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>> Are you talking about servicing the debt or being able to pay off debt coming due and not being able to refinance? <<
Both. In terms of a company earning .97 cents you cannot just assume that that's all after paying off debt. In the past EP has reported pro-forma numbers. Better to look at cash flows vs earnings.
EP - cash flow and debt payments. Different people have different views on this matter. You may come to the conclusion that they do cover debt payments, but the "extra" margin is doesn't provide enough safety in this environment imho.
I wouldn't call EP's books clean. Have you gone through their 10Q's are tried to understand it all? The still have plenty on the books in terms of mark-to-market transactions. Cash flow doesn't cover debt. S&P downgrade of 5 notches should be a wake up call that EP's survival isn't so cut-and-dry.
EP probably has greater exposure to CA litigation than any IPP or utility.
I think at some level it will be an ok bounce play, but not touching it yet. And I'm surely not going to build a long term FA position on it.
Timing of CEO departure is also a little curious.
EP can probably survive or at least buy a few years by selling E&P assets, but that's the heart of the company and it's cash flow.
Tred carefully.
>> Greenspan said Consumer debt not a problem. Do you dare to disagree with him? <<
Gee, wouldn't be the first time he's been wrong. LOL.
He will eventually go down as one of the worst central bankers we've had. Open your eyes people.
gemxwavedotcom = ignore = spammer = promoter
>> Gold stock action truly awful. Still holding a small position but would not fream of hiking it until the stocks start to act much better than POG -- preferably on a day when POG is plunging. <<
What are you talking about? Gold did plung from a high of 390 in premarket to 370 in open market late day trading.
The HUI is down about 4%. Not bad all things considered.
Another $20 drop and if the HUI can fall less 5% and we'd be in excellent shape for a decent gold share rally imho.
Yea, but you also believe in the recovery...
and the market...
and the Tooth Fairy...
and Santa Claus.
Does anyone really believe CSCO's version of GAAP?
...I don't.
>> Jim, here's a heads up. RRI <<
Agree, see the same pattern. Bought yesterday between 4.15 and 4.22 in my IRA trading account in antipation of either a market bounce or a small run into earnings.
We need to cross 4.35 some time today or tomorrow and we likely hit upper 4's low 5's prior to earnings.
Still have my very large LT position at 1.85.
>> Better get the economy going and in a hurry. The election train will be leaving the station soon <<
You assume they have the power to do so. Greenspan so far has utterly failed. The fiscal policy being proposed will do very little.
I love it when people's best 3 reasons for a market rally are:
1) Markets will go up after war uncertainty is lifted
2) Markets can't fall 4 years in row, can they?
3) Markets go up in an election year.
What a joke. At this point any rally will be just another short term bear market rally.
>> Bet that markets much higher at Mar 31 than now? <<
Guess you're betting on war, quick and swift and then a rally, eh?
Too concensus. Try again.
Sentiment is in favor of reducing short positions here, but I don't see a compelling case for going long given the recent technical breakdowns and underlying FA.
>> Lets see, Iraq gets an extension til 3/1...... <<
Not what the markets would like to hear. Continues the uncertainty. A small rally here is likely due to an oversold condition. That's about it. Another 1/4 cut? LOL. Desperation. What have the other's accomplished?
>> Gold Related <<
I use the HUI along with many other things as indicator on when to sell or buy. There are no options or any direct way of buying the HUI that I'm aware of.
Currently I'm KGC, HL and WHT, but over the past year I've been in/out of NEM, SSRI, PAAS, HMY, BGO, DROOY, CDE, and MNG in addition to the previous three.
I consider KGC a core holding. The others come and go.
>> Shorts attacking gold miners <<
I think that's a lousy explanation for the divergence in gold vs gold shares. Contributing factor? Maybe a little.
Sure a few like DROOY have gone massively up, but for the most part short interest has stayed level from mid Dec to mid Jan. In some cases it went down slightly, in others up slightly.
http://www.nasdaq.com/asp/quotes_full.asp?mode=&kind=shortin...
In the case of DROOY there are some who believe some funky accounting may be going on there.
