Thursday, March 25, 2010

WHACKED SMACKED....NOW STACKED update IV

Just more of the consolidation process. Until we break out of this channel the process could last for several more months. My expectation for gold to hold 980 level remains but time will tell. Without a meaningful pull back in the market the miners will recover quickly. I have not seen the bottom yet in miners but added to my core yesterday on several miners.

(Reuters) - Gold prices firmed in Europe on Thursday, recovering some of the previous session's hefty losses, as the euro steadied near 10-month lows against the dollar, removing some downward pressure from the precious metal.

Spot gold was bid at $1,093.65 an ounce at 1031 GMT, against $1,086.50 late in New York on Wednesday. U.S. gold futures for April delivery on the COMEX division of the New York Mercantile Exchange rose $4.70 to $1,093.50 an ounce.

The precious metal fell to a six-week low of $1,084.85 an ounce on Wednesday as the euro tumbled more than 1 percent versus the dollar, but has met with good buying interest as prices fell, traders said.

"We are still seeing safe haven buying of small coins and bars, and as prices drop we see good physical demand in general, which is absorbing some selling in the market," said Commerzbank senior trader Michael Kempinksi.

"Without the safe-haven idea, gold would already be much lower," he added.

Dealers reported physical demand for gold in India, the world's biggest bullion consumer, rose after prices fell to attractive levels, as traders resumed buying to stock up for the wedding season that begins in April.

FOCUS ON GREECE

"The focus for the euro remains on Greece," said Credit Agricole in a note. "The two-day EU Summit starts today with muted hope that it will result in a clear and euro-friendly resolution of the situation."

"The message that should resonate through the summit is that the risk of negative fiscal sentiment spreading across the euro zone has not gone away and remains a threat to the euro."

Among other commodities, oil prices turned higher, reversing some of their earlier losses.

Silver tracked gold higher, rising to $16.73 an ounce from $16.53. Platinum was at $1,587 an ounce against $1,577, while palladium was at $439 against $442.50.

Both platinum group metals have taken support from expectations for a recovery in car demand this year. Platinum and palladium are chiefly used in autocatalysts.

Investment demand is also expected to support prices after a subsidiary of London's ETF Securities launched U.S.-based platinum and palladium exchange-traded funds earlier this year.

ETFs issue securities backed by physical stocks of a given asset, and have represented a significant source of demand for precious metals in recent years.

"Two-way trade has been seen this morning but both (platinum and palladium) are likely to find continued dip buying interest as investment and industrial demand tightens market fundamentals," said TheBullionDesk.com analyst James Moore.

"Available data suggest U.S. ETF holdings in platinum and palladium have increased around 20,000 ounces over the past 48 hours," he said

Update I....confusion in the miners sector with the weak tape indicates further sector rotation that has more to do with window dressing and low level accumulation by the boyz. This can continue for months. Now to the issue all retail traders encounter in a prolonged accumulation.....boredom...That is the goal of consolidation. Eventually they bleed you out of your shares....weak hands to strong... Be AWARE. We should see some more weakness so relax. Watch for that volume increase on a nice reversal day.....maybe like in feb. when overall market was red and miners were green. Play smart and don't be a retail schmuck.

http://news.silverseek.com/SilverSeek/1269469187.php

updateII Nice technical look at the gold charts and tend to confirm my suspicions that I mentioned yesterday that gold and miners will want to at least try and retest the Feb lows...but of course these are only guesses.

http://news.goldseek.com/GoldSeek/1269549444.php

update III 1915....."We are at a tipping point"....listen closely especially last half....great info.

http://www.zerohedge.com/article/ecu-groups-philip-manduca-we-are-tipping-point-and-only-thing-may-save-euro-collapse-us#comments

update IV 2020 Ouch this hurts

http://jessescrossroadscafe.blogspot.com/2010/03/bombshell-whistleblower-steps-forward.html

30 comments:

  1. I hope EGO comes roaring back. I definitely got smacked. Broke Jesse's rules Bought all in with my full position. Mistook a correction/consolidation for a gap. Long term trend is still up though, I am just in longer than I wanted. (Sucks). Totally missed CNAM and DTO. Still like ALC for long term buy. Any thoughts on MKL?

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  2. Hi Joe,
    I read Kli daily but seldom post. I started watching and now play a stock you've mentioned and have done well. Thanks!!!
    Margie

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  3. Hi Joe,

    Do you still recommend buying AUY at 9.50?

    Carol

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  4. carol,

    If you look at AUY chart and historical prices for the past 15 days and 30dma, you notice strong support around 9.85 for AUY, it has tested it couple of times and bounced up from there, if 9.80 does not hold then 9.70 would become the next support.
    http://finance.yahoo.com/q/hp?s=AUY

    Joe

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  5. Joe,
    Are you still in S ? What is your opinion here? Thanks

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  6. Carol,

    If you read my recent posts you notice I am more bullish on base and industrial metals in the current market ( CENX, SWC) than GOLD MINERs. Flow of the big money has been more toward aluminum, palladium miners than gold miners. In updays base and industrial metals gain more than Gold miners, follow the btrend until trend changes. You need to watch the tapes on gold vs other metal miners and the volume for continued trend or reversal of the trend.

