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


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


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


To continue following Trader Dan, please sign up for Trader Dan's World at the link on the sidebar to receive a 1 month, no obligation, trial membership



Thursday, October 30, 2014

Bean Meal Running into Selling near $400

Those of you who follow the grains ( have there been a lot of markets to follow these days or what?) know by now the issues surrounding soymeal, which has been pulling the entirety of the grain floor higher, in spite of the fact that we are on our way to bringing in record harvests.

The sheer ferocity of this recent rally  - ( I do not even like to use the word, 'rally' when dealing with this because this is not a rally - it is an event almost akin to what some refer to as a Black Swan - it came out of nowhere catching an awful lot of people completely by surprise) - and its SPEED has been breathtaking.

Notice that the meal market has now put on, in one month's time, what it took four months to lose! And folks wonder why some of us old time traders either have no hair or have it all turning grey! 

A couple of things - there is no concrete sign as of yet that this thing is ready to move lower. It did however put us on notice that a $105/ton rally in 4 week's time might be asking too much. It seems as if there are some willing sellers up above $400.



Traders began to see that last evening and perked up somewhat with today's export numbers the assigned culprit for some profit taking. I cannot tell at this point whether or not we have had some decent farmer selling of new crop beans today and this selling is related to hedge pressure or if this is just a round of profit-taking by the funds.

I do know that a boatload of shorts were swamped, sunk, obliterated, shot through, stabbed, mugged, dismembered, chain-sawed, buried alive, and just about any other Halloween-like actions one can use to describe what is a horror show that acts as if it was choreographed just in time for Halloween tomorrow.

This is a short squeeze the likes of which one witnesses every now and then in our commodity futures markets and which leave indelible impressions upon either those who were fortunate enough to survive them and those who were less fortunate and had their dream of becoming a commodity trader meet an untimely end. I have no doubt that many traders were ruined this month and some commercial firms took some severe body blows as a result.



In looking over the ADX, the Directional Movement Indicators are showing some signs of upward fatigue. Notice in the bottom panel that the +DMI ( Positive Directional Movement Indicator) turned lower and crossed below the rising ADX line. That is a warning sign.

Again, this is not a sign that a top is in but it does put the bulls on notice that the easy money might be coming to an end. Two-sided trade might be the new order. We'll see.

The RSI, in the second panel, hit the severely overbought level near 80. I am usually not a big fan of "overbought" or "oversold" levels because markets that reach those heights or depths reach them for a reason; however, the fact that this is doing so, when the situation in regards to the meal is a temporary one, has me taking notice.

The move lower today took the reading below the overbought zone, but just barely. One could make the case that with the overbought reading corrected, this market could simply remain near current levels for some time now and undergo a correction in time and not much in price. Again, that is unclear.



Lastly, a look at the same chart this time including the Bollinger Bands. Notice that price has been well ABOVE the upper line of the band for the entirety of this week. That is not something that happens very often. The interesting thing to note about this, that a normal "correction" could be expected to take such a market down to the middle line of the bands which is sitting near $336. That is some $54 below the settlement price of today! Tell me that this market has not gone bonkers! WOW... is that enough volatility for you?

There is no telling what we are going to get Friday so hang onto your hats. This has become one EXTREMELY DANGEROUS and UNSTABLE MARKET.

Lastly, the moo-moos did it again! What did they do? They set yet another all time high.

Take a look-see:


Take a bow October Cattle - you go off the Board tomorrow as one in the record books! I doubt I will ever see your likes again old friend! My oh my - what a move in the cattle -

The overall US economy may not be that strong but the boys in cattle country are living like kings for the moment. Hey, they deserve their day in the sun however as many of them were hit very hard back a couple of years back when back to back drought years across cattle country, first in the Southern Plains, and then in some places across the Midwest, forced many of them to liquidate their herds incurring serious losses. The combination of scorched pastures and high priced corn was simply too much. Those who survived are now enjoying the feast years but a reminder might be in order - the seven skinny cows in Joseph's dream recorded in the book of Genesis devoured the seven fat cows! Nothing ever lasts, especially in the livestock business.










72 comments:

  1. Dan, thank for the post. It seems that you fan of Welles Wilders who invented RSI and ADX. May I recommend you to use Volatility Stop also from Welles. It very good for signaling trend change

    ReplyDelete
    Replies
    1. Linh h Le;

      You are most welcome!

      I have not heard of that particular indicator before but I will certainly look into it.

      I tend to use just a few indicators preferring more to watch price action around key support and resistance levels that I note and letting those indicators confirm what I think I am seeing.

      Years ago, when I first came across Wilders, I was impressed with his simplicity. To me - simple is good. If something is so complicated that I have trouble figuring it out, I do not like it.

      Thanks for the tip on that!

