Wednesday, May 19, 2010

THE DAY AFTER update I

Another message sent to the politicians last night that the torch and pitchfork crowd is growing. Rand Paul's landslide win for the senate was an eye opener. Joe Sestak's win over Arlan in Pennsylvania was another anti-incumbant message. Sestak was a 3 star admiral at one time before he was busted down by Cheney for not supporting the invasion of Iraq. Will this change the careening car on the road to economic destruction? NO NO and triple NO. The die is cast. These are wheels that have been set in motion for many decades and must be fulfilled. The unanswerable question is how it plays out. Will we have a complete breakdown into social chaos as the public convulses with the reality of their lost illusions? Can the technology available maintain enough monitoring of the public to prevent any organized uprising ( I believe it can). Will personal crimes and lawless outbreaks become increasingly prevalent as the need for survival increases and the inability to fund local police worsens? (again I believe yes). Will Greece and Thailand become the norm??? Are they even over?? Or are they just beginning?

I really have a lot of questions today. So perhaps we should deal with what we can deal with....the market. Watch the CLDX for the risk play. My miners have been beaten down..... so you know whats coming. As usual relax and enjoy the game. Lets hope they run this to the fear extreme. I have cash and will wait. On the other hand my core is heavy now so I can accept profit too. Right now there is a discussion on the U.S. not dealing with OUR structural deficits....can you imagine the audacity?? To question our own viability. What is this world coming to. After all we are the world's reserve currency......so buy gold and lots of it....gl gang

Bottom line .......everything happening right now....means lots of printing as far as the eye can see coming.....they will print until the cost of commodities ie essentials toppels the whole pyramid....ANY pullback in gold is to be bought.

update I..... (Reuters) - Gold slid more than 2 percent on Wednesday, the biggest one-day fall since February, with traders cashing in profits from last week's record high as equity and commodity markets fell on deepening euro zone worries.

After soaring to a record $1,248.95 last week on a rush for safety from European buyers, gold has now shed $40 an ounce in three days as investors sought to realize some profits as other markets spiral lower, a decline worsened by technically based selling as the market crosses key triggers.

Industrial metals fell even harder, in line with further losses for copper and oil, with palladium slumping nearly 8 percent to its lowest since late March as volatility in the euro, Germany's partial short-selling ban and global equity losses all fed fears of worse times to come.

"When we hit all-time highs, everybody thought gold was going to shoot straight up to the moon. Now, a lot of people have decided to take their profits, and the big banks just put in sell orders that hit the market," said COMEX gold floor trader Dominick Cognata.

"I don't think the selling is over yet. I think we still have another $20 on the downside."

57 comments:

  1. BRUTAL beatdown....BRUTAL.. can the goldbugs survive this........hehhehehehe......OMG watta game.BTW only nibblin

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  2. doubled PAL position at $3.6 ... re-bought SSRI shares I sold at 19.1 ... miners look like free candy. someone please hold me back from buying too much.

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  3. this looks very fearful.....i'm startin to like..finally ....beat the hell out of um

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  4. Getting crushed...add more? This is when I freeze up!!!! Someone hit me!!

    Sister was wondering about ALU (as am I), I know it went to a trade a few weeks ago, any hope for it? Unlike Sister, I managed to only get ALU and not the pleasure of S as company to offset the pig. ;-)

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  5. No miner positions, Kli. Just bought Pal at $3.50. What else looks extra cheap? Thanks for all your help. JD.

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  6. Suggestions still remains the same, get out if you can't afford to lose in the algo slaughterfest. Pick up some physical PM and Alpo on strong pullback and reduce debt burdens.

    S&P will test 200 dma, the question is will it bounce to extend the Chinese water torture or force a final bottoming across a few more support levels form the fiasco of 2 weeks ago.

    If you are still a glutton for punishment hold cash and wait for the puke session to place your Ponzi casino bets. My eye is still on PBR, GFI, JAG, PAL and SWC.

    For higher beta spec plays, CNAM on very short term bounce basis, and CLDX is highly speculative with a firm belief there is sufficient liquidity when they announce wait for the pullback when the rest of the market is in bloodbath mode to consider entering.

