"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


Tuesday, August 26, 2014

They Fall Faster than they Rise

One of the interesting things about markets is the speed at which they can fall in price compared to the length of time it takes them to rise. That is the reason that you will sometimes hear certain traders speaking of having a preference for being on the short side of a market. Such is not always the case ( I remember vividly Minneapolis wheat hitting $25/bushel one year and October Cattle being locked limit up for days on a Canadian Mad Cow case some years ago) but it does seem to happen more often than the reverse.

Case in point is this September Bean contract which has now managed to lose in two days, what it took 7 to put on. The collapse in those spreads has been intensely dramatic.

Take a look at the chart below and you will see what I am referring to.

The Euro managed a bit of a pop higher early in the session but surrendered that as the session wore on. It appears to be lacking much in the way of chart support until one nears the 1.3100 level. The chart shows the RSI down in oversold territory so a bounce is possible at any time but the pattern is decidedly bearish. Oversold conditions can last for quite some time before a market corrects them. It should also be noted that oversold ( or overbought ) readings can often be corrected by a market meandering sideways for a period.

Not much to say about today's markets overall than to note that the S&P 500 hit and pushed through the 2000 level today. The strength of this bull market has been nothing short of astonishing. Who knows how long it will last but those who have not fought the tape and gone with the move have made some enormous profits.

One of the reasons that the market continues to perform so well is that inflation expectations are simply no where to be found at the moment.

Take a look at the TIPS spread chart ( updated through 8/25) and see for yourself. Can you can how the spread continues to fall. It is now at the lowest level it has been in for the last 4 months. That is telling us that the market expectation for rising inflationary pressures is declining.

Geopolitical events are continuing to keep the gold price from succumbing to the general deflationary bias in the markets right now although it should be noted that Western investment demand, as measured by the GLD, continues to be less than impressive. Total gold holdings are down 2.6 tons on the year. Asian demand seems to be firm at the moment, especially out of India, but as has been the case for so long now, Asian demand in and of itself cannot produce a bull market in the metal. That requires Western-based investment demand and even more importantly, the momentum based crowd. Quite frankly, the latter are not interested in gold at the moment as they are too busy making money in the equity markets.

Another chart of the US Dollar - it is hanging around the resistance zone noted on the chart. If it clears that, I do not see much in the way of overhead chart resistance above there until near 83.50 and up.

The strength in the Dollar, combined with the fundamentals from the various commodity markets that go into making this GSCI, has led to a sharp fall in the overall sector. It remains lower on the year after recently hitting a 16 month low.


  1. Thanks Dan-
    If you get some time, can you comment on the livestock markets (cattle and hogs)? They have both sold off in the last few weeks but have found some short term support this week. Any thoughts on the short to medium term fundamentals for these? I believe this is typically a weak time of year for cattle.

    1. Trinity;

      the discounted board structure is working to support both complexes at the moment. Labor Day buying is wrapping up but the thinking among bottom fishers is that the pork has fallen to levels that might cause a pickup in demand. We'll have to see but both markets appear to be basing for the time being.

      CME raised the limit to 500 points on the expiring month cattle contract on the final two days of trading. That is to allow the contract to converge with the cash markets which have been consistently trading above the futures. That will not affect the August cattle contract but it will come into play next month here on out. The next contract that might possibly be impacted will be the October.

      There has been a sea change in sentiment towards the livestock complex since that Russian ban went into effect. It resulted in some big moves lower. The markets are now trying to see whether price has fallen enough for now to generate demand. The verdict remains out on that at this time but we are watching closely.

  2. This comment has been removed by the author.

  3. The GSCI looks to have hit something. Probably the sidewalk on its way to the subway.
    Absolutely amazing.

    The market can stay irrational longer than you can stay solvent.

    Never more true.

  4. Thanks Dan.

    Interesting TIPS chart, it looks to show its first big dip to deflation right as the Fed's QE taper started in January, then it has bounced up and down many times since throughout the year.

    If the TIPS moves are QE related in some way then wonder if it will bounce back up again or if perhaps there is not enough QE left to make it bounce.

    Although from the latest news, almost sounds like the central banks have some sort of deal maybe going on where if one country stops QE the other countries like Japan and Europe may start to try and pick up the slack with their own QE programs.

    1. barneyb6;

      Hard to say how that Tips Spread is going to go at the moment. In my view, much depends on the movement in the US Dollar. A rising Dollar tends to have an overall deflationary impact on the tangibles markets and that works to lessen upward price pressures from that angle. The big deal to me is the wages front. Right now those are relatively stable and not rising dramatically.

