Good morning.

There are NO Cara 100 Ratings Changes to report at this time.

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

Seems like the ANALysts must be on vacation along with the traders.

Have a great day.

just moving posts to the right discourse:

"David: What medium term profitablility in UAUA?:)"

nemo- don't lose sight of the bigger medium-term picture- commodities down...

Posted by: 2nd_ave at August 27, 2008 8:39 AM [link]

UAUA- with all eyes on Gustav, it's a contrarian play...scaling in at 10.40...

Posted by: 2nd_ave at August 27, 2008 8:40 AM

SiO2- can you believe i thought long and hard about HNU.to on monday at 14.50CDN, when Gustav was just a tropical depression? i see the premarket bid is now at 18.26CDN...

2nd, that makes two of us. I had it lined up at 14.45. However, I bought UNG calls instead on miad's call on Skype. At the time Gustav was Tropical Depression 7. The intent is to swap the profits of the calls into puts at some point, perhaps starting Friday. UNG will go crashing down sometime. So there maybe an HND screaming "buy me" when HNU is on the 20s...

I also have a straddle USO/UAUA.

-----

Correlation for the Cara100 (since Jul 1st):

http://nexalogic.com/correlation.html

It takes a few seconds to load since it's a little big.

At the top there are also links to color-coded correlation "maps". These are PDFs that can be zoomed in. Green means high positive correlation, red means high inverse correlation.

You can see clearly the correlation inside each GIC sector. You can also see the negative and positive correlation among different GIC sectors.
Correlations of 0.85 and 0.75 are shown.

For example, GIC 15 is positively correlated with GICs 10 and 55, and negatively correlated with GICs 20, 25, 30, and 35.

also unbelievable you could have made your year loading up on FRE/FNM monday...

I was looking at FRE @ $2.75 last Friday when it hit $2.50 and bounced up. I thought it would be a good buy if it went to $2. I guess everyone else thought it was a great buy around $3...

UAUA- adding at 10.03...

SNDK- adding at 14.29...

who was it that asked why i trade UAUA? DAL down 1.8%, NWA down 2.3%, CAL down 3.6%...but UAUA is down 8%...high beta..

Interestingly, with UNG up, fertilizers, which usually are inversely corelated, are up also. Two different bets lined up against each other in a way. Sign of the type of crazy markets today.

One thing about coming back from a vacation is the number of MSFT updates you receive for XP, Vista and security. Geesh!

LCC down 11% at one time, that's why I started trading it over UAUA.

In at $6.70 LCC

I think oil might go to $122 but not a dollar more!

BTW, SI02, great work on the correlation tables!

Kudos to Si02!

Speaking of making your year in a short time period, anyone who would have purchased a basket of airlines like UAUA, DAL, AAI, LCC, etc would be sitting pretty right now.

I remember that day in July looking at AAI specifically when it was under $1.50 (because I fly that airline a fair amount) and thinking 'is this company going out of business ?'

One has to be ready to pull the trigger when the opportunity presents itself - and have cash to deploy.

small position taken this morning in HGU (canadian gold miners beta pro x2)

cash on hand to add if gold moves above 200 MA on strong volume by the miners, or add more below $780-$770 area.

good luck.

Si02....much appreciated....Thank You.

I just knew as soon as the WSJ ran the story about Gold stocks being undesirable that, whatever the reason, Gold stocks would likely be stronger in the very short term.

ToddinFL,

I believe a bunch of us on here bought the airliners. The only problem is, like me, we sold after a 40% gain instead of holding for a 400% gain!

I wonder how the market will end today?

I am looking to add 1000 more LCC @ $6.30

Shorted a little bit of JNJ @ $70.70. Cramer was talking about it last night on Mad Money as a buy. It hit the Sell Alert (trig. 2 days ago [on 2008-08-25 at $70.80

I don't have any other plays in motion.

15% option premiums on UAUA, both directions.

Haven't bought any UAUA yet. Gustav is still threatening to "explode into a hurricane" after this temporary weakness over the islands. I may wait until Friday or Monday sometime in that case for UAUA to bottom, unless things change.

Let's hope those in the path are prepared should the worst come about. Seems like the 'better safe than sorry message' never quite gets through to everyone.

DTO - Waiting for Gustav to gain strength prior to adding to position. Finally, I'm able to make lemonade from a sour storm.

I suppose some of you picked up UAUA in the upper $9 range today...

Long SLW Dec 15 calls at .85 intending to hold at least to the election. An attempt at alchemy whose ingredients are serious political uncertainty as regards the USD, a tight silver market, and inflationary responses to immanent bank failures. Good luck all.

IMO the oil report basically did nothing for UAUA positive or negative. This is probably now a Gustav story. If this ends up a category 4, I think an 8 handle is possible. Going long before the weekend...God Bless ya'

engine88 - And I'm still holding UYG; imagine the gain when this whole thing turns around!

Bought 500 UAUA @ $9.90

If the Gustav story continues to lose its gusto, then it might be a $12 dollar story if oil falls quickly!

With oil doing what it's doing and UAUA having broken south out of it's opening range, you MUST have a short bias in this stock.

UAUA- adding at 9.73...

Yeah, but 2nd is pretty damn good.

Chickenpookie - "when this whole thing turns around" could refer to anything. You mean the PM market? The US economy, the dollar? Banks? You're long UYG because you like banks? Please explain... cheers.

Nice call late last night on NDM.TO

2nd that was me wondering last week....this past several days have been a proof of concept on UAUA as one of the best oil plays out there - in both directions.

We've been hit with some pretty bad news the past few days and the market/financials have held up.

Look at WM however, 6 week chart has been straight down???

Trying to look at Visa in the RSI application. Isn't producing anything.

