Friday, May 14, 2010

THE LIMITING FACTOR update III

Many comments have been made on this site and others regarding the Ponzi's limitations. I have always felt that there would be a cliff at which the Ponzi would one day go off of. If you wish..... a Black Swan. As we all go to work each day consuming massive quantities of fossil fuel energy, few ever really consider just what goes into maintaining this incredible supply of this cheap commodity. We are told that essentially as Americans it is our right to use as much oil as possible........it is our right. Our right as Americans to create false wars and conflicts to maintain this vast thirst for oil a god given right. After all 800 military bases in 125 countries makes us the largest empire in history. Never mind we are spending over 100 times the ammount China (our feared nemesis) spends on "defense". Did you ever stop and think? Even for a moment? Why is it necessary to have 800 military basis in 125 countries for DEFENSE? Defense of WHAT? Our shores? No.....sorry.....doesn't quite add up. Especially when you consider that we can drop a Cruise missile on the doorstep of any new Hitler. We do this to maintain a stable supply of cheap resources from developing countries. They know the game. They are there watching our troops and bases in their countries. They know our multinationals aren"t there to build churches and hospitals. They know the dictatorships that we imposed in their countries living in oppulent palaces aren't there to help them from their poverty. The game is oil and resources. This is what drives the economic engine. It is the "game". Right now as we take for granted our "affordable" oil, a catastrophe is unfolding in the gulf. All the kings horses and all the kings men cannot put this back in. Sooner or later the impact of this man vs Nature event will unfold. I believe its a potential Black Swan.....certainly a very Brown one. Enjoy your day and gl.

http://www.boston.com/bigpicture/2010/05/disaster_unfolds_slowly_in_the.html

update I Theres money in them thar hills

http://finance.yahoo.com/news/Silver-Wheaton-First-Quarter-prnews-3838765782.html?x=0&.v=1

update II (Reuters) - Gold ended flat on Friday after an early rally to record highs fizzled, but the metal posted its fourth straight weekly increase as jittery investors fretted that a $1 trillion European rescue could be too late to contain debt contagion.

Bullion prices jumped early in choppy trade, then dropped. The slump deepened as investors sold gold to cover losses in sliding equities, commodities and crude oil markets, traders said.

"There is some margin-related selling in gold triggered by losses in other assets. And the technical indicators are very high, it's not surprising that we would have consolidation today," said Bill O'Neill, partner of New Jersey-based commodities firm LOGIC Advisors.

O'Neill cited a rise in the relative strength index for gold's weakness. Gold's RSI rose to above 70 this week -- considered an overbought signal by technical analysts.

Sales of European and U.S. coins, bars and exchange-traded gold funds surged this week, and open interest in COMEX futures rose to an all-time high on Thursday.

Spot gold fell as much as 2.4 percent from its earlier record high of $1,248.95 an ounce, and was at $1,230.05 an ounce at 3:59 p.m. EDT (1959 GMT), down slightly from $1,231.83 late in New York on Wednesday.

U.S. gold futures for June delivery on the COMEX division of the New York Mercantile Exchange settled down $1.40 at $1,227.80.

Gold investors cashed in gains as U.S. stock markets fell more than 2 percent, oil tumbled 4 percent and base metals fell sharply. .N

"There are losses being made in various places, and potentially there is a need to lock in some profits to offset some of the losses being created in commodities generally... and in other sectors," said Saxo Bank senior manager Ole Hansen.

"When you start to see other sectors start to give way as we've seen here, that will have a natural spillover effect."

update III complements of chuck

http://jessescrossroadscafe.blogspot.com/2010/05/why-financial-engineers-fear-and-even.html

29 comments:

  1. SWC filled its first gap......i think i will play

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  2. fill the gap on swc today at 14.39???? oh my my...do ya think???

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  3. Who pulled the flush handle GDX/Miners?

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  4. To keep things balanced, you were also fearing black swan with Swine Flu, the Icelandic volcano eruption, and I believe Dubai back in November.

    Let's see how it plays out before assuming the worst case scenario...

    Just guessing, but when the Ponzi breaks it won't be anything anyone sees coming, it will come out of the blue and its impact will be felt before anyone has a chance to speculate.

