[rocketman]

News Flash… China makes Ramen out of Dollar…

There are two dates I’ll always keep in mind: July 4th, 2006 which I believe was the piercing of the Housing Bubble, and today November 9th, 2006 – the day the China admits bailing out of the US Dollar:

NEW YORK (MarketWatch) — The dollar fell to a two-month low versus the euro and traded flat against the yen, sliding to session lows after China’s top central banker said the country is looking to diversify its foreign-exchange reserves.

The dollar turned sharply lower after Zhou Xiaochuan, governor of the People’s Bank of China, said at a conference in Frankfurt that China has very clear plans to diversify its reserves, which have exceeded $1 trillion early this week, and is considering lots of instruments, said Brian Dolan, director of research at Forex.com, a division of Gain Capital.

“The dollar [is] selling off across the board on the China comments,” he said. “Zhou’s comments driving the EUR higher and this has the potential to hurt the dollar significantly across the board.”

I admire Zeals prediction.

[rocketman]

By the way powayseller… you are getting a reputation out there, especially with Nouriel Roubini… Keep up the good work! I enjoy your comments.

[rocketman]

I am thinking of buying MERKX myself.

I just came across this fund and feel it’s a safe place to put any loose change into. It is a little hefty – $49.00 one time hit on entry via E-Trade. But after reading Zeals article I too am astonished about the dollar losing 33%. It’s to scary. I’m going for it. Especially since the dollar is trading under 85 today.

[rocketman]

This is RYVNX OTC

I guess the “Repurchase Agreement” is a their reference to a “put” option. It’s still is only 59.22% of their holdings. This is only one example of Ryder’s Inverse Fund portfolio, however I found it was indicative of all of them. Oh and I meant Freddie Mac not Mae – I apologize.

Top Holdings (6/30/06) (%)
Repurchase Agreement 34.92
Repurchase Agreement 12.85
Repurchase Agreement 11.45
Fed Home Loan Disc Note 9.45
Freddie Mac Disc Note 9.43
Freddie Mac Disc Note 4.66
Freddie Mac Disc Note 4.65
Freddie Mac Disc Note 4.63
Nasdaq 100 Future —
Total —

Asset Type (6/30/06) (%)
U.S. Cash 100.00
U.S. Total 100.00
Foreign Total

[rocketman]

ETF’s are really expensive.

I have been looking into both Rydex and ProFunds. Both ETF’s and funds. I also checked on where they were both actually invested. It appears, that Rydex, even though they say they are shorting the DOW are actuall shorting Fannie Mae and other financials – not the DOw 30 like they first intended.

ProFund UWPIX actually shorts the DOW 30 and others. It is a lot cheaper but expensive to buy into – $15,000 min. albeit, you get 750 shares @ 20.49. How far can it go? It’s been up to $68 in past performance.

I believe the DOW has further to drop than the Nasdaq – so I am looking to put more money into shorting the DOW than the Nasdaq. THe QQQQ has only moved 5 digits in the past year, so it might be a good short for a small move, but the DOW will have a bigger swing.

I notice the RYVNX OTC is up today. At 18 bucks, I’m thinking of buying it as well. Although, I’m not jumping in until closer to the election and see what the FED is up to today.

I think the DOW will be moving up or sideways unitl 11/6. George Bushed is out bragging about the economy along with his friends at FOX all this week and probably next.

[rocketman]

I checked out your Website and article. I’d like to know what you recommend for short(s) + stops if you don’t mind.

I did a hypothetical watchlist “short” trades with most of the homebuilders plus WAMU and LEND (100 shares each). I am actually in the red about $2,500 since I stared at the beginning of Septemnber. But these trades had no stops and are still going on.

I hope you’re right about this market trend. I missed a good entry point on the way up and I am looking to make it back up on the way down.

Thanks.

[rocketman]

Are you sure they weren’t just out for the hoildays?

It is Ramadan this month.

[rocketman]

Zeal Speculator thoughts.

PS – Adam has tossed us a few bones this week but tells us that the ZI is going to have a lot more trades since it only comes out once a month.

He likes Breakwater Resources in Toronto trading on the OT here in that States as BWLRF. Yesterday it was trading at .94.

He considers EGO Eldorado GoldCorp as the crem de la crem of gold stocks that is dirt cheap. Northagte Minerals NXG is also a big thumbs-up right now.

Zeal said that even though he really can’t call a bottom, some of these stocks have hit their 52 week low and should be consisdered for stradeling – keeping your trailing stop loose – and “slowly” accumulate rather than just jumping in with both feet. He does think we are going to see a turn soon. If you want more info on Breakwater, let me know.

Hope this helps. Gold was at $608.00 this morning.

