“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, January 31, 2014

Gold Slips; Silver Steady

Gold had a double whammy working against it in today's session. The first was stability in the US equity markets. Every single time stocks have moved higher this week, gold has lost ground. The opposite has also been true; when stocks have dropped on emerging market fears, gold has moved higher. It is acting like a safe haven can be expected to act, at least for now.

This emerging market thing is providing some support to the gold market and preventing it from moving sharply lower as lingering fears are bringing in some dip buying. However, when the US Dollar firms, it attracts selling.

Silver seemed to shrug off weakness in gold as well as copper taking its cues from some general commodity market strength across the softs and grains. Sugar and Coffee both had big up days today. Beans moved higher along with the grains and hogs were strong. So far, support near $19 has been holding but the market is definitely attracting strong selling near $20. If emerging market fears begin to increase, I think silver could slip below $19, especially if copper and the other base metals respond negatively. Remember, any sort of slow down related to emerging market fears is deflationary in general and silver, even more so than gold, will struggle in that environment. It needs a solid - RISK ON" appetite tied to strong growth sentiment leading to inflationary pressures. Without it, no one wants to own it right now above $20.

Natural gas was weak while heating oil and unleaded gasoline parted ways today. The former was up with the continued cold weather while the latter was down. Hey, maybe everyone looked at those photos of cars stranded outside Atlanta and figured if they weren't going anywhere, they sure as hell didn't need any gasoline in the tanks! These weather markets can be notoriously volatile for as soon as a forecast shifts, everyone who bought heating oil or nat gas on cold fears are suddenly on the wrong side of the market. They can fall as fast, if not faster, than they went up so if you are trading these, be careful.

It is exactly what happens to grain traders on the wrong side of a summer forecast! No one asks any questions or thinks - they just panic and run. By the way, this somehow is confused with trading for some reason.

Take a look at the following chart of the US Dollar on a weekly basis and you can see that the price action of the last three weeks has been of the whipsaw type. Up - down - up. If you look only at the short day to day stuff, it will drive you batty; however, on this weekly you can see that the Dollar moved down towards the lower portion of the upward sloping price channel and now appears, for the moment, to be working its way back up again.

There is certainly no clearly define STRONG trend but more of a gradual grind higher. I would keep an eye on the 79.50 level. It has not had a weekly close below there since October of 2013. If it did, it would portend a test of 79. I would think that would coincide with a move through $1280 for gold. The flip side is if the Dollar were to push through 83 on the upside, gold will more than likely not hold above $1200. The jury remains out therefore.
 

Take a look at the 4 hour gold chart and you can clearly see where sellers have gotten aggressive - that is up near $1,280. When it tried to extend past $1,270 on Wednesday and failed, that was it as far as some of the shorter term oriented longs cared - they were out and down she went. There was another push to $1,255 that also failed to extend and back down it went again. The market is trying to hold $1,240 and so far is succeeding but it does look heavy to me. Without an escalation in the emerging market crisis over the weekend, it is doubtful that gold is going to have much in the way of friends, especially if equities keep shrugging off any worries. Sentiment can flip on a dime however so just be prepared for lots of ups and downs.


The daily chart is noteworthy in the sense that the ADX, which was showing the possibility of a fledging uptrending move, has now flattened out again indicating that the upward progress is stalling out. The +DMI has turned lower, and while it still remains above the -DMI revealing that the bulls have control of the market on the daily time frame, it is now falling. This market could go either way but remember that on the weekly chart, the intermediate time frame, the bears are in control and thus the reason I have been citing that rallies are going to be sold.


Speaking of a weekly chart - here it is. Notice that the Bears are still in control of the market as -DMI remains above +DMI although is continues to fall. The weekly ADX is also dropping as can be expected in a trendless market.

 
As long as the emerging market currency/credit issue is a lingering concern, gold will probably continue to hold up. Barring that however, it is an iffy proposition.

Next week will bring the beginning of the delivery process in gold for the February contract. I will keep an eye on it to see whether Morgan continues to issue gold as they did in January or returns as a large stopper as they did in December.

One last chart for now - Goldman Sachs Commodity Index in a weekly view.

The gradual decline continues to extend. It is a slow, methodical move lower. The sector has garnered buying support which is keeping it from falling apart but it lacks any sort of upside vigor at the moment.



Lastly - this is to save myself a bit of work answering emails about the KWN Metals Wrap. I have no idea when or if it will return right now. If I hear anything concrete, I will let the readers know.

