Bill Cara’s Blog for Jun 28, 2011 [See Post-Close report]

CTA Trading Desk Morning Report

[7:00am ET] Good morning.

The news is full of the Greek Tragedy, the failure of the Greek government to prudently manage its affairs, opting to take on more debt than its neighbors, without the necessary results; but, nowhere is it explained to me why and how Greece is about to take down the global financial system, potentially worse than Lehman according to the Greek Prime Minister and others.

In my own research I turned to current data published by the Economist. From their website I extracted the following summaries of national debt by country:

http://www.economist.com/content/global_debt_clock?page=1

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blog11_jun_28.2.gif

blog11_jun_28.3.gif

blog11_jun_28.4.gif

From this information, I don’t see why Japan is not the sovereign debt crisis other than the fact Japan is back-stopped by the Bank of Japan, like the Fed does the same for the US, the Bank of England for the UK and the Bank of Canada for Canada, while the ECB and the politicians of Germany and France are in control of the future of Greece, and Portugal, and Ireland, basically ordering the governments and the people of these countries to conform to their “New Europe” or else face dire consequences. Moreover, as I see it, the rest of the world is being threatened with a financial nuclear fall-out should any of the PIGS not agree to be turned into Euro bacon.

The point is; I don’t know what’s going on here. Like you I read a lot about it, but this alarm bell has a hollow ring when it comes to facts that could convince me that we ought not be discussing other crucially important issues instead.

In any case, I believe the Lehman bankruptcy was a sudden development, like the pulling of a trigger, whereas the Greek drama has been playing for years, and its players are hoarse. We all know the script. We all know the denouement. The ECB, Fed, BoJ, BoE, and BoC and the central banks of all other G-20 countries will buy the bad assets of the commercial and investment banks and fill up their reserves to the extent these banks cannot do so directly from the private sector.

The world has reached the point that central banks cannot lower the interest rates on short-term bonds any more, which means that the private sector will not agree to pay more for long-term bonds. Unless the central banks agree to also buy all the long-term debt of the world as they have the short-term paper – and they most definitely will not – their “soft” money cannot get softer.

The world is now about to see what “hard” money is all about. By that, I mean, unless the G-20 governments soon unite to confiscate gold and terminate gold trading, the price of gold must escalate. In fact if they do stop all gold trading, they also effectively shut down enough gold mining to make the metal even more precious.

The Greek situation is a small part of the world’s financial system problem, which stems from the fact that the basis of bookkeeping is that assets must equal liabilities (i.e., debt) plus equity. Regrettably, the world’s leading monetary authorities, convinced by a few mostly Goldman Sachs executives in the 1990’s, permitted debt to go virtual based on derivatives that grew out of control. Unless the assets could be priced at such speculative (read “non-economic”) levels, then the bookkeeping of the world did not balance. So, about six or seven years ago, there was a huge effort made by governments and monetary authorities and banks to promote the price of real estate, not just in America and Europe but everywhere. That policy failed when the private sector got caught in the associated debt bubble.

The only way out of the world’s dilemma – which is much greater than the issues posed today by Greece – is for gold to be re-priced much higher. In order to protect wealth, I have made a fundamental decision to invest (not trade) in gold production, believing that the G-20 central banks and the governments need them to stay in business, and tax the related production and trading.

While most people are caught up in the day to day ebb and flow of the precious metal prices and related share prices, I believe there is only one ultimate direction for these prices and it is up. Moreover, as this development occurs, the prices of equities across the broad market will also lift as higher inflation and interest rates become the new normal as the monetary authorities give in to the private sector, their only hope.

The keys to monitor each day now are the banks and mining stocks. This morning everything is fine there, so don’t be misled by minute-to-minute fluctuations in currency and commodity prices.

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These are difficult times as there are considerable risks involved. But I have made my case and I will stick to it.

Have a good day.


Here are the 7:00am ET snapshots of the latest equity market trading results for Europe, and futures prices plus 5-minute charts of the futures for S&P 500, 30-year US Treasury Bond, US Dollar index, Gold and Crude Oil.

Symbol Name Last Trade Change Related Info
^ATX ATX 2,650.00 4:20AM EDT Up 35.00 (1.34%) Components, Chart, More
^BFX BEL-20 2,491.64 6:59AM EDT Down 13.85 (0.55%) Components, Chart, More
^FCHI CAC 40 3,817.26 6:59AM EDT Up 20.71 (0.55%) Components, Chart, More
^GDAXI DAX 7,094.86 6:44AM EDT Down 13.04 (0.18%) Components, Chart, More
^AEX AEX General 328.74 Jun 24 Up 0.17 (0.05%) Components, Chart, More
^OSEAX OSE All Share 453.37 6:44AM EDT Up 2.20 (0.49%) Components, Chart, More
^SMSI Madrid General N/A 0.00 (0.00%) Chart, More
^OMXSPI Stockholm General 339.80 6:43AM EDT Up 1.18 (0.35%) Components, Chart, More
^SSMI Swiss Market 5,997.13 6:43AM EDT Up 6.31 (0.11%) Components, Chart, More
^FTSE FTSE 100 5,744.66 6:44AM EDT Up 22.32 (0.39%) Components, Chart, More

http://finviz.com/futures.ashx

http://finviz.com/fut_chart.ashx?p=m5&t=ES

http://finviz.com/fut_chart.ashx?p=m5&t=ZB

http://finviz.com/fut_chart.ashx?p=m5&t=DX

http://finviz.com/fut_chart.ashx?p=m5&t=GC

http://finviz.com/fut_chart.ashx?p=m5&t=SI

http://finviz.com/fut_chart.ashx?p=m5&t=CL

The team will check in during the day, reporting in the Discourse when there is a new entry.