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  7. RED is right this is a forced capitulation of the winners here due to the germany move....add carefully here....major danger. Velocity is NOT picking up due to fear......this is a fkn disaster.......will they turn it ......watch out......hold 50% cash in your portfolio.....watch for evidence of a turn big reversal candle.......Art Cashin JUST repeated what Joe DROKE Red have ALL said Velocity is the key......they are sellinng winners to cover margin.....

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  8. Hey Red - that didn't unfreeze me at all!!! ;-)

    Luckily I rolled the dice a few weeks ago and unloaded most of what I had. So what I'm getting killed on was just a hunting expedition last week with PAL and JAG. Though I did get a little more than I'm used to. Got some GG, and a few others yesterday as well.

    just tough seeing PAL down 20%.

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  9. Any particular signs we should be looking for to detect forthcoming reversal in PMs and miners? We are obviously in the "throw the baby out with the bath water" phase which will provide a great entry on PMs and miners.

    What do we look for to have some degree of confidence that the selling of quality is done?

    Thanks.

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  10. Kneejerk, I have same ? for the board...

    looks like swc bounced with volume...

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  11. Thanks for the recommendations Red, Kli. Had all on my watch list except GFI and PBR. Have all the physical PMs I going to buy unless they get ripped more than 10% from today's prices. Thanks to both of you. JD.

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  12. The German government decision to ban naked short selling of German bank stocks, euro-zone bonds and credit default swaps along with the massive unwinding of the long Euro/ short dollar trade will cause massive margin calls and liquidity problems in the near term. Paper gold and miners will also be sold. Central Banks and anybody with a clue will still hold and accumulate physical gold.

    The bounce off the 200 dma around 1100 means this will painfully drag out at each support level until everybody pukes.

    Another biotech broke critical support and should also get slaughtered in the downdraft for possible high beta play is CVM.

    As for paper precious metals, if gold can't hold 1085 then 1040 is in play. As for SWC if it breaks 12 before the market pukes then 10 is in play.

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  13. guys check out this brand new site
    elliott-wave-education.com

    its loaded with free educational content and a "road map" going forward a few months.

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  14. Thanks Red. Yeah, I've been slaughtered in CVM, which I bought at much higher levels last Fall. Thank goodness it was a relatively small position, but the percentage loss is hard to watch every day.

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  15. kli, good call on the 12.34 SWC support ... was too distratced to act - in at 13 with a tight stop.

    PAL looks like it's consolidating. have a beefed up position in it with stops at 3.3 - hoping for a 1-2 day market reversal up :)

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  16. I'm as bearish on the market as they come - but right now, there ought to be enough new shorts for a fun short-squeeze - especially on the miners. May we be with the squeeze and the squeeze with us. Amen.

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  17. Wonder if the action for the day is over, I'm guessing it is because I submitted limit orders to the broker a little after 12 (Eastern) and went to lunch. Came back to find out he wanted to know if it could wait until 1:30 to execute. I assume he left anyway and don't see them in there yet.

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  18. Are you serious ... what kind of broker is that? Did you have to morse code the order?

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  19. Common give Homer's one-eyed courier pigeon some credit. The fun is just starting actually. Those algos are evil, heheheh.

    http://finance.yahoo.com/echarts?s=^GSPC+Interactive#chart3:symbol=^gspc;range=5d;indicator=bollinger+rsi+stochasticslow+macd;charttype=candlestick;crosshair=on;ohlcvalues=0;logscale=on;source=undefined

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  20. Red, what type of fun do you see in that chart? (as opposed to homer, my broker executes trades in seconds ... so I could actually take advantage of your insights :) )

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  21. Morse code, please, nothing so primitive. And it has two eyes red, it's just legally blind in one.

    In his defense (not that I'm in the habit of defending and broker) this is my wife's 401K and we are more swing traders than day so it's okay if there are some delays as we can't watch day to day anyway. I am getting sucked into this again though as it is fascinating to watch. I will have to point out to him (again) I could move it to a completely self managed account. I see the trades going in now, the pigeon stopped going in circles and made it. Feel sorry for me folks. ;-)

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  22. Watta slaughter today in the PMs just a frikn massacre.....wathappend......I know....I was in all cash until 11am then bot like a mofo......wish wish wish it were true.......bloody wednesday.....do you know how many hedges barfed up billions today.......answer a fkn ton of um....thats what the algos do

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  23. Better or worse, I have more PAL. A few cents away from more JAG. Trade shoulda been on your support call for SWC, took off from there. I'm good for a little while, might get some GFI on more weakness to bump up the gold holdings.

