Over the weekend, a ceremony was held to dedicate a memorial to the citizen heroes of United Airlines Flight 93, who gave their lives to prevent that plane from being used as a weapon in the massive attack against our nation this day exactly ten years ago. Their selfless efforts are now memorialized in a field in Shanksville, Pa, where the downed airliner crashed into the ground killing all aboard. Who knows how many other of their fellow citizens were saved by their courageous actions of that day.
Both former Presidents George W. Bush and Bill Clinton gave deeply moving speeches at that commemoration, which I am linking to here for those who might want to take a bit of time out of their schedules to remember their sacrifice and to also reflect on where you were that day and the emotions you were experiencing as you watched the reports coming out of New York City, Washington DC and of course, Shanksville, Pa.
http://townhall.com/tipsheet/danieldoherty/2011/09/10/presidents_bush_and_clinton_give_eloquent,_moving_speeches_at_flight_93_memorial_dedication_in_pennsylvania
Sunday, September 11, 2011
Saturday, September 10, 2011
Trader Dan on King World News Weekly Metals Wrap
Please click here to tune in to my regular weekly interview with Eric King on the King World News Weekly Metals Wrap.
Friday, September 9, 2011
Swissie Gold and Euro Gold setting all time highs
US based analysts continue to approach the gold market with blinders on as they focus exclusively on the US Dollar price of Gold and draw all their views of the market from that perspective. An apt comparison would be looking at the Dollar price of RICE and extrapolating future price action for the global price of this international food without even considering its price in Japan or Malaysia for example. This is shortsighted at least and foolish at worst as it betrays a flawed understanding of the role of gold in the international arena and its function as the currency of last resort.
With the vast majority of Central Banks around the world embarking on policies and practices designed to deliberately debase their respective currencies, those investors around the globe seeking to protect their wealth from such depradations are buying gold. That is why it continues to make one new high after another across a variety of global currencies.
Consider the price of Gold in Swiss Francs or "Swissie Gold". Ever since the SNB decided to debauch their currency and kill its historic safe haven status, gold has been soaring in terms of the Franc. Do you think that those Swiss who are financially savvy were going to sit idly by while their Central Bank plundered and looted their wealth?
Think citizens in Britain have any more confidence in their leaders than the rest of the Euro Zone? Guess again!
Judging from the price action of the US equity markets this morning, the investing community has as much confidence in the Obama Administration's efforts to create jobs and turn the economy around as the passengers and crew of the Titanic had in their captain to save them from their collision with that enormous iceburg. This is the reason that while the Central Bank attack on gold continues, they have not been successful in derailing it. No one trusts the hapless clods to fix anything.
Do you get the distinct impression that there seems to be a rising lack of confidence across most of the globe in their respective governments? Personally I shudder to think where the S&P 500 would be without the surreptitious buying of the Exchange Stabilization Fund.
Considering the debacle unfolding in the equity markets today, the HUI or mining shares index, is once again holding remarkably firm as this sector contines to outperform the rest of the broad market.
Not surprisingly, the US Dollar has become the safe haven currency for the time being not based on any merits of its own, but only because the alternatives are even worse. It is attempting an upside breakout above a key chart level in today's session would which confirm a bottom is in for the intermediate term as it flirts with the 25% Fibonacci retracement level from the decline that began last May. It still looks like a rally in an ongoing bear market however. It could push as high as 79 - 80 on this leg if it sees some follow through gains next week but I frankly would dismiss any long term sustained strength unless it could convincingly clear the 81 level.
With the vast majority of Central Banks around the world embarking on policies and practices designed to deliberately debase their respective currencies, those investors around the globe seeking to protect their wealth from such depradations are buying gold. That is why it continues to make one new high after another across a variety of global currencies.
Consider the price of Gold in Swiss Francs or "Swissie Gold". Ever since the SNB decided to debauch their currency and kill its historic safe haven status, gold has been soaring in terms of the Franc. Do you think that those Swiss who are financially savvy were going to sit idly by while their Central Bank plundered and looted their wealth?
Or consider the chart of Euro Gold, Gold priced in terms of the Euro. It too is making one new all time high after another. It is responding to the circus in Europe as the monetary authorities and political leaders there provide living testimony why one should not "put their trust in princes". The resignation of the ECB's Stark is yet another straw on that camel's back.
Think citizens in Britain have any more confidence in their leaders than the rest of the Euro Zone? Guess again!
