Monday, August 23, 2010

8/23/10 Mad World



Beautiful ballad by Gary Jules.

went to school and i was very nervous
no one knew me
no one new me
hello teacher tell me what's my lesson
look right through me
look right through me
and i find it kind of funny
i find it kind of sad
the dreams in which i'm dying are the best i've ever had
i find it hard to tell you
i find it hard to take
when people run in circles its a very very
mad world
mad world


There's no need to play a mad market. Spend a little more time in the other compartments of your life and wait for better entries.

133 comments:

  1. jb - as i said, i'm afraid we're going to free fall soon. what does that mean? i think we could hit 900 pretty quickly. but i don't think it would be a world crushing drop...i.e., yields wont suddently shoot upward and we won't see the financial system just explode...i think it will be more of a capitulation by stock market bulls than a realization that the financial world and our economy are going to hell. valuations are too high right now for any significantly conviction by bulls because earnings estimates are too high. estimates are based on margins staying at current levels, which are too high. so this drop that i see coming is more because of valuation than anything else.

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  2. I'm not predicting an apocalyptic event either TOF, but there are some scary parallels. could be an express train to the 890-900 range

    on the trading front today went very well. my new, simple 4 indicator method performed as expected......now let's see how it does after 100 trades.

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  3. after hours action looking pretty bad. i think we're all feeling the same thing regarding the short term future of the markets. not looking good. all of those people making fun of bond buyers are gonna be taking their words back soon.

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  4. was just watching the overseas CNBC feed online...guy goes, "nikkei at 8900 for first time since mid last year. raise your hand if you remember when it was at 39,000? people who were dollar cost averaging it down from then 20 years ago are still way underwater"

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  5. Bill liked the post by my new identity. :)

    Re: Some thoughts on the ECRI WLI Growth index
    Submitted by Bill Cara (1697 comments) on Mon, 08/23/2010 - 19:44 #67704 (in reply to #67693)

    DavidV,

    Thanks for joining us. Sorry not to check the "unpublished" items until now, but I don't spend as much time reading the blog as I ought to. First time posters are usually held by the system for review. An example of why we do that happened earlier today when a new member posted Russian literature, volumes of it, in Russian, in language that would have offended Vad, I'm sure. The world is full of idiots, unfortunately.

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  6. jb - Since you made me go to Zerohedge, which I never do anymore, and since we're on the subject strictly for entertainment purposes, I'll share another possible "way out there" scenario I ran across a week or so ago:

    http://brucekrasting.blogspot.com/2010/07/red-money-conspiracy-theory-11.html

    Anyway, personally, I was quite surprised by the FED's attempted withdrawal this year to what seemed like the sidelines, but who really knows what the heck is really going on? It didn't really seem to draw the praise I'd anticipated from those who claim government should step back and make no attempt, so I was a little disappointed in those folks for not stepping up.

    So, if anything aside from a temporary dip occurs, I'm more inclined to anticipate a repeat of 2008 where PM's and equities go for another romp south of the border and the almighty dollar does a moon shot.

    Unless someone else can offer validated explanations for why recent history isn't likely to repeat.

    So long T's, short equities and/or short PM's, or simply moving to U$D would be the move. Everything seems to kinda be moving that way at the moment, doesn't it?

    Timing the move and then executing with the right response are the trick I didn't manage to accomplish last go-round b/c I'd anticipated a rush to PM's that simply didn't materialize.

    Man, I'm really getting sick of this game of shells.

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  7. I recall during the '08 crash there were several posts deleted on CC where folks were trying to disagree with Bill's commentary and provide warning.

    I guess their posts offended Bill's sense of social equity.

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  8. David- You crack me up, man.

    CP- I remember those posts as well. Too bad.

    Got to stay long here. Way to many bears in the woods.

    FD- About 30% long.

