http://www.dailynews.com/breakingnews/ci_9887404

Cops to IndyMac customers: Remain calm or face arrest

I was watching CNBC early today (a rare thing, to be sure) and the McCain and Obama economic representatives were on Squawk discussing their candidates positions on energy.

It's amazing to watch these guys, particular the McCain rep, speak as if the only solution to the energy crisis facing the world is to drill drill drill. To burn more coal and natural gas. To build more nuclear plants (without equal consideration for the substantial cost in terms of safety and waste).

Alternative energy? An afterthought for McCain at best.

I look forward to the day when "alternative" is no longer used in reference to energy produced by wind, solar and water technologies. They will eventually predominate. No matter how much vested interests and their hidebound political captives may otherwise do or say.

Housing starts at a 17-year low:

http://tinyurl.com/5cv5r2

Actually this is positive news for the housing market as less excess inventory is now being produced.

Debt-laden home builders, however, are still doomed.

Happy days are here again. How long's it gonna last? My bet is a half hour.

http://www.youtube.com/watch?v=SESr9D5Gd7A

solarfun looks like fun the way eslr was fun the past 2 days.

number2son,

You're right, characterizing "alternative" energy becomes increasingly ironic as humans face the reality that really there are no viable long term alternatives to wind, solar and geothermal power sources.

Frankly, I'm not sure Nuclear is as bad as it's made out to be. The technology has changed significantly. I don't follow it closely, but I find it interesting that France has been so successful at it, and I can't remember the last time I read about an incident there.

Cara 100 Update (previous entries on yesterday's commentary):

SNDK - Target Price Lowered from $40 to $29 @ AmTech Research

"Frankly, I'm not sure Nuclear is as bad as it's made out to be."

I didn't say it was bad per se. But safety and waste are BIG issues.

Would you trust the current crop of politicians to regulate the safe operation of nuclear plants and the disposal of their highly toxic waste?

Not me. And especially not when there are "alternatives" that don't come loaded with that much social cost.

I'm finding this rally too sudden and overstretched. For example, shouldn't JPMorgan's better than expected losses already be priced into the massive move we saw yesterday? Also Coke and eBay, two giants, haven't had great reports. The jubilation seems odd, but I guess people are expecting great reports from MSFT, IBM, and GOOG this afternoon.

As for me, going long amidst so much frenzied buying always feels precarious. Before the bell's even rung, UYG is up 12%, and the index futures are pointing sharply higher!!! How to jump onto this bandwagon and not get crushed?

Nuclear has come a long way. James Dines is betting on it (long term).

Re: Reactor Leak - France

http://news.bbc.co.uk/2/hi/europe/7502208.stm

People betting on uranium for the longterm may be discouraged to hear that nuclear fission is very old technology. Its difficult to determine the next step of nuclear technology for now, but within ten years, the outlook is that the technology will change.

2nd
Did not sold any yesterday
Will sell half of my holding today
Also got 12 oex Aug 605 calls yesterday, will sell them and will buy sept put on oex at end of the day

SKF getting pounded...

This enthusiasm will be cut short tonight when MER and COF report. According to Meredith Whitney, MER is in worse shape than LEH. And we all know how COF is the subprime of credit cards.

I'm thinking this manufactured rally was to get the banks off their extreme lows so many of them won't go to zero when MER reports tonight.

I plan on buying puts on MER and COF and the DIA later today.

I may even add some puts on DUG as I see people switching back to commodities for a little while longer.

Rob.

Cara 100 Update:

CCL - Target Price Lowered from $53 to $46 @ UBS

Rob- what happens if it goes the other way? It's easy to go short when sentiment is negative...will take time for sentiment to turn positive...

Anyone else notice the absolutely massive swing on FNM and FRE?

The trading range of FNM today has been 10.45 to 13.99, and FRE has been 7.70 to 9.69!!!

Day traders must be making a killing off of these, because there's no other rational explanation for such wild swings in 30 minutes!

Rob- I almost think the more likely scenario is they take financials down into the close to shake out the newly-minted long positions...then run it up after hours on better than expected earnings from MER/COF...what do you think?

As the flight away from safety went full throttle this morning, I decided to re-open positions in 2 precious metals ETFs, U.TO (Uranium) @ 9.13 and PTM (Platinum) @ 23.77.

Alternative is purposely used to infer that it isn't viable or as good as centralized meterable power. Even Boone Pickens (bless his greedy lil' heart) is for centralized power which then gets metered and sold to you. That's why there is such a big push for nuclear, as wind can be had for less per kwh (.047) than your typical nuke if you include all of the costs like waste management, storage and decommission after it's useful life is exhausted.

Won't it just piss them off if America gets truly energy independent and gets off the gas and the grid?

FRE- that's right...finally had the chance to unload the (very small) position i opened at 8.10 a few days ago at 9 and change...

RE: NOOK-U-LAR.

There is recent technology called pebble bed reactors where the material is encased in these ceramic balls...imagine like billiards balls with a gooey center of fissible material. The upsides of this tech are that it is self-limiting with respect to heat. In other words, it is melt-down proof because as it exceeds a certain temp, the reaction itself is slowed down. It is also about 3-5x times more efficient in it's use of uranium than std reactors, and the waste handling is a little easier. And due to the efficiency gains in uranium usage, there is less waste to handle in the first place. Nuclear will certainly be an important source going forward.

With LEH earnings so bad though, I just don't see how MER can report anything to keep rallying on. And COF's charge-off rate for auto and credit card loans has been steadily rising for the past two quarters.

We all knew JPM would be having "good" earnings as will GS.

I guess the only question is whether the MER earnings will have the same spin as the WFC earnings that started this rally. If you read the WFC report I don't see anything in there to brag about. Their situation is very precarious and I don't see how they expect to fund the dividend increase.

