Yeah, well, don't take another 30 years to write those other books you talked about in the first book. Yep, Bill's setting us up for the trilogy. :)

[Bill Cara note:

I have promised two more: one will be how to select quality companies for trading in equity markets (like the Cara 100), and the other will be a detailed explanation of the trade timing tools and techniques I use. Both will be e-books, with a limited supply of hardcopy (so I get to inscribe them for friends and clients), which will be available at Amazon.com.

With an e-book, I can update it and also use current examples for teaching purposes.

But when I start these books, I'll be on a porch somewhere in the Bahamas with a Kalik and my market monitors close by. :-) Sounds like a plan.]

Good morning. Was wondering if Bill was going to make it this morning. I missed the dip in PDA yesterday. It was on the 7day RSI. I've traded this stock about 3 times this year. So far so good.

More power to you, Bill. Especially if it gets the books done quicker!!!

[Bill Cara note:

They definitely will be shorter. No more 400+ pages. Maybe 175 pages.]

Where's 2nd,

It'd be just like him to have picked up UAUA this morning at $9.35 and just sold for the day.

Got CLNE on pullback into 17, stop under 16.80. If stopped will look for a firmer support

UAUA- out at 10.13...

O.K. 2nd, what did you get in at?

CLNE, half out 17.45, stop trailed to 16.95 for the balance

Vadym:

CPST popped on shipment news of it's 1st big turbine

nemo- i bought three aliquots yesterday, at 10.40/10.03/9.73 for an average basis of 10.05, so under the circumstances (Gustav expected to strengthen), i'm lucky to get out with a minor gain...

Yeah... missed it while busy with CLNE... so far it pulled back from 2.80, with high 2.82 at 08/12. Hard to tell if it gets any follow through, I prefer to play sneaky moves before the news and then dump into spike caused by news. If it fails to break the resistance and drops all the way back, not interested for now.

shark- i DID know a meteorologist, who was in the PhD program at Michigan, then moved to Boston for post-graduate work at MIT, before moving back to Taiwan in 1981 with his wife (out of Harvard Law)...how we met: i played a composition of mine at a Chinese Students Association party (1974), got up to leave, then was approached by this guy with hair down to his shoulders and tinted glasses...we started talking, he invited me over to listen to some music, and i think i've already posted somewhere about him introducing me to the allman brothers, van morrison (i made a joke about brown-eyed girl, he laughed and said the guy's come a long way since then-> i play 'san anselmo,' 'green,' and 'heather' off that album all the time when i want to go back to '74)...

but hey, back to KRY...small position at 1.05...

SHarkster,

Think you'll need the KY for KRY?

CLNE, 17.50 is broken, new high. Trailing stop to just under 17.20. Last support if 17.30 which provides logical stop placement, but stock is a bit too volatile, gotta pad it a bit

Guess this backfired on Cheney and the rest of the neo-cons.

Associated Press: China and Iraq have signed a $3 billion deal revising an earlier agreement for China's biggest oil company to help develop the Ahdab oil field, according to a statement from the Iraqi Embassy in Beijing. The deal, restoring a project canceled after the 2003 U.S.-led invasion of Iraq, would increase the anticipated output from the billion-barrel field to 110,000 barrels per day from the originally planned 90,000 barrels per day, the statement said.

vinod- what's happening...too busy making money to post?

out 1/4 more CLNE at 17.69, stop to under .30, offering last portion at 16.95

offering last portion at 17.95 of cvourse, not 16

Typing with an accent again, Vadym?

don't I always

AN AIR FORCE RECONNAISSANCE PLANE HAS FOUND MAXIMUM 700 MB FLIGHT
LEVEL WINDS OF 67 KT...CORRESPONDING TO ABOUT 60 KT AT THE SURFACE.
THIS SPECIAL ADVISORY IS TO UPDATE THE INTENSITY FORECAST TO
REFLECT THE CURRENT AND FORECAST INTENSITY. THERE HAS NOT BEEN ANY
SIGNIFICANT CHANGE TO THE TRACK FORECAST. THE STRENGTHENING OF
GUSTAV HAS PROMPTED THE GOVERNMENT OF JAMAICA TO ISSUE A HURRICANE
WARNING FOR JAMAICA.

THIS SPECIAL ADVISORY SUPERSEDES THE ISSUANCE OF AN INTERMEDIATE
ADVISORY AT 800 AM EDT.

in addition, NOAA is now posting advisories about Tropical Depression 8, headed towards FLA:

http://tinyurl.com/3qfqe

UAUA- JMO, but i consider the (unexpected) weakness in crude this morning to be a selling opportunity...may be able to buy the airlines at better prices next Tuesday...

Hi Bill,

I would love to buy your book but you don't let me to buy it. When I'm trying to do it I receive the following error message: "We're sorry. This item can't be shipped to your selected destination."

As I said in the email I sent you, I live in Europe, and I want to read you book, but first I have to buy it.

I remember you said you want BillCara.com to be a global community, but I wonder why I can't buy your book from Amazon.

Many Thanks,

I would think the airlines should weaken into tomorrow. Do you think the weakness in crude is just profit taking ahead of the storm? Or, will there be limited movement in oil because of: 1) fundamental weakness in oil; and 2) indeterminate effect of the hurricane. Makes me wish I could be trading on the European markets Monday night.

Out of 500 UAUA $10.35(bought end of day yesterday @ $9.87)

Looks like oil is falling a bit today. I didn't see that coming or I would have loaded up airlines this morning. I was going to short the USO if oil got close to $122...

Trailing CLNE to under 17.50 Takes to long to break this .70 - .80 range, maybe needs a rest

Lugopt:

Do you have paypal? If worse comes to worse, I'll figure out how much it costs to ship to you from my location. You send me money to paypal, I'll buy book and ship to you.

as if there wasnt insider information this AM
Airlines ran way ahead of NatGas data.

