[10:17am ET] Now that the psychologically important $1,000 level for the price of gold has been achieved and considered by Wall Street analysts to be sustainable, I am expecting an increase in analyst upgrades. The reason is simple: their models will use the $1,000 price as a basis for valuation. Not only does that increase the value of existing reserves, it increases the reserve quantity because of the use of a higher cut-off grade. Double positive.
This morning, Credit Suisse made such a change:
• We are now using $1,000/oz gold for target price and rating valuation: We are moving to our Q4/10 and 2011FY price forecast of $1000/oz gold basis for our valuation from Q4/09 and 2010FY forecast of $960/oz, previously. We also apply current pricing of 60:1 silver to gold ratio, and are now moving to 2010 CS forecasts of $2.90/lb copper and $0.85/lb zinc (from 2009 official CS forecasts) to arrive at our current targets. We apply our target P/NAV multiples to a NAV generated by using the metal price forecasts set out above in our models in Q4/09 and beyond. Additionally, we have made some revisions to our target price-to-net-asset-value (P/NAV) multiples to reflect the expansion in multiples over the past 6 months.
• As a result of these revisions we are upgrading Northgate Explorations (AMEX:NXG and TSX:NGX) and Eldorado Gold (NYSE:EGO and TSX:ELD) to Outperform from Neutral.
• We continue to be bullish on our gold price outlook: We believe the gold price will continue its upward trend in 2010, remaining within sights of $1,100/oz territory with upward pressure on the price of gold being driven by weakness of the US dollar, continued worries of a recession and inflation as investors seek gold as a safe-haven via ETF and retail demand.
• Additionally, mine supply continues to decline with many producers failing to meet production forecasts. High scrap levels and muted jewellery demand are expected to be offset by low Central Bank sales and expected reductions in the global hedgebook, thanks to Barrick Gold (ABX).
On Friday, our models churned out Sell signals on a related group of stocks – the oils, steels and base metals, but not the goldminers, which in fact were looking just the opposite. Because of the gold and silver miners looking to me like they have another short-term buy cycle before the intermediate-term trend changes for the commodity-price sensitives, I decided to hold the status quo with the oils, steels and base metals.
This afternoon or tomorrow, I might change my mind, so do your own analysis.
Comments
Watching the bank stocks
Prices are still contained on indices of the downward sloping trendlines in the 15/60 min time frames.
tof- The psychology of market index levels
To some extent, are P/E multiples not psychologically determined? If market 'trend-setters' are able to achieve consensus on higher multiples, then there's no question DJIA 10,0000 can successfully be 'defended.'
SRS
In SRS @9.22 but watching SPG. SPG is the biggest component of the IYR and has a big effect on the SRS. IF SPG begins to see big volume I will look for an exit.
Hurst envelopes continued
Quasi, I looked at your revised chart and agree that using PPO vs MACD and using a log chart makes a lot more sense. Thank you for your input. With regard to the MACD being a coincident indicator to the moving averages used to construct the envelopes, I see your point. However, the RSI is also a coincident indicator, and yet if you look at the RSI on the chart, it is giving signals that do not coincide with the inner cycle hitting the bottom or top of the large envelope the way the MACD or the PPO do. Therefore, I'm not sure I see a reason not to use the PPO as a way to extend the envelope to the point in time when they both show a crossover.
Ultimately, as I've mentioned before, I will make best fit sine wave approximations to the two centered moving averages and attempt to project forward one period using the equation for the composite wave, just to see how that works. Actually, the method I will use gives a best fit for the periods of the cycles as well. When I get that done, I will certainly upload it here. Meanwhile, I'm going to do a Hurst wave fit to the S&P 500.
Re: tof- The psychology of market index levels
Multiples are most definitely pscyhologically driven. Why else would a company like XL Capital trade at 1 times earnings in the trough and 8 times earnings only 7 months later?
Relative Strength Indicates Weakness In This Rally
An interesting article at Minyanville:
http://tinyurl.com/yjecawc
DENSA Approved
HIG Options
Bought some +HIGKE ($25 Calls expiring in Nov) at $2.48 average. I'm playing a run up into earnings on 11/3. Putting only a small amount of capital at work on this...
dollar bear trap
Now that's something I haven't seen for a while - a dollar bear trap this morning.