Also, since MER is one of the newly protected stocks under the new short-selling rule that perception could continue the rally

It easily could go either way tonight. That's why I'll buy the Jan 09's to give me more time in case this rally lasts for a few weeks.

Rob.

Re: Nookular

Actually, fission reactors are probably the most inefficient way of going about producing elecrical energy. Just ask "Seven Of Nine."

:0

I always go back to watching Dr. Eric Lerner's tech video of focus fusion reactions, which is based on astrophysics and doesn't use uranium at all.

The discussion in the video includes all of the numbers on cost of development of alternative energies. Nuclear fission is very costly and doesn't compete with solar or wind, so it isn't discussed.

Very much worth the hour of watching. I had to watch it several times to understand it, and then head over to YouTube to understand a little more of the astrophysics involved:

http://video.google.com/videoplay?docid=-1518007279479871760

I puts the test to the perception that developing nations are moving to New Jersey. Keep in mind that so called alternatives are getting market attention because of the high oil price. But once the derivatives market collapses in oil, the price will deflate, much of the alternatives sought because of the high oil price will deflate as well. (including nukular)

I never went nuclear fishin' but I do live near 3 Mile island and never want to go thru that again.

It's hard making money on the long side. Market doesn't want to go up, doesn't want to hold gains. (cue the bear)

"Also, since MER is one of the newly protected stocks under the new short-selling rule that perception could continue the rally"

I haven't kept up with this new short-selling rule. How will it affect ETF's like SKF?

Otto on Juniors - know your source!

The 2nd story on http://incakolanews.blogspot.com/
today relates Otto's credentials and orientation towards juniors which operate in South America.

If you read him (as I do) it's a good idea to read this story, so you'll know who he is and where he's coming from.

Just part of doing your own DD !

re: SU

Surely, Bill is onto something with SU.

As T. Boone Pickens unveils his energy plan, guess what stock is one of his largest holdings?

T. Boone's Portfolio:

http://tinyurl.com/2tgxnc

Novagold - up 9.25%

Only news is that they rescheduled their quarterly conference call to july 24th.

Could this mean good news coming re Donlin or Galore Creek?

If so, might that give a bump to "neighbors" Seabridge and Northern Dynasty?

Hope springs eternal !

GS Gazing - GS left a bit of a gap in its wake this am - will it fill sooner or later?

2nd,

your theory is playing out perfectly right now. It would be really crazy if they do go negative and then rally hard on COF and MER earnings.

Maybe that's the most painful path now.

Rob.

Is T. Boone Pickins a great American or WHAT? Spending all that money on network TV ads to tell his energy story and save America! It's sheer patriotism, friends ....

2nd,

Looks like earlier this morning would have been a good time to off some UYG.

Dumb me......I was holding off for $23. That's why I'm a founding member of DENSA.

Regards

BH - Does that mean you're considering more SKF? Insane!

Well, my brokers site is down....

Ditto Fingerlakes!

Just re-upped the puts!

What happened to XIU? TSX fell off a cliff...

number2son - RE: housing starts.

What's killing the home prices is existing inventory and *new* inventory coming from forclosures. I wonder what impact the new housing bill in congress will have on inventory levels. Would be something to watch. Housing needs the basics to return: liquidity (fairly based on a persons ability to pay), lower forclosures and inventories and *real* buyers. (though I realize there is a strong correlation between each of these).

BH - I read somewhere that HAL is one of the only companies with horizontal oil drilling capabilities necessary for the Bakker field.

Chicken,

No SKF at these prices. I bought all of mine between $72 and $110. I'm no fraction scalper, rather a big game hunter......also dumb as a plant. :^)

Regards

Jock - NG has had heavy accumulation all week and what looks like just a quick spike today. I wonder if it has anything to do with Barrick's recent takeover bid for Cadence Energy with an oil resource in Alberta? Barrick and Novagold announced a new prefferred design for Donlin Creek last month that makes use of diesel and wind for power co-generation as opposed to building a power line. Disclosure long NG

Big game don't sound dumb to me. Or retarded, either.

gdiman - The Alberta oil resource may be Bakken field?

Boone Pickens: I like him. Sure his plan is somewhat self serving for his company CLNE, but at least he is taking a leadership role in stating the obvious to all except the paid off deadheads in Washington.

His idea of a wind farm through the heartland is fantastic. In Hawaii, David Murdock CEO of Castle and Cook, wants to build a 400 megawatt wind farm on Lanai. The government here barely gives him the time of day.

These people are great Americans who want to get us off the Saudi (Middle East) oil teat. We need leadership like Kennedy provide for getting a man on the moon and we need it now!

"The Alberta oil resource may be Bakken field?"

I think most of Cadence Energy's reserves are near the Sturgeon Lake area in western Alberta.

TBT Looks like it may be too late to join that party, anyone buying here?

Short cof @ 42. Will hold into earnings. I may get burned on this one.

Top gold analyst Adrian Douglas is now predicting a huge move up for gold...

"In November 2005 I predicted the mega-move in gold up to $720/oz by noticing a very large build-up of call options in the HUI component shares.

In August 2007 I identified a massive Gold call option build-up in the COMEX DEC 2007 contract and predicted a big gold move. Gold was trading at $660/oz at the time and ran up to over $1000/oz by March of this year.

I am going to attempt the Grand Slam and make it three correct market calls in a row and predict another massive run up in the gold price. As I will show in this article the COMEX Gold Call Options Open Interest is again signaling a huge move up."

http://tinyurl.com/67u7p7

I thought this was interesting chart from
Jesse's Café Américain web page.

http://tinyurl.com/6dqeup

Bill, I'm glad you are coming around on Mr. Cox. They're all the same, bought and paid for, not working for the people.

