"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


Friday, March 14, 2014

Hedge Fund Short Covering in Gold is the Story

This story simply will not die as it keep happening - hedge funds continue to cover short positions to an extent far surpassing the amount of fresh, new buying that they are doing.

Last week they covered ( closed out) 4,675 short positions. This week they outdid themselves as they covered a whopping 5,248 shorts made up of both futures and option positions! On the long side, they actually reduced their exposure by some 482 contracts. It is too bad that we cannot see what occurred from Wednesday through Friday. My view is that today's strong rally through overhead chart resistance further cleaned out some more of their short positions in a big way.

Let's again put this in perspective - at the start of this year, the hedgies were sitting with a total of 72,571 outright short positions, futures and options combined. As of this past Tuesday, that number has shrunk to a mere 21,073 or a reduction of  51,498 shorts.

Over this same period, the number of outright longs has increased from 106,675 to its current number of 144,080, for an increase of 37,405 futures and options positions.

Again, the clear driver for gold this year has thus far been short covering as the dominant feature among the biggest specs on the planet.

My own personal view is that the hedge funds seem to be reluctant to get too aggressive on gold from the long side. Perhaps some do not trust a rally predicated on a geopolitical event. Either way, in looking at the chart, I am of the view that it will take a push through that spike high near $1425 to get them to really commit in size to the gold market. That is a big level to watch, if we can get there.

What I mean by that is where we need to see some critical chart resistance level give way in a very convincingly manner to convince the doubters and skeptics to come on into the water and get completely wet. There are still many who are content just dipping their toes in. Translation - we need to  see far more new, fresh buying outnumbering the number of shorts getting squeezed out.

You must have more than short covering to SUSTAIN A STRONG BULLISH TREND. As I have said before, all good bull moves begin with short covering but, and it is important to note and understand this, they cannot sustain themselves solely on buying by frustrated or nervous bears; they must have fresh blood.

There is an old saying among we traders - "A bull market requires fresh food every day to feed it". By that I mean one needs to give NEW REASONS for longs to get aggressive and remain brimming with confidence over their existing positions to where they are eager to add on and pyramid up. Short covering does not result in that. That merely provides a burst of fuel that drives the price higher but then fizzles out, sometimes as fast as it began. One has to see sustained waves of buying continue to come into a market to KEEP if defying gravity.

By the way, that certain web site that loves to plagiarize what it finds here, please note that we are watching you so if this shows up on your web site or any of your publications, without attribution to the source, it will be duly noted.

Here is a chart only of hedge fund activity at the Comex gold market. Look at that plunge in short positions. That is what happens when a geopolitical events catches some traders off guard. The damage inflicted can and will occur very quickly and without much, if any, warning, leaving a mad scramble to exit existing positions.

I find it very interesting to also note that once again, this week, these same hedge funds were busy plowing into the SHORT SIDE of the copper market in large size. They piled on 4,618 new shorts while simultaneously dumping 3,288 existing longs. They are now NET SHORT copper to the tune of nearly 10,500 contracts.
As was the same case as with last week, every major category of traders is NET SHORT in copper, with the exception of the Swap Dealers who are holding the entirety of the long side in this market. The small traders, the general public, are also short.

Copper managed to close a bit higher today but after plunging a massive $0.18/lb this week, a bit of a profit taking bounce to head into the weekend is not unexpected.

I therefore find it no coincidence that this week was marked by strong selling in the hedge fund community of the Silver market. A total of 1,939 new shorts were added while 414 longs were dumped. They are still net long the market but have evidently been more inclined to follow copper this week rather than gold. Silver, as always can never seem to quite make up its mind what kind of metal it wants to be on any given day, an industrial metal or a precious metal. Just flip a coin as you can pick either one with about as much success as you can in predicting mountain weather.

We have the market setups - now we wait to see how events in the Crimea will unfold over the weekend. Based on the late-in-the-day price action in gold and in the US equity markets, there remains a great deal of nervousness around.


  1. Dan, you are on Fire today! Thanks for the great analysis...

    1. Boob;

      I had a bit of a reprieve in some market action today after an extremely hectic and busy week trading and thus had some time to scribble down a few things. Glad you enjoyed them.

