Friday, August 5, 2011

DANGER ZONE!


Miners need to pick up the next few days or they threaten a bearish 20/50 cross on the longer term weekly GDX. If we close lower tomorrow then I believe we test the lower BBs before any meaningful bounce which is around the 50 level on the GDX. This will play out within the next four weeks. 50 had better hold. Remember...the much speculated FEAR/PANIC play for QE 3 may be in play here. Eurozone is truly in trouble and needs our QE so this may be the play. If so they cannot take this too far down.

If you use the $HUI which I like better the picture is more interesting. NEXT major support is 495. There is also a possible near term channel that COULD form if the $HUI turns hard at around 512 area. This would put us back into a firm near/int. term bull move on the miners. Again...a big announcement tomorrow would do that. BE AWARE and pay close attention to that possibility. Again that would have to occur within the next few days and breaking 495 and holding under violates that nearer term bullish scenario. Please keep an eye on that very closely.

Patience here with shorter term trades only now. Gold has a very clear channel touch and hold of around 1520-1530 for me to get very comfortable. That may occur with some very violent moves down. Let's wait and see because the top of this channel does allow for a short term move if there is some major QE announced in the next few days for gold to go to 1734 as predicted by some. I call this all a danger zone to trade in. In other words a small core of miners and gold may be profitable short term but more than likely we get some pain near term. You can try and trade out if you get a fib retrace in the next few days. OR you can ride your trade. Sound confusing? It is...just remember...go to strong cash position with a bounce. I didn't say sell it all.....just make sure you have strong cash. Watch the WEEKLY BBs too and RSIs for bottoms to TRADE.

Another strategy is to think about using the $XEU. The EURO is in a bearish descending triangle threatening the 139 area for a doomsday break. I would like to see another overshoot of the top of the triangle in the next few days for a buy before it breaks through 139 but I have to believe its going for 139 fast. Anyway its a crowded trade so expect some highjinx. EUO is how I'm playing it.......not a lot of movement which may be the game......they may just rip it right through 139 and keep pumping it down. Either way I'm in it for the long ride to hell. 135 is a big stop (maybe)then 128 will be a fight......then 119 for the final slaughter.....none of this will happen overnite.

Let me be clear where we are now. It is very doubtful that we are going into a calamitous crash. The Central Bankers still have plenty of tricks that will create a wild ride for traders. The tricks will all ultimately fail...but they will use them. Remember...they own the press now. Just rumors alone will make great short squeezes. Don't forget the different breaking news BS during the last crash. Trichet should announce an emergency rate decrease anytime. They will float more rumors the Germany will support buying the Italian bonds. All BS but it will create havoc for the shorts. Alls of this will buy them time and thats really all they are doing. It provides you the opportunity to trade the technicals. Use the rips to sell and the dips to buy just don't fall in love with any trades now. Sounds simple but its not. You have to have ammunition and right now a lot of traders are burned. All of you know how I feel about this market....Its going to hell...but how it gets there will determine if you and I go with it....so be very careful and don't get too far on one side of the boat. gl to you



your futures as stock traders

68 comments:

  1. predictable suckers rally. lightened up on my core on the bounce....will hold tight now.....added EUO

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  2. Cmon.....lets get scared today...nice panic day would make some stink bids for another bounce play nice

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  3. Great posts lateley Kliguy, really appreciated :)
    I want to thank you last week for your post on miner stink bids on GPL,SLW, EXK etc (also follow SVM?) I was pushing the buy button last week but refrained from pushing the confirm button after reading your post. Saved me alot of money :) Thanks! Now when the miner are sliding way past those support lines do you have any thoughts on the next major support?
    Trading this market is almost terrifying, feels like dipping your toes into a pool of tiger sharks....
    Thanks again for great posts, must read for me together with the Turd :)

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  4. Panic does feed the CNBSs of the world, but assuming it takes a decent effort to get the numbers fudged to be better than expected (and of course later "revised"), I'm kind of surprised this didn't last a little bit longer. Is there panic forming out there? Only a few know for sure...

