"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


Wednesday, October 8, 2014

FOMC Minutes Chasing Gold Bears out

Take a look at the 30 minute chart of gold. Note the huge volume spike coming on the heels of the FOMC minutes.

It is quite evident that the Fed is chasing the gold bears out of the gold market. I have maintained for some time now and am on record as stating that I believed and still believe that the Fed might actually come around to the point where they would welcome a higher gold price. Not a soaring gold price mind you, but one that is firmer.

Why is that? Simple - because the Fed, and this Fed in particular, is terrified of deflation. They really do believe that they can control inflation but that they are powerless to stop deflation. Their weapon of choice to fight deflation has been QE but that has not worked or perhaps a bit more kindly, has proven to have been ineffective at generating an inflation rate of 2% or more.

This is why I have continued to take exception to those who see every single move lower in the gold price as part of a sinister plan on the part of the monetary authorities to discredit it. Let's just ask a simple question and think about this:

What would have happened to gold had the Fed said that it was pleased to see the stronger Dollar and not concerned at all about a disinflationary wave moving around the global and threatening to swamp the global economy? Answer - gold would have been obliterated and the Dollar would have soared.

Question? Did the Fed say this? Answer- No, they did not. They said the exact opposite. And what happened? Answer - gold shot higher. Is it not obvious to any open-minded person that if the Fed were currently at war with gold, that they would not clearly understand in advance what a set of minutes such as were released today would do to the gold price? Of course they do. They are not stupid people. They can read price charts and see trends as good as the rest of us technicians.

The facts are that the Fed WANTS INFLATION and right now it cannot seem to get it. A falling gold price threatens to send that signal very clearly. So does a soaring Dollar.

What to do therefore? Why just talk down the Dollar. That is what they are trying to do with this latest release of their minutes. Will it work? I doubt it; mainly because by comparison, even if the Fed is not in a hurry to raise rates, the US economy looks great compared to Eurozone and Japan.

Also, the Fed's policy stance on interest rates is HEAVILY DATA DEPENDENT. What this means is that as we move forward in time, each successive batch of economic news about the US economy is going to be closely scrutinized to see whether or not it will be of sufficient strength to force the hand of the Fed on the interest rate front.

What happens if we get another jobs report that the market (rightly or wrongly) interprets as very strong? Just remember what happened last Friday to the Dollar when that jobs data hit and came in higher than most in the market were anticipating. The Dollar shot vertical and gold dropped vertical.

The more things change, the more they seem to remain the same, at least as far as these goofy markets are concerned any more. Once again we are right back to where we always seem to end up and that is to watching economic data and playing a guessing game with our illustrious Federal Reserve official of: "Will they or Will they Not" raise interest rates.

Sigh! Is this anyway to run an economy ... my oh my has this nation declined.

Here is a chart of the gold market ( short term 30 minute). Note the scare given the gold bears by the Fed. Also note that we have a temporary bottom on this chart near $1205 and a temporary top near and extending from $1220-$1225. Those are the parameters that we are now dealing with as traders.

Upside breach of the resistance sets up gold for a pop towards $1240. Downside breach sets it up for a test of $1200 and then lower once more. Buyers have clearly been at work today near $1205 but sellers appear to be trying to make a stand near $1220.

Short term indicators are positive.

Also, the huge rally in the gold shares CANNOT be ignored. Gold bears be careful right now.


  1. Interesting to see that oil didn't really react at all after the FOMC minutes were released.

    1. You still have to flush the oil stock out of the system somehow--best way to do that is lowering the price.

  2. I believe USD bull anyway but right now it needs a pull back and don't fight the FED. Oct usually a bad month for stocks so the FED scared out of it and they need to boost the market whatever it takes. SP500 just touching down a critical level, if they not do anything it will break a monthly trendline which exists over 2-3 years

  3. yes, many markets are forming a W shape on the short term. If we go beyond neckline, it will be even more bullish.
    I'm out of the way on most of my previous short positions for the time being.
    Practically out of the market in fact, but also because I for now have very little time to monitor anything, which makes it very hard to make the right decisions, being busy with other things.
    I'm hoping for a nice bounce on the eur usd towards 1.3150 so that I can short once more. Same on other markets. Maybe gold up to 1280?
    Else I have my short stop in place under 1180 with a reasonable size.
    Thanks Dan, won't be active as before (except a bit during weekends), but I'll keep reading your great blog.