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  5. Swine flu over done......Iceland volcano still on the table....especially Katla. Dubai was never a legit Swan. This is a true calamity in the gulf....whether its a swan like a large meteor, solar flare, or massive west coast earthquake......NO. because it will be an extended event with repercussions months and years out. Chicken littles are seldom right, in this case ......cluck cluck...;-)

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  6. Obama finally popped off about oil leak...its definitely getting more black swanish....

    noticed crxx is holding green..only bio stock to trade over million shares over last cple mos cosistently.....they are profitable...dd required...

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  7. WTF SLW GREEN..........shiiiiit......push it dowwwwwwwwn

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  8. Ssri gap filled? Slw stronger than atlas

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  9. Anyone rolling the dice on TIVO?

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  10. Just wait one minute, must sell, never got slw or ego sold yesterday... have to live with not letting go of SWC...what a move back!!

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  11. The ecology and economy along the Gulf states will be impacted for years.

    We are still suffering from the hangover of last weeks fiasco. The artificial V reversal from buying futures only pushed out the bottoming process. Daily RSI and Stochs on the S&P have to bottom out which lowers means the velocity of money will continue to decline in the short term leading to more draconian printing press options in the intermediate term.

    If 1120 lower daily bollinger does not hold we can quickly test the 200 dma at 1100. Looks like the trading computer have been reprogrammed and at the very minimum you need to make another bottom to work out the remaining stochs and rsi. Any move up is not sustainable at this point until daily charts complete the bottoming process. Sitting sideline on mostly cash to scoop up some butchered stagflation plays.

    Physical PM holding strong making entries into miners difficult.

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  12. Agree Immred, the reversal turned out to be a dupe, I was travelling this week so held very little last couple days, have no positions on here. There are no entries I would take with conviction outside of just gaming it, not worth the risk IMO.

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  13. great pullback on miners here......I would not be surprised to see GDX fill gap at 50.24...but cant count on it.....SLW is a pisser....no reload there today..fortunately I still have core in it....SSRI gave me a reload today. still 40% cash

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  14. SSRI has another unfilled gap at 18.85......

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  15. Joe said focus on PAL if it gets to 3.60 mon or tues....he is on it

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  16. how bout some T/A on Pal ???

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  17. I agree on the lower target for PAL, would not bite here. In this environment I will react to confirmed reversals, not assume them.

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  18. Don't feel right moving on anything today.. Maybe we can finally get a red Monday to provide better entry for some miner or other.

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  19. Well.....my core is full. Will overweight on mon or tues at 200ma

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  20. Oh I'm sitting on some SSRI, GORO, and GRZZX I just mean to say my cash today is gonna remain cash.. I mean if they're taking it down this hard while the physical is still at nosebleed levels, what if paper gold does correct?

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  21. Joe hit CNAM today at low......he said yest they would try to touch 5.....

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  22. Morla May get a nice buy on miners mon or tues...be patient...you have a core. be happy.....btw gold not at nose bleed ......back tested its new high.......so we will see. AT 1300 I get more nervous

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  23. The real monster sleeping is silver......may get one more buy but 24 is next

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  24. Joe said they would squeeeze CNAM at 5...and he nailed it

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  25. Yeah the charts do seem to leave $1400-$1500 gold open before any meaningful correction, but gold is up near it's highs while the miners tumble on their own. A down equity market next week plus even a slight gold pullback could line everything up nice. Just my amateur instincts talking as always.

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  26. Good job Joe on CNAM, it still a great high beta intraday play. Should top out nicely on the hourly then take another dump. Definitely good short term trading fodder at the moment with decent long entry points based on the hourly, only problem is volume especially when you are competing with Joe the hyena for the bottom prime rib chomps.

    Volume will continue to be the problem with the rest of the market. General market still looks like crap especially with daily S&P crossover in the Stochs. You need a close above 1180 in the next few days to confirm a trend change which I doubt, otherwise testing support levels to find the bottoming low. If market continues lower, margin calls and forced liquidation of precious metal positions could bring those sectors down.

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  27. Red make sure you read "the" article in Goldseek today.....

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  28. which article, the one about paper comex doesn't have anything to do with physical, the new short the Euro and buy gold carry trade,

    The margin calls will be in the paper precious metals market the physical, no one in their right mind would put their good stuff in a position to be liquidated, heck it's not even on most of the books as assets.

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  29. Nice write up by Jessie on the hui..

    http://jessescrossroadscafe.blogspot.com/2010/05/why-financial-engineers-fear-and-even.html

    thought you might enjoy..if you haven't already..

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