"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



Monday, September 8, 2014

Corn and Bean Crops Holding Steady

USDA crop conditions and progress reports were released this afternoon and they show what most in the trade have come to expect, namely crops in outstanding condition.

Corn held steady with 74% of the crop rated Good/Excellent with the overall crop rated 93% Fair to Excellent. Remarkable!

Soybeans held steady from the previous week as well with 72% of the crop rated Good/Excellent but that masks the fact that the share of the crop rated Excellent moved up 1% to 19% with the gain coming from the Good category which lost 1% to it.

On the Corn progress front, which will now take on more significance since the word, "frost" is showing up, 95% of the crop is in the dough stage compared to last year at 91% and the 5 year average of 94%. 69% of the crop is dented compared to 61% last year and the 5 year average of 74%. 15% of the crop is now fully mature compared to only 8% last year and the 5year average of 26%. I maintain that this is the result of the ample rainfall which has kept the plant putting more energy into the ears rather than shutting down as the more seasonal dryness tends to produce. My view is that the lag in maturity is going to produce larger ears and more full kernels leading to an overall increase in the size of the crop when it comes to total production. Of course all of this will take a back seat now that the forecasts are showing some frost potential. Traders are going to be monitoring forecasts with the same intensity that we monitor the forecasts in late June/July for ridge and heat. Without any frost damage however, this crop is going to get bigger.

Ditto for the soybeans as far as to the relative maturity of the overall crop.
12% of the crop is dropping leaves compared to 10% last year and the 5-year average of 17%. In the Delta, Louisiana is 66% compared to the 5-year average of 57% while Mississippi is at 39% compared to the 5-year average of 47%. Arkansas is at 32% compared to the 5-year average of 22%. The South is in good shape. Then again, frost is rarely, if ever, an issue for down that way this time of year.

The big Three, Illinois, Iowa and Indiana are all lagging the 5-year average on leaf drop at 7%, 3%, and 18% compared to 11%, 10% and 23% respectively.

Since frost talk is out there we should look at Minnesota, Wisconsin and North Dakota. Minnesota is at 3% leaf drop compared to 6% last year and the 5-year average of 15%. Wisconsin is at 2% compared to 0% last year and the 5-year average of 7% with N. Dakota at 19% compared to 31% last year and the 5-year average of 25%.

What the crop needs right now is continued warmth/ seasonal temperatures and only moderate to light rains. As we get more leaf drop, dry weather is then needed/desired to facilitate harvest.


Again, traders will thus be glued to the forecast models before completely removing any weather premium left in these markets.

Incidentally, the Goldman Sachs Commodity Index notched a fresh 22 month low in today's session.




I am sure of one thing however; this will be completely missed by the gold perma bulls who will continue with one bullish prediction after another in spite of the soaring US Dollar and a sinking commodity complex. Eventually they will get it right but then again, when you keep saying the same thing year after year after year after year, eventually the market turns and you can then declare yourself a genius and a far-sighted prophet while you hope your acolytes will forget your many repeated blown calls. How sad that some continue to feel the need to make price predictions. As said many times here before, what is the point? It serves utterly no purpose whatsoever except to feed egos.

Good traders learn to read the tape and let the market predict itself. Even at that, they sometimes get it wrong. So what? At least they are humble enough to realize when they are incorrect and adjust or adapt and either get out of the way before they are harmed severely or go with the flow and profit thereby. They are flexible; not dogmatic nor wise in their own eyes.

Gold has been in a bear market ever since it broke down below $1530. No amount of manipulation claims, bullish predictions, wild theories, etc., have done a single thing to change that. Nor will they ever. When it turns, it will turn; not because some would-be psychics or self-proclaimed insiders claim it will but because the fundamental conditions that bring in money flows will change in the minds of traders.

I have traded in many different commodity markets over many years and I must admit I have never seen any market quite like gold in which so many possess such a cult-like mentality towards an inanimate object, a lump of yellow metal. It is quite disturbing to see what are no doubt otherwise rational and intelligent human beings acting in such an irrational and foolish manner and throwing all objectivity out of the window.