Wow
What a reversal. I'm glad I didn't overdo it on the long side this morning...
TYP- Quick run down to the In and Out> 10.92/11.21
...
Any thoughts on UXG..?
I cannot get a handle on any production targets ....
I took the opportunity to add this morning
to my 2010 expiry QID/SDS calls with the spec portion of my portf.
premiums were being thrown out the window on these spikes the past few sessions, while the actual price of the inverse etf's were not crashing.
and as i get off my morning conf call i am looking at a 100+ point swing from today's dow high to now.
Show me 80+ up on the dow and I will continue to add.
FUD moves the market
FUD - Fear, Uncertainty, Doubt. Read this:
Monday, October 26, 2009 11:47:13 AM
Equity and commodity market weakness attributed to a variety of vague rumors circulating
- some desks noting the strength in the USD(moves back below 1.5000 level), citing the Brazilian central bank buying dollars in the spot market, though we would note that the Brazilian central bank does this frequently, including four times last week.
- other desks noting concerns about the report today that the White House and Barney Frank's committee are close to an agreement on resolution authority that would includes requiring some large banks to hold more money in reserve.
- some unconfirmed chatter circulating that a ratings downgrade on major banks could be imminent from S&P.
- another banking sector rumor being recirculated today suggests that BoA may seek to do another capital raise.
- yet another point of concern is recirculating chatter that the US may not extend the new home buyer tax credit, which is set to expire on Dec 1.
gold miners
Gold miner daily RSIs getting down around the 30 level. For now though they're leading gold lower, I think.
That massive dollar rebound (what, 0.13%?) caused all the trouble. I think it shows how fragile things are right now. And oil getting sold hard didn't help either. Whoops, there it goes again.
Finally my short oil trade is looking a little happier. I reloaded some of my oil equity shorts this morning as well. Things are starting to look like a trend, I'm not getting stopped out any more.
Wild ride.
Just watching.
Again follow GS Lead..
GS is leading the direction of the market, yes it started with USD reversal to the upside but GS has to go down first to see the DOW and S&P following along ...
Volume Spike on downside.
I see a massive spike in volume on the down move.
The recent past has seen some "churning" action on higher than normal volume. Bids being readily met with asks. Smells of distribution. Normally, this would be a huge red flag. However, these days, with the Treasury and Fed more in charge of the markets than free market participants, one needs to be prepared for the most unusual of turnarounds.
Re: FUD moves the market
Vad- Thanks for your timely post. Helps us make sense out of this Elmer Fudd market.
Re: Any thoughts on UXG..?
baz22,
UXG is a developing property, which does not yet have production or even a mine plan or financing in place to operate. But it is a favorite of mine. We sold our whole position (about US$2.00 cost base) at about US$3.30, and will buy a large position at lower prices after the $USD rallies a bit, taking precious metals prices lower, including UXG. It's US$2.81 right now and the 2.70 level was a good entry point on a few occasions recently. But if gold goes south, maybe $100/oz, then I think UXG will be a buy in the low 2's. Your time horizon, risk tolerance, and views on pm and $USD are all factors in what you do.
TNA @ 43.31
...
gold here
we have seen these moves before,
it might take a move down back below $1000 or so to scare off enough folks, or in keeping with gold's tendency to fool the best of us, it might move down hard and fast before bouncing back just as fast...
i want to see the USD over the next few weeks before rushing to judgement, something is bubbling up here and too much talk about everyone moving to buy gold and dumping the US dollar seems like propaganda.
gold is the H1N1 of the investment world, its always been around, its led to the deaths of millions over time, subject to mass panics and propaganda, and so few actually understand it.
good luck, if the USD goes on a run it will likely be a monster as so much easy cash has moved into commodities, we need to balance out speculative cash as we did last year, why does anyone think its "different this time"?
bless.
