Thursday, February 4, 2010

WE'VE HIT AN ICEBERG CAPTAIN update III

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 weeks...here is a TB link to Chanos.
http://www.businessinsider.com/jim-chanos-china-is-overheating-and-overindulging-2010-2

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

http://news.goldseek.com/ClifDroke/1257088920.php

"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".
http://www.walayatstreet.com/

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 blog....love the post thnx jeff. GWis still a moron..;-)

http://shankystechblog.blogspot.com/

58 comments:

  1. looking to cover my xra short at 7.2 watching gaps down for anything without a new low at 10 and then play the fade

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  2. Hit X puts and just covered a couple minutes ago, will look for re-entry on another swing. - Analyze.

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  3. I'm not sure what GLD transfers to Gold but I think we start scaling into GLD at the 103 area. Then, the real support is at 100 or Gold about 1000. I really doubt we get through that but, a real strong move in the dollar makes anything possible just look at fall of '08.
    Jeff

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  4. Disclosure

    I was short gold and silver and oil. Have covered all but 5 SCO calls.

    Jeff

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  5. As I said couple of days ago, EURO is in trouble.

    palmer

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  6. Moody's Sees US Rating Under Pressure After $3.8 Trillion Budget
    http://www.zerohedge.com/article/moodys-sees-us-rating-under-pressure-after-38-trillion-budget


    And to quote the article at http://www.marketoracle.co.uk/Article16870.html (bottom of page)
    “Replacing all national moneys with a go-anywhere single world money would massively aid the writing off, and hiding of past errors, debt and delusions, both Keynesian and neoliberal. Debt forgiveness would be truly democratized and vastly extended upward from a periodic gift to the world's poorest countries. Using stealth in the run-up to introducing BTU Bancor, like any other process of forcing out old moneys (like the Euro's introduction in 2002), the surprise effect could prevent gold bugs bidding up the yellow metal's price to real extremes - and oil or other fossil fuel prices would likely stay reasonable due to the betting on sharp deflation following the arrival of BTU Bancor.”

    This is the most likely scenario that I can see happening, at this time… you may recall that Michael Hudson was advocating debt forgiveness in this video –http://www.youtube.com/watch?v=3pwAFohWBL4

    Hudson is well-associated with the banking elites who are pulling this off… just read his bio at – http://www.michael-hudson.com/biography.html

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  7. Walayat is right on So far which started yesterday.

    Jim

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  8. 1070 holds or 1058 then 1030 are my points on SnP.....Gold should hit 1020 maybe 980...

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  9. kli,

    DTO kicking butt, heheeeee!

    palmer

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  10. New targets overall from my side, 1070 potential bounce but continuation after a swing to 1040 (previous Rthchld 1058 target does not apply now but will provide resistance) as the low, return move to 1155 as the high for consoidation range and then it sets out to break that range from there. Surprising EUO power on the gap today, man USD is ramping. That should be it for a bit here, that was my X put covering tactic when I posted it over that extended USD gap. Busy now but may be able to converse abit tonight if you're online. Our targets are not much different anyway. - Analyze.

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  11. If S&P holds 1070 then gold should hold 1070-80. I just went long gold and added to AUY. I see the market ramping into the close. Tomorrow is anyones guess. I think we if we post a bad jobs number 1029 here we come quickly. We post a good number then it will take a couple of weeks to get back to 1029. The Market makers need to set another bear trap before they set the nasty bull trap.

    Jeff

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  12. Joe hit DTO for the jackpot.....I sold waaayy to early today........just sold my last position at 78.2......missed on yesterdays....waaaaa..

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  13. Red,

    Do not do what I do, I am completely insane.

    Joe

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  14. EUO doing nicely today.

    palmer

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  15. I am just watching like a vulture. Set the targets late last night in the previous comment section. $50 move in gold and the assault on the US dollar index at 80 happened a little sooner than I expected, next test 1065. Going back to sleep feel like crap.

