Good article for Neophytic Traders

Why Volume Matters: Reading the Market's Real-Time Auction Process

[excerpt]
Recall that volume is significantly correlated with volatility. When volume expands in the direction of the trade, it means that you have a correlation of volatility and direction: those are the sweet spots that will give you your best short-term moves. When volume contracts as the trade moves against you, it suggests that volatility is not moving against you, and it can make good sense to stay in that trade.

Volume expands because of the presence of large traders; it is not a sudden influx of small, retail traders creating a doubling or more of volume during a time period. Rather, institutional traders are attracted to the new price highs--and help keep the move continuing in the short run. When volume expands in the direction of the market, it means that the new prices are attracting market participation. There is acceptance of value at these new prices. It is out of such dynamics that trending moves are born.

Good breakout moves will feature an expansion of volume on the move out of the prior trading range, a pullback in volume during any subsequent consolidation, followed by further trending price action on expanded volume. The pullbacks on reduced volume represent opportunities to enter the trade in the direction of the trend.

http://tinyurl.com/3es83x

"expected that we will rotate from energy to tech
and financial. but does not look like?"

Posted by: vinod at May 28, 2008 10:03 AM [link]

expect the unexpected in the short term...helps you deal with the psychological gaming...

More flow for the inflation pipeline...

"Dow Chemical says it's raising product prices by up to 20 percent to offset the soaring cost of energy and raw materials.

The Midland-based chemical giant said Wednesday the increases take effect Sunday and will be based on a product's exposure to those cost increases.

Dow says it spent $8 billion on energy and raw materials, in 2002. It says that could climb fourfold to $32 billion this year.

Chairman and Chief Executive Andrew Liveris says the increases are straining its businesses and "forcing difficult discussions with customers."

http://tinyurl.com/5xumeh

smn is going to be the trade of the year.

[Bill Cara note: jeremy, you cleaned up today with SMN (Ultra-Short Basic Materials)! But what's your reasoning?

If we do see Gold back to 800, and wood, paper and chemical companies in tough with a significant recession on the horizon, then I have to agree that, on a timely basis, that would be a worthy trade.]

Long bond struggling to remain above support. If support fails, and it appears that it may, yields will continue to move higher. This has been discussed many times here.

Last week I posted on a huge divergence in Adv/Dec volume vs the S&P indicating a significant market decline. The market acted poorly as you know.
See http://wrahal.blogspot.com/2008/05/trading-for-may-20-2008.html
On Monday I had an intraday post calling for a short term top. This call worked like magic.
See
http://wrahal.blogspot.com/2008/05/intraday-update-may-19-2008.html

QT - Volume DOES matter!

You might appreciate the new book by Tim Ord:

http://www.ord-oracle.com

Ord is a disciple of Wyckoff, the grand old man of price and volume. Ord is the first I've come across who has developed ways of using volume for swing and position trading. Ord gives equal importance to volume as to price.

Jock, since Ord gives equal weight to price and volume, interpret this:

DRYS in the last seven days after a monster run has fallen > 20% with some of the largest volume since October. What's this mean?

Ord's book per Amazon:

Product Description
In The Secret Science of Price and Volume, leading market timer Tim Ord outlines a top-down approach to trading—identifying the trend, picking the strongest sectors, and focusing on the best stocks within those sectors—that will allow you to excel in a variety of markets. With this book as your guide, you’ll quickly become familiar with Ord’s proven method and discover how it can be used to make more profitable trading decisions.

From the Inside Flap

Price and volume analysis is a proven way to trade the markets. Pioneered by Richard Wyckoff during the early decades of the twentiethcentury, this technique continues to produce consistent profits for many practitioners.

Over the course of his successful career, leading market timer Tim Ord has developed a distinct understanding of this discipline and built a winning trading strategy around it. Now, with The Secret Science of Price and Volume, he looks to share his invaluable insights with you.

Written in a straightforward and accessible style, The Secret Science of Price and Volume outlines a top-down approach to trading that will allow you to make the most of your time in a variety of markets—from stocks to commodities. With this book as your guide, you'll quickly become familiar with Ord's time-tested method and discover how it can be used to make more profitable trading decisions.

Step by step, you'll learn how to:

*

Gauge the sentiment of a market to determine if the trend is bullish or bearish, and whether a possible high or low is nearby
*

Evaluate breadth, volume, and momentum in order to identify triggers to enter the market
*

Find the best performing sectors that are aligned with the market
*

Select the strongest stocks within those sectors

Ord also illustrates various techniques for identifying trade setups, concentrating on the volume within a specific index or issue. Using these tools, he shows you how to "listen" to what the market is saying and move in concert with it, rather than making random trades based on one signal, a hunch, or rumors. Rounding out this detailed discussion, Ord replicates the sequence of steps you should take to create a successful game plan for winning in the market.

By tackling the markets from the top down—identifying the trend, picking the strongest sectors, and focusing on the best stocks within those sectors—you can capture high returns with low risk. The Secret Science of Price and Volume will help you to do this and much more, as it details a practical way to make better trades.

Jock

Thanks, I'll check it out.

Is anyone watching the einhorn interview on Bloomberg.

We are so screwed.....the SEC may as well carry the money and hold investors at gun point.

and who do they harrass and investigate.....yep, the person the blows the whistle. And Allied Capital spies on the guy, steals his phone records, etc. Unbelievable.

The USSA is alive and well.

I see the market likes ITU and BBD today.