    Red - I assume when you speak of paper gold/miners getting rocked, you are not speaking of the beginning of the end. Just "near term" action as you put it result of the euro zone issues?

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  24. Triangles (symmetric and descending), algos are riding them for all they're worth before the final puke of this leg.

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  25. This is definitely NOT the beginning of the end, that is sometime between 2011-2013.

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  26. Homer ....red is correct at least one more puke may await before a nice fib retrace...on the other hand my "core" is waaayyy to heavy for this day......yowza...watta game. Will only day trade now until we see evidence of a real reversal

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  27. Red,Kli ... "final puke of this leg" referring to the final drop below / retest of the 200 DMA (app. S&P 1100)?

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  28. btw, would be nice to see PAL close at or above 3.40 --- would make me feel a bit better about my position

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  29. Gotcha. I was kinda light (just couldn't stare at a green 30% and not take profits two weeks ago). And every time I waited, for more down, I ended up chasing. So I'm good as long as this ain't the end, will get some more on another puke.

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  30. GDX bounced off the 50ma......spx bounced hard off 200ma.....lot of trapped shorts and longs here......set up if for a short squeeze tomorrow but only a guess....

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  31. Anyone got some ice for my ass........

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  32. I can get you a dildo made of ice --- should work just fine

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  33. Sister - where are you? ALU is actually green...LOL!!! Haven't seen that for a while!!!

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  34. Wolf you have to set aside what you like, hope or believe and focus on cold hard facts of both the charts, algos, Central Banks and Dr. Evil. I let what I believe interfere and got hosed on the CNAM entry; the partial exit hurt but it was on cold hard facts.

    Most visitors here and even larger hedge funds cannot stand up against the 11 second algos and the GS algos sitting on top of the exchanges with direct fibre links. If you hope to survive stay out, otherwise adapt to a guerrilla tactic of fights you have a chance at winning, when the algos are to busy doing the piranha on Kli's ass.

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  35. red...joe said stay outta cnam.....he leaned on it heavy........ALU is bottoming out......good entry..

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  36. So that's what kli is here for, a distraction for the piranha's!! We definitely should all chip in for some ice for him.

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  37. red where did you try to enter CNAM

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  38. Red the amex specialist in charge of CNAM is former GS....he's a mthfkr........

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  39. Red, advice taken ... I don't take my own opinion too seriously (even though I usually would fare better if I did). As regards PAL, given today's range bound trading (after noon) and PAL's January low at 3.41, I was looking for an indication that PAL may be given a short-term reprieve from the beating. We'll see tomorrow if it collapses further .... my money is on a rebound (for better or worse)

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  40. The entry on CNAM was about a month ago around 8 and the heavy partial exit was around 6 as I stated a few days ago, still hold a meaningless token. Don't trade that often on those type of high betas where the the specialist are playing both sides aggressively especially with the bid/ask spread and range 4.35 to 4.89. But that is nothing compared to what the algos are being allowed to do in the broader market, no fast plunging means grind lower until you get the necessary daily technicals in place to successfully do your bullish crossover on the daily S&P.

    As for Joe, he should have leaned on CNAM heavily, all that did was take some coin from the GS specialist managing CNAM, who probably isn't very happy a seasoned hyena came into his sheep farm.

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  41. Joe says good.....and you are right ....Joe found out who he was and yes....he isn't happy with joe but power understands power

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  42. As for ALU good swing trade for the bullish reversal coming up along with S&P, chance you could see the bottom around 2.25-2.30 before possibly making it back to 3.25 then 3.75, a good 40%-60% play over the next 2 months especially after they get done shaking down the Germans. Entry is up to who wants to play, scaling in slowly now, wait until the plunge go heavy and scale into the reversal, or wait until a reversal is confirmed and scale in or go heavy.

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  43. Message from Joe to the board.....he is pleased with the participation and says that feel free to discuss whatever you wish....(I am sure that I will hear if the line is crossed)

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  44. This comment has been removed by the author.

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  45. Can one of you look at the Nas futures tonight and tell me if down another 19.8 pts in the AH seems strange? Could that be right? I know I may sound stupid...but...thoughts?

