Why do I believe Beijing will run the market up into the Olympics? China has a history of chaos in the absence of centralized control. There are 1.3 billion people in China, and the Communist Party of China (CPC) has to maintain a tight grip. There were 80,000 mass protests 2005-> that’s right, 80,000…this NY Times article mentions the high incidence while reporting on an incident involving college students over the wording on their diplomas!:

http://tinyurl.com/6fzqzp

Excerpt:

“Disgruntled students have often taken the lead in national protests against corrupt, inefficient or repressive officials. They have also inflated seemingly minor grievances affecting their personal prospects into broader political campaigns, as they did during the student-led pro-democracy demonstrations in 1989.
One of the Communist Party's greatest successes since that upheaval has been to create strong support for the market economy among urban residents, intellectuals and their children.
That bond has held strong for more than a decade, even as China has been engulfed in other types of unrest, including nearly 80,000 mass protests recorded in 2005 alone. Most such events involve peasants, migrant workers or workers laid off from state enterprises, who often lack media-savvy leaders and rarely demand substantive political change.”
I would infer from the above that one of Beijing’s most effective means of control is ensuring jobs and the ability to pursue wealth. A plunging stock market? Chinese bureaucrats are losing sleep-> no doubt in my mind. The Olympics will be internationally televised. If I had tens of thousands of riots waiting to break out each year, I would make sure the economy and the stock market are humming by August.
As usual, JMO…

LOL-> thanks to whoever edited trillion to billion...

Bill, It is clear the the consumer is in trouble.

The business sector is holding up relatively well(reflected by a relative good performance by NASDQ), but signs of fatigue are appearing .

I have posted some charts illustrating that Business sector will follow consumption into recession.

BC - Brunswick

You have to go back to the end of '91 to see Brunswick at a lower price!

If it will just base for a bit, could be a great stock to sell puts on ...

BTW, FT columnist this weekend recommends consumer discretionary stocks on the grounds they have fallen to historically low % of S&P500 market cap.

BC - interesting call by Bill. RSI daily still below 30, but when it ticks up, could be a good move.

BC - 6M shares traded near friday's close (after low volume for the last 5 days) Stock had picked up in previous hours, but dipped down a bit near close.

Bill's not the only one interested in BC.

China, US and the 'entitlement system:'

The US has $40 trillion in an un-/under-funded Medicare system, and expectations (realistic or not) of a Social Security shortfall. Also a rapidly aging population and shrinking work force.

China has been exporting migrant labor globally, which is, after all, in their best interests: the unemployed find work, and they send money home to boost the local economy. Illegal? Sure...but by turning the other way/favorable tax treatment of returning funds they tacitly encourage the practice.

Right now consumers benefit from lower prices (via lower wages), and China benefits from lower unemployment and capital earned abroad being re-invested in local economies.

At some point, it may benefit the US to legalize (ie, tax) these workers. The challenge will be to open the doors just enough to capture the shortfall in entitlement funding, with minimal impact on the consumer.

2nd

"but i can only post my take(s) so long before calling them wrong...so i've been wrong the last few days"

Look at it this way, you may of gotton in just at the right time and built a nice position. When oil drops and the oil sector sells off what you now call "wrong" will turn out to be brilliant". Did you see the post by FranSix June 21, 2008 11:42 AM ? He posted an interesting chart & conclusions.

"....you will notice each occasion for a bond rout is clearly when the price of a related indice peaks and then declines. Housing is a prominent example, and I believe that oil is also a very prominent example.

If you get my analogy, it follows that oil markets will follow the oil price through a correction much like the housing sector corrected on the heels of a bond rout."

Well worth the look. [Thanks FranSix]

Also I saw this yesterday on Bloomberg.

Oil May Fall on U.S. Consumption Drop, Survey Shows:
http://tinyurl.com/5vbwtx

So your airlines/refiners/DUG should take off once the sell off starts to takes place.

Finger Lakes

"At this point I'll be happy if it comes down to it's 50 day moving average at around 127. Any more than that and we'd have to bow to the market gods and thank them"

I was hoping for 100. Heck the market gods poured out their wrath on me in regards to FXP, now I looking for some grace.

[Allen I take it you are still holding FXP? If so you have to be in the green...green...green.]

