LONG MESSAGE FOR BEGINNERS of stock trading/market study.

After attending for two years this community, and finding out my passion for stock markets (and trading), I would like to share my experience and also my poor performances, because I hope they can be useful specially to beginners to avoid my mistakes. After all, this community is for students of the markets.

Even if I will show some poor performances I made on Bill's suggested stocks, too, I want to wipe out any doubt. I am not criticizing Mr Cara. On the contrary, as I already stated sometimes with my messages here, I want to thank Bill. I am very grateful for teaching me (together with some other members of this wonderful community) more about economy than what I learnt at school. And probably more than what I got to know working 20 years in a very small company with some financial responsibility too. What I learn here is of inestimable worth, and is (and will be) very useful both for my own capital protection/growth and for my professional life. Now I'm more confident about many choices, even if I find out - with pleasure - that every day I can and have to learn more about the financial world.
Not to mention that the work that Bill does for me (well, for us) is free! Now, anyway, I would pay for keeping this community alive and kicking. And now on, I hope I can do a better job at managing my (small) capital and make it grow. Just a clarification: I'm not a day-trader, and my target is more medium-long term oriented. Anyway, sometimes - when I have the time to do it apart from my real work and family - I like some short time trades.

**First commandment** Do not invest in micro/small stocks.
I used the word invest and not trade, because I suppose that with micro stocks you are ready to wait for longer periods to get the return.
I was greedy, and hoping maybe to get a lucky lottery ticket.
Here it is the real thing:
VAL.V - I got creamed (-95%) and still holding
WHY.V - I got creamed (-68%) and still holding
KRY: I sold within a hair's breadth, before the fall! No pain.
ECU.V - today it's only -25% in my portfolio, I hope it can prove to be a good position later...
Luckily I didn't enter GIX.V because YTD = -60%
Then I lost something with quicker trades on CNU.V and EXM.V; now they have lost some 90% of their value.
Small stocks can be maybe a very small % of a portfolio. But also in that case, do not be involved in the wild excitement about a very promising company. Just wait. Wait for the next bear, or for the fall of the sector. Then analyze the balance, the cash, the properties. And if you are not competent to judge these data then skip it. There are many easier chances to trade better known stocks. Ok, perhaps you could skip a good chance, but I can tell you that it's far more likely that you will lose money. Anyway read carefully the chapter about micro-caps in the book of Bill Cara. It is very helpful.

**Second commandment** Even the best guru can make a mistake, or suggest a wrong timing. When the markets are so over the top, maybe the best approach is: small purchases step by step. Even a wise system like the RSI7d/w/m (great idea from Bill) can give wrong signals and reset every day when the movement downward is so strong.
Let's see what can happen looking at the SP500 index:
09/12/2008: 1251.70
09/17/2008: 1156.39
09/19/2008: 1255.08
It was -7.6% and then +8.5%
And thanks to Bill, I was in there! I got some nice results with short ETFs first and single stocks longs after. That was almost day-trading anyway.

But then... after I preached (with incredulous friends and colleagues) for more than a year that the bear and the crisis were coming, I got lost. I believed that because of the data I could see, and the substantiated comments from Bill and others (Roubini for example).
After calling the bear is over, and for a medium term trader like me it could be a comfortable and reasonable time, the SP500 index moved this way:
09/19/2008: 1255.08
10/08/2008: 984.94 that is -21.5%!!
Let's look at the favorite sectors (ETFs) for the same period:
XLE Energy -25.8%
XLI Industrials -22.1%
XLB Materials -26.6%
SMH Technology -20.4%
GDX Gold Miners -11.1%
Let's compare with XLF Financials: -31.7%

And now a look at some favorite stocks for the same period:
SLW -31.6%
GG -3.6%
CCJ -36.6%
SU -46.1%
XOM -3.3%
GE -22.4%
BA -20.2%
DOW -25,9%
RIO -46,4%
VCP -57,2%
CSCO -24,5%
INTC -15,5%
DELL -18,8%
RIMM -44,3%
IBN -37,2%
Why this partial list? Because they are the stock I entered that day...
I made the choice looking at the "best" stocks (RSI at that moment) from the Cara 100, and looking at the most recent information from Bill.
So now, even with longer term targets, reaching a positive return will take a lot of time and work. Anyway I point out that I made the choice to enter these trades, so I have to blame only myself.

**Bottom line** makets are exciting, but require a lot of careful work and decisions. Moreover, I'm happy with controlling my own choices and capital. Letting it invested passively in funds never got me good returns. Now, for sure I will keep on making my own management so that I can blame or - hopefully - congratulate myself. I learnt something more. And I hope that "my teacher" (Bill) will keep on being so generous in sharing his knowledge here.
Please forgive me for my extra-long message!

Bob Hoye recently noted that if the SPX closes below 1100 this week then a this would trigger a Weekly Capitulation Alert.

http://www.321gold.com/editorials/hoye/hoye100808.html

And to expect a relief rally to retrace 40-50% of the decline from the Aug highs.

Assuming the Aug high was 1300, and the lows at 970 in SPX. Then the retracement could reach up to 1130-1135.

from Alpha trend

What to Believe

Believe nothing just because a so-called wise person said it. Believe nothing just because a belief is generally held. Believe nothing just because it is said in ancient books. Believe nothing just because it is said to be of divine origin. Believe nothing just because someone else believes it. Believe only what you yourself test and judge to be true.

~Buddha

Bailout Bill Is Rife With Tasty Green Pork

Clean technology companies of all sorts are cheering the green pork that legislators added to the $700-billion Wall Street bailout bill that passed Congress last week.

Extensions to tax credits for wind and solar power producers finally got their long-awaited passage, but a slate of more obscure provisions could help drive interest and capital in new types of green businesses.

http://tinyurl.com/3t6tyy

In any case, here in a nutshell is what I know about economists versus Wall Street. To keep it simple, I’ll say that economists don’t have a clue about trading. They have no respect on Wall Street unless they can be used for marketing purposes.
Bill,
A few personal observations regarding economists:
Those who tried to prevent this mess (David Walker, former US Comptroller General) spoke out in very plain terms and were generally ignored.
Those who teach are usually out of touch. (tenure will do that)
The most vocal speak from textbook perspective. (The book on this economy will be written in about 10 to 20 years.)
Very few have read "The Black Swan" by Hassim Taleb. (They may be familiar with "The Ugly Duckling" — not the same.)
Those who manipulate the markets (and us) love to hear them talk.
Presidents think economists "know" something and rely on their expertise. (McCain admitted to not knowing much about economics and relies on guys like Phil Graham — former Senator and current lobbyist.)
---------
I like the line in your book which could be applied — "If his mouth is moving he's lying." Well, they may believe it, but that doesn't make it true — just more dangerous.

Tests start on pill that could lengthen millions of lives

• Tablet aims to cut heart attack and stroke risk
• Four-in-one drug could be sold for just $1 a month

The polypill combines aspirin, a statin to lower cholesterol and an ACE inhibitor and a thiazide to counter high blood pressure in one tablet.

the Red Heart pill, as it has been christened, has been manufactured by the Indian generic drug company Dr Reddy's.

http://tinyurl.com/3ge8xw

"As long as they stay in their academic bastions, economists do no harm. It’s just when they get out on Main Street without a leash, like Messrs Shiller and Feldstein yesterday, they do their damage."

ROTFLMAO! And we all know what kind of damage leashless creatures do, don't we?

Hey! Shiller! Get off my lawn! I'm running you in to get neutered Feldstein you mutt!

USD off 3.11% vs Brazilian Real so far today.

Brazilian ADRs should rise today!

US wealth in shrink mode

Leverage is the secret of American wealth. The average American family in 2004 had a net worth of US$448,000 on an income of $43,000, according to the Federal Reserve's survey of consumer wealth. Wealth equaled 10.4 years worth of income. In 1989, the Fed survey shows, it was only 7.3 years of income, and just 3.8 years worth in 1962. Measured in years, why should the ratio of Americans' net worth amount to annual income have tripled between the administrations of John F Kennedy and George W Bush?

American households cannot be worth 10 years of income, but should they be worth seven years of income as in 1989, or just three years of income as in 1962? Where should American home prices find a level? If they return to the prices of 1998, they will fall by half, which is where homes offered in foreclosure are clearing the market today in California and Las Vegas.

http://tinyurl.com/3lvr7w

ALL Iceland banks are TOAST now! Just on Bloomberg TV!!! LAst one has been nationalized

And they've taking the currency peg off the Euro!!

Ouch! Isn't always the smallest... that can take down the mighty!

Cara 100 Update:

CSCO - Target Price Lowered from $27 to $25 @ RBC

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

http://tinyurl.com/3qtd7n

jk484,

When I read your post about tasty green pork, I couldn't help thinking of a book I used to read to my kids, "Green Eggs & Ham" by Dr. Seuss. :-)

I'm skeptical about investing in alternative energy due to the way those companies got creamed in the 1970s. Anything which requires government subsidies in the beginning usually costs too much to ever remove the training wheels.

As a trade it may be good, though.

Nasdaq down 20% in 8 days
it can go up 20% in 8 days
just a reminder?

Lelik,

Thank you for sharing your experiences with investing.
What you posted emphasizes the importance of risk management - something that both Bill and Vadym have written about. I have learned that "we trade prices" and not to fall in love with a stock. Bill has encouraged long term investors to stay in cash during the decline, and has suggested that the market has forced those who are in the market to become traders. Many of us have been learning the trading dance. An important part of that is selling at a small loss when the price tells you that you have made a mistake, rather than waiting for a big loss that tells you the same thing. Knowing when to sell is my biggest challenge; as long as we learn from our mistakes we get better.

Russian market closed because stocks jumped too much.

LOL.

Based on the ted spread and libor rates still at panic levels I can see no way this market has any meaningfull rally. Watching the auctions today

11:30 February 2015 $10 billion
11:30 February 2018 $10 billion

Dislocation in bond market sure seems to be high. Anyone have thoughts on this I would love to see because this seems to be the fly in the ointment. The exact pattern during the depression is it not?

Bond market collapse is the real danger inmho

disclosure: short tlt

Lelik,
I have many of the stock you have mention (not PM Miners)
it all boil down to timing, and I brought some of them only few days earlier
with in few month we will be smiling?

It's A Sign Of The Times
NPR - 1 hour ago
Morning Edition, October 9, 2008 · The National Debt Clock has run out of numbers. The giant sign in New York City changes constantly as the federal debt increases

Grym

I was looking at this for investment ideas, this could mean billions for this company.

"Adrian Tuck, CEO of the smart meter maker Tendril, agreed. He foresees major changes in his business after the adoption of the legislation, which had been in the works for years."

Sharkie

They're getting ready to take Ma and Pa's egg money...again. And to skin the options traders.

Scaling in: My problem was buying near 52 wk lows and then getting new lows. Even with smaller initial positions we were getting so many new lows that I was running out of ammo.
Luckily I kept enough to offset a little with a few trades and we finally started to level off yesterday. Now if we get some momentum I can hook up the trailer. My IRA is screaming today though as I waited til yesterday to buy some Canroys LT. From 8.75 to 10.20 bid this AM, not too shabby.

I don't know if we'll ever see PGH for $8.75 again. $8.75 paying a 2.60 div. I'll just put a stop in at about 9 and wait.

Guys, I'm 53 and I want to retire at some point.
I want to sip a Kalik on a Bahamian beach with my beautiful wife like our fearless leader!

Here's a little chart from biiwii.com for all you Fibonacci fans out there:

http://tinyurl.com/4b7zn6

First retracement of the great $INDU bull market is roughly 9000...

Joanne Hruska on Commodities Report on BNN

http://watch.bnn.ca/#clip100741

NuVista: Ontario Teachers PP big capital injection in summer, no need for capital
HighPine Cheapest. 2x cash flow. Cash, little debt. Now adjusted to the new royalties regime. (Left twisting in the wind with royalties change.)
GO.A $6. Was $20. Can withstand lower prices, and have cash. Weighted 55% gas 45% oil. At $90 making hay. CEO interviewed.
Big acreage in Montney
Horizontal wells $3 gas cost
More than 1million acres of which 500k in Montney
Can weather the storm.
Possible takeover target.
Strong cash flow

Good Chart Blowout!

Funny! 1987... doesn't seem so bad now .. does it!

http://i35.tinypic.com/2gya7av.jpg

JCP/PENN are on my capitulation watch list.

Do ur own homework

They're getting ready to take Ma and Pa's egg money... again. And to skin the options traders.

Posted by: bsi87 [TypeKey Profile Page] at October 9, 2008 8:58 AM [link]

bsi87, could you pls explain your thoughts on this? Tks.

re:opening gaps

Opening gaps gun buy/sell stops set prior to the open. The gap appear to be 50% of an average daily move for the DJIA.

one would be better served putting in orders after 10:30 AM EDT.

i'm showing a halt on GS

Grantmi,

Iceland has a population of 300 000. Their three banks are like your small local mom & pop banks in US. Well, they managed (mismanaged) to get a unsecured debts several times of their GDP, so they are toasted. Do not be that alarmed, though.

[Bill Cara note:

For the record, the Central Bank of The Bahamas has a legacy of excellent management and no problems. The B Dollar is fixed to the US Dollar and people here openly exchange it on the street. Just remember not to take those B Dollars home with you after visiting here. Once abroad, the B Dollar is like an Enron Certificate. But here, it's as good as the US Dollar -- probably better because the Central Bank here is not the one in trouble.]

Bio...

I agree.. they are small! But these figures are scary!! (off of Bloomberg)

The banks are unable to finance about $61 billion of debt, 12 times the size of the economy, according to data compiled by Bloomberg. The collapses have affected 420,000 British and Dutch customers, and frozen assets held by universities, hospitals, councils and even London's police force. The government is seeking a loan from Russia and may ask for aid from the International Monetary Fund to help guarantee deposits

http://tinyurl.com/4uzz9m

[Bill Cara note:

I'm sure the tax authorities want to know the id's of the 420,000 British and Dutch clients.

Anyway, IBM is up over +3% and the Brazilian and Cdn resource stocks are flying.]

Reloaded 1/3 of the position in AQI.TO @ 2.47 that I flipped yesterday.

Willing to add if "they" can drop it further.

Scottrade:
Can somene plase help me to set up RSI on Scottrade?
What should be the smoothing PERIOD for 7,14, 30 period ?

[Bill Cara note:

I'll defer to a Scottrade user, but the shorter RSI is useful for those with a short-term decision-making time horizon, and the longer one is for long-term oriented traders. Remember, RSI is an indicator of price direction and momentum, not a trading signal.]

Banks are showing weakness.....shorts are prowling.

BA up 0.63%
BBD-B up 4.56%

I see more upside for non-US stocks due to strong USD over last few weeks. Anyone want to confirm this?

PPC up 50%
I have 500

Bill,
Thanks. I will keep your advise in mind.

Re: Spec Play in Shipping

Good morning!

bsi87 mentioned DRYS yesterday and got me thinking on RAMS - Aries Maritime ( product tankers and containerships)

An article in the Oct 3 weekly edition of the maritime paper Tradewinds ( tradewinds dot no and it is subscription only) which I am sourcing reports that a minority shareholder is leading a group of "cash-rich, non-U.S., non-public shipowners" in a buyout offer of RAMS. The group leader is Bob Burke, a marine finance industry veteran. He circulated a letter to the RAMS board last week offering 5 USD per share.
RAMS closed yesterday at $1.10 . I guess the market thinks it's a Don Quixote story. Or a pump and dump. RAMS chairman and a former CEO have 52% of voting power.
What do they know that the market does not?

Shipping stocks have taken a beating. The BDI is falling, the outlook for global demand of goods is weak and these shipowning companies have LOTS of debt which is hedged with interest rate swaps.

RAMS has plenty of bad news priced in. See the pr's. They are in default with lenders and suspended dividends. In March, they announced astrategic review, when the stock was around $6. RAMS board declined acquisition proposals then, from Burke and other bidders.

I write this because Bob Burke has done this before with an LPG shipowner called MC Shipping (former symbol MCX)
(I also knew him in school. After graduation, he won a CT lottery of $30+million and parlayed that into a career in ship finance. That was in the mid-80's)
As a minority shareholder, he made a bid for MCX several years ago. It traded at a buck seventy when I owned it. His offer of $3+ share was rejected.
In 2005, MC started the year at $3.85 and rose to $12.85.
MCX was bought out in 2007 by a hedge fund controlled by....Bear Stearns!

RAMS moving today.

Thank you everyone for sharing.

sold TM. I bought it error yesterday - did not capitulate

Re: PPC: Quoting some news

"Pilgrim's Pride Corp. (PPC) warned overnight that it expects to report "a significant loss" for the current quarter and may be in default with its lenders if it is unable to reach an agreement with them to waive or amend a covenant. The announcement was prompted by shares in the nation's largest chicken producer tumbling 38% on Wednesday amid a tightening credit environment and a volatile grain market. Trading was halted about a half-hour before Wednesday's close. "

In my opinion too riskly to buy.

pappdjavu

Do you think SLW is getting ready to break out to the upside soon?

re:PPC

I bought when it capitulated around 2.20.

Letting some go at 4.61

BKX broke out into new lows & needs to recover, GS needs to come back over 115 for today to get some legs, right?

Still holding QLD, though: and a bit of DZZ that i picked up yesterday. Will exit DZZ if gold breaks 890.

I'd also like to apply for DENSA membership, I've made some astronomically bad decisions in the last week, namely knife catching in a bear market. Need to wait, wait, wait next time.

bsi87,
You r da man!!

Sandy
I think new mention about PPC was last wednesday.
not yesterday. I brought PPC based on that news last wednesday.

What are signals of capitulation?

RSI 7 day < 10

also bsi87 has few post about PPC last week
Thanks BSI87

after my hide's ripped off on various, I don't feel like "da man" but I'm getting better.

get ready for JCP capitulation. something below 26.

CDS discussion - So, to my understanding AIG + ? issued somewhere around $62T of Credit Default Swaps. There's one heck of a lot of leverage here, what, several orders of magnitude of US-GNP? I'm guessing this was the fuel used to drive the housing bubble + ?, which since popped. I'm not as credible as perhaps a collegiate economist, and I don't wish to fall into the category of claiming the sky is falling, but $62T is one hell of a default, it seems...

