“Woe to the land whose king is a child and whose leaders are already drunk in the morning. Happy the land whose king is a nobleman, and whose leaders work hard before they feast and drink, and then only to strengthen themselves for the tasks ahead”. (Eccl 10: 16-17)


"When misguided public opinion honors what is despicable and despises what is honorable, punishes virtue and rewards vice, encourages what is harmful and discourages what is useful, applauds falsehood and smothers truth under indifference or insult, a nation turns its back on progress and can be restored only by the terrible lessons of catastrophe." … Frederic Bastiat


Evil talks about tolerance only when it’s weak. When it gains the upper hand, its vanity always requires the destruction of the good and the innocent, because the example of good and innocent lives is an ongoing witness against it. So it always has been. So it always will be. And America has no special immunity to becoming an enemy of its own founding beliefs about human freedom, human dignity, the limited power of the state, and the sovereignty of God. – Archbishop Chaput


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Friday, August 23, 2013

Weak Housing Number Propels Gold Higher

Here is all one needs to know to explain why gold did what it did today:

The new home sales number showed the steepest drop in three years! Any questions?

What that translated to is very simple - Death to the Tapering! Long Live the QE Kings!

If that rotten July number was not bad enough, the insult to injury was the downward revision to the June number.

My view on this is simple - I have been posting charts of the Ten Year Treasury Note yield for some time now and have been remarking that it keeps pushing higher and higher and is closing in on that 3% mark. There is no way that rising interest rates in an environment in which salaries/wages are stagnant and job creation consists mainly of part time jobs is NOT GOING TO IMPACT HOUSING SALES.

I feel like I have been beating a dead horse but I repeat - the FED cannot be pleased with what has been going on in the Treasury markets because this entire phony "recovery" is predicated on one thing and one thing alone - CHEAP MONEY. Take that away and there is nothing else to support it.

The other side note to this is that these rising rates are going to significantly impact the US Federal Governments borrowing costs.  When the national debt is over $17 trillion-gazillion-bazillion-whatever, and rising, even small rises in interest rates will have a significant impact to the nation's bottom line.

Bottom line - rising interest rates are a pox on the nation and on the economy and the Fed knows it.

Take a look at the Homebuilders' ETF. It is on course to close below its 50 week moving average even though it is valiantly trying to remain above it. The shorter dated moving averages have already turned lower indicating that the short term trend is down. I am monitoring this to see if we get any bearish downside crossovers of that 50 week. Either way, this sector is not particularly friendly on the charts.



It was easy to see that for today, the bonds were the beneficiary of buying related to no end to the QE bond buying program. When that housing number hit the market, they never looked back erasing all of this week's earlier losses and then some. The yield on the Ten Year backed down towards 2.81% after peaking near 2.92% this week. A collective sigh of relief along with a great deal of backslapping and hi- Fives was heard at the offices of the Fed.

Gold is right on the door of the psychological $1400 level in the aftermarket today. The December contract has missed that number by a mere $.10 as I type these comments.

Silver pushed up through $24 and looks very strong heading into next week as well. It looks to have very little in the way of impediments until it nears $24.70. If it clears that, silver could get quite exciting, very quickly. It will be interesting to see if it can hold above $24 as it goes out here on Friday afternoon. There are sellers around at that level as well as the $1400 level in gold.

The US Dollar was undercut by the weak housing number as it lost any gains it had against most of the majors with the exception of the Yen (barely) and the Pound (barely). The forex markets are ultra sensitive to any news whatsoever right now that they regard as potentially impacting Federal Reserve policy. Thus, we will continue to see more volatility and unpredictable price swings upon the release of each bit of economic data. I for one have sworn off trading the currencies until I see something more definitive as far as a trend goes. I am not a masochist and will leave them to others who are more tolerant of ulcers and other stomach wrenching maladies.

The HUI still needs to clear 280 on a weekly closing basis to kick the mining shares into a stronger uptrend. Price action has been very constructive but there remains work to be done on that price chart to dispel any doubts.

