Sunday, June 16, 2013

06/17/13 Black Monday

(a) Bulls are too complacent, in my opinion. (b) Nikkei getting jiggy. (c) Tense comments on the rise at the sister site.

118 comments:

  1. David- Re gold, I'm reproducing a Jim Sinclair comment posted on CC.
    [#120609] By: Stan (39 comments) June 15, 2013 at 9:55 am

    Hi Guys – Happy Father’s Day weekend to all. Jim Sinclair had an interesting post today, here is a piece -

    “There is a short play to their “fade it” game to cover their shorts in gold shares. They started Friday at open and again at 1 pm. Here comes the big short play to cover in the gold shares. As they perceived today, weakness in general equities and their algorithms went to bear equities they also sold the gold shares irrespective of gold going higher. I will sell anything I cannot gold, from cars to boats to houses, to buy my favorite gold shares. You should do the same. The manipulators cannot sit on gold shares for very much longer.”

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    1. 2nd_ave, I cannot understand whether it is the grammar in Stan's comment or the lack of logic, but I can't figure out what he was trying to say...

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    2. David- I Googled the quote, and it's accurate: http://www.jsmineset.com/2013/06/14/friday-short-play-to-cover-gold-shares/

      But you're right- it's difficult to understand the reasoning behind his bullish take on gold.

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    3. My 2 cents, it sounds like he's anticipating short covering. He may be drunk?

      Anyway, if we want to get conspiratorial then why would the FED instruct their minions into a rush to cover? It won't happen as long as the FED can bribe the long side in cash to roll their contracts forward?

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  2. Tense comments on sister site typically result in another leg down for PM's.

    Harvey Organ maintains that GLD has no metal and is a crime scene. If true, short GLD/long gold would be my TOG.

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  3. Good for Iran. I copied the two paragraphs from the article that I find interesting. I don’t think there is a shortage of crude today and now Iran needs to sell all the crude it can to raise money. I think Rohani will do whatever it takes to generate cash, at least initially. Now that I've given you all that good insight, WTI will rally $5-$10 next week.


    http://www.cnbc.com/id/100818128
    Moderate Cleric Wins Iranian Presidency

    "Iran's rial strengthened about 4 percent against the U.S. dollar on Saturday after partial vote tallies pointed to an easy Rohani victory, web sites tracking the currency said."

    "The upshot for the Islamic Republic has been a punishing expansion of United Nations, U.S. and European Union sanctions, badly damaging its heavily oil-dependent economy and triggering a rise in inflation and unemployment."

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    1. EIA's overview of Iran's oil and gas assets. I read the first paragraph.


      http://www.eia.gov/countries/cab.cfm?fips=ir

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    2. FRO - I think FRO has been one of the tanker companies transporting Iranian oil. Perhaps this news lifted the stock Friday?

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    3. Okay, so maybe the emphasis on this news is an attempt to make mom and pop think Iran is about to flood the world with cheap brent?

      $WTIC chart looks bullish to me, about to break to upside perhaps?

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  4. "If by that you're referring to Large Traders, I don't see where they've gone long, looks more to me like they've been selling their long positions?"

    I am referring to the data in the latest Bank Participation Report, published monthly by CME. You can see the data in that report on Chart 5 at
    http://www.24hgold.com/english/news-gold-silver-cftc-gold-and-silver-bank-participation-report--ted-butler-s-comments.aspx?article=4405417298G10020&redirect=false&contributor=Jesse

    Or if you don't like "pro-gold" web sites, you can do your own search on the internet for a chart of the data in the CME Bank Participation Report. :)

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    1. Can't say I do like "pro-gold" web sites. However, how about if I don't like the CME? :)

      I'm not sure where/how finviz obtains their data, but theirs doesn't impress me as particularly reliable either.

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  5. Two opposing takes on gold:

    http://www.marketwatch.com/story/new-up-phase-for-gold-2013-06-13?link=MW_TD_latest

    http://www.marketwatch.com/story/downward-sloping-channel-means-no-go-for-gold-2013-06-14?link=MW_TD_latest

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  6. Too complacent? I mean I understand you're a short term sentiment guy and never hold anything for more than a day or two but in the bigger picture there is no way in hell people are complacent.

    Out of curiosity of the people you know, how many of them are 100% long stocks? Shit how many of us here are 100% long?

    How many people are freaked out about the Nikkei crash? Or the emerging markets' crash? How many bulls are exercising caution and saying "this is not the time to be all in on the long side"?

    Let's take a look at consumer sentiment...barely above 80. And yet we're at all time highs.

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    1. I think we should consider getting long $WTIC b/c chart looks like it may break out to retest $147 and perhaps AAPL(IH&S setup on AAPL)

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    2. Short Yen in dollars looks good too. What's the best mechanism for playing that, natty transport maybe?