    Joe

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  7. Anon,

    I played S from 3.20 to 4. I sold yesterday when I saw 4.10 did not hold. I play very heavy with lots of shares when it comes to stocks like S which has heavy volume, I did the same thing with ALU. I stay with particular stock within different sector as long as the money flow and trend supports it.

    Joe

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  8. Hi Joe,

    What's your opinion on CNAM today, and the near future... your help is always appreciated...

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  9. Anon,

    The answer to your question in regard to CNAM resides in the VOLUME and the action. CNAM to me is a day trading stock due to low float and low outstanding shares, in the near future it's performance depends on price of iron ore and china situation since CNAM is a proxy for Chinese Government. As far as support, it's currently at 7. Today not much volume.

    Joe

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  10. All,

    Please do your home work, lot of the answers I am giving you can be obtained by looking at the tape, charts and taking time to study the patterns.

    Joe

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  11. thx for your input in CNAM Joe...

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  12. Hi Joe - thx so much for your input in CNAM... I've always read all your comments, and do my homework as carefully as possible but on this particular security, and with the dramatic drop in volume today, i'd feel a bit better to hear your input before making a move since it is a fairly new traded stock... thx again, Joe... (btw, I "knew" you since the SKF/Yahoo days... lol...)
    bcbk

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  13. All,

    If you look at overall market today it's up, DOW up almost 100, S&P up 10, how ever certain sectors along with stocks within those sectors are down including Gold miners, that's the story of 2010 market in compare to 2009. We talked about this before, if you do not have the time or interest or know how as far as reading tape, trends, charts,pattern,,etc in individual stocks within sectors THEN either be in SSO or SDS depending on which way you believe the overall S&P trend is currently moving. SSO which is double long S&P ETF has tripled since lows of March 09. If overall market is up then SSO is up and during down days SDS goes up, of course we all know due to relentless up market since march 09 SSO has kicked real butt.

    Joe

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  14. bcbk,

    Good to hear from you, my comment on doing home work was meant toward all viewers with the exception of few regular posters which is why I mentioned "ALL". Stay sharp and my best wishes to you.

    Joe

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  15. Thanks, Joe, I try to stay focused, but this market is merciless... I'm trying to get out of all my positions soon, longs and shorts, and switch to your method of trading this year... it's been really tough, sigh... but hey, we are made of steel, correct??? I keep saying to myself, "emotion out"... wonder where I get that from? lol... thx for being a good mentor...
    bcbk

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  16. Weak tape today for mining sector should continue further ....just watch for the turn day ....should see reversal candle on good volume.....right now play only the gaps ....accumulate a nice core on miners on further weakness but hold your cash otherwise.

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  17. It's painful having AUY this week, but at least I can usually count on GORO to dig it's fingernails into the cliff side..

    If gold keeps falling I'm sure GORO will lose it's grip but even then I expect it will flap it's arms, climb falling ladders, and other Wile E. Coyote tactics to avoid looking like an accordion when it hits bottom.

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  18. alas....the woes of an "investor".....hehehe. sit tight and smile.

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  19. All,

    Take a look at walayat's new article:
    http://walayatstreet.com/

    Joe

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  20. Ya I'm pretty used to sitting tight.. I was holding miners in 2008 also..

    That time it went like 1: Lose a lot of money. 2: Make most of it back while the rest of the market keeps falling. 3: Buy the bottom and profit.

    If only they'd give us a nice easy playbook like that once more.. I would gladly sit through step 1 again!

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  21. The Wayalat article is good but I do have some skepticisms. (Just finished this post and I probably sound like a deflationist. Really I'm on the fence but I don't see how I can leave the fence until at least some of these concerns are addressed. That said only point 5 actually addresses something Wayalat said, I'm a rambler..)

    1: Unfunded liabilities.. Spending on Social Security, Medicare, war, and so on would inflate along with the monetary base.

    2: Getting anyone to buy govt bonds if the inflation becomes broadly apparent. Simultaneous devaluation of all major currencies would help to mask it but they'd still have to desperately fight every rally in precious metals. Also as Kli has suggested oil must stay reasonably low or..

    3: Personal income.. Prices in general cannot rise above "what the market can bear". If consumer prices, gasoline, or taxes go up not accompanied by an increase in incomes, the consumer will be forced to tighten/deleverage even more. Will they start massively hiking the minimum wage? Won't that cause chaos while all the people laid off from their now-bankrupt small business all apply at the same McWalmart Sachs store? If this wage vs price war breaks out it's time to invest in wheelbarrows.

    4: Fictitiously priced assets.. How long will people live in houses for free? Markdowns are impending even if everyone gets their 2007 income back tomorrow, since so many borrowers lied about said income anyway thanks to the banks' see-no-evil policy. Many mortgages are resetting from teaser rates as well, another reason we'd need to make not just another bubble but a bigger one than last time to make the present debt load sustainable.

