Wednesday, July 27, 2011


Are you the predator or the prey at this juncture? One thing is certain when you lean too heavy in this market you become the prey very quickly. We're overdue for some weak hands in the gold and silver trade to be loosened up so don't become the prey. Will it be a major shake out lasting almost 5 months like the most recent one. I doubt it. I am not a psychic but for now dips are to be bought and rips are....

$HUI showing overbought here caution advised...just remember it can get EVEN MORE overbought....Keep your eye on 552 for a touch and a buy of your picks. Its healthy for the miners to shake the tree here. So let's keep our buy fingers crossed. GDX on the 58 level also. Keep a lot of ammo in case they take it below the 50RSI. These are buy areas that I feel are short term (next few days reachable)....not stink bids....stink bids will be fine if you get lucky.

GPL 3.50
SLW 37
SSRI 28.60
EXK 10
AG 20.90-21.10
HL 8.10
ANV 37.50
RIC 7.75-8.0
GORO 25.25

If HERO doesn't catch a bid between here and 4.25 then its going to 3.65....ugghh. Watta market. I do own HERO least for now.

GOLD and SILVER.....longer term turn off the noise. The troubles that have sent this to the position are not going to turn off. Short term you can hope they continue their consolidation but I think a new game is going on right now. We may get a shake out at these overbought levels but holding a core that you can be comfortable with getting a 10-15% beatdown is wise. Then add. $GOLD at 1550 is a wish list....

Silver....well thats an easy one..if it hits 39.10 I am buying.....since my core is too low there....but it is NOT THAT overbought yet so I may just be wishing....I am cautious and I want you to expect ANYTHING so always keep cash in case you do get the stink bid buys.

Oil and DTO...I will reiterate my hesitation to short oil....I've done it successfully three times in the last couple of weeks but the last DTO buy was a loser. They were all small trades and I won't buy any DTO unless it oil hits 102. AND it will be a small position. Like playing the nickel slots or the 5 dollar black jack table.

BTW if you believe this trade is in jeopardy longer term then explain how this type of news is going to get better....use your head...this is the game.

California Seeks $5B ’Bridge’ Loan to Pay Bills
By Michael B. Marois – Jul 25, 2011 9:00 PM MT

California will borrow $5 billion today through a temporary loan as U.S. states make plans to cope with any credit-market disruption should lawmakers fail to raise the federal debt ceiling by the Aug. 2 deadline.

Proceeds from California’s bridge loan will help pay bills until the state can sell cash-flow notes that had been scheduled for late August. New Mexico is asking agencies to complete requests for federal reimbursement by midday July 29 to ensure the it can get repaid, and Maryland was forced to cut $206 million off a planned bond sale as the debt talks dragged on.

“Given the uncertainty in Washington with the debt ceiling, the treasurer felt it was prudent to get a bridge loan,” said Tom Dresslar, a spokesman for California Treasurer Bill Lockyer. “We couldn’t have planned on the president and Congress taking us to the brink.”

States and local governments face higher borrowing costs if Congress fails to reach a compromise by the deadline. Because the U.S. borrows money through the sale of Treasury notes to pay its bills and refinance maturing debt, it could default if the limit isn’t increased. That might cost the government its top- ranked credit score, upend financial markets and send interest rates higher.

Moody’s Investors Service has said it may lower its top ratings on Maryland, South Carolina, New Mexico, Tennessee and Virginia because their dependence on federal revenue makes them vulnerable to a U.S. credit cut should talks to raise the debt limit fail.

Remember ......CONfidence is never retrieved by subterfuge and restoring the CON only. gl gang.


  1. Kli,

    do you think the "debt ceiling" in-fighting is just posturing at this point and it will get resolved in the next few days, or did this crap take a real turn for the worse and both sides will not budge and just play the blame game when the crap hits the fan. i always thought they would drag it out to the end and come up with a compromise and "save the world" at the last second. now i am not so sure. i am not sure either side gives in and the deadline passes.

  2. rude.....this is all about what the puppetmasters want....if you understand who really pulls the strings then you would know it is ALL posturing by the puppet masters. Many of the puppets may actually believe they are making some type of political "stance" but the outcome is already predetermined. It may "look" like its random like the original TARP failure....but its all for effect.....I'm looking for some type of a "panic" bottom 1250-1285

  3. kli, someone else also alluded to that fact that it would play out similar to the original tarp vote. its looking like it may play out that way.

