Cara's Commentary & Community Chat, Friday, Sept. 4, 2009

Bill hit it on the head. Even though I have not contributed here (I will be) I still have objectivity and I see a blog that is dominated by just a few posters that in my opinion do not lend anything to helping me become a better trader. Becoming an expert on business history and economic for sure. Also there are so many posts about nothing. Who cares about some trader that on you tube that lost $25,000. Whoopee doo. The question is WHY did he lose that money.

I think Bill is awesome and works his butt off day after day. Without question gives the best and clearest commentaries of anyone in the business. I act on many of his suggestions but frankly I am more of a LT position trader and hold huge positions for months and generally trade the charts and not fundamentals except in this looney bin market where the rules have been rewritten for many aspects of trading. In any event, in my opinion there is just too much nonsensical talk from others who it sounds like have nothing better to do than to hear the sound of their own voice. They keep pulling articles and other peoples quotes and placing them on the board. Please explain how this helps me trade. If I need news I can get a newspaper as they say.
Instead I would like to see more talk about what people are actually trading, their positions, when they put them on and why. Did an actual article help you to make a decision or was it the RSI of a particular stock. Everyone seems to have plenty of time to give in my opinion ridiculous rants and dissertations on just about anything under the sun. Again how does this help me trade. Perhaps better to suggest an option strategy around what you are posting about maybe????
I too need and want to learn better "HOW TO PLAY THE GAME"

This is my first post. I have followed this blog for some time. I am a non professional trader. I have learned more about trading from this site than anywhere else. Bill's comments are what has taught me to be a novice trader. I have not contributed because I do not feel I have the expertise. I read through the comments daily, but most of it is not helpful. I do it to find Bill's comments (and several other traders). I wrote this to just say thanks. I would like to hear a discussion on what one should do with their savings (not at risk capital). Trading should be done only with money that you are willing to put at risk.

Les, how can I put it politely but I am sorry as I can't say it any other way and I am not looking for a fight but, I think so many of your posts are a waste of this blogs time. Just an outsiders opinion. I don't need to read Vads book to understand Trading 101 and all the rules the guy broke. I mentioned the You Tube video more as a rhetorical question on what can be learned from it and frankly there was no speculation as to why he lost the money.

play, that may be the case but I have learned to skip and speed read this blog. I have not had to ignore anyone but the spammers. The ignore button remains at your disposal. No skin off my back...

and frankly, there are other lurkers out there that can learn what may already be plainly understood to you.

Again, political commentary can be refrained from on my part...

unless someone says "go aussies" again :)

Agreed - if someone posts more than 1-2 times a day I usually just page down and not read anything he/she says.

If you must post "bot XYZ", then I think you should also post the reasons behind the buy. I wonder if a lot of you are just flipping the coin.

Regarding Bills work.

One word - invaluable. I read three blogs daily and this is probably the most important one. I cannot say enough on how much it helps me set overall thinking on my investment strategy. I really have no interest in gold (you know my thoughts - it's just another $9 stock), but all of the other commentary - economics, markets, interest rates, etc - by Bill and others is much appreciated.

Bill, Thanks for all you hard work. your morning commentary, your RSI "system" and your tireless quest to help us understand the "behind the scenes" things that are going on.

excellent point about that ignore button. Thanks. Now I would like to ask if you wouldn't mind sharing what you are doing in the market trading wise. What are you using to make your decisions and how are you doing. I'm not just fingering you out on this but anyone that is actively trading. Would love to hear what they are doing.
As for my trading I have been buying miners since the summer of last year and bought even more with the collaspe into Nov/Dec and then even more all the way to about 5/8 of where we are now so I have kicked perverbial butt instead of kicking the bucket. I made the worst trading decisions in history from a tech point of view but ended up making tons. I have sold off about 50% of my miner holdings at the June highs and didn't pick any more up during the July sell off (stupid again) and subsequent bounce. On another front I did another really stupid thing I took a real dump on aapl selling it for half of what it is now (bot it at 115). Other than this I have been dabbling successfully with some of the country ETF's, and a variety of other stocks.
Now I am trying to figure out how to play my remaining 50% of miners. Not be greedy and play stops with the new support created after we actually breakout or not. Only my neroses will tell.

Play, that's probably one of the reasons I yap so much, in that my trading has slowed right down, thanks to a very painful lesson in chasing stocks in choppy conditions since opening an IB account in March.

Vad mentioned a software program/broker (need to ask their sales rep what its about) linked on his site that permits day trading on min. $5000. That be the case I'll soon be off this site and working on my day trading - which is where I'd like to be. The trades I report here are the only ones I'm playing.

These trades are basically attempting to apply Vad's trading principles from his "Master profit plan" and more recently "techniques of tape reading" (2nd book is indespensible IMO).

I was introduced here with swing and trend in mind, but am rapidly warming to the freedom and risk management approach found in day trading.

Perhaps it is best to lead my example and tells us what is the criteria you use to decide on your LT positions. I would suggest it may be a more productive way to criticize others. This blog does gives everyone a chance to contribute. The thing that I love about Bill the most is his courage to lead by example by publishing his opinions and strategies so the whole world can see whether his method works or not. Proof of concept. To me this is what this community is all about. The courage to lead and share by example.
In regards to the content of peoples postings, I like the variety. If too many constraints are put on them, they may not want to contribute anything.
Acceptance and co-existence of a variety of styles is what makes this blog so interesting. Oops I see you are already posted. thanks

Good morning.

There are NO changes to report at this time.

*(CA) CANADA AUG NET CHANGE IN EMPLOYMENT: 27.1K V -15.0KE, UNEMPLOYMENT RATE: 8.7% V 8.8%E - Full Time Jobs: -3.5K v -29.1K prior - Part Time Jobs: +30.6K v -15.4K prior

EDIT: Ah voila. Not so good in the US:

AUG UNEMPLOYMENT RATE: 9.7% V 9.5%E (Highest since June 1983) - No

My quick read of the unemployment data released today is that there are many negatives in it. I think that anyone who has bought into the broad stock market of late is delusional. Frank

http://www.minyanville.com/articles/ung-natural-ga...

Bought at $1.63 in premarket. My thinking on this is the news regarding the ratings agency being potentially liable for faulty ratings will significantly change the sentiment surrounding the bond insurers, which are suing to get money back for relying on faulty AAA ratings to insure certain instruments.

You looking to take .15 - .20 cents out of it around 1.80+ resistance

econoday's report on unemployment stats (released 830 am ET):

non farm payrolls: consensus -200,000 actual -216,000
unemployment rate: consensus 9.6% actual 9.7%
Revisions to past months, net: -49,000

Once again we're going down, but more slowly now.

One more point: revisions to previous months always seem to be negative.

no inflationary scare now? (despite gold traditionally performing best in a deflationary environment)

why capital A?

help people take control of their lives and responsibility for their actions.. To me, those are the hardest things that one will do in life. And thank you for providing for the conversations from all of those outside of my little place here on earth.

Mish????

News release this morning on SVA receiving first order for vaccine. Watching SPY to see if it would juice the trade on good numbers. SPY shot up so I dumped my swing trade for 5 cents. It seems I fell for a fakeout and after making the trade SPY rapidly fell again. Took my stop with a small loss as SVA has no support at the price I sold - the 15 min chart for the last three days convinced me I am not going to win the toss.

Meanwhile my swing trade is up 90 cents...

edit: phew, at least I can judge danger a little better, if not risk. Sva is falling like a lead balloon.

After being defrauded of most of our savings through what was an investment Ponzi scheme, my motivation here is take control & manage what's left of our savings. I am still a novice when it comes to trading and don't think I know enough yet to contribute to this blog - hopefully soon. I find Bill's reports and commentary extremely invaluable and have opened my eyes to things I never knew went on.

Bill, it's obvious you love what you do, your passion is evident in everything you do, your need to tell it like it is, your sense of right vs. wrong. Kudos! I for one need someone to show me the way - thanks to Bill for this.

Play - Welcome, you have made some very impressive trades. I'd like to hear about why you sold AAPL too soon. Specifically, what influenced your decision to sell?

I'm here because of the internet, not because of the markets. But then again, I want to read about the markets, not the internet.

We can read about corrupt economics, hyperinflation, conspiracies and fiat currencies all day. This kind of trash is everywhere you care to look. The trading has taken a back seat to this kind of discussion. Overall the day trading effort, though it seems futile to me, offers valuable information at any given time. According to the trader's ethos, I'm just doing it all wrong. But that's fine with me.

For now, its all about avoiding the 'rocket ship to mars' outlook. But a second valuable lesson is avoiding what's called 'participation mystique,' or not getting knotted up in it.

I know for a fact that if I were to involve myself in a day trading scenario without first obtaining good market background, that I would make serious mistakes both in my personal life, and losing it all financially. I've come very close to both.

I have gained a small measure of confidence being able to post my charts and take others opinions as sound judgement. The hard part has been justifying my investment to co-workers and acquaintances, since you have to be right and make money AND deal with the people around you. A good rule of thumb would be to pay your respects to the monthly charts on a regular basis, otherwise there would be very little to learn from your own mistakes.

bought a little more at $52.85. Again, I think the money that is coming out of the crappy financials (see volumes in those that are dropping off) will be put to work in areas that are underinvested, particularly blue chips like PG.

last few days.

UTA looks like a possible long reversal play. Travel company with excellent numbers.

I bought it back in late sept or Oct of last year at the $120 support level. Then watched it trade for what seemed like forever down into the 80's and by march 6 months later I was thinking there are a bunch of things I could be doing with that kind of money better than holding Apple stock at $120 freakin dollars. Plus I have alawasy been a PC man and could not stand Apple (artsy fartsy) so I guess I felt cursed and just wanted out of the position. The day I sold in March was the EXACT day it started on its epic journey to where it is now. Pretty funny huh. Again I used nut job decision making to sell it and not look at that wonderful base of support it had built. Also by that time I was reaping the rewards of buying all those miners on the cheap so I felt generous with myself plus I really hated APPLE LOL

every day and every week.

I don't post much, but what I've learned here is invaluable to me. Three years ago I didn't know anything about managing my capital except to "buy mutual funds and don't try to time the market."

Through family members I was introduced to this site. Since then, I've learned "to dance" in my own way. I've stepped on some toes but I've also done some shuffles that went better than I could have ever imagined. I now risk my capital on my own terms.

And, more than anything, I've learned credulity regarding financial information.

