"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


Monday, February 24, 2014

Commodities Continue Soaring... Gold and Silver following

If you want to see some absolutely amazing charts for the sheer ferociousness of a combination of short squeezes and fresh longs, look at the following...

Here is Coffee:

Here is Sugar:

Here is the Soybeans Chart:

Here is Copper:

Hey, what gives?

Sugar and Coffee have been driven higher with the recent dry, hot spell in those growing regions of Brazil; however, what really kicked them higher has been the massive number of speculative short positions that are being forced out by the buying that has moved across the entirety of the commodity sector. Beans are being carried higher by some of that same weather talk from Brazil but I think that is more of a knee-jerk reaction as they are grown in a different region. Tight old crop ending stocks are what is kicking that market higher.

Of course crude oil remains strong as does cotton, cattle and hogs.

What I find very odd however is the copper chart. It has managed a bit of a bounce off its recent lows but on a day like today, when there is a orgy of buying ( and that is the best word I can use to describe this sort of bizarre buying ) copper is actually moving lower. Lingering Chinese fears continue to undercut copper even in the face of a soaring US equity market. This chart bears very close monitoring as copper has a very solid record for its overall predictive ability in regards to global economic growth or the lack thereof.

The rate at which some of these markets is rising is simply too steep to be maintained for much longer. Would be buyers in some of these rocket shot moves, be careful....


  1. Why would we need copper anymore? No real need for anything but FED. it is like THE OUTER LIMITS. WE CONTROL THE PICTURE AND THE VOLUME.

  2. The FED can influence the narration, it can replace the actors and it can manipulate with the feelings in the audience. However, the stage is simply too large even for them to conduct and completely control the play. Rather, they are being conducted themselves, which they might not be aware of, but there are bigger things in this world than the reserve bank.

  3. http://webcache.googleusercontent.com/search?q=cache:http%3A%2F%2Fwww.ft.com%2Fcms%2Fs%2F0%2Fd5e00172-9b14-11e3-946b-00144feab7de.html&ei=NM4KU6S0D_P7yAHLuIGIBA&usg=AFQjCNHaFzw47jj5Fx8c6izaXIGy-kIt5g&sig2=nxnmTWTXcVwsdGDQNyZLqA&bvm=bv.61725948,d.aWc#axzz2uGYaSBel

  4. Well its like watching the score of a football game: 200 - 0

    How many more times can the gloom and doomers lose after predicting a horrific collapse in U.S. stocks, only to see new highs shortly thereafter?

    Hey, give me a million bucks a year in salary and I'll be happy to write a Gloom, Boom, Doom, Gold to the Moon newsletter!!

    Millions of muppets will subscribe I'm sure, and I'll be rich enough to move to Costa Rica and operate my lucrative business from offshore.


    1. Well if you make it to Costa Rica you can partner with Jim Willie.

      His main contact "The Voice" told him something about $400 silver, it's already gone into orbit it's just not reflected in price yet.

      Seriously.....and LOL!

    2. Yep…US Stocks …"to the moon Alice"
      There will never ever be another correction.

      That's what I tell the "hot stock tip" crowd.
      Sell everything and go all in..you cannot lose.

      The stock pumpers are nothing like the PM pumpers..are they?

    3. Give it some time - the rest of the world is turning their back on the Almighty Dollar so when (not if) the dollar crashes and burns $400 silver will sound like a real bargain.

  5. Ukraine is a powder keg.
    If Syria was enough to raise gold prices...

  6. Dan -

    Let me know if this was an accurate play by play today?

    OK - gold is $1321 (a.m.)

    Superhedgefund: "ok, here is the game plan: drive up all prices on gold and silver up to the gold $1335-$1338 level. Do it slowly, but with a lot of volatility in a tight range.

    If anyone gets out of line - i.e. higher than $1338 in gold or lower than $1335 in the next 6 hour time frame from 10 a.m. est to 4 p.m. will get its but kicked. The price is not allowed to deviate for over 6 whole hours. I don't want to see sub $21.00 silver. GOT IT!!

    After 10 a.m. - a lot of us need to do our errands and then some take a nap during this 6 hours so we can then game plan for tomorrow.

    OK. Do not deviate.

    Is that about right Dan?

  7. Dan - hopefully you can read through my sarcasm.

    Now I have a question for you after a statement.

    Bad weather = agriculture is rallying.

    But I am at a loss for explaining precious metals rally.

    Oil is lackluster - maybe there is low growth.