I could win the presidency on 2 issues alone. I'd promise to bring back 2 dollar gas (by pumping IRAQ, invading VZ and jawboning the oil companies) and I'd promise to end illegal Mexican immigration and to round up and deport the illegals. These policy positions are of course verboten in the American lexicon and will never happen, but I'd promise to do 'em and I'd win the presidency on these two issues. I am planning to write in my own name in november by the way. I wouldn't vote for these 3 jackals in a million billion years. Once again we have no acceptable choice for president.

I’m curious, what do others here think is the most important part of a trading system?

Thank you in advance for your replies.

invade VZ... wow. as if america wasn't already like a crack addict w/credit, now oil... although after iraq i can't imagine there would be public support for the invasion of yet another country than the attempt to provide alternate energy sources. then again, i couldn't imagine bush being reelected, either.

When are you going to stop spouting racist BS?

1st, it's *all* illegal aliens, not just Mexicans, which is RACIST. STOP IT.

2nd: We've had a belly full of invasion bullshit.
It would cost more to invade then the oil we would supposedly gain. SEE IRAQ.

We already have a militant knucklehead running on Bush's platform....you're late.

It's not the lexicon, it's that we have brains, morals and common sense and we won't accept short sighted militant racism as an answer.
It's all part of the new war on stupidity.

I agree with the last sentence.

Book discussion:

I think beginners would learn a lot with Bill's book, shipping is $10 in the US though you may have to request an adjustment if it's not automatically credited back to you. Zeto, get the book. It may be too much in one sitting, it was for me, but learn what you can and come back to it later to learn more.

I particularly like p.275 where Bill summarizes options trading strategies. In my opinion options are not for the beginner still learning basic things like trendlines. However I do think options are mandatory for anyone serious, especially selling options as Bill explains it is part of the conservative trader's toolbox. Time decay is on your side.

Investing stories and opinions (from sell side or otherwise):

In my opinion a beginner is best not listening to most opinions and stories. It may take some time to figure out who knows their stuff. Even when you find people who have credibility with you, remember their timeframes and risk levels. I follow people like Bill and Jim Sinclair, but I have to keep in mind what they say may not apply to my trading timeframe or I may be more aggressive or conservative. Also I pay attention to people like EEMTRADER, basketguy, and g034 here.

When stories reach mania levels, you should become wary. Most recent example is probably the grains like wheat and rice. Did you notice how everyone talked them up right around their manic peak, and are mostly silent now they are down large from the peak. See for yourself. Go to ino.com, click futures prices, click grains and oilseeds, click on wheat or rice, click 3 months. That chart gives you the story you need to know. Later, go to stockcharts and notice how DBA yesterday made a close lower than the week of March 17. Who do stories benefit, you or the person selling the story to you? Think in terms of conflict of interest.

Technical analysis:

Some people are very successful or very rich without technical analysis. For a mere mortal like myself, technical analysis is mandatory. Like learning any discipline, it takes an understanding and competence of basics before getting to the point of letting reflexes take over and improvising like a master artist. I know I am a beginner and some masters may laugh at what I say.

The bare beginner must learn trendlines. Some time after that, I think an understanding of fibonacci numbers, particularly 0.382 and 0.618, is mandatory.

Since it's a slow posting day, I'd like to share something a bit off topic.

In the past, people on this discussion board have talked a bit about maintaining personal health, and I'm just finishing reading a book that I feel compelled to recommend. I borrowed it from the library but will be purchasing a copy shortly and insisting to anyone I care about to read it!

Unfortunately the book has a real cheesy name that may turn some people off "Good Calories Bad Calories" by Gary Taubes. And while it sounds like a diet book, it's really more of a history of nutrition/disease research. Of the 640 pages, probably about 150 are filled with references to the studies/papers/articles that the author combed through to compile this book.

The most striking points made in the book, and this is nothing new to us in the world of stocks, is the spin put on nutrition/disease research by the media and vested interests. But in nutrition, while you would expect recommendations to always be backed by hard science, that is sadly not always the case.

It's a bit of a tough read because the author really details the timeline of what research was done when, which policy decisions and public recommendations were made and when, etc. And while reading this book has made me cynical of so much more I read and hear now (before mostly just in investing:), I believe it has equipped me to understand and make better nutritional choices in life and not listen to the spin/misdirection that currently exists.

If anybody has read this far, and is interested in a summary of what I've read so far, let me know and maybe I'll try to whip something up over the next few days. I've only read the book once and it's a lot to take in...

http://tinyurl.com/6nffo5

SteveC said "I know I am a beginner and some masters may laugh at what I say."

Steve, I think your incredible bright, and have your whole life ahead of you to prove it.

Best of luck.

Actually, you can get a good idea of the recommendations in the book by reading the editorial reviews on Amazon. But the key selling points of the book for me are the incredible depth of research and analysis, and not shying away from going into some technical details...

Kaimu, big news on ECU...

Highlights:

19 cuts yielded averages of 2.15 grams per tonne gold, 1,257 g/t silver, 5.06 per cent lead and 4.88 per cent zinc over a width of 0.4 metre representing a total length of 70 metres.
Results are in a region identified as potential in current NI 43-101.

The eastern extension of the Terneras vein (Terneras East) is one of certain key areas where the company has identified a Mineral Potential of 465 to 807 million silver equivalent ounces as disclosed in the most recent National Instrument 43-101 Technical Report which was audited by Micon. An east-west trending drift has so far, been opened for 70 metres along the Terneras vein and is continuing laterally in both directions. Terneras East is quite interesting as it is completely open for another 400 metres laterally and for more than 600 metres at depth. Recent development work in the area has been focused on the north branch of Terneras East where grades and widths above cut-off are being systematically encountered. The eastern side of the Terneras vein is proving grade and width continuity which are the two key criteria in the requirements to convert from Mineral Potential into an inferred mineral resource.

