Good morning

What a crazy week! A week in which the Dow Jones Industrial Average managed to record both its largest single-day points increase and its second-largest one-day points decline since its start in 1896.

Governments around the globe launched unprecedented and concerted rescue operations for major banks in order to unfreeze short-term credit markets and avoid a collapse of the world’s financial system. Interbank and commercial lending rates started to ease with the overnight Libor rate dropping to 1.66% on Friday from a high of 6.87% on September 30.

Jeremy Grantham summarized his investment recommendations in his latest quarterly newsletter as follows: “At under 1,000 on the S&P 500, US stocks are very reasonable buys for brave value managers willing to be early. The same applies to EAFE and emerging equities at October 10 prices, but even more so. History warns, though, that new lows are more likely than not.” Do you agree?

Read all about this in my weekly review, highlighting some thought-provoking news items and quotes from market commentators during the past week. The link is: http://tinyurl.com/635vkk

That’s the way it looks from Cape Town.

Some of the long term well known value buyers are emerging and starting to buy, Jeremy Grantham of GMO among them whose third quarter update has just come out.

http://www.gmo.com/websitecontent/JGLetter_3Q08.pdf

Notice in the daily review that Bill got out yesterday to enjoy a few on the beach...he's finally given up that sham running club activity...:)

[Bill Cara note:

Actually the Nassau Hash House Harriers is a respectable running/drinking club with a multi-decades history, but my lack of time has prevented me from joining them, except for once, in over a month. I am now a stay-at-home runner(walker)/drinker by necessity.

Here also to show what the Hash does in Nassau is a notice I just received from the Hare Raiser:

Everybody: Just a reminder

Run #1414
Date Sunday 26th October 2008
Time 4:00pm
Location Coca-Cola parking lot, J F K Drive
Hare John Paul Sanddleton

See you all there sober or otherwise bearing in mind all of the activities listed below.

BNT wine & Arts on Saturday 25th from 12 noon - 5:00or 6:00pm
Rugby Saturday & Sunday
Scottish curry night on Saturday
Jazz night (Mike Lamb's daughter) on Saturday night

Busy weekend

Onon
HR]

Bob Hoye
Oct 16, 2008

http://www.321gold.com/editorials/hoye/hoye102008.html

"Gold Sector: Senior golds have been expected to decline with the general bear market until around late October. From the high of 518 in March the HUI has slumped to 204. On a similar move in 1929, Homestake fell from 11.5 to 8.13. Canadian producer, Dome, fell from 5.5 to 3.

Obviously gold shares still track the stock market in a crash and will continue to track into the new year. Somewhere in the first half of 2009 the existing increase in gold's real price should begin to enhance operating earnings. At the same time most commercial, industrial, and financial earnings could be disappearing.

In previous post-bubble contractions the real price has improved for some three years as the orthodox world suffers, and the gold sector shines.

Most researchers still focus on the nominal price but it is only another price series to trade. Some, fully realizing the nonsense of policies of deliberate dollar depreciation, use gold and silver to bludgeon central planners. This can be an expensive habit during a bubble and the immediate phase of the contraction.

Gold's real price declines during a bubble, which impairs earnings. This makes gold equities underperformers. Then in the contraction the real price goes up, eventually making gold shares a premier performer. For example, Homestake's earnings declined from 0.80 to 0.05 with the 1929 financial mania. Gold's nominal price was 20.67 and costs soared with the boom. Then with the bust costs dropped such that by 1932 earnings had improved to 1.24. Gold's nominal price was still at 20.67.

By the end of 1932 the stock had gained 146% to a little over 20. Dome's stock soared to 6.5. This was well before President Roosevelt started imposing his loony ideas, one of which was to join the uptrend in the real price by increasing the nominal price -eventually to 35. Homestake reached 66 in 1939, and was paying 4.50 in dividends. When it comes to mining, the conclusion to be made is that gold's real price is more important than the nominal price.

We have targeted late October as the time to begin buying the seniors. The gold/silver ratio continues to increase, which is indicating that the liquidity crisis is still on. Reaching the low 80s is impressive and moving very well towards our target of around 100. That was reached with the last banking crisis in 1990-1991. This one is much bigger and the ratio could go higher than our initial target of 100."

some interesting comments from Harry Schultz:

http://tinyurl.com/5egnqy

"Talking of paranoia, Schultz's latest comments advance a distinctive theory of the crash: "There's also the disguised possibility (probability) that the meltdown was engineered by insiders/elite/mega-mega bankers to bring down prices (by busting economies) so they can buy companies, banks, property at Wal-Mart-style discount prices, like 20 cents on the dollar.
"New York bankers and East Coast money did that in Texas from 1984-87, ruining Texas property values, killing off Texas banks and installing New York banks and East Coast ownership of abundant Texas properties. Suddenly there were no big Texan-owned banks in Texas, and still none today."

Hold it! I know Texans who think this, too.
And Schultz is rightly drawing attention to the underreported question of who exactly is profiting from the bailout bonanza.

The current Schultz scenario: "The meltdown will continue until it runs its course, over the next eight-nine years plus or minus, with 6-18 month 'mini bull market' rallies along the way, to allow insiders to take profits and sell short."

[Bill Cara note:

Anybody who has taken a risk in life only to see the banker seize the asset and treat the customer deplorably, would agree with Mr. Shultz and yourself.]

Bob Hoye
Oct 16, 2008

http://www.321gold.com/editorials/hoye/hoye102008.html

"Stock Markets: Carnage continues, punctuated by some violent whipsaws. This screams for review. Last Friday saw the completion of an eight-day selling panic. Weakness into Friday was needed to formally register our Downside Capitulation reading, which is a condition that suggests a tradable rebound could start within a couple of weeks.

The other part of our fall forecast has been the possibility of a tradable low by late October, which was based upon the 55-day count seen on a number of plunges. The other was the post-bubble model whereby heavy liquidation ran into late October, followed by a relief rally and a test of the lows made in mid November.

Clearly the bounce out of last week's panic was a day-and-a-half rebound within a plunging market. We learned of this pattern from a long-time and successful trader on the old Vancouver Stock Exchange who had seen it in a number of crashing individual stocks. It has been happening in the big markets and big indexes as well.

Tuesday's belated update on the Capitulation noted that the S&P rebound amounted to a 44% retrace of the loss since August, which was an instantaneous rally. Now comes the dreadful part -the New York Times, which publishes all the charts that are fit to print, did an outstanding chart showing that this plunge is worse than at the equivalent point in 1929. This was included in yesterday's "Economyths".

If this continues the wash out by the end of the month could be for the record books.

However violent this is, we will stay with the history of the great fall crashes whereby most of them from 1720 to 1929 climaxed in late October and bounced. This, when it comes could be limited by Tuesday's high, or 9786 on the Dow. Then in November the October low would be tested and the market could stage a tradable rebound into the first quarter.

This is the optimistic near-term outlook. Liquidation following the 1825 bubble, which included outstanding action in mining stocks, continued into January, 1826.

However this works out into the new year, the market is in a post-bubble contraction and these can run for a few years."

anybody have any thoughts on why the large gold producers haven't stepped in and acquired some of the jr's in the most recent sell-off?
you'd think it would be a good time to acquire some really good assets cheaply....

Cara 100 Update:

CSCO - Upgraded to Outperform @ Morgan Keegan

INTC - Downgraded to Neutral @ GS

It usually makes me nervous when the market opens up. I'd rather see it open down and then work it's way positive.

Good luck to everyone this week.

Rob.

IMO these discussions are being dominated by holders of beaten down gold juniors. Can we move on and talk about some other stocks? I mentioned Oil.to last Friday at $3.70. It's at $5+ this AM. This company's stock was crucified IMO because of the TED spread, and this is normalizing. Take a look. Trading range $11-17 in the past year.

CNBC bans Barron's for exposing the truth...

One of the things I enjoy has been the Monday morning CNBC segment called "The Barron's Bounce," usually with Michael Santoli. It dawned on me that I hadn't seen Mike on in sometime, so I started poking around. I was surprised to read via Gawker that ever since the Barron's cover story looking into Jim Cramer's track record (Shorting Cramer) in 2007, all Barron's staffers have been unofficially banned from CNBC.

This decision serves neither CNBC nor its viewers. Legitimate analysis and criticism into anyone's track record is encouraged. When I screw up -- and I do, all too regularly -- I expect to hear about it from readers. If Cramer's nightly stock picks are under-performing, well, that is fair game for any critique.

http://tinyurl.com/asdcr

Bill,
Great WIR and Monday morning comments as always. Thanks for everything.

rob.