      I am still somewhat doubtful that the Fed is going to be actually able to hike rates in the current environment but the thinking of the broader market is that they will. We shall see. But if they do, it is hard for me to see inflationary pressures arising as that will tend to bolster the Dollar and keep those commodity prices overall on the weak side.

      I am trying to be flexible and see how all this mess unfolds since none of us have ever lived through anything quite like these sorts of actions by the various Central Banks.

    2. Interesting, thanks Dan.

      Yes if the central banks ever get out of the way and let the markets be free then we would see the real picture unfold.

      Does not look like that is going to fully happen though, so guess well see how long these central banks policies can continue with no consequences.
      Perhaps the bond markets will get tired of endless QE and react at some point. That would change the whole game.

      I agree too much debt to finance out there to raise interest rates willingly anyway.
      Amazing the markets can't connect the dots on the rate hike talk, looks like more a smoke screen with the years and years of mostly trendless mixed economic data.

  5. There is a very nice Andrew's pitchfork one can trace on the daily time unit for Copper prices.
    Prices have been bouncing neatly between the median and the mlh sup of that pitchfork.

    SP500 : still hoping we'll slowly reach 2010/2015 max within a few days, without any correction in between, regularly eating a few points every 2 days. That would be the best configuration to short based on what I see. Still, even if there is a correction, maybe it will only be 20 points. That's why I'd prefer to see SP500 go a bit higher, to put a stop loss pretty close above my entry level (yeah, I'm a crazy contrarian, this is very very short term, don't try this at home :)).

    Eur Usd : we've reached my orange line finally and the area of the 1.3153 fibonacci retracement level. I'm starting to wonder if it will hold or even slow down the bleeding of the Euro. If not...well it will start to look really pretty ugly on the Eur Usd chart (for the longs, of course :), here I'm not contrarian, I'm short)

    1. Hello again Hubert

      You know what I am going to say, don't you darling - THERE IS NO SUCH THING AS A 1.3153 FIBONACCI NUMBER

      If such contrived numbers work for you, Go For It! and God Bless!, but please don't make faux-erudite references to entirely imaginary ratios. The legitimate Fibonacci sequence involved 0.618 and its derivatives, which are taken as

      1 / 0.618 = 1.618
      1.618 ^ 2 = 2.618
      0.618 ^ 0.5 = 0.382
      0.618 + 0.382 = 1
      1 / 0.382 = 2.618
      0.618 x 0.382 = 0.236
      0.382 ^ 2 = 0.146
      0.146 + 0.236 = 0.382

      and if you really want to stretch the imagination

      1 - 0.236 = 0.764 and

      1 - 0.146 = 0.854

      I am not being pedantic, and you are of course entirely at liberty to use whatever metrics suit you; but please stick to the straight & narrow rather than inventing stuff

    2. I think he ment 1.3153 euro...

    3. Thanks Jasper.
      I think Zhang sometimes writes for the pleasure of writing :)
      My mistake, but hopefully most readers understood I was indeed talking about 1.3153 eur usd...

    4. Hubert- It could have been allot worse. Rather than just a "warning" you could have been fined by the Fibonacci retracement police officer who patrols this site...

  6. Sad, but true.

    "The collapse of communism was far less detrimental than the collapse we are witnessing in socialism. Under communism, people distrusted government as a whole and were more self-reliant. Under socialism, people expect to be taken care of by government. They are totally unprepared for what happens when government cannot honor its debts and promises.

    Hollande, since the beginning of his term in 2012, has taken the country from bad to worse. He has no effective policy tools available to him in an atmosphere within France that is simply unbearable. He has alienated the very people who create jobs and the unions who see nothing wrong about kidnapping a boss and his family until they get their demands cannot understand why nobody will build plants there with such practices."


    1. Twice true, Martin :)
      "There will always be a reservoir of fools to trade against."

  7. "I am trying to be flexible and see how all this mess unfolds since none of us have ever lived through anything quite like these sorts of actions by the various Central Banks."

    Yes, this sums it up nicely. May want to add it to your blog description up top :)

  8. From zerohedge:


    "As with every other asset-class in the world now, fundamentals have taken a very distant back-seat to both liquidity (flow) and positioning (technicals) as traders are increasingly (in one way or another) on the same side of the same trade. Mainstream media will proclaim US energy "independence", US sanctions 'winning' over Putin, or US airstrikes 'calming' down Middle East uncertainty; but the real reason oil is plunging is... the biggest mass liquidation of speculative longs in recorded 30 year history over the last few weeks..."

