"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


Monday, September 9, 2013

No Worries in the Equity Markets

It is interesting to watch the day to day shifts in sentiment among traders/investors as the news headlines change in regards to Syria.

President Putin just made a master stroke of genius in taking our Keystone Cops bumbling leaders to school, i. e., Obama and Secretary of State Kerry, ( you know that fierce warrior who intimated that any punitive stroke of Syria inflicted by the US would be itty, bitty, teeny, tiny.) I am reminded of Alan Jackson's classic C&W hit, "It's all Right to be Little Bitty".

Seems as if no one in the Administration expected Putin to seize upon their hapless confusion and suggest that Assad should put his chemical weapons under international supervision. Whoops! there goes the imperative to punish Assad swiftly!

The markets sure seem to take it that way because it was off to the races in the equity world again today with the DOW pushing past 15,000 and the S&P closing on its session high.

Take a look at the S&P 500 chart - it has pushed right back up to the 50 day moving average once again after plunging below it on Syria fears.

Gold, after looking like it was going to try to push through $1400, swiftly succumbed to selling pressure in spite of the strength in the Euro. It sure does seem as if that "14" handle is proving to be difficult for the metal to hold right now. Same goes for silver in the sense that maintaining itself above the $24 level for any length of time is also elusive. As mentioned in the KWN Metals Wrap over the weekend, both of these markets need a steady influx of brand new, eager, speculative buyers to sustain their upward path and right now they are NOT getting that. They will not unless they can first clear those overhead chart resistance levels mentioned in that interview.

As we were reminded by last week's horrific payrolls number, the US economy is limping along with many Americans suffering and unable to secure viable FULL TIME employment. That does not apparently matter to Wall Street however.

I have been relatively quiet of late in regards to commenting on market action merely because I simply do not seem to have any clear sense of where some of these markets are heading from day to day. Reactions to various economic data releases, many which conflict the previous day's release, are unpredictable at best and bizarre at worst. To watch a market move higher on rotten economic news merely because it would argue for a delay in any Federal Reserve Tapering activity is clear evidence to this long-time trader that our financial market system no longer has much, if any, connection to anything real.

Still one cannot argue with the tape if they hope to be profitable as a trader and that means you either have to hold your nose and take your positions accordingly or do nothing and sit on the sidelines. Doing nothing however as a trader means no income so you have little if any choice but to roll with the tide.

Personally, America's nakedness is being exposed for the entire world to see. We are naked politically with a buffoon and his crew for our leaders, a man who has become a laughingstock outside of his adoring sycophants here in the US media. We are naked financially with a debt the size of which boggles ones mind if they are honest and clear-thinking. We are naked ethically which can be seen in the degeneracy our entertainment industry with the trash that it regularly spews out. We are naked intellectually, because we are to damned ignorant to learn from the lessons of history and lastly we are naked spiritually, because we have become gods unto ourselves.

So much for my soapbox for today. Watching the farce that this nation is becoming is too much for me to take without hoping that there are millions of my fellow citizens who feel the same way.

As far as gold goes, it needs a breakout on the technical price charts to get anything exciting going and to clear it from the range trade it is currently in.


  1. Dan,
    The IBM and GE news is unbelievable. How does Big Gov and Big Bus (Socialist Immelt) handle getting the Exchanges up and running? Poof, eliminate all the promises GE has made over the years to its retirees. IBM too. Simple it improves their bottom line, allows the BIG Gov to get people with something to lose and have some means (IBM and GE retirees generally do have something to lose) and they can get the exchanges up and running. One scary but not unbelievable rumblings on the comment sections of some of the GE Web sites contained rumblings of ex employees and retirees looking to invest in a pool of money to send a shot across the bow of these Croney capitalist, socialist backer types. I saw some actual postings indicating they hope to find Immelt unprotected and open to a firing line. Wow, now that would open some eyes if a few of these socialist leaders were actually assinated? I am sure it is probably just rumblings at this point, but, I sure would be pissed if I just retired and found out I had to wait in line to get a tooth pulled with illegals after I put in 20 with GE and all the promises they made came to a sudden end. I am kind of hoping some of these guys get what they deserve. Especially congressman who don't have to share in our now second rate healthcare system.

