"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



Friday, August 15, 2014

Copper Signals and Silver

Some of the regular readers of this site will remember that the battle royale occurring in the copper market between the two groups of the largest speculators in the market has been an unending source of interest to me. To see the powerful hedge funds arrayed on one side of the market ( LONG ) while the other Large Reportables ( big pit locals, CTA's, CPO's, etc. ) are on the other ( SHORT) is not something that one sees all that often in the commodity futures markets, especially in this day and age of computerized system trading.

In looking over the chart of the price and the chart of the positioning of these large traders ( COT ), one can readily see that each side has inflicted some wounds upon the other based on the rise beginning in the middle of June and then on the fall since last July.

As things now stand, we are back to a near perfect equilibrium between the two sides with their respective net long and net short positions being nearly equally balanced.



The reason I am fascinated by this is because it reflects the continued lack of consensus among the big speculators as to the true state of the global economy.

Those that are bullish and positioned on the net long side ( hedgies ) are playing the inflation genie and a slowly improving economy with increased demand for industrial type metals such as copper.

Those that are bearish are playing the "deflation genie" and a deteriorating global economy accompanied by falling commodity prices along with a strong US dollar.

It is this shifting sentiment which is wreaking havoc among some of the trend following systems and has sent some of the individual commodity markets into their current range trade or sideways pattern.

Clearly, investors/traders are looking at some signs of economic improvement but they are also seeing geopolitical events and other factors which are making them second guess themselves. There is no clear cut conviction outside of the equity market traders as to which way things are going.

One cannot dispute however that the overall commodity sector has been under severe pressure of late. A simple glance at the Goldman Sachs Commodity Index tells the story there. Copper has been effectively taking its cues from this index of late.


Along this line, do you not find it rather bizarre that in spite of the severe downdraft occurring in the commodity sector, in spite of the sharp selloff that has been occurring in copper and in spite of the fact that the US Dollar has been rather resilient of late, we are still being regaled with articles decrying the "Blatant attacks on Silver" ,etc.

I cannot help but wonder about some of these folks who are evidently blind to the fact that everything else around the metal is sinking lower. Yet, for some strange, inexplicable reason, they somehow expect silver to be rocketing higher. It is somewhat akin to watching a wild hog digging around for edible roots. The poor thing cannot see that well to begin with but it is so focused on what is right in front of its nose, that it does not bother to see anything outside of that area of small focus. Such are those who keep talking silver manipulation while the entire commodity complex is now down strongly on the year.

Take a look at the Silver COT chart and you can easily see what is taking place. There is nothing sinister here but rather the dawning realization on the part of some hedge funds ( perhaps some of the same that were long copper) that they are on the wrong side of the trade and are now getting out.

Look at the size of that big bet the hedge funds had made on higher silver prices beginning back in June. They built that net long position up to the largest in 4 years only to have the metal careen back to earth after the entire commodity complex began to swoon. Simply put - the hedge funds were playing the "inflation genie" and surging global economy theme and just flat out missed it. Now they are abandoning ship. As they head for the exits, the price is coming back down after making an advance of about 3 Dollars since early June. It has given back $2.00 of that as the hedge funds exit.


By the way, this is an opportunity to once again point out the folly and absurdity of too many of these self-anointed Commitment of Traders "expert analysts" and other sundry, assorted charlatans who had assured us all that a spectacular silver short squeeze was just around the corner because "their analysis of the COT data informed them that the big swap dealers were positioned on the net long side and that implied a big short squeeze coming". Of course we all know how accurate that worthless "analysis" was.

I have said it many times before and will say it again - extrapolating future market movements from the COT data alone is an exercise for fools. Only by studying a broad array of factors, such as the other similar markets, the Dollar, interest rate expectations, and then key technical chart patterns and resistance and support areas, can the COT data be used to any sort of trading advantage. Taken in isolation, as so many of these novices and would-be somebodies seem to do, it is great for selling newsletters and subscription-based web sites, but for real life trading strategy, it is utterly and completely worthless. I have to shake my head that some would part with their hard-earned money to pay for the kind of "analysis" that they are getting. It is quite tragic to be honest.

Take a look at the following chart in which Silver is being compared to Copper. Pay not so much attention as to the general price levels but rather the overall price patterns of the two metals. Notice how similar their movements are and have been. They both tend to fall in unison and sink in unison.  Yes, there is not a one for one or a perfect symmetry between the two but the similarities are quite remarkable are they not?


The point is simple - markets do not trade in isolation. Anyone who claims that he or she knows what is coming next because they have examined the Commitment of Traders data and therefore can dogmatically assert "such and such must follow" is fooling not only you, but themselves as well. When one puts real money on the line and takes a position in the market, they should do so not on the soothsaying of some short-sighted "expert on the COT" but rather through diligent study of the charts.

Lastly for now, here is that TIPS spread chart that I post every so often. It has been updated through yesterday. Notice the line of the TIPS spread which has been falling of late. This is an indication that inflation expectations are receding, not growing.



