"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



Wednesday, May 28, 2014

Gold versus the TIPS Spread

I posted a chart last evening showing the TIPS spread going back to the spring of 2009. I have had a bit of extra time to overlay the gold price on that chart so as to be better able to compare how the price of gold is performing in relation to the changing inflation expectations among those who comprise the market.

I am particularly interested in the gold price performance when the reality dawned on most market participants that the extraordinary monetary measures that the Federal Reserve was engaging in was not producing the kind of upward pressures on inflation that most of us had believed it would when we watched it implemented.



Interestingly enough, this sea change in sentiment and "awakening" among investors, occurred in September 2012. That month the expected inflation rate peaked out above the 2.6% level. As you can see from looking at the chart, that was also the time frame during which gold could not maintain any sort of hold above the $1800 level. As it turned out, once gold failed at $1800 it was a steady downward move until it broke support near the $1530 level and entered into its current bear market.

In looking over this chart, I am struck by how closely the gold price has been moving with this TIPS Spread since it peaked out at the secondary high near $1800.

For another look at the overall commodity sector, take a gander at this chart of the GSCI ( Goldman Sachs Commodity Index) and notice how it failed at the 700 level at the same time ( September 2012) as both the gold price failed at $1800 and the TIPS Spread peaked. It too has been moving in a range since that time.


I find none of this to be coincidental. It helps establish me in my view that the market remains quite unsure about the future of inflation in this extraordinary time in financial market history. Economic data will seem to improve, then fall, then improve once again, etc.

A quick note about the mining shares - looking at the HUI chart, unless it can reverse course tomorrow or Friday, it looks to end the week BELOW another key chart support level on the weekly chart. If it does, there is a good chance that the index will test the psychological support level of 200.


The GDXJ is threatening to lose all the gains, what little it had managed to capture, of this year. Its low print for today's session is 32.43. It closed last year ( 2013) at 31.05.

Until we see these mining shares showing some signs of life, making a case for a good bottom in gold is unwise.

That being said, I am going to be most curious at to what the reported holdings in GLD are by the end of this week. That buying yesterday was rather odd so I want to see if it was an anomaly or the start of an actual trend.

The Euro fell below the 1.36 level in today's trade which is more psychological than anything but nonetheless, it continues weak against the Dollar. There is some support on its chart near 1.356. I don't see much below that until you get closer to 1.350.

The Dollar is inching towards overhead chart resistance near 80.70 - 80.80. It can close out the week above that level, it stands a good chance to make a run at 81.40 or so.

Gold did initially hold at even number support at $1260 but as the day has worn on and the mining shares continue to sink, it fell below that level. There is psychological support near $1250. Rallies in gold are now going to be sold as losing longs will use that to get out while opportunistic shorts are going to be aggressive. Something will have to turn on the fundamental front ( currency concerns or geopolitical events ) to take gold out of its current bearish posture.


83 comments:

  1. That's really interesting stuff about the TIPs spread, Dan. Is there a quick 'n easy ticker we can track that with on something like stockcharts? Or is it something that takes a bit more handywork?

    ReplyDelete
    Replies
    1. Eric;

      Thanks - glad you found it interesting. I wish there was something that I had access to which made it easy for me to track that. It took quite a bit of work to put that chart together and combine the data.

      It is a pretty nifty chart however especially since late 2012.

      Delete
    2. I've owned TIPs for years, mostly in mother's and mother-in-law's accounts, and read articles on the spreads, but also have never found anything quick and easy for charting. Guess I'm just lazy after all...

      Thx for your work tho.

      Delete
  2. TRX getting blowtorched into the bell, $1.72 and dropping.

    Stay in the System

    ReplyDelete
  3. TLT and TIP screaming higher into the close.

    Paper rules. They simply cannot print it fast enough, investors gobbling them down like popcorn.

    ReplyDelete
  4. As you've bern saying TD (and something I've been sayng for awhile...the USD is far from dead or dying relative to what the alternatives are at this point in time.

    In fact, in many parts of the world (even China) the USD is in short supply at the retail/black market/common folk level of usage. I'm sure they're are many CB's out there who would love some pallets of Benjamin's airlifted to them and they wouldn't complain.

