Monthly Digger - October 2005

[EasyAl]

Here is Louise Yamada's rants

 

The More Things Change, The More They Stay The Same.

In reflecting on the eight-month hiatus in our public communication, it is amazing how little, in principle, has altered from our 2005 outlook of the broad view. Only the daily noise of trading has presented challenges/rotations in that interim. But we may be approaching a precarious crossroad as the next step forward in the development of the broader picture over the years ahead. In the Broad Overview, the major structural reversals of the past five years remain strongly in place:

 

? The 18-year uptrend violations that occurred in 2000 for the Dow and S&P 500 are still in place. 

 

? The structural outperformance of small- and mid-cap stocks has been clearly visible, particularly with both the NYSE (comprised of over 80% small- and mid-cap names) and the S&P 500 (comprised of over 50% small- and mid-cap names) having attained new highs, versus the underperforming Dow Jones Industrial Average.

 

? The structural bull market for gold that initiated in 2001, with a higher low in price (then pushed through $300 and pierced a 22-year downtrend), has now completed a year of consolidation. The recent lift through $456 suggests clear sailing toward the next resistance, defined by the 1982 and 1987 peaks at $500. We believe gold may see much higher levels over the years ahead.  We then ask the question whether China will expend her excess dollars on gold, ultimately yielding a gold-backed Yuan decades forward, and leaving us with a debt burdened, fiat dollar?

 

? The new structural bull market for the CRB Index, identified in 2002-2003 with the reversal of a 22-year downtrend, has just exceeded its all-time high set in December 1980. The technical suggestion that a 25-year consolidation is left in the wake carries the implication of much higher levels over the decades ahead.

 

?Looking for inflation in all the wrong places? remains a strong hypothesis for us:

 

Remember that the CRB index composition today is only 18% industrial, but is 52% agricultural (with which one must focus on water, as agriculture utilizes 87% of the world?s fresh water supply), 18% gold, 18% energy.

 

...We continue to believe the equity market is undergoing a major shift of capitalization during which the financial weighting of the S&P 500 could diminish from its 20% level as the Materials, Energy and select Capital goods sectors expand their respective weightings from current low levels. Recognizing that Energy at its 1980 peak represented nearly 30% of the S&P 500, there is a tremendous growth potential from its current 10%, up from under 6% a year ago. The incremental weakness within the financial sub-industries suggests the next wave of their diminishing capitalization may be under way.?

Louise Yamada

Technical Perspectives

Louise Yamada Technical Research Advisors

Oct. 3, 2005

[EasyAl]

Old Habit Die Hard:

 

I have not seen your post for a while. Are you have a celebration party now. I would have said that you are laughing all your way to the bank if I had not know that you prefer hard currency to the fiat one.

[yellowfish]

thanks tfh!!!

not certain that the abc is over, however if this is the b then c should not go below the 107 and change in xau. watching a few issues that are negative or are flat eg gold, gss, bought grs.  would like to see the move broaden out.  added yesterday am  gg, grs, wtz and absent mindedly never bought tre. sinclairs personal involvement in this company. makes it quite attractive. dharma

<{POST_SNAPBACK}>

 

Thanks for all your great and timely input darma. You called yesterday perfectly.

 

Can/will you post a chart of what you look at on the intraday?

 

That goes for you too IAM - great buys yesterday!!!

[yellowfish]

I bought TRE late today and around noon added CDE March 06 calls.

 

Such a blood bath in Energy - I had to go for it, so I snatched up battered Energy calls at the open and thus I did not have enough cash to get all I wanted in this golden sector.

 

Thinking I can roll my energy calls sometime next week (October expry!) and hopefully catch a little dip or pause to buy in around the last high at 115 on XAU.

 

If we don't get it I may very well have to chase these miners.

 

The future sure looks golden here and on a Friday too, but I do respect Thor's warning. No such thing as 100% in the market. They will gut you like a fish out there and this fish has been gutted a lot. I say be long - but be nimble.