    2. Dan, if you wrote a book on trading I would buy several copies. Have you ever put out a book on trading or thought of doing one? I have considered taking much of the free advice you have written in this blog and condensing it into a file but don't have the time. Anyway, the wisdom you put out on this game is priceless imo.

  2. I think you're conflicted by feelings of missing out. Most gold shares have doubled since I've been reading your blog which has always suggested not to get involved in gold.

    1. Jeremy;

      Always nice to have a resident shrink on the blog who can read one's mind and intuitively, with great keenness, so accurately decipher my innermost phobias and misgivings. Please send me a forwarding address that I might render payment for such an all-inclusive service.

      Please do come back however once you learn to properly interpret support and resistance levels and how traders respond to those levels being broken. I am always amazed at what some neophytes think I may or may not be doing in the markets.

      If you wish me to publish my private trades, please issue me a refund of the bill for your psychoanalysis and include a sufficient sum for a subscription to my own private newsletter.

      In the meantime, have a pleasant weekend. I must however sit and mourn in despair that I have had no opportunities in the futures markets whatsoever and am therefore pining away as I wait for further help from the fans of this site to pick me up out of the doldrums.

      Seriously, thanks for a good laugh.

    2. lool. Thanks for the great language stuff :)
      I want many jeremys just for the answers...

      Seriously jeremy, It's too late where I live to go search for it, but I clearly remember Dan writing that as lons as the bull flow ketp going, we could go with the flow, only be ready to get out of position quickly if things stop, because they could reverse quickly because of this lack of long buying.
      I mean, I remember clearly reading this when gold was hardly at 1300 $.
      So are you sure you can understand objectively what you read, or do you miss some sentences, or misinterpret some things by reading too fast?
      I'm asking not out of disrespect, but because I witnessed so many people totally unable to simply even read and fully understand someone's post, and interpreting it the way they wanted.
      Anyhow, it seems to me that Dan's position was clearly long gold for some time now, with a message of "be careful as the wind may reverse without warning" in the lines. If you doubt that, I can make the effort to go get the exact paragraph for you tomorrow.

    3. anyway Dan, get used to it : if you are not a permabull, then you must be...a permabear. What else? :)

    4. I hit a nerve with a few of you. Apologies, it was a tad rough... I appreciate people like TD putting their TA on the line. I have done so myself on local forums. Not a gold permabull at all, just think it's been a relatively easy bet since late December. I bought into gold miners again for the first time in years a few months back due to their highly leveraged returns on POG moves... so since trading these stocks I've started reading many others TA offerings. It's great to read conflicting views, and especially with some back up.Which is why I read TD's posts. My cynical snipe was rough, however posting your thoughts online puts yourself up for a bit of harmless cynicism. Since reading Trader Dan Blog in January, I have only read Dan suggesting "bears are in control", "gold melts up up" , "short covering" etc.. overall TD is suspicious about this gold rally. Although I have played a conservative hand in gold miners I have made 40% in three months. Should have been more since most of them doubled, but I play safe and sell at resistance levels along the way until broken... What I find interesting is that TD seems to still resist this likely bigger to come move in gold and suggest it's potentially short lived when I feel the gold and gold related charts all look very strong. My thoughts from reading previous posts that TD potentially missed alot of good gains available which was my point.

  3. "Silver, as always can never seem to quite make up its mind what kind of metal it wants to be on any given day, an industrial metal or a precious metal. Just flip a coin as you can pick either one with about as much success as you can in predicting mountain weather."