58 comments:

  1. poor ags getting hurt by the rising DX no doubt. usda report this thursday said to be especially negative for wheat, as world stocks growing faster than expected and usa can't sell any to world markets.... have to think usda is going to come near some of the private forecasts in beans-corn, so any squeezers on 'frost forecasts' will probably wait til the usda report is booked.
    sept contracts go off board friday for the ags.

    US dollar index made it's first touch of 85 near the open of 2004, though it feels like it's been 'low end' the whole century, it's only been generally under 85 for the last 10 years. DX last blast over 120 or 'high end' was 2002. the stock market and DX can go up together a la 1998-2000.

    say you're a producer of crude oil and you're paid in us dollars as most are, then the higher DX means you need a lower CL price for you to keep selling the same amount of product.. is it 'price discovery' or is it the producer knowing to sell enough contracts to get price where it needs to be. some producers are nations with sovereign wealth funds, it would make sense!

    cheers!

    ReplyDelete
  2. Gold brings the cults because of its so-called soundness and ties to human freedom. Read Howard Buffets "Human Freedom Rests on Gold Redeemable Money" to learn more. Trends and Price mean Nothing to such people!

    ReplyDelete
  3. My Dear Extended Family,

    Cycles are best understood as probabilities for directional movement. Those gold cycles that turned down at $1900 have now turned up with the price of gold now plumbing previous lows which are by definition major support.

    The price objective once this experience is over is $2100, and is where it will trade in time.

    I can only imagine what a deluge of emails this will bring from the Gold Internet Trolls.

    Respectfully yours,
    Jim

    Will Jim be right this time or will this be right up there with:

    "This will be all over before my birthday"
    "gold is going to and through $3500"
    "gold will never be under 1600 again"

    etc.,

    ReplyDelete
    Replies
    1. Jim has made some wrong calls for sure especially shorter term by the looks of it from what Prophet posted above.

      What you forget is Jim predicted gold would reach over $1600 an ounce and he made that call when gold was at just a mere $250 an ounce.

      That was an incredible longer term call at the time as everyone doubted it would happen.

      What made Jim so bullish on gold at $250 an ounce that so many missed would be a good learning question?

      Delete
    2. A better question is what made Jim bullish at 1913, then continue being bullish after gold made a triple top at 1800 and failed when he himself knows that is basic TA spelling bearish.

      Delete
    3. It is an asymmetric bet - he can tolerate being wrong for an entire lifetime, just so long as he was "right" even once

      I am willing to bet there was absolutely NO science or maths behind the $1600 figure, just a wild speculative guess, and far from this being any divinely-ordained or "natural" level, Gold has clearly not remained anywhere remotely close to that number

      Delete
    4. Which in my mind begs the question - did he really call it 10 years out or was it like 3 years out, I've heard both circulate around the net.
      Gotta even question calls I'm finding they can be lies or half truths at best.

      Delete
    5. If you guys do some research on Jim's investing history you see that he made millions off of gold in the 1970s run up to $800 and then got out near the top before Volker's 20% interest rates crushed gold back down.

      He has not always been bullish on gold but still is now according to Prophets post above.

      Delete
    6. If I toss a coin and win - once - does that qualify me to pontificate on how to win from tossing coins for the rest of my life?

      As it happens, a study of tossing coins can be extremely informative - if only to confirm that what appear to be "trends" can emerge and persist in systems which are sequentially independent (i.e. have no memory), and that the only way to make money is to bank the first win and then quit the game. Coin-tossing games are also a superb way of illustrating concepts such as Regret and of explaining Options theory; however, would anyone SERIOUSLY consider them as an investment strategy?

      Most Traders recognise that luck trumps judgement 7 days a week

      Delete
    7. If you invest on a coin toss Zhang why read investing websites as you are obviously not trying to learn anything.