Enjoy your day.


Cara on Trends & Cycles

Several years ago I interviewed the new professional management team of Crystallex (KRY) and was convinced the company was finally on the right track. I endorsed KRY until the day they fired Todd Bruce CEO in early 2007. Afterwards, KRY followers knew I was opposed to investments in that company.

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I then suffered the slings and arrows of misguided souls – to the point I had to filter my email specifically to avoid the harassment.

After a major push on the stock a year ago, I went further to say this was a con. More slings and arrows.

Even people here were saying I was too close to Todd Bruce to be objective. But the fact is I never knew Todd until the day I called the company for an interview and he later convinced both myself and also a world-class analyst I took to that meeting that the company had a major high-quality resource worthy of our investing in.

All this happened before I wrote the book Lessons from the Trader Wizard and a couple years before I even considered investing for clients. I was, in fact, a totally objective party.

In December of 2009, the pressure on me from the promoters became ridiculous, so I wrote about it in the WIR. Here is the transcript:

That’s the way these things go, and have gone for decades, for centuries. It’s just human nature. What the self-anointed experts ignore are the cycles. Everything in our universe that moves has a pattern of cycles. Everything.

As someone who is knowledgeable about cycles, I understand that merely looking at a one-sided move is not sufficient data for any kind of analysis.

So if it is not analysis, you can be sure it is synthesis — stories, in other words. Stories, you know, are told to you by people who want something.

Funny thing about stories; the promoter starts with the story while you have the money. But, listen to them too closely and they end up with the money and you have the story.

If you stick to the facts, you do not need to listen to their stories. Here is a case in point from an anon reader who was persistent in his mail to me this Friday.

The conversation went this way:

Hi Bill, I hope all is well with you. I was hoping that you might be taking another look at KRY given hugh volume last week. It appears something is happening that could have a very positive impact on PPS. What is your opinion? Investors would love to hear from you on this one.

I replied:

Sorry Anon, I don’t trade (Crystallex) and have too little time to investigate what might or might not be happening there. The investors in this community at least know my feelings, so there is no need for me to write any more. /Bill

He didn’t like that:

Bill, we are so close to a deal right now. Don’t you think its prudent to do a follow up for your supporters. This could be an opportunity for them to make some money. After all, you did make this your stock of the year a while back so why not take some time and do a brief report on them. Please!!! (Anon)

Getting a little perturbed, I replied:

Anon, Re: “we are so close to a deal”. Are you in the company? Look, I am not in the gambling or insider trading game. If the company reports an agreement I will convey it, and that’s all. I don’t trust the promoter and have stated it in the blog. Enough said. I hope it works out for you. /Bill

Apparently there was more to be said by Anon, typos and all:

bill, you covered the story. i am not an insider or an employee. i am just asking you like so many who wabt to hear from the great bill cara. how can you not report when yoiu called this stock the stock of the year. how did you know at that time it was the stock of the year. your weren’t in the company or an employee either. you owe an update your readers a update good or bad. come on bill put your personal reasons aside. please provide an update. (Anon)

To put an end to this nonsense, I replied curtly:

thank you /B

I think Anon was just getting started:

Bill, does that mean yes?

By then I had had enough, even wondering why I blog – and all this was a couple hours before I got into the TN_Blogger problem – so I tried harder to end it, knowing my next move was to filter future emails from Anon right into the trash basket:

Anon, pls do not write me again. /B

This was just a side play while the $USD happened to be soaring in a break-out and the precious metals were getting smashed on Friday. The goldminer ETF in the US (GDX) went on to close down -5.31% on Friday. The Canadian goldminer ETF (XGD) also crashed, down -5.29%.

But what did happen to Crystallex? I haven’t read any media releases, and won’t, but I see that through the month ending Nov 13, KRY had traded an average of 659,878 shares a day on the AMEX exchange at an average price of $0.247 – less than a wooden quarter. Then from gloom to boom as KRY traded on the Monday following the amazing total of 20,896,100, hitting a high of $0.52, closing at $0.45. Now that the sheep were ready to be fleeced again, Tuesday’s volume was a similar 20,432,400, but with the price dropping to $0.34, closing at $0.40. Seven of the next 12 sessions KRY also closed at exactly $0.40, which was near the daily high. The other five sessions had closes of $0.43, $0.41, $0.39 twice and $0.28. So there was Anon, 13 days after the moon-shot, watching his or her stock churn an average (on AMEX, not the TSX, which is more) of 5,016,936 shares per day with an average hi-lo-clo of $0.42 $0.35 $0.40. This is called distribution, and so Anon, frightened with the prospects of a soaring $USD and crashing price of gold, wanted me to help the take-out.

I am not an idiot or a take-out artist. I’ll leave the sales role to CNBC/Cramer/Bloomberg and stand by with amusement.

Unless there is a deal at Crystallex that the insiders know about (and insiders always have loose lips), which is going to be announced any day now, and Anon really and truly meant it when he called me “the great Bill Cara” (vomit), then this is one stock I think is headed much lower.

