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Daily Digger - Fryday Oct. 1, '04

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Ah yes, Thor has mastered day trading and I have yet to master swing trading - probably because I'm too busy to really study anything.


I appears to me that the more colors in a chart and it blows away the gif theory and my stocksharepublishing always gives me fits with this board. I probably should sit down and see if there is some other color background I can use to limit my editing and cropping time.

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OK, here's my first try using only a white background. Fingers crossed. CDE hits the high volume gap of 9,492,200 with 8,895,800 or 93.7%. Doesn't appear any real supply entered, but what we want is a lower volume pullback anyway.


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A RIO mention in Barron's this weekend. I bring it up because this is my largest position and one I feel has considerable growth prospects ahead....


Going to Rio


Pumping Iron Isn't Only the Province of Real Men



Preview | Follow-Up


WHAT'S BIG, BRAZILIAN and possibly undervalued? (Hint: It's not the Rain Forest.)


If you answered Companhia Vale do Rio Doce, aka CVRD, the world's biggest exporter of iron ore, you guessed right. Last week, its mucky-mucks descended on New York to tell its story to the uninformed, imparting a bit of information to reporters, and probably a good bit more to anal cysts.



Demand for iron ore is so strong that there's now a small spot market in it. -- Roger Agnelli, CVRD



The company, whose $26.1 billion of American depositary receipts trade on the New York Stock Exchange, apparently hasn't been schooled in the way things are done in the United States. (Reporters, for instance, weren't privy to what executives told the investment community.) The bottom line, however, is that Roger Agnelli, chief executive of CVRD, thinks sales, which are expected to exceed last year's $6.65 billion handily, will continue to bring steady growth for the next few years, and that the company should enjoy another record year in terms of earnings and cash flow. Agnelli said he expects return on invested capital for new projects to exceed 15%.


According to Steve McCarthy, a portfolio manager at State Street Global Advisors' $3 billion emerging-market fund, CVRD, at a recent price of $ 22.74, trades at 8.4 times next year's earnings. It has an earnings growth rate of 17%, and is trading at a 20% discount to its closest competitors, BHP Billiton and Rio Tinto. CVRD's Caemi unit trades at 7.4 times '05 earnings, with expected earnings growth of 25% next year.


CVRD owns high-quality assets, McCarthy says, and has a diversified export base. "It's a misconception that their fortunes are tied to China," he says. The company has long-term contracts in Europe, where its major exports are, and likely will get another price increase this year.


Demand for iron ore shows no signs of subsiding. Indeed, says Agnelli, the market is so tight for iron ore right now, with demand strong for next year and the year after, that a small spot market has sprung up for the mineral, something he says has never before existed.



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Copied this from another site. It is interesting. What do you all think?


The Fatman makes his call

(Roundman) Oct 03, 22:00



I believe that it is true that the boyz cannot take gold back below $400 - ever again. But, they have their ways you know. So the Fatman said to himself, "self, what is the gold cartel likely to do in the current situation?" Hmmmmmmmm, I think I'll study the charts and use conventional indicators within the context of my regression charts, which are not designed for short-term trading. But, my charts can (to the extent that they are correct) demonstrate the limits within which the cartel can operate. So without much further ado, I'll make my call.


Gold will rally to 433.74 and HUI will move up to 241 with no change in the HUI/Gold ratio on this move. Then the boyz will swing into action and take gold down to 409.99, the former resistance level of any significance. HUI will pull back to 212 with the HUI/Gold ratio bottoming at .51.


This is only a minor 6% percent correction in the gold price. But since the HUI is leveraged it will result in a 13% correction in the HUI from the top. This is enough to take out all stops set at 10% from the top. It will surely do a fair amount of damage to anyone on margin. What it the time frame for all of this to run its course? I'd say within the next 3 weeks.


So there you have it - the Fatman's call. Now I might be wrong, but at least I have made a call and that is something that no one else has done from what I have seen so far.


The Fatman.

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How about if gold takes out Fatman's 433.74 and then retests the creek in the 433 area..... 3 times and the bankers are out for good.


I think I just outdid Fatman's call to all goldbugs pleasure....

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I think I'm going to establish a portfolio of these four stocks that made new highs and see how they do in the next few months.



I might be missing some...

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I think I'm going to establish a portfolio of these four stocks that made new highs and see how they do in the next few months.


You mentioned those exact four stocks on the previous page...

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Sorry, haven't had so much time to come around of late as I've been keeping myself busy perfecting (so to speak) my day trading system. As those of you who have followed my meandering rants in the pants (I mean past) know, I work my magic on SMH and NEM. It suddenly occured to me to wonder, why? Out of all the stocks in the US why these two. Damn good question I said to myself and I set about to answer it. So what do I need in a stock? Well volume of course and a convenient price and a good daily range. So I put these criteria into a scan with 5 million volume, 90+ cent range and a price between 20 and 50 dollars and I got back 17 results. These included:


7 semiconductors:










4 Internuts:







1 Data Storage:




1 Medical Equipment:




1 Biodrech:




1 Notworking:




1 Defense:




and one PMS:




So that's why I guess. Why I trade NEM and SMH. But I only wish I could be sure these 2 are the best of the bunch without 100s of hours of diligent backtesting. TASR, for instance, is really at the top of the list, but it may just be a flash in the pan. Maybe not worth long-term consideration. The others have more history.


Anyway, I now have absolutely no insights on where anything is going. I've become totally myopic and am always in cash by day's end. I now believe, (for me anyway) the way to riches (or at least a comfortable living) is this day in day out methodology with its proven and probable returns. So, not much point in me commenting on direction 'cause I ain't got a clue. AND I don't actually WANT to know because it doesn't really help me.

Thanks Thor. Appreciate the insights offered. Very helpful.

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