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  5. LNG bounce 7.50...PSLV...bounce 17.56...support where I will buy heavier is 15.30..SSRI support at 24.10....EXK...buy at 7.94 and 7.66...ANV..29.30

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  6. prop desk liquidating overweight positions into the openeing is all so far......should be a sideways day with stop shopping all day....wouldn't advise trading this unless you are a pro......and know who is head hunting your head and your ass.....

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  7. Margin calls taken out on ATPG, it was a good short at 11.20, heheeeeeeeee!

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  8. what happened to ATPG? anyone buying?

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  9. sorry , joe, didnt refresh the page, before i posted on atpg

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  10. Homer,

    When I short stocks, the music I listen to is Real Rock & Roll:

    http://www.youtube.com/watch?v=XWhInhE6emE

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  11. RIC support at 7.14 and 6.41...watch for 6.41.

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  12. good spot on ATPG....8.50 better hold today

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  13. gold holding very well today as the world searches for a place to put money.....the fiat ponzi has left them few places for liquidity.

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  14. I am watching ATPG too.
    No position yet.
    Perhaps Joe will post when it is time to buy.

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  15. oh my god, SRS up again, the world must be coming to an end

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  16. When MMs decide to take margin calls out and create max pain for longs which is the case in ATPG for those longs who bought and held with heavy margins, the theme song is, " Gimme Shelter", heheeeeeeeeeee!

    http://www.youtube.com/watch?v=WJDnJ0vXUgw

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  17. thats a WAR in ATPG pit.....support for GPL is 3.07

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  18. I admit i nibbled at 9.20 on ATPG

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  19. kli,

    Covered my ATPG shorts at 9.15, it gave me $2 today from 11.20 to 9.15

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  20. damn, solar keeps getting crushed. i would take a position on LDK, but earnings are next week. i dont like to roll the dice on earnins, especially in this mkt.

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  21. The ATPG longs who have bought on margin are asking for this:

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

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  22. Sold TNA this am for literally a $10 gain! Oh well. I'll sit out and wait to see the white in their eyes before buying anything. Good luck everyone.

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  23. kli,

    Rock & roll time in SGY at 28.70, have not covered short yet on that one.

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  24. Joes SnP supports....1175.....1130......then 1050 for the final guillotine......may hold 1175 so may wanna play a bounce

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  25. If ATPG doesn't hold 3.40 then its a buck

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  26. there goes goooooold...margin calls comin in fast now

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  27. damn , this mkt is sick. i keep thinking there is going to be a wicked reversal, but it keeps going down, down down. wow

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  28. Now you know why this site has its title

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  29. my stink bids are in....hehehehehe

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  30. yep, looking at today as an opportunity to reload.

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  31. Fri 12:30pm ET- Briefing.com
    Stocks are starting to rally. The surge coincides with headlines that the European Central Bank is ready to provide support to Italian and Spanish bonds if the...

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  32. It certainly was strong, but does lunchtime action count? ;-)

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  33. KLI predicted it... and it happened :)

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  34. QEs for Europeans, they announced it when S&P was around 1175, heheeeeeeee!

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  35. SAW ALU reacted to the news of ECB QE and I am all over it, good trading day for ALU.

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  36. Gartman said its QE to infinity...hehehe....said he had to reevaluate his gold call from yesterday....hehehe....that guy swings more ways than my brother inlaw

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  37. JOe mentioned ALU.....hehehhe....perfect.....its a French company......QE to infinity

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  38. Pounding ATPG now in the long side, in at 9.80, the other side of the coin now ( going long) for the day, heheeeeeeeee!

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  39. ATPG turned out to be an excellent play today, first short and now long!

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  40. Red,

    MMs did a magnificent job on ATPG today, they crushed the margin calls, took it down to $9 and then went long after taking margins out.

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  41. It's mesmerizing watching the action on even the S&P and Nasdaq. It looks funny until you realize some folks are getting pushed around pretty good.

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  42. Homer,

    Do not feel sorry for those getting pushed around and the reason for that is, Stock market is a casino and it's not free market, therfore any one trying to get in is soley responsible for their action especially the morons who bought on margin which is always a no no. When people decide to play in the game that is rigged, then responsibility soley resides on them. No one has ever forced any participant to play the market and if they do then no complaining. What MMs did today is legal, effective and part of the game. Heck ECB played it perfectly today.

