last night we went to Costco and got a surprise passing the meat cooler. Whole Tenderloins for $8.59 a lb. Those that shop know beef tenderloin (tenderloin and filet mignon) runs a few bucks higher than $8.59 (around $11-12).

Now these tenderloins did need to be sold in a day or two, but I'm thinking most people pass that part of the cooler heading for the rice and less expensive ground beef in times like these leading to price reductions in some products.

You may be able to stock the freezer for all of this summer's BBQ's on sale!

No position in COST.

crystallex. ---kry.---------- don't wanna both anyone to much re: venezuela and thier gold. what is the true story here. permit or not anytime soon. all have a wonderful day russty.

Come-on rusty, let's move on the the 3000 better trades out there..... leave kry to henny penny and chicken little.

Rusty,

Where have you been my man? Crystallex will not be the the company that gets permited. That was announced last week officially. Best I can figure is their share price is a bet on the price Chavez MAY pay them to get lost. It's a very sad story. But of course, as long as the gold is in the ground there's always hope in some sense or other that someday, someway, that elephantine pile of gold could be ours.

Re: Sask Coal Rush

We are still seeing stock prices bid up in the following companies: GXS.V, WGF.V, NAG.V.

I presume that WGF.V had obtained a land package between that of GXS.V (who have discovered a large, sub-bituminous coal seam) and NAG.V (who have staked land and obtained concessions from a company with prior smaller coal seam results in the same rock.) WGF.V may be placed between these two, denoting the size of the deposit. Maps of the various positions of the companies will emerge attesting to the locations of the drill plays.

Price action will continue throughout the week, eventually letters of comfort from the provincial gubmint in the ensuing days and financing will be obtained by all of these companies in order to advance their drill plays.

F6

craig - don't remember where i read it, but apparently herds are being killed and frozen now because feed prices are killing livestock farmers. There is a glut of supply that will take us through the next few months, then, that tenderloin is gonna get really pricey.

i have noticed cheaper meat prices too, so investing in a good freezer might be a smart move if you are a carnivore. seaboard, smithfield, hormel, etc. might be buys for the future, if they can pass on the costs.

no inflation, though. BLS will assume we switch to ground chuck, or bottom round, or old shoe leather...

Re: Sask Coal Rush

Supplementary: strong insider selling on NAG.V at the onset of the coal rush. GXS.V had insider buying, and WGF.V had no insider transactions during the last few months.

Checked it meself.

You read it right here last Friday (Coxe). Excess meat supply at the moment, a lot of culling going on driving, prices low now, heading much higher in the Fall. Stock up your freezer now.

Also looking at higher electricity prices.

Craig,

That is the best news I have heard all week.

I can't wait to pick some up at costco!

Thank you!

>>>"Traders must realize that the pendulum will swing as it did in the 1970’s and early 1980’s when Bear phases crushed the speculation in oil and precious metals that happened in that cycle, as it has in every cycle."

I get the sense that you are expecting this before your major buy signal. I'm not sure that I see central banks raising rates dramatically in an attempt to crush inflation expectations in the short term. A lot of this may just be psychological maneuvering, but increasing rates while still facilitating extra auctions may prove fruitless for them as real liquidity via the Fed keeping some items from self destructing, coupled with foreign central bank money expansion (Fed is not expanding) and oil money recycling/SWFs also may keep this going to a higher level from here.

Would they actually try to withdraw real effective liquidity in order to demolish inflation expectations and commodity prices? Well, we have a minimum of $1 trillion in credit derivatives which should implode, IMHO, not to mention consumer credit card debt and commercial real estate exacting a toll. I doubt Bernanke et al will risk deflation consuming all inflation. So, I would suggest that we may see a natural correction but it may correct later to levels much higher than we are now.

Gold may not see these low levels again and the dollar may not see these high levels again. I guess we will have to wait and see.

Glad to be of service!

ALOHA !!

Two Texas oil patch stocks I ran across the other day seem to be falling knives in reverse!

MXC:AMEX
FPP:AMEX

MXC has some 1.76mil shares out and FPP has some 8mil shares out!

I am assuming there is a rush on to get hold of very small independent oil companies in the Texas, Louisiana, Oklahoma areas of the past OIL RUSH DAYS! Both are profitable although they are no SunCor since revenues are very small in comparison to the BIG guys! I have not had a chance to look at the reserves side of the equation yet, but perhaps that will explain some things! Hummmmm ... Well, having such a small amount of shares outstanding helps!

MXC went from a $3USD stock to $52USD as of today all in about 30 days!

Both are up substantially today again!! Will FPP be another MXC? Can a falling knife fall UP? HA!!

ALOHA !!

Ooops ... since my last post MXC is up another $1 to $53!!

WSJ online: Quote of the Day

"This is unbelievable. Most of these letters now have the same wording. Obviously they are being counseled by some other person or by the Internet. Disgusting," Countrywide Financial Chairman Angelo Mozilo wrote, after apparently clicking "reply" when he meant to "forward" a mortgage customer's plea for help.

The email from Mr. Mozilo -- who has been criticized for his massive compensation packages at a time when Countrywide was reeling under the subprime-mortgage crisis -- rocketed back to the customer, who had asked Countrywide to modify the terms of his adjustable-rate loan so he wouldn't lose his home of 16 years, the Los Angeles Times reports.

yeah Kaimu, the junior energy explorers as a group are on fire this week. This market is insane. Add:

SPND.OB +1.50 20%
TGC +.17 17.75%

And that's just today.