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  9. Okay, so Let's re-post David's thesis so everyone has a chance to read and comprehend, I'm convinced it's great stuff, well thought-out, and so, worthy of contemplating:

    "Some thoughts on the ECRI WLI Growth index
    Submitted by DavidV (1 comments) on Mon, 08/23/2010 - 15:54 #67693

    The prior reading for the WLI Growth was revised down from -9.8% to -10.2%, while the latest reading came in at -10% on Friday. The WLI Growth rate have NEVER dropped below -6.7% without a recession following in the short order (the -6.7% drop was in 1987, when the stock market and the bond yield components of the index dragged it down so much during the crash). So does this mean that we should expect a recession in the short order?

    Let's look at the big picture in order to answer this question. The economy had a very abrupt plunge in late 2008 to early 2009, then a very abrupt "statistical" recovery from those depths due to government stimulus and QE, and now that the stimulus & QE are fading, the artificially inflated numbers are dropping down pretty fast, back to some true level of the economy. In case you have not seen the historic WLI Growth chart (from 1970), the growth rate in the summer of 2009 was the HIGHEST growth EVER recorded. So the *numbers* in the economy had an amazing spike in the summer of 2009, and we all know what must follow an amazing spike -- an abrupt decline, which is what we are witnessing now.

    Continued in next post due to length limitations:

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  10. "My claim is that the very sharp drop in WLI we are observing was totally EXPECTED after the dose of stimulus received by the economy. So the current unusually fast decline in WLI does not mean that we are about to enter a recession -- it used to mean that in the past, when -10% WLI Growth rate was recorded after the economy was growing "naturally" for some years (and that natural growth rate was MUCH slower than the artificial "high" in the economy following the largest ever government stimulus). Thus, the recent abrupt drop in the WLI Growht Index DOES NOT give us a sufficient evidence yet about the economy going into a double dip recession. A very slow growth around 0 to 1% in GDP -- maybe. But not a -4% drop in 6 months.

    In order to get a better idea of the LEVEL of the true projected level of economic activity going forward following the "artificial" spike in the summer of 2009, we should look at the ECRI US Long Leading Indicator (USLLI), which does not have stock prices as one of its components (unlike the WLI index). Here is a chart of the USLLI index:

    http://www.ritholtz.com/blog/2010/07/u-s-long-lead...

    which shows that unlike the WLI index that peaked in the summer of 2009, the USLLI kept growing until January 2010 and is now experiencing only a little dip according to ECRI (they sell the latest USLLI reading to their professional subscribers, so I couldn't find the latest readings on the web).

    "While everyone continues to over-emphasize recent housing and employment data, ECRI points out their U.S. Long Leading Index [USLLI] is far less ominous: ECRI concluded: “In essence, the recent slight dip in the USLLI is not as pronounced, pervasive and persistent as it was before the double dip in the early 1980s.”

    The big “fly in the ointment” here is the data provided by the Consumer Metric Institute: http://www.consumerindexes.com/index.html. Every stock investor should study that data and read their latest commentary (from August 20). They show that their composite index dropped below 95 only briefly during the deepest point of the 2008 recession, which occurred in early November. Then, the index bounced to 110 in the summer of 2009. After that, the index has collapsed and was at 90 in early July 2010, matching the worst reading EVER observed (in November 2008). The index did recover slightly since then and is now slightly above 94. However, if that index turns down again and heads toward 90, I would say forget about ECRI's optimism and prepare for the worst, while having a large gold position to capitalize on the inevitable new economic stimulus and QE that will be undertaken in the hopes of preventing the worst. "

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  11. And finally:

    "Incidentally, the latest commentary from the Consumer Metric Institute also mentions that the index measures only the “Consumption” part of the GDP, but does not measure the net Exports part. So if we get a precipitous drop in the $USD (which John Hussman is expecting – read his latest commentary at http://www.hussmanfunds.com/weeklyMarketComment.html), then US exports might increase and the GDP might not suffer as much as the Consumer Metric index is prediction. However, gold should zoom in the event of such a drop, so it looks like a gold position will benefit both from a GDP collapse followed by more QE and from a possible stability in GDP due to increasing net exports.