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  43. Oh I hear you and you're not wrong, just saying its not funny, kind of sad. And yes, they shouldn't be in this water if they can't handle the undertow. Just makes it more obvious everyone is going to suck this dry until there's no action left.

    Was browsing the DNDN board yesterday and it just seems like the more things change, the more they stay the same. Folks on margin, playing with money they can't afford to lose, etc., and still the house keeps winning.

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  44. Homer,

    correct, what you just mentioned means, the participants would love to make the money powerful does and obviously the reason people get in the market is to make money. The only difference between those who control the market and regular participants is the capability to move it in either direction. From morality point of view, there is no difference since all participants know the market is rigged. When people complain about losing money and pointing finger at the ones who control it would not do so if they were making money which means if they had the capability and power to do it, they would have done it and that makes them as greedy as those who actually can cash in on the greed. The problem is most humans are not honest about themselves.

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  45. Question is will the news hold or do we have further to go? QE Europe seems a bit dicey with that cast of Country's.

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  46. As my nephews used to say, "true dat" Joe

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  47. Seeking Alpha article that lists both LDK & ATPG as short squeeze candidates.

    http://seekingalpha.com/article/285056-5-dirt-cheap-stocks-poised-for-a-short-squeeze?source=yahoo

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  48. I think I like EUO more an more now...cast of characters is more like it...

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  49. tom any eurozone news is BS.....but BS is the only thing that drives the market now.....view any news to fix the eurozone as TEMPORARY ONLY

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  50. KLI, I'm pondering some put options right before market close. I tend to agree with the TEMPORARY statement.

    The VIX has legs today.

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  51. Ooopsies...going to make the last hour exciting!!! Maybe a drop, then 10 minutes making its way back up? Sooooo exciting!!!

    Used to be these big swings, then a move to close near the previous close and everyone reports DOW up or down 40 points. Of course the wild daily swings left body parts all over.

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  52. The market just moved back to red. What happened to the ECB excitement?

    The MM's just had shorts for lunch! They herded them all up, then started the systematic slaughter.

    Free cognac for all the Goldman boys tonight!

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  53. ECB? Same thing that happened to the jobs excitement which was all of 6 hours ago. I am watching the S&P thrashing right now curious where they take it. Seems like one of those days when the real excitement might be the last 10-20 minutes. I guess I don't have too much to do on this Friday afternoon...

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  54. In ATPG at $9.23 - out at $10.74 ... and I only had a few minutes to check in here during meetings :) ... Thanks Kli et al

    What a game

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  55. Well it looks like I am wrong as usual ;-) Looks like a nice calm close for the people to hear about (DOW is up 60 or so). I think you're right Jay, they got out early and are already hitting the cognac for a job well done today. ;-)

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  56. Now they have to put together a bullshit arrangement before our markets open or you can count on another "Reuters" rumor report on Monday AFTER the Euro market closes again.

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  57. S&P downgrade of US credit is 1 notch to AA-plus from AAA

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  58. http://news.yahoo.com/p-reconsidering-u-downgrade-cnbc-001207261.html

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  59. with the credit downgrade of the US, is it a given the mkt will be down again monday? is it really that big of a deal, i am surprised it wasnt downgraded awhile ago. i am inclined to think this news may already be baked into the market

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  60. its funny, all week long the MSM were harping all week how bad the jobs numbers would be since the market was selling off so hard. almost seems like it was somewhat of a smoke screen, in the sense they knew the downgrade was coming this week. i am sure the insiders had this info of the downgrade coming this week.

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  61. buy the rumor....sell the new.....market up monday at endoday

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  62. "buy the rumor....sell the new.....market up monday at endoday "

    if you are correct, that will be one hell of a slaughter. drop the DOW a couple of hundred points, create more fear and setting a big bear trap, and whipsaw the mkt up , up and away. i will be watching.

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  63. Kli, I hope you're right, and we don't get a black Monday instead. Still trying to understand the implications of all this. Does the market shrug it off? What happens to all those funds, pensions, and anything else that's required to only hold AAA securities? Are we going to see forced selling as a result?

    And lastly, what, if any, does this mean for gold, silver, oil, etc? Sorry for all the questions, this is the first time in US history we have a downgrade, so not sure how to digest it all.

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