Is the rally for real? The sheer magnitude of yesterday's stock market surge makes for interesting reading when put in historical context, but it seems premature to conclude that markets have seen the bear’s corpse.

Link here for some interesting data and charts: http://tinyurl.com/3h8hg8

Bill: "Yesterday the final hour prices soared, and the major maket indexes set all-time records for a single session. Yet there are people who wish to debate whether this is a secular Bull versus cyclical rally. The mind boggles."

Why? In history, such large gains have appeared only during bear markets:

Dow:
1929-10-30 +12,34% 258,47
1929-11-14 +9,36% 217,28
1931-06-22 +11,90% 145,82
1931-10-06 +14,87% 99,34
1931-10-08 +8,70% 105,79
1931-12-18 +9,35% 80,69
1932-02-11 +9,47% 78,60
1932-05-06 +9,08% 59,01
1932-08-03 +9,52% 58,22
1932-08-08 +8,16% 67,71
1932-09-21 +11,36% 75,16
1933-03-15 +15,34% 62,10
1933-04-19 +9,03% 68,31
1939-09-05 +9,52% 148,12
1987-10-21 +10,15% 2027,85

Nasdaq Composite:
2000-12-05 +10,48% 2889,80
2001-01-03 +14,17% 2616,69
2001-04-05 +8,92% 1785,00
2001-04-18 +8,12% 2079,44

http://www.tradersquest.de/2008/10/13/der-groeszte-tagesgewinn-seit/

silver has a gap at 10.14 does anyone think this will get filled? on the 30m chart.

I think g.to has one at 27.79, maybe that was behind the eakness yesterday?

People, Bill is simply stating the most fundamental rule in trader's terms.

Don't Fight The Fed.

If that truism holds water, then 'Don't Fight The Worlds Central Banks' MUST be adhered to.

And where is this all happening? At the called for low in the mid 7000's on the DOW.

Look at the chart. If it were a candle stick (it almost is) wouldn't it signal a buy to sell at the mean?

Geez, XOM from 58 to 75 in a couple days is not a good trade? What do we need, silver platters and to push the button for you? LOL!

If you're freaked out use tight stops....:>)

[Bill Cara note:

Not only central banks, but governments have joined in all over the world to reflate the economy by pumping up the banks. Yesterday, one European country, Germany, agreed to pump in almost $800 billion, and the aggregate for Europe was close to $2 trillion -- yesterday in one day! Now these are commitments, just like the trillions agreed to be injected by the US Treasury. It takes time to be implemented. It will be when the actual money injections are made that prices will hold and rally further beyond the first recovery from extremely over-sold markets. These multiple trillions plus the well over $4 trillion that was held in US money market funds at the end of last week, and the trillions held elsewhere in the world in similar instruments, will ensure that equity prices will continue to rally for a time. We all probably agree that the legislators of the world have to start fixing the problems and not just addressing the symptoms before independent traders will regain their confidence in the capital markets. But, there is nothing wrong with the capital market system except for the proclivity of interventionists to try to "stabilize" it. The problems lie in the structure of the financial services system and the lack of effective regulation there. In terms of markets, there is already too much regulation. "Subject to Regulatory Approval" is just code for "Bankers' Interests Must Be Protected". It's time that our interests were protected and that our elected legislators started doing their duty to serve only the public.]

Be interesting to see if trader's will be looking over their shoulders and taking profits wondering if this is real.

Just bought a stash of GG at about $25.30

Bought a stash of Gold, huh Billy...Haven't heard a phrase like that since college.

That was some Bodacious rally. What did it last, all of 20 minutes?

IB isn't updating DOW Jones Industrial Average value in its Trader Workstation. Anyone else experiencing that? S&P and Nasdaq are also very slow to update.

nemo,

here come the shoulder-lookers.

Fazeli, yes, IB indices are in slow motion right now.

Ok but note that "fighting the Fed" has actually paid off for the most part, until just recently.

re:DE

per usual, I sold too early. It hit max pain of 45 at the open.

BP

I think Bill basically said the same thing. Until the money starts flowing this was an oversold news driven rally.

nemo

I was thinking the same thing about the legs of this rally. I bought a lot of stock (@ least for me) on Friday. With 15-20% average gains, I was wondering about selling and buying again at the next dip.

I am bullish about the market as well, the central planners are so set on having a bull market that I see it going up until the fundamentals outweigh the efforts of market intervention.

I wish I'd been buying stashes of gold in college - would've been a much better investment.

Billy,

Are you talking the metal or the bio-degradable material?

Great, now that we're all on the same program (inflation), let's get on with the dissection:

Let's first pick a reference point from where we can begin discussion, I like Bills, for the sake of simplicity - let's add another zero...

Stock prices must reflect the devalued currency in which they are denominated - If that coke now costs $6, my KO shares should be around $440. Extrapolate from there...

Regardless, a simple DOW return to 12k would leave us in the dust when normalizing our portfolios to inflation (bottom line on the inflation time horizon).

It's the same as holding deflating cash if you only break even.

Good Day To All

This is a wonderfull day

Money is being made today...fear is slipping

Thank God and Bill I bought stocks at such cheap prices.....

tsx up..... 1200 points...wow...wow....wow...wow

Bill and cara community these are exciting times..... to those who bought while others were running ......Enjoy this money making day

SV

Pookster,

Unfortunately, incomes will not adjust along with wages. The government under reports for various reasons. Corporations use government figures to hold wages down. Suppressed wages limit consumption. Could be some issues for equity prices.

Long QID at 59.64
Added to FXP position 86 and change.

Do your own homework.

nemo - He's obviously talking metal, it's the other stuff that had only short lived returns.

Fuggettaboutit

Pookster

Ya' know what happens everytime I think something is obvious?

DJIA up 246 first half hour yesterday, 321 last hour on lower than average volume.

Russell 2000 (indicative of animal spirits)
Up 32.15 first half hour yesterday, up 20.2 last hour.

U can learn a lot by observing.

im beside myself looking at the gold miners.
crushed along w/ the market despite gold zooming,
a jump yesterday and the gdx is almost back to its close while things flew because gold is off a few dollars.

i dont see any scenario why these gold stocks will do well unless both the market and gold move up very hard. even then i dont see it.

am i missing something?

Spike - If only I were an able trader...

Bill you mention that "the new-found wealth will translate into more tourists coming here to relax and decompress from the action of the capital markets."

Do you believe that governments can create wealth? Isn't this "new-found wealth" really just paper money creation or money redistributed from taxpayers to wealthy bankers?

I would challenge the notion that increasing the amount of fiat money increases wealth. If that was the case we would all be rich.

[Bill Cara note:

You are correct. The added debt is creating to the wealth impression, which is what I was about to write this morning. Sorry, I cut it short in order to get to the beach for 'attitude adjustment'. Economic wealth is created by labor and discovery/improvement to real assets, and there is a recession underway in economic terms.]

NCC breaking out over 20 day

Gold is making new highs in other currencies. It is the dollar strength that is the holding back the gold price in dollars. Once that abides gold should lift, although I can't help seeing the hand of the powers that be taking gold down on Friday and yesterday to prevent a rally going from the trillions in money being pledged to end the crisis. The action just didn't match earlier in the week when gold started rising as the market tanked.

Trader Workstation....where are my charts?

dr.cosa,

re: gold miner stocks

From Bill Fleckenstein:

"My regular readers are aware of the shortages of physical gold. And I think a lot of folks have found that out for themselves when they've tried to buy some coins. (Read "Going for the gold? Be alert.")

What I haven't talked about lately is that gold lease rates have gone through the roof. That appears to be because central banks are becoming credit-averse and not lending out their gold as they once did. I've also heard rumblings about some large holders of gold futures deciding to take delivery, since they're having trouble buying physical gold in sufficient size.
Gold coming up short of demand?
If that's the case, it could cause a mad scramble at the ComEx, the commodities exchange, because there's not enough gold to meet the open interest. It looks like physical gold, as opposed to paper gold, is rapidly becoming the flavor of the day -- meaning that a huge price move may lie just in front of us.

And, if that thesis is correct, when more folks start understanding it, there might not be enough gold around to satisfy demand at anywhere near current prices -- and their attention will turn to the place where they can find gold, namely the gold miners, whose job it is to "make" more. (With the price of energy dropping as world GDP slows, the profit potential for the gold miners is liable to be the best it has been in many years.) So, I think the stage may be set for a dramatic move in gold stocks."

Regards

To those who use Etrade Canada:

Don't look now but Etrade is having issues and their telephone lines must be flooded.

I had a buy limit order on XGD that I wanted to modify, but the system says "Order to Sell 0 shares of XGD cannot be modified or canceled."

That means that I'm stuck with my limit prices, and I can't reach anyone on the phone!!!

I also have an XSP order that I'd like to modify... LOVELY!

Chasers just got burned.

UYG up 12%, SKF down 6%

I haven't seen that much disparity between those two in the past!

Turtle soup!

hi everyone,

i was lucky enough to get in on NCC a few days ago at 2.39. any suggestions on when to take profits?

stopped out of FSLR at 146.78

made some lunch money.

