Sunday, February 28, 2010


Same as Friday's. Play the gaps. But since many of you are wanting me to give you the direction (I can't of course) go's. I called my contact at GS and he gave me the Algo code for the trading day.

1) Trade up quickly to take a run at the 50dma.....choke and puke and start dumping like a wino eating a bucket of 3 day old KFC. Hit 1092...stagger out of the bar for a couple of days then on Thursday nite drink 2 liters of swill and crap your brains out Friday after the Jobs number and collapse on 1040 Market Street.

2) here is the tricky part....Walayat says that March 6 market takes a beating for awhile then recovers so all I can tell you is that 1) may start on Friday. But I don't see a lot of upside this week for the market. DO NOT get heavy long this market right here could get clobbered.

3) Be aware gold may have seen its bottom but it and the miners CANretest the lows set last month so you must be wary of getting too far on the long side of the miners boat here. I still advocate holding a position in the miners and staying long term in it. As Immred said you can overtrade if you let GS prod you. AUY EGO ANV SLW GG SSRI JAG GFI ...

4)As I stated in December this will be a traders year so you must be nimble but don't outsmart yourself ....If we get a pullback the next two weeks to 1040 I will increase my miners core slightly....Hold 50% cash in case things get Jiggly. and always pay attention to the 20DMA and 50DMA. gl gang

No reason for me to comment on this link speaks for itself..bravo Jesse

Saturday, February 27, 2010


A new and exciting board game to buy for X-mas....As mentinoned previously the battles are playing out behind the scenes for control of the fiat monetary power between sovereigns and who will have the reserve currency control....this article gives you only ONE element.

The € troubles begin

As worries about the parts of the Eurozone grow, the € is losing its reliability as a constant measure of value. When the Eurozone was conceived no room was made for a loss of sovereignty. The Union was united for trade and finance alone. Yes, there is a European Parliament, but national government and national interests will always be preferred to Eurozone interests. The problems facing Greece and in the future Spain, France, et al will mature to bring down the € in time. After all it was the benefits to each nation on the financial front that brought them all together. Becoming like the States, under one government, was not considered. With a rich, productive, efficient North and a poor Tourist-oriented South in the Eurozone, it was only a matter of time before the pressures were felt under one currency. In the past strong currencies revalued and discouraged the flow of capital from poor to rich nations. As the capital left these nations and their internal inefficiencies rose to the surface poor nations began to over-borrow despite the fact that nothing would change in the future. A crisis was in the making. It’s now here and there is a perceptible unwillingness to support each other in all seasons, but only in fair weather, it seems. Trouble is that the pressure will grow under one currency, not diminish.

Thursday, February 25, 2010


I will post confirmation as it arrives......hehee.....but Ricks picks says it might opinion is gold has further down...lower lows lower highs...and watch the 5/15 next 3 days for bearish cross.

According to the Hidden Pivot method, this is exactly what should occur when a corrective cycle ends. This correction began on December 3 from within four ticks of a $1227.50 target that we had projected several weeks ahead of the turn. In normal fashion, the correction until yesterday had traced out ABCD patterns that either reached or exceeded their D targets. However, this most recent ABCD downtrend failed to reach ‘D’, reversing exactly halfway to the target. And that is precisely what we expect a correction to do when the dominant trend is about to resume.

We should like to see this pattern repeated fractally in minor time-frames for the next couple of days before we sound the all-clear. However, based on the evidence at hand, we are recommending cautious buying at these levels, using the “camouflage” entry strategies that are at the heart of the Hidden Pivot method.

Something I am watching closely and Joe has talked about....


Sorry Captain .....Market looks to be forming another leg down in the premarket. If we get a big red candle then this baby has some more downside. Of course we are technically speaking and as some of you T/A boys n girls know GS can do magic to conceal their intentions and derive the most out of the actual market goal. A simple rule that I try to use is to do the opposite of what the sentiment is on the SKF board. I think GS uses the board as a core sentiment indicator (joking...kinda).

Jobless claims weekly up 22K...watta joke. Unless you are one of those families without a job. Think about it ...a lot of those souls just played by the rules...anyway gotta pay attention to the game.

Oil tanking on the dollar squeeze. Technically oil was set up for a turn BUT no courage yesterday to add to my DTO. Its just too dangerous here. I will play the small shares I have. If they strap a red candle close on it then I will gap trade it tiny.

ALU is a longer term 6-18 month hold for those that are not traders. Buy some now and double down at 2.

Miners again...should take a beating at least you can hope.....make sure you remain vigilant. Watch for signs of gold bottom. Joe believes you may see dollar up days and gold price not participating on the downside as a sign gold has found its bottom miners same.

UPDATE: This is the link about China buying Gold from IMF, thanks joe:

Wednesday, February 24, 2010

Is March a Good Time For Energy

March tends to be one of the best months of the year for both crude oil and natural gas. The the charts in the link which cover roughly the past 20 years show the price of oil at the end of March is on average nearly 4 percent higher than the closing price in February. For natural gas, the increase is even more eye-catching – gas on average climbs more than 7 percent in March. The main reason for the oil price rise in March relates to the demand pull created by refiners ramping up in advance of the summer driving season. Crude price increases fall off through the early summer before picking up again in the late summer. From September to October, there is typically a big price drop that continues through year-end. For the refiners, March marks the end of a five-month stretch in which monthly crack spreads (value of refined products minus the price of the crude oil feedstock) tends to increase. If next month follows the pattern, spreads would be 4 percent wider than February. So far in 2010, however, the results have lagged the longer term trend – January saw spreads narrow by about 3.5 percent and for February to date, spreads are up about 2 percent. For natural gas, which is always extremely volatile, March is a strong month in large part due to late winter snowstorms that move across the country. When you couple that weather variable with the fact that inventory levels for natural gas have usually been drawn down substantially during the winter heating season, the result can be some dramatic spikes for gas. A cold January lifted spot natural gas prices about 6 percent higher than the December forecast, and in early February gas for April delivery was on average trading 16 percent higher than the same period in 2009. For energy equities, the typical rally period is February through May. So far, 2010 is not straying too far from that long-term trend: from a peak of 1,122 in early January, the Amex Oil Index (XOI) fell 12 percent by February 9 before heading back up 5 percent over the next six trading sessions. Of course, seasonality is not a perfect barometer because each year brings its own distinct market conditions. In 2010, the extent of global economic recovery will be a factor, as will economic growth rates in the large emerging nations. In the U.S., petroleum consumption fell by 820,000 barrels per day (4 percent) last year. Federal officials predict daily oil demand will increase about 1 percent this year, while natural gas demand is expected to increase nearly a half-percent. Gasoline prices may top $3 per gallon this spring, according to the federal outlook. In its latest monthly report, the International Energy Agency raised its forecast for global oil demand growth to about 1.6 million barrels per day this year, with all of that incremental demand coming from the emerging markets. China accounts for a quarter of the new global demand for oil. That incremental growth could be revised upward again if it looks like global GDP growth – led by the large emerging economies – will be stronger than the anticipated 4 percent. And if the supply response to additional demand is weak, higher oil prices could result.

Tuesday, February 23, 2010


The consumer confidence numbers today albeit brushed and polished were still ugly. We are on life support and will remain there until the plug is pulled. We are hemorrhaging from a thousand cuts and a couple sword slashes and a battle axe to the head. More simply put the wounds are mortal but thanks to our trauma surgeon....the Fed...we are still breathing.

