Monday, June 20, 2011

06/20/11 Everybody's Talking



Everybody's talking at me
I can't hear a word they're saying
Only the echoes of my mind


Perfect description of market madness, and the appropriate response.

83 comments:

  1. Two words, not sure which one is most applicable or even if there's a difference anymore:

    1) Tedious
    2) Schizophrenic

    "Acute Schizophrenia Paranoia Blues

    I’m too terrified to walk out of my own front door, They’re demonstrating outside I think they’re gonna start the third world war,
    I’ve been to my local head shrinker,
    To help classify my disease,
    He said it’s one of the cases of acute schizophrenia he sees.

    Well the milkman’s a spy, and the grocer keeps on following me, And the woman next door’s an undercover for the k.g.b., And the man from the social security Keeps on invading my privacy,
    Oh there ain’t no cure for acute schizophrenia disease."

    On the lighter side, I discovered three newly hatched ducklings in the nest this evening, our first babies of the year. ;)

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  2. I sold my CEF today for a 44 cent/share gain after holding for exactly seven days. Just wanted to cash in and go to a higher level of cash again, now 38%. Owning no PM or miners for the time being.

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  3. CEF - Here's the chart, although MACD/ADX curled out slightly today it looks like it's headed sideways if you ask me:

    http://stockcharts.com/c-sc/sc?s=cef&p=D&yr=0&mn=7&dy=0&i=p99295968853&a=217994610&r=7736

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  4. http://online.barrons.com/article/SB50001424053111903668804576385843437356436.html?mod=BOL_hpp_highlight_bottom

    I know you like Hulbert 2nd.

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  5. Chart action on RIMM resembles CSCO only worse. Gap down and slide. Rinse and repeat.

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  6. GDX chart:

    http://stockcharts.com/c-sc/sc?s=gdx&p=D&yr=0&mn=7&dy=0&i=p99295968853&a=217994610&r=7736

    GDXJ chart:

    http://stockcharts.com/c-sc/sc?s=gdxj&p=D&yr=0&mn=7&dy=0&i=p99295968853&a=217994610&r=7736

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  7. RIMM chart:

    http://stockcharts.com/c-sc/sc?s=rimm&p=D&yr=0&mn=7&dy=0&i=p99295968853&a=217994610&r=7736

    CSCO chart:

    http://stockcharts.com/c-sc/sc?s=csco&p=D&yr=0&mn=7&dy=0&i=p99295968853&a=217994610&r=7736

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  8. RBY chart:

    http://stockcharts.com/c-sc/sc?s=rby&p=D&yr=0&mn=7&dy=0&i=p99295968853&a=217994610&r=7736

    UXG chart:

    http://stockcharts.com/c-sc/sc?s=uxg&p=D&yr=0&mn=7&dy=0&i=p99295968853&a=217994610&r=7736

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  9. Here is what Dr. Wish of wishingwealth.com has to say about market timing:

    "I think it is possible to time the market. People also say that once you get out you will miss the bottom and some of the subsequent rise. Hogwash! If I get out of a mutual fund at say, 80, and it falls to 60, as long as I get back in before it goes back above 80, I have managed the risk and done well. And maybe I will get back in around 70 and come out way ahead. I have not exited my university pension mutual funds because of their unacceptable rules against market timing. However, if I were in mutual funds or better still, exchange traded funds which I could trade at will, I would have taken some money off of the table by now."

    He does have a system to keep him out or in. I read him fairly regularly.