Ho Dee Do!

Turtle soup Dog!

dr.cosa - Look on the other side of the coin.

They got the egg money, the eggs, the basket and the broom that granny rode in on!

[Bill Cara note:

I don't see that. At the open there was a lot of arbitrage to rebalance US prices with the prices of multi-market listeds. There was also lots of enthusiasm for the ongoing coordinated moves by govts. So, there was a sell-off from the post-open high, but that was only catching the weak hands who wanted to take profits. Markets are volatile, and my point is that traders now need to buy the dips. And, btw, the volatility was helped along this morning by Wall St comments and rumors about the Tech sector. Doesn't bother me: gives us a longer window for buying the shares of the best quality companies in that sector.]

MDR was holding on for a long time. But reversal was swift.

DJIA 10 day ATR is now 577 pts. Subtract that from 9387 (yesterday's close), 8810.

How do u think Ma and Pa will feel about that?

Using TD Waterhouse and CNQ in Canada still showing no volume. Trading in the US fine. Is anyone seeing the same on other brokers or is it a TD glitch?

GE down over $1.

Hope they convert to a bank soon.

Oh the humanity!!!

Bought SLW just below Bill's price ($4.25) put in bids at 4.15 and 4.00. Sold this AM at 5.95.

XOM was killer.
GSS .98 to 1.16
MSFT $21 to $25.60

Looking to reload miners and metals on a pullback/$USd strength.

Bsi87: How do you get 246 on DJIA?

On Tradestation:
Previous close = 9387.61
1st half hour:
open = 9388.97
high = 9785.93
low = 9388.89
close = 9493.30

So if I take previous day close (or today's open) to first 1/2 hour close I get 104/105.

How do you calculate 246? Are your numbers different?

I ask because I have never been able to duplicate your values and I should be able to.

TIA

they are selling the market and buying gold and gold miners, it appears

Ramp it up, suck in the amateurs, sell and take profit. Rinse and repeat.

ETrade put through my XSP order at 12.20! No chance to modify down even through repeated attempts before the asks ever came close to 12.20, and with some attempts to call them (constant busy tone)!

Still stuck on XGD, but my bid is at 14.25, currently sitting at 14.70!

On another note: anyone notice PGF.UN is frozen? I see no price update from $9.62 CAN on Google Finance or in ETrade. PGH is at 11.13!

re:DJIA

using the charts on Etrade. Use the previous close, 10AM price, 3PM price, close.

Roubini is on Bloomberg for the next hour to scare the hell out of the populace.

The latest from Colin Twiggs.
... Until The Fat Lady Sings
The above quote from sportscaster Dan Cook (often attributed to Yogi Berra) is particularly appropriate given the number of experts wheeled out by various news channels to officially pronounce the latest turn of events as the market bottom. This relief rally, sharper than usual because it follows a particularly alarming fall, does not signal the end of the bear market. Because of the ban, there are no short-sellers forced to cover their positions — which could shorten the duration of the rally.

We are witnessing a defining moment in market history; similar to October 1929. This is not merely a correction but the end of an era. The collapse of the largest credit bubble in history. Even in the unlikely event that regulators get most of their responses right, the impact of this crash will remain with us for several years.

Political leaders need to learn from the mistakes of the past. Repeating the same policies would destine us to suffer further similar crises at ever-decreasing intervals.

While governments need to take action to limit damage caused by the collapse, they need to tread warily. Tax rebates or tax cuts are probably the least damaging form of fiscal stimulus, provided that they do not increase the budget deficit. They are also among the most effective as their impact is direct and immediate. Attempts to increase government spending programs or accelerate infrastructure projects, on the other hand, should be treated with suspicion. Spending programs have a ratchet effect: they are easy to introduce, but difficult to later withdraw. Infrastucture projects, on the other hand, are difficult to fast track. Attempts to do so are likely to result in poor planning, poor project selection, and major cost blow-outs.

Another typical mistake is the Australian attempt to stimulate their struggling housing market by announcing a subsidy for first home-buyers. At first glance this appears to be straight assistance for young couples purchasing their first home, but closer examination reveals that it will raise entry level prices (of new homes) and is largely a hand-out to property developers. This is one of the very policies responsible for creating Australia's massive credit/housing bubble in the first place.

Regulation of markets is desirable, but interference with the actual market mechanism is dangerous. Policies that attempt to stimulate or suppress actual supply or demand for a product or service are both naive and reckless. That includes lowering interest rates to increase demand for credit.

A recession is the market's attempt to regain equilibrium after a period of artificial stimulation (normally through suppression of interest rates). Attempts to block this by further inflationary stimulation merely prolong the painful process of readjustment. Instead of a short, sharp recession with falling prices to restore market stability, we could face a lengthy period of stagflation. Stagflation is a normal recession, but accompanied by high inflation as a consequence of government attempts to prevent readjustment. Typified by lengthy periods of low or zero growth, stagflation was experienced in the US in the 1930s, again in the 1960s to 70s, and in Japan in the 1990s.

The above chart shows nearly two decades of stagflation, between the late 1960s and early 1980s, when the Dow experienced zero growth. Traders are still able to make money in this kind of market, but investors who try to ride out the peaks and troughs will get nowhere.

Stock Markets
The Dow Jones Industrial Average rallied sharply on news of a coordinated government and central bank campaign to shore up the battered global financial system. Expect resistance at 10000. If that is penetrated, the rally could carry as high as 12000, but would not indicate that the bear market is over.

Gold
Spot gold is oscillating in a wide range, between $820 and $930, signaling uncertainty. Failure would signal a test of $740, while upward breakout would offer a target of $1000.

In the long term, a broadening descending wedge over the last 6 months is a bullish sign. Upward breakout would offer a target of 1200, calculated as 950 + ( 1000 - 750 ).

Source: Netdania

".....where Fortune is concerned: she shows her force where there is no organized strength to resist her; and she directs her impact there where she knows that no dikes and embankments are constructed to hold her."

~ ~ Niccolo Machiavelli, The Prince (1532)

[Bill Cara note:

You have to give Roubini a lot of credit. I have never seen him as a Talking Head. He clearly speaks his own mind. People like him who are consistent in their analysis, and proven to be right most of the time, should be listened to more than the Kudlows and Cramers of the world. But, even like another analyst I like, Marc Faber, Roubini speaks in terms of macro-economics, which often doesn't help much when equity markets are turning. Study of price and volume is the best use of your time. Colin Twiggs does focus on prices, and more helpful I think.]

BB, Faxeli, Canadian data

Yes I was seeing the same thing on BMO real time and even on the TSE site delayed, no trading data on several stocks.

It seems to be cleared up now, I think there were just too many orders on the open for the servers to keep up.

Quasi

Retail broker just called me recommending ACI, MEE, MRO, FCX, OI, CAT, CMI, MIC, TXT, LNC, MET, PFG, XRX

And, no, he did not call Friday morning...

So I'm confused - What's wrong with selling rally's and buying pullbacks (assuming you can coordinate effectively)?

Nemo, CP,

The Obvious

I thought SKF was simply the most obvious, killer way to make money for at least another year. I was on a roll from last Oct... until...

They changed the rules on shorting financials.

Reagan said, "Trust, but verify." Which I will amend to: "Never trust that which cannot be verified (ie: the government)."

i still like rimm, ba, ibm, fslr. still on sidelines waiting for my wave.

Teck Cominco is getting killed on high volume. I wonder what that is about.

[Bill Cara note:

It's called profit-taking. As long as there are day-traders, there will be profit-taking following big rallies. TCK, a Canadian company, was up yesterday +35.8% in NY when the Cdn market was closed. Now that the Toronto Exchange is open, there are also long-term traders who want to seize the opportunity to get out. Wait a day or two before the situation settles out. ]

PGF.UN now showing as halted on TD Waterhouse.

CNQ still showing no trades. Perhaps it is the volume, but the market's been open for over an hour and a half now!

Tennessee Fool - If I didn't know better, that sounds like a definite sell signal. But everything tells me we either move sideways for a while waiting for implementation, or keep moving up in anticipation of implementation.

Grym

Still think SKF is a money maker. They changed the rules, but SKF adapted. Just look at what happened last week during the ban and today.

Bill & ChicagoMark,

Tourism: My guess is that regardless of the "wealth effect" being real or otherwise, once people begin to perceive the growing inflation, they will spend it before the next price jump.

One thing advertising can teach us is that people act based primarily on perception.

Just look at yesterday's market jump — bottom is in — buy before you miss out — happy days are here again is just like cosmetics — a classy car — or whatever makes us "more appealing".

Grym:
Follow on to my last comment...by banning shorts they made people think the financials were worse than they appeared (think tier 3 assets). People bid over the impediments. Like everything today,the environment is still more amenable to daytrading.

Seems like I'm just graduating from walk away 101. The class where you learn to make a profit in the first hour and a half, and then learn to walk away from your comfuser instead of pissing away your profits in the next three hours. What's the curriculum for the 102 level class?

