Tuesday, August 9, 2011

CRASH!


I cannot put into words how crushed I am now that they have finally pulled the trap door on the greatest ponzi in history. Not because the excesses and greed that created this didn't need to be vanquished but because of the reality of what this has now unleashed on the real economy. We are about to be hit by a slow motion tsunami of unparalled human suffering that has not been seen for almost a century. If you think this is hyperbole and you find joy in what is about to befall your country and the world then think again. This is no longer predictive it is now in real time breakdown.

Over the past years I have discussed the issue of CONfidence and why this was the central issue with many if not all of the attempts by the Central bankers and governments to address the greatest ponzi of leverage in the history of the world and its breakdown in 2008. I'm not going to address its causes but to give you the effects of the past week's action and yesterday's market CRASH. Up until YESTERDAY there was the possibility that we might see a higher high this year. NOT now... This marks the darkest day of my trading in the plus 30 years I've been in the market. In 2008 I knew they could kick the can. It was an exhilarating time to be trading a bear market. The last two years were sad to see how far they could extend the ponzi without even one prosecution of any significant Wall Street individual. As they pushed this market to highs and the economy just continued to wither on the vine I knew that the time to pay the piper was growing nearer.

Today was DEVASTATING for me personally and the country. It marks the point of NO RETURN for the ponzi. Today marked the beginning of the point of recognition....the point at which market participants and social mood cannot go forward with the ponzi any longer. Bernanke and the Boyz would never have allowed this unless they had an insurmountable longer term problem. Its time to pay the piper. That realization gave me a sense of sadness and anger. Sadness for all of the good people that have no way to fight this or protect themselves. Sadness for the effects this will have on this generation of children and college graduates.....our future. They will be crushed. Anger because it did not have to be this bad. We could have been halfway through this if we had already begun addressing the structural problems. Notice that I have talked about the "structural" issues for two years and now that's all you hear. I am not an economic genius. WHY is the MSM just now discussing "structural" issues? Pay attention to world events they will unwind rapidly now.

Today's market.....Squeeze coming and ball busting for the shorts. At least if any are left. Remember.....one of the moral hazards in a totally manipulated ponzi cyclical bull market is the destruction of SHORTS. Note SHORTS supply and important part of the liquidity of an efficient market. Shorts give you brakes in free fall markets and help to push spiralling markets positive again. But what happens if there are no shorts....at least very few shorts relatively speaking? Freeeeeeefaaaallllll...

$SPX has support at 1050....overnite at 1080 already. This is a crash so no heroes..

SLW..30
SSRI..24...22...major dump..16
ANV...29.50
GPL...2.5 ...then 1.9
GFI 13.6....12
EGO..15...13.5
GORO..20.20
HL...5.0...4.5
AG...16.50...12
EXK..7.5

I'm leaving it there.... the rest...like EUO are holds here. These are supports and are to be used as rough guides for you if things get hairy and you need a quick reference. I expect a trading bottom to be set soon. They will pull out a new plan to infuse liquidity but it will only last a short time. GL to you.....you're gonna need it.

72 comments:

  1. Phase 1 - bottoming of 20 week, 9 month, 3 year cycles now. This is the preview of what is to follow. Phase 2 - bottoming of the 20 week, Kitchin cycle (42 months), 10 year cycle around September of 2012 (and you think it can't get worse). Phase 3 - it gets worse - the Super Cycle, the K-wave, the Grand Super Cycle bottom late 2013 or 2014.

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  3. I like the calls Kli, myself I'm pot committed to riding my remaining core to the turn. I'm content with when I shifted to cash and how much I shifted to cash, I'm not going to play around and try to game this now.

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  4. Even if this really is "the big one" the conventional wisdom applies, miners might fall fast but will also bottom fast.

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  5. Morla....I'm seeing something that makes me believe the miners may have some real potential here because of the beatdown they have ALREADY taken.....holding a core here is a very good idea and I would not be shaken out of it.....

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  6. Remember that GRZZX core I've been losing on since late 2009? This is what I paid them to do. Otherwise I'm watching the dollar index, GORO, and SSRI with as much detachment as I can muster.

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  7. And ABAT but hey why kneejerk right before earnings.

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  8. Very carefully coordinated pump taking place right now. Gold back to < $1750 after almost reaching $1775, futures are almost flat, and Asia has somewhat recovered. Squeeze may start as early as tomorrow, but who knows.

    Holding SSRI, SLW, and EXK now, and not really planning to add anymore. If they go higher, I'm taking the profits, otherwise sit tight for now.

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  9. Discussing calling out the army in Great Britain......its starting...

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  10. aerial shots of fires in London and Birmingham are amazing

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  11. The U.S. should send an aid package in the form of losing soccer games against them. (sorry for gallows)

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  12. Go to Costa Rica for a few weeks and hell rides into town..sounds like everyone made some cash...cash was good option before vacation...

    cheers!

