Saturday, July 31, 2010

YEN AND YANG

The dark and the light, the good and evil, the balance of Power, and the balance of nature, all unending forces that will remain long after our dust is spread on this earth. Our finite time here is for a purpose if we choose, but out time here will be measured not in what we accumulated physically, but what we left spiritually. In other words each of us will depart this earth in our current protoplasm form....that is guaranteed....it is a certainty...you cannot resist that force of nature. You do get the choice on how you finish this journey, and those are the issues that provoke a more compelling dialogue for us. Time will not be kind to any of you, but just remember as individuals, what ever time there is can make an incredible difference in someone else's life. You can change the world....at least for that person and yourself. I have two projects I am about to complete and hope to have more time for trading and posting....gl gang.


You can't have a light without a dark to stick it in. ~Arlo Guthrie

Friday, July 30, 2010

FRIDAY FRIGHT

Miners appear to continue to be trying to form a bottom. I would guess if the market makes a short term correction here then the miners will be a nice trade. Say mostly in chash though. Physical gold is a buy. and I love Silver long term.

bloomberg...Growth in the U.S. slowed to a 2.4 percent annual rate in the second quarter, less than forecast, reflecting a larger trade deficit and an easing in consumer spending.

The increase in gross domestic product compared with a median forecast of 2.6 percent of economists surveyed by Bloomberg News and follows an upwardly revised 3.7 percent pace in the first quarter that showed a jump in inventories, according to figures from the Commerce Department today in Washington. Business investment climbed at the fastest rate since 1997.

A slower pace of growth means employers may be reluctant to hire workers and more likely to keep a lid on prices in order to boost sales. Federal Reserve Chairman Ben S. Bernanke last week said the central bank is prepared to take further policy actions if the world’s largest economy “doesn’t continue to improve.”

“The economy is muddling through,” Ethan Harris, head of North America economics at Bank of America-Merrill Lynch Global Research in New York, said in an interview after the report. “We’re probably not going to see a really strong number for a while. We need to see some pickup in job growth.”

Stock-index futures extended earlier losses after the report. The contract on the Standard & Poor’s 500 Index fell 1.2 percent to 1,084.2 at 8:55 a.m. in New York. Treasury securities climbed, sending the yield on the benchmark 10-year note down to 2.92 percent from 2.98 percent late yesterday.

Thursday, July 29, 2010

PUMP DAY

Wednesday morning's email from gold general Jim Sinclair - under siege yet again from the troops in the "community" - prompts today's post.

Mr. Sinclair often writes with a war mentality, pitting the gold community against the evil bullion banks - and a good chunk of the rest of the financial world. Don't get me wrong, I think there is plenty of evil out there (it seems that on Mondays, following a meeting or conspiracy of the assembled dignitaries in the G20, my investment accounts take the hit). But apparently a good chunk of the "community" gets its panties all in a bunch every time gold takes the hard hit.

That is because nearly 10 years into the secular bull market in the rebellion against dishonest monetary systems, a casino mentality remains intact. (That casino mentality which was so well formed through the previous 20 year secular bull market in paper assets- stock certificates, bonds, derivatives, etc.) This includes a great number of self-described gold bugs in my opinion. In other words, the "community" does not tend to believe its own nonsense on balance. If they did, they would see opportunity or at least sit tight during these phases that have been all too common all the way up since 2001.

There is an opportunity to own value shaping up. I suspect the usual casino players will fail to capitalize while the minority capitalizes once again. Missed the last buying opportunity this space identified in euros? Well, another opportunity is on the way. Who will capitalize and who will be immobilized by fear? Gold in USD is also presenting an opportunity fact, name me a major developed society that is not tramping out its currency for the purpose of manufacturing politically expedient economic growth and I will show you a society of relative value from an investment standpoint. There are those in ascension and it is no coincidence that those are targets for my investment dollars in the big picture.

For now, gold is a monetary value anchor. In a world of eroding confidence in politicians and policy makers who use official paper and digital money, gold represents value; nothing more, nothing less. Still, it is always great to exchange confidence paper for value when value goes on sale. You do not buy gold when everybody loves it. You understand who you are and if you perceive that your personal situation is in need of this value anchor, you buy gold when the public hates it. You buy it when the speculators (ultimate casino patrons) are dumping and you-know-who is buying or buying to cover.

The battle was won in 2008 when an uber-opportunity presented. Most failed to capitalize (thank you deflation proponents) and then snapped back faster and better than most other assets and asset classes. Is a drop to 950 (on radar for many months in NFTRH) out of the question? No, nor is the long term battle line at around 870 for that matter. Do you think anyone who has understood what is and is not monetary value since 2001 is pained by these numbers? They are just numbers and they are 150-200% above cost basis in many cases. And by no means are these downside targets shoe-ins in my opinion.

So whatever you do, sit tight and realize that what is happening now is all part of the game and for some it is a time of opportunity as value goes on sale. It is really no more complicated than that.... seeking alpha

Wednesday, July 28, 2010

YOU'RE GETTING WARMER

Rick's picks generally has good advice on PM's and I like his call here. Wish I had been a little smaller on my core for this last down move, but alas tis only money. This is not a one inning game. Look for a continued effort to keep gold under control and pressure to remain on the miners. Be smart and accumulate physical gold and silver. gl

Has Gold’s price action been getting you down lately? Take heart, since relief could come as early as today or tomorrow in the form of a Hidden Pivot support at exactly $1140.10. For the last two weeks, that’s been our downside target for the correction begun five weeks ago from around $1266, although it didn’t begin to emerge with clarity until the August Comex contract plunged from $1208 right after the July 4th holiday weekend. At yesterday’s lows, the correction so far had knocked 8% off the price of gold relative to the all-time high recorded on June 21. Even though we’d been expecting this weakness, we told subscribers at the outset that we didn’t foresee anything more serious developing.

Although we avoid chiseling such predictions in stone, we’ve advised cautious bottom-fishing near $1140, using a tight stop-loss of $2 or less. Our confidence is high that there will be a tradable bounce from the target, although a decisive breach would be the equivalent of the groundhog seeing his shadow – i.e., six more weeks (or so) of winter. Please note that we’ve identified a secondary target at 1155.00 that may have been fulfilled by yesterday’s 1156.90 low. However, our gut feeling is that this Hidden Pivot support will fail, sending the August contract down to the more important one at 1140.10.

from ricks picks

Tuesday, July 27, 2010

I THINK I HAVE HEARD THIS BEFORE

Your screwed. But don't despair, its only the game, and we don't own double etfs that are going to zero, but your core of gold and silver miners should be no more than 40% of you portfolio. We are a in a war with the boyz and they are the casino so read your article.



Fofoa has just published another thoughtful paper with the title: Red Alert: Gold Backwardation!!! http://fofoa.blogspot.com. It raises the question nobody has apparently raised before: “Is the dollar bidding for gold, or maybe gold is bidding for dollars?” And it gives an amazing answer: the gold basis has been screwed and it has been giving bogus signals for more than a year. We have likely had backwardation all this time but it has been stonewalled. There is no real gold market any more. Goldman Sucks is playing with itself. Most trades are bogus, sales as well as purchases. Leases ditto. What Goldman Sucks couldn’t get away in a falling market, it can in a rising one.



There are other metrics beside the gold basis that the market has developed in the meantime. One such is GOFO = $ LIBOR – GLR (the gold lease rate). On the face of it, GOFO cannot ever go negative. If it did, it would mean that the risk in borrowing gold is greater than the risk in lending dollars, even though the latter has infinite counterparty risk. But there is no counterparty risk in borrowing gold! That’s a telltale for you. Nasty negative GLR, nasty negative GOFO, shut up, both of you!