    Dan, should we understand that you don't trade silver, but rather gold and copper? :)

    Thanks for sharing all of this with everyone. It's really very useful!
    Regarding not knowing yet if the gold market will be sustainable or not, and waiting to see if short covering will be replaced by long buying, that's why I prefer personally to pull the trigger early and be an early contrarian. Because the time you get your answer, well, prices will already be well gone up, and it will sometimes be difficult to put a close stop loss in the trend. I'm not trying especially to do bottom picking, but I like to try to buy a potential reversal early if the loss is small if I'm wrong. I tried to buy gold when we broke through the ma20 around 1220, and it was still way inside the bear trend. Lots of shaking especially at beginning, but at least I could be part of the move up. I don't know if it's the right technique or if it would be wiser to stay on the sidelines to have confirmation of the bullish trend later on. I feel safer that way because if I'm right, my entry level is quickly out of trouble while the market keeps going up further, and I can keep some of my positions for quite a while. So, most of my trades are "contrarian", trying to pick a reversal on a potential support or resistance and bet on a trend change early, rather than following the main trend. I don't know how you trade and how you deal with those tactics, but it would be great to see you do it realtime :)
    Have a great weekend,

    1. Hubert;

      You have the exact right ideas my friend. You keep your risk small by entering small positions while the primary trend is still unclear but the technicals on a short term basis favor getting long or getting short. Then you watch to see how the market responds at these key chart points. If price keeps moving higher, you are in good shape and can add to the position. If the market stalls, act accordingly and wait for another entry point.

      I do not give exact trading entries and exits here first because I am not going to give any private info away, certainly not for free, but mainly because I am attempting to teach others how to read charts and gauge sentiment.

      If one wants to have a very short term orientation to any market so that they can daytrade it, there is nothing wrong with that. I will move into and out of various markets using a strategy such as that at times (depends on the market).

      Most of the people who deal with gold are not traders - they are longer term oriented folks who have bought the miners or bullion and, depending on which sensationalist gold web site they read, are waiting for the next inevitable moon shot. I try to bring what I think is some semblance of sanity to the far-too-numerous hucksters who infest the gold community.

      The way I try to do this is to present both short term, intermediate term and longer term charts to provide perspective. Some like that (most of the those who regularly read and post at this site do); some cannot understand why I view gold as an asset class that is sometimes in favor with the investment crowd and sometimes not. for that, because I am not permanently bullish, I get the "honor" of being reviled at times. That's okay because their opinions do not affect my trading in the least.

      too many gold bugs have their entire life revolve around a bar of yellow metal. That is an enormous tragedy and waste if you ask me. There are lots of other markets out there to trade. Personally I love trading the ag markets because they make sense to me although at times I will admit that the hedge fund computers do some very weird things in them.

      Have a great weekend bon ami!

  4. Jeremy, Dan does not give advice, he graciously, without charge, gives the best darn charting, technical analysis, and information on many impacting currency, treasury bond market, supply and demand issues. He is not here to take your hand and tell you what to do. I think your tone and sarcastic insinuation is childish.

  5. you are spot on in your analysis , at this point i don't trust anybody . I just hope that if the Ukraine premium vanishes , that it holds 1320 . What is in your opinion the premium for all its going on in the Ukraine ? Dan … I read your blog regularly because its completely neutral … gold is a beast, there are so many variables , and yet you pretty much give a very objective view … ride the beast , but respect it . Other ways it will take your soul away before you can blink .. you are chief Brody man … don't get in the water , and if you do swim close to the beach , and if you want to go off shore , take a BIG boat … haha . Good week end all .

  6. I worry about the war premium too. I think that's most of the recent gains and I really don't see war over what's a done deal for Crimea. even if gold does break what should be a key point, say1425, it won't be normal action and probably won't hold as war fear goes away. or the US could throw a hissy fit and start some stupid economic sanctions that lead to a tit for tat response and throw everything out of kilter. so which way to play? I think the war premium recedes.

    1. As we know here those both men and newsletters, I'll try to summarize the way I understood two points of view, which are worth noticing and taking into account, as after all, not so many of us have their "international experience".
      Plus, the fact that they disagree shows that noone holds the truth.

      - Martin Armstrong : Maidan's revolution at Kiev is...a revolution, even if it is supported by agents of the west, it is a grass root movement. All the government's agitation for now is "much ado about nothing" as they must answer to the "we must do something" community without possibily being able to do anything about it.

      - Paul Craig Roberts : some people (neocons) are crazy enough to want to start WW III. They were here during the cold war, under Kennedy, under Reagan, and they are here now, waiting for the occasion to start a preemptive first strike against Russia. This gesticulation is the beginning of a probably unstoppable chain of events that will lead us to WW III soon.