LEH sub-40 today - does wall street need a new donkey to pin the tail on? I think there is a good chance Goldman owns Lehman by year end. Hank's buddies at Goldman must be waiting for Hank to finish the gift wrapping.....Anyone else think this is/sin't a likely scenario?

The action in the oils seems like a dress rehearsal for the action in the golds that may take place in the next few years. When the majors are in the stratosphere and speculation rules, the greed of traders and mom and pop chase the juniors to even greater heights.

And then it all comes crashing down.

Geez...I'm not sure I want to chase these jr oils....it's like merging onto the autobahn driving my riding lawnmower....

ALOHA !!

moab ... I have likened the junior PMs to be like the old dotcom and fiber optic days when all you had to do was buy anything with ".com" on it or buy anything with the word "fiber" in it! Anything with the word "gold" on it ...

I know a lot of people here are underwater on their PM shares but the day is coming when the PM juniors will look like the OIL jrs do now! Think back prior to the "dotcom craze" and who would have thought internet stocks would be so valuable especially when none of them had a profit! Back then the internet mania was so BIG I recall vividly how the dotcom analysts made fun of Warren Buffet for not joining in on the mayhem!!!

Craig ... YEAH ... that's a good one! HA!!

GE getting hit hard today. I'm thinking of picking up more for the dividend in June. Any comments?

A co-worker of mine working for one of the banks once said that $55/barrel oil was a disaster for the economy. I wonder what he feels like with $131/barrel?

Or is oil really still $55/barrel + speculation premium in non-inflationary $$$, but the USD has gone to pot?

Sign of what's to come?

Well here we go-- http://tinyurl.com/6983wu

Death Valley, reminds me of the Baker-Vegas relay race. Now that was a challenge!

Was wondering what the price of oil would be if Sadaam was still in power?

Just thinking....

While the skype idea is great, it does cut into the traffic on the blog, which is what a portion of the commercial value is/can be based on.

It is good for individuals but it kinda bites the hand...no?

I know this post can be read by our skype participants, but it really should run both ways so the post count and topics work to the advantage of the blog and all Caraistas.

JMO.

wavesmash

GE has a financial division, maybe a tell of more write downs, not only by them, but other financials too. Whitney had some points the other day about more to come.

Well, would you look at that, DJ-30 low of the day = 12,724.30 (so far), EMA50 = 12,720.52, off by 3.78, sorry, will try harder next time :(

From UBB to LBB (almost) in 2 days, the puts paid well!

good trading,
Ralph
http://successfulonlinetrading.com/blogs

You may want to do a search for Bill's GE report a while back....

("If my child were killed in Iraq, I would blame the likes of Jeffrey Immelt," the head of GE, O'Reilly recently said.)

Gotta love Bill O'Reilly. What a jerk. :)

http://tinyurl.com/63dyej

GE only brings in $176 billion in revenue. I think I may buy some more.

I wonder if Mr. BO is buying shares...

"He likes to talk about ideas for investing. When he worked with James Cramer, a former hedge fund manager who now appears on ''Kudlow & Cramer'' on the rival CNBC, in the same time slot as Mr. O'Reilly, the two traded stock tips. ''I remember he told me about his Qualcomm stock,'' said Mr. Cramer, who previously was host of ''TheStreet.com'' for Fox News. "

http://tinyurl.com/5hwpgp

Conspiracy? Boo-yah!

I remember that too! Buffett was called an old has-been who just doesn't get the "new paradigm". Morons.

Ralph:

If you want to brag about your (put) trades, you might want to think about posting your trades in real time, which are time-sensitive (i.e., time decay works against the put holder).

I have a special situation for those will long term horizons and balls of steel. Junior miner Exmin has been halted because they are late on submission of their 2007 annual report. The company says this is due to the late submission of a report from one of its Mexican subsidiaries - probably one that is operated by a joint partner.

This company has one of the largest land packages in Mexico of any company, has strong management that came from Minefinders, has large partners in Hochschild and Industrias Penoles, and is actually producing gold from the Morris mine.

Anyway, the shares are already beaten to a pulp and will likely get dumped when they reopen for trading. The message board denizens have given up. Smells like opportunity to buy shares under ten cents to me.

Teich,

RE: Ralph PUTS on the Dow

He said something on his site Saturday about the Dow hitting the 200ma and going down. I held on to my DIA JUN 130 puts on that, and it worked. I posted my puts on the DIA twice last week on this site. Both around 20% gains over 2-4 days. I think he said it would go back up to the 200ma.

Time to buy calls @ $1.10 on DIA JUN 130

Perhaps there is something in the letter he puts out, but as far as I can see on his website, it only has information about signing up for things, not a trade on there as far as I can see.

Karl

ALOHA !!

Okay ... we have Moodys getting sliced and diced for their "computer glitch" and the Barklay's analyst asks the right question ... in terms of credibility and if Moodys fouled up ratings on mortgage backed debt what other sorts of "computer glitches" are waiting to be found?

Looks like a "perfect storm" is forming in terms of AMBAC and MBIA woes and now Moodys, so all the ratings and insurers are sending up smoke signals and as the old saying goes ... "Where there's smoke ..." Time that with all the CDS garbage coming due this year and who the heck over at HB&B will be able to afford insurance much less trust the counterparty is even solvent!

