Kinross announces friendly combination with Aurelian

http://tinyurl.com/6c9gm9

Lewis Black: It's the End of an Empire sale and everything must go

"We're so hard up for cash, we're dismantling America and selling it for scrap,"

http://tinyurl.com/6m4zow

anyone buying WFR @ 38?

Dear Bill,

As a Canadian, I just would like to point out that the games continue and it is the Canadians who are on the short stick. You have previously stated Suncor and another case in point today is our new star Potash. This company has dropped hard prior to today's earnings release.

So what did they report. Well, second-quarter net income more than tripled to $905.1 million, or $2.82 a share, from $285.7 million, or 88 cents a share, with sales climbing to $2.62 billion from $1.35 billion.

For the year, it upped its earnings view to a range of $12 to $13 a share, up from $9.50 to $10.50 a share. Analysts polled by FactSet Research expected the company to earn $2.52 a share for the second quarter and $10.63 for the year.

Guess what. Pre-market it is below yesterdays close and it already dropped 10% in 2 days. To top it off, Scotia downgraded it today from Outperform to sector perform. Amazing.

The games continue.

I apologise for the long message, but as a proud Canadian, I feel we need to toot our horn enough, as we do not do it enough and I just thought of doing it.

[Bill Cara note: I have been pondering the addition of Canada's POT to the Cara 100. It was in the May 28, 2005 Week In Review that I called Potash Corp of Saskatchewan "a terrific company" etc. The price was $90 in NY. The subsequent high is $241.62. Look at that gain in three years. But, you know, until recently, the trailing PE has been excessive. Now, with the earnings results and recent stock price drop to $205, the forward PE is under 10. Why HB&B are downgrading it is beyond me. Thanks tifosi, I'll reward your Canadian pride by adding POT to the Cara 100 today, and remove YHOO. Yahoo made a huge mistake in not accepting Microsoft's initial offer, which I thought was more than fair and said so at the time. Yang's ego got in the way. Also, I have been noting that Google Finance has grown to be the superior tool over Yahoo Finance. So out goes YHOO and in goes POT.]

i just finished reading my employer's pension statement. they finished down %3 for 2007, and expect more losses this year.

the pension fund's portfolio is %30 bonds, %5 real estate and 65% equities- %75 of which is in foreign held stocks.

i dont expect to retire for some time, but w/ the largest segment of retiree's about to hit the market, our pension plan is facing 2 years of losses in a row coupled with dramatically reduced contributions from retiring members...

been down so long it looks like up? LOL...that's what beating the street means after a year of write-offs and losses...don't lose sight of the big picture...

would be really surprised if we don't go down today...

In a recent conversation with my banker, he said he thinks many pension funds bought lots of mortgage backed securities. Wait til that pile of steaming feces hits the fan.

[Bill Cara note: This reminds me; the financial services industry is chock full of great people. The decision-makers who caused these problems are in the small minority. Unfortunately, decision-makers are always at the top. In recent years, they have proven to their staff and to the public that their average job life expectancy should be measured in months, not years or decades. Surely, some of HB&B's second and third line managers would be superior to many who are at the top (and earning gazillions) today.

Also for the past three years, when the credit/lending practice issues came to light, I often received letters from the lower ranks of HB&B soldiers saying please keep this confidential but I agree with you that our bosses seem to be idiots to permit what we see going on in our company today.]

ALOHA !!

dr. cosa ... Also don't forget that the largest portion of stock investors in America is being forced to retire not only themselves but their stock portfolios held by mutual funds in the likes of 401ks ...

For instance my Mother is being forced to sell off $1,500USD monthly from her 401k mutual fund. Times that by millions! So who is buying all these under-performing companies if net income is falling and debt is rising among the working class? What does Wall Street do when OPM dries up? The acceleration of 401k portfolios is only increasing as the years go by ...

ALOHA !!

Oops ...

The last sentence in my last post to dr. cosa should have read "The accelerated liquidation of 401k portfolios is only increasing as the years go by."

Cara 100 Update:

SWK - Downgraded to Hold @ Argus

looking hard at GG/SLW...

ALOHA !!

Is there someone who can discern a reason for the analysts term "HOLD"? I mean why are you "HOLD-ing"? Aren't you only "holding" so you can determine whether you should "BUY" or "SELL"? Does anyone ever really take "HOLD" seriously and wait for the analyst to announce "BUY" or "SELL"? Really "BUY" and "SELL" are the most important ... OUTPERFORM ... PERFORM ... HOLD ... seems like "insolent noise" to me! What a racket!

HB&B Front running - (bandits) - How obvious!!!! Only the expert thieves can rob you while looking you straight in the eye.... These pirates will continue feeding their habit until they've pissed away every last ounce of value, and the US gvmt are their enablers. I hear the suck, suck, suck sound of a giant black hole! Hurricane Paulson.

scaling into SLW at 14...

BC up on earnings...

BC - Patience just gave me an 11.2% reward. Minnow day for backyard dwellers.

ALOHA !!

From Google Financial today ...

Ford's Finance Chief Says Company Has Enough Liquidity

Let me translate ... "Ford's finance chief says the company has enough DEBT to cover the losses, not earnings, and hopes that they get profitable before they have to file BK"

After a $8.9bil loss ...

Bill, maybe you should start a Cara 100 WORST so we can have a list for shorting purposes! HA!!

ALOHA !!

More on analysts rating terms ... What's the difference between "BUY" and "ACCUMULATE"? I have seen the term "ACCUMULATE" now!

[Bill Cara note: I use the term Accumulate as a mind-set to start the process of investigating when I want to Buy. So Accumulate is the strategy and to execute a Buy is the tactic. Also, everybody has a different situation. Large block trading desks will execute an Accumulation or a Distribution program over many weeks and possibly months so as to not unduly affect the market. That program, if it's one to Accumulate, may involve a few Sells as well as the Buys. It's the net position of the strategic plan that counts.]

dr.cosa

Roger Lowenstein writes about the pension crisis and he talks about his recent book ["While America Aged: How Pension Debts Ruined General Motors, Stopped the NYC Subways, Bankrupted San Diego, and Loom as the Next Financial Crisis."] here:

http://tinyurl.com/lowensteinPensions

[Bill Cara note: Pension investing should be of the utmost interest by employees and retirees whose pensions are managed by others. This is a mine field.

As you know, I detest situations where management screws the employees and especially the retirees on the pension issue. There are unscrupulous legal agents of rogue managers who take down companies (that are having profitable years and are otherwise healthy) just because the pension plan is underfunded. Stelco Canada is just such an example. That was more than deplorable; it was fraud.]

Those overnight holds in SKF are not for the faint of heart.

vinod- India (IBN, EPI) and airlines-> giving back most to all of yesterday's gains...

My SRS overnight hold is doing great! You should have not talked yourself out of SRS 2nd...

thanks kaimu and JIM, ill check that article out..

BA getting dumped again this a.m. Above avg volume. Institutionals?

For those of you temporarily stashing cash in currencies in lieu of MM

Ruppee up IGN
Loonie up FXC
Euro up FXE
BZ real up BZF ;)
Yen up FXY

Aurelian to sell to Kinross for C$8.20 a share. As Otto Rock says in harsher words, this is a travesty. They are selling out for peanuts. Hopefully there will be a counteroffer.

kaimu,

I'l ofer my translation from Brokerish to English.

Buy - We have accumulated enough to start unwinding our position, buyers are welcome

Strong Buy - OK, someone take our shares, we want out and start worry

Strong Buy Reiterated - Please, pretty please, someone, anyone, buy it from us, we are stuck and desperate

Hold - Ummm... we haven't decided yet whether we are coming or going, give us a little time

Sell - hey, stop buying it, we haven't bought enough for ourselves yet

etc

SiO2- cashing in your WM puts?

Woolybear....

Your banker is right. And they used margin to buy more and more. That is why I left the advisory business. When that sh..t hits the fan there will be an avalanche of lawsuits.

Those mortgage backed securities (CMO, CDO..etc.)are marked to matrix(priced to model) not market. When they have to be priced to market there will be people with torches and pitchforks marching.

Headline.....BROKER KILLED IN PLUSH OFFICE!

WM down another 12%. If this one fails you will see a mini-crash at least in my opinion.

ALOHA !!

Geologix-GIX(TSXV) up some 6% on good step-out drill results! Looks more and more like a mine! Volume, however, is pathetic! Seems to be the norm for even the best juniors these days! Virtually no interest is left in this sector, which in my mind is good! Man, what a beating! REAL MONEY ... REAL WEALTH ... IN THE GROUND!