  4. Gold is up a bit, but lets not kid ourselves here guys, the Fed is just riding to the rescue of the falling stock markets again with their more easy money for longer due to no inflation talk.

    A deflating stock market takes potentially trillions out of the economy if it keeps falling.

    The Fed will use any reason they can not to raise interest rates as they know the economic recovery and the stock markets completely dependent on them not raising interest rates.

    The Fed now seems to be trying to give itself cover from raising interest rates any time soon by saying 2% inflation may not be reached for a few more years.

    Thats an amazing admission by the Fed.

  5. Just too many people so bullish on USD. Dan , you not wrong but USD needs take a rest for a while. This kind of day only day traders love it. If you use The Taylor Techinque (2 down days so the third day highly probably up if testing the secon day's low) you make a home run today

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    1. Last but not least, according to Larry Williams SP500 usually down into Oct and up into May. So it will be better to look for a buy on Oct rather than a short ! History repeated in 2013 when Sp made a higher low on Oct 9- the day of FOMC meeting minutes as well and the market ran up continuously until Sept this year

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  8. Are we saying the FED has joined the conspirators on KWN to tlak up Gold prices ? Bear have been outnumbering bulls 93% for days in a row; it was only a matter of time. The real question is this a Bottom ( Short/Medium/Long Term ) or a one day wonder.

    1. WolfWisdom:

      I did not say the Fed is trying to implement a conspiracy. I am making a point that if the Fed were indeed trying to suppress the price of gold as so very many in the gold community believe, they sure as hell are going about doing so in a strange manner. Talking down the Dollar, which is exactly what they did today, has the same impact as talking up the price of gold. What is so hard to understand about that?

      Again - my point is that gold is a key market that they watch to see how the broader markets are looking at inflation/deflation. A collapsing gold price, along with the rest of the commodity complex, is what had them terrified back in 2008. They do not want deflation and thus, in my view, do not want a COLLAPSE in the gold price. IF that occurred, it would tend to occur with a collapse across the general commodity sector and would send a signal that the economy is stalling out.

      As far as the latter half of your post goes, _ I have no idea whether it is a one or two or even three day wonder. What I do know is that the shorts were spooked out by their talk concerning the Dollar.

    2. I agree, should be interesting to see if this is a one day wonder or if the deflation does continue and dollar keeps going up still, will the Fed still try to end QE at the end of this month?

      Looks like the new plan is to try and telegraph gently to the markets that next years interest rate hikes are off the table in order to keep the asset bubbles from deflating.

      Starting to look like the Fed has put itself in a box where the easy money can never end.

    3. The Fed had to talk down the dollar and indicate no rate hikes (for a long while) because they had to, they knew gold would react, but they had no choice, it was inevitable, as some have repeatedly said in the past. The argument is not about gold at all, they had to buoy the global equity markets, gold is merely a beneficiary. The other option was to not announce a long term relaxation of rates and see the markets swoon further, nothing whatsoever to do with gold in the process. Gold investors have argued that easing would continue, and that is the argument that is driving the price action - the announcement nearly coincides with a major bottom in gold which gold 'hot potatoed' off of 2 days prior to the FED announcement. The market deep down knows that easing will continue. There is no choice, it is now pump or collapse, it's a zero sum game.

      In the same vein those that argue for deflation have been totally and utterly lobotomised of their ability to look at reality. What is deflation?

      "A general decline in prices, often caused by a reduction in the supply of money or credit. Deflation can be caused also by a decrease in government, personal or investment spending."

      What prices have dropped? What governments have reduced spending? Credit has been restricted only to the degree that it cannot be paid back due to past obligations, the credit merely goes elsewhere, it does not stop. The credit bubble grows and grows, and grows, and at this point if it stops the system simply collapses. The credit is being issued, but it is being issued into fewer channels but in larger amounts.

