"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 Work is NOW AVAILABLE AT WWW.TRADERDAN.NET



Thursday, May 22, 2014

Euro Weakness Remains

I have been keeping a close eye on the Euro ever since ECB President Draghi began talking it down a couple of weeks ago. The reason for this, besides monitoring various currencies for trading opportunities, is to see whether or not it has indeed peaked out and is starting a trending move lower. If it does, it is my view that this is going to especially benefit the US Dollar, as the Euro comprises over 50% of the weightings in the USDX. Consequently, a falling Euro will tend to push the Dollar higher which in turn will tend to push gold lower.

I wish to repeat for the newer readers here, I view gold as the Anti-Dollar. As a general rule, it tends to fall when the Dollar moves higher and conversely, tends to rise when the Dollar falls. The linkage is by no means an exact one - but it is a fairly good judge of whether one can expect rising or falling gold prices as one monitors currency movements.



Looking at this daily chart of the Euro therefore, it continues to flirt with the bottom of an area labeled "Support Zone" on the price chart. If it fails to hold here, odds favor a move down to the next rectangular zone noted. The ADX is rising and while it remains below 30 for now ( a reading above that level indicates the presence of a strong trending move ) it continues to push higher towards that level as the Euro pushes lower. Bears are currently in control of this market but the bulls are trying to stave them off at the present price level as can be seen from both the chart action and the action of the indicator.

The Weekly Chart of the Euro paints a somewhat different picture, one decidedly less bearish. Strong upside resistance remains intact starting as one approaches the 1.40 level and which extends to 1.41. That has held firm. Downside support is closer to the 1.35 level ( the red rectangle ). The ADX is slowing dipping lower but had been in a very gradual move higher reflecting the grinding, upward progress of the currency over the last 10 months or so.

Based on what I can see from this intermediate term chart, the Euro would need to fall firmly through the 1.35 level to make me say with more conviction that a longer term top is potentially in for the currency. That of course would have some serious consequences for gold. It would not necessarily mean that gold is going to enter a new leg lower, but it would provide yet another headwind that should serve to cap any rallies in the yellow metal. If however we did see a sharp collapse in the Euro for some reason ( perhaps their version of QE ) one would have to keep a very nervous eye on gold for if the US Dollar embarks on a sharp move higher, gold is going to suffer.




Please note that I am not predicting any of this - I am merely stating the potential for what might happen if the chart pattern changes for the Euro and by consequence, the US Dollar. Successful traders do not "predict" - they respond. Newsletter writers, website bloggers and other assorted interests who make their livings "OFF" of the market, instead of "IN" the market have that luxury; we do not. Not, if we want to survive in this profession.

Along this line, let me say it one more time in the hopes of reaching some who continue to maintain a wildly bullish sentiment towards gold no matter what comes their way. They may pride themselves and encourage their followers to, "Stay the course". That is great if you are a sailor on the ocean and are being buffeted by some high waves and gusty winds but at some point the winds and the waves will force even the most stalwart of mariners to take a detour out of their way if they wish to avoid getting slammed into the rocks or going down. It is called "prudence".

Those who "stay the course" and keep pushing ahead out of sheer stubbornness often pay the price with their lives. Same goes for trading or investing - at some point one has to "take a detour" to skirt the danger so as to arrive safely at the final destination.

Spitting into the eye of a hurricane just gets your face wet and does nothing to force the hurricane to change directions. It is going to go wherever the hell it wants to go and it could care less what you want. This is how markets are - they go where they want, when they want. If you are smart, you learn to either go with them or get out of the way.

I read that which passes for market analysis and have to shake my head in sadness for those poor "victims" which follow it to their own financial hurt. Mark my words, whenever you find "analysis" ( and you see this all the time in the gold community and among the 'bugs' ) that dredges up one theory after another, whether that be negative GOFO rates, backwardation talk, Belgium buying of Treasuries, or whatever, to justify "staying the course", all the while the market continues to sink lower, understand that you are not getting objective analysis but someone talking their "book" or someone who has become so EMOTIONALLY ATTACHED to an investment and has staked so much of their credibility upon that asset performing as they have predicted, that they simply can no longer cut it loose, no matter what the market price action might be saying.

They have committed a fatal trading/investing error - they are emotionally attached to a trade or an investment. One must learn, and it is a very hard lesson to learn, to treat each trade, each investment, as objectively as possible. If it performs, you keep it. If it does not, you get rid of it and find something that does. You might be familiar with the old trading/investing adage:

"keep your losses small and let profits run".