I believe the news will be first on MER and then LEH ... I would say JP MORGAN and BANK AMERICA but you can't have such huge icons of the US financial system collapse so soon! The FED will take out MER and LEH first and at the same time leverage time for JP MORGAN and BANK AMERICA. Of course we all know who's backs will be used! The US TAXPAYER is like RODNEY DANGERFIELD'S old joke about divorce ... "Divorce is like a gold mine. My wife got the gold and I got the shaft!" That is exactly the FED PLAYBOOK!

I agree that Ralph called for a consolidation for a few days. However, he just bragged about the Dow hitting his stated "target", which he never talked about before: "DJ-30 low of the day = 12,724.30 (so far), EMA50 = 12,720.52, off by 3.78".

I am also curious why we _never_ hear him talk about his losing trades here :) Even professionals like Vadym admit to having a less-than-100%-perfect success rate. He is either never wrong as a trader or mentions selectively about his winning trades only.

Look at other option-trading sites, such as philstockworld.com, where they post their P/L statements online.

Sold TWM 70.15 before the holiday.

ALOHA !!

Now this raises a red flag ... When a top economist from the CFR openly proposes a return to the gold standard(only digital)it is a big deal. I am sure the Chinese and all our other major trading partners would be open to anything that would replace the current US PESO they are forced to accept.

GATA e-mail ...
"In his presentation to this month's New York Hard Assets Investment Conference, Benn Steil, senior fellow and director of international economics for the Council on Foreign Relations, predicted that gold may return as the international currency and argued that even the nation now issuing the international reserve currency, the United States, might be better off for it."

Here is the full article link reported in the FT London ...

Link: http://tinyurl.com/6cms8c

craig- re Skype China- i try to copy/paste anything relevant here, and vice versa...personally, i don't think there's been much traffic on either Skype China or Skype Bill5, so there must be other reasons for the low post counts...

Thanks for the facts 2nd. Didn't know if we were missing the shadow world....:>)

What happens if margin is eliminated for comodities including oil and gold? Has that ever happened before? Anybody have any ideas?
Thanks

Now this is the market I come to know and love.

[Forgive m... to those who are long and bullish]

FXP was down big all day, now it might end up! I am in at $78, it is trading now at $67.xx

Still thinking about buying a call DIA 130 JUN. It is now under 80 cents.

craig- haven't posted much personally for the simple reason i haven't done any trading....holding only three (trading) positions (CAF, SMN, TBT), all opened about a week ago and all currently underwater...themes are still long China, short bonds, and short commodities...can't think of any other ideas right now...

QT- no problem, man...it's about time you FXP diehards catch a break ;)

QID up 4.3%, right on schedule. H&S once activated will haunt. Almost all green on my board today. Added calls on QID. Bounce later in week would not surprise, but the primary down trend has been reasserted, IMHO.

Bernake must face his dollar devaluation aftermath, as it has helped lift oil to nearly 133, on it's way to 150.

McHugh projects long bond to 140 as conditions deteriorate. That should set up the ToG rather nicely.

Re: low post counts

I have been wondering if it is because Bill has dropped a few hints that he is not that enamored with gold bugs. Doesn’t seem to be as much discussion about gold lately except for Kaimu, F6 and dr. cosa. Maybe the bugs are trying not to clutter his blog out of respect. Haven’t heard from maromatics in ages. Of course, could be they went on vacation early this year in Europe.

Aurator- why not buy the QID calls on weakness instead? the selling yesterday and today is clearly by weak hands...strong hands sold into the last week's rally...so as you point out, a bounce may happen later in the week, into which you could buy the calls...

strike 'strong hands'- make that 'smart traders' instead...strong hands are still holding...

Kaimu,

Re. Referring to the USD as a US Peso. The countries in the world that use a peso have seen an average appreciation of 6.5% vs. the USD since 2007. Calling it an IOU may be more appropriate and respectful :-).

Table: http://tinyurl.com/43lsp7

it has been awhile since we've heard from maromatics...maybe he's shopping for a house in the bahamas prior to taking over the gold portfolio at cara trading...;)

Has anyone made a list of junior miners to follow for the TOG?

Wow, is this a selloff or what?

Lelik asked about shorting the transports a few days ago. I would look at Ryder - a component - specifically. This stock is way above the 50, 100 and 200 day moving averages and has rolled over. The 200-day is at 54 and the stock is at 72!

Lost my "knack" for the options late March. Trying again. Lets see how the govt meddles THIS time.

Looks like chapter 2 of the credit collapse. It's a quite thick textbook, with references and appendicies.

QID calls nearly perfect setup based on my imperfect methodology.

Gold chat... "Buy!" $931.30/Toz

Well Summer is here that's for sure. I don't see any radical changes in the next week or two as everyone is taking a breath before the elections begin kicking out bull and the bigger players position themselves for the next round of crazy.

Anyways My Father in law is a Dean to a university. One night we were talking about how it was a pain to deal with the economics department. He complained that they seem to make everything into a big conspiracy. That in doing so the economic department could cause confusion and also artificially inflate their positions and cash flow.

I just began to laugh. I mentioned how our country and economy over the last 30 years, has experienced the exact same pattern running amok. I asked him if he saw a connection and he just dropped his Jaw since it was the same problem.

The problem with all the conspiracy theory's all the confusion and mis-information is the degree it is used as a tool to control others.

We talked about how he dealt with economic department. He is doing a good job of removing the current, it makes me wonder how to apply the same techniques to this larger batch of jokers.

The trouble is you have to separate out the players and change out the ego game. Its all about ego and control issues... In small situations like his, that's easy to do. In this current situation where the bigger players are so insulated from reality. I don't see any way of doing it without just the bubble bursting.