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  10. How's Dr. Copper feeling these days? BB thought maybe Peru (BAP/EPU) wasn't the place to watch and I see nothing immediate there, but here are those charts anyway:

    http://stockcharts.com/c-sc/sc?s=bap&p=D&yr=0&mn=7&dy=0&i=p99295968853&a=217994610&r=7736

    http://stockcharts.com/c-sc/sc?s=epu&p=D&yr=0&mn=7&dy=0&i=p99295968853&a=217994610&r=7736

    These are more interesting but only slightly:

    http://stockcharts.com/c-sc/sc?s=xta.l&p=D&yr=0&mn=7&dy=0&i=p99295968853&a=217994610&r=7736

    http://stockcharts.com/c-sc/sc?s=fcx&p=D&yr=0&mn=7&dy=0&i=p99295968853&a=217994610&r=7736

    And why is every single IPO as a rule overpriced from the get-go?

    http://stockcharts.com/c-sc/sc?s=glen.l&p=D&yr=0&mn=7&dy=0&i=p99295968853&a=217994610&r=7736

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  11. Thanks, tof. I read Hulbert's contribution to Barron's last week. He does a good job of presenting all sides. As always, a case can be made for any scenario.

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  12. Dr. Wish - I agree, just using the RSI for oversold and overbought yields a huge advantage. Go to the YHOO bear ETF boards tonight for proof.

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  13. Dr. Wish keys in on Nasdaq/tech stocks and uses QQQ quite a bit. Also is an IBD fan where momentum is king. I follow SPX more than NAZ. BTW, my algo that put out a bottom spotter last Thursday for SPX confirmed it today when close was above the top of Thursday's candle. Long term trend is still up but ST/IT still down.

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  14. Developing nation inflation... Too many people chasing too few goods?

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  15. illini - Your algo sounds like it's hitting on all cylinders. May the force be with you! :0)

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  16. SRS - Here's an example of a chart I'd be hard pressed to buy based upon technicals (Not that I'd try using technicals on an ultra ETF anyway):

    http://stockcharts.com/c-sc/sc?s=srs&p=D&yr=0&mn=7&dy=0&i=p99295968853&a=217994610&r=7736

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  17. Value: "What was "normal" for the past decade has nothing to do with "normal" at all."

    http://globaleconomicanalysis.blogspot.com/2011/06/value-traps-galore-including-financials.html?utm_source=feedburner&utm_medium=feed&utm_campaign=Feed%3A+MishsGlobalEconomicTrendAnalysis+%28Mish%27s+Global+Economic+Trend+Analysis%29

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  18. T3d the rational part of us agrees with mish but that guy is more chicken little than zerohedge

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  19. TOF, just posted for looking at the other point of view. I think there is great truth to what is normal or as Pimco likes to say the new normal. There is no normal just comparisons to times past looking for clues to the future.

    I used to always wonder about what reality is. For instance, is what my eyes see, is it what you and everyone else sees?

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  20. Placing a buy limit GTC order to buy 1000 more shares of CADC at $1.56 (in addition to the 1000 shares I purchased last week at that price). Also, placing a GTC buy limit order to buy 2000 more shares of CADC at $1.25.

    Tonight I got a response from the CADC investor rep about the outstanding warrants (which are a major liability for the company, as the change in their fair value is about 1/3 to 1/2 of their GAAP EPS. Here is the response I got:

    *****

    Of the original 875,000 investor warrants, 616,375 remain outstanding as of 3/31/11. They have an expiration date of 6/11/13 and each warrant is entitled to purchase 2 shares at $2.40 per share. There is also is a cashless exercise provision.

    In this fiscal year 62,500 warrants were converted into 64,783 of common stock on a cashless basis as per the most recent 10Q. The reason the 62,500 warrants weren't converted into 125,000 shares of common stock was due to the cashless exercise provision when the share price is in excess of the warrant exercise price.

    Please refer to Notes 3 & 11 in the most recent 10Q for a more complete description of the warrant activity and the remaining warrants outstanding.

    ****

    The moral of the story is that CADC cannot stay below $2.40 for a long time...

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  21. SVM - I see where BC bought this one with the expectation of a 13 handle in the months to come.

    I think it's a good move.

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  22. AKAM - Another CSCO/RIMM type chart. But I hear the internet relies heavily on AKAM, so what's the real story there?

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  23. CP- AKAM/APKT...Keeping an eye on both.

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  24. SVM- I actually like this one. Did a quick finvix check, seemed pretty good.