Done with CLNE for now. I hope running commentary is not too much clutter... wanted to give one play as close to real time as blog format allows

nemo- i think the hurricane bet is getting crowded (even cramer is warning against it, which puts all the people who trade counter to his calls in the boat)...but from a common sense POV, with Gustav on track to hit the gulf sunday as a 'powerful' hurricane, and TD 8 also headed NW, i don't see the point in holding any positions friday afternoon-> tuesday morning, unless you enjoy watching the news and losing sleep...

Shark,
Nice call on ABK. I liked it too and am in the green to the tune of 14%. Chart looks pretty good, and it looks like it could get a nice pop if it breaks through resistance here...
------------
I like Ambac right here

Posted by: shark_attack [TypeKey Profile Page] at August 25, 2008 1:32 PM [link]

lugopt - Have you tried Amazon.uk for Bill's book? Some folks have found "Lessons from a Trader Wizard" There, I believe.

so now UAUA is at 10.80...;)

THat's my train of thought, 2nd. I don't sleep much anyway.

Vadym: I appreciate it. What was the reasoning behind getting into CLNE? If you don't mind me asking?

SiO2- trying HNU.to at 15.78 for an intraday trade...

KRY- exiting at 1.12...

regarding the price of oil, there is an interesting bit on the economics site nakedcapitalism. (no it's not that kind of site)
www.nakedcapitalism.com/2008/08/eia-revises-down-june-oil-demand-by.html
Talks about the torrid pace of demand destruction and its attendant effect on price.

Vad - I very much appreciate real-time commentary!!! I was hoping for an entry on CPST, but I don't want to chase any stock (It's one rule I haven't broken yet).

Cheers!

sio2,sesamus
What are your takes with the September option activities in XLF?

nemo,

I mentioned it yesterday as a momentum/trend play. Didn't hold overnight, so when it gapped I started looking for an entry on pullback. It tagged 17.25 forming premarket resistance, then dropped into 17 on first morning rush. With yesterday's high 16.86 it was an entry near 17 with stop 16.80 (just under that yesterday's high). Then break of 17.25 set the thing in motion.

With initial risk about 25 cents, exits for +.35, +.58 and +.35 give quite nice risk/reward ratio

Vadym:

So, yesterday's high was support. Oh, I see this was a Cramer recommendation a couple of days ago.

Time to short?

8heir Re XLF option action

Someone in the know buying ahead of time?

All one sided. Big money bets it’s going up--enormous volume (comparatively to other prices) at Sept. 22 and 23 strike. (Fast Money will have comments on this and have probably taken positions).

No corresponding put volume purchases.

May be worth checking some individual financial stock options for specific clues.

FRE and FNM worked out this weekend?

GLD/SLV up 1-2%...miners flat to down...

XLF - I'm holding UYG, I anticipate financials will slither out of their hole and shed skin; so far so good.

Anybody know why GOL is such a DUD?
TIA

Interesting watching XLF on the 60 minute chart with settings cited by Pring, mentioned by blowoutpreventer and moab awile back.

Guess that could be another signal; it's also a gap that hasn't pulled back.

8heir, you could also play SKF puts, but they're even riskier.

Vadym,

I liked your play by play on the CLNE trade. How do you identify the momentum trade to act on?

Thanks

Oh, Vadym,

I bought The Master Profit Plan, they just haven't delivered it yet.

Hammer,

nothing too deep to it... stock makes new 52 highs, sharp spikes on both intraday and daily, good volume (about 5x average over last few days)... And if you are a day trader and watch Level 2 and T&S real time, you just can feel how it's sizzling

Seamus,
Thanks for your reply.
I was baffled by the open contracts in the September options in XLF for quiet a few days already. High numbers of calls @22 and puts @20.

XLF's RSIs recovering. Short term RSI penetrated the long ones. MACD is turning upward. These bodes well for upside(long term trend top @22.6, short term resistance @ 22.2,and 50ema @21.3).

But, BB, 20d sma, and 50d ema all pointing down. Short RSI(7) recovered from 30s quickly approach 60 (classical bear rally). What's more, the volume is tapering off. This portends continuation to of the down trend.

With all these said, is this a giant straddle being built in fiancials?

CPST - I think the main reason I haven't taken a position is because I might be in love with the technology... Another rule I have yet to break.

this market continues to surprise...how many bought FRE/FNM in the past 5 trading days...

Vadym replied: >>Don't I always?<< (type with an accent)

Yes -- and it's charming, so don't stop.

Vadym,

I see...thank you sir.

i dont like gold or the miner's behaviour at this point.

im out of my recent move w/ a tiny gain, it doesnt feel like the pre-cursor to a move through $850, at least not at this point.

i grow wary when ever i see the miners open strong then fade into the afternoon on stronger volume than the prior up day. gold dropped just a few dollars but barrick and the gdx took a bit of a dump on strong volume.

i keeping a finger on the trigger to re-enter, $820-825 seems like a possible base-building area of support, that must hold on any re-test before i consider getting back in.

8heir

Sept XLF options look one sided to me.

Volume on calls

strike 22 268,755
strike 23 106,906

volume on puts

strike 20 25,139

That's more than 10 times calls at 22 than puts at 20.

Thank you nemo.

CLNE momo certainly fizzles here. I missed short, didn't see cleasn setup. Maybe into some bounce. Kept away from buying pullback into 17, it was too obvious for my comfort. Indeed, it broke support and killed those who counted on it to hold - spike down was vicious.

HNU.to- ouch...adding at 14.45...

DUG recovering from sell-off over the last week and a half.

Currently still under $35 but making a strong move up after weakness earlier in the day.

AAHHHH, that was a classic move.