Today was one of those days in which it was hard to find any commodity that moved lower. Cattle did but they have been so bullish of late that I can understand them not participating in the buying orgy today. Soybean traders have effectively managed to kill the crop once again, as they do every single year without exception. First it was too cold and too wet; then it was too hot, then it was too cool and the crop was lagging and needed heat to mature. Now that it has turned hot, it is too hot and too dry so it is time to kill all the beans once again.  If you think gold and silver are nuts, try beans. They are worse especially when the mindless machines are buying.

Sharply rising soybean prices which are oftentime viewed as a proxy for food prices by some, tend to feed into silver buying on the thoughts of an inflation play. Remember, silver will outperform gold to the upside when inflation fears are dominant.

Personally I think the funds are driving soybean prices to ridiculous levels as all they are managing to do is to destroy foreign export demand for our beans at current levels. Old habits die hard in the commodity markets however and the combination of two words, "hot" and "dry" is all that is needed to spark a wave of short covering and more buying.  We are not going to run out of beans anytime soon with those massive S American crops and even if this year's crop does get smaller from previous projections, there are more than ample supplies of soybeans that are going to be around. Wait until the combines start rolling...

Maybe silver can take out chart resistance before that happens. We'll see. I will be talking about this on the KWN Weekly Metals Wrap so tune in to listen to my comments. I will get some price charts up later this afternoon as my schedule permits.

By the way, J P Morgan continues to stand for delivery in gold. They have taken the lion's share of all deliveries this month.







52 comments:

  1. Inflection points r often seen around short Holiday weeks at the end of a month; take care everyone and have a good wknd!! steve in sparks

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  2. Dan -- I saw a report which stated that more than 50% of last month's home sales were all cash! I don't recall if it was new or existing or which month, I just recall that stunning number. How many Americans do you know with $100-$300K in cash to plop down on a house? So the buyers must be hedge funds, or speculators of some sort or rich foreigners. Working people have too much debt to even get a house loan in many instances. This housing market is built on nothing, already back in bubble territory in many places. Everything is nuts.

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  3. Dan, thanks for posting so timely today. I always turn to you first to try to understand what is happening in the markets, you are someone I trust.

    ReplyDelete
  4. Dan,
    I have said many times here that the rise in interest rates were not appropriate due to the lagging economy, even if the official numbers are "good".
    We all know the impact of higher rates on the economy -home sales as shown today, higher deficit due to both higher interest paid on the US debt and lower GDP...

    The question I have asked here many times with NO answer from anyone -Maybe it is not an issue for your readers- is this:
    WHY is the FED letting rates go up when they can achieve almost anything they want through BS language accepted by anyone as words from God?
    My answer to this question was that higher rates should attract more buying from large investors which in turn increase the value of the USD.
    The USD is, imho, the last bastion left to protect the US castle. When the USD goes down _I still predict it will go down to 79 by the end of the year- the game is over as inflation will show up its ugly face.

    Do you have an opinion on this subject and if YES what is it?

    ReplyDelete
    Replies
    1. This is what Franklin Sanders, at goldprice.org, had to say about rising interest rates:

      "Canary in the mine: US 10 year treasury yield rose again today, now at 2.901, highest level in two years and determined to go higher. Bernanke's strategy, if a sane person can call it that, pivots on that Zero Interest Rate Policy, which now blows in tatters. Market is re-asserting its control over interest rates, and it's saying, "I don't like dollars unless they pay me more interest." Poor Ben. You could feel sorry for him if he weren't a central banker and cosmically disqualified from pity."

      Delete
    2. Joe,
      This is funny because it is exactly what I said many weeks ago here: "Canary in the mine" and "I don't like dollars unless they pay me more interest". At least someone else agrees with me.

      Because I am a long term investor (my portfolio rotation is low) I am more interested by fundamentals than T.A. For example I advised my daughter here in Canada to sign a 10 Y mortgage instead of 5 Y. All her friends told her that it was "stupid". Why pay a extra $150 a month? Since the signature of the mortgage, 6 weeks ago, rates went up 1/3% and there is another 1/3% coming soon due to news rules for mortgages in Canada from the Canadian government. In 2 months and not counting the expected rise again due to the rise of the 10Y IN THE US, she has already got her $150 back.