Wall St. Terminolgy
CEO --Chief Embezzlement Officer
CFO-- Corporate Fraud Officer
BULL MARKET -- A random market movement causing an investor to mistake himself for a financial genius
BEAR MARKET -- A 6 to 18-month period when the kids get no allowance ; the wife gets no jewelry, and the husband gets no sex
VALUE INVESTING -- The art of buying low and selling lower
P/E RATIO -- The percentage of investors wetting their pants as the market keeps crashing
BROKER -- What my broker has made me
STANDARD & POOR -- Your life in a nutshell
STOCK ANALYST -- Idiot who just downgraded your stock
STOCK SPLIT -- When your ex-wife and her lawyer split your assets equally between themselves
FINANCIAL PLANNER -- A guy whose phone has just been disconnected
MARKET CORRECTION -- The day after you buy stocks
CASH FLOW -- The movement your money makes as it disappears down the toilet
YAHOO -- What you yell after selling it to some poor sucker for $240 per share
WINDOWS -- What you jump out of when you're the sucker who bought Yahoo @ $240 per share
INSTITUTIONAL INVESTOR -- Past year investor who's now locked up in a nuthouse
PROFIT -- An archaic word no longer in use

MS is pulling the mood down again.

look like short are after financial

ARD - Starting to chip into this one - haven't found oil & gas attractive over the last 3-4 yrs for various reasons other than STO & CHK. Happy Trading

Looks like the yen carry traders bought a ton of gold stocks yesterday, trying to entice folks in later in the day, and then sold overnight. Some of yesterday's faster movers (HMY, AU) are -7% and -8%.

For those who are interested

Which country is rated "Soundest Banking System" by the World Economic Forum

Tadam! CANADA

http://www.reuters.com/article/ousiv/idUSTRE4981X220081009

Hi!

IMO, the relevant news for today is at bloomberg.com:

"Libor Dollar Rate Jumps to Highest in Year; Credit Stays Frozen."

When we see some relief here, that will be a good sign for equities.

Now, for really relevant things

This weekend it will be 6 years anniversary since I started dating my wife.

I was blessed, and am happy organising the celebration.

You see, the world did not end.

Do not fall into the "organised" notion that life as we know it is over - it will not be over.

Have a good day.

Cheers!

Lelik, thanks for a great post! Your experience parallels mine. I too own many of the stocks you have listed.
It was clear a year ago that there were fault lines in the banking sector, worldwide. In the US, there was the run on Countrywide Financial. In October 2007, Northern Rock, a British mortgage lender went bankrupt, causing the government to step in. It seemed to me that recognition of the problem of the poor credit quality of many of the financial instruments being marketed would soon be reflected in the stock markets. I took money off the table and sat patiently waiting for a re-entry point.
It was a year in coming, much longer than I expected. Because it had taken so long to manifest itself, I had naively assumed that Paulson and the Fed were keeping a lid on the meltdown until after the US election. I had not factored in a bailout of family and friends by the Fed before the end of the Bush administration, though in hindsight, I should have.
In any event, as it became clear this fall that the market was dropping dramatically, I started to step back in, at about the same time you did, only to watch as the prices continued to fall into the abyss.
One lesson for me in this is that the major trends in the market are glacially slow. However, the hour to hour moves in the market can be lightning fast. Many of the posters on this site are day traders, and seem to be able to make money from hour to hour, judging by the posts. I can’t do that. I’m not quick witted enough, and it is just not my nature. I’m a trend watcher, which is one of the reasons I like Bill's RSI7 system. Based on this, I do believe that the prices I have paid for the stocks I have acquired recently, while presently under water, represent good fundamental value. For example, I like RIMM a whole lot better at $65, than I did at $125: and I do believe that those fundamental values will be reflected in higher prices, though probably, because of the slowness of the market in recognising the values, further into the future than I think they should. Because of the extended time line it is sometimes difficult to keep the faith.

sage advice bsi....there goes the egg money...

I had to sell some miners yesterday. GFI up over 30%? Gotta sell irrational exuberance, buy fear.

Looks like we get some more fear on the horizon.
SLW, GS, BA coming to us....

The same cycle. Dow is going negative.
Anyone betting that it will go back up and eventually go negative in the last 1/2 to 1 hour ?

TO my credit, since having my ASS handed to me by trading too much when it wasn't really warranted, I have thus far stayed out of this mess.

Bill,

Further to my comments on the impact of FX on CDN commodities plays, including goldminers, have a look at this:

http://online.wsj.com/mdc/public/page/2_3024-hourlyforex.html?mod=mdc_h_currhl

The interbank fx rates for $US vs. other main currencies % change since 12/31 is deeply negative - with one eye-boggling exception: it is +11.73% vs. the $CDN. Buying $CDN and putting it into commodities plays seems like a relatively safe strategy at this point in the cycle.

bsi,

Din listen to you and got egg on my face now.

Bought SSO for 35.38 at 10.10am

Soon start falling below 35 to 34.5 - 34.7

Knock myself on the head - Be Patient ! and learn...

It might stay negative today. As someone said, the short hounds have been released on the financials and the TED is worse, Jewish Holiday, and profit taking from yesterday. Break-even or better will be a good day.

What is up with Gold? I thought it would be a safe haven and going up right now.

Re: POG

Remarkable rally on the heels of the co-ordinated rate cut in the Real, and the Aussie Dollar, 6% on the day. Moves like that WILL affect the POG in $US.

anybody got any short ideas?

Question(s): Until Paulson starts his plan in a month, how do the financials begin to recover? Therefore, aren't we still looking at extreme volatility, and therefore daytrading? Does the market "bottom" or become rangebound until Paulson can prove the rubber (petroleum based of course) hits the road? Therefore, the tilt, would still seem to have a downward bias in the short-run, even taking into account the Beard's smart money accumulation observation.

So, UYG at the end of the day, or wait 'till next week?

Rick,

Re PoG: as Bill mentioned, it may be under the influence of price managers, for the time being.

I remain long gold,

DYODD.

Cheers!

Re: POG

EVERYBODY's taking profits in this environment.

For instance, look at the correction in $A bullion price from where its been to where its at:

http://www.kitco.com/gold_currency/charts.htm?AUD

Have you guys seen the SKF? a buck sixty one..Wow.

Sharkster:

Short POT, there'll be profit taking tomorrow. Actually, looks like we're starting to get profit taking today

re:SSO/other trades

Just my experience. Unless a stock capitulates (RSI 7 day30) will work again when the bull mkt emerges (IMO that will be when the weekly MACD's cross to the upside for the indices).

Play small ball right now (Moneyball).

Other than buying CAD (which I already have) does it make sense to play the UDN (Dollar bearish ETF)

Seems fairly low volume.

AIG down almost 20%.

oops

"Unless a stock capitulates (RSI 7<10) AND the hourly MACD diverges, the long side trade is not working for me. The Triple RSI buy signal will work again when the bull market emerges..."

Added another chunk of AQI.TO @ 2.30, now up to 2/3 of my position from yesterday. Averaged in today at 2.42.

I set sells at 2.80, 2.90, 3 for a portion of the position and looking to add more in the event they try to drop it to 2.10-2.20.

Also, WGW chart looks about ready to turn up as well. I think part of the weakness recently has been due to a strong USD as well as the new mine plan (which was a negative in the short term, positive long term and thus created a shock to short term holders perhaps). I still think its WAY undervalued.

SPY - sold OCT 88 puts short. If 'they' can take it down that low in 24 hours so be it

rick s - Gold is a safe haven. The theory goes; real value is clouded by governmental intervention. Central banks are controlling POG and other alternative investments in order to railroad us into fiat. What I don't understand though, is why they don't just push POG off a cliff for good...

re:JCP

moved buy limit down to 25.51 (hourly BB)

Sharkster:

I guess you might go UYG at the end of the day on the heals of the expiration of the financial short ban

Pookster:

If they push POG off a cliff for good, that would really spook the markets. Talk about removing the veils of deceit. ...ooohh, I like that line.

that's "heels" sorry

Joseph, correct me if I am wrong, but that SPY put you sold expires next Friday, not in 24 hours.

Just wanted to make you aware if that is the case.

yvrapx,

Thanks, best laugh I've had all week.

BillyS - yep, you are right

Sandy:

For any given stock, go to charts, then select RSI from "lower indicators." The RSI chart that appears is set to period of 14 by default. Select "options" on that chart, substitute 7 for 14, and hit "update."

Now any stock you look at will show the 7 period for RSIs. Time range of "1 month," "5 days," and "today" is what you are interested in for Cara purposes.

Yes?

Nemo,

An hour ago that was a brilliant move. Did you do it?

The market skankiness continues.

I guess we'll see what the market does at that Fibonacci retracement line around 9060.

Okay, more opportunity.

Can you feel your feelings change to fear?
No? Check your pulse....

ProShares announced today that tomorrow, October 9, 2008, it will resume its normal process of creating new shares of its ProShares UltraShort Financials (SKF) and ProShares Short Financials (SEF) exchange traded funds.

They got the egg money, the chicken, and the road he walked across...

nemo - Great line, nearly prophetic.

I think today is the day
we will hit the bottom, One year ago today DOW was over 14000

Bill,

If IBM does not "soar" today (currently down to 89) does it change any of your thinking?

[Bill Cara note:

Value Line will publish their quarterly report on IBM tomorrow morning. Review it closely. Re-work the calculations on the closing price for today. I think you will see the operational momentum, the financial strength, the 10 PE and high dividend yield, the high margins and return on equity, are excellent. This company does serve HB&B as primary customers, and the HB&B business is under pressure, but IBM has a back-log of work with govts and in countries that are going to grow their GDP by +5% or more that will carry the company through the economic cycle bottom. The lower the stock goes, the more puts I would write. IBM is never going to disappear. As soon as the economy turns stronger, it will be, as the leading company in hardware, systems and services in the world, one that will be a leader in the market as well. Put writing today generates more income than usual because of the extreme volatility in markets. To the extent you are risk averse, you would write deeper out of the money puts, and take in less income but also protect yourself with a lower cost basis if the stock is put to you.]

IBM trading below the open and previous close.

I would be carefull going short financials just because the ban is lifted. I think the big boys are going to put the squeeze on if the trade gets too crowded too quick. In fact the other side going long uyg after a down draft might be the smarter trade.

Buy to Open Call 1 Contracts of -OXBKN
Details Filled at $28.00

I won't believe my eyes if we see an 8 handle on the $INDU. So far, a 70 point bounce off of the 9060 level.

Sharkster:

Ya' know that comment about UYG? Maybe not...short the bejeezus out of the financials

http://bigpicture.typepad.com/comments/2008/10/lehman-cds-unwi.html

shark - And think of the money you didn't loose...

Vad's probably sitting there, "If Nemo says this, I'll do the opposite!!!" Glad to contribute to his financial well being.

Yesterday after the close I posted

"Call me optimistic, but I'll be looking for:

1) a solid green open tomorrow to get some people chasing/leave current longs momentarily complacent

2) some mid-morning/day weakness and shaking out

and

3) a reversal for a green close!"

So far so good - it is "misdirection Thursday" a week before options expiration, right?

IMO, this is NOT a good time to sell or sell short. I am personally VERY bullish at the moment.

bobbyo:

I agree on the intra-day regaring UYG. CDS reconciliations going forward will likely be a mess.

vinod really wants that clam bake... I hope he's right, but the pessimist in me says (well, you know).

This is the bizarro market: buy on break of support, sell on break of resistance. It wants to throw everyone off.

Re: Safe Havens

They were saying Oil and related investments were a safe haven in July, and even as recently as September, we heard the same when oil prices saw a hail mary rally. The oil price blowout is at the heart of the collapse of Wall St. banks, because they were all turned into an global Enron trading scheme. (with mortgages piled on top)

What we'll see in the ensuing weeks is an alignment of bullion prices in each currency vs. the US dollar price. Some are over valued, some are under valued. If you look at a 10-year chart where the POG has been in all currencies, you'll find that the $CDN gold price is clearly undervalued compared to the $US gold price, which has led the chart upwards:

http://www.kitco.com/gold_currency/charts.htm?USD

(click on 10 years)

I would look on bullion as an insurance policy against a total collapse of the financial system. It would have helped immensely if you had a significant portion of your portfolio in gold bars in a safety deposit box in Iceland.

Not that you would get your asking price after the collapse in Iceland, just that you could exchange your bullion for currency if need be.

Sounds like most are sensing opportunity to add to or establish new long positions.

I continue to suggest caution, given the inability for the markets to bounce even after all the oversold indicators flashing.

At some point, prices will reach a point where cash comes in from the sidelines. We're apparently still not there yet, but getting closer every day. But that's of little solace to those who jumped in too soon and now have sizable losses.

Watch the volume in the major market averages. Look for a single day of record high trading volume where the market reverses off the lows and heads back up. That's the key.

Just my opinion.

vinod...

don't call bottoms. :)

I was telling myself that rather than looking at where the lows are, I would start looking at where the highs are and focus on that instead.

I see a 15.80 upside in XIU.to (TSX)... (currently 15.26). If it breaks that, maybe we'll get to 16.60 or even 17.26.

Too bad I bought in at 17.25, 17.50 and 22.50.

This optimism thing isn't working either. Will stick with Cramer (50/50) rule for now.

What about GE. My $32 entry is at 20.16 (red again after a green light this morning). Almost hit the 50/50 rule there. Some good upside to $24.65 and beyond to maybe $26.52. Downside is $16.54 with a quick slide to $9.39 then maybe $8. Don't want to talk about that.

IBM has some nice support in the $80s range. It hit $120 in the days of .com. Now it is the .gov era.

There I go getting all pessimistic again.

Added 50 of IBM at 90.20. It had bounced at 89.40 for a while but I couldn't get it filled before it went back up. Schwab site seemed real flaky and I got bounced out once.
One purchase I made a couple weeks ago was PBR who we all know just found a bunch of oil not too long ago. And yet they're down, so it's really hard to grasp what is going on. I've got a multi year time frame, at least I hope I do, so I'll just sit back and hopefully enjoy watching the Bull develop.

ok, maybe i'm really crazy, but i like the tape the past 2 days. yesterday was clearly a momentum turner, but with the close being weak again i think people's optimism faded. IBM reports strong results and the market opens green and then fades again, basically causing people to finally throw in the towel and say to heck with this.

i think we're due for a turnaround today with a green close. could it be that we're on the precipice of a systemic RISE?

[Bill Cara note:

Can somebody please insert a link to my 36 stock picks. Too busy myself to do this.]

re:ERTS

capitulated BUT the nov max pain shows 30 bucks. why take the risk when there are other buses to catch?

no position.

Regarding "Pilgrim's Pride Corp. (PPC)"

you may want to take a careful look at all open postions... in my humble opinion PPC is about one step from the brink... being forced to file.

no on seems concerned bond market down hard and market down hard. Bad JUJU

Herewith is my list of the 36 candidates republished from October 1:

I have a list of three dozen stocks to consider buying here. Each of these companies has respectable management, financial strength, operating margins, long-term returns on shareholder capital, industry leadership positions, and good products and services. There are problems with some of them, but consider that these same problems were evident during recent times when share prices were much higher.

In order of the GICS sectors, here are the 36 companies and ticker symbols (alpha order) that I like:

Sector 10: Energy
• ECA EnCana
• IMO Imperial Oil
• SU Suncor Energy
• XOM Exxon Mobil

Sector 15: Basic Materials
• Mostly precious metals at this point [25% invested after the $USD reaches a short-term cycle peak in a couple days as the Euro/Pound sinks due to the credit market crisis that monetary authorities there must stabilize].
• ABX Barrick Gold
• DOW Dow Chemical
• GG Goldcorp Inc
• SLW Silver Wheaton

Sector 20: Industrials and Transports
• ABB ABB Limited
• BA Boeing
• GE General Electric

Sector 25: Consumer Discretionary Spending
• None at this point until the credit markets recover
• After an initial rally from an over-sold condition, most of these stocks will likely miss the first leg of the Bull and start to lift say about March 2009

Sector 30: Consumer Staples
• DEO Diageo
• KO Coca-cola
• MCD McDonalds
• PG Procter & Gamble
• WAG Walgreens
• WMT Wal-Mart

Sector 35: Consumer Healthcare
• DNA Genentech
• JNJ Johnson & Johnson

Sector 40: Financial
• Only a few at this point until the credit markets recover
• After an initial rally from an over-sold condition, most of these stocks will likely miss the first leg of the Bull and start to lift say about March 2009
• HBC HSBC Holdings [very strong in the emerging economies]
• IBKR Interactive Brokers [brokers and traders and not dealers]
• OXPS OptionsXpress Holdings [brokers and not dealers]
• RY Royal Bank of Canada [very strong in the emerging economies]

Sector 45: Technology
• CSCO Cisco Systems
• DELL Dell Inc
• GOOG Google
• IBM IBM
• INTC Intel Corp
• ORCL Oracle
• QCOM Qualcomm Inc
• RIMM Research In Motion

Sector 50: Telecom
• MICC Millicom International
• NOK Nokia Corp
• TEF Telefonica SA

Sector 55: Utilities
• CCJ Cameco [not a utility technically speaking but supplies uranium]
• EXC Exelon Corp [uranium utility]

re:IBM

no position.

Nov max pain is 110. With this crazy market, I'd want to see 20% upside.

110*.8=88.

RSI 7 day 13.49.

just watching.

Agree with bobbyo. I though the short financials trade was so well discussed that it would trap a few people.

Seabridge Gold - sold "Noche Buena" (5 kms. from Penasquito)

Last March, Seabridge hoped to sell their Mexican "Noche Buena" deposit in May for $50M, as the first in a string of "non-core asset" sales. In October, they have now sold it for less:

"Seabridge Gold (TSX: SEA)(AMEX: SA) announced today that it has signed a letter of intent to sell its 100% owned Noche Buena project in Sonora, Mexico to Minera Penmont, S. de R.L. de C.V., a joint venture between Fresnillo plc. and Newmont USA Limited, a wholly owned subsidiary of Newmont Mining Corporation. Terms of the sale are US$25 million in cash at closing, a further US$5 million upon commencement of commercial production from Noche Buena and a 1.5% net smelter royalty payable on all production sold for US$800 per ounce of gold or greater."