Assays received for the 70 metres of drift are well within the cut-off grades with some assays yielding up to 8,444 g/t Ag."

http://tinyurl.com/45a6cj

proud papa,

i read this book in early 2008
and i was so impressed with its contents.
i follow nutritional science closely and Tabues
did an excellent job of examining the sad history
that made up the "science" behind the "fat is bad thesis"

here is a piece i wrote not too long ago in response to a so called nutrition expert attacking the low-carb diet concept:

Fatal flaws in the arguments against low carb diets:


1. the diet is unsustainable.

im unsure what this means but apparently the fact that people have trouble staying on the diet means its ineffective.

untold amounts of people have failed to stay on a low fat or smaller portioned diet, but it is rarely considered a mark against the merits of the diet itself. a person who fails to stay on a low fat diet is cited as lacking in discipline, the fault lies with them, unless they fail a low carb diet, then its considered proof positive that the diet lacks merit.

the difficulty sticking to any diet does not broach the core thesis that carbohydrates are what makes us gain and retain excess fat, while protein and fat are acceptable fuels for the body without negative health effects.

2. we dont know the effects of this diet over the long term.

do we know the effects of a low fat diet any more than a low carb diet over the long term?

before WW2 low fat diets werent the norm as people ate more fat as a % of thier diets than today. if anything we dont know the long term effects of low fat diets in north america because they are a recent invention. the fact that obesity rates have increased through the 70's and 80's when the "low fat" mantra picked up steam seems to be ignored.

other cultures with low heart disease and low fat consumption are cited as proof that low fat diets are healthy, yet the proliferation of obesity in north america during a period in which people consumed more charbohydrates as a % of their diet is not considered proof that they could be part of the obesity problem.

3. cut down on bad carbs like sugars and white flour and instead eat slow release carbs like whole wheat.

this seems fair, the question is, how can you deny the efficacy of low carb diets yet agree there are "bad carbs". what makes them bad? where are the studies that dont support low carb yet support diets low only in the "bad" carbs?

4. use common sense when eating.

what is common sense to a vegetarian hindu is not to a steak loving argentinaian, or to a fish loving japanese person, a pork shunning muslim,or a beer and kidney pie eating brit. our concepts of portion size and appropriate foods vary from culture to culture, as do meal times, food pairing and religious demands on our food selections.

ive always notices that italians do not drink milk in their expresso after dinner. im told its common sense to them. theres no scientific data to support why milk w/ coffee is bad for you after dinner time but it is an accepted custom and common sense not to even order a cafe con late after dinner there.

people have confused custom with common sense and further confounded the issue by believing common sense for diets are backed up by clinical trails.

5. the French are widely known for eating copious amounts of fatty dairy products such as creme and butter, for drinking wine and enjoying rich food.

instead of evaluating how this disproves much of the "fat is bad for you" doctrine, people lable it a "paradox" as in the "french paradox", as if french eating habits defy the laws of nutrition instead of bringing those very laws into question.

typical defenses are that lifestyle factors play into the equation why french people are slimmer: they walk more, they are more relaxed, less stress, they enjoy smaller portions of rich food.

in a sense these are perfectly legitimate reasons why the french can eat heavy food and enjoy good health and slender waist lines. accept when low fat diets in other cultures yeild positive health patterns, anti low carb diet folks tend to ignore cultural factors

6. cite famous studies on the longevity and better health of greeks and japanese who eat a diet very low in saturated fats compared to their ethnic communities in north america as proof of your concept,

yet totally ignore the multitude of factors like lifestyle, stress levels and what indsutrialization does to people's health.

furthermore ignore the idea that along with more fat, north americans eat considerably more refined sugar that may complicate the fat vs. no fat concept of a healthy diet.

the french paradox is the microcosm of the errors fo the current "fat is bad" approach becuase a pardox suggests french eating patterns are contrary to a set of fixed laws. even cursory study of clinical diet trials which show mixed results for different diets hightlight the grey area of nutritional science, whcih is often dressed up as black and white.

the question is what quantitative measures are used to support that a high fat/protein diet is "bad" for you?

blood work showing choloetrol levels, blood pressure, subjective reports of energy levels and vitality, and weight could be used to measure the effects. but its not enough for anti-low carb people who would use positive blood work and subjective findings of better health to counter that the long term effects remain unknown.

when have the long term effects of the french diet been studied?

when have the long term effects of low fat diets in north america been studied?

These folks carry a sample of Tim Ords work He puts one up about every 10 days or so
http://tiny.cc/baNM7
Look for the Ord Oracle PDF

Volume:
This is precisely the problem with, and I would argue the point of, dark pools. More and more of the significant volume is being hidden in these trades.

As much as 20% of large institutional volume is now hidden. That number is growing. And institutions are the most important segment of volume numbers.

Volume figures into all my charting. It seems so key and second nature to me that I don't understand what the hullaballoo is today. It's how you gauge the strength of a move. However, I am trusting it a little less.

I would like to know what some of the proponents of volume-centric methods think of this problem.

Also, I suggest everyone read Master Traders.

The Italians I've known (in the restaurant biz) use steamed milk in after dinner cappucinos, not milk itself but foam.....and a little nip of brandy or...? :>)
An espresso, by definition, has no milk or foam, it's a steam expressed shot of pure coffee.