    Follow link for chart. Agree/disagree?

  9. Dear Dan,

    Is it possible that Russian response to sanctions can destroy EU economies and bring about euro disintegration?

    Russia cud use gas as last resort response. Without energy EU can disintegrate.

    Or will EU (Germany) decide to join Russia-china anti dollar axis?

  10. Aluminium traded near an 18-month high on speculation demand is rising amid signs a recovery is gathering pace in the U.S. and before data forecast to show the country’s economy expanded for the second quarter.
    Commodity Intraday Tips

    1. So your advice is to stick an aluminium bar in every Capital Star administrator's ass, Shikah Wehrmact?
      Oh, sorry, I forgot you are a spam bot, you can't answer.
      Capital Stars, the indian shit content website sponsored by bot spammers.

    2. Sorry Steve, I don't have the innate talent of Zhang Lan, so I'm trying to be just as subtle as those spammers of Capital Stars. Do they deserve any better? :)

    3. Don't mess with Lan, Hubert because she will smack you upside the head, kick your ass, and send you packing! lol

    4. Steve, then it can't be worse than what my wife did to me :)
      I have no pride left but what is left of me is very resilient.

    5. not only can you trade but you have a great sense of humor!!

  11. I've raised my short on Eur Usd at 1.3380, above the daily ma20, which is the area of the resistance of the downwards red channel (I don't update charts every day, see my previous posts).
    No idea if we'll get there.
    But I know I'll short if we do.

    1. lol, if we do bounce towards 1.33, I will really respect Fibonacci even more than before.
      Mere retracements.
      Next level gave a target of 1.3153.
      Lows of the day on my CFD platform : 1.3152.
      Just target a Fibo retracement, sit, relax, and enjoy the ride...

  12. Gold flopping around like a dead fish, unable to get any bids whatsoever.

    TRX still grinding it out near the lows around $2.25.

    Meanwhile, XRT is charging up to yet another lifetime record high.


    1. Is the consumer going to be even "better" off if this analysis comes to fruition?

      Council On Foreign Relations:
      "Why Central Banks Should Give Money Directly To The People"


      I don't think this will ever happen in any significant or effective way (unless it's a significant amount/$20K or more) but IF it ever does it'll signify utter CB/Govt desperation by doing so.

      If the Fed were to annually distribute the annual interest generated from all previous QE's directly back to the taxpayer it seems like a plausible alternative that would encounter little public resistance.

      In fact, if that was the funding mechanism of the proposed helicopter drop there would probably be little resistance to the idea of more future QE or direct monetization of US debt in the form of treasury bill purchases.

      I don't see that funding scenario playing out but I do think the ballooning QE annual interest just starting to be generated from TRILLIONS of QE the past several years could effectively be returned to the taxpayer and it would appear that no new money or debt was actually being created to pull this off.
      In fact, it would appear that the taxpayer is being repaid.
      The optics politically and monetarily would be favorable and I'm willing to bet (not really) that the majority of citizens would eagerly accept it if it was politically marketed to them in the right manner.

      People can be bought and mislead...and CB's via Treasury can create and electronically credit your account in seconds.
      Just imagine the instant and sustained consumption (and eventual jobs growth) that would take place annually if just the QE interest was given back to the taxpayer.

      Again, I don't believe this bag of money approach will occur because I don't believe CB's/Govts are this pragmatic or benevolent by nature.
      But if they wanted the voting public to support massive future QE or direct monetization (by either party) and it was sold to the public as..."your annual QE interest stipend increases as QE increases"....then I think voter resistance would subside in proportion as the faux wealth
      effect and healthier job market eased taxpayer concern about the entire set-up.

      The taxpayer/consumer might just get stronger....and corporate profits would SKYROCKET from the ensuing mass consumption that would follow.

      What seems like a plausible and perpetual funding mechanism to myself that would support the annual QE dividend payout to taxpayers will never happen...it's too practical of a solution.
      I think my scenario could work for all parties involved ( pols./ Treasury/ taxpayers) but it'll never happen...maybe.

  13. German Bund yields are now printing world record lows as we speak.

    Never before in world history has speculation in paper assets produced so much wealth.

    Imagine anyone who had the guts to buy sovereign debt in Europe in 2011 near the lows.

    If they had held the capital gains alone would have allowed them to retire.

    And since they bought the at lows, the yields obtained by holding them are simply incredible.