Grym - I think the fact that $trillions$ are being injected pretty much verifies that we can trust inflation to kick in. Inflation won't start up until people start buying though, so prices could keep falling (deflation) or move sideways for a while.

Regardless, fiat is being devalued and will become evident if traders decide to exit fiat or mom&pop six-pack resume buying, if ever they do. I don't see how gold could loose in this environment.

bb
I'm still showing a number of TSX stocks, mainly royalty trusts) that haven't opened yet. They aren't showing as halted, just not trading. This is both on IB's TWS and Questrade. This is almost 2 hours into the trading day.

Skater:

Buying while puking..

Chickenpookie,
Thanks for your comment. I wasn't impressed with the timing or the picks, but thought it interesting nonetheless.

Skater,

Walking away is the most underrated, critical part of this game. There is a strong tendency to keep playing even though you shouldn't. That doesn't mean good trades don't appear later in the day, they do. By walking away I mean not being stupid and impetuous. Not letting the market play you.

[Bill Cara note:

The two largest US financial companies -- BAC and Citi are up at this point +15% to +16%. This is good for market stability, I believe.]

the gold 30yr chart shows an ihs neckline/strong resistence at 730, it was never tested after the breakout last yr. I wonder if the last 4 days is a 100$ bear flag developing, that would test 730,just a thought that might explain the share weakness?

but with the xau:gold ratio at 30yr lows and pog at 840 why would they be weak anyways? how frustrating.

I'll expand on nemo's entry:

101 - walking away while hands are itching
102 - buying when puking
201 - selling when laughing
202 - stopping out while shrugging
301 - looking absent and indifferent while walking to the bank

Just a thought....
I am not sure that inflation will be a major problem going forward...
My thinking is that the trillions they are injecting are just replacing the trillions that have been lost. There for you end up with the same amount of cash.
I know that is probably an oversimplification but does make some sense to me. Correct me if I'm wrong

401-sending you butler to the Ferrari dealer for the special wax so he can rub your car down.

DJIA:

previous close (tradestation & Fidelity) =
9387.61

10 o'clock close
TS= 9493.30
FI= 9525.72

So Etrade must have a 10 o'clock close of 9633.61

So this gives values of 105, 137, and 246.

Bummer, different systems giving different values.

Between Friday and Yesterday I've been working my best to manage new positions in CHK, ESV, EOG, PXP, XOM, and CCJ, and MGA.TO.

I've bought and sold and re-entered ASML and am looking at EP and Del Monte (DLM).

krishnamurtidude... that would require an assumption that money is truly lost, i'e. disappeared in some black hole. In reality, money's changed hands I think?

canadians, don't forget to vote today

Hi Vadym,

Just wondering if mark to model vs. mark to market is the black hole?

AAPL around 107 and RIMM around 61 were great entry points.

Sometimes I like to play pullbacks buy using Guppy's multiple moving averages, buying when there is a downward intrusion of the short term MMAs into the longer term MMAs, without the longer term "compressing."

http://tinyurl.com/444xfq

These type of charts help me visualize the relationship of stock movements to the long and short trend. I'd never heard of the Australian trader Daryl Guppy before, but I enjoy using his Guppy MMAs and maybe some of you will, too.

Grym - SKF - I think this was a good plan at one time prior to banking spanking their bottom on concrete. When you're at the top, where else is there to go but down, and vice-versa? Gotta get the timing right, or nearly right.

Question is, how confident are you somethings near or at top or bottom? You can trust your judgment, but top and bottom are hard to verify. Trend isn't as difficult to verify, and if there's a trend that lasts one day, joining that trend for 30 min or so lessens your risk to a trend reversal. To make money on a shortline ride, you position has to be large as opposed to a smaller position on a longline ride.

Trends are often identified by fundamentals, and only verified by reality. There can be many harmonics within a trend, but overall the trend will remain intact until the fundamentals change. I lost interest in SKF when I realized that government was actually going to bail out the economic terrorists. In my mind, that changed the fundamentals. Bill said flatline, and I tend to agree. If government is going to do a bailout, the investor gets screwed first, the public second, and the CEO third. On to bigger and better ideas. Because I like it, so the car!

I'm nowhere nimble enough for consistent 30 min trades, and prefer to stick my money somewhere that eventually sticks it to fiat, because fiat's been sticking it to me lately.

As bsi87 says - expect the unexpected, and what everyone knows isn't worth knowing.

It seems like no one yet sees the inflation sign hanging from the parabolic reflector just behind the incandescent light source lighting the tunnel through which the locomotive is now roaring towards us. Is this because they're blinded by the speed and dazzled at the brilliance of the train? I'm thinking yes.

Those dollars were never dollars. They were debt issued in treasuries that still lives on.
The added currency is what we all know as dilution.

That's essentially the TOG BTW.

"move sideways for a while waiting for implementation, or keep moving up in anticipation of implementation."

Or, move downward upon failure of implementation.

CP,

Here's how a trader named "Stewie" played SKF this morning.

http://tinyurl.com/44wc2v

Any idea on why JPM has not put on its party dress along with the other bailed-outs?

Perhaps 25B will not solve their problems (nor anyone else's for that matter).

Bill's Friday aft. call to buy, buy, buy -

Great and gutsy, but I'm not set up to buy tens of stocks quickly, nor bail on them this morning for example, in my skittishness.

Instead I've been more content day-trading ETF's. This way, I can concentrate just on SPY (SP-500) TWM (double short russell 2000) and GDX (senior gold ETF).

Even in nervous times, I can wrap my head around watching and trading these three - but not 36 Cara 100's much less 80 picks from Pascal Villain.

If the longer-term rally which Bill forsees should materialize, I'll gradually reduce emphasis upon these ETF's and increase Cara 100's.

FWIW, perhaps this approach will be useful to others as well.

among mining and metals industry, only gold (4.78%) and silver (1.74%) stocks are positive.

Copper, non-metallic, alumuminum, industrial metals and minerals, steel and Iron are all mildly negative. (from 1/2 to 1.8%)

Jock

Did you ride TWM all the way down [$RUT 470+/-] even before the $RUT broke 650?

Finally a little joy on CEE-T (Centamin), which I keep averaging down on. Egyptian AU deposit to produce first ounces in 2009 with ~12 million ounces of resource at decent grades. 50/50 agreement with the government w/preferential payback of capital (might be a good model for KRY to pursue). Guess the country risk plus currency destruction between Egypt, Aust. and Canada to the U.S. are downsides. Comments anyone?

BOP - I'm glad Stewie made a bundle off SKF, he's an astute trader who recognized a trend, formulated a scheme, and capitalized on it. He gained what, 12%? I wonder if he traded SSO yesterday.

ALOHA !!

wave ... It is!!

Krishna ... You have to go to mises.org and understand what money supply is. You cannot throw the kitchen sink into the definition of MONEY! DEFINE MONEY first and then you can define MONEY SUPPLY! A house is not money and neither is the DOW. If it were up to the deflationist they would throw in car sales and the beanie baby and cabbage patch bubble deflation! HA!!

re: Metals/Minerals companies (or maybe with the money they will make people going forward we should call them MINTerals)

It seems pretty clear to me that the companies like ABX, GG, NEM will be the big beneficiaries of the printing presses. However, why isn't FCX participating today? What do people think of a junior player like NAK?

Jock - Absolutely! Trading a few ETF's simplifies the process. I recognized this some time ago.

Luggie - CEE:CA 880.811 million shares o/s.....

the RSI screener appears to have incorrect values. Double check anything b4 putting in orders.

FWIW.

The Prez speaking is like AJ Cohen. Someone cooked up an indicator based on her CNBC appearances. If u shorted SPX when she came on, 30 days later or something like that, you had a nice profit.

NAK has three disadvantages: large copper component to reserves, Alaskan environmentalists and American regulations, and huge investment and engineering feats required to bring to production. That being said several top-tier miners have bought large stakes in it, so the potential seems to be there. This one, although a large company, is more of a junior with the need for financing and the obstacles it must overcome.

I would actually look at Nautilus Minerals, as they want to be in production in two years, have huge finds, and have three top mining companies as investors. Problem is they need to bring up the rich ore from the bottom of the ocean. They also have a large base metal component though.

There is something I need to get off my chest and perhaps some input from others will help. This community has been tirelessly declaring for years the fact the shareholders ( we the people ) have been kicked to the curb by Wall St & HB&B and only until the voting shareholder re-takes control of banks and brokers ( and other corporations ) will there be changes in the way business is now being done i.e. today it is for the betterment of the few at the expense of the many.
Now the big lift seems to be coming from the fact that governments are injecting $Trillions directly into HB&B equity but they are getting PREFERRED shares that do not come with a vote! Why is it OK that in normal markets we the people can stand by and see our common equity and voting power diluted when financings occur but not now when it is the taxpayer's money. Shouldn't today's holders of HB&B common shares ( we know who they are now that they have swept the street and shaken the trees ) be subject to dilution of the value of their shares and dilution of their voting power now that the taxpayer is footing the bills and providing liquidity? IMO, little has changed other than it is more transparent than ever that HB&B is in control of the treasuries of the industrialized world and we the people are far from seeing a turnaround, far from re-regulation, and far from seeing confidence restored in capital markets. As I see it, unless you are a day-trading gamer it is not yet the time to participate in going long.