      My philosophy for investing is the same. I don't need the money invested. I am convinced, right or wrong, that it is going to get worse before getting better and therefore T.A is just a FUNCTION OF
      A- Specific fundamentals related to the company
      B- Specific fundamentals related to the world economy (including of course all the BS from the US market)

      Dan has said it before: 2 types of investors: short time traders and long term investors. I am part of the latter and it seems that Franklin Sanders would agree with my views.

      Delete
  5. Dan, Thanks for great work and clear thinking and teaching. Your columns are some of the best out there. I'm not sure I'm going to agree with you on this one, however. Your thinking is that with the rotten housing numbers QEternity is a given and there will be no taper. I'm not so sure. QE is suppose to work to keep bond rates low and drive money into equities enhancing the ephemeral "wealth effect". Bond rates have made some of their biggest moves up since QEternity was announces. Today ZH published this article:
    http://www.zerohedge.com/news/2013-08-23/taper-risk-stocks-not-bonds
    The two charts are stunning. QE moves equities much higher and also moves bond rates higher. Seems like all the periods of a dropping bond rate happen when there is no active QE. So which is more serious the problem, a crashing equity market or rates going up so high the government can't pay its bills and all those shadow bank derivative positions go belly up. Folks have repeatedly said that Bernanke has painted himself into a corner, there is no good solution. I just hope that when the Great Reset happens we call it the "Bernanke Crash", giving him the credit that he so richly deserves.

    ReplyDelete
  6. I am unsure what to believe anymore but contrasts in opinions and outlook are so divergent that at times it makes me feel like a dear in the headlights...totally paralyzed.
    I do appreciate your by the numbers analysis Dan.
    I recently read a weekly report by another well known analyst...the following statement really stood out for me
    "We remain bullish on U.S. long-term because of the rule of law, trustworthy accounting and auditing, strong institutions of higher learning," (this is only part of the Pollyanna style statement but the remaining portion is much the same)

    Really ?....if the corruption and shenanigans that we witness on a daily basis in America at every level of government and business is considered the best , what does this say about the condition of the rest of the planet ? or of our definition of integrity ?....we are all so very screwed !

    ReplyDelete
    Replies
    1. Dean;

      I agree - every nation out there has its share of problems. It is like Steve says here - The West is sinking under the weight of its debt but the rising East has its own share of difficulties and problematic areas. In my view it has become a case of the lesser of the evils. And who is to say what the focus will shift to on any given day? The markets are schizophrenic anymore.

      Delete
  7. Its seems the US and its lackies are gearing up for war over Syria. If that kicks off i guess it will be dollar positive ?

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    Replies
    1. With Russia deeply involved supporting the other side, let's just hope they stop this game of chicken, because Putin and Fran├žois Hollande are not exactly in the same category.
      I doubt russians will back off on this one, and first world war started with a simple assassination, your Vietnam war started because you thought north vietnam attacked your ships (it was actually dolphins!!???), I really hope those megalomaniacs stop this madness before it just becomes too late.

      Regarding gold, the trend is your friend, my friend, the way is up led by the upwards pitchfork, I still have no particular alert on some indicators such as MACD, so I keep my 75% remaining long position and wait for higher prices.

      Have a nice weekend,

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    2. Im with you, Hubert Du Haut! Shall remain long and see you at 1500 for starters and re-assess? ;-)

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    3. I hope so, though I'll be careful with the upper bollinger band heading down on a weekly time unit. Next week it will be around 1470. So I think I'll re-assess before 1500 and maybe sell a bit more if I see the market stalling once more.

      Delete
  8. RE: ben talking down interest rates: he cannot talk down gold AND bond yield at the same time.........framed by his upcoming departure in jan '14

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  9. Without giving names, I sometimes see websites of people trying to put forward this or that analyst on the basis that they best called the bottom or the tops, more precisely or before anyone else.

