Bill Cara’s Blog for Sep 19, 2011

CTA Trading Desk Morning Report

[7:00am ET] Good morning.

Ostensibly the result of fresh concerns over Greece, we have another rough start to the week. Who to believe? Greece’s finance minister is promising a budget surplus in 2012 while the country’s creditors want more policy reform and public sector spending cuts, and they want it now. This story is getting old.

Not what I expected to see when beginning the week, here are the ugly facts:

blog11_sept_19.1.gif

blog11_sept_19.2.gif

blog11_sept_19.3.gif

blog11_sept_19.4.gif

Where prices go this afternoon, I can’t begin to say. But, I do know I’ll be having a full medical exam and taking it easy.

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 2,007.50 5:41AM EDT Down 54.70 (2.65%) Components, Chart, More
^BFX BEL-20 2,117.11 6:59AM EDT Down 39.28 (1.82%) Components, Chart, More
^FCHI CAC 40 2,954.37 6:59AM EDT Down 76.71 (2.53%) Components, Chart, More
^GDAXI DAX 5,408.44 6:44AM EDT Down 165.07 (2.96%) Components, Chart, More
^AEX AEX General 275.57 6:44AM EDT Down 6.16 (2.19%) Components, Chart, More
^OSEAX OSE All Share 409.82 6:44AM EDT Down 5.70 (1.37%) Components, Chart, More
^OMXSPI Stockholm General 286.28 7:00AM EDT Down 5.86 (2.01%) Components, Chart, More
^SSMI Swiss Market 5,378.58 6:44AM EDT Down 74.30 (1.36%) Components, Chart, More
^FTSE FTSE 100 5,258.00 6:44AM EDT Down 110.41 (2.06%) Components, Chart, More
FPXAA.PR PX Index 930.10 6:59AM EDT Down 20.40 (2.15%) Chart, More
ESI500000000.MA IGBM 827.13 6:35AM EDT Down 19.00 (2.25%) Components, Chart, More
MICEXINDEXCF.ME MICEX Index 1,504.10 6:44AM EDT Down 7.40 (0.49%) Chart, More
GD.AT Athex Composite Share Price Index 840.27 6:44AM EDT Down 24.67 (2.85%) 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


Vad’s Catch of the Day


Kaimu’s Sound Money


CTA Trading Desk Mid-Day Report


CTA Trading Desk Post-Close Report


  1. 10:00 AM ET Housing Market Index 11:30 AM ET 3-Month... [#95390]
    By: davefairtex (5216 comments) Go to top ↑
    • 10:00 AM ET Housing Market Index
    • 11:30 AM ET 3-Month Bill Auction
    • 11:30 AM ET 6-Month Bill Auction
  2. ... [#95391]
    By: Grym (5469 comments) Go to top ↑
    • Grym, Re Econoday, I have reviewed their reports on a... [#95395]
      By: Bill Cara (4105 comments) Go to top ↑

      Grym,

      Re Econoday, I have reviewed their reports on a weekly basis, and monthly in the WIR as you know, and have found them consistently more objective (i.e., agenda-free information and insights) than any other service I get. Because of this, I have spoken directly with the owner in the past and was impressed with her approach to education and trying to link cause and effect in the market.

      Re time on the beach and swimming, I have not returned to Bahamas since Easter. For reasons I have written about in the blog, I decided during March-April that my time there as a resident would not be a long one. I have no clients there — in fact no offshore clients at all — and so Bahamas was just a place I liked to be, laid back and all. Now I am preparing for a new journey to a different country in the Caribbean, one where I will be spending lots of time walking the beach and swimming. I’ll be taking about it at the Whistler Conference, but I’m not planning to make a big deal of it in the blog.

  3. Bill, Take good care of yourself, rest and relax until you... [#95392]
    By: mayhem991 (199 comments) Go to top ↑

    Bill,

    Take good care of yourself, rest and relax until you feel better.

  4. Today's report: Our base case is that the S&P 500... [#95393]
    By: Bill Cara (4105 comments) Go to top ↑

    Today’s report:
    Our base case is that the S&P 500 trades in a broad band around the 1100 level during the next 6-9 months. This base case assumes lower profit margins and an earnings recession – EPS down by 10-15% – in the US in 2012. A stronger earnings outcome would likely translate into a higher S&P 500 level; a more severe earnings recession could push the S&P 500 below the 1000 level… We think a defensive US equity portfolio built around strong balance sheets, good yield, and relatively low-beta stocks will continue to perform relatively well.

    I am focused increasingly on companies with strong cash flow, looking to buy them on the dips.

  5. This should be equity and gold friendly at some... [#95394]
    By: barry (250 comments) Go to top ↑

    This should be equity and gold friendly at some point.

    http://www.bloomberg.com/news/2011-09-18/bernanke-

  6. Good morning. 10:00 NAHB Housing Market... [#95396]
    By: Bull Hunter (3552 comments) Go to top ↑

    Good morning.

    10:00 NAHB Housing Market Index

    ——

    BBBY – target raised at Goldman to $62. Company’s guidance should prove conservative. Neutral rating.

    BMY – Bristol-Myers upgraded to Buy from Hold at Jefferies citing mid-term double-digit earnings growth expectations as well as the likelihood that the company is acquired over the next two years. The firm mentions Pfizer (PFE) as a potential acquirer and raised its price target for Bristol-Myers shares to $35 from $27.