Re: gold here
“Baruch liked gold mines. There is always a market, he pointed out, for their product, and at a satisfactory price. Gold, he insisted, is one of the very few things in the world that approaches the status of a permanent investment. Baruch told the story of a Rothschild who set up a ‘permanent trust’ consisting of five different currencies. By the time Baruch heard about the trust, it had shrunk to one-fifth its original value. ‘But gold doesn’t yield any interest,’ a friend protested after listening to the story. ‘True’, replied Baruch, ‘but consider the fabulous wealth of some of the Indian princes and rajahs. I had dinner with the Maharajah of Kapurthala on one occasion in Vittel, France. Several of us talked afterward about his wealth, and someone said that among the treasures of these Indian moguls were gold coins brought to the East by Alexander the Great, hundreds of years before Christ.”
“Their gold and jewels had earned no interest during these more than 2,000 years, but they still had their capital. Suppose they had attempted to provide income from it. They might have been no more far-seeing than the Rothschild I mentioned. If they had tried speculation there have been many times in each century that they might have gone broke. No, save for gold, jewels, works of art, perhaps good agricultural land, and a very few other things, there ain’t no such animal as a permanent investment. Even in agricultural land, Baruch pointed out, there is some risk. Lands that made men rich in rice cultivation years ago in Baruch’s own state of South Carolina, are not nearly so valuable now that rice is produced more economically in other sections. City real estate is subject to all sorts of hazards, as he learned when he no longer needed his big Fifth Avenue mansion.”
Bernard Baruch, Park Bench Statesman by Carter Field, 1944
Re: FUD moves the market
Vad, did what you paste here come out as a single report on your news feed? Did someone make the story to fit the market movement or were you already getting a heads up prior to this that these various rumours/uncertainties were making the rounds? Can you see from experience & these broadcasts when fear & uncertainty is circling the market (obviously the series of lower lows and lower highs in SPY are a red flag as well) TIA
Re: TNA @ 43.31/ OFF 43.60
...
Re: FUD moves the market
Les,
it came up as a single report, exactly as I copy/pasted it.
I view it as a confirmation of how nervous both sides are at this point; high susceptibility of longs to this kind of rumors serves as a fertile soil for them to multiply. It's a self-feeding loop.
short puts in GG
Wrote some short puts in GG, covered a silver short that I'd opened just this morning.
GS
Just went green...for what it's worth.
Reversal signs continue amassing: volume patterns and VIX
Market Internals update at 2:00pmET
- NYSE volume 815M shares, about 19% above its three-month average; decliners lead advancers by 3.1:1.
- NASDAQ volume 1.53B shares, about 5% above its three-month average; decliners lead advancers by 1.9:1.
- VIX index +8.5% to just over 24.00
BMW Links Executive Pay to That of its Line Workers
BMW has become the first major company in Germany to change its compensation practices amid growing concern over excessive banker bonuses. The company cited a fairer work environment as its reason. Other firms are sure to take notice, given BMW's size and weight in the global business market.
http://www.spiegel.de/international/business/0,151...
Miners starting to look attractive
I think this is a decent opportunity to buy the dip in the gold and silver mining stocks. And I just noticed that there are even a few miners that are still positive on the day. One is Fortuna Silver, which I just read at http://www.goldalert.com announced a very big increase in their silver and gold resource estimate at its San Jose project mine, and the recent rise in both the silver price and the gold price should really benefit this stock because of the operating leverage it offers. This comes a week after Fortuna announced an 80% increase in silver production at its main operations. A couple other miners in the green today that I have noticed include Capital Gold, Kirkland Gold, and VG Gold (all of these guys trade in Canada).
Re: Miners starting to look attractive
mthomas,
you have been warned before that if your intention is just to promote a specific site you will get the boot, you post a link to http://www.goldalert.com in virtually every other post you make.
Re: Miners starting to look attractive
dr.cosa, I concur 90% of the posts from mthomas touts goldalert should get Bill to bounce the promotion.
Shorting AMZN
AMZN is in the Distribution Zone (1 day). Anyone have any thoughts on shorting AMZN at $123 and buying an equivalent number of call options for Jan 2010 expiry with strike of $120 for $8.50?
If AMZN keeps going up, you basically break even right? And if it drops below $114.50 you make money. The risk is the middle ground.
