"Yesterday in North American markets, there was no volume to speak of, but there were positive signs early on. The Crude Oil ($WTIC) price jumped +$6.62/bbl (+10.4%) to 70.53. $GOLD lifted +$30.50/oz to 757.30. Equity prices and bond prices followed."

Ahhh, Bill....as a consumer of petroleum products, I'm not sure I consider it a positive when oil increases. :)

[Bill Cara note:

Excellent point. Depending on what hat you are wearing -- trader, consumer, taxpayer, etc -- you have a different perspective. But if oil prices were to stabilize at 70 for an indefinite period, and the volatility in $USD trading to stabilize, you as a consumer or trader or taxpayer could start to plan your year ahead. That's the problem with the capital markets today. People don't know from day to day where prices are headed. My point today, and recently, is that until they are more confident, traders will not take risk, consumers will defer spending and taxpayers will continue to express their displeasure at the people and organizations that caused the market disruption in the first place. Regarding oil, I think a $70 price would be a stable price that all parties could accept for now. Try to look at my commentary in that perspective. Thanks.]

solars not showing good strength this am. some grumblings about proposition 7 in california. I am ready to sell. but no stop order entered. this can also be a bit of fishing for stop losses by specialists. lack of selling volume so far pre-market.

MT steel is down about 18% in premarket after earnings. They plan to cut production globally by 30% in the fourth quarter.

Considering they make up around 10% of global production that may take out 3% of total global supply.

MT trading down at $26 after closing above $31 last night. US Steel - X is trading down a bit in sympathy.

I'll be continuing to watch this sector closely as it seems to be a good barometer of overall market momentum.

My eyes are also peeled on CSCO today which reports earnings after the bell.

Bill:

Further on your point...at what point would oil have to hold where it would neither: 1) tank the economy, nor 2)inhibit alternative energy development and consumption conservation?

Learned my lesson (don't let profits turn into losses)

...have stops in place on X, PBR, BC, DELL (paper profit 41%, 48%, 28%, 7%) since buying last week "when others were afraid." Thanks to Bill and the community for all the great commentary and discourse. Have a great day!

MCM

Remember, remember the 5th of November...

Good morning.

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

personally, i would wait to sell on strength...i just haven't seen it yet..

Those were some pretty impressive gains. Since I'm still in recovery mode, it's becoming obvious I desperately need a portfolio manager.

MCM - "when others were afraid."

I was thinking of those who couldn't buy at the time.

NYUGrad, FWIW I voted against Prop 7 and Prop 10. These were touted as promoting energy independence, but in the case of 7 it was flawed and would have hurt many small producers of alternative energy. As for 10, it was sponsored by T. Boone Pickens and would have disproportionately benefited natural gas as an alternative auto fuel.

Long term, their defeat is good for the future of alternative energy in California.

I wonder if those standing in line at the polls yesterday noticed the Dow and are now preparing to jump aboard in their exuberance.

Here's a good article on Props 7/10 in this mornings SF Chron:

http://www.sfgate.com/cgi-bin/article.cgi?f=/c/a/2008/11/04/MND813Q18V.DTL&tsp=1

thx number2son. i dont really follow prop 7 or 10. but it seems to me the small selloff in solars this am might be a short term event. most likely triggering stop losses for cheaper shares. looking for volume to tell me the story.

Missouri passed proposition C yesterday.

The measure would require utilities to spend at least 2 percent of sales on buying energy from renewable sources. The share of such energy that the utilities must buy would increase to 15 percent by 2021 with at least 2 percent from solar energy.

Two steps forward, one step back. I never was much of a dancer.

Does anyone know what the chances for another vote are? In addition, what kind of time line and/or special interests will be involved?

chick

Like you, I am in awe of gains like Bill's in this market. I should, and likely will, turn everything over to him. Whew!

NYUgrad,

When you say "looking for volume to tell me the story" is it a volume to price relationship that informs your decision? Is so would you explain the relationship and what you are looking for before you buy?

Thanks

Too bad I didn't buy those puts yesterday. The crowd must have been expecting a rally today so we get the opposite.

Rob.

tango6 - Yea, it seems as the business picks up customers, the blog traffic becomes lighter. I wonder if I were a customer I might learn faster than attempting to learn through blogging.

Call me "homeskool", or "numbskull"

[Bill Cara note:

I think the blog traffic has been reduced because (i) people are nervous, (ii) history is happening and they are watching to see the direction it's likely to take us, (iii) I have shown a propensity to let's say 'directness' with some people in my efforts to have the blog continue to evolve along the community lines which I had intended for it, (iv) I have become more serious now that I have a new and deep responsibility to clients, (v) the community knows that I have less time to respond, so they are writing less. It's the quality of the Discourse that's important to me, and just a couple days ago I remarked that I found it very high.]

Hopefully it will turn positive into the close and I'll buy the puts then.

If the EU cuts rates that will strengthen the dollar and sink everything else.

Or is that what the crowd thinks too?

Rob.

yaya,

specifically i saw some low ball trades premarket on sol and about 30k shares traded when i made the comment.

So even though the stock was down 9% premarket i wasnt panicked. I just felt that the prop 7 news was actually not that bad as the news media was saying it was for alt energy and i also thought the street was gaming investors to get shares on the cheap.

Now that the markets opened, SOL is trading wide and loose. $8.15, 7.95, 8.30, 8.00, etc. the bids and ask are all over the place.

I am not convinced solars are broken here. my entire solar watch list is down about 8-9% on decent volume. but then i look at the indices and they too are down.

Not looking to buy, as i made my bet before the election. 4,100 shares of SOL.

I like Regions Financial today (RF)

stopped out for small gains SLW YRI holding GNLB & UAUA

disclosure: selectively bearish.

VIX/VXN RSI 7 day running about 30. My guess is the market chops around thru the day. I'll look to add to the ETF shorts (SDS,EEV,FXP,etc) around 3pm with a buy stop above the 3pm price.

long sil right here

IYR as only sector so far broke down out of it's bear flag channel, - 5% in 1st 1/2 hr. says something is not right with commercial real estate. It should reasonably never have been run up this far in the first place.

GLD seems to have broken down, that would be a pattern filure & sign of short term weakness.

SLV is sill hanging on, creeping up the lower tine of a bullish pitchfork.
It should continue up to remain short term bullish, no room here for any retracement at all.

Confirms my view of SLV being bullish while GLD not, still know of no fundamental reason why.

2nd - perhaps the strength you were looking for to sell into came yesterday? just a thought.

Re: energy independence. I just read an excellent book by Robert Bryce, "Gusher of Lies--the Dangerous Delusions of 'Energy Independence'" which I highly recommend as a counterpoint to this latest unquestioned idea. Rather than count on alternative energy sources to replace oil in the immediate future, we should be following the example of China and form cooperative agreements with oil producers, all of which the Chinese have done without waging war. Obama seems to be another believer in energy independence, but if Bryce is right and that is not possible in the next twenty or thirty years, Obama will at least be well-positioned ideologically to seek cooperative agreements with producers rather than trying to militarily capture oil reserves like Cheney-Bush. This is not to deny that alternative energy could represent a good investment. I notice nuclear seems to be going up.

pappdjavul,

I believe Bill has commented that silver bottoms before gold because speculative money comes into silver first. Doesn't make much sense to me, but it seems to be happening.

SA

RF screens well. RSI touch high. Good luck.

sov also looking hopeful

NoV. 3 *DYODD*
Canaccord Research top picks based on the following criteria:

1. Down more than 50% from the peak;
2. have at least two years of cash or funding availability on hand;
3. cash flow positive, or about to be cash flow positive; and
4. are large and liquid.

Diversified:
Stantec Inc. (STN : TSX | NYSE : |
Energy – Oil and Gas, Exploration and Development:
EnCana Corp. (ECA : TSX | NYSE : |
Fairborne Energy Ltd. (FEL : TSX : |
Energy – Oil and Gas, Exploration and Production:
Suncor Energy Inc. (SU : TSX : |
Nexen Inc. (NXY : TSX : |
Energy Oilfield Services:
Trinidad Drilling Ltd. (TDG : TSX : |
Energy: Royalty Trusts
Baytex Energy (BTE.UN : TSX : |
Metals and Mining – Agriculture:
Potash Corp. (POT : TSX | NYSE |
Metals and Mining -- Base Metals:
HudBay Minerals (HBM : TSX : |
Quadra Mining Ltd. (QUA : TSX : |
FNX Mining Company Inc. (FNX : TSX : |
Metals and Mining -- Precious Metals and Minerals:
Kinross Gold Corporation (KGC : NYSE : | K : TSX : |
Yamana Gold Inc. (AUY : NYSE : | YRI : TSX : |
IAMGOLD Corp. (IAG : NYSE : | IMG : TSX : |
REITs and Real Estate:
Boardwalk REIT (BEI.UN : TSX : |
Transportation and Infrastructure Support:
Jazz Air Income Fund (JAZ.UN : TSX : |
Finning International (FTT : TSX : |
SMALLER-CAP TOP PICKS:
Industrial Growth – Infrastructure:
Aecon Group Inc. (ARE : TSX : |
Sustainability – Energy and Power Technologies:
Carmanah (CMH : TSX : |
Technology – Communications – Communications Technology:
Sandvine Corp. (SVC : TSX : |

Bill & others,

Bill has mentioned in his daily report that the rate cutting of ECB tomorrow ought to weaken the Euro against USD. However, since many are expecting this rate cut, could there be a possibility that this has already been priced in?

Thanks,

teamonfuego- i'm looking for the 1500 point squeeze that signals an end to reticence...

"militarily capture oil reserves like Cheney-Bush."

Yep, using smoke and mirrors. They still probably think we don't know this. Gotta admire the Chinese that much more...

Nuclear - I agree. Problem is it doesn't work well for automobiles and competes with natural gas. There's something coming eventually, especially if nat gas catches on for transportation, which is likely...IMO

Now there's talk about clean coal; just can't see that in my radar, I smell a rat. Bio-fuels smell good and that's about all I think about them.

Anybody know why CHK is on such a tear? +10%! No news?

I sold all my pm's and miners yesterday on the strength, but I'm nibbling on today's weakness.
Up a few points on GFI/GG/GSS.
Also have been riding along nicely on SNDK for the last few sessions.

I'm playing this as a day trader, take it when you can get it and get to cash for another round.