      What we are experiencing is debt accumulation reaching its critical capacity, some might want to call this deflation but it is not. Prices of commodities fluctuate as always, but look at the charts of any commodity over more than a 10 year span and it is plain to see that prices are not dropping, they are rising dramatically. People may be fooled by a 1 or 2 year dip in the upward trend, but the trend is writ in stone, diminishing resources, more people, more competition, more war, assures higher prices far into the future. Water will cost more, energy will cost more, food will cost more, why? Because of pollution, soil degradation, resource depletion, fishery collapse, war reconstruction, and higher bids by those right near the credit faucet. If you think things are going to get cheaper I have some tungsten filled bars to sell you.

      I think the critical faculties of the once intelligent European are in a deflationary recession....one question to those who keep arguing for deflation - with what glasses are you 'deflationists' all looking at the world? Do you pay your higher taxes? Your higher medical bills? Your higher gasoline and heating costs? Do you shop for groceries? Or pay for education? What world do you live in where you are experiencing deflation, please do tell. Is it because the western consumer has less money to spend that we hear screams of deflation? No need! The Chinese, Vietnamese, Indonesians, Indians, Russians and many others will pick up the slack I assure you, deflation (lower prices) is non existent except in the minds of the intellectually myopic.

      Is America in recession? Well, which America are we talking about? I'm not in recession. I know many people that are, but also share experiences with others who are making more than they ever have, so who's in recession? It's not a simple black and white scenario. I don't look at the gasoline prices when I fill up, I just fill up, but many go to the gas station that will save them a few cents like it makes a difference after they spend their money on lottos and cigarettes.

    4. Another canard is the 'strong USD', are you friggin kidding me? Look at a 20 year chart of the US dollar index (a basket case of basket cases) and tell me the dollar is strong, whoever argues that the USD is strong and deflation (lower prices) is real are seriously challenged in the most important faculties. So you're a trader? Fine bet on the USD for a few months....but longer term? Come on now, lets get serious, there is no such thing as the 'strong dollar', or 'King Dollar'. These are fictions.

      Its inflation or collapse, its all rather elementary. Money created as debt must continuously grow or it will collapse, I can teach kindergarten kids this principle but grown men and women, another story altogether.

      (Zero interest/negative rates, government stimulus/subsidy programs, junk bond buying, 'secret buyer' treasury purchases = QE forever)

    5. Angelo
      I am more interested in the last year or two as an indicator of the near future than the 20 year trend.

      Things in a political sense are changing enough to cut the value of those long long term trends.

    6. Angelo;

      spoken like a true Mathusian.

      Why are you still posting and reading here? I thought you told us a long time ago that you were done here.

      Keep up with your inflationary arguments.. the market thinks you are bonkers and so do I.

      AS for the Dollar - tell me what is going to replace it any time soon.

      And for the record, I do not believe I am "seriously challenged in the most important faculties".

      This is the reason I get sick, disgusted and a general feeling of revulsion when dealing with twits like you. Your first instinct is to hurl puke at those who disagree with you and then somehow think those of us who spend our lives reading the markets for a living are ignorant and the sum of wisdom only resides with you.

      Such incredible arrogance is revolting.
      Now, please get lost.

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    8. Mike, those long term trends are largely demographic, geologic and environmental, meaning they are larger systems that transcend and even shape politics, which they currently are. The short term noise is good for your trading account perhaps, but longer term structural and social trends are the wave to watch.

      Dan likes to call me a Malthusian, for pointing out these trends, so perhaps I can call Dan a Believer, where human ingenuity always provides the solution.

      Does anybody know the following?

      What really is the impact of shale drilling on water aquifers? Are the consequences of any impacts long term? Are large numbers of people being affected by issues arising from fracking?