      Truth is, I don't see anyone for now trying to calm down things, and that makes me clearly nervous. If each side puts the other one in a corner with loud public threats and declarations, this whole thing could degenerate, maybe not just in one day, but in a matter of months, which is nothing.
      I don't want to be superstitious, but phonetically, if you repeat several times the word Ukraine, or the words Nuke Rain, it is exactly the same :)
      Better be over careful than too careless about this whole thing.
      If the people are conditoned for war, then the chance is there that WW III starts, however remote you may consider they can be. History can provide you with and endless list of totally absurd conflicts. Most of them started because of imperialism or economic deterioration. Why would this time be different? Don't be paranoid. But don't be careless either. Our own governments are the worst threat against worldwide peace, it seems.

  7. A lot to worry about right now for all investors. I too believe there is a fear premium. War(s) abound. Middle East, Ukraine, Africa. Internal strife in Europe, Middle East, Greece, Italy, .....
    Add to that the huge money printing, QE OR NOT TO QE? Deficits, currency problems. Potential oil issues. Ukraine comes out of nowhere and finally GOLD responds.
    Personally I was small added some and don't think Ukraine disappears quickly. Another opinion is that with all the issues out there, the boat has already been taking on some water, and captain Kirk has been screaming at Scotty to give her more juice, but just like the Enterprise, Scotty screams back lm giving her all I can Captain. Will we escape all these factors? Let's pray we can.

    1. When economy cannot be revived via QE a big war is required to distort the blame by diverting attention to emergency survival.

      All these wars are purposely created.

      But none of theses wars are achievable. Because human consciousness has evolved and very well know the reality and intentions of these goons.

      And in case they do get their world war then too Gold will rise as safe haven. In case they don't achieve war then economic collapse will push Gold up as safe haven.

      Did anyone notice that past few months of safe haven buying has not helped the Dollar rise, when USTreasuries are supposed to be the ultimate safe haven.

      I suspect that Gold's buying is resulting mainly due to the Dollar's final plunge as Tapering cannot continue much longer and Printing more Dollars also has failed to rescue Velocity of Money (Economic Activity).

      Copper's & Iron Ore Plunge is telling us the reality of Global Economic Activity.

    2. Shark;

      I must admit that I am very curious as to upon empirical evidence do you base your theory that economic collapse will push gold up as a safe haven? Define economic collapse...

      Are you equating that with deflationary waves? If so, then the events of 2008 would suggest you are incorrect.

      If you mean an implosion of the world monetary system, that is a different story.

      I would beg to differ with you however on your take on copper and iron ore plunge in price. I would say that it is evidence not of a economic collapse ( please define this for us however) but rather of a wave of deflationary pressures. That pushed all commodity prices lower ( as well as equity prices) and shoved gold lower, not higher. ( please do not tell us that it was only because the price was manipulated).

      It was not until the QE came out, that gold as well as the rest of the commodity world, and equities, moved higher.

      On the lack of the Dollar's safe haven of late - I posted that Custodial account chart for a reason. There is certainly something at work here because in 2008 the Dollar was the go to currency.

      There has been some chatter that the Russians are selling US Treasuries as part of an economic warfare plan but I cannot bring myself to subscribe to that theory just yet.

      I thnk it is more a reflection of slowing growth across China and the East which means less economic activity and therefore smaller trade surpluses for many of those nations and thus less need for Treasuries to sterilize that. I could be wrong with that and it could be something as simple as Russian unloading but that just seems premature.

      The dollar is perched right above a pretty significant level of chart support. If it fails here, then gold goes higher. If it holds and begins to garner support, especially against the Euro, then gold moves lower. Which scenario will we get? I don't know... how about that for an honest answer! Guess what, no one else does either. Roll the dice, flip a coin and you have the exact same odds of getting it right.

  8. Dan,
    Thanks for sharing your hard work with the little guys like us. I've been watching the markets and reading the various PM blogs for several years now and it seems that you and Martin Armstrong are the only people on the planet not blinded by Dogma. You are a good person for sure brother!