It is also the reason that I of the view that without support from these geopolitical tensions, gold would be following the broader commodity sector lower. Traders are buying gold as a safe haven against geopolitical turmoil and NOT against inflation. That warns us to be careful with gold for if the events which have led to this rise in a desire for a safe haven do recede for any reason, gold is vulnerable.

This is not meant to be a bias against gold nor is it meant to be a bias for gold. It is a simple observation that fundamental factors argue for a lower gold price while geopolitical factors are pushing it higher. We all saw today ( Friday ) how swiftly the metal will sink if those geopolitical factors are removed. It was only the reviving of fears over in Ukraine which saved the metal from falling even more sharply. Those who are buying it need to understand this. My own personal preference is to not buy gold during periods of geopolitical unrest but rather during times of relative quiet into levels of chart support and only as much as one needs for insurance or diversification purposes. Buying gold and chasing it higher when it is being event driven as it is right now, usually ends up burning those who do. One never knows if the event can indeed spiral out of control so if you do not own any, acquiring some is prudent. But if you are buying it during times like these, just understand that it can plummet back to earth as quickly, if not more swiftly, than it rose.

I will get something up on the corn and bean markets regarding the charts and the COT data as time permits tomorrow. have a nice weekend....


76 comments:

  1. Quote of the Day:

    "Utterly and Completely Worthless"

    Yep.

    Feel sorry for all the poor schmucks who attended all those Q & A sessions, took all their money out of the banks, took physical possession of their rapidly depreciating PM stock certificates, and bought the hyperinflation theme hook line and sinker.

    Same with the Peak Oil crowd.

    Same with the bond shorters.

    Same with whoever shorted China's stock markets.

    Same with all the "Guns, Gold, and Getaway" Preppers.

    All that worry, angst, unnecessary grief for nothing.

    But the worst part is this:

    Those who subscribed to the official investment theme of dollar cost averaging into a proper allocated mix of stocks and fixed income has made 15 - 20 years worth of gains in 5 1/2 years.

    More aggressive speculators who charged head first into the Investor's Business Daily Top 50 stocks and stayed with the current winners can pretty much quit and retire.

    So many of the gold crowd groupies essentially missed out on a once in a lifetime opportunity to make some serious gains in a very short period of time. So much so, it will be virtually impossible for them to catch up unless they win the lottery by being lucky enough to pile their entire account into the next NFLX, AAPL, UA, etc.

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  4. Third Time Lucky...

    An alien landing from Outer Space, or a Village Elder from a hitherto-undiscovered tribe deep in the rainforests of Patagonia, would take one look at the Silver chart over the past 18 months and ask what all the fuss is about - it's clearly only going in one direction, and the circumstances which led to the collapse in price not only have not changed, they have got worse

    There IS no pervasive scarcity of suppy, no daily "cap cap cap" by TPTB, no evil conspiracy - the simple truth is that there IS no particular reason to want to hold Silver at this point in the economic and investment cycle - people may wish that were not the case, they may bleat that it is somehow "unfair", they may be right that one day it may change, but right here, right now, on Planet Earth, that metal is looking as heavy and unloved as an unwashed farm girl with a thyroid problem dancing around her handbag at 2 am

    Other than a few Perth Mint Kilo rounds and my long-shot curiosity in Royal Mint £20 coins I have no axe to grind with Silver, and insofar as a rally would presumably lift Gold, I suppose my default position would be to favour any upside potential. But at present I can see none, and all these shysters plugging away with how "cheap" silver is for "the masses" might just as well be trying to sell them glass beads or coke-can pullrings, as these are even cheaper still

    Over the years, I have come to delight in getting the market right even 51% of the time, and although I am neither a Billionaire, the Leading Trends Guru in the Entire World, "a Legend" in my own Lunchtime, or a 130-year old market veteran relying in equal measure on a zimmer frame and an abacus, I carry enough scar tissue to know a Snake Oil Salesman when I see one, and Silver appears to attract them like a cow turd attracts flies; add to this the fact that, with your knowledge of how gullible the average man is, you should bear in mind that 50% of the population is even dumber than that

    Rather than rocketing "to da moon", an investment in Silver at the present time appears to offer little more than a one-way ticket up Uranus

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    1. "...that metal is looking as heavy and unloved as an unwashed farm girl with a thyroid problem dancing around her handbag at 2 am."

      Z...that was funny!!!

      As always, thanks Dan.

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    2. My head is spinning with joy: the 130 year old I think I know; the ex-billionaire also; the leading trends guru in the entire world, yes indeed; and many legends are waiting for you.

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  5. Thanks Trader Dan. Someone is buying bonds even as the Fed taper program continues... Have to wonder who and why. That market is acting as if more deflationary pressures are on the horizon. Yields in 10 year have swooned the last couple weeks!