    In conclusion, I'd like to point out now that the changes in the WLI Growth rate can be well predicted by monitoring the data from its key components (I saw a web site where they were doing such predictions and actually explaining how the observed changes in the key components have contributed to the latest change in the index.) So the reading that comes out every Friday is "old news."

    Also, the WLI Growth Rate is a smoothed first derivative of the actual WLI index, which is now at the same level at which it was on July 2. So if the index keeps being stuck in its current range, then its smoothed first derivative will eventually become 0, and so WLI Growth will rise from -10% to 0%."

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  12. Makes perfect sense to me, just follow the money. If the dollar begins to fall, then PM's will do well, and maybe equities too, as exports should rise (ie: 2010 European manufacturing, esp:Germany).

    If the dollar becomes the fear shelter as it was in 2008, then I'm looking for PM's and equities both take a big hit with most of the damage occurring in equities.

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  13. David, thx for your post on the cc blog. port2013

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  14. Glad to help, port2013. I hoped there would be some discussion of these ideas, but it seems like they did not resonate much with the community...

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  15. David- I've read your post twice now. Damn, man, that is well thought out. Good job. I think there isn't much discussion because it's out of sequence.

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  16. NKSH/ROST - Doesn't seem like fear had much of a lasting effect on these two today...

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  17. CPE might be worth a shot @ 4.21.

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  18. I'm surprised to see V show up in the WSJ money flow data as selling on strength.

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  19. Mark- I agree with your 638 pm sentiments- what do they call it, hiding in plain sight?

    Not so sure about 'way too many bears.' I'm sort of thinking 'way too many scared bears.' When all those bears start chanting 'loud and proud,' then it's time to raid the bear camp.

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  20. Mark- I've never been one to spare the A/C. Life is too short for that.

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  21. And Shanghai starts off the day on a high note.

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  22. 2nd- It's kinda a test for me ;) I failed tonight. I agree with your market call or now. 1060 had to hold on the ES and it has so far.

    ST I don't think anyone has the upper hand, and if that's the case, historically the bulls win.

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  23. Mark - no one knows for sure. i'm calling for a drop and i'm about 60% long, 5% short, 35% cash. Talk about not listening to one's thoughts...

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  24. Dang man, these prices still aren't low enough for me to add.

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  25. David, I've got MarkW beat, I've read your post on CC three times and I'm still scratching my head. I don't know enough about the indicators to comment but I certainly think its an excellent study. The first question that comes to mind is does the consumer still contribute 70% to GDP? Next, do any of these indicators measure inventories and if they do, how accurate are they? And my last question, why didn't China buy Potash months ago when it was trading below $100? Ok, not related to your post but something I'm curious about.
    port2013

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  26. POT - I feel China's been in the background all along on this one, they have an angle.

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  27. port2013, this page explains the GDP components: http://www.colorado.edu/Economics/courses/econ2020/section6/GDP-components.html

    It shows that the Consumer Metric Index does not measure the change in inventories. We do know, however, that inventory rebuilding is over, and so it won't contribute to GDP growth anymore.

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  28. I have just looked at the 5-day chart of PST and it looks like buying it at $40.7 on the way up would be an easy entry. The 6-month chart for PST shows that it is definitely ready for a rebound. So I have modified slightly my buy stop limit order on PST to $40.7/$41 and increased its size to 300 shares. If that order gets triggered, I'll set a sell stop order at $40.

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  29. fido users: i wanted to use my new charts during the AH sessions but no go. am i doing something wrong or is charting not live during AH?

    thx

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  30. DJIA -120/SPX -15 to start the day? Works for me.

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  31. jb- I don't use my Fido charts. I just raise my antennae after hours, like the guy on My Favorite Martian used to- that tells me what to do.

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  32. looks like serious stomach aches today..

    historically, that is when I have made my best long investments

    so today the word is courage!

    gl

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  33. Interesting opening comments over at CC.