QT- ah, yes...the distinction between being wrong and being brilliant always depends on context or perspective ;)...i just don't want to be confused with the unbelievable number of newsletter writers who were "basically right all along..except for spikes down earlier in the year and last month."

2nd-
I think your position on CAF/airlines/DUG is directionally correct but it may not be a day/swing trade but rather IT or even LT position and should be sized smaller. Based on your post history here you seem to excel at ST trading, so maybe this is a bit different. Please take it with a grain of salt since I am not a daytrader myself.

occam_razor-> good observation...i will be looking to downsize the positions into strength...

Cycles in different metals per Seekingalpha.com

Lead has crashed, Nickel is way down, but PM's look good to the author. Also, today's zinc prices will someday look cheap:

http://tinyurl.com/5cebek

BC - Thanks Bill, for clueing us in on Friday's magnitude. I had no visibility pertaining to that dynamic. Brunswick obviously is dependant upon their materials costs, such as resins used in building marine craft.

Considering what's happening in the chemical industry (supply side Hunter? DOW Chem.?) and consumer interest in non-essentials (demand side CPI, financing, etc.) in addition to the indicators above, are part of my decision on a long like BC. Summarizing in my macro mind, it's tantamount to shorting oil and going long consumer sentiment.

Perhaps I'm just pointing out the obvious...?

2 bucks for a Coke and 7 bucks for a Bud? i can see the smiles on concessionaire's faces...

http://tinyurl.com/6be5pf

It's a little hard seeing BC moving up much in the near future given their marine-oriented business.

A 25-foot cabin cruiser gets about one mile per gallon and, on anything larger, it's more appropriate to cite gallons PER MILE. At current (or projected) oil prices I feel intense pain thinking of cruising the 700-mile round trip from Chicago to Mackinac Island. One-and-a-half gallons per mile times 700 times (maybe) five dollars equals just over FIVE GRAND for the trip.

And that's peanuts compared to a trip down the ICW to Florida for the winter. OUCH!!!!!

RML - Rusoro

Just took over Hecla's properties in VZ (having already bought out Goldfields). Are KRY and GRZ next? I wouldn't be surprised!

If anybody knows how to post graphics so caristas can access it, I've just updated Rusoro's map of Bolivar State, and it's quite dramatic ...

Jock:

A link to the Rusoro web site and look under projects gives you a good map of the Hecla holdings also shows Kry's holdings www.rusoro.com I am long rosoro and looking to build a position as conditions warrent.

ronK

anyone have thoughts on Tata Motors (TTM)??

share price has been beaten down hard over past few months

here's a chart from stockcharts:

http://stockcharts.com/h-sc/ui?s=ttm

seems to be a sound company with good growth prospects (worthy maybe of a CARA 100 BRIC)??

driven down by current bear trend on the BSE and emerging markets

currently in RSI accumulation zone

possible near-term opportunity to pick up strong outperformer for next bull cycle at fire-sale price

thoughts???

RonK -

Of course, I've been to rusoro's website. That map shows how CLOSE together the deposits are in Bolivar. Are any other western companies there, but KRY and GRZ, who have lost on their applications? I haven't been able to find any others that are still there.

Regarding the RBS warning and conditions in the global financial sector, the Daily Pfenig offered a good analogy.....

"The liquidity / credit crunch losses booked so far will turn out to be merely the appetizer to this four course meal!"

Re Bill's comment on BC, I think it's way too early to think about investing in gas guzzling consumer discretionary products such as boats,motor homes,etc. Unless incomes take a huge leap upward,or the dollar comes roaring back, these type of investments seem like dead money at best, for a long while. Some think if oil drops to $80 everything will return to normal. My guess is that $80 oil has not yet been factored into end user prices... let alone $130 oil. Just my humble opinion

Re: Paul Van Eeden, Hard Money Advocate Guy

Bit of a treat today, video with Victor Adair + Paul Van Eeden. Some discussion of gold investments, commodities, asset price deflation, margin compression, banking crises, investment outlook. Says the margin compression + risk aversion causes a bear market in junior gold investments. Lengthy discussion of inflation expectations at the end was a bit of a surprise:

Google Videos:

http://tinyurl.com/47u3jd

If you will recall, margin compression caused risk aversion in South African gold miners early on in the gold bull market due to the sixfold rise in the Rand at the time.