Sounds simple enough doesn't it? Guess what - over the course of my career in this profession, I have found VERY FEW who actually practice it. Most failed traders/investors all have one thing in common - they cannot admit that they might be wrong on a trade or an investment. As a result, they sit there while the trade moves against them instead of cutting the loss quickly. Instead, the loss grows larger and larger and larger. At that point something happens to them - Now they will not sell under any circumstances because to do so would be to have to actually realize what has now grown into a massive paper loss. Each new days comes with them searching their computers to see what the last trading price is of their investment or trade. They will scour the internet for any bullish story, any bullish theory, anything that might confirm that they have bought something that is going to go up in value. If the market does go in their direction, a bit of optimism comes over them as they begin to hope that it will finally stop going down in price. Then, the price reacts negatively for them again and back comes the despair, the anger at the markets, the blame game, all manner of despair, etc.

Can you see what has happened here? Their lives are now revolving around a failed trade/investment. Instead of cutting the loss while it was small, and moving on with their life or into another opportunity, they are shipwrecked on the island of despair because they refused to "keep their losses small".

Reader - do not let this happen to you. There will always be opportunities in the market to profit from. But not if you have depleted your trading or investing account because you were going to "stay the course" come hell or high water. That is why that I am trying to show folks how to read the market and pay attention to it and NO ONE else, including ME! I serve as an interpreter of the market - that is all - I have no more secret insight into the market than the next guy. I have said it before and will say it again:

"opinions are like armpits - everyone has them and no one believes that theirs stinks".

Guess what - if your or my opinion is not confirmed by the market price action - IT STINKS. Get over it and move on. We are all just mere human beings, mere mortals who know not what the future might bring. Do not waste your life away concocting or subscribing to useless theories about why your stinking armpit smells so wonderful. If some nitwit, inexperienced blogger out there wants to call you 'ignorant' because you will not drink his Kool-Aid and go down with the ship and him, so what? What the hell do you care what some clown with a computer terminal and a blog has to say about you? You will run out of money before he does because he is busy bilking others out of their precious capital to pay for his useless counsel. Do you really think your guru is going to take money out of his pocket and reimburse you for all the losses you have incurred by swallowing his swill?

These people are like the plague of locusts described in the book of Joel and in the book of Revelation. They descend on the green land, devouring everything in sight leaving a barren, desolate wilderness in their wake. Ignore them, save your money and think for yourself by following the market and learning to read what it is saying.

I will get some more up later on the markets. Suffice it to say for now, when it comes to gold - the news out of India and this weekend's election in the Ukraine are supporting the metal at the moment. As I mentioned yesterday, I would be surprised to see gold actually break down through chart support ahead of this weekend's vote.

One final thing for this post - any of you hog producers out there who read this site, I strongly encourage you to use the weakness in corn and the strength in 4th quarter hogs, to get some hedge coverage. Do not let these once in a lifetime profits get away from you.

67 comments:

  1. Brilliant comments on trading.
    You 'da Man, Dan!

    Happy Memorial Day Weekend
    You need the rest!

    ReplyDelete
  2. Dan, I wonder what the long term impact to the dollar will be when the markets wake up and digest the news that the Monteray shale oil which constitutes 2/3 of the recoverable shale oil reserves in the US were just downwardly revised 96% by the EIA

    ReplyDelete
    Replies
    1. Mad Max, Consider that the Bakken Shale & Eagle Ford have increased US oil production by 50% since 2008. It's pretty amazing & as Trader Dan has mentioned, this is without drilling of Federal land. It's an amazing gift to the US.

      If you want conspiracy theories, I would submit that the 96% reduction in recoverable reserves study might be a funded by very deep pockets in opposition to fracking the Monterey Shale (e.g. agribusiness).

      Delete
    2. Mad Max;

      I concur with MDLGTO;

      Those two mentioned shale deposits, along with the Marcellus, Barnett and many others are huge. Besides, the Monterey has been tied up because the Democrats in California would rather buy oil from the Arabs than drill and get it out of their own backyard so it is currently a non-factor in my view.

      There are many other shale deposits out there in the US. Those we just listed are among the largest but the sum total combined is huge.

      The Dollar is going to be influenced by interest rates more than anything.

      Delete
    3. MDLGTO...the announcement that 2/3 of recoverable shale oil in the US from the Monterey project was downwardly revised by 96% came from the US GOVERNMENT, its not based on a conspiracy theory. The 50% increase in production from Bakken and Eagle Ford since 2008 has nothing to do with current recoverable reserves in US. Whether other federal lands will open up remains to be seen in light of opposition from the prairie fairies, moonbeams and eco fascists.

      Delete
    4. This comment has been removed by the author.