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  16. Look at DTO, wowwwwwww!

    palmer

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  17. Red i was just gonna copy and paste that 50$ call on gold .......hehehehe ....wata game

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  18. Palmer, if 1020 on S&P does not hold, what's the next support?

    Jim

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  19. Jim,

    960/980 for S&P, and around 8500/8600 for DOW.

    palmer

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  20. time for a long swing trade into the miners anyone?

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  21. http://www.businessinsider.com/jim-chanos-china-is-overheating-and-overindulging-2010-2

    Ok guys this is a MUST listen...about an hourBest insight I've heard in a long time. Chanos is one sharp cookie and I'm paying attention to him, Precther as well)...I am still playing ZSL(large), TZA, TYP, SMN(large position), EDZ(largest), and SRS...I'm short Ford, FCX(have been), PCU, the ags(POT/MOS), have calls on SMN, puts on SLV...these are my largest positions...I think Jim Chanos is dead right on!!! Guys...check these out, do your own DD...I'm looking to short more companies that service construction in China...I doubt now I will sell any of the above shares for some time. I don't "day trade" but a bit, I swing trade for the most part(mostly comms)...I believe I will be holding these shares for more than a few weeks....GLTY All...TexasBlondie

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  22. http://www.aolnews.com/the-point/article/carly-fiorinas-demon-sheep-ad-epic-fail-or-advertising-genius/19345019?icid=main|main|dl1|link3|http%3A%2F%2Fwww.aolnews.com%2Fthe-point%2Farticle%2Fcarly-fiorinas-demon-sheep-ad-epic-fail-or-advertising-genius%2F19345019

    Check this out....cool video...scary too. Boy are they going after his butt...glad I'm not him...This fall's elections should be very interesting for sure. Going to get nasty! TXBlondie

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  23. OH forgot....watch-out this fall for dingle berry butts, going to be everywhere and "da little sheep" are pissed! :) TXB

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  24. Anyone glad they are not selling puts on SPY today lol? Bloodletting at its finest. Our conversation last night of saying another leg down was needed was timely. - Analyze.

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  25. TB,

    This is what I posted from Clif Droke in November, in which he predicted china bulls will take it up the rear end this yr:
    http://news.goldseek.com/ClifDroke/1257088920.php

    palmer

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  26. Yep! Thanks Palmer, I was paying attention...:) TXB Whew...what a day!

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  27. Hey Kli, looks like "da sheep" removed their rose colored glasses today...:) Many of us knew the day the DOW hit 10,000 and the CNBC clowns were on the floor all giddy wearing their stupid "DOW 10,000" caps, the end had to be near....TXBlondie

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  28. TB,

    kli changed " da sheep", no glass and multiple sheep, check it out, heheeee!

    palmer

    ReplyDelete
  29. TB,

    By the way there is no accident the middle sheep is fat and happy, that one is kli himself. He always knows how to communicate thru pictures, one smart dude that kliguy.

    palmer

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  30. Ahhhh, I see that now...I need Kli to put a picture of a little "black sheep"...that one would be me for months now....I was getting trashed and attacked(nasty at times) for my insight and take for what was and is to come on the Yahoo boards all last fall(big time), even the past few weeks(a bit by a couple of morons)....NOT TODAY!!! :) Yes Kli is very smart ...so is Analyze, you, and a few others that post here...that's why I read this blog everyday! TexasBlondie

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  31. TB,

    You wanted "black sheep", you got it, check it out.

    palmer

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  32. Woo Hoo!!!!!!!!!! HUG Kli...how sweet! Love it! TXB :)

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  33. Still like gold? Will you sell when it hits $650? Good luck.

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  34. Hey ANON show your name so we can respond to you later....if gold hits 650 then I will be buying with every dime I have.....heheeh....my guess is you don't have a pot to piss in. You definitely haven't been reading this blog. But be my guest.

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  35. 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.

    ReplyDelete
  36. Anon if you're calling gold $650 why not go short equities instead? Since you're calling for serious deflation.. Equities can go BK and be worthless, gold can't. Also you should respect the fear factor in gold price.