    While I recognize that more countries are gradually starting to settle some trade in other denominations (yuan) it appears there is a very long way to go before the yuan or euro can significantly effect or undermine the strength of the USD in a quick or noticeable way. It might take quite awhile.

    I say that not because I'm some red/white/blue USD cheerleader or in denial over the level of US debt obligations etc.
    I simply think that in order for the USD to be overtaken (or quickly cast aside) that the overall economic situation in China or in the EU needs to consistently show strong or positive growth on a pace and scale that far eclipses the downward trajectory (if any, according to current market barometers, tainted or not) of the USD or US economy compared to China/EU.

    I don't see it happening anytime soon although I don't discount the possibility it could happen over time. Lots of things (US interference) can get in the way of the sustained growth path of China or the EU and any currency domination they might hope for.

    On a totally unrelated geopoloitical note/viewpoint....look for the US to get "involved" in Syria while taking advantage of whatever political crossroads that Syria and Jordan now find themselves at. That's where the US will flow from in some manner...from Jordan.

    All those U.S. Iraq/Afghanistan troops have been redeployed and massing somewhere for a reason imho.

    ReplyDelete
  5. Trader Dan -
    Wow, thank you for this research. What a gift. It's been quite an education reading your posts.

    ReplyDelete
  6. each syllable punctuated by fists hitting table! B! T! F! D! have i ever been wrong before? just trust me on this one. ya see, i know a guy. can't say any more because the FEDS are trying to kill my guy's wife and kidnap his kids.

    ReplyDelete
    Replies
    1. lol
      you should start a blog "community".

      Delete
  7. Here is an interesting graph of gold versus debt in the US.

    http://moneyweek.com/money-morning-gold-price-bear-market-and/

    ReplyDelete
  8. I have a feeling Marks hypothsis could be right - central bank money printing fixes all, which means gold is no longer needed for safe haven only jewelrey demand. See ya at $600.

    ReplyDelete
  9. Don't know if you are serious but it makes you wonder why the genius central bankers of the world own so much of it. Perhaps they want to make their spouses some jewelry?

    ReplyDelete
    Replies
    1. I don't see how gold's role could disappear from the economy.
      Those who are 100% paper are also taking a big risk.
      Simply, I don't own gold to speculate on an upside price move at the moment. The reasons are the same as Dan or Jim explained hundreds of times.

      Delete
  10. Its tradition, gene.

    Why not, opex for gold mines goes from 700 dollar plus, prophet. It sure would weed out the rampant frauds in this gold bull.

    ReplyDelete
  11. You are truly more delusional than the worst of the goldbug websites. Head's buried deep in the paper avalanche.

    http://www.centralbanking.com/central-banking/news/2345547/european-central-banks-strike-new-gold-agreement

    ReplyDelete
    Replies
    1. Don't waste your breath. Mark may not be right, but most traders seem to agree with him, which is all that matters RE chart price. There's been some progress on trading houses treating gold like cash in terms of trade collateral, but until that practice is widespread, for the average trader there is no good reason to hold gold rather than cash. This does mean that the market price is captive to people who don't appreciate some of the aspects of gold, but that's what we'll have until we get a cash and carry market.

      Delete
    2. Why would anyone pay more then production cost in a cash and carry market?

      Delete
    3. No one will dig it up for free. And it's scarce, and desired for reasons unrelated to its commodity value. But even just keeping pace with oil would work, if it always sold for production costs it would steadily rise.

      Delete
    4. So, gold is valued reasonably now. I dont see miners reporting losses.

      50.000 gold? Thats jist insane.

      Gold "should" be at 2500 dollar now? I dont see why. Its up 500? From 13 year ago even after this correction.

      It will continue to correct untill the gold is manipulated crowd shuts up. It will continue to correct untill the charlatans that promote that thought have no credibility left.

