If you would like to watch Rick Santelli at his best, check out this segment of his show on CNBC where he describes exactly how he feels about this idiocy with the "Taper Caper".
I can tell you as a long time professional trader, that he is exactly dead on target. Once upon a time, those of us who make our living in the market and not off the market, attempted to master the fundamentals of those markets in which we traded. We prided ourselves on our understanding of the factors determining supply and demand, seasonal trends and tendencies, value pricing, etc. I can say that more often than not, it seems as if none of that matters at all. All that does matter is whether or not Uncle Ben will keep the money spigots wide open or close them off.
Trading used to be a business which required hard work, long hours of meticulous research and devotion to ones craft if one was to be successful. Not any more! Now all that is required is ferreting out the inner workings of Mr. Bernanke's mind and determining whether or not he is in a generous mood when it comes to supplying punch to the multitude of bowls laid out in front of him on Wall Street.
I can only say that if this is what the greatest nation on the face of the earth's financial market system has been reduced to, kiss us goodbye, because we are going the way of ancient Rome faster than I had even contemplated.
Enjoy Rick's rant! It is a classic....
http://video.cnbc.com/gallery/?video=3000182232&play=1
Thursday, July 11, 2013
HUI Chart Improving but more Work Needed
The rally in gold is finally pulling the lackluster mining shares higher and while it has somewhat improved the technical chart posture of the complex as a whole, work remains to be done to cement a bottom or at the very least, spook some of the bears who have been extremely complacent.
I have noted a significant chart gap that the index has of yet been unable to close. For this chart to turn friendlier, bulls must at least push into the gap, preferably closing it completely and holding the index through it. Should that occur, we will begin to see some more sizeable short covering in the complex.
The key question potential buyers of the miners are asking is whether or not the rally in the metal will continue or stall out below $1300. There is a line of thinking that the sell off in the Dollar is only due to money flows reversing as many traders were completely caught off guard by Mr. Bernanke's almost bizarre reversal on the duration of the QE program yesterday afternoon in his comments. (Count yours truly in that crowd).
That being said, many look for interest rates to rise FIRST in the US before elsewhere around the globe meaning that the sell off in the Dollar, though quite deep, may only be temporary before buyers return and begin bidding it up again. Upcoming economic data will be critical in this regards.
So far the Euro remains well bid against the greenback but most would agree that the state of the overall European economy is decidedly weaker than that of the US (which isn't saying much now is it?). If the Euro were to clear 1.34, we would have to re-evaluate that but as of now, it has already retreated one full point off its best level against the Dollar. Let's see how it closes the week out tomorrow and whether or not the trade reversals are pretty much done by now or will continue some into the close of trading Friday. If the Dollar begins to start working higher again, gold could come under some selling pressure.
I have noted a significant chart gap that the index has of yet been unable to close. For this chart to turn friendlier, bulls must at least push into the gap, preferably closing it completely and holding the index through it. Should that occur, we will begin to see some more sizeable short covering in the complex.
The key question potential buyers of the miners are asking is whether or not the rally in the metal will continue or stall out below $1300. There is a line of thinking that the sell off in the Dollar is only due to money flows reversing as many traders were completely caught off guard by Mr. Bernanke's almost bizarre reversal on the duration of the QE program yesterday afternoon in his comments. (Count yours truly in that crowd).
That being said, many look for interest rates to rise FIRST in the US before elsewhere around the globe meaning that the sell off in the Dollar, though quite deep, may only be temporary before buyers return and begin bidding it up again. Upcoming economic data will be critical in this regards.
So far the Euro remains well bid against the greenback but most would agree that the state of the overall European economy is decidedly weaker than that of the US (which isn't saying much now is it?). If the Euro were to clear 1.34, we would have to re-evaluate that but as of now, it has already retreated one full point off its best level against the Dollar. Let's see how it closes the week out tomorrow and whether or not the trade reversals are pretty much done by now or will continue some into the close of trading Friday. If the Dollar begins to start working higher again, gold could come under some selling pressure.
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