      Dan

      Delete
  2. Some level headed miner chat from some ETF writer I never heard of.

    http://www.etf.com/sections/blog/23667-value-trap-underneath-gold-miner-fund-gdx.html?fullart=1&start=3

    ReplyDelete
  3. I'm surprised how anti-PM this site has become especially the comment section. I understand that the metals and miners have been slammed, but you buy when there is blood in the streets. This is a great time to accumulate if you understand the fundamentals. Don't use leverage. Buy and just be patient.

    ReplyDelete
    Replies
    1. Anti-PM? What site have you been reading?
      You make it sound like the blog should be all juiced up and bugging out over todays action and just BTFD just because.

      I'm guessing everyone here holds metals as part of their portfolio's. Just because we're not doing back flips over a 3 year bear PM market doesn't make us anti-PM.

      I'm fact, I'm looking forward to buying more gold at a better future lower price hopefully. If not, it's not a big deal.
      Do you believe we've bottomed out? Otherwise why not wait until the bear trend shows signs of reversing?

      Delete
    2. "Anti-PM? What site have you been reading?"
      Read the comments section of Dan's posts today. More anti-gold sentiment that I recall seeing on this site.

      Do I think we've bottomed out? Maybe, maybe not. No one knows for sure which is why I like dollar cost averaging. Invest for the end game, not short term movements.

      Delete
    3. Arkel-
      There's also an equally applicable platitude, "don't catch a falling knife." It's hard to know when the blood will stop spurting, as it were. Technical indicators are very useful in finding entry/exit points. Right now they are not looking helpful (to buy).

      I was looking at Oct 2008 GDX / Gold / $HUI charts today. All three bottomed 3 days earlier, Oct 27. Needless to say, you would have had an opportunity to buy again in late November during tax loss selling season.



      Delete
    4. The people that were DCA'ing the last several years all the way up to
      $1900 and all the way down would be underwater by approx. a couple hundred dollars per oz. at this point if we used $1000 as an entry point.

      I wouldn't consider anyone that buys now to be foolish at all. Knock yourself out. Icould care less how anyone spends their money on what or when. There is no retail shortage of gold or silver so why rush when I don't need to.

      Compared to $1900 and $48 these prices are relatively great but what if this commodities downdraft has another leg to it? If it doesn't, it doesn't.

      I'll wait and see how this plays out. If we hit $1000 and $12 or even close to it in the coming months I'll feel a little better about it plus I'll get more ozs. for my money.

      I think if anything, this blog is anti-charlatan as it relates to the PM blogosphere in an attempt to sound a bit of caution to the newbs or the people already smitten with the siren songs of the shills out there who've been pumping the metals non-stop with some ridiculous B.S. salespitch all the way down from $1900 and $48.

      Delete
    5. arkel;

      good luck with that "strategy". You had best hope that you are an excellent stock picker because some of these miners are not going to be in business a year from now.

      If I were you, I would heed the sage counsel of MDLGTO.

      Delete
    6. Wow Dan, I'm surprised at your change in heart in the PM space. I remember your days on KWN and JSMinset and I don't recall you having this much negative sentiment. This may be a sign that the bottom will be in soon if even YOU have become this bearish.

      As you know, the fundamentals have not changed for the US. They have only gotten worse and the Fed will have to stimulate again unless you think they will sit back and let this phony economy collapse. These PM / miner prices are a gift for anyone willing to take advantage of them.

      I won't go any further because I am a fan and have been listening and reading your material for years.

      DarkPurpleHaze, this is the negative sentiment I'm talking about.

      Delete
    7. I'm not sure I'd categorize the beat up miners as a gift but I realize some wild short-term price movements could prove profitable if prices move up or down.

      Good luck in your trading or stacking.

      Delete
    8. Arkel;

      why would you be "surprised at my change of heart in the PM space"?

      I ask this question in all seriousness to point out something that you may not be able to see about yourself.

      I have "had a change of heart" when the chart told me to have a change of heart. That is what any seasoned investor/trader does. No market condition ever remains the same. Either you change with it or you lose money; lots of money at times. It really is that simple.

      What you are essentially saying is that one must be bullish the PM metals come hell or high water and that is that. do you not understand that is ultimately a self-defeating psyche when it comes to approaching investing or trading?

      Buy the miners blindly at your own risk my friend.

      I would suggest you do your homework very carefully. I would also suggest you stop with the marriage to all things gold. There are seasons when it is time to be bullish and there are other seasons when it is time to be bearish.

      Learn to read the charts if you want to be successful at this.

      the last thing I will say to you on this topic is very succinct. Most of the people who read this blog and certainly most who post on it probably hold some form of physical gold. Just because we recognize a bear trend in a market when we see one does not mean we are under any illusions as to the nature of what is occurring in the economy. A problem is a problem however when the broader world of investors come to believe it is a problem. Until they do, catching a falling knife is only going to end up hurting you worse than you have already been damaged financially.

      best of luck to you - I honestly wish that for you but I honestly believe you are going to really need it. Be careful.