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    5. Dan,
      Appreciate the comments for those who want to trade the markets. In terms of the Euro, I think the ECB meeting on June 5th will be a big terminate in which direction the Euro goes and if it holds support. This is a big meeting in terms of Draghi and his credibility. I don't think a rate cut will suffice. I think he has to do some form of QE, if not I believe the Euro will strengthen, and interest rates will continue to rise in the southern European countries. But as you said, in terms of trading I will see how the market reacts. Your advice on trading really hits home as I lost money on gold when the last round of QE was announced, I had the very strong opinion as did many other people that gold would surge on this news, but obviously I was wrong, as gold entered a bear market, and the general market hit new highs. The gold market couldn't have cared less what I and many other's thought. I learned my lesson. I now trade, and invest on technicals, not my opinion, or any one else's. That being said I would like to throw in my two cents regarding the gold sites. Even though I trade on technicals, I do still try and get as much information as I can whether it be KWN, JSMineset, zero hedge, CNBC, Bloomberg, and other financial sites. You just have to know their bias, wade through the hype and listen for pertinent and useful information. I find it humorous how many times Eric King introduces his guests by saying what I tremendous interview he gave, and this is his best interview yet. Anyway have a good memorial day weekend.

      Delete
    6. Mad Max, I should have added that the conspiratorial view is mine & I should have added that there is, again in my view, an unholy big money alliance between agriculture & the state's mega-wealthy liberal establishment (I am a very small liberal in terms of financial footprint).

      So if the IRS could call for more audits of Tea Party Republicans, why couldn't the DOE headed by Steven Chu lean on the EIA to produce a countervailing argument to California's oil reserves?

      Quote from today's San Jose Merc:
      "The myth of vast supplies of domestic oil resources and billions in potential revenue from drilling in California by the oil industry has been busted," said San Francisco billionaire Tom Steyer, the former hedge fund manager who founded the nonprofit NextGen Climate to fight global warming.

      That is all.

      Delete
    7. Bobbo;

      You might we right about the Euro. We will have to watch and see what kind of economic data we get out of the Euro zone very closely between now and that next ECB meeting. They do not want a surging Euro over there; that is for certain.

      The Bundesbank still has a lot of sway and if they give their blessing to "extraordinary monetary measures" that would at least remove that impediment. June will be here before we know it and that meeting will loom large indeed.

      Delete
  3. It is.estimated.that the US may be energy independent by 2020-2022. I cannot emphasize enough how dollar bullish that is to us. Our economy cranks out better than most others, because of our growing energy production. The gloomers have to consider this. One of the few reasons why the dollar will do well all the way until sometime next decade (when china/russia alliance get too angry at the us not to strike).

    In fact, the globalists finally allowing the oil domestically to be tapped has amazing ramifications all the way and down our food chain. Like it or lump it, we continue to be.the envy of the world.

    ReplyDelete
    Replies
    1. Eph 6:7, by 2020-2022 many things will come to pass and very few of the ones that we now believe will. Take any time in history and look 6-8 years back and you will find that no one saw what was coming 8 years ago and everyone knows what happened during the last 8 years. We'll talk about this energy-independence 8 years from now :-)

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    2. its almost to fait accompli. There is.talk about exporting nat gas. That's why russia is taking a slow approach here and striking deals with china. They know we can plug their gap. Our coal can go to china. The trend is firmly in place. I wouldn't look at cushing to see our oil supply.

      ever wonder why only in the last five to six years we have been allowed to tap the oil? the globalists who control the large oil companies were plugging up all the oil finds. they know a large global war is coming and that the United States must be energy independent by that time. all going according to plan....

      of course I take myself seriously I study this more than anyone else I know and I'm making a boatload stick that in your pipe and smoke it.

      Delete
    3. Eph 6:7;

      I agree with you on this energy independence my friend. We have such huge untapped resources here and it is high time we utilize them. not only would it keep the cost of energy down which would benefit the consumer and the entire economy, it would also starve OPEC of funds, some of which goes to less than desirable activities as we all learned.

      LNG will be a big US export indeed.

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  4. You really do make me laugh Dan......hhehehhehehehehe.......you do take yourself seriously don't you?

    ReplyDelete
    Replies
    1. kliguy38, please elaborate. Which parts of the commentaries are loughable?

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    2. My comment was to klingon guy

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  5. I think the problem is that the US and Europe and Japan just are NOT printing enough money!!!, really - that is why we all haven't recovered! I remember seeing Warren Buffett call gold a barbarous relic - how can you argue with a man of this success? What scares me is when all those gold bugs, including China and Russia, realize they have been "shanghai'd" (too funny) that they will become unstable or even despondent. I told my wife that I am trading in my gold wedding ring for tungsten because I and good and sick of gold talk. I was listening to a radio show last year and they said the US has enough oil to supply itself for 1000 years if the Democrats just allowed drilling. Good to find a site with such like minded thinkers and a good leader like Trader Dan. Always follow the traders, they make the money baby!!!!!
    ps - what about this latest conspiracy about Belgium buying US Treasuries? what a hoot! those gold bugs always putting out the disinformation!!!