    BRCM – Broadcom upgraded to Outperform from Market Perform at William Blair on expectations the company’s 3G business at Nokia and Samsung will ramp significantly in 2012.

    CNQ – Downgraded to Hold @ Stifel based on the firm’s reduction in its oil price outlook and the stock’s valuation.

    JNPR – PT Lowered from $26 to $24 @ Auriga. Buy

    KSS – estimates, target reduced at Goldman. Shares of KSS now seen reaching $54. Estimates also cut, given new lease accounting Neutral rating.

    ORCL – PT Lowered from $42 to $38 @ BMO. Outperform

    PDS – Precision Drilling upgraded to Buy from Neutral at UBS based on valuation and drilling utilization. Price target lowered to $16.26 from $17.78.

    SU – Upgraded to Overweight from Equal Weight by Barclays.

    TRP – Scotia Capital Initiates with an Outperform.

    WAG – target reduced at Morgan Stanley to $45. ESRX problem could continue to hang over the stock. Overweight rating.

    ——

    “In Michigan a man in a President Obama mask robbed a bank. Either that or President Obama has an exciting new plan to reduce the deficit.” — Conan O’Brien

  7. Every time he opens his mouth market dips. One has just to... [#95397]
    By: leont (13 comments) Go to top ↑

    Every time he opens his mouth market dips.
    One has just to SDS him to make money.

    FD: Did not vote for him.

  8. I'm beginning to wonder if the Greece, Euro-zone focus is... [#95398]
    By: dberryclan (687 comments) Go to top ↑

    I’m beginning to wonder if the Greece, Euro-zone focus is used by big money to accumulate shares of banks and other shares they target as cheap as possible?

    • dberryclan, Banks and brokers are being driven down for... [#95399]
      By: Bill Cara (4105 comments) Go to top ↑

      dberryclan,

      Banks and brokers are being driven down for various reasons, and perhaps a bit as you suggest because certain movers and shakers want to buy them lower. What I cannot fathom is why all US sectors are down so much because of Greece, and why the sell-off started in almost all the Asia-Pacific markets at the start of trading this week. Seems coordinated around ETFs. I look at the shares of the biggest miners advancing this morning while GDX is down quite a bit. How is that? Anyway, I stick to the best quality companies that are going to be around for many years.

      • ALOHA!! "Seems coordinated around ETFs." For quite awhile... [#95408]
        By: kaimu (3289 comments) Go to top ↑

        ALOHA!!

        “Seems coordinated around ETFs.”

        For quite awhile now I have viewed ETFs as the DOW COMEX. Just another leverage tool for the US FED agents. Everything is becoming “fractional reserve” based. To me leverage of that sort is easily corrupted in the wrong hands and “wrong hands” proliferate at the same ratio as money is debased. I have never traded an ETF for that reason as I do not believe in them. Somehow though with that radical anti-herd mentality over the past ten years I was able to manage gains without them. But I don’t have TV either, so what do I know? All I am saying is I have my suspicions as to why certain “leverage products” have been created. They certainly serve to magnify market ups and downs. Do we need such volatile velocity? Certainly it works for the most adept traders but for the vast majority of those who have 401ks or trade on their own and those who depend on pension funds and the likes I am not so sure they derive a benefit. There is such a thing as the “8% Rule” that determines whether most of America will retire or not.

      • I'm staring to see the ETF movement counter to leading... [#95446]
        By: dberryclan (687 comments) Go to top ↑

        I’m staring to see the ETF movement counter to leading stocks within it’s own basket on days like today. A decietful thing the ETF myth. ETF’s are not a replacement for purchasing solid companies as the Cara-100 teaches us. I’m slowly seeing this.

        GREECE, EUROPE, THE FED, YADA YADA YADA….IT WILL BE NICE TO SEE SOME EARNINGS.

  9. folks who bought into friday's rally are now understanding... [#95400]
    By: NYUGrad (4750 comments) Go to top ↑

    folks who bought into friday’s rally are now understanding why.

    http://bit.ly/olnf6E

    I am in show me mode folks. Can the indices hurdle the falling 50, 200, broken trendline, recent highs? seems like a lot to overcome.

    But anything is possible, as well as a break of 1100.

    Good luck.

    • thanks NYU. Got a good defense at this point? I need to... [#95453]
      By: wxman1229 (45 comments) Go to top ↑

      thanks NYU.
      Got a good defense at this point? I need to make some money and can’t just sit out for the next 14 months until the election and hope for a more profitable administartion.
      But neither can I sit here and play the trades everyday. I aint that good!

      So what to do… Buy the ETF dividend payers IDV and DVY? They’ll alwyas be paying something

      • Everyone is diff. I trade intraday on the s&p futures... [#95456]
        By: NYUGrad (4750 comments) Go to top ↑

        Everyone is diff. I trade intraday on the s&p futures mini contract.

        We are all forced to reduce our position hold times.

        If u need longer time to hold, Maybe high yield dividend safety stocks in healthcare or utilities like verizon?

        But I don’t know what your style or goals or financial pic looks like. I am not really qualified to advise.

  10. ALOHA!! From the WIR this weekend ... "One of them, Doug... [#95401]
    By: kaimu (3289 comments) Go to top ↑

    ALOHA!!