That’s just me, seeing things through eyes that have aged some, and still with my wits about me. Then again, maybe Anon was giving me a tip on something really exciting and wanted me to pass it along to the world. Hahaha.

Anyway, Anon wanted an update “good or bad” and there it is. I try to please.

You can’t make this stuff up. When I was in the business, the only thing missing was the envelope full of stock certs in bearer form they tried to slip me under the table.

I could be wrong. Time will tell.

But it was last summer when I became concerned again as some of your were saying you were still involved and interested. I opined that shareholders were being misled.

June 7, 2010

http://caracommunity.com/content/bill-cara%E2%80%99s-blog-june-7-2010

No matter. Here is the outcome to date: the one I told you I strongly believed would happen.

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Experience teaches. I’ve had my share of experiences.



Vad’s Catch of the Day


Kaimu’s Sound Money


CTA Trading Desk Mid-Day Report


CTA Trading Desk Post-Close Report

Good evening. Patrick here.

A slow and steady updraft (S&P+1.29%) gained momentum late in the session after the Greek Opposition Party said they would formally endorse austerity measures, traders eager to push the S&P out of its frustratingly tight 1260-1295 box.

Parliamentary approval is now assumed by most market participants; it remains to be seen how equities react to the “good” news. As we see it there are three possible outcomes tomorrow morning; austerity measures pass, austerity measures pass but peaceful demonstrations turn ugly, union dissent leading to rioting and looting; and lastly, austerity measures are unrepentantly turned down.

A “no” vote to fiscal belt-tightening will most likely produce a large downside gap catching most traders off guard, a low probability event given slim odds of actually occurring.

The path of least resistance after approval of the austerity measures is a little harder to handicap. Judging by the action the past two days most traders expect the S&P to break above 1300 perhaps challenging 1315, a level representing 50% of the recent decline and bracketed by the 50- and 89-day moving averages.

Any opening upside gap to 1315 will attract selling; if the market can overcome this level later in the day Bulls will be energized.

The first 60 minutes of the trading is often referred to as “amateur hour”; NYSE specialists have long made a living fading retail orders executed in the opening moments of trading. If a news inspired opening gap is quickly closed assume “what everyone knows isn’t worth knowing.”

Still in limbo – the beat goes on…


  1. best indication that the $ and commodities including silver... [#88514]
    By: Les (7233 comments) Go to top ↑

    best indication that the $ and commodities including silver are being played is the bearish divergences to be found in the daily dollar chart and bullish divergences in the other two.

    This is what Patrick called price non-confirmation if I remember correctly. MACD swinging in the appropriate direction would shore up the confirmation.

    • Thanks for the ANTO.L chart... [#88515]
      By: Mark H (1363 comments) Go to top ↑

      Thanks for the ANTO.L chart, Les.

    • commodities index begins to test resistance as the bullish... [#88589]
      By: Les (7233 comments) Go to top ↑

      commodities index begins to test resistance as the bullish divergence plays out. Silver has yet to play out (see previous post).

      ————————–

      nice short of TLT there Dave. The speed and depth of this sell is surprising. Perhaps it shouldn’t be, as investors unfortunately look like they are getting fleeced once again.

  2. I worry about those (like me) who have relied on direct... [#88519]
    By: Zaydac (84 comments) Go to top ↑

    I worry about those (like me) who have relied on direct holdings of the metals to protect against the “inflation of currency compromise” which is how this thing is likely to work out. If there is a parabolic rise in PMs (in reality a fall in the value of paper money), and even if confiscation doesn’t happen, tax will destroy a large part of the hedge that coins and bullion will provide. Assume the value of paper falls so that gold races up to $5,000 in a period of a year or two. In the UK I would lose 40% of the gain straight away and it wouldn’t be difficult to contemplate a special tax on the sale of coins and/or bullion. It would be quite easy to enforce and silver is already subject to VAT at 20% when you buy it. Assuming that gold and silver are just preserving wealth in their traditional role, so that their “real” value does not increase, one is sacrificing 40% of one’s wealth despite having done the right thing. To me this emphasises the pressing need to do as much as one can to legitimately shelter from tax those assets which would rise parabolically in times of high inflation, and leave exposed to tax those assets which one would not expect to sell during such a period. That suggests to me that my SIPP (self-invested personal pension) which is not subject to tax unless I make withdrawals, and my self-select ISAs (individual savings accounts)which are not subject to any tax whatsoever, should be overweight the PM miners, and my ordinary trading account should be used for other things. That suggests closing my BullionVault account, using the proceeds to fund this year’s ISAs and top up my SIPP, and choose some nice miners. Just thinking out loud.

    • ... [#88537]
      By: Grym (5469 comments) Go to top ↑
      • Grym - I wince to read of your predicament. Taxes are going... [#88553]
        By: Zaydac (84 comments) Go to top ↑

        Grym – I wince to read of your predicament. Taxes are going to be a huge problem for all of us. I used to say that the tax tail must never be allowed to wag the investment dog but in the last couple of years two of my investment decisions have been heavily influenced by taxation.

        Taxes on gold – Edit to my earlier post about taxes on gold; I suddenly remembered that gold sovereigns are likely to remain exempt from Capital Gains Tax and VAT in the UK because they are still legal tender. Does this apply to Silver Eagles etc. in the USA?