I'm still holding a few longs UW but they have come back a looonggg way.
Anyone want some Dell?

CP,
Yes you are right! (brave vs. no cash) I was fully loaded for the plunge and the only reason I had some cash to deploy for those trades was liquidating a few losers and "starting from scratch." Still licking my wounds, but thanks to the guidance on this board, and lessons learned, I WILL recover! Unfortunately, they were all pretty small positions, but the best I could do. The other lesson is have some investment cash for opportunities like we have seen!!
Regards,
MCM

yaya, a post followup. sol is back to $8.45 range. i strongly believe the low price of $7.63 was a stop loss that was fished out by specialists.

this is why i no longer use them. just on a piece of paper next to my desk.

Bill:

Now that Obama has won the election, do you think he will give us the real financial facts of the country? He will have the capability to blame Bush on how bad things really were and how the Bush administration hid things. This would also help him so that he will be able to say things have improved. Will this not also be bad for the market?

Thanks ....

[Bill Cara note:

Obama covered what was necessary in his campaign. Now that he has won the prize, the finger-pointing will be left to the Congress I think. Hopefully Barack recruits the best possible people for the job. If he is conscious of the pitfalls of conflict of interest, I'm sure there will be the right kind of change. We have to remain optimistic until we see the same-old, same-old. There are real issues, which can only be faced by discussing the list of talking points I published here a few weeks ago. There needs to be a New Economic Order, not just in name but in fact. He has the tools at hand to do that. It will be the people he hires and the people in Congress who do that under his executive management. The market will respond accordingly.]

long sovereign sov

CHK - favorable article @ Bloomberg today about afinity with Obama policies. Finally back to even on this one following an avg. down - like it for the long haul

The JPY (proxy FXY) popped out of it's recent downtrend & is now consolidating above the channel. Not good for equities if it continues up.

FXE (the EUR) may have made a fakeout move up, it looks stretched.

SLV doing well so far.

SLW will be held back if equities go down (torn between the shepherd & the flock? ;-) ).

Craig - solar - What size panels should I order for my roof? I currently have a heatpump system and a 48kva electrical service.

chiken,

you are an early adaptor huh? i currently live in a condo so no solar for me yet. would love to be able to disconnect from pse&g for good.

Sharky,

I think your buddy ABK is building momentum

mcm - ain't that the truth! Lesson learned: Never go all-in when knives have yet to bounce a few times.

Luggie - Yea, I know about the Obama nat-gas thing but thought was already priced in cause it makes sense. Guess it wasn't re-cycled news after-all... Still waiting for green on my CHK (small position).

Google pulls out of search advertising deal w/Yahoo.

Boy, did they take advantage of Yang's ego on that one!

CP: I don't know, but I do know systems are sized to your usage (and location/conditions), just like a standard service. Heat pumps are great!

I'm waiting to see what kind of incentives will be coming.

I have seen a few TV programs where some (with major buckeros) have invested in a larger array and are selling power back into the grid...IOW, a net sellable gain over their usage.
I'm sure that is a positive for payback and future offsets or profits.

After reading Bill's comment on too soon for the long haul I took some profits on XOM and lightened up on GG. Sold DGP out totally and will wait on the sidelines until year end tax selling passes.

Short TM at $82.30

NYUgrad - I'd love to go solar! Thought about it deeply enough to perform some calculations and checked pricing on panels, batteries, inverters, etc. One study I performed indicates just under 3000 sq miles of PV are necessary to replace current US elec. capacity.

RIG - no room for disappointing those "analysts"!

Yang's still at YHOO? Amazing!

TED Spread down to 2.06. Interesting to note that this was the resistance high during earlier crises over the past year (Aug 07 and Mar 08).

Question regarding options pricing.

I've read that when VIX is high, time is right to write puts and calls since you get a bigger premium. And also that when VIX is high, it is unfavourable to buy options because as the VIX comes down, premium comes down making options possibly lose fast/more than it gains from underlying share price.

So my question is, VIX only seems to go up when markets do badly, i.e. measures fear, but when markets are rocketing, VIX drops. So assuming markets are trading in a range, would it be more profitable to buy puts than to buy calls? Since you buy puts into strength, when VIX is low and you pay less premium, and sell into weakness when VIX is high and you get more premium.

If this is the case, calls seem like a bit of a crapshoot as you buy into weakness and pay premium, and if market does well, you've got an uphill battle to make outsized gains to make up for declining volatility premium...

Thanks for any insight!

gold getting smacked down again here.

if we cant hold the $750 line i suspect we will see $660 in short order. gold should have been jumping stronger off the recent moves w/ the USD lower, but its taking violent stabs downwards. i dont understand this at all.

wonder if the ECB rate cuts are having some effect right here...

I have been waiting on gold to go down to $700 and buy DGP under $12. It got close this week, but rallied up for no reason other than the Euro jumping up 2.5% in one day. I hope that the rate cuts in England/Europe are big enough to make the US$ jump back where it was and bring gold back under $700. I think then the bulls can jump on board for the upwards rise in gold.

I own ABX,SLW,WGW,RBY,GG

I think that the miners might not fall with gold, so I will just hold on to them.

What is the total area of all the roofs on homes in the southwest I wonder? It's multiple millions X an average of something like 1200 Sq. ft. or so. Add Texas, Florida, New Mexico and you could do way more using existing space.

I fly frequently and into lots of cities in California/Arizona and there are miles of unused space covering homes that could use the extra shade/insulation and the power.

2008 will be remembered as historic! economically and politically...congratulations on electing a new president..Many problems to solve..Can't wait to see his new team.

AGRIUM (AGU)...UP $2.64 CDN

third quater results...

Earned $367 mill..$2.31 a share up from $ 51 mill or 38 cents a year earlier.Analysts were expecting $1.93 a share

revenue jumped to $ 3.1 billion from $ 989 mill.Analysts were expecting $2.22 billion

The company widens it outlook range for the second half to a range of $ 3.30 to $ 4.00 a share

dr.cosa - PM Miners doing well today IMO, considering the general action...

JesseSLC - re silver botttoming before gold

Thanks, didn't know that.
Do not always have time to read through the blog, though I do appreciate Mr. Cara's shall se say "reasoned bullishness" as a counterweight to the "dastardly debt debacle" scenario I currently see as primary.

Silver is not something I normally trade or have invested in as such, so have not studied the silver market especially before.
Though I do like the metal for jewelry work, etc.
My position in silver, besides SLW, is by the way only some assorted Swedish semi-antique stuff.

A measured move down for GLD would be to about 69.80, which would be what I am looking for - a reasonable retest of the recent lows in an ongoing bottoming / consolidation process.
This is not a trade recommendation by the way.

Craig - If these numbers were available it sure would help. I wonder why they aren't...

EWV buy stop limit 94.10/94.20 limit

thanks to poster who posted TM short.

trimming SSRI position.

SLV is on the verge of breaking down out of the bullish pitchfork, but is holding up extremely well considering how GLD & USO are dropping.

SLW is also holding up well, could go down to around 4.18 and still be short term bullish.

But if equities move down into the middle of next week, they may be sold off also in the end.

Anyone else think we trade lower until Friday's unemployment numbers, which everyone expects will be terrible? It's looking that way to me this morning.

stopped out of SLW at 4.14.

I get the feeling there's something going on that we're not privy to, but I cannot react to that which is unknown.

CP, you said "I'm still in recovery mode"
Me too! At least it feels like its getting better. Down for the year, 31%! but up from 10/15. Sold small position in CTSH this am in the money, holding ADBE, IBKR. On the fence about GG, down 6%-in way too early but, small pos, willing to hold OR willing to take hit. On the fence about HGU, up 17% small holding but thinking about selling though greed whispers wait, wait. Too heavy in the jr. pms, all under water but willing to hold. Thanks to this blog, I now research before I buy AND sell. Watching, waiting.
Comments welcomed.
Thanks to all who post.
from beautiful north puget sound

End of Month effect (EOM)

http://www.cxoadvisory.com/blog/external/blog7-20-06/

Can someone confirm that this is the Interactive brokers site that you are using and Bill has referenced

http://tinyurl.com/5pjuyq
I want to open an account with them.

[Bill Cara note:

www.interactivebrokers.com

I see from your IP address, you are American. Canadians who set up accounts with IB Canada actually only have their residence and account opening data verified and accepted in Canada. The trading platform is the same as IB US/Global. The problem for my company is that until I can obtain regulatory exemption from the industry rules and regulations, I cannot professionally advise Cdn accounts. To get approval, I require discretionary relief from 13 different jurisdictions. Getting SEC approval was relatively quick and painless, but the Cdn system is one that protects the industry and the regional politicians and not the client. I argued for a national regulator while giving testimony to the Senate Banking Committee hearings in 1998. One of the Senators scoffed at me, saying his province would never accept it. It will happen. This morning, the Stockbrokers' Club in Canada released the results of a poll of their members, and the results of over 100 people were over 94% in favor of an SEC counterpart in Canada.]

out of sil and sov small profit. today looking down.

bsi - EWV - what do you xpect, +5~8%?

College given grant for solar panel project
By J. Staton Hudson
A $51,750 grant from Pacific Power’s Blue Sky renewable energy program was awarded to Whitman recently to support the college’s proposed photo-voltaic solar array. The $180,000 project would place 20 solar panels above Jewett hall and be capable of supplying the college with 23 KW of electricity.

According to geology and environmental studies professor Bob Carson, the system would be capable of supplying about eight average American houses with electricity and would make a substantial dent in Whitman’s energy costs.

The college would save approximately $1600 per year at current electricity rates, according to Jed Schwendiman, associate to the president. However, factoring in a typical rate increase of about five percent every year, this investment could mean even bigger savings for the college in the future. Over the next five years, said Schwendiman, the college could expect to save around $18,000.

The system would also serve as an educational resource for Whitman students. The solar array would be linked to a monitoring station in the Hall of Science atrium next to the current weather, seismic and stream flow station. Students would be able to monitor the output of the system and track energy savings.

Jump-starting the campaign to bring the solar array to Whitman is the student organization, Campus Climate Challenge. Headed by co-presidents Bailey Arend and Gary Wang, the organization hopes to make the college carbon-neutral.

“Our goal is to make sure that there are no net carbon emissions from the college,” said Wang, “and to mobilize the surrounding community to take action on global warming. It’s a lofty goal but we’ve made substantial progress in the last few years.”