    From the WIR this weekend …

    “One of them, Doug MacQuarrie, the founder and ex-CEO of PMI Gold (PMV.V), will be talking about his recent endeavors in the West African gold fields, and his concern about how the risks there are over-stated by seemingly everybody but the Chinese.”

    I must point out that the Australians have been heavy in the West African goldfields for as long or longer than the Chinese. In fact one of the Ghana gold companies I recommended last year at the CTA Freeport conference was Adamus(ADU:ASX). This comes as a PEOPLE TREE recommendation as one of my other ASX holdings, Straits Resources(SRQ:ASX), is invested in Adamus. In fact some of the PMI GOLD larger investors sold some of their shares of Perseus Mining(PRU:ASX)(another Ghana goldie) to buy PVM(ASX)/PMV(TSXV) shares. A check of the top Ghana and West Africa gold plays will reveal that one large Australian based bank is funding a lot of exploration and mining there … Macquarie Bank Group.

    Another bank highly active there is Standard Charter, though not an Aussie bank.

    Standard Chartered was formed in 1969 through a merger of two banks: The Standard Bank of British South Africa, founded in 1863, and the Chartered Bank of India, Australia and China, founded in 1853.

    Both companies were keen to capitalize on the huge expansion of trade and to earn the handsome profits to be made from financing the movement of goods between Europe, Asia and Africa.

    Okay … not much has changed since 1853 as banks still capitalize on the movement of goods between Europe, Asia and Africa! They certainly capitalized on my PMV shares last year!

    Yes the Chinese have definitely moved in there as well. I am sure they will capitalize also!

  11. http://on.ft.com/oQgVCm Slowdown is spreading from Europe... [#95402]
    By: Mark H (1363 comments) Go to top ↑

    http://on.ft.com/oQgVCm

    Slowdown is spreading from Europe and US to the Brics countries. Cautions that agricultural commodities are unlikely to drop sharply because of poor harvests and low inventory.

    Corn market is tight. Livestock farmers are switching feed to wheat from corn and this could prove to be structural rather than temporary.

  12. I attended the 2009 Cara Bahamas Conference and really... [#95403]
    By: brent (17 comments) Go to top ↑

    I attended the 2009 Cara Bahamas Conference and really enjoyed it, fun and educational. Vad was one of my favorite speakers, but all of them were interesting. I enjoyed meeting other investors, especially those from the Pacific Northwest where I live.

    Last week I signed up for the Whistler conference. Living in the Seattle metro area, attending this year’s conference was an easy decision.

    I scheduled travel via train and bus through Amtrak. A recent Amtrak trip to Vancouver convinced me that is the best way to cross the border for anyone living in this area: no time spent in the long line crossing the border by car, and a short trip through customs at the train station in Vancouver. The train has a food car, wifi, and some nice scenery. Anyone traveling to the conference from Oregon or Washington via Amtrak, we could meet in the train’s dining car and talk stocks.

    • brent, Thanks for the plug. Looking forward to seeing you... [#95405]
      By: Bill Cara (4105 comments) Go to top ↑

      brent,

      Thanks for the plug. Looking forward to seeing you again. Tell all your friends.

      Btw, because of the location, we will have a few more attendees than Nassau. A few who were there will also be here as well. You can form your own investment club.

    • Brent, thanks for a good word! Seeing many repeated... [#95410]
      By: Vadym Graifer (4341 comments) Go to top ↑

      Brent, thanks for a good word!

      Seeing many repeated attendees, I had this thought… maybe I’d shorten a trading psychology part and add more of practical chart reading?

      Let me know what you think!

  13. I was wondering why SVM was taking such a hit today. I'm... [#95406]
    By: Tbolt (169 comments) Go to top ↑

    I was wondering why SVM was taking such a hit today. I’m seeing Little Al is at it again. Apparantly posting more allegations.

    http://alfredlittle.com/

  14. 6:07AM Agnico-Eagle Mines will be acquiring Grayd for... [#95407]
    By: Bill Cara (4105 comments) Go to top ↑

    6:07AM Agnico-Eagle Mines will be acquiring Grayd for $2.80/share or $275 mln (AEM) 68.39 : Agnico-Eagle Mines and Grayd Resource Corporation jointly announce that they have entered into an acquisition agreement, pursuant to which co has agreed to offer to acquire all of the outstanding common shares of Grayd at $2.80 per share by way of a take-over bid. The transaction is valued at ~$275 mln on a fully-diluted basis. The offer price of $2.80 per Grayd share represents a premium of 65.7% to the volume weighted average price of Grayd shares on the TSX Venture Exchange for the 20-day period ended September 16, 2011.

    I have been advising all that big miners are on the hunt for small miners and developers, and will pay well over the market prices.

    Recently I acquired a 2% portfolio position (at C$1.70 acb) in tiny Grayd (GYD.V) because I liked the drill results over wide widths, and figured so too would a major mining company. Didn’t take long.

  15. Bought more today and then placed my entire position at a... [#95413]
    By: papadynamite (446 comments) Go to top ↑

    Bought more today and then placed my entire position at a sell good to cancel at $17.20. I hope this stops Schwab from giving my shares to the shorts!

    • Papadynamite - I just did the same with my shares. What are... [#95414]
      By: rlogan1301 (164 comments) Go to top ↑

      Papadynamite – I just did the same with my shares. What are your thoughts on using Schwab? I currently use them, but looking at IB because of the ability to trade on foreign markets and in foreign currency…I don’t believe Schwab does that, but may be wrong about that.