    9. You guys are arguing apple and oranges .... 20 years view vs next week ..... I agree with Angelo , all that will probably happen , even though in 20 years a lot of things will probably happen ... the problem with that is , a 20 year view may as well be a 200 year view , it just doesnt pay off to wait . In a market like today what pays is to know where the money flows are going ... of late they have definitely not been going to commodities , hence gold has been suffering , wether you believe gold is a commodity , money , or a secret weapon is irrelevant ... what is important is what the market thinks , and of late the market has been giving gold a very similar treatment that it has to every other commodity . Will this change now , after comments from the FED ? I have no idea . One thing I know now is the FED doesnt like the strong USD , because they said so yesterday . That is supportive of commodities , so it should help gold hold the 1200 which is very positive from a technical view point ... Another thing is that the USD decides to get a life of its own , and start going higher simply because foreigners want to park their money in USD ... that may be a disaster waiting to happen , no interest , and yet an appreciating piece of paper ... this may help gold as well ... We shall see anyway . In my view , there is a strong chance we revisit at least 1200 , the downward momentum is very strong , one day doesnt make a trend . Friday close will be important

  9. Dan, I can't believe you do these write-ups for free. I am always appreciative of your insights. It is days like these that I wonder why I trade for a living. Thank goodness I am hedged. Perhaps I should go to Vegas instead...at least there are free drinks and pretty ladies.

    Jobless claims tomorrow a.m.

    1. But why is Deflation the ultimate enemy? Very simple - you can't TAX deflation! Got to keep those tax revs coming in to support ever-expanding bloated govt and interest payments on the Debt...

    2. Yeah, always good guys out there. Linda Bradford Raschkee and sometimes Larry Williams giving out for free. Tom Demark not free but he revealed much how institutions trade (totally different from retails guy like us). The problem u need to be a pro trader in order to understand all insight from Dan. A naïve person like me get years to grasp it through . When you are newbies you like to read KWN, Peter Schiff,David Morgan, Silverdoctor.com even Marc Faber (I respected Faber for Gold tomorrow but he FA guy and too cautious recently, not counting his wrong call of market crash on last Oct). The more experience you get the more you appreciated Dan writing. Markets always manipulated, you follow market makers, specialists or insider trading or hedge fund or commercials or value investing it up to you. You as a retailer trader/investor don't follow any of them you dead meat. But crying too much about manipulation like gold bugs do, it is overwhelming to me. You need to read the market , learn to understand manipulators behaviors and as soon as they act follow them accordingly. George Douglass Taylor 70 years ago somehow shed light on this and he suggested a set of strategies to follow them.

  10. Dan , couldn't agree more about the USD ... one thing though is the USD going higher with the blessing of the FED , a different one will be the USD surging higher against their will ... Best

  11. Dan, very thought provoking comments. The FED don't want bears. If you want to be a bear they shock you into being a bull and anyone trying to be a clever Bear, such as being long DUST had their account obliterated as punishment.

    They don't mind you being an unhappy bull as long as you are not a bear.

    1. they let folks be a bear for two months in dust. but they don't want you to be a greedy bear.

    2. Though the Fed doesn't want bears, some things are out of the Feds control- $tran finished up on the day, but the major airlines finished WAY down on the day -- UAL & American over 3%

    3. Janet;
      The Central Banks, especially the Fed, has become the sole source of the incessant, inexplicable and unpredictable volatility in our modern financial markets. Each syllable, each utterance, each phrase, has the power to turn the entirety of our financial markets into a chaotic nightmare for investors and traders. How in the world can anyone even attempt to formulate a long term investment plan when our markets are captive to the utterances of a few financial elites?

      One cannot plan quietly and objectively what to do with one’s money when a sentence or two has the power to completely void the decision one has come to after some hours of analysis and study. Imagine what some of these money managers have to deal with to keep clients! One moment they are trying to hedge portfolio exposure; the next minute all of that has gone out of the window.

      Take a look at the HUI chart for example. In 2 hours’ time – SIX days’ worth of trading has been completely erased all because the Dollar was mentioned.

      This is a tragic testimony to how far our nation has fallen and how corrupted our once proud system of free markets has become. Sadly we have to live with it.

      There were a lot of people who had their trading account obliterated today; of that I am certain.