      If you try and learn something or do some research on successful investors and traders you may find you can invest on at least probabilities that favor what ever investment you choose.

      You might as well go a casino if you feel that way about investing.

      Delete
    8. " a study of tossing coins can be extremely informative ...... however, would anyone SERIOUSLY consider them as an investment strategy?

      I take it you are just trolling for an argument again, Barney?

      Personally, I don't follow crowds or Investment Gurus, but if it works for you, good on ya'.....

      Delete
    9. So what are you doing here reading Dan's investing website then Zhang except to make silly comments?

      Delete
    10. naaah, Barney - you'll have to try harder. I'm not up for a puerile bickerfest today, there are clients to meet in the Real World.

      Delete
    11. 1978 "Sinclair became bearish but got out when prices hit $265 an ounce in late May.” – Newspaper article
      1979 Jan 5 "Sinclair a recognized expert on the global gold market is warning his international clientele that he is bearish on the metal for the next 18 months and bullish beyond that time." - Newspaper article
      1993 Apr 15 The Bear market in gold is absolutely over. - JS
      2010 Feb 11 This Is The END - JS
      2011 Apr 29 Formational breakouts are selectively happening in some precious metals shares. - JS
      2011 Jul 15 Gold Milestone at $1,754 Paves Way to $12,000 - JS
      2011 Sep 23 Market Violence Will Create Large Bear Trap - JS
      2011 Sep 27 We now expect a bottom action to occur at or above today's low of $1535 - JS
      2012 Apr 25 Shorts Now Trapped & Gold Could Gap Up to $3,000 - JS
      2012 Apr 30 I told you my clone would arrive. - JS
      2013 Jun 10 Get Out OF The System - JS
      2013 Jun 14 I will sell anything I can, not gold, from cars to boats to houses to buy my favorite gold shares. You should do the same. - JS
      2014 Jul 14 There is a strong possibility that this is the last take down before gold trades at new highs. I feel this is the situation. - JS

      Delete
  4. Hi Dan,
    I buy and sell silver for a living, so I always have a few thousand ounces in the pipeline. Based largely on your advice I sold the rest of my holdings, thank you (I think).
    Anyway, I feel more solvent, and actually have some 'Vegas' money. If I lose it I won't suffer.
    I'm pretty convinced that either airborne Ebola, Isis stinger missles, or both, will soon deliver a crippling blow to airlines. I would like to buy puts on Air France, but can't figure out how. Or perhaps a European or American airline stock index. Can you give me some recommendations on how to play this? I would love anyone's input, thank you.

    Greg

    ReplyDelete
    Replies
    1. Greg;

      Keep an eye on the silver chart and see at what point it finds support and stabilizes. Right now the chart is still negative. You could reown the metal if it looks as if it has found a bottom. The thing about gold and silver however is that they could sit in a range trade for years going nowhere. No one really knows. think about all the money that was wasted buying gold or silver for 20 years between 1980 and 2000 and ignoring opportunities elsewhere.

      On the airline stuff, I am not an equities guy so cannot help in that regards. Remember however, puts have a shelf life.

      Delete
  5. Dan ,

    How demoralised can people be as to wish deep down inside for wars and economic collapse just to make money and at the same time advocate freedom and economic justice via gold ?


    ReplyDelete
    Replies
    1. Loren;

      I think you answered your own question on that! It is one thing to own gold for insurance protection. It is another to root for the demise of the US Dollar, war, financial catastrophe, etc.

      The reason some of the gold bugs are in that camp is because they have everything they own in gold/silver and the only way they can profit on their investment is if the world goes to hell in a handbasket.

      I knew of some people who were and probably still are 100% invested in precious metals. That is beyond insanity.

      Delete
    2. There is an easy way to make a small fortune in precious metals: start out with a big one, and wait

      Delete
  6. General Jim will not see $1,650 in his lifetime.

    Isn't he over 70 yrs. old by now?