    • Does this work of cash accounts as well as for margin... [#95423]
      By: kevin07 (63 comments) Go to top ↑

      Does this work of cash accounts as well as for margin accounts.

  16. Also Zerohedge has it on their frontpage as well.... I'm... [#95415]
    By: TennesseeTrader (22 comments) Go to top ↑

    Also Zerohedge has it on their frontpage as well…. I’m not a “zerohedger” by the way, but I do look at their site every now and then largely for amusement purposes. Having it on their site does get it before more eyes.

  17. I though maybe I should advertise my shares for sale on... [#95416]
    By: indptrader (55 comments) Go to top ↑

    I though maybe I should advertise my shares for sale on seeking alpha for $17.20 with reasons why I think they are worth that much. Unfortunately, my article might get rejected because it may not be entirely factual.

  18. at highs after 3 down days. 1-2-3... [#95418]
    By: London (235 comments) Go to top ↑

    at highs after 3 down days. 1-2-3 Cooper

  19. at highs after 3 down days. 1-2-3... [#95419]
    By: London (235 comments) Go to top ↑

    at highs after 3 down days. 1-2-3 Cooper

  20. Schwab gives me a rate of $6.95 up to 5,000 shares so I... [#95420]
    By: papadynamite (446 comments) Go to top ↑

    Schwab gives me a rate of $6.95 up to 5,000 shares so I think it is pretty good because I often trade lots of 5,000 per trade. I don’t know if Schwab uses my shares for short sellers but it can’t hurt to place GTC sells. If the shorts get crushed, I can always cancel or change the order.

    • I put in a sell limit order for my SVM shares good until... [#95421]
      By: rosevillebill (150 comments) Go to top ↑

      I put in a sell limit order for my SVM shares good until canceled. This is in a 401 account and not a margin account, so I’m not sure if 401 account shares can be loaned out for shorting.

  21. I also vote for more practical chart reading tips. Looking... [#95422]
    By: budfoluse (5 comments) Go to top ↑

    I also vote for more practical chart reading tips. Looking forward to the conference.

    • Done deal then! Out of 5 topics I will keep first 4 as... [#95427]
      By: Vadym Graifer (4341 comments) Go to top ↑

      Done deal then!

      Out of 5 topics I will keep first 4 as they were since they build up and lead to actionable setups; last topic will be replaced by the chart reading examples, all taken from actual trades that took place in our trading room.

      So we don’t lose the parts of the necessary curriculum, I’ll ask attendees to go to this link:

      http://blog.realitytrader.com/2009/12/blog-summary

      and read first 7 articles located under the header Trading Psychology. This way we will combine all the benefits of both online and personal presence.

      • That collection of blog posts is worthy reading for... [#95440]
        By: Tremendous11 (74 comments) Go to top ↑

        That collection of blog posts is worthy reading for everyone, not just as a prerequisite for those of us attending the conference in Whistler.

        Of course, I couldn’t stop at just reading the section on trading psychology. As seemingly simple a thing as the definition of scalping is not widely agreed upon. I like the idea of thinking of it as capturing one leg of a move. But, it does seem one would typically need to sit through one or more corrective moves in order to get more than a 1:1 risk:reward ratio?

        Here’s the link again:

        http://blog.realitytrader.com/2009/12/blog-summary

        • Yup, that's actually the whole premise behind this... [#95442]
          By: Vadym Graifer (4341 comments) Go to top ↑

          Yup, that’s actually the whole premise behind this definition of scalping and instructions to a scalper and a day trader: since price tends to pause, pull back or reverse around 1:1, 1:2 etc levels, then at 1:1 get out IF you are a scalper; partial out and trail stop IF you a day trader, etc. Since a scalper doesn’t want to sit through the corrections which normally occur after these levels are reached, he will grab his profit before that happens. If one’s risk tolerance is higher and the aim id more than a quick easy profit, then yes, one will have to sit through the price corrections and read them carefully in order to tell the merely correction from a trend reversal.

          IMO, defining scalping as playing the spread, playing for certain number of cents or certain time of holding is deeply flawed and leads to wrong actions. As you name the boat… :)

  22. Once you see apple below 200 day, you will know beyond any... [#95426]
    By: NYUGrad (4750 comments) Go to top ↑

    Once you see apple below 200 day, you will know beyond any doubt things are not going well. then again, apple might save the world.

  23. Excellent statement from a legendary... [#95429]
    By: jock (1011 comments) Go to top ↑

    Excellent statement from a legendary trader.

    http://peterlbrandt.com/what-does-a-chart-pattern-

    • I am not sure i agree that "a chart is not predictive."... [#95431]
      By: NYUGrad (4750 comments) Go to top ↑

      I am not sure i agree that “a chart is not predictive.” maybe not 100%. but the author of the article does state it can give an edge. which i do agree with.

      Here is a chart i annotated in 2010. http://bit.ly/nQNBst.
      i have not made any changes to the annotations. The $4 red support line that held prior, became predictive.

      looking in the past behaviors of price and fear/greed can be predictive to a certain probability. And if the thesis is wrong, you take your lump small and move onto the next setup.

      • I am assuming the red arrows are indicative to the $4 red... [#95432]
        By: rlogan1301 (164 comments) Go to top ↑

        I am assuming the red arrows are indicative to the $4 red line support level? (meaning..that is how you chose $4 to be the support level)?

