Good morning.

One Cara 100 Ratings Change to report:

BMY - Downgraded to Neutral @ Cowen & Co.

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

Have a great day.

The thing I like best about trading the Cara 100 approach is, if you end up misfiring on a trade, you at least temporarily have ownership of a relatively strong company until you can find your exit. It sure beats finding yourself the proud new owner of some rusty drilling equipment and six sections of moose pasture.

Well, the futures are looking pretty nasty again in pre-market. While this may be just another whipsaw within the recent trading range, I think we may break down for good this week with the next stop being 1270 on the S&P.

Looking to enter SDS early today with a tight stop.

NOT.V on the watchlist..

There are no good companies.
There are no bad companies.
There are stocks that go down, stocks that go up, and stocks that don't seem to go anywhere. Before you question the potential profitability of rusty drilling equipment and moose pasture check out the chart of Gasco Energy (GSX) and then look at the photo on their website of the rusty drill (one drill) with the moose standing next to it:) It aint Google, but how many shares of GOOG can you afford?

If the oil inventory # surprises to the light side DCR will do a nosedive as it did last week. Stock went to 95 cents.

gold looking weak again,
gold stocks doing their usual up at the start
and slow grind down thus far.

nice little jump in the POG prior to the open but a close above $900 is needed before im getting back in.

On average, gold producers will need the price of gold to stay north of $700/oz if they are to turn a profit in the current environment of rising costs, Barrick Gold CFO Jamie Sokalsky said on Tuesday.
http://tinyurl.com/64oowa

Took Shark's advice....I bought the moose. :>)

Ed McMahon fighting foreclosure on his Beverly Hills home... was $644,000 behind on payments on $4.8 million in mortgage loans when a unit of Countrywide Financial Corp. filed a default notice Feb. 28

Wishful thinking - If only HB&B had used an approach remotely similar to Bill's, when underwriting mortgages... ditto Fed/HB&B.

ESLR looking interesting again..

gold needs to come down a little bit more before its a buying opportunity

picking up GFI at 12.25...

GSX - 34 employees, untold quantity heard of moose?

2nd - thanks for the heads up on NOT.V - I didn't think I'd be able to get back in at these prices - bought small pos. this morning at 3.38

The markets in Europe are down:

http://finance.yahoo.com/intlindices?e=europe

Investigating the oil market manipulators

by Mexico Mike

CNN ran a show last night on the story of high oil prices and a big part of the commentary focused on the reported investigation through the CFTC regarding alleged oil price manipulations. This was also discussed recently on CNBC during prime time.

I find it ironic that GATA has been pounding the table for an investigation into ongoing manipulation on the precious metals for years, and along the way has presented some pretty compellingevidence that at least warrants consideration, even for the most skeptical observers. Yet the response has been an abrupt dismissal of all that is brought to light. Even worse, we put up with the 'tinfoil hats' references and the entire story is a wall-to-wall joke from anyone that does care to mention it.

Okay, so there is no manipulation, and those that dare to suggest it are merely conspiracy nuts. So why is the investigation in the oil sector a hot news story with frequent discussion and analysis? The hypocrisy is astounding. Where are the tinfoil hats on the CNBC panel?

I was hoping for some kind of rebuttal regarding the whole concept of manipulation in oil, but instead we can sit back and listen to the crickets chirp. It all comes down to whose oxe is gored. The big money has been short gold all the way up, and there is cheerleading from the media at every downtick for gold. Conversely, the big money has been fading the oil move higher as an irrational move that is unsustainable.

Now that oil is making new highs on a daily basis, some of these parties are starting to squirm. Hence the investigation... And the unprecedented willingness of the CFTC to acknowledge the investigation before it had been concluded should indicate very clearly exactly which side of the debate they are leaning towards. The same agency put out a blatant whitewash on the issue of silver manipulation just a few weeks earlier, yet now they seem to be throwing their influence and moral authority on the line with very suggestive commentary that the allegations are legitimate.

I enjoyed a lively debate with a number of analysts during a recent property tour in Mexico, and most of them politely suggested I was out to lunch when I stated that the metals were heavily manipulated. The moderates would only acknowledge that all markets are manipulated and nothing special was out of line with gold and silver.