  14. No Dan to the contrary I do believe what my eyes are telling me vs what a painted HFT fiat Au chart is telling me. It would almost be easier if I saw the fundamentals breaking down but they are not, and the Keynesian Dream we are living is falling apart. You are being a little nasty Dan and hope it is OK for people to have a different opinion than you without being banned from the blog.

    1. Its manipulation schmanipulation. Otherwise youd be right. We get ut and your allowed to write it.

      Ponzi, fiat, banksters, hft, manipulation, etc etc. Otherwise youd be right and wed be living in a dark hole of deflation filled with shiny gold.

      Ill grant you that.

    2. Dr. Don;

      Then keep losing money - you either believe the tape or you do not. Makes no difference to me. I write here to help those who want to learn and are open minded - not those who have one excuse after another for being in an asset class that has been in a bear market for the last 3+ years and keep trying to justify themselves.

      I am in the business of making money from trading/investing. that leaves me no room for dealing with exotic theories. When gold turns on the chart, then my eyes will see it in a bullish light. It really is that simple.

      And by the way, as soon as someone who I allow to post on this blog stoops to insulting me they are gone. People are allowed to post here at my good pleasure and I am under no obligation to allow those who conduct themselves like petulant brats because I dare to speak negatively of their yellow or silver metal gods.

      "mean, angry, old man; prick, etc. do not qualify for different opinions. Those are insults from those who are angry that I do not agree with them about manipulation and other theories.

      Quite frankly, were it not for the fact that there are some first class and top notch people who post here, I would shut the entire comments section down so as to avoid giving the gold cultists a forum to vent their spleen...

      One last thing - before you decide to sit in judgment of me and my responses to some of these people, perhaps you should consider the venom directed at me, almost daily, by some of these wicked people. You do not read my emails and until you do, I suggest you refrain from condemning me. I have nothing but contempt for people who are that vile, that angry and that swallowed up in a cult that they have nothing better to do than to fill my inbox with their venom.

    3. In fairness Dan we are talking apples and oranges in that I gave up trading commodities several years ago. We are having a good year with miners doing very well and many individual oil stocks and emerging markets having a great run. For now diversification has been our friend but we have created a environment where there is no safe place to put your money.That is how you gain control of a society and is part of the Gibson's Paradox world that we live in. By the way I started as a bee keeper 40 years ago so maybe we are not as different as it would seem. Thanks for the blog, it gives me something to do to fight the boredom of the biweekly 3 day treasury auctions markets.

  15. Looks like a couple posters recently are engaging in classic baiting/derailinment techniques on here.

    I'm confident this blog won't let these obvious and frequent antagonistic derailments turn it into a trainwreck that some blogs become.

    1. Im hopefull your right DPH.

    2. DarkPurple, Jasper , Hubert; it is like I have said years and years ago here at this fine post and now maybe people are beginning to believe me, as I am not being sarcastic, but only telling it like I see it. And this is why the truth of the matter is, "most investors and gamblers, deep down inside are really looking to lose". When they bellyache about another's opposite side opinion and want to deride and argue, what they really want to do is kick their ownselves in the ass because of their self loathing, and that is all from sparks

    3. "The sheep deeply enjoy their hair cuts" it was written on 21 May 2013 right at a major bottom in this gold bear by the man known as "Mr Gold".

      I agree Steve.

    4. What are you looking for Purple Haze? Blog only for those who think like you? Sometimes a little banter can get you outside of your own head which may be good for you.

  16. Wow, we are still over 2,000 on the S & P 500 and the 10-yr. yield is only 2.36%.

    And the CRB Index can barely get up, with the USDX soaring.

    Simpy incredible times.

    Right now, if we get another 10% correction in stocks, Yellen, Draghi, and Uncle Abe basically have enough inflation cushion to start physically handing out cash directly to consumers instead of another QE program.

    Imagine that.

    Cash dropped from helicopters.

    1. I tell you what Mark , you are a pain in the neck , but you are so right . Just one more time right ? ... Sam

  17. S&P went up .01% today Mark so keep the party hat in the closet for now.

  18. Uh the dollar did not soar today Mark but if you want to see what that looks like look at a chart of the CND today.

  19. Don, this is a TRADING blog, not a forum for railing about what amounts to politics. Nobody gives a shit about KWN, Zerohedge, Turd, etc. because they have absolutely nothing useful to say--they are profoundly nihilistic, espousing a doctrine that actively seeks the destruction of our society.

    You never propose your own views of trading, confinig yourself to tearing down what others say. Dan had your number from the get-go. You've been given plenty of chances to say something useful, but you prefer to piss and moan about this site, the government, and your generally morose and pathetic view of anything bullish..