    But you taught me that precious metals rally on low real interest rates. Well, I a can not explain this rally. Yes, real interest rates on the 10 year are low but positive. 10 Year real interest rates are the highest in two years.

    What gives? From a fundamental viewpoint.

    Thanks again.

    1. jmsvett;

      Gold is rallying on a geopolitical event, namely the Ukraine. There was talk today about a potential Ukraine default on its debt as they are now trying to arrange a US-based loan, or a loan from the Euro-zone. that led to a great deal of gold buying .

      I remain very suspect about this entire gold rally ( as I do with many of these various commodity market rallies) but like I said, one has to respect the chart because in the short term, technical always trump fundamentals and right now, the technicals are pointed higher.

      I put up that copper chart because it has me concerned about the nature of these rallies taking place across the sector in general. Whenever you see a market, any market, that is rallying this sharply, know that a great number of the shorts are coming under severe pressure and are cracking. As they get out, the ones attempting to hold on and wait for the market to resume falling, get forced out because their losses are mounting. The problem for the bulls occurs when the squeeze of the shorts runs into the strong hands and the less capitalized shorts are have been run out. Then, who remains to buy at those higher levels?

      Let's keep an eye on things and see if we get some evidence that the buying binge across the sector has run its course.

    2. Ukraine's situation may still escalate quite quickly.
      There are 2 guys in the world you don't mess with : the Zohan, and Putin.
      Our beloved president and Merkel did another great declaration by stating that "Ukraine should not be allowed to part (split in two)".
      Oh really?
      You mean, Eastern Ukraine and Crimea shouldn't be allowed to go back under russian control?
      Does our beloved presidonk understand what he is saying to the face of Russia?
      Sevastopol is a strategic military port for Russia.
      Ukraine is divided in two, with the eastern half a majority of russian speaking people.
      So Ukraine is kind of Georgia and Syria altogether, and square 2 or 3 in a scale of geostrategic importance for Russia, because it is considered there as the natural extension of their homeland.
      Having seen what Russia did in Georgia and regarding Syria, I don't imagine they'll give a lot of importance to Hollande's recent declarations if they feel that they are losing control on this strategic region.
      We don't even have a fool as a president, but a puppet. A puppet on autopilot, selling France's best interest to some "higher" interests overseas. The old country coming for an old continent (Dominique de Villepin, against war in Irak, UN speech) became a carpet.
      It is justice, to respect the Yin-Yang universal balance.
      We had our De Gaulle. Now comes the anti-De Gaulle.
      I'm so disgusted with our politicians.
      As Armstrong recently mentioned, maybe Maïdan will go viral soon and we'll get rid of the plague of career politicians?

    3. Nah. Putin still wants a Nobel Peace prize which he was robbed of after his Syrian diplomacy. He'll do it again with the Ukraine and it's back down to 1180 for gold.
      The hedge funds are just orchestrating a pump and dump - buyer beware. War premiums slip away like a thief in the night.

    4. In addition he just spent the most ever on the Olympics, he's going for man of the year.

    5. Ukraine is splitting in two and is close to the point of no return, internally. Depending on what "government" emerges in Kiev, I think Putine is perfectely able to call anyone's hand and come to "protect" easter Ukraine just as he did in Georgia.
      His moves about Syria showed he is not backing down from potential confrontation with US.
      Imho he can't care less for the Nobel Prize.
      Olympics served him internally first of all.
      Building the pride of great Russia.
      You don't know Russians if you think they'll just let the West take control of Ukraine and do whatever they want there. There will be a red line, but Putin won't talk about it all the time in the media.
      I'm sure he's doing it one to one with our presidents, though.
      This guy is not Hollande.
      I prefer to worry too much on this one than not enough.
      Risks of escalation are higher than in Syria or Georgia.
      The people of Ukraine won't necessarily reconcile, despite the desires of european countries.

  8. when a market acts nutty I just go to the sidelines. big moves afoot but half will get them right and half will be wrong. I like better odds. I'll play when I ready nor because I always feel the need to play.

    1. That's exactly what I have done, northwind, went on the sidelines, although I exercise great will power by resisting to short the S&P and the miners. The S&P might still go parabolic on us, before it breaks, but as far as the miners are concerned, I have a kind of deja vu, only this time I'm not long as I was then. Sometimes doing nothing is best you can do.

    2. Abraxas- took some money off the table today--even some profits long miners (XPL, PAAS, LSG). Miners looked like they were running out of gas today: Many of the 'better' miners retraced all losses since the April 2013 crash...RGLD closed highest since April 9, 2013. PAAS right up to its April 11 close. But, like you I have that sense of deja vu all over again.