    4. Dan what will be interesting is the election in November. If Republicans regain the Senate, the audit the Fed bill by Rand Paul might reach the floor for a vote. Currently Harry Reid is blocking it. He will lose his majority leader position if there is a change in power. The House voted 323-92 to pass the audit of the Fed. Things could get interesting if the Feds operations in terms of its off balance sheet loans gets to see the light of day.

    5. Mad Max;

      That will indeed be interesting. I am not so sure however Max that the Repubs in the Senate could go along with it however.

    6. The problem Janet , is that , by the time you got your tip to buy DUST a couple of days ago , DUST had given already an amazing performance . In fact when I saw your post , I thought that we may be close to a pull back ... I must admit , I am thankfully surprised since I have been accumulating , to have such a pull back ... but come on ! gold miners had an awful performance for the past 3 months ! You can't blame the FED for being the patsy at the poker table . Don't be so greedy next time ...

  12. XAU HUI that's a wide range bar on accelerated volume, so it's the same as all the other items that have roared out of the oversold condition, gotta be patient before another short try.

    eur/usd hit the 2013 swing low at 1.2746 and is now below that number, but looking at Dan's DX chart below, it may be wise to wait for DX to test the 85.00 round number.

    it also might be wise to wait a few weeks to refi or lock in a mortgage as ZN did 2.2 million contracts today.

    ags were closed for the fomc blast off, so if they aren't lifted up tonite then that would be a tell.

    There continues to be chatter in the wheat trade that Australia is too dry, and
    Argentina is too wet.

    There are continued talks from Sov Econ about excessively dry conditions in
    Russia for winter wheat planting.

    if there isn't a big drop on friday to close the week of the wasde report, then ZW ZC the 10-day MA's will be above the 20-day MA's.

    soybeans don't look that well because 20-day is up at 949, another item is the goldman roll happening now out of nov. into jan. beans.

    1. grains traded for 15 mins >FOMC; please don't put up incorrect info

  13. Brazil’s CONAB will release its first official estimates for 2014/15 grain crop tomorrow. Reuters poll median estimates soybeans at record of 93.9MMT.

    export sales tomorrow expected poor in soybeans due to china was closed 10/1-7.

    lotta rain coming in: Oct8 evening 7 day QPF ramping up the S-Midwest rains many areas 2-6.5 inches.

    corn basis at the gulf down 5-10c today. our bounces in corn/wheat making sales to the world less likely.

    NDX - first marginal higher high + higher low today since 9/19. RUT, DJIA and SPX all made lower lows; no higher high.

    live cattle rocking on reopen looks like- oct. 27th ends all the nite trading!

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  15. Miners looked to be following the general market downwards more than the gold rally recently.

    Was afraid this would happen, gold and the market rally same time is death for those playing DUST or HGD (Canadian version of DUST)

    Will be interesting to see if this continues or for how long.

  16. Markets in Breakout Mode, one day up one day down, volatility so high, it is almost useless to try to predict or forecast for a longer term right now.Short term trading preferred

  17. For details.Markets too volatile so I focus on short term. Statistically, when SP down 1 day and rallies next day , subsequently it down (after a day, a week or a month). So today Thursday it could be down as well. Usually the low or the High of Monday is also the Low or the High of the whole week. So the high of this Monday 1977 (sp cash) could be closed to the top of the week. Additionally, the fist 9 business days of Oct often down. If you want to buy intraday, buy on Friday. The day -1 before Columbus, SP highly likely up.Last but not least, Sp500 usually up 1 week before OpEx (not month of triple expiration) so long SP this Friday or next Tuesday after Columbus not a bad idea

  18. I think the FED knows they are boxed in, their only way out is inflate or die, their balance sheet will become a titanic anchor and crush them if deflation unfolds. Their only way out may be to go back to a partial Gold backing / standard and inflate the Gold price sufficiently to cover their balance sheet while keeping ongoing stability in the FIAT USD. The vote on partial Gold backing for the Swiss Franc in November could be a trigger to get this move underway. Gold and commodities have played out a way to deflationary path as Dan has mentioned without these the FED and CB attempts to inflate will fail. Falling commodities lead to falling prices of everything that's deflation in itself not a bad thing, but with a financial world based around a Ponzi debt system requiring more new debt to pay off old debt the end is certain.