      • I think it's just interpretation of definitions. He is... [#95433]
        By: Vadym Graifer (4341 comments) Go to top ↑

        I think it’s just interpretation of definitions. He is absolutely correct in this if you consider that most people take chart “predictive” value as ability to tell exactly what is going to happen. His point is, it can’t, and it’s not even designed to. Chart has INSTRUCTIVE value instead – it helps you outline possible scenarios based on recognizable and many times repeated patterns,, construct your responses depending on which scenario takes place, monitor developments and interpret them.

        This difference, while obvious to seasoned traders, escapes many. Can’t tell you how many times I heard something along the lines “if there is value in charts, prove it – tell me what market will do tomorrow, next week and next month and let’s see how it works.” Now, as soon as I launch into “if this happens, then you should do that…” – do you think they continue listening with interest, or shrug and go away remaining of opinion that charts are of no value since they don’t predict the future? :)

        Good article jock, thanks for posting.

  24. This morning our friends at Alfred Little released the next... [#95435]
    By: davefairtex (5216 comments) Go to top ↑

    This morning our friends at Alfred Little released the next installment of their SVM is fraud story. From what I could tell it was mostly a rehash of the old story. The release time was listed on my trading app at 10:41, which coincides with a drop from 6.60 down to 6.32 in about five minutes.

    Judging from the market’s reaction to the story, it doesn’t look like the latest bombshell is all that. Reminds me of the famous Ali line whispered in opponent George Foreman’s ear: “that all you got, George?”

    Its still possible for the stock to sell off further, of course, but based on the market’s reaction, it does not look like there is any juice to the latest blessing from Little Al. And my guess is, some number of longs were waiting for the next salvo to come out before jumping in so now the deck is in some sense clear.

    Long term accumulators of the stock won’t want to drive the price dramatically higher. They’ll hope the shorts will continue their assault, so they can accumulate on the moves down. But folks scared of “missing out” will drive things higher. Just depends on how many of them there are.

    One more tell. I have a short put position in SVM – Oct 7′s – and with the stock down -0.23 today one would expect my put write position to have lost money today. And earlier they had, but now with the stock trading at 6.79, the puts are off -0.10 today. That tells me that even with the big move down, the implied volatility in SVM is now much lower than before. That’s true of all the strikes trading in October. Some of the fear has definitely evaporated from SVM today. I think this bodes well for the longs. Just my opinion, biased of course.

    FD: long SVM

    • Summary of SVM's price action today: SVM formed a... [#95448]
      By: davefairtex (5216 comments) Go to top ↑

      Summary of SVM’s price action today:

      SVM formed a medium-high volume hammer candle – initial morning sell-off followed by more selling on Alfred Little’s rumor letter #3. Buying for the rest of the day. The price bounced off a 6.25-6.35 support zone, never even getting close to the cycle low of 5.86.

      Implied volatility is off dramatically – Friday: 1.63. Today: 1.43. As a matter of perspective, the last time we saw an IV that “low” was on 8/29. SVM was trading at 8, and the rumors of fraud had yet to surface. IV peaked on 9/13 at 2.03, and has been declining ever since. (n.b.: an IV of 1.43 is still pretty absurd. You are paid $1.70 if SVM stays at 7 for 60 days, or moves higher. Or you end up buying SVM effectively for 5.30. SVM Nov 7 puts: $1.70 per contract)

      The close may be suggestive of short covering. The last tick of the day was up 11 cents, volume of 385k. Perhaps someone wanted out.

      My sense: most holders who were subject to sell based on Alfred Little notes have already done so. The people remaining basically don’t believe Alfred LIttle. Some of them are accumulating more shares. I like the fact that today’s move back up was slow and steady. It smells to me of gradual accumulation, not some casino player looking to squeeze then dump.

      Possible catalysts: report of mine site visit at the end of September. Forensic report from KPMG. Based on action today, I’m optimistic.

      Then again, I’m long. I wrote some more puts today.

  25. Silvercorp Metals Discloses open letter to shareholders... [#95436]
    By: Vadym Graifer (4341 comments) Go to top ↑

    Silvercorp Metals Discloses open letter to shareholders

    - Over the last two weeks, Silvercorp has been attacked by a group of well-organized and well planned illegal short sellers trying to profit by manipulating Silvercorp’s share price with false and selective statements, fabrications and rumors.
    - Who are these people who fabricate Anonymous Letters and postings on untraceable internet sites like “Alfredlittle.com”?
    - They are nefarious short sellers utilizing the internet, fictitious names, and distributing false allegations with no, or false return addresses. These individuals are taking advantage of shortcomings in the regulatory environment and orchestrating “Short and Distort” or “Reverse Pump and Dump” schemes to their benefit.
    - We regret having to respond to these anonymous short sellers who have refused the regulator’s request for them to come forward. They avoid liability or accountability for spreading false statements, defaming the company and engaging in market manipulation. Having said that, should there be any doubt about Sivercorp as a result of allegations, particularly those in the fictitious Alfred Little posting and the Anonymous Letters V1 & V2, a detailed rebuttal will be posted on our website today.
    - Silvercorp will vigorously pursue all legal actions to protect our shareholders’ value. We thank our shareholders for their loyalty. We regret that they have unfairly suffered as a result of this short attack, and we remind them that they need to make sure that they are in full control of the economic benefits of their ownership in our Company and should discuss this with their broker.