      Delete
    9. " I like dollar cost averaging. Invest for the end game, not short term movements.

      Two quick things: what end game would that be? This is not some trash novel of Hollywood blockbuster where they all live happily ever after - there is no ""end game" and if there were, what would you do with your Gold anyhow? You surely cannot live every day like it is your last, and if what you are doing is planning insurance for some truly End of Days event, then Gold is sure as hell not going to feed and clothe you

      If, on the other hand, what you are envisaging is not The Apocalypse, but some form of financial, governmental or societal upheaval which is ultimately survivable, and you want to come out of the game ahead or at least with your accumulated wealth more or less intact, then surely you would prefer to have a large amount of Gold rather than a smaller amount

      Forget $1900 Gold and look at Mike Maloney's exhortation 3 months back to buy Silver "Now" when the price was $20.95 / oz http://hiddensecretsofmoney.com/blog/silver-the-opportunity-is-now I am not singling Maloney out - there are plenty of people offering equally biased advice - but he is a useful example. The Silver chart had been going down steadily for a long period when he made his recommendation, and since then the price has collapsed to $16.18 as I write - a fall of 22.8%.

      IF precious metals are such a Good Thing in terms of disaster insurance, and IF a disaster is indeed likely to occur in our lifetimes (our parents and their parents survived pretty much through thick & thin without holding shiny metal) then wouldn't YOU prefer to hold 122 oz instead of the 100 which you would have clasped in your post-Apocryphal mitten if you had blindly followed Maloney's "advice"?

      And this is the point: Dan and the contributors here do not challenge the role which Precious Metals should play in an investment portfolio, but the self-interested prophecies of the retail bullion dealers, newsletter peddlers and sundry narcissists who care not one jot for your or anyone else's financial wellbeing than their own - either now or in the future. What people here focus on is analysisng the market as we find it rather than how we would like it to be, and right now the Precious Metals sector - along with many other commodities - looks fragile.

      In brief, why buy now? Dollar-cost averaging is a euphemism for a psychological reluctance to acknowledge a failed strategy: just read the chart, and if you can't do it, I'll help you: Gold will not have even stabilised until the price recovers to and stays above $1300; with Silver, it's at least $20. If you really are immune to short-term price swings (because of your "averaging" strategy), then where is the downside in waiting until the current downtrend has run its course?

      Who knows where the bottom might be, but if you had followed Maloney's advice, you'd either be trying to explain to your wife why your $1,000 "sure-fire" investment in Silver was now worth only $770, or kicking yourself at the missing 14 oz of Silver you could have had on top of the 48 you bought in July, if only you hadn't swallowed the Snake Oil. Maloney, meanwhile, is sitting on his sales margin and couldnt care a damn about you, your wife, your Silver or the impending Apocalypse - he's too busy driving his Tesla and looking for the next sheep to be sheared

      Delete
    10. posted 3 hourságo, as Silver was burrowing deep into the Earth's core

      http://www.tfmetalsreport.com/comment/444283#comment-444283

      could it possibly get any more childsh than this?

      Delete
    11. At leasy dan tells you when he has a change of heart unlike sinclair who is busy selling while he encourages the sheep to buy.

      Delete
    12. I no anti PM, just for profit by long and short accordingly. Btw, we Asian need USA strong for ever because we kill each other very well otherwise. When US left Iraq the mess there but if US does so in Asia Pacific, I sure we killing each other far more than radical Islamist. IS brutality would be dwarfed by us Asia. With all respect, you as Americans should believe in your own nation, please

      Delete
    13. OB...it's called...love thy master no matter what.
      Frothing platitudes over a guy named turd who last week threatened to moderate that poster over apparently nothing and then backtrack.
      Apparently the spying that took place on his (or her) behalf is completely acceptable.
      Loyalty is laced with denial and the supression of one's integrity when personal boundaries have been admittedly exploited by the admin over there.

      ~~~~~~~~~~~~~~~~~~~~~~~~~~
      Linh...interesting comment on the US keeping Asia from tearing themselves apart.
      I've given that some thought previously when considering the Islamic civil war taking place where the Sunni/Shia seems to be at the heart of the matter besides the Western interests on the surface.

      I agree, if the US pulled out of Asia quickly the mayhem that some countries might inflict upon another in the subsequent rebalancing (or historical animosity/payback) would dwarf the ME right now.
      Just imagine Japan or South Korea with no US security guarantees and what would've happened by now. :-0

      Delete
  4. Anyone interested in geopolitics will love this....