Fofoa says that the dollar needs voluntary bids from private physical gold holders to survive. But the pool of real bids is bone dry and cracking. Dollar liquidity is just a cheap façade. As the gold price rises slowly, nervous Nellys, suckers, and other weak hands will relinquish bits and pieces of the yellow precious which will keep the merry-go-round in motion. Gold-bidding for dollars can be kept alive on a life support system. Indefinitely? Pretty well. But Fofoa says that Goldman Sucks has shot itself in the foot.



I can add little to these speculations, but I would like to note another telltale: the fine Goldman Sucks has agreed to pay Uncle Sam. On July 19 The New York Times carried a story entitled: Goldman Employee Denies Fraud. Just days after Goldman agreed to pay $550 million to settle securities fraud claims, a midlevel employee of the bank, Fabrice Tourre, has filed a 13-page denial and sought dismissal of the case. Smell the stink? Goldman agrees to pay more than half a billion while a vice president, central to the case, challenges the charges. To add another little twist, according to the NYT article, Goldman Sucks released a batch of old e-mail messages of Fabrice Tourre, who calls himself “Fabulous Fab” for his skills in selling “Frankenstein bonds” (= bonds going bad fast) “to widows and orphans” on the tarmac of Brussels airport, designed to damage Mr. Tourre’s case in the continuing S.E.C. investigations. Who is fooling whom here? Is it possible that the fine they levy and pay is just another case of check-kiting? But why would they do such a thing? Why, a bogus fine could deflect suspicion away from a much bigger charade in misleading the public, namely, to cover up goldbackwardation!Meanwhile all we can do is to sharpen our tools in sleuthing to uncover the contango. I started a Seminar in Australia in 2008 on backwardation and the secular vanishing of the gold basis. By all standards, it was a huge success. We continued in 2009 and were making plans to reassemble in Sidney, Australia this year in November. I am sorry to give notice that the 2010 The Third Annual Seminar on gold backwardation and the last contango is cancelled, due to the greed of the professional organizers of the event. Rest assured, however, that the research is going on, and if we get a decent invitation, we shall make up for the cancelled event, with further revelations!



In the meantime, here is a hint to whet your appetite. Fofoa should refine his indicator GOFO as follows. GOFO = LIBOR – GLBR, where GLBR = gold lease bid rate, i.e., the rate which bidders are willing to pay for leased gold to the bullion bank. It should be somewhat greater than GOFO as it has been defined up to now. (Why?) It is true that GLBR is not publicly quoted, but a little bit of sleuthing should be able to produce a proxy. Then GOFO will tell you how profitable the gold carry trade is, or is getting. Negative GOFO tells you that it is making a loss and net shorts in gold are under water or will soon be.



But there is another indicator equally important for successful sleuthing. (Goldman Sucks, are you listening?) I shall call it COGOFO. Here it is: COGOFO = LIBBR – GLOR. Here LIBBR = London interbank bid rate; it is the rate at which a bank in the London market is willing to borrow from another. Furthermore, GLOR = gold lease offered rate; the rate at which bullion banks are willing to lease out gold. Again, LIBBR is not in the public domain, so due diligence is required to come up with a reasonable proxy.



Meanwhile all we can do is to sharpen our tools in sleuthing to uncover the contango. I started a Seminar in Australia in 2008 on backwardation and the secular vanishing of the gold basis. By all standards, it was a huge success. We continued in 2009 and were making plans to reassemble in Sidney, Australia this year in November. I am sorry to give notice that the 2010 The Third Annual Seminar on gold backwardation and the last contango is cancelled, due to the greed of the professional organizers of the event. Rest assured, however, that the research is going on, and if we get a decent invitation, we shall make up for the cancelled event, with further revelations!



In the meantime, here is a hint to whet your appetite. Fofoa should refine his indicator GOFO as follows. GOFO = LIBOR – GLBR, where GLBR = gold lease bid rate, i.e., the rate which bidders are willing to pay for leased gold to the bullion bank. It should be somewhat greater than GOFO as it has been defined up to now. (Why?) It is true that GLBR is not publicly quoted, but a little bit of sleuthing should be able to produce a proxy.
from goldseek

Monday, July 26, 2010

LOVE THOSE MONDAYS

From bloomberg.....the pump continues...on the run with two projects to complete. Will poat on comments later. gl gang

Gold, little changed in New York today, may gain on speculation physical demand for the metal will increase.

Futures were little changed week last week and are trading 6.4 percent below a record set last month. Most European banks passed stress tests designed to show their ability to withstand a financial crisis, lenders and regulators said July 23.

“Physical demand is supporting the market,” said Afshin Nabavi, a senior vice president at bullion refiner MKS Finance SA in Geneva. “In the past two weeks, every time there’s an attempt back toward the $1,185 level, there is good demand coming. The investment side has been relative quiet.”

Gold futures for August delivery lost $2.10, or 0.2 percent, to $1,185.70 an ounce at 8:17 a.m. on the Comex in New York. Prices declined 40 cents last week. Gold for immediate delivery in London was 0.2 percent lower at $1,186.50.

Bullion fell to $1,189 an ounce in the morning “fixing” in London, used by some mining companies to sell output, from $1,190.50 at the afternoon fixing on July 23.

Futures are up 8.3 percent this year and set a record $1,266.50 an ounce on June 21 as investors sought to protect their wealth against the European debt crisis and on concern that the global economy may slow. European regulators found that seven of the 91 banks subject to evaluations need to raise a combined 3.5 billion euros ($4.5 billion) of capital.

ETF Holdings

Assets in the SPDR Gold Trust, the biggest exchange-traded fund backed by bullion, were unchanged at 1,302.05 metric tons on July 23, according to the company’s website. Global holdings of the metal by ETFs were little changed at 2,064.4 tons on that date, according to Bloomberg data from 10 providers.

“There is physical buying coming in, as prices are below $1,200,” said Chae Un Soo, a Seoul-based trader with KEB Futures Co. “In the longer term, gold has the potential to power higher again, as signs of an economic rebound are likely to provide an excuse for investors to build up positions as an inflation hedge.”

Silver for September delivery in New York fell 0.4 percent to $18.035 an ounce. Platinum for October delivery gained 0.3 percent to $1,548 an ounce. Palladium for September delivery was 1.3 percent higher at $473 an ounce.

Impala Platinum Holdings Ltd., the world’s second-largest producer of the metal, faces a strike by more than 18,000 workers after talks to resolve a pay dispute failed, South Africa’s National Union of Mineworkers said. Members will vote tomorrow on whether to strike, the union’s spokesman Lesiba Seshoka said by phone today.

To contact the reporters on this story: Nicholas Larkin in London at nlarkin1@bloomberg.net; Kyoungwha Kim in Singapore at kkim19@bloomberg.net
.
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Saturday, July 24, 2010

GANDHI

Peace will not come out of a clash of arms but out of justice lived
and done by unarmed nations in the face of odds.

" What does it matter to the dead, the orphans,
and the homeless whether the mad destruction
is wrought under the name of totalitarianism or the holy name of liberty or democracy?"

Democracy and violence can ill go together.
Evolution of democracy is not possible if we are not prepared to hear the other side.

A coward is incapable of exhibiting love; it is the prerogative of the brave.

Hatred ever kills, love never dies; such is the vast difference between the two.
What is obtained by love is retained for all time. What is obtained by hatred proves
a burden in reality for it increases hatred.

Non-cooperation with evil is a sacred duty.

Nonviolence is the greatest force at the disposal of mankind.
It is mightier than the mightiest weapon of destruction devised by the ingenuity of man

The weak can never forgive.
Forgiveness is the attribute of the strong.

What kind of victory is it when someone is left defeated?
You must be the change you wish to see in the world.

It may be long before the law of love will be recognized
in international affairs. The machinery's of government
stand between and hide the hearts of one people
from those of another.

To forgive is not to forget. The merit lies in loving in spite of the vivid
knowledge that the one that must be loved is not a friend.