I also like the accumulation strategy in today's report, reminds me of some of your early archives.

Chickenpookie--
Whad'ya mean to late to catch the party in TBT? You should have a good ten years.

ALOHA !!

More momentum to either reform or eliminate the US FED. I personally don't see how you can reform fraud? So long as we issue FEDERAL RESERVE NOTES as money the only was to reform the US FED is to eliminate it!

Has anyone here ever read actual FED meeting minutes?

READ ON:
Thursday, July 17, 2008

Foolish Consistency

From the statement of the FOMC on June 25, when it kept the fed funds rate at 2%:

"The Committee expects inflation to moderate later this year and next year."

From Ben Bernanke's prepared testimony this week, just thirteen business days later:

"Inflation seems likely to move temporarily higher in the near term."

Look, this insanity has to stop. Was he asked about this on Tuesday or Wednesday? I didn't catch the full sessions, but I'd bet my last American peso that he wasn't. It's clearer every day that the Fed is in serious need of oversight and reform. Have you ever read the minutes of an FOMC meeting? There's more accountability on one of those muffled surveillance tapes from the Ravenite Social Club. There are no names or faces at Fed meetings. Except for indicating at the end how each member voted, the minutes are a stream of "some participants felt" and "others were concerned." If the Fed won't keep minutes that conform to basic corporate or even small-town standards, Congress or the GAO must sit in on all meetings and issue a separate report. Give an independent monitor an office next to Bernanke's, with full access to anything that happens in that building.

While we're on the subject of Fed reform, how about restricting the ability of Fed chairmen to collect huge paychecks from Wall Street when they leave? It's amazing this hasn't been done already. Do you know how much money Alan Greenspan has made from the same firms that flourished during his monetary munificence? In a world of accountability he might be keeping a low profile right now, or even having some quiet preliminary chats with a Stan Brand type in case things in this country really go south. Instead he's depositing fat checks. Bernanke will do the same one day, unless Congress takes away his future "bailout bonus" right now.

posted by The Cunning Realist

Volume has disappeared.

And there's the rub, moab. The bulls have no conviction.

MMMMmmh???? CLF announces a buyout yesterday of ANR. ANR is trading about $26 below the total offer. Anybody know why?

I think this blog site has become a bit too close to the vest concerning investment ideas.

I used to think it was all about "anything and everything for the carry trades." With recent developments last week, and my understanding that inflation is real in Japan with no change in interest rates, I believe that has now become: "anything and everything for the derivatives trades."

Quite a curious development, since the derivatives trade depends very deeply on available credit, and should the carry trades falter due to real inflation requiring real interest rates hikes, especially in Japan, then you have the makings of a profound shift in market economics.

It seems that the banking hooplah has everyone anxious about their derivatives, when they have forgotten and become quite complacent about the carry trades.

nemo - ANR - The lack of performance is in sympathy with entire coal sector, no?

Strange. The deal seems a given. That's leaving almost 30% on the table. I must be missing something.

CP, I think that TBT is a good LT position, and a good position to do short term trading. It is likely to rise if there is persistent inflation, as bonds sell off. Short term, I lost my pants buying in May due to the fact that TBT seems to drop whenever there is a flight to safety and to rally when there is convincing inflation news or equity rallys. I'm going to try to sit out this current bear rally, possibly sell TBT if the market turns down, sort of like I used FXP. TBT is a lot more stable than FXP obviously, so it's harder to do something really costly. But long term, if you believe we have stagflation or even just substantially higher inflation, it would seem to be a reasonable position.

FranSix,

Thanks for posting the video link to the presentation regarding Dense Plasma Focus fusion energy generation.

Cheap, clean locally accessible energy plants . . . if I had a couple million spare dollars I'd want to put them into a venture such as this!

ANR - Perhaps no wind in the sails due to stagnating environment. Maybe hedgefunds are migrating out of sector and the sale looks questionable?

ALOHA !!

A list of the DIRECTORS over at the DTCC, where all these naked shorts are accumulated ... While COX talks of the SEC getting tough on the naked shorts hurting those poor bank stocks!

This list looks like the same old "usual suspects" that proliferate the criminal banking empire that gave us toxic derivatives and the subprime mess.

This is actually a list of criminals worthy of prosecution, if we had a "real" SEC ...

THE BOARD OF THE DTCC:

* Donald F. Donahue
Chairman & Chief Executive Officer, DTCC
Read Full Bio
* William B. Aimetti
President and Chief Operating Officer, DTCC
Read Full Bio
* Mark Alexander
Managing Director - Global Markets, Merrill Lynch
* Gerald A. Beeson
Senior Managing Director and Chief Financial Officer, Citadel Investment Group, LLC
* J. Charles Cardona
Vice Chairman, The Dreyfus Corporation
* Stephen P. Casper
Chairman and Chief Executive Officer, Fischer Francis Trees & Watts, Inc.
* Art Certosimo
Executive Vice President, Bank of New York
* Randolph L. Cowen
Chief Information Officer, Goldman Sachs
* Norman Eaker
Principal, Edward Jones
* Robert Kaplan
Executive Vice President, State Street Global Services
* Gerard LaRocca
Managing Director, Chief Administrative Officer of the Americas, Barclays Capital
* Ian Lowitt
Co-Chief Administrative Officer, Lehman Brothers Holdings Inc.
* Norman Malo
President and Chief Executive Officer, National Financial Services LLC, Fidelity Investments
* Louis G. Pastina
Executive Vice President of NYSE Operations, NYSE Euronext
* Ronald A. Purpora
President, ICAP Securities USA LLC
* Neeraj Sahai
Senior Managing Director, Citi Markets & Banking
* Timothy J. Theriault
President of Corporate and Institutional Services, Northern Trust Corporation
* Michele Trogni
Global Head of Operations, UBS AG
* David A. Weisbrod
Senior Vice President, JPMorgan Chase & Company

BH- you may get another shot-> if i were short i'd be off the tracks right now...