I eat what I want in moderation....sometimes.

can not count on volume
more and more trading is happening on private network. TA base on volume will be useless

"I know I am a beginner and some masters may laugh at what I say."

SteveC- a) 99% of us are not even close to being masters, and b) I have never met a 'master' in any field who would laugh at a beginner...

we're all just traders trying to get better here...

Not only that, but the dark pools are now linking up.

So HB&B will see our volume plus the aggregate of their hidden volume, but we, of course, cannot see theirs.

When others see your interactions (conversations) AND theirs, and you only see yours, it's disconcerting (and extremely impolite.) It creates a situation where those at an informational disadvantage feel less inclined to participate. And yes, I'm not just talking about trading volume.

You guys hear me?

Vinod, if what you say is true (private networks and dark pools)and I think it is true than price is the only truth.

Conclusion: Trade the truth which is price.

Truth: CME price is breaking support. Is the next stop the breaking of the lows of 17 Mar the date of the BSC debacle?

TLT is once again shortable at Schwab. Earlier in the year shares were not available to short.

Wasn't it Bill who recently wrote about 75 being the important line in the sand for the $BKX (bank index)?

$BKX went under 75 this morning and it looks like it will stay there, currently at 74.64. May be worth watching in the last hour.

vinod- taking my weekly beating on SMN/DUG...

2nd_ave:

except Taoism where the "master" would laugh "With" the beginner to teach that life is in a smile and possibility of joy :)

of course sadly many people would take that as laughter at them due to being too self judgmental...

We all need to be able to laugh at ourselves as not to take life too seriously.

ProudPapa:

As a scientist, and budding physician, I am absolutely convinced that 90% af all of our ailments, both acute and chronic, have an etiology in and a treatment through good nutrition. Unfortunately, there is no money in eating your broccoli and brussel sprouts.

I think you will find it apalling that, while there is a whole three month block dedicated to pharmacology and pharmaceuticals in the avg medical school curriculum, there is virtually NO TIME alloted for study in solid nutrition foundation.

Its a crime really.

Buyer Beware.

ITU and BBD continues to strengthen, does this continue to EOM?

I don't remember Bill writing about BKX 75 (perhaps he did) it but I did a week ago. BKX 75 is a triple bottom; quadruple bottoms are a very rare thing. With Keycorp coming out with greatly increased loss estimates today, reality is seeping in.

The amazing thing is that many of these banks deny the need for capital, then raise it, then UP the dividend along with loss estimates. It doesn't make any sense, except perhaps allowing time for insiders to sell. But it is not what you would want to do if you wanted to save the company.

I second 2nd.
Most experts got to be experts by being beginners that experts took time to help.
Those experts know what they went through....no matter the discipline.

That this blog exists speaks volumes for Bill's desire to help, and the other pros like go34 are always most helpful and respectful.

In my experience you can pretty much let the questions fly.

The thing is we all learn from each other: the term, expert, master, beginner are just labels we used to limit ourselves with.

Its quite silly to limit ourselves in this manner. I consider everyone to be my teacher, always.

Don't dark pool trades get printed on the public exchanges?

Casey great point: He says "Its quite silly to limit ourselves in this manner."

Ever notice how society tries to indoctrinates one with limitations. You can't do this and that.

I say Life Without Limitations is a birthright and do not buy into their garbage.

Will BBD or ITU hold gains due to strength in Brazil or will the fall in financials across the board bring them crashing, just a little later?
And thanks to whoever opened the discussion this morning in place of Bill. Would have been like a day without coffee
peace from north puget sound

I think ITU and BBD will perform on their own merits and on the strength of Brazil. Notice that theses stocks broke out when S&P changed Brazil's debt rating. At the moment Brazil financial stocks are the only financial stocks I would own. I have been trading them in and out for weeks now.

That said thinking can be dangerous, that's why I let the price action tell me what I should try to do.

FWIW

T3D: Trading systems

Money Management.

Every time Crude oil prices start heading down Wall street firms come out with higher traget prices.

Last Week it was Goldman, Pickens and Others.

Today it is Morgan Stanly's turn.

http://www.bloomberg.com/apps/news?pid=20601012&sid=a00wa7.raKFY&refer=commodities

EEMTRADER, Bingo!

Any opinion about GFA( Gafisa S.A. operates as a homebuilder in Brazil)

Actually, moab you may be right. They definitely masks order flow, however.

Telestar3d:
heh! :)

Don't get me started on "society".

To be free is to be oneself, which is quite hard to do, when society happily labels and sorts everyone into the proper bins... It's amazing how the current society has successfully managed to teach people to think they are free by being colorful clones of the images passed down in the media. I consider it to be a wonder of modern society and a dictatorship's dream come true for population control.

Oh well so it goes.

Someone mentioned the new Scottrade Force/velocity tool the other day.

I'm looking at it now with SKF. Very interesting tool. Presents a buyer/seller ratio and a velocity scale setup like a speedometer.
Also a line chart, force chart based on a plus/minus-buyer/seller 0 midline and the same for velocity and volume. Guaranteed to make you twitchy.

Health:

I've been fighting some issues and believe in integrative medicine. Find yourself a doctor who prefers alternative medicine over lining the drug companies' pockets.

Here are some simple guidlines:

Don't eat anything with high fructose corn syrup. It's being used less, now that Corn price has exploded. It's in almost any sweetened non-diet food.

