“Woe to the land whose king is a child and whose leaders are already drunk in the morning. Happy the land whose king is a nobleman, and whose leaders work hard before they feast and drink, and then only to strengthen themselves for the tasks ahead”. (Eccl 10: 16-17)


"When misguided public opinion honors what is despicable and despises what is honorable, punishes virtue and rewards vice, encourages what is harmful and discourages what is useful, applauds falsehood and smothers truth under indifference or insult, a nation turns its back on progress and can be restored only by the terrible lessons of catastrophe." … Frederic Bastiat


Evil talks about tolerance only when it’s weak. When it gains the upper hand, its vanity always requires the destruction of the good and the innocent, because the example of good and innocent lives is an ongoing witness against it. So it always has been. So it always will be. And America has no special immunity to becoming an enemy of its own founding beliefs about human freedom, human dignity, the limited power of the state, and the sovereignty of God. – Archbishop Chaput


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Monday, June 2, 2014

ISM Statement

"We apologize for this error. We have recalculated and confirmed that the actual index indicates that the economy is accelerating. Our research team is analyzing our internal process to ensure that this doesn't happen again".

The May reading finally came in at 55.4% up from the April reading of 54.9%.

ISM noted that their software incorrectly used the seasonal adjustment factor from the previous month.

It is interesting seeing the bond markets react with such vehemence. The stronger number in the New Orders Index, 56.9% compared to the April reading of 55.1%, is the 12th consecutive month of increases in this reading. Bonds seemed to focus on that today. The result was a bump higher in long term interest rates.

Sadly none of this is going to stop the mouths of the conspiracy crowd who see evil intent lurking behind every proverbial bush.

"It's all part of the sinister plot to drive the gold price lower". I guess the ISM folks have now gotten engaged and have joined the cabal.

I would watch for the Transportation Safety Administration ( TSA ) to be the next collaborator. They will order machines to beep when gold is detected, either in the form of jewelry or bullion, with the express purpose of seizing it from all air travelors in order to provide additional supply to sell into the market to drive down the price.




67 comments:

  1. Agreed. Following the money is better than following conspiracies.

    ReplyDelete
  2. Anyone holding gold and looking at a chart of Delta Airlines as an example must be ready to vomit.

    No wonder Ecuador is loaning its gold to Goldman Sachs, it can use the cash to buy stocks and actually make something, rather than hold on to a wasting asset that goes down in price day in, day out.

    If the XAU doesn't bounce hard tomorrow, then I will admit that I was DEAD WRONG about forecasting an imminent bear market rally worth trading in the PM shares.

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    Replies
    1. Mark - I closed my DUST position today -- decent 3.5% return, but it wasn't convincing into the home stretch. Also--the only good performer in the sector, RGLD was up a hair + even some of the whipping boys (KGC) were flat. The last few days DUST was retreating back from 200dma & MACD indicators aren't convincingly strong. I'll check back tomorrow if the fireworks haven't already taken place.

      Regarding DAL--In retrospect, it shouldn't be surprising, right? Airlines are a bit like utilities in that they should thrive in a deflationary setting--low interest rates to reduce their cost of capital, weak to steady commodities mean oil isn't killing them + the once in a lifetime opportunity to bust unions and destroy labor in 2009.

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  3. What were you thinking, mark?

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  4. You gotta admit whether you are a gold bug or not, the economic reporting in the US sucks and would probably make the folks at the old Soviet controlled Pravda blush. After the initial ISM report, the ISM numbers were then changed TWICE today because of alleged errors...you can't make this shit up!!!

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  5. ye ole 'crb' now know as CCI is really in the dumps. if the energy complex is topping that may have CCI looking at a trip to 530 support, and generally better to be out of commodities until the 6 month report cards print end of june.

    http://stockcharts.com/freecharts/candleglance.html?$CCI,$WHEAT,$CORN,$SOYB,$WTIC|B|H14,3|

    the CCI, wheat, and corn have ye ole ira epstein 'embedded stochastics' which mean the downtrend is getting stronger.

    old crop ags have got to start rolling out soon, some index fund roll start this week, so it was a dangerous game trying to run old crop beans today based on 'we have no soymeal left in the usa' and a good export inspections number.

    cheers!

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  6. gold loves to test round numbers, and if it cannot retake 1250 overnight and stay there the next round number to test is 1200. i am concerned that the 1250 spike this morning was immediately beaten back with an ugly stick. gold in the 1240s is acting the same as gold in the 1290s. Instead of 1300 we have 1250. even gold-bullish unemployment numbers won't be able to succor in establishing a countertrend rally if 1250 is not taken back. gold will be stuck toying with the bottom half of the 1200 range.

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    1. I was expecting a bounce right on 1240 because of the 77% Fibonacci retracement of 1180-1435. It occured, but the bounce is weak indeed. To have a chance to remain in a range, gold should be able to test the next Fibo at 1277, or at least its polarity line at 1268. None of that happened. I'm watching 1240 for signs of a crack. Let's see.

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    2. I agree. 1240 crack is close. I think ADP and friday's employment data are keeping things muted. Up to now, since the Ukraine elections post price adjustment from 1290 two Sunday nights ago, price movements are "orderly." It looks like any crack will not come until we get closer to Friday or if the ADP number is higher than expected, and holders get spooked and dump.