    Not even debating whether the portrait is true and objective or not, as we are on Dan's blog, I'd just like to emphasize that I'm sharing his numerous warnings about trying to call a bottom or a top.
    In trading, it is not necessarily the point.
    Trying to pick the exact bottom or top may even be very risky and dangerous for one's wallet.
    That's why for the readers here, I want to support Dan's philosophy which is to make money with higher success probabilities, even if you take only 50% or 60% of the whole move.
    I definitely support this approach, and I wanted to remind it, because many are putting forward the "bottom or top pickers" as some analysts who should be followed based on their forecasts.
    I don't agree. Especially, one of them indeed called a bottom in gold before some of his pairs, but he did it also in may when gold was at 1400 and the bottom was at 1320. So which bottom are we talking about? To be totally honest and factual, that analyst failed a bit to predict the real bottom and the real timing. There is nothing wrong about that, it shows that noone can exactly predict anything and that it is a matter of probabilities. It is not criticizing this analyst and his work to point that he was not totally able to call the real bottom at the right time. It is just reminding that it is very hard to call the real bottom, and if you forget money management first of all, you can wake up with nasty surprises.

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    Replies
    1. Hubert du Haut;

      I could not have said it any better....! Perfect!

      Thanks!
      Dan

      Delete
    2. Hubert du Haut,
      What you are saying -and surprisingly enough Dan calls your reply "Perfect" !!!- is that people who have been right for so long can be wrong once or twice...

      I know the word "manipulation" seems to be "banned" from some readers here and the only way is to play T.A. Technical analysis in today's market is only for the lucky people who are on the right side of the trade...
      I don't know -and don't care- about your success in the market but if I read all your posts you must be a very rich man. Seems to be always on the right side of the trade, seems more knowledgeable than Dan...

      I don't know, because you did not put a name behind your words, whom you were referring to but if it is Jim Sinclair -and maybe you can confirm or deny the name- I will choose his words against yours any day. He did put his reputation on the table more than once and was right more than 80% of the time. Since a ratio of success of 50% seems to be good for Dan, 80%+ should be perfect!

      It is my opinion, and ten of thousands have the same, that the price of gold is not where it should be based on fundamentals. Now using T.A for short term traders could be useful but again since you do not know what Uncle Sam, Uncle Ben and Uncle GS, JPM... are doing in the back room you are just playing Russian roulette. Do you see the up and down from one day to the other? and you want to use T.A? For example TNX (Sinclair) was up 5% one day and down 6^ the day after before rebounding again... And you want to invest in this type of market...and BE SUCCESSFUL?

      It is always easy to make comments after the facts but were is the truth when even Dan is saying: what kind of BS market are we witnessing where 12 people decides the faith of hundred of millions of investors around the world... and these 12 do not even know what they are doing and/or saying (check all the up and down about the tapering for example and not even mentioning when tapering is going to happen before it changes every time someone from the FED or the media open his mouth.)

      I will stop soon reading this blog. Why? because we do not live normal market's conditions and T.A is of no use to me today. I will come back when we are back to a real -read FREE- market.

      Delete
    3. Hubert;

      why do you seem so intent on denigrating those who make their living in the markets by the study and proper application of technical analysis? You seem downright angry that Hubert du Haut employs it as do I and many other traders.

      You have a fundamental view of gold - fine - you are entitled to that. But you are only one person. The view that matters to any trader is the CURRENT VIEW of the market players. That is ascertained by studying the price action. Now, you may not like that but in the larger scheme of things- the market could care less what you think it should be doing. For that matter, it could care less what I think it should be doing or Hubert du Haut or anyone else! That is why good traders are both confident and humble. Show me a reckless trader and a braggart, and I will show you someone who will not be trading for long.

      From where I sit, you seem to have a view that gold is undervalued. Okay - many feel the same way. The problem is that there are also others out there who feel that gold is overvalued at current levels (those are call BEARS.