According to Wang, Campus Climate Challenge jumped on-board with the solar array project because it fit in with their goals for the college.

“The solar array project is important because it represents a tangible example of alternative energy for the college,” said Wang. “From a public relations standpoint, it proves that Whitman College is among the leaders regionally and nationally in terms of its commitment to environmental responsibility and sustainable development.”

In the past two years, the organization has raised over $28, 000 from parents and faculty through two letter-writing campaigns. Part of this money went to purchasing carbon off-sets in order to reduce the college’s carbon contribution; the other went towards funding the solar array.

Wang and Arend also helped Whitman write the grant application to the Pacific Power Blue Sky renewable energy program, resulting in the $51, 750 grant.

The Blue Sky program offered by Pacific Power allows consumers to use clean, wind energy instead of traditional energy off the grid. Energy from the Blue Sky program is more expensive than regular energy; however, Pacific Power invests this money in alternative energy projects around the area. This year, Pacific Power offered $100, 000 in grants to fund renewable energy projects in Washington state.

Whitman received a substantial portion of this grant money because of its commitment to alternative energy demonstrated by the proposed solar panel array. The photo-voltaic solar panels Whitman would be using convert sunlight into energy by freeing loose electrons from silicon atoms housed in the panels. These electrons flow from the solar cells to a load or battery, where the energy is stored. About 10-15 percent of the sunlight that strikes the solar panels is converted into energy.

The photo-voltaire solar array is currently scheduled to be put up this summer.

*********************************************
A little quick math says 20 panels for eight homes is 2.5 panels at a cost of $22,500 per home on this scale w/o factoring in grants etc.

bsi87 - Good doc, thank you.

proudPapa- re options pricing.

It does seem unreasonable at first glance that sharp moves down will increase the option "volatility", whereas sharp moves up seem to decrease it, at least after a period of time.

My theory as to why is that lots of funds and other investors engage in selling covered calls to add some income, which drives down the option premium, as the sellers take over.

Relatively few probably engage in selling covered puts on a regular basis, that would likely be only some hedge funds that are short and more advanced private investors.

Perhaps Mr. Cara could confirm or deny this idea.

Also buying calls at bottoms when the premium is high is often not so great an idea, unless you go deeply ITM where there is less premium, or else finance them by selling naked puts.

Buying calls is best after long flat consolidations, when premium is low & - of course - just before a bull move starts.

re:EWV

10 day ATR is 13+. 26 pts minimum. Resistance at 130.

If it gets overbought, EWV:IEF approaching rsi 70 on 7 day, I'll cut it loose.

Chickenpookie,

miners not holding up well,
they are falling along w/ the market, and the GDX is down somewhat more than the SP.

gold as i had said before seemed like it would fall hard if it did fall through $750. that price point was a critical area of support imho. its failed and if gold moves back towards $700, do you really think it will hold that line even with the USD falilng? imagine what will happen once the euro zone cuts rates and announces new weakness and problems.

it seems that the relationship hasnt changed at all w/ gold stocks falling along w/ the market not as moved by gold itself.

we talk about future problems and weakness and gold continues to do the opposite of the "these government interventions will be inflationary to gold" notions. gold is in a nasty downtrend period. it could always break out and explode as it did yesterday but 1 day a new trend does not make.

until something concrete appears to suggest gold moving up strong, and shares in any fashion following im not buying back in.

i dont like having to speak ill of gold but reality has dawned on me that so much of what we have been fed for the past few years has been so wrong and continues to be wrong.

so people talking about $700 being a good point to jump in may be missing whats actually happening as gold continues to carve out a down trend. the Kitco/321gold articles continue to spout the same nonsense that gold will explode soon. they have been saying it for months as gold has fallen and failed to breach its mar/08 high.

if all these government interventions will be inflationary and make gold run up, why hasnt it happened yet? in fact if these things take time, why does gold continue to move down week to week despite some USD weakness occuring?

gold could move up $170 from here and only be back to where it was about 1.5 months ago. would htat move be indicative of the inflationary effects of all this money occuring or just a retracement of golds past move? not only did most of us and most of the gold community get the recent events totally wrong, they may make a second critical error is patting themselves on the back to soon should gold return to $920 in short order, thinking it validates their inflation theory when we have no real proof its not just a retracement of recent moves.

disclosure:

long miners partial position long term.
short gold the metal partial position short term.

Reference alternative energies

Last summer, the local Chicago PBS television station had a piece on a neighborhood house supported by wind energy. The owner had a small cylinder type turbine on his roof which was not obtrusive with the local enviornment. It resulted in a surplus and I think he sells some of the generated electricity back to the power company. Memory says the cost was 20-30K.

Don't have link, just from memory. Will check later if anyone interested.

craig,

that is prob cheaper than buying a hybrid car, and i bet it would save consumers more as most car purchases involve a trade in which 99% loses money for the driver. and as tech gets better the roi should only get better for consumers i hope.

de.cosa - "should gold return to $920 in short order"

If this were to occur out of some stroke of luck, I'd like to sell in preparation for a re-load! It sure would help my underwater 50% gold position...

I'm humbled, your observations certainly have a ring of sanity.

Currently my GG is up ever-so-slightly on the day...

This market inflicts serious question to my personal sanity, so please don't hold any pea-brained ideas I might express against me...

My old target for USO is still in play it seems -

the 2006 low @ 42.56.

that's -20% down from here.

let's hope that holds.

Chickenpookie,

not at all, im just giving out what im thinking,
and how my thoughts on things have changed somewhat.

i have probally been repeating myself, thought its just that im seeing hte same patterns in many of the people who post here about gold and using concepts to support their ideas that have been proven wrong. even more so w/ gold mining stocks.

ive been actively writing letters to newsletter writers just to make my case about how i felt they got things wrong the past while, its not that i think they care what some random perosn has to say, and its to throw things in their face,
its simply a case of asking the question:

your calls for gold and gold stocks were wrong, utterly wrong in the current credit crisis. but you call for a rise in gold using the same logic that was proven wrong. it says to me no lessons have been learnt here.

yes im sure things will be inflationary at some point, but most writers have been clamouring about inflation for a few years and it hasnt resulted in a holdable gain in the POG, instead its been a few breif spikes upward before a dramatic fall downward. that is not indicative of runaway inflation any more than oil at $147 was indicative of peak oil. it may happen eventually but those moves were but a memory now that we have been cut down to size.

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

long gold for the long term yes,
but i dont fool myself anymore with fantasies of hyper inflation sending gold and gold shares dramatically higher anymore than teh broad makret moves which are in control of hte shares at hte moment. does anyone really believe gold shares will run super high while the market runs down should gold trade to $950?

this sounds stupid but I think there's a high probability of a crash. My bat radar is tingling.

full disclosure: selectively bearish but not near bearish enough.

If DJIA trades below 9319, that means yesterday's "rally" is all given back.

We'll see.

Sold GS $80 puts at $3.65 that I bought at $3.35. Sold SRS at $120 purchased at 119 avg. Still holding on to SLW puts and TM puts and looking to add more TM puts. I believe that company is very overvalued.

RE: Anybody know why CHK is on such a tear? +10%! No news?

Good question...I stopped at $25 for a quick profit...small # of shares.

I wonder along with the GG action today what is going on?

bsi87:

I thought it was "spidey sense" that tingled?

pappdjavul,

Hope you're wrong on USO. That would not bode well for TSX.

Glad I got stopped out of WAG & CNR last week. Seems like the hangover from last night's party is kicking in.

I think once an actual recovery happens, we will see some upward mobility in the General. Right now GE is just hobbling around...

Bats/spiders, whatever. LOL

there goes 9319. So much for that.

Now I have to wait for some capitulation plays.

Chesapeake Energy Corp. (CHK:$24.85,00$1.90,008.28%) reported adjusted earnings results for the third quarter ended September 30, 2008. The company said that it made $486 million, or 85 cents a share, for the quarter ended Sept. 30, compared with $346.3 million, or 72 cents per share, a year ago. The company said adjusted third-quarter earnings rose 47% on rising natural gas production. The company posted a gain of $2.8 billion from hedges on gas, oil and interest rates bringing the company's total profit to $3.3 billion, or $5.61 per share.

"The college would save approximately $1600 per year at current electricity rates, according to Jed Schwendiman, associate to the president. However, factoring in a typical rate increase of about five percent every year, this investment could mean even bigger savings for the college in the future. Over the next five years, said Schwendiman, the college could expect to save around $18,000."

Wouldn't it be possible to buy an $180k energy hedge and maybe outperform those savings? I parked my gas-guzzler a year ago and bought a small used car (2x better mileage) which since has paid for itself. It's my "free" car. I don't typically drive more than 6k mi./yr. but managed 10k this past year. The mice just love their new home in my expensive behemoth which cost me more than those solar panels...

The current set-up for gold and silver, especially the shares, has never been better in years...

You can see that at the moment, the commercials have dramatically cut their short positions and the large traders their long positions to levels where significant market bottoms have previously taken place.

The set-up for silver is even more bullish. In fact, it's as bullish it's been for five years or more.

We have also seen some very nice moves in some of the silver companies such as Silver Wheaton (NYSE:SLW) and First Majestic (TSE:FR) with some of them up almost 100% from their lows of last week, which bodes well.

Seasonally, October is a time to sell gold and this year was no exception. But late October, early November is a good time to buy back, as you will usually get some kind of rally into the year end and often into Spring.

Since 2007, gold and silver have outperformed gold and silver stocks. In other words, you'd have been better off owning the metal. But the ratio of the metals to the miners has reached extreme levels. In fact, the most extreme levels since 2000-01, at the very bottom of the market. This extremity suggests we could be entering a period when stocks will outperform the metals.

http://tinyurl.com/56e343

Dr C

if POG gains $100 from here, I'll be even, but that's OK. It's just a % of the portfolio. I'll buy or sell to increase/decrease the ratio but I will always have some. Silver too.

Chickenpookie,

I know of a company making aesthetically appealing building integrated Volta voltaic roofing tiles for flat or low slope roofing. They are called Open energy and www.openenergycorp.com.

They are worth a look and besides, I believe they install solar communities...with no upfront cost to the residential customer and they have the best efficiency and guarantees in the industry. I cannot say what the cost if any would be to a single roof customer however...please look them up...thanks.

bsi87

good call on SDS/TWM yesterday...sure paying off today.

