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mlsoft... I'm still digging, yes, very important-- could be the reason behind the strong move in the POG at Friday afternoon close.
Global crash fears as German bank sinks
Faisal Islam, economics correspondent and Will Hutton
Sunday October 6, 2002 -- The Observer
http://www.observer.co.uk/economy/story/0,1598,805683,00.html
Jim, an excerpt for which I think you'll find interesting from the Mogombo Guru:
Nobody held a gun to their heads and demanded that they buy houses so big that they cannot possibly afford them. There was no extortion involved in making them buy humongous SUV's, boats and vacation homes on credit.
They chose to ignore fifty years of the public schools turning out one generation of increasingly-semi-literate graduates after another, meaning all of us, each successive class more poorly educated than the one before. These "other guys," who we are all counting on to make the right decisions at the polls, and in their own lives, got dumber.
They took pains to secure Ritalin and a whole cornucopia of mind-and-mood-altering drugs for their children and themselves, and in a drug-induced haze that covered the nation from coast to coast, provided enthusiastic support for every non-sensical, New Age, feel-good, no-consequences, esteem building, dumbed-down, grade-inflated, re-distributionist, socialist, fascist and communist idiocy that was endorsed by a Hollywood actor or television talk-show personality, for God's sake.
http://www.dailyreckoning.com/
Global: Sinking
Stephen Roach (New York)
Suddenly, there’s a sinking feeling again. And it’s truly global in scope. From Asia, to Europe, to the United States, and to Latin America, the world economy seems to have lost any semblance of upward momentum. The case for a year-end acceleration appears to be in tatters. An engineless global economy is simply lacking in any real source of growth. It’s starting to feel like a global double dip.
America, of course, is to blame for all this. In a US-centric world, global economic growth draws its sustenance from the ups and downs of the US economy. At market exchange rates, the US has accounted for 64% of world GDP growth since 1995; on a purchasing power parity basis, that contribution is closer to 40%. No matter how you cut it, since 1995, the United States has accounted for twice as much world GDP growth as its share in the world economy might otherwise suggest. When America booms, the rest of the world goes along for the ride. When America sags, the rest of the world sinks like a stone. And that’s precisely what’s going on at this key juncture in the global business cycle. But the rest of the world certainly deserves its fair share of the blame. Lacking in autonomous domestic demand, the non-US world is beholden to the whims of the global trade cycle. And with the US the engine of global trade, America’s latest spate of growth problems has been magnified in the world at large.
Nor can there be any mistaking the recent deterioration in the near-term US growth outlook. While real GDP growth appears to have surged by around 4% in 3Q02, Dick Berner tells me that the economy is on a trajectory that may even fall short of the 1% growth threshold in the current period. If that’s the case, it would essentially replicate the saw-tooth results of the first two quarters of this year -- a 5% growth spurt in 1Q02 followed by an anemic 1.3% increase in the second period. The weakness in the current period is shaping up to be broadly based. What’s particularly intriguing this time is the likelihood of a marked deceleration in consumer demand. September’s weakness in vehicle sales, in conjunction with disappointing department and chain store purchases, puts consumption on a very weak trajectory entering the fourth quarter. Contrary to widespread expectations, the so-called refi cycle -- a record surge of home mortgage refinancing activity -- now seems to be having a limited impact on discretionary consumer buying. Maybe the profligate American consumer finally has all the cars, DVD players, and kitchen appliances that he or she will need for a long time. If that’s the case, a "saturation effect" could well crimp the refi impact on personal consumption. Who knows, maybe over-extended American consumers will use the windfall of reduced debt service to rebuild saving or even pay down debt. Stranger things have happened.