IMO these discussions are being dominated by holders of beaten down gold juniors. Can we move on and talk about some other stocks? I mentioned Oil.to last Friday at $3.70. It's at $5+ this AM. This company's stock was crucified IMO because of the TED spread, and this is normalizing. Take a look. Trading range $11-17 in the past year.

Where is the volume this am?

Re: Junior Buyouts

The buyouts that have occurred in the mining sector already are what you can expect to happen. There's been some $50b. of acquisitions in the last year, you only have to be attentive to some of the activity.

Only the best properties which present prospects for growth, or mergers that have occurred are all part of the story. Musical chairs is over, the leftovers are all that's available.

I have my doubts as to whether larger companies will be swallowing smaller companies willy nilly, simply because they have a prospect. Larger companies will first invest in a portion of their prospective takeover, and then make a decision later to fully buy it out.

AEM.TO bought a portion of CMF.V, but they did completely buy out Cumberland resources. These two companies have a long history of development through the booms and busts of the gold market in Nunavut, so it appears logical for AEM.TO to act on acquiring these companies. If the larger companies are not buying willy nilly, its because they fully expect gold prices to come to them and will wait for that.

That being said, you have to wonder just why Barrick and Teck are not making a move on NG.TO or why NDM.TO is not fully bought out under the circumstances. Barrick and Teck seem to be comfortable to split the proceeds between them of any large prospect.

Bill,

As we continue to see history in the making, I am taking time to reflect on how I got to where I am with my personal investment strategy and how you have influenced me for the better. Today I searched your site " 8800 Dow " because I remembered that your number was a very influential one for me about 2 years ago. Here's a link to your advise that set my wheels in motion:

http://www.billcara.com/archives/2006/07/focus_on_dow_30.html

I am sure that like many others at the time I found your prognostication at the time to be somewhat "off-the-wall" but I could not ignore your warnings. I took one third of my market investments to cash in a money market fund earning about 3% and that is where the money has remained. Later that year I received a large inheritance which I kept out of the market, putting it into a private first mortgage on a newly built home where the mortgagee had 25% down payment and secure employment. These decisions were predicated on balanced advice found in your blog. I am now using the income from the mortgage and other cash to accumulate positions in quality companies that you recommend. My personal list targets CAT, AA, BA, RIMM and MU - but at lower prices than exist today. I may not need to wait long for these to come to me. Enjoy your week!

rimm down while market and tech is up.

FranSix at October 20,

The gea buyout by goldcorp was perhaps one of the most exciting. They stepped in with 1.4 b shortly after agnico dared to buy 50m of gea.

dfinvest - I think I've found what I believe is a partial answer to your question:

http://tinyurl.com/5z3jpf

Tbar, one might imagine that Gcorp. would have saved themselves a great deal of money if they had first invested in all of the prospective properties around them before ponying up $1.4b.

Rob- i don't like gap up opens either, but we need another one of those gap up->close higher/9-to-1 up days for confirmation, so i actually don't mind seeing them right now..

i dont trust this 200 pt move. no volume.

Exelon made a stink bid for NRG Energy this morning.....NRG has a solid amount of nuclear production which is Exelon's bread and butter.

At least tells me someone besides Buffet is bargain hunting in the power/utility sector.

They have been and I own 2 of them which have fallen as much as 70% from their purchase price 16 months ago at a much lower gold price. There may be others I am not aware of.

One of my other jr's is up 37% today, another 500% and it will be back to Nov 2007 high! Incredible.

Thank you, Bill for a mighty Week in Review. it is almost a book chapter in itself, and worthy of a good deal of study.

[Bill Cara note:

Thank you. I did receive a letter from the head of the Business and Economics school at an international University who agreed with my rant regarding economists. There is clearly a need for economists just as there is for regulators. But when these people lose their independence, they lose their objectivity. The result is a bad one. We need to think about how perverted our society has become. That was my bigger point as I'm sure you recognized.]

NRG on a roll from buyout announcement.

That's quite an incredible move, Tbar. Was it based on news releases?

If you look at it carefully and parse out the emotion, major gold companies' record on junior buyouts to date has been atrocious. The have all lost on their investments and bought out during mania phases, rather than invest in busts. So they are going to be triple cautious now on any buyout scheme.

Its does not follow from these acquisitions that they are building shareholder value from the perspective of share price.

Anyone seen any news on RIMM that would cause an 9% slide on a positive day?

I can't find anything worthwhile.

2nd, re - Harry Scultz

copied from trading g while back ..

"This is how it works folks, they herd the assets (and real estate is the most real of all assets) into pools and then they poison the pools, force everyone out, buy the assets up cheap and then miraculously (at great expense to the taxpayers) turn it around and end up holding the deed to most of the land in the country which they will then sell back to the people for 5 to 10 times more than they paid for it until the land is once again in the hands of the people, at which point they start the cycle all over again. This scam was run in the great depression and it took us 30 years to recover from that one!"

"Right now, I like ABX, AUY, GG, and HGU.TO for a short-term, oversold bounce up. I'll be looking to buy Monday morning.

Posted by: Blowout Preventer at October 17, 2008 4:50 PM"

Update: I enterd ABX and HGU.TO on some pullbacks this a.m.

The basis for my forecast on Friday was the RSI(2) of each was below 10 at the prior trading day's close. Will try to hold until RSI(2) closes above 80.

On RIMM:

This is conjecture. THe quarter was soft, however, that is unlikely the reason. Perhaps there are a few margin calls that went out. Whereas we've had major blow offs in Hedge funds that caused widespread sell offs, there may be concentrated margin calls in fewer funds that have to liquidate their liquidatable securities. Of course, there would then be the lemming effect for follow on selling.

Fransix, there was news on friday but I dont think it is news related,it is on poor volume. I had a certain amount of faith in this company at .81 cents last Nov knowing that Puplava Securities owned something like 18m shres. I know their f.a. is better than anything I can attempt to understand. So it is a shocker that it fell so far. I have no understanding of why and no confidence that any gains will be held anyways.

re the usd long term chart posted yesterday,I meant to mention fwiw that the gold price charted in the same way to the inverse gave 1022 as the mar high according to fib and 784 as fib support today as opposed to the usd's 83.25ish fib. They both appear to be right in the ballpark today.

RIMM downgrade.

nemo,

It must be the downgrade. A soft quarter combined with the widespread market crashes had already taken RIMM down 38% in 1 month. Now a further 10% drop must be due to the downgrade.

Who listens to these "analyst" price targets and buy/sell recommendations anyway? Most of them are crap, way late, and way off target.

Anyone know who downgraded?

seems like people are rotating out of tech and into basic materials and energy today...

Fazeli:

First Global downgraded-whoever they are. Doesn't matter. If I could get a downgrade published it would go down.

nasdaq breaking down

Today's rally provides an opportunity for HB&B to sell prior to the next major decline. ;) The remainder of us are awaiting Wednesday's results.

Bill,
They're back to talking us down with Mark Faber on Bloomberg.

More Doom, boom and gloom.....

[Bill Cara note:

Another talk that lacks inspirational undertones, and just harps at the problems. However, Marc is a realist and he is one of us, one of my favorites.]

First Global is buying RIMM today?

Due to a health situation concerning my mother which happened this weekend my mind is not really on trading at all. I trust your best wishes are with us as we sit by her bedside, my sister and I, 'round the clock in hospital and your prayers for her potential recovery are very welcome.

BTW...This trading dream of mine was really HER dream, years ago, when as a suburban housewife she bought all kinds of trading books
(which later formed the basis of my trading education). She never really got to the point with trading where she succeeded, but she always believed it was possible and always believed in my ability to make it happen. I remember her, with her bar charts and downloading the data each night after close of market, the way we used to do it in the old days. She means the world to me and is truly my best friend.

Thank you all very much for everything.

Sharkster:

My mother was one of my best friends...I understand.

shark - all the very best wishes to your mother and the family.

Speaking of rotating - 2nd - Have you considered rotating out of broad ETF's into individual equities which have fallen further (like HAL)?

shark - I'm right there with you my friend!

Shark,

I pray for a speedy recovery for your Mom. I'm sure that you and your sister's presence is very helpful to her.

Barry

Here comes everyone's favorite govt official (Paulson) speaking once again during market hours. Let's see how the market acts during his talk ...