        • Zaydac, Both Silver Eagles and Gold Eagles are legal... [#88566]
          By: Grym (5469 comments) Go to top ↑

          Zaydac,

          Both Silver Eagles and Gold Eagles are legal tender according to these gov sites.

          http://tiny.cc/a6ikz

          http://tiny.cc/pk4y8

          But I remember reading about a year ago that as of january 2012 all coin dealers must report sales of $600 or more to the federal government. I think this must be tax related, or worse, setting us up for confiscation.

          Grym

    • Hi Zaydic, I tend to agree with your thinking outloud. My... [#88543]
      By: ea32da32 (2362 comments) Go to top ↑

      Hi Zaydic, I tend to agree with your thinking outloud. My 401k is 70% PM miners and no physical PM’s. And ‘investment’ is exactly it, as I add funds I buy more PMI goldcorp. Lacking time to focus on active trading of late I took this tack a couple months ago. Bills morning report was profoundly welcome. Take care
      Earl

  3. ... [#88518]
    By: Les (7233 comments) Go to top ↑
  4. $9.00 over the next 12 months. Closing price yesterday... [#88521]
    By: papadynamite (446 comments) Go to top ↑

    $9.00 over the next 12 months. Closing price yesterday- $4.52
    They put out a note yesterday “We expect Rubicon to release the results of the PEA for its F2 Gold System this week. The completion of this study represents one of the most important catalysts in the development of the project, in our view. Moreover, the results will provide the first estimates of the potential size, capital, and operating costs of a potential F2 Gold Mine and we believe this may set a baseline for the valuation of the company.
    As with the resource estimate that was originally reported in November 2010 and amended on March 2011, we believe that Street expectations prior to the release occupy a wide range on key metrics, but are generally well below our estimates. For instance, we believe that some analysts expect gold production of less than 100,000 oz per year, while others are forecasting sustaining capital expenditures of $40 million or more.
    These estimates are overly pessimistic, in our view, and we believe there is potential for the stock to rally on the release if it meets our expectations. we note that prior to the release of the first resource estimate, where we had forecast 3.0 million oz grading 16g/t, Street estimates were as low as 0.9 million oz and 9 g/t, and that with the number coming out at 3.2 million oz grading 17 g/t, the stock rallied approximately 33%.”

    They are expecting 5.94 million tons grading 16 g/t for 3.06 million ounces. They are also expecting a mine life of 14 years with years 1-3 at 750 – 1250 tpd and a recovery rate of 94%, a remaining capex of 150 million, a sustaining capital figure of 140 million over 14 years, a total cash cost per ounce of $339, and an average gold production per year of 209K ounces!

    Speculation has the bulk sample to be at least 18.75 g/t and probably over 20 g/t, and ounce count to 4.5-5.5 million.

  5. Good morning. 4-5 Billion Dollar POMO Injection... [#88522]
    By: Bull Hunter (3552 comments) Go to top ↑

    Good morning.

    4-5 Billion Dollar POMO Injection Today.

    ——

    09:00 Case-Shiller 20-city Index
    10:00 Consumer Confidence

    ——

    CTSH – Cognizant coverage assumed with a Buy at Jefferies. Target $86

    DEO – Diageo downgraded to Hold from Buy at Citigroup.

    MA – MasterCard initiated with a Buy at Jefferies. Target $333

    ——

    “Politicians as a class are dangerous, that people who are seeking power over us are not, by definition, our friends.” ~ James Bovard

  6. Might as well be. :) It is all about the debt. The... [#88524]
    By: 4ever (612 comments) Go to top ↑

    Might as well be. :)

    It is all about the debt. The Eurocrats have Greek by the…throat, demanding austerity to pay principal & interest(or maybe they’ll break a leg).

    We really don’t know how this will play out due to all the lies around who owns what or who owes who, think CDS, should the 151 in the Greek Parliament decide to vote with their citizens in protest.

    Should make for an interesting second half of the year. Something tells me Bill’s presentation this morning is spot on and gold miners are a good bet against the risks in the financial system and government mismanagement.

  7. Another factoid about the size of Greece as mentioned at... [#88525]
    By: Seamus (476 comments) Go to top ↑

    Another factoid about the size of Greece as mentioned at the Daily Pfennig:

    “Greece’s economy is the size of Kentucky’s!”

    Places things in perspective.

    Perhaps it’s concern U.S. banks booked too many Credit Default Obligations, Swaps and again didn’t think it important to have any collateral to back it up. Why worry if it’s unregulated? If they lose the bet, the G will bail us out, won’t they?

    Actually, still think Greece is too small a market to bring it all down. There’s a reason for the smokescreen, but don’t know why yet.

    • Seamus, I was in Kentucky all last week and they are... [#88542]
      By: Grym (5469 comments) Go to top ↑

      Seamus,

      I was in Kentucky all last week and they are thriving compared to Illinois. Yet, our new (Not yet convicted of a crime yet, governor) is still wanting to add more debt. We’re 9th among states for crime and still behind California in financial troubles, but working toward Number One!

      If we could print our own money we’d make it in record time. (Hope Gov. Quinn is not a reader here.)

      Grym

  8. ... [#88527]
    By: 4ever (612 comments) Go to top ↑
  9. ... [#88528]
    By: Les (7233 comments) Go to top ↑

    http://www.theaustralian.com.au/business/mining-en

    DEMAND for resources would continue unabated for the next 10 years, according to Rio Tinto chief executive Tom Albanese.