I'm here because my wife's coworker told her about Bill's site after he'd heard how badly I was coping with the recent market crash. So I'm hoping that one day I'll become wise enough to make back all that I lost so that I can open up my own pizzeria, here in São Paulo! But for that to happen, there are probably a couple books I need to buy first!

As for Bill, I'm not sure what I can say about his reasons that hasn't already been said. I do know that he has lots of family and friends that, I can only imagine, wish they could spend more time with their father/grandpa/friend. For him to instead devote an absolutely massive amount of his time towards building up this community, he obviously wants to make a meaningful, sustainable difference. So I guess he's here because of his principles, and dreams about working them into something that's been such a big part of his life, the market.

Bill, I sign onto this blog most every morning and evening. It’s one of the best financial blogs on the net, actually my first choice. The information you provide is incomparable to any other site, the venue is superb and you have some of the most knowledgeable trader/posters of any financial site.

I do not contribute many financial guesses because in that regard I am still learning and others here are far superior to me. I want to add value, not noise. Like any community this one drifts away from its core purpose and needs to be guided back occasionally. Now is one of those occasions. There is simply too much non financial venting and tiresome rants that do not make us better traders. People should take it off line or go else where for that. Bill, I do not believe you need another outlet for non financial discourse; each of us simply needs to return to our discipline and make proper use of this precious gift you have provided, and I emphasize precious!

Bill, your advice, experience, effort and comments have made me a better trader. For that I owe you a great debt. It takes a long time but I am beginning to make better trades. I took your Thursday's post and did well trading DGP, which I would never have done after gold's previous surge. Likewise Vadym's trade what you see mantra has been quite helpful. Thank you Vadym. There are many other traders here, to whom I owe a debt of gratitude. I hope to obtain the knowledge, judgment, foresight and confidence to trade well and then to share that with others on this blog. That is why I am here. Likewise, for those who prefer nonfinancial or marginally financial, social/political discourse, they need to use other sites, intended for that purpose.

Thank you again Bill for all you have done. Your contribution has been, is and continues to be of significant value and highly appreciated by me and I am certain by other posters here.

We need to be disciplined traders and disciplined posters.
A big THANK YOU to all the great traders and great caracommunity posters!

Well said Vad. I've found that in my non 401k accounts I have to keep my focus on the short term because there is too much volatility and risk inherent with holding long term right now.

I've also come here to learn over the past several years: to get different viewpoints and to learn the "dance". In an earlier life I traded international bonds, both as a principal and agent, but I never got into trading stocks. I have also worked with smaller, venture-backed companies, so I'm very comfortable with fundamental analysis. The technical analysis I struggle with, particularly the past several years where there is no transparency in the markets, and I believe everything has been tainted by the corruption on Wall Street and in Washington. I believe that is why Bill has started this community- to share his experience and to fight for a level playing field. In a simplistic way it really comes down to Economics 101, as the bigger, more open marketplace we have the better off the more of us will be. The internet should allow real price discovery for everyone and hopefully blow up the older business models of hoarded, concealed, and conflicted positions.
I'm much more of a thematic investor than a RSI one, but I thank everyone here for their ideas. As much as I enjoy the daily comments I can't believe how valuable I especially find Bill's WIR's.

allengg: Here are my thoughts on Barclays vs. Horizons.

Barclays is "safer" in that you are not subject to volatility decay that is found in leveraged ETFs like the Horizons products. You can stay in a trading range for several months with Barclays products, and not lose relative to the indexes being tracked (other than minimal fund fees).

Barclays has no NatGas ETF, so people use the Horizons ETFs, HNU.to and HND.to. These are probably the most prone to volatility-induced value destruction over time (of all the Horizons products), but are OK for a few days, sometimes even weeks.

Claymore has the NatGas ETF GAS.to which is picking up in popularity. It tracks the Canadian NGX gas index and consequently will not always move in synch with the NYMEX prices. Yesterday it traded 7.5 million shares, 3 times the previous high volume. There are also options available on GAS.to (thinly traded, wide spreads the last I checked).

Some Horizons products like the HXU.to and HXD.to do not have excessive volatility decay and can be held for several weeks.

If I expect to take a position in a sector for a longer period of time, I use the Barclays products. If I want leverage I simply use deep-in-the-money options (usually 3-6 months out), and calibrate the leverage by how far in the money the strike price is.

A useful tool for comparing relative performance of any two equities is the Performance Charts feature on StockCharts.com. Use the slider on the bottom to compare performance over various time frames.

And of course people use the 2x Horizons products to get "more bang for their buck", reaching for leverage. If they hold too long they can get "less bang for their buck".

I'm long HXD.to, HOD.to, and short UNG. I scale in and out of the Horizons products (and day trade them as well), and am waiting for UNG to hit its NAV (or come close on a big capitulation day) before covering my short position.

NatGas is having a nice rally this morning. If it doesn't set a new low today that should result in multitudenous bottom calls, and people piling into the NG ETFs. I suspect NG will stay in a trading range, with a downward bias for several weeks, with increased volatility. But that's purely a guess. A reflexive rally seems over-due considering the unrelenting sell-off for a month.

Hammer1 - "For some us it may also be beneficial if some of the experienced traders identified what they feel are misguided posts... ones that may lead a novice trader to make poor trades. They also might provide a detailed explanation as to why they feel that way."

I support your request 100%, thanks for putting it out there.

I have been reading this site for a couple of years. I began trading actively in 2007, and backed off in 2008 as I took on work commitments that use up the bulk of my energies. I can credit Bill and several members of this blog with helping me navigate the markets more successfully by increasing my understanding and helping me reduce the number of emotional factors in my decision making. As a result of the teachings and commentaries I read here I was down to about a 15% equity exposure prior to the great crash. I greedily increased that to about 30% last October - watched it lose though March and recover through June. I sold down again this summer to see which way the winds are blowing. Anecdotally, I have outperformed many of my peers. I am guilty of taking advantage of Bill and this community as I generally read Bill's comments and a portion of the blog everyday, but haven't had much to offer. When my work commitments decline I hope to be a more active participant. I do not find the sidebars and tangents distracting as I can simply skip them if I don't find value in a particular comment. I have been disappointed to see various posters who offered insight and wisdom stop posting here. Perhaps Bill has the feedback on why people move on - too much ???, but from me - Thank You!

JSAXMAN

Bill,
I am a lurker, I check your site every morning and I often check the board during the day. Personally I come here to read the "trader notes" and then your general morning commentary. Nice to have someone that really knows the market and has contacts in the industry give me a broad picture of what is really going on or where things may be headed. I find your advice to be really quite good or I would not bother coming back each morning. Thank you for that I appreciate hearing what you have to say. As a side note regarding the comments of others. Personally I do not bother reading most of it. I generally scan the post topics. Topics about specific stocks like UNG or BAC I will often read to see what people are thinking.

As why I think YOU do it. Honestly I have no idea. All I can come up with is that you LIKE to do it. You are getting something out of it personally. At your age, in your position why you want to put all the hours and money into this I am not sure. I certainly appreciate it, as we all do, but 100hrs a week? What do the people who love you think about that? You know that song "don't blink" Thanks again I'll be lurking.

Hi

I frequent this blog for the opportunities to learn about trading. It has been over a year since I started reading Bill's comments daily. In that time he has had a positive effect on my trading, enough so that attending the first annual Cara Conference was an easy decision.

It seems to me that Bill is here to educate people and have a positive influence on the world. His area of expertise is trading so that is what he helps people do, but I think if he had chosen a different career path he would still be helping people if in a different capacity.

One of my personal goals is to learn to trade successfully consistently. This blog is helping me reach that goal. I am very grateful for this service.

WSJ article re more individuals trading options.

Posting link as there is a very good chart graphically explaining how a naked strangle works.

http://online.wsj.com/article/SB125202073403184971...

sold at $52.80 all of my position...looking to close positions before the holiday weekend to clear my mind and enjoy the weekend.

sold both at $1.66 and $168.80...flat going into the weekend.

I have been reading this blog for several years and contribute sparingly. Thanks you, Bill, for your practical, insightful commentary/guidance which I consider invaluable. I follow your blog and Charles Kirk every day. I have also learned much from many contributors, though my eyes begin to glaze when the political/guns rights/etc. ramblings become so numerous, but I mostly bypass those quickly. I am not here to listen to those who seem most intent on listening to themselves talk, but sometimes even they offer insights, despite all their unnecessary bravado.

I trade short term and longer term with most stock allocation funds committed to the latter and in the form of individual stocks. Overall, I am currently 36% in stocks, a larger portion in corporate bonds of short duration, and the rest in cash. Usually, I hold 50% or more in stocks. Recently, being mindful of a very uncertain market, I have bought longer-term stocks that carry a significant dividend, show charts of long-time ascending patterns with minimal, major disruptions, and currently sell at a steep discount to historical values. Accordingly, I have bought the following stocks in recent days that meet the criteria listed just above: Health Care: Becton Dickinson (BDX), Abbot Labs (ABT); Energy: Total (TOT), Conoco Phillips (COP); Defense stocks: Raytheon (RTN), Flir Systems (FLIR); Timber: Plum Creek Timber (PCL); Telecom: CenturyTel (CTL).

For both short and long-term, I bought yesterday, at $7.85, Sun Health Care (SUNH), a stock that has been clobbered to its 52-week lows because of the uncertainty about federalizing health care. Assuming something will happen that is much less than what liberal democrats seek, I think SUNH has good prospects of significant appreciation both in coming days and over the next several months. It's management seems focused and the balance sheet shows it. Obviously, demographics increasingly support their main emphasis--affordable long-term care for older folks. Unfortunately, it carries no dividend.

Thanks again, Bill, for all that you choose to do here with your blog.

Play, I too would like to see more explanation of trades. How about yours? If I get to the point where I can sort out my reasons, I will add some. Most times its an emotional Hey I don't want to be left behind!
peace from North Puget Sound

Good post Freedom. Thank you. I am trying to wean myself away from the 2x, 3x ETF's and inherent price decay over time. You provided some good ideas I saved your post.

Enjoyed your most recent post. And I have to thank you for sharing (again) that very important observation about loss of capital and the % rise to recover. We should all look at that every day... It should be posted daily. When Bill changed his site, I renamed myself knifecatcher to remind myself of my financially self-destructive tendency to buy a stock just because it is "oversold" or to deny the fact that I made a mistake while continuing to "average down." Thanks again for your contributions...

KC

as for me, everyone knows why I am here.

