"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

Trader Dan's free work will soon be available at www.traderdan.biz

Wednesday, November 20, 2013

FOMC Minutes Spooks Gold Bulls

The release of the FOMC minutes this afternoon, contrary to my expectations, did contain segments that seemed to be a surprise to the market. The tenor of those remarks leaned heavily in the direction of hawkishness and that is what gold sharply lower. It even dented the euphoria in the US equity markets as the S&P 500 initially shrugged off the comments, only to then weaken further as the reste of the session wore on.

The big beneficiary of this hawkish tone was the US Dollar, which in conjunction with speculation that the ECB will move to negative interest rates, soared against the Euro which seemed to fall into an abyss.

All in all, there was quite a bit of commotion across many of the major markets including the bonds which also saw more selling pressure. The all-important yield on the Ten Year Treasury note hit a high of 2.795% today.

I would keep a close eye on that as I feel very strongly that if this thing starts grinding back up towards the 3% level once again, we will be treated to a cacophony of noises coming out of various Fed governors, all of them extolling the virtues of continued QE in full force and warning of the fragile nature of the economic "recovery".

Before getting into gold, I have to make a comment about silver. Losing chart support down between $20.25 - $20.00 has inflicted some heavy chart damage. Barring some sort of news that can be construed as favoring inflation, momentum is to the downside with $19.20 - $19.10 as the next target region.

Moving to gold - I wanted to illustrate something to those who are perennially bullish gold. Notice where the greatest volume in gold has been recently - Yes, on DOWNSIDE MOVES. The only exception to this was the day on which Janet Yellen's testimony statement was released in which we learned ( as if we did not already know this ) Ms. Yellen was extremely dovish. That spooked a short covering rally but as with all recent rallies in gold, it was merely viewed as a selling opportunity.

More later ....


  1. According to Martin Armstrong this is how you destroy a market.
    You continue to short relentlessly, at some point you run out of buyers, who may never return.

    He claims that no one would really do this as your profit is short lived.
    This theory only applies to rational people, we are dealing with Sociopaths, a sociopath will milk a cow to death without ever giving it food or water then move on to the next target…they never look back nor do they ever feel regret (I have some experience in this)
    GS and JPM purposely sought to hire sociopaths, these people are now in control.

    Jim Sinclair several times has stated that "the people who have real power would put their Mother in a microwave if it benefited them somehow" (not exact but close}

    It scares the hell out of me, as it should scare everyone who reads this site.

    1. Throughout history always the sociopaths got into control. It is just natural if you think about it. They are power-hungry, they like to control others, they don't give a damn about others, they are greedy, etc so they are the most likely candidates to become politicians, presidents, CEO's, etc
      Do you think a president who cares about others would have assisted to invade other countries and kill thousands of innocents in the process? You need people like Gorge W. Bush for that job.
      This is just the nature of natural selection.
      Not good for the rest of us though.

    2. That is a definite mis-quote of Armstrong. He has said that no market can be manipulated continually. He has also said that once you get to the point where everyone is bearish (ie, short) the market will go up. James Dines says the same.

    3. @Dean - My mistake - Just catching up on Armstrong's blog and see he wrote exactly what you had down. Wish l could edit my comment :(

  2. Only about 250 away from my 1000 target. I have a covered shorted plus enough extra for cap gains taxes since the 1632 failure.

    I am like a child trying to go to sleep on xmas eve. Who would ever think that a physical long like myself keeps gunning for price collapse? I will own more gold weight. I will need my old radio flyer wagon I got for Christmas 1970 to carry it around.

    Armstrong is correct in one sense. The trend is down. It doesn't matter how it's manipulated. it is still going there. Accept it. Embrace it, Profit.

    I am only scared of what's coming to the country around 8-10 years from now. This whole gold thing is a joke. Just remain objective.

    1. You mean Christmas Eve, no?

    2. @Eph 6:7 I agree with you completely and am taking the same (similar) trading decisions. Glad l live in Asia...looks like things will get messy and ugly in the US.

  3. Eph

    We should all take note of the quote by Fredrick Bastiat that Dan has posted at the top of the page…very true and very applicable to what we are living.
    Just out of interest, in regard to your blog handle "Eph 6:7"
    I was in Ephesus two years ago, amazing place. Also visited Russia.
    The history is almost too much to grasp.

    1. I'd like to hear about Ephesus if you care to share some brief comments.

      Just watched Gerald Celente get all revved up about everything:
      Gerald Celente is all revved up

      It's going to be an interesting few years ahead before Hillary Clinton takes over and then we will have the next phase of the economy probably called Clintonomics or some equivalent catch phrase. There's something about that Clinton Global Initiative...digital world currency...time of great trouble...etc.

  4. News Unit

    You can get a PHD just studying the history of Ephesus.
    It would be like someone touring the ruins of New York city 2000 years from now.
    The tourists would see scant remains of once was a great civilization…but who pissed it all away.

    Anyway…from a Biblical perspective it also has great importance.
    My impression of Turkey?….I could live there.
    The people were friendly and honest. Beautiful country, we rented a local cab and just went driving out in the country away from the tourist stuff.
    They do not have all the material wealth that we have but they also do not have local police forces that are mutating into Military Commando Units.
    I have found in my travels that the happiest people in the world are not the richest.

    Anyway, I could go on, but the more you see of the world..the wiser you become.

    1. I could sit and listen to you for an hour about it. Or maybe I should just go see for myself? I have the opportunity to travel now and don't even have to come back.

      You might have just got my attention.

      I was downtown in my little town here recently and the culture is turning into what the top story on The News UNIT is right now.

      Maybe I'll take a couple of foreign language courses and get out of here for a season.

    2. "I have found in my travels that the happiest people in the world are not the richest"
      Totally agreed.
      Go to Madagascar, Ambositra, and watch the kids playing there.


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