    WEDNESDAY, OCTOBER 29, 2014

    "Putin to Western elites: Play-time is over"

    http://cluborlov.blogspot.com/2014/10/putin-to-western-elites-play-time-is.html

    ReplyDelete
    Replies
    1. Or this:

      How China Bought 10,000 tons of Gold

      http://www.silverdoctors.com/how-china-bought-10000-tons-of-gold/#more-47993%C2%A0

      or maybe didn't

      if they did, and even that couldn't support the Gold price, then what hope if there for this market?

      Delete
    2. Or this:

      fully unreported, off-the-scale large euro gold buying that you don’t see reported anywhere. But it’s absolutely evident in the wholesale markets....

      http://kingworldnews.com/kingworldnews/KWN_DailyWeb/Entries/2014/10/31_Maguire_-_Were_Seeing_Stunning_Amounts_Of_Euro_Gold_Buying.html

      NB the €uro is pretty much flat agains the USD over the past month http://www.bbc.co.uk/news/business/market_data/currency/12/13/one_month.stm so all this massive "stealth" buying has had no impact on the currency market. Strange, that


      Delete
  5. That's it!

    Gold is sub 1180 and I reinforced my short position.

    SP at 2020 and I started to short a very micro line (1 CFD) as I anticipate SP bullish up towards 2040.
    Reminder : until now, the "tendance en ligne" theory happened : we broke the support down, and we are now making new highs. In theory, this would be the ultimate rallye before a stronger correction (towards 1700?). So I'm loading the gun but very slightly, as mentioned, as I am countertrend and SP has the potential imho to rallye up towards 2040-2050.

    Eur Usd went up a bit yesterday with the MACD 1 hour time scale, then reversed quickly with the same MACD and is now headed towards 1.22 - 1.23

    Silver in my support area at 15.90 - 16.00.
    Damn, it all happened in one night!!

    No time to write more, no time to trade today either, so I just took my positions and will watch more closely this weekend.

    ReplyDelete
    Replies
    1. glad to see you talk HDH. Sometime I feel pity because I no way to access US futures markets to have real volume, to have real contract. All I do now just trading CFDs based on UK. Now I so happy to see you as the one doing the same. Trading CFD far more difficult than that of real contracts in US exchanges. We doing good, HDD

      Delete
  6. By the way, RIP the gangster Bo Polny and his call for a historical low on gold.
    This as.....le was wrong all the way, all the time, but he keeps writing his newsletters. Amazing!

    ReplyDelete
    Replies
    1. HDH

      Get real, perLEASE!

      To quote from none other than the Great Egon von Greyerz, speaking today -

      "Before this is over, Eric, the people invested in gold and silver will see the prices of the only true money the world has ever seen skyrocket.”

      http://kingworldnews.com/kingworldnews/KWN_DailyWeb/Entries/2014/10/30_Powers_That_Be_Have_Frozen_Money_For_Swiss_Gold_Initiative.html

      and you can't say fairer than that........

      Delete
    2. And RIP jim sinclair who predicted 2000 dollar gold before year end and stated many times the triple bottom will gold.

      It makes me sick to see that sociopath lying stockoperator conduct his business.

      When are you gonna post pictures of sheered sheep Jimmy?

      Delete
    3. Starting Now*** Gold is going to $16,000 oz http://email.angelnexus.com/hostedemail/email.htm?CID=23245136649&ch=EFFBBCE13D76CC4D67249862D7617833&h=0edb1391fd8d95dbfd5ab1142d346cf8&ei=WTkc9xrNl

      *** This "Now", not the previous one. Forget that. And all the other Nows. And tomorrow you can forget this one too. Just, for "Now", please hurry up and subscribe to our "Shadow Bank" LC-25 loan schemes. Please. Pretty Please. http://www.angelnexus.com/o/web/65871?r=1

      Delete
    4. This comment has been removed by the author.

      Delete
    5. You mean REST IN PIECES , HDH lol all gold bugs now torn apart to be small pieces now

      Delete
    6. I just received an email from Bullionbypost.co.uk. http://us7.campaign-archive2.com/?u=a3d26a918a9435a094a843a29&id=bb024cbbc2&e=3327e591a5

      Here are the bullet-pointed headlines:

      - Gold drops to 4 year low despite Japan QE

      - Silver nears 5 year low

      - Russia boosts gold reserves

      - Swiss Sale - 1% OFF PAMP & Metalor


      From this I infer that

      a. There is no correlation between central bank Gold purchases and the price of Gold - in fact, quite the opposite. Why, then, keep reporting on how Gold is "going East", when such news (even if it were true) would not have any impact on the market?

      b. There is no current shortage of retail bullion - quite the opposite, it appears that there may be a shortage of retail bullion investors, hence the need to offer a discount in order to incentivise further purchases

      In a nutshell, therefore, this email encapsulates the iherent contradictions and conflicts of interest in the Goldbug/Bullion Dealer community: the messages are - at best - mixed (and highly selective), and there is a direct conflict of interest between objective analysis (Golf is falling in value) and the business model (Buy some more Gold).