    I was reading back on your last article when the yield was just over 2.5%... we lost chart "support" this week:

    http://traderdannorcini.blogspot.com/2014/05/ten-year-treasury-yield-plunges.html

    BTW the search feature on the blog worked great!

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  6. Offered without comment:

    http://rt.com/usa/180680-ferguson-henry-davis-blood/

    http://rt.com/usa/180744-cdc-laboratory-bird-flu/


    NB Dan, the Captcha's have gone "special" again

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  7. Dan, If a person has a massive EGO he/she is never wrong. If they make a market call and it goes against them they don't back down they stick to their call, because the EGO says "I am smarter than the rest and I am always right" and the reason for the market not doing what I tell it to is that the market is rigged. They will never change their opinions because they cant be wrong. They basically live in bubble trapped by their Big EGO's. The downfall of man is Lust, Greed and Ego. These people cant be reasoned with, their ego's will never let them listen to you because the ego says to them "this person is a fool and I don't listen to fools". So from a reasonable persons perspective these people look and act like fools. We cant help them, they don't allow us to.

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    1. Thanks Dan for this excellent article. I believe deflation is increasing and about to accelerate some more. In UK wage increase (hence affordability) is non existent while day to day necessities are increasing in price. People are employed more that before the recession started but a lot of this 'employment' are zero hour contracts. Prices will have to come down imho. The QE effect is not filtering to the masses. It is only paper zeros shuffled at the high levels of society. I believe things are bad for the western economies but those that know and need are crying out are less influential than that know and don't want us to know.

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    2. Sorry that should have read

      'but those that know and are crying out are less influential than that know and don't want us to know.'

      Thanks

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    3. Olu
      Seeing pretty much the same situation in USA.
      More jobs but more part time. Lower wage jobs increasing faster than well paying. Few to no raises.
      Thus housing affordability getting worse. More percent of income going to necessities less to options. Hence retail trade is down.

      Less feeling of well being and less faith in ability to progress. Less trust in government. Leads to unrest.

      Not a pretty picture.

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    4. Speaking of ego's and online trolls etc, the sad Robin Williams situation brought out the worst in some people (aka trolls) as they belittled a dead person (how pathetic is that?) in order to shine the spotlight of attention on them instead of RW at that moment.

      Here's a take on internet incivility I found at "the lighthouse" :-)

      http://mobile.nytimes.com/2014/08/15/technology/web-trolls-winning-as-incivility-increases.html?referrer=

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    5. Janet;

      One thing I have learned over the years that I have been trading, is that we cannot rely on our past performance. There is a tendency among traders ( it is due to our fallen human nature ) that if we are successful in our trading that we tend to become complacent and overconfident. We make some trades, those are profitable and before long, we begin to think too highly of ourselves.

      Whenever I am tempted to go down this road, the market has a way of reminding me of how fallible I am.

      That is why I am firmly of the view that a good trader/investor can be confident but never reckless or arrogant and that humility is one of the most important virtues that he or she can possess, not only to help you in trading, but for life in general.

      I think some of the these people who are constantly calling for this or calling for that or predicting this or predicting that simply have not been knocked around, kicked and generally beaten senseless in the markets a few times. If they had, one would see it in their attitudes and they would be much more cautious and far less reckless.

      Besides, what is the point of making predictions anyway? no one knows the future except God and for any mere mortal to believe that he or she knows when something is going to happen and what it might be is the height of presumption.

      One can have a view of the markets - we all do or we would never trade or invest but that should be tempered or seasoned with some real caution and an all-too-painful awareness of our own insufficiency at times. Good traders are cautious. They will press the market at times but they also respect it enough to know not to mess with it or underestimate its ability to destroy you.

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    6. Dan, someone I know tried the Forex markets and had his trading account was obliterated such that it no longer exists. He told me the Forex markets are rigged that is the reason he lost his money. Now , from the side lines ,he makes predictions about the Gold price and the stock market. If is were not so sad it would be comical.

      To your point about becoming over confident after a successful trade, to regain a persons humility, taking a few days out to 'normalise' can be highly profitable in itself.

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    7. Janet - that is why I raise honeybees... they could care less what the gold price is, or what the price of corn or beans or cattle is. All they care about is whether or not they can get out and fly in the sunshine and bring home some nectar and some pollen.
      Yes, there is life outside of the commodity futures markets!

      About your friend - he is the usual "statistic" ( over 90% of people who try this stuff end up losing money). Very sad, but some cannot learn from their mistakes. I know I could tell you some real horror stories about my earlier days, especially in the bellies, as I am sure many of the others here have their own stories to tell as well!

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    8. The Markets offer a wonderful education, and the great thing is that if you don't learn your lessons the first time round, you get taught them again and again for free until you do

      As my mother always told me - there are only three kinds of traders - those who are good with numbers, and those who aren't

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  8. mark you need to get on the same page with your boy Soros:

    http://www.businessinsider.com/george-soros-just-made-a-huge-bet-that-us-stocks-might-fall-2014-8

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    1. Nonsense. Soris was buying calls on miners early 2013 just before the crash.