I will try to get some charts up or comments on the COT stuff later on as time permits.

Have a good weekend all... Go Hawks....



72 comments:

  1. Thanks Dan for all you
    As a sound money advocate seems things are getting real interesting, time for prudence, patience, and keen awareness. Fischer sure might have begun the war of words as CB coordination may break down. We will then really see some currency wars.

    ReplyDelete
  2. Looks like jsmineset has replaced the Kitco PM charts with Singapore Metals Exchange quotes.

    Unfortunately, the prices quoted in Singapore seem to trade TICK FOR TICK with the COMEX, as if there was no difference whatsoever.

    High 1,245
    Low 1,240
    Close 1,241

    Heh, COMEX actually traded higher intraday, up to 1,254, LOL!!!!

    ReplyDelete
  3. Major review of the market Dan. Thanks Very Much.

    ReplyDelete
  4. Hmmm…a jobless economic recovery that also requires no food or raw materials.
    Indeed Mark…we do live in an interesting and amazing world, all powered by entries on a computer key board.

    ReplyDelete
  5. another month that was a basic nothing bore. to many mini moves for me to buy/sell in. stocked up on cheaper coffee over the last month that's about it. if metals go much lower I going to have to add some for the long term.

    ReplyDelete
  6. I like Andrew Maguire's take on the metal price. Look at the history of an expiration period. You don't have to Kreskin to see what's coming. Also Dr Roberts showed the orchestrated smash in detail. Throw the charts in the garbage. The whole market is a manufactured and manipulated wet dream.

    ReplyDelete
  7. Dan,

    I appreciate that you are a trader, but Gold is at or below its production price and there is a shortage of physical metal due to strong demand from Asia. I had learned in Economics 1.01 that supply and demand determine price? This makes absolutely no sense other than huge manipulation by the CB's. Why would anybody use charts and trade in a totally manipulated market?

    ReplyDelete
    Replies
    1. philipat;

      thanks for the comments. Here is a question I have for you? Is gold demand from Asia price elastic or inelastic? Also, is that demand sufficient in and of itself to replace lost WEstern investment demand for the metal?

      Answer those two questions and I think you will have to reconsider the notion that gold is constantly under manipulation by the CB's.

      As far as trading and charts - first of all, I disagree with the assumption that the market is manipulated down at these levels.

      Second, any large selling or buying leaves footprints that experienced chartists can read. One can easily see at what levels those buy and sell orders come from. Those are where support and resistance levels form. Trading involves knowing how to work within those parameters.
      Thanks

      Delete
    2. Was taking to my wife today about this blog and the Robert's post. I love both sites and read everything those men produce.
      I think the key, and I was coming to post this anyway, is the word in Dan's post above "constant". When they "need" to do something they can.

      Look, the manipulation is PROVED. The Fed documents from the 70's shows they KNEW they HAD to control POG. MUST. So they do. Fine.

      But do they do it all the time, no. Do charts work, sure. No question. I think it comes back to FOFOA's thesis, the fact that there is a paper market is the manipulation itself.
      So do I know gold is manipulated, yes. Do I know charts can work and it is not all the time manipulated, yes. Do I know this paper market is a joke and paper gold will go to zero and only physical holders will be made whole, yes.

      All the shorts that these guys carry will one day be made good. But COMEX holders, don't expect to get your gold oz. I think we all agree on that.

      I know Dan's position. I agree, gold is not "constantly" manipulated. But it is. They know as much as the pros like you Dan. I just think sometimes the mask comes off. At 1900 JS was saying here we go. We all know what happened next.
      Lastly, about the demand question above, physical demand is WAY different than paper demand.

      As the "western" mindset wakes up to the value of physical gold v paper gold, we will see paper drift. I think we are seeing that, and that is what the pros see. Fine. But when they need to do something, to maintain "control", I don't see how anyone can't think that has never happened.
      Anyway, I would recommend Trader Dan and Dr. Roberts to everyone.

      Delete
    3. "there is a shortage of physical metal due to strong demand from Asia."

      Man please tell me you're tired of hearing the same old every time gold sucker rallies.

      Or the physical vs paper gold crap. Point is people hung on for dear life while "paper" gold was getting clobbered and people's portfolio's were getting decimated - cause it's not physical gold that is going down it's only paper gold, so no need to be alarmed.

      I find it even funnier now how JSmineset has the physical price but not the corrupt paper price anymore. It's nice to see the BIG $10 spread between the 2. Whoopee ding.