    5: He says the political will does not exist to allow the painful process of deleveraging. This is true only until it isn't, the politicians could simply wait until a sufficient excuse comes along to pass the buck for descending into secular depression. If the republicans take back the govt in 2012 the democrats will make a great scapegoat for spending us to death. If the repubs get enough seats this year to confound Obama then the republicans themselves can be the scapegoats for causing political gridlock and tying the hands of the democrats who "tried to prevent the depression". Politics is like a game of hot potato, political will can change quickly depending on who's holding the potato.

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  22. Hi, Joe. Not sure which of Walayat's new articles you are referencing. Thanks - Nancy

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  23. Joe...someone asked about ZSL...I trade in a marginal acct, and have an IRA acct(transfered all 401K 2+ years ago into it as well. We left our company...closed out all 401Ks...and transfered them ...as well as IRAs..I swing trade shares in both and of course I trade calls/puts in the margin acct. BTW...I also bought SMN shares yesterday...nice day today...:) TXB

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  24. Morla, Nancy

    Walayat's new article march 23rd, " Stealth Bull Going into May 2010 Prediction". It's a long article and by pass most of the article and scroll down in that article till you get to the following which is what I wanted you to read and the reason I want you to read it is to see whether what he says is going to be VALID or not, here it is:
    "SUPPORT / RESISTANCE - Previous resistance of 10730 now becomes support. With the Dow at 10,888 immediate resistance lies at 11,000, that is likely to contain the momentum behind this rally, which suggests that the Dow may mark a corrective trend to target the 10,730 support level therefore implying a bearish outlook for the Dow during early to mid April. Below 10,730 there exists a wide range of support levels all the way down to 10,500 which implies that any price action lower into this range will be choppy and very volatile. On the upside resistance over 11,000 exists at between 11,900 and 12,000, therefore implying a significant correction could take place from that level.

    MOVING AVERAGES - The 200 day moving average contained the Jan- Feb 2010 correction and continues to act as a distant support for the bull market. The shorter 50day moving continues to act as short-term support and as a significant correction measuring move for future corrections, current support stands at 10,400, rising to 10,500 by mid April and therefore providing further support to the zone of between 10,730 to 10,500 which could see intra-day spike lower towards the MA at approx 10,500.

    PRICE TARGETS - Upside price targets resolve towards 11,000 and 11,900 to 12,000, then 12,500. Downside price targets resolve towards 10,730 to 10,600 with a possible intra-day spike as low as 10,500.

    MACD - The MACD confirmed that the last correction was in line with that which transpired during June / July 2009. Whilst the current rally has been strong, however because of the amount of time taken to rise, it has not pushed the MACD into a particularly overbought state. Neither does any negative divergence exist. However on the expectation of a narrowing in momentum for this years stocks bull run, I do expect a more compact MACD pattern which implies stocks could correct BEFORE they reach an overbought extreme, which implies a correction towards the lower end of the MACD range (indicated) could be imminent.

    VOLUME - Volume has remained WEAK throughout the rally, which has been one of the main reasons why so much commentary has been bearish during the past 12months. However it is perfectly inline with that of a stealth bull market and also implies that this rally is STILL NOT being bought into. So all of the talk of hyper bullishness investor sentiment since, well summer 2009 basically remains 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.

    SEASONAL TREND - There is a strong seasonal tendency for stocks to rally into Summer then correct in October followed by a sharp rally into December. The seasonal trend is increasingly matching actual chart trend and the unfolding forecast for the next 2 months for a rally into Mid May 2010."

    Joe

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  25. Morla,

    Do not focus on the economic or political analysis of walayat's article, although it's an ok read and can be argued and discussed, focus on market analysis portion of it regarding 2010 and let's see whether it becomes fact or not. Walayat is one of the few analysts who has made more correct calls from stock market perspective in recent yrs than most other analysts. That how ever does not mean his call going into may or rest of the yr is going to be correct, time will tell but it's worth the read.

    Joe

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  26. Wayalat's scenario may or may not play out as Joe says but it fits perfectly with what I feel is the feds attempt to do CPR to a destroyed ponzi....IMO they will crush the dollar to maintain this strategy and if you watch the update III above it all fits in line with the eurozone too.....in short they aren't going to stop until they have exhausted every attempt through the press and monetization.

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  27. by the way Morla speaking of politics, some one asked me and a colleague of mine how I define politics and this was my answer:

    Politics is the ART of making one's SELFISH desires SEEM like national interest.

    Joe

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  28. one more thing everyday that goes by is either a day of improvement with this strategy (the positive) .... or ..and obviously this to me is more likely to me we are just drawing nearer to a day of reckoning.

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  29. Walayat's analysis focuses on DOW and that's fine since lot of non-precious metal stocks especially industrials are also part of DOW. If you want to equate DOW numbers to S&P take 1/10 of DOW numbers and add about 80/85 points to get S&P.

    Joe

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  30. EGO hit 11.67 and bounced right on up. Good girl!

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