[I_Am_Madness]

The chalk is that since 500-505 is multi year resistance that there is no way we can go through it on the first try. Any one doubt that?

<{POST_SNAPBACK}>

 

Hmm....

What's that term they use?

 

"To get the answer, all you have to do is ask the question.."

[I_Am_Madness]

Oh baby!!! Oh so close!!!

[FeedFool]

Watch 14 and 26th of Oct. Also 480- 485 on gold

[Old Habits]

Old Habit Die Hard:

 

  I have not seen your post for a while.  Are you have a celebration party now.  I would have said that you are laughing all your way to the bank if I had not know that you prefer hard currency to the fiat one.

<{POST_SNAPBACK}>

 

 

Hi Easy Al

Been a very good couple of months. I'll celebrate in 06-07' with Dharma - although Sinclair thinks the run will stretch to 2012. It is very hairy because I'm all-in.

Like Dharma - I bought some issues yesterday on margin. SIL, WTZ and some more NEM. I have enuff small issues for now. Want safer stuff while on margin. I will likely offload the margin stuff in the next couple of weeks.

I hope everyone is doing well. Thanks for askin' Easy Al.

 

OH

[anjing bau]

little change in the COT data as of this past Tuesday.....have to wonder how the shorts felt on Thursday with the price squeezin' higher.

[traderfromhell]

little change in the COT data as of this past Tuesday.....have to wonder how the shorts felt on Thursday with the price squeezin' higher.

<{POST_SNAPBACK}>

 

Looks higher to me AB. Religious experience in the offing? This smells different this time dunno.

[ThorAss]

I bought TRE late today and around noon added CDE March 06 calls.

 

Such a blood bath in Energy - I had to go for it, so I snatched up battered Energy calls at the open and thus I did not have enough cash to get all I wanted in this golden sector.

 

Thinking  I can roll my energy calls sometime next week (October expry!) and hopefully catch a little dip or pause to buy in around the last high at 115 on XAU. 

 

If we don't get it I may very well have to chase these miners. 

 

The future sure looks golden here and on a Friday too, but I do respect Thor's warning.  No such thing as 100% in the market.  They will gut you like a fish out there and this fish has been gutted a lot. I say be long - but be nimble.

<{POST_SNAPBACK}>

 

I'm not sure which one of my innumerable warnings this refers to but I can't help but agree with you. Plus I DOUBT everything, even my own existence.

[ThorAss]

Hooey LT Timing Model: LONG

 

Well I'm back on the same page as my Timing Model (mostly) being 80-85%. The neckbreaker was another in a series of whopsaws to discard the weak. As with the 2 others the best strategy would have been to wait until the neck day after the break to sell a lower low. Since there haven't been any no selling would have occured. But the system is the system as much as I'd like it to be perfect, that is unattainable. I was looking at my 4StockModel (Swing trader) which now has 3 stocks, NEM,VLO and RIMM. Of the last 10 trades 9 have been losses with the median loss being over $500. The 1 gain was over $10,700. That's how it works. One doesn't even need 50:50 success (except in Who Wants To Be A Central Wanker?)

The HLTT Model sold the hooey at 231.5 and bought back in at 237.1 which cost it 5.6 valuable points. Thanks to the ugly candle (mid-Sept) I sold at near 239 and bought back (mostly) at around 237. Basically we've gone nowhere since mid-September. Although I feel LONG is the right side at the moment and I can't help but see all of this action as a possible topping pattern. But it ain's till it is.

 

Keep it here and keep it real.

[hedonicprocto]

Bearvest:

are not ending diagonal triangles like you have drawn supposed to be rare and very bearish?

HUI looks like the same pattern.

 

 

 

Thanks

 

XAU:

 

As expected, 107 held.

 

This rally should peter out at 116 in red wave 5 which will be black (3) and a larger correction should ensue--the black wave (4).

