Bill,

don't you think that alot of "average" Americans feel like they are in something like a depression already? If yes, then this should be good ground for Dems.

Is anyone in the group looking at NOK? Cara 100 company, strong market position, quality product and management. Trading at under 10x PE. Thoughts?

Cara 100 Update:

CCJ - Coverage initiated at Sterne Agee with a Hold rating.

QCOM - Downgraded to Hold at Argus

USO Straddle 89C+88P $2.90 each, requires a move of 7% (or less). If you believe oil can move, this may work, do your DD please.

molszews,

NOK looks like it still has some downside to go on the weekly charts. With its Daily, Weekly, and Monthly RSI(7) all < 30, we'll eventually get a buy signal and look for confirmation along with similar stocks and the use of MACD or stochastics. Good company, but it's all about WHEN we buy.

molszews,

re: NOK

Have to agree with Blowout Preventer. For a long term hold you can't go wrong but a lower price may well be in the cards.

I'm loathe to go long anything right now (except for inverse ETFs).

Good luck.

Crude Inventory -

Are we getting one this week? Did I miss it?

Bill,

I see your point about the valedictory feeling to Palin's speech, but with the average voter reading at something around 6th grade level (who knows what comprehension?) it may be effective. We are a patriotic bunch at heart.

Retail advertising goes for the glitz and sizzle (Obama's/speaking) which has mass appeal — Lose Weight in Just 10 Days! My 40 years was in B2B advertising where the genuine value in a tool, fastener or pump was the important thing. (McCain's/military)

In that respect I give Palin's speech high marks:

McCain's military experience gives him a big advantage over Obama. Unlike Bush, who was swung a big stick, those who've seen combat are less anxious to resort to military excess. (McCain knew we had too few troops for Iraq and said so all along.)

But, as far as economics I can see zero change for the better from any of the four leading characters in this political charade. Lobbyists will still rule.

Therefore I still give the edge to Obama/Biden & tax cuts for Joe Average due to the extreme hardship so many people have been facing — some for more than a decade.

Nothing sells like "Free Money."

Blowout - I agree about NOK and it sure is looking tempting here. Do you know where I can get access to daily/weekly/monthly RSI? I believe Yahoo only shows one of them, maybe monthly?

c3
10AM today for Crude Inventory

10:35am - Oil and Gas

http://www.bloomberg.com/markets/ecalendar/index.html

On NOK:

Report out of I think it was QCOM, not sure, but there seems to be an opinion that people are holding on to their phones longer. Which makes sense given the economic climate and the lack of new revolutionary applications. Likely more downside for Nokia.

long freddie

A bit of help needed, anyone...
Does this make sense?
"...inflation likely peaked in the second quarter and now we will see a deflationary cycle," said Barry Ritholtz, director of equity research for Fusion IQ, a quant shop. Ritholtz says that investors should focus on export-based companies or anything else that will profit from a weaker dollar.
Barron’s, August 11, 2008
I have always considered a weak dollar as inflationary. (This seems to fit with the purchase of export oriented stocks — dollar weak/others stronger — they buy.)
How does this indicate DE-flation here?

Crude Inventory

Yahoo Finance says 10AM [bttom of page]
Go figure...

http://finance.yahoo.com/marketupdate/overview

teamonfuego
NOK -RSI values
http://tiny.cc/rvJoS

My news supply says 11 AM EST today, with nat gas inventories at 10:35

Grym - World economies are in retraction and the USD is in a rally, so I wouldn't expect increases in US exports. Sounds like Ritholtz is behind the curve...

ALOHA !!

These are the numbers you are waiting for?

READ ON:
Thursday, September 4, 2008
CFTC Investigating Whether Big Traders Lied About Oil Inventories

Wow, what happened? The CFTC went from being a lapdog to developing teeth. A little late, now that oil prices are on a forced march downward, but the commission could have backed off as oil became less of a front-burner issue. (Of course, your cynical blogger wonders if there was a risk that this story might get to the media, completely undercutting its credibility). Note that the drift of the investigation is that inventories may have been underreported, which would lead to higher prices.

No names yet, but this looks to be a serious investigation. Admittedly, this is consistent the with the thrust the CFTC said it would take earlier, looking into tankers and storage, but it looks like they are proceeding in a thorough, disciplined manner.

I have a buddy who was the DA in a pretty rough and tumble town (Bridgeport, CT). He said that the FBI wasn't composed of the brightest bulbs, but they often got their man because they were relentless. People in the private sector like to look down on regulators, but many are very able, and like the FBI, they can be dogged as well.

From the Wall Street Journal:

Commodity-market regulators are investigating whether energy-market players are injecting false data into the marketplace to influence perceptions about crude-oil supply and demand...

Among other things, regulators are concerned that companies may be reporting inventory levels that benefit their own trading positions but that may not be accurate.... (more)

Link: http://tinyurl.com/6by8r9

Hummmmm ... "that benefit their own trading positions!"

What a shock? We are trading against the likes of Goldman Sachs who owns oil storage tanks and reports oil inventories. Hummmmm??? How much is a oil storage tank these days?

Is there any data that is beyond manipulation for the benefit of the OPM crowd? And who is always the last to know?

NOK - A pretty nasty downward curve there, and the market is only headed down from here (DOW 10k?). I'd stay away too. There could be a brief market rally that brings some NOK upside, but definitely not a long from here. Dow headed down until crude hits $80 or less, is my thinking.

Crude - 11am today.. they just announced it on Bloomberg.. that it's late today. NG still at 10:35am today.

On Paulson's manipulation tricks:

Excerpt:
"The man is dangerous. He has already proven that, but he also has the magic ring . . . and Bush and the Congress and the Senate are all kissing it.

Bear Stearns - Why was there only one institution willing to step up to the plate? Why did Paulson offer $30B of our money? It wasn't because Bear was too big to fail. We must let the dead wood burn off, no matter how painful it is in the short term. What I am hearing now, is JP Morgan was the bank most exposed to the counter side of Bear Stearn AND many of Paulson's Pals would have been wiped out by letting Bear Stearns fail. Whatever the reason, we should have never bailed out Bear Stearns. That should have been the beginning of the burn off of the dead wood. That might have been the critical point to avoid a complete conflagration."

http://realestateandhousing2.blogspot.com/

Grym: That's the view from one side, which I don't disagree with per se. However, for some of us is isn't about any of the surface items you so accurately point out.

I for one, am not so swayed by a speech, although a well presented one is an art.
I'm not so swayed by military experience, although the average vet is probably overly qualified. I AM concerned about the lack of emphasis on the fiscal aspects of military endeavors by those with so much experience. Being puzzled by finance isn't a strong point for President.
Being young and inexperienced is also a valid point.
I see the retail politics of both sides, one based on presentation and the other on what appears to be finding the next political ZUNE to counter the iPod. I worry when I get the used car approach because something similar looking is selling next door.

My question RE the current discourse, is why was this choice sprung on us with only 60 days until the election? Does this rush our judgement? We've had 18 mos to see Obama in action and to see his campaign dismantle the Clinton machine. Like it or not, THAT is an accomplishment, and we've had time to vet the guy and already rake his wife over the coals for a slip of the tongue.

We've only had three days of Palin and there are already a few cracks in the sales schpeal. Shouldn't we have enough time to vet her and let her husband make a silly statement or two and maybe see how extreme her reproductive stance is, or how she is really in bed with big oil?
I know this is supposed to be verboten, but I'm sorry, a person's children and how they turn out says volumes about them, their priorities, and their values.

I don't like it when salespeople try to rush my decision. Most of us put more work into trading decisions and we are never rushed or unprepared in the markets.

Waiting so late to pick an unknown makes me very suspicious.

kaimu - Investigation a day late and a dollar short. Those guys are always reactive, that's what we get for our tax dollars. Same thing all over again...

On quiet, long counsel of Obi-wan Kenobi.. I am out, ouT, OUT of this damnable market.
This swirling, sucking Black Hole of Despair has nipped me pretty good.. but I'm still standing strong.
In the immortal-like words of the wookiee Chewbacca.. "AAARRROOOWWWWWAAAAAA!"

For now, I and friends will be on our way to the Adirondacks for some days of recuperative kayaking and letting go of some beloved ashes onto Eagle Lake.

Any suggestions where I should now park this cash until further notice?

SAN FRANCISCO (MarketWatch) -- Natural-gas inventories rose by 90 billion cubic feet for the week ended August 29, the Energy Department said Thursday. That matched an estimate from analysts at Global Insight. Total stocks now stand at 2.847 trillion cubic feet, down 148 billion cubic feet from the year-ago level but 102 billion cubic feet above the five-year average, the government data said. October natural gas was down 16.2 cents, or 2.2%, at $7.102 per million British thermal units on Globex.

details from EIA:

http://tinyurl.com/yujn4e

heymrbill - How about DTO, or possibly SJF?

bill- it looks like Ike is headed straight for the Bahamas...

http://tinyurl.com/5lknvq

rknick - thanks a lot for that!