    Opened 2000 shares @ 8.72.

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  25. 2nd- Still in the hospital. Lung/leg infection still a problem. Hopefully he will get out in a few days. Thanks for asking.

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  26. Anyone who saw this morning's NDQ rally coming, raise your hand.

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  27. CADC - Apparently they liked David's bedtime story! ;)

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  28. SVM - Gaped up this morning and yesterday morning, just so you're aware and still wanna add.

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  29. SVM - Here's the chart, curling outward pretty as a picture of an airbrushed porn star.

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  30. http://stockcharts.com/c-sc/sc?s=svm&p=D&yr=0&mn=7&dy=0&i=p99295968853&a=217994610&r=7736

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  31. SVM - Raised my bid from $8.40 to $8.58, trying to get in.

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  32. OK, got to hop. Keep up the good work.

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  33. Here is my concern with financials:

    http://www.bespokeinvest.com/thinkbig/2011/5/27/sp-500-sector-weightings-tech-drops-while-energy-and-health.html

    You can see financials were overweight compared to their historical weighting from 2001 - 2008. This caused overinvestment and there is too much competition for the amount of business in financials now. I think there are select areas in the financials you can invest (like insurance), but you need to be selective and I think small caps are in a lot of ways safer due to the number of people still trying to make the big financial companies pay for the crisis.

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  34. EXPD - Another example of the pincher:

    http://stockcharts.com/c-sc/sc?s=expd&p=D&yr=0&mn=7&dy=0&i=p99295968853&a=217994610&r=7736

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  35. Nice to know that trading the market actually worked...My OIH and OIH calls are up big today. I gotta say that yesterday's reversal was a pretty clear indication that the bears were losing steam. If bears really start to cover we could see 1,330-1,340 again, which would make a lot of people question if we drop lower again. I personally think we have a date with 1,235 at some point but it would be for buying in my mind.

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  36. This is the kind of open that has to frustrate day trading trend followers, no? If you're following Landry, you've been playing the short side ('wait for entries, of course').

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  37. Chicken,

    All my copper stocks doing well today - better than the metal, same as gold today.

    Either the price of the metals come down or the price of the stocks need to go up. Looked at buying some JJC puts, but too expensive.

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  38. BB - I think copper is in an uptrend, I thought it should follow gold this time around but simple demand may be the primary driver.

    But if demand were the driver, then why are analysts calling for softer prices longer term?

    Consider if you will, gold being the center of the monetary universe and everything else orbiting around gold in elliptical patterns. silver and copper along with most other commodities have recently returned from the apex of their orbits and so now we're anticipating higher prices (or at least, not anticipating lower prices).

    Then the news of China's restocking of what' about 300K tons.... Is that really a big deal though, how about maybe commodities demand has been strong all along and we were just told differently by the media?

    I think it's necessary to follow the charts.

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  39. Cashed in my OIH

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  40. LME Copper inventory is trending down, but if China's copper comes from elsewhere, then doesn't that indicate someone besides China is buying copper?

    http://2.bp.blogspot.com/-gvb0v4toptE/TgCvYAi71qI/AAAAAAAADjw/I9y--DUBJhk/s1600/lme-warehouse-copper-30d%2B%252806-21-2011%2529.gif

    In fact, it appears China's copper consumption may have decreased over last year:

    "HONG KONG, June 21 (Reuters) - China's apparent demand for refined copper
    dropped 2.1 percent in May from the previous month and 13.5 percent from May
    2010, Reuters calculations based on official Chinese data showed on Tuesday."

    http://af.reuters.com/article/metalsNews/idAFL3E7HL1ID20110621?sp=true

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  41. So in short, now the media info on copper is pointing in many different directions from my perspective.

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  42. Greece - The bailout vote is scheduled for tonight, right?

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  43. "Greece - The bailout vote is scheduled for tonight, right? "

    This vote will save capitalism! I think sell the news will be the play i am leaning towards.