KGC is obvious as many arbs buy ECO and TVX and hedge by shorting KGC. Given the average daily volume on these shares the short interest alone would not suffice to keep these shares from rising.
In order to surpress the HUI we'd have to see MASSIVE shorting similar to DROOY in every HUI issue. Not happening. It's one thing to suppress an individual company by shorting...it's quite another to suppress an entire sector.
Very poor writing imho.
I think Sinclair and other's have done a much better job at explaining the divergence.
>> U.S. pension agency loses $8 billion <<
Shhhh. The RECOVERY IS HERE!!!
How anyone can believe that leaves me laughing every time I think about it.
The recovery is here!
Gold and tangibles are coming back. Glad I picked up more servings of HL at 4.5 and 4.55 today.
The recovery is here!!!
...sorry gives me a good laugh everytime I read that.
Increased my HL position (gold/silver).
The XAU is showing a possible breakout today and the HUI is not far from breaking out either.
Must read on '91 Iraq war vs now in relation to markets, Dollar and gold.
http://www.gold-eagle.com/editorials_03/milhouse012203.html
Maybe some of the delusional market bulls around here will come to their senses...but I doubt it.
Porter, learn how to read a chart. They were still net short. The only thing the chart shows about the commercials at the bottom is that they were caught in a short squeeze. Actually if you look at the entire chart from '92 on, then the commercials overall were a good contrarian indicator.
This bottom (unlike the '93 bottom) has formed over 4 years. The ensueing rally could be far more powerful.
>> I had to scare the shi* out of him and explain the Kondratieff cycle, USD <<
I've tried with numerous friends and family. I've pretty much given up unless it's a relative. 95%+ of the "mutual fund" investors out there have no idea what could be coming if the sh*t truely hits the fan.
Bernard, thanks for the chart. Do you have one that goes back to the 70's?
>> The Commercials always prevail. <<
WRONG. Look at the '93 run in gold to 400+. Commercials were short the entire time. There are quite a bit more FA items in alignment on this run. Commercials will get crushed.
>> give WHT a swift kick in the ass for me? Grrr!! Too many nervous nellies over the financing <<
I expect it to remain that way until more details are disclosed. However, keep in mind this was negociated with 310 POG so if you trust WHT management it's a great time to buy. Even if the deal falls through it's still a great company.
I consider it a long term core holding so not touching it here.
THE RECOVERY IS HERE!!!!
Not the economy stupid, gold. Looks like the start of a new multi-year gold bull as we took out multi-year resistance lines today. Dollar index broke 100. Now all we need is for the HUI to break 155.
Long KGC, WHT, BGO, HL
>> Gold stock action remains quite subdued given the strong rise in POG. <<
It's been subdued for some time now, but watch what happens if we break HUI 155. I think NEM is primed for another move over 30. With NEM leading the way I think we'll see HUI 155+ on this move then the fireworks begin. IMHO.
Perhaps I don't short the market so I don't care if it goes up in particular. Perhaps I own quite a bit of gold and RRI the past couple months. Perhaps even my nightmares of late would seem like bliss to you. <G>
>> The economy is in real recovery <<
You're dreaming.
He shamelessly pumps a stock w/under 20 mil in market cap. Spammer.
OT - Again thank you for the feeback. Have always enjoyed your charts in the past and one of these days I'll learn and take the time to post some of my own. Tried the directions listed here before and failed miserably.
Augie, thanks for the responses. It started w/Slider basically calling for deep pullback (300 to $310 gold again) which caused me re-evaluate the charts again.
Others have classified the recent HUI trend as an ascending triangle which I don't see. I agree with your intrepretation a symmetrical triangle breakout at HUI 125.
Here's the ascending triangle version which I believe is drawn incorrectly. Let me know if you agree/disagree. Thanks.
http://www.siliconinvestor.com/stocktalk/msg.gsp?msgid=18462952
More gold TA - debate on short term top in gold vs continuation of trend.
http://www.siliconinvestor.com/stocktalk/msg.gsp?msgid=18464008
Need an opinion on the recent gold move. Looking at a 10 year chart of gold would the posters here classify the recent move off the lows as cup and handle or a rounded bottom?