      Delete
    5. jasper, What is insane is the idea that this paper charade will last forever. the geniuses have less control today than they had in 2007. The imbalances are greater than ever. What is losing credibility is $USD denominated paper but you can't see it yet. Waiting until your charts tell you may be too late. Good luck to you, Gene

      Delete
    6. I dont read charts. I ponder fundamentals and psychology. Fundamentally gold is just fine as long as its trading over production cost. Psycologically the problem is there are too many mentally instable folks that keep stacking for the wrong reasons. Gold is only gold.

      Delete
    7. I stack gold as savings. I have more trust in gold than in the $USD as a means of long term wealth preservation. I have never really took the time to learn how to trade paper so I am here to hopefully figure out how to multiply my paper wealth so I can stack more real wealth. Gold is real wealth. Paper is just....

      Delete
    8. In the long run the price of gold is likely tp keep up with the inflation of production cost. As such your strategy makes sense as long as you avoid overpaying relative to the only yardstick availably to assess the price fundamentals: production cost.

      Forget about the dollar collapse stories forget about the manipulatiin stories forget about the 100 to 1 paper trade stories these are just scaremongering by ceo's and newsletter peddlers that are either insane or dont know how to learn a living the honest way.

      Delete
  12. Hi Dan,
    I would like to see what you think about gold as a long term investment. I'd like to see a big picture. The gold bear is mature, it is 3 years by now, a lot of pessimism on your site in relation to gold. It must be a good sign. It is better to buy low, it is obvious, GDX lost 65%, is it low enough? If not, what is attractive level to buy? At what level/price you see gold bear market ends? No one knows exact level, but what are the likely scenarios?

    What I know for sure, is when bear market ends, gold shares will double in price within a few months, according to history. It is going to be a violent move, therefore it is better to be ready to buy at a short notice.

    Finally, it is much better time to buy now, than 3 years ago, when the majority bought. May be it is not a bottom yet, but it is going to be soon. Anyway, I think it is a better investment than SPY at this stage. What do you think? It would be nice if you could write an article about long term targets for gold, GDX/HUI, and silver. Likely lows and long term targets, say 5 years from now.
    Thanks

    ReplyDelete
    Replies
    1. - "The gold bear is mature, because it is 3 years by now". Really?
      - "a lot of pessimism on your site in relation to gold.". Really? T.A is neutral and follows price action. No emotions there. No pessimism nor optimism.
      - "It must be a good sign". Really? We are definitely the market makers for gold...
      "It is better to buy low, it is obvious". Really? What is LOW? Are you ready to "invest" long term even if it means losing during 5 years, where you could have "invested" into something else? Is it not better to buy when prices go UP and to sell when prices go DOWN? There is no such thing as High and Low. You are low and can go lower. Watch the DIRECTION, not the PRICE.

      Delete
  13. oops...quick lok at the chart...would be very easy for gold to drop to 1220 like a hot knife inside butter after leaving this squeeze.
    1220-1230 is now the area of the long term upwards support for gold on my chart, so...if it breaks...could quickly target 1180 and then...1040.
    Meanwhile, supports are here : 1220, 1180. For sure I got rid of all long positions as mentioned before. Just waiting for an opportunity to short, but gold was so weak yesterday it couldn't even break through 1268-1270 horizontal polarity zone.

    ReplyDelete
  14. And Copper now trading under 3.17, so it seems it hit the expected resistance near 3.20 and prices are still within the descending triangle (which usually ends up by a break down of the horizontal support)...the mere bounce back down towards 2.90 for copper would imho be quite devastating for silver support at 19 $, as silver would follow both gold and copper going down...

    ReplyDelete
  15. Hubert; you make good points about trading direction, not price, as what is cheap or expensive today and become moreso tomorrow. The fact that pm's are in an extended time-wise bear mkt and so that means that the end is near is also a misguide conception, as what is old can get older. Again, their emotions are getting in the way of the trend. As I see it, all commod sectors are basically down for the pull, and the $ and paper assets continue to be in demand. Only individual mkts still fighting the big picture are platinum and palladium and they are looking like they want to buckle.

    ReplyDelete
    Replies
    1. Steve, you missed feeder cattle and cocoa and gasoline.