Not surprisingly, America’s travails have been magnified elsewhere in a US-centric world. That’s especially the case in Asia ex-Japan, a region that I have long felt was a levered play on US growth. The latest data confirm that the region’s export-led growth dynamic has taken a discernible turn for the worse. That’s particularly true in Korea, Malaysia, and Indonesia. Significantly, this compression in external demand growth first showed up in the July/August data, well ahead of the current strike-related disruption to America’s west-coast shipping ports. With the benefit of hindsight, it may well be that some pre-strike stocking of Asian-made products artificially boosted US and world GDP growth in the first three quarters of this year. To the extent that now gets unwound, the payback could well exacerbate the downside of Asian growth risks. The case of Korea is especially noteworthy. Of all the countries in Asia, Korea was the poster child for post-crisis reform. Yet, as Andy Xie has recently noted, chances are rising of yet another hard landing in Korea (see his dispatch, "Korea: Rising Risk of Hard Landing," corrected in today's Forum). At work are the excesses of the household debt cycle, a property bubble in Seoul, and a rapidly emerging export compression -- with Korean export growth just reported to have slowed from 18.9% in August to just 12.6% in September. With US-led external demand slowing, a bursting of the Korean credit bubble -- either spontaneous or policy-assisted -- can only raise the odds of a hard landing for one of Asia’s heretofore best-performing post-crisis economies.
US-induced aftershocks are also evident in most other regions of the world. Europe has, perhaps, felt the impacts most acutely. Almost entirely lacking in domestic demand support, slippage in external demand has already triggered near-double-dip conditions in the Euroland manufacturing sector. That’s the verdict that can be taken from the latest euro-zone Purchasing Managers’ Index, which fell back below the key "50" threshold in August. Japan’s recent shortfall in industrial production is also troublesome in that regard -- a 1.6% increase (the monthly rate) versus the 4.5% government forecast. With limited growth in domestic demand, it seems reasonable to conclude that Japan’s latest production shortfall was very much a by-product of US-led impairment of its export growth. Nor is Latin America in any shape to weather a global storm. Crises in Argentina and Brazil have spilled over to the Andean economies, and it’s only a matter of time before NAFTA linkages threaten much weaker economic growth in Mexico, in my view.
Maybe all this is just another one of those periodic bumps on the road to global recovery. But, then again, maybe not. Needless to say, I come down on the side that says this glass is half empty. The world economy is lacking a new growth dynamic and, as I see it, stands to have an exceedingly difficult time in getting restarted. Policy traction is more elusive than ever, especially for the once-proud US growth engine -- where pent-up demand for autos and housing has been spent and where deflationary risks are mounting. The numbers have turned nasty for a reason -- a US-centric global economy can only magnify a growth shortfall in the US. In that vein, I continue to fear that America’s double dip could well be the world’s double dip.
The main problem with this view is that it has now taken investors around the world by storm. As the resident bear, my telephone has been ringing off the hook. Clients are showing up without appointments. And incoming congratulatory emails have hit a new personal high. All this is what the indomitable Barton Biggs describes as an emotional capitulation (see his 30 September essay, "Markets, Mobs, and Mayhem"). Yet this shouldn’t be so surprising. After all, the dreams of recovery are now in the process of being shattered, and the angst of that realization is finally hitting home.
I do not doubt the intensity of the emotional reaction to this painful realization. The risk is that we confuse the emotional rhetoric with what the markets are actually discounting. And from where I sit, the so-called emotional capitulation is not in the price. For example, Steve Galbraith, our US equity strategist, points to quantitative work that suggests stocks are still discounting 2.6% y-o-y real GDP growth in 1Q03; while that’s well below the Blue Chip forecasting consensus (3.4%), it stops far short of factoring in a double dip. Similarly, while deflationary fears are rising, they are not in the price of the bond market. By my reckoning, the long end of the Treasury yield curve is still discounting 10 years of 1.5% inflation. While that’s certainly a subdued picture, it stops well short of the outright deflation I still fear (see my 2 October dispatch, "Don’t Give Up on Treasuries"). Consequently, while there has been undeniable capitulation in the marketplace for ideas, there has yet to be full-blown capitulation in the marketplace for assets. Until the latter occurs, it’s hard for me to believe that the worst is over in the markets.
http://www.morganstanley.com/GEFdata/digests/20021004-fri.html
Bob... I'm used to SI where it ALWAYS opens a new window when clicking an outside link-- as it should be. Anyway, I'm forever losing pages that are important to me that I have stashed away in the menu bar in favour of links that I've forgotten to "right click" (extra step).
-- Digging through the multitude of open IE windows just to find a story that just wipped out my real-time java ticker ain't my idea of productivity.
Stefan
The shorter you choose your time period the faster he's gonna react to price movements, but the more 'false'/'to early' signals he's gonna throw.
