Here’s a look at Taser’s nice “test of top.” Read Vic Sperandeo’s book which has a chapter on 1-2-3 Trend Reversal Zones.

TASR, Weekly Chart

The Gratuitous Cute Baby Pic… don’t worry guys, the ladies will be back next week.

Another album recommendation from the Chairman: Madeleine Peyroux’s Careless Love.

Her version of Elliott Smith’s “Between the Bars” is almost beautiful enough to make me want to quit drinking.

Drink up baby
Stay up all night
With the things you could do
You won’t but you might
The potential you’ll be
But you’ll never see
The promises you’ll only make….

Gold has fallen about $10 from the short entry I pointed out the other day. Yes, that’s a nice gain in just a few days time, but don’t forget to think about things in terms of risk and reward. I had no idea that gold would tank as hard as it has, but I did know exactly what the initial risk was, and that’s always the number to focus on.

If someone says I’m short gold or I’m long XYZ or whatever, ask them where their stop is, i.e. what is their initial risk. Train yourself to think in terms of risk, not reward.

Gold, Hourly Chart

Archipelago Agrees to Buy Pacific Exchange, by Jenny Anderson:

“While the New York Stock Exchange has a virtual monopoly on trading its listed stocks, the trading of over-the-counter stocks is more fragmented. Major market players are trying to consolidate volume in an effort to squeeze profits from the notoriously low margin business. At the same time, many exchanges are diversifying so as not to be dependent on a single financial product.”

Just a Singer in a Rock & Roll Band, by Bill “bond market wiz” Gross:

“[In 2004] we managed to avoid extreme duration statements and instead profited by shifting money into reflationary beneficiaries in the U.S. (TIPS) and near deflationary economies outside our borders (Bunds). [In 2005] the dominant moneymaking themes in the bond market should be the following: 1) The Fed stays relatively low, 2) China revalues its currency, 3) Spread product underperforms, 4) Europe remains sick, and 5) Cash is Prince.”

“The successful 2005 bond strategy therefore, will likely be to avoid duration, avoid spread product and to flock to the stability of cash, TIPS, and foreign bonds issued by strong currency countries in an openly reflationary world. If so, bond market returns of 3-4% for the year may be all an investor can rationally expect, and if those Asian investors flee for the exits then longer duration portfolios might even wind up in the red.”

China Aviation Oil’s Creditors May Lose 60% of Debt, by Yoolim Lee:

“China Aviation Oil (Singapore) Corp. may ask creditors to write off 60 percent of debt … the company… owes about 80 creditors excluding its parent company more than $500 million.”

At the end of the article there’s a handy list of creditors cobbled together from various sources.