Shark - may your mom recover and go on to become a great trader ...

re:LVS

Buy stop limit order 13.40 stop/13.50 limit

Nov max pain 17.50, Dec 45 so there's some gravitional pull.

Kind of a macro bet on China.

Shark,

All the best to you and your sister, and I wish your mother a speedy recovery.

Shark - hoping for a speedy recovery for your mother.

Shark, you are taking part of your mother, adopting it, and incorporating it into yourself, building upon it, to accomplish that what she dreamed of. That's legacy. I don't know her stage in life, but my father has dementia at 94. We kibbutz, go outside and smoke a cigar. Next day he hardly remembers, but what's important is that I do. Best wishes.

[Bill Cara note:

Well said, westcoaster. It's the kind of thing that kept me going for the last year of my parent's lives, believing all along they would pass on the same day and that they needed me there. Good luck sharkie. The community is with you.]

CP- good idea, but the broad ETFs i own are mainly ultras, and i already have positions in several Cara 100s...(and in the retirement accounts, of course, i'm limited to just Fidelity funds)...

Shark..

My prayers are with you and your mom

be strong

SV

moving sell stop up on CHK. HOD-10 day ATR to reduce exposure.

Shark

sorry to hear. but keep courage urself and extend to ur mom. she needs it very much now. dont forget courage can conquer any thing.

Sold XOM POT TD and AGU taking profits, hoping to buy back cheaper in future. Probably won't happen this time, max frustration principle.

Shark, best wishes to you. I am in a similar situation so I think I understand.

Best wishes Shark

2nd - You and I are ULTRA twins. Anyway, there are other "goodies" out there which have declined more than my ULTRA's, but I'm not sure if/when they'll outperform in a recovery. Just thinking out loud...

Hi Sharkey,

Your prayer request has been delivered to the One who wants to hear it.

Here is something I just found out about RIMM:

http://tinyurl.com/5coltq

Shark,

Surely, trading is only a means to what's really important in this life, spending better quality time with our family and friends.

I have aging parents, both with failing health. I consider every moment I can spend with them a blessing.

You take good care of your mom. The stock market will always be there.

My thoughts and prayers are winging your way.

Regards

Mr. S. Attack,

Hopes for a return to health for your mother and a continued thanks for sharing your time and thoughts on Bill's blog.

Sincerely

Babybear,

Hmmm...45% gross margin on every Bold that RIMM sells.... I suppose I could invest in GM where it loses money every time it builds a car, or an airline that loses money every time its planes leave the ground. In today's market I will only look at those who have solid profit margins and healthy order books. No pie-in-the-sky based on trailing earnings for me. I like RIMM, despite the competition heating up in smartphones.

Sounds like they're hammering RIMM down for an entry point to me.

Some stuff going on with RIMM & AT&T & the Bold either this week or early next.

Watch for it... RIMM has been range-bound for a couple of weeks. broke through lows today.

Best wishes to sharkie on this fine trading day...

Shark - our prayer will be with your family. Keep looking up.

I don't think we are ever prepared to lose a parent. Shark, I wish your mother well.

RTP picking up momentum today folks...

Mish isn't pleased with Seeking Alpha.
http://tinyurl.com/66n2qm

VIX bottoming on 10 day hourly BB.

raising some cash. out of CHK for 28% profit, CENX 17%, SNE flat, WAG flat.

Have you folks looked at Bill's 5 miners/base metal producers today... http://nexalogic.com/5miners.html

This feels like the calmest trading day in months.......

With every talking head assuring everyone there is another shoe that is about to drop, it leads me to believe there is some nice accumulation going on.

I'm eyeing the U.S. auto-parts stores as I see personal auto maintenance as a fairly long term trend as consumers are unable to finance new vehicle purchases over the next few years.

Looking at:
AZO (Eddie Lampert is big into this one)
ORLY (on Bill's survivor sheet from 10/10/08)
AAP
GPC (Owner of Napa auto parts stores, 4-5% divy)

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

Separately - just saw huge bid on IWM 400,000 shares+ at $53.36

the last 30 minutes will be the key, especially for the miners/commodity stocks. their tendency has been to slide downwards into the close.

if that doesnt happen for a few days with some small gains that may be a good sign of a intermediate term recovery here.

(assuming gold can continue to hold up in the face of a blazing USD)

Shark: I hope the best for your family.

When my father was dying we all got together to watch Amos and Andrew. Everyone released into laughter. My dad died and his last words to me, was sharing with me how his spirit was flying and exploring, in release...

We all release everyday. As family we release and share into each others hearts.

In a culture where we surround everything with barb wire and fear. Never forget to skip over all the illusionary fences, ignore the fears of what might be

Live with love of each moment as best you can… to release and share it fully.

I wish the best for you and your family. Release into a smile of just being there with your mother, if you share that smile at the right moment with your mother, it will open up all the release of connection in the now, beyond what you can ever imagine.

westcoaster's story is a perfect example of this truth of sharing in the now. Thanks westcoster you made me smile with that one. :)

Shark,

You are blessed to have the time with her. My Mom passed away last year and I missed out on getting to her bedside in time, was 3 days late. Was glad and lucky that my brother and sister could be there though. Our families prayers are with you, your sister and mother

Paul

I've been a lurker here for about a month, and pretty much due to Bill's begging last week I bought a bunch of my favorite energy stocks at some pretty good prices. And I wrote an equal number of November puts, which are all in the green from 10-50%. These puts are a very nice extra bit of cash. But now I have a "problem" - since I'm a little new to this put writing at cycle bottoms, I understand how and when to get in - but I am not sure when to get out!

Do I just wait the 30 days until expiration, or reduce risk, cash out now, and (implicitly I guess) expect another down move that gives me another shot at writing some more of them?

Bill, could you give me some advice on this one? My tendency is to want to hold to expiration, just because I really enjoy the thought of these things expiring worthless, but that means my money is tied up waiting until they expire.

By the way - thanks. :)

[Bill Cara note:

Excellent question. Why not consider closing some of those short put positions -- the ones you feel most at risk -- and use the proceeds to buy long calls in the stocks you feel after proper dd to have a reasonable prospect of growth. What you would be effectively doing is to shift a little out of income (and exposure of your profit) and putting it into a growth strategy. If you are too risk averse to do this, you might consider taking the profits out of same short put positions and put it into other short put positions that are still looking safe. This latter tactic will be used by some traders for all the time they have a bullish perspective.]

Does anyone know a good substitute for Force Index ...I don't have it in my new brokers' package.
(http://www.incrediblecharts.com/technical/force_index.php)

also sold SU for a nice profit. expect to reload later this month.

USO just hit the top of it's down trend channel.

It's been working around the major fib @ 60.40 for a few days.

Negative intraday volume/accumulation divergences on USO & XLE - and just about everything else.

Doesn't necessarily mean anything has to go down, but at the least makes it tougher continuing up.

Still thinking may be a trading range market for a while.
Too many expecting either a rally or another crash.

Shark

My prayers are with you and your family.

Both of my parents have passed away and this July my mother-in-law passed. The time spent with them was precious and healing.

It all goes so quickly. It doesn't take much for me to tear up.

dave fairtex

I'd say that your 'problem' is a great one to have.

It sounds like you wrote puts exclusively in November. The market may or may not continue to head north over the next 30 days.

IF the market moves down over the next 30 days, you would still be very susceptible to any near term decline.

You might consider spreading your risk out over a longer period of time instead of having November be a make or break month for your portfolio.....

This could mean cashing in on some November puts for a profit and reselling puts further out where you can sell for a greater premium and decrease your overall risk should another decline occur in November........

[Bill Cara note:

Actually, I like the shorter time frames -- like about 3 months -- but I try to take profits after the move in the underlying. Risk management is Job#1; earning profit, lowering your cost base and increasing your cash income on a increasingly smaller cost base is Job#2.]

Shark,
I join the others in offering my support and prayers for you and your family.
MCM

Now this is a relaxing less stressful day in the markets..I believe many in the cara community are making money today...great

we deserve it...thanks bill for all you do

SV

[Bill Cara note:

Sometimes it's easier to do than to teach. Teachers need more respect.

Also, I think the fact that the Dutch government invested $13.4% into ING Bank that conceivably give them a 33% equity position as well as income in the interim was an outstanding deal for the confidence of the market and the people of the Netherlands. I only wish that the Treasury Dept and the US government would conduct themselves in the same professional manner.]

Shark-I will include you in my prayers.