    ReplyDelete
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    1. CASH ONLY = typical American hubris and arrogance...your more whacked out than the gold bugs!!!

      you might want to read the GAO audit wherein the FED surreptitiously loaned out over 16 trillion to the banks and corps during the 2008 financial crisis. You probably will get to wipe your butt with all that money before this ends

      Delete
    2. Max;

      When or If the Dollar does crash, I do not believe it will, I am sure you will be here to tell us all how you predicted it. In the meantime, I doubt anyone who posts here is more "whacked out than some of the gold bugs" - that takes quite a bit.

      The problem with the US is structural in nature and it needs business friendly policies, regulatory reform and a simplification of the tax code - that would help get US business firing on all cylinders. the other albatross hanging around the neck of the US economy is obamacare. That is a huge job killer.

      Maybe in a couple of years it can be gotten rid of.

      Delete
    3. Dan, unfortunately Washington is incapable of enacting structural reforms and instead have trashed the Constitution. Most of our problems today relate the expansion of the commerce clause under Art 1 Sec 8 thanks to FDR and former justice Robert's swing vote in 1937.

      Delete
    4. Looking at the big picture I think our problems have very little to do with politics and everything to do with monetary imbalances. The world is becoming increasingly unwilling to except more $USD denominated digits as settlement for real stuff. How long do you think the productive world will continue to subsidize the US perpetual trade deficits? The problem with the dollar based monetary system is there is no real settlement. Debt and it's derivatives are attempting to provide real payment to the productive world for real goods. I don't see politicians of any stripe stepping in front of the $USD exorbitant privilege. The Fed and the political class will do what they can to keep the music playing. I think the consumption based (imbalanced) US economy is here to stay until the rest of the world refuses to support it any longer.

      BTW Zhang thanks for the link to the often bizarre TF metals site. I enjoyed the interview linked there regarding the situation in the Ukraine. Much more informative than the propaganda spewed by the MSM.

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    5. Mad Max, if the FED loaned out 16 trillion, and the we're all still here then wouldn't it surmise the FED HAS 16 trillion? if it lent it out it then got it back, right?

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  6. pps: According to US Treasury data released on Tuesday, Belgium’s holdings of US debt rose by a further $30.9bn during February, to reach $341.2bn.

    http://www.ft.com/cms/s/0/a1de1546-c489-11e3-b2fb-00144feabdc0.html#axzz32UYGgU4f

    ReplyDelete
    Replies
    1. it's obvious there will always be buyers for US debt. Who wouldn't want a chance to hold an asset like that? China holds 1.3 trillion!! When someone bows out of the pecking order someone will always be there to step up to the plate, I guarantee it!!

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  7. Really nice post! I'm a newbie in trading and I love the way you see things and the way you explain your views of the market. Thanks a lot for your help! :)

    ReplyDelete
    Replies
    1. Mathieu;

      Glad you are dropping by.

      Delete
  8. Hubert, have you noticed a lot of new Hoosiers have begun showing up here? PM range trade continues; have a good wknd over there, and when you get a minute I would appreciate your latest thoughts on the French. Thank you.

    ReplyDelete
  9. Dan,
    You are the only blogger I continue to read because you tell it like you see it, always have. I have been enjoying your work since 2003, I took some time off from trading and writing my blog, it has been almost 1 year. I give you lots of credit for all you do for the community, I for one know the time you put into this Dan, God bless!
    You have read my blog in the past and I'm sure you have seen how you may have rubbed off on me in several ways through my trading and my writing. I just started trading 3 weeks ago and I am glad to be back doing what I truly love. I have my opinions but I am a realist like you, we just have to take what the market gives us and not be stubborn and married to one particular market! I did exit Gold at 1520 last year and took several shots for a few months after the major plunge and then just gave up. My long time beliefs and convictions were gone and it just wasn't worth trading anymore with the way I was feeling.
    Even while not trading or watching the markets on a full-time basis, I really did question my long-term views as far as Gold is concerned, and that was a huge thing for me because I can honestly say that although I always knew the market could do whatever it wanted on any given day, I never doubted my beliefs that Gold was the one thing I truly believed in. Without getting into my life story here, with the time off and watching things unfold, I do believe the FED is playing a dangerous game and that they will not be able to unwind everything they have done as far as all the QE nonsense and the US endures the Goldilocks scenario. I just don't see a strong recovery for the majority of the country and the small portion that is dependent on the FED to keep supplying just cannot stand on their own!
    With all that being said I do believe that Gold is headed much higher in time and that the FED might very well have to reverse their TAPER and have to do more to support the addicts or things are going to blow up worse than 2008/09! Of course this is my opinion but like you Dan, I do put my own money on the line. I like making my living and supporting my family from IN the markets and not off the markets. Great post!
    Thanks Dan for all you have to offer, I still enjoy reading you the most!