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  7. Why aren't the large producers hedging gold production now?

    Well, there was the CEO of a major gold company on BNN a couple of weeks ago and he stated that he and many of his counterparts would like to hedge their forward gold production to lock in prices and thereby guarantee cash flows, but that they felt any CEO who did that now would lose his job as investors would scream.

    So perhaps the stats re the producers long positions are not as compelling as they previously would indicate.



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  8. From Barrons this week:

    Meanwhile, plummeting commodities and emerging markets are tempting bargain hunters. Money has flowed out of commodity funds for 18 straight weeks, the longest stretch ever. But commodities' woes may owe more to structural issues -- capacity built during the boom outstripped supply, and the slack can only worsen if global demand wanes.

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    1. If you want to make a buy based on an indicator, how about this one:

      https://twitter.com/hmeisler/status/345981310180929536/photo/1

      Stocks are very likely still in a bull market, so indicators are likely to still work. If they stop working, like they seem to have in commodities, you have to ask yourself if something has changed.

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    2. ALL indicators are lagging and a product of price. So simple price bars always work.

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    3. "simple price bars"

      I see those on everything I buy at the grocery store. Not so simple though, only computers can read them!

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  9. Lots of views on WLT. Tudor has a 31 pt. Volatile as hell this am.

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  10. URA/URG/CCJ - Jumping this morning, has Japan or Germany returned to nuclear?

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  11. $WTIC - Take a close look at weekly $WTIC chart. Me thinks it ain't headed down, sports fans.

    Metals overcapacity - I agree with this assumption, it's consistent with warehouses stacked to the rafters.

    However, why did BX just buy lotsa warehouse space, maybe for something other than metals storage?

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  12. FMD - $0.05 away from a beautiful day, is the obligatory shakeout done?

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  13. OSH - "Lowe's Companies, Inc.: OSH acquisition lifts exposure to recovering CA market"

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  14. ROP - Roper joins the dividend fray, time for a bear attack!

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  15. AUMN - Definitely bucking the trend. Whas-up Goldie?

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  16. TLP - Neut -> Buy

    Div is over 6% bears gonna win this one?

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  17. WLT- If you bought at the open your down 8%.

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  18. GGB - All of May, they couldn't sell this one fast enough............

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  19. MU - All of a sudden a memory shortage. Unbelievable.

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  20. ANyone of you TSLA fans playing KNDI?

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    1. Are they gonna build Tesla knock-offs? Can't do that using a 3D printer! I've heard alot of noise about of KNDI, didn't know they were listed though.

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    2. Ha, can't believe the market cap is only $200M.

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    3. KNDI - Or, maybe I'm confusing this one with Cherry? So is KNDI a Chinese knockoff of a Chinese car company(Cherry)? I'm really tired of poser Chinese equities, just as I'm tired of zerohedge, China bashers, and the SEC for continuously fostering/enabling/propagating ripoff artist havens.

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    4. yeah they're in the electric car market in China. just like any other china security, i'm pretty sure people will extrapolate out the business across the billions of people and assuming guaranteed success, driving the stock price up significantly, only to realize it's a super competitive market that consists of ruthless pricing and no profits. however, it doesn't mean there isn't a chance to make a profitable trade. after all that's what we're here for right? i mean how many of this crap businesses that we have traded/invested in have the potential to be around 100 years from now?

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    5. yes i'm taking ESL...

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    6. Uhhhhhh.......

      Surely there must be a manufacturer out there supplying real demand into a real market that's not saturated, it's not an easy task to manufacture fuel efficient jet engines that will actually start on the tarmac without exploding mid-flight.

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  21. Jock asked yesterday "does anyone even read my comments on... [#120626]
    By: goldbug58 (356 comments) Reply → Go to top ↑
    June 17, 2013 at 8:27 am
    Jock asked yesterday “does anyone even read my comments on this blog”? To be honest, I don’t go through the comments much anymore. And it’s nothing against Jock, Bill, or anyone else. For one thing, I’m not crazy about the way this site was re-designed. For another, I’ve asked questions here since the re-design was initiated and got ignored. Fair enough, I won’t ask anymore.

    This blog was great back in the 2008-2009 time-frame. A lot of savvy traders in here, and I learned a great deal just reading what they wrote. What the heck ever happened to those folks? 2nd_avenue, pillzilla, chickenpookie, I can’t even remember all the names anymore.
    Anyway. I stop by daily for Geoff’s excellent market commentary. I am also thankful to Bill for his efforts here over the years, including one or two personal e-mail responses he sent me, in addition to his work in Lessons From the Trader Wizard (which I only wish I could have had had my hands on 25 years ago).

    As for the blog, I suspect a lot of people have long since moved on.
    Cheers.