The only way to deal with it is not to fall for what might be, not to follow the false leads, rather drop all of that and buy into what you know best and use that to deflate the Economic Madmen currently running our country.Let them play their games, while we get out from the game (go cash) and patiently wait for reality and a dog to pull the curtain down to reveal the man behind the curtain. I wonder who will play the role of Toto?

I mention this since I suspect pretty soon we will see another run of massive fear mongering and conspiracy's play out over the late summer before the election season starts.

ON the finance front got out of SBUX, sold some profit on UXG and evened out my portfolio on UXG/DVAX and a touch of ValGold. I couldn't resist it a dime and everything considered I don't think a bad value.

Anyone else playing with ValGold?

Thanks

Thanks Jim & 2nd for pushing me over to:

Bought DIA 130 JUN puts @ $.70

Jim Crammer on Stop Trading said we will get a bounce as soon as oil stops going up $5/day. He said gold is still going back to $1000/oz. I will get out of FXP if it hits $70+ this week.

2nd:

It looks like SMN might be trying to make you happy today. I am waiting a week still but it is feeling like it's getting ready to leap!

I'm in a small amount of ValGold at 12 cents. Management was buying at 18 cents.

Since 1950, if the S&P 500 got as oversold as it is now (as defined by a 3-day Relative Strength Index), two days before Memorial Day, then it paid to buy and hold through the first few sessions of June. There were 11 winning trades out of 14 occurrences, with an average return of +1.3%.

Viso, you can trade that if you want but you may want to look at a chart from 2001. The market kissed the 200 day on May 18th and promptly topped out before a massive decline.

2nd

Thanks!

And a break on QID/SDS/SRS

Taking a shot at short XAU and short USO (Profunds versions) at eod today. (Actually it's a bet on a pop in the US$.) Nothing more than a short-term trade here. If it doesn't go my way tomorrow, then I'll exit.

Very little trading lately - was 2X short NDX yest and closed the trade eod yest - lol...

Dave

Viso:

You should ask the all-knowing Ralph :) If he were to play baseball, I bet that his batting average will approach the theoretical maximum value of 1.000 .

2nd
I sat out a while
and what I brought monday sold today
Sell to Close Put 4 Contracts of -OEYSJ
Order Number:E21NMNCF Details Filled at $21.70
Sell to Close Put 3 Contracts of -OEYSJ
Order Number:E21NZPJG Details Filled at $23.00
Sell to Close Put 3 Contracts of -OEYRH
Order Number:E21PHNPT Details Filled at $13.60
Sell to Close Put 2 Contracts of -OEYSJ
Order Number:E21PHPPF Details Filled at $25.00
Sell to Close Put 1 Contracts of -OEYSJ
Order Number:E21PHRGC Details Filled at $26.00
If I waited ubtill closed, would have made more

Thanks Moab

RalphSE [http://successfulonlinetrading.com/blogs]

They all closed exactly as I said they would.

Dow:12601.19
Nas:2448.27
SP:1390.71

good trading,
QT

First off I want to say that I enjoy reading the posts in here, especially the day trading positions.

Closed out my Jul 17 1/2 AUY calls into strength today (overall a 40% loss, but had been down as much as 85% at one point).

In between, made up on small plays in puts on MS (its turned down towards 43 from a recent 50, with LEH now below $40; didn't think they'd go that low, so wrong there as well, but made out OK).

Oil is now pushing $135 and likely will make it. As they say "the trend is your friend" - in this case some GS analyst sees it going to $150/bbl...personally I will not bet against that.

My positions now - totally in cash - US Fed and Treasury MM funds. I do not understand this market, and it looks as if I am not alone.

Cheers~

Rumor is that a huge trader is short oil and part of this move is his scramble to cover. Typical bubble behavior I would think, not to say that fundamentals are supporting oil price rise. Any bubble has an underpinning in fundamentals.

Should read : "not to say that fundamentals are >not< supporting oil price rise"

Oil question (has nothing to do with the trade I put on today.)

In the late 70's early 80's when oil jumped, I remember gas rationing (I could only buy a fixed amount every other day). Supply shortage...

Today, I can buy as much as I want - no apparent Supply shortage...

Help me understand please...

Dave

I think in the 70's the supply shortage was specifically a shortage of oil making it into the US. Whereas now there is (maybe) a shortage worldwide compared to theoretical global demand.

That is to say that if everyone could get oil that wants/needs it, the demand would be say 87 million barrels a day. Since only 85m barrels are being pumped, there is a global shortage. This isn't reflected in the US supply (or in any other developed country) because developed countries can pay top dollar.

Think of it this way: if oil was $500/barrel, probably only the top 10 richest countries could afford it. They wouldn't experience a shortage, they'd just be paying top dollar. But the less-rich countries would definitely experience true shortages.

This is what I believe Bill was talking about in terms of social equity being damaged by high oil prices. Every citizen of every country in the world deserves the chance to heat their homes and cook their food. However, high prices take away that opportunity.

Come to think of it, that roughly translated into "the rich get richer, the poor get poorer".

The solution could be the rich develop alternatives and learn to use it more efficiently, thus lowering their (disproportionately large) share of demand, possibly bringing the price down and helping out the poorer countries.

Proud Papa,

Nah, that's when the rich say, "Let them eat cake."

I agree though on the difference in conditions. The 72 crisis was an Embargo and 78 was also politically related. There was plenty of capacity. Now, if you believe Pickens, There is a relatively near term fear that supply won't meet demand and that our ability to produce more has basically peaked. I believe futures out to 2016 are currently priced at $140.