I'm here because this is a rare site that is led by an experienced and successful professional who clawed his way to the top, but never got lost in greed and never lost sight of the "regular guy" trying to make a living competing on a playing field that is far from level.

I'm here because there are many others like me who share their mistakes and successes so that we all can learn.

I think Bill is here because he has nothing to prove to the puppet masters that control our financial markets- he has proven himself and has taken the higher road of sharing his knowledge and experience with strangers and people like me who have come together to learn and try to achieve freedom through financial independence.

Thanks Bill-

KC

gold strong. i let go of uxg 5% too soon. but making money in IAG now by picking it up on the pullback.

Market shrugs at the news and proceeds higher... So why exactly is gold rising so quickly now of all times... Something's up; pray tell but whom dost thou wish to deceive? In the leaving of thee no soul shall grieve.

The market rally can't continue on this pace forever...

I've been a reader and rare commenter for several years after hearing of Bill from a friend. Later, had the pleasure of a few minutes chat with Bill at the Toronto PDAC.

At the risk of sounding like a sycophant, I'll echo the applause for Bill's willingness to share his wisdom and insights. The structure he has created here with technical information, his commentary, the CTAB's trader notes, and this blog is fantastic.

As a swing-trader, the RSI-based buy and sell alerts have become primary tools/techniques for me.

I've no particular skill or insight to bring to the table, but on occasion, I've offered up something I've been looking at, (i.e. the TA on whatever stock), and welcomed other comments on my assessment. I think it likely that I've got more out of any ensuing discourse than I provided, and I thank the group in general for that.

Like many of us, I skim past a lot of comments on here that are irrelevant or at least irrelevant to me, and I sometimes wish someone hadn't bothered. But, I suppose that's the nature of a blog to a certain degree. I'm glad Bill has stepped in when things really got out of hand and I admire those posters who have been very tactful and diplomatic in their attempts to moderate, remind or re-direct.

My thanks to Bill for doing this and my thanks to those posters that have educated me with their well-considered thoughts and remarks, (i.e. why they're making their trades).

So HNU is up 10% after closing with its daily RSI just under 10. So, if this rally sticks, that's a pretty good indication that this indicator captures capitulation with these leveraged ETFs as well as it does with regular old stocks, isn't it? Especially considering this is exactly how things worked out with HOU. What do you bears think?

It's just a hypothetical question at this point, because we have a long way to go...

I am here because it is critcal to know the truth.
This is the only blog I read.
We all owe you Mr. Cara.
Thank you Mr. Cara for providing this quality platform of info and sharing of ideas.
Bear E

Hi All - Think it is the current administration. U.S. total credit market debt is 375% of GDP. We are witnessing the destruction of our economic system. Happy Trading - most of my trades are going to Canada these days.

CP,

I read this somewhere in the blogosphere:

"gold rising could be because of people rotating away from oil as an inflation hedge due to the CFTC cracking down on commodity ETFs"

re Shark (or sharkee) doubt that he's been banned from many sites, maybe from the religious right........
Sometimes his comments are ver-r-r-ry good. Useful
occasionally he's a wingnut.

I admire your wit, but no, I haven't ever been banned from any other site.

"After Tuesday’s sharp rally, it is not surprising that the dollar has given back its gains especially with U.S. equities oscillating in and out of negative territory"

Sounds like muddling through a range at the moment davef. The analyst or the site is not offering anything more concrete:

http://www.fx360.com/commentary/kathy/1883/us-doll...

edit: suggested that dollar outcome in near future could be determined by strong gold price - apparently a gold/Euro correlation.

Many said it well, none better than KC when he said:

I'm here because this is a rare site that is led by an experienced and successful professional who clawed his way to the top, but never got lost in greed and never lost sight of the "regular guy" trying to make a living competing on a playing field that is far from level.

Personally, I never met anyone who knows the industry so well who was willing to help me. I've been able to develop a style and rhythm that works for me. The results are in and it's working ever better. Let's face it, every time we place a trade, we don't know what is going to happen.

We are community. It's intimate. It's relevant to social equity, be it trading ideas and commentary, useful intelligence gathering, sharing personal insight and context, be it family, political or social, Many have spoken today letting us know they are here. It's a safe place, a good place to practice "humaning".

The only other place that provides me with a balanced view and community is Minyanville. Between these two places, a man has a chance to succeed with his money.

Thanks all.
I'm away for over two weeks so paring down holdings. Booked profits in Aapl, SRS and VMW this AM.

I have this to contribute for your managed money accounts. I will have money parked in TCP.TO, and PME.TO, two well managed closed end funds. TCP offers an exit at NAV Dec 31, (Currently 11.87), PME's manager is a shrewd trader, distributions coming out of profits.

Here's where I track CEF's. Click on columns to sort.
http://globefunddb.theglobeandmail.com/gishome/pls...

It is good to see the volume of discussion dealing with the issue Bill requested the blog to deal with today. I find that this is often not the case.

I have been involved with this site for a number of years and have contributed my thoughts and investing/trading history at times I felt it might be useful to some participants.

I read the Daily Report daily, the WIR weekly and the C and C daily and make a summary of Bill's insights, knowledge and trading expertise.

I am in the process of sorting this info into various categories.

As for the Blog it seems that some participants have much to say and tend to dominate the site. I was advised that it might be better to listen carefully to those who may not talk very often as opposed to those who are always talking.

My most disappointing days are those when Bill hasn't contributed much but then again when I see his "colour" I know I better read what he has to say. In this case "Less is more."

"Something must be up"

Here's a partial list of what may be up.

There has been mention or rumor of China announcing some commodity derivitives are null and void and their corresponding investment into the IMF SDR account, and as a result, a large bank or banks who are the counterparties to these derivitives, may experience extreme financial duress.

GOVERNMENT SOLVENCY

It is increasingly obvious that many government funds and accounts are rapidly depleting. Government sponsored entities have become the toxic garbage dump for the banksters fradulent mortgages.Fannie,Freddie,Ginnie
FHA,FDIC and the Fed are awash with the questionable paper assets.
Quantitative easing or printing money from thin air may continue as Bernanke has painted himself into a corner.

Add promises due to PensionGBC, Medicare, Medicaid, Social Security and let's not forget that giant sucking sound of all things military plus a huge tax revenue shortfall, rapidly rising interest costs plus increasing demand for unemployment comp and food stamps lead one to question how long this situation can exist until it self corrects. Down the road in the next 24 months, a large number of residential mortgages are up for renewal plus a questionable fate for the many commercial mortgages which are due for refinancing. The pyramid of debt that is built on deflating assets is quivering and if lower values lie ahead, and the mark to myth method of accounting grows increasingly absurd, the financial house may crash.

When will the curtain rise on the charade of solvency being portrayed by Congress,Department of Treasury and the Executive branch and the FED? Many
foreign creditors are growing increasingly skeptical of their dollar investments. Their actions may have a powerful effect on our demise.

Blowout Preventer: I don't post much, but what I've learned here is invaluable to me. Three years ago I didn't know anything about managing my capital except to "buy mutual funds and don't try to time the market."

Thats me too. I read the blog every day, but post rarely because I don't feel I can add anything to the amazing talent that is here.

Regarding why Bill does it, one phrase I have not read today is "Social Equity". I think Bill saw a system that was loaded against the retail investor and decided he could not leave it to prosper unchallenged. It is a rare man who can see through the obfuscation to the fraud and corruption that pervades the markets today and speak truth to that level of power.

In that regard, I for one do appreciate some the threads here that are not strictly about trading.

As I suspected yesterday, fate did guard me against myself when ETrade did not allow me to buy HND.TO because the funds from my previous trade have not settled. Let's now watch this NG rally closely, and if Tuesday will be a down day for NG, then it would be a good indication that NG is going much lower, since a one-day jump (which reverses the next day) after a huge multi-week decline is still a mark of a weak sector.

Pokes holes in the data. Reality check.
Real unempl: 16.8%
33% claims >6mo
Stimulus not addressing serious shortage of real jobs, but rather has been aimed at increased borrowing for houses and cars. Recipe for failure when this medication wears off.
Technicals positive, valuation and liquidity negative. Bear Market rally. Risk is high.
Tight leash.

I tend to favor the tech sector which I feel will be least affected by slowdown. Being connected is a staple. Alternative energy. Clean water. Companies have cash on the balance sheet

uh Bev, just had another look at UXG. There's the breakdown I feared that had me bailing so quickly on UXG. I've had profits slip thru my fingers so many times on gold miners that I am not holding for long. Hope you profited from the brief top.

Bev, it's my fault - the daily volume hasn't changed considerably but the circled spike in volume on the 5 mins indicates distribution - didn't take time to notice. Sorry. To help with that "deer in the headlights" feeling may I recommend Vad's book for seeing and dealing with such situations. FWIW

re: "longside breakout???"

To me it looks more like a sentiment driven rally. Possibly some shorts are covering before the long weekend, and most of the longs "know" the price should go up. UNG has been trading mostly with a 14-16% premium over NAV today, roughly comparable with other days.

Spot dropped to $1.83 (ICE data) today, down .22 from $2.06 yesterday. Big divergence in spot price and Oct futures price (currently $2.70, up from $2.51 yesterday). The futures are still in the downward-sloping trend channel.

This could be the start of the price volatility that I have been expecting. It could get exciting from here.

Check out the daily chart for today. Tight range +/- 0.02 for the past 4 hours or so. Very interesting. BB tightening. Looks like it's ready to pop - just not sure which way... I'm hoping it's up- in it for a day trade....

CP,

"The market rally can't continue on this pace forever..."

That's exactly what I thought through most of the 1990s. when tech stocks with no earnings kept going... and going... like the Energizer Bunny.

I believe we're in a momentum driven up move now fueled largely by managers who missed a lot of the recent gains and are more afraid NOT to be in. As in the past if everyone is wrong their jobs are safer.

This is why I manage my own money.

I am not a patient person by nature, but keep resisting the temptation to act before a direction is clear and rational.

I'm turning on the CNBC sound occasionally and hearing so much about "less bad," "things are stabilizing" "people earning higher wages" and similar lies that it gets easier to wait.

keeps working. The buy limit order at $12.50 was triggered today for the shares I sold yesterday at $13. I placed a sell limit order at $13 for these shares once again.

re: "Freedom57, can you please provide the exact link to the ICE data for the real-time spot price? Thanks!"

http://intelligencepress.com/

Look for "Henry" under ICE near bottom on left. This one updates hours before the box above it.