Here is my reasoning:
http://www.siliconinvestor.com/stocktalk/msg.gsp?msgid=18464008
A crude 10 year chart for gold can be found here. Don't have my other links handy right now.
http://kitco.com/market/
Continuation of the gold bull (near term) ?
(Originally posted on SI to respond to Slider)
Slider you have argued the bear case quite well. I concede many of your predictions could come to pass. So rather than rehashing the bear case let me show why potentially the opposite may occur or at least the pullback may not be as severe.
1) GLG, GG, AU and RGLD all made new highs recently (unlike the HUI which was stopped at the previous high). If you assume that these are the leaders then it would follow that other plays within the sector will follow their lead before any significant pullback.
2) Reading the current HUI chart from Nov 2001 to present as ascending triangle I believe is invalid due to presence of large amounts of white space. Also if using HMY as an example since the HUI doesn’t have volume then HMY’s volume doesn’t fit the typical trend for an ascending triangle. HMY seems to track the current HUI trend better than most.
3) If the current chart does not represent an ascending triangle I would argue that chart pattern most represents a symmetrical triangle from July 2002 to Nov 2002. This symmetrical triangle ranged 155 to 93 or 62 pts. Breakout occurred at roughly HUI 125. Add in 62 for approximate target of 190. According to Bulkowski average for sym triangles hitting price target after upside breakout is 81%.
4) Even assuming the current pattern is an ascending triangle we don’t have more than 2-3 months till the apex and as we can see with the past symmetrical triangle breakout it can occur well before the apex. Given the gold FA I would argue that the best plan is to hold a modest position until trend lines have been violated in either direction (currently 120 and 155 respectively)
5) A delayed start of the Iraq war favors the gold bulls. Those who have hedged the war with gold and gold stocks must (or will likely) hold positions until not only the start of hostilities, but until the outcome of the war becomes somewhat certain. A longer delay allows the fundamentals that are present in the current gold bull to overwhelm the current commercial short position since fewer longs exit relative to the recent price gains. The potential exists for this war to be delayed until summer or even next fall.
6) Long term uptrend line (Nov 2000) on the HUI is currently around 120 to 125. A pullback to 95-105 would violate this trendline while if anything the FA has become much stronger in favor of gold during the last 6-12 months.
7) ABX, PDG, NEM and other hedgers still have well over 1 year’s full supply of hedges to buy back. They are all praying for another pullback to anywhere close to 330-335 in which to cover again. Due to their degree of hedging these companies have created an artificial dampening effect on the HUI/XAU. I could be wrong, but believe this underlying buying support was not present in the ’93 to ’95 run.
8) 325 to 330 resistance held 4 times during the present run. This area should provide very strong support in any pullback. Looking back to the previous times gold was around 325 to 330 during the past year and the HUI levels we have approximately (June 1, 140), (July 15, 130), (Sept 15, 130), (Dec 1, 120). Approximate support with gold at 325 to 330 is about HUI 130. The recent lows on the HUI (92-105) were only achieved w/ gold at 302 and 310 respectively.
9) I would contend that recent Dollar weakness specifically the break of the uptrend line from ’95 is largely responsible for gain in gold and the break over 330, not the pending/potential Iraq war. I would argue that for gold to see 302 to 310 again near term that the Dollar would have to break back above this trend line. Given that most are calling for the Dollar to stay weak if not weaken further to help combat deflation I find this unlikely.
10) Most of the gold FA is not going away anytime soon. The best way to catch gold bulls and bears alike off guard would be to cause a near term spike in gold and gold shares over the 360 and HUI 155 level. See some of my previous posts on options outstanding on both NEM and the XAU.
11) An HUI breakout could occur if NEM were to break the 32.75 mark. Looking at the 2 year chart of NEM the past year very closely resembles the period when NEM was struggling to break 25. It had a triple top breakout. Now the mark is around 30. I think a triple top breakout is more likely than a triple top (which are rare). Also looking at the options on NEM it would seem unlikely that NEM would close significantly below 27.5 by March expiration.