    1. john taylor;

      many thanks for those kind words John.
      I have been kicked around, bloodied, beaten and left half for head at times over the course of my trading career and I can tell you that it leaves one a bit less dogmatic when declaring where markets MUST go and what they MUST do. That is small consolation when the market that MUST go lower, proceeds to melt up while you are short or the market that just has to go HIGHER, proceeds to implode while you are long.

      Let this happen to you enough, and eventually, if you are still around, you learn to stop arguing with markets or blaming it on conspiracies or whatever, and just swallow your opinion and go with the flow of the money.

      We human beings are an odd lot - in the wild, if an animal gets injured or hurt in any way and survives, it learns to avoid that in the future. We do the exact opposite it seems. We rush right back to the same thing and expect a different outcome.

      This is why I have tried to tell folks to just listen to what the market is saying. If you do not understand it, you don't have to trade it but do not fight it!

  9. Dan,

    Appreciate you sharing your thoughts as always. Really like that chart of outright longs and shorts of the gold market, would be perfect if you could plot the GC price as well to visualize everything in the same picture.

    The outright hedge fund shorts number has gotten really small, although the small specs still have a good bunch short it seems... maybe they are not that dumb of a money after all if they're still holding, they probably shorted at much higher prices.

    But still, having that much long-short disparity for the funds makes it very easy for the price to crash.


    1. Jesse Livermore;

      I will see what I can do about getting the gold price incorporated into that chart. I think I can do it but it might take me a while to get it done. I agree with you that it would be a good addition visually.

      Looking over the small specs they had their largest net long position in gold ( for this year) a couple of weeks ago when the number stood at 8509 ( NET LONG). This week they are at 5,846.

      They have added about 4300 new shorts since a couple of weeks ago against about 1600 net longs so they are seemingly moving more towards shorting gold although the overall positioning remains net long.

      The way I see it for now, gold is completely going to be at the mercy of events on the ground in Ukraine. Who knows how that is going to play out? If it escalates, the metal is going higher; if tensions cool, then it will drop, probably rather sharply if the majority are convinced that it is a one off event and not the start of something larger or more widespread in the region.

      I am like Hubert in the sense that I never put it past stupid, blundering and blustering political leaders to drag a nation into war..

      I just wish we would leave Russia alone and worry about what is happening to our own country, which is being systematically gutted from within.

  10. hmmmm....I did not think we needed world war three sunday night to be involved so I may get a rude awakening but.....im all in

  11. "But none of theses wars are achievable. Because human consciousness has evolved and very well know the reality and intentions of these goons. "
    @Shark Krishna, I think you are an optimist.

    Human consciousness has imho evolved to nowhere.
    Sorry to be the acid pessimist on this blog.
    But have you been to Ukraine?
    Have you even simply seens the videos of the mobs at Donetsk yesterday, the face of those demonstrators hitting at each other?
    Except from a minority of "enlightened" people, I have the opposite feeling than yours.
    I have the feeling that the worst of Huxley's nightmares may come true.
    Yes, we have the web, and many communication tools to keep ourselves informed.
    And what is the result?
    Have you watched Facebook and seen what usual people are talking about?

    Most people are more and more stupid, they care about nothing except their own little private garden, and they have a tendancy to aggressivity and violence. More and more stupid because they are completely losing their ability to think on their own. To criticize, to anayze and to make up their own mind alone, out of repeating some BS they just heard on TV.

    My 3 days stuck at the airport zone of Kiev last september told me what to think about the authorities there, and most people.
    Most French don't even realize how they merely swallow any propaganda sent to them by MSM, without any critical mind anymore.
    If they get a bit angry, media send them 2 weeks of the latest news about their president and one of his mistresses. It's a shame, but that's what it is. Would you think people would comment about real problems? No, on FB they will comment about Julie Gayet and Valerie Trierweiller for 2 weeks.

    Conditioning people for a war is a simple question of time.
    A few months will be enough.
    And they will push their government to wage war to defend freedom against tyranny and the new Hitler.