You assist an evil system most effectively by obeying its orders and decrees.
An evil system never deserves such allegiance.
Allegiance to it means partaking of the evil.
A good person will resist an evil system with his or her whole soul.

Nonviolence is not a garment to be put on and off at will.
Its seat is in the heart, and it must be an inseparable part of our being.


Violent means will give violent freedom.

However much I may sympathize with and admire worthy motives, I am an
uncompromising opponent of violent methods even to serve the noblest of
causes.

What difference does it make to the dead, the orphans, and the homeless,
whether the mad destruction is wrought under the name of totalitarianism
or the holy name of liberty and democracy?

Man and his deed are two distinct things. Whereas a good deed should call
forth approbation, and a wicked deed disapprobation, the doer of the deed,
whether good or wicked always deserves respect or pity as the case may be.

"Like the bee gathering honey from the different flowers, the wise person
accepts the essence of the different scriptures and sees only the good in all religions."
Hate the sin and not the sinner is a precept which though easy enough to
understand is rarely practiced, and that is why the poison of hatred
spreads in the world.

Nonviolence and cowardice are contradictory terms. Nonviolence is the
greatest virtue, cowardice the greatest vice. Nonviolence springs from
love, cowardice from hate. Nonviolence always suffers, cowardice would
always inflict suffering. Perfect nonviolence is the highest bravery.
Nonviolent conduct is never demoralizing, cowardice always is.

Destruction is not the law of humans. Man lives freely only by his
readiness to die, if need be, at the hands of his brother, never by killing him.
Every murder or other injury, no matter for what cause, committed or inflicted on
another is a crime against humanity.

Man's nature is not essentially evil. Brute nature has been known to yield
to the influence of love. You must never despair of human nature.

It is the law of love that rules mankind. Had violence, i.e. hate, ruled us
we should have become extinct long ago. And yet, the tragedy of it is that
the so-called civilized men and nations conduct themselves as if the basis
of society was violence.

Power is of two kinds. One is obtained by the fear of punishment and the
other by acts of love. Power based on love is a thousand times more
effective and permanent then the one derived from fear of punishment.

Whether humanity will consciously follow the law of love, I do not know.
But that need not disturb me. The law will work just as the law of
gravitation works, whether we accept it or not. The person who discovered
the law of love was a far greater scientist than any of our modern
scientists. Only our explorations have not gone far enough and
so it is not possible for everyone to see all its workings.

It is good to see ourselves as others see us. Try as we may, we are never
able to know ourselves fully as we are, especially the evil side of us.
This we can do only if we are not angry with our critics but will take in good
heart whatever they might have to say.


Gandhi was once asked what he thought about western civilization. His
response was: "I think it would be a good idea."

Friday, July 23, 2010

INDIANS SAY SHOVE IT

July 23 (Reuters) - Demand for gold in the world's biggest consumer is picking up ahead of festivals that begin next month, but an earlier-than expected spurt in buying has led to a supply glitch as overseas sellers are understocked, bankers said.

Demand for the precious metal is subdued during June and July as rural consumers, who account for 65 percent of India's total gold consumption, prefer to divert funds to buy seeds and fertiliser during the sowing season.

However, a sharp drop in prices as a result of weak U.S. inflation numbers triggered buying, taking sellers by surprise.

"A couple of them are now taking seven days to supply gold, this problem exists with some of them, so we prefer to buy from those who will deliver us promptly," said a official with a state-run bank dealing in bullion.

Indian gold demand is set to pick-up for the busy for the festivals, starting with Raksha Bandhan on Aug 24, and extending till Dhanteras in November, the single-biggest gold buying day.

"There was less demand in May and June, but due to a price fall in July demand rebounded, creating supply constraints," said another official from the state-run bank, which imported 40 tonnes of gold in the last fiscal year.

Gold XAU= struck a two-month low on $1,175.35 an ounce on July 20, a level last seen on May 21, prompting traders to stock for the upcoming festivals. The yellow metal was trading at $1,197.35/1,198.35 on Friday.

"Monsoon time sees lower inventory levels with suppliers, but this sizeable correction created demand in the market, which suppliers and refiners were not ready for," Pinakin Vyas, assistant vice-president treasury with IndusInd Bank, a large gold importer.

Gold demand picked up on a good note at the beginning of the year but slackened as the year progressed with gold prices hitting all-time high of 19,198 rupees on June 8.
This year analysts forecast higher prices at the end of third quarter on the back of heavy buying overseas on concerns about economy, with Indian prices following suit.

"The demand has been good even before festivals and buyers are very receptive at lower levels, if prices sustains these lower levels below $1,180-1,190, I see the current trend going ahead," said Lokesh Kumar Agarwal, chairman, Brijwasi Bullions and Jewellers, which caters to markets in Uttar Pradesh and Bihar.

On Friday, gold MAUc1 on Multi Commodity Exchange (MCX) was at 18,345 rupees per 10 grams, up more than 22 percent on year

GIVE A SUCKER A BREAK

Those already outraged by the president’s health care legislation now have a new bone of contention — a scarcely noticed tack-on provision to the law that puts gold coin buyers and sellers under closer government scrutiny.

…Section 9006 of the Patient Protection and Affordable Care Act will amend the Internal Revenue Code to expand the scope of Form 1099. Currently, 1099 forms are used to track and report the miscellaneous income associated with services rendered by independent contractors or self-employed individuals.

Starting Jan. 1, 2012, Form 1099s will become a means of reporting to the Internal Revenue Service the purchases of all goods and services by small businesses and self-employed people that exceed $600 during a calendar year. Precious metals such as coins and bullion fall into this category and coin dealers have been among those most rankled by the change.

So every time a member of the public sells more than $600 worth of gold to a dealer, Piret said, the transaction will have to be reported to the government by the buyer…

Help may be on the way. If this does not get fixed, it really could be a mess, not just for coin dealers, but for any small business. ABC continues:

…Rep. Daniel Lungren, R-Calif., has introduced legislation to repeal the section of the health care bill that would trigger the new tax reporting requirement because he says it’s a burden on small businesses.

Even the IRS thinks this could be a mess:

The office of the National Taxpayer Advocate, a citizen’s ombudsman within the IRS, issued a report June 30 that said the new rule “may present significant administrative challenges to taxpayers and the IRS.”
from Seeking Alpha.

"There are two times in a man's life when he should not speculate: when he can't afford it and when he can." Mark Twain

Thursday, July 22, 2010

PRECIOUS METALS TRADE

Ira Epstein gives a nice summary on the current state of the PM trade. You make your own decisions of course, but I tend to agree with him. I will take my core beating and continue to short term trade it with a negative bias. I still like nat gas trades so gave fun gang.

The weekly chart confirms the bearishness of the daily chart.



The Slow Stochastic Study has downside momentum. In my last report I pointed out that when the Slow Stochastic Study loses its embedded status, it is not uncommon for prices to retreat back towards or to the 18-Week Moving Average of Closes. This as you can see is what took place since my last Gold Report, written on July 8th.



The Swingline Study has a pattern of lower highs and lower lows. That is bearish and will remain so until 1218.8 is taken out or a new pattern forms over the next couple of weeks.



Prices are trading under the 18-Week Moving Average of Closing Prices, which confirms the Swingline bearish chart pattern.



The Bollinger Band Bottom comes in near 1107.8.




Summary



I am in the bear camp and am looking for prices to encounter resistance on rallies. In order for me to shift this stance, prices on the weekly chart would have to get up and over 1218.8.



I do not recommend selling short into oversold conditions as seen on the December Gold chart. Rather, I would prefer to see a rally develop that alleviates the oversold condition or wait to see if Stochastics embed.