HOPE NOW is an alliance between counselors, servicers, investors, and other mortgage market participants. This alliance will maximize outreach efforts to homeowners in distress to help them stay in their homes and will create a unified, coordinated plan to reach and help as many homeowners as possible. The members of this alliance recognize that by working together, they will be more effective than by working independently.

HOPE NOW preserves homeownership and prevents foreclosures by:

Outreach to Homeowners
Counseling Homeowners
Assisting Homeowners

Hope now? You'd better hope. Hope like hell that you win the lottery, so you can pay off your fugazy subprime scam mortgage. Hope your job is still around in 6 months. Hope you or your wife doesn't get sick and need health care, which you either don't have or will soon be denied after your first serious illness. Hope the Sheriff stays away from your door with the eviction notice. Above all, you'd better hope that the traitors in Washington continue to debase the currency.

The Hope Now Alliance? It's perfectly named.
Just keep the hope, while Wall Street plays you like a dope, and the American economy continues to croak. (please come save us osama...i mean obama....)

Interesting, I was just watching a Gustav update on the local Tampa area news and watching the minute chart on UAUA. Seems a lot of traders were watching the same, and thinking the storm is heading on its more northerly track, over Cuba and maybe into the panhandle of FL instead of the heart of the gulf...

2nd getting in at 9.73 is looking pretty good

They've turned everyone into OIL traders...hpow many watch the OIL - USO tick per day?
Millions?

Don’t see any bottom yet, despite some “expert opinions” by talking heads.

IRX (TBill) rate still lower than Fed Funds. Agree with headlinecharts blog that we need to see TBill rate above Fed Funds as one indicator market is bottoming.

http://headlinecharts.blog.com/3748446/

Mmmmmmh. Visa probably hasn't been out long enough to produce results in the RSI

I was in Denver last week. $50m buys a lot of police officers and sniffer dogs and $1000/night hotel rooms. I also saw a Homeland Security convertible. Classy. What credit crunch?

Since Homeland Security is around $50 billion I'm not too surprised. Should be driving Lambo's around like the Italians.

Back to stocks... if POT is correlated to Gold, then doesn't that mean that TSX (XIU) is tied too, since POT is the largest market cap stock in the TSX (last time I checked anyway)

All 3 are up today.

Seamus, MSFT gives you free updates to stay current in a changing world in rather seamless fashion at no charge for a product you did not pay that much for some time ago. That sounds good to me.

Nemo re: V

FWIW, Sold some V DEC 62.50 puts @ 2.65 (VXZ) about ten days ago. Like the odds of it expiring as well as having it put to me for less than 60. Have made a similar play earlier this summer which expired and pocketed the proceeds.

Yes, not only has oil come down a buck, but UAUA is a real tug-of-war right now. Let's just make sure we're on the winning side, like the good mercenaries we are.

Frankly indicators are rising and there seems to be a lot of bullishness there. (UAUA)

"That sounds good to me."

Posted by: uncool at August 27, 2008 11:39 AM

Was thinking the same thing this morning (although I posted the impatient emotion). They (MSFT updates)are a value, no question, for a very small price when you consider. It sure beats the problems that may happen without it.

Of course, as soon as something (new virus attack) occurs, the public will clamor why they didn't forsee it.

Sort of like the U.S. Secret Service. No one notices their accomplishments in protection until something happens (usually bad, but sometimes good).

Perhaps mobile home maker CHB is moving on hurricane news?

Sharkster,

I'm not seeing particularly bullish signals on UAUA. What are you looking at?

Shark,

re: Hope Now

Congress is once again dodging responsibility. (See Money Magazine’s SEP 2008, pg 98)

Senator Barney Frank says, “Back in 1994, Congress gave the Federal Reserve the authority to ban irresponsible mortgages.” He goes on to say Alan Greenspan refused to use that authority and...

"Congress can give people authority; we can’t compel them to use it.”

BULL!  Congress is elected to do just that!

this market is nothing but computers playing w eacxh other while, traders try to sneak in/out

"Alan Greenspan refused to use that authority . . "

Not only did Greenspan refuse, he encouraged the public to take out ARMs while conventional mortgages were around 4.5%!

UAUA down 11% while CAL/AMR hitting highs

MikeNYC, good call on PNRA last night as well. Did some of my own DD last night and was ready to nibble on some puts, but alas, missed a big move this morning. If I'm lucky it'll grind down slowly like Ryder and give many opportunities to trade.

How much of this move up in oil is related to the possible hurricane ? That is, if the move is based largely on this event, then it would quite possibly be just a blip on the chart when viewed from a larger perspective and trend.

Secondly, if the move is due to the possible hurricane, my cursory observing of the projected trend of the storm from the National Hurricane Center starting 2 days ago has it now pushed further east into the gulf - and further away from the rigs.

Can anyone comment, confirm or refute what I've put forth ?

Taxpayer Alert:

FDIC May Borrow Money from U.S. Treasury:

http://tinyurl.com/6b7oka

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

As if we weren't far enough in debt already.

TiF, this is the latest projected trajectory (animated loop):

http://www.nhc.noaa.gov/refresh/graphics_at2+shtml/143014.shtml?hwindloop?#contents

Nemo,

All I was referring to were (and are) a rising stochastic and macd on the 5 minute chart of UAUA. In addition, the price action has been "encouraging" to those who are bullish in this timeframe.

Of course, the daily downgap today is a bearish continuation signal, and the gap has thus far failed to close and as you point out, the stock really hasn't gone anywhere today. Like I said, a real tug-of-war. I like North American Palladium here for a small several day/week position trade and did buy a few hundred at a good price.

actually just bought a little myself...let's see if i live to regret it.