Don't eat trans-fats, commonly used to preserve/stabilize prepared foods, and is concentrated in fried foods.

Don't eat MSG, as it's a neurotoxin. It's hidden on the label as "natural flavoring" if under some %.

Don't eat anything with "Splenda" in it. That's a chlorinated compound discovered while researching rat poison. No natural food contains chlorine.
http://tinyurl.com/54axne

Cook with an oil that can't oxidize. Coconut oil or butter. Olive oil if low temps.
http://tinyurl.com/3nsnfs

Take an Omega 3 fish oil supliment like Carlson's.
http://tinyurl.com/3gh5hu

Don't eat excessive salt, or take Potassium Gluconate to block some of the salt you eat.
http://tinyurl.com/5x2vwz

Don't eat more calories than your burn, or eat less to lose weight.

Exercise ten times more than you think you need.
Realizing I was going to bite it without big change, I joined a gym and have been breaking butt. In 3 mos my waist went from 38 to 34, and now my new 34 shorts are loose. Weight constant but massive conversion to muscle. BP almost normal and pulse lower. Weights, machines, and at least 20 minutes on the treadmill at the target heart rate (or equivalent).
http://tinyurl.com/42rheo

If you do these things, you can avoid a large percentage of the issues that face most of us on todays junk diets. Good Luck!

TLT is not shortable on Fidelity. I got 100 shares to short months ago. No more. Fidelity must short them themselves.

Volume

I agree that there are problems in using Volume indicators to assist in trading decisions but I have not seen any effect of "dark pools" yet in my trades. The biggest problem that I have is the overnight volume of trades that are done on foreign exchanges in futures and in equities. For example, most of us have seen the gaps in our opening prices due to what happened overnight elsewhere such as in GLD.

Routinely, I use the On Balance Volume (OBV) indicator in StockCharts with a SMA(7) applied on the indicator. I tried to capture a daily chart of COST with the indicator overlaid showing how the trades would have lined up almost perfectly with the OBV xOvers of its SMA, but got ruled out due to size of file.

I am a member of StockCharts but the freebie charts might be able to do the same. It's worth a try in my opinion. Works for me, but "works until it doesn't" is the rule.

"Dark ATSs report all of their trades to the consolidated tape so they are fully transparent on a post-trade basis"

http://www.sec.gov/news/speech/2008/spch050908ers.htm

Aurator: great advice

the one thing I would add

when doing Exercise or any activity, work at 70% effort. That's healthy level to ensure you get stronger, but not too much effort to risk overly hurting your body.

That is the flip side when you push too hard, which then breaks you, and starts a negative cycle where you have to do less to prevent re-hurting yourself. This is especially true after the age of 32-35 when the body switches to a slower healing cycle.

Too many people are taught to give it 110% to push the limits all the way, which has the sad side effect of almost always breaking a person in the end.

But no matter what age you are 70-80% effort is healthy limit to push and it improves your health.

peace

Health:

20 Common Cooking Ingredients that Act Like Medicines

The use of herbal treatments for everything from sore throats to cancer has become more and more common with every passing year. We all know about the herbal supplements like St. John’s Wort that can help you with chronic health problems, but did you know that many common edible herbs, spices and vegetables can provide impressive health benefits?

While you probably already use these ingredients in your home, you may not realize that they can do much more than just making your meals tasty and interesting. Here are some common foods that do double duty as effective herbal treatments.

http://tinyurl.com/6ctuzp

On diets, exercise, money and politics - the problems we experience individually and as a society really boil down to responsibility and choice on the individual level.

I applaud those on this site who have taken responsibility of their personal health and made the choice to do something about it. It is the best solution as opposed to government dictated and taxpayer funded health solutions which IMO primarily benefits those who have not taken responsibilty.

One thing I'll also point out about High Fructose Corn Syrup: it's typically 55% fructose/45% glucose.

Regular sugar is made of sucrose, which is 50% each, but chemically bonded, so not entirely the same as corn syrup if it had the same ratios.

Acid environment and enzyme sucrase break down sucrose into glucose and fructose.

My opinion, but not supported by research that I have seen, is that regular sugar isn't much better than high fructose corn syrup. The real danger of fructose is it's action on and processing by the liver (basically increasing insulin and triglycerides more than glucose alone), and I doubt it matters if it came from corn syrup or sugar.

Seamus; Don Coxe talked about the BKX below 75. Definite line in the sand.

Iraq War May Have Increased Energy Costs Worldwide by a Staggering $6 Trillion

Dr Salameh told the all-party parliamentary group on peak oil last month that Iraq had offered the United States a deal, three years before the war, that would have opened up 10 new giant oil fields on "generous" terms in return for the lifting of sanctions. "This would certainly have prevented the steep rise of the oil price," he said. "But the US had a different idea. It planned to occupy Iraq and annex its oil."

http://tinyurl.com/6ykd6a

ProudPapa, Dr.Cosa, Aurator: Great stuff:

Recently, I have changed from fish oil to Krill oil, it is suppose to be 3x better than fish oil.

Ethanol = waste???

heard yesterday from the talking heads that it takes 1400 gallons of water to make one gallon of ethanol along with a .51 subsidy per gallon for taxes.

1/3 of US crops this year are set aside for corn production.

ethanol only yields 3% of the US energy consumption.

Is that accurate?

or does anyone have more accurate numbers? if not the subsidy has to go.....

Either we need sugar imports or??? any other ideas... cannabis grown ethanol?

ideas?

as the TOG approaches, is there a board consensus on 5-10 best bet junior minors?