      What's different this time is the juniors are outperforming majors. LSG & XPL actually hit 52wk highs today. (some) miners now show overbought/RSI over 70. (LSG indeed looked like it's support level was April 11 pre-crash level). As I mentioned before, no doubt b/c of the M&A activity, finally. DUST's 200DMA has inflected and is sloping down (imperfect indicator due to decay).

      HUI:GOLD is still not good & not up to pre-april crash levels. So I'll wait it out a bit before next trade. Ideally, Gold & miners would break out & pre-crash/april levels would form support rather than resistance. At the end of the day, gold has to be high enough for miners to spin profits in order for them to be worth something, otherwise they may as well be airline stocks.

  9. Commodities are reacting to imaginary forced inflation via Yellen's first act of fed presidency, stopping payment on reserves....

  10. Gold is climbing it's wall of worry. With the MSM calling for huge falls $1000, $800, $600 I kind of like this negative sentiment.

    How about this for a wall of worry.


    The mine field that is the US mega banks Goldman Sachs exposure to derivative contracts 381 times total assets.

    Perhaps commodities are preparing for the mega bailout or is that bailin!

  11. What a strange environment. We have China slowing (deflationary), the Fed likely to freeze its taper plans (shows deflation remains intact), the GS commodity index rising (suggests inflation), and the Ukraine problem.

    I don't trust Russia and think that it'll make a sudden move while the western nations are sleeping. The Ukraine isn't free yet.

    I'm in 50% in the gold miners - if they go higher...great, if they fall...i'll buy in again at lower prices. Seems prudent at this time. Peace.

  12. 1337 : another daily fibonacci retracement of the 1435-1180 down move.

  13. Silver reached my theoretical target of 22.20 $ which I posted a few days ago.
    I'm not here to say "see? I told you!" kind of ego oriented stuff, but simply to witness and stress on the fact that technical analysis is not a BS science but really allows traders to identify some high probability areas for targets and reversal points, which is all the point : where do I buy, where do I sell?

    So, this 22.20 theoretical target was obtained by a simplest T.A trick, in French "la règle du balancier" ou "report de range".
    Silver was bouncing up and down within a horizontal range between 19.00 and 20.60. In this case, take the same delta (here 1.60) and add it to the ex resistance, to find your target. 20.60 + 1.60 = 22.20.
    It's only a target.
    It doesn't mean you are sure prices will race there.
    It only means that it can be a realistic target and that prices have at least a fair chance to get there, statistically speaking.
    Have a nice day,

  14. http://www.moneyandmarkets.com/how-to-keep-up-with-speculators-in-the-gold-market-58579

    Is Douglas Davenport reading Trader Dan's blogs ?

    1. Wolf - you know what is so pathetic about this generation? It has no ethics, no honor and no integrity- and perhaps more illuminating - no functioning conscience. If people are going to lift my writings nearly verbatim, they should have the decency and honor to at least attribute the source of "their inspiration".

      Oh well, I guess I should be happy - imitation is the sincerest form of flattery.

    2. my God , that guy basically cut and paste HAHA ! thats pretty pathetic …. gold going higher though … BTW , where is Mark ? I guess he run away with my bit coins , he didn't show up for bbq , now I figure

    3. Worse, that guy is selling his own shit, baiting people with Dan's free stuff.
      Damn, it's like if a newsletter analyst like Polny was using as a free letter for subscription to his subscriber service the free content made by Dan as a bait!

      Someone said, you will not sell what was given to you for free.
      I hope this moron will meet his creator.

    4. Best way for you to express you feeling is to post in comments section at the end of his article:

  15. Potential triple top in s&p 500 here.

  16. Biotech is a bubble if you ever see one.

  17. Bitcoin---the beginning of the end or the end of the beginning? sparks

  18. Gold's High Volume Spike above 1350 about to occur and silencet all the Anti Hyperinflationists!

    1. Shark, now that you have been trading for 3 months and want to buy the gold >1350, I think I will give you some; you do not seem to realize that hyperinflation has already arrived, or do you just look at the $dx and ignore the rest of the world. You are just like the guy who sits down at the poker table and sez to everyone, "look fellows, if we all just play nice, we can all win a little bit". hahaha, if you think you are gonna come out winners in a hyperinflation, well, then, ;good luck, my son; sparks

  19. One of the year veteran clowns is now predicting that a number of black swans are to pop up in 2014. Someone should explain to this venerable gentlemen that black swans are by nature utterly unexpected events and therefore unpredictable. If he can anticipate it then it's not a black swan by definition. Ignorance and shamelessness know no boundaries.