BH- how do i get into DENSA? do i need a referral?

allen - Thanks for your thoughts. I'm going to shy away from TBT for now because I have a feeling a new breeze is blowing in the energy sector that will provide a tremendous lift for the USD. A Funny-feeling hunch.

Oil being pounded. Here comes the rally, again.

Anyone holding QID? I failed to sell yesterday! I still feel the sh*t could hit the fan. maybe not this week though. About investment ideas, I have said before I am schizophrenic in my investing. I am long WM, XLF,QID and DUG, NOT, ARG,AUY,BA,ETFC,ZNN,PBW. Kinda hard to present a concise picture of this.
Anyone have thoughts on XLF?
peace

Sorry, 2nd. You need an IQ lower than Dubya's to become a member.

Photogray,

I'm holding a boatload of QID. This just has to payoff in the long run. You can't eat computer chips or fill up your tank with I-Phones.

Regards

I am looking at YUM as a possible beneficiary of the Beijing Olympics (or just the hype). 08/08/08 is fast approaching.

ALOHA !!

Lots of talk about NAKED SHORTS now days, mainly equities, but what about bonds? Naked Bond shorts ...

From Rob Kirby
READ ON:
Up Next Folks: Naked Bond Shorts

Folks need to understand that naked equity shorts have always involved the trade of shares that do not exist – all under the watchful eye of regulators.

At GATA’s Washington conference back in April, I presented a paper titled, The Elephant In the Room, which illustrates how U.S. Treasury Bonds that CANNOT EXIST are regularly traded in massive volumes by none other than J.P. Morgan and friends.

Has a familiar ring to it, ehhh?

For those of you not paying attention – the trade of financial instruments that officially ‘do not exist’ amounts to unreported MONEY PRINTING.

It would now appear that monetary aggregate data supplied to us by the Federal Reserve might be more suspect than the Bureau of Labor Statistics’ inflation data.

The rocket ride in COF is hard to understand. 50% gain in two days.

eslr ready to rise? I'm betting it is.

Moab

I was just looking at that – COF – must be earnings leak or incredible short covering?

Naked put writing:
It appears to be a nice strategy. However, I am not able to write naked puts at Schwab or Scottrade.
I have 2 questions:
1. When you write naked puts are you able to do it on the internet or do you have to call your broker?
2. Which brokers provide this service?
Thanks.

I would bet my grandmother the earnings will not be good for COF so I figure it is shortcovering. It did collapse from 53 to 30 without a rally.

I am very tempted to short it at the close but will restrain myself. 47 should be resistance as that is the breakdown point.

Thanks Bill for your comments about the Russian market and Rosneft. The perception of Russia country risk has always been overblown by the Western media, which of course has a longstanding political axe to grind, while smart-money investors who ignore the relentless negative coverage have been making money hand over fist in that market for years. Of course YUKOS was the exception to the rule, but had investors done proper due diligence with that company, they would have opened a closet chock full of skeletons....

When people worry about groups in the current government setting their sights on natural resource sectors, they forget that companies like Rosneft and Gazprom are already state-owned and have tremendous administrative and political resources at their disposal with regard to acquiring foreign and domestic development projects. Rosneft has strong management, in particular the CFO Peter O'Brien who is American! I have know him since we studied together in high school, and can assure you that they have a credible strategic vision to become a global major to be reckoned with in the coming years. The stock was up 4.4% today.
Meanwhile, state-owned banks Sberbank and VTB - which have zero exposure to toxic securities but have nonetheless suffered greatly due to poor global sentiment - were up more than 6% each. Russia continues to trade at steep discounts to emerging markets on a 2008E EV/EBITDA basis, and the oil & gas majors are simply raking in the profits at this point. Momentum is building for a re-rating fueled by more than $3 bln in portfolio inflows - much of which is still sitting on fund managers' accounts - and now is a prime entry point.

For US-based exposure to the most liquid blue chips, you should check out the Market Vectors Russia ETF which trades on NYSE under the ticker RSX. In addition to your Cara 100 component VimpelCom, I would suggest increasing exposure to Level 3 ADRs for MTS, Mechel and Wimm-Bill-Dann. You can also buy a wider range of local shares through New York offices of a range of Russian and global banks.

Alright,

What are we rallying on - sh*tty earnings reports (http://tinyurl.com/5bkdyx)and federal investigations? Is this just more short covering? Sure JP and Wells Fargo are reporting higher than analysts estimates for earnings but what about Meredith Whitney's recent report on C? This banking crisis is far from over.

Is oil down due to countries getting rid of some excess supply? I remember recently someone speaking of countries hoarding crude in offshore tankers. Is this sovereign profit taking?

Market is rallying because it is oversold. This is clearly short covering in the banks at least and options expiration facilitates a squeeze so all those puts expire worthless.

Oil is coming down as the powers that be try to avoid an economic collapse.

47 is my target for cof resistance also. If she runs all the way up I'm loading the boat.

Re: Naked Shorting Crackdown

They just don't want any naked shorting of fundementally flawed credit derivatives so that credit derivative swaps can keep growing.

COF rises from the dust? Whodathunkit? Well, another possible reason can be seen by looking at the options

http://finance.yahoo.com/q/op?s=COF

Note how many put options dropped "out of the money" with this sudden rise against how many went "in the money". That's called "Max Pain" and saves a lot of money for the market makers.

but jmho.