      If the employment data is near or above expectations the June weakness tendencies will manifest.

      Tomorrow's ADP data could prove more important than usual.

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    3. Hubert; Eph;

      I agree - the markets looks heavy but is waiting for employment data. The pattern looks to me like it will take on a stair stepping move lower IF THAT DATA is strong. Drop, move sideways to drop, drop, move sideways to lower, etc... in other words, a grinding move down.

      Time will make us all geniuses as we can predict what will happen AFTER it happens! :o)

      Good trading to both of ya...

      Hubert - I cannot read French so I am guessing those articles you posted the links to were pretty good.

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    4. There is NO SUCH THING as a 77% Fibonacci retracement - this is total and under nonsense, as anyone with even the slightest understanding of the harmonics of 0.618 would surely know

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  7. Another "Chart of the Ages" is Marriott and Hyatt.

    Marriott, as an example has gone from $20 to $60 the entire time the gloomers were screeching "any minute now, I swear!".

    Believe it or not, even at $60 it still pays a dividend which is more than double that of Newmont Mining.

    I don't think there has ever been another period in history where the consumer has been stronger.

    Spending your days in a bunker stacking and getting your "guns, gold, and getaway plan" together may well prove out to be a monumental error. Years of life frittered away in fear for nothing.

    And looking back at the last 5 years and realizing that we have been witnessing and living through one of the greatest golden ages in financial market history. A once in a lifetime event where stocks are soaring, interest rates are ultra low, and there is no inflation.

    I mean really, it doesn't get any better than that. An economist writing a "fantasy novel" 20 years ago would never have dreamed that such a situation could actually occur in real life.

    ReplyDelete
    Replies
    1. Question Mark, you state:

      "I don't think there has ever been another period in history where the consumer has been stronger"

      Are you referring to the consumer who represents the 62% in the work force or 48% of the consumers who have dropped out or cannot otherwise find work?

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  8. Of course they want to sell an economic recovery or get re-elected Dan, most of the numbers are not believable, thats why they call the data "Seasonally Adjusted" They admit they manipulate the numbers.

    It could also be called "Well Seasoned Data"

    I don't recall a negative monthly jobs number print in years now. Not very believable either. "Well Seasoned Too"

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    1. terry7;

      The problem for many investors/traders out there is that those who have been saying that the economy stinks have also been saying that the stock market is going to crater and collapse as will the US Dollar. That has kept many who hold to this view, completely out of the broader stock market being afraid to put their money into anything except gold and perhaps silver, as they waited for the inevitable, any minute now, collapse in stocks. By so doing, most in that crowd have missed some very good investment opportunities in other sectors that have performed very well.

      AS I have said many times here, one can believe whatever they want but they have to respect the tape in order to be successful in investing or in trading. One may not believe any of the economic data and they are free to argue their viewpoint, but the problem is that the broader market, acts on that data and the markets move in accordance with that. Fighting against the majority is not a recipe for gains;

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    2. I agree Dan, don't fight the Fed, they wanted stock markets to go up and thats exactly what has happened. Many have missed that train ride up sitting in gold or silver. But it is fantasy land that probably won't end well unless printing money now fixes all.

      The Fed also openly admits they are manipulating the bond markets, and support the stock markets and housing mortgage markets for example.

      All manipulation/distorting these asset prices. What ever people want to call it. The Fed is controlling prices.

      The banks then get caught manipulating libor and then have to admit it.

      Up until then everyone would say its a conspiracy theory that libor was manipulated. Not anymore.

      So the real question then becomes what markets are these guys not manipulating?

      Was it not Volker who once said "gold is his enemy?"

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    3. Terry:
      "So the real question then becomes what markets are these guys not manipulating?"

      It's pretty basic - they constantly manipulate every market except gold. Pay attention. They used to manipulate the heck out of gold, but they're on gold manipulation vacation.
      (sorry, couldn't resist)

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    4. No problem it was funny and actually kinda gets my point across. :)

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    5. Terry,

      Completely agree with you.

      I asked Dan to watch the following presentation and await his comments on the same :

      Stephanie Pomboy Wine Country Conference 2014 "Confessions of Ben Bernanke" https://www.youtube.com/watch?v=fKviBNo76iI

      Delete
    6. Barclays & Deutchebank were found riggin the London Gold Fix, and yet Dan says : " NO CONSPIRACY " , "STAY WITH THE HERD in Equities"

      Delete
  9. Dan, with respect, you try way too hard to discredit gold bulls. The ISM restatement? Who, exactly, was frantically pointing at that as evidence of gold manipulation?

    Zero Hedge, a site that you and many of your commenters associate with over-the-top gold bullishness and related conspiracy theories, published several posts on the ISM statement today. I did a quick count, and found that of 329 comments, a grand total of 12 included the word "gold". Three percent.

    Just sayin'.

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    Replies
    1. Paul;

      I do not have to "try" to discredit the "gold bulls" - they have discredited themselves to any fair-minded, objective observer of the markets.