    “What does this mean for Rio Tinto? … Be ready for growth,” Mr Albanese told a business event in Perth today.

    “I see underlying strength for the kinds of products Rio Tinto makes over the next 10 years.”

    Mr Albanese said investors and consumers were worried at the moment due to the sovereign debt problems in Europe. “We’re going to climb a world of worry over the next 10 years,” he said.

    Mr Albanese said the company would continue to pour money into its iron projects in Western Australia.

    “Not a meeting goes by where (Rio CEO for iron ore and Australia) Sam Walsh doesn’t ask for more money in the Pilbara,” Mr Albanese said.

    “And as long as we get those projects upgraded on time and on budget, he’ll get that money.”

    Mr Albanese said the demand for coal, which is Australia’s single biggest export product, would “continue to be strong on the world stage”.

  10. I looked at the monthly USD:GOLD ratio [Log plot] for the... [#88529]
    By: GW (400 comments) Go to top ↑

    I looked at the monthly USD:GOLD ratio [Log plot] for the past 20 years. I came up with a very interesting channel.

    http://tinyurl.com/3knokng

    Note the lower trend line coming off the 1998 pivot. Since then there has been only 2 touches.

    1)The first was March 2008 the collapse of Bear Sterns
    2)The 2nd was April 2011 when the European debt problems seem to take center stage again.

    As I see it, if this pattern repeats itself then very soon we could be reliving 2008. And if that happens, then in panic, the precious metals sector could be tossed out along with equities again as in 2008. This would be the very “terrifying” [to the bulls] impulse Wave 3 down assuming impulse Wave 1 down was the early May drop.

    One scenario I have in my mind is we put in a short term bottom by July 4th then rally till the end of July [important Bradley Turn Date] then in August maybe all hell breaks loose till the end of the year [another important Bradley Turn Date]. At this point QE 3 kicks in for 2012 and remember it is an election year. This of course is just a big “WHAT IF”.

    My outlook on the USD.

    http://tinyurl.com/42hfsfg

    This chart here plays right into the above scenario. When it completes the C corrective wave up [by year's end] then what could be the 3rd impulse wave down [QE 3] for the USD would send it to its grave.

    [teamonfuego I posted an answer to your reply near the end of yesterday's blog]

  11. ... [#88532]
    By: Vadym Graifer (4341 comments) Go to top ↑
    • Thanks for the link Vad. Remember the story of the young... [#88539]
      By: 4ever (612 comments) Go to top ↑

      Thanks for the link Vad.

      Remember the story of the young Dutch boy who stuck his finger in the dyke & kept it there overnight until help could come repair & rebuild it? That’s how I view Greece. It’s the hole and there’s a big finger in it right now.

    • ... [#88545]
      By: Grym (5469 comments) Go to top ↑
  12. AAPL - estimates were increased through 2012 at Needham... [#88533]
    By: Bull Hunter (3552 comments) Go to top ↑

    AAPL – estimates were increased through 2012 at Needham. Company should see better iPad and Mac shipments, Needham said.

  13. SLW is insane. Was gonna skim profits as the bearish... [#88540]
    By: Les (7233 comments) Go to top ↑

    SLW is insane. Was gonna skim profits as the bearish divergence became apparent. Then it plummets. Then it rockets. Nuts to this. Buy and hold makes a little more sense when faced with this behaviour.

    Dollar doing its poodle trick and rolling over. Happy to see it.

  14. I did a post yesterday titled... [#88541]
    By: GW (400 comments) Go to top ↑

    I did a post yesterday titled “Chart-O-Rama”

    http://caracommunity.com/content/bill-caras-blog-j

    Are the annotations on the charts visible? Thx!

  15. Working for me... [#88546]
    By: c3wands (72 comments) Go to top ↑

    Working for me. Thanks

    • right, it is specifically chart 1,2a and 2b that show... [#88548]
      By: Les (7233 comments) Go to top ↑

      right, it is specifically chart 1,2a and 2b that show nothing GW. TIA

      • OK.. how this.. a partial repost of Chart-O-Rama from... [#88551]
        By: GW (400 comments) Go to top ↑

        OK.. how this.. a partial repost of Chart-O-Rama from yesterday.
        ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~

        1. This chart could give some idea how far gold could correct to during this current correction. Keep a watch on the 20MA.

        Chart #1 GLD monthly 1999-2011: http://tinyurl.com/3qna6xt

        2. This chart shows why I think this current correction will be limited and still could take some time to complete. So far we have been correcting for 2 months and it may go on like this for a while longer. The reason I say that is I believe we have not yet finished wave 3 and we have been in wave iv of 3 since early May. If this wave iv plays out like it did in late 2004 and ealry 2005 then gold will be range bound for some time yet. Note the RSI comparsion bewteen the 2 time periods.

        Chart 2a GLD monthly 1985-2011 [RSI 14]: http://tinyurl.com/4ywdjgc

        or if you use RSI 7

        Chart 2b GLD monthly 1985-2011[RSI 7]: http://tinyurl.com/4yymle2

    • c3wands was your comment in regards to my charts? If so can... [#88550]
      By: GW (400 comments) Go to top ↑

      c3wands was your comment in regards to my charts? If so can you see the annotations on yesterday’s Chart-O-Rama post?