      Will also be interesting if he continues his QE to infinity slogan now that the Fed is obviously going through with taper.

      Delete
    4. Prophet, I agree with you 100%. Every time I read somewhere the old story of the shortage caused by STUNNING demand from Asia (which has apparently been happening on for over 3 years now) I get severe skin rush due to irritation.

      Delete
    5. And China will back the yuan with gold and replace the USD as reserve currency which will all happen overnight so when we wake the next morning we'll be swimming in a world of hyperinflation.
      Any minute now so don't sell your gold!

      Delete
  8. Thanks, Dan, for your commentary, and for the update on the Metals Wrap.

    ReplyDelete
  9. Thanks as usual, Dan.
    "The market is trying to hold $1,240 and so far is succeeding but it does look heavy to me."
    Yes...
    and look at silver...went back up right at its ex-support (low of the slightly upwards range), and stopped dead there. I thought silver could gather enough strength to make a try towards 20 once more...not even that.
    Instead we reversed back towards the lows of the day, and the last 2 candles look nasty, even though 19 are still there (not to worry, as the "analyst" mentioned before sent a new free letter yesterday saying that everything was ok, that he mentioned somewhere that prices may get back to 19.20 and so his forecast was perfect (after forecasting exactly the opposite of that!), and that it was just a small delay of one or two more days...I mean I read this just to believe with my own eyes how far that guy can go in the BS, and I must say he has balls...I would be so shamed I would not find the way to write a new letter after being so consistently wrong, but no, he sends one saying he was right all the time, a real piece of art, I swear).
    So, not only we may not get to 20 $, but the previous support level became a resistance after yesterday's top (ouch!) at 19.50...and the chart is showing a threatening bearish flag that may give us a target of 16.50 $...
    Everyone will understand why I will drop all long positions taken at 19.10 if we fail to hold the 19 $ level...
    And of course, gold is quite heavy, hardly managing to close near the ma20, and on the daily and weekly time unit, in both cases a nasty Bearish Engulfing pattern :(
    All shorts can be happy of the end of the week. They are in a nice position to play the break of next supports, if they took a short from above, of course...

    http://i59.tinypic.com/1265zki.jpg

    ReplyDelete
    Replies
    1. P.S : bit dirty chart to show the "risk" I see on silver if we can't hold the important 18.60 - 19.00 $ area...

      http://i60.tinypic.com/2czo51d.jpg

      Delete
  10. Dan the picture is looking more like deflation to me, pretty soon CBs, TBTF banks, Governments under increasing DEBT particularly US are more than likely going to hit the QE panic panic button en masse. More than likely wild swings in all markets coming ahead, Gold could spike towards $950 - $1000 but all markets will be in disarray. Deflation will crush western Governments and end the 100 year FIAT / Debt Ponzi, I doubt it will be allowed time will soon tell. Gold will ride this out better than most assets it is the ultimate anchor in Inflation and Deflation.

    ReplyDelete
    Replies
    1. rlm;

      I agree with you. The wild card is this emerging markets issue that is currently at the forefront of traders' minds. If this thing escalates, it is indeed deflationary because we are talking about slowing growth. Remember what we just learned from China last week when their manufacturing numbers were released.

      The whole thing comes down to the contest between Central Bank reflation efforts and deflationary impacts from currency/credit or debt issues. Sometimes it seems one side gets the advantage; other times we see the opposite.

      I worry that the huge amount of debt in the system is deflationary but so far the global and domestic economy has been able to shrug that off. Some of this is just pent up demand related to population growth and other factors at work.

      However, these period outbreaks of debt/currency related crises remind us that most of the problems have been plastered over without addressing the core or root.

      Either way, it makes things volatile.

      Delete
  11. @Dan,
    Here is the format of blog I was mentioning.
    (By the way, I recommend it to those of you who can read French).
    You can see the two sections, one classic as a blog with headlines with most recent ones on the top, plus a toolbar where the author can put more permanent topics that everyone can select.

    http://i58.tinypic.com/2cny1za.jpg

    As I see new posts again on this line about the manipulation of gold, it would be nice to have a toolbar with that section inside. Easy to find and access your analysis on the topic once and for all :)

    Btw, the second line of this blog "Cafebourse" was focusing on that topic.
    I'll try to briefly summarize his point on this subject :

    - a Bullion Bank, HSBC, manages the deposits of the largest gold ETF (GLD), which can be an instrument put in place to weigh sometimes on the price of gold. It is difficult for US Treasury to use its stock of gold to weigh on gold's price as it's probably leased out several times here and there. But to have under your influence a non allocated stock under HSBC's control allows to launch some suprise attacks (such as mid april 2013?) by opening huge selling positions on strategic technical levels.