For those looking to short Bonds - you may want to look at:

TBT - Proshares Ultra Short 20 Year

and

PST - Proshares Ultra Short 7-10 Year

UBB is another Brazilian bank on the move today. GS raised it from sell to neutral today.

One thing for sure on all these stocks (ITU, BBD, UBB) Bill's method would say they are in distribution area not for accumulation at this time.

[Bill Cara note: I'm wondering if there are hedge funds that are mandated only to invest in banks, and the offshore banks are therefore in favor at present.]

Jock linked to the Latin American excellent economic blog Inca Kola News recently. Today it reviews the draft Ecuadorian mining law:

http://tinyurl.com/5opxhh

The max tax will be 5% of gross revenue. The discussed 3 concession limit is not in the law. This does seem to change the equation with respect to Aurelian and other Ecuadorian miners. Much better than feared, it seems.

Magnolia...good question. Bill has a chart of juniors in the archives. Also check out:
http://www.resourcestockguide.com.
I'm long EGO, NOT WGW, ECU,EXK

30% of the food crop is going to Ethanol to save 3% of imported oil.

Ethanol has only 60-70% of the energy per gallon as gasoline. 11,500 BTU/lb ethanol, 19000 for gasoline.

Ethanol causes non flex fuel vehicles running even 10% to perform worse emission wise, due to ethanol's stoich ratio of 9.0:1 vs 14.7 for gas.

It is so corrosive to steel, it cannot be sent through a pipeline when mixed with gasoline. It's shipped by truck and rail to local depots. Nuts!

Law should require cellulosic ethanol only and lift all tarifs from imported ethanol.

Just give the farmers the pork, let them grow what they want, and quit ruining our food system.

Washington is managing to accomplish what terrorists only dream of. Food, oil, and water next.

[Bill Cara note: Aurator, what you are pointing out is another case where public policy is driven by vested interests and not the interests of the People. It's no wonder why federal politicians are held is such low esteem in the US. This move by the Administration was a fraud from the get-go.]

The Ethanol Scam: One of America's Biggest Political Boondoggles

the whole point of corn ethanol is not to solve America's energy crisis, but to generate one of the great political boondoggles of our time. Corn is already the most subsidized crop in America, raking in a total of $51 billion in federal handouts between 1995 and 2005 -- twice as much as wheat subsidies and four times as much as soybeans. Ethanol itself is propped up by hefty subsidies, including a fifty-one-cent-per-gallon tax allowance for refiners. And a study by the International Institute for Sustainable Development found that ethanol subsidies amount to as much as $1.38 per gallon -- about half of ethanol's wholesale market price.

http://tinyurl.com/2h392l

Missouri residents went to court to stop an ethanol plant projected to draw 1.3 million gallons of water a day from the Ozark aquifer, as have residents of other states. And it's not only the ethanol plants that are the water hogs. Increased crop production to feed the ethanol plants consumes even more water resources.

http://solveclimate.com/blog/20080311/ethanol-way-youll-need-water

dreadnaught & moab

Thanks--recall both reading moab's post and hearing Coxe's discussion about 75 and the $BKX.

They're pushing it back up now in the last hour. $BKX just under 75 now at 74.94. Oops!-- just dropped back to 74.79.

Is anyone else subscribing to Schwab's new core international fund?

http://tinyurl.com/62ek68

[Bill Cara note: For long addresses, please use TinyURL.]

reference the nutrition discussion

--specifically reference the French diet. It's my recollection France doesn't employ the same pasteurization/processing of foods (for example cheese) that the U.S. does. Think it may have been a 60 minute segment years ago showing the health difference despite similar diets. Key seemed to be the lack of extensive U.S. processing in French food/dairy products. Scientists actually found rats on French food excreted heart clogging items while those on American diet did not and retained in their system.

2nd
I was up on DUG/SNM; I wish I got rid of them in morning
Now I am stuck and little underwater, I was not touching them yesterday was first time in two week I got in
I think they suck

MikeNYC

About volume
They know total volume we do not know
So, playing stock market we have disadvantage against them (HB&B)
Pillar of capitalist system is equal playing field for people with capital
When that is taken away or destroy, that system will become shaky

VLO looks interesting.

Yep, they drove the $BKX back up over the 75 line in the sand--75.63 at the close.

FTO got upgraded today. The refinery have been beaten to pulp. Glad to see them coming alive. The refinery margin have been on the rise since April. I'd think they'll all have good earning report for Q2. Hope so.

(Long VLO/TSO.)

Very interesting action in financials today. They were melting and then late in the session were aggressively bought.

regarding telestar's comment about krill oil
the only producer i believe is Neptune Bio Resources (NTB) on the TSX venture exchange which i have been invested in for some time.

and their procuct is supposed to be the future of fish oil products in europe.

i hold the stock but dotn recomend it as its done nothing but go down the past few years.

J

Todd Harrison on Miyanville also warned about BKX @ 75 as a support.

I can feel these end-of-day resets in the ultrashorts shaving hours off my life.

Are they EOD resets? Backlogged trades?

I got into SMN @ 3PM, woof! This thing just kept krispykreming down. Hey, at least it's at support now...

bill,

i do see gold going back to 800. im going to load up on smn. mon, pot, etc, are overvalued.

Moab - Ecuadorean Mining Law

Don't forget, it's a DRAFT law, not the final deal. But, it's still a very good sign.

I expect ARU and DMM, etc. to start trading up and down as the constitutional assembly does its work, and the law gets negotiated, then passed into law.