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  34. got it 2nd.

    you know it vb, on my second course of meds today and it's only 6:30 a.m.

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  35. UNG:

    We now have a retracement of 21% from the recent high of July 30th. The pros must have the longs crying uncle buy now. This 2ndAve impulse move down is approaching the support level of $6.70. Being patient in this commodity is tiring at best. Looking to initiate a position and yesterday's green candle is a plus, but somehow August seems to be a month for uncertainty. Going to let a few more days pass and possibly buy at month end.

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  36. that minor come back was snuffed out fast

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  37. jb,

    hahha, i know what cha mean.

    so, the stock market is having a sale today

    gmo 2.93
    feed 2.30
    intc 18.54

    anyone adding?

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  38. chart says to get into sso at 33.58, but can't pull the trigger with the housing news pending.

    gov't wouldn't fundge the #'s to give mr market a lift , would they?

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  39. Thinking about it VB.

    Other than DELL, no so bad here. Should have listened to you on that one JB.

    I suspect we test 1050 today.

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  40. i'm sitting chilly vb, however based on my current consumption of pharmaceuticals I'm thinking of getting some RXL....

    guess gov't aint fudging the #'s...ouch.

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  41. ci- Wow- impulse move being tagged with my handle..i'm truly moved. When do they tag a drink after me?

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  42. Whoa...now THAT's an impulse move down.

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  43. perhaps govt messed with the richmond fed #....that saved the bacon for the moment.

    a triple IPA would be my choice for "drinks ala 2nd"

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  44. sso@33.35...based on the chart, tighest stop possible

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  45. sso off @33.42, broke the line already

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  46. Not sure what BC (of all people) means by 'stuck.' With stops in place, it should all be on auto-pilot.

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  47. jb

    hope i am not being too wreckless, more gmo to average down

    cramer told everyone to sell - remember last time he did that?

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  48. 2nd: You should apply for a trademark. You might make some "brue-llars" if you get it tagged to a drink. Royalties would be so much better than this stock market.

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  49. good move vb, i just added some as well (@3.01), the 3min chart looks great (too me..yikes!!)

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  50. RIG- No chit. Wonder what's up. No news I can find.

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  51. SSO OFF AT 33.70, right at the top of the range

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  52. make that "brew-llars"

    canaian - I must have had one too many.

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  53. wonder if RIG is related to some of the news this a.m. about bp getting sued, but not RIG.

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  54. where is sharky? did he get a job?

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  55. should have bought again at 33.66, but to be honest i'm already beat - this trading stuff is stressful!

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  56. Honestly, I can't tell if this is a dead cat bounce/new bull trap...but I'm playing it that way, as in remaining on the sidelines.

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  57. Pass the TUMS please! This is getting worse, isn't it?

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  58. How about approaching Beck's about licensing 'Take Five' as background music to 'Brew Beck?'

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  59. they could even package them in (16% larger) 'fives' as a gimmick. zoom in on the cool dude/hot chick at the register- 'Take Five? you got it.'

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  60. talk to the guys at 21st amendment...maybe you could get a special, local, brew.

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  61. Speaking of sharky, he wondered about investment returns of "for profit" bloggers. This blogger is not for profit (I assume) and came up on a twitter tweet. He has had a rough time like most.

    http://www.buy-high-sell-higher.com/portfolio-performance/

    -----
    I am not interested in CC, seems very self-serving the last time I read it. And the double talk about his returns turned me off. Even a table he posted one time was a garbage of numbers. You should explain each column and not let the reader guess what it means. Just my point of view and I suppose a rant too.

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  62. sharky probably is playing golf, i just said that about being unemployed to see if i could get a rise out of him.
    lol

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  63. Wow, the dashboard of Canandian Stocks I follow is just full of red. If this was the dashboard of a car, I'd be expecting the four wheels to fall off next. lol

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  64. Dollar down, PM's moving up. Looks like dollar isn't today's preferred shelter (yet?).