Ray

[Bill Cara note:

There is a good article from Forbes called Asia's 200 Best Under $1 Billion(ie, small and mid-caps). If somebody has the time to put it into an Excel spreadsheet for me, I would certainly appreciate it. There are many stocks on this list we need to be discussing.
http://www.forbes.com/2008/09/19/asia-best-midcaps-pf-bub08-cz_jg_0918billion_land.html ]

BC -
down to about 4 bucks today after a downgrade of their unsecured notes...
That's heck of a price to get in at, assuming they can survive the credit crunch. As Bill pointed out this weekend, oil prices seem to be going their way for now, but its the credit problem hurting them now.

[Bill Cara note:

I really don't want to remove this company from the Cara 100, but I am getting nervous now that I see what the real issue is. Caveat emptor.]

As a starry-eyed collegiate junior, I once introduced Phil Gramm prior to one of his speeches.

Now, I think he stands for the worst, most conflict-ridden intersection between Wall Street and Congress that we've seen in some time:

http://tinyurl.com/5a6y9p

On a separate note, my business is now 100% debt free--at lunch today, I visited the bank and paid off the commercial line of credit that I used to start up my professional practice.

No debt means that Foreclosure Phil and his cronies have one less way to shape the direction of my life.

[Bill Cara note:

From your nickname I'd say you are in the oil business. But let me tell you that your "lesson" here should be read by all professionals. I remember after the 1987 crash when the bank called the receivables-backed loan of one of Canada's top lawyers. He was reduced to begging his friends for help. It was a bad situation.]

Bill,

I just sent you the spreadsheet as you requested. Thanks.

BC

Reading the comments about BC, it isn’t only about pleasure boats.

BC also has a homeland security angle.

BC has a commercial and government products division. They build commercial grade Boston Whalers for military, law enforcement, fire rescue and workboats. If memory serves me correct, they have U.S. Coast Guard contracts. I guess one could argue about less municipal contracts due to falling tax revenue, but the military and Coast Guard need will remain under McCain or Obama IMO. (FWIW, Barron’s has an article about defense companies continuing to do well no matter who wins election).

Disclosure: no position

Hello. This is my first post. And it is to say thx for all your insights and comments. I have been reading for a while now and it has helped me a lot maintain perspective. I currently have long positions and some short puts. Some underwater, some making money now. Special thx to Bill with his early call to buy last week.

Bill re the Forbes Asia 200 list, just sent you a copy, hope you don't get swamped as I see BabyBear also sent you one.

Also put it on Google docs here.

http://tinyurl.com/6dp4y4

Quasi

re:SNDK

taking a shot at it with a buy stop above the 3PM price.

volumes seem low. The volume of posts is low too. Is this indicative of the inflection point the market is at, ie will the last hour hold or not?

Tight band this afternoon on RIMM. We looking at some recovery from drop today?

on rimm. markets up, rimm down on decent volume. staying away for now.

I left lots of money on the table today. Densa membership dues being paid. What might tomorrow bring?

AXP earnings after the bell.

Consumer is tapped out and more cc debt being defaulted on (of course)....but, the stock has been beaten down handily as well

Buffet owns 10% which tells me the management team has got to be pretty good.

I know from some articles that AXP has been actively reigning in and reducing personal credit lines recently......perhaps they were/are ahead of the curve?

Should be interesting....

long SNDK at 13.86

won't be a 9-to-1 up day, but sets us up for one...if we close at the high, puts the DJIA within range of a one-day spike to 10000...

suggest one reviews volumes of individual issues.

closing OEPIX position today.

S&P will break through second level strong resistance today at 978 if it holds...

wow - can't believe what just happened. I sold SLW.to at what I thought was a good price at 6.01... but boom it just went all the way up 6.20. Left 1500 on the table. Sheesh, can't win them all

SNDK - you plan to hold it AH? Either you expect the numbers to be not so bad, or you're hoping for another buyout offer. I'm holding 300 TXN, and not sure that I'm in any better boat...
good luck with it.

Hey... S&P held above 978... so with any luck (poly"tics" stay of the screen) maybe we'll see a bit more blue sky this week... instead of all the dirt we've been eating for the past 60 days...

re: SLW

when a stock is rallying into the close, try to hold it and sell it at the open, assuming u want to sell. Ma and Pa see the rally plus the big boys and that will often cause a gap up open u can sell.

10K may be pushing it 2nd - looking for a close above 9500 and stabilize there, which could be a floor for a launch to 10K eventually.

Thanks bsi87 I have to get myself a book re: trading. I don't want to hold anything anymore for the long term. I just want to make between 1k-2k a day. Buy and sell many times a day, all day long.. No more attachments to stocks, but I really have a hard time with exits.. always sell too early. I will try to remember this... should have waited till tomorrow. The thing is: I had a sell limit order for 6.10, but I cancelled it, thinking it would/could not reach that today. Was hoping to buy at a lower price tomorrow or wednesday.

Now I look at the final trade of the day - slw.to - 6.32... can't believe this... Gosh

SNDK edging higher AH...

Anyway, I made enough today to cover my VET bill for my kitty.

XLE ran up 11%, but USO was knocked back down into it's down trend channel, & UNG dropped - 2%.

Either crude has to break out tomorrow (& nat. gas at least recover some), or else XLE will likely get knocked back down again.

Last Tuesday's highs are still far above in all sectors, except XLU.

Whole day in all sectors had a feel of corrective move up, not bullish. That could change, of course.

Intraday volume/accumulation not too stretched in most sectors into the close, market could continue up some more tomorrow.

I would not be in too much of a hurry to short the open.

AXP has beaten estimates by the looks of it's +6% price action after hours.

Sandra

read Elder's Trading for A Living and Come into my Trading Room.

And Bill's book...of course.

Market likes results from AXP.....

Notable earnings before the bell tomorrow:
CAT, DD, LMT, PFE, SGP, USB, UAUA

Could be a big day if the the market continues to respond favorably to earnings...

navid - subs. for Force index

Elder's force index is simply price change times volume. The programmer of the Telechart "elder disk" told me that it's the same as TSV, or "time sensitive volume" the Worden bros. proprietary indicator. (TSV 2 for daily; TSV 13 for weekly)

One thing I like about Alex is that he doesn't play the "proprietary indicator" game.

I'll bet Twiggs money flow is very similar. Maybe Twiggs would confirm this to you.

BTW, which broker is offering incredible charts? and does it include real-time pricing? TIA

One way to guess if a triangle is being formed is to look at the retracement %.

An 80% correction is a signature of a triangle.

Corrections in bullish/bearish thrusts will do less than 80%, between 50% to max 70% would be more like it.

I see triangles . . . so far.

Sandra - Elder's best book

At this point, and esp. considering your focus, I'd recommend Alex' latest book, "Sell and Sell Short".

It does the best job of summarizing his overall approach, and does focus on selling. Also, the writing (always good) is at its succinct best in this new book. And finally, the graphics are a model of simplicity and elegance.

Alex is upfront in saying that his approach is just one of many (he's a pure chartist, with little interest in fundamentals). But, it's very helpful to have a simple, straight-forward discretionary (he's not a systematic trader) system taken from position-sizing and money management, right through to trade documentation.

His basic precepts: risk management is job 1; good records make good traders; ultimately you're trading your head more than "the market"and need to develop the approach that best suits YOU.

Strategy: Covered calls

Today the market looked healthier. Finally. No big reversals, no crazy news. Ran up a bit too fast too high in my taste, but still.

I started writing some covered calls for some stock I own this morning. The premiums are juicy enough that if the stock goes up or sideways I'm good for a 7% return in a month if the stock trades up or sideways. And if the stock crashes, the stock needs to go more than 15% below its current price before I lose any of my own money. So I'll get the stock at a good discount if bad things happen again.

I may miss a big 20% run-up if there is one, but I'm rather liking I don't have to watch the market action everyday. I'll just let these calls expire one way or the other.

If the VIX crashes too fast this probably won't be a good risk/reward pretty quickly (last Friday, the same strategy would have returned 11% in a month), but selling these covered calls right now is something to look into.

Thoughts and comments on this anyone?

[Bill Cara note:

Depending on your time horizon, writing covered calls can be a good or bad idea. It can be a bad idea if the market is extremely over-bought because that's the time you need to sell. If the market is extremely over-sold, it's a bad time because you would be giving the call buyer the option to take you out at a very low price. If, however, your time horizon is a very short one and you have to or want to hold the stock through hell or high water -- most likely during a narrow trading range -- then, with the analysis you gave us here, it's probably a good strategy. But then you are cutting things pretty fine, and you need to be a good trader who monitors positions closely on an intra-day basis.