Most were unwilling to even consider in our markets that anything unsavory could be ongoing. Now that the genie is out of the bottle, maybe some more balanced consideration may be directed towards what GATA has been saying all along. I do not expect that the talking heads will ever give us the time of day, but I do think there have to be some neutral parties out there that will at least raise serious questions to review the body of evidence.

Even though I personally believe that there is no way that the oil markets can be rigged through manipulation to create such a move higher, this could generate just the kind of attention we need to shine the light on the precious metals, and I suspect there will be a flurry of cockroaches scrambling for cover if that were to happen.

cheers!

MexicoMike

http://www.smartinvestment.ca/

sundance-> 7% in an hour is a good start...

Aurator - nice call on near term top for TSO yesterday

DCR-> bailing at 1.42...

adding to QID...

Adding HDB (89.11) and IBN (35.13)

Bailing? Why dude, it's just getting good for godsake. It's just now crossing the 20 day ma. It could go to 10 bucks from here.

Woah... I didn't say to buy GSX I said to look at the chart.

i thought it was a red chip

The trend over the last few days of flat gold prices with falling oil prices would suggest increasing margins for miners as cash costs moderate. But miners are getting kicked around this morning.

I guess the question is whether:

1) the falling share prices of miners is a knee-jerk reaction to falling oil prices

OR

2) falling oil prices are foretelling a near-term fall in precious metals prices as well (and perhaps commodities as a sector)

Anyone looking at Anglo American? Former CEO of GFI Ian Cockerill is now CEO.

http://quote.morningstar.com/Quote/Quote.aspx?ticker=AAUK&SC=Q

Seems like the stock is in a better place than GFI though it is a bit toppy.

vinod- selling the airlines here...

closing out half the DUG...

shark- it was a red chip...i just recognize strength when i see it, and i tend to sell into it...i'll toss the chip back on when i see weakness...

Yeh but doesnt the etf come into the money below 120? From here on down it's MONEY.

only problem is it ceases to trade june 25-> otherwise, i'd lean towards holding onto it...

Closing ROM.

Charts look to be topping out.....

billy sundance:

i dont buy the notion that miners are underperforming because of a high oil price,
consider how many of the oil stocks underperformed oil during the past while as well.

why did the miners stil underperform when oil was under $100?

i think many mining companies use this as an excuse but will be left with more explaining to do if they continue to lag gold should oil fall back below $100.

VIX is up against the 50-day MA

Something about 2nd's post last night (oil/commodities correction brings down market) rings true.

I think We are seeing Bill's commodity/gold call play out.

--Lehman Jumps 7% After Upgraded At Merrill Lynch, CNBC Says

This drives me to drink, Merrill will probably upgrade Lehman later today to return the favor.

Sorry meant to say -

Lehman will upgrade Merrill.

Lehman looks to be putting in a temporary bottom. The uplegs have higher volume then the downlegs on a 5 minute chart.

Anyone else have an opinion?

C-Town,

nah, you missed it yesterday. LEH defended MER, so MER today just returns the favor (Grin)

Dr. Cosa - your points are valid.

I think a lot of the reason for oil stocks underperforming (relative to oil prices) during the recent oil run simply comes down to an outlook for future margins. As oil ran to $135, the costs for a company like XOM to replace future supplies (and the capital costs required to do so) were running just as fast. Despite the huge run in oil prices, were real profit margins (and future outlook for margins) substantially widening for the oil producers? IMHO, I don't think they were.

For miners, right now, the cost to replace reserves does not seem to be as difficult as in the oil space, as evidenced by valuations of gold juniors and explorers. Gold miners are not having to compete heavily with global governments to secure future supplies. Thus, I think the future outlook for margins is decent, and that outlook will increase if the trend of lower oil prices relative to gold.

In response to why miners may have underperformed even when oil was $100, my simple view is that since oil and raw materials were in the midst of an uptrend, cash costs were always rising at the same time as gold spot price. Future margins were not necesarily widening at that time.

So, if you believe that this trend continues(gold outperforming relative to oil), it would seem logical to look for an entry of short gold/long miners as a bet on an increase of margins (as opposed to a bet on increased spot prices).

With that said, I am not an expert and have not followed this market as long as many of you who monitor this board, so take this post with a grain of salt.

GENEVA (AFP) - It doesn't pay to be smart and ignorance really is bliss if you want a long life -- at least if you're a fly, according to new research by a Swiss university.