MELI looks like it is going to retest it's 52 week low, which is what i was thinking a few weeks ago. i'd like to open a long term starter position at $25 and buy more if it goes to $20 to $22. This is indeed the eBay of Latin America.

Send Bill some CLHB!!!

LNG - Taking another big hit...

LNG - Would of thought a rout would happen after getting some major analyst upgrades only a couple of weeks ago.

SAN FRANCISCO (MarketWatch) -- Crude supplies fell by 1.9 million barrels to 303.9 million for the week ended August 29, according to the Energy Department Thursday. Motor gasoline supplies fell by 1 million barrels to 194.4 million barrels. Distillate stocks were down 400,000 barrels at 131.7 million barrels. Refinery utilization was at 88.7% compared with 87.3% of capacity a week earlier. Following the news, October crude was down 27 cents at $109.08 a barrel on Globex.

Palin - cute, tough, SO well-coached!

No introduction, after days of absence, she suddenly appeared on stage.

Like the girl you always wished had lived next door. She created a sense of "isn't America great to let me and my family rise so fast from small-town Alaska ..."

Then she lit into Obama with a sarcasm as biting as McCain's: he's all words, no deeds; says one thing in Ohio, another in San Francisco. When victory finally is possible in Iraq, he wants to leave. When those styrofoam greek columns are back in the studio lot, what does our opponent plan to DO?

By contrast, Palin's backdrop was simple (meant to say "honest, straight-forward") a huge screen, showing a fluttering US flag, then slides of America's beauty. As she spoke, the screen went black, highlighting HER beauty!

As well orchestrated as the Reagan funeral! Republicans really know how to stage pious, patriotic, propaganda events!

Imagine Biden vs. Palin! Imagine being the TV director, trying to give Biden equal time! Facts, issues don't matter; FEELINGS do, as Colbert said when roasting Bush.

There will be offshore drilling! - Good for RIG, other offshore drillers, for CVX, XOM, etc. Good for oil sands companies too, once the Republicans pull away from the Dems. HB&B will be home free. No mention of their excesses.

Amazing bold stroke by McCain!

there's your move in oil...

bottom for the miners? this is the level I have been waiting for,I know its a fools game trying to pick one but,

http://tinyurl.com/6b5t56

Craig,

Actually, until recent elections the VP was picked in the back room and decided during the convention. (Truman was a relative unknown party compromise.)

There is no doubt Obama is a good speaker and has a well staffed (better paid) team, but in my view this is being treated too much like a contest between these few people.

The real needs of the country, debt, defense, jobs, health care are virtually ignored as the "media event" takes on a life of its own.

As for vetting anyone — look at how many times we find out how much was under the rug — even years later. (Kennedy, Nixon, Dubya's VP, Sec. of Defense)

I will not be voting based on any promises by anyone, but I would like to hear some believable economic plans which can have a positive result on this sorry mess.

For those interested, NG analysis on BNN after the inventories (video): http://nexalogic.com/gas.wmv

Barring Gustav having negative (delayed) effects next week on inventories, storage is very bearish for NG. We are approaching the 5 year average, which was unthinkable a couple of months ago.

Tbar - A divergence (between RSI and price) doesn't make a bottom. You need to see bottoming behaviour in price itself. Price hasn't yet set a floor.

You're right. It's very hard to pick bottoms - although easier to spot non-bottoms, i.e. when the trend is still down.

Correction: Make that approaching last year's storage numbers.

Grym, agreed. Here's to substance over shadow!

And man o man was Bill right about staying away from this market. I had hoped he simply meant commodities, but it's ugly everywhere I look.

The only saving grace for my particular solar holding is that the relentless selling is on low volume. I'm keeping my short calls because I don't think they have a hope now of finding their way into the money.

Interesting to see all of the discussion on NOK. I agree it probably has some more to go to the downside.

With the summer rally that Bill predicted probably running out of steam soon, and a long term bottom coming in the next couple of months, I have been building a list of companies to watch closely in an attempt to secure an attractive entry.

I'm referring to the companies Bill and others have mentioned favorably such as GE, BA, T, VZ, XOM... I was interested to see that NOK hadn't gotten much attention in this category and was wondering if I was missing something.

FXP has gone exponentially upwards over the last several days, I'd get out if I was in.

Exited SKF and DXD, sitting in cash waiting for the market to breathe in again. Looking to get short again, as this market is quite the Medusa.

CP, Thanks for your response.

I guess didn't state my question very clearly. Even if the dollar's strength is temporary (which I believe), I don't see the deflationary implications of "weak dollar" in his statement.

During the depression the dollar was hoarded and rose in value, prices deflated on most things. Now, with nothing other than the dollar's reputation (LOL) there is no intrinsic value to it. (or any paper promissory note).

SiO2
I think forecasting NG prices is a mug's game. Too many weather variables.

It seems like either party is going to face big problems in the economic sphere. Banks, entitlements, interest rates, housing, you name it. I don't see how they can make any good choices. It seems like bad effects will redound on the population at large no matter what.

Jock,

I'm in total agreement with your views on investments if McCain/Palin are elected.

But, I doubt if things will change oil investments if Obama/Briden take over.

I will continue to hold SU and OIL either way. If price stays low (85 or over is low?) production has been falling even at XOM as world adds millions of new drivers.

Last check of Vanguard energy fund it had averaged over 15% annually since 1986. I may trade these, but never sell all.

Jock yes I know and agree, I have worked my way down with monthly, weekly, daily, intermarket charts as well to pick this spot for one.
Sprinkle a dash of luck and it might happen

The first chart here is also in support.Fear for pm omners can be expected to be at it's peak during usd highs and vice versa imho.

http://stockcharts.com/def/servlet/Favorites.CServlet?obj=ID2984294

Wonder how long between the next oil rout and when traders will begin to smell gold? Money's piling into bonds now... until traders remind themselves of how the real returns are negative in respect to inflation.

"U.S. Must Buy Assets to Prevent `Tsunami,' Gross Says" (which supports gold-bottom thesis, perhaps)

http://tinyurl.com/6aqe7v

Bill Gross in the news - "U.S. Must Buy Assets to Prevent `Tsunami,' Gross Says"

http://www.bloomberg.com/apps/news?pid=20601087&sid=aDXbHi9QRUgE&refer=home

Wasn't he the one said that LEH is liquid and they are not bailing just a few weeks ago?

I believe he was referring to Lehman bonds, not the stock...

"NEW YORK, July 10 (Reuters) - Bill Gross, chief investment officer at bond fund manager Pimco, told CNBC on Thursday that the asset manager had not reduced its exposure to Lehman Brothers Holdings Inc (LEH.N: Quote, Profile, Research, Stock Buzz) in any way.

Lehman's shares dropped as much as 17.9 percent earlier on Thursday on rumors that Pimco, the world's biggest bond manager, had reduced its exposure to Lehman.

Gross said that as long as the U.S. Federal Reserve is offering financing to investment banks, there are not questions about the companies' solvency, only about their future profitability."

the TOG is setting up nicely-> notice TBT/RRPIX/DXKSX all at/near 52-wk lows, and of course no more needs to be said about the metals...

Northforker - Thanks for the clarification. I guess PIMCO will still get paid before the investors even if LEH head south ...

Anyone,
trading STO, GLD, GDX or MITSY..all taking a beating. Sell hold or buy, your thoughts?

Grym, My understanding is oil will trade based on the USD, until something better comes along to replace one of the two.

Deflation? - Yes, a reversal process - property values are falling, money is tight, and job losses are mounting.

Stagflation? - Possibly, depending on supply/demand for oil and job creation. (hearken back to the seventies and think of mortgage rates... I prefer not to!). Maybe wide swings between inflation and deflation will keep stagflation from taking root?

Inflation - Currently under export with the rise of the USD, IMO.

Any thoughts on ADM (its been making new lows) and AA (for some odd reason I note heavy call positions in Alcoa over $30, $40 and even $50 strikes long-term). Thanks.

http://tinyurl.com/5fowa8
According to Gross's lastest epistle on the Pimco website, he is basically calling for a wholesale bailout of anyone underwater on mortgages--both institutions & individuals--in order to prevent asset deflation from spiraling downward to a depression. This would send gold thru the roof, no?

Out of SKF @ $116(bought yesterday at $110)

The Dow is down 262 points, so it might run up a little bit before close. I will try to buy SKF on any dips as I think the financials are still going down.

XLF - Wasn't there discussion last week about the number of CALL OPTIONS that were being bought!

Wonder how they're feeling now!!

http://www.marketwatch.com/tools/quotes/options1.asp?symb=XLF

JohnE -

STO - Why do you still own this one? Perhaps a small position???? Oil is on it's way to $80, please read Bills material more carefully.

GLD - Grinding around, finding a bottom (this is a process), you might be able to buy much lower, so sell into rallies, and buy into pullbacks.

MITSY - Hmm, I hope you haven't been holding since June!!! You need to understand why it's falling, and react appropriately. (hint - world economies are shrinking, what is MITSY investing/trading?)