Oh, and regarding what every citizen deserves. I can't help but think of Clint's words to the dying Gene Hackman in The Unforgiven: "Deservin' ain't got nothin' to do with it." Hard to believe that movie was made in 1992.

Regarding 'huge trader short oil'. Very interesting - and possible - situation. I'm stubborn in the case of oil, though. For instance, I wonder, is it really, like Y2K's Internet stocks and yesterday's real estate, being chased higher due to speculation? I'm less inclined to believe that theory...but I'm still studying and learning (maybe I'm learning, sometimes I wonder).

In terms of social equity, the world doesn't make too much sense anymore anyway. In Venezuela (an OPEC member) you can purchase gasoline for about 10 cents a gallon - but their markets have been known to run out of staples such as milk or chicken...

In addition to heating homes and cooking, allocation of land for ethanol production appears to be costing the world in terms of food supplies for some countries also...

By the way, if I am stuck on the Autobahn here in Germany (or anywhere I can't get to a U.S. facility), gas costs 1.59 Euro per liter - that's roughly $9.50 a gallon in dollar terms. On the other hand, the food is good, the beer is cold, and the girls are blonde...

What worked...

Cleared out of my puts on BKX, IYT, and calls on QID. Worked perfectly. Will try these again as the setup develops. Sold my HTE after a parabolic mini-run and after the ex-date. Swapped to AAV for another capture. Holding Jun 20 VIX calls.

Most of the gold miners (mainly mid- and Jrs) turned in nice gains today. Added USU and eyeballing URRE to compliment core of PKN in 3-xtra-neutron billiards. Swapped PLG for MNEAF.

PLM hot and FRG was smoking.

Sold most of the ultrashorts but held SRS and may add, now that commercial real estate has passed the point of no return.

This is a rough market by my standards. IMHO, don't hold cash/MM/bonds... use something like FXF or the Merk funds. Had a chat with Axel Merk in Vegas. MERKX, MEAFX. Low nominal yield but total return solid due to dollar destruction.

Correct/clarify - PLG is current small weight holding.

Aurator
"Sold most of the ultrashorts but held SRS and may add, now that commercial real estate has passed the point of no return"

What is your take on SRS. I'm holding and currently underwater still.

I'm also holding/underwater on SRS and added most recently when it first entered mid-80's.

My take on it is that Simon Property Group is one of the largest components of the index that SRS is inverse, and it trades with a PE of 52, chart looks toppy, rsi trending down. SRS chart is about the opposite as expected.

Fundamentally we're hearing of more and more retail bankrupcies and cancelled expansion plans by retailers, which ultimately means higher vacancies and stagnant/dropping lease rates.

Just my two cents...

proudPapa

Thanks! It was helpful.

anyone looking to play PTR or SNP? how likely is it that Beijing uses the oil sector to stage a run-up?

Morgan Stanley's monthly report of holdings for CAF released today:

China A Share Fund, Inc.

Top 10 Holdings
as of 30-Apr-2008%of Portfolio
China Merchants Bank Co. Ltd9.47
China Construction Bank Corp8.88
Wuhan Iron & Steel Co. Ltd6.74
Jiaozuo Wanfang Aluminum Manuf5.80
Shanxi Xishan Coal and Electri5.50
Zhengzhou Yutong Bus Co. Ltd4.85
Daqin Railway Co. Ltd4.41
Guangxi Liugong Machinery4.41
Jiangxi Ganyue Expressway Co. L4.04
Anhui Hengyuan Coal Industry A3.68
[4:44:50 PM] 2nd_ave says:
Complete HoldingsDownload in Excel


as of 31-Mar-2008TickerPar/SharesMkt Value (USD)
Air China Ltd60111112,758,84730,181,406
Angang Steel Co Ltd0008987,508,88920,827,899
Anhui Hengyuan Coal Industry A6009714,620,08223,245,069
BYD Electronic International C2859,212,00011,759,498
Baoshan Iron & Steel Co Ltd6000199,951,91517,648,691
CashCASH91,883,23491,883,235
China COSCO Holdings Co Ltd6019194,775,98218,182,172
China Construction Bank Corp60193951,858,93050,557,886
China Merchants Bank Co Ltd60003613,190,29660,955,157
China Merchants Property Devel0000243,454,90822,701,136
Daqin Railway Co Ltd60100613,042,00032,208,679
GOME Electrical Appliances Hol4931,406,0003,228,002
Guangxi Liugong Machinery0005286,075,00022,699,147
Guangzhou Baiyun International6000048,393,61816,789,826
Henan Shen Huo Coal Industry &0009333,613,91220,671,152
Huaxia Bank Co Ltd6000159,144,81918,366,573
Jiangxi Ganyue Expressway Co L6002699,992,99920,688,951
Jiaozuo Wanfang Aluminum Manuf0006128,796,45633,565,872
Kweichow Moutai Co Ltd600519573,93815,410,327
Net Other AssetsNETOTHERASSET-4,274,005-4,274,005
Shanxi Xishan Coal And Electri0009835,258,00030,765,208
Tangshan Iron & Steel Co0007096,523,71214,852,816
Wuhan Iron & Steel Co Ltd60000519,414,67539,402,944
Zhengzhou Yutong Bus Co Ltd6000668,899,28831,797,509

CAF- today's closing price of 43.98 represents a discount of 14% from its NAV (51.05)...

Energy stocks pulled back toward the end of the day despite crude oil jumping over $4 per barrel.