The real question for investors and those of you with longer term retirement accounts is how long will the market convey a pulse and blood pressure. In other words can I get the my organs out of this patient before he dies. My metaphors are so mixed that my message is lost but WTF. We still have time before this market really tanks for good....thats all.

Today signals what I think is another leg down. Vix is spiking and all the indices I looked at last nite were showing very bearish signs of turning. Negative divergences on several critical indicators with pathetic volume on this last rebound all point to another leg down that confirms Walayat's article yesterday....look for 1040 next week. Then we will review. Right now holding my miner core and some shorts....but half OIL did not break 80 and confirm...DTO

Nice read on silver today...

Monday, February 22, 2010

Walayat's New Article

The U.S. Fed raised the discount rate for overnight funding from 0.5% to 0.75% last Thursday evening which sent the financial blogosphere into a frenzy of anticipation of a sharp drop in stock prices the following day.... The Dow closed UP 9 points.
The current stock market rally has retraced 600 points or 67% of the decline that followed the January 19th peak of 10,729 to stand within touching distance of the bull market high. The velocity of the current uptrend in terms of price and time is precisely on par with the velocity of the downtrend off of the January high, which was one of the most anticipated and one could say delayed downtrends since the birth of the stocks stealth bull market. Everyone including bulls, bears and those yet to make their minds up clearly could understand one thing if nothing else that the run up in stocks to above 10,500 had lifted stocks into the most overbought state thus far which required a significant reaction lower.

For bulls the expectations were for a significant correction that at least targeted a retracement to 10k.

For bears the realisation was that this had to be it! It must be now (although never), that the bear market had now resumed its third leg lower.

The actual price action in terms of the forecast for 2010 as evidenced by 3 impulse swings so far of 2 down and 1 up, is inline with that for a volatile trading range for the first half of the year. Which does confirm my view as per the forecast for 2010 that the first half of 2010 is going to see a stock market behaviour greatly differing from that which we have seen during the past 10 months i.e. one exhibited by much greater price volatility within a very wide trading range, which is good for traders and a good for those seeking to accumulate off of the lows.

Another important point to consider is that the anniversary of the birth of the stocks stealth bull market is on 6th March 2010, this again suggests to me that despite stocks being so close to their bull market peak, stocks may in actual fact make an important LOW on this date.

Pulling all the strings together, the implications of the analysis are that :

1. Market volatility is very high - That the character of the market has changed and traders / investors need to realise this, which one could say implies less predictability during the first half of 2010 as impulse swings are much shorter in time and more frequent.

2. That the downtrend targets a LOW on or near the anniversary date of the bear market low of 6th March 2010.

3. That the target for the correction is for a move to between 9,500 and 9,800. The low of 9,835 implies price wise it could have occurred, but time wise it has not i.e. requires more downside time to dissipate the overbought state.

4. That despite the very strong rally to 10,412 from 9835 we have unfinished business on the downside.

5. Downside technical targets are between 10,050 and 9,800.

6. Upside Resistance is at 10,700.

Sunday, February 21, 2010

Banking Troubles

If you all recall, I mentioned while back not to have much money in banks, read the following:

The image of banks locking their doors to keep customers from making withdrawals during a bank run is what immediately came to mind when we heard that Citigroup was telling customers it has the right to prevent any withdrawals from checking accounts for seven days.

“Effective April 1, 2010, we reserve the right to require (7) days advance notice before permitting a withdrawal from all checking accounts. While we do not currently exercise this right and have not exercised it in the past, we are required by law to notify you of this change,” Citigroup said on statements received by customers all over the country.

What’s going on? It seems that this is something of an error. The seven day notice policy only applies to customers in Texas, Ira Stoll reports at The Future of Capitalism. It was accidentally included on customer statements nationwide.

“Whatever the explanation, it doesn’t exactly inspire confidence in Citi,” Stoll writes. “But it’s hard to believe a bank would be sending out a notice like that on its statements.”

Saturday, February 20, 2010


Pulled off of SKF.......nice read.

The Fed's Grand Scheme 20-Feb-10 05:05 pm Don't overlook the possibility of another Fed surprise if they feel this coming week's UST auction might not draw good participation. Given the choice between high equity prices and the ability to service the Federal debt,the Fed will always choose the latter.

They made that choice in 2008,withdrawing liquidity 2 days before the markets tanked. The stock market provides a incredible funding source as a flight to quality for a extended period could easily be the reservoir of buying power they desperately need. Especially if Japan and China have scaled back purchasing our debt.

The past year the Fed balance sheet has skyrocketed with toxic assets and QE purchases of UST debt. This cannot continue for very long as after 2 years the reflation efforts have failed. The Fed is rumored to be instituting a plan of controlled deflation(similar to Japan). Thursday they took the first step to start that process.

This plan of controlled deflation is a little like, being partially pregnant, no such thing. The upside debt pyramid is too large and the current housing deflation cannot overcome the structural problems because of the bubble bursting. This will be the yoke around the banking system for the forseeable future. In May there will be a flood of short sales and foreclosures as the so called "gov't mortgage reset plan" kicks in for those holders that can't meet requirements.

As for the USD it will be on a long term upward path because of the deflationary enviroment. But also look for the Dollar to rise quickly as Bernanke's plan instituted in March 2009 to short volatility,create a huge pool of liquidity in a zero interest rate enviroment for the banks and the economy to reliquify quickly. This has been Fed policy or the M/O ever since the orthodox top in the stock market in 2000.

Keep interest rates at zero for a extended period,creating various bubbles in asset classes to reflate the debt pyramid, This policy first put in place by Allan Greenspan after the 1987 stock market crash,a minor bubble on the way to the bust, and then the next degree the "housing bubble". Now the plan is a busted experiment,failing to increase consumer confidence,expand balance sheets and another positive business cycle. All it has acomplished is the "grand daddy of all bubbles" the UST bond bubble and it will have disastrous unintended consequences.

The first is a bubble in equity prices, as the wall street investment banks put their cheap money to work in a far too familar frenzy of ponzi buying (the greater fool theory) causing a parabolic rise in a short period of time in the market leaders.

Also these zero rates have created a USD carry trade worlwide and as this equity bubble defllates rapidly will create a self feeding "China syndrome" as this incredible leverage comes crashing down, causing a USD bull market. This of course will have very negative effects on profits of the multi-national corporations. Thus another reason to sell stocks. A vicious cycle indeed.

So we will see how all this plays out shortly. I expect as the stock market comes down oil and Gold will also join equities in the price drop. But Gold will not drop as much as and will enter another bull market as the stock market bottoms sometime in 2013-2014


Great week of trading the market. I am not sure I made a dime....but the machinations are the best theater going.....pure history made everyday and most of the public is completely unaware.

Those of you reading this will receive my usual doom and gloom advisory. Stock up on essentials or I will have to charge you a usury fee for my alpo stores. I also would like you to be aware that indeed there exists a warning to hold emergency cash and bullion. If you believe your bank is safe then by all means leave it all there. My sources and research say you are wrong....but then you have been warned... thats all I can do.