At least they sold it! BTW, SA's stock price in March was 20; now it's 14.83. (FYI, Fresnillo is the largest silver producer in the world, a spin-off from Mexico's Penoles, a long established silver producer.)

In addition to the LEH CDS unwind, I would think it would take some more time for financial shorts to accumulate, before they were squeezed.

Ah, i remember jokes about buying UYG @ less than a buck, or $5, or something. Below 10, now...

I see an opportunity to load the boat, or dingy on juniors with great resource an NO debt. This would be a 3-5 year hold, the prices are so low, the have been murdered, it would be like buying an option. Need to buy a full basket though, a few should hit homeruns, a few go under, a few go nowhere.

There is a wedge on the S&P: it broke to the upside yesterday and fell down, now broke to the bottom and was promptly bought. If it can get above 1020 we will likely go higher.

in a bear market, bad news is bad news and good news is bad news.

Lots of buying in MICC, RIMM, INTC, WAG, MCD, QCOM today

On the short financials:

Do you want to go into the weekend with the CDS reconciliation overhang and the usual propensity to go short into the weekend? Do you think enough people will be willing to go long into the weekend?

dow low was within 12 pts of the fib I posted yesterday, after such a vicious drop I would think a 38% fib of the entire bull would provide support. Sure looks like an inflection pt/magnet for price.

http://tinyurl.com/3fq25z

Mostly the sm and pm's have bottomed together over the past 8yrs that I've watched althought their tops are sometimes very far apart. If the sm bottom then it may be good for anyone holding pm's.

Silver looks like it will break about the 2hr hs top neckline so maybe the silver miners do some catch up today?

Does anyone know whether Kitco quotes on gold are real-time or delayed?

TIA for the help.

I think the market slide today is due to a subliminal collective depression over the US debt clock having suddenly run out of digits. kaimu's IT'S THE MONEY, STUPID is sinking in finally and the prospect of the USSA filing for bankruptcy is suddenly dawning on everybody.

(Not that it's too big to fail, of course!)

HA!

re:YRCW/CNW

full disclosure - long both.

CNW capitulated on Oct 3, retested the low on Oct and reversed. RSI 7 day now 41.71

YRCW capitulated on Oct 6, retested on Oct 7 (making me wanna puke) and reversed. RSI 7 day now 28.39. But NOV max pain dropped to 7.50 so I wouldn't be a buyer.

ronbon,

The KITCO Ticker on my desktop is supposedly live, complete with time and date.

Hope this helps.

Regards

setting a RIMM sell limit at 75, Oct max pain

ronbon,

they are realtime but very unreliable by many dollars at times. Use netdania if you can for live quotes.

Can anyone suggest a good place to find a nice chart of the historical gold/silver ratio?

Silver perking up this morning, liquidity beginning to reappear?

Brazilian ADRs up 8.8% today. Real up 4.5% (USD down)

http://nexalogic.com/brazil.html

----

Stats SouthAfrica: South African gold production down 24% y/y

Why would silver be up 1.3% today and gold down 1.9%?

Could late yesterday's and today's selloff in financials be a setup to sucker the shorts in and squeeze them?

U.S. plans to inject capital in banks in exchange for common, preferred shares: financial policy source 11:41am EDT - Reuters

re:FSLR

shouldn't have bought this one but I bought it as a countertrade to drop in oil prices, figuring oil prices would bottom and reverse a bit.

anyway. set a sell limit at 185, Oct opts expiration.

Historical gold/silver charts (and many others):

http://www.chartsrus.com/

SiO2

Maybe a good question would be, why is silver down almost 50% from its peak while gold is down only 10-15%?

I think gold is the real safe haven (not silver) and silver is a better measure of available liquidity in the market.

Can anyone elaborate?

[Bill Cara note:

A much larger part of the total demand for silver comes from the industrial uses, which lighten up during periods of economic recession. A greater part of the total demand for gold comes from investment accounts that seek ownership as a $USD hedge, a higher quality safe-haven instrument, and the like.]

Bill's list of 36 stocks (a link to his Oct. 1st WIR) where he first listed these.

http://tinyurl.com/4yyqn2

Billy - Silver/Gold performance - Possibly due to the potential uses of these materials in industrial processes? I would think silver is more desirable in good economic time than bad? Gold is simplest form of money and has limited industrial relationship?

Bob Hoye says the gold always outperforms silver in a contraction, going typically to a 100:1 ratio, I think because silver has some industrial uses and gold is seen more as a safehaven.

Re: Why Not Push Gold Prices Off A Clliff?

Well, they tried that in 2000. The British sold off their central bank holdings into the market, as well as the Canadian holdings in an attempt to hold prices down.

Many attempts have been made to suppress the bulliion price, at times successful, but the waste in capital has been unreal over the last few years.

I'm pretty certain that the sum total of British central bank supply is expended, though we often see declines on the LME, when there aren't any in other markets. The Canadian supply sold to private banking interests is now making its way into the markets since that time, but more slowly, hence the significant lag in Canadian dollar gold prices.

Much of the gold sold off years ago is winding up in the coffers of gold etfs, and very probably in the central banks of developing countries. We'll never, ever read about this transfer of wealth in the papers.

Vending the public trust to private interests is an impeachable offense in the United States(though they still get away with it), but nothing of the same is ever suggested in Britain or Canada. You simply can't say that in the press in either of these countries.

I would presume that the Canadian dollar is in for a painful rout, if the gold price in that currency is to catch up to the rest, or perhaps that its banking system fall into disrepute. I would be watching for signs that bullion dealers in Canada are running out of supply. They certainly have run out of silver in the past while.

buy on rumor, sell on news?

Why would IBM release earnings early?

Putting a Chipper Face on IBM’s $1 Billion Miss
http://tinyurl.com/46zjvn

Coincidentally, I was reading IBM Redux last week. Sounds like they did well getting out of the PC business.

Fitch Affirms IBM and IBM Credit Ratings
Business Wire, Sept 10, 2001
http://tinyurl.com/43rmb2

They had $22.1B in debt covered with that rating.

Fitch Affirms IBM's IDR at 'A+'; Outlook Stable
Business Wire, August 5, 2008
http://tinyurl.com/4gmm5w

They had $44b in debt covered with that rating ($34b if you take out unused line of credit)

Seems pretty stable to me. nobody (but 204,587 people) ever got fired for buying IBM.

http://tinyurl.com/4cmmlk

IBM is beating the index, down only 23% vs 37% for S&P.

Buffett's book "The Snowball" is great so far.

"What you're doing when you invest is deferring consumption and laying money out now to get more money back at a later time. And there are really only two questions. One is how much you're going to get back, and the other is when."

Another one caught my eye.

"As of a couple of years ago, there had been zero money made from the aggregate of all stock investments in the airline industry in history."

Hopefully nobody else is reading it.

wavesmash,

Great Buffett quote. Let's contrast two ideas:

Investing: Deploying today's capital for tomorrow's returns.

Government: Borrowing tomorrow's capital to pay for yesterday.

ronbon, check out quotelist (just google "quotelist"). it is a real-time java currency and gold/silver/oil monitor.

hey mikede!

noticed your post...

and, er.r.r.r... would one of your candidates be Eastmain Resource (ER.to)?

great projects; frugal management with lots of skin in the game; enough cash in the till to fund exploration budget for the next 5 years - at present rate.

lots of interest from the majors, incl. its jv partner GG - in Eleonore S. deposit - which owns 9+% of the shares.

yes, I'm long and have added to position recently.

FranSix - Thanks! I've noticed great strength in the Cdn. dollar on the 10 yr. chart. If it were to fall in the near future, wouldn't there be a negative price impact to Canadian stocks listed on US exchanges? (do I have this backwards?)

QQQQ - sold OCT 31 puts short

Nothing has changed, corporate debt is still not moving, the debt overhang will pressure everything.

SPY just bounced exactly from the 23.6% fib.
SPX is going down to the 2002 lows when this fib is broken decisively, there it will be time to take another look.
This might happen very quickly in the current environment.

No change in major positions.
Bought a few Nov. QQQQ puts with spare change for short term trading.
QQQQ has been fiddling around a fib @ 33.20, think it is about done, next target 28.

Yes I think if the $CDN fell in a pinful rout, then it would negatively impact US listed stocks vis a vis the $US value.

A counterintuitive move in the Canadian dollar is also possible in either the $CDN or the $US, since nobody recognizes that a firm currency is the result of deflation. Gold prices certainly have not depreciated in a loonie runup, as they have also made gains the the Yen.

I haven't seen any analagous material about this phenomenon from historical charts concerning the British pound during the depression.

Certainly the Yen has been behaving as if it has a defacto peg to the $US.

For those who missed it, the conversation this morning on CNBC between hedge fund manager (and noted short seller) Jim Chanos, and former FDIC chairman Bill Isaac regarding mark to market rules was rather interesting. At several points the conversation got somewhat contentious.

Chanos argued for keeping mark to market, while Isaac argued that it should be suspended (or eliminated) for the time being.

Isaac said the market for mortgage securities is illiquid. Chanos said the reason it's illiquid is due to the failure of the banks to be willing to realize losses.

Chanos said that investors like him are sitting there ready to buy mortgage securities at 10-20 cents on the dollar, while banks are offering them at between 60-70 cents.

The point being that the spread between bid and ask on these mortgage securities is too big and disparate that the government had to come in and say, ok, we'll take all that bad paper and we'll pay the banks what they want to get just so the choice banks don't have to fail.

The notion that the government (U.S. taxpayer) is going to come out ahead on this bailout package is an absolute fantasy. It was put forth in order to sell the bailout to the American public, but professionals who have cash on hand know better, and it's being reflected in current stock market action.

Isaac said the economy was in much worse shape than it is now back in the early 80s. But the question is, what were the collective unsecuritized debt levels held by individuals back during that period ?

IMO, the markets will ultimately fall to a level where those losses that need to be realized (but have been sheltered or hidden) in the financial system have been fully discounted.

Here's the video:

http://tinyurl.com/4geam3

SLW is consolidating just over 6 and looks to have completed a falling wedge.

Volume/accumulation looks positive, I would say it looks like a reasonably bullish setup.

It should break to the upside on high volume soon, taking out the upper wedge trendline which is now just overhead around 6.50.

If it doesn't do that, watch out.

SLW:

That was the lower (not upper) wedge trendline just overhead aroung 6.50. It is still outside the wedge to the downside.

The upper wedge trendline is up around 9.70 (today) amd falling. That is what you want it to take out fast with high volume.

re: LLY

approaching capitulation

No position.

Re: To Continue Why Not Crash The Gold Price?

The whole restriction on the gold price is the physical nature of the money. Its hard money priced in a basket of currencies. If somebody asks for physical delivery in the middle of a commercial signal failure, then banks can come crashing down.

There has to be a supply deficit on the COMEX, which is continually papered over with gold leases. The gold supply has to come from somewhere. I believe the source of this action comes from within Canadian banks, or perhaps numerous countries around the world with similar sources of gold.

This supply is diminishing year over year, and many central banks are wary at this point about dumping any more gold. Only Canada is the worst off because there simply isn't a brick of gold left.

The US commercial banks are almost wholly devoted to the runup in oil prices, probably the focus of its geo-political interest in the sector.

But Canada, on the other hand, like many gold producing countries has geo-political interests tied to the gold markets. The oil sands are only productive above the $60/bbl. price requiring heavy input of natural gas and water to produce a barrel. But the gold sector has some of the richest mines (in terms of grade.)

When the money supply starts to evaporate and hard currency comes under demand, as we have seen this past quarter, then the same conditions apply for bullion.

FranSix - My intuition tells me that Japan intends to stabilize their currency with $US. This is because Japan (and I presume most of Asia) have ingrained in their DNA a self-sacrificing gene for their best customers. Believe me, I've witnessed this up close in terms of Japanese culture, so yes, I would anticipate a peg there...

It seems there should be a way to leverage the de-leveraging of currencies, but I'm a true believer in KISS, admittedly to a fault.

dropping JCP limit order to 25.10

LLY capitulation RSI 7 day <10

Now watching hrly MACD

Seems to be a rout on CAD at 12:30pm today.

http://tinyurl.com/3tvrgr

$0.87??

Hope it gets stronger before Black Friday.
http://en.wikipedia.org/wiki/Black_Friday

(not the 1869 one, the shopping one)

Stupid article about Canadian Banking System being soundest in the world. That was supposed to be a secret. :)

ToddinFl - Your observations are parallel with mine. We're stuck in the mud with interbank lending until the public eats up the toxic paper. We all know this means much more than just $700B. Meanwhile the market stalls if for no other reason than extortion.

Why is it Hedge funds are being forced into liquidation and how do the pieces of that puzzle fit into the big picture taking such a large bite out of equities?

TED spread is back up above it's previous highs...

pappdjavul

Thank you for your T&A on SLW.

Hedge Funds are liquidating because of:
1)Margin calls,

2)Increase in margins,

3)Banks pulling credit lines (so they can't buy on margin),

4)PPPerformance leading to customer redemptions

ehh..

3)Banks pulling credit lines(so they can't buy on margin)

As I crawl back into bed and pull the covers up over my head...

Pookster:

That's how I feel today...this is like watching paint dry.

From the GATA page on Black Friday:

"Quick as thought, men realized that it was not safe to sell to the clique brokers. Scarcely anyone now wanted to buy. All who had bought were mad to sell at any price, but there were no buyers. In less time than it takes to write about it, the price fell from 162 to 135. The great gigantic bubble had burst, and half Wall Street was involved in ruin."

http://www.gata.org/node/4656

Sounds like the oil market this year.

Whoa, here comes buying from somewhere.

Rob.

Chickenpookie said:

"Why is it Hedge funds are being forced into liquidation and how do the pieces of that puzzle fit into the big picture taking such a large bite out of equities?"

When you have the federal government (U.S. taxpayer) taking on the financial obligations of the banks and other financial companies that took terribly irresponsible actions, then informed investors take note.

Informed investors see the levels of unsecuritized excessive debt, the misappropriation of taxpayer money, the unnecessary waste, and ultimately a severe decline of our financial system.

When you have uncertainty in the markets, people pull their money out first, and ask questions later. Fear almost always trumps hope and greed.

Mr. Paulson is by all accounts a very accomplished and seasoned market veteran, and has vast knowledge on the workings of complex financial instruments.

That said, Mr. Paulson is not a very good public speaker. He may have a stuttering problem (I don't know), and if he does, then that's certainly not his fault. But every time he speaks in public, it looks as if he was just informed that he lost his job, his wife left him for the mailman, the dog ran away, and his house is being foreclosed.

Paulson does not instill ANY confidence in these tough financial times. Bernanke isn't much better. Ben has that monotone voice and eyes glazed over look of a deer in headlights.

These are the men that are charged with righting the ship and with getting the economy and our markets headed in the right direction.

Unfortunately, their body language may convey more truth than they wish to reveal.

Just my opinion.

[Bill Cara note:

Paulson is not getting much sleep I would guess. But that's to be expected in a crisis from people who are serving many masters.]

Anyone think it's meaningful that the TED spread continues to widen, or at least not to contract, and the markets worldwide appear to be trying to put in a bottom? Until yesterday (or Tuesday perhaps), market declines and TED expansions were joined inversely at the hip.

The VIX is also acting toppy and we may have seen the worse there. The VIX and TED have also been moving in lockstep until just a day or so past with the VIX pretty clearly wanting to decline.

If true, then an expectation that a very sharp rally would ensue if the TED spread did contract seems reasonable. If a rally occurs, the VIX would rapidly decline.

Both VIX and TED are at such extraordinary levels it may not be possible to drive them much higher without new, very grim and unexpected news. On the other hand, it seems more likely that good news (relatively speaking) such as cash injections into banks and businesses, moratoriums on foreclosures, further Fed rate reductions, etc., are far more likely to occur than more negativity. After all, if the belief that the world financial system is insolvent is already priced in what's left?

Joseph:

Liquidity injections have been taking place, and the TED ticks topward (had to do it). What will it take to get the TED to topple (sorry, had to again)? Paulson's plan productively produces? Also, we now have the CDS chimera coming home to roost this weekend, which introduces a new dynamic that has yet to be experienced-mmmh Hendrix. Of course, we have Kaimu's (take a bow) "C" word. There is no confidence: in government, in the markets (opacity on CDSs and MBSs, etc).

So what is there to move the market forward? What is there to improve the psychology?

Is Bill likely right that global reflation will ignite the market? I for one, wouldn't bet against him? But, for all the good companies to invest in (Bill's 36) how many not so good companies depend on credit to operate? How many of them do business with the 36? So, when the TED spread, or other measures of confidence (doh! Kaimu again, HA!) in the financial system begin to improve then the chains will come off the bull.

Disclaimer: NEMO is commonly seen as a contra-indicatory

XTO Energy Alert--

Last Friday, Bob Simpson, CB, CEO, sold 2,776,903 shares, dollar value $101,320,929.

Last Friday, Vaughn Vennerberg, DIR, VP, sold 160,000 shars, dollar value of $6,010,811.

Insiders dumped $107M, and today XTO is down 12% to $34ish.

Well earlier they used BA, GE and XOM to push it down, now it's GE, WMT, XOM.

A question for Vadym Graifer:

Vadym, Are you making money in this market? IS there hope for me? How does the current environment lend itself to day trading and what tactics should I try? (yeah yeah buy low and sell high, I know)

Per Vad's post yesterday, sounds like he's reverting back to a high frequency scalping nature:

"One of the most bright examples was ADBE which I traded a few times - haven't had enough confidence yet to hold for hours so was taking profit on spikes and re-buying pullbacks."

how else can you make money in this environment?? i'm getting close to my puke point.

This market is just Blahhhhhhh. No conviction anywhere.

Going for 7th day in a row of red.

Can't even buy a Oct in the money call for CHK. It fell off the chart.