    1. Very salient points Rico of Toledo!

    2. au contraire Rico I am very bullish about many investments. I have just found that it is best to buy what is hated and sell what most loved with investments that don't have an expiration date.

  20. This comment has been removed by the author.

  21. http://en.itar-tass.com/world/746902
    1) NATO is a military alliance
    2) Ukraine (and Nato, and US?) want Ukraine to be part of NATO
    3) Ukraine is already nearly at war with Russia

    I don't see why we should worry, do you?

  22. Jesse is at it again; I once considered this guy to be both switched-on and a creative thinker, but nowadays its not just the ideas which have become fossilized, but the mantra too -

    "Gold Daily and Silver Weekly Charts - Cap, Cap, Cap " http://jessescrossroadscafe.blogspot.nl/2014/08/gold-daily-and-silver-weekly-charts-cap_27.html which is pretty much verbatim what he wrote last week and the week before (19th August - "Gold Daily and Silver Weekly Charts - Cap, Cap, Cap" http://jessescrossroadscafe.blogspot.nl/2014/08/gold-daily-and-silver-weekly-charts-cap_19.html )

    Now - lest anyone should arrive at the truly despicable idea that I write my Comments "for pleasure" - I do in fact have a point to make here in respect of Dan's reference to certain "Belief Based" Gold bloggers as cultists, viz.

    man·tra (mntr, mn-) n.

    1. Hinduism A sacred verbal formula repeated in prayer, meditation, or incantation, such as an invocation of a god, a magic spell, or a syllable or portion of scripture containing mystical potentialities.


    and at risk of repeating myself repeating myself I would venture to suggest that what we are witnessing with Jesse's addiction to "capping", KWN's habitual re-use of stock photos, and the thought-terminating-cliches http://en.wikipedia.org/wiki/Thought_Reform_and_the_Psychology_of_Totalism#Thought-terminating_clich.C3.A9 employed by Zerohedge, and the obsessive-compulsive daily cut&paste repetition of e.g. Harvey Organ's commentary by DayStar on Turd Ferguson's Island of Misfit Toys is indicative not of an interest in precious metals - or indeed any form of investment activity - but a form of self-affirmation and quest for personal validation by way of identification as a member of a group of like-minded individuals

    On the face of it, repetition of "The Message" is infinitely more important than the message itself, and it's almost as if repeating allegations of manipulation and "capping" will, over time, not only make those allegations more true, but will invoke the longed-for vengeance on those evil evil Powers that Be who rob us every day by forcing us to make duff investment decisions (and then force us to stick with them come Hell or high water). There is certainly an element of "virtue-through-suffering" penitence here, coupled to the overarching faith that "in the end" there will be Justice (on my terms, not yours)

    Rico is more brutal in his assessment, and for the reasons set out above, I do not agree with his view that the likes of Jesse and The Turd "have absolutely nothing useful to say--they are profoundly nihilistic, espousing a doctrine that actively seeks the destruction of our society., because I think they are performing a useful social service which would otherwise draw upon the resources and goodwill of e.g. The Salvation Army or The Samaritans. Reading and then regurgitating the same stock mantras every day reassures the Lost and the Lonely that they are not alone, that there is a God, and that he/she/Gold will ultimately deliver them Justice - in which context Vengeance wrought on others is infinitely preferable to any form of Righteous Blessing which I might otherwise aspire to (I don't need to be right, as long as we can agree that They are all totally totally wrong and should be punished for it)

    So, more photos of long-dead pit traders, over-lipsticked mouths, meteors impacting the planet, and Rolls Royce mascots on surfboards orbiting Uranus (where did that one come from?) - for these, Dear Friends, are no more an no less than the iconography of a cult - just as mainstream religions have crosses, Buddha's, images of Babaji or One Eyed Rain God's, so these people have their badges by which they identify themselves as part of a group: what we are witnessing is a Belief System, not an investment strategy

  23. Dear Dan,

    I’ve been a listener and soon thereafter reader of your work since 2010. I firmly believe you are a sincere trader that actually cares about your “neighbors.” If I could put this statement in writing a better way—I’d be happy to do it.

    THANK YOU very much for everything you share.

    Any postings or emails that state otherwise…are either from those who are trying to deceive people like me or are probably “mature” enough to know what they are talking about.

    Below is a little history of my experience trying to find out how Commodity markets trade.

    Having very little understanding of how markets work; I made a decision to follow about 40 individuals that made “sense in my world of thinking” and see how their writings and audio interviews played out in the real world.