      Also, there is a difference between a "gold bull" and a gold bull who sees conspiracies behind the reason that gold is not rising. It is the gold perma bulls who see the evil cartel behind the move lower in gold as the ones who have been discredited.

      There is a line of thinking that says every economic report is deliberately misleading, deliberately falsified so as to put the best possible image on the US economy. Many who feel that way believe there is also a conspiracy of misinformation or more accurately, disinformation, to paint the US economy as being much better than it currently is. Some who hold to this view also believe that this is being done so as to portray the Fed's decision to taper back on QE buying as being successful. The thesis is if the people knew how lousy the economy really was, the Fed could not taper and would be forced to reverse the tapering, which in their view, would drive the gold price higher as it would drive the US Dollar lower.

      I am not wresting their views - I am accurately portraying what many of them who hold to the gold manipulation theory believe and write.

      They have course been saying the same thing for the last three years that gold has been in a bear market.





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    2. Granted, I am long gold in the long term and not a trader. But reading the comments I think the bearish sentiment twords gold is a good thing. Markets become imbalanced and corrections are normal.

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    3. Dan, based on recent data institutional money has been moving out of stocks and the retail investor has been moving in...have seen this movie many times before. Screw me once shame on you, screw me twice shame on me....not going to going to play in this pig pen. This market is over extended and is being driven by company buy backs through the increase of debt on their balance sheets under ZIRP. The market may continue to levitate but not with me. I'll try to grow my business instead and park some of my profits in hard assets on the dip. Screw the wall street bastards.

      Delete
    4. R.Bart...I hope you don't use "reading the comments" as a reliable indicator?
      I mean, if you want to know more about sentiment, at least use some real indicators.
      You may go have a look of some charts used by CliveMaund in some of his free analysis (don't subscribe to the paid service though : Clive has been right once about hedging gold just before the break through under 1530, but has been forecasting a bounce ever since based on COT reports, which proved him wrong).
      Make some backtest and see if it's enough of an indicator. The answer will be no. Even if it were a great indicator, you never use one indicator as a sole confirmation to get into the market.
      More of a real trader you'll find at Eric de Groot insight who also provides with free posts if you want, and describes how he uses difusion index, concentration, % of bulls/shorts in the market, some other ratios to guess if money flows are going in our out, etc...
      If you rely upon "reading the comments" ???, well yes, you said it, you are not a trader and you are simply going to be crushed.

      Delete
    5. P.S : markets can be imbalanced for quite a while. Correction phases can worsen into complete capitulations. Look for "trading, capitulation" in google, maybe it will prepare you to see one.
      If you think that "being a long term investor in gold" will save you from the gut feeling that will urge you to see it all when you see gold losing 100 $ a day way under any price level you thought was possible, think twice, because most people are not immune to that, and that's why capitulations happen (along with covering unsustainable losses, see what happened mid april 2013).
      This is not to say capitulation or gold price collapse will happen.
      This is to say don't presume you'll be able to hold steady if you see a big drop in prices and you hold too much gold on the long side when (and if) it happens.
      I'm not telling you either that you should sell your physical.
      But it could be wise to consider hedging some of your position via paper contracts if you see that gold is in a bear trend and is likely to push lower.

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    6. (Which major economic indicator's composition/calculation hasn't been changed to make things look better for the economy/government?)


      Dan's made his point abour price manipulation repeatedly - gold goes up and down based on traders' sentiments. If there is manipulation it is not enough to move the market off a bull or bear trend.
      Does that nutshell it, Dan?

      I think he brings it up repeatedly, unprompted, because he's still not totally comfortable with it. He acknowledges that central bank manipulation of the price is _legal_ in the US, and that they have done it repeatedly in the past. His BEST GUESS (that's all it is, folks, an informed guess) is that it is NOT happening at present.

      Next week? Who knows? It all depends upon the prospects of the multi-generational, $multi-trillion, planet-spanning and dominating US dollar project. Does any serious person think that they are going to let a barbarous relic endanger the source of their wealth? Not if they can prevent it, and they will try (as they have tried in the past, conceded even by Dan). How many times do people have to prove they will do anything for power and wealth?
      Whenever the discussion gets to this point, he doesn't seem responsive. I made the point the other day that if you look at thirty spikes on the chart, we have no idea if zero, one, twenty, or thirty is normal market action as opposed to proxy trading. An already dropping market is the perfect place to disguise proxy selling. Dan's position is really just his best guess (no disrespect Dan, but that's all it is for all but the insidiest insiders.)

      Delete
    7. " If there is manipulation it is not enough to move the market off a bull or bear trend. "
      Allow me to humbly disagree with that one.
      It depends on the time unit.
      I believe "manipulators" quite capable to exert a real influence on gold prices for months. On an uptrend, by capping key technical levels and discouraging buying, they can revert the trend down.
      Most of trading orders are momentum based, algo based.
      You don't need many gunshots to start an avalanche when there is enough snow on the mountaincap.
      Now I don't think the "manipulators" are "all powerful" and can fight against a strong uptrend when it is on the march.
      The fact that gold is now heading down / range bound cannot be explained simply by "manipulators" theory imho, but mainly because gold prices needed a break anyway.
      "Manipulators" can reinforce the trend, accelerate the plunge, etc...at key levels. But reverse the course of gold's price forever? Nope, I strongly doubt it.
      But that's only my personal point of view :)

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    8. Gregory;

      Seriously? The first time you psychoanalyzed me, I thought it was rather humorous and offered to send you a payment for your services. I have to say it is getting old at this point.