Starting a very small position in FXP @ $76.30

I hope it continues to go down to around $60, then I will load the boat up!

Looks like COF will close above 45 tomorrow then, based on all those puts.

lessmore - You must be apply for and be granted approval for naked (cash secured) puts by your broker; approval (or not) will be based on your years of trading experience with respect to different classes of securities; probably requires a margin account as well.

Thanks moab,

So this is probably a short term spike with more downside expected in a week or two? If there is another run on gold with money shifting out of commodities we could likely see a general uptrend in most sectors other than banking?

re: Nuclear power

In the tradition of looking North for future energy needs...

I think the Canadian CANDU type of reactors have a lot of potential. Capital cost to build is higher, but the design tends to stay fixed to reduce engineering costs per project. I especially like that they can operate on unenriched uranium, and last time I checked there was talk and some experimenting with running a reactor on the waste of less efficient plants or decommissioned weapons.

I'm not sure about investment opportunities - I'm still a newbie here. I'll try to do some research over the weekend and see if I can contribute something. Has anyone else looked at this segment?

Greg

lessmore - With IB, can do over internet; no need to call (in fact, for all intents and purposes, no broker to call).

Bought some SSO and QLD earlier in the day, at slightly higher prices than the intraday lows! I'm betting that the GOOG + MSFT + IBM reports end up being mediocre and at or above "analyst expectations", extending the rally a bit further. I missed the GIGANTIC UYG movement, although I sold a couple of puts 2 days ago at the low points. Still, the money I'm making is minuscule in comparison to the money I should be making.

I'm finding that the financials look like they're going from over-sold to over-bought in a matter of days, many of these stocks are up 40% or more vs. their price 2 days ago!!!

Old Goat:
Thanks

airlines- NWA/UAUA/LUV off the table here...

Anyone see which broker can't get it up, so to speak?

I don't know how long this rally lasts but it is clearly a bear market rally. It will clean out the weak shorts and allow more downside.

moab - re Looks like COF will close above 45 tomorrow then, based on all those puts.

Maybe, but not necessarily so. Look at the number of Calls at the 40 strike - looks kind of large to me. Sometimes, market makers will hedge and/or make a profit on the MP move. If so in this case, then the price on COF might not move above 45.

Nice to know, but be awre that this is ALL supposedly "tin hat" stuff. We don't permit any kind of manipulation in free markets, donchaknow?
8).

Arch coal collapsing...thank you lord of the market!

2nd
Had a wonderful trip on UAUA..... had some turbulence there for while @ 2.xx... but the flight turned out well [green]. Thanks for the tip on the airlines.

Now work your magic on TSO.... Still seeing red on my end. ;-)

BH- have you taken a little UYG off? You have a 17% gain on the position, not bad for a few days' work, right? Think about it...

QT- glad flight 485 worked its way of a harrowing dive...looks like you landed with no damage- i took a few dents, but nothing serious...

Just for fun. Look at DIA options. The low a couple of days ago was ~108.32 and we are now above 114. Now add up the open interest in all the puts that have gone out-of-the-money in two days vs the number of open interest calls that went in the money. Not a statistically exact method, but the tale is told.

http://finance.yahoo.com/q/op?s=DIA

Of course, maybe earnings, or inflation news took the DIA up. BTW, Investopedia needs help with its definition of Max Pain (tm). According to my memory of articles written on the topic, "Max Pain" refers to a process that occurs during OpEx week in which options buyers wind up with max pain while market makers wind up with max profit when options expire worthless. Again, "tin hat" stuff, but be aware of the process when you trade during OpEx week and then see "sudden moves".

I've read that tomorrow is options expiration day...does this include crude oil as well as equities? Could this be the reason for the big fall in oil...and then we might see more buying when the roll-over is completed?

Crude expiration is apparently today.

Opened short term positions in ZOLT and LUV...will close before end of day tomorrow.

LUV because with oil dropping airlines will go up and southwest is a decent airline.

ZOLT because I had been watching RSI..it didn't quite drop enough to get daily monthly weekly under 30 but was close. It will trend up with the market.

Also, small positions just to hopefully grab a few wooden nickles from the rally.

TICK is deteriorating here. Selloff into the close?

re:Crude expiration is apparently today
will this affect TSO or DUG?

BH- took half of my UYG off at 20 and change...it's made a pretty good twday run, betting on a ? re-entry lower..

Anybody have the borrow rates on Freddie and Fannie? Hear they are skyrocketing - but the industry claims there is plenty of liquidity in the market so a pre-borrow is not necessary.

Finishes "in the green" with Evergreen

2nd,

I have a limit order in to sell....hasn't been hit.

Regards

So how about those folks here who were in cash a few days ago. Are they still in cash?

I'm still long and recovering.

500 points in two days? i'll take it!

I just bought some COF Jan puts and some DIA Jan puts. I was going to buy MER but got scared off with the new short sell rules on MER.

Cheers to people not paying their credit cards.

I wanted to short DUG too but didn't get to it. Maybe tomorrow.

Rob.

GOOG drops the ball.

I'm showing GOOG down 46 bucks afterhours but I don't see the earnings story yet. Those DIA puts may hook me up if GOOG sinks the rally

Rob.

[Bill Cara note: typical move to turn everybody's crank. I expect the results will be better than an immediate -9% sell-off suggests.]

Rob,

GOOG - earnings $4.63 expected $4.74

Other earnings of possible interest:

COF - 1.24 vs. 1.31 expected
ESLR - -.08 vs. -.10 expected
IBM - 1.98 vs 1.82 expected
MSFT - .46 vs. .47 expected

Hmm... so much for my GOOG + MSFT + IBM Plan... MSFT was close enough and IBM at least beat the estimates, but GOOG really dented my QLDs...