[Bill Cara note: not to rain on your parade, but there is a huge difference between resources in the ground and the cost to get them out. In the case of Geologix (which is a company I like), I am aware of analysts who think their planning is not good and their costs to mine will be proven to be much larger than estimated so far. This is not a slam dunk is what I am saying.]

How about sell and distribute? The difference to me is "sell" is a bulk move, while "distribute" is stepped selling on advances.

"Buy" means purchase immediately (in bulk), were "accumulate" means stepped buying on pullbacks.

definitions for the various terms can be found at google.com

bOss- congrats on SRS...(i see HOV is selling off today)...hope you're still holding your OEX puts..

I got out with a $500 loss on the OEX @ $7 yesterday. I thought I would be able to buy them back at $6 today. Didn't happen. It is at $9 now :(

anyone have an entry point for BA? now down to 63.

Cara 100 Update (Final):

Target Price Raised:

LLTC - from $36 to $38 @ Global Crown

Target Price Lowered:

COST - from $74 to $67 @ UBS
EXC - from $103 to $101

watermelon re: BA

Looking at selling puts, perhaps Sept, strike 60, or later dates.

Market Edge has BA with a short sale, but think opinion was issued before today.

Existing-home sales fall 2.6% to 10-year low

Euro reacted immediately to the upside against USD. I expect the smart money has already cashed out of yesterday's 'rally', leaving Joe public to pile in. The drop from here in financials could be brutal, considering what MinyanVille had to say yesterday about the SEC's naked-short selling ban on HB&B:

"When buying these stocks, remember that a vacuum has been created on the downside. Short sellers produce demand for stocks as they go down. If there's no short interest (and something bad happens), this source of buying is gone."

kaimu,

My personal favorite is "Perform". Is that a rating or a command, as in what the king said to the court jester?

Regards

buy/sell - Vadym has it right, It's important to differentiate between advertisement and advisement.

Colin Twiggs this morning:

"George Bush's quip that Wall street got drunk and now has a hangover understates the depth of the problem. It would be more apt to say that Wall Street has been on a 30-year credit binge and needs a long stint in rehab to wean it off its addiction.

The latest housing bill passed by Congress is no miracle cure and will not prevent further write-downs in the financial sector. There is some evidence, however, of renewed confidence in the mortgage sector — which should ease downward pressure on house prices. The latest rally of financial stocks is typical of a bear market dead cat bounce. The S&P Financial index displays a bearish shooting star candlestick pattern, warning of resistance, while Twiggs Money Flow oscillating below zero signals continuing selling pressure."

right on...

Re: "When buying these stocks, remember that a vacuum has been created on the downside."

moab and C3 expressed same in the discourse yesterday. Credit where credit is due.

Aurelian - WTF?

Shares reached C$10.50 before Ecuador's moratorium. And now that the clouds are clearing, KGC buys it at a valuation of C$8.20 per Aurelian share? WTF?

Will the other seniors stand idly by and let this happen? I hope not!

Not yet 2nd, but any time now. Unfortunately it can only go down another $4 though.

ALOHA !!

Vadym ... Very funny and reality!

French_Canuck ... HA!!! I love this part(and something bad happens)!! "If there's no short interest (and something bad happens), this source of buying is gone."

Minyan leaves out the "printing and buying" the US FED will be doing to make up for the lost short covering! Don't ever discount the "MOUSE MONEY"!

BA entry - don't overlook the ex-div and div dates:

05/08/08;06/09/08, respectively.

BA: Bill wrote on this one a while back with a low 60's entry for a long term holding.

ALOHA !!

Jock ... Shock of shocks! Juniors are ripe for the picking! They do all the work and the Seniors get all the profits!

sucking in the last of the buy-on-the-dip crowd right about now...

Aurelian - I just wrote my protest note to management. Come on, Caristas, when we see BS, let's scream BS, BS, BS.

Otto Rock (http://incakolanews.blogspot.com/) just valued the shares at C$18.60 under conservative assumptions.

Let's flood Aurelian with protests: http://www.aurelian.ca/contact.php?contact=complete

[Bill Cara note: I surmise there was an insider deal made that will benefit some people more than the independent shareholder. Why not get vocal with the Ontario Securities Commission and demand their investigators subpoena all notes and records leading up to this proposed deal -- before they are destroyed and the evidence lost.]

dr.cosa / kaimu --

"Baby Boomers about to retire." -- Not picking on anyone here, but I would like to correct a general misconception about the "baby boomer" demographic. Most importently, that demographic is most often stated as being the period of 1946 - 1965. That is a 19 year period! Of course, there were a lot of babies born in total during a 19 year period (any 19 year period!), BUT THEY ARE NOT ALL ABOUT TO RETIRE SOON!

Suppose a person was born in 1960. He/She would be a "Baby Boomer". He/She would also be only 48 years old and most likely NOT about to retire soon.

Secondly, let's supose a "baby boomer" was born in 1946. That would make him/her 62 years old currently. Most people think that full SS retirement payments could start for that person in 3 years (not really all that "soon")- BUT WAIT - our wonderful Gov decided a few years ago to deny it promised payback at age 65 until the age of 67 for all "baby boomers" and later babes.

This is 2008. The earliest that "Baby Boomers" will be able to retire and draw full payments is 2013 - five years from now, and NOT all "Baby Boomers" will retire at the same time because it will take another 19 years for all to qualify.

Frankly, t would be far better for young people today to worry about promotional opportunities that will be delayed to them because older, more experienced employees will NOT be retiring soon due to inflation, their bond interest payments at almost nothing levels, and pension plans denied. Perhaps, SS is not such a bad idea if we are to get young, fresh ideas into upper level management postions - just another way of looking at it.

Re: BA entry.

Watch to see if the prior low @ 62.02 holds.

Pookie: Ex div dates obviously affect prices, div payment dates don't.

BDK - edging up for tomorrows earnings report...

2nd
decided to give mysefl a break and wait for a week before I do any trade

BDK 60 straddle requires a move of 9.3% to be profitable.

Re: Aurelian

Hasn't it been mentioned here in the past that there almost seems to be a collusion amongst the majors to let the juniors shrivel from lack of interest and funding before picking them up for peanuts? Seems to be what's happening

Re: SRS

I don't believe HOV is a consideration for SRS, which is an ultra short to IYR, which has mostly REITS in it's holding. So it really depends on vacancy rates, retail bankrupcies, and maybe interest rates. As I've mentioned before SPG is the biggest at over 7%, and it just had a nice run up through the 200 but stopped at the 50, and the RSI just rolled over. Tempted to buy some puts on SPG.

Re: Ryder

Looks like one of the stocks mentioned by Bill, up big (6%?) on Tuesday, down 10% yesterday, and down another 2% today.

Adding FLIR to watch list. Beat quarter....guided up....trading down 10%.

WGW- opening a position at 2.17...

AP on BA - Thanks, I was wondering about that. I thought only holders received dividend though... sell after distribution?

pookie:

If you own the stock prior to ex-div you will receive the div even if you sell the stock prior to the distribution.

The markets are not down that much but TRIN is really high at 1.75. Serious distribution?

I am writing to Aurelian management now. I think they are being flooded with angry emails. What is even more galling is that they did a share offering to Kinross for $4.75 as part of the deal. So if a better offer comes around Kinross still makes a small fortune from losing. Disgusting! Aurelian management let themselves be screwed over to an extent I wouldn't have thought possible.

Puts have a new owner 2nd.

Optiver BUSTED!

Why would Aurelian be trading $2 (25%) under the offer price?

retirement? that concept has changed...

(a) life expectancy has improved/likely will continue to improve...

(b) fixed income? not here, man...a little trading, a little telecommuting, new business ventures, half-time work for full benefits-> the landscape, as usual, has already changed, and will change further over the next 20-30 years...

(c) once you permanently "retire" to nothing but leisure activities, you're done...i would encourage all to stay involved in your professions/communities/families, find new vocations/challenges/directions...life should not be partitioned..let it be a natural progression towards financial independence and the ability to do what you've always wanted to do...

Following 2nd...

Just getting my feet wet with my first miner:
Western Goldfields Inc

500 shares of WGW @ $2.09

congrats, SiO2...

2.09? seems like you're always entering with a better basis, man ;)

SKF- back in at 122 for a trade...

Bill - Aurelian and Ontario Securities Commission

Wouldn't subpoenas for messages relating to an acquisition be issued only in the the context of a regulatory case against the parties?