Just a thought....
I am not sure that inflation will be a major problem going forward...
My thinking is that the trillions they are injecting are just replacing the trillions that have been lost. There for you end up with the same amount of cash.
I know that is probably an oversimplification but does make some sense to me. Correct me if I'm wrong
Posted by: krishnamurtidude [TypeKey Profile Page] at October 14, 2008 11:33 AM [link]

Go to the Carribean and look at the yachts registered in Cayman Island, Bahamas etc. There's your lost money.

JB/Vorlon- assuming the distinction between a secular bull and a cyclical bull is not just academic, how would your trading strategies differ in the two scenarios?

IMO, the only ones who should be sitting out this dance are highly risk-averse and/or with a ST need for cash...the DJIA is already up 18% from friday's low-> can't be that many investors content to watch a 20-30-40+% move over the next few months from base camp through a telescope (and it's always easier to gauge your next move when actively engaged as a climber, as opposed to being an observer)...at what point does it matter how the bull is defined? 6 months? 3 years? what if we grind higher for the next 8 years? 20%? 60%? 100%? 300%? if we climb 100% in 6 months, then i will be taking profits and looking for the next move...if it returns 300% in the next 10 years, many of us will be retired with a high percentage of our portfolios in fixed-income securities...if the market remains range-bound, some of us will still earn 300% over 10 years trading the swings...i really think secular bulls are defined after the fact, and of course, at that point it's of little help..

Hi R.S. - Thanks for the reminder. CEE still seems like a decent project with reasonable grades,oz/mrkt cap ratios, with upside via the government partnership and ongoing work on large holdings

As we learned from the "money as dept" movie, most money is credit. These is a massive credit destruction up to now, thus net money destruction and deflation that we saw in the last 3 months. Now, the governments are trying to catch up. There is some success as the TED spread is easing some today, we also see that in the stock action. Time will tell if they overshoot with liquidity (usually they do). Another unknown is what asset type the liquidity goes to. What if it is not gold or energy (like last time)? I hope it is though.

RE Physical Gold and Silver, and Bull Hunters post.

I have been watching E-Bay Silver Eagle Rolls and they are selling for around $19/coin, reflecting a silver price of about 18 and change/oz. There is a huge difference between the spot price/oz. and the street price/oz. Bottom line is that no one with physical silver is selling it at the spot price.

teamonfuego:
Here is a link to a Bill Fleckenstein article that might answer your question. However, I see where moab (as usual) has answered it in almost an identical fashion. Those gold miners that produce the most gold, and the least copper and other by-products, will do best as gold rises.
http://tinyurl.com/3zalv2

Trillions haven't been 'lost', they have been transferred from losing parties to winning parties. Creating more money (or debt) to replace some of the amount whose transfer results in insolvency to the losing party makes sure there are no losers, is most certainly uneconomic, and can be inflationary. More money chases the same amount of goods and services, causing higher prices in aggregate. We have had asset inflation and commodity deflation from 1980 - 2000 and may get the opposite for the next 20 years.

And there is only around $900 billion in cash. The rest is credit. These trillions being pledged extends more credit on the back of an economy that takes more than a dollar of debt to create a dollar of US GDP. The EU is pledging 'unlimited funds' in this bailout! Does money grow on trees?

This credit will not spur the economy without the huge reforms Bill is calling for as it is wasted on an inefficient economy.

[Bill Cara note:

Part of the "loss" is actually in the form of unallocated assets like cash and (physical) gold, and in position shorts, and Treasuries. At some point all of these will be sources of new funds that will be allocated to equities, pushing the price levels much higher. Where the equity market stands today is a matter of trader confidence and ability to obtain credit. Just like home-buyer confidence and lack of credit affects the bids on houses today, but not so much tomorrow, the equity market will return. But, just like you would for empty houses today, you only want to bid on the stocks of quality companies in order to assure your participation in higher prices when they return.]

TerryC- i actually think buying stakes in banks is a positive move, one that would not have occurred if not for the outrage expressed by tax payers over the initial bail out plan...it takes power to fight powerful interests, and the House vote at least gave the people the experience of success, as incomplete as it was...people and organizations become more sophisticated and informed over time...

October 14, 2008

Ron Paul on Socialism, Inflationism, and the Death of the Dollar

http://tinyurl.com/4uvhzh

Re: ..."no one with physical silver is selling it at the spot price."

Much closer to spot than is E-Bay, Gold-Money seems to be maintaining its usual spread of ~5%.

http://tinyurl.com/3njc2q

Anyone notice the word spinning going on? Most have heard by now that the "bailout" was really a "rescue", but this moring I almost fell out of my chair when I heard a reporter on Bloomberg, instead of saying that Paulson met with the 9 "beggar" banks, what he actually said was that Paulson met with 9 banking "Giants"..

Nice fellow, that Paulson, giving all that money away and not even a frown over past behaviors - what a guy.

A strange phychological outlook leads to success.....

I do better at this when I think of myself as an OBSERVER of the market who HAPPENS to occasionally take a position than I do when I turn into "Joe Trader", buying and selling very actively. Reasons are obvious to me, but it comes down to just being more selective about taking trades.

MFN - Nice move on this one today heading into production in 4th qtr with ~7 mm (au/ag equiv. ounces.

Gold bugs, silver crazies, Capstone kookies???

It's up on volume the last 10 minutes.

RDR - If copper is a byproduct of gold and gold is what we should be focusing on, then the question is:

how much gold vs copper does FCX and NAK have versus, say, ABX and GG. the latter are up while the former are down. Is this what the market is saying to us? that is, that FCX/NAK have more copper?

PEP buy limit 53.06.

Capitulated on Friday. Hourly MACD not diverging yet.

FCX and NAK have primarily copper deposits (billions of pounds) with gold as a byproduct. ABX and GG have deposits with gold as the primary product and base metals as a byproduct, as you can see here:

http://www.goldcorp.com/investors/reserves_resources/

Only three of their mines have base metal byproducts.

teamonfuego:
That's what I would infer. There are others here (perhaps Jock?) who are more attuned to the product output of individual companies. Unfortunately, Mr. Fleckenstein tossed us an idea (probably a good one) but wants us to do our own work. He has likely done the work for his own paid clientele.

Moab with the answer. Thanks again!

why is ABX so much cheaper than GG relative to earnings?

MaxPain, from my source, has KBE (Bank Index ETF)'s maxPain value at 31.00 - 31.99. Last Friday, KBE has a low less than 23. Guess what it hit today?

Try 31.42.

Same old, same old. Watch out now for "Turn 'round Tuesday". jmho and not contrary to Bill - just a shorter time frame of bewareness.

GG has much better growth prospects than ABX. If you go to their web site and look at the investor report, you'll see they are planning on doubling production over the next few years.

Question:????

On Oct 10,2008 (cara commentary and community chat) bill gave a BUY ALERT on 80 stocks...ADDENDUM 3:45PM by BILL WILLAIN a colleague of bill's ...there was a link to these 80 stocks which I could not open..(don't know if I was the only one unable to open it???)...

Anyone care to supply a good link to the 80 stocks

Thanks
SV

NAK & FCX are both mega deposits not hardly ever seen in nature: FCX will have lower country risk in Indonesia and its in production, versus NAK which is not near production yet and with a higher country risk under an administration beholding to the enviornmental movement.

SV Bills list of 80

Its an excel spreadsheet, you have to save it and then open it with MS excel.

Quasi

Thanks Quasi

SV

Prices of good companies are coming back to us right now...

Look at all the presents being placed under the voter’s xmas tree by those two presidential candidates. The tree on the right has a few…….but the tree on the left…....wow, what a merry day it will be! And Tax free 401k withdrawals as a stocking stuffer!

BP
Pavlov's dog: up day-profits, down-day, buy.

Also, earnings are coming in and not too good, which may put a damper on things.

Decided to sell at $4 the 1000 shares of SWC I purchased yesterday at $3.5 and at $5.8 the 500 shares of SLW I purchased yesterday at $5.2. The market seems to be going down for now, and even though I think it will end up green, I don't want to be stuck with more positions on margin.

good buying opportunity or breakdown? depends on which glasses you are wearing i guess

changing PEP order to 52.85 limit and increasing size.

do ur own homework.

Given the price of NAK relative to it's deposits, even in an environment where copper is not as valuable as gold, I think it's a pretty good high risk investment.

But I'm not sure I know enough about this business to be bullish. I do like the idea of gold as a bet on inflation coming down the pike, though.

If we don't have a follow through from yesterday, does that negate the confirmation of the beginning of a new bull market or can we just assume profit taking? TIA

cancelling PEP order.

I think there'll be a better entry in the AM.

