Show-off...:).

Opened SLB at 48.06

SLB, it's not often an equity will breach the top BB on one day and the bottom the next.

http://stockcharts.com/def/servlet/SC.web?c=SLB,uu[e,a]daoayyay[db][pd20,2][vc60]&pref=G

More analysis regarding the bond market.

Here are two charts of the 30 year bond. The first is a standard chart of the 30 yr. bond which indicates we're in a mature consolidation period. This after the interest rate run-up following the rate bottom in June, (THE peak in the US bond market after 22 years!).

If you consider the second chart, remembering that about 45% of bond / stock investors live outside the US, you'll notice that the consolidation period ended in early October and a new post peak low has been put in place, (higher rates = lower value in the world of bonds). This new low was caused more by a weak US$ than weakness in the bond market itself but the effect is the same.

Also, the recent downturn in the stockmarket coincides with the new low in the bond market from a non US perspective. These could simply be coincident actions but it's worth following.

30 year bond
http://stockcharts.com/def/servlet/SC.web?c=$TYX,uu[e,a]daoayyay[dc][pd20,2][vc60][J19421966,Y]&a...

30 year bond related to the US$
http://stockcharts.com/def/servlet/SC.web?c=$tyx:$usd,uu[e,a]daoayyay[dc][pd20,2][vc60][j19136277...

Yes, looks like a lower open today but gold is again up $3.00.

Thanks Mike.

Here's another look at the Biotech group. Not much happening here but a good set-up for short term traders.

http://stockcharts.com/def/servlet/SC.web?c=$BTK,uu[e,a]daoayyay[dc][pd20,2!b50!b200][vc60][iuyb20,2...

And what kept you from buying this one as it moved down? Dell seems to have all the earmarkes of a perfect "Nick" equity.

Nick, I see you made Michael pay you back...:)..did you have other positions in Dell that you exited prior to this one?

Gold December contract up another $3.00 to $382.00. If this holds the direction for gold will be much more clear. As I've said before, there are so many people expecting gold to move over $400 that it will be a self fulfilling prophecy.

Longer term chart attached with new analysis.

http://stockcharts.com/def/servlet/SC.web?c=$gold,uu[r,a]daoayyay[dd][pb50!d20,2][vc60][iuyb20,2.0][...

Gold December contract is at $379, up about $4.50. The wild swings continue but the downward move a couple of days ago is looking more like a head fake.

If we think that - marketwise - we’re in good shape over the last year, NT is a good counter example of our situation. A stock that has moved up 1000% over the last year but is still down 95% from the peak. Take a minute and work through the implications of this ratio. How is it possible for a company that is the premier business representative of its country to present this sort of investment proposition? My conclusion is that we’re at, (or approaching), a serious crossroads in the western world. Are we 20X below value or 10X above? Most of our children shall have a deep understanding of the answer.

I can't disagree with you Mike, the market has an upward bias. My Q puts are dead but several trading positions in metals are moving ahead with regularity. "The trend is your friend until the end". I should have lost money in the metals trades and looked like a genius with the Q puts. I really dislike this market as it’s transitioning in too many ways to follow with clear logic.

A couple of other points:

I’d recommended the Japanese Yen about 2 months ago. It’s up about 6% since then. I still expect another 10-15% over the next year or so. The Yen is currently working off some of the recent move but should resume its move upward in next few weeks - $XJY on stockcharts. Ten or twenty years from now we’ll wish we’d been savers when our Waterloo becomes clear.

The US$ is still much more weak then I’d anticipated. I’ve now predicted 2 bounces in the last couple of years that have not materialized. Chart attached - I'm still hopeful but it doesn't look good today. Disclaimer: I hope for rebounds but my investments are leveraged for a very weak dollar.

http://stockcharts.com/def/servlet/SC.web?c=$USD,uu[w,a]daoayyay[dd][pb50!d20,2][vc60][iuyb20,2.0][J...

I’m still planning to begin my move out of metals stocks when the big US markets start moving down. While it’s not completely clear where I’ll move, there should be a good opportunity to invest in Japan over the next year or so.

Here's the short term chart I posted mid-week last week. It's amazing how the end point of a consolidation period will be coincident with a big swing in the trading range. Especially for a volatile market.