  2. Thanks Dan. Your clear comments after a day of confusing events is much appreciated.

  3. And to think that all along I have felt like an island in the middle of the American cesspool; good letter as usual; looks to me like late Aug trapped the stock bears and pm bulls; the moronic Obama and Kerry are even sorrier than bush, cheney and Rumsfeld and that is going a ways; that is all, steve in sparks

  4. . . . . and I'm naked while I'm reading this.

  5. Count us in! The state of affairs in the US has become flat out embarrassing. Appreciate your comments.

  6. That was one of the best written, succinct and honest evaluations of where we are at that I have read probably ever. Thank you. The sinking of morality is also evidenced by the fact that there is a major break in HIV with the porn stars but industry just keeps shooting those movies.

  7. Keep your chin up Dan....It's just history and human nature repeating the same stupid mistakes. Take care of your friends and family and (your blog readers!) cause nothing else matters.

  8. When the market keeps shaking off one piece of bad news after another, I cannot help but be optimistic the the world is about to embark on an economic expansionary boom that will be one of the greatest of all times.

    After 3 years of being in the doldrums, Emerging Markets may be coming back to life and could drive global growth for years into the future.

    This growth could be in fact so substantial that the huge debt overhang will be worked off easily, and eventually we will have 4% - 5% inflation which will evaporate debts eventually.

    I'm keeping an open mind that things are not bad at all and are actually improving. At least that's what the institutional investors are thinking.

    Gold will come back into favor as a value play once the pension funds get tired of chasing these 300 P/E ratio stocks into Outer Space and decide to take profits and buy something with better valuations.

    1. "When the market keeps shaking off one piece of bad news after another..."

      It's easier with 85 billion dollars of QE injected every month...

  9. Gold and Silver both taking it on the chin tonight. Predictions of another bear raid were all around today. It seems this silly taper is going to make September possibly a bad month for gold.

  10. Well said Dan,

    By the way, I believe you mentioned you were trading soybeans recently. It's had 40 point (400 Dow point) ranges for the past 2 weeks or so. Do you usually intraday-trade this?

  11. Hi Dan,

    Thanks for the update!
    Did you get my email?

    I have a question : do you globally think that "the bottom is in" at 1180 $, as I can daringly see it here and there?

    I see that GLD stocks have stabilized lately, and that Comex Registered stocks keep bleeding. Also it's true that seasonality is favorable.
    Yet as long as we don't get through 1420 $ (quarterly candles), it seems to me that we have a "ligne de poussée" in this time unit which doesn't allow me to be conclusive about the continuation of this "rallye".
    For now, we bounced back recently on 1360 $, the 23% first retracement fibonacci level of the downwards move from 1940 to 1180. We didn't manage to reach the next level at 1475.
    So it's not really impressive, in terms of bull strength.

    Many bulls are very excited because we bounced 200 $ from the lows. Of course, it's nice, especially in 2 months only, but they consider it already a rallye, a bull market, "the lows are in!", while I still see a simple retracement from a down move of more than 700 $ down! (1940 - 1180 = 760 $ drop!).

    Do you think it's a trap?

    CHART :

    If I zoom out on a weekly time scale, I'd like to focus on :
    - the orange arrow shows the slope of the sustained long term rallye from 2008 to 2011. Now we are in a much steeper channel, as you can see, closer to the one of the last upwards move from 1550 to 1800...didn't last very long and was followed by next down move.

    - the MACD is close to hitting its propagation axis. Warning. Possible reversal on prices here if the MACD reverses indeed.

    - the blue and red pitchforks show resistance above our heads. I was aiming at 1450 eventually, but it seems that prices stopped before at 1435, the top of the daily resistance upwards channel (in green in my other charts).