Tax free 401-k withdrawl is a terrible idea. It will cause mass selling, and secondly the rules are what they are. Shall we also revoke gravity, physics and plate tectonics?

NAK is very cheap but very high risk. Rio Tinto bought it's stake nearly 20% stake at $10 per share.

Capstone kookie's - I love it!

From Barron's 10/14/08:

"Gold, the feel-good asset in times of economic duress, is attracting buyers.

Some investors are even selling at-the-money puts against gold stocks, according to Susquehanna Financial Group. This trading occurred Monday as gold prices declined. Put selling is considered the ultimate bullish expression because it obligates investors to buy stock should its price fall below the strike price. This trading is occurring in Barrick Gold (ticker: ABX), Goldcorp (GG) and Newmont Mining (NEM)."

http://tinyurl.com/4zeh6q

shark - mass selling - isn't that what HB&B wants? Perhaps we should sell prior to this next 401k selling wave? Ugh!

Any of the techinicians care to call a close here? Couldn't blame anyone for keeping quiet! Pretty poor action in growth tech stocks today.

Since the last hour defines the market it will be interesting to see if we recover or end up with a very ugly follow-up to yesterday.

abx may rally by days end? it looks like the 5 min macd is about to cross, but I can hardly believe the miners are not liking 840 gold on a 10 $ up day.

http://tinyurl.com/3wzoog

If we turn up from here, SPX Hourly is tracing out an inversed H-S pattern from last Wednesday.

Dave... I am no technician in a strict sense of the word, but guts say up.

Overall, everything is within accumulatin scenario.

So, if tax free 401K withdrawals are allowed.........sign me up for the class action lawsuits for those who have already payed taxes using a Roth IRA. Or would they just run the presses over time and return all my taxes?

Remember that CareerBuilder commercial where the guy is in his cubicle while chimps are running around throwing papers in the air.......sometimes (okay more than just sometimes) I feel that is what it is like living in the U.S......

Took some RIMM 60.40, stop about 10-15 cents under the day low, target about 62 or day end, whichever comes first

allowing tax payers up to $10k in withdrawls from 401k tax free is a much better solution than the $1 trillion bail out to a few corrupt banks.

http://tinyurl.com/4zw2ef

half out RIMM 61.15

Trailed RIMM stop for the balance to 60.25

Just bought 300 shares of USD at 21.05 -- looks like greed is kicking in for the market...

Came across a T Rowe Price Market Month report from June 2000. Interesting how high-flying (and volatile) some of these "Highly Regarded Semiconductor Stocks" were. Any tech investors out there that still follow these? Also interested in knowing whatever happened to Storage Technology (STK)?

ADI - 68
DSPG - 50
LSI - 53
MXIM - 62
MCHP - 59
TSM - 40
XLNX - 68

Chicagomark - "the new-found wealth will translate into more tourists coming here to relax and decompress from the action of the capital markets."

I took this to mean a few of those who were able to capitalize on the folly.

Closed RIMM balance. +.75 and -.15. Rveresed about 30 cents under my target for the second half

2nd,

In response to your 1PM post today,

In my opinion the recent volatility in the markets is what makes this secular bull/bear call so important. I don't think that only highly risk-averse investors should stay in cash because I think that this is a secular bear. These markets are only tradeable for a very small segment of our society, most will just get burned trying to time things (especially if they are blindly following Bill - not that I think Bill espouses this).

Bill's right that Roubini is a macroeconomist, not a trader. Academic economists are generally horrible traders, but someone like Barry Ritholtz (at the big picture: http://bigpicture.typepad.com/) seems like he's balancing the macro view of things with market timing. I'd love to hear Bill and Barry discuss their market views over the coming months.

I'm rambling a bit, but if we are in a secular bear, then we've still got a ways to go on the downside (I'm not trying to make a prediction here, but who's to say that the next plunge down won't take us to 5000 on the DOW? - You'd have been hard pressed to find anyone predicting DOW 8529 just a couple of weeks ago). Where you get in obviously has a pretty big impact on your gains when you are a long term buyer.

JB

JB/Vorlon- assuming the distinction between a secular bull and a cyclical bull is not just academic, how would your trading strategies differ in the two scenarios?

IMO, the only ones who should be sitting out this dance are highly risk-averse and/or with a ST need for cash...the DJIA is already up 18% from friday's low-> can't be that many investors content to watch a 20-30-40+% move over the next few months from base camp through a telescope (and it's always easier to gauge your next move when actively engaged as a climber, as opposed to being an observer)...at what point does it matter how the bull is defined? 6 months? 3 years? what if we grind higher for the next 8 years? 20%? 60%? 100%? 300%? if we climb 100% in 6 months, then i will be taking profits and looking for the next move...if it returns 300% in the next 10 years, many of us will be retired with a high percentage of our portfolios in fixed-income securities...if the market remains range-bound, some of us will still earn 300% over 10 years trading the swings...i really think secular bulls are defined after the fact, and of course, at that point it's of little help..

MFN (Minefinders) is reported to conduct their first pour this month, per GSA on Oct 7th per CEO. There are only 50m shares outstanding so it does not take much buying or selling to send the price flying.

Tennessee - "Retail broker just called me recommending ACI, MEE, MRO, FCX, OI, CAT, CMI, MIC, TXT, LNC, MET, PFG, XRX

And, no, he did not call Friday morning..."

Looks like there was a leading signal we could've used for today's early trade, let's see if it stands up through the close...

Tax free 401K withdrawals.......

Its a shame that this election is essentially coming down to which candidate will promise the most handouts, kick-downs, and welfare.......

Tax the responsible, they're outnumbered!

BillySundance,

I think its a penalty-free withdrawal on the IRA - not exactly a handout (at least not if you compare it to the 700B that the banks are getting).

The $HUI:$SPX ratio chart (monthly) is giving me some solace now as there is a very clear trend and we are back on clear trendline support.

Brown-Cal

As I understand it "Penalty Free" means that the withdrawal is not subject to tax penalties.

The penalties would otherwise become part of the federal tax revenue, right?

Correct me if I am worng, but what this means to me is that everyone who would not get to take advantage of this "Penalty free" withdrawal can have a little bit more national debt without receiving any of the benefit.....

This is just another stimulus check in disguise.

If anyone needs 10K from their 401K, they should pay the penalty IMO.....just print me up a stimulus check and send it directly to me instead of trying to dress it up as a creative solution that actually screws the responsible.....

re:INTC

Interesting. Looks like a bearish engulfing pattern.

long QID

Rather than tax-free 401k withdrawals which discourages savers and equities investors, why not temporarily repeal capital gains taxes for traders (not just a select few)? This would encourage buying of equities, saving, and wealth building.

What we need are policies which reflect and encourage responsibility as opposed to recklessly spending our way to prosperity.

Sheesh, what next? That monkey image is gaining traction...

BSI....

INTC earnings out today

nibbling on rimm here at the close. it was a par day despite some profit taking

Chickenpookie,
I noticed that too, looking at NASDAQ in particular, seems the market lost much of it's steam right after he called. Now you know why I read this blog with great interest -- I just don't get good advice from the "sell side".

re:INTC

yeah, I think I heard INTC ER was after the close.

I thought I'd stay long QID for that.

(Crain’s) — Northern Trust Corp. lost out to Bank of New York Mellon Corp. in bidding to run the federal government’s $700-billion financial bailout effort.

INTC moving up

TF - We now know the advice was excellent in a contrary sense. I received two similar calls (both of which went unanswered) from BAC just prior to DOW falling a week ago.

INTC moving up AH.......

BillySundance,

We agree - '(tax) penalty free'

INTC - The evil empire's death-star shines bright into the evening sky! Obie-wan Kenobi, where are you? Well, any "good" news is welcome news at this point, I suppose.

INTC - looks like a 1 cent beat on EPS, and Q4 revenues that are within (but to the lower end of) guidance. Still, it's the reaction that counts, and it's close to 4% up.

Posted by: David at October 14, 2008 2:16 PM

" ...I don't want to be stuck with more positions on margin."

This is no time to be on margin of any kind, IMO.

DNA - up 4% AH

good news on intc. hope aapl does well too. we need the shares to all rise even on news of cut backs. cut backs were already in the markets. now they can spin it higher saying cutbacks arent as bad as they thought and q4/2009 guidance also wasnt as bad as they thought.

About Dell

I have a long position in Dell. I’ve noticed that in AH only small investors are buying, but some big guys are keep selling. This is pretty evident even today (about 400,000 shares sold down AH), but the big ones came in the last week when someone sold 2 million shares a pop.

Did anyone have experience with this kind of activity before? This happens almost all the time when Dell was down big during normal hours. I am not sure if this is something to worry about.

Good news on INTC indeed! It is up 6.78% after hours. So hopefully USD (which has 35% in INTC) I purchased today at $21.05 will hit my sell limit of $23.90 tomorrow.

Babybear - I'm by no means an experienced trader but I've often watched stocks I own seem to do strange things in AH, like trade in large blocks at values like 90 cents below the closing price, sometimes above.