    Out of the 40, there are only 5 left that I follow.

    You first caught my attention when you called the top in SLV in 2011…I believe it was in April just shortly before Easter…I think……….I wished I could have heard your recording before that Saturday….I’d hope I would have made a move before I lost most of my profit I had. I will remember your warning on KWN the rest of my life.

    You were also right when you called the double top right before the GLD 2011 Labor Day “smack down.”

    Out of the 40, there are only 5 left that I follow.

    Your call before the metals correction that came after the winter metal run-up puts you in at least the top two. Armstrong’s follower Tatro and even Armstrong himself seemed to believe that the metals bottom might have already been in.

    I would love to trade stocks more than I do but just don’t have enough experience to do it.

    You and your gang are very much appreciated back here in Ohio.



  24. Footnote

    It's easy to scoff, but I really do believe that some of these people have serious mental health issues http://www.tfmetalsreport.com/comment/393246#comment-393246 and borderline narcissistic personality disorders - http://www.zerohedge.com/news/2014-08-27/us-cant-solve-worlds-problems-anymore

    there are days when I cringe on behalf of the whole of humanity after reading that kind of infantile nonsense, but such is life in a large diverse society, and we are, after all, all God's Children (or 天下 as we heathen commies prefer to put it)

    The only conclusion is that, just as you would not sit next to a vagrant on a park bench, ask a gang of hooded teenagers for change from a $100 bill late at night, or cross the street to deliberately step on a dog turd, you don't need to pay attention to this claptrap either - or, at least, you don't need to get exercised and agitated about it. There are some very, very stupid people on this Earth, and a whole lot more who are just unfortunate - both deserve our pity more than our contempt. And Keep Stackin', ok

  25. shemblue, please name the other 4.

    1. Swanpoint,

      Trader Dan is in the top 2 and is my #1 choice...I just have to sometimes listen very closely to what he is trying to teach us.

      I "think" I listen to the others to help me see what Dan is trying to teach us...this is the best way I can put it.

      Armstrong is one that I actually found from General "Santa" Sinclair and has been mentioned here before.

      Bill Tatro listens to Armstrong but seems best at explaining what is happening yesterday and sometimes today.

      I'd rather not mention anymore without Dan's approval and I don't think it would be fair to advertise for others that I listen to...there advise is not always the best.



  26. Lan, you make very good points, but you need to put Casey and Golcore right down to the bottom of your list.

    As far as gold and silver new trading and delivery exchanges in Asia goes, well, who really cares? If nobody started a war and nobody showed up, so what? The point I am so poorly trying to make is that a lot of ideas come and go and so do venues. To wit, the SF and NO commodity exchanges.

    Over the years I have seen onions, Russet Potatoes, Round White Potatoes, Eggs, Bellies, Turkeys, Iced Broilers, Propane, CD's, GNMA's, and I have probably forgotten a few, but the simple point I am making is that in America we have the ability to try and fail and then go on. The BRICS story to me is very old and tired and in the end, lame.

  27. Steve you probably belive that the CME isn't dirty and that the Au market isn't manipulated. Bahahahahahahah

    1. We got strong believe systems here... Comes with the religion.

  28. BRICS

    its called "denial" steve and you are in good company

    1. Post, it would not be the first or last time I was wrong

  29. GOLD.


    The upper red line is the resistance of the middle term descending channel on the weekly time unit.
    The lower red line is simply a parallel to the resistance which coincides with some lows on the daily time unit, giving us a short term support.
    Purple : a dangerous Andrew's pitchfork for the bulls.
    Black : another short term support for bulls, this time going upwards.

    Conclusion : if the purple mlh sup caps gold prices, and we break eventually through the black line, we'll probably head towards 1260 for starters, then the median of the pitchfork and the inf bollinger band 100 period on the daily time unit (i.e the weekly time unit bollinger band) at 1250.

    I don't see ANYTHING positive about gold as long as it is capped by the downwards purple resistance. Buying just under a resistance is not the best way to make money.

  30. EUR USD.


    Technical analysis IS beautiful.
    I'm hearing all the time that, as markets are "manipulated", T.A is therefore useless. I beg your pardon? What's the logical link between those two statements? T.A works today just as well as it used to ten years ago.

    Look when Eur Usd prices chose to meet the fibonacci level at 1.3153 dollars! Right at the time when the orange descending line was crossing it as well (hitting the orange line was a target as well...so how to hit both support lines at once? Well...the only day they meet each other, of course!).