The spring is loaded for ADBE; a scalp-able jump up or down is in the works--

Bollinger Band within Keltner Channel:
http://tinyurl.com/3nhnbo

MMA Compression:
http://tinyurl.com/4e5a9r

Looks like I may have to bail on GE at its infomercial price.

At least the weak CAD will help a bit.

Man there is so many bargins out there. How come nobody is buying them?

ALOHA !!

HANK PAULSON LOOKING LIKE A FOOL ...

In Spring 2007, Secretary Paulson told an audience at the Shanghai Futures Exchange that "An open, competitive, and liberalized financial market can effectively allocate scarce resources in a manner that promotes stability and prosperity far better than governmental intervention." [18]

In August 2007, Secretary Paulson explained that U.S. subprime mortgage fallout remained largely contained due to the strongest global economy in decades. [19]

On July 20, 2008, after the failure of Indymac Bank, Paulson reassured the public by saying, “it's a safe banking system, a sound banking system. Our regulators are on top of it. This is a very manageable situation.” [20]

On August 10, 2008, Secretary Paulson told NBC’s Meet the Press that he had no plans to inject any capital into Fannie Mae or Freddie Mac.[21] On September 7, 2008, both Fannie Mae and Freddie Mac went into conservatorship.END

Now look ... he is the HEAD INTERVENTIONIST OF THE MILLENNIUM!!!

bobbyo
Here is an excerpt from Canada's premier HB&B in the RBC Weekly Investment Strategy Weekly:

'The sufficient condition for a sustainable rally remains absent. A bottom in the stock market does not happen just because everyone else is negative, or because “lots of damage has been priced in”, or because of any other such heuristics. A sustainable bottom happens only after the underlying fundamental outlook begins to stabilize and then subsequently turns up. In our opinion, objective measures of economic health – i.e., the leading economic indicators (e.g., NFIB, ISM, Conference Board’s leading index) – should provide the best tools for managing portfolio risk, and they are still locked in downtrends.'

http://tinyurl.com/yqhmnk

27 new 52 wk highs
1917 new 52 wk lows

we gonna have to bounce to the upside one day

CHK - not long ago it was being touted at $38, now you can have it at $19...

Per Bill's comment "IBM is never going to disappear. As soon as the economy turns stronger, it will be, as the leading company in hardware, systems and services in the world, one that will be a leader in the market as well. Put writing today generates more income than usual because of the extreme volatility in markets. To the extent you are risk averse, you would write deeper out of the money puts, and take in less income but also protect yourself with a lower cost basis if the stock is put to you."

That advice is so "gangsta"

I wonder if any paid financial advisors give this type of advice. prob not.

stop calling bottoms. :)

Nobody looks at fundamentals in a bubble. Air is what drives a bubble larger.

Just because you can buy $1.99 DVDs at Wal-mart doesn't mean you should. (though there are some good ones)

Saw this on Wal-Mart classifieds (competing with Craigslist?)

Foreclosures For Sale
Enter your location to get better results.

Results 1 - 27 of millions |Next » Sort by best match Sort by posted date Sort by price: low > high Sort by price: high > low List |Photos |Map

http://tinyurl.com/3qtrzu

Is our market structured in such a way as to avoid the crash and therefore "incentivize" the drum-like cadence down?

Boom, down, boom, down, boom . . .

The market is suppose to be ahead of the market indicators not in line with them. If the market just traded with the econmy it would be a lot easier to trade.
Bob

goldbug58,

CHK has been in a downtrend on every timeframe from daily down to one minute. It's been a great short, but I like the company and will buy more when it shows some life. (It's dropped $.50 since I started typing this posting).

my confidence in a turnaround is waning...

SPX / NASDAQ testing the day's lows? If they crack, in the oh so eloquent words of scooby-doo: "ruh roh"

agreed, bp, just couldn't believe its dropped so fast

All this egg money is starting to add up...

8 Handle on the DOW???

Ryal Bank Of Canada...RY........down $ 3.06

sv

Anyone considering playing the now regular "3 'til 4 drubbing" ?

I haven't convinced myself yet but I might try a pocket money position in SKF.

I sense from some of today's discourse that minds are starting to work around my idea that there is an opportunity to trade with a $CDN hedge. When the CAD is dropping as rapidly as it has of late, despite general concensus that the Canadian economy is in the strongest position of G8 nations and running Current Account and budgetary surpluses for some time while actually paying down the National Debt- I must wonder when reality is going to come to the trading floor. I've suggested goldminers at this point, but are there any other ideas out there?

WE WERE WRONG ...

THIS BABY'S GOING DOWN.

also
Did you guys hear Maria B. coming out of the 3pm commercial?

"ARRRRRRGGGGHHH"

2nd one of those of the day from her, must be a question of timing, specific reference to the monthly lunar cycle.

More sad trading faces today.

http://tinyurl.com/4tzrov

Hey,
The market is crashing again. Surprise, surprise!!

I'm glad they're only taking my money or I'd be really mad.

Hey, didn't we sign away many of our freedoms just before they took this last 20% from us?

Oh yeah that's right.

Maybe it's time to get mad!!

Rob.

Hello all,

All of this market panic is ridiculous. THis is not the end of the economic world, nor is it the beginning of a new great depression that will swallow the world. But I do think it serves a purpose for some.

I have offered suppositions on occassion in the past as to why the markets are in their current state. Here is a far more concise and articulate veiwpoint which mirrors my own in many regards. I think it is worth time to read for those interested in macroscopic economic socially-engineered changes.

http://tinyurl.com/538tyn

Hope it provides useful insight.

Sincerely

I am surprised that people here are treating the market moves as if they were the standard emotional games played by HB&B. Why not focus instead on the LIBOR rate and the TED spread and exchange opinions about how they are likely to evolve? The money will move into stocks when they come down. If someone thinks that the stock market can start moving up without the LIBOR & TED coming down, I would love to hear the reasoning!

It's always a bull market depending on your timeframe. 8000 is only 10% away

Now the S&P is 40% off it's high of last year.

I'm glad I still have 25 years until retirement or I'd be eating dog food and burning furniture.

Rob.

Dow under 9K - is there support anywhere out there?

Hehehe, what about that financial short???

It's the frog and the scorpion-shorts short, that's what they do.

Although, for the stony cojones among us, given the move in SKF over the last week, I would think profit taking, and thus UYG tomorrow, would be a good play...for the day.

Next,
just to make sure everyone gets screwed they'll bring the market back up 10% while they crush gold and silver.

Then the only ones left standing would be taxpayer supported HB&B.

Rob.

shark,

the record for this week so far:

Monday - beautiful day, very active, can do no wrong.

Tuesday - in the red, a few stops first half of the day; wins later on recoup part of losses, not enough to fully offste them.

Wed - explained in the room what went wrong on Tue and how I intend to correct it. Result - can do no wrong day.

Today - low volume jerky holiday environment, positive day but nothing stellar.

As for tactics to employ, surely you don't mean for me to re-type here couple books and over 30 videos... :)

here is my suggestion if you strongly refuse to study those (grin). Every day after market close a trading log for the day is being published at http://www.realitytrader.com/tradinglog/. Go over every one of this week, open intraday charts, mark my entriy and exit calls to see the setups I take. Read the comments, questions, answers... it will take you probably a good few hours but will give you a window into the approach.

I am still reading through today's discussion and I just came to posts by Joseph and nemo -- that's what I wanted to hear! And more of it!

Each day I see my longs headed further south. I've been selling calls, but now I think I should be buying some of those the high flying ultrashort ETF's (SKK,TWM,SJH)...but is it too late? (scratch head)

RBS a good purchase today?

Let's see if OPEC put's the screws to us next month. That'll be a public relations nightmare. Anybody for 60 handle on oil?

RBS under $40 CAD would be a good entry pt

I finally gave up
I have seen everything in 10 month one may see in a life time.

Old News.. but ROYAL BANK gets hurt today

Royal Bank settles with fed and state regulators to resolve claims that they misled investors about the safety of auction rate securities

Royal Bank will buy back 850m of ARS and pay 9.8 million in fines...not that bad

but Bank of America has to buy back
$ 4.7 Bn of debt instruments and pay fines of 50m

sv

Will do Vad. I literally need to stop trading at this point and totally re-evaluate what the "heck" I'm doing.

On a totally different note and directed at the room in general, allow me to postulate that short of anything dramatically improving, and I strain my brain to imagine what that thing could be, I assert that an important Dow trendline at 10,000 has been decisively broken and that we MAY be entering a "big bear" market, a super-bear lasting perhaps.....years. aaarrrrrgh!

Vad's such a good guy...

HXD.TO a good hold from here?

Again, not betting against Bill.

O.K. we have to suffer through some CDS to see if we can handle that.

Next, are the jumbo mortgages in early 2009.

Next, state budgets. Anybody seen tax revenues? How do you finance. Can't finance, gotta' cut.

Who is the biggest employer in the country-governments...

Now that the bailout is approved HBB can bomb the market into oblivion. Covered my last RTH short position. Now long only at 75% allocation and underwater. Entire trading year gains wiped out by being too early on the long side.

The funny thing is that I am much more profitable and consistent trading short side than long. Most likely explanation is that shorting does not create any emotional attachment to the stock, going long does. Can't do much about it.

I am now salavating. cant time the bottom but when we do reverse its going to be violent up move.

rimm and ibm holding ground thus far. great sign. maybe great candidate for selling puts buying calls soon

Gold going vertical. I should just stick to CEF.

nemo... what did I do this time?? :)

My 1 share of BRKB is down $844.14 in the last 4 days.

At least it wasn't class A. Down $28,000/share!

Buy and Rick Roll'd.

http://en.wikipedia.org/wiki/Rickroll

BRKA at Infomercial Inflationary Pricing.

111,999.99 6,000.01 (5.08%)

It will come back next week probably. (50/50 rule in effect.)

I'm sticking with Bill's call as well. There are a couple of stocks that at least for now, have stopped going down. The one I'm holding that has been buried recently, ANSS is one, RIMM's doing OK today, as is IBM, APPL MSFT. Plus the Nasdaq is not participating in today's drubbing to the same extent that the S&P is. We probably have IBM to thank.

I'll take it as a positive (admittedly about as positive as watching your car fall of a cliff and saying "could have been worse, could have left my wallet in there")!

[Bill Cara note:

Most stupid question yet from a Bloomberg anchor to his guest: "The market is in a panic; how many points down could it go?" At times like this, you just turn off the TV.

Now that HB&B has got at least a couple trillion (probably much more) out of world govts, they will likely be asking for double down. Having started down this slippery slope, there will be no end to how much HB&B will demand, and get. I suppose the end will be when the Credit Default Swap market is totally unwound. That's what? $70-80 trillion? The governments of the G-20 should together declare emergency law and demand all the shares in all the banks in return for these bail-outs. Making sense of this fiasco is impossible.

Anyway, this afternoon could be the capitulation the market needs to seal the bottom.]

Ok I caught a piece of the EGO move off of 5.50 and sold too early of course but still.

Vad: Laid out your beats for everybody

Does anyone out there dispute that the shark has been vindicated for being bearish?

I'm bullish stocks,

Bearish the financial system and the banks.

which matters more?

Sold DE @ $40.75 that I bought a few days ago at $34

I was hoping to buy it back at close, but it is still holding up.

I just bought XOM @ $68.16 and SLW @ $5.79

AAAAYYYEE CARRRRAMBAAAAAAAAAAA11111111

Never thought I'd be buying under 9k on the Dow.

CNBC is using the "crash" term! Get you checkbook out!

Well my first beneficial thing all week was to close all longs & switch from DZZ to DGP when the markets took out the day's lows @ 3PM. "Ruh roh" indeed... This thing is freaking scary!

XOM,CVX,COP,MRO all hit new lows today. MRO was up for most of day. USO down a lot but UNG up a bit.

Nemo I think uyg would be a good bet here but there is no way I would hold this over night. No guts no glory. What is happening here.

bought some LLY, DRQ, JCP.

As one who has been long way too early and now hedged, I'm kinda shellshocked, but seeking the other side: I would think there are sideliners putting in stink bids right now.

I can't believe my eyes, or the $ figure associated with my brokerage account!

My BA, KO, SLW have all been crushed even though I got in only 2 or 3 days ago!!!

I'm still 45% cash. Without a clear bottom, I'm not going to cherry pick anything, because the amount of wealth destruction that I've witnessed is immense!

Bill's bullishness is likely right and makes sense, but the timing is crucial here. Call this a shakeout or whatever you like, but we're already well past 10% lower than when a lot of us started pulling the trigger on new buys!

At 3PM SKF was at 173! Currently at 183!

spot gold zooming $913 into market close.
is an after hours announcement in the works?

I'm going to buy a little bit if we get in the 8500s.

As I see all these remarkable declines I keep wondering:

"How many towels are there to throw in?"

How many people besides me could still be holding longs?

As for me, I felt good about missing the 30% drop in the S&P from last October until I went back in.

But this last 10-12% has been especially bitter, since I thought I was so smart in missing the first 30% drop.

We won't need any of the money for 15-25 years but it just makes me mad being so screwed by HB&B again after thinking I learned to stay ahead of them most of the time.

My trading account is locked up with DIA calls and SLW calls and even some UYG calls.

Luckily the one smart thing I did is to buy expirations for March-April 09 so if we stop dropping soon, we may rebound enough for my trading account to be above water by then but it's not looking good right now.

With that said I'm not selling anything. Let them run it to zero if they want.

The other smart thing we did is use most of our disposable income to pay off debt including our house, instead of leveraging our lifestyle and dumping all the money in the market. Those two decisions are proving to be the smartest we've made so far.

Rob.

I'm bearish, but there's been so much money made on the short side this week, they'll likely take some out tomorrow.

But...primarily short until central banks and Paulson prove they can do something.

When the averages capitulate, it'll be time to go "All In"

Not yet.

I'm gettin' dizzy... someone please make it stop...

From CNN.

"BREAKING
NEWSDow falls over 600 points or 5.46%. Gauge of investor fear - an index known as the Vix - hits an all-time high. More soon."

When's soon?

Somebody big must be getting margin called in here...

GE down almost 8%.

S&P monthly lower bollinger band is at ~1080. This has to be the worst selloff in history in the timeframe.

CDS settlement for Lehman was today. Perhaps some parties couldn't settle?

Fazeli,
I feel your pain. I was in all cash until last Thursday. Now deep underwater.

What must the buyandhold forever crowd be thinking now?

They have to be back to 2001 by now in their portfolios.

Rob.

mabey we need a 1000 drop and circut breaker shut down of the markets to really put the fright i people.

then america will turn into russia with banking, trading and food shopping holidays while US forces sieze breakaway republics of puerto rico, cuba and alberta....

DOW 6k in the next few days?

Anyone buying at the close? ;-)

hard to believe but the averages have not capitulated.

We are at capitulation on the weekly charts no? S&P RSI(7) = 6.99

damn...i didn't even have time to post that i bought RIMM puts as a hedge and then sold them a half hour later for a 80% gain. if that's not an indication of absolute panic, i don't know what is.

maybe, just maybe, we're seeing the bottom.

Hate to say it, but it looks like Cramers 8,000 call on the DOW is looking like a good call.

I'd be buying some LLY here. Already long.

Rob:

That's the point...the financial system won't start loosening up for a month, well, unless Paulson is fibbing (nawwwww) and will have something moving in another week or so. Until then, the dynamics that have created a liquidation environment are still in place. The shorts are going after financials now, but they'll soon go after companies that have burdened balance sheets, forcing more liquidations.

Chickenpookie... hang on... we still have 7 minutes...

Daily List Of Companies Reporting Lehman Bros Exposure

http://tinyurl.com/4x9h7w

Place your bets...

Maui Land & Pineapple Co is down 12% today.

need to see RSI 7 day <10.

not there.

bought some JCP.

The DOW is 2200 points lower than when I bought just one week ago.

I'm thinking those DOW calls will expire worthless.

Rob.

remember a saying from the 2002 bad times.

When they raid the cat house, they take the good and the bad girls.

MS, GM, and C don't seem to be trading like they're under any protective umbrella.

They're looking like no stop until zero.

BAC is looking pretty sad too.

How many people can still be long at this point?

Will we see the entire 90's bull market erased by next week?

Anyone involved in managing other people's money must be in hiding right now.

Rob.

GS @ $100
XOM @ 67.60
MSFT @ 22.20
SLW @ 5.73

I know I'm alive because my solar plexus tells me so.....

Too scared to sell...to afraid to buy!

plan ur trade and trade ur plan.

look for capitulation in various issues.

pull the trigger

play small ball (small positions)

I apologize if this is old news.

Apparently the culprit of today's weakness came from S&P downgrading GM and AA's credit rating. Well, where were they a few weeks ago? If they could keep doing so and squeezing TED.

There's no way I'm selling now because as soon as I do it will turn around tomorrow.

So, for now, I'm wearing the trapped buy-and-holder hat.

It's just too bad I didn't wait one more week after waiting nearly a year but I did put anticipated gains ahead of risk management. Looks like it's beer-30.

Rob.

i cant complain considering the gold miners held up well today amidst the slide.

i take this a good sign that when the panic dies down they will trend higher without the broader market holding them down as the good gets tossed out w/ the bad these days.

i am wondering if the problems w/ a shortage of metal for purchase will see increased interest in the miners?

Averaged down CHK, picked up SID and DRYS at the close. Happy Trading

Rating agencies always arrive at the scene of battle to shoot the wounded

Kick em when they're down, kick em when they're down, kick em when they're down!!

Rob.

I may be stupid or foolish but I am thinking of buying tomorrow morning. OIH for my long term account. Any ideas?

end of september 2008 I was up around 70%
not now gave up most of it

Wait...

I wouldn't want to go against this kinda momentum until you can see it break...

Did we get the massive volume that accompanies capitulation?

My neighbor down the hall who trades just came in and said, "This market is like playing football with four teams on the field; So why am I surprised when I keep ketting the hell knocked out of me?"

dr. cosa -

I believe Kaimu said recently that when physical gold is unavailable people will buy the stocks, and when the stocks are too high...I forget the last part.

When the market bottoms I think these gold stocks will take off, as their ratio to the gold price is at all time lows. The central banks seem to be defending the 920 level.