Assuming the downtrend stays in place, I see an immediate downside target of 1171.7, the Bollinger Band Bottom as seen on the daily chart. Longer term, a challenge of the Weekly Chart’s Bollinger Band Bottom near 1107.8 remains an overall target if the daily and weekly chart trends stay in bearish alignment.

http://news.goldseek.com/GoldSeek/1279778820.php

Wednesday, July 21, 2010

STABILIZATION

This is the absolute goal of current policy, unfortunately this will show signs of continued weakening with our predicted intervention with QE. For now those investors need to take advantage of what is offered. Our hope as investors is to be able to buy energy (NBR SGY ATPG etc) on pullbacks....accumulate and of course the miners ANV EGO GG GFI SLW SSRI. I continue to look for intermediate term weakness opportunities in these until QE becomes necessary to prop up the Ponzi. Enjoy and pay attention to the T/A from the commentors on here.

By April H. Lee, MarketWatch
NEW YORK (MarketWatch) -- Gold futures held steady at about $1,190.00 an ounce Wednesday as traders look to Federal Reserve Chairman Ben Bernanke's testimony later in the day and results from bank stress tests in Europe on Friday.

Gold futures for August delivery rose $2.70 to $1,194.40 an ounce in electronic trade on the the New York Mercantile Exchange.

Gold had ended below $1,182 an ounce on Monday, the weakest close for a most-active contract since May 21, pressured by diminished fears over inflation and debt problems in Europe. Read more about Tuesday's successful bond auctions here.

But confidence was hit by a rocky debt offering by Portugal, where the country paid more than twice as much interest to sell $1.62 billion in one-year bills Wednesday morning compared to three months before, according to Reuters.

Investors are also looking to results of European banks' stress tests to be released Friday.

"Publication of the stress tests on European banks could change the sentiment of market players again," said Eugen Weinberg, an analyst at Commerzbank in a note Wednesday. "Should the results prove worse than feared, the demand for gold as a 'safe haven' could pick up again."

Bernanke's testimony on economic and monetary policy before Congress is scheduled to start at 2 p.m. Eastern.

Tuesday, July 20, 2010

WHEN WILL QE SAVE US?? update I

Keneysian policies to this point appear to be failing.......ok......that's fairly obvious. As many obververs of the Fed have repeatedly stated, Ben has rabbits ready to attack. However I will make a wild prediction that the next rabbit that he pulls will be another round of QE. Perhaps it will take a form that is not readily available, but be prepared nevertheless. Essential goods and services are not exploding at this point and that gives the Fed the cover they need to begin the final charge to glory. Into the valley of death rode the 600th. This will be an all out frontal attack. The panzers will roll over all doubters, once and for all demonstrating the true power of the central banks. Public confidence once thought to be destroyed, SHALL BE restored and everlasting economic life given...AMEN.

Perhaps that is a tad hyperbolic, but I believe you are getting the picture. The current attempts to control the ponzi as evidenced by the gold and silver markets can only be characterized as pitiful, but then never underestimate the short term effects of the ponzi. It must be perpetuated or all is lost. Therefore if one wishes to argue that the worlds central banks will choose austerity and currency strengthening with budgets returned to normalcy, then you do not know how a ponzi ends.

It will end only when all avenues of escape have been exhausted and brothers and sisters we are not even close. PRAISE THE FED HALLELUJAH....we will see the glory of the presses in all of their splendor. Now the real question for us is how and when this miracle will occur. My guess as a false prophet is DUNNO...but it will. I defer to the cycles for a better approximation. Therefore look to later this year October for things to get ramping....count on it. Politically this country will not accept all out deflation, and that is what is coming. They will fight it to the very end...and yes...they will be destroyed....by nature, by the only force that can stop the insanity. The toll on us will be formidable, but we WILL survive, and in the end...we will be stronger.(i hope)

Blasphemy? No, it is not blasphemy. If God is as vast as that, he is above blasphemy; if He is as little as that, He is beneath it.
- Mark Twain, a Biography

update I http://temo1051.blogspot.com/

Monday, July 19, 2010

DROKE ON THE KRESS REPORT

Kress accurately predicted the top of the secular bull market in 2000 with his cycles as well as the credit crisis of 2007-2008. He also called the bottom in March 2009 and, more recently, forecast an interim top for April 2010. For the last 10 years, Bud has published a series of interim reports – roughly once per year – called “Special Editions” (available through his SineScope advisory service, 15 Phoenix Ave., Morristown, NJ 07960). Previous Special Editions have provided important context for the bear market of 2000-2002, the recovery bull market of 2003-2007 and the most recent credit crisis and bear market. His Special Edition VII published in 2008 entitled, “Final Opportunity 2009,” projected that the following year 2009 would be the last year to begin a long term liquidation of conventional equities for those who failed to do so at the all-time double high in 2007. Special Edition VIII of 2009 was titled, “Remaining Five Years: 2010-2014” and discussed the potential for a bear market in 2010, a mini cyclical recovery bull market in 2011, and a once-in-a-century three year period of historic change, turmoil and dislocations to begin in 2012 and persist until 2014.



His latest Special Edition (the ninth one) has just been released and is entitled, “Last Bull Standing 2011.” It may well go down as being the most important one yet, for if Mr. Kress is correct in his prognosis, we will soon enter the final phase of the financial market recovery as the last of the key yearly cycles peaks next year.



Kress predicts that 2011 will culminate the dominance of the U.S. financial and economic system and begin a depression, the magnitude of which will be matched only by the one of 1930-1933. As such, the time between now and late 2011 will represent perhaps the last opportunity for investors to build (or rebuild) balance sheets and portfolios before the final crashing phase of Kress’s namesake 120-year cycle.



In his latest report, Kress reminds us that sound market analysis is more critical today than has typically been the case. As Kress points out, “Due to the inherent buy mind set bias, a dearth of sell recommendations exist. The critical time began at the turn of the [21st] century, and has become even more so in the most recent years.” He further asserts that “Identifying the time cycles determining the market’s directional behavior is the most basic, objective and unbiased means of predictive value to mitigate risk and enhance return thereby avoiding the debilitating pitfalls of conventional wisdom.” While Special Edition IX contains much of the information provided in the previous two, it also provides an insightful overview of the most influential yearly cycles and their inter-related positions and contains a series of graphic exhibits depicting the cycles’ positions to each other, making it easy to see how the cycles will influence the coming years.

The final part of the latest Special Edition contains an overview of how an investor should position his portfolio with a view to the upcoming 120-year cycle bottom. Kress covers commodities, ETFs, options and equities, the weighting of each position being determined by the individual investor’s risk/return position and personal preference.



He lays special emphasis on gold, observing that it tends to benefit from the two economic extremes of hyperinflation and hyperdeflation. For the 14-year period of hyperinflation from 1967 to 1981, gold increased approximately 23 times in terms of price. After its correction following the 1980 price peak, it bottomed in early 2000 – 14 years prior to the 120-year cycle low scheduled for 2014 – and also at the beginning of economic contraction and deflation. “If gold increased at the same level in the current fourteen years as it did in the previous fourteen years,” he says, “gold has the potential upwards of $6,000 an ounce.” Kress advises that gold shouldn’t be traded but should be administered with the same mindset as with conventional equities during the previous half century, namely “hold for the long term and buy on corrections.”

In other words....don't make it so complicated gang.....gl

http://news.goldseek.com/ClifDroke/1279461600.php

Friday, July 16, 2010

CHANNEL BREAK IN THE MINERS

Intraday channel break in the GDX. Look for continued short term weakness on GDX for a test of the 200ma.....hehehehe. Its the game my friends. If we recover the channel today, then I am VERY bullish on the miners.

Continue to keep you eye on SGY and Nat gas stocks here.....could be trying to form a longer term bottom.

Great read on miners.

http://seekingalpha.com/article/214674-appraising-gold-miners-equity-risk?source=dashboard_stocks-sectors

Thursday, July 15, 2010

RICK'S RANTS

Nothing very interesting on the crystal ball today....look for pullback then more upside on SnP. Should be some nice gap trades..