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  65. BP retaking 35 -- HAL, DO & RIG all gaining from 10am

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  66. cinv

    I have CNQ and it fell off the cliff while in accumulation zone

    rby now in the green.

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  67. haven't sold my TZA...but also haven't sold my REDF or PIR (although I might just sell PIR soon).

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  68. According to my dashboard, the transmission's in reverse, the engine's in trouble, and the airbags are deflated.

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  69. if it's a toyota CP then the siler lining is you won't be needing to brake any time soon...:)

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  70. Green close....You heard it here first!! Later....

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  71. Wonder if the Australian minerals mining tax has been temporarily shelved and the subject is impacting commodities this week?

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  72. CNQ - Looks like it tested the lower trendline at $31, I doubt it's going to fail that one as long as the dollar doesn't become the preferred safe harbor.

    I feel pretty confident as long as PM's are moving up and the dollar is moving down that we haven't entered free-fall (yet).

    Silver is flying!

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  73. vb:

    I like the energy area. CNQ is a safer play, just that there is a panic because people are sitting on their hands for now. I learned that from 2nd who learned it from ...

    CP:

    The minerals mining tax is not going away. I have always felt resources are the property of the citizens, not the company. I suspect that government financial officials the world over are looking at that one.

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  74. Closed out TZA at $40. Added to PIR at $5.93.

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  75. small caps looking pretty strong versus the bottom

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  76. ci - I agree, especially if the minerals are being exported there should be some recapture mechanism on behalf of the citizens and I'd be surprised to learn if there weren't one already implemented.

    I suppose the size of the tax is the real question, I've heard 44% was proposed in Australia and they're still haggling back and forth over the details.

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  77. Mark- I think we close below DJIA 10k.

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  78. i think Mark might be right about green close...

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  79. Sharkie - I wish he'd weigh in at some point too, just to let us know wwwaaaaasssssuuuppp. Wonder how mom's gettin' along?

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  80. CP: True, there are already taxes in place now. Bad me. It's the excess profits that gets my grit. I think a windfall tax is what we are in need of, but then investments in these companies won't have the same bang for the buck they have now.

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  81. S&P crashes to 880 and I finish loading the boat with GMO @ $0.99 the day before all mining permits are granted by state and federal authorities and molybdenum is reclassified as a precious metal.

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  82. CADC - Why does the price constantly oscillate between $3.35 and $3.44? I know this turd MM is gonna take under $3.00 so why doesn't he just do it so I can load up?

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  83. I was thinking of initiating a position (swing trade) in a financial(2x) ETF a while back. Think I will be sitting on my hands for a little bit longer.

    RY.....Royal Bank of Canada_____-2.75%
    BMO....Bank of Montreal_________-5.35%
    BNS....The Bank of Nova Scotia__-2.45%
    MFC....Manulife Financial Corp._-5.49%
    TD.....Toronto-Dominion Bank____-1.22%

    11:40am

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  84. Read this article from SiliconIndia.com. This guy sounds quite bullish on India's internet growth over the next 18 months or so...

    http://www.siliconindia.com/guestcontributor/guestarticle/150__0/Whither_Internet_Advertising_in_India_.html

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  85. SD - Comment over @ CC.... nebish #67740

    I like the MAR '11 $5 calls and the JAN '12 $5 calls here.

    Natural Gas is down but not out. SD, after making 2 pretty good acquisitions (Forest & Arena) now has a good bit of forward oil production, too. The stock seems to be suffering from (1) a CEO who's a bit of tout (he's been on Cramer, blech); (2) Nat Gas price is in purgatory; (3) they have a lot of debt, but nothing is due until 2013-2014 and they seem to have it well in hand, (4) the whole sector is getting thrashed by aggressive hedgies shorting.

    Production is ramping in the Permian Basin and the Arena deal helps the balance sheet quite a bit. They are coming out with an 8K in "late September" to more fully explain the integration of Arena that closed on 6/30/10. I also like RRC (Range Resources) and CRK (Comstock Resources) and I think these are all very interesting contrarian plays that you need to give a lot of time to work as the market is still doing its work to the downside as Bill has said.