I have 800 for resistance and 640 for support on gold. full disclosure: have some SSRI/SIL.

Pookie an blogglob:

I think a company out of MD (Edison Solar?) does the same.

Prieur didn't post today??

Sure! But you know, you're dealing with people and your money.....and you have to keep an eye on hedges, they sometimes go against you.
Say all your neighbors don't buy a hedge but instead invest and they drive the cost of energy so low it wipes out your hedge?

On the other hand the sun comes up everyday, no muss, no fuss. The panels last for longer than your house, so it's essentially no muss, no fuss for the duration, on something that you can trust.
If the sun doesn't come up then we have a lot bigger things to worry about.

CHK up on rumor of buyout by BP (article link to Bloomberg)
http://tinyurl.com/55wo6r

Rumor earlier today (now discredited) re:YHOO buyout by MSFT makes for an interesting daily chart, but still up 5%.

Sorry, I messed up the link.
CHK buyout rumor
http://tinyurl.com/6omoj4

re:SDS/TWM

thanks. I use VIX/VXN/IEF vs indices, stocks,ETF's to measure risk/overbought/oversold.

Oct 27/28, the INDU:VIX ratio was approaching RSI 7 day of 30. It was a time to get long but many posters were urging caution. Yesterday the INDU:IEF was already approaching RSI 7 day of 70. Risk was increasing so I started selling long positions and started opening short positions.
Also many indices/etfs were bumping against 50 DEMA's.

FWIW.

Let me preface what I'm about to say that in no way am I attempting to "corner" Bill Cara, or get in a discussion regarding the interpretation of his words, nor compare what he has put forth free of charge for all his readers.

This is nothing but a simple request for clarification.

In today's comments, Bill Cara said this:

"Although I believe it was important in recent weeks to start looking at the glass as being half full, it is not yet the time to buy with a view to holding for the long-term."

Bill, are you less bullish than you were 1 month ago ? Not trying to read anything into your comments so I'm seeking further clarification.

Are you saying this is more of a short term trader's market for the interim period ?

The reason I ask this is because people like Grym have already taken action earlier today to sell certain stocks based on this commentary; which of course is his own decision.

TIA

[Bill Cara note:

Excellent question. I only wish I could have gotten to it 4 to 6 hours earlier.

At tops and bottoms of long-term market cycles, there is usually significantly more volatility. Enhanced volatility simply means you you are facing greater risk and the best way to manage risk is by shortening the time horizon on your trades and tighten your stops. You start thinking hours, days and weeks instead of weeks, months and years. For those who use stops, you may need to go to 4% rather than 8% to 12%, for instance. Many of us here refer to it as the need to day trade, but what we mean by that is the need we have to control risk. So at what I believe is the top of a market cycle, when I start to see the glass as half-empty, I become a quicker seller than buyer because I think there is a greater risk of subsequent lower highs and lower lows. The opposite is at what I believe a market cycle low where I become a quicker buyer than seller. But, I am first and foremost a trader, so I am both a buyer and a seller. I call it the dance. At tops and bottoms of the long-cycle I'm doing the quick-step whether I want to or not. The rest of the time I am doing a fox trot. In market terms, at the bottom I continue to write puts versus at the top where I would be writing calls. I tend to write because when markets are going through cycle tops and bottoms, when risk is greatest, you need to sell that risk to somebody else. As the cyclic phase becomes more pronounced bullish, I would consider buying calls and when it becomes pronounced bearish, I would consider buying puts. Why, because when wealth is clearly being built or destroyed, that's the time I need to take more risk in my decisions. It's at times at tops and bottoms when I have to reduce the risk that I am faced with. I'm happy that using my commentary to help him think through the shifting markets early today that Grym sold his long positions, ie, if he is an active trader (I wouldn't know). I sensed that gains would be given back today and I was hoping that this community would consider tighter stops if they didn't want to sell. After I wrote my piece, the US equity market plunged between -5.1% and -5.5%, so my analysis was right. I said that gold was taking a dumper at 7am and the $USD was rallying, which at these times often means money is coming back into the safe-haven of the US. I could see the European market not doing well, and the European banks right across the region reporting terrible losses, which would shake people's confidence. Capital that flees risk also comes out of energy and precious metals, and I just felt it was ready to happen. I saw a million person crowd in tears last night and said, these are proud people; they are going to bring money home to help get America going again. I hadn't seen any volume in markets that is needed to excite the Bull, and I talked about that in terms of ok we had a burst of higher prices but where's the beef (Bull)? Capitalization grows in Bull markets, but capitalization is affected by price times volume, and I said that volume was missing, so I thought the growth was temporary. In my morning squawk box call with the traders I said that this volatility could add +15% to a stock (or industry group) one day and take it away the next. I don't see that kind of thing happen when volume is very high. At those times, a small rally or pull-back usually is sustained because the traders are committed. You know the expression: in for a dime in for a dollar? Today there's no commitment to put up that dollar. There's no commitment these days to much of anything (which is not the definition of a Bear), so getting back to risk management, after a bit of a rally, if I stay long, I'm admitting to myself that I want to hold the risk that smart people won't. I don't do that. I hope that explains my approach. I was a little hard on you a few days back, but really whenever I see somebody who is well-intentioned and plain-spoken, I welcome the chance to talk. I just need the time.]

nemo

RE: Prieur

As a rule, I think he only posts here on Monday mornings.

Dr. Cosa,

I share your frustration with the precious metal market. Some thoughts I have had lately are based on the concepts 2nd_Ave shares here often. First, is to look at your own emotions and realize that many others are feeling the same thing, and that to some extent that is exactly what the market wants us to feel. On Oct. 27 when the market bottomed, I was so scared and discouraged that there was no way I could put my last little bit of available cash to work for fear that my PM investments would never see the light of day. Market beat me that day, that was the best time to buy. I have no thousand percent gains that I can claim for trading that bottom. Just lost opportunity and defeat from my own fear emotion.

I keep thinking back to Bill’s call to sell Goldcorp in march (I believe) of this year when it was trading in the low 40’s. For months, it looked as if that call was questionable as GG peaked in July around 52. Obviously, today we can see what a great call that was. My point is that at that time Bill assessed the market conditions and determined that GG was overvalued and current market conditions suggested weakness in GG sometime in the future. He, as well as all of us, watched for 4 or 5 months until his idea came to fruition. Had we shorted GG in March that time period would have been agonizing. Today, we see things in the market that suggest inflation is coming. The money supply is expanding dramatically and this is always inflationary. I believe that many of the things the “gold bugs” claim are likely to happen, just not this week or next. This inflationary event will take time to unfold, maybe 6 months, year or two, nobody really knows. But logically, when the data is analyzed, there is a strong indication that inflation is coming and the precious metal sector will do well. Picking the exact day, week or month of the turn may be more difficult.
I think the market term for folks like us is “trapped bulls”. I don’t know this for sure, but I suspect that the vicious bear is not going to let us trapped bulls get away so easily with a monster rally in 2-4 weeks that let us all get out at break even and never have to worry again about our PM investments. Rather, I have been trying to prepare myself psychologically for a long road to recovery. I’ve never seen a bear like the current PM/commodity market. I understand now why a down market is called a bear and how brutal it can be. I’ve heard/read that a bear market will devour bulls until none are left standing, and then the new bull can begin. I am not sure what lies ahead from this bear and as much as I want some relief I believe it would be foolish on my part to think it will be coming soon. The extreme frustration you are experiencing now is exactly what the bear wants, and is probably willing to wait until it eats us up. I hope to emerge someday at the other end of the tunnel and suspect that I will be much wiser and more cautious with regards to my investments in the future.

For me, today, the only thing that makes sense is to be patient, excruciating as that may be.

I just bought some GG puts with a 20 strike.

Betting on dollar strength.

Rob.

dr. cosa: As a fellow Canadian I have a somewhat different perspective on the price of gold. It is performing in line with my expectations, which is to preserve purchasing power in the long run. I consider short term movements as "noise", and of no significance to me, other than possible short term trading opportunities.

For instance, two years ago gold was trading for about $550 in Canadian dollars. A year ago it was at about $750. Now it is at about $850, up about 55% from two years ago. Plug $gold:$cdw into Stockcharts weekly charts and tell me what you don't like about that chart.

Now, if my junior miners' charts looked like that I would be one happy camper ;-)

ToddinFL,

Bill's comment this AM was just reinforcement of what I was already 90% decided on. My biggest doubt has to do with the ability of the US to move the short term treasuries to long term. I can't believe anyone will be willing to loan us at any price.

I realize this is an economy issue, but I certainly would not be quick to do business with someone whose trust factor is so low as ours right now.

The Chinese and Japanese have a wide selection of better places to put their money. It may be they'll choose stock in US companies. (When I see that I'll be willing to do the same.) In the mean time I don't feel the need to rush into any stocks.

If I am wrong, it is MY own decision and no fault of Bill's recent comment or previous bullish call. I'm too old to go for even the best long term bargains unless they are paying a great dividend while on the comeback trail.

I have a bunch of gains taken early this year to balance against for tax purposes.

just got back from lunch meeting. who pressed the sell button?

VT which is the Vanguard Total World Market ETF is showing a bearish engulfing pattern.

Full disclosure:selectively bearish.

Grym said:

"I can't believe anyone will be willing to loan us at any price."

IMO, there will be those who loan to us, but the risk premium (interest rates) will be considerably higher for the longer term horizons.

"longer TIME horizons."

CAT - Always wanted to own this one and finally pulled the trigger today @ ~41.60, new project in Algeria using primarily Cat equip, plue Obama infrastructure comments - oh well we'll see, but the yield ~4& eases the pain. Missed prime accumulation zone though. Happy Trading

Luggie,

what indicator(s) did u use to make your decision re CAT?

ran a scan of bear ETF's

EEV, SIJ, and SKF look the most promising for the 3PM buy. EWV looks good as well.

full disclosure: long EEV and EWV.

calculating the 10 day ATR and will use that * 5% to determine the buy stop above the 3PM price.

HI bsi - Not too much science for me - way off recent highs, good p/e, yield, earnings estimates my management support good 2009 performance, but did look at rsi's & S&p reports. Happy Trading

re:CAT

GL with that.

ToddinFL

Would like to ask you something
qt.cara[at]gmail[dot]com

With the 10 year U.S. Treasury bond yield going from 3.91% on Tue. morning down to ~3.72 this morning the 30 year mortgage (no points) went down from 6.375% to 6.0% today. HT

Is tck still worth purchasing at this point?