  19. All it took was one day for people to change there views. Lol

    1. It took a minute the FED changed words of its minutes. We call adaptation

    2. Common sense and the masses have been telling us. Not grandma Yellen
      People are not stupid.

    3. Yes, I believe in democracy and the people power but in high finance, the masses is always lost and the elite prevail

  20. Hi Dan, hope you are well.

    In reference to your recent comments the Fed is not trying to destroy gold. I'm sure if it wanted it could print a trillion dollars and short gold until the price was completely obliterated or the US could simply tell the market they were intending to sell a percentage of their holdings etc. The price of gold could be destroyed if they really wanted it too. Push it too low though and they would likely ensure a Comex default given the huge physical demand that lots of people write about as the price dips. So I guess in theory they could destroy the price but in practice there is a limit on it due to physical demand fundamentals.

    I don't think many gold bulls advocate this, what we do advocate is that the Fed are controlling the price of gold not destroying it. I've always stated on here that it is my belief that they achieved this by preventing investment demand from entering the market. Which is the main reason for the "attacks" on the Comex.

    You seem to agree with this to some extent but your arguments are that gold has been taken down along with the rest of the commodities through natural market forces and this is where we disagree (to some degree). I actually believe that it is both; there had been a deflationary mindset and commodities have fallen in price and I do believe gold and silver were due corrections but not down to the current levels we've seen. This is a point we'll have to agree to disagree on as we've discussed this many time before.

    I just wanted to point out that the Fed has mantras that conflict e.g. Gold price suppression vs. inflation targets. The Fed want inflation, and the US needs it with a massive national debt and trade deficits a strong dollar is simply not an option. Debt repayments would become impossible and debt servicing would eat too many tax dollars. The Fed wants a relatively weak dollar but they don't want the dollar to collapse and they don't want it too strong so it's all a balancing act.

    This is why the minutes came out in the way they did. I was fully expecting something like this as the dollar was simply getting too strong and out of whatever range they have decided they want to keep it in.

    The other point I want to make is that you sometimes say why don't people cry manipulation when the price of gold soars? Well recently a lot of gold price spikes have been the result of short covering not increases in longs. Folk were simply exiting trades.

    If the Fed wanted to they could easily manipulate the price of gold much higher and they could pump it up much like they have done with the stock market. But why would they want to do this given that gold is the "anti dollar".

    The US have gotten away for so long by spending and consuming rather than saving and producing and essentially rely on the rest of the world to buy limitless amounts of bonds and fund your consumption. There is every reason to control the price of gold and protect the dollar. There is no incentive to "manipulate the price higher".

    1. Ohmygosh, Dominic, you've got your goldbug goggles on. Lower prices are obvious manipulation. Corrupt. But higher prices are simply folk exiting trades. As pure and honest as mother's apple pie.

      Such is the bizarre prism through which the gold cult sees the world.

    2. Hardly Eric. Open interest fell and the price rose so it doesn't take a genius to work out that it was short covering. Hardly manipulation. Manipulation would be longs increasing when bearish news came out; people buying no matter what the news purely to take gold through technical buying levels. The news was bullish for gold hence the short covering.

      Why are you classing everyone who is bullish on gold part of a cult? Are you part of a dollar cult? I doubt it so maybe show other posters a little more respect.

    3. OK. Whatever tortured logic you need to apply to confirm your predetermined worldview, go for it! We all gotta find some way to get through the day.

    4. Fwiw, for investments, I do not have a predetermined worldview, unless it is to say I am determined to go with the flow and not fight the tape.

      This of course brands me as a heretic among economic/political religious zealots everywhere, most especially goldbugs.

    5. Eric, I welcome open, honest debate but you fail to address any of my points so little point on continuing this discussion.

      Eric I think you have been spending too much time on this site. Go out and enjoy life! Maybe have a drink on me, go on treat yourself!

  21. Hi Dan,

    I was very surprised to see GLD lose another whopping 5.39 Tons yesterday despite FED minute reprieve. This rally will be short lived if this continues.