    TraderMartin

    ReplyDelete
    Replies
    1. Martin:

      I was wondering where you had gone! Very nice to hear from you again. I am glad you were able to take some time off. Hopefully you can get your "sea legs" back underneath you soon and get into sync with the markets again.

      Stay nimble and flexible and do not overtrade and you will be fine. I have told some that if they can survive and prosper as a trader in this volatile and oftentimes inexplicable environment, they can survive and prosper when things get back to some semblance of normalcy ( who is to say when that might happen!).

      I wish you continued success. Thanks again for the kind words and for the post.

      Dan

      Delete
  10. Dan- Since you mentioned hogs, can you explain the term structure setup for lean Hogs? All prices good at the time of post...
    June 117.15 on a slight downtrend since late March
    July 125 trading essentially sideways since late March
    Aug 128 trading sideways to higher since late March
    Oct 107.475 Still on an uptrend after dipping in early April
    Dec 94.45 Still on a uptrend since January

    What is with the huge price bulge in the late summer contracts, the fall off in Dec and the varying trends for the various contracts.

    ReplyDelete
    Replies
    1. Trinity Trader;

      Livestock markets are unique in that each contract month has its own particular set of fundamentals that govern its price. Prices for the various months do generally tend to move in unison with the broad board but can deviate at times.

      The current board structure is such that it looks ( for the moment as it can all change in a single day ) for tighter supplies this summer followed by increasing supplies as this year wears on.

      Hope this helps... a bit busy today.

      Have a nice weekend.
      Dan

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    2. thanks have a good Memorial Day Weekend!

      Delete
  11. Regarding that Kliguy clown above, I wouldn't worry about him. He's a silly doomer who has been predicting crash and catastrophe for 6 years now, not to mention pumping gold and miners endlessly. The joke is on him because anyone who has followed his advice would be bankrupt by now. He has a worthless blog and a few dummy disciples who worship the ground he walks on. It's always fun reading Dan destroy the type of arguments made by Kliguy and
    other members of the KWN club.

    Their heads are exploding, wondering why gold hasn't gone to "da moon", the miners are in the toilet, and the stock market is at all time highs.

    Keep up the good work Dan and don't worry about that putz or others like him. You can't reason with mentally unstable fools anyway.

    ReplyDelete
  12. Dan,

    Thank you for the great work that you are doing here over many years. This last comment on the trading mentality really hit the nail on the head! I love it and could not agree more. There is a reason why 90 something percent of active retail crowd lose money in the markets (is there an accurate number on this?). And one of the reasons is focusing too much on how much money can be made vs. more important - how much money can be lost. As ultimately, it is more important to live another day and have capital (and not damaged mentality!!!) available for when the next great trading opportunity INEVITABLY comes.

    In last few years we have had so many great trading opportunities in the gold and silver markets, yet most "bugs" it seems to have failed to see and trade them while being focused on "staying the course" and waiting for 2000/5000 or whatever x000$/Oz gold gurus promised them.

    I have my theory why this is happening to the world of gold/silver bugs, but its not important for this conversation. Dan, you emphasized the critical part.

    Do not get married to your positions and views in life too! We live in the always changing world and while it is important to have some things in life that are constant and give you strength (family, friends and love for the world around us) it is also important to always keep an open mind.

    So i repeat, do not get married to your trading positions, as divorce can be very costly!

    Thank you Dan!

    ReplyDelete
    Replies
    1. AM

      You are most welcome....

      The older folks get the more their minds tend to narrow. There is nothing wrong with having strong convictions - that is a great quality to possess but refusing to consider that one might be wrong is a rare thing these days.,

      Delete
  13. Weekly time unit :

    http://i57.tinypic.com/4iimbk.jpg

    Eur Usd is breaking the rising wedge, down. Bad for the uptrend.
    All the up move was a correction of the 1.49 to 1.20 movement.
    That correction up used Fibonacci levels as a stairway.
    We failed twice at breaking the 62% Fibonacci level of 1.3840, as we hit our heads on the resistance of the rising wedge.
    Therefore market is probably going to test the lower Fibonacci level near 1.35.
    I'm neutral as long as prices remain within those two Fibonacci levels (1.35 / 1.3840) on this time unit.