For risk takers WGW moving up since 10/31.
Disclosure: Only 0.19 to go and I break even.

TCK. A good time to re-load? Also maybe QUA.to?

bsi. These have had quite a run, how do you determine probability the selloff will continue and therefore this afternoon a good entry?

Photo
I'm no technical guy, but this is quite a retracement. I'm looking hard at a little this afternoon. although, low is under $11 not that long ago.

wavesmash - re USO,

I use fibs a lot for major / long term targets.

When something doing a retracement goes past about the 70% mark, it will usually go all the way and do 100%.
You just don't have any idea for "when" from the fibs alone.
So I've had this target for it since it gapped down below 64 in Oct.
This is not rocket science, just one tool.

bsi87 - crash?

I see the markets going down into the middle of next week - how far down I have no idea.
1. the middle of the week before opex is often a shakeout/turnaround time.
2 there is the 15/11 big meeting to save the world.

bsi: RE your shorts comment yesterday. Is this next week coming early?

Sounds like Venezuela has said it will take control of Crystallex KRY

UPDATE 1-Venezuela says to control Crystallex gold mine
Wed Nov 5, 2008 1:53pm EST

http://www.reuters.com/article/marketsNews/idUSN0531130420081105

(Adds ministry comment, background)

CARACAS, Nov 5 (Reuters) - Venezuela will take over Canadian miner Crystallex's (KRY.TO: Quote, Profile, Research, Stock Buzz) Las Cristinas gold project, one of Latin America's largest, the latest move by President Hugo Chavez to bring key industries into the hands of the state.

Venezuela's mining ministry said the government aimed to start up the mine next year.

"This mine will be recovered and will be operated under state administration," the ministry said in a statement.

Crystallex, which operates the project under a contract, has waited for years for permission to begin mining the Las Cristinas deposit, located in a huge forest reserve in southeastern Venezuela.

Socialist Chavez has nationalized large swaths of Venezuela's economy, including energy, telecoms and steel companies. (Reporting by Frank Jack Daniel; Editing by Christian Wiessner)

Grym - Perhaps if foreign companies want to invest in US, they're likely to buy entire companies as opposed to stock. Currently they're waiting for the auction to start, planning what they'll do once they've bought, and sizing up the possibility of friction from the Obama administration.

WC,

10 day ATR for EEV,SIJ,and SKF are 24,13,and 19. If they had achieved moves of that size in the AM, I would be less inclined to put a trade on. I do want to look at the RSI before I do put the buy stop on.

Keep in mind the VIX/VXN/IEF show that indices were approaching or near overbought levels yesterday.

If I'd been a freaking genius, I'd loaded the wagon then.

re:crash

Well, let's see. The Talking Heads got all jazzed yesterday when the mkts rallied 300. Today, they're very casual about it. The big boys rallied the markets about the time IRA/end of month investments are made. I could see some sort of a bottom next week.

We'll know in the fullness of time.

I certainly hope that CAD vs. Yen investors have appropriate stops in.

It looks like the bear market is still with us, and that the CAD rebound is taking a break today.

Sad end to the KRY story.

If CAD goes down will HGU benefit?

KRY

I'd wondered how Chavez might seek to replace the declining oil revenues and now it turns out the prognostications of some posts from months ago comes to pass.

WGW/WGI

Share repurchase plan announced. Sweet! I certainly felt it had been excessively beaten up in recent weeks, but kept getting proven wrong when I thought it couldn't go lower. Nice to read some promising news and see some positive price movement!

Re: Crash

If we finish at this level, the closing candle will be baerish. Besides, the chart look very lame today. BUT - Potential BOE & ECB rate cut over-night. CSCO reports after the close. It could go either way.

Just my 2-cent.

shark_attack
KRY is sad but it's demise is fitting given the lunatic running the country. Despots and corrupt country's always get their pound of flesh, OPM and technical know how are hijacked regularily theses days.

JesseSLC- when trading with a LT horizon my frame of mind is very different than it is when day trading...

when i was in grade school, my Dad insisted on taking the family camping every summer, and always to a different part of the US...what I recall best were the long stretches of highway between landmarks, and then the abrupt changes in elevation and landscape as we approached our destinations...that, to me, is how LT targets are reached-> when you start falling asleep, the topography changes, and the sights you've been waiting for unfold all too fast...the secret (if there is one) is to enjoy the long stretches, which I eventually learned to do, letting my mind wander while watching the sky, the clouds, the farms, the small towns...as an adult, I now enjoy the drives more than the destinations...

thx for the comments guys re gold.

right now i see gold is basing around the $740 level. theres a bull and a bear case.

after price drops gold's basing action has led to dramatic price falls, typically early in the morning.

but, considering that gold had a very sudden move up the past few days the POG is well above mondays price, and the shares are holding up well here into the market close compared to the broad market.

because a sea change in the ratio of miners vs. POG may be in the making, these occurances while rare the last while may be a marker of better days ahead for the goldies. but its too short term to really say.

rate cuts tomorow by the ECB/BOE causing a dump in gold will be paradoxical IMHO considering people were largely expecting them. the USD is at least not carving out new highs and i dont get the feeling rate cuts aborad will boost the USD much.

if gold is poised to move higher, theres nothing in the tea-leaves saying so just yet. but the shares moving higher against the market would mark the shift in my current bearish thinking.

good luck,

NBD-T

I haven't fared well by this stock after buying some a couple of months ago, (go figure!). I guess after behaving like it was recession-proof or already price-adjusted, the economic worries have taken their toll on it. Crazy situation resulting - 26% dividend yield! One would have to assume a dividend cut is in the near future, but this may be one helluva value purchase at some point. They could slash the dividend by 75% and it would still be a nice payout.

Re: HGU.TO

I assumed that a CAD decline along with a collapse with the oil price would yield returns in the gold sector, but this has not been the case.

I may be too early on my assessment as of yet, and that gold would have to definitively stand out from the commodities trade and currency moves. Hedge funds are clinging to the oil trade in the hopes of a global re-flation, but they're just creating a slick as they sink under the waves.

It remains an open question whether gold prices will remain firm, considering the low yield environment and the propensity of the Yen to sell off, and yet we're seeing bullion spot price declines in a seriously impaired credit market.

This whole rally seemed suspicious...of course the V-bottom makes sense as a relief rally, but when I see CHRW (trucking) rallying as we rocket into a severe economic downturn, I suspect that Mr Moral Hazard and HBB team have used the US Taxpayers dollars to buy the market--thus giving McCain a chance---the turnaround "maverick" didn't quite work out, nor did the use of our tax money. Low volumes, and not much "supply"--nobody wanted to sell their stocks at this near capitulation stage. Makes it easy for low volume funds to drive market up, me thinks.

out of SOL earlier at 7.36. 2 cent loss. dont like the action. humbling experience.

EEV, SIJ, FXP, EWV were my PM picks.

Here's a rookie question for anyone:

assuming it can be done, does it make sense to short the SSO as opposed to buying the SDS.

just looking at the price of each option.

SLV didn't make it past 10.50, and has now moved sideways outside the bullish pitchfork, which is no longer in play.
It would need to get past 11 at least to look bullish for real.

Don't think it can move up when GLD & everything else are going down, best to hope for is it just holds up decently. Same for SLW.

CP,

I saw a Chinese businessman interviewed this spring who said his company has been buying just under 5% ownership in a large number of US businesses. Anything less than 5% does not require the same reporting and he wanted to avoid this.

This is an option I consider to be a much better deal now than back then, Why loan money even at a double digit rate if you can buy a large slice of a company with good growth prospects at a discount?

Our bonds will only be tradable for profit if we get a massive deflationary cycle and they already have a bunch.

Just to get a bit more confusing (I'm in unknown territory here, so any help is appreciated.) would a lack of debt buyers cause a deflationary situation in the US?

Anyone trading options on the ultrashort & ultralong ETFs - are the spreads always this high betw ask & bid ($1 plus)?

FLR - capitulating? Earning report after market today.

re:GS

Gotta look at it again but I see 84 as being attractive buying point. No positions. As always, do your own homework.

c

Marubozu

8^}>

Recently went to pick up a few groceries at the grocer's and they would not accept credit cards and were cash only for the day. No biggie, unless they're cash poor and can't get letters of credit for shipping groceries.

So I looked up the company and found it was bought out, and the owner which took the grocer private has a curious trend chart counter to the fall in stocks:

http://tinyurl.com/6a6evw

bsi87
GS under 70 may be good price

re:GS

Nope.

FLR - Oops, typo. sorry. Earning tomorrow after close.

re:GS

It's in a symmetrical triangle with support around 87-88. If that breaks significantly (with volume), it'd open GS to 60 bucks.

On the other hand, Nov opts expiration is 105, Dec is 100.

Whichever of you guys are buying all those USD's, I wish you'd stop the nonsense.

bsi87
WFC is raiging 10B
wait for C/JPM/GS
they all are dogs

manx, re: NBD-T

Had a quick look at their quarterly statement, and they've really only got 8 million in cash left, though they talk about $181 million liquididy from bank lines and unutilized debt facilities. However, there's already plenty of the debt facilities and bank lines being used, and there are appear to be some covenants on the debt that may not be avoided.

Rough environment for builders and material suppliers.

bottom line:

A $0.10 dividend costs them about $14 million. They've got $9 million in cash.

re:financials

I'm in no rush to buy. And I'd have to see capitulation or an offer like Warren's.

I find it interesting that while gold has taken a tumble, other precious metals have fared much worse: palladium from $450 in June to $200, platinum from $2,200 in May to $860 (now only a little more than $100 over gold) and rhodium from $10,000 an oz in fewer than six months to a paltry $1200.

Market doesn't like CSCO results so far - trading down to $17

http://tinyurl.com/6fdcqr

Hope for the goldies> Professor Lance Lewis

Make that CSCO $16

While gold has one foot in commodities, it has another foot in the currency market. This explains why other PM's have fallen so much more. I'm thinking gold has fallen as far as it has for such reasons as profit taking, hedge fund selling, strong USD, etc., you might be able to think of more... I can barely think anymore. Regardless, If I'd have thought things were going to these extremes I'd have bought later (like maybe now), so when the pendulum swings the opposite direction (perhaps in our lifetime), I'm anticipating an equal but opposite reaction of sorts.