They're at a PE of 69.5, which is 210% of their industry average. However, they are basically without debt and in good position to grow aggressively. Still, the markets look like they're finally going to turn.
Re: Shorting AMZN
Sure, a fine short. But I'm thinking about waiting until it slows down just a little bit. I mean, its up +4.5% on a day when the market is down fairly briskly. I'd like to see a candlestick reversal pattern before jumping in front of this bus. :)
EDIT: ok, I bought an AMZN lottery ticket - Nov 110 put. I may be early, but that lower high (at 3pm) made me do it. Risk is limited, the IV is only 51 which seems cheap given the recent +30% 2-day move, and I have 26 days to collect.
Nice spike up.
...
SLW @ 12.96
...
Re: SLW @ 12.96
For me, SLW Dec 12.5 puts @ 0.90.
Bit of a gamble though with the buck rallying this hard.
Wait, did I say "dollar rally?"
Heavy winds at base camp/Don't think Ben gives up this easily
Sun could be shining tomorrow.
Re: SLW @ 12.96
dave- Keep in mind my time frames are generally measured in minutes.
EFU
let it go at 40.77. will look to reload around 38-37.50
GDX
Triple RSI sell alert 7 days ago
No position.
SLW
Triple RSI sell alert 4 days ago.
No position
Interesting ....
.... http://finance.yahoo.com/tech-ticker/article/36038...
Re: Multicollinearity
Appreciated Bill's comments and david.4141s comments about Multicollinearity on weekend. Had me looking at my chart settings on Stockchart's afterwards to simplify/reduce some of the indicators I use. One of the ones not discussed was Elder's Force Index - if you examine it closely the Force(13) is almost identical to the RSI(7), with the crosses above and below the 0 line on the Force almost identical to the crosses above and below the 50 line on the RSI(7). So I think I can get by without the Force index now. I think the MACD, RSI(7) and Full or Slow Stochastics is probably enough for most purposes, along with some moving averages.
Re: Multicollinearity
Submitted by Bill Cara (1089 comments) on Sun, 10/25/2009 - 20:02 #50404 (in reply to #50391)
david.4141,
You are fairly new here, apparently, but your blog blew me away. This community has come oh so far in the past couple years that I often sit back in awe. Thank you so much, all of you for recognizing the need for thoughtful discourse.
It can get better from here! Thank you all for making this possible.
The wrath of the markets
I dip my toes in this morning with HIG and find my long of $25.70ish down 6% and my options at $2.47 down 35%. Its a small portion of the portfolio and I'm ok with holding them but jeez...it's dangerous out there from the long side. I think I should have revisited my post last week about how all of my long positions were down about 2 to 5% from when I opened them and any short position was immediately up as being a tell that the shorts are winning the battle for the time being.
EUO
Euo went long, is a double short of the Euro. Target is Euro 140 or there abouts to cover. Time will tell.
Re: SLW @ 12.96/ OFF 13 at the close
...
bonds - down again?
I find myself once again astonished at the market. Where before TBT would go down every day, rain or shine, regardless of what the equity market would do, now we see the opposite. TBT had a great day, and the market was down 1.2%.
I mean, don't get me wrong this makes my TBT position happy, but I don't understand. The market is saying something here, but I'm not wise enough to understand it.
Goldman Sachs - Is it just "old news" now?
What ever happened to that former Goldman IT guy that took their trading software to antother firm? Has anyone heard more about this in any courtroom?
Also, what ever happened with the investigation of those special "huddle" meetings that Goldman regularly held for certain clients?
Have these charges been dropped?
Re: Multicollinearity - Elder force index
Dave M,
you wrote "One of the ones not discussed was Elder's Force Index - if you examine it closely the Force(13) is almost identical to the RSI(7), with the crosses above and below the 0 line on the Force almost identical to the crosses above and below the 50 line on the RSI(7). So I think I can get by without the Force index now. I think the MACD, RSI(7) and Full or Slow Stochastics is probably enough for most purposes, along with some moving averages."