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  86. vb: I went back to the webinar that I attended last Friday August 20th. CNQ was one of the stocks selected for technical analysis. If you are interested I could do some video editing and cut this segment and post it to my website. It is very informative for those who want to learn just the basics.

    The anlaysis was based on the Canadian chart of CNQ. In summary the webinar leaders said that at $33.11 we have support but it is also what he calls a role reversal line. It is possible that if it breaks down below this point a further 10% decline is possible. Friday was the 3rd day of red candles. He stated that if there was a green candle on Monday he would be a buyer. Yesterday was a red candle day. Overall he did say he would be a buyer if it does not break support. You can see here that trading is a what-if-then scenario before the trade. They also talked about the two gaps down in August and that protective puts should have been a consideration if the stock had been bought at $36.50 say in July 2010. They don't use RSI in this example or any of the other stocks we looked at.

    One of the things we do with these webinars is to take a look back at it in 30 days to see the results. The webinar is solely for learning purposes and is not a recommendation to buy, sell or hold.

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  87. Kyle, thanks for re-posting the info on SD. Now I just wish that Mark would post what he knows...

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  88. hi can inv

    thanks for the very generous offer - Since I have a small position, not necessary to do all that but what is your website?

    thanks!

    i'll check back later pm

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  89. Mark - looks like you're not right...no soup for you! that is, unless a miraculous turnaround develops soon...

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  90. David - Back in 05-06 (when I first started looking at this stuff), there were people (Cramer, Eric Bolling on Fast, etc.) talking 'Global Economic Themes'. BRIC, Alt Energy, Global Infrastructure, etc were in the discussion. Right now the 52-week highs have TLT, etc.Believe it might be getting time to dust off the more 'Forward-Looking' Themes. Nat Gas is in there, but not sure if SD is the right vehicle...

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  91. take a look at the recent insider buys on CYMI. that's some heavy duty buying. might have to dip my toes in that one.

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  92. vb: My website is just a personal one provided by my ISP. I decided to use the space once I started to post here and it is just a complement to the tradingtopics blog for charts. I haven't done any updates since last month, so things are pretty dormant these days at that place on the internet. In a way it is too much work.

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  93. TOF- Probably so...but it aint over yet :)

    On a day like this it is strange to see so many of the stocks I follow green. Sadly, not the ones I'm holding.

    David- I'll try to get the SD info together. I'm pretty busy right now. Sorry, I just don't want to put out something that's not accurate.

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  94. my guess is that we snuggle right up to 1050 on the spx

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  95. overall, both in emea and here, we are still dealing with very low vol. there's more upside/worry once we slide into sept.....that's when things could get exciting or tragic depending on your position.

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  96. SMH - Coming back, now at it's opening price.

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  97. i tell you what...what if the govt offered up some sort of program to businesses where they get tax incentives for using their excess cash. like big reductions in taxes if they hire people or if they invest in certain things. i know there has been talk of this but wouldn't this be a better way to stimulate the economy? clearly a lot of people/businesses have money they're just afraid to spend it, right?

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  98. AMAT- Edging back in at 10.65.

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  99. Going 100% long at the close. 1,050 is my bogie.

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  100. HPQ- Note that a Buy Alert was triggered yesterday @ 39.04. No position at this time.

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  101. may change this depending on where we close at...

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  102. i love it TOF, hope you hit a home run!

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  103. I would be careful, tof- unless you're talking about a ST trade. I still think we're in Bull Trap mode.

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  104. Calling no joy....BAC/C/MS/GS/JPM all have sell imbalances.

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  105. i think i'm gonna chicken out. and yes, it would be just a ST trade.

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  106. cancelled my order. gonna wait for an all out spike in fear before doing a ST trade like this.

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  107. 5mins to go but it looks like spx 1050 will hold. that said, can't see any good news which will move the market higher. new home sales have to be a total train wreck

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  108. Added to GMO @ 2.95 at the close.