I'd think lawyers for aggrieved shareholders would have to initiate such a process, which would cost major bucks. Or is there a simpler mechanism for this?

WGW 2.10 good support technically.
ESLR 8.76 This is the trendline for the trading range +/-.

AlaskaP. - ex-div/div - Tks, I see. Not only prior to(A few days to be safe) ex-div, but also inclusive of ex-div? (total of maybe 4 days ownership for eligibility)?

TTM and IBN back to july 22 closing prices? so all those newly-minted shareholders buying drinks last night are down to spare change for a cigarette while contemplating the future of india...

Volume very low on ESLR, Craig. I'm fully loaded or I'd be buying here.

Oh, and ESLR made it back on the SHO reg list. So when is the SEC going to actually enforce the law for all equities, and not just pay lip service to helping out the financials?

FWIW......There is rumor flying that the company SemGroup ticker SGLP has been involved in unauthorized trading/fraud and is having to rapidly liquidate, contributing the recent crash in natgas..........

and crude.....

Billy, weird timing as i just had the UNG chart up and was marveling at it's plung these past two weeks, with a further 7% today.

Good time to buy or falling knife? Sliced through 50 and 200 DMA's no prob on high volume.

VLO down another 5% today. When does the bleeding end?

RE: SGLP from Marketwatch

"SemGroup LP, a private oil marketing firm, may have roiled energy markets on losses tied to a flawed hedging strategy that oil prices would fall during 2008. When prices rose, SemGroup was unable to put up collateral for its swelling bets and sold its futures account to Barclays Capital, according to Tuesday's Chapter 11 bankruptcy filings from SemGroup LP. The company lost at least $2.4 billion in futures. "

Billy - good to know, thanks. Was becoming concerned about my CHK.

Proudpapa.............may be a good time to buy a call on UNG a couple months out......would definetly be buying on weakness and would limit further downside.......but this looks like it may be capitulation.......very chaotic

SiO2- still holding UNG puts?

No UNG, but I still have HND.to just coming back to break even territory. A lot longer than expected.

Surprise!!! Sales of existing homes decline...

newly-minted FRE/FNM holders-> have to be puffing on something stronger than cigarettes to stomach the daily moves...

The Feds are making a big deal out of busting a hedge fund for "bullying" the energy markets, which they call manipulation.

My take: I don't know the exact situation in this case and don't care enough to look it up, but I think what happened was that the PPT was trying to bully the energy market lower at the close and someone wasn't letting them do it, so the PPT had a tantrum and picked up the phone ;-)

Moving the market in a players benefit has happened forever. How about the specialist throwing out a one lot at the close to positively affect his open p&l? Or, how about that time when you owned a thinly traded option and was shocked to see where it settled? Or the penny miner that somehow traded outside the daily range at the close (or after the close) on miniscule volume. Or how about the PPT market manipulation? Or how about the deep pocket fund manager that pushed the stock price through resistance on volume to help out his long holding? That's called "painting the charts" and it happens all the time. Or how about the naked shorts in the mining penny stocks, or is the PPT on that side of the trade too?

This is all clearly manipulation and if the authorities really wanted to fix this bullshit, they would, but they won't.

Ok, I'm over it now, gotta get back to work!

Agnico--AEM down over 5.50!! . . .

Revenue down due to 56% drop in zinc prices; today downgrade of trgt price to 65 by Wellington and an upgrade by UBS.

AEM owned by a lot of institutionals as their number one gold play. Selling looks a little overdone by I haven't read thru all the financials. doydd.

they're defending that 11500 line if it kills 'em...

If John Q public were smart, he'd take his home off the market if he could afford to. Otherwise it's just dumping at this point. I've avoided marketing my properties before(in good markets) because too many comps were up for sale. And I never got highest comp price, either. Didn't expect to.

I'll bet HB&B haven't even discounted defaulted properties 15% yet... They let their stock drop 99% before taking a 15% hit on their mortgage assets. Why should they take the hit when taxpayers are so quick to play Underdog the superhero...?

Not enough negative market incentive yet for owners to give up on selling and switch to holding... I suppose.

Cox is now looking at a 5 to 10 cent uptick rule for shorting. This is beyond disgusting. My guess is that they see armegeddon coming and they want to do everything to stop it, including blaming it on the shorts, just like in the GD.

Cox: Intend To Extend Short-Sale Protections Marketwide
Last update: 7/24/2008 11:30:48 AM
By Judith Burns
Of DOW JONES NEWSWIRES

WASHINGTON (Dow Jones)--Securities and Exchange Commission Chairman Christopher Cox said U.S. regulators intend to extend restrictions on short-sales to the entire market.

"That's our intent," Cox said in response to questions at a House Financial Services Committee hearing on Thursday.

The SEC issued an emergency order last week, which took effect Monday, to tighten requirements for short sales in Fannie Mae (FNM) and Freddie Mac (FRE), the federally sponsored housing-finance giants, and 17 primary dealers in U.S. Treasury debt, chiefly big Wall Street firms such as Goldman Sachs & Co. (GS), Lehman Brothers (LEH) and Merrill Lynch & Co. (MER). The order is set to run through Tuesday, but could be extended to mid-August.

Rep. Gary Ackerman, D-N.Y., questioned why the new restrictions apply only to 19 stocks rather than the entire market.

"Who are we protecting if we're not protecting everybody?" asked Ackerman.
Cox said the 19 stocks were targeted because they are now eligible to borrow from the Federal Reserve, something that had previously been limited to commercial banks. But he said the SEC aims to extend "operational protections" marketwide.

The SEC also is revisiting price tests for short sales other than the so-called "tick test" which it abolished last year, Cox added.

Ackerman has introduced legislation to reinstate the uptick rule, which allowed short sales only when stock prices are ticking higher, saying it seemed to work very well when it was in place.

Cox said a thorough study of stocks in the Russell 3000 index found the tick test was ineffective in markets that use decimal pricing, reducing price changes to pennies. He said the SEC is looking at alternative price tests, based on five or 10-cent price moves.

Short sellers sell borrowed shares which they hope to replace later at lower prices, profiting from stock price declines. The practice is legal, but has long been controversial. The SEC has put restrictions in place in recent years to curb abusive "naked" short sales, in which stocks are not borrowed before short sales. That effort was extended with the emergency order, which calls for borrowing or arranging to borrow shares in advance of short sales in the 19 targeted stocks.

- By Judith Burns, Dow Jones Newswires, 202-862-6692; Judith.Burns@dowjones.com
July 24, 2008 11:30 ET (15:30 GMT)

vinod- closed 5 contracts of OEBTP @ 9.30...

AEM

Just sold 10 Sept puts on AEM strike 55. If "put" to me, cost will be 51.80. Otherwise, pocket the proceeds.

RYL down almost 20% as their conference call is underway.

I'm short, but even this is more than I expected. New lows in coming days and weeks, I think.

Please excuse me if I am wrong, but I thought the government required mandatory distributions from tax deferred retirement accounts at the age of 70 1/2. Is that what is happening to you mother Kaimu? If not, could you please explain the situation?

Thanks

SKF- out at 123.78...

As Moab said - why did ARU stop in the 6.60 range if the offer was 8.20? And if it's such a good deal for Kinross why is their share price down over 8% today. Is Kinross starting to look attractive under $20 here??

Stv

Dear Bill,

Thanks a lot for adding Potash into the Cara 100.

I really do appreciate the consideration you give to us small guys and this is a major reason I follow your blog and the issues you convey to us and help us learn.

Once again, thank you very much for allowing us to share ideas.

[Bill Cara note: Starting this Fall, when I'll be in a better position to deal with it, I am hoping that people in this Community start to challenge my choice of the existing Cara 100 components and to recommend new ones. It serves us all if the Global 100 list is the best quality we all can make it.

Current share price, has almost no consideration: for the Cara 100, I look for quality of a corporation (whose shares are listed for trading in North America), including management, financial strength, industry competitiveness, operating profitability and return on capital metrics, and so forth. As we all know, the best quality companies have their ups and downs. That's why we trade (even if it's infrequently), rather than just buy and hold.]

UAUA- back in at 8.25...

is VLO hitting bottom? oil has turned positive and lo and behold, VLO is moving up. I'm placing my bets it is.

2nd
"closed 5 contracts of OEBTP @ 9.30..."

I think best time to closed is after 3.45

I overlooked the fact that the Aurelian deal is totally dependent on Kinross's share price, which is taking a 9% hit right now. Kinross gets an absolute steal ($60 per ounce + exploration rights) and they lose almost 10% of their market cap? I think the bankers are playing this one like a fiddle.