  16. I wrote something on Crystallex (KRY) in the section above... [#88549]
    By: Bill Cara (4105 comments) Go to top ↑

    I wrote something on Crystallex (KRY) in the section above called Trends & Cycles today.

    • the psychology of anon and others like him/her interest me... [#88552]
      By: Les (7233 comments) Go to top ↑

      the psychology of anon and others like him/her interest me greatly. Thanks for that.

    • Bill, thanks for sharing that story with us. Now that was... [#88558]
      By: 4ever (612 comments) Go to top ↑

      Bill, thanks for sharing that story with us. Now that was Crazy!

      • 4ever, Re: "Bill, thanks for sharing that story with us... [#88560]
        By: Bill Cara (4105 comments) Go to top ↑

        4ever,

        Re: “Bill, thanks for sharing that story with us. Now that was Crazy!”

        That was a mild example of what I put up with in the case of several anon’s. It was just that day I think I was perturbed about the miners getting hit and the mail from that particular anon gave me a chance to blow off steam in the blog. Of course, I tried to treat the person with respect, as I always do, but often these people, given an inch, try to take a mile.

    • Wow! Crystallex. What a blast from the past. Bill I think i... [#88580]
      By: NYUGrad (4750 comments) Go to top ↑

      Wow! Crystallex. What a blast from the past. Bill I think i have become such a diff person in viewing trading since then. thx to you and community.

      I was in and out KRY but for the most part came out alive. I recall i may have sent you a few emails too. And how can i ever forget my copy and paste of a false report i found on yahoo finance. I should skip dinner to punish myself.

      My education continues…

      • Reminds me of the trading days when Sharky was around and... [#88582]
        By: rosevillebill (150 comments) Go to top ↑

        Reminds me of the trading days when Sharky was around and ESLR was in the fashion. ESLR is now at .55 from a high of $15 and has a whole bunch of debt.

        I really enjoy the blog and everyone that contributes. Thanks everyone. I’m sure you’re pleased with the way things have been going Bill.

        • Hi All - The problem with KRY was the Rule of Law being put... [#88583]
          By: Luggie (639 comments) Go to top ↑

          Hi All – The problem with KRY was the Rule of Law being put aside by the Pink Revolution of Chavez. Not too different from what we are seeing here in the U.S. as regulators delay, impede etc. reasonable projects for real/perceived political advantage. Happy Trading

          • Luggie, I too don't like what's happened to shareholders... [#88584]
            By: Bill Cara (4105 comments) Go to top ↑

            Luggie,

            I too don’t like what’s happened to shareholders who have been abused by Chavez, and by unsophisticated regulators, but the worst of it comes from promoters who just are not transparent — for reasons only they know why. After a while we get to figure it out, and the lessons are costly.

            Let’s not make too much of KRY. I bet on the jockey and the horse. I was already wary of the trainer, owner and race course. Once the jockey got fired, and in this case the chief financial person as well as the auditor, I said good-bye. It was nothing more than that.

            In the end, I still feel badly for the shareholders, and wish that Chavez would appreciate the power of capital markets and the need to treat the players right.

  17. ... is doing a moonshot. Ameritrade has no shares to short... [#88554]
    By: boughtmypoints (70 comments) Go to top ↑

    … is doing a moonshot. Ameritrade has no shares to short, otherwise I’ll get back on.

  18. yep. working... [#88555]
    By: c3wands (72 comments) Go to top ↑

    yep. working fine

  19. also know how much the used washer/dryer will bring... [#88556]
    By: baz22 (2875 comments) Go to top ↑

    also know how much the used washer/dryer will bring… Wonder how much a used I-Pod/ I-Pad will bring ? Damn sure know how much used Gold will bring …….. !!

  20. ... [#88557]
    By: Vadym Graifer (4341 comments) Go to top ↑
  21. Questions : Let's say Greece does default and the ECB is... [#88559]
    By: boughtmypoints (70 comments) Go to top ↑

    Questions :

    Let’s say Greece does default and the ECB is no longer airlifting pallets of banknotes to Athens to replenish the quickly voided bank vaults.

    What stops the Greek Central Bank from printing its own Euros backed by its gold reserves, rather than immediately (re)introduce the Drachma? Wouldn’t it be uplifting for the Greeks to dust off their black market expertise as Gresham’s law is re-tested?

    • BMP it's the Euro that's screwing the Greek economy. It's... [#88561]
      By: Les (7233 comments) Go to top ↑

      BMP it’s the Euro that’s screwing the Greek economy. It’s too expensive for Greece to ever produce its way out of this deficit black hole.

      Secondly, Greeks have probably had a gut full by now of sovereignty over Greek economic issues originating in a foreign capital. The Drachma is THEIR money and I have few doubts many are thinking of ‘the good old days’. (I have my 100 Trillion dollar Zimbabwe note in front of me to remind me what ‘the good old days’ are)

      As a potential tourist to Greece and Italy and wherever else I welcome a return to former weakened currencies with open arms – I suspect political elites are thinking the same thing.

      Not only will I get the chance to visit these places at a better price than I can now, but I can also begin to buy European manufactured produce once more. Why, the greeks must be asking, is our old enemy to the East (Turkey) making everything we once were capable of?

      These latter points are fundamental to the issues facing various European nations and their people as we move forward.