    Now Eur Usd is bouncing, and anyway above 1.3215, so we had our bounce on the fibo retracement level.
    All those lines drawn and the expected fibonacci level precede the evolution of prices. They are not written afterwards, but before the bounce.
    They anticipate the bounce, not describe the reality after it happened.
    Conclusion : T.A is working, and with a few tools such as those, I could launch a Bo Polny style newsletter with fantastic results.
    Imagine : Hubert du Haut made the call on the Eur Usd at one pip close, and on the very day. lol. Send me 20.000 $, quick.
    T.A works sometimes so well that it looks like magic. Why not start using it?

    1. P.S : resistance just ahead at 1.3220 with the gap down of recent days.

  31. I know it's not a focus, but the Dax (german indice) seems interesting to monitor. I'll probably short near 9600, we are hitting the daily upper bollinger bands, and with russian sanctions, Dax won't be as resilient on the way down as SP500 imho.
    Strong support line at 9000, of course, but with a stop loss just above 9600, there may be something to play on the short side here for those who trade somewhere else than commodities :)

    1. wow...I didn't think it would start so fast. I sold at 9555 at the opening of the market this morning, and I'm back from swimming pool with 100 points down. So the correction has already started.
      Target 9425 and the gap which remained opened on the daily time scale.
      Risk reward 2/1 with a stop loss at 9602.

      SP500, I'm the happy short of a tremendous huge position of 1 CFD short 1990 and 1 CFD short 2000 for a total position of 4000 $ short, call it a micro position :)

    2. This comment has been removed by the author.

    3. boarf...I'm out 50% of my position at the 23% fibonacci level of the last 9000-9600 move up, i.e 9435.
      I didn't wait for 10 more points and a close of gap.
      Who knows what happens in the next hours?
      Stop loss back on entry level at 9555.
      That's it, the rest of the position is for fun.
      Else, I've secured profit of 100 points.

    4. If only you would give up playing those pocket aces, life would be so much easier.!!!!!!!

  32. S&P started breaking your way 30 mins ago Hubert, as you stay hot!!

    1. Was there any question about it? I think he could throw darts on a board and they would all come up winners. He has turned into a great trader. Its great. By the way, you remember the movie, The devil and Daniel Webster. Good one. The devil was holding a pitchfork. Was it Andrews pitchfork that people talk about here? Morning humor.

    2. never saw that movie, Arnie. All I know is that >Labor Day, I am expecting wholesale fireworks in these mkts

    3. why have we not heard anything from the Brits on the MH17 black box??

    4. Good question Steve. There are many reasons, mostly political. My best guess they've either found something they don't want to disclose or they found nothing. In either case disclosure only embarrasses the Brits. JMHO.

  33. MH-17

    Wait for the NATO war conference next week - Europe cant risk this running on into the Winter whilst still being dependent upon Russian gas - shooting starts around 15th Sept ("and it will all be over by Christmas")

    1. And today we hear of a previously undisclosed ground crew satellite phone call to the plane.

      Not such a thorough investigation.

  34. Post; You are a better man than me if you can figure out how this is all going to play out !

  35. 4 2014 record volume days in a row for Au, so just keep moving nothing to see here.

  36. Markets look very ominous. Creepy déjà vu a la 2000 crash. Everyone bulled out of their minds. Mark you, gold shares could crash too.

  37. Long the S&P and short Au with what is going on in the world. Wow

  38. David P. out of Europe is the latest swill served up by the charlatan Eric King, the clown of them all; you just can not make it up

  39. Hi Dan, Could you please comment on USD/CAD? Thanks!

  40. Today's Meme: "Coiled Spring"

    "Coiled Spring". "Coiled Spring"

    Can YOU say that? Sure you can! I knew you could.....

    "Coiled Spring"

    1. Agree Gold is taking on a coiled spring look if you look at the compression triangle that seems to be forming since the beginning of the year (low of 1180, high of 1390) with lower highs and higher lows. An apex out in Sept/October sometime??? No way to tell which way it will release if and when it does - could be up or down.

  41. Today I write in my capacity as one of the only moderately wealthy people in the financial world, in which sense I am woefully out of my league when faced with the towering intellect and perceptive talents of none other than Rick Rule.