Then there's the other group thinking where the run-up was overblown....

Of 208 Morningstar sub-industry groups, only 3 were positive today:

medical practitioners 6.2%
computer wholesalers 1.3%
drug delivery 0.1%

The three biggest losers were:

Steel & iron -12.7%
General contractors -13.1%
Hotel/Motel REIT's -13.7%

4:35PM price download

I'll be watching the Far East mkts tonite. I think the contagion starts there and goes west.

KRY's tears, Rusoro's grin -

Rusoro is up 18%. They have a JV with Venezuela's gov't mining co. (holder of las Cristinas concession) for gold exploration and development, and are the only remaining international gold miner operating in VZ.

Rusoro now has 6M oz. M&I, and is producing gold. With KRY's 20M oz. and GRZ's 15M, and possibly much more in Bolivar state (GRZ prez once guessed 15M more) Rusoro could be on the path towards senior senior status.

Goldfields owns 36%, and (dislosure) I own somewhat less.

Dr. Cosa: There is an almost perfect negative correlation between the moves in gold and in $USD. So instead of trying to guess the secret forces behind moves in gold, why not look at the more obvious forces behind moves in $USD? This is what Bill has been trying to tell us for several months now in his Week in Review: “You cannot trade commodities that are priced in $USD without studying forex movement. The Forex market is a multi-trillion dollar marketplace every day, which dwarfs the size of the stock and bond markets.”

The move in $USD during the October crisis made perfect sense -- $USD and Yen are “debt” currencies as people were borrowing in these currencies to finance purchases of stocks all over the world. Once the risk has increased significantly in the marketplace, hedge funds started deleveraging by selling their assets and returning their debt denominated in $USD and Yen – hence the spike up in both currencies. In the next month or two, as the world markets stage a rebound rally, the exact opposite of the previous move should happen – people will be selling $USD and Yen to buy indervalued currencies and stocks. Hence, gold should move up in the next month or two. As Bill said, investors will check back on the global economy in Jan/Feb, and if they see that the recent liquidity injections have not helped the economy, then stocks will collapse to new lows. I think gold will collapse in that case as well, since the deflationary mood will be in the air. However, after the world economy starts rebounding in a year or two, the impact of the liquidity injections will have to manifest itself, and gold WILL move to new highs, regardless of whether the deflationary mood will or will not be present for the duration of 2009.

Any comments on the above $USD/gold dynamics are very welcome.

As for the short-term trading, as tempting as it was to buy something right before the close today, I decided against it since I already have too many long positions as it is. A slightly safer alternative is to place buy stop limit orders for tomorrow, which I just did for ESLR with stop at $4.49 and limit at $4.59, to replace the shares I sold yesterday at $5.50. If ESLR gaps up tomorrow above my limit price and continues to move higher, I won't be too upset, as I still hold many ESLR shares.

The sale of WGW yesterday after hours at $1.10 seems to have been a good decision, as WGW has not even reached $1.10 today. I still have many WGW shares, which I will be selling is it moves up toward $2. If WGW drops to $0.65, I'll buy again.

For those who have cash on hand, however, today's profit-taking is a great buying opportunity. As 2nd_ave said, the plunge to new lows MAY start once everyone is onboard for this rally. Since most investors have not been onboard so far, today's selloff is a chance for them to jump in, which they will most likely do. So I don't think that this is the start of a plunge to new lows and instead is a great buying opportunity.

I suppose Jim Willie was right in saying 'somebody' is looking at a north/south split in the Euro. But looking here are the usual suspects, there may be a bond market failure or a currency crisis in the offing:

http://jessescrossroadscafe.blogspot.com/2008/11/top-20-credit-default-swaps-exposure.html

Thanks, yvrapx, for posting that most useful list this morning of fallen, cashed up, liquid stocks.

Re: USD vs. $Gold

I am not sure if the inverse correlation is due primarily to fundamentals. Its due to the reduced role that gold has as a monetary instrument. So most of the leveraged a capital in use as a bet in the gold sector probably has a hedge in $US or Yen. But nobody notices that the Yen is defacto pegged to the $US, if you take into account the ¥/€ cross.

But let's say for a moment that bullion was priced to reflect the total hard currency in the world at any given time.(actual printed currency, not electronic notional figures.) We would be saying exactly the same thing about it, regardless of whether the price was $100k/oz. or $730/oz. It would make little difference. My guess would be that the monetary fixing of gold bullion would be in the area of $1500/oz.

I think it would take very many people by surprise at the actual amount of printed currency out there in day to day use and that this amount is declining daily, because letters of credit are unobtainable. With this macro decline, we are seeing lower prices in the bullion, and demand for dollars. What hedge funds are trading makes little difference.

Just the same, bullion has strongly outperformed commodities in general, simply because its pricing is related to currencies and currency trends.

I just hope the whole oil complex takes its brylcream with it as it it sinks beneath the waves. They treated oil as if it were money and it serves them right. It would then prove my ass backwards investment in a gold junior spot-on, even though I haven't made any money.

F6

The only concession i walk away with today is almost everything is down. misery loves company.

hope tomorrow is a better trading day :)

Some days ago I asked the question what if the need for issuing new debts is outpacing the demand from abroad for the same. Brad Setser in his recent post is discussing the latest developments and what we can expect from foreign central banks who are financing the main chunk of us debts. After having read this my conclusion and worry is that Hank and his friends have to scare people into treasuries (which means that we might not see rising stock markets until the end of the year).

Here us a little excerpt from Brad's blog:
Just today the Treasury announced it expected to issue – on net – an additional $500b this quarter. That is a lot by any measure.
I would be surprised, though, if it is all bought by central banks. Or even if most of the new Treasury will be absorbed by central banks. For the first time in a long time, I suspect Americans — not the world’s central banks — will be the main source of new lending to the Treasury.

Volumes today are even more unimpressive than the last 4-5 days. Bear trap?

Mmmmhhhh...might just be Limbaugh, but...

Was in a car whose owner was listening to the show. Limbaugh claims the head of the committee that oversees 401k program is claiming the US cannot afford to forego the tax revenue in these sheltered accounts and that he wants to do away with 401k, having the government take them over as part of Social Security. Individuals would be allowed to save up to 5% a year in a tax sheltered account. Has anybody heard this?

KRY:
The ministery claims that they were taken out of context in the interview and the story was misinformed. All the minister stated was that they would be supervising all mining efforts in Venezeula. That was already a given with KRY. That has always been the plan. Even Richard Marshall from KRY stated today that he has not been informed of any changes in the current permit plans. The comment was that KRY would get information before the press did. But anything is possible. Only time will tell. Other than a press release from KRY everyones comments are only amature conjecture; mine included.

Venezuela - is there REALLY country risk? Depends who it is, and when you ask! LOL

If you're Canadian, BIG country risk. Ask KRY or GRZ (or GFI or HL for that matter). But, if you're RUSSIAN, NO problem!

Still, there WAS a small chance of the CIA toppling Chavez!

UNTIL the US elected a "socialist" President.

LOL

great article regarding gold lease rates and a potential default by the COMEX.

who is willing to bet that this will actually happen at the end of november? we have been given multiple scenarios for gold price explosions such as interest rate drops, EU rate differentials, announcement of loan and bailout programs, war in iran, war in pakistan, war in isreal, war in georgia....

call me a grouch but this is a bunch of junk until we see some meat on those bones.

the only bright spot was gold miners not getting clobbered along w/ the market today. Goldcorp had a nice move. barrick not badge either. a few weeks of this and a full blown disconnect may just happen. but not if gold falls from here.

Bill,

i, ii, iii, iv, v.

My priority would be: iv)"I have become more serious now that I have a new and deep responsibility to clients"

I have the greatest of respect for those who place client interests on top of the priorities list.

dr.cosa - Perhaps that article was very well timed for today's action. I don't buy or sell any of the hype now either, just the price when/if it moves my way to a magnitude I'm comfortable with.

"Just to get a bit more confusing (I'm in unknown territory here, so any help is appreciated.) would a lack of debt buyers cause a deflationary situation in the US?"

I think it would cause higher interest rates to see if you can get someone to buy the debt. If there's no one to buy debt, you can't finance it.

If you can't finance debt, you can't spend it. So deflationary, yes; and if people don't have the willingness/confidence to buy your debt, I wouldn't think it would bode well for the currency.

nemo - Limbaugh - And the Republican primary begins anew; same old song and dance without skipping a beat...

Gold is very dependent on what the EU does tomorrow. If they cut rates, it automatically strengthens the dollar which will put all commodities under pressure.

We could easily see dollar strength and commodity weakness until the EU is done cutting rates.

Rob.

currency/debt/deflation... everyone wants USD, therefore deflation for USD. Until they don't.

A lack of debt buyers would cause the government to either immediately downsize or raise taxes to make up the shortfall.

Otherwise, everyone getting a government check wouldn't get one or they'd get less.

It would be deflationary for any service the government provides unless they could raise taxes to compensate. But doing that would further slice into people's discretionary spending.

It seems to me it would be a less deflationary situation and would cause a less severe recession if government would just adjust spending based on how many bonds they can sell.

Then there's always the wildcard of the JPM France desk or the BAC England desk buying the bonds and making it look like foreigners are buying them.

Rob.

Jock,
I basically wrote off my KRY investment, so anything good that happens would be a surprise bonus. With the upcoming elections in Venezuela I believe the 24th of this month, Hugo will say anything to get what he wants. It could be that KRY has been informed of this diversion off the record and that is why they have nothing to say. This could be the storm before the calm; meaning the permit issuance after the election. It is interesting that KRY has a shareholder meeting the 29th to issue more options for the hiring of new personnel as well as "retaining" current management and board members. A no permit release sure would put a damper on that. I do feel sorry for the members at Agoracom that have put their life saving on the line with KRY. They live and breath this stock several times intra day. Although I don't want to lose my investment, it is not life altering in the sense that I won't sleep at night or my lifestyle will change. That will not be the case for several members at Agoracom. Life's folly!

Fed Hires Ex-Bear Stearns Risk Manager to Oversee U.S. Bank Safety:

Is this a joke?

http://tinyurl.com/65qsnb

nemo,

What you heard was correct. The house has the plan (Guaranteed Retirement Account - aka GRA) on their website and you can download it here:

http://www.house.gov/ed_workforce/testimony/2008-10-07-TeresaGhilarducci.pdf

I do not think anyone has adopted the plan in terms of proposed legislation or if it will be, but there are likely people debating its merits.

