Tuesday, June 14, 2011

SCOTTY GIVE ME WARP SEVEN

I want the maximum speed to escape the gravity of planet Deflato. It has the strongest gravity pull in this solar system.

The problem is their is no power capapble of pulling you out of its overwhelming forces. The continued drop in housing is a murderous negative feedback loop. Our fearless economic wizards made the decision to use housing as its peg to the last big liquidity expansion AFTER the 2000 market crash. They needed a quick fix to pull us out of the depression that was certain to follow the 2000 crash and they found that expanding the derivatives game that was already going strong from the mid 90s could provide the necessary push to expand the economy. It was aided by several key decisions by congress including the repeal of Glass-Steagel (widely applauded by the media and fortune 50). The rest of us just sat and watched American Idol and football.

Once the derivatives were given the greenlight by Greenspan, the bankers took the raw meat and turned the leverage into the stratosphere. Some of the IBs went from 10X leverage to 100X leverage. Thats right 100!! When the home prices began dropping there were many on the "know" that started rushing for the doors in early 2007. The big boyz were already shorting themselves heavy and the slaughter of the sheep was underway. Mom and Pop never knew what hit them. Even during the manipulation of the previous decades there had never been such a completely coordinated fleecing of sheep by government and Bankers.

So here we are looking at the retread faces of Wilbur Ross and Warren Buffet being trotted out to put a face of sage wisdom on the "recovery" for the sheep to digest. Today we are going to enjoy the game. Its a squeeze, probably multiday...probably through early next week. You can play it just like you have the past few weeks. This game is now in the stages of desperation. Strip out the fiat challenge of silver and gold but paint the tape for the market (for a few days). Don't fall in love with the long side. Cash is king (for a little while). Enjoy the squeeze today.

24 comments:

  1. Perhaps LDK will make a nice run up.
    Chart looks interesting.
    RSI is rising, and yet to cross 50. Bullish cross on the MACD. Looks like it will be passing 50 on Stochastics. Looks like it is up already pre-market.

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  2. Kli,

    do you think $hui had a short term bottem at $498 yesterday and is just doing a retrace to the $520's before another leg down, or do you think this is the start of a bigger rally for gold?

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  3. rude.....yes we are oversold on $hui.....and a kick to 520 is certainly reasonable.....as far as a longer term bottom goes......I cannot tell you.....so I will be selling rallies and holding a small core of the usual suspects (in case it takes off).......gold.....is tweener land.....no leveraged move in the physical paper trade of phys and the miners COULD have formed a longer term bottome here.....but I will still sell rallies

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  4. back on....time ticking so I'll go fast......this is an obvious spot after the pain for most holders of miners to dump and go to cash. Most indices have had the kiss of death and its a guaranteed dump....OR IS IT?...this is a desperate game here pitting you against the best traders in the world....the easy shorts were two months ago on the miners now we are more interesting territory so my suggestion is lighten up on your holdings if you feel tooo exposed....shorts will reload here and get their asses squeezed again tomorrow or the next......it is very possible we could get a long term move up in the miners so that would not shock me in the least... if thats confusing then GOOD.....it was meant that way.

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  5. Kli,

    nice reasoning. i think you are spot on in this mind game. makes me laugh of the possiblility of the shorts getting squeezed again if they reshort. it could happen. thanks, i think i will take the opportunity to lightened up some, since i was overexposed, and look for a swing trade opportunity. if the miners dont go lower so be it, i will still have a core position. i rather take the gift here and free some cash.

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  6. KLI...I am sure there is more of this to come out...
    http://news.yahoo.com/s/yblog_thelookout/20110613/us_yblog_thelookout/more-than-6-billion-in-iraq-reconstruction-funds-lost

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  7. Joe.....Are you at the bank counting your profits from ORS.......lol.....nice one sir...

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  8. rude IF you catch a down move on miners tomorrow with ugly touch of the stochs and rsi....may wanna try a long trade.....just keep it close

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  9. remember all uncheck the "keep me signed in box" if you are having trouble posting.....

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  10. bryan....... Witnesses testified that millions of dollars were shoved into "gunnysacks" and disbursed to Iraqi contractors on pick-up trucks, with what seemed to be little financial controls or accounting on the part of the U.S. government.

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  11. kli,

    thanks will watch for that scenerio, i am waiting for one more pop on the miners to unload some, hoping for one more leg up.

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  12. Just to clarify, are you saying the miner trade is over, just own physical? I am heavy can unload some, but want to still hold core...is this wrong...also have been a buyer of pzg and gpl...

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  13. Nancy I do not believe the trade is over in miners until next year....BUT...from a trading perspective if this is an intermediate...short .....or longer term bottom is the question. I talked about another leg down a couple of weeks ago when we had a bounce ...we got it.....and it could go a little lower without a real nice bounce/recovery.....thaz all ...I said that I would try and trade miners if the $HUI hit between 490 and 500...it did....so here we are...if you have a core that you think is toooo heavy and we pull up to 520 take some profit....but don't wipe out your core

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  14. This comment has been removed by the author.

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  15. Oh, and what about cef, pslv, phys--I hold these and consider them "Non-Paper"...

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  16. Wow! Looky what happened while we were talking..;)

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  17. GENE could be interesting down here...needs to get thru 200 on daily....

    Rxii had 100K block orders this am...now moving up..actually moving fast

    random thoughts

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  18. big boyz sneaking in while MMs held it

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  19. all be aware that the $hui was critical support in the 495 area....a bounce is obviously warranted but a higher low needs to be established

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  20. Kli,

    Someone wants in....in a big way....rumors of buyout...

    0% breast cancer recurrence in phase 2 is a pretty nice story...and one of reasons I bought..

    dyodd

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  21. Chuck.....take a look at RITT....made a nice move today...

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  22. that certainly should help to readjust the bearish sentiment.......

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  23. Hah, I was getting bullish! Now that we have spiked up, I will get more bearish the higher we go.

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