One Obviously Well Informed Deer

I could not resist posting a link to the following story. 

This is one deer that every gun lover and hunter should pass up taking a shot at if they were to ever see it come into their crosshairs. Why? We need this deer to pass on its genes to its progency. Now if we could just get some more American Citizens to do the same maybe we could get our country back again!

Enjoy....

By the way, for any of you leftists who happen to read this blog, it's a damn shame that a deer's got more sense that some of you.

Texas couple snaps photo of deer destroying Obama front yard sign

A Texas couple determined to find out who had been damaging a sign in their front yard proclaiming their support for President Obama's re-election bid caught the offender on Wednesday. Tom Priem, a software support engineer in Austin, told FoxNews.com he and his wife, who live on a block where political signs dot front yards, were fed up with seeing only their Obama sign repeatedly defaced.


http://www.foxnews.com/politics/2012/09/21/texas-couple-snaps-photo-deer-destroying-obama-front-yard-sign/

Trader Dan on King Worlds News Markets and Metals Wrap

Please click on the following link to listen in to my regular weekly radio interview with Eric King on the KWN Markets and Metals Wrap.

http://tinyurl.com/9c9aa8b 

Euro Gold on Track for all Time High Monthly Close

Gold priced in terms of the Euro notched a brand new all time high today at the London PM Fix and came within a mere Euro of matching its all time high based on the futures charts. It is on track, provided it has a decent week next week, to finish out the month at an all time high monthly closing price. It will be extremely difficult for the bears to mount a SUSTAINED sell off in gold as long as this chart stays firm.

Gold And Silver Fail to hold Resistance Levels

Both of the precious metals had mustered enough energy to finally best those respective chart resistance levels earlier in today's session but were repelled around midmorning and unable to keep their footing above important chart resistance. It sure seems to be, based on the price action, that there was extremely heavy capping action occuring.

It seems to me that the noteworthy strength in the mining sector as evidenced by the robust performance of the HUI has given the bulls a great deal of confidence in stepping up to buy the dips in both metals.

Gold has now entered firmly into a zone in which we can expect opposition all the way to the psychologically significant $1800 level. Keep in mind that gold tends to move towards these round numbers, fall back, consolidate a bit, pop through, fall back and hover near the round number and then move higher with that same round number then acting as a floor of support.

The reason for this, in my view, is human nature. Every time a handle changes on the gold price, it tends to put a bit of a sticker shock on prospective buyers. It's the same sort of thing that causes retailers to mark an item for sale at $19.95 instead of $20.00. We all know it's going to cost us $20 but for some reason it just seems a bit cheaper with that $19 handle on the front of it. This is especially important if you are a guy buying a new elk rifle for $995 instead of $1,000 as it makes explaining to the wife all that much easier when you confidently and calmly assert how "cheap" you bought that rifle! Ditto for the new ATV which you can say you picked up at that "steal deal" of $13,000 ($13,995) instead of having to say that it cost you "$14,000.

I am trying to help the guys out here but I am sure that the same reverse psychology has been and will be applied by the members of the fairer sex when informing us of all the great "bargains" they too have managed to find.

Generally, what then happens is that market participants as well as physical market buyers, become accepting of the fact or acclimatized to the new and higher price level. Having seen for instance a handle of "18" in front of gold, any setback in price that yields a "17 suddenly looks like a good deal where a month ago it was deemed as expensive. This is generally the nature of all bull markets except of course, when they enter a parabolic phase where greed and/or fear take over. Prices will gradually but steadily rise higher, setting back on occasion or pausing, and then pushing higher and resuming the primary trend. At some point the trend will reverse and as it does, the psychology or sentiment towards that particulary market then undergoes a reversal as well.

Where does this leave us from a technical chart perspective? Simple - if gold can push through $1800, I would expect this sort of price action to unfold, with some pausing, some consolidation and then a move higher leaving $1800 behind and it moves towards the all time high once again. The big test of course will be seeing whether it can first breach this $1800 level.

 Actually the price action in gold has been very orderly thus far. A sharp move higher, followed by a few days of sideways action as the market consolidates its gains, followed by another sharp leg higher and again a pause. The result has been a stair-stepping pattern on the price chart, which is a very healthy, steady rise in price. It's those vertical launches that quite frankly make me nervous as they can fizzle out nearly as fast as they began.