So if fluctuations in foreign exchange rates are a determinant in investor preference in gold shares, then the appropriate gold mining investment would be a call on the exchange rates outlook. So, for example, if you're partial to Canadian gold miners due to low political risk, there has been a very large currency risk attached to that and junior gold miners have sufferred accordingly. I would say, unless they proved up a substantial deposit which reduced the preception of risk, then your gold shares got trashed.

F6

For the first time in my recollection, on options expiry date on June 20, the SPY closed at 131.5, much below the 139 projected by max pain calculation.Same for the DJIA and QQQQ.Usually, as option investor, you can bet with 90% confidence that Market makers are going to close the index close to the max pain level.

I see this as confirmation that market forces are overwhelming the ability of insiders to bring about outcomes that are favourable to them.

Or maybe they are ahead of the curve. Any comments?

ALOHA !!

Some stats on just commuting in the USA compared to the rest of the World. I see room for improvement and perhaps these high gasoline prices(low compared to other countries)will usher in real concern!

Transportation
Main article: Transportation in the United States

As of 2003, there were 759 automobiles per 1,000 Americans, compared to 472 per 1,000 inhabitants of the European Union the following year.[109] Approximately 39% of personal vehicles are vans, SUVs, or light trucks.[110] The average American adult (accounting for all drivers and nondrivers) spends 55 minutes behind the wheel every day, driving 29 miles (47 km).[111] The U.S. intercity passenger rail system is relatively weak.[112] Only 9% of total U.S. work trips employ mass transit, compared to 38.8% in Europe.[113] Bicycle usage is minimal, well below European levels.
From Wikipedia

ALOHA !!

I just read an article by the ex-SDS(Students For A Democratic Society)leader and ex-husband of Jane Fonda ... TOM HAYDEN. The name of the article is "THE NEXT DR. STRANGELOVE". You can find it at www.commondreams.org.

Check out what he writes but then more than that check out what the "COMMENTS" are about his article and HIM and the Democratic Party. Common Dreams Dot Org is not exactly a bastion for Republicans, but judging from the majority of the comments it seems the readers have lost faith in the Democrats as well. Of course I put my two centavos in as well.

I recall the Vietnam War era and how HAYDEN played a big role in the anti-war movement. Strange how it seems he is now a sell out to the usual cozy comfort of the two party aristocracy and the elite "establishment' lifestyle he used to rail against in his youth. Some of the commentors even think the Dalai Lama is a sell out! Disenchantment is brewing. Of course that is a good and great thing since there can never be any real CHANGE unless there is a revolution of the masses. Those cards are on the table, because the powers that be will never give up those powers easily. That can be seen by the bipartisan enactment of laws that restrict our rights and also bind us more closely to a "debtors prison" and financial serfdom through currency debasement.

While the Third World riots in the streets over high prices of food and gas we Americans laugh in disgust at "gas" jokes on Leno! There's a big difference ... we're cozy but not yet disturbed and fearful enough to take to the streets.

The US political system is in trouble. Its old and tired and as the US Middle Class collapses more discontent will surface, until the USSA goes the way of the USSR and an M1 tank in a mob of disenchantment fires a single round right through the Rotunda.

We now have "taxation without representation" ... That's what sunk the KING OF ENGLAND!

Relative to BC. I am not as enthusiastic about future due to 1)the baby boomers are aging through the times that they will be boat consumers.Also the economic outlook for that group is probably not going to be as hopeful as it was in the past. All this points to lower demand and;
b)used boats don't go away like they used to. This points to increased supply of alternatives.

I can't see the comeback anytime soon, even for the best run marine mfgs. However, I have not looked at BC's books or plans for the future.

http://tinyurl.com/6a5x7g

Sunday Morning Coffee.

1 year TA on the GDX for the goldies out there,

some bullish divergence appearing on the charts after a recent bounce from longer term support:

http://jglobal.blogspot.com/2008/06/gdx-1-year-ta.html

uncool - BC

I think it's hard to know how large, fundamental concepts play into short-term stock prices of large companies like Cara 100's.

If RSI, MACD and volume suggest bottoming and start of a trend, when there's a way to run to resistance, why not hop on board? With liquid stocks, a stop can take you out at minimal loss if you're wrong.