The market is doing what it was predicted to do. Next week will probably be a downer maybe even to 1050......but that is only my guess. Overall you have to have a core of miners if you are going to maintain a portfolio. 50 to 60% cash is a must right here. Maybe some DTO and SH...but small...I am looking for oil to touch 85. The noise on Iran is all contrived. So disheartening to see it so controlled and manipulated. All major media is lost...and has been for years.

Immred's posts are correct. His portrait of coming attractions are startling but not in jest. My recommended reading is in Goldseek. I will NOT link it. You must do your own footwork. Have fun gl and I still think they tank the miners. Joe is licking his chops. I am but a fly on an elephants ass...

Friday, February 19, 2010


Never underestimate the "power". They have complete control of the market. Avarice cannot contol its ultimate destiny but it sure can control the path and timing. This is a system that will not be destroyed. Only a higher power can do that. So as an investor do not misunderstand the system you are investing in. Its complexities cannot be overestimated nor its abilities to influence the market.

But the real economy and social mood is another matter and that is what has to be ultimately dealt with. This is the reason that grand supercycles occur. To clean out the excess. A very sage advisor has recently informed me that his concern is that this high colonic may be unprecedented. That the Great Depression a 60 year cycle event may be trumped in terms of its actual economic impact by this calamity. After all this is a 120 year grand supercycle.

I am merely a knat on an elephants ass and peruse the wealth of intel circulating in cyber space and on my own little area of this earth. But I will take note of some personal happenings. Most of the people that I am familiar with that were multi-millionaires are broke. Completely and utterly bankrupt. Some still live in mansions. But that is only an illusion. Just as their conspicuous consumption lifestyle was an illusion.

In the past there seemed to be a hope.....sometimes small...but a hope that things would reverse if you could hang on. Not this time. The system cannot save these people. They are through. Is this bad? Absolutely not. They lived beyond the limits of credulity. It was all a benefit of the ponzi. Now the piper will be paid.

Unfortunately a lot of people that lived very spartan and tried to play by the rules are going to be flattened. Those people deserved better and God if he exists is their only hope for redemption. And I mean that.

Notice the ponzi today . I repeat NEVER NEVER get caught in the noise. This is a traders market this year. NO crash in my opinion this year. It will just be danger then reversals.......over and over . This process is buying time in hopes this economy can find a soft landing. Or at least a landing better than I believe we get.

Take a position in the miners. Right now watch 1120 for profit taking in the short term. AUY EGO ANV SSRI SLW have fun. And have at least 50% cash

Thursday, February 18, 2010


Impressive article that gives the reader a nice point of view and provides a similar view of the road ahead. If you don't view yourself as a macro economics person then take the time to begin your education. This article is an extensive analysis of the current state of affairs and how they affect us as investors, traders, and human-beings.....

No Macro Economic Report is provided this month in the Hat Trick Letter for paid subscribers, since the entire global financial system is stuck in crisis mode. Details for the crisis situation can be found in the Crisis Coverage Report in the February Hat Trick Letter. The system is not so much hurtling over a cliff, like my previous metaphor of a locomotive train long past crossing the cliff's edge. The system is more like busy creating numerous huge airpockets of insolvency, so many that eventually the entire nation suffers an historically unprecedented descent into a MASSIVE SINKHOLE of its own making. It will then find itself squarely in the Third World. The main questions are A) whether the foreign creditors pull the rug out, or B) whether the US Supreme Court renders a great decision regarding requisite disclosure of the US Federal Reserve to unmask its corrupt core, or C) whether the deteriorated state indeed permits the descent into a sinkhole constructed by Economic Mother Nature.


Heat rises from the debate of a USFed Exit Strategy from 0% interest rates to mask a broken banking system, and from massive money growth to enable monetized ustreasury bond purchases. Once more is seen the return of the 'Second Half Myth' as talk has begun of the USFed hiking interest rates in the second half of 2010. Far enough away to forget, close enough to be imminent, always forgiven when wrong, with new wrong revisions given. Chairman Bernanke is stuck in a policy corner. He must be aware. There is a great difference between being a bad economist and a stupid humanoid. A formal interest rate hike would torpedo the already weak vulnerable housing market, when mortgage rates have been creeping upward. A reduction in the USFed balance sheet would drain the system of funds, when lending is sparse, unresolved loan losses litter the balance sheets, and banks still hold massive toxic bonds and actual home inventory. The entire banking system depends heavily upon a cornucopeia of liquidity facilities, without which the system would have ground to a halt many months ago. Soon money market funds will augment the demand for USTreasurys for bubble maintenance, as redemptions become difficult to receive for trapped investors. Worse, a rate hike would pop the USTreasury Bond bubble the USFed has manufactured and add greatly to absurdly cheap borrowing costs on the USGovt debt. The good Chairman, Secretary of Inflation, would never agree that in September 2008 the US financial sector died. What he accomplished since then is vast pumping of blood through a dead corpse, with plenty of lateral drains directed to Wall Street firms. To expect an Exit Strategy to succeed is to demand a dead man to walk without the gigantic crutches and vast intravenous lines attached.

Wednesday, February 17, 2010


Far from selling gold as some misunderstood from his comments at the World Economic Forum, George Soros has been buying gold as ArabianMoney suspected. In a filing with the US Securities and Exchange Commission, Soros Fund Management owned 6.2 million shares of SPDR Gold Trust, the popular GLD exchange traded fund.

At the Davos World Economic Forum the famous hedge fund manager reckoned to have made a billion from the devaluation of sterling in late 1992 refused to say whether he was buying gold. But he did describe gold as the ‘ultimate asset bubble’ leaving some headlines concluding Mr. Soros a seller of the yellow metal.

Gold bug

Instead he emerges as a born-again gold bug with a hoard valued at $663 million at the end of 2009. Mr. Soros therefore joins John Paulson among the hedge fund managers to undergo a conversion to gold.

As ArabianMoney thought at the time Mr. Soros might well hold that gold was the ‘ultimate bubble’ but not necessarily consider it to be one just yet. He is therefore buying in advance of this bubble and putting his money where his logic takes him.

Under the principle of reflexivity that Mr. Soros has long propounded the actions of players in a market place are self-fulfilling to some extent and compound. That will certainly need to happen if gold is to truly become a bubble asset class.

Good timing

At present the gold trend line is a neat upward slope and shows none of the parabolic behaviour that would normally indicate a price spike. The one gorilla in the front room right now is an overdue stock market correction that would surely also take gold prices down as it did in late 2008 by 30 per cent.

To second-guess Mr. Soros again, and with a little more confidence having gotten his Davos statement right, then he ought to be a buyer on weakness. Building up a sizeable position in any commodity at reasonable prices is never easy, and two-thirds of a billion dollars is already no small holding.

Mr. Soros remains among the biggest market speculators in the world

Tuesday, February 16, 2010


Today Oil broke the $74 a barrel resistance. Oil recently mounted a strong short term rally and traded as high as 77 but pulled back just as fast. This inability to hold above 74 suggests that it is still in a consolidative/corrective phase; unless it trades above 74 on a weekly basis the odds favour a pull back to the 63-66 ranges.

The intermediate pattern is still bullish and suggests that by summer oil could be trading significantly higher. The first sign of much higher prices to come will be for oil to trade past 78 for 3 days in a row or close above 84 on a weekly basis. Thus going into the summer season we could be looking at higher prices and a depressed stock market.