Grym - That works for me, a level-headed approach for sure. Keeping a tight rein on my stops and plenty of cash on the side in case of an "unpleasant" event. When one of my favorite money managers commits over 90% of his buying power to $USD cash, that tells me something...

David- Following through on my thesis from last night...Short KGC/SLW 11.60/21.88, TZA/14.94. I WAS surprised to see $USD take that .5% hit early today, but we are only 70 cents away from the previous low last summer.

David

What you say makes a lot of sense. But I always seem to sell right before a big move up. Dell was my last great example...left too much $$$$ on the table on that one. I do agree with you that the market is topping, but I have noticed and even John Murphy of Stockcharts.com pointed this out that the increase in treasuries and gold seems to be a safe heaven for traders now. So if the market takes a nasty turn downwards, then I wonder if gold and the miners will take off upwards. The reason for the big dump of gold stocks in 2008 when the market went south, was because a lot of hedge funds and folks on margin were forced to sell their good holdings. So maybe this time it will be different. Whats your thoughts on this line of reasoning?

I discovered this site accidently when I was researching RSI. First I discovered the triple RSI tool and then the community. I was really amazed this was a free web site. I kept thinking to myself that my 30 day free trial would end. After a 1 ½ years I’m still here, free of charge. I think what Bill wants input on is the entire site not just the community chat. His exhaustive analysis on all sectors of the market and his extensive week in review is amazing. The only negative one could say is that there is simply too much information. In addition the company analysis by Pierre is first rate. I feel like I’m part of a trading firm when I log on to the site.
What attracted me to the community chat was the even handedness that the traders/investors approached their trades. This is in stark contrast to nearly any other stock forum that I have visited. The other sites seem to be all hype, stock pumping and vulgarities. The Cara community is appealing because of the diversity and camaraderie among the members. The trading aspect is only part of it. I enjoy the diverse discussions and interests. I look at it as a community not a trading only forum. Really even if the traders listed reasons behind their trades it would be as dull as Major league baseball. A whole log of “ A black Mariah is emerging from a double doji gravestone so I am long DRYS.” Would bore to tears. Who could read that on a daily basis? I feel all the other discussions enrich the site and you don’t really have to read everyone. There is a stream of consciousness in its presentation.
My one gripe about the community chat is that I find the focus of the community is on too few equities. Most discussion is on 2x, 3x ETFS and high beta crap stocks. We have written a Russian novel on UNG while nearly all of the CARA 100 gets ignored. The CARA 100 stocks and sector leaders that Bill diligently keeps us up to date every single day should be more prominent in our discussions. I have a feeling Bill is wondering why go through all the trouble of providing us with this data if all we are going to do is discuss and trade UNG, SRS and FAS. In addition Pierre does extensive professional analysis on companies that trading houses would pay small fortunes for and we don’t even mention it. I hope Bill is not planning on changing any of these aspects of the site. I feel because of my time constraints that I can just come here to Bill’s site and keep completely on top of the market. I appreciate what Bill has provided for us and I can say that I utilize all aspects of the site and appreciate the hard work, time and money it takes to keep it going. Bill I sincerely thank you for your charity.
Bob

re: "who determines the spot price?"

This is the price determined by commercial buyers/sellers for next day delivery (or for over the weekend for today's settlement).

If you click the blue link below the quotes in the ICE data you were just at you can see the prices at various hubs, of which the Henry is just one. It also gives volume at each hub.

I just read another $70B of Treasury auctions are in the pipe for next week. Perhaps this explains some of today's Treasury price action and maybe some of gold's fervor.

It will be interesting to see if it succeeds or fails. During this rally, these sorts of formations most often have succeeded.

At the same time, SPX closed at the important resistance level today, and if SPX goes down on Tuesday, then I will be piling into short positions. Tuesday will be the judgment day, IMO.

David

Thanks for the response it may be a good idea for me to at least lighten up on UXG. Maybe next week I will have the opportunity with the schedule bond auction on the 8th-9th.

Enjoy your weekend!

Kostohorycz provides contra view on unemployment numbers. (In view of my posting Rosenberg's view earlier today)
Natural factors mean growth with no increase in unemployed statistically, because demographically new people always joining labor force.
Wages are increasing.

http://www.minyanville.com/articles/unemployment-e...

I have no special insights of my own, these are about who I'm paying attention to. If the community finds this kind of post redundant let me know.

David - There something about this recent move that is telling me this is the one that takes us above the psychological $1,000 barrier. Since the dollar has considerably weakened over the last few months, gold and silver look attractive on a foreign currency basis.

While it is true that a switch to the metal itself (from miners) will reduce volatility, it will also considerably reduce your leverage if we do hurdle the $1,000 gold mark.

Another thing I find very bullish is that the last few months, I've felt, have really soured many investors on mining stocks as they have generally underperformed the S&P from about June 1st until this week. Then GDX went bounced almost perfectly off its 3-month SMA @ $38.70 and moved driectly to a new high above $45 in two trading sessions. I think this 2-day vertical move has caught many investors/traders highly off-guard and highly underinvested in the PM sector. There was literally no time to accumulate for a slow protracted up move. So, I think there could be a lot of chasing to be done if we can clear the $1,000 gold hurdle.

Of course, if we get some indications that the Fed /Treasury are ready to mop up some liquidity, perhaps the party could be over and a "triple top" could be in. But thus far, I really haven't seen evidence of an effort to do so.

Switching from miners to metal is really an issue of how much leverage to the price of the metal one is comfortable with.

They sure could use a guy like you, Bill, to set up a Cuban stock exchange ;)

"They sure could use a guy like you, Bill, to set up a Cuban stock exchange"

That's not a bad idea, it would be a blast to follow something like that.

The next step is negative interest rates, and that has been discussed a couple of times by the Fed. The Swedish central bank is using negative overnight rates. Japan used negative rates for a time.

Fransix - "The next step is negative interest rates"

Good point, we shouldn't forget to add this to the list of positives for POG. To add, I read on another blog there have been pre-G20 "leaks" that stimulus will remain in place.

Been a long time lurker, first time poster. My background was in penny stocks, VSE , OTC market where one buy/sell millions of shares of stocks at prices fractions of a penny. Of course one always joins the proverbial board, and know quickly who the so called gurus, pumpers, bashers, and the sheeps (pigs being led to slaughter) are. Made money playing the pennies, but lost when playing or “investing” in so called blue chips. When trading in the OTC market, your best friend is watching Level 2, and always play the play. When I got into large cap and had little knowledge of 50d/200d MA, RSI, MACD etc,, lost 50g one year. One of my winner was getting into Diamond Field (a Robert Friedland, Voisy Bay play) at less than 4 bucks, sold at 20, moved on, and then watched it go to $120 before being bought out by INCO. Needless to say, I was pissed !!! Also, was thinking of getting into Bre-X at the time when it was at 11 bucks, never did, then proceed to watch the scammers ran it to 280 bucks.

One thing I have learned over the years, and thru the dot com era, is never to play with money you can not afford to lose. Take care of your family first, make sure one has enough money for rent, food, and the basic necessity of life. Only play with money that you could afford to lose, and that if you do lose it all, it won’t make one bit of difference in your livelihood. This is especially true when trading on the OTC board. Know one guy personally from work who dropped more than 200g because he believed the pumpers to buy and hold, never sold, kept waiting for his ship to come in. Of course they never did, most of his penny stocks had since been de-listed, and he was left holding worthless toilet paper.

Discovered this site year and half ago, been reading Bill’s daily commentary religiously every morning with my first cup of coffee. Thanks to Bill, moved most of my investments to MM funds, treasuries just prior to the big drop last year. Subsequently, never got hurt by the big market drops, whereas some friends and colleagues lost 30-50% in their portfolio.

I’ve learned a lot from Bill’s commentaries, especially on risk management, RSI, and bought/read his book. This is the only site which I access regularly, and have time for (am a first time dad, to a 17 month toddler boy). Because of Bill’s willingness to share his knowledge and experience with the rest of us, I feel my son’s future inheritance is secure. This I thank Bill from the bottom of my heart. I hope to make one of those conferences one of these days.

Compare to most of you that post regularly here, my TA knowledge is lacking. When I have more time and knowledge, I hope to be able to contribute more in the future.

Thank you Bill, it’s people like you that makes a difference in this difficult world.

Warmest regard,

SBW

I give it 3 MONKEY's!!

I visit this blog on almost a daily basis because I enjoy Bill's daily report and his other comments. He is smart, and his writing is clear and intuitive. I also enjoy the occasional Quant section reports by Pierre Brodeur. Similarly, his reports are clear and intuitive. I barely read this message section because, except for an occasional post the messages are not relevant.

http://www.youtube.com/watch?v=C2rDp6FnbP0

http://www.youtube.com/watch?v=TJNH6l9APJU

My personal thank you to Bill and every member who has posted, past and present.

Craig, teamonfuego, MarkW, Bull Hunter, David, davefairtex, Freedom57, Hammer1, Chickenpookie, shark_attack, MarkM, jasper, moneygenie, vanillabean, vinod, NYUGrad, Telestar3D, bobbyo, MoKat, nemo, rosevillebill, BillySundance, number2son, Bev, Mackinaw, Grym, Vad, Les, Lori Smyth, found, grasshopper, sammas, bsi87, baz22, Bear E, knifecatcher, Seamus, jock, allen, allengg, westcoaster, aiki100...hell, to do this right, I would have to list every single name, as each is an individual with his/her own history, perspective, strengths/weaknesses, and unique psychology. Who am I to judge an individual post, one which I may gloss over out of fatigue/inattention/distraction/absence/(ignorance, even), but which may resonate with another member at exactly the right time? Once you get to know someone (and given enough time, we all start to know each other), the blog becomes more than a forum for trading. It becomes a blog about trading and community. Or trading and life. And in the end, do you really have separate compartments in your mind for each? Does one not inform the other? Trading is psychology, and how/when do you separate one from the other? A community is not unlike a living organism, which finds its own way as it grows. The Cara blog evolved into the Cara Community, which in 2012 will not be the same as it was in 2009.

I have a different background than most of you. I'm in the Chinese medical field and hold a lot of alternative views.

I started investing in 2002 after my husband lost 2/3 of our $$ in Janus tech funds. I felt that I needed to be more empowered in the financial area - didn't know much about it - haven't spent my life trying to make money, more interested in knowledge of my self. Actually, a friend who was a vp for a brokerage, tried to interest me in being a broker more than 20 years ago - he thought I'd be good at it - but when I read up on it, it seemed very boring.