    Have a nice day :)

    ReplyDelete
  14. AT LAST! Some Good News!

    and Boy, do we deserve it! Apparently "Gold May Now Be Set For A Staggering 50% To 90% Surge"

    phew, what a relief! What am I going to spend it all on? Hang on... WHAT? You wanna know WHY Gold is gonna surge a staggering 50% to 90%? Damnit, you're a tough crowd - I wouldn't want to be th hooker who scored you after a few drinks on a Friday night! OK, here you go - it's all because "If you compare today to that period of the late 1950s and into the mid-1960s, we are on a very similar path". You happy now? 50% to 90%, you got that?

    OK, because you've waited patiently, here it is http://kingworldnews.com/kingworldnews/KWN_DailyWeb/Entries/2014/5/22_Gold_May_Now_Be_Set_For_A_Staggering_50_To_90_Surge.html

    God, I should charge you folks for this kind of service, really I should, what with me braving the jerk-infested waters of KWN just to bring you home some juicy tidbits every so often ....

    ReplyDelete
    Replies
    1. I wonder how many times KWN has used that headline?

      Delete
  15. This comment has been removed by a blog administrator.

    ReplyDelete
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    1. Kritika, I do not come here for Hoosier Shoe Clerk Tout ideas. sparks

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    2. This comment has been removed by a blog administrator.

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    3. I think I'm really gonna have to do my threat to those bums.
      They won't understand anything before their server is on fire.

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  16. At this rate It appears the DXY will challenge 80.5 soon, I was expecting the DXY to reverse before reaching this milestone. I don't see any significant ECB action, a marginal rate cut and maybe some guidance regarding unconventional actions, I expect markets to start pricing this expectation in next week which should reflect a higher EUR and if so should put some brakes on the DXY climb.

    There won't be any US style QE I don't think there is the political will to undertake such a program, rates are already below 3% for the periphery. Maybe some kind of asset swap linked to targeted SME funding will be acceptable.

    On another note what a tricky market to trade in recently, in other words boring!! I've not seen any indication of developing trends to speculate on. I'm watching WTI at the moment, it will be interesting to see if it breaks out above $105, but I'm looking for an entry point to short.

    Regarding Gold, I'm holding out for a drop down to $1260 in order to pick up some physical. We might see some action next week to shake out some options and holders of the June delivery contract.

    Dan,

    one final point I sometimes listen to the Korelin Economics report and I'm aware you've had contact with Al before. I think the audience there appreciate people like yourself that present a more balanced and rational view when it comes to judging the markets. Would be good to hear you on the show sometime.

    Kind Regards

    Richard

    ReplyDelete
    Replies
    1. Richard Clouting;

      Thanks for the kind words. I have gotten out of the interview thing as it takes up too much of my time. I think most folks out there who spend some time on the internet, and especially those who follow gold, can find me over here and read my views.

      One of the good things about this blog is that it has brought some very solid and articulate and gracious folks here to share ideas and thoughts. Eventually the members of the cult give up and go away after annoying us.

      Delete
  17. for those of you who claim no manipulation going on , check out the front page in the FT … the really sad thing is that they skimmed their client , just one day after they paid a fine for rigging LIBOR ! what a shit business , they really are like the maffia , and the penalty ? a hundred grand … what a joke , I guess , its cheaper than robbing a bank … university degree , thats perhaps the difference between the poor devil sitting in jail and the crook who gets away with it . Oh well …

    ReplyDelete
  18. repeat after Dan "Gold is never manipulated"

    http://www.zerohedge.com/news/2014-05-23/barclays-fined-manipulating-price-gold-decade-sending-bursts-sell-orders

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    Replies
    1. can i take this one for ya Dan?

      for the umpteenth time, Trader Dan does not claim there is no manipulation in the precious metals. what he does say, is that one must play the hand they're dealt. (paraphrasing) look at Dan's track record, three years running. then compare it to the GIAMATT crowd. WTFU. (wake up)

      nice to see ya over here AM. not too terrible of an idea to feather a new nest. don't be the last rat to jump. you tragically are wasting your talents over there.

      Delete
  19. SPY within a hairsbreadth of making new, world record, lifetime highs.

    Richard Russell standing there scratching his bum, wondering how he went wrong.

    Marc Faber still bleating about a crash, pull on his ponytail.

    Tim Wood disappeared, nowhere to be found.

    Gold bugs staring bug-eyed at the screen in disbelief, about to throw a shoe at General Jim Sinclair at the next Q & A meeting.

    LOL...

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    1. Man mark you're a comedy show. Thx for the chuckle this morning.

      Delete
  20. I think what most here reject is the narrative parroted by many of the gold bug websites. The narrative says that negative real interest rates or money printing, etc will cause the POG to skyrocket.... but when?

    I think the big mistake here is correlation is presented as proof of causation. It is not. Personally I think the POG is distorted but mainly because of the mountains of paper claims that exist for every ounce of real gold. Gold is not utilized as a commodity (most is never "used" it just sits) but it is traded like a commodity. This creates obvious distortions. The goldbugs have yet to realize that the narrative they preach has nothing to do with price discovery in the gold market as it currently exists. It is a western paper traded game now and has been for some time.