Scientists Tadeusz Kawecki and Joep Burger at the University of Lausanne said Wednesday they had discovered a "negative correlation between an improvement in a fly's mental capacity and its longevity".

As part of their research project, the results of which are published in the journal Evolution, they divided into two a group of flies from the Basel region of northwestern Switzerland.

One half was left in a natural state while the other had its intelligence boosted by Pavlovian methods, such as associating smell and taste with particular food or experiences.

Over 30 to 40 generations, these methods led to flies which clearly learned better and remembered things for longer.

The flipside was that the flies left in their natural state lived longer on average than their "cleverer" counterparts, with a lifespan of 80-85 days rather than the normal 50-60..

"In other terms, the more the fly becomes intelligent, the shorter its lifespan," the scientists said.

This is most probably because the increase in neural activity weakens the fly's life-support systems, they speculated.

"This would explain why flies, like most other animals, have hardly developed their neural capacities," they said.

DIA Jul 124 puts.

But it might indicate ongoing improvement.
One would think smart flies, IE: those that learn from positive reinforcement, would be the flies that outsmart the dumb ones for mates, sex being a pretty powerful positive reinforcement.
Thus slowly improving the gene pool for learning, but sadly decreasing life span at the same time.

Gotta love genetics, it's a two way street, it works equally well both ways.

Moody's possible downgrade of MBIA & Ambac

I have puts on MBI and ABK and BKX. The two insurers are on their way down like a bolide.
hehe

Picking up some GFI here at 12.27 on a simple oversold/mean regression play.

Billy and Dr. Cosa, this is an interesting topic. I've advocated a long oil services/short integrated majors hedged position for a few years now.

Regardless whether you are a "peak oil" believer, I think we all know that the easy oil has been extracted and exploration/production costs will rise, squeezing margins for the integrateds, but meaning plenty of business for drillers, rigs, etc. And while demand destruction from rising prices may occur in the short term, in the long term India, China, etc will continue to require more petrol.

They have stalled long enough that the downgrades of MBIA and Ambac are expected and may not roil the markets.

McHugh clip: In Monday evening's issue we thought the first wave of {3} down, {i} down needed one more decline to finish, but the decline ended up being larger than we thought, arguing that this in fact is one nasty wave down underway. The bounce we thought would follow probably started late Tuesday afternoon and probably has a half day to a day and a half left in it before a decline that could be 500 points later this week into early next, which would be wave {iii} down within {3} down. Take note, however, that wave {3} down is only part of the first wave down within a higher degree wave iii down. We believe this decline that started back on May 19th is just the start of Micro degree wave 1 down of iii down, so there is a ton of downside potential left here.

Well, it looks like Dreamhost is failing me yet again, so my RSI application is down. In an attempt to avoid this problem in the future, I've moved it over to one of Bill's servers. It should run a lot faster there (after a few days to build up its database again), but let me know if you have any problems.

The new address is: http://rsi.caracommunity.com/

In a short while, the old address will start redirecting people to the new one just in case people aren't reading here.

You can reach me at jeff @ billcara.com to let me know of any issues with the new setup. Sorry for any inconvenience.

Vad -

Good call, but I wonder if this Circle of Love will ever end? Our financial services industry and our government need to do some housecleaning, top to bottom restructuring. Wishful thinking.

korvus,

Link works and so does the app. Thank you; it's a great tool and I appreciate your work.

btw, users should confirm the CARA 100 symbols so that ones like LEH don't pop up like it did on mine!

"Circle of love" depends on credibility; it feels to me like many institutions are about to lose their credibility as the public won't swallow propaganda forever. The turn will be really ugly in many ways.

DUG-> closing out the balance of my position...don't know if the short oil play takes a breather, but looking at UNG, think it may...

still holding SMN/QID/GFI...

Yeah, at some point I need to fix the Cara 100 list, but it's been pretty low-priority for me. In case anyone is curious, I removed the ads since I'm no longer providing the hosting and that seemed inappropriate to me. But I appreciate all the clicks I've gotten in the past.

Jeff,

If the whole world were like you this place would be a much, much better place. Thank you.

(had a limit to buy NOT.V at 3.30USD this morning which never hit, then it just ran away from me...it happens)...

yield on the long bond taking off...

pressing QID trade...