Fast forward those 20 years and I had a Scottrade account. Luckily, now I found it VERY interesting... From paying attention to my alternative sources, I had been anticipating the downturn for far too long and was a very conservative investor. Didn't make as much as I could have, but came out way ahead of the crowd when it all finally came down.

Business has been falling in the last year or so, so we decided that I would get more active in the trading world. That was when I found this blog - last September. Needless to say, it has been a difficult beginning to a trade that has so much learning involved in the best of times.

I used to try to read a lot of sources, but now only read a few. I count on Bill and the rest of you for your groundedness and knowledge. Thank you very much!

You are all so knowledgeable and I feel privileged to have connected here. Even though I sometimes skip through things, I agree that everybody and their differences is what makes this so successful. I don't post much - not much knowledge myself and a very different background - but I truly appreciate having this resource.

play,
I have read and interacted on occasion here for a few years. I used to read Bill's blog daily and now occasionally. Each trader in whatever time frame has to find the community that fits his/her style. When you find that site it will feel like home to you with a group that melds with your desired style. For me that has become Tim Knight's "Slope of Hope". Many day traders there that express their actions behind their trades in real time. Not I bought this security at this price; I sold it at that price; high five! I have only been there a short while but I can see that it is going to increase my trading curve as the weeks go by. I like it that Tim Knight puts this trades on the line everyday for all to see and "judge" as well as the other participants. They are that confident. For me Bill's blog has become more of a social economic political blog. For many traders that could be viewed as a means of deriving a sentimental view of the market to advance ones psychological herd perspective view to trade against. As for Bill, he does have a trading system that works for him and it is explained in detail for anyone to understand. He also lists his position view through the use of the Cara 100. The "week in review" is read world wide and if nothing else read that each weekend. It should be in Barrons.

Long time lurker, infrequent poster. I come here for Bill's 'BIG PICTURE'. Former retail broker in Florida, 1997-2001. Learned on OPM (other people's money). Tried trading S&P futures, found it too nerve wracking and requires too much focus. Grew to love reading Investors Business for trading ideas but their new high breakout and cup and handle technique can be costly in a bear market. The combination of the techniques (RSI levels) offered on this website with Cara research and IBD's research are great. I've also taken advantage of many of the tips offered on this site. Traded BC (incorrectly and lost). Made money on TCK (4 to 8, sold way too soon), made money on UXG and NGD. A year ago I mistraded and lost on DUG. One year ago made money on gold. My advice to anyone who will listen is find your niche. My biggest problem as an investor is sometimes I don't make enough time for the market and other times I overanalyze and don't pull the trigger. For me, if I do some research, write it down and follow through I do okay. If I don't trade or neglect positions I miss out on good opportunities or I lose. The only thing I lack is accountability (to myself) and I think I could improve that with a trading partner. Happy trading and thanks Bill!

8800 Dow, and 940 S&P... My best trading partner said I was nuts when we were talking in Oct.. 08' and I told him 6500 Dow was very possible, because that gap had never been filled from the Cisco/Msft, etc. era..... actually, that was my first post on the ' new ' Cara site ( Dec. 08' )... This seems a little easier, and that is the one thing that bothers me... it is to obvious.... anyway, great posts from all... you guys make this site work, and I thank you all for that...

Another reason average income would have risen is because minimum wage was just raised. That's fine for those with jobs, but teen unemployment rose quite a bit, I heard, many of which would have gotten minimum wage if they had been able to get jobs. Sadly they didn't, and their 0.00 wage doesn't get averaged into the equation, I bet.

LOL.... just finished reading the daily posts....Brilliant.

Good night, Bill. Sleep well. Sweet dreams.

jaycrescent - "rotating away from oil as an inflation hedge"

Okay, yet another excellent point for consideration. Thank you all, the collective thought process is an empowering tool.

Newsflash: The Mortgage Bankers Association has a plan to dump Fannie Mae and Freddie Mac, replacing them with several new (to be formed) "Federal Mortgage Credit Grantor Entities". Bankers want to fund the loans and sell them as bonds with their own guarantee, paying the government for backing them. Gee, wonder who would handle the rating of these bonds?

Now doesn't that sound kinda like FHA? (The same FHA now challenged by losses by such august institutions as Wells Fargo). Suddenly Mortgage Bankers feel they need to distance themselves form Fannie and Freddie. They are losing their grip on FHA due to the higher risk factors. Guess the loans the Mortgage Bankers sold Freddie and Fannie tanked those ships; so now they want to captain a new one with their own flag? HA!

Kaimu's reference yesterday to the USSR's treatment of workers was sobering: Recently a Russian family came to see me who had suffered an enormous loss. They meanwhile trusted our banking and legal system ...and frankly our system had failed them miserably. I cannot tell you the angst on their faces of having come to America only to lose years of hard work to system snafus. I had to get their children to translate this extremely bad news. So what have we become? Back in the USA--EH?

So what does this have to do with trading? I used to say to my design clients: "Everything affects everything". I come here to learn and try to absorb how decisions made in the equities market affects the lending world. There are many facts, social influences and psychological factors at work. It's a very complex interplay that I find facscinating although I barely understand it. Like quicksand --the moment I think I have grasped something-- things change.

Thank you for letting me hang out here, Bill. Your perspective is invaluable.

ALOHA !!

I found this on YouTube and totally agree with the views expressed here ...

LINK: http://www.youtube.com/watch?v=j7M-7LkvcVw

We here in America have only two real choices regarding our future direction.

ALOHA !!

I thought I'd do that INTRO in Spanish in honor of the Latino influence of "Bill & Pat's Excellent Cubano Adventure"!

I have been posting here for quite awhile and in fact I cannot recall how I first found Bill's website. Honestly ... I just appeared here one day! I am always drawn to people with salt of the Earth experiences who have been in the trenches of business and finance, but not just because of their in-depth experiences, but more to their willingness to impart their experiences in a manner that is not elitist or stale statistism wrapped in endless ribbons of narcissism. I most enjoy people who are not afraid to be real and who are not afraid to allow the chance that "outside the box" thinking should be the norm and not the abnormal. Free thinkers and their ideas have always given this World its greatest opportunities and its greatest advances. I believe Bill is one of those people and I have to honor his commitment to his chosen theme of this Blog which is this ...

Capital Markets and Social Equity; Perspective and Discussion

I like that motto, that banner, because it does not define our paths and box us all into one way is the "right way". It does not define us and limit us to a profit guru. It instead leaves us room as a community to think and act like a community instead of a dictatorship led by an egotistical despot who overules free thought and resilience.

Life only offers each of us a set number of opportunities before we pass on to the universe of the "unknown". You only have so many chances to make life changing decisions and you have "x" number of trades in your life to execute, just as you have only so many heartbeats remaining, so we have to make the best of those opportunities when they arise and I think Bill and this Blog offers us tools to first "recognize" an opportunity and then to use better tools in order to chose the best path for each of us. Ultimately Life is a series of paths and we are where we are in Life right now because of our own choices. All along there are many people and diversions who want to influence your choices. It is our gift to ourselves to accept those choices as the best we could do under the circumstances of time and life experience. The worst thing I can do to myself is to judge my decisions, my choices, as wrong or right. They are in fact neither, they just "are". I just have to "let it be" and see where my path leads.

God knows there are plenty of forces in this Country and this World who would love to see nothing better than capitulation and control of the masses. There are so many obstacles to Freedom and Liberty placed in our way by those who would want less than that, so it is with great happiness that I can have a community such as this as a safe harbor from such fraud and deceit. A place that sees Social Equality and Fair Markets as a right for every person on Earth. A place that puts the individual above the Banking Oligarchy and the Congress of monetary slavery. This is a WE THE PEOPLE online financial community. I believe this is a "resilient community" and that is why I am here.

In January 2009 I flew to the Bahamas for no other reason really other than meeting Bill and seeing the Bahamas. That was when I met Bill for the first time and found him to be one of the "guys". A guy you could sit down with and have a Kalik and talk about anything under the sun. He is a busy man and a busy man with a lot on his plate and there is no getting around that. He has a very large network and it seems every time I turn around he is making his network ever larger. But that is Bill and he lives life on his terms and I like that about him. He makes waves and I like that ... Coming from a surfing culture making waves is the highest achievement.

During the CTAB Conference 2009 I really did not know what to expect of the group of Caraistas who's only connection was Bill's Blog. All I knew of people were mainly handles and text. To be honest it was the first time I had met "internet people" en masse. It was a very enjoyable experience for me and I enjoyed the diversity of the group in all aspects because we all come from different experiences and different places in the World. It was a warm feeling that I chose to do again!

I do sincerely thank everyone here who posts and does not post. Like that line in the movie "As Good As It Gets" ... "You guys help me to be a better man!" I think that is what its all about .. to better ourselves through sharing of our knowledge and life experiences. We do the best we can for ourselves and our families and friends and that is what it is.

We all live differently. What works for one person may not be remotely possible for another. One person may thrive on risk and another be aghast. As some may have time to sit here and trade all day long others do not have that and furthermore may not want that. For some of us we have horizons that last minutes and for others they may last years. Who is to say in the long run what is best, because the long run is what matters most and there are many transitions to positioning oneself for the long run and they do not come in a "one-size-fits-all" plan!

It has taken me years to get where I am and it wasn't one trade and one lesson. It was a multitude of trades and a multitude of lessons, but of all the lessons I have had to learn in life the most important has been to embrace CHANGE. I have lost money before and I have made money. I have been engulfed in immense pain and tragedy, but the most important lesson when I was down and out was to "get up". Just "get up" ... keep going, because there is one thing that is a guarantee in life and that is life is always changing. Life is endless CHANGE ... You cannot embrace the next opportunity laying on the ground in self judgment and self pity.

There is no failure, there are just paths.

Mahalo ...

Technology is great until it isn't. Right in the middle of my post to answer your question, something happened to the PC & I lost the connection. Oh well, it is what it is. I'll try again, as it's too important not to respond. We don't want to see you go away, as maybe you're contemplating the idea.

Bill, I think you're here for lots of reasons. One is that you have a genuine desire to help people. It makes you feel good too. Another is your desire to see fair play & you are fighting for it everyday. You probably got bored in 'retirement' as well. Whatever your reasons, we're glad you're here.