I'm not sure the conclusion was clear however as the recovery was almost complete. We'll have to give the market a few more days to see how it reacts.

http://stockcharts.com/def/servlet/SC.web?c=$GOLD,uu[h,a]daoayyay[da][pb50!d20,2][vc60][iuyb20,2.0][...

Don't worry Court, as the US$ falls and the Canadian dollar rebounds over the next few years, the drug companies will get their way by default...:).

As if Snow has any control over this. The Fed has little to no control over note and bond rates and Snow has even less control. He must be counting on a GIANT recovery in the economy so that overnight rates can be raised and the fall of the US$ can be controlled.

On a related note, if anyone here is not a regular reader of John Mauldin, I would encourage you to read his notes this last weekend on the Eurodollar trade and FNM/FRE.

http://www.frontlinethoughts.com/printarticle.asp?id=mwo101703

Thanks Gus. This unwinding of our current account deficit will require an average American family to save 10% more of their income than they do today...that should make for an interesting decade.

I posted this chart not long ago and it looks like the CRB is already breaking out.

http://stockcharts.com/def/servlet/SC.web?c=$CRB,uu[w,a]daoayyay[de][pb50!d20,2][vc60][iuyb20,2.0][J...

Russia may price oil in Euros...

http://www.rense.com/general42/priceoi.htm

As you know, I'm concerned that there will come a time in the near future, (6-18 months), that foreign investors will simply jump ship because they are being harmed by a combination of rising interest rates and a falling dollar, (the worst of both worlds).

I've attached a newly developed chart here that helps me understand; 1) Why foreign investors have been so loyal, 2) Why the weak US$ has not yet caused a migration away from US bonds and 3) What we are probably faced with today.

Detail on the above:
1 - During the period 1997 to Oct 2001 foreign investors did very well as interest rates and US$ strength worked in their favor giving them a supercharged rate of return on the safest investment in the world. BTW, this trend goes back much, much further than 1997 but I've not had time to review those periods.
2 - From November of 2001 to June of this year the US$ has been falling at about the same rate as interest rates so as a foreign investor you are not harmed. The US$ you're repaid in is worth less than it was at the beginning but your bonds are worth more because interest rates also fell during the same period.
3 - Since June of this year, the US$ is about unchanged but interest rates have moved up. If the dollar starts to fall anew, interest rates will likely begin to move up further and the supercharging effect will work in reverse resulting in a net loss. If this occurs, the rate of rising rates and the rate of the falling US$ may increase and result in a true currency crisis.

There's more explanitory notes on the chart, mostly to aid my own understanding but some of you might find them interesting.

http://stockcharts.com/def/servlet/SC.web?c=$TYX:$USD,uu[r,a]waoayyay[d19970301,20031016][p][vc60]<>

Court, this is one of the reasons I expect a near term bounce in the US$. Euro folks are getting a little sensitive to the swing up from 80. The attached chart shows the Euro to currently be in a channel as it's exhibited a double top.

http://stockcharts.com/def/servlet/SC.web?c=$xeu,uu[w,a]daoayyay[dd][pb50!d20,2][vc60][iuyb20,2.0][J...

Chart of gold. Decision time is upon us. We'll get a better understanding of gold's near term direction over the next 2-3 trading days.

http://stockcharts.com/def/servlet/SC.web?c=$gold,uu[h,a]daoayyay[da][pb50!d20,2][vc60][iuyb20,2.0][...

Or do business in Euros...:).

Dorothy, we're not in Kansas any more...

Manhattan apartments average 1300 sq. ft. and over $900,000. Cardboard boxes, (with a doorway), can still be had for under a $100,000.

http://money.cnn.com/2003/10/15/news/economy/realestate_newyork/index.htm?cnn-yes

As you know Court, I think the key is US$ strength, (or lack of same). The dollar is in a very precarious position this week. If it fails to bounce off the 92 area and move up it will likely slide into the 80s which may finally bring an unwanted wakeup call. Even I'm surprised by the current weakness.

There is a gap from Sept 19-22 in the ~94.5 area. With any luck this gap will fill before the dollar again begins its descent. There will likely be Fed intervention along the path downward as it will become more and more difficult to hide the inflation inherent in a deflating currency. And, as you mentioned, one of the things that inflate is interest rates.

GM is a money making bank and a money losing mfg. Without GMAC they lost 205M this quarter.

"Budget surpluses for as far as the eye can see"

158B deficit in 2002
374B deficit in 2003
480B deficit projected for 2004, (+87B one would suppose).