Colin Twiggs Groupies

Reminder:

Reversal below 12450 would confirm another test of primary support at 11750

Reversal below 1375 would signal a test of primary support at 1270.

buying fxp with both hands

Korvus - Thanks for your RSI work. A very useful tool. Appreciate your time maintaining it.

another reminder-> CT also warns "the accelerating up-trend in crude may culminate in a sharp upward spike, followed by an equally sharp drop as the market corrects.." nice trade if you can stomach volatility/catch the turns...

South Africa's economy
Economist.com :
Power cuts and lower consumer demand will mean less growth

South African growth is already being affected by electricity shortages and a slowdown in consumer demand. The annual figure may fall below 4% for the first time in five years.
The mining industry has been particularly hard-hit: following late-January blackouts, state energy utility Eskom cut supplies to 90% of normal levels. However, this is insufficient to maintain output, as the bulk of power used by mines is to keep pits functioning (including ventilation and drainage) rather than producing. Although power supplies to mines were subsequently raised to 95% of normal levels, mining production fell by 22.1% in January-March, declining to its lowest level in 40 years.

"Gold futures mark second-straight day of loss

By Myra P. Saefong, MarketWatch ..."

God help us with two days of back to back losses.

Banking index has suffered four consecutive days of > 1% losses. No coverage of that, as that would spook the natives and is more relevant.

There really is a war on the price of gold.

moab:

Speaking about the banking index, have you seen the charts of UBS and Barclays lately? In my opinino, the price actions of these European bank stocks are far worse than those of the American ones.

Allen

You maybe on the hot seat by Friday on whether to hold FXP over the weekend or not.

Feel the pressure? :-)

http://tinyurl.com/5zwvfb

Teich,

on May 23 we exchanged about IYR, and I feel I need to give an update (having said A, gotta say B). First, I'll repost my scenario toprovide the context:

"Looking at daily - it's weaker than the market overall; it's touching on lower band with voulme drying up; feels like bounce is in order; I would see short entry on that bounce, verifying it with volume. Ideally, bounce closer to 70, not breaking it anymore so it serves as a nice tight stop level; then flush through today's support into 65.50 or so where I would have covered half, trailed stop to just above the high of the "flush" day, and try to ride it for loss of 65 followed by sharp spike down where I would have happily closed it."

Now a week and half later, looking at the development:

- first part of scenario worked to the letter. Bounce to 70 provided short entry opportunity and confirmed resistance, IYR retreated into 68 and held it so far
- today's bar went through almost whole range stopping within 40 cents from upper limit and 25 cents from lower one; so far so good, especially if finishes closer to lower limit.
- - for now I would still keep stop above 70; if IYR breaks above it and finishes day there, chart becomes an unreadable mess and can dio anything from there;
- if it loses 68 and finishes the day there, I would trail stop to above the top of the highest bar within 68-70 range - so far it's 69.60;
- if thing loses 67.30 - 67.50 support, original scenario quoted above is still intact

I shorted UBS after Bill referenced some of the results of UBS's internal investigation. Any company run that badly with so little internal control is likely to be beyond repair. Their current strategy of raising money so they don't have to sell their CDO's in the hope they will recover value is really something to behold in terms of denial. But that may be the only thing they can do.

I still don't understand how they can sell stock at $20 per share yet the stock is trading near $24. Am I missing something?

2nd

You still holding any DUG? This has been one nice ride [truck load] so far and it may continue into tomorrow.

QT, what's special about Friday? At $73, I have only about $4 per share loss. I'm hoping it claws its way back to $80. It would be nice to exit with a little profit, all the wiser for this dumb move....

allen. i just started buying. it will see 80

Allen

The way it was moving a while back I figured by Friday you would be very near your cost basis. So with the weekend looking at you, it would be a hard call to hold into next week. FXP can drop like a rock or take off like a rocket. We both learned afew months ago.

Sold 2/3 NOT.V position @3.84 - 13.6% intraday! - letting the rest ride - I think it probably goes to 4.50 area near term

thanks again to 2nd who put this on the radar today

Vadym:

Thanks very much for your professional advice.

Since I noticed that IYR has fairly strong support at the ~$68 area, my currently trading position on IYR is short + $69 July written puts.