2nd
for discloser purpose
I have 30 contract, entered yesterday

Wondering why the dow transports have held up so well, I started looking at the holdings of IYT to see what's holding this index up. Fedex and UPS are already down a good chunk, but it appears several of the rails are still near their all time highs. However this after the sharp recent (bear market) rally.

I'm thinking rails may have benefited from higher fuel since more freight went from trucks to rail. Certainly they wouldn't benefit as much from falling fuel as other sectors.

But I have my doubts that they've priced in a true economic slowdown, in which case all freight drops and they would feel the impact.

Ultimately I'm looking for a short candidate given my view of a coming slowdown, and the best so far looks to be UNP, Union Pacific Corp.

Trailing PE of almost 21.7, Forward PE of 15.6, and of course if earnings do slow, that PE would be higher. At any rate, seems rich for a rail company in a slowing economy.

Chart looks like it just finished the 61.8% retrace, RCI back over 70, stoch peaking, and looks like it could be rolling over.

Might buy a put or two...

re: POT. How would a failure of the Ethanol mandate in the U.S. affect POT?

[Bill Cara note: Agreed. In fact, I am anti-ethanol. I agree with the C.D.Howe report.
http://www.thestar.com/article/466265

I'll go further; I think there was a lot of fraud, lobbying and arm-twisting to get so much corn planted. Moreover, why not turn it into kernals for popcorn and send it to countries that are in dire need for food, as one member of this Community recommended.

But, as to Potash Corp of Saskatchewan, I also like Swiss-based Syngenta in this space, and their performance just cannot measure up to Potash Cp, as the 5-year comparative price chart and the fundamental picture
shows. To see this price chart for POT, click on http://finance.google.com/finance?q=pot
then go to the 5-year chart and Compare to SYT.

The bigger point is that the world's food supply is under pressure as populations expand, peoples in the emerging world get richer, and agricultural land depletes in quality as well as area. Despite my personal inclination to consume naturally grown foods, I understand the need for fertilizers. So, as a trader, I anticipate the continued good health of POT and SYT over the 'foreseeable' future.]

Pookie - Whoever owns the shares at the close of market on the day prior to the ex-date gets the dividend. Your confusion re # of days has to do with the difference between the ex-div date and the record date. For your purposes, the ex-div date is the only date that matters. Gotta own at end of previous day to get dividend. You'll get it even if you buy at 3:59pm.

(I've always wondered, though, what happens if you buy after 4:00 in the after-market, or in the evening session; who gets div in this instance?--someone with actual experience please disabuse me of my ignorance. Thanks!)

SNDK- buying back at 13.69...

UAUA- adding at 7.84...

CARA100 prices: This site displays current 20-minute delayed prices of all 100 components, separated by CARA GIC sector. It also shows the daily performance of each stock and each sector, as well as the performance since Jan 2 2008.

http://nexalogic.com/cara100.html

Prices are updated automatically every 5 minutes or so.

You can see that financials are leading the way down today, with health care the top performer.

Top performer for the year so far: Gerdau (Brazil) +48%, worst performer Tata Motors -48%.

Hope it is as useful for someone as it is for me.

UAUA- clearly an ill-advised trade...holding...

SKF

I know there are some here who are trading this intraday, but as I said yesterday it looks to run higher before it hits resistance.

The first resistance is at or around $130, but I see it moving through that area before significant profit taking takes place.

Just one person's opinion, as always ...

Disclosure: Small position

Banking index is accelerating to the downside but TRIN is falling as well indicating money flow into some stocks.

OG re: Ex-dividend date.

Cut-off is the market close (4:00 p.m.) the day before ex-dividend date.

shaking out weak holders...

SiO2 - Hey, Ace, you're good! (Line from great old Donald Duck cartoon).

Any chance that, for your next trick, you could get realtime prices (as of moment page is generated).

(Some people are never satisfied, are they?)

SLW- selling at 14.58...

Thanks Nexa.

Here is a nice article by Norcini on the difference between investing and trading. I try to trade with these same principles. His comparison is much more eloquent than mine would ever be. Enjoy.

The Difference Between Trading And Investing

Author: Dan Norcini

Dear Friends;

Apparently some of our readers are confused as to the differences between investing in gold shares and trading in gold shares. Judging by some of the nasty grams I have received from a few of you, I thought it might be worthwhile to explain the differences in the two as to the manner in which they approach trading/investing.

Investors generally have a longer term view of the market, attempt to define a macroeconomic trend and position themselves properly for that trend as it develops and ride it until the trend is exhausted and the macroeconomic picture which gave rise to that trend is no longer valid. They do not try to trade in and out of stocks daily or weekly for that matter but look to add to their holdings only on price corrections as they slowly build a sizeable position to take advantage of the move that their macroeconomic view informs them is coming.

Traders are an entirely different lot and approach the markets much differently. Their goal is more one of market timing attempting to catch short term price movements both up and down and profit as they take advantage of those moves. They will move in and out of the market as frequently as they prefer. They are much more active in managing their holdings compared to investors who are generally more passive.

That being said, some of you seem angry with me because I counseled abandoning a trade that goes bad. The notion is that I am now advising selling out on weakness. Unfortunately, those who erroneously think this way do not understand that trading (note – I did not say INVESTING in ) gold shares involves buying them on subsequent price weakness AFTER they form a short term technical buy signal on the charts and SELLING them into a rally after they form a short term technical sell signal on the charts.

Sometimes a TRADE can move against you in which case, as a professional, I will get out of the trade with a small loss and immediately look to move back in after the market moves lower (assuming I am buying) after which it then provides another short term buy signal. I will then take that new trade again expecting it to move in my favor. If it does not, and the market violates a technical support level, I do not argue with the market, but get out with another small loss all the while anticipating yet another entry point at another level at which I get another new buy signal. If the trade then moves in my favor, I will ride it until I feel the current move up runs out of steam at which point I will exit the trade.

The entire point in this exercise is to KEEP MY LOSSES SMALL. Each and every trade I put on has a price point at which I know the trade is either good or bad. Trading discipline then informs me to either exit or maintain or even add to the position. Arguing with a market is a technique employed by losers who inevitably end up busted and broke, just another piece of road kill on the floor of the pit.

By moving into a market as soon as I get a technical buy signal, I am in at a point with a DEFINITE set risk which I define as small. The longer you wait to enter a trade, the more your risk increases because the market has moved further away from that price level at which you know the trade has soured. That is the key to successful trading. Some of you need to lose a lot more money before you learn to RESPECT the markets. Only fools and novices sit there and argue with the market over a losing position all the while their trading capital dwindles into oblivion. You must first learn how to keep your losses small if you are going to survive as a trader. If you can do that, the profits will take care of themselves.

Secondly, some of you are also confused over what it means to “BUY a FISHING LINE” or to “SELL A RHINO HORN”. Neither Jim nor I have ever counseled buying willy-nilly in some blind fashion into a falling market just because you think prices have fallen far enough. How do you know that they have? I can emphasize strongly enough that prices can always fall much further than you ever imagine is possible. As a matter of fact, they can fall far enough that they can wipe out the entirety of your trading capital. Again, learn to respect the market.

Nowadays there is a new phenomenon that did not exist 20 years ago in the same quantity or form that it does today – that phenomenon is the hedge fund.

I have repeatedly tried to inform our readers that hedge funds are almost exclusively technicians in their approach to markets and rely on their computer generated buy and sell algorithms to enter and exit markets. Such algorithms have them constantly chasing prices higher by buying strength or chasing markets lower by selling weakness as all they are interested in is momentum in either direction. IF IT MOVES, CHASE IT – is their motto. Hedge fund activity is of such size that even the commercial traders in the futures pits in which I ply my trade and make my living are fearful of stepping in front of them. Now, if some of the biggest players on the planet decide to unload on a particular market, are you going to be foolish enough to attempt to single-handedly step in front of them and cause them to halt their selling by your own force of will? Try it and see how long you last!

That is why you must have a point at which you know that a trade is not working in your favor and get out of the way of these players so that you do not end up buried by them. Keep in mind that the market could care less what yours or mine or anyone else’s opinion is. It will go where it wants to go when it wants to and will only stop when it is ready or in the case of a hedge fund selling orgy, when their sell programs stop issuing sell signals. That is the point you are attempting to catch when you enter a trade.