      Fight the tape - lose money - read the tape successfully and correctly read sentiment - make money.

      End of lesson.

      Either you get it at this point or you do not.

      When the Dollar begins to sink into oblivion, when the commodity indices all begin screaming higher again, when real interest rates turn negative, when the TIPS spread changes, when all the FUNDAMENTAL FACTORS that drive gold into a bull market become present once again, I will change my stripes.

      Believe what you will about gold manipulation. Those who keep believing that crap and have fought the tape have done nothing but lose their wealth. Stay with it however and go down with the ship if that makes you feel better about yourself and about psychoanalyzing me.

      That you have not taken my advice, and tried trading old crop soybeans or coffee, for example, shows me that you have no intention of actually learning how the futures markets work and what is the normal trading activity of this era.

      Have a pleasant day.

      Delete
    9. Another paper tiger.

      You still think I'm making an argument about trading, I'm not. You repeatedly bring this subject up and immediately construct a paper tiger: Those who believe there is PM manipulation are not interested in market action or making money trading, their focus on manipulation precludes it.

      That's wrong. They're not mutually exclusive. It's a convenient argument (really old, now, since you beat it to death) that you can trot out when you don't want to address arguments about manipulation (in spite of your bring it up pretty much DAILY).

      I got what I wanted, which was the truth. Twice I VERY EXPLICITLY said that your notion that there is no manipulation occurring in metals NOW is simply your best guess and nothing more. You apparently agree.

      Guessing what someone thinks is psychoanalysis? I think it's actually called 'guessing what someone thinks'. Seriously, Dan, you pound on the gold bulls mercilessly (no distinction made between earnest investors and hucksters lately, just "gold bulls'). You're gonna catch some flack. If you don't like it, ban people who argue with you and just preach to the choir.

      Why aren't I trading soybeans? How do you know what I'm doing? Is that psychoanalysis?

      If you're going to beat this horse over and over, expect some flack. if you want to end the flack and bring people around to your way of thinking, try being more responsive. You seem to spend about half your time here on this argument and you are not changing any minds about whether manipulation is ongoing. You simply repeat the same arguments over and over. It's probably a waste of your time, and forgive me for saying it is (at least now) self-inflicted. I would be frankly amazed if I was alone in this thinking.
      No one is arguing that because there is PM manipulation you can't make money in the market by reading the charts. Please, at least for this discussion, fold up that paper tiger and save it for an argument where it's actually relevant.

      Thanks Dan

      Delete
    10. Gregory;

      No one is forcing you to come and read here at this site. This site is for TRADERS and serious INVESTORS who study price charts and market sentiment in an attempt to profit accordingly.

      What the hell do I care if some banks want to try to manipulate or influence the gold price at the Gold fix? It is irrelevant to me as a trader or investor.

      What happens among the gold is always manipulated all the time crowd is that they continually confuse or deliberately obfuscate cause and effect.

      First, the theory is that there exists an evil banking cartel that sells inordinate amounts of gold contracts at the Comex and which is responsible for all sharp selloffs at that venue.

      This is the realm in which I operate so the only thing that I care about as far as that theory goes. The fix is irrelevant in that regard because it occurs only twice a day. No market is stagnant - they move up and down all day long. How many times have you seen gold move lower early in the session only to watch it move later on in the session? It happened today. Why? because market conditions and sentiment changes all day long. So who cares what happened at the fix later in the session? No one.

      It is the same thing as watching the grain markets respond early in the session to a big USDA crop report only to reverse course later on in the session. What happened? It was a shift in judgment of the players that the market had moved too far in one direction and was now correcting. Some of that takes place because shorts decide to book some gains or longs might decide to take some profits. Who cares for the reason? It just moves.

      You seem to believe that because a large bank might make an attempt to move the gold price for a short term objective that somehow that action causes investors to dishoard gold from the ETF, sell mining shares, buy general equities, bid the Dollar higher, jettison the Euro, influence interest rate, skewer inflation expectations the rest of the day, week or month. Etc. In other words, the attempt by a bank to move the gold price at the Fix changes the sentiment across every major market on the planet and causes investors to act accordingly.

      I put up a chart last week, ( you obviously missed that one as well ) point out that the day on which that trader was accused of manipulating the gold price at the fix in order to get out was the BOTTOM in the gold price for the next few months. The market went straight up from that point. In other words, you are once again completely missing my point - the fix is irrelevant to the bigger trend of the market. It is just a blip on the radar. So why are you so obsessed with something which does not alter the trend of the market?

      Delete
    11. Gregory;
      here is the rest of my response

      So answer my question - are you trading soybeans or not? Are you trading wheat or not? Are you trading coffee or not? How about cattle? Hogs? Sugar? The reason I ask this is because if you were, I would not have to explain the big orders that regularly occur in the futures market all the time. You would know from first hand experience. That you continue to argue that the big sell orders that occur during thin Asian trading hours or at certain hours during the pit session are evidence of a conspiracy to manipulate the gold price is simply foolishness.