    Sadly - for Mrs Rule and the Rulettes, if not necessarily for anyone else - Rick appears to have been abducted and his body (or at least his pen) taken over by Aliens, and my concern is that, if they continue to spout complete and utter crap out of his finely-chiselled patrician mouth, then many of his avid followers may not accompany him much further on the journey to Wealth and Riches

    The Artist Previously Known as (p)Rick is now apparently advising us that "the slow, steady rise we’ve seen in gold prices since July of 2013 is really related to long term retail buying among Asian investors"

    but here's the thing - the Alien parasites appear unable to read a simple chart and have memories truncated in early September last year

    for here, dear Readers, is the chart of Gold over the past 12 months (a fair proxy for "since July 2013" http://www.kitco.com/charts/popup/au0365nyb.html and I trust you will agree that it shows little or no sign of either "a slow, steady rise" nor indeed of any rise at all - what with Gold having been above $1400 a year ago, and above $1380 as recently as March this year

    Secondly, of course, anyone who once read the now-fossilized In Gold We Trust website (written by Koos Jansen before he too was taken over by Aliens) will know that the peak of Asian retail buying was from April - June 2013, and that, if anything, in 2014 the pace of Gold imports to China in particular has slackened slightly (India still being on holiday & all)

    But maybe I, myself, can be of some assistance here? Ex-Rick goes on to remark that " I credit the Asians with this strength because I can’t think of any other reason why the underlying tone of gold demand would be so strong", and my suspicion is that this sorry state of affairs has come about not because there is no other reason, but because

    a) Since the abduction (p)Rick has lost the capacity for rational thought and

    b) The underlying tone of gold demand is not strong - quite the contrary

    His - or rather his Alien Master's conclusion - "My suspicion is that you will continue to see higher highs and higher lows: well, let's see, Rick, shall we, because that is NOT how it has played out so far

    And in closing on the sunny Friday morning - a Bonus Feature: ", the truth is that silver is a savings vehicle for the masses. People can buy a unit of silver for a much smaller amount of money than they can buy a unit of gold....... silver will outperform gold on the upside because it tends to move much more violently than gold does in both directions.”

    Firstly, $1,000 invested is $1,000 invested; if it's volume you are after, raw horse manure and turnips are far, far cheaper even than Silver; but YES, Rick - Silver does move much more violently than Gold - we have seen that over the past 10 days - and in the current market that need offer not one drop of comfort to anyone looking to invest in it, because the movement has been pretty much ALL to the downside

    1. That is one great very enjoyable post to read. And laugh with.

    2. I am not a fan of Rule but am watching volume surge in gold. Seems to me that the HFT Goons could be in trouble. The smart money is getting out of fiat and were it not for the cover of the fomo, and the see no evil cftc you guys would be getting smoked. Truth is coming and you are not going to like it.

    3. Hate to bust your bubble. In the real world what the markets do is real truth.

      All else is just opinion.

    4. That is not true Mike but Mr. Market does have a way of finding the truth in spite of every effort of man to lie.

  42. Hello Dr Don

    Are you what people sometimes call "A Troll" or do you have deeper personal issues which drive you to mindlessly seek confrontation and animus?

    As a Doctor, you will no doubt be comforted by the knowledge that you are not alone, and that Erectile Dysfunction apparently often has this unfortunate side effect on the frustrated & impotent

  43. Dr Don

    I fully appreciate that hard facts are to you as garlin unto a Vampire, but here are the Average Daily Volume figures for COMEX Gold http://www.cmegroup.com/wrappedpages/web_monthly_report/Web_ADV_Report_NYMEX_COMEX.pdf

    1. July 2014 174,925
    July 2013 211,235

    2. YTD 201 159,200
    Equiv. 2013 187,676

    Of course, maybe these figures are "painted", but even so, given that this is the only information which is published, what is YOUR source for the notion that Gold volumes are surging - have "The Voices" been troubling you again?

  44. LBMA Clearing Statistics [painted]***


    GOLD - down from 20+ million oz to less than 18

    Most Recent Figures: volume down 5.5%, number of transfers down 14.6%


    ***They MUST surely be "painted" fakes, for the simple reason that I don't happen to like what they are telling me, and its far more comforting to pretend that I am the innocent victim of a vile conspiracy than to just admit that I am plain wrong

    1. This comment has been removed by the author.

  45. Dr. Don, since Post and Lan have worked you over thoroughly today, I will let you rest, but tomorrow Hubert and I will take over where they left off.

    1. Can I help - I got spare time since I promised Dan to let go of Sinclair for a while.

  46. Dr Don,
    You're invited to stop by the OASIS any time; lots of us sickoes there could use a "doc". Most don't take ourselves so seriously, and some good laughs all around; of course, some chat about making and losing money too.

    1. I have a problem with my Firefox Browser - more specifically, with the Bookmarks feature.

      Does anyone know how I can add the above link to my "Don't Bother Going Back Here Again" bookmarks tab?


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