TRIN is really climbing, now up to 2.4. This selloff is getting very serious, probably due to these hedge fund unwinds.

I have read Bill's material and take it seriously. I have held these stocks hoping for a bottom, but this week has been very tough. It's always tough to sell stocks when they are down, since I can look back and see examples of sold securities that came back and went higher after a year or two. When a market capitulates it can bounce back rapidly and we are pretty far into this downturn.

Grantmi- have to assume the smart money in options will almost always be writing contracts..

VIX getting juiced

Added to SKF @ 116 and change

SLV holding.. buying!!

My sell limit order on SKF was hit today at $115. Used the proceeds to buy more SLW at $9.54 (with a sell limit at $10.5) and WGW at $1.21 (with a sell limit at $1.41). Also bought more ESLR at $8.12 (with a sell limit at $8.9)

Craig said:

"I know this is supposed to be verboten, but I'm sorry, a person's children and how they turn out says volumes about them, their priorities, and their values".

My response: Now that's precious. I have no idea what this means but it smells rotten and out of bounce. check yourself before you post.

CP,

SKF looking good so far — fairly good volume

eight major banks are all down 2-7% and holding steady

JohnE - If you hhold these stocks long enough, you will receive more than you paid for them. We're talking $80 oil and a DOW of ~10k.... If you wait hold for a bottom, then that's an opportunity cost.

I generally don't sell on a fabulous selloff, and would expect some recovery, as many will buy into a selloff and sell on a recovery, next day.

I'm not buying into these selloffs because I'm expecting a lower market. The only long to hold is a short long, like DTO or SDS for another -10% on the DOW. Anything other than an inverse is a falling knife, bouncing off each step on they way down the basement stairs. If you're a nimble trader, there are opportunities, but if you're a buy/holder then go short.

shark - this could be your 500 point down day. it appears to be pretty obvious that the market wants to retest it's mid-July lows.

geck- chill

Grym - I got out of UYG at $22.61 (basis$19.01) a few days ago, concentrating on DTO for now, as it's a clear image in my mind.

2nd

geckakes a good point why the chill?

correction:geck makes

I would never even think to make public comment like that, even if I had nothing better to do than sit around at my government job all day picking my nose and sucking off a bottle of O2.

CP,

OK, I can go with the back and forth or mixture of inflation/deflation.

Although the 1970s were very inflationary generally with high interest rates, we certainly had a deflating stock market.

I tend to think we'll see inflation in what we must have — medical, food, energy — and deflation in what we may want — new car, new house, job.

Thanks

Chikenpookie - (Thanks for catching my anonymous reply) and thank you for the good advice. I will look for shorts and selling into rallies. STO, GLD, GDX & Mitsy all look ready for a bounce. I only hope it's an up bounce.

TTM Squeeze:
Signal with a downward bias on EWW triggered three days ago.

Needless to say, this was a correct signal.

(I was already in and short when the signal appeared, for other technical and fundamental reasons.)

number2son, (Is the name from 1940s Charlie Chan movies?)

If you're into solar, you may be interested in the article on a battery car project; not sure how to invest yet.

Designed by a German (BMW guy), with US parts, built in Finland — The Karma.

http://tiny.cc/0uiQD

QT- there are hundreds of ways to make a statement, interact, pass a car, or post a comment...his comment ranked pretty high on the confrontation scale (IMO)...

long DAG

Rumours are circulating of a major default in silver...

AGR Matthey closed their silver operations!

So, look, AGR Matthey's closure of silver operations might have been a $500 million precious metals default to Perth Mint in the last two weeks.

I believe that this is the first major "hidden" default, or emerging default, that has the potential to cause the bankruptcy of the Perth Mint, and/or bankruptcy and/or silver default at the COMEX, if they are not all bankrupt already.

Here is the link...

http://tinyurl.com/627g9m

2nd

I agree there are many ways to make a comment or a point, but look at the comment he was responding to. I know Craig is your friend but what surprised me is you made no comment in regards to Craig's but only geck's. I found his way off the so called scale.

Any how I am done commenting on this one.

i'm pretty convinced that this is the 500 pt down day shark was looking for...

JohnE - From Bill's book, and I paraphrase - "If you experience losses three straight days, something's wrong. Exit the trade immediately so you can reanalyze the situation."

just waiting for vinod to post the OEX put orders he loaded up on this morning...

kaimu - Is this just another rumor about the PERTH mint, or reality?

Chickenpookie - I ordered Bill's book and am waiting it's delivery. Thanks again!

HNU.to crawling back!!! +.19

speaking of background checks-

http://tinyurl.com/6yfhj4

"The Emery Unified School District board accepted Stephen Wesley's resignation on Wednesday after the San Francisco Chronicle revealed that Wesley did not hold a Ph.d, earn a masters in theology from the University of Chicago, or attend a fellowship for school principals at Harvard — all claims Wesley made when he was hired last spring.

The school board paid the California School Boards Association's executive search firm $7,000 to perform a background check on Wesley before it hired him to lead the district, which spent two years in bankruptcy and has two school serving primarily low-income students.

The Chronicle says it uncovered the discrepancies for less than $40."

does it take $7000 to perform a background check...they knew it would be a waste of time, and put the money to better use...;)

grantmi- glad to see the -0.56 correlation btw HNU/XLF actually working to our advantage...

2nd! Yup!! ;-)

Also.. still holding some SKF at $111.00 average!

With the market imploding, Sept gold is only down -1.20 to 796.70 with all future months +. Platinum is + for Oct +6.80 and Jan +7.40. Oct sweet crude is 107.96 -1.39. But you would think the world is ending...in a little bit.

Bill,

You have mentioned that you are expecting a major bottom in PM metals and stocks in 2H08.

I wanted to put in my .00025oz. I am thinking that the bottom won't occur until the following spring/summer timeframe.

My thoughts on this are: the major cycles of gold (the annual, the 2 year, 4 year, and 8/9 year) all look to be bottoming in early/mid 2009. The last times this bottomed was 2001, 1993, 1985, and 1977. Hoping to see a repeat.

European banks will start cutting rates soon and the extent should be known by next year where they headed and at what rate. They will be playing catch-up with the US.

The push by the powers that be to depress oil/commodities into the election and over the christmas season.

As deflation headlines start getting into the mainstream media, people who are thinking of gold only as a hedge against major inflation will be selling in droves. I think this links to the other side of Bill's TOTG, and I expect long bonds to rise in price with this as well.

I expect a bit of a rally over the next few months as the seasonal (annual) cycle kicks in, but then a very hard selloff. I expect to see $650 gold and perhaps all the way down to $4xx. I think people are going to be amazed at how much money needs to be taken off of various carry trades and long commodities bets. Something about extreme market swings moving just as far to the other side. When the gold bugs all give up and sell because of "manipulation", etc., that will be the time to start buying.

David- it's almost unbelievable they've sold WGW down this hard...taking a position at 1.21..

KarIN,
April 2009 Platinum is 1360 -58.60 ? but Sept '08 & Jan '09 are both up.

Anyone think the SKF action will reverse in the last hour by PPT, as isn't it McCain's turn to speak tonite?

2nd
i loaded oex put yesterday but got out little early, because of job can not monitor the market
in real time
here they are for info
Sell to Close Put 5 Contracts of -OEBUQ
Details Filled at $11.00
Sell to Close Put 5 Contracts of -OEBUQ
Details Filled at $12.80
Sell to Close Put 5 Contracts of -OEBVN
Details Filled at $11.50
Sell to Close Put 5 Contracts of -OEBVN
Details Filled at $13.50
Sell to Close Put 5 Contracts of -OEBUN
Sell to Close Put 5 Contracts of -OEBUN
Details Filled at $6.50
Sell to Close Put 5 Contracts of -OEBUN
Details Filled at $6.70
Sell to Close Put 5 Contracts of -OEBUN
Details Filled at $6.60
Buy to Open Call 5 Contracts of -UNEAF
Details Filled at $4.30
can not post all there are some more .It was a good day

I'm regretting how I pulled the plug on my shorts, the market just kept going down & didn't look back! But I can't complain about 8% in a week, slowly working my way back to profitability. Another 20% to go. I need to keep my desire to trade in line with a reasonable risk/return expectations and prudent entries. Discipline, discipline...

QT- i've "known" craig longer than i have geck, but they hold equal weight in my eyes on this blog, and they have both made important contributions-

craig posted his POV, which geck was/still is free to counter..i was objecting to the tone of geck's response, which can easily be construed as a personal attack, especially when he adds that he has "no idea what [craig] means.."

Economical data does not look good. what does the government think now?

Before November, market can not go down. It is not good for Republicans.

Speaking of driving less miles. I was in San Diego last week. When I drove to LA, I still see track jam. I don't think Americans has materially reduced their driving.

When I sniffed around the shopping mall, there were not enough purchasers waiting in line. One is GAP because it has deep discount. $7-$12 per t-shirt. that is a good value. Coach has the most traffic. Other shops don't have enough traffic.

westcoaster

Very short term anything can happen SKF as it's extremely volatile.

