Stock Market Oct 6 - Oct 10

[Depleted]

Looks like more death and destruction tomorrow,....
Asian markets are getting hammered...again...

Asia/Pacific

INDEX                        VALUE     CHANGE     %CHANGE     TIME
NIKKEI 225              9,640.37   -515.53       -5.08%       00:16
HANG SENG INDEX  15,881.14   -922.62      -5.49%       00:21
S&P/ASX 200 INDEX 4,417.10   -201.60       -4.36%       00:36
 
 

[davidslane]

If no US rate cut (like 100 basis points), then tomorrow will be a free fall.

I have no choice but to start massive liquidations to get off my remaining margin.

I don't think I can wait much longer.


First to go will be major oil/gas, then uranium.  I'll be holding my gold and silver miners until last.




BTW: to explain the commodity carnage, you have to remember that every hedge fund and their mother bought into energy and commodities.  Now everyone is taking their money out and with the new quarter upon us, it is redemption city.  Sell at any price which causes a viscious circle of margin calls and liquidations at any price.

When will it stop, nobody knows!

[jjj000]

Here is an update on my hedged option play on Morgan Stanley, for anyone interested in the outcome.  This is another good example of how hedging can protect one from one's own stupidity

So here is what I did - I decided to make a bet, oh a couple weeks ago, that Morgan Stanley was going to go up (V-wedge) after they took a particular beating one day.

So I bought some call options.

Obviously, I was wrong.  Bad timing.  I am now down 45% on that trade.  Joy.

However, I realized at the time that I am an idiot... so I hedged that trade with some puts on UYG!!  Figuring if Morgan Stanley went down, so would UYG.

Well I got that part right, and I am up 55% on that hedge play (albeit on a smaller investment).

I also hedged that hedge with some puts on SKF... just in case something funny happened specific to Morgan Stanley that made it drop apart from the rest of the financials sector.  Which was not the case, but whatever.  I am about even on the SKF puts (actually up 1 or 2%).

So in total, on all funds in that hedge play combined, I am up just under 5% on the strategy.

Not bad for getting it --completely-- wrong   If I had gotten it completely right, I would have been up probably 200-300% overall.

Limited risk, high reward, and protection from my own stupidity.  That's what I'm going for.

I will be getting out of this trade before the short restriction expires on Thursday

[Uboat]

russia is in critical condition. Their market has lost something like 70% in a couple of weeks. They have been severely weakened by the precipitous drop in oil--a price that the us govt has some control over. It's economic warfare. It beat down russia in a way that otherwise would have taken a full scale war.

Let’s not forget, it also beat down all our commodity investments, it also beat down energy and commodity companies in the US and in politically friendly countries such as Canada, Australia, Brazil etc.

I think at this stage the US is more preoccupied with internal economic warfare and heavily dependent on foreign funds and investments.

[Uboat]

If no US rate cut (like 100 basis points), then tomorrow will be a free fall.

Quite possible!
Japan’s Nikkei stock index plunged 9.4% to a five-year low.

[jjj000]

russia is in critical condition. Their market has lost something like 70% in a couple of weeks. They have been severely weakened by the precipitous drop in oil--a price that the us govt has some control over. It's economic warfare. It beat down russia in a way that otherwise would have taken a full scale war.

Rich... you make a great point... I have no problem believing that may very well be what is happening.  It may very well be a co-ordinated rich-get-richer/poor-get-poorer scenario unfolding on a global scale.  Would not surprise me, if it weren't for it being such a brilliant move

It would certainly be a great way to set up a new nuclear cartel to dominate energy policy over the coming decades.  Bankrupt the oil-producing countries, and then lock them out of the new club...

[Depleted]

Global Coordinated Rate Cut...The Fed cuts by 0.5%...

http://www.bloomberg.com/markets/stocks/wei.html

The comentary is already on this thing, as they say this card is being played over and over, and will only help short term (a few days, maybe)..yikes!
I guess sooner or later, people will decide that life will go on, hopefully sooner than later...

Dow futures at +212....The open should be explosive, but the real deal will be, the DOW later today...hmmm. I think it will still sink.
...d

jjj000 - I am trying to learn and understand your testing with your sample.
thanks for the information, and the insight....

[MetalMeister]

one Hemingway.  http://www.youtube.com/watch?v=_XgkeTanCGI

Very true . but move soon. The restrictions on travel in and out of the US could curtail your choice in an absolute way if things continue the way they are. Maybe Jim Dines " The end of the age of travel" will play out.

I have to referance the brave people of Thailand who are losing thier lives as we speak fighting against a corrupt, entrenched corporate government. Where are our champions? Are we as smart as brave or as determined to defend our democracy as the Thai. Where are our Hemingways who have left thier homes to fight for liberty?

This economic downturn is no accident.

[Depleted]

Woa!...Dow Futures -291 just before the open...thats -500 point spread.
Gonna run out of blood soon...too much bleeding. ere we goooooooooooo......
aaaahhhhhhhhhhhhhhh..............................................................................