Judging from the price action of the US equity markets this morning, the investing community has as much confidence in the Obama Administration's efforts to create jobs and turn the economy around as the passengers and crew of the Titanic had in their captain to save them from their collision with that enormous iceburg. This is the reason that while the Central Bank attack on gold continues, they have not been successful in derailing it. No one trusts the hapless clods to fix anything.
Do you get the distinct impression that there seems to be a rising lack of confidence across most of the globe in their respective governments? Personally I shudder to think where the S&P 500 would be without the surreptitious buying of the Exchange Stabilization Fund.
Considering the debacle unfolding in the equity markets today, the HUI or mining shares index, is once again holding remarkably firm as this sector contines to outperform the rest of the broad market.
Not surprisingly, the US Dollar has become the safe haven currency for the time being not based on any merits of its own, but only because the alternatives are even worse. It is attempting an upside breakout above a key chart level in today's session would which confirm a bottom is in for the intermediate term as it flirts with the 25% Fibonacci retracement level from the decline that began last May. It still looks like a rally in an ongoing bear market however. It could push as high as 79 - 80 on this leg if it sees some follow through gains next week but I frankly would dismiss any long term sustained strength unless it could convincingly clear the 81 level.
In the meantime this Dollar strength is engendering selling in the commodity complex by the hedgie algorithms once again. This is where some of the pressure in SILVER is coming from today. For the time being, the slowing global economic growth theme is currently outweighing the fears of currency debauchment when it comes to commodity pricing.
Thursday, September 8, 2011
HUI Demonstrating extremely Bullish Technical action
The gold mining stocks, as illustrated by the HUI index, are storming higher again today as it once again defies the lower trend in the broader stock markets. This pretty much confirms the fact that the miners have now separated themselves from the action of the stock market and are trading on their own fundamental merits. This is not to say that the broader equity markets will no longer have any impact on the mining sector whatsoever; it is merely to state that we no longer are going to see a nearly direct relationship between the performance of the mining shares and the performance of the rest of the stock market.
Note that the miners are now strongly outperforming the rest of the market. This is the reason we recommended to the hedge funds that they close out those ridiculous ratio spread trades that they had been employing with a long bullion position against a short position across most of the mining shares as a trade strategy. It was a trade that would only work for a while until the sheer lopsidedness of it depressed the shares to insanely cheap levels when valued against gold bullion.
I am sending a few charts in this post for consideration. The first is the HUI itself which is exhibiting classic technical price action from a bullish standpoint. Towards the end of August it finally managed to clear the very stubborn and formidable 580 level which had held it in check for some time. It then mustered that strength and pushed to its all time high near 610 before retreating somewhat. However it found willing buyers on the dip lower (most likely hedge funds who were prescient enough to realize that they had overstayed that damned ratio trade) and then rocketed right back up to that level at the end of the month. Once September trade commenced it GAPPED through overhead resistance forming a GAP and GO pattern ( some like to refer to this as a BREAKAWAY GAP), which is extremely bullish as it indicates strong, pent-up buying demand from both trapped shorts who are now panicking as well as fresh buying from eager, would-be longs.
Upon breaching the all time high at 610, price subsequently retreated and retested the GAP region from which the move higher commenced. It acted perfectly, uncovering buying as it moved lower and filled the gap as guys who missed the initial move higher but were anxious to get in on the long side, jumped in. Today, we see additional short covering as well as fresh buying taking the index to yet another all time high. I would have liked to see a bit more upside strength which would have formed a stronger candle signal on the chart instead of the potential spinning top but the index held very well all things considered. Tomorrow's close is setting up to give us the clue as to where we go next. A weekly close above 622 will be very bullish.
Looking at the ratio of the HUI to the Gold price, we can see that the shares have recovered some ground against the metal and are attempting to catch up to the gains in the bullion but they also have some additional work to do.
Note that the miners are now strongly outperforming the rest of the market. This is the reason we recommended to the hedge funds that they close out those ridiculous ratio spread trades that they had been employing with a long bullion position against a short position across most of the mining shares as a trade strategy. It was a trade that would only work for a while until the sheer lopsidedness of it depressed the shares to insanely cheap levels when valued against gold bullion.