Intermediate term it goes higher until the unraveling of the financial mess comes to an end, IMO.

It was not unexpected to see 2ndAve step in for Craig. He likes to pick and choose what to defend. For example in the past he has made it his calling to stand up for those that are judging others i.e. Elliot Spitzer and those that were judging him many months back. He has routinely made it known that he doesn't condone the judging of others until now?

It appears that since Craig is his friend he can look the other way on that hit job.

So were straight, my comment was on the "comment" itself, which was not necessary and a low blow and not the poster, who is fine man. We all say dumb things, me included. You would be within your right to tell me to chill if it was about the person and not the action.

Thanks for the time and I hope my intentions are now better understood.

LEH.. just announced a spin off of some of their CRAP!!!!

SKF heading down! Damn!

grantmi- this kind of sums up my take on NGas right now:

http://tinyurl.com/6o2ba9

"The natural gas number was decidedly bearish, but at this level natural gas may not have much further to go to the downside," said Kerr.
October natural-gas futures dropped 11 cents to $7.154 per million British thermal units. It was trading more than 9% lower for the week so far.
"There's nothing to prop natural gas up -- no storms, falling demand and rising production," said Beth Sewell, a managing partner at Quantum Gas & Power Services.
"We should see some significant storage injection reports over the next few weeks -- perhaps not much this Thursday due to Gustav, but if any of the named storms draw a bead on the Gulf, it's game on," she said.
Total natural-gas stocks now stand at 2.847 trillion cubic feet, down 148 billion cubic feet from the year-ago level but 102 billion cubic feet above the five-year average, the government data said.
If natural-gas prices drop too far that "may encourage some producers to shut in [production] for awhile," said Sewell.

2nd
I will be buying some OEX Oct call by end of the day
and underwater in slw by buck a share

geck- now that you've made your intentions CLEAR, my apologies...carry on...

"He likes to pick and choose what to defend."

absolutely...i defend what's worth defending IMO, and let the rest go...we all do, right?

Added 1000 WGW @ $1.20 (first buy 1000 @ $1.29)

I think it could go to $1.00, but I am counting on a bounce here and there until then...

2nd
Guys here told me that there is force sell (because of Margin)
Hedge fund liquidation/and unwinding of position is going on in energy/commodity and metal
So there will not be bottom until this process is complete

I don't think my comment was colorful nor do I need to check myself. All my comments/questions were about candidates, not about anyone here nor critical of anyone here.
When I go someplace, say a restaurant, and there is a family with well behaved kids that have obviously been taught manners, it is a reflection on the values and ability of the parents....to parent.
The opposite is also true. We have all been around out of control kids and their deadbeat parents. IT'S THE PARENTS FAULT.

I have been a teenager and I was taught RESPONSIBILITY about birth control and about my own actions. This was the 60's-70's so the theory was thoroughly tested in reality. I have a daughter and she learned the same. I didn't knock-up anyone and my daughter didn't get pregnant out of wedlock.

When I see the opposite, there is only one place to go with it, there was a breakdown somewhere, and it wasn't letting the kid watch Murphy Brown.

I'm sure as heck not going to check myself over pointing this FACT out. A pregnant 17 year old daughter is a reflection of the ability of her parents AS PARENTS and of their family values.
That is a simple fact, like it or not.
So when we start hearing about how democrats contribute to the downfall of our society and our values, we can all call this pure BS when we hear it.
I notice we don't hear the moralists telling us how horrible her decision is or that she should check herself. Where is Dan Quayle now that we have Murphy Brown for real?
Is Mrs. Palin's child the example you will all hold out to your daughters as the example you want them to follow???
How about we address this question instead of feining insult. I didn't say anything insulting or out of line.

This type of question is going to surface if you open yourself up to running for the highest office in the land. I think it's a hell of a lot more germain than if Michelle Obama says she's proud of her country or not.

ACTIONS SPEAK LOUDER THAN WORDS.

Is there anyone that will be honest about this candidate and this situation or are we all simply cheering for sports teams?

geck

I remember the big Elliot Spitzer debate here. I am still amazed people came to his defense. A man who went after a woman who was running an escort service is Washington while the whole time using one himself. She later hung herself because she didn't want to go to prison. I wonder if he has any quilt over that.

I still think Craig's comment was hateful and I am glad you called him out on it.

Guys,

may I suggest everyone to ask themselves "does this post contribute value to a trading blog?" before hitting post button?

2nd_ave: after I did my due dilligence on WGW, I am not worried about this stock. Their income stream and costs are well understood, and if gold stays at $800, then at P/E of 10 they should be trading at $4. I think it is just a matter of time before they get there. And if gold makes new highs in 2009, then sky is the limit for WGW. I'll be buying a little of WGW for each $0.1 drop from now on -- essentially loading a truck of it. It is a MUCH less riskier investment than junior explorers, and it is trading at the same discount as the juniors.

Vadym Graifer
what do you think about my post at 3.28 p.m?

BTW guys, please, don't have a disagreement on my acct.

I'm happy to explain myself. I think Spitzer was totally stupid as I do Palin. I'm an equal opportunity critic.

I'm in total agreement with Grym's last post, Jock's tongue in cheek response and the part of Bill's daily pointing out both sets of candidates were put there by special interests.

Who the heck is going to represent US or who is closer to representing regular citizens like US?

vinod- thanks for the info...the flip side, of course, is forced sales are usually not executed at good prices for the seller, which translates into pretty good deals for the buyer...even if it means waiting out further drops ST...

vinod,

I think that is a valid theory. I just wish we could have a peephole into how much selling pressure left :)

Might gold be showing a bit of short-term strength here today? I would've expected this to be a "baby-out-with-the-bathwater" kind of day.

Please point out what comment was "hateful".
Please be specific as I did not write anything "hateful" and I know what I mean/meant.

Now if you do not know what I mean, and you take it as hateful, then maybe you need an explanation.
If by hateful you mean I disagree with you, then I can't help you.

"As deflation headlines start getting into the mainstream media, people who are thinking of gold only as a hedge against major inflation will be selling in droves. I think this links to the other side of Bill's TOTG, and I expect long bonds to rise in price with this as well."

Question: If assets start deflating, including fiat currencies as governments cut rates (and maybe print), what assets will deflate relatively less? Does gold actually become a deflation hedge? Basically, whose boat is sinking slower.

Vinod,

Which OEX calls did you buy EOD?

I just picked up 5 OEX Sep 575 Call @ $9.50

Craig, The idea that mayors, governors, etc. don't take the time to be the best parents should be a given. Throw in some abstinence only education and voila... a new baby.

appollo7,

Regarding less driving by Americans--

The Shell gas stations here in Texas are running a lotto, where a fuel purchaser has a chance to win $2900 everyday after a purchase of gas.

I believe in Bill's theory of "Proof of Concept," and when Texans have to be induced with a raffle to buy gas, I'm betting on significantly less consumption.

b0ss
Buy to Open Call 2 Contracts of -OEBIO
Details Filled at $10.10
Buy to Open Call 2 Contracts of -OEBIO
Details Filled at $9.20
Buy to Open Call 3 Contracts of -OEBIO
Filled at $9.70

killer whale:

Hope this isn't one of those occasions where you are first learning that there is no Santa Claus or Easter Bunny but babies aren't created by abstinence only education or a parents career choice.

All it takes is a sperm and an egg.

Sorry if that sounds mean, but I'm tired of all bashing on this board. It's funny how some think the world will end if we elect a VP with a pregnant teenage daughter but when Clinton got caught messing with an intern that was off limits because it was a “family matter”.

KW: Some of the most troubled kids I know/knew are the kids of school counselors and teachers...go figure. I think all of the junkies I found out about or that overdosed, all were in the above group. Parenting is way underrated and to me it looks like we concentrate more on the right to bear children than the responsibility in doing so. JMO.

Hmmmm....I think that Sarah Palin's daughter's pregnancy is a reflection of DNA and has nothing to do with the parent's values. If we can say anything about life it's that progeny creation is first and foremost--that's why are poor teenagers are a randy bunch of guys and gals. How many times have any of us as parents said, "I didn't raise you to 'talk'/'act'/'think' that way".

It's a good thing that at some point in time kids stop listening to their parents and make their own decisions. Otherwise we would not have a man of color and two women of spunk who have made great strides in political life.

I believe that what Palin has shown is the example of teaching her children that actions have consequences--and you have to be accountable for the consequences. It looks like these two young people are being accountable. To color this as their choice reflecting Palin's value is just that--color.

Watching BKE yesterday and today--

That's some massive accumulation in the last three days. Either some fund is really late to the party or they know something economically that will knock some socks off.

Personally, I think that American kids' access to Mom's and Dad's credit cards are being curtailed and that Mall-based retail like the Buckle is in for a rude awakening, so I like to see this strength.

CP, Nemo, Northforker, KarIN,

I have read so much on deflation in the last few years that the term is becoming as vague to me as are "conservative" and "liberal".