      I am telling you what happens across the entire commodity futures markets all the time and you are in effect saying: " I don't care about what happens with those markets, I know because I see it happening in gold that it is evidence of price manipulation.

      Go ahead and believe that if it makes you feel better. I honestly do not care Gregory. But I will say to you the same thing I have said to many others here, for someone who is a died in the wool true believer that gold is manipulated, why do you even bother wasting your time owning it? Common sense and investing prudence dictates that one buys things which they expect to move higher. If the manipulation you believe in is so powerful, so effective, so widespread, then owning gold is the choice of a fool.

      I own the metal because I want the insurance it provides against geopolitical events, currency events, etc. It throws off no yield and thus can only rise when fear or uncertainty exist. Barring those, it does nothing but tie up scarce capital.



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    12. Gregory;

      Here is the third part and the last thing I am going to say on this subject to you. If you do not get it by now, you will never understand.

      What irritates me the most is that I have already written these things and feel like I have to waste my valuable time dealing with thick-skulled individuals who cannot read what I have said before and force me to say it again in the hope that they might finally get it.

      Let's just assume, that the bank(s) at the fix were operating so as to manipulate the price of gold. considering first of all, that such things have no impact on the larger trend of the market, but even if they did, that is an ENTIRELY DIFFERENT MATTER than that posited by the gold conspiracy crowd which states that it is the GOVERNMENT behind the conspiracy and that it is the true source of the attack on the gold price. The feds, we are told, use the bullion banks, usually Morgan and Goldman are the chief culprits in their view, that are doing the selling. But that is for the purpose of driving the price lower so as to discredit the metal leading investors to ignore it and buy something else believing that there exists no inflation or that the currency markets are sound.

      Here, in the case of the individual trader that was employed, the regulators (who by the way did their jobs and levied those fines when they were alerted to this) mentioned that the purpose behind the manipulation attempt on that particular day in question for which the firm was fined, was to prevent the payout to a client over an option position.

      To stretch that like some sort of contorted rubber band and to extrapolate that "this is evidence that an evil cartel is doing the work of the feds to suppress the gold price at their behest" is intellectually insulting and a non-sequitor to those who prize truth and logic.

      Attempts to influence price action occur in the markets that I trade fairly regularly. I grant that easily and concur. But that DOES NOT mean that I attribute such things to the government which is using a nefarious cabal to do so. What it is, is big players moving the markets in their favor. Guess what?They do will do again and again until they meet someone as big as or bigger than themselves who can meet them on the field of battle.

      Now, if you want to believe that some banks attempted to influence the price of gold at the fix in order to BENEFIT THEMSELVES, you will have no argument from me. But if you are saying that this is proof that the government is trying to drive the price of gold lower by using an evil cartel at the Comex to sell huge lots of paper contracts and has been doing that for the last three years, guess what? You will find no agreement with me on that.

      Do I make myself perfectly clear? I hope so, because I am not going to spend any more of my preciously scarce time in attempting to help you understand how the FUTURES markets work and what moves the price and why.

      Delete
    13. Ignore him, Dan - he is quite obviously trolling you as a proxy for getting a life. Trying to engage with someone inent on dismissing a reasoned argument as a "paper tiger" is futile. The guy clearly has the "transmit" button taped down, and isnt listening to a word you say. Humouring him is merely offering a lame form of self-validation to an argumentative fool

      Delete
  10. Let's keep following track records.
    Bo Polny once more (unlucky, I was following him a bit lately) was posting nice charts on another blog where he was showing that USD idex was collapsing and headed towards 72, and you wouldn't see the 80 level again.
    I'm not bashing here. Those guys just disappear for a while when they are wrong and re-appear a bit later with some brand new charts and forecasts. So just keep your memory on their track records.

    For now, Marting Arstrong's forecast on gold is nice : he said under 1251 level by month's end, gold was prone to more decline. Gold bounced and hit his level of 1251 before reversing course downwards. Let's see what happens.

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  11. I think as long as the Herd believes that QE is ending like they have every other time only to see QE be started again but still remain in paper assets anyway, then gold is going nowhere.

    Only when the Herd gets worried about holding paper will gold move up.

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  12. Detecting that the trend is up or down is not enough to decide to buy or sell :

    Right now on gold, the trend is down on the daily time scale, but the market seems oversold, and especially, prices are outside the Bollinger Bands.
    As prices remain statistically very rarely outside bollinger bands, and the inf bollinger band is above 1240 level, it is therefore very risky to sell now, even if the trend is headed down. I'm waiting for a bounce on prices. If this bounce doesn't come, I will not short.

    Right now on SP500, the trend is obviously up, but :
    - prices are hitting both bollinger sup on the daily and weekly time unit.
    - it's the eigth consecutive day that we have new daily highs. We are nearing overbought conditions, especially if we manage to make another 2 or 3 consecutive highs on prices. It is very rare that a market manages to make more than 11-12 consecutive highs and keep going up. Probabilities add up quickly for a correction. So the opportunity I'm waiting on SP500 right now is to short the market pretty soon on the faster time units, for a quick counter trend move within the longer trend upwards move. But buy SP500 now? No way. Same reasons as gold, but reverse.