Gotta go read all the literature and see what their future projections are.

NYSE $TICK explained:

http://tinyurl.com/594yhe

The TRIN Index explained:

http://tinyurl.com/TRINIndex

BH- what about cashing half of the QID after-hours on the GOOG news, before anyone has a chance to react? bid 45.50/ask 45.57...

MER reports -4.95 vs. -1.91 expected

Direct link for NYSE TICK:

http://creating-wealth.blogspot.com/

2nd,

Holding onto my QID until the Big One. :^)

Regards

Sold SU aug 50 puts at the close. Getting paid to wait. Started Bill's book today, much more content then I expected. I'm gonna take it on vacation and read it on the beach.

August NYMEX ntural gas contract is down from a high of 13.57 on July 3rd to a close of 10.537 today, a decrease of over 22.5% in 9 trading days. Might be worth keeping an eye on UNG or gas producers like CHK over the next few weeks for a possible hurricane run......

ESLR back on the watchlist for a buy...vinod- AH or tomorrow?

Nice little bumpy-bump in PMI Gold (PMV.V) today, although low volume. Still nice to see a rise in a "trading by appointment" stock.

QT/vinod/BH/shark/craig- (i'll see what i can do about TSO)...

liquidated 50% of my longs today at the close-> why? 16% gain to the overall portfolio in two days...common sense tells me it's not going to happen again anytime soon...

back to 70% cash..

looked at candu a while back and bought more ccj and trp - the partners in bruce power. trp hasn't done much, but recall it has a decent dividend.
long time reader/1st time post - buy & hold type of person

Good job 2nd. Will be there eating the plankton from beneath the whale's water-wings.

Did good on some Evergreen today and will continue to like it from the long side, particularly after a good cathartic drop to 9 for no reason.

Uptick rule is important.
Also Big G needs to investigate the rumor mongers/shorties/illegal activites. Round them up and show them on screen, then lock them up for good.

shark- ESLR guides lower for Q3, and warns of margin hit-> http://tinyurl.com/5nbuev

would there ever be any interest in having a Carista small (10-20), list of small or mid cap companies to invest in? There may be more room for price discovery since some of these companies don't have as much analyst following. Thoughts?

2nd

Now 100 cash
Because of oex call over gain good
Will wait for ESLR reason is we may go down 200 point and in down market usually good and bad all goes down. So, we may have better entry in ESLR
Also loaded oex put for tomorrow

Talk here is-- market is up because naked short rule going in effect on Monday so it is short
HB&B sold lots of puts on most of stock and they do not want to pay
Oil is down and this is the only good reason for market to go up
Nothing else has change. Tomorrow will be interesting
And we go back to same routing on money--going down

Now 100 cash
Because of oex call over all gain is very good
Will wait for ESLR reason is we may go down 200 point tomorrow and in down market usually good and bad all goes down. So, we may have better entry in ESLR
also loaded oex put for tomorrow
Talk here is-- market is up because naked short rule going in effect on Monday so it is short covering
HB&B sold lots of puts on most of stock and they do not want to pay
Oil is down and this is the only good reason for market to go up
Nothing else has change. Tomorrow will be interesting
and we go back to same routing on Monday--going down

As a charter member of DENSA, I was scratching my head at the action regarding ANR and CLF today after the recently announce acquistion. Well...here's why:

I was completely flabbergasted to see Alpha Natural Resources (ANR) trading BELOW the stock price of Cleveland Cliffs (CLF) today. And yesterday after the initial spike in ANR which represented the underlying spread (or most of it) in the agreement, the stock began tailing off. Which was a head scratcher. For those not in the know.

My guess is by that time yesterday AM.... Harbinger Capital - a hedge fund which owns 18%+ of Cleveland Cliffs - informed the co. they were going to be fighting it. Just my speculation but as always, the big boys find things out before us and can act on it. Then all their hedge fund buddies could short ANR yesterday and today in glee and make some dinero, while we scratch our heads and why the heck the stocks were not acting correctly in relation to each other.

Harbinger, apparently an Irish based hedge fund, turned from a passive to active investor...

* In a 13D filing on Cleveland-Cliffs Inc. (NYSE: CLF), 18.4% holder Harbinger Capital changed their filing status from 13G 'passive' to 13D 'active', saying the proposed acquisition of Alpha Natural Resources Inc. (NYSE: ANR) by Cleveland-Cliffs is not in the best interest of shareholders.
* Harbinger said it may take a position with respect to potential changes in the operations, management, Board composition, ownership, capital structure, strategy and future plans of the company.

According to this SEC document, if this merger does not happen and it is due to Cleveland Cliffs, Alpha Natural Resources will get a $350M break up fee.

* If Alpha terminates the Merger Agreement because Cleveland-Cliffs's Board of Directors withdraws its recommendation of the deal, or if the Merger Agreement is terminated in certain circumstances and Cleveland-Cliffs enters into or consummates another transaction within one year of such termination, then Cleveland-Cliffs will owe Alpha a $350 million termination fee.

Or maybe only $100M? (lawyers know best)

* If Cleveland-Cliffs's shareholders do not approve the Merger, the Company will owe Alpha a $100 million termination fee.

On the positive side I would not mind if this merger did not go through because I believe ANR will be far higher independently in a year. So I disagree with Harbinger that this is a bad deal but I own a "few" less shares than they do (ahem).

On the negative side this will bog down both stocks most likely until this is resolved. Which could be a while. If this is going to be a long drawn out affair we have to reconsider our large weightings since making zilch while this is fought over is a waste of time and money. We'll see what the next few days bring as obviously the board of both companies agreed to it; this is a (now) activist outsider throwing their weight around. But they have a ton of weight at almost 20% of shares.