I went into UAUA twice yesterday as well, at 9.86/9.65 for a basis of 9.755 with a mental stop of Gustav turning WNW instead of NNW and a price of 9.30. Watched the news at 07:00ish, saw the track of Mr. G heading "wester" instead of "norther" and got out pre-market around 9.35.

So, of COURSE UAUA goes up 8% from yesterday's close!!

UAUA: out at 11.18. Even I can't believe it.....usually I screw up a trade this good.

David- UAUA hit your sell limit of 11.10 on its way to 11.21...congrats, you got it right...the Gustav trade has been a real head trip, glad to see you kept yours...;)

My first broken clock moment today, Vadym.

got into SKF at 122.75 avg - looks like I was way too soon
John

craig- ;)

seamus
I was referring to the past few days' activities.
Clearly today's tide has turn to the upside.

Could it be that Gustav is all but a bluff?

Has it ever cross your mind about trading UYG and SKF base on the respective ratios extremes with XLF?

so i held on to DTO and it's now back to break even. anyone else still holding or are they selling on this promise to release addl reserves if Gustav affects oil production?

11800 looks like resistance on the DJIA. Setting a contingent order, DJIA trades at or above 11800, buy DXD at market.

Sold my Russian/Chinese stocks on Friday and bought them back on Monday.

hmmm, crude oil just cracked down to $115 as storm is allegedly getting stronger...

its bizzaro world or jawboning bleeding out after a run-up too early.

The Q2 GDP revision is the largest one I recall. How can statisticians get it so wrong between 1st update announced on July 31 and today. Or do we see work of Administration behind this. Good way to deflate Obama's speech tonite. Clinton last night said main task was to restore American dream. At 3.3% growth rate what is there to restore??.

CLNE becomes interesting for short into this bounce, with stop above 17

Dr. Cosa, I'm not so sure it's bizarre. The storm isn't anything quite yet. Oil had a run-up into today. That report on greater than expected demand destruction probably told people to lock in profits. With a 3 day weekend what else can you do. Everybody will be drinking tomorrow. (I'm starting tonight, so if I slur my typing...)

cosa,
my opinion, posted a day or two ago - get in position for the inevitable post-storm letdown, not the hype/price runup that occurs pre-storm.

this worked even after Katrina.

BMD

RIP

MikeNYC

What are our strategies going into the storm?

Mike, I just sold my BMD at .13, so it's trading.

square1 - Re GDP revision. Jesse's Café Américain (jessescrossroadscafe.blogspot.com) suggests it's attributable to an unrealistic GDP deflator used in the computation.

"You can believe today's GDP revision upwards to 3.3% growth for the second quarter to the extent that you accept that inflation is running at an annual rate of 1.2%, which is what was used for the deflator to calculate the GDP revision."

http://tinyurl.com/5dqsdp

Excuse me Mike,

I meant "your strategies"

BMD

This is weird (http://tinyurl.com/6ad692):

"...continuous pursuit of... additional equity financing to unlock the maximum value for its shareholders"

Doesn't additional equity financind dilute existing shareholders, i.e. the opposite of creating maximum value? I know i know, being able to continuue operations does help existing shareholders, but still, thought that line read funny :)

from same article on BMD:

"- the aggregate principal amount is increased from $31.5 million to $34.5 million to accommodate a $3 million loan amendment fee;
- the applicable interest rate is increased from a variable interest rate of prime plus 9% to an interest rate of 20%;

So basically they're working with a $34.6 million credit card balance.

ouch

nemo,
I'm not playing the post-storm price movement.

As I said the other day, at the money crude puts looked good to me. But I'm not putting money at risk so it's easy to just say. I would guess whatever is one's favorite "oil down" play is the way to go.

BMD:

Now BHMNF.

They got a de-listing warning a while back. Guess it happened:

BIRCH MOUNTAIN RESOURCES LTD ("BHMNF-0;BMD-TABHDPX")
- BHMNF Move From Amex
- OTC Security Listing Eff. 08/28/2008

Birch Mountain Resources, Ltd. Ordinary Shares (Canada) (BHMNF) will
be added effective 08/28/2008.

Comments: From AMEX (BMD)

This information can be viewed at
http://www.otcbb.com/asp/dailylist_detail.asp?d=08/27/2008&mkt_ctg=NON-OTCBB

Tel: (301) 978-8095 OTCBB Hotline (NBB)

Tel: (403) 262-1838 BIRCH MOUNTAIN RESOURCES LTD (mn)
Fax: 403-263-9888
Email: jquinn@birchmountain.com
WWW: www.birchmountain.com

NATURAL GAS
UNNATURAL
Down
~9%+

proudpapa:
BMD missed a debt payment not too long ago.

Someone correct me if I'm wrong, but isn't defaulting on bonds a good way to lose a company?

I would not be surprised to see this one taken private and sold off to the Chinese or something.

They are a mess, but at the end of the day, there is a large asset.

I suspect new management is doing good stuff, but I sense a race with the reaper to turn it around.

SiO2- has NGas arrived at an inflection point-type buying opportunity, in your opinion?

..or does NGas need to hit a 6-handle?

My VLO limit at $35.5 was hit today, and my UAUA limit at $11 was hit today. On the other hand, the SKF I bought at $127.5 is down today. Well, I have just added a little more SKF at $119. Bill's comment about the market being quiet and waiting for the next shoe to drop is still ringing in my ears (as well as Hussman's expectation of an abrupt market fall in the near future).

2nd, IMO NG inventories were bad, very bad. It looks very bad in the mid term - post Gustav/TD8/TD9/ whatever else is coming. Yes with a 6 handle I'd buy it for the long term. I am no expert, please do your DD.

If you are holding HNU, I'd put a sell order at 18 and a buy order at 14.

SiO2--23million shares on UNG,
seems like capitulation event.

End of the month before a holiday buying on low volume. I have a feeling this is a making of a bull trap. Just my 2 cents.