If a first upside target is over 4X the distance down to your stop-loss, isn't it good for a trade?

FWIW

I tend to agree with uncool about the long term prospects of boat and rv manufacturers. Didn't something similar happen post tech bubble to many of the hardware makers?

Look at CSCO, crashed early 2001 to under $20, and basically hovered around $20 for the next 5 years, and even now sits only at $25. And their products become obsolete, not so much with boats and RVs!!

But as Jock might point out, that doesn't mean there isn't money to be made. I.e. CSCO spiked down in 2002 to under $10, and spiked up to $30 in a year and a half.

As more of a ground report, I must say my jaw drops whenever I drive by some of the massive RV lots around town. I don't know how much they exist like they do here elsewhere, but I'm talking fields filled with what looks like hundreds of RV's. It would be interesting to see what the inventory of builders looks like (quick check on Winnebago show's no signficant buildup?!)

How is this inventory going to be moved over the next few years? Slowly and with deep discounts. And yes, as boomers get older or need money, they'll be loading up the resale market. Seems similar to housing market really, and who see's that picking up in the next few years?

Uncool - On Marine oriented products: I live near a recreational lake and spend much time at the local marina. Obviously, boat sales are a very tough place to be at the moment and steep discounts are in the offering. BC recently sold off their BAJA division, which no one has yet mentioned on this blog. I can add that Searay products are top-notch in my book. FWIW, my experience is that baby boomers are a huge part of the new boat market. Post baby-boom are more common to the used market.

Disclosure - I own BC and will likely buy more on dips, keeping in mind this could be a real looser if the economy continues sliding into the abyss.

Regarding the gold system I had mentioned earlier, the following url has an image of the spreadsheet that I use. http://tinyurl.com/4ttuks

The center oscillator is a breadth-based system, the blue line is a 10day EMA, the red bars are the 4day EMA, and the green bars at the bottom represent a portfolio value. I have a cyclic system which lays on top of this also.

Signals are given when the 10day EMA turns and is above or below a threshold value. As I mentioned, there was a buy signal given a few days ago.

As always, think first.

Karl

Bill, with regard to Long Bay the South Side Chicago hick in me has to ask why a spare toilet in the master bathroom?

;)

Seriously, it's a grand house. Good luck to your friend in finding a buyer.

Hey Bill,
What else does that injured knee foresee in this market?

Headline from NikkeiNet:

"Energy Firms Lead World In Market Cap; Toyota In 21st Place

TOKYO (Nikkei)--Energy companies now have the highest market capitalizations in the world, surpassing information technology firms and U.S. financial institutions, with Toyota Motor Corp. (7203) the highest-ranked Japanese company at No. 21."

how recently was it that financial firms led the world in market cap?

re: Toyota

Coming out with a 100 mpg hybrid at 20-30% cost reduction in 2009 has got to be good for the stock. Not in the AZ zone yet, but maybe around $85-90 it will get there.

Tried tiny url and it didn't work, here is the link.

http://www.edmunds.com/insideline/do/News/articleId=109981

Citigroup slashing jobs:

http://tinyurl.com/4yv92t

note that it's closing a hedge fund off-loaded by the CEO onto unsuspecting shareholders:

"Earlier this month, the bank said it was closing the Old Lane Partners hedge fund that was co-founded by Chief Executive Vikram Pandit. The bank is shuttering the fund just 11 months after it was acquired for more than $800 million."

insiders cash out at the top, investors left holding...what's new...

2nd_ave: I followed you into TSO and VLO a couple of weeks ago, but I am now having second thoughts about that position. While I do agree that in the long run, the price of gasoline should come in line with the price of oil, and refiners should get their business back (recently, the oil price was increasing faster than the price of gasoline). My timing for entering this trade was that VLO and TSO were at the points where a rise would indicate a double bottom, and even though I set buy stop orders above those points, apparently they were too tight, since they got triggered and then the refiners turned south. Today I read on Vad Graifer's web site that a position should be closed when the reasons for entering it are no longer there. If I look at TSO/VLO charts now, I see a break below a support level, and if I saw these charts for the first time, I wouldn't buy these stocks but rather wait for their price to turn up. So I just put a tight sell stop limit order for my TSO position, and will do the same at the end of the day tomorrow for VLO. My other reason for doing this is that I think the market will go down until the 4th of July weekend (many people expect a bounce off DOW 11750, since the memory of the recent rally is still fresh, and so instead I think DOW will drop sharply to 11000) but will then start rallying after the long weekend (as the oil price will collapse when Bush signs and executive order to start off-shore drilling), and so I would rather sell refiners now and re-enter before the long weekend. Does it seem reasonable?