      Delete
    2. Arnie; cocoa to me looks like a triple top; gasoline is failing to confirm rsi and macd; feeders will go higher without me, as it is notorious thin mkt and if you did not get aboard months ago, well, you missed it; besides, I am a horseshit livestock trader; if you want to look at something very interesting and you are macro bearish like me, you buy gold/sell platinum against and if I am right there could be $400 in the trade; (40k) 2 plat vs, 1 gold; good luck and take care

      Delete
  16. sorry about the poor spelling and grammar in the last post. I guess Armstrong is rubbing off on me.

    ReplyDelete
  17. Inflation is at a level that mostly never seen and if it wasn't for food and energy, we could well be in a deflationary scenario.
    One thing that sticks out which may be a major reason for inflation not taking hold especially with all this free money being doled out is that this money was never distributed to the broader market and was mostly held by the banks to do their thing with markets and derivatives while the regular Joe Blow didn't have 2 nickels to rub together. Banks and countries like China are accumulating gold and IMO as a hedge against inflation that will come. This FED tapering IMO will not last past mid year as more and more people drop out of the labor market and more stimulus will be needed as I see china opening up the spigots while having to increase their wages. As far as the gold mouth pieces, Dan you are correct and about 2 months ago I got out of all gold related products including equities and listening to so called Gurus like Sinclair who continues to live in the past while telling everyone to do nothing and stay the course, has put quite a bit of money into the coffers of those who didn't do nothing. Gold shares are trading as if gold is at 500.00, and that is because for many it now takes about 1,000.00 $$ per ounce to get gold out of the ground

    ReplyDelete
  18. Sinclair doesnt live in the past, he lives in a pastoral farm, with servants. He can afford to, because he sold 3.6 million shares, before he adviced people to "do nothing" because he would "do nothing".

    Today a press realease was issued on TRX Buckreef project obtaining an environmental impact assessment certificate.

    They forgot to change the word Kigosi to Buckreef halfway in the press release I kid you not. Its a cut copy sloppy news release.

    For 360.000 dollar per year Joseph clearly isnt motivated to do a half decent job.

    What a disgrace.

    ReplyDelete
    Replies
    1. He lives in the past with regards to his rhetoric on gold equating this time around to what had happened in the seventies. he has faltered dramatically and IMO his EGO is chiming the same story day after day though he seems to be more aloof these days without chiming prognostications on the price of gold. Sure gold is manipulated or at least managed by intervention but so is every other market in this so called free market society that idiots like Kudlow and the whole gang at cnbc like to tout.

      Delete
    2. is Joseph their publicist, Jasper?

      Delete
  19. He is the coo. His name is under the release.

    ReplyDelete
    Replies
    1. just another sociopath huh Jasper?

      Delete
    2. You said it steve. I find the knowledge that people like this exist very disturbing. Thats the religeous experience I got out of this.

      Delete
  20. I normally trade gold by looking at the last two numbers. Thus the short term behavior of gold at 1256 is the same when it's at 1556 or 1356.

    We know what happened when gold was at 1556 and 1356 and would not pop back up. It is different when it is on the way up as opposed to on the way down. A different set of rules. I think we may get a similar follow through. It just cannot get any legs here. There may be some hard times coming up the next few days into the end of next month for gold.

    Gold needs to hold the 50 level!

    The table has been set. I have been keeping my full hedge going. I think I may add to it right here overnight.

    Tonight could shape up to be one of the most important trading nights for gold in months. I will not sleep. If it cannot hold that 50 level overnight, we will surely see a test of the lows from last year. Moreover, if we test that low we will break it this time. The bullish trading posture of gold currently is higher than when gold was last at 1250.

    Here's a thought, I follow ZMan's Energy Brain for my buy and hold oil E&P plays and they are on fire this year. Yes, he is an amazing stock picker with unbelievable knowledge, but I could have done just fine by throwing darts at the oil plays. They also manage balance sheets better than the miners, which is why I do not own miners. Just about every sector is on fire. Bonds are on fire. Why would anyone want an asset like gold? I own it as a currency, but I cannot do anything with it.

    Get this about gold (or most other assets - yes, even housing) - demand drops as prices fall. This is different than for consumables. You want to see China pull back on gold purchases? It will if gold drops further.