On the positive side we got some high drama coming to the CLF Corral. I'd rather make money than deal with drama but this is the situation as it stands.

vinod- maybe you're right...while i would not call 500 points on the DJIA in two days 'the mother of all rallies,' have to admit it was a mother of a move in FINANCIALS, right?

will consider paring back further tomorrow or monday into any continued strength...i own some HBC and WFC that i honestly don't think i'll be able to pick up at a better basis than i have now...financial ETFs/mutual funds-> that's another story...pretty safe bet they have not seen the ultimate low...

it's been a roller-coaster...my portfolio dipped into negative territory earlier this week, but is now back into the +12% area...that's what happens when you're 65% long during a financial nosedive...back to 70% cash and no plans to immediately reposition...

btw, all of you DENSA members undoubtedly have better looking YTD equity curves than i do...

Pakistani Investors Stone Exchange as Stocks Plunge

http://www.bloomberg.com/apps/news?sid=aV48GFdvuEYw&pid=20601080

re the angry mobs at the Karachi Stock Exchange:

"The whole of the world watched TV images of the inhumane treatment of the poor of New Orleans following Hurricane Katrina. With great respect to those couple hundred thousand disadvantaged souls (as my readers know I have), I believe those ugly TV images may even look mild compared to the scenario that would follow angry mobs across America if market interest rates rise beyond the tipping point that would collapse the entire US mortgage market.

Yes, I believe there will be a US economic recession, but the elements are now in place for the first time in 80 years for America to sink into a depression.

Should a depression unfold, there will be big name financial houses that will fail. Accordingly, the owners and managers of wealth ought to be researching today how to protect themselves beyond FDIC-insured accounts. I shall write a lot about this in the next month. "

Posted by Posted by Bill Cara on March 12, 2007 10:33:36 PM | Category: Cara Today in the Market

the stock symbols AHM, BSC, IMB no longer exist...TMA- just a matter of weeks...what about WM, LEH...

I am up $4 on FXP from buying today already. After reading what Vinod said, I wish I would have bought a bunch more. I guess "they" will have to keep the market up tomorrow also if they don't want to pay on all the puts that were sold. Maybe I will get a chance to buy more if we get a rally tomorrow. It seems like a few things might be overbought. Going short tomorrow if there is an up market...

JP Morgan’s Dimon on the conference call:

“Our expectation is for the economic environment to continue to be weak – and to likely get weaker – and for the capital markets to remain under stress,” he said in a press statement. “We remain conscious that since substantial risks still remain on our balance sheet, these factors will likely affect our business for the remainder of the year or longer."

"Part of that weak economic outlook can clearly be attributed to mortgages. In a surprisingly short conference call with analysts, Dimon suggested that losses in JP Morgan’s prime mortgage book could triple in the foreseeable future as the credit mess moves out of subprime and into Alt-A and jumbo loans."

“Prime looks terrible,” he told analysts on the call. “And we’re sorry, and there’s nothing else we can say."

Re Jumbos and Alt-A:

“We were wrong, we obviously wish we hadn’t done it,” Dimon told analysts. “We’re very early in the loss curve."

http://tinyurl.com/5umapm

always early->

happens every time i trade on negative sentiment...not sure if it's b/c sentiment is hard to gauge, or b/c i don't have the patience to let it peak before staking a position...

'charlie' on cara china suggests the following strategy for managing an entry:

(a) buy a few shares to watch...just enough to engage your attention each day and create an emotional attachment...for example, buy 10 shares of SU @ 53 today...

(b) you now have 'skin in the game-' which gives you genuine emotional responses to news and price action, and the motivation to follow both each day...all of which are necessary for you to gauge sentiment accurately...

(c) sit back and wait for (negative) sentiment to peak...how many of us waited until tuesday morning to buy the financials? or refiners? the ultimate buy point is when panic ensues...but you're not ready to make that move unless you've been intently involved in following the position...

(d) when panic hits, rather than being left with, say, 20% of your powder, you can pounce with 90+ percent-> another 990 shares of SU at whatever (35 would be a panic price...can't happen, right?...i didn't think UYG or TSO could hit 14 within my time horizon either)...

beats being early...

2nd,

Thanks for the eslr news. I like the stock, it's fun to trade and it's probably a good company. But it's surprises like this that make me glad I sold this afternoon's load that I bought just above 10 quite a few cents highter. It was a textbook trade, and not bad for an afternoons work:)

I would be remiss to not mention your precisence regarding the airlines also. At the time you bought them it was hard to make the case they should be good, but they turned out really good. Keep doing this and any money problems you may have will be solved.

2nd
There is much issue with financial
What if congress do not pass FNM/FRE rescue bill before going on vacation in august?
What if this bill contains many pat projects in it?
Housing may not recover with current mortgage rate; they may have to bring down around 5% for 30 year fix to revitalize housing market
And for that FED may have to cut rate?

Looking back, and after the fact. I feel that should have invested 100% instead of keeping 30% cash, return would have been great
Also expert says do not average down, but I keep adding when price was going down
And it work out very good. E.g. keep adding UYG and into other position (mostly cara100 stock)
I do feel some airline stock will hit their 52 week high with in year if oil price goes back to normal
And this was a sucker’s rally, can not be too greedy. So, sold all some were in red like GOL
YTD gain is 28%
Congrtulation on your financial pick

vinod- 28% YTD? in that case, 100% cash would be a great place to park while you wait for the next set-up...(given +/- 20% drops in the indexes, that puts you about 48% ahead of the average investor this year)...

vinod- weren't you displeased with your returns just a few weeks back? reminds me of a friend who worked as a chemistry teaching assistant in the seventies- she said that invariably the best students were the ones most worried about their grades-> every once in a while, one would walk in concerned, she would flip to the grade book, look up, and say "you hot dog, you've gotten all A's so far on the quizzes..."