I've been looking for an answer for that. I mean, obviously, stock volatility is different for every stock. A MACD indicator set to 12-25-9 on a stock like Caterpillar might too vague and just right for a telcom stock. I've been playing with a 3-6-7 for the mining sector with some success-- but nothing is foolproof which is why I only "daytrade" a small portion of my portfolio.
I'm wondering if using a "beta" (as a measure of volatility) for the MACD adjustment would be the way to go?
Regards,
Michael
Silver Fundamentals or Funny Mentals?
by David Morgan -- October 2, 2002
http://www.financialsense.com/editorials/morgan100202.htm
...here's a highlight:
What is of particular interest to investors is the simple fact of how undervalued silver really is relative to anything else. As most who have read my work know, I focus a great deal upon real money vs. fictional money. In an earlier article it was mentioned that the Federal Reserve itself has indicated that the 1913 dollar is now worth 5 cents. To get a current “dollar” back to the 1913 equivalent we would have to use twenty of them. Expressed another way, (.05 x 20 = 1.00). This gave me an idea. Let us investigate how well gold and silver have kept up. In 1913 a twenty dollar gold piece was the coin of the realm. Taking our twenty times factor we see $20 x 20 = 400, so if we trust the FED gold would be worth $400. This is approximately true because a twenty dollar gold piece is not exactly a troy ounce, however the idea is sound. But now let us have a look at silver at $1.29 per ounce (1913 official price) x 20 = $25.80. Interesting gold today is near $320 and silver is around $4.50. We can see from this example that gold would have to increase by 25% to reach this theoretical price, but silver would have to increase by 550%.
Hi Chip... I'm just now working my way though "Chart School" and it certainly is extensive... nice site and thanks for answering my question.
Best Regards,
Michael
Marv... to make money in the markets you have to leave your emotions behind .... An opinion based on hope leads to a delusion, an opinion based on fact leads to a profitable trade.
For what it's worth, we're the many minds that make the market.
Best,
Matt... I remember awhile back you were saying you wanted IHub to be a coat & tie affair, so take it from me 'cause I know... play no favorites-- kill the posts and throw the boys in jail-- otherwise you'll be looking for a new board to post on yourself.
Regards,
Marv... as for contrarian indicators, how about me? I'm a regular poster on SI and I've been called that so many friggin times over the past three years I could just scream!
-
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This week for something new, (since I have been relentlessly playing the gold sector this past year) I decided to go long on a copper stock, copper futures looked to be in an accumulation phase, COT Report looked bullish and I felt there was very little downside in speculating on a stock that has a 5%+ dividend yield.
Now the stock has a 5-1/2%+ yield, and as of yesterday I'm stopped out.
So what have I learned?
1) Commodities that are used in commercial applications aren't in big demand-- copper, aluminium, nickel, zinc.
Business spending isn't happening, yet-- -- outta favour.
2) Commodities that are used at the consumer level are hot-- coffee, cocoa, wheat, gold...
So lemme ask you again, what part of this post can be used as a contrarian indicator?
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Advances and Declines for yesterday
-----------NYSE-------Nasdaq
Advances---820 (24%)---980 (29%)
Declines--2415 (71%)--2319 (70%)
Unchanged--154 (4%)-----11 (0%)
Here's another question; how many 90% down days have we had in the past three years compared to other bear markets? Two? Compared to more than a dozen from the 1970s?
Anyway, don't be so quick at labeling some of the best posters on SI contrarian indicators... if anything they've got something good if not profitable to say: #reply-18076758
Regards,
longdong_63 -- Jim Sinclair posted an observation I thought was pretty interesting:
---------------------------------------------------------------
RE: The 5th Element Shows Signs of Emergence
From: Jim Sinclair
Date: Friday, October 4, 2002
As you know from my various postings, I have been focused in on the US dollar and the US Treasury Bond Market, looking for any sign that non-US holders of US Treasury Securities were becoming concerned over their profits being eroded by lower dollar levels.
Well, today was the first sign of that possibility as the stock market declined significantly in the first five hours of trading. Surprisingly, when the market was off considerably and showing no sign of recovery, the long-term US Treasury Bond Market was also in a decline. This is the first break in the multi-year profile of this market, which has been rising in tandem with every significant stock market sell-off. Today, US Treasury bonds, rather than rising, were falling as the stock market marched towards a Dow at minus 300.