DIG was down while DUG was up.

Go figure.

nice summary on the subject of "discount to NAV" by Gabelli:

http://tinyurl.com/4kp2lg

note:

"The discounts at which closed-end funds frequently trade are certainly cause for focus since they represent significant opportunity for shareholders..."

sold dug a few days ago for a small loss. still in skf, up a bit. also into a chinese organic fertilizer company, cagc

I've been holding 55 Sept COF puts for about 2 months and watched it gain 50% before being underwater for the last couple of weeks, today back in the black by maybe 25% .

So I sold on the basis that the chart shows a pretty clear line of higher lows, and todays close was right on that line (at bottom of a rising wedge?). Daily RSI is 26 so figure maybe oversold short term and there's a lot of chatter of a rally into the long weekend.

I'll look to get back in next week if it does stage a little bounce. Maybe it'll hit resistance at the 50MDA? or make it all the way to 200? Maybe i'll take a nibble at 50, add at 200 if it makes it that far...

With my luck it'll probably plunge to new lows tomorrow...

RE : SSEC, CAF

From todays Bloomberg:Shanghai Stock Index May Drop 25%, Credit Suisse Says

http://tinyurl.com/5frrc2

RE: CAF ...when was the last time CAF traded above NAV?

From ETF connect: http://tinyurl.com/5lth2e

in the meantime..nice intraday bullish divergence...good time to get out or load up on higher prices to come?

There are certainly fundamentals driving the price of oil higher but anything that rallies over 60% in four months is most likely getting ahead of the fundamentals. I have no special insight on this, just my intuition.

...or someone knows of something that is to happen in the middle east soon that will strangle supply.

Moab: perhaps after RIMPAC 08?

Moab: ~= Wrong.

[Bill Cara note: the rest of this piece was removed for obvious reasons.

I feel bad about this person. There are doctors here who recognize a problem and have offered help, which I proffered. But he says he is already receiving treatment. I'll leave it at that except to say I care and would also like to help.]

Wow.

First of all I believe whole-heartedly in peak oil. Nothing I have said is in disagreement with that. Secondly I haven't laughed at anyone's posts. We are all trying to find the way forward and I post here solely to see someone tell me convincingly that I am wrong. That is the most valuable to me.

Your tirade reinforces for me that this is a bubble as no dissent is tolerated, just like tech stocks were in a new paradigm and Buffett was an idiot in 2000.

Also, I have seen several wise traders comment that oil stocks are priced for $80 oil. Why would the smart money not want to bid those up. Hmmm...

Aurator,

Your above post reads like the maifesto of a paranoid misanthrope. Your hatred of the decent people who congregate here to seek to improve themselves and their knowledge of markets speaks for itself. If you'd try forming complete sentences we might be better able to determine what has you so angry, but alas, no insights into your disease with mankind can be gleaned from your hateful, and yes, arrogant post. After 10 years of study, I would have hoped that you would have at least learned to spell.

EEMt- thanks for the links...

moab- you show impressive restraint...fwiw, todd harrison agrees with you: http://tinyurl.com/4qrgb4

shark_attack

I don't want to get involved in this dispute. But I think english may not be Aurator first language. So I think you need to cut him a break on that. I have tried to speak other people's language and it is not easy.

I am also a member of the "Underwater in SRS" club. At least until the last two days of gain.

SKF continues to be the star of the show, and I wonder why I bother with SRS.

SKF always gives me a problem with when to sell, while SRS always gives me a problem with when to buy.

There are several wise traders at minyanville that think oil is in a bubble and one who doesn't. Bennett Sedacca has been showing a multi-year chart of the nasdaq/homebuilders/china/oil as they all look the same. He was putting this chart up (sans oil) before China topped out. I respect him a lot and he has been dead on almost everything he has posted in the last year.

Every bubble has strong fundamentals. Every one. That doesn't preclude the price from getting ahead of the fundamentals.

Some of the agricultural commodities have been in bubbles too. Seen a chart of wheat lately?

Divergent, respectful opinions always welcome.

have to add and hopefully get some debate from this post.

link of forum website.

http://www.abovetopsecret.com/forum/thread306861/pg1

Lindsey Williams
has anyone ever heard of him?

I got an email today from a friend with a Gtube video on one of his speeches.

http://video.google.com/videoplay?docid=3340274697167011147

The video is long, over an hour but he makes interesting points.

maybe kaimu can enlighten us on this? Do you have knowledge of this guy?

Wish I could add more intellect to the debate.

IMhO. OIL is overbought, what goes up must come down, the problem is when will the last straw break the back of the camel?

What I won't say is... short oil because that trade would be a loser. When will oil peak? 150? 200? 250? who knows but when it does, that will be the time to short.... now is not but but I still believe oil is overbought.

Remember the talking heads about 1.5 years ago when oil was creeping over 45 a barrel and that as long as it was over 40 the oil sands in Canada and Colorado make sense to extract?

And what "they" also said was that there is more oil in the canadian or colorado sands/shale than saudi (each).

It takes time, but if we are around 134 a barrel then WHY aren't we digging sand?

at 134 that shale/sand is on a kmart blue light special!!

If anyone can add something or spread some knowledge on the sands, please do!

Aurator - are you on something tonight?

Oil is overbought. Sell on trendline break to the downside, buy on opposite. The commodity cycle has more years to run, but the price will fall. Btw, long oil from the $50's.