On another point; do you all recall my "Oct 10 ADDENDUM 3:40pm ET [BUY ALERT FOR 95 STOCKS]"? There was not a single player in the market that made that bullish call on that Friday. Now, six sessions later the DJIA and the S&P500 are up +9.6%. Had you bought those stocks and wrote puts, you could have made your year. Meanwhile, most people were stunned into inaction, listening to Talking Heads tell them the world was falling apart.

There is so much nonsense on TV it's incredible these people have jobs. At the close today, the Bloomberg anchor (I won't watch CNBC unless I'm forced to) was simply beyond belief. He actually said to his guest, a young floor trader: (paraphrasing) "The past couple weeks was hard on traders but today looked like a good one to investors." Who writes this stuff! Then the floor trader chimed in with: (parphrasing again) "I recommend buying puts and locking in your profits." Honestly, Bloomberg ought to apologize. That stuff is pathetic.]

Shark,

All the best to you. It's hard to lose or even to contemplate losing a parent.

Sandra - addendum on Elder

Alex is basically a swing trader, looking for trades of a couple of weeks to a couple of months His indicators and rules (2 MA's, price channels, MACD, Force Index) are probably best tuned to swing trading.

Above all, he buys at a lower price channel or at the convergence of two MA's (called the "value zone") and sells at an upper price channel. Shorting is the opposite.

There may be others who are more focused explicitly upon trading signals for day traders. Still, Alex' notions on selling would probably be quite useful to you.

[Bill Cara note:

Alex is a friend. I highly recommend his books and courses on trading.]

"Oct. 20 (Bloomberg) -- About C$32 billion ($26.8 billion) of Canadian commercial paper will remain frozen another month because the global financial crisis is delaying a restructuring, a committee overseeing the plan said. "

http://tinyurl.com/555lxh

"Oct. 20 (Bloomberg) -- The Bank of Canada said it will buy C$4 billion ($3.36 billion) of securities from commercial banks and brokerages for 91 days to help credit markets function. "

"The Bank of Canada also will sell C$550 million of treasury bills on Oct. 23 to help offset the increase in assets from loans such as the one it's making tomorrow, under a program known as term purchase and resale agreements. "

http://tinyurl.com/6cern3

Sounds like we will rally for another month? The blue horse seems to be a good candidate for handicapping.

http://tinyurl.com/6cc3e6

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

Citic Pacific Expects $2 Billion in Losses From Currency Bets

http://tinyurl.com/5spzct

Anyone else see this news today? I wonder if it might account for some of the blowout move in the Aussie dollar over the last couple months?

"Depending on your time horizon, writing covered calls can be a good or bad idea. It can be a bad idea if the market is extremely over-bought because that's the time you need to sell. If the market is extremely over-sold, it's a bad time because you would be giving the call buyer the option to take you out at a very low price. If, however, your time horizon is a very short one and you have to or want to hold the stock through hell or high water then, with the analysis you gave us here, it's probably a good strategy. But then you are cutting things pretty fine, and you need to be a good trader who monitors positions closely on an intra-day basis."

My thoughts were that we are going to go sideways for a while. We just dropped 10% a week ago on the week, and are still down 20% from a month ago.

It sees unlikely to me we're just going to erase last month's losses quickly as if nothing happened. I see four possible outcomes:

- We go higher quick and furious. In that case writing calls is a losing strategy, though I think 7% in a month is not a bad return.
- We go sideways for a month - best possible outcome for writing any type of option.
- We drop again in a measured fashion, in which case covered call writing still turns up a profit.
- We crash yet again. Seems unlikely, and the covered calls do force me to commit to a price that right now, while being detached from it, looks reasonable.

For the next six months I would think the market will be indecisive as recession is still on everybody's mind.

Bill,

Reading your comments above, Martin Luther King's speech came into my mind: Free at last, Free at last, thank God All Mighty, we are free at last!

http://www.youtube.com/watch?v=I4Wbmp6CQo8

Now, I would also like to share another slice of life: here in Southern Europe we are seeing a trend of northern Europeans, mostly Dutch, but also Germans, and English, coming in to buy top tier real estate.

These people are flying in, closing the deals in 2 or 3 days, and then go back to their countries.

They are looking for places to park their cash, fearing problems in Banks like Fortis, etc.

They are not even bargaining the price, they simply pay up.

Interesting times.

Best,

Thank you all very much for your kind words and support. It means a lot to me.

In the hospital this afternoon I noticed a nice day rally shaping up (she gets CNBC in her room) and I was hoping that all of you took part and profited.

Thanks again.

Pick a bank, buy it, wait for the pop, and sell the crap.
Sounds like a broken record, but it pays good.
Short YHOO, another sure bet....earnings tomorrow, expected to lower guidance and announce lay-offs. 43% drop in share price since they thumbed their nose at the MS offer.
Short Brunswick Corp (BC), downgrade by Moodys and S&P.
Shark, hope your Mum gets better soon.....there is great deal of comfort in holding a loved ones hand.

A question for Canadian day traders, are there any draw backs to buying american companies vs canadian companies when trading on such a short term?

The american volume is attractive and after hrs trading so I am wondering if the currency risk is offset by the timeframe?

Hi all,

For many years I follow a long term trading signal which tells me if the longer trend is bull or bear. This signal helps me align my trading strategies with the basic direction of whatever it is I am trading.

The signal is simple: pull up a weekly chart with a 20 Week simple moving average of closes, and a 50 week moving average of closes, nothing else.

- As long as the MA20Wk is above the MA50Wk, the broad trend is bull.

- As long as the MA20Wk is below the MA50Wk, the broad trend is bear.

For confirmation I waut for the MA20Wk to be distant 1% from the MA50Wk.

Ok, so now the shockingly bad news is the following: POG is now in a bear market.

I just pulled up a chart, and I could not believe my eyes.

http://tiny.cc/HOBsS

My jaw simply fell when I saw this.

So now, as unreal as it may seem, untill this signal tells me otherwise, bear strategies will prevail.

Being a gold bull, I never thought I would see this...

Cheers!

Hi again,

http://tinyurl.com/5be4ul

I am so shocked that I pulled a long term weekly chart for gold, and it struck me that PoG has already touched the 38,2% retracement of the entire 2001 - 2008 bull market.

Sorry to say this, but from a technical standpoint, PoG can go to 643.

Incredible.

Cash conundrum.

WSJ: "Could Google provide a stimulus package to help boost the ailing U.S. economy?

Google CEO Eric Schmidt revealed Monday to The Wall Street Journal that the company is "thinking" about returning cash to shareholders. It's only a concept at this point, mind you: Mr. Schmidt ruled out a dividend and said no cash-return was likely any time soon.

Even so, it was a telling comment, indicating that despite Google's continued investment in a wide range of new business initiatives and infrastructure, the company's cash is piling up faster than it can be spent. At Sept. 30, Google had $14.4 billion in cash and marketable securities."

http://tinyurl.com/5cyee7

Apparently Bernanke's comments about "netting out" new $$$ are similar to Goldman Sachs "Tocom Short" on gold that they held during the bull.

Short Gold in Japan, long something else somewhere else.

http://www.tocom.or.jp/souba/gold/torikumi.html

Great way to mess people up. GS appears to be long Dec gold?

CP,

As I posted last Monday, I lunged into broad market ETFs because I was getting exhausted buying great individual issues for 3 weeks only to get stopped out a day or two later. That worked well. Now, I'm going to begin switching into more individual issues - and like you say - one's that have had the snot beaten out of them and have more rapid upside potential, in the short term.

Made a first preliminary screen tonight:
Low P/B, good move up today, modest price/share, hammered in the last year, low P/E, respectable Market Cap, good current ratio, liquid, decent profit margin, decent 10-year EPS growth.

Got 4 names, including WFT. It looks like a no-brainer to me. What do you think?

Google could always return cash to Yahoo shareholders.

But that would result in a monopole. :)

http://tinyurl.com/6jewyd

Crappola - WFT has gone crazy after hours

Posted by: maromatics at October 20, 2008 6:26

I am concerned about 730 not getting tested yet,otherwise a longer timeframe and ma.s seems to be ok as far as I see it. The f.a seems to suport higher prices yet the t.a suggests 730 should have been tested?
I dunno...
http://img147.imageshack.us/my.php?image=ggggeh3.png

shark - I wish your mother complete recovery. I believe you got the priorities right - health of family members is above everything else. The market will not run away from you. You should do everything possible to make sure your mother gets the best possible treatment.