    ReplyDelete
  7. "I'm waiting for silver with a buy order in the 18.40-18.70 area." -Hubert Du Haut

    Where are you placing your stop? Thanks!

    ReplyDelete
  8. If USDX takes out $85 and keeps going, then we are back into the 1999 - 2000 mode where by commodities collapse and all that managed money in the that group starts panicking and liquidating and then start chasing ridiculous tech stocks in order to make back what they lost.

    Or, alternatively, look at Chinese stocks, the Shanghai has been on fire lately.

    One way or another all that "dead money" that has been sitting in commodities the last 3 years is going to go someplace, and go someplace really fast.

    The key is to find which group or sector gets the attention, and ride it all the way to the blowoff top.

    ReplyDelete
  9. Hi all,
    I have a theory :

    1) Europe is sinking because of its banking crisis and sanctions vs Russia. It is such a mess that Europe needs huge cash injections to sustain the system.

    2) In order not to make people panic, a deflation story was planted this summer in Europe, to justify and explain the collapse of the Eur Usd.

    3) the Eur is sinking because of european crisis and because many are choosing to buy dollar as a safe haven vs euro.

    4) gold is the ultimate safe haven when even confidence in the dollar will collapse. This will eventually take place, but not before every other single currency collapsed. It started with some in the periphery. Now the next domino is the Euro. Last will be the dollar.

    5) If the euro usd breaks through the red line of the strongly downwards support I traced, I feel there is a possibility of real panic and sub 1.20 for eur usd relatively quickly.

    Conclusion : it's a theory, but I'm watching the red line very closely, because eur usd is really starting to look like very ugly here. Interesting to note that gold is not really rising in euro terms. I.e it is plunging with the eur vs dollar. Right now the USD is still the safe heaven of choice, not gold. Maybe a tsunami is coming. But short term, the game in town is the dollar imo.

    ReplyDelete
    Replies
    1. P.S : I still think a bounce at or before 1.2735 = next fibo level on my charts is likely. But...well, I thought the same about 1.3153, didn't I?

      Delete
  10. btw Lan, PCB, do you have a linkedin profile? :)

    ReplyDelete
  11. This comment has been removed by the author.

    ReplyDelete
  12. http://edegrootinsights.blogspot.fr/2014/09/bears-better-recognize-vicious-cycle.html

    Agreed :(
    Europe seems to be on self destruct mode once more.
    It doesn't even have to be Europe as a whole.
    France, the (still) second economy of the eurozone, and its hopeless policy is more than enough to ruin the whole thing. Fabius and Hollande are making a fantastic duo. Some will prefer a the duo Hollande and Vals.
    I just found a recent picture of their last summit.

    http://i59.tinypic.com/234m78.jpg

    ReplyDelete
  13. "$2000 Gold, Next Stop!
    7-Year Gold Cycle Target $5,000 & $333 Silver" - Bo Polny.

    Hey Bo, Merci pour ce moment! hahahaha! You are fun!

    ReplyDelete
    Replies
    1. He really is a clown , in that interview from kitco , I can't help it but he reminds me of Jerry , this character from the movie Fargo , the guy who is bullshitting ALL the time ... remember ?

      Delete
  14. TRX releases drill results from buck reef , major grade upgrade ...

    ReplyDelete
    Replies
    1. "major grade upgrade "

      What major grade upgrade. Ther essults were mediocre and irrelevant. Not that the average TRX shareholder cares, any update will do.

      Before the end of the year TRX will run out of cash. 45 million dollar burned since late 2010 and nothing to show for it but 3 acres of cleared bushed lined with plastic.

      I wouldnt touch TRX with a pole.

      Delete
    2. There is some gold there. A some future time the stock will be cheap enough and the gold valuable enough for someone to invest the millions necessary to get it out profitably. Just not soon.