A. Gary Shilling's book How to Survive in the Coming Wave of Inflation rates it a good thing this time around.

My remembrances of talk between my dad and his brothers and sisters keep coming back to me as a terrible thing. They never really got over the "value of a dollar" aspect. Which as I recall bought more of nearly everything.

Part of my confusion comes from a total lack of underpinning of any currencies today — in the 1930s the dollar was redeemable in silver even after Roosevelt called in all the gold.

It seems to me money, the U.S. dollar as case in point, must deflate in relation to something or possibly everything. But then, something else — commodities, houses, food, — must be relatively inflating, or at least stable. Does that make sense?

If so, aren't "things" going to be more costly in real terms (such as spendable income)? I have been planning to hold gold coins in either event, inflation or deflation.

Leisa--Brava!

I just think it needs to be given equal review.
Neither is a high crime or misdemeanor, but both surely are indicative of morals and values.

I voted for Clinton the first time but wouldn't ever again. And we all held out hope that Spitzer would be able to help the little guy investor/trader and he F'ed that up (and his family).
Then GW held himself out as a moral choice and he lied to go to war and used the Constitution as TP. Can we compare? They all suck.

Nothing screws up a decent Presidency (or Governorship) faster than cheating and lying, unless you are an R. Idaho Senator or Born again gay crack sniffing preacher. Is there anyone from ANY party that can control themselves anymore?

All I want is someone that wants to be elected to serve and solve our substantial problems, can tell the truth, control themselves for a few years and not make the voters look like idiots.

"may I suggest everyone to ask themselves "does this post contribute value to a trading blog?" before hitting post button?"

Hear, hear!

Grym;

That's my point I think. The relative value of investments rising or falling. As in now, is the $ rising, or are other currencies falling against it. As money comes out of the market, equities are losing value rapidly, is gold losing it as rapidly? If you invest in TIPS are you earning money, not really, because inflation is understated, but perhaps you're losing less than other bonds.

I guess it's like the saying, "In the kingdom of the blind, the one-eyed man is king."

grantmi, those XLF calls were also being sold. Somebody made millions.

Vadym: hear hear, I have said pretty much the same thing before. Perhaps a secondary blog can be created to shift all the useless talk there immediately once it starts (like a Yahoo board perhaps).

As for trading, sold SKFs 120 calls and bought some 135s with the profits. Also took a 20% position in SSO calls against remaining SDS calls.

Liquidated JCP puts. Initial position from last week was under water, but doubled down yesterday and sold today. This is an example of why averaging down works in these wild markets, all you need is a little patience. It always comes back to you.

Holding UNG straddle, in no man's land at the moment.

My frustration seems to come from what appears to be a victory of "Hollywood Tonight" in our political system. We want/need philosopher kings and we get older versions of Paris/Britney. I spent 5 years in an american prison for not going to vietnam. Is McCain the war hero for attacking vietnamese from an airplane? Is bush a hero for killing hundreds of thousands of iraqis? I got no parade, vets didn't either. I can find nothing noble about war. War is a failure.

gals/guys - I make an effort to post here in hopes I might make some contribution to the group in return for what the group has done for me (plenty, I must say), and in the spirit of presenting dialog which might interest Bill, because this is all on his dime.

Let's be more considerate of Bill, I will make a new effort...

"I just wish we could have a peephole into how much selling pressure left :)"

Vad, We're all looking for those peephole "tells" to see when selling eases.

POT, a popular hedge fund play, easy to sell, very liquid. Looks like a good one to monitor but a short lull in selling can be a fakeout as they just apply the pedal to the selling metal as soon as some buying reoccurs.

Think there's clues out there, but we have to be in the room to REALLY know when!

ALOHA !!

ON HOMMELL
If this guy were publishing this crap in Australia he would have time to blog because he'd be in court 25/8 getting sued!

As usual more misinformation ...

Here is the Perth Mint reply:

· AGR Matthey has not closed its silver division. It is in the process of closing its under-performing jewellery division, but the production of physical gold and silver by AGR Matthey will not be affected. The closure of AGR Matthey’s jewellery division does not mean that AGR Matthey has lost or used up any gold or silver sourced from the Perth Mint.

· Neither AGR Matthey nor the Perth Mint are bankrupt or close to bankrupt.

· The Perth Mint has extensive stocks of 100oz and 1000oz silver bars which are available for immediate allocation to PMCP clients.

· The Perth Mint did not buy in quantities of silver following Hommel’s earlier attacks; as previously stated, for every ounce of silver we sell to PMCP clients, we buy a corresponding ounce in the marketplace.

· AGR Matthey is not a division of Johnson Matthey as claimed by Hommel. Johnson Matthey (UK) holds a 20% interest in AGR Matthey. END

Judge as you may but Jason Hommell is not a credible source for unbiased information on gold and silver storage. He's had the PERTH MINT bankrupt for years now! Isn't it odd the PERTH MINT has weathered WW1 and WW2, the Great Depression, UK default, US default, Vietnam and now global bank crisis and has never filed bankruptcy, yet according to Jason Hommell the PERTH MINT is now "questionable"? How long has Jason Hommell been around?

uncle k
As I recall the clinton matter was headline news for several years. Still is on this blog. The ability of people to be born pubs or crats, without examination, befuddles me. If one thinks the current resident of the white house has done a good job, then he should definitely support more of the same. I;m sure there are what, millions of unwed mothers, I'm certainly not a moralist for/against sex, I enjoy it myself. It does not apall me to have any moral agenda in the white house family. I live in a town of meth addicts and welfare recipients, I volunteer in the recovery industry, practice love and understanding. Peace from Lake County.

killer whale,

We can all contribute here; I would like to hear more about your perspectives on the market and trading.

Her teenage daughter has nothing to do with her qualifications for being president. What bothers me is no one in the mainstream media seems to be digging in to the truth about her record and her own statements, but they didn't do it with Cheney, Bush, Gore either. Sex and scandal sells more than truth.

From what I have seen Palin's own past statements contradict much of how she is being portrayed by the campaign. And no one is talking about her support and her husband's voter registration with the Alaskan Independence Party, a secessionist organization whose founder refused to be buried on American soil. How can a person with secessionist sympathies turn around and call anyone else unpatriotic? We must be living in a bizarro-world now.

Grym: things I noticed today. The yen was up strongly (unwind of carry trade?) The dollar was up strongly (people moving to cash as they pull money out of other assets?) The swiss franc (backed by relatively larger gold reserves) didn't lose too much. Agriculture held in (possible shored up by Ike on coffee, sugar). And bonds--a flight to quality--but the 7's, 10's & 20's and not the short term ones, which baffles me. Have to remember the 1930's (my father told of eating oatmeal 3 times a day b/c there was nothing else) happened in a relative vacuum compared to today regarding currencies and other investable assets. Watch the currencies, watch the $ & commodities. There is always something going up or down.

Seamus,

selling of today was much more relentless than I expected, and rubber band seems to be overstretched. Still, we finished day at low, and it seems more of selloff is in cards.

My working assumption for tomorrow is gap down, initial selling, then strong bounce and green close. Preparing two bags of popcorn for tomorrow's show, today's one was not enough

ALOHA !!

fireworks ... Please show us the evidence of your conclusions regarding "hidden defaults" at AGR and the PERTH MINT. Do you have any?

fireworks posted:
"AGR Matthey closed their silver operations!

So, look, AGR Matthey's closure of silver operations might have been a $500 million precious metals default to Perth Mint in the last two weeks.

I believe that this is the first major "hidden" default, or emerging default, that has the potential to cause the bankruptcy of the Perth Mint, and/or bankruptcy and/or silver default at the COMEX, if they are not all bankrupt already."END

You and Jason have a lot in common ...

ALOHA !!

ON NDM
Make no mistake about it ... this will be a long haul for NDM and their shareholders even under the best of conditions. These environmentalists are not done yet and have the ability to tie up progress in court for years costing NDM and shareholders millions. I believe that is what they will do because they need to set a precedent with Pebble and NDM.

READ ON:
ALASKA VOTERS VALIDATE STATE’S REGULATORY FRAMEWORK FOR MINING

September 4, 2008, Vancouver, B.C. – Northern Dynasty Minerals Ltd. (“Northern Dynasty” or the “Company”)

(TSX:NDM; AMEX: NAK) announces that last week, Alaskans issued a clear vote of confidence in the state’s water quality standards, its protections for salmon and human health, and its overall regulatory framework for hard rock mining.

On August 26, 2008, Alaska voters went to the polls for the state’s primary election and cast their ballots on Ballot Measure 4, an initiative that called into question existing water quality standards and could have introduced new, undefined regulations for mining. By a substantial 57 – 43 majority, Alaskans defeated Ballot Measure 4 and reinforced their support for the state’s existing regulatory framework.

“The people of Alaska clearly believe that the state and federal permitting process, and existing environmental standards for water quality and fish protection, are the appropriate measures by which the Pebble Project and other hard rock mines in the state should be judged,” said Ronald Thiessen, President and CEO of Northern Dynasty Minerals Ltd. “We’re encouraged by the outcome and support the regulatory process in Alaska.