  26. Let me throw in quick SVM chart with possible scenario... [#95437]
    By: Vadym Graifer (4341 comments) Go to top ↑

    Let me throw in quick SVM chart with possible scenario. Those who follow my charts and annotations will recognize it immediately. Those who don’t – you really need to come to Whistler!

    • thanks Vad. 7.25 looking like a potential breakout buy... [#95441]
      By: Les (7233 comments) Go to top ↑

      thanks Vad. 7.25 looking like a potential breakout buy trigger. see attached.

      TLT and SDS are two charts I looked at and are ambiguous enough at the moment that I’ll let this market action develop a little for a firmer understanding.

      UUP – $ bullish chart suggest dollar down tomorrow. This market action looks like a fake out at this time. That opinion can change rapidly enough. FWIW

  27. Thanks Vad, good to see in pictures what I was thinking... [#95439]
    By: JeffinWA (11 comments) Go to top ↑

    Thanks Vad, good to see in pictures what I was thinking. Didn’t sell, bought more 1st dump, would buy more at these prices if I could, holding firm with what I have. Time will tell.

  28. Looks to me that the short selling in SVM started around... [#95443]
    By: Spyder (43 comments) Go to top ↑

    Looks to me that the short selling in SVM started around August 15th, about 2 weeks (give or take) before the first anonymous letter about SVM on Sept 2 based on the correlation of SLW and SVM.

    http://stockcharts.com/h-sc/ui?s=SVM.TO&p=D&b=5&g=

  29. Interview with Lorne Waldman re Silvercorp. 9/17/2011 I... [#95444]
    By: federico (46 comments) Go to top ↑

    Interview with Lorne Waldman re Silvercorp. 9/17/2011 I like it. FD long SVM

    http://www.financialsense.com/financial-sense-news

  30. http://bit.ly/a3KhFZ More room to the down side i... [#95445]
    By: NYUGrad (4750 comments) Go to top ↑

    http://bit.ly/a3KhFZ

    More room to the down side i believe.

    I am sick of hearing about Greece. ramp it up sooner than later please. closing the FTSE gap above would actually service as up testing the 50 dma.

    I do no care for false data from hb&b. Show me improving jobs and incomes. And more equity in homes/cars etc. show me improving top line and gold not being loved.

    I remain cautious of any rally up to the 50/200 in U.S indices.

  31. From my comment of 9/6, after Bill discussed McD in in the... [#95447]
    By: MikeNYC (23 comments) Go to top ↑

    From my comment of 9/6, after Bill discussed McD in in the previous WIR:

    “The Dec. 82.50 strike closed at 3.65, the 80 at 2.71″

    After an earnings disappointment a week and a half ago it pulled back to the lower boundary of a very strong upward channel. It then shrugged off analyst downgrades and market down days (up .6% today) to continue upwards.

    The same strikes are 2.09 and 1.34. The puts never got exercised, but have yielded close to %40 gain in a very short period of time. No need to get greedy.

    The five year chart is very powerful, while it has offered strong trading opportunities all the way.

    Thanks, Bill. Your discussion of the weekly Valueline stocks is, IMHO, one of the most overlooked and potentially profitable parts of the WIR. It’s not just metals out there!

  32. The Jan 11 $410 calls can be sold for $5.50. A $410 share... [#95449]
    By: MikeNYC (23 comments) Go to top ↑

    The Jan 11 $410 calls can be sold for $5.50. A $410 share price would put it at nearly 50 times earnings, which seems crazy.

    Does that seem like a safe bet? I’m guessing the guy who sold naked $310 calls thought so, too!

    Is grabbing dollar bills from in front of this steamroller-of-a-million-shorts worth considering?

    As Seeking Alpha has noted, insiders have been selling all summer at a good clip. Earnings call Oct. 20.

    • MikeNYC - If you look at CMG:SPY, you can see it has been... [#95450]
      By: davefairtex (5216 comments) Go to top ↑

      MikeNYC -

      If you look at CMG:SPY, you can see it has been in an uptrend relative to SPX for quite some time. And just on its own, the chart looks pretty good too.

      http://stockcharts.com/h-sc/ui?s=CMG:SPY&p=D&b=5&g

      As Vad says, overbought can get overboughter, overboughtest, and then it goes up some more. Maybe wait to see some indicators of a top? Perhaps a lower high and a lower low? Or a cross of a 50 dma? I look at the weekly chart, and this stock has stayed above its 50 week moving average now since April 09. Actually, it looks like the chart of gold! And the stock right now looks poised for a breakout.

      I have no position and no idea about the company. I do know that insider sales are not so useful as a timing indicator. In the past, insiders have received free options (lottery tickets) and so they have a motivation to cash them in when things go up regardless of company prospects just to diversify. Insider buys, on the other hand, seem to be a more useful indicator, since the insiders need to pony up real cash to actually buy stock.

      • @davefairtex: agreed. I've been wrong on this one before... [#95455]
        By: MikeNYC (23 comments) Go to top ↑

        @davefairtex: agreed. I’ve been wrong on this one before, so why get crazy. But I’m going to watch. They all break sometime, no need to rush.

  33. Google the headline for full WSJ article. "More Pressure... [#95451]
    By: NYUGrad (4750 comments) Go to top ↑

    Google the headline for full WSJ article.