    - if Bullion Banks were net short of 50% of opened positions earlier ("commercials" area), and commercial are now back only at 10%, it may simply mean that selling positions opened between 1500 and 1800 $ have been bought back at the current levels, with a huge profit : if you know that your ambush is going to work and weigh strong enough to move prices down, selling high to buy at lower price doesn't bring any risk.

    - all this is based on the tug of war between the dollar and gold (maintain dollar supremacy)

    And his conclusion :

    Bullion Banks and Hedge Funds are mere pawns in a chess game, used by ones and the others to move stealthily and unofficially. No, one can't bring a 100% evidence about that indeed. But it appears logical to think that in this war of supremacy between dollar and gold, important actors are doing their best to suppress gold's price continuously, and the pawns and moves are orchestrated by the Exchange Stabilization Fund, which is the trading desk of the american Treasury, with a wallet of more than 100 billion dollars. Neither Bullion Banks nor some informed Hedge Funds will refuse to participate to that game from the moment they can find their immediate interest : sell high and buy lower.

    Have a nice weekend all

    ReplyDelete
    Replies
    1. P.S : mistake in my "translation" from the meaning in French.

      " important actors are doing their best to suppress gold's price continuously"
      Forget "continuously".
      It was not in the original text.
      The author doesn't say there is a daily and constant manipulation, but that there has been (down) while prices were between 1800 and 1500 up to that moment when they sold 500 tols mid april 2013...and maybe at key levels after that, provided that BB were granted with the certainty to buy more and at a lower level than the one they were buying.

      Delete
  12. When will you return to your weekly KWN audio interviews ? Feels like about six weeks since Eric King has posted one.

    ReplyDelete
  13. We don't need KWN audio anymore.

    Dan provides enough insight right here at this site.

    By the way, those guys at KWN must be sweating bullets this weekend.

    As the horrific action of NEM is a signal that the mining industry is now at the "Breaking Point", where roughly half of the gold miners in the world end up heading towards bankruptcy and and going out of business.

    Meanwhile the paper pushing world on Wall Street simply gets bigger, better, and more adept at handling volatility of financial markets.

    With the derivatives market now in the quadrillions, there is a "Prop Bet" for virtually anything now, and fund managers are always able to hedge off against anything bad that can happen to their portfolios.

    Another fine example how Bernanke will go down as the greatest of all time.

    And now its up to Yellen not to screw it up.

    ReplyDelete
    Replies
    1. How did you hear about this site if not via KWN?

      Delete
    2. Mineset or KWN : it takes a lot of efforts to update this blog. So it would be nice if the few other websites which bring audience to this blog could keep doing so. I think they would do a great favor to all their members who would like to understand about shorter term view of price moves and how traders / investors have a different approach in managing their portfolios.
      Plus I liked the audio format.

      Delete
  14. I kind of like Dr. P.C.Robert's simplification of the choice that will have to be made soon by the US government and the FED:
    1. Let the banks fail to save the US$ (i.e. stop printing)
    2. Let the US$ fail to save the banks (i.e. increase the rate of printing)

    It's funny how we are on one side of the bargain and the banks are on the other, so it shouldn't be too hard to figure out which way will the FED go (hint: their masters are more important to them than the minions). However, collapse in the dollar is not to be taken lightly by anyone.
    However, they will avoid making this decision for as long as it's possible and they'll do "whatever it takes". So, the outcome is far from clear at this point as the situation is more complex than ever and it depends on multitudes of factors and future developments. That's why I'm extremely skeptical when someone comes out and boldly proclaims what is exactly going to happen (e.g. hyperinflation, deflationary collapse, war, etc.). we can't even figure out where a certain market will go the very next second, yet we attempt to foresee complex events years in advance.
    This is why I respect and enjoy Dan's commentaries, as he's never claimed that he owns the crystal ball or arrogantly stated that this or that will happen for sure. I guess it takes a certain dose of humbleness to be a good trader and also to give a good and beneficial outlook on the things.