    One more thing, Putin is a strategist.
    Some wrote here that it would be unbelievable that Russia dumps its US bonds in dollars, as it would hurt them.
    I think they've been preparing for this for a long time now.
    Yes they will get hurt. But so will US and Europe.
    In a war, collateral damage is sometimes necessary.
    It's about how much are you ready to take, and how much damage are you going to inflict to your enemy that way.

    Russia imho is perfectly ready to launch a full scale economic war back to Warshington and Europe if we provoke them too far. Maybe the markets are not pricing this possibility yet?
    Make no mistake : if we start launching real serious economic sanctions against Russia, this will be a WAR. Not military at first, for sure, let's hope. But economic? Certainly. And it will be a full scale one, with no mercy. Because it's a question of survival of Russia and its critical economic interests.
    I might sound a bit too much like KWN, but that's my point of view about the potential danger of this whole damn crisis.
    Ukraine is not another "unimportant" middle east country. It is the heart of Russia's interests. We are crazy to challenge them there. If we do, and if we are not crazy, then the purpose and the expected result make me freak.

    1. One more thing : russians are passoniate people.
      If I should use one or two adjectives to define generally a people, like cynical, lazy, whatever, one of my top choices for russians would be passionate.
      If russians become passionate about Crimea, they will stand behind their leader and accept a lot of sanctions without a blink. All we'll get from that is more determination from them (heard about Leningrad being besieged during WW II?).
      And I'm sure about the passion about this subject in general, because it's about their country, their language, their culture, and it definitely means something to them. Russia has not become a multicultural mix of many immigrants coming from all other the world to share a kind of dream. Russians have a soul deeply rooted in their traditions and culture. And I'm not at all saying it's only for the best, I mean, many of their are indeed quite racist, anti semite, homophobic, so don't make me wrong, I'm not defending russians by saying they are flawless, all I'm saying is they are passionate, and they will unite with more sanctions, not divide like in Iran againts their own government.
      If stupid US government thinks that sanctions will have an effect to destabilize population against their leader just like in Iran or maybe Venezuela, they are dead wrong.
      Just look how those guys are singing for 2 minutes and understand what Russia means to them.
      They won't back off.


    2. Hubert, your spot on. People are dumber now an they ever have been. Technology and being able to live life through social media has wrecked our society. A big war would not surprise me, because like you said, no one pays attention to any of this stuff anymore. As long as people can live on Facebook and ignore reality we will have more of the same. I am of the opinion that we need a wake up call to wake people the **** up. I think if gas was going for $8/gallon over here that would finally start to get people's attention. Until something like that happens, people will continue to live in their own little la la lands.

    3. Hubert,

      You hit the nail on the head! I personally think we are dealing with two Narcissists here with Putin and Obama, but Putin's sphere of Influence has been invaded by Western forces (perception). All news outlets push their points of view to get the reader to LEAN in their direction. The truth is the biggest victim here so I say we all need to take a good look at what we believe in and why. When you stand on a solid foundation, you can handle anything. Lean not unto your own understanding I read somewhere ;) !!!!

      I personally believe this will propel gold up (I bought 400 KGC $12 2015 calls for under $1800) just in case. Money, I am ok to part with if it doesn't happen as I am a gambler and understand my risk/reward. I personally don't think gold at $2000 implies things are a catastrophic mess so I will root for that. Gold at $10,000 in the near term does, IMHO so that is something I DO NOT WANT TO SEE (unless it is the result of our going to gold standard, which I doubt we will as it takes total control out of the bankers hands).

      In order to get a decent objective view on Ukraine, I look at Western media as well as RT, Pravda, BBC, etc. Then I TRY to see the truth through the BS. I deleted my Facebook account (inactivated) because there is little to NOTHING good about FB. I know so many people that take all the FUN pictures of themselves and talk about how great their lives are on FB. And personally they are miserable, overly medicated, train wrecks. FB is a surrogate life for a lot of people so they can project a different image from their real lives...sad.

      Thankfully, there are sites like Trader Dan's that allow us to discuss these topics with somewhat intelligent minds. I'm just sorry I have little to nothing to add when it comes to trading as I am a much longer term oriented (1-3 years or longer) person. So, THANKS to you, DAN!