  22. ... [#88562]
    By: Bill Cara (4105 comments) Go to top ↑
  23. Yesterday I made a post about 1292 as being an area of... [#88563]
    By: GW (400 comments) Go to top ↑

    Yesterday I made a post about 1292 as being an area of possible shorting [possible H&S]. But because of the time of day [noon hour] and some other factors I did not.

  24. ... [#88564]
    By: teamonfuego (2544 comments) Go to top ↑
    • teamonfuego I see you are up 0.14 today on NLS. Congrats!... [#88574]
      By: GW (400 comments) Go to top ↑

      teamonfuego I see you are up 0.14 today on NLS. Congrats! What is your exit price on NLS?

      • GW - Not sure my friend...will play it by ear, but I could... [#88575]
        By: teamonfuego (2544 comments) Go to top ↑

        GW – Not sure my friend…will play it by ear, but I could potentially have purchased at the bottom for a long while. This is a company that was trading in the 20′s to 30′s when the economy was strong. I’m not saying it can get there but what’s to say it can’t get to $8 or $10?

  25. The French have their woman in. Let the Euro circus... [#88565]
    By: Les (7233 comments) Go to top ↑

    The French have their woman in. Let the Euro circus continue.

    http://www.telegraph.co.uk/finance/dominique-strau

  26. http://www.canadianinsider.com/ When they are crying - you... [#88567]
    By: ballena (529 comments) Go to top ↑

    http://www.canadianinsider.com/

    When they are crying – you should be buying. When they are yelling – you should be selling. Often easier said than done!

  27. will... [#88569]
    By: barry (250 comments) Go to top ↑

    will manage?

    http://www.zerohedge.com/article/horrible-5-year-a

    Long a little TBT

  28. I thought NKE was a short squeeze. This thing has busted a... [#88568]
    By: Les (7233 comments) Go to top ↑

    I thought NKE was a short squeeze. This thing has busted a 3 standard dev. BB today. No way it’s opening tomorrow that far off into outer space.

    It’s not even a squeeze at only 1% short interest. Bulls are really biting at the bit here on a revenue forecast upgrade.

    http://www.reuters.com/article/2011/06/28/us-nike-

    Been observing this ticker today in order to better understand entries and exits in a 3/5 min time frame. If I’m holding a portfolio long-term (and they are proving to be very nice entry positions at this time) then I’ll need to familiarise myself with trading TZA as an intraday hedge as necessary.

  29. Chart tells the... [#88570]
    By: Bear E (287 comments) Go to top ↑

    Chart tells the story

  30. I took a call today from RIM asking that I support the 3... [#88571]
    By: terryC (336 comments) Go to top ↑

    I took a call today from RIM asking that I support the 3 votes to be tabled at the July shareholder meeting. I was unmoved by their request for supporting an “against” vote on a shareholder motion to be presented to split the Co-CEO and Co-board Chair duties of Jim and Mike. I explained that, frankly, I was disappointed that they would be hustling to kill a good-governance motion when there is a demonstrated problem at the top and a lack of concern for shareholders. When Reuters and Bloomberg get news of this campaign it will take the stock down even more. I even questioned whether this was their intent. I also gave their PR people a thumbs down as they have done virtually nothing to respond to the daily flood of slash media from “reporters” on the far side of the planet, and 22 year old computer geek bloggers with no skin in the game that pan devices because they don’t like the on/off button and get headlines for saying so. Let’s have a management shakeup, get out of the consumer/commodity arena and get back to their core competency in serving business with applications and devices. End of rant

  31. I am watching the 300MA & vol before considering going... [#88572]
    By: GW (400 comments) Go to top ↑

    I am watching the 300MA & vol before considering going long as it stands now.

    http://tinyurl.com/435k8pw

  32. In the last week or so, I've seen many cases where the... [#88576]
    By: davefairtex (5216 comments) Go to top ↑

    In the last week or so, I’ve seen many cases where the metal gets pounded but the miner stock itself holds up pretty well. My guess: accumulation by someone big. Its the old game: “lets pound silver pre-open, that will shake some miner stock loose on volume, we can pick up the amount we need at a discount, and then cover our metal shorts.”

    A few short months ago, things weren’t like this. The metal would drop a little bit, and the miners would tip over and sink.

    I like buying under these circumstances. GW could be right and PM could suffer another big move down, and I’d bet the miners wouldn’t hold up so well, but my thoughts are, big boys are shaking stock loose by moving the metal around, and then once they have enough, they let nature take its course.

    Not saying they dictate prices 24/7, but they may find it profitable to move around one smaller market (net zero profit) to build a position in another, larger, well-correlated one.

    Just an alternate viewpoint.

    To see a daily chart example of this, look at SLW:SLV. Not every miner is doing this. UXG, for instance, seems to be marching to the beat of its very own drummer.

    • Well written and I believe spot on. Also notable is the... [#88578]
      By: George (619 comments) Go to top ↑

      Well written and I believe spot on. Also notable is the post of BillySundance from last week relative to GDX:GLD

    • right, I pinned up Shannon's market structure as desktop... [#88588]
      By: Les (7233 comments) Go to top ↑

      right, I pinned up Shannon’s market structure as desktop background to remind me where we potentially are in the market cycle.

      Pulling out to the weekly chart in SLW, you can see that these upwards oscillations in stochastics don’t occur every day – this is the 4th weekly upswing since Jan 2010. So if Bill is correct the clowns in charge are selling fear while putting a floor under the miners here. A very clear and strong signal in SLW finding support at the 38.2% retracement from the 2008 low rally.