Sometimes, in spite of all the caution and research and analysis, the market simply does not cooperate. So what – that is life as a trader – just get out of the trade and wait for another opportunity. You will ALWAYS get another opportunity to trade that market but if you end up losing all of your capital in a hedge fund dump because you wanted to play the bold defender of the faith, you WILL NOT last long enough to get that opportunity. Keep that in mind and do not ever forget it. It is coming from more than 2 decades of trading experience.

Back to the issue at hand vis-à-vis Fishing lines and Rhino horns – in a falling market you DO NOT jump in and buy weakness because the market is falling. You buy it at a level in which you EXPECT support to develop or at which you have ascertained that downside momentum is ebbing. That level is determined by examining the price charts. When Jim states a level at which he is going to buy it is because he is making an informed decision based on an analysis of a price chart. I will do the same thing but I do not publicly state price levels. That is just a difference in our trading styles but we both mark our buy in points after careful analysis, not by arbitrarily picking some random number out of the air.

Before you buy in however, you should note a price point that you are willing to risk your trade to before exiting. That will vary for each and every trader depending on their temperament, their capital and their conviction. I personally HATE losses so I cut them short very quickly. That is why I get out of a trade that is not working and quickly forget about it and move on to the next trade. No one likes to lose money on a trade but how you handle a loss as a trader says a lot more about your potential to survive in this business than how you handle your winners. Anyone can do the latter (although some gloat entirely too much) but only a rare few can handle the former.

I will be the first to admit that there are times in which I will violate one of my trading principles and stick to a trade that has gone bad and even add to it but I only do that in those few cases that I KNOW BEYOND A SHADOW OF A DOUBT, that the technicians are simply wrong and that price is too cheap or too expensive. Keep in mind that knowledge comes from 2 decades of knowing the markets that I trade and even at that I rarely do such a thing so I do not recommend this as something that most should even think about doing. It should be noted that the futures world is completely different than the equity world. In the case of futures, one has to know the supply and demand picture and the nature of the particular product they are trading – in the case of the equity world a host of things could take place that could completely justify a stock sinking into the toilet. One of the cases that comes to my mind was the case with Crystallex a while back when the government of Venezuela announced that it was basically going to nationalize the mining industry in that country. I wonder how many traders ended their careers right then and there on account of that out of the blue occurrence. Taking a small loss in that would have been far preferable to getting wiped out, would it not?

I hope this clarifies some things for you all. I wish I could answer all of your emails but I simply cannot. Those of you who write to me in a civilized fashion can expect a civilized answer if I do find the time. Those of you who write to me in the spirit of a horse’s ass, can expect an appropriate reply, assuming I want to waste time answering your email.

Lastly, please do not blame Jim, myself or Monty for that matter because you might happen to own some junior mining shares that are going down. If you are looking to blame someone, blame the naked short sellers or the management that does nothing to protect its shareholders’ interests or whatever. Even better, look at the shares of the mining companies that are the leaders in the sector and move some of your money into those stocks at the appropriate points.

Do not get married to a stock. Successful traders learn to optimize their trading capital and move it where they can get the best return on their money. Some of you are still pining away at the poor performance of some of the South African miners. Try to be objective – if they are not moving up as gold moves higher and there are other issues that are, then get rid of them and buy the better performing issues. At the very least, if you still think that they will turn around, then at least lighten up on them and move some of that money into the sector leaders. The name of the game is to make money – to do that you need strong performers that maximizes your investment. There is a reason why some of those stocks are not performing. We may not ever know what it is but the blunt truth be told – who cares? You will be much happier and self-fulfilled to see a stock that you have purchased moving strongly higher in a favored sector than sitting there mumbling, frustrated, angry and bitter because yours is going nowhere, especially after doing all the research and analysis that convinced you to own a gold mining company to protect and grow your wealth. Besides, your wife will think you are a veritable genius especially when you can buy her a new car or take her to a fancy restaurant with your earnings! In the case of you gals, you can always remind your husband that you treating yourself to a shopping binge or the works at the local beauty salon with your own money so he can leave off nagging you about going overboard spending.

I sincerely wish you all the very best of success.

Dan

[Bill Cara note: I don't want to quibble here T3d, but this writer is confused.

Re: "Investors generally have a longer term view of the market".

This is a statement that serves no one any good. If you are discussing capital markets, we are traders of prices. Full stop. If, as investors, we invest, and we do, it's in ourselves and the time and money commitment we make to studying the market, or in selecting a fund manager, etc. We also invest in material things to own, like houses, cars, computers, etc. We invest in intangibles like our children. But, as this writer is discussing share prices, we are all traders of prices. Some of us are long-term, some short-term and some in the middle. That still makes us traders. The notion of investing comes from the sell-side who would like us to buy what they are selling. So, this myth of investing has gone on for years unchallenged. Since I worked on the sell-side for years, and have a brain that I exercise daily, I will challenge anyone who calls some of us investors. When Warren Buffett buys control of a corporation, he is investing. Trust me, there are very few Warren Buffett's in the world. The rest of us are traders, some of us resigned to perpetual disappointment because we don't understand that what it is we do.]

Not that anyone cares, but I found the Donald Duck cartoon online. Better even than I remembered.

http://www.youtube.com/watch?v=DMx_dYC5WYI

Watching this market play out seems like a theatrical version of "Lord of the Flies".

Seamus, when I look up the AEM put string for September, if starts at strike price of 65 (AEMUM) per Fidelity.

I’m not following your trade here, but I’m very interested in this concept and want to follow this trade for learning. What is the 55 put symbol you used?

TIA

PookieChicken: exdiv, buy 1 day before, sell next day and div is yours as settlement is T+3. I’m 99% sure this is correct.

Telestar

I just shut down temporarily on my other computer (trading) . . have to run out for a short 10 minutes . . . I'll get back to you when I return.

Traders manipulated oil prices - U.S.
Regulators claim firm attempted to 'bang the close' by amassing large positions just before markets closed.

http://tinyurl.com/6an2wy

Just for some humor check out this headline on AmEx's earnings miss:

"Rapid-Growth Pangs Hit AmEx"
http://tinyurl.com/5awyce

"Like, there was soo much growth our earnings declined!"

Uhuh.

How about "we got on the band wagon of giving anyone with a heart beat a credit card, and now we're getting burned"?

That would seem more accurate.

"I know there are some here who are trading this intraday, but as I said yesterday it looks to run higher before it hits resistance."

SKF has a gap to fill at 160.

Telestar

Symbol is AEMUK.

Brokers have to update their system to keep up with the option symbols, especially when a stock trades over a wider range than expected and when there are options listed. If you call them, they usually add it to the database.

re BA entry - as much as I like this company fundamentals long term I am waiting for a much lower entry point perhaps in the 40s. The weekly chart does not look healthy now. (This is BTW a LT trade for me on a timescale of a full business cycle.) I've considered writing puts with the strike price in the 40s but the premium is not worth it. However if we have a market V-bottom in the next 6-mo or a runaway hyperinflation I am going to load the truck with this one.

[Bill Cara note: While I have been very positive on BA for the long-term, the present weakness might represent very serious concerns regarding delivery of the Dreamliner, and the lawsuits and penalties that situation might lead to. Don't forget that when Boeing went out to sell this plane, under Harry Stonecipher, they offered quid pro quo deals that resulted in massive contracts being let to other countries. It could very well be that some of those contracts were bad ones, and now Boeing management is no longer the master of their domain to the extent that James McNerney would like to see. Nevertheless, I still like the company and will be seeking a cycle bottom before buying the stock.]

ksobo2000 said:

"SKF has a gap to fill at 160."

Of course, EVERYBODY sees that on the chart.

I don't think we get their in a straight line. Maybe a run to the $150ish area in the next 4-5 trading days, a sharp pullback, and then a move back up to fill that gap.

But then, it largely depends on the actions of the govt. and the PPT.

It should be interesting, regardless.

proud papa wrote:

How about "we got on the band wagon of giving anyone with a heart beat a credit card, and now we're getting burned"?

A long time ago, back in the 60's when some of us were very young, believe it or not, credit card companies use to send out credit cards unsolicited to the public. One day it dawned on them that this may not be a good idea. Duh!!!

Sometimes those marketing people just don't get it.

wow. VLO is getting crushed. i bought yesterday at $34 and change and it's down 10% from there...that on top of an already 60% drop from it's highs. kind of feels like the banks of 2 weeks ago before their 50%+ rally.

Ford - Now was that a surprise?