What makes me focus on this phenomena was that there are rumors that the Exchange Stabilization Fund entered into the US dollar Forex cash markets to support the dollar as the Dow went minus 200. I am therefore of the mind that this reaction from Washington was a reaction to the beginning of a liquidation of US Treasury Bonds by non-US holders. We shall see?
However, all efforts to stop a dollar decline here, except in the shortest-term, are a waste of time & money because of the concomitant events of US Budget Deficit - US Trade Deficit - US Current Account Deficit and the dollar reaction. The bonds did rally on the rally in the US dollar as did the stock market.
Regardless, today, Friday, October 4th, should be noted as the first time the bond market fell out of its inverse relationship with the stock market since March of 2000. That would be right on time, if I am to be correct in my assumption that the 5th Element necessary for the fundamental conclusion that we are in a long-term gold bull market was to fall into the equation, which is a top in the bond market before the end of November 2002. Of course, I put out an exploratory short again on the 30-year bond with a 32/32 stop loss.
http://www.financialsense.com/metals/sinclair/general/vip.htm#1004
Hi Augieboo... I went back and reread that post and methinks that last sentence was a little harsh, sheesh... Anyway, I noticed you have many threads, do you have one where I could ask some basic questions on T/A?
Thanks
No, it's not! The people that are still posting on a regular basis are survivors... Using these folks as a contrarian signal is downright stupid, jmho.
Zeev, yeah... about the so-called letter writers-- I agree. Even though my portfolio is weighted towards the natural resource sector-- it doesn't mean I'm in agreement with everything that's written at Gold-Eagle, nor am I in total agreement with books like "Hubbert's Peak." If a person were to read and/or watch every darned thing that's in the media you'd forget that we're here to trade stocks.
Regards,
What's the equivalent of a "Momentum 14" indicator from Big Charts?
Thanks in advance...
Bob... when someone posts a link within a message could you please set your programming so that it always opens a new window?
Hi Marcos... about thread the activity or the distinct lack of it; some people would say that's a good sign-- contrarian traders wouldn't want to be buying into a morass of activity.
I should post some of my mining related trades here, that in itself would create some activity... I like posting trades in realtime because I have a tendency of being more rational knowing that someone else is watching.
bot NRD #msg-513079
sold NRD #msg-523927
bot K #msg-523932
Regards,
Yikes... Ford going under? Sobering thoughts.
"In a bear market everyone loses, but the one who loses the least is the winner."
I mostly play the oilpatch with a new found love affair with mining stocks this past year, so yeah... I've done better than most of the crowd, but it ain't easy.
Anyway, thanks for posting, I'd a missed it otherwise.
deleted
Tim, my guess is that the markets are going to be rough until the Iraq issue is cleared up. Clarity... we want clarity, and until then, I sincerely doubt we'll see anything positive in the markets.
---
Despite the fact that there is 40% less drilling this year (over last) natural gas inventories are sitting at a 5-year high? Economic activity has certainly shrunk... despite that, the price of fuel isn't falling either .... So much for the deflation argument-- seems like anything you buy with credit is falling in price. Everything that falls into the necessity category is going up... insurance, gasoline, movie tickets and especially, groceries.
Regards,
...added Kinross Gold @ $3.19 (K-TSX)
JPM is continuing it's back flip, I'd be nuts not to be speculating on the yeller dawg. Let's not forget silver-- it has a 90% correlation with gold, and it hasn't recovered its loss ground from last summer.
...might be the real winner here in the short-term.
I'm cutting my losses... sold Noranda @ $14.28
ugly market, even uglier story:
----------------------------------------------
RESEARCH ALERT-Merrill cuts mining companies
Friday October 4, 11:58 am ET
NEW YORK, Oct 4 (Reuters) - Merrill Lynch on Friday downgraded its rating on shares of mining companies Phelps Dodge (NYSE:PD - News) and Noranda Inc. (Toronto:NRD.TO - News) to "sell" from "neutral," citing stalled metal prices.