If IYR pops above $70, I will buy my puts back (and try to write them again later).

If IYR loses the $67 area as you said, I have no problem with my puts getting exercised in July (i.e., closing my short position), as I got a premium of $2.65 per share from put writing.

The cost basis of my IYR short alone is $68, but it is increased to $71.55 because of the short puts (I have written puts a couple of times already).

Well, my yesterday's trade of buying TBT and shorting XHB worked out today. Still holding it for tomorrow, but I have just remembered that TBT is an ultrashort and so it tends to fall over time if its volatility is large relative to the uptrend in yields, which I think is the case for TBT. So I'll probably bail out of TBT tomorrow if it rises again and switch to shorting TLT instead, which is a safer play long term (it doesn't fall over time).

Exploiting this idea further, the safest long-term bet would be to short some ultrashort that I believe should fall over time. That is, even if the underlying index does not rise but keeps oscillating, the ultrashort will keep falling. So long term, I can only lose with shorting an ultrashort if the underlying index will have a very strong negative trend that will override its volatility. For now, unfortunately, I don't have any such ultrashorts on my list. Is anyone aware of some ultrashorts where you believe the underlying index should rise in the long-term? I called up Deutsche Bank and asked them whether DZZ resets daily, but they said that it resets monthly, and so gold oscillations will bring it down only over the course of several years.

DavidV

Denninger points out that there is considerable volume in the Lehman July $2.50(!) puts:

http://market-ticker.denninger.net/

It speaks to me that these strikes have been opened in the first place. Someone must have requested them. For June the lowest put strike is $17.50.

David,

ETFs have MERs, hence they will decline overtime, not due to volatility. Can you explain your volatility reference, as well as what exactly you mean by resetting daily vs monthly? How is the rest accomplished? Most of these short only track the underlying on that intra-day basis.

On the TSX HGD will do what you want, in time. Thanks.

A little more good news for the financial sector...

"Accounting changes could force US banks to take thousands of billions of dollars back on to their balance sheets in the coming months in a move that is likely to curb further their lending and could push them into new capital raisings, analysts have warned.

Analysts at Citigroup said a planned tightening of the rules regarding off-balance sheet vehicles would force banks to reconsider arrangements and could result in up to $5,000bn of assets coming back on to the books.

The off-balance sheet vehicles have been used by financial institutions to keep some assets off their balance sheets, thereby avoiding the need to hold regulatory capital against them.

Birgit Specht, head of securitisation analysis at Citigroup, said: "We think it is very likely that these vehicles will come back on balance sheet."

http://tinyurl.com/4z6422

Just thoughts, hard to place a finger on it . . . feel things are a little more intense . . . . like some event can and will set things off . . . not talking about oil sliding and a temporary market upswing . . more like what happens right after that . . the move can be quick.

Note the VIX (20.80) closed above the 50 day EMA (20.42), for the first time since March 20th (was that the Ides of March?). 200 day EMA is close by @ 21.58.

moab Re: LEH puts

Thank you!

Last time I saw puts like that (2.50-5.00) was with BSC @ 30. And the volume really picked up in the next few days.

fireworks

RE: Citi article

I find some serious humor in the fact that Citigroup analysts are informing us on how some unspecified U.S. banks will have to return SIVs to their balance sheets and raise capital to offset. They wouldn't by chance be mentioning one of the largest users (abusers) of SIVs, CitiGroup, would they?

This sounds like the guy who goes to confession and starts with, "Well, this guy I know has a problem......."

and BTW.........how much do these Citi analysts get payed to predict their own demise?

Oppenheimer analyst Meredith Whitney :

"The real harrowing days of the credit crisis are still ahead of us and will prove more widespread in effect than anything yet seen. Just as strained liquidity pushed so many small and mid-sized specialty finance companies to the brink, we believe it will do the same to the US consumer. We believe losses will only accelerate further and far worse than the most draconian estimates."

Here's a recommended reader titled Withering Economy. The author discusses the insolvency and moral bankruptcy of our political and economic system and possible consequences thereof.