Sept 2003 DOW was 7700, Hope we do not go there

dapoopa,

Not even close on the DOW JONES, NASDAQ was high but not significantly so.

Just as a small fundamental consideration, you can't really say we've bottomed until GM goes under, and the psychological toll that will bring.

After hours DOW flirting with 8599

yeah... that's scary... maybe tomorrow won't come...

GM has $300 billion in debt.

From chapter 1 of Warren's book.

"This is half of a page which comes from a list seventy pages long of all the auto companies in the United Sates." ...

"But of the two thousand companies, as of a few years ago, only three car companies survived."

96% of GM shares are held by institutions. 25% of float according to Yahoo are short.

Man, I'm not going to read chapter 2.

Mark-to-market & up-tick rules:

Whatever happen to this? They don't need congress' to vote on. Aren't these "less-costly" changes that can change the landscape, perhaps even a little?

TWM is at 132...I had this at 61 2wks ago
SRS is at 142...I had this at 70.

These prices are just mind-boggling. Anyway, absolutely no one can predict a bottom. It's close to impossible. We could go to 5000 as easily as 11000. And we could still be bullish all the way there. GLA

even so... they gotta be trading way below book.

Dr. Cosa,

NOT.v up by 22% today
GIX.v had a great day yesterday.

Looks like the juniors are waking up.

Rob,

I read you story and I felt like I typed it. I sat out so patiently all these months. Even when I started 2 weeks ago, I started in small bunches. In the first week I went in 25% of my cash, and in the second week 25% more of my cash, each time buying big dips and averaging down or taking new positions in what I thought were great plays.

Regardless of the fact that these Cara100 companies will come back up "eventually", I feel utterly foolish for having ridden them down for much more than 5-8%.

Sitting at 45% cash both in IB and in my RRSP!

Insult to injury: I waited all these 2 weeks to buy some XSP in my RRSP (small position), and I did so today when S&P was flat. By day's end, I had lost 7% on that single play!

Re: Anyone Buying At The Close? ;-)

Watching JNJ fall from 68 to 57+ in five trading days was too much for me, so I could not resist...
Finally got 200# filled @ 58.73 in the furious last few minutes.
This is a long term hold for me. IMO, it's a baby thrown out with the bathwater. I found solace in the Aug 29 Value Line report and that it sits on the Cara 36.
Yeah, I'm experiencing buyer's remorse already. Maybe that's good.

Could not resist a buy of DGP at 20.61 as well.

I have been following this technical analyst and he has been spot on. He says a break of 990 targets 820, another 10% loss:

http://blog.stockmarketharmony.com/

I thought lower crude would be good for refiners, but Frontier, Valero, Sunoco, Holly Corp - all have been getting crushed - guess they're being taken down with the rest of the market...

It's been a long wait, but today we committed capital to the U.S. stock market--we were buyers into the close.

Could have a bit more downside tomorrow but we believe the risk/reward now favors the upside. If our scenario plays out, market prices should exhibit a huge reversal in the next few trading sessions. Then all of the cash on the sidelines will be chasing the rising prices of an explosive rally. Stay tuned!

JWibbs
http://www.2globalmarkets.com

Well I'll throw something out here on the lighter side... any of you know of anyone needing debt mgmt advice... send them here:

http://tinyurl.com/37gth4

Rocksfall [beat this!]

I had TWM at the end of August at 67.25 [most on margin].... but got scared the day after the Paulson plan was announced. Sold it at a loss of -$1500. Ready for this...

TWM = 9000 shares x [132-67.25]= $582,750.00
in potential profits I loss. Can you believe that. This has been eating at me like cancer for the past 3 weeks. Already dropped 12lbs. I will never have a chance like that again.

QID is another story...@40.64 ... sold 6000 shares at 49 but only to see it hit a high of 84 today.

So tell me folks... am I not the "King of Densa" hands down?

On a positive note, now I can devote the time I used to watch the market to reading Bill's and Vad's book.

"An investment is a trade gone bad" - bsi87

I am an investor :)

Re: Central Banks defending $920

Read this article:

"Bank hoarding pushes up gold borrowing costs

Jonathan Ratner, Canwest News Service
Published: Thursday, October 09, 2008

The cost of borrowing gold has surged to its highest level since May, 2001 as central banks appear to be hoarding the precious metal.

The one-month lease rate for gold has soared more than threefold, to 2.68 per cent, in just over a week and the parabolic move - symbolic of the expanding reach of the credit crunch - has experts labelling it another bullish sign for bullion. Prices continue to hover around $900 US an ounce after rising 22 per cent in the past year."

http://tinyurl.com/3pk7b3

http://www.kitco.com/charts/popup/au0030lrb_.html

stockcharts.com

http://tinyurl.com/4om9fr

Price at kitco:

http://www.kitco.com/gold_currency/charts.htm?cdn

Bought ROYAL BANK AT $ 40.08...CLOSED $ $ 41.40

SV

Children, gather about my knee.

Many of you are too young to think about Mutual Funds; ETF's have become the stars of todays tradings.

BUT, in the old days, 2:00pm was a prime time to be aware of because that is the time that all Mutual Fund orders for the day are placed on the Market.

You want to know what happened today starting at 2:00pm? Take a clue. Lots of unhappy 401k, IRA, and just plain Mutual Fund investors GOT OUT. Look over this week's 30min Index charts at what happens every day at 2:00pm and with high volume.

Second: Many traders won't hold a down day overnight. Good rule that has been around a looong time but is sometimes broken with inside knowledge, but best to remember.

signed
ol' whippersnapper 8)

G-d that felt good to tell someone that. Everyone I know thinks Taco Bell is a Mexican phone company stock so they would never understand.

It is true, confession is good for the soul. At least for now.

Going to go find Cramer's cheap booze & linoleum floor now.

the spring is getting coiled. look at the short and ultra short ETFs. when they unwind, the action will be what?

QT,
If it's any consolation, you WILL have sold before these levels...but a profit's a profit.

My only advice: clear your mind. What's done is done. Another opportunity is around the corner. Have cash in case the market blows your mind again in the next couple of days.

QT, Fazeli, Finger Lakes,

Let me join the chorus. I've been an Eeyore on economy and market for years, missing plenty of upside gains, sitting in mostly cash the whole while. Getting braver, played some short positions, taking small profits. Held SRS for an eternity, and sold a week or two ago at something like 84, today closed near 140.

To top it off, started averaging in early in this crash like many on this board, only to now be sitting deep underwater on many positions.

I've definitely reached my puke point, but like Rob, can't sell now. I've watched to many sold positions blast off once I personally capitulate. Friggin sucks, as you all know.

Too bad we don't all live closer, we could get together over beers and drown our sorrows :)

"So tell me folks... am I not the "King of Densa" hands down?"

What's worse, QT, selling too soon and missing out on some profit, or holding on to a stock sucked down by naked shorts and watching all of your capital evaporate?

No, you're not the King. Nowhere close.

Add to that Canadian Turkey Day Monday to see what tomorrow brings.

Nortel (NT) up 7.6% today. Go figure.

Still holding XIU, PCA, CNR, GE, etc.

Figure we got 2-3 months worth of 2005 support at these levels in TSX.

20% more volume today than 3 mo average.

I like mutual fund theory. That means we have another month to go before the mail gets opened again?

XOM is under $68. If it's there tomorrow I'm gonna buy 100 shares. I'm not looking forward to logging into my trading account and looking at the balance. As Will Rahal said on his blog today. This market is unbelievable!

QT, I had USO puts with strike of 100 when oil was up over $145 - sold them with a short-term $4K profit. Had I held, those puts now worth over $35K, so that's 20 grand I left on the table.

We all have our sob stories. That's mine.
(nowhere close to yours, but for me, its enough).

moab... good post, thanks.

"I have been following this technical analyst and he has been spot on. He says a break of 990 targets 820, another 10% loss:"

http://blog.stockmarketharmony.com/

Scary... but need to be prepared for "whatever" in this enviornment.

crap. How come GE didn't prerelease earnings?

Calendar of major business events for Friday
Thursday October 9, 3:04 pm ET
By The Associated Press
Calendar of major business events scheduled for Friday

Major business events and economic events scheduled for Friday:
WASHINGTON -- Commerce Department releases trade balance for August, 8:30 a.m.

WASHINGTON -- Treasury releases federal budget for September, 2 p.m.

WASHINGTON -- Separate meetings of finance officials from the world's industrial powers and from developing countries.

FAIRFIELD, Conn. -- General Electric Co. releases third-quarter financial results.

Why are people buying anything right now? This is a slow moving crash. We are not done going down. Not until we open up down 1000 or 1500 is this going to stop. Next stop are the lows of 2003.

Moreover, I believe the big rally is going to be in real things like Gold and Silver and not paper stocks.

If you don't see oil stopping or rising, why would you by XOM tomorrow, other than for a trade?

Volume

Keep in mind today was a Jewish holiday and volume was expected to be light. Yet many stocks traded at volumes in excess of their monthly average. Volume was heavier than what was anticipated and would have been a very heavy volume day if everyone was in the room. Just my 2 cents.

ok, I had to go mow grass. Helps my thinking.

It's time to circle the wagons.
Shoot the wounded. Sell positions under 1000 bucks to raise cash.
If u have an oversize position that's over 6% of your portfolio, sell back.
We gotta raise cash so we can buy.
Wait for capitulation, RSI 7 day <10, looks like the Russell 2000 will be first.

Sell your bonds.

JMO.

Okay, you guys think you missed the big one?

So, I don't trade a $1m account or anything close, but I bought 5 LEH July08 $40 puts back in May for about $2 a pop when the stock was trading at $42.

I think I sold for about a $1 gain on each a few days later for a tiny profit. Great right! Fast forward to July when they expired and the stock was trading at like $15.

Would have made a cool $10,000+ on an investment of $1,000. Ouch.

Straddles folks! You don't care which way it goes.

Another IWM straddle I placed yesterday, actually a strangle. I bought:

IWM 58 Calls for $1.45
IWM 53 puts for $1.34
Total: $2.79

Today at the close:

IWM 58 Calls: 0.25
IWM 53 puts for $5.00
Total: $5.25

Profit: 55% (in 1 day)

On last week's straddle. Had I not sold it, today it would be worth:

68 Calls: $0.02
67 Puts: $16
Total: $16.02

Since the cost was about $4, the profit would have been ~4X (300%).

Having said that, I have also nibbled on the Brazilian ADRs SDA (you still have to eat) and RIO.

Sorry, first number is 88%.

Bought USO at $44.90. Sold for 10% profit.
Bought GLD at $580. Sold for 15% profit.

could go on... but no point in beating up yourself.

Anyone notice if we break support in USO we're going to drop a potential 20% (62, then to 54)?

Is TA still working? On the upside we could see a nice jump from $69 to $81.

Price of gas better be down this weekend.

I remember when you made that trade, BillySundance. Your post was very simple, like "Bought LEH July 40 puts". I was trading MS puts at that time but also watching LEH and C.

About a week later I posted a note to you "Don't know if you held the LEH puts but you look like a genius".

Now I know the rest of the story. :)

I know this market has bottomed when I look around on various blogs and see that no one is nibbling at "undervalued" stocks or asking "is this capitulation?". There's that old saying, "If you have to ask..."
Most of the financially illiterate people I know are not yet cashing out their 401ks.

Step back and look at the big picture. Really. Do you think the world economy will be stronger in 6-12 months? Do you think consumers will suddenly break out the credit cards again soon?
Are local, state, and the federal governments in good financial health? Are tax revenues growing or shrinking? Do you think earnings (whose expectations are still wildly optimistic) will suprise to the upside? Do you think the largest credit bubble IN HISTORY will deflate better than it did in the 1930's? Do you think this is the "typical" bear market of 12-18 months?

If you are optimistic about all of the above, then jump right on in. Me? I'm holding onto my 95% cash / 5% short portfolio which has returned a one-trade gain of 7% YTD. The bottom, when we get there, will be established over months and there will be retests. There will be time to buy in. We're headed well below the 2002-03 lows. Where it ends, nobody knows... JMHO.

From Dr. Steenbarger, today:

"The traders who have performed most poorly are those that have been stubborn. They have had strong views of markets and have stuck with those views, even in the face of markets that have moved against them. Convinced that markets are overdue for reversal, they have faced large losses as weakness has led to further weakness. They have been more concerned about being right than making money; they've been reluctant to be stopped out, instead waiting for markets to validate their opinions."

I was stubborn two weeks ago, lost enough to "get religion," and have enjoyed watching from the sidelines with minimal purchases of Gold and Gold stocks on pullbacks. Just food for thought.

When inflation was in double-digits and interest rates were 16-18% back in 1980/81, no one saw a way out of that mess either - but we came out of it, albeit painfully.

Not that I'm jumping in, but I'd rather be an optimist.

Eventhhorizon,
Way to bring cheer, so i guess you suggest everyone sell everything?

Go here for a 9 mo projection on the S&P:

See the box labeled "Latest Market Projection"

http://tinyurl.com/4wax6h

I only have 10% cash left and bought in way to early on all of my positions.

It's going to stay in cash as 90% invested is way too much. Live and learn, it's an IRA and I have a long time to retirement. I hope I open up my statement in five years and it's higher.

Most positions down 25-30%.....I have used stops in the past but did not thinking these would be long term trades.

I have decided to not make another trade unless I'm selling for profit until I educate myself much more.

Thanks for all that everyone does here....in the long run it will make me financially independent.

Does that at least cheer anyone up?

bobbyo,
No... just that trying to catch the bottom can be a difficult and costly game.

Trade what you see.....even if you are investing...wait for a trend shift confirmation on your time frame...

Wow do you see what gold's doing? Down 20 off the session. I almost made a load of money but I sold a sizable amount of EGO a little early. Ok, it was a lot early.

Goldbug, not sure if I just missed that note when you wrote it or maybe I was tearing my eyeballs out and throwing things at the wall that day........

:-)

Sounds like Cramer was correct after all.
What next? Maybe tomorrow will be 50% down day?
I guess it is THE perfect financial storm as I wrote yesterday. In retrospect, there were so many warnings. I knew perfectly well about all the long term problems. I just didn't know it would happen so quickly and right now. Poor Bill Cara, he must be feeling bad about it too.

FranSix -

Do you mean that lease rates being high that the central banks are not managing the gold price? Can't they do it strictly with derivatives, using currency to sell gold at certain levels?

Apparently open interest has been dropping on the Comex so perhaps hedge fund unwind is depressing the gold price. Or maybe it is just supply and demand? I find that hard to believe with the many reports of physical shortages of physical gold.

Sio2,
I hear you loud and clear. My problem with straddles or strangles has always been wanting the Huge return from buying all on one side and watching it multiply.

Luckily only 5% of my money is used for trading like that. So, once I sell(which looks like it won't be for awhile) I'll utilize straddles and strangles more than one-sided bets.

Rob.

If anyone wants to see the true price of Gold and Silver just look on Ebay.

We were looking last night and most gold was selling in the 1K range and most silver was selling in the $20. range.

Rob.

In my other accounts(education IRA's, Roth IRA's and 401K) I'm pretty comfortable.

Under normal circumstances I would have jumped out with these accounts but this time it happened so quickly, I got caught off-guard and just had that deer-in-the-headlights feeling.

Who would have guessed that in one week we'd be down over 2000 points on the DOW?

I sure didn't.

But the lesson to learn from this is to always remember that if they ever put in a short ban again just short the indexes.

Rob.

Sadly, I must tell you what I really think.

I hope I'm wrong.

The market is trading like a ponzi scheme gone bad.

Because that's what it is, and always was.

WAY too many thieves took WAY too much money for their pitiful intermediation services. These are the thieves of Wall St, and elsewhere. I have no use for ball players making obscene sums either.

At some point, we should discover and prosecute the guilty. And take back ALL the money they stole + interest.. We are entitled to at least that small justice.

eventhorizon - My sentiment also... Looking about me, I'm having real difficulty understanding what makes this lead balloon light enough for a moon shot. Actually, I started thinking this way when I realized oil was over $140 and heading on up. I'd really like to know what whomever was involved in that was thinking... Simultaneously, housing prices crashing... I don't think anyone's offered an assessment on the magnitude of that disaster. Okay, I won't keep going although I could....

vinod - You jumped off the train? Are you on the platform or outside the station? I think I hear Auld Lang Syne over the PA...

Know your counterparty.

Here's a list of tickers with possible Lehman exposure from previous news release. Some reported minimal or non-material.

http://tinyurl.com/3weysn

Dumping these into Google brings up some potential candidates for buying? selling? Not sure...

Worst hit today (from what tickers weren't rejected by Google)

PRS
PMI
AEL
FBR
LNC
PNX
ICA
AGM
WB

Honorable mentions.
F
MFC
SLF
ACE
ISP
FRE
C

"An auction of credit default swaps backed by Lehman on Friday this week may further clarify losses.
According to analysts at IF, a service of Thomson Reuters, this may involve contracts nominally worth as much as $400 billion and could be prompting banks to hoard cash, and further drive up Libor rates."

http://tinyurl.com/4fxpm3

Will be an interesting day tomorrow for interesting times.

Bill wasn't saying buy and hold when the others were, saved me a small fortune there and yes I was early by a week so I'm certainly not making the optimum at this point. But I don't remember anyone saying I would make the optimum in a few days but I do recall Bill saying something about getting prices low and selling them higher in a year or two. Maybe I didn't here it all that well.
.
Anyway I sure like the prices I got, thanks Bill.

Joey
Yes ER would and is one of the stocks I like. I sold my position a while ago but looking to get back in.

FARMERXX,
You're so right. I'm 30% better off than I would have been if I would have stayed fully invested all the time.

So, I caught the bottom early but have the time to wait for it to turn. My break even is right around DOW 10,800. It does seem like miles away now but it's much closer than DOW 14000

Rob.

Haha. Don't think I read anyone pointing out the action in FXP: +40.52%

pretty odd movement too. FXI is only down 7.4% today and has picked up 3.5% after hours.

During the dot-com crash, were all these inverse ETFs available? If not, how does the existence of all these exotic ETFs change the game this time around?