Re: TS Gustav

this idea of a eastern Gulf trajectory is due to the divergence of two of the six computer models -
go to weather underground dot com and click on computer models to see the breakdown.

wow. That worked out good.

Maybe a bit early, but have stuff to do at work now.

Out of 1000 LCC @ $7.10 ($6.70 bought)

Out of 500 UAUA @ $10.32

Close JNJ short for $20 loss...

engine88 - Sorry, back from feeding ducks now...

Emerging economies will suffer as the worlds largest consumer economies falter, putting further downward pressure on crude.

I'm expecting oil to fall to $80 range, the DOW to rally with the news, housing slide to near bottom, and HB&B to continue fighting the fight they're so good at fighting. Gold has a good chance to rally with the USD(+10%?), maybe with a gain of +100~150% or so, if gold bugs are very lucky.

We are an oil based economy, and momentary worldwide demand destruction is my vision. $80 Crude will be a good opportunity for oil longs as peak oil vectors regain momentum.

Is the USD now on thin ice...

Perhaps one of the most telling indications of the fleeting nature of the Dollar Index rally is the action on a gauge called “%B.” Developed by John Bollinger, this gauge uses price action in relation to long term trading bands to determine whether a given market is relatively high or relatively low. In the case of the Dollar Index, the recent readings on %B are among the most overbought values ever seen. Even more telling is that from the oversold extreme low seen on November 8th, 2007 to the recent overbought extreme high seen on Monday, August 18th, the NET gain for the Dollar Index from low oversold extreme to overbought high was a move from 75.43 to a close of 77.15, or 172 basis points or 2.28%. Given that the rally retraced so little of the prior decline and is now historically overbought, this kind of sub-par performance is almost always an indication that a major downside reversal is imminent, and that new lower lows lie just ahead.

http://tinyurl.com/1w56

yes that was me selling at the top and gettin ready to reload on uaua

ToddinFla - Not much is being said in our Media but BBC has this:

“Oil price rises on supplies fall

The price of oil climbed by almost $3 on Wednesday after official figures showed that US crude stockpiles fell unexpectedly last week.
.
US crude stockpiles fell by 100,000 barrels to 305.8 million barrels in the week ending 22 August, the Energy Information Administration (EIA) said.

Analysts had been expecting an increase of about 1.5 million barrels. ....”

http://news.bbc.co.uk/1/hi/business/7584747.stm

Of course, these reports are often "revised" later after the money has been made. JMHO.

OT:

Firefox users....if you download the latest version, be sure to also grab the NoScript add-on. It takes a little setting up but allows you to decide who can run scripts on your composter. IMHO, it's awesome.

Hope on a rope. Expose the hucksters and string em' up.

Also recommended highly for Firefox users are Adblock Plus, Adblock Filterset.G Updater, Customize Google, IE Tab and Flashblock add-ons.

Less than 48 hours ago I noted on this site that several small miners were in the "buy" range by the RSI criteria. One comment read:
"Thanks, 2nd_ave and bsi87. I also noted NAK as another miner that met the criteria for a buy 3 days ago, but that looked like catching a falling knife. Surprisingly (for me, anyway), the signals would have worked, at least in the short term."
Well, today NAK is up 20% on no news. Also noted CDE and GSS are not doing well, despite the RSI buy signals.
No position in any of these.

The volume on NAK is the largest in the past year as well. This isn't just an oversold bounce.

RDR,

the referendum in Alaska is the reason for the jump in NAK.

Mining vs. fisheries.
Mining won.

To my untrained eye looks like Union Pacific (UNP) is touching the top of recent downtrend and forming right shoulder of HS pattern (albeit very flat one). RSI overbought but not yet turned down. Added to JAN 80 PUTS...

Or is it?
NAK fell from 15 to 5 in 8 months.

I decided to sell just now (at $7.48) the SWC shares I purchased a few days ago at $6.86, as a part of a "hedged trade", with UAUA purchase being the other side of the trade. So the money I lost on the UAUA purchase was made up on the SWC purchase. Today, my buy limit order on UAUA was hit, and I purchased some more UAUA at $10.01. Now, I am placing a sell limit order on it at $11, and will stop buying UAUA. So currently I have sell limit orders on it at $11, $12.10, $13.10, and $14.30. Let's see how long it will take for them to get hit.

long SRS @ 90.1
long SKF @ 125.9
shorted AAPL @ 175.3
shorted AMZN @ 82.35
IWM puts DIWUQ avg price .47

Kass: Hedge Fund Turmoil Takes Its Toll

"I believe it to be of consequence, as the weak markets and the overall poor performance of hedge funds in many different asset classes have begun to feed on each other, resulting in:

1. some risk managers taking over from portfolio managers, causing "forced" sales;
2. an expansion of redemptions, also causing forced sales; and

3. reduced aggregate hedge fund industry inflows

If I am correct that the disruptive influence on flows from the fund of fund industry coupled with forced selling decisions by not only the trigger-happy (and smallish) hedge fund cabal but increasingly from some of the medium- to larger-sized hedge funds as well, then their recent effect on volatility and lower share prices shouldn't be dismissed. Nor should the lengthy effect of these disruptions be underestimated by investors. "

http://tinyurl.com/5eg7kg

[holdings:TWM, QID & SRS]

On Firefox, I also recommend cool iris. It allows you to view the page behind any hyperlink by highlighting the magnifying glass that pops up next to the link without actually hard-clicking to the link.

You can stay on the page you're reading and still preview the underlying link.

Northern Dynasty -

Alaskan's apparently vote against anti-mining ballot measure in yesterday's primary:

http://www.adn.com/election/story/507096.html

NovaGold has many Alaskan sites but its stock price has not benefited from the mining bill. So I lean toward oversold bounce combined with program trading as reason for NAK bounce. It is well off its high this morning, on much lower volume. I missed the bounce.