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  13. Kli, would you mind if I send your commentary to a couple of friends via email? One works for Newmont in Nevada, the other is a principal owner in a Canadian mine! Unfortunately for us, your commentary is spot on. Thanks for your good and faithful friendship, sorry I'm a little teary this morning.

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  14. Of course just hearing from two sources that the real money was out as of last Wed. Sounds about right...argh!

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  15. waiting on FED news today....watch it here......dead cat bounce with potential for end o day sell off.....unless the fed gives a nod that QE3 is coming this market sells

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  16. Kli, you have not mentioned PZG. I am watching it with interest, but would be much happier with it at 1.50.

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  17. Is silver just a base metal anymore?
    It doesn't seem to be tracking with gold anymore.
    Can someone explain to me what is happening with Silver?
    I just don't understand its behavior anymore.
    I thought it would be in the 50's over the last few days.
    I don't know if this because of the margin hikes on silver, or something else.

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  18. Miners up, gold/silver taking hits (esp. silver). Can't believe the Fed will announce qe3 today, but that's just me. Sold some l-t investments today to raise cash.

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  19. Nice trades this morning on ATPG, LDK, and PAL, homer the theme for this morning's trade:

    http://www.youtube.com/watch?v=0WUdlaLWSVM&feature=related

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  20. Backing up what you just said Kli

    http://www.zerohedge.com/news/macro-commentary-endgame-tbtf-banks-and-rising-rates

    Either way it ain't gonna be pretty.......

    Btw Joe thanks for putting pal on the radar.

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  21. Well the waves were big in Costa Rica but not as frothy as this market...

    buying POZN on court ruling...way undervalued...

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  22. People are waiting to see if bernanke can do the following, the answer is, heheeeeeeeeeeeee!

    http://www.youtube.com/watch?v=kFHYyu7nt_4

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  23. Red,

    I like SGY much better than ATPG especially when it comes to playing the upside, it's very profitable unlike ATPG which has lot of debt, look at what SGY is doing now in up market.

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  24. Joe,

    was 2 the buy on PZG?

    POZN reasoning
    $64.1 million in cash
    30 million shares
    $2.14 in cash per share

    patents good thru 2017...

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  25. Joe...wow! yesterday was a sour day for that sweetie..

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  26. IPSU had some terrible execution on passing cost increases to its customers as well as production issues. Some of these problems can be solved. lower sugar prices would also help. This indicates poor management. Enterprise value makes this a great value at this stock price. They should sell off marginal assets.

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  27. Chuck,

    The recent action on IPSU has simply been the following which is the way I like this market:

    http://www.youtube.com/watch?v=bd2B6SjMh_w

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  28. Hey budfox - sorry for not getting back. On vacation and fighting some kind of DNS hijack I think is happening on a router next door that I am "using". When I can I will look for a decent writeup for tunneling but basically it has to do with proper functionality on the router (I use DD-WRT). Putty to perform an SSH connect and something called Puttygen to create public and private keys then an update to your browser settings. Don't want to clutter this blog up too much, maybe on the weekend posts.

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  29. Chuck,

    $2 was a good buy for PZG for trade only, as far as buy and hold PZG, I am skeptical, with hedge funds deleveraging and selling their winners, I am not a fan of hold PZG unless their ground resources become more known.

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  30. Taking ATPG to the woodshed, heheeeeeeee!

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  31. Looks like Mr. Market has entered the woodshed too.

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  32. FED munity, Bernank losing control. 3 dissenters.

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  33. the market is like the boat ride I took to Cano Island...choppy with overriding large swell to make newbies puke....

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  34. thanks Joe on Pzg..

    AIXG made nice bounce today...22ish seems to be a long term support level....european QE play...

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  35. KLi,
    Fed waves white flag of surrender on deflation saying it is here to stay for at least 2 years as they plan to keep rates exceptionally low until 2013.

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  36. Anyone see the market in real time right after Ben's speech?


    +100 -200 +20 -80 all in the course of about 10 minutes....


    Retails with stops and shorts just got taken.

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  37. the only play was a bounce off spy lows at 111.40......and perhaps a short right now at 114.50

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  38. DOWN +288

    Why is everyone so happy? Did Ben save the world? Is the market relieved NOT to see QE3?

    Are they banking on a new prez/congress in 2012?

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  39. Long spy +2.1, short spy +.40 and reverse to long spy +2.7.......should have just played ATPG though. time to drink

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  40. Well I dunno when ABAT is reporting, I suppose they can wait as long as it legal. No rush the volume on the drops isn't enough to worry me.

    And hey, miners finally getting a break.

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  41. QE2 and the aftermath:

    http://3.bp.blogspot.com/-aEba9W-mzz0/Tg0yBxczbiI/AAAAAAAAAds/XfKQiDDQ0zc/s1600/0701qe2.png

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  42. This market remains HEAVEN for intra-day traders, playing both side of the coin. ATPG's action was great today. The key is playing the stocks with volume and liquidity in both direction and have the disciplin when it comes to scalping nice chunks.

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  43. Nice scalp on PAL today, thanks joe. But sold some l-t energy holdings on the morning bounce, obviously too soon. Way up on miners today, hope this is their own reversal, but may be a bit too soon. Got lotsa cash.