It never seems to affect what happens the next day, unless the movements are on earnings, so I just ignore those after hours movements for the most part. In fact some trades that I've seen appear very costly to the buyer or seller when viewed in the context of the price movements when the markets reopen.

I think most of the smart money is active during normal trading hours and that's where I try to take my cue.

Teamonfuego,

"why is ABX so much cheaper than GG relative to earnings?"

It's the "Munk Effect"!

ALOHA !!

I will be in the ASX today buying up beaten down commodity stocks I have been following since 12/07 and averaging down on companies I already own who keep putting out improved reserves and production and profit! To each his own ... Besides how I can ignore the ASX discount on the USD?

Look at it this way ... Australia is a giant commodity and gold deposit and that backs the AUD, while the USD is backed by trillion $$$ bank bailouts and failed US government Foreign Policy with entitlements that exceed the entire World's GDP! Derivatives packed and DEBT ridden and political corruption that makes Third World dictators envious!

So I ask ... What will be more likely in the end the USDX up or the AUD up? If the AUD even matches where it was before the faux USDX rally then that is a 30%+ return just by itself, nevermind what AUD denominated stocks will do when they rise along with the AUD ...

The Panic of 1907

...which i'm in the midst of reading->

"The financial crisis that embraced the panic and crash of 1907 lasted 15 months, from the stock market's peak in September 1906 to its trough in November 1907. During that time, the value of all listed stocks in the United States declined 37 percent, making it among the most damaging financial crashes of the nineteenth and twentieth centuries. The sharpest part of this massive market downturn coincided with the banking panic in October and November 1907, resulting in the failure of at least 25 banks and 17 trust companies."

"In January 1908, banks finally lifed their suspension of payments. The subsequent recession in June 1908, followed by buoyant economic growth in the United States for the next 18 months. By late 1909, the stock market and industrial production recovered to prepanic levels, and the economic cycle peaked in January 1910, though it slumped again until 1912."

History never repeats exactly...

"The subsequent recession ENDED in June 1908.."

Vadym October 14, 2008 11:32 AM

Love that post:-
[
101 - walking away while hands are itching
102 - buying when puking
201 - selling when laughing
202 - stopping out while shrugging
301 - looking absent and indifferent while walking to the bank
]

If only we could all just do that...

LOL...i was able to get credit for 301 by passing the optional audition...

How Safe Are Your ETFs?

http://tinyurl.com/3l9kxw

Re: RIMM
mumblings that msft was looking at possibly buying a $28B blackerry.

source link: http://tinyurl.com/4zzo4h

Not really sure if this is true or not.

Does anyone know how long it should take until we realize a higher high to confirm the bull or a lower low to negate it?

Terry - I know that's supposed to be funny, but I'm a little dull...what's the "Monk" effect?

[Bill cara note:

Peter Munk is the founder and now billionaire chairman of Barrick. Some people (probably TerryC) don't care for him. He is a businessman first so when he hedged the company's gold, there was an outcry from the goldbugs, but the money Barrick received allowed the company to be able to take over a few large companies that were dead from the ankles up. Peter is shrewd. I think he should be respected. There are many though that believe he is a shill for the Fed, which may or may not be true.]

Yo Beard!

Tell Magoo to stop wasting good trout.

dow futures down 122, s&p down 16.....why? I bot back some SKF this afternoon....looking for a retest of the lows...financials have moved up too quick.

Ely Lilly bought ImClone

[Bill Cara note:

Grace Cheng converted her website today to DailyMarkets.com. She has done a terrific job. If you want to see my articles, go to the search window and insert Bill Cara.]

I've spent the last hour in a futile search of this site looking for a post I made some time back. It was regarding Bill's advice that we should watch the Canadian Venture Exchange closely for the smart money movements. I KNOW I posted a list of juniors that had a strong up-day on high volume (on some particluar day that seemed important ) but, for the life of me I can't find the post. I even said I had no idea what any of the companies did but wondered if someone else on the site had some insights, and I bookmarked the 5 of them. Anyway, perhaps some of you noticed the prominent "morningstar" on the $CDNX today. And here is how those 5 performed today:

MKR.V +66.67%
CBE.V +20%
TVC.V +22.5%
JNN.V +30.77%
PCM.V +50%

As back when I posted, I have no positions in them and have absolutely no idea what any of them does because I have way too many other research projects on the go.

[Bill Cara note:

The new site, which is being tested now and will go live after Jeff is back from Asia at the end of the month, will make it easy to do these searches.]

That'll be great Bill. Anyway I posted those not as recommendations, but as more of a question: Is the Venture Exchange getting ready to participate in this Bull?

is it me or is Melissa Francis looking hotter than usual this evening? good googily moogily.

Madeline Gerwick, noted economist, business coach and astrologer observes:

"The truth is that the bottom will be whatever we create collectively with our fear. If you want the markets to stabilize, you need to release your fear and hold energy for the markets to stabilize. As you release your fear, energetically this gets added to the collective consciousness and then others can release their fear too. As more people release their fears, the markets will stabilize. The sooner we do this, the sooner it will happen. Everything gets created at the energetic level first, including the stock market.

It's likely that we will see the stock markets stabilze from October 26th through November 23rd, when Jupiter sextiles Uranus while it trines Saturn. But a lot can happen in the meantime."

lol

I heard the FSN interview of Don Coxe, and there was mention of the hedge funds forced asset-sales due to redemptions.

If I recall correctly, the redemption date is either 15 Oct (this month) or 15 Nov (next month). Read somewhere else that hedge funds can delay the redemptions to end of the year.

Appreciate if someone can throw light on the actual hedge fund redemption date.

Once pass this date, the relentless selling pressure should subside. Tks.

The mind is a powerful fource, Mac...if only we could harness it!

A very sharp knife, and a rabid animal must also be respected for what they are, not because respect has been earned by the subject, but due to the circumstances of the situation. Consider it one of my faults, but if it looks,walks,talks like a duck then I call it a duck. I don't have enough information to make any kind of positive recommendation, nor do I know the Peter Monk story, and haven't watched the following u-tube video because it takes an eternity to download these things...

http://www.youtube.com/watch?v=_8rBNxnh4HM

Nothing ventured, nothing gained/lost? Word of mouth is always a very powerful tool in my decision making process...

Thanks Dave

Barrick's hedging is indeed very shrewd.

Last time I looked they had bought back their corporate hedge book, and had 9.5 million oz sold in the mid $300's as project hedges, which if I recall correctly didn't require them to actually deliver gold until those individual projects were producing. The secondary advantage of this was that the hedging loss would just get rolled into those project costs and amortized off against production at that time instead of hitting the p/l quarterly, now.

Bob Hoye's Signs of the Times

http://www.safehaven.com/article-11571.htm

Our Monday's ChartWorks outlined what is needed to complete this phase of forced liquidation. If this is a down week for the Dow, or S&P, a Downside Capitulation would register on our proprietary model. On the weekly reading this is rare and, obviously, important. However, it's worth noting that if it comes in it is registering a condition that can end this decline.

In past examples it can take a week or so to begin the rebound, which will likely be a tradable rally in a cyclical bear market. Typically at major lows there will be thousands of individual stocks registering Capitulations and this is not happening yet.

In May we concluded that the seasonal turn to widening credit spreads would lead to "severe conditions" by September-October, and this has been the case. The same has happened to commodities, which should bury Wall Street's claim that commodities was an asset class that moved contrary to the main trends in equities. Another part of modern portfolio theory based upon a short attention span of those dreaming up the theories.

As the saying in physics goes: "If you keep your data base short enough it will fit your theory." For hundreds of years, prices of stocks, doubtful debt and commodities have gone up and down together.

Once this liquidity crisis exhausts - stocks, corporate bonds and commodity prices should rally together.

Our work a few months ago suggested that the decline could climax by late October. Monday's ChartWorks suggests that if the "Capitulation" is registered on Friday then the bottom could be accomplished in the latter part of October.

In January we looked to the patterns in the 1973 and 1937 bears. As the year developed, the common items to both called that upon the hard break in May the decline from the October top would be around 25%, which was the case. The overall decline could amount to 49%, but need not be limited to that.

BTW, with Barrick, the number of oz of reserves is proof to the pudding that their strategy succeeded. If gold ever goes way high, they have a huge percentage of world reserves.

So many people projecting the bottom makes me think it may have happened. The magic of the market is that it never gives the exact same look twice, kind of like how Willie Nelson never plays a song the same way twice.

i am starting to believe we will be in a trading range for a bit. Worried about nasdaq. Worried about earnings. Worried about worsening employment, retail, both presidential candidates, etc.

I am printing Bill's note the other day about largest gains from 1932-1938.

[For a good trader this may be a very profitable Q4. unfortunately i am not that good yet.