“Alaskans want Pebble to be judged on the facts, based on empirical science and the rigorous environmental standards and permitting requirements of the United States and the State of Alaska. We agree, and are committed to developing an environmentally sound and socially responsible project that is acceptable to federal and state regulators and the citizens of the state.”

Pebble Limited Partnership (the “Partnership”), the Alaska-based operation owned 50 percent by each of Northern Dynasty and a U.S. subsidiary of Anglo American plc, is currently advancing project design and engineering programs, and is expected to finalize a Prefeasibility Study for the Pebble Project in the second half of 2009 after receiving stakeholder input.

Once the Prefeasibility Study is complete, the Partnership will apply for the requisite state and federal permits for the Pebble Project. The permitting process will be guided by the National Environmental Policy Act (NEPA), involve atstate and federal regulatory agencies, and provide multiple and ongoing opportunities for public input.END

I own no NDM shares ... I used to!

Grym,

I view a strong/weak dollar as a double edged sword. A weaker dollar sells US products to foreign markets (good), while prices within the US go up (inflation - bad). A strong dollar has the opposite effect.

When the US dollar is strong, foreign currencies are converted to US dollars(UUP &/or TLT &/or DOW go up), and vice-versa.

On days like today (near capitulation of DOW -3%, and rising US dollar), money flows out of stocks and into Treasuries (DOW->TLT &/or UUP), and foreign currencies are converted into US dollars (TLT &/or UUP) as well. If the DOW had been weak, and the US Dollar declining the money flow would have been somewhere else (commodities or overseas).

Bill understands in advance by watching these indicators in addition to like indicators of overseas markets, and recognizing the sequence of events. He knows the patterns.

Pattern recognition is the difference between being good and being great, and can be used by the cool tool black boxes, in correlation with reserved trading advantages to shift large amounts of money and coax market shifts.

I should also point out that my understanding is limited and not totally comprehensive of all aspects.

Vadym:

I think Vodka is in order along with the Popcorn. Hell, it's Friday...you'll just get started a little early. :-)

GDX vrs. GLD

In the last 3 days, GDX is down 14.5%, while GLD is only down 4%.

The price of gold stocks vrs. the metal hasn't been lower since the end of year 2000, when the gold rally began!

People like Tim Ord believes this means a rally in gold stocks is imminent, and that the stocks will rally harder than the metal. We'll see!

Thanks kaimu!!! Fireworks - where'd the rumor come from???

Vadym

Taking off in the a.m. so probably won't catch up till later in the afternoon on the laptop. Will pick up popcorn and liquid refreshment on the way ;)

Be careful and good trading.

That said, had a pending order for selling Dec SU puts, but it did not fill. Just missed. There will be another day and another opportunity.

Vad- do you have a working (or non-working) assumption for NGas prices?

Bill pointed out "Interviewed on Bloomberg TV this morning, the corporate bankruptcy and restructuring specialist Wilbur Ross made the statement that even as Crude Oil prices were setting records in the mid-140’s, there were no line-ups at the fuel pumps like there had been in the 1970’s when oil prices had been squeezed by supply factors."

The public strategic petroleum reserve also hadn't been established back in the 70's when I was sitting in my Datsun in those lines.

If I can respectfully disagree Moab.

It depends on the conditions of the pregnancy.
The story is she doesn't "believe" in birth control or in abortion, which is fine. It's her personal and apparently family choice. All good by me if that's their choice.

However, these all have bearing on her ability to lead those in the mainstream who don't harbor such extreme beliefs as this election will have much bearing on the Supreme Court and whether we change course from the last 8 years.
So it directly bears on her ability to lead the people, or if she would impose on the people her beliefs, like George Bush did regarding science and reproduction. So far she is GW in a skirt so she can't be a change agent IMO.

Saying it has no bearing would be like saying a dog breeder running for governor wouldn't be any different than a PETA activist. Of course it has bearing as the two will see totally different views and enact totally different laws from opposing points of view.

The question is, will Palin seek to restrict the choices of all women if she has the chance? I would think that has some bearing on her qualifications.

Vadym, Seamus,

The other fund's favoriate - GOOG, BIDU were all sold off hard. They are approaching March low, without much bad news, except in the bad neighborhood (being tech). GOOG's volume are average. BIDU are higher, but not as high as previous drop in July. Vad, what do you see prompt you to think that there are more selling left? volume? VIX?

Just got the book "Tape Reading". Am going to dig in hard!

"Think there's clues out there, but we have to be in the room to REALLY know when!"

seamus- one clue those of us not in the room can sometimes fall back on (IMO, of course) is sentiment, which is what i'm trying to do with NGas...when NGas prices dropped on high volume going into Gustav (on top of two months of higher than average volume selling to begin with) it was at least one signal the trade was too easy...now we've had three more days of selling on higher than average volume...so i think just from a common sense POV one could do worse than be buying...

nemo & Grym,

I mentioned that most people think gold is only an inflation hedge and would sell when deflation headlines start. I don't necessarily believe that myself.

You said that the dollar is increasing/declining against something. That always has to be true, as the "price" of something is really just what you get in trade/barter for a given something else. Whether that is 600 US dollars per oz of gold or 400 chickens or a weeks labor.

With gold, I see a battle of it's dual role. As money, gold acts inverse the dollar and other mediums of exchange (generally) but as an asset, gold moves with other asset classes. My view is that over the short-intermediate (3-9 months) term, gold is going to be sold along with other assets. The reason being that there is little reason to hold gold as a hedge (or a hedge in general) if you have no portfolio to protect. Basically why hold gold as a hedge against future systematic financial problems when I have my very own financial problems right now? So as money/credit leaves the system or is destroyed, any debt will be covered with remaining assets.

As money, and all else being equal, gold acts as an exchange between goods just like the dollar or euro. Gold has a history as money, is hard to find and coin, and difficult to duplicate. If you lived in an dessert with gold nuggets all over the place, maybe water would be your universal value exchange.

In deflation, when assets are becoming cheaper in terms of exchange, then holding the exchange itself is the best plan, aka: cash is king. Now when assets are falling but the exchange value is rising (compared to other methods of exchange [gold, euro]) it is even better to hold cash. But what happens when both are assets and the exchange are falling? In nominal terms, your $ may purchase the same/more/less of things, depending on what is moving quicker. But then back to the first rule, cash is king. Since you can trade exchange mediums just like any other good, you want to be in the cash equivellent of cashes. IMO that would be gold, king of cashes?

So I would say that in the short-medium term, assets are sold, gold being an asset. If deflation continues (and it looks like the banks are going to dribble on destroying credit for a while along with all leveraged assets) then move into cash long term. Which cash is the question. I think gold longer term, as all fiat currencies continue to inflate as the various governments try to stop deflation. But then you get back into this loop of living in a world where you exchange $ for goods, and need to convert gold into $ to pay for goods, opening yourself to exchange risk once again.

David- for the sake of argument, do you think it's prudent to be thinking about allocating that much of your portfolio to WGW, or any company for that matter...when it comes time to press the gold trade, why not just use GDX?

WGW is probably good for a bounce, which is what i'm playing for right now...still waiting for the ultimate buy signal for gold, which we'll probably recognize when it arrives...

Just like in May, this week we are having a weekly outside reversal down in SPX and DJI. I haven't been smart enough to get short, but you bet I will IF there is a rally.

"The reason being that there is little reason to hold gold as a hedge (or a hedge in general) if you have no portfolio to protect. Basically why hold gold as a hedge against future systematic financial problems when I have my very own financial problems right now? So as money/credit leaves the system or is destroyed, any debt will be covered with remaining assets."

Yes, I see that, much as assets that can be sold are being sold. I guess we're all saying the same thing. It's just the timing.

Did anyone see CT's missive today?
An oil move to below $100 (primary trend reversal) would be a sure sign of an impending gold bottom, no? He is also seeing DOW 10000.
Ouch.

"A leader is a dealer in hope."
~ Napoleon Bonaparte

LOL...and a dealer is a leader in dope..

It seems unusual that the stocks and comodities are both falling together, unless large investors/funds are exiting all their positions rapidly. Assuming hedge funds are liquidating is there any way to make an estimate of when the process of liquidation will be over?
Thanks.

Craig -

I am actually with you, but think that the emphasis on this one issue distracts from all the other important questions that need to be asked and will lead to a backlash as people see her daughter as being politicized by critics (even though her family are being used as props by the campaign).

LOL! I had included a joke about Clinton's brother, but in light of the recent mood here, left it out....but right along the same line....

Moab, agreed. Point well made and taken.

2nd, not really on ngas, never watched it, don't have any feel for how it trades. I see a lot of discussion of it lately though so my interest gets piqued. Which symbol do you suggest I look at?