Anyone holding or buy FXP today? Down 5.49 pts.

Also, I had just doubled my SKF position at $127.55 -- if USO keeps going up and UAUA down, then SKF should start moving up and hedge my UAUA position. On the other hand, John Hussman wrote in his weekly review on Monday about the swap spreads widening and getting now almost to the level at which they were in March. This, in his experience, leads to abrupt falls in equity prices.

re ndm
posted this chart a week ago.ndm was one of the primary companies in question of this issue so as well as falling in sympathy with all the miners it also had this issue taking it down imho.
I think it will be a prime takover candidate especially with the fall in sp over the past few months? Thats a big deposit,one of the biggest isnt it?

http://stockcharts.com/def/servlet/Favorites.CServlet?obj=ID2984294&cmd=show[s149087989]&disp=P

All of the gold stock sector leaders I now follow have broken out against gold(lower window of their charts)

All good moves start out with skeptisism.jmo

I'm often naked when I sell short, and also when I go long! For me wearing a pair of "tightie-whities" is being overdressed. I know you're all pleased to learn this.

Fidelity -

CNBC just reported that Fidelity is being put on credit watch. If its rating is cut, what does this mean to all the "mutual funds" they hold? Are they even safe? Will they start selling and make the shareholders pay?

SNDK- out at 15.03...

shark, that's gonna replace the whale in my nightmares.

Sharkster,

I think you apprised us of your "commando" trading attire a few weeks ago.

shark

How did that work out during your trading days at the Westport library?

Today's dance card:
SNDK: Out at 15.06, Thanks 2nd!
UAUA: in at 9.80, out at 10.30, in partial at 9.96.....waiting....
ROM: 59.69, still holding at 60.78

That's Fidelity National Financial, a title insurer, not the other Fidelity, which is privately owned:
http://www.cnbc.com/id/26424569/for/cnbc/

Did someone say "whale"?

Please contact Captain Ahab
1(800)HAR-POON

RDR - thanks for the clarification.

Above comment was for c3. The company with a credit problem is Fidelity Nat'l. Financial, not Fidelity Investments.

shark in his chones - another jarring image. Inguala chingaho!

any thoughts on CALM? i set a buy limit at 37.90 just for the hell of it...

CALM - Sounds eggcellent! A pullback is just what would warrant my interest...

eggxactly...

Placing a sell limit order at $35.50 on the VLO shares I bought last week at $34.50, and at $37.50 on the shares that were "put" to me when the puts I sold on it were executed a couple of weeks ago (the strike price of those puts was $37.50, so if I sell the shares at $37.50, I'll just pocket the put premium, as I had intended to do in the first place).

UAUA- 7 or 8 trading days ago it hit 15.86, now it's lost 38% of its market value partly b/c of a hurricane-> efficient market hypothesis at work...

You's guys are funny.

New Orleans considers evacuating!

AMR Corp to:$9.00 from:$6.70 current:$9.20

JetBlue Airways TO:$6.50 from:$4.65 current:$5.35

LUV To:$15.50 from:$14.50 current:$15.05

The reason for price target upgrades today because of falling oil according to Citigroup.

Oil has been increasing the last few days??? I think they increased the target prices because their targets were far below the current prices!!!

A few things to keep an eye on.

CPST - according to scenario we dicussed yesterday, went over .50 on slightly improving volume. Want to see it staying there over couple days at least, then start tagging resistance .86 - .75 where I get interested in long entry. Dropping under .40 cancels whole thing for me.

CPSL - after breaking 5 and nice runup, dropped back into 5, held it as a support and tries to bounce now. Volume is incolnclusive so far. waitching for firm establishing over 5 and starting breaking out of todays range. If goes under 5, I am not interested any longer.

CLNE - played it today from 16.25 to .79, defnitely one to watch for possible continuation.

correction: resistance for CPST .65 - .75

David,

I read Hussman each Monday and saw that, but woouldn't that be good for SKF since it is shorting? I was thinking of buying into SKF once again.

Nearly all financials have been showing bad news the last couple of days.

i think everyone is over-hyping the strenght of Gustav after Katrina's devastation.

i think CNN and the like host ill-informed public officials like mayors and finance folks to make comments about the veracity of the storm.

id rather leave the weather experts to make estimations.

i call BS on any oil rally based on this false hype.

Jim Cramer on CNBC an hour ago was saying that oil will fall about $8-9 on Monday if the Gustav doesn't take out anything major. He said by Monday it will be too late to do any of the trades. I guess that is about what 2nd said yesterday about buying UAUA on Friday.

I just reloaded 500 UAUA @ $9.87

Don't trade the storm hype. Trade the reaction to the storm hype.

Had I the dry powder, ATM crude puts is where I'd be sniffing.

shark - I get my sense of humor from being mobbed by 22 clowns at least twice a day.

The markets are closed Monday aren't they?

even katrina wouldnt have been that brutal of a storm if the levies were fixed properly.

in a sense it wasnt the sheer power of the storm as much as it was a very very strong storm coupled w/ poor infastructure.

gustav doesnt appear to be anywhere near a katrina in power, so i dont see how any of the catastrophe people are predicting (driving up oil prices somewhat on weak volume) is grounded in objective analysis of the facts.

if a weather/strom professional makes an estimation ill believe it, but mostly its been the mayor of new-orleans and other politico's jawboning fear.

this will be a critical test of where crude (and gold) go if things are given the all-clear after the strom. i will unload my recent gold position by friday if things dont appear to as bad as they are making it sound for this storm just in case gold plunges down w/ oil during any sell-off.

QT- good point. US market is closed monday.