Just imagine what happens to the stock market if that source of demand - periodic 401k purchases - evaporates and the government forces everyone to sell what they own and transfer it to them.

Not likely to happen.

Nikkei 225 has a gap between 8699 and 8576 and another between 7741 and 6994.

10 day ATR is 560 pts. About hit that in the first 30 minutes of trading.

full disclosure: long EWV

Hang Seng has a gap between 13280 and 12702. Might be another between 11133 and 10700.

Full disclosure: Long FXP/EEV

Pookster:

The right tells you what the left won't, and the left will tell you what the right won't. I asked a specific question regarding a point of information. It's either true or it's not true. That's all I care about, that's what I want to know.

"Fed Hires Ex-Bear Stearns Risk Manager to Oversee U.S. Bank Safety"

I guess Fedge Fund didn't read the audit memo before the interview.

http://tinyurl.com/3gavva (PDF)
http://tinyurl.com/639ebo (HTM)

"146 Source: TM's credit meeting memorandum with Bear Stearns dated March 2007, states: "We also asked how helpful the counterparty collateral process was for informing the price verification process.Kan said the collateral process does not tend to lead to changes in marks for P/L purposes - suggestingit was not helpful - but Mike Alix [Chief Risk Officer, Bear Stearns] said it could be helpful not sure if the mortgage guys actually gave a straight answer)."

This is almost better than the Enron emails...

http://www.enronemail.com/

"Prior to Bear Stearns' approval as a CSE in November 2005, OCIE found thatBear Stearns did not periodically evaluate its VaR models,110 nor did it timelyupdate inputs to its VaR models. Further, OCIE found that Bear Stearns usedoutdated models that were more than ten years old to value mortgagederivatives and had limited documentation on how the models worked.111 As aresult, Bear Stearns' daily VaR amounts could have been based on obsolete data. It was critically imperative for Bear Stearns' risk managers to review mortgage models because its primary business dealt with buying and selling mortgage-backed securities"

Chart of Bear Stearns.

http://tinyurl.com/59twny

Looks like their Basel II implementation didn't go very well. Implementation was supposed to happen Dec 2006...

"The Basel Committee on Banking Supervision (BCBS) has announced that it is to have a rethink on some aspects of the Basel II regulation following the Bear Stearns collapse, in particular its "Sound Practices for Managing Liquidity in Banking Organizations" guidelines."

http://tinyurl.com/5qjoyo

It is amazing to think that these organizations could have possibly gone for much longer like nothing was happening, had these regulatory requirements not been implemented and their counterparties not stopped the musical chairs game.

One night you have a bunch of subprime that is worth something towards your regulatory requirements and makes you money. The next night it's not worth anything.

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

" Merrill Lynch seized $850 million worth of the underlying collateral but only was able to auction $100 million of them. The incident sparked concern of contagion as Bear Stearns might be forced to liquidate its CDOs, prompting a mark-down of similar assets in other portfolios."

"Before becoming Bear Stearns' chief risk officer in 2006, Alix was the bank's global head of credit risk management from 1996 to 2006. Before that, he was credit officer and vice president at Merrill Lynch & Co."

http://tinyurl.com/5jd6k4

bsi- I have been interested in the ATR, largely due to your references. Is this easy to access on a public site for specific stocks, or do you find it through one of your trading platforms?

Kinda' sucks Bill back in business. Gets lonely around here :(

[Bill Cara note:

I'll be around every day. Btw, I understand that Pres-elect Barack Obama may appoint Lawrence Summers as his Treasury Secretary. Summers is a brilliant economist who comes from a family of brilliant economists. I got hooked on econ, like many of you, by the study of Samuelson Econ 101. Samuelson and Summers' father are brothers -- just a name change (like I did). Summers while in his early 40's was Clinton's last Treasury Secretary. If he is given the job here -- and rids the Admin of the Goldman Sachs team -- then he's got my unqualified support.]

Nemo:
Re: 401k Program

The House Education and Labor Committee Chairman George Miller (D-CA) held a hearing entitled, "The Impact of the Financial Crisis on Workers' Retirement Security."

2181 Rayburn House Office Building
Tuesday October 7, 2008
Teresa Ghilarducci
Irene and Bernard L. Schwartz Professor of Economic Policy Analysis at
The New School for Social Research Department of Economics
79 Fifth Avenue NY, NY 10003
ghilardt@newschool.edu
212-229-5901 extension #2

The proposal is linked here:

http://tinyurl.com/626azp

re:ATR

I use all free stuff. I use stockcharts.com and bigcharts.com.

Go to Stockcharts.com. Use Sharpcharts. In the lower portion labelled "Indicators", u'll find it in a drop down about 3/4 down. Change the Parameter to 7 to match up with Bill/Korvus. Hit "Update" button. RSI will be in upper left corner. 15 min delay, no biggie.

U can read up on it in Elder but it captures the volatility of a stock's moves. Use it all the time to determine position size and stops.

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

GL

[Bill Cara note:

The stuff I learn here. Thanks!]

The role of VaR in LTCM collapse.

http://tinyurl.com/5efm29

The Big Picture figures it was the SEC and not Basel rules that did Bear et al in... by trying to do them a favour to avoid Basel rules.

"You read that right -- the events of the past year are not a mere accident, but are the results of a conscious and willful SEC decision to allow these firms to legally violate existing net capital rules that, in the past 30 years, had limited broker dealers debt-to-net capital ratio to 12-to-1.

Instead, the 2004 exemption -- given only to 5 firms -- allowed them to lever up 30 and even 40 to 1.

Who were the five that received this special exemption? You won't be surprised to learn that they were Goldman, Merrill, Lehman, Bear Stearns, and Morgan Stanley.

As Mr. Pickard points out that "The proof is in the pudding — three of the five broker-dealers have blown up."

http://tinyurl.com/4njef6

Aren't we at 5/5 now?

re:TM

good call on the short. down 8.47% time of this post.

Wow sharkie. Hope you got out of Ambak! Those mortgage guys don't give straight answers...

Wonder how this affects their debt?

Ratings cut that is...

Yeah I never hold stock overnight and was therefore unaffacted byt the ambac disaster. Too bad I was counting on this one to turn into a rocket.

David- what makes following your trades fascinating are the truly bold moves you've made...it's one thing to watch someone like Vad maneuver deftly into and out of positions, it's another to watch a real life Bond stand at the edge of the abyss (to borrow a term from Twiggs' latest) and bet it all on his instincts...don't worry, i'm not trying to assign cinematic qualities to your behavior, just noting that maybe 1 or 2 in a hundred have the ability to play your hand...

along those lines, i have a few thoughts:

(a) keeping in mind it's never the abstract 'market' we trade against (it's always people just like us), and also with the caveat of an indeterminate time horizon (i think we'll know when we look back), i would be betting on buyers at these levels...now that october statements are out, i'm hearing colleagues throw out 40-50% numbers when referring to their losses-> IMO, not the time to be selling..

(b) you have the ability to detach yourself and either deliberate or experiment at the extremes of exuberance and despair; it's unusual to see emotional restraint (or detachment) at the extremes...as i've pointed out, i don't run across many people like you...i have to go back to my high school and college days to even come up with examples-> one of them, however, was a younger brother who was able to use adversity to great advantage, as I believe you will also...of all the people I follow on this blog, you have the greatest potential (IMO) to succeed as a trader...

shark,

It did turn into a rocket.

http://tinyurl.com/6gdh5a

...speaking of which, the (media) headlines we all laugh about make sense in their own way-> they're simply the collective waxing and waning of investor concerns, which have their own rhythm...

Yang's now openminded about a Microsoft Deal.

shark- why is it that the majority of fund managers fail to beat the benchmark? even if we assume they're idiots (which is clearly not the case), why is it they fail to beat the dart board?

..that, in a nutshell, is why trading is the ultimate challenge...

'Thanks, yvrapx, for posting that most useful list this morning of fallen, cashed up, liquid stocks.'
Very welcome Jock, figured someone would find them of some use.

..the other question i would ask is: how many traders have made enough to retire?

Interesting concept about headlines 2nd... I'm sure there's some useless data mining analysis that could be made out of them (and some program traders that are using it.)

Buy the rumor, sell on news.

For those kind of trades, the one with the fastest internet connection to their news provider wins.

I remember a co-worker of mine telling me that he worked for a company that appeared to do just that - release PR targeted towards the share price. The Fed does it... called jawboning.

According to Google News, "Doom" was encountered in 12,000 articles just last month, which is 2% of total of all news on google.

http://tinyurl.com/6mgmp8

"Gloom" was around 6% last month of all time total.

50% of all the news for Obama came in the last month.

2% of total "Change" came in the last month vs all time.

2% was also the figure for total "Bull" and "Bear" keywords, who appear to be in a tie right now (with Bull being pinned to the mat.)

11% of all articles written about the Fed were done last month.

Now that's a lot of unwanted PR....

Japanese stock market has fallen 70% since 1990
If we decline 70% from peak of 2007
It will give DOW 4000 and it may take 10 year and we may go no where during this time
Anything is possible?

wavesmash- fast rejoinder...glad to see "gloom" outweigned "doom" (if i read you correctly) 3:1...

outweighed..

A large population can survive a global economic crisis?

http://tinyurl.com/5khyea

Japan is less than half the population of the US and less than 5% the size.

Japan PM gives them 3 years to recover. So US will recover in 1/2 that time? Hope so... :)

http://japanjapan.blogspot.com/

I missed that Japan announced a bailout on Halloween of $325 billion... about half of what the Fed announced.

I'm beginning to think things are much worse than we know, but yesterday's rally is really throwing me off.

Charts don't look too bad to me... well, they're pretty awful but last couple of weeks looks ok?

http://tinyurl.com/6qvtdq

I think ABK may have some fight left in it? Next week will probably be a deciding factor for a lot of charts.

"
Irving Kahn, the oldest living value investor, experienced the great depression of 1930s as an adult. What does he think about the current financial crisis? He is buying the beaten down bond insurers and a few healthcare stocks during the third quarter. These are the details.