I still believe that the credit markets are demanding a solution. Bond market is screaming it. Until resolution DOWN WE GO

For that matter, how does the now more-matured internet affect the playout of big bad bears?

Good for you Finger. I went to cash so close to the top I still have the handful of snow from Mt Everest. Thanks to Mr Cara. have stayed there till now.

NO matter what ones position right now.. loss, cash, profit

Its a good time to reset intentions and ideas for future direction.

:)

RSI7 for VIX is 86
Can RSI7 go over 100?

Mackinaw

FXP: UNBELIEVABLE

2nd:Remember the days when we used play FXP on a weekly basis. Today it gained 66.92pts [OMG!].

I thought I'd look at a long-term chart of the Dow index to see where there might be some support. If you look at this chart, it shows some support at 8000. More surprisingly, it's easy to see a head-and-shoulders formation in the making. Of course it'll take many years to play out, but possibly it could indicate a near-term target for support and some indication of how far a rally could run.

http://tinyurl.com/2w337

"if this is the start of the new bull market it seems to be experiencing birthing pains:)

Posted by: shark_attack at October 2, 2008 1:52 PM"

"I told you boys this market was headed into the latrine head first with a bullet.

Posted by: shark_attack at October 2, 2008 3:40 PM"

"....we will see a multi-thousand point selloff which WILL be the buying opportunity, once things bottom in a cacophony of selling."

Posted by: shark_attack at October 2, 2008 6:24 PM

"Important point....

Dow 10,000 is support on a long term chart, as in a decade monthly. A significant fall below 10,000 that stays below 10,000 will auger for the BEGINNING of a downmarket of a more significant duration that a year or two.
by: shark_attack at October 2, 2008 6:35 PM"

"...guys accept the truth that we're all sitting around trying to figure out when to go long stocks when if this weren't an upside down world (no short selling) the duh no-brainer move involves the SALE of listed securities."

Posted by: shark_attack at October 2, 2008 6:43 PM

"Now ya gotta be worried about monday

Posted by: shark_attack at October 3, 2008 3:44 PM"

"What does today's events mean for the financials? My conclusion differs somewhat from yours, as my gut tells me that in the absence of housing improvements and BELIEVE ME, there 'aint gonna be those in the next few months, all the sharks teeth are baked into THAT cake....

The future for the financials is iffy still. And how long does this bailout money last? What happens if they come back for more? Bailout aside, as long as Johnny-401-K is struggling at work, fighting with his wife and abusing his kids, this thing isn't getting better...

Also don't rule out the seasonal tendency for armageddon.

Bill may be absolutely right that a new bull market is starting. Someone, however, forgot to tell the stock market:)

Posted by: shark_attack at October 3, 2008 7:55 PM"

"Barry,

I've got to say that I'm with you. I think housing is in the process of busting enough so that further damage is inevitable. The market for housing has really broken, totally apart from credit crisis issues. Believe me, all the folks that pony'd up for houses in the early 00's, the participation rate, the average purchase prices, that alone augered for a serious decline.

In short, I think housing has quite an adjustment yet ahead of it, and I think that until such time that houses are freely transacting at significant discounts to even today's "bargains" (and I for one think housing hasn't come down nearly enuff price wise yet) the great Sharkmeister says there's more trouble in housing to come. It's just that now it's you and me on the line for it instead of Lehamn Brothers.

Posted by: shark_attack at October 4, 2008 6:04 PM"

"Bill,

But as far as having a band come down my street playing "Happy Days are Here Again" in my humble and less informed opinion than yours, it doesn't quite feel like it's time. I actually think this week could be the week of the multi-thousand point death dive I referred to last week which would, paradoxically coincide wih the start of the new bull market:)

Posted by: shark_attack at October 5, 2008 6:31 PM"

"Timing, it is said, is everything in life.
In our game it's even that much more crucial.

Posted by: shark_attack at October 6, 2008 9:08 AM"

"I can't shake the feeling that stocks have been in an enormous bubble similar to the real estate one, and given liquidity/credit issues, Johnny 401-K's diminished place in the global scheme, etc, that those excesses have yet to be fully wrung out of the system...

Posted by: shark_attack at October 6, 2008 9:13 AM"

"We're going to have one heck of a party in Boston...Better yet let's wait 'till next summer and meet up at Vinod's place in Wellfleet:) Bring your suntan lotion!

I love hearing about people saving money by the way.

Posted by: shark_attack at October 6, 2008 9:56 AM"

"I shouldn't say that. This may be an awesome buy oppty, but I won't be following you in ok?

Posted by: shark_attack at October 6, 2008 10:14 AM"

I hope SOMEONE here made some money on the Adobe

BB/KC scalp I mentioned at 2:30 p.m. earlier today:
_______________________________________

Bollinger Band within Keltner Channel:
http://tinyurl.com/3nhnbo

MMA Compression:
http://tinyurl.com/4e5a9r
_______________________________________

I didn't get to trade it because of a client appointment, but boing short when the Bollinger Band crossed the Keltner Channel went pretty well...

Wavesmash - Interesting post on LEH counterparties, thanks.

My 401K is with MFC through John Hancock and I had been concerned about this very thing recently. Oddly enough, my plan administrator showed me a letter that she got on Monday from JH that basically said, "don't worry" of course. But then they outlined their exposure to LEH and AIG and it was pretty minimal actually. Though I'm sure it will still have an impact on their bottom line, it won't be devastingly so.

Speaking of the 401K. I put it all into a stable value fund in early November last year thanks to Bill and the crew here. I am so thrilled for that! I'd be looking at a minimum of 35% declines at this point and it's a significant amount (to me). I also have an old IRA that is mostly in GLD that I purchased in August last year at around 67 and that has done very well during these turbulent times. I have small positions in NG, AUY and SU that I felt were a good buy at the time, but those are under water now. They're a small % of the port though, and in a retirement account so I'm not too concerned right now.

I trust Bill's instincts because I have already benefitted tremendously from them and have been chomping at the bit for the past week or two to start putting the 401K back to work. So far I haven't, but after today's massive drop, I think I'm going to just have to hold my nose and start scaling back in.

"If anyone wants to see the true price of Gold and Silver just look on Ebay."
Folks, do not exaggerate the situation with physical. Comex size physical is available from most dealers. It is the smaller retail size bars and coins that are in deficit. Which tells me that retail purchases overwhelming refinery demand but the metal is there (for now).

I don't even know what to screen for anymore. Still looking for longs. Today's hunt turned up the following observations. I have no positions in any of these.

CDN Juniors (there was a whole whack of gap-ups at the open today. The following stocks maintained strength on volume throughout the day. Maybe someone has some insight into what they do - I sure don't):

MKR.V
CBE.V
TVC.V
JNN.V
PCM.V

Also noticed lots of action in ADRs today. This one's price action caught my eye:

CNH (CNH Global: Farm machinery worldwide. Maybe the 17,000,000 new mouths to feed in India this year have something to do with their growth. I understand that their PEG was 0.46 back on Sept 23 so I guess its 48% drop since then makes it even more mouth-watering to value investors.)

I meant overwhelming mint output.

shark_attack

Sure wish you would of thought more about the other people in this group before you made your boastful post at 7:26 PM. Did it ever cross your mind there maybe some hurting and scared people in this group who may of jumped in too early?

shark_attack I'm with you... if a person has any powder left best to keep it safe and "very" dry. Much tougher to make up the loses, give it time, so what if you miss a couple points. When we reach bottom, this time I think it's gonna be pretty evident... I just don't have a good feeling about this event this time and I've been at it 30 years. Other corrections were different. Value = what a ready willing and able buyer will pay, no matter the asset.

may the trading fairy god mothers watch over us all...

mackinaw:

bill mentioned before that the smart money will show up in the $CDNX when they feel ready to begin speculating. but the $CDNX is still in the crapper.
mabey it really is a stock pickers market for the JR's.

i was surprised to hear jim sinclair mention how he has never felt better about jr. gold and even jr. silver properties right now. i guess i gave up on the jr's so long ago it just seems implausable that they will ever go back to what they were 1 or 2 years out. im still worried enough about the mid and large cap's catching up to the gold price valuation wise.

gap ups on strong volume, holding for multiple sessions as part of a broader move up might be the spark that ignites the miner's next run. id like to see some follow through, especially on days that the broader market isnt fairing well.

... and with everyone sunnin' a bit scared, I can see quite plainly that this is no time to act purely out of emotion. The only investors who will survive this environment to thrive in the recovery to come are those who keep their heads while everyone else is losing theirs. I don't have to be a net seller of stocks in this environment, and I don't plan to be.

sharkie,

could search back my posts and see the same thing... where's support... where's support?

Anyway, multi-generation buying opportunity blah blah good deals to be had blah blah.

Time will tell.

Some interesting picks based on astronomically low P/E (<2), paying dividends.

Q
IRE
CHN
DRYS
EXM

Reason for not owning dryship carriers & CHN.

1. Baltic Dry Index

Reason for not owning Q
1. Debt

Reason for not owning IRE
1. No pot of gold at end of rainbow.

BA down 6.9% today, up after hours.
BBB-B.TO down 9.76% today, fugly.

TBT chart looks pretty good. Broke through last low.

I'm pretty sure I bought FXP around $63 and sold for 10% gain.

I wish my stop losses were as good as my start losses.

Surprised the dow fell through the support I thought would hold (9033) 38 % fib and fan line from the 1980 low)linear chart.

fwiw log charts
http://tinyurl.com/4pmj3s

and the channells closer up.The rising channell from 2004-2006 showed some resonance with the highs and lows of the spring and summer this yr before the fall through 10900ish

http://tinyurl.com/2hnlea

That would put 8300ish as possible support.
What a very incredible week.

Kim:

on sharkster's boasting,

Truth is the truth...the rain doesn't stop just because you might get wet.

or, as D.H. Lawrence said:

I never saw a wild thing
sorry for itself.
A small bird will drop frozen dead from a bough
without ever having felt sorry for itself.

Welcome to the jungle...or, as chapter 5 in the Tao Te Ching states:

Nature is unkind, it treats creation like sacrificial straw dogs,

The Sage is unkind, he treats creation like sacrificial straw dogs.

Buckle up folks...

morituri te salutamos

Kim:

As many people who are doing well, you are right many will be hurting. I know I got slapped around by this market.

No matter what position we are in , it's a chance to learn and improve. For myself it was a excellent lesson in letting go. But I know when life is wrapped around the paper dragons of dollars, it isn't easy to release that which just evaporates in this market.

I am glad Shark is doing well, but don't take it personally.

I wish you peace in this time. Be patient and work towards tomorrow rather than what happened yesterday.

The truth is we each embody potential. No one , no bad trade can take that away.

You and everyone else who has made bad choices, WE are are learning to be better, shark perhaps in his manners occasionally (I love you shark) Take take the lose personal, turn it around, be strong in your potential and make life better in that potential.

I am not being a cheer leader, I want to remind others this is a time of change, not just for money, but for each of ourselves to make our lives better. Embrace that ideal to make it better. We all have that power even in lose right now.

I hope this helps a little

peace

Nemo:

heh we almost jinxed each other on the Taoist Post today ;) only a few minutes apart

Nemo:

"morituri te salutamos"

are we all about to die... and are we saluting the market for killing us?

Using the same bailout provision that allows financial companies to mark their bad assets to some arbitrary future value, could the govt not come in and force the NYSE to list companies at some arbitrary future value?

Ah-ha you say, but shares wouldn't trade under those circumstances! ...and so neither will those toxic assets.

The bailout was never going to solve anything. Neither will the capital injection that they are now concoting. The problem is the opacity and lack of trust - for which nobody has a plan to fix.

Shark,
I read your predictions and they were spot on, but it is one thing to make a macro analysis of the market and it is quite another to have the conviction to put your money behind it. When Dow was at 11000 I don't recall you putting a large short position on. I know that it is not your trading strategy to hold for longer than a few minutes, but imagine all the chips you would have if you backed up your bold predictions with your dollars. I am not criticizing you I am just stating the facts that it easier to make a call when you don't have anything at risk. I should also thank you because maybe I myself would not have capitulated early Monday if I had not read your warnings, so in that aspect i owe you a drink.

Picking up bankrupt Lehman Brothers gives Barclays Capital (BCS) a beachhead in the U.S. investment banking market.

Barclays Capital bought Lehman Brothers. Problem: Barclays already has 14 iShares (eg: AGG / BCS / IEF / SHV / SHY / TIP / TLT ) that use the Lehman Indexes. UtOh. Index Universe puts it bluntly:
" ... The perceived risk, of course, is that direct stakes in both an ETF's assets as well as its benchmark could cause potential conflicts of interest. One of the most often mentioned is concern that such affiliated ETF fund managers might be able to game their indexes to compensate for poor market returns. .."

--more at:
http://tinyurl.com/4fdveo

Barclays has asked the SEC to be exempted from regulation in this matter. Hmmm.

Brown-Cal - I believe the government needs to nationalize all the banks immediately, order and guarantee all the interbank loans and gradually certify sound bank returning them to the private sector. Unsound banks will get injections of cash in exchange for equity or be closed/merged. Just givin banks cash will not address the trust issue and will not force the banks to once again lend ot one another, since they are fearful they will never see their money again!

Also, any bank corruption will then be a federal offense!

Complete carnage on the ASX today. Margin call nightmare. With the AUD in the gutter and stocks falling to bargain basement prices, this must represent a great opportunity for US-based traders ...yes?

For everyone interested:

here's a little tool that you can use to check out the quality of the banks you are working with.

http://tinyurl.com/g5vcz

John Kenneth Galbraith's 1954 book The Great Crash - 1929. It describes how the "Principle of Maximum Ruin" played out in 1929:

"A common feature of all these earlier troubles [previous panics] was that having happened they were over. The worst was reasonably recognizable as such. The singular feature of the great crash of 1929 was that the worst continued to worsen. What looked one day like the end proved on the next day to have been only the beginning. Nothing could have been more ingeniously designed to maximize the suffering, and also to insure that as few as possible escaped the common misfortune.

The fortunate speculator who had funds to answer the first margin call presently got another and equally urgent one, and if he met that there would still be another. In the end all the money he had was extracted from him and lost. The man with the smart money, who was safely out of the market when the first crash came, naturally went back in to pick up bargains. ... The bargains then suffered a ruinous fall. Even the man who waited out all of October and all of November, who saw the volume of trading return to normal and saw Wall Street become as placid as a produce market, and who then bought common stocks would see their value drop to a third or fourth of the purchase price in the next twenty-four months. ... The ruthlessness of [the stock market was] remarkable." (p. 108)

jsmcgraw

Quite sobbering I must say...

Nikkei is being brutalized. Biggest drop since '87.

"No one is buying. Fundamentals don't matter any more and there's no explanation for such a plunge," said Yoshinori Nagano, chief strategist at Daiwa Asset Management.

"Fears about the U.S. financial system have been rekindled. The U.S. government is still debating whether it would inject money into financial institutions. It needs to act now even if that would be beyond the current law."

Funny, I thought they've been injecting quite a bit... not sure what "law" he's referring to.

I'm a newbie to this... trying to just wait it out in cash until I feel comfy jumping back in. I appreciate Bill's comments... in this case, what does go down will come up. Yet, while I doubt "anyone" can time the bottom, timing is important, no?

So, questions... first, I believe the Dow is 23% below it's 50 DMA. I might be wrong, but I thinkg that's a historical record.

Is not what we're seeing an "event." If so, can we trust historical models? If not, what to look for?

Corps with cash are probably hoarding it for their own internal use right now, but one would think once cash flows freely they'll all jump back in with buybacks, no?

So, what to watch?

Shark,
The point tossed about is that 7/8ths of the investing world were calling "bear," so your now well-documented views to the contrary were not unique to this blog, where most guests know how to be both right, and wrong, with restraint and class.

net.fishing:

Yep. Especially that line about the "smart money" being out before the start of the crash and then showing up to pick up the "bargains," only to be caught anyway. I sold everything October 15th last year (I remember it well... I was sitting in the airport after returning from a horrible trip to visit a romantic interest) and went to cash & gold. Got impatient recently, made a few bucks, but then put on a trade that cost me my profits for the year before I got out of it. I had been kicking myself over it but the last few days have me feeling much better about being "flat" on the year. This may not be a time like those "earlier troubles."

Shark was being contrarian to the bullish bias of the morning monologue. Sold your BA and IBM yet?

Sorry.... bad writing.....should have said "to the contrary of Bill's position".
What I mean Shark, is ..... "enough." When you're fortunate enough to have contributed something of value, let us all rejoice. When you have, with all good intentions, been wrong, shake it off.
We all bear scars from this month of October which we will translate into wisdom for the ages, on down the road.

Bought a few more RBY, opened a position in NGD, and just sat on GSS today. Long gold and silver too.

I have a lot more faith in gold and silver values than that of the dollar, longer term.

jsmcgraw

Actually being flat in a year like this, comparatively speaking, may not be all bad...

jsmcgraw,

Studying the market gyrations of the Great Depression is great for knowing what is within the realm of possibilities. But I think it would be a mistake to use it as a playbook (not saying you are), just as it would be a mistake to use '87 as a playbook (not saying Bill is). Best to see this time in its own unique way.

That said, if people are using the wrong playbook right now, then it would create an opportunity for those that aren't be caught up in that.

We just got statement for wife and son’s 401k
She is down 25% YTD and my son is down 22% YTD
And because of this blog I am not down YTD
But gave up most of what I made so far

just came back from my swim (albeit at a public pool in my quaint lil' town, not the atlantic ocean à la Bill), and saw that the markets took a beating again today and apparently are getting hurt overseas also tomorrow, which is today...strange.
Gold up though, which is good. You see, today the market wasn't so bad to me, sure a few of my stocks were down 15%, but that's the norm these days. My 2nd and 3rd largest holding were only down about 8% or so. I'll probably have a substantial margin call tomorrow morning, but by then my gold stocks may be up, given that gold may rise even more by the time I catch the last 15-20 minutes of Bloomberg, then continue with "The Street" on BNN and get the run-down from ol' reliable Michael Hainsworth. He'll tell me that the CDN dollar is up or down because this or that. Same with oil, natgas, dow futures...then life will go on.
It's probably best not to focus so much on the markets and listen to the interviews on TV and watch the "Wall Street Crisis" specials.
It's just depressing and may cause you to act irrationally. Listen to the calmness in Bill's voice during his istockanalyst interview, and note the calmness in his posts, it's pretty reassuring that life will indeed go on.

suppose we see a selling crescendo at the open?