Hence the term, the blind leading the blind.

One more note regarding the chart. The market bottom was clearly in March, not October, so important support will come in the area of the March low. This low will be re-tested by a combination of US$ and market weakness. I expect wholesale selling of US equities and bonds if this area is breached. There should also be massive intervention by the Fed.

The attached chart is of the S&P from a Euro investors perspective. I follow this chart more closely than I do the S&P from a standard US$ perspective. As you review the chart you'll notice that it makes a very clear statement about market direction.

The corrolation between this chart and standard technical turning points is profound. While we may still believe that our currency is the world standard, investors outside the US apparently disagree and now have the voting power to control turning points in our markets.

My perspective on this chart is that we'll again test resistance in the 9.5 range on the chart. This would require extremely good movements upward by the S&P or it will require the US$ to bounce, or a combination of the two. If we extrapolate from the chart it appears this retest will come in December or January. From there, the market will likely trace down in both real and relative terms.

http://stockcharts.com/def/servlet/SC.web?c=$spx:$xeu,uu[r,a]daolynay[d20020701,20031012][pb50][J...

I think any bounce we're seeing is a mirage created by a falling US$. I'll post a chart of the S&P that I find much more useful than the standard S&P chart and try to explain my reasoning.

Gus, mark this site. It will give you open interest positions in most areas of investing. Positions are separated by type of investor. For a fee you can get current week's changes and history if you don't want to keep a spreadsheet.

http://www.commitmentsoftraders.com/cotp1.htm

Attached is an API story confirming a rise in inventories. This is the reason that OPEC cut back. We should see lower gasoline prices in the next 6-8 weeks. Is it OPEC or Arnold? Also, the XOI bounced down off resistance.

API data confirms big rise in crude stocks by Myra P. Saefong
SAN FRANCISCO (CBS.MW) -- The American Petroleum Institute said crude inventories for the week ended Oct. 3 rose by 8.2 million barrels to total 290.2 million. Gasoline stocks fell by 3.3 million to 196.8 million barrels. Distillate inventories stood at 127.1 million barrels, up 537,000 barrels for the latest week.

Hi Elena...thanks for the Gann update. If the market continues up sharply until then it could indeed be an important turning point. Hope to see you back on-line soon. BTW, I'm changing jobs, I'll give you details via email.

Yes, but where are we in the Gann cycle? That could make this a most interesting day.

If it's like the Prius they will offer a 100,000 mile guarantee on any of the 'special' parts. Toyota is doing this to ensure people are comfortable moving to alternative fuel.

Court, be careful with gold next year. The price movements have become quite speculative in nature. The drop the other day to $370 is not atypical of metals. As I've said before, I'll be easing away from this sector by the end of the year. I really think there will be a big run up / blow-off where gold moves through $400 and you report that it's the lead article in the Money section of USA Today. That will be a good day to begin moving out to cash.

That said, gold is back to $376 this morning.

I'm trying to get information on the cost, but not more than a couple thousand over standard version. Payback takes about 30,000 miles at $2.00 a gallon. More importantly, we'll be cutting our use of gasoline by 60%.

The Saudi's will continue to be good partners. We let them run a fascist governement and sponsor world terrorism and they keep taking our worth less and less dollars. We should be ashamed but of course we're not.

That's a good one. It would be much funnier if it wasn't so sadly mistaken. Our $$ will buy about 15% less next year than it does this year which will help push the cost of all basic materials up in US$ terms. Estimates are up to $600B short in exports next year. With the 1/2T in deficit we'll generate next year we can kiss another trillion goodbye. But at 2% interest that's only about a buck a week per American, (we surely don't have to pay it back do we?!?!).

Just for fun, an updated chart of the CRB.

http://stockcharts.com/def/servlet/SC.web?c=$crb,uu[w,a]daoayyay[de][pb50!d20,2][vc60][iuyb20,2.0][J...

My views on oil are constrained to the next 6 months or so. As I look at this from a longer perspective, oil is going to get gastly expensive. You may remember that most of my research and investing was in the area of oil and energy 3 years ago. Once the market finds another strong leg down, I'll be very interested in it again.

On a related note, we will likely be one of the first owners of the new gasoline-electric Toyota Highlander when it comes out in 2005. I'm currently bothering folks at Toyota corporate to get as much pre-release information as possible. The word on the street is that it will average 40mpg. Not bad for a SUV.