Fannie Mae Preferred Shares Halted -CNBC >
FNM
Last update: 8/27/2008 4:20:37 PM

dr.cosa - I was thinking the same. We're likely to see accelerated decay in oil/gold once the storm teeters. I'm going to try to catch the gold peak to unload, then reload at oil $80.

"gustav doesnt appear to be anywhere near a katrina in power, so i dont see how any of the catastrophe people are predicting (driving up oil prices somewhat on weak volume) is grounded in objective analysis of the facts."

This is true. However, the facts are that Gustav is 3 days away from the oil fields and Gulf Coast, ergo, its present strength is academic. What has people rightly fearful is that the water temperature in the Gulf is much warmer than where it is at present, and if it manages to stay over water between here and there, then it can be expected to strengthen considerably.

Dr. Cosa,

Perhaps you are not familiar with the Gulf Coast, but to say that "even Katrina wouldn't have been that brutal of a storm if the levies were fixed" ignores all of the Gulf coast except New Orleans. There is no oil and gas production in New Orleans. Levies do not protect oil rigs. The major rigs that could be affected are way offshore. These rigs will be evacuated and shut down in the event of a major storm. Many were severly damaged by lesser storms than Katrina.

When Katrina entered the Gulf of Mexico, after passing over Florida, it was only a tropical storm, about the same strength as Gustav is now. Gustav has not entered the Gulf yet, so it is way to early to say that Gustav is not anywhere near a Katrina in power. It is unknown but the best models do show Cat 2-3 strentgh before landfall.

As someone who has lived through numerous hurricanes, and sheltered refugee in-laws from the Missisisppi Gulf Coast who lost their homes during Katrina, I'm taking this storm very seriously.

I hope that you end up being right about the predictions of catastrophe as only political jawboning.

NAK - The development will make Bingham pit look like a gravel quarry with 184 billion lbs of copper equivalents, which ranks up with Grasberg
(includes Au & Mo)in open pit and underground developments. It wasn't a mining vs. fishery vote it was a mining vs. green vote on water quality nuance.

Right on, auhead. My experience with hurricanes is similar to yours. Dr. Cosa compares Katrina's powers as they were at landfall New Orleans with Gustav's powers at its present position south of the Greater Antilles.

Price discovery is about future expectations. That's what we have to focus on, and the odds are in favour of Gustav strengthening according to the meteorological data.

How many Katrina type storms have landed on the gulf coast in the last 20 years which have torn up energy facilities? Take that average and apply it to todays situation and my estimation is the odds are being overblown (hot air?).

This is not to say the lumber industry couldn't use some help, or that politicians/disaster relief shouldn't be jawboning for safety's sake.

auhead,

i hope so too, and i appreciate the response,
as i said, ill take what the weather experts surmise on the this storm, but right now i see alot of fluff from the major news outlets with by lines like:

"deputy-govenor of Louisiana says storm could be serious"

or

"office of emergency preparedness cautions residents to prepare evaculation plan"

these are typical story lines but lack the objective merit of proper analysis of the potential power of the storm. anytime i see more fluff than substance i grow suspicious. thats my core point.

and yes you are correct about the oil rigs, accept that oil hasnt exactly moved up on events it usually has like wars in oil/gas rich breakaway republics and the like. i wonder if all the hype gets priced in before the touchdown, and as someone mentioned early, that oil will sink hard if gustav doesnt turn out to be a total catastrophe because of all the jawboning before hand.

good luck,

FNM - " The company's chief financial officer, Stephen Swad, was replaced and the chief business officer, Peter Niculescu, will take on an expanded role. Fannie Mae also appointed a new chief financial officer and chief risk officer, effective immediately.

Daniel Mudd, the company's chief executive, will remain in place."

Rope the dopes! All of em' at once!

Gold Reserve [GRZ-T] has rejected an unsolicited takeover offer from Rusoro Mining Ltd.

"Rusoro offered two shares for each share of Gold Reserve – a proposal that the Spokane, Wash.-based company's board said was inadequate and not in the best interests of shareholders.

“This highly conditional expression of interest attributed a $90-million value to Gold Reserve's equity,” said Doug Belanger, president of Gold Reserve.

“The expression of interest did not take into account Gold Reserve's current financial position, and gave little value for our company's proven and probable reserves of 10.2 million ounces of gold and 1.4 billion pounds of copper.”

CP and Dr. Cosa,

I don't have the data for the last 20 years, but since 2004 there have been three storms that impacted energy production along the Gulfcoast: Rita, Ivan and of course Katrina. All three of these storms have not only shut down production but destroyed offshore rigs, some beyond repair, and damaged underwater pipelines.

I'm not an expert on modeling hurricanes but the staff at several Gulfcoast universities are. They are showing it moving into the Gulf with landfall somewhere around the Mississippi to Louisiana area as a Cat 2-3 hurricane. Undoubtedly the models can and will change, and their utility is debatable this far out.

I think that the thing to keep in mind is that over the last twenty years oil production has moved offshore: the easy to get stuff on land has been depleted. So, by this fact alone, the oil supply is becoming more vulnerable to hurricanes. I do believe in recent demand destruction and agree with you that a hurricane can be used as an excuse to raise prices.

My only energy play is APA as a long term position, which I may hedge with UAUA later this week. I enjoy your posts and good luck to you too.

Rusoro pursues GRZ, then KRY? -

I think it was rather gentlemanly of Rusoro to offer to buy GRZ, even at a price which makes Aurelian's offer look rich!

Maybe the next move will be against KRY, which is a mere contractor to the gov't owned CVG (gov't mining corp, with which Rusoro has a JV).

Then maybe another higher offer for GRZ, and ultimmately - if not by hook, why not by crook?

Whom can GRZ turn to? If I were Berlanger, I'd initiate JV discussions with CVG, or failing that with a major Russian or Chinese miner.