    ReplyDelete
  15. http://www.zerohedge.com/news/2014-02-01/market-cornered-jpmorgan-owns-over-60-notional-all-gold-derivatives

    ReplyDelete
  16. I think these are serious times for the metals. Back in 2007 or 2008, when gold went from 980 to 690, I had no concern about it not taking out the high because all the selling was to raise cash as everything else was collapsing. That situation doesnt exist now. Stock market at record highs. The rich are fabulously wealthy. Silver spent decades at $5 before starting a massive run higher.So with the metals not caring at all about the debt, the level of interest rates, the incompetence of the clown in the white house, and all the rest, does anyone think there is a chance that this bear market in gold could last for as far as the eye can see?

    ReplyDelete
    Replies
    1. Yeah, that's the big danger of buying into bear markets...they could last a long time. But gold and silver failed to hit new highs during the 2001~2011 bull market (when adjusted for inflation) and gold did not enter a phase tradition. Also the bear markets for the PMs have been pretty aggressive. This bear market shouldn't last more than a couple more years at worst.

      Delete
  17. CA drought update. Cotton Grapes and Almonds for a few will be scarce from the Central Valley for this year and likely a couple more.

    ReplyDelete
    Replies
    1. Add Beef and Milk to that list. Any commodity grown there will be very short of water.

      Delete
    2. not true Mike; Cal Aquaduct system takes care of lots of issues; cattle case is true and so is milk, but others are debatable; sparks

      Delete
    3. California water politics is fun stuff---One of the biggest government projects in world history..Not only the Edmund G. Brown Aqueduct & system, which Sierra runoff to the Central Valley & So. California, but also the All American Canal, which brings water from the Colorado river to the Imperial Valley & San Diego. The Owens Valley project from whence The Chinatown movie gets its source, is a piffle.

      Add to the mix the Stewart & Lynda Resnick, Billionaires of FIJI Water, & Pom wonderful, etc. fame, who in the 1990s bought up hundreds of thousands of acres of oil lands in the Southwestern part of the Central Valley and hence the water rights. The Resnicks essentially controls the Kern County Water Bank (which fills aquifer -like structures with mountain runoff as sort of cisterns for later use).
      Among other things, the Resnicks get State water cheaply & can resell it at a premium. Another thing they have done is have supplanted cotton--which would seem to be a water thirsty crop--but really is not on a macro-scale because it is just not planted in drought years, with Almonds + Pistachios which require ample water year upon year, lest the trees die from drought..

      Delete
    4. Folks - My original post was prompted by the California State Water Project's announcement that it would deliver 0% (yes ZERO) of annual allocations to anyone south of the Sacramento River Delta.
      This comes just about one month after they announced greatly reduced allocations with preference for "established crops" - Almonds, Pistachios, Citrus, Pomegranates, grapes and etc.
      In the spirit of creative accounting they have agreed to deliver last years under receipts (water allocated but not used). But I would take delivery today if I expected to use it at all.

      In the last couple years on periodic commutes up and down Interstate 5 I have observed several large new orchards planted in the southern portion of the valley (plowed the desert scrub under to do it). A prophet has no respect in his own house but I did tell the wife that "Those people could be in trouble".

      The local farmers have been after "Boxer, Costa and Pelossi" for several years now. Allowing runaway building and diverting agg. water to lawns and toilets. Meanwhile delivering far less that the contracted 100% the farmers paid for. The state water project and the canal was built for the express purpose of irrigating the central valley.

      There are points on all sides of this issue but the dead trees alongside the road are truly horrific. The next step is to take water from Kern and LA county to supply those left without.

      California water politics are a never ending story. Water rights are valid only until some "servant of the people" decides they are not. Right up there with Colorado River water rights.

      I DON'T want a flame war here, just making some observations as a long time Californian and ex-farmer/rancher.

      Delete
  18. DAN - looks like the VIX is still up while gold and the DOW are looking weighted down - what is your experience here?
    Doesn't VIX normally move with gold, could this mean we might have a mini 2008 when everyone flocks to the dollar?

    ReplyDelete
  19. Hey Dan, have you noticed how strong the miners are? You have basket cases like Newmont but the complex as a whole is doing nicely. Gold miners led the bear market with gold following in tow...but l have a sneaky suspicion that the miners will rally before gold does (ie, their discount to the metal will narrow). 180p on the HUI must hold, but looking at the individual HUI components, their shares look strong. Even after reading about Newmont's news release, l dont understand the sell off - appears unjustified to me. Have a good Sunday and thanks for the ace blog.