Seamus... no worry, if my assumtion is right I will make sure to to buzz your ears off, and if not - I will nowhere to be found. That's what gurus do, right?? I gotta try it once :)

c3, I don't think any technical indicator is very reliable right now in foreacsting the end of selling. Most of them are off the scale as of today's end I would think. If I tried to put my feel in words, it would come out like this: the way market ended today suggests, barring some news overnight, more selling by interia tomorrow morning. However, it's getting overstreched really, natural bounce is very close. I will be surprized if it doesn't come tomorrow. Some aadditional thoughts:
- if some positive news development occurs overnight and we get a gap up, it will only prolong agony and gap will be sold into;
- if bounce develops too early in the morning, it will be sold into;
- for a bounce to be sustainable and end the day in the green, we need gap down and early selling, desirably fast and with good volume

"by interia"... ugh... that was supposed to be "by inertia". Maybe I need to look at the text or keyboard while typing? Or both?

XAU closed at 128.83, which is pretty damned close to the closing price of 125.99 last august 16th...the intraday low 8/16/07 was 120.41-> that would have to rank high as one target, either for capitulation, or for a point at which to begin serious accumulation...

Vad- UNG would be a good start...a few of us are playing either UNG or HNU.to/HND.to...

Kaimu/Chickenpookie, here is the link to the original article on the potential silver default.
So far it has only been reported by Jason Hommel. Should I find an alternate confirmation, this board will be the first to know.

Regards - Fireworks

http://tinyurl.com/627g9m

NO SIGNAL YET FROM DOW THEORY
Despite a couple sessions of steep losses, there’s still no confirmation from the classic Dow Theory that suggests stocks are poised to shudder sharply lower. But it could yet happen. According to the researchers at Dow Theory Forecasts, the Dow Jones Transportation Average has held up above the July lows, having risen about 12% from the July lows to the cycle highs in August. However, in the ensuing four weeks, the Dow transports have given up about 6%, including a nearly 3% decline Thursday. If the transports should continue to decline to the point where they’ve taken out the July lows, and the Dow industrial average retreats back to its July lows just south of 11,000 points, ”the prospects for global recession would increase,” the researchers noted. Stay tuned
From Barron

Just a thought
Market is going down since
Selection of Palin as McCain's running mate.
May be it is market conclusion that John McCain has given election to Tax-Hiking Democrat

2nd,

I went over a few timeframes for UNG. Everything from yearly to 1 month looks bearish, currently in a low volume bounce phase (bear flag). 5 days, however, is bullish with clear prospect to about $36. Considering today's inventort numbers that, if I am not mistaken, showed plenty of natural gas available, this is remarkable for a short term trade - information/price action divergence, usually quite reliable indicator. So.. depending on one's expectations in terms of time frame, it's a long play to 36 - 37 area, and still short in a longer time frame.

Please take all above with the following reservation: I never trader or even looked at it, and quite possible there are factors unknown to me are in play with this commodity. This is simply what chart shows, with no regard to any other consideration. It could be a chart of production of ivory buttons for men shirts in 18th century's Argentina for all I know :)

in april 2007 wallstreet suddenly allowed 20-1 margin and traders went out and go drunk,,,,,,basically they swallowed UP wise wallstreeters who were going to cash....... as the banks started failing and the 'window became a hanger door' from the fed,,,,,,,,the panic started,,,,,,to keep people buying banks,,, they implimented the SHO rules...... on banks priced at $15 with earning at -$10a share.....then the cnbc pumpers came out daily telling you what great values these banks are.....well,,,,the data says ma and pa didnt drink the koolaide,,,,,instead they stopped putting money INTO their 401k's,,, and for the past 2 quarters MIN they have been cashing OUT of the markets. now we wait for the boobtube pumpers to explain the 'strange' auditing habits recently employed to make the banks look so much better than they really are. for a couple of year

Jim Cramer said that the funds are now unloading for redemption. They have until Monday to come up with the money for the withdrawls. He said to go ahead and start buying NOW. If the market goes down until Monday, buy then with two fists. I am using this as a short term bounce only. I plan on buying more Friday on weakness and Monday if I get another chance on a down day. I think that a bad employment number is priced in, so it probably will be better than expected. We should get a bounce off the July 15th lows whenever he hit them.

Long UYG, WGW, & OEX calls

just to put things in perspective for gold:

longer term chart of the GDX shows we closed right at a prior low, struck several times in the past few years. shorter term there is a positive divergence between last weeks low and today on the RSI 7 and 14.

notice the rallies that ensued after these lows were hit. its been the worst in a long time for gold and gold shares, heres hoping thing start to look up.

http://i38.tinypic.com/15f5w8.jpg

b0ss, from thestreet.com, the same person you quoted said:

01:53PM 09/03/08 (yesterday): "There's no hard evidence, but the commodity stock selloff feels done to me."

09/02/08 (the day before yesterday) "The rally this morning was the real deal,"

Does anyone believe anything he says? My HP calculator has an RND button that works just as well.

Topic: Social Equity

Bill has been patient thus far as our gracious host. During these days of market volatility and Presidential campaigning, he
has kindly reminded us to focus on the markets.
Discussing current events beyond the capital markets is irresistible for some, as recent posts show. Thus the renewed calls for changing the structure/format of the blog and pleas of "take it elsewhere".
I do not want to change anything, for now anyway. ( Let's see what Drupal will bring)

So I suggest the header above.
Why? Because all the discourse on topic and off topic, is generally meaningful to me, whether I agree with it or not.
Discourse on Capital Markets goes on as it does.
If the topic is Social Equity (politics, education, wealth redistribution, children having children, etc), then I propose starting the post with the above header.
Readers who want nothing to do with it can immediately scroll past.

Craig: I agree with you one hundred percent.
Moab: well stated and that's that.

hear hear!! I'm Canadian.. and I love US politics..(and Americans) but I think this is not the spot for this type of discussion. IMHO

(Also.. being new to the site.. please no daggers!)

Kaimu (and others),
What are your candid thoughts on Hommel's point of view? While I want to believe much of what he says since I am heavily invested in silver and metals miners, much of his material has a pump and dump feel to it. (e.g. his recent "auction" of 100 oz bars). I'm not infrequently accused of being cynical, but you have to always ask yourself what someone has to gain from whatever they are pumping. I mean, are we to believe that he has the little guy's best interests at heart and want him/her to "get in on" the great opportunity? The same applies to all newsletter pumpers. He has a history of bragging about his silver holdings etc. Thoughts from the readership?
MCM (though I should probably change my name to "knifecatcher")

If I were a foreign fund holding liquid dollar denominated assets, the past few days would have been a good time to sell some. Especially if I were bringing my cash "home" under pressure.

Makes me wonder...

***

Traders should not be ignoring the currencies. The EURUSD has undone almost a years worth of increase (which seemed fast at the time) in about four weeks. Shorting this has been The Trade as far as I'm concerned, for at least a month. The plummeting continues. It does seem sort of overdue for a consolidation, but I'm not arguing with a trend like that.

My crappy little retail forex account has tripled in a very short time - counting current open gains with tight stops. (155 'pips' today so far.)

Sadly, I'm trading micro-lots. But hey, by the end of this move that may no longer be the case.

***

Google Chrome is pretty cool when a window crashes and all the other one's stay open. It is clean and cool. It feels not quite done.

***

Sometimes when you crack open an ETF it is very surprising what you find inside.

Vad- thanks...to be honest, all i care about is the next 5 days or less ;)

Bill,

I got more out of what was happening in front of the podium than the speeches that came from behind it. The chanting of "Drill Baby Drill" created a hole in the Rep platform that Obama should be driving through with a Mack truck. He should be stating that the current state of gas pricing has little to do with supply and demand and everything to do with private capital pools and speculators pushing the price up to the benefit of themselves and Big Oil. By unequivocally stating that he will be shutting down the speculators, creating initiatives to incentivize conservation practices and alternative energy developments that allow Americans to get back to work he will be making a legitimate offering. The "Drill Baby Drill" solution is no solution whatsoever. Big Oil will only shut in the new reserves and manipulate the market to keep prices high while encouraging more consumption.

On all the "off topic" discussions. Folks, it only happens once every four years. We're back to Ecclesiastes. I find it easy to scroll by. I think, perhaps, it's the level of decorum that matters. Can you imagine if this blog were around during 9/11 what would have been transpiring?

Regarding Cramer's comments: Well, there does appear to be liquidation going on, and this is that period when hedge funds redeem, or it isn't. That's one of those black and white things, however, I don't have the answer. As far as his feeling the surge the other day was real, well, that's why he used the word "feels."

Music city man, it is not just Hommel preaching about precious metals so I doubt if they are all wrong especially since the U.S. Mint HAS suspended issuing gold and silver coinage...

The dichotomy between the so called global spot price for the two precious metals and prices paid on ebay Germany has never been wider than these days.

A lot of 100 one oz. silver Maple Leafs was sold for €1,267 or $18.25/oz Tuesday evening. This is a markup of 40% to the then current spot price of $13.10. It appears as there is a seller's strike as there are hardly any sizable silver lots on offer.

The gold market shows the same: Offers have dropped to mere 100 gram (3.21 oz) bars which are sporting minimum bids of €2,100 or $ 3,045 which translates into $948/oz. This is a markup of 17% to the so called global spot price.