    “More Pressure on UBS Chief”

    http://bit.ly/nMAp2c

    This chart is telling me it is highly unlikely price is going over $20 USD anytime soon. And will likely revisit $7 before long.

  34. http://bit.ly/qBB5A9 they announced it March 21. when it... [#95452]
    By: NYUGrad (4750 comments) Go to top ↑

    http://bit.ly/qBB5A9

    they announced it March 21. when it was around $4.50-$5.00 prior to the reverse split. So current pricing is simply optics, and it has lost almost half its value since. or about $2.70 pre split adjusted.

    Now what happens if C goes down to $9 from here? that will be like 99 cents prior to the split.

    $25 must hold for C, or its express elevator time to $10-15 range.

    • nyg If you would have invested $10,000.00 in C on... [#95459]
      By: bigwad1 (768 comments) Go to top ↑

      nyg
      If you would have invested $10,000.00 in C on 05/06/2011, day of reverse split, you would be the proud owner of $6,090.11 and C would be the proud owner of $3,909.89 of your $10,000.00 investment! For the mathematically challenged that comes to a negative -39.10% for your $10,000.00 investment, and a positive +39.10% of your $10,000.00 investment for Pandit.
      Plus the financials get a free pass on accounting and regulation, and a get out of jail free card if they ever need one. Chances are they will never need one since they make the laws that put them above the laws.
      Buffets $5billion preferred investment is doing just fine. Go figure…………….

  35. Correct me if I am wrong, but it looks like the average... [#95454]
    By: indptrader (55 comments) Go to top ↑

    Correct me if I am wrong, but it looks like the average short position in gold stocks is 11%. This includes stocks like GG, UXG, and RBY. These result are as of september. May explain one of the reason we see decline gold stock in the face of rising gold prices.

  36. I guess there is never one... [#95457]
    By: barry (250 comments) Go to top ↑

    I guess there is never one cockroach.

    http://www.cnbc.com//id/44586211

  37. 1. copper broke 3.90 support, closing 3.80 2. chinese... [#95458]
    By: tpedward (34 comments) Go to top ↑

    1. copper broke 3.90 support, closing 3.80
    2. chinese economic data weakening across summer
    3. S&P outperforming many other global indices past month
    4. merkel party losing political support in germany. seems to be formidable political opposition for euro politicians to provide significant stimulus/bailout

    is move in copper headfake….or market starting to price in continued weakness in asian demand?

    is current environment one in which only US can provide material backstop/stimulus?

    • tpedward, i wonder if certain market and political actions... [#95460]
      By: dberryclan (687 comments) Go to top ↑

      tpedward,
      i wonder if certain market and political actions are an attempt to influence the Fed? Just as I’m sure many market moves are in anticipation of the Fed. I think the world indices responded well to the QE2 announcement, correct? Can’t fight the Fed, however, does the Fed still have fight left. Probably…..

  38. You can clearly see there has been no change. Even... [#95462]
    By: bigwad1 (768 comments) Go to top ↑

    You can clearly see there has been no change.
    Even Elizabeth Coleman is still dancing around the real truth!

    First Book of CODE for the super rich:
    You must divided the people with laws, lies, and mis-truths in periods of high unemployment and times of inflation, for if the working poor organize, become aware of the real truths, then unite, there will be extreme changes for our powerful elite society………
    ADDENDUM:
    equality is not in our vocabulary.

    signed,
    The Rich $u$ks in charge of dominating the working poor

    http://www.youtube.com/watch?v=Ysk64ZEnv8g&feature

  39. First... Mr. Cara... I echo the sentiments of many on this... [#95463]
    By: dnfrm (88 comments) Go to top ↑

    First… Mr. Cara… I echo the sentiments of many on this blog re your ongoing resilience and stamina at an age which equates to mine. Hell, my daily accomplishments these days, absent major medical problems and inclusive of mere old-age aches & pains, involve fetching the morning newspaper, feeding the old house cat and thence cleaning his litterbox, watering the back-yard garden, and thereafter retrieving the mail from the street location. Cannot conceive how you could contemplate a trip to China aside from a slow moving ocean liner… and if it was my choice these days… I suspect that upon arrival I might well decide to remain on the boat. But… anyhow… as others have advised … you must listen to your body and health at your ( our… I’m also a 39er ) is the priority.

    Next… just to note that the Investors’ Intelligence reading has finally reached a net negative for the first time since the week of 9/03/10. Perhaps suggestive of a bottoming out process?? No prediction from here.

    Next… I believe it might have been Ilya, who many posts ago, suggested a possible interesting analogy re the overall market of this year with that of 1998. I do recall that year very well… I was, for the first time ever, extremely margined going into the months of July and August…and then, likewise for the first time ever, the margin calls came thundering in!! Whew!! Have not bought on margin ever since. But, aside from that personal disaster, and looking back to that spring-summer-fall of 1998… there do perhaps seem to be some similarities? Long-term interest-rates and home mortgage rates were declining to record levels ( obviously not to the extent of today’s environment ); Russia’s currency bottomed-out; Brazil went into the tank; the LTCM bail-out occurred; and Clinton was impeached.

    So… that summer-fall 1998 period was indeed quite event filled. Oh… as just an aside… it was 9/04/98 of that year when the I.I. bulls/bears finally got to a negative reading for the first time in over a year.

    And thereafter, to the 1998 year-end… there was a pretty substantial market gain. So… my prediction… not so… simply noting.