      Unfortunatley (for Bullionbypost) I won't be stackin' "at these bargain prices", as I fear that b-b-b-Baby you just ain't seen nothing yet.......

      Delete
  7. Blame Putin. The west now in total war financially with Putin. Decreasing oil price, gold price , rubble rate….For example, to decrease oil price. Increasing supply by telling Saudi Arab. Could be keystone pipeline, SPR, cracking. Even increasing margin for whom want to long oil but decreasing margin for those who short oil. Lastly, all the west devaluating their own currencies except US. Conspiracy, I believe FED editted its FMOC announcement to make USD stronger in order to kill Putin. I see there is an orchestra to overthrow Putin globally

    ReplyDelete
    Replies
    1. The West has been at war with both Russia and China for at least the past 6 years: I date it to before the Beijing Olympics in 2008, when the first rabid rants about "currency manipulation" were raised in Congress and the steady drip-feed of "China Bubble" and "Ghost Cities" began

      It doesn't matter: the World continues to evolve irrespective of how the delusional Western media chooses to present it to the masses: none of them have ever been anywhere even remotely close to either Russia or China, and have no alternative but to lap up whatever is fed to them. It's nonsense, and by the time people discover the truth, it'll be too late. My earnest recommendation to anyone looking to preserve their wealth over the coming 25 years is not to buy Gold, but to spend that $1200 /oz buying an air ticket to Shanghai, do a little reconnaissance on the ground, and wise up. Fast.

      Delete
    2. May I share my Bible view of the end game ? At the end, the Jews will conquer all the world. To save the world, all Christians needs to evangelize to the Jews about JC so they can admit JC into their heart. Then JC will destroy the whole world to make a new one on earth. But before that happening, Islamist trying to destroy Israel as well. They will be backed up by Russia and China. To counter attack, the West needs Japan, India and Vietnam to contain China in Pacific. So there will be a lot more things going before anything about your 41k, your retirement account, your hoarding gold, your pessimistic view about USA or whatever. I from the East, I know the weakness of China and Russia. They will lose to USA but US weakness about military industrial complex and banking controlled by the Jews. So in all, the West will win over Russia and China, then the Jews make American people like slave, then Christians save the world with JC later on. Keep strong faith !

      Delete
  8. This comment has been removed by a blog administrator.

    ReplyDelete
  9. Wow...just woke up wayyy too early and I'm seeing gold broke $1180...silver with a $15 handle and the USD poised to hit 87...and the BOJ dropped another Yen bomb into the markets lap.

    Looks like the NY open and London close will make for an interesting Friday morning.

    At this point what's left for the hucksters to say (besides trying to comfort/BS their herd) that has any real guidance or foresight attached to it?

    Beware
    The
    F
    Decepticons

    ReplyDelete
  10. Back in July Mike Maloney advised his loyal readers that The Opportunity for Silver is Now! http://hiddensecretsofmoney.com/blog/silver-the-opportunity-is-now

    Silver stood at $20.95/oz back then, and Maloney's bid-offer spread on generic bars is 10.3% http://goldsilver.com/buy-online/1-oz-Silver-Bar-Sunshine-Mint/, so every $100 invested following his advise would have a resale value of $66.20 now

    Personally, I consider this to be a fairly poor performance, but that is not the point.

    What I am trying to say is

    a. Maloney doesn't care: he makes his commission either way, so long as people actually trade. "Sitting this one out" is the commercial kiss of death to his operation, and so he has a very clear vested interest in stoking speculative fervour

    b. Maloney was wrong, and that is forgivable; however, he continues to be even more wrong with every passing week, and yet he is apparently not man enough to accept his error and counsel his faithful adherents accordingly. Either he has no compunction of sense of personal shame, or he does not have his readers' interests anywhere close to his heart, or both

    Either way, expect a torrent of obsessively bigoted comments supporting the Messiah, talking of "averaging down", "coiled springs" and "long term investment". These, in my opinion, represent investors who are deeper in denial than an Egyptian submarine

    ReplyDelete
  11. "I have "had a change of heart" when the chart told me to have a change of heart."

    So you put more faith in TA instead of fundamentals? To be honest, I do not listen to the TA "experts" as often as I did in the past. Many just seem to be guessing on where the price will go, so I have lost faith in the art to some degree.

    "What you are essentially saying is that one must be bullish the PM metals come hell or high water"?"