SiO2: I play natural gas seasonality as my favourite trade. I have been scaling in with HNU.to (after having scaled out of HND) since gas dropped below $9. By coincidence, my next buy order is at $14.00, and my first scale-out order is at $18.00. I also play it with options on UNG.

For those who aren't well-acquainted with the natural gas sector, I would recommend listening to the CHK 2nd quarter conference call (archived on Yahoo!). It contains a wealth of information from people who actually are in the business, as opposed to those whose knowledge is constrained to economic modelling.

back from vacation .. lake louise in Banff is the most beautiful i've ever seen.
-------------

re Natural Gas

New Natural Gas Discoveries are a Boon for the U.S. Energy Sector

"Shale is the most significant domestic natural gas find in 50 years," Chris Ruppel, an analyst at the institutional brokerage firm Execution, told The NY Times. Ultimately, this could mean "the United States will become gas independent, and more industrially competitive versus Europe for gas-intensive industries such as chemicals, fertilizer, smelting iron and aluminum."

http://tinyurl.com/6joaqp

China's excess liquidity trap

China is awash with cash, thanks to high levels of savings, increased enterprise profitability, a government budget surplus and more foreign exchange reserves than it knows what do with. It sounds good - but the imbalances are creating hazardous challenges with significant implications at home and overseas.

http://tinyurl.com/6dpb8f

Cramer says that the American stock market is so rigged that the average person needs to get out NOW

http://tinyurl.com/6gk9l6

Yea.. and Crammer (sic) also said that the home builders had BOTTOMED in Oct 2006... and said.. BUY, Buy, BUY!!! Booooyyaaa!!

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

Yeah, but isn't Bill basically saying the same thing about the US stock market? Not to put words in his mouth, that is...

test

Gold coin shortages - another piece in the puzzle. From Bloomberg,

" ... Rand Refinery, supplier of blank Krugerrands to the South African mint, had an ``unusually large'' order of 5,000 ounces of Krugerrands last week from a company in Switzerland, wiping out Rand's inventories until next week, said Johan Botha, a spokesman for Rand Refinery in Germiston, South Africa.... "

http://tinyurl.com/57vgf4

yeah that ambac worked out pretty good. unfortunately i was asleep for most of it or i would have re-bought.

SKF- scaling in at 117.98...

HNU.to- taking off the 14.45 position at 15.76...still holding a 15.78 position...

AWP - Alpine Global Premier Properties Fund (CEF) - Have been following this for some time, but have never taken a position. Has been in a continual downward trend for many months. Now yielding 17.66% @ 8.77/share. All indicators on my daily chart have begun turning up. Not advice/DYODD. Disc: No position at this time.

Commentary on Whole Foods WFMI
http://tinyurl.com/59ff9p

seamus - AOD (+2.8% so far today) closed yesterday @ 11.55; the NAV (ticker XAODX) was 12.12. So ended the day trading at a 4.7% discount. Similarly, AWP closed at 8.61, with a NAV (XAWPX) of 9.50, for a 9.4% discount.

OG

Thanks for the update. AOD has gone up thru 30 daily RSI7 today. So has AWP. Below average volume though.

Re: CEF, that's Central Fund of Canada, mentioned by you and others in the past. It invests strictly in Gold and silver bullion.

Guys, if you look at the 5 day chart for AT&T, there is a regular volume spike at the end of business of each trading day for the past several days. Is this an indication of the computer generated trading systems of the large mutual fund brokerages?

Tanks!

I only sold the ambac this morning a little too soon:)

But hey, it's not like they send out memo's in the morning "ABK is going up fifty percent today, load up the boat".

If you did it right you could have bought a new car with your ambac profits today (and a house with the ones you made this summer). And somewhere out there, there's a guy who did just that. And one day I'm gonna be that guy.

DTO - teamonfuego - I'm holding DTO into the close, will wait to see what happens tomorrow, oil's on it's way to $80. Also holding UYG.

I picked up 300 shares of SKF at the close. This seems a bit overdone to me.

KBH worked nicely.

shark,
the guys who bought the car and house are the ones who get the memos.

So what are thoughts on the Oil/UAUA trade this weekend & next week? If oil doesn't react to the storm, how high can we fly? $12 easily, $14-15? Higher?

If oil goes down to $80, is the trade done for a while and the airlines start trading on other concerns rather than just oil?

WFMI "Here's Mackey on the buyout: “[Wild Oats] is the only existing company that [could] get into this space. Eliminating them means eliminating this threat forever, or almost forever, [and eliminating] the competition.”"

I agree, Mackey shows us all how to eliminate the competition through the process of self-elimination. Mirror mirror on the wall...

DELL down 10% after hours trading...this market cracks me up - it's so frenetic. 100% cash recently and not feeling badly at all.

Dave

WFMI - One more thing... They have a great negative dividend, compounded daily!

PNRA - Panera, as expected, came back up to give us another crack at a short position. Didn't think to check till just now, so will have to have a look at it again tomorrow...

"So what are thoughts on the Oil/UAUA trade this weekend & next week?"

reenzo- my thoughts are to either take the opposite side of whatever trade seems to be in play, or stay away from the entire trade until tuesday?

reenzo, once oil reaches $100, I'll stop playing UAUA and will think seriously about buying stocks of offshore drilling companies.

Placed a buy limit order on SKF at 110.1 and a sell limit order at $129 for the shares I picked up today at $119.

reenzo - I suspect airlines will continue to benefit from oil's decline, they are one of the most immediately affected industries. However, I would anticipate a negative exponential relationship. Anyway, LUV's fuel is hedged, because they were smart enough to think ahead.