Irving Kahn buys Ambac Financial Group Inc., sells Autoliv Inc., CNA Financial Corp., MAXXAM Inc during the 3-months ended 09/30/2008, according to the most recent filings of his investment company, Kahn Brothers & Company Inc.. Irving Kahn owns 57 stocks with a total value of $411 million. These are the details of the buys and sells."

http://tinyurl.com/5vap6m

"I'm beginning to think things are much worse than we know, but yesterday's rally is really throwing me off." (CP)
Nah, action today was all low volume after multiple good up days. Looks like typical profit taking mixed in with a bit more deleveraging. None of the RSI signals are flashing sell on my 19 holdings - I ain't getting shaken out until they do. Action overnight in Asia looks scary but they were up last night and generally follow Europe/Americas anyway. What's the worst that can happen? A retest of the lows again? :)

Farmers in India commiting suicide when expensive GM crops fail and associated loans threaten loss of farm.

http://tinyurl.com/5eljx2

this is an interesting news on gold, finally they can buy quality gold , hopefully better than retail prices

http://tinyurl.com/5c53es

Mackinaw - A retest of lows means more delay and additional economic damage, we need to continue up from here, not fall. The strong USD/JPY have a choke hold on the economy, hope it doesn't bite into the food chain too much.

If we're anticipating a European rate cut isn't priced in, the USD/JPY remaining high won't lower Euro-inflation... They need to create demand for euros, not destroy.

First KRY, then GRZ end up krying?

Otto, the british banker/blogger who lives in S. America and specializes on juniors expects GRZ to be given "an offer they can't refuse" and for their "las Brisas" 10-15M oz. deposit also to end up in the Rusoro-CVG joint venture.

http://tinyurl.com/6rr72u

[Bill Cara note:

Do you recall my words of wizdom (other than get out of these stocks)? I wrote that the foreign operators in Venezuela ought to merge their properties at their own terms and to sell the new entity to the Russians (or the majors in an open auction). Then leave before the tears start flowing. If you are ever uncomfortable with a financial situation, then sell. It's my first, second and third rule of trading. These operators refused to see the writing on the wall because they were in control of the treasury. The SEC ought to look into the personal trading of company directors and closely related parties. I stopped talking about this one a long time ago. Agora.com followers would continue to appeal to me to write positive stories. What a joke.]

Morgan Stanley says, "buy,buy,buy"

"We have now come full circle: our market timing indicators are giving us a full house buy signal," said the statement. "Each of the four indicators – valuation, capitulation, risk, fundamentals – tells us to buy."

http://tinyurl.com/6fmzv7

bsi - i'll cash in on TM puts in the morning IF (and that's a big IF) it crashes due to earnings...

bsi- thanks for that ATR info. I will take a look.

Boy it's early here in Connecticut. Sombody gimme a Lunesta!

2nd, last night you wrote :

"shark- why is it that the majority of fund managers fail to beat the benchmark? even if we assume they're idiots (which is clearly not the case), why is it they fail to beat the dart board?

Posted by: 2nd_ave at November 5, 2008 10:20 PM"

Even if they're NOT idiots....Well some of them are actual idiots, in other cases, not being an idiot does not immunize people from making bad investment decisions. There is also the possibility that mthey are mis-managing enough money sufficient to nullify any advantage they might have had. Each day I can often find one or two good profitable stocks. But I can't buy 2 billion worth, right? So by definition a lot of the potential advantage of being a human with choices disappears.

What I do know for certain is, it's not a random walk, that some investors dramatically and consistently beat the benchmarks, and that just about everything "people who think they know" think they know about stocks is wrong.

Finally, do not discount my personbal experience with professional fund mangaers. Not idiots, I agree with that point, these people have been cocooned in a world of buy-and-hold, a game of cooling people's retirement assets in predictable ways so that the true Gods of Wall Street can profit from them, drinking the corporate Kool Aid to the point where, in my experience, these people more closely resemble a cadre of privileged amateurs than they do the professional class they hold themselves out to the public as being.

What was your point? That the averages can't be beaten? Because they can.

Shiva, look at the date.

http://tinyurl.com/6x2jlj

Under Pressure: chart update.

Here's one:

Lebanon banned derivatives:

http://tinyurl.com/6qk9as

imo, given the economics Lebanon is late to the derivatives trade, and showing all the signs of having captilated to the very same economic.

'capitulated'

BOE cuts 150 basis pts.

hmmm.

bsi,

did they cut while their markets were open or closed?

European mkts are open till noon EST I believe.

thanks. i am still groggy :)

Good morning.

Here are your Cara 100 Ratings Changes:

WFMI - Upgraded to Hold @ Jefferies & Co.

CEO - Downgraded to Neutral @ Credit Suisse

BOE cut may have saved us a couple more hundred points down today. Asia news was ugly!

good luck to everyone today

European markets in moon-shot mode since 6:15am. US Futures rising fasssstttt.

Full disclosure: selectively bearish

"moon-shot mode"

Let's look at that, shall we?

All of them are still red.

http://finance.yahoo.com/intlindices?e=europe

Hmmm....keeping my eye on the ultras. They aren't saying moon shot, quite the opposite so far.

bsi87

If you're stance is "selectively bearish", does that then mean that you're also 'predominantly bullish', as it relates to the broader market picture ?

bsi87,

http://www.bloomberg.com/markets/stocks/wei.html

Take your pick of the index and look at interday: Dax, FTSE100, swiss, whatever.

FTSE was down 114 pts in first 30 minutes. Let's see how they close.

They'll be green at the close.

When we start the party (or refill the punchbowl) we worry about running out of punch....deflation. We know where it leads, but we drink none-the-less.

From CT's Daily: "A more instructive analogy is between inflation and alcoholism. When the alcoholic starts drinking, the good effects come first; the bad effects only come the next morning when he wakes up with a hangover — and often cannot resist easing the hangover by taking "the hair of the dog that bit him".

~ Milton Friedman: Free To Choose

Hair of the dog anyone?

ToddinFL,

No, I'd say I'm predominantly neutral. VIX/VXN gotta git high again, $NAA50R has to drop, u know...people puking up positions, then I'd get interested in getting long.

oh man, the hangover for that rate cut is going to hurt.

Mervyn King
Through the Looking Glass: Reform of the International Institutions

http://tinyurl.com/592s4j

"Failure to reform the international institutions will condemn them to irrelevance and
obscurity. We are at that point. If this generation fails, then the work of those who were “present at the creation” will have been undone. It is our duty to re-create the
institutional framework that we inherited.

It will not be easy. But in case like Alice you are tempted to think that, “There’s no use
trying; one can’t believe impossible things”, remember the Queen’s reply: “Why,
sometimes I’ve believed as many as six impossible things before breakfast”.

I think he got that speech idea from Warren Buffett. :)

http://tinyurl.com/6etghh

"He compared money managers who promise double-digit returns to the queen in “Alice in Wonderland,” who proclaimed, “Why, sometimes I've believed as many as six impossible things before breakfast.” Buffett added,“Beware the glib helper who fills your head with fantasies while he fills his pockets with fees.”

Mervyn turned down a raise this year.

Doom beat Gloom last Jan. :)

"We're doomed by miserable Mervyn"
http://tinyurl.com/5hx2ud

"But surely it is the job of our Bank chief, Mervyn King, to RAISE spirits and stop people talking us into a recession — not make us all feel worse and add to insecurity.

When the economy slows down in the United States it is common for their central bank to cut taxes and pay for it with extra borrowing.

From the Right-wing President Reagan through to the Right-wing President George W. Bush, it seems to be the practical way of getting out of a downturn.

They pull out all the stops to avoid talking themselves into a slump.

But our Mervyn seems to take the opposite approach — and with everyone feeling things are going to get very much worse it is hardly surprising that we are at our least cheery for years. "

Doom and Gloom. Time for Change. :)

I didn't know The Fed could cut taxes? Impossible things you learn before breakfast...

Aren't ECB/BoE rate cuts going to strengthen $USD and work against our markets?
What happens when we add our employment #'s to that?

Depends on whether London is playing catchup with other markets or is leading.

Everything is a balance...

I think today will be Do You Yahoo? day?

Bill's 11/6 post and chat are available.

Bill,

This is what is great about your site:

• You write your commentary and help me solidify my thinking on a specific decision.
• ToddinFL is moved to ask for a clarification.
• Your detailed thought path provides a model for future situations including variables in scenarios.

For the past forty years I have done little trading (to keep my commission costs low) and would sell only if a company's fundamentals deteriorated. I have never been a believer in buy and hold as a substitute for judgment. More active trading is the only thing which makes sense in volatile times like these. Long term additions will come in time.

I am inclined to think in macro terms (my advertising background?) and we can see a globally, universal distrust apparent toward governments, financial agents and official data and pronouncements. We must be more alert and agile than ever and it may be so for some time to come.

I have written to several sources asking the same question, "What will happen if foreigners do not want to buy anymore US debt?" I have not received any direct answers, but am beginning to see the same question in a variety of articles.

Brad Tottle, Raymond James, "...those countries who have historically been large purchasers of our debt are facing problems of their own. If the big foreign central banks have to take a more defensive posture at home, it means lower reserves to invest abroad." (11-3-08)

Bill Fleckenstein, Contrarian Chronicals "I can't see why foreigners would fund a couple of trillion dollars in spending in our currency, given our recent behavior." (11-3-08)

James Jubak, MSNBC, "Global Economy Depends on China" (11-4-08) The article points out China's domestic economic needs call for most of its investment for the immediate future.

I have never had a course in economics, but it seems to me this lack of foreign "propping up" would be deflationary in the US with a strengthening of the dollar and an increase in saving. In this case in may "trickle up" from individuals (of necessity) to government spending. Lower income means fewer tax dollars for congress to play with. (Lobbyists may need to find real jobs!)

AES has suggested, Americans rather than the world's central banks, may be the main source of lending to the treasury. If so, I think it would be a major shift in group thinking and could force a national change which politicians have been ignoring — the switch from a credit to an asset economy. Savings invested at home instead of relying on the largesse of others.

Did everyone around here bail on UXG?

It cratered to 38 cents but bounced to around 70 cents. I have been pointing out that the price action recently suggested a move and sure enough yesterday of all days it went for a moon shot, touching $1.30 before closing at an even buck.

I have been selling into strength on the way up but still have some more to trade away. I am finally in the green again on this stock after having been down more than 50%.

Looks like second chance on TCK. Those Dec 10 puts touched 2.25 yesterday. May go instead for
the Dec 7.50 puts.