Banking index is falling apart now. Rumors abound about WaMu derivative trades and how they are affected by a debt downgrade. Implication is that a derivative meltdown might be triggered. Rumor only, but indicates that the lack of transparency is killing the markets as no one knows the true liabilities.

Anybody going to buy WM today or tomorrow for a government bailout bounce?

SRS and SKF doing great for me.

Bill said: “we are traders of prices. Full stop.”

Bill, I agree completely with this statement. In the end, it is the difference in price that determines profit and loss.

God Bless those among us who want to buy and hold and try to catch falling knives, but it’s not for me.

Seamus, thanks, called fido about 40 minutes to add. You must have a really fast broker.

WM is a pure gamble, IMO.

No way I'd touch that from the long side at this point.

Ron Paul Housing Bill Commentary: All Credit Card Transactions To Be Reported to IRS.

http://www.campaignforliberty.com/blog/?p=235

"Finally, buried deep within the bill, and not mentioned in any MSM source that I am aware of, is the provision that every credit card transaction will now be reported to the IRS. How this fits in to the housing crisis is anyone’s guess."

[Bill Cara note: Well it started with using credit cards for offshore gambling purposes, they say. Then there was a concern that credit cards were being used to move money offshore that was not being declared. Next it will likely be that the cards will not be usable in foreign countries at all, that Americans will have to register the funds they plan to spend or invest outside the US. And, I suppose, the transaction slips will be used by the IRS to determine how a taxpayer's spending and lifestyle stacks up with their tax records. Should the government keep this up, America will become an island and more people will seek to leave than visit. I don't like where this is going..."

From the Wikipedia page for Lord of the Flies:

"For a time things on the island are civil, where all the boys worked toward building shelters, gathering food and water, and keeping the fire going. The one goal which constantly gets sidelined is keeping the signal fire going as some of the boys, the 'hunters', led by Jack, focus their energy on hunting the wild pigs on the island. The children's belief in a "beast" on the island also creates a problem. The children begin to split into two groups, based on the existence of the "beast". Ralph attempts to disprove the existence of the beast while Jack exploits the belief in the beast to encourage his group of 'hunters'."

Bailout is already priced in and it will do nothing in the long run. The problem is trillions in bad debt and the government can't backstop that without triggering hyperinflation.

People on the street are talking about WaMu failure. All you need is perhaps 2% of depositors to withdraw their money and the bank will fail. It is all about CONfidence, and that is mainly what the 'bailout; is about - restoring confidence for at least a little while. Slow crash is much more palatable than a fast one.

As Bill says, and you see today, without transparency there is not going to be a sustainable recovery in the financials.

ALOHA !!

I originally wanted to post this just for the chart on DEBT/GDP, but as I read the attached article I believe this guy has some valid points to raise regarding a "monetary crisis".

Link: http://tinyurl.com/6df72v

There is a point where all the debt in the World will not impact GDP. It goes back to economic basics, you can't borrow your way to prosperity! America has been allowed to do this to ridiculous debt levels due to our World Reserve Currency status. This sort of "privilege" cuts both ways and now we are feeling the pain on the other side of the cut! The supposed free ride is over ...

Lose the debt!

NOT.V +.40 @ 3.18 (+14.4%)

Greetings from Chatham, Mass.

Boy am I tired of being on vacation! Other than one phenomenal meal at Cape Sea Grill in Harwich, and another pretty good one at Front Street Provincetown, I'm bored and am looking forward to coming home and trading. When I'm not trading I don't really feel alive. So hang in there with this market and I'll see yall next week. My sis brought this laptop so I've been checking in on your posts.

Today's selloff seems to be a simple profit taking and exhaustion of buyers after the recent crazy rise of the markets, since the oil price didn't rise much today. Hence, I am buying some more VLO now, UAUA, T, and TBT. I think today is the chance to get good things cheap.

DavidV

Out of SRS : $97

Missed getting out of SKF with a limit at $130 and it touched it. I might just hold until next week...

b0ss

You'll quite possibly get another chance to exit SKF at or above $130 today if that's what you want to do.

I'm holding for more upside.

NOT.V +.59 @ 3.37 (+21.2%)

Anyone else following FXM and FXA? These things seem like a sweet place to park unallocated capital. Their main moves might be finished though :(

David - I doubt buyers / bottom pickers are driving this market. To me it looked like a short covering rally - a sharp inverse bear market correction. Now it seems like a new bear raid is coming.

Seamus said
"AEM

Just sold 10 Sept puts on AEM strike 55. If "put" to me, cost will be 51.80. Otherwise, pocket the proceeds."

I just sold 3 Sep puts on AEM strike 55. If "put" to me, cost will be 51.80.

I normally do not follow other people's trades, but I think having money on the line is the best way to gain real experience. Now let the learning begin.

I tried buying some NOT.V today, but TDAmeritrade didn't recognize the symbol. It gave me the NOSOF symbol with no bid/ask price, just yesterday's close and volume.

Out of SKF @ $130

All cash except 500 shares of WGW

What's the news driving NOT.V? I had just bought another 10k shares @ $2.86 a few days ago. It's a pleasant surprise given what's been happening with the miners lately...

[Bill Cara note: smart money may have driven the stock below $3 to set off a round of margin calls and forced selling. Pierre Lassonde is in this stock to the tune of 1 million shares at $4 and 1 million shares at $5, and Pierre is probably the world's best trader of junior mining/exploration stocks. The company has five drills on site and the success rate is 50%. Their financial agents are asking them to put in another 5 drills. Traders will be happy I led you to Noront early on.
http://finance.google.com/finance?q=CVE%3ANOT ]

NOSOF is the US "pink sheets" ticker. NOT is the ticker on Canada's Venture Exchange.

You can get realtime pricing info (& charts!) for free on both Canadian and US stocks via vantagewire.com.

IB users can purchase NOT.V without having to subscribe to pricing info; you'll get a warning that you should have pricing info, which you can get from vantagewire or Fidelity; but your IB trade on NOT.V will still go through. They buy for you on the Venture exchange after first converting some margin $US into $CAD.

OG, I purchase (and sell!) Noront Resources in my ETrade account. IB didn't appear to allow trading in NOT.V or NOSOF when I first checked.

Do you know what news drove the jump?

I bought some HOV and LEN today after they fell so quickly. It's a bet that the Fed or Paulson will say something tomorrow that will cause a partial recovery. These definitely are not LT positions. (Although I wish I had held FRE last week for a couple more days....)

[Bill Cara note: A drill hole takes three days, and the core, in this case, shows the miners evidence of value or not. It takes the lab a couple months to complete the assay results that are reported.

I suppose there has to be some redeeming features of working in the James Bay lowlands where the mosquitoes are as big as wasps.]

Anyone holding SKF overnight?

Why are people buying junk when the good stuff is on sale?

[Bill Cara note: The usual reason is that stocks are sold, not bought. Thankfully, (most of) the people in this Community know better.]

Also buying now ESLR and SWC.

DavidV

T3d - Thanks for the clarification, I believe you're correct on ex-div/div.

I looked this up, to be certain:

EX-DIV means EXcept DIVidend. The ex-dividend date is two stock business days prior to the record date. To receive the dividend, you must own the stock on the record date. You must buy the stock at least one day prior to ex-div date to allow for the three day closing. If you sell that stock on the ex-div date or later, you will receive the dividend.

My idea - Perhaps a purchase two days prior to ex-div date provides some degree of insurance.

http://tinyurl.com/5ow85w

Photogray

SKF goes higher from here, IMO.

I'm holding for higher prices.

RE: SKF

I think it's possible we'll see $135-140 tomorrow.

But it's just one person's opinion, so take it for what it's worth.

allen - In IB, specify NOT as ticker and VENTURE as exchange. It's there. Can buy & sell, no problem. (I've done it; exited at 7.38 last time up.)

SiO2 - Great info. However, is the "daily change" a % or a $ value? For example, GOOG is down around $12, not 12% today.

Thanks, OG.

Number2: Why buy junk? To make a little bit of extra money. For example, I earned 24% on my FRE last week. I don't think one earns much by holding the stock of "good" companies in the past few months....

Ok, I've got all the ESLR I can after today (added some more to my 401k). Thank you to the market and the coal state politicos in Washington, who have have provided an opportunity to establish a cost basis that I imagined impossible just a few weeks ago.

Congrats, allen. I am impressed by anyone able to squeeze money out of this market these days.

[Bill Cara note: Cara 100 companies Qualcomm (QCOM) and Nokia (NOK) agreed to end their legal battles over patent licensing, which is likely to bring big benefits to both companies and affect other players in the cellphone industry. The shares of both have been on a rocket today, especially QCOM.]