    ReplyDelete
    Replies
    1. @John & @Mark -it seems odd that the mining equities didn't all take it on the chin w/ NEM Friday. The 'good' equities -- certainly RGLD-- have been doing very well. The dogs have given up ALL of their 2001-2011 bull market gains...NEM is trading around 21--a level last seen when there were Twin Towers in Manhattan. ABX had this moment already, KGC possibly (traded down to 2001-2 level).

      To your point Mark, it's sickening that the pundits who were touting miners as 'utilities' spitting out fat dividends three years ago just keep rolling on far fetched schemes, while their golden recommendations have become as ashes in the mouth of those that heeded their advice & held on.

      So the question I ask for the upcoming week when I look at DUST as a trading vehicle is, "has the market absorbed this and shrug it off the NEM news- like an incipient bull market might ?" Or has the hammer just not dropped yet. The case for the low is in side: The lowest HUI:GOLD ratio was about .155 in Dec. The lowest monthly in the 2000-1 bear bottom was .145 in OCT 2000-so probably close enough. There is analysis out there that argues that the miners bottom before gold, as well as top earlier (eg early 2011).

      On the down side, Silver & gold are sitting on support + copper has been in a free fall. So that broken support should be telling as well. Support for the miners may be because gold is sitting more or less at breakeven 'AISC' whatever that means around $1,200. A drop below this would pull the business argument from under the miners' feet. You could add to the fundamental argument against the miners is that their footprints largely in EM (all the EMS) make them vulnerable to even more nationalization etc. (that said, Argentina is quietly inviting back Repsol b/c they have no native drilling expertise)

      On top of that, DUST is a vehicle that both hindered by decay + popularity. At the June 27 low in the HUI of 208, DUST went to over 80. With the HUI around 212, DUST is 62% lower than June 27.

      Meanwhile I am doing some options trading on the broader market which has been far less frustrating.



      Delete
    2. Yeah, I noticed that DUST and NUGT are diverging. Shorting NUGT (instead of buying DUST) and shorting DUST (instead of buying NUGT) should be more profitable at this stage.

      Delete
  20. Is the tremor getting louder?

    - many forecast that the dollar will be the last to be impacted by the crisis, but will dramatically crumble when it gets its. Periphery will be hit first, then ultimately the dollar will collapse. Is this what we are witnessing with Venezuelian, Argentian, Turkish currencies and now with Russian ruble, romanian currency already?
    - meanwhile, 3 more "bankers" jumped from the window or hanged themselves last week.
    - Broncos lost...why do I support this team anyway :)

    ReplyDelete
  21. Report from Fargo ND this am that virus is killing three million pigs. More commodity price increases?

    ReplyDelete
    Replies
    1. Wall Street Adage: Bulls make money; bears make money but pigs get slaughtered.

      Delete
  22. Well, well...at last a good day for PMs and bad for SP...flirting with 1770 and I'm short again there, of course, as long as the bears seem to be willing to work and break through that level.

    Also, EUR/USD is doing ping pong between Fibo retracement levels, and the key fibo was 1.3487 if I remember correctly...once more we are bouncing right on it, which could mean that the dollar is reversing into a weakening phase once more vs EUR (which is a big component of USDIndex currencies), and if dollar weakens, gold may go up some more.

    I was close to losing my positions both on silver (just under 19.00) and gold (just under 1240) but they held so I'm still in the train.

    ReplyDelete
  23. Hubert, I dont want you to be just alive on the train, I want you to be the conductor.

    ReplyDelete
  24. Hubert I sold 3/5's of position at 1265, had to take the big gain. Nice short on SP. I almost did a quick trade at 176 looking for 175. I got it but didn't pull the trigger. Still learning this paper game. Hold last gold paper to the 1270's. I think it has another attack on 1280 in it.

    Arnie, I think Dan is the conductor :).

    ReplyDelete
    Replies
    1. yes Arnie, personally, I'm only trying to stay alive / make a small profit taking my time for it...I'm not living from it for sure, neither am I a real trader or a pro, just an amateur who learnt a few things on the way, thanks to real traders.

      1268 once more resistance on gold, and no trend imho as long as it's not broken...just a small range short-term, but more importantly the weekly time unit downwards resistance (along with ma20) is here, and won't be broken.
      Another one day "wonder" on PMs?
      Maybe we'll go right back to and through 19 on silver and 1240 on gold by tomorrow.
      Anyhow, I'm not playing ping pong within a 20 $ range so often, so, 1268 or not, I pass and wait to see what happens next.