Tbar,

Yes.

Fundamental analysis is completely bullish, but looking at charts earlier today I am schocked to see a bearish signal.

Its not so much about 730 being tested now or later, it is more about the MA trading signal I described above, added to the retracement since 2001, and the fact that POG is putting in lower highs and lower lows.

Intervention? I do not know, and actually I don't even see it as a relevant matter.

What matters is prices, and the technical picture is not nice for a gold bull like myself, especially as a hyperinflationary tsunami is in the cards.

Incredible.

watermelon:
reading through the discourse I saw your BC post stating the 4$ price - suddenly I realized I had orders in at around that price from some time ago - went to check the account and to my surprise - long 1000@$4...I'm ahead, which is good, so I'll manage the trade from here...

Maro re Gold

I see your point, however I put together a chart Gold and the $USD index, along with the same 20/50 SMA in several other currencies. Seems like gold is only bearish in the USA, if you buy that same gold bar in other countries it is still in bullish mode.

http://tinyurl.com/59uwtc

When we get into situations like this where stocks or commodities which trade internationally are showing "higher highs / higher lows"
or "lower highs / lower lows" based on the currency of choice, then I think the currency movements are driving the chart and masking the supply and demand chart for the product. I've seen the same thing other commodities and stocks.

Things are much easier to analyze when we have steady currencies. In this case I guess it depends more on the outlook for the US dollar index value going forward.

Quasi

bsi and Jock: Thanks for suggestions for books. I intend to buy Bill's book. Will definitely look into Elder's book.

I have a few strategies: Half of my trading account will go for the RSI buy/sell signals, as soon as we retest the bottom. Is it possible that the bottom won't be retested??? I don't have enough experience to know this. I started trading/investing in the summer/fall of 2002, so this is my first experience with a bear market, it is brutal to say the least.

My next strategy is to take 1/4 and trade many times a day if possible.

The other 1/4 will be for swing trading (so that book will be good for that).

I realize my goal of 1K + per day sounds mighty ambitious, but I'm going to keep trying anyway. I did make it today, but left way much on the table.

I also plan to buy RSI30, and sell RSI70 (daily) with my retirement account. So 2 different accounts.

I guess I want to try these strategies, cause I don't want to be emotionally attached to certain stocks and in believing that they would go to the moon.

I have also stopped reading DOOM/GLOOM/DEPRESSION sites, as it was clouding my trading and keeping me in fear.

Thank God I kept reading Bill everyday and was able to keep my sanity.

Maromatics
fwiw here is the weekly using the same fib section, we can see the three fibs have been adhered too I think?(784,830,875)

The histograms are rising rsi is higher and we now have a higher low. The 50,2 lower bb is in support and the 89 wma (fav of fraileys) is in close proximity for a rise above.

I think if you click on this image once it comes up it enlarges and becomes clearer?

http://img296.imageshack.us/my.php?image=bbbmh0.png

The usd hit the target I mentioned yesterday fwiw within a few pips, some weakness now would help the pog, it looks a little toppy here to my tired eyes?
http://img90.imageshack.us/my.php?image=uuuih1.png

[Bill Cara note:

19 of the Cara 100 were up more than +10.2% today, including XOM at +10.2% and Baby XOM (70% owned by XOM) Canada's IMO up +16.0%. SU was up +15.3%]

addem, I may be/am a terrible trader but I won't dispute that long term highs and lows were written by history.From 875 to 250.52 was etched in stone by a few decades just like 164.72 to 72.43 was for the dollar. Those levels are key, a 38% fib ext off each gave 70.70 and 1022, those are about as good a call as any I have seen in the gold market in 7 yrs of following it 20/7.... So 784ish is support and 83.25ish is resistence until it is broken jmho.

Tbar

When grabbing the URL from imageshack you can use the Direct link rather than the instant messenger link. That way you will only get the chart image without all the imageshack header and footer advertisements.

Try it, you'll like it, Mikey does.

oops I meant 78.43 for the dollar low.(1992)

quasi

Thxs but I dont see the direct link anywhere?

Has anyone else noticed the positive MACD divergence in the British Pound/USD? See for e.g. FXB. While I think the play is now in the AUS$, after that recovers a bit, FXB might up to something. Doesn't have the reward/risk I need to heal my portfolio but might be educational to watch it unfold.

Oh I see xs hosting has a direct link whereas image shack may not.

here is the long term chart and fib
http://xs132.xs.to/xs132/08431/ud2130.png

with the corespoding daily

http://xs132.xs.to/xs132/08431/uuu631.png

ALOHA !!

So this is what passes for "great earnings" in America now? A 23% drop in profit and the shares rally! If I was the CEO I would put out earnings estimates of a 100% losses and then when I have only a 50% loss my shares will rocket because I beat expectations by 50%! WOW ... where's my bonus? HA!! God, I should IPO ... I actually have profits I can report! Real profits without offshore shell companies holding my losses!

READ ON:
American Express Profit Beats Analysts' Estimates (Update3)

By Hugh Son

Oct. 20 (Bloomberg) -- American Express Co., the biggest U.S. credit-card company by purchases, rose 9 percent in late trading after beating some analysts' estimates for third-quarter earnings.

Profit from continuing operations declined 23 percent to $861 million, or 74 cents a share, beating the 59-cent average estimate of 15 analysts surveyed by Bloomberg. Revenue at the New York-based lender rose 3 percent to $7.16 billion.(more)

Tbar

After you upload the image to imageshack you should get a list of URL's you can use for the image, there should be one identified as Direct.

Here's a screen shot from my imageshack file, I've highlighted the Direct link for a particular file.

http://tinyurl.com/6zu3fd

Quasi

Bill stated this morning at 8:57am:

"I continue to believe that October has been a transition month for the equity market, from Bear to Bull, although I do admit this has been a difficult birth. Traders have never before lost so much confidence in their banks and in the banking system generally."

I agree, and I hope that I never experience the last six weeks again in my lifetime. But this dip was just as bad as last August 2007 when I held mostly equities and less cash only to bounce back up in September to what my portfolio was at the end of July 2007. Thank goodness for not using debt/margin and positioning from mainly cash to small early positions in September 2008. All the same, this is not buy and hold time. Buy quality, buy the Cara 100 stocks at all cost and be cautious as cash is still preferable.

I am getting leary of this roller coaster ride. Later tonight I will read the commentary to get guidance on what happened today. Thank you all for posting while I am away at work.

Bill, your comments since Thursday last week to today has been some of your best. It is an anchor in the storm, from the heart and with a firm stand for your position. I sincerely hope that those who can make the changes needed read your blog and act promptly. We have all been knocked down too many steps on the ladder towards equity. Cheers. [064]

Maro,

Thanks for your post. A further downside to gold is $480 is possibly. I'm concerned to hear of the hardships endured by some folks here and caution prec metals lovers of more probable pain ahead.

I was at a Sprott presentation today. Overview
1. Systemic financial meltdown
2. Long-term secular bear market continues

Gold: Inflation, supply/demand shortage of real, (mints out of product) safe haven twin deficits and USD DOW/Gold Ratio hits 1 at nadir. Their target $2000 AU $40 silver in 4 years. Deemed conservative by some prognosticators.

1. This is not the first crisis, and we’re still here. We’ve been here before. Most recently in 2002 after tech meltdown and 9/11 terrorist attacks. And in 1998 when Russia defaulted on sovereign debt and Asian banks and currencies collapsed. We have to go through it to get through it.
2. Fear rules. No confidence. Indiscriminate selling that reflects a world gone mad. No attention paid to company fundamentals. Prices will rise dramatically when greed returns, as it always does. Be early.
3. The companies in the portfolio will still be here 2-3 years from now, however this bedlam in the financials is resolved.
4. Today, there are stocks trading at valuations of less than their cash on hand. This is truly a once in a generation situation.

Some Enduring Themes
1. Rising wealth in developing world. China will be much bigger 10 years from now. If they start allowing people finance (eg. take mortgages), they could possibly decouple and go it alone.
2. Infrastructure:
3. Peak oil still in effect today. Production peaked in 2005. 20 years from now there will be less oil flowing than there is today. Alternative Energy Sources will be developed.
4. Manufacturing.
5. Materials. Iron, copper, nickel, aluminum, zinc, lead, molybdenum, uranium,
6. Currencies are being debased. Gold and gold stocks will eventually rise far above current levels.
7. Aging population: healthcare, biotechnology, lifestyle planning.
8. Technology:
9. Food and Agriculture.