    No, I am saying you should remain bullish since the fundamentals for the US dollar, Euro, Yen are still horrid. The Fed and other central banks have printed trillions of dollars and will continue to do so. Look at what the BOJ just announced today. This is why one should invest in PMs. Come on Dan, you know all this. I don't need to explain it to you. Stop missing the forest for the trees.

    "best of luck to you - I honestly wish that for you but I honestly believe you are going to really need it. Be careful."

    I don't need luck. Again, I know what the end game is (Ophelia Balls, it's the latter of your two choices.) and I invest for that reason.
    I guess the difference is I'm not concerned about short term movements, while you guys are. I don't trade / speculate because a lot of traders eventually blow up. I don't waste my time with it. So the good luck wishes should go to the traders and the people who put too much emphasis on the charts, not me.

    ReplyDelete
    Replies
    1. Look, I don't want to come off as some kind of troll. I like to rely more on fundamentals while the people on this page use the charts. That's fine. All I'll say is if I were really going to get into trading, Dan's page is the first I would visit. I appreciate his work and you guys are in good hands.

      Delete
    2. "Look, I don't want to come off as some kind of troll."

      you are failing

      Delete
    3. Hes trying ophelia.

      Fundamentally there is nothing stopping gold from going to 800 dollar and staying there a year or 2.

      Delete
    4. @arkel... I agree with much of what you are saying. I view TA as simply a way for those inclined to gamble in these markets to manage risk. You must admit that if one has paid attention to the charts and acted accordingly they are much better off than the gold-bug meme of "buy the dips" for the last 3 years. I think you will find that most here understand the problems facing the world's economies and own some physical gold as a type of insurance. The point is paying attention to the charts has enabled them to avoid the bloodbath in the mining shares which may have looked like a good bet fundamentally.

      Delete
    5. Gene, understood. All I am saying is TA is just a guessing game. You can look at charts until you are blue in the face, but in the end you are still guessing because you are assuming the herd is reading the charts the way you are. You don't know what the herd is seeing on these charts.

      I don't want to rely on that. What if I had sold and then the price shot up on me? I don't want to play that game.

      Can you tell me right now what silver is going to do? You'd probably say it's going to $15, but are you sure? No, you're just guessing.

      Delete
    6. arkel; Gene;

      Technical analysis and trading has nothing to do with gambling. That is simply a misunderstanding of the art of gauging demand and supply to establish price.

      All commodity prices are established by the real world of supply and demand. Those who understand HOW to read a price chart are interpreting the relationship between those two forces and the likely direction of prices as a result.

      Good risk managers for commercial firms use TA all the time in an attempt to maximize their company profits and mitigate risk.

      Those who want to gamble can go to Vegas and roll the dice. Traders do not roll the dice in the markets unless they want to become "former" traders who have all kinds of time on their hands as a result and can go to Vegas and gamble over there as well. the problem is they will have little money with which to indulge their "hobby" at that point.

      Gene - your final closing point was what we have been saying so thank you for reiterating it. Avoiding losses and making profits is what trading is all about.
      Also, the charts, and by consequence, tell us when the fundamentals have shifted, or at the least, when the perception of the fundamentals have shifted.

      arkel - one last thing - by your "buying the dip" you are actually the one doing the "gambling" and the "guessing" because you have no earthly idea what the price of the metal is going to do next. You are basing your entire investment strategy on HOPE. That is not the way to become successful. I would urge you to reconsider and start to seriously examine your view of these matters. The trading/investing world is full of people who just "knew" prices would go higher and bet the farm until they lost the farm.

      Delete
    7. TA is not a game of guessing but poker.So here the things I do before FOMC. Look at the chart of EUR/USD you know that it bearish. Chart doesn't tell lie. Next you read things in webs and they expect Fed to be dovish. Then you comeback to the chart and try to short before FOMC announcement on Wendsday. You will profit about 200 pips right now and expect EUR down to 1.22.Same for gold but I don't need to tell because Dan already did excellent job of analyzing gold recently

      Delete
  12. Looks like the BOJ unleashed the Kraken overnight. Yeesh.

    Doomsday preppers and other faith-based investors, habitually short stocks and long metals, just lost another limb.

    How long can guys like Turd and Sinclair continue to absolutely destroy their followers? I guess we'll find out.

    ReplyDelete
    Replies
    1. All the way into the bitter end. There is no limit to the damage threy are willing to do to others.

      Delete
    2. @Eric Original:
      -They will continue as long as they get revenue from banner ads. People apparently are still going on those sites.
      -Wow GDX continues to get crushed (as expected). At 17.3 this morning it is trading as low as its three worst days in 2008 (oct 23,24,27--lowest close on 10/27/2008-15.86).

      Delete
    3. Hmmmm. I had 16.37 for 10/27/08 close off of Google Fin. Maybe yours is adjusted for dividends? That would be more accurate.