Check it out!

http://www.rense.com/general82/ev.htm

SiO2: if the daily return on an ultrashort is computed as -2 x (daily return on the underlying index), as is the case with FXP, TBT, SKF, QID, etc, then when the underying index drops 10% one day and then rises 11.11% the next day to return to the same point, the ultrashort will rise 20% the first day and drop 22.22% the second day and will be down 6.7% from its starting point. A 10% daily swing is extreme, but I am just demonstrating the math. If the underlying index drops from 100 to 90 (falling $2 per day) and then rises from 90 to 100 (rising $2 per day), the ultrashort will end up down 1.33%.

The price of DZZ is computed by dividing the value of gold futures by the value they had at the beginning of the month, multiplying this by -2, and then applying this percentage change to the value of DZZ at the beginning of the month.

DavidV

Seamus -

I was alluding to Bear. Those $5 put strikes were opened on Bear with only 5 days to expiration. No one in their right mind would want to buy that without inside knowledge.

Anyway, with LEH people may actually be betting on the cheap. We will see what the volume is like in these puts. Serious volume will indicate inside knowledge.

HGD, I think, is not a double inverse. It would be nice to find a double inverse on some pure commodities, which I think will rise long term... Alternatively, we can wait until the end of this bear market and then short QID/SKF.

DavidV

LEH July $2.50 puts can be bought at $0.04. The volume today was 1,813 contracts while open interest was 2,183.

That was hardly any buying interest at all! I can buy 2,000 of those contracts for as little as $0.04 x 100 x 2000 = $8,000.

moab

Agree. I recall the same . . . bears close watching.

If not a great deal of volume (red chip bets), it may be just another way for HB&B to write puts all the way up to 30 or wherever they plan on having LEH close at expiration 17 days from now.

Teich,

Save yourself the 8 large....Lehman's NOT going to $2.50 in this lifetime or the next. The BUILDING'S worth more than that!
(now where have we heard that b4?...idunno)

Today the number of very strong stocks collapsed and the number of very weak stocks increased. As a result, the number of very weak stocks is greater than the number of very strong which suggests the market is technically weak at these levels. It suggests that any upside move in the market averages will be capped.

In our previous post we suggested that the market would probably rally with the Mem. Day holiday and then month-end but would then have to prove itself after month-end by continuing to rally. It has not and therefore we believe the downside is once again in play for the major averages (sideways or higher prices over time would repair the market's overall technical weakness).

The slam down in a number of widely owned stocks like LEH, MBI, etc. can weaken the overall market because big declines can cause a spillover or contagion effect in other sectors where even good or strong stocks are sold to pay for losses on weak stocks (margin calls, etc.).

JW
http://www.2globalmarkets.com

what if teich writes 4000 LEH july 2.50 puts- would that safely put 8 grand into his trading account? or might he end up having 400,000 shares put to him at 1m?

FYI, I fixed the Cara 100 list in the RSI tool and also fixed a bug that someone alerted me to. So hopefully things should be running smoothly on the new server now. Thanks for all the feedback and positive comments!

Writing the july 2.50's?
....now that's an idea you can bank on!

Just never leave the house making sure you're there to cover.

As Macke said...make sure you have a big empty Gatorade bottle next to your trade station!

Seamus

"Just thoughts, hard to place a finger on it . . . feel things are a little more intense . ."

You may be on to something. On the Kirk Report blog tonight, he has TA showing a Black Swan formation on the S&P.

http://tinyurl.com/64gf3o

QT- no, i exited the entire position today (DUG)- no worries, though-> i'm always early in/early out...

you would have to leave the house to cover the bet...along with the title and keys, of course...

man, i knew i was missing something not using TA...

David, HGD and most of the Horizons ETFs (HOx, HNx, etc.) are indeed 200%. They work much better than the ProShares 2x ETFs (I have run very large scale analysis on them).

RE: LEH puts

Dont' hold me to this but I agree with Shark. LEH isn't going to 2.5 or 10 for that matter. Do i have facts? no but we can't assume they LEH will experience a fall like bear sterns. Yeah LEH has over 250 billion in credit default swaps and yeah they are totally over leveraged to the nine. What I think is going on is a severe case of the kool aid flu. retail investors have seen in once and now we are looking to predict what is next. IMO bear sterns was taken out by the people who it profoundly serviced, the hedge funds. LEH is a clearing house like BSH however if it were to be taken down like bear, congress, FINRA and the SEC would have to, have to investigate everything that they are up to.