    I think at some point that this goldish paper trade will lose all credibility when real gold at this distorted paper price cannot be found to provide real settlement. It will require a much higher price to move. I was lucky enough (actually my wife nagged the hell out of me thank god) to sell most of my gold stocks in 2011 for some amazing gains. I still own a few (my dumb ass) and will probably hold them to the bitter end. I mostly missed out on the amazing stock run of the last few years but sold a few mainstream stocks a couple of months ago for decent gains. My savings are in physical gold and some dollars (in case my world view is wrong). If I could have one wish granted it would be to participate in an economy that valued savings and provided a foundation for real sustainable economic growth. Yeah I know that isn't the world we live in now.

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    1. Gene, and to think that I was the only hopeless , dumb sonofabitching romantic left out there! Take care chief and have a good Memorial Day Weekend to you and yours. The same goes for everyone else out there. sparks

      Delete
    2. "an economy that valued savings and provided a foundation for real sustainable economic growth"

      http://data.worldbank.org/indicator/NY.GNS.ICTR.ZS

      http://blogs.swa-jkt.com/swa/10540/files/2012/04/002p004.gif


      All I will say is that you would be very, very surprised if you knew what life was actually like over here, day to day, at street level. Very surprised indeed

      Delete
  21. Barclays Fined For Manipulating Price Of Gold For A Decade; Sending "Bursts" Of Sell Orders

    What say you Trader dan?

    ReplyDelete
  22. Looks like there maybe some gold bug credibility after all...
    http://www.zerohedge.com/news/2014-05-23/barclays-fined-manipulating-price-gold-decade-sending-bursts-sell-orders

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    1. Let's be clear - this was wrong, and is probably the tip of an iceberg; however, it is clearly NOT evidence of the Evil Empire, TPTB or "The Cartel" in operation - much less is there any suggestion that this is in any way linked to Central Bank or Government policy

      Delete
    2. Zhang, I am not quite sure how to read what you are saying. Where are you? Unclear, to say the least.

      Delete
    3. I am in Singapore

      What I am saying is simply this - what the FCA have uncovered is illegal and wrong, and I don't think it is limited to Barclays.

      However, despite what the goldbug community would love to have happened, it does not appear that this guy was acting for any motive other than illicit greed - this is not evidence of some evil conspiracy to systematically suppress the price of gold, but a fundamentally opportunistic instance of someone defrauding a client

      It certainly illustrates how the London Gold Fix can be manipulated, but if you read the FCA report, the spot price had already fallen before the strike price on the digital option before the guy put in the illicit / spoof Sell order. What he did was wrong, but it in itself did not suppress the price of Gold, and in fact over the immediately following 4 months Gold rose by $250 or so

      This was fraudulent, probably still widespread and exploited the opaque and unfit-for-purposes weaknesses of the Fix mechanism; however, it offers NO support for the notion that The Powers That Be have been or are manipulating or capping the price of Gold.

      They may well be - I think they probably are; but this is NOT evidence of such. (Not that this will stop the Goldies from treating it as such)

      Delete
  23. https://www.youtube.com/watch?v=015RXnNbrJg

    repeat as needed. :-)

    ReplyDelete
  24. Today is an example of financial market "Nirvana":

    - Soaring stocks ready to break to new highs

    - Bonds also well bid, as a flight to paper continues unabated

    - Gold prices pummelled, no inflation prospects whatsoever

    Stay in the System

    ReplyDelete
  25. Yo, Dan? No manipulation?

    Here's the point. I don't believe it's always manipulation. But I do believe frequently it is, as evolving evidence continues to prove. LIBOR, HFT, now this, etc.

    Banks aren't abandoning gold and silver fixes for the public good, but rather, I suspect, to get off a sinking ship before the true extent of the problem is revealed.

    But carry on with your campaign against those who see manipulation influencing markets in more than a casual way.

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    1. datsyuk13; you are obviously a new Hoosier Shoe Clerk here, so I am going to go easy on you. Dan and Hubert and the rest of the seasoned players understand quite clearly that these are broken, oftentimes dirty mkts, and yes, manipulation enters into just about all of them. Fine, we got that. BUT, you and the rest of the head in the sand PM bulls just do not understand that now is just not the time to be bullish; stand aside or go stack your physicals and quit bellyaching and most of all, "get a life". sparks on the "Don't Pass Line"

      Delete
    2. Dear Steve Tarnish,

      Like Dan, you presume to know all about everything. First, the fact that I just decided to post here indicates nothing about my experience or lack thereof. This blog is not the focal point of the investment world, despite your delusions.