      On SP, the longer chart is more "fun" to me.
      If we close this week under 1280, and even more under 1270, it will mean we broke an upwards support. For sure this is not the end of the week yet...only monday, so...patience. But there is a risk of contamination to this weekly time unit, i.e a real big fast correction (at least 1700, and then much lower, using Fibo retracement levels), so I'm just gambling a little money on it for fun. But I'd like Mark to tell us if/when he will get out from stock market.

      Delete
    2. Edit : of course for SP, levels are 1780 and 1770, not 1280 and 1270...got mixed up with gold, speaking of both in the same post :)

      Delete
  25. Hubert gets a demotion to chief engineer

    ReplyDelete
  26. So now everyone knows that the weekly resistance in gold comes in around 1270 or so. Every bull and bear in the world knows this. So the battle lines are drawn. The bulls have enough power to have taken gold from 500 to 1900, and now from 1180 to 1270. So if everything written and said on KWN is correct, taking out 1270 and even 1530 should be a piece of cake. So Hubert, make this a big trade. For those of us who rode gold from 550 to 1900, it was life changing. And maybe this can be your life changing trade.

    ReplyDelete
    Replies
    1. Arnie,

      "if everything written and said on KWN is correct"

      There's one colossal IF in your sentence.

      Delete
    2. - one single trade that would change my life is not trading, it's russian roulette :) Trading must be many small trades and on the long run you win more than you lose. Patience is key. Greed is the enemy. I recommend to noone to consider trading as the seeking of the life changing trade...it will change your life for sure, but not the way you think, you will be a broke trader in no time :)

      - 1270 is still a resistance, so it's not yet broken...

      Delete
    3. @Hubert du Haut. Bien dicho. Miners are sucking wind today & gold has yet to break up or down. There are better trades in the broader markets. And as an homage to @Mark: Wow - JO (coffee etf) up 20% in the past five days even markets krach. Big money is clinging ultra safe long bonds (TLT) up six percent on the year even as the MOMO crowd gets burned by drone delivery man Jeff Bezos.

      Delete
  27. One never knows when a small trade can turn into a big one. One looks at the overall situation and sees what is possible. The US has about an 18 trillion debt. Its not a matter of it now being sustainable, its how it can ever be paid back or even reduced. Default is not an option. But inflation is. So if and when it starts, the potential is there for a big trade. I didnt know that gold would go to 1900, but it had the potential. So what started out as a somewhat small trade turned into a monster. So just keep a lot of stuff in mind, its not greed, but it could be very big. And I do know that there are still a lot of ifs out there. But at least 10 years of uncontrolled government spending can turn a lot of the ifs into reality.

    ReplyDelete
    Replies
    1. yes, arnie, big trade why not. I was twitching on "life changing" which would mean I'd have to bet big time on one trade, i.e put at risk a large part of my trading capital if I get it wrong, and I don't like to do that.
      "Small ball" is the way I play trading :), because my time horizon is not very long. I like to be quickly in / quickly out for the first 1/3 of my position, securing a no loss trade. Boring, but I like to ensure that I will suffer no loss from a trade as soon as possible. Then usually if the trend keeps going the right way, I can let the last 1/3 go quite far, far away from my entry point. But it doesn't happen very often. Maybe 10% of the time (but a real trader would most probably get a better result).
      As an investor, be sure that I'm quite invested in physical gold, so I'd benefit from a surge in price. But I rather see it as an insurance than as a trade or a bet.

      Delete
  28. Abraxas, Yes I do agree about the colossal IF, so I will amend my statement. Most stuff said there is pretty wild, and I guess entertaining. So I will say if only 2% of what is said there is correct.........That should limit the field down to about 2 sentences.

    ReplyDelete
    Replies
    1. Agreed. If 2% of what is said there is true, we are in a big pickle.
      I hope they are wrong though, for the sake of my descendants.

      Delete
  29. We are treading where no generation has ever treaded before except in War times, then, at least their were lots of War jobs. Total Nominal Debt around the world is also frightening. The United States should be in Bankruptcy. But, since the rest of the world is broke as well, our dollar continues to hold. .for now. Lets see if this EM explosion continues, then, will the almighty $ get the benefit, or, will the fighting over the budget play in some. Might just be a great time to short the market and go long gold. I am thinking silver is going down with the market. If Oil does not come back to earth then we will see a great disappearance of capital via the US stock market and the Stagflation flags will be readable to all including the MarketWatches, Yahoo Finances, MSN Business, etc. Will the carnage continue, how long till a megaphone props up in the Yellen Zone. Mark is busy BTFD, and praying they do not become Canyons. Grand Canyons.