As long as oil remains below 74, the trend will remain negative ( today went bullish). Recently, we have had weekly and daily sell signals in effect. The daily signal is moving closer to the buy zone and a new buy signal should lead to a rapid upward move in a relatively short period of time; if this occurs we will definitely issue a long trade in our VIP futures service. However, as of yet we have no buy, so do not jump into this market, unless you are opening up long term positions. A weekly buy signal would be a very good early indication that oil is getting ready to trade well past the 93-95 ranges and possibly past 100.00

Finally oil has been trading in a channel formation that ranges from 66 to 84 for almost 8 months; the longer the channel the more explosive the move. The only problem is that channel formations do not give clues as to which direction the move is going to occur. For that we need to use other tools and that’s where multi time frame analysis, daily and weekly signals, etc., come into play. Preliminary indications suggest that the next big move is going to occur towards the upside. A daily buy signal would give an early warning of this break out, while weekly buy would indicate that the breakout is gathering steam and that oil is getting ready to challenge the 90 plus ranges.

From a long term perspective any price below 65 is great play to open up new positions in oil related stocks. SGY, and PBR if you are long oil, and DTO if you are short. Be careful and understand FED's behavior since central bankers are the ones in charge of evrything including markets.


As our printing presses run at high speed without stop the fires are starting in many parts of the worldwide fiat kitchen. Notice the price of gold this morning ...up 28 dollars. An explosive move like that may signal that gold did indeed hold its bottom and is accelerating back to test new highs. Whether that can be stiffled by Central banks again is not really that important.....eventually their hubris will overwhelm them. With certainty our lack of discipline and outright government encouragement to destroy our personal and nations balance sheet will pay a heavy toll in our future. This excerpt states it simply...

No one really understands the U.S. balance sheet, of course, and because we own a printing press, the growing imbalances have yet to bite. Which is why the struggles of Greece are so enlightening. As part of the euro zone it doesn’t own the printing press that makes its currency. And now that it can’t borrow to fund its deficits, it has to decide — very publicly — how to live within its means.

As numerous analysts have concluded, that can only be achieved by cutting every citizen’s income by a painful amount. But the resulting drop in consumer spending will push the government budget even further into the red, requiring more cuts, which will lower spending even more, and so on. You see the problem: Without a printing press a bloated public sector can’t function.

The Greeks aren’t debating how many new soldiers to commit to their many foreign adventures or how to expand entitlements to cover everyone all the time. That’s because they’ve smelled the smoke and seen the flames. Now they’re standing in the front yard, garden-hoses in hand, trying to save some small part of what they’ve spent the past generation building.

If you can answer this question honestly then you have insight as to how the entire ponzi was enabled........

update II nice read on gold move today

Monday, February 15, 2010


Nothing like a fairytale to stir the cauldrons of the sheeple. Hard hitting journalism at its finest. This is all noise for the masses but thought if you wished to see how the masses are kept at bay in a ponzi.....then you could read this. Just be aware that when you read this that you understand that virtually all the eurozone is part of the ponzi. They may not be as completely unaware from a public level as our electorate is.....but their bankers and governments are all involved at multiple levels.......The tenatacles of the banking oligarchy is in all developed countries. One caveat....Asia. Not as controlled. enjoy.

Saturday, February 13, 2010

Will Silver Outperform Gold In 2010 By Clif Droke?

From a technical standpoint one of the things we can notice about silver’s price is that when the dominant long-term 30/60/90-week moving averages are in synch on the upside, corrections within the secular uptrend have always been reversed upon coming into contact with one or more of these three trend lines. For instance, there were three corrections for the silver price in 2005. The first two of these found support above the rising 60-week MA, the third one found support above the 90-week MA. The only time the key long-term moving averages are of no benefit as benchmark support levels is during times of serious market panic when support means little and even long-term supports are sliced through like a hot knife through butter. This was assuredly the case during the credit crisis panic of August-October 2008. Institutional fund managers look at these benchmark moving averages as important levels of potential support and use these as buying opportunities after significant corrections in the silver price. As long as internal market conditions are supportive of a market recovery, tests of the long-term trend lines are apt to elicit buying interest from the institutional and professional element, which is why it’s important to always keep an eye on these moving averages following a sharp decline in the silver price. An important intermediate-term cycle is currently in the process of bottoming and now is the time to look closely at silver. If silver confirms a bottom above the point where the 60-week and 90-week moving averages converge in the daily chart as shown above, we should have a good base from which a recovery can begin. The internal momentum indicators will confirm the shift of trend once the cycle has bottomed and will tell us what to expect in terms of upside potential in the next recovery phase. With the precious metals long-term bull market well underway, many independent traders and investors are looking for ways to capitalize on short-term and interim moves in the metals. Realizing that the long-term “buy and hold” approach isn’t always the best, many are seeking a more disciplined, technical approach for realizing gains in the market for metals and the PM mining shares. It’s for that reason that I wrote “Silver Trading Techniques” back in 2005. My goal in writing this book was to provide traders with some reliable trading indicators for anticipating and capturing meaningful moves in the price for silver and the silver mining shares. Included in this guide are rules for using the best moving averages when trading silver stocks, how to spot a turnaround in the silver stocks before it happens (best-kept secret!), how to tell when a silver stock has topped and which moving average crossovers work and which don't . Also explained are the best technical indicators for capturing profitable swings in silver and silver stocks and how to apply them. You won't find these techniques in a copy of Edward's & Magee's book on technical analysis or anywhere else. These reliable "tricks of the trade" are available to you in Silver Trading Techniques. Click here to order:

Thursday, February 11, 2010


I have tried to get a feel for the market direction for the past couple of evenings and have made a couple of observations. Virtually EVERYONE....Bulls and Bears have a consensus that the market is headed down. I cannot disagree. But when I see a boat that overloaded to one side. My antennae go up.

Notice the correction in Gold it has bounced nicely over support now and COULD have formed a bottom. NEVER call bottoms btw. Only an observation as a possibility. Notice the miners....some have corrected over 30% most over 20%. They were not exactly parabolic prior to their corrections. They have also been showing signs of life now even on red market days. Still not what I would want to label a bottom. But you have to be aware.

The ponzi is over if they tank this market to I do not see P3 here. Again I have no crystal ball but just my thoughts. As far as I can tell nothing is new out there. Greece is not new. In my opinion they are using it to create a negative in the market and I would be very cautious viewing it as catastrophic. Black Swans are unknown and out of left field. This is neither.

If you think GS has lost control then you can nix all I have said .....otherwise you better have your core of miners. Mine is probably too heavy here but WTF ....I just don't trust them (GS)

Update I :
The Ponzi business press made much tado about George Soro's comments on the "gold bubble" recently. You might find this little tidbit of interest. (this is how the ponzi works).......

What George Soros said, and what the press said he said...

"GEORGE SOROS warns gold is now the 'ultimate bubble'," ran the Daily Telegraph headline.

What Soros actually said was:

"When interest rates are low we have conditions for asset bubbles to develop, and they are developing at the moment. The ultimate asset bubble is gold."


I believe that gold is moving down in an attempt to establish a new trading range. At this point in time it looks as though the April Gold Contract is trading in a range of approximately $1100 to $1050.