Disc: I don't trade airlines, but am considering the possibility...., only I don't understand why no fuel hedging in an industry so dependent, and so wonder if these guys aren't really asleep at the wheel...

chinese pharmaceuticals- if there is anyone in the community with an interest in/experience with the manufacturing of (generic) pharmaceuticals either in the US or China, would appreciate an email to evadn2 at yahoo dot com...

SKF Short covering in the financials today? Also took position in last hour av cost $117.66

PTPE.OB - Anyone been following this oil co.? Got a new low on the RSI...

Placing a sell short stop limit order for MER for tomorrow, stop $27, limit $26.8

Just because Cramer said it, doesn't mean it isn't true.

Yes, That's what I read Bill as saying too.

Take a look at some of the recent headlines and then look at where SKF went.

Oh, yeah — the Q2 number was revised upward. Give me a break!

--------
New Credit Hurdle Looms for Banks
 By CARRICK MOLLENKAMP — Wall Street Journal

----------
August 27, 2008

Agency’s Head Expects Banking’s Crisis to Worsen
By ERIC DASH and GERALDINE FABRIKANT

----------
Courant.com
Thrifts Post $5.4 Billion Loss In 2nd Quarter
By MARCY GORDON Associated Press August 28, 2008

----------
Mortgage mess puts more banks at risk
Deposit insurance fund, depleted by failures, looks to rebuild capital

By John W. Schoen Senior Producer MSNBC

Even though HNU.TO ended down, I think someone gobbled up a bunch of shares from short-term / losing hands today.

After reading John Mauldin's the "Dead men walking" Outside the Box special (http://tinyurl.com/6nde7f), decided to also place a sell short stop limit for WB, stop 15.89, limit 15.8. If these stocks rally again tomorrow, then will do the same with RF and LEH.

seamus - By "CEF" I meant "closed-end fund" (as distinct from ETF or ETN) rather than Central Fund of Canada.....

Re: SKF

Looks to me that there's possible downside down to 110ish area. Volume increased today and it closed near the low of the day so it might have another day (or partial day) of weakness.

With this market, it could hit 110 by 11 AM tomorrow and end up for the day.

Grym - Bill also has stated that he believes the financials will recover, didn't he? Remember, these are the brokers who have all the tools and advantages, backed by your bazooka and the SEC, trading in a light market. The USD is going up, Oil is going down, the realestate market slide is "decreasing".

These are the guys who milk the cow every day, who's going to take HB&B down?

speaking of books,
just finished listening to "trading for a living" by Dr. Elder today during work. (mp3).
I plan on putting it on again while driving this wknd. I'd recommend it to anyone, it talks a lot about the psychology of trading, the personal control required, the psychology of different barriers, the importance of discipline, etc.
so many of the mistakes he mentions about amateur traders I could relate to.

Bill, have you considered having your book made into an audiobook format?

Chickenpookie,

If HB&B doesn't take themselves down (through a complete derivitives armageddon or something similar), I have little faith in the ability of Govt. to regulate or "the market" to take care of things.

I received my copy of "Lessons from The Trader Wizard" today. Sturdy binding, great paper quality, nice typeface - this text must have cost a fortune to publish, the quality reeks of Bill's passion for trading. Looking forward to a great weekend read!

re: ABK
Think I might try to hold on to a few issues like this for a while- maybe follow it with a stop. Back in the tech-wreck, I remember buying a few k shares of GLW for $2 and change, then getting excited when it went to $3 and selling it. Of course we all know what happened next- it went to $30 over the next 3-4 years or so... If only we knew now who the survivors are going to be!

BP - I was just considering that HB&B could decide to take themselves down briefly a time or two for a head fake in their smoke and mirrors game. I'm playing for $80 oil and whatever breadcrumbs I can identify along the way.

You may be right Mike,

I'll settle for a slightly-used Porsche and an apartment on East 82 st!

Pookster:

His book stylistically (in type face and tenor) reminds me of Porter's books (Competitive, Strategy, Competitive Advantage)

Sharkie:

A coupla' days ago you said ABK looked right here. What was it that you saw, if you don't mind me asking?

David- today's drop in NGas was IMO a good example of why taking the opposite side of a trade (aka buying on weakness) works so well...if the trade is crowded, the reaction when it sells off is pronounced and people are bailing at any cost; whereas you, being on the other side, can take your time picking your targets...what's not always clear (at least to me) is which side of the trade is overcrowded...in any case, congrats on taking the detached view, entering UAUA 10+ yesterday on a buy stop and selling today at 11+ on a sell stop...not to mention sleeping through both transactions- that's as detached as it gets..

stktrader:
Re: crystallex, Rusoro, Gold Reserves
reading your post directed to Jock last night:
"It seems to me that GRZ was not in as good a position as KRY. I don't believe that KRY management would sell cheap to the Russians and they know it; so why offer on KRY. It is also obvious to me that the Vens like KRY management and want to work with them. The Vens did not like the GRZ business plan and the "deal" that was made.

Posted by: stktrader at August 27, 2008 8:47 PM "

It is NOT obvious to me that the Vens like KRY management. Please elucidate. Why is it obvious to you?

thanks.

Nemo,

The other day monday the 25th, whatever I THOUGHT I was seeing in Ambac didn't, at the time, come to fruition. What would be more instructive would be to describe what I saw this morning that made it good and what I would have seen at around 1:15 today had I not been out doing errands and then passed out asleep.

This morning ABK gapped up on the open and drifted down some, but not too much. It broke below it's opening range but not by much and not FOR LONG, the most important criteria. Everyone emphasizes price, not enough people pay attention to the amount of time a stock spnds at a price. To simplify a concept, by trying to go down and being unable to stay there FOR LONG ABK tipped it's hand that it really wanted to go up. As it did so I saw what only experience told me was the "smell of strength", so I bought. By the time the price hit 6 bucks an upside breakout seemed all but inevitable, at which point I doubled the position. Here's where the story takes a left turn.