 

The final run for the roses in black wave (5) should travel 16.87 points above the low point of black (4), where 5=1.

<{POST_SNAPBACK}>

[traderfromhell]

Hooey LT Timing Model: LONG

 

Well I'm back on the same page as my Timing Model (mostly) being 80-85%. The neckbreaker was another in a series of whopsaws to discard the weak. As with the 2 others the best strategy would have been to wait until the neck day after the break to sell a lower low. Since there haven't been any no selling would have occured. But the system is the system as much as I'd like it to be perfect, that is unattainable. I was looking at my 4StockModel (Swing trader) which now has 3 stocks, NEM,VLO and RIMM. Of the last 10 trades 9 have been losses with the median loss being over $500. The 1 gain was over $10,700. That's how it works.  One doesn't even need 50:50 success (except in Who Wants To Be A Central Wanker?) 

The HLTT Model sold the hooey at 231.5 and bought back in at 237.1 which cost it 5.6 valuable points. Thanks to the ugly candle (mid-Sept) I sold at near 239 and bought back (mostly) at around 237. Basically we've gone nowhere since mid-September. Although I feel LONG is the right side at the moment and I can't help but see all of this action as a possible topping pattern. But it ain's till it is.

 

Keep it here and keep it real.

<{POST_SNAPBACK}>

 

High level consolidation and then launch. I can't be bearish here. Gold has held above the breakout of 456 and has issued a double top breakout today on the point and figure chart. The last two bottoms we made in the HUI look very similar to me. The first was the support area of 202 which was breached down to 199 and then promptly McQueened north. The second was the bottom at 220 HUI which was violated on the move to 215 then reversed up. same thing here on the move under 232 down to 229+ then on up to 243. I love to see doubters when we are at the highs. I smell a large breakout this coming week.

[ThorAss]

Hooey LT Timing Model: LONG

 

Well I'm back on the same page as my Timing Model (mostly) being 80-85%. The neckbreaker was another in a series of whopsaws to discard the weak. As with the 2 others the best strategy would have been to wait until the neck day after the break to sell a lower low. Since there haven't been any no selling would have occured. But the system is the system as much as I'd like it to be perfect, that is unattainable. I was looking at my 4StockModel (Swing trader) which now has 3 stocks, NEM,VLO and RIMM. Of the last 10 trades 9 have been losses with the median loss being over $500. The 1 gain was over $10,700. That's how it works.? One doesn't even need 50:50 success (except in Who Wants To Be A Central Wanker?)??

The HLTT Model sold the hooey at 231.5 and bought back in at 237.1 which cost it 5.6 valuable points. Thanks to the ugly candle (mid-Sept) I sold at near 239 and bought back (mostly) at around 237. Basically we've gone nowhere since mid-September. Although I feel LONG is the right side at the moment and I can't help but see all of this action as a possible topping pattern. But it ain's till it is.

 

Keep it here and keep it real.

<{POST_SNAPBACK}>

 

High level consolidation and then launch. I can't be bearish here. Gold has held above the breakout of 456 and has issued a double top breakout today on the point and figure chart. The last two bottoms we made in the HUI look very similar to me. The first was the support area of 202 which was breached down to 199 and then promptly McQueened north. The second was the bottom at 220 HUI which was violated on the move to 215 then reversed up. same thing here on the move under 232 down to 229+ then on up to 243. I love to see doubters when we are at the highs. I smell a large breakout this coming week.

<{POST_SNAPBACK}>

 

I have doubted with my mind and my words but I have voted with my money. Which one is trumps? What we have locally is a break of the neck followed the next day by a reversal candle. This is a very bullish sign as I have said. However, all is still not well in Mudville. Let's see the HUI furrow through resistance at 250 first. McQueened as in Steve? Not sure I follow your allusion there. The Cooler King, perennial Cellar Dwellar and getting tangled on the wires when he jumped for the breakout????