S&P500 records:
June 1, 1932 to Sept 7, 1932: 4.40 to 9.31 (gain of +111.6%)
Feb 27, 1933 to July 19, 1933: 5.53 to 12.20 (gain of +120.6%)
Oct 19, 1933 to Feb 4, 1934: 8.61 to 11.82 (gain of +37.3%)
Mar 14, 1935 to Mar 5, 1937: 8.06 to 18.68 (gain of +131.8%)
Mar 31, 1938 to Nov 14, 1938: 8.50 to 13.78 (gain of +62.1%)]

Krishna, you have it right. Leveraging means taking out loans which, in a fractional reserve system, means banks creating money out of thin air. Deleveraging means paying back loans, which means the money disappears back into thin air.

The global money supply (in terms of M3) is $60+ trillion. Vaporising a few percent of that will offset the sovereign debt that will pay for the government interventions, only a part of which will be monetised. Which means that inflation will not be a problem until after the deleveraging has run its course over the next couple of years.

I have noticed the yield of 10 year bond has been up in 6 consecutive days (actually flat on October 13,market up 936 points that day),despite that FED cut rate by 0.5 on Oct 8.
Any thoughts about what that move suggests?
High inflation anticipation? Money flew from bonds to equities for the bargain? Oversea investors leaving US assets?
Thanks for your comments.

Martin Pring outlined in July 4 key reasons for a new bull market.

http://www.pring.com/pdfs/ptgletter.pdf

I find the decline in oil prices and large holdings in cash the most compelling reasons.

Mythiot - My neighbor took out a loan to build a new house two years ago. Last month, the house was abandoned and is now in foreclosure.

Please explain to me how money coming from thin air fits into this picture. I figure there was at least $350k of hard cash spent on land, building materials, and labor.

ALOHA !!

Well, I posted last week that payroll taxes for US corporations have dropped off a cliff, down 75% from 2007. What does that mean ... a lot less employees means less profits for US corporations which has a double whammy of even less tax revenues for the US government to fund the interest payment on the National debt, so more printing will have to be done to compensate for the tax revenue deficit of approx $600bil. Another $600bil please-e-e-e!!!

Then there is this effect when payroll taxes drop off a cliff!

READ ON:
Despite Big Rally, Grim Outlook on Profits and Jobs

Article Tools Sponsored By
By VIKAS BAJAJ
Published: October 14, 2008

The euphoria that swept Wall Street on Monday gave way to a sober reality on Tuesday: a recession, perhaps the deepest one in decades, may be unavoidable.

A day after the stock market staged one of its biggest rallies in history, buoyed by the government’s plan to rescue banks, investors retreated once again. Worries about the economy came to the fore. Many people fear that corporations — and by extension their workers and shareholders — will face harder times in the months ahead.

“Everything the government has done is not going to prevent further deterioration in the economy,” said Stuart Hoffman, chief economist at PNC Bank. “At the end of all this, what matters is what the economy does.”

The flow of credit, which has been choked for weeks, began to trickle through the financial system on Tuesday. But the credit markets remained shut to many companies and municipalities. Home mortgage rates, which some had hoped might decline once the government’s plans became clear, rose instead. The fear is that the financial rescue will add to an already-swelling federal budget deficit and force the Treasury to borrow heavily in the capital markets.

Beaten-down financial shares soared, but shares of many big blue-chip corporations sank as the outlook for profits and employment darkened. PepsiCo, the soft drink maker, said it would cut 3,300 jobs and close six plants.(more)

If PEPSI is shutting down plants then Buffet may want his $5bil back from Goldman Sachs!

Someone please inform me of any US corporations reporting any hiring over the past three years? I scan for such news and I never see it, except for the US government hiring for TSA and lets not forget Blackwater was hiring ... Then I read US military recruitment is up. In hard times that is typical, but the WAR ON TERROR is expanding not shrinking so going into the military to make ends meet is not the best of choices, but for some it may be the only choice other than crime or welfare.

Never fear though since the massive inflation heading our way will rally the DOW just like it has done for 100 years! Just make sure you are netting at least a 15% annual return on your trading(netting means after commissions and taxes). I am thinking that you need net profits of 15% or better to just keep your head above water, nevermind a penthouse at the Atlantis! Your other alternative is to downsize your lifestyle. I believe 95% of Americans will opt for the downsizing, but they will only do so kicking and screaming all the way!

ALL OUR BEST THINKING GOT US HERE ...

Vorlon - Cash on sidelines and decline in energy prices are major factors for start of new bull, but we also need to consider the massive debt in unpaid upside down mortgages and failing financial institutions. We're in a bottoming process that's likely to end once banks begin lending to one another, while consumer confidence and housing market crisis will take time to work out during the Bull.

ALOHA !!

Bill ... I have to disagree about ABX and Monk. After what I saw JP MORGAN and BARRICK GOLD do in the Blanchard Coin lawsuit I have no desire to put my money into a company that mines profits tag teaming with JP MORGAN. BARRICK gets sweetheart deals not available to miners that actual mine profits out of the ground instead of out of the COMEX.

Then look at the current and past board members and I have to say any company that has Bush Sr on the board is not following so much a business model as it is a political model!

Too much fraud potential for my taste ...

If you cannot follow this then Google the Blanchard Coin lawsuit. I have posted about this here before, at least a year ago.

Of course that does not mean you can't trade the ABX price and not the MONK!!

kaimu - are there any estimates on total real estate assets in the US? I figure home prices will continue falling during the real estate bottoming process, possibly for an average decline say, of 20~25% as a SWAG. What I don't know is how many trillions this translates to, because
I don't know the total value of US real estate.

Wonder when the commercial properties default wave begins to take form...

ALOHA !!

CP - Off hand, without spending some time to research it, go with $12tril last I heard! I mean if FRE and FNM are half US mortgages at $6tril then times two! I honestly do not keep track of such numbers and I seriously doubt any of the FNM/FRE experts even care!!! They're all too busy shuffling paper!

ALOHA !!

Finally MISH and I agree on something ...

I could not have said it better!!! ORWELLIAN indeed! I have been banking on US and global governments and central banks to ruin economies and currencies all along!! They certainly have never disappointed in the past and what has their main course of action always been? INNFLATE OR DIE!! I believe "Inflate Or Die" should be the new motto printed on FRNs instead of "In God We Trust"! What GOD would trust these idiots?

It'll end in a deflationary collapse but not before we get monumental government and central bank monetary hysteria!

READ ON:
Brave New World To "Preserve" Free Markets

In what may be the most Orwellian comment in history, President Bush just stated: "Bank buyout needed to preserve free market".

"The US Government is to spend up to $250 billion buying direct stakes in banks and other financial institutions under a controversial emergency plan which President Bush insisted today was "not intended to take over the free market but to preserve it".

It's A Brave New World

Professor Jeffrey Cooper made an interesting comment on Minyanville today.

Treasury Secretary Hank Paulson Jr. told nine leading bankers they would have to accept government investment for the good of the U.S. financial system.

It's a brave new world.

I'm also waiting for word as to when the implanting of chips in newborns is done 'for the good of the country'.

What hath they wrought?

One Does Not Take Over Free Markets To Save Them

President Bush just proven without a doubt he does not understand free markets. Of course he has long since proven he does not understand anything else either.

One does not take over free markets to save them. It was and still is government intervention in the first place that is destroying the free markets. The root cause of the mess we are in is fractional reserve lending, an unsound currency, and interest rate micro-mismanagement by the Fed.

In a free market, there would not be a Fed, nor would there be fractional reserve lending, nor would there be unsound currencies. And instead of attacking the root cause of the mess, Bush, Paulson, Bernanke, and others are responding with measures that lead one further down the path of fascism, supposedly to "preserve the system".

Also sad is the fact that highly respected economic professors like Krugman and Roubini openly cheer such nonsense. There is very little if anything in these bailout measures that is worth cheering over. Indeed, there may not be anything left worth preserving if we continue down this foolish path we are on for too much longer.

The actions taken by Central Bankers to "preserve the system" are tantamount to cutting off one's head so that it won't get any more blemishes.END

END ALL OUR MISERY AND ABANDON THE US FED!!!

I honestly can't believe people are fooled by these criminals! Business owners ... just imagine the worst employee you have ever had and times that by 10,000 ... would you keep him on or fire him? Well US Voters not only keep the US FED on the job but we award them medals! HA!!

Why do we Americans keep putting up with this abuse? We could end this whole charade in one day if we had the cajones the Russian people had when they ended Communist rule!

ONE TANK ... ONE HOLE ... ONE AMERICA !!!

Hey ... I'm just telling you what the Russians did. I still recall those images on TV! Pretty powerful ... I applaud the Chinese for their Tienanmen Square protest! That also was a very powerful image and I am sure it must have shaken the Chinese Communist leadership, especially after they watched their comrades in Russia crumble under the weight of angry mobs!

OBAMA or McCAIN? It's laughable ...

Trichet Urges Return to `Discipline' of Bretton Woods

http://www.bloomberg.com/apps/news?pid=20601087&sid=aq2lp4hW487g&refer=home

Oct. 15 (Bloomberg) - European Central Bank President Jean- Claude Trichet said officials reshaping the world's financial system should try to return to the ``discipline'' that governed markets in the decades after World War II.