    - we are still Inside the downwards red pitchfork on this weekly scale. Trend is...down.

    That's many warning signals that seem to say that the fight is not going to be easy for the bulls, and actually I see a risk of stalling and plunging down once more (so I agree with Marc here : careful and careful again).

    As a consequence, I'm waiting for gold prices to meet at 1350 $ (I missed it at the last bounce) which is the support zone of the daily green upwards channel and also still the neckline of the cup and handle I was following.
    I'll be long here, but if we break under it, I don't see many supports on the short term, and it may start a mini collapse of prices. Where we go then from there is anyone's guess, but under 1300 $ seems quite possible.

    So all I mean is I can't feel convinced just yet by those who claim that the bottom is in, because I don't see a confirmation of that yet on the longer time units.

    Do you feel more confident than me, and do you believe, because of a mix of fundamental and technical reasons, that "probably", the bottom is behind us?
    That would for sure send a relief to long-term bull investors, as some other analysts still forecast a possible 1000 $ target ;)

    Have a very nice day!

    1. P.S : to be really accurate, I see the strong support zone starting at 1355 $ rather than 1350 $.

      IF we bounce from this zone, I also see (to be optimistic) a real potential to go to 1450 $ meet the median of the blue fork and the mlh sup of the red fork by end of september. That's why I'm a bull and have a buying order at 1355 (I missed it of 4 $ last time as you know lol).
      But I'll cut my losses very quickly if we break through 1350. I see a cliff here down to 1280 $.

    2. Hubert - I never did get your email.... try sending it again please.

      My thinking is that the long term bottom is in for the gold and silver markets but those prices are well below current levels meaning we could still see further setbacks in both metals as we deal with shorter time frames than buyers of the physical metals.

      I look at the fundamentals and feel those argue for higher metals prices but again, those are long term oriented in nature and thus not much help when it comes to trading around a shorter time frame orientation.

      Currently I am more interested in where corn and soybeans are going than I am gold to be honest. Same goes for the livestock markets!

      Sugar is showing some signs of life but nothing conclusive just yet.

    3. Thanks!
      Weird about the mail, I sent it twice, maybe gmail doesn't send it when it's too long. I'll try again :)

  12. About Putin's last chess move (Kramnik and Kasparov being more recent champions than Bobby Fisher, maybe Obama doesn't remember the rules), we'll soon have an answer about the position of the USA.

    In Irak, there were UN inspectors everywhere, and Irak was complying. That didn't serve them. This video (this time in English :)) acts as a reminder.
    So...we'll see if the US find another motive to say that Syria is not reliable, that international inspection is not enough, and that we must bomb them anyway, but thank you Putin for the generous offer.
    Only this time, Irak happened, and the whole world is watching you, Mr Obama.
    You can lie once to everyone.
    You can lie every time to one person.
    But you can't lie every time to everyone.

    So what will be your answer to the world community, Mr Obama?


  13. Hi all,

    I would really like to bring some attention to the harbingers of potential massive price (not just monetary) inflation. People in the inflationary camp have been waiting for indications of the velocity of money for a very long time.

    1. Oil stabilizing well above the $100 area

    2. Bond prices precariously near a breakdown

    3. Dollar not too far from the bottom of the recent trading range

    4. Copper carving out a bottom

    5. Steel companies (SLX is the ETF) looking fairly strong

    6. Oil companies continuing strength

    7. The precious metals, and their miners finally getting some money flow

    8. JPM net long and still net long gold futures

    One thing that I haven't really seen anyone mention is the performance of the dry bulk shippers (DRYS, SBLK, NM, among others). The last time the Dry bulk shippers have truly led in performance was during the pre-death throes of 2008 when every single commodity was at or near highs, not just the precious metals.

    Anyone have any insight? Thanks!