Curious that Rusoro's stock is unmoved today. Maybe I'm crazy. Nobody else sees the handwriting on the wall which I see!

Oops, forgot to disclose: i have a position in Rusoro. Also DYODD

"How did that work out during your trading days at the Westport library?"

I think shark provided an answer as to why he no longer trades there ... or, as per the restraining order, he is not allowed within 100 feet of the facility. ;)

Everyman,

Thanks for the comments. I believe that the models from Univ of Miami and Univ. of South Alabama, among others, are pretty good. I don't know where you grew up but I vaguely remember Betsy in'65 (?)and Camille, and remember partying on the levee after school overlooking Lake Pontchartrain in New Orleans watching the water come over Lakeshore Drive from Frederic, which hit Mobile in '79 and tore down the bridge to Dauphin Island. Then there were Elena, Georges, Danny and Ivan. . .

The effect of these storms goes way beyond oil production. The insurance and infrastructure industries are impacted. Everyone will be out buying generators, cannned food and bottled water.

The costs of home insurance along the Gulfcoast have gone way up after Katrina. Another storm or two like this one should result in some waterfront property for sale at a big discount from pre-Katrina levels.

auhead - I like your take, I'm considering a straddle for my short oil, which I will implement based on storm reports and price changes, thanks.

Jock - Perhaps nobody reads the brail as you do, are you anticipating an Rusoro advance, KRY, GRZ? I see the sector retreating in the short term(1-2 months).

auhead - I would consider concrete a reasonable construction material for the gulf region. This allows for rapid cleanup with a power washer. Cheap furniture, shrimp net and cooler of beer and I'd be set...

This is a hurricane-proof home built in the town where I grew up: http://www.domeofahome.com/

I'm on the mid-eastern seaboard, where Katrina hit us with a wallop not to forget... from the south west. Several 60+ yr-old red and white oaks blown down, the larger ones. It isn't often that happens here, maybe once in 20 yrs. Still providing firewood.

CP,

I hear you. I've been looking for an old cement block waterfront house built on the ground(before the regulations forcing you build up on pilings). I would not have insurance. In the event of a storm I would take out my window A/C units, open the doors and windows, hook my boat up to the truck, head North, and let the water come in and go back out before returning home. For some reason my wife won't buy into this idea.

Chickenpookie said:

" ...and cooler of beer ..."

Eh, maybe make that multiple coolers.

Very nice house, my pants aren't quite that fancy, but I love the concept. I guess you'd need a garage to keep your treasures out of the salt air.

Fred Flintstone style, that'd be my speed.

Excellent work SiO2 on the correlations. I've begun my PCA Analysis of the Cara 100. Preliminary results suggest that the dimensionality of the Cara 100 can be reduced from 100 to about 6. These 6 account for about 91% of the daily price variation that occurs in the 100. The first component alone accounts for over 53% :). However, for any of this to have any lasting meaning we are going to need prices for a MUCH longer period than just 2 months.

I'm puzzled?

When I pull up a chart of the ETF "FXI" I notice the chart [Stockchart.com or Scottrade] tops out at around 73 in Oct 2007. I use to trade this stock at 141-155 in Mar 2008. Does anyone know why the charts would be off?

1:3 split about a month ago.

Mackinaw

Thanks... I missed that one.

Thank You:

Vadym for your follow through on the CPST question.

SIO2 and Mackinaw on the Correlation Studies.

Vadym: Ketel One, Grey Goose, or???

Jock,
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.

nemo... any good one will do actually, just don't go for no-name cheap stuff :)

Unexpected surpise of recent, with little story behind it. My sister's visiting after rather long break, her husband says at some point "let's drop by to a liquor store, get some Finlandia for the evening". So we do but the only store open late in the area doesn't have it. Clerk hears us out and says: I can do you one better, and I bet you've never thought of it. Turns out, canadian vodka Iceberg won some big international competition stunning the experts in jury and beating Grey Goose. Guy shows us a paperclip about it, cute bottle and price tag about half of that of Goose. We took the vodka and told him if we don't like it we are going to return it for refund. He says (mind you, sense of humor fades toward the end of long day): sorry, it's against the policy. I ask him whether he really thinks I give a flying sneeze about their policy after pouring bottle of vodka down my throat. he gets it finally, laughs and says "If you don't like it, come on down and we will drink one more, my treat... so you could get better taste of it".

In short, vodka turned to be really good :)

http://www.frogspad.ca/articles/nov2003.php

more on Gustav from weatherunderground (thanks to kp84):

http://tinyurl.com/57vvzz

note "Figure 2. Location of major oil platforms in the Gulf of Mexico. The data was taken from the Department of Interior Mineral Management Services"

of course, for those of us who were around in the seventies, 'weather underground' brings back other memories:

http://tinyurl.com/2dgude

colin twiggs from yesterday:

http://tinyurl.com/54qccl

no change in outlook:

"Spot gold bounced off support at $770, the low of December 2007, and is headed for a test of the new resistance level at $850. V-bottoms normally fail — expect another test of support at $800.

The long-term target for the primary down-trend is $700, calculated as $850 - ($1000 - $850)."

"West Texas Intermediate Crude respected the new resistance level at $122 and is headed for another test of support at $110/barrel. Failure of support would warn of a primary down-trend — confirmed if the key psychological level of $100 is broken.

A primary down-trend could test the 2007 low of $50/barrel, but this depends on whether China maintains existing consumption levels or follows other major economies into recession."

UAUA- for longer-term holders interested in which funds are buying or selling:

http://tinyurl.com/6xduzb

for those who can't be bothered, the short version:

Total Shares of (UAUA) Bought and Sold: 2,987,941

- 19 fund managers bought a total of 2,983,646 shares.