      Every market always has two sides to it. TA is simply a method we employ to attempt to discern which side is currently attracting more followers to its viewpoint.

      Stop knocking it.

      Yes, the markets are volatile, and yes they are often unpredictable. I submit however that a great deal of this volatility is due to the constant meddling/interference by the Central Bankers of the world who refuse to allow the markets to function as they would if left alone. The CB's of the world are the most significant cause of volatility and are to blame for the mess that the markets have become in my opinion.

      Delete
    4. No problem.

      I just want to say again that for the huge majority of your readers, who are NOT professional traders and therefore so not spend hours on T.A as you do -and Hubert du Haut it seems- your explanations are very interesting but CAN NOT -again for a huge majority of us- be followed minutes after minutes or hours after hours.
      Your blog vocation is to educate us and I do appreciate this, but to refuse the other side thinking -mine in this case where I am saying to NON professionals- "Be careful, T.A is a good tool but the outside forces are working against you because their views have nothing to do with the fundamentals of the market" can bring trouble to your readers.


      However this is YOUR blog and if you don't like my comments I am just out of it.

      Delete
  10. This comment has been removed by the author.

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  11. Preditor1976 said...
    Hi everyone,

    If anyone play with stop loss method, for the pass two month, based on T.A only. How much have you earned?

    I just try warn you guy , and I say play with cycle style you will win both up and down, off course buy when technically chart is the most bearish.... Anyway... Hope you guy not a victim on the way up, just like the bull on the way down.

    Now I am turning a seller but not now.. When , this is the interesting part ..... Anyway .

    I just feel sorry for people who stop out of silver when price fell below 19.00. Once you stop or book profit normally you reluctant to add more position, it took a lot of courage to buy when thing look bad.. And not to be a greedy when thing look good.

    And let me... It make my trade easier when everyone using the same book, it just make market more predictable .

    When I start my blog back in 2009 , trust me , I have lot of follower... But soon I realized trade is getting difficult ...so I stop posting my position and I only post if I am sure that people can benefit from it. .anyway... Hope you guy do not loss money in this investment environment. The computer will try to force as much as stop as possible. Both up and down.

    The bond yield have being up for a while , it start 2 - 3 month ago. Like I mention back when people are playing with the tapering news, the housing is recovering is still weak, tapering will only hurt housing recovering.

    I am most bullish is gold and silver back June...

    What happen now is effecting future... That is how future market function.

    Playing with current news with future market is dangerous fork..

    Cheer guy..

    ReplyDelete
    Replies
    1. Preditor1976; you say you never put stops in and that is fine. however, I would venture to say that you are not operating with serious $, or that you just do not realize that subconsciously you really do have a mental stop in mind. having said that, I would only suggest to you that without stops, your ego is getting in the way and that it only takes 1 bad trade to bury you. remember, even 4 aces can be beat; have a good weekend, steve in sparks

      Delete
    2. Hi steve,

      It bury me once and that is enough. If my method work me well for past 7 years and get 80% right without stop loss then i am happy with that. I am have lot of open interest not just 20 or 30 contract per investment.

      Now it is important you understand that each open interest you buy or sell there always be someone on the other side of the trade. I have being warning you guy doing homework is important. Once you know what you are doing you would not need a stop loss.

      it is better doing nothing when you know nothing.

      There is something call investor instinct which this depend on each individual and cannot be share , you need to develop it . For example if T.A it is same indiciator which everyone used, it have same rule and method to see but the different how each investor apply, some people who used T.A but did not follow the indicator. Let me ask hubert du haut, when chart is extreme bearish what he normally do like gold fail at 1200 or silver below 18. Base on chart you should not be buying

      Anyway Steve, you on your own in this investment arena , we can share idea and tip but not the profit.

      Especially when you playing in future where it is high leverage. The time lining in each rally or break down is simple and there always be reason to support both up and down.

      Ok steve good luck to you.

      cheer

      Delete
    3. This comment has been removed by the author.