    It is sad that so many people bought into this crap. What is sad is that those who bought gold AND ESPECIALLY SILVER know things are wrong. They are the ones who understand what is going on to some extent. I listen to these patriot shows and they are still airing the same shill crap about gold and silver.

    I am listening to Radio Liberty right now with Joel Skousen as a guest, and the gold dealer sponsors keep airing the same performance stats for gold. They keep pushing it as insurance.

    The only thing bullish about silver is that it is the most important metal for the military. In fact, there are 32 lbs of silver in each tomahawk missile. It's microcircuit attributes are without peer (save gold) and gold is still too expensive to explode into the ether.

    You silver holders out there should be hoping for WWIII, so we can blow up all that silver

    ReplyDelete
    Replies
    1. Eph
      I in the microcircuits business and know something about those kind of circuits. There is now where near that much silver in them. That's about a years usage for some good size companies.
      Maybe a unit conversion error?

      Delete
    2. Just a back of the napkin scribble but that much silver would make about 5,000 square feet of circuits at typical densities.

      From another direction. As the circuits weigh 10s of times more than the silver I don't think it would fly.

      Delete
    3. "Get this about gold (or most other assets - yes, even housing) - demand drops as prices fall. This is different than for consumables. You want to see China pull back on gold purchases? It will if gold drops further.".

      But what happens if the West can't deliver physical anymore?
      It is the theory many times repeated on "pro gold" websites.
      Is it not the game plan of Russia + China to dry western strategic reserves until the moment there will be a default on physical which would catapult prices upwards?
      Then, you have to consider it on the strategic level, and probably China and Russia would keep putting pressure on gold purchases even though gold prices drop.

      Delete
    4. Shale oil headed for a shake out due to overlevering of balance sheets.

      Don't repeat your mistake of the past by buying a sector at its TOP.

      http://www.bloomberg.com/news/2014-05-26/shakeout-threatens-shale-patch-as-frackers-go-for-broke.html

      Delete
  21. Eph- what do you base this prediction on?

    "If it cannot hold that 50 level overnight, we will surely see a test of the lows from last year. Moreover, if we test that low we will break it this time."

    ReplyDelete
    Replies
    1. I trade gold 24 hours a day, and after studying it as much as I do, gold trades in patterns. All commods trade with hidden numbers. It just works out that way.

      As I mentioned earlier, the sentiment towards gold this time at 1250 is way more bullish than when it was last time here. Even Dan says this.

      I think there are still a lot of longs holding on thinking WWIII is imminent. WWIII will come, but not until the next decade, when Russia and China get their high tech weapons up and running. Russia says its next generation missile system will not be ready until 2020. So, I see no reason for them to go the next step. This Ukraine crap will slow burn for a number of years.

      The throw-in-the-towel process could be very violent, and the timing of the year could not be less auspicious for gold.

      Delete
    2. I remember after the Cyprus bail-in when gold pierced 1600 the last time. Then that gold-dealer-inspired fear abated. Gold slowly drifted down to 1550, It hit that magic "50" number and the bottom fell out. There is something about that 50 number. To me as a trader it is just as important as gold, sometimes even more so, as it is less defended than the even "00" number.

      Delete
    3. Gold is selling off today for sure...thx for your comments

      Delete
  22. Your site is more valuable than most paid for subscriptions to those gold bug newsletters telling everybody that "now it's time to back up the truck for those gold stocks." I think I'll wait, and I'm glad I have waited. Thanks Dan.

    ReplyDelete
  23. This is still quite dangerous.
    Ukrainian elections solved nothing on the long term.
    As long as the West insists in including the "russian Cuba" inside European Union (and of course once done, a member of NATO), with its claims on Crimea intact (still considers Crimea as part of Ukraine).

    http://europe.chinadaily.com.cn/world/2014-05/29/content_17550429.htm

    This is not over.

    ReplyDelete
    Replies
    1. "Besides Yatsenyuk, Merkel on Wednesday also invited Moldovan Prime Minister Iurie Leanca and Georgian Prime Minister Irakli Garibashvili to dinner and discussed the issue of association agreements with the European Union (EU). "

      I don't know if many americans know where Georgia is (not the state, the Country :)), but I'm lucky enough to be their direct neighbour for now, so I definitely know.