I rode the position up for approximately a 20 and 30 cent per share profit and sold into the first wave of strength, which was fine, it was actually a grat sale at the time. Where I went tragically wrong, and believe me I'm learning, was not realizing that on the DAILY chart the thing was breaking above previous resistance, a sign of better things to come typically. Had I not had to go to the WILTON library to pick up a book for a class I'm taking for fun at UCONN, and had I been here doing my job instead of falling asleep like a bum, I would have either reloaded at 6 a few minutes later or again purchased ABK when I saw strength coming in around 1 oclock or on the actual breakout that happened at 1:15/1:30, somewhere in there. By the time I awoke like Rip Van Winkle, ABK was at 7 bucks and I felt that I had missed out. I checked the daily chart again and saw that there was a possiblility of a further upmove, to maybe even 8 bucks I thought at the time, but I'm not good at buying into things that have already gone up a lot, it's not really my style. Remember, what seems risky is actually safe and what seems like a sure bet is often quite risky. I had missed the gravy train, the money boat had left the dock without me, and I just sat and watched it make $7.50 easy and without me.

If you check the weekly chart you'll see that if Ambac is going to stay in business, there's probably a lot left in the move, this used to be what, a 60 dollar stock or something? So I will be looking at it long, maybe it won't go up tomorrow before a long weekend, but if it starts going up according to the parameters I described above I will buy.

I don't know a bond insurer from James Bond, so I have no idea about the future of their business, but a lot of other people seem to think things will work out. Maybe Bill has thoughts about this.

Where the money is made is, if you can buy 1000 shares every time it rises 10 cents, you would have invested a total of let's see, you would have sunk about 60 thousand in and made about $12,000 for the day. Or, if you'd just bit the bullet and bought 5000 shares at 6, you would have invested 30 grand and made $7500.

Not bad for a days work. Ask Mike what the options would have done. I don't know an option from a hole in the wall.

And if you worked at Goldman and bought a half million (8000 shares) worth at an average of 6.25, you would have walked away with a hundred grand profit for the day.

Beats working at Starbucks, eh?

Otto Rock on the endgame in Venezuela:

http://tinyurl.com/5jvfw8

Rusoro sent GRZ "an offer they can't refuse" ...

In the above example that was 80 thousand shares not 8000, and I DO NOT suggest you emulate these examples with your own money unless you are either Richard Dennis or completely suicidal, or have lots of money to work with. Breakouts can fail, Bids can disappear, and you don't want to be holding the bag at the top of this game of musical chairs. In the Ambac example today, this was one of the best rallys and that's why it did prove to be a big moneymaker for those who participated smartly.

Notice I didn't mention holding overnight?

joey,
The Venezuelan government could have kept the status quo by just letting the minister of the environment dismiss any opportunity of KRY ever getting the permit they need to begin production. But what did the government do? They told the minister to review KRY's appeal on Ms. Ortega's statement that there would not be any mining in the forest which she included KRY and GRZ to be a part of. Now what has happened. The ministery now says the KRY is in good standing on all of her points of contention. Most agree that the permit will come before the year is out. Now as to Jock's thinking, and I do pay attention to his comments. KRY may get the permit it seeks but who ends up mining that development only time will tell. Bill has stated that he does not think that KRY has the people within the organization to handle the mining process on the scale that would be necessary to develop LC. Jock has eluded to the possibility the Russo will end up with the LC mine but why not let KRY get the permit first to eliminate that hurdle. Jock has a stock position in Russo although I do not believe that that damages his credit. KRY could have fallen off the map by now and be trading at .35 usd. But the VEN government has added new like to the company and the funds/institutions are piling on.

Rusoro Mining(RML.V), not Russo to the above post.

ABK - I will be placing a bid on 80k shares tomorrow (Ok, I'm kidding!)

Bill - "the book is getting five-star ratings only" The book is getting the maximum, five star rating.

Chickenpookie,

heh, I think he meant 'only' as in 'exclusively'

Looking at TIVO tomorrow.

Good speech. You all are gonna laugh but I will vote for this guy. McCain's the wrong man for the job.

shark- you raise an interesting question...

as you know, one of my primary 'rules' is position size (keep it small)...but i'll admit to wondering occasionally about throwing all of my 'weight' into a position when conditions are right...i can think of two in the past week- (a) the morning of 8/21 when UAUA dropped to 10.58 at the open and i 'knew' it was going back up, and (b) when HNU.to hit 14.49 as Tropical Depression Gustav was in the process of becoming a TS...both times i could have made my year in a single trade-

those opportunities are only available if one watches the market constantly- it doesn't work if you can't 'see' the play and act on it immediately...

i can't quite reconcile going all in as 'responsible,' yet when i analyze how well these trades play out they seem more responsible than the daily grind of making smaller plays...it would be easier, of course, to take these kinds of position sizes with OPM, which explains some of the moves you see in hedge funds...+9-*+

Hey BP, thanks for the welcome

During Katrina, our normal 3 hr ride to San Antonio only took 6 hours and I felt very lucky at that.

Bill called it....."it's not about me, it's about you." A paraphrase of Bill's, "it's about us stupid."

Amazing speech, actually exceeds Reagan's Shining city on a Hill speech, yet told you he was working for you.

I'm interested to see how the polls work. Obama fills a stadium with 75-80,000 people and McCain struggles to fill 10,000, yet the polls say they're tied? We would call that a divergence.

[Bill Cara note:

As you all know, I have no dog in the fight, and I look at these matters with independence and objectivity. But, but, but... I have never heard a better crafted or more powerful political speech. Democrats must surely be happy. Now the other side takes the stage. But just like the London 2012 Games will be a tough act to follow Beijing, I think the Republicans are in the same boat after what I saw and heard tonight.]