      If soros buys put on s&p it is to hedge his long bet. Looks like soros sees a blow off top ahead.

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    2. What I dont get is that Soros is 83, Ichan is in his 80's, Buffet is in his 80's, so why are these guys making huge bets on anything? Its a time in life to stop and enjoy nature and enjoy what you have accomplished. For all they know, they might not live another day. And they want to spend it trading? Doesnt make sense to me. Win or lose wont change anything. So why even do it?

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    3. I presume they like the trading game and the power they have.

      Can't resist adding. Power corrupts.

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  9. No shortage of gold in China and possibly the tip of the proverbial iceberg as a huge gold deposit is discovered...

    http://news.xinhuanet.com/english/china/2014-07/29/c_133518424.htm

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  10. Speaking of fundamentals, what would happen if ISIS unplugged the Mosul dam? Hundreds of thousands of people would be drowned, and the electrical supply of 40% of Iraq cut off. Ask yourself, would these fanatical Jihadis ever do it, or even threaten to do it? There would be a massive escalation in the war in the ME as America is back with full scale military commitment. It could also provide the impetus to rebel groups in many other countries, and there might be a general uprising across the entire area on a huge scale. There are no lack of fundamentals and hot spots to keep gold underpinned for a very long time, and as one abates others are waiting to rush in, not to mention a sputtering economy that is staggering around on a huge drug overdose of QE and ludicrous amounts of debt, so that if one had to choose between a scenario of steady economic improvement, with relative international stability, or the likelihood of considerable chaos, should make one want to opt for the latter. In my view the black swans are lining up, and will be coming in thick and fast.

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  11. If anyone wants to guess where global markets are headed next, keep an eye on EEM as it has been showing relative strength vs. SPY and is now at the top end of a 3 1/2 year trading band.

    On top of that, the 10 day moving average of the CBOE Put/Call ratio is also at the top of its trading band and the highest its ever been in 9 months.

    On top of that, the 10-day moving average of the CNN Fear/Greed Index is now at the lowest reading ever recorded (showing extreme fear), on the day that QQQ printed a 13-year high.

    Gentlemen, place your bets........

    I smell a moonshot coming in the stock market.

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    1. My japanese stock etfs look like their about to break out. The cup and handles project a 30% run.

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    2. Agreed. We will probably have a Major move in the S&P 500 from here for the next year but I am out of the market come next August 2015. It smells like lift off from here. The blow-off Top is well on its way. There is just way too much pessimism and the majority is Always wrong and they will Not catch this move until it is too late.

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    3. The S&P could maybe extend and kiss 2k but doesnt have much more gas after that. After August we're going down big.

      @ Jasper
      I agree with buying Japanese stocks. They're still very close to all time lows, Abe is printing a ton of money and Japan also made it tax free for its citizens to buy stocks. Why would anyone want to buy U.S. stocks at all time highs when they can buy Europe or Japan. Also, their central banks are stepping on the gas with QE which will lift stocks just as it did in the U.S. The U.S. market has significant cracks developing in it. I hope we get another buying opportunity like March 2009!

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    4. Dream on, without the Fed's QE the stock market has a better chance of falling than rising.
      Its the most artificially Fed engineered stock market rise in history.
      Deflation is already taking hold again as QE is ending.
      This article Dan wrote shows the deflation happening.
      You better hope for more QE to get your moonshot.

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    5. The trend in stocks remains higher. None of us know how long this can keep going. Don't fight the tape.

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    6. Amen Eric O! Reading Martin Zweig's book "Winning on Wall St." right now. Some timeless lessons in there.

      For those that don't know this is the guy that coined the phrases: "Don't Fight the Fed" and "The Trend is Your Friend".

      http://en.wikipedia.org/wiki/Martin_Zweig

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    7. Martin Zweig is my stock market hero!

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    8. He is to many. Just have to figure out what time frame one wants to use to figure out what the trend is. I think Hubert has it figured out. Any guy who can buy oil and sell gold at the same time, make 2 dollars in oil and 20 dollars in gold in a short time is my hero.

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    9. Barney66:
      I have to agree, unless the Fed reinstates some sort of stimulus, the continued rise in stocks provided by the liquidity of the QE3 could be in jeopardy. Will be interesting to see if the Fed tone remains hawkish (I.e. to end QE3 and raise rates) if the equity markets start to have a similar reaction as they did at the end of QE1 and QE2. It seems the market is still highly sensitive to Fed speak (look at the reaction to Gold after the jobless claims number which was perceived as bad news and therefore the possibility of a more dovish Fed- Gold price went up). The price increase was very short lived but a sign of how sensitive the markets are to economic data - economic data which Yellen says she will use to determine her actions. And as Dan has illustrated, we are back to a deflationary environment with interest rates creeping back down. One of the Fed's mandates is employment data, the other is inflation. With the deflationary forces in play, what happens to the Fed inflation mandate if CPI drops? It makes it more difficult for the Fed to end QE or raise rates - ending stimulus in this scenario may not be the "cure". If a prolonged stimulus is in the Feds future, then maybe the equities will "party on". Unfortunately it seems we have to follow the Fed and position accordingly to profit in these "broken" markets rather than invest and trade in a system that is not dependent on the prospects of more money printing... Then again, maybe the patient is "cured" now, there will be no relapse once we are off the IV, and everyone will be happy.