That being said, the late price action looks as if the market is a bit tired. I would not be surprised to see some additional early week selling as trading kicks off to start the new week Sunday evening. Dip buyers should remain active however on any tests of downside support. See the chart below for those levels.

I will give a more detailed look at the Commitment of Traders report this weekend but for right now, I want to note that the overall net long positions of the nonreportables, the smaller traders/general public, is at its highest level ever. Combine that with the late session selling and the retreat from a strong resistance level, some caution among short term oriented traders is warranted.

HUI looks strong - Following S&P 500 Higher

The mining shares are seeing some very good inflows of speculative money. The result has been an advance for 8 out of the last 9 weeks. The chart shows the index blowing through resistance levels with relative ease with the next Fibonacci retracement level within striking distance.

As the trend is higher, we would expect dips in price to be bought. Initial support for the index is down near the 50% retracement level that comes in near the 505 region. AT some point longs will decide to take some money off the table after a run of this nature but as to where and when this will occur, we will need to watch the price action to get a clue.

If the index were to somehow close a week above the 555 level, it is very likely that we would see the index scoot rather quickly to 600.

Global markets are all being jammed higher as Central Banks are orchestrating a tidal wave of liquidity. The reality is that none of this will do a single thing towards dealing with the ROOT CAUSES of the problem but that is what Central Bankers do in response to any financial or economic crisis - they ramp up the money supply in the hope that it will spur borrowing and lending.

I maintain that it will not  - not without an environment in which jobs are being created and borrowers feel somewhat confident that they can actually afford to make those loan payments. I have said all along, that if the Central Bankers are intent on providing funding for the banks in the hopes that they will loan the money, they are mistaken. Heck, if the feds are hell bent on printing money, instead of basically getting it into the hands of the banks, why not just send a check to each taxpaying household instead! If you are going to deliberately debase the currency, at least have the decency to give some of it to the people whom you are counting on spending it!

Let's call this the Trader Dan stimulus plan. I think that they should start with a government check in the amount of $10,000. I could use some new tractor accessories.

Gold running into Resistance at $1780; Silver at $35

Same comments this AM as last evening. Both metals are being capped by those respective resistance levels.

The New Style of Warfare - Bloodless but Extremely Devastating

Take a look at the following article and you will see that the Biblical concept of "the borrower becomes the lender's slave" is once again proving itself to be true in any age at any time.

Beijing hints at bond attack on Japan

A senior advisor to the Chinese government has called for an attack on the Japanese bond market to precipitate a funding crisis and bring the country to its knees, unless Tokyo reverses its decision to nationalise the disputed Senkaku/Diaoyu islands in the East China Sea.

http://www.telegraph.co.uk/finance/china-business/9551727/Beijing-hints-at-bond-attack-on-Japan.html

And one wonders why so many of us in the gold community are becoming increasingly shrill in our denunciation of the US government's reckless borrowing binge, particularly under the current Administration, which has to take the grand price for the most inept, reckless and profligate one in our entire history as a nation.

China is now the US' largest creditor. Take a guess at what will happen should the Chinese get it into their head one day to go and reclaim Taiwan, over any US objection. 

This is also a reason that I despise beyond the words to convey, the Federal Reserve's asinine decision to print into existence another $40 BILLION each and every month as far as the eye can see in order to buy more US agency debt to further increase the size of its balance sheet. A policy that by design deliberately debauches the US Dollar coupled with a federal government that is now more than $16 TRILLION in debt. Where exactly does that leave the US as far as any bargaining power???

When the hell will the American people wake up and realize what is happening to their country?

Incidentally, silver is having a bit of a struggle clearing the $35 level as it pauses to decide its next move. If it can push past this strong resistance level, especially if it can clear $35.50, it should be able to easily put on another $2.00 before encountering technical chart resistance. Downside support for silver is at the round number of $34 followed by $33 and then $32.50.

Gold needs to close strongly through $1780 to make a good run at $1800 again.

Hedge Fund Silver Positions

Here is the latest breakdown of the hedge fund positions in the Silver market at the Comex based on Friday's COT data.

Speculative money flows continue into Silver as hedge fund managers position themselves further on the long side of the market and continue reducing their short side exposure.