Telestar3d

AEMUK—take it by your post you sold 3 @ $3.20.

Needless to say you should have a plan.

There is risk in the trade.

If gold should slip below 800, I think AEM would be easily below 50, maybe 40. IMO. You would still have to buy 300 shares (3 contracts) at a price of $55 or $16,500. You should have resources (money) to cover this cost. Your actual cost would be the 55-3.20 (put selling price) or 51.80 and you would be under water as the shares would be under 50 in this example.

On the other hand if the trade gets away, you can always buy (to cover) the puts back, at a loss and then would not have to buy the shares. (Some brokerages allow you to set profit exits and stop limits thru brackets at time of entry or later).

If AEM increases in price or stays the same or above 55, time decay will lessen the price and you’d have a gain if you wished to exit before expiration. Example, put price decreases to $.50 as AEM increases and expiration is much closer. You could then cover (buy back) and your profit would be$ 3.20-$.50 or $2.70 or $810 (3 X 270).

Of course, if it stays above 55 by expiration, you retain the proceeds from your sale.

I think it’s important only to sell puts for companies that you know and are comfortable holding the shares. Good luck!

Proudpapa - Rail - What you said + all the coal going overseas. Weak USD makes for cheaper US coal.

What an ugly day!!! My port is mixed, but parts of it went straight back in time to July 15th.

Sold 2/3 of my ryder puts, with stock down 15% in two days, couldn't help myself. I'll let the last 1/3 ryde for a long while. Probably sold too early as usual...

Bought one lone put on Union Pacific (Jan 80 for $8.70) to keep my eye on it.

Amazed at the difference in spreads. over 10% diff between bid/ask on R and only around 3% on UPN. What gives? Liquidity/open interest? Seems to be a lot more on UNP...

"SKF has a gap to fill at 160."

"Of course, EVERYBODY sees that on the chart."

yeah, and everybody knows gaps ALWAYS get filled, right?

c3, The value shown was daily $ change, now it is daily % change to match the heading. Thank you, good catch.

Hey HB&B, where's your abusive shorts rule now???? Congrats to SKF surfers today! Woulda made shark proud.

Aurelian - just wrote the Ontario Securities Commission asking them to investigate the takeover of Aurelian by Kinross.

Why would Aurelian have accepted Kinross' offer right away, rather than gin up a competing offer?

Come on, Caristas, let's make a ruckus !

SiO2 - Thanks for your Cara 100 site. I can't see the last row (under VIP, I assume that's the last) fully, just a little yellow to let me know there's something there (using Firefox 3). Also, wondering if it would be possible/practical to include the RSI values.

Jock, I'm in Aurelian in a small way (and in the black), in part thanks to your posts, so don't be upset about this, but I wonder how many people who rejected Barrick's offer for Nova are now regretting that decision.

losed SKF position @31.2. Reason: The GSE bill passed Congress and the Pres. will sign it as soon as he finds a pen. I know Paulson said he has no immediate intention to use the money authorized to buy FNM & FRE stock - that the authorization is for some future need. I just don't believe the man. He sells snake oil. NOW he holds money earmarked to buy FRE & FNM stock any time he sees fit and he could see fit at any time. ANYTIME AT ALL.

Thats closed not losed. Jeez

The Senate will wait until Saturday to pass the Housing Bill. I got out of SKF for the same reason lessmore. I think we might have a week rally on the back of the bill.

thanks for the responses on BA... I think I'll wait til it sees the 50's.

Mmmmmh. Bill, you remind me of the guy in the movie "Pi." Well, without his eccentricities.

[Bill Cara note: aha, but I'm not having headaches, and nobody from Wall Street wants to hear from me...

http://en.wikipedia.org/wiki/Pi_(film)

btw, I just tuned into Cramer last hour and Kudlow this hour. I lasted, in each case, less than 30 seconds. Cramer is an interesting marketing experiment by CNBC to see if the average American has an IQ under 80. Kudlow, I believe, needs to get psychiatric help.]

ALOHA !!

Jock ... Maybe Aurelian is doing its shareholders a favor by accepting this offer. It will be interesting to see what sort of unforeseen country risk Kinross may have exposed themselves to.

I have no ARU shares ...

David- i see you're back in UAUA as well, undoubtedly with a much lower basis than mine (bought two lots today, at 8.25/7.84 for a 40% position at 8.05...if i had been around when it dropped below 7, would have gone to 60%)...let's see which one of us has the patience to see double digits LOL...seriously, last night i had visions of it taking off to 15 without me...today i had visions of a nosedive back to 6...invariably early, but buying weakness and selling strength allows me to ride out the turmoil...

vinod- if you're holding 30 contracts of OEBTP, you must be taking the family out somewhere tonight! that thing is a rocket either way...5.80 yesterday and 13 today...i walked away happy with a 48% gain, you must have something in the neighborhood 100%?

India/air transport/financials- the entire week's gains disappeared today...if you're not trading this market you may as well be catching a movie or cleaning out the garage-> it's pointless putting yourself through the emotional ups and downs...

vinod- correction- i had an 18% gain in the OEX puts (not 48%)...

2nd
here is what i had
by luck did good
Sell to Close Put 5 Contracts of -OEBTO
Details Filled at $9.00
Sell to Close Put 5 Contracts of -OEBTN
Details Filled at $8.00
Sell to Close Put 5 Contracts of -OEBTO
Details Filled at $10.50
Sell to Close Put 5 Contracts of -OEBTN
Details Filled at $9.00
Sell to Close Put 5 Contracts of -OEBUN
Details Filled at $16.00
Sell to Close Put 5 Contracts of -OEBUN
Details Filled at $16.60

and I brought
Buy 100 Shares of SNDK
Details Filled at $13.50
Buy 200 Shares of TSO
Details Filled at $15.50
Buy 100 Shares of T
Details Filled at $31.60
Buy 1,000 Shares of BONT
Details Filled at $4.77

2nd
I mention Indian market for trade
and IBN did go up 30% in 2 days
to hold long term any stock now is toxic

vinod- you're too much, man! let me know when you decide to get back into OEX calls...

I plan to take a break and stay away from market for a week. but, hard to it

2nd
I like to let you know about OEX. Trade
But worried about other people who might play it and lose it
I do not want any one here lose money because of me. This site has given me a lot
You know that this is very dangerous and risky trade
And one can lose all

i learned that last may while on vacation in hawaii-> there is no break from the market...

[Bill Cara note: I learned something 30 years ago back when the Toronto Stock Exchange had a floor and floor traders. One of my friends was a pro trader whose wife lived near Palm Beach Florida. Frequently he would take off to see her in Florida. I asked him--a pro trader using his own capital--how he managed. Easy, he said, "I just go to cash. I'm 100% in cash every Friday afternoon. I can come and go as I please."

The thought of that kind of independence was so appealing to me back then. Later, I discovered that if we don't have it, we're doomed. Let no one be a slave to the market. There will always be a market. It's life we have to stop ourselves to enjoy--before it's taken from us.]

in that case, just give me a heads up followed by an email...

o.k

david- the pullback in airlines today should not come as a surprise...there is no way they go straight back up without bouts of profit-taking/backing and filling, shaking out the newly-minted weak hands along the way...the important point to remember is the remarkable change in sentiment that occurred earlier this week-> the media turned on a dime, from reports of 'dead man walking' to 'may turn a profit in 2009.' of course, i don't care whether any of the above is true...as usual, it's the perception of what may happen or not happen that drives prices...

"Short-selling" & "Mouse Money" -

I see 'shorting' as a trading derivative. Shorting inflates the volume since they trade on borrowed shares, very much like "credit". Whatever the utility of shorting may be, shorts inadvertently "expand" demand. Limiting shorts should reduce the demand - both stocks and options. This could hurt exchanges.

BIDU - Any short interests? Went up a good $50 today. It's hard to justify PE 105. Even POT is cracking. If markets point down tomorrow, it should follow even for a short time.
(disclosure - short @ 338)

2nd,

totally agree with the hard-to-break thing. We were in Kauai in December. At a museum in Lihui, we took a picture with a mountain in the back drop. The outline of it is like the trend line we have - down to the right. Should've gotten the cue

My trading day: Morning looked like a disaster. XTO crushed again... Ditto just about everything else. Made a pot of coffee and cooked a lunch for a friend. Hands off. By the end of the day, I was back in the green. Added UNG calls, GLD calls, UOY. Holding SKF SRS, as nothing has changed, but worsened. Get ou your bank implod-meter!