      Who in his right mind that this country has anything to do with Europe and its zone of influence?
      This is just crazy.

      Delete
    2. Hubert
      I share your concern for the ignorance of my USA people and government.
      Merkel fears the return of the old USSR Putin longs for. She aims to make what was Mother Russia's buffer zone into a buffer zone for Europe as the newly independent republics have been.
      Putin clearly sees this and doesn't like it. You are correct in forecasting more trouble.

      Delete
  24. Copper : we are getting close to the daily ma20 at 313.
    Prices bounced down from resistance area level near 320.
    So, I'm taking now a small profit of 20% of my short position (in fact it was bigger than I thought, by mistake lol, so I'm a happy fool for now) and put now my stop loss order at my entry level, i.e 318.50.
    That's it.
    Can't lose anymore on that trade. Secured a small profit right now.
    Now it's all about no loss or earn more.
    That's usually how I manage to make money on the long run, even if I don't know if it's the best method : secure the cash I have first. Diminish the risk.

    My next sell should now be around 30% of the initial line, once / if we keep diving towards 290 horizontal support area.

    ReplyDelete
    Replies
    1. good timing on the red metal Hubert; you took no heat at all; where are you btw? Armenia?

      Delete
    2. Hi Steve, yes back to Armenia after 4 months in Algeria earlier this year... boring to live there but for holidays, it's quite nice.

      Delete
  25. 15kg of silver in wiring, contacts, solder and batteries. Granted it was mentioned by Max Keiser on his show and blog during the Libya attack, So it is not just microcircuits. Of course, 15 kg would not be used in microcircuits. Evidently it is used in wiring, as copper/lithium is not good enough.

    OK, let's not conduct the old fashioned ad hominen on Max (i.e. discounting all he says, because he was wrong on gold prices).

    Covered half the marginal short at 1250 as it bounced right off as predicted. It bounced hard. A good sign, but we need to see follow through. Still fully hedged. I think we may see a respite from a further fall today as GDX is trading relatively well in pre-markets.

    The US is talking about lifting the export ban on oil. We are swimming in it. The dollar will continue to be the go-to currency. The Triffin paradox was alive and well, ready for the mindless to conclude the dollar was about to collapse, but imagine we become an oil exporter. I didn't say NET exporter. I now think that I have to be very deliberate in every word I say, lest many who half read things jump on me.

    Who would ever think? We are swimming in oil, nat gas and coal. This country, despite it being the most evil nation, we are still the envy of the world. Not jealous. Jealousy means they want to be us. Being the envy means they want our position and circumstances. This is what will lead to war. The other major powers will want our position, as the US is now capricious in wielding its power.

    The E&P plays are up so much over the past year, that there is downside protection as profits are there. Of course, buying them here is not recommended, but that would be like buying gold above 1600. I am sure most here did not do that.

    ReplyDelete
    Replies
    1. Eph
      I will search for a technical verification of the 15kg figure. At that rate one should stake a claim at each strike site.

      Delete
    2. Eph; My question is, "Who dies first, KWN or Max Keiser?" Second question is why do you call us the most evil nation? take care champ and enjoy your weekend; sparks

      Delete
    3. The United States is being positioned to be the "Nazi Germany" of WWIII. This is the only way the people in the US will go along with global govt. They need to make us look evil (not percieved by the people in the US, but by the rest of the world.) It is working as planned. The people in the US are clueless.

      Like I said, be careful to discount everything based on ad hominems. It is easy to do, for it doesn't require a lot of thought and research. Do not fall into like everyone else. Have a good weekend, "Champ."

      Delete
  26. Here is a report regarding US energy independence: (warning PDF)

    https://csis.org/files/publication/130103_us_energy_independence_report.pdf

    ReplyDelete
    Replies
    1. We will continue to find "new" sources. They will be trumpeted like miracles and gifts in the press. One after another, so by the time war is close we will look and see that the US has secured its needed energy sources within N.America. Of course, most of them were already known about decades ago when the major oil concerns plugged them up for this time in history. The globalists figured to use up as much foreign oil as possible, and then when the time was right would begin to develop "new tech" to uncover this new founded oil.