    Keep up the excellent work and I didn't buy Natgas yet. Watching -- how do you play the Ags which are so dependent on the random weather ? Do you have any hair left???


    1. Flurple;

      Yes I did notice that as well and that has my attention. Let's see how far the current pop higher in gold will last therefore. that is not a good sign as you noted. Apparently some in there were using the rally to unload more shares and buy stocks.

  22. ZB ZN buh buh buh bad !

    US dollar is lower. Most commodities mixed to higher. New record highs for live/feeder cattle futures. Brazil weather still helping coffee./

    eur/usd back below the 2013 low of 1.2746

    Brazil's CONAB estimates country's #soybeans production for 2014/15 btwn 88.8MMT-92.4MMT w/ total grain production btwn 194.0MMT-201.6MMT.

  23. chance for alot of action again today:

    brazil weather helping soybeans as well 'hot n dry'

    cuing up led zep's 'hangman' for the eur/usd as she drops below 1.2715.

    cheerio pip pip!

  24. yest. silver dropped from 17.45 to 17.15, so was looking for bearish reasons for that (crude oil, weak world economy data, humungeous comex silver numbers) and then Dan comes out with his bullish silver article.
    chaaaaaaaaaachinga babeeeeeee!!

    buh buh buh Bonds strong is what will help the housing industry, and allay recent concerns that an ever-rising Dollar could ultimately trip up the pace of the US recovery. we're used to no interest for our bank cd's, it's been years!

    Ags apparently have some more shorts that want to square up, as corn/beans pop into green. wheat export sales were dismal.

    NQ the low o day was a touch of the 50-period MA on 4 hour chart... the MA's work on all time frames!

    the high o day for NDX FXE SLV JJC all a touch of the 20-day MA.

  25. woooooooosh NQ new low, INDU -200...

    it's DX up everything else down again, the reverse of yest. fomc minutes pop!

    every penny drop in gasoline is ~1bil USD in consumers pockets... it would be nice to finally get the SPX ten percent correction to buy into for the 3rd yr of a presidency ramp up!


    1. Here's something to consider: AA killed earnings yesterday (asterisk ex-special items)--and is nearly 7% off its high for the day.

  26. Be advised to stay away from this market except you are a day trader. Now I see a day trader can profit much in a highly volatile market like this. I know how to trade short term swing but lost a big picture.Thank Dan for balancing my view so I can focus much on my battle of day trading. This beautiful volatility happens once to 3 times a year. For Sp500 this year, Mar, Jul and this Sep-Oct. I admit that I scare of big institution activities when I do day trading and this blog and others as well help me much. So may I share with you a bit if you interested in day trading.Otherwise it still provide some useful info:
    - We have OptExt nextweek, usually Sp up into this Oct 17
    - We have Columbus so tomorrow Friday it usually up
    - Statically, SP doing well in the 3rd and the last week of Oct
    - Cyclically, Oct is the month for bottoming
    Today Sp down much and if not break the double bottom and makes a higher low, then place a buy on Friday at opening then take profit on Tuesday after holiday or until Friday Option Expiration. Next short on Monday at opening after this OptEx and take profit for 2 days. Wait for the last week of Oct then try to long for the next leg rally.Thank for reading

    1. Linh H Le;

      These markets are forcing a lot of us to be much more short-term oriented than we might otherwise be. I personally do not like to do too much DAY trading as it can wear on you after a while but with the volatility being created, there are indeed opportunities to pick up a lot of nickels with some small but quickly entered and then exited trades.

      Trading against computers however can be tricky! That is why one cannot trade too large in size. It is too risky if you are on the wrong side!

      Good trading to you and thanks for the info you provided.

    2. Dan, I just like to say a day trader like me can benefit much from yours. It may a far fetched but that it is.Keep up your work.You guys in a long term so interesting to see you guys argueing endlessly but from a short term perspective like me I know you are in a right track, Dan but I can not support you by my words. My knowledge on long term almost none. Anyway,thanks all of you guys for helping me to aware of big things out there.


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