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  44. nice one inlet.....also yes large reversal candle on miners...

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  45. Nancy,

    Take advantage especially during volatile and violent market moves like today since it gives you huge gaps. You do not need to wait for buy and hold or short and hold. At the end of the day I am in 100% cash, during the day I do 2 trades to 30 trades depending on what market gives me. In this market, the key is not trying to guess what market does the next day or next month, the key is trading what market gives you in real time and disciplin to get out when tape turns.

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  46. It made no difference to me whether market ended up +400 today OR -400 since I do not buy and hold or short and hold in this market.

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  47. classic triple whipsaw move to clear the stops and pull in shorts for the dump to overnite 1074...just one problem......there was no intention of the boyz to go there....only to suck in the algos and hedgees on the short side heavy and did they ever.....did you see the volume????....SLAUGHTER.....and a lot are still trapped

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  48. One of the rare time I listened to crammer, and he had an interesting opinion. He states that the market is going up because of Ben. That Ben just stated that bonds and CD's are a bad place to put money for the next few years; that this means high yield stocks will get the fixed income dollars...thus stocks are back in play.

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  49. shorts and stops got mauled today... I haven't seen such carnage since 08/09

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  50. So much of the economy hinges on the "market"....many retirement plans etc......but the most important aspect was lost yesterday...CONFIDENCE...they spent over two years trying to reestablish a semblance of it....the flash crash hurt badly......yesterday was the end.

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  51. Perhaps yesterday was the end of confidence. But end of confidence in what? Why was yesterday so significant compared to every other crash and flash crash we have had?

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  52. several reasons....that level of collapse shows that the PTB have made the decision to begin the process of levering down the market. To involve investors in this market (that they can control) it requires CONfidence....hard to achieve easy to lose. For example.......the march up from 09 had almost NO real pullbacks ...for a reason. to maintain confidence. When you see the president call a news conference mid market then show up and HOUR LATE then say nothing.....you know something BIG collapsed during that hour....that is unnerving and irretrievable to investor psychology...putting a new high in the market now would be the height of stupidity and insanity...

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  53. major fires now buring in london......

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  54. I will sit this one out...
    429 up in this horse shi....t at 3:00 PM

    where are they trying to take me?

    paladin

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  55. RIOTS all over England.

    Could this happen in the USA?

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  56. In case you aren't watching the developments in London....this is NOT just hooligans.....this is a full fledged revolt in the younger underclass which is really taking some hits in GB......this can spread across Europe like a brush fire

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  57. My chart analysis tonight indicates that we have a better than 50-50 chance of a monster 3-5mo bull move on the miners......enjoy....ps...DONT load the boat....but hold that core

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  58. http://www.huffingtonpost.com/2011/08/09/london-riots-bbc-interview_n_922857.html

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  59. You just convinced me there could be a new high since it would be "the height of stupidiy and insanity"...sounds like a real possibility when you put it that way...I thought Martin Armstrong said gold goes parabolic Sept/Nov. It already looks pretty parabolic to me...everywhere I go people are very, very angry. I have never seen anything like this...people talking about this now whereas in '08 it was barely mentioned in my circles. Enough is enough is the mantra now and everyone asking me (!) about gold. Thanks for all...

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  60. want to see a scary chart....real scary...

    http://co2now.org/

    notice the trend....all the other market stuff is just that a market....wont need money when the ocean is dead and air is not oxygen...

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  61. Kli,

    any thoughts on oil prices? oil is getting alot cheaper, that is a pretty good stimulas for companies (miners included) and the public. any possibility it could fuel a longer term rally? or do you think todays rally from the depths of despair, will be sold off in the very, very near future, and the mkt will continue the next big leg down

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  62. oil "should" stay in a range 70-90 for awhile...I haven't looked at the channel ....if Ben pulls the big guns out in Jackson Hole then over 100 again

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  63. Dylan Ratigan.. Well, he breaks the 4th wall in a rage against the entire establishment.

    http://www.msnbc.msn.com/id/21134540/vp/44079837#44079837

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  64. Fair warning, ya gotta wait a few minutes before Ratigan suddenly boils over.

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  65. nice one morla....luv that ratigan

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  66. Saw it on Karl Denninger's site, but really all he did was watch cable so it's not that impressive for him.

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  67. Good job though to Ratigan, if he can keep this up without getting fired sign me up for his political campaign. If he does get fired.. I hereby pledge to personally set him up with some ramen noodles or Alpo (not clean drinking water though I'm not made of money).

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  68. You won't starve Ratigan, you won't starve.. None of us will actually, of the few things the government is good at, preventing famine is one of them. We have the land and the guns to hold it, so we won't starve. The standard of living is VASTLY MORE FLEXIBLE THAN WE THINK but America will find a way to make it.

    The magic of America is that our bread lines are always full of bread, our soup lines always full of soup. In the end, we do the right thing. Like Churchill said, once we've exhausted all other options, Americans do the right thing.

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