We took a deeply skeptical view here yesterday of the buying frenzy that has pushed stocks sharply higher since early July. Not surprisingly, some market observers think the rally is the real McCoy – an entirely normal upthrust in an ongoing bull market. “The only question is, when will you admit you’re wrong?” asked a contributor, Keith P., in the Rick’s Picks forum. “[At Dow 12000? 14000? 18000? I’m just wondering. Will you be like the rest and say everyone else is wrong the whole way up -- or at some point will you say, yes, I was wrong? I’m not bashing you at all,” he continued. “You kept us in many long positions the whole way up. You’ve done a great job. I’m just saying I expect new all-time highs in the market within a year or two. There will be no crash, no depression. We are not on a gold standard like in the 1930s.”


While we’re genuinely pleased to hear that Keith evidently has made hay taking our sometimes bullish advice, we couldn’t disagree with him more about the nature of the rallies; for they are a fraud, a key piece of the epic deception that would have us believe it is possible to extricate ourselves from a black hole of debt by taking on yet massive new quantities of debt. Ultimately, America faces certain bankruptcy, we replied. “The Federal Government’s ability to create money from thin air may obscure this fact for yet a little while longer, but [we] seriously doubt that it will bring us new all-time highs in the stock market — or even a fleeting instant of real prosperity.”

Financial Sociopaths

Many who responded to Keith’s post evidently share our pessimism, but there was one reply in particular, from “Red Will,” that we would like to share with you. He write as follows: “…Keith’s comments and many like them come off as ‘punk-ish’ to me. The ’90’s bull market was largely based upon fraud. This past decade’s bull market was nearly entirely based upon fraud. There is deterioration and disintegration all around us by nearly every measure, and yet the Manipulation Cartel still has a strong ‘pimp hand’ at the moment. Again, if you want to argue that yet another round of the timeless shell game will be perpetrated and that we will see new highs as a result of their Herculean efforts in the name of fraud, then I can buy that and trade it accordingly. I don’t rule that out, not in the least. Nearly two decades of fraud-watching have taught me to be prepared to be astonished by the next offering of BS that these financial sociopaths will bring forth. But please don’t characterize it, as Keith seems to, in a way that makes it seem like we’re on the road to a standard bull market that’s based upon your organically produced, garden-variety macro expansion cycle.

“That’s what his ‘minimalist’ commentary implies to me, and maybe that’s from reading so many posts like his all over the Internet for over a decade. The notion that the market ‘always knows’ [what lies ahead] should be put to bed at this point. I told people to get out of Tech in December 1999. I started to buy the metals producers in 2004. I also told them to not buy into the housing bubble [from] 2005 onward. I also told them in the summer of 2007 to ‘collar’ their portfolios, at the very least. I’m a small-timer with limited resources. I don’t claim to be a sage. I don’t have a research team and quant teams, and I certainly don’t have access to insider scuttlebutt. I’m the father of four young ones and thus have only limited time. How is it that I could see imminent danger time and time again and that Wall Street, their financial media, and the enabler/co-conspirators in D.C. were explaining it all away? I’ve seen round after round of deceived clowns pointing to indexes that were being manipulated higher on fraud, and they all think that they will get out in time. Needless to say, they rarely want to discuss the market after ‘distribution and markdown’ have occurred. Keith is asking Rick to admit that he’s ‘wrong’ because the Cartel momentarily has the upper hand. At best this ranks [Keith] as a lazy commentator in my book.

In the Matrix

“If it weren’t for all [of the factors] that I enumerated and much, much more in my previous comments, the indices could/would(?) likely be less than half of what they are right now. Remove the FED from buying debt from…well, the FED, and where would things be right now? Price Keith’s beloved Dow [Industrials] in something besides our currency that suffers from relentless and severe ‘domestic abuse,’ and tell me how well ‘investors’ have fared over the last decade. So with that I’ll bring things to a conclusion by reminding Keith and his merry band of ‘buy-and-hold-ers’ that they need to raise their hands for two toasts when ‘the Dow’…vaults to new ‘highs.’ First off, they’ll be nominal. But more importantly, Keith and friends will also be celebrating the triumph of the Manipulation Cartel and the perpetuation of their Matrix. Here’s to Keith and his permabull brethren! Brothers! May they forever be comfortably numb.”


***



Information and commentary contained herein comes from sources believed to be reliable, but this cannot be guaranteed. Past performance should not be construed as an indicator of future results, so let the buyer beware. There is a substantial risk of loss in futures and option trading, and even experts can, and sometimes do, lose their proverbial shirts. Rick's Picks does not provide investment advice to individuals, nor act as an investment advisor, nor individually advocate the purchase or sale of any security or investment. From time to time, its editor may hold positions in issues referred to in this service, and he may alter or augment them at any time. Investments recommended herein should be made only after consulting with your investment advisor, and only after reviewing the prospectus or financial statements of the company. Rick's Picks reserves the right to use e-mail endorsements and/or profit claims from its subscribers for marketing purposes. All names will be kept anonymous and only subscribers’ initials will be used unless express written permission has been granted to the contrary. All Contents © 2010, Rick Ackerman.

Wednesday, July 14, 2010

BE AWARE

Look for a short term attempt to supress miners and gold as the ponzi maintains its effort to prop the world fiat system of reinflation. To accomplish this in at least a pseudo-camouflaged stated, one cannot allow gold to break out of its channel.

Reuters) - US crude edged higher to trade near two-week highs above $77 on Wednesday, as stock markets rallied on the back of upbeat quarterly U.S. corporate results that also signalled increasing fuel demand. US crude for delivery in August CLc1 advanced 8 cents to $77.23 a barrel at 0100 GMT after touching $77.37 on Tuesday, the highest price this month, but still about $10 lower than a 19-month peak above $87 reached in early May. Global daily oil demand will increase by 1.35 million barrels next year to 87.84 million barrels per day, the International Energy Agency said on Tuesday in its monthly Oil Market Report, compared with demand growth of 1.77 million bpd expected this year. The 2010 forecast was revised higher by 80,000 bpd.


(Daily Telegraph) - The June inflation figures made for sobering reading. Retail price inflation fell to 5pc, down from 5.1pc in May, but economists had expected to see it fall to 4.9pc. The rise in core inflation, from 2.9pc to 3.1pc, was of even more concern. Apart from lone hawk Andrew Sentance, the Monetary Policy Committee (MPC (A050540.KQ - news) ) is gambling on the stuttering economic recovery stifling inflationary pressures but the markets seem far from convinced. The pound rose a cent yesterday as traders concluded that interest rates could rise sooner rather than later, if inflationary pressures persist. According to one leading retailer, there could be a lot worse to come. The MPC, he argues, is being naive by assuming that the inflationary effects of the VAT rise will not be felt until the rate rises to 20pc in January. Many retailers no doubt eager to boast in January that they have frozen "VAT" will quietly start raising prices in September, he predicts. Add the weak pound to the mix (retailers typically buy from Far East suppliers in dollars) and he expects to see high street prices rise by 5pc.


(Bloomberg) -- Silver held in ETF Securities Ltd.'s European and Australian exchange-traded products rose 1.4 percent to a record 28.517 million ounces yesterday, according to the company's website.


(Bloomberg) -- Platinum prices may face months of declines, possibly losing more than $200 an ounce with a "major reversal" under way, according to a technical analysis from Commerzbank AG that cited trading patterns. Platinum, used in auto catalysts, has fallen about 13 percent since touching a 21-month high of $1,756.25 an ounce on April 27. The metal traded today at $1,533 an ounce after rebounding 2 percent last week, the first weekly climb in three.


(Bloomberg) -- Palladium's surplus will shrink 62 percent this year on increased usage by carmakers, according to VM Group and ABN Amro Bank NV. The excess supply of platinum will increase, they said. Palladium demand will fall short of supply by 217,000 ounces this year, down from 578,000 ounces in 2009, the researcher and the bank said today in a report. Consumption by the car industry will advance 15 percent to 4.6 million ounces, they predicted.