Now don't misunderstand my comment, investigating the crooks wouldn't be bad whatsoever it would be good. I don't see those who are crooked, would want to be investigaged.
Oh by the way - It seems like an oxymoron to have one crooked group investigate another crooked group.

my two cents worth about a penny these days.

Si02- are you saying the Horizon 2x inverse funds do not sock you with the 'daily reset' problem (ie, they actually track the underlying indexes over long(er) periods of time?

With this week being employment data week, you may wish to view employment stocks. Here is a link to charts (no sniggering, please!) for this sector. http://www.box.net/shared/static/6pe4c9d40o.jpg

ALOHA !!

Astral25 ... As predicted there was not one mention of the word "fiat" in that entire article. She came close mentioning the US Peso! Yet if the US Peso is no longer a "reserve currency" then what global fiat currency will replace it? The Euro? The Pound? The Swiss Franc? All are fiat currencies themselves whose values erode over time because the fiat monetary sytem is based on the undisciplined and ego based human condition.

The true cause of the ills we face today is because we have continually elect welfare and warfare over "value"! Nobody will address the fact that we can never have "stability" in banking, in financial markets, in the SEC, in FDIC, in real estate, in jobs, in retirement in any endevour until we first instill a "store of value" to our monetary system! That transcends all other issues, which are nothing but band aids and symptoms of a "valueless currency"!

The other day I spoke for two hours via phone to a high placed counsel for the State of Western Australia and he told me that in the event global fiat currencies collapse and the Australian dollar falls prey along side the US Peso that the government of Western Australia is prepared and has plans in place that include the PERTH MINT and the huge quantity of gold in the ground of that State to switch to a gold backed currency in a moment's notice. The State of Western Australia not only promotes mining and promotes gold but is the only government in the World actually minting gold and silver fungible currency at this time that could be used to replace fiat and secede from the Nation if need be. The mentality of residents of Western Australia is that they along with the States vast mineral and precious metal resources continually operate in a surplus and compared to the Eastern States drives the Australian economy with vast tax revenues which Canberra and the banking state of New South Wales squanders on poorly planned fiscal policies. That if it were not for the commodity wealth of the State of Western Australia the rest of Australia would now be suffering like the USA. Of course, its not all that black and white because Western Australia's wealth is based on the industrialization of China and India and emerging Nations. Without that resources are just rocks on the ground! Yet in a "valueless" World of money, resources and commodities, which represent "real wealth" will be sought out to hedge the never ending risk of holding fiat, which is a claim on a government promise! What is a "government promise"? It is nothing more than human ego! There's a crap load of ego in the USA now, perhaps even you describe it as an "EGO BUBBLE" to go along with the other BUBBLES! All you have to do is attend an Obama rally or a US Congressional hearing or an FOMC meeting to see the EGO BUBBLE in action! They will never tell you "they" ... the US government and the US FED ... the Reps and Dems you elect every year are the "problem". They only offer themselves up as the "solution"! How can the problem be the solution?

kaimu- LOL..in the physical/biological sciences, the 'solution' often IS the problem...in the behavioral/political science(s), the 'solution' is ALWAYS the problem...

When I mentioned that it takes only $8k to buy 2000 LEH July $2.50 puts, which is approx. the same as the current open interest, I simply wanted to point out that there has been effectively no interest in those puts, despite the excitement I see on this board.

ALOHA !!

Is the USA immune from a monetary crisis? In 1975 how many would have thought the second largest Superpower on planet Earth could have crumbled under the weight of a monetary crisis?

some TA for the HFD (Canadian Financials Bear fund)
from a technical perspective is may be poised for a breakout if volume can join the party.

http://jglobal.blogspot.com

2nd, I am preparing a report, I'll send it to you when it's ready. So far, I am quite impressed with most of the Horizon's and I'd stay away from SKF, UYG, SDS, SSO, et al.

Anyone care to comment, help or edubicate me? Is this an example of a pennant or bull flag forming since May 12th on this chart of Phoscan- FOS.V? See google docs:
http://tiny.cc/HpTdY
Thanks in advance

ok, the above link does not work, so I do not know how to capture an image and set it up to share, I will try again
Apologies

I just thought it strange that they would even open a strike so low, but maybe the market makers want to capitalize on retail investors.

Would Lehman be worth anything to stockholders in a bankruptcy? A company that is levered 33 times? I don't think there would be anything left. Their assets are worth much less than they are kept on the books for.