Merrill also cut its 2002 and 2003 earnings estimates for the two firms, as well as other mining companies Inco Ltd. (Toronto:N.TO - News), Freeport-McMoRan Copper & Gold Inc. (NYSE:FCX - News), and Falconbridge Ltd. (Toronto:FL.TO - News)
In a report, Merrill said it had "revised lower its copper, lead, and zinc price forecasts, as well as ratings and EPS estimates for those companies impacted."
Noranda's 2002 loss estimate was widened to 20 Canadian cents per share from 15 Canadian cents per share. Profit forecasts for 2003 were cut to 20 Canadian cents per share from 55 Canadian cents per share.
Phelps Dodge's loss forecasts for 2002 were increased to $2.00 per share from $1.57 per share, while 2003 earnings estimates fell to 20 cents per share from $1.80 per share.
Earnings estimates for Freeport-McMoRan dropped to 85 cents per share from 95 cents per share for 2002. In 2003, Merrill expects the company to earn $1.10 per share versus a previous forecast of $1.50.
For Inco, earnings in 2002 are forecast to be about 85 cents per share compared with a prior view of 90 cents per share. 2003 estimates fell to $1.30 per share from $1.55 per share.
Earnings estimates on Falconbridge were cut to 45 Canadian cents per share from 55 Canadian cents per share. For 2003, estimates dropped to 80 Canadian cents per share from $1.08 Canadian cents per share.
http://biz.yahoo.com/rc/021004/minerals_phelps_research1_1.html
bonchance... if you're looking for a really cool discussion on T/A in regards to precious metals be sure to check out Jim Sinclair.
http://www.financialsense.com/metals/sinclair/general/QA.htm
You'll notice an index on the left hand side of the page where Sinclair spills the beans on his own techniques to play this sector.
Timeless Rules Of Investing
By Dr. Steve Sjuggerud
The 50 RULES:
1. An attempt at making a quick buck usually leads to losing much of that buck.
2. If stocks in general don't seem cheap, stand aside.
3. Buy and hold doesn't ALWAYS work.
4. Never throw good money after bad (don't buy more of a loser).
5. Cut your losers, and let your winners ride.
6. If the investment sounds too good to be true, it is.
7. Don't fight "the tape" (the trend.)
8. Don't fight the Fed (interest rates).
9. Most stocks that fall under $5 rarely see $10 again.
10. The best hot tip: there is no such thing as a hot tip.
11. Don't fall in love with your stock; it won't fall in love with you.
12. Don't have more than 3% AT RISK in any one position.
13. The trend is your friend until the end.
14. Trading options often leads to a quick trip to the poorhouse.
15. Bear-market rallies are often violent; giving the illusion the bull is back.
16. Low-priced stocks don't double any faster than high-priced ones.
17. Valuations don't matter in the short run.
18. When a stock hits a new high, it's not time to sell. Something is going right.
19. Have a rose garden portfolio (don't trim your roses while your weeds fester).
20. It takes courage to be a pig (don't settle for taking 10% profits).
21. Not selling a stock for a gain, simply because you're afraid of the taxes, is a bad idea.
22. Avoid limited upside, unlimited downside investments.
23. When all you're left with is hope, get out.
24. Don't keep losing money just to "prove you are right." Nobody cares.
25. Forecasts are useless.
26. Have patience and stick with your discipline.
27. When it's time to act, don't hesitate.
28. Expert investors care about risk, novice investors shop for returns.
29. Don't lose money.
30. You can learn more from your bad moves than your good.
31. A rising tide raises all ships, and vice versa, so assess the tide, not the ships.
32. Stocks fall more than you think and rise higher than you can possibly imagine.
33. Very few people have had great success short selling, even in bear markets.
34. You can't know everything about everything.
35. Since you can't know everything, seek out specialists who know their areas.
36. If a company's sales are shrinking, the business isn't growing anymore.
37. Real estate cycles are not the same as stock market cycles.
38. Investing in what's popular never ends up making you any money.
39. Know your investment edge, and don't stray too far from it.
40. Bear markets begin in good times. Bull markets begin in bad times.
41. Buy value - stocks that are priced less than their underlying assets are worth.
42. Neglected sectors often turn out to offer good values.
43. There's usually only one reason corporate insiders buy stock.
44. Don't miss a good one by being too concerned with the exact price you pay.
45. Avoid popular stocks, fad industries and new ventures.
46. Buy shares in businesses you understand.
47. Try to buy a stock when it has few friends.
48. Be patient: don't be rattled by fluctuations.
49. Mutual funds underperform the averages over the long run. Buy index funds instead.
50. If you don't understand the investment, don't invest.
Candente to Explore Hecla's Alto Dorado Gold Property, Northern Peru
DNT:TSX-V
VANCOUVER, Oct. 3 /PRNewswire-FirstCall/ - Candente Resource Corp. ("Candente") (TSX Venture:DNT - News) is pleased to announce that the company has entered into an Agreement with Hecla Mining Company regarding exploration, development and production on Hecla's Alto Dorado gold property in Northern Peru.
http://biz.yahoo.com/prnews/021003/va160_1.html
Stefan... for real-time I'm using etrade's markettrader-- it's about as real-time as your gonna get. As they keep updating and refining the software I'm hopeful I'll eventually see a real-time MACD with custom settings.
Until then, I'll just keep watching the tape.
Regards,
I'm not sure if you meant that as funny, friendly, intimidating or just plain SCARY!!! But that smilie face at the end of that post sent a shiver down my spine.
...ugh.
Oh gosh no! Your view matters a great deal. As for mlsoft? He pretty much discounted my infrastructure argument. Fwiw; Saudi Arabia is the only country with the extra spare capacity (swing producer?) to turn the taps on so-to-speak-- every one else is pretty much flat out. Despite the recessionary environment, world demand for oil, on average, and from the beginning of time, increases approximately one percent a year.
Year in, year out-- cyclical or no cyclical...
Anyway, back to lurking.
...differing views, yet we're investing in the same direction.
Thanks a bunch.
Augieboo... I'm not so sure there is a war premium anymore. Have you looked at the latest DOE stats? We're sitting at 275 million barrels of crude in inventories ... we've got about 60 days of inventories within the SPR and less than 20 within the refining complex... and I'm sure we've got countries out there hording oil as much as they were hording copper and nickel earlier this year.
This summers delivery to the Port of Houston by the Russians was more or less a gesture of goodwill ... fwiw, they're expecting to make regular deliveries within the next five years, no sooner due to the lack of infrastructure. (a deep shipping port and more refineries)
Anyway, I'm thinking there is a shortage until the U.S. puts a military base in Iraq (51th State?)
What did your chart say?
So Augieboo... what does this mean? In my own mind I see the war with Iraq the key to a lasting market rally because of the falling price of crude.
...this guy says it best:
Oil Market Says, "Don't Attack Iraq"
by Dr. Joe Duarte
http://www.financialsense.com/editorials/duarte/092602.htm
Does your chart jive with what's being said?
Apparently I'm part of the great unwashed that subscribes to the basic service, my reason for not venturing any further is because of the 20 minute quote delay that are on both the extra and the basic services. If the real-time option was available I'd be willing to fork up more money knowing that the MACD would be more meaningful on a non-delayed daily chart.
...but it's not.
Hi Jim... the tyrannical thumb of SI?
Have you seen the friggin' jailhouse?
http://www.investorshub.com/boards/board.asp?board_id=38
SI is a cakewalk compared to this.
lol! yup...
The biggest problem for me with the survey had to do with my networth. One, maybe it's too high and they think I'm a cheapskate for not paying them for the privilege of posting here and they ignore me. Two, maybe my networth isn't high enough, I’m then labeled a dumb-ass and they ignore me. Either way I lose.
Hi Bob... I think the X10 is a good idea too, especially if you're trying to catch a renter(s) who are repeatedly vandalizing the front lobby of a condominium complex.
...but the young teenage girl thing-- sick... totally sick.
Bob... about the survey, I didn't didn't fill it out because of the usual privacy concerns-- and about putting adds on the homepage, got no problem with it as long that its not the usual spy-camera/casino adds.
fwiw, car and motocycle adds are a pleasant distraction along with other sport related things like bicycles and golf clubs.
Another Letdown for Silver
http://www.thestreet.com/_yahoo/comment/futuresshocktsc/10045291.html
...and then there's always the recovering price of copper.
http://stockcharts.com/def/servlet/SC.web?c=$copper,uu[d,a]dacaynay[db][pb50!b200!d20,2!f][iub14!uk1...