(Xinhua) -- The gold price in Hong Kong went up 153 HK dollars to open at 11,185 HK dollars per tael on Thursday, according to the Chinese Gold and Silver Exchange Society. The price is equivalent to 1,205.25 dollars a troy ounce, up 16. 49 U.S. dollars at the exchange rate of one U.S. dollar against 7. 79 HK dollars.

http://news.goldseek.com/GoldSeek/1279112400.php

Tuesday, July 13, 2010

HOW DO YOU PAY YOUR VIG??

I like the below article, but I will take its premise a step further and speculate on the game. Right now there is a need for central banks to control the gold price, and to do this requires physical metal. There are a number of countries in trouble with ratings, and even though they may not want to, a significant "power" may suggest that they can remedy their situation by using their gold reserve to pay their vig that is due. After all the PTB could really care less about the position of the partiucular countries longer term status is in the real scheme of power. Greece, Portugal, Ireland, etc. are all second rate players. However they do possess a valuable commodity that the PTB can use as a tool, and of course it is gold. What does a low life street gambler do when they got too deep into the loan sharks....he hocks anything of real value to save a broken arm, or worse. Its the law of the jungle.....or maybe its the law of the international central bank "control game". Of course if you accept that 380 tons of gold showed up out of nowhere on the BIS balance sheets (international gold pawn shop), because gold is suddenly a declinging commodity, then you need to get in another game. As the article will also allude to, the math does not add up.

A swap agreement is nothing more than a sophisticated version of a pawn ticket. The owner of the property leaves his valuable with the pawnbroker. In turn the pawnbroker offers cash against the item's perceived value. If, in time, the owner fails to reclaim the property, ownership transfers to the pawnbroker.


In the case of the BIS and our subject pawner, the gold is left with the pawnbroker, who issues cash -- in this case, probably in the form of euros.

At the moment there's no way of knowing if Portugal is the party pawning the family jewels at the BIS, but I rather doubt that, as some have suggested, the BIS suddenly went from zero tonnes of gold on its balance sheet to (remarkably) 380 tonnes by piece-mealing hundreds of little gold deals with commercial banks around Europe because of the financial crisis. That's a smokescreen. At the same time, Portugal has been identified as one of the European nations in deep financial trouble (a PIIG, if you will). Some analysts believe that Portugal may be the next domino to topple in the European theater


http://news.goldseek.com/GoldSeek/1279001520.php

Monday, July 12, 2010

YRCW

For you risk takers and gamblers, YRCW which hit the low of 0.10 doubled today due to good news on their earning, if you think this has more potential than 0.20 get in,heheee

http://blogs.barrons.com/stockstowatchtoday/2010/07/12/yrc-jumps-30-sees-45m-q2-ebitda/?mod=yahoobarrons

http://www.reuters.com/article/idCNN1218150220100712?rpc=44


http://finance.yahoo.com/q?s=yrcw

DOLDRUMS FOR GOLD

The latest CFTC figures suggest that weak-handed speculators are largely out of the market," says Standard Bank's latest Precious Metals Monthly.

"Much of the shift in the net [speculative] position had come from short-covering, and so it is unlikely that there is scope for much more speculative liquidation in the current environment."

Over in the physical gold bullion market, "The sharp drop to $1200 has seen strong physical buying reappear and scrap sales dwindle," Standard Bank continues, while gold's typical summer lull now looks set to see gold "treading water" in July and August – "all other things being equal".

Nevertheless, "Underlying financial tensions point to a buy-on-dips policy ahead of further inflationary concerns."

Friday saw a further "trickle" of redemptions, notes another London dealer, from the giant SPDR gold ETF – the $51 billion gold-backed trust fund that trades as a stock in New York, Tokyo, Hong Kong and Singapore.

Slipping back to 1,314.5 tonnes, the SPDR's hoard of gold bullion – held at HSBC bank-vaults in London – peaked as June ended at 1,320 tonnes, more 16% greater from the start of the year.

"Debt on government balance sheets and worries that the world could be heading towards a double-dip recession are behind the gold surge," says Charles Cooper at London brokerage Oriel Securities, speaking to The Guardian newspaper.

The fresh threat of economic downturn, he says, means governments "could be tempted to print more money to dig us out of a hole.

"That could precipitate inflation, making gold even more popular as a safe haven."

http://news.goldseek.com/BullionVault/1278942455.php

Sunday, July 11, 2010

CASINO PLAYERS

This is the house's game for the readers of this blog that are wanting to risk their chips on the game. The big boyz purposely play the game of driving you out of your shares. That's why when you are given a gift like ALU at its bottom as called by this blog and some of its contributors, you have to load up with a heavy entry for trade. You have to be patient for these opportunities. As Red says this is a VERY difficult market to trade in. Joe is NOT thrilled about the gold miners here. Long term a core is fine here if you are not a trader. Joe is waiting for the miners to be slaughtered (so be aware). His focus is on the beaten down biotechs and miners like CENX. He feels the SnP could be in a nice trading range for the CENX range of 8-11. AA earnings will be out this week and should give CENX its short term direction. CLDX is on the target range here also. It is beaten to hell. Be aware there is a nice number of shorts that is going to have to cover here. That is the game gang....DCTH is to be watched to so if it breaks 8 then 9 is coming. These biotechs are absolutely for experienced traders only. So the conservative readers stay away from this one. DCTH could have news that drives it through the ceiling in the next few weeks. If not then it will fall again, until approval news comes into play in a few months. gl I will maintain a oore of miners, just beware as several of you have noted, this game is still high risk to the downside and physical gold is your only truly smart play.

in keeping with the theme of this post.

http://www.youtube.com/watch?v=l6eSksEp27U

Friday, July 9, 2010

A GOLD BUBBLE IS HERE

Classic evidence of a gold bubble exists everywhere I turn. It is as clear as water. You cannot miss it. Everyone I talk to says they own gold. In fact I don't hear anyone on CNBC warning me not to invest in gold. No one pooh poohs the idea of owning gold. No one says its an archaeic relic. No one ridicules you for recommending gold. Note the heavy volatility days of the gold trade. Gold moving over 1% in a single day. Look at the miners. Incredible 1.5% moves are not unheard of in a single day. OH....and that parabolic move. Now just disregard the regular channel that the miners and gold are trading in. It has to be parabolic based on all the extreme exitement. My neighbors were over just yesterday begging to buy gold from me to get in on the rush. Its the weekend but if I drive to China tomorrow, maybe I can still get some before we are sold out on the parabolic final blowoff phase of the bubble.

Sorry gang. I have traded more than my share of bubbles, and this is NO bubble.......yet. Will it be? Almost certainly. When? It could be several years before this trade enters the final phase. Can we take a big price hit in the near term? Yes. But do you really want to be in the USD or our Longer term treasuries. Hehehehhehehehe. Speaking of BUBBLES. Read this article and sit back and just don't let these ruthless bastards run you out of your investments. After all that is the game.

http://news.goldseek.com/GoldSeek/1278694495.php

CHANNEL TEST

Lower channel test is going to have to reverse hard soon or we could be heading lower on the miners. I am advising you to pay close attention here. If we see a good green day for miners and gold then the indication is we maintain the channel trade. This is only a technical trade, and that is all you have with trade for now. Its going to break to the upside hard, but that can be controlled for months by the PTB. Hold your core. Look for the tell red or poor market with a hard up gold day.

(Reuters) - Gold prices rose more than 1 percent on Friday, climbing back above $1,210 an ounce, ahead of an expected lower opening among Wall Street stocks, as shorts covered ahead of the weekend.

Spot gold rose to a high of $1,211.10 an ounce and was bid at $1,209.10 an ounce at 1310 GMT, against $1,196.48 late in New York on Thursday.