    1. Bradley; to me either gold, crb, copper, etc. have to break down or the Baltic rallies from here, as it has been in the basement since late '08, which says there has been no real world recovery, but just asset bubble plays in stks, commods, and now the best laugh of them all the recovery in r.e. To me, copper is sideways for 2 years now between $3-$4 off of the all-time $4.60 highs and once $3 gives way, it is game over. steve in sparks

  14. " History has taught us that crumbling empires always resort to war."

    That's it.
    There is no check mate from Putin here, because the scenario has already been written.
    All Putin can do is delay a bit and show that US are the warmongers here.
    Are the USA weak enough to bow their head Under international pressure?
    I still doubt so.
    Let's see and hope I'm wrong.

  15. Good piece Dan, the US has seen it's better years politically and monetarily, sure the stock market may rally but the US is building houses of cards this is the stuff of illusion, smoke and mirrors. We know the only way out for the US is to inflate so that's more than likely the path of least resistance and the US is the custodian of the printing press so use it they will, mad not to. While others accept that crap paper, the US will keep printing. This is where Gold comes in, to the FED and western world CBs Gold is enemy numero uno, it shines the light on their BS policy of QE free money. Luckily with the east rising Gold is looked on in a totally different light it is the ultimate store of wealth. So we have Asia accumulating Gold at pace both Government and private while simultaneously selling the US dollar, at the same time US and western CBs trying to keep a lid on Gold to cover FIAT to infinity. I can't think of a better asset to buy than Gold, forget US stocks they may go up from here however they have already out performed the rest of the world by far and houses of cards fall without warning regardless of quality. Gold precious metals and Gold stocks have taken it on the chin more than any other asset, so if it's taper or no taper if it's inflation or no inflation Golds got a lot of catching up to do. In ten or twenty years time will you want today's dollar or today's Gold!

  16. Dan, There are millions who feel the same way you do. Unfortunately, I'm afraid we're in the minority...

  17. In addition to my TA this morning in weekly candles, here's the daily time unit.
    The lines I have are converging today around 1352.
    I have a strong buy order in this area.

    Should it fail to support prices, we should see it quickly on the 2day candle with a cross of the MACD (berk).
    So I cover my ass here, with a stop loss not too far below, I don't know maybe around 1335-1340 $ area to be a bit far from intraday noise. And if we reach the 1350 area and bounce from there, I'll quickly move my stop loss around that area.
    Silver is weak. My target (as a short since I posted the 2day candle chart with this nasty configuration recently) is still 22.50


    1. P.S : and my stop loss regarding my short on silver is already put at the level I sold. Meaning NO LOSS possible.
      I protect my capital first.
      Then only I consider making money.
      Even if it means being stopped a bit more often.

  18. GDX/GLD ratio now charging towards the world record lows again.

    Poor NEM below $27 and AUY down to $10 again, I guess we won't see those stocks added to the Dow Jones Industrials in our lifetimes.

    Meanwhile, XLY is within $2 of making new world record highs, as the "Resilient Consumer" is now stronger than ever.

    Starbucks about to break out to record highs again, as that company is luxuriating in an outright collapse in coffee and sugar prices the last 3 years.

    Still no apologies from those claiming $5,000 gold and $200 silver.

  19. How about you not gloating about gold's troubles on a largely precious metals blog. It is called "grace". Don't you have better things to do. Gold looks awful we get it.

    1. not awful as long as 1350-1360 is holding.
      Support zone is still here.

    2. Just trying to save a group of guys from buying into the hype and hysteria and losing even more money or missing out on opportunity in other sectors.

      The amount of people burned and the amount of money lost is truly historic.

      Several of my good friends were included.

      The promoters should be held accountable, but they are not. Therefore it takes other parties to step into the fray and provide another perspective in order to prevent further harm from occurring.

    3. imho Mark is right to remind us that the risk of correction is still there and that the gold market is not necessarily back into bull trend on the middle to long term.
      1420 is ONLY a 38% fibonacci retracement of the single down move from 1805 to 1180 earlier this year.

      imho again it is not enough to confirm the end of the bear trend.