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  46. Sell it All, Risk of 'Major Crash': Dow Theory’s Russell
    Published: Wednesday, 19 May 2010 | 5:12 AM ET Text Size By: CNBC.comDiggBuzz FacebookTwitter More Share
    The author of the closely-watched Dow Theory Letters newsletter warned investors to get out of US stocks now in a report published Tuesday.

    Richard Russell wrote that there is a risk of a “major crash” if the Dow Jones Industrial Average falls below the May 7 closing price of 10,380.43, according to several media reports.

    "If I read the stock market correctly, it's telling me that there is a surprise ahead," Russell wrote. "And that surprise will be a reversal to the downside for the economy, plus a collection of other troubles ahead."

    "Do your friends a favor. Tell them to “batten down the hatches” because there’s a hard rain coming," Russell warned.


    Bulls & Bears
    Current DateTime: 02:12:56 19 May 2010
    LinksList Documentid: 37227943
    Gold Investors Should 'Rush to the Exits': Dennis Gartman
    March 2009 Lows Will Be Tested: Strategist
    I'm Still Bullish on This Market: Portfolio Manager
    Morici: Lessons from Greece for the United States

    "Tell them to get out of debt and sell anything they can sell in order to get liquid. Tell them that Richard Russell says that by the end of this year they won’t recognize the country. They’ll retort, ‘How the dickens does Russell know—who told him?’ Tell them the stock market told him."

    Russell said he has seen problems with the Dow since April

    "If business is even better than expected, then why is the Dow down over 600 points?"

    I AGREE! TXB

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  47. I don't agree with Gartman...he is off base many times.

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  48. Kli/Red, thank both of you for your help today.

    I've been absent from the Board for some time and missed Joe. Is everything OK? JD

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  49. I have tried to post this several times...hope this time it goes through...
    ©2010 Bloomberg News

    May 18 (Bloomberg) -- Investors should sell U.S. stocks because the market is at risk of a "major crash," Richard Russell, editor of the Dow Theory Letters newsletter, said in a note to subscribers today.

    The decline would follow should the Dow Jones Industrial Average and Dow Jones Industrial Average fall below their May 7 levels, he said. They have risen 1.3 percent and 2.8 percent versus their closing levels that day.

    "If I read the stock market correctly, it's telling me that there is a surprise ahead," Russell wrote. "And that surprise will be a reversal to the downside for the economy, plus a collection of other troubles ahead."

    The market started showing signs of deterioration in early April, including a shrinking number of stocks reaching 52-week highs and falling stocks outnumbering rising ones, he said. Russell, 85, has published Dow Theory Letters every three weeks since 1958 and posts daily market commentaries on his website.

    Dow Theory, which stems from observations made by Wall Street Journal founder Charles Dow during the late 1800s, holds that moves by the transportation average must be "confirmed" by the industrial measure, and vice versa, to be sustained.

    The Dow Jones Industrial Average fell 6.9 percent during the four days that ended May 7, sinking to 10,380.43, the lowest level since Feb. 26. The transportation gauge closed at 4,298.12, down 11 percent in four days. Downgrades of Greece, Spain and Portugal helped trigger the decline as the prospect of a sovereign default in Europe undermined investor confidence.

    "If the two averages violate their May 7 lows, I see a major crash as the outcome," Russell wrote. With the exception of gold companies, Russell advised readers to "get out of stocks now, and I don't give a damn whether you have paper losses or paper profits."

    --Editor: Nick Baker



    Read more: http://www.sfgate.com/cgi-bin/article.cgi?f=/g/a/2010/05/18/bloomberg1376-L2MW2B1A74E9-10.DTL#ixzz0oQF4y7Du

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  50. I see now they are both posted...sigh...the second post is the full story...SORRY guys and gals!

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  51. if you are trying to comment and can't get through ...you have to sign up or resign up for your google account....so i have been told.......sorry

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  52. I'll take that challenge. Still chuckling over red pointing out kli's ass is piranha bait providing a distraction

    I'm probably going to start averaging down ALU, at the very least it'll show a lower percentage lost!!! (how sad is that?).

    Never made the JAG trade, partly because of the two hour delay for the order to be entered plus I'm really cheap and don't chase. Shame though as I did want some more gold miners back in the account, I got three yesterday but only lightly loaded. Thoughts are at least one more puke?

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  53. Hi TXB - I double posted as well. Sometimes it takes a while for the post to hit...looks like you can always delete on if you wish.

    Thanx by the way...

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