Wednesday, July 20, 2011

KONDRATIEV WAR?


Can the unthinkable happen. Predictions by many experts within the budget sphere of DC have said that we will have to cut the military budget. In fact on this forum I have brought this very issue up on many occaisions trying to illustrate the large proportion of the budget's "discretionary" spending that the Military Industrial Complex compiles. This seems on the surface to be the most likely area that we must begin to reduce. BUT IS IT? It isn't even mentioned in most public debates or on the mainstream media. It is as if it is untouchable.

We have systematically looted our manufacturing base for over 30 years by our current trade policies and are looking down the barrel of a AK47 in almost any direction we turn now to cure our current structural economic ills. Many Americans that follow this believe that we can "fix" our current dilemna by simply balancing our budget....or stopping spending...or not taxing our "job creators"...etc etc etc.

I have also alluded to the importance that the Military Industrial Complex plays in providing a component of manufacturing in a destroyed economy that at this juncture remains paradoxically vital to keeping us from the abyss of depression. Even though this area of our manufacturing economy is highly counterproductive to the long term well-being of a citizenry and healthy economy. Of course a powerfully entrenched lobby has complete and utter control of the politicians when it comes to this industry. So you can forget about it being touched.

What next? Well......now we get to the GRAND SUPERCYCLE and its risks. Could we get the unthinkable? A well-known member of our forum has said unequically no but an ex-CIA (there is no such thing) operative named Robert Baer (George Clooney's character in Syriana) says we might. In fact Baer is sounding some ominous warning bells.

http://english.aljazeera.net/indepth/opinion/2011/07/201171775828434786.html

Baer claims the Netanyahu is preparing to hit Iran in September. Make no mistake, unless our Military can convince the administration to stop him it will happen. Netanyahu is under intense pressure from within his own security apparatus.Baer was especially impressed by the unprecedented warning about Netanyahu's plans by former Mossad chief Meir Dagan. Dagan left the Israeli intelligence agency in September 2010. Two months ago, he predicted that Israel would attack and said that doing so would be "the stupidest thing" he could imagine. According to Haaretz:

When asked about what would happen in the aftermath of an Israeli attack Dagan said that: "It will be followed by a war with Iran. It is the kind of thing where we know how it starts, but not how it will end."

The Iranians have the capability to fire rockets at Israel for a period of months, and Hizbollah could fire tens of thousands of grad rockets and hundreds of long-range missiles, he said.
According to Ben Caspit of the Israeli daily Maariv, Dagan's blasts at Israel's political leadership are significant not only because Mossad chiefs, in office or retired, traditionally have kept their lips sealed, but also because Dagan is very conservative on security matters.
Caspit writes that Dagan is "one of the most rightwing militant people ever born here. ... When this man says that the leadership has no vision and is irresponsible, we should stop sleeping soundly at night".
Dagan describes the current Israeli government as "dangerous and irresponsible" and views speaking out against Netanyahu as his patriotic duty.

There would be global repercussions that are potentially catastrophic for our military and Israel. I think this is saber rattling. I repeat I believe this is saber rattling but the reason I bring this up is the source and the fact it would most certainly get Obama reelected. Then you have this little tidbit arising that gives the entire story plausability.....Iran forming an Oil Bourse backed by China and others...
http://www.ibtimes.com/articles/183031/20110719/iran-opens-oil-bourse-harbinger-of-trouble-for-new-york-and-london.htm

Market play:

We are currently in a takedown of the miners to shakeout the new weak longs. I'll provide what I think are key buy points. on SLW 33.80. look for an intraday tail on EXK within the next 7 trading days to pick up at 8.98....ANV watch a tail touch of sub 35...AG tail touch sub 21. GPL 3.38... SSRI tail touch sub 27. These are my suggestions for your buys. If they play the flush game these areas should be perfect for the flush. Here is the caveate....if you don't have a good core left then take weakness during the next two days to reestablish a position in your favs. We may only get a one or two day takedown.....also a HIGH probablility. My core is very small here and I will add some of these on weakness before the wish list numbers are achieved as I did today. Caution as always and remember CASH is king in this chop shop.


from goldseek today

does the HUI BELOW look like a bubble????????????


bottom chart is off turds commentors

29 comments:

  1. Great Post Kli,

    Do you have any defense contractor picks, LOL.
    Can you elaborate on intraday tail? I googled it, and didn’t come up with much.