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    10. Your moonshot may turn out to be a damp squib. When everyone and his dog is thinking that after this 'healthy' correction we are going to resume upward trajectory, that in itself is very worrying. Think of the market as a pie, and a lot of very greedy people want a piece of that pie, it is not hard to understand that there will not be enough to go round.

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    11. Yes Trinity, seems there are so many bulls now that believe in the Fed created illusion.
      I doubt anything is cured or fixed.
      This whole phoney recovery looks like it is just being propped up by oceans of paper and debt that can't stand the light of day of higher interest rates now.

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    12. ""The Trend is Your Friend".
      I humbly tend to disagree :)
      This sentence alone is a trap.

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    13. Trend followers can be successful, provided they have defined and tested their quantifiable parameters for when a trend has actually changed, and stick to it.

      Others can be successful, buying dips and selling rips, provided they have defined and tested their parameters as to where the support and resistance might be, and stick to it.

      The trouble starts when parameters are not laid out ahead of time, and/or the trader starts to mix it up, trend following one day, and being contrary the next. Just winging it all over the map. At those times, emotions and biases, like fear, greed, and politics, starts to control the buying and selling, and doom soon follows.

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  12. Chris Puplava explains the extraordinary fear readings recorded last week which suggest a big upside run from here, as retail speculators took on huge put positions the last 2 weeks.

    Gary Dorsch also provides many technical reasons for a global stock rally.

    http://www.financialsensenewshour.com/broadcast/fsn2014-0816-1.mp3

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  14. We cannot afford to be complacent about the main markets, any more than we should be about the gold price. There are too many headwinds, both pertaining to the actual economic situation, as well as the global crises, now intensifying in severity, as well as increasing in locations. Sentiment could turn on a sixpence, especially as the bull market is now getting very long in the tooth. Ultimately, it is all about sentiment, and how well the Fed can manipulate expectations and keep them buoyant, especially when most of the data they spew out is illusionary.

    Que es la vida - un frenesi
    Que es la vida - un illusion
    Que toda la vida es sueno,
    Y los suenos sueno son.

    To understand this famous poem of Calderon, you only need to know that Vida means life, and sueno means dream.

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  15. August 16, 2014

    "This Is the Worst Nightmare for the U.S. and The West"

    "This Will Trigger Major Dislocations In World Financial Markets"

    "Gerald Celente - This Global Collapse Is Just Getting Started"

    "Fleckenstein - U.S. Stocks To Crash As No Liquidity Fuels Panic"

    "Short Squeeze Of Epic Proportions To Shock Market Participants"

    "A Horrifying & Destructive Future For The Entire World"

    "Chart Of The Week & Vladimir Putin & Chaos Around The World"

    "It’s Amazing What People In Europe Are Doing Just To Survive"

    "Gerald Celente - The Global Ponzi Scheme Is On Its Death Bed"

    "World War III, Total Global Collapse & The Greatest Depression"

    Well, lets check back in a few months and see how many predictions from the "acclaimed experts" and "40-year veterans" pan out, LOL.....

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    2. If you were to lay all the KWN correspondents end to end in a long line, that would at least stop them writing drivel for a few moments while you bring up the steamroller

      Frankly, if KWN didn't exist, I think we'd probably need to invent it

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  16. Zhang, I'm saying the 78% fibo to simplify. I can write 77% if you prefer. I doesn't matter as the real fibo, whatever it is (76.6 i.e 1-23.4 indeed) appears automatically on my chart and is calculated automatically by PRT.
    So all I was saying is that I am using that retracement level as well.
    I don't know where you manage to see arrogance into this,

    Trinity Trader, I see you are well into the MSM BS about Putin, but I think you are totally wrong about that one.

    For starters, a question to you. If Putin was such an aggressive conqueror, why didn't he invade Georgia a few years ago when all he had to do is march forward a few more hours?
    Why didn't he annex the whole eastern Ukraine when he had the occasion to do so this winter, along with Crimea?
    Prove me Putin is the evil conqueror you mention by answering those questions.
    If you can't and stick to reality, then ask yourself why such a conqueror didn't invade anything when he had the perfect opportunity to do so.