DavidV

The ban on offshore drilling is a national ban that must be voted on by The House and Senate.
It cannot be done by executive order or Shrub wouldn't have appealed to Congress to approve his plan, he would have simply done it.
What a drag for him we aren't a monarchy.
What a blessing for us.

I don't think this will come before Congress before the oil men leave the Whitehouse in January.

Some folks might want to see the latest poll of independant voters in California and what the Governor of California has to say about this issue. He seems like a savvy guy with good political instincts. Independant voters in CA reject the idea 2 to 1. The Governor says the shoreline is a National Treasure. As California goes, so goes the nation...and McCain's chances.
Florida (or any state) is useless to McCain without California, our most populated state.

He is going to need those California voters in early November. Together with the Speaker of the House noting that there are already something like 68 leases not presently being utilized by the greedy OB's will make offshore drilling seem premature. There is no doubt there will be lip service though....but the soonest we would see oil from any offshore drilling would be four to ten years out.
Not exactly timely relief.

I would bet (strike that, HAVE bet) a hunk O' cash the price of oil will plunge well before November on demand destruction and a flagging economy.

I would listen to Bill's WIR on oil. The refiners will be picking up when oil goes down, which is already happening. One of the local Seattle stations reported today that gas prices not only stopped rising but actually fell this weekend. It's back to fundamentals sooner or later, and with them the price of oil and the Bush/McCain plan sinks like the Exxon Valdez.

Those low 20's TSO prices (20.05) might be the low. Tight stops would be good though as there will likely be chances to reenter if you are stopped out. I would be adding even more if TSO see's the teens.
JMO, which, with a couple bucks, gets you an Americano at Starbucks.

David- so now you're the daytrader and i'm the one betting on a longer horizon ;) to be honest, if i were to look at these charts for the first time now, i'd (still) be buying...i was obviously early, but my reasons for entering haven't changed...

2nd,
What do you see in VLO's chart that you like? Daily or weekly? Looks like a falling knife to me right now, but I've been wrong before.

Holy cow....gold sure is all over the place this AM. I watched the GLD go from the low 89's to the low 87's in a half hour...

Gold getting a real bashing now 880

Good morning.

Here are your Cara 100 Ratings Changes:

Upgrade:

JCP - to Buy @ Deutsche Securities

Downgrade:

PDA - to Hold @ Citigroup

New Coverage:

JNJ - Market Perform @ Leerink Swann

Target Raised:

RIMM - from $150 to $165 @ RBC

Target Lowered:

CCJ - from $51 to $50 @ RBC

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

Have a great day.

GLD now in the mid 86's...look out below...

[Bill Cara note: The picture from Kitco tells it all.

http://www.kitco.com/charts/popup/au24hr3day.html

I wonder if Dennis Gartman is going to change his tune on gold for the nth time this year? Anyway, I think in the WIR you got a sense that this might happen. I was saying that the goldminer stocks have been going nowhere, and that's usually the precursor to the metals prices.]

Sold my Uk version of GLD 30 mins ago, was expecting a pull back , but nothing on this scale.

tigermaple- short answer is it's ugly, which is why i like it..

Poor Dennis, is he now joining Cramer as our contrarian indicator?

Speaking of pumpers....what on earth is with Betty Lu on Bloomberg? I would embarrassed to ask some of the rediculous questions I hear come from her mouth. The tenor and quality of Bloomberg has sunk to CNBC levels since FAUX siphoned off Bloomberg's former talent....and now they've become pumpers for Rupert.

Proof they just say what they are paid to say....

I would BE embarrassed...

If WAG doesn't pop, then I'm looking to NWPX...

Might buy gold this week

Bill, with Brunswick at these price levels, do you see a potential for the rich dividend to be cut ??
Thanks.