      Keep in mind the next economic downturn will see a marked decrease in gasoline consumption, just like the last "collapse" of 2008.

      I do not rely on these reports as they are often published by the globalist-controlled think tanks. I see trends and act accordingly.

      Delete
  27. I trade gold 24 hours a day, and after studying it as much as I do, gold trades in patterns. All commods trade with hidden numbers. It just works out that way.

    As I mentioned earlier, the sentiment towards gold this time at 1250 is way more bullish than when it was last time here. Even Dan says this.

    I think there are still a lot of longs holding on thinking WWIII is imminent. WWIII will come, but not until the next decade, when Russia and China get their high tech weapons up and running. Russia says its next generation missile system will not be ready until 2020. So, I see no reason for them to go the next step. This Ukraine crap will slow burn for a number of years.

    The throw-in-the-towel process could be very violent, and the timing of the year could not be less auspicious for gold.

    I remember after the Cyprus bail-in when gold pierced 1600 the last time. Then that gold-dealer-inspired fear abated. Gold slowly drifted down to 1550, It hit that magic "50" number and the bottom fell out. There is something about that 50 number. To me as a trader it is just as important as gold, sometimes even more so, as it is less defended than the even "00" number.

    ReplyDelete
    Replies
    1. The "50" number has more profit potential than the "00" number as it is less defended and catches a lot of people off guard. The brokers/dealers ran the price through the "50" number with vigor, so that the market sell stops would get crappy executions.I am sure that someones 1249.5 market sell stop was executed at 1246.

      Delete
  28. Eph, you believe that 1220 will now be tested ?

    ReplyDelete
    Replies
    1. It is hard to tell. I see gold popping up for a test of 1250 here this morning. The traders will be adding to shorts at that point. I will add back.

      Gold trades in 20's. 1225-1220 could be seen early next week. Friday is a good liquidation day as many do not want to be long a risky asset going into the weekend. What makes this disconcerting to gold longs is that the price action is "proactive" and "organic" rather than reacting to economic data like employment numbers.

      Look, I own a lot of gold and will not sell. So, it is bittersweet to see this. But I would be very foolish to not act objectively.

      What can happen to gold is up to the imagination. A whole month is a long time. June for gold is like October for stocks. I gotta go.

      Delete
  29. The last 3 years will go down as the most horrific bear market ever.

    In the gold sector.

    Worse than the 2000 - 2002 Nasdaq plunge, this bear market is already way beyond that duration.

    Worse than the Dow Jones crash in 2008 - 2009. Again, this bear market far surpasses that in the degree of the drop and its duration.

    And to this day....

    Not one of the "acclaimed experts" and "gurus" have uttered a mea culpa.

    Or apologized for the biggest blow call in market forecasting history.

    Those guys should be expunged from the investment world permanently.

    Far worse than cheerleaders like Cramer, Kudlow, Liesman, or any of the other CNBC pundits.

    ReplyDelete
    Replies
    1. I hope that if and when gold goes into another bull market, and they proclaim that they knew it all along, you will be around to shout, "shut the f**k up" charlatans.

      Delete
    2. Mark, if their lips are moving..........

      Delete
    3. Mark,
      Gold went up approx. 10 out of 11 years until 2012 . It is only down approx. 35% from its high. That is a hardly the most horrific bear market ever. When did the general stock market ever go up 10 of 11 years .The NAS lost 80% in value from 2000 high to the low in late 2002. GDX is down approx. 65% from hits high. Your hyperbole sounds like the gold guru's you love to trash. Not that don't deserve some trashing.

      Delete
  30. Jasper, it is early, but your cocoa looks like it may put in an island top today; your feeders and gasoline are looking to put in double-tops, so if I am right, only Mark's palladium and platinum are still standing and it looks as though they also are wobbling. The only things worth owning are $, bondolas, and of course, STAWKS. Look for Europeans to go negative and Abenomics to go into the ashcan of failed policies as Bass is proven right and the Yen goes seriously south. Have a good weekend.