Actually, Force Index is the ONLY one of the indicators you mention which incorporates volume. The formula is simply price change times volume, then smoothed by a 2 or 13 period MA.
RSI, MACD, and Stochastics only look at closing price. FWIW
Re: Multicollinearity
Dave M (you can never have too many Dave's...),
You conclude that because the Force Index and RSI behave the same in crossing their midpoints, they are duplicating each other. I would disagree with that.
My understanding is the Force Index incorporates volume and RSI doesn't. It's possible that they are acting the same in your sample because the volume is fairly constant. Try comparing them during a time when volume is gyrating wildly and see if you get the same result.
I think the whole idea of multicollinearity is not whether the indicators behave the same, but whether they measure the same.
In your example MACD is measuring trend (crossover of two EMA's), RSI and Stochastic measure momentum (comparing current price to recent price), and Force Index is weighting momentum by volume (change in price times volume).
My thought is that your RSI and Stochastic measurements are more duplicative than your Force Index, but don't appear so because they measure different time periods (i.e. RSI-7 and STO-14).
All the technical stuff aside Dave, use what works for you. You can have the most esteemed set of indicators, but if you lose money, so what?
Best of luck to you.
From Stockcharts...
MACD uses moving averages, which are lagging indicators, to include some trend-following characteristics.
RSI compares the magnitude of a stock's recent gains to the magnitude of its recent losses.
Stochastic shows the location of the current close relative to the high/low range over a set number of periods.
Force Index is calculated as the difference between today's close and yesterday's close times today's volume.
Re: bonds - down again?
davefairtex -
TBT rallies a little leading up to the big U.S. bond auctions (with lots of QE) in hopes that Humpty Dumpty falls off the wall (with no QE). This week will be the biggest of these treasury auctions in history and Bozo Bernanke said he's not done yet so we should take his word for it, right? Place your bets but, as [edit} Jim Sinclair points out today, with CIT and Capmark (former GMAC commercial) going into bankruptcy, it's highly unlikely QE is going to end this week. Too early for TBT.
Cheers.
HIG
sold my stock at $24.4 that I bought this morning at $25.70ish. Staying on the sidelines and waiting this move out. It could get uglier. Look at BIDU afterhours...
New Louise Yamada interview, she is fantastic
Aloha,In out of QID 2x today. Qid acted weird twice like someone had a lot of shares to sell cheap? Maybe something else I can't understand but the movement was really slow both QQQQ and Qid went down together for a short while and QID wouldn't get up and go over 22.07-09 when it should have. at least to me:)
In 21.76 previous day out 22.18 Sold last batch after hours in 21.80 out 22.25. Was afraid tomorrow AM everything would run long. Crazy days.
Louise says dollar goes to 60!
http://www.kingworldnews.com/kingworldnews/Broadca...
Re: Any thoughts on UXG..?
Aloha,Went to scottrade and pulled Reuters report, nothing in it.
Another distribution day
Sectors under pressure
banks/steel/fertilizers/airlines/transports/solars/utilities/s&l/insurance/gold/autoparts/cruise/biotechs
did I miss any?
My strategy is to agressively add to my short positions on any new lower high attempt.
if we make a new higher high on heavy volume than I will scale out of above positions. Also watching to see if the 50 day serves as legit support or a floor made of clay.
This steak is overcooked and the mash potatoes are cold.
Re: Another distribution day
hear hear, nice plan NYUGrad, I am doing the same here..Good luck every one.
Re: HIG
tof- Not a problem. You played the long side all summer long, until it stopped working. Then you played the short side (briefly), until it stopped working. Then you switched back to the long side. Didn't work today. I don't think you've made any wrong moves yet.
Re: HIG
Re BIDU,
http://finance.yahoo.com/news/Baidu-Announces-Thir...
(Sounds great, but) ... [Reuters:] the transition to a new advertising technology would crimp revenue in the current quarter, sending shares plunging 11 percent... Baidu on Monday forecast revenue in the fourth quarter to range between $174 million and $180 million, below the average analyst estimate of $204.7 million.
The stock quadrupled since March. A market cap at $15 billion and quarterly revenue peaking at $187 million?? What do people expect? Get real.