      The potential H&S formation is apparent when looking at the weekly chart, so I place a potential price target of 40 with which to ditch my Dec 45 calls. That’s not to say the H&S will actually play out, but the resistance level is an obvious target. SLW is the only listing in my portfolio in which I am using options instead of the underlying, so I guess I’ll develop a little understanding of when I want to buy and sell them in order to gain as much as I can. Unfortunately I’m not a mathematician. At least I have a heads up from here not to buy them during the summer months.

      In the hourly time frame I continue to await the break of previous resistance before adding further calls. July max pain for SLW is 32 so I am wary of the stock getting pinned around these levels. OPEX is July 15th and as Patrick or Geoff pointed out, summer selling of premiums is how HB&B makes its money.

      http://www.optionpain.com/MaxPain/Max-Pain.php

      All in all happy with the entry but wary of SLW being stuck here.

  33. Nice drop, through 95 support, through the 50 DMA, largish... [#88577]
    By: davefairtex (5216 comments) Go to top ↑

    Nice drop, through 95 support, through the 50 DMA, largish volume. Now down three days in a row.

    Who is gonna buy all those treasuries now that the Fed is temporarily out of the debt monetization business? Mish thinks it will be the Chinese because they have to in order to support their currency flows, but I’m guessing they won’t be going out 20+ years on the yield curve to do it. If I were a Chinese central banker, I’d keep it 5 years or less.

    FD: still short TLT

  34. Been spending time trading ES futures. Good week so far. I... [#88579]
    By: NYUGrad (4750 comments) Go to top ↑

    Been spending time trading ES futures. Good week so far. I may shut it down for the week and not try to get cute going into july 4 weekend.

    I remain vigilant to cash in gains quicker than usual. and using tighter stops.

    The financial sector is not participating. Volume isnt too hot. But no arguing about yest and today’s action. Top of mind is end of qtr bonus time, “lets get these statements looking good”

    Greece Austerity vote is 5am NY time tomorrow.

  35. Hm. this should make it easier for home owners to go after... [#88581]
    By: NYUGrad (4750 comments) Go to top ↑

    Hm. this should make it easier for home owners to go after them too no? same proposition. Selling mortgages that they knew home owners couldnt pay, vs selling investors mortgage securities that soured, to highly educated money managers at pimco and blackrock?

    Homeowners should band together and seek to use the same law firm as this group that just won $8B. Bank Settlements like this have to be tougher, or removed and changed to criminal investigations. And that $8B, is prob coming out of BAC customers in some form or fashion via fees.

    http://nyti.ms/iTrt9L
    Bank Said to Be Near $8.5 Billion Settlement on Mortgage Securities
    By NELSON D. SCHWARTZ
    Published: June 28, 2011

    “Bank of America is near to a deal to pay $8.5 billion to settle a suit by investors who purchased mortgage securities that soured, handing a victory to a group of money managers including Pimco and BlackRock as well as the Federal Reserve Bank of New York.”

  36. There was a quaint movie circa 1960, 'Never On Sunday'... [#88585]
    By: Ilya (572 comments) Go to top ↑

    There was a quaint movie circa 1960, ‘Never On Sunday’ starring Melina Mercouri and actor/director Jules Dassin. You may not remember the movie but the sound tract was quite popular then.

    Mercouri played a Greek prostitute (the ECB?) and Dassin was an American scholar trying to reform her.

    Close to the end of the movie, Dassin takes her on Sunday, her day off to a historic Greek tragedy played in an ancient ampitheatre. Unbeknown to him, she had seen the play many times. At the end of the play, all the actors, men, women and children are slaughtered. The audience is stunned and silent while she is laughing, cheering and clapping.

    Dassin was taken aback that she lacked empathy. The actors then returned to the stage to take bows and applause. Mercouri pokes him and says ‘see, they didn’t die and now they will all go to the beach and have a picnic.’

    One might suppose that after a successful austerity vote by the Greeks that the ECB might even pay for a modest picnic on the beach!

    But yes, Greece is just a small cyst on Europe’s butt but similar to ‘New Century’ and we all know how big that snowball became.

    • Ilya, Now the music will be going through my head all day... [#88592]
      By: Grym (5469 comments) Go to top ↑

      Ilya,

      Now the music will be going through my head all day ;-)

      Great analogy!

      Today the play and players go on, but the audience…???

      Grym

  37. Greenberger's interview on Bloomberg offers candor on the... [#88587]
    By: loannetter (1298 comments) Go to top ↑

    Greenberger’s interview on Bloomberg offers candor on the excesses of the secret Fed crony lending program.

    http://www.bloomberg.com/video/70203090/

    • Loannetter, Outrageous! The people pictured in Congress... [#88593]
      By: Grym (5469 comments) Go to top ↑

      Loannetter,

      Outrageous!

      The people pictured in Congress should be having mug shots taken.

      Grym

  38. Someone here mentioned having money tied up in MMF's and... [#88590]
    By: Les (7233 comments) Go to top ↑

    Someone here mentioned having money tied up in MMF’s and remarked on exposure to Europe. Required reading & DYODD:

    http://www.financialsense.com/contributors/russ-wi

    a similar article from Bill Fleckenstein:

    http://money.msn.com/currency/mutual-funds-with-re