  4. Perhaps but don't count on ANY particular outcome...just take what is given to you and be aware what the game is....if they flush it with a fear trade or panic then use the opportunity and make the trade.

  5. Or it may be a bit different this time....... Never know

    I think its going to take some sort of event to get the process going, the chicken little routine is getting old......

  6. I am questioning whether "they" will use fear to get investors to buy the dollar. A rising dollar will push equities and the metals down. Falling equities will then justify "the need" for QE3.
    On Monday, Phil Davis posted about buying GLL & ZSL, but then admitted that wasn't working. Today, he suggested shorting Copper. He believes the other metals follow Copper's direction. It seems like he believes the dollar will strengthen.

  7. In agreement Doc.......just have to see the timeline involved...but the chart says its comin on the USD

  8. miners are just getting crushed, BS mkt.

  9. Wow! A mini flash crash in gold/silver...that gold takedown in a few seconds was impressive. Never mess with the big boys.

  10. looking at the charts on GPL, it seems there is a distinct possiblility it heads to 3.30. i think you get your 3.50, Kli. the PM trade crosses me up more times than not.

  11. As a GEN-Xer.... I pray everyday for a default. End the Ponzi and try a new game.

    But as KLI says, this is all a show. Behind closed doors, the Republicans and Democrats are probably smoking cigars and sipping expensive cognac with each other. They probably knew the end result of these talks 6 months ago....

    Saw a story on Drudge this morning "REPORT: Congressional members net worth up 3,669%"
    Think any of that was due to "inside info"?

  12. YESSSSSS!!!!!.....hehehehehe my stinkbids hit......hehehehhehehehehehehehe

  13. followed here from TF

    got a little GPL @$3.60, should have been a little more patient but it's a hold for me

  14. gotta love what BAC is doing to foreclosed homes. taking them completely off the market and knocking them down. almost sounds similiar to the cash for clunkers, where alot of decent older vechicles were taken completely out of the market. if someone wanted to buy a cheap used car now, the selection is limited and one is forced to buy a new car or an expensive used car, because the cheap used cars where destroyed during the cash for clunkers program.

  15. Welcome jeff....comment anytime.....Stinkbids and patience here...I gave buy areas last week I still hope we get them....most were just under a 50RSI and key support.....todays buys were "achievable" today....and for the most part were hit.....

  16. Graft always occurred in Congress.....NOW its intitutionalized AND LEGAL....hehhehehe...ya gotta luv it. We make bannana republics look good.

  17. GPL snagged and bagged.....touched at 3.52

  18. Are you selling these on bounce tomorrow/Fri. or holding? I got plenty...

  19. depends on the bounce....;-) hehehe My core was awfully light...and I don't really mind a bigger pullback to accumulate.......that would be my preference....but yeh a nice bounce gets sold least some of um

  20. Kli,

    what happened to the fear trade today? i was surprised miners got crushed, was it all from strenght of the dollar, or do you think people were just taking cash by selling some of there miners that had a nice run in the last few weeks?

  21. The dollar strength on the continuing debt debate seems counterintuitive to me. I'm guessing rising int. rates=stronger currency? I know rising rates are bad for equities.

  22. rude....miners get sold often when equities market gets sold...they are part of the risk on equities market.....don't forget margin liquidations.....VERY EXPECTED as noted in this mornings post. ALSO know very well that a "risk off trade" is a strengthening dollar but YES the dollar right now is also heavily being manipulated in the dollar carry trade with the EURO and YEN......I said last friday after the strong $XEU move the dollar HAD to move up fast technically to regain its channel.....and it did today. Anyway I don't make much of ANY of this today.....all anticipated and if I am right the correction in miners will be brief and the up trend will resume within a week or two......maybe even sooner.....hehehehe

  23. I'm light on miners still, just holding a core or GORO and SSRI.. along with a "core" of cash. Watching ABAT with a fork in my hand but so far I haven't ventured there.

  24. When I say "light" I mean compared to my usual exposure, I'm guessing but I'd say GORO and SSRI are almost 50% of my holdings, maybe offset by GRZZX but maybe not if the wind were to blow against both. The rest being cash leaves me fairly comfortable here.. Let's see how far this PM correction can go, I'm excited to see it even if I do lose money temporarily.

  25. Not married to SSRI as compared to SLW or others, I just haven't noticed any great spots to jump from one to the other. For gold though I like my GORO, it seems to take nice decisive moves that don't leave me wondering.

  26. Here I am saying things like "PM correction" with gold near record highs.. I mean "miner correction" of course.