    Oh… and I do also recall the panic of 1910 when I was just a small kid tromping around in shoes with cardboard insoles and snatching oranges from the neighborhood vendors… OK… just kidding!!

  40. Interesting to return to a finviz heat map so coloured... [#95464]
    By: Les (7233 comments) Go to top ↑

    Interesting to return to a finviz heat map so coloured Monday night after 3 days unplugging. What to make of it.

    TLT – testing new highs. Bearish divergences are noted, yet a decisive sell off signalling a switch of bond ownership to ma and pa investors has not yet occurred. Ditto VIX as the fear gauge bounces around a descending channel that could turn into a bear flag if markets continue to sell off.

    Members of the A team – AAPL, AMZN, showing green while the rest of the market rolls over. One could be under the impression that hedge funds are putting their money to work and the indexes are fading Monday morning longs, yet as AMZN shows in its Yahoo Finance page, it closes up (+1%) and then in after-hours trading losing 2 points. The bearish divergences in the intraday time frames are clear, yet further monitoring is required to better understand the market leaders’ behaviour going forward.

    Goldminers try to stop the hemorrhaging but GDXJ is suggestive of more downside to come. Jesse suggests Bernanke may be responsible for that as new shenanigans are potentially cooked up by the Fed this week. We can only watch and wait.

    http://jessescrossroadscafe.blogspot.com/2011/09/g

    SLW is impressive in its dogged consolidation at these prices this last 2 months. When the signal comes to buy in SLW it could be a fast one.

    What gets my attention is the bearish divergences in $NAMO – the NASDAQ McClellan Oscillator:

    http://stockcharts.com/school/doku.php?id=chart_sc

    The index shows new highs yet the total net advance of stocks is clearly diverging in a bearish manner from the index – a potential red flag that not all is well with this tech advance.

    I pointed out Friday the important resistance in $COMPQX and what Puplava coins the perfect storm of resistance:

    http://www.financialsense.com/contributors/ryan-pu

    It may turn out to be pertinent, well timed information. The NASDAQ Composite is one to watch this week. A retracement to support or hugging resistance and waiting for Bernanke to deliver a breakout catalyst?

    http://www.zerohedge.com/news/forget-operation-twi

  41. Time to buy gold equities? Sep 19 2011 The gold price has... [#95465]
    By: Les (7233 comments) Go to top ↑

    Time to buy gold equities?

    Sep 19 2011 The gold price has hit record highs in recent weeks but gold miner equities haven’t been performing quite as well. Evy Hambro, manager of the gold and general fund at Blackrock, tells the FT’s Jack Farchy the gap will close soon. (4m 39sec)

    http://video.ft.com/v/1168086638001/Time-to-buy-go

  42. "In my view, Germany's austerity nihilism will precipitate... [#95466]
    By: Les (7233 comments) Go to top ↑

    “In my view, Germany’s austerity nihilism will precipitate a dramatic policy shift by the US over coming months. The risk — or solution — is that Washington will write off Europe as irretrievably hopeless and re-order the global landscape. The US will not let free-riders exploit is its precious stimulus forever. It may seek to form a global growth bloc, open only to stimulators. And woe betide Germany. But that is a column for another day.”

    [an interesting notion and food for thought]

    … “The facts are simple. China dodged the Great Contraction of 2008-2009 by unleashing credit on a massive scale. Zhu Min, the IMF’s deupty chief and a former Chinese official, said loans had jumped from 100pc of GDP before the crisis to around 200pc today — if you include off-books financing from letters of credits, trusts, and such like…

    China’s banking system is the largest, fastest-growing, but most thinly capitalized among emerging markets. Such a rapid run-up in leverage is a sign that the incremental return on credit has declined,” said Fitch. The economic boost from each extra yuan of credit collapsed from 0.75pc to 0.18pc during the crisis and has yet to recover.

    Matters have reached the point that even a light tap on the brakes by China’s central bank — through credit curbs (deposit rates are still minus 3pc in real terms) — is already threatening a hard-landing. Dr Cheng said local authorities had built up $1.7 trillion in debt, mostly using arms-length finance vehicles. This is coming back to haunt.” (more)

    http://www.telegraph.co.uk/finance/comment/ambrose

    So is recession to be a self-fulfilling prophecy? Seems like the Fed is the only game in town. Let’s see what rabbit Bernanke intends to pull out. The way bullion and the likes of SLW are behaving, it could be a winner for precious metals. As always we shall see.

  43. don't like em (except gold), don't like predicting moves on... [#95468]
    By: Les (7233 comments) Go to top ↑

    don’t like em (except gold), don’t like predicting moves on them as they seem to be the play toys of interventionists and other miscreants.

    But the bullish divergence in FXE and bearish divergence in UUP hourly charts are quite apparent, which is what led me to suggest a headfake yesterday. It appears to be playing out today.

    DB in FXE? Euro about to make a comeback or is Ben Bernanke about to do something incredibly foolish to goose the market and kill the dollar? All eyes on the FOMC meeting. see attached.

    Looking like its almost time to take a position in explorers. JMO & FWIW

    • Euro shorting is becoming a bit of a crowded trade. CFTC... [#95470]
      By: Mark H (1363 comments) Go to top ↑

      Euro shorting is becoming a bit of a crowded trade. CFTC report shows non-commercial traders are holding the most short positions since July 2010.