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    Replies
    1. Hi Hubert:
      Actually no I am not into the MSM, I get most of the news other sources. Many in the international community closer to the situation (UK, France, Germany, Italy, Poland, Canada, Japan, Netherlands, S Korea, Georgia, Moldova, Turkey, Australia and the EU) have condemned Russia for the Crimea invasion and some even imposed sanctions. You asked what he invaded, it was Crimea. I just don't think he should be trusted. Not sure why he didn't invade Georgia or the rest of Ukraine. He is not a political dummy that is for sure and knows the world is watching. I didn't say he was an evil conqueror but I wouldn't consider him an humanitarian angel either (the relief efforts IMHO were a calculated effort to change world opinion). The people of Russia are experiencing higher food prices and food scarcities because of his cross sanctions. We'll see how long his popularity holds up with "those" pressures on the Russian population...

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    2. Hubert; I think Zhang is an ok guy. Any guy that can throw down shots of Grey Goose and then chase them down with brake fluid is ok by me. Same with Trinity. He, like all of us is desperate to know what all these non-leaders are up to, on all sides of these issues. We know that those that know can not say, and those that do no know have everything to say. That is the way it will always be. As you know I think Armstrong is plenty off base with his outlandish calls sometimes, but on the other hand, he does make some quite spot on arguments, especially when it comes to societal break downs and conflicts heating up just about everywhere. I am hoping the Ferguson situation is not a precursor for the future, as I can remember the 60's oh so well, and they were not pretty. Anyway, we start to see what is in store for us in a half hour.

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    3. Hi Guys

      ok, I concede - 78% it is, whatever floats your boat - I'll write to the Italians and let them know - anything to stop essentially trivial disagreements persisting from one thread to the next

      In the meantime, my own views on the MSM are adequately captured by this diagram: http://www.zerohedge.com/sites/default/files/images/user5/imageroot/2014/08/reuters%20values_0.jpg

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    4. NB It's a little before 7 am on a Monday morning in Singapore and as I wipe the Sleep of the Righteous from my weary eyes, I am feeling more than slightly directionally challenged - could someone please help clarify - is Silver extracted from the Earth's core, or is that where it is headed?

      I think we should be told

      Delete
    5. ..... oh dear, we are on a bit of a roll this morning - try this one for size: http://www.globalresearch.ca/the-eu-demands-argentina-to-ban-food-exports-to-russia-arrogance-and-stupidity/5396335

      and/or http://www.globalresearch.ca/the-ebola-outbreak-u-s-sponsored-bioterror/5396176

      and/or http://www.globalresearch.ca/in-the-west-respect-for-truth-no-longer-exists/5396342

      ok, ok, ok already - I fully appreciate that our Canadian cousins can become excitedly idiotic from time to time (viz. Harvey Organ) but this stuff appears to be at least as well researched as e.g. CNN or Fox News, and whilst your mileage may differ, their interpretations and conclusions are not totally absurd .....

      .... ok ok ok already, I sense that one or two of you are not yet quite ready to swallow that last statement without further evidence. So here it is : http://www.globalresearch.ca/hillary-works-for-goldman-sachs-and-likes-war-former-bill-clinton-aide/5396307

      and that, Your Honour, concludes the case for the Prosecution

      Delete
    6. Hi Trinity,
      I'm not saying one minute that Putin is a nice guy.
      But my opinion is he is on the defensive, not on the offensive.
      Sometimes, best defense is attack.
      You will sometimes have to reraise a maniac in poker, even with a marginal hand, or he will eat all your chips.
      Did Putin plan to invade Crimea? I don't think so.
      Did Putin take any initiative to invade Crimea or any other country before december? I don't think so.
      Did US plan a coup in Ukraine to throw down the previous regime? Yes, and we have proofs and recorded conversations of it.
      Did NATO expand its bases all over Russian territory after promise was made they would not? Yes. Eastern countries, Poland of course with its missile bases and ABM, then Georgia.
      One day, too much is just too much.
      By staging a coup in Ukraine, US crossed a red line.
      The one which was aimed at taking Sebastopol from the Russians.
      Sebastopol is a strategic military port for Russia, period.
      When the new puppet government started its new measures by forbidding russian language as an official language in Ukraine, I think it also helped make the decision.
      Now, what do you call an invasion?
      Crimea voted for its independance.
      You have sure sources?
      Well that's fine then, because I've been not too long ago to Sebastopol, Simferopol, Yalta, Gurzuf...so the statistics are right.
      More than half the population living there are russian. Not russian speakers. Russians. Russian speakers would be 80% + of the population.
      More than 90% of the people there voted for Yanukovitch at the last elections. They couldn't care less about Maidan.
      Russia had already an agreement with Ukraine of having up to 25000 soldiers based in Crimea.
      Russia is not silly. They know the coup in Ukraine would deprive them from this port. A totally passive reaction from them, and for sure Ukraine would be part of NATO within a year or two, with probably more ABM bases. I'll not totally against what Craig Roberts has to say about this, though he hates US too much to remain objective, and his description of Russia as saints and US as evil is ridiculous.
      So Crimea, I remind you, overwhelmingly voted for its independance.
      As an american, is the history of the USA familiar to you?
      Are you going to call Crimea's declaration of independance a Russian invasion? I will not.
      Especially when we do such things as in Kosovo, etc...
      Russia is defending its geostrategic interests, and it did because it got the green light from the population.
      Since then, we've indeed tried to systematically demonize Putin beyond his merits, just as absurdly as Craig Roberts is systematically demonizing the whole american government.
      Last being the so called invasion this week end by an armored convoy. Come on.
      Now the real danger indeed lies in the fact that the West thinks he has a right to meddle in the affairs of Crimea. It doesn't. And if they don't realize that and push Ukraine to reconquer Crimea under some claims of invasions or legitimacy, we WILL have a war. Just as we would have had if Russian ships had continued their trip to Cuba.