      Delete
    3. Jasper's right. TRX had a little over $4 million at the end of May, 2014. Burn rate is about $1 million/quarter for mostly corporate expenses. There's not enough cash to develop the mine (even bootstrapping requires close to $75 million not including sustaining capital-let's assume they've spent 1/3 to 1/2 that already) and yet hey've committed themselves to building out the mine.

      Also right about no major upgrade - control holes came in right about where one would expect or less (70% at .5g/t, 29% 0 g/t, .8%-2 holes a 5-7 g/t).

      Delete
    4. take it for what it is , for me is like buying a long dated out of the money call , thats all . you add some at the bottom , you sell some at the top .. if you get lucky and it doesnt go belly up , and gold rises , you hit home run ... it must be the most hated stock in the universe ... if gold goes down then they all go down .

      Delete
    5. More like the most promoted stock out there. Its a value investors nightmare. Just about any miner or explorer out there has a better price to value.

      Delete
  15. ... Also Agnico Buys junior canadian , pays 40% premium ....

    ReplyDelete
  16. Looking at daily charts of gold and silver. Seems that for the last two cycles they actually went up faster than they are coming down.
    Don't think this means anything, just an observation.

    ReplyDelete
  17. Hi Mike,
    Personally, what I see about gold ans silver :

    Long term : the risk is as shown in the chart below. Horizontal consolidation then strong move down just as in spring 2013. We'd have to break 1240, which then should nearly guarantee a re-test of 1180...and then...oops, where is the red support now? 850?? :)

    http://i58.tinypic.com/2e5lb8k.jpg

    Short-term, fortunately, it's very bullish, as you can see.... no, you don't agree? :)

    http://i61.tinypic.com/27ytzf8.jpg

    ReplyDelete
    Replies
    1. P.S : of course, it's a scenario, not a forecast.
      I'm not a genius like Bo Polny and other mediums who already know the prices and dates for gold every day until 2020 thanks to their secret system, lol. So, of course, to be more bearish, gold must break under 1240 and I have no idea if it will at the moment.
      Actually the Bol inf 100 period is providing a nice support area at 1252 and that's why I bought a second 1/3 of my short position at 1253 yesterday. So far, so good. From here, gold may just as well bounce back up towards 1340. No idea yet.

      Delete
    2. Hubert
      I like your thoughts. Am similarly bearish on gold and silver near and medium term. Think it might boom if the system collapses but hope that never happens. Holding out hope that the bankers gold it together.

      Delete
  18. King World News was absolutely correct about the "Devastating Collapse"

    It has happened in the gold mining sector.

    This has been the longest, most brutal bear market in 25 years.

    Exceeding the % drop and the duration of the Nasdaq crash in 2000 - 2002 and the stock market crash of 2008 - 2009.

    Especially the most recent 2008 crash, investors who simply held on saw a quick and rapid recovery, and within years, new all-time highs.

    The XAU is still grinding around multi-decade lows and is showing no signs whatsoever of recovering, after a staggering 3 years and 9 months of decline.

    And how many of the 45-year veterans and "acclaimed experts" predicted it?

    None.

    ReplyDelete
    Replies
    1. Armstrong predicted it, of course he is not 'acclaimed'. Right now his computer model points to around Feb. 2015 for a gold low. That would be the final washout around the $1,000 area +/-. From there, high water floats all boats including PMs. He also likes to point out that gold is no longer a means of carrying wealth around via airports with xray and metal detectors present (suggests diamonds). With that, he likes companies with electronic apps.that will morph into huge electronic money type banks when handling electronic $ transactions ex. Apple, Amazon, PayPal, Facebook, etc.

      Besides that, he has never stop saying the Euro is trash and heading to par with the US$.

      Only guy that charts far into the future and on a global scale.

      Delete
  19. Mark

    Lets start to compare KWN to the enemy they swore to fight.

    Horrible track record...

    Kicking the can down the road...

    ReplyDelete
  20. Me. Sunshine
    Re your comment on the previous thread.
    I don't know that the end game is for gold. There are those with all sorts of forecasts. For any of them to come true we will have a disaster of epic proportions.