      Bulls, be cautious.
      Safety is one thing.
      Greed is another.

    4. Im with Hubert on Mark, concord. I know where you are coming from as I took my losses from listening to perma bulls that invariably have something gold to sell, be it an ETF, mining shares, news letters, whatever.

      Do away with the emotion, dont take Marks remarks personal, they are not aimed at you, they are aimed at the gold promotors.

      Sometimes its hard to accept that others out there may do for reason of personal gain or inflated ego's or political agenda's simple irresponsibility what you would never consider doing. It happens though.

      Long term your good holding gold relative to other assett classes.

    5. Hubert when has Mark ever made a statement that was different than what he said today. He is like Tokyo Rose always reminding of the doom that awaits gold holders. He is back handed and gleeful in his comments when gold is under pressure. He is clever and smart but a veiled basher on a site with seasoned traders who are objective and hardened by the rules of the market. I don't mind him at all, I just want him to know that he has an agenda just like the gold promoters.

  20. it is early but if HUI does not key reversal and close the gap, then I would say that Sinclair's Tanzanian outfit is not the only dog in the kennel, as juniors continue to deteriorate after brief 2 month rally off lows. PM's need more TIME to get themselves sorted out. steve in sparks

    1. Weekly charts on all the miners look precarious. Filling the gaps wont change that. JMO.

  21. IMHO Mark you are part of a large group of people who are dissuading any and everyone from protecting themselves. The FED, Govt and Large crony companies out there are bankrupting America, limiting any and all growth due to the huge derivative mess born, raised and fermented under Greenspan, Bernanke and the large Bankers. If I had my way we would have let the system FAIL in 2008. If the Bankers want to continue this façade they can. At some point there will be blood in the streets and when that occurs all fingers point to FED, and Government. PERIOD. Banks should be held responsible for most of the phoney baloney markets. I cannot wait until the COMEX default which will occur at some point. Currently the banks are stuffing themselves with cash, investments and the gov under OBAMMY is now moving on 401K and IRA's so they can begin the NEW THEFT.

    1. Short term (months) variations of gold, even down to 1000 $, should not dissuade people to buy some physical gold and store it as an insurance.
      I'd say at least 20% of their cash, and maybe up to 35% as Sinclair suggests.
      Personally, I'm in the 35%, and that's after the selloff.
      As an insurance, gold is something I own, in terms of number of ounces and something which will never lose 50% of its value over the weekend.

      That being said, bulls should not get overleveraged, speculate too much or consider that a pull back towards 1200 $ is impossible imho. Blind speculation and greed will bring loss, not gains.

  22. OK...because of Syria, I take a look more often at blogs like this :

    and then I wish I didn't take the red pill, when I see the stupidity of the comments of 99% of population on the web via Yahoo articles and etc, and that includes France for sure.

    People are really lemmings without a clue of what's happening behind the stages.
    When you realize that, you wish you didn't suspect anything at all, like this guy.
    I want to remember nothing!


    1. Hubert; You may be focusing on gold too much for the time being; I humbly suggest that you take a peak at the Yen, which monthly, weekly, daily , I think is the best play on the board; In other words, Japan is the Asian version of Detroit; steve in sparks

  23. Jasper; You make good points about not taking things personally if somebody holds different mkt viewpoints; steve in sparks

  24. Mark

    Many do not agree but you are totally correct. I can no longer even imagine the XLY correcting even by a few percent.
    The more frivolous the stock, the better it does.
    I know I have made this joke before..but...if there is ever an IPO for a company that makes lipstick for pets I will be all in !!
    The bonehead American consumer can't get enough useless stuff. Crack another beer and watch Family Guy all night America, no worries here.

    Gold, Oil, food...nah...we don't need that crap, all the food you need is only a block away at the corner store.