I continue to think that Correa, a Phd economist from Univ. of Illinois, will not behave like military-man Chavez. Especially considering that Ecuador's economy needs the mining revenues as urgently as Chavez' does NOT.

What other country EVER besides VZ has outlawed strip mining because it defaced a forest preserve?

So I just got my newest property tax assessment here in Edmonton. My property assessment increased by about 80% and my taxes went up $700/year to $2800, so need to rant.

Apparently the complaint line at the city was ringing off the hook and the issue was covered on the local news. Not that that will lead to any corrective action...

Who ever thought linking property taxes to lending standards was a good idea? I assure you if you still needed a 10% down payment and 25 year ammort instead of 0% down and 40 year, my taxes would not have increased as much as they did.

At any rate, I am disgusted. I'll leave it at that.

Sorry proudPapa. You are understandably upset. But when we are all done paying for everybody's homes I would like to be the first one in the Countrywide line for a new NINJA loan for a boat. I've had my eye on this one.

http://tinyurl.com/buwep

This really is how ludicrous this has become. People can only afford what they can afford and should not ask you or I for a boat, let alone a home. BTW, especially me.:)

On health:
I'm currently using the South Beach diet (trying to save my knees!) and find that it makes a lot of sense, and is actually fairly easy to stick to, partly because if you break it for a special occasion its not treated as a cardinal sin (as long as there aren't too many). It's also no-carb, but also somewhat anti-fat. Written by a cardiologist, it also makes some sense to a layman. Basic theme is managing your insulin levels, so type of carbs is important. Beer is the big no-no, as it contains maltose, a simple sugar rapidly absorbed into the bloodstream which causes insulin levels to soar, sugars are then absorbed, you feel good, then the blood sugar levels crash down leaving you hungry, or at least ready for another beer. Working for me - I've lost 20 lbs.

A classic tog-of-war today between the bulls and the bears with the major averages trading above and below yesterday's close many times.

What I find interesting is that the number of very weak stocks expanded today even with the major averages closing up on the day. So with the number of very weaks stocks still outnumbering the number of strong stocks, the market is telling us that the downside is still in play and the upside is capped for now. If the market cannot repair itself technically with month-end trading (when it usually rallies) then the writing is one the wall--the market will technically continue to weaken and prices will move down.

JW
http://www.2globalmarkets.com

Re: Futures Curves

I want to point out that the futures curves for precious metals differ from commodities.

Commodities are for the most part in backwardation, while gold and silver are in contango. Gold does not tolerate backwardation, because of the theoretical limits of money.

That aught to be a very important point going forward, since I presume the next step is physical demand increases.

A great debate arose over physical buying vs. price speculation some time ago - its entirely possible that the great weight of investment dollars favour physical accumulation, rather than futures trades.

Action on the London markets shows consistent selling of Gold and Silver.

http://finance.yahoo.com/futures

Re: Municipal Property Taxes

Muncipal bond rates are bound to go up during a credit crunch as well as municipal bond insurance rates.

vinod- well, not every trade works out, and not every trade works out when you think it should...CALM ended up working out in the last 30 minutes, but i wasn't there to capitalize on it-> hopefully the short squeeze extends into thursday...as for SMN/DUG, still holding-> i've gotten beat up on SMN right after entry twice in the past month, only to see a decent gain about 2-3 days later...DUG, i don't know-> at some level, the price of oil has to hurt the energy sector more than it helps, IMO...

I have been lurking for a while, have learned a lot and sincerely appreciate the information and insights from the regular posters on this site. I just finished reading "In Defense of Food" by Michael Pollan, and it was the best book I have ever read regarding nutrition, health and eating. Similar to the book that proudPapa recommends, this book starts with some history on nutritional science and the food industry with its ever shifting dietary guidelines, perplexing pyramids and sketchy and often misleading research regarding food and nutrients. We have been confused and misled, and as a result, have become overweight and unhealthy. The book comes down to seven simple words -- Eat food. Not too much. Mostly plants---and by food, the author is only referring to real, whole food that your grandmother would recognize. Fast, easy read and makes a lot of sense. Highly recommend this book.

Bill,

Before the tech bubble, banks were leaping over each other to put out investment loans for mutual funds on a 1:1 security basis, typically at prime rate plus 1/2 %. One major bank offered insurance on the loans without the necessity of a health questionaire! My associate set up an insured loan for several hundred thousand dollars for a client who had terminal cancer and I questioned the legality and ethics of this. He reminded me that his fiduciary responsibility was to his client and not the bank, and if the bank was prepared to take these risks with weak contracts then he was prepared to bring them ( bad )business. A month after the investments were bought his client died. There had been one payment made on the loan. The estate used the proceeds of the insurance to pay out the loan and cashed in the investments to distribute to beneficiaries. I suppose the bank had the last word because my associate suddenly died of terminal cancer a few years later without a leveraged investment loan in place for himself.

wasn't expecting to see this idea in print given the current landscape, but here it is, under the title "Five money management tips the rich can offer all of us:"

http://tinyurl.com/4tdz2m

excerpt:

'Investing: Long-term growth may be the road to success, but you have to take risk to get rich. No guts, no blue chips, as they say. Concentrated, thoroughly researched positions will make you rich. Diversification, as money manager Marty Whitman -- a hall of fame investor in my mind -- says, "diversification is for amateurs."'

Nikkei up >300 points...