Ma and Pa tossing in whatever egg money is left?

vinod,

Not to be a bummer, but if your wife and son's statements are dated 9/30 then you can double those numbers.

Don't know why anyone thinks shark was bragging. He was just stating the facts, what's the problem?

vinod

Remember when the traders at your work place told you they would be trading in the 4th qtr with the discount rate being at 1.5%?????

They were right. Amazing how they knew that.

Have they said anything else to you lately?

Tough question is to stay or get out.
There are many views on market at major publication like WSJ
May be thing are worse than what market is saying.
More problems will come up from state government, city and town whose revenue is going down because of economy and there is no way government is going to bailout everyone

QT
trader at work are not in good mood
their 401K is going to toilet
and they have no control.
lots of people are getting out of mutual fund
today I heard that situation is worse than what we think
believe me they have no clue

Now that we have both Ben and Hank fully engaged, can it be long before Ben uses the helicopters at his disposal? Not to mention Hank...

Aren't we somewhere in "Don't fight the Fed" territory? What would it take to get 1000 pts?

Brown-Cal
yes they are dated 9/30

Looks like we are approaching a Graham/Dodd bear market, where some stable companies can be had for less than cash on hand. It was hard to believe when I read this two years ago but now I see how it can happen.

vinod

Thanks....keep us up to date with what you see and hear there. Remember you are at "Ground Zero"...

Craig
Halicopter will not do it
need Jumbo Jet like 747

It's capitulation in Tokyo tonight ( tomorrow) as they are presently down 9%. Should we be surprised that the POG is also skyrocketing (Dec gold is $920 ) as I write this? This could be the big move on gold many have been anticipating. What a bargain for foreign buyers entering CDN miners with an 86 cent dollar.

http://tinyurl.com/3xr343

Asian markets continue our pain. at least there is a weekend coming up for all markets.

Craig,

I think the Fed has lost and everyone knows it. If they could have done something then wouldn't they have by now? A lot of damage has been done (politically and economically). Even the HB&B that everyone on this site insists has so much coordinated power still needs business down the road. They will not prosper in a 10 year Great Depression. So if this is truly about HB&B scooping up undervalued assets then I think they would have been much better off doing it in a measured, slow-bleed manner (say over the course of 5 years). It's hard for me to see how this is part of anyone's plan.

vinod-where do you work if you don't mind me asking?
ray

Craig,
I don't think FED or HB&B or any one in goverment has any clue how to solve this problem
they all are walking like chicken with its head cut off?

rayg
In boston for a financial compaly

Stay or get out is an important question right now, especially with Asia down 8-10% right now and DOW futures down 200 points.

I guess it depends on your time horizon and your bet on how bad it will get.

I'm thinking, with my time horizon and the way we've structured our lives, it could drop to DOW 5000 and we'd still be in good shape by retirement.

We have been paying off our house and other debt instead of saving for retirement.

This bear market should prove to all of us not to put all of our money in the stock market. Diversify means that a certain percent goes to stocks/bonds and a certain percent goes to precious metals and a certain percent to tangible assets. Keep that balance and you'll always be comfortable.

Even in the face of being trapped long with a thousand point down open.

Always remember, it's only money!!!

Rob.

circle the wagons
shoot the wounded
raise cash
do ur homework/research
get ready to buy

Kiwigirl - I bet you're right on ASX.

Any ideas for ASX? mining? other sectors? We're too North-American focused here ....

Shark,
I hear you. You were right on the money with Lehman as well. I just hope you made some serious money with those convictions!!

Or, hopefully you'll do it next time.

That's the great thing about money. There's always a second chance, as long as you're still healthy and able.

Good luck.

Rob.

is there any concensus on how the miners might perform in the face of ongoing losses in the broad market with a potential run to $1000 POG?

ive watched the volume and price action so intensly the past few weeks and ive noticed that they get dragged down to some extent but have done reasonably well in comparison. does this relative performance hold up or at some point is there a full-blown decoupling in the price action?

any thoughts are appreciated as always

Hey guys and girls,

Here are the facts. Of course I didn't have the chestnuts to put on a large short position. First of all I am a "day trader" by mandate and must go flat generally at the end of each day. Secondly, I had no idea if some bizarrre Washington intervention in the premarket would have sunk my ship, and can't take that risk. In addition, I'm just like you guys. Scars? You wanna see scars? I've nicked up my stake pretty badly in the past month, taking mostly small losses but lots of them, and many of those trades were dumb trades I shouldn't have made, and in other cases, good stocks I panicked out of or sold early. I am you, with a big mouth. And unlike a lot of you, if I blow out my account I'm selling apples on a streetcorner, not dipping into earned income to re-fuel my brokerage account so I can practice until I get it right or until a market comes along that I can trade.

I hurt.
I am in pain.
I yearn to be loved and understood, just like you do.

I didn't mean to sound boastful merely to toot my own horn:) and remind the room about my prescient picks. I am proud of the fact that
I can really read charts and of course, my fertile mind hasn't been poision by an advanced degree in economics or business so I can still see things, when I can see them, fairly clearly.

I apologize for sounding classless and boastful. It would amaze you but we are not just one thing, we people. I can be the classiest, gentlest, most sensual guy you ever saw, when the mood is right.

Tomorrow is the anniversary of the 2002 low I believe. Anniversaries are usually important dates for some reason. Hopefully we will find a low tomorrow, but I'm not betting on it.

What is happening to Iceland is unbelieveable. I hope people don't starve there. With no foreign currency exchange they will have a hard time buying food. Why is Putin the only one offering help to them?

This crisis is going to be the death knell of US influence in the world. No one will listen to us anymore.

Why is the storyline suddenly:
"world markets crash on fears of a global recession"

That was what I considered to be common knowledge. Who didn't know that everything was slowing down?

I'm starting to think that not seeing any news would be better for trading.

Rob.

Sharkie --

Very convincing summary of your posts. Where are you finding the best (most often trending) day-tradeable volatility?

I've been trading GDX and TWM with good success.

I think the situation can still be salvaged if they nationalize the banks, inject capital into the one's that need it and re-establish trust and lending. No matter how much money gets thrown at this banks will not lend because of the unknowns! The government must eliminate the unknowns by taking over the whole system!

Shark:

I love you man ;), you speak from the gut. Neither right nor wrong, it is what you think.

I still want to vote for

2nd as Prez, you as vice president with your cabinet rounding out as

Moab as Secretary of state
Kaimu in charge of the treasury
an everyone else here to round it out ;)

Make no mistake these are hard times, we all make mistakes...

The challenge is not to get limited by your mistakes, but to learn, turn it around and improve what we each have.

Yes it is a struggle, but thats why we live.. not to struggle in vain, but to learn and become more, our dreams and live to our potentials

That is why we share here, sharing including our pain of mistakes to grow from.

peace

vinod-the big one??

Brown-Cal:

No playbook here. I've actually been compiling a buy list and being frustrated that I haven't had enough time to work on it. I was thinking to myself that there were all kinds of steals out there that I was missing out on, that I'd better go ahead and get myself prepared to act before the rally started and left me behind. Then the recognition came: impatience again. So I let it go. I decided I would finish when I finished; better to be thorough and collect enough information than rush. That was last week. I'm feeling pretty good about things this week. Time to study more, time to re-evaluate my positions and why I do what I do. I recognized myself in the Galbraith quote, one of the "smart" ones who sidestepped the beginning of the downturn, only to get caught all the same... except I was fortunate enough to only have almost been caught. Given the postings here today, I thought it might resonate with others.

I'm unsophisticated enough to still employ simple trend lines when confirming my trades. When the chart goes out of trend, I'm out of my comfort zone. This is ugly: http://tinyurl.com/49ckvp

Shark:
That seemed to have required quite a big hand to pat your own back.
Seems the vast majority of comments posted here by people are meant to help others.
Many of your post come across as "look at me, I did good".
And don't get me wrong, I enjoy your posts, but they seem more self gratifying.

I heard someone on Bloomberg radio casting some of the blame on black boxes that trade in microseconds.

He may be right. This has the feel of derivative and momentum based selling. The lower it goes the lower it goes, and no sane man will step in front of it. I don't know who is buying here, unless its just serial short covering.

Shark,
I'm with you brother. Those bums really screwed us this time.

I think the only way to fix this is to demand that everyone show what they're holding immediately and the CDS market goes onto the CME immediately.

The question we have to ask ourselves is how low will they go to save a few preferred companies?

Will they bring everyone down?

Rob.

why does anyone swing at anything Lidge throws?? everything was in the dirt.

Folks...I been reading this newsletter who is a big Elliot Wave believer since June. And I have to admit he has been right on so many times with his advance calls. I know this sounds like "voodoo stuff" but check out this statement which was written in his weekend newsletter dated
Sept 19th [<---10 days in advance].

Note also the last line. This Monday according to him will be another turn date.

~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~
"Our Fibonacci phi mate analysis is suggesting another turn is due this coming week, around
September 29th, 2008 +/-: This is the ninth phi mate date we have scheduled for 2008. Our thought at this point is the 29th could be a kickoff to a devastating stock market crash that lasts a few weeks into mid-October. It is also a New Moon on the 29th, and New Moons have been associated with crashes in autumns in the past. Here’s the math for September 29th +/-: September
29th, 2008 is 2,189 trading days from the Dow Jones Industrial’s top back on January 14th,
2000, eight years ago. Its phi mate is June 2nd, 2005’s high, which was 1,353 trading days from
1/14/00. The relationship between these two dates, is 1,353 / 2,189 = .618, or phi. What the phi mate analysis has demonstrated consistently since January 2000, is that whatever trend is going into the turn will reverse, nearly every single time, into a tradable trend. The value here is that aggressive traders don’t care which way a trend goes, as long as they know when it is coming, to be alert to trade it. While phi analysis will not find every significant trend, it finds most of them, and when it does identify
the probability of one coming, we have always gotten it since January 2000. These trends are not subject to intraday reversals. They are not for day-traders. They are multi-week trends. Our next phi mate turn date after this one is October 13th, 2008 +/- a few days."
~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~

If anyone is interests when I get tonight's newsletter I can post more about Monday's turn date which he plans to talk more about. Let me know.
Again strange stuff, but the declines and rallies since June he was pretty much on the $$$. Just some more info to fog the brain.

Casey,

Can I get a job as Secretary of Eternal Optimism? I think my posts of the last 3 weeks are more than enough credentials for the post.

Mack.

Finger Lakes:

It is only money... thats important

but what is money..

It's power: it represents power. Very simple equation. Once you realize/ accept that aspect of what money represents.

We must turn the angle of "losing power" around, to remembering we are not empowered by money... We are empowered by our actions...

Thats the key to turning it around in this case.

I hope this helps...

Many angles abound to how to deal with the money issue, I just wanted to bring up some more angles to help out.

Like you I have very little, live very simply liquidated retirement to afford a simple home, and with a tiny side fund managed to teach myself humility from new angles which I am very glad to have done. I never lived to money, but even for myself as a Taoist Teacher, it stings to lose a chunk of those little paper dragons,

so it's an important lesson on how to turn it around to be positive. Because the power aspects are so engrained into the culture and our teachings of the American economic culture. When people are taught to base their life to the value of paper dragons, the dollar.. you know right now, alot of people are going to have a hard time coming to terms with their life as they make mistakes, which this market amplifies

Dont let the times or economics define you, reverse it and define life to the heart first and then fill it in with the paper dragons as required is my view point. It has worked for me for 30 years to keep me very very happy.

My respects to you and everyone on this board. The members of this board represent people who are braver and more willingly to reach out to share... So probably on average doing better than the average person. Think about how many people right now are in this mess watching their personal power based... get destroyed.

My little stem cell stock "KOOL" was up today with good buying interest.

anyone trading SKF?

Mack:

The position is yours!

We need it right now :) till the sun comes up again tommorow

no matter what happens the sun is still there. I wont worry until the supernova next week ;)

Two things:

(1) In the interest of fairness, I have to say that Cramer's sell call on Monday seems to have been vindicated :-)
(2) My new resolve to avoid buying in anticipation of a bottom saved me from losing even more than I did today but I'm trying to figure out what to look for to confirm that at least an intermediate bottom has been put in. Do I look for a successful testing of a double-bottom? Should I look to financials to lead? Suggestions?

that ugly chart looks like everybody just packed up and went home.

Some support for SPY around $85 it appears, though with the speed of the drop I'm concerned we could end up Back to the Future.

90s were fun but I don't want to go back there.

Anybody else with some TA on the SPY?

There are SO MANY more post on here these days than there were even 6 months ago. Bill's site is going big time!

SKF was a money train today and I wasn't even watching it. TWM was a money train too. Judging from those things the world's just about ready to come to an end. Somebody's buying 'em right. Will those things becomne shortable at some point?

And I love you guys too. I'm a little self absorbed but not totally soaked:)

stev1183 ...I DID post those things to help people and to help myself. It clarifies your thinking to have to get enough of an opinion to post it for all to see. Given how dramatically accurate those ruminations have proven to be (and a whole lot more from the next day or two that I didn't put on there as the situation deteriorated) I wanted to rub everyone's face in it. Not. I wanted to gloat and do a victory lap waving a flag and prancing around in a leotard saying "look at me, I'm so wonderful!"

Ok maybe it was that last thing:)

Casey,
You're so right. And look how many people get their identity wrapped up in how much money they have.

Don't get me wrong. It always sucks to lose but perspective of what you're losing is always more important than electronic numbers.

Cheers to being on the right side next time or like Sio2 on both sides.

rob.

Right now also be aware, for everyone of us posting there are probably a hundred people reading, meaning thousands of other readers and many of those being normal folks like us,

and many not so normal who might swing things in bigger ways.

What we say here might make a bigger difference, especially in heightened times of crisis right now.

:) Time to behave , be extra kind... but to also speak up more to help out.

I am taking my cheerleader outfit off now (trust me it is a scary sight)

Where is Bill and few others right now anyways I wonder... something bigger is afoot right now.

Just an excerpt.

Not trying to promote other bloggers but an economist from nyu made comment on an email newsletter. One thing notable here is this economist, while being severely bearish and early, has started to offer suggestions and not just yelling fire fire:

"At this point severe damage is done and one cannot rule out a systemic collapse and a global depression. It will take a significant change in leadership of economic policy and very radical, coordinated policy actions among all advanced and emerging market economies to avoid this economic and financial disaster. Urgent and immediate necessary actions that need to be done globally (with some variants across countries depending on the severity of the problem and the overall resources available to the sovereigns) include:

* another rapid round of policy rate cuts of the order of at least 150 basis points on average globally;
* a temporary blanket guarantee of all deposits while a triage between insolvent financial institutions that need to be shut down and distressed but solvent institutions that need to be partially nationalized with injections of public capital is made;
* a rapid reduction of the debt burden of insolvent households preceded by a temporary freeze on all foreclosures;
* massive and unlimited provision of liquidity to solvent financial institutions;
* public provision of credit to the solvent parts of the corporate sector to avoid a short-term debt refinancing crisis for solvent but illiquid corporations and small businesses;
* a massive direct government fiscal stimulus packages that includes public works, infrastructure spending, unemployment benefits, tax rebates to lower income households and provision of grants to strapped and crunched state and local government;
* a rapid resolution of the banking problems via triage, public recapitalization of financial institutions and reduction of the debt burden of distressed households and borrowers;
* an agreement between lender and creditor countries running current account surpluses and borrowing, and debtor countries running current account deficits to maintain an orderly financing of deficits and a recycling of the surpluses of creditors to avoid a disorderly adjustment of such imbalances."

Finger Lakes:

brother :) it is nice to have you in the family :)

I am honored.

Could be a washout capitulation tomorrow. Any takers where the high for the VIX will hit?

Any other time, one would think the past four days would have already qualified as capitulation.

Sets up for a reversal on Monday. (Maybe that Wave theory is on to something?)

Nikkei down >10% right now 8207.99. Remember when it had a 39000 handle in '89?

"What we need are fewer financial engineers and more electrical engineers . . ." -- Paul Volcker interview on Charlie Rose (PBS), aired tonight. Charlie also interviews the head of the IMF.

SKF was a money train indeed. Hope others bought when I did (yesterday, in anticipation of the short ban expiration), but held longer... I got fooled by the gap down at the open and ratcheted up my stop too tight - taking me out with a gain large enough for a bag of groceries.

MCM

Oh when I said:

Where is Bill and few others right now anyways I wonder... something bigger is afoot right now.

I meant sleep...

which it's time for me to do soon

nite all. see you on the morrow.

"What we need are fewer financial engineers and more electrical engineers . . ." -- Paul Volcker.

Probably, but look at where the rewards are. The India-American who Paulson put in charge of the $700M+ came from the Univ of Illinois College of Engineering, as I did many years ago. He was smart enough to get an MBA and associate with Paulson. The rest is definitely history for better or worse.

Shark,
LOL I like the narcissistic attitude,
I look forward to your posts and marvel at how you can write and trade at the same time.Please let us know what is on your mind i find your insights as well as everyone else's very valuable.
My fearless prediction. Tomorrow is going to be a historic day. I believe the word of the day will be "hedge" and "gold". I will miss it since I am going camping. People Please take my advice don't jump out the window.

Good calls Shark. You deserve a victory dance. Contrary opinions can be hard to find in a herding world! Too many are "anchored" to their own and others thoughts and biases. Think like a lawyer and see both sides Buffet says.

Think for yourself and question your biases is the way to play. Trade the trade that is .... not the one your want and hope for.

It's obvious to me that shark is one of the good guys, so no need to beat him up for being himself. After all, he had the guts to speak his mind in the face of our momentum. Also, we should consider that he places trades for himself, not us. Usually tells us what he's up to, so what more could we expect?

Trade carefully shark, I think killer whales are circling!

IMO we're at a crossroads where meaningful progress can only be achieved through careful coordination between world economies by adoption of global solutions. This will take some time to materialize. Hopefully direction and volatility will be kind to us meanwhile.

