Tuesday, November 6, 2007


Quite a lot of recent market action is just beefer ping pong aka elephants stomping at the water hole. But some signs of real buying and selling do exist.

1. Clearly real sellers are moving out of the big banks. I suspect that growth & income funds are scared and selling a good bit to shift into other dividend payers like utilities. I also suspect that beefer shorts are magnifying this move. Notice the strength in the Dow Utilities index.

2. The weakness in the Russell over the past four week indicates that beefers are bailing out of that sector as a potential savior for their year end fees. The Russell is a favorite playground for them.

3. The strength in the Nazz 100 whilst all the turmoil has been occurring shows real buyers there, too. Big cap tech sells big money over seas, so perhaps that's the source of the real buyers, there: exports growth. But I suspect some amplification by beefers there, too.

4. The Dow transportation index has been roughly flat for weeks. If a recession was being forecast by major players, one would think that would be going down. It's not.

Interestingly, I heard a French analyst on Babblevision early who said the Euro was overvalued by 50%. Yes, 50%. He thought parity was fair value. I think the Euro strength is due to Persian Gulf money and Russian money who spend lots in Europe. Also, some of those have reasons to avoid the US$ and its banking system, viz. terrorist and organized crime connections.

Gold is about $820 as I write and oil is around $95.50. The all-time high for gold is around $850 for a closing price, but I think the intraday high was closer to $900. I'll do more research as it is getting closer.

The economic trajectory is strong and continuing onward. So it's a bull market, despite all the froth. Over time this fear should dissipate and the up trend continue.

I have sheep herding today so will be out from about 8AM EST thru 1PM EST.

PS: Back. Oil $97. Gold $825.

PPS: Sheesh. Gasparino says Dick Grass's favorite movie was Borat. That movie sucked - I turned it off after about 30 minutes.

P^3S: The S&P cash is looking like a W bottom pattern is forming. Cracking 1520 and holding two days would set it up. There must be a lot of beefer shorts out there - they could get hurt.


Bunkerman said...

I just saw december silver at $15.02

Bunkerman said...

sheeh Goldman reads this blog, too. They just put a target price for ORCL at $27, which I posted a while ago before last Q earnings.

Cramer, Goldman, what next ? Ben ? Hmm maybe he already does.

W ? Nahh. He might not be able to read ;-)

Frosty said...

Bunkerman...check out that eruomern etf EWU and yesterdays volume...beefers are moving out, looking like a decent darksider.

Frosty said...

Bunkerman...this turkey market needs a good smack down and it sure feels like it is going to get one before we move it higher...real sellers.

Bunkerman said...

yes, EWU does look like a short.

Bunkerman said...

Back from sheep lessons .. More improvement - especially Krypto today.

Bunkerman said...

Elliot Wave woiuld agree, Frosty, that the S&P chart looks like it needs anther leg down.

But I wonder who is left to sell without news ?

Bunkerman said...

To clarify and connect to yesterday, this weakness/selling has had almost 4 weeks to run on the same news. So I wonder who is left to sell/reposition on that news.

Maybe one last gasp/push down is left by the bears, but not certain.

Frosty said...

Bunkerman...LEH rumored to be next to dump...the same news, but it is when they stop going down on the same news, we have yet to see that.

Bunkerman said...

With no uptick rule, beefers can knock them down on a rumor easily. Real buyers would pull all bids nowadays.

Bunkerman said...

I think the rumor mongers are sort of stupid. The Street really didn't hold a "lot" of that paper. They distributed it around the world to beefers, pension funds, insurance companies, managed accounts, on and on. Many of those entities don't report losses OR mark to market. They just hold the stuff until maturity.

Expecting the Street and big banks to show endless big losses is wrong. Sure they will have some, but not really as much as the bears are screaming.

Bunkerman said...

I do have a lot of experience in that, by the way. I used to create & sell secured & structured corporate debt in private placements.

Bunkerman said...

Gosh silver 15.39 cracked long term resistance. Let's see if it hold tomorrow - needs two days.

Bunkerman said...

S&P cash is starting to look like a "W" bottom. It needs to clear 1520 cash to set up the pattern, then get over 1550.