    I have lightened up on Gold and commodities, glad I did.
    As Dan has pointed out in his most current post, you may have to hold you nose when you buy general equities but it is the only game to be in right now.
    It has now been revealed that the NSA is also into Corporate espionage and is passing info to American Corporations.
    The mighty DOW has no where to go but up.

    1. Dean,
      If Ben takes the punch bowl away you will be singing another tune. I picked up the sarcasm and know you are not 100% serious, pe's on some of these glam stocks as Mark calls them are beyond absurd. Gold stinks but the general market is acting like a bubble. So proceed with caution. A day of reckoning is coming.

    2. I also agree with you concord

      The only issue is, when does the day of reckoning happen?
      this year? 5 years? longer?

      This nonsense can go on much longer than we think.

    3. What has really hurt the formally impervious gold market Dean is exactly what you say. My goldphobia that the world was coming to an end did not take in how long the system that is so corrupt and bankrupt would take to play out. Smarter people saw the Fed come the rescue in 2009 have blissfully rode the train to profits. God I am sounding like Mark. The guy is obnoxious but he is point of view which is sadly relevant.

    4. Well, Mark may seem obnoxious but he is totally correct in his current assessment of the market.
      The calls for stratospheric gold prices is starting to look and sound kind of foolish.
      We are wise to listen to Trader Dan and his assessment of the PM market.

      Like you I got spooked by some of the sensationalized gloom and doom headlines/articles that us gold investors are constantly bombarded with.

      Anyone that I know who has zero gold holdings and is solely invested in the general equities market is very happy.
      Crisis ! what crisis? they ask me.

      I really wonder at times if we are the ones being conned.

    5. Dean we also had ten years of gold advancing that lulled us into believing a significant downturn was not in the offing.

    6. Concord

      Totally correct. We often forget about that.
      Jim Rogers summed it up nicely when he said that "nothing goes up for more than 12 years without a correction"
      It hurts, but a correction was needed and it is healthy for the market to do so.

      Hard to keep the old head screwed on these days.

  25. I cannot find a clothes pin big enough for this stench. Interesting article today on MW where tax changes are being introduced to the 401K industry. The govt in their infinite wisdom and benevolence is crafting regs that will require anyone who inherits a 401K to have the money withdrawn within 5 years. The major impetus is to collect more tax revenue. Aren't they sweet. Jim is correct, just that they are going to manipuulate this until gold explodes then they will come in and put up all the normal blocks (mine regs, epa regs, tax regs, margin calls, etc) The government and banks are out of control. I say it will soon be HAMMER TIME. Time to get out the lead and ready ourselves for the onslaught towards FREEDOM. When the time comes, I will be armed and ready. Definitely armed. My wife was commenting the other day that some of the closets look like the Army's artillery storage areas. It is not even funny anymore and Santelli is right. What are we ...a Banana Republic? I guess we are and no one will do a damn thing about it. Time to pull all the money back in from all the miners and various stocks, empty out the IRA, before the government does, and load up on any and all working firing devices and prepare to defend ourselves. That is what I would call an all out assault on Washington, defending ourselves.

    1. White Wolf

      Just a reminder...everything you post here is being recorded analyzed and stored.
      Ain't it great living in a free country ?

  26. http://jessescrossroadscafe.blogspot.com/2013/09/comex-deliverable-gold-bullion.html?utm_source=feedburner&utm_medium=feed&utm_campaign=Feed%3A+JessesCafeAmericain+%28Jesse%27s+Caf%C3%A9+Am%C3%A9ricain%29
    COMEX Deliverable Gold Bullion Continues to Slowly Bleed Out - 10 September 2013

    "Though justice often moves slowly, it seldom fails to overtake the unjust."

    Horace, Odes"

  27. http://jessescrossroadscafe.blogspot.com/2013/09/nav-premiums-of-certain-precious-metal_11.html
    NAV Premiums Of Certain Precious Metal Trusts and Funds - Physical Gold Demand Provokes Another Bullion Redemption - A Murder of Black Swans


Note: Only a member of this blog may post a comment.