Thursday, August 11, 2011

BREAKDOWN!


Grind it out and crush the stops today would be my strategy after giving traders a severe migraine yesterday. If I am a ponzi master then the game would be to confound and pocket some nice change today with another round of whipsaw. I'm going to run your stops with a much more controlled range of trading. With the nice tanking today they may just want to spend some time with an upward bias before yanking the door open again. Rip and Run works well for pain too. Either way I just think a little steam out of the volatility is in order. If we are lucky they won't crush the PM headline prices right out of the gate but I wouldn't count on it. Of course any significant pullback in gold prices with the current fundamentals in place is going to be bought and bought significantly.

Miners did perform up to expectation so any pullback tomorrow should be met with buying....we'll see. A two or three day sideway's move is in order. Whether we get it or another hole shot out of the gate......again...I guess we'll see.

The performance of miners the past few days underscores why just holding a core and trading AROUND it is a reasonable strategy in this dangerous market. Remember...we have had 6 months of beating up this trade. Holders of the miners are looking for profit to dump this trade. Keep your cash in case this whole mess collapses but a core of PM miners is as good as anything else to hold here...at least in my opinion. Short post without TA...I'm on the run at this hour and tomorrow will be another tough day to trade for me. We're all on the road to hell together so help to contribute in the comments whatever you think is applicable to the current economic conditions. I really like anecdotal intel in your areas so don't hesitate to include these observations all.

35 comments:

  1. and it starts......again..

    http://www.zerohedge.com/news/todays-crunch-catalyst-asian-banks-commence-cutting-credit-lines-french-banks-sparking-self-ful

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  2. nibbling on OSIR...for l/t trade..picked up little DCTH with Euro sales efforts ramping up...

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  3. 30 yr treasury auction at 1pm est...might be a good time to jump into shorts on any push up prior...swing trade only tight stop..

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  4. Agree, honest. Gonna try swinging some of joe's rwm...also buying some phys and pslv on this pullback 'cause that's what I'm comfortable owning longer term. Also waiting for a ric pullback which never seems to come. Have a stink bid in...Best of luck to all. Red, your dentist scenario hilarious.

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  5. Would y'all take a look at wbk for me? Thinking of buying on pullback for huge divi since I am out of some of my l-t paying stocks. It's Australian, but a financial. Also run by a woman!

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  6. DCTH starting to look attractive, way oversold. It could double from here but requires patience.

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  7. Kli, Thanks for your e-mail response.

    This is a good read on the current market environment.

    http://www.zerohedge.com/news/guest-post-welcome-age-instability


    "In other words, the Status Quo is now addicted to unlimited flows of free credit issued by central banks. If the flow continues, then inflation will destabilize it; if it's cut off, then rising interest payments will destabilize it. No matter what policy path is taken, the result is the same: instability and destabilization."

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  8. Yep, klc that sums it up...also look at dag, a little birdie told me to buy dec. corn futures if anyone is interested, I don't trade futures.

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  9. Thanks. I'll check it out.

    "The misguided attempts to engineer a false stability by suppressing "undesirable" volatility have created an intrinsically fragile system that is doomed to crises of ever greater dimension even as the periods of calm between crises shrink from years to months. Recall that risk is like water in a closed system: it can never be squeezed into nothingness. The more pressure that builds up, the more inevitable it is that the risk will burst out in some part of the financial system that was viewed as “safe” and “stable,” for example, home mortgages."

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  10. Random local conditions. Kansas....local homes sale prices holding, but time on market increasing. Entry level housing sales suck. Still waiting for the commercial property collapse. Ice cream is out, self serve frozen yogurt is the latest thing. Why so many "cupcake stores" opening recently. went from zero to 4.
    Western vehicle dealers stocking up. Expecting farmers having money to spend this fall.

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  11. Anyone have a guess how many times they might raise gold margins? They keep mentioning they had to do it seven times to silver to get it to "correct".

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  12. San Francisco area, rents moving higher..gas not coming down at all with oil price drop, tech still strong esp. social media, people addicted to Apple as everyone has one here, bart and muni ridership up, home prices actually stable...homeless count soaring, old ladies in the street, food charities with block lines and all colors embedded, opportunity crimes on poor weak and women picking up..often taking any jewelry right off them in broad daylight...

    hopium is powerful in the city...got popcorn..

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  13. sorry for MIA but busy....bot AG here small ammt...miners popping

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  14. raising margins in gold will only solidify the trade as they get rid of some specs...strong hands are in it then....also this is a game that is no longer in our court chinese russians etc buying.....raising margins in gold will have little effect except to pull it back to trend

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  15. http://messages.finance.yahoo.com/Stocks_%28A_to_Z%29/Stocks_D/threadview?m=tm&bn=5034&tid=72994&mid=72994&tof=1&frt=2

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  16. Little effect at all or little effect in the long run? Thanx...