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  44. Somebody help me out. Europe prints some money to bail out Greece and this somehow makes the dollar go down .6%. Can someone explain how this works. I am not being my usual facetious self. I really want to know.

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  45. What, no one likes guns anymore?

    SWHC.

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  46. RB- It just does.

    BTW, how come your not COOL you fool? Right up your alley.

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  47. I need it to get over the 5 DMA of $3.27 rules are rules!

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  48. RB - It's called debasing, everyone knows the US follows suit and so the race to the bottom continues pedal to the metal until the banks are saved. Sounds like a good plan to me if it works, I wish them luck!

    Speaking of metal, my target for gold remains $1600+ by Labor day.

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  49. Stalking zagg right now. Hesitating because I am a chicken.

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  50. I like the plan with the stipulation that at some point for it to succeed they'll have to find a way to restart the jobs creation machine.

    Maybe that will happen as too many people begin chasing too few products?

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  51. Looking at the plan strictly from the outside-in, it does have a likeness to a circle jerk. Not that I would be immediately capable of recognizing one...

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  52. PPC - When I posted that, the price was $4.50...

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  53. RBY - Man I was quietly thinking that one was completely flushed...

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  54. CP So is there a story with that last comment? Greeks and circle jerks has my mind in a state of bliss. i have forgotten about zagg and cool.
    http://www.youtube.com/watch?v=EmOH5f1J1Uc&feature=related

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  55. "Somebody help me out. Europe prints some money to bail out Greece and this somehow makes the dollar go down .6%. Can someone explain how this works. I am not being my usual facetious self. I really want to know."

    RoBear, when the market expects Greece to be bailed out, Euro goes up (it was down recently because people were pricing in the probability of a dissolution of a Euro zone and the end of the Euro), and since the $USD index gives the price of $USD in a basket of other currencies where Euro has by far the largest weight, $USD goes down.

    That's why if we see that $USD is up, that does not necessarily mean that gold will be down (this is a mistake Bill Cara has been making for years now). If $USD is up because Euro is down on the fears of Eurozone dissolving, then gold will be up as a safe haven (we have seen this many times during the past couple of years). However, if $USD is up not because someone else is down but because something is really improving in the USA, THEN gold will be down (and the stock market might very well be up). So we need to look at the causes of each move in $USD, rather than at the moves themselves, before predicting the impact of $USD moves on other securities.

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  56. David - I hope you don't extend that logic into a conclusion that states: gold is up relative to the dollar because of an economic slowdown.

    I expect the conclusion coincides with real rates on T's being negative.

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  57. What was that solar supplier Jesse liked?

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  58. RB - My advice entails keeping your distance from Greeks sitting in a circle, especially if you were invited. ;)

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  59. Guys instead of racking your brains on this dollar stuff just buy MITK

    by the way, how about this pattern:
    last 4 days of gains: +2, +4, +8, +16 S&P Pts

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  60. 32,64, 128. That would get me out of solitary.

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  61. Besides, the dollar isn't really down unless it's testing s new low. Note that gold doesn't test it's high as the dollar tests it's low, there are lots of moving pieces to the puzzle and whichever is in the news of the day seems to be the one that takes priority.

    Meanwhile through the rough seas, the ship remains on course to it's final destination.

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  62. "David - I hope you don't extend that logic into a conclusion that states: gold is up relative to the dollar because of an economic slowdown."

    In the past, gold was usually up on the days when the market was fearing economic slowdown...

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  63. "Guys instead of racking your brains on this dollar stuff just buy MITK"

    Looking at the chart, the recent pullback in MITK to $6 might have been all that was needed to shake some people off after its amazing rally from $3.50 to $7.50, and now MITK might very well be on the way to a new high. This conclusion is supported by the fact that the recent low at $6 was above the previous low at $5.50, and a pattern of higher lows usually resolves into consequent higher highs.