I'm here to manage my retirement account. The company I worked for was gobbled up by a larger one & my job moved away, leaving me with a 401K balance to look after. I don't remember how I found you, but I think it was a link by someone on Seeking Alpha. Your commentary has helped me immensely, especially the research report on SLW. I wish I had paid more attention to your words on TCK. I got nervous & left prematurely. I would love to see more in-depth discussion on individual companies. Your description of playing Billy Ball and hitting singles has helped too.

I enjoy everyone's posts. Positive, negative, whatever. Have you ever watched old black & white movies/tv shows and thought about how people are the same now as they were back then? I doubt human nature has changed much since the beginning. That's why your website is so valuable. It helps us understand what people are thinking and how it might sway the market. It has also given me insight as to why HB&B, the FED & other manipulators do what they do. They are people too & exhibit the same traits as people always have. You are helping us understand this a little better & wade through the complexities.

Thanks

That was pretty cool. When it finished for some reason I started to recite in my head the Pledge of Allegiance:

"I pledge allegiance to the Flag of the United States of America, and to the Republic for which it stands, one Nation under God, indivisible, with liberty and justice for all."

As the resident wise guy I can say with affection "You love it and you should". Thanks again for all you do Bill.

Kaimu,

Thank you for the link to this wonderful, concise outline of the varieties of government. I finally was able to get high speed internet and this is the first YouTube I have ever watched.

I have always thought of myself as a Republican and for years often voted for those candidates wearing that label. Somewhere along the way, while I remain a republican, the Republican party has mostly forgotten what they are supposed to be about...

"The essence of freedom is the proper limitation of government."

The frightening thing is just how close we are to the last chapter of the Roman Empire.

Thanks again. I plan to pass this along to all my friends.

All,

Trust me on the UNG stuff. I work in the natgas business. UNG will see <7 before it sees >11, I would bet my paycheck on it. The reasons are quite simple. This will happen sometime in mid to late October and here are the reasons.

Storage is currently sitting at 3,323 bcf. Normally at this time of year we are at 2,822. Max storage is about 3,600. There is talk that storage can go to 4,000 but it haas never been done before. Weekly builds are averaging 65 bcf per week. This means is roughly 4 weeks storage will be at its all time high, or in other words unchartered waters. Current spot price of $1.83 means that futures prices have to come down, plain and simple. Storage usually continues to build until mid-November, this means up to 4 weeks where we are building above all-time levels.

I also bet there will be some no-bid days in the near future for nat gas, this will further drive the futures market down, and that is what UNG is priced at.

I would then expect a slow recovery for natgas. Many of the large operators are drilling wells to keep rig contracts. However, just because a well is drilled does not mean that it is completed. Just listen to the conference calls.

These companies complete the wells they have to to keep the acreage they have leased. They typically only have to complete one well per sq mile or so to hold the acreage. When they have held all the acreage, then they drill wells and do not complete them. Many companies are doing a lot of this right now. So when prices start to recover, they will not recover very much.

Finally, we have El Nino in the eastern Pacific that is getting stronger. El Nino winters are typically very mild winters in the US, specifically the northeast, where most of the gas is used for heating in the winter. To exacerbate the the situation, El Nino winters mean a dearth of hurricane activity, therefore the Gulf of Mexico production looks to be pretty secure for the winter. Therefore, as I have said before, there is literally a perfect storm for very low natural gas prices.

Trust me on this. Find the highly leveraged producers that have hedges coming off in October/November and short the heck out of them.

Good find Kaimu - I chose politics as a uni major but found that simple video a very refreshing reminder of the fundamentals.

Grym - you've got cable! Welcome to the 21st Century mate!

The questions coming out of other financial forums:
"Should You Be Worried About the Upcoming Correction?"

For me, such a discussion is a red flag in front of Goldman Sachs' trading computers. Look at the percentage gains and time lengths of previous bear rallies in the article - more bear burning to continue is the view I have moving forward.

http://www.fool.com/investing/general/2009/08/27/s...

I post the other day that regulatory change is being made to increase investment in China's stock markets:

"Hong Kong shares on Friday got a late boost after mainland China's foreign exchange regulator issued a draft proposal to raise the investment quota for foreign investors in local securities."

http://online.wsj.com/article/SB125202785214285493...

Playthegame, perhaps it wasn't clear, my reasoning for posting this the other day but I'll phrase the question now.

Are the Chinese attempting to attract more capital to keep the market floating? (regardless of the media report that it is intended to attract "medium and long term capital")

check out this video. You will see why you should stop worrying about all these other distractions and how to move forward. This helped me almost as much as Kaimu's last post, his BEST post ever. Thank You!

http://www.davelandry.com/WeekinchartsWMVs/2009-09...

You have my affirmative vote for this change, Bill. Nothing would be more useful than being able to go to such filtered comment content where most if not all the comments are relevant to the market.

Bill,
I will give my answer as one of the most important lessons I ever learned from one of my mentors, a most accomplished Australian stockman and esteemed dog man, the late Scott Lithgow. It is how I intend to act from now on.

"There is only one kind of control, self control".

Hi Bill. My two cents: While I don't post often, your analysis and commentary are a part of my daily routine. Coffee, a little breakfast, and Cara's Daily Report/Chat. I have learned a lot since I first found this site, and it has become very important to me. I understand the need to reduce the unproductive noise. But my concern about DA/DB, as put forth, is that "DB" might become more like a classroom full of teachers rather than students. In other words, there are probably many others like me who read with wide eyes and an open mind, but who do not necessarily offer any "value-add" material. Yet.

If I were to be confined to "DA" due to my mostly passive participation, I wouldn't bother reading the discourse at all. There are countless places on the Internet for idle chat. There should be no need for someone like you to provide a platform for that.

For recidivists and those who don't seem to care to listen, permanent IP banning from discourse participation seems like the more simple solution.

Les - "I would have no further inclination to post if I can merely check in from time to time for the "B" discourse."

I'll meet you in discourse A, I still want to hear your "ramblings"

I was going to suggest something else, but I am reminded that an alternative platform for communication exists besides this website interface - that of Skype. Would Si02 et al. using this platform mind if it was "hijacked" (it already is!)for discourse other than, but including trading? Everyone can be re/directed to the skype address and it can be used like twitter.

The website interface is restricted to a professional and/or serious trading group that we are able to monitor through skype - all web postings end up in the skype log - but the skype communication log is not entered into the website. That way I can have a yak with others yet monitor the pros chatter coming through as well. Bill is less distracted with non trading talk, yet I and others do not feel alienated by a selection process that excludes all concerns of trading.

Davefairtex, I enjoy your good humor and questioning mind. I also agree with the idea of being able to flag comments. The comments might be "shut off" as when you click the ignore button. Let's say a comment is automatically blocked if say, five (?) people flagged it as offensive or irrelevant. Then instead of breeding a gaggle of comments as to whether the poster was relevant, the readers would rule. I'd get the point pretty quickly if my comments were so flagged. If they are just "ignored" one could choose to read it or not as I now do with shark. The advantage of the ability to ignore a post is, if you see the title and you are really curious you can 'click here' to read it, having been forewarned. I now know to hold my breath before I choose to read shark's comments. I am spared the need to defend women. And Bill is spared my indignation. Works for me : )

I am looking for insights into the capital markets. And reactions to those insights. Seeing both in two different entries is entirely appropriate and likely enlightening. Attached is a daily report from Canadian Kevin Klombies I've been reading for years. IMRA has expanded my world and added understanding. I am a wheat farmer. I followed fundamentals for years with a nagging that outside markets have a greater influence than apparent. I've been reading Bill and community since finding you all last September. Good combination Capital Markets and Social Equity...those often don't go together. Refreshing and confirming, Bill and community, thank you.

Great Craig. You finally refined your trading system in to a viable money producing machine and you decide not to post anymore. What the hell. What about giving back a little. If your out I'm out too. I'm not going to be the only left leaning, gunloving, redneck on the site.
Bob

Its a wait-and-see for most, I think. We saw a rally and technically confirmed a breakout at the same time.

COT numbers don't always make much sense, though if they increase on a gold rally, you can be sure that the taxpayer is footing the bill for daily attempts at price fixing in the bullion markets.

By now it should be abundantly clear that anyone holding a currency rallying strongly should consider opting for bullion in the event of a currency devaluation. Gold is sniffing it out.

We had the IMF use $250b. this last week to stabilize some more shaky currencies, but we could very well see something of the nature of the Icelandic Financial Crisis happen in the G7. I had always thought that it would be because of a bond market rout, but it looks like negative overnight interest rates will be used to hold down long rates.

The ¥ has been very strong as of late, but Japan's debts run 200% GDP, apparently. But perhaps a currency devaluation had long been priced in with the ¥. I keep expecting the Japanese bond market yields to rally strongly, but no sign yet. The UK £ may also be closer to running into a devaluation. They are considering negative interest rates there. The gold price has begun to run in £, as it has in all currencies.

What makes me suspect the ¥ at this point is the extreme position of the Wilder's ADX black line in Yen Gold. Either the ¥ makes a powerful rally and limits the gold price in that currency, or the ¥ declines precipitously falling in line with the rest of the world's currencies.

But there is another wrinkle that goes unrecognized. I am assuming that gold isn't backing much of the paper trading in the gold markets, but rather something called "gold equivalent ounces." It came as no surprise to find that the COT numbers in the copper market are suggesting a top, and no further advance in the price, and that this comes on the eve of a major rally in bullion prices. I kid you not, its the only place where the COT number are making some sense.

If Mr. Rick Santelli can't get enough about reminding you how gold is just a commodity subject to rash speculation and an inevitable crash, then the bullion banks would dearly like you to believe the same. Because, that means they can use just about ANY commodity, calling it "gold equivalent." Copper is the practical choice, because the major gold miners are more copper producers than gold producers.

Then there's the Chinese. There was the story circulating that they would allow local commodities trading to dishonour derivatives contracts should they prove fraudulent. I am fairly certain at this point that it has to do with not receiving what you paid for, and that it has to do with trading in Copper, which has been the front runner.

And perhaps, it also means they were receiving tons of Copper in lieu of gold.

bobbyo,
I agree 100%. Why can't we have two discourses, one for posters looking for education on trading the differing time frames from the more experienced posters and another for those interested in sharing their views on socio-economics, politics and other liberal arts. The fact that some now want to leave doesn't make sense. Many of those are money making traders. Why can't they offer their wisdom to the new guy trying to get a start? It would just be easier to go to the discourse allocated to the markets/trading theme so that one does not have to spend the time sifting through posts on other topics. Tim Knight's "Slope of Hope" dedicates market time for trading and in the after market anything goes although much of it is about trading. Many their are holding positions overnight or swing trading so their minds are on topic. I guess that is what a vested interest will do to you.