    Rather than betting the farm on such a low probability event I will keep a small stake of physical and invest my money elsewhere.

    Some will be traded in what ever is moving. Some will be longer term investments. Nothing will be bet on the end of the world scenarios.

    Yes I need to be nimble enought to switch investments as fashions change but that's what I do.

    If you want to bet everything on a huge jump in gold then it's on you. Just don't come to the welfare line with your sad story.

    ReplyDelete
  21. Mr Turk is at it again

    Full credit to this guy for his stamina. (or is it desperation?)

    " With major markets on the move, today James Turk told King World News that despite the recent weakness in gold, a major revaluation spike is coming in the gold market. 

    http://kingworldnews.com/kingworldnews/KWN_DailyWeb/Entries/2014/9/10_Despite_Recent_Weakness_In_Gold,_Revaluation_Spike_Is_Coming.html

    ReplyDelete
    Replies
    1. Is Turk talking about a gold spike down?

      Delete
  22. Hello.
    EUR USD.
    The bounce on the support of the downwards red support has been spot on!
    Look at the chart and what happened last time we were in a bear trend.
    Twice, a violent upwards correction occured and sent prices towards the upper resistance.
    Will it happen again?
    Maybe, so right now I'm simply waiting for it and hope to short again once it happens.

    ReplyDelete
  23. Copper.
    Monitor 305 area. Previous low plus bollinger band weekly time unit. May bounce towards 315.

    ReplyDelete
  24. Hi, Nice site I enjoyed reading it. Thanks for sharing. Would it be possible if I contact you through your email? Please email me back. Thanks!

    Aaron Grey
    aarongrey112 at gmail.com

    ReplyDelete
  25. The 3 knights of the apocalypse are war (civil or external), disease, and starvation.
    I count 2. Looking for a big starvation and we'll know we are close to the end...

    http://www.zerohedge.com/news/2014-09-09/ebola-outbreak-doubles-3-weeks-who-warns-conventional-means-control-not-working

    ReplyDelete
    Replies
    1. Resorting to historical allegory.

      There is always some war. There is always some disease and pestilence. There is always some starvation.

      "After therefore because" is not a logical connection. It's grounds to look for a causal connection but does not establish one.

      The only place where this disaster takes place is the specific one for all three problems are present. Right now it looks like sub-Saharan Africa might be one.

      Delete
  26. more bearish by the day, as stories begin circulating that Cable and Euro could go to parity with the Greenback. Look at your long term charts, and also remember Bass called for $/Yen @ 250, 3 years ago. Looks like 100 is now MAJOR low.

    ReplyDelete
  27. Hubert, you could not lose even if you tried. You have turned into a spectacular trader.

    ReplyDelete
  28. Crude oil just imploded.

    The consumer must be jumping for joy.

    Never had it this good: Negative interest rates, and collapsing energy and food prices.

    Any wonder why XLY is only $1 off world record highs?

    ReplyDelete
  29. the Macro Picture; Platinum now breaking spring lows, and it is usually the bellweather for the pm's, so expect gold and silver to soon buckle; even the former leader palladium looks to be folding up its tent. as for copper, it looks to be a sale, as the China/Australia story is finite, along with the rest of the tired, 10 years old BRICS story and Peak Oil and on and on. Last bulls standing are the meats and Buck. Short term, the bondolas and stks look to be a little bit tired out in here.

    God love Turk, Embry, Egon and company, the true definitions of insanity. They know everything that is wrong with America, and nothing about what may be rights with Europe or Asia, or at least they aren't saying???

    Last but not least are the cocoa and coffee charts which also look like they indeed have topped.

    Hubert remains hotter than a Saturday Night Pistol !

    ReplyDelete
  30. meant to say China/Australia story is finished

    ReplyDelete
  31. James Turk has just commited career suicide. RIP

    ReplyDelete

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