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  17. I think real buyers are not effected by margin hikes, only traders are. I read someone chart recently that showed declining open interest/ short covering to be the possible cause for a future drop in gold price.
    So the three factors are: real buyers, traders, short-coverers.

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  18. Thanx - I'm just trying to over think the trade (as usual). The margin hikes seemed to work for silver.

    Just got done listening to the discussions that always occur at times like these. Ban short selling. Poor GS was down 10% caused by evil short sellers. I had a tear. Evil short sellers caused Lehman's troubles, blah blah blah. They really could care less about shorts taking down any other company but the "banks" are not to be touched.

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  19. NO effect in the longer run and if we get multiple attacks and margin calls then down to possibly the lower channel/support....remember all...gold is owned by "kings"...they WILL NOT in this environment transfer their gold to strong hands elsewhere in any quantity ...if they take the prices down......strong hands will buy and buy heavy....some of those strong hands are outsiders

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  20. Thanks for answering my question yesterday Joe.

    Kli are you buying any PHyS or PSLV here?

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  21. added tiny pslv to small pslv this am......just sold small portion of RIC and EXK....these are trades around my core.....added small ag

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  22. will buy phys if they hit a lower channel...haven't looked

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  23. ABAT still hasn't reported, filed for extension I think. Nice move today but low volume. For today I think the "rising tide" is what's lifting this boat while we wait for earnings.

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  24. Two trips this summer, one to Vail and the other to the beach in S.C. You would never, ever know there's a recession. Folks from many states in both places, of course Vail is full of multi-millionaires, but the beach packed too. In '09, beach was very deserted.

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  25. Short selling banned in Italy, Spain, France and Belgium? LOL, harken back to how well that worked in the US...the poor banks are being beaten down by the evil shorts. I'm sure they're not lying when they say they are just fine. ;-) I think our banks said that as well. Real question is what is the exposure of U.S. banks in Europe?

    Hopefully EUO takes another hit and I can get some more.

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  26. Vail is emblematic of the disparity........but aint it wunnerful......

    EUO triangling traders to the bitter end.....should break its base near term around 140

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  27. sister - living at the beach in SC - traffic seems about the out the same as 2007-2008. I am sure unemployment is down as usual in the summer here. In the winter a lot of the mom and pop operations close for Dec/Jan and waitresses, hotel workers, etc go on unemployment. Many of those employees view that as annual paid vacation.

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  28. I haven't seen any traffic reduction here in Seattle due to the recession. However, anytime there is a government holiday, the city highways look like a ghost town.

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  29. ZH....Stop the presses. Barely did we have time to report that European regulators failed to impose a coordinated short selling ban, that Bloomberg reports that the countries most impact by the market plunge are about to impose standalone short-selling bans. These are Belgium, Italy, Spain and France. In other words, it really is on and the 2008 Lehman PTSD flashbacks may now resume.

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  30. Here on LI traffic is busy and snarled as ever, makes you wonder what it would really be like if UE was around 5%! What is striking is number of store fronts that remain empty after the 2008 crash and how many more store fronts going up for rent. TheThe number of half vacant strip malls are increasing as well. In my town we lost two full service restaurants, a dry cleaner, quiznos and a yogurt shoppe since May. On a brighter note we did have a gourmet cup cake shoppe open up in town! On a trading note........ I messed this week up bad!

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  31. ... and Tom, don't forget all the banks that are set up shop at street corners all over Long Island ... life may suck for moist regular businesses, but not for banks. Their retail tentacles are stilll growing.

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  32. Indeed...... No shortage of Bank's that's for sure!! Guess they want to make it convient to collect those ATM fee's

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  33. Inlet, where are you? I live in Charlotte, go to Charleston and beaches there often. Yes, Kli, Vail is soo nice. My friend who's a financial advisor has a house up, up the mountain at Bellyache Ridge with 36 gorgeous acres and views of the Rockies/wild flowers everywhere. It is heavenly, but I love S.C. beaches, too. Felt so lucky to go from Rockies to Low Country all in the same month. Our country is truly beautiful, if only it belonged to us again!

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  34. Sister - Guess where from the handle. :>) Just south of MB.

    Have lived in the Charlotte area in late 80s and early 90s, would not care to live there again. Would not mind living west of Charlotte nearer the mountains (a few acres) - always thought the Lake Lure area was beautiful.

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