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  22. Replies
    1. I am also thankful to Bill, for showing me his colors. It took way too much prodding though, and I was slow to catch on(more accurately, give up on dialog exchange).

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  23. FDA plans to buy excess US sugar, eh?

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  24. FRO - Speaking of the devil.......

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  25. BAM - Just sold Longview timber assets to Weyerhouser and Capstone Paper, BAM recently loaned PAL a significant percentage of market cap.

    Betcha this doesn't end well, for PAL common shares.

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  26. DRAM looks really good. I keep following the spot prices of memory:
    http://www.dramexchange.com/

    They've been trending up for months now. Some of them are up well over 100% in the past 6 months. No wonder MU is doing so well.

    FMD - I keep waiting for our ASK slapper to show up. Volume is decent today.

    YRCW looks like it may have finally hit a ceiling. Tomorrow is key in my opinion. i like to see how ones like this do the day after they underperform on a big up day in the market and after they outperformed for so long.

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    1. picked up a very small position at 4.07 friday

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    2. Given the market cap, if they can show positive results / outlook I think DRAM has the makings of a parabolic move higher. completely unknown stock and illiquid with pretty significant catalyst. good recipe.

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  27. ACTS chart continues to look solid. Still hold a tiny position in it.

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  28. CECO looks like a good buy here.

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    1. I own it @2.89, but the up spikes seem to be getting lighter. I have traded it about 10 times now for 10 cent plus gains, but the last two spikes have been weaker.

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    2. Something tells me it goes right back into the $3 to $3.2 range.

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    3. Off it at 2.94 again. Nickels and dimes. Added up to over a buck by now though.

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    4. "up spikes seem to be getting lighter."

      Hmm, that description kinda sounds like a bull flag.

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  29. man WLT what a dog. In hindsight that big reversal day was a key day to get out...when it spiked to $20.7 and reversed hard that day. that one just really reminds me how important it is to admit you can be wrong.

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    1. Yep. Learn this hard way far to often!

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    2. Best I can tell, the yak herders have lost their battle against Chinese colonialism, maybe instead they like electricity, coca-cola and concrete block homes as opposed to being sand-blown their whole lives while living in tents?

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  30. DANG reminds me so much of OWW.

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    1. That is an impressive Chart. I'm game for 1000 shares.

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  31. FLOW - Sounds like maybe China has begun manufacturing their own waterjet cutting equipment. No surprise really, it's not exactly rocket science.:

    http://finance.yahoo.com/news/flow-international-important-news-165001455.html

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  32. Looks like some news leak out of AUMN is taking place now. Their website shows that a new fact sheet and corporate presentation are coming soon -- wouldn't insiders know the facts that will be revealed in that presentation? :)

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    1. "wouldn't insiders know the facts that will be revealed in that presentation?"

      I'm hopeful they have some idea of their progress, doesn't seem like they've been eagerly selling their shares recently, either. Chart even looks like it's been trending upward slightly.

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    1. I read somewhere URG claims they will be producing 20% of US consumption in the near future?

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    2. Traffic light at the trend line. Wow, lotsa volume too.

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  34. FMD - Do I hear the slapping sound of our favorite paddle wheel?

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  35. EEM> I thought long and hard (over 2 hours, actually) on Friday morning/afternoon about opening positions both in EEM and RYWVX (both gave up all of Thursday's gains on Friday). I decided against it. So I had zero motivation to post this morning. It's really not worth dwelling on, of course, or I'll end up with market madness.

    But now I have ANOTHER chance to buy into EEM, at today's close. The market just won't leave me alone.

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    1. If I buy this time, I'll get my --- kicked. If I don't buy, I'll get left behind again. You all know the situation.

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    2. One anal lysis can paralyze you for life.

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  36. Off the rest of the CHSCP @ 32.58. Got the divi and some profit free of charge. Love it when a trade works out. Look to add back in low 32's

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  37. Robot flipped ling at 1638, from short at 1622.

    Damned if you do or don't? My feeling is market is bilking shorts while tradewinds continue sinking ships which aren't seaworthy.

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  38. Demand....so hard to gauge. It not there for you until it is and there is always way more than accounted for costing you $. Wait for days or weeks then bam!

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  39. AUMN up +18% on a day GDXJ declines -1.7%.

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    1. Last time it happened, GDXJ was up more than 5% the next day, while AUMN was flat. Let's see if the history repeats itself tomorrow...

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    2. A ray of sunshine in an otherwise dark and dreary world under siege. Not sure what to think of it but I'm hoping it becomes a shooting star for no other reason than David's benefit.

      Make it happen, please.

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    3. Maybe when Big Boyz smell trouble in the near future, they start by closing, quitely, their most favorite shorts. :)

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  40. Emerging Markets - If PIE/EEM had closed better than their open I would be thinking twice about remaining on the sidelines.