- 8 fund managers sold a total of 4,295 shares.

as best i can tell, they are referring to transactions in the past 15-30 days...

Analysis of correlation data is notoriously difficult and I'm certainly not the most competent on this Forum for the task but here's my first take on SiO2's excellent data posted today:

Keep in mind that these are correlations for price-action over the last 2 months.

Within those 10,000 correlations listed, there are 2 very interesting groups of stocks:

Group 1: PG, JNJ, WAG, PAYX, ADBE, INTC, KSS, WHR, MCD, BDK, ORCL

Group 2: CCJ, TS, ABX, GG, GGB, TOT, NUE, VCP, RIO, SLW

Within each group, the stocks have been very highly correlated over the last month; All the stocks in group 1 have risen and all the stocks in group 2 have fallen. Notice that all the stocks in group 1 are U.S. retailers or producers of consumer products and all the stocks in group 2 are foreign commodity related plays. PG is the strongest proxy for group 1 and CCJ is the strongest proxy for group 2. And, as I mentioned, the two groups are negatively correlated.

What does this have to do with Cara 100? Well, calculations confirm that the majority of the variation that occured in the prices of Cara 100 stocks over the last 2 months - about 53% - can be accounted for by the bullish behaviour of those 10 stocks in group 1 and the bearish behaviour of the 10 stocks in group 2. Notice that currency effects are probably also involved in this observation.

To bring it down to a slightly oversimplified interpretation, had you gone long PG and short CCJ over the last 2 months, you would have profitably captured the majority (again, 53%) of the price changes which occured in the Cara 100.

Well, that's my interpretation of the first principal component of the correlation data. The interpretation of the next 5 components - which together will account for 90+% of the price action in the Cara 100 - will have to wait until tommorow.

Mackinaw- thank you

It's true #2son,

People at the library got the wrong idea when I tried to "get comfortable".

[Bill Cara note:

There was a film produced by Steven Spielberg and narrated by Tom Hanks shown tonight at the Democrat Party nominating convention that was very moving. I'd like to say to Americans that I, a Canadian, was very moved by that film, in a deep and positive way. America has a lot to be proud about, regardless of Party. I would also add that after I switched to public broadcasting from CNN (not bad, but too much opinion presentation instead of the event presentation, which most people need to see), I was very impressed with public broadcasting.]

Should be noted that Rusoro offered roughly $90M for GRZ, and that GRZ has $105M in cash alone (!), plus equipment and whatever else can be sold.

The billions in reserves are another story. How much cash does KRY have?

shark- for a country that likes to see its screen stars 'light up,' 'haul --s,' 'kick --s,' and 'talk ---t," we seem to get very uptight about people 'getting comfortable'...maybe that explains the hooting and hollering when they see it on the big screen...

any thoughts about taking another shot at KRY?

Si02 Reference question today on skype.

Checked iShares TLT this evening . . . as opined, no mention of mandatory redemption if a certain threshold is reached.

TLT can trade at a premium or discount to NAV;

>97% of the time closes within + or - 0.5%. Currently NAV at 0.05% premium.

The TLT ETF can have a tracking error, but prospectus states “The Fund’s tracking error will not exceed 5%” over time.

****************************************

Heard earlier today that the Thursday before Labor Day has traded down 10 of the last 11 years.

This year seems to trade differently and inverse to anticipation, but we’ll see what happens. Maybe recent history has to do with most traders taking Friday off and they clear their positions for the Labor Day weekend by market close Thursday. Friday’s volume should be anemic. Of course, this year Gustav may have some influence.

Bill

Agree wholeheartedly. PBS the place to see all major news events.

Too bad they didn't have the ticket here in the states for the Olympics broadcast!

SiO2,
KRY has enough money to last it through '09 at the current payout rate. Many institutions are neck up in this stock and additional funds would most likely be available due to this situation. KRY is in it's 5th life as a cat would live. The Vens want this deposit developed or they would not have asked the environmental ministery to give it a second look and give it a green light last week. I personally think this permit will happen soon. Now maybe the Russians will end up with it after all or another much larger corporation that has the manpower to really move on the deposit, but it appears that the Vens will be very happy for this deposit to be mined slowly since they seem to have reservations about its explotation out of their control. They like things to move slowly. I have 8K shares now @ 2.36. I doubled down @ .70. This may allow me to get out with a small profit and start a more successful trading life under the Cara Trading Team's School. I made a trading mistake with this stock whether I am a winner or not. Lessons learned.

Anyone looking for a economically counter-intuitive play can look at KB Home (KBH):

Nice jump today and I think there's some room to run until the next market shoe drops.

http://stockcharts.com/h-sc/ui?s=KBH&p=D&b=3&g=3&id=p17283442249

Vadym: I know how to pronounce the toast but, I don't think I can spell it phonetically:

Stob huie stahl, e dengi bili

Hikers find remains of World War II pilot hanging from tree

Kokoda Track in Papua New Guinea

http://tinyurl.com/5bfb4x

Hi Bill,

Like all the new posters before me I want to thank you and the contributors for the excellent content of this blog. I also want to thank you for the book. I should finish it this weekend, Gustav permitting. Maybe your next book could have a chapter dedicated to some of the adventures you mentioned in this one. Some possible titles might be, “A Nugget’s Tale” or maybe “The Search For The Golden Nugget” or how about “Bill’s Adventures.” I suppose putting “Excellent” in that last one might be a copyright infringement.

I have a day job so I usually try to catch your morning commentary and then catch up on the daily postings at lunchtime and late evening after my daughter goes to bed. I used to spend so much time trying to catch all the info on financial entertainment TV, now the only time I watch FETV is when I don’t have a computer handy.