Gold has not gotten much support off the Greek debt situation. Investors are still using the US Dollar as the “safe haven”. As the Dollar Index has been rallying, gold has been selling off. Eventually this inverse relationship will change, but right now it continues to be in play.

In looking for a clue as to when gold’s inverse relationship with the Dollar Index may end, I have turned my attention to US debt auctions. My guess is that when disappointment in bid to cover ratios and higher yields becomes a trend, gold will be ready to break away from its inverse Dollar relationship.

Wednesday, February 10, 2010

Gold During Deflationary cycle

Essay from Joe: There are two camps of deflationists, the ones who understand value of Gold and then the unaware ones. The second camp argues that since all asset classes have trended together and trended against the US$, all fall in a deflationary period. This is the correct view when we look at very short periods of time like July to October 2008. However, in the larger picture Gold performs very well on a relative basis in a deflationary and hyper-deflationary period. It outperforms as other asset classes tumble and more importantly, it is the first asset to recover during deflation. Many seem to forget that the entire precious metals sector performed very well from October/November 2008 to March 2009, while non- precious metal stocks continued to fall and other commodities were trying to find a bottom, go and check what physical Gold and silver along with Gold stocks did from October/November of 08 till March of 09 when rest of the market was bleeding. Furthermore, the US dollar doesn’t have to decline for Gold to do well, for that period precious metals were up and so was the dollar. Did you know that since the very end of 2004, the US$ is flat but Gold is up 143%? Since July 20, 2007, Gold is up 56% while the dollar is flat. Since early September 2008, Gold is up 35%, while the dollar is up 1%. The majority of deflationists have been dead wrong on Gold and will continue to be wrong.
There are two periods in which Gold does well, one during inflationary cycle and secondly during deflation and hyper-deflationary cycle. Gold is a hedge against inflation and it's used as safety net against deflation after initial drop of 20% to 30% for the physical. Take a look at what GG, ABX, SLW, SSRI, AUY, KGC, and GFI did between October/November of 08 and March of 09 while rest of the market was taking it up the rear end. After December 2nd 2009 Gold stocks have been in the bear market and they have shaved about 30% from their 2009 highs so far, while physical Gold is down 15% ( high of 1229 set in December 2nd 2009, low of 1049), this correction is in line with how precious metals behave right before the rest of the market goes into deflation, in a severe deflation, initially top Gold stocks can lose up to 75% of their value from the highs ( extreme case), but turn and quickly recover while rest of the market bleeds. In October 24th 2008, Gold hit the bottom and closed at 712.50 ( 30% correction from high which during the time was around 1000), DOW was at 8378, and S&P was at 876.77. In March 09 in which overall market was at its lowest, DOW around 6400, and S&P at 666, Gold was at 936.


Which way did they go?? Up....down Up .......down. Can you say indecision. Or how about.....stalling for time. Or No bid market. Bulls and Bears are FROZEN.. Except for the gap traders. Joe is still wackin the SWC pinata.

Missed my DTO trade and watched my core of Miners with no trades. For those of you frozen here then I suggest you look at your portfolio. If you are a long term holder then have your core of miners at 20-30% of your portfolio. SLW SSRI AUY EGO ANV GG GFI. A great core of miners. The correction could be in here. If you are a day trader the gap trades are the way to go. SWC is a monster.

If you want to be a long term holder of miners I believe we still hit the 1020 on the SnP. But my core is a little large and I can't really read any of the tea leaves here. The technicals are still in the down trend so you don't have a bottom formed yet. Many of these miners are already in bear markets.....check it ....thats right.

The lack of money is the root of all evil.

MARK TWAIN, Mark Twain's Notebook

Tuesday, February 9, 2010


Not quite unless you enjoy being biatch slapped. Early morning futures look to be strong and the next two days of news appear uneventful. Ben speaks at 10 am tomorrow so I wouldn't be surprised to see two nice days of gains to the 1080. But watch out for thursday...we get retail sales jobless claims and business inventories and then consumer sentiment on Friday...

Respect the trend...and remember the trend is your friend. And when it "aint" its a mthrfkr. Right now its down and until 1020 to 1030 is held and confirmed this is one dangerous market. I have advocated the precious metal miners because they have value but they take the first and fastest beatdown in these sell-offs... They are the winners and they get sold first. GS wants these beat down. They know where the bottom will be and they will be the buyers. I will discuss what the bottom looks like if I see it but haven't seen it yet.

Knowing this year will be a trader's year and profiting from the trades are two separate issues. For most traders holding a core of miners here is a must 20% is reasonable. My core was extended on the pullback and that will cost. Miners will come back from their beatdown but in the market timing is everything so remain patient with your cash.

As usual be accumulating physical gold. Dollar strengthening is not over . Watch 81 then 84. If we get to 84 miners will be another 20% so beware. AUY at 7.50. Its possible.

Nice excerpt here....

Major stock market indices put in outside weekly reversals last week, which is a bearish technical indication the intermediate-term trend may have finally rejoined the primary forces that would see prices far lower were it not for official intervention. And although this intervention is now getting talked about in the press in a more intelligent fashion, even if only on a very limited basis, it should be understood most remain oblivious to what makes the stock market world go round. Of course while better than nothing in terms of enlightening the masses, at the same time it should also be understood that such accounts never present a comprehensive explanation of what causes prices to trend (meaning intelligent speculation is still possible), with the attached above yet another example of this, offering no discussion on investor sentiment, cycles, and so on. The aspiration Mr. Biderman ultimately comes to, that the low volume ‘jam job’ government price managers have engineered is likely a ‘ticking time bomb’, is correct; however such an account is still lacking, and far too late for those unfortunate and unaware speculators who have already been ravaged by such activities.

OBTW take a look at the Indu chart HnS forming WOW...

update I: Be aware if you are a DTO trader that oil is in a precarious spot here. Either it gets bullish and makes a move over 80 or it is in danger of a bearish 50/200 crossover occurring. I have only a tiny DTO position left at EOD. will not add until I see direction . If oil crosses 75 and then fails to reach 80 watch out below.
updateII: Nice watch on silver

Monday, February 8, 2010


Look for the market to chop up traders stops this week just like today's action. Smart traders are heading for cover. This is an indecision for many traders that makes the risk reward equation just not worth the effort . Play the large gaps only for trades if you are in the miners but don't chase. I reduced my Too large miner core at the open and will sit out any heavy trades unles the gap is large. Essentially my next line for a trade is the 1020 area which is the 200 MA comin fast.

Be aware this is danger for the miners. Watch the 980 gold level. It looks like they may try and shake out the miners hard. Nasty game the boyz are playing and they don't want you in the miners so expect some ugly action.

What crash history tells us to expect for 2010

From Clif Droke:

Stock selection in 2010 will become more important as the sectors showing only the best relative strength, forward momentum and earnings growth should be favored over weaker sectors. The coming year is likely to reward good stock selection as opposed to the “buy with both hands” strategy that played out so well in 2009. Market timing will also be more critical in 2010 as opposed to last year since there are two major cycle bottoms scheduled this year: one in the first quarter of the year and one around late September/early October (namely the 4-year cycle).
With the most recent bear market almost one year behind us, we’ve seen an extended market recovery since March 2009 with nothing worse than a six percent correction along the way. Our historical survey tells us to expect more headwinds in 2010 due not only to the above mentioned cyclical factors but also to the fact that the market will be running into more overhead resistance. Volatility is almost sure to become a bigger factor in 2010 than it was in 2009 and history shows that the second year following a market crash is nearly always more variable and bumpy than the first year. The two major cycles scheduled to bottom at various points in 2010 will be a factor in producing this anticipated volatility.