Gold - simpleton trade on downtrend line break to the upside worked again and will again and again....

astal25- re your response to me last week about buy-and-hold: at random i picked a stock i owned in 1999- a south american bank (UBB), and looked up its price...sold it in the twenties in '99...notice it did drop to the single digits in 2002...before hitting 150 recently...so your point is well taken...

He seems to know at least enough English to offend me, and I'm fairly certain, you.

Anyway, goodnight everyone, I'm sure tomorrow will bring a new disagreement, which come to the fore during times of market turmoil.

2nd_ave: the NAV of CAF is the current value of the Chinese A-shares it is holding, and if investors expect those shares to come down, they might not want to buy CAF. Closed-end funds often sell at a discount to their NAV. Here is an interesting note about CAF from seekingalpha:

"One reason for this discount developing is that CAF is one of the few ways for institutional investors to sell short the China A shares in the US market. Some institutional investors are QFII-qualified and are long China A shares and are selling short CAF to hedge their exposure. The selling pressure has caused the widening in the discount.

For the risk averse who wish to bet on the discount narrowing in CAF, a good way to partially hedge is to sell short iShares FTSE (FXI). FXI is an ETF that sells close to NAV. It also invests almost 100% in China shares. It is not a perfect hedge for CAF, since the sector investments in FXI are quite different from CAF."

I am still holding my FXP, by the way, waiting for DOW to hit 12000. As I have observed before, FXI is well correlated with XLF and will fall on the short time scale when XLF falls. Over the course of months, the belief that the Chinese gov't will hold up the market may prevent FXI from crashing, but it WILL take a good dip if the DOW hits 12000 next week.

DavidV

looking at a 3 year chart of Crude i notice the price surges over the years:

2005: %50 run- $50 to $75 in 3 months
2006: %32 run- $60 to $80 in 4.5 months
2007: %92 run- $52 to $98 in 10 months
2008: %41 run- $86 to $130? in 4 months

this current run is nothing out of the ordinary
on a % basis, but it is exception from a psychological perspective as it involved a material breach of the $100, a fall and consolidation from the $100 level, a surge past $125 and GS calling for $150 oil.

couple this with exceptional US dollar weakness over the past year and this move is in line with annual surges.

the technicals show oil is over-bought, the RSI is making its 3rd series of lower highs on each successive high, ive never seen a hotter W%R, and the slow sto just crossed back up.

but... massive volume in oil shares double bear DUG. almost a comical volume that says something is going on.

ALOHA !!

OIL ... Can't live with it ... can't live without it! I mean what a LOVE/HATE thing that is, eh?

I have heard of Lindsey Williams, but before he ever was at Prudhoe Bay I had my own oil insider living right at home. My Father who was a key geophysicist with Chevron Oil for some 45 years and was instrumental in the Lake Maracaibo, Venezuela oil field told prior to his death that there was enough oil for the USA in Alaska and the Channel Islands off California for at least another fifty years.

The story of PEAK OIL and the oil industry itself is a political and monetary tale and not one of supply and demand. It has been forever!

Just as an example and I have mentioned this before. When the US CONgress during the Carter Administration came out with their "Windfall Profit Tax" scheme the major US oil companies shut down domestic production and exploration because it was cheaper to import the oil from the Saudis than produce it in the USA under the Windfall Profit Tax rules on domestic production.

What a shock this is looking like the 1970s - 1980s again! BIG huge ass inflationary Vietnam War, oil supply disruptions due to political tensions and the FED pumping out FRNs like there is no tomorrow and we dump gold in 1971 ... BADA BING ... high prices! WHAT A SHOCK!!! Commodity bull? Wow ... another shocker! GOLD and SILVER rising more shocking news! Another shocking similarity is that the $3tril WAR ON TERROR is producing inflation! Its making the Vietnam War look like ROMPER ROOM financially! One similarity that isn't similar to 1970 - 1980s ... half the US workforce is retiring and along with it more than half the tax revenues! The US tax base is dead ... Raise the taxes all you want OBAMA it won't even make a dent since we're already at 52% taxed right now! Who is making the most on each gallon of gas sold in the USA? It isn't Exxon! The solution to all our problems is to get rid of BIG GOVERNMENT not BIG OIL! BIG OIL produces something useful ... BIG GOVERNMENT produces nothing but waste! DUMP the FED and the IRS and make BIG GOVERNMENT so small it can barely survive like the IMF!

Hi Norm,

Could it be that there is a curve to affordability of oil sands "drilling" vs. the cost in gas (and other things) to get at the oil?

Isn't this sort of like the curve for tolerating the high price of gas vs. parking the car at home and buying a scooter?

Or am I wrong and it's possible to have unlimited growth in the price of oil and $2000/oz gold? (no bubbles)

I would ask the candidate for this job, posted May 15, 2008.

http://tinyurl.com/5ahokc

"Responsibilities:
Oil Sands Economic Evaluation
Maintain/update the economic models.
Train/direct Economic Analyst and Business Financial peers on the Oil Sands economic models.
"
Looks like $130/barrel oil means adjusting economic models quite a bit from the 2005 estimate of $32/barrel used by Canadian Energy Research Institute for their Economic Impacts of Alberta's Oil Sands report. Many models used to forecast prices use oil as an input. Changing this "average" price will skew tons of models. It would be a good way to mess with statistics, and the poor investors that shorted oil.

Brad Setser has a good post on this.
http://tinyurl.com/64pt5j

One input that may just slow down mining the dinosaur sludge.