2nd
2nd
Got in airline again, all three DAL/UAUA/NWA
One might go under buy all three will go under is unlikely
Also I am looking at CME if it goes under 400
I can not post when trade is made, because of Job most of the time I enter order and price at which I will buy it. Sometime it gets filled and some time not
I wish I can seat next to laptop and to the trading, but I do not have that luxury
Also I brought oex 640 June put at 9.00 4 contract
I am doing this and learning this oex trade from a trader at work
So far I made more on oex than stock trade
Presently I have
Daly 200
Uaua 200
Nwa 200
IBN 200
CAF 200
PFE 200
MRK 200
Fxp 100 got in at 71 and sold I call June 75 at 4, 70
OEX June 640 put 4@9.00

I left out aig 200

vinod- can't argue with your position sizes, and you're definitely buying on weakness...;)

seamus- enjoy your brief time in the bay area...highs in the sixties, and lows in the fifties...i know of no other place in the world with this kind of climate..

A thought experiment on junior miners like WGW:

I am long WGW. However, after reviewing its mining process and heavy machinery, it seems that WGW is much more susceptible to higher fuel costs than other miners may be (and it has taken a recent hit on the nose ...)

Have any of you Caraistas analyzed the price of junior mining stocks with regard to their type of mining, ie. underground vs. open pit (and the energy costs of each)? There may be a playable trade in there somewhere . . .

Scaling into yahoo 1st thing tomorrow...

ALOHA !!

This is what its like to get oaid with a US Peso and live in Europe! The travel business in Europe will have to get by without US tourists for awhile ...

READ ON:
Thursday, May 29, 2008

COLA Watch (a.k.a. "Food!!!!!")

If I didn't include the source, would you guess this was written by a member of the U.S. foreign service, or by a third-world expat posted in the U.S. or Europe?

Interesting/fun things to do: Travel out of the EU to save money.

What is the availability of groceries and household supplies? EXPENSIVE!!!!

Do you have any recommendations regarding cell phones? Expensive.

Availability and cost of domestic help: Expensive.

Is high speed internet access available? Cost? Good but expensive.

Morale among expats: Terrible.

Can you save money? No way!

Knowing what you now know, would you still go there? No.

Items you would ship if you could do it again? FOOD!!!!!

Post report from U.S. Embassy, Vienna, May 2008

Posted by The Cunning Realist

ALOHA !!

Jagvocate ... What else do you expect ex-Barrick execs to do? All they know is to GO BIG and sell forward!! I believe you are right since in this rising inflation and debt attrition environment the GO BIG strategy will eventually take them down if you add in costs to mine with costs to sell forward. Of course they don't see selling production at $804USD as a loss and I doubt they report it as such ...

Hummm ... I would not be surprised if Barrick Gold bought them out! I am sure these guys still know a few insiders there at ABX!!!

ALOHA !!

TRUCKERS OF AMERICA UNITE !!!

The American Truckers are staging a convoy to protest all things "governmental"! If you're in Albany,NY at 10am on June 19th join in!!

READ ON:
From: The American Driver

Upstate NY 'CONVOY TO THE CAPITOL'

Our convoy will assemble in Fultonville (the base will be at the Betty Beaver Truck Stop) Thursday June 19 and hit the road at 9:00 AM sharp. We expect to parade down State Street in Albany by 10:00 AM and encircle the Capitol Building. Join us at any point along the way in your own vehicle! Be heard! Be seen! Take back our state! ATTENTION TRUCKERS - FOR CONVOY DETAILS AND MORE INFORMATION (INCLUDING TOLL REIMBURSMENT) CALL (800) 724-5345.

Truckers have definitely had enough of high fuel prices for sure.

LONDON -- Hundreds of trucks rolled into central London yesterday(May28), jamming a major route into the British capital in a protest against rising fuel prices.

SOFIA, May 28 (Reuters) - Hundreds of Bulgarian truck drivers protested across the country on Wednesday to press for fuel tax rebates and government help over rising prices.

CHAMPLAIN, N.Y. -- Some truck drivers are falling victim to diesel gasoline thefts.
Police said truckers are siphoning hundreds of dollars of gasoline out of each other's tanks.

Good morning.

One small Cara 100 Ratings Change to report:

GOOG - Target Raised from $600 to $635 @ Susquehanna Financial.

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

Have a great day.

Aurator,
Read your post about getting in better health. Good for you. Last July I started on my journey to better health. At my peak I was 350 lbs, but last July I was 290 and decided it was time to make a lifestyle change.

My approach was to calorie restrict between 1200 to 1400 a day while exercising the equivalent of -1200 calories a day. By January this year my waist went from 48 to 31, my weight went from 290 to 170.

There is no secret formula, I tried it all over the years and the simple equation of calories in vs. calories out is the real deal. If you want to eat empty calories like fast food and sugary junk then you need to reconcile that you will need to spend most of your day exercising to maintain your weight.

Anyway, I don't recommend the drastic calorie restricition. I was experimenting with my body to see how much I could push it and in the end lost too much muscle. I am now 200 lbs, size 32 waist.

I lift weights 3x week and do a minimum of 1 hour of cardio a day (4 mile run and 25 minutes stair climber). I eat about 2200 to 2500 calories a day in 5 meals. 600 for breakfast, 200 for mid morning snack, 600-800 for lunch, 600-800 for dinner, 000-400 for dessert.

Days I up my calorie intake, I exercise more. It is a way of living that I will not compromise now that I am healthy again.

I forgot to mention that I am 39 years old so all you old folk like me can do it. It's never too late.

CB - congratulations! - Impressive achievement.