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  109. people wonder why no one trusts the market. take a look at the close on PIR. $5.86. prior "low" close on 7/6/10 was $5.87 so people waiting for a lower close to confirm a downtrend would look at this as confirmation. well, do you really think the demand to buy and demand to sell would even out in such a way that it would close exactly $0.01 below that close? don't you think the market maker had something to do with this?

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  110. All Along today's Market?

    Watch your step!!!

    http://www.youtube.com/watch?v=uGC1qiKowT8&NR=1&feature=fvwp

    FF

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  111. Tried to fatten up INTC @ 18.39 but no go.

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  112. 1052...What's the matter with you bro?

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  113. I am glad that I decided to buy PST "the right way" (on the way up at $40.70) as opposed to just buying it on the way down. It broke down to new lows today...

    Same thing with SD -- I still expect to make a killing on this stock, but instead of adding to my current small position at $4.25 and $4 I decided to wait until it drops down below $4 and then buy it when it crosses $4 on the way up. With this strategy, maybe it drops down to $3.50, then flattens out, and then I'll see a clear resistance at $3.60, which when broken on the way up would give an even nicer entry.

    What I am trying to say is that even if you really like a certain stock and think that it has a great long-term potential, it is STILL worth waiting to see how low the market will take this stock and THEN buy it when the selling abates. Experienced traders were telling me this a few years ago, but I didn't listen and was confidently scaling in on the way down. This "confident" strategy almost killed me during the Lehman crash... Confident people don't survive in the market -- only the careful people do.

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  114. 1050, 1052 - you know I'm not good w/math Mark!

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  115. I didn't see Patricia snap this photo of me at the close...

    http://www.screencast.com/t/Nzg3MjQ3ND

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  116. What happened to the money Mark's mom and dad paid him to tutor jb?

    They're playing right into my hands but sure are dragging things out...

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  117. cute pix Mark.

    CP - he blew all the money on Giants tix.

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  118. No trades or positions again today. Just watching it go down, I'm afraid. Was at Dr office this am when gold took off, so missed that trade.

    When I got back I tried to convince wife to take profits on DGP and reload lower, but she won't sell. She has refused to sell the last 2 spikes, and so keeps getting roller coastered, up/down going nowhere but back to starting point.

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  119. Heard "depression, not recession" discussed today on CNBC. Then Bob Pissani said SP would be 700 or 800 (I forget) if the market was pricing in another depression, so as I see it, that provides a target.

    It amazes me how many supposedly knowledgeable people are unable to see that there was never any real recovery from the first leg of the downturn, other than not continuing to go off the cliff, and was all based on the Fed printing up more credit, not anything real.

    I did notice that Ken Langone on later in the day also agreed with that scenario, but the announcers don't want to hear it at all.

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  120. One thing that strikes me as being strange about the recent decline in equities is that it is not supported by the increase in the high-yield bond spreads, which, according to markit, are still in a pattern of making lower highs and lower lows (the CDX.NA.HY series). So maybe we'll have another experience like in July 2009, when everyone was bearish on the market and that bearishness was supported by the H&S pattern on S&P, but that pattern got resolved with an amazing market advance.

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  121. So, how long will it take before anyone figures out that the budget and trade deficits need to be ended before the economy can begin to recover?

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  122. So maybe the recent decline in equities is simply due to the fact that investors became convinced about the amazing one-year old rally in stocks being over and they started switching to bonds for safety, ALL kinds of bonds. This leads to ALL bonds going up in price, both Treasuries and corporate bonds, and since the latter ones give more yield, the investors are buying them more aggressively, which leads to the spread between Treasuries and corporate bonds contracting. Such a phenomenon, however, is not going to last for a long time unless some REAL reasons surface for equities to decline.

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  123. I just got through listening to John Boehner flapping his jaws, he really could qualify as king of Oompa Loompa's, his skin coloring is a perfect match.

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