While the second year ( 2010) normally shows a gain for the broad market averages, the gain is usually considerably less than the first year ( 2009). At worse, the market trades in a more or less lateral trend and closes largely unchanged on a year-over-year basis. Accordingly, technical strategies that utilize trading range opportunities will be important in the year ahead.
What can we expect of the gold price in 2010? Using examples of market history as our guide we can see that gold didn’t always perform as well as stocks in the second year of a post-crash recovery. The years 1976, 1989 and 2000 are examples of this. What’s interesting to note, though, is the impact the 4-year cycle tends to have on the gold price. The 4-year cycle scheduled to bottom this year typically increases demand for gold in the latter half of the year due to the financial market volatility it creates and even more so during the “hard down” phase of the 4-year cycle. This can be seen in 1974, 1978, 1982, 1986, 1990, 1998 and 2002.

Sunday, February 7, 2010

Silver’s Most Important Price Point


Pay real Attention:

The Silver chart is warning that a MAJOR PRICE TEST AREA is the 15-16 dollar area for silver. While there is rampant bullishness for the future, the chart is telling us to pay close attention to this area. Should history repeat itself, the chart shows that a break of this important area could lead to a test of the 11.50 – 12.50 area where the lower channel lines are. That is what price did the last time we broke this price area when money flow was dropping. On Friday Silver broke the $15 an ounce support and went down to 14.85 before closing over $15. In the case lower channel of 11.50 to 12.50 an ounce for silver is reached between now and summer, the miners would take real heavy price decline from Friday's close.

If the bull market is alive and well then Silver should hold the 15-16 dollar area and a new rally leg should develop. However the last 15 years have seasonally shown that the February time frame is a dangerous one for silver bulls.

Should a major credit crisis develop again like it did in 2008 I think silver could be very vulnerable over a 3-6 month period. Should we get a drop to the LOWER major channel lines it would be a great buy spot. Silver is not the only commodity that has been going down. Note the CRB commodities index.

In summary all commodity and stocks markets need to be watched carefully. The longer we get into this so called recovery the more the government numbers seemed cooked like Japan did in the 90’s. While the fundamentalists will eventually get their way in most areas, the timing element of silver and gold and any other instrument can swing wildly to the opposite side during times of panic.
If you get emotional & IMPATIENT, and ASSUME miners are cheap enough now and load up now for BUY and HOLD, and silver stays below $15 an ounce and goes to lower channel of 11.50/12.50 ( bottom), then your porfolio will take a heavy beating.
For the majority of the time, silver’s a great buy in the June/July timeframe and a good time to be light is the winter time. Read the Article:

In conclusion, listen carefully to the LYRICS of this song, " Burning Bridges", especially when it comes to market. Friend is the one whom warns you about burning bridges regardless of whether you like to hear it or not.

Saturday, February 6, 2010


We can sit around our fires today and relax. No market manipulation to discern and fight for our trades. Sure we know we have the right position ....after all we did our due diligence and it makes perfect sense and then the market sells off confirming our position AND the breaking news that day. We were short and then after the market closes .....more bad news...another breakdown in the world credit are still short and no positions were closed...All is good...Correct?? Nooooo. You are about to get your head handed to you by the PPT. Plunge Protection Team. Labeled Tin Foil Hat urban legend garbage by the mainstream financial media. How do the do it? Fairly simple actually. Put a billion into the overnight futures and ramp the E-minis pulling in sideline money for the opening squeezing shorts to hell. Simple process. Droke has a nice article on some of his readers comments.... here is a sample...

“Why did they let the markets crash in 2008? Simple, [it was] the last chance to get good buddy Paulson to pass out billions to his friends before he was out. Do you think Wall Street was left holding the bag or small investors and funds?

“Notice how the markets surge in the last few minutes of trading almost everyday so the markets show a gain. Would real traders really pass on buying stocks all day at a cheaper price and suddenly race to buy them at a higher price at day's end without some ulterior motive and absolute knowledge they would go higher?

“Goldman Sachs, which is about the 40% of US markets, had only one losing trading day in the third quarter. Do you believe that is luck? The only thing the government has going for it is a propped up stock market to try and fool people that something is actually good in this country.”

A reader from Canada had another take on the existence of the PPT and the possibility of market manipulation. He writes:

“The intervention of the PPT would be hard to disguise and would involve huge sums of money. It would be far easier to just jam the overnight futures on heavy down days. I followed this action closely back when we had those 200+ down days and you could see it in the S&P E-mini. At critical junctures you'd see huge buying which would trigger trading programs and other such automated nonsense. Once the turn was made the funds would pile in and you'd get a rally. All short term, but if you do it often enough that players notice, it discourages heavy shorting, which I believe is the goal. Just another version of don't fight the Fed, at least that's my take on it.”

In the previous commentary I also asked the rhetorical question, “Does the anti-PPT faction actually desire a market collapse and the Great Depression that would inevitably follow? And for what reasons? A love of anarchy and revolution?” Here is how one reader responded to this question:

“No! We desire a deeper market correction and, if necessary, another Great Depression that would reestablish normal, healthy and sustainable valuations of the markets, precisely to PREVENT the anarchy and revolution which is now virtually guaranteed by the constant interference by government in the once free markets.

“For example, after LTCM failed in 1998, the ramifications should have so severe as to have caused a cascade effect throughout the credit markets and triggered a long overdue recession. Instead we got the and NASDAQ bubble. When that bubble burst, we should again have had a much larger correction in the markets leading to an even bigger recession, or possibly a multi-year depression to clear out all the dead wood and bad investments. Instead we got artificially low interest rates and an even larger real estate and commodities bubble. Inevitably that bigger bubble burst, so now we have 0% interest rates as far as the eye can see and they are sowing the seeds of a hyperinflationary depression, which might cause a breakdown in society, food riots, marshal law, civil war, etc.

“So, no; I am NOT thankful that the PPT has stepped in to ‘save the day’ because while they may have saved “today” they are just delaying the inevitable utter destruction of ‘tomorrow’.”

update I :

Looks like the BOYZ were busy this evening....

update II 0320 2/7/10 : Busy busy busy boyz this weekend....wonder if we get a weekend announcement.....this secret chit smells of PONZI REPAIR

Friday, February 5, 2010

Trading Gold & Gold Stocks


With the exception of joe, the rest of us should buy Clif Droke's new book on how to trade Gold & Gold stocks: .The best 20 bucks ya ever

From clif:
Gold has garnered its fair share of the investment spotlight in recent times and for good reason – the yellow metal has outperformed virtually every major asset category and remains a favorite long-term investment the world over due to its intrinsic worth.

Gold’s value as a hedge against runaway inflation is well known. Less well known is its benefits as a store of value in runaway deflation. This is an important consideration for investors given that the final “hard down” phase of the Kress 120-year cycle begins in 2012. Along these lines, the current interest rate policy of the Federal Reserve is beneficial to the long-term gold outlook. When the Fed funds rate falls under the consumer inflation rate, gold comes into its own as an investment. This happens because investors have a hard time getting an honest return on their money and so turn to the yellow metal as a safe haven. Paul Kasriel, chief economist at the Northern Trust Company of Chicago, pointed this out at the commencement of the gold bull market several years ago. He observed that when the Fed funds rate falls to 1%, gold always shines.

