Saturday, July 2, 2011

HOW LONG CAN IT GO ON?


Can the illusion of prosperity with burdgeoning debt continue? Will the market continue to levitate in spite of obvious sinking structural economic shocks? The answer to us as investors lies somewhere in the Matrix. If your are trying to ascertain which pattern we are in right now in the market and how it fits which cycle theory then good luck to you. The Matrix is way more clever than you are and is making sure that its patterns are disguised. Did you enjoy last week? I bet you did. The market in a matter of five days completely takes back all of its losses for the past month. Not even one intraday pullback for the bears to cover. Trap the shorts and slaughter them like the dogs they are. Wait...I need to be careful there I have shorts. Anyway when you see that kind of action you can only marvel at just how desperate the current situation is for the ponzi. Essentially the primary dealers are carving the remaining flesh off the unwashed hedges and retail traders that have survived the slaughter up to this point. In hindsight it is fairly simple but seeing is believing. Pull the shorts in with some enticing patterns and breaks of key levels of support. Let the MSM shills play the music and oiula you have a toxic brew for the shorts created. The question at this point is have the taken out enough shorts that they have to start cranking the market down or do they continue to ramp the shorts next week until the blood is so thick that only the most masochistic will short the SnP. Only the Algos know.

I discussed with you last week that the market was on the brink of a serious collapse unless Ben called in the levers. He did.... in spades. But more interestingly did you notice how he ramped the market and simultaneously managed to keep the lid on commodity prices and PMs. THAT my friends is true power. The beatdown of commods started last week with the release of the oil reserves. That got the trade liquidation game going as they scrambled to cover margins. Just as they got the markets rolling again ....the boyz come out with the dubious report on the corn crop......once again crushing traders and killing the margins. What a slaughter for the traders that can't handle the leverage. No problem for the big boyz. It buys the boyz some time by bringing some slight relief to food prices. My guess is they try another trick or two on food prices this summer. Can't let the peeps bellies go empty. That's when the trouble really gets rolling.

One more thing before you go out and celebrate our birthday. July AND August are hot months and you better not count out Europe yet. There are still some fireworks coming over there during the next few weeks. It isn't over. Watch France.

http://www.10sigma.com/files/Borrowing%20from%20the%20Rich%2006-30-2011.pdf


16 comments:

  1. Made a post in the last thread about this past week's rally. Did not see this one coming, absolutely no justification. Once again we see who's in charge. In a way, I'm glad to be heavy cash and not play in this rigged casino.

    You think they can drag this sucker's rally for another month or so Nothing makes sense anymore.

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  2. budfox,

    You have seen it happen here on smaller scale on penny POS stocks, short circuiting the natural cycle of price movements in a massive way to get your way and profits. It just being done on a larger scale with the MSM and governments being fed the script to play. When you mess around with the natural cycles in the short term in a large manner you make the system more unstable. Best example is pulling a metal slinky to far to fast in the opposite direction. Each hard jerk increases the severity of the final breakdown, I am still unsure if long term timing changes much.

    The surviving cockroaches (traders) become increasing resilient to the last trick and need harsher tactics to get them back into line so the Ponzi can continue long enough for the top to get theirs.

    This is the trading environment you face at the end of one of the biggest super cycles in recorded history. Now the question comes down to what you want to do over the next 12-18 months, slowly prepare yourself or swap electronic bits in the rigged casino?

    Have a Happy Holiday!

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  3. Bud.....this is EXACTLY what I posted several weeks ago....increased market moves with trading ranges expanding to rape the stops and squeeze the shorts....Joe intraday trades to avoid this.....Dont believe the analyst its all designed now to strip your remaining flesh.

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  4. Budfox,

    Now you should clearly understand why I do mainly intraday trades, not because I enjoy it or it's fun, it's because at this stage of the game I do not trust the rigged market to buy and hold for longer term or even swing trade. When some one says they are surprised, the word surprise means they were not aware and did not expect, nothing and I mean nothing in this market surprises me which is why I do not even try to establish longer term short or long positions for now. I still remember Kli mentioned to me how surprised he was when one of his associate doctors passed away at younger age, my response to him was, there should be no surprises when nature makes it clear that ALL death is certain at any moment. The concept of denial and surprise means that human nature without AWARENESS lies to you all the time. The same concept applies to stock market as well. Humans get surprised because they think they can control events and when things do not turn out to the way they thought it should then they start complaining. How many times I have to repeat myself, trade what market gives you, not what you think market should do. Most people are not skillfull enough to do it which means they need to stay away.

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  5. The main difference between one's intelligence vs one's awareness is that your intelligence as a human being is very capable of lie & decit to yourself especially when it comes to consequences attached to each choice, your awareness is not. Be aware!

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  6. Wow! I should go on vacation more often. The market really popped.

    Now, it is back to reality, but then again, what is reality??

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  7. Hi Kli

    Do you think JPM will ever cover their shorts so they can go long silver? Wouldn't they do really well if they did?

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  8. Tom,
    This may answer your question...

    http://www.gotgoldreport.com/2011/07/stunning-plunge-in-comex-commercial-gold-net-short-futures.html

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  9. Nice catch ckpc that's damn interesting.

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  10. Question on silver and COT report...

    Does a low Comex inventory really represent a supply shortage? It seems that delivery can be had from other sources. I am not sure that Comex inventory actually represents supply. If the Comex thinks that prices are going lower, wouldn't they want to keep the inventory low so they can replenish it at a cheaper price?

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  11. Joe, your points are well taken and your own strategy of intraday trading only is a wise one. As a long time reader of this blog, I consider myself more aware than the great majority of the general populace, but I guess there's still more work to be done there.

    In a way, being heavy cash and mostly staying out of the market the past 6 weeks is my way of pondering my next move. Last week will go down as yet another lesson learned, and that is, always expect the unexpected and never be surprised at anything that happens in this market.

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  12. Kli, Joe and others,

    I need some direction / advice. I want to get more into trading. Not for the money though. I find it fun and a challenge. I have a very small account (15k) that I play with. It's money that I don't "need" for my monthly expenses. If I lose some so be it, if I gain some so be it, I just like this "game". Ok, so my questions are as follows. What would be a good charting service to sign up for? I just signed up to droke's weekly stock updates. Should I also sign up for the gold/silver reports? Also I use a MacBook. Is there any benefit for using a windows based pc for trading? Any other ideas or suggestions? it's basically a hobby, that I want to get more into. Thanks for all your help.

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  13. 10yr interest rate moved up - gold moved down...

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  14. honestcreditguy said...
    week before 4th of july seems to have bullish tone...knew I could count on google

    http://content.screencast.com/users/wprosser/folders/Jing/media/14d48884-0fc5-4854-b5b8-2a074dfd44f8/2011-06-24_0841.png

    June 27, 2011 2:19 PM

    the big boys frontran the QE ending early in month and took out the shorts thinking about greece and qe2 ending..seem to be ready to turn the low volume bot machines to really chop up retail...

    cash is good thing...could be some good setups..

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  15. Ryan,

    ThinkOrSwim Charting service is not bad at all:

    http://www.google.com/#sclient=psy&hl=en&source=hp&q=ThinkOrSwim+Charting&aq=f&aqi=&aql=&oq=&pbx=1&bav=on.2,or.r_gc.r_pw.&fp=fce33a84b0764b22&biw=1016&bih=570

    Droke's Gold/silver reports are good, you should also check out:

    http://goldseek.com

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