      Delete
    4. have been trading a wee bit longer than 7 years, my friend; good luck to you; steve in sparks

      Delete
    5. Hi steve,

      It take me a few years to develop my own trading style. I am in investment for 20 years. But i start when i am young at 18.

      Cheer

      Delete
    6. What is your website Preditor?

      Do you think we have seen the lows in gold for good, and are you looking to ride your precious metal positions to test all time highs?

      Thanks.

      Delete
    7. Hi jc1965,

      My blog is realityinvestment.blogspot.com..

      I am not active in update my blog nowsaday. But i do post interact with some of my friend there.

      There is lot of thing going under the radar ... and lot of develop is making me nervous..

      I will start reduce my position soon , i not sure if this will big move but if situation get out of hand i might hold the position longer

      From forex market view, thing look extreme instability... one thing you should note that gold is opposite to forex market....

      i don't think the gold will take out all time high soon. Will it? It depend how the situation develop.

      now the oil is holding out well. The bond yield is shooting up, and will this get out of hand ... note that there is lot of liquidity lock in the bond ,should this break lose, i place my bet on inflation to ignite..

      For my position ,in short i am ready to book my profit anytime now. But i currently still comfortable with my position.

      Cheer

      Delete
    8. This comment has been removed by the author.

      Delete
  12. Looks like the economic data was bad enough to trigger yet another "wash, rinse, repeat" cycle whereby:

    1. Bonds put in a strong reversal after sentiment extremes reached their lowest level ever in Fixed Income

    2. Dividend stocks showed a strong reversal, which suggests a Doug Noland-style "rip your face off" countertrend rally may be underway in the bond market.

    3. Gold is once again reacting to the reality that tapering isn't going to happen anytime soon

    4. After a brief and shallow correction, stock investors again turned very bearish with AAII jumping back up to 48% bears

    5. Millions of hedge fund and mutual fund managers are once again looking at their YTD performance and are now starting to experience severe "performance anxiety" and will start dryhumping whatever is moving to the upside the fastest, which could be good news for the HUI.

    6. Articles are out everywhere claiming about a "Financial Collapse" and "Endgame", yada, yada, yada, which means the Dow will probably reach 16,000 before the end of the year, which will drag gold kicking and screaming back up to $1,600 again.

    ReplyDelete
  13. Dan,

    Can you elaborate on this:

    "By the way, J P Morgan continues to stand for delivery in gold. They have taken the lion's share of all deliveries this month."

    Thanks as always for your posts.

    ReplyDelete
    Replies
    1. jc1965a;

      standing for delivery of a futures contract means riding a long futures position into the delivery month and informing your broker that you intend to take PHYSICAL POSSESSION of that underlying commodity.

      JP Morgan has been taking physical possession of the vast majority of gold being delivered or sold against the August gold contract for their HOUSE account as opposed to their various customer accounts.

      Delete
  14. Preditor : " Let me ask hubert du haut, when chart is extreme bearish what he normally do like gold fail at 1200 or silver below 18. Base on chart you should not be buying."

    Hi Preditor.
    I thought I just demonstrated the opposite, as I went long at 1200 and explained why, based on T.A, one criteria being that we were opening the month of july 100 dollars Under the lower bollinger band. My target was 1300 $. Remember my posts?

    You also wrote :
    "Once you know what you are doing you would not need a stop loss. it is better doing nothing when you know nothing.
    There is something call investor instinct which this depend on each individual and cannot be share , you need to develop it."

    If your method brings you some profit on the long run, I'm not going to judge. But I think then that your answer is dangerously incomplete.
    If you do not put a stop loss in your position, how much of your capital are you risking when you make a bet?
    Are you risking it all? Are you even leveraged?
    If you put a small percentage at risk, yes, it is ok not to put a stop loss if you want, because even if you are dead wrong on that trade, you won't lose a lot of money. And maybe with the other trades when you are right, you will make more money. So all and all, you make many trades without stop loss, on many different markets, and most of them are winners. I'm fine with that if it works with you.