``Perhaps what we need is to go back to the first Bretton Woods, to go back to discipline,'' Trichet said after giving a speech at the Economic Club of New York yesterday. ``It's absolutely clear that financial markets need discipline: macroeconomic discipline, monetary discipline, market discipline.''

Some European policy makers are pushing to tighten oversight of markets after the past year's credit squeeze culminated last week in the biggest stock sell-off since 1933. British Prime Minister Gordon Brown has suggested the most sweeping rethink of global financial architecture since U.S. and European officials met in Bretton Woods, New Hampshire, in 1944. The rules they drew up there governed much of the world economy for the following 30 years.

He indicated that recent market turmoil was partly a consequence of the deregulation that occurred after Bretton Woods' demise. That was triggered in 1971, when inflation forced the U.S. to abandon the dollar's peg to gold, an anchor of the system, heralding the era of floating exchange rates.

``The explosion of the first Bretton Woods in a way could be interpreted as a rejection of discipline,'' said Trichet.

I just told my Latvian wife that we will all soon be living "back in the USSR", with 5 year state decreed plans for everything & guvm'nt allocation of all resourses. She just sighed . . .

Here is a very good (free) piece at Stratfor in their "Geopolitical Weekly" series about what is at stake at that level:

States, Economies and Markets: Redefining the Rules
http://tinyurl.com/3fycv7

" . . .
Yet the Europeans and the Americans both had to intervene in some way, and now they face exactly the same problem: having decided to make the pig fly, there remains the small matter of how to build a flying pig. The problem is administrative. It is all very well to say that the government will buy paper or stock in companies, or that it will guarantee loans between banks. The problem is that no institutions exist to do this. There are no offices filled with officials empowered to do any of these things, no rules on how these things are to be done, no bank accounts on which to draw — not even a decision on who has to sign the checks. The faster they try to set up these institutions, the more inefficient, error-prone and even corrupt they will turn out to be. We can assure you that some bright lads are already thinking dreamily of ways to scam the system, and the faster it is set up, the fewer controls there will be.

But even if all of that is thrown aside, and it is determined that failure, error and corruption are an acceptable price to pay to avoid economic crisis, it will still take weeks to set up either plan (with the possible exception of the Fed’s announcement to jump into the interbank market directly). Some symbolic transactions can take place within days — and they will undoubtedly be important. But the infrastructure for processing tens of thousands of transactions simply takes time to build.

This, of course, is known to the eurozone finance ministers. Indeed, the Europeans will hold an EU-wide summit on the topic this week, while the Americans are going to be working very hard to clarify their own processes in the next few days. The financial institutions will need to have guarantees to start lending — or some sort of retroactive guarantee — but the bet is that the stock markets will stop falling long enough to give the finance ministries time to get organized. It might work.

. . . "

Ahola Kaimu!

I think your time frame on the neo-Russian revolution might be a tad short. Yeah, they had one, now what do they have: a benevolent dictator in Putin. Russia is an oligarchy. If anything, for the majority, things are worse than they were before Communism fell. You have a few islands of wealth around the big cities and then swamp. The vacuum created by the revolutionary mobs allowed the "dicttorship of the proletariat" to be re-established. Remember the IQ bell curve and where at least half the people reside...If the same were to happen here, who has the organizational skills to put it back together. Those who were in power. Ah yes, the Sith will rise again.

Added some Jan. puts to all positions on the pop in the opening yesterday & sold the energy trusts I had been accumulating.

The energy trusts could be bought back at lower prices with calls now ITM if need be.

Dec. puts equal to the no. of Jan. puts bought will gradually be sold off as the market retraces the automatic rally. Just rolling forward thusly, not increasing short position

Yesterday only one such put was sold, on the IYR when it was down over 12% intraday. IYR was weakest, commercial real etsate is toast & the market seems to know that now. IYR may well crash even if the general market holds up.

Will try to do a dididend play on DMLP today - buy some NOV. ITM puts if they can be had cheaply enough, and toward the close buy back the DMLP, probably by exercising the 20 calls, as it held upp well yesterday. Then collect the nearly $1 dividend later this week, and eventually take profit on the puts. This very often works well on high dividend stocks. At risk is "only" the cost of the puts.

Pappdjavul:

This also was an important paragraph:

"However, it has always been our view that the state ultimately trumps the economy and the nation trumps multinational institutions. We are strong believers in the durability of the nation-state. It seems to us that we are seeing here the failure of multinational institutions and the re-emergence of national power. The IMF, the World Bank, the Bank for International Settlements, the European Union and the rest have all failed to function either to prevent the crisis or to contain it. The reason is not their inadequacy. Rather it is that, when push comes to shove, nation-states are not prepared to surrender their sovereignty to multinational entities or to other countries if they don’t have to. What we saw this weekend was the devolution of power to the state. All the summits notwithstanding, Berlin, Rome, Paris and London are looking out for the Germans, Italians, French and British. Globalism and the idea of “Europe” became a lot less applicable to the real world this weekend."

One of the great threats to American $ hegemony has been the Euro. If this crisis breaks the Euro, it breaks that threat.

Looking at REW,SZK,SCC,SSG longs in the premarket.

Do ur own homework.

CP,

I think we'll begin to see people start buying as soon as they can get more credit. Well, why not? If they get to keep what they shouldn't have bought, can buy even more things at "zero percent interest" and believe it will be priced higher (in fiat dollars) tomorrow...

We'll be off and running again.

Of course we will probably get to the next plateau with the "much too big to fail" companies before long.

We are all heading for the Gglobal Company Store to which we will owe our souls.

On the plus side (?) my age may mean I won't live to see the final collapse of the country I love. We continue to follow the pattern of (no longer) Great Britain. Their socialism began with the nationalisation of banks in 1948 and their freedoms progressively followed to today's low point.

The worse case scenario: The revolution comes and I can't see well enough to still shoot straight :-(

ANALyst Upgrade/Downgrade information appears to be on the fritz this morning.

Doesn't look like the inverse ETF's will reach my targets.

Reading Buffett's new book, his dad (Senator Howard Buffett) was for the gold standard.

http://www.fame.org/PDF/buffet3.pdf

"The paper money disease has been a pleasant habit thus far and will not he dropped voluntarily any more than a dope user will without a struggle give up narcotics. But
in each case the end of the road is not a desirable prospect."

"I hold here a small packet of this second kind of money -- printing press paper money -- technically known as fiat money because its value is arbitrarily fixed by rulers or statute. The amount of this money in numerals is very large. This little packet amounts to CNC $680,000. It cost me $5 at regular exchange rates. I understand I got clipped on the deal. I could have gotten $2½ million if I had purchased in the black market. But you can readily see that this Chinese money, which is a fine grade of paper money, gives the individual who owns it no independence, because it has no redemptive value.

Under such conditions the individual citizen is deprived of freedom of movement. He is prevented from laying away purchasing power for the future. He becomes dependent upon the goodwill of the politicians for his daily bread. Unless he lives on land that will sustain him, freedom for him does not exist."

Kind of funny that China is fighting not to devaluate their currency buy buying trillions in USD reserves, and their currency is 6.83 yuan to the dollar and getting stronger.

http://tinyurl.com/4z2zsf

Must be tough for them to keep up since it's backed by the gold standard "USD" & exports to US.

When will we see parity with USD?

Good morning.

Here are your Cara 100 Ratings Changes:

Upgrade:

DNA - to Buy @ Citigroup

New Coverage:

PAYX - Neutral @ Credit Suisse

Price Target Lowered:

CSCO - from $29 to $24 @ Lazard Capital
DNA - from $105 to $98 @ Lazard Capital
LLTC - from $32 to $26 @ Friedman Billings

2nd
Sold few stock that were green and raised 5k
And will raise cash up to 50%. Do not want to be long 100%. It was a mistake to be in 100% equity. Also stop reading and wasting time on article and opinion about market.
I have a feeling that we will not hit 10000 for DOW for a while
So, to day trade and swing trade need cash and now I am trying to raise it. Thought of using margin but gave up that idea.

2nd
I look at gold related stock last night and conclude that
If there is deflation gold will not go high?
Also there will not be big consumer demand of gold because of week economy.
And since gold and gold related fund are not down people may sell them to raise cash instead of selling other big loser.
Also there is lots of quality company stock that are down a lot which may give return
Than gold related investment which is not down a lot and may not give big return relative to other sector
This is my personal opinion and I may be wrong more than right

Rio Tinto Checks in. Record quarter, but expecting China demand to slow, slowing exports, but plannning to continue infrastructure build internally.
http://tinyurl.com/4tkpbs

CP

Regarding your question yesterday about banks creating money out of thin air, the link below is to Rothbard, The Mystery of Banking. An excellent primer on banking, with a libertarian slant. Free and downloadable.

http://mises.org/Books/mysteryofbanking.pdf

When you get through that, take a stab at Friedman & Schwartz, A Monetary History of the United States, and you will then know a whole lot about the money supply. A good read, actually, if you’re into it.

http://tinyurl.com/47jn3t