A desirable 50 gram (1.6 oz) Rothschild gold bar - which are not produced anymore - is listed for another 6 days and has already drawn a bid of €895 or $1,298; this is 10% above spot.

http://tinyurl.com/5oovjn

I added to my bond short and bought a little more gold today. I'm not trying to time this trade exactly - I just want to make sure I have a good core position on when the TOG starts to work itself out. Just a couple months ago some of us might of thought the top was in for bonds and gold wouldn't get down to $800 (I know I did). I wouldn't expect this trade to start reaping benefits until the 2009/2010 timeframe. I do like the divergence between RSI and the bond price .. that being said with Sept/Oct coming up and equity volatility who knows how high bonds could go in a flight to quality trade. I really appreciate the WIR's and I think most of us gold bugs should have learned valuable lesson about trading prices. I know respect for risk and leverage saved my bacon over the last few weeks - that's why I'm able to still scale in. I may not be married to my gold position, but I am happily courting it ;)
Thank you to everyone for great discourse. On a cynical note.. I sometimes wonder if the time to get back into financials is when Goldman takes itself private ....

Vad - Thanks for the response. It did feel like that the market needs one more knee jerking and pain before the buyers step out. From the money flow I track, the string of outflow in energy, tech and commodity is rather rare this year alone while financial withholding the headwing.

2nd - I got in UNG a bit too early. My thesis was that NGas formed a bottom last year around this time before taking off. Do you see the cycle ramping into the heating season, in the near term?

c3- there are a ton of natural gas price forecasts out there, and the EIA site is a good place to start:

http://tinyurl.com/dy16

but if investing in NGas was that simple, you wouldn't make much money on it...i started scaling in too early also (tuesday morning) into a ST trade, but i like the fact that i hesitated before adding at wednesday's low- being cognizant of the fear it may go much lower (which is simply the recognition of an emotional reaction that most other investors are feeling also) is (in my experience) usually a sign that i'm buying at a good point...can you handle another 16% hit to the position? if so, then by all means hang on and wait for the inevitable swing to higher prices...personally, i don't like taking those kinds of hits, but on the other hand, i'm usually not around long enough to talk about 200% gains either (all this should change when the time comes to quit day trading in favor of longer horizons)...IMO, if you're going for a 200% gain, then taking a 16% (interim) loss is part of the game...

EIA summary:

"Prices. The Henry Hub spot price averaged $11.45 per Mcf in July, $1.62 per Mcf below the average spot price in June. The spot price decline marks the end of consecutive increases in the monthly average price that began in October 2007. While warmer-than-normal weather in July increased natural gas demand in the electric power sector, the decline in crude oil prices and continuing supply growth contributed to the decline in natural gas prices over the past month. Looking ahead, strong domestic production is expected to limit the impact of lower LNG and Canadian imports on natural gas prices. While extreme weather anomalies present a notable risk to the current outlook, spot prices are expected to remain below $10 per Mcf until December, when space heating demand rises. On an annual basis, the Henry Hub spot price is expected to average about $10 per Mcf in 2008 and $9 per Mcf in 2009."

...fwiw, the above outlook was penned 8/12...next update will be out 9/9, next tuesday...

...another addendum- the reference to 16% hits/200% gains refers to HNU.to, where you're very likely to see both...UNG is far less volatile...

here is a story of what was happening outside the republican convention

http://tinyurl.com/56oeev

we will not have equity of any form in the spiral our culture is currently within, chained to ...

nah not worth soap boxing, as it just takes a person out from actually helping others... One lesson learned from the streets.

Posted by 2nd_ave: "David- for the sake of argument, do you think it's prudent to be thinking about allocating that much of your portfolio to WGW, or any company for that matter...when it comes time to press the gold trade, why not just use GDX?"

2nd_ave: I am planning to buy a fixed number of shares for each $0.1 drop in WGW. If I buy it at $1.1 and then at $1.0, then I will have 8% of my portfolio in it. "Loading up the truck" was a figure of speech -- it just felt like that because normally I wouldn't keep buying a stock that volatile after each 10% drop in price. I would wait for a 30% drop before increasing my position by 30%. But in case of WGW, I feel that the current price is a bargain price. I don't think GDX will rise by a factor of 4 if gold breaks out to new highs. WGW, on the other hand, can easily rise by a factor of 4 in that case.

Placing a buy limit order for WGW at $1.1, for SLW at $9.0 and a sell limit order for SKF at $122 (for the shares I purchased at $119 last week).

Also placing a buy to cover limit order at $25.20 for the MER shares I shorted at $28, and at $5.88 for the FNM shares I shorted at $6.88.

Sept. 5 (Bloomberg) -- SanDisk Corp., the world's largest maker of memory cards used in digital cameras, surged the most in two years in German trading after Samsung Electronics Co. said it may buy the U.S. company.

Sandisk jumped 15 percent to the equivalent of $15.43 as of 9:40 a.m. in Frankfurt, headed for the biggest gain since July 25, 2006. Suwon, South Korea-based Samsung, the world's second- largest chipmaker, said today it's considering various options regarding SanDisk, including an acquisition

http://tinyurl.com/5b9vdp

A graphical representation of what we know. It's not the unknown that's the problem, it's the known.

My thanks to Nemo, Northforker, Chickenpookie, and KarIN, for all the shared insights on deflation.

After nearly 50 years as a long term investor, I still tend to think that way. What I got from your comments and applied to the quote from Ritholtz on deflation is:

1. He may have been speaking in the moment (with inflation and deflation an on/off shorter term condition).
2. We are witnessing, as the dollar strengthens, those things measured in the USD falling in price.
3. And, of course, when our currency is weaker foreigners buy more here. (We become the "cheaper foreign source" our consumers were promised—whoopy! :-(

So, my longer term strategy is still intact: I'm heavy on cash, holding bullion bought over time (waiting to add) and still believe oil will be of more value than the dollar due to increasing number of users and falling production.

A lifetime of continuing inflation makes it hard to switch to a rapidly changing outlook. At my age next week's lunch menu is long term thinking — except for concerns over my wife running short when I'm gone and my kids whose future is not like mine at their ages.

Northforker,

If buying is in the longer term Treasuries then people must expect rates to fall further, or deflation to be of long duration.

Right folks?

$XAU:$Gold at 0.16 - a major low per Tim Ord

In his book, Ord charts this ratio (plug it into stockcharts.com) and finds when the XAU (gold stocks) get below 0.20 vrs. the price of the metal, a significant bottom is near. Only 8 such botttoms since 1984! And, the ratio hasn't been this low since end of 2000, when the gold rally began!

I hope this is some consolation to others who are still holding juniors too illiquid to trade!

(email jockATbillcara.com, if you want to see Ord's chart from 1984 on this ratio.)

Donald Coxe's EXCELLENT free weekly audio commentary:

http://tinyurl.com/2htvq3

The perfect complement to Bill's coverage of price cycles is Coxe's thoughtful narrative of underlying macro themes. This week Coxe makes complete sense of Ben&Hank's market engineering on 7.13. (It took him too a while to sort it all out.)

7.13.08 was the largest market intervention since FDR closed the banks in 1933. (Where else have you heard or read this? nowhere!)

Giving Faulty & Fraudie access to Fed loans (for junk collateral) combined with the SEC's banning of shorts on key financial stocks took all risk out of financials, and guaranteed financials' rise starting Monday morning 7.15 through a massive short-covering rally. For funds to cover, hedgies were forced to sell speculative commodity positions.

With one stroke, this reversed the trade of long commodity futures while shorting financials (which many hedgies had piled into). This reversal solved 2 big policy problems: stopping commodity inflation in its tracks while pumping financials' stock prices to create conditions for their next needed round of equity raising.

For the first time, Coxe is thankful that Goldman Sachs guys were involved in this massive market intervention which simply HAD to succeed!

Coxe believes these measures will only prove effective until fears of further bank writedowns surface, when investors will once again lose faith in the financial system. (He believes financials are long-term in WORSE shape because of the intervention.) This next wave of fear is when gold will start to rise again.

Coxe sees US offshore drilling as inevitable (offering likely the best, and largest store of well-explored, economical oil in a safe jurisdiction in all the world) and providing a huge safe-haven for investors: the major US energy companies. (Stock prices of the majors never had factored in 145 dollar oil, so they never became overpriced relative to their commodity.)

Coxe also continues to believe that all strong commodity-related producers will continue to make money, and that - beyond perhaps a 1 year horizon - rattled investors will flock to the strength and straight-forward credibility of their balance sheets.

If you spend a half hour to listen to Coxe tell this story, I think you'll feel more confident that you understand where we are and where we are going in the markets.

Friend send me this Email do not know source
Q: What happens to the Company’s stock during the conservatorship?

A: During the conservatorship, the Company’s stock will continue to trade. However, by statute, the powers of the stockholders are suspended until the conservatorship is terminated. Stockholders will continue to retain all rights in the stock’s financial worth; as such worth is determined by the market.