    Now, if you tell me that you are going ALL IN with all your capital, or maybe with leverage, on a single bet, like gold at 1200 $ for example, I'll say this is madness.
    Yes, true, nothing replaces experience, and the more he trades, the more a trader develops an instinct about what's going to happen next. That will improve your odds.
    But if I compare to poker, that comes to going all in with all your stack with a pair of Aces preflop against a guy whose stack is bigger than yours. You will win 85% of the time. But the one time the dude with a 75 meets his straight, however unlikely it sounded, will be the day you'll lose it all.
    NO STOP LOSS means bigger risk on your capital which means LOWER size of your position. With a tight stop loss and low volatility in the market, I can afford to "bet" more compared to my stack's size, if I refer to poker. With more volatility in the market, with a loose stop loss or no stop loss, I might bet indeed, and I do it on some occasions, but with a smaller bet.
    Going all-in one a single bet because you think you have the best hand will bring huge rewards...until you lose it all imho.
    I heard enough real stories about real successful traders who one day really threw themselves throughout the window because they just lost everything.





    ReplyDelete
    Replies
    1. Hubert,

      I loss everything once, and that it because relay on one indicator and did not homework.

      Have you ever loss everything and return to the market again.

      my tactic work well for me. And i develop skill to trade under extreme pressure.

      Don't get me wrong here, if your tactic work fine with you then use stop. It is what you develop and you earn base in your tactic.

      I am sticking to my point no stop loss needed if you do enough homework and trade base on fundamental and cycle. The end result is profit.

      Warren buffet
      1st rule of investment = not to make loss (so no stop lose needed )

      stop loss = weak hand who are not confident in trade and not sure what is happening.


      Hubert enjoy you weekend, disagreement is good but not anger...

      cheer

      Delete
    2. P.S : of course, all I'm writing above is to be applied on the perspective of a trader. Once again, investing money into real physical gold for the long term is a different story, and then you may choose to accumulate on the dips, just as Rogers or Sinclair do.
      I'm writing from a trader's perspective, managing his cash account, playing on paper positions.

      Delete
    3. "stop loss = weak hand who are not confident in trade and not sure what is happening."

      Preditor, imho stop loss = saving one's ass when the market doesn't react as one expected, which happens to everyone, except GOD.
      Weak hands or Strong Hands are not a language of trading.
      Let's take two guys who bought gold at 1600.
      If you call the weak hand the guy who sold when 1520 support gave way, and the strong hand the guy who kept it all until now because he thinks he is wiser, I'm quite happy to be a weak hand if that's what you want to call it :) Especially when I have the oppoertunity to buy it back later at a much lower price, just as I did.
      Of course, no anger preditor. Anger is the privilege of idiots whose egos cannot stand contradiction or get into a simple conversation, and I don't think we are :)
      Have a nice weekend,



      Delete
    4. Hi hubert ,

      this is what i wrote back in october 2012


      Http://realityinvestment.blogspot.com/2012/10/qe-mania-where-is-all-excess-liquadity.html?m=1

      I will not comment on your above commentary cause i start to feel wasting my time. Cause i told you do homework , play with fundamnetal and cycle.

      you nice weekend

      Delete
    5. Preditor1976;

      If you do not have either an actual stop loss order entered or have a mental stop loss that you adhere to when placing a trade, you are an accident waiting to happen.

      NO trader, and I mean NO TRADER, ever has a perfect 100% trading record. There are far too many variables, unknowns and surprise events that occur in trading for a mere mortal to have an accuracy rate of 100% on his or her trades.

      The idea in trading is not to be correct on each and every trader (although that is a goal that we all of course share) but rather to be right more often than wrong and when wrong, not to let a single loss get large enough to take us completely out of the profession.

      Delete
    6. Hi Traderdan,

      Yes Dan no one get it right 100% no doubt...

      Yes stop loss used to be useful tool no doubt... But this is not useful as it used to only due to more refine algorithm formulae.

      HFT have being testing the system for the past few years and no doubt the system is getting better and better..