TED Spread is now 4.23

At the risk of being crucified, and possibly banned can I ask one important question. Bill has previously admitted to previously working both the buy and the sell side.

He turned bullish just before the present debacle. We are now down some 15% plus.

Q: Does Bill still work for the sell side?

"If anyone is interests when I get tonight's newsletter I can post more about Monday's turn date which he plans to talk more about."

QT, I'm interested. Tks.

ben beukes: Can you predict the future?

I am myself beginning to wonder if this is more than a typical end of cycle bust, placing myself at odds with Bill's position, but there are ways to disagree without making an ass out of yourself.

Bill has tried to counter-balance the natural tendency to believe too long in the most recent status quo. Most people are so influenced by what has happened that they can not see what is coming up. That does not mean that Bill can call the bottom. In my mind, his message was that whatever you pay now is probably going to look very good a year from now (or 2-3 years at the outside).

Michael Shedlock and Tim Knight have both been floating the idea that we are coming to the end of wave 3 of the Elliot Wave model. This is to say that we would have another wave up and then a final (deeper) wave down. If I understand correctly, the final wave down would mark the end of the bear and we would be into the bull.

On the other hand, we might already be at the turning point (after tomorrow, say).

The latter fits perfectly with Bill's guidance, but the former does not invalidate it. The Elliot Wave scenario might fit well with Bill's projections depending on the timeframes in which this all plays out.

By the way, if you were in gold shares, today was not that bad. I am only going long in PM miners, fertilizer, energy, and (what I consider to be) defensive stocks. Of course, I still should have had some puts today.

I meant to say that it would be the end of wave 5 that would mark the end of the bear (based on my cursory knowledge of the Elliot Wave model).

I guess I should also say that Tim Knight's analysis is not necessarily based on the Elliot Wave (although in this case I think it amounts to the same thing). For whatever reason, Tim is currently operating under the assumption that there is going to be a run up and then a much deeper run down. As I think about it now, I think Tim's scenario is largely based on the chart from 1974...

ben,

You asked: "Does Bill still work for the sell side?"

It would be one thing to call into question the accuracy of one of Bill's many accurate picks. It would be indelicate, but it would be one thing. Your suggestion of an undisclosed relationship, of a hidden agenda resulting in a conflict of interest is extraordinarily distasteful.

Universal gratitude for all here not being at our collective throats. In 1980 I lost 5k. It kept me in money market funds until 2005. I'm now down about 150k and don't have much emotion about it at all. Progress?

I have started 15 positions out of the 36 Cara 100 stock today.

For the intraday reversal I see tomorrow, I will kick off the rally with:

QQQQ SMH USD INTC UYG XHB

I think the home builders, financials, semis and the tech will start to take us out of this bear.

good luck to all. thank you bill for your guidance.

onlineaces: "I think the home builders, financials, semis and the tech will start to take us out of this bear."

Why? Technical/fundamental reasons?

Considering the action of this past week, when I wake up on Friday morning, I'll probably be feeling a bit like this:

http://tinyurl.com/3ooqcc

Ben - you write: "Q: Does Bill still work for the sell side?"

Your question is outrageous. To present your reasons for disagreeing with Bill's stance is in the spirit of this blog. Bill presents his opinions, and encourages others to present theirs.

But to impugn Bill's motives is totally outrageous. If you have read the blog for a while, you'll know that Bill has invested several years and significant cash in creating this space for information and discourse.

It's the most open and honest site for market commentary I've found on the web. You owe him an apology - bigtime.

I have not been washed out to sea yet ... there's always something in my shellacked portfolio keeping me afloat. But for every scalp I take, the next day I am hit for a bigger haircut.

Earlier, I referred to my stock market money as "play money". Thank goodness, I learned at least 1 lesson from the latter stages of the dot.com bust : only "invest" what you are prepared to lose. Using margin is a personal choice built on risk tolerance; borrowing against shelter, retirement funds is taboo in my book.

Another lesson learned from the 2001 bust is related to one of Bill's key pieces of advice this week : writing (selling) puts. As the premiums get fatter and fatter, they may also steer the sophisticated investor onto the rocks. How? By the options writer using the new found equity from writing the puts to write even more. What the dot.com bust showed clearly (and so did the 1930's market) that even the best, surviving companies may fall 90% in market cap..

On the macro front, I seem to recall only one instance of an executive refusing to take his golden parachute. Until we see real sacrifice from the elite classes around the world, confidence will not be restored. More than ever, there is a growing consciousness that both public and private centres of power are self serving and will throw all others under the bus to preserve their claim to generational wealth.

I disagree that this market needs more liquidity.

More liquidity is not going to buy confidence.

We need more clarity.

When banks and corporations can trust what is on the counterparty's books then they will do business with each other. Until then, the unwinding continues.....

Doug

[Bill Cara note:

I have been consistently saying the same. Until HB&B comes clean by writing off its toxic holdings, and replaces its lost reserves with new capital (if they can), this fiasco will continue.]

Rummaged through this forex site and came up with a belated report on no rate changes in the BOJ:

actionforex.com

http://tinyurl.com/4l2235

This is a good site for monitoring currency moves in the last month, they have occasional charts with technical analysis:

http://tinyurl.com/4hkwuu

Aussie website.

Jock,
You can't pass BHP and RIO on the ASX and I guess their ADR's on the NYSE. About 1/3 of the ASX is held by US mutual funds so while they sell off and return funds to the "safety" of the US we can expect the AUD to continue to fall which means you could pick up BHP & RIO even cheaper. Bon chance...

ALOHA !!

LET THEM FAIL!!!

I posted this at the Cunning Realist site today ... (I am too lazy to write one here) Under the article entitled "MORTIMER THEY'RE SELLING!"

READ ON:
ALOHA !!

Was there a problem with letting these large fraudulent banks fail? The FDIC is still there and we'd be bailing out depositors instead of CEOs! Let their derivatives implode ... The building will be left. Barcklays bought LEH for $1.35 bil and the Manhattan building was worth $960mil! The building was worth more than the "paper shuffling"!! You just move the old Harvard Skull Boys Club out and move the Austrians in!

Here is a US bank that did not participate in the derivative/subprime mess and after all the mayhem the past couple months its share price is still at the same level it was back in 2004 ... $45 per share! What bank? Bank Of Hawaii(BOH:NYSE) Voted the top five safest banks in the USA. How come this bank gets NO praise on CNBC and Warren buffet isn't throwing $5bil into Bank Of Hawaii? I guess Bank Of Hawaii just isn't fraudulent enough to be admired by the masses! We have lots of resorts here in Hawaii where the execs could go and spend $400,000 but the Bank Of Hawaii execs chose to stay at the office and work!

Hank Paulson and Bernanke's solution is to save the fraudulent banks that made horrendous mistakes in risk management but throw the baby out with the kitty litter and let banks like Bank Of Hawaii go it alone. Bank Of Hawaii is not begging for bailouts or over at the US FEDs discount window.

I say let the BIG BANKS FAIL and reward banks like Bank Of Hawaii and make them our CENTRAL BANK! Save the depositors ... get BOH better management ... get rid of the pond scum that has been infecting our monetary system for 95 years and we'll have a great base for moving forward, unless either OBAMA or McCAIN are elected.

Somehow Bank Of Hawaii survives and isn't even a member of the US FED insiders club? Why is that?

Now it might seem like I am some PR guy hired by Bank Of Hawaii but I am not! I do have my money there and I never worry about it!

Its 10PM ... Do you know where your money is?END

Look at BOH(NYSE) performance so far and compare that to the huge selloff in the BIG BANKS we reward with all our hard earned tax money! Isn't everyone tired of rewarding criminals here in America?

We need a MAD AS HELL AND I'M NOT GOING TO TAKE IT rally at every major city ... Just so we can give the CNBC crew something to contemplate. Something the CNN Situation Room can pant over and something Greta can discuss with her overpaid attorneys ... the four stooges!

What a circus of "Idocracy", essentially a democracy full of idiots!

Hard to imagine jse gold is up 112 points so far today in the face of the global equity crash.

The dow flag that formed in 2004 has a fan line from the 2000 high that intersects with 8275 fwiw
The rising channel intersects with that fwiw

http://tinyurl.com/4h24es

Nice post Tbar. If that bottom trendline holds, maybe we really are close to some kind of bottom here.

Looks like it's 300 or so away...

QT: would fit with turn date soon (?Monday +/- a few days...)

My plan is to keep calling for a dow bottom every day in 100pt increments so I can eventually claim the fame of calling the great crash of 2008 bottom, start a newsletter and make back all the money I have lost

(thats how the other newsletter writers did it isn't it?)

Just a possibility at this point, something to watch for support to stick to. I thought 9033 would provide support yesterday and it got trashed so certainly this could be wrong too,but it is a compelling chart.

I think 7 years wested by market with 7 days of hell and no end in sight
May be after end of tunnel there is no light

Good morning,

For the sake of disclosure I would like to say that this morning I have taken proffit on my paper gold long calls, and am now 100% in cash.

I remain bullish for gold however, but the kind of market gyrations we are witnessing are too much for my personal profile.

Probably I will miss a nice run, but I do not care. There will be another day, and another proffit, and there is nothing wrong in taking proffits and standing on the sidelines waiting for better moments.

As for the cash itself, divided in several banks.

Enjoy your weekend,

Cheers!

Coming out of '87, what rose fastest from the ashes into early '88??

Some thoughts on stocks based on macro events this time:

BA - lag time, discretionary travel will be down and technology makes need for transport less
IBM - really long lag time
Energy - will remain depressed, especially if oil producing/emerging countries are plunged down (they go from cars to no cars)
Food - possibly cheap discretionary food, YUM might be a good choice? McDonalds. If anyone is watching suggest target/stink bids!!
Infrastructure - not looking good if there is a recession, and big gov projects will go on hold
Gold - if currency collapses great, but if deflationary depression just ok, with reflation will rise but with virtual lockup in govts / banks/ corporate finances...reflation won't be easy
Commodities - not initially, but emerging growth and population growth will pick this up in shorter timeframe, so AG might be good

SO, I've convinced myself of YUM and AG. Food is the place to be.

Thoughts?

holy smokes look at the futures...opening is going to be fugly.

xom down in the low 60's...time to write some puts??

what everyone knows isn't worth knowing.

http://tinyurl.com/3rcvee

Rob Hannah's excellent look at the 5-day charts for key market rebound days.

Summed Up: Wait for the low to put in and then jump in.

Easy for him to say ;-) But an excellent study for day traders.

http://en.wikipedia.org/wiki/Stock_market_bottom

They'll be gunning Ma and Pa's sell stops at the open.

Question for Canadians,

I have cash on my US side of account from closed short positions. Should I bring it to the Canadian side before the $US falls.

Thoughts on CAD strength? Looked to see what CIBC's Rubin said but since his parity call earlier this year, no new statements.

But is there enough blood in the streets yet?

Apologies, I meant to say 5 MINUTE charts in my post of 7:00 a.m.

re:blood

It's hard to know but here's what I see.

3.5% of the Naz stocks are trading above 50 day MA.

.4% (that's right, 4/10 %) of the SP500 stocks are trading above 50 day MA.

Stocks don't all bottom together at the same time.

Some appear to have bottomed already but time will tell.

I'm using the RSI 7 day, looking for numbers <10, AND the hourly MACD to diverge before opening a position.

GL

navid - why do you think the $US will fall?

Looks for the moment that Yen denominated money will continue to do well. (but not equity)

Passed by the TV when Neil Cavuto happened to say the DOW P/E was 10. Their seems to be some dispute, but according to a graph hyperlinked here on Wednesday, and I had read something similar, the lowest P/E on the DOW was 8 twice in the 70's. However, I don't remember if that included the Depression.

re:blood -

Depending on how we open today (futures are down so I am guessing we open down), I am opening small positions in JNJ, KMB, KO, XOM, AXP, and HSY...

If not for me, for my kids.

I actually have a lot of cash to throw at the market; but like everyone else, I don't see bottom just yet, and who really knows.

To give you an idea of the scope of the changes in the foreign exchanges of just about any currency vs. the Yen:

http://tinyurl.com/3n2r59

Good morning.

One Cara 100 Ratings Change at this time:

GOOG - Price Target Lowered from $600 to $500 @ RBC

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

http://tinyurl.com/4mzlv5

Excellent comments by Don Coxe:

http://www.mineweb.net/mineweb/view/mineweb/en/page67?oid=70607&sn=Detail

Is it true the President has the option to suspend the election in cases of national emergency?

Roubini is basically calling for a reverse Marshall Plan for the U.S.

Denny- Apparently he can if he declares a "catastrophic emergency". He determines what that is. I would consider calling the election early if I was in his position. He has aged a lot going by recent photos. Quite a legacy.

Remember Monday is Columbus Day and the banks are closed. Maybe they should give the market a day off also! Lord knows it needs it.

Got gold? Move your money to CAD?

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

If we fill in the gap, could move to $0.92 pretty quickly. (optimist)

I think this week will be an $0.84-$0.85 CADUSD=X week.

Why not start your Canadian investment with a mine or peat moss farm?

Ontario Canada Kenabeek Province
Silver, Uranium, Surface Mineral Rights, and Peat Moss.

Buy It Now! price of $20 million.
http://tinyurl.com/3pjt5k

Seriously though, if you think of the financial markets as an onion unravelling, I think NY is the center (well, last year it was. Now it's probably Washington DC). Financial institutions will be throwing away the skin and looking out for #1.

This would mean further downdraft in non-US equities, currencies, and anything not related to cold cash in USD, including Gold/Silver. Anything with 1 iota of risk will get pitched, which would account for miner decreases.

Would not be helpful for CAD in the short term.

It's all about amassing a large war chest for the big buyback.

The problem is if u close the markets, people will sell prior because the uncertainty of when they'll open again. And when they open, people will sell because they're afraid they'll be unable to sell later on. Dangerous precedent.

As I recall the '87 crash, companies stepped up and started buying their shares back. So either/both buybacks & mergers/acquisitions would be indicative of a bottom.

I think the CAD will suffer a painful rout, especially if oil prices continues lower. This is because of declines in the TSX, and because of inflationary pressure making oil sands works less viable than other sources.

If this occurs, then Canadian banking firms will be facing difficulty meeting with their obligations, further exaggerating the problem, much like Iceland.

The CAD has a moderate interest rate differential with the Yen, so its bound to continue to its lows, where the AUD has already made much progress.

Open & down is better than closed & ???

Pre-market GE is $18.39. You can buy at Buffett's price now, and play the earnings game today.

My $21.90 exit looks pretty good. But I guess I'll just dollar cost average (does it work the same way selling downwards?!?)

Do You Yahoo for $12 today?

Japanese insurer collapses:

http://biz.yahoo.com/rb/081010/business_us_financial_japan.html?.v=3

re:SKF

trade I'd like to have a do over.

Remember when it dropped on Sept 19 when the no short list was announced? Fear bottom.

safe to say everything is down premarket except inverse or ultra short etfs, but the names i am watching are continued to be sold off. goog, rimm, ibm, crm, x, fslr, csiq.

Good luck to everyone today. still cash and waiting

Need that big whoosh down to clear out the sellers.

Feel free to use me as a contrary indicator. I have a cash account that I've never made a single trade in. I'm going to start buying OTM index calls this AM on a big down open. Probably the exact wrong thing to do. Scaling in, not all in at once.

TED spread up to 4.46, a new high.

Is it possible for equities to recover until this and other credit spreads begin to contract? I seem to remember a poster mentioning this earlier. I'm trying to recall what happened during the last several (minor) TED spikes. I really wish Bloomberg's web charting was better, it's giving me errors when i try to compare.

Thanks to all for their chart posts, very interesting, Re: bottom fishing.

Good luck to everybody.

How the Market Works:
Copied from stockchase.com.You can track all picks from BNN on this site.

Once upon a time a man appeared in a village and announced to the villagers that he would buy monkeys for $10 each.

The villagers, seeing that there were many monkeys around, went out to the forest and started catching them.

The man bought thousands at $10 and, as supply started to diminish, the villagers stopped their effort. He next announced that he would now buy monkeys at $20 each. This renewed the efforts of the villagers and they started catching monkeys again.

Soon the supply diminished even further and people started going back to their farms. The offer increased to $25 each and the supply of monkeys became so scarce it was an effort to even find a monkey, let alone catch it!

The man now announced that he would buy monkeys at $50 each! However, since he had to go to the city on some business, his assis tant would buy on his behalf.

In the absence of the man, the assistant told the villagers: "Look at all these monkeys in the big cage that the man has already collected. I will sell them to you at $35 and when the man returns from the city, you can sell them to him for $50 each."

The villagers rounded up all their savings and bought all the monkeys.

They never saw the man or his assistant again, only lots and lots of monkeys!

Now you have a better understanding of how the stock market works.

Note :I believe that if you have purchased good quality" monkeys" they will eventually bring home the bannanas.Over the last two weeks i have about 30 % allotments in :dell,abb,cos.un,su,eca,cco,tlm,go.a ,rim,agu.75 %
abx,g,cef.un

Will probably not add more untill there is an uptick in weekly macd histogramme.

On the Yahoo finance home page, the market summary has a small chart with three tabs, on for US, on for European markets and one for Japanese.

The European and Japanese markets saw their greatest losses on the open, especially European.

http://finance.yahoo.com/

Jse golds have done well today, and the tsx golds are bid up as well looking at kitoo's front page at the right sidebar

Could the gold stocks actually rally today?

Seems impossible but even Cnbc just said ; "anything up ya gold stocks are up"

Ma and pa better have a bazooka in their pants if theyre gonna trade this market eh bsi?

We are lucky to be witnessing this historic multi-thousand point crasheroonie.

Many traders started, worked and retired and never saw the interesting stuff we're seeing.

VXO (oex volatilty calculation) tops 100-all time high 172 in October of 1987. Market sold off hard on a supposedly incorrect press release that some ICE trades from Thursday had not settled. ICE just called the report false-S&P rallies nearly 20 points. How do these press releases get into print? Terribly irresponsible at best, fraudulent at worst.