    4. Nate;

      I sure think you have that Facebook thing correct. It sort of goes along with the proliferation of REality TV shows if you ask me but then again, I am old-fashioned and actually have hobbies and a life of my own so that I feel no need to life vicariously through someone else.

      That, by the way, was a good partial quote of Proverbs!

      By the way, let's hope your gold trade is profitable. If it is, it is an unwritten rule at this blog that you MUST buy an island in the S. Pacific, ( you can call it Nateville) and then invite all the regular posters here to come and live there. There can be no capital gains taxes allowed. Also, I get first dibs on the piece of property with the best view as long as I get beach access!

    5. Hubert;

      I sincerely enjoy your perspective as a French citizen of events and peoples closer your way. Thanks for sharing....

    6. No income tax either (I'm a FAIR TAX guy)... But I think KGC would have to hit like $500 (from $5.17) before JAN for me to buy one, because Uncle Sam will take a lot of it... so I don't think an island is in my future!

  12. Quoting from your Friday missive :
    " By the way, that certain web site that loves to plagiarize what it finds here, please note that we are watching you so if this shows up on your web site or any of your publications, without attribution to the source, it will be duly noted."

    I am fearless and assume that you are referring to the " Money and Markets" publications from Weiss Research. Their chief guru on Precious Metals was calling for Gold to fall down,close to $1000 by 4Q of 2013, then he pushed the doomsday scenario out to Jan of this year and when that failed, his latest prediction is May of this year. He also claimed in Feb that Gold would find it very difficult to close above $1361 on a weekly basis; wrong again.

    He issued buy signals last year on KGC and SA at the TOP and panicked and issued sells right at the bottom !!


    1. That's OK, wolf, because nowadays in our modern world, some newsletter writters with a massive subscription fee adopt the same strategy.
      For gold, they call a bottom at 1500.
      Then for sure the call a bottom at 1320.
      Then really for sure this time they call a bottom at 1180.

      When markets start to go up, they become gurus because everyone is saying about them : look, this guy made the call at 1180! He is incredible! He was right!
      This is so dishonest because of course it attracts newcomers who didn't make their research and won't spend weeks to check if it's true or not, especially if it's the same group of gold bugs pros with references and resume who claim it.
      So what if gold had plumetted instead to 1040?
      No problem I guess, he would have called the bottom once again, and eventually would have gotten in right.
      Simple question of patience and try again later.

    2. HdH:

      You are absolutley correct. I would go one step furthur and confirm all news letters writers are RIGT ( half of the time ) and WRONG ( the other half of the time)-- it is the same probability as a coin toss. ( I was a math major and made a living as a dumb electrical engr.; I should have gone into finance at GodMan Slacks)

      Of course some publishing houses are even smarter: they have many different newsletters and each takes a DIFFERENT ( as in bullish or bearish or neutral ) position and since the probability of one of them being right is ALWAYS 100% they always tout the one that is right at any moment.

    3. "I am fearless and assume that you are referring to the " Money and Markets" publications from Weiss Research. Their chief guru on Precious Metals was calling for Gold to fall down,close to $1000 by 4Q of 2013, then he pushed the doomsday scenario out to Jan of this year and when that failed, his latest prediction is May of this year. He also claimed in Feb that Gold would find it very difficult to close above $1361 on a weekly basis; wrong again."

      Wolf - I assume you are talking about Larry Edelson here. I've done some indepth research on his calls and here are some interesting things:

      -He uses computer models that he's developed and adjusted over the years. Much like MA ECM models, however not as sophisticated.

      1 - His models didn't catch the run up in gold from $1500 to $1900 in 2011 as they were indicating a top at 1500ish - he was kinda right, they did miss a big trade but did come back down sharply to 1500ish.

      -His models were indicating gold moving down from 1500ish in 2012, but instead it was the time gold rallied from 1530 to 1792 - despite this rally he still kept his subscribers on the sidelines indicating steep declines were on the way. So again a big trade was missed but in the long term the models proved correct as gold plunged from 1792 to 1180 over the next several months.

      -He missed this trade on the recent double bottom end of Dec 2013 as his models again were telling there is more downside on the way and showing the same indicators as the previous 2 above. He again missed a big trade - but will his models be correct over the next several months and is gold headed to $950 by May? Or perhaps this summer.