I am sending a few charts in this post for consideration. The first is the HUI itself which is exhibiting classic technical price action from a bullish standpoint. Towards the end of August it finally managed to clear the very stubborn and formidable 580 level which had held it in check for some time. It then mustered that strength and pushed to its all time high near 610 before retreating somewhat. However it found willing buyers on the dip lower (most likely hedge funds who were prescient enough to realize that they had overstayed that damned ratio trade) and then rocketed right back up to that level at the end of the month. Once September trade commenced it GAPPED through overhead resistance forming a GAP and GO pattern ( some like to refer to this as a BREAKAWAY GAP), which is extremely bullish as it indicates strong, pent-up buying demand from both trapped shorts who are now panicking as well as fresh buying from eager, would-be longs.
Upon breaching the all time high at 610, price subsequently retreated and retested the GAP region from which the move higher commenced. It acted perfectly, uncovering buying as it moved lower and filled the gap as guys who missed the initial move higher but were anxious to get in on the long side, jumped in. Today, we see additional short covering as well as fresh buying taking the index to yet another all time high. I would have liked to see a bit more upside strength which would have formed a stronger candle signal on the chart instead of the potential spinning top but the index held very well all things considered. Tomorrow's close is setting up to give us the clue as to where we go next. A weekly close above 622 will be very bullish.
Wednesday, September 7, 2011
Gold holding firm in terms of the Swiss Franc
Note the chart of gold priced in terms of the Swiss Franc. While it is sharply lower today as the Central Banks of the West declare war on the metal, it has only retraced about half of its strong gains made against the Swiss Franc after the Swiss National Bank effectively devalued their domestic currency on Tuesday of this week. While the SNB set about to debauch their currency, those Swiss wise enough to have accumulated gold have fared quite well as their wealth has been protected.
This is what gold does historically - it serves as a haven against the depradations of Central Bankers, monetary officials and inept political leaders who look only at the short term and do not focus on the longer term. This group of leaders seem intent on plundering the wealth of the citizens of their nations.
Carerfully compare the two charts and you will see that gold's strong, sustained rise against the Swiss Franc began exactly on the same day that the SNB first announced efforts to derail the strength in the Franc. It moved steadily higher, retraced some gains and then exploded into new highs Tuesday of this week when they effectively devalued their currency and destroyed its safe haven status in the process.
This is what gold does historically - it serves as a haven against the depradations of Central Bankers, monetary officials and inept political leaders who look only at the short term and do not focus on the longer term. This group of leaders seem intent on plundering the wealth of the citizens of their nations.
Carerfully compare the two charts and you will see that gold's strong, sustained rise against the Swiss Franc began exactly on the same day that the SNB first announced efforts to derail the strength in the Franc. It moved steadily higher, retraced some gains and then exploded into new highs Tuesday of this week when they effectively devalued their currency and destroyed its safe haven status in the process.
Tuesday, September 6, 2011
CENTRAL BANKS WAGING WAR ON GOLD AT THIS HOUR
If it is not obvious by now, it should be -an attempt by the Central Banks of the West to derail the rise in the gold price is currently underway.
I mentioned in my midday comments that an effort would take place to prevent gold from moving beyond $1900 in an attempt to paint a double top on the daily price chart and induce a round of technically related selling from speculators on the long side.
This effort can clearly be seen in the following ONE MINUTE BAR CHART which reveals an enormous spike of 4,000+ contracts in the middle of the evening during a time period in the gold trading not normally known for this sort of volume. The question must now be raised - if this was a hedge fund blowing out of a long gold position, why wait for such a low liquidity environment in which to execute to trade knowing full well that by so doing, one would be guaranteed the worst possible exit price for the trade. Also, since the price of gold has been RISING and NOT FALLING, why would any gold long be forced to unload a position. It certainly is not under any duress from price action.
We can probably eliminate this as the cause therefore since only the rankest of fools would attempt such a thing.
The next question that must then be raised is if this were a hedge fund doing the selling to establish a fresh short position, why would they sell in such size at such an hour guaranteeing themselves to be filled with a fresh short position at the worst possible price by selling into a hole? The logical answer is that they would not do such a thing.
By the process of elimination and due to the fact that a major attempt by a Western Central Bank (the Swiss National Bank) to deliberately debase their currency occurred less than 24 hours previous to this selling barrage, added to the fact that an obvious raid took place on gold knocking it down below $1900 during the time frame in which the Swiss Franc devaluation was announced, this huge sell order must be therefore traced back to the Western Central Banks which are now going after the gold price in an attempt to cloak their utterly incompetent, impotent and predictable response to the current economic woes of the West.