    Why short gold at 1,000 and cover at 650 when you could short damn near any company that requires consumerism for it's health and cover.. never? And you know what would be a good hedge? Gold!

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  37. Also kli and the rest, are you in chomp mode or nibble mode on AUY at this level? It looks so tasty!

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  38. I would love to see a nice drop in the morning after the FAKE jobs number comes out. Then a spike back to resistance at 1070ish would like it even more if the S&P got to 1084. So I could sell some more of my longs. Net Net I am pretty much nuetral maybe a bit more short but I don't really look at gold as being long or short. I look at it as an investment for the next couple of years but would like to make a couple of scalps here and there with it.

    Jeff

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  39. Right now my favorite stocks are JNJ, PG, PEP, MCD.
    Jeff

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  40. Morla ABSOLUTELY YES......but don't load it yet begin accumulate gingerly....

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  41. What do you all think about owning some physical gold and silver.

    Jeff

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  42. I did add to my AUY today. Thoughts on GFI

    Jeff

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  43. http://shankystechblog.blogspot.com/

    Read this blog. Really good tonight

    Jeff

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  44. GFI is also solid mthr....bigtime.

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  45. nice shanky comments......posted link above

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  46. just got a call from a friend here asking if its time to buy gold. for physical long term yes for a trade I like gld at 103 for a nibble.

    playing the downside the same as the upside.

    Analyze numbers look really good.

    Kudos to Kli on his first dollar target of 80. Second target of 81 needs to be watched.

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  47. Thats why I go to this sight and shanky's everyday. Good stuff!!! Well today Obama made his first Bushism. Saying Corpse man instead of Corpsman. Very funny. I think GFI is solid have made money trading it. Very levered to the price of Gold. Kli notice shanky's comments on gold!! I haven't done it yet but what is everyones thoughts on buy physical Gold and Silver? Thinking about it. Have a nice new gun safe just screaming fill me with stuff.

    Jeff

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  48. Don't use gun safe for the bulk of your gold.....be more creative ....and do not put gold with paper money...paper money located easily from a distance by IR...

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  49. Got another one for you guys. AAUK? I own some in an IRA. Gold, Platinum, Diamonds. Big neg is it is a diversified miner.
    Jeff

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  50. ‘I am proud of thirst and Hunger for the Fatherland!’

    That kli is a trouble maker, who is stocking up gold and Alpo.

    Actually most new money above $1 has the RFID strip. Best way to defeat detection of currency and passports is to wrap them in aluminum foil forming a faraday cage from the readers.

    GFI and all paper gold is good for trading, but you should be out of them in a couple years completely along with all stocks and bonds.

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  51. Red good point about the foil.

    not much action in the futures. flat line in need of cpr.

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  52. http://johngaltfla.com/blog3/category/the-day-the-dollar-died-series/

    Great story. Must read and start from the beginning. Fiction well maybe right now but in the future???

    Jeff

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  53. Red is correct and remember that can be detected OUTSIDE your home with the exact location if its not protected with aluminum foil. So you can protect it as you see fit......

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  54. When playing Hungry Hungry Hippos one mustn't hit the lever too soon. You may knock that marble right into your opponents mouth!

    As hungry as my hippo is I want to see another big red day Friday before I take another bite at those yummy AUY marbles. Got GRZZX as always and plenty of cash tummy room.

    TLR marbles gave me indigestion, good lookin' out Palmer. Those must have come from a Chinese Checkers board or something.

    Anyone see how Swedish Snus apparently doesn't cause cancer? Look it up, no one can find so much as a correlation. Of course the mommy-knows-best establishment isn't going to bring that up, they think you deserve cancer because you like nicotine.

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  55. I suggest keeping your hoard in $2 bills, as a n homage to Thomas Jefferson for trying to warn us if only we listened to potheads like him.

    "Banks are evil? What'choo smokin', Jefferson?"

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