AP news, housing credit extension vote
"Senate May Vote on Extending Tax Credit for Home Buyers"
Was there any doubt it would be extended? It's already priced in folks. But the media will say "markets claw back losses on housing credit extension"
Re: Multicollinearity
Jock & david.4141 - Thanks for your comments. It guess it is coincidence that RSI(7) and Force(13) act the same in some charts I've looked at, like $SPX or GG, but maybe not so much with something like AMZN. I will continue using stochastics too, as the Force index is EOD only because of the volume being factored in, so if using it in a stock scan it is only good after markets close. I do always have volume depicted behind my charts as well.
Re: HIG
Bill - BIDU is a "story" stock. Growth in Chinese online population + overall population in China makes people think there is a ton of more upside. I personally think it's still a decent investment at these levels but it will be volatile for sure.
I actually owned a lot of this at $90 back in late 2005 and got scared out of it at $120. I told one of my friends about it and his parents, who are quite wealthy, put almost $200,000 into it when it was at $90. They visited my friend over the summer and took me out to dinner on account of my "recommendation" and their $600k gain. They said it was the only stock that they have owned that went up since the time they put money in it. I didn't want to say anything but I thought my $600,000 "recommendation" was worth more than a dinner!
Re: New Louise Yamada interview, she is fantastic
Thanks for that Louise Yamada link, justlearning. She's just great. Among other things, I was interested to hear that she uses the Broad U.S.$ Index (G20+) in her analyses rather than the more narrow, headline, U.S.$ Index. That was something I brought up for discussion a few months ago - to stony silence, here.
Headline Index: http://research.stlouisfed.org/fred2/series/DTWEXM...
Broad Index: http://research.stlouisfed.org/fred2/series/DTWEXB...
Re: Another distribution day
I also. Today I made some lunch money in SRS and DZZ. I will buy them in the premarket if they are down tommorrow.
Good luck everyone.
Edit:
I did notice the large, midcap, and small cap REITs were doing better than most other sectors however...was curious behavior. Still I will buy SRS or should say add to it...I still have 100 shares to watch until I buy some more. I did notice EOD that GICS 25 & 45 had some buying of risk...will that risk pay off, maybe eventually?
I also like the EOU because it will move opposite the Euro...I think its good till 1.4 or there abouts on the euro and according to someones post on here I am not for sure however and need the support for the euro. Bill did say that Gold would move up and down with the Euro unless I misunderstood him on this important point. I thought twigg did the euro, but alas, could not find it.
Picower's death ruled accidental
http://tinyurl.com/yhd3dxl
Heart attack.
Is there a right way to die? Yes.
Of course, we don't know Picower's story. If he was innocent of charges of aiding and abetting, then he probably died with a (relatively) clean conscience.
If he was guilty, then I think he blew it. This life is about as transitory as it gets. He could have stepped up to the plate and hit one out of the park. Screwing up for 15-20 years is a blip on the road of life/after-life.
There really are some pretty good values in this market,
but the quants and (what I like to refer to as ' The Dark Forces ') are keeping them at bay... several are in the bio-science area... I think the only way to be (somewhat secure) in them is to see which hedge funds ( have what) positions... But, I believe their filing process is somewhat obscured by taking advantage of ' the rules ' of disclosure, giving the them a distinct edge.. So, does one know a service or site ( besides SEC filings on line ) that keeps a current update (2 weeks or less) of these mysterious warriors and their holding percentages .. ? Thanks....
Re: New Louise Yamada interview, she is fantastic
the Broad graph only goes back to 1996, and at a glance looks to correlate pretty closely with the Headline (Major currencies) index. Too bad I'm too tired to pull data into excel an check the correlation :)
But this reminds me of the gold vs currency discussion a week or two ago. My take on it is that large traders will trade off the more commonly used charts for their technical analysis, i.e. US$ for Gold, and major currencies for USD.
Just my take...
there really are some good values in this market
just wanted to compliment baz22 on an entry from early sept (9th I think} where many junior bios were mentioned with some detail, I copied the list and have traded several of them using sto/macd and the results have been very satisfying.........most of my account is still in covered calls and selling of OTM puts on stocks I would like to own more of.......HL is a favorite mainly because of debt free status and extemely high option premiums....also the Yamada interview is a must listed to.......