Gold and gold mining shares offer excellent trading opportunities for retail traders due to their liquidity and tendency to trade in repetitive patterns. By using a series of reliable technical indicators and moving averages, a trader can realize immense gains over time sticking to a trading discipline proven to work. It was to that end that I wrote, “How to Trade Gold and Gold Stocks” at the commencement of the gold bull market in 2001. The book discussed a number of simple yet effective techniques for profiting in the gold and PM shares markets. Also included are considerations for sound fundamental analysis of the mining stocks.


If you are going to be a trader ya gotta know the game.....These are your considerations. Educate yourselves and recognize the risk is still high to the market and the miners...

In terms of the dollar, we have a daily and a weekly buy signal in effect. Thus the current outlook on the dollar still remains rather bullish. On the Euro, we have a weekly sell and a daily sell signal in effect and so the outlook remains bearish. It could potentially trade all the way down to the 125 ranges. If the dollar should issue a monthly buy signal, the outlook for the dollar will turn extremely bullish, and it will be a sign that Gold could potentially correct/consolidate for the next 7-9 months before mounting another strong rally. This in turn will increase the odds that the entire commodity’s sector is going to experience a rather strong pull back. The current action in Copper and the oil markets indicates that all is not well and the other sectors could soon follow their lead.

Update....EWI from TB

"The longer-term chart of gold’s wave structure is as suggestive of a big draft lower as those of the dollar and euro. On Wednesday, it looked like gold might want to dance back and forth across the trendline that supported the rise up from October 2008, but the pull away from this level over the last two days is very visible on the chart. The wave ii (circled) high at 1126.20 should hold and lead to much lower levels. If a wave (ii) rally is in effect, it should hold below $1106 and lead to even more furious selling in wave (iii).

[Silver], with its blast down and out of the trend channel that carried it up from the $8.39 low of October 2008, is the star of the show. The brevity of its early February correction and the force of its decline through the middle of trading today are a first taste of the decline we expect across the breadth of the financial markets. On Wednesday, we were looking for the mini-silver contract to carry to the $17.12-$17.27 area, but its inability to breach the $17 level, followed by such a quick drop through the $16.02 support level, $15.99 spot, suggests powerfully that silver’s bear market is back. If the latest steps lower are any indication, and we believe they are, the trip back to $8.39 should be quicker than that of wave (1). Silver spent much of the last several weeks clanging back and forth between support and resistance in the $16 to $18 range. We do not expect it to make it back into this range. The wave i (circled) low just below $16 should hold and lead to much lower prices. If it surprises and returns to its former haunts, the wave 2 high at $18.92 should hold."


Relax have a beer. Pull your credit cards out and let's ROCK n ROLL. Do you believe that GS the Fed the GOV spent all of last year manipulating the market to restore the CON in CONfidence....only to let it all collapse suddenly in the first of 2010?? Ask yourself if GS is going to continue to employee thousands of bankers by tanking the stock market to the depths of hell? Do you think that the President is REALLY substantively going after the big bankers. Not with both houses of congress solidly in the bankers pockets. Sorry if you think this is the big one but not gonna buy it. Not yet. You will have to to break 940 for me to swallow that load of chit.

Anyway back to a better cuisine. This is the very reason your portfolio had better have a lot of that physical metal in it.

This is probably still in a bottoming process even though we are currently oversold so be patient. Remember own a core of miners now and HOPE they get whacked over the next few weeks. Trade um here if you like. But most of all patience.GL

UPDATE: Supports and resistance to watch, thanks joe:

Oil: Watch and see if 69.5 holds, if it does not then 65 is the next support . DTO is a nice one to short oil.
Gold: 1050 is the first support here, if it breaks and holds then 1020/1030 is the next support and after that 980.
Dollar: There is heavy resistance around 81.50, if it gets there and breaks it then 83 is the possibility.
palladium: 362 is the support, this is for those of you who like to play SWC and PAL.
Silver: 15 is the support, if it breaks then 14 is the next support.
S&P 500: 1035 is the support, if it breaks then 1020 , 1006, and 980.

Update I 3:35 : WTF ....can your believe it??? shocking just shocking..they reversed the slaughter now they are squeezing the balls off the shorts. this game its the best. Remember ..Masters of the Universe.

UpdateII Must now watch for confirmation on Monday ,Tuesday of the miners move to see today's closing as just short covering for week-end or not. Watch for correlation. ESPECIALLY if market is weak and miners are holding. Be aware of reversal today which requires confirmation next week .....if dollar goes past 81.5 then with the Greek and Euro mess miners will take a further beating.

Thursday, February 4, 2010


and we're sinking. Market is opening weak and will probably get weaker. Now there is a revelation. Gold is dropping like a ....rock.....somehow that doesn't seem appropriately descriptive. Very simply though shaking out of weak longs before they crush the shorts. Don't have a clue how long they will do it. But I do know it will happen. They have to get shorts in and more importantly they must get mom and pop to enter the market long. DTO is kicking some serious butt, darn joe.

It is easier to stay out than get out.

Mark Twain

update I 1430: Market slaughter...death..disaster..bodies strewn everywhere...and Joe is bloated like a tick on his DTO trade. Pay attention to the resistance levels and don't get taken in yet at least 1050 in play..Most likely 980 to 1020. Maybe within the next 2 is a TB link to Chanos.

Joe posted the following from Clif Droke in November, Clif predicted this yr China bulls will take it up the rear end:

"SUPPORT / RESISTANCE - There is a series of strong support in the region of 10,000 to 9,800. and then 9,500. Should 9,500 break then the Dow could tumble all the way to 50% of the rally at 8,600. Overhead resistance lies at 10,300, then 10,400. With strong resistance in the region of the 10,600 to the high of 10,726. It will probably take some time for this resistance to be overcome. Next resistance above is at 11,250 that may mark a pause in the uptrend if it breaks higher enroute towards the target for 2010.

PRICE TARGETS - Downside price targets resolve into the 9,500 to 9,800 zone, therefore this should contain the current correction, a failure here would negate this analysis and probably mark the end of the bull market which initially targets a decline to 8,600. Upside projections show difficulty in breaking above the 10,729 high, though once overcome the Dow would target a level north of 12k.

VOLUME - Volume has been WEAK throughout the rally, which has been one of the main reasons why so much commentary has been bearish during the rally. However it is perfectly inline with that of a stealth bull market and also implies that this rally has NOT been bought into. So all of the talk of hyper bullishness investor sentiment is basically rubbish as there is no sign of such sentiment in the volume, which remains heavier on the declines than the rallies and thus suggestive of SELLING rather than buying into the rally.

Risks to the Forecast

Technically we have had a major sell signal on break of the main uptrend line which means the current correction has YET to bottom, my target is eventually a bottom at 9,500 to 9,800 after a corrective B wave rally towards 10,300, the C wave decline should hold at this, however if 9,500 goes then this at least implies a bear market that initially targets 8,600.