To assume that the ECB, the Federal Reserve, the Bank of England, the BAnk of Canada, and any other major Central Bank of the West did not have previous knowledge of the plans by the Swiss National Bank to debase the Franc is to live in a fantasy land and be devoid of all sound wisdom. Of course they knew beforehand as something of this importance would not be done unilaterally by the Swiss.
The attack on Gold is therefore an effort by these modern day alchemists who are attempting to achieve prosperity by magically altering slips of paper into something that might constitute value in the eyes of the beholder to discredit the yellow metal and send it carreening lower.
China must be watching this with both disgust and delight. Disgust in seeing the depths of corruption that ails the Western monetary system and delight in the fact that the machinations of these conjurers is providing a discount in the price of the metal which they will be more than pleased to accept.
Take a look at the following chart and tell me with a straight face that this is NORMAL trading action. Any trader worth his salt knows this chart looks amazingly like a chart of a currency facing INTERVENTION PRESSURE from a Central Bank
I mentioned in my midday comments that an effort would take place to prevent gold from moving beyond $1900 in an attempt to paint a double top on the daily price chart and induce a round of technically related selling from speculators on the long side.
This effort can clearly be seen in the following ONE MINUTE BAR CHART which reveals an enormous spike of 4,000+ contracts in the middle of the evening during a time period in the gold trading not normally known for this sort of volume. The question must now be raised - if this was a hedge fund blowing out of a long gold position, why wait for such a low liquidity environment in which to execute to trade knowing full well that by so doing, one would be guaranteed the worst possible exit price for the trade. Also, since the price of gold has been RISING and NOT FALLING, why would any gold long be forced to unload a position. It certainly is not under any duress from price action.
We can probably eliminate this as the cause therefore since only the rankest of fools would attempt such a thing.
The next question that must then be raised is if this were a hedge fund doing the selling to establish a fresh short position, why would they sell in such size at such an hour guaranteeing themselves to be filled with a fresh short position at the worst possible price by selling into a hole? The logical answer is that they would not do such a thing.
By the process of elimination and due to the fact that a major attempt by a Western Central Bank (the Swiss National Bank) to deliberately debase their currency occurred less than 24 hours previous to this selling barrage, added to the fact that an obvious raid took place on gold knocking it down below $1900 during the time frame in which the Swiss Franc devaluation was announced, this huge sell order must be therefore traced back to the Western Central Banks which are now going after the gold price in an attempt to cloak their utterly incompetent, impotent and predictable response to the current economic woes of the West.
To assume that the ECB, the Federal Reserve, the Bank of England, the BAnk of Canada, and any other major Central Bank of the West did not have previous knowledge of the plans by the Swiss National Bank to debase the Franc is to live in a fantasy land and be devoid of all sound wisdom. Of course they knew beforehand as something of this importance would not be done unilaterally by the Swiss.
The attack on Gold is therefore an effort by these modern day alchemists who are attempting to achieve prosperity by magically altering slips of paper into something that might constitute value in the eyes of the beholder to discredit the yellow metal and send it carreening lower.
China must be watching this with both disgust and delight. Disgust in seeing the depths of corruption that ails the Western monetary system and delight in the fact that the machinations of these conjurers is providing a discount in the price of the metal which they will be more than pleased to accept.
Take a look at the following chart and tell me with a straight face that this is NORMAL trading action. Any trader worth his salt knows this chart looks amazingly like a chart of a currency facing INTERVENTION PRESSURE from a Central Bank
Daily Comments
Another day of volatility furthered this time around by the meddling of the Swiss National Bank. Have you noticed by now that the only thing Central Banks these days seem to be providing is more confusion, uncertainty, and volatility?
I am of course referring to the SNB's attempt to fix its currency against the Euro and derail its strength. I remember a time (it now seems long, long ago) during which a nation longed for a strong national currency as a vote of confidence by the global investing community. It attracted capital that could be used for economic expansion and growing a manufacturing base, kept the cost of imported goods low and provided a stable price environment. Not any more - now it is a case of each nation outbidding the other in their attempts to cut the props out from beneath their own currency.
This attempt,which will inevitably prove to be a failure (see Japan's futile efforts as EXHIBIT ONE), introduced a dose of confusion that allowed the bullion banks to regroup, after they have been sent reeling as Asian trade took gold to an all time high overnight. Their fierce selling took the metal lower on the day, although it is moving higher in the aftermarket hours.