    1. well said Abraxas; but remember, if you are a 40 yr vet of the mkts and made a right call 10 yrs ago and have lived all over the world, and consult to oligarchs and once managed the men's room at Goldman or Morgan or Drexel or whatever, then, what you say is gospel; sparks

    2. So true, Steve. So unfortunately true. But that's how this world is set, so there's nothing we can do about it, except make fun of these clowns and try to profit a little in the process (if that's not too much to ask).

  20. Dan,

    I have been reading your blog for years now. I always learn something and I thank you for doing it openly free. Concerning your fights with some other people in the gold community, I have my own opinion about it and to be honest it does not bother me much as to others do. I keep on reading your thoughts every day.
    I have question if I might.
    I agree with you that Ukraine has a lot to do with the current rally. Looking at the latest COT and reading Ted Butler (I read him too, I hope is ok) apparently JPM is almost the only player adding shorts against the remaining ones. The rally is two weeks long now, and JPM could have profited from a rise if it joined the other participants. Instead, and probably from last Tuesday more so, it increases shorts against everybody.
    I have in my blog, as a fixed link, an article of yours named “The Anomalous Open Interest Pattern of the Gold Market”. Where you describe that “some agents” pile shorts not bothering about the unrealized losses. They just keep doubling down in some cases.
    Is not this behavior something odd? Being long gold overall, instead of profiting from it against Managed Money on the rise, short with everything you have.
    It seems like the rise is OK as long as it is orderly. Just like the one we have.
    Have you noticed today after the consumer data, the 10k GC traded? Half where new shorts… Even with tanks in Sevastopol.

    Thanks in advance for your great thoughts

    1. No, UG, it is not OK to listen to Ted Butler. This is Norcini's cult and we only listen to Norcini!

      Just kidding, of course.

    2. UG;

      It can be difficult at times to know exactly who is doing what in the markets and why because we do not have access to data from all the other forums/venues/markets that some of these large players might have exposure in.

      There is a huge OTC market - there are other exchanges ., etc. that large players can use to spread off positions that they hold in one venue.

      Remember - it was back during the December Comex Gold delivery period when the perma gold bugs were crying up the fact that JP Morgan was taking delivery of all that gold and were going to be long while the gold market took off and went soaring to new heights. Well guess what - they are not long anymore - at least not at the Comex. They were actually delivering some of that gold they acquired during the December gold delivery period into the February gold contract delivery period. They made a handsome profit in the process I might add.

      they made money on that gold - now they are shorting it.

      Morgan could be short against a host of commodities because they believe the current rally is a short-term phenomenon or because they are hedging against forward contracts they might have entered into or for a host of reasons that we are not privy to. My article that you referred to was written during the bullish phase of gold and when the US Dollar was collapsing. that is why I found the behavior of the gold shorts at that time incomprehensible.

      I would not worry too much about what they are doing right now and just keep an eye on the US Dollar index and the charts.

      It is apparently open season on commodity bears of all stripes right now. Not sure when the season is going to come to an end.

      And by the way - Butler is one of these guys who sees a JP Morgan behind every bush in the commodity markets to the point of obsession.

      Just follow the money flows and forget about MOrgan for now.

      And yes, to echo Abraxas, who no doubt is wise beyond his years - There can only be one King under the Mountain and his name is not Thorin Oakenshield by Norcini Oakenshield.

    3. So you are a Dwarf in your heart :)
      Well, what else? Only Dwarves love gold, after all...
      Hail to the King of the Mountain!
      (I think with that one, we can begin a stronger cult than KWNs)


      I'll change my character's profile and avatar right away...

    4. Sorry, this link is better....
      So here we are, the forgotten tribe exiled from its land of KWN's saturdays metal wrap...following an old king and an old religion called trading and technical analysis...but still decided to get back our gold in the end :)

    5. Hubert;

      Thanks for a great laugh... you really have a great sense of humor my friend plus you are just witty!


    6. hope I'm not polluting the line, but I like to become a bit crazy from time to time...and this song is really so adequate for following Dan's site that it makes me laugh a lot :)
      So here is the ultimate link for Dan's tribe, to be sent ruthlessly to all gold bug's mail addresses you may know.
      War is upon you, whether you want it or not.


      Start trading after this mantra music every single day :)
      OK...better go to bed I think, before my case becomes worse...


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