[john77]

This report sounds balanced, unfortunately.

Oct. 8 (Bloomberg) -- JPMorgan Chase & Co. cut its forecast for uranium prices through 2010 because of increased spot-market sales of the radioactive metal in September and the potential for the credit freeze to slow nuclear power project development.

Spot prices may average $65.98 a pound this year, down from an earlier forecast of $69.62, JPMorgan said in a report. It cut its 2009 forecast by 14 percent to $64.75 and the 2010 estimate by 4.7 percent to $71.50. Paladin Energy Ltd. and Energy Resources of Australia Ltd. shares slumped in Sydney after JPMorgan lowered earnings estimates for the uranium producers.

Uranium-oxide spot prices, which reached a record $138 a pound in June last year, dropped $4 to $49 in the week ended Oct. 6, The Ux Consulting Co. LLC said on its Web site. The ``extraordinary'' amount of uranium sold in September by financial and hedge funds means utilities may now be well- supplied and the pick-up in sales typical of October-November may not occur, JPMorgan said.

``Driven by the fall-out of the credit crisis, and what we see as liquidation of spot uranium positions, we have reduced our uranium price forecasts,'' JPMorgan said in the report.

Paladin dropped 58 cents, or 18 percent, to A$2.70 in Sydney trading, while Darwin-based Energy Resources lost 4.6 percent to A$13.70.

JPMorgan cut estimated profit for Perth-based Paladin, which produces uranium in Namibia, by between 17 percent and 19 percent through to the 2010 financial year and trimmed its target price for the shares to A$6.70 from A$7.00.

Nuclear Renaissance

JPMorgan pared projected earnings for Rio Tinto Group- controlled Energy Resources by as much as 4.1 percent over the next two years and lowered its share-price target to A$21.80 from A$22.00.

High up-front capital costs for nuclear power projects may slow the so-called nuclear renaissance, the securities firm said. Nuclear power stations can cost between $1,400 and $3,500 per kilowatt-hour of installed capacity, it said.

Prices may get some support because uranium mine developments may also be deferred as emerging project developers experience increasing difficulty in raising capital, reducing supply, it said.

JPMorgan left its long-term uranium price forecast unchanged at $65 a pound.

[davidslane]

I sold my BHP, APA and ESV.

On the chopping block next is: TAN, RIO, NOV, CHK and KWK.
I'm waiting to see if today is the final down day.
There's an interesting battle for the soul of the markets going on right now.

I drop these others soon.


Just don't want to sell my small uraniums at these distressed prices before a Oct/Nov rally.


I'm keeping my golds and silvers (both big and small) for now.


So much for thinking the coordinated global rate cuts would be a pancea.

[dananini]

A week ago I posed the question of why u producers will not cut output amidst the collapsing spot and term prices, as do other energy suppliers.The link below describes world steel makers pondering the same issue. Would the temporary halt of cash flow wipe any of them out? Is this an insane proposal? Please, is there a concrete reason for not cutting? I will appreciate any knowledgeable replies.Just don't knock my stupidity please.

http://online.wsj.com/article/SB122340881139212291.html

[Bottomfeeder]

Dananinni...not a stupid question at all.

I mentioned in a post a month or two ago that I thought that producers (of any kind) would be hit the hardest in this situation-credit crisis, as producers need more capital to keep projects going, and near term guys need even more capital for start up.  Explorers? They just need to keep builiding 43-101's, punching holes in the ground.

The results I read a few days ago had U producers down 27% vs. explorers down about 14%.  Those numbers have gotten worse since, although going down too fast to calculate.

To answer your question though, it is probably a situation that is company by company.   Iam sure it is expensive to shut down or slow down, when you have debt to service, and alot of these companies have contracts for fulfillment which insulates them from volitility.  Not like going to the gas station and filling up the tank and hoping that they have some.

Those who are cashed up and like the long term fundamentals I am sure would hold material from the open market for sunnier days ahead, as I am sure it is an asset that can be leveraged for more dollars if needed.

The U's look a little different to me than steel in that respect.  But hey look at silver 12 an ounce with a 20 cost to finish it?  Thats been going on for a while.  I am licking my chops to buy some U producers Paladin and Dennison at these levels, but they just wont stop falling for me to do it!

Good question Dan....

[Bottomfeeder]

This sure looks like capitulation to me.  DNN down another 9% on 2M shares, and PDN down another 21% on 2M shares.

[davidslane]

Not sure if anybody posted this CNBC segment.
Worth 2 minutes of your time.


Gold Prices May Spike

Within the gold complex, there is a disparity between the paper market and the physical market, notes Jurg Kiener, CEO of Swiss Asia Capital. He tells CNBC's Maura Fogarty & Rebecca Meehan that if the paper market collapses, gold prices may double very quickly.


http://www.cnbc.com//id/15840232?video=880574352&play=1




I'm going out on a limb to say that the crash is over and we are now back to a 3 month rally mode (at least into mid November).  We must close strong though.