    ReplyDelete
  31. the worst thing is that the precious metal charlatans have used fear to sell their story, all the while making money off their clicks, subscriptions, and pumped stocks. meanwhile their frightened flock of sheep, being so much easier then to lead, were guided into the chute, up the ramp, into the truck, and off to slaughter. the greed mongers on CNBC at least can say that they didn't scare their audience into betting wrong, and losing everything, no matter what happens in the general markets going forward. there is something profoundly wrong when con men use fear to soften up their marks.

    not even a peep of regret, they boldly proclaim that they have not lost anyone any money yet. the guy out of work, who has to sell retirement funds to stay afloat is reminded everyday what a moron they are for not just waiting one more month, for not buying one last dip, for not keeping the faith, for being a traitor. just keep holding. we are almost to the promised land (Armageddon)

    well at least one of the biggest shills in the space has not had the audacity to ask for donations lately, or cynically stage a self serving charity event. the last shearing of the sheep, and the new "business" model, yes that is what he called it, should get the bastard all the way down to 1000 gold.

    ReplyDelete
  32. http://www.cpc.ncep.noaa.gov/ Once again the Bulgarian Bullshitter who
    runs zerohedge puts out bad info on El Nino. He is now leading Gentleman Jim, Uncle Max, Egon, and Grandpa Russell in the race to the bottom of the Credibility Barrel. More bad information on the web than good, so take care all and have a good weekend.

    ReplyDelete
  33. Silver just broke to new annual lows.

    Nothing short of "massive destruction" for those who invested in SLV lately.

    ReplyDelete
  34. Anyone who invested "all-in" on the most popular muni-bond ETF's at the "Taper" lows last year made a killing.

    Exhibit A is MUB, which is up 9% in 9 months, plus tax free interest income.

    Paper rules. People simply cannot get enough of it, no matter how much is printed.

    Never before have so many gotten rich and retired by investing in paper schemes like junk bonds, muni-bonds, leveraged loans, and PIIGS debt.

    Gloom and doomers who bought the "Any Minute Now, I Swear, This Is It!" story and loaded on PM's basically have lost so much money they will never be able to recover.

    ReplyDelete
    Replies
    1. There is this guy on the facebook mineset group. His name is Bruce. He lost the savings that were ment for his children studies. His wife left him and his own daughter blocked him on facebook.

      He just goes on and on about how great Jim is to do this all for the common guy, Jim being a billionaire and all. This guy will hear not critical thought about Jim. He thinks Jim is a saint.

      I would block him too if he were my father. Its simply too much to see your own father bamboozled like that.

      What a tragedy.

      Delete
    2. Jasper; Like I always say, "lots of speculators, traders, and gamblers, deep down inside, want to lose". I also call it a "suicide tape"; ttyl, sparks

      Delete
    3. I very much agree with that statement. And there is always someone one there to push them in front of a bus.

      Delete
    4. Guys,
      You are going a bit too far imho, I mean you can't blame blog managers for the weakness and stupidity of some of their readers.
      I'm not sure the main intent was to manipulate weak brains into buying a few more ounces of gold.
      I understand those guys are no saints, but I don't think they are demons either.
      I don't want to defend anyone here, but let's stop blaming them for everything, all we will do is lose our credibility as they lost their.

      Delete
    5. I agree Hubert, anyone who loses their ass in these distorted markets has no one to blame but themselves. Put on your big boy pants and quit whining.

      Delete
    6. Anyone that has been paying attention to sinclair understands he a pathological liar that has been milking trx on the back if his reputation.

      You dont like my exposing that- your problem. Quit whining.

      Delete
  35. DBC is breaking badly. Dead cat bounce in the CRB Index seems to be over.

    XRT and XLY rallying again as the consumer is ebullient with crashing commodity prices again.

    John Williams leaning forward in his chair, staring bug-eyed at the computer screen watching the chain-selling across the board in PM's, oil, ags, etc.

    Wondering who hit him in the head with a baseball bat.

    ReplyDelete
    Replies
    1. lol Mark :)
      Even if you are not really objective imho, it's a good laugh to read your comparisons :)

      Delete
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    ReplyDelete

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