      As near as I've been able to figure out, Yahoo and Google historical data do not adjust for divs, while Stockcharts does. I only use the free stuff on Stockcharts though, so I can only go back 3 years there.

      Delete
  13. Well, there's the 15 handle in silver I was expecting. But honestly, I wasn't expecting it for a few years yet. But that is the nature of markets these days. Moves that should have taken years take months. Moves that should have taken months take weeks. Moves that should have taken weeks happen overnight.

    ReplyDelete
    Replies
    1. Single figures might sound absurd, until you think that $9.99 is currently closer than $22 which is where Silver was at the end of February this year

      Delete
    2. Wasn't it $22 where Turd ate his hat?

      Delete
    3. no, I think he bet it WOULD be $23, and he ate it when it fell back rather than rallied up

      actually, I admire him for his honesty in doing that, but it didn't change him any

      Delete
  14. Premarket, GDX is down another 5%, GDXJ down another 7%. In KWN-Speak, the Stunning Collapse continues.

    Do Not Catch This Falling Knife. Don't Fight The Tape.

    ReplyDelete
  15. king dollar new highs into the 87 round number test!

    recall the SPX NDX rallied handsomely 1995-2000 as king dollar went to 120!

    gold has the mid 2010 low at 1155 which is also the fib of 681-1923.. on the weekly chart this week volume looks lower than the volume into the mid 2013 low at 1179.4.

    king dollar and weekend hedge pressure takes ags slightly red... everything follows soybeans lately.

    TGIF!

    ReplyDelete
  16. what is totally misunderstood by the likes of 'traders' on this site is that falling gold/oil prices means one thing: DEFLATION ... get it in your heads
    usd is going up because traders think that there will be a rate hike next year (just like they thought the house prices/dow/s&p will go up for ever back in 07), even though the fed has consistently come against the idea of deflation and as of just 2 weeks ago when they said 'usd is very strong and undesirable'.

    ReplyDelete
    Replies
    1. James Blogger;

      Surely you are attempting to be sarcastic are you not because you cannot be serious.

      What in the hell do you think I have been doing for the entirety of this year by posting charts of the plunging commodity indices, plunging gasoline prices, plunging crude oil prices and stronger US Dollar. Don't forget the falling TIPS spread.

      Do you live on some different planet that you have been reading this site and NOT SEEN WHAT I HAVE BEEN SAYING or are you some sort of gold cult member who is just full of anger and needs to vent somewhere?

      my goodness, I come across all kinds since I started this site some years ago but I have never yet seen the brazen stupidity of someone who takes to my site to excoriate me for writing exactly what I have been writing...

      I am beginning to think the stupid gene is more widespread than I have even imagined.

      Delete
    2. This comment has been removed by the author.

      Delete
    3. James Blogger

      How does that relate to

      a. Bean Meal

      b. Precious Metals

      c. Life on Planet Earth, as we are experiencing it right here, right now?

      USD is going up because more people are bidding it than offering it: neither you nor I have any idea what "traders" think - did you ask them all?

      To quote Einstein - there is only one difference between genius and stupidity, and that is that stupidity has no limits

      Delete
    4. Ophelia,

      Is there a remote chance that you were writing on this blog not so long ago on another nickname? :)
      I might be totally wrong, but...you remind me someone.

      Delete
  17. This new Japan twist makes it even more interesting. I'm not entirely sure why an increase and devaluation in the Yen is bad for gold. Surely gold would benefit along with other currencies. I get the strong dollar/low gold argument but fundamentally gold should benefit just as much as the dollar, more when you think about the likelihood of gold demand in Japan soaring. If I lived in Japan I certainly wouldn't hold my savings in Yen!

    The cynic in me tells me that the $20 plunge overnight through major support levels was simply another way of holding gold back given the likelihood of a stock market plunge following an end to QE.

    The BOJ steps in to save the day moments after QE ends I the US. And these markets aren't rigged?? What a lovely coincidence.

    Anyway the reason isn't important now. Computers take over and gold looks set for another massive plunge. A lot of companies will be out out of business by this. And a lot of honest folk will lose their jobs. The markets are run by a bunch of criminals but then what's changed?

    How long can silver and gold contine at less than the price to produce it?

    It'll be interesting to see what happens to stocks when the dust settles. There will be a major buying opportunity in the pm's soon but I'm personally in no rush. Short terms traders should be enjoying this.

    Good luck all.

    ReplyDelete
    Replies
    1. One other point. I personally can't see how the Fed will let the dollar rise too much more. A weak dollar policy is essential for a government with so much debt and such a high annual deficit.

      Once the technical selling is over in the pm's I expect to see some more interventions in the fx markets in the coming months which should offer some help.

      The Yen is breaking through major long terms support levels vs. the dollar. Logic tells me other central banks will be forced to respond.