Thursday, July 8, 2010

JUST SMOKE

No fire here, at least not yet. Fundamentals for those of you in the gold trade appear intact, and strengthening. Refusal of the G20 to "fix" the system of deficit spending in a meaningful way only means more extend and pretend. The clear choice of reinflation is the play, so any pullback in PMs and commods like palladium remain intact at least for the next 18 months. You should use these pullbacks to accumulate, just like the big boyz. Let the weak hands shake out and don't play the game the way the retail sheep do. If you are able to hold a position of cash for the "big buy" of PM's and miners ...then look for October as your best bet for a longer term "buy and hold". Just remember, this game is being totally controlled here and moves here are designed to shake out weak hands. Our question as investors is what will be the cheapest price to buy. There is no way to answer that. We may have already seen it which is why you need a position in the miners. On the other hand my feeling is there could be continued pressure on gold for another couple of months if the SnP bottoms at 950. Look for the gold and miners to turn before the market. If this as confusing as it sounds....then I will reiterate....hold a core here.

Wasn't that sugar trade SGG a honey......out of it here..but looking for a quick reentry.

Also did anyone buy VVUS last week that I mentioned Holy chit......still in it

Wednesday, July 7, 2010

DROKE

Worries over the fragility of the economic recovery continues to haunt investors and dominate the new headlines. The latest headlines point to a widespread expectation of a double-dip recession by later this year. The latest round of worries are focused on potential European debt troubles, soft unemployment numbers and the latest round of U.S. economic numbers that proved to be disappointing to investors.



To give you an idea of the tone of last week's market, the word "fear" led the front page headlines of the Wall Street Journal at least twice last week. Last week saw asset prices across the board hit by panic surrounding Europe's sovereign debt crisis, among other concerns.



Acting against the market recently has been the seasonal tendency for volume to dry up as participation diminishes in the historically slow summer vacation period. A further impediment to the market's continued progress since last year's recovery began is the fact that this the "down" year in the alternate, or 2-year, cycle. And how can we forget that we're in the final years of the 40-year and 60-year cycles. As these cycles enter their respective "hard down" phases it tends to create a drag against the stock market when there isn't a strong counteracting force to create the necessary momentum for stocks, and to some extent commodities, to fight against the cyclical headwinds.



We experienced a strong counteracting force in 2009 with a combination of cyclical and monetary forces that were unleashed simultaneously. The bottoming of the Kress 6-year cycle in late 2008 followed by the peaking of the 10-year cycle in 2009 was partly responsible. Central bank and federal government intervention only added to the forward momentum and propelled stock and commodity prices to vertiginous heights relative to the credit crash lows. This confluence of forces unleashed the second most impressive recovery in over a generation as the S&P 500 Index rallied over 60% from March 2009 until May 2010.



The momentum, both externally and internally, has definitely slowed since this spring and the summer seasonal tendency of low volume has worked against the financial market in recent weeks. The resultant lack of buying pressure combined with negative internal momentum has been sufficient to send the market to lower levels. The downside internal momentum reflected in the NYSE internal momentum indicator series (HILMO) shown below, if it becomes established and if not reversed in the coming weeks, is apt to create a situation not unlike that of the summer of 2007. At that time the dominant long-term and intermediate-term internal momentum indicators established downtrends even as the S&P was making a new all-time high. This internally negative divergence set up the beginning of the last bear market. We'll therefore need to watch the important long-term and interim momentum indicators during the next market rally for signs of a reversal.

http://news.goldseek.com/ClifDroke/1278393641.php

Tuesday, July 6, 2010

POWERFUL PONZI PUSH

Markets had a stealth reverse in overnight futures trading as the money poured from "you know where" into the overseas markets. Is this THE bottom? Maybe, at least for a few days? Sorry for the sarcasm, but if trading this is your bag, then be careful the overal downtrend I fear has not been exhausted for this move. I am only viewing any rips to sell into. I think that treachery will be the hallmark of the market from now on out....until we hit at least the 950 area. Beyond that I have no real firm idea which direction in the short and intermediate term. Gold and the miners are looking ripe for a bounce here and I added to my core friday and today. Also SGG has been showing a nice move off of its collapse and subsequent base. For those wanting a swing trade this one still looks very interesting. I continue to believe that the PTB want to crush the gold trade so be cautious. Keep some powder dry. My core adds are very conservative. ANV EGO GFI SSRI SLW. Watch SGY for an intermediate move also. gl and enjoy.

Monday, July 5, 2010

IT GETS TRICKY HERE

Wayalat's pic.....Dow support failed at 10,300, the stock market was sucked back towards 9,800 which broke which CHANGED the trend pattern that had been in force as of the Mid May analysis i.e. instead of an ABC into early June, the market is now saying that that was the first leg of a larger ABC pattern.

The trend pattern is undoubtedly bearish, but STILL corrective, i.e. the 15% or so downtrend is correcting the preceding 70% advance off of the March 2009 lows.

Elliot Wave Theory - The Elliott Wave pattern of an ABC off of the 5th peak implies a trend towards 9,100 to complete the larger corrective pattern by late July. The alternative which the bears are playing towards is that April was a B wave peak which at the very least implies Dow revisiting the March 2009 lows, at this point I give this a less than 20% probability. Yes the market has weakened, but the correction is still just that a correction.

MACD - Has the opportunity to set itself up for a higher low, i.e. in line with the ABC correction scenario to show positive divergence against the trend.

Price Patterns - Apparently the stock market has broken its neck as per the Head and Shoulders Pattern that signals a bear market. Yes the break below 9,800 is bearish, however one can not conclude bull or bear markets on the basis of one price pattern that turns out to be false more often then right i.e. Look at May to July 09, where we basically have the same price pattern that at the time was signaling a bear market returning to break the March lows, as media stars such as Nouriel Roubini were publically declaring virtually at the very low of the move. The current pattern equally will probably resolve higher just as the majority conclude that the bull market is over on the basis of price patterns. Remember on its own ANY single pattern or technical tool or theory is no better than a coin toss!

Economic Analysis - My economic analysis whilst yet to be completed, paints a picture of economic consolidation rather then recession, i.e. economies consolidate into low growth regimes as they seek to balance deficits against stimulus measures, employing inflation (via QE) as a stealth tax to achieve this, so NO DEFLATION.

Trend Analysis - The bull market's second up trendline broke in early May which signaled the start of the correction phase. Current trend is borderline within a down sloping channel, currently favouring trend within the lower channel.

The market is currently below the mid channel line at 9,750. The best outcome would be for the Dow to rally above 9,750 and then hold this channel line so as to avoid a deeper low along the bottom channel line (9,300ish). On the upside its going to be tough for the dow to break above the upper channel line which should cap any rally.

Averages - 50 day and 200 day are acting as resistance, and I am sure you have all heard of the death cross i.e. when the averages cross. Whilst this is bearish, it is inline for a multi-month correction that could witness several crosses during a trading range thus negating its importance.

Time - Time wise as originally indicated in mid May the correction needs at least 3 months to work out the preceding 13 month rally, Mid May to Mid July is not enough, implies the market is going to continue correcting into early August i.e. within a low end trading range.

Targets - A break below 9,800 targets just below Dow 9,500, then 9,250, then 9150.

Conclusion - The original forecast correction to 9,800 proved too mild, we are in a more severe points correction, however trend wise and time wise we remain within a trading range that seeks to correct the preceding bull run to Mid April 2010, that's a 13 months advance that requires at least 3 months of down time that extends to late July - Mid August for a down sloping range pattern as illustrated by the below graph. The key to the trend for the next month or so is if the Dow is able to climb back above the mid channel line at 9,750. If it does then the Dow will target the upper channel at about 10,550 and remain stuck in this down sloping channel, failure to retake 9,750 targets a trend in line with the bottom channel line which would target a 9,250 low.

http://www.walayatstreet.com/

Saturday, July 3, 2010

HAPPY FOURTH???