MHFT and $LUMBER
don't know if anyone's been sharing MHFT's blog, but his note on $LUMBER caught my attention:
3) There’s nothing like getting up in the morning, sharpening your ax, taking off your shirt, and splitting a quarter cord of wood to get the blood flowing. I managed get the same invigorating effect by catching part of a nice 50% move in lumber futures earlier in the year, based on an expected recovery of exports to China (click here for my earlier call ). A wave of buyers followed me, heralding a recovery in the housing market, which I didn’t believe in for two seconds. Since June, the performance of the knotty, aromatic commodity has been definitely pekid. Listen hard and the trees are trying to tell us something. How are we supposed to have a recovery in the housing market with falling lumber prices? Are they building houses now without wood? Have I missed some great technological development in the home construction industry where termite proof houses are now all the rage? I think it’s much more likely that the Chinese topped up their inventories and the recovery in real estate is wishful thinking. Please take a look at the chart and tell me where I’ve gone wrong. If the trees are right, then real estate stocks, REIT’s, homebuilders, and even the banks are about to get slammed again. Is that smoke I smell?
Vad says "trend is your friend". $LUMBER is whispering "Watch yer back Jack".
Re: "trend is your friend"
I have this interesting feeling... this friend runs around offering his friendship without discrimination, and guess what? Rejected constantly by most, so many are looking to go against it, for better or for worst - most often for worst. It reveals itself for anyone to see yet not many trust it. Finally, tired of being an eternal suspect, it reverses thinking "fine, I'll go where you all thought I should, will you trust me now?" Yeah right - almost invariably that same majority changes on a dime and again turns against this "friend".
I'd cite examples but I don't even know where to begin
Re: "trend is your friend"
Does the friend offer one last betrayal?
Radioshack pop
The pop in radioshack made me think of this article a few years ago.
http://tinyurl.com/Radshack
Bob
Re: MHFT and $LUMBER
ALOHA !!
Les-You are back ... the Happy Wanderer ...
Well, you know lumber seems like it would be a lagging indicator when there is a heavy inventory glut. Maybe once the inventory of existing homes is worked down then perhaps there would be more reasons to buy lumber for new homes.
I am only speaking from my view as I drive around here in Hawaii. Plenty of existing homes to sell first, before applying for new construction permits.
Perhaps a chart of existing home inventory with a new home construction permit overlay. Seems there would be a large gap to fill first before buying lumber futures.
Also from purely a contractor point of view there are also alternatives to wood studs, like metal studs, which I have seen a great deal in commercial construction and some in residential as well. Also there is block for walls which is used here in Hawaii residential construction somewhat. Metal and concrete don't get any termite damage. When I was in commercial and industrial construction I really liked working with metal studs way more than wood studs because all the holes were pre-drilled and the studs were light weight and easy to cut. It made electrical installations quick and easy.
Ahhh, the days of dragging around hole-hawgs ... seems like yesterday! NOT!
SRL DIVIDENDS
ALOHA !!
Today it seems Straits Resources-SRL(ASX) got another performance payment, this one for $115MIL USD from the PTT merge. I believe there will be another dividend coming from this,not as much as the last one, which was $0.30AUD. If they stick to the original estimate(I have my doubts) then this dividend would be $0.20AUD per share, to make $0.50AUD per share for the year, which was the original plan made public earlier this year. I calculated closer to a $0.38AUD dividend for the year. Nothing announced officially yet that I can see, but so far the first payment of $18,000AUD did come through to my account.
FD: I own 60,000 shares. I paid $44,000AUD($28,600USD) for those shares and if the dividends work out to $0.50AUD per share then the company(SRL) will have paid me $30,000AUD, meaning I will have paid only $0.23AUD per share, which would translate to a 740%+ gain based on current share price of $1.72AUD, not including the currency spread between the AUD/USD which now stands at a plus 40% gain. Based on that this coal play(which is what SRL is mostly)has been more profitable on a percentage basis than my gold plays. My 2008 trip to the SRL offices in Perth paid off!