So thanks again from a retail investor in Houston

Hopefully this works. I suppose everyone knows they've started evacuating nonessential workers from some of the rigs in the gulf.

I had lunch with one of my pipeline contacts today and he said they still have damage from Katrina that hasn't been repaired yet.

2nd,

I have an eye on KRY. And I am not adverse to buying it, provided that something's going on. Either it starts doing a brisk premarket business one morning, or there is reason to believe a permit is coming, or it starts going up on volume. Same as it would be with any other stock. The one thing I don't want to do is buy it and hope for a permit, but I'd like to participate in any upmove that occurs. Also, I wouldn't load the boat no matter the story, this thing can crush you. I probably wouldn't hold it overnight. How do you feel about it?

nemo,

that's a good toast - as long as you are aware that it's not palatable with kids and (most of) women around :)

Venezuela - GRZ, KRY ...

People used to say: western miners CAN produce there successfully. Look at Hecla; look at Goldfields. Both are gone, having encountered "labor problems" and sold out at give-away prices - to Rusoro! Are there any western producers left?

Chavez has nationalied the phone company, Exxon, Chevron, banks, food processors, the cement industry, etc.

The new mining law apparently calls for reconsideration of concessions, and JV's with the Government.

Gold Reserve has played the political game like boy scouts; KRY's Venezuelan Chairman was a coup plotter against Chavez in 2002.

Is GRZ or KRY a good bet with Chavez in power?

port2013,

Welcome, "Howdy", and take care with preparing for Gustav.--

I've only been through two Gulf Coast Hurricanes and a TS, but I remember the Houston fiasco from Rita. If I could give Houstonians any advice at all, it would be to get your hands on one of the older, free Texas Highway maps provided by TXDOT at the Interstate "Rest Areas."

Why? They show all of the FM's (for any non-Texans, that's an acronym for "Farm to Market" Roads) and RR (Ranch Roads) in the State.

If the Hurricane comes to Houston and you're dealing with evacuation with 2 million other people, you'll be happy to have a map of the FM's to jump off of the US Highways and Intersate Highways and blaze your own path to your final destination. During Rita, I went from Orange to Hot Springs, Arkansas, and never touched a four lane higway. Just make sure you buy some fuel tomorrow so you don't have to worry about that at the 12th hour...

http://www.foxnews.com/story/0,2933,409761,00.html

Rare income tax victory. Good for Ulrich.

Placing a buy limit order on UAUA at $9 -- what the heck...

Vadym:

Oh yeah, I'm quite aware of the translation. Then again, if nobody parle Rusky, no problem.

Gustav - Just picture Gustav as a bowling ball and oil rigs as pins, then look at this map of rig locations!!
http://tinyurl.com/5ewedw

Good morning.

Here are your Cara 100 Ratings Changes:

KO - Downgraded to Neutral @ Credit Suisse

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

Have a great day.

Gulf Coast Hurricane:

I'm still trying to get a feel for short time trading.

1. Is it really necessary to determine just how bad a storm may be or how extensive the damage? If the media talks it up and enough people are listening, isn't the important factor which will bear on stock prices the general perception by the investing community?

2. If a trade is set up based on the above, wouldn't the volume (on your trade) be the best factor to determine when to cut bate?

Anybody?

That's bait :-)

GDP prelim figures out:

revised up to a 3.3% growth rate.

good trading to all.

Unless you have a degree in meteorology (and have you ever met anyone who actually does?) I would suggest you determine what everyone else is doing and do the same thing at the same time.

Meteorology would be the weather-specific cousin of fundamental analysis, not considered a good predictor of short term stock price movements. I prefer a simpler method. When I want to know what the weather's doing I look out the window and see if it's sunny or if it's raining.

This 'aint rocket science folks.

Grym:

What's your time frame for the trade?

With the storm, who knows how strong it will get, thus how much damage it'll do. Long weekend, so you won't be able to trade until Tuesday, when it'll supposedly have made landfall. Lotta' risk there.

Actually even real rocket science is accomplished principally using Newtonian physics, established by Sir Isaac by the end of the 15th century.

So in a sense, even rocket science isn't "rocket science", strictly speaking.

Make that 16th century. In the 15th century folks were still living in their own peasant doo-doo singing bad folk songs and offering their new brides to the local landowner.

Something tells me that rocket science involves more than an apple falling on one's head.....
In the 15th century we thought the earth was flat.....hardly mastery of modern physics.

Peter Kenny of Knight is a double liar.

First he stated that housing price declines are stabilizing which they 'aint,

Then he made reference to "housing assets".
HOUSING IS NOT AN ASSET!
If you have a substantial mortgage or cannot sell your home, housing is a liability.

Lie-ability= the ability of Wall Street employees to lie in pursuit of a big bonus while poor people bail out the companies.

Craig,

Newton's work with physics went way beyond the apple thing. He figured trajectories and most of the other stuff they now use to actually launch rockets. The apple story is just the beginning.

"In the 15th century we thought the earth was flat"

It's not??? Uh oh... I better brush on my world outlook...

CLNE's gapping...

Actually, theories that the earth was spherical date back to at least 6th century BC Greece, where such luminaries as Pythagoras and Herodotus were certain that the earth was round. Most of that info was later supressed by the old medieval church (Catholics, before they were Catholics) who preferred to proffer the notion that the earth was flat, in addition to a litany of other nonsense much of which is still dispensed by them to this day.

Nemo,

I'm just speaking in theoretical terms. I have never made trades of less than a few days, but am considering day trading. (Maybe you can teach old dogs new tricks.) I want to keep it as simple as possible.

I won't do anything that soon.

Thanks for reply.

How did the airlines "know" oil would decline this AM? They all went up, big, before OIL even started to fall.

TOOK A RIDE ON THE AMBAC BABYYYY