Shark

Best Wishes for your Mom

1bullseye

It would be great to hear your reasoning.I think it is important for anyone with numbers to throw out to state their case. Mostly you have just made blanket statements,give some reasoning to back up your thoughts. You said yesterday that cb's would be sellers of gold and I showed you very recent articles/data that showed the absolute opposite and you made no reply.

So please just give some good ole honest reasoning for your thoughts, I would appreciate it for the sake of good info.
Instead of just stating that it is going down which just does not stand on it's own.

Give us some ideas of why it will go down not just it will.. with 480 projections, I am willing to listen to reasoning for 200$ but lets hear it right?

Tell us why you think 480.

Cheers

$480 Gold!! God, I hope not. Anyway, speaking of Reward/Risk, If I had a gaziilion $'s today I'd probably pump some of it into something like HYG and/or PFF (which I did buy and got stopped-out of during the week from hell). There sure is a lot of money flowing into them right now.

ps
did not goldcorp just close a mine because it was not profitable at these prices? If so how many more will close? If supply and demand is the law of pricing how will gold reach 480 as investment demand rises and production decreases?

RE Gold
http://tinyurl.com/6gvxq6
Minyanville Gold discussion plus two followup commentaries add to this discussion.
Basically, we won't have rising POG until we have inflation, which won[t happen til banks want to lend and people want to borrow again. a year away from now?

The potential lows are in the charts. Those are only possible technical supports and may not get there but the possibilities are real. Just a warning for those that are over-leveraged, over-exposed and drunk on gold kool-aid. The short and med-term may be very difficult.

The long term story is great but lower prices lurk in the short term I believe.

Final thought for the night before I curl up with a good book: Anyone else noticing that Asian markets are outperforming all others during Bill's rally here? see for e.g.,

http://tinyurl.com/6ylqxv (VPL:EEN)

westcoaster at October 20, 2008

You brought up a good pt about too much emphasis on gold shares this morning that warrants further discussion imo. What is the best sector to be in? Have to call it a night but tomorrow maybe we can look in to that?

Cheers

[Bill Cara note:

Typekey, which I have no connection with is a software product that blocks postings by people who have a record of spamming or flaming. Tonight I received a comment in the Discourse from sustainability that Typekey suspended. The comment started, "Bill or his acolytes,.." This person may or may not be a good person, but when (i) he/she starts a letter like that, and (ii) is suspended by Typekey, I don't have the time to look further. Time is at a premium. Regrettably there are people in this world who care more about screwing up the world... I'll leave it there except to say that the high quality of this Blog does take time to manage.]

shark-

in January 1973 i got into a fight with my Dad, dropped out of freshman year in college and, together with my roommate, hitched our way to southern california...in san bernardino, he headed for the mountains, and i elected to stay in the city...for a couple of weeks i was homeless (as kaimu would say, before they came up with the term)-> i recall spending two nights in a deserted classroom before learning it 'belonged' to another transient...in search of a job, someone suggested the resort area of Big Bear Lake, and i hitched up to a small town called Crestline, where i spent the night with a kind older couple with two dogs...they suggested i might find a decent job in the high desert area, and dropped me off on the road to Hesperia...unfortunately, the road was little traveled, and those who drove by were unlikely to pick up a long-haired Asian with a slightly defiant attitude...so i spent one night 200 yards off the road in a deserted ramshackle barn...where i recall looking up at the clouds in the night sky and wondering WTF my Dad and I were arguing about anyway...over the next few months, I would end up in SF, Menlo Park/Atherton, Washington State, and Carmel Valley, mostly working and occasionally crashing at different pads (now i really marvel at people who once opened up their homes to strangers)...you don't really know who's on the streets and why unless you're out there yourself, but most of them aren't that different from you and me...my Dad finally flew out to SF and we met for breakfast in the Tenderloin, bought me a bus ticket home-> and I dropped out of Michigan again in January 1974 (LOL)...that time, i'm sorry to say, i got into a little trouble, and came within (literally) steps of totally ----ing up my life, but i caught myself in time, probably due to the legacy of my upbringing; sometimes being away from those who matter is when you realize how much they matter...my Dad is now 80, and we see each other at least once a week...

i know you lost your Dad a few years ago, and i'm sorry to hear your Mom is in the hospital...

best regards, 2nd

[Bill Cara note:

2nd, you are a good person. Thank you for being here.]

Also why $2000 gold?

Sprott, sprott.

"4.Today, there are stocks trading at valuations of less than their cash on hand. This is truly a once in a generation situation."

Let's look at some of those companies.

I looked at cash per share metric vs. share price. Is this correct?

The ones that came out on top.

http://tinyurl.com/5fujnp

FFH
NVR
FCNCA
ALX
BRK.A
WSFS
WSC
IBKR
MKL
BAP
GOOG
ESGR
BMO
WBK
SEB
GS
PNSN
WPO
EVR
MITSY

Narrowing down ones that have enough to calculate ratio.

GOOG
ESGR
SEB
PNSN
WPO
EVR
MITSY
CLMS

MITSY. If you bought when it came up on my screen Sept 29 and sold in 2 days you could be up around 10%. If you bought last Friday you would probably be happy today. P&F has a price objective of $360 today. Hard to believe...

EVR (investment bank, way of the dodo?), another one on the list, just hired the former Commander-in-Chief Fleet of the Royal Navy.

http://tinyurl.com/48q2yc

Pension Worldwide (PNSN) looks interesting at these levels. Could play the earnings call this Thursday.

P&F chart for GLD. Lots of support in $570 - $680 range (and $250-$300). Plenty of support in $800 - $900 range too.

I noticed one of the bank towers downtown looked extra golden today. Maybe they got the buffer out to bump up the price a bit? :)

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

Is $480 out of a hat?
http://tinyurl.com/62qlff

Looks like I'm looking at the wrong metric.

From Kirk Report. http://www.thekirkreport.com/

29 companies that sell for less than their cash
http://tinyurl.com/5ky7kx

I noticed USO is on there. Does that mean the selloff in oil was too dramatic and will bounce back quickly, or is it just people bailing on an ETF?

Since I don't want to deal with country risk, here are the 5 Canadian companies on the list.

Nortel Networks  
Bank of Montreal  
Onex 
Celestica 
HudBay Minerals 

All of these look interesting at these levels... except for lil' ruffy at the top. woof.

"A question for Canadian day traders, are there any draw backs to buying american companies vs canadian companies when trading on such a short term?

The american volume is attractive and after hrs trading so I am wondering if the currency risk is offset by the timeframe?"

Tbar,

over my 12 years of day trading USA markets I lived through the whole spectrum, from .60 (happy times) to 1.1 (not so much). I kind of came to view it as an external force, outside of my control, sometimes working for and sometimes against me. To me it kind of balances itself out - do I lose on CAD rising to parity, or did I just win big while it was low and simply am having my win decreased? :)

A few times I kept my latest withdrawal in my USD account waiting for more favorable rate, watching USD/CAD chart and trying to determine whether to wait or rush with exchange. Short of catastrophic USD drop against CAD, I can't justify switching to TSX for DAY trading.

Citi will pay a quarterly dividend of $0.16, a 50% cut from $0.32 of last quarter. Poor shareholders.

Oh wait ...

Isn't Citi going to receive $10B aid from government to shore up its capital? So $0.87B goes to dividend this quarter?

marketwatch out with a telling article:

http://tinyurl.com/642nc6

one quote says it all:

"It's a scary time for a lot of people," said Terrance Odean, professor of banking and finance at the Haas School of Business at the University of California, Berkeley. "Many investors who get out now will stay out until they've seen the market recover -- which will be too late to get back in."

SandraT,

Please don't jump into the market with a vague plan and a goal of making $1000 or so a day. If you are successful, you will soon be shooting for $2000 or $5000 or $10,000 a day and you will eventually take on unaffordable risk.

Instead, I humbly submit a goal of learning to make textbook entries, good money management, and having a time-tested system of exiting your trades. In essence, have a clear understanding of what constitutes a good entry, understand how much you can afford to lose if the trade goes against you, and have a clear understanding of what constitutes success.

If one takes the view that they will be trading decades from now, the desire to make a set amount per day will wane and a focus on patient, great trading can take hold.