      Also, you have no clue about my precious metals stance, but here's a hint, I've been making good coin on DZZ inverse gold ETF. I do so by anticipating the sort of manipulation that occurs regularly. It's not foolproof, but it's been working. My only problem is getting to take advantage of the 8:30 am EDT hits of late due to my limitation of using an ETF instead of futures or other vehicles.

      Since Dan likes to introduce religion into discussions, both you and he ought to try the New Testament approach and stop attacking others. This post was only in response to Dan's nonstop attack on those who see manipulation. He very cleverly creates a straw man argument, lumping most who see manipulation as being a prevalent phenomenon into the category of those who see it everywhere and all the time. There is plenty of room between the extremes of no manipulation and omnipresent manipulation, but that would be too difficult a crusade to pursue so Dan and his acolytes simplify for convenience.

      I guess you and he are Old Testament types, vengeance and plagues and all that.

      I respond to you with ad hominem attacks for two reasons: 1) I'm going Old Testament and 2) Neither of you deserve New Testament treatment.

      Enjoy your smug existence. Im sure Dan will award you a star for your massive forehead

      Delete
    3. datsyuk13;

      Firstly - if you are going to post something here, you will do well not to put words in my mouth or to insult your host. When you write that "Dan presumes to know all about everything" that marks you out as someone not at all serious but rather as someone who is angry that I do not agree with you.

      I have written repeatedly, but that does not matter to those of your ilk, that the mark of a successful trader is humility and recognition of the fact that we are mere mortals. I have learned this the hard way in nearly a quarter of a century of trading. I have also said that if I am right, I make money. If I am wrong I lose money. All traders that succeed understand this or they become former traders. I have apparently done something right because this is how I make my living and I am still here. You might actually learn something from me if you were not so arrogant and ill-tempered.

      Lastly - I have no idea who you are but one thing it readily apparent to me is that you have only a perfunctory familiarity with the New Testament. Nearly without exception, every single New Testament letter written by the apostle Paul, or John, or James or Peter for that matter were written as attacks on error or falsehood. In the early church, such things were referred to as heresies. Those letters are therefore polemical in nature. They were designed to undress the error, parade it in front of the eyes and ears of the church, destroy it and then establish the truth.

      For you to abuse the privilege you have here of posting to hurl a religious attack on me for my faith, merely because I have the audacity, ( in your eyes ) to expose what I believe is a scam and great deception that has sucked many poor victims into its grip and has DESTROYED them financially is way over the line.

      You will NOT do this again sir. If you want to continue to believe that gold is manipulated by the feds, I wrote as much in my post today laying out my case. Believe whatever you want as it makes no difference to me but keep my faith out of this discussion. Am I making myself clear enough?

      As far as my motives for continuing to expose what I believe is a gross falsehood that comes from ignorance of the nature of our modern financial markets and from people peddling something gold or gold related, that is my own concern, not yours.

      As I have stated to others who come to visit here and then mock or insult me or others on this blog because we are sick and tired and disgusted by the carnival barker atmosphere that infects the gold community, why bother wasting your time by coming here to read? You know what I believe and why. It is evident that you have your opinion. Fine - keep that and go away. You are not going to change my mind or the mind of most who regularly read and post here. So again, why waste your time and more importantly, that of the rest of us?

      If you want to apologize for your rudeness, I will give you the opportunity but as I stated above, YOU WILL NOT use this forum to attack me or my faith.

      Delete
  26. Great advises. Especially: "Successful traders do not "predict" - they respond."

    Dan, if I may ask a bit of insight of your trading technique without going into much personal detail (I know traders don't give out their best secrets).
    What do you rely on as the main signal to take a position. Indicators or resistance lines mainly? Also I would be very much interested if you are doing day-trading or trading in the longer time scale? Thanks

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    1. kris kov;

      After doing this for many years, watching markets day in and day out, you tend to get a "sixth sense" of things. You recognize something out of the ordinary in markets that you are very familiar with and spot opportunities and act on them. That requires an intimate knowledge of the various markets that you trade, which is the reason I do not trade every single commodity futures market out there.

      I also, along with my buddy Trader Garrett, whose site is linked to from here, rely on a combination of monthly, weekly and daily charts. I also use shorter time frames, 30 minute, 60 minute, 120 and 240 minute. Sometimes I will go to a 15 minute chart. It depends on what I am trading. I trade both day trades and longer term trades.

      I do like to watch horizontal support and resistance levels as I note regularly on my charts. I feel those have more significance than sloping trendlines which I believe are losing significance at times.

      I use a combination of indicators, one of which I will show on occasion, the Directional Movement Indicator. Momentum studies are important in our modern markets,

      Hope this helps some.

      Delete

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