12) As illustrated from this past Friday’s action in the broad market a falling market does not necessarily help gold and gold stocks, but I would argue that in general it’s supportive. Based upon the VIX, and other factors noted before I think it’s more likely that the next 6 months will bring about a retest and a potential break of previous market lows. Alan Newman and a few other good market timers are calling for this as well.
Many of these points reflect TA vs FA. I think the FA is getting to be well known at this point so I didn’t really want to argue as much from this perspective since we’re all more or less in agreement on the long term FA.
I’m not a raging gold bull ST here by any means. The safest position to take would probably be a small to modest position and buy after a breakout of HUI 155. Some of the upside would missed, but if this breakout occurs there should be enough laggards to play as to still make it very profitable. However, I’ve had better gains in the gold sector when I didn’t try to time the short terms moves as much as the intermediate to long term.
In the past I’ve been as high as 100% gold stocks so I consider my present position at about 33% to be modest. I would probably put a sell stop in around HUI 120 right now, but this level will be rising over the next couple of weeks.
Continuation of the gold bull (near term) ?
(Originally posted on SI to respond to Slider)
Slider you have argued the bear case quite well. I concede many of your predictions could come to pass. So rather than rehashing the bear case let me show why potentially the opposite may occur or at least the pullback may not be as severe.
1) GLG, GG, AU and RGLD all made new highs recently (unlike the HUI which was stopped at the previous high). If you assume that these are the leaders then it would follow that other plays within the sector will follow their lead before any significant pullback.
2) Reading the current HUI chart from Nov 2001 to present as ascending triangle I believe is invalid due to presence of large amounts of white space. Also if using HMY as an example since the HUI doesn’t have volume then HMY’s volume doesn’t fit the typical trend for an ascending triangle. HMY seems to track the current HUI trend better than most.
3) If the current chart does not represent an ascending triangle I would argue that chart pattern most represents a symmetrical triangle from July 2002 to Nov 2002. This symmetrical triangle ranged 155 to 93 or 62 pts. Breakout occurred at roughly HUI 125. Add in 62 for approximate target of 190. According to Bulkowski average for sym triangles hitting price target after upside breakout is 81%.
4) Even assuming the current pattern is an ascending triangle we don’t have more than 2-3 months till the apex and as we can see with the past symmetrical triangle breakout it can occur well before the apex. Given the gold FA I would argue that the best plan is to hold a modest position until trend lines have been violated in either direction (currently 120 and 155 respectively)
5) A delayed start of the Iraq war favors the gold bulls. Those who have hedged the war with gold and gold stocks must (or will likely) hold positions until not only the start of hostilities, but until the outcome of the war becomes somewhat certain. A longer delay allows the fundamentals that are present in the current gold bull to overwhelm the current commercial short position since fewer longs exit relative to the recent price gains. The potential exists for this war to be delayed until summer or even next fall.
6) Long term uptrend line (Nov 2000) on the HUI is currently around 120 to 125. A pullback to 95-105 would violate this trendline while if anything the FA has become much stronger in favor of gold during the last 6-12 months.
7) ABX, PDG, NEM and other hedgers still have well over 1 year’s full supply of hedges to buy back. They are all praying for another pullback to anywhere close to 330-335 in which to cover again. Due to their degree of hedging these companies have created an artificial dampening effect on the HUI/XAU. I could be wrong, but believe this underlying buying support was not present in the ’93 to ’95 run.
8) 325 to 330 resistance held 4 times during the present run. This area should provide very strong support in any pullback. Looking back to the previous times gold was around 325 to 330 during the past year and the HUI levels we have approximately (June 1, 140), (July 15, 130), (Sept 15, 130), (Dec 1, 120). Approximate support with gold at 325 to 330 is about HUI 130. The recent lows on the HUI (92-105) were only achieved w/ gold at 302 and 310 respectively.
9) I would contend that recent Dollar weakness specifically the break of the uptrend line from ’95 is largely responsible for gain in gold and the break over 330, not the pending/potential Iraq war. I would argue that for gold to see 302 to 310 again near term that the Dollar would have to break back above this trend line. Given that most are calling for the Dollar to stay weak if not weaken further to help combat deflation I find this unlikely.