This seems an unnecessary complication for you.

I, for one, will try to limit my commentaries to post market hours or better still weekends. I think much of the extraneous discussion has come due to slow market action and music, politics etc., a step removed tends to flow.

It doesn't seem to me to be difficult to determine whether I want to read a whole post or not and so I often just skip over until a topic catches my eye.

I do believe even some of the less interesting chatting gives a measure of what weight to give to a specific individual's trading and economic opinions though.

Ditto

"2) Crude has been trading like a 3X short dollar ETF. If you look atpure supply/demand considerations, oil should be trading in the $40-$50range, not the $65-$75 range that we have seen. That means that a $25speculative premium can be laid purely at the door of the big hedgefunds...

...One good way to play gold at this late stage might be the shares of highly leveraged unhedged producers like Rangold Resources (GOLD), Jaguar Mining (JAG), and royal Gold (RGLD)."

http://blog.madhedgefundtrader.com/

I feel lucky to have stumbled onto this well-directed site where I can read of the significant background and preceived trends in the international political-socio-economic world that are influencing the markets with volatility that is unprecendented for me. You add a calm to the chaos with your clear-headed approach to trading. Thank you for caring and for sharing.

I have to say I don't quite get it.

(a) Is it the entire silent majority that is complaining about the discourse? Or is it a vocal minority? If the majority of the silent majority actually enjoys the discourse as is, maybe they should make their views known.

(b) I enjoy the discourse, and it's not just because I participate. Even absent a voice, I would still enjoy the back and forth the way I enjoy reading dialogue in a book. These are real people with real problems, real emotions, distinct personalities and histories. So you're here to learn about trading? So am I. We all learn in different ways, at different speeds, and not all of us necessarily stay on the asphalt. Livermore's 'Reminiscences' is a great read as well as a great textbook because it bears the stamp of authenticity. It's a riveting memoir that teaches more effectively than a textbook.

(c) I would point out that it takes time and effort to post a comment. Some of us have made the effort to become 'acquainted' with members to the point where a 'one-liner' during trading hours can impart a great deal of information. (Who has the time to write a paragraph in the midst of a 5 minute trade? Some of us use that time frame, especially now. And we've taken the time to 'understand' each other's one-liners. Is it too much to ask that one either skip over the one-liners, or take the time to know posters well enough to read between the lines? We can't be posting the equivalent of a legal disclaimer every time.)

(d) How does anyone know that an off-topic post is a waste of time? Is it a waste of time to know that someone's struggling? To read how others have coped? To learn how setbacks in other areas of their lives help them to cope? To appreciate each other's wins? Or help someone using analogies from our past? Do you think that other areas of life have nothing to do with trading? Hey, if you want to walk into a cafe (or lecture hall, for that matter) and tell everyone who's talking about something you're not interested in/don't believe in/don't care about that it's a waste of time, you may need to look in the mirror and ask who's kidding who. And if you think you can compartmentalize trading away from anything/everything else in your life, then you have already wasted more of your own time than you can imagine.

e) I give credit to anyone who posts. At least they're stepping up to the microphone and making a statement. To ask the 'silent majority' to occasionally use the scroll button seems a reasonable compromise for remaining silent. I hope Craig continues to participate. His contributions far outweigh the occasional outburst (and if I think he or anyone else is out of line, I'll say so publicly- as should the rest of you). I don't demand perfection from others, and I certainly don't expect it of myself. We experience ups and downs, and they will show on a daily blog. Grow up- we all deal with potholes in our highways, irritating colleagues at work, flat tires/power outages/coffee stains- is it that hard to use the scroll button?

There are two issues here - ignoring the stuff you don't like, and providing feedback to the original poster. Sure its easy to ignore posts you don't think are worthwhile reading, but - wouldn't it also be cool if they could have the idea that their posting wasn't perhaps received so well by the community, but presented in a compact form?

That sort of feedback is provided by audiences for those who "get up in front of the microphone" automatically. Murmurs, the sound of crickets, booing, all that feedback is summarized by audience noise, and given almost immediately to performers who do not provide satisfactory material.

Having individual comments on posts is a "heavyweight" form of feedback. Giving ratings is more "lightweight" and compact. It's also easier. Its more like audience feedback to the guy at the mic.

I saw Oil Drum use it, and I liked how it looked - even though they stopped doing it after a time. I felt it was effective, and it definitely gave me a "sense of the community" when a particular comment was either highly rated or highly down-rated.

CP

I haven't literally back tested it because I don't know where to find actual data in summarized form. There have been a couple of article writers that occasionally post charts of the COT Commercial net short position vs price of gold, and if I recall correctly the only time in recent history that gold went way high without them reducing the short position sub 100,000 contracts was a couple years ago when it quickly got to 1000. I'll try to find a link to the chart if I can. If anyone has a link to somewhere the summarized data is posted, please post it.

I still believe, that with the amounts of money these people are betting, and the number of times they have proven right vs the few they have been wrong, that there is some sort of history of or at least expectation of unlimited funding and timed jawboning and/or actions by the central banks to make those positions pay profits. In short I don't trust the dollar any more than any other scrap of worthless paper, but I still have tremendous fear of the Fed taking the punch bowl away.

Its not like I lost anything from missing the move, but it bugs me that I missed it and will remember who's recommendations to consider following next time, as there were not many technicians saying to hold onto gold or miners a few weeks ago.

I enjoy reading your commentary and trying to learn the market ( offcourse the hardway by loosing hard earned money). I enjoy reading your WIR, Pierre's quant summary and your book. I am an engineering graduate in 30s, trying to manage my own finances instead of depending on financial advisors (realized only after few years of experience with FAs). I have been trading for the last few years with mixed success and failures ( in summary it is a loss of capital). One thing that I have learned is to step back and to see the big picture instead of getting conditioned to blind faith on a certain stock or a commodity. Your website has certainly helped me to be careful and try avoiding taking big risks that might affect your loved ones.

I really like what 2nd just stated here.

I have never understood why when someone in the silent majority are not happy they fire off a e-mail to Bill and zitch (B). Why are you hiding behind this veil? Why can't you just type a reply here on the discourse and discuss it on the forum? or just scroll! Are you not wasting Bill's time?

Kaimu, I have to say that I really enjoyed your post on life and change as being the only constant in life.

Craig, your grieving for your friend, my condolences. I remember his son's performance of Baba O'Riley by the Who, his genius lives on. I trust when your pain melts away you will return to sharing with us here.

http://www.youtube.com/watch?v=hKUBTX9kKEo

Bill (H1N1), I had that same thing happen to me a few weeks ago. I just shut down my computer and re-booted and the problem went away.

There's been some publicity over China's recently making gold bars available to the public for investment, but here's a clip that touts silver OVER gold.

Recall that China's currency was on a silver (not gold)standard until 1935 (when outflows forced a change to fiat currency) so the white metal has a special appeal to Chinese:

http://www.youtube.com/watch?v=AxSm4bycPJk

If investment demand for silver in China really ramps up, .... hmmm

Bill, I gather from earlier comments "we" are interpreting relevance and interest of comments from our own affection for particular threads and persons. I feel concerned for young women who might be considering trading as a career and are exposed to sexist remarks here. I must add that I appreciate your setting a higher tone by example and commitment to everything you do. Thank you again for your vision and generosity.

PS. In high school they assign hall monitors ;-)

One change that can be made without bending over backwards is to open a new chat for each day of the week, as the weekend ones tend to run on. Even if there's no daily report for that day, than a new chat should be opened. For instance, we should be onto the Saturday chat without having to refer to the Friday chat.

Other than that, I spend a fair bit of time making observations that simply go nowhere, but can at times come to a head. But I doubt if anyone really takes time with them, as considerations are normally very short term in the extreme.

I find the long term outlook very downplayed, while the extreme short term triumphalism is the general culture. This is not abnormal at all. Not once have I seen anybody parrying a wager on an option several months out.

I feel its my obligation AT THE VERY LEAST to provide a chart that matches my own perspective. I doubt if anyone wants to hear my opinion on how derivatives work, though I think I have a handle on it by now.

If this community were now obliged to conform with a certain approach, then I'm afraid that I might not survive the change. But the resources of the internet are far greater than just one community. That's something that most people don't realize. There has also been a partial move in the community to restrict content to the chat already, anyways by providing a section "off broadway."

Why not make a list of the restrictions that are being asked? How do we know this is not some form of censorship?

Here's how agoracom.com does it:

http://agoracom.com/rules

I have no objections to the evolution of Caracommunity into an options trading website very similar to agoracom, but I don't trade in options and I am not ready yet to make the move. The vast majority will not trade in options.

Another example: A website which has turned into a social networking website is Stockhouse.com. This is not a bad overall website, but the quality tradeable advice comes very infrequently, unless you resort to one of the cloistered chats, and there you find extreme short term triumphalism once again. And, they are near bankruptcy.

Stockwatch.com, when it posts news articles has attracted the worst sort of poster and has also run into the same controversies as here, with complaints about some of the content in their own articles. Some of it is well deserved.

Perhaps its just the nature of the beast.

The grass is pretty green on this side of the fence, thank you.

I think that its fairly normal practice for the commercials to take the other side of the speculative trade, and this typically means they'll be short. Basically thats just their business.
Where it becomes "iffy" is whats backing their positions - inside knowledge? central banks? and when push finally comes to shove, the exchanges themselves - think of the Hunt brothers attempt to corner the silver market.
Occasionally they must get burnt, when they misjudge demand. Question for us that should be answered soon, "is now one such time in the gold market?"
FD long Au and many miners

Bill- You asked for open discussion of why we are here, and later, you asked for an opinion on splitting the blog into two discourses. I gave you my take.

Now you're telling me there are tens of thousands of former community members who have left based on what they felt were [inappropriate] comments. Well, that certainly changes the 'situation,' does it not? That turns the silent majority into an overwhelming dissenting majority, period. Since members who regularly comment number only a few dozen, and they have succeeded in alienating tens of thousands, then I have to agree with you- round up the dirty dozen(s) and find a way to limit their exposure. If it were my blog, I'd do the same.