Head fake of the year IMHO.

After a few belly laughs from the Fast Money team as well as Kudlow (sp ? hehe), I'm online shopping for PM bars again.

Still believe oil is going wayyy higher, nat gas will take off on the next 'cane, financials are broken and will provide education for those who disagree. Maybe 1/3 of the way through the deleveraging and RE crisis, at best. Credit as we knew is gone. Paradigm change in 2006.

In the short term, the market is a voting machine, and in the long term it's a weighing machine. I just voted myself 10 lbs lighter.

2nd_ave, I thought that today's pullback in UAUA was a God given chance to jump in for those who missed its amazing rally. I think the oil price will be coming down for another month at least (we haven't even seen Iraq oil contracts make the front page news, and when they will, oil will have another leg down), and so UAUA, VLO, and the rest of the market for that matter will be moving up. As you saw, I loaded up on a lot of stuff today. I think the reason for today's fall was a simple absense of buyers, as everyone and his brother have already bought last week or earlier this week. This had to happen at some point, because the rally so far was too fast and too inviting for those who were missing it. Now we have cleared an overbought situation, and stocks can move up once again.

DavidV

c3- LOL, hope you enjoyed your time in Kauai...are you referring to the sleeping giant or another outline? the cliffs on the inaccessible side of the island are viewable only by boat or air-> that must be where stock symbols like AHM and IMB end up...

Here's a simple way to analyze whether particular Countries / Economies are either rising or falling . . .

Is the average citizen happy to take a job that adds to the national welfare instead of taking a job for pure personal gain?

America in the 1st half of the 20th Century was full of indivuiduals that were simply happy to get work ... to get "off the farm," learn a trade, go to Detroit, the miltary, D.C., etc.

Then we branched off into the service sector jobs . . . the Law . . . High Finance.

Now, let's look at the BRICs . . . plenty of people transitioning from agriculture to industrial. Happy to move to "The City" and take any job . . . all jobs that CREATE a tangible product. These things grow the GDP. The country is therefore on the rise.

2nd - yeh, I think it's the sleeping giant. Leaving Lihui, on Rte 50 heading west. You'll see it. I guess the view is better on the other side - Tiger Wood's Poi Pu Bay Golf Course :)

"In the short term, the market is a voting machine, and in the long term it's a weighing machine. I just voted myself 10 lbs lighter." - Aurator

Man it seems like a slot machine to me now. The spin is on high and there is no way to know where it might land. SKF looked so tempting yesterday and it sucks I didn't bite, but I know that I don't have the time to trade in this environment either. I've pretty much taken Bill's advice and am keeping all my powder dry until this shakes out to a point that makes some sense for me.

I feel lucky that I've done so well the past couple of years in the market compared to some people I know and besides, I'm in the process of building a rather large horse barn too. And in keeping with Kaimu's advice to stay out of debt, I'll use a sizeable chunk of that cash to finish it debt free. I'm to the point that I don't like being a saver that much anymore because my dollars are being killed on a daily basis. I feel bad for the savers though that haven't been paying attention.

So I'm going to pull some of it from the bank and build myself something I've been wanting for a while now. I'm not gonna worry about the market in the meantime but I'll still be ready to go back in when I see a clear signal.

"I'm to the point that I don't like being a saver that much anymore because my dollars are being killed on a daily basis. I feel bad for the savers though that haven't been paying attention.

So I'm going to pull some of it from the bank and build myself something I've been wanting for a while now."

right on, man...money is meaningless apart from its many uses...what you do with it defines you as much as any other action you take...

no surprise, really:

"Gosselin interviews several Nobel Laureates in economics about how they handled their own retirement portfolios, and found they made the same mistakes as the average investor. "It turns out that [retirement investing] doesn't just paralyze ordinary mortals, but also the Nobel Prize winners who came up with the theories we're supposed to use to make these decisions.."

http://tinyurl.com/59aug4

...another reminder that none of us need feel intimidated by those in positions of power (those who wield that power appropriately almost always prefer to think in terms of 'service,' not 'power')...no secret, right, that most people at the top (of their profession, their company, their society) often wonder how the hell they got there, and are amazed that people take them so seriously..LOL..

re the end of 'the summer rally:' anyone thinking 'not so fast?'

make that anyone ELSE...

Talk about a bear market in Platinum! lol
http://tinyurl.com/5atnof

mackinaw- LOL...particularly enjoyed the last line: "These predators have to be destroyed," he said. "Once they kill a human they will do it again and again." wait, who's the predator again?

Has the video game industry dug up its very own blood diamond?

"Kids in Congo were being sent down mines to die so that kids in Europe and America could kill imaginary aliens in their living rooms," said Ex-British Parliament Member Oona King.

So where's the connection to Sony?

http://tinyurl.com/6s5y8q

Re: "end of the summer rally":

If this rally is to last for a month, how else could it proceed from this point if not by having a sharp drop right about now, after 5 "up" days in a row? So today's drop is very normal. If we didn't have such a drop, it would look too suspicious and unnatural. It would seem like a blatant market manipulation by those who are changing all the market laws now, and very loud cries would have been raised. So it is possible that the manipulators have orchestrated this drop on purpose, just to show that the recent rise was not a pure manipulation.

DavidV

vinod, I hope you and 2nd and everyone else so inclined will continue to post your trades. I think we all take responsibility for our own actions, and understand that you may have already closed the trade before we even read your post. I view them as a source of ideas, may even take the other side.

Accurately forecasting a tectonic paradigm shift in real time:

http://tinyurl.com/6yd55c

~~

David V:

"...could be starting a symmetrical triangle sideways pattern. If symmetrical, then the lows for wave {b} have been reached. Then a final wave {c} rally into early to mid-August will complete, a last chance to raise cash before a "takes your breath away" decline unfolds from mid-August into the autumn. The Industrials could approach the 12,000ish area at the completion of wave 2 up in August. There is a good chance another Hindenburg Omen will surface ..." - McHugh

ALOHA !!

Goldman Sachs covered "666" short contracts on the TOCOM in the July 23rd session. Hummmm ... how appropriate "6-6-6"!!! Isn't that the sign of the Beast, the anti-Christ? Goldman added 16 long contracts making their total longs 778. Total short contracts sits at 5,603, the lowest ever on the TOCOM ...

What is Goldman signaling in the gold market?

Good morning.

One Cara 100 Ratings Change to report at this time:

GOOG - Upgraded to Buy @ Soleil

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

Have a great day and a better weekend.

David- re airlines:

moved to 60% on UAUA @ 7.20, and rounded out positions in airlines with DAL @ 7, both pre-market this morning..(fwiw) Standard and Poor ratings for UAUA/DAL upped to 3 stars/5 stars (buy/strong buy, target 7/12) on tuesday, which means nothing, but diversifying with at least positions is a good idea...

with at least TWO positions...

as always, keeping position sizes reasonable, and NOT recommending the excitement of trading the airlines to anyone...

shark- so you want to be a fund manager? good choice, man..

http://tinyurl.com/3y2whm

UAUA- the pre-market 20% off the table at 8.30...

USO down 1.5%...

Seamus: AEMUK, that’s right 3 AEM puts (sell to open).

Thank you for your expanded thoughts. I know AEM fairly well and was fortunate to be able to sell it @69.58 earlier in the month. If the stock was put to me at 51.80 that would be fine as I would view the entry as favorable. I’m well capitalized for the trade, thank you for pointing that out.

I think that gold will not trade below 850 at worst, like Bill, and some other smart people I know their number is 810. For this number to hit they would really have to rally the dollar hard, possible.

In any event, if AEM rallies I may just sell (buy to close) for the appreciation.

If AEM is put to me, and the market looks very weak, maybe I would just sell 300 AEM and close trade. I have to see what the market is doing at the time.

AEM is now down -29%, down 7 of the last 9 trading days seems excessive. If put to me at 51.80 that would be -35.88%. From there I would say worst case scenario is -50% or 46.10. If it would drop to 40, I would be very uncomfortable and would most likely have sold well before.

Anyway this is a new territory for me and I would like to begin selling puts on stocks of interest and writing calls on stocks held for income and higher rate of return.

The market is very gnarly right now. At its current rate of decline it may be put to me tomorrow.

Thanks again for sharing.

Cooking the Books: an enlightening read
http://www.theglobeandmail.com/servlet/story/LAC.20080725.RKOZA25/TPStory/Business