Per Bill's WIR "The price of oil lifted a record +$5.62/bbl on Thursday and fell a record -$6.59/bbl on Friday. The casino has taken over the global energy market." I wonder if we'll see the reverse this week?

jk, thx for the China link and nat gas link. I think China holds the key to my love/hate relationship with POT. Also, on the shales, I'm hoping the Marcellus shale play comes through. It will probably be more expensive to develope but its certainly closer to the large population centers. I'm looking at either XTO or CHK as a possible future purchase. One of my goals is to sit down with Bill's book and plow through the annual reports of some of these companies.

2nd,

All I know is, successful traders seem to know intuitively when to step on the gas size-wise. When do they do it? When the conditions are right, and it is successful. How do we know? Because THEY are successful. Kind of circular, huh? Don't ever go "all-in". No one does that too often and lives to tell. But if you've got a million cash and your normal position is twenty thousand there are times when tripling it is justified. Just make sure that when you do, it's during one of those times. And of course, the more you have in, the quicker you have to be recognizing IF you are wrong and having the discipline to take immediate action. If you even SUSPECT you're wrong, sell at least half right away. If the price stagnates, get out and reconsider. Get what I mean? A lot of people don't realize that if the price doesn't move fairly quickly in a trade, that's an invitation to others to do what you have done. To buy where you bought or to sell where you sold, and in this manner one courts potential disaster.

Above all, let yur informed intuition be your guide. We all know you have a good one. We are all presented with the same opportunities to take actions that are either rewarded or punished. You've seen the work of the masters...it's right there on the timestamp. There is no finer feeling than becoming what you are seeking. Be the animal you hunt. The psychic rewards of doing everything right are tremendous. But is something this cool and this profound susceptible to being conquored in a few short months or even years?

You know those Asian guys who make knives, or make great Soba noodles, or practice the martial arts? If you ask them for the truth they will tell you. It takes a LIFETIME of total dedication to even attempt to master this thing, or anything really that's worth doing. But total dedication is easy when you've decided to dedicate yourself totally.

I'm not preaching to you specifically, just ranting in general.

Anyone have any thoughts re rubicon minerals, RBY?
Currently long RBY, SWC, AUY, BMK,GWG

I consider myself an independant and a social liberal and a fiscal conservative. I thought Obama's speech was great. Obama's lack of experience doesn't alarm me as much as the fact that McCain is a loose cannon and the fact that McCain pals around with that devious little troll Lieberman.

re: RBY
Been watching that one myself photo. Fantastic drill results. I'm not an expert in the sector but Rob McEwen is, and it seems like you could do worse than placing bets with him - though I took a bath on UXG ;( Looking at the chart 1.50 range seems to be a major support/resistance level (that it just punched through without pause)- I'm hoping it pulls back a bit closer to this range before trying an entry. One idea would be to take a small position, and expand it if the retracement happens.

Long AUY, PLM, SLW, PAL, MNEAF, OZN, USA.V, GG, DGP in the sector

mcm, I too took a drubbing w/ UXG. I agree re McEwwn. Bill says choose the jockey not the horse. I took a 1/4 position right after RBY broke thru on tuesday. Will probably hold to see if its got legs
peace from north puget sound

Placing a sell short stop limit order on ABK, stop at 7.2 and limit at 7.

Thanks Sharkster:

I really appreciate your review of the trade.

I would guess ABK's move yesterday was predicated on MBIA's signing of new business, not necessarily the viability of a monoline's business model.

But it does make me wonder, taking Kaimu's theme about the "C" word, whether HB&B can let monolines go away.

It would seem the ability to create confidence depends on the ability to have parties (counter-parties actually) on which to distribute risk. How else can you continually create debt(with it's inherent risk)without packaging it so that it makes other's want to buy it. The monolines play an important part in that eco-system. Why would Buffet create his own monoline otherwise?

(Damn! I'm always behind the curve. DENSA)

Anyway, and again, this brings us back to the counterpointed argument between Kaimu's financial Ragnaroc and Bill's belief the fiat based central banking system will survive.

So, as you stated Sharkster, about ABK having been a $60 stock, and if it is an integral part of the HB&B cabal, then they have to survive in one form or another just so the debt based system can continue.

re: Obama's Speech (or anyone's — any party)

Believe none of what you hear and only half of what you see.

I already voted for this guy for Illinois — there is nothing, absolutely nothing to show for his time in office. He is a smooth talker. I give him that.

Think about what he says he WILL do. Then think about the odds he WOULD/COULD.

caveat emptor!

the election:

This is all about imagination...

Obama imagines, "WE are (he is) what we've been waiting for."

McCain has no imagination at all.

Once again I have no one to vote for — only a couple to vote against.

Looks like the Europeans are playing the same game with the financials.

Next announcement: cutting rates. Germany will not be happy, (dirty Rottenfratz!) but the Spanish and Italians will celebrate.

http://tiny.cc/JN5Yn

KRY,
Based on the cup/handle on the daily, an upside breakout to 2.13 is the technical move after 1.38 is taken out on strong volume.

nemo,

You just gave a much better analysis than I ever could. I don't know a monoline from a monorail. What I DO know is, when you look at a 3 year weekly chart it looks like a ride at an amusement park (not a bad analogy actually) that's come down and almost hit the ground, it's passengers screaming white-knuckled, and having just averted disaster, the trolly has begun a rapid ascent based perhaps on nothing more than inertia. I am not recommending this stock as an investment, just a one that's been highly tradeable. Emphasis on HAS BEEN. What has become obvious usually ceases to work.