Although you see me here now as "greg", I used to go by the id "stktrader". I used to comment regularly and read the site everyday. This was three years ago when Bill was dealing with skin cancer and then Pneumonia. So I came on about the time 2nd and craig showed up. Shark was then trading KRY with a fever. So I go back. But at a given point in time the posts got different. It was less about trading and more about health care, politics and rants back and forth about issues like that. I found that since I was not interested in those issues to any major degree in regards to why I was here in the first place, I found that I had less interest in sifting through the 200 posts a day to find a handful from Vad or others that stayed on topic.The silent majority doesn't post because the site doesn't fit the owners original premise that we came here for in the first place. As an example go over to the Slope of Hope during trading hours and you will get what traders want. Posters talking about the market with trading ideas, full explanations with charts to show all how and why they set up a given trade with an exit strategy. One after the other. Most all of the posts are short and on topic about trading. The banter posts are usually one liners between regulars so they are easy to skip over. I am not using my example to send traders there because I still like Bill's site as well. I just wish there were more posts about trading and less about liberal arts.

Along with tradesman, I also miss jasper, moneygenie, maromatics, and a few others whose handles I can't even recall.

To me this blog, with Bill's insight, gives me a strategic view into the markets structure and interactions. I do not use it to daytrade, to vent, to discuss irrelevent issues, but to develop trading plans that I will implement.
The social equity discussions by Bill and others are building blocks in understanding the capital markets and the players. I use them to map out land mines and other obstacles.I also use them to work political agendas to try and change the status quo.
I do believe that the postings need to attain a higher level of discourse addressing the capital markets and social equity. Let's move past daytrading and get to the meat of the matters at hand.

Dan

I've looked at the definition of these on the Internet. Anyone have any opinions regarding investing in these?

In the beginning(3 years ago) the information I was reading on this Blog was like looking at a street map with no street names, so I guess you could say I was lost, my financial(investing) track record was dismal, at best,but I continued to read and follow along learning quickly who I could stop and listen too, while giving a close eye to new members willing to share there knowledge.
It is all a work in progress, but if it all ended today I have learned one very important bit of information "Question everything" accept nothing at face value.
GTA
Skylane

Let's see if China buys the dips and puts a higher floor on the POG this week. Bernanke, et al. can't control China.

This is a very good article and with comments by Jesse (http://jessescrossroadscafe.blogspot.abcom/). Some of his points dove tail with Bill particalularly the last paragraph and it shows a dual problem of China and the USA plus other world governments.

China is saying many things which are true.

They are also omitting many things that are key to the cause of our financial problems. They bought the silence of a succession of US political administrations over their blatant currency manipulation in support of trade subsidies, including the outright contributions to Clinton and Gore, and the cronyism with Bush.

China is a significant part of the problem, and like so many dogs that Wall Street helps to set up to further their gains, this one refuses to wag its tail on command.

The blowback on the US dollar will be significant.

Telegraph UK
China alarmed by US money printing
By Ambrose Evans-Pritchard
Cernobbio, Italy
9:06PM BST 06 Sep 2009

The US Federal Reserve's policy of printing money to buy Treasury debt threatens to set off a serious decline of the dollar and compel China to redesign its foreign reserve policy, according to a top member of the Communist hierarchy.

Cheng Siwei, former vice-chairman of the Standing Committee and now head of China's green energy drive, said Beijing was dismayed by the Fed's recourse to "credit easing".

"We hope there will be a change in monetary policy as soon as they have positive growth again," he said at the Ambrosetti Workshop, a policy gathering on Lake Como.

"If they keep printing money to buy bonds it will lead to inflation, and after a year or two the dollar will fall hard. Most of our foreign reserves are in US bonds and this is very difficult to change, so we will diversify incremental reserves into euros, yen, and other currencies," he said. (China is already a strong buyer in the precious metals markets, and is encouraging its citizens to buy gold and silver as well - Jesse)

China's reserves are more than – $2 trillion, the world's largest.

"Gold is definitely an alternative, but when we buy, the price goes up. We have to do it carefully so as not to stimulate the markets," he added. (The short interest being held by three or four US banks is grown remarkably large. As Barrick gold claimed in their lawsuit with JP Morgan by Blanchard, they are being backstopped by the US government. Larry Summers has been a long time proponent of controlling the price of gold to influence longer term interest rates. See his paper on Gibson's Paradox. Greenspan understood the same relationship all too well, as does Bernanke. - Jesse)

The comments suggest that China has become the driving force in the gold market and can be counted on to buy whenever there is a price dip, putting a floor under any correction. (The other central banks of the world have put a significant halt to their own selling, now realizing that the US Federal Reserve and Treasury are fighting a losing battle. - Jesse)

Mr Cheng said the Fed's loose monetary policy was stoking an unstable asset boom in China. "If we raise interest rates, we will be flooded with hot money. We have to wait for them. If they raise, we raise. (How about releasing the peg to the US dollar and allowing the yuan to appreciate, dampening your exports, Uncle Cheng? Along with encouraging domestic consumption and higher wages. - Jesse)

"Credit in China is too loose. We have a bubble in the housing market and in stocks so we have to be very careful, because this could fall down." (Apparently the Chinese do not lie to their people yet about the true state of their economy. Greenspan and Geithner have much to teach them. - Jesse)

Mr Cheng said China had learned from the West that it is a mistake for central banks to target retail price inflation and take their eye off assets.

"This is where Greenspan went wrong from 2000 to 2004," he said. "He thought everything was alright because inflation was low, but assets absorbed the liquidity." (He didn't go wrong. He did not care. He was willfully blind. He was brought in to the banking ponzi scheme in 1996 - Jesse)

Mr Cheng said China had lost 20m jobs as a result of the crisis and advised the West not to over-estimate the role that his country can play in global recovery. (We should have NO illusion about China doing anything to promote imports and growth for anyone but themselves, ever. It is not a free market, it is a command economy with a strong mercantilist bent. - Jesse)

China's task is to switch from export dependency to internal consumption, but that requires a "change in the ideology of the Chinese people" to discourage excess saving. "This is very difficult". (No it is not. It is hard because the Chinese elites are afraid to lose control of the country to a growing merchant and middle class. - Jesse)

Mr Cheng said the root cause of global imbalances is spending patterns in US (and UK) and China. (One of the root causes was the devaluation of the Chinese yuan in the mid-1990's, and the allowance thereafter of China into most favored nation trading status with the US after making considerable contributions to Bill Clinton and Al Gore, through the Chinese military. Remember that scandal? - Jesse)

"The US spends tomorrow's money today," he said. "We Chinese spend today's money tomorrow. That's why we have this financial crisis...."

(Perhaps it is more correct to say that we have this crisis because statist governments and crony capitalists continually interfere with market mechanisms, creating unintended consequences and downtream crises that are growing increasingly severe and systemically threatening. - Jesse)

Thanks for the time out Bill - the pause that refreshes and permits reflection.

I'm not going to speak about daytrading in this blog anymore except to clarify a post made the other day that illustrates the adaptive utility of having such a tool in one's trading kit. It was gobbledygook at the time as I did not use correct terminology but to make the post less useless has been reposted here. I've also noted that there are newbie's I am not making myself understood to - hi hockey mum - so while Bill's on another level in his trading, I will try to share my learning process and results with other learners in an easy to read & hopefully understandable manner.

Ok the date is 2nd September. 1st September is a solid drop in the markets, I'm scanning for solid reversal signals for shorting on the 2nd:

http://weeklyta.blogspot.com/2008/10/look-out-high...

As luck would have it, the market opens lower and then trades sideways - IMO locking us out from profitable long positions as we assess the direction of the market. But developing day trading skills permit me to see a workable trade in these conditions. I had chose MWW for the big shooting star signal on the 1st and monitoring it at the opening on the 2nd it fell into a range bound pattern I thought I could trade - see attached.

By the time MWW had made its first "bounce" I had a clearly defined stop and cover limit (apologies - "sell" trigger should be "cover" trigger - still working on my terminology). I shorted at 15.63 and took paper profits at 15.40 something - the cover trigger. Because I do not have daytrading privelages I permitted further risk in looking for weakness which did not eventuate so I covered my trade as note - out flat. As is always the case, MWW then proceeded to sell off.

Take this learner's example as you will. It's not black arts or luck either but a useful addition to the traders tool kit in being able to trade what is presented to me. I have offered enough links now to get those interested running in the right direction. In the fear of becoming antiquated, I have signed up to twitter to keep in real time contact with the over-caffeinated daytrading community - you can find me as Les_Switzerland. For trading and non-trading chat I have also signed up to facebook as Les Robinson (scary that Google knew who all my family are when I signed up). Bill's place is my trend, swing and macro talk - what limited understanding I have of them anyway.

http://ronsen.blogspot.com/2009/09/krugman-cant-se...

The apologistas hard at work.

If the market has been rising on low volume, how easy would it be for fund managers back from vacation to continue driving the market up on higher volume? It would take them less than a week to use a G20-inspired surge to clear the market of bears and establish their own shorts before we see the long-awaited correction.

I will, of course, continue to read Bill's commentaries and next book—after all, that's how I came here from SeekingAlpha. I expect I may continue to discover some new links to info I may otherwise miss.

But without any feeling for the ethics and opinions on other significant issues we all face, I have no interest in what those strangers think about markets or economics—this is available on many other sites.

Kaimu's comments are given credence only when taken in context of his experiences. The same for Chickenpookie, Les, Cheapy, Mackinaw, 2nd_ave, and all the others who I have come to know to the degree possible in a remote medium.

Sharing info is sterile without the personal touch. Like going back to reading the WSJ picked up from the driveway.

My thanks to all.

Grym

http://chart.ly/qep7sb - thanks to flong182 for the chart

ready to break out of a symmetrical triangle. Bill was talking long term when giving the McDonald's example in the WIR, but a combo options/trading play, looking for entry sometime today based on Friday's 5 min. chart (a potential breakout pattern), could be a play. see attachment.

Be prepared for any downside as well. I can't say for certainty that RIMM will break out, but if it should fail then there is reasonable downside to short IMO.

DYODD, not a recommendation etc.

Nemo, I was thinking the same thing. A slight title change could fix some of the difficulties in discerning the nature of the blog. FWIW, those that talked of traders from some time ago - I've never heard of them. So I don't know a traderwizard or caracommunity blog different from what I've experienced the last 12 months. I'm happy to help construct something new. Perhaps if equity is to be found in traders knowledge and education, then an appropriate title might help us realise the goal of this blog. FWIW.