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  13. Dear Dan,

    The problem is that your vision is clouded by the manufactured economic data which is coming in rosy.

    Its better you check the reality on ground level about the US economic recovery.

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    1. Shark;

      I am under no illusion as to what the current lawless administration has done to the country, both its military and its economy. That being said, as I have said ad infinitum, ad nauseaum . successful traders/investors do not argue with the tape. as long as the biggest players on the planet believe the economy is improving, why cut off your own nose to spite your face? Stop fighting them and go with them.

      Delete
  14. Hi all,
    As everybody know, France hasn't recently been very bright in terms of geniuses shown to the international scene : Hollande, Lagarde, Fabius, Picketty, au secours!
    So, to save our honor and pride, at least in the category of trading, to show you don't need to be a Texan to trade, and to encourage you to learn our bioutifoule langage, here are two interesting links from interesting real traders (Bernard Prats Desclaux and Gilles Leclerc) just like Dan, imho for the french speaking community of this blog.

    http://www.univers-bourse.com/analyses/analyses/bulle-or-not-bulle

    http://labourseauquotidien.fr/amende-de-bnp-paribas-consequences-en-termes-de-trading/

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  15. Mark, I know that you are a devoted disciple of Grandpa Russell, so I want to make sure that you go over to your favorite spot, KWN, and see how once again they plumb the depths of reality. Kind of reminds me of how we would skip 6th period in high school and go over the bridge to Bay Meadows or down the Nimitz to Golden Gate Fields, to get our tips for the last few races from the 60 year veteran touts. Upon closer inspection though, they all had holes in their pants, a flask in their back pockets, and teeth that looked like they had just finished chewing broken coke bottles. But of course they did have the 3rd race right last Wednesday! Just a little levity everyone and stay with the trend and ignore the noise!

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    1. Oh, my. They are calling Russell's gold bottom call from last June as "One of the greatest market calls in history." Never mind he's been making the same call every day for years.

      To me, this means it's for sure that we'll see new lows. 1170's (or worse) here we come.

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    2. SInce 6/27/13, GLD is up 3%. SPY is up 20%. Yeah, that was one heckuva call, Mr. Russell.

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    3. Eric, it is sad, personified!

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    4. On top of that, if you bought the low you'd be up ~$100 bucks now or up ~8 1/2%. And if you bought GDX or GDXJ you'd be flat. Of course if you were short it would have been a good time to close out & buy any of the broader equity indices.

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  16. Poor Richard Russell must be suffering from dementia. I remember specifically he told investors to get out of stocks in early 2012, and load up on GDX and GDXJ and just "put it away".

    Hands down, that proved to be the 3rd worst market timing call in recorded history, as GDX and GDXJ have been pulverized and the stock market continues to make new highs.

    By the way, the 2nd worst call in history was General Jim's "This Is It!" call in 2011 and the worst call ever of course was Bob Prechter's call to short the stock market in 2010, 2011, 2012, and 2013.

    The sad reality is that Richard Russell will probably not live long enough to see another bear market in stocks and/or gold surpass $1,650.

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    1. Mark,
      Tell me when you are going to turn 90. I will tell my son to pick over your silly posts then.

      Delete
  17. Dan,
    Gold is dropping in slow death fashion. Not a manipulation event, It does not mean it will not bottom soon. The problem for gold bulls is that even when it bottoms we may not see it rocket up. As you said Dan awhile ago about gold it will move back up when there is a significant catalyst or black swan event. I hold a few remnants of my gold stocks and physical and have sold to the point of capitulation from my point of view.
    The problem is I see a weak economy and a destruction of the middle class.
    The figure I cannot get out of my mind is one I saw recently the median income of Americans in 1989 was 51,000 dollars and change. Twenty five years later the figure is 51000 with a loss of about 400 dollars. The shocker is that is with inflation. The mass of Americans are poorer by a lot over twenty five years! I believe this says it all about our country. Blame it on Obama I am no fan, but it is directional and speaks to a failure of leadership for many, many years. Gold will have its day again, but no one will enjoy it. Excuse my digression. I am sick of the fighting amongst gold bears and bulls. There is a much bigger problem in the world economy and it is getting worse. The US is better off than most but it has been leaking air for over 25 years.

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    1. Concord;

      I agree with your assessment of the US. I do think that a change in the administration to someone who is not hostile towards business and actually cherishes capitalism would do wonders for this nation. The reason I am optimistic ( in spite of the current disgrace in the WH) is that the US has within its grasp, the ability to become energy independent. Also, US companies are still the world's leaders when it comes to technological innovation.

      I could go on but the problems can be dealt with, unless we get Clinton in 2016. she will destroy what is left of the nation and we will remain mired in mediocrity and continue our decline.

      I would hold some physical gold as insurance - ( that is what it is for ) against geopolitical or economic black swans but I would then forget about it. After all, how many people do you know that each and every day go to their file cabinet, pull out their insurance policies, and read them eagerly looking for a sign that they might need them that day? Answer no one who has any sanity left.