Now how about this VP pick by McCain? Very cagey picking a woman. I felt after her speech that Obama'd made a mistake picking Biden, not Clinton. Now, in typical Republican jujitsu fashion, Rove and company capitalize on the mistake. Obama's chances of getting elected just fell by about half, but I'm still voting for him. The brilliant thing about the hilary pick would have been, all those old broads in flyover country who were comfortable with Clinton but not with Obama, now have a "legitimate" choice. And of course, it would have been historic. She had earned it, I have to say, though as you know I blame the Clintons for dropping the ball and squandering their mandate 15 years ago. If Hilary and Bill HAD passed health care reform back then, how much more ammunition would she have had in this fight?

shark,

Re: Gov. Sarah Palin as VP choice for McCain...
interesting life story on wikipedia.
And somebody's already entered this morning's secretive flight from AK to OH for the announcement.

conservative street cred: check
crossover appeal: mmmmm....no
Marijuana use and admission: check

Question is, will she do a Quayle on the podium when she's introduced?

good trading to all

Good morning, sports fans.

Here are your Cara 100 Ratings Changes:

Upgrade:

RY - to Market Perform @ BMO

Target Price Lowered:

DELL - from $28 to $26 @ Needham
DELL - from $30 to $27 @ Friedman Billings

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

To our American members, have a great holiday weekend. Regards to all.

Well, at least she used marijuana. Can she spell potatoe? We will soon find out. If she comes off as a tough assed trickle-down loving bitch she's not going to help. But if she's genuinely likeable and compassionate, look out Obama.

oh wait...it's potato isn't it?

please don't laugh.

McCain picked her to precisely because the conservative base does not like Romney or Ridge or anyone else for that matter.
Purely a base grabbing ploy. After all, she is Pro-Choicelessness.

Yeah but the political brilliance of picking a female after Obama spurned the premier female in American politics is not to be overlooked.

Now McCain has a fresh-faced historical veep choice and Obama has senator windbag from the land of credit cards. Not a bad move.

agreed.
Pure Rove.

Will this move the markets today? Not!

2nd, David, Pookster, thanks for the comments on the UAUA/oil trade.

Personally, I'm leaning toward the "sit out till Tues" to buy if oil spikes.

Longer term I agree about the asymtotic nature of airline gains on oil falling after breaking $100, i.e. reactions to oil price causing smaller and smaller % swings.

Likewise long term, my thought on the US "legacy" airlines is that without further operational changes, they remain dogs. I mean, they were losing money when oil was $50, so that can't be the only thing wrong!

Geez, never heard of her before this. Nice picture of her on the cover of Vogue. Not sure how this will play out against Biden the bloviator

Airlines are oil trades...it doesn't matter of they make $$$ in normal times. It's all about the oil spike and prices. Once the trade is over it's back to selling airlines.

McCain picked who? It will take six weeks to introduce her if it's a her. I've never heard of her. After last night it's a nice try but I give it no cigar.
At least we don't have to get to know Joe Biden from scratch.
It's going to take more than indoor plumbing.

If you voted for a Illinois State Senator (or any Senator really) you voted for one of how many with the collective vote of one?....NOT an executive position with the ability to make sweeping change but one of many votes. If he was Governor and had nothing to show for it then you could say he was ineffectual, but a Senator is ineffectual by nature. With Senators you have their voting record, almost never lists of accomplishments as such. I would think involved Americans would understand this as it's part of our political structure as prescribed by our founding Fathers and Constitution....the balance of power.
The Senate, all Senates, are deliberative by nature, whereas the house is the people's house, based on population and elected more often than the deliberative Senate. That's why when you are pissed off you call your congressperson and not (so much) your Senator. It's also why Congresspersons are more agressive and reactive to the people while the /senate takes it's sweet time and has more crossovers like McCain and Leiberman that have occassional difficulties with their party base. It's the nature of the beast, it doesn't mean they are not effective.

Craig,
She has recieved a lot of buzz for several months now for being a proponent of oil drilling in Alaska.

As Governor of Alaska? How many people keep track of AK? I'm in a neighboring state and I didn't know she existed.

Then of course she will be pegged as a oil company advocate/sell out like the current VP....another huge negative as more of the same.

So we don't know her, she comes from a state with fewer people than sled dogs, she smoked dope and is a oil co sell out. If this is Rove genius then I think he's lost his mojo.
A good move if you are going for the votes of the crew of the Exxon Valdeaz.

Craig,
Get a grip! Give her a chance to say something. That is why the country is neutral about the two candidates 45/45. We want to hear from them together to really make a clear decision. Obama does not seem to want to debate McCain. Why is that? He debated Hillary how many times? I have not clearly decided myself like the rest of the country. Obama sounds good but what does it cost and who really pays for it. We clearly need change, but how much?

Okay, got a grip.
Did you see the speech? Obama's ready to debate, that was clearly and aggressively said.

For me to even listen to McCain he will need to forcefully jetison himself some significant distance from the record and votes of the last eight years and reverse the flow of his energy, fiscal and foreign policies. I'm not holding my breath.

I would love to hear McCain's answer to a few simple questions. John, where does money come from? What effect does it have on your supposed field of expertise, the military and war? What effect does the military and war have on our economy? At present he has no idea. A row boat up a creek with ONE oar, the butt of a rifle.

He is completely free to help me come to a different conclusion, but I'm not hopeful.

Good answer, Craig. I'm with you. On this election I really need to hear real articulate answers to the hard questions; not "I have a dream" nebulous answers from both candidates.

Special energy trading day:
A day to day-trade and run up the futures, and then use the proceeds to purchase just out of the money Oct crude puts.

As long as the Independence complex stays clear of damage, expect gas, especially, to drop nicely once the damage is determined to be less than h(y)/(o)ped for.

Rusoro - from the alternative universe of Venezuela

RML.V was UP 4% today, on 1.5M shares, seemingly transacted in a block, with no impact upon price at that time.

Meanwhile, rivals KRY and GRZ were down (respectively) 6% and 10%, both on low volume.

After the Aurelian debacle here in the NORMAL world, I'm expecting a 10X from the Russian/Venezuelan world.

(disclosure: I own rusoro)