SRL was one of the two companies I presented on at the CTA Conference 2009 back in April.
This year on my way to the CTA Conference 2010 I will stop off at the offices of a tiny micro mining gold company based in La Jolla,CA(near San Diego) of all places!
Re: SRS
SPG is highly gamed in the markets. It is tricky.
Re: New Louise Yamada interview, she is fantastic
Do you have tickers for broad USD index?
Thanks much!
Re: "trend is your friend"
You've gotta write a book on trader psychology Vad, with cited examples like "Tape Reading" - I have no doubt it would be most enjoyable and enlightening.
Re: MHFT and $LUMBER
Hi Kaimu, the MHFT's take on futures is a commodity play in global demand for lumber:
"It’s a way to play the global demand for lumber without being held back by the continuing stress in American housing. If you don’t need the leverage, look at the biggest producers, Weyerhaeuser (WY), Rayonier (RYN), or Louisiana Pacific (LPX) which have already had huge moves. After seeing similar Chinese moves in copper, crude, and coal, this could be further proof of the beginning of a much broader, long term bull market in commodities."
http://www.madhedgefundtrader.com/April_28__2009.html
Why is lumber lagging in the commodity plays, given the amount of money being printed?:
http://tinyurl.com/couple-o-commodities
$LUMBER futures are at odds with the stock price of Plum Creek, a big timberland company set up as a REIT in the US.
http://stockcharts.com/h-sc/ui?s=PCL&p=DAILY&b=5&g...
Seems global demand is soft, despite hot money sloshing around US markets, as I understand it. I don't have the answers, just curious at the difference in global demand between $LUMBER and everything else. Is it because wood is not easily stockable like metal?? FWIW.
Character Change?
http://ronsen.blogspot.com/2009/10/1060-or-bust.html
Point-and-figure charts show some underlying supply-demand changes.
BP
I see BP on the LSE is leading the charge on earnings report today, currently up just shy of 5%. Will be interesting to see what the gain will be at close today.
Oh and 'justlearning', thanks for Louise Yamada link very good honest interview.
Re: New Louise Yamada interview, she is fantastic
Here's the broad index and headline index on the same graph going back to 1973. It's scaled so that their January 1973 values are both 100:
http://tinyurl.com/yhat8x3
Re: "trend is your friend"
Only on its deathbed :)
Re: MHFT and $LUMBER
Les - "$LUMBER futures are at odds with the stock price of Plum Creek, a big timberland company set up as a REIT in the US.?"
I don't have the answers to your questions, but I don't believe that your statement above is correct. See the attached chart below and keep in mind that StockCharts adjusts PCL's chart downward every time a dividend is paid while the $Lumber chart is not adjusted.
spot
Goldman Sachs Tells SEC Dark Pools, Short Sales Help Cut Costs
Oct. 27 (Bloomberg) -- Goldman Sachs Group Inc., the most profitable securities firm, defended for U.S. regulators dark pools, short-selling, high-frequency trading and other market practices that have been criticized by lawmakers...
...Trading on dark pools, off-exchange platforms that don’t display public quotes, has more than quadrupled to 9.4 percent of all U.S. equity volume in the past three years, according to Tabb Group LLC. High-frequency traders, whose computer programs buy and sell shares up to 1,000 times faster than the blink of an eye, account for about 46 percent of daily volume.
Goldman, which operates the Sigma X dark pool, in the document identified five “myths” associated with the platforms. The bank said it’s a misconception that dark pools create a “two-tiered market structure” to the detriment of retail investors and that platforms that don’t publicly display orders are a new phenomenon.
SEC Proposals
The SEC proposed rules Oct. 21 that would require dark pools to publicly report some bids once they handle 0.25 percent of a stock’s average daily volume. The electronic networks usually shut down trading in a security when they approach the existing 5 percent limit.
Goldman, in its report, said “small changes and clarifications” could benefit current rules regulating dark pools. The Goldman executives who met with Aguilar’s staff Sept. 24 included Managing Directors Paul Russo, William Conley and C. Annette Kelton, according to the notice.