2nd - excellent advice, I was way too early with my longs on the way down, that's for sure....

Financials will continue providing entertainment for some time to come... UYG/XLF are the right actors for this soap opera.

I meant SKF/UYG

CP- thanks, but the credit goes to 'charlie,' who really should be posting more here...

CP- LOL..you know how sometimes you click 'buy' when you mean 'sell?' i'll bet at least one person has taken a position in SKF and walked away, smiling when he hears the DJIA sank 300 points on the way home, only to find out he bought 1000 shares of XLF instead...

2nd - Ha, yea, I've caught my fat-finger mistakes a couple times in the past month just before tragedy struck... Now I always double check.

Vinod - I think you can rest assured that FNM/FRE will get their FED access lickity-split!!!!

Pakistani Investors Stone Stock Exchange
These people want to be bailed out! Who do they think they are? Americans?

IMO FED will not cut rate, this would cut off necessary foreign investment. The rate can't go up either, until economy improves

There are other tools being used to curb oil speculation and help bank stock, like short-selling rule changes and margin requirements. Stay tuned for some other surprises from Bernanke &co.

How much do you wanna bet the FED traded HB&B the margin requirements for short sales rule? They're covering each others backs.

Chickenpookie, I think that's a great point re: the HB&B trade-off.

Anyone considering writing short-term puts early tomorrow on SU (Suncor)?

2nd - on SKF

I've done real well with it a couple of times this year, but holy crap it's insane right now. There is no way to trade it unless you are on that monitor all day long (which I can't do)...and yeah, if you hit buy instead of sell the past couple days you are looking at a lot of lost sleep.

blowout preventer - no puts, but I started a small position today on SU.

Wonder if FED bailed out Pakistani investors, would they still hate US?

Sen. Carl Levin wants to pull the plug on UBS for helping a few thousand wealthly Americans evade taxes. Isn't Phil Graham vice-chairman at UBS Securities? I betcha he becomes a "big whinner" like he says the rest of us are. Isn't he thought to be McCain's choice for Treas. Sec.?
A perfect replacement for Paulson, trade one shyster for another.
You couldn't make this stuff up...

FED should bail out Iraqi, Pakastani, Afghani and Iranian investors. Then end of war could be declared. This would save hunderds of billions!!!

Blowout -
Like gdiman I started a small position in SU today but no puts. I did notice a significant number of Sept. puts at 50. I think Bill suggested Dec. puts at 50.

Paulson, McCain, Levy, Graham Bernanke, COX, Congress, conservative party, liberal party, etc.,etc.

UNACCEPTABLE!!!!!!!

I held a medium (1k) SU position overnight last night and sold it on the little uppity-up this a.m. Not much, but it made up for a god-awful short I did on LUFK two days ago. Don't ask, I have no good explanation in the light of day.

I like the Canadian oil-sands play and I've been just trying to trade around some ups and downs in the Oil Sands stocks. . . I will be an honest to goodness SU investor when I see some real panic selling below 49-48 or so. I've got my ROTH IRA ready to buy should that happen.

Exceptional writing from Jesse:

"How bad will it get?

The short answer is: worse than it is now, and it will last longer than you think. There is no easy way out. Bill Poole does not think it will be as bad as the Great Depression. But then again, we are in uncharted waters, and even he does not know.

There are some folks in Washington who think you cannot handle the truth, or at least handle it gracefully, without creating a fuss, maybe getting hysterical, and perhaps demanding a chunk of their hides. After all, your ignorance is their power.

Is it worth it? Ignorance? Is it worth making bad decision after bad decision, blissfully happy all the while, until you have doomed yourself and your family to a very painful and protracted period of near hopelessness and desperation?

Sometimes it gets so bad that an entire nation will surrender itself, willingly, to der Fuhrer or il Duce or the State, then to the madness, and finally, to the abyss.

The truth is not hidden. But it will not come to you unless you seek it, allow it in despite discomfort, and accept it, act on it.

"The secret of happiness is freedom. The secret of freedom is courage." Thucydides (c. 460 BC – c. 395 BC)

And the secret of courage is to care for something, someone, more than you care for yourself."

http://jessescrossroadscafe.blogspot.com/2008/07/how-bad-will-it-get.html

Ladies and Gentlemen--ignore my post of 11:37 ... I just read Bill's wrap-up and he said what I was cogitating much more accurately than my random-thrashing. God I love this community.

Did you see that Merrill reported NEGATIVE REVENUE! Quite an amazing concept. In the conference call they went over the positive aspects of their quarter ad nauseum but tried to stay away from this detail.

Kaimu is right once again. They are in worse shape than Lehman. Makes sense since they bought a mortgage house at the top of the market.

10 pm on the westcoast and dow futures down 90, what do they have in store for us tomorrow?

Google's collapse
and MSFT earning also C earning coming this morning
I think a pin will be very hazardous for HB&B
for today's expiration?

will be busy at work today and will miss market action
good luck and good Trading

Good morning.

Here are your Cara 100 Ratings Changes:

New Coverage:

BMY - Hold @ Citigroup
SNDK - Above Average @ Caris & Co.

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

Have a great day and a better weekend.

I fail to see what is negative about the earnings reports of either Google or Microsoft. That after-hours action seems offside.

Cara 100 Update:

New Coverage:

PAYX - BUY @ Banc of America Securities

Target Price Lowered:

GOOG - from $750 to $675 @ Cantor Fitzgerald