    So of course these gap up tomorrow.

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  41. First, fat cat pocket rockets and now transportation as a service.

    I feel like throwing up.

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  42. FMD - I'm extremely pleased we closed above $1.18, my plan to add lower is falling apart at the seams.

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  43. Another wtf moment. EEM closes up +0.92%, so naturally traders would think that RYWVX (Rydex Emerging Markets 2x) might close up around +1.84%. Nah. RYWVX closes up +0.10 to 12.37, or +0.81%.

    Why? Well, EEM has 59% exposure to Asia, and 18% exposure to Latin America. RYWVX has similar exposure to Asia (47%), but a whopping 48% exposure to Latin America. And Brazil and Argentina finished down -0.5% and -3%, respectively.

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    1. And as CP has pointed out, PIE has outperformed other emerging markets ETFs using an approach that weights sectors showing relative strength.

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  44. Mark brought up Tudor today so I checked to see if they had any comments on Iran, and they did. Tudor's comments made me think of Venezuela which we've heard nothing about now for weeks.

    "Iran elections (Brent $106/bbl) – Hard for us mere energy analysts to know whether change will be anything more than skin deep as the more moderate of the supreme leader-loyalist (and consequently de facto pro-nuclear) candidates takes the presidential office. Meanwhile, Iranian oil production has declined 1.2 mmbpd (-32%) since before sanctions were put in place. We don't, for the time being, assume this will turn an immediate corner."

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    1. Yes, sanctions. Who will be first to step across the line, China perhaps or Japan?

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  45. I'm hearing more frequent murmurings of the Us/European trade agreement introduced first in POTUS's SOU, my understanding is the expectation might be that eurobanks would be required to maintain larger reserves(less leverage?) in order to qualify.

    eurodollars are related aren't they, due to the fact they represent (indirectly?) the degree of leverage involved?

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  46. Another case of bad news is good news?

    FRO - "China Oil Contraction Sinks Industry’s Biggest Tankers: Freight
    By Rob Sheridan - 2013-06-17T23:01:00Z"

    http://www.bloomberg.com/news/2013-06-17/china-oil-contraction-sinks-industry-s-biggest-tankers-freight.html?cmpid=yhoo

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  47. China - “They are not building infrastructure now because they need it, they are building now because they want to hit GDP targets,” says Patrick Chovanec, a business professor at Tsinghua University in Beijing.

    http://www.businessweek.com/articles/2012-06-28/for-china-too-much-steel-isnt-enough

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  48. anyone looking to short the nikkei is going to get their ass handed to them on a silver platter.

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    1. I tend to think you're right about that.

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    2. But do you think the reason is a result of BOJ policy? If so, then how can we say the US market hasn't been impacted a great deal by FED policy?

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  49. URG - Flagpole seems to suggest ~$1.35 as a target.

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    1. Good work! The price target for taking 1/2 profits is $1.36. I'm keeping my fingers crossed.

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  50. Looks like I unloaded my small position in DRAM yesterday at 4.70. Nice 15% one day pop. To bad it was a micro position.

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    1. I way to many accounts, but not much I can do about it. Always nice to see the surprise fills when they are to my benefit.

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  51. Picked up CECO at 2.83 as well this AM it appears

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    1. Low print of day shows 2.835 on my screen. Not sure how I got it at 2.83 but I'm not arguing.

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  52. Lets make some money today! Who's with me?

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    1. I'm trying to pick up some FMD at $1.17 if they want to give it to me.

      FED spew tomorrow so anything can happen doubt we rally ahead of that?

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  53. Took off the 1000 Dang for a hundo

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  54. CECO - Does that qualify as an C&H, sorta looks like one to me.

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    1. Looks like it's following a descending trend line back to Feb high, has CECO swung EBIT positive yet?

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  55. WLT - WTF, wasn't it just yesterday this one got taken to the woodshed? What a bunch of BS today is.

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  56. WTF is going on with AUMN? Not that I mind (especially the fact that it has now broken out to a new high since mid-April -- what would chartists say about that!?), but I would much rather prefer for this move to be justified by some news, as otherwise it can be reversed very easily...

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    1. Actually, I think Zacks may have put AUMN on a buy list? And as you pointed out, an update is forthcoming so maybe something leaked?

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  57. Okay, not knowing if there's some new news (news is usually conjecture, it seems) ahead of Bernanke's dog and pony show, my inclination is today is a bull trap setup in advance of tomorrow's fake takedown which will reverse.

    How's that, convoluted enough for ya?

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  58. FMD - Still not much of anything, anybody seen Mr. Flapdoodle with his 100k share asks yet today? He must be making a ton off trading this $0.03 range...

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  59. new post CP.....wondered why i was echoing today

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