      The reason I cannot stomach the perma bulls in the gold community is because they are obsessed with a stupid piece of yellow metal. It is an asset class like any other asset class and yet they dote on it to the point of obsession.

      Buy it, put it aside, and forget about it while you look for other investment opportunities elsewhere where good gains can be made. That is the work of an investor - taking hard earned capital and putting it to work where one can obtain the best gains on it consistent with one's own risk tolerance.

      among too many of the perma bulls in the gold camp, I often detect a strain of anti-Americanism. It is almost as if some of them, not all of them, are rooting for the nation to collapse and its currency along with it, so that their shiny yellow metal can soar to unheard of levels making them obscenely rich in the process.

      There is something about that attitude that reeks to me.

      Then there are others, who own gold for protection as we are wide-eyed realists but who understand it can rise and fall in price as events and sentiment dictate. We accept that as part of the normal course of all markets. For that, we are attacked and ridiculed because we do not sing with the Amen chorus who see evil intent behind every move lower in gold.

      Like I said, buy some metal, put it away, and get on with life. It sure helps by putting things in perspective.

      Best wishes to you...

      Dan

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  18. Mark, you are wrong on Prechter, as his stock, bond, and gold calls in mid '84 are CLEARLY the worst calls I have ever seen. You would think that Old Man % would show up one of these days for these charlatan book writing, letter peddlers, such that they could get something right, but no, no end in sight, as some of them I think could not tell you what day tomorrow is, without scratching their heads for a minute or so.

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  19. I wish people would stop referencing sites like ZH where it's obvious that they have a huge agenda. I remember when gold went down repeatedly and they claimed that the coin shops were empty and people cued in Asia to get the metal. I reported that in my area the coin shops were all but empty and I haven't noticed any lineups, and that there was plenty of metal to be purchased (at a discount if you buy 25 Oz of gold or more). They went like wild dogs at me, insulting my intelligence and calling me a troll just for saying that. There were a couple of guys, one from Germany I think, that was puzzled why they down-ticked me like I was Paul Krugman himself.

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    1. Abraxas;

      Yes, they have a huge agenda over there and thus cannot be objective.

      As far as the attacks go - remember, when dealing with a cult or cult-like mentality, all digression from what is considered orthodoxy calls for the heretic to be punished. After all, it is for their "own good". They must be "reclaimed" from those attempting to lead them astray and who are causing them to deviate from "the truth".

      Seriously, there are no rational arguments that can be made to ever convince a cult member to come out. Only those who have begun to slowly awaken in their own minds first, and who begin to suspect that something is wrong, can be reached. That is what we try to do here - help them understand that they are snared in a train of thought that clouds their judgment and will not allow them to recognize reality.

      Delete
    2. Some people - and the PM community boasts a disproportionately large contingent - clearly prefer being "right" over making money. This manifests itself as a refusal to accept contrary information - let alone reasoned argument - as anything other than an attempt to subvert "the truth" and cheat. Of course, this is a splendidly asymmetrical viewpoint, because when a piece of news comes along which tends to support their opinions - and/or the market price moves in their favour - that is no longer interpreted as subversion or manipulation, but as the final validation of what they "knew" all along. Of course they get angry if you disagree with them, because, clearly, you must be lying - there is no scope for you (much less them) to simply be wrong (even temporarily, or with the best of intentions and sound reason)

      Gold goes down? Manipulation!
      Gold goes up? Vindication!
      (and it will, one day, really soon, and THEN you'll see who was RIGHT ALL ALONG!)

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  20. Dan,
    I see the light and only have the excuse that 11 years of a bull market distorted the views of all gold bulls. Yes, the leaders of the gold bulls did many of us who were not independent enough to see the writing on the wall were doing us a great disservice by not acknowledging the obvious.

    Going forward I would warn you about Hillary the woman's vote in this country unless she is ill will probably get over the finish line. I see no reason how another Clinton would be anything but bad for the US by the way. I say that feeling equally bad about another Bush though.

    I see people come and go predictively, but you Dan are by far the most accurate. Never looking to far ahead and as Jack Webb said(if you can remember him I barely can) "just the facts m'am," is always your guide. That is why you have been the best at this.



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    1. Concord;

      That is the thing about bull markets - no one ever rings a bell saying: "the bull market is over". As a result, it takes a long time for the bullish sentiment to die off. Look at how long the specs continue to play the net long side in the market over there at the Comex. They are slowly getting out but they are still hopeful.

      Yes, I too worry about the "woman vote" when it comes to Clinton. She has accomplished nothing of significance but has ridden her husband's coattails to every position of political influence that she has ever had. She is more of a radical than Bill ever was.

      I agree with you - what is the deal that out of all the qualified people in this nation that we are stuck with either a Bush or a Clinton? What is this, some sort of aristocracy?

      On the market stuff - I have been kicked in the teeth and beaten with an ugly stick over the years I have been trading Concord. These markets are brutal and they do not have the least bit of mercy on us when we are wrong. The result of all this has made me very respectful of the power of trends and of the ability of markets to move contrary to all expectations. I have learned to either get out of the way so as to avoid getting steamrolled or go with the flow. In other words, survive!