The primary risk for the end to the bull market is that the central banks pull the plug on easy money as a consequence of a series of sovereign debt crisis. I.e. forced to push interest rates much higher than forecast to prevent a bond market / monetary collapse. In reality the governments have a window of opportunity to benefit form the strong economic recovery currently underway to CUT the budget deficits and get a grip on debt to GDP ratios. If they waste this opportunity then this forecast could fail as it resolves towards a bear market trend back towards the March 2009 lows.

However I put this risk at this point in time at about 25%, small but significant. It really depends on the economic bounce being as strong as I forecast it to be which will carry the markets AHEAD of it, and inflation and consumer confidence along with it therefore allowing deficits to be cut along side economic growth".

Update II

Short post related to levels for tomorrow, first to address adrenhaline junkies playing a countertrend bounce early tomorrow, if you have the kahoonas to try it, your ponies to ride for that play off the setup are AAPL and PCLN, but sell them on the first red candle you see. Paranoia can be a good thing, this is the time to embrace it.
An up start would be good to see, it is hard to imagine anything over 1080, greater than 1090 is probably a reversal and long signal, but just an intraday long signal. 1073 and especially 1080 are tough to crack for any upside, those are the natural dying ground for anyone trying to play a bounce, and one would expect the bloodletting to ensue full force from there onwards. Down target is 1040 with interim resistance/potential reversal at 1053. I would pack it in short side with at least 1 hour left tomorrow to be sure to avoid late covering and hold nothing over the weekend. GL. - Analyze.

update III from shankys the post thnx jeff. GWis still a moron..;-)

Wednesday, February 3, 2010


ADP showed steady improvement and life is good. I put rasberries on my granola and everything is perfect. Finally I am back in my office and get a full day to trade. So what to do ...what to do. Hmmmmmm don't sit still or you will get ran over.

DTO looks sceeeery here. But gotta try to nibble a little. LITTLE. Trade this biatch only here. Miners still at risk so no heavy buys or adds. You should have a 20-30% core position only. I am a little bigger than that. Now that I have told you I am at risk for an ass chewing by Joe. He is very concerned miners can take a severe beating over the near term as USD strengthens.

PAL and SWC is going to do well this year. Entry points are same as have a position and hope they get clobbered.

BTW so there is no confusion on this blog. I despise both political parties and what they have done to my country. And for those of you who do not know my history I have always been an independent as a voter. Make NO mistake Bush/Cheney were disasters for our country and constitution. The current crew are different only in that the top dog is 40 IQ points brighter than his predecessor and speaks english not hillbilly. But if you have bias in this game then you will get fed a big chit sandwich so you better get over it. A lot of my friends have been too anxious to short the market last year because they "hated" Obama. That proved to be disastrous. So remember we try to trade and invest with NO BIAS.GL

Also be aware the 61.8 fib from the 666 low is still in play and does make things very dicy for us if the market does hit my guess of over 1200 on the SnP. Here is an interesting inverse HnS developing that gets vethy interethting.

Update 19:55; Walayat's forecast for 2010 :

This is the meat of what walayat is saying, it can be argued and even dismissed by some which is fine by me, future will tell if he was as correct as last yr or not. Him along with Clif Droke were one of the first ones who called for the stealth market we had last yr and they called it in March. Any way here is the bulk of what he says:

"SUPPORT / RESISTANCE - There is a series of strong support in the region of 10,000 to 9,800. and then 9,500. Should 9,500 break then the Dow could tumble all the way to 50% of the rally at 8,600. Overhead resistance lies at 10,300, then 10,400. With strong resistance in the region of the 10,600 to the high of 10,726. It will probably take some time for this resistance to be overcome. Next resistance above is at 11,250 that may mark a pause in the uptrend if it breaks higher enroute towards the target for 2010.

PRICE TARGETS - Downside price targets resolve into the 9,500 to 9,800 zone, therefore this should contain the current correction, a failure here would negate this analysis and probably mark the end of the bull market which initially targets a decline to 8,600. Upside projections show difficulty in breaking above the 10,729 high, though once overcome the Dow would target a level north of 12k.

VOLUME - Volume has been WEAK throughout the rally, which has been one of the main reasons why so much commentary has been bearish during the rally. However it is perfectly inline with that of a stealth bull market and also implies that this rally has NOT been bought into. So all of the talk of hyper bullishness investor sentiment is basically rubbish as there is no sign of such sentiment in the volume, which remains heavier on the declines than the rallies and thus suggestive of SELLING rather than buying into the rally.

Risks to the Forecast

Technically we have had a major sell signal on break of the main uptrend line which means the current correction has YET to bottom, my target is eventually a bottom at 9,500 to 9,800 after a corrective B wave rally towards 10,300, the C wave decline should hold at this, however if 9,500 goes then this at least implies a bear market that initially targets 8,600.

The primary risk for the end to the bull market is that the central banks pull the plug on easy money as a consequence of a series of sovereign debt crisis. I.e. forced to push interest rates much higher than forecast to prevent a bond market / monetary collapse. In reality the governments have a window of opportunity to benefit form the strong economic recovery currently underway to CUT the budget deficits and get a grip on debt to GDP ratios. If they waste this opportunity then this forecast could fail as it resolves towards a bear market trend back towards the March 2009 lows.

However I put this risk at this point in time at about 25%, small but significant. It really depends on the economic bounce being as strong as I forecast it to be which will carry the markets AHEAD of it, and inflation and consumer confidence along with it therefore allowing deficits to be cut along side economic growth".

Tuesday, February 2, 2010


Sorry for the slacker posts today but on the road. 50DMA at 1113 on SnP should get a test next couple of days. Beyond that no visibility....only random thots. One thing to keep in mind is that in spite of the shape of our economy it does NOT benefit GS to tank this market here. Will this be our pullback .....I don't know. But I want to watch 1113 then next area 1120.....then upwards and movements will be simple this year but play the extremes if you are nervous. As red said watch the 200dma and the 50dma.

GDX is a great chart to follow on Also $SPX on same. Review these and play the trends. I like several of the EWRs for charts ...especially Daneric.

Will get some links today but GL. AUY is oversold but can get worse have a position in it.

Monday, February 1, 2010

Short Squeeze Day

Today GS squeezed the heck out of shorts. SWC, PAL, AUY, CENX, ANV did very well. As joe expected SWC, and PAL held the 50 DMA on Friday's closing and this morning right off the gate they went back up and closed strong for the day. S&P closed above 1087. Gold was up nicely ( up $22), oil & materials up, dollar retraced, SMN took it up the rear end. As I have always said, beware of those algos. We shall see what tomorrow brings. Print machine was on today, some call it Quantative Easing 2.0, heheeee !

Glorious day for the ponzi. Wish I had a crystal ball, but you gotta believe they won't end it here. My 61.8 fib is still in play. So beware shorting. As Joe has warned they can drop the miners to hell. I still have a feeling they may shake out the miners some more but gap trading will still work. DTO was beaten senseless. What a blood bath. Anyway I expect more surprises for all this week. If market gives you an entry on EUO between 18.80 and 19.25 take it, Euro could very well be in trouble, read the following link:

Do not be confused by the recent action. My core of miners is full. But the intermediate call is for further weakness in the miners. At least we can HOPE. May not occur. But if they push the ponzi to 1240 on the SnP. The core will make a nice trade. For most here hold a core and Keep the majority in CASH. Trade the gaps if you are on a computer.....otherwise hold a core.