      Will be con't......

      PS - I agree with Dan whatever happens in Ukraine this weekend and Monday gold might be a sell on the news as it's the dollars turn for a rally nearing it's .79 support.

  13. Sprott and the GOLDEN CROSS...on KWN....


  14. Thanks Dan for your balanced outlook on golds current flight path.

    Regarding plagarists, ego maniacs and the person named Turd (in all likelihood, lets just clarify that point).....at some point soon he'll over reach again and expose himself for what he is.....a shameless narcissitic huckster with a sad and bloated self opinion of his prognostications.

    Wake up people! You're propping up a clown who speaks out of both sides of his mouth who'll claim he was right no matter what and who has previously admitted to being misleading at times in order to keep up subscriber hope (and your patronage) alive during a period in the PM markets where shorting the metals is NEVER mentioned even when they topped out over2 years ago.

    That's what a pumper does...he pumps his merchandise and abilities even if he has to act like a clown to keep you amused and coming back for more.
    Certain sites are sometimes a glimpse into the mindset of some of the most paranoid dehumanizing individuals you'll come across on the internet.

    1. @ Dan the Man

      Your wrong about Turd. He admits when he is wrong all the time, and is none of those things you mentioned above. How would you even know? Do you subscribe to his site? I do and it's easily the best ten bucks I spend every month

    2. I used to subscribe and was a long time lurker at first.
      I unsubscribed several months ago once it became apparent the geat turd was on a blind and grandiose ego trip that more or less set the tone for what it's become the past couple years....a doomer echo chamber that has a simplistic and repetitive meme of buying phyz PM's no matter what the market is doing or what direction it might be going in and why.
      And your right...he does admit "when he's wrong all the time" which is often. Blaming his sometimes wrongness on evil forces of darkness and manipulation all the time is an easy scapegoat most people seem to lap up and not ever question. No surprise there.

      I canceled my auto-renewal once I realized that I might end up automatically shelling out another 100 USD equivalent after the 1st year expires. Never saw it mentioned on there so I guess everyone there is ok with that happening.

      I'm glad to hear your happy on that $10 entertainment investment you're making. Turd likes to remind folks how he's worth probably 100 USD and you're lucky it's only 10. Expect a subscription increase soon and a sob story.
      I used to enjoy the site when it was populated daily by hundreds of more people who commented before the acrimonious and arrogant vitriole from some of the regulars drove people away the past year or more.
      There's no denying it's changed dramatically and I've read enough posts on there from others over the years that seem to imply similar sentiments to mine on their dissatisfaction.

      Enjoy the cult of thought over there and keep on supporting the almighty turds increasing penchant for buying phyz metals, playing the markets and traveling.
      I'm sure your 10 USD a month is an equally absolute delight to a fringe internet personality who'll seems little more then a sensationslist with a schtick.

      Stick around long enough and you'll realize it at some point.

  15. Yes many investors are terrified of what could happen over the weekend. Except those who are holding the consumer stocks like Under Armor, Nike, Michael Kors, etc. which are unflinching and have not backed off of the highs.

    Same with the regional bank stocks, they are unfazed by all this mess.

    Now only if Newmont Mining would have acted like those stocks mentioned above, then none of us would be sitting around here trying to make predictions, we would all be retired by now, LOL...

  16. i am not going to spec on Ukraine or the Malaysian missing airliner and so forth. What I would like to know is this: With his magic computers and self-admitted historian of the world status and unflagging criticism of just about anyone and everything, why does Armstrong not have someone proof read his musings, pontifications and sometimes outright drivel? Just wondering; sparks

    1. :)
      Becauzzz....it would be too early, as the mandatory not to be missed war summit is coming on 21st of march, during which, for a very modest amount of a few hundred box, you will have a glance on the futuuuure. Don't worry you can assist the event via streaming : if you can't come, you can still pay.

  17. Great post about hedge fund. You know we all think about this very topic. futures and options trading is to transfer the price risk from one party to another; they facilitate the allocation of risk to those who are willing to take it.


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