10) Most of the gold FA is not going away anytime soon. The best way to catch gold bulls and bears alike off guard would be to cause a near term spike in gold and gold shares over the 360 and HUI 155 level. See some of my previous posts on options outstanding on both NEM and the XAU.
11) An HUI breakout could occur if NEM were to break the 32.75 mark. Looking at the 2 year chart of NEM the past year very closely resembles the period when NEM was struggling to break 25. It had a triple top breakout. Now the mark is around 30. I think a triple top breakout is more likely than a triple top (which are rare). Also looking at the options on NEM it would seem unlikely that NEM would close significantly below 27.5 by March expiration.
12) As illustrated from this past Friday’s action in the broad market a falling market does not necessarily help gold and gold stocks, but I would argue that in general it’s supportive. Based upon the VIX, and other factors noted before I think it’s more likely that the next 6 months will bring about a retest and a potential break of previous market lows. Alan Newman and a few other good market timers are calling for this as well.
Many of these points reflect TA vs FA. I think the FA is getting to be well known at this point so I didn’t really want to argue as much from this perspective since we’re all more or less in agreement on the long term FA.
I’m not a raging gold bull ST here by any means. The safest position to take would probably be a small to modest position and buy after a breakout of HUI 155. Some of the upside would missed, but if this breakout occurs there should be enough laggards to play as to still make it very profitable. However, I’ve had better gains in the gold sector when I didn’t try to time the short terms moves as much as the intermediate to long term.
In the past I’ve been as high as 100% gold stocks so I consider my present position at about 33% to be modest. I would probably put a sell stop in around HUI 120 right now, but this level will be rising over the next couple of weeks.
Sly, show me where I ever said the Dollar decline was due to Al Queda? I made the stipulation that it was probably one of their targets, but did they cause the decline? No. The Dollar would have fallen on it's own merits with or without 9/11. Like any bubble the exact timing of the fall is never known, but it was inevitable. That's why I've been in and out of gold stocks for the past 2 years long before they were ever mentioned around these parts.
I'm about 28% PM stocks here which I consider a core position. I lightened up a tad over the past couple days (posted on SI). Will be looking to add when this short term correction is over.
It would appear that Sinclair re-posted part of a hoax w/regards to the Al Queda interview. Oh well. Stil think part of their mission is the disruption of the US economy and the debasement of the US Dollar - especially as it pertains to trade in ME oil.
>> itsallcyclical, I just noticed you can't pm me back if you wanted to. No problem <<
No can't PM yet. May decide to pay at some time, but not really compelled to yet as I'm a member of SI. Enjoyed your PM response though. Not trying to stir the pot, but occationally you have to speak up.
As usual I'm not short the market here, but I think it's very vulnerable. About 28% gold stock here, some cash and a very large amount of RRI.
Dollar and Al Queda, Fiat vs Gold
Sly's response to George Cole:
>> Actually the dollar hit its double high right >>AFTER<< 9/11. So your logic is 100% flawed. <<
Pretty weak reasoning for calling someone's logic "100% flawed". Kind of assumes that financial assets are accurately priced based upon available information. No lag effect eh? Then again, I've never really believed you anyway so maybe I'm biased.
Another article on the Dollar and Al Queda:
http://www.tanrange.com/s/ChairmansCorner.asp?ReportID=47268
Must read for those with an open mind.
>> unhedged players I found - GG and GLG <<
On a relative value basis KGC and WHT are both much cheaper than GG and GLG and both are essentially unhedged. WHT is entirely unhedged and once merged the new KGC is less than 10% to my knowledge. KGC is trading at a discount currently, but once the merger goes through I expect it to eventually trade to a premium similiar to other senior producers. KGC and WHT are my top two plays currently in the gold sector.
For some reason everyone always gravitates towards GG and GLG with little regard toward relative value. Of course if gold hits 400+ like I expect most relatively unhedged plays should do very well. That's why I like playing sectors.