No bottom fishing here

10:55 am (Hawaii) Nothing against swinging for the fences. Hell, Dave Kingman made quite a career of that. But that's Kingman. I'm no sultan of swat, poor man's version or otherwise. That's why I'm okay with not catching FAZ at 50. Or 51. Or 52. Or 53. I picked up a handful of shares at 54.50 before the closing bell today. Where the bankster sector goes from here is not guaranteed in either direction over the near term. Long term, I still believe FAZ goes to 100. Whether it drops back to 50 or 41 first, who knows?

These are tricky times. Obama is set on a new economic plan and intends to unveil it next week. Some people think QE3 is already underway via 0% interest until mid-2013. Others think Obama has no gusto to his strategy. I don't know where the economy goes from here, but it is clear that sentiment has swung almost fully to the skeptical end, and the market tends to punish bandwagon traders these days.

So I'm keeping a tight lid on my wee bit sack of FAZ. It can run to 60 in the blink of an eye, and 70 is not out of the question at all. It was at 81 just a few weeks ago. But any outward sign of stimulus will burn the shorts temporarily. I remain mostly in cash as the algoalienhighfrequencymonstercomputermachines search for their tipping points and the next flash crash or rise.

Goldman Sachs being persecuted by the US govt today. This comes 24 hours after the BOJ went after AT&T on its pending purchase of T-Mobile. DJ down 119 (-1%), Nas down 33 (-1.3%) and S&P 500 minus 14 (-1.2%) for the day.

Bada bing

11:27 am (Hawaii) Bullish for gold? Fast Money reporting via Doug Kass that someone bought 50,000 gold call options between $1600 and $1800/oz (out of the money). They will expire in August-Sept, a total of $50 million in call premium paid — whatever that means. Kass says given the size of the purchase, it's likely a central bank or sovereign fund. Is this positioning for QE3?

Brian Kelly thinks it's China swinging for a home run, a win-win plus delivery of physical gold. Terranova thinks it's a good trade. Adami isn't sure central banks are allowed to buy calls. "If they're right, they'll make 10 times that."

What they say is always interesting, but doesn't affect my trades. They won't talk about Endeavour Silver or Extorre Gold Mines. Not today.

Scouting report

7:55 pm (Hawaii) Overseas markets are down in the -2% range so far. US Dollar is above 76. Crude Oil at 98.45. Gold 1508. Silver 34.68. With so much uncertainty on both sides of the QE3 coin, it's no wonder so many people are cashed out.

So much anticipation about the days and weeks ahead. But I think we'll be underwhelmed. There will be no magic bullet. Things will not be as volatile as we may imagine. Cash will be on the sideline as politicians and bureaucrats push keyboards and, in the words of the great David Byrne, things will be "Same as it ever was . . . same as it ever was."

To QE3 or to not QE3 ... so many gray areas. If it isn't officially announced, but the market is propelled long after June 30 by inflows and buying, there you have it. It will have begun covertly. If not, it'll be just a matter of time. The alternative is a crash across the boards in due time, and Big Ben will have to assert the Federal Reserve's authority in these matters. In the meantime, gold and silver are deep into the equation. Somewhere. So is China. How beautifully combustible it all is.

Zero Hedge: Goldman aligns itself alongside China for next IMF head (May 22 2011)
Zero Hedge: China prepares to launch Gold ETFs, Utah makes gold, silver legal tender (May 22 2011)

Update 8:40 pm (Hawaii) "Silberblick" at The Silver Gold Hedge blog points out that it is in China's best interest — in the near term — to keep gold and silver prices relatively low. Eventually, however, the People's Republic could use the newly-formed gold futures trading instrument in Hong Kong to burn rubber and destroy the US Dollar sometime down the road. True or not, it's an interesting picture.

Silver Gold Hedge: Why the Hong Kong Exchange will disappoint, for now anyway (May 22 2011)

Update 10:44 pm (Hawaii) Interesting interview of Hugo Salinas Price regarding his concept of a silver Mexican peso and a quoted monetary value.

Silverseek.com/DollarVigilante.com: An interview with Hugo Salinas Price on a return to a silver Mexican peso (May 19 2011)

On the Links

Never visited the site, but LinkedIn and this social-networking craze is starting to feel like the Internet pre-bubblicious days of the late 1990s. I have qualms about a site that needs money this badly, but someone's going to make a ton of money off this IPO.

Story here.

A piece by William D. Cohan (New York Times) about Goldman Sachs' overvaluation of Facebook here.

Goldman Sachs hearts Nintendo

Nintendo shares on the Tokyo Stock Exchange, known as 7974, were up big today. The 2.7% gain was a mystery to me, but this explains it.

Nintendo shares jump to record high

The surge in stock price echoed Goldman Sachs' decision to cover Nintendo's stocks; the investment bank offered up a "buy" rating with a target share price of ¥71,000 ($609). In addition, and as if to brag, Nintendo raised its earnings expectations for the second time this business year to ¥370 billion, which amazingly is still well below analyst predictions of ¥415 billion.

The U.S. pink sheets convert that yen/dollar amount in Tokyo to $76.12. That's a significantly higher price than today's close for NTDOY.PK (below $69).

CNOOC: The 'other' Baidu

I pumped my tank full during an all-too-rare stop at Costco in Iwilei over the weekend. At $2.98 per gallon, I was happy to get the lowest price on Oahu. I was also happy to get a $1.50 hot dog and soda deal a few minutes later. Neither the constant use of gasoline nor the consumption of hot dogs and soda are any good for our bodies and the ecosystem. But there I was, getting a good deal all the way around before driving off to cover a football game 25 miles away.

Gotta get it cheap, no escaping that. But as gas prices come down, I can't help but expect $4 per gallon in the near future. Crude oil prices hit $83 per barrel today, and with production declining (supposedly) in the Middle East, we're at the mercy of producers, refiners and everyone in between. So, if we can't beat 'em, why not just join 'em?

I remember pounding the keyboards for CNOOC Ltd. (CEO) over the past few months. Again and again, I ranted and raved about the great future of this Co. I vividly recall writing about the stock (CEO) being a steal in the 90s, 100s, and in the 110s recently. The P/E hovered at 11 for the longest time. Not the best of breed in China — that would be PetroChina — but with 1.3 billion residents and a major increase in auto sales and gasoline demand, CEO is a prime best-of-all-worlds kind of stock. Not just being in China and being an oil/natural gas Co, but having the protection of its government.

And yet, I didn't buy a single share.

So CEO ran from 92 (subprime sludge low) to 155, pulled back today to 148 and is completely not fit for purchase, technically. But I think Goldman Sachs is right. Oil will hit $100 a barrel sooner than later, and GS could be right about a $135 price. (I don't even want to imagine the possibility of $200 per barrel.) Does the average man or woman have any way to fight back against these exhobitant gas prices?

A part of me wants to say, "Yes. If we can't beat 'em, join 'em! Buy all the CNOOC and PetroChina and Exxon and ladee-dah oil stocks that you can!" I mean, CNOOC ran up 60% since August 16, so there were many opportunities ... if you had dry powder. As gas prices rise in the coming weeks, I'll be more peeved and more eager to buy some CEO for the first time.

Coming soon, $200 for a share of CNOOC Ltd. Who woulda thunk it? CNOOC is the other Baidu.