RE Horizons BetaPro ETFs...all are double long or double short, trade on the TSX and reset daily. Now there are 18 etfs (9 Up and 9 Down) tracking comex gold, nymex oil, natgas, agriculturals plus TSX indexes...60, financials, gold stocks, mining, etc. Ten more ETFs coming in june/july (S&P, Naz100, MSCI Emerging mkts, CAD/USD.) They are great if you bet right...and discouraging if you don't. By the way, these ETFs account for 1/2 of ETF volume on TSX.
And Detroit just won the Stanley Cup!!!

PhotoGray, re chart posting, try this info I put together a while ago.

Google document

http://tinyurl.com/29fv5t

Quasi

Ok, please view this chart...

http://tiny.cc/VmqDs

Is there a bull flag forming?

Thanks Quasi, I site searched and worked it out thanks to your earlier posts on the subject.

Ask yourself - If LEH folded, then would all hell break loose, or will the FED step in beforehand? Yes, the FED has stepped in it. I bet the FED regrets not rescuing Bear Stearns before the bankruptcy, don't you? Was Stearn's failure an example of lack of foresight, or an orchestrated move in a grand scheme of some sort? I suspect the FED was caught with their pants down around their ankles and simply screwed up! How much credit do these fools deserve, anyway? They certainly aren't earning my respect!

Look beyond whether the FED will allow these institutions to actually fold, there's a big difference - now they're deep into the FED's pockets. Ask instead, how much they're worth, and what they would/should be doing to try saving their own skins. Adjust your strategy accordingly.

As someone recently said: "Comparing the USD to the PESO is insulting the PESO."

How could worthless assets actually be considered a debt? What debt, I don't see no debt!

The FED HAS stepped in... That's why LEH is failing. Remember the actions of the FED are what caused the credit bubble that has burst, and that caused the failure of Bear Stearns.

The fact that the FED is there to mop up the mess, is like the arsonist being in the crowd watching the fire. They are a bunch of liars.
Bush's cronies are McCain's worst enemies.

Yep! I can't understand how they can show their faces in public. Greenspan's halo looks a bit tattered, maybe he's the fallen angel.

Aurator - I don't see GLW on the Cara100. Looks decent to me, is there something wrong with Corning?

Gotta admit though, nobody held a gun to LEH, forcing them to purchase the junk.

ChickenP: GLW looks like it's rolling over. Take my lead, make a typo and buy GLD. GLW depends on sale of big flat screen TVs. As the consumer folds, less revenue. Just about everyone who wanted to extract their home equity and pee it away on consumer electronics has done so. Not that I'm any expert on Corning.

From the Roubini blog:

Reuters June 4: Moody's will likely cut the top ratings of the bond insurance arms of MBIA and Ambac on concerns about mortgage-related losses and limited new business prospects.

May 30 Evans: Using the CDS market, Moody's implied-ratings group rates both MBIA and Ambac Caa1. That's 7 notches below junk and 15 below the official Moody's rating--> group reports that over one year, the implied CDS ratings have been a more accurate predictor of defaults than Moody's official ratings.

May 23: FASB Statement 163: bond insurance industry will have to disclose troubled securities and speed the pace of reserving against deteriorating credits before default.

(Downgrade expected to precipitate at least another $90B bank write downs. Inning 3 of a double header.)

..." Market Disconnect

Ambac reported a $1.66 billion net loss in the first quarter after $3.1 billion in charges related to subprime-mortgage securities it insured. MBIA lost $2.4 billion as the value of derivatives it sells to guarantee debt tumbled $3.58 billion.

MBIA, which dropped $1.06, or 15.8 percent yesterday in New York to a 20-year low, climbed 10 cents at 10 a.m. in Frankfurt. Ambac, which fell 17 percent to a record low yesterday, was 12 cents higher at $2.61 in Frankfurt trading.

``The disconnect between the market's perception and the rating agencies' assigned ratings has finally become an elephant in the room too big to ignore,'' Kathleen Shanley, an analyst at Chicago-based bond research firm Gimme Credit, wrote in a report yesterday.

The prospect of downgrades earlier this year roiled markets because of concern that guarantees for more than $1 trillion of debt may be worthless." ...

http://tinyurl.com/6yjna9