      Perhaps this is the final capitulation in the pm's and the final high in the dollar? Will the rest of the world stand by and let Japan export deflation?

      Delete
  18. Bunge was out with a poor earnings report, and blamed it on lack of farmer selling, both in south america and usa. south america farmers use their product as a currency hedge, and the usa farmers built a ton of storage with their massive profits last few years thinking $9 soybeans and 3.20 corn is just too low.

    corn, beans, wheat take out Thurs' lows as dollar at new 4-yr highs; corn dn 4, beans dn 8, wheat dn 11.

    livestock green! moo-moo

    gold went up 12 yrs, now 4 yr lows, 4-12 about a fib!

    cheerio!

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

    ReplyDelete
  20. Dan, I respect and much appreciate all that you do for us here on your blog.

    Thanks very much for the heads up warning.

    But this ongoing date issue with numbers that seem to happen around with GLD price reductions…yes it is not always that way…but here it is again.

    How interesting…

    October 28-29 FOMC meeting….QE ends

    And then just by coincidence…

    October 31 BOJ… “surprises???…markets with Fresh Stimulus markets

    the date numbers “6…9…26….29….13…&…31” this has happen many times in the past

    GLD lost its $1180 support on the “31”…hmmm…I respect this is a chart reading blog site so I will remain silent and not add anymore here.

    TRX has finally fallen below $1.50…and GDX is going down.

    THE NOVEMBER 7th Jobs Report…I wonder how this is going to play out?

    ReplyDelete
  21. If you check out a chart of gold and do an overlap of the USD/JPY you can clearly see where a lack of a Yenzooka policy was gold positive.
    When Japan went " all in" in this current monetary expansion gold started falling.
    The correlation in the charts is there.

    Sooo....with the end of QE Japan injects TRILLIONS of JPY into the market system and it causes major positive ripples in equities while also creating a vortex for commodities.

    All the pundits out there who predicted a crash in the markets after QE ended were U.S.centric in their views (no suprise there) and failed to take into account that an eventual ECB (or Japan) stimulus plan would inject enough new capital to keep the markets afloat.

    How could they not realize that likely stimulative monetary scenario when specifically stating that new U.S. QE is coming after November?
    Just wait until the EU is forced to undertake a stimulative policy of it's own because at some point soon the promises and rhetoric will cease to juice the markets at some point.

    We haven't seen anything yet.

    ReplyDelete
    Replies
    1. I should add that the time period I'm referencing is late 2012 when Abe started talking about an agressive yen policy going forward.
      I clearly remember comnenting at the time that an aggressive yen policy would have a huge market impact going forward and that was when the USDJPY was still around 90.

      He kept his promise and since then gold has cratered. I find the correlation interesting and possibly indicative of something I can't quite put together right now.

      Delete
    2. Zero hedge predicted this new Japanese stimulus with US QE ending.

      Delete
    3. Dom...looks like they were spot on if that's the case.
      The only thing it seems like the BOJ isn't buying or talking about publicly is buying gold.

      I wonder if at some point they indicate they might do so (I doubt it) and at what price gold would need to drop to before they'd consider it.
      I think that scenario might be one of the reasons gold turns around at some point.
      Hard to say what it'll take to make gold look atteactive again insofar as the price looking like it might appreciate in a consistent manner.

      My guess for a couple years now is that'll take the 3rd largest economy to implode before any meaningful (game changing) Yuan strength starts up.
      When the yen looks like it's about to spiral downward almost uncontrollably is when real change happens in the international monetary scene.

      I don't think it'll be an overnight situation but instead a steady and slow degradation of the yen once it hits 120 and looks to be headed towards 130 and so on as the USD starts to see 100 on the horizon.

      This is total conjecture on my part and not a firm belief. Time will tell the tale.

      I'm not sure how much gold Japan has but if they have a substantial amount they might some day consider tying the yen to gold IF gold increases substantially in price that would allow them to do so.

      Japan imploding would significantly alter the global market place and we're all witness to it slowly happening before our eye's today imho.

      Delete
  22. The BOJ ramping up global equity purchases is the real kicker here. Giddyup.

    ReplyDelete
  23. We poor humans cannot really see much beyond the end of our nose, yet we all have this belief that we can. The world is a very unpredictable place. However, when everyone is herding in one direction to an extreme degree, and the faster this goes, there is a strong tendency for a reversal. Expect a short-term bounce in gold and the gold shares for a quick buck. Gold shares look like remarkable value. I know this is a heretical view but I think it is a good bet. Betting is the name of the game even though we all call it investing to make it sound respectable. However, after the bounce, probably one should be back to shorting gold, but who really knows?

    ReplyDelete
  24. And all this because an elderly lady opened her mouth and said virtually nothing!

    ReplyDelete

Note: Only a member of this blog may post a comment.