    ReplyDelete
  30. FYI, out 1/3 of my short trade SP500 at 1742.
    Now whatever happens, can't lose on this trade anymore.
    My stop loss is under 1800.
    Next target 1700 for the second 1/3.

    ReplyDelete
  31. "Gold is often cited as a good hedge against inflation, but it would be more accurate to state that gold is a hedge against a devaluation."
    - from jsmineset

    I agree. Gold bashers are watching the prices going down and laughing about the so called "insurance" represented by gold as a hedge against "inflation".
    Gold is a hedge about many systemic risks, not only inflation, but also a sudden over-a-weekend currency devaluation vs Gold (for example for the Fed to be able to rebalance its current balance sheet...).
    So maybe those who don't hold gold will just wake up one monday morning to realize that gold's new price is suddenly 3000 $.
    I think they would do it that way.

    It's better for them, because that way you know when you are going to make a move, and no other parasits (I mean the average people, middle class, us guys) will participate to the rallye.
    That's why I keep holding some physical gold in my portfolio.

    ReplyDelete
  32. More mining madness:
    Silver Standard buys the Marigold mine in Nevada which according to partial owner ABX, has an all in sustaining cost of $1609/oz? Diversification into another unprofitable mine?

    ReplyDelete
    Replies
    1. MDLGTO,
      SSRI sat on 400 mil cash and were probably looking for a long time to diversify location-wise and product-wise. GoldCorp is selling it's part because of their acquiring Osisko and Barrick needs to lower their debt. SS probably sees prices going up mid to long term and they still have lots of cash, so it might be a good buy. I'm not sure about the timing though because fundamentals mean nothing as we all know.

      Delete
    2. Abraxas (great name--reminds me of way back when I read Demian as a pup). SSRI's purchase is another indicator (like GG purchase of OSK.to) of a hole in the short-the-miner juggernaut. You can moot whether or not the purchase is good for SSRI or good for ABX-GG, but instead of careening down the toilet, share priced recovered yesterday and is up 8% this morning. Not the slam dunk short parasites (bow to you HdH) thought it was.

      Delete
    3. Yeah, Hesse was one of my favorites (try Steppenwolf if you haven't read it yet).
      Thanks for pointing out the action in SSRI. It seems that the early crowd didn't like the purchase, but then some of them though better of it and bought it back, which was enough to scare some shorts... Perhaps I'm trying to rationalize the price swings where the reasons are unfathomable.

      Delete
  33. GOLD.

    - Daily time unit.

    Neutral, range between 1240 and 1277, which are exactly the 23% and 38% fibonacci retracement levels of the last down wave (1433-1180)...so I like fibonacci :) because they help me make simple decision making :
    ° if we break 1277 up, I know my next target is likely going to be the 50% level at 1307
    ° if we break 1240, this is...quite bad for the bulls.

    - Weekly time unit.

    Still under the ma20 which is heading...down :( no, PMs are not out of the woods at all. Same for silver, no strength :( The supports are still in danger.

    ReplyDelete
  34. The mining shares are starting to show signs of activity:

    Mining Stocks Start To Rise

    ReplyDelete
  35. whatever happened to Preditor1976?

    ReplyDelete
  36. sins of omission once again @kwn; if Livermore was so great, why did he blow his brains out in the men's room of a saloon? just wondering in sparks

    ReplyDelete
    Replies
    1. steve;

      I agree completely with you. The idea that Livermore would somehow be held up as a role model for traders is insulting to those of us who do this for a living and take pride in being professionals.

      Sure he made some big money but what is not told often enough ( and this is despicable because it totally distorts what the truth is) is that he lost most of his money by being on the wrong side of the market later in his career and was too cowardly to face life so he took his own.

      And to think that this is a role model. I find that disgusting.

      Delete
    2. Steve,
      Good point. I was surprised that Eric is now interviewing the dead people. Next thing, it will be the Martians telling us about shocking events and stunning developments.

      Delete
  37. There are about 7 "acclaimed experts" now predicting "Total Imminent Collapse", worse than 2008.

    Pony tailed Marc Faber also jumping into the fray with his usual dire predictions.

    Bears are out just about everywhere.

    This is about the time to see a Doug Noland - style "Rip Your Face Off Rally' commencing any minute.

    ReplyDelete
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