      Delete
    7. The International trust factor with Putin would be allot higher if he would give Crimea back to Ukraine - seems he essentially annexed it at an opportune time at a point of weakness (many would call the Crimean vote a "hoax", the voting stations were surrounded by Military personnel.)

      He could also tell the pro Russian Separatists to lay down their arms. He could do that tomorrow. These things will not happen. Ukraine is no threat to Russia's military might.

      Maybe the distrust in the international community is high because it is largely believed Putin wants to create “historical justice” with a return to the days of the Tsar Nicholas II, and the Soviet Union under Stalin...It's probably the reason so many countries have issued sanctions. One has to wonder if Putin would be behaving any differently if there was strong Western leadership such as a Ronald Reagan, Margaret Thatcher or Winston Churchill around.

      Agree with you Roberts has lost his objectivity.

      Will be interesting to see how the events unfold in that part of the world.

      Delete
    8. Churchill yes; Reagan and Thatcher? Not on your life.

      Delete
    9. I don't think Putin could stop separatists with a word.
      I'm not going to comment about complex Ukraine, history, people here, it would take pages.
      I'll sumarize by saying that there are a lot of extreme feelings and extreme people in Ukraine, which is basically split in two.
      They are not very "reasonable" people for some part.
      I don't think you can say Putin just has to press a button and say "ok, stop" as if he was giving them orders. I don't think he is.
      I've also been stranded 3 days in Kiev airport last year and I learnt a fez things about the guys there...
      The problem is the West want to make Putin responsible of this situation :
      - responsible of annexing Crimea (he plotted it, waited for a weakness...lol! I don't think so. But he had to react somehow after Maidan and he did after the population made it cristal clear they wanted back to Mother Russia rather than to a crazy unelected government with neo nazis in their midst, calling to bad russian language as an official language, which, I think, is perfectly understandable! What if suddenly in the US, a putsch took place in Miami and they declared that english has to be banned and spanish is the one and only official language? ok, I can't compare reality and fiction.)
      - responsible of the unrest in Eastern Ukraine, as if it were because of him and under his control.

      I strongly disagree with those two points.
      Now, watching Crimea and Ukraine history again, this is rather "internal affairs" of Russia and russian immediate neighbours and partners, and as Crimea made it clear by a democratic vote, voting massively for its independance, I think the best way would be to respect the people's choice here instead of bombing them.
      Crimea doesn't "belong" to Ukraine.
      Who said so?
      Crimea was a gift from USSR to Ukraine in times where Ukraine being out of Russia was unbelievable.
      The West should not meddle into this.
      There is no invastion here.
      Putin is not threatening to invade Europe, and he made it clear he had no pretense on other Ukrainian territories, even Eastern Ukraine, though he could have so, so easily annexed it as well in january / february 2014.
      Let's de escalate.
      I agree with Roberts : the West arrogance thinking they can meddle in anything anywhere can be our demise.
      Ukraine must choose its destiny between Yugoslavia kind of civil war and Tcheco Slovakia nice split. I opt for the latter.
      As a strongly russian territory, Crimea voted its independace.
      US before any other country in the world should be able to respect that, due to their own history.
      Here is the chart showing how Maidan was supported through Ukraine : once more, a clear, huge split. There are two Ukraine. So be it. Forcing people who hate each other into one nation will lead to endless civil war or slavery of one part upon the other.

      Delete
    10. http://www.les-crises.fr/u4-3-le-role-des-americains-et-des-europeens/#!colorbox[37656]/4/

      Delete
    11. Reagan/Thatcher won the cold war... "Peace through Strength" worked to convince Gorbachev to end it. Without them working together likely wouldn't have happened.

      Good trading this week guys!

      Delete
    12. Ukraine was at best a very fragile construct.
      Just as Yougoslavia, which ended up into a terrible civil war.
      Check the results of past presidential elections in Ukraine last ten years and you will realize how much the country was in fact torn in two unreconciliable parts. It held by miracle, and Maidan annihilated any hope of constructive talks.
      Let them do like Czech and Slovaquia.
      Sometimes it's the best thing to do, instead of forcing people into one country, where nothing unites them in the first place.
      Translation of the chart : "do you support EuroMaidan?"
      - Western Ukraine : Yes 84%, No 11%
      - Eastern Ukraine : Yes 13%, No 81%

      It's cristal clear to me.
      Forget about Putin and listen to We the People for once.
      If not, you'll eventually have a William Wallace in Donetsk and this civil war will never end. It will morth in another Syria, Irak, Yougoslavian uncontrollable scenario.