      Let's just say that if some of the folks would just learn to let go of their preconceived notions and be objective, they might learn to be more right than they are more wrong. They would hopefully learn to profit and be happier and less inclined to growl at those of us who do not subscribe to their theories.

      A good bit of advice that I have learned the hard way is to never make predictions. Those are just guesses when all is said and done. Let the market guide you and learn to read what it and it alone is saying. Tune out everything and everyone else.

      Very best to you,
      Dan

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  21. Dan,
    Years ago, you posted on a site even with Katrina looming in Houston and I remember e-mailing during it to express my gratitude for you postings under duress. You had to evacuate your family from Houston. So I sent you an e-mail to say were you were in my thoughts. You were so gracious even commenting further on whatever my question was. I thought that was grace under pressure.

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    1. Concord;

      We dodged a bullet that day when Katrina turned to the right just as it came ashore but did not fare very well three years later when Ike hit us head on. That was the biggest hurricane in terms of the distance it covered from one side to the other that I have ever lived through.

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  22. Mark,
    I will take the bet that RR will not only be around when gold its 1650, but when it hits 2000. As far as "General Jim". What about his call of gold $1650 that he predicted years before and was only a few months off when it actually hit. As far as Prechter goes, no comeback. Over any given amount of time all the pundits make good and bad calls, that's why I ignore all of them. Give RR a break, if you hit 90 you should be so lucky to be able to write, and think as clearly as he does, even if he has had some bad calls in recent years. He did tell his subscribers to buy gold when it was at $300 in 2003. Since the beginning of 2003, Gold +270%, S&P + 115%.

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  23. General jim predicted the end of the bearmarket in 1993.

    1650 was not the correct number it went to 1900.

    He got the first digit right which means he was aware off the fact that gold was jn a bullmarket.

    Ill grant him that.

    Meanwhile he sold out before 2011 and forgot to inform the sheep he did.

    mr "i got 30 million dollar invested" never invested more then 6 million. He probably did get 30 million out of it.

    Just another liar with a hole in the ground.

    Do as he does not as he says.

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  24. Wait till the market decides that stocks, real estate and bonds are the new safe haven and gold sits at 700 for the next decade. That will take the supply off the market as miners file for bankrupcy left right and center

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  25. Well it looks like the market is simply on "autopilot" again.

    The "Amazing Perpetual Motion Machine"

    Whereby commodity prices tumble, interest rates continue at 50-year lows forever, and stocks rise and rise and rise.

    Looks like the stock bulls have it made. As long as the economy grows slower than expected, there is zero inflation and zero chance of any rate hikes.

    If the economy stalls or goes back into recession, then the printing presses are fired up.

    More money printed will result in even more disinflation, lower commodity prices, frightened investors buying bonds, etc.

    Which guarantees even higher stock prices.

    Any any threat or whiff of inflation can be stopped cold by central bank "words", LOL....

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  26. Dan, you forgot to let all the readers know about Hillary the Hun and her proficiency in trading CATTLE.

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  27. For those of you that think gold is manipulated only sometimes , there is a nice article in the front page of the FT … Trading to sway gold fix , a routine . Interesting read

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    1. Anon;

      I guess the same guys who operate at the fix are also forcing the hedge funds to sell at the Comex, forcing the hedge funds and institutional funds of the West to sell GLD, forcing the TIPS spread to read no inflation, forcing the mining shares ever lower, forcing the entire commodity sector lower in price, forcing the Dollar higher, forcing the Euro lower, forcing equities higher, and on and on and on.

      Believe what you want but I actually have to wonder at what point common sense or at least the very survival instinct kicks in - why invest in an asset class that you believe is constantly manipulated and one in which the manipulators are always successful? How much pain do you like inflicting on yourself? Want some more? Just stay the course...

      it is very sad watching so many refuse to cut their losses when the charts said to do so and look elsewhere for solid opportunities. Instead they bought into the "gold is always manipulated all the time" BS and sat there on their growing losses because "any day now" gold was going to take off and head vertical.

      How many times do I have to say it - buy some physical gold for insurance and then move on.

      Trading or investing is about making money - pure and simple - guys who learn to do that succeed. the rest of them argue and post comments on blogs about how "right" they are.

      You know my view here - stop wasting your time trying to convince me of something without offering a set of fundamental reasons why gold should be in a bull market instead of its current bear market.

      Guess what? When the fundamentals justify a bull market in gold, I will be bullish - until then, I could care less about the manipulation claptrap. Fight the trend, lose money. Go with the trend, make money.

      What else is there to trading or investing that you do not understand at this point?

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    2. That said for long term investors in gold the fundamentals are as bullish as ever for owning it. Nothing has really changed.

      - Never ending QE its only stopped to be started again for years now.

      - And never ending increasing sovereign debt. They just keep piling it on.

      They are still on the same path to destroying paper currencies as always. Worse than ever.

      But as long as the masses do not see these bullish fundamental reasons to own gold then gold will go nowhere.

      The Fed is not going to level with the public and say looks like we have to do QE and ZIRP forever so get out of paper now.

      Most likely QE and ZIRP will just continue around the world until there is a crisis and then the Fed will say they did not see it coming like in 2008.

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