Keep in mind the comments I made the other day on the KWN WEEKLY METALS WRAP in which I remarked that the enemies of gold would throw everything, including the kitchen sink, at the gold market in an attempt to keep it below $1900 and attempt to paint a double top on the technical price charts. If they fail here, gold goes to $2000 before you can blink. The battle has been joined with the East bidding up the market and the West attempting to take it down. Batten down the hatches because the sea is not going to get any calmer here on out.
Also, watch for the ESF to try continuing propping the sagging equity markets. We are quickly reaching a point where the realization that the economy is spiraling downwards is dawning on more and more of the investing public, with the current crop of political leaders offering nothing but more of the same failed policies as a cure. Not only that, but the monetary authorities have nothing left to do except print more money as they are effectively zero bound. Translation - when all else fails, resort to market chicanery.
Back to gold however - after setting a new all time high overnight, it then retreated moving lower throughout the rest of the session before settling down on the day. Some decent buying surfaced near the $1860 level as bulls attempted to take the metal back above $1880 but the effort looks a bit half-hearted right now. They will have to quickly recapture $1900 to put the pressure back on the bullion banks.
Gold bears will try to shake out some more longs and see if they can get enough sell stops targetted to drop the price back towards $1840.
The HUI added to its gains from last week further confirming the strong upside technical breakout, although it was pulled off its best levels of the session by the selling that hit the metals themselves. A second consecutive weekly close above 610 will be very bullish.
I will be most interested in observing the subsequent price action if the HUI comes back and retests the GAP area shown on the daily price chart. If the uptrend is going to continue and the shares are going to rapidly move higher, the shares comprising the index should find willing buyers that cause the price to bounce off that level and recover higher.
I am of course referring to the SNB's attempt to fix its currency against the Euro and derail its strength. I remember a time (it now seems long, long ago) during which a nation longed for a strong national currency as a vote of confidence by the global investing community. It attracted capital that could be used for economic expansion and growing a manufacturing base, kept the cost of imported goods low and provided a stable price environment. Not any more - now it is a case of each nation outbidding the other in their attempts to cut the props out from beneath their own currency.
This attempt,which will inevitably prove to be a failure (see Japan's futile efforts as EXHIBIT ONE), introduced a dose of confusion that allowed the bullion banks to regroup, after they have been sent reeling as Asian trade took gold to an all time high overnight. Their fierce selling took the metal lower on the day, although it is moving higher in the aftermarket hours.
Keep in mind the comments I made the other day on the KWN WEEKLY METALS WRAP in which I remarked that the enemies of gold would throw everything, including the kitchen sink, at the gold market in an attempt to keep it below $1900 and attempt to paint a double top on the technical price charts. If they fail here, gold goes to $2000 before you can blink. The battle has been joined with the East bidding up the market and the West attempting to take it down. Batten down the hatches because the sea is not going to get any calmer here on out.
Also, watch for the ESF to try continuing propping the sagging equity markets. We are quickly reaching a point where the realization that the economy is spiraling downwards is dawning on more and more of the investing public, with the current crop of political leaders offering nothing but more of the same failed policies as a cure. Not only that, but the monetary authorities have nothing left to do except print more money as they are effectively zero bound. Translation - when all else fails, resort to market chicanery.
Back to gold however - after setting a new all time high overnight, it then retreated moving lower throughout the rest of the session before settling down on the day. Some decent buying surfaced near the $1860 level as bulls attempted to take the metal back above $1880 but the effort looks a bit half-hearted right now. They will have to quickly recapture $1900 to put the pressure back on the bullion banks.
Gold bears will try to shake out some more longs and see if they can get enough sell stops targetted to drop the price back towards $1840.
Silver acted as a heartbreaker once again in today's session as it once again could not muster enough upward energy to break free of the shackles being imposed upon it just shy of $44. Note that today it failed at the 61.8% Fibonacci retracement level. Its short term uptrend remains intact however so as long as bulls hold it above $40, odds favor an eventual breach of resistance at $44. Currently it is bouncing back and forth between the 61.8% retracement level and the 50%.
I will be most interested in observing the subsequent price action if the HUI comes back and retests the GAP area shown on the daily price chart. If the uptrend is going to continue and the shares are going to rapidly move higher, the shares comprising the index should find willing buyers that cause the price to bounce off that level and recover higher.
Saturday, September 3, 2011
Trader Dan on King World News Weekly Metals Wrap
Please click on the following link to listen in to my regular weekly radio interview with Eric King of King World News on the Weekly Metals Wrap.
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