      Delete
    13. Just to repeat, whether Ukraine explodes, implodes, cuts itself into 2 or whatever, the U.S. has NO business getting involved

      Delete
    14. Ukraine definitely not a simple situation...

      Delete
  17. Another quite pleasant Midwestern weekend for the corn and bean crops, as they get bigger and bigger and bigger. Better hope and pray for short covering pops and the threat of an early frost, grain bulls, because, if not , you can put a 290 in front of corn and a 775 for your beans.

    ReplyDelete
  18. You really HAVE TO read this - really you do
    http://monetary-metals.com/monetary-metals-supply-and-demand-report-17-aug-2014/#comment-694820

    Tell me this Guy is not an analytical genius .....

    ReplyDelete
  19. I took a quick 50% profit on WTI as the daily trend is still down, with Bollinger and ma20 heading down. So the first half of my trade must be very short term counter trend and now the stop loss is at the entry level, so once more : zero loss policy and secure some gains quickly.
    One can trace a Head and Shoulders on WTI with a neckline around 97, so the move up on friday may have been a simple pullback. Hard to say. Longer term, if the weekly inf bollinger band gives way, then WTI may be heading towards 88. If weekly inf bollinger band holds, then we may head towards 105... I already don't care. I'm in position, secured some profit, and raised my stop loss. Now the market will decide and I will save my nerves for something else.

    ReplyDelete
  20. SP500 daily.

    The ET MACD is reversing down after making new highs in terms of enveloppe of volatility, while Bollinger bands were in phase 3 (i.e heading both down). So it is likely that now the inf bollinger band (daily time unit) reverses UP and supports prices. As it is at 1900, it is likely (probabilities don't make certainties) that 1900 will hold on the short-term and the correction is already over.
    Now we still have clouds above our heads and I still consider the area near 2000 very hard to break through for bulls, so I'm expecting more pinball between those two areas.

    ReplyDelete
  21. Hilarious.

    Within hours of KWN posting over 10 "shocking" headlines about stock market crashes and gold and silver short squeezes......

    Stock futures have pretty much erased ALL of the losses and gold and crude are getting pounded to new lows.

    Way to go KWN!!!

    ReplyDelete
    Replies
    1. Mark,
      If you think KWN is such a worthless website (about which I agree 90% except they allowed many readers to discover this blog in the first place...), why do you waste your everyday life watching everything they write?
      For sure nothing will change there.

      Delete
    2. Hubert, maybe it is like a bad itch where he cant help but to scratch it when he should not, or perhaps he does it for the daily entertainment or it is his major sell or buy signal . So if he sees a headline Buy Stocks, sell gold then he knows the top is in. :-)

      Delete
    3. For me, with mineset, its all three.

      Delete
  22. When Soros pukes up those put positions, we are going to see a couple of Limit Up days in ES, NQ, etc.

    LOL......

    ReplyDelete
  23. Hussman and Noonan did not show up this week; must be just plum tuckered out of being wrong, wrong, and yes, wrong

    ReplyDelete
  24. You know everybody, I thought Christmas '08 was the greatest blow off top of all my experiences in the bond mkt; I was right for a year and I never in my wildest dreams thought we could beat those prices. I was wrong, as we did 2 years ago. Now however I am thinking that '12 maybe was IT!!

    Maybe I am thick headed but I think this is the key to the whole shooting match-----more important than energy, geopolitics and even the Kardashians. Anyway, a 33 year old bull mkt seems to me to be a weeeee bit long in the tooth?????

    ReplyDelete
    Replies
    1. Steve:

      http://www.safehaven.com/article/34845/one-chart-the-tltgld-ratio-chart

      Delete
    2. Jasper, good stuff and I thank you; I will also play a $ for you this afternoon when I drive down to Truckee this afternoon for Megamillions. We will not have a 13 handle on this yellow metal for long it appears. Hard to get bullish any commods as it looks like Mark continues to be right as the disconnect continues and stks power north relentlessly.

      Delete
    3. Steve:

      http://marketpendulum.blogspot.nl/2014/08/charts-of-interest.html?utm_source=feedburner&utm_medium=feed&utm_campaign=Feed:+MarketPendulum+(Market+Pendulum)

      Delete
  25. Poor Richard Russell must be curled up in the fetal position after missing most of the greatest stock boom ever recorded. Just check out the chart of LUV, transports are getting bubbly thanks to fastest drop in crude and unleaded gas prices in 4 years.

    ReplyDelete
  26. last 2 bulls standing are cocoa and palladium, and with big brother platinum on its ass, I would not want to hold old longs much longer. Seems to me that the U.S. is also the last man standing as Europe and Japan can not for a minute stand rising interest rates, thus putting a permanent bid under the buck, with kwn jokers dissenting of course

    ReplyDelete

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