Smedley Butler on Interventionism
-- Excerpt from a speech delivered in 1933, by Major General Smedley Butler, USMC.

War is just a racket. A racket is best described, I believe, as something that is not what it seems to the majority of people. Only a small inside group knows what it is about. It is conducted for the benefit of the very few at the expense of the masses.

I believe in adequate defense at the coastline and nothing else. If a nation comes over here to fight, then we'll fight. The trouble with America is that when the dollar only earns 6 percent over here, then it gets restless and goes overseas to get 100 percent. Then the flag follows the dollar and the soldiers follow the flag.

I wouldn't go to war again as I have done to protect some lousy investment of the bankers. There are only two things we should fight for. One is the defense of our homes and the other is the Bill of Rights. War for any other reason is simply a racket.

There isn't a trick in the racketeering bag that the military gang is blind to. It has its "finger men" to point out enemies, its "muscle men" to destroy enemies, its "brain men" to plan war preparations, and a "Big Boss" Super-Nationalistic-Capitalism.

It may seem odd for me, a military man to adopt such a comparison. Truthfulness compels me to. I spent thirty- three years and four months in active military service as a member of this country's most agile military force, the Marine Corps. I served in all commissioned ranks from Second Lieutenant to Major-General. And during that period, I spent most of my time being a high class muscle- man for Big Business, for Wall Street and for the Bankers. In short, I was a racketeer, a gangster for capitalism.

I suspected I was just part of a racket at the time. Now I am sure of it. Like all the members of the military profession, I never had a thought of my own until I left the service. My mental faculties remained in suspended animation while I obeyed the orders of higher-ups. This is typical with everyone in the military service.

I helped make Mexico, especially Tampico, safe for American oil interests in 1914. I helped make Haiti and Cuba a decent place for the National City Bank boys to collect revenues in. I helped in the raping of half a dozen Central American republics for the benefits of Wall Street. The record of racketeering is long. I helped purify Nicaragua for the international banking house of Brown Brothers in 1909-1912 (where have I heard that name before?). I brought light to the Dominican Republic for American sugar interests in 1916. In China I helped to see to it that Standard Oil went its way unmolested.

During those years, I had, as the boys in the back room would say, a swell racket. Looking back on it, I feel that I could have given Al Capone a few hints. The best he could do was to operate his racket in three districts. I operated on three continents.

Friday, July 2, 2010

JOBS JOBS JOBS

The oft repeated mantra of our current state of affairs. Sounds simple doesn't it? All we really need to do is just "stimulate" our country enough to gain back the losses....if nothing else say just ... 50%. That kind of recovery should keep us from going into a full blown depression.

Just one problem. We have a STRUCTURAL job collapse. This is not a run of the mill recession problem. We are NOT in an inventory replacement cycle type of recession/recovery. This is a much greater problem with NO simple solution other than a complete washout. Without a complete destruction of the structural problems that created our current disaster, there can be no recovery. Destruction of the corruption, greed, and political morass is not only imperative, but its unavoidable.

The question is how the phoenix will look that arises. I will pose a simple and worrisome conclusion that I wish would be unthinkable, but I cannot reach a plausible conclusion without this inevitablility. Our current predicament will result in a totalitarian, authoritative regime taking over our democracy soon. By soon I believe within 4 years. To deconstruct the damage to our country, the pain will be enormous and trigger severe instability to social order. Even the corporate media will be unable to hold the social anger at bay. I am not advocating a totalitarian state. It makes me sick to think about it. But it is an evolutionary political process that we brought about by allowing our country devolve as a constitutional democracy. The last administration and current supreme court set all of the necessary roadmaps for the new state. The current administration has continued the path.

Some of us are more sanguine that the eventual outcome will be better as these excesses are destroyed. Certainly only a totalitarian regime could resolve some of these, but my fear is it will be more corporate dominant than ever. If it is corporate dominated, then it is not a true totalitarianism.....and the same issues we have now will continue. Stay tuned it should be an amazing process.

Thursday, July 1, 2010

KILL UM.....KILL UM ALL update I

Get the peons out of the trade. Take their heads off and make sure their mommies can't recognize them. There is no chance sheeple can be allowed to profit from our game. We cannot have a trade occur without a lesson to the weak hands that enter our house. We will decide who can reside in the house of the masters. Therefore I command you to ...........RELEASE THE KRAKEN. Destroy them all.

Sorry.....I cannot help but aid in the hyperbole of the moment. Flushing out weak hands in the market is an age old method of trading the great ponzi. Right now the real game is not only the proprietary trading desks of GS making their bonuses, but a larger game of deleveraging is continuing as we edge into the deflationary abyss. The gold trade is being whacked and can be whacked a lot further. If you gave me a choice on holding the dollar vs gold bullion, it is an easy choice..at least long term. AND for most of you in this environment.......you better be long term. nice read that I highly encourage you to take the time to study.....

The value of Gold has been subject to intense debate for centuries. Nathan Mayer Rothschild was once the richest man in Britain and probably in the world. His company, NM Rothschild, was appointed as the bullion broker to the Bank of England in 1840 and went on to operate the Royal Mint Refinery in 1852. When asked what the value of the barbaric metal was worth, Nathan used to reply, "I only know of two men who really understand the true value of gold—an obscure clerk in the basement vault of the Banque de Paris and one of the directors of the Bank of England. Unfortunately, they disagree.”

N M Rothschild & Sons rose to prominence in areas that included lending, underwriting government bonds, discounting commercial bills, direct trading in commodities, foreign exchange trading and arbitrage, as dealing in gold bullion. It was the brilliance and cunning of Nathan who paved the way for the firm to become the first international banking cartel.

In 1870 the Rothschilds formed the world's second largest oil producer, the Caspian and Black Sea Petroleum Company. The Rothschilds financed DeBeers Diamonds, becoming the biggest shareholder, and financed the railroad system of Europe and the Suez Canal for Britain. By 1905, the Rothschild interest in copper miner Rio Tinto amounted to 30-percent.

NM Rothschild was heavily involved in the gold market for nearly two decades. In 1919, Rothschild was appointed to chair the London meetings of the five principal market makers that performed the daily gold fixing and executed trades on behalf of customers, and as a principal, trading gold directly with customers.

So it was of great interest to bullion traders when on April 15th 2004, with the price of gold trading at $402 /ounce, NM Rothschild & Sons, which had fixed the price of gold twice a day for 85-years, suddenly announced its withdrawal from the London Gold Pool. By withdrawing from the Gold Pool, NM Rothschild was no longer obligated to sell its gold to anyone, including central banks. Were the Rothschilds anticipating some new dynamics that would send the yellow metal soaring to new heights?

Since then, the yellow metal has tripled in value to around $1,250 /oz. Central bankers overseeing emerging economies have become net buyers of gold, and mergers and acquisitions in the gold mining industry have put more of the yellow metal’s supply into fewer hands. Also tilting the balance into gold’s favor is the biggest explosion of the global fiat money supply in history.


http://www.financialsense.com/Market/dorsch/2010/0630.html

update I COMEX gold open interest hits record high Wednesday
NEW YORK
Thu Jul 1, 2010 2:44pm EDTNEW YORK July 1 (Reuters) - Open interest for COMEX gold futures rose to an all-time high on June 30 when bullion prices rose on safe-haven demand in the face of weaker equity markets, exchange data showed.

COMEX gold open interest climbed 4,654 to 605,792 lots on Wednesday, surpassing its previous record of 603,688 contracts set on June 25, CME said.

Analysts said record open interest, an indicator of overall market and fund trading activity, could lead to increased volatility in gold futures.

On Thursday, August gold contracts GCQ0 fell 3 percent to just above $1,200 an ounce after rising in the last two sessions. It was the metal's biggest one-day loss since February. (Reporting by Frank Tang; Editing by Sofina Mirza-Reid)