Whats up with C up only 1% today when the mkt is up >4%? Insight anyone?

Volumes on many issues are 50-70% of the 10 day average.

Be nimble and flexible.

anyone notice that "RealMoney" only listed "Bullish" and "Update(d)" tickers today (ie, no bearish tickers)?

Today's Tickers
Bullish
AAPL APA AXP CAT CBS EP ETN FCX HAL INTC ITT MOT PFE SNDK STX TXN YHOO
Update
AA AAPL ACI AMAG APC AXP BA BBY BP BRK.A CAT CC CEG CHK CMCSA CVX DE DIS DVN ECA ER ETN EXC GE GM GSK HD HIG HON JNJ LLY LOW MBI MIR MMM MOT MRK MS MSFT NOK NRG NWA PEP PRU QQQQ RGC RIG RIMM RRI SHLD SNDK T TGT TWC TWX TXN UNG UPL UTX VZ WMT WOOF XOM YHOO

[Bill Cara note:

Asia-Pacific equity markets continue to be strong tonite.]

Shark - best wishes for your mother, you and your family! I lost my father many years ago to lung cancer and was in the same situation as you with my mother about five years ago - our prayers are with you!

Rob G

finally, a little good news from Hulbert (at least, for those with LT horizons):

http://tinyurl.com/6z46g3

"I have good and not-so-good news about a stock-market timing indicator with a good long-term record.
First, the good news: The last time it was as bullish as it is now was in late 1990, just before the bull market of the 1990s was about to take off. And the last time it was more bullish was in 1982, just as the great bull market of the 1980s was commencing.
Now for the not-so-good news: This indicator's greatest predictive power comes when forecasting the market's level four years' hence. It does not say how the market gets there from here. So the indicator's bullish posture currently does not guarantee that a bottom has been seen of the bear market that began a year ago.
What is this indicator?
It is a single number published each week by Value Line, Inc. (VALU:
Value Line Inc
News, chart, profile, more
Last: 34.36-1.06-2.99%
4:00pm 10/20/2008
Delayed quote data
Add to portfolio
Analyst
Create alert
Insider
Discuss
Financials
Sponsored by:
VALU 34.36, -1.06, -3.0%) in its flagship newsletter, the Value Line Investment Survey. This number represents the median of the projections made by Value Line's analysts of where the 1,700 widely-followed stocks they closely monitor will be trading in three to five years' time. Followers refer to this number as the VLMAP, which stands for Value Line's Median Appreciation Potential.
The VLMAP currently stands at 135, which means that the median Value Line analyst is projecting that the stocks he follows will be 135% higher in four years.
Though Value Line itself does not believe that market timers should place undue weight on VLMAP, it has not stopped other advisers from doing just that. Dan Seiver, for example, a visiting finance professor at San Diego State University and editor of an investment newsletter called the PAD System Report, bases his newsletter's market-timing model almost exclusively on the VLMAP.
Another eminent analyst who has recognized VLMAP's potential is Peter Bernstein, publisher of an institutional newsletter called Economics and Portfolio Strategy. Research he conducted in the 1980s and 1990s led him to conclude that the VLMAP has an excellent track record forecasting the stock market's level four years hence."

shark, God bless you and your mother.

2nd, I 2nd Bill's opinion. You're one of the finest people on this forum.

n2s- likewise..

http://bloomberg.com/apps/news?pid=20601109&sid=axsUMrc.liiE&refer=home

"saving" by America is used in this article as a curse word. it is in fact what's needed.

Wavesmash you asked why $2000 gold. I think the rationale is laid out in my 8.59 post, if you go to the article
RE Gold
http://tinyurl.com/6gvxq6
Minyanville Gold discussion plus two followup commentaries add to this discussion.
Basically, we won't have rising POG until we have inflation, which won[t happen til banks want to lend and people want to borrow again. a year away from now?

We are in deflation until the credit starts flowing again. By then we have so much new money printed we realize it is inflationary, and prices rise all over the place including gold.

Shark. Be in the moment. there will be many trading days.

Gold way up today, while the US$ index also was - reaching a level not seen since end May, '07!

Volume in stocks was low ..

Quasi,

Great point re PoG in USD vs PoG in other currencies.

Tbar,

Imo, your "symmetrical triangle" in PoG will only be technically be valid if this is really a higher low. It is a possibility, but that has not yet been proven from a techncal standpoint. For confirmation of a possible symmetricla triangle forming in gold, we need a close above the 18DMA and ideally above the 25 DMA (which I prefer). For the theory re symmetrical triangles, please visit the stochcharts.com chart school.

Anyways, I really hope you are right, honestly.

But still, I got that bearish longer term signal, albeit only in USD terms, and that has me really worried here. Mind you that this is a long term signal, so it tells me nothing about tomorrow or even next week. It only tells me that the longer term trend is now down.

1Bullseye,

Oh boy...that is a radical price target.

:-)

Fortunately, we are still too far from there, but could you please explain your thoughts re how you got there, and maybe put up a chart?

All I can suggest is that a FIB retracement is made from the low of Feb 2001 to the top o March 08, and the results are:

- 38,2% - 735 - done
- 50% - 643
- 61,8% - 552

Could we test 643?

- From a merely technical standpoint, yes, as a 50% retracement of an entire bull market before the next one starts is ok from a technical standpoint

- From a fundamental standpoint, it is really hard to believe.

Best,

Shark,

All the best.

Cheers!

Vadym Graifer at October 20, 2008 9:43
Thanks,I appreciate your experience and follow all of your posts.

Bill cara note at October 20, 2008 9:04
I missed seeing that where ever or whom ever it was.

maromatics at October 21, 2008 2:34
it looks like that 784 is about to be tested again,if it doesnt hold I'll watch for 756. Thanks for the info,I'll take a look. 643 would be awfull at this point as you say fundamentally it is difficult to understand.

JMO

After using RSI screens and then examining the charts, there was pretty good volume for most issues on 10/16 but yesterday 10/20 volumes were lower.

My guess is retest of the 10/16 low on lower volumes for a better entry point.

Do your own homework, your mileage may vary, objects may be closer...

FYI: I don't know if anyone is in entertainment stocks, but you should be aware of the strong possibility of an actor strike and accompanying difficulties.

My brother lives and works in so. Cal. for the industry and things are very slow due to capital flows (or lack thereof) and the talk of striking.

I wouldn't follow Carl Icahn into Lion's Gate for instance....or be a big believer in Disney...

"shark, God bless you and your mother.

2nd, I 2nd Bill's opinion. You're one of the finest people on this forum."

I agree wholeheartedly....
Shark, my very best wishes to your family and your collective health. Please take care.

2nd, you know how I feel. You're my brother I've never met. :>)

Bill has mentioned a few times, recently, the acquisition of certain stocks with an eye to building up a portfolio for the longer term (i.e. the next Bull market). Along these lines, let's not forget the boring parts of a balanced portfolio, if that's your particular philosophy. It's not only the equity asset-class that's been badly beaten up recently and might be presenting good prices.

In particular, I couldn't help but notice that Corporate Bond ETFs are getting a whack load of interest recently as they too try to find a bottom. Take a gander at LQD (High grade) and HYG (junk bonds). LQD yields around 6%, HYG around 12%.

Perhaps even more interesting, these two are natural hedges to Gold holdings. For e.g., LQD has a 3-year, -0.43 correlation with GLD.

I have no position in LQD or HYG but do have some GLD and ABX - hence my interest. Do your own DD please.

For those who follow ESLR:

FILES SUIT AGAINST BARCLAYS AND LEHMAN OVER LEHMAN BANKRUPTCY
- Suit states that Lehman Brothers did not have title to shares of Evergreen Solar's common stock previously loaned by the company to Lehman Brothers in July 2008 and is seeking their return
- Seeking to recover 30.9M loaned shares and is demanding 12.2M shares loaned by units of Lehman after the firm had declared bankruptcy immediately
- Firm has asked the Court to prevent further transfer of the shares held by Barclays

bsi87 and NYUgrad

RE: volume in the major indices

Looking at the day to day high volume during the week of Sept. 15-19, that is where I see much of the overhead sitting there that will keep the next rally in check.

2nd,

The important thing is not to avoid mistakes, but what we learn from them.

Cheers :-)

[Bill Cara note:

We learn only so much because we keep making mistakes -- too often the same ones. Changing one's behavior and early training is massively difficult. But, I agree; we must continue learning. In a similar refrain of the alcoholics; we are all students of the market.]