    So if any of you have followed me into ECUXF under $0.70 in May, now might be the time to cash in your gains (ECUXF closed at $1.09 today) and invest those proceeds into MITK. I, of course, cannot do it, since I have a bet with 2nd_ave and T3d about ECU closing above $2.25 before the end of 2012, and I want to get there with ALL my 200K shares intact. Actually, I want to get to $5 on ECUXF with all my 200K shares intact, and then sell them for a nice round one million bucks. :)

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  64. Solar - Was it SORL??? I don't remember too well.

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  65. "In the past, gold was usually up on the days when the market was fearing economic slowdown..."

    Hmm, I seem to recall gold moving in the same general direction as the market.

    ECU - I vote for holding out for the round figure. ;)

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  66. "ECU - I vote for holding out for the round figure. ;)"

    Well, on a more serious note, selling ECU now would be a total madness, since ANY DAY now they can release the drill results from the massive high-grade sulphide zone. Then, this summer they promised to put out the economic feasibility report. Only after these two events happen (and ECU might easily be above $2 at that point), only THEN I MIGHT think about taking a small partial profit on ECU. After the summer events, there will be a 6-month hiatus until the next two important events: updated 43-101 and earnings for 4Q2011 (when they plan to reach production of around 1000 tpd, up from current 650 tpd).

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  67. But maybe you're right in the sense that gold is moving in the same general direction as Treasuries... Actually, I expect it should under ordinary circumstances but who exactly is buying Treasury debt these days? I think it's the FED, so Treasury prices are in effect being manipulated higher, which is an inflationary mechanism that should effect on PM's higher prices.

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  68. David - Ok, let's see what gets where first:

    ECUXF at $5/share
    MITK at $25/share

    The former would give you $1 Million, the latter would give me $1 Million.

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  69. Chicken,

    it's hard to track the metal flows. For example, the metal in storage in the Detroit warehouses(to feed the mid-west industrial complex) is counted in the LME inventories.

    It's my understanding that China mainly draws from the Asian warehouses which would be included in the Shanghai inventories, but China could draw from the LME warehouses as well if needed (just higher trasport costs).

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  70. David/TOF - I expect both of you to reach your goals, so don't let me down! ;)

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  71. BB - I'm of course no longer attempting to correlate Chinese copper consumption with LME inventories since you pointed out some of the detail.

    I find it interesting that CS is forecasting $5.50 copper this year, while Glencore is forecasting softer commodities demand, specifically copper, from China.

    Based upon your clarification, the LME drawdown doesn't dispute a slowing Chinese demand forecast but does speak well to western world demand.

    The funny part of the equation I'm wondering about at the moment is why copper prices didn't better forecast an LME drawdown in advance. Perhaps it was fear of no resolution to Europe's financial issues....

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  72. "The former would give you $1 Million, the latter would give me $1 Million."

    OK, it's a fair race! I don't doubt that both of our stocks get where we want them to be within 1-2 years. The question is -- will we still be holding our large positions? Not jumping off when they triple and instead waiting for them to rise 5X will be amazingly hard...

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  73. David - That's the hardest part about investing...holding on to your gains and not selling. My guess is there's no chance in hell I hold til then. I'm not the buy and hold type. This holding will probably end up being the longest holding I'll ever have. I've never held anything for more than a year so I'm trying to change the way I think which after 32 years isn't easy.

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  74. WASHINGTON | Tue Jun 21, 2011 5:32pm BST

    WASHINGTON (Reuters) - Sales of previously owned U.S. homes fell to a six-month low in May and prices dropped 4.6 percent from a year ago, pointing to a housing market still struggling to regain its footing.

    SRS lost another 1.84% again today and last I checked employment hadn't improved, is there a big spring being coiled up somewhere?

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  75. My algo flipped today on SPX confirming a short term bull off of the confirmed bottom spotter which is in place at 1258. Now it is saying, in words, that we are in a short term rally within an intermediate term pullback within a LT bull market. You comprehende? Neither do moi, except that things are looking up for the moment. A downer tomorrow could change all that.

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