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  2. wouldnt want to be holding any DTO at that time. oil would do a moon shot

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  3. intraday tail is the price touch as denoted by the candlestick

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  4. added to my destroyed core......and takin an hours break.....heheehehe

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  5. chinese plays on fire.....its happening....

    scei...gure...

    reloading rxii...

    alth could get interesting...but whole bio sector was hit by rotation..thin volumes right now..

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  6. solars are moving again also , SOL a nice two day bump is leading the pack of LDK, STP, YGE, TSL. Interesting that CSUN is the only one still taking a beating , its at $1.50

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  7. Are you playing pzg or ric? PZG hasn't done anything.

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  8. no sister.....GPL instead..... also EZK ....reloaded PSLV

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  9. another chinese play to keep eye on

    zstn

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  10. GTXI-mentd a cple wks ago...wedbush made outperform call..check out the bounce off 100...

    http://finance.yahoo.com/echarts?s=GTXI+Interactive#symbol=gtxi;range=ytd;compare=;indicator=sma(50,100,150)+volume+macd+stochasticfast;charttype=candlestick;crosshair=on;ohlcvalues=0;logscale=off;source=;

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  11. SCORE!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!

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  12. Nice hit on pslv I was waiting for 17.50........... Ain't my lucky day! Hehehehe

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  13. Tom it aint over till its over....we can still get the beatdown befor opex

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  14. EUO sitting right on the 50.
    Now will that hold?? Decisions,...decisions.

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  15. doc.....posted $EXU chart above......I think we are in a new down channel and it breaks in the next day or two.

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  16. Kli,

    Thanks!
    I'll study it tonight.

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  17. damn bastards , i didnt get back in the miner trade fast enough. i should have scaled into SLW when it was trading under $38.50. now i wait. even AUY jumped right back up.

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  18. yup rude....they were quicker than chit with that takedown....snooze ya lose....BUT.....ya may get another chance in the next couple a days.....gpl is still fair

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  19. watch the video VERY good

    http://www.zerohedge.com/article/gold-silver-surge-after-john-taylor-predicts-gold-hit-1900-october

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  20. silver getting an AH smackdown......hehhehehe man are these guys desperate........

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  21. Doc......$XEU looks like it will hit 144 on the top of the wedge then crash....it will fall relatively quickly to 135......before it really tries to rally and retest support.....I own EUO as a hedge on any major fear entering unexpectedly...but the chart on the $XEU looks very telling.....I will make comments tomorrow on the future of the $XEU

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  22. Kli,
    I don't know if you saw this article at Minyanville. The author states that the Euro has not violated its up channel since mid-2010. He believes the dollar will weaken, and implies the Euro may stay in its up channel.

    I have successfully traded EUO calls twice now and looking for another opportunity.

    http://www.minyanville.com/businessmarkets/articles/euro-the-euro-european-union-euro/7/20/2011/id/35844?camp=syndication&medium=portals&from=yahoo

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  23. http://www.martinarmstrong.org/files/Gold%20v%20Money%2007-19-2011.pdf

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  24. Agree doc .........BUT.....its gonna...probably another couple of months before the SHTF

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  25. I see a bearish wedge getting ready to turn the EURO to trash

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  26. I think ya mean exk rather than ezk...and Martin Armstrong's my fav (other than you and joe, kli!) How many think the euro will survive? Not me, but I could be wrong. Will be tiptoeing into euo...it's amazing to me how pms have held up this wk., opex next Thurs. we'll see if they can get 'em down.

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  27. kli,

    looking at the $HUI chart you posted above, it looks like the RSI a wee bit high, am i correct in assuming some type of pullback in the very near term?

    one last question, if the euro tanks as you say, wouldnt gold rise (fear trade), or will it drop since the UUP would gain strength?

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  28. still have room to run on the HUI.....but sure it can pull back and I HOPE it does but trying to fine trade this run is very difficult...hold a core and trade the margin. IF euro tanks then yes it CAN be bullish for gold....even though the USD is rising. gold up USD up.....In a true crash then gold will drop as liquidation ensues

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  29. kli,

    thanks for the explanation. makes alot of sense. plus you so right about trying to fine trade this run.









    lw

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