"Oil sands projects require two to six barrels of water to produce one barrel of oil. In a day, the oil extraction process uses enough water to supply the needs of three Alberta cities: Calgary (population 1 million), Lethbridge (79 000) and Red Deer (82 900). This is only expected to grow, so that by 2010 industry could be withdrawing more water from the Athabasa River, Alberta's main waterway, than the entire urban population of the province."

http://tinyurl.com/5eaw9z

Time to buy PHO?

When I'm looking for 'impartial' data to answer my questions I sometimes look at wikipedia for info.

http://tinyurl.com/6axjd8

http://tinyurl.com/642zyp

Sometimes the changes are more important (and funnier) than the content itself.

"Replaced page with 'capturing teh oil!'"

David- good point...since it's not possible to short the A shares, short positions in CAF may explain the (ongoing) discount to NAV...

china will remain volatile for many years...i see two long plays on the SSEC-> a) the possibility beijing runs it up prior to august, and b) a LT hold that may eventually see a 20-40 fold increase over the next 20 years...however, i'm fully aware it may spike down at any time...not too concerned with my position right now, as shanghai is down 42% from its high, and i am ready to add on significant drops...note EEMt's earlier post re one target of 2700 or so-> obviously, hoping this occurs after august...

either way, volatility in china works to the trader's advantage-> sincerely hope that you/QT/allen see an exit at 78+, with/without help from options...

2 months ago, I mentioned that USU had moved 25% that day. I was mocked by DavidV for only recapping the fact that USU had moved 25% that day. I decided this site was too "advanced" for input from a novice investor, hence I would silently read but not participate.
I had my reasons I was bullish on USU (uranium), but I did not go into detail. Well in about 2 months now, the stock has moved from $3.50 to $6.45, and I am still very bullish on it.
By the way DavidV, I really hope you did short the stock as you said you would. Hopefully making fun of a newbie to the markets increased your enjoyment for that day.

And Danny Raymond says he just likes using the mules around the farm.

"We've been using them quite a bit," he said.

Brother Robert Raymond added, "It's the way of the future."

http://tinyurl.com/6ehl5p

A simple observation, empirical and subjective, on Aurator's conributions. We all make our own mistakes - personally I think Aurator's comments during the day are often useful, but I ignore his "post sunset" postings. Observation only, no conclusion.

ALOHA !!

Regarding oil on the supply/deman side ... What good is gazillions of oil in the ground if you have no capacity to extract, process and store or sell it?

The same story that effects all major commodities is at play here. Costs to explore and produce are rising rapidly as global governments "spend and print"!

Strip away the spin and the data fog and what's left is commodities in direct competition with global fiat printing presses(now mouse clicking)!! This is REAL WEALTH vs FALSE WEALTH! COMMODITIES vs FINANCIALS! TANGIBLE vs INTANGIBLE! The banks aim is to hold the "real wealth" while the US Taxpayer and its government end up with the paper IOUs!

When was the last oil refinery built in the USA? Any major shutdowns will stall production even if we had a gazillion barrels of oil right under Washington DC, gas prices would still rise anyway.

Infrastructure is suffering here in the USA and not just in the oil patch. I recall reading an analysis of the US electrical power grid back in 1997 that reported antiquated transmission lines were losing some 60% of power transmitted and the quality of the grid infrastructure was poor. Transmission lines in the USA are still antiquated. Next we have older bridges collapsing or unable to pass inspection due to either seismic related flaws or just plain old "age"! Things wear out over time. While we accomplish nothing with $3tilUSD in Iraq we now are behind the eight ball on infrastructure repair and replacement. Then we need funds to keep Social Security and Medicare going since the US CONgress has seen fit to steal those funds from the Social Security Trust Fund and replace them with more US Peso IOUs. Well what do we fix first roads and bridges? Social Security? Oil refineries? Electrical grids? OBAMA ... where's your plan for all this? According to what I have read at OBAMA'S BLUEPRINT FOR CHANGE ... he does not even address the real culprit behind all of the impending crisis ... ITS THE MONEY STUPID!

The US government is suffering from the same financial malaise the US Taxpayer is ... "debt attrition"! But don't think this is just a coincidence or a plan that has back-fired because this is a joint venture between major global and US banks(FED) and the sellout US government. Don't think for a minute the banks don't know what they're doing ... It is in their best interest to look stupid and greedy!

IT ALL WORKS UNTIL IT DOESN'T !!

http://tinyurl.com/46qutp

Miscellaneous.
- Words from the mouth of God (Bernanke)
- WTIC
- Asset allocation sorted by stochastics, pivots
- Newmont at a confluence of a couple of Fib levels

cyderman- interesting observation- of course, we all know the good guy at work who turns abusive at home after a few shots...mistakes, OK...recurring patterns of destructive behavior, self-directed or otherwise, do not belong here, or any other public venue...

UBS to Sell Shares at 31% Discount in Rights Offer.

http://tinyurl.com/43aq3a

Good morning.

One change to the Cara 100 Ratings:

GS - Downgraded to Sell @ Ladenburg Thalmann

(Note: This firm has also put Sell Ratings on MER & LEH today)

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

Have a great day.

For ESLR traders:

SIGNS NEW SALES CONTRACTS OF APPROXIMATELY $1B
-Evergreen Solar and German-based Ralos Vertriebs GmbH signed an agreement valued at approximately $750Mfor panel deliveries beginning in 2008 and extending through 2013.

ESLR jumping in pre-market to 10.55

Evergreen Solar Signs New Sales Contracts of Approximately $1 Billion

http://biz.yahoo.com/bw/080522/20080522005517.html?.v=1