[rocketman]

I was wondering what was going on with NEM myself. I found this article from NewsWatch today. It looks like they’re going to be having problems for awhile…

“NEW YORK (MarketWatch) — Newmont Mining Corp. Wednesday said it expects equity gold sales to temporarily decline before increasing once development projects in Nevada, Ghana and Australia reach full production rates in 2008 and 2009. Denver-based Newmont now expects equity gold sales of 5.6 million to 5.8 million ounces for 2006 and of 5.2 million to 5.6 million ounces for 2007. The company cited lost sales from the Zarafshan-Newmont joint venture and lower than expected production from the Yanacocha project in Peru for the decline. Newmont also said it expects costs related to sales for 2007 to rise between 20% and 25% from its anticipated 2006 level of between $290 and $310 per ounce. The company also said it expects to generate pre-tax gains of about $295 million from the sale of its Black Gold heavy oil property in Canada and the Martabe project in Indonesia. It expects the gains to be partially offset by a $94 million non-cash write-off of the Zarafshan-Newmont joint venture due to the Uzbek government’s expropriation of the company’s assets. The company also agreed to acquire a 40% interest in Shore Gold Inc.’s Fort a la Corne joint venture, located in Saskatchewan, Canada, for $153 million.”

Take a look at some of the other players like NXG, SA and EGO. They’re not having any problems and are making gains.

Zeal said to start accumulating.

[rocketman]

As far as the ER is concerned, my wife is an ER doctor in San Jose, CA. You’re right about immigrants coming in for treatment – however, they do get referred to the County for follow up treatment for free. They have to make an appointment and wait a few weeks to be seen. They are a bigger problem in some hospitals, but not all the hospitals.

The real problem is foreign people who are supposed to be temporarily working in the US, who are enrolled in an insurance plan, show up on a Sunday night, with a baby who has a rash, demand to be seen for a non-emergency, pay a $100 deductible co-pay, occupy a bed for a couple of hours, get tested for a number of things to verify it’s only a rash (which generally costs $5,000) and then sent home and told to follow up with their family doctor. The rash doesn’t go away in a couple of days, they don’t follow up with the family doctor because they don’t elect to have one, they go back to the emergency room, demand to be seen, the doctor orders $5,000 more tests, tells them everything is fine go home and make an appointment with their family doctor. The rash goes away the next day.

My wife tells me this is the equivalent of 80% of the people she sees in the emergency room. The other 20% are real life threatening cases. Oh, and there is a 2 hour waiting list, sometimes much longer.

The US health care is a complete disaster.

RE: Vancouver

Vancouver’s Recovery is actually due to the Japanese investing in RE there during the 90’s. Whistler/Blackcomb is Japan’s 2nd hottest winter destination. It is N. America’s number one ski resort according to the Snow Skiing Industry (not for total visitors). They [Japanese] did a fantastic job developing the area – it should be a model for every ski resort in the US.

[rocketman]

Congratulations Chris!

I read your blog every week since I came to know about it. I must say you’ve saved me more money than I can imagine since I am a novice trader and would have jumped in at the wrong times. I appreciate all your professional advice. I believe you have given me a lot of advice recently on ETF’s and stocks so I don’t know why anthraxvariety thinks you’re only about commodities.

I hope you will continue with your opinions and advice Chris.

Thanks,

-rocketman

[rocketman]

I believe going to a church, Buddhist temple, synagogue or where ever you meet people who are practicing the same things you believe is a wonderful place to be. I just came back from a Men’s retreat this weekend and had a fabulous time meeting other men. I made a few new acquaintances that I am sure will turn into friendships. There is nothing like going to a Christian church service or Zen practice session and knowing people there when you walk in.

I am sorry to hear of your divorce and cancer MyDog. By the Grace of God it sounds like you’ve been able to heal one problem and now starting to heal the other.

As a Christian who practices Zen, you are in the right place.

Oh, and by the way, if you want to meet a nice, loyal and beautiful woman, try getting involved with a non-denominational Christian church. I belong to a “Willow Creek Association Church” and absolutely love it. You will be surprised at how much the format has changed. Find one near you Willow Creek.

[rocketman]

Since the recent rally, I am thinking of jumping in and shorting the Dow and S&P500. I found two ETF’s to short:

DIA – Diamonds Trust Series 1 -DJA Index
IVV – iShares S&P 500 Index

I was going to sell short at market and do a bracket trade with trailing stop at $1.00 for upward movement and a price 10 pts below for a target price.

First, has anyone ever shorted these ETF’s?

Second, should I increase my trailing stop to say $2.00?

Third, do you think the recent rally will be the last
considering the Philly Fed report yesterday?

Thanks for your advice.

[rocketman]

I agree with Bugs. The psychology of watching and reading about mass foreclosures, mass bankruptcies and people losing their homes, will instill a general fear of property buying which has not been seen since the Great Depression.

[rocketman]

Thanks Asianautica,

I remember my Mother, who was raised during the depression, saying to me before I bought my first house “never pay more than 25% of your gross income for personal housing expenses, add a little extra to each payment and… never ever re-finance (unless you can drop your rate 2 points and shorten the lenght)”. I used this formula when I purchased my last three residences.

I believe we will be getting back to this formula before the next rise in housing begins either by Federal regulation or, hopefully, people more conscious of their financial future.

Remember: As much as it hurts, listen to your Mother.

[Author]

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