      Why do you think the market have become more violent recently with extreme move in either direction.

      Now don't misunderstand me, stop loss did not match well with my trading style so I cannot apply that to my trading.

      I used about six years to develop cycle trading style which is 3 years before market melt down.

      If did not do my homework careful and happen to loss in my position . I will close my position and move on and no doubt it will happen.. But my loss is not high cause I usually buy at low price and sell at high price so my loss usually limited.

      I never say it is 100% if you have being follow me since start.

      Anyway appreciate you work in warning lot of trader out there... Anyway if any of you trying to trade daily or quick in quick out ... Then stop loss is a must fork... No doubt you gone to need that..

      Cheer

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  16. Dear Hubert Du Haut,

    I look at Dan's blog to see any update multiple times per day because, simply put, he is awesome!

    But just now with the intention to go to Dan's blog, unknowingly, in the search section I started typing in, www.HubertDuHa....before I realised, oops I mean traderdannor....

    Who here has also done that? HAHA

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    Replies
    1. lol, means I really post too much already :)

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  17. Despite not being a trader or even entertaining the notion of trading, I very much enjoy the trader talk here. I am getting the distinct impression that in trading, just like in any other competitive endeavor, the unchecked ego can be a great disservice to one's success. No matter what the endeavor, a quiet confidence represents success.

    With respect to strong and weak hands, I consider traders (wisely thinking about the balances of their trading accounts) and other speculators as being the weak hands and nations such as China and Russia being strong hands. I think that the terminology is rather arbitrary and inappropriate. Weak can be smart, strong can be wrong. It's really all about the time line, isn't it?

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    1. @gil, imho it's about the timeline indeed, trading having a shorter time horizon, so you want to be swift and get out of trouble early if you are wrong.
      That most of the time means, even if it looks counter intuitive to many :
      - buy when market goes up
      - sell when market goes down,
      and not the opposite.

      The opposite is used when you want to accumulate longer-term by averaging down something whose price seems really undervalued to you, so we are talking about investing, OR because the markets seem really extremely overbought / oversold (and then you would at least take some profit, or play a contrarian trade).
      Investors can do this because long-term, there is a notion of Fundamentals and value which, if you are right, will drag the prices back eventually and make you realize a profit.
      No such things in short term trading.

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  18. Hi everyone,

    I would like to put a stop here, I do not use ego in my trading , I use my develop knowledge in my trading...

    The knowledge I develop is from my point of view, just Dan or Hubert . They just happen to trade from different point of from mind.

    They trade regularly but my trade is about 2-3 month time flame and sometime can up to 6 month.

    I accumulate lot of future contract... My way of trading is buy when market extreme bearish and sell when the market extreme bullish.

    I never buy position when market already move up.. . I don't like chasing market.

    I do sometime short term trading but usually small position.

    So my trading view is quiet different from their view.

    Cheer


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    1. Preditor1976; you never buy when the mkt has moved? Does that mean you did not participate in the $40 silver move from '08-'11? steve in sparks

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    2. Hi steve,

      I don't know you came out with this type of time line. It just don' t any sense.

      Every rally there will be correction from time to time. So if i see it is bullish i sell and if the market is bearish i buy.

      You can follow my trading during 2009 here.. before that i post my commentary at oiltraderblog.

      http://realityinvestment.blogspot.com/search?updated-min=2009-01-01T00:00:00-08:00&updated-max=2010-01-01T00:00:00-08:00&max-results=45&m=0

      Cheer

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    3. follow your trading? I would not follow you to the post office; steve in sparks

      Delete
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  21. My friend this tips help for you. If you've got patterned upholstery, an Oriental rug or large piece of artwork, pluck colors you like from the pattern. For a neutral wall paint color, look to the pattern's whites and beiges. Specifically, the living room, dining room and entry way. Choose a color scheme for those areas first, then pull one color from the scheme. For example, take the red sofa and tone it down (say, to burgundy) for an accent in more private spaces such as the den, office or bedroom.
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